Buy Coromandel Intern; target of Rs 404: Mehta Equities

4992 Investors following Coromandel Int. Share this News with them.

0

Like this story, share it with millions of investors on M3

Buy Coromandel Intern; target of Rs 404: Mehta Equities

Mehta Equities is bullish on Coromandel International (CIL) and has recommended buy rating on the stock with a target of Rs 404 in its December 2011 research report.

Post your opinion here

 

0

Tweet

Share on Tumblr

RELATED NEWS Buy Infosys; target Rs 3450: Arihant capital markets Automobile monthly sales update - Dec 11: GEPL Capital Hold Infosys; target Rs 2945: R K Global ALSO READ See previous views by Mehta Equities See what other Experts & Brokerages are saying about Coromandel Int See messages about Coromandel Int Coromandel Int BSE | NSE 01/06/12 Are Mutual Funds betting on Coromandel Int?

Mehta Equities is bullish on Coromandel International (CIL) and has recommended buy rating on the stock with a target of Rs 404 in its December 2011 research report.

"Coromandel International (CIL)  stands out to be the largest manufactures and marketer of a wide range in special Fertiliser segments. CIL manufactures phosphatic fertilisers making it a market leader and it is the second largest phosphatic fertiliser player in India. The company has dominant hold in southern India market making it a market leader in complex fertiliser segment."

"CIL hold a strong market position in manufacturing of complex fertilizer. It is poised to be the biggest beneficiary in the complex fertiliser space in India through the NBS policy. The company products are based upon the new Nutrient Based Subsidy policy making CIL more competitive in product segment. The products of CIL are sold under very strong brands enabling its brand equity valuation to be very high in the market. Its fertilisers are sold under brand names - Gromor, Paramfos, Parry Gold, Parry Super and Godavari. These product brands increases the market of CIL. The strategic partnerships with leading companies across the globe for raw materials, coupled with its high efficiency plants, enables it to be a cost leader in domestic complex fertilisers. Continued supply of required raw materials at competitive international prices, technical know-how's will improve the operating cost & advantageous over its peers."

"CIL has a wide distribution network of product marketing through its 423 Retail outlet. These outlets besides providing complete range of farm products they also provide information on crop cultivation, pest management recommendation, symptoms identification details to the farmers. This enables the company to build strong relationships with the farmers and improves the cultivation of crops. Acquisition of entire promoter share (42.2%) of SOL and going for an open offer of up to 31% will increase the non-subsidy business of CIL. Its new plants of WSF and organic manure segment will reduce CIL's dependency on subsidy based products, improving the profitability of the company."

"We believe CIL is a pure player in the promising Indian Agriculture industry. We are positive on the business outlook on the nutrient based complex fertiliser segment, and deep focus on developing non subsidy based (micronutrients/speciality fertilisers and composites) product segment. The change in fertilizer policy to NBS policy will improve the profitability of CIL's in complex fertiliser market. At the current market price of the stock is trading at a P/E multiple of about 12.1x, on FY12E earnings and 9.7x on FY13E earnings which seems to be a right time to reap the opportunity considering the above rationale. Hence we recommend investors to add it with the long term story," says Mehta Equities research report.

Bodies Corporate holding more than 50% in Indian cos

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

To read the full report click on the attachment