Capitaline

Analyst Meet / AGM 06-May-20

Conference Call

Rallis India

Biggest challenge before the industry is manpower

Rallis India held a conference call to discuss the results for the quarter ended March 2020 and way forward. Mr. Sanjiv Lal- Managing Director & CEO, Mr. S. Nagarajan- Chief Operating Officer and Mr. Ashish Mehta- Chief Financial Officer of the company addressed the call.
Highlights of the Concall

During the quarter the company merged its subsidiary, Metahelix Life Sciences and the financials represent the merged accounts. The merger of Metahelix has gone through smoothly both at people process level as well as financial alignment.

The company is seeing gradual resumption of operations across the country. Rallis India units at Dahej, Ankleshwar and Lote were permitted to operate in April although with significantly reduced strength.

Rallis also got an FDA approval for producing alcohol based hand sanitizer at its formulation facility at Akola and later at Ankleshwar as well. About 140 kilo litre has been produced and distributed free of its cost to various government department, hospitals, local communities and the Tata trust in various part of the countries

The company utilized part of its shutdown lockdown period to take up annual maintenance shutdown activities for critical jobs at Dahej and Lote.

On the input front while the company faced issues in availability from China during January, the supplies have recommenced with some delays due to logistics issues. These logistic challenges of product shipment during the last quarter itself due to lockdown has been resolved

In Domestic market the rabi season has played out well led by ample water availability which should result in higher output. Advanced forecast for south-west monsoon from IMD expects normal monsoon which bodes well for kharif season

International business continues to perform steadily. Orders and Payments remain on course

The company launched 6 products during FY20. It expects to launch 2 new products every year over the next 3-4 years

The company has revised its trade terms making it more aligned to the market during Q1FY20 to support its partnership with distributor. The company has increased its credit period compared to previous financial year along with increased incentive for payment and penalties for delayed payment. This strategy worked out well as can been seen in improvement in cash position.

In Seed business the company focus was to strengthen its rabi portfolio given it is relatively well placed in the kharif portfolio. The company is focusing on maize and mustard crop in the rabi space. The company is also targeting to build its vegetable portfolio. Seed business is classified under essential products during the lockdown

The company completed Phase I of metribuzin expansion and expects completion of Phase II by June'20. It expects capex of around Rs. 25 crore for addition of 1,000 MTPA.

The completion of the formulation plant at Dahej Chemical Zone is likely to be delayed by 6 months due to COVID-19

During the quarter Metri WDG plant of 300 MTPA capacity and Metri SC plant with 600 KLPA capacity commissioned

The company is setting up state of art R&D facility in Bangalore to further drive its growth with a significant step up in product development for crop protection, crop nutrition and seed business. The design of new centre has commenced.

Cropcare reported revenues of Rs 322 crore in Q4FY20 compared to Rs 318 crore in Q4FY19 while Ebitda was Rs 6 crore compared to Rs 20 crore in Q4FY19. The operations of the company were disrupted due to nationwide lockdown to contain the outbreak of COVID- 19 at certain manufacturing facilities and depots of the company, as a result of which goods worth Rs.16.04 crore could not be dispatched to the domestic market. Further, international shipments were also disrupted due to absence of transportation facilities in the last week of March 2020 resulting in lower shipment of Rs. 53.18 crore. This apart no invoicing was done in domestic market in last 10 days of March'20

The company accounted for MTM losses of Rs 9.9 crore during the quarter due to sharp depreciation of rupee which also impacted Ebitda margin

Revenue growth in Q4FY20 was modest compared to previous year but there was volume growth largely driven by new products

The biggest challenge before the industry is to get manpower. As a company Rallis is assured of supply chain of incoming material has but availability of manpower is going to be challenge

Previous News

Rallis India
( Results - Analysis 20-Jul-22 08:19 )

Rallis India
( Analyst Meet / AGM - Conference Call 20-Jul-22 19:50 )

Rallis India consolidated net profit declines 3.29% in the September 2020 quarter
( Results - Announcements 20-Oct-20 08:31 )

Rallis India to declare Quarterly Result
( Corporate News - 11-Jan-24 10:29 )

Volumes jump at Rallis India Ltd counter
( Hot Pursuit - 02-Mar-24 14:30 )

Rallis India
( Results - Analysis 19-Jan-21 16:07 )

Rallis India consolidated net profit rises 1149.23% in the March 2021 quarter
( Results - Announcements 22-Apr-21 19:45 )

Rallis India to hold AGM
( Corporate News - 21-May-24 12:09 )

Rallis India
( Results - Analysis 22-Apr-21 23:28 )

Rallis India
( Results - Analysis 17-Jan-20 14:26 )

Rallis India
( Analyst Meet / AGM - Conference Call 23-Oct-19 16:07 )