Chambal Fertilisers Results below estimates- ACCUMULATE ::Emkay

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Chambal Fertilisers

Results below estimates

ACCUMULATE

CMP: Rs 81                                       Target Price: Rs 86

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n     Q4FY11 results were below our estimates - Revenues grew  by 13% yoy to Rs 8.1 bn, EBITDA declined by 31% yoy to Rs 1.15 bn

n     Fertilizer segment disappointed with EBIT margins of 9% vs 17% last year. However, shipping margins improved to 20% as compared to 11.6% last year

n     EBITDA margin decreased to 14% of sales in Q4 as compared to 23% last year. However, margins to improve in FY12E because of lower trading

n     Maintain FY12E estimates & price target of Rs 86, based on 10x FY12E EPS (as against 15x to complex fertiliser players), maintain ACCUMULATE