Onlin^e

Date: July 27, 2020

Listing Departmen^t National Stock Ex^change ^of India Limited Ex^change Pl^aza, Plot No. C/1, G. Block, Bandra- Ku^rla Compl^ex, Bandra East, Mu^mbai-400 051

The Department of Corporate S^ervices-Listing The Bomb^ay Stock Ex^change Ltd. Phiroze Jeejeebh^oy Towers, Dalal Street, Mu^mbai- 400 001 Scrip Code: 507717

Sy^mbol- DHANUKA

Sub: transcript of Conf^erenc^eCall with Analysts/Iⁿvestor^s

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Dhanuka Agritech Limited Q1 FY2021 Earnings Conference Call July 22, 2020

Management:

Mr. Mahendra Kumar Dhanuka – Managing Director Mr. Rahul Dhanuka – Director (Marketing) Mr. Vinod Kumar Bansal – Chief Financial Officer

Hosted by Antique Stock Broking

• Manish Mahawar: Thanks Janice. On behalf of Antique Stock Broking, I would like to welcome all the participants on the call. From the management, we have M.K. Dhanuka, Managing Director, Mr. Rahul Dhanuka, Director (Marketing) and Mr. V.K. Bansal, CFO on the call. Without further ado, I would like to hand over the call to Mr. Dhanuka for opening remarks. Over to you Mr. Dhanuka!
• M.K. Dhanuka: Thank you Mr. Manish. Good afternoon ladies and gentlemen. Hope you all are doing well and keeping safe. Thank you for joining us for the Q1 FY2021 results conference call. I have with me Mr. Rahul Dhanuka, Director (Marketing) and Mr. V.K. Bansal, CFO of the company.

Dhanuka Agritech Limited is the leading agrochemical company in India. We specialize in formulated products and have a solution for almost every crop. We have a strong diversified product portfolio which is well distributed across insecticides, herbicides and fungicides segment. We have a pan India presents with over 7,000 distributors and dealers and approximately 80,000 retailers. We have three states-of-the-art manufacturing facilities in Rajasthan, Gujarat and J&K.

Coming to the quarterly operating performance, despite the challenges faced during the nation wise lockdown and reverse migration of labours from big cities to rural areas, I am pleased to inform that we have witnessed record sale on the backdrop of good monsoon, recharged groundwater table and better sowing in Kharif season during the month of June. Some of the ambitious steps taken by the Government of India to revive the role of agriculture in the growth of Indian economy such as increasing Minimum Support Prices, eNAM portal, distribution of soil health cards and direct benefit transfer via PM Kisan Samman Nidhi have helped to create a robust foundation to enhance farmers income and encourage wider adoption of high quality seeds and judicious use of fertilizers, these initiatives would transform Indian agriculture and make it competitive globally.

Coming to the financial performance for the quarter, revenues from operation stood at R. 373.84 Crores in Q1 of FY2021 versus Rs. 219 Crores in Q1 of FY2020 representing an increase of 70.70% growth, EBITDA stood at Rs. 65.28 Crores in Q1 of FY2021 versus Rs. 19.97 Crores in Q1 of FY2020 up 226.94%, EBITDA margins improved from 9.1% in Q1

of FY2020 to 17.5% in Q1 of FY2021 led by strong operating leverage. Profit after tax was at Rs. 51.79 Crores in Q1 FY2021 versus Rs. 14.79 Crores in Q1 FY2020 up 250.12%, PAT margins improved from 6.76% in Q1 of FY2020 to 13.85% in Q1 FY2021, such tremendous performance is possible because of the teamwork from factories, from the marketing team, from finance team, from logistics team and all these are results appreciation from management.

Coming to the June wise share of turnover for at Q1 FY2021, north zone contributed 31%, east zone contributed 10%, west zone contributed 42% and south zone contributed 17%. Product category wise share of turnover was as Q1 FY2021, insecticides contributed 31%, fungicides contributed 11%, herbicides contributed 46% and others contributed 12%. You are well aware that at initial stage, consumption starts with herbicides followed by insecticides and then fungicides.

I am happy to inform that the board has approved buyback of equity shares of the company using funds of Rs.100 Crores at a maximum price of Rs.1,000 per share. These equity shares will subsequently be extinguished resulting in reduction of paid up share capital of the company.

We would like to highlight that we have received approval for one molecule in this quarter under section 9(3) category which will be used for grapes and potatoes. Also, during the last quarter, we have launched two new products by the name of Dabooch and Dozo Maxx which are both herbicides; both the products are in license products.

Friends, Dhanuka regularly organize various seminars Krishak Goshthi and Sammelans to educate our farmers about new innovative techniques of farming. Being India's leading Agrochemical Company, we are at the forefront of introducing digital solutions and innovation, streamlining policies and collaborating with ingenious entities to boost integration of technology across business segments.

In the same endeavour we have tried to boost our reach through online farmer interactions and aggressive use of TV advertisements for our three products such as Sempra and Targa Super. We are focussed on expanding our market coverage through our network of distributors and our digital platform where we are engaged with end consumer. We consider ourselves responsible to securing the farmers welfare and preserving full security of the nation. We continue to strengthen our association with the Farmer Producer Organization Krishi Vigyan Kendra and other critical institutions to increase our business expertise and boost our market presence.

To summarize at last, Dhanuka continues to demonstrate our ability to overcome challenges and emerge stronger despite uncertain business environment. We will aggressively rollout new formulations in the upcoming quarters and would ensure that it reaches to the

consumer. I reassure our shareholder that we are committed to the task of transforming the landscape of agriculture in India and will play an integral role in rewriting the future of a better and new India. Now on this note, I would like to hand over the mike to Mr. Manish to enable us to take questions and answers. Thank you very much.

• Moderator: Thank you very much. Ladies and Gentlemen, we will now begin the question and answer session. We take the first question is from the line of Rohit Nagraj from Sunidhi Securities. Please go ahead.
• Rohit Nagraj: Thanks for taking my question. Our sales have been very robust and congratulations on the same. Is there any preponement of sales for Q1 vis-à-vis lockdown issue and probably may be the lockdown will be extended if second wave comes in so from that perspective has there been that some of the sales which was supposed to in Q2 has come on Q1?
• V.K. Bansal: Definitely, there is a preponement as well as postponement of sales in Q1, because of the lockdown in Q4 we could not make the billing of at least eight days approximately 10% of the sales of Q4 were postponed in Q1 and at the same time because of onset of monsoon in time, so there was preponement sale as well of July to some extent, that is right.
• Rohit Nagraj: Okay and currently how is the situation for the month of July and everything has come to normal in terms of our plant operation, logistics and supply chain both from product placement perspective and from raw material of procurement perspective?
• M.K. Dhanuka: Could you please repeat that question?
• Rohit Nagraj: Now the first quarter is over in the month of July, so how has been the solution in terms of our plant operations have been normalized and on the supply chain front both from our product placement in the market and raw material procurement?
• Rahul Dhanuka: Our plant operations stabilized much earlier I think so somewhere around April end, they were significantly up and running and I think so by mid May we were running full capacity, we received lot of support in this from the local government at the district and the state level also, agriculture and agri input being essential commodity, we received a very good support. At one our plant we faced the issue of the labour going back to their native districts, but by the month of June end they were really back and into operations up and active again, so plant operations are absolutely really good in that we could service our channel and customers in the last quarter. In terms of the supply chain, I believe except the sporadic impact of the local district level lockdowns, the supply chain is significantly smooth and things are moving positively and also the procurement pipeline faced some hiccups in May and June for various reasons which also has significantly stabilized and the procurement pipeline is also running largely unhindered and undisturbed.

• Rohit Nagraj: Sir one last question, in your presentation you have said that the target to launch 10 new products for this segment over the next two years, so what are the categories and what are the crops we are targeting for and what is the potential revenue or potential of these 10 products that is it? Thank you.
• Rahul Dhanuka: In the call, I will not be specifying the products which we are going to launch; however, we have maintained largely an effort to introduce about four to five products every year, we have already introduced two products in the previous quarter which is Dabooch and Dozo Maxx and we are planning to launch about three to four more products within this year out of which two will be 9(3) productions. Our efforts will be to cover all the segments of herbicides, fungicides and insecticides. We will be introducing across the span.
• Rohit Nagraj: Any market size for these 10 products, any idea?
• Rahul Dhanuka: Now we are not specifying that.
• Rohit Nagraj: Thank you very much and best of luck Sir.
• Moderator: Thank you. We take the next question from the line of Varshit Shah from Emkay Global. Please go ahead.
• Varshit Shah: Thanks for the opportunity and hearty congratulations of management team for this splendid performance. My question is on the margins, we have seen gross margin improvement on a Y-o-Y basis, but my sense is that your probably gross margin could have improved even better, one of the reason I could think of it because we were ahead of the competition in terms of securing a supply chain especially from imports and hence we were able to place and it would be probably ahead of competition we delight to this robust performance, but then probably we had to compromise a bit on margin in the form of higher cost of good, because you are ahead in the game and then prices came down subsequently, is my assessment correct? That is part one and if that is yes and we will see even further improvement in gross margins in Q2?
• V.K. Bansal: We can expect improvements in gross margin in Q2 that is right and with regard to your first part of the question I understood you are saying if there is an improvement in the gross margin by 19 bps, but it could be much better than this right?

Varshit Shah: Yes Sir.

V.K. Bansal: Yes, you are right it could be. I cannot deny that, but you see in the Q1 portion of some B2B sale in generic is exponentially increased disproportionately, therefore increases like this. It could have been better if the proportion which we have normally two-third and onethird, it remains like this it could have been much better.

Dhanuka Agritech Limited

Earnings Conference Call Q1 FY2021

provide any update on that ban of 27 molecules which the government has come up with the orders, so as there is any further update on that and also on the glyphosate related molecule?

• Rahul Dhanuka: First of all I will be talking about the channel inventory, of course March end the channel inventory was not very high and subsequently due to aggressive sowing availability of irrigation water, availability of groundwater has led to actual consumption of agrochemical, so April, May, June has seen significant consumption of agrochemicals and almost 60% to 70% of the stocks have been consumed, so there is pretty less inventory in the pipeline. What I am talking to you about is June 30, 2020 situation and then the consumption has continued, so the pipeline stocks are not expected to be very high that is one thing, of course the second point was about the margin expansion, so in Q2 the large impact will be of product mix.
• M.K. Dhanuka: Last year there was a significant decline in the gross margin in Q2, so one base is low, secondly last year there was a decline and trade started in the month of August, this year we are not expecting such a trade, so therefore it is a combination of all, one is the base, one is the return on trend and the third is the product mix, therefore we are expecting improvement in the Q2 Gross Profit.
• Rahul Dhanuka: And then talking about 27 products ban, the industry took up very strongly this issue Farmer Associations and the channel also took up the issue very strongly because this does not have scientific base and as of now the subject has not moved forward. We are not looking at any of these bans coming into action in near future, the entire list contains about three red triangle products, so at worst what can happens is that those red triangle products might come in the government's ambit in the short term, but in long term the government would probably be seeking more data and being satisfied with the data would allow the products to be continued, because these are the optimum low cost choices and options available with the farmer which is not as of now prudent to withdraw.
• Viraj Kacharia: Okay, if I can squeeze one question, you said that apart from the mix and the base, also the trade terms you have tightened, so for us in the industry is that by and large the approach that given the kind of demand and consumption we are seeing right now, the approach is more of tightening in terms of trade either in terms of most strict credit terms or increased in product prices, any of those things we have seen in the market place?
• Rahul Dhanuka: As such you know that Dhanuka is asset light model and a debt free balance sheet we have that leverage is available from our vendors. When we go out to reach out to our customers I think so this is natural what is happening in the ecosystem, but we have improved our trade receivables significantly, so we have gone really aggressive on that front and that was largely plant of the part as we were shipping up to the Q4, we have gone aggressive on our collections and trade receivables.

the three factory chain which did this great job. So as an outcome the market share would have certainly increased.

• Krish Kothari: Thanks, and just one question on the employee cost for the quarter, I was wondering has there been any salary cuts and assuming there has been will they simply be made of in subsequent quarters or have you paid pretty much 100%?
• V.K. Bansal: We have paid 100%.
• Krish Kothari: Thank you.
• Moderator: Thank you. Next question is from the line of Nitin Agarwal from IDFC Securities. Please go ahead.
• Nitin Agarwal: Thanks for taking my question. Sir, I have two questions. One is a) with all these talks about potential banning out certain goods from China, how do you see that impacting the industry landscape in general and two, from Dhanuka perspective Sir, how much of your business impact for us from strategy perspective?
• Rahul Dhanuka: I do not think so we have heard any specific message around banning of agrochemicals import from China. How I look at is that agriculture is the cornerstone of the India economy GDP both economically as well as politically. What we should worry about as a country and as a government is about food imports, so still we have to indulgent lot of pulses import, lot of oil seed import and we need to really take care of that by increasing the productivity in our country, so should we become food dependent or should we become chemical dependent for a while. While the government takes initiatives to increase Make in India and increase the chemical production in the country which is certainly laudable and appreciable effort. I think so we will not be as a country we will not be compromising with our food security and we would probably be trying and making the efforts to check our food import bill, so that is whatever is happening in short term is my feel, but if there is dumping happening of agrochemicals from China or something like that then I think so government should take a serious view of that and take corrective action as well. Talking about the strategic perspective of China sourcing, for Dhanuka our strategic sourcing is largely some of a Japanese principle, our 9(3) pipeline largely constitutes of Japanese partnerships and products and also our relationship with American and European companies, which are the major source of in-licensing products, so the strategic weight remains there.

Nitin Agarwal: Secondly, this is pretty much a best year after a gap of almost three years, because then we have had very uneven monsoons after FY2017 onward, when we start we look like three year view business going on in the context of how uneven growth has been for us over the last three to four years, so how should you look at the business on a three year view, does it

continue to remain hostage to these monsoons on an annual basis as was seen in the recent past, we will see about structure and structural improvement in growth if you go forward?

• Rahul Dhanuka: I cannot discount the impact of monsoon when we talk of three year's perspective, yet at Dhanuka we are making efforts to streamline this mode in terms of structural changes, how we can make it more and more agnostic to be monsoon impact. Now this initiative while we are taking at our end is also very visible in the environment, because more irrigation channels are being established, more water accessibility for the farmer is happening and the technology is moving towards drought resistant crops in agriculture, so that is going to help the Indian agriculture grow and stabilize in perspective. From our side, we are introducing more products which are suitable for the farmer even in case of less water, so for example last year itself we have introduced a product CHEMPA, which is a rice herbicide and it is meant for direct seeded rice or water stressed rice and this year it was because of labour stress that Punjab, Haryana and various other markets, the farmer shifted to labour free direct seeded rice and CHEMPA has exhibited a major boost, so what I am sharing is we are trying to make our portfolio also monsoon agnostic.
• Nitin Agarwal: Second squeeze it last one, for Rabi season, are there any indications why when will be start getting sense of how Rabi will ready play out this year for industry?
• Rahul Dhanuka: So far, the monsoon forecast is very good for the Rabi also. La Niña is largely predicted and has set in. La Niña is a monsoon favorable situation of the Pacific and Atlantic, so I think we are well placed when it comes to good Rabi rainfall and we are also well placed in terms of the self sufficiency call of the government of oil seeds, pulses and other crops, so I think Rabi is expected to be really good.
• Nitin Agarwal: Thank you and that is all.
• Moderator: Thank you. We take the next question from the line of Rohan Gupta from Edelweiss. Please go ahead.
• Rohan Gupta: Dhanuka Ji good evening Sir. First question is on our current year FY2021 the growth prospects which we have seen for our company, no doubt Q1 be has seen a very solid growth and you are still talking about that in Q2, you remain confident about further growth in Q2 as well right despite this from preponement of sales happening in a current year, but you still remain confident that Q2 we may see growth over last year?
• M.K. Dhanuka: Definitely, we hope that we will definitely have growth over last year, which is evident from the last 20 days sales also.
• Rohan Gupta: If I just were to look at the slightly more closely then what kind of growth number we can expect. Do you mention Sir full year you are expecting 20% plus revenue growth, my

whole point was that given the robust Q1 and even if we are expecting a Q2 growth then it means that for full year, we are going to see revenue growth number may be beyond 25% or 30% also, so I am just looking that are we being conservative in terms of how we are seeing this year, also the same thing is that reflected in bottomline like EBITDA margin expansion though you initially guided for 100-basis points, but Sir if I keep your last year nine month number same and Q1 number if I factor in for the current year then itself you have achieved 150-basis point EBITDA margin expansion already, so I just wanted to get a fair sense that how FY2021 could pan out given that in a current scenario and how the agri doing so, if you can just share some more light on that?

M.K. Dhanuka: I will request Mr. V.K. Bansal to answer this question.

V.K. Bansal: You are absolutely right. We have committed around 20% growth in the beginning of the year, now looking for the Q1 numbers definitely we are hopeful that overall growth will be more than 20%. In Q2, definitely growth will come and it should come in double-digits, but you will see in the last year, Rabi was very, very good exceptionally well, last year Rabi growth appears to be little dull. As far as EBITDA margin is concerned, you are absolutely right, we have committed 100-basis points and I am sure our EBITDA margin improvement significantly more than what we committed.

• Rohan Gupta: Sir second question is related to buyback, how should we read it, is it in lieu of dividend which generally give you thought that it is a better time to distribute the cash because, we are doing in buyback when stock has seen a huge appreciation in the last three months and even the buyback size is also pretty aggressive at Rs.1,000, so is it lieu of dividend, you are doing this buyback because there is no tax related benefit now or it is another smart way of paying the money to the promoters because 75% we have and are we also going to participate in a buyback, so that is it a smart way of paying money to the promoter, so that is one thought on that Sir?
• M.K. Dhanuka: It is definitely one way of rewarding the shareholders instead of paying dividend you are doing the buyback and paying the dividend the tax liability remains with the shareholders while in the buyback, the tax liability will be borne by the company. So ultimately shareholders are going to get the advantage in this buyback since promoters are holding 75%, so always that benefit will be passed onto the promoters also, because they will be participating it is the tender, so the promoters will also be participating in the buyback process.
• V.K. Bansal: We are not saying they will not pay a dividend, but yes in this year the buyback dividend is significantly lower as compared to the previous year. But dividend will definitely be there in this year as well.

Moderator: Thank you. We take the next question from the line of Archit Joshi from Dolat Capital. Please go ahead.

Archit Joshi: Thanks a lot for the opportunity and congrats for a great set of numbers. Sir, we have around 70% odd of volume growth for this quarter, I just wanted to ask, we have been benefited by the recent locust attack that are happened in the quarter, so if I were to look at on a like-to-like basis and if you can say a quantum of volumes that you have had from other locust attack because I think we had about 7 to 8 products from our insecticides portfolio, that could have been used for this particular phenomena, so if you can help this out with that?

• Rahul Dhanuka: Locust attack is relatively spread out in terms of the north and northwest of the country; however, its intensity keeps on varying depending upon the microclimate of the area, so right now the locust is active in some part of Haryana and Uttar Pradesh and the agrochemical consumption is largely tender based where Dhanuka has not aggressively participated, whatever you see consumption in the private hands of the farmer, our options are available to the farmer much aggressively and much better way for him to make his choice.
• Archit Joshi: Right Sir, got it. Another question on the participant who had asked about the gross margin expansion, if you can just repeat as to what has happened in the first quarter and what we are expecting in the second quarter I think I missed that point?
• M.K. Dhanuka: In the first quarter, there is an improvement of 90 bps in gross margin and in Q2 we are expecting an improvement in the gross margin, because last year there was significant decline in gross margin in Q2 because the price decline in trade was there in the month of September, this year we are not expecting as a trade, so therefore we are expecting a improvement in the gross margin as well as some improvement in the product mix as well.
• Archit Joshi: Right Sir, on the same point I think we have already taken a price hike in the previous quarter and will that also sort of come into play if you consider the base and if you can also comment on how is the underlying pricing of the thing that we are importing from in licensing partner?
• M.K. Dhanuka: In case of imports normally prices are stable throughout the year, the price change was significant in the month of April, May in case of generics and now it is largely settled in the few molecules, there is a little softer and few molecules there is increased in the price.
• Archit Joshi: Right Sir, so largely it is stable?
• M.K. Dhanuka: Yes.

Dhanuka Agritech Limited

Earnings Conference Call Q1 FY2021

Dhanuka Agritech Limited

Earnings Conference Call Q1 FY2021

• Somaiah V: Great Sir, helpful. Second, I think one of the previous participants mentioned about this locust impact in corresponding sales for us, so was there any kind of numbers that we can attach to this which kind of aided in Q1 and numbers, this locust impact in corresponding sales?
• Rahul Dhanuka: I do not think so the locust impact would have impacted our numbers directly, but overall there is an aggressive agrochemical consumption in the market in the fields by the government, by the farmers to deal with the locust attack, so that vacuum in the market would have certainly impacted our portfolio, our revenues also indirectly.
• Somaiah V: Also, in across regions we have done well, but specifically south relatively a smaller base, but there has been quite a sizeable jump, so any colour on that front in terms of southern markets anything that you are saying different this time?
• Rahul Dhanuka: Southern markets were carrying forward impact of good rainfalls in the previous Rabi, so previous Rabi resulted in good waters in the dams, good groundwater, good sowing in December, January and which was the carry forward impact of the consumption going into April and May.
• Somaiah V: Also, is there any element of prebuying because of this COVID impact that you are able to see from the market I mean a sense of urgency on products not being available that is probably pulling forward some of the sales, is there something that you can fix?
• M.K. Dhanuka: I think so in April and May I would say that there was a colour of that fruit apart from increased sowing, because increased sowing itself consumed the products, absence of labour consumed the products, but also there must have been some impact of the feeling of shortage or unavailability resulting in preponement or aggressive lifting of material by the channel as well as by the farmer.
• Somaiah V: Got it Sir, helpful. Thanks for taking my question.
• Moderator: Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead.
• Vishnu Kumar: Thanks for the followup. You mentioned about direct seeded rice, if you just explain like conventional method is so direct seeded rice, how much would probably a farmer incrementally has to buy an agrochemical per acre spending Rs.200 now how much would you expect that?
• Rahul Dhanuka: That is a difficult one. Per acre farmer is spending Rs.200 in one type then what is the differential delta in the other one. I will not be able to express that right away Vishnu, I will have to come back on that one. Theoretically speaking in past direct seeded rice has been

Rikin Shah: Thank you so much Sir.

footing on the primary front.

aggressively for the secondary sale reach out wherever we find ourselves on the strong

Moderator: Thank you. We take the next question from the line of Rohit Nagraj from Sunidhi Securities. Please go ahead.

Rohit Nagraj: Thanks for followup. Sir, just one question in terms of strategy, so whenever we are introducing any new products, so what is our strategy, there may be some incumbents in similar category, so are we targeting may be in the initial phase some kind of pricing power over the competitors or we are primarily making use of our expanded distribution reach to the farmer doctors, etc?

• Rahul Dhanuka: There are three things which we largely tried to leverage. One is our understanding of the emerging opportunity. Second is accessibility of the new technology and third is leveraging our distribution channel, so while trying to leverage, first of all I will talk about the emerging opportunities, so for example, in Madhya Pradesh, in soya bean markets there was a trend at the farmer in Malwa Belt in Ujjain, Indore area, they started shifting towards preemerging herbicide, we really tried and source Dabooch is an access point as a preemerging herbicide in soya bean. In terms of accessing new technology, Largo which is the product from Corteva is a very, very powerful and eco-friendly and almost bio-product to control lepidopteron pest very, very powerful technology which we source from Corteva and third is of course introducing a product to leverage our channel and make the product reach into wider corners of the country which we find we can do exceedingly well because of our channel network, the leverage these three things and we have the options across these three while we introduce a new product.
• Rohit Nagraj: Normally how is the competition across these products, there are very few players in the category or there are many players, but these are recent specific players or probably do not have the time wide distribution reach that we have?

Rahul Dhanuka: Normally we tried to introduce products when many players are not present.

• Rohit Nagraj: Last clarification, do you have any biological in your portfolio or are there any plans to introduce them in coming future?
• Rahul Dhanuka: There are couple of biological in our portfolio yes. We introduced a product last year itself Mycor and Largo from Corteva is also biological and we are aggressively looking at offering these options also to our consumer aggressively.
• Rohit Nagraj: Thanks for the followup Sir and best of luck.
• Moderator: Thank you. We take the next question from the line of Viraj Kacharia from Securities Investment Management. Please go ahead.

Rohan Gupta: Okay, Sir, impact is already visible Sir, have you seen that those products are now off the shelf from the small dealers, retailers, are there still very much there?

• Rahul Dhanuka: What I am trying to do is only extrapolate here Rohan because as I shared with you, the market accessibility has not yet opened up. There are district level lockdowns, our market associations have imposed their own lockdowns, we are company peoples are not being allowed easy access into the markets, so that visibility is not very loud and clear, I am just extrapolating given the fact that my other peers have also informed a brisk movement in the quarter and I have seen unprecedented movement in this quarter, the links may takes me to believe that there is a supply shortage from the unorganized sector and this is what my channel also informs me in my telephonic and Zoom interactions that such supplies and spurious supplies and so-called bio-product supplies is seriously impacted.
• Rohan Gupta: Okay, great Sir. Thank you so much.
• Moderator: Thank you. We take the next question from the line of S Ramesh from Nirmal Bang. Please go ahead.
• S. Ramesh: Good evening Mr. Dhanuka and Mr. Bansal. Thank you for the call. My first question was on the balance sheet, what is the kind of capex you plan to invest this year and what is the impact of sharp growth in revenue on your working capital?
• V.K. Bansal: As far as capex is concerned, not really significant. It would be normal capex between 5 and 10 Crores in this financial year.
• S. Ramesh: What about the impact on working capital because you have seen your revenue go up so much?
• V.K. Bansal: Working capital has improved in the Q1 significantly by 15 days.
• S. Ramesh: So, you expect that to continue for the rest of the year?
• V.K. Bansal: It should continue, but not exactly in the same speed.
• S. Ramesh: In terms of the distribution cost, do you see any room for improvement in the distribution cost for industry or for your own company or is there a potential for the cost will go up

Rahul Dhanuka: I am not sharing those numbers on the call.

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all for joining. You may now disconnect your lines.

For further information, please contact:

Jitin Sadana Company Secretary [email protected] +91 124 3838 500

Rohan Rege/Himanshu Patel Churchgate Partners [email protected] +91 22 6169 5988

Note: This transcript has been edited to improve readability

Dhanuka Agritech Limited

(CIN: L24219DL1985PLC020126)

14th Floor, Building 5A DLF Cyber Terrace,

Cyber City DLF Phase III Gurgaon- 122002 (Haryana)

Disclaimer: This presentation contains statements that contain "forward looking statements" including, but without limitation, statements relating to the implementation of strategic initiatives, and other statements relating to Dhanuka Agritech Limited ("Dhanuka Agritech" or the Company) future business developments and economic performance. While these forward looking statements indicate our assessment and future expectations concerning the development of our business, a number of risks, uncertainties and other unknown factors could cause actual developments and results to differ materially from our expectations. These factors include, but are not limited to, general market, macro-economic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments, and other key factors that could affect our business and financial performance. Dhanuka Agritech undertakes no obligation to publicly revise any forward looking statements to reflect future / likely events or circumstances.