Quanto Agroworld SME IPO

Strengths · 8

• 01The margin is high for an agricultural business, with a PAT margin of 20.78% and an EBITDA margin of 29.54%.
• 02Profit has grown every year, from Rs 5.37 crore in FY2024 to Rs 6.63 crore in FY2025 and Rs 8.38 crore in FY2026.
• 03Sales jumped in FY2026, from Rs 16.49 crore to Rs 40.35 crore.
• 04Debt is very low. Total borrowing was Rs 5.48 crore against a net worth of Rs 33.98 crore, a debt to equity ratio of only 0.16.
• 05Return ratios are good, with RoCE of 25.62% and RoNW of 24.68%, and the issue is priced at about 13.99 times earnings on an EPS of Rs 4.79.
• 06Doing steam distillation on site means the crop is processed fresh, which protects oil yield and quality.
• 07Its products sell into several different industries, from herbal tea and nutraceuticals to fragrance, aromatherapy and pharmaceuticals.
• 08The land base is being expanded, with 312.57 acres under development on top of the 424 acres already in production, and Rs 15.23 crore of the issue goes into farm expansion.

Risks · 8

• 01Sales jumped 145% in FY2026 while profit rose only 26%. That gap means the additional sales came at a much lower margin and needs to be understood from the RHP.
• 02This is farming, so it is exposed to weather. Poor rain, pests or disease in a season directly reduce yield, and there is little the company can do about it.
• 03The business rests on one crop. Almost everything depends on lemongrass, so a fall in lemongrass oil prices or a crop problem hits the whole company.
• 04The cultivation land is held under an arrangement with the Maharashtra State Farming Corporation rather than owned outright, so continuity depends on that arrangement being maintained.
• 05Essential oil prices behave like commodity prices and can swing widely between seasons.
• 06Promoter holding is already low at 61.49% before the issue and falls to 45.21% after it, leaving the promoters below a half share.
• 07This is a fixed price issue at Rs 67 per share, so there is no price discovery through bidding.
• 08This is an SME issue. One lot is 2,000 shares, which is Rs 1.34 lakh at the issue price, and SME shares usually trade in low volume after listing.

Quanto Agroworld Ltd was set up in March 2018 to take up farming activity. It grows, processes and supplies medicinal and aromatic plants, with lemongrass as its main crop and main commercial focus.

It describes itself as a specialty botanical ingredient maker. From lemongrass it produces three things. Lemongrass biomass and lemongrass tea-cut go to herbal tea makers, nutraceutical companies and functional beverage brands. Lemongrass essential oil goes into personal care, home care, fragrance, aromatherapy and pharmaceutical uses. It sells business to business, supplying institutional and industrial customers across India.

The company is vertically integrated, meaning it does the whole job itself, from preparing the land and planting, through crop management and harvesting, to steam distillation carried out on site, packaging and dispatch. Doing the distillation at the farm matters because lemongrass has to be processed soon after cutting. Its cultivation base is about 424 acres of developed agricultural land held under the Maharashtra State Farming Corporation Limited, with a further 312.57 acres under development, and it has additional access through its subsidiary Quanto Agritech Private Limited.

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