Rallis India Limited experienced a notable drop in its share price during early trading on  Wednesday, following the announcement of a significant decline in its net profit for the  December quarter. The stock hit its lowest point in over nine months, as investors reacted to  the disappointing financial results, which the company attributed mainly to one-time  provisions related to the new labour and wage codes. 

The share price of Rallis India fell by as much as 3.76 per cent, reaching an intraday low of  ₹221.50 on the National Stock Exchange (NSE), marking its weakest level since April 15,  2025. This initial decline reflected market apprehensions regarding the sharp year-on-year  drop in profitability, despite improvements in operational metrics during the quarter. 

In the early trading hours, around 0.6 million shares of Rallis India changed hands. However,  as the session progressed, the stock managed to recover some of its losses. By 10:16 AM, it  had bounced back, trading 1.48 per cent higher at ₹233.55, suggesting that investors were  also encouraged by the company’s robust revenue growth and operational performance. In  contrast, the benchmark Nifty 50 index was down by 0.33 per cent at that time. 

Over the past year, Rallis India shares have seen a decline of 8.79 per cent, underperforming  the broader market, as the Nifty 50 index recorded a gain of 9.32 per cent during the same  timeframe. 

Financial Performance and Impact of One-off Provisions 

Rallis India explained the sharp decline in profitability by reporting that its net profit for the  third quarter of the current financial year (Q3FY26) plummeted by 81 per cent year-on-year  to ₹2 crore, down from ₹11 crore in the same quarter last year (Q3FY25). The company  clarified in its exchange filing that this decline was primarily due to additional gratuity  provisions made in anticipation of the new Wage Code, which was considered a one-time  adjustment.

Despite the pressure on net profit, the company achieved strong top-line growth during the  quarter. Revenue rose by 19 per cent year-on-year to ₹623 crore in the December quarter,  compared to ₹522 crore in the same period last year. This growth was bolstered by improved  volumes across key business segments. 

Operating performance also showed significant improvement. Earnings before interest, taxes,  depreciation, and amortisation (EBITDA) increased by 29 per cent year-on-year to ₹58 crore  in Q3FY26, up from ₹44 crore in Q3FY25, reflecting better cost management and operational  efficiency. 

Business Outlook and Operating Environment 

Rallis India reported volume growth in both its crop care and seeds segments during the  quarter. However, this growth was somewhat offset by price declines across segments, which  limited overall business expansion. In its investor presentation, the company noted that  pricing pressure remained a significant challenge during the quarter. 

In Q3FY26, the company concentrated on volume expansion, promoting new products, and  enhancing market reach through increased digital engagement. However, demand conditions  were somewhat subdued for certain crops, such as cumin, chillies, and paddy, due to seasonal  variations. Extended rainfall, lower commodity prices, and high channel inventory levels also  impacted demand during the quarter. 

The company observed that channel inventory remained elevated towards the end of the  December quarter but is expected to normalise through liquidation in the fourth quarter of the  financial year (Q4FY26). Additionally, margins faced pressure from rising input costs and  increased competition from Chinese imports, further affecting profitability. 

Management indicated that while short-term challenges remain, the company is committed to  improving volumes, strengthening its market presence, and navigating the evolving operating  landscape.