Dhanuka Agritech Shares Decline on Weak Second Quarter Earnings

Dhanuka Agritech Limited announced its second quarter earnings for the period ending September, revealing a significant downturn. The company's net profit declined by 20% year-on-year, dropping from ₹117.5 crore to ₹94 crore. Revenue also contracted by 8.6%, falling to ₹598.2 crore from ₹654.3 crore in the corresponding quarter last year. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) saw a 14.4% decrease, settling at ₹136.6 crore, while the profit margin narrowed to 22.84% from 24.39%. Earlier, in July, the company had projected a revenue growth of 14-15% for the fiscal year 2026 and anticipated a robust second quarter due to favorable monsoon conditions. The chairman had highlighted the July-September period as crucial for agrochemical sales. Following the results, shares of Dhanuka Agritech experienced a decline, falling nearly 3% on Friday, October 31. The stock hit an intraday low of ₹1,395.5 and was trading down 2.5% at ₹1,420.5 around 12:40 pm. The stock has also seen an 8% decrease over the past month. Impact: The weak earnings report and subsequent stock price fall can negatively affect investor sentiment and the company's market valuation. It may also raise concerns about the performance of the broader agrochemical sector and potentially impact the company's ability to meet its future growth targets. Impact rating: 7/10. Difficult Terms: Net Profit: The amount of profit a company has left after deducting all its expenses, including taxes and interest, from its total revenue. Revenue: The total income generated by a company from its primary business operations, such as selling goods or services. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA): A metric used to measure a company's operating performance before considering financing costs, taxes, and non-cash expenses like depreciation and amortization. Margin: The percentage of revenue that remains as profit after deducting the cost of goods sold and operating expenses. Agrochemical: Chemicals used in agriculture to protect crops and enhance yield, including pesticides, herbicides, fungicides, and fertilizers.