Our margins will improve next year if normal monsoon comes: RG Agarwal, Group Chairman, Dhanuka Agritech
In an exclusive chat with ET Now, RG Agarwal, Group Chairman, Dhanuka Agritech spoke about demonetisation impact on the company and margins.
ET Now: In Q3 your volumes grew only 3.5% in contrast to 12-13% over the nine-month period of FY17 would you attribute this entirely to demonetisation?
RG Agarwal: Yes, demonetisation is one of the reason because rural economy was mainly having cash transaction so definitely it has impacted rural business, especially farmers.
ET Now: Your company’s business has been hit because some of the peers within your space have said that inventory in the system remains elevated and off take will only see a gradual improvement. Can you tell us about your interactions with dealers?
RG Agarwal: Some companies are having a better growth because of their new and speciality products and this industry is dependent on monsoon. So, monsoon was overall meteorological department say it was normal but it was not properly distributed so in some area it was drought and in some area it was flood. If it would have been normal, then our GDP from agriculture instead of 4% it could have been even up to 7%.
ET Now: Do you believe that margins will sustain at about 18% odd, 18.5% or you would push past 19% because that is where you have done a good job?
RG Agarwal: We will be maintaining the same because now major season is over of this rabi so improvement is not possible this year but in future yes if normal monsoon comes then definitely we will be in a position to improve our margins.
ET Now: In Q3 your volumes grew only 3.5% in contrast to 12-13% over the nine-month period of FY17 would you attribute this entirely to demonetisation?
RG Agarwal: Yes, demonetisation is one of the reason because rural economy was mainly having cash transaction so definitely it has impacted rural business, especially farmers.
ET Now: Your company’s business has been hit because some of the peers within your space have said that inventory in the system remains elevated and off take will only see a gradual improvement. Can you tell us about your interactions with dealers?
RG Agarwal: Some companies are having a better growth because of their new and speciality products and this industry is dependent on monsoon. So, monsoon was overall meteorological department say it was normal but it was not properly distributed so in some area it was drought and in some area it was flood. If it would have been normal, then our GDP from agriculture instead of 4% it could have been even up to 7%.
ET Now: Do you believe that margins will sustain at about 18% odd, 18.5% or you would push past 19% because that is where you have done a good job?
RG Agarwal: We will be maintaining the same because now major season is over of this rabi so improvement is not possible this year but in future yes if normal monsoon comes then definitely we will be in a position to improve our margins.
