Rallis India Limited — Q1 FY26 earnings call

Call held 15 Jul 2025

Management summary

Rallis India delivered a strong Q1 FY26 performance, with significant revenue and profit growth driven by robust volume expansion across its Crop Care and Seed businesses. The company benefited from improving market sentiments, favorable monsoon, and strategic product launches, despite some challenges in specific crop segments and export markets. Management expressed optimism for continued growth, focusing on differentiated products, customer centricity, and operational efficiencies.

Highlights

  • Revenue grew by 20% YoY to INR957 crores in Q1 FY26.

  • Profit After Tax (PAT) surged by 98% YoY to INR95 crores from INR48 crores in Q1 FY25.

  • EBITDA increased by 56% YoY to INR150 crores, with an EBITDA margin of 15.67%.

  • Crop Care business revenue was up 16% YoY, driven by 13% volume growth.

  • Seed business revenue saw a robust 38% YoY growth, reaching INR305 crores.

  • Soil and Plant Health (SPH) business grew by 33% YoY.

  • Crop Care B2B revenues stood at INR203 crores, with exports component higher by 75% YoY.

  • The company launched 9 new products in Crop Protection B2C and 14 in seeds.

Key financials

  1. Revenue ₹957 Cr +20%YoY
  2. PAT ₹95 Cr +98%YoY
  3. EBITDA ₹150 Cr +56%YoY
  4. EBITDA Margin 15.7%

What they filed

Q1 FY27: revenue up 6.8%, net profit up 31.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue928 522 430 957 861 −7%623 +19%456 +6%1,022 +7%
EBITDA166 44 -20 150 154 −7%58 +32%-1 +95%185 +23%
Net profit98 11 -32 95 102 +4%2 −82%-15 +53%125 +32%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Crop Care B2C
    ₹449 Cr Revenue13% Volume Growth
  • Soil and Plant Health (SPH)
    33% Growth
  • Crop Care B2B
    ₹203 Cr Revenue75% Export Growth23% Volume Growth
  • Seed Business
    ₹305 Cr Revenue38% Growth26% EBITDA Margin
  • Cotton Seed
    33% Share of Seed Portfolio
  • Paddy & Maize Seed
    40% Share of Seed Portfolio

Guidance & targets

Capex

  • Total Capex Investment Capex · FY26 · High confidence INR100 crores
    total capex investment would be in the range of INR100 crores, mostly related to plant upkeep and maintenance, R&D and captive solar plant.

    — Subhra Gourisaria, CFO

Profitability

  • EBITDA Margin Profitability · long-term · Medium confidence 15-20%
    directionally, we would like to operate in the range of 15% to 20% EBITDA margin over a period of time.

    — Gyanendra Shukla, MD & CEO

  • Seed Business EBITDA Margin Profitability · long-term · Medium confidence 20%
    I think in seed when I say overall 15% to 20% EBITDA margin on a long-term basis, I see seed delivering 20%...

    — Gyanendra Shukla, MD & CEO

  • Crop Protection EBITDA Margin Profitability · long-term · Medium confidence 15%
    ...and maybe crop protection at 15%.

    — Gyanendra Shukla, MD & CEO

Revenue

  • Revenue Growth Revenue · long-term · Low confidence high double digit
    I do aspire and I keep talking about it, I want to grow high double digit and that's where we're putting all our resources.

    — Gyanendra Shukla, MD & CEO

Capacity

  • CSM Manufacturing Opportunity Capacity · Low confidence INR500 crore
    I keep saying that we haven't still cracked a INR500 crore manufacturing opportunity yet.

    — Gyanendra Shukla, MD & CEO

New Products

  • Number of New Products (Crop Protection B2C) New Products · Q1 FY26 · High confidence 9
    During this quarter, we have launched 6 products in the herbicide category... launched 9 products in the Crop Protection B2C business.

    — Gyanendra Shukla, MD & CEO

  • Number of New Products (Seeds) New Products · Q1 FY26 · High confidence 14
    As mentioned by Dr. Shukla, we launched 9 products in Crop Care B2C and 14 in seeds.

    — Subhra Gourisaria, CFO

Risks & concerns

  • Impact of illegal RRBT cotton on cotton acreage

    medium

    The issue of illegal RRBT cotton remains, with a spurt in central India, impacting cotton crop significantly, though Rallis had limited inventory.

    Management acknowledged

  • Challenges for Acephate product in Brazil and U.S. markets

    medium

    Acephate continues to face challenges in Brazil and U.S., though some revival is seen, and a new formulation is expected to improve margins.

    Management acknowledged

  • Monsoon disparities and pest/disease pressure

    medium

    Rainfall disparities exist (e.g., Bihar, Northeast less rain), and the build-up of insect, pest, and disease pressure will be critical to watch in August and September.

    Management acknowledged

  • Liquidation trends across crop and seed segments

    medium

    Liquidation trends need to be closely watched across both crop and seed segments to ensure healthy inventory movement.

    Management acknowledged

  • Supply constraints in maize and paddy seeds

    low

    The company faced some processing challenges leading to a little bit of shortage in rice and maize seeds in April and May.

    Management acknowledged

Areas of evasion (3)

  • Specific revenue contribution from newly launched products
  • Detailed financial breakdown of CSM business due to confidentiality
  • Specific names of all 9 new Crop Protection products

Q&A highlights

2 direct
Contribution of new products and changes in cost structure Partial
So these products have got recently launched, and I don't think we can give you a precise number. Having said that, Prashant, for cotton, I think you are aware that we had some gaps in the Southwest market and we've launched new products. And I would say that most of these products are showing good traction, including the production plan that we have for the subsequent year.

Management acknowledged new product launches but deferred specific revenue contribution numbers, indicating early stages of commercialization and a need for more data.

Asked by Prashant, Elara Capital

Sustainability of Diggaz cotton hybrid performance and long-term seed business outlook Direct
So I think, Rohit, you are right we have placed more than 1 million packets. And I think we are hopeful that the liquidation will be near or our sales return will be near zero in terms of the in line with the earlier years. We have also developed follow-on hybrids to Diggaz. And while we don't talk about it, many of them have also started showing good improvement.

Management expressed confidence in the continued strong performance of their key cotton hybrid for the next 2-3 years and highlighted pipeline development, addressing concerns about product lifecycle.

Asked by Rohit Nagraj, B&K Securities

Long-term EBITDA margin guidance and drivers Direct
So see, long term, what we have been saying is that we wanted to come to 500 basis point steady improvement from where we were, right? Now obviously, quarters and quarters will change. But directionally, we would like to operate in the range of 15% to 20% EBITDA margin over a period of time.

Management reiterated a clear long-term EBITDA margin target and linked it to strategic improvements, providing a key financial benchmark for investors.

Asked by Bhavya Gandhi, Dalal & Broacha Stock Broking

2 min read 6 chapters

Detailed narrative

Robust Q1 FY26 Financial Performance

Rallis India reported a strong Q1 FY26, with revenue growing 20% YoY to INR957 crores. Profit After Tax (PAT) saw a significant jump of 98% YoY to INR95 crores, up from INR48 crores in the previous year. EBITDA also increased by 56% YoY to INR150 crores, resulting in an EBITDA margin of 15.67%. This performance was primarily driven by robust volume growth across businesses, indicating an early sign of recovery in the global agrochemical market.

Segmental Growth Drivers

The Crop Care business grew 16% YoY, with Crop Care B2C contributing INR449 crores and showing 13% volume-led growth. The Soil and Plant Health (SPH) business expanded by 33%. The Seed business was a standout performer, achieving 38% YoY growth with revenues of INR305 crores, and an EBITDA margin of approximately 26% for the quarter. Crop Care B2B revenues stood at INR203 crores, with exports component growing 75% YoY, benefiting from market recovery and new customer additions.

Strategic Product Launches and Portfolio Expansion

The company launched 9 new products in the Crop Protection B2C segment, including 6 herbicides, 2 fungicides, and 1 insecticide, aiming to fill portfolio gaps and strengthen the herbicide category. Additionally, 14 new seed products were introduced. Management expects these new offerings, particularly mixture products, to be large contributors with higher margins, with more specific revenue details anticipated by October.

Financial Strategy and Margin Outlook

Management aims for a long-term EBITDA margin in the range of 15% to 20%, with specific targets of 20% for the Seed business and 15% for Crop Protection. The focus is on driving growth to achieve operational efficiencies and absorb fixed costs. The company plans a capex investment of approximately INR100 crores for FY26, primarily for plant upkeep, R&D, and a captive solar plant, while maintaining a healthy cash balance and no external debt.

Market Dynamics and Key Risks

The Indian agrochemical market holds a cautiously optimistic outlook, supported by favorable monsoon and higher crop MSPs. However, challenges include the prevalence of illegal RRBT cotton impacting acreage and supply constraints in maize and paddy seeds. The Acephate product continues to face challenges in Brazil and the U.S., though a new dispersible granule formulation is expected to improve its outlook. Management is closely monitoring liquidation trends and monsoon disparities.

Digital Transformation and Customer Centricity

Rallis is leveraging digital and artificial intelligence initiatives, such as 'Seedsay' for optimal market placement and 'PlanGuru' for SKU-level forecasting and stocking strategies. These tools are in their second to third year of introduction and are being implemented to enhance operational agility, strengthen customer engagement, and reduce human bias in decision-making, aligning with the strategy to pivot on customer centricity.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Chemicals earnings calls