Q1 2027 Dhanuka Agritech Ltd Earnings Call
Speaker #1: Ladies and gentlemen, good day and welcome to the Dhanuka Agritech Q1 FY27 post-results conference call. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Operator 2: Ladies and gentlemen, good day and welcome to Dhanuka Agritech Limited Q1 FY27 Post-Result Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stock Broking. Thank you, and over to you, sir.
Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on a touch-tone phone. Please note that this conference has been recorded.
Speaker #1: I now hand over the conference to Mr. Manish Mahavar from Antique Stock Broking. Thank you, and over to you, sir.
Speaker #2: Thank you, Sumit. On behalf of Antique Stock Broking, a warm welcome to all the participants on the Q1 FY27 earnings call of Dhanuka Agritech. Today, we have the leadership team represented by Mr. N.K. Dhanuka, Chairman; Mr. Rahul Dhanuka, Managing Director; and Mr. V.K. Bansal, CFO, on the call.
Manish Mahawar: Thank you, Sumit. On behalf of Antique Stock Broking, a warm welcome to all the participants on the Q1 FY27 Earnings Call of Dhanuka Agritech. Today we have leadership team represented by Mr. N.K. Dhanuka, Chairman, Mr. Rahul Dhanuka, Managing Director, and Mr. V.K. Bansal, CFO on the call. Without further ado, I would like to hand over the call to Mr. N.K. Dhanuka for opening remarks. Thank you. Over to you, Mr. Dhanuka.
Speaker #2: Without further ado, I would like to hand over the call to Mr. N.K. Dhanuka for opening remarks. Thank you, and over to you, Mr. Dhanuka.
Speaker #3: Thank you, Manish ji. Good afternoon, ladies and gentlemen. Myself, M.K. Dhanuka, Chairman of Dhanuka Agritech Limited, and I welcome you all to the Q1 FY26-27 earnings conference call.
N.K. Dhanuka: Thank you, Manish. Good afternoon, ladies and gentlemen. Myself, I'm N.K. Dhanuka, Chairman of Dhanuka Agritech Limited, and I welcome you all to the Q1 FY26-27 Earnings Conference Call. I have with me Mr. Rahul Dhanuka, Managing Director, and Mr. V.K. Bansal, CFO of the company. As you are aware, Dhanuka Agritech is among India's leading agrochemical companies with a long-standing commitment towards advancing Indian agriculture through technology-led crop solutions. Over the years, we have built a strong pan-India franchise with deep farmer engagement, a differentiated product portfolio, and a robust distribution network. Today, we reach more than 10 million farmers across India through approximately 6,500 distributors and over 80,000 retailers. Supported by four manufacturing facilities and 41 warehouses, we continue to strengthen our ability to deliver products efficiently across key agricultural markets.
Speaker #3: I have with me Mr. Raul Dhanuka, Managing Director, and Mr. V.K. Bansal, CFO of the company. As you are aware, Dhanuka Agritech is among India's leading agrochemical companies, with a long-standing commitment towards advancing Indian agriculture through technology-led crop solutions.
Speaker #3: Over the years, we have built a strong pan-India franchise with deep farmer engagement, a differentiated product portfolio, and a robust distribution network. Today, we reach more than 10 million farmers across India through approximately 6,500 distributors and over 80,000 retailers.
Speaker #3: Supported by four manufacturing facilities and 41 warehouses, we continue to strengthen our ability to deliver products efficiently across key agricultural markets. A key differentiator for Dhanuka has been our consistent focus on the introduction of innovative and globally relevant chemistries in the Indian market.
N.K. Dhanuka: A key differentiator for Dhanuka has been our consistent focus on introduction of innovative and globally relevant chemistries in the Indian market. Our partnership with 10 leading multinational agrochemical innovators from Japan, Europe, and the United States continue to provide us access to advanced technologies in differentiated solutions for Indian farmers. Our two R&D centers, supported by NABL-accredited laboratories and a strong regulatory and product development team, remain focused on product registration, formulation development, and strengthening our future growth pipeline. The agrochemical industry witnessed a significantly challenging Q1 of FY2026/2027. Across the sector, revenue growth remained under pressure due to delayed monsoon onset in several key agricultural regions, which postponed sowing activities and led to reduction in product demand from Q1 to the subsequent months. Industry estimates indicated modest revenue growth, while profitability remained under pressure, owing to weaker domestic demand and price competition.
Speaker #3: Our partnership with 10 leading multinational agrochemical innovators from Japan, Europe, and the United States continues to provide us access to advanced technologies in differentiated solutions for Indian farmers.
Speaker #3: Our two R&D centers, supported by NABL-accredited laboratories and a strong regulatory and product development team, remain focused on product registration, formulation development, and strengthening our future growth pipeline.
Speaker #3: The agrochemical industry witnessed a significantly challenging first quarter of FY26–27. Across the sector, revenue growth remained under pressure due to delayed monsoon onset in several key agricultural regions, which postponed sowing activities and led to a reduction in product demand from the first quarter to the subsequent months.
Speaker #3: Industry estimates indicated modest revenue growth, while profitability remained under pressure owing to weaker domestic demand and price competition. You are well aware that in the month of June, we had a 40% shortfall in the rain, and by the end of July, it came down to a 15% shortfall.
N.K. Dhanuka: You are well aware that in the month of June, we had 40% shortfall in the rain, and by the end of July, it came down to 15% shortfall. Even 1% shortfall in the rainfall impacts the sowing areas and the overall growth of the crops. In addition, the sector continued to face challenges arising from elevated raw material and logistics costs during the quarter. Several companies attempted price increases during the initial months of the season to offset higher costs linked to geopolitical tensions in West Asia. However, weak market demand limited the sustainability of such hikes. Against this backdrop, I would like to share that Dhanuka delivered a subdued operational and financial performance during the quarter. Revenue from operations for Q1 FY2026/2027 stood at INR 461.93 crore as compared to INR 528.29 crore in Q1 of FY2025/2026, registering a degrowth of approximately 12.56%.
Speaker #3: So even a 1% shortfall in rainfall impacts the sowing areas and the overall growth of the crops. In addition, the sector continued to face challenges arising from elevated raw material and logistics costs during the quarter.
Speaker #3: Several companies attempted price increases during the initial months of the season to offset higher costs linked to geopolitical tensions in West Asia. However, weak market demand limited the sustainability of such hikes.
Speaker #3: Against this backdrop, I would like to share that Dhanuka delivered a subdued operational and financial performance during the quarter. Revenue from operations for Q1 FY26-27 stood at Rs.
Speaker #3: ₹461.93 crores, as compared to ₹528.29 crores in Q1 of FY25-26, registering a de-growth of approximately 12.56%. EBITDA for the quarter stood at ₹...
N.K. Dhanuka: EBITDA for the quarter stood at INR 55.01 crore, and profit after tax stood at INR 36.30 crore. Our balance sheet and cash generation continue to remain strong, providing us the flexibility to invest for future growth while overcoming the short-term headwinds and turbulence. The zone-wise contribution to turnover for Q1 FY2026/2027 was north contributed 36%, east contributed lowest, 9%, west contributed 37%, and south contributed 18%. Product category-wise share was insecticides contributed 25%, fungicides contributed 14%, herbicides contributed 42%, and others contributed 19%. While the Q1 was impacted by delayed seasonal demand, pricing pressures, and external uncertainties, we believe these are largely cyclical challenges. The long-term growth drivers of the Indian agrochemical industry remain intact, and we remain optimistic about stronger momentum in the coming quarters.
Speaker #3: Rs. 55.01 crores, and profit after tax stood at Rs. 36.30 crores. Our balance sheet and cash generation continued to remain strong, providing us the flexibility to invest for future growth while overcoming the short-term headwinds and turbulence.
Speaker #3: The joint-wide contribution to turnover for Q1, FY26-27 was north-contributed 36%, east-contributed lowest 9%, west-contributed 37%, and south-contributed 18%. Product category-wise, share was insecticide-contributed 25%, fungicides-contributed 14%, herbicides-contributed 42%, and others-contributed 19%.
Speaker #3: While the first quarter was impacted by delayed seasonal demand, pricing pressures, and external uncertainties, we believe these are largely cyclical changes. The long-term growth drivers of the Indian agrochemical industry remain intact, and we remain optimistic about stronger momentum in the coming quarter.
Speaker #3: The shareholders of the company, in the 41st Annual General Meeting held today at 11:00 a.m., considered the final dividend of 100%, that is, Rs.
N.K. Dhanuka: The shareholders of the company in the 41st Annual General Meeting held today at 11:00 AM considered the final dividend of 100%, that is INR 2 per equity share, having face value of INR 2 per share, and the result for the dividend will be declared within due course. The company already rewarded the shareholder with a buyback of 500,000 equity shares at the rate of INR 1,400 per equity share, absorbing INR 70 crore. Further, it is to inform you that the company has acquired land at Nagpur, Maharashtra for setting up a new manufacturing plant. This is in the Butibori zone of Nagpur, the industrial area. The total estimated outlet for the project is expected to be up to INR 200 crore. The proposed capacity of the plant will be 23,000 metric tons per annum.
Speaker #3: Rs. 2 per equity share, having a face value of Rs. 2 per share, and the result for the dividend will be declared in due course. The company already rewarded the shareholders with a buyback of 5 lakh equity shares at the rate of Rs.
Speaker #3: 1,400 per equity share, absorbing Rs. 70 crores. Further, it is to inform you that the company has acquired land at Nagpur, Maharashtra, for setting up a new manufacturing plant.
Speaker #3: This is in the Butibori zone of Nagpur, the industrial area. The total estimated outlay for the project is expected to be up to Rs.
Speaker #3: 200 crores. The proposed capacity of the plant will be 23,000 metric tons per annum. It is expected that the set plan will be operational by April 2028.
N.K. Dhanuka: It is expected that the said plant will be operational by April 2028. We are pleased to inform you that in the upcoming months, we are planning to launch five new products consisting of one liquid fertilizer, three fungicides, and one herbicide. At Dhanuka, we continue to believe that sustainable business growth must go hand in hand with
Speaker #3: We are pleased to inform you that, in the upcoming months, we are planning to launch five new products, consisting of one liquid fertilizer, three fungicides, and one herbicide.
Speaker #3: Dhanuka will continue to believe that sustainable business growth must go hand in hand with farmer prosperity and national food security. Our continued engagement with agricultural universities and other scientific institutions remains an important part of our farmer education and technology dissemination efforts.
Rahul Dhanuka: With farmer prosperity and national food security. Our continued engagement with agriculture universities, Krishi Vigyan Kendras, and other scientific institutions remains an important part of our farmer education and technology dissemination efforts. Thank you very much for your kind attention. We would now like to open the floor for questions. Thank you.
Speaker #3: Thank you very much for your kind attention. We would now like to open the floor for questions. Thank you.
Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone.
Operator 2: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rishabh Shah from Bhagal Rock PMS. Please go ahead.
Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.
Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rishabh Shah from Bagal Rock PMS.
Speaker #1: Please go ahead.
Speaker #2: Hi, sir. My question is about the products which we had acquired from Bayer. Have we expanded our distribution reach in other countries? And we had appointed some customers also in five countries, and we were planning some more expansion.
Rishabh Shah: Hi. My question is about the products which we had acquired from Bayer. Has we expanded our distribution reach in other countries? We had pointers of customers also in five countries, and we were planning for more expansion. You had also mentioned that these are some real challenges which we are facing. Just wanted an update on this one.
Speaker #2: And we had also mentioned that these are some real challenges which we are facing. So, just wanted an update on this one.
Speaker #3: So we have acquired IPRO Valley Carb and its variants, and tried them all in their variants from Bayer. For global markets, and as we speak, we have already established some customers in various markets and have already started business with them.
Rahul Dhanuka: We have acquired Iprovalicarb and its variants and Triadimenol and its variants from Bayer for global markets. As we speak, we have already established some customers in various markets and already business started with them. Whereas in some markets, we are yet to establish our distribution setup, which is ongoing as we speak. As we speak, the Executive Director of International Business, Harsh, is traveling to these markets in US and Brazil, meeting with customers, existing as well as prospective.
Speaker #3: Whereas in some markets, we are yet to establish our distribution setup, which is ongoing as we speak. Also, as we speak, the Executive Director of International Business, Harsh, is traveling to these markets in the US and Brazil, meeting with customers, existing as well as prospective.
Speaker #2: Okay. And so, in terms of revenue, could you please tell us how much these products would contribute to the top line in FY27?
Rishabh Shah: In terms of revenue, could you please tell us how much would these products contribute to the top line in FY27?
Rahul Dhanuka: As of now, we are not sharing the number of how much Triadimenol and Iprovalicarb will be sharing in FY27. Yes, we'll address this query separately.
Speaker #3: As of now, we are not sharing the number of how many have tried them in all, and IPRO Valley Carb will be sharing in FY27.
Speaker #3: But yes, we'll address this query separately.
Speaker #2: Okay, so my next question is: The products we introduced in the last years, like Micro Super and Verdor—how much do the new product launches contribute towards the top line?
Rishabh Shah: My next question is the products we introduced in the last years like MYCORe Super and Verdor. How much do the new product launches contribute towards the top line? Has that ratio increased over the years? Also, I wanted to know the thought process when you introduce new products, what are the management's internal target for the return ratios and margins which they would like to command? Does it differ from segment to segment?
Speaker #2: And has that ratio increased over the years? Also, I wanted to know the thought process when you introduce new products—what are the management's internal targets for the return ratios and margins that they would like to command?
Speaker #2: And does it differ from segment to segment?
Speaker #3: Right. So, how we track our performance on new product introduction is through the innovation turnover index. And we maintained a healthy innovation turnover index last year.
Rahul Dhanuka: Right. What we track our performance on new product introduction is through innovation turnover index. We have maintained a healthy innovation turnover index. Last year it was about 13.89%. Verdor, which is a biological bio-nutrition for various crops. We introduced late last year, sometime in September, and we have seen good traction for Verdor in the first quarter this year. There was no significant movement last year. MYCORe Super was introduced the year before. That was in FY25. MYCORe Super was introduced in Q1 FY25. It did really well in FY25. It has done extremely well in FY26 also. This year, Q1 also, MYCORe Super has received good traction across the geographies and across cereal crops, pulses, sugarcane, and even horticulture crops.
Speaker #3: It was about 13.89%. And Verdor, which is a biological—sorry, not calcium—it's a biological bionutrition for various crops. We introduced it late last year, sometime in September.
Speaker #3: And we have seen good traction for Verdor in the first quarter this year. There was not significant movement last year. Micro Super was introduced the year before.
Speaker #3: That was in FY25. Micro Super was introduced in Q1 FY25. It did really well in FY25. It has done extremely well in FY26 also.
Speaker #3: And this year, Q1 also, Micro Super has received good traction across the geographies and across cereal crops, pulses, sugarcane, and even horticulture crops.
Speaker #2: Okay. And so that's the second part of my question. What is the thought process when you introduce a new product? And from internal management, what are the targets for the return ratio or the margins which you would like to command?
Rishabh Shah: Okay. Just the second part of my question was, the thought process when you introduce a new product and some internal management, let the targets for the return ratios or the margins which you would like to command, would it differ from segment to segment?
Speaker #2: And would it differ from segment to segment?
Speaker #3: Yes, it differs from segment to segment, since at Dhanuka we introduced new patented products also—new chemistries from various Japanese makers, our Japanese partners, and their pre-mixes.
Rahul Dhanuka: Yes, it differs from segment to segment since at Dhanuka, we introduce new patented products also, new chemistries from various J-makers, Japanese partners and their premixes. They fall in a premium category, we command a different margin on those product. Nutrition products also mostly have a differentiated and a premium margin. MYCORe Super and Verdor both would fall in same category. We introduced various me-too products and co-marketing products also time to time, which would normally fall in a lower margin category as compared to 9(3) products or nutrition. We benchmark a healthy 20% margin minimum for any new introduction, mostly 9(3) and nutrition would have significantly higher, more than double sometimes.
Speaker #3: They fall in a premium category, and we command a different margin. On those products, nutrition products also mostly have a differentiated and premium margin.
Speaker #3: Micro, Super, and Verdor would both fall in the same category. We introduced various 'me too' products and co-marketing products from time to time, which would normally fall in a lower margin category as compared to 9(3) products or nutrition.
Speaker #3: We benchmark a healthy 20% margin minimum for any new introduction. But mostly, 93 and Nutrition would have significantly higher—more than double sometimes.
Speaker #2: Okay. And so, my last question.
Rishabh Shah: Okay.
Speaker #1: Sorry to interrupt, Mr. Rishabh. Please rejoin the queue for more questions. Ladies and gentlemen, you are requested to restrict your questions to two per participant.
Operator 2: Sorry to interrupt, Mr. Rishabh. Please rejoin the queue for more questions. Ladies and gentlemen, you are requested to restrict your question to two per participant. The next question is from the line of Umang Shah from Banyan Tree Advisors PMS. Please go ahead. Hello, Mungsha. Please go ahead.
Speaker #1: The next question is from the line of Umang Shah from Banyan Tree Advisors PMS. Please go ahead. Hello, Umang Shah, please go ahead.
Speaker #2: Hi. Am I audible?
Umang Shah: Hi, am I audible?
Speaker #3: Yes.
V.K. Bansal: Yes.
Speaker #2: Hello. Yeah, yeah. Thank you for taking my question. Sir, my first question is: What is the update on the GST notice that we received a couple of months back?
Umang Shah: Hello. Yeah. Thank you for taking my questions. Sir, my first question was, what is the update on the GST notice that we had received a couple of months back?
V.K. Bansal: You see, we have already appointed Lakshmikumaran as a consultant. Now his date will be announced. That is under consideration. It will take a little more time.
Speaker #3: You see, we have already appointed our Lakshmi Kumar and a consultant. अभी उसका date पड़ेगा, so that is under consideration. It will take a little more time.
Speaker #2: And are we confident that the order is in our favor?
Umang Shah: Are we confident that the order will be in our favor?
Speaker #3: Sure, sure, sure. Now, these molecules are categorized under the category of fertilizer. So currently, the SHE, as per the circular rate, is 5%.
V.K. Bansal: Sure. These molecules are actually categorized under that category of fertilizer. Currently, as per the circular, it is 5%. We are sure we'll win the case, absolutely. There's no doubt about it.
Speaker #3: So, we are sure we'll win the case absolutely. There's no doubt about it.
Umang Shah: Okay. Great. That's a relief to hear. The second question was two parts. One was, are we looking to sign more deals in the international market like we did with Bayer? Will it also help feed our Dahej plant capacity?
Speaker #2: Okay, okay. Great, great. That's a relief to hear. And the second question was in two parts. One was, are we looking to sign more deals in the international market, like we did with buyers?
Speaker #2: And will it also help feed our drainage plant capacity?
Speaker #3: Right. Thanks for that question. As you are aware, Dhanuka is a debt-free company. We have a strong balance sheet, and it has been like that for many years.
Rahul Dhanuka: Right. Thanks for that question. As you are aware, Dhanuka is a debt-free company. We have a strong balance sheet and have been like that for many years. Yes, we are scouting out for good inorganic growth opportunities, including product portfolio. Leveraging our capabilities in Dahej plant is always an expanded option. Yet our strength in Indian market access, as well as capabilities to manufacture synthesized products in Dahej, altogether are various dimensions across which we explore acquisition.
Speaker #3: So yes, we are scouting out for good inorganic growth opportunities, including portfolio. Leveraging our capabilities in the HEDGEPLANT is always an expanded option.
Speaker #3: Yet our strength in the Indian market, market access, as well as capabilities to manufacture synthesized products in the hedge, altogether are various dimensions across which we explore acquisition.
Speaker #2: Okay, okay. And, sir, this Nagpur plant, is it going to be a formulation plant, or is it going to be a technical plant like the one at Dahej?
Umang Shah: Okay. Sir, this Nagpur plant, is it going to be a formulation plant or is it going to be a technical plant like Dahej?
Speaker #3: This is going to be a formulation unit.
Rahul Dhanuka: This is going to be a formulation unit.
Speaker #2: All right, all right. Thank you so much. I will get back in the queue.
Umang Shah: All right. Thank you so much. I will get back in the queue.
Speaker #1: Thank you. The next question is from the line of Darshita Shah from DSP Asset Managers. Please go ahead.
Operator 2: Thank you. The next question is from the line of Darshita Shah from DSP Asset Managers. Please go ahead.
Speaker #4: Hi, sir. My first question is regarding the guidance cut that we have made in the PPT for FY27. I just wanted your thoughts on why there is such a steep cut, especially on the top-line growth front.
Darshita Shah: Hi, sir. My first question was regarding the guidance cut that we have done in the PPT for FY27. Wanted your thoughts on why such a steep cut, especially on the top-line growth front.
Speaker #3: So, as you can obviously see, the movement of the monsoon and its impact from various angles—I think this is where we estimate our best position to be.
Rahul Dhanuka: As you can obviously see the movement of monsoon and its impact from various angles. I think so, this is where we estimate our best position to be. We are still pretty hopeful of the growth that will come in Q2 and Q3. Yet it is absolutely appropriate that we project a clear picture to our investors.
Speaker #3: We are still pretty hopeful about the growth that will come in Q2 and Q3. And yet, it is absolutely appropriate that we project a clear picture to our investors.
Darshita Shah: Got it. It's safe to assume that Q2 so far has also not seen a larger growth, given that we had some benefit of the base as well, last year same quarter.
Speaker #4: Got it. But so, I mean, it's safe to assume that the second quarter so far has also not seen significant growth, given that we had some benefit of the base as well in last year's same quarter.
Speaker #3: That's right.
Rahul Dhanuka: That's right.
Speaker #4: All right. Okay. Secondly, on the new facility—the 23,000-ton facility—₹200 crore capex for a formulation unit seems a little high, isn't it?
Darshita Shah: All right. Okay. Secondly, on the new facility, the 23,000 tons facility. INR 200 crore CapEx for a formulation unit seems a little high, isn't it?
Rahul Dhanuka: How do you arrive at it is high? I don't get.
Speaker #3: How do you determine that it is high?
Speaker #4: No, no. Because—no, no. So why? Because for the technical plant, we had set up, we had expanded roughly to about ₹5,300-odd crores.
Darshita Shah: For the technical plant we had set up, we had expended roughly about INR 250, 300 odd crore. Usually, the thought is that formulation plant about INR 60, 70 odd crore is something that we do and we expect a seven, eight times asset turns on a formulation plant. That's why I just wanted your thoughts on the same.
Speaker #4: Usually, the thought is that the formulation plant is about 60 to 70-odd crores or something that we do, and we expect 7 to 8 times asset turns.
Speaker #4: On a formulation plant, so that's why I just wanted your thoughts on the same.
Speaker #3: We are imagining this plant to be significantly automated, cutting down on labor dependencies and making this plant a global standard in terms of both safety and efficiency.
Rahul Dhanuka: We are imagining this plant to be significantly automated plant, cutting down on labor dependencies, making this plant of global standard in terms of both safety and efficiency.
Speaker #3: So, with that automation in mind, we are expecting initially a relatively higher capex.
Rahul Dhanuka: With that automation in mind, we are expecting initially a relatively higher CapEx.
Speaker #4: Okay. But I'm guessing, given that it's a new land, some part of the ₹200 crore would go towards setting up the utilities and everything.
Darshita Shah: Okay. I'm guessing given that it's a new land, some part of the INR 200 crore would go for setting up the utilities and everything.
Speaker #3: Yes, it will be.
Rahul Dhanuka: Yes, it will be.
Speaker #4: Got it. Got it. And the asset terms, we should think about it at like seven or eight times.
Darshita Shah: Got it. The asset turns, we should think about it at seven, eight times.
Speaker #3: I think this is probably not the right time for me to comment on the asset terms part, but I think we'll be able to come back and address this once the project details and everything are finalized, which is probably late in last Q4.
Rahul Dhanuka: I think so this is probably not the right time for me to come on the asset turns part, I think so we'll be able to come back and address this towards once the project details and everything are deeply finalized, which is probably late Q4.
Speaker #4: Got it. Okay. Until then, if you could just give us the split for the hedge side revenue, EBITDA, and bare product revenue and royalty?
Darshita Shah: Got it. Okay. Vensalji, if you could just give us the split for the Dahej site revenue EBITDA and Bayer product revenue and royalty for Q1.
Speaker #4: For first quarter.
V.K. Bansal: You see, in terms of Dahej, the turnover last year it was around INR 16 crore. This year is around INR 26 crore. In terms of EBITDA, last year EBITDA was -INR 3 crore. This year is less than INR 1 crore.
Speaker #3: You see, in terms of the hedge, the turnover last year was around ₹16 crore. This year it is around ₹26 crore. In terms of EBITDA, last year EBITDA was negative ₹3 crore.
Speaker #3: This year it is less than 1 crore.
Speaker #4: Okay, so sorry. Could you repeat the revenue number again?
Darshita Shah: Okay. Sir, sorry, could you repeat the revenue number again?
Speaker #3: Revenue is 26 versus 16.
V.K. Bansal: Revenue is INR 26 versus INR 16.
Speaker #4: Okay. Okay. Okay. Got it. And for bare product?
Darshita Shah: Okay. Got it. For Bayer product?
Speaker #3: Bare product revenue is not actually coming in our books in Q1.
V.K. Bansal: Bayer product revenue is not actually coming in our books in the Q1.
Speaker #4: Okay. And the royalty?
Darshita Shah: Okay. The royalty?
Speaker #3: Royalty is significantly lower as compared to last year—it is around ₹4 crore.
V.K. Bansal: Royalty is significantly lower as compared to last year. It is around INR 4 crore.
Darshita Shah: All right. Okay. Sir, just your thoughts and just one last question on your thoughts on, do we have any threshold on how much do we plan on spending on these Bayer products to set up a distribution network in the export markets?
Speaker #4: All right. Okay. So just your thoughts. And just one last question. On your thoughts on do we have any threshold on how much do we plan on expanding on these bare products to set up a distribution network in the export markets?
Speaker #3: As of now, not on that front.
Rahul Dhanuka: As of now, not on that front.
Speaker #4: All right. Okay. Thank you. Thank you for the opportunity. Thanks, that's all.
Darshita Shah: All right. Okay. Thank you. Thank you for the opportunity. Thanks. That's all.
Speaker #1: Thank you. The next question is from the line of Deesha Chamarya from TriNitra Asset Managers. Please go ahead.
Operator 2: Thank you. The next question is from the line of Disha Chamaria from Triany Transact Managers. Please go ahead.
Disha Chamaria: Hello. Can you hear me, sir?
Speaker #5: Hello.
Speaker #3: Yeah.
Rahul Dhanuka: Yeah.
Speaker #5: Thank you so much for the opportunity. Most of my questions are already answered, but a few questions for myself. After this harvest season, how would you categorize inventory level at distributors and retailers?
Disha Chamaria: Thank you so much for the opportunity. Most of my questions are already answered, but a few questions from my side. After this kharif season began, how would you categorize inventory level at distributors and retailers? Are inventories broadly aligned with the primary sales, or do you see any stocking or destocking trend emerging?
Speaker #5: Are inventories broadly aligned with the primary sales, or do you see any stocking or destocking trends emerging?
Speaker #3: And this year, seeking for which window?
Rahul Dhanuka: This you are seeking for which window?
Speaker #5: Go ahead. This year is Q1, Q2.
Disha Chamaria: For this year, sir, Q1, Q2.
Speaker #3: Quarter one, quarter two. So, okay. Now, as you are aware, the last financial year ended with a significant increase in prices and a fear of non-availability.
Rahul Dhanuka: Q1, Q2. Okay. Now, as you are aware that last financial year ended with significant increase in prices and a fear of non-availability. There was probably some front-loading in the market in the beginning of the year. As the season is progressing, we don't see either way, stocking or destocking happening. Business is progressing on the go as per the market demand, and inventory rotation is happening normally. I don't foresee any stocking or destocking by end of Q2, either way.
Speaker #3: So, there was probably some front-loading in the market at the beginning of the year. As the season is progressing, we don't see it either way.
Speaker #3: Stocking or destocking is happening. Business is progressing. On the go, as per the market demand, and inventory rotation is happening normally. So, I don't foresee any stocking or destocking by end of Q2.
Speaker #3: Either way.
Disha Chamaria: Okay. Recently we have launched many products and upcoming also we have many products. Could you please share how much of the Q1 revenue came from products which were launched over last two years or last three years? What contribution you expect from these products over the next two to three years?
Speaker #5: Okay. And recently, we have launched many products, and going forward also, we will have many products. So could you please share how much of the Q1 revenue came from products which were launched over the last two years or last three years?
Speaker #5: And what contribution do you expect from these products over the next two to three years?
Speaker #3: I've really not pulled out this part of the data, yeah. But as far as ITI is concerned, it's around 11.56%, which is a contribution against the last three years' introductions.
Rahul Dhanuka: I've really not pulled out this part of the data.
V.K. Bansal: As per our ETR is concerned, is around 11.56%, which is a conclusion of just the last three years' introductions.
Disha Chamaria: Got it, sir. Thank you.
Speaker #5: Got it. Thank you.
Speaker #1: Thank you. The next question is from the line of Prashant Prashant from Elara Securities. Please go ahead.
Operator 2: Thank you. The next question is from the line of Prashant. Prashant from Elara Securities. Please go ahead.
Speaker #2: Yeah, thank you for the opportunity. Rahuljit, Q1 was supposed to be a decent quarter, I think, in general, because of the price increase, and the industry might have got the benefit of some low-cost inventory.
[Company Representative] (Elara Securities): Yeah, thank you for the opportunity. Rahulji, Q1 was supposed to be a decent quarter, I think, in general because of price increase and the industry might have got benefit of some low-cost inventory that we would have carried for the kharif season from Q4. It does not seem to be so. Some more details from you on how Q1 panned out actually and how is the situation in Q2 on ground would be very helpful.
Speaker #2: That we would have carried for the Kharif season from Q4, but it does not seem to be so. So, some more details from you on how Q1 panned out actually, and how the situation is on the ground in Q2 would be very helpful.
Speaker #3: Yeah. So, Q1 for us, and I believe for the industry in general, is herbicide-heavy—weedicide-heavy for soybean, cotton, and various other crops across large parts of the geography. Especially, these were some of the states which were worst impacted in Q1.
Rahul Dhanuka: Yeah. Q1, for us and I believe industry general, is herbicide heavy.
[Company Representative] (Elara Securities): Yeah.
Rahul Dhanuka: Herbicides heavy for soybean, cotton, various other crops across large parts of the geography, including. These were some of the states which were worst impacted.
Speaker #2: Sorry to interrupt,
Operator 2: Sorry to interrupt, sir. Sorry to interrupt, sir. Your voice is not audible. Your voice is cracking a little bit.
Speaker #1: Sir, sorry to interrupt. Your voice is not audible; it is cracking a little bit.
Speaker #3: I'm sorry. Tell me, Sumit, is it better now?
Rahul Dhanuka: I'm sorry. Tell me, Sumit, is it better now?
Speaker #1: Yes, sir. Please go ahead.
Operator 2: Yes, sir. Please go ahead.
Speaker #3: Thanks. I'll read that part. So Rajasthan, Gujarat, Madhya Pradesh, and Maharashtra import cotton and soybean markets. They took a major beating in terms of rainfall, especially in the month of June.
Rahul Dhanuka: Thanks. I'll repeat that part. Rajasthan, Gujarat, Madhya Pradesh, Maharashtra import cotton and soybean markets. They took a major beating in terms of rainfall, especially in the month of June. In some pockets, farmer had to even go for re-sowing. That is where herbicides for Dhanuka have taken a hit. That's reflected in our Q1 performance. In terms of south, also the sentiments have not been good. The rainfall has not been good in June as well as in July. Going to Q2, July, while various districts and some pockets have seen excessive rainfall, a large part of the country remains deficit in rainfall. That's how July is moving. Of course, July has done better than June, yet what we see is a difficult quarter.
Speaker #3: And in some pockets, farmers had to even go for re-sowing. That is where herbicides for Dhanuka have taken a hit, and that's how that's reflected in our Q1 performance.
Speaker #3: In terms of the South also, the sentiments have not been good. The rainfall has not been good in June, as well as in July. Moving to Q2, while various districts and some pockets have seen excessive rainfall, a large part of the country remains deficit in rainfall.
Speaker #3: And that's how July is moving. Of course, July has done better than June. Yet, what we see is a difficult quarter.
Speaker #2: Okay, sir. Senior revenue breakdown segment-wise—herbicide declining by around 25% is understandable, but in a season of heavy herbicide consumption, fungicide sales are up 11%.
[Company Representative] (Elara Securities): Okay. Sir, seeing your revenue breakdown segment-wise, herbicide declining by around 25% is understandable. In a season of herbicide-heavy consumption wise, fungicide sales up 11%.
Speaker #3: Fungicide sale is 14%, not 11%.
Rahul Dhanuka: Fungicide sale is 14%, not 11%.
Speaker #2: No, YOI growth.
[Company Representative] (Elara Securities): No, YOY growth.
Rahul Dhanuka: Okay. I didn't get your question.
Speaker #3: Okay. I didn't get your question.
Speaker #2: Sir, fungicide sales was up 11% year on year in Q1. Generally, Q1 is a herbicide placement season, and insecticide-fungicide takes a back seat. For Q2, because the sales are generally higher in Q2.
[Company Representative] (Elara Securities): Sir, fungicide sales was up 11% year on year in Q1. Generally Q1 is a herbicide placement season and insecticide, fungicide takes a back seat because the sales are generally higher in Q2. Why is fungicide sales also up 11% this quarter?
Speaker #2: But why are fungicide sales also up 11% this quarter?
Speaker #3: This is very interesting. Some, in a very specific fungicide—a very special Japanese fungicide—has a special traction in the dry season in horticulture crops.
Rahul Dhanuka: This is very interesting. Some in a very specific fungicide, a very special Japanese fungicide has a special traction in dry season in horticulture crops. Now, high horticulture prices, for example, tomato, cucurbits, et cetera, gave traction for these two products. That's why fungicide has grown in Q1. Whereas you are conventionally right, Q2 is a fungicide quarter.
Speaker #3: Now, high horticulture prices—for example, tomato, cucurbits, etc.—gave traction for these two products. And that's why fungicide has grown in Q1. Whereas you are conventionally right, Q2 is a fungicide quarter.
Speaker #2: Sir, which molecules would these be? Or which brands?
[Company Representative] (Elara Securities): Which molecules would these be or which brands would these be?
Speaker #3: Green sodium. Misodium. And Guanica.
Rahul Dhanuka: Nissodium.
[Company Representative] (Elara Securities): Conika.
Rahul Dhanuka: Conika.
Speaker #2: And Geneteza. Okay. And just last question for Mr. Bansal. Sir, generally in a weak quarter, you have, in general, very tight control on cost.
[Company Representative] (Elara Securities): Geneta as well. Okay. Just last question from Mr. Bansal. Sir, generally in a weak quarter, in general you have very tight control on cost. At this time, against a 12% revenue decline, your other expenses are flat. Is there any one-off in this quarter or you were not able to control it this time?
Speaker #2: And at this time, against a 12% revenue decline, your other expenses are flat. So, is there any one-off in this quarter, or were we not able to control it this time?
Speaker #3: I mean, we are able to control them. We are flat. You see, it's very difficult—you see, when the expenses are at the same level.
Rahul Dhanuka: We are able to control that so we are flat. It's very difficult to maintain the expense at the same level. All the expenses, many expenses are basically incurred in anticipation of the season. Their planning is done significantly ahead of the season. Right?
Speaker #3: Because you see, many expenses are basically incurred in anticipation of the season. Their planning is done significantly ahead of the season.
Speaker #3: Right?
Speaker #2: Yeah.
[Company Representative] (Elara Securities): Yeah.
Speaker #3: So expenses, you see, because of tight control, are flat in terms of percentage or more. But in absolute value, almost the same. Similar.
Rahul Dhanuka: Expenses are, because of tight control, flat in terms of percentage or more, but in absolute value, almost same. Similar.
Speaker #2: Okay, sir. I'll go back to the queue.
[Company Representative] (Elara Securities): Okay, sir. I'll go back to the queue.
Speaker #1: Thank you. The next question is from the line of Riju from Antique Stock Broking. Please go ahead.
Operator 2: Thank you. The next question is from the line of Riju from Antique Stock Broking. Please go ahead.
Speaker #4: Yeah. Hi, sir. My question is regarding whether you could break up the revenue growth in terms of volume and value.
[Analyst] (Antique Stock Broking): Yeah. Hi, sir. My question is regarding if you could break up the revenue growth in terms of volume, and value.
Speaker #3: Yeah. You see, in terms of value and volume growth, it is almost similar. Value is negative by 12.56%, and volume is around the same—12.7%.
Rahul Dhanuka: Yeah. In terms of value, volume growth, it is almost similar. Value is negative by 12.56, and volume is around 12.7 type.
Speaker #4: Okay. So the value growth was partially led by the increase in input costs. Right?
[Analyst] (Antique Stock Broking): Okay. The value growth was partially led by the increase in the input cost, right?
Speaker #3: It's almost the same. Similar. Value and volume, there is hardly any difference.
Rahul Dhanuka: It's almost same. Similar. Value or volume, there's hardly any difference.
Speaker #4: No, sorry. My question was: the price growth that we have seen in this quarter—was that driven by the price hike, and was that led by the input cost increase?
[Analyst] (Antique Stock Broking): No, sir. My question was that the price growth that we have seen in this quarter, that was driven by the price hike, and that is led by the input cost inflation. Is that correct?
Speaker #4: And is that correct?
Speaker #3: You see, the price hike happened in the month of June. It could not sustain. From May, it started declining, and in June, there was a significant decline in many molecules.
Rahul Dhanuka: Price hike happened in the month of June. It could not sustain. From May, it started declining. In June, significant decline in many molecules. In July, further decline. That was artificial increase, sort of artificial because of artificial shortage in view of war. That was only in April. From May, the things were reversed.
Speaker #3: In July, further decline. That was artificial, you see—increase. Sort of artificial because of artificial notice, in view of war. So that was only in April.
Speaker #3: From May, things were reversed.
Speaker #4: Understood. But still, you know, books about it are showing that the price growth is over 12%. So, I just wanted to understand: if the price growth is over 12%, then why haven’t we got the benefit in terms of low-cost inventory and, vis-à-vis, the gross margin improvement?
[Analyst] (Antique Stock Broking): Understood. Still in your books, it is showing that the price growth of over 12%. Just wanted to understand if the price growth of over 12%, then why we haven't got the benefit in terms of the low cost inventory and vis-à-vis the gross margin improvement. That's the point I want to understand.
Speaker #4: So that's the point I want to understand.
Rahul Dhanuka: Who says the price growth is 12%? No growth in price.
Speaker #3: Says the price growth is 12%. No growth in price.
Speaker #4: Okay. I understand.
[Analyst] (Antique Stock Broking): Okay. Understood.
Speaker #3: I'm saying yeah.
Rahul Dhanuka: I'm saying. Yeah.
Speaker #4: Understood, sir. And sir, in terms of Bare revenue, I think last time you had mentioned that the India business Bare product registration got transferred to Dhanuka's name.
[Analyst] (Antique Stock Broking): Understood, sir. Sir, in terms of Bayer revenue, I think last time you had mentioned that the India business Bayer product registration got transferred to Dhanuka's name. Just want to understand if we have booked any revenue for that product in India market or like that revenue was nil in this quarter.
Speaker #4: So just want to understand, if we have booked any revenue for that product in the India market, or like that revenue was made in this quarter?
Speaker #3: In the India market, the revenue was booked in the previous year itself. It was started from last year.
Rahul Dhanuka: In India market, the revenue was booked in the previous year itself. It was started from the last year.
Speaker #4: Okay. So this yeah.
[Analyst] (Antique Stock Broking): Okay.
Rahul Dhanuka: For 2023.
[Analyst] (Antique Stock Broking): Yeah.
Speaker #3: So you see, the business brand is coming in quarter two. Quarter one is a very nominal figure.
Rahul Dhanuka: You see the business-
[Analyst] (Antique Stock Broking): Yeah. Okay.
Rahul Dhanuka: The brand is coming in Q2. Q1 is very nominal figure.
Speaker #5: It's a product for grapes. So, grape season starts in the second quarter, so the major turnover will come from the buyer product. The April valley crop is in the month of September.
Rahul Dhanuka: It's a product for grape. Grape season starts in the Q2. Major turnover will come from Bayer product, Iprovalicarb in the month of September.
Speaker #4: Understood, sir. Understood. Thank you, sir. That's all from my end.
[Analyst] (Antique Stock Broking): Understood, sir. Thank you, sir. That is all from my end.
Speaker #1: Thank you. The next question is from the line of Harjit Joshi from Nuwama IE. Please go ahead.
Operator 2: Thank you. The next question is from the line of Archit Joshi from Nuvama IE. Please go ahead.
Speaker #2: Hi, very good evening, sir. Thanks a lot for the opportunity. Sir, I have two questions. First, regarding the expansion that we are considering in Nagpur—this is despite having enough land in The Hedge, I would assume. While you have already given the reasons for considering Nagpur as a geography for the new expansion, and while we have enough land in The Hedge, sir, are there any further plans for having certain assets coming into place or anything of that sort on The Hedge land piece?
Archit Joshi: Hi. Very good evening, sir. Thanks a lot for the opportunity. Sir, I have two questions. First thing, the expansion that we are considering in Nagpur is despite having enough land in Dahej, I would assume. Sir, you have given out the reasons for considering Nagpur as a geography for the new expansion. While having enough land in Dahej. Sir, any plans further for having certain assets coming in place or anything of that sort on the Dahej land piece? Because I think there are just two plants, I believe, that they are running. The land parcel that you have got in Nagpur, does it have enough room for expansions other than this 23,000 tons of capacity that we are adding? That would be my first one. Thank you.
Speaker #2: Because I think there are just two plans, I believe, that they're running. And also, the land parcel that you have got in Nagpur, does it have enough room for expansions other than this 23,000 tons of capacity that we are adding?
Speaker #2: That would be my first one. Thank you.
Speaker #3: Right. So the hedge we are setting has been set up as a chemical synthesis facility in a notified chemical zone of GIDC. And this space is committed towards chemical synthesis.
Rahul Dhanuka: Right. Dahej has been set up as a chemical synthesis facility in a notified chemical zone of GIDC, and this space is committed towards chemical synthesis. Chemical synthesis, as you are already aware, is completely different technologically, utilization of facilities and utilities, requirement of technical human resource capabilities is very different. We do not wish to overlap the two in terms of formulation facility overlapping with a chemical synthesis facility. That is why this is being set up outside of the Dahej land in a separate. As you are also aware that formulation facilities are relatively easily scalable. As we set up this facility with automation, this would have further expansion opportunities. At Dhanuka, we have in recent past introduced more and more low-dose environment-friendly products.
Speaker #3: Chemical synthesis, as you are already aware, is completely different technologically—utilization of facilities and utilities, requirement of technical human resource capabilities—is very different.
Speaker #3: We do not wish to overlap the two in terms of formulation facility overlapping with a chemical synthesis facility. That's why this is being set up outside of the The Hedge land in a separate— as you are also aware, formulation facilities are relatively easily scalable.
Speaker #3: As we set up this facility with automation, this will provide further opportunities for expansion. At Dhanuka, we have recently introduced more and more low-dose, environment-friendly products.
Speaker #3: So I feel that setting up and providing the farmer with smaller pack sizes of really potent and efficient products will take a major leap with this facility.
Rahul Dhanuka: I feel that providing the farmer with a smaller pack size of really potent and efficient products will take a major leap with this facility.
Speaker #2: Sir, the Nagpur expansion—does it have more space for accommodating other assets also?
Archit Joshi: Sir, the Nagpur expansion, does it have more space for accommodating other assets also?
Speaker #3: Yes, yes. It has opportunity for scaling up.
Rahul Dhanuka: Yes. It has opportunity for scaling up.
Speaker #2: Got it. Sir, secondly, in one of the media interactions, I think Dhanuka G mentioned that this year we will probably have more biological products, which were pretty much absent last year.
Archit Joshi: Got it. Sir, second one, on one of the media interactions, I think Dhanuka ji mentioned that this year we will probably have more biological products which were pretty much absent in the last year. I think that number was indicated to the extent of around INR 130 odd crores. Now if I just do the math, the single-digit top line growth that you're talking about will roughly bring around INR 100 to 150 odd crores swing on the overall revenues, and it seems to be offsetting the incremental revenue coming in from biological. Is it safe to assume that basically we are looking at a flattish year on crop protection volumes for FY27? Is that the right reading?
Speaker #2: And I think that number was indicated to the extent of around ₹130-odd crores. And now, if I just do the math, the single-digit top-line growth that we are talking about will roughly bring around ₹100 to ₹150-odd crores to the overall revenues.
Speaker #2: And it seems to be offsetting the incremental revenue coming in from biologicals. So is it safe to assume that basically, we are looking at a flattish year on crop protection volumes for FY27?
Speaker #2: Is that the right reading?
Speaker #3: We are looking at a small, single-digit growth, I would say. Yes.
Rahul Dhanuka: We are looking at a small single-digit growth, I would say. Yes.
Speaker #2: Okay, noted, sir. Thank you. That's it from me. All the best for the next quarter.
Archit Joshi: Okay. Noted, sir. Thank you. That's it from me. All the best for the next quarter.
Speaker #3: Thank you.
Rahul Dhanuka: Thank you.
Speaker #1: Thank you. The next question is from the line of Rohit Nagaraj from 361 Capital. Please go ahead.
Operator 2: Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please go ahead.
Speaker #2: Yes, sir. Thanks for the opportunity. Sir, just continuing on the question about biologicals, how has the progress been during the current quarter, given that in the base quarter last year there was a ban and therefore no sales were observed?
Rohit Nagraj: Thanks for the opportunity. Just carrying on the question on biologicals. How has been the progress during the current quarter, given that last year base quarter, there was a ban, and no sales were observed. How has been the progress during the month of July for Q2? Thank you.
Speaker #2: So, how has the progress been during the month of July for Q2? Thank you.
Speaker #3: So out of three products, we have already introduced two, and one more is in the pipeline to be introduced pretty soon. So probably by the end of August, we'll be launching the third one also.
Rahul Dhanuka: Out of three products, we have already introduced two, and one more is in the pipeline to be introduced pretty soon. Probably by August end, we'll be launching the third one also. We have already received all the regulatory approvals and most of the states we have received the sale permission also. We'll be going ahead with that. In addition to that, we'll introduce two more nutrition biological category products in this financial year.
Speaker #3: We have already received all the regulatory approvals, and in most of the states, we have also received the sale permission. So, we'll be going ahead with that.
Speaker #3: In addition to that, we'll introduce two more nutrition biological category products in this financial year.
Speaker #2: Sure. The second question is on the Nagpur project. Now, given that this is going to be a formulation facility—I'm sorry, I had missed the earlier part—in terms of what is the timeline for the project.
Rohit Nagraj: Sure. The second question is on the Nagpur project. Now, given that this is going to be a formulation facility, I'm sorry, I had missed the earlier part in terms of what is the timeline for the project, and are there any specific benefits from the Maharashtra government to put up this project in Nagpur region? Thank you.
Speaker #2: And are there any specific benefits from the Maharashtra government for putting up this project in the Nagpur region? Thank you.
Speaker #3: We are looking at this plant getting commissioned in Q4, FY28. And we have certain CGST benefits from the Maharashtra government also.
Rahul Dhanuka: We are looking at this plant getting commissioned in Q4 FY28. We have certain SGST benefits from the Maharashtra government also.
Speaker #2: Correct. That's it from my side. Thank you, and all the best, sir.
Rohit Nagraj: Right. That's it from my side. Thank you and all the best, sir.
Speaker #3: Thank you.
Rahul Dhanuka: Thank you.
Speaker #1: Thank you. The next question is from the line of Himanshu from Anantharati. Please go ahead.
Operator 2: Thank you. The next question is from the line of Himanshu from Anand Rathi. Please go ahead.
[Analyst] (Anand Rathi): Thank you, sir, for taking my question. Again, sir, harping on the CapEx, the new CapEx basically. Maybe if you can have some sort of quantification in terms of the benefits which you are going to get from that project, number one. And secondly, how should one think about the CapEx numbers for 2027, 2028, and 2029?
Speaker #2: Thank you, sir, for taking my question. So again, sir, harping on the KPX, the new KPX basically. So maybe if you can have some sort of quantification in terms of the benefits which you are going to get from that project, number one.
Speaker #2: And secondly, how should one think about the KPX numbers for '27, '28, and '29?
Speaker #3: KPX plan for '27, '28 is?
Rahul Dhanuka: CapEx plan for 2027, 2028 is.
Speaker #1: Hello, sir.
[Analyst] (Anand Rathi): Hello, sir?
Speaker #3: You see, in terms of this Nagpur, the KPX would be around ₹100 crore plus. And The Hedge will communicate it later.
Rahul Dhanuka: You see, in terms of this Nagpur, the CapEx would be around INR 100 crore plus. Dahej will communicate it later.
Speaker #2: Okay. And this, we are going to incur in FY28 or FY29?
[Analyst] (Anand Rathi): Okay, this we are going to incur in FY2028 or 2029?
Speaker #3: 27, 28.
Rahul Dhanuka: 27, 28.
Speaker #2: 27, 28, 100 crore. Hello?
[Analyst] (Anand Rathi): 27, 28, INR 100 crore. Hello?
Speaker #3: Yeah.
Rahul Dhanuka: Yeah.
Speaker #2: Got it. And sir, second question—could you again give a breakup of the revenue decline between volume and price for this quarter?
[Analyst] (Anand Rathi): Got it. Sir, second question is largely if you can again give a breakup of the revenue decline between volume and price for this quarter as well as for the last quarter if that is available with you.
Speaker #2: As well as for the last quarter, if that is available with you.
Speaker #3: That is not available with me. But this quarter is almost similar. The top-line negative in terms of value is 12.56. In terms of volume, it is around 12.7.
Rahul Dhanuka: That is not available with me. This quarter is almost similar. The top line negative in terms of value is 12.56. Volume, it is around 12.7.
[Analyst] (Anand Rathi): Okay.
Speaker #3: So this is hardly.
Rahul Dhanuka: There is hardly.
Speaker #2: Sorry, sir?
[Analyst] (Anand Rathi): Sorry, sir?
Speaker #3: There is hardly any difference between value and volume.
Rahul Dhanuka: There is hardly any difference between value and volume.
Speaker #2: Okay. Okay. Got it, sir. Got it. Thank you, sir.
[Analyst] (Anand Rathi): Okay. Got it, sir. Thank you, sir.
Speaker #3: Thank you.
Rahul Dhanuka: Thank you.
Speaker #1: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on the touch-tone telephone. Reminder: anyone who wishes to ask a question may press star and one on the touch-tone telephone.
Operator 2: Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one on the touchtone telephone. Reminder, anyone who wishes to ask a question may press star and one on the touchtone telephone. The next question is from the line of Saurabh Jain from HSBC. Please go ahead.
Speaker #1: The next question is from the line of Saurabh Jain from HSBC. Please go ahead.
Speaker #2: Thank you for the opportunity. Again, on the biostimulant side, when all of these problems started, there were some expectations that the smaller or the unorganized players would kind of lose market share to the bigger players who do business in a more organized way.
Saurabh Jain: Thank you for the opportunity. Again, on the biostimulant side, when all of this problem started, there were some expectations that the smaller or the organized players would kind of lose market share to the bigger players who do business in a more organized way. Now that you are mentioning that all of the products will be back into the game over the next one or two months, and two are already introduced. Are you noticing any trends in terms of the smaller players kind of going away from the market, and is it more possibility for the organized players to capture market share?
Speaker #2: So now that you are mentioning that most of the products—I mean, all of the products—will be back in the game over the next one or two months.
Speaker #2: And two are already introduced. Are you noticing any trends in terms of the smaller players kind of going away from the market, and is there more possibility for the organized players to capture market share?
Speaker #3: Right. The design of the regulation is absolutely in track with our forecast, that the smaller players and the unorganized players would probably not have enough space to operate.
Rahul Dhanuka: Right. The design of the regulation is absolutely in track with our forecast that the smaller players and the unorganized players would probably not have enough space to operate. Since the government started approving products late last year and many new introductions have happened over time, what is important to see is how it is implemented, how it is executed on ground, both by the central and the state governments. Various state governments are taking a very stringent view of which products and which players they approve to introduce, which kind of strengthens the point that the smaller and the unorganized player will have relatively lesser room to operate. I think so. It will go in the right direction and favorable direction for us.
Speaker #3: Since the government started approving products late last year, and many new introductions have happened over time, what is important to see is how it is implemented and how it is executed on the ground, both by the central and the state governments.
Speaker #3: So, various state governments are taking a very stringent view of which products and which players they approve to introduce, which kind of strengthens the point that the smaller and the unorganized player will have relatively lesser room to operate.
Speaker #3: So I think it will go in the right direction and be favorable for us.
Speaker #2: So already in Q2, would you expect that the market share that you or the other organized players have will be larger?
Saurabh Jain: Already in the Q2, would you expect that the market shares that you or the other organized players, will they have a larger market share?
Speaker #2: And what is okay. And what would your expectations be in terms of what kind of revenue you are expecting from the biostimulant category for this financial year?
Rahul Dhanuka: I think so.
Saurabh Jain: Okay. What would your expectations in terms of what kind of revenue you are expecting from the biostimulants category for this financial year?
Speaker #3: Yeah. So, since we are almost reworking the biostimulant category as almost a fallback option, also in terms of how we can leverage that. And in the stress conditions, how can the farmer take benefit of these products?
Rahul Dhanuka: Yeah. Since we are almost reworking the biostimulant category as almost a fallback option also in terms of how we can leverage that, and in these stress conditions, how can farmer take benefit of these products. We are kind of reworking that and probably give you more details later.
Speaker #3: We are kind of reworking that and will probably give you more details later.
Speaker #2: Okay, sure. Second question is on the hedge plant. You mentioned that the revenue in this quarter was ₹26 crore. Is that right?
Saurabh Jain: Okay, sure. Second question is on the Dahej plant. You mentioned that the revenue in this quarter was INR 26 crore. Is that right?
Speaker #3: Yeah, absolutely.
Rahul Dhanuka: Yeah, absolutely.
Speaker #2: So I think last year we did—it was about ₹50 crore, right? In FY26. And now that we have done ₹25 crore, what would be your guidance on the revenue for the full year FY27?
Saurabh Jain: I think last year we did almost about INR 50 crore, right, in FY26. Now that we have done INR 25 crore, what would be your guidance on the revenue for full year FY27?
Rahul Dhanuka: For Dahej?
Speaker #3: For The Hedge?
Speaker #2: Yes.
Saurabh Jain: Yes.
Speaker #3: Guidance is around 65 crores.
Rahul Dhanuka: Guidance is around INR 65 crores.
Speaker #2: For full year?
Saurabh Jain: For full year.
Speaker #3: For the full year.
Rahul Dhanuka: For the full year.
Speaker #2: Despite you having already done 25 crores in one quarter itself?
Saurabh Jain: Despite you having done already INR 25 crores in Q1 itself.
Speaker #3: Yeah, because that is the start of the season. So initially, you basically get demand from the market. Later on, in the latter part of the year, demand is not there.
Rahul Dhanuka: Yeah, because that is the start of the season. Initially you get the, basically, demand from the market. Later on in the later part of the year, demand is not there. In the Q3 or Q4, the demand will be less.
Speaker #3: So, in the third or fourth quarter, the demand will be less.
Speaker #2: Okay. And are you expecting to be break-even at the EBITDA level this year on the Hedge plant?
Saurabh Jain: Okay. Are you expecting to be breakeven at the EBITDA level in this year on the Dahej plant?
Speaker #3: Income. Yearly EBITDA, where we are break-even, appears to be difficult. They are trying hard, but I think it is difficult. That will be in the range of negative 4–5 crore.
Rahul Dhanuka: EBITDA, their breakeven appears to be difficult. They are trying hard, I think it is difficult. That will be in the range of around INR -4 to 5 crore. Difficult to do it.
Speaker #3: Difficult to.
Speaker #2: Okay. And is it possible to also share the guidance on the Bayer products for FY27?
Saurabh Jain: Okay. Possible to also share the guidance on the Bayer products for FY27?
Speaker #3: Bayer product, you see, in India, means you are already aware in the part of balance sheet in terms of the other, you see, work is going on.
Rahul Dhanuka: Bayer product you see in India, means you are already aware in the part of balance sheet. In terms of the other, you see work is going on. We are already incorporating two companies, one in Brazil and one in Europe. Some distributor appointed. The exact figure is now difficult to share, but not a very significant portion will come in our balance sheet this year. Not significant amount of money will appear in this year.
Speaker #3: We are already incorporating two companies, one in Brazil and one in Europe. And some distributors have been appointed; the exact figure is now difficult to share.
Speaker #3: But not a very significant portion will come in our balance sheet this year. Not a significant amount of money will appear this year.
Speaker #2: Okay, understood. One last question. You mentioned that the sowing trend was weaker for one quarter. But now we notice in the sowing progress that the sowing for soybean and cotton has improved meaningfully, right?
Saurabh Jain: Okay, understood. One last question. You mentioned that the sowing trend was weaker for Q1. Now that we notice in the sowing progress, the sowing for soybean and cotton have improved meaningfully, right?
Speaker #3: That's right.
Rahul Dhanuka: That's right.
Speaker #2: So, soybean—I think you had a very successful product by the brand name Purge two years back, which suffered last year. But then, with the recovery in soybean sowing and also on the cotton side, can some of the products that you have in your portfolio benefit in Q2, and could some of the loss that you faced in Q1 be reversed?
Saurabh Jain: Soybean, I think you have a very successful product by the brand name Purge two years back, which suffered last year. With the recovery in the soybean sowing and also on the cotton side, can some of the products that you have in portfolio benefit in Q2 and some of the loss that you faced in Q1 could be reversed?
Speaker #3: So, these products have a particular segment which is mostly in the first fortnight of July, but preferably in the second fortnight of June. So, no, I don't think so. Purge and these we decide would have a play opportunity for now.
Rahul Dhanuka: These products have a particular segment which is mostly in first fortnight of July, but preferably in second fortnight of June. No, I don't think so Purge and these VDC would have a play opportunity for now.
Speaker #2: Okay, understood. Thank you, and all the best.
Saurabh Jain: Okay, understood. Thank you and all the best.
Speaker #3: Thank you.
Rahul Dhanuka: Thank you.
Speaker #1: Thank you. The next question is from the line of Umang Shah from Banyan Tree Advisors PMS. Please go ahead.
Operator 2: Thank you. The next question is from the line of Umang Shah from Banyan Tree Advisors PMS. Please go ahead.
Speaker #4: Hi, sir. Thanks for the opportunity again. I have one question. Because of this monsoon deficit, one thing that we see is that the sowing is lower compared to last year.
Umang Shah: Hi, sir. Thanks for the opportunity again. I just had one question. Because of this monsoon deficit, one thing that we see is that the sowing is lower compared to last year. Just wanted to also understand, do you observe some stress at farmer level, and would you think that they would not want to spend so much money on crop protection this year?
Speaker #4: Just wanted to also understand, do you observe some stress at the farmer level, and would you think that they might not want to spend so much money on crop protection this year?
Speaker #3: Well, we kind of thought this even when prices were going up significantly towards March end. But as things would turn out, on one side, March vegetable prices went down for a while, but then April, May, and early June also saw a significant uptick in vegetable prices.
Rahul Dhanuka: Well, we kind of thought this even when prices were going up significantly towards March end. As things would turn out on one side, March vegetable prices went down for a while, April, May, and early June also saw significant uptick in vegetable prices and thus significantly increased consumption of horticulture products also. I think so it is both ways. If the acreages would be slightly lower, the farmers who are left with more acreages would have more opportunity to invest because commodity prices would be ranging higher. The demand-supply balance, how that appears, is something we are also watching. What will certainly be impacted is where irrigation is available versus where irrigation is not available.
Speaker #3: And thus, significantly increased consumption of horticulture products also. I think it works both ways. If the acreages are slightly lower, then the farmers who are left with more acreage would have more opportunity to invest because commodity prices would be higher.
Speaker #3: So, the demand-supply balance, how that appears, is something we are also watching. What is certainly impacted is where irrigation is available versus where irrigation is not available.
Speaker #3: So, where irrigation is available—which is almost 60% of Indian agriculture—you would certainly have higher consumption as well as higher investment in crop protection.
Rahul Dhanuka: Where irrigation is available, which is almost 60% of the Indian agriculture, would certainly have higher consumption as well as higher investment in crop protection as compared to where irrigation is not available. There, farmer will go for low cost or no spray options.
Speaker #3: As compared to where irrigation is not available, there farmers will go for low-cost or no-spray options.
Speaker #4: Got it, got it. Very useful, very useful. And second was that although the monsoon is in deficit, there have been reports that the reservoir levels have been quite healthy.
Umang Shah: Got it. Very useful. Second was that although monsoon is in deficit, there have been reports that the reservoir levels have been quite healthy. Despite this, when we see that this sowing has been lower, you mean that it has been delayed, right? It is not as if the acreage has reduced.
Speaker #4: Despite this, when we see that this sowing has been lower, you mean that it has been delayed, right? It is not as if the acreage has reduced.
Speaker #3: I'll respond to that in two parts. First of all, please do share with me the list of those reservoirs which are healthy so that I can talk to my team also.
Rahul Dhanuka: I'll respond to that in two parts. First of all, please do share with me the list of those reservoirs which are healthy, so that I can talk to my team also. In my understanding, the reservoir health is significantly depleted and we are still praying for more rains. Yes, sowing has caught up in certain pockets where it has rained well in July and the sown acreages have become healthier to that extent.
Speaker #3: In my understanding, the reservoir health is significantly depleted, and we are still praying for more rains. Yes, sowing has caught up in certain pockets where it has rained well in July.
Speaker #3: And the acreage, the sown acreages, have become healthier to that extent.
Speaker #4: Got it, got it. Thank you so much, sir. Wish you all the best.
Umang Shah: Got it. Thank you so much, sir. Wish you all the best.
Speaker #3: Thanks.
Rahul Dhanuka: Thanks.
Speaker #1: Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.
Operator 2: Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments.
Speaker #3: Once again, I would like to thank all our investors, analysts, business partners, and stakeholders for their continued trust and confidence in Dhanuka Agritech Limited.
Rahul Dhanuka: Once again, I would like to thank all our investors, analysts, business partners, and stakeholders for their continued trust and confidence in Dhanuka Agritech Limited. We remain committed to building a resilient, innovation-driven, chemistry-forward, and farmer-focused organization that creates sustainable long-term value for all stakeholders. Thank you, and goodbye until next time.
Speaker #3: We remain committed to building a resilient, innovation-driven, chemistry-forward, and farmer-focused organization that creates sustainable, long-term value for all stakeholders. India ka pranam har kisan ke naam.
Speaker #3: Thank you and goodbye. Until next time.
Operator 2: On behalf of Dhanuka Agritech Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
