January 17, 2019

Rallis India Q3 FY19 results declared

Standalone revenue up by 9%; consolidated revenue up by 7%

Mumbai: Rallis India Ltd, part of the Tata group and a leader in the domestic crop protection sector, announced its financial results for the quarter and nine months ended December 31, 2018.

On a consolidated basis, the company registered revenues of Rs417 cr (Rs390 cr) up by 7% for the quarter ended December 31, 2018. Total comprehensive income stood at Rs14 cr. On a standalone basis, revenues totaled Rs388 cr (Rs357 cr) up by 9% for the quarter ended December 31, 2018, with total comprehensive income at Rs23 cr (Rs34 cr).

Performance highlights – consolidated

  • Revenue growth of 7% on the back of steady performances in domestic and international markets. Strategic initiatives in terms of strengthening dealer network and revised incentive structure aided domestic performance. Exports revenue expanded owing to better performance in the US and Europe.
  • EBITDA amounted to Rs28 cr; resulting in margins of 7% for the quarter. Higher input cost – imports from China resulted in profitability and margin compression. Working towards improving product mix – share of value added / specialty products to offset impact of rising raw material.
  • PAT stood at Rs14 crore. Margins remain constrained owing to higher raw material prices. Expect profitability to pick up going forward following growth specific initiatives undertaken towards driving growth.

Key developments

  • Merger with Metahelix Life Sciences: The board of directors of the company has accorded its consent to the merger of Metahelix Life Sciences Ltd (a wholly owned subsidiary of the company) with the company under a scheme of amalgamation subject to necessary statutory approvals from various regulatory authorities.

Strategic initiatives

The company’s strategic initiatives towards driving domestic and international business are starting to deliver positive results. Some of these initiatives include:

Domestic business

  • Refreshing distribution channel refresh – Adding distributors to enhance growth.
  • Revitalised dealer incentive structure: Higher variable incentives linked to revenue targets.
  • Expansion of credit period to support select product growth.
  • Increasing focus on specialty product launches.
  • Improving connect between the distributors and top management.

International business

  • Investing in capacity expansion.
  • Registration in international markets.
  • Increased higher margin exports to smaller South Asian countries.

Commenting on the performance and developments, R Mukundan, managing director and CEO said, “We have delivered a steady revenue performance for the quarter despite multiple headwinds in the domestic market. However, recent margin pressure experienced across the industry have impacted profits. Rallis is in the process of a strategic transformation with efforts being directed towards leveraging our strengths in both the domestic and the international markets. We are working towards improving the depth and width of our product portfolio by leveraging our in-house R&D capabilities. The board has approved Rs100 cr investment expanding capacity in key products. We are confident that our initiatives, coupled with supportive macros, will help us deliver sustainable value for our shareholders. Additionally, the board approved the merger of Metahelix which will enable us to offer a unified approach to our customers.”