Prabhudas Lilladher is bullish on Dhanuka Agritech has recommended buy rating on the stock with a target price of Rs 578 in its research report dated July 19, 2019.
Prabhudas Lilladher's research report on Dhanuka Agritech
Dhanuka Agritech (DAGRI) reported inline results. Topline growth of 3% was impacted by 15-20 days delay in monsoon leading to prolonged seed sowing and low agrochemicals placement. Gross margin contraction of 110 bps to 34% led to disappointment and was due to high cost inventory coupled with heightened competitive intensity in the industry. FY20 performance of Dhanuka as well as other domestic players now significantly hinges on Q2. If the recent pick up in rain continues and gets more broad-base then FY20 is likely to be a turnaround year for DAGRI where growth would be coming from new launches (6 new launches, ITR @ 17%) and efforts put to revamp marketing set up. DAGRI's fortunes are entirely dependent on the domestic agriculture industry hence earnings volatility is expected to be high, based on monsoon pans out.
Dhanuka Agritech
Maintain BUY rating with a target price of Rs578 based on 18x FY21E earnings.
For all recommendations report, click here
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