Dharmaj Crop Guard Q2 FY25 PAT up 18% at Rs. 21 Cr

Date:11-11-2024

Dharmaj Crop Guard Limited, one of the fastest-growing agrochemicals Company, announced its financial results for Q2 & H1FY25. 

Commenting on the results, Mr. Rameshbhai Talavia, Chairman and Managing Director, said:

″Dharmaj has demonstrated continued strong performance in Q2FY25, with Revenue from Operations showing a robust 21% growth , primarily driven by the Active Ingredients vertical. This growth underscores the Company's ability to capitalize on market opportunities in this segment.

The formulations business remained flattish year –over year due to a few factors. Firstly, significantly higher rainfall in August and September across major geographies disturbed the usual insecticide spraying schedule towards end of sea son, leading to slower business momentum across industry. Further, dampened demand towards the end of sea son resulted in a price contraction of ~10% across the board in September. This correction came after promising price trends for Agrochemicals from April to August.

These factors contributed to a marginal decrease in B2Band B2C sales during Q2. However, it's noteworthy that volume growth in formulations was still achieved, offset by lower realizations.

Operations at Unit 2 in Sayakha are progressing as expected, with a 12% QOQ growth. Unit 2 at Sayakha has been able to register ₹1,180 million in sales in the first - half of FY25. Production activities are being gradually ramped up, and the performance in H1FY25 has been satisfactory.

Overall, the Company ha s achieved an impressive 37% top - line growth in H1FY25, with a higher contribution coming from the Active Ingredients segment.

There is a fillip to higher falls a s well. The abundant rainfall across the country has led to record reservoir levels, which bodes well for a strong Rabi sea son. Dharmaj anticipates recovering some of the lost momentum in the formulations business during the Kharif season in the upcoming Rabi season.

On the profitability front, while Gross Margins remained healthy and in line with Q1, there was some compression in EBITDA margins YOY due to; higher Operating Expenses associated with Unit 2 operations, increased Employee Benefit expenses resulting from annua l appraisals in July and new hirings and higher Depreciation & Finance Costs.

These factors led to a decrease in PAT on a YOY basis. However, it's important to note that the costs associated with Unit 2 are expected to normalize a s revenues from the unit increase.

Operationally, our efforts to further build our extensive market presence are ongoing, we continue to add retail touchpoints and have also launched 4 new products on the Brand Formulations front.

The outlook for the upcoming Rabi season remains positive, supported by expectations of bumper sowing. The company is making concentrated efforts to ramp up production at Unit 2, positioning it as a key growth engine for future expansion.″