Chemicals & Fertilisers 3QFY15E Results Preview :: HDFC Securities

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Delayed monsoon led to better outlook for the Rabi season.
Volumes of agrochemicals and fertilisers will be higher YoY. Urea
sales stood at 8.6 mnT (+3.5% YoY) and complex fertiliser volumes
grew by 7.9% to 6.6 mnT in 3QFY15. Lower channel inventory of
complex fertilisers will have a positive impact on margins.
 Interest cost will be lower due to timely subsidy payments by the
government. Additional subsidy of Rs 350/t will benefit urea players
(Chambal Fertilisers).
 We remain positive on fertilisers. There are multiple triggers for the
sector: (1) Profit decline is over with the worst behind us (2) Hope for
positive policy actions (3) Improving fundamentals (INR, RM prices,
channel inventory, receivables). Clarity on the new urea investment
policy and prior period subsidy are the key triggers.
Key points to watch out for
 Chambal Fertilisers : Performance in trading and textile business.
Incremental clarity on new investment policy
 Deepak Fert : Clarity on gas availability, TAN volumes
 GSFC : Outlook on caprolactam-benzene spread, update on capex
 Coromandel Int : Volume pickup, margins and capacity utilisation of
Sabero Organics
 PI Industries : Guidance for custom synthesis business, new product
launches
 Rallis India : Performance of seed biz, outlook on new product
launches, progress in custom synthesis business
 UPL : Outlook on global agri environment, cross currency impact

LINK
http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/3010610