Low demand hit agrochemical manufacturers in the December quarter.

The December quarter was volatile for agrochemical companies, with many experiencing poor performance due to weak and erratic monsoon and insufficient excess soil moisture for the rabi season. Furthermore, the downward trend in prices of generic products has affected the performance of some companies. While weak demand has affected sales volumes and profits of large companies such as Bayer CropScience and UPL, among others, smaller competitors such as Dhanuka Agritech and Insecticides ( India) have marginal growth.

Bayer CropScience reported a 31% fall in net profit in the December quarter to ₹93.1 billion compared to the same period last year (₹134.5 billion). Its revenue fell 8% to ₹954.9 cr (₹1037.9 cr). In a statement last week, Simon Wiebusch, vice president/general manager and chief operating officer of BCSL, said: “The erratic monsoon has resulted in low reservoir levels. Crop changes and resulting missed spraying have negatively impacted our quarterly performance due to lower sales volumes and margins.

Inventory destruction weighs on

UPL saw revenue fall 28% to ₹9,887 crore (₹13,679 crore) and posted a net loss of ₹1,217 crore for the quarter. “Inventory drawdown continues to weigh on the global agrochemical market. Overall, pesticide prices remained stable quarter-on-quarter, but fell significantly from the previous year’s highs amid intense post-patent price competition. Against this backdrop, our third quarter performance was significantly impacted by these headwinds, as was the rest of the industry, which is currently experiencing its worst downturn in a decade,” Mike Frank, CEO of UPL Corp.

Positive against all odds

Pesticides (India) on Monday reported a slight growth in operating revenue at ₹357.94 crore (₹356.53 crore), while profit improved 31% to ₹12.27cr (₹9.33cr). “We continue to see growth in our product portfolio, driven by RandD and backward integration initiatives” said Rajesh Aggarwal, MD, IIL. Our targeted marketing efforts and branding activities have delivered positive results despite seasonal challenges.

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