Performance for 9 months ended Dec 18

Net sales for 9 months ended Dec 18 stood at Rs 1644.27 crore, up by 16% YoY. OPM was lower by 200 bps to 14.2% restricting the OP growth to 2% to Rs 234.14 crore. Other income was up by 70% to Rs 19.70 crore. Interest cost was higher by 15% to Rs 3.60 crore and depreciation was lower by 2% to Rs 35.57 crore which thus resulted in a 6% increase in PBT to Rs 214.67 crore. After paying total tax of Rs 61.24 crore and MI of Rs 43 lakh, consolidated PAT for the 9 months ended Dec 18 stood at Rs 153.86 crore, up by 4% YoY.

Commenting on the performance and developments, Mr. R. Mukundan, Managing Director & CEO said

"We have delivered a steady revenue performance for the quarter despite multiple headwinds in the domestic market. However recent margin pressure experienced across the Industry have impacted profits. Rallis is in the process of a strategic transformation with efforts being directed towards leveraging our strengths in both domestic and international markets. We are working towards improving the depth and width of our product portfolio by leveraging our in-house R&D capabilities. The board has approved Rs 100 Cr investment expanding capacity in key products. We are confident that our initiatives, coupled with supportive macros, will help us deliver sustainable value for our shareholders. Additionally, the board approved the merger of Metahelix which will enable us to offer a unified approach to our Customers."

Other updates

Revenue growth of 7% on the back of steady performances in Domestic and International markets. Strategic initiatives in terms of strengthening dealer network and revised incentive structure aided domestic performance. Exports revenue expanded owing to better performance in US & Europe

Higher input cost – imports from China resulted in profitability and margin compression. Working towards improving product mix share of value added / specialty products to offset impact of rising raw material

Margins remain constrained owing to higher raw material prices. Expect profitability to pick up going forward following growth specific initiatives undertaken towards driving growth

The Board of Directors of the Company has accorded its consent to the merger of Metahelix Life Sciences Ltd (a wholly owned subsidiary of the Company) with the Company under a Scheme of Amalgamation subject to necessary statutory approvals from various regulatory authorities.

The Company's strategic initiatives towards driving domestic and international business are starting to deliver positive results. Some of these initiatives include:

Domestic business

–Refreshing distribution channel refresh

–Adding distributors to enhance growth

-Revitalized dealer incentive structure

-Higher variable incentives linked to revenue targets

-Expansion of credit period to support select product growth

-Increasing focus on specialty product launches

-Improving connect between distributors and top management

International business

–Investing in capacity expansion

-Registration in International markets

-Increased higher margin exports to smaller South Asian countries