Concall Summary: Rallis India Q4FY20

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Business Update

  •  Have merged Metahelix and Zero Waste within Rallis India
  • There have been gradual resumption of operations in April but with reduced strength
  • Have started manufacturing alcohol based hand sanitizers which have been distributed free of costs at hospitals and Tata Trusts
  • Have utilised part of the shutdowns for annual maintenance activities at two plants 
  • Supplies from China have commenced and logistics issued have been resolved
  • The rabi season has played out well which should result in a good output
  • Had launched 6 new products in FY20
  • Undertaking steps in the seeds business to build a portfolio in the vegetables segment
  • Pricing pressure in B2B business in international markets continue to be felt


  • Investec
  • Prabhudas Liladhar
  • Lucky Investments
  • Edelweiss
  • EMKAY Global
  • Haitong Securities
  • Sundaram Mutual Fund
  • IIFL
  • Vallum Capital
  • Sunidhi Securities
  • Alfaacurate Advisors
  • Vriddhi Capital
  • Valuequest Research


  • The provisions on receivables have been taken as a matter of prudence and if collections happen they will be reversed
  • There is a bit of a challenge from the point of availability of labour even though manufacturing facilities have started and this will be for the whole industry
  • There have been supply problems due to non availability of logistics personnel but company is focusing on providing products in green zones and orange zones and areas of priority
  • According to reports by Crisil there is an expected median decline of 5% in the agriculture sector
  • Have refined credit control framework in these times while supplying materials to the distributors
  • In the existing portfolio of CRAMS one molecule which is a polymer which goes into aerospace industry is seeing pressure in pricing due to the condition of aerospace industry
  • IN metribuzin there is a key overhang of inventory in the American markets and this will only correct by Q2 of current year
  • The commissioning of the new facility in Dahej will go back by two quarters
  • In certain cases where there are imported raw materials and in some cases where raw materials are domestically sourced price movement is different among products
  • The introdiction of seeds for mustard crop has played out well and hopeful on this particular product
  • The inventories are higher due to increased purchases and also due to the Covid issue invices couldn’t be issued which led to this increase
  • The issues at port are slowly getting resolved and exports have also started happening
  • The monsoon forecast for the kharif season is positive and supply issues for seed industry are not too many as it is the first to open up
  • At the demand level have seen farmers not coming out to buy like last time
  • The management is completely focused on ensuring availability of its products across the market
  •  The size of the India agrochemical industry which is focused on exports is huge and expecting governments in foreign countries also are focusing on ensuring agriculture industry gets back on track
  • The capex that could be done could amount to Rs 100 crores and there could be some delays but not shying away from putting up growth capex
  • The raw material availability from China has improved but challenges still remain which are slowly settling down 
  • The price movement in raw materials have been mixed and while some have gone up some have gone down as well
  • The dependency on China for raw materials is around 54-55%
  • The agri industry is relatively less affected than the other industries like aviation and hospitality but the situation is dynamic and it is changing day by day
Also Read on FinMedium:  Concall Summary: Muthoot Capital Services Ltd Q4FY20

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Karan Sharma

Karan Sharma

The Concall Summary Guy | CFA | Investor
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