Rallis India held a conference call on 20th October 2021 to discuss the results for the quarter ended September 2021 and way forward. Mr. Sanjiv Lal- Managing Director & CEO and Ms. Subhra Gourisaria- Chief Financial Officer of the company addressed the call.

Highlights of the Concall

• Crop care business performed satisfactorily but seed business suffered significant headwinds. Crop Care business grew 7.7% in Q2FY22 and 11.4% in H1FY22 while seeds business degrew of 65% in Q2FY22 and 11.8% in H1FY22.

• Erratic monsoons impacted the demand and revenue momentum for crop care segment while rising input prices has led to margin compression. Seeds business revenue degrew significantly due to higher sales return than planned

• Q1FY22 was an extremely difficult period for the entire seed business industry as the growth got impacted owing to increased demand of illegal herbicide tolerant cotton seeds and crops shift due to the prevailing commodity prices outlook as well as the erratic weather patterns

• Seeds business was also hampered due to reduction in hybrid paddy area in Uttar Pradesh and few other states, excessive rainfall in Bihar leading to reduction in paddy acreage, significant reduction in Bajra area due to a long pause in rainfall in northern states and increased proliferation of Illegal BT/HT/4G/5G cotton

• The geographical rainfall distribution showed severe impact on Central and North Western region during crucial months of July - August

• Raw material shortage mainly due to supply issues from China has caused significant price escalations in key products.

• Export business at a broad level continues to perform well barring the freight and logistical challenges

• The company continues to make steady progress towards its stated objective of improving product mix by introducing new products and widening distribution reach having added six new products during FY20 and four new products in FY21 respectively. The company has added six crop protection products during H1FY22.

• The company introduced three crop protection and three crop nutrition products during Q2FY22. The company had launched rice herbicide in crop protection category as well as fungicide for fruits and vegetable during Q1 and also introduced one product under the crop nutrition category. It also mentioned that it has been able to scale up the launches done during last year.

• The company has a distribution network of close to 6700 distributors between crop care and seeds business and approximately 80,000 retailers to cover up almost 80% of the district's

• The company is focusing on in licensing types for mustard and vegetable seeds till the time it is able to commercialize its own hybrids.

• The company has launched an important strategic initiative - One Rallis approach to the market towards end of September to leverage the synergy benefits from its strong presence in specific geographies and seeds into crop care business, and vice versa. The sales and demand generation teams have been integrated under one random. This will allow it to present a single face to the trade and to the farmers for both the categories. One Rallis initiative currently is introduced in the eastern part of the country.

• The company continues to explore contract manufacturing opportunities with potential partners and discussions are progressing satisfactorily

• The company is putting efforts for sourcing some of its raw materials domestically with two raw materials for one of its products being now locally sourced

• The company has successfully completed the first phase of its formulation plant at Dahej and is waiting certain regulatory approvals before it can start invoicing from that facility. And it is on track to complete multipurpose plant (MPP) at Dahej. Further, it has also completed the Ankleshwar debottlenecking projects for two of its active ingredients. The company expects capex of around Rs 250 crore in FY22