Dear Shareholders,
Let me start by thanking each one of you for your continued trust and
confidence in the Company. Your Company recently celebrated its 75th Anniversary wherein
the commitment towards the Mission of "Serving Farmers through Science" was
reiterated. The Company continually strives to enhance its offerings to improve farmer
income.
Market Context
The baseline forecast for the world economy is to grow at 3.2%1
during 2024, at the same pace as in 2023. India is acknowledged as one of the fastest
growing economies with an estimated GDP (Gross Domestic Product) growth of 7.6%2
in FY 2023-24. However, the outlook is cautiously optimistic in the wake of continuing
geo-political crisis. In agrochemicals industry, geo-political disruptions over the last 2
years has led to inventory build-up and price disruptions. This started waning with supply
chain normalcy but increase in production and oversupply from China led to downward
pricing pressure. In the Calendar Year
2023, global agrochemicals industry is estimated to have de-grown by
more than 10%. Indian agrochemical exports declined by 22%3 during FY 2023-24.
Adverse climatic conditions and uneven spatial distribution of rainfall further impacted
domestic agrochemical demand.
Rallis' Performance
Your Company had a resilient performance during these turbulent times.
Agile teamwork coupled with efficient operations and flexibility in supply chain ensured
seamless supplies to the end customers. Domestic branded business delivered positive
volume growth. Measures undertaken in the last few years towards delivering profitable
growth of seeds business have helped in delivering strong volume-led growth of 21% and
profit breakeven. Exports had a challenging year with both price and volume coming under
pressure, but the business is confident of the long-term prospects. Your Company's focus
on improving higher price realisation and cost optimisation helped in enhancing the EPS
(Earnings Per Share) from _ 4.7 per share in FY 2022-23 to _ 7.6 per share in FY 2023-24.
Performance in FY 2022-23 was impacted due to impairment of technical know-how and
provision for slow-moving inventory. Board is also pleased to recommend a dividend of
__2.5 per share.
Opportunities Ahead
The Tata Group and Rallis believes that we have a pioneering role to
play in improving farm income and providing better market access to farmers. Quality of
agricultural inputs including crop protection, crop nutrition, seeds and the right
agronomical knowledge are critical for improving agricultural productivity in a sustained
manner for serving the demand of the growing population with rising income and aspiration.
Rallis with its long association and deep connect with the diverse farming community is
well poised to drive this agenda. Keeping the customer as the focal point and leveraging
digital connect will enable us to reach a larger number of farmers effectively.
The recent above-normal monsoon forecast by IMD, bodes well for the
upcoming Kharif season and may translate into increased usage of agriculture inputs. There
is a large opportunity to participate and grow in the Agrochemicals export which is
estimated at $4.2 Bn3 against the global industry size of ~$75 Bn4.
Your Company's recent investments in manufacturing including a Formulation Plant and
Multipurpose Plant will support the growth agenda. The integrated "Rallis Science and
Technology Center" that is under construction will further enhance our capabilities
to address the portfolio gaps through unique and differentiated offerings. Digital
initiatives will continue to be the backbone across all aspects of the value chain.
The sustainability initiatives adopted by your Company continue to be
aligned to "Aalingana", Tata Group's flagship programme having a vision for
greener, sustainable and equitable future for the planet. Your Company is embedding
sustainability into its business by focussing on three interconnected pillars i.e.,
decarbonisation of businesses, circular economy approach and preserving the natural
environment.
On behalf of the Board, I would like to sincerely appreciate Mr. Sanjiv
Lal, Managing Director & Chief Executive Officer for his valuable contribution.
Further, I would like to thank Dr. Punita Kumar Sinha for guiding your Company during her
tenure as an Independent Director. Wishing them the best in their future endeavours.
I would also like to welcome Mr. Narain Duraiswami, Independent
Director and Dr. Gyanendra Shukla, Managing Director & Chief Executive Officer of your
Company. On behalf of Rallis, I would like to thank each one of you for your continued
trust, support and guidance.
Warm Regards
Bhaskar Bhat
Chairman