Revenue: INR2,035.15 crores for FY24-25, up 15.73% year-on-year. Q4 Revenue: INR442.02 crores, an increase of 20.01% over the corresponding period last year. EBITDA: INR416.61 crores for FY24-25, up 27.23% year-on-year. Q4 EBITDA: INR109.75 crores, up 37.03% year-on-year. EBITDA Margin: Improved from 18.62% in FY23-24 to 20.47% in FY24-25. Q4 EBITDA Margin: Improved from 21.75% in Q4 FY23-24 to 24.83% in Q4 FY24-25. Profit After Tax (PAT): INR296.96 crores for FY24-25, up 24.2% year-on-year. Q4 PAT: INR75.5 crores, up 27.94% compared to the corresponding previous year quarter. PAT Margin: Improved from 13.6% in FY23-24 to 14.59% in FY24-25. Q4 PAT Margin: Improved from 16.02% in Q4 FY23-24 to 17.08% in Q4 FY24-25. Dividend: 100% dividend recommended, INR2 per equity share. Share Buyback: 5 lakh shares at INR2,000 per share.

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Release Date: May 16, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Dhanuka Agritech Ltd (BOM:507717) achieved a milestone revenue of over INR 2,000 crores, marking a significant growth milestone. The company reported a 20.01% increase in revenue from operations during Q4 FY24-25 compared to the same period last year. EBITDA for Q4 FY24-25 increased by 37.03% year-on-year, with an improvement in EBITDA margin from 21.75% to 24.83%. Dhanuka Agritech Ltd expanded its international presence by acquiring rights for two key fungicide molecules from Bayer AG, enhancing its global footprint. The company has a strong R&D division and international collaborations, which support the introduction of novel chemistries and product development.

Negative Points

The Hedge facility reported a negative EBITDA of 14 crores in FY25, with expectations of similar performance in FY26. Despite revenue growth, the company anticipates a 100 basis point hit to gross margins in FY26 due to rising raw material costs. Trade receivables have increased significantly, which could impact cash flow management. The B2B sales channel, while growing, typically offers lower margins compared to the B2C segment. The company faces challenges in achieving positive EBITDA margins for The Hedge facility until capacity utilization reaches 70-80%.

Q & A Highlights

Q: Given the favorable monsoon estimates, what are the revenue growth and EBITDA margins expected for FY26? Also, how did The Hedge facility perform in FY25, and what is the guidance for FY26? A: The Hedge facility generated revenue of INR 40 crores in FY25, with a negative EBITDA of INR 14 crores. For FY26, revenue is expected to increase to INR 60 crores, with EBITDA remaining similar. Regarding the monsoon, both IMD and SkyMet have given a positive forecast, which is encouraging for planting. We anticipate higher double-digit revenue growth and expect EBITDA margins to remain similar to this year.

Story Continues

Q: Can you provide a breakdown of B2B and B2C sales for FY25 and Q4 in the domestic market? A: B2B sales accounted for about 9% of total revenue, including technical sales of INR 40 crores, while 91% came from brand sales. Last year, B2B sales were about 4%. We are introducing a new fungicide product, expecting INR 10 crores in revenue, but it won't significantly impact EBITDA this year.

Q: What is the total addressable market for the two fungicide molecules acquired from Bayer, and what revenue are you expecting from them in FY26 and FY27? A: The total addressable market for these molecules is approximately USD 100 million. We expect to generate INR 110 crores in revenue from these products in FY26, including both Indian and international sales. One product is focused on the Brazilian market, while the other is spread across more than 20 countries.

Q: How do you plan to utilize the cash position, especially after the acquisition of the two products from Bayer? A: We maintain a healthy practice of rewarding shareholders through dividends and buybacks. We recently announced a 100% dividend. We will continue to explore strategic opportunities for cash utilization and will share updates as they arise.

Q: How is the international market performing, and is it aligning with your expectations following the acquisition of the two fungicides? A: The international market presents a significant opportunity for us. The acquisition of these fungicides provides a gateway to expand our footprint in export markets, including Brazil, the world's largest agrochemical market. We are optimistic about the potential for these products to enhance our international presence.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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