Rallis India, a subsidiary of Tata Chemicals, has delivered impressive Q2 FY25 results, leading to a 15% jump in its share price, reaching a 10-week high of ₹370.
The company reported a 21% rise in net profit, supported by strong growth in its crop care and seeds segments. Investors responded positively, pushing the stock higher on October 16, 2024.
Q2 FY25 Financial Highlights
- Net Profit: Rallis India reported a net profit of ₹98 crore, up from ₹82 crore in the same period last year, reflecting a 21% increase.
- Revenue: Total revenue rose by 11.5% to ₹928 crore, compared to ₹832 crore in Q2 FY24, driven by strong performance in the domestic crop care and seed markets.
- EBITDA: The company’s EBITDA grew by 24% YoY, reaching ₹166 crore, indicating healthy margin improvements.
Rallis India Financial Performance (Q2 FY25 vs Q2 FY24)
| Metric | Q2 FY25 | Q2 FY24 | Growth (%) |
|---|---|---|---|
| Net Profit (₹ crore) | 98 | 82 | 21% |
| Revenue (₹ crore) | 928 | 832 | 11.5% |
| EBITDA (₹ crore) | 166 | 134 | 24% |
Key Growth Drivers
- Crop Care Segment: The crop care division saw a 7% increase in revenue, totaling ₹787 crore for the quarter. This was primarily driven by a 17% growth in domestic crop care volumes, showcasing strong demand for Rallis’ products.
- Seeds Business: Revenue from the seeds division surged by 48% to ₹141 crore, largely due to increased demand for North Cotton Hybrids and improved liquidation of Kharif crops.
- Innovative Products: Rallis India completed pilot-scale production of Flavocide®, a novel insecticide developed in collaboration with Bio-Gene Technology, an Australian firm. This marks a key milestone for the company’s R&D efforts.
Strategic Initiatives
Rallis India has also launched Anubandh Edge, a digital platform aimed at enhancing engagement with retailers across its crop care and seeds businesses. This platform is expected to improve customer relationships and drive future sales.
Stock Performance
Since May 2023, Rallis India’s stock has surged by 92%, climbing from ₹189.75 to ₹364. The company’s strong quarterly performance and optimistic outlook for the upcoming Rabi season have boosted investor confidence.
The stock has gained 47% year-to-date, marking its best performance since January 2020.
Market Outlook
Rallis India remains optimistic about the upcoming Rabi season, with reservoir water levels indicating favorable conditions for farming. The company also expects continued growth in the hybrid seeds market, particularly for cotton, millet, and vegetables, due to rising demand for climate-resilient crops.
Conclusion
Rallis India’s strong Q2 performance, driven by its crop care and seeds segments, has sent its stock price soaring by 15%. With a positive outlook for the Rabi season and ongoing innovation in the agri sciences sector, Rallis India is well-positioned for continued growth.
Disclaimer
The information provided is based on Rallis India’s Q2 FY25 earnings report and market analysis as of October 16, 2024. Please consult a financial advisor before making investment decisions.