Dhanuka Agritech’s managing director, MK Dhanuka stated in an exclusive interview with ET Now said that demand for herbicides segment is expected to pick up from the month of July onwards as monsoon is expected to be normal as per IMD. Other segments like insecticides and fungicides’ demand will be seen at the later part of the year. Herbicides contribute almost 24 percent of the total revenue of the company. Higher consumption and better offtake for agrochemicals seen in July.
Government of India in Jun’22 had hiked the MSP of Kharif crops with the objective to provide remunerative prices and encourage crop diversification.MSP for crops was hiked in the range of 4 percent- 8 percent. Sowing of Kharif crops has started on a relatively somber note compared with last year, and is expected to pick-up this week with advancement of rainfall. More sowing is expected to take place in states of Gujarat and Maharashtra.
Monsoon conditions are active along the west coast and central part of India. IMD expects a normal rainfall in Jul’22 (96 percent -104 percent of long period average). La Nina conditions are expected to prevail throughout the remaining monsoon period. Eastern UP, Bihar, Punjab and Haryana are receiving below normal rainfall.
The management commentary for Q1FY23 was that there will be low double-digit growth due to erratic rain and subdued accreages of major crops. Dhanuka also stated that double-digit growth for revenue is expected for FY23 as well, and the margin guidance has been unchanged at 18 percent growth. The company has already reduced prices by 3 percent-4 percent across various product segments. Further price cuts are expected in certain molecules. Some easing of freight rates and Chinese imports becoming cheaper augur well for the company.
Dhanuka said that the Government expects food production to be greater than last year. State governments like Haryana are introducing schemes so that the farmers move away from paddy cultivation to production of oilseeds, cotton and pulses production.
