Rallis India - Q1 FY13 Result Analysis - Microsec

Rallis India, a Tata group company is involved in pesticides, seeds and organic manure business. It announced its Q1 FY2013 results on 23 July 2012. The company's top line was in-line with our expectation and it grew by 16% on yoy basis where around Rs.750Mn contributed from Metahelix. In this quarter, export contributes better than domestic business. The EBITDA margin dropped by 260 basis points due to the marketing expenditure, rupee depreciation and R&D expenditure on Metahelix Life Science. PAT margin fell by 77 basis points on account of the foreign exchange loss of Rs.50 Mn, whereas company has no open hedge position. During the 1st quarter other income is Rs.94.10 Mn out of which Rs.78.3 Mn was from selling of residential property.

View: Due to the currency volatility, changing crops pattern and delay in monsoon, we recommend "Hold" for the near term and maintain our target price of Rs.127.

Source : Equity Bulls

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