Sumitomo Chemical India Ltd Reports Sharp Decline in Quarterly Performance Amid Negative Financial Trend

Quarterly Financial Performance Deteriorates

The latest quarter ending December 2025 has seen Sumitomo Chemical India Ltd’s financial performance worsen considerably. The company’s net sales dropped to ₹567.98 crores, the lowest quarterly figure recorded in recent periods. This decline in top-line revenue is accompanied by a contraction in profitability metrics. Profit After Tax (PAT) for the quarter stood at ₹87.65 crores, reflecting a steep fall of 35.4% compared to the average of the previous four quarters.

Operating profitability also suffered, with PBDIT (Profit Before Depreciation, Interest and Tax) falling to ₹99.49 crores, the lowest in recent history. Similarly, Profit Before Tax excluding Other Income (PBT less OI) declined to ₹80.72 crores. Earnings Per Share (EPS) mirrored this downtrend, registering at ₹1.52, the lowest quarterly EPS in the company’s recent financial record.

Cash and cash equivalents at the half-year mark have also hit a nadir, standing at ₹42.48 crores, raising concerns about liquidity and operational flexibility going forward.

Shift in Financial Trend and Mojo Score Downgrade

Reflecting these deteriorations, the company’s financial trend parameter has shifted from flat to negative, with the score plunging from 1 to -13 over the last three months. This sharp decline in financial health has been accompanied by a downgrade in the company’s Mojo Grade from Sell to Strong Sell as of 13 October 2025, with the current Mojo Score at a low 28.0. The Market Capitalisation Grade remains modest at 3, underscoring the company’s limited market valuation relative to peers.

These ratings and scores highlight the growing investor caution surrounding Sumitomo Chemical India Ltd, especially given the absence of any key positive triggers in the recent quarter.

Stock Price and Market Performance Context

Sumitomo Chemical India Ltd’s share price has reflected the underlying financial weakness. The stock closed at ₹406.80 on 28 January 2026, down 2.74% from the previous close of ₹418.25. The intraday trading range was between ₹396.40 and ₹425.00, with the 52-week high at ₹665.00 and the low at ₹396.40, indicating significant volatility and a downward bias over the past year.

When compared with the broader market benchmark, the Sensex, the stock’s returns have underperformed markedly across multiple time horizons. Over the past week, the stock declined by 3.67% versus a modest 0.39% drop in the Sensex. The one-month return was a sharp -11.98%, compared to the Sensex’s -3.74%. Year-to-date, the stock has fallen 13.55%, while the Sensex has declined by only 3.95%. Over the last year, the stock’s return was negative 18.85%, contrasting with the Sensex’s positive 8.61% gain.

Longer-term performance also reveals underperformance, with the three-year return at -11.83% against the Sensex’s 37.97% and a five-year return of 32.19% compared to the Sensex’s 72.66%. This persistent lag highlights structural challenges facing the company within the pesticides and agrochemicals sector.

Industry and Sector Challenges

The pesticides and agrochemicals sector has faced headwinds from fluctuating commodity prices, regulatory pressures, and changing agricultural demand patterns. Sumitomo Chemical India Ltd’s recent results suggest it has not been able to capitalise on any sectoral tailwinds or mitigate these challenges effectively. The absence of any key positive triggers in the quarter further emphasises the company’s struggle to reverse the negative financial trend.

Margin contraction is particularly concerning, as the company’s PBDIT and PAT margins have shrunk in the latest quarter, signalling rising costs or pricing pressures that have not been offset by revenue growth. This margin squeeze undermines profitability and raises questions about operational efficiency and competitive positioning.

Outlook and Investor Considerations

Given the current financial trajectory and the downgrade to a Strong Sell rating, investors should exercise caution with Sumitomo Chemical India Ltd. The company’s deteriorating profitability, shrinking cash reserves, and lack of positive catalysts suggest that near-term recovery may be challenging without strategic interventions or market improvements.

Investors may wish to monitor upcoming quarterly results closely for any signs of stabilisation or turnaround. Additionally, comparative analysis with sector peers could reveal more resilient or better-positioned companies within the pesticides and agrochemicals space.

While the company’s five-year return remains positive at 32.19%, this pales in comparison to the Sensex’s 72.66% gain, underscoring the need for a critical reassessment of Sumitomo Chemical India Ltd’s growth prospects and risk profile.

Historical Performance Versus Recent Trends

Historically, Sumitomo Chemical India Ltd maintained relatively stable revenue and profitability levels, with a flat financial trend score prior to the recent quarter. The sudden shift to a negative trend score of -13 within three months is a stark indicator of accelerating challenges. This rapid deterioration contrasts with the company’s previous steadiness and highlights the urgency for corrective measures.

The contraction in key financial metrics such as PAT, PBDIT, and EPS to their lowest levels in recent quarters signals that the company is currently operating under significant strain. This is compounded by the lowest cash and cash equivalents recorded at ₹42.48 crores, which may limit the company’s ability to invest in growth initiatives or buffer against market volatility.

Overall, the data paints a picture of a company in distress, with financial indicators pointing towards a need for strategic realignment and operational improvements to regain investor confidence and market competitiveness.

Conclusion

Sumitomo Chemical India Ltd’s December 2025 quarter results reveal a pronounced downturn in financial health, with significant declines in revenue, profitability, and liquidity. The shift from a flat to a negative financial trend, coupled with a downgrade to a Strong Sell rating, reflects growing investor concerns and the absence of positive catalysts. Underperformance relative to the Sensex and sector peers further emphasises the challenges ahead.

Investors should approach the stock with caution and consider alternative opportunities within the pesticides and agrochemicals sector that demonstrate stronger financial metrics and growth potential. Monitoring future quarterly updates will be critical to assess whether the company can stabilise and reverse its current negative trajectory.

Upgrade at special rates, valid only for the next few days. Claim Your Special Rate →