Thank you, Sumit. On behalf of Antique Stock Broking, warm welcome to all the participants on the 1Q FY27 earnings call of Dhanuka Agritech.

Today we have leadership team represented by Mr. M.

K. Dhanuka, Chairman; Mr.

Rahul Dhanuka, Managing Director; and Mr. V.

K. Bansal, CFO on the call.

Without further ado, I would like to hand over the call to Mr. M.

K. Dhanuka for opening remarks.

Thank you and over to you, Mr. Dhanuka.

Thank you, Manish ji. Good afternoon, ladies and gentlemen.

Myself M. K.

Dhanuka, Chairman of Dhanuka Agritech Limited and I welcome you all to the Q1 FY26-27 earning conference call. I have with me Mr.

Rahul Dhanuka, Managing Director and Mr. V.

K. Bansal, CFO of the company.

As you are aware, Dhanuka Agritech is among India's leading agrochemical companies with a long-standing commitment towards advancing Indian agriculture through technology-led crop solutions. Over the years, we have built a strong pan-India franchise with deep farmer engagement and a differentiated product portfolio and a robust distribution network.

Today we reach more than 10 million farmers across India through approximately 6,500 distributors and over 80,000 retailers. Supported by four manufacturing facilities and 41 warehouses, we continue to strengthen our ability to deliver products efficiently across key agricultural markets.

A key differentiator for Dhanuka has been our consistent focus on introduction of innovative and globally relevant chemistries in the Indian market. Our partnership with 10 leading multinational agrochemical innovators from Japan, Europe, and the United States continue to provide us access to advanced technologies in differentiated solutions for Indian farmers.

Our two R&D centers, supported by NABL accredited laboratories and a strong regulatory and product development team, remain focused on product registration, formulation development, and strengthening our future growth pipeline. The agrochemical industry witnessed a significantly challenging first quarter of FY26-27.

Across the sector, revenue growth remained under pressure due to delayed monsoon onset in several key agricultural regions, which postponed sowing activities and led to reduction in product demand from first quarter to the subsequent months. Industry estimates indicated modest revenue growth, while profitability remained under pressure owing to weaker domestic demand and price competition.

You are well aware that in the month of June, we had 40% shortfall in the rain and by the end of July, it came down to 15% shortfall. Even 1% shortfall in the rainfall impacts the sowing areas and the overall growth of the crops.

In addition, the sector continued to face challenges arising from elevated raw material and logistics cost during the quarter. Several companies attempted price increases during the initial months of the season to offset higher costs linked to geopolitical tensions in West Asia.

However, weak market demand limited the sustainability of such hikes. Against this backdrop, I would like to share that Dhanuka delivered a subdued operational and financial performance during the quarter.

Revenue from operations for Q1 FY26-27 stood at Rs 461.93 crore as compared to Rs 528.29 crore in Q1 of FY25-26, registering a degrowth of approximately 12.56%. EBITDA for the quarter stood at Rs 55.01 crore and profit after tax stood at Rs 36.30 crore.

Our balance sheet and cash generation continue to remain strong, providing us the flexibility to invest for future growth while overcoming the short-term headwind and turbulence. The zonewise contribution to turnover for Q1 FY26-27 was North contributed 36%, East contributed lowest 9%, West contributed 37%, and South contributed 18%.

Product category-wise share was insecticides contributed 25%, fungicides contributed 14%, herbicides contributed 42%, and others contributed 19%. While the first quarter was impacted by delayed seasonal demand, pricing pressures, and external uncertainties, we believe these are largely cyclical challenges.

The long-term growth drivers of the Indian agrochemical industry remain intact, and we remain optimistic about stronger momentum in the coming quarters. The shareholders of the company in the 41st Annual General Meeting held today at 11:00 AM considered the final dividend of 100%, that is Rs 2 per equity share having face value of Rs 2 per share, and the result for the dividend will be declared within due course.

The company has already rewarded the shareholders with a buyback of 5 lakh equity shares at the rate of Rs 1,400 per equity share, absorbing Rs 70 crore. Further, it is to inform you that the company has acquired land at Nagpur, Maharashtra for setting up a new manufacturing plant.

This is in the Butibori zone of Nagpur, the industrial area. The total estimated outlay for the project is expected to be up to Rs 200 crore.

The proposed capacity of the plant will be 23,000 metric ton per annum. It is expected that the said plant will be operational by April 2028.

We are pleased to inform you that in the upcoming months, we are planning to launch five new products consisting of one liquid fertilizer, three fungicides, and one herbicide. At Dhanuka, we continue to believe that sustainable business growth must go hand in hand with farmer prosperity and national food security.

Our continued engagement with agriculture universities, Krishi Vigyan Kendras, and other scientific institutions remains an important part of our farmer education and technology dissemination efforts. Thank you very much for your kind attention.

We would now like to open the floor for questions. Thank you.

Hi, sir. My question is about the products which we had acquired from Bayer.

Have we expanded our distribution reach in other countries? We had appointed some customers also in five countries and we were planning for more expansion.

You had also mentioned that these are the some real challenges which we are facing. Just wanted an update on this one.

We have acquired Iprovalicarb and its variants and Triadimenol and its variants from Bayer for global markets. As we speak, we have already established some customers in various markets and already business started with them.

Whereas in some markets, we have yet to establish our distribution set-up, which is ongoing as we speak. Also, as we speak, the Executive Director, International Business, Harsh is traveling to these markets in US and Brazil, meeting with customers, existing as well as prospective.

Okay. Sir, in terms of revenue, could you please tell us how much would these products contribute to the top line in FY27?

As of now, we are not sharing the number of how much Triadimenol and Iprovalicarb will be sharing in FY27, but yes, we'll address this query separately.

Okay. Sir, my next question is the products we introduced in the last years like Mycore Super and Wardor, how much do the new product launches contribute towards the top line, and has that ratio increased over the years?

Also, I wanted to know the thought process when you introduce new products, what are the management's internal targets for the return ratios and margins which they would like to command, and does it differ from segment to segment?

Right. What we track our performance on new product introduction is through Innovation Turnover Index.

We have maintained a healthy Innovation Turnover Index. Last year, it was about 13.89%.

Wardor, which is a biological bionutrition for various crops, we introduced late last year, sometime in September. We have seen good traction for Wardor in the first quarter this year.

There was not significant movement last year. Mycore Super was introduced the year before, that was in FY25.

Mycore Super was introduced in Q1 FY25. It did really well in FY25, it has done extremely well in FY26 also, and this year Q1 also Mycore Super has received good traction across the geographies and across cereal crops, pulses, sugarcane, and even horticulture crops.

Okay. Sir, just the second part of my question, what is the thought process when you introduce a new product and some internal management targets for the return ratios or the margins which you would like to command, and would it differ from segment to segment?

Yes, it differs from segment to segment. Since at Dhanuka, we introduce new patented products also, new chemistries from various Japanese partners and their premixes, they fall in a premium category and we command a different margin on those product.

Nutrition products also mostly have a differentiated and a premium margin. Mycore Super and Wardor both would fall in same category.

We introduced various me-too products and co-marketing products also time to time, which would normally fall in a lower margin category as compared to 9(3) products or nutrition. We benchmark a healthy 20% margin minimum for any new introduction, but mostly 9(3) and nutrition would have significantly higher, more than double sometimes.

Okay. Sir, my last question...

Hi. Am I audible?

Yes.

Hello. Yeah.

Thank you for taking my questions. Sir, my first question was what is the update on the GST notice that we had received a couple of months back?

As

you see, we have already appointed our Lakshmikumaran as consultant. Abhi uska date padega, so that is in under consideration.

It will take a little more time.

Are we confident that the order will be in our favor?

Sure. Now these molecules are categorized under that category of fertilizer.

To currently, as per circular rate is 5%. To we are sure we will win the case absolutely.

There is no doubt about it.

Great. That's a relief to hear.

The second question was two parts: one was are we looking to sign more deals in the international market like we did with Bayer, and will it also help feed our Dahej plant capacity?

Right, thanks for that question. As you are aware, Dhanuka is a debt-free company.

We have a strong balance sheet and has been like that for many years. Yes, we are scouting out for good inorganic growth opportunities, including product portfolio.

Leveraging our capabilities in Dahej plant is always an expended option. Yet our strength in Indian market, market access, as well as capabilities to manufacture, synthesize products in Dahej, all together are various dimensions across which we explore acquisition.

Okay. Sir, this Nagpur plant, is it going to be a formulation plant or is it going to be a technical plant like Dahej?

This is going to be a formulation unit.

All right. Thank you so much.

I will get back in the queue.

Hi, sir. My first question was regarding the guidance cut that we have done in the PPT for FY27.

Just wanted your thoughts on why such a steep cut, especially on the top-line growth front?

As you can obviously see the movement of monsoon and its impact from various angles, I think so this is where we estimate our best position to be. We are still pretty hopeful of the growth that will come in Q2 and Q3, and yet it is absolutely appropriate that we project a clearer picture to our investors.

Got it. It's safe to assume that second quarter so far has also not seen a larger growth given that we had some benefit of the base as well last year same quarter?

That's right.

All right, okay. Secondly, on the new facility, the 23,000 tons facility, Rs 200 crore capex for a formulation unit seems a little high, isn't it?

How do you arrive at it is high, I know because...

Because for the technical plant, we had expended roughly about Rs 250, 300-odd crore. Usually, the thought is that formulation plant, about Rs 60, 70-odd crore is something that we do, and we expect a 7, 8 times asset turns on a formulation plant.

That's why I just wanted your thoughts on the same.

We are imagining this plant to be significantly automated plant cutting down on labor dependencies, making this plant of global standard in terms of both safety and efficiency. With that automation in mind, we are expecting initially a relatively higher capex.

Okay. I'm guessing given that it's a new land, some part of the Rs 200 crore would go for setting up the utilities and everything.

Yes, it will be.

Got it, got it. The asset turns we should think about it at 7, 8 times?

I think so this is probably not the right time for me to comment on the asset turns part, but I think so we'll be able to come back and address this once the project details and everything are deeply finalized, which is probably late last Q4.

Got it. Okay.

Bansal ji, if you could just give us the split for the Dahej site revenue EBITDA and Bayer product revenue and royalty for first quarter?

You see in terms of Dahej, the turnover last year it was around Rs 16 crore, this year is around Rs 26 crore. In terms of EBITDA, last year EBITDA was negative Rs 3 crore, this year is less than Rs 1 crore.

Okay. Sir, sorry, could you repeat the revenue number again?

Revenue is 26 versus 16.

Got it. For Bayer product?

Bayer product revenue is not actually coming in our books in the quarter one.

Okay. The royalty?

Royalty is significantly lower as compared to last year. It is around Rs 4 crore.

All right. Okay.

Sir, just one last question, on your thoughts on do we have any threshold on how much do we plan on expending on these Bayer products to set up a distribution network in the export markets?

As of now, not on that front.

All right. Okay.

Thank you for the opportunity. Thanks.

That's all.

Am I audible, sir?

Yeah.

Thank you so much for the opportunity. Most of my questions are already answered, but a few questions from my side.

After this Kharif season began, how would you categorize inventory level at distributors and retailers? Are inventories broadly aligned with the primary sales or do you see any stocking or destocking trend emerging?

This you are seeking for which window?

For this year, sir, quarter one, quarter two.

Quarter one, quarter two. Okay.

Now, as you are aware that last financial year ended with significant increase in prices and a fear of non-availability, there was probably some frontloading in the market in the beginning of the year. As the season is progressing, we don't see either way stocking or destocking happening.

Business is progressing on the go as per the market demand and inventory rotation is happening normally. I don't foresee any stocking or destocking by end of quarter two either way.

Okay.

Recently we have launched many products and upcoming also we will have many products. Could you please share how much of the Q1 revenue came from products which were launched over last two years or last three years and what contribution you expect from these products over the next two to three years?

I've really not pulled out this part of the data. Yeah.

As far ITI concern is around 11.56%, which is the contribution against the last 3 years' introductions.

Got it, sir. Thank you.

Thank you for the opportunity. Rahul ji, Q1 was supposed to be a decent quarter, I think, in general because of price increase and the industry might have got benefit of some low-cost inventory that we would have carried for the Kharif season from Q4.

It does not seem to be so. Some more details from you on how Q1 panned out actually and how is the situation in Q2 on ground would be very helpful.

Yeah.

Q1 for us and I believe industry general is herbicide heavy, weedicides heavy for soybean, cotton, various other crops across large parts of the geography, including... These were some of the states which were worst impacted in one...

I'm sorry. Tell me, Sumit, is it better now?

Thanks. I'll take that part.

Rajasthan, Gujarat, Madhya Pradesh, Maharashtra, important cotton and soybean markets, they took a major beating in terms of rainfall, especially in the month of June and in some pockets, farmer had to even go for re-sowing. That is where herbicides for Dhanuka have taken a hit.

That's how that's reflected in our Q1 performance. In terms of South also, the sentiments have not been good.

The rainfall has not been good in June as well as in July. Moving to Q2, July while various districts and some pockets have seen excessive rainfall, large part of the country remains deficit in rainfall and that's how July is moving.

Of course, July has done better than June, yet what we see is a difficult quarter.

Okay. Sir, seeing your revenue breakdown segment-wise, herbicide declining by around 25% is understandable, but in a season of herbicide-heavy consumption, why is fungicide sales up 11%?

Fungicide share is 14%, not 11%.

No, YoY growth.

Okay. I didn't get your question.

Sir, fungicide sales was up 11% year-on-year in Q1. Generally, Q1 is a herbicide placement season and insecticide, fungicide takes a back seat because the sales are generally higher in Q2, but why is fungicide sales also up 11% this quarter?

This is very interesting. A very special Japanese fungicide has a special traction in dry season in horticulture crops.

Now high horticulture prices, for example, tomato, cucurbits, etc., gave traction for these two products and that's why fungicide has grown in Q1, whereas you are conventionally right, Q2 is a fungicide quarter.

Which molecules would these be or which brand?

Nissodium. Conika.

Conika. Janet also.

Okay. Just last question for Mr.

Bansal. Sir, generally in a weak quarter, you have very tight control on cost and at this time, against a 12% revenue decline, your other expenses are flat.

Is there any one-off in this quarter or we were not able to control it this time?

We are able to control, they are flat, you see, it's very difficult to maintain the expense at the same level. Because you see all the expenses, many expenses are basically incurred in anticipation of the season.

Their planning is done significantly ahead of the season, right?

Yeah.

Expense are you see because of tight control are flat in terms of percentage are more, but in absolute value almost same, similar.

Sir. I'll go back to the queue.

Hi sir. My question is regarding if you could break up the revenue growth in terms of volume, value.

You see in terms of value, volume growth, it is almost similar. Value negative by 12.56 and volume is around same, 12.7 type.

Okay. The value growth was partially led by the increase in the input cost, right?

Is almost same, similar. Value or volume there is hardly any difference.

No, sir. Sir, my question was that the price growth that we have seen in this quarter, so that was driven by the price hike and that is led by the input costs inflation, is that correct?

See,

price hike happened in the month of June. It could not sustain.

From the May, it started declining and June, significant decline in many molecules. In July, further decline.

That was artificial, you see, increase, sort of artificial because of artificial shortage in view of war. That was only in April.

From May, the things were reversed.

Understood, sir. Still in your books, what it is showing that the price growth of over 12%.

Just wanted to understand if the price growth of over 12%, then why we haven't got the benefit in terms of the low-cost inventory and vis-a-vis the gross margin improvement? That's the point I wanted to understand.

Who says price growth is 12%? No growth in price.

Okay. Understood, sir.

I am saying, yeah.

Understood, sir. Sir, in terms of Bayer revenue, I think last time you had mentioned that the India business Bayer product registration got transferred to Dhanuka's name.

Just wanted to understand if we have booked any revenue for that product in India market or that revenue was nil in this quarter?

In India market, the revenue was booked in the previous year itself. It was started from the last year.

Okay.

Yeah.

You see the business mainly brand is coming in quarter two. Quarter one is very nominal figure.

It's a product for grape. Grape season starts in the second quarter.

Major turnover will come from Bayer product, Iprovalicarb in the month of September.

Understood, sir. Understood.

Thank you, sir. That's all from my end.

Hi, very good evening, sir. Thanks a lot for the opportunity.

Sir, I have two questions. First thing, the expansion that we are considering in Nagpur is despite having enough land in Dahej, I would assume, while you have given out the reasons for considering Nagpur as a geography for the new expansion and while having enough land in Dahej.

Sir, any plans further for having certain assets coming in place or anything of that sort on the Dahej land piece? Because I think there are just two plants, I believe, that they're running and also the land parcel that we have got in Nagpur, does it have enough room for expansions other than this 23,000 tons of capacity that we are adding?

That would be my first one. Thank you.

Right. Dahej has been set up as a chemical synthesis facility in a notified chemical zone of GIDC.

This space is committed towards chemical synthesis. Chemical synthesis, as you are already aware, is completely different technologically, utilization of facilities and utilities, requirement of technical human resource capabilities is very different.

We do not wish to overlap the two in terms of formulation facility overlapping with a chemical synthesis facility. That's why this is being set up outside of the Dahej land in a separate.

As you are also aware that formulation facilities are relatively easily scalable. As we set up this facility with automation, this would have further expansion opportunities.

At Dhanuka, we have in recent past introduced more and more low dose, environment-friendly products. I feel that setting up, providing the farmer with smaller pack size of really potent and efficient products will take a major leap with this facility.

Sir, the Nagpur expansion, does it have more space for accommodating other assets also?

Yes, it has opportunity for scaling up.

Got it. Sir, second one on one of the media interactions, I think Dhanuka ji mentioned that this year we will probably have more biological products which were pretty much absent in the last year.

I think that number was indicated to the extent of around 130-odd crore. Now if I just do the math, the single-digit top-line growth that you are talking about will roughly bring around 100 to 150-odd crore increase on the overall revenues.

It seems to be offsetting the incremental revenue coming in from biologicals. Is it safe to assume that basically we are looking at a flattish year on crop protection volumes for FY27?

Is that the right reading?

We are looking at a small single-digit growth, I would say, yes.

Okay. Noted, sir.

Thank you. That's it from me.

All the best for the next quarter.

Thank you.

Thanks for the opportunity. Sir, just carrying on the question on biologicals, how has been the progress during the current quarter given that last year base quarter there was a ban and so no sales were observed?

How has been the progress during the month of July for Q2? Thank you.

Out of three products, we have already introduced two and one more is in the pipeline to be introduced pretty soon. Probably by August end, we'll be launching the third one also.

We have already received all the regulatory approvals and most of the states we have received the sale permission also. We'll be going ahead with that.

In addition to that, we'll introduce two more nutrition biological category products in this financial year.

Sure. The second question is on the Nagpur project.

Now given that this is going to be a formulation facility, I'm sorry, I missed the earlier part in terms of what is the timeline for the project and are there any specific benefits from the Maharashtra government to put up this project in Nagpur region? Thank you.

We are looking at this plant getting commissioned in Q4 FY28 and we have certain SGST benefits from the Maharashtra government also.

Right. That's it from my side.

Thank you and all the best, sir.

Thank you.

Thank you, sir, for taking my question. Again, sir, harping on the capex, the new capex, basically.

Maybe if you can have some sort of quantification in terms of the benefits which we are going to get from that project, number one. Secondly, how should one think about the capex numbers for '27, '28, and '29?

Capex plan for 2027-28 is...

Hello, sir.

You see in terms of this Nagpur, the capex would be around 100 crore plus and Dahej will communicate little later.

Okay. This we are going to incur in FY28 or '29?

In '20

'26 '27-'28. 2027-28, 100 crore.

Hello?

Yeah.

Got it, sir. Sir, second question in lastly, if you can again give a breakup of the revenue decline between volume and price for this quarter as well as for the last quarter if that is available with you?

That is not available with me, but this quarter is almost similar. The top line negative in terms of value is 12.56, volume it is around 12.7.

Okay.

You are...

Sorry, sir?

There is hardly any difference between value and volume.

Okay. Got it, sir.

Thank you, sir.

Thank you.

Thank you for the opportunity. Again on the biostimulant side, when all of this problem started, there were some expectations that the smaller or the unorganized players would kind of lose market share to the bigger players who do business in a more organized way.

Now that you are mentioning that all of the products will be back into the game over the next one or two months and two are already introduced, are you noticing any trends in terms of the smaller players kind of going away from the market and is it more possibility for the organized players to capture market share?

Right. The design of the regulation is absolutely in track with our forecast that the smaller players and the unorganized players would probably not have enough space to operate.

Since the government started approving products late last year and many new introductions have happened over time, what is important to see is how it is implemented, how it is executed on ground both by the central and the state governments. Various state governments are taking a very stringent view of which products and which players they approve to introduce, which kind of strengthens the point that the smaller and the unorganized player will have relatively lesser room to operate.

I think so it will go in the right direction and favorable direction for us.

Already in the 2Q, would you expect that the market share that you or the other organized players, will they have a larger market share? Okay.

What would your expectations in terms of what kind of revenue you are expecting from the biostimulants category for this financial year?

Yeah. Since we are almost reworking the biostimulant category as almost a fallback option also in terms of how we can leverage that and in the stress conditions, how can farmer take benefit of these products, we are kind of reworking that and probably give you more details later.

Sure. Second question is on the Dahej plant.

You mentioned that the revenue in this quarter was 26 crore, is that right?

Absolutely.

I think last year we did almost about 50 crores, right, in FY26? Now that we have done 25 crores, what would be your guidance on the revenue for full year FY27?

For Dahej?

Yes.

Guidance is around 65 crores.

For full year.

For the full year.

Despite you having done already 25 crores in 1Q itself.

Because that is the start of the season. Initially you get the basically demand from the market.

Later on in the later part of the year, demand is not there, in the third or fourth quarter, the demand will be less.

Okay. Are you expecting to be break-even at the EBITDA level in this year on the Dahej plant?

EBITDA, break-even appears to be difficult. They are trying hard, but I think it is difficult.

That will be around in the range of around negative 4, 5 cr. Difficult to break-even.

Okay. Possible to also share the guidance on the Bayer products for FY27?

Bayer product, you see in India business, you are already aware in the part of the balance sheet. In terms of the other, now you see work is going on.

We are already, you see, incorporate two companies, one in Brazil and one in Europe. Some distributor appointed.

The exact figure is now difficult to share, but not a very significant portion will come in our balance sheet this year. Not significant amount of money will appear in this year.

Understood. One last question.

You mentioned that the sowing trend was weaker for 1Q, but now that we notice in the sowing progress, the sowing for soybean and cotton have improved meaningfully, right?

That's right.

Soybean, I think you have a very successful product by the brand name Purge two years back, which suffered last year. Then with the recovery in the soybean sowing and also on the cotton side, can some of the products that you have in portfolio benefit into Q and some of the loss that you faced in 1Q could be reversed?

These products have a particular segment, which is mostly in first fortnight of July, but preferably in second fortnight of June. No, I don't think so Purge and these weedicide would have a play opportunity for now.

Understood. Thank you and all the best.

Thank you.

Hi, sir. Thanks for the opportunity again.

Sir, I had one question. Because of this monsoon deficit, one thing that we see is that the sowing is lower compared to last year.

Just wanted to also understand, do you observe some stress at farmer level and would you think that they would not want to spend so much money on crop protection this year?

We kind of thought this, even when prices were going up significantly towards March end. As things would turn out, on one side, March vegetable prices went down for a while, but then April, May, and early June also saw significant uptick in vegetable prices and thus significantly increase consumption of horticulture products also.

I think so it is both ways. If the acreages would be slightly lower, then the farmers who are left with more acreages would have more opportunity to invest because commodity prices would be ranging higher.

The demand-supply balance, how that appears is something we are also watching. What will certainly be impacted is where irrigation is available versus where irrigation is not available.

Where irrigation is available, which is almost 60% of the Indian agriculture, would certainly have higher consumption as well as higher investment in crop protection as compared to where irrigation is not available. There farmer will go for low-cost or no-spray options.

Got it. Very useful.

Second was that although monsoon is in deficit, there have been reports that the reservoir levels have been quite healthy. Despite this, when we see that this sowing has been lower, you mean that it has been delayed, right?

Which is not as if the acreage has reduced.

I'll respond to that in two parts. Please do share with me the list of those reservoirs which are healthy, so that I can talk to my team also.

In my understanding, the reservoir health is significantly depleted and we are still praying for more rains. Yes, sowing has caught up in certain pockets where it has rained well in July and sown acreages have become healthier to that extent.

Got it. Thank you so much, sir.

Wish you all the best.

Thanks.

Once again, I would like to thank all our investors, analysts, business partners, and stakeholders for their continued trust and confidence in Dhanuka Agritech Limited. We remain committed to building a resilient, innovation-driven, chemistry-forward, and farmer-focused organization that creates sustainable, long-term value for all stakeholders.

India ka pranam, har kisan ke naam. Thank you and goodbye until next time.