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    Dhanuka Agritech expects rebound in September owing to good monsoon; targets margin of 17.5% in FY22

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    Dhanuka Agritech expects rebound in September owing to good monsoon; targets margin of 17.5% in FY22

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    Agro chemicals manufacturer Dhanuka Agritech is on the radar on the back of a CRISIL report which says that deficient monsoon has hit sowing in the country. To understand the impact and the outlook, CNBC-TV18 spoke to MK Dhanuka, managing director, Dhanuka Agritech.

    Agro chemicals manufacturer Dhanuka Agritech is on the radar on the back of a CRISIL report which says that deficient monsoon has hit sowing in the country. To understand the impact and the outlook, CNBC-TV18 spoke to MK Dhanuka, managing director, Dhanuka Agritech.
    He said, “The initial forecast was 105 percent rainfall but unfortunately, now the Skymet has forecasted around 94 percent rainfall. Although the percentage does not impact much but the distribution and timely interval, that is most important. Unfortunately, initially for 15 days, there was good rainfall, then there was a dry spell of 15-20 days, then second spell of rainfall and then again, a dry spell. Now, the third phase of monsoon has come, so I can say it has averaged out - not good, not bad.”
    On revenue numbers, Dhanuka said, “July and August have not gone well as was anticipated, but since the rainfall has come in, it is expected that September will be very good and there is water availability in reservoirs as well. So, Rabi crop is also expected to be good. We are expecting this quarter to be flattish, but for the whole year, we are anticipating single digit growth.”
    On prices, he said, “When the market demand is less, there is always pressure on prices because every company is trying to push the materials into the market even at lower prices. So, it has impacted prices and we have also reduced as per the market and it can have an impact of 100-150 basis points on the margins.”
    He added, “Margins for the whole year will be to the extent of around 17.5 percent.”
    On Dahej plant, Dhanuka said, “It is too early because we have just started the construction work there. So, it will take two years to complete the project and start production. So, we envisage production to start in April 2023 and around 50 percent of the production will be consumed in-house and 50 percent will be sold in the market to other manufacturing companies.”
    On costing, he said, “Our costing will be lesser in comparison to what we are buying from the market. The costing will be at least 10 to 12 percent less in comparison to what we are buying.”
    For full management commentary, watch the video.
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