In any cyclical sector, its hard to tell if we are at peak of a cycle. However, we can say with reasonable certainty whether we are in higher part or lower part of the cycle. For global agrochemicals, we have had a couple of very good years and are definitely towards the higher end of the cycle. Also, I have a feeling that we also crossed the peak as realizations of a number of technical grade pesticides have fallen off in the past few weeks. This has come on the back of droughts in China and a very hot summer in Europe. So, the post covid boom is probably over and we might be in for a couple of flat years. This is my current understanding.
While rising gas prices in EU shifts more business towards Asia, it has also impacted Euro in an adverse way. Sharda realizes half of its sales from Europe and procures in USD. The adverse currency movement has impacted Sharda significantly.
If you go back and read this post, you will see that margins have been adversely impacted since 2018. In last few quarters, it seemed that gross margins would revive but that has been reversed in Q1FY23. Its agchem margins are definitely cyclical.
Disclosure: Invested (position size here, no transactions in last-30 days)