Dhanuka Agritech Navigates Q2 FY26 Amidst Climatic Headwinds and Strategic Shifts

Dhanuka Agritech Limited, a prominent player in the Indian agrochemical sector, recently announced its financial results for the second quarter and half-year ended September 30, 2025. The period presented a mixed bag, with the company facing significant operational challenges primarily due to adverse climatic conditions, which impacted its top-line and profitability. Despite these headwinds, Dhanuka Agritech continues to forge ahead with strategic initiatives aimed at long-term growth and market leadership.

For Q2 FY26, Dhanuka Agritech reported revenue from operations of INR 598.25 crore, a notable decrease from INR 654.28 crore in Q2 FY25. This 8.56% year-on-year decline was largely attributed to abnormal and uneven rainfall distribution across various states, leading to significant crop losses and reduced demand for agrochemicals. The company's EBITDA also saw a dip, coming in at INR 136.73 crore compared to INR 159.58 crore in the prior-year quarter, reflecting a 14.32% decline. Consequently, Profit After Tax (PAT) stood at INR 93.97 crore, down from INR 117.52 crore in Q2 FY25, marking a 20.04% reduction. The gross profit margin remained relatively stable at 42.45%, slightly up from 42.18% in Q2 FY25, but EBITDA and PAT margins compressed to 22.85% and 15.71%, respectively.

Segmental Performance and Market Dynamics

The impact of climatic conditions was particularly pronounced in the herbicides segment, which saw its contribution to total revenue drop to 9% in Q2 FY26 from 17% in Q2 FY25. Insecticides remained the largest segment, contributing 46% of revenue, while fungicides accounted for 29%, and other products made up 16%. Geographically, the revenue mix showed North India contributing 24%, South Zone 33%, East India 13%, and West India 29% in Q2 FY26. The management highlighted that the abnormal rainfall delayed harvesting and the application of crop protection products, limiting pest infestation and reducing demand. Furthermore, regulatory changes regarding biostimulants led to a sales hit of over INR 20 crore in the quarter, as the government implemented a new framework without adequate industry consultation.

Strategic Initiatives and Future Outlook

Despite the challenging quarter, Dhanuka Agritech remains focused on its long-term growth strategy, emphasizing innovation and market expansion. The company announced receiving the Registration Certificate for Ipflufenoquin for indigenous manufacture, a product developed in collaboration with Nisso Chemicals, Japan, targeting leaf and neck blast in transplanted paddy. Additionally, trial production of Difenoconazole, the second product from its Dahej plant, has commenced, with an expected potential of 200 metric tons for the Indian market. The company also launched Wardu, a new biostimulant, and is awaiting regulatory clearances for its proprietary biostimulants.

Management reiterated its commitment to strengthening its association with agricultural universities and Krishi Vigyan Kendras (KVKs) to impart knowledge and the latest technology to farmers. The company's digital outreach initiatives, including Zoom meetings, Instagram, Facebook, and YouTube communications, are gaining traction, helping to connect with the next generation of farmers. For FY26, management expects flat revenue growth and an EBITDA decline of approximately 100 basis points, with a projected 2-3% growth in H2 FY26 to offset the H1 performance. The revenue from Bayer products for FY26 has been revised downwards to INR 40 crore due to registration delays in international markets.

Concluding Thoughts

Dhanuka Agritech Limited is navigating a complex environment marked by climatic uncertainties and evolving regulatory landscapes. While the Q2 FY26 results reflect these challenges, the company's strategic focus on new product development, manufacturing expansion, and farmer engagement underscores its commitment to long-term value creation. The emphasis on margin-accretive products and leveraging its robust distribution network positions Dhanuka to capitalize on future opportunities in the growing Indian agrochemical market, aiming for a stronger performance in the upcoming quarters.