Q3 performance: Margin disappointment for Rallis India, shares tank over 7%

With recent price hikes, margins should recover

A strong volume growth reported by Rallis India for the quarter ended December 2017 (Q3) surprised Street, but gains were offset by a weak performance at the operating level. As a result, the Rallis stock tanked by over seven per cent to close at Rs 252 on Tuesday. However, analysts believe, any correction is an opportunity as the outlook Rallis of remains strong and recent pricing action should help margins.

Analysts estimate volumes to have grown 15 per cent on a year-on-year (y-o-y) basis during the quarter, helping Rallis post a strong revenue growth of almost 19 per cent y-o-y