Dhanuka Agritech Maintains Revenue Growth Forecast Despite Weak First Quarter
Dhanuka Agritech sticks to guidance of 12-15% revenue growth in this financial year.
Dhanuka Agritech Ltd.’s revenue and net profit fell for the quarter ended June as destocking ahead of the rollout of the Goods and Services Tax impacted its shipments.
The agro-chemical maker’s net profit fell 19 percent year-on-year, the company said in a stock exchange filing.
Revenue slipped 2.2 percebt in the June ended quarter due uneven distribution of rainfall so far this year, Managing Director MK Dhanuka told BloombergQuint on the sidelines of Emkay’s annual investor conference or the Emkay-DBS Confluence. The company has, however, left its guidance of a 12-15 percent revenue growth for the financial year 2017-18 unchanged given the forecast of normal monsoons.
Here are edited excerpts from the conversation.
Revenue saw a decline of 2 percent year-on-year in the first quarter against the company’s guidance of 15 percent growth for the year to March 2018. Any revisions?
The guidance of 15 percent was given on the back of the forecast of a normal monsoon. The government talks about normal monsoon, but the distribution has not been proper. Maharashtra and south India have been rain deficit. Also, lower growth was seen in the first quarter due to GST implementation as dealers were reluctant to buy molecules. Now it is streamlined and I hope things will change. The company will maintain the guidance of 12 percent to 15 percent growth in the current financial year.
What is the segment-wise revenue breakup of your agri-business?
Revenue from Insecticides accounted for 48 percent in the June quarter, while herbicides was 28 percent. Fungicides contributed 12 percent to the total revenue.
How has the monsoon season panned out and what is your outlook for the second quarter?
Unfortunately, the distribution of rainfall has not been as expected. There were flood-like situations in Uttar Pradesh, Bihar and Bengal, while south Indian states like Telangana, Andhra Pradesh, Tamil Nadu and Karnataka received lesser rainfall. Recently, the rainfall has increased in these regions and we hope to deliver the growth, forecast earlier, in the coming quarters.
The government has imposed few guidelines on imports for all pesticides companies. What is your view on this?
The government has imposed restrictions on imports which will create a shortage and lead to price rise. For the benefit of Indian farming community, the government should re-think its decision so that farmers can get pesticides smoothly at right prices.
Are there any new products in the pipeline?
We already have launched a few molecules, and will introduce one more in the rabi season.
What are the company’s expansion plans?
We plan to spend between Rs 8 crore and Rs 10 crore on capital expenditure this fiscal.