RALLIS Q2 FY26 earnings call.
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Revenue
₹861 Cr
verification pending
Revenue YoY
-7%
reported change
EBITDA
₹154 Cr
latest reported figure
Source
manual review required
record provenance
Actual signal trajectory
Where this quarter sits.
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What the record says.
Rallis India reported a muted Q2 FY26 with 7% revenue decline to ₹861 crore, driven by abnormal monsoon patterns causing significant crop losses in key states. While EBITDA declined 7% to ₹154 crore, PAT grew 4% to ₹102 crore with 120bps margin expansion due to favorable product mix. The domestic crop care segment contracted due to excessive rainfall washing away pesticide applications, but exports surged 33% to partially offset weakness. Seeds business delivered 29% growth driven by new hybrid launches, though the company faced supply chain constraints in Tamil Nadu. Management flagged pricing pressure across the sector due to competitive intensity, while expressing optimism on rabi season prospects given residual soil moisture. R&D spending remains anchored at ₹60-70 crore annually with focus on non-GM breeding technologies. The company holds healthy cash of ₹454 crore with planned capex of ₹50 crore.
Colored figures show movement against the previous available record.
Guidance to track
- Management targets seed business margins in the range of 23-25%, which would be on par with industry-best levels. Currently close to this target with some dilution expected as revenue grows from lower-margin partnership products.
- Export H1 grew 51% YoY to 312 crore. Management expects continued momentum from new customer additions in existing geographies and early-stage supplies to newer countries like France, Malaysia, and Spain.
- Envisage capex spend of around 50 crore rupees, supporting capacity expansion initiatives including new efficient technologies for the export business.
- Extended kharif season and residual moisture should lead to comparatively better rabi season. Rice planting in south and eastern regions progressing, though fertilizer shortage may delay farmer shift to crop protection products initially.
Risks flagged
- Illegal HTBT cotton seeds are gaining adoption in south/central India, causing high returns for organized players like Rallis. The company derives 70-80% of cotton business from north which is relatively insulated, but Q3 will reveal whether HTBT becomes a structural headwind.
- Fertilizer shortage is creating imbalance in fund flow, with farmers prioritizing fertilizer purchases over pesticides and seeds. This puts challenges on receivables and product placement for pesticide companies including Rallis.
- US tariffs on Chinese goods are causing Chinese exporters to redirect to Brazil, creating pricing pressure in that market despite volume demand being intact. Management flagged this as watch-out for H2.
- Industry-wide pricing remains subdued due to competitive intensity and excess supply. Companies offering more schemes to remain competitive, which could compress margins if new product launches don't offset the impact.
Key quotes
- Our cotton dependency is very high on northern region. Fortunately illegal cotton has not made inroads into that region to that extent. We are secured because I think our 70-80% of the business still comes from north.
- I think more than 80% of our business comes from our own research product. As a result margins are higher. As we move into quarter two, end quarter four which is more revenue season, less than 20% of the revenue gets skewed towards partnership products. That's where margin profile tends to get lower.
- Our inventory levels have moderated. Collections have also improved. We have a healthy cash and liquid balance of rupees 454 crore as of 13th September.
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