Dhanuka Agritech Limited — Q4 FY26 earnings call

Call held 19 May 2026

Management summary

Dhanuka Agritech reported resilient Q4 FY26 results with a 9.35% YoY revenue growth to ₹483.34 crores and a significant PAT increase to ₹97.77 crores, bolstered by a GST refund. The company announced a 100% dividend and a ₹70 crore share buyback, alongside an ESOP scheme. However, the agrochemical sector faces headwinds from weather and market conditions, and the company expects a 100 bps EBITDA margin decline in FY27 due to the absence of GST refunds.

Highlights

  • Revenue from operations for Q4 FY26 stood at ₹483.34 crores, registering a growth of approximately 9.35% YoY.

  • Profit after tax for Q4 FY26 was ₹97.77 crores, compared to ₹75.50 crores in Q4 FY25, reflecting healthy profitability improvement.

  • EBITDA for Q4 FY26 was ₹124.89 crores, up from ₹109.75 crores in Q4 FY25, with margin expanding by 101 bps to 25.84%.

  • The Board recommended a dividend of 100% (₹2 per equity share) and approved a share buyback of up to ₹70 crores at a maximum price of ₹1,400 per share.

  • An Employee Stock Option Plan (ESOP) scheme was introduced to enhance long-term alignment and support growth.

Concerns

  • The broader operating environment remained challenging for the agrochemical industry due to erratic weather, weak channel liquidity, and global volatility.

  • The Dahej unit reported a loss of ₹13 crores for the full FY26.

  • An anticipated 100 bps decline in EBITDA margin for FY27 is expected due to the loss of GST refund benefits and reduced net economic benefit.

  • Challenges persist in international market expansion, particularly at the distributor level regarding volume and pricing.

Key financials

2 periods

Headline

  • Revenue
    ₹483.34 Cr
    YoY +9.3%
  • EBITDA
    ₹124.89 Cr
  • PAT
    ₹97.77 Cr
  • EBITDA Margin
    25.8%

FY26

  • GST Refund
    ₹29 Cr
  • Dahej EBITDA Loss
    ₹13 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 Contribution (Q4 FY26)
    32% North12% East23% West33% South
  • Product Category-wise Contribution (Q4 FY26)
    41% Insecticide14% Fungicide31% Herbicide14% Others

Capital allocation

high confidence
  • Dividend ₹2/share (final)
    The Board of Directors has recommended a dividend of 100% i.e. Rs. 2 per equity share with a face value of Rs. 2 each. The proposed dividend will absorb approximately Rs. 9.02 crores and is subject to shareholders' approval at the 41st Annual General Meeting scheduled on 3rd August 2026.
  • Buyback ₹70 Cr Max ₹1,400/share
    Further, the Board has also approved a proposal for buyback of up to Rs. 5 lakh equity share for an aggregate amount not exceeding Rs. 70 crores at a maximum buyback price of Rs. 1,400 per equity share.
  • M&A Spanish company (biological products) Joint venture · Abandoned

    Red flags in the MoU led to calling off the alliance.

    The alliance that we were trying with the Spanish company, we called it off. We signed an MoU with them, but subsequently we called it off. And I think so by now that Spanish company has probably changed hands as well. So, we had some red flags in the MoU and we didn't want to pursue it.

Guidance & targets

Revenue

  • Overall Revenue Growth Revenue · FY27 · Medium confidence low double digits
    So, if you add these two itself, we would easily, maybe very comfortably achieve our guidance of low double digits.

    — Management

  • Bayer Products (Melody Duo India Sales) Revenue · FY27 · High confidence double FY26 sales
    26 we recognized on the India sales Melody Duo, right? It would be something around Rs. 27 crore. And in the year '26-'27, it is almost double of that.

    — Management

  • Bayer Products (Melody Duo India Sales) Revenue · FY28 · High confidence ₹200 crores
    200. '27-'28 will be 200.

    — Management

  • Dahej Revenue Revenue · FY27 · Medium confidence ₹75 crores

    Previously ₹100 crores → ₹75 crores

    And this year we are forecasting a revenue of Rs. 75 crores, lower than our earlier estimate of Rs. 100 crores. Looking at the current scenario, we have downgraded that forecast.

    — Management

  • Biostimulant Portfolio Revenue Revenue · FY27 · High confidence more than ₹130 crores
    We are expecting a revenue of more than Rs. 130 crores.

    — Management

Profitability

  • EBITDA Margin Profitability · FY27 · High confidence 100 bps decline
    You see, decline in EBITDA margin is only because of the decline in the gross margin. Absolutely. That is only because of the GST refund and some decline in the net economic benefit.

    — Management

  • Gross Margins Profitability · FY27 · High confidence maintain 25-26%
    So, we are saying in net-net, we will be able to maintain the 25-26 gross margins. We will get the advantage, of course, in some inventory, but at the same time, we will lose some margin on account of the high cost inventory when the cost component will pass in the phase manner, not immediately.

    — Management

Product Mix

  • 9-3 Products Revenue Contribution Product Mix · Ongoing · High confidence maintain 25-26%
    So, we are on a growing base, you are saying that we will continue to maintain this at 25% to 26%. Yes, absolutely.

    — Management

Pricing

  • Input Price Increase Pass-through (Q1) Pricing · Q1 FY27 · High confidence around 2%
    You see, Q1, overall price increase may be in the range of around 2%.

    — Management

  • Input Price Increase Pass-through (Q2) Pricing · Q2 FY27 · High confidence around 3-4%
    Which means we have to take a higher price hike in Q2, maybe around 5% to 6%. Around 3% to 4%, yes. That is right.

    — Management

What to watch in Q1 FY27

Bayer Product Revenue Growth (FY27)

FY27
Current ₹27 crores (FY26 India sales Melody Duo)
Target Double FY26 sales (approx. ₹54 crores)

Why it matters

To assess the ramp-up and contribution of newly acquired products to overall revenue growth.

26 we recognized on the India sales Melody Duo, right? It would be something around Rs. 27 crore. And in the year '26-'27, it is almost double of that.

Risks & concerns

  • Challenging Agrochemical Industry Operating Environment

    medium

    Erratic weather patterns, uneven crop economics, weak channel liquidity, global volatility, geopolitical tensions, trade disruption, and supply chain uncertainties impacting the sector.

    Management acknowledged

  • Loss of GST Refund Benefit for FY27

    medium

    The significant GST refund received in FY26 will not be available in FY27, contributing to an expected 100 bps decline in EBITDA margin.

    Management acknowledged

  • Raw Material Price Inflation and Pass-through Challenges

    medium

    Overall input prices have increased by 5-7%, and while the company aims to pass this on, there is initial difficulty, with only 2% expected in Q1 and another 3-4% in Q2.

    Management acknowledged

  • Challenges in International Market Expansion

    medium

    Difficulties in finding the right distribution channels, appointing distributors, securing regulatory approvals, and maintaining desired price levels in new overseas markets.

    Management acknowledged

  • Biostimulant Market Volatility

    low

    The biostimulant market dropped significantly last year due to new regulations, though it is now gradually recovering.

    Management acknowledged

Q&A highlights

8 direct
EBITDA Margin Expansion and GST Refund Direct
You see, one with regard to the EBITDA highest margin, this is largely because of the GST refund. You see, in Udhampur unit, the GST refund year was last year, March 26 only. So, you see, the refund has increased significantly in the Q4 of this financial year, because of which the EBITDA is highest in this quarter.

Clarified the primary driver behind the record EBITDA margin, indicating it was largely due to a one-time GST refund rather than core operational improvements.

Asked by Viraj

Dahej Unit Sales and Profitability Direct
Dahej sales on yearly basis, it was actually Rs. 50 crore as against Rs. 41 crore the previous year. In terms of the Q4, it was Rs. 8 crore versus Rs. 15 crore. ... Dahej EBITDA loss as against last year, Rs. 14 crore. This year was Rs. 13 crore loss on a whole year basis in Dahej.

Provided specific financial performance details for the Dahej unit, showing sales growth but continued losses, which is a drag on overall profitability.

Asked by Viraj

Bayer Product Revenue Recognition and Future Targets Direct
26 we recognized on the India sales Melody Duo, right? It would be something around Rs. 27 crore. And in the year '26-'27, it is almost double of that. ... '27-'28 will be 200.

Outlined the current and projected revenue contribution from the acquired Bayer products, indicating significant growth expectations for the coming years.

Asked by Viraj

Rationale for Buyback Price Direct
Actually the buyback price is around 25% higher in comparison to the market prices. The last year when we did the buyback at Rs. 2,000, at that time the market prices were around Rs. 1,700. So we did the buyback at Rs. 2,000. This year the market prices were Rs. 1,100 approximately when we decided to buyback at Rs. 1,400. So, Rs. 1,300 benefit is basically around 25% higher in comparison to the market prices.

Explained the company's consistent approach to buyback pricing, offering a premium over prevailing market prices to benefit shareholders.

Asked by Viraj

Raw Material Availability and Price Pass-through Direct
availability of material from outside is not a challenge at all. Most of our imports come from the East, either Japan or China. So, there has been no concern around the availability. ... overall, in terms of raw material inflation, we are seeing close to about maybe 5%-7%. And the similar kind of increase will be passed on in terms of the product prices. ... You see, Q1, overall price increase may be in the range of around 2%. Which means we have to take a higher price hike in Q2, maybe around 5% to 6%. Around 3% to 4%, yes. That is right.

Addressed concerns about supply chain stability and the company's strategy for managing and passing on raw material price inflation over the next two quarters.

Asked by Rohit Nagraj

Kharif Season Demand Trends and Herbicide Consumption Direct
Herbicide consumption has not really started much. Yet, sugarcane was an important crop for this quarter when the herbicide consumption has started, especially in North India, and has been good. ... As of now, it was a mixed approach in April and so far in May. ... The rainfall forecast for the month of June is pretty good. Oilseed pulses acreages are expected to be pretty high. So with that and our strong and robust weedicide portfolio, we are pretty hopeful that Q1, especially the month of June, is going to be really exciting.

Provided an early outlook on the Kharif season, highlighting mixed demand signals but optimism for Q1 driven by weather forecasts and product portfolio strength.

Asked by Prashant Biyani

Challenges in International Business Expansion Direct
So, at distributor level, the challenges are around delivering the volume and the price matrix which we want the distributors to achieve. So, either they are not able to commit the volumes for that market or not able to maintain the price levels which are currently prevailing in these markets. So, they are looking for selling the products at lower prices which is not workable.

Highlighted the specific difficulties faced in expanding into overseas markets, particularly concerning distributor commitment to volumes and maintaining pricing discipline.

Asked by Prashant Biyani

Changes in Other Expenses and Other Income Direct
Yes. In Q4, there is a significant decline in the other expenses and on yearly basis, this margin of only 3% is mainly because of the Q4. ... But one major reduction on account of our field promotion support from our principals, that has increased significantly and our Dhanuka doctor expenses, there is a significant improvement in this year because of which this improvement is appearing in the Q4. ... Other income, basically last year, there was a provision in one investment which was made in the drone company. ... This year, there was no provisioning. Rather, we have made one investment in KisanKonnect. There is an appreciation of around Rs. 3 crores in the valuation because of which the appreciation has increased, increase has happened in the other income.

Explained the drivers behind the notable changes in other expenses (cost control, reduced field promotion support) and other income (absence of prior year's provision and appreciation in KisanKonnect investment).

Asked by Abhigyan Srivastav

3 min read 7 chapters

Detailed narrative

Q4 FY26 Financial Performance Overview

Dhanuka Agritech delivered resilient operational and financial performance in Q4 FY26. Revenue from operations stood at ₹483.34 crores, marking a growth of approximately 9.35% compared to ₹442.02 crores in Q4 FY25. Profit after tax significantly improved to ₹97.77 crores from ₹75.50 crores in the corresponding quarter of the previous year, reflecting healthy profitability driven by product mix and cost management. EBITDA for the quarter was ₹124.89 crores, with an EBITDA margin of 25.84%.

Shareholder Returns and Employee Incentives

The Board of Directors recommended a 100% dividend, equivalent to ₹2 per equity share, which will absorb approximately ₹9.02 crores. A share buyback proposal was also approved for up to ₹70 crores, at a maximum price of ₹1,400 per share, demonstrating confidence in the company's long-term value. Additionally, an Employee Stock Option Plan (ESOP) scheme was introduced to foster an entrepreneurial mindset and align employee interests with the company's growth.

Challenging Operating Environment and Outlook

The agrochemical industry faced a challenging operating environment in Q4 FY26, characterized by erratic weather patterns, uneven crop economics, weak channel liquidity, and global supply chain uncertainties. The Rabi season was particularly impacted by unfavorable climatic conditions. Despite these near-term headwinds, management remains constructive on the medium-to-long-term structural growth opportunities for Indian agriculture and crop production.

Impact of GST Refund on Margins

The significant expansion in EBITDA margin during Q4 FY26 was largely attributed to a GST refund of ₹14.5 crores in the quarter, contributing to a total of ₹29 crores for the full FY26. For FY27, the company anticipates a 100 bps decline in EBITDA margin due to the absence of this GST refund benefit and some reduction in net economic benefit. However, management expects to maintain gross margins at 25-26% for the upcoming financial year.

New Product Performance and Dahej Unit Update

The acquired Bayer products, Triadimenol and Iprovalicarb, are seeing continued commercialization, with Melody Duo (India sales) contributing ₹27 crores in FY26. The company expects this to double in FY27 and reach ₹200 crores by FY28. The Dahej manufacturing unit recorded sales of ₹50 crores in FY26 (up from ₹41 crores in FY25) but incurred a loss of ₹13 crores. The biostimulant portfolio, which saw revenue decline to ₹70 crores in FY26 from ₹110 crores in FY25 due to regulatory changes, is targeted to exceed ₹130 crores in FY27 with new product launches.

Kharif Season Outlook & Input Cost Management

Management expressed optimism for the upcoming Kharif season, particularly Q1 FY27, citing good rainfall forecasts and a strong weedicide portfolio. Overall input prices have increased by 5-7% due to global volatility. The company expects to pass on approximately 2% of this increase in Q1 and an additional 3-4% in Q2, leveraging its carryover inventory to mitigate the immediate impact of rising costs.

International Expansion and Alliance Status

Dhanuka Agritech is actively pursuing international expansion, having appointed customers in five countries and in advanced discussions with ten more. However, challenges persist at the distributor level in overseas markets, primarily related to achieving desired sales volumes and maintaining pricing. The previously announced alliance with a Spanish company for biological products was called off due to identified 'red flags' in the Memorandum of Understanding.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Chemicals earnings calls