Key Highlights

Global crop protection market declined by around 2.4% in FY 17 as prices of many commodities continue to remain under pressure and higher inventories added more pressure on sowing and market was further weakened due to lower pest pressures.

Delayed onset of monsoon, excess rain in some pockets and dry spells in some areas impacted the overall agro chemical consumption in India in FY 17.

Southwest monsoon was 3% below normal but was still better than past couple of years. The only issue was the distribution pattern, as not all the States got the water at right time. While Tamil Nadu, Kerala, South Karnataka saw a drought like conditions, there were floods in Telangana, Coastal Andhra Pradesh, North Karnataka.

Ongoing spraying of insecticides and herbicides got affected for crops such as Cotton, Paddy and Chilly. Except for Pulses, the acreage for rest of all the crops was more or less flat on YoY basis in FY 17.

Fruits and Vegetables segment continued to do well once again and has seen a growth of around 8% YoY in FY 17. Rallis increased its presence in this segment.

The company got a major breakthrough in Dahej with 2 major businesses in contract manufacturing. The test and qualifications have been completed and expects the commercialisation to commence from Sep 17 quarter onwards.

Company would spend around Rs 50 crore for the contract manufacturing segment in FY 17.

Going forward in FY 18, the company plans to roll out agri solutions across India in Kharif season. The company has chosen 45 territories where it will be working closely for further penetration.

The company launched 3 new products in FY 17 which includes fungicide for paddy, insecticide for chilli, cotton and brinjal and other seed treatment solutions for groundnut.

Metahelix has seen a 13% increase in net sales to Rs 287 crore in FY 17 and expects sales growth to further strengthen going forward with successful launches of hybrids of paddy and millet. The company is working on many other seeds development including for cotton.

For FY 18, while IMD predicts a normal monsoon, so far June 17 rainfall is a worry. However many times rainfall has improved from July in the past and the company also expects rainfall to pick up going forward.

Actions like waivers of farm loans etc add further worries to the current scenario. Such actions delays and affects the sentiment. This will lead to some pressure on volumes in near term for the company, as there will be delays and deferments.