According to a recent analysis by Nuvama, agribusiness firms operating in the Indian market are anticipated to have a somewhat muted financial performance during the third quarter of FY26, mostly owing to seasonal considerations. Despite the existence of various favorable agricultural factors, the study, which was issued from New Delhi, indicates a brief downturn in demand and volumes.
According to the report, organizations that have a large amount of exposure to the domestic agriculture industry are probably going to have subdued quarterly results in Q3FY26. This occurs despite the fact that important indicators like healthy reservoir levels, sufficient soil
moisture, and favorable Rabi planting trends are still showing good trends. The expected downturn in performance, according to Nuvama, is mostly due to a seasonal letdown that usually affects demand around this time.
Seasonal effects on quantities and demand
The research states that seasonal variables that impact consumption patterns and sales volumes across agri-input categories are the primary reason why the third quarter is predicted to remain sluggish. Nuvama highlighted the short-term nature of the downturn by stating that “companies exposed to the domestic agriculture market are likely to report a muted quarter due to seasonal let-down.”
Agrochemicals are anticipated to be among the most affected segments throughout the quarter. According to the analysis, the extra rainfall that occurred in August and September of 2025 is anticipated to cause agrochemical businesses to record a reduction in volumes.
Regular crop protection efforts, especially spraying cycles, were disturbed by these unseasonal rains, which resulted in missed treatments.
Effects of excessive precipitation and stockpiling
The late monsoon period’s strong rainfall decreased the need for agrochemicals and increased product returns. Channel stocks rose as a result, both at the distributor and store levels. Nuvama emphasized that high channel stock levels are anticipated to significantly impede volume growth in Q3FY26.
Although the overall outlook for farming activity is still supported by agricultural fundamentals like high reservoir levels and favorable moisture conditions, the report pointed out that these favorable factors are unlikely to result in immediate revenue growth for agrochemical companies during the reviewed quarter.
Rabi sowing is still robust, but the effects are delayed
The study said that Rabi sowing has been going well and has demonstrated widespread growth across main crops despite the short-term difficulties. During the current Rabi season, all important crops have seen increased acreage, demonstrating significant farmer confidence and engagement.
With an increase in acreage of about 3.2%, oilseeds in particular have become a notable category. Nuvama did, however, issue a warning, stating that rather than being realized right away in Q3FY26, the advantages of increased acreage and favorable sowing conditions are likely to be realized only in later quarters.
Pressure in the short term, stability in the medium term
The study went on to say that businesses are now concentrating on adjusting channel inventory levels, which is anticipated to restrict new shipments in the near future. Revenues for the quarter will probably be under more strain as a result of this inventory rationalization operation.
Nuvama concluded by saying that Q3FY26 is anticipated to be a difficult quarter for agri input firms, even if the medium-term prognosis for the Indian agricultural industry is still supported by favorable sowing patterns, healthy moisture conditions, and strengthening fundamentals. Performance is expected to be muted in the upcoming quarters due to seasonal demand weakness, surplus channel inventory, and the residual effects of unseasonal rains.
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