AgroPages-Dhanuka to reap rewards of niche focus, new products-Agricultural news

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The strategy of consistently adding new specialty chemicals with the help of global innovators has enabled Dhanuka Agritech to outgrow peers. Given its focus on fast-growing segment, pan-India reach and collaboration with global agrochemicals companies, the company is likely to continue the growth momentum in future.

Delhi-based Dhanuka Agritech launched 16 new products in the past three fiscal years. The thrust continued with seven new launches in the first two quarters of the current fiscal. It plans to introduce two more products in the second half. The share of incremental revenue from new products reached 20% in FY16, compared with 15% in the previous fiscal.

Dhanuka's product portfolio is concentrated in the fast-growing herbicide segment unlike the domestic industry which focuses on insecticides. The herbicide segment is growing at a rapid pace owing to the rising manual labour cost in India. Globally, it is the biggest category.

The company's management hopes to create some blockbuster products each year. Among the recently introduced products, the sugarcane and maize herbicide `Sempra,' co-marketed insecticide 'Cover' and fungicide 'Conika' hold the potential. Typically, one blockbuster product means incremental revenue of about `100-150 crore every year.

Dhanuka's new products are developed by global innovators such as DuPont, Nissan Chemical, Chemtura and Mitsui. Dhanuka has become a partner of choice for the global companies due to its extensive network of 8,600 distributors across India, ability to create a brand and confidence in the handling of intellectual property.

The company's revenue grew by 13% in the first half of FY17 compared with the industry's growth of 8.6%. Analysts expect Dhanuka's revenue to grow by 16% and 22% for the current and next fiscals, respectively, on account of a strong product pipeline and focus on specialty chemicals.

In an analyst conference call, the company clarified that the government's demonetisation drive would not have much impact on its operations since the sale of its products happens on the credit basis. Therefore, lack of availability of new currency will not hamper its sales in the ongoing Rabi season.