Rallis India - Diwali Pick 2012 - GEPL Capital

- Rallis to benefit from Metahelix's hybrids

- Recent acquisition of Zero Waste Agro Organics demonstrates company's commitment to green products

- Increase in MSPs and rising food inflation augurs well for farmer sentiments

Consistent performance and a strong balance sheet

At the Current Market Price (CMP) of Rs.149, Rallis is trading at 16x its FY14E EPS of Rs.10.41. With the Capital Expenditure at Dahej behind it and revenue ramp up from Metahelix happening, we expect Rallis to report a robust growth in topline (18% CAGR) over FY12-FY14E. Considering the consistent fundamentals and strong business model, we value the stock at 17x its FY14E EPS to arrive at the target price of Rs.177 with a BUY rating indicating an upside potential of 19%.

Source : Equity Bulls

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