RALLIS INDIA

Current Market Price-: 312 Rs

Rallis India is a 100% debt free subsidiary , part of Tata Group company Group Co with a history of over 150 years. The company is into manufacturing of Agrochemicals and is present across the value chain of agriculture inputs – from seeds to organic plant growth nutrients. Rallis is also in the business of contract manufacturing for global corporations.

Incorporated in the year 1948. Rallis India, succeeded Rallis Brothers and became member of Tata Group. From a solo play on agrochemicals, the company has come a long way to make its presence felt across the value chain of agriculture inputs – right from seeds to organic plant growth nutrients along with a suite of package of practices and services. 

Today Rallis is one of India’s leading crop care companies. It is known for its deep understanding of Indian agriculture, quality agri-inputs, branding and marketing expertise and a strong product portfolio of comprehensive crop care and seed solutions. Company has factories spread over 4 locations, with large enough capacity in the country today, producing more than 10,000 M.T. of technical grade pesticide and about 30,000 Tons/Litres of formulations per annum. Company has in use TATA Business Excellence Model which is the driving force across all the units and KAIZEN/ TPM with emphasis on analytical tools is used for continuous improvement.

Rallis is engaged in research, development, production, processing and distribution
of hybrid seeds in the domestic market for field crops including Paddy, Maize, Millet, Cotton and Mustard. Its vegetables seeds portfolio includes Chilli, Okra, Tomato, Gourds, etc. and this is supported through partnerships with leading players. Rallis has been closely connected to around 1.5 million farmers through its outreach programmes. 

Rallis has also partnered with several world leaders in the agrochemical business in toll manufacturing. Company offers customized services to clients in accordance with their requirements as well as their quality standards.

Company has vast distribution network covering 80% of India’s districts with more than 1500 dealers and 40,000 retailers across India, carrying its products to the farmer’s doorstep

Business/ Products

Domestic Crop Protection

Further domestic crop protection has been categorised in to three different categories.

• Pesticides-: Rallis India’s range of pesticides has been further categorised in to three different categories which includes Insecticides, Fungicides and Herbicides. These pesticides has been designed keeping the Indian crops in perspective, with emphasis on rice, cotton and vegetables. 
• Some of popular products in fungicides such as Contaf, Contaf Plus, Master and Fujione, 
• In weedicides such as Fateh, Tata Metri, Tata Panida and 
• In insecticides such as Tata Mida, Reeva, Asataf, Manik etc.

Key Aspects Crop protection-: 

• Launched 4 new products in Crop Protection (including 3 in-house formulations) and 6 new products in Crop Nutrition (including 2 in Biopesticides) 
• Enhanced reach through dealer network realignment, resulting in 5% increase in distributor network 
• Working on New Brand Architecture and rolled-out 26 products in FY 2020-21. 
• Domestic Formulation business registered 14% revenue growth YoY. Strong performance of flagship brands like Blitox, Contaf, Takumi, Master, Panida and Tata Metri 
• Identified category, segment and portfolio gaps for future product development. More than 20 segments across categories have been chosen for new product development and commercialisation 
• For International business Company has Acquired 9 new registrations.

Seed treatment and Chemicals 

Some of the top most products by rallis India in this category include

• Tata Mida 70 WS
  Its Technical is Imidaclorpid 70 WS. It is a novel insecticide belonging to new generation NEONICOTINOID group of chemicals. It is an excellent insecticide for control of sucking pests in Cotton, Okra and Chilli.
• Glazer 35 WS
  Its technical is Metalaxyl 35 WS. It is used for protection from pre and post emergent seedling blights and fungal seed rots in Maize, Bajra, Sorghum & Sunflower.
• Tata Mida 600 FS
  Its technical content is Imidaclorpid 48% FS. It is a new generation insecticide belonging to NEONICOTINOID group. It is less toxic, systemic insecticides with a broad spectrum of activity for controlling sucking pests such as Jassids, Aphids, Whitefly and Thrips in cotton, okra & Sunflower.
• Captaf 50 WP
  Captaf 50 WP is an organic, broad-spectrum, contact fungicide based on CAPTAN as the active ingredient. It is ideally suited to control diseases like Scab, Brown rot, Damping off, Downy Mildew, Fruit rot, Clump rot, various Leaf -spots including Tikka disease, Early and Late Blights and Dry root rot diseases effectively.
• Trooper
  TROOPER is a broad spectrum fungicide for the control of seed and soil borne diseases. It has both systemic and contact mode of action. It also acts as a plant growth stimulant.

House Hold products 

This includes a new generation Termiticide that contains Imidaclorpid 30.5% SC. It is a systemic insecticide for control of termites in buildings, which can be, used both for pre and post construction treatment. It is first non-repellent liquid Termiticide with a unique mode of action to control even toughest subterranean termite infestations through a process called “Lateral Soil Movement”. Lateral Soil Movement ensures no contamination of underground water.

Termex is a new generation Insecticide for Termite control that contains Imidacloprid 30.5% SC as the active ingredient. It is a systemic and contact insecticide for the control of Termites in buildings, which can be, used both for pre and post construction treatments. It is indigenously developed, manufactured and marketed by Rallis India Limited.

Seed Division

Seed Division (erstwhile Metahelix Life Sciences Ltd) is an agricultural biotechnology company focusing on developing traits and technologies for crop protection & improved productivity. Hybrid Seeds and traits are commercialized.

Seed Division also provides customized research to select global Ag-biotech business using its proprietary technologies in crop transformation and functional genomics. Further Seed Division is developing transgenic cotton and rice for insect protection using its proprietary gene constructs and transformation protocols.

Seed Division is based at Bangalore, India which is home to a growing number of new-age high technology ventures.

• Bt Cotton: Bollworm and Spodoptera control are critical for ensuring a good commercial crop. Seed Division has developed two versions of Bt cotton.
• Bt Rice: Seed Division has developed a Bt Rice hybrid that controls rice Yellow Stem Borer (YSB) using the Bt based Cry1Ac gene.

CROP NUTRITION

Crop Nutrition business of the Company consists of Bio fertilisers, Bio stimulants, Secondary & micronutrients, Water soluble fertilisers, Organic fertilisers and Biopesticides. 

Rallis has a good range of specialist solutions which give the plants the micro nutrients and growth requirements for a healthy crop. Ralligold GR is one of the branded yield enhancement products.

With a view to utilize extensive distribution network to the fullest, company markets products of other well-known International suppliers such as Borax Europe Ltd as well.

Agri Services

Rallis has ample scope in providing Agri services to the farming community. Building upon the concept of Farmer Family called ‘Rallis Kisan Kutumba’ the Company has initiated a programme to drive up productivity of pulses called “MoPu – More Pulses”. Rallis initiative of “Samrudh Krishi” imparting agri based knowledge from seed to harvest to farmers has expanded in new geographies. Rallis is currently covering Grapes, Chili and Pomegranate.

Also as part of Organic Compost, Rallis launched GeoGreen with the aim of improving soil health, and in a short span GeoGreen is established as a brand for soil conditioner. 

Rallis GeoGreen is a rich source of ‘organic carbon’ capable of supporting and enhancing biological activities in soil. GeoGreen improves the soil health to have the sustainable productivity enhancement.

Biopesticides

The Company successfully launched and promoted 2 botanical biopesticides through strategic partnerships. The promotion of biopesticides reflects the Company’s commitment to integrated pest management. 

As a strategic business plan for FY 2020-21, the Company consolidated its Plant Growth Nutrition, Foliar Application & Fertigation and Soil Conditioners (GeoGreen) portfolios under one vertical – Crop Nutrition. Additionally, a new business category – Biopesticides was also introduced during the year. 

4 new products were launched during the year in the water soluble fertilisers category, Aquafert FNP – Potato, Onion, Vegetables and Aquafert Fertigation – Grapes grades, Grosmart in Bio stimulants category, Flowbor in secondary and micronutrients category 

International Business

Rallis India exports to more than 70 countries around the globe. Rallis continues to expand its international presence through Alliance partnership and direct distribution. Over the years, the company has invested substantially on registrations, product development, production capacities and building relationships to forge ahead on International business. The export basket includes technical grade pesticides, bulk and branded formulations and contract manufactured products. Today, International business is a key contributor to the overall revenue generation of Rallis. The products meet stringent regulatory & environmental standards in all major crop growing areas across the Globe.

Rallis India has Alliances with Dow AgroSciences, Syngenta and Nihon Nohyaku which has helped company in introducing some of the world’s best crop protection molecules to India through our range of products.

Contract Manufacturing

Rallis has partnered with leading companies in the business segments of crop protection chemicals, Specialty Chemicals, Polymers and Intermediates.

Rallis offers cost effective products from state of art manufacturing facility with high emphasis on confidentiality, EHS and quality.

To meet current commitments and future aspirations Rallis has created a world class facility at Dahej supported by an in house centralized R&D facility at Bangalore.

New Products

• Developed 3 new in-house Crop Protection and 3 in-house Crop Nutrition products 
• Obtained 9 registration approvals internationally 
• Obtained 13 registrations in India under different categories 
• Obtained label expansion for three products on 14 different crops 
• The DF – Launched new 9(3) formulation in Q1 – Pepe (Pendimethalin + Penoxsulam) targeted as a herbicide in rice; 9(4) formulation Preet Plus (Pretilachlor) targeted as a rice herbicide and Kaushal (Propineb) targeted as a fungicide in F&V segment. 
• PGN- Launched Aquafert Foliar- Apple 
• Seeds – Launched Paddy (mediummaturity) and five products in cotton segment 
• IBD – Four new registrations in Africa and two in South East Asia

Status of Subsidiaries 

PT Metahelix Lifesciences Indonesia (‘PT Metahelix’)
PT Metahelix had become a direct subsidiary of the Company during FY 2019-20 in view of the merger of Metahelix Life Sciences Limited with the Company.
The Company holds 65.77% of the equity capital of PT Metahelix and balance is held by the Joint Venture Partner in Indonesia.

Financials

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Q1FY22 Results 

• Company Reported revenue growth of 11.7% YoY to 741 crore, led by domestic crop care business (up 32% YoY).
• Gross margins declined 90 bps YoY to ~38.8% while EBITDA margin contracted 300 bps YoY to 16.4%.
• EBITDA was down 5.3% YoY to 121.5 crore. 
• PAT fell 10% YoY to 82.3 crore
• Domestic business: Revenues were up 17% YoY to 608 crore.
• International crop care business registered growth of ~32% YoY to | 131.9 crore

For the Year Ended March 21

• Company’s consolidated revenue from operations for FY 2020-21 was Rs 2,429.44 crore compared to Rs 2,251.82 crore in the previous year, an increase of 7.9% over the previous year.
• Company’s profit before exceptional items and tax on a consolidated basis was Rs 294.05 crore during the year compared to Rs 226.07 crore in the previous year, an increase of 30.1% over the previous year. 
• The Company earned a net profit after tax of  Rs 228.57 crore, higher by 24.4% as against a net profit after tax of  Rs 183.69 crore in the previous year. 
• During the year under review, the Domestic Crop Care business achieved a revenue of Rs 1,287 crore as against  Rs 1,165 crore during FY 2019-20, a growth of 10%. The International business achieved revenue of  Rs 741 crore during the year as against Rs 722 crore during FY 2019-20, a growth of 3%. 
• During the year, in International business, significant growth was recorded in North America, Europe, Latin America, particularly USA and Brazil. 
• Crop Nutrition business achieved a growth of 22% over FY 2019-20 
• Out of the earmarked capex of 800 crore over the next five to six years, the company has been initially incurring crop formulation capex to the tune of | 98 crore and MPP plant at Dahej with total cost of | 105 crore. Both of these plants are expected to get commissioned by H2FY22.

Rakesh Jhunjhunwala

Ace Investor and also know as Big bull of the Indian Stock market Rakesh Jhunjhunwala has been holding close to 10% stake in the company consistently over past several quarters.

Sectorial Outlook

Agriculture in India was historically viewed as a traditional occupation mainly catered to the needs of self-consumption rather than a commercial activity to make wealth of it. The demand for food grains in the latter half of the 20th century led to the Green Revolution. Today farming is more commercialized and there is a growing awareness on the need for improved high yielding varieties, and efficient management of inputs such as water, nutrition and management of pests. It is estimated that 88% of the total available water is being currently used in agriculture. Due to the indiscriminate use of irrigation water and fertilizers, fertile soils have become water logged and saline. The use of micro irrigation techniques and fertigation is the only way to manage these resources efficiently.

A predominantly agricultural economy with 182 million hectares of cultivable land, India produces more than 200 million tons of food grain.

India’s territorial landscape is disparate, with a plethora of soils and vegetation. Crops are seasonal and every state has a distinct culture and lifestyle. Reaching out to 65% of her 1 billion people, who depend on agriculture for a living, is a tremendous challenge.

Rallis has always been the Indian farmer’s close friend. Company’s comprehensive range of agro inputs and services are spread across 80% of India’s districts through an extensive distribution network of loyal and supportive dealers and retailers.

Company’s vast experience and extensive research in agricultural products has geared us up to meet global challenges. It’s little wonder then that Rallis has emerged as one of the leaders in the Indian Agrochemical Industry.

Conclusion

Backed by tata group company has recorded nearly highest every quarterly sales for the Q1FY2022. Further ,recent stance taken by the government to push end users for using make in india fertiliser products thereby reducing dependence on imported fertiliser products is also going to add more to the Rallis India. Company does not have any debt also operating profit margins have been stable although increased by 1% in the last financial year it is expected to improve further. There is high expectation of increase in company’s top-line revenue in the coming period. Taking this into consideration Rallis India is worth Exploring for long term.