BASF India FY26 Results (NSE: BASF)
Signal: Growth decelerated
The read
Full-year FY26 results show a specialty chemical company in the midst of structural restructuring (coatings business held-for-sale, agricultural solutions demerger underway), with flat revenue growth (+1.2%) and continued margin compression (OPM 3.8%, 5th consecutive quarter of contraction). Q4 headline PAT beat (+35% YoY) is entirely driven by ₹227.5 Cr exceptional gain on property sale; underlying operating profit remains weak. The company's cash position remains strong (net cash ₹8,214 Cr), but working capital absorption is a concern. The pending coatings divestiture and agri-solutions demerger will reshape the portfolio, but near-term profitability remains under pressure from cost inflation and lack of pricing power.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹14,985.4 Cr | 1.2% | |
| EBIT | ₹561.99 Cr | -16.5% | |
| Net profit | ₹416.92 Cr | -16.8% | |
| EPS | ₹96.3 | -16.5% | |
| EBIT margin | 3.8% |
P&L walk
Full-year revenue grew modestly 1.2% to ₹1,49,854 Cr, but operating margin compressed 50bps to 3.8% as input costs remained elevated (COGS 81.4% of revenue vs 81.0% prior year) and employee costs rose 19.6% YoY. Q4 revenue of ₹34,530.4 Cr was up 8.3% YoY, but OPM stood at only 2.5% (ex-exceptionals). PAT of ₹635.8 Cr was inflated by ₹227.5 Cr exceptional gain on property sale; adjusting for this, normalized PAT of ₹408.3 Cr was up 15.4% YoY. EPS of ₹14.7 similarly boosted. Finance costs rose 26.5% YoY to ₹196.1 Cr. Depreciation declined 14.8% YoY as some assets were reclassified to held-for-sale.
Key positives
- Q4 standalone revenue of ₹34,530.4 Cr (+8.3% YoY) showed sequential improvement from earlier quarters.
- Strong cash position with net cash of ₹8,214 Cr, enabling strategic flexibility for restructuring.
- Exceptional gain of ₹227.5 Cr from sale of non-core assets improved reported PAT.
- Board recommended 250% final dividend, signaling confidence in cash generation.
- Coatings business divestiture (expected to close Q1FY27) will unlock value and reduce complexity.
Key concerns
- Full-year OPM compressed to 3.8% from 4.3% (5th straight quarter of margin contraction for the company), reflecting sustained input cost pressure and inability to pass through fully.
- Revenue growth of only 1.2% YoY in FY26 indicates volume stagnation or price erosion.
- Employee costs grew 19.6% YoY, far outpacing revenue growth, adding to OPEX pressure.
- Working capital increased significantly: receivables up ₹2,385 Cr (+9.5%) and inventories remained elevated at ₹27,089 Cr, absorbing cash.
- Full-year PAT of ₹4,169.2 Cr (-16.8% YoY) is the lowest in several quarters; underlying operating performance remains weak.
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