Tata group firm Rallis India, which is into crop protection business, has reported a 45 per cent decline in consolidated net profit to Rs 13.76 crore for the quarter ended December 2018 on higher tax outgo and other expenses.

Its net profit had stood at Rs 24.94 crore in the year-ago period, according to a regulatory filing. Total income, however, rose by 7 per cent to Rs 423.25 crore in the third quarter of this financial year, from Rs 393.86 crore in the corresponding period of the previous year. “Margins remain constrained owing to higher raw material prices. Expect profitability to pick up going forward following growth-specific initiatives undertaken towards driving growth,” Rallis said in a statement.

Higher input cost, imports from China resulted in profitability and margin compression, the company said. It is working towards improving product mix - share of value-added/speciality products to offset impact of rising raw material. The company said the revenue grew on the back of steady performances in domestic and global markets.

“Strategic initiatives in terms of strengthening dealer network and revised incentive structure aided domestic performance. Exports revenue expanded owing to better performance in the US and Europe,” the statement said. The board has approved the merger of Metahelix Life Sciences Ltd (a wholly owned subsidiary) with the company under a scheme of amalgamation.

Commenting on the performance, R Mukundan, managing director and chief executive officer, said: “We have delivered a steady revenue performance for the quarter despite multiple headwinds in the domestic market. However, recent margin pressure experienced across the industry have impacted profits.” Rallis is in the process of a strategic transformation with efforts being directed towards leveraging its strengths in both domestic and international markets, he added.

“We are working towards improving the depth and width of our product portfolio by leveraging our in-house R&D capabilities,” Mukundan said. The board has approved a Rs 100-crore investment to expand capacity in key products. “We are confident that our initiatives, coupled with supportive macros, will help us deliver sustainable value for our shareholders. Additionally, the board approved the merger of Metahelix which will enable us to offer a unified approach to our customers,” he said.

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