BHAGCHEM - Bhagiradha Chem.

📊 NSE: BHAGCHEM 🏢 Pesticides / Agrochemicals - Indian 📅 Last Updated: 12/13/2025 19:24

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 37% in FY22 (INR 435.67 Cr) and 15% in FY23 (INR 502.67 Cr). H1FY26 revenue grew 11% YoY compared to H1FY25, driven by increased sales of high-value products.

Geographic Revenue Split

Domestic revenue is projected to grow by 8-9% in FY25, supported by favorable monsoons. Raw material imports from China contribute 20-25% of total purchases, indicating significant global supply chain exposure.

Profitability Margins

FY23 Operating Margin was 15.67% (up from 14.79% in FY22). PAT margin improved 88 bps to 8.21% in FY23. H1FY26 PAT margin was 3.6% (down from 5.2% in H1FY25) due to elevated finance costs.

EBITDA Margin

H1FY26 EBITDA margin was 9.1% (down from 10.1% in H1FY25). While EBITDA grew 11% YoY in absolute terms, margins were squeezed by increased raw material costs in two specific products and the clearance of low-margin inventory.

Capital Expenditure

The company is executing a massive expansion program with total investments exceeding INR 800 Cr through its subsidiary, Bheema Fine Chemicals Private Limited.

Credit Rating & Borrowing

CARE reaffirmed ratings at CARE BBB+; Stable (Long Term) and CARE A2 (Short Term) before they were withdrawn in November 2023 at the company's request. Interest coverage was healthy at 7.51x in FY22.

⚙️ Operational Drivers

Raw Materials

Key raw materials include chemical intermediates for technical products such as Chlorpyriphos, Azoxystrobin, Fluroxypyr, Triclopyr, and Imidacloprid.

Import Sources

Approximately 20-25% of raw materials are imported from China, while 70-75% are sourced from the indigenous Indian market.

Capacity Expansion

The Bheema Fine Chemicals facility in Karnataka has an installed capacity of 9,002 MT with 2 processing blocks and commenced commercial production on March 27, 2024.

Raw Material Costs

Raw material costs for two specific products increased in H1FY26, impacting gross margins. The company uses budgetary controls and management systems to mitigate cost volatility.

Manufacturing Efficiency

The new Bheema facility utilizes automated operations through Distributed Control Systems (DCS) and Zero Liquid Discharge (ZLD) ETP to improve efficiency and compliance.

📈 Strategic Growth

Expected Growth Rate

8-9%

Growth Strategy

Growth will be achieved through the INR 800+ Cr expansion at Bheema Fine Chemicals, which adds 9,002 MT of capacity and provides higher backward integration. The company is also developing 10 new products to diversify its portfolio and reduce reliance on Chlorpyriphos.

Products & Services

Technical-grade agrochemicals including Chlorpyriphos-Technical, Fluroxypyr-Technical, Triclopyr-Technical, Imidacloprid-Technical, Azoxystrobin-Technical, and Fipronil.

New Products/Services

The company has 10 new products under development to expand its existing portfolio of over 13 products.

Market Expansion

Expansion is focused on the Kadechur Industrial Area in Karnataka through the Bheema subsidiary, targeting both domestic and alternative global markets.

Strategic Alliances

The company signed an MOU with the Government of Karnataka for setting up the manufacturing unit in the Kadechur industrial area.

🌍 External Factors

Industry Trends

The agrochemical industry is seeing a shift toward backward integration and automation to combat pricing pressure. Domestic demand remains healthy at 8-9% growth despite global headwinds.

Competitive Landscape

Fierce competition exists from both domestic players and Chinese exporters who are currently offloading surplus inventory in global markets.

Competitive Moat

Moats include established R&D capabilities and backward integration at the new Bheema facility, which are sustainable as they lower production costs and allow for rapid product launches.

Macro Economic Sensitivity

Domestic growth is 8-9% sensitive to monsoon performance and reservoir levels which drive agricultural activity.

Geopolitical Risks

Trade dynamics with China are a major risk, as Chinese oversupply heightens competition in global markets and keeps technical prices subdued.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to strict pollution norms and product-specific regulations, such as the potential ban on Chlorpyriphos by the Ministry of Agriculture.

Environmental Compliance

The company has invested in Zero Liquid Discharge (ZLD) systems and follows Miyawaki Plantation methodology, with 60% of plant area covered by a green belt.

Taxation Policy Impact

The company benefits from a lower tax rate of 17.16% for its newly established manufacturing unit under Bheema Fine Chemicals.

Legal Contingencies

A delay in receiving Environment Clearance (EC) for the Bheema project resulted in a one-year time overrun and an INR 30 Cr cost overrun.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the potential ban on Chlorpyriphos, which contributed INR 95.8 Cr (22%) to revenue in FY22. Pricing pressure from China also remains a key risk.