Rallis India Limited — Q4 FY25 earnings call

Call held 24 Apr 2025

Management summary

Rallis India reported a challenging Q4 and full year FY25, with revenue de-growth in Q4 and a significant decline in full-year PAT, primarily due to export business challenges and pricing pressures. Despite this, the domestic Crop Care B2C segment showed volume growth, and the company is optimistic about new product launches and a favorable monsoon forecast for the upcoming Kharif season. Management highlighted efforts to expand customer base, improve cost competitiveness, and focus on domestic brands amidst global uncertainties.

Highlights

  • Q4 FY25 revenue stood at ₹430 crores, a 1% de-growth YoY.

  • Q4 FY25 PAT was a loss of ₹32 crores, compared to a loss of ₹21 crores in the previous year's Q4.

  • Full Year FY25 PAT was ₹125 crores, a 15.5% decline from ₹148 crores in the previous year.

  • Crop Care B2C business revenue for Q4 was ₹222 crores, with a positive volume growth of 3% despite price pressures.

  • Full Year FY25 Crop Care B2C revenue grew by 4% to ₹1,578 crores, with robust volume growth of 9%.

  • Soil and plant health businesses clocked 23% growth, and herbicide businesses grew by 24% for the full year.

  • Export business saw a 6% growth in Q4, while CSM business was impacted by customer scheduling.

  • Cash and liquid fund balance stood at a healthy ₹439 crores as of March 31, 2025.

Concerns

  • High carry forward inventories and pricing pressures in the agrochemical sector

  • Potential dumping of cheaper products by China in India

Key financials

3 periods

Headline

  • Cash & Liquid Funds
    ₹439 Cr

Q4

  • Revenue
    ₹430 Cr
    YoY -1.4%
  • PAT
    ₹-32 Cr
    YoY +52.4%

FY25

  • PAT
    ₹125 Cr
    YoY -15.5%

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

SegmentFY25 RevenueFY25 Revenue GrowthQ4 Revenue
Crop Care B2C₹1,578 Cr4%₹222 Cr
Export Business (B2B)——₹150 Cr
Seed Business₹418 Cr0.48%₹25 Cr
Soil and Plant Health₹220 Cr23%—
Herbicide Business₹300 Cr24%—

Guidance & targets

Market Share

  • Growth vs Industry Average Market Share · FY26 · Medium confidence 5-7%
    I think our effort is to grow faster than industry average of 5 to 7% depending on the product and category.

    — Dr. Gyanendra Shukla, Managing Director and CEO

Capex

  • Capital Expenditure Capex · FY26 · High confidence ₹75-100 crores
    No, no, it would be around Rs. 100 crore. Rs. 75 crore to 100 crore.

    — Subhra Gourisaria, Chief Financial Officer

Profitability

  • EBITDA Margin Profitability · short-term to long-term · Medium confidence maintain
    We will try to maintain EBITDA margin in the short-term term or long-term actions on improving business in the right direction.

    — Dr. Gyanendra Shukla, Managing Director and CEO

Product Portfolio

  • LAAFA product volume Product Portfolio · future · Low confidence million-liter kind of product
    Our ambition would be that, you know, given our brand strength, can we make a kind of a million-liter kind of product?

    — Dr. Gyanendra Shukla, Managing Director and CEO

Risks & concerns

  • High carry forward inventories and pricing pressures in the agrochemical sector

    high

    The industry continues to be plagued with high carry forward inventories at lower prices, leading to pricing pressures.

    Management acknowledged

  • Potential dumping of cheaper products by China in India

    high

    Management stated that if China cannot sell in major markets, they might dump products at lower prices in other markets like India, creating competition and price reduction.

    Both acknowledged

  • Tight seed supplies and shrinking cotton acres

    medium

    Seed production faced significant challenges for a second consecutive year with volumes under pressure, and cotton acres are shrinking.

    Management acknowledged

  • Ongoing weather irregularities and water-related uncertainties

    medium

    Erratic rainfall and localized droughts, along with persistent water-related uncertainties, pose challenges to the sector.

    Management acknowledged

  • Geopolitical developments causing short-term disruption in export market

    medium

    Management noted that geopolitical developments may cause some disruption in the short term in the export market.

    Management acknowledged

  • Acephate not exempt from US tariffs

    medium

    Management confirmed that Acephate, a key product, is not in the exempt category for US tariffs, unlike Pendimethalin and Metribuzin.

    Analyst acknowledged

Areas of evasion (3)

  • Specific numerical guidance for FY26 revenue and margins
  • Detailed status and profitability outlook for the MPP project
  • Precise impact and strategy regarding potential China dumping

Q&A highlights

1 direct, 1 evasive
Dichotomy in domestic vs international pricing Direct
Yes, so I think they are completely unrelated. When we say domestic market, if you see our volumes for Quarter 4 are more or less for crop protection flat. Now there are two things happening. We have one product in the chili crop which goes in Quarter 3 and Quarter 4. There is another product which is a very good product which goes to control rice plant hopper.

Analyst questioned the differing pricing trends between domestic (skewed) and export (favorable) markets, leading to management explaining product-specific dynamics in the domestic market.

Asked by Rohit Nagraj

FY26 Revenue and Margin Guidance Partial
So, I mean, one of the challenges, so I mean crop area remains same, right? Market grows with a combination of volume and price and so the only way we grow is price and selling more and getting markets there. I think our effort is to grow faster than industry average of 5 to 7% depending on the product and category.

Analyst sought specific FY26 revenue growth (e.g., 10%) and margin guidance, but management provided a qualitative target of growing faster than the industry average (5-7%) rather than a hard number.

Asked by Darshil Jhaveri

Impact of China tariffs and potential dumping on supply chain Evasive
I think there is a lot of guesswork going on. At this point of time, it's very, very difficult to say how things will pan out. Worst case scenario, China starts dumping at a cheaper price in India, but I guess, is there a possibility? The answer is yes. But we haven't seen significant signs of that at this point of time.

Analyst inquired about the impact of China's reaction to tariffs, potential dumping in India, and its effect on Rallis' international portfolio. Management acknowledged the fluidity and uncertainty, indicating a lack of clear visibility on this critical geopolitical risk.

Asked by Riju Dalui

3 min read 8 chapters

Detailed narrative

Q4 & Full Year FY25 Financial Performance

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.

Domestic Crop Care Business Growth

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.

Export and CSM Business Challenges

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.

Seed Business Performance and Outlook

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.

Industry Landscape and Monsoon Forecast

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.

Strategic Focus and New Product Launches

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.

Capital Allocation and Capex Plans

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.

Global Market Dynamics and China Impact

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.

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