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- 26 Apr 2023
- ICICIdirect Research
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RALLIS REPORTS RESULTS BELOW I-DIRECT PROJECTIONS ACROSS THE BOARD
RALLIS - 350 Change: 6.25 (1.82 %)News: Rallis reported a flat topline YoY to Rs 522.6 crore against our expectations of Rs 541.1 crore. Crop care segment grew 3% YoY to Rs 497 crore while seeds segment de-grew 4% YoY to Rs 25 crore. Geography wise, domestic business contributed 63% of FY23 revenue, which was up by ~10% YoY to Rs 1,869 crore while international business contributed 37% of FY23 revenue, which was up by ~20% YoY to Rs 1,097.8 crore. Gross margins for the company were down 803 bps to 26.7% YoY due to high-cost volatility on raw material front. EBITDA margins for the quarter were down to -12.5%. Absolute EBITDA came at -Rs 65.3 crore against our estimates of Rs 44.6 crore. Rallis India reported adjusted PAT at Rs -69.1 crore against our estimates of Rs 15 crore (down by 390% YoY). PAT was a reflection of EBITDA, which had been further harmed by higher depreciation, higher financing costs, and a compression of other income
View: Volatility in raw material prices, lower demand in domestic market and lack of power to pass on the effect has impacted the company in current quarter. High advertising expenses for the approaching kharif season for the seed company have also caused the EBITDA to drop to negative numbers. With the kharif season approaching and the introduction of new items, we do anticipate the firm will increase revenue in the coming quarters but the long-term stability of EBITDA margins is still a worry
Impact: Negative