Dhanuka Agritech Says Third Quarter One Of The Best In Five Years

Dhanuka Agritech Ltd. expects its overall sales to grow at the fastest pace in five years in the quarter ended December, led by a rise in herbicide sales and new specialty product launches.

“Last quarter (Dec.-end) was one of the best quarters in last five years,” MK Dhanuka, managing director at the agrochemical maker, told BloombergQuint in an interview. “Strong rabi crop due to extended monsoon and spillover of demand from the second quarter [due to weaker kharif season] to lead to more than 20 percent growth. [We] expect the momentum to continue into the fourth quarter,” he said.

The company launched three products—Chempa (controls broad leaf and grassy weeds), Apply (controls brown plant hopper) and Largo (controls pests of cotton crops)—in the specialty segment during the kharif season, Dhanuka said. All the three molecules, according to him, have been received well and have started contributing “meaningful” to the company’s top and bottom line.

The company’s focus on improving the product mix by way of new launches and easing input cost pressure is also likely to aid margin. “We expect margins to start improving from third quarter and maintain our full-year guidance of 100-basis-points (1 percent) improvement in margins over the last financial year,” Dhanuka said. The agrochemical maker’s margin had hit a six-year low of 14.5 percent in 2018-19.