Coromandel International Ltd - Q1 FY12 Result Update :Unicon

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Coromandel International Ltd - BUY

• Coromandel International Ltd (CIL) reported Q1 FY12 result inline with street expectations. Revenue grew by 15.6% YoY to INR 17,901mn while volume dropped by 5% in the quarter.
• EBITDA expanded by ~28% YoY to INR 2,688mn due to better realisations while EBITDA margin increased to 15% from 13.6% YoY in the quarter.
• Net profit jumped by 32.3% YoY to INR 1,589mn while PAT margin stood at 8.8% compared to 7.6% same period last year.

Outlook and Valuations

CIL's recent acquisition of Gujarat based agrochemical company Sabero Organics would strengthen its topline growth. Strong synergy benefit is expected from this acquisition going forward. CIL’s growth trajectory would be further supported by expansion of phosphoric fertiliser capacity in Kakinada, addition of 200 retail stores and healthy monsoon in 2011. Revenue from Kakinada’s new capacity is expected to start contribution from H2 FY13. Stock is trading at 10.1x its FY13E earnings. We maintain BUY on the stock with a 18month price target of INR 410.

Thanks & Regards

Unicon Wealth Research