Nuvama expects 38% upside potential in Dhanuka Agritech; here's why

livemint.com:

Dhanuka Agritech Ltd following its latest meet with the company's MD, M K Dhanuka and executive director Harsh Dhanuka. The brokerage firm stated in its report that it expects total profitability to increase with a rise of volume growth and margins. However, an inadequate monsoon in September–October could have a negative effect on demand.

Nuvama anticipates a 38% potential increase in value for Dhanuka Agritech within the period of 12 months, with a price target of ₹1,089 from the stock's closing price of ₹790 on Wednesday. On Thursday's trading session, the Dhanuka Agritech stock rose near 6% to touch a new 52-week high of ₹836.45 apiece on BSE. According to technical analysts, the Dhanuka Agritech stock prices saw a price volume breakout and by sustaining above 820.

"We are seeing a multi month breakout, further upside can be expected in the near towards with 910 as next resistance whereas 810 can be seen as immediate support. This is generally a low volume counter with volume spike seen in today's session, considering the low volume base one should avoid aggressive bets," an analyst said. Dhanuka Agritech share price closed at ₹824.35 apiece, up 4.20% on Thursday.

Here are the key takeaways from the management meet: The overall demand scenario saw a significant improvement in July as a result of the monsoon's recovery in the north and west during the month. Herbicide sales increased dramatically once the monsoon returned. Despite August's continued weakness due to prolonged dry weather that resulted in a significant inventory of herbicides, the demand for insecticides was favourable due to rising humidity and more problems with pests.