Company Report | Q4 FY11 Result Update

LONG TERM INVESTMENT CALL

13 May 2011 ACCUMULATE

Industry Fertilisers
Q4 FY11 Result Highlights
CMP (INR) 81
Target (INR) 91 Chambal Fertilisers & Chemicals Ltd (CHMB) posted Q4 FY11 result
Upside / Downside (%) 11 inline with Unicon estimates. Total Income grew by 17.6% YoY to INR
52 week High/Low (INR) 105 / 53 8,451mn.
Market Cap (INR MN) 33,580
3M Avg. Daily Volumes (‘000s) 3,997,630
P/E (FY12E) 9.8 Total consolidated income for FY11 rose by 37.6% YoY to INR
57,175mn on account of sharp increase in trading revenues (111% YoY).
Shareholding Pattern (%)
Fertiliser manufacturing and other segments grew slowly at 8% YoY
and 9% YoY respectively. Textile outpaced shipping with 15% YoY
growth compared to 3% YoY in struggling shipping segment. CHMB is
looking forward to restructure its shipping business. (Shipping and
textile segments together contributed 13% of the total income against
16% last year).

EBITDA dropped by 18.4% YoY to INR 1,216mn with 595bps fall in

Stock Performance EBITDA margin to 15%. Operating cost increased by 17.6% on back of

110
high input costs. Margins shrunk for manufactured fertilisers while

100
trading and shipping segments showed margin expansion in the

90
quarter.

80

70
Net profit grew by 37% YoY to INR 677mn on account of higher profit

60
from traded goods segment. Net profit margin also improved from

50
6.9% to 8.0% on YoY basis.
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J u ep o n
aJ eb a p y
a
M A S O N D F M A M
CHMB NSE Nifty
Outlook & Valuation
* Source: ACE Equity
CHMB would benefit from growing urea demand on back of healthy
Performance (%) monsoon season in 2011 as forecasted by GoI dept. Application of NBS
1M 3M 12M (Nutrient based subsidy) for urea would support sector growth,
CHMB -4.8 15.5 32.1 especially for CHMB. Changes in new investment policy would attract
NSE Nifty -3.8 4.8 8.4 investment in the sector and would allow CHMB to execute its
expansion plans (stated by its management). Restructuring of shipping
(INR Mn)
business would further bring traction in topline of the company.
Particulars Actual Estimates
Total Income 8451 8324
EBIDTA 1216 1348 Stock is trading at 9.8x its FY12E earnings. We recommend
Reported PAT 677 588 ACCUMULATE with a reduced price target of INR 91.
* Source: ACE Equity, Unicon Research

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@uniconindia.in
Standalone Financials
(INR Mn)
Q4 FY11 Q4 FY10 Y-o-Y Q3 FY11 Q-o-Q
Net Revenue 8,071 7,055 14.4 13,528 -40.3
Other Operating income 41 59 NA 60 NA
Net revenue & Other operating income 8,112 7,114 14.0 13,588 -40.3
Other income 338 72 366.8 115 193.6
Total Income 8,451 7,186 17.6 13,704 -38.3
Operating Exp. 6,897 5,624 22.6 11,290 -38.9
EBITDA 1,216 1,489 -18.4 2,299 -47.1
EBITDA (%) 15.0 20.9 -595 bps 16.9 -193 bps
Depreciation 652 621 5.1 667 -2.2
EBIT 901 941 -4.2 1,747 -48.4
EBIT (%) 10.7 13.1 -243 bps 12.7 -208 bps
Financial charges 219 229 -4.3 231 -4.9
PBT 682 712 -4.2 1,517 -55.0
Tax Provision 5 218 -97.8 442 -98.9
Tax Rate (%) 0.7 30.6 -2994 bps 29.2 -2846 bps
PAT 677 494 37.2 1,074 -37.0
Reported PAT 677 494 37.2 1,074 -37.0
Reported PAT (%) 8.0 6.9 114 bps 7.8 18 bps
EPS 1.6 1.2 37.0 2.6 -36.8
Source: Company, Unicon Research

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.

Email: wealthresearch@uniconindia.in
 Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

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