Hold Rallis India Ltd - Emkay

Reco: HOLD
CMP: Rs 122
Target Price: Rs 120

Margins disappoint

- Q1FY13 results were broadly in line with est. Though topline growth was ahead of est, however margins disappointed. Cons revenues grew by 16% yoy while APAT declined 8% yoy

- Standalone margins declined 270bps yoy to 10.4% while Metahelix margins declined 280bps yoy. Consol EBITDA margin stood at 12% against est of 13.1%

- Delayed monsoons have impacted kharif sowing this year. Consumption of agrochemicals needs to be closely observed as farmers are already grappling with lower incomes

- We have been wary about the near term industry growth and margin pressure due to deteriorating farm income. Maintain HOLD rating with target price of Rs120.

Source : Equity Bulls

Keywords