Rallis India: Good Q1 but Street looks for more recovery signs

Higher raw material prices, rising generics share in portfolio, lower Bt cotton seed prices could weigh on profit

Rallis India’s performance in the June quarter (Q1), after a weak show in the January-March period, should provide some respite to investors. However, it might be too early to celebrate.

Revenue grew 54.4 per cent sequentially and 29.7 per cent over a year in Q1, driven by strong performance in standalone operations (up 45 per cent over a year). Part of this surge is due to the low domestic base of last year, which was impacted by channel destocking ahead of implementation of the goods and services tax. However, recent price increases, better placement of generics, higher export, led by