Rallis India held a conference call on 20^th October 2020 to discuss the results for the quarter ended September 2020 and way forward.Mr. Sanjiv Lal- Managing Director & CEO, Mr. S. Nagarajan- Chief Operating Officer and Mr. Ashish Mehta- Chief Financial Officerof the company addressed the call.

• The agrochemical industry has been amongst the handful of industries that has been able to recalibrate and restore normalcy across business operations following the COVID-19 led challenges. Barring a few issues the industry is more or less back on track. Domestically the industry has been very buoyant led by normal monsoon and remunerative prices, all of which has resulted in activation in agricultural activity.

• The company expects current year to be good as adequate water levels in reservoir bodes well for the upcoming Rabi season. With acreage and crop prices improving, the company believes the sector is well placed.

• The company witnessed a moderate quarter-ending with 3% decrease in revenues YoY, despite strong domestic performance of 7%. Domestic Crop Care business grew by 8% YoY while Seeds business registered growth by 29%. However, international revenues were under pressure, recording a decline of 29%. EBITDA margins were stable at 16.1% similar to 16.0% in Q2FY20.

• Gross margin increased as the product mix is slightly more in favor of domestic b2c business, which is a higher margin business.

• Overall Crop Care division revenue declined 6% YoY mainly due to drop in international business. However, domestic crop care business grew 8% YoY largely contributed by volume growth of 10% and a bit of price correction downward. Pressure on Metribuzin in the International business continued in the second quarter as well-both on volume and price front. Contract Manufacturing business also witnessed a de-growth in both the products --Metconazole & PEKK (Poly Ether Ketone Ketone)

• In the international business, barring Metribuzin,many of the other products registered volume growth over previous year. However the company expects things to gradually improve from here on, which should drive international business.

• Seeds business registered growth of 29% led by volume growth in Maize and better price realization in Paddy

• Inventory levels were high compared to previous year largely due to stocking of critical raw materials to meet the demand for Q3FY21

• The company's approach to prioritizing cash flow as resulted in an increase of cash from operations of Rs 276 crore in Q2FY21 versus Rs 227 crore in the previous year quarter.

• Collection focused initiatives have helped the company continue strong performance on collections resulting in reduced working capital days to 65 from previous year of 104 days.

• The company has opted for lower Income tax rate from current year. The effective tax rate is 24%

• Domestic business continues to grow at a steady rate while internationally as well, things are stabilizing which should help overall growth of the business going forward.

• The company expects a growth of 10-12% in the agriculture sector for the current financial year.

• India tends to be on the lower side of agrochemical consumption of 0.6 kg per hectare of land compared to some benchmarks, which are maybe 5-6-7 kg per hectare of land.

• The company overall capex implementation has been impacted due to COVID 19 and delayed by 2-3 months. Formulation Plant at Dahej is expected to be now completed by March 21.

• The company expects capex of Rs 160-170 crore in FY21 and a similar amount as well in FY23