Rallis India –
Notes from Q2 FY 24 concall –
Financial outcomes –
Sales – 832 vs 951 cr
EBITDA – 133 vs 117 cr( margins @ 16 vs 12 pc )
PAT – 82 vs 72 cr
El-Nino conditions in India, Global overstocking (high channel inventory) of agrochemicals – adversely affected both domestic and export sales. Lower topline is also attributed to softening RM prices
Channel inventory correction may still take some more time ( 3-4 months or so )
New product’s production started from Dahej multi purpose plant ( that of Difenconazole ). Another Contract manufacturing product to go live from this plant over the next few Qtrs
Q2 revenues break up –
Crop care revenues – 737 vs 923 cr ( down 20 pc ). However, domestic volumes were up 5 pc. Exports declined by 50 pc
Crop care PAT – 79 vs 89 cr
Seeds revenues – 95 vs 28 cr ( up 240 pc ). Cotton hybrid continued good sales momentum
Seeds PAT – 3 vs (-) 18 cr
Contract manufacturing business performed well in Q2. Future outlook remains good
Wrt Difenconazole – aim to sell it in SE Asia and Indian mkts. Company will be selling this to multiple customers
The next molecule ( whose production starts from Dahej MPP in Q3 ) – is being produced exclusively for a single customer ( company did not disclose the name of customer, molecule )
Company resorting to shorter purchase cycles to manage the RM price volatility. Lower/Stable crude prices are positive for the company
Company aims to reach 60:40 as Domestic : International sales in the medium / long term
Company’s seeds business has a heavy skew in favour of Kharif season. Likely to continue for a few more years till company is able to gain traction in Rabi crops
There is no demand destruction in the international markets. Its the high inventory levels that are causing all the problems
Disc: not holding, not SEBI registered
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