| Established track record, experienced management and diversified product portfolio
SEPL has a long operational track record of over three decades in the agrochemical industry, supported by the extensive experience of its promoters and management team. The company has established manufacturing capabilities across technical-grade insecticides, herbicides, fungicides, formulations and plant growth regulators (PGRs), resulting in a diversified product portfolio. Further, the company's presence across multiple product categories and end markets supports business stability and enables it to cater to a broad customer base.
Improving operating performance supported by diversified geographical presence and planned capacity expansion
The company's operating performance improved in FY2026, with revenue increasing to Rs.373.37 crore from Rs.349.50 crore in FY2025, driven by higher export contribution and geographical diversification across the US, Brazil, Latin America, Southeast Asia and Africa. The 5MFY2027 revenue stood at Rs.222.37 Cr (Prov.). The company has also demonstrated growth in key products such as Profenofos Technical and Propiconazole Technical during FY2026. Despite a challenging operating environment marked by raw material price volatility and supply chain disruptions, the company maintained its operating profitability with EBITDA margin improving to 5.17 per cent in FY2026 from 4.54 per cent in FY2025.
The company has also undertaken capacity expansion initiatives, having incurred capex of around Rs.15 Cr. in FY2026 and envisaging a further capex of around Rs.25 Cr. in FY27 & FY28 towards capacity augmentation and commercialization of new molecules, which is expected to support its export growth strategy and strengthen its manufacturing capabilities over the medium term.
Acuité believes that the company's diversified geographical presence and expansion plans will continue to support its business risk profile.
Healthy financial risk profile
SEPL’s financial risk profile remained healthy, marked by healthy net worth, moderate leverage levels and comfortable debt protection metrics. The net worth improved to Rs.167.56 Cr. as on 31st March 2026 as compared to Rs.158.42 Cr. as on 31st March 2025. The improvement is primarily on account of accretion of profits to reserves.
Further the debt-equity stood below unity at 0.33 times as on March 31, 2026, from 0.21 times as on March 31, 2025, owing to increase in the debt levels. TOL/TNW stood at 1.01 times as on March 31, 2026, against 0.97 times as on March 31, 2025. Debt protection metrics stood comfortable; interest coverage ratio at 9.58 times in FY2026 and debt service coverage ratio at 2.38 times during the same period. Further, Debt/EBITDA increased to 2.52 times as against 1.65 times over the same period owing to higher debt levels. Nevertheless, the financial risk profile continues to remain healthy supported by comfortable net worth, moderate gearing and healthy debt servicing ability.
Acuité believes that the financial risk profile of SEPL is expected to remain healthy over the medium term, despite the planned debt-funded capex, supported by healthy cash accruals and improving operational performance.
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| Working capital intensive operations
SEPL’s working capital operations remained intensive and witnessed further elongation in FY2026, marked by GCA days of 242 days against 220 days in FY2025. The increase in working capital intensity was primarily driven by higher inventory holding levels during the year, resulting in a lengthening of the inventory cycle. The company maintained higher inventory levels to ensure uninterrupted availability of key raw materials amid continued volatility in raw material prices and supply chains.
The inventory days stood at 89 days in FY2026 against 65 days in FY2025. The debtor days stood at 123 days in FY2026 against 130 days in FY2025. The creditors days stood at 118 days in FY2026 against 139 days in FY2025. The average utilization of fund based limits stood moderate at ~43.75% for the last 06 months ended August 2026.
Acuité believes that SEPL's working capital operations are likely to remain intensive over the medium term on account of the nature of operations and inventory requirements associated with its product portfolio.
Exposure to agro-climatic and industry-related risks
SEPL remains exposed to risks inherent in the agrochemical industry, with demand for its products being dependent on agricultural activity, cropping patterns and prevailing agro-climatic conditions. Any adverse weather events or weak monsoon conditions could impact agrochemical consumption and, consequently, the company's operating performance.
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