This India's Leading Agro-chemical Stock Can Surge 37.63%, Says Prabhudas Lilladher

Dhanuka Agritech's share is a stock recommendation from Prabhudas Lilladher, the leading brokerage house believes the stock price may rally up by 36.63% as per the estimates. As per the report, there will be margin pressure in near term on this small cap company, but it is a good buy. Check details here.

About Dhanuka Agritech Limited

Dhanuka Agritech Limited is the umbrella company for the business of agro-chemicals, fertilizers, and seeds of Dhanuka Group. The small cap company reaches out to more than 10 million farmers with its eco-friendly high quality crop care products. It has Pan-India presence through its marketing offices in all major states across India. Its 3 manufacturing units with 39 warehouses and network of over 8 branch offices across the Indian geography caters to 6,500 distributors & approximately 75,000 dealers. The three state of art manufacturing facilities are located in Rajasthan, Gujarat and J&K with well-equipped Quality Testing Facilities. Its R&D center is located at Gurgaon, which is recognized by the Ministry of Science & Technology for generating scientific data and evaluation of new chemistry. The company with more than 321 registrations including Herbicides, Insecticides, Fungicides and Plant Growth Regulators /Bio- Stimulants and with over 330 active SKUs has one of the most extensive market penetration in agri-input industry. Its free float market capitalisation is Rs 932.94 crore.

Dhanuka Agritech Limited stock to buy, with a price target of Rs 940 per share.

In the analyst report of Prabhudas Lilladher, Dhanuka Agritech's 3QFY23 details were shared. Based on the quarterly numbers, along with the small cap company's management guidance, analyst explained the reasons for citing a 'Buy' view on the stock. "Dhanuka Agritech (DAGRI) reported subdued set of numbers in-line with our and consensus estimates led by Revenue/EBITDA/PAT growth of +10%/-6%/+3% YoY, amid challenges related to higher channel inventory and cost pressures. The company remains confident of achieving double digit YoY revenue growth in FY23E with absolute EBITDA to be maintained at FY22 levels citing; positive demand outlook in domestic market led by good soil moisture and healthy water reservoir levels (particularly in the Southern India) coupled with remunerative crop prices. We expect Revenue/PAT CAGR of 13%/12% over FY22-FY25E. Maintain 'BUY' with an unchanged price target of Rs 940 based on 15xFY25E EPS.

Additional Information

According to the report "Herbicides and fungicides contributed approximately 60% of the overall revenues. Innovation turnover index (ITI) stood at 14.3% in 9FY23 as against 10% in 9MFY22. Going forward, management opined that ITI index is likely to inch up further, led by launching of new products and robust new product pipeline coupled with their increasing contribution to overall revenues. The company intends to launch 2 new 9(3) and 3 new 9(4) molecules in FY24."

Dhanuka Agritech Limited share price performance

The share price of Danuka Agritech Limited declined by 7.62% in one year and 3.74% in three years respectively but it was up by 3.81% over five year period. The current market price of this small cap company share is Rs 667.65 per share. Its 52-week high is Rs 797.35 per share and 52-week low is Rs 630.65 per share.

Disclaimer

The stocks have been picked from the brokerage report of Prabhudas Lilladher, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.