Rakesh Jhunjhunwala portfolio: Amid falling equity markets, positional investors are busy finding out quality stocks available at discounted price. They are also scanning ace investors’ portfolio for value picks. For such stock market investors, Rallis India shares can be a good stock to look at as this Rakesh Jhunjhunwala stock has hit fresh 52-week low of ₹192 on NSE.
According to stock market experts, Rallis India share price has been declining after the weak Q4 results in which company’s margins and other numbers got hit by cost inflation. Rallis India tried to counter cost inflation by raising prices but that failed to solve the problem. They suggested investors to remain cautious about the cost inflation and avoid taking any fresh position till the problem calms down.
Highlighting the reason for Rallis India share price tumble, Rajesh Sinha, Senior Research Analyst at Bonanza Portfolio said, “Rallis India reported lower-than-expected result in Q4FY22 mainly on margin front. Pressure on margins was largely led by inflated raw material cost and Rallis India’s inability to fully pass on the inflated cost. Its international business also declined by 8% YoY led by raw material shortage of one key product and phasing out of one customer. Though Rallis India took price hikes in recent past however it was not sufficient to mitigate entire cost inflation, hence more such hikes are possible in the near term too. As a result, the stock price of Rallis India started declining post result announcement and its stock price came down from ₹280 level to ₹195 level, touching 52-week low of ₹192.
Speaking on Rallis India shares, Sonam Srivastava, Founder at Wright Research — a SEBI Registered Investment Advisor said, “Rallis India shares are continually declining in the last year, with the stock trading at 52 week low. The company is struggling with raw material shortages and steep cost inflation. The earnings last quarter were not encouraging, and the management hinted at the struggle in input costs and the continuing intermediates availability. Therefore, we recommend people be cautious with this stock and not buy in until the inflationary pressures calm down.”
Expecting more downside if the stock breaks ₹190 support, Santosh Meena, Head of Research, Swastika Investmart Ltd said, “The counter entered into a severe bear market after hitting fresh highs exactly one year ago. It is trading below its all-moving averages however it is trying to find a base in the ₹200 to ₹190 demand zone and if it manages to bounce back from here then we can expect some buying interest. On the upside, ₹230 to ₹240 will act as a strong supply zone; above this, we can say that the stock is likely to end its bearish trend. On the downside, if slips below the ₹190 mark then ₹175 to ₹160 will be the next support levels.”
Manoj Dalmia, Founder & Director, Proficient Equities Limited said, “The stock is trading at a p/e of 23.9 and has been maintaining a healthy dividend payout of 29% on average . The stock can reach levels of ₹180 if the current level is broken down if the selling continues down to ₹150 which can be good points to accumulate. The long-term is bright as it has wide product ranges such as crop nutrition, animal nutrition and other contract manufacturing facilities.”
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.