Dhanuka Agritech - Q1 May Be Subdued; All Hopes Pinned On Monsoons: Prabhudas Lilladher

Prabhudas Lilladher Report

We interacted with senior management of Dhanuka Agritech Ltd. to take an update on the business and outlook, going forward. Key highlights are-

1. delayed start of monsoons have kept ground sentiments lower;

2. weak rainfall in first 20 days (down 8% YoY on a pan India basis); however major deficiency witnessed in key agricultural belts of central, western and Southern India;

3. Q1 FY23 revenue growth for industry likely to be subdued (low double digit growth on a lower base of last year);

4. have taken price hikes of 3-4% across portfolio to pass on inflated cost;

5. raw material prices remained stable, led by lower demand in domestic market;

6. green-field project in Dahej remains well on track.

Dhanuka Agritech sounded cautious on its Q1 performance, led by erratic monsoons. We believe that next few weeks would be crucial for the industry in terms of H1 FY23 performance (contributing ~60% of the annual revenues).

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