SIKKO - Sikko Industries

📊 NSE: SIKKO 🏢 Pesticides / Agrochemicals - Indian 📅 Last Updated: 12/14/2025 13:23

💰 Financial Performance

Revenue Growth by Segment

The company operates in a single segment. Revenue from operations for FY 2024-25 was INR 6,174.80 Lakhs, representing a marginal growth of 0.75% compared to INR 6,128.72 Lakhs in FY 2023-24.

Profitability Margins

Operating Profit Margin remained stable at 9% (0.09 ratio) YoY. Net Profit Margin was 7% (0.07 ratio), showing a 4% improvement in relative profitability compared to the previous year. Standalone Profit After Tax (PAT) grew 5.08% to INR 427.10 Lakhs.

EBITDA Margin

Operating Profit before Depreciation, Finance Cost, and Tax was INR 709.97 Lakhs, resulting in an EBITDA margin of approximately 11.5% of revenue from operations.

Capital Expenditure

Not disclosed in absolute INR Cr; however, the company maintained proper records for Property, Plant & Equipment and Intangible Assets, with physical verification conducted by management.

Credit Rating & Borrowing

Borrowing costs (Finance costs) decreased significantly by 49.4% to INR 39.9 Lakhs from INR 78.84 Lakhs YoY. This reduction was driven by lower interest outflow as the company utilized equity funding from a Rights Issue to reduce debt.

⚙️ Operational Drivers

Raw Material Costs

Not disclosed as a specific percentage of revenue; however, total expenses before depreciation and finance costs were INR 5,540.05 Lakhs, down from INR 5,716.77 Lakhs YoY.

Logistics & Distribution

Not disclosed as a specific INR value, but freight delays are cited as a primary factor impacting inventory turnover and operational efficiency.

📈 Strategic Growth

Expected Growth Rate

3.30%

Growth Strategy

Growth is pursued through the enhancement of HR policies and processes to improve performance, alongside capital structure optimization. The company recently completed a Rights Issue to fund operations and announced a 1:1 Bonus Issue (Record Date: December 08, 2025) to reward shareholders and increase liquidity.

Products & Services

The company sells products sensitive to weather conditions and market demand, likely agrochemicals or fertilizers given the context of 'unfavourable weather' risks.

Strategic Alliances

The company is the holding company for Sikko Foundation, which was included in consolidated financial statements for the first time in FY 2024-25.

🌍 External Factors

Industry Trends

The industry is facing lackluster global growth and heightened trade policy uncertainty. The company is positioning itself by maintaining a low-debt balance sheet (Debt-Equity ratio of 0.05) to navigate these divergent economic paths.

Competitive Moat

The company maintains a strong liquidity position with a Current Ratio of 3.43 (up 64% YoY) and a very low Debt-Equity ratio of 0.05, providing a financial buffer against market volatility.

Macro Economic Sensitivity

The company is sensitive to global growth trends, which are forecasted at 3.3% for 2025 and 2026, below the historical average of 3.7%.

Consumer Behavior

Demand is heavily influenced by weather patterns and agricultural cycles.

Geopolitical Risks

Middle East tensions and global trade frictions are identified as elevated risks that inject uncertainty into fiscal and structural policies.

⚖️ Regulatory & Governance

Industry Regulations

The company complies with the Companies Act 2013, Ind AS, and SEBI Listing Regulations. It implemented 'ACERP' software with audit trail (edit log) facilities as per Rule 3(1) of the Companies (Accounts) Rules, 2014.

Taxation Policy Impact

Current tax for FY 2024-25 was INR 181.94 Lakhs on a Standalone Profit Before Tax of INR 603.72 Lakhs, representing an effective tax rate of approximately 30.1%.

Legal Contingencies

No instances of fraud by or on the company were reported. The company fulfilled its CSR obligation by spending INR 6,98,000 (slightly above the required INR 6,97,360).

⚠️ Risk Analysis

Key Uncertainties

Primary uncertainties include unfavourable weather conditions affecting demand and freight delays impacting the supply chain. Return on Net Worth decreased from 15% to 5% because profit did not grow at the same rate as the net worth increase from the Rights Issue.