By Praveen Paramasivam
CHENNAI (Reuters) -Chemical maker Coromandel International is betting its drone startup Dhaksha will help Indian farmers cope with an ongoing labour shortage in the agriculture sector, a top executive told Reuters on Friday.
In June Coromandel bought a majority stake in Dhaksha at a valuation of 6.25 billion rupees ($75.96 million), saying the startup will “identify promising avenues of growth” for the company.
Dhaksha’s drones can spray nutrients and pesticides onto crops and can also be used for the defence and surveillance sectors.
“It provides an opportunity to use agri-drones either through purchase from Dhaksha or engage them for providing services so that we can meet farmers’ requirements,” Chief Financial Officer Jayashree Satagopan told Reuters, adding that
the startup has talked with dealers in various states including Telangana, Karnataka and Andhra Pradesh to sell its drones to high net-worth farmers.
India’s farming sector has been wrestling with a labour shortage despite the industry accounting for a good portion of the economy as the country’s youth increasingly gravitate toward higher paying jobs in cities.
“Labour cost and availability is becoming a huge problem in the agriculture sector,” Satagopan said.
Dhaksha would not immediately contribute significantly to Coromandel’s overall revenue, she said, but did not give any other financial details.
The company reported a marginal drop in revenue from operations of 57.29 billion rupees and a 1% drop in net profit after tax for the first quarter on Thursday, hurt by slowing sales. Analysts were expecting demand to be muted until the end of September.
The maximum retail prices of products were unlikely to drop sharply, Satagopan said, with government subsidies coming into play instead as prices of raw materials including urea and ammonia come off their highs.
Satagopan however said a revival of the crucial monsoon rains in July would bode well for Coromandel.
The company would look to invest in technological areas where it currently does not have a huge presence, Satagopan said, adding it is premature to provide guidance on the nature of acquisitions in the pipeline.
($1 = 82.2792 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Rajendra Jadhav; Editing by Nivedita Bhattacharjee)