Ladies and gentlemen, good day and welcome to Dhanuka Agritech Limited for Q1 FY 2026 post-results call hosted by Antique Stock Broking. I now hand the conference over to Mr. Manish Mahawar from Antique Stock Broking. Thank you, and over to you, sir.
Thanks, Sujata. Good afternoon, everyone. I am pleased to host today's earnings call of Dhanuka Agritech. We have leadership team represented by Mr. M.K. Dhanuka, Chairman, Mr. Rahul Dhanuka, our Managing Director, Mr. Harsh Dhanuka, Executive Director, and Mr. V.K. Bansal, CFO on the call. Without any delay, I would like to invite Mr. M.K. Dhanuka to start with opening comments, post which we will open the floor for Q&A. Thank you. Over to you, Dhanuka Ji.
Thank you, Manish Ji. Good afternoon, ladies and gentlemen. I am M.K. Dhanuka, Chairman of Dhanuka Agritech Limited, and I welcome you all to the Q4 FY 2025, 2026 earning conference call. I have with me Mr. Rahul Dhanuka, Managing Director, Mr. Harsh Dhanuka, Executive Director, and Mr. V.K. Bansal, CFO of the company. As you are aware, Dhanuka Agritech is among India's leading agrochemical companies with a long-standing commitment towards advancing Indian agriculture through technology-led crop solutions. Over the years, we have built a strong pan-India franchise with deep farmer engagement, a differentiated product portfolio, and a robust distribution network. Today, we reach more than 10 million farmers across India through approximately 6,000 distributors and over 80,000 retailers. Supported by our four manufacturing facilities and 41 warehouses, we continue to strengthen our ability to deliver products efficiently across key agriculture markets.
A key differentiator for Dhanuka has been our consistent focus on introducing innovative and globally relevant chemistries in the Indian market. Our partnership with 10 leading multinational agrochemical innovators from Japan, Europe, and the United States continue to provide us access to advanced technologies and differentiated solutions for Indian farmers. Our two R&D centers, supported by NABL-accredited laboratories and a strong regulatory and product development team, remain focused on product registration, formulation development, and strengthening our future growth pipeline. The broader operating environment during the quarter remained challenging for the agrochemical industry. The sector continued to witness pressure from erratic weather patterns, uneven crop economics, weak channel liquidity in certain regions, and continued global volatility in commodity and supply chain dynamics, which became prominent in March due to the war in Gulf region. Climate variability is increasingly becoming a structural factor for Indian agriculture.
Unseasonal rainfall, temperature fluctuations, and shifting monsoon patterns continue to impact sowing behavior, crop protection demand, and overall farmer sentiment. In addition, geopolitical tensions, trade disruption, and supply chain uncertainties across global markets have kept input planning and logistics management dynamic during the quarter. Q4 is seasonally a relatively softer quarter for the agrochemical industry, and this year the rabi season was further impacted by unfavorable climatic conditions in certain key regions. While near-term demand visibility remains linked to monsoon progression and reservoir conditions, we continue to remain constructive on the medium-to-long term structural growth opportunity for Indian agriculture and crop protection. Against this backdrop, I am pleased to share that Dhanuka delivered a resilient operational and financial performance during the quarter.
Revenue from operations for Q4 FY 2025, 2026 stood at INR 483.34 crores as compared to INR 442.02 crores in Q4 of FY 2024, 2025, registering a growth of approximately 9%. EBITDA for the quarter stood at INR 124.89 crores as against INR 109.75 crores in the corresponding quarter of the previous year. Profit after tax stood at INR 97.77 crores compared to INR 75.50 crores in Q4 of FY 2024/2025, reflecting healthy profitability improvements supported by product mix, operational efficiencies, and disciplined cost management. Our balance sheet and cash generation continue to remain strong, providing us the flexibility to invest for future growth while maintaining a shareholder-friendly capital allocation approach.
The zone-wise contribution to turnover for Q4 of FY 2025/2026 was North contributed 32%, East contributed 12%, West contributed 23%, and South contributed 33%. Product category-wise, insecticides contributed 41%, fungicides contributed 14%, herbicides contributed 31%, and others contributed 14%. The board of directors has recommended a dividend of 100%, that is INR 2 per equity share, face value of INR 2 each. The proposed dividend will absorb approximately INR 9.02 crore and is subject to shareholders' approval at the 41st annual general meeting scheduled on 3rd August 2026. Further, the board has also approved a proposal for buyback of up to 5 lakh equity shares for an aggregate amount not exceeding INR 70 crore at a maximum buyback price of INR 1,400 per equity share.
This decision reflects the board's confidence in the long-term fundamentals, cash flow strength, and future growth prospects of the company, while also reaffirming our commitment toward enhancing shareholder value. I'm also pleased to inform you that the board has approved the introduction of an employee stock option plan or ESOP scheme. We believe this initiative will further strengthen entrepreneurial mindset across the organization, enhance long-term alignment, and support our next phase of growth and leadership development. As we enter the next phase of our journey, the company remains focused on strengthening its product portfolio, expanding farmer reach, driving operational excellence, and building future-ready capabilities across manufacturing, R&D, and market development. At Dhanuka, we continue to believe that sustainable business growth must go hand in hand with farmer prosperity and national food security.
Our continued engagement with agriculture universities, Krishi Vigyan Kendra, and other scientific institutions remain an important part of our farmer education and technology dissemination efforts. With the ongoing management transition, we are also building the foundation for the company's next era of growth, combining the strength of Dhanuka's legacy with a sharper focus on innovation, agility, and long-term value creation. Thank you very much for your kind attention. We would like to open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rushabh Shah from BugleRock PMS. Please go ahead.
Hi, sir. Am I audible?
Yes.
Sir, my question is about two products which we acquired by Bayer. Have we launched any new products within those products and also added any new customers? One of the challenges we were facing with this new business model was registration in different companies. How these things have evolved for us in the years timeframe?
Right, sir. Thank you for this question. The two products that we acquired, Triadimenol and Iprovalicarb from Bayer. In most of the markets, for the last financial year, Bayer continued to do the commercialization. In current year also, in some countries, they have agreed to continue the commercialization. We have appointed customers in about 5 countries till now, and we are in advanced discussions with the customers in another 10 countries. As distributors start getting on board, the revenues will start building up from them. Till that time, Bayer is doing the commercialization in most of the countries. Regarding any new products, currently we have not introduced any new products from the portfolio.
Only for India market, we had shared last year itself that we introduced Melody Duo in Q2 itself, and that product is now part of our product portfolio for India business.
Okay. These challenges which you're facing with this new business model, the registrations.
Yeah. Registration is not the bigger issue because the major concern is around appointing the distributors and managing the supply chain. With the support of Bayer, we are resolving most of the issues on how the supply chain will be handled in the coming times.
Okay.
We have already initiated the formulation of both the Melody variants in India. Triadimenol formulation will also be shifting to India in current financial year itself. The Iprovalicarb technical, by end of this financial year, we'll be starting that production.
Okay. My next question was like in the last five years, we have been trying to do two things. One is backward integration and two is acquisition of products which come Bayer basically for export purposes, which we were doing only in formulations before. Both these are new things for us, exports and B2B business and manufacturing. My question is what kind of challenges in particular to this new business have we faced in this the last five years?
Yeah. This is absolutely a wonderful point that we are expanding to international markets, and we have also explored inorganic growth by these two brand additions, as well as we are doing backward integration on both these products. First, let me talk about the opportunity. The opportunity here is leveraging our Dahej chemical plant for manufacturing this in India, and also leveraging our formulation capacities, and formulating these two products in India, thereby encashing on the arbitrage of the costs these products had when they were coming from European or other markets, and upgrading, enhancing the capacity utilization at Dahej. While you are already aware of the headwinds chemical business has overall faced, in last couple of years, many international players have faced these headwinds, so has Dhanuka as the newcomer in this domain.
Finding the right distribution channel and appointing distributors in different countries has been a challenge. Getting regulatory approvals has been another challenge. Getting our foot into the door in terms of these markets as very new opportunities for us has also been a challenge. We are pretty excited as we deal with these challenges and work on the opportunity this new domain has opened for us.
Okay. Okay. Thank you. Sir, my last question is in.
Sorry to interrupt, Mr. Shah. We will request you to please rejoin the queue. We have other participants waiting for their turn. Thank you. The next question is from the line of Siddharth from SiMPL. Please go ahead.
Yeah. Hi. Thanks for the opportunity. Just couple of questions. First is on the Q4 result. You know, if I look at the sales, was there any element of pre-placement into the market? Any color in terms of volume, value mix you can give for Q4 and FY 2026. A related question is, see, if you look at our gross margin, despite the environment, we have seen a significant expansion, and it's also a quarter where the OpEx costs have seen a drop. If I look at EBITDA margin, it's been the highest ever we have ever seen in, you know, in our life. Just trying to understand what is the drivers of this because even the new product, contribution has dropped.
If you look at segment-wise, herbicides and fungicides not seeing that kind of growth, you know. Any color you can give on this. That's the first question.
You see, you ask three, four question in one question. You see, one, with regard to the EBITDA highest margin, this is largely because of the GST refund. You see, in Udhampur unit, the GST refund year was last year, March 26 only. You see, the refund has increased significantly in the Q4 of this financial year because of which the EBITDA is highest in this quarter. In terms of the placement is similar to the previous year, not very significant as is normal placement which is happening every year. What was your third question?
Just on the GST refund, what is the quantum?
Quantum in terms of placement?
No, no, GST refund amount.
GST refund amount, you see, in the whole year basis it was INR 29 crore and the significant portion in the quarter 4. As against the last year, it was very low because of some provisioning.
Okay. Can you give the Dahej sales and EBITDA? Similarly, how much Bayer revenues contribution?
Dahej sales on yearly basis, it was actually INR 50 crore as against INR 41 crore the previous year. In terms of the Q4, it was INR 8 crore versus INR 15 crore. In terms of the value volume, it was almost flat. The volume growth and value growth was almost same in Q4.
No, I meant Dahej EBITDA, you know, was it breakeven?
Dahej EBITDA loss as against last year INR 14 crore, this year was INR 13 crore loss on a whole year basis in Dahej.
Okay, fine. Just two questions, sir. one is, you know, on the guidance which you've given for 2027. You see, this year we would see a consolidation of Bayer's product revenue as well in our numbers. Last year in 2026, we had an impact of ban of, you know, sale of biologicals for few quarters. You know, if you add these two itself, you know, we would easily maybe very comfortably achieve our guidance of low double digits. That gives an impression that the base business may not grow or in fact, may probably degrow. I'm just trying to understand, you know, why or what is driving I mean, if you can just give some color on your guidance, you know, how you're going about that.
You see, there was no contribution of the GST refund. There would be little hit on account of the net economic benefit. The around INR 40 crore impact would be on account of these two heads. That will be compensated by the, see, the introduction of the bio-stimulant again. In terms of the Bayer, the entire sale will not come in this financial year. Only a portion of that sale will come in this financial year. Probably we'll get the full sale from the next financial year, not this year.
For 2026, how much Bayer sales has been recorded, and for 2027, how much you're expecting?
You see, there was a loss of around INR 50 crore plus in the year 2025, 2026 on account of the bio-stimulant ban. We are hopeful we'll compensate the entire thing in the year 2025.
No, I'm talking about Bayer products. How much was recognized in 2026 and how much you expect in 2027?
26 we recognized on the In-India sales Melody, right? It would be something is around INR 27 crore. In the year 2026-2027 is almost double of that.
INR 200. INR 200.
Total have to India.
2027, 2028 will be 200.
26, 27.
26 will be 35.
INR 35. INR 35 plus around INR 60 crore this year.
Okay. Can I just squeeze in one more question? It's on the ESOP. You know, just a suggestion. You know, I think when this is the first time we have rolled out this policy and, you know, it's quite a good initiative. Instead of new issuance, you know, new share issuance, a suggestion would be if we could consider buying shares from the market and, you know, meeting the ESOP obligations. I think it's also reflective of, you know, the valuation the company is currently trading at. That is one suggestion. And second is on the buyback. You know, if you can give some rationale behind the buyback price, you know. I think the last time it was around INR 2,000 per share.
Just wanna understand your thought process on, you know, why this time we arrived at INR 1,400 per share buyback price.
Actually, the buyback price is around 25% higher in comparison to the market prices. The last year when we did the buyback at INR 2,000, at that time the market prices were around INR 1,700. We did the buyback at INR 2,000. This year the market prices was INR 1,100 approximately when we decided to buyback at INR 1,400. INR 300 benefit, we basically around 25% higher in comparison to the market prices. We are giving the advantage to the shareholders.
Thank you. The next question is from the line of Rohit Nagraj from 360 ONE Capital. Please go ahead.
Thanks for the first question in terms of the availability of material from outside, have we faced any challenges? NHS Q4 has been good, but during the last 1.5 months, in terms of the technical availability from outside, are we facing any challenges? If not, are we more or less protected at least for the kharif season? Thank you.
Right. Availability of material from outside is not a challenge at all. Most of our imports come from the East, either Japan or China. There has been no concern around the availability. Post-war, in March and April, there was definitely price increases which were more of speculative. In last 15 days or so, the price increase has stabilized and in two products maybe slightly reduced also. Overall the prices have increased over last 45-60 days.
Sure. If you can provide us what is the increase in input prices as a basket and how much of that has been, you know, translated into the price increase. Thank you.
You see, as a basket, one is in case of imported material and because of the depreciated rupee, the impact is around 5-6% in terms of imported material. In terms of the indigenously in few generic, the increase is very steep, maybe 25%, 30%, 15%. On a basket level it would be ranging around 3-5%.
Sure. overall, in terms of raw material, inflation, we are seeing close to about maybe 5-7%.
Yeah.
The similar kind of increase will be passed on, in terms of the product prices. Is that the right assumption?
You see, passing on to the customer, it depends. I mean, currently we are finding it difficult, but yes, over a period of time we pass on by the end, by the beginning of quarter 2. Some part is already passed on and it will not be passed on immediately. It will take little time.
Sure. Sure. Just one question in terms of number. What was the Bayer royalty payment during Q4 and for full year FY 2026?
Full year it was around INR 32 crore and in Q4 is around INR 10 crore.
Sure. That's it from my side. Thanks and all the best, sir.
Thank you. The next question is from the line of Prashant Biyani from Elara Capital. Please go ahead.
Thank you for the opportunity. Mr. Guha, how much has been the price increase in Q1? Consequently, how much would be the remaining price increase that we may have to take from Q2?
You see-
Poten-
Q1, overall price increase may be in the range of around 2%.
Which means we have to take a higher price hike in Q2, maybe around 5%-6%.
Around 3%-4%. Yeah, that's right.
Okay. Rahulji, how has been the demand trend for kharif as of now? Any early indication of herbicide consumption, if it has started in any part of India?
Any indication of what consumption?
Herbicide.
Herbicide consumption has not really started much, yet sugarcane was an important crop for this quarter when the herbicide consumption has started in especially in North India and has been good. As of now it was a mixed approach in April and so far in May, and it has not been easy to filter how much of the market pull is because of the price sensitivity versus how much of the market pull is because of actual demand. Yet I would say there is a certain market pull in anticipation of price increase as well as some actual demand. So far there is growth over last year and things seem to be on track for Q1.
At the end consumer level.
I think so there is some noise. I could not catch your question. Could you repeat that?
Sir, I'm saying the demand pull is from the channel itself or is it at the end consumer level also?
That's what we are not able to filter immediately because some of the products which get consumed in this window, they are moving, but they are moving at a higher speed than normal. It is difficult to filter whether the demand is exactly at the consumer level or is it only the channel pull.
Right.
Maybe both are there, but difficult to filter.
Sure. On Bayer's molecule that we have bought, I think the initial plan was to manufacture only one molecule in India because for the other molecule, I think further value addition by shifting manufacturing here was not looking possible. Why would there be change of plans to manufacture both molecules now on?
We will be manufacturing the active ingredient of only one molecule. The other products active ingredient we will be procuring from outside. The formulation we will be shifting for both the products to India because that is providing us supply chain efficiencies and reduced costs.
Okay. Just lastly, for the international business, registration is fine, but at the distributor level, what kind of challenges we are facing?
I'm sorry to interrupt, Mr. Biyani, but there is a lot of disturbance from your background.
Right. I was saying, if this is clearer, I was saying, what kind of challenges are we seeing at the distributor level while trying to expand in overseas markets?
Okay. At distributor level, the challenges are around delivering the volume and the price matrix which we want the distributors to achieve. Either they are not able to commit the volumes for that market or not able to maintain the price values, price levels which are currently prevailing in these markets. They are looking for selling the products at lower prices, which is not workable.
Thank you. The next question is from the line of Riju Dalui from Antique Stock Broking. Please go ahead.
Hi, sir. Congrats for the great set of numbers. Few questions regarding the Q4. You have said that GST refund for this full year was INR 29 crores. Specific to 4 Q, how much that would be?
In Q4 it was INR 14.5 crore.
Understood. Sir, in terms of biostimulant portfolio and biologicals both, how much was the total revenue contribution for FY 2025 and 2026?
2025-2026 is around.
Seventy.
INR 70 crores. INR 70 crore.
INR 70 crore for INR 26?
Yeah.
The prior year, that is for FY 2025?
INR 25, it was around INR 100, INR 110 crore type.
Understood. Sir, I think the product registrations for biostimulant has been started since last year November. How many products we have already registered and how much, how is the growth expectations for this portfolio in FY 2027?
I didn't get the question.
Four.
Okay.
You see, we launched one molecule in this category in 2025, 2026, and three will launch in the month of June.
Okay. How much growth you're expecting? If you look at the base year, that is INR 110 crore kind of a revenue. If we take that as a base year, because last year we had some rotary issues. This year, how much you are expecting in terms of revenue for these categories?
We are expecting a revenue of more than INR 130 crore.
Understood. In terms of, sir, like, in 4 Q we have registered roughly around 9% kind of a total top-line growth. If you could break it down by volume and by the prices, that will be helpful.
In Q4 ?
Yeah, in Q4 .
In Q4, value or volume is almost similar. Same.
Okay, almost similar. For the full year?
Full year is also almost same.
Okay. Okay, understood. In terms of Dahej revenue expectations, last quarter we had guided roughly around INR 60 crore kind of a revenue target for FY 2026. We have achieved roughly around INR 50 crore kind of a revenue for the full year. How much we are targeting this year in terms of like what was our guidance was roughly around INR 100 crore kind of a revenue target for FY 2027? That is intact or are you going to change that in terms of looking at the current prices of the technical products and all? How is your view for the Dahej?
Yes. For Dahej, last year we forecasted INR 65 crore for FY 2026, and we were able to deliver only INR 50 crores against that. This year we are forecasting a revenue of INR 75 crores, lower than our earlier estimate of INR 100 crores. Looking at the current scenarios, we have downgraded that forecast.
Sir, prices already have seen some improvement and looking at the two products like the another product that we have already launched in last quarter. In any specific scenario, why we are expecting lower revenue this year?
Lower from our original forecast, but from previous financial year against INR 50 crores, we are expecting INR 75 crores. It is 50% higher. We added one product in Q2 last year, so we will get full year of that product. For bifenthrin, domestic sales are robust. We got our first international registration at the end of last financial year and for one of the markets internationally, and the sales have started over there. Volumes from that market are not expected to be very high. In the larger markets, the registration is taking time for the Dahej products.
Understood. Sir, one last bookkeeping question in terms of Bayer AG product that we have bought. You have shared the number of roughly around 50%-60% of our revenue for 2027. That is for the India revenue that you are expecting, or it is India plus few geographies, or you are expecting the product registration to be transferred to your name?
No, this is the revenue for the rest of the world as well. India plus rest of the world.
Okay. Okay, okay, okay. That means the royalty income we'll get for this year as well, right? For FY 2027 as well, right?
Yeah. Royalty income would be there this year, but maybe it'll lower than the 2025, 2026.
Correct. Correct.
Sorry to interrupt . May I request Mr. Riju to please rejoin the queue, sir. Thank you. The next question is from the line of Dhruv Saraf from Bowhead Investment. Please go ahead.
Hello, good afternoon, team. Just wanted to understand, you know, how are the early trends in terms of acreage for kharif planning out? We've seen good price rise in cotton and soybean. Do you expect both of these crops to, which are very important crops for you, to gain ground over maize this year?
Cotton will certainly be gaining ground this year. That is there. Soybean will compete with maize, cotton and few other summer pulses for its acreage. We're not very sure of the soybean acreages, but we are very sure that pulses and oilseed acreages will increase. Cotton will increase, pulses will increase, other oilseeds will also increase, but soybean, particularly within the oilseeds, will compete with cotton, maize, and other pulses.
Understood. Sir, can you specifically, like, comment on maize. Because maize is also coming from a very high base of last year. Do you see, like, a drastic fall in maize and hence, you know, soybean could ultimately benefit? Could it be, like, flattish compared to last year?
Between soybean and maize is a relatively more drought-tolerant crop. Less water gives comfort to maize vis-à-vis gives comfort to soybean. That is the one part of the balance. The other part of the balance is how much stress continues on bioethanol. One of the major outcome from high maize is bioethanol. Between these two things, you know, maize will have to find a sweet spot. I don't see acreages increasing over last year, but a significant reduction also may not happen.
Understood, sir. Understood. Why I asked you this is because if I look at soybean prices specifically, they're up, like, 50%-60%. You know, like 65-70 a kg versus 40 a kg last year. That's where I came from. You know, given the low base of soybean, could it even be positive for us as a company?
Yes. We have a very strong portfolio of soybean herbicides, soybean insecticides, and some plant growth regulators. Increase in soybean acreages could be helpful.
Sure. Sure. That helps. Thank you so much, sir.
Thank you. The next question is from the line of Ketan Chawla from Affirma Capital. Please go ahead.
Hi, good afternoon. I had couple of questions. First is pertaining to the guidance that you've given in low double digits for FY 2027. If we were to break this up in terms of price growth and volume growth, if you could provide some color around that, please.
You see, we are in terms of the volume or value growth, there could be a difference by the year-end, maybe around 2% type.
You're saying volume growth will be 2% more than the price growth?
No, no. Price growth will be more than the volume growth.
Okay. How does this obviously FY 2026 was a flat year, but if you look at history, how does this compare to, let's say, FY 2025?
25, I think the price was negative volume was more, price was negative. Yes.
Understood. My second question is regarding the EBITDA margin, decline of 100 basis points that you've, factored in. What is the underlying assumption or the drivers for this?
You see, decline in EBITDA margin is only because of the decline in the gross margin. Absolutely. That is only because of the GST refund and some, decline in the net economic benefit.
And the-
Yeah
the current environment where, you know, raw material prices are increasing, freight is increasing, packaging materials, you see the entire gamut of input costs increasing, you don't expect that to impact your margins this year?
You see, in the full year basis, I am of the opinion that should not impact. Yes, on quarter 1 or quarter 2, there would be little impact. On full year basis, we are of the very strong opinion that we will be able to pass on the increase to the customer. At the same time, when the price increasing, we have certain advantage of the carryover inventory, so that will compensate that loss in case we are little, you see, little delay in the passing over the increased cost. That will be compensated on the inventory lying with us.
Understood. If this current crisis prolongs, obviously kharif season would be protected to a certain extent, as you said, because of inventory lying in free placement, et cetera. What impact do you see on the rabi season?
You see, it is difficult to predict. If the price continues increasing, this is at that point of time, it is difficult to estimate that.
Got it. Last thing is, you know, you mentioned in your presentation 9(3) products as being margin accretive and being a growth driver. Just want to understand what portion of our revenue currently comes from 9(3) products.
Around 26%.
We are looking to ramp this up to what levels? Any guidance there?
in the range of 25%-26%.
Okay. We're on a growing base, you're saying that we'll continue to maintain this at 25%-26%.
Yeah. Yeah, absolutely.
Yeah. How significant is-
Sorry to interrupt, Mr. Chawla. May we request you to please rejoin the queue, sir.
Sure, sure.
Thank you. The next question is from the line of Rushabh Shah from BugleRock PMS. Please go ahead.
Hi. Thank you for the opportunity. For the tie-up with Spanish company for biological products, how has that performed for us? How big is this market in India? Also who are the others present in this particular market?
Biological market can be divided into two parts: biological crop nutrition, which includes seaweed extracts as well as other products covered under biostimulants and then the biological control market, which is biopesticides, which includes neem and other products. This market is estimated to be about INR 4,000-5,000 crore. Due to biostimulant regulations introduced last year, this market dropped down significantly and is gradually catching up in terms of the seaweed extract and bio-nutrition biostimulants coming on track. At Dhanuka, we introduced in this category mycorrhiza in the brand name MYCORe Super, and MYCORe Super as a product has done really well. In a drought situation, El Niño situation like this year, MYCORe Super is expected to do much better than the past years. Further, we are going to launch our biostimulants this year, and we introduced Werdor last year.
These are some of the products that we are positioning in this segment. The alliance that we were trying with the Spanish company, we called it off. We signed an MOU with them, but subsequently we called it off, and I think so by now that Spanish company has probably changed hands as well. We had some red flags in the MOU, and we didn't want to pursue it.
Okay. In one of the calls, you have said that at Dhanuka you manage your inventory and receivables differently as compared to what is happening in the industry. Could you please elaborate more on this in detail? Like, how are you managing in the better way than the industry?
This is almost like asking me for my trade secret. I would only say that most of the years and most of the quarters you would see inventory situation only improving. We plan our production not on the economies of scale when it comes to brand sales and formulation. We don't plan our production on economies of scale. We plan our production in small batches. We don't plan logistics again on truckloads and economies of scale. We plan logistics in small batches so that we can service the changing demand of the market very fast, and we can react to it suitably because, you know, the market changes dramatically based upon how it has rained over the last three days.
In terms of receivables also, you would notice that this year we have reduced our receivables by about 4% as compared to last year on 31st of March. We continue to do that, and we strive to do better. Sometimes we are not. For example, after West Asia crisis in March, we decided to do some strategic buying, thereby our inventory has gone up in short term. As well as last year, because various VDI sides did not move as well as we wanted to, so that also got added to our inventory. This 31st March inventory you would see is significantly higher to last year.
Thank you. The next question is from the line of Rohit Nagraj from 360 ONE Capital. Please go ahead.
Yeah. Thanks for the follow-up. First question is in terms of the channel inventory. Given that in rabi the pest infestation was low, what is our sense in terms of the channel inventory currently? Thank you.
Come again. What did you say about rabi?
Rabi, the pest infestation was relatively lower, probably some inventory of insecticides would be there in the channel. What is our sense, whether the channel has, you know, higher inventories and that will cause some concern in terms of later half of, you know, Kharif season?
In my experience, rabi consumption was better than kharif. We had better movement of insecticides as well as fungicides in rabi, including south and late chili and subsequently in vegetables also. The movement was adequate on ground in the Q4 in terms of consumption also. I don't expect a lot of that inventory lying out there in the market.
Got that. Second, in terms of the GST refund, is it a part of the revenue recognized during this quarter?
Yes.
Okay. Fair enough. Thank you so much, and all the best.
Thank you. The next question is from the line of Viraj from SiMPL. Please go ahead.
I just had a question on the margin front. You indicated that we did some smart sourcing when the war broke out, and there's also an element of low-cost inventory, be the herbicides or, you know. In that sense, you know, going into 2027, you know, you have some advantage on the cost front vis-a-vis the industry. Still you're expecting 100 basis points kind of, you know, moderation and there's also element of high margin product, you know, loss, sales loss we had from biostimulant. Considering all that, which element are you seeing actual as a focus getting a higher volume growth?
You see, in terms of the 100 basis decline in the margin is basically on account of, I have already clarified, on account of the loss of refund of GST, which will not be available in this year, and some impact on the reduction in the net economic benefit. We are saying in net-net, we will be able to maintain the 2025-2026 gross margins. We will get the advantage, of course, in the some inventory, at the same time, we'll lose some margin on account of the high-cost inventory when the cost component will pass in the phase manner, not immediately. In net-net, we are very hopeful or of the opinion we will be able to maintain the gross margin. I am not expecting any expansion in the gross margin in the current financial year.
Got it. That's all, sir. Thank you, and good luck.
Thank you. The next question is from the line of Archit Joshi from Nuvama. Please go ahead.
Hi, sir. Thanks for the opportunity. Just one question. We have been hearing from quite a few corporates that there's been a labor shortage. Is that also prevailing at the farm level? Because I remember that whenever there's a labor shortage, consumption of herbicides typically gets better. Do we see that scenario prevailing even now?
Labor shortage is kind of a perpetual thing now because of various, you know, CapEx initiatives by the government and by the private sector also. That labor shortage has become now a continuum and is progressively expanding to relatively more labor-intensive geographies. For example, Eastern U.P., Bihar, Jharkhand, Chhattisgarh. These places which were actually labor availability was much easier, has also seen labor challenges. Hopefully, we will see labor shortage now emerging in growth-oriented West Bengal also. This is going to continue.
Sir, do you have any expectations on the herbicide consumption going into the peak season right now? Should that have any rub-off effect in your opinion?
The rainfall forecast for the month of June is pretty good. Oilseed, pulses, acreages are expected to be pretty high. With that and our strong and robust weedicide portfolio, we are pretty hopeful that Q1, especially the month of June, is going to be really exciting.
Right, sir. Great. Thanks and all the best. Congrats on a good set of numbers.
Thank you.
Thank you. The next question is from the line of Abhigyan Srivastav from Marcellus Investment Managers. Please go ahead.
Hi, sir. Am I audible?
Yes, sir.
Sir, your other expenses have gone down by 26% YOY and approximately 49% YOY for Q4. Could you help us understand why this happened?
Yeah. In Q4, there is a significant decline in the other expenses, and on yearly basis, this margin of only 3% is mainly because of the Q4. After, you see, in, after the Q2 result, we released a basically message to our all assurees to maintain the expenses in the end of November. Everybody has, you see, managed the expenses very nicely in Q4. One major reduction on account of we get the seed field promotion support from our principals. That has increased significantly. Our Dhanuka Doctor expenses, there is a significant improvement in this year because of which this improvement is appearing in the Q4.
Got it. Sir, also on other income, we see a 20% increase. Any particular reason why the increase has come about?
Other income mein basically last year there was a provision in one investment which was made in the drone company. Because of this that, you see our last year income in the 2024, 2025 is lower. Otherwise, it is absolutely similar to 2024, 2025 in the year 2025, 2026. This year there was no provisioning. Rather the, we have made one investment in KisanK onnect. There is an appreciation of around INR 3 crore in the valuation. Because of which the appreciation has happened. Increase has happened in the other income.
Got it. Thank you, sir. This is all from my side.
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments.
Thank you. Once again, I would like to thank all our investors, analysts, business partners, and stakeholders for their continued trust and confidence in Dhanuka Agritech Limited. We remain committed to building a resilient, innovation-driven, and farmer-focused organization that creates sustainable long-term value for all stakeholders. [Foreign language] Thank you and goodbye until next time.
Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.