Business Recorder
Data Agro Limited (PSX: DAAG) was incorporated in Pakistan as a private limited company in 1992 and was converted into a public limited company in 1994. The company is engaged in the production and processing of agro seeds. Another activity of the company is the delinting of cotton crops. Pattern of Shareholding As of June 30, 2025, DAAG has a total of 4 million shares outstanding which are held by 2,536 shareholders. Local general public has the majority stake of 47.93 percent in the company followed by directors, CEO, their spouse and minor children having a stake of 41.41 percent in the company. Data Enterprises (Private) Limited, an associated company of DAAG, accounts for 9.87 percent of its shares. The remaining shares are held by other categories of shareholders. Historical Performance (2019-25) Except for a marginal downtick in 2020 and 2025, DAAG’s topline boasted reasonable growth over the period under consideration. The bottomline posted a plunge in 2022, 2024 and 2025 with net loss reported in 2025. The margins depict an oscillating pattern over the years. In 2019, gross and operating margins posted downtick while net margin picked up. This was followed by a considerable rebound in all the margins in 2020. In 2021, gross margin fell while net and operating margins inched up. The subsequent two years marked significant augmentation in DAAG’s margins except for a downtick in net margin in 2022. In 2024, gross and operating margins strengthened while net margin slid. All the margins registered their lowest levels in 2025. The detailed performance review of the period under consideration is given below. In 2019, DAAG’s topline grew by 13.67 percent year-on-year to clock in at Rs.148.44 million. During the year, the company processed the seeds of cotton and wheat and produced hybrid corn. The revenue proceeds from seeds as well as delinting services posted a rise in 2019. Within seeds sales, the major revenue was driven from hybrid corn seeds, followed by wheat seeds. Fuzzy and cotton seeds and sale of paddy occupied third and fourth spot in terms of revenue contribution. Third party cultivation controlled DAAG’s cost which inched up by 13.97 percent year-on-year and culminated into 12.53 percent year-on-year growth in gross profit in 2019. GP margin clocked in at 20.70 percent in 2019 versus GP margin of 21 percent recorded in 2018. Higher payroll expense due to inflation as well as fresh inductions and higher utility expenses pushed the administrative expense up by 26 percent year-on-year in 2019. Distribution expense inched down by 2.45 percent year-on-year in 2019 as the company didn’t record any doubtful debts, write-offs and commission on sale in 2019 unlike the previous year. Operating profit posted 5.97 percent year-on-year decline in 2019 with OP margin sliding down to 4.93 percent from OP margin of 5.96 percent registered in 2018. Finance cost grew by 12.20 percent year-on-year in 2019, however, it mainly comprised of WWF, WPPF and stock exchange fee as the company had no bank loans on its books until 2019. While profit before taxation was down by 8.36 percent year-on-year in 2019, deferred taxation resulted in 27.59 percent rise in the bottomline which clocked in at Rs.3.97 million in 2019 with NP margin of 2.67 percent versus NP margin 2.38 percent posted in 2018. EPS grew to Rs.0.99 in 2019 versus EPS of Rs.0.78 posted in the previous year. In 2020, DAAG’s sales plunged by 1 percent year-on-year to clock in at Rs.146.88 million. The outburst of COVID-19 at the end of 2020 put economic activities at a halt and exerted pressure on the demand of hybrid seeds. During 2020, the sales proceeds from fuzzy and cotton seeds, Okra and micronutrients posted a massive decline. Sale of paddy, Lint and Vanda also slightly tumbled. Conversely, the revenue from delinting increased during the year. Cost of sales dropped by 3.43 percent year-on-year in 2020, resulting in 8 percent year-on-year rise in gross profit. GP margin also climbed up to 22.6 percent in 2020. Administrative expenses grew by 8.97 percent year-on-year in 2020 due to higher salaries and wages as well as provision for loss allowance booked during the year. Conversely, distribution expense dropped by 9 percent year-on-year due to lesser advertisement and sales promotion expense incurred in 2020. Operating profit multiplied by 30.92 percent year-on-year in 2020 with OP margin improving to 6.5 percent. Finance cost grew by 11.62 percent year-on-year in 2020 due to higher provisioning done for WWF and WPPF. Net profit grew by 47 percent year-on-year in 2020 to clock in at Rs.5.84 million with NP margin of 3.97 percent. EPS inched up to Rs.1.46 in 2020. In 2021, DAAG posted 30.47 percent year-on-year growth in its topline which clocked in at Rs.191.63 million. This came on the back of improved demand as well as prices. International seeds market also showed recovery in 2021. The company’s annual production increased by 84 percent year-on-year in 2021 to clock in at 1,569 M Tons seeds. Third party processed seeds; however, posted 31 percent drop to clock in at 1,910 M tons. Cost of sales grew by 34.19 percent year-on-year mainly on account of higher prices of seeds, chemicals as well as fuel and power. Research and development expenses also grew during 2021 as the company continuously strived to introduce new varieties of seeds to boost agricultural output within the country. Gross profit increased by 17.70 percent year-on-year in 2021, however, GP margin slumped to 20.40 percent. Administrative expenses grew by only 3.73 percent year-on-year as the company considerably reduced provision for loss allowance in 2021 which offset higher payroll expense incurred during the year. Distribution expense grew by 11.14 percent year-on-year in 2021 due to higher payroll expense, repair and maintenance charges as well as freight and octroi charges incurred during the year. Operating profit grew by 40 percent year-on-year in 2021 and OP margin also jumped up to 7 percent. Finance cost inched up by a mere 1.26 percent in 2021 primarily on account of higher provisioning done for WWF and WPPF. All these factors culminated into 37.78 percent year-on-year rise in net profit which clocked in at Rs.8.04 million in 2021 with NP margin of 4.2 percent. EPS clocked in at Rs.2.01 in 2021. In 2022, DAAG registered 5.74 percent year-on-year improvement in its topline which clocked in at Rs.202.62 million. While sale of services i.e. seed processing as well as cleaning and drying posted considerable growth of 42 percent during the year, sale of seeds grew by less than 1 percent in 2022. As of 2022, sale of services had 16 percent contribution in the overall sales mix of DAAG. During 2022, DAAG produced 3,679 M tons of seeds, up 5.7 percent year-on-year. Cost of sales grew by 1.43 percent year-on-year in 2022. Gross profit strengthened by 22.56 percent year-on-year translating into GP margin of 23.6 percent in 2022. Administrative expense grew by 6.87 percent year-on-year in 2022 due to higher payroll expense as well as write-off of bad debts during the year. Distribution expense posted 20.65 percent year-on-year rise in 2022 due to higher vehicle running expense as fuel charges profoundly increased during the year. Operating profit grew by 49.2 percent year-on-year in 2022 and OP margin surged to 9.89 percent. Finance cost escalated by 25.79 percent year-on-year in 2022 due to higher provisioning for WPPF. Profit before taxation grew by 51.39 percent year-on-year in 2022; however, the payment of deferred taxation resulted in 66.7 percent shrinkage in net profit which stood at Rs.2.68 million in 2022 with NP margin of 1.32 percent – the lowest among all the years under consideration. EPS also dwindled to Rs.0.67 in 2022. Monsoon rains ruined the agricultural infrastructure in the southern region of the country and significantly affected the purchasing power of farmers. However, demand recovery towards the end of the financial year enabled DAAG to post 7.67 percent year-on-year rise in its net sales in 2023. DAAG’s net sales were recorded at Rs. 218.17 million in 2023. Sale of hybrid corn seeds continued to be the star product of the company contributing over 47 percent to the overall sales mix in 2023. Third party cultivation enabled the company to reduce its cost which grew by 5.34 percent in 2023. As a consequence, gross profit built up by 15.22 percent in 2023 with GP margin attaining a new high level of 25.28 percent. Administrative expense multiplied by 13.50 percent year-on-year in 2023 mainly on account of higher payroll expense due to inflationary pressure. Distribution expense inched up by only 2.77 percent in 2023 due to lower payroll expense as well as curtailed vehicle running and advertisement expense incurred during the year. DAAG’s operating profit rose by 11.19 percent year-on-year in 2023 with OP margin climbing up to 10.21 percent. Finance cost surged by 316.77 percent in 2023 as the company acquired running finances to meet its working capital requirements during the year. Until last year, the company had no external borrowings on its books. While the company posted 12.61 percent year-on-year decline in profit before tax in 2023, deferred taxation resulted in tax credit of Rs.0.58 million in 2023. As a consequence, net profit registered 582 percent year-on-year growth to clock in at Rs.16.82 million in 2023 with EPS of Rs.4.21 and NP margin of 7.71 percent. Better farm economics and improved agricultural output enhanced the purchasing power of farmers during the year. This resulted in 67 percent year-on-year improvement in the net sales of DAAG which clocked in at Rs.362.31 million. Robust net sales were the result of improved off-take of wheat seed, paddy seeds and sesame seeds. Seed processing/delinting was recorded at 3774 tons in 2024, up 14.19 percent year-on-year. Cost of sales grew by 65.11 percent in 2024 due to higher prices of raw materials. However, better sales mix and improved prices resulted in 68.91 percent escalation in gross profit with GP margin recorded at 25.72 percent – the highest during the period under consideration. Administrative expense surged by 16.30 percent during 2024 on account of higher payroll expense which was in line with inflation. Distribution expense also escalated by 53.73 percent in 2024 due to higher salaries of sales force, elevated freight charges as well as hefty vehicle running expense incurred during the year. 650.73 percent improvement in other income in 2024 is the result of gain recognized on the disposal of fixed assets during the year. DAAG posted 142.28 percent higher operating profit in 2024 with OP margin clocking in at 14.89 percent. Finance cost mounted by 686.75 percent in 2024 due to increased short-term loans obtained during the period coupled with higher discount rate. High finance cost marred the bottomline which dwindled by 55.49 percent to clock in at Rs.7.487 million in 2024. This translated into EPS of Rs.1.87 and NP margin of 2 percent. In 2025, DAAG’s net sales dipped by 2.51 percent to clock in at Rs.353.21 million. Massive reduction in the prices of wheat crop from Rs.3900 per maund to Rs.2400 per maund took its toll on the purchasing power of farmers and the overall liquidity of the sector. Due to delayed rainfall, the yield of hybrid rice also drastically shrank. This caused sheer uncertainty in the agriculture sector, leaving farmers with no liquidity to purchase corn seeds. The primary cause of thin revenues in 2025 was a massive plunge in services revenue which included seed processing, cleaning and drying. Cost of sales continued to mount to the tune of 10.68 percent in 2025 due to elevated raw material prices. This resulted in 40.62 percent decline in gross profit in 2025 with GP margin drastically falling down to 15.66 percent. Administrative expense surged by 13.50 percent while distribution expense ticked up by 4.65 percent in 2025 due to higher salaries and vehicle running expense. Other expense tamed by 29.26 percent in 2025 on account of no provisioning done for WWF and WPPF. Other expense was completely offset by 22 percent stronger other income recorded in 2025 on the back of greater gain recognized on the disposal of fixed assets. Higher operating expense pushed down operating profit by 76.80 percent in 2025 with OP margin receding to 3.54 percent. Finance cost dipped by 12.68 percent in 2025 due to monetary easing. This was despite higher outstanding borrowings at the end of the year. DAAG posted net loss of Rs.24.695 million in 2025 with loss per share of Rs.6.17. Recent Performance (9MFY26) During the nine-month period of the ongoing fiscal year, DAAG registered 8.19 percent year-on-year uptick in its net sales which clocked in at Rs.283.091 million. This was due to uptick in sales volume and prices as well as launch of new hybrid seed varieties. Cost of sales ticked up by 2.95 percent in 9MFY26. The optimization of sales mix resulted in 84.27 percent stronger gross profit in 9MFY26 with GP margin clocking in at 11 percent versus GP margin of 6.45 percent recorded in 9MFY25. Administrative expense plunged by 19.45 percent in 9MFY26 likely due to lower payroll expense on the back of workforce rationalization. Distribution expense surged by 8.90 percent in 9MFY26 seemingly due to higher freight charges and elevated salaries of sales force. DAAG registered operating profit of Rs.1.325 million in 9MFY26 versus operating loss of Rs.14.55 million recorded in 9MFY25. OP margin was recorded at 0.47 percent in 9MFY26. Finance cost shrank by 16.80 percent in 9MFY26 due to monetary easing. This was despite higher short-term loan obtained during the period. DAAG recorded net loss of Rs.24.428 million in 9MFY256, down 50.29 percent year-on-year. This translated into loss per share of Rs.6.11 in 9MFY26 versus loss per share of Rs.12.29 recorded in 9MFY25. Future Outlook DAAG has invested in new seed varieties of cotton, corn and wheat besides tapping the vegetables seeds market. This will improve the core income of the company. Furthermore, delinting and processing of seeds for third parties will add to other income of the company. Third party seed cultivation will continue to keep the cost in check. All these factors signal robust financial performance in future.
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