NSE: RALLIS | BSE: 500355 | ISIN: INE613A01020

INDUSTRY : Agrochemicals

Rallis India Ltd.

Expensive Star

244.80 6.55(2.75%)

New 52W High today

Volume: 2.4M High volume today

NSEFeb 20, 2020 15:31

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Rallis India Ltd.    
20 Feb 2020, 05:40PM
244.80
2.75%
Rallis India Ltd.    
07 Feb 2020
244.80
2.75%
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Rallis India Ltd.    
05 Feb 2020
244.80
2.75%
Rallis India Ltd.    
01 Feb 2020
244.80
2.75%
RALLIS INDIA LTD. - 500355 - Announcement under Regulation 30 (LODR)-Scheme of Arrangement
BSE India
We wish to inform you that the Certified Copy of the Order passed by the NCLT has been received by the Company on 10th January, 2020 and the same has been filed by the Company with the Registrar of Companies, Maharashtra, Mumbai, electronically in e-Form INC-28 today i.e. on 1st February, 2020. Metahelix Life Sciences Limited has also filed e-Form INC-28 with the Registrar of Companies, Karnataka on 10th December, 2019. Thus, the Scheme has become effective on 1st February, 2020, being last of the dates on which the Certified Copy of the Order passed by the NCLT has been filed with the Registrar of Companies, Maharashtra, Mumbai and accordingly, Metahelix Life Sciences Limited has merged with the Company effective the said date. The Appointed Date of the Scheme is 1st April, 2019.
Rallis India Ltd.    
29 Jan 2020
244.80
2.75%
Rallis India Ltd.    
29 Jan 2020
244.80
2.75%
Business Standard
Analysts remain positive due to growth capex in exports, revitalizing domestic distribution, new product launches, and backward integration in Metribuzin.
Rallis India Ltd. has gained 34.76% in the last 3 Months
Rallis India Ltd.    
24 Jan 2020
244.80
2.75%
Rallis India Ltd.    
24 Jan 2020
244.80
2.75%
A rally for Rallis India after December results

by Suhani Adilabadkar

For Rallis India, the December quarter was a strong one, with the stock climbing 15% and hitting a fresh 52-week high after the Q3FY20 result announcement.

Rallis India is a subsidiary of Tata Chemicals and part of the $110 bn Tata Group. The company has a legacy of 168 years with its product portfolio running across the entire agriculture value chain –from plant protection chemicals to hybrid seeds, plant growth nutrients and soil conditioners.

Manufacturing facilities are located at Ankleshwar and Dahej in Gujarat and Lote and Akola in Maharashtra, supported by the Rallis Innovation Chemistry Hub (RICH) in Bengaluru. The company’s supply chain comprises of  28 depots, 1 hub warehouse, 12 regional offices, 3,667 dealers and 40,432 retailers. After a muted FY19, Rallis India has been performing well over the past three quarters with its stock gaining 60% since June last year. 

Quick Takes:

  • Revenue came out strongly at Rs. 533.6 crore against Rs. 417 crore same period previous year rising 28% YoY. 

  • Operating profit doubled YoY from Rs. 27.6 crore in Q3FY19 to Rs. 55 crore in December quarter FY20.

  • Capex plan of about Rs. 800 crore for the next 4-5 years has already been outlined by Rallis India.

  • Rallis stock has gained 20% since its December quarterly result announcement.

Green shoots in the December quarter FY20

Rallis India reported impressive growth for the December quarter, driven by both domestic and international business. Revenue came out strongly at Rs. 533.6 crore against Rs. 417 crore in the same period last year, rising 28% YoY aided by extended kharif season and its spillover effect on better than last year rabi season.

Operating profit doubled YoY from Rs. 27.6 crore in Q3FY19 to Rs. 55.7 crore in December quarter FY20. Operating margins jumped 383 bps YoY reported at 10.45% in Q3FY20 compared to 6.62% corresponding quarter, previous year. PAT for December quarter galloped at 176% or jumped 2.7 times reported at Rs. 38 crore against Rs. 13.8 crore in Q3FY19. In Q3FY20, domestic business grew 35% whereas international sales jumped 25% YoY. Rallis stock has gained 20% since its December quarterly result announcement. 

An Invigorated Agrochemical Sector

Farming in India is a fraught exercise. 50% of arable land is dependent on unpredictable monsoon rain, and a recent uptrend in droughts has affected farmer incomes. Agriculture inputs, fertilizers, pesticides, insecticides, seeds, bio stimulants and micro-nutrients play an important role. India is the second largest consumer of fertilizers globally with a seed market of about $2.5 bn, biostimulants market of  around $75 mn, micro-nutrients $20 bn while the pesticides segment is expected to grow at a CAGR of 9% in the next five years. 

These agri-inputs constitute 86% of Rallis India’s revenue platform followed by contract manufacturing at around 12%. The revenue stream is two courses geographically - domestic and international. Domestic business focused on agri inputs namely seeds (paddy, millet, maize, BT cotton, mustard, vegetables), crop protection (herbicides, fungicides, insecticides, seed treatment chemicals, household pesticides), plant growth nutrients and organic compost.

Rallis India’s product basket is more skewed towards kharif crops and efforts are being made by management to move it towards rabi and also strengthen its vegetable product portfolio. In the international business, there are twin engines, the first one being the alliance business which develops molecules for global agro chemicals, polymers and animal care players boasting five major products, Pendimethalin (herbicide), Acephate (insecticide), Hexaconazole (fungicide), Metribuzin (herbicide) and Metalaxyl (fungicide). The other engine, contract manufacturing has only two products, Poly Ether Ketone (high-performance, engineering thermoplastic used in aerospace, automotive, structural, high temperature electrical) and Metconazole (fungicide). 

Agrochemical sector is back on the investor radar, as the sector is expected to perform well in the December quarter aided by strong monsoons, higher reservoir levels leading to higher rabi sowing and strong profitability for Indian agrochemical companies. On similar lines, Mr. Sanjiv Lal, the MD and CEO of Rallis India said that positive December results were on the back of positive sentiment among farmers and better water availability. Speaking on Rallis performance in Q3FY20, he further added, “During the current crop season our business was supported by positive farmer sentiment, new product launches and refreshed trade policies. 

Our international business continued to perform positively amidst certain headwinds. I am pleased to announce that the Board of Rallis has approved setting up of a new ‘state of the art’ R&D facility in Bengaluru to drive further growth”.  

Back On the Investor Radar

Rallis had reported PAT decline of 45% a year ago in Q3FY19, due to higher input cost and raw material uncertainty. Q4FY19 was even worse with net profit plummeting by 93% and revenue falling 8% YoY. FY18-19 on the whole was impacted by shutting down of upstream raw material suppliers in China due to environmental regulations, leading to raw material scarcity and price hikes, as well as erratic and uneven distribution of rainfall leading to shifting in crop and pest load. With the beginning of Q1FY20, momentum improved and further consolidated in the September quarter FY20.

With the December quarter, the domestic engine seems to have reignited with 35% YoY growth which had been either flat, muted or remained in negative territory for the past few quarters. Revival of the domestic growth engine is one of the major reasons for the recent upward trajectory of Rallis stock price. 

The substantial improvement in margins has been another performance indicator in Q3FY20 as the overhang of high cost inventory accumulated during FY19 seems to be reducing along with lower input costs.

In addition, Rallis is undertaking backward integration for Metribuzin, reducing its dependence on imported raw material from China which will improve EBDITA/kg in the long run. Capex plan of about Rs. 800 crore for the next 4-5 years has already been outlined which includes formulation capacity at Dahej chemical zone expected to be operational by next Kharif season, new active ingredients, backward integration to reduce raw material import dependence and capacity expansion of Metribuzin by 500 ton per annum (1st phase) has already been completed and 2nd phase is underway to be operational by February 2020.

The 2nd phase of 500 ton per annum capacity expansion would raise the total capacity to 2,000 tons per annum which will be about 15% of the global Metribuzin market doubling its revenues at full capacity utilization by FY21. 

Apart from growth impetus through capex, Rallis is also adding new products at high speed, six products in the past three quarters which have altogether garnered Rs. 50 crore in the nine-month period ending  December 31, 2019. In the December quarter, Rallis introduced two new formulations, Sarthak (registration) and Impeder (co-marketing). In addition to that, there is an ambitious target to submit 60 dossiers during the year, of which 75% would be for Africa and South East helping to de-risk its international portfolio largely skewed towards North America and Brazil. 

Rallis India is moving well on its growth agenda and aspires to be amongst the top 3 leading enterprises by 2025 in the chosen areas within farm inputs and chemistry led businesses.  

Rallis India Ltd. is trading above it's 200 day SMA of 172.0
Rallis India Ltd.    
23 Jan 2020
244.80
2.75%
Accumulate Rallis India; target of Rs 248: Prabhudas Lilladher
Accumulate Rallis India; target of Rs 248: Prabhudas Lilladher
Moneycontrol
Prabhudas Lilladher recommended accumulate rating on Rallis India with a target price of Rs 248 in its research report dated January 19, 2019.
Rallis India Ltd. has gained 60.26% in the last 1 Year
Rallis India Ltd.    
22 Jan 2020
244.80
2.75%
Rallis India's strategy rejig pays off, all eyes now on kharif 2020
Rallis India's strategy rejig pays off, all eyes now on kharif 2020
livemint
New management stepped up dealer additions, product launches and realigned the credit policy with the industry.Going ahead, the March quarter outlook is decentnew products and a better rabi season should help maintain its revenue momentum
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Rallis India Ltd. has an average target of 260.00 from 2 brokers.
  • Month Change by 28.43% (Crossed threshold 20%) on 03 February, 2020
  • Hem Securities released a Buy report for Rallis India Ltd. with a price target of 270.0 on 21 Jan, 2020.
  • Week Change by 20.77% (Crossed threshold 20%) on 20 January, 2020
  • Day volume (6694017.0) was 1224% of the Month Average Volume (546884.0) on 17 January, 2020
  • Week Change by 18.43% (Crossed threshold 15%) on 17 January, 2020
More triggered alerts
Ex-Date Dividend Amount Dividend Type Record Date
June 19, 20192.50FINAL-
June 19, 20182.50FINAL-
June 9, 20171.25SPECIAL-
June 9, 20172.50FINAL-
June 10, 20162.50FINAL-
All dividends by RALLIS
Ex-Date Dividend Bonus Ratio Record Date
June 8, 20101:2June 9, 2010
All bonuses by RALLIS
Ex-Date Dividend Old FVNew FV Record Date
July 15, 2011101July 18, 2011
All splits by RALLIS