Capitaline

Results 19-Oct-21

Analysis

Rallis India

Input cost environment continues to be challenging

Rallis India consolidated net sales increased 0.38% to Rs 727.8 crore in Q2FY22 compared to Q2FY21. Operating profit margin has declined from 16.10% to 12.09%, leading to 24.65% decline in operating profit to Rs 87.98 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 53.72% to 55.74%. Purchase of finished goods cost fell from 7.73% to 5.95%. Employee cost increased from 7.59% to 8.99%. Other expenses rose from 14.66% to 16.54%.

Other income fell 42.61% to Rs 7.49 crore. PBIDT fell 26.45% to Rs 95.47 crore. Provision for interest fell 12.14% to Rs 1.23 crore. PBDT fell 26.61% to Rs 94.24 crore. Provision for depreciation fell 12.65% to Rs 17.74 crore. PBT before EO was down 29% to Rs 76.5 crore. The company reported nil EO items during the quarter compared to EO income of Rs 1.65 crore comprising profit on sale of flats. PBT after EO was down 30%.

Provision for tax was expense of Rs 20.05 crore, compared to Rs 26.8 crore. Effective tax rate was 26.21% compared to 24.42%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 31.90% to Rs 56.49 crore.

Promoters’ stake was 50.09% as of 30 September 2021 compared to 50.09% as of 30 September 2020 .

Performance for six months ended September 2021

Net sales of Rallis India increased 5.81% to Rs 1468.31 crore. Operating profit margin has declined from 17.66% to 14.27%, leading to 14.51% decline in operating profit to Rs 209.50 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 54.29% to 54.47%. Purchase of finished goods cost fell from 5.84% to 5.79%. Employee cost increased from 7.65% to 8.77%. Other expenses rose from 14.10% to 15.87%.

Other income fell 41.61% to Rs 14.48 crore. PBIDT fell 17% to Rs 223.98 crore. Provision for interest fell 35.91% to Rs 2.16 crore. PBDT fell 16.76% to Rs 221.82 crore. Provision for depreciation fell 5.23% to Rs 36.23 crore. PBT before EO was down 19% to Rs 185.59 crore. The company reported nil EO items during H1FY22 compared to EO income of Rs 1.65 crore comprising profit on sale of flats in H1FY21. PBT after EO was down 19%.

Profit before tax down 18.69% to Rs 185.59 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 46.8 crore, compared to Rs 55.08 crore. Effective tax rate was 25.22% compared to 23.96%.Minority interest was nil in both the periods. Net profit attributable to owners of the company decreased 20.59% to Rs 138.83 crore.

Promoters’ stake was 50.09% as of 30 September 2021 ,compared to 50.09% as of 30 September 2020 .

Full year results analysis

Net sales (including other operating income) of Rallis India has increased 7.89% to Rs 2429.44 crore. Operating profit margin has jumped from 11.52% to 13.29%, leading to 24.49% rise in operating profit to Rs 322.89 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 56.11% to 56.34%. Purchase of finished goods cost fell from 6.18% to 5.47%. Employee cost decreased from 8.76% to 8.65%. Other expenses fell from 17.61% to 16.62%.

Other income rose 17.83% to Rs 40.45 crore. PBIDT rose 23.72% to Rs 363.34 crore. Provision for interest fell 14.73% to Rs 5.21 crore. Loan funds declined from Rs 90.29 crore as of 31 March 2020 to Rs 75.61 crore as of 31 March 2021. Inventories rose to Rs 763.20 crore as of 31 March 2021 from Rs 699.20 crore as of 31 March 2020. Sundry debtors were lower at Rs 406.28 crore as of 31 March 2021 compared to Rs 450.59 crore as of 31 March 2020. Cash and bank balance rose to Rs 55.13 crore as of 31 March 2021 from Rs 48.65 crore as of 31 March 2020. Investments declined from Rs 302.47 crore as of 31 March 2020 to Rs 283.48 crore as of 31 March 2021.

PBDT rose 24.53% to Rs 358.13 crore. Provision for depreciation rose 4.16% to Rs 64.07 crore. Fixed assets increased to Rs 599.63 crore as of 31 March 2021 from Rs 472.72 crore as of 31 March 2020. Intangible assets stood at Rs 195.82 crore.

Profit before tax grew 30.07% to Rs 294.06 crore. Share of profit/loss were nil in both the periods. Extraordinary items were decreased to Rs 9.45 crore. Provision for tax was expense of Rs 74.93 crore, compared to Rs 53.8 crore. Effective tax rate was 24.69% compared to 22.65%.

Minority interest was nil in both the periods. Net profit attributable to owners of the company increased 23.66% to Rs 228.58 crore.

Promoters’ stake was 50.09% as of 31 March 2021 compared to 50.09% as of 31 March 2020.

Cash flow from operating activities decreased to Rs 216.78 crore for year ended March 2021 from Rs 336.84 crore for year ended March 2020. Cash flow used in acquiring fixed assets during the year ended March 2021 stood at Rs 168.49 crore, compared to Rs 78.60 crore during the year ended March 2020.

Announcing the results, Mr. Sanjiv Lal, Managing Director and CEO, Rallis India said,

“The erratic monsoon season this year was not favourable to agri input companies in the last quarter. In this backdrop, our domestic crop care business grew by 3%, but the seeds business declined by 65%. The drop in the seeds business was due to the changes in cropping patterns witnessed across the country as well as the proliferation of spurious cotton seeds. The overall good cumulative rainfall witnessed in Kharif also augurs well for the upcoming Rabi agricultural season.

Meanwhile, the Company`s efforts towards dealing with logistic issues helped in exports delivering growth of 22% during the quarter.

The raw material situation continues to be tough and we are focused on minimizing the disruptions to our production as much as possible.

On a longer term basis, our capex plans, new product introduction plans and demand generation investments remain on course as we do believe that normalcy will be restored progressively.

While positioning ourselves so, we are also consistently prioritising the safety and well-being of all our employees and other stakeholders.”

Key developments during the quarter

§ Ankleshwar debottlenecking project for two key A.I’s completed and commissioned

§ Formulation Plant at Dahej, CZ - Phase 1 due for commissioning

§ Multi purpose plant (Dahej) project progressing well

§ Successful launch of 3 new products each in Crop Protection and Crop Nutrition category

§ Input cost environment continues to be challenging

The scrip is currently trading at Rs 303

Rallis India: Consolidated Results
	2109 (03)	2009 (03)	Var (%)	2109 (06)	2009 (06)	Var (%)	2103 (12)	2003 (12)	Var (%)
Net Sales	727.80	725.01	0	1468.31	1387.71	6	2429.44	2251.82	8
OPM (%)	12.1%	16.1%		14.3%	17.7%		13.3%	11.5%
Operating Profits	87.98	116.76	-25	209.50	245.05	-15	322.89	259.36	24
Other Income	7.49	13.05	-43	14.48	24.8	-42	40.45	34.33	18
PBDIT	95.47	129.81	-26	223.98	269.85	-17	363.34	293.69	24
Interest	1.23	1.40	-12	2.16	3.37	-36	5.21	6.11	-15
PBDT	94.24	128.41	-27	221.82	266.48	-17	358.13	287.58	25
Depreciation	17.74	20.31	-13	36.23	38.23	-5	64.07	61.51	4
PBT before EO	76.50	108.10	-29	185.59	228.25	-19	294.06	226.07	30
EO	0.00	1.65		0.00	1.65		-9.45	-11.42	-17
PBT after EO	76.50	109.75	-30	185.59	229.90	-19	303.51	237.49	28
Tax Expense	20.05	26.80	-25	46.80	55.08	-15	74.93	53.80	39
Net profit before MI	56.45	82.95	-32	138.79	174.82	-21	228.58	183.69	24
MI	-0.04	0		0	0		0	-1.16
PAT	56.49	82.95	-32	138.79	174.82	-21	228.58	184.85	24
EPS* (Rs.)	#	#		#	#		11.4	9.0
*Annualised on Equity Share Capital Rs 19.45 crore; Face value Rs 1
EO: Extraordinary items, Var.(%) exceeding 999 is restricted to 999
EPS is calculated after excluding EO and relevant tax
PL: Profit to Loss; LP: Loss to Profit
Figures in Rs crore
Source: Capitaline Database

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