and Analysis Report
Indian Economy
Indias GDP is estimated to have grown by 8.2% in FY2024, as per the data released by the Ministry of Statistics and Programme Implementation (MOSPI), compared to 7.0% in FY2023. The growth propelled the Indian economy to US$ 3.5 trillion, and set the stage for achieving the US$ 5 trillion target in the next few years. The Indian economy is set to become the third-largest economy in the world on the back of continued reforms. As per the World Economic Outlook, India continues to be the fastest growing economy of the world, attributed to a strong domestic demand and a growing working-age population.
The nation continues to show resilience against the backdrop of a challenging global environment. With increasing private consumption, and upbeat manufacturing and construction activity, India is ranked 5th in worlds GDP rankings in 2024. The nation capitalises on its broad domestic market, a youthful and technologically adept labour force, and an expanding middle class. The economy boasts diversity and swift growth, fuelled by key sectors such as information technology, services, agriculture, and manufacturing.
Outlook for FY2024-25
The global economy is expected to witness a synchronous rebound in 2025 as major election uncertainties are out of the way and central banks in the West are likely announce a couple of rate cuts later in 2024. India will likely see improved capital flows boosting private investment and a rebound in exports. Inflation concerns remain, however, which we believe may ease only in the latter half of the next fiscal year barring any surprises from rising oil or food prices.
The central bank projects Indias GDP growth at 7% in
financial year 2024-25, maintaining its strong run, and helped by consumption expenditure, exports rebound and capital flows. The rapid growth of the middle-income class in India has led to rising purchasing power and even created demand for premium luxury products and services.
Indias Agricultural Sector
India is one of the major players in the global agriculture sector, and is a primary source of livelihood for ~55% of Indias population. Agriculture, with its allied sectors, is the largest source of livelihood in India. Approximately 55% of Indias population works in the agricultural sector, which contributes 18% to its GDP. The sector holds the distinction for second-largest agricultural land in the world generating employment for about half of the countrys population. Thus, farmers are an integral part of the sector to provide us with a means of sustenance. The Government has been taking several initiatives to support farmers such as establishing effective agri-tech funds to afford competition and higher profits and increased investments in the sector.
Outlook for FY 2024-25 for Indias Agriculture Sector
The country is one of the largest agricultural producers globally. The Indian food industry is poised for huge growth, increasing its contribution to world food trade every year due to its immense potential for value addition, particularly within the food processing industry. The agricultural sector is predicted to increase to US$ 24 billion by 2025. Indian food and grocery market is the worlds 6th largest, with retail contributing 70% of the sales.
The agriculture sector in India is expected to generate better momentum in the next few years due to increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage. Furthermore, the growing use of genetically modified crops will likely improve the yield for Indian farmers. India is expected to be selfsufficient in pulses in the coming few years due to the concerted effort of scientists to get early maturing varieties of pulses and the increase in minimum support price.
With increased investment in agricultural infrastructure such as irrigation facilities, warehousing, and cold storage, the industry is estimated to generate better momentum in the coming years. The growing use of genetically modified crops is expected to improve yield and make India self-sufficient in pulses with effort by scientists to get early maturing varieties of pulses and the increase in minimum support price.
Rapid population expansion in India is the main factor driving
the agricultural industry. The rising income levels in rural and urban areas, which have contributed to an increase in the demand for agricultural products across the nation, provide additional support for this. In accordance with this, the market is being stimulated by the growing adoption of cutting-edge techniques like drones, and remote sensing technologies, as well as the release of various mobile applications for supporting farming.
Regulatory support to Indias Agricultural Sector:
Through several Digital Initiatives, such as the National e- Governance Plan in Agriculture (NeGP-A), the construction of Digital Public Infrastructure (DPI), digital registries, etc., the government has taken a number of steps to ensure access to IT across the nation.
The Agricultural Technology Management Agency (ATMA) Scheme has been implemented in 704 districts across 28 states and 5 Union Territories to educate farmers. Grants- in-aid are released to the State Government under the scheme with the goal of supporting State Governments efforts to make available the latest agricultural technologies and good agricultural practices in various thematic areas of agriculture and allied sector.
In what is termed as the worlds largest grain storage plan, the government is aiming to create storage infrastructure of 700 lakh tonne for agricultural commodities in the next five years by constructing thousands of godowns and warehouses in 65,000villages. The move aims at providing essential market linkages and helping farmers store their produce for longer periods and selling it at the right time according to their needs, thus reducing post-harvest losses, avoding multiple handling and transportation costs, and protecting farmers from distress sale.
The Centre has granted permission to five private companies to conduct cluster farming of specified horticulture crops on approximately 50,000 hectares on a trial basis, with a total investment of US$ 91.75 million (Rs. 750 crore).
27,003 Loans have been sanctioned in the country under credit linked subsidy component of the PM Formalisation of Micro Food Processing Enterprises Scheme (PMFME).
Increasing Government Initiatives in Agriculture
The 17th instalment of the Prime Minister Kisan Samman Nidhi (PMKSN) of Rs 20,000 crore was released to supplement farmers income, benefitting more than 9.26 crore farmers across the country through Direct Benefit Transfer. We are confident that the new government will take more decisive actions to support agricultural growth and boost the rural economy.
The agricultural land in India is decreasing day by day, and the demand for agricultural products is increasing. In order to enhance productivity on its 174 million hectares of arable
land and meet the countrys high domestic demand for agricultural goods, the Indian government wants to double the incomes of farmers over the next five years. This increase in production can be achieved by the usage of agrochemicals to prevent pests and raise the yield per hectare.
According to the Federation of Indian Chambers of Commerce and Industry, the Indian government recognises the agrochemical industry as one of its top 12 industries in the chemical sector, to achieve global leadership growing at 8% to 10% through 2025. The government also made some initiatives to give farmers access to crop protection products to increase their crop productivity. For instance, the Government of India created a network of 729 Krishi Vigyan Kendras established at the district level across India to ensure growers access to knowledge on improved seed varieties, crop protection chemicals, and agricultural technology.
In 2022, the government invested a huge amount in subsidizing potash and making it more affordable for farmers as it is the most imported fertilizer. According to the Department of Fertilizers, the government allocated USD 14 million to its fertiliser subsidy program.
The government initiatives increased the consumption of chemical pesticides. According to the Ministry of Agriculture and Farmers Welfare, the consumption of chemical pesticides reached 44,700 metric tons in 2021. Therefore, the increasing government initiatives in the agrochemical sector to boost the production of major crops are expected to aid the growth of the market in the coming years.
Indias Foodgrain Production
Production of food grains in the 2023-24 crop year (July- June) is estimated to decline by 6% to 309.34 million tonne (MT), from 329 MT in previous crop year, according to second advance estimates issued by the agriculture and farmers welfare ministry. Production is poor because of poor monsoon caused by the El Nino weather phenomenon potentially adding to inflationary pressures ahead of the general elections. Production is estimated to be lower due to decline in rice and pulses output, according to the agriculture ministry. The target for foodgrain production in crop year 2023-24 was 332 MT. As per the second advance estimate of foodgrains production, rice output is projected to decline 123.8 MT in 2023-24 from 125 MT in the previous crop year owing to patchy monsoon rains during the year. The government is likely to set the foodgrain production target during 2024-25 crop year (July-June) at 340.40 MT, given the expectations of "above normal" rainfall.
India aims to not only meet, but potentially exceed its targets, bolstering food security and agricultural resilience in the face of changing climatic conditions. While demand for foodgrains is on a constant rise, India is estimated to feed close to 1.7 billion people by 2050 using limited cultivable land, water and energy resources. The countrys net sown area has almost stagnated at around 140 million hectares, with not much scope to increase it. Natural resources, particularly soil and water, have been degrading in the process of intensification of agriculture.
Agricultural Exports
Indias agricultural GDP witnessed a significant deceleration, growing by only 0.7% in 2023-24, down from 4.7% in 202223. Agriculture exports declined in April-February 2023-24 period by 8.8% to US$ 43.7 billion, compared with US$ 47.9 billion in April-February 2022-23, as per data released by the commerce ministry, hit by geopolitical factors such as the Red Sea crisis and the continuing Russia-Ukraine war. The export ban and restrictions on commodities like rice, wheat, sugar and onion have hit agri exports of about USD 5-6 billion in the last fiscal. Exports of the 719 scheduled agri products in the APEDA (Agricultural and Processed Food Products Export Development Authority) basket declined by 6.85% to US$ 22.4 billion during the 11-month period of the last fiscal, as against US$ 24 billion in April-February 2022-23. To counter this decline and prevent farmers from facing oversupply issues, the commerce ministry, along with APEDA, is strategising to swiftly export surplus quantities of regulated goods such as onions and potatoes.
The government is gearing up to unveil a comprehensive five-year action plan aimed at capturing 10% of US$ 405 billion global exports market for 20 key agricultural products, as stated by APEDA. Indias current market share in these items stands at a modest 2.3% amounting to US$ 9.04 billion. This initiative is aligned with the governments ambition to propel India to become the worlds third-largest economy. This is envisioned to significantly augment farmers income without compromising the nations food security,
Agricultural Inputs
Lack of quality seeds, lower innovation and research & development in the pesticides sector and subsidy governance in the fertiliser sector are some key challenge faced by Indias agri-inputs market, which includes crop protection (pesticides), crop nutrition (fertilisers) and seeds. Indias consumption of agrochemicals is around 400 gm/hectare, compared to the global average of 2.6 kg/ hectare and 11.84 kg/hectare in the United States. Persistent demand environment is driving the domestic agri-input companies continued modest growth.
As a result, agrochemicals play a vital role in the agricultural business, supporting farmers in improving both the quality and quantity of their crops. Crop nutrition (fertilisers) enhance the quality of crop by providing essential nutrients to the crop and soil, whereas crop protection chemicals (pesticides) protect the crop and control, kill or repel pests and weeds that can harm the crop.
Crop protection chemicals, which are classified into herbicides, insecticides, and fungicides, also provide a major role in producing high quality grain. These chemicals have become increasingly important over the past few decades due to the need to raise agricultural productivity and guarantee a sufficient food supply for the expanding global population. These chemicals help in managing and minimising plant diseases, weeds and other pests that damage agricultural crops.
Global Agrochemicals Industry
The global agrochemicals market size, valued at US$ 229.53 billion in 2023, is poised to grow to US$ 305.63 billion by 2033, growing by a CAGR of 2.92% during the forecast period of 2024-2033, as per a report by Precedence Research, a global market research firm. The agrochemicals sector is a vital agriculture support that helps farmers produce more quantity. The wastage from diminishing agricultural land and crop losses owing to pest infestations pose a serious threat to food and nutritional security. There is a need for farmers to employ agrochemicals like pesticides and fertilisers in farming to boost land production and maintain soil quality as a result of the rising effect of urbanisation.
Factors driving growth of Global Agrochemicals market:
Growing population and associated growth in food consumption, arable land, and increased consumer knowledge support the growth of agrochemicals market
With expanding global population combined with rising prosperity, not only should supply be increased to satisfy demand, the nutritional demands of an increasingly affluent population also need to be satisfied
Agrochemicals are one of the key components in the agricultural business as they support farmers in improving the quality, quantity and productivity of crops
Increasing agricultural output on existing agricultural land is critical to feeding the worlds population
Constant research & development activites are carried out for producing high quality of agrochemicals
Due to water and land scarcity, people employ fertilisers and pesticides to assist them grow many crops in specific spaces, which drives growth in the agrochemicals market.
Increased incidence of insects and disesases and worsening weed population in the farms, growers need better agrochemicals to increase their yield and quality of produce
Recent outbreaks of new pests like Fall Army Worm & Black Thrips and diseases such as blight calls for increased
coverage of area under protection of chemicals and new research to reduce the losses for farmers.
As a result of high population growth, food consumption has increased globally, driving up demand for agricultural products. This has resulted in a rise in the usage of agricultural chemicals to improve crop productivity and agricultural development. Due to this, the usage of agrochemicals such as pesticides and fertilisers has also become imperative in order to fulfil the rising food demand.
India Agrochemicals Market
The market size of Indias agrochemical industry is expected to grow from US$ 7.90 billion in 2023 to US$ 12.58 billion by 2028, a CAGR of 9.75%. The agrochemical market is an important agriculture support industry, which boosts the agriculture output. With its inherent advantages, agrochemicals are seen as the next growth enablers for the Indian chemicals industry.
India currently holds the distinction of being the worlds fourth-largest manufacturer of agrochemicals and the 12th largest exporter of chemicals (including pharmaceuticals). Recognising the potential of the agrochemicals industry, the Indian government has identified it as one of its top 12 industries to attain global leadership, with a projected growth rate of 8-10% through 2025.
India - Championing the global industry
India has emerged as the second-largest exporter of agrochemicals globally, according to data from World Trade Organisation (WTO), With key export destinations including China, Japan, Brazil and United States. Valued at US$ 5.5 billion, the countrys exports in FY 2022-23, up from US$ 2.6 billion in FY 2017-18. With the government focusing on agrochemicals, agricultural exports are expected to grow to US$ 10 billion by 2026-27. FY 2022-23 exports surpassed agricultural exports of the United States at US$ 5.4 billion. The growth trajectory yielded a significant trade surplus of Rs 28,908 crore in FY 2022-23, underscoring Indias potential to emerge as a global manufacturing hub.
Indias agrochemicals industry has established advanced world-class manufacturing facilities to cater to domestic and global demands, ensuring further reduction in the import of agrochemicals in the long term. The industry is renowned
worldwide for its production efficiencies, product efficacy, quality and competitive pricing. Given the potential and opportunities ahead, India is well-positioned to be the global leader for manufacturing and export of agrochemicals.
Key challenges affecting demand for Agrochemicals
Despite the above challenges, the agrochemicals sector remains resilient, driven by innovation, strategic investments and a favourable regulatory environment.
The need to enhance productivity to cater to the food demand of the growing population has been the key factor driving the use and application of agrochemicals in India.
According to World Bank, Indias population is expected to reach 1.66 billion by 2050, from 1.39 billion in 2021. The increasing population creates a huge demand for food products to feed the population.
Higher temperatures and moisture leads to a higher possibility of infestation from pests, which leads to decrease in productivity. According to the Indian Council of Agriculture Research (ICAR) scientists, nearly 30-35% of annual crop yield in India gets wasted because of pests. To tackle these problems and to increase production, the use of crop protection chemicals is anticipated to increase.
Agrochemicals also play a vital role in crop growth, showing improved performance and noticeable results. They are highly important in obtaining increased yields as these are necessary to prevent pests and diseases in the field. Supplying adequate plant nutrients is essential for the healthy growth and production capacity of plants, thereby catering to the increased food supply.
Agrochemical players are investing in production and storage facilities to cater to the increasing demand. In 2022, Indian agrochemical companies increased backward integration and use of international storage warehouses to continue producing and expanding to meet the increasing demand.
Mechanisation and Technology
Consumption of agrochemicals is around 400 gms/hectare in India, compared to the global average of 2.6 kg/hectare and 11.84 kg/hectare in the United States. Advancements in mechanisation and technology have enabled efficient use of agrochemicals in the domestic market, thus reducing imports and boosting exports. Pesticide spraying using drones is increasing the world over, including India, as it offers a safe and cost-effective solution for precision spraying, reducing the load of chemicals on crop canopy and soil.
Use of drones in Precision Farming
Precision farming is one of the key solutions for sustainable development of agriculture, which advocates applying right inputs in right amounts at right time and at right place using the right technologies or techniques. Availability of geo- referenced grid soil sampling permitted assessing variability in the field and the composite sample based single recommendation for the entire farm could be done away with. The government is taking steps to educate farmers about the protective measures to be taken while spraying agrochemicals.
Special attention is also being paid to educate farmers on quantity and variety of crop protection solutions to be used for a particular crop. Innovative solutions like agricultural drones can tackle the problem of pest issues or crop failure ailing the agricultural sector. Crop surveillance leads to better chances of failure mitigation. The emerging drone technology can help reduce time and increase the efficiencies of farmers.
Pesticide spraying by drone is increasing the world over, including India. It offers a safe and cost-effective solution for precision spraying reducing the load of chemicals on crops and soil. The Indian agrochemical industry is reducing environment footprint and increasing the share of renewable energy consumption. Agricultural drones are sturdy, low in cost, and require minimum maintenance. Some of its key features include a detachable container, low-cost frame, precise spraying of pesticides.
Key Growth Drivers for Agrochemicals
The need to enhance productivity to cater to the rising food demand of our growing population as well as the improvement in the quality of produce has been the key factor driving the use and application of agrochemicals in India.
Rising population, accompanied by rising affluence, is creating a shift in consumption patterns. Hence, there is a need to not just increase production to meet demand, but also ensure that the nutritional needs are met.
About 55% to 60% of the Indian population is still dependent on agriculture for their livelihood. The increasing population creates a huge demand for food products to feed the population.
Supplying adequate plant nutrients is essential for the healthy growth and production capacity of plants, thereby catering to the increased food supply.
In India, 30-35% of potential crop production is lost due to pests, weeds and diseases. The need to improve crop productivity with a focus on the effective use of pest control measures and the adoption of weed management practices has been recognized as an important factor in increasing agricultural output.
Increase in usage of Biopesticides and BioFertilisers
The potential danger of synthetic pesticides can affect industry growth. As a result, manufacturing of bio-based fertilisers and pesticides has opened up new prospects for key market players in agrochemicals.
Farmers are now looking for efficacious and environmentally safe products, which are effective for control of pests. As the government promotes sustainable agricultural practices, there is a gradual increase in the use of biopesticides, which now account for 15% of the pesticides market. There is an increasing need to balance the judicious use of best chemicals and minimise the impact of that use.
Understanding Bio-Pesticides
Bio-pesticides are the new age crop protection products, manufactured from natural substances like plants, animals, bacteria and certain minerals.
They are eco-friendly as compared to chemical-based pesticides.
The bio-pesticide market is expected to grow with government support and increasing awareness on environment-friendly pesticides.
Key industry challenges
Agrochemicals are excluded from the governments production linked incentive (PLI) scheme, which provides incentives for goods manufactured in India.
India lacks mega production facilities like those in China. Future Outlook
Despite these challenges, the future of Indias agrochemical industry looks promising. The changing agricultural landscape presents new opportunities for manufacturers, formulators, and suppliers. Given the potential and opportunity ahead, India is well-positioned to be the global leader for agrochemicals manufacturing and exports. The industry is experiencing significant growth and is expected to continue expanding in the coming years. From US$ 7.90 billion in 2023, Indias agrochemicals industry is projected to clock a robust CAGR of 9.75% at US$ 12.58 billion by 2028. This growth trajectory will largely be driven by expanding production capacities, government support, growing domestic and export market, and innovative products.
This Growth is attributable to :
The Indian governments "Make in India" initiative, which aims to promote domestic manufacturing, plays a crucial role in supporting the agrochemical industry. This initiative has:
Reduced regulatory hurdles
Facilitated upgrade of necessary infrastructure
This is enabling India to become a global hub for the manufacture of agrochemical products. Investments are being made in research and innovation to develop new molecules, manufacturing processes, and green chemistry products.
Company Overview
Dhanuka Agritech Limited ("DAL" or the Company) is a leading Agrochemical Company in India. The Companys strength lies in manufacturing formulations. DALs pan India distribution network consists of around 6,500 distributors and dealers and 80,000 retailers, enabling it to have a presence across 10 million farmers touchpoints. Dhanuka has more than 1,000 techno-commercial team supported by a strong sales and marketing team to promote and develop new products. The introduction of novel chemistries and extensive product development has been the key focus of the organization, distinguishing Dhanuka from the rest of the industry.
The Companys strength lies in the manufacturing and marketing of formulated products. In FY 2023-24, Dhanuka commenced operations at its Dahej chemical synthesis plant, and working to create breakthroughs in chemical synthesis with our new R&D laboratory with 30 chemists for research and chemical processes. Dhanuka is working with the vision of transforming India through agriculture.
Dhanuka has world-class NABL-accredited laboratories, along with our recently established Dhanuka Agriculture Research and Technology Center at Palwal along with an excellent team for new product registration and development. Dhanuka has international collaboration with 10 leading global agrochemical companies from Japan, US, and Europe, which helps us to introduce the latest technology in India.
The product portfolio is largely distributed across the Insecticides, Herbicides, Fungicides, Bio-pesticides, and Bio-stimulants segments. Insecticides contribute a significant portion of the overall revenues and the Company aims to ramp up its presence in the fast-growing Herbicides segment. DAL is aggressively working towards the goal of "Transforming India through Agriculture" through initiatives like doubling farmers income. The Companys latest innovative sales process guides the farmers effectively on crop solutions through channel partners and a dedicated team. It also ensures a smooth reach of products to farmers with readily available stock on demand as per the latest market scenario. This new-age sales process is managing issues like inventory cost, blockage of funds and uncertain demand and supply. It also offers automatic order processing and complete availability of the products in realtime.
Operational Overview
Dhanuka has a healthy Net worth of Rs. 1255.88 Crores as at 31st March, 2024. ICRA has accorded credit rating [ICRA]AA (pronounced ICRA double A) for fund-based limits and [ICRA]A1+ (pronounced ICRA A one plus) rating for non-fund based limits of the Company.
During the year, the Company received registration certificates for Halosulfuron methyl 6% + Metribuzin 50% WG for Sugarcane for the control of different types of weeds u/s 9 (3) FIM (Formulation Indigenous Manufacture) of the Insecticide Act, 1968.
The Company has launched one insecticide product under the brand name Lanevo containing Fluxametamide 5.81% + Bifenthrin 5.81% EC (11.62 % EC w/w) (12% EC w/v) for the control of White fly (Bemisia tabaci), Jassid (Amrasca bigutulla bigutulla), Shoot & Fruit borer (Leucinodes orbonalis) in Brinjal crop, Leaf minor (Liriomyza trifolli) & Fruit borer (Helicoverpa armigera) in Tomato crop, Thrips (Cirotothrips dorsalis), White fly (Bemisia tabaci) & Fruit borer (Helicoverpa armigera) in Chilli crop and one Herbicide product under the brand name Purge containing Fomesafen 12.5% + Quizalofop ethyl 4.68% EC which is a post emergence herbicide for the effective control of Narrow leaf weeds and Broad leaf weeds and sedges in groundnut and soybean crops u/s 9(3)- of the Insecticide Act, 1968.
The Company has introduced a bio-fertilizer, MYCORe SUPER which is a premium & advanced Arbuscular Mycorrhizal Fungi (AMF) with 100% endomycorrhiza consisting of virulent & high performing mycorrhizal species with added power that establishes faster symbiotic relationship with the roots and facilitates better nutrient & water uptake. By leveraging natural processes. The product provides farmers with a cutting-edge solution to maximize yields while minimizing environmental impact.
The Company has received registration certificates for export of Pendimethalin 40% EC, Atrazine 90% WDG, Pendimethalin 50% EC, Ametryn 80% WP, Ametryn 50% SC, Tebuconazole 25% EW, Atrazine 50% SC, Prometryn 50% SC, Tebuconazole 43% SC, Deltamethrin 2.5% EC and Metribuzin 75% WDG u/s 9(3).
The Company has also received certificates u/s 9 (4) of the Insecticide Act, 1968 for TIM for Metribuzin Technical, Bifenthrin Technical, Glyphosate Technical 95% w/w Min., Lambda Cyhalothrin Technical, Pendimethalin Technical, Tebuconazole Technical and Propiconazole Technical.
The Company has entered/signed MoUs with various universities to jointly conduct research in crop protection including Assam Agricultural University (Assam), Dr. Panjabrao Deshmukh Krishi Vidyapeet (Akola), Swami Keshwanand Rajasthan Agricultural University (Bikaner). The Company has entered into an MOU with ICAR (Indian Council of Agricultural Research), New Delhi for scientific and technical cooperation in the implementation of the project of national research institutions/ Regional stations/ KVKs & Agricultural universities under ICAR.
Financial Performance for FY 2023-24 (Standalone)
Revenue from Operations increased to Rs. 1758.54 Crores in FY2023-24 from Rs. 1700.22 Crores in FY2022-23, 3.4 % up over last year.
Profit Before Tax increased to Rs. 318.75 Crores in FY2023-24 from Rs. 302.73 Crores in FY2022-23, 5.29% up over last year.
EBITDA increased to Rs. 327.44 Crores in FY2023-24 from Rs. 278.7 Crores in FY2022-23, 17.5% up over last year. Profit after Tax increased to Rs. 239.09 crores in FY2023-24 from Rs. 233.51 Crores in FY 2022-23, 2.39% up over last year.
The Company reported an EPS of Rs. 52.46 in FY2023-24 compared to Rs. 50.35 in FY2022-23.
Segment Performance
Segment | of FY 2023-24 Revenue(%) | of FY 2022-23 Revenue(%) |
Insecticides | 38 | 35 |
Fungicides | 16 | 17 |
Herbicides | 34 | 37 |
Others | 12 | 11 |
Key Financial Ratio
Particulars | of FY 2023-24 | of FY 2022-23 |
Debtor Turnover | 5.13% | 5.47% |
Inventory Turnover | 2.81% | 3.22% |
Debt Service Coverage Ratio | 36.28% | 36.54% |
Current Ratio | 3.69% | 3.01% |
Debt Equity Ratio | 0.02% | 0.03% |
Operating Profit Ratio | 16.31% | 15.36% |
Net Profit Ratio | 13.60% | 13.73% |
Return on Equity Ratio | 20.64% | 23.10% |
EBITDA Margin | 18.62% | 16.39% |
Business Outlook
The Company will work towards engaging with all the participants across the value chain both upstream and downstream to deliver a strong kharif season and build a solid momentum for the remaining part of FY 2024-25. As per the IMD Report, this year, the weather conditions have shifted significantly and already the effects of El Nino have subsided. The major weather forecasters have predicted above 100% rainfall this year on the back of developing La Nina conditions. Therefore, this year, the demand for all the Companys products is expected to be very good.
Further, the price reduction of the previous year has bottomed out, and we are seeing an upward movement in a few products. Trends, this year, the Company is expecting very strong growth. And to power this growth, some of the biggest products in recent times has been launched by the Company.
The Company has established a new chemical R&D lab with 30 chemists to build speed in the products and processes development capabilities at Sanand, Gujarat. This will help in developing new products for manufacturing in Dahej and capture contract manufacturing opportunities. The Company is committed to create breakthroughs in chemical synthesis and continues to invest in R&D.
During the year the Company has invested in the Equity Shares and 0.0001% Non-Cumulative Compulsorily Convertible Preference Shares(CCPS) amounting to Rs. 10,00,00,000/- of M/s. Kisankonnect Safe Food Private Limited (a Company engaged in the business of agricultural produce and processes.)
Material Development in Human Resources / Industrial Relations
At Dhanuka, we understand that our people are the corner stone of our success. To support this belief, we have implemented comprehensive training and coaching interventions at leadership levels, aimed at enhancing the performance of our leaders to drive our strategic objectives. Our commitment to managing talent is evident in our focused approach for identifying and developing high-potential (HiPo) employees and future leaders. Nurturing talent and developing leaders is a critical part of our people philosophy. In FY 23-24, we saw remarkable growth in the number of employees included in our talent management program.
Furthermore, as new leaders join our organization, we ensure they settle in well by providing a structured onboarding plan, mentorship, and support. This approach helps new leaders acclimate to their roles quickly and successfully, ensuring they contribute effectively to our strategic goals.
Our Talent Hiring strategy has led to substantial improvements in our turnaround time for hiring. This streamlined process not only reduces the time it takes to fill positions but also enhances our ability to attract and retain top talent. We believe this is crucial to sustain our ongoing success and maintaining a competitive edge in the market.
As on 31st March 2024, Dhanuka had a dedicated workforce of 1096 permanent employees.
Learning and Development of Employees
In todays highly competitive business environment, organizations understand the critical importance of fostering a dynamic culture of continuous learning and development. This culture is notjust an option but a necessity to ensure employees grow, succeed, and stay ahead of evolving trends. At Dhanuka, we are dedicated to enhance our employees knowledge, refining their skills, and expanding their capabilities through a diverse range of training programs precisely aligned with their job requirements. Developed in collaboration with our stakeholders, these programs are delivered through an effective mix of immersive classroom sessions, hands-on training, and state-of-the-art technology platforms.
One of our flagship initiatives is the Sales Academy - DARES (Dhanuka Academy to Reach Excellence in Sales). This program continues to provide a specialized development path for our sales team, combining advanced technology with human expertise to equip them with the necessary skills and knowledge to progress in their careers.
Furthermore, we have nominated employees for development programs that are designed to further enhance their professional growth and leadership capabilities. These initiatives ensure that our workforce remains competitive, innovative, and capable of driving the organization towards its strategic objectives.
Environment Safety, Health and Energy Conservation
Safety at workplaces is of paramount importance to the Company. It continuously strives to ensure various training and awareness programs are conducted throughout the year. The aim is to maintain the highest standards of safety across factories and workplaces and ensure the latest best
practices are implemented across the business to bring operational efficiencies and save energy.
Stakeholder Engagement
The Companys endeavor is to maintain regular engagement with all its stakeholders to ensure their concerns are addressed and expectations are met. Dynamic processes are in place within the Company to ensure the integration of feedback from various stakeholders such as suppliers, customers, employees, and investors on a routine basis. By trusting employees, partnering with suppliers and dealers, and engaging with local communities, we work towards serving and delighting our customers.
Internal Control Systems and Adequacy
The Company has adequate systems of internal control in place, which is commensurate with its size and the nature of its operations. The Company has designed and put in place adequate Standard Operating Procedures and Limits of authority manuals for the conduct of its business, including adherence to the Companys policies, safeguarding its assets, prevention, and detection of fraud and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information. These documents are reviewed and updated on an ongoing basis to improve the internal control systems and operational efficiency. The Company uses a state-of-the-art ERP system to record data for accounting and managing information with adequate security procedures and controls. The Company has its own in-house internal audit team which keeps checks on every system operating in the Company. Internal auditing is an independent, objective assurance and consulting activity designed to add value and improve the Companys operations. It brings a systematic, disciplined approach to evaluate and improving the effectiveness of risk management, control, and governance processes.
A Certificate issued by Vice Chairman & Managing Director and CFO, forming part of the Corporate Governance Report, confirm the existence and effectiveness of internal controls and reiterate their responsibilities to report deficiencies to the Audit Committee and rectify the same.
Risk Mitigation Framework
The Company has a risk management committee that identifies internal and external risks that are particular to the business, such as financial, operational, sectoral, sustainability-related risks (especially those involving ESG),
informational, cybersecurity and other risks. The committee is in charge of overseeing and directing the implementation of the risk management policy. The risk management committee reviews the risk management policy regularly and recommends any modifications to the risk management approach. A thorough risk-management framework allows us to pre-emptively monitor risks emanating from the internal and external environment. As a result, we have been able to consistently create value for all our stakeholders, despite industry cycles and economic headwinds.
The Company functions under a well-defined organization structure. Flow of information is well defined to avoid any conflict or communication gap between two or more departments. Second-level positions are created in each department to continue the work without any interruption in case of nonavailability of functional heads. Effective steps are being taken to reduce the cost of production on a continuing basis, taking various changing scenarios in the market.
Cautionary Statement
Statements in this Management Discussion and Analysis contain "Forward-Looking Statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to the Companys future business developments and economic performance. While these forward-looking statements indicate our assessment and future expectations concerning the development of our business, several risks, uncertainties, and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. The Company undertakes no obligation to publicly revise any forward-looking statements to reflect future/ likely events or circumstances.
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