Dhanuka Agritech Limited (NSE: DHANUKA) Q3 2025 Earnings Call dated Feb. 05, 2026
Corporate Participants:
Rahul Dhanuka — Managing Director
Analysts:
Raju Dalloy — Analyst
Prashant Biani — Analyst
Saurabh Jain — Analyst
Vijud Alai — Analyst
Viraj Kacharya — Analyst
Ketan Shawla — Analyst
Parth Mehta — Analyst
Archit Joshi — Analyst
Rohit Nagraj — Analyst
Rajat Setia — Analyst
Amit Khetan — Analyst
Ketan Shawla — Analyst
Viraj Kacharya — Analyst
Presentation:
operator
Sam. It. Sa. Sam. Sa. Sa. Sa. It. Foreign.
operator
Ladies and gentlemen, good day and welcome to the Q3 and 9 months FY26 post results conference call of Dhanuka Agritech Limited hosted by Antique Stockbroking Limited. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Raju Dalloy from Antique Stock Broking Ltd. Thank you and over to you sir.
Raju Dalloy — Analyst
Thank you. Good afternoon everyone. I’m pleased to host today’s earning call of Dhanuka Agritech. We have the leadership team represented by Mr. M.K. dhanuka, Chairman, Mr. Rahul Dhanuka, Managing Director Mr. Harsh Dhanuka, Executive Director and Mr. Vika Bansu, CFO on the call without any delay I would like to invite Mr. M.K. dhanuka to start with opening comments post which we will open the floor for Q and A. Thank you and over to you sir.
Rahul Dhanuka — Managing Director
Thank you Riju. Good afternoon ladies and gentlemen. I am M.K. dhanuka, Chairman of Dhanuka Agritech Limited. Welcome you all to the Q3FY26 earning call. I have with me Mr. Rahul Dhanukar, Managing Director Mr. Harsh Dhanuka, Executive Director and Mr. V.K. bansal, CFO of the company. As you are aware, Dhanuka Agritech is a leading Indian agrochemical company. Dhanuka is working with the vision of through agriculture. We have a pan India presence in all major states to reach out to more than 10 million farmers with our products and services. Dhanuka’s key focus has been on introduction of novel chemistry and extensive product development distinguishing us from the rest of the industry.
Over the last couple of years we have set up two research and technology centers to enhance our focus on innovation and research. One of the centers is focused on applied chemistry and working for establishment of new products new formulation development. The second laboratory is focused on innovation in chemical synthesis for generic and late stage patented products. To support our investment in innovation, we have significantly enhanced our regulatory team to speed up our India international registration initiatives providing us faster access to international markets and quicker introduction of new products. Danuka has international collaboration with 10 leading global agrochemical companies from Japan, US and Europe which helps us to introduce the latest technology in India.
With four manufacturing units and 41 warehouses across India, we cater to around 6,500 distributors and 80,000 retailers. Dhanuka has a strong sales and marketing team to promote and develop new products. During this quarter agrochemical demand remained weak due to stressed demand drivers, weather issues, low crop prices leading to industry wide volume decline Farmer interest reduced in making investments in crop production chemicals due to lower crop prices. South and West India saw sharp demand declines while east and north remained stable. Indian farmers delayed purchases due to significantly extended rainfall and weaker commodity realizations. Lower farm incomes reduced spending on crop production products impacting domestic sales.
Further, I am happy to share that we have commercialized the second product from Dahej Plant in Q3FY26. We are working for making Dahej operations ebitda positive in FY27 and try to reach 80% capacity utilization of the existing plant. Also we are in the final stages of working for the business plan for MPP2 and will be concluding the same within this year. Now moving on to the financial performance for the last quarter our revenue from Operations stood at Rupees 409.92 crores in Q3FY25 26 versus Rupees 445.27 crores in Q3FY24 25. EBITDA stood at 58.66 crores in Q3FY2526 versus Rupees 75.56 crore in Q3FY24 25 Profit After Tax stood at Rs.
40 crores in Q3FY25:26 versus Rupees 55.04 crores in Q3 of FY2425 FY2526 with two straight negative quarters has been a blemish on an otherwise decent performance from Dhanuka over the years. I can assure the stakeholders that the bad phase is over now and now in future it is going to be good only. I would like to assure our shareholders that and our stakeholders that our strategy is well laid out with continuous extension in rural market penetration, new product introduction, technical manufacturing and international market expansion. We are confident on delivering our long term objective of achieving double digit CAGR zone wise Percentage share turnover for Q3FY25 26 North India 25% East India 11% West India 30% and South India 34% Product category wise percentage share of turnover for Q3FY2526 Insecticides 28% Fungicides 21% Herbicide 37% Others 14% Dhanuka considers itself responsible towards securing the farmers welfare and preserving food security of the Nation.
We continue to strengthen our association with the agriculture, universities, Kishi, Vigan, Kins and other critical institutions to impart knowledge and latest technology to the farmers. Thank you very much for your kind attention. And now we would like to open the forum to take the question. Thank you.
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question is from the line of Prashant Biani from Elara Securities. Please go ahead.
Prashant Biani — Analyst
Thank you for the opportunity. Sir, how is the current demand scenario for agrochemicals? Why? We understand Q3 was weak. But how is Q4 and what is your expectation from Kharib season?
Rahul Dhanuka — Managing Director
Right. So Q4 has really started well. January has done well for us. South Indian Paddy, East India paddy is looking really good. Wheat crop has been good and the relevant consumption of wheat herbicide has happened extending from late Q3 to early Q4. So all that is looking bright. We are looking into a good harvest of Rabi and then getting into a good Kharif. Right now it will be too early to kind of indicate anything for the upcoming Kharif. We would still be waiting for weather forecast coming in late March and early April before we really firm up our Kharif plans.
Prashant Biani — Analyst
Right? And sir, out of the total top line, how much is the contribution from technical sales and revenue from the molecules of Bayer that we had bought both in Q3 as well as nine months?
Rahul Dhanuka — Managing Director
You see revenue from Bayer molecule in the balance sheet of Dhanuka is around 25 to 27 crore. Right? And with regard to second part of your question with regard to technical things is is around.
Prashant Biani — Analyst
50Cr. Sir, I presume this will be for nine months for the quarter. How much is it.
Rahul Dhanuka — Managing Director
See in technical sale is not much. In quarter three is is hardly around 3,4 crore. And with regard to this buyer product, this was major in Q3. Yeah.
Prashant Biani — Analyst
Sir, this 25 to 27 crore is all top line or some of it is net economic benefit.
Rahul Dhanuka — Managing Director
It is the top line. Net economy benefit is separate.
Prashant Biani — Analyst
Okay.
Rahul Dhanuka — Managing Director
Which is around 6cr in quarter three and overall is around 98.5cr in nine months.
Prashant Biani — Analyst
And so from here on the net economic benefit will continue to flow or it will stop money.
Rahul Dhanuka — Managing Director
It will definitely stop. The movement will take the entire control. The net benefit Will definitely will discontinue. So in the from the next financial year, which is FY27, some of the exports it will start appearing in our balance sheet. And by the end of the financial year I think we’ll be controlling the overall revenue. Which means in the year FY28 there should not be any net development benefit. But yes, in next financial year net economic benefit will be there but significantly lower than the current year.
Prashant Biani — Analyst
Right.
Rahul Dhanuka — Managing Director
Next year what could be the contribution from technicals as well as these two molecules of biological.
Prashant Biani — Analyst
In the all balance sheet? Yes, so you see that that is under process. We see the team is working with regard to the export sale. So it is little difficult to estimate. I think the progress is on. We will be able to assess in a better way by the end of the March.
Rahul Dhanuka — Managing Director
Even for technical. Technical sale would be sort of in line with this current year. Maybe 10, 20% growth.
Prashant Biani — Analyst
And how much is the current cash on books?
Rahul Dhanuka — Managing Director
Current cash on books. Cash cash and liquid investment is more than 250cr.
Prashant Biani — Analyst
Okay. And so just lastly, how much was the sale from biologicals in FY25 and how much was it for nine months? 26.
Rahul Dhanuka — Managing Director
Biological almost negligible in 26 and in 25 it was less than 2 crore.
Prashant Biani — Analyst
Okay. Okay sir, thank you so much for your time.
Rahul Dhanuka — Managing Director
Thank you.
operator
Thank you. The next question is from the line of Saurabh Jain from hsbc. Please go ahead.
Saurabh Jain — Analyst
Thank you for the opportunity. Will it be possible to kind of indicate or quantify what could be the impact negative impact of sales returns for you in this quarter and same number say last year.
Rahul Dhanuka — Managing Director
You see sales return this year is almost equal to the last year but slightly lower than by 2 crore. This in Q3 as compared to the Q3 of the previous year.
Saurabh Jain — Analyst
Okay, so sales returns have not really kind of increased for you in this quarter and in this quarter.
Rahul Dhanuka — Managing Director
Yes, that’s right.
Saurabh Jain — Analyst
Okay, understood. And correct me, biologic, you’re saying there is no contribution for you in this quarter. I’m a bit confused on the biologic side. I thought it contributes almost 9 to 10% of your revenue.
Rahul Dhanuka — Managing Director
Biological no. 1 is the category PGR category biological is by stimulant or you are saying biological.
Saurabh Jain — Analyst
I mean the products which are under, you know, regulatory challenges.
Rahul Dhanuka — Managing Director
What is that contribution product under regulatory changes? In this category we were having a contribution of around 19%. But this year the impact in our Q3 is around 15 crore and 9 month is a impact of 49 crore on account of the IC4 product by stimulant stub sale basically.
Saurabh Jain — Analyst
Okay, so you lost 50 of sales on a nine month basis because of these.
Rahul Dhanuka — Managing Director
That’s right.
Saurabh Jain — Analyst
And how much of it is normalized. Now and what should we expect on this side in the future on the regulatory issues?
Rahul Dhanuka — Managing Director
So the regulatory framework is in place which is really good for the organized players like Dhanuka. So our products are under testing and approval stage. We are quite hopeful that will be receiving our approvals by end of this quarter and we’ll be up and running with fresh set of biological offerings, biostimulants offering in this new regulated regime in Q1 of next year.
Saurabh Jain — Analyst
But are you confident that you will be able to get speedy approvals? So that kind of kicks off for you in the first quarter? I’m trying to get a sense how much of business has already normalized and you know what can be the expectations for FY27 on that side.
Rahul Dhanuka — Managing Director
When you say how much of business is already normalized? I don’t get that. But yes, we are tracking our approvals and we are hopeful of getting out of our, you know, at least three products approval in this quarter so that we can launch by Q1 ending.
Saurabh Jain — Analyst
Okay, understood. So expecting that almost three out of four molecules you will be expecting it to normalize in first quarter. Yes, understood, thanks. And also I wanted to, you know, seek your comments around the recent changes in the China policy when they ending export rebates on some of the technicals of the generic molecules. So what would be your view on that side? You know, does it make a, you know, problem for years like Danuka because some of our purchases are linked to China. How are you strategizing to kind of handle this, this issue in industry?
Rahul Dhanuka — Managing Director
So you see this is China’s internal approach. This will certainly increase the price of some of the commodities for which export rebates have been reduced. Since it is an industry wide phenomena, it will not significantly impact either our sourcing or our competitive edge in the market. I don’t see any material impact on our sourcing out here.
Saurabh Jain — Analyst
Okay, so you would assume that industry will be able to pass on these hikes in India? Because I thought becomes difficult and challenging to pass on the high prices and if it happens, it happens with a lag.
Rahul Dhanuka — Managing Director
So I will not comment about the industry. Here at Dhanuka we kind of significantly follow this practice of passing on the increased cost as much as possible downstream. We have mostly done it almost all past years and quarters and we are pretty hopeful we’ll be able to do that.
Saurabh Jain — Analyst
Okay, possible to also tell us what is the revenue exposure that you would be having which is linked to some of these products.
Rahul Dhanuka — Managing Director
Actually most of these products glufosinate we are already buying from India. We are not sourcing from China Glyphosate. The export benefit was already removed in the past year. So there will be no impact. And the other products are not confirmed which will have an impact.
Saurabh Jain — Analyst
Okay, sure. Thanks. I’ll get back in the queue.
operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and 1. The next question is from the line of Vijud Alai from antique stock broking. Please go ahead.
Vijud Alai — Analyst
In terms of when you said that income from the bear above 6 crore for this this quarter. So this is mainly the royalty income that you have mentioned. The 6 crores.
Rahul Dhanuka — Managing Director
It is not royalty. It is net economic benefit. It’s like royalty, not the royalty actually.
Vijud Alai — Analyst
Understood, understood. And the. And the sales of the revenue that you have mentioned this year maybe for the 9 month 25, 27 crore. So this is like earlier you indicated that the majority part of the revenue came from the domestic market. So is it still the domestic market contributing this revenue from the bear product 2527 crores or some some part of this product? This revenue came from the outside of India.
Rahul Dhanuka — Managing Director
No, no, it is from India only.
Vijud Alai — Analyst
Okay. And the regional transfer for the overseas market. So when you can expect that and how is the timelines that are moving?
Rahul Dhanuka — Managing Director
It is in process for various countries and many of the applications are in process. So in 27. Sorry, in 26 we will see a lot of transfers happening. And even without the registration transfer the sales will begin once the distribution appointment gets completed and the sales moves to the distributors. Dhanuka Distributors.
Vijud Alai — Analyst
Understood. So for the overseas business we can expect the transfer or the revenue under Dhanuka’s book might happen from the Q1 or Q2 of 27. Right? Yeah. Q1 surely understood.
Rahul Dhanuka — Managing Director
And in terms of the guidance, if I look at your nine month numbers and like you have mentioned in the PPT that the like we have maintained the guidance what we have earlier communicated. So if we look at in terms of run rate. So our margins in terms of EBITDA is roughly around 18% as of nine month. And if I look at last year Q4 number. So there were one one one off impact of the. Of the. Of the. Of the benefit that we have got from our Japanese or some. Some partners. So despite that we are expecting that our margins to be 100 bits decline from the last year level.
So how are you confident of making like 24, 25% EBITDA margin in 4Q. So you see we are very much confident in terms of the EBIT. Our EBIT will be negative in line with the nine month. In nine months our EBIT negative is by 113 basis point. So in overall annual basis we are expecting the similar decline 100 to 110 basis point.
Vijud Alai — Analyst
Understood. And so in terms of new product launches so far. So how many product we have launched in. In the. In nine month period?
Rahul Dhanuka — Managing Director
Nine month period we launched. One is Dimkar on Maledio and one is. And one is Burdock. Three.
Vijud Alai — Analyst
Okay, so three we have launched. Right. Okay. Okay, thanks. Thanks for clarifying all the questions.
operator
Thank you. The next question is from the line of Viraj Kacharya from Simple. Please go ahead.
Viraj Kacharya — Analyst
Yeah. Hi sir, just a couple of questions. First is on the biostimulant just to understand what is the key, you know season time for this particular product. So the reason I’m asking is if for any reason you know there’s a delay in approval, you know from the government for registration. So if in case it doesn’t come by Q1 is there a still a possibility we can meet the sales or you think a good part of the season would be lost?
Rahul Dhanuka — Managing Director
The peak consumption time coincides with our peak business opportunity which almost starts by June end say early July goes on through late November. So mostly July to November is the peak consumption. Another round comes up in March with sugarcane.
Viraj Kacharya — Analyst
And when you say biosimilar the total number of products which you will have in the portfolio will be four as of today.
Rahul Dhanuka — Managing Director
Yes, the ones regulated in the regulated environment were four out of which three will be coming through and one would you know which is of animal origin and all that. So that may not be coming through easily or not in near future.
Viraj Kacharya — Analyst
The three would be a larger part of the sales loss which we.
Rahul Dhanuka — Managing Director
The other three constituted more than 80% of our revenue so that would be well placed. In addition to that you would recall we had already launched MyCorrhiza 3 four years back and then we introduced Mycorrhiza super also couple of years back which is a good replacement of biostimulants as far as farmers crop growth opportunity is concerned and Dhanuka’s Micro super brand has taken a good position in the market filling up the vacuum created by absence of biostimulants from Danuka’s own portfolio and of the competition as well.
Viraj Kacharya — Analyst
The second question was sir, if you can give a mix of interfere EBITDA of B2B versus B2C.
Rahul Dhanuka — Managing Director
You see B2B of course the EBITDA is significantly lower than B2C.
Viraj Kacharya — Analyst
So for the quarter gone by, what will be the EBITDA for the daring business?
Rahul Dhanuka — Managing Director
Can you repeat your question?
Viraj Kacharya — Analyst
For the quarter which has gone by, what will be the EBITDA for the dais B2B business?
Rahul Dhanuka — Managing Director
The HDC EBITDA is still negative in Q3 it is around 4cr as against the 5cr as against last year 4cr.
Viraj Kacharya — Analyst
Okay, so this question on Dahesh, I think last quarter we mentioned that we are commissioning second product, you know, for supply to domestic for supply to domestic market and we also having a good utilization for the first quarter. But if I look at the revenue for the quarter, you know, for the dates, you know it’s hardly 4 SIA as against the run rate we, you know, in the earlier quarters. Generally the environment is quite positive in terms of price and volume both from export point of view as well, you know, for CPV exports. So what, you know, what is the reason why the sales are lower for Dhanich?
Rahul Dhanuka — Managing Director
So Q3 in any case is. Off season for both of these products. So Q3 we were expecting lower sales that is 1/2 our diphen cornazole production got extended and went into November and December which expecting to close in October and November. So that got delayed slightly but now it is completely online and so starting Q4D EFIN panazole revenues will start coming in as per the plan with respect to biofentrin. In any case it was off season. Q1 we have started on a good note for biofentrin technical sales from Dahij. So we are expecting that to continue in the future as well.
Viraj Kacharya — Analyst
Okay, so both these two products together going into next year what kind of, you know, sales utilization we are looking at and what will be the capex for the NPP2 plant next year?
Rahul Dhanuka — Managing Director
FY27 we are looking at a capacity utilization of close to 80% for these two. Plus we will be adding one more product in this plant that is iProvelly. So three products together we are looking at 80% capacity utilization and MPP2 we are expecting a capex in the range of 60 to 70 crores.
Viraj Kacharya — Analyst
Okay, got it. Last question. So if I look at the B2C you know, if I adjust for the sales addition from the beer products, you know, in the quarter which is gone by and for the degrowth for us, you know, is even higher, you know, in B2C and if I look at the other players in the industry, we’re not seeing that kind of a degrowth. So just trying to understand, you know, there is what is driving a low performance for us, you know, in any color you can guess.
Rahul Dhanuka — Managing Director
So one is of course the impact of the biostimulants in B2C segments which has hit us hard in Q2 and Q3 business opportunity. Then also last year we had some really powerful NPI new product introduction for Chile segment. Chile has taken a major beating in this season down south. So the consumption has been significantly low which is a very specialized segment where farmer consumes only high value product. And that high value consumption has been hit hard. Third is, I think at Dhanuka we really optimize the channel inventory significantly faster than the industry standards. So we do not allow our channel partners to carry forward the inventory.
We try and turn it around faster than what the industry averages would be. That could probably, you know, this is an external factor which I don’t have a complete hang of be influencing how our sales get compared.
Viraj Kacharya — Analyst
But in terms of the receivables or inventory, would it be right to think that say if I look at March 2025, you know, we ended the year with around 230 to 40 crores of cash. And if I look at December, I think we, based on the commentary we are still around 250 crores of cash. So would it be like to think that we’re sitting on a sizable amount of inventory or receivables compared to a normal period?
Rahul Dhanuka — Managing Director
You see in terms of March, you are having a loan to the banker to the tune of 50 crore which is paid in the current, current financial year. Right. And now that our debtor portion is improved as compared to the last year December inventory of course has increased because of the impact on the volumes because there are many molecules which are imported and we are, we sourced the inventory as per our sales plan. But somehow that misfire because of which our inventory of few imported molecules have increased significantly this year.
operator
Sorry to interrupt you sir. You may please rejoin the queue for the next question. The next question is from the line of Ketan Shawla from Affirma Capital. Please go ahead.
Ketan Shawla — Analyst
Thanks for the opportunity. So if we look at our gross. Margins from FY23 to FY25 there was an expansion of approximately 580bps. You know, our margins went from 34.4% to 40.2. And if you look at the backdrop, this was an environment when technical prices were benign due to oversupply and inventory issues. In one of the earlier con calls. I believe you had referred that you were expecting 100 to 150 pips of contraction in gross margins. Because we were expecting the prices to stabilize and then thereafter increase. But if you look at the gross margin for the current period, it’s still at 40%. So two questions for you. Firstly, is the softness in technical raw material prices still there and how long do we expect the softness to continue? And second question is, once the cycle turns and prices stabilize and increase, what is our expectation of the sustainable gross margin that we can have?
Rahul Dhanuka — Managing Director
You see the one impact of the gross margin is on account of this year we received around the NEB of rupees 20 crore, 19.5 crore which has no basically COGS. This entirely impacting the gross margin to the extent another is with regard to the technical prices. I think the softening is almost over now. And going forward I am of the opinion keep 38% gross margin are sustainable in long term.
Ketan Shawla — Analyst
Okay, you’re saying that now you’re seeing technical prices picking up and stabilizing and you expect about 200bps impact on your margins. And sustainable should be more 38% gross margins as opposed to 40 odd percent which have been there for the last year, year and a half. Yeah.
Rahul Dhanuka — Managing Director
2% impact on account of not the raw material prices. It would be on account of the neb.
Ketan Shawla — Analyst
Understood. And what percent of our raw material is actually sourced from China?
Rahul Dhanuka — Managing Director
Direct procurement would be in the range of 10 to 15%.
Ketan Shawla — Analyst
And if you include indirect as well then how much would that be?
Rahul Dhanuka — Managing Director
Indirect is difficult to say because we buy a lot of material from Indian companies who are both manufacturers and importers. So it is difficult to say what would be the indirect procurement from China.
Ketan Shawla — Analyst
Got it. Thank you sir. I’ll come back in the question queue.
operator
Thank you. A reminder to all participants, you may press Star and one to ask a question. The next question is from the line of Parth Mehta from Vellum Capital. Please go ahead.
Parth Mehta — Analyst
Hi sir, thank you for taking my question. Just wanted to know for the quarter what would have been the contribution from the volume and price?
Rahul Dhanuka — Managing Director
You see in this quarter is almost flat. Similar. Value and volume are almost similar.
Parth Mehta — Analyst
Okay. Okay. So equal contribution from volume and value. Right? Volume and price. Yeah, that’s right. Understood. And just wanted to ask in the previous quarter there was you’d given a guidance cut and guided the full year to be ending with a flattish growth. So would this still be achievable or do you think there could be some growth in Q4 given that Q4 has a good start.
Rahul Dhanuka — Managing Director
Yeah. In case of Q4 definitely there will be a growth. But on yearly basis we are on the OP and it should be flattish year.
Parth Mehta — Analyst
Okay, got it. And just one on the guidance of the two beer products. The guidance for the full year was around 40 crores. So is that achievable? Would it be ending at 40 crores?
Rahul Dhanuka — Managing Director
No, no, no. Because of the grape season not behaved as per our expectation. So it would not be 40 crore. It would be significantly lower than 40. Maybe around 20. 30 crore.
Parth Mehta — Analyst
Okay, thank you.
operator
Thank you. The next question is from the line of Archit Joshi from Nuvama. Please go ahead.
Archit Joshi — Analyst
Hi, good evening sir and thanks for the opportunity. I just have one question sir. What would you make out of the current graft pesticides management bill proposed by the government? And what would the long term impacts be for organized players like us at Dhanukka Agritech? So your thoughts? Thank you.
Rahul Dhanuka — Managing Director
Right, so draft pesticide management bill would be really good for the organized industry and organized players. Dhanuka being organized player and believing in building brand equity, building value for the customer. In this case our farmer would significantly stand to benefit from the pmb. PMB apart from various other things brings in tough rules around, you know, misbranding fake spurious products. It brings stiff punitive measures around fly by night operators which will be a big deterrent and will open up more market space for organized players like ourselves. PMB I think so is long awaited. It does. The government has asked for various inputs from all possible stakeholders including farmer.
We as the industry and industry associations have submitted our viewpoints contributed for the same, you know, by 4th of February that was to be be achieved. So we have provided our views where the government and the industry together can facilitate the desired growth of the Indian agriculture and prosperity of the Indian farmer.
Archit Joshi — Analyst
Sir, upon its execution and obviously after taking the comments from all the stakeholders in the industry, would you have any expectations or have an understanding on how the government will try to maintain checks and balances about the most talked of problem with respect to spurious products and the misbranding that you spoke of. Would you have any comments on that account which might help us or rather as an organized industry to gain more market share from the ones who are doing the malpractices.
Rahul Dhanuka — Managing Director
Agriculture is a state subject and to an extent the regulatory and the executive powers is also with the state which is certainly not going to change with with the law yet the provisions will make it difficult for the hand in glove operators with the fly by night operators. You know there are Other agencies who could be hand in glove with these, it will become difficult for them to really play around. Yet the success of any law depends on how well it gets executed, where the center and the states will have to collaborate to ensure that the execution is in the spirit of the letter.
That is something. That is something, you know, at Nirvama yourselves and at Dhanuka and the entire industry would look forward to that. The execution is in the spirit with which the law is framed.
Archit Joshi — Analyst
Sure, sir. Understood. And we’ll definitely hope for the best. Thank you all. Thank you.
operator
Thank you. The next question is from the line of Rohit Nagraj from 361 Capital. Please go ahead.
Rohit Nagraj — Analyst
Opportunity in terms of new product introductions for next year, FY27th, how are we placed and what could be the 9394 products for what categories that we are looking at? Thank you.
Rahul Dhanuka — Managing Director
Yeah, so we have lined up three new launches for next year out of which two would be fungicides and both of them would be, you know, nine. Three first time introductions. And then we have also lined up a specialty offering for enhancing spray efficiency. So these are the three products which we have lined up for introduction over next year.
Rohit Nagraj — Analyst
And from an application perspective, which crops these would be utilized primarily for?
Rahul Dhanuka — Managing Director
Right. So both the fungicides will find their application significantly in grapes and then in potato, they will also find application in tomato and chili. So grapes, tomato, chili, all three being high value crops, will have a good opportunity. And the third is spray enhancer, also as a premium product, we’ll be positioning largely in tomato markets.
Rohit Nagraj — Analyst
Sure. The second question, in terms of the current environment, I mean, as of now there are talks that there will be probably El Nino this year. Historically, since we’ve been through several cycles, whenever the El Nino has happened, has it impacted materially in terms of the performance for a particular curry season? And a light question to that. We have also experienced the farm income being lower getting impacted. The Q3 numbers, if it continues to remain low, will it have its repercussion for the next curry season? Just your thoughts on this. Thank you.
Rahul Dhanuka — Managing Director
Right, so first a take on El Nino. The El Nino predictions which have come up recently are followed up by these being too early and the margin of error being significantly higher. So the new predictions normally come in after mid April. We’ll be waiting for that to really understand how intense El Nino forecast is. Yet you would have also noticed that all El Nino years are not poor rainfall years. So that being said, we’ll have to wait for imd, Australian Meteorological Department and few other meteorological department for us to kind of collate and understand how do we see the upcoming curries talking about the farm income.
So it is the farm income which not only Dhanuka Agritech but almost the entire nation depends upon. Agriculture contributing 14% of the GDP and more than 50% of the population being dependent on agriculture. Not only agri inputs but fmcg, fmcd, automobile industry depends on their success. So yes, we not only keep our fingers crossed crossed, we genuinely pray and at Dhanuka we work closely with the farmer so that we can support in enhancing their income.
Rohit Nagraj — Analyst
Got that? So just one last clarification. In terms of our Daheg manufacturing block are there any talks going on with any of the multinational players or players outside India for an exclusive contract or arrangement which we have been seeking for a fairly long time. Thank you.
Rahul Dhanuka — Managing Director
There is one discussion which is going on in last quarter. Two companies have visited us at the hedge. So one Japanese and one European. So we are looking forward to progressing on these discussions further.
Rohit Nagraj — Analyst
Sure, that is helpful. Thanks a lot and all the best sir.
operator
Thank you. The next question is from the line of Rajat Setia from Ithought pms. Please go ahead.
Rajat Setia — Analyst
Hi. Thanks for the opportunity. So just one question. Amount of sales return in this quarter.
Rahul Dhanuka — Managing Director
Sales return in this quarter is similar to last year in Q3.
Rajat Setia — Analyst
Yeah. Sir, what is the number? I was not able to find the.
Rahul Dhanuka — Managing Director
Number this year is 72 Sir. Crore as against 74 crore last year.
Rajat Setia — Analyst
17. 2 in this quarter, right? Yeah.
Rahul Dhanuka — Managing Director
In this quarter. That’s right.
Rajat Setia — Analyst
And the nine month number would then be closer to 220 crores, correct?
Rahul Dhanuka — Managing Director
Yeah, that’s right.
Rajat Setia — Analyst
All right. Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference please limit your questions to two per participant. Should you have a follow up question we would request you to rejoin the queue. The next question is from the line of Amit Khetan from Lumber Mum Capital. Please go ahead.
Amit Khetan — Analyst
Hi sir. Thank you for the opportunity. So if I. If you were to take a slightly medium to longer term view.
Rahul Dhanuka — Managing Director
Sorry to interrupt you sir, we are unable to hear you. Please use your handset. Sir, are you able to hear me?
Amit Khetan — Analyst
Yeah, I can hear you. Hello.
Rahul Dhanuka — Managing Director
Yes. Yes sir, please go ahead.
Amit Khetan — Analyst
Yeah. Hi. Thank you for the opportunity. So if we take a slightly longer term view of say three to five years what is the kind of growth opportunity for Dhanuka? What sort of growth rate can we realistically grow at? And it will be helpful if you can break that down into, you know, growth from existing products as well as new molecules and exports as well as, you know, getting into new crops.
Rahul Dhanuka — Managing Director
Right. So this is a very larger question, but let us look at the macroeconomics favoring the agriculture. Yeah, I see a eco in my voice. So there’s a sound system over there which is causing this eco.
Amit Khetan — Analyst
Okay, let me just mute it from my side.
Rahul Dhanuka — Managing Director
Yeah, I hope so. There is no more echo. So the macroeconomic factors certainly favor agriculture and so the agri input industry also, while urea dap other nutritional segment is what farmer invests in eagerly. Crop protection industry has taken up a strong position with investments in the agriculture increasing and value added crops gaining ground, significant ground in the agriculture space. Within that domain, Dhanukka has constantly brought in new products, value added products, specialty products and niche products from our Japanese, European and US based partners, thereby offering to the farmer specialized solutions for their problem. So with this we have a place in specialized crops like grapes, tomato, chili, some of them getting exported as well.
While we also have a strong foothold in conventional crops like rice paddy, soya bean, cotton and tea. So overall, with this kind of favorable macroeconomic situation, I believe we will continue to grow at Dhanuka with a healthy double digit growth on a short to mid term horizon of next three to five years. The expansion opportunity is available due to multiple crop cycles. Farmer is trying to grow more than two crops now, which is almost three crops in many patches of the country which is possible A because of the irrigation facility and B because of the increase in marketability of the produce.
India, with more than 600 grams per hectare, agrochemical consumption is still one of the lowest as compared to the world average agrochemical consumption consumption with a significantly high arable land of 150 million hectares. So the growth opportunity is only northwards. It really depends upon how intensely we are able to reach to every nook and corner, every plot and field where farmer is cultivating. Understood.
Amit Khetan — Analyst
And if I could, if I could, you know, what do you see the risk aside, aside from say, you know, weather patterns, what are the risks that could prevent you from achieving this double digit growth?
Rahul Dhanuka — Managing Director
Apart from the weather pattern, what matters? Would you put that on mute again? I think so. That should work. So apart from the weather patterns, the commodity prices and sometimes, you know, the policies like Jee Ramji now could also have an impact on how the farmer move towards agri input. A lot also depends upon the marketability, storage and transportation of the commodity. Earlier, India touched a milestone of almost 335 million metric tons of food grain production production and very soon horticulture production crossed that level and touched 340 million metric tons. Now horticulture production is a value added production for the farmer and relatively higher on input consumption.
Increased in warehousing, increase in cold storage, increase in cold transportation, good roads, non stoppage at Chungi Nakas because of the tax smoothening. All these will actually facilitate only facilitate the progress of agriculture as well as agri input industry. So these infrastructural tailwinds being favorable? I think so. Other than seasonal vagaries, nothing should stop.
operator
Thank you. Sir, may we request that you return to the question queue for follow up questions as there are several participants waiting for their. The next question is from the line of Ketan Shawla from Affirma Capital. Please go ahead.
Ketan Shawla — Analyst
Thank you. Sir, I just had a clarification on my gross margin question earlier. So what is the total quantum of the net economic benefit that we receive which will now go away once we have it on our books. And secondly, what is the gross margin profile of these two brands which we had acquired from buyers?
Rahul Dhanuka — Managing Director
You see net economic benefit Quantum in the nine month is 19 and a half crore and in Q3 is around 6 cr.
Ketan Shawla — Analyst
Okay. And what is the gross margin profile on these two brands?
Rahul Dhanuka — Managing Director
Gross margin is in the range of the our overall gross margin.
Ketan Shawla — Analyst
Okay. So broadly in line with 40 odd percent.
Rahul Dhanuka — Managing Director
Yeah, absolute some 2, 32 basis point here and there.
Ketan Shawla — Analyst
Understood. Thank you.
operator
Thank you. The next question is on the line of Viraj Kacharya from Simple. Please go ahead.
Viraj Kacharya — Analyst
Yeah, I just two questions on the beer product. One is if one has to understand the contribution margins of the two products, would it be in line with our B2C business margin or would it be even higher? Any color you can give both contribution and operating margin, it is in line.
Rahul Dhanuka — Managing Director
With the overall gross margin of the company.
Viraj Kacharya — Analyst
Okay, got it. And second question is, you know, see these two products, you know they have a well established distribution system, right? You know, so in terms of our approach, you know I think somewhere in the call you talked about us looking to appoint new set of distributors. Are they for the new markets or you know, or those are for existing, you know, regions as well. Any color you can give. How are we approaching in terms of go to market and any risk you see in terms of execution.
Rahul Dhanuka — Managing Director
So currently in most of the countries Bayer has been selling the product through its distribution network. As Bayer is present directly in most of the countries, Dhanuka is not planning to go direct distribution in these countries. So we are appointing one national distributor in the various markets. So the new distributor appointment which I referred to earlier was in the countries where Dhanuka is not present. In case of India and Nepal, we are not appointed any new distribution channel.
Viraj Kacharya — Analyst
Right. But going into 27, do you see any risk in terms of execution? And you know, since the products are being transitioned from Bayer to Danuka, so.
Rahul Dhanuka — Managing Director
The risk is in any business transaction it is there in terms of. The. Setback in terms of supply chain. Because for supply chain we are still dependent on buyer to provide the product. And while the regulatory changes happen with registration ownership being transferred from Bayer to Dhanuka and India’s sourcing getting added, we will. We may see some issues in supply chain although we have done the planning, but it is always a risk.
Viraj Kacharya — Analyst
Got it. And this last question, if I can season see beer. You know, most of the manufacturing is centered in Europe and the cost of manufacturing is quite elevated compared to Chinese. So in that sense, you know, when we look to move one of the products from Germany to India, do you see any material change in the margin structure for the product or any color you can give?
Rahul Dhanuka — Managing Director
Yeah, definitely there would be an improvement in the margin structure for the products once the manufacturing moves to India. Absolutely.
Viraj Kacharya — Analyst
Thank you very much.
operator
Thank you ladies and gentlemen. We take that as the last question for today. I now hand the conference over to management for closing comments.
Rahul Dhanuka — Managing Director
Thank you friends. Once again I would like to thank all the investors and analysts for your support and confidence in Dhanuka. We have already initiated our FY27 planning and looking forward to a normal year. I reassure our stakeholders that we are committed to to the task of transforming the landscape of agriculture and farmers in India. I once again reassure the stakeholders that the bad phase for the last two quarters is over now. And now we have to look for a bright future only. Thank you India. Ka pranam harkisan KE nam. Thank you and looking forward to connecting with you in the next quarter.
Thank you once again.
operator
On behalf of Antique Stock Broking Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.