Rallis India - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, Rallis India (RAIL)'s consolidated net sales grew by 34.0% yoy to Rs. 279cr. The OPM for the quarter came out to 7.9%, ie an expansion from 5.5% in 4QFY2012. The yoy expansion in the OPM resulted in a 104.0% yoy rise in the company's adjusted net profit to Rs. 11cr. Going forward, we expect RAIL to register a CAGR of 15.0% and 20.5% in net sales and profit respectively, over FY2013-15. We remain Neutral on the stock.

Robust growth: RAIL's revenue for the quarter grew by 34.0% yoy to Rs. 279cr. On the operating front, the gross margin came in at 36.8%, down 318bp yoy. However, on account of the lower rise in the staff and other expenditure, the OPM expanded to 7.9% in 4QFY2013 vs 5.5% in 4QFY2012. This resulted in a growth in the adjusted net profit by 104.0% yoy to Rs. 11cr.

Outlook and valuation: The Management is confident about the long-term prospects of the agrochemicals industry. We expect RAIL to register a CAGR of 15.0% and 20.5% in net sales and profit respectively, over FY2013-15. At the current levels, the stock is trading at a fair valuation of 14.1x FY2015E EPS. Hence, we maintain our Neutral recommendation on the stock.

Source : Equity Bulls

Keywords