Indian Agrochemical Companies in Focus after ADAMA Ltd. Lowers Sales Growth

Indian agrochemical companies are in the prime focus after ADAMA Ltd, a leading crop protection company headquartered in Israel is expecting a decline in sales for the first half of the year 2019. The manufacturer of crop protection products attributed the fall in sales to delays in planting on the back of adverse weather conditions and decreased crop protection applications in many parts of the world. 

The company said its revenues in constant currency are likely to come in at $2 billion, which is in line with last year’s constant currency growth. However, the company said US dollar revenues may decline due to flooding in North American markets and extremely dry weather in Europe and Asia. 

Impact on Global Market and Indian Agrochemical Companies- 

Many of the Indian agrochemical companies have good exposure to the global markets of Agro-chemicals. It will definitely provide a good opportunity for the Indian Agrochemical companies to boost their reaches to the global market.UPL earns 18 percent of revenues from North American markets and 14 percent from Europe. The contribution from Europe might go higher due to Arysta acquisition as it has greater exposure in those markets. Latin America accounts for 36 percent of UPL's total revenues. India and the rest of the world contribute around 17 percent each. 

Sharda Cropchem gets around 47 percent of revenues from Europe and 7 percent from Latin America. 

The crisis in the global markets will definitely impact companies with high exposure. BASF had already issued profit warning due to trade war and Auto sector slowdown. It definitely impact on the market of agrochemicals.