Rallis India held a conference call on 20 October 2022 to discuss the results for the quarter ended September 2022 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

• Q2 was a challenging period for the domestic business as adverse monsoon patterns impacted trade and on ground activities. Overall monsoon during the season remained 7% in excess of normal compared to the 1% deficit of the previous year. Distribution remains erratic, with 13 subdivisions experiencing excess rainfall while 17 receiving normal and six remaining deficit. Delayed monsoon and erratic distribution impacted sowing which was 1% lower compared to the previous year.

• Sowing activities notably REITs was down by 4% year on yea, pulses was down 6%, oil seeds down by 2% while core theory was up by 5%, and coffee sowing was higher by about 6%.

• Despite uneven distribution during the monsoon season, water storage levels across reservoirs to rather heavy level. Higher reservoir levels coupled with good soil moisture, augurs well for a successful rabi season.

• Revenue growth of was 31% from the previous year, driven largely by international business performance. Domestic business was mainly impacted by erratic monsoons, lower pesticide use due to excess rains and somewhat low pest infestation across some regions impacted overall volume growth for the business

• Key paddy growing states in eastern India - Bihar, Jharkhand and West Bengal received deficit rains which led to a decline in sown area. In addition to paddy cotton crops also got damaged in three states, including Maharashtra, Telangana and Gujarat due to excess rains.

• EBITDA for the quarter rose 34% to Rs 118 crore translating a margin of 14.4% due to the higher growth.

• PBT margins are lower with respect to last year, driven by higher depreciation and lower investment and other income.

• The company undertook calibrated price hikes during the quarter but the overall quantum wasn't commensurate with higher input prices leading to lower profitability specifically in international business

• The company has so far introduced two 9(3) products and four 9(4) products during the year. These products and largely directed towards scaling up business in cotton and Paddy. Rallis India launched Clasto (Pyrifluquinazon), a 9(3) insecticide for Whitefly on the Cotton crop,Capstone, a 9(3) fungicide for Paddy blast disease, and 9(4) products viz. Clue (Pymetrozine) for Paddy BPH, Onto (Quinalphos) Broad spectrum insecticide for Multiple Crops, Castello (Difenoconazole) fungicide for Grapes, F&V. It launched two products in the Crop Nutrition portfolio viz. Rallizin (FCO- Zinc based) and Paclo 9(4)

• Overall environment remains challenging in seed business.

• The company is working towards reducing its dependence on China for meeting raw materials for some of its products.

• The company expects the performance to pick up in the second half of the fiscal year.

• The company expects Dahej SEZ MPP project to commission during current financial year and revenue streams to start from FY 24

• The company added more than 20 new customers in last 3 years expanding penetration and export destination

• The company expects its international business revenue share to increase from 37% in FY22 to 40% by FY25

• The company expects margins to be under pressure in international business.