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Coromandel International Limited, formerly Coromandel Fertilisers Limited, is
engaged in the business of farm inputs consisting of fertilizers, pesticides and
specialty nutrients. The Company is also engaged in retail business in Andhra
Pradesh, through its Mana Gromor Centres (MGCs). It produces and sells
phosphatic fertilizers of various grades, including di ammonium phosphate,
fertilizers with different composition of nutrients and single super phosphate. The
Company has eight manufacturing facilities located in the States of Andhra
Pradesh, Tamil Nadu, Maharashtra, Gujarat and Jammu and Kashmir. The
Company’s products are marketed, through a network of dealers and MGCs. Its
manufacturing facility at Kakinada produces up to 1.5 million tons per annum of
fertilizer. Its plants at Visakhapatnam and Ennore have the backward integration
facility to manufacture phosphoric acid from rock phosphate. Its product brands
include Gromor, Godavari, Paramfos, Parry Gold and Parry Super.
In a major reform signal for the fertiliser sector, the Cabinet has approved the
nutrient-based fertliser subsidy plan. It has allowed a 10% hike in urea prices and
a price decontrol of all other fertlisers. Under the new policy, subsidy will be given
to nutrients like nitrogen, phosphorus, potash and sulphur. The government
however, will continue to fix the prices of urea. This will boost the entire sector
specially coromandel which is a key beneficiary from this step.
Coromandel International's (CIL) Q3FY11 net sales grew by 16.3% YoY and
OPM contracted slightly by 96bps to 10.8%. Net profit increased marginally by
3.8% YoY .
Manufactured fertilisers volume for the quarter fell ~5% to ~7.4lakh tonnes
from ~7.79lakh tonnes due to disruption in supply of phosphoric acid as one of its
key suppliers “FOSKAR” faced production issues at its rock phosphate mine.
Operations have resumed since then as management expects normal volumes for
Q4FY11. However, better sales volume from fertiliser trading business (Urea at
~74,000 tonnes and DAP at ~41,000 tonnes) contributed to modest rise in overall
sales volumes. As a result, volume for the quarter increased by 2% YoY to
~8.62lakh tonnes vs ~8.43lakh tonnes in Q3FY10.
Risks
(1) Sector is highly regulated by Government.
Technical Comments
The stock is trading in a bullish mode with increasing volumes. The stock has
started moving after double bottom formation with uptrend in continuation.
One can initiate long position with stop of 264 and target of 306 levels in
coming days.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coromandel International Limited, formerly Coromandel Fertilisers Limited, is
engaged in the business of farm inputs consisting of fertilizers, pesticides and
specialty nutrients. The Company is also engaged in retail business in Andhra
Pradesh, through its Mana Gromor Centres (MGCs). It produces and sells
phosphatic fertilizers of various grades, including di ammonium phosphate,
fertilizers with different composition of nutrients and single super phosphate. The
Company has eight manufacturing facilities located in the States of Andhra
Pradesh, Tamil Nadu, Maharashtra, Gujarat and Jammu and Kashmir. The
Company’s products are marketed, through a network of dealers and MGCs. Its
manufacturing facility at Kakinada produces up to 1.5 million tons per annum of
fertilizer. Its plants at Visakhapatnam and Ennore have the backward integration
facility to manufacture phosphoric acid from rock phosphate. Its product brands
include Gromor, Godavari, Paramfos, Parry Gold and Parry Super.
In a major reform signal for the fertiliser sector, the Cabinet has approved the
nutrient-based fertliser subsidy plan. It has allowed a 10% hike in urea prices and
a price decontrol of all other fertlisers. Under the new policy, subsidy will be given
to nutrients like nitrogen, phosphorus, potash and sulphur. The government
however, will continue to fix the prices of urea. This will boost the entire sector
specially coromandel which is a key beneficiary from this step.
Coromandel International's (CIL) Q3FY11 net sales grew by 16.3% YoY and
OPM contracted slightly by 96bps to 10.8%. Net profit increased marginally by
3.8% YoY .
Manufactured fertilisers volume for the quarter fell ~5% to ~7.4lakh tonnes
from ~7.79lakh tonnes due to disruption in supply of phosphoric acid as one of its
key suppliers “FOSKAR” faced production issues at its rock phosphate mine.
Operations have resumed since then as management expects normal volumes for
Q4FY11. However, better sales volume from fertiliser trading business (Urea at
~74,000 tonnes and DAP at ~41,000 tonnes) contributed to modest rise in overall
sales volumes. As a result, volume for the quarter increased by 2% YoY to
~8.62lakh tonnes vs ~8.43lakh tonnes in Q3FY10.
Risks
(1) Sector is highly regulated by Government.
Technical Comments
The stock is trading in a bullish mode with increasing volumes. The stock has
started moving after double bottom formation with uptrend in continuation.
One can initiate long position with stop of 264 and target of 306 levels in
coming days.
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