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Gurugram-based agrochemicals and pesticides manufacturer Dhanuka Agritech expects demand to improve as the monsoon progresses across the country, even as dealers remain cautious about purchases following recent price increases.
Chairman MK Dhanuka believes the India Meteorological Department's forecast of rainfall at 92% of the long-period average is unlikely to significantly affect the agriculture sector. He sees inventory currently held by the company to move into distribution channels once sowing activity gains momentum.
Dhanuka said monsoon distribution and timing will be more important than the overall rainfall shortfall.
"I don't foresee that around 8% shortfall can have any major impact," he said, adding that nearly 60% of India's agricultural land is irrigated and therefore less dependent on rainfall.
The company has raised prices three times since April in response to higher input costs. Dhanuka said price increases were mainly taken in products sourced from China or manufactured using locally procured technicals, while products imported from Japan were largely spared despite currency-related cost pressures.
Overall, Dhanuka Agritech implemented price hikes of around 5-7% across a portion of its portfolio.
However, the higher prices have led dealers and distributors to delay purchases ahead of the monsoon season.
"The inventory levels are higher with the company, because dealers are not accepting," Dhanuka said.
He added that channel inventory remains low and expects buying activity to improve once rainfall begins across key agricultural regions.
The company believes businesses holding adequate inventory will be better placed to benefit from the seasonal demand recovery.
Also Read | Dhanuka Agritech buyback: Sixth share repurchase to open on June 4
Dhanuka revised its revenue expectation to ₹75 crore from an earlier target of ₹100 crore on its greenhouse farming venture. The reduction follows delays in obtaining product registrations required for exports.
Dhanuka said the company had expected overseas sales to contribute to growth, but the registration process has taken longer than anticipated, limiting sales to the domestic market for now.
The company also provided an update on products acquired from Bayer Crop Science. Dhanuka Agritech has obtained global rights for these products across 20 countries and expects financial benefits to continue through an existing arrangement with Bayer.
According to Dhanuka, Bayer Crop Science will continue selling the products on Dhanuka's behalf until December 31, 2026, with Dhanuka receiving the economic benefits during this period. From January 1, 2027, revenue from these products will begin to be recorded directly in Dhanuka Agritech's books.
For the full interview, watch the accompanying video
The management said the acquired products carry gross margins broadly in line with the company's existing portfolio and are expected to support the business's international expansion strategy.
Catch all the latest updates from the stock market here
Chairman MK Dhanuka believes the India Meteorological Department's forecast of rainfall at 92% of the long-period average is unlikely to significantly affect the agriculture sector. He sees inventory currently held by the company to move into distribution channels once sowing activity gains momentum.
Dhanuka said monsoon distribution and timing will be more important than the overall rainfall shortfall.
"I don't foresee that around 8% shortfall can have any major impact," he said, adding that nearly 60% of India's agricultural land is irrigated and therefore less dependent on rainfall.
The company, which has a current market capitalisation of ₹4,963.12 crore, has seen its shares lose more than 35% over the last year.
The company has raised prices three times since April in response to higher input costs. Dhanuka said price increases were mainly taken in products sourced from China or manufactured using locally procured technicals, while products imported from Japan were largely spared despite currency-related cost pressures.
Overall, Dhanuka Agritech implemented price hikes of around 5-7% across a portion of its portfolio.
However, the higher prices have led dealers and distributors to delay purchases ahead of the monsoon season.
"The inventory levels are higher with the company, because dealers are not accepting," Dhanuka said.
He added that channel inventory remains low and expects buying activity to improve once rainfall begins across key agricultural regions.
The company believes businesses holding adequate inventory will be better placed to benefit from the seasonal demand recovery.
Also Read | Dhanuka Agritech buyback: Sixth share repurchase to open on June 4
Dhanuka revised its revenue expectation to ₹75 crore from an earlier target of ₹100 crore on its greenhouse farming venture. The reduction follows delays in obtaining product registrations required for exports.
Dhanuka said the company had expected overseas sales to contribute to growth, but the registration process has taken longer than anticipated, limiting sales to the domestic market for now.
The company also provided an update on products acquired from Bayer Crop Science. Dhanuka Agritech has obtained global rights for these products across 20 countries and expects financial benefits to continue through an existing arrangement with Bayer.
According to Dhanuka, Bayer Crop Science will continue selling the products on Dhanuka's behalf until December 31, 2026, with Dhanuka receiving the economic benefits during this period. From January 1, 2027, revenue from these products will begin to be recorded directly in Dhanuka Agritech's books.
For the full interview, watch the accompanying video
The management said the acquired products carry gross margins broadly in line with the company's existing portfolio and are expected to support the business's international expansion strategy.
Catch all the latest updates from the stock market here
