Revenue of Indian agrochemicals to grow double-digit current financial year and next: Crisil

Date:12-27-2022

Indian agrochemicals sector is expected to grow at 15-17 per cent current financial year after a stellar 23 per cent growth logged last fiscal, primarily driven by continued strong exports and stable domestic demand, said rating agency Crisil.

Further, in 2023-24 financial year, revenue is expected to further grow by 10-12 per cent as India continued to benefit from the ‘China plus one strategy of global players and key molecules going off patent.

″Higher operating leverage will help sustain operating margins at 15-16% in the current and next fiscal (16.6% last fiscal), despite input prices remaining elevated. Capital spending will continue at similar levels as in the past, but elongation in working capital cycle will result in higher borrowings,″ the rating agency said.

However, strong cash generation is expected to keep credit profile of the agrochemical players ‘Stable’.

″Next fiscal, exports will likely grow 12-14 per cent as players keep up capex with an eye on molecules worth USD 4 billion going off-patent over the next two years,″ said Poonam Upadhyay, Director CRISIL Ratings.

″As a result, exports will remain the major contributor to the agrochemical sector accounting for ~53 per cent of the total revenue,″ Upadhyay said.