At a Glance
Dhanuka Agritech’s Q1 FY26 results are out, and it’s a mixed cocktail of growth, margin love, and cautious optimism. Revenue grew a modest 7% to ₹528.3 crore, while EBITDA jumped 16% to ₹83.2 crore because margins were in a good mood (15.75% vs. 14.53%). PAT also rose 13.5% to ₹55.5 crore – proving farmers weren’t the only ones sowing gains. Herbicide demand took a rain check thanks to delayed monsoons, but insecticides and fungicides kept the party going. Plus, management is flexing a strong new product pipeline and dividend generosity.
Introduction
Dhanuka Agritech, the farmer’s chemical wingman, just proved it can deliver growth even when Mother Nature throws tantrums. Q1 FY26 was marked by delayed rains, high channel inventories, and farmer hesitancy, but Dhanuka still managed to squeeze profits from its crop protection empire.
While the agrochemical industry as a whole was nursing its monsoon blues, Dhanuka focused on margin accretive launches, like its new 9(3) herbicide Dinkar, which is already winning hearts (and crops) in southern India. The cherry on the crop cake? A 100% final dividend and a share buyback that screams shareholder love.
Business Model (WTF Do They Even Do?)
Dhanuka Agritech manufactures and markets agrochemicals across four segments – herbicides, insecticides, fungicides, and plant growth regulators. With 300+ product registrations and tie-ups with global agrochemical giants from Japan, US, and Europe, it brings cutting-edge farming tech to India.
Their network? A sprawling 6,500 distributors, 80,000 retailers, and reach to over 10 million farmers. Operations are supported by 4 manufacturing units, 41 warehouses, and 2 R&D labs. Translation: they’re everywhere crops grow.
Financials Overview
| Particulars (₹ Cr) | Q1 FY25 | Q1 FY26 | YoY % |
|---|---|---|---|
| Revenue | 493.6 | 528.3 | +7% |
| EBITDA | 71.7 | 83.2 | +16% |
| EBITDA Margin | 14.5% | 15.8% | +125 bps |
| PAT | 48.9 | 55.5 | +13.5% |
| PAT Margin | 9.9% | 10.5% | +60 bps |
| EPS (₹) | 10.7 | 12.3 | +14.8% |
Color Commentary: Revenue grew slow (because rain gods ghosted farmers), but margins flexed hard. PAT margin >10% makes this quarter one of Dhanuka’s healthiest yet.
Valuation
- EPS (Q1 annualized): ₹49.2
- Assume PE multiple (industry ~25x): Fair value ≈ ₹1,230
- EV/EBITDA: At an EV ~₹3,200 crore and EBITDA TTM ~₹420 crore, EV/EBITDA ≈ 7.6x.
- DCF (rough): Fair value in ₹1,150–₹1,300 range.
Fair Value Range: ₹1,150–₹1,300. The stock looks decently valued if growth sustains.
What’s Cooking – News, Triggers, Drama
- New Product Launches: Dinkar (Paddy herbicide) is already winning southern markets.
- Pipeline: 8 new products in two years, including specialty chemistries.
- Shareholder Love: ₹100 crore buyback at ₹2,000/share completed; final dividend 100%.
- Monsoon Watch: Better rains in late June signal a strong Q2.
- Awards: CSR Leadership Award 2025 and Family Business Excellence Award – corporate flex achieved.
Balance Sheet
| ₹ Cr | FY24 | FY25 |
|---|---|---|
| Assets | 2,900+ | 3,200+ |
| Liabilities | 1,100 | 1,200 |
| Net Worth | 1,800 | 2,000 |
| Borrowings | Minimal | Minimal |
Auditor remark: “Debt-free and cash-generative – Dhanuka’s balance sheet is as clean as a freshly sprayed field.”
Cash Flow – Sab Number Game Hai
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Ops | 250 | 320 | 370 |
| Investing | (80) | (120) | (100) |
| Financing | (50) | (80) | (100) |
Remark: Operating cash flows are strong, supporting dividends and buybacks without sweating.
Ratios – Sexy or Stressy?
| Metric | Q1FY25 | Q1FY26 |
|---|---|---|
| ROE | 15% | 17% |
| ROCE | 18% | 20% |
| P/E | 24x | 22x |
| PAT Margin | 9.9% | 10.5% |
| D/E | 0.05x | 0.03x |
Verdict: Debt-light, margin-strong, and return ratios looking sexy.
P&L Breakdown – Show Me the Money
| ₹ Cr | FY24 | FY25 | Q1FY26 |
|---|---|---|---|
| Revenue | 1,759 | 2,035 | 528 |
| EBITDA | 327 | 417 | 83 |
| PAT | 239 | 297 | 56 |
Remark: Annual growth is steady; Q1 is a decent kickoff.
Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Dhanuka Agritech | 528 | 56 | 22x |
| PI Industries | 2,200 | 320 | 35x |
| UPL | 9,216 | (88) | n.m. |
| Bayer CropSci | 1,800 | 290 | 30x |
Remark: Dhanuka’s P/E is lower than PI/Bayer, but growth is solid.
Miscellaneous – Shareholding, Promoters
- Promoter Holding: 75% (tight control)
- Institutions: 15%
- Retail: 10%
- Promoters Mahendra Kumar Dhanuka & family run the show like a legacy farmer’s cooperative turned corporate.
EduInvesting Verdict™
Dhanuka Agritech’s Q1 FY26 proves that even with delayed rains and farmer caution, it can deliver growth and margins. Its debt-free status, strong cash flows, and shareholder-friendly moves (dividends, buyback) make it stand out in the agrochemical pack.
Strengths:
- Debt-free and cash-rich
- Strong distribution and farmer reach
- Margin-accretive product launches
Weaknesses:
- Herbicide sales highly dependent on monsoons
- Competitive pricing from global players
- High inventory levels in some regions
Opportunities:
- New product pipeline (9(3) registrations)
- Expansion of specialty portfolio
- Favorable monsoon in Q2 onward
Threats:
- Weather unpredictability
- Regulatory risks
- Farmer income volatility
Final Take:
Dhanuka is the kind of stock that quietly compounds. No debt, good margins, and a product pipeline that could drive the next growth wave. While short-term monsoon risks linger, long-term fundamentals are rock solid.
Written by EduInvesting Team | 01 August 2025
SEO Tags: Dhanuka Agritech, Agrochemicals, Q1 FY26 Results
