SUMICHEM Q2 FY26 earnings call.
A source-linked concall view: reported numbers, management language, guidance, commitments and risks that should carry forward.
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Revenue
₹930 Cr
verified against source
Revenue YoY
-5.9%
reported change
EBITDA
₹218 Cr
latest reported figure
Source
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record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Sumitomo Chemical India reported a disappointing Q2 FY26 with revenue declining 5.9% YoY to Rs 930 crore due to excessive monsoon rainfall that crippled field spray operations across the Kharif season. While H1 revenue grew 9% YoY to Rs 1,987 crore and PAT rose 11% to Rs 356 crore, Q2 volumes contracted meaningfully. Gross margin expanded 50bps to 43.1% demonstrating pricing discipline, though EBITDA margin compressed 140bps to 23.4% on lower operating leverage. The company maintained its channel health with negligible sales returns and no price cuts. Export revenue declined 4% YoY in H1 (South America down 33%) but management sees early stabilization signs globally. With reservoirs at full capacity and soil moisture adequate, management expects a strong Rabi recovery. The Rs 500-600 crore Dahej capex for 7 products remains on track, with 2 approvals received and 5 expected by FY26 year-end, targeting revenues from CY2028.
Colored figures show movement against the previous available record.
Guidance to track
- With full reservoir levels and adequate soil moisture, management expects normal Rabi season with rebound in farming activity and input demand, offsetting Q2 weakness.
- 7 products submitted for feasibility studies at Dahej; 2 already approved, 5 expected by FY26 year-end. Target revenue commencement from CY2028.
- Rs 8-10 crore investment at Tarapur to manufacture Excalia Max TG locally, eliminating import dependency for Indian market requirements.
- Management confirms current pricing is sustainable and commits to maintaining price levels even as volumes normalize in H2, rejecting any competitive pricing pressure concerns.
Risks flagged
- While Rabi conditions appear favorable, any disruption from unseasonal rains or adverse weather could further impact H2 recovery, which is critical for annual growth targets. This risk was raised by multiple analysts.
- Entire bio-stimulants industry faced sales halt from mid-June to end-September due to new regulations requiring license endorsement at manufacturing sites and state level. Varad BioSciences' 9% revenue contribution (down from 11%) remains at risk until full regulatory clearances are obtained.
- Despite being discussed for years, Dahej project timelines continue to extend. Management now indicates 2028 for initial revenues, raising questions about execution capability and parent company coordination efficiency.
- Brazil sales declined 33% YoY due to channel inventory liquidation and shipment delays, with no firm timeline for recovery. Analyst raised concern about international business growth expectations not materializing as planned.
Key quotes
- The first 18 days of July went absolutely dry and then from 19th July the rain started but it never stopped till September end. This made it very difficult for farmers to go into the field for spraying operations. It was a very disappointed quarter for us.
- Dealing with Japan as a country... the speed can be lesser than what we expected to be. But having said that, once they decide, there's no going back. We have a very clear guideline from Japan that Sumitomo Chemical India will be the manufacturing hub for Sumitomo Chemical Japan.
- Whatever growth we will get in terms of volume demand in the market, we have the ability to source this product in a fairly short period of time from the market either through China or through India and other suppliers. We do not see that as going to be a bottleneck for our growth for future.
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