Rallis India - Strong revenue growth but margin disappoints - Emkay

Reco: ACCUMULATE
CMP: Rs 129
Target Price: Rs 144

- Rallis Q4FY13 results were below est as lower than expected margins dragged profitability. Revenue increased by 32% while PAT increased by 2.5x to Rs 105mn on low base

- Higher raw material cost and poor demand has put pressure on margins in FY13. However revenue growth of 14% in FY13 was primarily driven by exports

- Company shared encouraging outlook for current year driven by IMD's forecast of average monsoon and traction in its exports business with addition of one more client globally

- Given company's rich valuation at current level at 15.7xFY14 est of Rs 8, we maintain our Accumulate rating on the stock. We also introduce FY15 earnings est of Rs 10.1.

Source : Equity Bulls

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