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Rallis India - 2QFY2016 Result Update - Angel Broking
Posted On : 2015-11-04 21:07:19( TIMEZONE : IST )
Rallis India (Rallis) posted disappointing results for 2QFY2016. Sales for the quarter came in at Rs. 499.7cr V/s Rs. 635.9cr in 2QFY2015, a dip of 21.4% yoy. Sales were adversely impacted due to poor monsoon in India, while the international market also faced pressure with Brazil (a key market for the company) witnessing a severe drought. In USA, low crop commodity prices along with higher inventory prices impacted consumption. On the operating front, the gross margins came in at 46.7% V/s 38.5% in 2QFY2015, which lead the OPM to come in at 18.9% V/s 18.2% in 2QFY2015. The PAT came in at Rs. 57cr V/s Rs. 73cr in 2QFY2015, a yoy dip of 22.0%. We remain Neutral on the stock.
Disappointing sales: For 2QFY2016, sales came in at Rs. 499.7cr V/s Rs. 635.9cr in in 2QFY2015, a dip of 21.4% yoy. Sales were adversely impacted due to poor monsoon in India, while the international market also faced pressure with Brazil (a key market for the company) witnessing a severe drought. In USA, low crop commodity prices along with higher inventory prices impacted consumption. On the operating front, the gross margins came in at 46.7% V/s 38.5% in 2QFY2015, which lead the OPM to come in at 18.9% V/s 18.2% in 2QFY2015. The PAT came in at Rs. 57cr V/s Rs. 73cr in 2QFY2015, a yoy dip of 22.0%.
Outlook and valuation: The Management is confident about the long-term prospects of the agrochemicals industry. We expect Rallis to register a CAGR of 15.1% and 16.7% in net sales and profit, respectively, over FY2015-17E. At the current levels, the stock is trading at a fair valuation of 18.7x its FY2017E EPS. Hence, we maintain our Neutral recommendation on the stock.
Shares of RALLIS INDIA LTD. was last trading in BSE at Rs.203.85 as compared to the previous close of Rs. 206.25. The total number of shares traded during the day was 5699 in over 217 trades.
The stock hit an intraday high of Rs. 207 and intraday low of 202.55. The net turnover during the day was Rs. 1167633.
