Shares of Dhanuka Agritech rallied over 9% after the company’s board approved the buyback of equity shares at a final price of Rs 1,000 per share.
The company approved the proposal of up to 10,00,000 equity shares buyback worth up to Rs 100 crore and fixed September 28 as the record for determining the entitlement of equity shareholders.
Retail investors are unlikely to subscribe the buyback proposal given the Dhanuka Agritech’s asset-light business model, superior return ratios, and recent product launches are expected to drive growth.
In fact, the company is expected to perform better in the near future given the favourable monsoon forecast coupled with the addition of new products to the portfolio.
In the just concluded quarter, Dhanuka performed exceedingly well. For the quarter ended June 2020 (Q1FY21), the company’s consolidated net profit surged 253.03% to Rs 51.79 crore on 70.72 per cent jump in net sales at Rs 373.84 crore over Q1 June 2019.
Profit before tax (PBT) soared 234.02% to Rs 69.21 crore in Q1FY21 as against Rs 20.72 crore in Q1FY20.
As on June 2020, promoters held 75% stake in Dhanuka Agritech. Out of 25% public shareholding, mutual funds held 12.83% holding, followed by individual shareholders (8.57%) and overseas corporate bodies (1.41%).
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