Rallis India - 4QFY2017 Result Update - Angel Broking

For 4QFY2017, Rallis India (Rallis) reported a yoy de-growth of 1.2% in sales to Rs. 348cr (v/s Rs. 352cr in 4QFY2016). On the operating front, the OPM came in at 12.0% (v/s 12.8% in 4QFY2016). Owing to lower sales growth, a higher depreciation expenses and decline in other income (Rs. 5cr v/s Rs. 9cr in 4QFY2016), the Adjusted Net profit de-grew by 10.0% yoy to Rs. 31cr (v/s Rs. 34cr in 4QFY2016). We maintain our Neutral view on the stock.

Lackluster performance: For 4QFY2017, the company reported a yoy growth of 6.8% in sales to Rs. 348cr (v/s Rs. 352cr in 4QFY2016). On the operating front, the gross margin came in at 39.6% (v/s 36.6% in 4QFY2016), while higher other expenses aided the OPM to come in at 12.0% (v/s 12.8% in 4QFY2016). Owing to lower sales growth, a higher depreciation expenses and decline in other income (Rs. 5cr v/s Rs. 9cr in 4QFY2016), the Adjusted Net profit de-grew by 10.0% yoy to Rs. 31cr (v/s Rs. 34cr in 4QFY2016).

Outlook and valuation: For FY2017-19E, we expect a CAGR of 11.5% and 21.0% in net sales and profit respectively. At the current levels, the stock is trading at a fair valuation of 23.0x its FY2019E EPS. Hence, we maintain our Neutral view on the stock.

Shares of RALLIS INDIA LTD. was last trading in BSE at Rs.249 as compared to the previous close of Rs. 247.5. The total number of shares traded during the day was 59008 in over 1197 trades.

The stock hit an intraday high of Rs. 251.95 and intraday low of 244.65. The net turnover during the day was Rs. 14658915.

Source : Equity Bulls

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