Anand Rathi has issued a buy rating on Sharda Cropchem with a target price of ₹1,350, maintaining its positive outlook on the stock despite recent quarterly challenges. According to Anand Rathi's research report dated July 30, 2026, the brokerage expects the company's revenue/EBITDA/PAT to clock 11/11/6% CAGR over FY26-28e. The target price is based on valuing the stock at 16x FY28e EPS, reflecting confidence in the company's long-term growth prospects despite near-term headwinds.
Sharda Cropchem reported a significant decline in profitability for the quarter ended June 2026, with consolidated net profit falling 38.34% to ₹88.04 crore compared to ₹142.78 crore in the corresponding quarter of the previous year. According to Business Standard, this substantial profit decline occurred despite the company achieving revenue growth of 9.03%, with sales rising to ₹1,073.77 crore from ₹984.81 crore in Q1 FY2026. The company's operating profit margin (OPM) compressed to 17.32% from 21.86% in the same quarter last year. However, Anand Rathi notes that PAT declined 38% y/y to ₹880m due to sharp decline in forex gain to ₹75m from ₹731m in Q1FY26, highlighting the impact of currency fluctuations on bottom-line performance.
The company's profit before depreciation and tax (PBDT) declined 12% to ₹218.70 crore from ₹247.22 crore in the previous year's corresponding quarter. As reported by Business Standard, profit before tax (PBT) also decreased by 30% to ₹118.43 crore compared to ₹169.14 crore in Q1 FY2026. However, there were positive developments in other metrics, with EBITDA improving 25% Y/Y to ₹178 crore from ₹142 crore in Q1 FY2026, and EBITDA margin expanding to 16.6% from 14.4% in the same quarter last year. Anand Rathi reports that EBITDA grew 25% y/y to ₹1.8bn (vs. ARe of ₹1.48bn), with EBITDA margin expanding by 220bps y/y to 16.6% versus their estimate of 14.6%. The operating profit margin (OPM) of 17.32% represents a significant compression from the 21.86% OPM recorded in the same quarter last year, indicating increased operational costs or pricing pressures during the quarter.
On a segmental basis, the agrochemical business reported revenue of ₹915 crore in Q1 FY27, up 8% from ₹846 crore in Q1 FY26, while the non-agro business recorded a 15% YoY increase in revenue to ₹159 crore from ₹139 crore. Within the agrochemical portfolio, herbicides revenue rose 9% YoY to ₹457 crore from ₹420 crore, insecticides revenue increased 13% to ₹233 crore from ₹205 crore, and fungicides revenue edged up 2% to ₹225 crore from ₹221 crore. Geographically, the agrochemical business showed mixed performance with Europe declining 11% YoY to ₹467 crore from ₹523 crore, while NAFTA revenue climbed 33% to ₹339 crore, Latin America posted strong growth of 52% to ₹72 crore, and Rest of the World grew 78% to ₹37 crore. Anand Rathi notes that revenue grew by 9% y/y to ₹10.7bn, owing to 12.7% y/y growth in price and forex, partially offset by 1.6/2.1% y/y decline in volume and product-mix.
The mixed financial performance reflected the challenging operating environment faced by Sharda Cropchem during the June 2026 quarter. According to Business Standard, Sharda Cropchem tanked 5.78% to ₹823.30 following the earnings announcement. Chairman and MD Ramprakash Bubna noted that the company delivered a strong start to FY27 with healthy improvements across key operating metrics, with gross margins expanding by 120 basis points to 36.7% and EBITDA margin improving 220 basis points to 16.6%. The company maintained its FY27 revenue growth guidance of 10-15% and continued investments in its registration pipeline, while maintaining a debt-free balance sheet with cash, bank balances and liquid investments of ₹767 crore as of June 30, 2026. Looking ahead, Anand Rathi expects gross margin to remain in 35-37% range and EBITDA margin to be guided at 18-20% range, while the management reiterated its conservative revenue growth guidance considering volatile geo-political scenarios.
