Weak demand, inventory to weigh on agrochemical companies' stocks

Street remains cautious about the sector due to lower price realisations and fears about El Nino's impact on the monsoon

Headwinds, which hit the prospects of agrochemical companies in the second half of FY23, are likely to continue in the June quarter (Q1FY24). After a 4 per cent revenue growth year-on-year (y-o-y) in the March quarter which missed estimates, aggregate sales growth for the companies in the June quarter is expected to fall by 1 per cent as compared to the year-ago quarter.

Himanshu Binani, an analyst with Prabhudas Lilladher Research, expects the performance of agrochemical companies to be muted primarily due to sluggish demand in both domestic and global markets, higher carry-over inventory from last year (FY23) leaving limited