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Rallis India Target - | 302
• Rallis India, a Tata enterprise, is a major crop protection (agro
chemicals) player domestically with presence across the
agricultural value chain including hybrid seeds (through its
subsidiary Metahelix), plant growth nutrients and organic manure
& soil conditioners. In FY10-14, sales and PAT recorded a CAGR of
18.4% and 10.6%, to | 1727 crore and | 152 crore, respectively
• Rallis also has a notable presence in the contract manufacturing
segment wherein it manufactures chemicals and formulations for
other reputed industry players. It is developing its new Dahej SEZ
unit for the purpose of contract manufacturing and clocked a
topline of ~| 250 crore from this segment in FY14. The company
also possesses good brand recall and enhanced farmer reach. Its
distribution network comprises 2,000 dealers and 30,000 retailers.
Rallis is also de-risking its business profile through increasing
share of non-pesticide portfolio in the total product mix
• Rallis has a lean balance sheet with minimal leverage and strong
return ratios with FY14 RoCE & RoE at 21% & 28%, respectively.
The company also possesses relatively better working capital
cycle with net working capital days at 23 days in FY14 vis-à-vis
industry average of ~44 days. We expect sales and PAT to grow
at a CAGR of 16.8% and 21.6%, respectively, in FY14-17E. We
have valued the company at 24x P/E on an average FY16E and
FY17E EPS of | 12.6 and arrived at a target price of | 302 with a
long term (18-24 months) investment horizon
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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Rallis India Target - | 302
• Rallis India, a Tata enterprise, is a major crop protection (agro
chemicals) player domestically with presence across the
agricultural value chain including hybrid seeds (through its
subsidiary Metahelix), plant growth nutrients and organic manure
& soil conditioners. In FY10-14, sales and PAT recorded a CAGR of
18.4% and 10.6%, to | 1727 crore and | 152 crore, respectively
• Rallis also has a notable presence in the contract manufacturing
segment wherein it manufactures chemicals and formulations for
other reputed industry players. It is developing its new Dahej SEZ
unit for the purpose of contract manufacturing and clocked a
topline of ~| 250 crore from this segment in FY14. The company
also possesses good brand recall and enhanced farmer reach. Its
distribution network comprises 2,000 dealers and 30,000 retailers.
Rallis is also de-risking its business profile through increasing
share of non-pesticide portfolio in the total product mix
• Rallis has a lean balance sheet with minimal leverage and strong
return ratios with FY14 RoCE & RoE at 21% & 28%, respectively.
The company also possesses relatively better working capital
cycle with net working capital days at 23 days in FY14 vis-à-vis
industry average of ~44 days. We expect sales and PAT to grow
at a CAGR of 16.8% and 21.6%, respectively, in FY14-17E. We
have valued the company at 24x P/E on an average FY16E and
FY17E EPS of | 12.6 and arrived at a target price of | 302 with a
long term (18-24 months) investment horizon
�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��
��
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