The agency has also affirmed the rating on the short-term bank facilities at ‘CARE A1+’.
CARE Ratings stated that the ratings affirmation of bank facilities of Dhanuka Agritech (DAL) continues to reflect its established position in the agrochemical sector, backed by long operating track record, experienced management, and enduring partnerships with reputed multinational players that provide access to specialty molecules and also support the company’s operating margins to a large extent.
A diversified product portfolio across insecticides, herbicides, and fungicides, with a wide geographical footprint, enables the company to serve a large farmer base and reduce concentration risks.
Ratings also draw comfort from DAL’s strong financial risk profile, characterised by a robust capital structure, low gearing, strong debt coverage metrics, and healthy profitability.
Liquidity remains strong, supported by sizeable cash accruals, surplus liquid investments, low dependence on external debt, and sufficient headroom to fund growth requirements.
CARE Ratings further notes DAL’s recent acquisition of active ingredients Iprovalicarb and Triadimenol from Bayer AG which is expected to strengthen DAL’s global positioning and widen its product base, though revenue contribution from these molecules will remain a key monitorable in the near term.
However, ratings remain constrained by the company’s exposure to the inherently competitive and regulated crop protection industry, vulnerability to climatic variations, and risks associated with raw material price volatility and policy changes.
Profitability was partly moderated by underutilisation at the newly commissioned Dahej plant, with improvement in capacity utilisation remaining a key monitorable.
Dhanuka Agritech is engaged in manufacturing formulations and technical in agro-chemicals segment such as insecticides, pesticides, and herbicides, among others, through its manufacturing facilities at Sanand (Gujarat), Udhampur (Jammu and Kashmir), Keshwana (Rajasthan), and Dahej (Gujarat), respectively.
The company's standalone net profit rose 13.50% to Rs 55.50 crore on a 7.03% increase in revenue to Rs 528.29 crore in Q1 FY26 over Q1 FY25.
The scrip fell 1.02% to currently trade at Rs 1589.20 on the BSE.