Why Did Dhanuka Agritech’s Q2 Net Profit Decrease by 20% to Rs 94 Crore?
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Synopsis
Dhanuka Agritech Limited has reported a significant decline in its net profit for Q2 FY26, reflecting broader challenges in the agrochemical industry. Despite aiming for revenue growth, the recent financial performance raises questions about the company's future strategies and market conditions.
Key Takeaways
- Net profit for Q2 FY26 decreased by 20% to Rs 94 crore.
- Revenue from operations fell by 8.6% to Rs 598.2 crore.
- EBITDA decreased by 14.4% to Rs 136.6 crore.
- Operating margin contracted to 22.84%.
- Stock closed down by 6.25% after the earnings announcement.
Mumbai, Oct 31 (NationPress) Dhanuka Agritech Limited disclosed a 20% year-on-year (YoY) decline in its net profit for the second quarter of the financial year 2025-26 (Q2 FY26) on Friday. The company's net profit slid to Rs 94 crore in the September quarter, down from Rs 117.5 crore during the corresponding period last fiscal (Q2 FY25), as stated in its stock exchange filing.
Revenue from operations also fell by 8.6% to Rs 598.2 crore compared to Rs 654.3 crore in the same quarter last year.
Meanwhile, Earnings before interest, taxes, depreciation, and amortisation (EBITDA) decreased by 14.4% to Rs 136.6 crore, down from Rs 159.6 crore a year prior.
The company’s operating margin contracted to 22.84%, a decrease from 24.39% in the previous year, as per its regulatory filing.
Following the earnings announcement, shares of Dhanuka Agritech experienced a drop of as much as 7.2%, reaching an intra-day low of Rs 1,352 before slightly rebounding.
At the end of the trading session, the stock closed at Rs 1,366, down by Rs 91 or 6.25% on the National Stock Exchange (NSE).
Earlier this year, the agrochemical company expressed its ambition for a 14-15% revenue growth in FY26, buoyed by a favorable monsoon and improved sales in the second quarter.
The company’s chairman, Mahendra Kumar Dhanuka, characterized the July-September period as pivotal for agrochemical consumption, noting that demand typically peaks during these months.
Dhanuka Agritech Limited stands as one of India’s prominent agrochemical firms, providing an array of herbicides, insecticides, and fungicides.
With a nationwide presence and a network serving over 10 million farmers, the company emphasizes innovation, sustainability, and farmer empowerment.
It has garnered recognition from Forbes Asia for its contributions to agriculture and sustainable practices.
Point of View
The decline in Dhanuka Agritech's profits underscores the challenges facing the agrochemical sector. The drop in net profit and revenue signals potential issues within the industry that may affect farmers and the economy. As Dhanuka navigates these challenges, their strategies will be crucial for sustaining growth and supporting the agricultural community.
NationPress
04/11/2025
Frequently Asked Questions
What caused Dhanuka Agritech's net profit to fall?
Dhanuka Agritech's net profit fell due to an 8.6% decline in revenue from operations and a contraction in operating margin, reflecting broader challenges in the agrochemical sector.
What is Dhanuka Agritech's target revenue growth for FY26?
Dhanuka Agritech is targeting a revenue growth of 14-15% for FY26, supported by favorable weather conditions and improved sales.
How did the stock market react to the earnings announcement?
Following the earnings announcement, Dhanuka Agritech's shares fell by as much as 7.2% but recovered slightly before closing down by 6.25% on the NSE.
What products does Dhanuka Agritech offer?
Dhanuka Agritech provides a variety of agrochemical products, including herbicides, insecticides, and fungicides.
What recognition has Dhanuka Agritech received?
Dhanuka Agritech has been recognized by Forbes Asia for its contributions to sustainable practices in agriculture.
