Dhanuka Agritech Receives Buy Recommendation with a Target Price of Rs 1350
Dhanuka Agritech Reports Strong Q4FY26 Performance, Exceeding Estimates
Dhanuka Agritech has reported a robust performance in the fourth quarter of fiscal year 2026, exceeding market expectations in key financial metrics. The company's revenue, earnings before interest, taxes, depreciation, and amortization (EBITDA), and profit after tax (PAT) grew by 9%, 14%, and 30% respectively on a year-over-year basis.
The EBITDA margin stood at 25.8%, surpassing the research firm's estimate of 22.2%. This was primarily driven by the receipt of a GST refund of Rs 145 million in Q4FY26 and Rs 290 million for the entire fiscal year 2026, as well as higher marketing expense reimbursement of Rs 100 million in Q4FY26 and Rs 320 million for the fiscal year 2026. However, the company faced a Rs 35 million impact from the new labour code. Adjusted for these factors, the EBITDA margin stood at 22.2%, in line with the research firm's estimate.
The company's revenue from the Dahej segment stood at Rs 500 million in fiscal year 2026, compared to Rs 410 million in the previous fiscal year. The EBITDA loss in this segment shrunk to Rs 130 million in fiscal year 2026 from Rs 140 million in the previous fiscal year. The innovation-turnover index stood at 13.9% in fiscal year 2026, down from 14.9% in the previous fiscal year.
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| Product Segment | Revenue Contribution (FY26) | Revenue Contribution (FY25) |
|---|---|---|
| 9(3) products | ~26% | - |
| Other products | 74% | 100% |
The company's board has approved a buyback of up to 500,000 shares at Rs 1,400 via a tender offer route, aggregating up to Rs 700 million.
Maintaining Buy Rating
Despite the strong performance, the research firm is maintaining its FY27 and FY28 estimates, considering the lower base of FY26 and near-term price hikes. The firm is maintaining a BUY rating on the stock with an unrevised target price of Rs 1,350, valuing the company at 17x FY28 estimated earnings per share (EPS).
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Investor Takeaway
Investors should consider buying Dhanuka Agritech with a target price of Rs 1350.
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