Agri & Chemical sector results preview for Mar FY12: Emkay

Emkay Global Financial Services has come with its quarterly earning estimates on agri inputs & chemicals sector for March 2012. According to the research firm, the agri input & chemical sector to report topline growth of 23%yoy and APAT growth of 16% yoy for Q4FY12.

EBITDA margin is likely to contract by 110bps yoy to 15.5%. Chambal Fertilisers is likely to benefit from higher IPP linked production. Excl. Chambal, revenues are likely to increase by 20% yoy while APAT is likely to increase by mere 2%.

• Chemical prices remain stable however rising crude prices may have adverse impact on chemical margins.
• We maintain our cautious outlook on the sector. Chambal Fertiliser (to benefit from higher IPP linked production in Q4) & Deepak Fertiliser (attractive valuations) remain our preferred pick.
  

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