Coromandel International Ltd. share price target

During the quarter, plant protection revenue declined 36% YoY to INR2,710m, with the EBIT margin shrinking 10pp YoY to 2.2%, primarily on account of the shutdown at the Sarigam plant (revenue/EBITDA impact of INR700-800m/INR400-450m) and the softness in mancozeb prices. Additionally, EBITDA/mt for the fertilizer segment stood at INR2,979 up 49% YoY owing to forex gain (INR300m) and lower RM cost. (i) MRP across fertilizers declined by 8-10% owing to a decrease in RM cost. (ii) Company guided for 8-12% revenue growth in FY20, with EBITDA margin of 14-15% in the plant protection business. We cut our earnings estimate by 6%/7% for FY20/21, mainly on account (a) a cut in the EBITDA estimate for the crop protection business by 12%/6.5% for FY20/21 and (b) an increase in depreciation and interest cost. Maintain Coromandel International Crop protection revenue declined 36% YoY to INR2.7b, while nutrient & other allied business revenue was down 12% YoY to INR18.8b.

We expect margin pressure to subside in FY20, due to backward integration in phosphoric acid, coupled with lower RM prices. We expect the non-subsidy business to grow (estimate a 20% CAGR in the crop protection business over FY20-21E to ` 25.0bn). The company expects the plant in Sarigam, which is currently shut, to become operational in 1HFY20. The Dahej plant, which manufactures Mancozeb, has become operational and is likely to lead to volume growth in the crop protection business. The stock is currently available at 15.4x and 13.6x FY20E and FY21E EPS. We...

YoY to 9.8% (our estimate: 6.7%). Consequently, adj. PAT grew 26% YoY to INR1,129m (our estimate: INR864m). FY19 performance: Revenue grew 19.3% YoY to INR132.3b, while the margin shrank 40bp YoY to 10.9%. Adj. PAT grew 6.5% YoY to INR7,362m. RM prices softening but expect working capital pressure: CRIN has contracted phos acid at USD728/mt for 1QFY20 (v/s USD750/mt in 4QFY19), indicating stability in RM prices. However, we expect continued working capital pressure owing to delayed subsidy disbursal. The company received...

Initiatives to increase the contribution of unique grades in the Fertilizer segment and new product launches in domestic along with capacity expansion in the agrochemical market look positive. We maintain Buy with a TP of Rs569 (17x FY21E EPS of Rs33.4). our estimate (Rs28.6bn). The Fertilizer segment's revenue grew 12.1% yoy to Rs26.2bn (vs. our estimate of Rs24.6bn), driven by a 28.8% rise in realization, partially offset by a 13.0% decline in volumes. The improvement in realization was largely due to an increase in contribution from NPK and SSP coupled with a significant decline in the revenue contribution from Urea (yoy). The Crop protection segment reported a 3.1% yoy increase...

EBITDA margin contracted 200bp YoY to 10% (est. EBITDA declined 7.2% YoY to 22 January 2019 INR3,039m (est. EBIT margin contracted by 210bp to 9.2% in Nutrient and other allied business and by 70bp to 15.7% in crop protection business. Adj. PAT declined 14.3% YoY to INR1,546m (est.

Coromandel International (CRIN) incurs a major raw material (RM) cost in the form of phosphoric acid (38-40% of RM cost, based on our assumption). Consequently, the 30% YoY spike in the price of phosphoric acid in FY19YTD is likely to have exerted pressure on its margins in 1HFY19. Tackling near-term margin headwinds, too, appears to be a tough job. In this report, we, thus, attempt to analyze supply, demand and raw material (rock phosphate and sulphuric acid) cost trends, which primarily dictate the phosphoric acid prices.

29 October 2018 Revenue/EBITDA grew 27%/18% YoY to INR75,368m/INR8,802m. Adj. PAT grew 11% YoY to INR4,687m. For 2HFY19, we expect revenue growth of 25% YoY (similar to 1HFY19), but foresee increased pressure on margins (we expect contraction of 270bp) due to a spike in RM prices. Margins, however, took a sharp hit, primarily because of higher phos acid prices (USD758/MT v/s USD567 in 2QFY18). We expect continued margin headwinds, but revenue growth is likely to be supported by price hikes DAP prices already raised to INR29,000/MT (from INR26,600) and NPK price hike is planned from 1 November 2018. Given the price hikes and momentum in volume growth, we raise our revenue estimates for FY19/20 by 9%/8%. We value the stock at 20x FY20E EPS (~15% premium to its five-year average multiple), which is justified, in our view, given the likelihood to continued traction, revival in margins on phos acid plant commissioning, and a sustained RoE of 21%.

10 September 2018 Fertilizers CRINs volumes declined 7.1% YoY in 1QFY19. Moreover, the Ministry of Fertilizers data reveal a strong traction in 2QFY19 volumes so far. So far in 2QFY19, the company has achieved 99% of the volume estimate for urea, 86% for DAP, 80% for NPK and 74% for single super phosphate (SSP). The only disappointment comes from MOP, where CRIN has clocked only 17% of our estimated volumes. However, given the relatively low volume mix of MOP, we believe its sluggishness is unlikely to hamper the overall growth estimates. We expect the strong acreage trend in key crops to continue aiding growth. Furthermore, good rainfall in key states of Andhra Pradesh, Telangana, Karnataka, Maharashtra and Odisha also provides comfort. We expect overall volume growth of 7% and revenue growth of 16.8% in FY19. CRIN are Andhra Pradesh (AP), Telangana, Maharashtra, Karnataka, West Bengal and Odisha.

31 July 2018 revenue increased 11.8% YoY to INR25,285m (est. EBITDA grew 26.3% YoY to INR2,139m (est. INR2,019m), with the margin expanding 100bp YoY to 8.5% (est. Adj. PAT of INR902m (+24.2% YoY) was below our estimate of INR973m, primarily on account of higher-than-anticipated interest cost (INR644m v/s est. of INR410m) and lower-than-anticipated other income (INR88m v/s est. multiple levers in 1QFY19, which collectively aided in an improved operational performance.

Revenue increased by 4.84% to Rs. 2528.45 Cr in Q1FY19 when compared to the previous quarter. Coromandel International Ltd Q1FY19 results Comment