The shares of this smallcap company fell around 6% in Friday’s trading session after reporting a decline in net profits by 24 percent in Q1FY25.
Price Movemnet:
With a market capitalization of Rs. 6,222 crores, the shares of Rallis India Ltd started Friday’s trading session on a lower note at Rs. 323 compared to its previous close of Rs. 340.50. During the trading session, the shares hit a low of Rs. 317.10, losing around 6 percent and are currently trading at Rs. 320 apiece.
What Happened:
Such a bearish movement in the share price was observed after the company declared its Q1FY25 results. Quarterly, the revenue zoomed by 80 percent from Rs. 436 crores during the March quarter to Rs. 783 crores in the June quarter. In addition, the net profits showcased a transition from a net loss of Rs. 21 crores to a net profit of Rs. 48 crores during the same period.
Comparing the same metrics on a YoY basis, the revenue increased marginally by 0.12 percent from Rs. 782 crores during Q1FY24 to Rs. 783 crores in Q1FY25. On the other hand, the net profits decreased by around 24 percent from Rs. 63 crores to Rs. 48 crores during the same timeframe.
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Management Commentary:
Announcing the results, Dr Gyanendra Shukla, Managing Director & CEO, of Rallis India Limited, said, that the agrochemical Industry continues to face growth challenges due to muted prices arising from oversupplies. Domestic demand is looking positive with monsoon arrival and pickup.
Crop Care delivered strong volume-led revenue growth of 8%. Seeds revenue was down by 16% vs PY largely due to supply constraints. Despite market challenges, concerted actions were taken to drive margins through better product mix and dynamic pricing.
Further, he added, We remain cautious about the export market and expect a gradual recovery during the year. Sentiments for the domestic market are positive with the recent monsoon pick-up.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 9.67 percent and a return on capital employed (RoCE) of 12.75 percent for the period spanning FY23-24. Additionally, during the same period, the net profit margin stood at 6.30 percent.
Shareholding Pattern:
According to the latest shareholding pattern, Promoters possess 55.08 percent of the shares, with Foreign Institutional Investors (FIIs) holding 9.20 percent and Domestic Institutional Investors (DIIs) holding 12.77 percent. Retail Investors account for the remaining 22.54 percent.
Company Profile:
Rallis India, a subsidiary of Tata Chemicals, is a leading agri-sciences company in India, specializing in crop protection and crop nutrition solutions.
The company provides a diverse range of agrochemical products, including pesticides and fertilizers, to enhance agricultural productivity and sustainability, benefiting over five million farmers across the country.
Written By Vaibhav Patil
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