Looking for growth? Don't miss Rallis India with its track record of fast growth
29-04-2014 • About Rallis India (
$RALLIS) • By InTwits
Rallis India is a fast-growing stock in Agrochemicals industry. It showed noticeble revenue performance in the last years among with attractive profitability and financial model.
Growth story
Rallis India showed fast growth in the last financial year. Rallis India's revenue surged on 19.8% in FY2014. EBITDA also increased considerably: 23.8% for the same period.
In the last 3 years the company showed fast revenue growth of 17.2% from FY2011 to FY2014 annually. EBITDA surged on 10.4% from FY2011 to FY2014 annually.
Rallis India ($RALLIS) financials for the last 5 years
| mln. INR | FY2010 | FY2011 | FY2012 | FY2013 | FY2014 |
|---|
| Revenue | 22,638 | 10,862 | 12,749 | 14,582 | 17,466 |
|---|
| Revenue growth, % | | -52.0% | 17.4% | 14.4% | 19.8% |
|---|
| SG&A, % | | | | | |
|---|
| EBITDA | 1,617 | 1,972 | 2,065 | 2,140 | 2,650 |
|---|
| EBITDA growth, % | | 22.0% | 4.7% | 3.6% | 23.8% |
|---|
| EBITDA margin, % | 7.14% | 18.2% | 16.2% | 14.7% | 15.2% |
|---|
| Net Income | 1,015 | 1,260 | 992 | 1,190 | 1,519 |
|---|
| Net Income margin, % | 4.48% | 11.6% | 7.78% | 8.16% | 8.70% |
|---|
| |
| CAPEX | 1,030 | 1,314 | 570 | 465 | 591 |
|---|
| CAPEX/Revenue, % | 4.55% | 12.1% | 4.47% | 3.19% | 3.38% |
|---|
| Debt | 81 | 1,172 | 1,506 | 540 | 745 |
|---|
| Cash | 107 | 146 | 112 | 258 | 89 |
|---|
| Net Debt/EBITDA | -0.0x | 0.5x | 0.7x | 0.1x | 0.2x |
|---|
| |
| ROIC, % | 29.5% | 32.6% | 26.3% | 25.3% | 28.3% |
|---|
| ROE, % | 28.8% | 27.1% | 18.8% | 20.3% | 22.7% |
|---|
Profitability and return on investment
EBITDA growth was partly attributed to margin expansion. Rallis India showed small growth in EBITDA margin of 0.500 pp from 14.7% to 15.2% in FY2014. If we look for the longer period the company showed big decline in EBITDA margin of 3 pp from 18.2% in FY2011 to 15.2% in FY2014.
Rallis India shows attractive ROIC at 28.3% for the last 12 months which assumes stable development model. Three years ago it was a bit higher at 32.6%. Average ROIC for the last three years was 26.6%.
Net Income margin increased on 0.500 pp from 8.20% to 8.70% in FY2014. In the longer period the company showed big decline in Net Income margin of 2.90 pp from 11.6% in FY2011 to 8.70% in FY2014.
Rallis India operates at ROE of 22.7%. For the last three years the average ROE was 20.6%.
Capital expenditures (CAPEX)
The company's CAPEX/Revenue was 3.38% in FY2014. The company showed big decline in CAPEX/Revenue of 8.71 pp from 12.1% in FY2011 to 3.38% in FY2014. It's average level of CAPEX/Revenue for the last three years was 3.68%.
Leverage (Debt)
Having such a fast growth profile the company keeps low debt level at 0.2x Net Debt/EBITDA. In the last 3 years Rallis India's leverage dropped on 0.27x from 0.52x in FY2011 to 0.25x in FY2014.
Valuation vs. comparable companies
The company trades at 13.9x EV/EBITDA which is 13.4% lower than 16.0x Agrochemicals industry avearge calculated based on 39 companies. At the end of trading day today Rallis India traded at 23.7x P/E which is 23% lower than 30.8x Agrochemicals peer group avearge calculated on the basis of 9 companies.
For capital intensive compnanies it's worth taking a look at EV/(EBITDA-CAPEX) multiple. At the end of trading day today Rallis India traded at 17.8x EV/(EBITDA-CAPEX) which is 283% higher than 4.7x Agrochemicals peer group avearge calculated on the basis of 6 companies.
Management team
Veeramani Shankar runs Rallis India as a CEO.
