Buy Coromandel International: Firstcall Research

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Buy Coromandel International: Firstcall Research

Firstcall Research is bullish on Coromandel International and has recommended buy rating on the stock with a target of Rs 360 in its August 23, 2011 research report.

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Firstcall Research is bullish on Coromandel International and has recommended buy rating on the stock with a target of Rs 360 in its August 23, 2011 research report.

"Coromandel International Limited is in the business segments of Fertilisers, Speciality Nutrients, Crop Protection and Retail. The Company is manufactures a wide range of fertilisers and markets around 2.9 million tons making it a leader in its addressable markets and the second largest phosphatic fertiliser player in India. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 22% over 2010 to 2013E respectively. Coromandel is the second largest manufacturer of Malathion and only the second manufacturer of Phenthoate. The Company has signed an agreement with Qatar Fertiliser Company (QAFCO) for supply of Urea. Coromandel International Limited has signed definitive share purchase agreement to acquire promoter's stake in 'Sabero Organics Gujarat Limited. During the quarter, the company has reported Net Profit decreased to Rs.1593.50 million from Rs.1214.50 million in previous year same quarter."

"Coromandel International Ltd disclosed results for the quarter ended June 2011. Net sales for the quarter moved up 16% to Rs.17956.70 million as compared to Rs.15528.20 million during the corresponding quarter last year. During the quarter, the company has reported Net Profit increased to Rs.1593.50 million from Rs.1214.50 million in previous year same quarter. The Basic EPS of the company stood at Rs.5.65 for the quarter ended June 2011."

"At the current market price of Rs.318.00, the stock is trading at 11.74 x FY12E and 10.67 x FY13E respectively. Price to Book Value of the stock is expected to be at 3.36 x and 2.56 x respectively for FY12E and FY13E. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.27.08 and Rs.29.80 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 13% and 22% over 2010 to 2013E respectively. Coromandel is the second largest manufacturer of Malathion and only the second manufacturer of Phenthoate. The Company has signed an agreement with Qatar Fertiliser Company (QAFCO) for supply of Urea. Coromandel International Limited has signed definitive share purchase agreement to acquire promoters stake in 'Sabero Organics Gujarat Limited. During the quarter, the company has reported Net Profit decreased to Rs.1593.50 million from Rs.1214.50 million in previous year same quarter.   On the basis of EV/EBITDA, the stock trades at 7.63 x for FY12E and 7.01 x for FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 360 for Medium to Long term investment," says Firstcall research report.

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To read the full report click on the attachment