Advance Agrolife IPO

It operates an integrated production setup across three manufacturing facilities in Jaipur, Rajasthan, possessing a substantial annual installed capacity of 89,900 MTPA. This infrastructure allows production of both Technical and Formulation Grade products, granting high operational flexibility and opening new revenue streams.

The company has demonstrated consistent growth, achieving a revenue CAGR of 12.4% over the last two years, with FY25 revenue reaching ₹502.26 crore. Its profit after tax nearly doubled from ₹14.87 crore in FY23 to ₹25.64 crore in FY25.

It shows strong efficiency in converting capital into profits, indicated by a high Return on Net Worth (RoNW) of 29.11% and a Return on Capital Employed (ROCE) of 27.02% in FY25. These metrics demonstrate the company's efficient utilization of shareholder funds and total capital employed.

It maintains a strong and growing regulatory base, holding 410 generic registrations as of March 31, 2025, which includes 380 Formulation Grade and 30 Technical Grade products. This portfolio allows it to legally distribute products across 13 Indian states, enhancing market reach and stability.

The company benefits from long-standing B2B relationships with corporate customers, several of whom have been clients for periods ranging from 5 to over 9 years. This focus on quality and specific customer requirements ensures continuous revenue visibility and strengthens market presence through repeat orders.

Its Days Working Capital stood at 74 days in FY25, suggesting a faster conversion cycle compared to several large rivals. This is notably shorter than Insecticides India Limited (122 days) and PI Industries Limited (117 days).

The company faces a major risk from customer concentration, as its top 5 customers contributed ₹259.51 crore, representing 51.70% of total revenue in FY25. The loss of, or reduced revenue from, any of these key customers could materially and adversely affect its results.

The business is highly working capital intensive; net working capital rose to ₹100.34 crore in FY25. Projected working capital requirements are estimated to increase substantially to ₹306.76 crore by FY27, and failure to meet this large demand could hurt operations.

All manufacturing facilities are situated in Jaipur, Rajasthan, and a majority of its revenue (84% in FY25) is derived from key northern and central agricultural states. This geographic concentration exposes it to risks from adverse local factors, such as regional weather volatility or local regulatory changes.

Total borrowings have increased significantly, rising from ₹25.29 crore in FY23 to ₹80.45 crore in FY25. Consequently, the Debt-Equity Ratio has increased from 0.50 times to 0.80 times, indicating greater reliance on debt and higher interest obligations.

A significant amount of its trade receivables is concentrated in a single Group Company, HOK Agrichem Private Limited. The outstanding trade receivable balance owed by this entity reached ₹76.65 crore in FY25, up from ₹39.26 crore in FY24.