Showing posts with label Dhanuka Agritech. Show all posts
Showing posts with label Dhanuka Agritech. Show all posts
23 February 2012
Dhanuka Agritech, TP: Rs 100 -- Accumulate:: Dolat Capital,
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Q3FY12 results miss estimates; disappointing operational performance
dents earnings growth
Topline for Q3FY12 de-grew by 3.7% YoY to ` 1.1bn, mainly on account of
6% decline in volume off-take due to poor northeast monsoons.
Rainfall in key regions of Andhra Pradesh, Karnataka and Maharashtra
recorded 40% decline, impacting the revenue contribution from these
markets.
For 9MFY12, herbicides and fungicides portfolio has shown a muted growth
of 5% YoY while the insecticides and PGR portfolio grew by 14% YoY.
Top five products for 9MFY12 contributed 31% to the topline. The company's
flagship brand Targa Super contributed 14.6% (YTD) to the topline and
witnessed a decline of 61% during the quarter.
EBITDA margins have declined by 530bps YoY to 11.5% led by higher raw
material cost at 52.6% of sales (up 750bps YoY). Lower employee cost
(down 40bps YoY) and other expenses (down 190bps YoY) restricted margin
contraction to some extent.
Lower acreages, increasing fertilizer prices and falling produce prices have
reduced average farmer’s propensity to spend on specialty products. The
resulting shift in focus towards generic products has dented EBITDA margin.
Interest expense fell by 3.4% YoY to ` 19mn. Gross debt as of December
2011 stood at ` 400mn. Depreciation too declined by 36.5% YoY to ` 12mn.
Tax rate stood lower at 19.5% (Q3FY11: 20.7%). PAT declined by 37% YoY
to ` 78mn.
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Q3FY12 results miss estimates; disappointing operational performance
dents earnings growth
Topline for Q3FY12 de-grew by 3.7% YoY to ` 1.1bn, mainly on account of
6% decline in volume off-take due to poor northeast monsoons.
Rainfall in key regions of Andhra Pradesh, Karnataka and Maharashtra
recorded 40% decline, impacting the revenue contribution from these
markets.
For 9MFY12, herbicides and fungicides portfolio has shown a muted growth
of 5% YoY while the insecticides and PGR portfolio grew by 14% YoY.
Top five products for 9MFY12 contributed 31% to the topline. The company's
flagship brand Targa Super contributed 14.6% (YTD) to the topline and
witnessed a decline of 61% during the quarter.
EBITDA margins have declined by 530bps YoY to 11.5% led by higher raw
material cost at 52.6% of sales (up 750bps YoY). Lower employee cost
(down 40bps YoY) and other expenses (down 190bps YoY) restricted margin
contraction to some extent.
Lower acreages, increasing fertilizer prices and falling produce prices have
reduced average farmer’s propensity to spend on specialty products. The
resulting shift in focus towards generic products has dented EBITDA margin.
Interest expense fell by 3.4% YoY to ` 19mn. Gross debt as of December
2011 stood at ` 400mn. Depreciation too declined by 36.5% YoY to ` 12mn.
Tax rate stood lower at 19.5% (Q3FY11: 20.7%). PAT declined by 37% YoY
to ` 78mn.
30 December 2011
Buy Dhanuka Agritech: Target Price: Rs 155 :: Dolat
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Dhanuka Agritech (DAL) is a branded formulations player focused on the fast-growing herbicides segment (33% of
sales). DAL’s well-established front-end initiatives — Dhanuka Suvidha Stores (franchisee model) /Dhanuka Doctors
— position it well as a partner of choice for marketing agreements for large agrochemical companies. Revenue
from specialty products launched through MNC tie-ups make up 55% of sales. We believe this could increase as
new products are introduced every year.
DAL operates on an asset-light model and has the potential to generate healthy free cash flow through FY14E.
Sustainable earnings growth (23% over FY11-14E) without the need to dilute equity and easing working capital
stress too shall enable DAL to become virtually net debt free by FY14E.
Long-term growth drivers include a strengthening seeds portfolio (scouting for acquisition) and manufacturing
selective technicals, resulting in backward integration. We expect DAL to trade at a premium considering its high
return ratios and a positive transformation in balance sheet
India Equity Research Reports, IPO and Stock News
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Dhanuka Agritech (DAL) is a branded formulations player focused on the fast-growing herbicides segment (33% of
sales). DAL’s well-established front-end initiatives — Dhanuka Suvidha Stores (franchisee model) /Dhanuka Doctors
— position it well as a partner of choice for marketing agreements for large agrochemical companies. Revenue
from specialty products launched through MNC tie-ups make up 55% of sales. We believe this could increase as
new products are introduced every year.
DAL operates on an asset-light model and has the potential to generate healthy free cash flow through FY14E.
Sustainable earnings growth (23% over FY11-14E) without the need to dilute equity and easing working capital
stress too shall enable DAL to become virtually net debt free by FY14E.
Long-term growth drivers include a strengthening seeds portfolio (scouting for acquisition) and manufacturing
selective technicals, resulting in backward integration. We expect DAL to trade at a premium considering its high
return ratios and a positive transformation in balance sheet
13 December 2011
Q2FY12 Result Update Dhanuka Argitech Ltd:: Nirmal Bang
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The company reported good set of results
Seasonally best quarter in terms of sales: Dhanuka Agritech
reported sales of Rs 191.2 crs, registering a growth of 15.2%
yoy and 103% qoq. Due to erratic rains the sales was lower
than the expectations. The company is expecting higher
growth in Q3 however also believes that Q3FY12 will also have
some spillover effect of this irregular rains. (June and July
being the long dry months and August and Sept received
above average rains)
Seasonally weak quarter in terms of margins: Q2 is
seasonally weak quarter for the company in terms of margins
as material cost increases during the quarter. The company
reported EBITDA margins of 13.3% during the quarter as
compared to 16.2% in Q1FY12. However, there was an
improvement as compared to Q2FY11 where margins were
12.7%. EBITDA margins are expected to come back to normal
levels of around 14.5%-15.0% from Q3 onwards. For the full
year FY12E Dhanuka is expected to report EBITDA margins of
14.7%
Key highlights of the quarter
• Despite lower margins on sequential basis, PAT margins
were higher at 11% as compared to Q1FY12 of 10.7% due
to lower tax. The company has changed product mix at
its Uddampur facility (which is under 100% tax benefit
currently) in addition with usage of surcharge tax
resulted in lower tax rate during the quarter
• The company launched four new products during the
quarter with association with various MNCs.
• Dhanuka is in process of acquiring 25% stake in a Seed
Company and is expected to complete the process
during FY12.
Valuation & Recommendations
We still believe the outlook for the company looks promising
with factors like the low per-capita consumption of
pesticides, which provides opportunities for growth, increased
demand for food grains and the rising awareness about
pesticide usage among the farming community.
Based on our EPS of Rs. 12.7 for FY12E and a target multiple
of 11x we arrive at target price of Rs. 140 potential upside
of 38% from current levels.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
The company reported good set of results
Seasonally best quarter in terms of sales: Dhanuka Agritech
reported sales of Rs 191.2 crs, registering a growth of 15.2%
yoy and 103% qoq. Due to erratic rains the sales was lower
than the expectations. The company is expecting higher
growth in Q3 however also believes that Q3FY12 will also have
some spillover effect of this irregular rains. (June and July
being the long dry months and August and Sept received
above average rains)
Seasonally weak quarter in terms of margins: Q2 is
seasonally weak quarter for the company in terms of margins
as material cost increases during the quarter. The company
reported EBITDA margins of 13.3% during the quarter as
compared to 16.2% in Q1FY12. However, there was an
improvement as compared to Q2FY11 where margins were
12.7%. EBITDA margins are expected to come back to normal
levels of around 14.5%-15.0% from Q3 onwards. For the full
year FY12E Dhanuka is expected to report EBITDA margins of
14.7%
Key highlights of the quarter
• Despite lower margins on sequential basis, PAT margins
were higher at 11% as compared to Q1FY12 of 10.7% due
to lower tax. The company has changed product mix at
its Uddampur facility (which is under 100% tax benefit
currently) in addition with usage of surcharge tax
resulted in lower tax rate during the quarter
• The company launched four new products during the
quarter with association with various MNCs.
• Dhanuka is in process of acquiring 25% stake in a Seed
Company and is expected to complete the process
during FY12.
Valuation & Recommendations
We still believe the outlook for the company looks promising
with factors like the low per-capita consumption of
pesticides, which provides opportunities for growth, increased
demand for food grains and the rising awareness about
pesticide usage among the farming community.
Based on our EPS of Rs. 12.7 for FY12E and a target multiple
of 11x we arrive at target price of Rs. 140 potential upside
of 38% from current levels.
26 February 2011
Dhanuka Agritech - Q3FY11 Result Update :: Crisil
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Dhanuka Agritech Ltd
Going strong
Fundamental Grade 3/5 (Good fundamentals)
Valuation Grade 4/5 (CMP has upside)
Industry Chemicals
Dhanuka Agritech Ltd’s (Dhanuka’s) Q3FY11 revenues and operating
profitability were in line with CRISIL Equities’ expectations with an expected qo-
q drop in sales at the end of the kharif cropping season. The growth in
bottom line has been higher than expected due to lower tax outlay and rise in
other income. We have consequently raised our PAT estimates for FY11-FY13.
This and the rolling forward of earnings estimates by a year have led us to
raise our fair value to Rs 87 from Rs 79. We retain the fundamental grade of
‘3/5’ due to Dhanuka’s earnings stability and expectations of continued strong
performance.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dhanuka Agritech Ltd
Going strong
Fundamental Grade 3/5 (Good fundamentals)
Valuation Grade 4/5 (CMP has upside)
Industry Chemicals
Dhanuka Agritech Ltd’s (Dhanuka’s) Q3FY11 revenues and operating
profitability were in line with CRISIL Equities’ expectations with an expected qo-
q drop in sales at the end of the kharif cropping season. The growth in
bottom line has been higher than expected due to lower tax outlay and rise in
other income. We have consequently raised our PAT estimates for FY11-FY13.
This and the rolling forward of earnings estimates by a year have led us to
raise our fair value to Rs 87 from Rs 79. We retain the fundamental grade of
‘3/5’ due to Dhanuka’s earnings stability and expectations of continued strong
performance.
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