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Rallis 2Q revenues grew 19%yoy to Rs4.36b and EBITDA grew 14%yoy to Rs1b, but higher
interest and depreciation charge (on Dahej start up) impacted net income with PAT up only
5%yoy to Rs619m. Debtors have jumped 80%yoy, which is surprising, and will likely be clarified
in analysts meet.
2Q operating performance good, but bottomline not so good
2Q revenue grew by 19%yoy to Rs4365m on standalone basis, implying strong revenue
growth in market and in company portfolio. Subsidiary Metahelix had little revenues this
quarter due to seasonal factors, and thus consolidated rev was also up 19%yoy
Standalone gross margin declined from 43% to 40%, possibly due to impact of rupee
depreciation on input costs. EBITDA margins declined 90bps to 23.1%, mitigated by lower
rise in other expenses.
Net interest costs are up from Rs(12)m in 2QFY11 to Rs26m in 2QFY12 due to higher
working capital debt and Dahej commissioning.
Depreciation up 75%yoy again due to full quarter impact of Dahej plant operations.
Metahelix had little revenue but all costs due to off season in seeds. So, consolidated net
income flat at Rs585m while standalone net income up 5%yoy to Rs619m.
Surprisingly debtors up 85%yoy
Consolidated debtors have jumped from Rs1.08b in 2QFY11 and Rs1.06b in FY11end to
Rs1.98b in 2QFY12. Rallis typically has been very tight on this metric and hence, it is a
negative unless there is some one off reason for the jump. We will clarify this in analyst meet
on Thursday.
Higher debtors has also increased debt levels by 50% vs FY11 end.
Key factors to watch
Dahej ramp up. How long will it take to cover up for fixed cost increase
Any change in company policy on debtors, working capital
We retain Buy and PT of Rs210.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Rallis 2Q revenues grew 19%yoy to Rs4.36b and EBITDA grew 14%yoy to Rs1b, but higher
interest and depreciation charge (on Dahej start up) impacted net income with PAT up only
5%yoy to Rs619m. Debtors have jumped 80%yoy, which is surprising, and will likely be clarified
in analysts meet.
2Q operating performance good, but bottomline not so good
2Q revenue grew by 19%yoy to Rs4365m on standalone basis, implying strong revenue
growth in market and in company portfolio. Subsidiary Metahelix had little revenues this
quarter due to seasonal factors, and thus consolidated rev was also up 19%yoy
Standalone gross margin declined from 43% to 40%, possibly due to impact of rupee
depreciation on input costs. EBITDA margins declined 90bps to 23.1%, mitigated by lower
rise in other expenses.
Net interest costs are up from Rs(12)m in 2QFY11 to Rs26m in 2QFY12 due to higher
working capital debt and Dahej commissioning.
Depreciation up 75%yoy again due to full quarter impact of Dahej plant operations.
Metahelix had little revenue but all costs due to off season in seeds. So, consolidated net
income flat at Rs585m while standalone net income up 5%yoy to Rs619m.
Surprisingly debtors up 85%yoy
Consolidated debtors have jumped from Rs1.08b in 2QFY11 and Rs1.06b in FY11end to
Rs1.98b in 2QFY12. Rallis typically has been very tight on this metric and hence, it is a
negative unless there is some one off reason for the jump. We will clarify this in analyst meet
on Thursday.
Higher debtors has also increased debt levels by 50% vs FY11 end.
Key factors to watch
Dahej ramp up. How long will it take to cover up for fixed cost increase
Any change in company policy on debtors, working capital
We retain Buy and PT of Rs210.
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