Strong Performance in International Segment: Rallis India

Rallis India
India Equity Research | Agri Input & Chemicals

April 24, 2021
Result Update Emkay
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Refer to important disclosures at the end of this report

CMP Target Price
Strong performance in international Rs 275

as of (April 23, 2021)
Rs 330 (▲)
12 months
segment Rating
BUY (■)
Upside
20.0 %
 RALI’s Q4FY21 revenue beat our estimates by 14%, led by strong 75% yoy growth Change in Estimates
(comparable growth of ~24% yoy adj. for Covid-19 impact in Q4FY20) in the international EPS Chg FY22E/FY23E (%) 4/ 2
segment. However, change in the product mix in favor of legacy products, pricing pressure Target Price change (%) 1.5
in Metribuzin and higher-than-expected SG&A led to EBITDA/PAT miss by 49%/66%. Target Period (Months) 12
 Volume increased for all products in the international business. Metribuzin demand Previous Reco BUY
continued to improve throughout Q4 with improvement in volume as well as prices on a Emkay vs Consensus
QoQ basis. Management expects this improvement to continue in Q1FY22 as well. EPS Estimates
 Management remains focused on revenue growth, driven by 1) plugging portfolio gaps, 2) FY22E FY23E
expansion of distribution in the domestic segment, and 3) new AI introduction and Emkay 13.1 14.4
increasing own registrations in the international business.
Consensus 13.7 16.1
 We remain constructive on RALI, given 1) strong revenue growth, 2) favorable comparable Mean Consensus TP (12M) Rs 336
going into FY22, and 3) strong balance sheet. Over the last two years, RALI has improved Stock Details
its product portfolio in the domestic business, expanded in the international business and
Bloomberg Code RALI IN
increased own registration in the international markets, which should aid revenue growth
Face Value (Rs) 1
over FY22-23E. Maintain Buy with a revised TP of Rs330, based on 23x Mar’23E EPS.
Shares outstanding (mn) 194
Volume growth across products in international business: The international business revenue 52 Week H/L 340 / 195
increased 75% yoy to Rs2.3bn, led by volume growth across all products. Adjusting for the revenue M Cap (Rs bn/USD bn) 53 / 0.71
miss due to Covid-19 in Q4FY20, revenues increased 24% yoy. Avg. Metribuzin prices were down
Daily Avg Volume (nos.) 622,006
40% in FY21, which resulted in just 2.9% growth in the segment in FY21.
Daily Avg Turnover (US$ mn) 2.2
Steady growth in domestic business: Domestic revenue increased 15% yoy (volume: +25%;
Price:-10%) in the formulation segment, led by strong performance from legacy brands. RALI
Shareholding Pattern Mar '21
launched a new insecticide & fungicide 9(3) product ‘Eevee’ in Q4FY21, taking the total new
launches in FY21 to four. Management maintained its guidance of launching two new products Promoters 50.1%
every year in the domestic business from its own R&D. FIIs 7.6%
Increased share of legacy products impact margins: Delay in ramp-up of newly launched DIIs 15.9%
products due to Covid-19-related restrictions led to increased share of legacy low-margin products. Public and Others 26.4%
This led to a 211bps yoy decline in the gross margin. Adjusting for one-offs in Q4FY20, EBITDA
margin increased 330bps yoy to 3.8%. Price Performance
Aims to expand retail network by 35% in FY22: RALI aims to add 300 distributors (current: 3,700) (%) 1M 3M 6M 12M
and 17,000 retailers (current: 48,000) to improve its reach in the domestic business. We believe
Absolute 4 (4) 5 34
that a 35% increase in the retail network in FY22 might be a difficult ask amid Covid-19 restrictions.
We have not factored in any meaningful upside from network expansion as most of the retail Rel. to Nifty 5 (4) (14) (14)
expansion is under existing distributors, and hence we would wait to access the net benefit from Relative price chart
the network expansion. 350 40
Rs %
13% EPS CAGR over FY21-24E; Maintain Buy: We increase our FY22/23E EPS by 4%/2%, 310 26
factoring in strong growth in the international segment and introduce FY24 estimates. We maintain
Buy with a revised TP of Rs330 (Rs 325 earlier), based on 23x Mar-23E EPS. Key risks: 1) pricing 270 12
pressure in international business; 2) raw material price inflation; and 3) adverse agronomical 230 -2
conditions.
190 -16
Please see our sector model portfolio (Emkay Alpha Portfolio): Agri Input & Chemicals (Page 10)
150 -30
Apr-20 Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21
Financial Snapshot (Consolidated)
Rallis India (LHS) Rel to Nifty (RHS)
(Rs mn) FY20 FY21 FY22E FY23E FY24E
Source: Bloomberg
Net Sales 22,518 24,294 27,832 31,118 34,249
This report is solely produced by Emkay Global. The
EBITDA 2,594 3,229 3,898 4,419 4,863 following person(s) are responsible for the
production of the recommendation:
EBITDA Margin (%) 11.5 13.3 14.0 14.2 14.2
APAT 1,734 2,191 2,541 2,796 3,034 Varshit Shah
EPS (Rs) 8.9 11.3 13.1 14.4 15.6 varshit.shah@emkayglobal.com
+91 22 6612 1358
EPS (% chg) 11.6 26.4 16.0 10.0 8.5
ROE (%) 12.9 14.6 15.1 14.8 14.3 Karan Shah
P/E (x) 30.8 24.4 21.0 19.1 17.6 karan.shah@emkayglobal.com
EV/EBITDA (x) 20.7 16.5 13.7 12.0 10.7 +91 22 661 21257
P/BV (x) 3.8 3.4 3.0 2.7 2.4
Source: Company, Emkay Research
Emkay Research is also available on www.emkayglobal.com and Bloomberg EMKAY<GO>. Please refer to the last page of the report on Restrictions on Distribution. In Singapore, this research report or research analyses may only be distributed to Institutional Investors, Expert Investors or Accredited
Investors as defined in the Securities and Futures Act, Chapter 289 of Singapore.
Rallis India (RALI IN) India Equity Research | Result Update
Story in Charts
Exhibit 1: Q4FY21 revenue increased by 36% yoy to Rs4.7bn Exhibit 2: EBITDA margin improved yoy to 3.8%
8.0 40 20.8
7.0 30 18.9 19.4
6.0 16.1
5.0 20 15.7
14.5 15.215.8
4.0 10
3.0 - 9.7 9.1 10.4 10.5
2.0
1.0 4.4 5.9 3.9 3.7 5.7 6.5 4.2 3.4 6.2 7.5 5.3 3.5 6.6 7.3 5.7 4.7 -10 6.6
- -20 3.8
2.0
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q2FY20
Q3FY20
Q4FY20
Q1FY21
Q2FY21
Q3FY21
Q4FY21
-2.8
Q2FY20
Q1FY18
Q2FY18
Q3FY18
Q4FY18
Q1FY19
Q2FY19
Q3FY19
Q4FY19
Q1FY20
Q3FY20
Q4FY20
Q1FY21
Q2FY21
Q3FY21
Q4FY21
Revenue (Rsb) yoy growth (%) RHS
Source: Company, Emkay Research Source: Company, Emkay Research
Exhibit 3: Robust ~75% yoy revenue growth in export business Exhibit 4: Crop care segment margins expand yoy to 7.6% in Q4FY21
8.0 21%
0.6 0.7 18%
6.0 15%
2.2 2.7 1.5 0.4 12%
2.6 0.3 4.0
2.1 0.3 9%
2.3 6%
0.2 1.4 2.3 2.0
1.4 1.3 3%
4.5 4.9 3.6 6.9 5.0 3.2 4.0 6.5 5.3 4.5
2.7 3.2 0.0 0%
2.2 1.9 2.5 2.1
Q4FY20
Q1FY21
Q1FY20
Q2FY20
Q3FY20
Q2FY21
Q3FY21
Q4FY21
Q1FY20Q2FY20Q3FY20Q4FY20Q1FY21Q2FY21Q3FY21Q4FY21
Domestic revenue (Rs bn) International Seeds Revenue (Rs bn) EBITDA margin (%)
Exhibit 5: 12% revenue CAGR over FY21-24E Exhibit 6: 90bps expansion in EBITDA margin over FY21-24E
34.2 15.8
31.1 14.8
27.8 13.3 14.0 14.2
24.3 12.1 14.2
22.5 11.5
19.8
16.6 17.9
FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
Revenue (Rs bn)

FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
Exhibit 7: ROE to remain flat stable FY21-24E Exhibit 8: Cash conversion cycle (days)
14.6 14.6 15.1 108
13.8
12.5 12.9 14.8 14.3 91 86 90 90 90
83
FY17 FY18 FY19 FY20E FY21 FY22E FY23E FY24E FY18 FY19 FY20 FY21 FY22E FY23E FY24E
ROE (%) Cash conversion cycle (Days)
April 24, 2021 | 2

Exhibit 9: Actual vs. Estimates (Q3FY21)

Emkay Consensus % variation Comments
(Rs mn) Actual
Estimate Estimate Emkay Consensus
Sales 4,713 4,119 4,065 14% 16% Export revenue growth led to beat in revenues
EBITDA 177 346 214 -49% -17% Higher SG&A and product mix led to miss in EBITDA
EBITDA Margin 3.8% 8.4% 5.3% -464 bps -150 bps
PAT 81 239 110 -66% -26% PAT missed estimates due to EBITDA miss and higher tax rate
Source: Company, Bloomberg, Emkay Research
Exhibit 10: Quarterly result summary

Rs Mn Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21 YoY% QoQ% FY21 FY20 YoY%
Sales 3,463 6,627 7,250 5,705 4,713 36.1 (17.4) 24,294 22,518 7.9
Cost of Raw Material 1,956 3,996 4,488 3,507 2,761 41.2 (21.3) 14,752 13,945 5.8
as % of sales 56.48 60.29 61.91 61.48 58.59 60.72 61.93
Employee expenses 503 492 543 538 587 16.7 9.0 2,160 2,001 7.9
as % of sales 14.52 7.42 7.50 9.44 12.45 8.89 8.89
S&D Expenses 1,102 857 1,051 1,058 1,188 7.7 12.2 4,153 3,979 4.4
as % of sales 31.83 12.93 14.49 18.55 25.20 17.10 17.67
Total Expenditure 3,561 5,344 6,082 5,104 4,535 27.4 (11.1) 21,065 19,925 5.7
EBITDA (98) 1,283 1,168 601 177 nm (70.5) 3,229 2,594 24.5
Depreciation 127 179 203 110 148 16.7 34.1 641 615 4.2
EBIT (225) 1,104 965 491 29 nm (94.1) 2,588 1,979 30.8
Other Income 95 118 131 76 80 (15.7) 4.8 405 343 17.8
Interest cost 11 20 14 8 11 (3.7) 32.9 52 61 (14.7)
PBT (141) 1,202 1,081 559 99 nm (82.3) 2,941 2,261 30.1
Total Tax (33) 283 268 164 34 nm (79.0) 749 538 39.3
PAT before Minority Interest (107) 919 813 395 64 nm (83.7) 2,191 1,723 27.2
P&L from associate/JV 0 0 0 0 0 - -
PAT before extra (108) 918 813 395 64 nm (83.7) 2,191 1,734 27.2
Exceptional loss/ (gain) (114) - (17) (61) (17) (95) (114)
Reported PAT 7 918 830 456 81 nm (82.2) 2,286 1,848 23.6
Margins (%) bps bps bps

EBIDTA -2.8 19.4 16.1 10.5 3.8 nm (678) 13.3 11.5 177
EBIT -6.5 16.7 13.3 8.6 0.6 nm (798) 10.7 8.8 187
PBT -4.1 18.1 14.9 9.8 2.1 nm (771) 12.1 10.0 207
PAT -3.1 13.9 11.2 6.9 1.4 nm (556) 9.0 7.7 137
Effective Tax rate 23.7 23.5 24.8 29.3 34.8 1,110 548 25.5 23.8 168
Exhibit 11: Changes in estimates

FY22E FY23E FY24E
Rs mn
Old New % change Old New % change New
Revenues 26,087 27,832 7% 29,487 31,118 6% 34,249
EBITDA 3,727 3,898 5% 4,242 4,419 4% 4,863
EBITDA margins, % 14.3% 14.0% -28 bps 14.4% 14.2% -19 bps 14.2%
Net profits 2,442 2,541 4% 2,740 2,796 2% 3,034
EPS (Rs) 12.6 13.1 4% 14.1 14.4 2% 15.6
Source: Emkay Research
April 24, 2021 | 3

Conference call highlights

Domestic crop care
 Management continues to focus on growth through new product launches and increase in
the distribution reach.
 RALI plans to add ~300 new distributors in FY22, taking the total count to ~4,000.
 The share of legacy products in the domestic business increased as Covid-19 restricted
physical marketing of new launches. Management expects the challenge to continue in
Q1FY21 due to the second wave.
 The domestic formulation business witnessed 15% yoy (Volume: +25%, price -10%) growth
in Q4FY21 to Rs1.7bn. For FY21, overall growth was 14% (Volume: +15%, price -1%).
 Crop Nutrition: Net revenue increased 21% yoy to Rs230mn vs Rs190mn in Q4FY20,
driven by volume growth. For FY21, revenue increased 22% to Rs1,200mn vs. Rs980mn
in FY20.
International crop care

 Overall revenue growth in the segment was driven by volume growth across all products.
For FY21, revenue increased 3% yoy despite strong volume growth due to pricing pressure
in Metribuzin (Avg. realization declined 40% yoy in FY21). However, management
highlighted that Metribuzin prices have started to improve since Q3FY21.
 Management guided that Pendimethalin prices remained elevated in Q4FY21, though they
have cooled down in Q1FY22 marginally.
 Hexaconazole and Pendimethalin capacity expansion led to an improved product mix in
the international segment.
 RALI received registration for Metribuzin technical in North America and Metribuzin
Formulation in Brazil.
 Hexaconazole capacity had reduced globally, which led to improved realizations for the
molecule in FY21.
 Metribuzin prices have started to improve gradually after bottoming out in Q3FY21.
Seeds
 Overall revenue in Q4FY21 increased 7% yoy. However, spring-maize volumes declined.
 Higher price realizations in maize, paddy and bajra led to lower EBITDA loss of Rs160mn
vs. a loss of Rs190mn in Q4FY20.
 Management continues to work on plugging portfolio gaps, especially for the Rabi season.
 RALI has a strong R&D pipeline with cotton, maize and vegetable seeds, which should
deliver revenue growth in the next 2-3 years.
Contract Manufacturing
 Management is testing and taking steps on reviving the contract manufacturing business
to make it a key growth driver in coming years.
New products
 ITI stood at 12% for FY21 (vs. 16% in FY20), impacted due to slow ramp-up in new
launches due to Covid-19, leading to lower physical interactions with the farmers and
dealers.
 RALI launched a new 9(3) product Eevee used as an insecticide & fungicide combination
in vegetables during the quarter. This is a premium products for paddy and vegetable crops
with a market size of Rs7-8bn (addressable market: Rs1.5-3bn for this product). Key
addressable markets are premium geographies like UP, Punjab, Haryana for Paddy and
Maharashtra for Tomato.
 RALI plans to add a new AI for the export business in FY22, taking the total count to five
products for the export segment. This new AI will be from the new MPP plant and shall
commence in FY22.
 RALI received two new registrations in Uganda.
April 24, 2021 | 4

 RALI plans to launch 2 new 9(3) products in the domestic market in every year through own
R&D. RALI plans to plug gaps, especially in wheat and soybean segment along with
expanding its distribution reach for these products.
 RALI plans to launch two new products in the seed segment.
Margins
 Change in the product mix with lower realization in Metribuzin impacted margins during
Q4FY21.
 Overall other expense increased as the sales promotion activity and field force expense
increased in Q4 compared to the last three quarters due to eased travel restrictions in Q4.
Balance sheet
 The cash conversion cycle remained healthy at 86 days vs. 83 days in FY20.
 Improvement in receivables by 12 days was offset by reduction in payable days by 14 days
in FY21.
 Cash and liquid investments stood at Rs3.2bn as on Mar’21.
Capex
 Capex plans are delayed by 2-3 months due to the second Covid-19 wave, with the
formulation plant at Dahej (Phase-I) expected to be completed by Q2FY22.
 MPP is expected to commence in FY22, provided there is no Covid-19-related disruption.
 Management has guided for Rs2.5bn capex for FY22.
 Post competition of de-bottlenecking in Hexaconazole, the plant is operating currently at
100% utilization level.
 Off the Rs8bn capex plan over five years, management has Rs5.5bn plan in place.
Covid-19 disruptions
 Management is focusing on stocking of raw material by deploying additional capital for
smooth manufacturing processing and building finished goods inventory as well.
 Management highlighted that issues related to the availability of the packaging material are
leading to slower roll-out of a new brand strategy of uniform packaging.
 Management is adopting an unconventional method of stocking at depots instead of hubs
to mitigate logistical challenges.
April 24, 2021 | 5

Exhibit 12: RALI 1-year forward P/E Exhibit 13: RALI 1-year forward EV/EBITDA
35 25.0
30
20.0
25
20 15.0
15
10.0
10
5 5.0
Oct-18
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Apr-19
Oct-19
Apr-20
Oct-20
Apr-21
Apr-11
Oct-11
Apr-12
Oct-12
Apr-13
Oct-13
Apr-14
Oct-14
Apr-15
Oct-15
Apr-16
Oct-16
Apr-17
Oct-17
Apr-18
Oct-18
Apr-19
Oct-19
Apr-20
Oct-20
Apr-21
1 yr fwd EV/EBITDA Mean
1 yr fwd P/E Mean Mean + Std Dev Mean - Std Dev
Mean - Std Dev Mean + Std Dev
Source: Company, Bloomberg, Emkay Research Source: Company, Bloomberg, Emkay Research
Exhibit 14: Peer Valuation

Price Mkt Cap PE (x) EV/EBITDA (x) ROE (%)
Company Name
(Rs) (Rs bn) FY21E FY22E FY23E FY21E FY22E FY23E FY21E FY22E FY23E
UPL 585 447 14.4 12.7 11.2 7.8 6.7 5.9 15.3 15.3 15.4
PI Industries 2,523 383 52.8 40.0 33.3 35.0 27.2 22.2 18.7 17.2 17.6
Bayer CropScience* 5,141 230 39.8 32.1 28.4 28.3 23.4 20.1 21.1 22.8 22.1
Rallis India 275 53 24.4 21.0 19.1 16.5 13.7 12.0 14.6 15.1 14.8
Sharda Cropchem* 294 27 12.4 12.0 10.8 5.5 4.9 4.2 13.9 13.1 13.2
Dhanuka Agritech 768 36 17.8 17.2 16.0 13.8 12.6 11.7 27.0 25.3 25.2
Sumitomo Chemical* 296 148 45.6 38.4 32.3 30.8 26.4 22.2 23.2 22.9 22.7
Agro Chemicals Avg. 29.6 24.8 21.6 19.7 16.4 14.1 19.1 18.8 18.7
Source: *Bloomberg estimates, Emkay Research
April 24, 2021 | 6

Key Financials (Consolidated)

Income Statement
Y/E Mar (Rs mn) FY20 FY21 FY22E FY23E FY24E
Net Sales 22,518 24,294 27,832 31,118 34,249
Expenditure 19,925 21,066 23,934 26,699 29,385
EBITDA 2,594 3,229 3,898 4,419 4,863
Depreciation 615 641 787 985 1,124
EBIT 1,978 2,588 3,110 3,434 3,739
Other Income 343 405 340 356 374
Interest expenses 61 52 39 38 42
PBT 2,261 2,941 3,410 3,752 4,072
Tax 538 749 869 956 1,038
Extraordinary Items (114) (95) 0 0 0
Minority Int./Income from Assoc. (12) 0 0 0 0
Reported Net Income 1,848 2,286 2,541 2,796 3,034
Adjusted PAT 1,734 2,191 2,541 2,796 3,034
Balance Sheet
Equity share capital 194 194 194 194 194
Reserves & surplus 13,900 15,712 17,656 19,869 22,319
Net worth 14,094 15,906 17,850 20,063 22,514
Minority Interest 7 7 7 7 7
Loan Funds 620 378 378 378 378
Net deferred tax liability (579) (576) (698) (811) (919)
Total Liabilities 14,142 15,716 17,538 19,637 21,980
Net block 5,970 6,350 8,813 9,828 10,453
Investment 3,025 2,835 2,141 2,441 2,441
Current Assets 13,633 14,176 16,444 18,455 21,341
Cash & bank balance 487 551 578 735 1,854
Other Current Assets 1,558 1,829 2,075 2,312 2,538
Current liabilities & Provision 9,242 9,290 10,754 11,982 13,151
Net current assets 4,391 4,886 5,689 6,474 8,191
Misc. exp 0 0 0 0 0
Total Assets 14,142 15,716 17,538 19,637 21,980
Cash Flow
PBT (Ex-Other income) (NI+Dep) 1,917 2,536 3,071 3,396 3,697
Other Non-Cash items 0 0 0 0 0
Chg in working cap 1,272 (427) (898) (741) (706)
Operating Cashflow 3,368 2,168 2,470 3,078 3,494
Capital expenditure (930) (1,909) (2,500) (2,000) (1,750)
Free Cash Flow 2,438 259 (30) 1,078 1,744
Investments (1,932) 190 694 (300) 0
Other Investing Cash Flow 60 (301) (345) (356) (374)
Investing Cashflow (2,459) (1,616) (1,812) (2,300) (1,750)
Equity Capital Raised 0 0 0 0 0
Loans Taken / (Repaid) (68) (242) 0 0 0
Dividend paid (incl tax) (53) (35) (488) (583) (583)
Other Financing Cash Flow (321) (346) (103) 0 0
Financing Cashflow (503) (674) (630) (621) (625)
Net chg in cash 406 (122) 28 157 1,119
Opening cash position 59 224 102 130 287
Closing cash position 487 551 578 735 1,854
April 24, 2021 | 7

Key Ratios
Profitability (%) FY20 FY21 FY22E FY23E FY24E
EBITDA Margin 11.5 13.3 14.0 14.2 14.2
EBIT Margin 8.8 10.7 11.2 11.0 10.9
Effective Tax Rate 23.8 25.5 25.5 25.5 25.5
Net Margin 7.7 9.0 9.1 9.0 8.9
ROCE 17.1 20.0 20.7 20.4 19.8
ROE 12.9 14.6 15.1 14.8 14.3
RoIC 19.0 25.2 25.3 23.3 23.1
Per Share Data (Rs) FY20 FY21 FY22E FY23E FY24E

EPS 8.9 11.3 13.1 14.4 15.6
CEPS 12.1 14.6 17.1 19.4 21.4
BVPS 72.5 81.8 91.8 103.2 115.8
DPS 2.5 3.0 3.0 3.0 3.0
Valuations (x) FY20 FY21 FY22E FY23E FY24E

PER 30.8 24.4 21.0 19.1 17.6
P/CEPS 22.8 18.9 16.1 14.1 12.9
P/BV 3.8 3.4 3.0 2.7 2.4
EV / Sales 2.4 2.2 1.9 1.7 1.5
EV / EBITDA 20.7 16.5 13.7 12.0 10.7
Dividend Yield (%) 0.9 1.1 1.1 1.1 1.1
Gearing Ratio (x) FY20 FY21 FY22E FY23E FY24E

Net Debt/ Equity 0.0 0.0 0.0 0.0 (0.1)
Net Debt/EBIDTA 0.1 (0.1) (0.1) (0.1) (0.3)
Working Cap Cycle (days) 63.3 65.1 67.0 67.3 67.5
Growth (%) FY20 FY21 FY22E FY23E FY24E

Revenue 13.5 7.9 14.6 11.8 10.1
EBITDA 7.6 24.5 20.7 13.4 10.1
EBIT 1.5 30.8 20.2 10.4 8.9
PAT 19.0 23.7 11.2 10.0 8.5
Quarterly (Rs mn) Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21

Revenue 3,463 6,627 7,250 5,705 4,713
EBITDA (98) 1,283 1,168 601 177
EBITDA Margin (%) (2.8) 19.4 16.1 10.5 3.8
PAT 7 918 830 456 81
EPS (Rs) - 4.7 4.3 2.3 0.4
Shareholding Pattern (%) Mar-20 Jun-20 Sep-20 Dec-20 Mar-21

Promoters 50.1 50.1 50.1 50.1 50.1
FIIs 4.9 4.3 6.6 8.2 7.6
DIIs 18.9 19.4 17.1 16.0 15.9
Public and Others 26.2 26.1 26.3 25.7 26.4
Source: Capitaline
April 24, 2021 | 8

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

Closing Period
Date TP Rating Analyst BUY Hold Sell
Price (months) Accumulate Reduce Price
Target Price
19-Jan-21 285 325 12m Buy Varshit Shah 350
4-Dec-20 290 320 12m Buy Varshit Shah
306
20-Oct-20 262 310 12m Buy Varshit Shah
262
218
7-Aug-20 304 335 12m Buy Varshit Shah
23-Jul-20 303 335 12m Buy Varshit Shah 174
19-May-20 200 260 12m Buy Varshit Shah 130
25-Apr-18
22-Apr-19
18-Apr-20
15-Apr-21
23-Oct-18
20-Oct-19
16-Oct-20
17-May-20 212 260 12m Buy Varshit Shah
7-May-20 212 260 12m Buy Varshit Shah
13-Apr-20 204 218 12m Buy Varshit Shah Source: Bloomberg, Company, Emkay Research
5-Apr-20 166 218 12m Buy Varshit Shah
17-Jan-20 218 240 12m Buy Varshit Shah
16-Jan-20 191 215 12m Buy Varshit Shah
17-Dec-19 166 215 12m Buy Varshit Shah
23-Sep-19 175 220 12m Buy Varshit Shah
19-Jul-19 153 210 12m Buy Varshit Shah
26-Apr-19 146 255 12m Buy Amar Mourya
19-Jan-19 160 255 12m Buy Amar Mourya
11-Jan-19 163 255 12m Buy Amar Mourya
24-Oct-18 172 255 12m Buy Amar Mourya
18-Jul-18 182 264 12m Buy Pratik Tholiya
30-Apr-18 212 264 12m Buy Pratik Tholiya
April 24, 2021 | 9

Emkay Alpha Portfolio – Agri Input & Chemicals

EAP sector portfolio
BSE200 EAP OW/UW OW/UW EAP Weight
Company Name
Weight Weight (%) (bps) (Normalised)
Agri Input & Chemicals 0.84 0.84 0% 0 100.00
Bayer CropScience* 0.08 0.07 -12% -1 8.59
Chambal Fertilisers* 0.00 0.01 NA 1 0.82
Coromandel International 0.10 0.09 -11% -1 10.96
DCM Shriram* 0.00 0.00 NA 0 0.00
Deepak Fertilisers* 0.00 0.00 NA 0 0.00
Dhanuka Agritech 0.00 0.00 NA 0 0.00
GSFC* 0.00 0.00 NA 0 0.00
Insecticides India* 0.00 0.00 NA 0 0.00
PI Industries 0.25 0.26 1% 0 30.56
Rallis India 0.00 0.00 NA 0 0.00
Sharda Cropchem* 0.00 0.00 NA 0 0.00
UPL 0.40 0.41 3% 1 49.07
Analyst: Varshit Shah Cash 0.00 0.00 NA 0 0.00
Contact Details Source: Emkay Research
varshit.shah@emkayglobal.com * Not under coverage: Equal Weight

+91 22 6612 1358
 High Conviction/Strong Over Weight  High Conviction/Strong Under Weight
Sector
Sector portfolio NAV
Agro-Chemicals and Fertilizers
Base Latest
Analyst bio
1-Apr-19 23-Apr-20 22-Oct-20 21-Jan-21 22-Mar-21 22-Apr-21
Varshit Shah is a Chartered Accountant
EAP - Agri Input & Chemicals 100.0 79.4 107.0 125.0 127.8 127.5
and a commerce graduate from Narsee
BSE200 Neutral Weighted Portfolio (ETF) 100.0 76.7 103.1 120.5 123.1 122.9
Monjee College of Commerce and
*Performance measurement base date 1st April 2019
Economics, Mumbai. He comes with total
eight years of experience across sectors
Price Performance (%)
such as Chemicals, Education, Telecom,
1m 3m 6m 12m
IT and Midcaps. His team currently
covers 12 stocks in Agro Chemicals, EAP - Agri Input & Chemicals -0.2% 2.0% 19.1% 60.7%
Fertilizers and Midcaps. BSE200 Neutral Weighted Portfolio (ETF) -0.2% 2.0% 19.2% 60.2%
NAV chart
NAV
135
119
103
87
71
55
Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21
EAP - Agri Input & Chemicals BSE200 Neutral Weighted Portfolio (ETF)
Please see our model portfolio (Emkay Alpha Portfolio): Nifty

Please see our model portfolio (Emkay Alpha Portfolio): SMID
“Emkay Alpha Portfolio – SMID and Nifty are a supporting document to the Emkay Alpha
Portfolios Report and is updated on regular intervals”
April 24, 2021| 10

Emkay Rating Distribution

Ratings Expected Return within the next 12-18 months.
BUY Over 15%
HOLD Between -5% to 15%
SELL Below -5%
Completed Date: 24 Apr 2021 12:36:32 (SGT)

Dissemination Date: 24 Apr 2021 12:37:32 (SGT)
Sources for all charts and tables are Emkay Research unless otherwise specified.
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April 24, 2021| 11

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL)

The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and
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with reference to the subject company(s) covered in this report-:
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April 24, 2021| 12

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April 24, 2021| 13

Strong Performance in International Segment: Rallis India

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Rallis India

India Equity Research | Agri Input & Chemicals

Refer to important disclosures at the end of this report

Strong performance in international Rs 275

Source: Company, Emkay Research Source: Company, Emkay Research

Source: Company, Emkay Research Source: Company, Emkay Research

FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E

Revenue (Rs bn)

ROE (%) Cash conversion cycle (Days)

Source: Company, Emkay Research Source: Company, Emkay Research

April 24, 2021 | 2

Exhibit 9: Actual vs. Estimates (Q3FY21)

Exhibit 10: Quarterly result summary

Margins (%) bps bps bps

Exhibit 11: Changes in estimates

April 24, 2021 | 3

Conference call highlights

International crop care

April 24, 2021 | 4

April 24, 2021 | 5

Exhibit 14: Peer Valuation

April 24, 2021 | 6

Key Financials (Consolidated)

April 24, 2021 | 7

Per Share Data (Rs) FY20 FY21 FY22E FY23E FY24E

Valuations (x) FY20 FY21 FY22E FY23E FY24E

Gearing Ratio (x) FY20 FY21 FY22E FY23E FY24E

Growth (%) FY20 FY21 FY22E FY23E FY24E

Quarterly (Rs mn) Q4FY20 Q1FY21 Q2FY21 Q3FY21 Q4FY21

Shareholding Pattern (%) Mar-20 Jun-20 Sep-20 Dec-20 Mar-21

April 24, 2021 | 8

RECOMMENDATION HISTORY TABLE RECOMMENDATION HISTORY CHART

19-May-20 200 260 12m Buy Varshit Shah 130

April 24, 2021 | 9

Emkay Alpha Portfolio – Agri Input & Chemicals

varshit.shah@emkayglobal.com * Not under coverage: Equal Weight

Please see our model portfolio (Emkay Alpha Portfolio): Nifty

April 24, 2021| 10

Emkay Rating Distribution

Completed Date: 24 Apr 2021 12:36:32 (SGT)

GENERAL DISCLOSURE/DISCLAIMER BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):

April 24, 2021| 11

ANALYST CERTIFICATION BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL)

COMPANY-SPECIFIC / REGULATORY DISCLOSURES BY EMKAY GLOBAL FINANCIAL SERVICES LIMITED (EGFSL):

April 24, 2021| 12

Emkay Global Financial Services Ltd.

April 24, 2021| 13

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