Dhanuka Agritech posted a weak set of numbers in the second quarter as revenues were down 0.8 percent at Rs 439 crore versus Rs 442 crore for the same quarter last fiscal. Year-on-year (YoY) gross margins were down at 36.9 percent versus 38 percent and EBITDA was down at 7.7 percent at Rs 82 crore versus Rs 89 crore.
MK Dhanuka, Managing Director of Dhanuka Agritech, said that because of an erratic monsoon, July and August were bad in terms of demand but September showed some revival, and hence revenues were flat in Q2, else we would have seen de-growth.
However, October has shown a positive trend and the same is expected for the rest of the Rabi season because of the moisture in the soil and availability of water for Rabi crops. The season should remain good and so the third and fourth quarters would be good for the industry.
For the whole year, it would be single-digit revenue growth, but for the second and third quarter it would be near to double-digit growth, Dhanuka told CNBC-TV18.
When asked about the growth trajectory for Orchid Pharma, he said that Dhanuka Laboratories owns 90 percent in Orchid Pharma and earlier the company was holding 98 percent, but as per SEBI guidelines they have diluted 8 percent.
We manufacture cephalosporins in Orchid Pharma, which are basically used after surgery, but due to the COVID-19 pandemic, fewer surgeries took place in comparison to pre-COVID times. Hence, once the COVID effect is over, we hope business will get a boost and Orchid Pharma will deliver growth as per market expectations, he explained.
Further, Dhanuka elaborated that they have time until September 30, 2022, to bring down their stake in Orchid Pharma to 75 percent.
He said that from November 1 they have increased prices of all generic material. "We have around 50 percent share of the speciality molecule from Japan, Europe and US companies where the price increases are not there. The price increases are only on generic side,” he said and added that raw material prices are high and are likely to remain high until February-end because of the Winter Olympics in China.
However, he was hopeful that from March onwards, prices would come down to normal levels.
For the full interview, watch the video.