Bhagiradha Chemicals & Industries has taken a significant step to support its wholly owned subsidiary, Bheema Fine Chemicals Private Limited, by providing a corporate guarantee of Rs. 215.00 crores. This guarantee is aimed at securing credit facilities from three major banks for the subsidiary.

Breakdown of Credit Facilities

The corporate guarantee covers credit facilities from three banks, as detailed below:

Key Points of the Transaction

1. Arm's Length Transaction: The company has confirmed that this guarantee is provided on an arm's length basis, ensuring fairness and transparency in the transaction.

2. No Promoter Interest: The promoter group of Bhagiradha Chemicals & Industries has no interest in this transaction, further emphasizing its business-oriented nature.

3. Financial Impact: The guarantee will be recorded as a contingent liability in Bhagiradha Chemicals' books. As of now, the company states that there is no other impact on its financial position.

4. Regulatory Compliance: This corporate action has been disclosed in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

This move by Bhagiradha Chemicals & Industries demonstrates its commitment to supporting its subsidiary's growth and operations. By facilitating access to substantial credit facilities, the parent company is potentially enabling Bheema Fine Chemicals Private Limited to expand its operations or manage its working capital more effectively.

Investors and stakeholders should note that while this guarantee strengthens the subsidiary's financial position, it also represents a contingent liability for Bhagiradha Chemicals. The company's future financial statements will reflect this guarantee, and its impact will depend on the subsidiary's ability to meet its financial obligations to the banks.

Bhagiradha Chemicals & Industries , a leading agrochemical manufacturer, has reported a mixed financial performance for the first quarter of fiscal year 2026. The company saw an 11% year-over-year increase in revenue, reaching Rs. 123.80 crores, up from Rs. 111.40 crores in the same quarter last year. However, profitability metrics faced headwinds due to pricing pressures and increased costs.

Financial Highlights

• Revenue from operations grew by 11% year-over-year to Rs. 123.80 crores
• EBITDA declined by 25% to Rs. 9.00 crores, with margins contracting to 7.30% from 10.80%
• Profit After Tax (PAT) decreased by 30% to Rs. 4.00 crores

Performance Analysis

The company attributed its revenue growth to strong volume recovery, which offset pricing pressures in the market. However, the positive impact of increased volumes was tempered by margin compression resulting from raw material cost pressures and higher finance costs.

Bhagiradha Chemicals maintains a strong export focus, with 97% of its revenue coming from international markets and only 3% from domestic sales.

Operational Update

The company is in the midst of a significant capacity expansion plan. Phase I of this expansion is expected to be operational by September 2025, representing a total investment of over Rs. 800.00 crores for greenfield expansion.

Management Commentary

A. Arvind Kumar, Executive Director & CEO, commented on the performance: "After a challenging FY25 marked by pricing pressures, we entered FY26 with a strong recovery in volumes. While pricing pressures persist, we believe they have now bottomed out, setting the stage for gradual improvement ahead."

He added, "As volumes continue to improve, we expect operating leverage benefits to gradually flow through, supporting margin recovery in the coming quarters. Our capex plan remains firmly on track, with Phase I expected to be operational by September 25, followed by a 12–18-month ramp-up."

Future Outlook

Despite global headwinds and pricing pressures, the company sees early signs of demand recovery with volume rebound. Management expects gradual improvement through FY26, with pricing likely having bottomed out.

Bhagiradha Chemicals remains focused on its strategic roadmap, which includes:

• Driving innovation
• Advancing backward integration
• Expanding capacity
• Strengthening R&D

The company is targeting a 5x revenue growth over the next 6-7 years through these initiatives, along with new product development and contract manufacturing opportunities.

New Product Introduction

During the quarter, Bhagiradha Chemicals strengthened its portfolio by introducing Pinoxaden, a new product in the herbicide segment, which is expected to support long-term growth.

The company's commitment to innovation and expansion, coupled with its strong export presence, positions it to navigate current market challenges while pursuing ambitious growth targets in the coming years.