Rallis India - Q1FY22 First Cut - ICICI Direct

(CMP: Rs. 327, MCap: Rs. 6361 crore)

Topline mostly in line with estimates however bottom-line missed owing to lower than expected operational performance.

Q1FY22 Earnings Summary

- The revenue for the quarter was up by 11.7% YoY to Rs. 740.5 crore against our estimates of Rs. 748 crore. The segmental details are still awaited, but we expect growth should have been driven from seeds segment primarily

- Lower gross margins (-90bps YoY) along with higher employee and other cost dragged OPM by 300bps YoY to 16.4% leading to EBITDA fall of 5.3% YoY to Rs. 121.5 crore against our estimates of Rs. 139.2 crore

- PAT for the quarter declined by 10% YoY to Rs. 82.3 crore against our estimates of Rs. 98.3 crore

We believe since organic expansion is already under way with clear focus on maintaining/improving IRR profile of the business, it is evident that group operational performance is likely to improve in the medium to long run. Further, control on the working capital and better allocation of incremental cash would aid return ratios further and, thereby, can command better valuations.

We would be coming out with a detailed report soon.

Shares of RALLIS INDIA LTD. was last trading in BSE at Rs. 327 as compared to the previous close of Rs. 333.25. The total number of shares traded during the day was 69157 in over 1259 trades.

The stock hit an intraday high of Rs. 335.65 and intraday low of 323. The net turnover during the day was Rs. 22561470.

Source : Equity Bulls

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