SUMITOMO CHEMICAL INDIA LIMITED (NSE: SUMICHEM) Q4 2025 Earnings Call dated May. 28, 2025
Corporate Participants:
Unidentified Speaker
Chetan Shantilal Shah — Managing Director
Suresh Ramachandran — Deputy Managing Director
Kunal Mittal — Senior Vice President – Planning and Coordination Office
Anil Nawal — Chief Financial Officer
Sushil Marfatia — Executive Director
Analysts:
Unidentified Participant
Bhavya Gandhi — Analyst
Himanshu Binani — Analyst
Chintan Modi — Analyst
Ankur Periwal — Analyst
S. Ramesh — Analyst
Naushad Chaudhary — Analyst
Dhruv Muchhal — Analyst
Dhavan Shah — Analyst
Presentation:
operator
Ladies and gentlemen, please stay connected the conference will begin shortly. Participants are connected to Sumitomo Chemical India Limited conference call. Please stay connected, the call will begin shortly. Thank you. Ladies and gentlemen, good day and welcome to the Sumito MO Chemical India Limited Q4 and FY25 earnings conference call. This conference call may contain forward looking statements about the company which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder all participant line will be in listen or remote and there will be an opportunity for you to ask question after the presentation concludes. Should you need the assistance during the conference call please signal an operator by pressing start and zero on your touchtone phone.
Please note that this conference is being recorded from the management today. We have on the call Mr. Chetan Shah, Managing Director, Mr. Shashil Marfatia, Executive Director, Dr. Suresh Ramchandran, Deputy Managing Director Mr. Kunal Mittal, Senior VP, Planning and Coordination Office Mr. Anil Nawal, Chief Financial Officer and Ms. Deepika Trivedi, Company Secretary. Colleagues from SGA their Investor Relation advisor. Now I hand the conference over to Mr. Chetan Shah, Managing Director of Sumitomo Chemical India Ltd. Thank you. And over to you Mr. Shah.
Chetan Shantilal Shah — Managing Director
Thank you ladies and gentlemen. A very good afternoon to all of you and welcome to the conference call to discuss Q4 and financial year 25 financial performance of our company. First of all, let me begin with saying that India’s agriculture sector continues to play a foundational role in the national economy. Accounting for almost 46% of countries employment in financial year 24 up from 44.1% in financial year 18. Improvements in irrigation coverage, input availability, institutional credits have significantly bolstered the sector’s resilience against climatic shocks. These strides are now translating into robust output. With record production achieved in financial year 2425 and a targeted 1.5% year on year increase in curry food grain output for financial year 26.
India’s farm exports tell a compelling story. More than doubling over the past decade surpass $48 billion, outpacing growth in both manufacturing goods and services. Despite intermittent export restrictions. India’s agricultural policies have demonstrated their global impact. With price shocks revomiting across international markets during export bans and on staples like rice and onions. India’s agriculture sector is an inflection point. With strategic policy support, enhanced awareness and technological integrations, the industry can only meet domestic, not only meet domestic food security targets but also fortify its leadership role in global agri trade. The domestic environment for agriculture inputs has recently seen a turn for better, underpinned by favorable monsoon and a strong rubbish season signaling green shoots of recovery.
On the global front, the agrochemical export landscape continues to grapple with pricing pressure and climate volatility. Nonetheless, with channel destocking largely behind us and ordering patterns normalizing in key export markets, the industry is poised for gradual stabilization. Prices appear to have bottomed out, providing a base for recovery in subsequent quarters. Before I invite my colleagues to share more information on our company’s performance, I would like to highlight few important points. In financial year 2425 our team delivered 20% volume growth in our branded business in Indian domestic market and 30% plus volume growth in exports over last year.
In addition to several premium branded products in our existing portfolio, several products newly launched in last three years or so contributed to this volume growth. We are extremely pleased with our team’s performance to deliver such volume growth. Our team also delivered highest level of profitability in financial year 2425 both in terms of absolute pet numbers and also in terms of perceptive margin across all levels, EBITDA and PAT levels. Further, we are ready to launch several new products in financial year 2526. Among such portfolio, one newly launched patented global blockbuster product deserve a special mention. The product Indifllean which is a original investing sorry which is formally a Japanese innovation by our parent company has demonstrated impactful performance in few markets wherein this was launched in last couple of years.
We are also thankful to Indian regulatory authorities for granting fast track approval of this product under a special window for new global launch products. Our teams are launching this product in India under brand name of Excelia Max and based on various technical evaluation and free plans data of global performance and in India we feel this can be next blockbuster product from Sumizom. I request my colleague Suresh to talk more about this very soon. Before that I think it is also important to mention that the technical or the active ingredient as you call it for this newly launched globally blockbuster product will also be made by us in India within next 12 to 15 months.
This will be made in our existing Tarapur plant and all the trials and technical evaluation has been completed while we are finalizing plants to set up new greenfield plants and Raheej for manufacturing multiple products for our parent company scc. We thought making this newly launched global product at Tarapur in interim period would help us accelerate ramp up of this production in Indian market and also provide early experience of manufacturing new faculty products to our projects and manufacturing teams. This experience would be very helpful to leverage when we set up larger level greenfield backward integrated plant for global requirement over next couple of years.
Our dredge plan remains intact. We already have secured the environment clearance valid for 10 years, planned capacity requirements and our overall site layout designs are ready. We plan to soon start work on setting up multiple refill plants at VOYAGE for multiple scc innovated products and intermediates and technical studies for the same are in very very advanced stage. We plan to invest as informed earlier an initial investment of 300 crore to start with and we are prepared for more investment depending on the number of products we finalize and the time that will be required to put up each and every plant.
These various manufacturing capacity expansion initiatives is very strategic long term growth strategy for us at SCIL as well as for our parent company SCC as diversification of existing Japanese manufacturing facilities and also newly launched global tourist expansion plans. My colleague Kunal will cover more about this little later. Thank you very much and with that I will now hand over the call to my colleague Suresh to talk about our performance.
Suresh Ramachandran — Deputy Managing Director
Thank you, thank you, thank you. Chidinbai Good afternoon everybody on the call and thanks for joining us today. FY25 was a year of steady recovery and strategic progress for Semidomo Chemical India Limited. The company delivered a resilient performance marked by consistent volume growth across key segments despite a challenging pricing environment that persisted throughout the year. Our revenue growth for the year was primarily volume led, underscoring the strength of our domestic franchise, robust channel engagement and timely execution of demand generation initiatives. This was complemented by sustained improvement in operational efficiencies and cost optimization measures which enabled us to expand margins and deliver strong growth in profitability.
We delivered 11% revenue growth over a year on year basis, led by substantial expansion in volumes across both domestic and export markets despite adverse pricing trends that impacted realization by approximately 10% in both segments. The performance underscores our commercial agility and execution strength further reinforced by improved assert utilization and optimized distribution efficiency. Profitability saw a significant uptrend during the year. Our EBITDA grew by 33% and packed by 37% with both margins reaching their highest levels in our history, a result of superior product mix, strategic sourcing, procurement discipline and early liquidation of high cost inventory. EBITDA margin improved by 339 basis points year on year to 20.1% while net profit margin expanded by 308 basis points to 16.1%.
Our domestic business remained a key growth engine supported by Healthy Karib season, strong Rabi season and deep engagement through initiatives like our flagship campaign called Everyday Farmers Day Campaign through which we reached over a million farmers and many thousands of channel partners across the seasons and across the country which helped us in the robust growth. Exports, though challenged in quarter four due to global market headwinds around select molecules posted a meaningful year on year full year growth. Our strategy of geographical diversification and product realignment enabled us to to maintain resilience in key markets. We launched several new products in the last financial year which includes products like Meshi Potion army and also we received Latest registrations for 2 next generation SCC molecules namely Excalia Max and Lentigo which is a rice herbicide.
We also commenced commercial production of ctpr that is Chlorampropronopril at our Tarapur facility, advancing our backward integration strategy. Our subsidiary Barix Agrosciences also delivered a commendable performance in its first full year under SEIL with revenue growth of 82% and turned around from a negative EBITDA margin to a positive 16%. Together these efforts have culminated in making SEIL emerge leaner, stronger and more future ready. Now coming to the outlook for FY26 building on the momentum of FY25, we enter FY26 with renewed strategic intent and operational confidence. This year is poised to be a period of growth supported by a favorable agroclimatic outlook, early monsoon onset and stability in commodity pricing and sowing patterns.
Our focus will remain firmly on driving volume led growth, scaling up recently launched products and sustaining margins through tight cost controls and optimized operations. The commercialization of Excalia Max and Lentigo, both high potential patented molecules from SCC is expected to significantly enhance our competitive position in key crop segments. Apart from SCC molecules, we are also poised to introduce another three to four products under 94 registration in India. We will continue to reinforce our domestic franchise through deeper channel penetration, customized farmer Engagement program and digital LED demand generation. The third season of EDFD to be launched from June 15th which has already been communicated to our teams on the ground, will further scale our outreach and grassroots impact.
While export markets present selective challenges, particularly in Latin America where agile approach, expanding footprint in Africa and Asia and robust product pipeline will help balance risks and capitalize on emerging opportunities, we also remain committed to improving operational metrics. Our efforts around inventory control, receivables, discipline and working capital management will continue to be a core priority even as we prepare for the Next phase of scale. With this multi pronged strategy, we are confident of delivering another strong year. Making FY26 a defining year of resurgence for SEIL anchored in innovation, execution, excellence and market agility and discipline.
With that I will hand over the call to my colleague Mr. Kunal to talk about our CAPEX plans.
Kunal Mittal — Senior Vice President – Planning and Coordination Office
Good afternoon everyone. Now coming to our new CAPEX plans. As part of our long term strategy to expand our manufacturing capabilities and our manufacturing skill set and also to align with our parent company FCC Japan’s global vision, our board has approved two strategic CAPEX initiatives aimed at expanding our skill sets, cost efficiency and also supporting the innovation delivered by the technical teams in India. So first such project is brownfield extension at our Bhavnagar site for a Q for a very important SCC global molecule. We are expanding our production capacity at our Bhavnagar for this strategically important SCC invented and a globally successful molecule.
If you recall, for the similar product we had set up a capacity about one to two years back. And with the success of this first plant and the initial capacities in last two years we have consistently delivered the product at a globally acceptable highest quality standards, meeting all quality standards, demonstrating very high utilization of this plant capacities and extremely competitive cost situation including our ability to react to the global pricing pressure and competitiveness. So with this kind of a confidence which our technical teams have demonstrated, our board was very pleased to approve this CAPEX to enhance our capacities with the further investment of about 55 crore Indian rupees.
And with this we are targeting to double the capacities. And it will also means this entire additional capacities can be used to expand our exports to our parent company. This plant is expected to be completed by Q4 financial year 2026-27. This facility will enhance our ability to support the global requirement of a very important SCC molecules and SCIL will be able to meet 40 to 50% of the global requirement. And in the future, depending upon the success and the volumes of this product and this project, we can even consider in the future if there is a need to further expand these capacities.
The second project which we want to highlight is again a brownfield project at Tarapur. This product as earlier was touched upon by our Managing Director Shah San. It’s a recently launched global molecule that is expected to be a blockbuster product and in India also this product has recently received regulatory approval for sales in the Indian market. We will be manufacturing this product at our Tarapur facility and we will be using our existing facility with some modifications in the equipment and the line to be able to manufacture this product. The estimated capex for this project is less than rupees 10 crore.
And the timelines are very similar to the first brownfield project of Pavnagar. So the Tarapur brownfield project is also expected to be completed by financial year 26242627 Q4. This investment will also allow us to demonstrate SCIL’s ability to manufacture newly launched global innovated patented molecules. And this will give us lot of confidence to both our technical teams in India and our parent company that SCIL can manufacture new and the recently launched products as well. And it is something which is a kind of a new initiative being done by our company with the support of our parent company.
And we will also be able to support the global expansion of this product in the future. And with this the 100% of the global demand is expected to be met. 100% of the domestic demand in India is expected to be met from the production from India in next two years or so. This will also be a very strategic step towards a state of the art much much larger capacity backward integrated greenfield facility for the same product at Darij. And as Shastan also mentioned that the experience of this product in our Tarapur existing facility will give more confidence to our teams in India and Japan that SCI can set up much larger level backward integrated facilities in the future.
We are at a currently at the advanced level of technical evaluation in discussion with our parent company and once this is completed we will provide update in next one to two years. Our technical team will work in parallel on both the initiatives. These two brownfield expansions as we have mentioned, one in Bhavnagar, one at Tarapur and at the same time in parallel we are continuing to work towards setting up a new greenfield facility at Dahij and maybe for this particular product and some more additional product. So the H strategy remains for multiple products and multiple plants to be set up in next three to five years.
I think our Managing director has also mentioned about our Taihe’s expansion and its importance and I don’t need to emphasize more on this. So with this now I request my colleague Mr. Anil Naval to please talk about the financial performance of the company.
Anil Nawal — Chief Financial Officer
Consolidated Q4FY2425 financial performance. Despite overall pricing headwinds, we recorded revenue of rupees 79 crore in Q4FY 2425 which is up by 1% as compared to rupees 674 crore in Q4FY 2324. Sequentially the revenue was up by 6% from rupees 642 crore in Q3FY 2425. Gross margin in Q4FY 2425 are 40% as compared to 41% in Q4FY 2324. EBITDA came at rupees 120 crore in in Q4FY 2425 as compared to rupees 140 crore in the same period last year. Sequentially EBITDA was up by 13% from rupees 106 crore in Q3FY24 25. EBITDA margin in the current quarter stood at 17.6% as compared to 20.8% in Q4FY23 24.
Profit After Tax stood at Rs. 100 crore in Q4FY24 25 as compared to Rs. 110 crore in the same quarter last year. Sequentially PAT was up by 14% from Rs. 87 crore in Q3FY 2425. VAT margin stood at 14.7% visa vis 16.3% in in Q4FY 2024. Now coming to our consolidated performance for financial year 2425, revenue from operation in H1FY 2425 stood at 3149. So there’s a correction. It’s not H1, it’s a full full financial year stood at 3149 crore rupee crore rupees up by 11% as compared to rupees 2844 crore in FY 2324. In financial year 2425, domestic agrochemical revenue contributed about 78% of our overall revenue with export contributing the rest.
In FY2425, insecticides contributed for 40% of total revenue while herbicides, plant growth regulator and fungicides contributed about 21%, 11% and 10% of total revenue respectively. From a business mix standpoint, our domestic business continued to exhibit strong momentum, growing 8% year on year in FY25 contributing 78% to revenues. Export revenue surged 22% year on year supported by penetration into newer geographies. Despite Q4 headwinds in effect in FY24 25, ships to South America and North America increased by 78% and 44% respectively as compared to the same period last year. Our full year Gross margin expanded by 337 basis points year on year to 41% underpinned by favorable product Mix document efficiencies and proactive liquidation of high cost inventories.
FY25 also marked the highest profitability in company’s history. EBITDA stood at rupees 632 crore in FY24 25 witnessing a jump of 33% as compared to rupees 475 crore in 2324. Our EBITDA margin stood at 20.1% in FY24.25 as compared to 16.7% in the same period last year. The profit after tax for the financial year amounted to Rupees5.6 crore reflecting an increase of 37% compared to the previous year’s figure of Rupees 370 crore. Now we’ll take a pause here and request moderator to open the floor for question one by one.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Savya Gandhi from Dalal and Broja Stockbroking. Please go ahead.
Bhavya Gandhi
Hi. Thank you for the opportunity. Just wanted to ask a couple of questions from my end. Sir, what is the revenue expected from the two molecules that we have received registration for Excelia Max and Lentigo?
Suresh Ramachandran
See, we are just about to launch this career season. Our first primary objective is to ensure proper launch acceptance by the farmer through demand generation activities and deliver the performance exceeding the expectations of the farming community. That’s our first objective. Obviously you know, once the farmers accept this molecule based on its merits and performance, you know I think it will go into. Our aspiration is big but we can’t commit any number at this point of time. Given the potentiality that it has done very well wherever this product was launched, we expect it to be a good number business for India also.
Bhavya Gandhi
Okay, so currently the technical might be imported from Japan and we might be just formulating it or the entire formulation is being imported at the moment.
Suresh Ramachandran
Now we are importing technical and formulating it in India.
Bhavya Gandhi
Formulating in India. And with respect to the Bhavnagar molecule expansion that we are saying is it a patented one or the brownfield expansion that we are planning 55 crores or is it a patented one or is it a generic product?
Kunal Mittal
It is not a patented one but it is A proprietary, which means it was innovated by SCZ and still at this point of time we continue to have a very strong global market share in this product. So it is out of patent now, but it continues to be a proprietary.
Bhavya Gandhi
Fair enough. And just one more thing. On the specialty basket, largely it has been constant only. So if you look at this year number, specialty has been closer to 900 crores. Two years back also it was somewhere closer to thousand odd crores. Whereas our gross margins have improved drastically in last two years to 41%. Is it possible to guide at least on the gross margin what is the long term sustainable gross margin and what is the outlook for speciality as opp? I mean from thousand crores where do we intend to take it? Maybe double it? Because we’ve launched couple of products in last three, four years.
Kunal Mittal
So yeah. So in a specialty portfolio also we have a range of product like even some of the segments like animal nutrition, eht, even they qualify for specialty portfolio. So while you are right that the overall specialty portfolio has remained same but within specialty portfolio we are upgrading our portfolio with a newer and higher margin product. So fundamentally and strategically whatever we need to do that is being done and that is what has caused and resulted into increase in our gross margins. And then all the new products launched by the company in last 3 years which are mainly towards the agro division of the company.
And as Dr. Suresh also touched upon, these products are seeing good traction in the market. And as a company we don’t push that in the initial one or two years itself, the product volume should ramp up to a very high level. And historically also always we have delivered consistent growth over three to five years in terms of volumes ramp up. So with the volume ramp up of this newer product, the share of specialty should enhance in the future. And from the margin point of view, as you can see at the company level, because of this strategic initiatives of new products and high margin product, the overall margin profile has gone up by about 3, 3.5% from 37.6 to almost 41%.
And our endeavor will continue that we want to maintain this kind of margin going forward. And we don’t believe that there is anything one time or kind of exceptional items in these margins which gives us some sort of indication that these margins are not sustainable. So we are very confident to be able to maintain and sustain these margins.
Suresh Ramachandran
Yeah. Just to add one comment over what Kunal said, as I mentioned during my initial comments, we launched a campaign called Everyday Farmer Day meeting across the country where the Teams have been given a mandate of selected products which we shortlisted based on the margin and potential of future, including the new products. The focus of the team has been channelized into those kind of products which gives higher returns to the company. So that is also helping us in terms of product mix.
Bhavya Gandhi
Fair enough. And just one more thing on the exports to Japan. So that number has dipped again for this year. I think we had guided that at least we will be doing 125 odd crores this year and 250 odd crores next year by supplying to the parent that has again missed. So if you can just help us understand what is not working or what we are trying to improvise by supplying it to our Japanese exports on that as well as on the uniform.
Kunal Mittal
Yeah. So this exports to our parent company Japan, it consists of several products and one or two products we were already making earlier and recently we expanded capacities to add five or six products. So some segments and some products out of this due to delays in registrations globally or due to the global volume slowdown situation in last one or two years, what has caused. So we are seeing that there is a little bit of a delay in some of the products ramp up. But at the same time while the same facilities we have upgraded to be able to make other products.
So overall in terms of capacity utilization we are in satisfactory level. And instead of exports to Japan, we have been able to make some products in India itself. If you see our investor presentation on slide number five, we have also mentioned that we have started the commercial production of a very important product called CTPR which recently got off patent. And we have started manufacturing that product also in the same Dharapur facility. And we have started sales of this product in Indian domestic market. So in terms of utilization of these facilities, we are enhancing the utilization level every year.
And in terms of exports to Japan, yes, there is a little bit of a slowdown and some delays. But we are on track to grow it consistently. And with these two new projects which we have announced, we will be able to further enhance both the volumes and also the product portfolio including one newly launched product.
Bhavya Gandhi
Also just last thing on the nufam because the indie fleet product is already launched in the Latam markets. So how are we seeing the response? And are we still supplying tebuconazole to the Latam market and outlook for Latam market?
Chetan Shantilal Shah
Yes,
Kunal Mittal
yes. So we are supplying tebuconazole. How much this volume, I mean how much I think New Pharma performed, It is a kind of a third party in Terms of that way it is a private company so their numbers are not in public domain. But whatever you can see in the public domain, this product seems to be working well and has made a lot of impact in the Brazilian market. But the specific numbers we don’t have access to and it is not in public domain.
Bhavya Gandhi
Our outlook for exports to Latam market.
Kunal Mittal
You are talking about this particular table for indie flame combination, right?
Bhavya Gandhi
Yeah, yeah. And overall outlook as well for Latam.
Suresh Ramachandran
Overall, you know Latam picked up early, you know last year first three quarters did well in the quarter four. It, you know, bent little bit sluggish. But based on our market information and all it seems to be coming back on track. We need to wait for one or two more quarters to really see to. Come back to normalcy. We are optimistic.
Bhavya Gandhi
Fair enough. I’ll get back in the queue. Thank you. Thank you so much for the answer.
operator
Thank you. The next question is from the line of Himanshu Binani from Anant Ragi Financial Services Ltd. Please go ahead.
Himanshu Binani
Hi sir, thank you for taking my question. So my first question was largely on the CapEx side the two new incremental CapEx which you have announced. So maybe if you can like give a better sense in terms of the revenue and the margin expectation from those. And second on the Karapur side, this 10 crore capex so this is largely catering to the domestic branded business or this would be for the exports.
Kunal Mittal
Yeah. So first I will take the second question. You are right as we have mentioned in the presentation also in the Tarapur it is not. We are just modifying the lines to be able to manufacture this new product which is globally also recently launched product and primarily for few months production will be utilized only for the Indian domestic market and for the global requirement we have to still study more and set up a new greenfield site at the H with the backhorn integration. So this site primarily purpose is for Indian domestic market because in Indian domestic market itself we are expecting as Dr. Suresh mentioned, very good ramp up of the volumes and impactful performance in the Indian market. And on your other question, the first part which is about the capex which we are undertaking. So the margin profile of this is expected to be similar to the projects which we have delivered earlier.
Himanshu Binani
Okay. And the revenue targets.
Kunal Mittal
Evolving situation because sometimes some of these products the pricing goes up and down as per the global situation. So at this point of time it is very difficult because we are still like say 18 months away from the commercial production. So. So whatever is the sales price based on that the. The Top line goes a little bit up and down but from margin point of view we are confident to that this product should be able to give us a good return on investments and even at the company level as you can see like from the peak revenues of 3,500 crore even if the revenues are lower but as you can see the profitability wise we have delivered the expectation so the same kind of philosophies are also coming up with all of these capex projects we will not be able to very confidently give you how much revenues but profitability wise we’ll be in line with expectations Expectations.
Himanshu Binani
The second question is largely on the margin side so if you can like help us understand the margin differential between the domestic and the exports business for 4Q as well as for FY25 and how one should actually look into the overall gross margins basically 426.
Kunal Mittal
As a strategy I think we know because it’s a commercially sensitive information we never disclose the specific margin between domestic and exports or between segments but as a Trend I think Dr. Suresh has already mentioned and I request him to little bit expand more about the outlook and the margin expectation but we will not be able to give a specific breakup between export and domestic.
Suresh Ramachandran
Yeah, generally our export business primarily we export technical grade. In technical grade generally the margin is slightly lower than the formulation. In formulation which is primarily domestic market we invest quite a bit of marketing and promotional activities Naturally the margin would be slightly higher compared to the technical grade pesticides we have delivered a record margin like when Anil spoke or Mr. Chetan Shah spoke We delivered highest ever margin in terms of absolute number and also in terms of percentage and during my comments also I mentioned that we would like to further strengthen it with the launch of the new products with more focus on intense demand generation high margin gross margin products. Our endeavor is to increase the margin compared to what we delivered in 2425.
Himanshu Binani
Maybe differential basically into the exports and the domestic margins Any, any ballpark numbers would be like good.
Kunal Mittal
Sorry we will not be able to give any forward looking specific numbers.
Himanshu Binani
Thank you.
operator
Thank you. The next question is from the line of Chintan Modi from Haipong Securities Please go ahead.
Chintan Modi
Hi, thank you for the opportunity sir, could you highlight how much was the. Revenue achieved from those 56 molecule in FY25 which is specifically made for the parent.
Kunal Mittal
So see as you can see see we do not give the specific product wise breakup and all but you can see that from the numbers in the presentation the total exports to Japan Is at about 100 crore plus level.
Chintan Modi
Okay, okay. Second, with respect to the margins, see. For these products that you are talking about, like you know, the two new plants which are newly launched product that. You will be manufacturing. So when you do this for the. Your global requirements, the process and everything. Is similar to what Japan follows or there is some process innovation that is. Being done in India by the Indian team.
Kunal Mittal
So, so I think these two are the different products. One is a newly launched product and one is the product which we are already selling in India for many years and already making in India for now two, three years. So on that particular product, lot of innovation has been done by SCIL in India. And even before starting the manufacturing two years back, a lot of process innovations were done. And those kind of activities in terms of process innovations and some efficiency improvements on a gradual and consistent basis continues by our team on a regular basis without significantly changing the characteristics of the product.
So that kind of activities continues for the second product which is just a newly launched global product which will be starting the manufacturing in next 18 months or so. So for that to start with, we are following the global processes. And gradually once we start the manufacturing, we will look at the opportunities to optimize the processes. And also when we set up a larger scale new plant which is decor integrated at the H for the global requirement that time also we will see that how much process innovations can be done.
Chintan Modi
Okay. And so in the similar context, so the margins that you make on such. Kind of products that where you would. Have done some process innovation is generally higher than your domestic margins or similar to domestic branded business.
Kunal Mittal
Broadly it is similar. And what I think we have always maintained whenever we announce any kind of a capex is that any of these investments will not be negative for our existing company level margin. So in these kind of projects also we are earning at a company level margin. But I think Dr. Suresh also touched upon because some of these products we are exporting technical to our parent company. So in terms of margins for formulations or margins for marketing and distribution of the product, that is something which comes in the global affiliates and that is something where the both efforts and margins are not being coming to scil.
And but the same time in the domestic market we get also the margins for the formulation, for distribution, for marketing and all those kind of activities because we accordingly take that much efforts and costs.
Chetan Shantilal Shah
Also, also, also you know, the process innovations is not totally important because these are not no more. These are off patent products. So it is not always true that you innovate or you have a Process improvement only for making profits. Sometimes you have to be, you know, technologically ready to face competition from China or you know, any other part of the world, basically China. But you have to be ready to compete with them. So the process innovation is also an important part as to how well you can be in the competitive position. So you can’t afford to lose your volumes.
Chintan Modi
Understood? Understood. Sir, one last question is with respect. To, you know, parent company has come. Out with business plan 25 to 27 wherein they have mentioned about some foray into semiconductor chemicals in India. So would like to understand if you have been in talks with the parent. Company on these lines.
Kunal Mittal
Yeah. So yes, you are absolutely right. In our parent company’s strategic growth plan they have announced that our ITCM sector which deals with this kind of a chemicals and semiconductor chemicals is looking to expand into India. And we are in discussions with them and we are jointly evaluating of opportunities in India. No decision has been made at this point of time. But we are in studying the Indian market in terms of the overall evaluation of the semiconductors and all those kind of a thing. But we are very much hopeful that whenever our parent company decides to expand this business in India, I. We are hopeful that HC should be considered suitable by our parent.
Chintan Modi
Understood.
operator
And sir, with respect, sir, I would request you to please rejoin the queue for your follow up question.
Chintan Modi
Sure. Thank you.
operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your question to two per participant. If you have a follow up question, I would request you to rejoin the queue. The next question is from the line of uncle from Axis Bank. Please go ahead.
Ankur Periwal
Yeah. Hi sir. Thanks for the opportunity and congratulations for a good annual performance. First question on our capital allocation as well as the CAPEX plans. If I look at the time frame over FY22 to 24, we had seen some sort of ramp up in our capex annual. Capex to around 150 odd crores annually. But again slowed down in FY25 while we are sitting at a strong cash balance of 151600 crore plus and generating more. So just wanted to gather your thoughts. How should one look at this space given that the hedge is still largely underutilized as an asset.
Kunal Mittal
So Ankur, see what has happened is as you are aware that last two years the global agrochemical industry face significant challenges. If you look at the results, especially volumes of any agrochemical company all over the world or in India, everyone has suffered significant volume drops due to several structural problems. And now those things are coming back to the normal. So in last two years this is a very very difficult situation. Some of the products projects which we had approved before this kind of a challenging situation we completed. But. But in last one or two years there was certainly that there was due to the challenging volume situation globally it was less less confidence for us to go ahead and incur capex and add up more and more capacities. But now since the situation is coming back we have restarted that kind of a process and we have approved some of the projects. In addition to that there will be a normal capex which we anyway incur for some existing products deep bottlenecking. So with all of these things now we feel that we will be back to the normal trend.
And you are absolutely right. Last one or two years there was slowdown in capex but we feel that going forward that situation should be behind us and going forward we should be having more confidence to be able to add capacities both for our domestic requirement and also for the global requirement.
Ankur Periwal
Thanks. Just to follow up on that. So this CAPEX expansion that we plan to do this will be largely for the debottlenecking lid or let’s say for the domestic business as a market or it is largely dependent upon newer products ramp up from the export market from Sumitomo from our parent perspective and that will be the bigger driving factor here both.
Kunal Mittal
But I would say the second part will be the bigger driving sector. The first part anyway continues the debottlenecking and those kind of a small thing but expansion of manufacturing for more products, additional capacities for the global requirement. That is something which is expected to drive the utilization of DAHGE and also the CAPEX plan going forward.
Ankur Periwal
Sure. Second question on our margin profile as well as the specialty revenue bit you did alluded towards rejig in the portfolio which has probably kept the revenue flattish. The specialty part of it is that rigid. Lastly over and hence we should see a sharper sort of revenue ramp up starting FY26. And second question to that is on the gross margin improvement there should this trend continue in the coming years as well given that newer product ramp up launches, etc. Still accelerates or there is some gap to that EBITDA or gross margin that you want to make.
Kunal Mittal
So you are right that this process of maybe slow down in some of the low margin products in specialty and focusing more on new products and high margin products. I believe this cycle will continue for some more time. So in our portfolio there are still some products in our specialty which are not yielding very good margins. And maybe there could be a slowdown of some of these products. So that kind of exercise may continue for maybe one more year and this should naturally result in higher margin. So as you have seen last year also since we reduced focus on some of the low margin product and focus more on high margin new products, our margin profile improved.
So while the top line may have some problems because of this, but at the margin level it should be positive for the company and for the long term interest of the company because we want to less focus on the products which are adding very low margin, requiring a lot of investments in terms of working capital. And that kind of decisions and evaluation is being done for the low margin products.
Ankur Periwal
Sure. Earlier, you know, just, just following up on that, earlier we had mentioned that we were good at 20, 20% odd, you know, EBITDA margin there. Does that thought remain the same or because of the operating leverage, if theoretically the margin goes upwards of 20%, we are okay with that.
Kunal Mittal
I think that ceiling which we had in our mind, that margins more than 20% which we have been mentioning in the past, I think we are behind that. And we have realized that in this year also if you see we have delivered EBITDA margins which are higher than 20%. So we have already broken that ceiling. And from the mindset point of view also now we understand that since we are not focusing on the top line growth, since we are not focusing on some of the low margin product, naturally the margin profile will go beyond 20% and it may go beyond 20% continuously.
Ankur Periwal
Good to hear that, Sunan. Thank you and all the best.
operator
Thank you. The next question is from the line of S. Ramesh from Nirmal Bank Equities. Please go ahead.
S. Ramesh
Thank you very much. So can you give us the volume growth for fourth quarter and also explain why there was a dip in gross margin in EBITDA and you know, the overall profits were down compared to the last period. Especially since the Rabi this year was. Possibly one of the best we’ve had in recent years.
Suresh Ramachandran
Yes, if you look at first, you know, let me talk about full year. If you look at our full year, as we commented at the beginning, our full year volume growth has been almost 20% both in domestic as well as export market up to quarter three. Even in quarter four, domestic market grew very nicely. Almost 15, 16% growth in the domestic. Whereas in the export market primarily because of Latam, our volume got hit on account of two one, the price dropped compared to the previous quarter four. And also volume has Taken a slight hit in terms of quarter four compared to the previous year in exports. See, these are the reasons why our quarter four overall margin has also gone down. But. Overall we look forward for continue to better the performance year on year and quarter on quarter compared to the previous quarter or previous year. That’s our endeavor.
S. Ramesh
Okay, can I just get some housekeeping confirmation on the export number for the year and the quarter? So I do the calculation based on the segment percentage I get an export revenue of around 690 crores for FY25 compared to 568 crores in FY24. So is that number correct?
Kunal Mittal
It is slightly different based on our understanding there’s about 677 or but around 675 to 680 crore level in current year. And last year it was more about a little higher than 550 crore. And if you specifically asked about Latin America. So Latin America revenues because it is already there in the investor presentation are I think last year against the resources revenues of about 130, 135 crore. This year we have delivered revenues of about 240 crore plus from Latin America.
S. Ramesh
And for the fourth quarter also can you give similar numbers? I have a number of around 274 crores for exports in 4Q25 and last year 4th quarter I have an export number of 285 crores.
Kunal Mittal
I think there seems to be some confusion. I think as per us the numbers for current year 4th quarter is much lower than what you mentioned.
S. Ramesh
Yeah, because yeah we are trying to reconcile the year to date number so we don’t have the fourth quarter percentage. Right. So if you can clarify that that would be useful to you know get. The base right for us.
Kunal Mittal
It is more like I think whatever numbers we have, I think in the annual report also I think these numbers will come. But as far as the last quarter current year 2425 the exports numbers are more in the range of 210 to 215 crore. Okay, so plus so there is a negative delta of about 50 crore in the current quarter coming from the exports. But again this is again a quarter to quarter situation. This sometimes some shipments sailing in December last week versus January last week, first week or so. So I don’t think we should look at so much quarter to quarter thing in this kind of a markets and this kind of a situation. If you see full year basis we have delivered significant growth both to Latin America America in the overall exports market.
S. Ramesh
Yeah, understood. So in terms of the capex For Bhavnagar and Karapur. Are we talking about the two products, the fungicide and herbicide which you are trying to launch or is the Capex in Bhavnagar for ctpr?
Kunal Mittal
No, Bhavnagar Capex is not for ctpr. CTPR is not a Sumitomo molecule. It is a third party of patent molecule. Already several players in India, in China, all over the world have launched this product. And we have also started making this product in our Karapur facility which was already available. So we have not incurred much of the Capex for this and we did not even announce any kind of a Capex for this. And we have just commented in our investor presentation that we have completed this project and we have already started making this particular product.
So there is no Capex which we have announced for CTPR and in Pavnagar we were making one product, probably global requirement wherein they are enhancing the capacities to doubling the capacities. And the. The. The Sarapur project is for. For a fundy site.
S. Ramesh
For the Dixelia Max.
Kunal Mittal
We are. Yeah, I mean we don’t give any specific product information. But yes, from our commentary you can get some guesses. But from the commercial and strategic point of view, we don’t mention any specific product for any Capex.
S. Ramesh
Yes. And so the Bhavnagar CAPEX of 55 crores can be concluded for that Lentigo herbicide.
Kunal Mittal
No, no. It is not for a new product. It is for a product which we are already selling in India for many years. And we are already manufacturing in Bhavnagar two years back. We have set up a plant project for that. It is for that product where we are increasing the capacity. But it is not CTPR what you mentioned. It is some different product.
S. Ramesh
Okay. Okay. So let’s put all this in perspective. You had invested about 120 crores for the five molecules to be exported to Japan, right? So this is one of these expansion, an extension of that investment. How do we derate that?
Kunal Mittal
Yes, yes.
S. Ramesh
Okay, so the investment for Excelia Max and Lendigo are yet to be made, right? That is supposed to in the future.
Kunal Mittal
No, see Lentigo, there is no plan right now. Lendigo is a product which is a patented product manufactured globally and in India. We are just launching this product as a formulated product, the Axcalia Max or other products. As we have mentioned, this is a globally patented product. The starting point is we be importing this product technical. We will be formulating in Indian selling in India and we are looking to manufacture that product in India starting maybe in next 18 months or two years with a smaller capacity for Indian domestic requirement. And in the long term we are technically evaluating if we can set up a global scale decor integrated plant at our rate site.
operator
Thank you. Participants are requested to limit their question to two per participation. If you have a follow up question, I would request you to rejoin the queue. The next question is from the line of Nasit Chaudhary from Aditya Birla anc. Please go ahead.
Naushad Chaudhary
Hi, thanks for the opportunity. First on the margin side I just wanted to reconfirm on the margin profile effect because in in past in our multiple interactions what we should understood there is a few percentage difference between export and domestic margin. Has that gap narrowed or is there a case that in future this gap can narrow? If we can comment qualitatively on this.
Kunal Mittal
So I think what I understood your question. You are asking about the difference between exports versus domestic margin.
Naushad Chaudhary
Yes. And can this if there is a gap any candidate.
Kunal Mittal
As we explained earlier in the exports.
Chetan Shantilal Shah
See the point is that when you. When you compare export business and domestic business there is a very big difference. The difference in domestic market is that we are talking about selling our formulated brands. We may be manufacturing technicals as well. But when you convert those technicals and you convert them into brands and you market those products or domestic markets, the margins are different. Now say we are also also selling our technicals in B2B market, right? And exports we are also selling technical more than the formulation. The reverse of domestic market. So in domestic market we are selling more of our brands, less of technical.
And in export market we are selling more of technical and less of brands. But if you compare the margin between B2B domestic and export margins in technical they will be similarly similar. But you cannot brand business margins will be definitely higher than selling a technical either domestic or export.
Naushad Chaudhary
Okay. Understood sir. Thank you for this. And second, on the honor of new delaunches 93 and the pipeline which we have, if you can highlight which all key crops are we targeting or focusing? Or how do we decide which products we have to get in? Do we decide by the crop we want to focus on or is it purely based on the availability and performance of the product? How do we decide the product?
Suresh Ramachandran
Yeah. See in India to register and launch any product it takes somewhere between four to five years. Obviously this product was fast track. I’m talking about Excalia Max. Because there is a special registration system for the newly launched products around the globe. Within five years if it gets introduced in India, there is a special queue in which it gets fast tracked. So this project was almost started four years back. So first we evaluate the global discovery molecules in India. Obviously there would be guidance from our global teams. Also this product we are launching in Padi again supply particular fungal disease which is which is prevalent in Indian markets in certain geographies or many geographies it is present.
So it had a very good fit in India market. So we launched first label. We are getting in label. We got in label and we would be launching it in the next few days. And we also know that it is fitting in crops like cumin, ground nuts, soybean, few vegetables and fruits. Our teeth have done extensive work to find it fits in other crops as well. For which label claim dossiers have been submitted. We should be getting it probably the next 18 months. 24 months. 18 to 24 months. So first crop launch would be in paddy followed by in other crops.
It will all be launched with regard to the other product Lentigo which is again a rice herbicide which is a big market because of there is an intense labor requirement. There is generally farmers look for chemical solutions to control the wheat problem in rice. And this is again our global discovered molecules which we tested few years back and it had a nice fit in Indian market. There is an already existing market in India for this herbicide. So we decided to develop and launch this product. Again this product was project was initiated four, five years ago and we got the registration recently and just first invoicing is happening as we speak.
So this product has got to fit only in rice. It will not fit in any other crop.
operator
Thank you. The next question is from the line of Dhruv Muchal from HDAC amc. Please go ahead.
Dhruv Muchhal
Yeah sir, thank you so much. Sir, some sense on the growth outlook for the domestic market for FY26 because I was a bit surprised by the negative pricing drag even in 4Q you mentioned the domestic market grew by about 14, 15% in volumes. But there were probably the pricing drag. So I thought the pricing drag is largely behind given the base is also weak. But so just some comments are there and some guidance on the outlook for FY26 for the domestic market.
Kunal Mittal
I think just to clarify, I think maybe there is some misunderstanding. We did not mention too much about the pricing specifically quarter wise. What we have mentioned in our investor presentation and opening commentary. Overall there is a 10% price drop whether it is in domestic business on export business in this current year over last year and quarter to quarter. Actually we don’t analyze so much and we don’t mention so much and against that there is a significant volume I think in the domestic market the volumes are 20% approximately as Dr. Suresh mentioned. So the net growth is 10%.
And in the exports market there’s a 30% volume growth which is causing about 20% total top line growth in exports market. So this is the numbers for the past and maybe some this quarterly numbers and all. There might be some confusion and I request to give it an.
Suresh Ramachandran
outlook outlook for 25, 26. You know as you all you know seeing the monsoon has come little early, about a week or so. The sentiments are positive. It looks to be a very very good season is upon us and we are all fully geared up. There is definitely going to be a volume growth. I think I just saw, I didn’t read it. MSP prices have been announced just maybe half an hour back. I didn’t read it yet. I’m sure it has gone up at least 5 to 10% on key crops. What I understand is cotton acreage is in increasing. Corn acreage is increasing.
Chili acreage will increase. All the key pesticide consuming crops acreage is likely to increase if the monsoon continues. In the same vein what we are seeing for the last couple of days I think it augurs very well for the upcoming season. If the rainfall is good and if the Kharif is good obviously it will replenish groundwater which is going to help us in the Rabi season. Also with overall sentiment at this point of time looks very good.
Chetan Shantilal Shah
And also we are not really seeing any further price drop because prices are quite stable. That is whatever has happened has happened and I think if at all the price can only inch up from this level, that is what we feel.
operator
Thank you. The next question is from the line of Rajesh Joshi from Chris Capital. Please go ahead.
Unidentified Participant
Yeah, good afternoon sir. Am I audible?
Chetan Shantilal Shah
Yes, yes, yes.
Unidentified Participant
Yeah. So I had a question regarding the capex we had announced in the Hage a few years back regarding the five molecules that were to be in license from the Japanese parents and then we were to supply them. So any outlook slash update on that front, on the cramps front?
Kunal Mittal
I think we have already clarified this question in some of the earlier questions. So I think because of the global situation in terms of the, the industry situation, some delays in registration and overall yes the capacity utilization of one plant is lower but we are taking efforts to enhance the capacity.
Chetan Shantilal Shah
What does the plant you were talking about about that was set up in Karapur. The DASH plant is a totally different story. So the Karapur plant which we had set up got little bit of hiccups in terms of delays in registration because we, you know These are all PhD products and it has to be registered in every country where they. They wanted to sell this and there has been some delay over there. So that is the accoral project is. But because of that we are trying to utilize the same plant with minor modification to manufacture other products.
And one product we have already started, that is CTPR and another product we will be starting now which will help us to ramp up the volume of Axelia max substantially in domestic market. Is. The next step which I said in my opening remarks that all the plans, all the designs, all the site plans, everything is ready. We are absolutely ready to go ahead. I think the work can start soon. That Capex is separate capex of 300 crores.
Unidentified Participant
Okay, and what will be the timeline for the hedge plant Capex?
Chetan Shantilal Shah
So that will be. I think we want to start manufacturing certain products to deliver between 27, 28, 29 and 30. So that is a plan. So it will. The entire range of products we have been. We will be doing in phase manner but it will be definitely some in 27, some in 28, some in 29 and some in.
operator
Thank you. The next question is from the line of Dharvan Shah from Alpha Accurate Advisors. Please go ahead.
Dhavan Shah
Yeah, thanks for the opportunity. So my question is on the export side if I look at you know this FY25 numbers for Japan I think the revenue has been declining from 113odd crore to 93odd crore. So any thoughts on these? What led to a decline to the Japanese export And then.
Kunal Mittal
The number is very similar to the last year number. I don’t know where you bought this 91 crore number but in our view I think this number is more. I think maybe because of this rounding off like in the presentation there is a percentage maybe because of that but this number is very close to last. Almost similar.
Dhavan Shah
Okay. Okay. And in terms of the export numbers. The contribution right now is roughly 22 odd percent. How much do you see this mix can go up maybe two, three years down the line. Once you know this beverage plant plus your that five molecule Capex that you did that revenue would also inch up. So how much mix to foresee for the x or maybe 2, 3 is down the line.
Kunal Mittal
So I think in the past we have mentioned see it is very difficult for us to predict because we are trying to grow both. So you are right that because of some of these Capex and new upcoming diet side in next three to five years there will be good expansion in our export portfolio but at the same time in Indian domestic market also we are trying to launch many new products, patented products and off patented products also and also expansion of volumes in our existing so hopefully we can grow both and maybe one segment can grow slightly higher or lower than other, but we are very hopeful that both should grow so significantly.
It is not likely to be that exports will become like 50% of the business in three years or five years. I think majority of our business will continue to be domestic focus with a very strong expansion in our export portfolio also.
operator
Thank you ladies and gentlemen. Due to time constraint we will take that as the last question. I would now like to hand the conference over to Mr. Shushil Marfatia, executive Director for closing comments.
Sushil Marfatia
Namaste everyone. Thank you all for your asking some very interesting questions and our colleagues for replying the same. We hope you could address your questions nicely. FY24 has been a year of consolidation, resilience and strategic recalibration for Sumitomo Chemical India Ltd. Despite global headwinds, pricing pressure and market volatility, we have demonstrated robust execution capabilities delivering strong volume led growth, expanding margins to historic high, launching multiple differentiated product and depending our connect with farmers and channel partners. Through our initiative such as EDFD campaign We now enter 26 FY26 with a clear and confident roadmap a year we are defining as a year of resurgence.
We expect a supportive external environment with the IND forecasting and overall normal monsoon. A crucial is for agriculture output and agriculture input demands. This bodes well for the domestic agrochemical sector and we are structurally well positioned to harness this tailwind. On the strategic front, we are embarking on two important CAPEX initiatives. The first is the brownfield expansion at our Baunagar site for a key FCC invented building on the strong operating track record of our existing facility. The second is the establishment of a new product line at our parafum facility for recently launched patented molecule. These investment also set the stage for potential scale up opportunities including our readiness to support FCC’s evaluation of a large scale greenfield facility EMEA.
Moreover, our continued focus on optimizing operational metrics including inventory management, receivable controls and disciplined capital allocation will remain central to our long term strategy. We see this not merely at efficiency levers but as critical enables of sustainable growth and value creation. We remain deeply grateful for your continued support and engagement. Thank you for taking the time to join our conference call today. We truly appreciate your participation. Thank you. Good night.
operator
Thank you on behalf of Sumitomo Chemical India limited that concludes this conference. Thank you for joining us. And you may now disconnect your lines.