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One of India’s top agrochemical companies.

Dhanuka Agritech is a nearly 54-year-old, debt-free firm. The firm produces a comprehensive range of agrochemicals such as herbicides, insecticides, fungicides, and plant growth regulators in a variety of forms such as liquid, dust, powder, and granules. 


Current Market Price on the date of publishing this report-: 729 Rs

Late Shri Chiranjilal Dhanuka established the groundwork for the firm in the mid-1980s. The Company has gone a long way in its nearly four decades in the agrochemical sector.

Dhanuka provides solutions for all of the country’s primary crops, including cotton, paddy, wheat, sugarcane, legumes, fruits and vegetables, plantation crops, and others. The impetus of the company is on promoting high-quality, environmentally friendly chemistry that complies with ICM/IPM, is safe for humans, and beneficial to flora and wildlife. 

Dhanuka is regarded as one of the market leaders in branded agrochemical product sales among Indian agrochemical companies. The Company has formed various Public-Private Partnerships and Private-Private Partnerships for agricultural extension initiatives, which are speeding the transmission of advanced agriculture technologies to the Indian rural community.  

Dhanuka Agritech Limited has one of the most broad market penetrations in the agrochemical industry, with over 150 registrations covering herbicides, insecticides, fungicides, and plant growth regulators/biostimulants and over 350 active SKUs.

Dhanuka has three cutting-edge production facilities in Rajasthan, Gujarat, and J&K, each with its own Quality Testing Facility. The R&D facility is in Gurgaon, which has been designated by the Ministry of Science and Technology for the generation of scientific data and the assessment of novel chemicals.

Dhanuka Agritech Limited is a leading agrochemical company in India, and Forbes Magazine has named it one of the “200 Best Under A Billion Companies in Asia Pacific.” Dhanuka was named Company of the Year (Agro Chemical Category) by the Federation of Indian Chambers of Commerce and Industry (FICCI) at the 10th Biennial International Exhibition and Conference – India Chem 2018 and has received several other honours and recognitions.

Dhanuka has a pan-India presence with marketing offices in all major Indian states. The three production divisions, which have 40 warehouses and a network of around 14 branch offices spread across India, serve 6,500 distributors and over 80000 retailers. Dhanuka’s workforce of over 1,000 techno–commercial personnel, backed up by a strong R&D division and a solid distribution network, enables the company to reach out to around 10 million Indian farmers with its goods and services. Dhanuka’s R&D section includes world-class NABL Accredited Laboratories and international partnership with the world’s seven major agrochemical companies from the United States, Japan, and Europe, allowing Dhanuka to integrate cutting-edge technology into Indian farmlands.

Dhanuka is now one of India’s top agrochemical firms.

Business / Products


Weedkillers are chemicals that are used to combat invasive plants. Non-selective herbicides can be used to clear waste ground, industrial and construction sites, railways and railway embankments because they kill all plant material with which they come into contact. Selective herbicides control specific weed species while leaving the desired crop relatively unharmed, whereas non-selective herbicides can be used to clear waste ground, industrial and construction sites, railways and railway embankments because they kill all plant material with which they come into contact. 


Fungicides are biocidal chemicals or biological entities that are used to eliminate parasitic fungus or their spores. Fungistatics prevent their growth. Fungi may cause significant harm in agriculture, resulting in major productivity, quality, and profit losses. Fungicides are used in agriculture as well as to combat fungal illnesses in animals.


These are chemicals that are used to kill insects. They include ovicides and larvicides, which are used to kill insect eggs and larvae. Insecticides are utilised in agriculture, medicine, industry, and by the general public.

Plant growth regulators

These (PGRs) are compounds that are used to influence plant development by boosting branching, limiting shoot growth, enhancing return bloom, eliminating surplus fruit, or changing fruit maturity. PGR effectiveness is affected by a variety of parameters, including how well the chemical is absorbed by the plant, tree vigour and age, dosage, timing, cultivar, and weather conditions before, during, and after application. 


For more information on New product launches please check the previous research report of Chanukah agritech from the link below.

Approval of new products

  • In its meeting in December 2021, CIB and RC authorised 9(3) Registration for a product Thiophanate-methyl with Kasugamycin. This product was created in collaboration with Nippon Soda Company Limited of Japan and Mesasoco Chemicals Company Limited of Japan. Dhanuka will commercialise this product as Zanet, which will primarily be used in horticultural crops to fight powdery mildew.
  • In addition, during its January 2022 meeting, CIBRC accepted a 9(3) Registration for Halosulfuron Methyl. This substance was developed in partnership with Nissan Chemical Japan, and Dhanuka will commercialise it as Comex, a herbicide for use in maize crops.
  • In its meeting in January 2022, CIBRC also accepted a 9(3) Registration for Etofenprox with Diafenthiuron crops. Mitsui Chemicals Limited Japan collaborated in the development of this product. Company will commercialise this chemical as Decide, and it will be used to regulate trips in cotton and chilli. 
  • Dhanuka Agritech intends to introduce all three of these items in the first quarter of fiscal year 2022-2023.
  • 9(3) products, have the exclusivity with Dhanuka Agritech and company is expecting revenue of about Rs.50 Crores from these products in next three to four years. 
  • One of the molecule Mycore which Dhanuka Agritech had introduced in technical collaboration with the Agrinos, a multinational company was doing very well and Company had doubled its tumover this year in comparison to the last year.

Investment in a drone Manufacturing startup

Dhanuka Agritech invested in IoTechworld Avigation, a start-up that manufactures Agribot drones, around six months ago.

Dhanuka Agritech has committed to investing Rs.30 crores, of which Rs.20 crores has already been invested.

Drone operations is a new enterprise in the agriculture industry that is supposed to make the task easier by covering a larger region.

The company intends to deploy at least 30-40 pilots before the next kharif season to deliver drone-based services such as pesticide and fertiliser spraying and soil health analysis. Dhanuka Agritech already has the licence to provide the service.

Investment Rationale

Pesticide spraying is done globally using drones, however in India, spraying is done manually by keeping on the back of the labour, which is not good for the health of the labour spraying in the field manually. As a result, drone technology, which is being utilised all over the world, is likely to take over the spraying process in India. Drones are predicted to take over a large period of the field spraying sector during the next few years.

Aside from that, these drones have a camera attached on them, which, thanks to computerised programming, allows for pinpointing insect assaults at specific spots in farms based on the photos gathered. Thus, instead of spraying over the field, farmers may use that spray to target a specific area, saving them money.

Technical Collaborations

Dhanuka’s goal of “Transforming India Through Agriculture” necessitates the adoption of top technology from across the world by the Indian farming community. To provide world-class technical solutions to India’s farmlands, the company has cooperated with the greatest technology suppliers in the globe. Dhanuka has technological relationships with Japanese, American, and European companies, which aids the company in the introduction of novel chemistry.


Board has twice bought back shares of the company from the public.

In 2019 company had announced cash offer to buyback upto 15 lakh eq shares of Rs 2 FV, which constituted 3.36% of total share capital at a price of Rs 550 which amounted to aggregate cash payment of 82.50 crores.

In 2020 The board approved buyback of 10 lakh equity shares at a final buyback price of Rs 1,000 per equity share payable in cash for an aggregate amount not exceeding Rs 100 crore the company said in a regulatory filing.


In Dahej, Gujarat, the company is establishing a unit for Technical Manufacturing of Pesticides, also known as the Backward Integration Process. In 2013, the Company purchased a plot of around 1,37,000 square metres in Dahej, Gujarat. The establishment of this unit will require an initial investment of around Rs. 200 Crores, which will be handled from the Company’s internal accruals. 

The establishment of said unit would strengthen the Company’s position with other players in the barter system for obtaining raw materials. It will also assist the Company in increasing its market share and opening new channels for the export of the Company’s products.

Overall capex will stay the same as, however in PY2022, capex will be in the region of approximately Rs.50 Crores, with following year’s capex expected to be around Rs.130 Crores.

For the Dahej expansion, management has said that the formulation plant in phase one will be completed by March 2022, and the remaining units will be ready by March 2023, when the firm will begin production.

Production for the Dahej plant will start in the FY2022-2023 in the end, but revenue will come in the 2023-2024. 


For Q3FY22

  • Revenue from operations stood at Rs.356.86 Crores in Q3 of FY2021-2022 versus Rs.295.66 Crores in Q3 of FY2021 representing an increase of 20.70%.
  • EBITDA is stood at Rs.61.74 Crores in Q3 of FY2021-2022 versus Rs.59.59 Crores in Q3 of FY2021 up 3.61%. 
  • Profit after tax was at Rs.42.51 Crores in Q3 of FY2021-2022 versus Rs.40.04 Crores in Q3 of FY2021 up 6.17%. 
  • Dhanuka Agritec EPS has increased to Rs. 9.13 in December 2021 from Rs. 8.54 in December 2020.
  • Volumetric growth for the current quarter was 18%. 

Financial Performance for FY 2020-21 (Standalone) 

  • Revenue from Operations (Net of Excise) increased by 24% from Rs. 1120.07 Crores in FY 2019-220 to Rs. 1387.47 Crores in FY 2020-21. Profit before tax increased by 57.74% from Rs. 180.64 Crores in FY 2019-20 to Rs. 284.94 Crores in FY 2020-21. 
  • Operating Profit before tax increased by 61.62% from Rs. 157.11 Crores in FY 2019-20 t Rs. 253.92 Crores in FY 2020-21. 
  • Net profit increased by 49% from Rs. 141.47 Crores in FY 2019-20 to Rs. 210.56 Crores in FY2020-21 
  • The Company reported an EPS of Rs. 44.61 in FY 2020-21 compared to Rs. 29.73 in FY 2019-20. 
  • Dhanuka continues to remain debt-free due to robust Financial management. Additionally, it has a healthy Net worth of Rs. 796.31 Crores as at 31st March, 2021

Managements Comments and Outlook

  • Management expects to see a reasonable double digit growth in Q4 and it hopes that the February and March will be good month for Rabi season which we will be lead to get the desired volumes.
  • There was some loss in the EBIT margins in Q3 to which management clarified that the increase was very steep in Q3 and they were not able to pass the price increase since lot of inventory was available in the system. As a result of bad season in Q2, it had impacted the business leading to deterioration in gross margins.
  • As per the management EBITDA should be range of around 18% in FY2022. 
  • The company has already conducted some market research in biologicals and is considering establishing a separate team for a biological division since it looks to be a highly promising future possibility. Due to the abundance of biological products in India, the initial growth rate is fairly moderate. The firm historically sold spurious items, which was a very difficult sector to penetrate, but looking at the two biological microbials, it looks like this is a really promising field for the future, and the company is considering market entrance strategy for this segment.

Key Risks/ Threats

Recently, the government has been extremely outspoken about chemical-free farming, organic farming, and zero-budget farming, all of which result in decreased chemical use in the agriculture industry. However, management does not perceive any threat to the firm in the near future. According to management, one of the reasons behind this is that, in the long run, organic farming is not a viable style of agriculture on a wide scale.

Last year, Sri Lanka abruptly attempted to transition to fully chemical-free farming, which had a significant impact on their economy, causing crop prices to skyrocket, forcing them to reverse their decision within three to four months. In comparison to India, we are adding one Australia to our population each year, but our agricultural land is declining due to industrialization and urbanisation. The most difficult task is figuring out how to feed this growing population on less land. The only alternative is to boost output, which necessitates the use of artificial fertiliser and pesticides.

Sectorial Outlook

The farming sector received special attention in the Union Budget 2021-22, with the government allocating Rs 75,000 crore for Farmers Samman Nidhi. It also increased the agricultural credit goal to Rs 16.5 lakh crore in FY2021-22 to aid in the development of agricultural infrastructure. According to the Agricultural Ministry’s preliminary projections for the current crop year, India’s food grain output in the 2020-21 crop year is expected to set a new all-time high of roughly 303 million tonnes (MT) (July- June cycle). This is a 2% increase over 2019-20.

Only 53% of India’s net cultivated area is irrigated; the remainder is reliant on natural rainfall for irrigation. The worldwide agrochemicals market is expected to increase at a CAGR of 3.4 percent between 2020 and 2025, from USD 208.6 billion to USD 246.1 billion. Increasing demand for food supply as a result of fast population increase has prompted agricultural intensification during the last few decades. Agrochemicals (fertilisers and various pesticides) are widely used in agriculture to meet rising food demand, bridging the gap between food production and consumption.

India is the world’s fourth largest producer of pesticides. It grew from Rs 197 billion in 2018 to Rs 214 billion in 2019 and is expected to reach Rs 232 billion by 2020. Further, the market is expected to reach Rs 316 billion by 2024, increasing at an 8.1 percent CAGR between 2019 and 2024. Pesticide usage per hectare in India is among the lowest in the world, at 0.6 kg/ha, compared to 5-7 kg/ha in the United Kingdom and 13 kg/ha in China.


Dhanuka Agritech a 54-year-old, completely debt-free company engaged in producing comprehensive range of agrochemicals such as herbicides, insecticides, fungicides, and plant growth regulators in a variety of forms such as liquid, dust, powder, and granules. Company has seen a sales growth of 13% cagr over 3 years and 18% net profit growth cagr over the same period. 

Besides sound and aggressive management , governments thrust on increasing wealth of farmers as well share of agriculture sector in Nations GDP is one of the key drivers for the companies engaged in this sector. Thus Dhanuka Agritech one of the companies at the forefront of innovation and leading agriculture companies with diversified presence as well as recent investment in a drone technology startup is worth exploring for long term.

Dhanuka Agritech was previously suggested on 13th March 2021 when the stock was trading at 722 Rs . Since then it hit 52 week high of 1053 Rs there by delivering 46% returns before falling to current levels.

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