Shares of Rallis India Ltd. fell over 4% on Friday, October 23, after the Tata Group company’s September-quarter results came in better-than-feared, but were weak to begin with.
The results for the quarter were supported by resilient business-to-business (B2B) and Crop Care performance that offset weakness in the seeds business.
On Thursday evening, Rallis India reported a 16% year-on-year decline in net profit to ₹85 crore in Q2FY27 from ₹102 crore in the year-ago period. However, profit exceeded the CNBC-TV18 poll estimate of ₹64 crore.
Revenue remained largely flat at ₹858 crore against ₹862 crore a year earlier, but came in above the poll estimate of ₹782 crore.
Earnings before interest, tax, depreciation and amortisation (EBITDA) for the September quarter fell 13% YoY to ₹134 crore from ₹154 crore last year. The figure was higher than the CNBC-TV18 poll estimate of ₹112 crore.
EBITDA margin contracted to 15% from 18% in the corresponding quarter last year, but was above the poll estimate of 14%.
The overall weak performance was attributed to higher input costs, volatility in demand and elevated sales returns, alongside the impact of weak monsoon conditions and patchy demand.
Crop Care and B2B businesses provide support
Rallis India’s Crop Care business recorded 4% year-on-year revenue growth to ₹788 crore, while its EBITDA declined 2% to ₹126 crore.
The Soil and Plant Health segment reported 22% year-on-year revenue growth. B2B revenue rose 17%, while exports, including custom synthesis and manufacturing (CSM), grew 18%.
The company launched four new Crop Care products during the quarter, comprising two fungicides, one herbicide and one insecticide.
Seeds business weighs on performance
The seeds business remained a weak spot, with revenue declining 31% year on year to ₹70 crore, attributed to lower paddy acreage and higher Kharif sales returns.
The segment’s EBITDA fell to zero from ₹25 crore in the year-ago quarter, adding to the pressure on overall profitability.
While resilient Crop Care and B2B performance helped the company beat estimates, higher input costs, demand volatility and sales returns continued to weigh on earnings.
Rallis India share price
Shares of Rallis India are currently trading 3.7% lower on Friday after the results announcement at ₹196.1. The stock is down 34% from its 52-week high of ₹298.