Please note that this conference is being recorded. I now hand the conference over to Mr. Himanshu Binani from Antique Stock Broking. Thank you and over to you, sir.
Thank you, Aman. On behalf of Antique Stock Broking, I would like to welcome all the participants on the post-results conference call of Dhanuka Agritech. From the management, we have Mr. M.K. Dhanuka, the Managing Director of the company, Mr. Rahul Dhanuka, Chief Operating Officer, and Mr. V.K. Bansal, the Chief Financial Officer of the company. Without any further delay, I would like to hand over the call to Mr. Dhanuka for his opening remarks, post which we will take, we'll open the floor for Q&A. Thank you, and over to you, Dhanuka Ji.
Thank you, Himanshu. Good afternoon, ladies and gentlemen. Myself, M.K. Dhanuka, Managing Director of Dhanuka Agritech Limited. I hope all of you are doing well and keeping safe. Thank you for joining us in this Q2 FY 2021-2022 results conference call. I have with me Mr. Rahul Dhanuka, Chief Operating Officer of the company, Mr. Harsh Dhanuka, Executive Director of the company, and Mr. V.K. Bansal, Chief Financial Officer of the company. As you know, Dhanuka Agritech is a leading agrochemical company in India, focusing on branded sales in the market. The company's strength lies in the manufacturing and marketing of formulated products. The product portfolio is spread across insecticides, herbicides, fungicides, and plant growth promoters. Dhanuka Agritech is working for transforming India through agriculture by working with farmers closely to improve their production and quality, in turn enhancing their income.
We work in all major crops in India and have implemented the best-in-class technology to ensure a smooth and efficient supply chain. To service the diversity of Indian crops and needs of the farmers, the company has a wide range of products in its portfolio with over 80 brands in pack sizes ranging from 2 g to 20 l. These products are in various forms like liquids, powders, and granules. Dhanuka have a pan-India presence through our marketing team and warehouses in all the major states across India. With three manufacturing units, 40 warehouses and 14 branch offices across India, we cater to around 6,500 distributors and dealers and around 80,000 retailers. Through this extensive network, Dhanuka reaches out to approximately 10 million Indian farmers with its products and services.
Dhanuka has more than 1,000 technocommercial staff, supported by a strong marketing team to promote and develop new products. Dhanuka's strong R&D division has world-class NABL-accredited laboratory, as well as an excellent team for new product registration and development. Dhanuka has international collaboration with 10 leading global agrochemical companies from U.S., Japan and Europe, which helps us to introduce the latest technology in India. The Government of India is taking several initiatives to enhance the role of agriculture in the growth of the Indian economy, such as increasing minimum support price, e-NAM portal, direct benefit transfer, and PM Kisan Samman Nidhi. This is helping to create a robust foundation to enhance farmers' income, encourage wider adoption of high-quality seeds and judicious use of pesticides and fertilizers.
Coming to the financial performance for Q2 of FY 2021-2022, revenues from operations stood at INR 438.582 crore in Q2 of FY 2021-2022 versus INR 442.39 crore in Q2 of FY 2020-2021. EBITDA stood at INR 89.09 crore in Q2 of FY 2021-2022 versus INR 97.2 crore in Q2 of FY 2020-2021. Profit after tax was at INR 63.37 crore in Q2 of FY 2021-2022 versus INR 70.08 crore in Q2 of FY 2020-2021. There was adverse impact of weather conditions in July and August on the business, which has reversed in the month of September and October, and currently the conditions are favorably for consumption of agrochemicals.
Unfortunately, because of the erratic behavior of monsoon in the month of August and September, the sales and consumption of agrochemicals was impacted to a large extent. When the rains were required, there was dry spell for 25 days to 30 days, and when rains were not required, there was heavy rainfall converting into the floods in number of states which has impacted the sales and growth of the agchem industry. Apart from this, the crop conditions in North India was very good, and farmers reaped a good yield. Unfortunately, there was no pest impact on the crops, because of which the sales of the agrochemicals was impacted. Coming to zone by share of turnover for FY 2021-2022 for Q2. The North zone has contributed 21.71%. The East zone has contributed 12.14%.
West zone has contributed 35.26%, and South zone has contributed 30.49%. Product category by share of turnover for Q2 of FY 2021-2022. Insecticides contributed 43.45%. Fungicides contributed 23.41%. Herbicides, 22.54%, and others, 10.60%. Coming to the financial performance for quarter two of FY 2021-2022. As discussed last time, the company has also started working on its greenfield project at Dahej, Gujarat. Further, I'm happy to inform you that Dhanuka has been granted its first patent on 9 August 2021 for the formulation of synergistic herbicidal formulation, comprising a combination of halosulfuron-methyl and metribuzin for control of sedges, mallow, and broadleaf weeds in sugarcane.
The product is under registration process, and we expect to launch the same in 2023. We have also conducted the ritual of Bhoomi Pujan for the new R&D facility at Palwal, Haryana on 10th September 2021. Dr. Yogendra Sheoran, Ex-Director Horticulture, Government of Haryana, graced the occasion as chief guest. We will also set up an R&D and training center at this location for development of new technologies for agriculture and transfer of these technology to the farmers. I'm pleased to share that ICRA has upgraded the long-term rating of Dhanuka Agritech Limited from ICRA AA- to ICRA AA. Dhanuka has entered into shareholders agreement and share subscription agreement with M/s IoTechWorld Avigation Private Limited, a drone manufacturing company, on 11th August 2021.
As per said agreement, Dhanuka will invest a total amount of INR 30 crores in IoTech in the form of subscription of compulsory convertible preference shares. The company has invested the first tranche of INR 20 crores in this company in September 2021. Dhanuka is regularly organizing various seminars, Krishak Gostis, Kisan Sammelans, to educate the farmers of India about new innovative techniques of farming. Being India's leading agrochemical company, we are at the forefront of introducing digital solutions and innovations. In the same endeavor, we have tried to boost our reach through online and virtual farmer interactions and aggressive use of TV advertisements for our key products, such as Sempra, Targa Super, Chempa, Godiwa Super, and MYCORe, etc. Dhanuka is focused on expanding its market coverage through its network of distributors and digital platforms, including social media presence, where we engage with the end consumer.
Dhanuka consider itself responsible for securing the farmers' welfare and preserving food security of the nation. We continue to strengthen our association with the farmer producer organizations, Krishi Vigyan Kendras, and other important institutions to increase our business expertise and boost our market presence. On this note, I would like to hand over to the operator to enable us to take question and answer. Thank you.
Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Anyone who wish to ask a question may please press star and one. The first question is on the line of Varshit Shah from Veto Capital. Please go ahead.
Hi, sir. Congratulations on a good set of numbers given the external conditions for the industry. Sir, my first question is on the Dahej manufacturing projects. Any update on that project and what is the progress and is there any change or revision in timelines for the execution of the project?
There is no change and the project is on, will be on track. There is a delay of around 4-6 weeks because of heavy rain in the month of September. We are sure we will be on time by March.
Sir, second is in terms of the new product which you just mentioned, for which you've been granted patent. Are there any other also molecules in the pipeline where the work is going on and probably some of the fruits can come in, let's say over the next 2-3 years? My question pertains to the fact that our innovation turnover index has kind of suffered given the COVID and then of course we had weather challenges. I just wanted to understand, are we building our own 90-strong pipeline from a 2-3-year perspective?
Yes, Mr. Varshit. We are bringing every year two new 9(3) molecules as per our commitment. This year we have already launched one molecule and one more molecule to be launched by end of Q4. Next year also, we have two new 9(3) molecules in the pipeline. With respect to the patents, yes, this is the first patent received by Dhanuka and this product is expected to be launched in FY 2023-2024. We have further patents also in the pipeline.
One last thing which I observed in your disclosure also. I think insecticide category sales have suffered in both the quarters in Q1 and Q2 and H1 as a whole. Is this a sort of weather-related phenomena or there were lower number of pest attacks in probably your categories where you are present? Any color on that?
Yeah, you see it is largely on account of the dry spell in the month of July and August. We missed certain sprays because of which the, you see, sales of insecticide has suffered. As I shared, there was no pest attack in the North zone and the insecticides are used mainly to control the pests. When there was no pest, consumption of insecticide was less in North India, which has also impacted the sales of the insecticides category.
Thank you, sir. I have some follow-ups. I'll get back in with you. All the best for rabi season.
Thank you.
Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead.
Dhanuka ji, hi, sir. Good evening.
Good evening.
Sir, we have seen that there is a rising input cost pressure. Chemical prices across the board are going up. Also there is a China power crisis, which is also going to affect the availability of many intermediates. We still have a asset-light business model. How do you see that we are prepared to handle these challenges in rabi crop? How much kind of inventory we have? How is the availability of intermediates coming from China or even domestically and pricing? Definitely it will be available at a higher cost. Would we be in position to pass it on to the end customers?
Mr. Rohan, the prices of the generic technicals which are being imported from China or the companies who are manufacturing the technicals in India, they are also importing the intermediates from China and the prices has increased like anything. Matlab, I can say that, China has become crazy in increasing the prices. There are four reasons behind this increase in the prices. Number one, the power shortages in China, because of which the units have been closed down by the government and hardly the units are operating two days a week instead of seven days a week. Secondly, the phosphorus price has increased by 100%. So that is the second reason for increase in the prices of raw materials because phosphorus is the basic raw material for manufacturing of number of intermediates and technical grade pesticides.
Number three is basically the freight cost. Because of non-availability of the containers, the freight cost has gone very high, 3-4x . That is the third reason. The fourth reason is that the Chinese President wants blue sky during the Winter Olympics, which are supposed to be held in February 2022 in China. Because of which the government has passed order to close down all the hazardous chemical and pesticide industry. There is gap between demand and supply. Demand is more and supply is less, due to which the prices have increased like anything. Although the technical prices have increased, but the brand prices have not increased. Since the season for rabi is going to start now, it is expected that from November onwards, the price increase will happen in the market in the brands also.
Dhanuka has increased its prices effective from first November 2021. I am not sure how much price increase we will be able to pass on. It will depend on the market condition, how our competitors behave in the market and how much inventory each company is holding. We do have inventory for at least two months for sure for November and December, and some maybe for January also. After that, we will have to procure raw material at higher cost. Presently also, for some raw materials, we are procuring at new prices.
Sir, in case we are not able to increase the prices, so you are still not sure whether you will be able to pass on all the cost increase or not, and then we may expect some kind of margin pressure. I also draw parallel in the current crisis in China when almost two years back, there was a fire at the China plant, and we had a supply chain getting disrupted for almost six months, and chemical prices at that time had gone up sharply. We have seen a margin pressure in our company significantly in those 3-4 quarters. Do you compare the current situation is like similar?
If we are not in position to pass it on, we may see some margin pressure, like what we have witnessed earlier, almost three years back.
You see, Rohan Ji, as far as we believe, you see, whenever there is such a steep increase, we always get the advantage of the inventory leverage system. Even if we are not able to pass on the entire increase, still I am of the firm opinion that there will not be any decline in the gross margin, at least in Q3. If we could have been able to pass on the entire increase, then definitely there would be a good increase in the gross margin in quarter three because of the carry over inventory in the system. I don't see any possibility of declining in the gross margin in Q3 at least.
Okay, that's great. Dhanuka Ji, in terms of raw material challenges, though we have enough inventories of almost for two months, but is the material available, though even at a higher price or we are facing or do you anticipate that the material itself may not be available in the market after two months and that may create the problem of that, even if in a good rabi season, we may not be able to produce and sell in the market. Do you foresee any such situation, sir?
Availability is not a question. Only the question is of the price. Some importers are taking advantage of the situation. Although the cost has not increased to that extent, they are taking advantage of demand and supply gap. Material availability is not a question. For the future, you can not predict 100%. 90% I do hope that the products will be available at higher prices.
Okay. Last question from my side and I'll come back to you again. Sir, your investment in this technology, that's a great initiative taken by the company and the stake which you have taken in this drone company. Sir, if you just can share a little bit more than what is the thought process behind it? Is it more value-added services which you want to provide to the farmers and taking it as a business opportunity going forward or right now it is just only on a add-on service providing to the farmers? If you can just share some more detail on that.
You see, it is just a start of investment initially. Yes, we are exploring the opportunity with this easy technology, how we can use in our business.
Okay. That's it from my side, sir. I'll come back in case for follow-up question. Thank you so much, Dhanuka Ji.
Thank you. The next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead.
Yeah. Good afternoon, sir. I have a few questions. The first is on the outlook for rabi season. Given the context of the fertilizer situation, and do you see that because of shortages of fertilizer, will it have any impact on acreages and the output of the crop? In that context, how will the agricultural consumption get impacted? Just your thoughts on the same.
Right. Actually the rainfall has been really good. Commodity prices are looking up, so farmer is going to be really aggressive in terms of increasing the acreages as well as investing in the crop. DAP non-availability, DAP prices shooting up is certainly a cause of concern in terms of impacting the yield for the farmer. At Dhanuka, we get an opportunity to offer alternatives to the farmer in shape of MYCORe, our mycorrhiza product, which is an organic by-product for nutrient support to the plant by extracting nutrients from the ground. This also gives us opportunity to offer Dhanzaym, a seaweed biofertilizer to the farmer, and Maxyld, which is a combination of various nutrients for foliar application to the farmer.
At Dhanuka, we are really well-placed in terms of our complete and rich product portfolio to support the farmer at various stages of his crop and not allow the absence of DAPs to suffer the crop. We will see really high acreages of oilseeds and pulses coming up, and at Dhanuka, our portfolio is really robust to support the farmers for all these crop choices.
It's Resham.
Resham, is your question answered, sir?
Sorry. What I understood is that shortage of DAP may not have a very large impact on the acreage and the output. Correct?
Yes. It should not have impact on the acreage for sure.
Okay. Understood. Sir, the second question is on the general inventory situation in the market because as you explained just a while back that the prices are on the rise, and typically no one would like to keep a higher inventory in such scenarios. How do you seeing the approach of importers, wholesalers, retailers in the current situation?
See, one was your question, another was a speculative statement. I will address it from my perspective.
Yeah.
While prices are on a rise, so is the demand and the opportunity. At Dhanuka, we are investing aggressively in procuring the raw material, and we are keeping our pipeline robust so that we are completely capable of servicing the farmer through next six months. Our specialty product supplies, for example, Corbium, Sakura, Chempa, Sempra, Kirari, Nissodium, all these Japanese products, we are well placed, completely geared up with the required stocks for the season.
Understood.
Also, as Mr. Dhanuka earlier shared, no change in prices. Various generic products are in fluctuation in terms of their availability. They are in fluctuation in terms of prices. The channel, the market, the industry, everyone is sensing that and is trying to stock the material to the best of individual capability. This price increase message is there in the market, and our channel is trying to procure extra stocks in view of increased prices and in view of a very favorable season with high acreage increase opportunity.
Okay. Understood, sir. Last one is on Dahej project. I think the phase one, we were supposed to spend, I think, INR 60 crores-INR 90 crores in the first half, I think for the capital work in progress, looks like INR 10 odd crores only. Are we like just reconfirming, you already mentioned that by March 2022 we'll our project will be over. The rest of the project will get over in the next 4-5 months.
Yes, that's right. Up to September around INR 10 crore-INR 12 crore will be spent, and by March end we are expecting around INR 80 crore spend will be there, and first phase will be over. In the next, say from October to March, about approximately INR 60 crore-INR 65 crore.
Okay. Thank you very much, sir, and all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Prabal Sen from Centrum Broking. Please go ahead.
Thank you for the opportunity, sir. A lot of them have already been answered. Just on a broad guidance level, the phase one, Dahej, assuming the completion happens by 2022, any numbers we can speculate in terms of how it can contribute to our top or bottom line maybe over the FY 2023? The second question was in light of the H1 performance, you had, of course, already given a cautious guidance at the end of Q1 for this year's overall growth. Any revision or would you like to revisit that guidance in light of the Q2 performance? Those were my two questions.
You see, by March 2022, we will be able to complete first phase, which is basically completion of the formulation unit. There we can start the formulation of the product. We will not be able to start the technical manufacturing. It will take another one year to start the technical manufacturing from the Dahej plant. That is 2023 only we will be able to start the technical production from Dahej plant. Initially it is only for manufacturing of the formulation because there was government condition that the plot utilization should be there by March 2022.
That's why we started, so that at least we can show to the government that we have been able to start the production over there and we can save our plot because now the land is not available in Dahej. Second question is, regarding?
Guidance.
The overall guidance, sir, for 2022 and 2023, if you can speculate anything?
For the whole year we are now giving guidance for single-digit growth. We hope that like September and October has gone well, so we expect that Rabi should remain good and we should be able to deliver single-digit growth by March end.
Great. Just going back to the first question. This formulation that you will be manufacturing, those will be in limited quantities to basically keep the regulatory compliance going, which is why we don't expect any material contribution of this to numbers, at least in FY 2023.
Is that a correct way to look at it?
Right, Mr. Prabal Sen.
All right, sir. Thank you so much. Wishing all of you a very happy Diwali. Thank you so much.
Thank you, Mr. Sen. Same to you.
Thank you. The next question is from the line of Rohit Nagraj from Emkay Global. Please go ahead.
Thanks for the opportunity, sir, and congrats on the maiden patent for the company. Sir, thank you, sir. The first question is, once again harping on the Dahej facility. When the formulation plant and the technicals plant is completed by March 2023, in FY 2024, I think earlier we had provided a guidance of about INR 200 crore of revenues from this facility. Would that be the right assumption to take?
Yeah, you are absolutely right. We expect around INR 200 crore turnover in FY 2023-2024, and...
All right, sir. Thank you. Thank you for that. Sir, the second question is from the industry dynamics perspective. Historically, time and again, we have seen that whenever the input cost pressure arises, normally for players, agrochemical players, it is difficult to pass on to the farmers. Has there not been any change over a period of time that even the farmer income has increased, the MSPs have consecutively gone up, but whenever it comes for agrochemicals, we always face the situation that we are not able to pass on the increase in raw material cost to the farmers. Any thoughts on this? Thank you.
Yeah. I think I will not go with that statement, and at Dhanuka, almost every time we've been able to pass on the cost increase to the farmers. There are situations when the commodity prices are either low or the market situation in terms of the crop condition is not favorable, then we'll not be able to pass on the cost to the farmer, and there would be very few quarters when such thing would have happened with Dhanuka. We are able to do lot of demand generation activity with the farmer. We do lot of branding and promotion activity with the farmer. We do lot of ground level education activity with the farmer. Whenever there is a price increase and we are able to pass it on to our customer, the brand-conscious farmer, the quality-conscious farmer goes for Dhanuka products.
Right, sir, really heartening to hear that. Sir, just one last clarification on the EBITDA margins. On Dahej, we had indicated that we'll have EBITDA margins in the range of 12%-15%. For FY 2022, the EBITDA margin guidance earlier indicated was 16%-17.5%. Is this right to take from the calculations perspective? Thank you.
Yeah, that's right.
Sure, sir. Thank you so much, and best of luck, sir.
Thank you.
Thank you. Our next question is from the line of Chintan Modi from Motilal Oswal .
Yeah, hi, sir. Thank you for the opportunity. Sir, just one question on the cash flow front. We saw a significant squeeze during the first six months. Could you explain? It seems more on the working capital side. If you could just explain what were the actual reasons for that, and do we expect some kind of reversal that's happening in the second half?
Yeah. You see, last year was an exceptional year. There was a significant improvement in the NWC. As a matter of fact, this year our NWC cycle has increased from 89 days to 104 days. That is a normal phenomenon, basically. That was a very different year last year. That is not there this year. I think that things are in control absolutely. There's no worry.
Okay. Basically, it is reversal of the last year's improvement.
Yeah.
Going forward, we should expect it to be more or less on the normalized trajectory.
Absolutely right.
Okay. Sir, with respect to this new patented product that we will be launching soon, just if you could explain some kind of, you know, what is the kind of market size one should expect and, how soon that we should be expecting in terms of revenue monetization and all that.
This is a herbicide, and this herbicide will find space in sugarcane, it will find space in tomato, and few other crops. We are expecting to introduce in FY 2024. I think so at this stage, this is what I'll be able to share with you. This is a Japanese offering coming from Nissan Chemical Corporation, and we are very upbeat and positive about this herbicide offering. Given the fact that MNREGA outlay of INR 73,000 crore has also been consumed and the ministry is asking for another outlay of INR 25,000 rupees, INR 25,000 crore, we are pretty sure that the labor availability is going to continuously nosedive and herbicide consumption in India would probably match global standards, due to labor shortage and high value crop.
We see really good opportunity for our offerings, as we launch it in FY 2024. Okay.
Okay. Sure, sir. Thanks a lot. This was very helpful.
Thank you. Our next question is from the line of Varshit Shah from Veto Capital. Please go ahead.
Sir, my question is actually answered in the previous question.
All right. Thank you. We have the next question from the line of Rohan Gupta from Edelweiss. It's a follow-up question. Please go ahead.
Thanks for the follow-up. Sir, definitely we had a very heavy base last year, and that's why our this year first half growth had been almost close to muted or even slightly lower than the last year. Rahulji, any sense on the industry growth this year in first half, if you can just give some sense?
Well, industry growth, some of the peers have already, you know, released numbers, so we can see where it is going. I think so far the industry is largely at par. Yet there could be a single-digit growth for sure as we end because the Rabi is really looking up.
Okay. First half, though you say had been almost flat, but in the second half, we may see growth because Rabi is looking better, right?
Rabi is really looking upbeat with good rainfall, good moisture, really up commodity prices. Almost all the state governments pushing for oilseeds and pulses. Rabi is really looking upbeat.
This, you are talking in terms of volume growth, because I'm sure that in second half we will see a lot of price-led growth to happen because prices already started going up in January. So, I see that at least 10%-15% probably price increase. Are you able to see or are you seeing in the across the product or it is lower than that?
One, I'm certainly talking about the volume growth for sure.
Yeah.
Price increase, whatever price increase is happening, we are passing on.
What is the price increase so far?
Price increase I'm expecting in Q3 maybe in the range of 7%-8% price overall. Not so much because there are many molecules on which there's no price increase. They are largely specific volumes. In terms of January, there is a significant increase in few volumes between 5% to 25% and 30%. Overall impact should be between 7%-8% price, not more. Rather it could be little less, 5, 6%. Why it is so? Now price increase impacting starting from November. October is hardly any price increase. In quarter three, increase might be between 5%-7% overall. Quarter three, sorry. Quarter three.
Right, sir. Sir, any sense, Dhanuka, do you have while talking to the supplier, the China situation, because definitely the Winter Olympics are going to happen in February. The situation may not get addressed immediately. Any sense you see that with the plant and the power crisis in China is getting over in near term or it is going to go up for a longer period?
Well, this crisis is a very, very defined date of thirty-first December to technically get over. On thirty-first of December, the current scorecard, so to say, is achieved or not achieved, and the new meter is started on first of January. Yet, the entire ecosystem will take its time to warm up and get activated. Probably another couple of months after the Chinese New Year of February, situation should be really easy and supply should become normal.
Okay. They have to achieve some certain numbers as well as the environmental are concerned. They have to achieve by thirty-first of December, right?
Yeah. Yeah. Yeah.
Oh, okay. Thanks, sir. Thank you very much, sir, for the follow-up opportunity.
Thank you. A reminder to our participants, if you wish to ask a question, please press star and one. Next question is a follow-up question from the line of Rohit Nagraj from Emkay Global. Please go ahead.
Yeah. Thanks for the opportunity. Sir, in terms of our segment-wise breakup, so the other segment, which is PGR and as well as biologicals, accounts for about 10-11%. Now we are setting up a new R&D facility as well. Any thoughts on, because the biologicals adoption has been increasing across the board? Maybe over a 3-5-year period, how much of our segment revenue will be contributed from biologicals? What are the new initiatives that we are taking on this front? Thank you.
Thanks for asking this wonderful question. Biologicals growth rate is certainly higher than the conventional agri-input growth rate. At the same time, I would like to remind the audience that in India less than 40% of the agriculture is treated or chemically protected. There is a huge scope for Dhanuka and agri-input industry to reach out to the farmers and protect the rest of the 60% unprotected agriculture. There's a huge scope for the conventional agriculture. Yet, there is a huge emerging opportunity for, especially for fruits and vegetables and especially for export-oriented crops for biologicals. At Dhanuka and at our R&D center, we are doing some really good experiments and trials of biological products. As and when we are ready with that, we'll come with it.
Our current offerings certainly include biological fertilizers, bio fertilizers, seaweed extract fertilizers, mycorrhizae, which is again, organic fertilizer and MYCORe, which we introduced very recently, is finding huge traction in general without DAP shortage. With DAP shortage, our team is absolutely gung-ho, is excited about MYCORe opportunity.
Right sir. That's interesting to know that there is a huge scope for this particular segment to proliferate further. One more question in terms of you said on the pricing front, the pricing decision is always compared by how the competition will take price increases. Normally, who do we look at in terms of competition, who bites the bullet first? Because everyone usually says that we look at the competition and then accordingly we will take the price hikes.
I would really like you to go and tell the competitors, "Dhanuka bites the bullet first.
That's interesting to know, sir. Okay. Thank you so much, sir, and best of luck.
Thank you.
Thank you. Our next question is from the line of Vivek Gandhi from the Dalal & Broacha. Please go ahead.
Sir, what would be our pyrethroid percentage to the total component? Is pyrethroid range unaffected due to China impact? Is it so?
Synthetic pyrethroid is one of the leading products of Indian agrochem production. India globally leads in synthetic pyrethroid production and exports. Synthetic pyrethroid is relatively unaffected when it comes to availability.
Availability of raw material
Prices going up, synthetic pyrethroid prices are also going up.
Okay. Sir, what would be our percentage of revenue from synthetic pyrethroids?
Well, I'll have to really dig this one out. We have not done that kind of evaluation because this includes you know, a host of about 9 or 10 offerings from our list. I'll have to really dig it out. Maybe next time or on a separate call, I can share that with you.
Okay. Sir, can you just give a broad, like, names of which pyrethroids do we engage into?
We do Cypermethrin and four versions of Cypermethrin. We do bifenthrin and two or three versions of bifenthrin. We do Lambda-cyhalothrin, and then some versions of Lambda-cyhalothrin. Yeah. We also deal into Fenvalerate. These are some of the synthetic pyrethroids we deal with.
Okay. Fair enough, sir. Thank you so much. Thank you so much.
Thank you. Our next question is from the line of Saurabh Kapadia from Amsec. Please go ahead.
Thank you for the opportunity. Sir, what has been the volume and the value performance for this quarter?
Volume, value. For Q2, you see that there is a decline of around 3% in the volume. There was a 2% gap between value and volume in Q2.
Okay. Just I was looking over last 2-3 years, the share of fungicide has now increased, at least, in the first half. Is there any, you know, molecule doing well or is the bucket of molecule or specific crops where we have seen a good growth in the fungicide portfolio?
Right. We have been able to really strengthen our fungicide portfolio very aggressively. Some wonderful 9(3) introductions we did in last few years. We introduced Conika from Hokko Chemical, Japan. We introduced Godiwa Super and Spectrum. We introduced Kirari from Nissan Chemical Industries and Nissodium from Nippon Soda. Kirari and Nissodium are very special fungicides finding space in grapes. Grapes, as you know, is one of the large horticulture crops and export-oriented crops from India. Kirari and Nissodium also find space in tomato and other horticulture crops, which are again, relatively high-value crops. We were looking at this opportunity in the Indian market, especially in horticulture segment. Farmer is aggressively moving towards high value-added crop. Farmer is aggressively leaving some of the cereals behind and moving towards fruits and vegetables.
We've been able to bolster our portfolio in specialty fungicides, and that's why that growth you can see.
Okay. Last, on the new product, you mentioned about one product in Q4 and couple of products in next year. Again, in which category, in which crop that would be there?
This year we introduced one herbicide in the onion segment. The brand name is Onekil, which we introduced again from Nissan Chemical, Japan. Tornado is another herbicide we have introduced this year, which finds a space in soybean and groundnut. This product is also offered from Nissan Chemical Industries, Japan. Next year, we are going to introduce towards the end of this year itself, Q4, introducing Cornex, which is a maize herbicide, again from Nissan. Then there will be other offerings for the next year, which will be sugarcane, paddy and horticulture segments. We are going to introduce new products next year.
Are these all independent products exclusive to Dhanuka or there is more for two or three companies will be marketing?
Onekil is Dhanuka's 9(3) registration. Dhanuka introduced this product. Cornex is also Dhanuka's 9(3) registration from Nissan. Next year what we are going to introduce, our insecticide, the brand name is Decide and Zanet, which is another fungicide. They are also exclusive products for Dhanuka, and they will be our 9(3) offerings.
Okay. Thank you for your response and all the best for the business.
Thank you so much.
Thank you. Our next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead.
Yeah. Thank you. Sir, this MYCORe product which you have mentioned, is this now for the current year, given the kind of situation we are in and the kind of demand you have just explained, can this be a part of our top 10 products this year?
Yes, it can be. Why not? Yeah, top 10 products it can be. It has a huge phenomenal demand. You know, two reasons. One is of course the shortage of DAP. Another is as you are looking at, you know, the Prime Minister talking in many speeches about the soil health getting deteriorated. MYCORe, which is a microbe-based plant nutrient. It really recharges the soil wonderfully. Almost a barren land can be reactivated by use of MYCORe, and it's very powerful for oil seed and pulses growing.
Okay. Sir, in terms of supply chain of this product, is there a constraint in terms of how much you can produce, or there is no constraint as such?
As such, no constraint. MYCORe production is not a big constraint. Its formulation is only a constraint. Although it's an imported product, but technically producing it is not a big deal.
Okay. Understood, sir. Thank you.
Thanks.
Thank you. Any participants who wish to ask a question at this time, they may please press star and one.
Sorry, we missed what you said. Could you come again?
sir, just giving a reminder. Any participants who would like to ask a question at this time, they may please press star and one. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to the management for the closing comments. Thank you, and over to you, sir.
Good evening, friends. As you know, the September month has seen very heavy rainfall. I think it has beaten the records of number of years and because of which there is moisture in the soil and the reservoirs are full of water. The farmers are sure that they will get the water for irrigation for rabi crop. Rabi crop is expected to be very good, which is basically seen from the performance of September and October month. July and August were very bad. We were not basically hopeful that we will be able to land up near about same turnover. September has given the relief, and October is also showing very positive response by the market.
We hope that this trend should continue in the rabi season, and we do hope that the rain will remain very good, and we will be definitely able to deliver much better results in the third quarter. Once we have the call for third quarter, you will see that the results for third quarter are much better. We hope that God should remain favorable for the farming community so that they could reap a bumper harvest and their income increases. Let us hope for the best. Thank you very much.
Thank you very much. Ladies and gentlemen, on behalf of Antique Stock Broking, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.