Rallis India - Q4FY13 - Results meet expectations; time to build on from here - GEPL Capital

- Rallis India Limited (Rallis) reported a 32% growth in Net Sales for Q4FY13 at Rs. 2,849 mn versus Rs. 2,157 mn in Q4FY12 which was in-line with street expectations. A large part of the revenue growth was driven by price increases taken through the year.

- EBITDA more than doubled to Rs. 282 mn in Q4FY13 versus Rs. 122 mn in Q4FY12. This was driven by reduction of staff cost as a percentage of sales from 9.8% to 7.7% and also of Other Expenses from 26.8% to 20.6%. Consequently, EBITDA margin came in at 9.9% versus 5.7% for the same period last year.

- PAT came in at Rs. 113 mn in Q4FY13 versus Rs. 99 mn in Q4FY12, a growth of 14% Y-o-Y. Last year's PAT was propped up by cessation cost of Rs. 70.5 mn and hence the comparable growth was even greater. Tax incidence was 37% higher in Q4FY13 and hence PAT margin came in lower at 4% versus 4.8% in Q4FY12.

At the CMP of Rs. 125, Rallis is trading at 17x its FY14E EPS of Rs. 7.39 and 13x its FY15E EPS of Rs. 9.34. Rallis continues to trade at more than 30% premium to domestic peers owing to its strong brand value, robust financials and credible management and parent company. We believe that the premium will continue and Rallis has strong upside potential from its seeds and organic manures portfolio coupled with stable base business. We value Rallis at 15x its FY15E earnings to arrive at the target price of Rs. 140, indicating an upside potential of 12% and recommend to ACCUMULATE the stock.

Source : Equity Bulls

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