Moneycontrol
Feb 14, 2017 06:05 PM IST | Source: Moneycontrol.com

Buy Chambal Fertilisers; target of Rs 100: HDFC Securities

HDFC Securities is bullish on Chambal Fertilisers has recommended buy rating on the stock with a target price of Rs 100 in its research report dated February 10, 2017.

Buy Chambal Fertilisers; target of Rs 100: HDFC Securities


HDFC Securities' research report on Chambal Fertilisers


Chambal Fertilisers (CHMB) reported revenues of Rs 24.3bn (-14% YoY) in 3QFY17, mainly led by lower realisations from the fertiliser segment. Gross margins stood at 31.2% (-435 bps), owing to a maintenance shutdown of 31 days in one urea unit, and muted profits from the shipping segment.


Outlook


CHMB is putting up a new urea facility of 1.3mTPA (capex $ 0.9bn, on-stream by Jan-19). RoE from this will be in the 12-20% range, based on the gas price and IPP of urea. Maintain BUY with a TP of Rs 100/sh (10x 12 months rolling fwd EPS).

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