Rallis India (RALLIS) Q2 FY27 Profit Slumps 17% as Seeds Business Collapses
A flat revenue line masked a sharp profit drop as a weak monsoon and a collapse in the Seeds segment squeezed margins.
Rallis India's Q2 FY27 profit fell 17% year-on-year to ₹85 crore despite stable revenue. The Seeds business collapsed, and operating costs rose, compressing margins in a challenging monsoon season.
For Rallis India, a stable top line in the September quarter was the calm before the storm. The agricultural inputs company reported nearly flat revenue, but its profit fell sharply as a punishing monsoon and a collapse in its Seeds business eroded profitability.
The numbers tell a story of pressure. Revenue was ₹858 crore, virtually unchanged from ₹861 crore a year ago. Profit, however, fell 17% to ₹85 crore. Sequentially, the drop was even starker, with revenue down 16% and profit down 32% from a strong June quarter. The net profit margin contracted by 190 basis points year-on-year to 9.9%.
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 858YoY -0.3% | 1022 | 861 |
| Profit (₹ Cr) | 85YoY -17% | 125 | 102 |
| Net Profit Margin (%) | 9.9YoY -16% | 12.2 | 11.8 |
Why the Seeds Business Sank
The main drag was the Seeds segment. According to reports from CNBC-TV18 and ScanX, Seeds revenue plunged 31% year-on-year. The business contributed zero EBITDA this quarter, down from ₹25 crore a year earlier, due to higher sales returns from the Kharif season and reduced acreage for key crops like paddy and cotton.
This collapse overshadowed resilience elsewhere. The Crop Care business grew 4%, driven by a 17% surge in B2B exports and a 22% jump in the Soil & Plant Health segment, as noted by CNBC-TV18. Yet, even here, input cost pressures kept a lid on margins.
The Costs That Won't Fall Soon
Operating profitability faced clear headwinds. EBITDA fell 18% year-on-year to ₹126 crore, as reported by ScanX. While material costs fell, other expenses and employee costs rose. The company also saw a significant rise in trade receivables, signaling working capital intensity.
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· RALLIS
(BSE)
ISIN: INE613A01020
The broader agrochemical environment remains challenging. Jefferies noted that despite rising global crop prices, agrochemical demand stayed weak due to a subdued monsoon. Brokerages, cited by Informist Media, expected this pressure, forecasting sharp profit declines due to weak rainfall and elevated channel inventory.
Key Points
- Profit fell 17% year-on-year on flat revenue, with margins contracting 190 basis points.
- The Seeds segment collapsed, with revenue down 31% and EBITDA contribution falling to zero.
- Crop Care showed resilience with 4% growth, but input costs pressured operating margins.
- Weak monsoon conditions and high channel inventory continue to challenge near-term demand.
- Half-year performance improved, with revenue up 3% and profit up 6%, offering a fuller picture.
Hexa Perspective
The quarter reveals a company navigating a sharp divergence between its divisions. The Seeds business, a former profit contributor, has become a significant drag, and its recovery hinges on better monsoon patterns and farmer sentiment. The core Crop Care operations are holding up but doing so at a cost, with margins compressed.
For the pressure to ease, two things need to happen: a return to normal seasonal rainfall to revive the Seeds segment, and a sustained drop in input costs to improve Crop Care profitability. Until then, the flat revenue line is likely to continue masking underlying strain on the bottom line.
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