Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Rallis India Limited (NSE: RALLIS) Q3 2026 Earnings Call dated Jan. 21, 2026
Corporate Participants:
Gyanendra Shukla — Managing Director & Chief Executive Officer
Bhaskar Swaminathan — Chief Financial Officer
Analysts:
Viraj — Analyst
Arjun Khanna — Analyst
Jagvir Sikh — Analyst
Abhishek Akhila — Analyst
Siddharth Karakar — Analyst
Sourabh Jain — Analyst
Ramesh Shankar Narayan — Analyst
Presentation:
Operator
Ladies and gentlemen, good morning and welcome to the Rallis India Limited Q3 and 9 months FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. We have with us today the Dr. Gyanendra Shukla, Managing Director and CEO and Mr. Bhaskar Swaminathan, Chief Financial Officer.
Before we begin, I would like to mention that some of the statements made in today’s discussion may be forward looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in the results presentation. Please note that this conference is being recorded. I now invite Dr. Shukla to begin with the proceedings of the call. Thank you. And over to you sir.
Gyanendra Shukla — Managing Director & Chief Executive Officer
Thank you. Good morning everyone and thank you for. Joining us today on Rallis India Limited’s Q3 and 9 month fiscal year 26 earning call. As mentioned, I have alongside myself our CFO Mr. Bhaskar Swaminathan. Let me begin by discussing. Industry landscape post which I’ll discuss Randis specific developments. Talking about domestic market. Agrochemical demand generally remains weak due to. Stress demand drivers particularly weather issues and low crop prices leading to industry wide volume declines.
Farmer interest in purchasing high value product. Dropped due to lower crop and horticulture prices. South and West India saw demand decline while east and north remains stable. According to official data all curry crops. Barring paddy ruled 9 to 30% below the respective minimum support prices during harvesting period October to December 25. Rabi acreage is marginally higher year on year and channel stocks are slightly elevated. Official dashboard confirms Ravi acreage is up by 3% approximately for wheat, oilseed and pulses as of January 26th.
First week data which is supportive for Q4 sell out and early curry placement. The sector is on track for 3. To 4% growth in fiscal year 26 to about 9.6 to $10 billion. Seed category remains a structural 5 to 10% CAGR story. Volumes will benefit from a stronger acreage. And moisture but margins are expected to remain stable to soft. The markets would favor low cost producers. With export breadth and tight working capital discipline. Pricing power as we speak stays limited as global competition intensifies with China continues.
The primary supplier capping realizations, rapid resets in key technicals particularly glyphosate, glufosinate and paraquat can reprice on hand inventory and compressed margins. Export volumes are improving as inventories normalize. But realizations remain capped. Weaker currency would cushion margins but not. Offset broad price pressure. On the weather side, El Nino Southern. Oscillation is expected to run neutral through. Winter, reducing tail risk from extreme anomalies. IMD guidance points to.
Neutral ENSO, which. Is El Nino Southern Oscillation normal through December January 26. Negative IOD is weakening less chances of. Disruptive extremes, so that’s a good news relatively the draft pesticide management bill 2025 referencing quality control, lab appreciation, lab accreditation, digital traceability and stiffer penal is a structural positive for organized players. Proposed seed bills measures which include registration, QR tagging keep compliance in focus and raise barriers to entry, particularly to smaller players over the medium term.
Global agrochemical market, particularly crop protection market. Is valued at approximately $75 billion in 2025 is projected to keep growing at the CAGR of about 5% onward. Herbicide globally is the major category followed. By insecticide and fungicides. Upside potential hinges on expected expanded acreage in Americas and regulatory clarity for new genomic techniques in the eu, while trade policies and Chinese pricing represent key uncertainties. Export recovery is gradual as Global inventories normalize.
US 2.4D acid anti dumping countervending duties. Has reset landed cost and reset herbicide rate flows. Global reliance on China persist as it. Supplies 99% of products like glyphosate outside the US more than 80% of the glufosinate import and 100% of US atrozine as per the 2425 data exposing cost to tariff and policy shift. Chinese producers are pivoting towards branded formulation. And overseas registration, increasing competition in value added generics. This is something watch out for Indian players leading seed companies prioritizing disease resistant drought tolerance and pest resistant varieties through advanced biotechnology and gene editing innovations.
Indian agrochemical exports to key markets like US and Brazil are growing at 5. To 6% supported by destocking normalizations. USDA Wastia data for December 25 showed an uptick in the stock to user. Ratio for Indian rice but little change otherwise. Moving on to Rallis specific developments, we. Had an encouraging quarter three performance despite unseasonal October rains and higher than normal reported crop damage over Q2. Q3 fiscal year 26 revenue stood at 623 crore versus 522 of Q3 fiscal year 25.
Overall EBITDA for Q3 stood at 58 crore, higher by 29% compared to Q3. Of the previous year. PAT stood at 2 crore versus 11. Crore of Q3 of fiscal year 25. Which is 80% lower than the previous year same year. But then we have to account for exceptional gain which includes gratuity provision of 40 crore on account of wage code implementation. Otherwise it is significantly up across the technicals portfolio. We are continuously broadening our customer base and securing additional registration with Global Player to drive share gains in Metrovision.
Particularly this year we achieved higher volume in Q3 surpassing Q3 of the previous year. Pentimethylene shows promising track with long term demand remaining steady. Q3 fiscal year 26 volumes have surpassed. Q3 fiscal year 25 volume so both Metri and Pendimethalin have done very well. Hexachonazole and Asafate volumes had constraints in. Q3 in comparison to Q3 of previous fiscal. There has been overall improvement in the. Capacity utilization as far as the new. Launches are concerned, we have launched one herbicide Fatenex during the quarter for the.
Wheat in nine months. If you look at total we have introduced nine products. Out of that seven were herbicide two fungicides. We have also launched a new brand called New Code under Soil and Plant Health category. It’s a biological platform covering biofertilizer, biostimulant and biopesticide partnership. We have also announced partnership with Parian alliance for full page herbicide tolerant rice technology in India. This should help our seed business to remain competitive in the marketplace. We have recently unveiled Idea to Impact.
Platform which is an open innovation platform to co create, validate and scale pharma centric solutions. It invites startups, researchers and partners to collaborate with Rallis. We have also a few days ago launched an app called Samparc app for unified field operations. This will act as a demand creation plate from both seed and crop care business. We have been granted Indian patent for three way mixtures for a wheat herbicide that contains mid sulfuron Cloudinophob as well as Metrobizin. We have also been granted US patent for Misotriol.
The near term outlook remains positive underpinned. By healthy reservoir level, increased acreages and a stronger engagement with domestic and export customers. We are focused on long term value. Drivers such as deepening customer centricity, sharpening portfolio choices, accelerating product launches, expanding strategic alliances in pharma reach and embedding digitalization across our operations. This concludes my opening remark. Now I’ll hand over to Bhaskar our. CFO for a detailed analysis of the financial situation.
Over to you bhaskar.
Bhaskar Swaminathan — Chief Financial Officer
Thank you Dr. Ganendra. Good morning everyone and thank you for joining us Today for our Q3 and 9 months FY26 earnings call I’ll walk you through our financial performance for the quarter post which we shall commence the Q and A session starting with the top line for the quarter our Q3 FY26 revenue stood at 623 crore as against 522 crore for the same period last year resulting in overall growth of 19%. Overall volume growth has been 28% with pricing degrowth by 8%. Overall EBITDA for the Q3FY26 stood at 58 crores rupees higher by 29% compared to Q3 of the previous year.
Profit after tax at rupees 2 crores versus 11 crore of Q3FY25 which is 81% lower than the previous year same quarter. Exceptional items include gratuity provision of 40 crore on account of wage code implementation which is actually resulted into that path number. Cropcage segment grew by 18% to 560 crore in Q3FY26 from 492 crore in Q3FY25 driven by volume expansion, new product promotion and increased digital engagement. Moving to seeds business seeds revenue grew by 46% to 43 crores in Q3FY26 from Rs.
30 crore in Q3FY25 driven by volume growth mainly due to paddy, mustard and wheat. In the current quarter we have achieved healthy product placements in paddy soil and plant health category grew by 16% to 73 crore from 62 crore in Q3FY26 in comparison to Q3FY25 registering both price and volume growth, we progressed in compliance in majority of the states post successful migration of biostimulant production in house exports. The B2B business top line grew by 73% to rupees 129 crore from rupees 75 crore and has shown promising growth driven by volume growth, expansion in customer base and driving capacity utilization of our plants.
The CSM business Q3FY26 revenue also displays positive run rate launching 26% growth to 46 crore from 37 crore earlier. Moving into domestic B2C market, 13% growth in Q3FY26 registering Rs. 391 crore revenue vis a vis rupees 347 crore in Q3FY25 which was driven by volume growth of 25%. Volume was driven by strong performance in fungic seeds primarily supported by potato and cumin crops. The negative price impact is due to liquidation of near Expiry materials. For the nine month period, top line revenue stood at Rs.
2,441 crore reflecting growth of 9% year on year. Crop care revenue stood at Rs. 1991 crore reflecting 8% growth year on year driven by volume expansion. Despite price softening seeds, revenue increased to Rs. 450 crore delivering 15% growth year on year 16 supported by cotton and maize along with improved contribution from licensed products. The B2C business recorded growth of 3% delivering rupees 1401 crore of revenue. The B2B business recorded growth of 22% delivering rupees 590 crore of revenue supported by volume growth and expansion of the customer base in crop care segment.
Expanding our customer base and product portfolio is strengthening business resilience. We are driving focused execution across the front line and operations, optimizing the portfolio, rationalizing territories, eliminating overlaps and simplifying costs across the value chain. We remain disciplined on capital efficiency across both fixed and working capital in seed segment our priority. Our primary focus will center on five strategic crops. Cotton, maize, millet, mustard and Rise where selective concentration will drive operational scale and efficiency.
We aim to methodically expand our presence across these crops while prioritizing profitability at every stage. Our digital LED initiatives are accelerating targeted region penetration with momentum remaining strong. In parallel, we are rationalizing the portfolio and sharpening our focus on priority markets. At quarter end, our inventory levels remain slightly elevated in comparison to the same quarter of last year and collections remain smooth. We have healthy cash and liquid balance of Rupees 455crore as of 31st December.
In summary, we are implementing various initiatives and we are committed towards achieving consistent, competitive and profitable growth. That concludes our opening remarks. We can now commence the Q and A session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Viraj from Simple. Please go ahead.
Viraj
Yeah. Hi. Thanks for the opportunity. Just a couple of questions. First is if we can give the volume price trend for the quarter in domestic B2C and international business. And a related question is we’ve seen a healthy placement in Q3 in the domestic business for us. So any color you can give in terms of the liquidation and the industry. Because going into Q2 and I mean going into Q3, industry reported a lot of inventory in the system. So any color you can give on that.
Gyanendra Shukla
Well, so. So Bhaskar can give a specific number, but I can tell you. So for example, there is a significant. Growth in our seed business compared to. The same quarter last year. I think it is all because of. The crops we were. This is in spite of there was a weak mustard season. So I think we are in good shape. Our export business also has gone up significantly where there’s no risk. Right. Our top line in export actually has grown by almost 73%. Seed. Seed there was a growth of 46%. Soil and plant health 16%.
So all those are good. The only challenge remains sometimes in domestic crop protection that has grown by 18%. And I think it’s combination of our promotional activities, digital engagement and some of the activities we have been taking. It combines with new launches. So I think we feel confident about. What we have placed in the market. We are very careful and the way we track our basically placement and remainder of the inventory. Two things a season is still on. A lot of sprays will happen in January, February and March.
So we need to have an inventory in the market. At the same time we try to look at receivable situation because that’s the. Best indicator of what is happening in the marketplace at this point of time. It looks in line with what we should be doing. Bhaskar, you want to answer the question on volume and price?
Bhaskar Swaminathan
I think the question is mainly on. How much it is coming for quality. Of placement as well as in terms of what is coming back. We are quite in control in terms of the returns and that basically indicates the quality and focus with which we place the market. In terms of the quarter, volume has basically played 12% impact and price has played a negative 32% impact.
Viraj
Sorry, how much you said on the price?
Bhaskar Swaminathan
5 is about 32% impact. And although it is also offset by cost, you know, positive of 12% volume is played 12% positive.
Viraj
This is for the domestic B2C.
Bhaskar Swaminathan
Yes.
Viraj
Okay. And on the soil and plant health segment, I think last quarter we were expecting approvals to come maybe by end of Q4 and a normalized environment starting into 2027. So the approval which you have got is just for us or generally for organized players in the industry. You know, everyone. So the issue buying that’s addressed by everyone who speeds or we have managed to get an early lead.
Gyanendra Shukla
Yeah. So I think see in our agriculture business, what you miss. You miss, right. Having said that, whatever regulatory changes happen, they are by and large good for large organized players. And that is reflected in recovery we are having. So here we have grown both in price and volume and we have been able to migrate our business to. Since we taken for example one of. The biostimulants, we had a challenge so we have moved the production in house. And as a result there is a. Growth of 16% in quarter three.
I know quarter towards the end of quarter one and quarter two were very. Challenging because of the regulatory constraints. So we have addressed most of those issues now. And I guess I cannot really comment about competition, but I’m sure every company. Is taking such a steps, particularly large organized players. They would like to fix their house.
Viraj
Okay, this last question, I come back in queue. How large is the unorganized market was in the soil and health segment or the bio segment space.
Gyanendra Shukla
So see, I think it’s a, it’s a category which has six, seven subcategories. I would say very difficult to put number. But there are hundreds of players operating. Let’S put it that way. Right. The regional players, national players. I certainly see, you know, that number. Shrinking and more authentic players, you know, coming up in the marketplace. It’s very difficult to give you a number, but it’s too many.
Viraj
Okay, thank you. Good luck.
Operator
Thank you. A reminder to all the participants, you may press Star and one to ask a question. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead.
Arjun Khanna
Sure. Thank you for taking my question. Sir. The first question is regarding the Chinese VAT rebate which would be discontinued now. Some of the products we export, including say an acephate or ethion etc. So how do you look at it in terms of the impact? I know formulations are not part of this but in terms of technical exports, how do we see this play out for us going forward?
Gyanendra Shukla
Yeah, so we don’t do Ethion, we only do. We do Metrobegin, we do Hexachonazole, we do metallaxyl, those kind of products. I think this, this rebate thing is a new. Which is applicable from appraisal.
Arjun Khanna
Right. So
Gyanendra Shukla
We have to understand, I certainly believe when they remove the incentive by the month of April, how much they would have already supplied and have this applied enough to cater to the markets. So I think we have to wait for how it will evolve. I think generally it’s a positive movement to say it probably reflects the challenges. Chinese companies face in terms of overcapacity. And also maybe this is an attempt. By Chinese government to really encourage consolidation of players there because China has also.
A lot of players, those who are. Into technical field and many of them. Are actually migrating to what you call. Registering their own product and participating in direct formulation market. So I think you’ll have to wait for some more information to filter in. As I know it is applicable only from April.
Arjun Khanna
Right. But
Gyanendra Shukla
It will certainly lead. I mean if there’s not too much of production happening for a particular AI, it should lead to some price increase. And some consideration in players.
Arjun Khanna
So we’ve seen a very strong third quarter, albeit the base wasn’t extremely high but yet numbers are very robust. So given that in the fourth quarter do you anticipate dumping where it may have an impact on a quarter or that is not something that we are seeing say in dispatches for Jan and Feb?
Gyanendra Shukla
No. So I think we have planned for a normal quarter. We don’t advance sale or we don’t. Unnecessarily delay the sale. I think we go by the signal demand. I think fourth quarter is an important from A there is a crop on the ground B For us cotton season begins again. There’s some element of when the government announces cotton seed price because cotton gets. Planted early in northern part of India. We have to start placing. There’s also some bajra seed business which. Happens in quarter three. So we have factored everything which is.
In this amaze business as well. So I think we have planned for the normal quarter. Hopefully we’ll be able to sustain some momentum there.
Arjun Khanna
Sure. Sir, just the final question in terms of our growth going forward, so how do we envisage the deployment of the cash on balance sheet because that continues to grow.
Gyanendra Shukla
So cash on the balance sheet obviously. You know one thing is obviously we. Need cash to meet our working capital requirement as we grow business. As we said. Look, while we do not give a. Guidance aspirationally we want to grow in double digit and we also want to expand our margin. So cash is helpful from that perspective because it also allows us to sometimes negotiate better prices depending on the situation, credit versus cash kind of situation. Obviously one area which I have been. Talking we keep seeking opportunities where if.
We come across a good opportunity to grow inorganically any of the verticals we. Operate three particular verticals, we want to use that cash for those purposes as well.
Arjun Khanna
Sure. Wishing you all the best.
Gyanendra Shukla
Thank you.
Operator
Thank you. The next question is from the line of Jagvir Sikh from Shade Capital. Please go ahead.
Jagvir Sikh
Thanks for the opportunity. So sir, in the presentation you have mentioned some inventory liquidation in the fourth quarter. So what, what is the impact of this in on our wellness India?
Gyanendra Shukla
So look, you have to always place product in the market because it has to go from factory to cnf, CNF to distributor to retailer. You know and farmers also end up. Buying few days in advance at least before they want to spray. So product has to be in the market. I think the numbers reflect what has been actually consumed and what might be lying in the market. The way we track these things is. So we are hoping all of this will get liquidated. We will also be able to invite some fresh inventory which is an ongoing business.
Agriculture never goes completely silent in any part of the country. For example, eastern region might start little early. Particularly Assam, Bengal and all tea plantations. And all the season of apple start. Early in Kashmir and all. So I think it’s a continuing business. All we are watching when we declare. A quarter number we have to ensure. That we are not pushing volume unnecessary. In the marketplace when there is no demand.
Jagvir Sikh
Okay, thank you very much sir.
Operator
Thank you. The next question is from the line of Abhishek Akhila from Kotak Securities. Please go ahead.
Abhishek Akhila
Yeah, good morning. Yeah, good morning gentlemen. Yeah, thank you so much for taking my questions. So just you know one quick clarification on the numbers first if I may. And by the way, thank you so much to Bhaskar and team for sharing the revenue breakdown. Very helpful. But just to clarify of this 580 crore, you know top tier revenue that we’ve reported for this quarter is it correct to you know conclude that basically exports are 129 as Bhaskar mentioned, CSM 46 and B2C domestic 391. I think that adds up to about 566.
But are those the three main components and what would the remaining piece be if any?
Gyanendra Shukla
So there’s other small businesses which we don’t add here. For example we have a household pesticide business. There is another small sector we have. But these are the numbers he has given breakup for the majority.
Abhishek Akhila
Okay. Okay. So these are the only three components. And soil and plant health is over and above this, right? That is not part of crop. Yeah, Soil
Gyanendra Shukla
And plant health. We club with the crop care. So. So I think when we say crop care it has a crop protection. Domestic exports, ESM as well as soil and plant health. And soil and plant health is about 73 crore.
Abhishek Akhila
Got it. Got it. No thank you. That’s helpful. Just on the seeds business we’ve seen further reduction in losses there as well as fairly healthy revenue growth this quarter. I know in the past you’ve talked about getting the seed business margins to significantly higher levels on a full year basis closer to 25% or so. So what exactly are the interventions we are making and how confident do we feel that we are on track but by when could we sort of aspire to get close to that target?
Gyanendra Shukla
So I think seed business could be very chunky in growth depending on the new product launches. We had some momentum because of the. North cotton hybrid and now we have launched some products in maize and rice and bajra we are seeing some momentum. I think the margin expansion primarily will happen because of operating leverages. We are well staffed. Team R and D cost is more or less. So our cost of doing business basically will go based on the inflation. So if we can deliver any growth higher than the cost of inflation I think we’ll be able to.
And when you have a new product you are able to price it differently. If it’s a good product you are. Able to sell more faster. So combination of new launches, expansion of the products we have got and benefiting from operating leverages, these are the three. Levers I think will help us drive margin.
Abhishek Akhila
Right. So any sort of aspirational timeline towards getting to that closer to mid-20s kind of margin level?
Gyanendra Shukla
Well so I mean obviously we are not, I mean we always shy away. From giving a guidance but last year. I said look aspirationally in five years. I want to take my seed business closer to thousand crores soil and plant health business. I want to grow by 4x from where it was 225 crore to 700800 crore. These two are relatively high margin businesses. And then obviously CSM also is a high margin business though it is small. And in B2C domestic as well as. B2B export we have to be competitive to Chinese players.
We do get some brand premium in the domestic business. So I mean as I’ve been saying aspirationally I want to grow company in double digit from a revenue perspective and. Expand the margin on an overall blended basis to 500 basis point in five years. So I’m on track. I believe this year we had some setbacks in Kharif because of the excessive rain which happened in the month of September, August and September. As a result some displays were missed. There was a lot of setback for. The companies operating in soybean and cotton herbicide segment.
So all of those things will keep happening. The way I have internalized it look we have technically four segments B2B B2C. Within the crop protection. Then I have a seed business and plant health. There’s a small fifth segment I would say csm. They will not all fire. Unlikely to fire. All of them are likely to fire. At the same time. All we have to ensure is that no we are doing the right things in each of those businesses so that we are ready whenever opportunity presents. So focus on R and D. From a manufacturing standpoint of view, customer standpoint of view to keep launching new product, looking at partnerships to win contracts in CSM space, looking at new registrations and export.
I think those are the things. For example, we launched this platform idea to Idea to impact. I think this would help us accelerate innovation because we believe with our brand equity we are able to we have that level of trust within the society. Where there are a lot of people, those who do innovation, they’re not able to scale it up, take it from. An idea to a product label because. Of the resource constraint. I think some of those ideas are also using to really start bringing new product new ideas.
We are spending on Digital Connect. We talked about some Perk plus app. Which has gone live on Friday that will make sure the efforts related to very focused targeted work at the demand. Generation in connecting those villages. We operate all the way up to retailers and distributors. I think those are all the right efforts and I guess combination of all of that. I think very difficult to predict segment by segment revenue. But all of them actually help in all the other areas, every area and rest all we have to leave it.
To the season and crop prices. We don’t control rainfall, we don’t control so we will do what is right to. We stay focused on our business. We do what is in our control. Right and then we leave it to. The factors and be vigilant in the marketplace so that we are managing our receivables well, we are managing our inventory well without compromising on the growth opportunity. And obviously I talked about changes, leadership, bringing new leaders. No new ideas.
Abhishek Akhila
Yeah, no, thank you. That’s a really helpful color. And just one last thing if I may squeeze in if you could please just share your outlook for the international business just in the context of all these tariffs and all of the uncertainty plus you know, low crop price and everything. How is the demand environment looking for the upcoming calendar year and maybe on the margin front as well, pricing margins. Thank you.
Gyanendra Shukla
So overall I would say we have. Done well in spite of the challenges in fiscal year 27. We are still assessing the Situation because of the new announcement from China and the new geopolitical context, we don’t know how things evolve. At the same time there has been. Softening of crop prices, particularly corn and soybean and Latin America. So I think we will continue to watch the situation. I don’t want to to give what you call guidance on the international business. I know we have been able to.
Recover from the setback we had in 24, 25. And I think our focus is continue. To seek registration, continue to seek partners. Continue to add new customers. In fact, we have added more number of people on ground in international business so that we get more closer to what is happening in those countries and geographies. So that’s how we are managing. Difficult to tell how tariff situation. We were all. I think there’s a bit of uncertainty around that. But I think last year because it. Excluded technical so it did not hurt us much.
How things will change, difficult to predict. It’s very, very uncertain environment right now. And China, I mean there was a news I was reading a couple of days ago. Year on year basis, China has produced more technical. Right. Which means either there’s a demand which is growing fast or there’s a buildup of inventory, you know, restarting at this point of time. I see in the market inventory at. The normalized level and this volume pressure when it comes from China, obviously it. Keeps pressure on the prices.
Abhishek Akhila
Yeah. Thank you. Thank you so much, sir. I wish you all the best.
Gyanendra Shukla
Thank you.
Operator
Thank you. The next question is from the line of Siddharth Karakar from Aquitis. Please go ahead.
Siddharth Karakar
Hi sir. Good morning. So first of the seed business, can. You give some indication in terms of. How have we planned the inventories for. The biggest for the next year?
Gyanendra Shukla
So we have enough, we have planned for enough inventory not only for decades for all the crops this year. If you can see. In spite of the challenges we had on our supply side, we have been. Able to grow our revenue by 15%. On a year in year basis. And last year we did have challenges where seed production crop was not planted on time and all the crops crop came at the same time. As a result there was delays in. Supplies and rains came early. So it became very chaotic to manage. The business in the month of April, May and June.
I think we have taken all the. Precautions, all the things are in place to ensure that we have sufficient inventory to grow the business. I think we have momentum and we. Have to capitalize on it.
Siddharth Karakar
Secondly, on the technical business. Hello.
Gyanendra Shukla
Yeah.
Siddharth Karakar
On the technical business, can you Just give some qualitative comments on the gross margins that we currently are operating at. And how do we see this panning. Out over the next two, three years. In terms of internally what are we doing to improve our efficiency.
Gyanendra Shukla
So I think obviously we keep looking at how can we become a. I mean raw material cost we have to keep looking at. The other area is. Basically ability to find customers where we can get more realization. But when I look at basically export business I think there has been a. Significant expansion in our margin which has exceeded, which has gone beyond 20%. It’s a very, very competitive place. But when I add the CSM business. I think it is falling in the range of our blended margin of about 30%. Seed obviously is a high margin business.
For us as we have been saying. So it’s really, I would say challenges really on the margin front are primarily. On export where we sell what you call catalog product. The other thing we have started doing. Is also domestic institutional business which we don’t talk. So whatever AIs we produce, we also. Have opportunity to sell domestically. I think that’s most competitive. That’s where we make lowest margin. But it ensures that our plants are. Running and we improve our capacity utilization. We don’t sell on losses.
We make probably mid teens margin. But on an overall basis if you say B2B business when you look at. The blended margin it is in excess of 20%.
Siddharth Karakar
Thank you so much.
Operator
Thank you. The next question is from the line of Sourabh Jain from HSBC Mutual Fund. Please go ahead.
Sourabh Jain
Thank you for the opportunity. So we appreciate your comments around the strategy to expand the margins by about 500bps in the next five years. But when I compare nine month to nine month basis performance it seems that the gross margins have actually compressed by about a percent maybe because of rising share of your B2B business. My question is how would you see these margin expanding in the near term over the next one year or so and what to drive that margin expansion?
Gyanendra Shukla
Yeah, so I think there are a. Couple of one off items we had probably would not have impacted. So for example we were planning to launch a insecticide last year and I keep talking about one product did not go as per the plan because when final product came out of the factory there was some quality issues. So as a result we had to take a provision. So a lot of it is actually related to provisions we create for the. Inventory when it doesn’t go as expected. Right. Some of it actually I would say majority are related to that.
So when you look at on a. What you call. If you take one off items, I. Would say we would have marginally improved.
Sourabh Jain
Is it possible to quantify this impact?
Gyanendra Shukla
Yeah. So this impact, if you seize in. Excess of 10 crore rupees roughly. Yeah.
Sourabh Jain
Oh, 10 crores. Okay. So how would your expectations be for the next year? How much of gross margin expansion you think can come to valys on a blended basis? Any insights on that will be useful?
Gyanendra Shukla
One is the gross margin. Other thing is really EBITDA. So when I talk about 500 basis. Point, we are talking about EBITDA margin improvement. Right. And EBITDA margin improvement to me is. More important because that’s what ultimately translate to patent shareholder value creation. Because of diverse nature of business and. Competitiveness of the known nature competitiveness of the industry, I am not interested in losing on the market share because that’s where business starts getting challenging.
So we are saying, okay, we can stay in the gross contribution range and marginally improve but because of the operating leverage, we’ll be able to sell more. Per person or perhaps per employee. And as a result we expand our EBITDA margin so our fixed cost actually does not grow as fast as your other business contribution comes in.
Sourabh Jain
So Most of this 500bps would actually result from operating leverage.
Gyanendra Shukla
Operating leverage.
Sourabh Jain
What could be the benefit utilizations of our plants? Any insights on that side?
Gyanendra Shukla
So this year it has, I mean all across plants our utilization has improved and we are looking at various other. Initiatives which I can’t share at this point of time. I think this year it has been a significant improvement over last year.
Sourabh Jain
Okay, the other question I had you mentioned that you have been able to bring a bioproduct in house that saves you from the regulatory challenges. But can you make a comment on what is the exact status on the regulatory side on the bio fertilizers, how the situation has improved over the last three months and do any significant challenges still remain with the industry on this side?
Gyanendra Shukla
See, I mean I think in countries like India there’ll always be some regulatory challenges because the way our system operates. But I think by and large I. Would say we are out of that situation. For us things are sorted. The other thing which I did mention is that look, our seed team operates. Independent of crop care team. We have also launched a new brand for soil and plant health. And within that brand of new code we have started launching products in different categories of soil and plant health.
And we are seeing a good traction. So soil and plant health will have to sales and marketing engine driving the. Product in the marketplace because there’s a significant opportunity to sell to more farmers because there is some uniqueness of distribution and customers are different. Other thing is that. It’S also better utilization of seed fixed cost because seed. Team carrying a new brand of soil and plant health and also it gives. Us volume as well as double leverage. When seed team is able to sell something beyond seed, it also keeps them.
Connected to the farmer. Because when you have to sell these products you have to visit more frequently farmers and retail network. So in a way I think that solves some of the problem related to. Soil and plant health. A I think smaller players will eventually get weeded out or over a period of time. We have instead of one one channel to carry, we have two distinct channel to carry the product and we keep adding products. So at backend actually it’s a common backend. But front becomes you have two opportunities.
Sourabh Jain
Okay, so is the registration process and other things are smooth now is it working on speed for registering all of these biosite?
Gyanendra Shukla
So, so you can’t say speed but. Yes, it is sorted for us.
Sourabh Jain
Okay, understood. One last question if I may. Can I. Can you please tell us what could be your dependence for technical procurement from China on the blended basis.
Gyanendra Shukla
So on blended basis still it is more than 40%. And when the challenge is not that. All of that can be replaced. Not only it is there, it will continue to be, continue to be there. Because some of the products probably given. The complexity and the stage of product at what life cycle they are. I am not one who says that no, we will be completely moving away from China. I think we have to have more partners in China to ensure that we continue have access to products for some of the things we do.
Sourabh Jain
So when the China government says they are going to remove the export rebates, you know how much of that exposure would be for you when you think about the procurement from China.
Gyanendra Shukla
So, so this is applicable post April. So let’s wait for more details to emerge. At this point of time, I think it’s. It’s not negative for us. I mean it’s common for everybody. It will not apply only to us.
Sourabh Jain
Yeah, okay, sure. Thank you so much and all the best.
Operator
Thank you. The next question is from the line of Ramesh Shankar Narayan, an individual investor. Please go ahead.
Ramesh Shankar Narayan
Good morning and thank you very much and congratulations on the performance given the challenging environment. So if you look at your third quarter B2C growth of 13% how would it compare with the overall industry growth in the same segment or category?
Gyanendra Shukla
So it’s very difficult to comment about. Industry because not many people have reported numbers. So I don’t want to speculate but. I think generally Ravi has been better. Compared to previous Ravi. So depending on the portfolio, depending on. The crop segment people operated for example, I can tell you so we have. Done very well in crops like potato. And cumin with fungicides and all. But somebody who had a wheat herbicide. Strong portfolio wheat herbicide companies would have done well. So again it’s crosses.
If somebody was depending on the grape. I think grape has been a challenging crop. Cumin area dropped as a result. It has been challenging. So it’s very crop specific and portfolio focused. There’s no one comment I can make about what is happening in industry. Different players would have got positively or. Negatively impacted depending on the crop they participated.
Ramesh Shankar Narayan
Okay, so if you look at your aspiration numbers for seeds and soil and health, what would be the growth capex you have to invest to achieve these numbers excluding working capital and in terms of your future, you know, focus on roce. Would you see these two businesses driving your improvement in roce given the investment you need to do and the kind of growth you can expect in these two businesses?
Gyanendra Shukla
So, so I think coming back to. Your question on capex, I think I have said it and I want to. Retreat that look, unless I have a very firm contract to make something for somebody, we are not going to put any significant capex ahead of what you call market market demand. I think we have enough steel on the ground, we have enough plants and equipments on the ground to continue to grow. Having said that there will always be. Sustenance capex now which will continue to. Be required and that’s all we have.
Planned at this point of time.
Ramesh Shankar Narayan
So on the CSM business you say the margins around 13%. So if you look at your again aspirational target in CSM do you see some traction in terms of getting higher value contracts which will improve the margins and return on capital for the CSM business? And what would be the aspirational revenue targets in the next three to five years given the kind of opportunity that Indian companies see in CSM overall?
Gyanendra Shukla
So look, when it comes to CSM. There are quite a few established players and I guess they have built their reputation being a CSM player. So it’s not easy to take away business from them. What we have to see is that what is new coming in terms of. Patented product, our unique opportunities and that’s. Where we are always in touch with. And we are I would say rather more active in keeping in touch with those players and we do have some small opportunities in hand at this point. Of time and they are at different stages of execution.
I think some of those opportunities we. Will start seeing contributing in a small. Manner from 27 onward. But there’s no large big molecule opportunities available even in the market. So. But that business, I think for example. With our existing partner there’s a new molecule coming we probably will end up making for them. There are no 500 crore opportunities I. Would say at this point of time which are available.
Ramesh Shankar Narayan
Thank you very much. Dr. Shukla and Bhaskar wish you all the best. Thank you very much.
Gyanendra Shukla
Thank you.
Operator
Thank you very much. Ladies and gentlemen, we take that as a last question and conclude the question and answer session on behalf of Ralix India Limited. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines.
Gyanendra Shukla
Thank you. Thank you. Thanks everybody.