Anand Rathi has given Buy recommendation for Rallis India with a target price of Rs. 320 in its research report issued on Apr 25, 2022

Anand Rathi’s research report on Rallis India

Non-availability of key raw materials, higher input prices and declining international business growth hurt Rallis Q4 and annual performance. Key short-term challenges are rising input costs, softer contract-manufacturing demand and challenges in its seeds business, but its product-launch focus, rising share of its herbicide range, export market-share gains and ongoing capex plans would support long-term growth.

Outlook

Management said Q1 FY23 would be soft and margin pressure would continue due to RM non-availability and rising input costs. It targets maintaining absolute EBITDA rather than percent. We cut our FY23e/ FY24e considering the steep rise in RM prices, expected to be higher in coming months. We maintain our Buy rating, with a TP of Rs320, valuing the stock at 24x FY24e earnings.

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