Prabhudas Lilladher has given Hold recommendation for Rallis India with a target price of Rs. 280 in its research report issued on Jan 20, 2022

Prabhudas Lilladher’s research report on Rallis India

Rallis India’s (RALI) 3QFY22 results were broadly in line with ours as well as consensus estimates. Key highlights are: 1) domestic revenue grew 9% YoY largely from price-led growth (9MFY22 +12% YoY); while crop care segment was up 13% YoY (9MFY22 +12% YoY); 2) export revenue surged 19% YoY (9MFY22 +13% YoY); 3) seeds revenue declined 31% YoY (9MFY22 -14% YoY); 4) pricing and volume pressure in metribuzin easing out; 5) better product mix coupled with recent price hikes to pass on inflated RM cost supported margins; 6) launched 1 new product each in crop nutrition, organic manure and seed category in 3QFY22; YTDFY22 6 new product launches with 2 products each launched in 9(3), 9(4) and seed category respectively and 7) ITI for 9MFY22 stood at 11% (12% in FY21).

Outlook

We have built healthy recovery in domestic as well as export business of RALI over FY22- 24 and believe that most of the positives are factored in CMP. That said, due to the limited upside in the stock we downgrade our rating from Accumulate to HOLD with revised TP of Rs280 (Rs270 earlier) based on 18xFY24E EPS.

More Info on Trent

At 16:00 hrs Rallis India was quoting at Rs 256.50, up Rs 1.55, or 0.61 percent.

It has touched an intraday high of Rs 261.55 and an intraday low of Rs 255.00.

It was trading with volumes of 28,362 shares, compared to its thirty day average of 29,200 shares, a decrease of -2.87 percent.

In the previous trading session, the share closed down 3.13 percent or Rs 8.25 at Rs 254.95.

The share touched its 52-week high Rs 362.00 and 52-week low Rs 243.85 on 18 June, 2021 and 19 March, 2021, respectively.

Currently, it is trading 29.14 percent below its 52-week high and 5.19 percent above its 52-week low.

Market capitalisation stands at Rs 4,988.13 crore.

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