Q4FY21 Result Update - Rallis India - ICICI Direct

Q4FY21 revenues grew 36% YoY to Rs. 471.3 crore (I-direct estimate: Rs. 377.6 crore) amid 73% growth in international business (52% of revenues in Q4) to Rs. 245 crore led by volume growth. The domestic business grew 11% YoY to Rs. 226 crore. Crop protection business increased 38% to 445 crore and seeds business grew 8% to Rs. 26 crore. EBITDA margins were at 3.8% (I-direct estimate: 2.4%) vs. -2.8% in Q4FY20 mainly due to operational leverage. EBITDA profit was at Rs. 17.7 crore (I-direct estimate: Rs. 9 crore) against EBITDA loss of Rs. 9.8 crore. PAT was at Rs. 8.1 crore (I-direct estimate: loss of Rs. 0.4 crore) against Rs. 0.7 crore mainly due to a strong operational performance.

Valuation & Outlook

While Q4FY21 revenues were driven by robust growth in export, continuous improvement in domestic growth and lower base, margins improved due to better operational leverage. Normal monsoon prediction and continuous strong demand is likely to drive FY22 growth. Also, we believe since outlined organic expansion is already underway with clear focus on maintaining/improving IRR profile of the business, it is evident that group operational performance should improve in the medium to long run. Besides this, control on working capital and better allocation of incremental cash should aid return ratios further. We arrive at a target price of Rs. 350 (22x PER of FY23E, unchanged TP). We maintain BUY.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_RallisIndia_Q4FY21.pdf

Shares of RALLIS INDIA LTD. was last trading in BSE at Rs.275.5 as compared to the previous close of Rs. 281.85. The total number of shares traded during the day was 343579 in over 9066 trades.

The stock hit an intraday high of Rs. 291 and intraday low of 267.4. The net turnover during the day was Rs. 97435329.

Source : Equity Bulls

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