BWI: Dhanuka Agritech Limited Upgraded by CRISIL Equities Assigned a valuation grade of 4/5 – Superior Fundamentals

Press release from Business Wire India
Source: Dhanuka Agritech Ltd.
Monday, July 18, 2011 05:27 PM IST (11:57 AM GMT)
Editors: General: People; Business: Banking & financial services, Business services, Chemicals, Financial Analyst, Stock exchanges
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Dhanuka Agritech Limited Upgraded by CRISIL Equities Assigned a valuation grade of 4/5 - Superior Fundamentals


New Delhi, Delhi, India, Monday, July 18, 2011 -- (Business Wire India) -- -- Indicates that the market price has 'upside' from the current levels of Rs 91 (as on July 08 2011)
-- The one-year fair value of the stock is Rs 109

Dhanuka Agritech Ltd- Bombay Stock Exchange (BSE: 507717) and National Stock Exchange (NSE: DHANUKA) listed, India's leading crop protection solutions provider having Rs.540 crores (USD 135 million) gross turnover, has been assigned "4/5" fundamental grade by CRISIL Equities, raising it from the previous "3/5" grade with a one-year fair value of Rs 109 per share, in its July 11, 2011 report.

The grades indicate that Dhanuka's fundamentals are 'superior' driven by company's consistently robust financial performance. While the domestic pesticide industry grew at 18% CAGR over FY07-10, Dhanuka's revenue grew by 27% CAGR over the same period. The company's return on equity has been more than 35% in the past three fiscals, which is also higher than that of its peers. With the backing of a strong management, the company has been able to maintain its market share in the past four years among bigger competitors. The upbeat prospects of the domestic pesticide industry further support the grade.

Commenting on the occasion, Mr. M K Dhanuka, Managing Director, Dhanuka Agritech said, "We are quite excited about our fundamental grade being upgraded by CRISIL Equities. At Dhanuka, our constant endeavor is consistently achieving significant growth in our financials. We are poised for capacity expansion at our manufacturing capabilities at Sanand (Gujarat) and Udhampur (J&K). With the further expansion of our already extensive distribution network, we are sure to achieve our next milestone of crossing Rs.1,000 crore turnover in the next couple of years. Our esteemed Chairman - Mr. R G Agarwal has given us vision of looking beyond 1000."

For FY11-FY12, Dhanuka Agritech expects 25% growth in topline in comparison to last year's 21%. With current retail and dealer base of almost 70,000 and 30 offices and warehouses across India, Dhanuka is among the top five Companies in India when it comes to branded sales.

CRISIL Equities expects Dhanuka's top line to grow at a two-year CAGR of 17.7% to Rs. 6.7 bn over FY11-13, largely on account of the company's focus on sales of specialty molecules and capacity expansion, which will assist in achieving higher growth than the industry. EBITDA margin and PAT margin in FY13 are projected at 14.8% and 10.0%, respectively, akin to current profitability levels.

About Dhanuka Agritech Limited

Dhanuka Agritech Limited is in the business of Agro-Chemicals, fertilizers and Seeds. The company reaches out to more than 10 million farmers with its eco-friendly high quality crop care products. The Agri-Division has a pan-India presence through its marketing offices in all major states in India. It has manufacturing units at Gurgaon, Sanand & Udhampur. It has one of the largest distribution network in India with over 6000 distributors/ dealers selling to over 70,000 retailers and ultimately benefitting 10 million farmers across India. "Dhanuka" is now the preferred choice of farmers.

Dhanuka Agritech has, in its 30 years of existence in the agro chemicals sector in India, laid special emphasis on eco-friendly formulations, low-dose active pesticides, integrated pest and weed management. Numerous measures taken by the company in the line of educating farmers regarding use of pesticides, directly and through its field force of 'Dhanuka Doctors'; rain water harvesting and adopting better agricultural practices, coupled with an aggressive growth strategy have contributed to the company's growth over the years.


CONTACT DETAILS
Neeraj Atri, Mavcomm Consulting, +91 9811714871
Amir Hashmi, Mavcomm Consulting, +91 9911190972
Amit Jha, Mavcomm Consulting, +91 9312883594

KEYWORDS
PEOPLE, BANKING, BUSINESS SERVICES, CHEMICALS, Financial Analyst, STOCK EXCHANGES

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