"If we have good monsoon this year, the company expects a growth of approximately 20%. However, growth can remain at approx 10% level in case of deficit in rainfall," MK Dhanuka, mananging director, Dhanuka Agritech said in an interview with Myiris.com.
Excerpt from an interview with MK Dhanuka:
1. Recently the BSE has added Dhanuka Agritech in its S&P BSE 500 Index. How to you read this development?
This will further boost the Corporate Image of Dhanuka. It also reflects good performance and Corporate Governance compliance by the Company.
2. As per IMD forecast, Monsoon rainfall this year would be 93% of the long-period average. How to you see impact of lower Monsoon on the agro-chemicals industry?
If monsoons are uniformly distributed throughout the nation at 93% , it will not be a big concern for the agrochemical industry. Distribution of rains is a major parameter, effect of which can be clear by mid July.
Last year, with 11-12% deficit in monsoons, we were at a 7% growth. This year with 93% monsoons, impact on growth may be of the tune of approx 10%, but will get clear only by mid- July.
3. How well are you prepared to face any shortfall in Monsoon this year?
Dhanuka is well established from Kashmir to Kanyakumari reaching a base of 75,000 retailers. Having a wide presence helps to offset the shortfalls to a great level.
4. Dhanuka has launched SEMPRA recently. What is your projected contribution from this product? How many new products are you planning to launch in this financial year?
At Dhanuka Agritech, we believe in bringing new and innovative products for our customers. Our aim has always been to work for the farmer's prosperity and SEMPRA is yet another step in this direction. SEMPRA, a powerful herbicide, is a 9 (3) product of Nissan Chemical Industries, Japan and has been launched for the first time in India by Dhanuka Agritech for the Sugarcane crop.
It has been developed especially for the control of Cyperus Rotundus which is world's most difficult weed.
Presently company is establishing this molecule at grass root level by providing training to farmers and dealers. Dhanuka is conducting large scale demonstrations and showing the performance to farmers. Although the results are amazing, as of now it is difficult to project the contribution; the Company expects that this product will contribute substantially in top-line and bottom-line from 3rd year onwards.
In the upcoming financial year, we do plan to introduce a number of products. In the month of July, we will introduce Renaxypyr under brand name COVER in granules and liquid form which is in technical tie-up with Dupont.
Apart from this Company has recently got approval of 9(3) registration from CIB & RC for CONIKA with Hokko Chemicals, Japan. The Company hopes to launch the molecule in Q2 of this fiscal.
5. 2014-15 financial results showed a decline of 11.3% in cost of materials. Going forward, how to you see movement of input cost in 2015-16?
The raw material cost has reduced by 0.8% only. The prices of few generics have come down. So the farmer will be able to get products at lower rates.
6. The company has closed fiscal 2015 with 14% growth in profit, helped by increase in sales and expansion in margin. Do you think profitability will improve further in financial year 2016?
Dhanuka will try to sustain its margin in F.Y. 2016.
7. Revenues grew at a moderate pace of 6.3% in financial year 2015. Do you think revenue will grow in double digits in fiscal 2016?
In spite of deficient rainfall, we have seen moderate growth of 6.3% this fiscal. We are well positioned to pursue our strong growth potential and are excited about introducing new products.
Further, if we have good monsoon this year, the company expects a growth of approximately 20%. However, growth can remain at approx 10% level in case of deficit in rainfall.
