Company Report | Q1 FY12 Result Update

LONG TERM INVESTMENT CALL

28 July 2011 Industry CMP (INR) Target (INR) Upside / Downside (%) 52 week High/Low (INR) Market Cap (INR MN) 3M Avg. Daily Volumes (000s) P/E (FY12E) Shareholding Pattern (%) Agrochem 168 204 21 172/117 32,760 119,870 17.8 Q1FY12 Result Highlights

BUY

Rallis India Ltd. (RALI) posted Q1 FY12 results inline with Unicon estimates. Topline for the quarter stood at INR 2,384mn, up 16.1% on YoY basis. Revenue growth was primarily driven by increased volumes while prices remained stable. Traded products also registered an increase of 19% in volumes. Consolidated revenues grew by 47% YoY to INR 3bn due to robust growth in the seeds business.

EBITDA increased by 25% YoY to INR 314 mn while EBITDA margin expanded by 81bps YoY to 13.2% in the quarter. On consolidated level, margin improved by 340bps to 14.6%. EBITDA margin for Metahelix stood at ~20.6% compared to 13.1% registered by the standalone company.

Net profit also grew by 11.7% YoY to INR 166 mn while net profit Stock Performance margin remained flat ~7% in the same period.

Capex: In addition to the Dahej facility the company has planned a capex of INR 1bn to launch new products in FY12. The INR 1.5bn Dahej project is expected to come on-stream in FY12.

Outlook & Valuation RALI would benefit from healthy monsoons in FY12. The govt. has estimated a 4% increase in consumption of agrochemicals in the
* Source: ACE Equity

current crop year. Rallis seed business would continue to show uptick in revenues.
1M 3M 12M

Performance (%) RALI NSE Nifty -3.6 0.3 -2.6 -3.6 20.3 1.8
(INR Mn)

Rallis is poised for strong growth on account of strong product mix, ability to launch new products successfully, commissioning of Dahej facility, strong distribution channel and contract manufacturing alliance with several multinational agrochemical companies. Stock is trading at 17.8x its FY12E earnings. We upgrade the stock to BUY with a revised price target of INR 204.

Particulars Total Income EBIDTA Reported PAT

Actual 2,384 314 166

Estimates 2,455 283 177

* Source: ACE Equity, Unicon Research

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd. Email: wealthresearch@unicon.in

Standalone Financials
(INR Mn)

Q1 FY12 Net Revenue Other Operating income Net revenue & Other operating income Other income Total Income Operating Exp. EBITDA EBITDA (%) Depreciation EBIT EBIT (%) Financial charges PBT Tax Provision Tax Rate (%) Reported PAT Reported PAT (%) EPS
Source: Company, Unicon Research

Q1 FY11 1,960 72 2,033 21 2,053 1,801 252 12.4 36 216 10.5 0 216 68 31.4 148 7.2 0.8

Y-o-Y 18.7 -24.5 17.2 -89.9 16.1 14.9 24.8 81 bps 42.2 21.9 53 bps NA 12.6 14.6 55 bps 11.7 -27 bps 11.8

Q4 FY11 2,195 126 2,321 5 2,326 1,970 355 15.3 53 303 13.0 18 285 95 33.5 190 8.2 1.0

Q-o-Q 6.0 -56.7 2.6 -55.3 2.5 5.0 -11.5 -211 bps -3.0 -13.0 -197 bps 13.6 -14.6 -18.6 -154 bps -12.7 -121 bps -13.3

2,327 55 2,382 2 2,384 2,069 314 13.2 51 264 11.1 20 243 78 31.9 166 7.0 0.9

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd. Email: wealthresearch@unicon.in

Unicon Investment Ranking Methodology

Rating Return Range Buy >= 20% Accumulate 10% to 20% Hold -10% to 10% Reduce -10% to -20% Sell <= -20%

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Wealth Research, Unicon Financial Intermediaries. Pvt Ltd. Email: wealthresearch@unicon.in