Buy Dhanuka Agritech; target of Rs 940: Prabhudas Lilladher

Prabhudas Lilladher's research report on Dhanuka Agritech

Dhanuka Agritech (DAGRI) reported subdued set of numbers in-line with our and consensus estimates led by Revenue/EBITDA/PAT growth of +10%/- 6%/+3% YoY, amid challenges related to higher channel inventory and cost pressures. The company remains confident of achieving double digit YoY revenue growth in FY23E with absolute EBITDA to be maintained at FY22 levels citing 1) positive demand outlook in domestic market led by good soil moisture and 2) healthy water reservoir levels (particularly in the Southern India) coupled with remunerative crop prices.

Outlook

We expect Revenue/PAT CAGR of 13%/12% over FY22-FY25E. Maintain ‘BUY’ with an unchanged TP of INR940 based on 15xFY25E EPS.

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Dhanuka Agritech - 14 -02 - 2023 - prabhu