RALLIS India, the agrochemicals firm from the Tata group, reported a 10% profit growth for the quarter ended September ‘09 to Rs 46 crore, while net sales grew 13% to Rs 317 crore. Although the growth appears muted in the company’s most important quarter of the year, the performance is encouraging in view of the challenges it faced: erratic monsoon, reduction in the agricultural acreage, falling prices and low pest incidence. Notably, the entire growth came from higher volumes in the domestic market, as the prices and export sales were below the year-ago period.
The company maintained its operating profit margin at 23.2%, while other income jumped to Rs 1.1 crore from Rs 0.3 crore last year. Interest cost dropped to one of its lowest levels to Rs 0.55 crore thanks to tight working capital management.
The company is investing Rs 150 crore in setting up a new plant in Dahej, scheduled to be commissioned by June ‘10. This plant, with a 5,000 tonne of annual capacity, is expected to generate revenues over Rs 500 crore in its first three years of operations.
The company is also proposing to allot 9.8 lakh equity shares to Tata Chemicals on preferential basis, which will take Tata Chemicals’ shareholding in the company to 50.6%. Rallis is expected to raise Rs 89 crore from the allotment, which will be utilised to pay off Rs 88 crore of non-convertible preferential shares. After the allotment, the company’s paid-up equity will rise to Rs 12.96 crore. The current market price at Rs 973 is 15.6 times the diluted EPS.
The upcoming rabi season is expected to be significantly better compared to the last rabi season, thanks to higher ground water levels and soil moisture. The company appears well poised to benefit from this and is likely to post a stronger growth in the second half.
The company maintained its operating profit margin at 23.2%, while other income jumped to Rs 1.1 crore from Rs 0.3 crore last year. Interest cost dropped to one of its lowest levels to Rs 0.55 crore thanks to tight working capital management.
The company is investing Rs 150 crore in setting up a new plant in Dahej, scheduled to be commissioned by June ‘10. This plant, with a 5,000 tonne of annual capacity, is expected to generate revenues over Rs 500 crore in its first three years of operations.
The company is also proposing to allot 9.8 lakh equity shares to Tata Chemicals on preferential basis, which will take Tata Chemicals’ shareholding in the company to 50.6%. Rallis is expected to raise Rs 89 crore from the allotment, which will be utilised to pay off Rs 88 crore of non-convertible preferential shares. After the allotment, the company’s paid-up equity will rise to Rs 12.96 crore. The current market price at Rs 973 is 15.6 times the diluted EPS.
The upcoming rabi season is expected to be significantly better compared to the last rabi season, thanks to higher ground water levels and soil moisture. The company appears well poised to benefit from this and is likely to post a stronger growth in the second half.
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