| Established track record of operations and extensive experience of the promoters
The group is involved in the manufacturing of biofertilizers, biopesticides, and micro and macronutrients. It is promoted by Mr. Y Sambasiva Rao Yeluri, Mr. Malathi, and others, who have over two decades of experience in the agricultural sector. The top management is well supported by a qualified and experienced second-line team. The company operates through integrated facilities across India. The group primarily sells to dealers and also directly to farmers. Over the years, Nova Group has developed a strong brand image among stakeholders such as customers and creditors, and is recognised as one of the leading brands in the southern region of India in the biofertilizers and biopesticides segment. Acuité believes the group will continue to benefit from its promoters’ experience, established presence, and expanding scale of operations, ensuring healthy revenue visibility over the medium term.
Improvement in Sales and Profitability
The Nova group’s revenue increased to Rs. 294.14 crore in FY25 from Rs. 252.48 crore in FY24, primarily driven by higher operational activity in Nova Agri Sciences Private Limited. As of 30 June 2025, consolidated revenue stood at approximately Rs. 46.74 crore. Within this, Nova Agritech Limited recorded standalone revenue of Rs. 11.65 crore, while Nova Agri Sciences Private Limited contributed Rs. 35.09 crore. For the full year FY25, NATL posted standalone revenue of Rs. 165.85 crore compared to Rs. 179.84 crore in FY24, whereas NASPL reported Rs. 140.45 crore against Rs. 111.66 crore in the previous year. Revenue is expected to improve further in the near to medium term following recent capital expenditure for expanding the existing formulation plant and establishing a new one. EBITDA margins stood at 14.52 per cent in FY25, down from 17.57 per cent in FY24, due to a marginal increase in raw material costs. PAT margins also moderated to 9.32 per cent in FY25 from 11.21 per cent in FY24.
Healthy Financial Risk Profile
The group’s financial profile is healthy, marked by low gearing, healthy net worth and robust debt protection metrics. The net worth of the group stood healthy and improved at Rs. 218.52 crore in FY25 as against Rs. 191.80 crore in FY24, due to accretion of profits to the reserves. The group’s total debt as on March 31, 2025 stood at Rs. 54.65 crore as compared to Rs. 61.20 crore as on March 31, 2024; comprising long-term debt of Rs. 2.93 crore, short-term debt of Rs. 49.70 crore, USL from promoters of Rs. 0.05 crore and maturing debt repayment obligations of Rs. 1.97 crore. The gearing of the group stood below unity at 0.25 times as on March 31, 2025 against 0.32 times as on March 31, 2024. TOL/TNW stood at 0.50 times as on March 31, 2025. Further, the debt coverage indicators have stood healthy with ICR and DSCR at 8.60 times and 3.03 times during FY25 against 4.91 times and 3.02 times during FY24.
Strategic Capacity Expansion
Nova Agritech Limited (NATL) and its subsidiary, Nova Agri Sciences Private Limited (NASPL), have successfully completed their planned capital expenditure projects funded through IPO proceeds. The investments were aimed at enhancing formulation manufacturing capabilities at Singannaguda Village, Telangana. NATL invested Rs. 10.48 Crore for expanding its existing plant, while NASPL invested Rs. 14.20 Crore to set up a new facility. Both plants have commenced operations from 7th July 2025 onwards. The project execution was aligned with the IPO objectives and marks a strategic milestone, significantly boosting the Group’s manufacturing capacity and operational efficiency.
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| Intensive nature of Working capital operations
Nova Group has intensive working capital operations, with average gross current asset (GCA) days standing over 319 days during FY23 to FY25. The GCA days stood at 324 days in FY25 against 359 days in FY24, on account of higher inventory levels and receivables. Inventory days increased and stood at 93 days in FY25 against 87 days in FY24. The debtor days increased and stood at 224 days in FY25 as against 178 days in FY24. The average credit period allowed to the customers is around 90 days. The creditor days of the group stood at 81 days for FY25 as against 61 days for FY24. The average credit period allowed by the suppliers is around 60–90 days.
Regulatory Constraints and Competitive Pressure Impact Margins
The agrochemical industry is highly fragmented, with a large number of organized and unorganized players. This limits pricing flexibility and bargaining power, putting pressure on margins. The industry is regulated by the Ministry of Chemicals and Fertilizers, and all products must undergo mandatory inspection before being introduced to the market. Additionally, every new product must be registered, which involves a lengthy process that can take several months or even years.
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