Rallis India (RALLIS) Q4 01/02 earnings summary

Executive summary

• FY2001-02 marked a return to operating profitability: operating profit was Rs 23.65 crore versus an operating loss of Rs 12.55 crore YoY; PAT was Rs 58.75 crore versus a loss of Rs 25.58 crore.

• The PAT recovery included non-recurring gains from asset and business disposals, while restructuring, cost controls and new product launches supported underlying operations.

Financial highlights

• Sales were Rs 1,037.68 crore versus Rs 1,088.90 crore in FY2000-01; lower sales mainly reflected the pharmaceutical business exit and a distribution-model change for an overseas alliance.

• Other income was Rs 29.03 crore, taking total income to Rs 1,066.71 crore versus Rs 1,109.75 crore YoY.

• Profit before interest, depreciation, tax and exceptional items was Rs 79.65 crore versus Rs 64.71 crore; PBT was Rs 45.25 crore versus a loss of Rs 30.71 crore.

• PAT of Rs 58.75 crore included profit on sale of assets, the pharmaceutical business and trade marks, plus a deferred-tax credit.

• Basic and diluted EPS was Rs 47.39 versus a loss per share of Rs 23.36; a 100% equity dividend was recommended, including a 60% special dividend.

Outlook and guidance

• FY2002-03 performance faced near-term uncertainty from erratic monsoons and a slowing Kharif season, with farmer purchasing and agro-input demand at risk.

• Bt cotton was expected to reduce insecticide consumption in cotton by Rs 25–30 crore in FY2002-03.

• Two registered products, Lambda-Cyhalothrin and Hexaconazole 5SC, were planned for launch in Q2 FY2002-03; process improvement, cost reduction and quality initiatives were expected to support profitability.

• ERP rollout across locations was planned over 22 months, ending January 2004; TPM with Six Sigma was planned for FY2002-03 to raise productivity and reduce costs.