The agrochemical firm's Q2 revenue jumped 23% year-on-year, but a sharp rise in raw material and depreciation costs led to a steep 24% drop in net profit.
Bharat Rasayan reported a 23.4% rise in Q2 FY27 revenue, but net profit fell 23.7% as total expenses surged 26.4%. The margin squeeze highlights intense cost pressures in the agrochemical sector amid a weak monsoon.
For Bharat Rasayan, a strong top line was no defence against a cost surge this quarter. The agrochemical manufacturer posted solid revenue growth but saw profits erode sharply, a sign of the margin pressure gripping the sector.
Revenue for the September 2026 quarter rose 23.4% year-on-year to ₹352.8 crore. Net profit, however, fell 23.7% to ₹21.3 crore. The net profit margin compressed by 370 basis points to just 6%.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Metric
CurrentQ2 FY27
PreviousQ1 FY27
Same quarter LYQ2 FY26
Revenue (₹ Cr)
352.82YoY +23%
338.16
285.96
Profit (₹ Cr)
21.26YoY -24%
37.23
27.88
Net Margin (%)
6.0YoY -38%
11.0
9.7
Why Profits Fell Despite Higher Sales
The story is in the costs. Total expenses jumped 26.4% from a year ago, outpacing revenue growth. A report from MarketPing notes the cost of materials consumed rose by ₹29.1 crore, the single largest driver.
Higher depreciation, up 24.4%, also weighed on profits. This likely reflects recent capital expenditure, with the company reporting ₹30.3 crore in capex for the first half of the year.
The Broader Sector Squeeze
Bharat Rasayan's struggle is not isolated. A Jefferies report cited by Punjab Kesari noted global agrochemical demand remained weak in the September quarter despite rising crop prices. The weak 2026 monsoon further hurt domestic demand for crop protection products.
One analysis on 91Capital described it as "one of the most difficult first halves for the Indian agrochemical industry in over a decade." Farmers skipped spray rounds due to dry weather, hitting volumes.
The Road Ahead and Market Reaction
Management did not provide specific FY27 guidance in the results filing. The stock closed at ₹1,052.9 on November 13, the day before the results. MarketsMojo recently downgraded the stock to 'Sell' on deteriorating technical and fundamental metrics.
Institutional ownership remains low, with FIIs holding 0.59% and mutual funds 1.66%, as per data from Alfafinder. The company trades at a P/E of 13.8, a 41% discount to the industry average.
Key Points
Revenue growth of 23.4% was overshadowed by a 23.7% decline in net profit due to a faster rise in expenses.
The net profit margin fell to 6%, down 500 basis points from the previous quarter, indicating severe cost pressure.
The agrochemical sector faces headwinds from a weak monsoon and subdued global demand, impacting near-term outlook.
The stock trades at a significant discount to the industry, reflecting the earnings pressure and sectoral challenges.
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Hexa Perspective
The quarter reveals a business caught between rising input costs and an inability to fully pass them on. With the net margin now 480 basis points below its trailing twelve-month average, the squeeze is acute.
The path to recovery hinges on a reversal in raw material costs or a significant improvement in domestic demand. Given the forecast for El Niño conditions to persist, a swift demand recovery appears unlikely. Investors are thus weighing the company's solid revenue base against a profitability reset that may last several quarters.
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Frequently asked questions
What were Bharat Rasayan's Q2 FY27 results?
For Q2 FY27 (September 2026), Bharat Rasayan reported a consolidated revenue of ₹352.82 crore, a 23.4% increase year-on-year. However, net profit fell 23.7% to ₹21.26 crore as total expenses grew faster than sales, compressing margins.
Why did Bharat Rasayan's Q2 FY27 profit fall despite higher revenue?
Bharat Rasayan's profit fell because total expenses surged 26.4%, outpacing the 23.4% revenue growth. A MarketPing report highlights a significant ₹29.1 crore increase in the cost of materials consumed as the primary driver, squeezing profitability.
What caused the 500 bps QoQ drop in Bharat Rasayan's net profit margin in Q2 FY27?
The 500 basis point quarter-on-quarter drop in Bharat Rasayan's net margin to 6% was caused by a sharp 11.4% rise in total expenses. This was led by higher raw material costs and a 14% increase in depreciation expense compared to the June 2026 quarter.
Was the profit decline at Bharat Rasayan in Q2 FY27 due to higher raw material costs?
Yes, higher raw material costs were a major factor. According to a MarketPing analysis, the cost of materials consumed rose by ₹29.07 crore, or 12.8%, year-on-year. This increase was the largest component of the 26.4% jump in total expenses that eroded profits.
Did Bharat Rasayan's Q2 FY27 revenue growth come from volume or price increases?
The results filing does not specify the driver. However, given the weak monsoon and reported soft demand in the agrochemical sector, the 23.4% revenue growth likely involved a mix of volume and price, with potential support from a low base in the same quarter last year.
Why did Bharat Rasayan's depreciation expense increase 24.4% YoY in Q2 FY27?
The 24.4% year-on-year increase in depreciation to ₹8.05 crore reflects the company's ongoing capital expenditure. For the first half of FY27, Bharat Rasayan reported capital expenditure of ₹30.27 crore, indicating new assets have been added to the books.
What guidance did Bharat Rasayan management provide for FY27 after Q2 results?
The company's results filing and accompanying research snippets did not contain any specific financial guidance for FY27 from the management. The focus remains on the reported quarterly numbers amid a challenging sector environment.
What is the current pricing and demand environment for agrochemicals in India?
The environment is challenging. A Jefferies report cited by Punjab Kesari noted weak global demand, while analysis on 91Capital described a difficult first half due to a deficient monsoon causing farmers to skip sprays. This has led to margin pressure across the sector.
Did Bharat Rasayan Q2 FY27 results beat or miss analyst estimates?
No verified consensus analyst estimates for Bharat Rasayan's Q2 FY27 results are cited in the available research. Therefore, it is not possible to definitively state whether the results were a beat or a miss against market expectations.
Which brokerages changed their rating or target price for Bharat Rasayan after Q2 results?
Specific brokerages are not named in the research. However, MarketsMojo downgraded Bharat Rasayan to a 'Sell' from 'Hold' in August 2026, citing deteriorating technical and fundamental metrics, which provides context for recent sentiment.
Are mutual funds or FIIs increasing or decreasing their stake in Bharat Rasayan?
Institutional stakes remain low and relatively stable. Data from Alfafinder shows Foreign Institutional Investors (FIIs) held 0.59% and Domestic Institutional Investors (DIIs) including mutual funds held 1.66% as of the latest quarter.
How did Bharat Rasayan's stock price react to the Q2 FY27 results announcement?
The stock closed at ₹1,052.9 on November 13, 2026, the trading day before the results were announced on November 14. A specific post-announcement reaction is not detailed in the available research snippets.
Bharat Rasayan Q2 profit drop
Bharat Rasayan's Q2 FY27 (September 2026) consolidated net profit dropped 23.7% year-on-year to ₹21.26 crore. This decline occurred despite a 23.4% rise in revenue, as total expenses grew at a faster rate of 26.4%.
Bharat Rasayan Q2 FY27 results August 2026
Bharat Rasayan announced its Q2 FY27 results for the period ended September 2026 on November 14, 2026. The results showed revenue of ₹352.82 crore (up 23.4% YoY) and a net profit of ₹21.26 crore (down 23.7% YoY).
