Prabhudas Lilladher's research report on Dhanuka Agritech
We interacted with senior management of Dhanuka Agritech (Dhanuka) to take an update on the business and outlook, going forward. Key highlights are (a) Delayed start of monsoons have kept ground sentiments lower; (b) weak rainfall in first 20 days (down 8% YoY on a PAN India basis); however major deficiency witnessed in key agricultural belts of central, western and Southern India; (c) 1QFY23 revenue growth for industry likely to be subdued (low double digit growth on a lower base of last year); (d) have taken price hikes of 3-4% across portfolio to pass on inflated cost; (e) RM prices remained stable, led by lower demand in domestic market; (f) Green-field project in Dahej remains well on track. Dhanuka sounded cautious on its 1Q performance, led by erratic monsoons. We believe that next few weeks would be crucial for the industry in terms of 1HFY23 performance (contributing ~60% of the annual revenues).
However, pick-up in rainfall and sowing activities coupled with remunerative crop prices and lower base impact should bode well for the kharif season. We largely keep our estimates unchanged and would be watchful on how monsoons pan out over the next few weeks. Maintain ‘BUY’ with TP of INR870 based on 15xFY24E EPS. (5-year high/low 41x/7x, average 21x).
At 12:22 hrs Dhanuka Agritech was quoting at Rs 682.50, up Rs 11.35, or 1.69 percent.
It has touched an intraday high of Rs 683.00 and an intraday low of Rs 673.10.
It was trading with volumes of 154 shares, compared to its thirty day average of 2,167 shares, a decrease of -92.89 percent.
In the previous trading session, the share closed down 3.14 percent or Rs 21.75 at Rs 671.15.
The share touched its 52-week high Rs 1,053.15 and 52-week low Rs 635.20 on 06 July, 2021 and 24 February, 2022, respectively.
Currently, it is trading 35.19 percent below its 52-week high and 7.45 percent above its 52-week low.
Market capitalisation stands at Rs 3,178.97 crore.
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