Dhanuka Agritech Limited — Q4 FY25 earnings call

Call held 16 May 2025

Management summary

Dhanuka Agritech delivered strong financial results for Q4 and FY25, achieving record revenue and significant margin expansion. The company made a strategic move into global markets with the acquisition of international rights for two fungicide molecules. While the Dahej plant remains a drag on profitability, management is optimistic about future growth driven by new product launches and a favorable monsoon, despite anticipated gross margin pressures from raw material costs.

Highlights

  • Revenue from operations for FY25 grew by 15.73% to ₹2035.15 crores, surpassing the ₹2000 crore milestone.

  • EBITDA for FY25 increased by 27.23% to ₹416.61 crores, with EBITDA margin improving by 180 bps to 20.47%.

  • Profit after tax for FY25 rose by 24.2% to ₹296.96 crores, with PAT margin improving by 99 bps to 14.59%.

  • Acquired international rights for two fungicide molecules from Bayer AG, marking a strategic entry into global markets with expected revenue contribution of ₹110 crores in FY26.

  • Board recommended a 100% dividend of ₹2 per equity share, demonstrating commitment to shareholder returns.

Concerns

  • The Dahej plant continues to operate at a negative EBITDA of ₹14 crores in FY25, with profitability requiring 70-80% capacity utilization (currently at 25%, projected 35% for FY26).

  • Gross margin is expected to be impacted by a 100 basis point hit in FY26 due to stabilizing/increasing raw material prices.

  • Trade receivables have gone up significantly in Q4 FY25, though management expects them to come down sharply in Q1 FY26.

Key financials

2 periods

Q4 FY25

  • Revenue
    ₹442.02 Cr
    YoY +20%
  • EBITDA
    ₹1,095.75 Cr
    YoY +37%
  • EBITDA Margin
    24.8%
  • PAT
    ₹75.5 Cr
    YoY +27.9%
  • PAT Margin
    17.1%
  • Volume Growth
    19%

FY25

  • Revenue
    ₹2,035.15 Cr
    YoY +15.7%
  • EBITDA
    ₹416.61 Cr
    YoY +27.2%
  • EBITDA Margin
    20.5%
  • PAT
    ₹296.96 Cr
    YoY +24.2%
  • PAT Margin
    14.6%
  • Volume Growth
    18%

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 (Q4 FY25)
    34% North Zone12% East Zone20% West Zone34% South Zone
  • Product Category-wise Turnover (Q4 FY25)
    38% Insecticides13% Fungicides32% Herbicides17% Others
  • Sales Channel (FY25)
    9% B2B Sales91% Brand Sales

Capital allocation

high confidence
  • Dividend ₹2/share (final)
    The Board of Directors has recommended 100% dividend, that is Rs.2 per equity share having a face value of Rs.2 per share, which will absorb Rs.9.02 crores.
  • M&A International rights for two fungicide molecules (iprovalicarb and triadimenol) from Bayer AG Acquisition · Closed

    Strategic gateway to global growth, presence in more than 20 countries across Latin America, Europe, Asia and Africa.

    Acquisition cost capitalized as Rs. 160 crore intangible assets. Expected to contribute Rs. 110 crores in revenue and Rs. 15-20 crores in royalty/economic benefit in FY26.

    achieving a milestone revenue of more than Rs.2000 crores, as well as acquisition of international rights for two key fungicide molecules, iprovalicarb and triadimenol from Bayer AG, Germany. This deal is not just a product expansion; it is a strategic gateway to global growth... So, these two products, FY'25 revenue would have been close to Rs.200 crores.
  • Liquidity Liquidity disclosed Cash position is quite healthy and expected to keep building up.
    On the cash position, even post the acquisition price we paid for the two products in Bayer, our cash position is quite healthy. And given the way things are, this will just keep on building up.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY26 · High confidence higher double digit growth
    On the revenue this year, what we are planning is a higher double digit growth

    — Harsh Dhanuka

  • Dahej Plant Revenue Revenue · FY26 · High confidence ₹60 crores
    for the coming year we are looking at a revenue of Rs.60 crores from Dahej

    — Harsh Dhanuka

  • Bayer Products Revenue Revenue · FY26 · High confidence ₹110 crores
    In terms of revenue contribution from both products combined in this year we are looking at about Rs.110 crores

    — Harsh Dhanuka

  • Overall Exports (excluding Bayer) Revenue · FY26 · High confidence ₹60 crores
    Overall exports, we are expecting to the tune of Rs.60 crores other than Bayer products.

    — Harsh Dhanuka

Profitability

  • EBITDA Margin Profitability · FY26 · High confidence remain on similar lines as this year
    and on the EBITDA, we expected to remain on similar lines as this year.

    — Harsh Dhanuka

  • Dahej Plant EBITDA Profitability · FY26 · High confidence similar lines (negative)
    in terms of EBITDA last year was negative EBITDA of Rs.14 crores, and this year the EBITDA will be in the similar lines.

    — Harsh Dhanuka

  • Gross Margin Impact Profitability · FY26 · High confidence 100 basis point hit
    In terms of gross margin, we are expecting a hit of around 100 basis point in the year 25-26

    — V.K. Bansal

  • EBITA Margin Profitability · FY26 · High confidence maintaining this year percentage
    in terms of EBITA we are basically maintaining this year percentage in the year 26.

    — V.K. Bansal

Capacity

  • Dahej Capacity Utilization Capacity · FY26 · High confidence 35%
    this year we are expecting to take it up to 35%.

    — Harsh Dhanuka

  • Dahej Capacity Utilization for Positive EBITDA Capacity · Long-term · High confidence 70% to 80%
    And for EBITDA margins to become positive, we need to reach about 70% to 80% of capacity utilization.

    — Harsh Dhanuka

New Product Launch

  • Paddy Herbicide Launch New Product Launch · May 2025 · High confidence this month
    So, we are going to launch our paddy herbicide this month itself

    — Rahul Dhanuka

  • Japanese Fungicide Launch New Product Launch · Q1 FY26 · High confidence next quarter
    and we are going to launch a Japanese fungicide from Nissan Chemicals in next quarter.

    — Rahul Dhanuka

Market context

  • Bayer Products Royalty/Economic Benefit Revenue · FY26 · High confidence ₹15-20 crores
    In this year we are expecting any things between 15 crore to 20 crore.

    — V.K. Bansal

What to watch in Q1 FY26

Dahej Plant Revenue & EBITDA

Next quarter (Q1 FY26) and FY26
Current ₹40 crores revenue, ₹-14 crores EBITDA (FY25)
Target ₹60 crores revenue, EBITDA 'in similar lines' (negative) (FY26)

Why it matters

Tracking the progress of the Dahej plant towards profitability and its contribution to overall revenue.

So Dahej performance last year was revenue of Rs.40 crores in FY'25 and for the coming year we are looking at a revenue of Rs.60 crores from Dahej and in terms of EBITDA last year was negative EBITDA of Rs.14 crores, and this year the EBITDA will be in the similar lines.

Risks & concerns

  • Raw Material Price Volatility

    medium

    Management expects a 100 bps hit to gross margin in FY26 as raw material prices stabilize/increase after a period of decline.

    Management acknowledged

  • Dahej Plant Profitability

    medium

    The Dahej plant is currently operating at a negative EBITDA (₹14 crores in FY25) and needs 70-80% utilization to break even, currently at 25% (expected 35% in FY26).

    Management acknowledged

  • International Market Performance

    low

    Analyst noted the international agri market is not doing well for other players, but management sees opportunity for Dhanuka with its new acquisitions and global expansion strategy.

    Analyst downplayed

Q&A highlights

8 direct
FY26 Revenue and EBITDA Guidance & Dahej Plant Performance Direct
So Dahej performance last year was revenue of Rs.40 crores in FY'25 and for the coming year we are looking at a revenue of Rs.60 crores from Dahej and in terms of EBITDA last year was negative EBITDA of Rs.14 crores, and this year the EBITDA will be in the similar lines. Sorry, with respect to your first question on the monsoon forecast being good, so both IMD and SKYNET have given a positive monsoon forecast at 105% of LPA, which means that the initial sentiment is quite positive for the growers to plant their fields. On the revenue this year, what we are planning is a higher double digit growth and on the EBITDA, we expected to remain on similar lines as this year.

Analyst sought forward guidance based on favorable monsoon and the company's new base. Management provided specific revenue and EBITDA targets for Dahej and overall, along with monsoon outlook.

Asked by Rohit Nagraj

B2B vs. Brand Sales Breakup & Dahej Plant Profitability Direct
So B2B sales in this year was close to about 9% of the total revenue and 91% was from the brand sales... So the current capacity utilization is close to 25% for the last year, and this year we are expecting to take it up to 35%. And for EBITDA margins to become positive, we need to reach about 70% to 80% of capacity utilization.

Clarified the contribution of B2B sales (9% of total revenue in FY25, up from 4% last year) and the current negative EBITDA status of the Dahej plant, along with the utilization needed for profitability.

Asked by Viraj

Margin Sustainability Drivers Direct
So the cost increase we will obviously pass on to the customer that has been our regular practice. The cost increase in raw material will be passed on to the customer. Then our past launches which are relatively in high value segment, constantly upgrading product portfolio and increasing the revenue from relatively high contribution products.

Analyst questioned how margins would be sustained given cost pressures and B2B operating losses. Management explained passing on raw material costs, product portfolio upgrades, and market outreach efforts.

Asked by Viraj

Bayer Acquisition - TAM, Incremental Revenue, and Royalty Direct
So, the total addressable market for both these molecules is close to $100 million US... In terms of revenue contribution from both products combined in this year we are looking at about Rs.110 crores, including India brand sales and international sales from both the products... In this year we are expecting any things between 15 crore to 20 crore.

Provided details on the acquired molecules' total addressable market (~$100M), expected revenue contribution (Rs. 110 crores in FY26), and royalty income (Rs. 15-20 crores in FY26).

Asked by Raman KV

Q4 Revenue Growth Drivers & Kharif Season Preparation Direct
This is also an aggressive sugarcane and maize acreage coming up in the Feb, March. Our significant attention and focus towards horticulture crops for which Feb, March, April is a very important month. Pulses crop, green gram acreages have gone up significantly in Uttar Pradesh, Madhya Pradesh, Rajasthan, which has become a new opportunity for various viricide and insecticides. Paddy acreages in South India, which was the Rabi crop, continued to consume in March, April so that remained an opportunity. So these were the large consumption opportunity. And yes, since there was an increasing price trend in last quarter, so I feel some of the partners were probably preparing for the good Kharif.

Clarified that Q4 growth was driven by aggressive sugarcane/maize acreage, horticulture, pulses, and South India Rabi paddy, with some partners preparing for Kharif.

Asked by Prashant Biyani

Bayer Business Margin Integration Direct
Currently, as we take over the business, the margins will be in-line with the existing however, there are opportunities over the next three years to optimize the cost as we take more control on the supply chain right now, the product is being formulated across three different geographies globally. So as we consolidate that and bring the production more to India side, over next three years, the EBITDA margins from that business can improve.

Discussed the initial margin profile of the Bayer business (in-line with existing) and the long-term potential for improvement through supply chain optimization and bringing production to India.

Asked by S Ramesh

B2C Margins and Product Portfolio Direct
So, we have a constant effort to upgrade our product portfolio. And every year we have introduced minimum 1 up to 293 products also very specialized and monopolistic products, is what we have introduced every year, because of which our product portfolio getting upgraded, the margin situation has also shifted forward, and so we will continue to introduce new products, powerful products, and be able to maintain the margin levels. And probably continue that way.

Management explained that continuous product portfolio upgrades with specialized and monopolistic products help maintain and improve margins, countering the natural decline in product life cycle.

Asked by Dhruv Muchhal

Trade Receivables Direct
Our channel and our team really align well, and I think so trade receivables are mostly in-line with what we were expecting in last quarter, and this will be coming down pretty sharply in 1st Quarter also, and in future quarters as well.

Analyst noted a significant increase in trade receivables. Management stated they are mostly in-line with expectations and will come down sharply in Q1.

Asked by Saini Vishay

2 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY25

Dhanuka Agritech achieved a milestone revenue of ₹2035.15 crores in FY25, marking a 15.73% increase year-on-year. EBITDA for the full year grew by 27.23% to ₹416.61 crores, with the EBITDA margin expanding by 180 basis points to 20.47%. Profit after tax also saw robust growth of 24.2% to ₹296.96 crores, resulting in a PAT margin improvement of 99 basis points to 14.59%. For Q4 FY25, revenue from operations was ₹442.02 crores, up 20.01% YoY, and EBITDA was ₹1095.75 crores, up 37.03% YoY, with a margin of 24.83%.

Strategic Global Expansion with Bayer Acquisition

The company acquired international rights for two key fungicide molecules, iprovalicarb and triadimenol, from Bayer AG, Germany. This strategic move provides Dhanuka Agritech with a presence in over 20 countries across Latin America, Europe, Asia, and Africa. The total addressable market for these molecules is estimated at ~$100 million US. These products are projected to contribute approximately ₹110 crores in revenue and ₹15-20 crores in royalty/economic benefit in FY26, building on the ₹12 crores received in Q4 FY25.

Dahej Plant Performance and Path to Profitability

The Dahej manufacturing unit generated ₹40 crores in revenue in FY25 but incurred a negative EBITDA of ₹14 crores. For FY26, revenue is projected to increase to ₹60 crores, though EBITDA is expected to remain negative. Management indicated that the plant's capacity utilization, currently at 25% (expected to rise to 35% in FY26), needs to reach 70-80% to achieve positive EBITDA, highlighting the ongoing efforts to scale operations.

Product Portfolio and Market Strategy

Dhanuka Agritech's Q4 FY25 product mix was 38% insecticides, 32% herbicides, 13% fungicides, and 17% others. B2B sales constituted about 9% of total revenue in FY25, a significant increase from 4% last year, driven by a strategic focus on building channels for future products from Dahej. The company plans to introduce new products, including a paddy herbicide this month and a Japanese fungicide next quarter, to continuously upgrade its portfolio and drive growth.

Monsoon Outlook and Raw Material Headwinds

The company anticipates a positive monsoon forecast (105% of LPA) for the upcoming Kharif season, which is expected to support higher double-digit revenue growth in FY26. However, management foresees a 100 basis point hit to gross margins in FY26 due to the stabilization and potential increase in raw material prices, following a period of continuous decline. This indicates a focus on cost pass-through and product mix to mitigate margin pressure.

Shareholder Returns and Liquidity Management

The Board recommended a 100% dividend of ₹2 per equity share for FY25, absorbing ₹9.02 crores. This follows a buyback of 5 lakh shares at ₹2000 per share conducted in Q2 FY25. Management affirmed a 'healthy' cash position, which is expected to continue building up, supporting future growth initiatives and consistent shareholder returns without specific numerical disclosures on cash balances.

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