Rallis sales up 20% in 2010, reach a new high

Rallis India (Rallis), a Tata enterprise and a leading player in the Indian crop protection industry, has posted the highest-ever net profit after tax, of Rs126 crore for the year ended March 31, 2011, reflecting an increase of 25 per cent. Sales rose by 20 per cent to reach a new high of Rs1,047 crore. Ebidta crossed the milestone of Rs200 crore for the first time ever. The earnings per share grew by 25 per cent to Rs65 per share.

Recognizing this sterling performance the board, at its meeting today recommended a final dividend of Rs11 per share (110 per cent). With this, the total dividend for the year will be Rs20 per share (200 per cent) on the post-bonus issue capital.

To enhance liquidity in the shares, the board approved sub-division of each of the equity shares of the face value of Rs10 fully paid-up, into 10 equity shares of Re1 fully paid-up.

Growth

The company posted a handsome increase in sales in both, the domestic and international businesses. The overall increase of 20 per cent in sales reflects the healthy volume growth in the domestic formulation business as well as the international business which grew by 17 per cent and 35 per cent respectively. With the continued focus on international business through its Apollo initiative, the share of international revenues accounted for 25 per cent of the total sales.

The acquisition of Metahelix Life Sciences (Metahelix) at the end of December 2010 puts the company on a firm footing in the seeds business. With a good pipeline and increasing presence in rice, maize, millet, cotton and vegetables portfolio, the Metahelix presence provides a robust opportunity to increase presence in this fast-growing agri-input segment which is critical to raise productivity.

The presence in manufacturing is also being strengthened by certain capacity expansions in existing units as well as investment in a new unit at Dahej. This unit should be operational into commercial production in this quarter and would provide a growth platform for the contract manufacturing business.

Rallis has for many years offered practical farm solutions through village-level farmer intensive interactions and field demonstrations, building trust with the farmer. The initiative MoPu (Grow More Pulses) piloted this year will unfold into a major relationship endeavour over the next few years. The Rallis Kisan Kutumba programme continued to receive focus with over 550,000 farmers coming into its fold.

Commenting on the company’s performance, V Shankar, managing director and chief executive officer, Rallis, said, “I am pleased we have crossed the milestone of Rs1,000 crore of sales and also PAT recording the highest-ever profit from operations. Our value-creating crop protection solutions have been well received by the farmers and new introductions such Toran, Ralligold and Taarak are already showing encouraging market acceptance. Our Dahej facility should shortly get into commercial production and provide the base for growing the contract manufacturing business.”

Commenting further on the company’s performance, Mr Shankar added, “I am delighted that we now have a firm base in the seeds segment with our acquisition of Metahelix. With a strong pipeline of good technologies and hybrids, this important fast-growing segment will provide us an exciting opportunity to serve the farmers better.”

Rallis is known for its manufacturing capabilities in crop protection chemicals and various types of chemistries, with the ability to develop new processes and formulations supported by the capability to register new products. It has contract manufacturing alliances with several multinational agrochemicals companies.

Rallis is one of India’s leading agrochemicals companies, with a century-old tradition of servicing rural markets and a comprehensive portfolio of crop care solutions for Indian farmers. The company is known for its deep understanding of Indian agriculture, sustained relationships with farmers, quality agrochemicals, branding and marketing expertise and its strong product portfolio.

During the financial year 2009-10, the company had posted profit after tax of Rs101 crore and revenues of Rs875 crore.