Muted quarter turns Street cautious on Rallis

Timely onset and good monsoon are key to driving earnings upgrades

Rallis India’s FY17 performance would have been even better, but for the muted show in the quarter ending March 2017. While better rainfall in 2016 compared to the previous two years had lifted Rallis’ performance in the first nine months of FY17, the March quarter’s performance was impacted due to the Northeast monsoon coming below normal, leading to paddy acreage declining 12%.

During the March quarter, Rallis’ standalone revenue (Rs 346 crore) was flat year-on-year (y-o-y), operating profit grew just two% while rising depreciation costs pulled down net profit by two% to Rs 32 crore. The impact was more pronounced