Key Highlights

FY 19 was yet another challenging year for crop protection industry due to adverse weather conditions, fluctuation in raw material prices due to China disruptions, adverse forex movements etc.

Due to Chinese disruption, raw material costs were up by 15% for the company. The landed costs got even higher due to rupee depreciation in FY 19.

International business accounts for around 35% of total sales. Management remains optimistic on the international business in the coming years with significant opportunities in the product distribution and contract manufacturing space, led by strong partnerships.

The company will see the much awaited revenues from Dahej in FY 20. There are couple of large MNC companies for whom the company is doing CRAMS business.

The company had filed 5 patents in FY 19 which includes 2 for metahelix. Cumulative patents for products filed till FY 19 stood at 29.

Fruits and Vegetables segment continued to do well once again and has seen a growth of around 10% YoY in FY 19. Rallis increased its presence in this segment.

The new product innovation led turnover was around 10% of total turnover for FY 19.

Metahelix reported a 5% increase in net sales to Rs 340 crore with PBT of Rs 23 crore. The company has now added more variants of seed and expanded its portfolio. Management is still confident of significant improved performance from Metahelix going forward.

The company incurred a capex of around Rs 75 crore for backward integration and for expanding its manufacturing facilities for critical inputs in FY 19.

Overall, with backward integration in place, the company will overcome the raw material dependency issue on China to a large extent. With Dahej expected to perform well in FY 20 the company should do well.

Rainfall till 15 June 19 was more than 32% below normal. However post 15 June, the monsoon has increased its pace and the deficiency is gradually coming down. For FY 20, IMD predicts a below normal monsoon. However things have changed in the recent past and the company expects rainfall to pick up going forward.

Short term industry outlook as a whole is challenging given its too early for giving a number on monsoon distribution geographically