Best Agrolife Ltd

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Please note that this conference is being recorded. Before we begin, a brief disclaimer.

This conference call may contain forward-looking statements about the company which are based on the beliefs, opinions, and expectations of the company as of the date of this call.

These statements are not the guarantee of future performance of the company, and it may involve risks and uncertainties that are difficult to predict. Today, from the management side, we have with us Mr. Surendra Sai – Executive Director, and Mr.

Vikas Jain – Chief Financial Officer. I will now hand the conference over to Mr.

Surendra Sai for opening remarks. Thank you, and over to you, sir.

Good afternoon, everyone, and thank you for joining the FY26 Earnings Conference Call of Best Agrolife Limited.

As a business year for the Indian agrochemical sector, FY’26 was an average year with some unexpected and adverse weather conditions. The weather was unseasonal throughout the year with some areas experiencing lower than expected rainfall while other areas experienced floods.

Due to this, there was an impact on the sales in key areas such as Haryana and Punjab. Certain key crop segments did not perform as expected like chilli, pulses, rabi paddy and fruit crops. In addition to an average season, there was a buildup in the trade inventory which also led to depressed sales. Our focus throughout the year remained on strengthening the long-term fundamentals of the business. We continue to strengthen our basics, in terms of policies, pricing, inventory and expenses control.

Our strategy remained focused on building a stronger patented portfolio for a positive impact on the farmer’s income.

Our dipstick surveys have shown positive feedback for our speciality products with overwhelming positivity and acceptance from the farmers. Farmers in Madhya Pradesh, Maharashtra, Rajasthan have been appreciative of products like Ronfen, Tricolor, Warden Extra and Bestman. We also observed gaps in branding at the farmer level and are addressing these with social media and Whatsapp campaigns. We have acted on farmer’s need for bio stimulants and have introduced 5 new products in this category.

The new segment of bio products includes Sprink, Richgrow Gold, Emprole, Tornet & Punctual. We are confident of strengthening farmer loyalty and enhancing brand recognition. During FY’26, we launched three patented products, namely Bestman, Fetagen, and Shot Down. Bestman has received encouraging acceptance in key horticulture markets due to its strong efficacy against sucking pests and borers in crops. Fetagen and Shot Down also gaining market traction.

FY’27 will see us launch Fluzam, Midcotin, Cubax Power Extra, and Trishanku. These patented products are expected to further strengthen our positioning in the specialized crop protection market.

Our focus continues to be strengthening the IP portfolio. We received 7 combination patents, and 1 nano urea patent this year. The synthesis R&D centre successfully commercialized the 18 stage Topramezone manufacturing process.

FY ’26 saw the synthesis development and manufacturing process for new molecules.

At least 4 new generation molecules will be produced this year at the Gajraula facility.

This reflects our continued investments in research and development and reinforces our commitment toward innovation-led growth and Atmanirbhar manufacturing.

To improve the balance sheet health and maintain better market discipline, our key levers will be operational discipline, capital efficiency, inventory control, returns policies and expenses control.

Looking ahead, while the external environment continues to require close monitoring, particularly with respect to monsoon progression and the ongoing gulf conflict, we believe the business is structurally better positioned entering FY’27.

The impact of El nino this year is being carefully analysed and we are taking actions to mitigate the impact on the sales.

In the brand segment - calibrated pricing actions, new bio products and patented products will support the improvement in profitability and overall business brand performance over the coming quarters.

We are experiencing a surge in counterfeits especially for our popular products such as Ronfen. To tackle this, we are introducing high security hologram on our key products to help our customers differentiate genuine products from counterfeits.

Another problem we are addressing is that of pest resistance. When any product does not work, farmers generally use an alternative having the same mode of action hoping for results. Globally, mode of action is displayed on labels as an important information for preventing resistance development as well as effective crop protection. Our new labels will display the mode of action based on IRAC, HRAC and FRAC. We believe this transparency will help the farmers choose the right products.

We are positive about ramping up the production from our technicals manufacturing converting the R&D successes into commercial successes.

Our registrations abroad are ongoing with 2 registrations in Mexico in the final stages of approval. In Sri Lanka, the registration of our patented molecules is in progress on

a fast track, while we successfully received our first registration in Thailand. In Vietnam, we are expanding the registration portfolio with our local partners.

Regarding orders, we continue to ship consignments to Sudan where our products are being well accepted. We are in the final stages of starting a subsidiary in Brazil. We also are continuing to see interest in our patented Nano Urea formulation abroad.

We remain committed to creating long-term value for all stakeholders through innovation, disciplined execution, and sustainable growth.

With that, I would conclude my remarks, and hand over to Mr Vikas who will walk you through the years financials.

FY26 was an exceptionally challenging year for the agrochemical industry, impacted by adverse climatic conditions, uneven pest incidences, elevated channel inventory levels, weak dealer liquidity, and volatility in raw material prices. Despite these headwinds, the Company remained focused on operational discipline, working capital optimization, and strengthening long-term business fundamentals.

For FY26, consolidated revenue from operations stood at ₹1,257 crore as compared to ₹1,814 crore in FY25, reflecting a decline of 31% year-on-year. Gross margin for the year stood at ₹380 crore as against ₹531 crore in FY25. However, gross margin percentage improved to 30% compared to 29% in the previous year, supported by product mix improvement and calibrated pricing actions.

EBITDA for FY26 stood at ₹100 crore as compared to ₹200 crore in FY25, while EBITDA margin stood at 8% versus 11% in the previous year. Profit After Tax for FY26 stood at ₹9 crore as against ₹70 crore reported in FY25, with PAT margin at 1% compared to 4% last year.

Coming to the quarterly performance, revenue from operations for Q4 FY26 stood at ₹156 crore as against ₹274 crore in Q4 FY25, representing a decline of 43% year-on- year. Gross margin for the quarter stood at ₹35 crore compared to ₹63 crore in the corresponding quarter last year, while gross margin percentage stood at 23% as against 23% in Q4 FY25.

EBITDA for Q4 FY26 stood at negative ₹27 crore compared to negative ₹4 crore in Q4 FY25. EBITDA margin for the quarter stood at negative 17% as against 2% in the corresponding period last year.

Profit After Tax for the quarter stood at negative ₹37 crore compared to negative ₹22 crore in Q4 FY25, while PAT margin stood at negative 24% versus negative 8% in the same quarter last year.

The fourth quarter was particularly impacted by weaker seasonal demand, slower channel liquidation, elevated inventory at the distributor level, and sharp increases in raw material prices during March following geopolitical developments in the Middle East.

In response to the sudden increase in input costs, we consciously calibrated dispatches and avoided low-realization sales during March across both B2B and branded segments. While this prudent decision impacted near-term revenues by approximately ₹50–70 crore, we believe it was necessary to protect medium-term profitability and maintain channel discipline.

To mitigate rising input costs, the Company implemented two rounds of price increases during April and May 2026. We expect these pricing interventions to progressively support profitability beginning Q1 FY27 onward.

One of our key operational priorities over the last two years has been working capital optimization and inventory reduction. I am pleased to share that inventory levels have reduced significantly from approximately ₹958 crore in FY24 to ₹773 crore in FY25 and further to ₹651 crore as of March 31, 2026.

This reduction reflects tighter procurement planning, calibrated production schedules, rationalization of slower-moving inventory, and sharper channel management practices.

As we move into FY27, our focus remains firmly on improving cash flow generation, strengthening balance sheet quality, enhancing product mix, and driving sustainable profitability rather than purely volume-led growth. While the external environment continues to remain dynamic, we believe improving inventory alignment, pricing actions already undertaken, and increased contribution from differentiated products should support gradual recovery in profitability over the coming quarters.

With that, we now open for question and answers.

These products, we hope, will get good traction and will meet a farmer's needs. While we had not introduced a new segment for quite some time, we felt this was the right time to introduce biostimulants into the market as these are important. The second point where we thought we would be increasing our crop protection portfolio is the

introduction of new patented products. We are having a couple of new products in terms of Fluzam and Midcotin. The third area that we do see that there would be certain requirements, and demand is in the area of nano-urea.

I think this concept will significantly impact the volatility and pricing of urea. As a part of this portfolio, we have already gotten a patent. We are progressing into the final stages of the computing of the registration on the nano-urea segment. The second part of this question was on the distribution network. We did grow our distribution network to around 10,000-10,000 plus. We were hitting somewhere around 10,800 dealers and distributors.

What we are seeing is that while the distribution network is large, there are a lot of good distributors and there are a lot of not so great distributors who delay in terms of both payments as well as who are not able to effectively manage our sales and do proper distribution and keep our customers happy. We are taking some conscious decisions to be able to identify and beat out non-performing dealers, and you will see our dealership network strengthening over a period of time.

Your third question was on the management of risks. Now, the two key risks which are going to impact not just the agricultural sector, agrochemical and agricultural sector are the Gulf conflict which is still dragging on after approximately 89 days. This is leading to an increase in a lot of prices, primarily for solvents and formulation prices.

We are actively working on trying to see how we can actually adjust our pricing, which is very agile and if we see the prices dropping, we will be equally in a position to pass on the benefits to the farmers.

The second aspect which is a major risk that we see in this particular year is the effect of the El Nino. Potentially, while a lot of worry is there on the El Nino, our understanding is that the El Nino will kick in somewhere between September and October of this year.

We are hopeful that the primary monsoon or the source of monsoon for the current season will hopefully be not long term.

We do know that the probability of the El Nino becoming significant is 4th October where potentially there will be a 2 degree plus increase in the El Nino and this would impact the Rabi season. So, we are appropriately trying to be able to adjust our business to be able to take this into account. I hope I was able to answer all your questions.

work. So, the general percentage what we spend on our R&D and the patents will continue which is for our industry the percentage doesn't look very high but we continue to do it between around 1% or so.

So, we have already filed close to 100 plus patents and we are hopeful to see at least 2 to 3 new patents coming at least for the next 5 years. So, for 2026-2027 also we are going to launch 3 new patents and this will continue for next 3 to 5 years. So, with respect to RM volatility, as we mentioned in our speech, the prime reason that Q4 was not as per our expectation because we thought in our earlier guidance that Q4 will have minimal losses. This was little on the higher side because we had stopped our sales for the branded as well as B2B sales which we generally do in March as a replacement till previous year.

So, we wanted to capitalize on the situation wherein our existing inventories which we already had rather than selling at lower prices in March where we don't have the clear picture of the prices. We thought we will wait and sell closer to the season. We post that immediately from 1st week of April we increase the prices of most of the material wherever the cost has gone up and later for a few of the other products we also increased in May.

So, we have done 2 rounds of price increase. Since we are aware that the prices are pretty volatile, each and every purchase order or each and every raw material what we procure is being properly scrutinized to see whether the same can be passed on into the market by way of increasing the price. If we are able to do that then we are procuring else we are not going too aggressive on products where we feel that we might end up buying high-cost inventory.

We are not doing and not focusing because now we are just tired of the season so 3- 4 months we would want to concentrate on our sales. So, for the liquidity even the government is helping with respect to 20% additional funding so we might take some portion of it. We have already applied to the banks. For this portion of the season, we will be taking those funding from the banks which will take care of the coming season.

So, as of today almost between 60-65% of our sales are being produced in our own factories.

We see our capacity utilization going up to 80-90% during the season and off season we are at around 50-60%. So, just to answer if our existing manufacturing capacity is sufficing, if that is the question, yes. We are more than able to manufacture from our own production.

So, the first thing is that manufacturing facility is in terms of a formulation where we are 100% doing our own formulation facility.

So, the final packing and the formulation is all ours. Now the second part is the technicals. Now the technicals are the active ingredient part of it. It requires a significantly large technical facility. Our technical facility was built up over a period of time and in the last 6-7 years and it has gone through multiple rounds of expansion.

Now coming up to the point about if I look at the end product which is sold to the consumer and we try to figure out what percentage of that end product is actually manufactured or requires certain inputs which come from outside.

The inputs which come from outside are in form of either you might call it as the bottles or labels or you might call it as the solvent or you might even call it as the raw materials which are used in the manufacturing process. Some of the raw materials are certainly imported from China because India's chemical industry is not yet geared up to be able to supply all raw materials and that's where to a certain extent our imports come into picture.

Now to be able to understand that what we have been doing consciously over the period of years is that we have been able to try and bring in the manufacturing capability in-house. That is where Vikas Ji was mentioning that our patented products will be using newer molecules which will be manufactured in-house in our technical manufacturing facility so that we have a much better control over both in terms of quality, our ability to be not dependent upon supply chain and insulate ourselves from completely impossible to manage situations like the Gulf aspect.

For example this year our sales were little lower but if I have to tell you on the ideal situation that next year if we are going to perform well and based on that sales number the EBITDA margin for the branded should be anywhere from 18-20% and on the B2B it should be around 8% or so.

So, I think and the receivables also if I deeply check right over 6 months more than 200 crores are above 6 months and the possibility of write-offs are also heavy. I mean you have to structure your balance sheet in order to save the company, that's what I can read about the balance sheet whatever you have. Any thoughts on those I mean?

Now the retailers the behavior pattern is the outstanding comes at the lowest in the month of June and July. So, they have a habit of paying just at the time of the season and if you see March obviously you might look that it is getting elevated. But most of the payments come by June because they need to buy again for the next season.

So, this is not only for us, anyone doing a dealer, lowest level dealer kind of business they will face the same thing, the March will look higher, it will look better. My last three years my overall doubtful debts are just about less than 0.7%, we are not even 1% in my doubtful debts. So, that logic to say that 200 will suddenly become doubtful doesn't work because we generally collect most of it by the end of June. With respect to, you had asked one more point right, on the bank side, so banks do understand because they don't just see one single number during March. Because we are in constant touch with them and we are giving them the stock statement every month.

So, they see the movements throughout the year. So, once I submit for my June-July they will see that my outstanding specially the old outstanding will be much lower. And the outstanding more than 180 months are anyway not considered by them for this calculation. So, based on that already we have enough liquidity in our system to manage this. So, this happens at a cycle in our business every year.

those also we will take. And as and when we also start collecting advances from this May, June, July from the customers.

So, you will see that the requirement goes up for the initial 6 months till September.

And once the collection starts coming from September, October the loan balances also goes down. If you see my last 3 years loan balances we have been constantly reducing it. So, we have been and if you see my cash flow for the year FY25-26 even though we have made a profit of 8 crores. After tax my cash flow from operations is 90 crores.

So, I had a positive cash flow last year as well.

Yes, Mr. Komal let me just conclude this discussion. So, let us be fair enough to say that we have been definitely putting steps to be able to ensure that our balance sheet becomes better and better. And to be able to ensure that we have a path forward for growth. One of the points that you mentioned and I think that is a relevant point is the fact that when we are doing on the B2C the payment cycles are very long. And the reason is very simple that you start from a raw material and then you make a technical and then you make a formulation and then you take it to the market and then you wait for the farmer to pay that.

So, the B2C cycles are quite long. Previously our B2B segment was a little bit on the higher side and we were able to get money on a much more shorter cycle when compared to the B2C cycle. And in essence, it certainly helped us a lot. Now, which is the reason why this particular year you will see our sector. To do that is that we will be manufacturing certain active ingredients and technicals which will be available for B2B markets. So, this is one change in our strategy where we are looking at where we are trying to focus more on manufacturing, which is not just for captive consumption but for a B2B segment. And I am sure that without putting additional working capital stress we will be able to improve both our top line as well as our bottom line.

in a difficult situation wherein not only it was price crashes earlier in China or seasonal factors. So, we are like a startup wherein it's been just 3-4 years in the branded business where we are bringing newer products and trying to put our foothold in the market.

So, obviously we are spending a little higher on the marketing and the numbers sometimes might not describe what efforts we are doing. But yes, what we feel is that the difficult phase should be over this year and next year should be obviously a better number. And for this quarter where we are given guidance that we will have a little lesser loss, because we had already indicated Q4 is generally a softer quarter. So, it's not that some big business would have come and we would have got higher profitability.

We had guided that okay, this is a softer quarter where we might have small profit or little loss. But loss was higher because we took a conscious decision not to sell our inventory. So, since the prices were going up and we wanted to take, because earlier we lost because we had higher inventory and the price had crashed. So, we wanted to take benefit as well this year to keep our inventory and better to sell at higher price closer to the season rather than to show top line and to put higher numbers in Q4.

And yes, with respect to comparison with other companies what you mentioned, you are right to that extent that they have shown better numbers. So, generally I feel there are two reasons. One is obviously they are much established players with more than 10, 15, 20 years of presence in the market. And we are just about four years in the branded business. The next part is many of them have capacities for exports as well.

So, if you see Q4 is a seasonal quarter for India. What happens in the commentary, most of them will say that okay, the local market is obviously a little softer and facing seasonal issues.

But yes, they would have benefited on the export part. And many of them obviously would also have done a little better in the local market because of their presence since long.

Yes, it has been a little tough time that those numbers are not reflecting into our overall balance sheet or overall, into those share market sizing and other things. But I would say that there is a confidence that we have internally that there are better times which are coming and this company will be something which will be a company to look out for.

But the price crashed like anything for that particular molecule. So, this particular strategy of being a feeder channel for the brand business and for the patented portfolio was one way to look at it. This year we are diversifying a little bit from being only the feeder for the brand business and being a provider to other companies also in terms of certain important and key technicals. And we hope to be able to get some good business in this particular front and that is some, that's a little difference in our strategy.

I had mentioned also that, you know, there were around four new off patent molecules that we had been working on for the whole of last year.

And R&D was able to succeed in the synthesis methods of these four molecules.

These four molecules will be in production. In fact, they are already getting produced in this particular Q1. We hope to accelerate the production of these new molecules forward into Q2 or into Q3. These new molecules will open up B2B segment and B2B opportunities for us. We will try to capitalize on that. And B2B generally has a very fixed payment schedule and that should help us, help the business in all aspects. I hope I was able to answer your question.

Presently we are at around 20-21% of sales return and we are pretty comfortable at this and continuing we will try to go down less than 20% for the next year. So, sales return we have been able to achieve our objective. Also, other two which we have planned was the OPEX reduction. There also we reduced close to 15% of our OPEX.

We remain confident that the strategic actions undertaken during the year will support a stronger and more sustainable performance going forward. Thank you once again for joining us today.