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Coromandel International: Buy; PT Rs416
The company’s phosphoric acid plant in Tunisia is 95% complete - it was
delayed by 3-4 months, so now expected to finish by Oct-Nov.
Sabero acquisition driven by 2 factors - focus on non-subsidy business and to
become a leading player in crop protection.
Retail business- The company is filling gaps in Andhra Pradesh – it will
increase retail centres from 423 presently to 500 by FY12 and add another
100 centres in Karnataka.
Organic manure business - growing well, the company is sourcing
infrastructure for it, targets to increase sales to 300k tons by FY12. ASP is
Rs4000-5000/ton with gross margins around 25%.
Farm mechanization - in pilot stage, company charges Rs5000/acre for
providing service. The company faces challenge in terms of maintaining its
22 machines and convincing farmers to accept this idea. The company has
spent 5crs on its machines.
The company remains focused to increase EBITDA contribution from nonsubsidy
business from 30% to 50%, largely driven by crop protection and
compost business. Company has no plans to get into seeds business.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Coromandel International: Buy; PT Rs416
The company’s phosphoric acid plant in Tunisia is 95% complete - it was
delayed by 3-4 months, so now expected to finish by Oct-Nov.
Sabero acquisition driven by 2 factors - focus on non-subsidy business and to
become a leading player in crop protection.
Retail business- The company is filling gaps in Andhra Pradesh – it will
increase retail centres from 423 presently to 500 by FY12 and add another
100 centres in Karnataka.
Organic manure business - growing well, the company is sourcing
infrastructure for it, targets to increase sales to 300k tons by FY12. ASP is
Rs4000-5000/ton with gross margins around 25%.
Farm mechanization - in pilot stage, company charges Rs5000/acre for
providing service. The company faces challenge in terms of maintaining its
22 machines and convincing farmers to accept this idea. The company has
spent 5crs on its machines.
The company remains focused to increase EBITDA contribution from nonsubsidy
business from 30% to 50%, largely driven by crop protection and
compost business. Company has no plans to get into seeds business.
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