Strong Q3FY26 Numbers and Commentary
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SCL_Rating Rationale.pdf (295.3 KB)
Credit rating report on the WC and other business aspects.
Other aspects of the latest shareholding of the company (March 2026), Dolly Khanna and other institutional investors have increased holding.
Shareholding Pattern Public ShareHolder.pdf (178.3 KB)
PPT MAY 26 SHARDA CROPCHEM.pdf (2.7 MB)
GOOD NOS AND CHEAP VALNS
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Gross Margins, EBITDA, PAT & Revenue expanded but not the stock price. Any clue?
The headline 60.8% surge in operating profit is impressive, but the real story is buried in the working capital cycle. Sharda has managed to slash its cash cycle by 48 days in a single year, bringing it down to just 70 days. In a sector where cash is usually trapped in inventory for months, this efficiency has allowed the company to remain net debt-free while generating enough cash to fund a ₹500 Cr annual investment in new product registrations. For every ₹100 of profit reported, ₹96 came in as hard cash this year. Europe has emerged as the primary growth engine, with volumes nearly doubling as the global inventory glut finally cleared. This geographic strength more than offset a temporary slowdown in North America, where erratic weather delayed the spraying season.
The divergence is a positive signal; it shows the company’s massive portfolio of 3,004 registrations allows it to pivot sales to whichever region has the best climate conditions at any given time. Operating margins at 23.6% are now well above the historical 18-20% range, driven by stabilized sourcing costs from China. The forward pipeline is the most significant catalyst. There are 1,076 product registrations currently pending approval globally. These are not just ‘aspirational’ products; they represent applications already in the regulatory process. Management has guided for 15-20% revenue growth in FY27, which appears conservative given that the European momentum is sustaining and the North American market is due for a weather-led recovery.
The increase in total dividend to ₹15 per share further confirms that the company is entering a ‘harvesting phase’ of its multi-year investment in global licenses. Valuation remains the final piece of the puzzle. At a PE of 18.3x against 60% EBITDA growth, the market is still pricing Sharda like a cyclical commodity player rather than a high-margin IP aggregator. The PEG ratio of 0.30 suggests a significant gap between the company’s operational delivery and its market price. While weather volatility in North America remains a risk, the strength of the European recovery and the lean balance sheet provide a substantial cushion for the coming quarters.
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Vivek , Where do you see its reduced by 48 days and current working capital days as 70 or I mis reading something.
I see this in presentation
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In call just now they confirmed that realizations are negative, volume growth is just 4% and major growth is coming from FX. May be that is why stock is falling. Thank you.
But 20% fall is just insane! Seems like someone sold a lot
If business can grow basis guidance, then current valuations (after this fall) seems reasonable. If they face headwinds on FX & realizations fall more then another 30% fall from CMP is reasonable, I think.
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