AgroPages-Indian agrochemical companies to post 24% revenue growth in Q3-Agricultural news

India research firm Dolat Capital has come with its December quarterly earning estimates for agrochemical sector. Agrochemical companies are expected to deliver strong 24.3% YoY revenue growth which shall be primarily volume driven.

Among the companies under coverage, Dolat anticipate PI Industries (PII) to deliver a robust 39% revenue growth led by healthy growth in both custom synthesis and domestic agri businesses, while Rallis and Dhanuka are expected to reflect revenue growth of 16.5% and 21.6%, respectively.

(Rs in million)
Company Name	Sales			Adjusted PAT
Company Name	Q3FY13E	QoQ%	YoY%	Q3FY13E	QoQ%	YoY%
Dhanuka Agritech	1,344	-34.9	21.6	122	-48.6	55.4
PI Inds	2,645	-11.4	39.1	262	10.6	46.2
Rallis	3,787	-22	16.5	391	-33.9	-2.5

The interaction with Agrochem distributors indicated increase in demand for pesticides compared to last year and volume off-take of insecticides and fungicides is healthy.

Dolat believe that benefit from price increases implemented during H1FY2013 along with higher volume growth shall add to the overall growth momentum.

The Rabi season stats reflect normal acreage of most crops (barring rice and pulses). Area sown under all Rabi crops taken together has been reported to be 56.7mn hectares (56.1 mn hectares in corresponding period last year).

Notably, current year’s water storage is at 107% of the normal storage i.e 85.78 BCM. This coupled with favourable north winter weather conditions is expected to aid a better Rabi harvest this year.

Rabi acreage under oilseeds such as rapeseed, mustard and groundnut has seen a rise, while the area under wheat too has picked up in recent weeks. Area sown under wheat has gone up to 28.64 mn hectare (28.18 mn hectare same period last year). Wheat planting goes on till end- January. Further to, the hike in Wheat MSP by 65/- quintal to Rs 1,350 for the 2012-13 season, this is expected to give a fillip to wheat sowing in the days ahead.