Jhunjhunwala Portfolio News: A stock included in the portfolio of veteran investor Rakesh Jhunjhunwala has lost 6 percent in the last one week. Agrochemical company Rallis India shares are being sold due to weak financial results of June 2021 quarter. Today, on the trading day of Friday 23 July, its shares have fallen by more than 1 percent. Contrary to estimates, the company’s net profit declined by 1.4 per cent to Rs 82.3 crore in April-June 2021 due to weak operational performance. However, the company’s revenue grew by 11.7 percent during this period. Due to weak financial results, analysts at Kotak Securities have downgraded the stock to ‘Sell’ rating at a fair value of Rs 300.
Big Bull Rakesh Jhunjhunwala and his wife hold 9.93 percent stake in this company. Big Bull had reduced its stake in Rallis India in July-September 2020. Earlier, his stake in the company was 10.3 per cent.
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Kotak Securities: Sell Rating, Fair Value – Rs 300
This morning the shares of Rallis India fell by 2.7 percent to a price of Rs 317 per share, although after that there was some recovery and at present its price is around Rs 322. According to analysts at Kotak Securities, Rallis India’s EBITDA declined by 5 per cent due to costlier raw materials and increase in fixed expenses. Kotak Securities has cut EBITDA estimates by 8-10 per cent in FY2022-23E due to delay in capital expenditure, rising raw material prices and weak performance in Kharif season. According to Kotak Securities, the company is cautious about capital expenditure and there is a possibility that the return on it may be low.
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ICICI Direct: Buy Rating, Target Price- Rs 400
Unlike Kotak Securities, ICICI Direct has given Buy Rating to Rallis India Stock. According to ICICI Direct, its performance is going to be better due to the company’s capital expenditure. There is scope for better growth in the domestic and foreign crop care business. According to ICICI Direct, lower price pressures for key molecules in the international market, besides better volume growth prospects and technological integration may improve gross margins. Apart from this, due to increase in Custom Synthesis/CRAMS business revenue, the outlook for the stock is also looking good.
(Article: Kshitij Bhargava)
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