Weak Monsoon and Elevated Input Costs Set to Hit India’s Agrochemical Earnings in Q2 FY27

10 October 2026, New Delhi: India’s listed agrochemical companies are heading into a weak July-September (Q2 FY27) earnings season, as brokerages sharply cut their profit estimates on the back of deficient monsoon rainfall and persistently high raw material costs. Brokerage research shared points to earnings declines across nearly every major domestic crop protection player, with some companies facing EBITDA cuts of more than 50 percent for the quarter.

Nuvama Research expects some of the steepest hits among diversified agri-input companies. The brokerage projects Coromandel International’s Q2 FY27 EBITDA to fall 56 percent year on year, while PI Industries is expected to see a 36.7 percent decline. Rallis India and Sumitomo Chemical India are forecast to post EBITDA drops of 26.5 percent and 17.4 percent, respectively.

Elara Securities, covering a broader agrochemical and fertiliser universe, expects revenue for the group to fall 7 percent, EBITDA to drop 13 percent, and net profit to decline 31 percent for the quarter. Across listed majors generally, brokers see revenue growth potentially falling by as much as 12 percent year on year.

The earnings pressure traces to two separate but related problems. On the demand side, India’s southwest monsoon ended about 12.2 percent below the long-period average, the weakest since 2015. Kharif cropped area is nearly flat compared with last year, and dry spells in parts of Maharashtra and Karnataka are threatening yields in some pockets. Weaker pest and fungal pressure this season has meant lower-than-usual agrochemical consumption, and dealers have been cautious about restocking, which is limiting companies’ ability to push through price increases even where costs have risen.

On the cost side, analysts at Antique Stock Broking (Manish Mahawar and Riju Dalui) pointed to a spike in technical-grade input prices between March and May, driven by the West Asia conflict, alongside rupee depreciation, higher freight, packaging and solvent costs. Some of those input costs have eased back toward pre-conflict levels since June, but elevated freight and crude oil prices are expected to keep overall cost bases higher than a year ago through the rest of the fiscal year.

Despite the near-term weakness, brokerages are not uniformly bearish on the sector’s medium-term prospects. Elara Securities expects agri-input stocks to bottom out between October and December 2026, with a rebound beginning in the first half of calendar year 2027 and an earnings recovery from the first quarter of FY28, as El Niño conditions are expected to ease by February. Antique’s preferred picks within the space are Sumitomo Chemical India and Dhanuka Agritech, while Elara favours Dhanuka Agritech and Bayer CropScience among agrochemical names, and Paradeep Phosphates and Coromandel International among fertiliser-linked names. Shares of the sector’s top listed players have fallen between 18 and 40 percent over the past year, reflecting how much of this pressure markets had already priced in heading into the print.

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