Deepak Fertilisers : Adjusted results above estimates, maintain Buy ::Emkay

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Deepak Fertilisers

Adjusted results above estimates, maintain Buy

BUY

CMP: Rs139                                        Target Price: Rs185

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n     Q3FY12 adjusted results were above est. Sales at Rs 6bn, 60% yoy, APAT of Rs 637mn, 43% yoy was higher than est. EBITDA margin of 19.1% was in line with est of 19.5%

n     Results have been adjusted for Rs 220mn of EO items (Rs 150mn incl. in other expenditure & Rs 70mn incl. in interest costs related to MTM loss). Further clarity awaited on these

n     Chemicals performance was in line with est. Fertiliser revenues were higher than est due to higher trading. Fert margin at 10.4% was lower than est of 12.0%

n     Maintain est of Rs 26.7/30.6 for FY12/13 resp. Maintain Buy with target of Rs 185. At CMP of Rs 139, stock is trading at  4.5x FY13 earnings & dividend yield of 4%