Rallis’ Q4FY16 PAT of Rs323 million against our expectations of Rs172 million was due to higher other income (Rs88 million in Q4FY16 vs. 9 in Q4FY15) and lower depreciation charges (Rs59 million in Q4FY16 vs. 132 in Q4FY15. Rallis reported revenue growth of 9% y-o-y in Q4FY16 driven by 9% growth in the standalone entity (domestic + export agrochemicals), significantly higher than our expectations of a 6% decline. However, EBITDA declined by 6% due to decline in gross margins by 339bps y-o-y, suggesting either a price cut or a weaker product mix in agrochemicals business driving sales growth. Other income of Rs88 million was higher than our estimate of Rs14 million.
Standalone sales grew by 9% while EBITDA margins came off by 60bps y-o-y, leading to overall growth of 5%. Gross margins declined by 200bps. Depreciation charges were substantially lower at Rs50 million vs last quarter charge of Rs123 million. Other income was higher at Rs8.7 million vs. Rs0.9 million in the base quarter. In FY16, sales for standalone business declined by about 14% along with 170bps drop in EBITDA margins. EBITDA of the standalone business declined by 18% in FY16. We believe industry growth was flat compared with Rallis’ 14% decline.
Metahelix reported revenue growth of 2% y-o-y as against our estimate of a revenue decline of 10%. EBITDA margins were at -12% in 4QFY16 as against 1% in 4QFY15.