Rallis India

Rallis India reported a Q4 FY25 revenue of ₹430 crores, marking a 1% de-growth compared to the previous year. The company posted a loss of ₹32 crores in Q4 FY25, a deterioration from the ₹21 crores loss in Q4 FY24. For the full fiscal year 2025, revenue was not explicitly stated as a single number but PAT declined by 15.5% to ₹125 crores from ₹148 crores in FY24, primarily impacted by challenges in the export business. The company maintained a healthy cash and liquid fund balance of ₹439 crores as of March 31, 2025.

The Crop Care B2C business saw its Q4 revenue at ₹222 crores, with a positive volume growth of 3% despite prevailing price pressures. For the full year, Crop Care B2C revenue grew by 4% to ₹1,578 crores, driven by a robust 9% volume growth. Within this segment, the soil and plant health business achieved a 23% growth, reaching ₹220 crores from ₹180 crores in FY24, while the herbicide business grew by 24% to ₹300 crores from ₹250 crores in FY24, aligning with the company's growth strategy.

Rallis' export business showed signs of recovery in Q4 FY25, registering a 6% growth in both volume and price, with total B2B exports for the quarter around ₹150 crores. However, the Custom Synthesis Manufacturing (CSM) business was impacted due to customer scheduling and deferment of orders beyond March. Overall Crop Care revenue growth for the full year was limited to 1% due to these challenges in the export business, despite long-term efforts to expand the customer base and improve cost competitiveness.

The seed business reported a Q4 revenue of ₹25 crores, slightly down from ₹26 crores in the previous year. For the full fiscal year, seed business revenue was ₹418 crores, a marginal increase from ₹416 crores in FY24. The segment delivered a strong profit before tax of ₹18 crores. Management expressed optimism for the domestic seed business, particularly with good trade responses and new hybrid launches, and noted that inventory challenges for cotton seeds are manageable.

Domestically, Rabi sowings for 2024-25 concluded at 661 lakh hectares, up 1.4% YoY, led by wheat (+2%), rice (5%), and pulses (2%). Summer crop sowing reached 60 lakh hectares by April 4th, a notable 13% increase driven by paddy. Reservoir water levels were 16.5% higher than last year, and IMD forecasts above-normal rainfall for the 2025 season, with monthly rainfall expected at -4% in June, +2% in July, and +8% in August, supporting a favorable outlook for Kharif crops.

Rallis is strategically focusing on plugging portfolio gaps, particularly in the herbicide segment, which accounts for 30-35% of the crop protection market. The new non-selective herbicide 'LAAFA' was introduced in Q4, receiving a very positive response, and is expected to provide upside. The company also plans several new launches in the insecticide segment and new products in the seed category, especially for cotton, and in soil and plant health, to drive both volume and price growth.

The company plans for capital expenditure in the range of ₹75-100 crores for FY26. This includes sustenance CAPEX for regular maintenance and repair of plants and machinery, investments in solar projects at its Dahej site, and increasing R&D capabilities. Management clarified that no major greenfield or brownfield investments are currently planned, with the focus remaining on these specific areas.

Management noted that the global market situation is fluid, with aggressive trade schemes and pricing pressures continuing. While Acephate is showing a slightly positive trend, Metribuzin and Pendimethalin are neutral. The potential impact of US tariffs on Chinese exports and the possibility of China dumping products at lower prices in other markets, including India, remains a significant concern, creating a 'lot of guesswork' and a 'fluid situation' in the short term. Rallis believes India will remain an important manufacturing hub long-term.