Rallis India held a conference call on 22nd July 2021 to discuss the results for the quarter ended June 2021 and way forward. Mr. Sanjiv Lal- Managing Director & CEO, Mr. S. Nagarajan- Chief Operating Officer and Ms. Subhra Gourisaria- Chief Financial Officer of the company addressed the call.

Highlights of the Concall

• Domestic demand during the quarter was quite healthy and there was a good positive growth over last year. Even in International business the company witnessed the growth momentum.

• The company did not see any panic buying from the trader and farmers domestically as it had seen last year. And also unlike the first wave, the second wave of the pandemic has impacted rural hinterland with most distributors and dealers being directly or indirectly affected by it.

• he overall headline numbers for rainfall during the current monsoon appears to be healthy but the timing and the spatial distribution hasn't been uniform

• Prices for commodity like soya, maize, pulses and cotton among field crops and green chilies, grapes and apples amongst fruit having higher prices Prices forbajra has fallen significantly year on year.

• Covid related disruptions continue over logistical moments, in turn impacting cost and availability of key raw materials.

• Revenue growth was 11.7% during Q1FY21 given steady performance across domestic and international markets. Crop Care grew by17.4% and Seeds by 3.1%

• Crop care revenues grew by 17.4% YoY. Domestic crop care business grew 31% YoY while international business was lower by 8% in Q1FY22 compared to Q1FY21

• Seed business grew 3.1% in Q1FY22 supported by volume Growth in Paddy. The growth in seed business was impacted by the purchase of illegal cotton seed by farmers and crop shifts to Soyabean.

• Domestic business stood at 72% of total revenues in Q1FY22 (64% in Q1FY21) while international business was 28% (36% in Q1FY21)

• The competitive pricing environment has limited company's ability to pass on increased input costs impacting margins

• The company has also been adversely impacted by the increased cost for both inland and ocean freight across domestic and international business

• Export income was negatively impacted due to ambiguity and delay and announcement of the export incentive schemes

• Domestic formulation business registered 34% growth year on year basis driven by strong performance of some of its flagship brand

• The company has delivered its guidance of introducing a minimum of two new products annually in Q1 of FY22.The company has launched three new formulation products -One is product from its own 9(3) formulation Pepe (Pendimethalin+Penoxsulam) targeted as a herbicide in Rice and two other products, which were also launched through inlicensing- 9(4) formulation Preet Plus (Pretilachlor) targeted as a Rice herbicide and Kaushal (Propineb) targeted as a fungicide in F&V segment.

• Metribuzin sales were higher than Q1FY21 but it is yet to pick up to a satisfactory level.

• The company has obtained new registrations in markets in Africa and Southeast Asia as well

• The company is focusing towards building a Rabi portfolio which will iron out the cyclicity in its business. The company will leverage in licensing opportunities for mature and vegetable seeds till the time its own hybrid seeds get commercialized.

• Formulation Plant at Dahej, CZ -Phase 1 is expected now to be completed by Q2 FY22 while work on MPP plant is on track.

• The company expects capex in FY22 to be around Rs 250 crore.