Dhanuka Agritech Q2 concall highlights -
Sales - 618 vs 543 cr
Gross Margins @ 40.3 vs 34.1 pc - Huge Jump !!!
EBITDA - 142 vs 98 cr, Margins @ 22.9 vs 18 pc !!!
PAT - 102 vs 73 cr
Guidance for FY 24 - double digit revenue growth over 1700 cr ( last Yr’s revenues ), EBITDA margins for full FY at around 17 pc
Company seeing excellent demand for its new product - DECIDE (insecticide) introduced LY. Fuelled by a few more insecticide introductions, growth in Q2 was robust
Launched 02 new innovative products in Q2 -
TIZOM - Herbicide for sugarcane crop - in collaboration with Nissan Chemicals Japan
SEMACIA - broad spectrum insecticide having excellent efficacy over a range of crops
Product wise sales break up for Q2 -
Insecticides - 44 pc
Fungicides - 18 pc
Herbicides - 25 pc
Others - 13 pc
Geography wise sales break up for Q2 -
North - 24 pc
South - 31 pc
East - 11 pc
West - 34 pc
Company’s unique strengths -
Asset light model with minimal investments in Fixed assets
40 warehouses, 7000 distributors, 80000 retailers covering over 1 cr + farmers
90+ products across agrochemicals and plant growth regulators
Tech Tie-ups with leading global companies from US, Japan, EU
Robust pipeline - focus on launching margin accretive 9(3) products. To launch 8 new products in next 2 yrs
Volume growth in H1, Q2 @ 10 and 20 pc respectively
Gross margin expansion in Q2 happened because of 2 factors - better product mix, phasing out of high cost inventory
Insecticide - DECIDE did very well in Q2. It’s a versatile insecticide. It’s a 9(3) registration product used across a variety of vegetable crops ( like chillies, brinjal, tomatoes, okra etc ) against the sucking pests. Hence its Mkt potential is also big
Dahej Technicals plant got commissioned in Q2. Nil revenues in Q2. Should contribute from Q3 onwards
DEFEND - a paddy crop herbicide should do well in H2
Plus there is upcoming Chilli season in South India - which is again a good opportunity
SEMACIA, TIZOM also have good sales potential in H2
In talks / discussions with a number of international partners for CDMO business. Things should materialise sometime in future
For DECIDE and TIZOM - Dhanuka is the exclusive local partner of the innovator
New products / Innovative products - introduced by the company in last 3 yrs are doing exceedingly well. Plus the margins in these products are also better
Capacity at the company’s three formulations plant is not a constraint. Company can almost double its revenues from the existing capacities
Disc: hold a tracking position, biased, not SEBI registered
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