Sumitomo Chemical India Ltd

Analyst Notes

[Analyst View] Aamara Capital, 21 Oct 2026, written five days before the Q2 FY27 print

What the primary documents corrected or reconciled

Unresolved conflicts register (both values shown, nothing silently picked)

Open questions for the analyst desk

Business Deep-Dive

Sources: business file (B) built from the Q1 FY27 deck, FY25 and FY26 annual reports, four earnings-call transcripts, the 26th AGM transcript, company website pages, Screener and NSE filings; governance and financial files where marked. SCIL discloses installed capacity in tonnes nowhere (see 3.5), so capacity tables below carry acreage and utilisation only.

3.1 Identity and corporate history

3.2 What the company does

3.3 Products, brands and uses

Scale: 200+ brands, 700+ SKUs (deck) or 750+ SKUs (AR), 200+ registrations, 25+ patents, 20+ mega brands. Concentration limits: top-10 products below 45% of revenue; no single molecule above about 17%. [Fact] [B-S1 sl.22-23, 25; S7 p.4]

3.4 Launches (last three years) and pipeline

3.5 Plants, capacity, utilisation and capex

Other: Mumbai head office with a DSIR-approved R&D lab; 4 branches and 60 depots in 26 states (deck) or 30 states (AR). Installed capacity in tonnes: Not Available. SCIL does not disclose it in the AR25 or AR26, nine investor decks, four call transcripts or the website pages (sumichem.co.in product and R&D pages searched). [Fact] [B-S1 sl.28; S7 p.15]

• Dahej: Rs 250 to 300 cr indicated in Oct 2025, up to Rs 500 to 600 cr over 5 years if all 7 evaluated products are approved; "roughly one project every year" [B-S4, S3]. Strategy: invest about 15% of consolidated EBITDA each year in upgradation and expansion [B-S1 sl.35].
• Capital commitments not provided for: Rs 173.0 mn on PPE at 31 Mar 2026 (Rs 274.5 mn a year earlier) per the business file; Rs 173.21 mn PPE plus Rs 2.15 mn intangibles per the financials file [B-S7 p.190; F AR26 #p260].
• Custom-synthesis revenue to the parent is Rs 100 to 150 cr a year, flat in FY27 with growth only from FY28 [B-S3]. No incremental revenue from announced capex in FY27.
• Energy and safety: wind 5.8 MW plus solar 2.5 MW; renewables about 26% of energy consumption (AR) vs 65% of power requirement (deck) vs about 70% of electricity after solar expansion (AGM): different bases. Two new captive solar plants in Gujarat and one under installation in Maharashtra [B-S7 p.16, 61; S1 sl.31; S9].

3.6 R&D, certifications, awards

3.7 Customers and go-to-market

Segment Analysis

4.1 Product mix (share of consolidated revenue)

FY24 to FY26 from the MD&A pie charts [B-S8 AR25 p.27; S7 AR26 p.24]; Q1 columns read from slide 15 of the Q1 FY27 deck (image) [B-S1]. Rs cr column = category share x Rs 3,238 cr consolidated revenue, rounded [Est.].

4.2 Category momentum by period (management disclosures)

4.3 Domestic vs export, generic vs speciality, branded vs bulk

Two export customers account for Rs 2,808 mn (FY25 Rs 3,257 mn) of export revenue, about 42% of FY26 exports [Est.]. Rebates and discounts of about Rs 333 cr are the auditor's key audit matter (Tab 7). Source [F AR26 #p242]. The standalone and consolidated bases differ slightly; the consolidated file does not name the two customers.

4.4 Animal nutrition (AND): a volatile, low-margin pass-through

4.5 Environmental Health, Barrix and metal phosphides

Fastest grower and weakest segment [Analyst View]. Herbicides (FY26 +19%, Q4 +87%) and metal phosphides (+11%, Q1 FY27 +21%) are the fastest growers; PGR and the biological lines are the pressure point (share 11% to 9% to 6% on regulation and a bad grape season), and exports to Brazil (-26% in FY26) are the weakest geography, partly offset by Africa (+26%), UAE and the parent.

Financials: P&L

Consolidated, Rs crore unless labelled; FY ends 31 March. Source: Screener consolidated page (data provider C-MOTS, rounded to Rs crore) cross-checked to AR26 (audited, Rs million, 10 mn = 1 crore) and the Q1 FY27 deck, per the financials file [F]. Quarterly gross margins and narrative are from the narrative file [N]. Q2 FY27 is not reported.

5.1 Annual P&L

PAT margin rows are computed here (PAT / revenue) [Est.]; the company's own FY26 PAT margin is 16.8% and FY25 16.1%. OPM FY21 to FY26 uses the company's slide 38 values (18.4, 19.6, 19.0, 16.7, 20.1, 20.7) [B-S1]; Screener rounds to 18, 20, 19, 17, 20 and 21. TTM EPS Rs 11.61 = 10.88 - 3.57 + 4.30 [Est.].

5.2 FY26 detail, audited

AR26 line items (Rs mn): materials consumed 16,509.00; stock-in-trade 2,346.98; change in inventory -81.98; employee 2,737.81; other expenses 4,162.69. Screener nets the Rs 16.1 cr exceptional against other income (146.7 less 16.1 = about 131) [Est.]. FY26 numbers cross-checked to the deck page 15 and AR26 #page=207 [Fact].

• FY24 anomaly. Sales fell 19% after "nearly 2 years of inventory destocking, pricing pressure and climate-related disruptions" (management, Q2 FY26 call); FY24 payout of 80% reflects a Rs 5.00 interim dividend declared 1 Feb 2024 [F AR26 #p32].
• Growth. Five-year sales CAGR 4% and three-year -3%; five-year profit CAGR 8% and three-year 2% (Screener). FY21 to FY26 sales CAGR = (3,238/2,645)^(1/5) - 1 = 4.1% [Est.]. FY25 revenue +11% was volume-led (domestic branded volume +20%, exports volume +30%) despite about 10% price erosion; FY26 +3% (+5 to 6% excluding animal nutrition).
• Other income share. Rs 146.7 cr is 20% of FY26 PBT; Q1 FY27 other income Rs 47.3 cr underlying, plus the Rs 26.9 cr insurance gain [Est. ratio, Fact inputs].
• Earlier history (not core). FY18 sales Rs 1,913 cr, PAT Rs 145 cr; FY19 Rs 2,228 cr / Rs 166 cr; FY20 Rs 2,425 cr / Rs 205 cr; the FY20 equity jump reflects the Excel Crop Care merger [F SCR]. Prior-year anchors: Jun-23 sales Rs 724 cr / PAT Rs 62 cr; Sep-23 Rs 903 cr / Rs 143 cr; Dec-23 Rs 542 cr / Rs 55 cr; Mar-24 Rs 674 cr / Rs 110 cr.
• Standalone. Standalone PAT Rs 5,431.39 mn vs consolidated Rs 5,429.75 mn: subsidiaries are immaterial [F AR26 #p55].

5.3 Last nine quarters

Screener quarterly results, Q1 FY26, Q4 FY26 and Q1 FY27 cross-checked to the deck page 15 [F s3]. *Dec-25 other income of 21 appears to include the Rs 16.1 cr Labour Code exceptional netted by Screener (underlying about 37); the company does not state which quarter booked it [Est.]. The deck [N S11] states the exceptional Rs 16 cr in Q3 FY26 and says it cut PBT and PAT by 13%. **Jun-26 other income 74 = Rs 47.3 cr underlying + Rs 26.9 cr one-off insurance claim (business interruption from the FY23 Bhavnagar fire), shown by the company as an exceptional gain [Fact].

YoY rows are computed from the table above [Est.]. Gross-margin figures in brackets are printed in the narrative file's scorecard without a stated basis; where a bps change is shown they reconcile to the prior-year quarter (for example Q4 FY26 42.3% less 223 bps = 40.0%), so the bracketed numbers are probably prior-year comparators [Est.]. Q3 FY26 EBITDA Rs 99 cr vs Rs 106 cr a year earlier (-7%) with margin 17.5% vs 16.5% [N S11]. Q1 FY27 gross margin is down 307 bps QoQ [F PPT #p15]. Full-year FY25: revenue Rs 3,149 cr (+11%), EBITDA Rs 632 cr (+33%), PAT Rs 506 cr (+37%).

5.4 Q1 FY27: reported vs adjusted

• Demand backdrop: monsoon deficit of 40% to June-end, about a 20% fall in early kharif sowing, elevated channel inventory after March-April pre-buying and price corrections [F PPT #p5].
• Seasonality: Q1 plus Q2 are about 60% of annual revenue (CRISIL); H1 FY26 = Rs 1,987 cr of Rs 3,238 cr = 61% [Est.]. The company says results are "best monitored on an annual basis".
• Product highlights: metal phosphides +21%, animal nutrition and environmental health +11%, herbicides, fungicides and PGR softer; Topgrain and Helibax planned for Q2 FY27.

5.5 Revenue growth, margin analysis and one-time items

Financials: Balance Sheet, Cash Flow & Ratios

Consolidated. Rs crore for Screener-based tables; AR26 tables in Rs million with crore in brackets (10 mn = 1 crore). Source keys follow the financials file [F]: SCR = Screener, AR26 = Annual Report 2025-26 on bseindia.com (#page = PDF page, printed page = PDF page minus 2), PPT = Q1 FY27 deck, CALL = Q4 FY26 transcript (28 May 2026), CRISIL = rating rationale 29 Apr 2026.

6.1 Balance sheet, five-year trend (Screener)

Screener "Borrowings" of Rs 63 cr at Mar-26 = Rs 1.5 cr bank borrowing + Rs 61.8 cr lease liabilities [Est.]. Equity rose Rs 488.7 cr (+16.8%) with no issuance: "funded entirely through retained earnings" (CALL); total assets +12.9%.

6.2 Audited consolidated balance sheet, 31 Mar 2026 vs 2025 (Rs million)

Source [F AR26 #page=206]. Net worth Rs 3,394 cr; tangible net worth about Rs 3,309 cr at Mar-26 (total equity less goodwill 604.4, intangibles 76.0 and intangibles under development 172.3 mn) [Est.]; CRISIL put it at Rs 3,115 cr at 30 Sep 2025 [Fact].

6.3 Receivables quality and contingent liabilities

Source [F AR26 #page=233-234, #page=209, #page=233]. The ECL allowance fell by Rs 39.7 cr in FY26 against a P&L charge of Rs 13.7 cr, implying about Rs 53 cr of write-offs [Est.]. Brazil affiliate: Rs 83.6 cr outstanding, 58% of FY26 annual sales to it, about 211 days against the company's 83, unsecured, no impairment (Tab 7).

The two contingent-liability totals differ by Rs 3.2 cr and are unreconciled; both are small. The FY25 line items shown sum to Rs 377.3 mn against the stated total of Rs 386.82 mn (about Rs 9.5 mn of FY25 items not itemised in the source). Income-tax years in dispute: AYs 2011-12 and 2017-18 to 2023-24. The Board "does not expect material adverse outcome" [G AR26 #p260, #p133-134; M r14].

6.4 Cash flow vs PAT

Cumulative FY22-FY26: CFO Rs 2,266 cr vs PAT Rs 2,345 cr = 97% conversion; cumulative FCF Rs 1,900 cr [Est., sums of Screener].

6.5 FY26 cash flow statement (Rs million)

Source [F AR26 #page=209-210]. Interpretation [Est.]: capex is tiny (Rs 44 cr, 0.7x depreciation), so the Dahej (Rs 150 cr) and Bhavnagar and Tarapur programmes are still ahead. Management intends to fund them, and possibly semiconductor chemicals, from India cash with no capital from Japan (CALL).

6.6 Working capital and ratios

• Mar-25 net working capital was 89 days (CALL). Collections Q1 FY27 about Rs 1,178 cr; FY26 Rs 3,726 cr vs Rs 3,534 cr (+5%). CRISIL expects inventory to rise to 110 to 120 days (from 104 at Mar-25) as imports (50 to 55% of raw materials) are bought for longer cover. Watch: inventory days 124 (Jun-26) vs 90 a year earlier; Rs 884 cr is 1.2x annual EBITDA [Est.].
• Three inventory-day figures (149 company Mar-26; 166 Screener FY26; 124 company Jun-26) and three payable-day figures (77, 86, 89) are different bases, not errors.
• ROE (Screener): five-year average 19%, three-year 16%, last year 16%. My ROE = 543 / average(3,394, 2,905) = 17.2% [Est.]. Company-defined ROCE is 31% FY26 (29% FY25) because it excludes treasury assets from capital employed; Screener ROCE 22.1% at 21 Oct 2026.
• Other ratios [Est.]: current ratio 33,401.5 / 9,698.1 = 3.44x (Mar-25 3.13x); debt-to-equity (borrowings + leases) / equity = 633 / 33,938 = 0.019x (CRISIL adjusted gearing 0.02x); interest cover EBIT 751.5 / 7.8 = 96x (CRISIL adjusted 111x FY25, 108x 9M FY26); dividend payout Rs 64.9 cr / Rs 543 cr = 12%; tax rate 25.4%.

6.7 Debt, liquidity and rating

6.8 Treasury: the "hidden" balance sheet

• Management: cash and equivalents including liquid investments about Rs 2,113 cr at 31 Mar 2026 (CALL) and Rs 2,549 cr at 30 Jun 2026 (PPT #p17); the agent build is within 0.4% of March. Net of borrowings and leases (21,215 - 15 - 618 mn) the agent's net cash is Rs 2,058 cr at March [Est.] versus management's gross Rs 2,549 cr at June: different dates and gross vs net. That is Rs 41.2 per share net (Mar-26; Rs 42.5 on the agent's gross Rs 2,121 cr) to Rs 51.1 per share gross (Jun-26), or 13.3% of market cap at June cash [Est.].
• Inter-corporate deposits: Rs 490 cr placed with unrelated corporates at fixed rates; Rs 3,150 mn placed in FY26, none overdue above 90 days, no related-party loans. Counterparty names are not disclosed: a diligence question [F AR26 #p132, #p232, #p235].
• Treasury income FY26: interest Rs 821.35 mn + gain on sale of financial assets Rs 418.39 mn + fair-value gain Rs 124.67 mn = about Rs 136 cr, 92% of reported other income.
• Dividend payout stays about 12%, which leaves most of the cash effectively at the parent's discretion; the FY24 special interim of Rs 5.00 shows distribution is a decision taken with SCC.

6.9 Equity dilution and share count

Source [F AR22-AR26 related-party notes; AR26 #p210]. FY20 dividend was Rs 0.55 per share. AR25 states Rs 449.23 mn declared for FY25. Cumulative dividend to SCC FY21-FY26 about Rs 399.5 cr [Est.] (Tab 7).

6.10 Key balance-sheet risks

• Inventory build (Rs 884 cr, 124 days) and a lengthening cash cycle in a weak-demand quarter.
• Rs 490 cr of unsecured inter-corporate deposits with undisclosed counterparties, plus Rs 366 cr of bonds and Rs 786 cr of mutual funds marked through P&L.
• Related-party receivable of Rs 99.6 cr (13.5% of net receivables), mostly the Brazil affiliate, unsecured.
• Growing but small tax contingent liabilities (income tax Rs 33.5 cr, up from Rs 13.8 cr).
• Barrix goodwill of Rs 60.4 cr against FY26 PAT of Rs 0.08 cr.
• Payables unwinding (Rs 96.7 cr in FY26) can reverse the other way if supplier terms loosen.

Management, Promoters & Governance

Built mainly from the governance file [G] (annual reports, NSE and BSE filings, AGM scrutiniser report, SEBI shareholding XBRL, CRISIL) with the "Street" file [H] for holder flows and the business file [B] for subsidiaries. G keys: AR26 = Annual Report 2025-26 on bseindia.com (#page = PDF page); SHP = NSE shareholding XBRL; VOTE = AGM scrutiniser report; ANN = NSE announcements feed. SEBI, NSE and BSE enforcement databases could not be checked (no access): Not Available.

7.1 Promoter and ownership

Minimum public shareholding is exactly at the 25% floor: SCC cannot sell without breaching it; any promoter buying would need a later OFS or QIP. No delisting intent disclosed: Not Available [Est.]. Promoter background beyond the corporate profile (education, other interests of individuals) does not apply: SCC is the sole promoter entity and its India nominees are listed below.

7.2 Shareholding trend

Annual: Mar-20 promoter 80.30 / FII 0.05 / DII 4.60 / public 15.05; Mar-21 75.00 / 1.12 / 6.29 / 17.59; Mar-22 75.00 / 1.69 / 6.36 / 16.95; Mar-23 75.00 / 2.40 / 5.50 / 17.09 [G SCR]. DIIs +3.66 pp and the shareholder count -25% since Dec-23, while FIIs trimmed from 3.65% to 2.89% since Sep-25 [Est.].

7.3 Institutional ownership and named holders (30 Sep 2026 XBRL)

• Other holders: banks 66,783 shares; NBFCs 7,290; IEPF 2,367,924 (0.47%); 99.70% dematerialised; 114,363 holders at 31 Mar 2026, 91% holding 1 to 500 shares [G AR26 #p83]. No FPI or insurer holds above 1%. Of the asset managers heard on calls, only Aditya Birla AMC (Flexi Cap) appears above 1%; ChrysCapital, ASK, HDFC AMC and PGIM do not [Fact/Est.]. Free float 25.0%: institutions about 12.6 pp (MF 7.68 + FPI 2.89 + insurance 0.80 + AIF 1.19) and individuals and others about 12.4 pp [Est.].
• Reading the flows [Est.]: domestic institutions' holding rose in each of the last seven quarters (DII 6.02% to 9.68%, about +18.3 mn shares) while FIIs sold 0.76 pp (about 3.8 mn shares). The shareholder count fell 25% (145k to 109k): supply from small holders is being absorbed by SIP-fed flexi, mid and small-cap funds, not active FPIs. There is no value or sector fund in the above-1% list. In the Aug-Oct decline institutions did not sell at the 1% level (ABSL trimmed 0.04 pp). Average daily volume of about 0.4 mn shares (0.08% of equity) on a 25% free float makes the stock sensitive to a single holder.

7.4 Board of directors

The board met 4 times (26 May, 4 Aug, 27 Oct 2025; 27 Jan 2026) with 100% attendance; no directors are related to each other; no board decision went against a committee recommendation. Only two directors (Marfatia, Sivaraman) hold finance or accounting skill in the skills matrix [G AR26 #p75-76, #p79, #p84]. Board average age is 67 (AGM).

7.5 Reconstitution effective 1 Sep 2026

• Resulting board of 7 [Est.]: Shah (NED, non-independent, likely Chair), Ramachandran (MD), Katayama and Uzawa (SCC), Mehta, Sivaraman, Tiwari (independents) = 3 independents of 7 (43%) and 3 non-independent non-executives, 2 of them SCC nominees. Executive presence falls from 3 to 1 and the Chair becomes a non-independent former MD. Independence ratio 43% against a one-third SEBI minimum for a non-promoter non-executive chair (50% if the Chair is treated as promoter-related) [Est.: regulation threshold not tested against filings].
• Senior management after 1 Sep 2026 [G PPT #p8]: Kunal Mittal (Executive Vice President), Fumio Suzuki (SVP) and Hajime Shinomiya (SVP), the last two apparently Japanese SCC executives [Est.]; Yoshihisa Inoue (SVP Manufacturing, SCC deputee) ceased 31 Mar 2026. Org-chart functions: sales and marketing; R&D, regulatory and IP; HR, secretarial and legal; business planning, procurement and logistics; planning and coordination office; business development (new segments); finance and IT; manufacturing, responsible care and projects. Which executive owns which block is Not Available.
• Chetan Shah's and Sushil Marfatia's holdings are not stated in AR26 (Not Available); Dr Ramachandran holds none; Gupte holds 3,060 shares [H AR26 #p47, #p76]. Education and prior career of Shah and Marfatia: Not Available in the six files.

7.6 Committees, KMP and remuneration

Median employee pay rose 8.14%; managerial pay +14.67%. Executive directors plus CFO plus CS cost Rs 18.0 cr = 0.33% of FY26 PAT [Est.]. Performance bonus follows "Sumitomo Chemical global performance evaluation standard". Contracts run 3 to 5 years with 180 days' notice either way. NED commission policy allows up to 1% of net profit (about Rs 7 cr headroom) but only Rs 12 mn was paid [Est.] [G AR26 #p65, #p79, #p250]. "Commission payable to directors" of Rs 58.39 mn is outstanding on the balance sheet (FY25 53.49 mn), well above annual payouts of about Rs 1.2 cr: when it is settled is a fair question [Est.].

7.7 AGM voting, 27 July 2026: the clearest signal from minority holders

• Total votes polled 428.74 mn shares (85.9% of capital; promoter 374.36 mn); 64 public shareholders attended by VC. Resolutions 1 to 2 passed with essentially no dissent [G VOTE].
• Reading [Est.]: institutions did not oppose the SCC related-party envelope or the royalty, but about 31% of public-institution votes opposed the advisory arrangement for the outgoing MD, and about 10 to 11% opposed Sivaraman (over-boarding) and Dr Ramachandran. Item 8 needed a special resolution (75% of votes cast) and passed with 96.2% overall only because the promoter's 374 mn shares voted in favour. Among public holders alone, 68.96% of institutional and 99.95% of non-institutional votes were in favour, about 69.7% of all public votes polled (37.90 mn for vs 16.48 mn against). The law does not require a majority of the minority on this item, so it is valid, but on a public-only count it would not have reached 75%.
• Item 9 passed with the interested promoter not voting: 100% of votes cast by public institutions and 99.93% by non-institutions were in favour [G VOTE].

7.8 Related-party transactions with the parent (SCC)

Company states 15.6% of consolidated sales; on AR26 revenue from operations of Rs 32,383 mn the share is 14.7% [Est.]. The six lines above sum exactly to the total [G AR26 #p49, #p249-250]. Uncertainty flag: the business file read the same purchases from SCC (Rs 333.8 cr FY26, Rs 399.6 cr FY25) from a text-extracted page 177 and noted that column alignment was uncertain; per-party related-party figures should be checked against the PDF table. Purchases from related parties are 21.55% of total purchases in FY26 (24.50% FY25); related-party sales 9.12% of total sales (10.88%) [B-S7 p.95].

Source [G AR22 #p163-164; AR23 #p222-223; AR24; AR25 #p232-233; AR26 #p249-250]. FY21 purchases and payables are AR22 comparatives; FY23 receivable from SCC Rs 44.3 cr (442.88 mn), FY24 Rs 43.7 cr (437.03 mn). Cumulative dividend to SCC FY21-FY26 about Rs 399.5 cr [Est.]; purchases from SCC equal 10.3% of FY26 revenue [Est.]; SCC receivable days about 36 and payable days about 122 on purchases [Est.]. Dividend rows in Tab 6 are in Rs mn; FY24 includes the Rs 5.00 interim.

• Animal nutrition is a back-to-back arrangement with no pricing, inventory or FX risk to SCIL, "fixed margins", sold on a high-seas basis; reference price about Rs 200 to 211/kg on 8,740 tonnes in FY26, now about Rs 500/kg ("may not be sustainable once conditions normalise"). Excluding the Rs 10,000 mn line the FY27 envelope is Rs 6,235 mn (+31% on FY26's actual of Rs 4,754 mn; about 1.3x) [Est.]. Pricing basis: "benchmarked to prevailing price in market"; no bidding process and no valuation report [AR26 #p52].
• Basis note: Rs 7,100 mn is the FY26 envelope approved by shareholders; Rs 4,754 mn is the FY26 actual with SCC (the business file quotes the same actual as 15.6% of sales). The FY27 limit is stated as a percentage of FY26 consolidated sales.
• SCC is the "sole registered import source" for several proprietary products and grants exclusive distribution rights and brand use under a formal distribution agreement: term, renewal and termination clauses are Not Available (not in AR26; searched the RPT note and AOC-2).

7.9 Royalty: the new element

7.10 Other related-party items

• Fellow subsidiaries transacting: Koei Chemical, Mycorrhizal Applications LLC, Sumika Agrotech, SC Environmental Science, Sumitomo Chemical Agro Europe, Argentina, Asia Pte, Australia, Brasil, Philippines, Vietnam, and Valent BioSciences LLC (the FY25 list also had Pace International and Colombia). Valent BioSciences LLC is a fellow subsidiary owned by SCC, not a subsidiary of SCIL; Screener's "About" text mislabels it [G AR26 #p248-250].
• Affiliate sales: Sumitomo Chemical Brasil Industria Quimica S.A. Rs 144.3 cr in FY26 (FY25 205.9; FY24 96.8; FY23 259.9; FY22 202.1); Agro Europe, Argentina, Asia Pte, Colombia and Vietnam small.
• Receivables: total related-party receivable Rs 99.6 cr at Mar-26 (13.5% of net receivables), of which the Brazil affiliate Rs 83.6 cr, 58% of FY26 annual sales to it, about 211 days outstanding against the company's 83 days [Est.]; no impairment recorded; "none of the balances are secured" [AR26 #p250].
• Post-employment trusts (gratuity, superannuation) contributions Rs 64.5 mn and Rs 22.2 mn; payment on behalf of the gratuity trust Rs 31.9 mn. Enterprise controlled by KMP relatives: Kanga and Company (legal), purchases of services Rs 0.30 mn (FY25 0.35 mn). No loans or advances to promoters, directors or KMP; employee loans only [AR26 #p232].

7.11 Subsidiaries and group structure

Barrix profits collapsed on the regulatory suspension of biological products (mid-June to Dec or Jan); the goodwill of Rs 60.4 cr is the exposure. Management expects approvals largely received (CALL). Group structure is a straight 75% parent, one 85% subsidiary and one dormant overseas subsidiary; there are no cross-holdings and no circular ownership. Acquisition track record: ECC merger integrated; Barrix revenue +54% in FY26 but profit near zero [Est.] [G AR26 #p58, #p262-263; B-S7 p.64].

7.12 Auditors and assurance

7.13 Litigation, regulatory actions and compliance lapses

Board report: "no material orders passed by regulators or courts which can impact going concern" [AR26 #p59]. SEBI orders against the company, promoter or directors: none found in any filing. Whistle-blower complaints: none noted; 3 investor complaints, all resolved; no sexual-harassment complaints [AR26 #p60, #p79].

7.14 Insider trades, bulk and block deals

7.15 Dividend and capital-allocation governance

• Dividend per share: FY20 0.55; FY21 0.80; FY22 1.00; FY23 1.20; FY24 5.90 (interim 5.00 declared 1 Feb 2024 + final 0.90; promoter received Rs 232 cr in FY24 including the FY23 final); FY25 1.20; FY26 1.30 (13% of face value) [G AR26 #p32, #p55]. Record date for the FY26 dividend 17 Jul 2026, payable from 3 Aug 2026.
• A 12% payout against Rs 2,113 cr (Mar-26) or Rs 2,549 cr (Jun-26) of cash and no debt: retained cash sits in inter-corporate deposits (Rs 490 cr), bonds and mutual funds. The Dividend Distribution Policy is on the website; no stated payout floor [AR26 #p82].
• Capex: Dahej Rs 150 cr (herbicide intermediate) commercial in FY28-29, further projects of about Rs 150 cr "one a year", possible semiconductor-purified-chemicals project with SCC's ICT and Mobility division ("existing R&D team only; no capital or people from Japan"). Capital-allocation decisions need "formal approvals from our board and our parent company SCC" [CALL].

7.16 Governance scorecard [Analyst View]

Supply Chain

From the business file [B] (Section 10 and Section 8), with channel and credit data from the same file. Specific key starting materials by plant, supplier names and supplier concentration beyond BRSR trading-house data are Not Available (searched the annual reports, decks and transcripts; the company treats the Dahej intermediate as confidential).

Value-chain map

8.1 Upstream: what SCIL depends on

• Inventory policy: management deliberately bought raw and packaging materials ahead (inventory days 149 at Mar-26; 124 at Jun-26 vs 90 a year earlier) to cover West Asia and logistics shocks, "three to four months" of cover [B-S9; S1 sl.40, sl.16]. The West Asia conflict delayed only one 10-tonne shipment by five months [B-S9].
• Cost pass-through in FY27: price increases on 15 Mar, 1 Apr and 1 May 2026 (1 Jun considered); raw-material inflation 10 to 15%, some 20 to 25%; glyphosate technical up 40 to 50% (an analyst's figure); "if competition reduces prices we will have to follow" [B-S3; M S3].
• Import dependence: CRISIL puts imports at 50 to 55% of raw materials; the BRSR says 47% imported or indirect. China "opaque policies on pricing, exports, environment" are a structural risk and China+1 sourcing the opportunity [M S8 AR25 p.25].
• Single-source risk: for several proprietary products SCC is the sole registered import source. Backward integration under way: CTPR at Tarapur from FY25, Dahej intermediate planned.

8.2 Conversion inside SCIL

8.3 Downstream: who depends on SCIL

8.4 Parent technology and licence dependence: the central structural point

Competitive Position

From the market file [M] (Screener peers API and consolidated pages pulled 21 Oct 2026; company-cited industry figures; tags as in the file) and the financials file [F]. Qualitative competitor profiles are [Est.] from general knowledge, not verified in this session unless a source is shown. Web search was unavailable.

9.1 India agrochemical industry: size, growth, structure

9.2 FY27 operating environment

• Monsoon 2026: all-India rainfall 1 Jun to 1 Jul was 108.1 mm vs normal 172.9 mm (-37.5%); kharif sown area at 10 Jul 2026 was 531.25 lakh ha vs 632.69 lakh ha a year earlier (-16%): rice -8.6%, pulses -23.3%, coarse cereals -22.5%, oilseeds -21.0%, cotton -15.3% (Ministry of Agriculture via an infographic reproduced in the deck). IMD forecast 92% of the long-period average; NOAA 82% probability of El Nino in May-July (per management). July brought a vigorous revival; the AGM speech called the recovery "uneven" [M S1 sl.6; S3; S9].
• Q1 FY27 industry: delayed monsoon, 40% rainfall deficit to June-end, about 20% fall in early kharif sowing, elevated channel inventory after March-April advance buying and subsequent price corrections [M S1 sl.5].
• Input costs: depreciating rupee; higher raw material, packaging, solvent and freight costs; SCIL raised prices on 15 Mar, 1 Apr, 1 May 2026; cost escalation 10 to 15% (some 20 to 25%).
• Policy tailwinds named by the company: higher MSPs, PM-KISAN, irrigation and crop-insurance spend, eNAM, drone approvals ("Drone Didi"), Bharat-VISTAAR, China+1 sourcing [M S7 AR26 p.22-23; S8 AR25 p.23-26]. Fertiliser availability flagged by management as a cropping-pattern risk.

9.3 Policy and regulatory map

9.4 Market share and rank

9.5 Peer comparison

Source: Screener peers API, 21 Oct 2026 [M S17]. Caveats: (a) SCIL's quarterly profit variance of +9.3% excludes the Rs 26.9 cr insurance exceptional (reported PAT +20%); (b) company-page P/E and ROCE for Rallis (25.2x, 12.8%), Dhanuka (13.0x, 28.3%) and Bayer (313x) differ because the pages were cached on other dates; peers-API values used; (c) SCIL's own ROCE definition gives 31% for FY26 vs 22.1% on Screener's basis [B-S1 sl.37]. Peer-median P/E 20.1x puts SCIL at about a 67% premium and above every large peer except NACL (loss-recovery distorted) [Est.].

Source: Screener consolidated pages (UPL, PIIND, SHARDACROP, COROMANDEL, INSECTICID, BHARATRAS, DHANUKA) fetched 21 Oct 2026 [M S26]; SCIL from the company deck [B-S1 sl.38]. CAGR and margins are my arithmetic [Est.].

9.6 What the comparison says [Analyst View]

• SCIL has among the highest margins of Indian crop-protection peers outside PI (EBITDA 20.7% vs UPL 17.5%, Sharda 20.1%, Bharat 16%, Insecticides India 10.6%) with no debt, but the slowest growth among scaled peers (2-year CAGR 6.7%; 5-year sales CAGR 4%) and the highest P/E in the set except NACL (33.6x vs 9.8x to 29.4x for most).
• Ex-cash market cap Rs 19,189 cr - 2,549 = Rs 16,640 cr = 28.7x TTM PAT of Rs 579 cr (this does not strip the interest income on that cash from PAT) [Est.]. The premium therefore rests on the SCC pipeline (Excalia Max, Lentigo, Dahej) and margin durability, not on growth to date.
• Management's own framing: growth "in line with the market", profitability first; an analyst on the Oct 2025 call noted the domestic CAGR FY22-25 was low single digit versus listed domestic peers, and management did not dispute it [M S4].
• Read-across from the June-quarter prints: PI -10% sales, Dhanuka -13%, Bayer -4%, Sharda +9%, Rallis +7%, UPL +10%; SCIL +0.6% with +6% EBITDA and 21.9% margin sits mid-pack on growth and top on margin. Upcoming peer dates on Screener: Rallis "tomorrow" (22 Oct), Bayer 3 Nov 2026, Insecticides India 5 Nov 2026 [M S26].

9.7 Competitor profiles

9.8 SCIL's position: moat and gaps

9.9 Porter's Five Forces and barriers [Analyst View]

Barriers and moat [Analyst View]. Real barriers are registrations, the branded dealer network, SCC's early-trial access and a clean credit record. The moat is medium and partly borrowed: it works on the speciality products SCC licenses, while the generic two-thirds competes against Chinese cost and Indian peers. Pricing power is limited to branded formulations; the market-share estimate (about 3.4% of industry, about 5.4% of domestic) says SCIL is a mid-sized, high-return participant, not a price leader.

Risks & Red Flags

Rows 1 to 21 are the market file's risk register [M s7] with its likelihood (L) and impact (I) judgements (H, M, L; [Est.]); rows 22 to 36 are added from the governance, financials, narrative and "Street" files. The Severity badge is my overall read. Priority watch-list from the market file: rows 1, 2, 10, 11 and 21.

Red-flag checklist

Concall Highlights & Guidance

Source: narrative file [N] unless marked; the "Street" file [H] for analyst names and meetings. Management voices: Chetan Shah (MD to 31 Aug 2026; now Chairman or NED), Dr Suresh Ramachandran (MD from 1 Sep 2026), Kunal Mittal (capex, parent, strategy), Anil Nawal (financials). Investor relations is run by Strategic Growth Advisors (SGA), named on the call invites [H].

11.1 Quarterly scorecard (consolidated, Rs cr)

Screener consolidated quarterly cross-checked to decks. Full year: FY25 revenue 3,149 (+11%), EBITDA 632 (+33%), PAT 506 (+37%); FY26 revenue 3,238 (+3%), EBITDA 671 (+6%), PAT 543 (+7%) [N S1 sl.38]. Q3 FY26 EBITDA 99 vs 106 a year earlier (-7%) and margin 17.5% vs 16.5%. Bracketed gross margins are as printed (basis not stated; likely the prior-year comparator).

11.2 Quarter by quarter

11.3 Recurring themes: how the language changed

11.4 Guidance vs actuals: credibility ledger

Tone over time: confident (2024), upbeat (May 2025), defensive on growth but firm on margin (Oct 2025), cautiously optimistic (May 2026), stability-first (Jul 2026). Contradictions: margin guidance consistently met while project timelines and the "no royalty" and "discontinue animal nutrition" statements were reversed; the Q1 FY27 export-driver explanation differs between deck and AGM.

11.5 What the analysts keep asking [H s5]

• Quality signals: management stresses "no returns of goods from channel", "not a single litre of herbicide taken back" while the industry reported unprecedented herbicide returns, receivable days of 83 (down from 91) and supply "only on ground-level demand"; with the ECL allowance down to 7.6% of receivables this supports a "clean channel" narrative. The counter-point is inventory days of 124 vs 90 at June.
• Narrative risks unresolved: why the stock fell about 32% from 14 Aug to 21 Oct 2026 with no negative company news (the monsoon deficit commentary is fact; the cause of the fall is Not Available); the 1 Sep leadership transition; animal-nutrition pass-through inflating revenue. Media and social-media sentiment: Not Available (no web search; Moneycontrol and ET static pages carried no news or ratings; no forum data accessible).
• Rating agency: CRISIL AA/Stable reaffirmed 29 Apr 2026; no negative watch.

11.6 Analysts on earnings calls (coverage evidence, not ratings)

Brokerages that appear repeatedly (likely active coverage universe but unconfirmed) [Est.]: Axis Capital (Periwal, every call since FY21), Elara (Biyani), Nirmal Bang (S. Ramesh), Antique, Equirus, ICICI Securities, Dalal & Broacha, Anand Rathi, Centrum, Nuvama, B&K Securities, Haitong; asset managers present: ChrysCapital, ASK, Aditya Birla AMC, HDFC AMC, PGIM India, Quest, Trinetra, Blue River. Participation on a call does not prove an initiated report or a rating. Transcripts are NSE-filed PDFs (Tab 14). Ratings, targets and consensus: Not Available (Tab 12).

11.7 Investor meetings disclosed to exchanges (Reg 30(6))

Management meets domestic brokers about once a quarter; the Aug-Sep 2026 Motilal Oswal and Elara meetings came just after the stock hit its Rs 565 high (14 Aug) and before the Sep-Oct leg down [Est.]. Notices of analyst or investor meetings were also filed on 19 Aug and 25 Aug 2026 [N s7].

11.8 What to listen for on 27 Oct 2026 (Q2 FY27) [Est.]

Growth, Outlook & Valuation

12.1 Order book and revenue visibility

12.2 Management and agency guidance (no numeric revenue or EPS guidance exists)

12.3 Expansion plans and timeline

12.4 Catalysts and drivers

12.5 FY27 modelling flags

12.6 Valuation at Rs 384.10 (21 Oct 2026)

Reality check on treasury. The market values the operating business at about 25x EBITDA and about 40x core earnings despite a 4% five-year sales CAGR and 8% profit CAGR. The multiple de-rated from 50 to 56x (2022 to 2024 average) to 33.6x, the lowest in the Screener series since February 2020 [Est./Fact].

12.7 Historical P/E (Screener series, TTM basis)

Year-end P/E: 2020 56.4; 2021 52.1; 2022 47.5; 2023 54.7; 2024 53.6; 2025 42.7; 2026 YTD low 33.6 (today). Current P/E is about 33% below the 5-year median (33.6 vs 50.0) [Est.] [F PEH].

12.8 Peer multiples, sensitivity and Street coverage

[Est.] Arithmetic sensitivity on trailing earnings, not a target, a forecast or a model of FY27 or FY28 EPS. It ignores the treasury (cash of Rs 42 to 51 a share already contributes about Rs 136 cr of pre-tax income) and growth. Dividend yield 0.34%; no buyback history; no special dividend planned (Oct 2025).

12.9 Price and volume behaviour [F YF; H]

• Levels: close 21 Oct 2026 Rs 384.10; two-year closing high Rs 652.25 on 30 Jul 2025 (intraday Rs 665 on 4 Aug 2025, Q1 FY26 results day); 52-week high Rs 564.95 (14 Aug 2026), low Rs 364.45 (30 Mar 2026). Two-year return -27%; one-year -27.5%; three-month -28.9%; since the Aug-2026 closing high -32%; since the Jul-2025 closing high -41% [Est.].
• Reason for the Aug to Oct 2026 fall: Not Available. No company disclosure in the window other than analyst-meet notices and the Q2 call intimation. The monsoon deficit, the 1 Sep leadership change and the pass-through accounting are context, not a stated cause.
• 3 July 2026: +13.8% to Rs 502.30 (previous close 441.20, open 443.00, high 509.40) on 29,488,311 shares (73x the three-month average; 5.9% of total equity), turnover Rs 1,437.6 cr, 355,852 trades, deliverable quantity only 2,387,934 = 8.10% [NSE bhavcopy]. Compare 2 Jul: 206,864 shares at 59.4% delivery; 6 Jul: 3,145,917 shares at 18.3%. No company announcement that day (only the AGM notice filed 2 to 3 Jul). A 355k-trade, 8%-delivery day is intraday speculative or algorithmic churn, not an institutional block hand-over; shareholding categories show no matching move (Jun-26: FII -0.39 pp, DII +0.35 pp quarter on quarter) [Est.]. Cause: Not Available.
• Other large-volume days: 5 May 2026 +6.2% (1.29 mn shares), 6 to 7 May (1.0 to 1.5 mn); 10 Jul 2026 +6.8% (2.26 mn); 10 Aug 2026 +5.3% (2.05 mn); 15 Sep 2026 -5.1% (0.26 mn, low volume, no filing).

Close-to-close reactions [Est.] from Yahoo; board timings from the NSE feed. The market has not paid for headline beats recently: it rewarded the Q2 FY25 print (EBITDA margin 25%), then faded each of the next several. Average daily volume of about 0.4 mn shares is about 0.08% of equity.

12.10 Open questions for management on the 27 Oct call [Est.]

1. Royalty product list expansion and any change to the Rs 2 cr cap.
2. Q2 FY27 export outlook after +26% in Q1.
3. FY27 price versus volume split in the domestic business.
4. Timing of the next Dahej project approval and the semiconductor-chemicals decision.
5. Utilisation at technicals (80 to 100% range quoted) and whether growth is capped.
6. Cash deployment framework and dividend payout.

Final Verdict

[Analyst View] Aamara Capital, 21 Oct 2026. Pre-results: Q2 FY27 due 26 Oct 2026, call 27 Oct 2026, 2:30 pm IST.

Base case (12 to 18 months) [Analyst View]

Five things to remember

1. The Q2 FY27 results are expected on 26 Oct 2026 and the call is on 27 Oct 2026 at 2:30 pm IST; Q2 FY26 (sales Rs 930 cr, EBITDA 23.4%, PAT Rs 178 cr) is the base. The company holds calls only for H1 and the full year.
2. Q1 FY27 reported PAT of Rs 214.5 cr includes a Rs 26.9 cr one-off insurance gain; the adjusted figure is about Rs 194.5 cr (+9%). FY26 carries a Rs 16.1 cr Labour Code charge. P/E is 33.1x reported and 33.6x adjusted.
3. The FY27 related-party limit with the parent is Rs 16,235 mn (50.6% of sales) against Rs 7,100 mn approved for FY26 and Rs 4,754 mn actual; Rs 10,000 mn is an animal-nutrition pass-through booked gross at 4 to 5% margin, and a 3% royalty on two products (cap Rs 2 cr) starts in FY27.
4. Net cash is Rs 2,058 cr on the agent's March build and Rs 2,549 cr is management's gross figure at June; debt-free; CRISIL AA/Stable (29 Apr 2026); promoter 75.00%, no pledge, no ESOP, share count unchanged since 2019.
5. The stock fell about 32% from Rs 565 (14 Aug) to Rs 384 (21 Oct) with no company disclosure explaining it; the 3 Jul spike (8.1% delivery) looks like trading churn, not a block sale.

Five questions before investing

1. What are the term, renewal and termination clauses of the SCC distribution agreement, and which products does the 3% royalty cover (and can it widen)?
2. What do Q2 FY27 domestic growth, gross margin (against 43.1% a year ago), inventory days (124 at June) and the Brazil receivable (about 211 days) show, once the animal-nutrition pass-through is stripped out?
3. Who chairs the board from 1 Sep 2026, how are the committees constituted with three independents of seven, and what will Dr Ramachandran's priorities be?
4. What will the Rs 2,549 cr be used for (second Dahej project, semiconductor chemicals, non-agro) and will the 12% payout change?
5. Why did the stock fall 32% from 14 Aug, and who sold or bought on 3 Jul (bulk and block data could not be retrieved)?

What would change the verdict [Analyst View]

Sources

All sources were fetched on 21 Oct 2026 unless a date is shown. The six research files were written by two agents from NSE archive PDFs, the FY20 to FY26 annual reports, investor presentations, concall transcripts, CRISIL, SEBI shareholding XBRL, AGM voting results, Screener and Yahoo Finance. Each file carries its own key table and the keys are not merged. The business, market and narrative files share one S-number scheme (each lists only the numbers it uses, so a number can be missing from one file), whereas the financials, governance and "Street" files use short names such as AR26, PPT and CALL; the same document therefore carries different keys in different files (table 14.1). The six tables below reproduce each file's legend with full URLs (shorthand such as "S12-S16" and "same path pattern" has been expanded). In the body of this report, a prefix names the file: B = 1_business, F = 2_financials, G = 3_governance, M = 4_market, N = 5_narrative, H = 6_heard. Page references stay in the numbering of the file that gave them: business, market and narrative cite printed pages of the sumichem.co.in annual report PDF; financials, governance and "Street" cite PDF pages (#page = printed page + 2) of the bseindia.com annual report PDF. They are never converted.

14.1 Same document, different keys across files

14.2 File 1: 1_business (key table S1 to S25; Business, segments, plants, parent dependence, supply chain)

The business file's legend has no S6, S20, S23 or S26. Its "S12-S16" shorthand (Q2 FY26, Q1 FY26, Q4 FY25, Q3 FY25, Q2 FY25 presentations, all under https://nsearchives.nseindia.com/corporate/) is expanded in the order given.

14.3 File 2: 2_financials (keys SCR, AR26, AR25, AR24, AR23, AR22, PPT, CALL, CRISIL, YF, PEER, PEH, NSE-SHP)

14.4 File 3: 3_governance (keys AR26, AR25, AR24, AR23, AR22, AR21, AR20, SCR, SHP, VOTE, ANN, PPT, CALL, CRISIL)

14.5 File 4: 4_market (keys S1 to S28 as listed)

The market file's legend has no S2, S6, S10, S14, S15, S16, S20, S23, S24 or S25.

14.6 File 5: 5_narrative (keys S1 to S27 as listed)

14.7 File 6: 6_heard (keys ANN, SHP, YF, SCR, PEER, CALL26, CALL25, AR26, VOTE, PPT)

14.8 Not Available (combined, with where searched)