Dharmaj Crop Guard Limited has announced its unaudited financial results for the third quarter and nine months ended December 31, 2025. The agri-inputs company reported mixed performance with sequential quarterly decline but strong nine-month growth compared to the previous year.

Financial Performance Overview

The company's Q3FY26 results showed a significant sequential decline in profitability. Net profit for the quarter stood at ₹7.66 million, substantially lower than ₹173.52 million reported in Q2FY26. However, when compared to the same quarter last year (Q3FY25), the decline was more modest, from ₹11.79 million to ₹7.66 million.

Nine-Month Performance Shows Strong Growth

Despite the quarterly challenges, the company's nine-month performance demonstrated robust growth. For the nine months ended December 31, 2025, net profit reached ₹507.09 million compared to ₹372.76 million in the corresponding period of the previous year, marking a significant 36.05% year-on-year increase.

Operational and Cost Structure Analysis

The company's cost structure showed variations across quarters. Cost of material consumed for Q3FY26 was ₹1,178.63 million compared to ₹2,351.08 million in Q2FY26 and ₹943.78 million in Q3FY25. Employee benefits expense remained relatively stable at ₹144.79 million for Q3FY26.

For the nine-month period, total expenses increased to ₹8,409.16 million from ₹6,929.07 million in the previous year, primarily driven by higher material costs and operational expansion.

Corporate Developments and Future Plans

The company has incorporated a wholly-owned subsidiary, DCGL Industries Limited, on January 29, 2025. This subsidiary did not have any operational income during the quarter and nine months ended December 31, 2025. Additionally, Dharmaj Crop Guard is planning to obtain necessary approvals for incorporating a new wholly-owned subsidiary in Brazil as a foreign subsidiary.

The company has also implemented provisions related to the new Labour Codes that became effective from November 21, 2025, with financial implications of ₹4.75 million disclosed under employee benefits expense.

Business Context and Outlook

Dharmaj Crop Guard operates in the agri-inputs sector, manufacturing and dealing in pesticides, public health products for pest control, insecticides, herbicides, fertilizers, and allied products. The company's business is inherently seasonal, with quarterly results and performance subject to weather conditions and cropping patterns, which explains the significant quarter-to-quarter variations in financial performance.

The Board of Directors approved these results at their meeting held on February 10, 2026, following review and recommendation by the Audit Committee. The financial results have been prepared in accordance with Indian Accounting Standards and comply with SEBI listing regulations.

Dharmaj Crop Guard Limited has received fresh credit ratings from Care Ratings Limited, with the rating agency assigning investment-grade ratings to the agrochemical manufacturer's bank facilities worth ₹249.00 crore on February 18, 2026.

Rating Assignment Details

Care Ratings assigned the following ratings to Dharmaj Crop Guard's banking facilities:

The stable outlook reflects Care Ratings' expectation that the company will continue benefiting from its promoters' extensive experience in the agrochemical industry while maintaining a comfortable financial risk profile.

Key Rating Strengths

Promoter Experience and Market Position

The rating agency highlighted the extensive experience of promoters Ramesh Talavia and Jaman Talavia, who possess over three decades of experience in the agrochemical industry. This expertise has enabled the company to build brand presence and establish an extensive distribution network across domestic and international markets.

Diversified Operations and Growing Scale

Dharmaj Crop Guard operates with a well-diversified revenue mix across three segments. In FY25, branded formulations contributed approximately 20% of total operating income, institutional formulations 59%, and technicals 21%. The company's total operating income grew at a healthy compound annual growth rate of approximately 37% over the last five years, reaching ₹951.66 crore in FY25.

The company's manufacturing capabilities include two facilities with a combined capacity of 25,500 MTPA for formulations and 8,000 MTPA for technicals and intermediates. In H1FY26, the company reported continued sales momentum with total operating income of ₹714.65 crore, representing 26% year-on-year growth.

Financial Performance Metrics

The company maintains a comfortable capital structure with tangible net worth of ₹392.36 crore as of FY25 end and moderate reliance on external debt, leading to overall gearing of 0.32x as of March 31, 2025.

Rating Constraints

Profitability and Working Capital Challenges

Despite the positive factors, Care Ratings noted several constraints. The company's profitability remained moderate with PBILDT margins in the range of 8-12% over the last five years. PBILDT margin moderated by 175 basis points year-on-year to 7.94% in FY25 due to commercialization of the technical plant, while PAT margin declined to 3.66% in FY25 from 6.78% in FY24.

The company's operations are working capital intensive, with overall inventory days remaining stable at 50-52 days while debtor days expanded from approximately 55 days to 70 days over three years ended FY25. The operating cycle stood at 64 days as of March 31, 2025.

Industry and Regulatory Risks

The ratings also factor in the company's presence in the highly competitive agrochemical industry, where intense competition from organized and unorganized players exerts pricing pressure. Additionally, the company's profitability remains susceptible to regulatory and climatic conditions, as demand for crop protection products depends on monsoons and pest attack incidence.

Rating Sensitivities

Care Ratings outlined specific factors that could lead to rating actions. Positive factors include growth in scale of operations with total operating income exceeding ₹1,400 crore and PBILDT margin above 12% on a sustained basis. Negative factors include significant decline in total operating income and PBILDT margin below 8%, total debt to PBILDT above 2x, or total outside liabilities to tangible net worth above 0.80x on a sustained basis.

The company's liquidity profile remains adequate, with expected gross cash accruals of over ₹80 crore in FY26 against low term debt repayment obligations of approximately ₹12 crore. Average utilization for cash credit facilities stood at approximately 42% for the 12 months ended November 2025.