Dhanuka Agritech up for 4th straight day, hits 52-wk high on good Q4 nos

The stock hit a 52-week high of Rs 667. It has rallied 15% in the past four trading days, as compared to a 3.9 per cent decline in the S&P BSE Sensex.

Shares of Dhanuka Agritech were trading higher for the fourth straight day on Friday, hitting a new high of Rs 667, up 4 per cent on the BSE in an otherwise weak market after reporting healthy numbers for the quarter ended March 2020 (Q4FY20).

In the past four trading days, the stock of the agrochemical company has rallied 15 per cent, as compared to a 3.9 per cent decline in the S&P BSE Sensex.

The company’s EBITDA (earnings before interest, taxes, depreciation, and amortisation) for the quarter rose 38.6 per cent year-on-year (YoY) to Rs 45.78 crore from Rs 33.03 crore in the previous year quarter. EBITDA margin improved 297 basis points (bps) to 20.11 per cent from 17.14 per cent during the quarter.

Total income from operations grew 18 per cent YoY at Rs 228 crore driven by strong sales momentum across product segments. Fungicides registered 33 per cent YoY growth, herbicides grew by 32.6 per cent and insecticides recorded a growth of 14.9 per cent during the quarter. The sales growth was driven by higher volume growth of 19.0 per cent. The company has taken price hikes for the upcoming Kharif season.

With this year’s favorable monsoon forecast coupled with a slew of initiatives announced by the Government, the management is hopeful of much positive performance in the fiscal year 2020-21.

Dhanuka’s asset-light business model, superior return ratios, and recent product launches are expected to drive growth. Analysts at Dolat Capital expect Dhanuka Agritech to navigate through the pandemic with the help of a normal monsoon, strong distribution and product brand re-call. The brokerage firm believes that on the back of normalisation of technical prices margins will stabilise over the next few quarters.

At 12:12 pm, the stock was trading 2 per cent higher at Rs 653, as compared to a 1.5 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 290,000 shares changing hands on the NSE and BSE so far.