Rallis India Ltd - September Quarter Results (Q2 FY17)

Rallis India Ltd posted consolidated Net Profit of Rs. 665 million for the quarter ended September 30, 2016 as compared to Rs. 508 million for the quarter ended September 30, 2015, 31% up YOY. Net Profit has declined 62% QOQ as Net Profit stood at Rs. 1742 million in Q1 FY17 which included exceptional item of Rs.1584 million on account of profit on assignment of leasehold rights to a plot of land in the MIDC area. Profit before exceptional item & taxation in the current September quarter stood at Rs. 958 mn compared to 624 mn in Q1 FY16, rise of 53% QOQ. Other income too has increased 26% YOY at Rs.37.60 million in the current Q2 FY17. Earnings before depreciation, interest and taxation galloped 18% YOY from Rs. 912 million to Rs. 1080 million in the current September quarter. Expenditure was reported at Rs. 5034 million in Q2 FY17 against Rs.  4169 million same period previous year. Finance costs were curtailed to Rs. 11 million compared to Rs. 29 million corresponding quarter previous year. Total Income has increased from Rs. 4924 million for the quarter ended September 30, 2015 to Rs. 5966 million for the quarter ended September 30, 2016, growth of 21% YOY.

Net Profit Margin for the Bank is seen at 8.15% X FY 17E and 8.10% x FY18E respectively. EPS is seen at 7.79 x FY17E and 8.08 x FY18E respectively. The PE ratio for the bank is 27.45 x FY17E and 26.50 x FY18E respectively at CMP of Rs. 214. The P/BV ratio for the bank is at 3.96 x FY17E and 3.45 x FY18E respective. We recommend BUY for the stock at a target price of Rs. 280 for medium and long term.