Dhanuka Agri Q1 concall, latest management interview highlights -
Revenues- 369 vs 392 cr
Gross Margins @ 32.8 vs 32.7 pc
EBITDA- 44 vs 51 cr, margins @ 11.8 vs 13.1 pc
PAT- 33 vs 49 cr
Q2 is their biggest Qtr
Q1 was affected by delayed monsoon till Mid June
Demand scenario and product off take in July was good
Aug again was subdued due deficient rains but first 10 days of Sep have been buoyant (source: latest management interview on 13 Sep)
New products launched -
Implode - Maize herbicide
Mesotrax - Maize, Sugarcane herbicide
Defend - Rice Insecticide
To start commercial production from Dahej plant (company is making Technicals or AIs here) in Q2
Initially going to produce - Lamba Cyhalothrin and Bifenthin (both - pyrethroid class insecticides)
Revenue Mix in Q1-
Insecticides-27 pc
Fungicides-10 pc
Herbicides-54 pc
Others-9 pc
Herbicides have structural tailwinds as the cost of manual labour is increasing
Company guiding for 150-200 bps improvement in EBITDA margins for entire FY 24 with double digit topline growth
Besides the new Dahej Plant (for Technicals), company largely makes formulations only
Have a distribution network of 41 warehouses, 6500 distributors, 80000 retailers
Sells to aprox 1 cr farmers
Has international collaboration with 10 global MNCs to source products, technology
Has set up a new R&D centre in Haryana for faster development of products
Did a buyback of 85 cr LY and distributed Rs 2/share as dividend
Has introduced 06 new biologic formulation in India in Q1
Intend to export technicals from Dahej plant after meeting the captive demand
Indian agrochemical can potentially be a great growth story going forward (India has already overtaken US, Europe in Exports. Is only behind China now)
Inventory at Q1 end - 395 cr. Working capital days - 152
Channel inventory eased out in July after a build up in June
Rising agri commodity prices in Q2 is another positive for the Industry
Expect 50 cr revenues from the new Dahej facility in FY 24. The double digit topline growth guidance does not include this
Q1’s volume de-growth was 3.5 pc
The product off take in July was robust
Expect Dahej plant’s revenues to go upto 100 cr by end of FY 25
Prices of Chinese technicals seeing a gradual rise in Q2 ( company procures from both China and India )
Disc : have a tracking position
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