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View Full Version : Rallis India Limited (NSE:RALLIS) (BSE:500355)



SMR
07-30-2015, 01:45 PM
Rallis India Limited is an India-based company engaged in the business of manufacture and marketing of Agri Inputs. The Company has its manufacturing facilities in India and sells both in India and across the globe. The Company’s manufactures and markets products for agriculture including pesticides, seeds and fertilizers. The Company is a subsidiary of Tata Chemicals Limited. The Company’s business segment includes Agri-Inputs and others. Agri-Inputs consists pesticides, plant growth nutrients and seeds. The other business segment includes polymer. Its seeds portfolio covers cereals and fiber crops. It produces and markets hybrids or research varieties of maize, paddy and cotton. It supplies a range of micronutrients for a range of crops and soil.


Official website: www.rallis.co.in

SMR
07-30-2015, 01:46 PM
Rallis India (Rallis) posted a disappointing set of numbers for 1QFY2016. On the top-line front, it reported a de-growth of 0.4% yoy to Rs464cr. Sales were impacted by weak demand. On the operating front, the company reported an EBITDA margin of 11.2% V/s 12.1% in 1QFY2015, a contraction of 94bp yoy. This was inspite of the gross margin expanding by 214bp yoy for the quarter to 52.5%. Thus, lower sales are the main culprit impacting EBDITA margins. The PBT before extraordinary items posted a de-growth of 13.4% yoy owing to a 66.3% yoy rise in interest cost. The Adj. net profit declined by 10.5% yoy to ~Rs33cr. We remain Neutral on the stock. Disappointing sales: On the top-line front, Rallis reported a de-growth of 0.4% yoy to Rs464cr. Sales were impacted by weak demand. On the operating front, the company reported an EBITDA margin of 11.2% V/s 12.1% in 1QFY2015, a contraction of 94bp yoy. This was inspite of the gross margin expanding by 214bp yoy for the quarter to 52.5%. The PBT posted a de-growth of 13.4% yoy owing to a 66.3% rise in interest cost. The Adj. net profit declined by 10.5% yoy to ~Rs33cr. Outlook and valuation: The Management is confident about the long-term prospects of the agrochemicals industry. We expect Rallis to register a CAGR of 15.1% and 16.7% in net sales and profit, respectively, over FY2015-17E. At the current levels, the stock is trading at a fair valuation of 20.3x FY2017E EPS. Hence, we maintain our Neutral recommendation on the stock.

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