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ResearchReport 9364(-61) 2865(-10) 9300(+210) 2843(+63)

FINANCIALS OF CHAMBAL FERTILISERS AND CHEMICALS LTD


Trailing 4th Quarter Results-December 2007/2008
Amount in Crores

Particulars December 2008 December 2007 %Change


Net Sales 4369.00 2610.00 40.26
Other Income 96.13 96.06 0.07
Total Income
Expenditure
4465.04
3879.66
2706.69
2163.86
39.38
44.22
BgSE FINANCIALS LIMITED
Operating Profit 585.38 542.83 7.26
(A Subsidiary of Bangalore Stock Exchange Ltd)
Depreciation 211.20 185.05 12.38 51, Stock Exchange Towers, 1st Cross, J. C. Road, Bangalore - 560 027.
Interest 126.27 100.32 20.55 Phone : 41575234 / 35, 41575203 Fax : 41575232
Tax 114.22 91.25 20.11 visit us at : www.bfsl.co.in
Fringe Benefit Tax 1.31 1.15 12.21
Deferred Tax
Net Profit / Loss
(33.67)
166.05
(24.61)
189.68
(26.90)
(14.23)
Research Report
Equity 416.21 416.21 0.00 on
Reserves 749.84 496.66 33.76
CHAMBAL FERTILISERS AND CHEMICALS LTD
Earnings Per Share (EPS) 3.98 4.55 (14.32)
Cash Earning Per Share (CEPS) 9.06 9.00 0.66 Release Date: 09-02-2009
Face Value (Rs.) 10.00
PE Ratio 9.54
PC Ratio 4.19
Price as on 06/02/2009 38.00

CHAMBAL FERTILISERS AND CHEMICALS LTD (December 2007-2008)

5000 4369 4465

4000
RS IN CRORES

2610 2706
3000
2000
1000 542.82585.38 416.21 416.21
189.68166.05
0
OPE RAT I N G

E QU I T Y
I NCOME
N E T S AL E S

PROFI T
T OTA L

NE T
PROFI T

Series1
Series2
FINANCIALS INDICATARS

STATEMENT OF CAUTION: INVESTORS ARE ADVISED TO EXERCISE CAUTION AND INVEST IN PHASED
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The views expressed in this report are that of experts and not of BgSE Financials Ltd.
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CHAMBAL FERTILISERS AND CHEMICALS LTD
Price as on 06/02/2009 Rs. 38/- HIGHLIGHTS RISK FACTORS
bottleneck for the industry. The industry faces a natural gas
COMPANY'S PROFILE shortage of 12 million metric standard cubic meters q
Chambal Fertilisers is a company in the K K Birla Group. q
MARKET RISK : The Company has significant quoted
Chambal was promoted by Zuari Industries Limited (ZIL) investments, which are exposed to fluctuations in stock
YEAR OF INCORPORATION : Chambal (mmscmd). Natural gas is a cheaper feedstock for
and its two hi-tech nitrogenous Fertiliser Plants- Gadepan-
Fertilisers and Chemicals Ltd was manufacturing fertilizers as compared to Naphtha. Although prices. These investments represent a material portion of
I and Gadepan-II are located at Gadepan, Rajasthan,
incorporated in the year 1985 and was the prices of various inputs used by the industry have come India. the Company's business and are vulnerable to
promoted by Zuari Agro Chemicals. The down significantly, the continuation of the subsidy payments in fluctuations in the stock markets. Any decline in the
q INDIA'S LARGEST PRODUCER OF UREA : Chambal Fertilisers
Company set up urea and ammonia the form of subsidy bonds is another major issue. prices of the Company's quoted investments may affect
plant at Gadepan in Rajasthan. They and Chemicals Ltd is India's largest producer of Urea in
The industry has urged the government for reduction of
the Private sector. its financial position and the results of its operations.
started commercial production in the regulation of the industry and timely payment of subsidy in
year 1994. cash. The industry also wants the subsidy bill to be raised to q FINANCE : Chambal Fertilizer posted decent set of q
PRICE ESCALATION : Raw material price escalation & the
GLANCE ABOUT CHAMBAL & ITS MAJOR ACTIVITIES : The over Rs 1,00,000 crore. numbers during the third quarter ended December 2008
lag effect in passing these on to customers.
Company has Three Divisions namely Agri-inputs, Shipping According to a study done by the Fertilizer Association of India as compared to the same period last year. The top-line
and Textiles. The company is a diversified conglomerate (FAI), The subsidy of about Rs 70,000 crore released so far in growth was 54% at Rs 1,245.89 crore during the third q
COMPETITION RISK : Inability of the Companies to
having interests in fertilizers, phosphoric acid, agri-inputs & 2008-09 is grossly inadequate to meet the estimated need of quarter ended December 2008, primarily driven by the innovate may face intense competition affecting the
seeds, agri-biotechnology, textiles, information technology, traded goods segment of the company where the
over Rs 1,00,000 crore. revenues; The Company encounters competition from
food processing and shipping. They are also having business
Although the decline in global prices of raw materials could company trades in DAP, SSP and other fertilizer products local and international Companies.
interest through subsidiaries and Joint Ventures in the areas of
have resulted in reduced subsidy requirement for the year, the and chemicals products. However the OPM fell by 300
software, power, and financial and insurance services and
simultaneous depreciation in the value of rupee in comparison bps to 15.1% during the quarter under review. Increase in q
FOREIGN CURRENCY EXCHANGE RISK : Company’s forex
has a phosphoric acid facility in the Kingdom of Morocco.
MAILSTONES : In the year 1997, the company entered into a to dollar has taken away most of the gains arising out of traded goods contribution to the total revenue has transactions is crucial with different countries. So the
joint venture with Office Cherifien Des Phosphates, a reduction in international prices. The subsidy constituted 80% resulted in the cost of traded goods as a percentage of Currency exchange risks always one of the prominent
Moroccan Government company and Indo Maroc of the total delivered cost, thus it needed to be released in adjusted sales increasing by 1500 bps to 25.9% of risks in its business.
Phosphore SA. time. adjusted sales during the quarter.
In the year 1998, the company promoted India Software FERTILIZERS SUPPLY : The fertilizer supply during the current year q
BUSINESS RISK : Rapid changes in business and customer
SEGMENT RESULTS :
group, a software division which makes inroads into the has been adequately provided for by the Government of India preferences require innovative solutions and services to
q MANUFACTURED FERTILIZERS : The revenue of
software business. during the current year despite significant increase in retain and improve market share in the challenging
In the year 1999, the company acquires ITC Classic Home manufactured fertilizer, which contributed 53% of the total
demand. The Government of India has fixed the target for global economic environment, every business
Finance Ltd and renamed as Birla Home Finance Ltd. revenue of the company during the quarter ended
supply at about 28.8 million metric tonnes of Urea this year, out organization is subject to the inherent risk of decline in
In the year 2000, Birla Home Finance Ltd took on BHW Holding of which about 15.8 million metric tonnes of Urea was made December 2008 increased by 17% to Rs 663.41 crore as
AG of Germany, as 50:50 joint venture partner. compared to the corresponding quarter of the previous business due to rapid technological change, evolving
available.
In the year 2001, the company acquired majority stake in LATEST DEVELOPMENTS : The ministry of chemicals and fertilizers year. The gross profit from this division increased by 2% to industry standards, changing client preferences and
Novasoft Information Corporation of New Jersey to integrate has sought cooperation from the State governments to prevent Rs 94.76 crore. new product and service introductions.
and broaden their IT service business. q TRADED GOODS : The revenue from the traded goods also
any illegal movement of fertilizer across the border. q
TECHNOLOGY RISK : Achieving and sustaining constant
In the year 2003, the company acquired 51% stake in Techino contributed significantly to the total revenue of the
Aries Agro, a specialty fertilizer manufacturing company, has
Pty of Australia through a special purpose vehicle namely growth depends on ability to adopt emerging
deferred the launch of a new production unit at Panvel in the company during the quarter ended December 2008. The
Chambal Biotech Pvt Ltd, incorporated in Singapore. technologies. In the current highly competitive
During the year 2007-08, Chambal Infrastructure Ventures Ltd, outskirts of Mumbai to March from the earlier schedule of traded goods contributed 30% of the total revenue of the
December. The Company has cited the slowdown in demand company during the quarter ended December 2008. The environment, the technology is evolving rapidly making it
a wholly owned subsidiary incorporated two wholly owned
subsidiaries namely Chambal Energy (Chhattisgarh) Ltd and for crop nutrients as the reason for deferring the commissioning revenue increased by 212% to Rs 373.92 crore as imperative for every company to adopt and assimilate
Chambal Energy (Orissa) Ltd for taking up power projects in of the new plant with an annual capacity of 10,000 tonnes. compared to the same period last year. The division the changes in technology to enhance the quality and
the states of Chhattisgarh and Orissa respectively. Chennai based Archean group is planning to set up a fertilizer however posted a loss of Rs 2.62 crore as compared to a scope of its offerings.
In April 25, 2008 the company had taken delivery of a new unit in Gujarat for a projected investment of Rs 1000 crore. The profit of Rs 10.11 crore during the corresponding previous
Aframax Tanker namely M T Ratna Shruti from Hyundai Heavy group's subsidiary Jhakhau Salt has been allotted about q
ECONOMIC CYCLE : The Indian economy has shown
year quarter.
Industries Co Ltd, South Korea. Also, in June 9, 2008, they had 60,000 acres of land in Greater Rann of Kutch for the project sustained growth over the last several years. Any
q SHIPPING & TEXTILES : The Shipping and the textiles division
taken the delivery of another Aframax Tanker namely M T that will produce sulphate of potash (SOP) fertilizer from sea slowdown in economic growth could adversely affect the
also posted excellent growth in revenue during the
Ratna Shradha. bitterns. Industry/Company's business.
SUBSIDIARIES : quarter though it contributed 11% and 6% respectively to
The fertilizer ministry along with IFFCO plans to set-up 1.6 million
1. Chambal Infrastructure Ventures Limited. the total revenue of the company. The revenue increased
metric tonnes fertilizer plant in Qatar with a buyback
2. CFCL Overseas Limited, Cayman Islands. by 104% and 19% to Rs 130.71 crore and Rs 73.13 crore
arrangement to import urea at a fixed price to augment its
3. India Steamship Pte. Limited, Singapore. respectively. The shipping division posted a profit of
domestic supply. Qatar has agreed to supply gas for the
4. Chambal Biotech Pvt. Limited, Singapore. Rs 33.89 crore, which was 28% higher compared to the
proposed urea plant if there is additional availability after
making an assessment in 2011-12. same period last year. However the textiles division
INDUSTRY PROFILE There is a moratorium on fresh supply of gas in Qatar till 2011- posted a loss of Rs 3.88 crore during the quarter under
12. India is keen to set up the urea plant on the lines of Oman review.
ROLE OF FERTILISERS INDUSTRY IN INDIAN ECONOMY : After the
announcement of the new investment and the pricing policy India Fertiliser Company. India is looking at a joint venture with q FINANCIAL PERFORMANCE (TRAILING 4TH QUARTER) : The
by the Cabinet Committee on Economic Affairs (CCEA), the Qatar wherein both the countries will have 50 per cent equity Company achieved Net Sales of Rs. 4369.00 crores for the
industry awaits the speedy implementation of the scheme in each in the proposed plant. year ended 31st Dec 2008 as compared to Rs. 2610.00
order to reap the full benefit. Fresh green-field investments in OUTLOOK : The next major opportunity for the fertilizer sector crores during the previous year, with 40.26%
the sector will reduce the dependence on imports that will be gas from KG basin of Reliance Industries. Until then, the appreciation. The Company has slipped a Net Loss of
bridges the demand gap. However inadequate availability of outlook of the sector is maintained neutral. Rs.166.05 crores for the year ended 31st Dec 2008 as
natural gas and the pricing scenario continues to be a major (Source: Capital Line) compared to Rs.189.68 crores for the previous year, with
depreciation of 14.23%.
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MARKET DATA TECHNICAL ANALYSIS


Industry Fertilizers-Nitrogenous
Market Cap (as on 06/02/2009) Rs.1585.76 Chambal Fertilisers & Chemicals :-
52 week high / low 96 / 30 Chambal Ferilesers share price has made multiple top near Rs 95 & multiple bottoms around Rs 30 in the
BSE code & Group 500085 year 2008. Chambal fertilisers share price has been in consolidation mode since Sep 08, long term trend
NSE code CHAMBALFERT (200 DMA) is at Rs 51 which is falling, Medium term trend (50 DMA) is near Rs 40 which is moving
Face Value 10.00 sideways. If share price move above Rs 43 first target is around Rs 55 long term target is near Rs 95.
Free traded (No of Shares) 210209538
Listing BSE, NSE
Dividend% & Yield in 2008 18%, 3.61
Dividend% & Yield in 2007 18%, 5.71
Capital Employed in Mar. 2008 & 2007 3031.90 & 3052.09
Current Ratio in Mar. 2008 & 2007 0.84% & 0.74%
Debt Equity Ratio in Mar. 2008 & 2007 1.82% & 1.52%
Net worth in Mar. 2008 & 2007 1138.27&1022.12
Latest Book Value (Rs) 27.35
Beta 1.09
ISIN Code INE085A01013

SHARE HOLDING PATTERN


NON-PROMOTER
11%

INSTITUTIONAL
10%

PROMOTER
49%

FOREIGN
5%

PUBLIC & OTHERS


25%

CHAMBAL FERTILISERS AND CHEMICALS LTD (YEARWISE RATE OF GROWTH IN %)


Rate of Growth (%) 200803 200703 200603 200503 200403 AVG (%)

Net Worth 11.36 6.34 15.35 12.05 7.47 10.514

Sales 4.97 -5.77 2.23 20.64 17.17 7.848

PAT 34.85 -25.6 -7.94 76.52 39.87 23.54

M Cap 59.27 -19.95 34.28 59.63 34.53 33.552

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9364(-61) 2865(-10) 9300(+210) 2843(+63) ResearchReport LIST OF INVESTORS SERVICE CENTRES (ISC) :
1. CHENNAI : No. 3, G, 3rd Floor, Mandira Apartment, Raman Street, North Boag Road, T Nagar,
CHENNAI - 600 017. Tel. : (044) 39148836 / 35 Email : isc_chennai@bfsl.co.in
TECHNICAL ANALYSIS 2. HYDERABAD : Shop No-8,Ground Floor, "Meridian Plaza” No-6-3-853/1,Ameerpet, HYDERABAD - 500016.
Tel. : (040) 30726212 / 17/ 18 Email : isc_hyderabad@bfsl.co.in
Nifty :- 3. KOLKATTA : 16, India Exchange Place, Ground Floor, Room No.43, KOLKATTA - 700001.
Nifty opened the week at 2872 points & traded between 2752 to 2873 with a variation of 121 points Tel. : (033) 22313234 Email : isc_kolkatta@bfsl.co.in
i.e.4.2%. Nifty closed the week at 2843 with a net loss of 31 points for the week from the last 4 weeks 4. MUMBAI : Unit No.116, First Floor, Veena Chambers Co-Operative Society Ltd, Opposite to
Nifty has been moving in 2661 to 2886 a 225 points variation. Nifty break out from this range on downside Bombay Stock Exchange, Dalal Street, MUMBAI - 400001. Tel : (022) 30281931 / 935
will take Nifty to 2500 points breaks out on higher side above 2880 will take Nifty to 3050 to 3150 points. Email : isc_mumbai@bfsl.co.in
5. ARSIKERE : RS No. 2780, KJ Diamond Shopping Complex, Shanbogh Street, ARSIKERE - 573 103.
Tel. : (08174) 233283 Email : isc_arsikere@bfsl.co.in
6. CHIKMAGALUR : Sri Vasavi Multipurpose Souharda Sahakari Niyamitha Vasavi Complex, B.M. Sri Road,
CHIKMAGALUR - 577101. Tel. : (8262) 239554 Email : isc_chikmagalur@bfsl.co.in
7. CHITRADURGA : DCRM Complex, State Bank of India, APMC Road, CHITRADURGA - 577501.
Tel. : (08194) 220660 Email : isc_chitradurga@bfsl.co.in
8. DAVANAGERE : No. 66, 2A / 2B, 5th Cross, P.J. Extension, DAVANAGERE - 577 002.
Tel. : (08192) 234060 / 234061 Email : isc_davangere@bfsl.co.in
9. DHARWAD : G-13, Shree Banashankari Avenue, Opp NTTF Ramnagar, P.B. Road, DHARWAD - 580 001.
Tel. : (0836) 2444011 Email : isc_dharwad@bfsl.co.in
10. HASSAN : 1st Floor, Shantha Sundar Complex, Near Hotel Palika, R.C. Road,
HASSAN - 573201. Tel. : (08172) 232223 Email : isc_hassan@bfsl.co.in
11. HUBLI : II Floor, Varsha Complex, Behind Bhavani Arcade, Next to Corporation Bank,
HUBLI - 580 029. Tel. : (0836) 2250958 / 2355756 Email : isc_hubli@bfsl.co.in
12. MADIKERI : Ist Floor Gangothri Complex, College Road, MADIKERI - 571 201. Tel. : (08272) 228445
Email : isc_madikere@bfsl.co.in
13. MANGALORE : Essel Chambers, Second Floor, No. 136,137/2, Karangalpady, MANGALORE - 575 003.
Tel. : (0824) 2497170 / 2497180 Email : isc_mangalore@bfsl.co.in
14. MANDYA : No. 366/C, Opp old TalukOffice Bazar Street, MANDYA - 571401. Tel. : (082324) 402925
Email : isc_mandya@bfsl.co.in
15. MYSORE : No. 85, Ist Floor, 9th Main, 5th Cross, Saraswathipuram, MYSORE - 570 009.
Tel. : (0821) 2540525 / 2546702 Email : isc_mysore@bfsl.co.in
16. RANEBENNUR : No. 886, Kathare Building, Opp. Gupta Petrol Bunk, PB Road, RANEBENNUR - 581115.
Tel. : (08373) 263350 / 263351 Email : isc_ranebennur@bfsl.co.in
17. SHIMOGA : 1791, 2nd Parallel Road, Durgigudi, SHIMOGA - 577 201. Tel. : (08182) 277701
Email : isc_shimoga@bfsl.co.in
18. TUMKUR : “Sri Krishna” 1st Floor, BNP Compound, M.G. Road, TUMKUR - 572 101.
Tel. : (0816) 2254159 / 2254195 Email : isc_tumkur@bfsl.co.in

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