Dhanuka Agritech Limited — Q2 FY26 earnings call

Call held 31 Oct 2025

Management summary

Dhanuka Agritech reported a challenging Q2 FY26, with significant declines in revenue, EBITDA, and PAT, primarily due to adverse weather conditions impacting agrochemical demand and new biostimulant regulations. While new product development at the Dahej plant is progressing, sales guidance for acquired Bayer products was revised downwards due to registration delays. Management anticipates a better H2 FY26 with 2-3% growth, aiming for flattish annual revenue, and remains committed to backward integration and strategic acquisitions.

Highlights

  • Trial production of second Dahej product (Difenoconazole) commenced, with potential for 200 metric tons in India.

  • Bifenthrin Technical sales from Dahej plant are on track.

  • Strong balance sheet with debt-free status supports future growth and M&A opportunities.

  • Continued focus on R&D and international collaborations for new product introduction.

Concerns

  • Revenue declined 8.56% YoY to ₹598.25 crores in Q2 FY26 due to adverse weather conditions.

  • EBITDA decreased 14.20% YoY to ₹136.73 crores in Q2 FY26.

  • PAT fell 20.04% YoY to ₹93.97 crores in Q2 FY26.

  • Biostimulant sales impacted by over ₹20 crores in Q2 due to regulatory changes.

  • Bayer products FY26 sales guidance revised down to ₹40 crores from ₹100 crores due to registration delays.

  • Herbicides segment, contributing 9% to Q2 turnover, was significantly hit by weather, leading to increased sales returns.

Key financials

  1. Revenue from Operations ₹598.25 Cr -8.6%YoY
  2. EBITDA ₹136.73 Cr -14.2%YoY
  3. PAT ₹93.97 Cr -20%YoY

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 (Q2 FY26)
    30% North India13% East India24% West India33% South Zone
  • Product Category-wise Turnover (Q2 FY26)
    46% Insecticides29% Fungicides9% Herbicides16% Others

Capital allocation

high confidence
  • Debt Debt disclosed
    We have not only a debt-free balance sheet, we have a significantly strong balance sheet, which positions us well in terms of continuing to explore backward integration, as well as acquisition opportunities.
  • M&A Melody Duo and Triadimenol (from Bayer Crop Science) Acquisition · Integrated

    Introduction of latest technology in India and global rights for products.

    FY26 sales guidance revised down to ₹40 crores due to registration delays, from an initial ₹100 crores. Royalty income of ₹13.5 crores received in H1.

    Then we have acquired 2 brands and global rights from Bayer Crop Science for Melody Duo and Triadimenol.
  • Liquidity Liquidity disclosed Strong balance sheet and ability to manage working capital tightly.
    We have not only a debt-free balance sheet, we have a significantly strong balance sheet, which positions us well in terms of continuing to explore backward integration, as well as acquisition opportunities.

Guidance & targets

Revenue

  • FY26 Revenue Performance Revenue · FY26 · High confidence Flattish
    So, first question, I think, on the PPT, you have mentioned that you're expecting a flattish revenue performance in FY '26. ... our annual number would be flattish

    — Archit Joshi (quoting PPT), Vinod Bansal

  • H2 FY26 Revenue Growth Revenue · H2 FY26 · High confidence 2% to 3%
    So if we recover that, there, we are expecting around 2% to 3% growth in the H2.

    — Vinod Bansal

  • Bayer Products Overall Sales Revenue · FY26 · Medium confidence ₹40 crores

    Previously ₹100 crores → ₹40 crores

    In the entire year, yes, you're right, we're expecting around INR100 crores business, which should come in the Dhanuka's books. But because of a little delay in the registration process, exports will be -- is not coming significantly in this financial year. So the number would be in the range of around INR40 crores in this financial year probably.

    — Vinod Bansal

  • Bayer Products H2 Sales Revenue · H2 FY26 · High confidence ₹15 crores
    H2 is only INR15 crores from Bayer products.

    — Management

Profitability

  • Dahej Plant EBITDA Profitability Profitability · FY27 · Medium confidence EBITDA positive
    EBITDA profitability, we last call, we mentioned FY '27. So we are trying for FY '27.

    — Harsh Dhanuka

  • EBITDA Margin Impact Profitability · FY26 · High confidence approx. 100 basis points decline
    So now, we are seeing our gross margin will remain the same as per the actuals of '24-'25. So now, we are expecting the impact on EBITDA margin, approx. 100 basis points.

    — Vinod Bansal

New Product

  • Biostimulant Sales Pick-up New Product · Q1 next year (FY27) · Medium confidence Picking up
    I would assume, if not last quarter, first quarter next year for sure.

    — Rahul Dhanuka

Capacity

  • Iprovalicarb Manufacturing in India Capacity · FY27 · High confidence Start manufacturing
    Iprovalicarb, we are planning to manufacture in India, and this will start in FY '27.

    — Harsh Dhanuka

What to watch in Q3 FY26

Biostimulant Sales Recovery

Q1 next year (FY27)
Current Sales impacted by over ₹20 crores in Q2 FY26 due to regulatory framework.
Target Sales picking up.

Why it matters

Recovery of this product category is crucial for overall revenue growth, as it was a significant drag in Q2.

I would assume, if not last quarter, first quarter next year for sure.

Risks & concerns

  • Adverse Weather Conditions

    high

    Abnormal and uneven rainfall led to crop losses, delayed harvesting, and reduced agrochemical application, directly impacting Q2 revenue.

    Management acknowledged

  • Biostimulant Regulatory Framework

    medium

    Sudden implementation of new regulations without adequate consultation impacted biostimulant sales by over ₹20 crores in Q2.

    Management acknowledged

  • Delayed Rabi Season

    medium

    Extended monsoon and October rains delayed kharif harvesting and rabi sowing, pushing business activity to later months in H2.

    Management acknowledged

  • Bayer Product Registration Delays

    medium

    Delays in registration transfers for Bayer products in various countries impacted export revenue, leading to a downward revision of FY26 sales guidance.

    Management acknowledged

  • Increased Sales Returns

    medium

    Continuous rains in Q2 led to a significant increase in sales returns, particularly in the herbicides segment.

    Management acknowledged

Q&A highlights

6 direct, 1 evasive
Dahej Plant Second Product (Difenoconazole) and its potential Direct
This second product is Difenoconazole, which we have started trial production and expecting to scale up as we stabilize this new product. ... We believe, for the Indian market, the potential to be close to 200 metric tons.

Reveals the identity and market potential of a new product from the Dahej manufacturing facility, indicating future revenue streams.

Asked by Darshita Shah

Impact on Herbicides Segment Direct
We faced this challenge of herbicide almost across the board for all our specialty herbicides in soybean, groundnut, cotton mostly. ... However, paddy herbicides and total weed killers, they did really well in spite of the challenge. But specialty herbicides in major crops took a beating.

Clarifies that the decline in the herbicides segment was due to widespread climatic issues affecting application, rather than a shift in farmer preference to generic products.

Asked by Darshita Shah

Bayer Products Sales & Royalty Income for FY26 Partial
The royalty figures will get revised upwards. Already we have received till now, till H1, INR13.5 crores royalty. And for the rest of the year, there will be more. And the revenue will have to be revised downwards. ... So the number would be in the range of around INR40 crores in this financial year probably.

Provides a significant revision to the expected revenue contribution from the acquired Bayer products for FY26, indicating delays in realizing the full potential.

Asked by Rohit Nagraj

Biostimulant Regulations and Impact Direct
The financial impact we shared already of the biostimulant in quarter 2 is slightly more than INR20 crores. ... Biostimulants were out of a regulatory emit before this happened. Almost 2 years back, Government of India tried to bring in a regulatory framework... implemented, A, suddenly, and B, without adequate consultation with the industry and other stakeholders.

Explains the reason for the significant revenue impact from biostimulants in Q2 and highlights the challenges faced due to new, suddenly implemented regulations.

Asked by Bhavya Gandhi

Rabi Season Outlook and Impact on Q3/Q4 Direct
because of October rains, harvesting is delayed. So yes, kharif is delayed. ... So, we can say rabi has started when farmer is getting into sowing. So, some parts, because harvesting is not yet complete, sowing has not yet started. ... it is possible that November-December is unusually better.

Provides clarity on the delayed start of the rabi season due to extended monsoon, indicating a shift in business activity to later months (Nov-Dec) and setting expectations for H2 performance.

Asked by Sanjay K.

Opportunities from FMC's India Business Exit Evasive
Siddharth, you will not really want me to answer either in yes or no for the previous question. So, I'll skip that. And I'll jump to the next one, which is the opportunity by -- created by FMC's exit.

Highlights a potential M&A opportunity in the sector but management chose not to comment directly, suggesting sensitivity or ongoing discussions.

Asked by Siddharth Gadekar

Longer-term Strategy: Backward Integration and Acquisitions Direct
A, we are in a growing market, and these are all growth opportunities which we are trying to capitalize. Yes, all these opportunities, as you would appreciate, are relatively having a long gestation period. So, that goes with that. ... if we get a good one, we are open to explore.

Reaffirms the company's strategic focus on long-term growth drivers like backward integration and M&A, leveraging its strong balance sheet, despite the long gestation periods involved.

Asked by Himanshu Upadhyay

Sales Returns in Q2 Direct
Sales return has increased in the quarter significantly as compared to the previous year because of the continuous rains. Whatever we have sold basically -- particularly in the segment of herbicide so herbicide material -- the herbicide has increased significantly in quarter 2.

Explains a contributing factor to the lower net sales and highlights the specific segment most affected by increased sales returns due to weather.

Asked by Bharat Gupta

3 min read 8 chapters

Detailed narrative

Q2 FY26 Financial Performance Overview

Dhanuka Agritech reported a challenging Q2 FY26, with revenue from operations at ₹598.25 crores, marking an 8.56% decline from ₹654.28 crores in Q2 FY25. EBITDA also saw a significant drop of 14.20% to ₹136.73 crores, down from ₹159.58 crores in the prior year. Profit after tax (PAT) decreased by 20.04% to ₹93.97 crores compared to ₹117.52 crores in Q2 FY25, reflecting the impact of various headwinds during the quarter.

Impact of Adverse Weather Conditions

The company's Q2 performance was severely affected by abnormal and uneven rainfall distribution across India. This led to significant crop losses, delayed harvesting, and reduced application of agrochemicals. Regions experienced both excess rainfall causing waterlogging and deficient showers, creating uneven soil moisture conditions, which collectively lowered demand for agrochemical products and contributed to the revenue decline.

Biostimulant Business Update and Regulatory Challenges

Sales of biostimulants were negatively impacted by the sudden implementation of a new regulatory framework by the Government of India, which temporarily halted sales of existing products. This regulatory change resulted in an estimated impact of over ₹20 crores on revenue in Q2 FY26. Management expects biostimulant sales to begin recovering by Q1 FY27 as new product clearances are obtained under the updated framework.

Dahej Plant and New Product Development

Dhanuka Agritech has commenced trial production of its second product, Difenoconazole, at the Dahej plant, with an estimated potential of 200 metric tons for the Indian market. Sales of Bifenthrin Technical from Dahej are progressing as planned. The company aims for the Dahej plant to achieve EBITDA profitability by FY27, despite reporting a nominal EBITDA loss of ₹46 lakhs in Q2 FY26.

Bayer Products Integration and Revised Outlook

The integration of products acquired from Bayer (Melody Duo, Triadimenol) is underway, with India market sales reaching approximately ₹25 crores in H1 FY26. However, delays in international registration transfers have led to a downward revision of the FY26 overall sales guidance for Bayer products to around ₹40 crores, from an initial projection of ₹100 crores. Royalty income from Bayer is expected to increase, with ₹13.5 crores already received in H1.

Rabi Season Outlook and H2 FY26 Projections

The extended monsoon and October rains have caused delays in kharif harvesting and the commencement of rabi sowing, pushing business activity into November and December. Despite this slow start, management anticipates a relatively better H2 FY26 due to favorable soil moisture and water availability. The company projects a 2-3% growth in H2 FY26, aiming for a flattish revenue performance for the full FY26.

Strategic Focus on Backward Integration and Acquisitions

Dhanuka Agritech continues to prioritize backward integration, with plans to begin manufacturing Iprovalicarb in India by FY27. The company also remains open to strategic acquisitions, leveraging its debt-free and strong balance sheet to explore growth opportunities. International collaborations with 10 global agrochemical companies are key to introducing the latest technologies in India.

Sales Returns and Herbicides Segment Performance

Sales returns increased significantly in Q2 FY26, primarily attributed to continuous rains that impacted the herbicides segment. This particularly affected specialty herbicides used in crops like soybean, groundnut, and cotton, as adverse climatic conditions prevented farmers from applying these products. The herbicides category contributed only 9% to the Q2 turnover, highlighting its vulnerability to weather-related disruptions.

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