Dhanuka Agritech Limited

Basic Materials — Agricultural Inputs · NSE

₹867.00−₹8.40 (−0.96%)

DalalBaazaar Score

62 / 100

🟢 Good

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, micro-cap size, which brings thin liquidity, falling profits.

In simple words: Strong business and financial position, but sales are shrinking. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Dhanuka Agritech Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Dhanuka Agritech Limited operates as an agro-chemical company in India. The company offers herbicides, insecticides, fungicides, and plant growth regulators in various forms, such as liquid, dust, powder, and granules. It also provides biological and efficacy enhancers.

IndustryAgricultural Inputs

SectorBasic Materials

Employees1,106

Annual revenue₹1,953 Cr

How does it make money?

Turns over ₹1,953 Cr a year. Of every ₹100 of sales, about ₹15 reaches shareholders as profit, with ₹22 left at the operating level before interest, tax and depreciation. Each of its 1,106 employees supports ₹1.77 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin22.2%

Net margin14.7%

Revenue / employee₹1.77 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TATA STEEL LIMITEDP/E 19.8x · ROE 10.8%

JSW STEEL LIMITEDP/E 12.0x · ROE 24.7%

ULTRATECH CEMENT LIMITEDP/E 37.6x · ROE 11.1%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 22.1%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 17.1% against a peer median of 22.3% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE22.1%

ROE17.1%

Peer median ROE22.3%

What is the outlook?

8 analysts covering the stock expect revenue to grow about 11.8% and earnings to grow about 13.4% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+11.8%

Est. earnings growth+13.4%

Analysts8

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +16% while net margin moved +6% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+16%

Margin effect+6%

DalalBaazaar Score

62/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.1% — barely ahead of inflation
✗ Profit CAGR of only 7.1%
✗ Latest-year revenue growth of -12.6% is below the longer-term trend — momentum is fading
✗ Profit fell 34.5% in the latest year

Quality vs. Valuation

Company Quality

60/ 100

Average

How good the business is, ignoring the share price entirely.

Valuation

74/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

14.6x

3Y Median

21.1x

40 monthly readings · mean 22.6x · range 13.6x–36.4x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 31% below its 3y median of 21.1x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 49% below the peer median of 28.7x.

vs. its own history

Cheap

21.1x median over 40 months · -31%

vs. sector peers

Cheap

28.7x median of 4 peers · -49%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

14.6x

P/B

2.32x

EV/EBITDA

9.0x

PEG

2.04

Dividend Yield

0.23%

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 17.7% to 22.2% over 3 years.
Cash generation is improving
Free cash flow is up 1298% over 3 years.
High return on capital employed
ROCE of 22.1% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 14.6x the stock trades 31% below its own median of 21.1x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Return on equity is falling
ROE has dropped from 22.0% to 17.1% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 27.6% to 22.1% — often a sign of competition or overexpansion.
Inventory building faster than sales
Inventory is up 50% against revenue growth of 16% — stock may not be moving.

Red Flags

2 items require attention · 1 high · 1 watch

🔴High leverageFinancial
Debt/Equity of 1.82x — earnings must service borrowings before shareholders see anything.
🟡Inventory building faster than salesFinancial
Inventory up 50% against revenue up 16% — stock may not be moving.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 22.1% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 17.7% to 22.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 31% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 49% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Leverage amplifies any setback
Debt/Equity of 1.82x. Interest is payable whether or not the business has a good year.
Growth barely outpaces inflation
Revenue compounding at 5.1% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Returns on shareholder capital are falling
ROE has dropped from 22.0% to 17.1%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 20%✓ 22.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Revenue growth stays above 4% a year✓ 5.1% CAGR
Latest reported year was -12.6%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
3Free cash flow remains positive✓ ₹168 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.1x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 19%✓ 22.1%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 12 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹3,865 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.6x

Cheap

Cheap against the generic band

P/B Ratio

2.32x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹59.47

Profitable

Profitable on a per-share basis

ROE

17.1%

Strong

Strong capital efficiency

ROCE

22.1%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.82x

High

High leverage

Revenue Growth (YoY)

-12.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

-34.5%

Falling

Profits are shrinking

Dividend Yield

0.23%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹168 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹867

P/E (Forward)

11.9x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

8.8%

Average

Average margins

Net Margin

13.7%

Good

Strong bottom-line conversion

Current Ratio

4.09

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.32

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

918.6 / 965.0

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

20.6

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,682 Cr	₹1,733 Cr	₹2,010 Cr	₹1,953 Cr	+5.1%
EBITDA	₹298 Cr	₹353 Cr	₹445 Cr	₹433 Cr	+13.3%
EBITDA Margin	17.7%	20.4%	22.1%	22.2%	—
PAT (Net Profit)	₹234 Cr	₹239 Cr	₹297 Cr	₹287 Cr	+7.1%
EPS	₹50.35	₹52.46	₹65.55	₹63.72	+8.2%
ROE	22.0%	19.0%	21.2%	17.1%	—
ROCE	27.6%	24.7%	27.4%	22.1%	—
Total Debt	₹34 Cr	₹27 Cr	₹74 Cr	₹31 Cr	-2.9%
Free Cash Flow	₹12 Cr	₹45 Cr	₹69 Cr	₹168 Cr	+140.9%

🟢 Revenue has grown at 5.1% a year over 3 years.

🟢 EBITDA has grown at 13.3% a year over 3 years.

🟢 EBITDA Margin has risen from 17.7% to 22.2% over 3 years (+4.5 pts).

🟢 PAT (Net Profit) has grown at 7.1% a year over 3 years.

🟢 EPS has grown at 8.2% a year over 3 years.

🔴 ROE has fallen from 22.0% to 17.1% over 3 years (-4.9 pts).

🔴 ROCE has fallen from 27.6% to 22.1% over 3 years (-5.5 pts).

🟢 Total Debt has shrunk at 2.9% a year over 3 years.

🟢 Free Cash Flow has grown at 140.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,102 Cr

Total Liabilities

₹420 Cr

Total Debt

₹31 Cr

Cash & Equivalents

₹19 Cr

Operating Cash Flow

₹196 Cr

Capex

-₹28 Cr

Shareholding (proxy)

Institutional Holding

19.8%

Insider Holding

70.2%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

17 Jul 2026

Analyst Consensus

Recommendations

7 Buy · 2 Hold · 0 Sell

Target Price (Mean)

₹1,252.33

+44.4% vs CMP

Target Range

₹1,179 – ₹1,376

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 positive2 mixed2 general

Dhanuka Agritech (BSE:507717) - Stock Analysis

Simply Wall Street, 16 Oct

Dhanuka Agritech Ltd. 52 Week Low Streak Deepens Further

Univest, 13 Oct

DHANUKA Forecast — Price Target — Prediction for 2027

TradingView, 26 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Dhanuka Agritech (NSEI:DHANUKA) Stock Forecast & Analyst Predictions

Simply Wall Street, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Dhanuka Agritech announces Rs 70 crore buyback, sets price at Rs 1,400/share. Check record date

The Economic Times, 19 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Dhanuka Agritech announces ₹70 crore share buyback, declares final dividend of ₹2 per share; check record dates

Livemint, 19 MayCapital return

🟢Potentially positiveCash or shares returned to holders. A buyback is only good value if the shares were cheap when bought.

Watch Items

Revenue growth is negative (-12.6%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

🟢Business QualityStrong13.9/20

🟢Financial HealthStrong13.9/20

🔴GrowthWeak7.5/20

🟡ProfitabilityModerate9.5/15

🟢ValuationAttractive11.8/15

🟡RiskModerate5.3/10

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 20%22.2%
✓Revenue growth stays above 4% a year5.1% CAGR
✓Free cash flow remains positive₹168 Cr
✓Debt / EBITDA stays below 2x0.1x
✓ROCE stays above 19%22.1%