Rallis India - Downgrade earnings, maintain BUY :Emkay,

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Rallis India

Downgrade earnings, maintain BUY

BUY

CMP: Rs 162                                       Target Price: Rs 197

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n     Q2FY12 PAT at Rs 585mn (flat yoy) were below est due  to operating losses at Metahelix and lower standalone margins

n     Cons revenues grew by 19% yoy to Rs 4.39 bn with EBITDA margins of 22.2% vs 24% previous year. Lower pest occurrence and delayed sowing affected revenue growth

n     Thrust on revenue growth and aggressive products launch to put pressure on working capital resulting in higher interest

n     Downgrade EPS estimates to Rs 8/10.9 (previous Rs 8.9/11.6) for FY12/13. Maintain BUY with revised target price of Rs 197 (previous Rs 209)