Summary
Dhanuka Agritech Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 05, 2026, 4:00 PM IST
Event Participants
Executives 4 Harsh Dhanuka (Executive Director), Jitin Sadana (Company Secretary), M. K. Dhanuka (Chairman), Rahul Dhanuka (Managing Director), V. K. Bansal (CFO)
Analysts 8 Amit Khetan, Archit Joshi, Ketan Chawla, Parth Mehta, Prashant Biyani, Rajat Setiya, Riju Dalui, Rohit Nagraj, Saurabh Jain
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹409.92 crores | -7.94% YoY; Impacted by weak demand in South/West India and lower farm incomes. |
| EBITDA | ₹58.66 crores | -22.37% YoY; Draged down by lower volumes and negative EBITDA contribution from Dahej. |
| Profit After Tax (PAT) | ₹40.00 crores | -27.33% YoY; Reflects operational deleverage and higher inventory carrying costs. |
| EBITDA Margin | 14.31% | -266 bps YoY; Management targets a 100-110 bps decline for the full FY26. |
| Cash & Liquid Investments | >₹250 crores | Stable liquidity maintained despite challenging demand environment. |
| Technical Sales | ₹50 crores | Representative of 9-month performance; Q3 contribution was minimal at ₹3-4 crores. |
| Net Economic Benefit (NEB) | ₹6 crores | Income from Bayer molecules (Q3); 9-month total stands at ₹19.5 crores. |
| Sales Returns | ₹72 crores | Slightly lower than ₹74 crores YoY; Indicates stable channel inventory management. |
Geographic & Segment Commentary
- North & East India: Performance remained stable during the quarter despite broader industry headwinds. Wheat herbicide consumption in the North extended from late Q3 into early Q4, supporting stability.
- South & West India: Saw sharp demand declines due to extended rainfall and weak commodity realizations, particularly affecting high-value segments like Chilli.
- Product Segments: Herbicides led the mix at 37%, followed by Insecticides (28%), Fungicides (21%), and Others (14%). Biostimulant sales were impacted by regulatory shifts, causing a ₹49 crore loss in 9-month revenue.
Company-Specific & Strategic Commentary
- Dahej Plant Progress: Commercialized a second product (Difenoconazole) in Q3; management targets EBITDA positivity in FY27 and 80% capacity utilization.
- Bayer Molecule Integration: Revenue of ₹25-27 crores reported from Bayer molecules in India. Transition of export registrations is underway, with direct revenue recognition expected to begin in Q1 FY27.
- Biostimulant Regulation: The company is awaiting approvals for 3 out of 4 major biostimulant products under the new regulatory regime, expecting a re-launch by Q1 FY27.
- Technical Manufacturing Expansion: Finalizing business plans for MPP-2 with an estimated CAPEX of ₹60-70 crores to support technical synthesis and international expansion.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | Flattish for FY26 | Management expects Q4 growth to offset H2 declines, resulting in flat YoY performance. |
| Long-term Growth | Double-digit CAGR | Based on new product launches, technical manufacturing, and export expansion. |
| Gross Margin | ~38% (Sustainable) | Normalization expected as Net Economic Benefits (NEB) phase out and technical prices stabilize. |
| Dahej Operations | EBITDA Positive by FY27 | Driven by 80% utilization and addition of Iprovalicarb production. |
Risks & Constraints
| Risk | Context |
|---|---|
| Farm Income & Demand | Lower crop prices have reduced farmer investment capacity in crop protection, particularly in high-value horticulture. |
| Regulatory Delays | Delays in biostimulant approvals or Pesticide Management Bill execution could impact the timeline for product re-introductions. |
| Supply Chain (Bayer) | The transition of manufacturing from Europe to India carries risks of temporary supply disruptions during the registration transfer. |
| Weather Vagaries | Potential El Niño impacts remain a watch-point for the upcoming Kharif season, though early forecasts are inconclusive. |
Q&A Highlights
Demand & Recovery
- Question: How is the current demand scenario for Q4 and the upcoming Kharif? (Prashant Biyani)
- Answer: Q4 started well in January with strong demand in South/East Indian paddy and wheat herbicides. Kharif plans will be firmed up after weather forecasts in late March. (Management)
Bayer Molecule Acquisition
- Question: When will the net economic benefit end and direct sales start? (Prashant Biyani/Riju Dalui)
- Answer: NEB will decrease in FY27 and likely cease in FY28 as Dhanuka takes full control. Export sales under Dhanuka’s book are expected to begin Q1 FY27. (M. K. Dhanuka)
Manufacturing & Dahej
- Question: Why was Dahej revenue low this quarter despite the second product launch? (Viraj Kacharia)
- Answer: Q3 is an off-season for Bifenthrin and Difenoconazole; production for the latter was delayed to Nov/Dec but is now fully online for Q4. (Management)
Regulatory Environment
- Question: What is the impact of the Draft Pesticide Management Bill? (Archit Joshi)
- Answer: It is viewed as positive for organized players like Dhanuka as it introduces punitive measures against spurious/fake products, though execution depends on state-level cooperation. (Management)
New Product Pipeline
- Question: What are the launch plans for FY27? (Rohit Nagraj)
- Answer: Three launches planned: two 9(3) fungicides for grapes, potato, and tomato, and one specialty spray enhancer for tomato. (Management)
Key Takeaway
Dhanuka Agritech reported a challenging Q3 FY26 with a 7.9% revenue decline and 27% PAT drop, primarily due to weak demand in South/West India and regulatory hurdles in the biostimulant segment. Despite these setbacks, the company maintained a strong balance sheet with over ₹250 crores in cash and transitioned toward technical manufacturing at its Dahej facility. Strategic focus remains on the integration of acquired Bayer molecules, which contributed ₹19.5 crores in economic benefits year-to-date, and the expansion of the 9(3) product pipeline. Management expressed confidence that the “bad phase” has peaked, guiding for a flattish FY26 followed by a return to double-digit growth in FY27. The outlook remains contingent on the timely approval of biostimulants and the successful transition of global registrations for the newly acquired chemistry portfolio.
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