Sharekhan's research report on Coromandel International
Q4FY2022 results were strong with 51% beat in PAT at Rs. 290 crore (up 86% y-o-y) due to sharp beat in EBITDA margin and higher other income. Revenue growth was also strong at 50% y-o-y to Rs. 4,227 crore (marginally ahead of our estimates). Revenue/EBIT from nutrients and other allied business grew strongly by 56%/92% y-o-y to Rs. 3,683 crore/Rs. 325 crore; EBIT margin was up 166 bps y-o-y to 8.8%. Crop protection revenue/EBIT up 8%/14% y-o-y, while EBIT increased 67 bps y-o-y. NBS rates for the upcoming Kharif season largely cover raw material cost rise and the same has improved the margin outlook (management has guided for fertiliser margin of Rs. 4,000-4,500/tonne). CPC business to grow at high-teen rates and new products to improve margin.
We retain Buy on the stock with an unchanged PT of Rs. 1,070. Cash balance of Rs. 1,753 crore provides scope for inorganic growth and the same could accelerate growth in the CPC business. The stock trades at 15.5x/13.4x its FY2023E/FY2024E EPS.