Rationale

 The ratings assigned to Basant Agro-Tech India Limited (BATIL/the company) have been placed on watch with negative implications owing to a sharp increase in sulphur prices and the sizeable dependence on imports for sulphur in the country, which is a key input for manufacturing sulphuric acid and single super phosphate (SSP). On February 28, 2026, after the breakout of the conflict in West Asia, there has been a sharp increase in the prices of finished fertilisers and raw material which could adversely impact the profitability of the fertiliser industry. While currently the availability of rock phosphate and sulphur remains adequate to meet the near-term requirements, ICRA will continue to monitor the pricing and availability of sulphur and rock phosphate for the company and its impact on its earnings. The sharp increase in sulphur prices amid the ongoing West Asia conflict has pushed up the company’s input costs to manufacture SSP and Linear Alkyl Benzene Sulphonic Acid (LABSA). At present, profitability on the sale of SSP and LABSA remain subdued amid elevated input prices. Though nutrientbased subsidy (NBS) rates are expected to be announced shortly for the upcoming kharif season, ICRA will monitor the extent of the revision in the subsidy rates under the NBS regime and its impact on the company’s earnings and credit profile. The ratings continue to be constrained by the working capital-intensive nature of the operations, given the need to maintain a high level of inventory due to the seasonal nature of the business. The ratings are also constrained by the regulatory and agroclimatic risks associated with the fertiliser sector as the profitability remains susceptible to the subsidy rates announced by the Government of India (GoI) and also to the vagaries of the monsoon as agricultural activity in the country is largely dependent on rainfall. The company’s seed segment is also exposed to the vagaries of the monsoon as the portfolio is focused on the kharif season. Its scale of operations and profitability are also vulnerable to agro-climatic conditions and the adverse fluctuations in raw material prices and foreign exchange rates. The company’s credit metrics improved from FY2024 to FY2025 but have moderated over 9M FY2026, affected by the modest profitability in the fertiliser segment. Further, with the ongoing West Asia conflict, there could be further moderation in the credit metrics in FY2027. Hence, the overall credit profile is expected to remain subdued.

The modest performance in 9M FY2026 was reflected in the decline in operating margin to 5.5% from 6.1% in FY2025 due to focus on volume driven growth (especially in the LABSA and the relatively new pipes segments where the company is working towards gaining market share) resulting in moderation in margins.