Angel Broking neutral on Rallis India

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Angel Broking neutral on Rallis India

Angel Broking has maintained neutral rating on Rallis India, in its February 3, 2012 research report.

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Angel Broking has maintained neutral rating on Rallis India , in its February 3, 2012 research report.

"For 3QFY2012, Rallis India (RAIL) reported 18.6% growth in its net sales. However, net profit growth declined by almost 78% yoy. However, adjusted for the extra-ordinary the net profit declined by 23% yoy. The disappointment mainly came on the OPM front, which declined by almost by 10.4% on yoy. We expect RAIL to register a CAGR of 19.8% and 21.4% in its net sales and profit over FY2011-13, respectively. We remain Neutral on the stock."

"RAIL's revenue for the quarter grew by 18.6% yoy to `318cr. Major growth for the company came in through the exports, while domestic business was flat. On the Operating front, the Gross margins came in flat at 40.6%, however there was a sharp dip in the OPM's which declined by 10.4% yoy. This dip was on account of significant rsie in other expenditure, which resulted in sharp dip in the net profit."

"Management is confident about the prospects for the agrochemicals industry. The company expects to outperform the industry, given its product pipeline. Overall, we expect RAIL to register a CAGR of 19.8% and 21.4% in its net sales and profit over FY2011-13, respectively. At current levels, the stock is trading at fair valuations of 14.2x FY2013E EPS. Hence, we maintain our Neutral recommendation on the stock," says Angel Broking research report.

Public holding more than 90% in Indian cos

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