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For 4QFY2016, Rallis India (Rallis) posted sales of Rs342cr V/s Rs315cr in 4QFY2015, a growth of 8.6% yoy. The same was driven by higher offtake in export orders which have been getting differed since the past two quarters due to a challenging environment faced by global companies. Domestic growth continued to remain muted during the quarter. On the operating front, the gross margin came in at 43.3% V/s 47.0% in 3QFY2015, leading the OPM for the quarter to decline to 10.4% V/s 12.3% in 3QFY2015. In spite of the same, the PAT came in at Rs32cr V/s Rs21cr in 3QFY2015, a growth of 51.3% yoy. This was on back of the depreciation dipping by 55.4% yoy and a 132.1% yoy growth in other income (which came in at Rs15cr V/s Rs6cr in 4QFY2015). We remain Neutral on the stock. Margins disappoint: Company posted a robust growth in the top-line of 8.6% yoy to Rs342cr, mainly driven by exports. On the operating front, the gross margin for the quarter came in at 43.3% V/s 47.0% in 4QFY2015, while the OPM came in at 10.4% V/s 12.3% in 4QFY2015. The PAT came in at Rs32cr V/s Rs21cr in 4QFY2015, posting a growth of 51.3% yoy which is in spite of a contraction in the OPM. The PAT was aided by a 55.4% yoy dip in depreciation and 132.1% yoy growth in other income (which came in at Rs15cr V/s Rs6cr in 4QFY2015). Outlook and valuation: For FY2016-18E, we expect a CAGR of 15.0% and 22.3% in net sales and profit, respectively, with recovery expected in FY2017E. At the current levels, the stock is trading at a fair valuation of 17.9x its FY2018E EPS. Hence, we maintain our Neutral recommendation on the stock.Download Full Report
|Investment Period||12 Months|
|MCAP BSE (Rs in Cr)||3,917.58|
|MCAP NSE (Rs in Cr)||3,932.16|
|Div Yield (%)||1.24|
Shareholding Pattern (%)
|Public & Others||25.0|