Rallis India Limited — Q3 FY26 earnings call

Call held 21 Jan 2026

Management summary

Rallis India Limited reported a robust 19% YoY revenue growth in Q3 FY26, reaching ₹623 crores, driven by strong performances in its Seeds and Exports segments. However, PAT saw an 81% decline to ₹2 crores, impacted by a significant one-time gratuity provision. The domestic agrochemical market continues to face challenges from weak demand and limited pricing power, while the company focuses on new product launches, digital initiatives, and strategic partnerships to drive future growth.

Highlights

  • Q3 FY26 Revenue stood at ₹623 crores, marking a 19% YoY growth from ₹522 crores in Q3 FY25.

  • Overall EBITDA for Q3 FY26 increased by 29% compared to the previous year, reaching ₹58 crores.

  • The Seeds business demonstrated strong growth of 46% YoY, with revenue increasing to ₹43 crores from ₹30 crores in Q3 FY25, driven by paddy, mustard, and wheat.

  • Exports (B2B) topline grew significantly by 73% to ₹129 crores, supported by volume growth, customer base expansion, and improved capacity utilization.

  • The company launched 9 new products in 9M FY26, including 7 Herbicides and 2 Fungicides, and introduced a new biologicals platform 'NuCode'.

Concerns

  • Profit after tax (PAT) for Q3 FY26 was ₹2 crores, an 81% decline from ₹11 crores in Q3 FY25, primarily due to an exceptional gratuity provision of ₹40 crores.

  • Domestic agrochemical demand remains weak due to stressed demand drivers such as weather issues and low crop prices, leading to industry-wide volume decline.

  • Pricing power remains limited due to intensifying global competition, with China continuing as a primary supplier, capping realizations and potentially compressing margins from rapid technical resets.

Key financials

2 periods

Q3 FY26

  • Revenue
    ₹623 Cr
    YoY +19%
  • EBITDA
    ₹58 Cr
    YoY +29%
  • PAT
    ₹2 Cr
    YoY -81%
  • Overall Volume Growth
    28%
  • Overall Pricing De-growth
    -8%

9M FY26

  • Revenue
    ₹2,441 Cr
    YoY +9%

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

Share of Revenue
Crop Care (9M FY26) ₹1,991 Cr 35.0%
B2C (9M FY26) ₹1,401 Cr 24.6%
B2B (9M FY26) ₹590 Cr 10.4%
Crop Care (Q3 FY26) ₹580 Cr 10.2%
Seeds (9M FY26) ₹450 Cr 7.9%
Domestic (B2C) (Q3 FY26) ₹391 Cr 6.9%
Exports (B2B) (Q3 FY26) ₹129 Cr 2.3%
Soil & Plant Health (Q3 FY26) ₹73 Cr 1.3%
CSM (Q3 FY26) ₹46 Cr 0.8%
Seeds (Q3 FY26) ₹43 Cr 0.8%

Capital allocation

high confidence
  • Liquidity Cash ₹455 Cr Healthy cash and liquid balance as of 31st December.
    At quarter end our inventory levels remain slightly elevated in comparison to the same quarter of last year and collections remain smooth. We have healthy cash and liquid balance of Rs. 455 cr as of 31st December.

Guidance & targets

Sector Growth

  • Agrochemical Sector Growth Sector Growth · FY26 · High confidence 3-4%
    The sector is on track for 3-4% growth in FY26 to ~USD 9.6–10.0 bn.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

  • Seeds Category CAGR Sector Growth · Structural · High confidence 5-10%
    Seeds category remains a structural 5-10% CAGR story.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

Exports Growth

  • Indian Agrochemical Exports Growth Exports Growth · High confidence 5-6%
    Indian agrochemical exports to key markets like the US and Brazil are growing 5-6%, supported by destocking normalization.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

Revenue

  • Seeds Business Revenue Revenue · in 5 years · Medium confidence ₹1,000 crores
    I said, look, aspirationally in 5 years, I want to take my seed business closer to INR1,000 crores.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

  • Soil and Plant Health Business Revenue Revenue · in 5 years · Medium confidence ₹700-800 crores

    From ₹225 crores today

    Soil and plant health business, I want to grow by 4x from where it was, INR225 crores to INR700 crores, INR800 crores.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

Profitability

  • Overall Blended EBITDA Margin Profitability · in 5 years · Medium confidence 500 basis points expansion
    I want to grow company in double digit from a revenue perspective and expand the margin on an overall blended basis to 500 basis points in 5 years.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

Market context

  • Global Agrochemical Market CAGR Sector Growth · by 2025 · High confidence ~5.5%
    The global agrochemical market particularly crop protection market, valued at approximately $75 billion in 2025, is projected to grow at a CAGR of ~5.5%.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

  • Overall Company Revenue Growth Revenue · Medium confidence Double digit
    I want to grow company in double digit from a revenue perspective and expand the margin on an overall blended basis to 500 basis points in 5 years.

    — Dr. Gyanendra Shukla, Managing Director and Chief Executive Officer

What to watch in Q4 FY26

Impact of Chinese VAT rebate discontinuation

Next quarter (post-April implementation)
Current Applicable from April 2026
Target Specific details on impact on landed costs, supply, and pricing

Why it matters

Could significantly alter cost structures and competitive landscape for technicals, impacting profitability.

I think this rebate thing is a new, which is applicable from April. So we have to understand... So I think you'll have to wait for some more information to filter in as I know it is applicable only from April.

Risks & concerns

  • Weak Domestic Agrochemical Demand

    high

    Agrochemical demand remains weak due to stressed demand drivers (weather issues, low crop prices), leading to industry-wide volume decline.

    Management acknowledged

  • Global Reliance on China & Policy Shifts

    high

    Global reliance on China for key technicals (glyphosate, glufosinate, atrazine) exposes costs to tariff and policy shifts, such as the upcoming VAT rebate changes.

    Management acknowledged

  • Limited Pricing Power & Competition

    medium

    Pricing power stays limited as global competition intensifies with China continuing as the primary supplier, capping realizations.

    Management acknowledged

  • Inventory Compression Risk from Technical Resets

    medium

    Rapid resets in key technicals (glyphosate/glufosinate/paraquat) can reprice on-hand inventory and compress margins.

    Management acknowledged

  • Uncertainty in International Business Environment

    medium

    Unseasonal October rains, higher-than-normal crop damage, new announcements from China, and geopolitical context create uncertainty for international business.

    Management acknowledged

Q&A highlights

5 direct
Impact of Chinese VAT rebate discontinuation on technical exports Partial
I think this rebate thing is a new, which is applicable from April. So we have to understand. I certainly believe when they remove the incentive by the month of April, how much they would have already supplied and have they supplied enough to cater to the market... it should lead to some price increase and some consolidation in players.

Analyst inquired about a significant upcoming regulatory change in China that could impact raw material costs and global competition, to which management provided an initial assessment.

Asked by Arjun Khanna

Anticipation of dumping in Q4 and impact on dispatches Direct
No. So I think we have planned for a normal quarter. We don't advance sale or we don't unnecessarily delay the sale. I think we go by the seasonal demand.

Clarifies management's expectation for Q4, indicating they are not anticipating unusual market behavior like dumping, and are managing sales based on seasonal demand.

Asked by Arjun Khanna

Deployment of cash on the balance sheet for future growth Direct
So cash on the balance sheet, obviously, one thing is, obviously, we need cash to meet our working capital requirement as we grow business... we keep seeking opportunities where if we come across a good opportunity to grow inorganically, any of the verticals we operate, 3 particular verticals, we want to use that cash for those purposes as well.

Provides insight into the company's capital allocation strategy, balancing working capital needs with potential inorganic growth opportunities across its verticals.

Asked by Arjun Khanna

Impact of Q4 inventory liquidation on Rallis India Partial
So look, you have to always place product in the market because it has to go from factory to CNF, CNF to distributor to retailer and farmers also end up buying a few days in advance at least before they want the space, the product has to be in the market. I think the numbers reflect what has been actually consumed and what might be lying in the market.

Explains the necessity of maintaining inventory in the supply chain and how the company tracks actual consumption versus stock on hand, suggesting careful management.

Asked by Jagveer Singh

Regulatory status and market size of the Soil and Plant Health / biostimulant segment Direct
whatever regulatory changes happened, they are, by and large, good for large organized players... So we have grown both in price and volume, and we have been able to migrate our business to... we've taken, for example, one of the biostimulant we had a challenge. So we have moved the production inhouse. And as a result, there is a growth of 16% in quarter 3.

Highlights the company's successful navigation of regulatory challenges and its strategy of in-house production for biostimulants, which contributed to segment growth.

Asked by Viraj

Outlook for international business given tariffs and uncertainties Partial
So overall, I would say, we have done well in spite of the challenges in fiscal year '27. We are still assessing the situation because of the new announcement from China and the new geopolitical context... I don't want to give a, what we call, guidance on the international business. I know we have been able to recover from the setback we had in '24, '25.

Management acknowledges ongoing global uncertainties impacting international business, but notes past recovery and a focus on expanding customer base and registrations rather than providing specific guidance.

Asked by Abhijit Akella

Drivers for gross margin expansion and the 500 bps EBITDA margin improvement target Direct
One is the gross margin. Other thing is really EBITDA. So when I talk about 500 basis points, we are talking about EBITDA margin improvement... But because of the operating leverage, we'll be able to sell more per person or per employee and as a result, we expand our EBITDA margin. So fixed cost actually does not grow as fast as your other business contribution comes.

Management clarifies that the targeted 500 basis points EBITDA margin improvement will primarily stem from operating leverage and efficiency gains, rather than significant gross margin expansion.

Asked by Saurabh Jain

Dependence on China for technical procurement and exposure to export rebate changes Direct
So on a blended basis, still it is more than 40%... this is applicable post April. So let's wait for more details to emerge at this point of time, I think it's not negative for us. I mean it's common for everybody. It will not apply only to us.

Quantifies the company's reliance on China for technicals and provides management's initial, cautious view on the upcoming export rebate changes, noting it's a common industry-wide factor.

Asked by Saurabh Jain

2 min read 5 chapters

Detailed narrative

Q3 FY26 Performance Highlights and Challenges

Rallis India Limited reported a Q3 FY26 revenue of ₹623 crores, marking a 19% year-on-year growth. This was accompanied by a 28% volume growth, though offset by an 8% pricing de-growth. EBITDA for the quarter increased by 29% to ₹58 crores. However, profit after tax (PAT) saw a significant decline of 81% to ₹2 crores, primarily due to an exceptional gratuity provision of ₹40 crores related to wage code implementation. For the nine-month period, topline revenue grew 9% to ₹2441 crores.

Domestic Agrochemical Market Dynamics

The domestic agrochemical market continues to face headwinds, with demand remaining weak due to stressed drivers such as adverse weather conditions and low crop prices, leading to an industry-wide volume decline. Farmer interest in high-value products has dropped. While South & West India experienced sharp demand declines, East & North remained stable. Rabi acreage is higher year-on-year, up by approximately 3% in wheat, oilseeds, and pulses as of January 2026, which is expected to support Q4 sell-out and early Kharif placement.

Segmental Growth and Product Mix

The Crop Care segment grew by 18% to ₹580 crores in Q3 FY26, driven by volume expansion, new product promotion, and increased digital engagement. The Seeds business showed robust growth of 46% to ₹43 crores, benefiting from strong placements in paddy, mustard, and wheat. The Soil & Plant Health category also grew by 16% to ₹73 crores, with both price and volume growth, aided by successful in-house migration of biostimulant production. Domestic B2C revenue grew 13% to ₹391 crores, primarily from a 25% volume growth in fungicides for potato and cumin crops, though negative price impact was noted from liquidating near-expiry materials.

International Business and Global Competition

Exports (B2B) topline surged by 73% to ₹129 crores, demonstrating promising growth due to volume expansion, customer base, and capacity utilization. The CSM segment also grew 26% to ₹46 crores. However, the global agrochemical market, valued at $75 billion in 2025 and projected to grow at a 5.5% CAGR, presents challenges. Pricing power remains limited due to intense global competition, with China's significant role as a primary supplier capping realizations and exposing costs to tariff and policy shifts, such as the upcoming VAT rebate discontinuation from April 2026.

Strategic Initiatives and Future Outlook

Rallis India is focused on long-term value drivers including deepening customer-centricity, portfolio choices, and accelerating product launches. The company launched new products like 'Fateh Nxt' (herbicide) and 'NuCode' (biologicals platform) in 9M FY26. Digital initiatives like the 'Sampark Plus' app and the 'Idea2impact' open-innovation platform are aimed at enhancing demand creation and farmer engagement. Aspirationally, the company targets double-digit revenue growth and a 500 basis points expansion in overall blended margin over the next five years, primarily driven by operating leverage.

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