400% Payout: LIC-Backed Stock Declares Rs 8/Share Dividend; Buy?

Dhanuka Agritech operates as a small-cap company within the commodities sector. One of the top agricultural input companies in India, Dhanuka Agritech Limited was recognised in Forbes Magazine's list of the "200 Best under A Billion Companies in Asia Pacific.

" When it comes to the sales of branded agricultural input products, Dhanuka is regarded as one of the top Indian agro-input firms. With over 330 active SKUs and over 321 registrations for herbicides, insecticides, fungicides, and plant growth regulators/biostimulants, Dhanuka Agritech Limited has one of the largest market penetrations in the agri-input sector and it is the company on which LIC held a 3.16% equity stake or owned 14,42,199 fully-paid up shares of Dhanuka during the quarter ended December 2023 according to BSE.

Dhanuka Agritech Dividend

The company has declared an interim dividend @400% i.e. Rs 8/- per equity share of Rs 2/- each.

"The Board of Directors has fixed Wednesday, February 14, 2024 as Record Date for the purpose of determining the names of the Members to whom the Interim dividend for the Financial Year 2023-24 will be paid," said Dhanuka Agritech in a stock exchange filing.

Dhanuka Agritech Financials

The company reported a net revenue of Rs 403.24 Cr for the third quarter of FY 2023-24 ended December 31, 2023 compared to Rs 393.37 Cr in the year-ago quarter, representing a growth of 2.5% YoY. Its net profit reached Rs 45.37 Cr in Q3FY24 down by 1.5% YoY from Rs 46.07 Cr in Q3FY23. Its EBITDA reached Rs 62.16 Cr during the quarter under review up by 19.9% YoY from Rs 51.83 Cr in Q3FY23.

Mr. M. K. Dhanuka, Managing Director, Dhanuka Agritech said: Dhanuka has been able to show significant resilience, in this challenging year, where the industry is facing significant headwinds and pressure on both topline and bottomline.

"This year due to continuous decline in prices of generic products ranging from 5% to 40% globally, there is a significant gap in volume growth and value growth. While, the Volume has grown by 8.55%, while the Value has grown by only 2.51% in Quarter 3, representing an overall value reduction of 6% on the entire portfolio," he said.

Regarding the full year guidance, he said the company is expecting double digit growth in revenue from Operations. "Our EBITDA is also likely to grow by 50-100 BPS in the current fiscal compared to the previous year," Dhauka stated. "We have also invested Rs 10 crores in a agritech startup Kisankonnect Safe Food Private Limited," he added.

Dhanuka Agritech Share Price Target

Deven Mehta - Derivative Analyst at Choice Broking said in the current market scenario, DHANUKA is positioned at Rs 1053, undergoing a correction phase. Noteworthy is the stock's establishment of a support level near the 200-day Exponential Moving Average (EMA), signalling a promising potential for further upward movement, with a targeted peak at Rs 1160. Emphasizing this positive trajectory is the substantial support zone discerned near Rs 990 on the downside.

A key observation is DHANUKA is current trading position in proximity to critical Exponential Moving Averages, including the 200-day EMAs. This underscores a robust bullish momentum, solidifying the expectation of sustained upward price action.

In terms of risk management, market participants are advised to set a stop-loss at Rs 970, offering a protective shield for their investment. A strategic approach involves actively exploring buying opportunities during market dips, enhancing the potential for optimal entry points.

Upon scrutinizing the technical indicators and evaluating prevailing market conditions, DHANUKA emerges as a promising buying prospect. With a target price set at Rs 1160, contingent upon the implementation of prudent risk management measures, this stock presents an attractive proposition for investors seeking potential gains in the current market environment. The observed support levels, combined with the buying on dip strategy, contribute to a positive and promising outlook for DHANUKA in the dynamic landscape of technical analysis.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.