Dhanuka Agritech Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Dhanuka Agritech reported a 7% YoY revenue growth to ₹528.29 crores and a 13.5% increase in PAT to ₹55.5 crores for Q1 FY26, despite a challenging monsoon season impacting herbicide demand. The company launched a new paddy herbicide, Dinkar, and remains committed to double-digit revenue growth for FY26, though anticipating a 100 bps decline in EBITDA margin. Capital allocation included a final dividend and a ₹100 crore share buyback.

Highlights

  • Revenue from operations grew 7% YoY to ₹528.29 crores, indicating resilience despite challenging market conditions.

  • EBITDA increased by 15.9% YoY to ₹83.19 crores, demonstrating operational efficiency.

  • Profit after tax grew 13.5% YoY to ₹55.5 crores.

  • Successfully launched a new 9(3) product, Dinkar (paddy herbicide), which received an encouraging response.

  • Committed to achieving double-digit revenue growth for the full financial year.

Concerns

  • Q1 FY26 revenue growth was single-digit (7%) due to delayed and uneven Southwest monsoon, leading to subdued demand for agri imports, particularly herbicides.

  • Channel inventories remained elevated in certain regions, especially for herbicides in soybean and cotton growing areas.

  • Management expects a 100 basis point decline in EBITDA margin for FY26 due to the ban on a highly profitable biofertilizer molecule and stabilization of technical prices.

  • An investment in IoTechWorld Avigation was marked down from ₹31 crores to ₹22.5 crores based on a valuation report.

Key financials

2 periods

Headline

  • Revenue from Operations
    ₹528.29 Cr
    YoY +7%
  • EBITDA
    ₹83.19 Cr
  • Profit After Tax
    ₹55.5 Cr

Q1

  • Dahej Plant Revenue
    ₹16.5 Cr
  • Royalty Income
    ₹9 Cr

What they filed

Q1 FY27: revenue down 12.5%, net profit down 35.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue654 445 442 528 598 −9%410 −8%483 +9%462 −12%
EBITDA160 76 110 83 137 −14%59 −22%125 +14%55 −34%
Net profit118 55 76 56 94 −20%40 −27%98 +29%36 −36%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Zone-wise Turnover Q1 FY26
    31% North India9% East India41% West India19% South India
  • Product Category-wise Turnover Q1 FY26
    23% Insecticides11% Fungicides50% Herbicides16% Others

Capital allocation

high confidence
  • Dividend ₹2/share (final)
    The shareholders of the company in the 40th Annual General Meeting held today at 11 a.m. declared the final dividend of 100%, that is INR2 per equity share having face value of INR2 per share.
  • Buyback ₹100 Cr Max ₹2,000/share
    The company has already rewarded its equity shareholders with buyback of 5 lakh equity shares at the rate of INR2,000 per equity share, absorbing INR100 crores.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence double-digit growth
    Yes. So in terms of revenue, we are committed to a double-digit growth, maybe smaller, but we are sticking to our double-digit growth objective.

    — Rahul Dhanuka

  • Dahej Plant Revenue Revenue · FY26 · High confidence INR65 crores
    Yes. Dahej plant, we are expecting a revenue of INR65 crores.

    — Harsh Dhanuka

Margin

  • EBITDA Margin Margin · FY26 · High confidence 100 basis point decline
    In terms of EBITDA margin, we are of the opinion there would be around 100 basis point decline in the EBITDA margin in this financial year.

    — V.K Bansal

Capacity

  • Dahej Plant Capacity Utilization Capacity · FY26 · High confidence close to 60%
    So capacity utilization for the entire year will be close to 60% in this year.

    — Harsh Dhanuka

Realization

  • Technical Prices Realization · FY26 · Medium confidence 2% increase
    for the entire year, as we communicated in the previous quarter, we are expecting maybe a 2% increase in the overall volume versus value, 2% higher value because of the price increase.

    — Harsh Dhanuka

New Products

  • Second product from Dahej plant New Products · H2 FY26 · High confidence introduced
    Further, I would like to share that we are on track to introduce the second product from our Dahej plant in H2 of FY '26.

    — M.K. Dhanuka

  • Additional new products New Products · FY26 · High confidence at least 2 more me-too products
    And going forward, we'll be launching a few more products, at least 2 more me-too products this year.

    — Rahul Dhanuka

What to watch in Q2 FY26

Double-digit revenue growth

FY26
Current 7% YoY in Q1 FY26
Target Double-digit growth for FY26

Why it matters

To confirm the company's ability to recover from a soft Q1 and achieve its full-year growth target.

Yes. So in terms of revenue, we are committed to a double-digit growth, maybe smaller, but we are sticking to our double-digit growth objective.

Risks & concerns

  • Delayed and uneven Southwest monsoon

    high

    Impacted timely sowing of Kharif crops, leading to subdued demand for agri imports, particularly herbicides, and caused resowing in many places.

    Management acknowledged

  • EBITDA margin compression

    high

    Expected 100 bps decline for FY26 due to the ban on a highly profitable biofertilizer molecule and stabilization of technical prices.

    Management acknowledged

  • Elevated channel inventories

    medium

    Remained elevated in certain regions, especially for herbicides in soybean and cotton growing areas, affecting primary sales.

    Management acknowledged

  • Investment markdown

    low

    Investment in IoTechWorld Avigation marked down from ₹31 crores to ₹22.5 crores based on valuation.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Impact of early monsoon on Q1 revenue growth Direct
Right. So monsoon did happen the way it happened. And when it was raining in May, that rain was actually out of place and not the monsoon rains, so to say. And that rain did not do much to help some critical crops like soybean and cotton. In fact, it led to resowing in many places, which means that whatever farmer had sown got wasted and farmer had to go again for sowing the seeds. So that was a resowing that happened. And there was a mismatch in the crop cycle and the consumption opportunity because of which this quarter has shown single-digit growth.

Explains the reasons behind the subdued 7% revenue growth despite an early monsoon, highlighting operational challenges for farmers and the company.

Asked by Bhavya Gandhi

Full year guidance for revenue and EBITDA margin Direct
Yes. So in terms of revenue, we are committed to a double-digit growth, maybe smaller, but we are sticking to our double-digit growth objective. ... In terms of EBITDA margin, we are of the opinion there would be around 100 basis point decline in the EBITDA margin in this financial year.

Confirms the company's full-year targets, including a commitment to double-digit revenue growth but a clear expectation of margin compression.

Asked by Bhavya Gandhi

Reasons for 100 bps EBITDA margin decline Direct
Yes, you see in the quarter 1, the gross margin is comparatively on lower side. And if you see in the previous financial year, quarter 2 gross margins were 42%, that is ever highest. And you see because of the ban on biofertilizer molecule, which is highly profitable because of product mix, we are seeing the impact on the gross margin. And last year, we could get the advantage of the decline in the technical prices, which is now arrested, prices are more or less stable. Therefore, we are expecting a 100 basis point decline in the gross margin.

Provides specific reasons for the anticipated margin decline, linking it to product mix changes and raw material price stability.

Asked by Darshita Shah

Performance of Sempra and Targa Super molecules Direct
Yes, right. So Targa Super finds its opportunity in soybean, cotton, groundnut, black gram and onion. ... Targa Super still commands a premium position with the farmer in soybean and cotton. And Sempra, which is a herbicide finding opportunity in sugarcane and maize, it's like really doing well. We have launched variants also of Sempra this year earlier in Tizom shape and Sempra is being really well accepted with growing acreages of maize and increasing value of sugarcane.

Offers insights into the market positioning, crop applications, and performance of two key products, highlighting their contribution and competitive landscape.

Asked by Shubham Sehgal

Number of brands exceeding ₹50 crores in revenue Direct
Yearly basis is around 10, on a yearly basis. ... Around 10 brands, INR50 crores plus, and if you see 5 years ago, maybe 2, 3. ... Maybe around 50-50 [tie-up vs in-house].

Illustrates the company's portfolio strength and growth in successful brands over the past five years, indicating diversification and product development success.

Asked by Shubham Sehgal

Comparison of performance with competitors Partial
Well, I can give a reason if that could satisfy you. If we compare quarter-on-quarter, then last year quarterly performance was certainly superior, much superior for Dhanuka, which means a much better and wider base as compared to our competitors. So that's for one.

Management attributes softer comparative numbers to a higher base effect from a strong prior-year performance, suggesting internal rather than external underperformance.

Asked by Huseain Bharuchwala

New product launch pipeline for the coming year Direct
We have already launched paddy herbicide from Hokko Japan in name of Dinkar. ... Moving ahead, we will be launching Kinzan, which is again a Nissan, Japan, fungicide for grapes and potato. Then we, of course, have launched Melody Duo this year, which we acquired from Bayer Crop Science last year. And going forward, we'll be launching a few more products, at least 2 more me-too products this year.

Details the specific new products launched and planned, indicating the company's strategy for portfolio expansion and growth drivers.

Asked by Shubham Padhiar

Progress on CDMO contracts Evasive
There are ongoing discussions, but no deal has been signed as yet.

Indicates that while discussions are happening, no concrete CDMO deals have materialized, which is a key area of interest for the sector.

Asked by Ankit Gupta

2 min read 7 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Dhanuka Agritech reported a 7% year-on-year growth in revenue from operations, reaching ₹528.29 crores for Q1 FY26, compared to ₹493.58 crores in Q1 FY25. EBITDA for the quarter stood at ₹83.19 crores, up from ₹71.72 crores in the prior year, while Profit After Tax increased to ₹55.5 crores from ₹48.89 crores. The company's shareholders declared a final dividend of ₹2 per equity share at the 40th Annual General Meeting.

Monsoon Impact and Market Challenges

The April to June 2025 quarter was challenging for the Indian agrochemical industry due to a delayed and uneven Southwest monsoon. This impacted timely sowing of Kharif crops and led to subdued demand for agri imports, particularly herbicides. Farmers exercised caution in purchases, and early, out-of-place rains caused resowing in many areas, creating a mismatch in crop cycles and consumption opportunities. Channel inventories remained elevated, especially in herbicide-heavy regions like Madhya Pradesh, Maharashtra, Karnataka, and Telangana.

Product Portfolio and New Launches

Herbicides constituted 50% of the product category-wise turnover in Q1 FY26, followed by insecticides at 23% and fungicides at 11%. The company introduced a new 9(3) product, Dinkar, a paddy herbicide from Hokko Chemical Japan, which received an encouraging response, particularly in the South region. Upcoming launches include Kinzan (a fungicide from Nissan, Japan) for grapes and potato, and Melody Duo (acquired from Bayer Crop Science). At least two more me-too products are planned for launch this year.

Dahej Plant Operations and Outlook

The Dahej plant is currently manufacturing one product, with a second product slated for introduction in H2 FY26. For the full financial year, the company expects the Dahej plant to generate ₹65 crores in revenue and achieve approximately 60% capacity utilization. In Q1 FY26, the Dahej plant contributed ₹16.5 crores in revenue but incurred EBITDA losses of ₹3 crores.

Margin Outlook and Contributing Factors

Management anticipates a 100 basis point decline in the EBITDA margin for FY26. This is primarily attributed to the ban on a highly profitable biofertilizer molecule, which negatively impacted the product mix. Additionally, the advantage from declining technical prices, seen in the previous year, has now ceased as prices have stabilized, contributing to the expected margin compression.

Capital Allocation and Strategic Investments

Beyond the final dividend, Dhanuka Agritech completed a buyback of 5 lakh equity shares at ₹2,000 per share, absorbing ₹100 crores. The company also disclosed a markdown of its investment in IoTechWorld Avigation, a liquid drone manufacturing company, from ₹31 crores to ₹22.5 crores, based on a valuation report. Discussions for CDMO contracts are ongoing, but no deals have been signed yet.

Export Strategy and Market Diversification

The export registration portfolio focuses on products manufactured at the Dahej plant (currently bifenthrin) and the Melody range. The company is in the process of applying for registrations in 6-7 additional countries this year. The Melody range and triadimenol products are already registered in over 25 countries globally, indicating a push towards international market expansion.

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