The company's second-quarter performance reflects a troubling pattern of operational inefficiency and revenue contraction. Net sales declined 5.63% quarter-on-quarter to ₹45.60 crores and fell 17.57% year-on-year, indicating both seasonal weakness and structural market share losses. More concerning is the persistent negative operating profitability, with PBDIT (excluding other income) at ₹-3.41 crores, translating to a margin of -7.52%. This marks the seventh consecutive quarter of operating losses, a red flag for any manufacturing enterprise.
The stock's post-result reaction has been brutal. Trading volumes remain anaemic at just 2,375 shares on February 12, 2026, with the price sliding 3.24% to ₹57.10. The stock now trades below all key moving averages—5-day (₹60.08), 20-day (₹57.31), 50-day (₹55.80), 100-day (₹62.57), and 200-day (₹74.25)—signalling entrenched bearish sentiment. Technical indicators point to a "mildly bearish" trend, with immediate support at the 52-week low of ₹52.00 offering little comfort.
| Quarter | Net Sales (₹ Cr) | QoQ Growth | Net Profit (₹ Cr) | Operating Margin |
|---|---|---|---|---|
| Sep'25 | 45.60 | -5.63% | -4.02 | -7.52% |
| Jun'25 | 48.32 | -8.40% | -1.50 | -2.40% |
| Mar'25 | 52.75 | +3.65% | -5.15 | -8.62% |
| Dec'24 | 50.89 | -8.01% | 0.52 | 4.11% |
| Sep'24 | 55.32 | +39.06% | -1.06 | 0.53% |
| Jun'24 | 39.78 | +8.27% | -1.55 | -0.91% |
| Mar'24 | 36.74 | — | -3.83 | -10.77% |
Financial Performance: A Spiral of Deteriorating Metrics
Aimco Pesticides' Q2 FY26 results reveal a company struggling with fundamental operational challenges. Net sales of ₹45.60 crores represent a 5.63% sequential decline and a 17.57% year-on-year contraction, suggesting both cyclical headwinds in the agrochemical sector and company-specific market share erosion. The revenue trajectory over the past seven quarters shows erratic volatility, with the company unable to sustain any meaningful growth momentum.
Operating profitability remains deeply negative. The company posted an operating loss (PBDIT excluding other income) of ₹3.41 crores in Q2 FY26, compared to ₹1.15 crores in Q1 FY26. This translates to an operating margin of -7.52%, the worst in three quarters. The negative margin indicates that Aimco is burning cash on every rupee of sales—a structurally unsustainable position. Employee costs remained relatively stable at ₹3.88 crores, but with shrinking revenues, the fixed cost burden is crushing profitability.
The net loss of ₹4.02 crores in Q2 FY26 compares unfavourably to the ₹1.50 crore loss in Q1 FY26, marking a 168.00% sequential deterioration. On a year-on-year basis, while the loss appears to have narrowed from ₹1.06 crores in Q2 FY25, this comparison is misleading—the company has been loss-making for seven of the last eight quarters. Interest costs of ₹0.49 crores and depreciation of ₹0.89 crores further pressured the bottom line, with the tax credit of ₹0.75 crores providing marginal relief.
Operational Distress: Structural Challenges Mount
The company's operational metrics paint a grim picture of structural distress. Return on equity (ROE) stands at a catastrophic -41.53% for the latest period, indicating severe shareholder value destruction. The average ROE over the past five years is just 5.70%, far below industry standards and signalling chronically weak capital efficiency. Return on capital employed (ROCE) is equally dismal at -27.24% for the latest period, with a five-year average of -1.31%—reflecting the company's inability to generate adequate returns from its deployed capital base.
Balance sheet quality has deteriorated markedly. Shareholder funds declined to ₹29.88 crores in FY25 from ₹35.02 crores in FY24, a direct consequence of accumulated losses eroding equity. Trade payables surged to ₹114.87 crores from ₹83.75 crores, suggesting stretched working capital management and potential supplier payment delays. Current liabilities ballooned to ₹142.64 crores against current assets of ₹136.71 crores, indicating a precarious liquidity position. While long-term debt remains minimal at ₹0.19 crores, the company's negative net debt position of ₹4.00 crores in cash provides little cushion given the operating cash burn.
Cash flow dynamics underscore the operational stress. For FY25, cash flow from operations was a meagre ₹2.00 crores, down from ₹7.00 crores in FY24. With profit before tax at ₹-9.00 crores, the company's ability to generate operational cash remains questionable. The five-year sales growth of just 2.59% and a staggering five-year EBIT decline of 203.08% highlight the company's inability to scale profitably. The EBIT to interest coverage ratio of 1.09x is alarmingly weak, leaving little margin for error in debt servicing.
Critical Warning: Structural Profitability Crisis
Aimco Pesticides has reported operating losses in seven of the last eight quarters, with negative operating margins persisting across multiple periods. The ROE of -41.53% and ROCE of -27.24% signal severe capital destruction. With shrinking revenues, negative margins, and eroding shareholder equity, the company faces an existential profitability crisis requiring urgent operational restructuring.
Industry Context: Underperformance in a Recovering Sector
The agrochemical sector has shown resilience over the past year, with the Pesticides & Agrochemicals index delivering a return of 8.63%. However, Aimco Pesticides has dramatically underperformed, posting a -42.26% return over the same period—a staggering 50.89 percentage point lag versus the sector. This underperformance is not merely cyclical but reflects company-specific operational failures and market share losses to better-capitalised competitors.
The company's positioning within the agrochemical value chain—focused on chlorpyrifos, triclopyr, and bifenthrin formulations—has not translated into competitive advantage. Regulatory pressures on certain pesticide molecules, shifting farmer preferences, and intense competition from larger players with diversified product portfolios have eroded Aimco's market position. The company's inability to innovate or expand its product mix has left it vulnerable to margin compression and volume declines.
Aimco's market capitalisation of ₹58.00 crores places it firmly in the micro-cap segment, where access to capital, institutional interest, and operational scale are significant constraints. The company's manufacturing facility in Lote Parshuram, Ratnagiri, operates well below optimal capacity utilisation, further pressuring per-unit economics. Without strategic partnerships, product diversification, or operational turnaround initiatives, the company's competitive position is likely to deteriorate further.
Peer Comparison: Lagging on All Key Metrics
Relative to peers in the pesticides and agrochemicals sector, Aimco Pesticides ranks poorly across critical financial and valuation parameters. The company's ROE of 5.70% (five-year average) trails peers such as Adarsh Plant (16.91%), Bhaskar Agrochemicals (12.53%), and Shivalik Rasayan (6.12%). The negative ROE of -41.53% for the latest period places Aimco at the bottom of the peer group, highlighting severe capital inefficiency.
| Company | P/E (TTM) | P/BV | ROE (%) | Debt/Equity | Div Yield (%) |
|---|---|---|---|---|---|
| Aimco Pesticides | NA (Loss Making) | 2.29 | 5.70 | 0.60 | NA |
| Shivalik Rasayan | 32.66 | 0.78 | 6.12 | 0.09 | 0.17 |
| Mahamaya Lifesciences | 34.50 | 8.87 | 0.00 | 0.00 | NA |
| Bhaskar Agrochemicals | 12.51 | 3.35 | 12.53 | 0.70 | NA |
| Super Crop Safe | 23.88 | 1.25 | 4.39 | 1.38 | NA |
| Adarsh Plant | NA (Loss Making) | 34.21 | 16.91 | 4.15 | NA |
Aimco's price-to-book ratio of 2.29x appears moderate compared to peers like Adarsh Plant (34.21x) and Mahamaya Lifesciences (8.87x), but this is misleading given the company's loss-making status. The absence of a P/E ratio due to negative earnings, combined with zero dividend yield, further underscores the investment unattractiveness. The company's debt-to-equity ratio of 0.60 is moderate but offers no comfort given the negative cash generation and eroding equity base.
Valuation Analysis: Risky at Any Price
Aimco Pesticides' valuation metrics reflect the market's deep scepticism about the company's prospects. With a P/E ratio classified as "NA (Loss Making)" due to persistent losses, traditional earnings-based valuation methods are inapplicable. The price-to-book ratio of 2.29x may seem reasonable on the surface, but the book value of ₹30.26 per share is rapidly eroding due to accumulated losses. At the current market price of ₹57.10, investors are paying a premium for a shrinking equity base—a classic value trap.
The company's EV/EBITDA multiple of -10.05x and EV/EBIT of -6.62x are negative, reflecting the company's negative operating profitability. The EV/Sales ratio of 0.36x suggests the market is valuing the company at just 36% of annual revenues—a distress valuation typically assigned to companies facing bankruptcy or liquidation scenarios. The valuation grade has been classified as "RISKY" since May 2023, with no signs of improvement.
The stock's 52-week range of ₹52.00 to ₹109.65 shows extreme volatility, with the current price of ₹57.10 hovering just 9.81% above the 52-week low. The 47.93% decline from the 52-week high reflects sustained selling pressure as investors abandon the stock. With no dividend yield, negative earnings, and deteriorating fundamentals, there is no rational basis for a valuation premium. Fair value estimates are meaningless in the absence of positive earnings visibility.
Shareholding Pattern: Institutional Exodus Complete
The shareholding pattern reveals a near-total absence of institutional confidence. As of December 2025, promoter holding stands at 54.45%, unchanged for three consecutive quarters after a marginal increase in March 2025. Critically, FII holding dropped to 0.00% in Q3 FY26 from 0.04% in prior quarters, while mutual fund holding similarly fell to 0.00% from 0.03%. Insurance companies and other domestic institutional investors (DIIs) have zero exposure to the stock, reflecting unanimous institutional rejection.
| Quarter | Promoter (%) | FII (%) | MF (%) | Insurance (%) | Non-Inst (%) |
|---|---|---|---|---|---|
| Dec'25 | 54.45 | 0.00 | 0.00 | 0.00 | 45.55 |
| Sep'25 | 54.45 | 0.04 | 0.03 | 0.00 | 45.48 |
| Jun'25 | 54.45 | 0.04 | 0.03 | 0.00 | 45.48 |
| Mar'25 | 54.45 | 0.04 | 0.03 | 0.00 | 45.48 |
| Dec'24 | 53.50 | 0.04 | 0.03 | 0.00 | 46.43 |
The complete exit by FIIs and mutual funds in Q3 FY26 is a damning indictment of the company's prospects. Institutional investors, with their rigorous due diligence processes, have clearly concluded that Aimco Pesticides offers no credible path to profitability or value creation. The 45.55% non-institutional holding comprises largely retail investors trapped in a declining stock, with limited liquidity to exit. Promoter holding of 54.45% remains stable, but the absence of any open market purchases by promoters signals a lack of conviction in the company's turnaround potential.
Stock Performance: Relentless Underperformance Across All Timeframes
Aimco Pesticides' stock performance has been catastrophic across all timeframes, with negative alpha versus the Sensex in virtually every period. Over the past year, the stock has plummeted 42.26% while the Sensex gained 9.85%, resulting in a negative alpha of 52.11 percentage points. The two-year return of -49.87% compares to the Sensex's +17.73%, widening the alpha gap to 67.60 percentage points. Three-year underperformance stands at a staggering 97.47 percentage points, with the stock down 59.58% versus the Sensex's +37.89% gain.
| Period | Stock Return (%) | Sensex Return (%) | Alpha (%) |
|---|---|---|---|
| 1 Day | -3.24 | -0.66 | -2.58 |
| 1 Week | +2.77 | +0.43 | +2.34 |
| 1 Month | +6.73 | -0.24 | +6.97 |
| 3 Months | -17.43 | -0.94 | -16.49 |
| 6 Months | -31.07 | +4.29 | -35.36 |
| YTD | +4.29 | -1.81 | +6.10 |
| 1 Year | -42.26 | +9.85 | -52.11 |
| 2 Years | -49.87 | +17.73 | -67.60 |
| 3 Years | -59.58 | +37.89 | -97.47 |
The stock's volatility of 49.45% is more than four times the Sensex's 11.44%, reflecting extreme price swings driven by low liquidity and retail-dominated trading. The negative Sharpe ratio indicates that investors have been penalised for taking on this high volatility, with no commensurate return. The stock's beta of 1.50 suggests it amplifies market movements, but in this case, it has magnified downside risk without capturing upside potential. The risk-adjusted return of -0.85 over one year confirms that Aimco Pesticides falls squarely into the "high risk, low return" category—the worst possible investment quadrant.
Investment Thesis: A Confluence of Negative Factors
Aimco Pesticides' investment thesis is overwhelmingly negative across all four key dimensions of the Mojo 4 Dots framework. Near-term drivers are decisively negative, with quarterly financial trends classified as "Negative" and technical indicators showing "Mildly Bearish" momentum. The company's quality assessment is "Below Average," reflecting weak long-term financial performance, negative ROE/ROCE, and minimal institutional interest. Valuation is graded as "RISKY," with the stock trading at distress multiples despite persistent losses. The overall Mojo Score of 9 out of 100 places the stock firmly in "STRONG SELL" territory.
Key Strengths & Risk Factors
KEY STRENGTHS
- Established Manufacturing Base: Operating facility in Lote Parshuram, Ratnagiri, with capabilities in chlorpyrifos, triclopyr, and bifenthrin formulations.
- No Promoter Pledging: Zero promoter share pledging indicates no immediate distress at the promoter level.
- Minimal Long-Term Debt: Long-term debt of just ₹0.19 crores reduces financial leverage risk, though this offers limited comfort given operational losses.
- Debtors Turnover: Debtors turnover ratio of 9.48 times (half-yearly) suggests relatively efficient receivables collection.
- Legacy Market Presence: Established since 1987 with historical presence in domestic and international agrochemical markets.
KEY CONCERNS
- Persistent Operating Losses: Seven consecutive quarters of negative operating profitability with no turnaround visibility.
- Severe Capital Destruction: ROE of -41.53% and ROCE of -27.24% indicate catastrophic shareholder value erosion.
- Revenue Contraction: Net sales declining both sequentially and year-on-year, with no growth catalysts evident.
- Complete Institutional Exit: Zero FII, mutual fund, insurance, and DII holdings signal unanimous institutional rejection.
- Weak Liquidity: Current liabilities of ₹142.64 crores exceed current assets of ₹136.71 crores, creating working capital stress.
- Eroding Equity Base: Shareholder funds declined from ₹35.02 crores to ₹29.88 crores due to accumulated losses.
- Sector Underperformance: Lagging the Pesticides & Agrochemicals sector by 50.89 percentage points over one year.
Outlook: What to Watch
POSITIVE CATALYSTS (Unlikely)
- Operational restructuring or cost reduction programme to stem losses
- New product launches or market expansion initiatives
- Strategic partnership or equity infusion to strengthen balance sheet
- Improvement in agrochemical sector demand dynamics
RED FLAGS (High Probability)
- Further sequential deterioration in operating margins and net losses
- Continued revenue contraction below ₹40 crores per quarter
- Working capital crisis leading to supplier payment defaults
- Equity erosion below ₹25 crores, triggering solvency concerns
- Stock price breach below ₹52.00 (52-week low), accelerating selling
The Verdict: Exit Immediately
Score: 9/100
For Fresh Investors: Avoid entirely. The company exhibits no credible path to profitability, with persistent operating losses, negative ROE/ROCE, and complete institutional rejection. The stock is a value trap trading at distress multiples for good reason. There are no rational grounds for initiating a position.
For Existing Holders: Exit at the earliest opportunity, even at current depressed levels. The deteriorating financial trajectory, eroding equity base, and mounting operational stress suggest further downside risk. The absence of any turnaround catalysts and institutional support makes holding untenable. Cut losses and redeploy capital to quality businesses.
Fair Value Estimate: Not applicable. With negative earnings, deteriorating fundamentals, and no visibility on profitability, traditional valuation methods are meaningless. The stock is trading at liquidation multiples, and even that may prove optimistic if losses persist.
Note— ROCE = (EBIT - Other income)/(Capital Employed - Cash - Current Investments)
⚠️ Investment Disclaimer
This article is for educational and informational purposes only and should not be construed as financial advice. Investors should conduct their own due diligence, consider their risk tolerance and investment objectives, and consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. The views expressed are those of the author and do not constitute a recommendation to buy, sell, or hold any security.
