Coromandel International Ltd.|Q2FY15 Result Update | Above expectation performance; Good times ahead: TP revised upward to Rs.353 | Maintain HOLD:: IndiaNivesh

Please Share::

�� India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details ��

��

-->
Coromandel International Ltd (COIL) Q2FY15 performance was above our estimate
on all fronts. Revenue went up 7.8% Y/Y to Rs.34.8 bn (v/s INSPL est. 34.7bn). The
revenue growth was driven by 22.8% Y/Y increase in Sabero Organics and 143.1%
Y/Y growth in other segment. This was partially offset by 2.3% Y/Y de-growth in
Fertilizer segment. In FY15, the company targets Rs.10.0 bn (v/s Rs.7.2 bn in FY14)
revenue run-rate from Sabero Organics (1H FY15, Sabero reported Rs.4.9 bn of
revenue).

EBITDA (including other income) went up 16.1% Y/Y to Rs 3,606 mn (INSPL Est.
Rs 3,098 mn) translating to margin expansion of 74 bps Y/Y (to 10.4% v/s 9.6% in
Q2FY14).
Net profit went up 12.4% Y/Y to Rs 1,799 mn (v/s INSPL est. of Rs. 1,725 mn) led by
higher EBITDA base. During the quarter, interest/depreciation expenditure stood
at Rs.601/Rs.264 mn (v/s Rs.527/Rs.249 mn in Q2FY14). The company reported tax
expenditure of Rs 911 mn leading to tax rate of 33.2% (v/s 25.4% in Q2FY14). In
FY15-16 management expect to reach 1,000 (v/s 800 in Q2FY15) retail outlets and
also looking to expand in Maharashtra and Tamil Nadu.
In our view, the performance of COIL’s fertilizer segment during the quarter was
impacted on account of delayed monsoon arrival primarily in the key regions of
COIL. However, since the monsoon was normal in major part of the country, we
expect upcoming ‘Rabi Crop’ season to be much better. We maintain ‘HOLD’ on
with upward revision in target price to Rs.353/share from Rs.279 on COIL.
Key Result Take Away
Volume growth update...
COIL’s reported 7.2% y/y volume growth to 11,26,883 tonnes (v/s 10,51,520 tonnes
in Q2FY14). The volume growth was driven by NPK (+24.2 % Y/Y), MOP (+59.0% Y/
Y), and SSP (+1.9% Y/Y), partially offset by decline in DAP (-40.9% Y/Y), and Urea (-
8.6% Y/Y) volume. During the quarter, the fertilizer revenue de-grew by 2.3% Y/Y to
Rs.27.6 bn. The revenue per tonnes of fertilizer also declined from Rs. 24,467 (v/s
Rs. 26,838 in Q2FY14). The decline in the revenue per tonnes was due to reduction
in DAP prices.

LINK
http://www.indianivesh.in/Admin/Upload/635506023662196250_Coromandel%20International_Q2FY15%20Result%20Update.pdf