Dhanuka Agritech

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.

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.

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.

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.

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.

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.

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.