Dhanuka Agritech has received a significant GST demand order from tax authorities, marking a major regulatory challenge for the agrochemical company. The Central Goods & Service Tax department in Ahmedabad has issued a demand order worth ₹121.32 crore against the company.

GST Demand Details

The substantial tax demand has been issued by the Central GST authorities based in Ahmedabad. The order represents a significant financial exposure for the company, requiring immediate attention and strategic response from the management.

Company's Response and Position

Dhanuka Agritech has strongly contested the GST demand, expressing its disagreement with the tax department's assessment. The company management believes the demand is unjust and not based on proper evaluation of facts and circumstances.

Legal Strategy and Next Steps

The company is actively reviewing the demand order and exploring various legal remedies available under the GST framework. Management is considering filing an appeal against the order to challenge the department's findings and seek relief from the substantial financial demand.

The appeal process will allow the company to present its case before higher tax authorities and provide detailed explanations regarding the disputed tax liability. This regulatory development requires careful monitoring as it could impact the company's financial position and cash flow management in the near term.

Dhanuka Agritech Limited , a leading Indian agrochemical company, reported a decline in its financial performance for the second quarter of fiscal year 2026, primarily due to adverse weather conditions affecting crop patterns and agrochemical demand.

Financial Highlights

Dhanuka Agritech's Q2 FY26 results show:

All figures in crores of Indian Rupees

Key Factors Affecting Performance

1. Weather Disruptions: Abnormal rainfall distribution led to significant crop losses and reduced agrochemical demand.
2. Herbicide Segment Impact: The herbicide segment was most affected, contributing only 9% to the total turnover.
3. Biostimulant Sales: Regulatory hurdles impacted biostimulant sales, resulting in a revenue loss of over ₹20 crores.

Product and Operational Updates

• New Product Registration: Dhanuka Agritech received registration for Ipflufenoquin for paddy crops.
• Dahej Plant Performance:
  • Revenue: ₹22 crores
  • EBITDA: Marginal loss of ₹0.46 crores
• Bayer Product Royalty: ₹4.5 crores in Q2 FY26

Segment-wise Performance

The company's product category-wise share of turnover for Q2 FY26:

• Insecticides: 46%
• Fungicides: 29%
• Herbicides: 9%
• Others: 16%

Geographic Distribution

Zone-wise share of turnover for Q2 FY26:

• North India: 30%
• East India: 13%
• West India: 24%
• South Zone: 33%

Management Outlook

The management expects flat revenue growth for FY26 due to weather challenges and a delayed rabi season. However, they remain committed to their growth plans and introducing new products.

Future Prospects

1. Rabi Season Outlook: The company anticipates an upbeat rabi season, supported by good soil moisture and water availability in reservoirs.
2. Digital Initiatives: Dhanuka Agritech is ramping up its digital communication efforts, including social media presence and online farmer training programs.
3. Product Pipeline: The company plans to introduce new products and expand its portfolio in the coming years.

Despite the current challenges, Dhanuka Agritech remains optimistic about the long-term prospects of the Indian agriculture sector and is positioned to capitalize on future growth opportunities.