Rallis India

Rallis India, a Tata Enterprise company in the area of crop protection, posted good numbers for Q2FY14. Its consolidated net sales rose 24% (YoY) at Rs.597 crore and net profit came in at Rs.75 crore, up 21%. For H1FY14, the company crossed two milestones – firstly revenue crosses Rs.1000 crore, coming at Rs.1006 crore and secondly, net profit crosses Rs.100 crore, coming in at Rs.102 crore. These are excellent numbers given the fact that it had ended FY13 with a net profit of just Rs.119 crore and with two more quarters to go, FY14 holds a lot of promise.

This is one of the best seasons for such agri companies and monsoon has been very good this year, Kharif sowings registered a 4.4% increase and this means we will that a corresponding increase in foodgrains production. Also the good rainfall means the groundwater has increased and so has reservoir storage which means good crop next kharif too.

If one may recollect, in Sept 2010, Rallis had acquired 53.5% stake in Metahelix, which has since been increased to 7.02%. This acquisition marks its entry into the seeds space, giving it access to the distribution network of Tata Chemicals and also of Metahelix. And more importantly, Metahelix which was making losses, has turned around and one can see contribution from this segment in the current fiscal. In an all-cash deal, funded through internal accruals, Rallis acquired 51% stake in Zero Waste Agro for Rs.29 crore and expects revenue of Rs.100 crore over next 5 years from this acquisition. Post this acquisition, it launched GoGreen, a special type of manure produced with bagasse purchased from sugar mills and proprietary technology. The company added more than 25,000 farmers and 60,000 acres under its grow More Pulses programme in Maharashtra, Madhya Pradesh, Karnataka and Tamil Nadu and plans to cover 150,000 acres and 100,000 farmers by the end of FY14. Q1 and Q2, are seasonally the best as it is the sowing season and the second half will be more subdued than H1. Yet, it has nothing to worry as its performance for current fiscal promises to be much ahead of FY13.