Mehabe score: 2 G Factor: 0 Piotski Score: 9 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 0 and Piotski score of 9.
Description
Rallis India, a Tata Group company Group Co., has a history of over 150 years. The company is into manufacturing of Agrochemicals and is present across the value chain of agriculture inputs – from seeds to organic plant growth nutrients. Rallis is also in the business of contract manufacturing for global corporations. [1] Site:RALLIS Main Symbol:RALLIS
Stock trades at 281.0, above its 50dma 256.68. It also trades above its 200dma 267.7. The stock remains bullish on techicals
The 52 week high is at 362.60 and the 52week low is at 226.80
Price Chart
P/E Chart
Sales and Margin
Strengths
– is almost debt free.
– has been maintaining a healthy dividend payout of 29.12%
Weakness
– The company has delivered a poor sales growth of 9.38% over past five years.
– has a low return on equity of 12.66% for last 3 years.
Competition
– The industry trades at a mean P/E of 26.5x. P I Industries trades at the industry’s max P/E of 53.27x. RALLIS trades at a P/E of 33.4x
– Industry’s mean G-Factor is 3.1 while the mean Piotski score is 8.0. RALLIS has a G-Factor of 0 and Piotski scoreof 9.
– Average 1 month return for industry is 9.4%. The max 1- month return was given by Sharda Cropchem: a return of 26.67 %
Quarterly Results
Sales for period ended Mar 2022 is Rs 508.0 cr compared to Rs 471.0 cr for period ended Mar 2021, a rise of 7.9% .
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Company reported negative operating profit of Rs -3.0 cr for period ended Mar 2022. For same period last year, operating profit was 18.0.
The EPS for quarter ended Mar 2022 is Rs -0.73 compared to Rs 2.03 for previous quarter ended Dec 2021 and Rs 0.42 for Mar 2021.
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 2604.0 cr for period ended Mar 2022 vis-vis sales of Rs 2429.0 cr for the period ended Mar 2021, a growth of 6.7%. The 3 year sales cagr stood at 9.5%.
Operating margins shrank to 11.0% for period ended Mar 2022 vis-vis 13.0% for period ended Mar 2021, contraction of 200.0 bps.
Net Profit reported at Rs 164.0 cr for period ended Mar 2022 vis-vis sales of Rs 229.0 cr for the period ended Mar 2021, falling 39.6%.
Company recorded a Net Profit CAGR of 1.9% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 4% on a 1 Year basis vis-vis a return of 22% over the last 3 Years. – The compounded sales growth on a TTM bassis is 7% vis-vis a compounded sales growth of 9% over the last 3 Years. – The compounded profit growth on a TTM basis is -23% vis-vis a compounded profit growth of 2% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Mar 2022 fii holding stood at 6.08% vis-vis 6.03% for Dec 2021 – Public shareholding has remained largely constant. The Mar 2022 public holding stood at 27.35% vis-vis 27.06% for Dec 2021
Conclusion
– is almost debt free.
– has been maintaining a healthy dividend payout of 29.12% – The company has delivered a poor sales growth of 9.38% over past five years.
– has a low return on equity of 12.66% for last 3 years.
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 256.68 and is trading at 281.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
