Dhanuka Agritech Limited (507717) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Dhanuka Agritech 2Q FY '22 Post Results Conference Call hosted by Antique Stock Broking. [Operator Instructions] 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. MK Dhanuka, the Managing Director of the company; Mr. Rahul Dhanuka, Chief Operating Officer; and Mr. VK 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 will open the floor for Q&A. Thank you, and over to you, Dhanukaji.

Okay. Thank you, Himanshu. Good afternoon, ladies and gentlemen. Myself, MK 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 '21-22 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. VK 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 packed sizes ranging from 2 grams to 20 liters. These products are in various forms like liquid, powder and granules. Dhanuka has a pan-India presence through our marketing team and warehouses in all the major states across India. With 3 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 techno-commercial staff, supported by a strong marketing team to promote and develop new products. Dhanuka's strong R&D division has world-class NABL-accredited laboratories as well as an excellent team for new product registration and development. Dhanuka has international collaboration with 10 leading global agrochemical companies from the 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, eNAM 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 quarter 2 of FY '21-22, revenues from operations stood at INR 438.82 crores in Q2 of FY '21-22 versus INR 442.39 crores in Q2 of FY 2021. EBITDA stood at INR 89.09 crores in Q2 of FY '21-22 versus INR 97.2 crores in Q2 of FY 2021. Profit after tax was at INR 63.37 crores in Q2 of FY '21-22 versus INR 70.08 crores in Q2 of FY 2021. There was adverse impact of weather conditions in July and August on the business, which has reversed in the months of September and October. And currently, the conditions are favorably for consumption of agrochemicals. Unfortunately, because of the erratic behavior of monsoon in the months 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 plots in number of states which has impacted the sales and growth of the ag chem industry. Apart from this, the crop conditions in North India were very good, and farmers rebate good yields. But unfortunately, there was no pest impact on the crop. Because of this, the sales of the agrochemicals was impacted. Coming to zone-wise share of turnover for FY '21-'22 for Q2, the North zone has contributed 21.71%, the East zone has contributed 12.14%, West zone has contributed 35.66% and South zone has contributed 30.49%. Product category-wise share of turnover for Q2 of FY '21-'22, insecticides contributed 43.45%, fungicides contributed 23.41%, herbicides, 22.54%, and others, 10.60%. Coming to the financial performance for quarter 2 of FY '21-'22, revenues -- sorry. As discussed last time, the company has also started working on its greenfield projects as Dahej, Gujarat. Further, I'm happy to inform you that Dhanuka has been granted its first patent on 9th August 2021 for the formulation of synergistic herbicidal formulation comprising a combination of halosulfuron methyl and metribuzin for control of sedges, narrow and broadleaf weeds in sugarcane. The product is under registration process, and we expect to launch that thing in 2023. We have also conducted the ritual of Bhoomi Poojan for the new R&D facility at Palwal, Haryana on 10th September 2021. Dr. Yogendra Sehrawat, 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 technologies to the farmers. I'm pleased to share that ICRA Credit Rating Agency 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 loTechWorld 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 Goshthis, 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 that 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, et cetera. Dhanuka is focused on expanding its market coverage through its network of distributors and digital platforms, including social media presence where they engage with the end consumer. Dhanuka considers itself responsible for securing the farmers' welfare and preserving food security of the nation. We continue to strengthen our association with the Farmer Producer Organization, Krishi Vigyan Kendra and other important institutions to increase our business expertise and boost our market presence. On this note, I would like to hand it over to the operator to enable us to take question and answer. Thank you.

[Operator Instructions] The first question is from the line of Varshit Shah from Veto Capital.

Congratulations on a good set of numbers given the external conditions for the industry. Sir, my first question is on Dahej manufacturing projects. Any update on that project and what is the progress? And is there any change or revision in time lines for the execution of the project?

There is no change, and the project is on -- will be on track. It is -- there is a delay of around 4 to 6 weeks because of heavy rain in the month of September. But we are sure we will be in time by March.

Okay. And sir, second is in terms of the new products which you just mentioned, for which you have been granted patent, so are there any other also molecules in the part, where the work is going on and probably some of the fruits can come in over the next 2 to 3 years. And 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. So I just wanted to understand, are you building our own 9(3) strong pipeline from a 2- to 3-year perspective?

Yes, Mr. Varshit. So we are bringing every year 2 new 9(3) molecules as per our commitment. And this year, we have already launched 1 molecule and 1 more molecule to be launched by end of Q4. Next year also, we have 2 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 '23-'24. And we have further patents also in the pipeline.

So then one last thing, sir, regarding your disclosure. So I think insecticide category figures have suffered in both the quarters in Q1 and Q2 and H1 as a whole. So is this a sort of a weather-related phenomena? Or there were lower amount of pest attacks in probably your -- in the categories where you are present? So any color on that.

Yes. You see, it is largely on account of the dry spell in the months of July and August. So we missed certain spray, because of which the sale of insecticide has suffered. And as I shared, there was no pest attack in the North zone and that the insecticides are used mainly to control the pests. So when there was no pests, the consumption of insecticide was less in North India, which has also impacted the sales of the insecticide category.

Sir, I have some follow-ups. I'll get back in the queue. All the best for rabi season.

Thank you.

The next question is from the line of Rohan Gupta from Edelweiss.

Sir, we have seen that there is rising input cost pressure. Chemical prices across the board are going up. And also, there is a China power crisis, which is also going to affect the availability of many intermediates. And we still have an asset-light business model. So how do you see that -- if 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? And definitely, it will be available at a higher cost. So would it 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, all the companies who are manufacturing the technicals in India, they are also importing their intermediates from China, and the prices has increased like anything. I can say that China has become clearly in increasing the prices. There are 4 reasons behind this increase in the prices. Number one, they -- power shortages in China. Because of this, the units have been closed down by the government, and hardly the units are operating 2 days a week instead of 7 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 phosphorous is the basic raw material for manufacturing of a number of intermediates and technical get pesticides. Number three is basically these freight costs. Because of known availability of the containers, the freight cost has gone very high, 3 to 4x. That is the third reason. And 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. So because of this, the government has passed order to close down all the hazardous chemical and pesticide industries. So 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. But 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, and Dhanuka has increased its prices effective from 1st November 2021. And I am not sure whether how much price increase we will be able to pass on. It will depend on the market conditions, how the competitors behave in the market and how much inventory each company is holding. We do have inventory for at least 2 months, for sure, for November and December, and some maybe for January also. But after that, we will have to procure raw material at a higher cost. And presently also for some raw materials, we are procuring at new prices.

So 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 parallels in the current crisis in China when almost a couple of years back, there was a fire in the China plant, and we had a supply chain getting disrupted for almost 6 months, and chemical prices at that time have gone up sharply. And we have seen a margin pressure in our company significantly in those 3 to 4 quarters. So do you compare that current situation is like similar? And if we are not in position to pass it on, we may see some margin pressure like what we have witnessed earlier almost 3 years back?

You see, Rohan, as far as we believe, you see, whenever there's such a steep increases there, so we always get the advantage of the inventory lining system. Even if we are not able to pass on the entire increase, it's still for a premium if 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 will be a good increase in the gross margin in the quarter because of the trade involvement in the system. So I don't see any possibility of declining in the gross margin in Q3 at least.

Okay. That's great. Then probably in terms of raw material challenges, so though we have enough inventories of almost for 2 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 2 months and that may create the problem of that -- even good rabi season, we may not be able to produce and sell in the market? So do you foresee any such situation, sir?

Availability is not a question. Only the question is of the price. Some importers are taking the situation advantage. Although the cost has not increased to that extent, but they are taking the advantage of demand and supply gap. So material availability is not a question. And -- but for future, you cannot predict 100%. But 90%, I do hope that the products will be available at higher prices.

And last question from my side, and I'll come back in queue again. Sir, your investment in this technology, that's a great initiative taken by the company and the stake which you have taken under this drone company. So sir, if you just can share a little bit more then what is the thought process behind it. Is there 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 an 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, just a start of investment initially. But yes, we are exploring the opportunity with this easy technology, how can we can use it in our business.

The next question is from the line of Resham Jain from DSP Investment Managers.

So I have a few questions. So 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 increases and the output of the crop? And in that context, how will the agrichemical consumption will get impacted? Just your thoughts on the thing.

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 nonavailability, DAP prices shooting up is certainly a cause of concern in terms of impacting the yield for the farmer. At Dhanuka, we get opportunity to offer alternatives to the farmer in the shape of Mycore, our mycorrhizal product, which is our organic bioproduct for nutrient support to the plant by extracting nutrients from the ground. This also gives us opportunity to offer Dhanzyme, our seaweed dung fertilizer to the farmer; and Maxyld, which is a combination of various nutrients for full year application to the farmer. So 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 DAP to suffer the crop. We will see really high increases of oilseeds and pulses coming up. And at Dhanuka, our portfolio is really robust to support the farmer for all these crop choices.

Resham, is the question answered, sir?

Sorry, sorry. So what I was -- what I understood is that shortage of DAP may not have a very large impact on the acreage and the output. That explains it.

Yes, it should not have an impact on the acreage, for sure.

Okay. Okay, understood. And sir, the second question is on the general inventory situation in the market because, as you explained just a while back, right, the prices are on the rise. And typically, no one would like to keep a higher inventory in such scenarios. So how do you see the approach of importers, wholesalers, retailers in the current situation?

See, one was your question, another was a speculative statement. So I will address it from my perspective. 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 farmers through the next 6 months. Our specialty product supplies, for example, Targa Super, Sakura, Chempa, Sempra, Kirari, Nissodium, all these products, we are well placed, completely geared up with the required stock for the season. And 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. And the channel, the market, the industry, everyone is sensing that and is trying to stock the material to the best of individual capability. So this price increase message is there in the market, and our channel is trying to procure extra stock in view of increased prices and in view of a very favorable season with high acreage increase opportunity.

Okay. Understood, sir. And sir, last one is on Dahej project. I think the Phase 1, we were supposed to spend, I think, INR 60 crores to INR 90 crores. In the first half, I think the capital work in progress looks like INR 10-odd crores only. So are we like -- I'm just reconfirming. You already mentioned that by March '22, will -- our projects will be over. So the rest of the project will get over in the next 4, 5 months.

Yes, absolutely right. And you see, up to September, around INR 10 crores will be spent. And by March, then we are expecting around INR 80 crores spend will be there and firstly moving over. So in the next, say, from up to March, approximately [ INR 60 crores ] will be spent to grow.

The next question is from the line of Probal Sen from Centrum Broking.

A lot of them have already been answered. Just on a broad guidance level, the Phase I Dahej, assuming the completion happens by '22, any numbers we can speculate in terms of how it can contribute to our top or bottom line maybe over to FY '23? And 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. So any revision or any -- would you like to revisit that guidance in light of the Q2 performance? Those are my 2 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 1 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. And that's it. Second question is regarding?

Guidance.

The overall guidance, sir, for '22 and '23, if you can speculate anything.

For the whole year, we are now giving guidance for a single-digit growth. We hope that the -- like September and October has grown well, so we expect that rabi should remain good, and we should be able to deliver single-digit growth by March end.

Great. Sir, just going back to the first question. So 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 '23. Is that a correct way to look at it?

Yes, that is right, Mr. Probal.

The next question is from the line of Rohit Nagraj from Emkay Global.

And congrats on the maiden patent for the company. So the first question is on, again, harping on the Dahej facility. So when the formulation plant and the technicals plant is completed by March '23, in FY '24, I think earlier, we had provided a guidance of about INR 200 crores of revenues from this facility. Would that be the right assumption to take?

Yes, you are absolutely right, we expect around INR 200 crores turnover in FY '23-'24. And...

All right. Sir, the second question is from the industry dynamics perspective. So 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?

Yes. So I think -- so I will not go with that statement. And at Dhanuka, almost every time we have been able to pass on the cost increase to the farmer. 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 will be very few quarters when such things would have happened with Dhanuka. So we are able to do a lot of demand-generation activity with the farmer. We do love branding and promotion activity with the farmer. We do a lot of ground-level education activity with the farmer. So whenever there is a price increase and we are able to pass it on to our customers, the brand-conscious farmer, the quality-conscious farmer goes for Dhanuka products.

Right, sir. And really heartening to share that. Sir, just one last clarification on the EBITDA margins. So on Dahej, we had indicated that we'll have EBITDA margins in the range of 12% to 15%. And for FY '22, the EBITDA margin guidance earlier indicated was 16% to 17.5%. Is this right to take from the calculations perspective?

Yes, that's right.

Our next question is from the line of Chintan Modi from Haitong Securities. [Operator Instructions]

Sir, just one question. On the cash flow front, we saw a significant squeeze during the first 6 months. Could you explain -- it seems more on the working capital side. So 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?

Yes. You see, last year, while it's an exceptional year, there was a significant improvement in the MWC. But as a matter of fact, this year, the -- our MW cycle has increased from 89 days to 112 days. That is a normal phenomena, basically. So that was a very different year last year. That is not there this year. So I think that's a very important solution. There's no rain.

Okay. So basically, it is a reversal of the last year's improvement.

Yes.

So how one we should expect it to be more or less on the normalized trajectory?

Absolutely right.

Okay. And sir, with respect to this new patented product that we will be launching soon, just if you could explain some kind of -- what is the kind of market size one should expect? And how soon that we should be expecting in terms of revenue monetization?

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 '24. And I think at this stage, this is what I'll be able to share with you. This is a Japanese offering coming from Nissan Chemical Industries. And we are very upbeat and positive about this herbicide offering. Given the fact that MGNREGA outlay of 73,000 crores has also been consumed and the ministry is asking for another outlay of INR 25,000 -- 25,000 crores, we are pretty sure that the labor availability is going to continuously move sites. And herbicide consumption in India would probably match global standards due to labor shortage and high-value crop. So we see really good opportunity for our offerings as we launch it in FY '24.

Our next question is from the line of Varshit Shah from Veto Capital.

Sir, my question was actually answered in a previous question.

We have the next question from the line of Rohan Gupta from Edelweiss.

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. But Rahul, 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 released numbers, so we can see where it is going. I think so far, the industry is largely at par. Yes, there could be a single-digit growth for sure at the end because the rabi is really looking up.

Okay. So first half, though you say, have been almost flat, but in the second half, we may see growth because rabi is looking better, right?

Rabi is really looking up with good rainfall, good moisture, really up commodity prices. Almost all the state governments pushing for oilseeds and pulses. So rabi is really looking upbeat.

And basically, you are talking in terms of volume growth because I'm sure that in the second half, we will see a lot of price-led growth to happen because prices already started going up in generic. So I see that at least 10% to 15% probably price increase. Are you able to see -- are you seeing in that across the product or it is lower than that?

So one, I'm certainly talking about the volume growth, for sure. And the price increase, whatever price increase is happening, we are passing it on. What's the price increase so far?

Price increase, I'm expecting in Q3 maybe in the range of 7% to 8% type overall, not so much, because there are many molecules on which there is no price increase. They are largely specific molecules. And in terms of generic, there is a significant increase in a few molecules between 5% to 25%, 30%. Overall impact should be between 7% to 8% type, not more. And -- but rather, it will be less price and rightly so. Now price increase impacting is starting from November. October, there are no price increase. So that's in quarter 1, increase might be between 5% to 7% overall for quarter 3, sorry, quarter 3.

Right, sir. And sir, any sense, Dhanuka, if you have while talking to the supplier, the China situation because definitely, the Winter Olympics are going to happen until Feb. The situation may not get addressed immediately. So any sense you see that the Chinese -- 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 31st December to technically get over. So on 31st of December, the current scorecard, so to say, is achieved or not achieved, and the new meter is started on 1st of January. Yet, the entire ecosystem will take its time to warm up and get activated. So probably another couple of months after the Chinese New Year of February, situation should be really easy and supply should become normal.

Okay. Okay. So they have to achieve some certain numbers as well as the environmental are concerned, they have to achieve by 31st of December, right?

Yes, yes, yes.

[Operator Instructions] Next question is a follow-up question from the line of Rohit Nagraj from Emkay Global.

Sir, in terms of our segment-wise breakup, so the other segment, which is PGN, as well as biologicals account for about 10%, 11%. And now we are setting up a new R&D facility as well. So any thoughts on -- because the biological adoption has been increasing across the board. Maybe over a 3- to 5-year period, how much of our segment revenue could be contributed from biologicals? And what are the new initiatives that we are taking on this side?

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. So 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. So 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. And at Dhanuka and at our R&D center, we are doing some really good experiments and trials of biological products. And as and when we are ready with that, we'll come to that. Our current offerings certainly include biological fertilizers, biofertilizers; seaweed extract fertilizers, mycorrhizal, which is again our 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. And that's interesting to know that there is a huge scope for this particular segment to proliferate further. So 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. So normally, who do we look at in terms of competition? Who bites the bullet first because everyone usually says that we'll look at the competition and then accordingly, we'll take the price hikes?

I would really like you to go and tell the competitors, Dhanuka bites the bullet first.

The next question is from the line of Bhavya Gandhi from Dalal & Broacha.

Sir, what would be your pyrethroid percentage to the total component? And is pyrethroid range unaffected due to China impact? Is it so?

Synthetic pyrethroid is one of the leading products of Indian ag chem production. India globally leads in synthetic pyrethroid production and exports. So synthetic pyrethroid is relatively unaffected when it comes to availability.

Availability of raw mat?

In terms of prices going up, synthetic pyrethroid prices are also going up.

Okay. And sir, what would be our percentage of revenue from synthetic pyrethroids?

Well, I have to really dig this for now. We have not done that kind of evaluation because this includes a host of about 9 or 10 offerings from our list. So 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 4 versions of cypermethrin. Then we do bifenthrin and 2 or 3 versions of bifenthrin. Then we do lambda-cyhalothrin and then some versions of lambda-cyhalothrin. Yes, then we also deal into single rate. So these are some of the synthetic pyrethroids we deal with.

The next question is from the line of Saurabh Kapadia from AMSEC.

Sir, what happened to the volume and the value performance for this quarter?

For Q2, you see there is a decline of around 3% in the volume. So there was a 2% gap between value and volume in Q2.

Okay. And just looking over the last 2, 3 years, the share of fungicide has not increased as we saw in the first half. So is there any -- you've been doing well or it is the basket of molecule or specific crops where we have seen a good growth in the fungicide portfolio?

Right. So we have been able to really strengthen our fungicide portfolio very aggressively and some wonderful 9(3) introductions we did in the last few years. We introduced Conika from Hokko Chemicals Japan. Then we introduced Godiwa Super and Spectrum. We introduced Kirari from Nissan 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. So 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. So we've been able to bolster our portfolio in specialty fungicides. And that's why that growth you can see.

Okay. And last on the new products, you mentioned about one product in Q4 and a couple of products in the next year. So again, in which category and which crop that would be there?

So this year, we introduced one herbicide in the onion segment. The brand name is Onekil, which we introduced again from Nissan Chemical Japan. And Tornado is another herbicide we have introduced this year, which finds the space in soya bean 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, we will be introducing [ Cornex ], which is a made herbicide again from Nissan. And then there would be other offerings for the next year, which will be -- I'll just review that. Sugarcane and study -- sugarcane study in horticulture segment, we are going to introduce new products in next year.

So are these all in licensing products that are exclusive to Dhanuka? Are there -- is there more towards the competition ways marketing?

So Onekil is Dhanuka's 9(3) registration. Dhanuka introduced this product. Then [ Cornex ] is also Dhanuka's 9(3) registration from Nissan. And next year, what we are going to introduce, our insecticide, so the brand name is [ Decide ]. And then it is another fungicide. They are also exclusive product for Dhanuka, and they will be on 9(3) offerings.

Our next question is from the line of Resham Jain from DSP Investment Managers.

So sir, this Mycore product which you have mentioned, is this now over 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. And why not? We have top 10 products, it can be. There's a huge phenomenal demand, and there are 2 reasons. One is, of course, the shortage of DAP. Another is, as you're looking at the Prime Minister talking in many speeches about the soil health getting deteriorated, Mycore, this is a micro-based plant nutrient extracted from -- it really recharges the soil wonderfully. So almost a barren land can be reactivated by use of Mycore, and it's very powerful for oilseed and pulses growing.

Okay, okay. And 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.

[Operator Instructions]

Sorry, we missed what you said. Could you come again?

[Operator Instructions] Ladies and gentlemen, that would be our last question for today. I now hand the conference over to the management for their 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 record for a number of years. And because of which, there is moisture in the soil and the reservoirs are full of water. So the farmers are sure that they will get the water for irrigation for rabi crop. So rabi crop is expected to be very good, which is basically seen from the performance after September and October months. July and August were very bad. So we were not basically hopeful that we will be able to land up near or about same turnover. But September has given the relief, and October is also showing very positive response by the market. So we hope that this trend should continue in the rabi season. And we do hope that we will remain very good, and we will be definitely able to deliver much better results in that third quarter. Once we have the [ qualms ] for third quarter, you will see that the results for third quarter are much better. We hope that the growth should remain favorable for the farming community so that they could repay bumper harvest and their income increases. So 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, and you may now disconnect your lines.