Dhanuka Agritech Limited — Q3 FY26 earnings call

Call held 5 Feb 2026

Management summary

Dhanuka Agritech reported a challenging Q3 FY26 with declines in revenue, EBITDA, and PAT, primarily due to weak agrochemical demand, lower crop prices, and regulatory impacts on biostimulants. Management expressed optimism for Q4 and FY27, citing strong early Q4 performance, new product launches, and progress at the Dahej plant. The company anticipates a return to double-digit CAGR and stable gross margins, while also navigating risks related to supply chain transitions for new products and potential El Nino effects.

Highlights

  • Q4 FY26 started well, with January performing strongly and a good outlook for paddy and wheat crops.

  • Second product commercialized from Dahej plant in Q3 FY26, with a target for Dahej operations to be EBITDA positive and achieve 80% capacity utilization by FY27.

  • Three new products (Dinkar, Melody, Verdour) launched in 9M FY26, with three more planned for FY27, targeting high-value crops.

  • Management is confident of achieving double-digit CAGR in the long term and maintaining sustainable gross margins around 38%.

  • The Draft Pesticide Management Bill is expected to significantly benefit organized players by curbing spurious products and opening market space.

Concerns

  • Revenue from operations declined to Rs. 409.92 crores in Q3 FY26 from Rs. 445.27 crores in Q3 FY25, a 7.93% YoY decrease.

  • EBITDA decreased to Rs. 58.66 crores in Q3 FY26 from Rs. 75.56 crores in Q3 FY25, a 22.37% YoY decrease.

  • Profit after tax fell to Rs. 40 crores in Q3 FY26 from Rs. 55.04 crores in Q3 FY25, a 27.33% YoY decrease.

  • The impact of biostimulant regulatory changes resulted in a Rs. 15 crore sales impact in Q3 and Rs. 49 crore in 9M FY26.

  • Inventory increased due to a misfired sales plan for imported molecules, contributing to higher inventory levels.

Key financials

2 periods

Headline

  • Revenue
    ₹409.92 Cr
    YoY -7.9%
  • EBITDA
    ₹58.66 Cr
    YoY -22.4%
  • PAT
    ₹40 Cr
    YoY -27.3%
  • Cash on Books
    ₹250 Cr

9M

  • Net Economic Benefit
    ₹19.5 Cr
  • Biostimulant Sales Impact
    ₹49 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.

Capital allocation

high confidence
  • Capex ₹60 Cr
    • MPP-2 plant for adding Iprovalicarb product ₹60 Cr
    And the MPP-2, we are expecting a CAPEX in the range of Rs. 60 crores to Rs. 70 crores.
  • Debt Debt disclosed
    You see, in terms of March, we were having a loan to the bankers to a tune of Rs. 50 crores, which is big in the current financial year.
  • Liquidity Cash ₹250 Cr
    It is more than Rs.250 crore.

Guidance & targets

Capacity

  • Dahej Plant Capacity Utilization Capacity · FY27 · High confidence 80%
    We are working for making Dahej operations EBITDA positive in FY'27 and try to reach 80% capacity utilization of the existing plant.

    — M. K. Dhanuka

Capex

  • MPP-2 CAPEX Capex · FY27 · High confidence Rs. 60-70 crores
    And the MPP-2, we are expecting a CAPEX in the range of Rs. 60 crores to Rs. 70 crores.

    — Management

Profitability

  • Overall Annual EBIT Decline Profitability · Annual Basis · Medium confidence 100-110 bps
    So in overall annual basis, we are expecting a similar decline 100-110 bps.

    — M. K. Dhanuka

  • Sustainable Gross Margin Profitability · Long term · High confidence 38%
    And going forward, I am of the opinion that 38% gross margins are sustainable in the long term.

    — M. K. Dhanuka

Revenue

  • Full Year Growth Revenue · FY26 · High confidence Flattish
    But on a yearly basis, we are of the opinion it should be flattish year.

    — M. K. Dhanuka

  • Q4 Growth Revenue · Q4 FY26 · High confidence Growth
    Yes, in case of Q4, definitely there will be a growth.

    — M. K. Dhanuka

  • Bayer Products Revenue Revenue · FY26 · Medium confidence ~Rs. 30 crores

    Previously Rs. 40 crores → ~Rs. 30 crores

    No, because of the grape season not behaving as per our expectation, it would not be Rs. 40 crores. It would be significantly lower than Rs. 40 Cr. Maybe around Rs. 30 crores.

    — M. K. Dhanuka

  • Technical Sales Growth Revenue · Next year · Medium confidence 10-20%
    Technical sale would be sort of in line with this current year, maybe 10%-20% growth.

    — M. K. Dhanuka

  • Overseas Revenue (Bayer products) Revenue · Q1 FY27 · High confidence Revenue appearing
    Understood. So for the overseas business, we can expect the transfer or the revenue under Dhanuka's book might happen from the Q1 or Q2 of '27, right? Yes, Q1 surely.

    — Management

New Products

  • Biostimulant Normalization New Products · Q1 FY27 · High confidence 3 out of 4 molecules normalized
    Okay, understood. So expecting that almost 3 out of 4 molecules, you will be expecting it to normalize in first quarter onwards?

    — Management

Market context

  • Dahej Plant EBITDA Profitability · FY27 · High confidence Positive
    We are working for making Dahej operations EBITDA positive in FY'27 and try to reach 80% capacity utilization of the existing plant.

    — M. K. Dhanuka

  • Long-term CAGR Growth · Short to mid-term (3-5 years) · High confidence Double-digit
    I believe we will continue to grow at Dhanuka with a healthy double-digit growth on a short to mid-term horizon of next 3 years to 5 years.

    — Management

What to watch in Q4 FY26

Biostimulant Product Approvals & Normalization

Q1 FY27
Current Rs. 15 crore sales impact in Q3, Rs. 49 crore in 9M due to regulatory changes
Target 3 out of 4 molecules normalized, new offerings launched

Why it matters

Direct impact on sales and recovery from regulatory setbacks, crucial for revenue growth.

So the regulatory framework is in place which is really good for the organized players like Dhanuka. So our products are under testing and approval stage. We are quite hopeful that we will be receiving our approvals by end of this quarter and we will be up and running with fresh set of biological offerings, biostimulants offering, in this new regulated regime in Q1 of next year.

Risks & concerns

  • Weak Agrochemical Demand and Low Crop Prices

    high

    Agrochemical demand remained weak in Q3 FY26 due to stressed demand drivers, weather issues, and lower crop prices, leading to industry-wide volume decline.

    Management acknowledged

  • Biostimulant Regulatory Changes and Sales Impact

    high

    Regulatory changes led to a Rs. 15 crore sales impact in Q3 and Rs. 49 crore in 9M FY26, though management expects normalization by Q1 FY27.

    Management acknowledged

  • Increased Inventory due to Misfired Sales Plan

    medium

    Inventory increased this year due to the impact on volumes from a misfired sales plan for certain imported molecules.

    Management acknowledged

  • El Nino Impact on Kharif Season

    medium

    El Nino predictions are early and have high margins of error; management is monitoring mid-April forecasts, noting not all El Nino years result in poor rainfall.

    Analyst acknowledged

  • Supply Chain Setback during Bayer Product Transition

    medium

    There is a risk of supply chain setbacks during the transition of Bayer products, as the company is still dependent on Bayer for supply and regulatory changes.

    Management acknowledged

Q&A highlights

8 direct
Demand Scenario for Q4 and Kharif Season Direct
Right. So, Q4 has really started well. January has done well for us. South Indian paddy, East India paddy is looking really good. Wheat crop has been good and the relevant consumption of wheat herbicide has happened extending from late Q3 to early Q4. So, all that is looking bright.

Provides an early indication of demand trends for the current quarter and upcoming season, crucial for revenue outlook.

Asked by Prashant Biyani

Impact of Biostimulant Regulatory Changes on Sales Direct
Product under regulatory changes in this category we were having a contribution of around 19% but this year the impact in our Q3 is around Rs. 15 crore and 9 month is the impact of Rs. 49 crore on account of these four products biostimulant stock sale basically.

Quantifies the significant sales impact from regulatory issues and highlights a key challenge for the company.

Asked by Saurabh Jain

Normalization of Biostimulant Products Post-Regulation Direct
So the regulatory framework is in place which is really good for the organized players like Dhanuka. So our products are under testing and approval stage. We are quite hopeful that we will be receiving our approvals by end of this quarter and we will be up and running with fresh set of biological offerings, biostimulants offering, in this new regulated regime in Q1 of next year.

Outlines the company's strategy and timeline for recovering sales in the affected biostimulant segment, indicating future growth drivers.

Asked by Saurabh Jain

Dahej Plant Performance and Future Capacity Direct
Next year FY'27, we are looking at a capacity utilization of close to 80% for these two. Plus we will be adding one more product in this plant, that is the Iprovalicarb. So three products together, we are looking at 80% capacity utilization. And the MPP-2, we are expecting a CAPEX in the range of Rs. 60 crores to Rs. 70 crores.

Details the operational ramp-up and future investment plans for a key manufacturing facility, impacting future revenue and profitability.

Asked by Viraj Kacharia

Sustainable Gross Margin and Raw Material Prices Direct
And going forward, I am of the opinion that 38% gross margins are sustainable in the long term.

Provides a clear long-term profitability target and clarifies the impact of raw material prices and net economic benefit on margins.

Asked by Ketan Chawla

Revision of Bayer Product Revenue Guidance for FY26 Direct
No, because of the grape season not behaving as per our expectation, it would not be Rs. 40 crores. It would be significantly lower than Rs. 40 Cr. Maybe around Rs. 30 crores.

Indicates a downward revision in specific product revenue guidance, reflecting market challenges in certain crop segments.

Asked by Parth Mehta

Impact of Draft Pesticide Management Bill (PMB) Direct
Right. So Draft Pesticide Management Bill would be really good for the organized industry and organized players. Dhanuka being an organized player and believing in building brand equity, building value for the customer, in this case our farmer, would significantly stand to benefit from the PMB.

Highlights a significant regulatory development that is expected to create a more favorable competitive landscape for organized players.

Asked by Archit Joshi

New Product Introductions for FY27 Direct
So we have lined up three new launches for next year, out of which two would be fungicides and both of them would be 9(3) first time introductions. And then we have also lined up a specialty offering for enhancing spray efficiency.

Details the upcoming product pipeline, which is crucial for future revenue growth and market diversification.

Asked by Rohit Nagraj

3 min read 7 chapters

Detailed narrative

Q3 FY26 Financial Performance Overview

Dhanuka Agritech reported a challenging Q3 FY26, with revenue from operations declining by 7.93% YoY to Rs. 409.92 crores from Rs. 445.27 crores in Q3 FY25. This was accompanied by a significant drop in profitability, with EBITDA falling 22.37% YoY to Rs. 58.66 crores and Profit After Tax decreasing 27.33% YoY to Rs. 40 crores. The company attributed this performance to weak agrochemical demand, lower crop prices, and regulatory impacts on biostimulants.

Biostimulant Regulatory Impact and Outlook

Regulatory changes significantly impacted the biostimulant segment, which previously contributed around 19% of sales. The company experienced a sales impact of Rs. 15 crores in Q3 FY26 and Rs. 49 crores for the nine-month period due to biostimulant stock sales. Management is optimistic about receiving approvals for new biological and biostimulant offerings by the end of the current quarter, expecting 3 out of 4 key molecules to normalize and contribute to sales from Q1 FY27.

Dahej Plant Performance and Expansion

The Dahej plant commercialized its second product in Q3 FY26, with a target to achieve EBITDA positivity and 80% capacity utilization by FY27. Despite Q3 being an off-season for these products and facing production delays for difenoconazole, the company is planning a CAPEX of Rs. 60-70 crores for MPP-2 to add a third product, Iprovalicarb, further enhancing utilization. Discussions are also ongoing with two multinational companies for potential contracts at Dahej.

Product Portfolio and Market Strategy

Dhanuka launched three new products (Dinkar, Melody, and Verdour) in the nine-month period of FY26 and plans to introduce three more in FY27, including two fungicides and one specialty spray enhancer. These new fungicides will target high-value crops like grapes, potato, tomato, and chilli, while the spray enhancer will focus on tomato markets. The company maintains a pan-India presence and aims for continuous extension in rural market penetration and international market expansion.

Gross Margin Outlook and Raw Material Sourcing

The company's gross margins expanded from 34.4% to 40.2% between FY23 and FY25. Management expects sustainable gross margins of 38% in the long term, noting that the softness in technical raw material prices is largely over. A net economic benefit of Rs. 19.5 crores in 9M FY26, which has no COGS, contributed to the higher gross margin, with a 2% impact attributed to this rather than raw material prices. Direct raw material sourcing from China accounts for 10-15% of procurement.

Full Year and Long-Term Growth Guidance

Dhanuka anticipates a flattish growth for the full year FY26, despite expecting growth in Q4. For the long term (3-5 years), the company is confident of achieving double-digit CAGR, supported by favorable macroeconomic factors, increasing agricultural investments, and low agrochemical consumption in India compared to global averages. The revenue from Bayer products for FY26 is now expected to be around Rs. 30 crores, revised down from an earlier guidance of Rs. 40 crores due to the grape season.

Impact of Draft Pesticide Management Bill

Management views the Draft Pesticide Management Bill (PMB) as highly beneficial for organized players like Dhanuka. The bill is expected to introduce stringent rules against misbranding and spurious products, along with punitive measures for fly-by-night operators. This regulatory framework is anticipated to create more market space for compliant companies and contribute to the growth of Indian agriculture, although its success will depend on effective execution by central and state governments.

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