DHANUKA AGRITECH - Q1 FY 21 RESULTS REVIEW

DHANUKA AGRITECH

Q1 FY 21 RESULTS REVIEW

COMPANY OVERVIEW

Management   

          

Ram Gopal Agarwal                  Chairman     

Mahendra Kumar Dhanuka        Managing Director      

Harsh Dhanuka                         Whole Time Director  

Arun Kumar Dhanuka                Executive Director      

Rahul Dhanuka                         Executive Director

Mridul Dhanuka                        Executive Director      

As we can see, the top management is mostly in the hands of the Dhanuka family members.

Dhanuka Agritech is the umbrella company for the business of agro-chemicals, fertilizers, and seeds of Dhanuka Group.

The product range of the company includes:

Weedicides, 3 D products i.e. Dhanuvit is the new 3D product of the company other 3 D products are Dhanzyme Granules and Dhanzyme Liquid.

Super Star Products- Targa Super is the new Super Star Product of the company.

Herbicides- Craze is the herbicides offering of the company. The company has been promoting seed treatment by operating seed treatment and grading machines at the doorstep of the farmers to bring about awareness regarding the benefits of seed treatment. The company gives them the added benefit of superior grading of the seeds with automatic machines in a single process

Q1 RESULTS REVIEW :

DHANUKA AGRI	Q1FY21	Q4FTY20	Q1FY20	YOY	QOQ
TOTAL REVENUE	381.21	236.25	222.74	71.15	61.36
REVENUE	373.85	227.57	218.98	70.72	64.28
TOTAL EXP	311.99	185.93	202.02	54.44	67.8
PBT	69.22	50.32	20.73	233.91	37.56
NET PROFIT	51.79	39	14.68	252.79	32.79
EPS	10.89	8.2	3.08	253.57	32.8
EQUITY	9.5157
FV	RS.2
MP	877
PE	20.13
52 Wk L/H	261	935

Last 5 years annual results indicate that Sales growth has been very gradual and net profit Growth is Negligible. 

ANNUAL REPORT 2018-19

Fnancial year 2018-2019 was an exceptional year due to closure of 1000 of units in China, the prices of raw material has increased disproportionately, which company could not pass to the farmers completely. 

This has not only impacted the sales growth plans of the company but has also impacted the profitability. 

Now IMD has forecasted a normal monsoon for this year. Dhanuka hopes to deliver much better performance during fnancial year 2019-2020.

During Financial Year 2018-19, the Company has completed buyback of 15 lakhs equity shares of the company at the rate of Rs. 550 each comprising of the total buyback size 82.50 Crores. The Broad of Directors has declared dividend at the rate of 30% i.e 60 paisa per equity share of Rs.2 each for Financial Year 2018-19.

SWOT ANALYSIS

• high TTM EPS Growth
• Growth in Net Profit and Profit Margin (QoQ & YoY)
• Low Debt
• Improving Book Value
• FII / FPI /Institutions increasing their shareholding
• Strong Price Momentum

Past price comparison

PRICE RISE	1 YR BEFORE	Current Price	%Gain / Loss
Open Price	403.5	834	106.69
High Price	407.1	895	119.85
Volume	1,250	27,871	2129.68
	3 Months BEFORE	Current Price	%Gain / Loss
Open Price	445	834	87.42
High Price	471.95	895	89.64
	3 Y BEFORE	Current Price	%Gain / Loss
Open Price	822.55	834	1.39
High Price	825	895	8.48
Share Holding Pattern in (%)
Standalone	Jun-20	Mar-20	Sep-19	Jun-19
Promoters	75	75	75	75
Pledged	14	14	3.39	0
FII/FPI	0	0	0	0
Total DII	16.44	15.64	15.11	15.31
Fin.Insts	0.02	0.01	0.02	0.01
Insurance Co	0	0	0.04	0
MF	12.83	12.4	11.92	11.73
Others DIIs	3.59	3.23	3.13	3.57
Others	8.56	9.36	9.89	9.7
Total	100	100	100	100.01

Valuation

        Market Cap (Rs Cr.)        4,003.72

        P/E                                   28.26

        Book Value (Rs)                148.74

        Dividend (%)                    600.00

        Industry P/E                     43.65

        EPS (TTM)                        29.73

        Price/Book                        5.66

        Dividend Yield.(%)           1.43

        Face Value (RS)                2.00

       

Dhanuka Agritech has three manufacturing facilities in Rajasthan, Gujarat and J&K.

According to one broker, Dhanuka's asset light business model, superior return ratios and the recent product launches are expected to drive growth.

Dhanuka is expected to navigate through the pandemic with the help of a normal monsoon, strong distribution and product brand re-call. 

Dhanuka Agritech reported a healthy performance in Q4FY20 with profit rising 45.8 percent to Rs 39 crore, revenue up 18.1 percent to Rs 227.6 crore and EBITDA surging 38.6 percent to Rs 45.8 crore compared to same quarter last year.

"Since Dhanuka's fortunes are entirely dependent on domestic agrochemical industry (with underlying tailwinds for the sector) earnings growth has a potential to surprise on the upside," said one brokerage which feels earnings growth is expected to accelerate driven by robust demand for Herbicides, traction in North & South India along with 5 new launches in FY21.

"Removal of weeds on certain crops like rice is very labour intensive and with lower labour availability, herbicide sales is seeing strong demand. Very severe locust outbreak is also leading to sharp demand surge for insecticides," the brokerage said.

The management is hopeful of gross margin expansion in FY21. The company is secured in terms of availability of products for the next 2-3 months.

In full financial year 2019-20, Dhanuka Agritech reported a 25.7 percent growth in profit at Rs 141.5 crore and 11.4 percent increase in revenue at Rs 1,120.1 crore compared to previous year. Volume growth was 12.7 percent in FY20.

What Dhanuka says about itself :

Dhanuka Agritech Limited is one of India’s leading agro-chemical Company and is listed by Forbes Magazine in the category of “200 Best under A Billion Companies in Asia Pacific”. 

We have been awarded Company of the Year (Agro Chemical Category) by Federation of Indian Chambers of Commerce and Industry (FICCI) in 10th Biennial International Exhibition and Conference –India Chem 2018 and has bestowed with many awards and recognitions from to time.

The Company has recently been recognized as “Great Place to Work for the year 2018-19”. 

We have PAN-India presence through our marketing offices in all major states across India. 

The 3 manufacturing units with 40 warehouses and network of over 14 branch offices across the Indian geography caters to 7200 Distributors & around 75, 000 Dealers.

Dhanuka’s workforce with more than 1000 techno–commercial staff, supported by a strong R&D division and a robust distribution network helps Dhanuka to reach out to approximately 10 million Indian farmers with its products and services. 

Dhanuka’s R&D division has world class NABL Accredited Laboratories and has International collaboration with the world’s seven leading agro-chemical Companies from US, Japan and Europe which helps them to introduce the latest technology in Indian farmlands.

    7k distributors

    75k  retailers

    10m farmers

SANAND (GUJARAT):Second largest capacity for manufacturing granules in India. It has land area of 62,700 square meters with largest dedicated Cartap Hydrochloride SP formulation facility. 

Udhampur (j&K)

State of-the-art production line. 12 filling lines dedicated to liquids like EC, SC & SL. Online monitoring of quality conforming to the highest standards. Two separate lines for powder formulations & zero water discharge facility.

 

Keswana (Rajasthan)

Dhanuka has commissioned its new plant at Keshwana in Rajasthan which have one of the largest liquid formulation facilities in India at its full capacity.

A new APP of Dhanuka, can be downloaded from Google Play store with name of Dhanuka FL App. The goal with this new app is to provide our team an easier way to complete the sales process & also allow the user to have a crisp overview of his data. 

The application is a one stop shop for a quick overview of essential data. Our current users & customers find the app & data very useful. We are constantly updating our application to provide the user with unmatched experience.