Metrics cut 1
- FY27 revenue growth guidance cut to small single-digit growth (from earlier expectations)
Monday, August 3, 2026 · 3:30 PM IST
Event Participants
Executives (3)
Mahendra Kumar Dhanuka (Chairman), Rahul Dhanuka (Managing Director), Vinod Kumar Bansal (CFO)
Analysts (9)
Archit Joshi (Nuvama Institutional Equities), Darshita Shah (DSP Asset Managers), Disha Chamaria (Tryanitra Asset Managers), Himanshu Binani (Anand Rathi Shares), Prashant Biyani (Elara Capital), Riju Dalui (Antique Stock Broking), Rohit Nagraj (360 ONE Capital), Rushabh Shah (BugleRock Capital), Saurabh Jain (HSBC Securities), Umang Shah (Banyan Tree Advisors)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹461.93 crores | Down 12.56% YoY vs ₹528.29 crores; driven by delayed monsoon, weak demand, and price competition |
| Volume Decline | ~12.75% | Value and volume decline nearly identical, indicating no material price benefit |
| EBITDA | ₹55.01 crores | Declined on revenue degrowth; expenses held flat despite revenue fall due to season-planned costs |
| PAT | ₹36.30 crores | Lower YoY on weak operating performance; no exceptional items mentioned |
| Herbicide Share | 42% | Largest category; significantly impacted by delayed soybean/cotton sowing in Rajasthan, Gujarat, MP, Maharashtra |
| Insecticide Share | 25% | Resilient relative to herbicides |
| Fungicide Share | 14% | Grew ~11% YoY driven by Japanese fungicides (Nisodium, Conica) on strong horticulture prices |
| Others Share | 19% | Includes nutrition and other products |
| North Zone Contribution | 36% | — |
| West Zone Contribution | 37% | Largest contributing zone |
| South Zone Contribution | 18% | Weak sentiment due to rainfall deficit |
| East Zone Contribution | 9% | Lowest contributing zone |
| Innovation Turnover Index (ITI) | 11.56% | Contribution from products launched in last 3 years |
| Final Dividend | ₹2 per share (100%) | Approved at 41st AGM; record date to be declared |
| Buyback | ₹70 crores | 5 lakh shares bought back at ₹1,400 per share |
| Hosur Plant Revenue | ₹26 crores | Up from ₹16 crores YoY; EBITDA loss reduced to <₹1 crore from -₹3 crore |
| Hosur Plant FY27 Guidance | ~₹65 crores | Chairman guided full-year revenue despite Q1 strength due to seasonal demand |
| Royalty Income | ~₹4 crores | Significantly lower YoY |
| Capex Guidance (Nagpur) | ~₹100+ crores | Part of ₹200 crore total project outlay |
Geographic & Segment Commentary
Herbicides (42% of revenue): Suffered major decline (~25% YoY) as key kharif crops—soybean and cotton—saw delayed sowing and re-sowing in Rajasthan, Gujarat, Madhya Pradesh, and Maharashtra due to June rainfall deficit. Products like Purge and DSV have limited recovery opportunity as their application window (June/early July) has passed.
Fungicides (14% of revenue): Grew ~11% YoY despite being traditionally a Q2-heavy segment. Growth driven by Japanese fungicides Nisodium and Conica, which gained traction in horticulture crops (tomato, cucurbits) due to elevated vegetable prices during dry conditions.
North India (36%): Large but impacted by rainfall deficit in key agricultural regions. West India (37%): Largest zone; worst-hit by monsoon shortfall affecting cotton and soybean herbicide demand. South India (18%): Sentiment weak with rainfall deficit in June and July; Q2 outlook guarded. East India (9%): Smallest contribution; no specific commentary provided.
Company-Specific & Strategic Commentary
Nagpur Manufacturing Plant: Company acquired land in Butibori industrial zone, Nagpur (Maharashtra) for a new formulation plant. Total project outlay estimated at up to ₹200 crores with capacity of 23,000 MTPA; expected operational by April 2028 (Q4 FY28). Plant will be significantly automated with global safety and efficiency standards, requiring higher initial capex (~₹100+ crores by FY27-28). CGST benefits available from Maharashtra government. Facility designed with expansion headroom.
Product Launches: 5 new products planned in upcoming months—1 liquid fertilizer, 3 fungicides, 1 herbicide. Additionally, 2 more biological/nutrition products to be introduced in FY27. Mycore Super (launched FY25) and Verdor (biological bio-nutrition, launched September FY26) showing strong traction across geographies and crops including cereals, pulses, sugarcane, horticulture.
International Business (Bayer Acquisition): Products Iprovalicarb (with variants) and Trideminol acquired from Bayer for global markets. Distribution being established across markets—customers onboarded in some geographies while setup ongoing in others. Two new subsidiaries being incorporated (Brazil and Europe). Not a significant revenue contributor to FY27 financials; Indian market revenue already initiated last year with grape season starting Q2 (peak in September). Executive Director for International Business (Harsh) currently visiting US and Brazil meeting prospective customers.
Regulatory Compliance: Company appointed Lakshmi Kumar as consultant for GST notice matter; management confident of favorable outcome as molecules categorized under fertilizer with 5% rate per circular.
R&D and Distribution: Two R&D centers with NABL-accredited labs focused on registrations and formulations; network of 10 multinational partners from Japan, Europe, US; 6,500 distributors, 80,000+ retailers, 4 manufacturing facilities, 41 warehouses serving 10+ million farmers.
Biostimulant Regulation: Government design of regulation tracking management forecast—smaller/unorganized players likely to face constraints. State governments taking stringent view on product and player approvals, potentially benefiting organized players.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Revenue Growth | Small single-digit growth | Management revised guidance down from earlier expectations due to monsoon deficit; Q2-Q3 expected to show recovery but Q2 remains difficult |
| Hosur Plant Revenue (FY27) | ~₹65 crores | Full-year guidance provided by Chairman; Q1 strong (₹26 crores) but demand concentrated early in season |
| Hosur Plant EBITDA (FY27) | Negative ₹4-5 crores | CFO indicated breakeven difficult this year |
| Bayer Products Contribution (FY27) | Not significant | India revenue booked from last year; grape season peaks in September; global distribution ramp ongoing |
| Nagpur Plant Commissioning | Q4 FY28 (April 2028) | Estimated outlay up to ₹200 crores; spent across FY27-28 (~₹100+ crores) |
| New Product Launches | 5 immediate + 2 biological in FY27 | Three fungicides, one herbicide, one liquid fertilizer; biological products being relaunched after regulatory approvals |
| Biostimulant Category Revenue | Details later | Management reworking strategy to leverage category as stress-season option for farmers |
Risks & Constraints
| Risk | Context |
|---|---|
| Monsoon Deficit | June rainfall 40% short; improved to 15% shortfall by end-July. Delayed sowing in key regions (Rajasthan, Gujarat, MP, Maharashtra) impacted Q1 herbicide demand. Reservoir levels significantly depleted despite some area recovery in July. Q2 remains difficult with large parts of country rainfall-deficit. |
| Price Competition & Weak Demand | Attempted price increases in April (driven by West Asia geopolitical tensions) failed to sustain; prices declined from May through July for many molecules. Weak market demand limits pricing power. Second consecutive weak quarter expected. |
| Unrecoverable Herbicide Season | Products with application windows in June/early July (e.g., Purge, DSV for soybean) have limited recovery opportunity even if sowing improves—this portion of Q1 revenue loss cannot be regained in FY27. |
| Farmer Stress & Reduced Spray Intensity | If commodity prices remain soft, farmers with reduced acreage may limit crop protection spend. Rain-fed areas (40% of agriculture) may opt for no/low-spray options; irrigated areas (60%) expected to maintain or increase investment. |
| GST Litigation | Notice received; management confident of favorable outcome (fertilizer classification at 5% rate) but resolution will take time. |
| Foreign Subsidiary Execution | Incorporating entities in Brazil and Europe; distribution setup in international markets still in progress—execution risk in new geographies. |
Q&A Highlights
FY27 Guidance Revision
- Question: Why such a steep cut in top-line growth guidance for FY27 despite monsoon recovery expectations? (Darshita Shah, DSP Asset Managers)
- Answer: Monsoon movement and its impact from various angles drove the revision. Management remains hopeful of Q2-Q3 growth but emphasized presenting a clear picture to investors. Confirmed Q2 hasn't shown larger growth despite easier base from last year. (Rahul Dhanuka, MD)
Nagpur Plant Economics
- Question: Is ₹200 crore capex for a formulation unit high versus typical ₹60-70 crore? What asset turns should we expect? (Darshita Shah, DSP Asset Managers)
- Answer: Significantly automated plant with global safety/efficiency standards justifies higher initial capex; includes utilities setup on new land. Asset turn details to be shared after project finalization (~Q4 FY27). Expansion headroom exists on the parcel. (Rahul Dhanuka, MD)
Q1 Performance & Herbicide Weakness
- Question: How did Q1 actually pan out and what's the Q2 ground situation? (Prashant Biyani, Elara Capital)
- Answer: Q1 herbicide-heavy quarter; Rajasthan, Gujarat, MP, Maharashtra (cotton/soybean) took major rainfall beating with pockets requiring re-sowing. June was very weak; July better but difficult quarter overall. South sentiment poor. Many districts still rainfall-deficit. (Rahul Dhanuka, MD)
Fungicide Growth in Herbicide Season
- Question: Why did fungicides grow 11% YoY in Q1 when it's traditionally a herbicide placement quarter? (Prashant Biyani, Elara Capital)
- Answer: Specific Japanese fungicides (Nisodium, Conica) gained traction in horticulture (tomato, cucurbits) due to high vegetable prices in dry conditions. Conventional rice-driven fungicide demand remains a Q2 phenomenon. (Rahul Dhanuka, MD)
Volume vs. Value & Price Environment
- Question: Can you split revenue decline into volume and price? (Riju Dalui, Antique Stock Broking)
- Answer: Volume decline ~12.75% vs value decline 12.56%—nearly identical, no price benefit. Price hikes in April (on war-related concerns) reversed from May; significant decline in many molecules through June and July. (VK Bansal, CFO)
Bayer Products & International Expansion
- Question: Status of Bayer-acquired products and FY27 revenue contribution? (Rushabh Shah, BugleRock Capital)
- Answer: Customers established in various markets with business started; distribution setup ongoing elsewhere. Executive Director Harsh visiting US/Brazil. No specific revenue guidance shared. Indian revenue booked since last year; grape season peaks in September (Iprovalicarb). (Rahul Dhanuka, MD; MK Dhanuka, Chairman)
New Product Margins & Innovation Index
- Question: What's the thought process on new product margins and ITI performance? (Rushabh Shah, BugleRock Capital)
- Answer: ITI at 13.89% last year (11.56% for 3-year contributions). New patented products and Japanese chemistries command premium margins (typically double); MeToo and co-marketing products lower margin. Benchmark: minimum 20% margin for any new introduction; 9-3 and nutrition products significantly higher. (Rahul Dhanuka, MD)
Biostimulant Recovery
- Question: Has the regulatory ban impact reversed? Are smaller players exiting? (Saurabh Jain, HSBC)
- Answer: 2 of 3 products launched; third by August end with all regulatory approvals and state sale permissions. Two more biological/nutrition products planned in FY27. Regulation design favors organized players; states being stringent on approvals—favorable direction for Dhanuka. Biostimulant category strategy being reworked. (Rahul Dhanuka, MD)
Hosur Plant Guidance
- Question: FY27 guidance for Hosur plant and breakeven? (Saurabh Jain, HSBC)
- Answer: Revenue guidance ~₹65 crores (Q1 at ₹26 crores; season starts early). EBITDA breakeven difficult—expect negative ₹4-5 crores. (MK Dhanuka, Chairman; VK Bansal, CFO)
Farmer Stress & Demand Outlook
- Question: Is farmer-level stress visible given monsoon deficit? Will spray intensity decline? (Umang Shah, Banyan Tree Advisors)
- Answer: Mixed dynamics—vegetable prices up in April-June boosting horticulture demand; lower acreage may support higher commodity prices benefiting remaining farmers. Irrigated areas (60%) will sustain crop protection investment; rain-fed areas may cut spend. Reservoir levels significantly depleted. Sowing caught up in pockets where July rains were good. (Rahul Dhanuka, MD)
Key Takeaway
Dhanuka Agritech delivered a subdued Q1 FY27 with revenue of ₹461.93 crores, down 12.56% YoY (volume decline matching at ~12.75%), as delayed monsoon onset across Rajasthan, Gujarat, MP, and Maharashtra severely impacted herbicide sales—the company's largest category at 42% of mix. EBITDA of ₹55.01 crores and PAT of ₹36.30 crores reflected the weak demand environment, with attempted price hikes failing to sustain from May onward. Management revised FY27 guidance to small single-digit revenue growth, acknowledging Q2 remains difficult despite improved July sowing. Strategic initiatives continue: ₹200 crore automated formulation plant at Nagpur (23,000 MTPA, operational by Q4 FY28), 5 new product launches (3 fungicides, 1 herbicide, 1 liquid fertilizer), two additional biological products, and global expansion of Bayer-acquired molecules through new subsidiaries in Brazil and Europe. The biostimulant category is being reworked as a farmer-stress solution, with regulatory tailwinds favoring organized players. Watch items include the monsoon trajectory into August-September, reservoir levels, farmer spray intensity in rain-fed areas, and GST litigation outcome—the latter expected favorable. With a debt-free balance sheet, Hosur plant revenue scaling (₹26 crore in Q1, ₹65 crore guided), and a robust product pipeline, management remains optimistic on Q2-Q3 recovery while acknowledging near-term cyclical headwinds.