Buy Dhanuka Agritech, target price Rs 850: Prabhudas Lilladher

Prabhudas Lilladher has buy call on Dhanuka Agritech with a target price of Rs 850. The current market price of Dhanuka Agritech Ltd. is Rs 697.4. Time period given by analyst is one year when Dhanuka Agritech Ltd. price can reach defined target.

Dhanuka Agritech Ltd., incorporated in the year 1985, is a Small Cap company (having a market cap of Rs 3265.14 Crore) operating in Pesticides/Agro Chemicals sector.

Dhanuka Agritech Ltd. key Products/Revenue Segments include Agrochemicals, Other Operating Revenue, Scrap and Power Generation for the year ending 31-Mar-2022.


Financials
For the quarter ended 30-06-2022, the company reported a Consolidated Total Income of Rs 409.58 Crore, up 23.93 % from last quarter Total Income of Rs 330.49 Crore and up 10.24 % from last year same quarter Total Income of Rs 371.54 Crore. Company reported net profit after tax of Rs 49.11 Crore in latest quarter.

Investment Rationale
Going forward, citing the positive demand outlook in the domestic market led by a) pick-up in rainfall activities; b) remunerative crop prices and c) lower 1H base of FY22, DAGRI remains confident of achieving double digit YoY revenue growth in FY23E with margins to be maintained at FY22 levels. It broadly maintains FY23/24 EPS and expect DAGRI to clock Revenue/PAT CAGR of 12%/13% each over FY22-FY24E. Maintain ‘BUY’ with a revised TP of INR850(earlier Rs870) based on 15xFY24E EPS.

Promoter/FII Holdings
Promoters held 70.0 per cent stake in the company as of 30-Jun-2022, while FIIs owned 3.9 per cent, DIIs 17.18 per cent.