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Q2 `going well' for Rallis

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Mr R. Gopalakrishnan, Chairman, Rallis India Ltd (left), with Dr V.S. Sohoni, Managing Director, at the company's AGM in Mumbai on Thursday. - - Shashi Ashiwal

Mumbai, Sept. 18

FOR agro-chemicals major, Rallis India Ltd, which reported a loss of Rs 77.27 crore in 2002-2003, the current fiscal is expected to be better, given its own restructuring efforts and benefits accruing to the agricultural sector from the good monsoon.

But it still may not be a year totally devoid of provisioning, Mr R. Gopalakrishnan, Chairman, Rallis, told shareholders at the company's AGM here on Thursday.

Second quarter FY04 "is going well and we are pleased with the progress made,'' he said, cautioning alongside that investors must not expect the Rs 14.33 crore loss of first quarter FY04 to be wiped off.

Rallis which has drawn up a `debtors' road map' recovered sizable sums over the last couple of months. Cost reduction steps under study — it intends to dispose off non-core and no-performing assets — include a plan to sell its headquarter-building, `Rallis House', in South Mumbai.

Last fiscal, as it tackled the impact of sustained downturn in agriculture, Rallis was forced to eventually provision for debts and advances, adding to its bottomline hit. In a nutshell, the push for higher business amidst tough times for agriculture, saw over-stocking and restrained sales. Driven by over-capacity in the pesticide industry and consequent price competition in select segments, many companies went into this loop. But at day's end Rallis returned a loss unlike its competition.

"So, clearly there were some other things that went wrong,'' Mr Gopalakrishnan said, of the company which now has a new managing director in Dr V.S. Sohoni.

According to the latter, "There is the need now for Rallis to concentrate on its core strengths.'' Previously with the competition, Dr Sohoni said, some parts of Rallis' once envied distribution system appeared to have gone out of control and needed to be reined in. This requirement comes into greater focus when juxtaposed on Rallis' continued dependence on foreign partners for its products, a trust "that has to be earned'' and for which it is the company's distribution muscle and market knowledge that helps.

Rallis' product portfolio also has to be fortified with in-house R&D.

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