Weak Quarter Due To Higher Base, Rising Raw Material Prices, Says Dhanuka’s MD

Here’s why Dhanuka Agritech had a flat quarter.

A farm worker sprays cotton plants with pesticides on the farm of Jarnail Singh in Jajjal village, Punjab, India (Photographer: Prashanth Vishwanathan/Bloomberg)  

Dhanuka Agritech Ltd.’s profit remained flat due to an adverse base effect and rising raw material costs. That’s according to MK Dhanuka, the managing director of the agro-chemical firm.

“Raw material prices of generic molecules have increased due to a China impact,” Dhanuka told BloombergQuint. “And since the consumption starts only in July, inventory in the market under old prices and new prices were not acceptable by deals in the quarter.”

The New Delhi-based company clocked a quarterly volume growth of 5 percent. While Dhanuka remains confident of growing at double digit this year, he added that the 15 percent growth guidance they had given would depend on the monsoon over the next two months.

Key Earnings Highlights:

  • Net profit was flat at Rs 16.1 crore in the June quarter year-on-year.
  • Ebitda fell 35 percent to Rs 15.7 crore.
  • Margin contracted 420 basis points to 7.4 percent.
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