Buy Rallis India; target of Rs 250: Prabhudas Lilladher

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26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Rallis India

RALI in their pre-quarterly conference call highlighted that (a) domestic crop care business likely to post subdued performance primarily led by tepid demand due to disproportionate rainfall resulting into lower pest infestation and miss in sprays; (b) exports at a better-off position led by improved demand scenario globally supported by better product and price mix, however have cautious outlook due to drought in US and European markets; (c) herbicides continues to outperform (to post double digit growth in 2Q) as compared to insecticides and fungicides category; (d) launched 3 new 9(3) molecules in 1HFY23 as against guidance of 4 product launches in FY23E, additionally launched 5 new 9(4) molecules in 1H’23; (e) crop nutrition business to post double digit revenue growth, aided by better product mix; (f) high cost inventory to exert pressure in near term, however remains confident to maintain absolute EBITDA led by recent price hikes. We expect revenue/PAT CAGR of 13%/18% over FY22-25E (vs 8%/3% over FY11-22). Retain ‘BUY’.

Outlook

We retain ‘BUY’ on Rallis India (RALI) with a target price of Rs250 (Rs230 earlier) based on 18xFY25 EPS even as we reduce our EPS estimates by 5.5% and 4.9% for FY23/24E on near term margin pressures due to high cost raw material inventory in 2Q23 despite 4-5% price hike in June’22.

More Info

At 17:30 Rallis India was quoting at Rs 218.25, down Rs 5.60, or 2.50 percent.

It has touched an intraday high of Rs 226.00 and an intraday low of Rs 216.80.

It was trading with volumes of 21,340 shares, compared to its thirty day average of shares, a decrease of percent.

In the previous trading session, the share closed down 0.11 percent or Rs 0.25 at Rs 223.85.

The share touched its 52-week high Rs 324.85 and 52-week low Rs 182.55 on 19 October, 2021 and 20 June, 2022, respectively.

Currently, it is trading 32.83 percent below its 52-week high and 19.53 percent above its 52-week low.

Market capitalisation stands at Rs 4,244.28 crore.

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Rallis India - 230922 - prabhu