Insecticides India Q2 Revenue Up 8% Despite El Niño

Revenue from operations: INR 686 crores (8% YoY growth from INR 637 crores in Q2 FY26)
Gross profit margin: 33.7% (compared to 34.5% in Q2 FY26)
EBITDA: INR 92.44 crores
EBITDA margin: 13.5%
Profit after tax: INR 56.17 crores

Working capital days: 158 days in H1 FY27 (compared to 151 days in H1 FY26)
Inventory: Increased to INR 814 crores from INR 744 crores
Debtors: Increased to INR 719 crores from INR 643 crores
Creditors: Increased to INR 533 crores from INR 420 crores
Net working capital: Approximately INR 1,000 crores as of September 30, 2026 (compared to INR 966 crores as of September 30, 2025, and INR 828 crores as of March 31, 2026)

Super El Niño weather pattern significantly impacted key agricultural regions across India and globally
Drought conditions affected both wet crops (sugarcane, paddy) and dry crops (maize, cotton, soybean, chilli)
Recent cyclones had mixed impact - improved water availability but caused crop damage from high winds
Global supply chain disruptions with crude oil prices reaching $125/barrel (recently declined below $100)
High sea freight costs impacting business operations

Negative volume growth of 6-7% in Q2, offset by 4-5% value growth through premium products
Farmer preference shifting toward new generation technology products despite reduced spraying
Focus Maharatna and Maharatna product categories showed increases, particularly in Q2
Gold category products experienced declines

Kaeros brand achieved gross turnover of approximately INR 75 crores in H1 FY27
Total company sales from Kaeros platform: INR 114 crores in H1
North, East, and West India networks fully established
Southern market expansion targeted for Q2 (current fiscal year)
Full national coverage expected from "Kashmir to Kanyakumari"
Target: Cross INR 125 crores brand turnover in Kaeros for current fiscal
Stand-alone Kaeros business expected to reach approximately INR 200 crores this fiscal
Next year target: Double current Kaeros business

IIL Crop Solution (ICS) plots expanded from 30+ to 70+ across four major crops (rice, cotton, soybean, chilli)
Demonstrations showed improved farmer productivity with similar or lower spray numbers and cost
Over 18,000 farmer meetings conducted in H1
More than 9,000 demonstrations performed
Over 2.5 lakh farmers engaged in H1

Dahej project expected to complete fully by December 2026 (currently partially operational and capitalized)
Sotanala project completion expected in next fiscal year
Both facilities being developed as state-of-the-art DCS plants with focus on CDMO business
Sotanala formulation business target start: April/May 2027 (potential 1-2 month delay due to NCR force issues)
Sotanala technical manufacturing to begin in next fiscal year (originally targeted Diwali 2027, now expected December 2027-January 2028)

Strong pipeline with registrations experiencing delays
Nissan's new product launch expected first in kharif season
Followed by IIL's 9(3) products or mixtures
OAT insecticide launch delayed pending scheduling inclusion (application not yet filed)
Working on 30+ patented formulations for launch over next 2-3 years
Expect 3-5 launches in next fiscal year

Current export contribution: ~5% of revenue (primarily formulations)
Three-pronged strategy: brand business (white labeling), technical exports, CDMO business
Exporting to more than 25 countries
Focus on technical exports to developed markets (CIS, Europe, America, Asian countries)
Working on 15 active ingredients (AIs) for international registrations
Already registered 10+ technicals internationally
Targeting 40-50% CAGR growth in international business
Long-term target: INR 500 crores from international markets in 5 years

Contract development and manufacturing organization business focused on becoming alternative supplier to China
Discussions with Japanese and other international companies
Initial small breakthroughs achieved, targeting bigger scale in next fiscal
Qualification process involves registration in target countries and meeting quality standards

Four R&D centers operating with different teams
New discovery R&D center in joint venture with Japanese company (80% partner funded, 20% IIL)
Reverse engineering R&D centers in Chopanki (NABL and GLP certified) and Dahej, Gujarat (NABL certified)
Formulation R&D primarily conducted in Gujarat
Field trial team of approximately 12 doctors
Over 100 registrations in process at IIL
Approximately 200 people involved directly and indirectly in R&D
Annual R&D expense: Approximately INR 12 crores (actual spending higher but not fully booked under R&D)

Appointment of Mr. Veera Bhadram as Independent Director (effective November 05, 2026)
Mr. Bhadram has 40+ years experience in agrochemical sector, former Whole-time Director of Coromandel International Limited
Qualifications: M.Sc. Agriculture Economics, IIM Ahmedabad alumnus

On-roll sales and marketing team: Among largest in industry
Third-party team: Varies from 750 to 1,300-1,400 depending on season
Current weak season: Maintaining ~750 third-party personnel
Kaeros brand team: Additional ~150 people (70-80 on roll, similar number third-party)

DMS (Distributor Management System) implemented but with limited visibility
QR code system achieving 15-20% success rate in tracking
Beetroot system for Kaeros being implemented post-Diwali
Plans to improve visibility to 60-70% through farmer and retailer schemes next year
Informal tracking through weekly and fortnightly marketing meetings

Nissan Chemicals: Collaboration since 2013, now handling 7 products, eighth product coming soon. Contributes 35%+ of total brand sales. Developing mixtures to extend product life.
OAT Agrio: Collaboration since 2013, JV for new molecule discovery. Chaperone PGR product sales doubling this year. New mode of action product awaiting inclusion in Insecticide Act Schedule.
Momentive: Long-term partner for one product