Dhanuka Agritech Ltd
NSE:DHANUKA
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Dhanuka Agritech Ltd
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Ladies and gentlemen, good day, and welcome to Dhanuka Agritech Limited Q1 FY '23 Conference Call hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Manish Mahawar from Antique Stockbroking Limited. Thank you. And over to you, sir.
Thank you, Yashi. On behalf of Antique Stock Broking, I would like to welcome all the participants on the call of Dhanuka Agritech. From the management, we have Mr. M.K. Dhanuka, Managing Director; Mr. Rahul Dhanuka, Chief Operating Officer; and Mr. V.K. Bansal, CFO, on the call.
Without any delay, I would like to hand over the call to Mr. Dhanuka for opening remark, post which we will open the floor for Q&A. Thank you.
And over to you, Mr. Dhanuka.
Thank you, Mr. Manish. Good afternoon, ladies and gentlemen. Myself M.K. Dhanuka, Managing Director of Dhanuka Agritech Limited. I hope all of you are doing well and keeping safe. Thank you for joining us in the conference call for results of Q1 of FY '22-'23. I have with me Mr. Rahul Dhanuka, Chief Operating Officer; and Mr. V.K. Bansal, CFO of the company.
Dhanuka Agritech Limited is a leading agrochemical company in India, focusing on blended 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 regulators. Dhanuka Agritech is working with the vision of transforming India through agriculture. Our belief is that when we transform the lives of farmers by enhancing their productivity and quality in tons, enhancing their income. We are making a small contribution in transforming India. We worked in all major crops in India and have implemented the best-in-class technology to ensure a smooth and efficient supply chain.
Dhanuka has a pan-India presence through its marketing team and warehouses in all major states across India with 3 manufacturing units and 41 warehouses across India. Dhanuka caters around 6,500 distributors and dealers and around 80,000 retailers. Through its 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 sales and marketing team to promote and develop new products. It was due to the first of this team that Dhanuka was able to secure higher growth in the focused product in comparison to the generic product portfolio, which in turn help us to protect the bottom line to a certain degree in a challenging quarter.
Dhanuka's strong R&D division has world-class NABL-accredited laboratory 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 technology in India. This year, the rainfall has been uneven and also the [ work of ] rainfall is above average. East and North regions have suffered from very less rainfall, whereas South and West has seen unprecedented range resulting in plus. Now the rainfall has covered most of India in July, except for the East region and July listing and consumption was up to the mark.
Now moving on to the financial performance for the last quarter. Our revenue from operations stood at INR 392.73 crores in Q1 of FY '22-'23 versus INR 363.79 crores in Q1 of FY '21-'22, representing an increase of 8% over the corresponding period of last year. EBITDA stood at INR 68.33 crores in Q1 of FY '22-'23 versus INR 68.86 crores in Q1 of FY '21-'22. Profit after tax stood at INR 49.11 crores in Q1 of FY '22-'23 against INR 48.6 crores in Q1 of FY '21-'22. The zone wise percentage share of turnover for quarter 1 FY '22-'23 is north [ 30% ]; East zone, 9%; West zone, 44%; and South zone, 17%.
Product category-wise share of turnover for Q1 of FY '22-'23 insecticides contribution, 27%; fungicides contribution, 11%, herbicides, which goes as the initial is 52% and others, 10%. The shareholders of the company in the 37th Annual General Meeting held today at 11:00 a.m., declared 300% final dividend, that is INR 6 per equity share, having face value of INR 2 per share. The Board has already paid 400% interim dividend to the shareholders as declared in its board meeting dated 2nd February 2022. The total amount absorbed in the payment of dividend for this year is INR 65.21 crores.
We are happy to inform that the company has obtained approval of the CIB and RC Government of India under section 9(3) of the Insecticide Act for 2 new molecules, one is herbicide and another is fungicide for formulation indigenous manufacturing. The one product is Cornex, which is a herbicide, which is combination of 2 molecules, Halosulfuron Methyl plus Atrazine, which will be used for the control of wheat in the crop maize. The second product is Zanet, which is a fungicide, which is a combination of Thiophanate Methyl plus Kasugamycin for the control of powdery mildew and bacterial leaf spot in tomato crop.
Further approval has been granted by CIB and RC to the company for 3 herbicides molecule and PGR for formulation, indigenous manufacture under Section 9(4) of the Insecticide Act. Setting up of Dahej plant is as per its scheduled time, and we hope that the initial production will start from [ March '23 ]. Being India's leading agrochemical company, Dhanuka are at the forefront of introducing digital solutions and innovations, streamlining policies and collaborating with indigenous entities to boost the integration of technology across business segments. In the same endeavor, we have tried to boost our reach through online framer interactions and aggressive use of TV advertisements for all our key products.
We are focused on expanding our market coverage through our network of distributors and our digital platforms where we engage with the end consumer. In the same endeavor, Dhanuka has tied up with upcoming online platforms like AgroStar, DeHaat, Gramophone and Plant It for online sales of Dhanuka products through their platform. We consider ourselves responsible to our securing the farmers' welfare and preserving food security of the nation. We continue to strengthen our association with the farmer producer organization, FPOs, Krishi Vigyan Kendras, KVKs and other critical institutions to increase our business expertise and boost our market presence.
I'm happy to inform that the July month for the company has gone well, and we had very good growth in the month of July, and we expect similar trends to continue in the month of August and September. So we are confident that we will be able to deliver much better growth and much better performance in the second quarter in comparison to the first quarter.
Thank you very much for your kind attention. We would now take the questions from you, which you may have. Thank you very much.
[Operator Instructions] We have a first question from the line of Varshit Shah from Veto Capital.
And sir, my first question is that basically Innovation Turnover Index has shortened dramatically in Q1 versus the last couple of years. And you have been promising that you guys are working especially [ well yet ] indicated multiple new product initiatives. So my question is, is this sustainable, this [ 18% ] or maybe a range near to this is sustainable? And -- or is it just mainly because of some timing shift out of [ Q1 because of ] some products which are low end and hence, the idea is looking optically higher?
This is my message to the operator that the sound coming is not very clear, not only from the first question, Mr. Varshit Shah, but even earlier the sound coming in is not very clear. Can you make it louder for us? His question is clear to me. But otherwise, it is not good enough.
So responding to the ITI thing, yes, like we said, we have been working aggressively on this front. And again, with our strength on the [ VD ] side front, this is how the Q1 has taken a jump on the ITI index, because this was a very good period for this new product that we had introduced to take position, this ITI index has certainly jumped up. It will correct to some extent through the year. Yet as submitted, the ITI index will now be only going upwards.
And sir, one thing which I observed was that you have increased your gross profit in absolute terms, which I think has come as a result of ITI because I think the volumes Y-o-Y would have been lower, [ tight lower ], if I'm not wrong. So this is purely on account of change in mix and this is reflecting an -- am I connecting the dots, right?
You see, in terms of percentage, GP declined, but absolute, you're right.
Exactly. So absolute has grown. So it has to come from either volume or product mix, there's only 2 ways to increase absolute GPs.
Yes, it is the impact of the product mix definitely.
Product mix, right. So what is the actually comparable volume growth in case you have -- if you can share it in Q1?
Q1 volume growth is not there. Only the [ price increase ] is here. Value growth.
Understood. So sir, what is the -- since you mentioned, I think that Dhanuka sir earlier mentioned that July has picked up. So do you think that H1 to H1 seasonal volume growth could further industry or maybe could be in the range of 3%, 4% or there might be some challenges to achieve that kind of volume growth number?
Volume growth number in the first half should be either higher single digit or lower double-digit.
So connecting that to your annual guidance of double-digit growth, and it seems slightly conservative because if you're -- even if you achieve mid-single-digit kind of revenue growth -- volume growth, and you can easily at 13%, 14% revenue growth given that you've taken price hikes?
Yes, absolutely right.
[Operator Instructions] We have our next question from the line of Viraj from SiMPL.
Just a couple of questions. [ Honestly ], I didn't understand the explanation on gross margin compression. So was it [ new due to the RM ] pressure or it was largely due to the product mix? And any perspective you can share in terms of how much of the raw material cost inflation has been passed through in the market? That is one.
My request, again, to the operator, the incoming sound is not very good.
Mr. Viraj. I'll try increasing the volume. Can you also speak a bit louder, please?
Mr. Viraj, which is around the explanation on GP. And so we'll get that answered and then come to your second question, sir. Please, could you repeat your question?
My question was the gross margin compression, which we saw, was it largely only due to product mix or there was an element of raw material cost inflation. And in that perspective, we can explain, which is -- what are the drivers for -- it has been a larger factor behind the compression and the RM inflation which we've seen across industries, how much of that has been passed on in the market?
Yes, you see it is the impact of both, one portion because of the RM inflation, which could not be possible fully to the consumer. And it is slightly compensated because of the product mix. If you see product mix have not been better, GP as far as it could be around 300 basis points on all.
Sorry, can you repeat the last part. GP what…
The reduction in GP could be more than 300 basis points.
You mean, it's not for the product mix. Yes, you mean it is not for the product mix, the GP contraction could have been 300 basis points?
Yes, yes. Yes, that's right.
So any action on the pricing front, which would have taken in the second quarter to just recover the RM inflation?
You see we have demonstrated that ability in the quarter 1 itself, we have been able to pass on to a great asset. However, in quarter 2, we are expecting to -- we should be able to pass on fully.
Second question is on the other expenses. We've seen a sharp jump year-on-year. So are there any one-off in that? I mean anything you can share what is [ driving to them ]?
You see, if you compare from the previous year, absolutely, right. But you see you will realize you will appreciate because of COVID in the June '20 and June '21, many expenses are not incurred because of COVID like traveling and vehicle maintenance expenses, regular meeting, formal meeting, distributor meeting. So these expenses were low in the year '21 and June '20. But if you compare from June '19 or June '18, so they are in line with our expectations. They were going to increase because other thing is normalized. So this year, the full travelling is happening for the dealer meetings, formal meetings, dealer meetings are happening. So you see…
So this is a normalized cost base.
Yes, it's normal right now. You can see. That's right.
And on the Dahej project, can you just provide an update on when do we expect the commissioning?
Commissioning, as MD has communicated, we are expecting the production in March '23.
[Operator Instructions] We have our next question from the line of Rohit Nagraj from Centrum Broking.
Sir, first question is again on the Dahej project. So how much of CapEx are we envisaging to capitalize during this year? And whether we will be able to fund the entire CapEx through internal accruals? Or we'll have to take some debt for the same?
You see so far now we are not actually taking any debt. We are actually making the entire CapEx from the non-accruals. And in the current financial year, we are expecting a CapEx of around INR 130 cr for Dahej.
Sir, second question is in terms of our guidance. So on EBITDA, we have said that EBITDA, we are expecting almost similar growth in line of previous year. But if I check on a year-on-year basis in FY '21, our EBITDA was about INR 269 crores, and FY '22 was INR 263 crores. So are we expecting kind of a flattish EBITDA for FY '23?
We are saying the EBIT should be in terms of percentage in line with FY '22.
Okay. So we had margins of closer to about 18%, we'll be having similar kind of margins for FY '22 as well?
Yes, [ absolutely ]. You're right.
Right. And on the ITI, during first quarter, our ITI has jumped significantly, but it seems that the volume growth, as you indicated, has been not there. So is it the new products which are coming at a higher price or these are relatively high margin and high pricing product because of which the ITI has jumped significantly.
You see in the case of the products, which are covered under ITI, they have delivered a significant growth value as well as volume. But when we are saying there's no volume growth company [indiscernible] but the product selected in a very few [indiscernible] are coming under the current year introduction for 3 years. So those products have delivered a good volume growth.
Sir, just last clarification on the new product launches. So if I heard it rightly, we have launched Zanet, Cornex and [ Bedside ], and we have received 3 approvals for 9(4) herbicides and one for PGR, which probably we have not launched. Is that -- is the understanding correct?
So these 3 products that we talked about Cornex, [ Bedside ] and Zanet. These are the 3 9(3) registrations we have got. And in Q1, Cornex was launched and activated, one more herbicide, which is terminal was also launched in Q1 and activated [ Bedside ] Zanet and other products will be commercialized in Q2.
And the 9(4) products?
It'll also be launched in Q2.
So in total, will be -- I mean, as of today's pipeline, we'll be launching about 8-odd products, 4 of these [indiscernible].
5 for sure, 2, we have launched, 3 more we will launch. So at least 5 for sure.
[Operator Instructions] We have our next question from the line of Saurabh from Asian Market Securities.
Sir, if you can talk about the channel inventory at the end of the quarter? And how has been the liquidation month of July?
Channel inventory is not high because Dhanuka don't believe in making placement with our distributor. Channel -- the inventory is definitely high with the company because the month of April and May were good when the company was having growth, but June has gone bad because of the delay in monsoon and some sales of June has been postponed to the July month. So that's why the inventory levels with the company are higher, but the channel inventories are in line with the industry norms only.
Sir, the raw material cost inflation. So have you passed on now with the price coming down, you will take the price correction in Q2? And also if you can give -- is there any specific crop where the passing of the higher cost is difficult compared to the other crops?
So like our CFO already said that we have tried to pass on the cost save that was possible in Q1. And Q2 also, whatever market can absorb, we will pass on the cost increase as well. In the products where there is a price correction, of course, that cannot be passed on. In terms of the crops which are able to absorb is depending upon the commodity prices and probably in the last call, we were talking about wheat prices have already gone up, paddy prices will also go up. And in July, we are already witnessing that. So practically, commodity pricing going up means, if paddy can absorb, which is the largest consumer of agrochemical in the country today, all other crops commodities are on an upswing. So the cost absorption by the crops is very much there. It is in the competition and price correction that we may not be able to pass on the cost to the partner.
Sir, last thing on the other income side. So there's a jump in other income. So is there any onetime element there?
Yes, it is onetime element. It is because of the [ stealing ] of 2 properties of company.
So what was the contribution?
Contribution is around [ INR 12 cr ].
[Operator Instructions] We have our next question from the line of Rohan Gupta from Edelweiss.
Sir, first question is on a significant increase in stock. So you mentioned that definitely, after the solid growth in April and May, June was muted. And that is the main reason -- prime reason that there has been significant increase of almost close to INR 100 crore increase in stocks. Is that getting reflected, sir?
So there are other reasons also. You see the prices were increasing because of the Chinese region, the number of factories in China were closed down. Shipment was not taking place. Shanghai port was closed for 1 month, and there was a delay in getting the consignments from China and the other countries from Japan, et cetera. So in anticipation of a good season, we basically built up the inventory intentionally, considering the price rise and loan availability like situations in the coming season. We geared up for the season, but unfortunately because June has gone bad. So we left over with the inventory. Some inventory was created intentionally for the July, August, et cetera, because as explained earlier, but some inventory has been left out because of the wet season of June month. But we are confident as July has gone very well, we hope that we will be able to come to the normal inventory situation by the end of the second quarter.
And sir, since we have seen some softening of the raw material prices. So the inventory buildup, which has taken place in the last quarter. How do you see that the current pricing scenario, you definitely mentioned that you will be able to match the last year EBITDA margins, what we have [ ended in FY '22 ]. But is these prices has -- I mean, with the weakening in the prices of raw material and softening in the prices in the market and since we are sitting on a huge inventory, do you see that the margin pressure still will be very much visible in Q2 also because of the high cost inventory?
I don't foresee much problem because of the reduction in prices because the reduction is nominal. It's not a haptic reduction. The price increase was very high, but the reduction in the prices is nominal. So I don't foresee that it will have major impact on the EBITDA margin. But definitely, as Mr. Rahul has just informed that wherever the price correction has taken in the raw material prices, it will be difficult to pass on the cost to the consumer. So there, the cost has to be absorbed by the company, but we are basically working in approach with more trust on product sales. So that way, our product mix will basically take care of the erosion in the margin in some of the generics where the price correction has taken place.
And sir, how is the availability of the raw material now? And in terms of the logistics challenge, which was pretty much there from China almost a couple of months back. So if you can just give some sense that how the logistics is working out and especially the shipments from China and raw material availability, how it is now?
It is much better in comparison to the initial April, May, et cetera, and the shipments are also taking place. There are some delays happening in getting that consignment earlier from China, we used to get the containers in 15 days' time at [ Narasapur ], but now it is taking around 20 days' time. So some time has increased. But otherwise, the supply situation is normal, and we are getting the regular supplies. There is a scarcity of -- in some of the products, but that is always going to remain that some products will always be in a scarcity like [ proper guide ] is one product, [indiscernible] is another product. So these are in short supply.
Sir, third question is on this market scenario though you mentioned that August, July has seen a significant pickup in the demand because of the monsoon activities have picked up. How do you see, sir, this farmers position in terms of cash profitability, though we understand agri-commodity prices, still remains buoyant, but definitely, there has been some weakness, I think that compared to last 2 to 3 months. So how do you see that the farmers' cash position is right now and their ability to spend on a crop protection, how do you see that the current scenario?
Before I attempt on that one, sir, when you said weakness, so you were talking about weakness of what?
Agri commodity prices like that we have seen like soyabean, and some crop prices have weakened in a global market also in Indian markets also a little bit in last 3 months.
And which commodities are those?
So if you look at the global agri commodity prices, sir, I think that the cotton definitely has weakened in a global scenario. And so as the corn also has seen some weakness in a global scenario, when wheat prices also have seen some weakness in the global scenario. That's what I was just referring that are we also seeing that the domestic markets also are seeing and how is the farmers' cash profitability?
Right. So sir, my understanding is that the commodity prices are reasonably high enough for these farmers and the agricultural investor in the rural world to be buoyant about it. Well, the wheat price correction, if any is like is still much better than what it was before the Ukraine situation and all other commodities are really way ahead of their normal benchmark levels in the country. In fact, because of the reach shortage, we were anticipating that paddy prices will also jump up with the global demand coming in, and we are witnessing paddy price jump significantly happening in July, especially the Middle East demand coming in.
Overall speaking, the commodity prices remain at a level where farmers should look forward to a good harvest and a good income. Now when -- in the middle of monsoon, farmers mostly have to depend upon rural credit to invest in fertilizers and in agrochemicals. And the rural credit system, both structure and unstructured is as of now, buoyant and capable enough of taking required needs of farmers credit requirements. So farmers will be meeting this investment requirements from the credit which he takes.
Sir, just last bit if I'm allowed. And Dhanuka had mentioned in his opening remarks about this online platform like AgroStar and DeHaat and all. So the sales and you providing your product through these channels online platform itself. So already, do you see that there is an emergence of such online platform in a rural area and a creation of a third market -- the third-party platform that can affect the existing distribution system, like how that you company have a dealers and distributor network. Do you see that, that in next 3 to 5 years, there can be significant change with this emergence of online platform? Or it will be just only very miniscule and how you are gearing up for that.
Right. So though not in next 3 to 5 years, but on a longer horizon, farmer would be shifting towards technology use for resolution of its problems and probably for its procurement needs also. And we are witnessing that shift, having started at a very small level already. Yet, there are 2 aspects to it. One, that still only 35% of the agriculture remains chemically protected. So a large portion, 65% being not chemically productive, there's a huge scope of expansion and consumption increasing in the country. Multiple channels will be active to service the farmer and deliver the last mile rural connectivity.
Technology platforms like AgroStar and DeHaat are going to be such platforms offering such solution to the farmer, yet brick-and-mortar is going to remain relevant for a relatively longer time to come. At Dhanuka, we are looking forward to these new players as possible partners of growing the business at the same time, not discounting the opportunity of direct reach to the consumer and face-to-face interaction through our Dhanuka doctors and through our trade retailers. So it is -- right now, the situation is emerging for us to learn. We are playing on both the sides, and we are gearing up to play aggressively on the technology front.
[Operator Instructions] We have our next question from the line of Bhavya Gandhi from Dalal & Broacha.
Yes. Sir, I just wanted to know what is structurally wrong from FY '17, we had gross margins of 43%, 44%. We are down to 36% in FY '20. So is it because backward integrated companies are able to price the products better? Or is there something else?
[indiscernible] the advantage of the carryover inventory largely. And over a period of last 4 years, because of competition, there is an impact on the gross margin undoubtedly, the fierce competition has increased in generic market as compared to [indiscernible].
And sorry, if it's a repetitive question. Just wanted to know the asset turnover for Dahej facility which is coming up?
Could you repeat your question? Dahej, what are you asking?
Wanted asset turnover for Dahej facility, which is coming up in FY '23?
FY '23, there is no revenue from Dahej.
No revenue from Dahej. And for FY '24, what kind of asset turn are we looking at?
FY '24 would be the first year. So we are expecting a revenue of around the beginning in the first year is around INR 50 crores.
And just wanted to know if you could share cash flow from operations for this quarter. I know you don't give the balance sheet for this stuff, but at all you could provide that figure.
Which figure you want?
Cash flow from operations for this quarter.
Cash flow from operations this quarter we'll communicate to you. We'll send on e-mail.
[Operator Instructions] We have our next question from the line of Varshit Shah from Veto Capital.
Sir, my question is on how you see the equilibrium price on the technical side. So will you -- as we mentioned earlier that largely prices are stable or some bit moderating in certain cases. So do you think that the demand supply equilibrium is largely now established at the global level for most technical and now the incremental rate of change will be more a function of our [ theory RM ] rather than the disruptions on the supply chain front?
I think for supply chain, equilibrium assessment is too early because the situation has just eased in July. So we really don't know if this each situation will continue, #1. #2, the news flowing in from China is not very clear that this ease of supply chain is just because of the stock inventory in the logistics or at the back end, also everything is smooth. So we absolutely understand that this is the inventory which was stuck in pipeline, which is now flowing in out of China into India and globally. Yet this is the complete picture or there is more to it. So that is yet to be discovered, which will help us understand the supply chain situation in a better way. So this is just an emergence of one part of the story and not be complete.
Talking about the global level, I think so the vagaries of weather are playing a role in the corn and [ sarin ] markets globally, and that will really decide the demand side, which is not very clear as of now. Even in India, the demand side is just opening up. So we are yet to discover how it will open up completely. Paddy is looking up. Cotton opportunity is robust. Soyabean opportunity, groundnut opportunity is robust in India. So how the demand will pan out all India, how the demand will pan out globally is yet to be seen. Talking about equilibrium, could be too early.
Sure. And on the domestic front, I mean, we have seen a lot of companies adding capacities, especially on herbicide side, fungicide side across the board. So from an alternative supply chain perspective, is India kind of stepping up at least in terms of supply bit maybe a slightly higher cost. But do you see that these kind of [ capacitizations ] could lay a stronger foundation for the future 3 to 5 years? I'm asking a very, very broad question about pertaining to Dhanuka itself.
Yes. So we can make it broader in terms of looking at the chemical industry in general. So India is certainly emerging as a chemical hub, chemical manufacturing hub from the agrochemicals perspective, from fine chemicals perspective, for pharmaceutical perspective. So chemical is looking buoyant. Chemical industry is looking buoyant in terms of India emerging as a seller, large seller on a global front. Now a lot goes to the credit of government pushing the Atmanirbhar Bharat campaign and then supporting with PLIs on various fronts.
As also is the demand supply arbitrage which came from COVID-linked situation in China, supply chain issues coming in from China. Yet for [ India 3 months ] as a leader and should be top in the same language, same sentence with China is a long way to go. Now if we were to expand this discussion, then long way to go means that India has a long distance to cover at the same time, a huge opportunity to encash.
Sure. So if I were to just step this question a bit in terms of the competitiveness of manufacturing. I mean, since you're also developing a lot of projects at Dahej in terms of molecules. From a comparable landscape perspective, has that bridge narrowed at least in a lot of molecules, if not all. And typically, we see that molecules where there is very high complexity involve -- process [ involved in attendance ] to look better on the cost. So at least in those molecules, do you see that the gap is narrowing between the cost of production between India and China? Or I think that [indiscernible] trying to settle down on this COVID and then see as we assess how it stands out.
I know one thing for sure that cost in China has significantly gone up over the last 3 years. And one of the factors towards that was environmental regulations being strengthened in China. And the elasticity of campaigns -- monthly campaigns run by the government there. Now how the cost is panning out is yet to be defined. Yet if we look at -- if we generalize this to an extent that a lot of capacity is coming up in India for different chemicals, Dahej just being one example, many chemical plants are coming up in India. And there is a lot of buzz around investments in chemicals, petrochemical industry, fine chemical industry, that buzz certainly talks of one thing that the demand from Indian market is absolutely existing. How much is the gap between Chinese and Indian cost or how much is the gap between Chinese and Indian reliability? Are the 2 factors, which India can leverage as a country. So that is something will vary either industry by industry or if there is a country advantage here, then that becomes too macro to be responded to.
Correct. Correct. Absolutely. Maybe I'll take this over a cup of coffee with you some day.
Absolutely. Most welcome, sir.
We have our next question from the line of Rohit Nagraj from Centrum Broking.
Sir, again, on the Dahej project, so we had earlier indicated that we'll be having the formulation plant, 1 insecticide NPP and 1 NPP for bedside plant. However, we were constrained from the customer side because the plant was not ready and obviously, they were awaiting the entire commissioning of the plant. So any positive vibe from the customer in terms of orders or any headways from that point?
I'm wondering on this question because we never brought in anything in reference to the customer here. So no relation to that, sir. The project -- Dahej project is on track in terms of its commissioning plan of March '23, and that continues to be there.
Right. Maybe I was -- I did not ask the right question. So basically, we -- earlier, we were an asset-light model, and given that our customers are situated outside of India, and they want someone to manufacture or to manufacture their products. We have now put up this facility. And probably given our long-term relationships, we will be able to capitalize on those relationships to get such kind of orders. So I was just referring from that perspective that any customers who have approached us now that we have clarity in terms of when the plant is going to be coming up and we will be able to serve them better from that perspective?
Right. Now I got your point. So yes, when we are pushing up this Dahej facility, then it is multidimensional. Of course, we are setting it up for -- to some extent for captive consumption then for domestic and export market and also for toll manufacturing for our various global opportunities. And those are like in talks. Some of them are moving forward with different speeds. And as and when they shape up along with the Dahej projects designed, then probably would be a good time to bring to this forum.
So one, again, last question in terms of guidance. So the -- based on the guidance on revenue and EBITDA and what we have done in first quarter, it seems that we'll have to make about average INR 75 crores EBITDA for the next 3 quarters. So what gives us confidence that we'll be able to achieve it? Is it based on the new products, which are introduced based on the ITI, which has gone to about 18% during Q1. So what are the parameters with which we are so confident that we'll be able to achieve this particular guidance?
You see we are quite confident in terms of the seasonality. If we are confident of delivering the 2-digit growth. So I'm sure -- should be able to deliver that much of our EBITDA.
We have our last question from the line of V.P. Rajesh from Banyan Capital Advisors.
Yes. So I was saying that most of my questions have been answered. Just wanted to ask about your view on the monsoons in our investment and September. Are you seeing them getting better, and therefore, by the time season ends, it will be more normal? Or you see some deficiencies in these territories?
Sir, you are equally dependent on IMD and Skymet, as are we. So please don't take on monsoon for [indiscernible].
Because you have floated to the ground sir, so that's why I…
Being where we are, we are really happy the way Monsoon has exhibited its performance in the month of July. That has been really heartening. The soil moistures and water tables have gone up. The sentiments in the markets have really boosted. Inventories have really moved. Farmer is looking forward to a good crop. So all that is really turning out favorable. We are looking out to a very robust Q2, and we are very positive about it. Some of the indicators are that monsoon will continue to be good in the month of August and September. Although East India might face some slowed or delayed range still. So East India is lagging behind in general, and the forecast is it might still lag behind somewhat. Other than that, the country is expected to continue receive good monsoon rains.
And my second question is on the paddy prices. You said that they have shot up. So do you see them pulling off if the monsoon is good? Or do you think the sowing season has already passed for that crop and therefore, the prices will remain high.
The sowing season is largely past for majority of the country. However, South and East is still there are sowing opportunities, #1. #2, in general, India has been a paddy excess country. We normally have excess paddy. So overall, farmer can benefit if the prices remain high at the time of selling also or India is able to offload a large chunk of excess inventory in the global markets. So both situations India can really benefit. The farmer can really benefit.
I would now like to hand the conference over to Mr. Manish Mahawar from Antique Stockbroking Limited for closing comments. Over to you, sir.
Yes. Thank you. On behalf of Antique Stock Broking, I would like to thank the team of Dhanuka Agritech for providing us an opportunity to host the call. Dhanuka, would you like to make a closing comment, sir?
Yes, Manish. To summarize, Dhanuka continues to demonstrate its ability to overcome challenges and more stronger despite uncertain business environment. We will aggressively roll out new formulations in the upcoming quarters and would ensure that it reaches to the consumer. I reassure our stakeholders 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. I once again assure that the second quarter is going to be a fantastic quarter for the company and the industry because of the good rainfall and July has shown the positive path ahead. So we expect that similar performance, we will be able to do in August and September month and by end of September, we will be able to show much better performance. Wishing you all the health and safety. Thank you very much.
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.