Rallis India - 1QFY2018 Result Update - Angel Broking

For 1QFY2018 Rallis India (Rallis) reported a yoy de-growth of 1.0% in sales to Rs. 446cr (v/s. Rs. 450cr in 1QFY2017). The performance of Rallis was impacted during the quarter on the back of transition to GST and high channel inventory. On the operating front, the OPM came in at 15.6% (v/s. 16.7% in 1QFY2017). Owing to lower sales growth the Adjusted Net profit de-grew by 8.1% yoy to Rs. 45cr (v/s. Rs. 49cr in 1QFY2017). We maintain our Neutral view on the stock.

Lackluster performance: For 1QFY2018, the company reported a yoy de-growth of 1.0% in sales to Rs. 446cr (v/s. Rs. 450cr in 1QFY2017). The performance of Rallis was impacted during the quarter on back of transition to GST and high channel inventory. On the operating front, the gross margin came in at 46.1% (v/s. 46.0% in 1QFY2017), while higher other expenses aided the OPM to come in at 15.6% (v/s. 16.7% in 1QFY2017). Owing to lower sales growth, the Adjusted Net profit de-grew by 8.1% yoy to Rs. 45cr (v/s. Rs. 49cr in 1QFY2017).

Outlook and valuation: For FY2017-19E, we expect a CAGR of 11.5% and 21.6% in net sales and profit respectively. At the current levels, the stock is trading at a fair valuation of 22.5x its FY2019E EPS. Hence, we maintain our Neutral.

Shares of RALLIS INDIA LTD. was last trading in BSE at Rs.241 as compared to the previous close of Rs. 240.1. The total number of shares traded during the day was 13241 in over 291 trades.

The stock hit an intraday high of Rs. 243.5 and intraday low of 240.5. The net turnover during the day was Rs. 3201749.

Source : Equity Bulls

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