Release Date: February 03, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dhanuka Agritech Ltd (BOM:507717, Financial) reported a 10.4% increase in revenue for Q3 FY25 compared to the previous year, reaching INR445.27 crores.
- EBITDA for Q3 FY25 increased by 21.55% to INR75.56 crores, indicating improved operational efficiency.
- Profit after tax rose by 21.33% to INR55.04 crores, showcasing strong bottom-line growth.
- The company successfully launched new products, LaNevo and MYCORe Super, which were well-received by farmers.
- Dhanuka Agritech Ltd acquired international rights to active ingredients from Bayer AG, expanding its global footprint and product portfolio.
Negative Points
- Sales of key fungicides were lower due to reduced disease appearance in crops like potato, grapes, and chilli.
- The company faced challenges with carryover inventory from the previous season, affecting commodity prices and sales space.
- The Dahej manufacturing facility reported an EBITDA loss of INR4.25 crore in Q3, indicating underutilization.
- Global registration processes for new products are time-consuming, posing a challenge for international expansion.
- The company anticipates difficulty in maintaining the current high gross margins in FY26 due to market conditions.
Q & A Highlights
Q: Can you explain the strategy behind not acquiring the brand name for triadimenol despite its significant market share?
A: Rahul Dhanuka, Joint Managing Director: The brand names associated with triadimenol were part of a series of products with Bayer's branding, which could not be transferred to Dhanuka. Hence, we did not acquire those brand names.
Q: What challenges do you foresee in expanding your business model internationally, and how do you plan to overcome them?
A: Rahul Dhanuka, Joint Managing Director: The main challenge is the time-consuming global registration process. We are building a specialist team for international business and plan to expand our product basket through organic or inorganic means.
Q: How do you see the impact of US tariffs on your business, and what opportunities might arise from this?
A: Rahul Dhanuka, Joint Managing Director: The impact of tariffs will take time to manifest. However, the China plus one strategy seems favorable for Indian growth, potentially benefiting the Indian chemical industry and our business.
Q: What is the expected revenue contribution from the Dahej manufacturing facility in FY26?
A: Unidentified Company Representative: We anticipate revenue of INR60 crores to INR70 crores, primarily from bifenthrin, with efforts focused on domestic sales and international registrations.
Q: How do you plan to achieve the projected 10-15% growth for the newly acquired Bayer products?
A: Rahul Dhanuka, Joint Managing Director: We will focus on marketing campaigns to revive volumes, introduce new registrations, and enhance marketing efforts to increase product growth and market share.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
