Anand Rathi IPO report on Dharmaj Crop Guard
Dharmaj Crop Guard are an agrochemical company engaged in the business of manufacturing, distributing, and marketing of a wide range of agro chemical formulations such as insecticides, fungicides, herbicides, plant growth regulator, micro fertilizers and antibiotic to the B2C and B2B customers. They also engage in the marketing and distribution of agrochemical products under brands in-licensed by them, owned by them and through generic brands, to Indian farmers through their distribution network. The company provides crop protection solutions to the farmer to assist them to maximize productivity and profitability. They export their products to more than 25 countries in Latin America, East African Countries, Middle East and Far East Asia. They sell their agrochemical products in granules, powder and liquid forms to their customers. Additionally, they manufacture and sell general insect and pest control chemicals for Public Health and Animal Health protection.
Valuation and Outlook
The revenue from operations has grown at a CAGR of 41.02% from FY2020 to FY2022 and Profit after tax (PAT) has grown at a CAGR of 63.30% FY2020 to Fy2022. The company has established a distribution network, strong branded products, and stable relationships with their institutional customers. In addition to this, the government’s aim to reduce dependency on China and improve selfsufficiency is expected to support industry’s backward integration and thus its growth. Pursuant to the setup of this manufacturing facility, profit margins on products would resultantly increase due to backward integration. Considering the future prospect for the company we assign “Subscribe” Rating to this IPO.
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