What is the reason for this sharp rally in Sharda Cropchem?

The stock of specialty chemicals manufacturer for the agri sector, Sharda Cropchem, hit a new all-time high of Rs768 on the back of very strong business outlook. Sharda Cropchem is predominantly into the manufacture of pesticides and agrochemicals and caters to the high end chemical needs of this niche segment. For the March 2022 quarter, Sharda reported 32% higher net profit at Rs177 crore while sales was also up 32% at Rs1,434 crore.

Let us first look at the reason for the top line growth. This was largely on the back of better product mix and higher price realization. On the bottom line front, the impact of supply chain constraints were limited on the stock. As a result, the EBITDA margins were up 29% at Rs317 crore and even in the midst of such tough conditions EBITDA margins shrank by just about 50 bps. Sharda Cropchem is also expanding its product range aggressively.