1
Please refer to important disclosures at the end of this report
1
1
Coromandel International (CIL) is engaged in the business of farm inputs
comprising of fertiliser, crop protection, specialty nutrients and organic
compost. It is the largest privately owned phosphatic fertiliser company with
16% market share on all-India basis and 45% market share in home markets
of Telangana, AP and adjacent areas. In 3QFY20, it’s overall volumes
increased by 5% as per the data by the Ministry of Fertilizers.
After decline in sales for 2 consecutive quarters of FY20, Coromandel
reported sales growth in 3QFY20. This growth was driven by increase in
sales volumes and better sales mix. The company also started backward
integration which helps it reducing dependency on raw material procured.
Further, during the quarter, major raw material prices were soft, this helped
the company in expanding EBITDA margins by 322 bps to 13.2%. The
company’s management was also positive about the future growth prospects
of the company.
On the financial health front, the company is reducing its debt burden over
the years from 1.03x debt-equity ratio in FY13 to 0.9 in FY19. Futher more
the company is steadily increasing its cash flow from `263 in FY18 to `526cr
in FY19. It has also been maintaining a healthy dividend payout of ~30%.
On TTM earnings the stock trades at 19.1x and delivers ROCE of 22.5%.
Hence BUY.
BUY
CMP `614
0.5
Reuters Code
CORF.BO
CRIN IN
BSE Sensex
38,144
Nifty
11,133
Fertilizers
Market Cap (` cr)
17,988
52 Week High / Low
642/337
Avg. Daily Volume
9,133
1
Face Value (`)
Jaikishan Parmar
022 – 3935 7600 Ext: 6810
jaikishan.parmar@angelbroking.com
Coromandel International Ltd
Others | Fertilizer
Mar 03, 2020
2
Coromandel International|Fertilizer
2
Research Team Tel: 022 - 39357600 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Coromandel
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)