Shares of Dhanuka Agritech Ltd. saw an uptick in Thursday's trading, following the announcement of its strong fourth-quarter financial results for FY26, coupled with a significant share buyback program and a dividend recommendation.
Strong Q4 Performance Amidst Sector Challenges
The agrochemical major demonstrated a robust performance in Q4 FY26, with its EBITDA rising 14% year-over-year to Rs 125 crore. This growth was attributed to operating leverage and controlled costs, leading to a margin expansion to 25.8%. Profit After Tax (PAT) also saw a substantial increase of 29.5% year-over-year, reaching Rs 98 crore, bolstered by improved profitability, reduced finance costs, and higher other income.
The company's strong showing comes despite a challenging environment within the broader agrochemical sector, driven by healthy traction in speciality formulations and insecticides. Dhanuka Agritech recognized approximately Rs 27 crore from Indian sales of these products in FY26, with projections for a steep jump to roughly Rs 200 crore in FY27.
Buyback, Dividend, and Global Expansion Plans
Alongside its financial disclosures, Dhanuka Agritech's board greenlit a proposal to buy back up to 500,000 fully paid-up equity shares at Rs 1,400 per share. This aggregates to a total offer size of Rs 70 crore, representing 1.11% of the company's total paid-up equity capital. The brokerage firm noted that this buyback signals confidence in the company's balance sheet strength, cash generation capabilities, and long-term business outlook.
Shareholders are also set to receive a recommended final dividend of 100%, which translates to Rs 2 per equity share for the financial year 2025-26.
To further scale its overseas business, the board approved plans to establish wholly-owned subsidiaries or acquire shares in entities located in Brazil and another European country. The initial investment limit for each new entity is capped at Rs 1 crore.
Brokerage Raises Target Price, Hints at Significant Upside
Domestic brokerage firm Axis Direct has maintained its 'Buy' rating on Dhanuka Agritech stock. Following the positive results and strategic announcements, Axis Direct upgraded its target price to Rs 1,650 per share, an increase from its previous target of Rs 1,600. This new target hints at a potential upside of over 37% from current levels, reflecting the firm's bullish view on the agrochemical company's prospects.