Buy Coromandel International; target of Rs 1180: Motilal Oswal

Motilal Oswal's research report on Coromandel International

CRIN’s operating performance beat our estimate, largely led by strong volume growth of 21% YoY in total manufactured phosphatic fertilizer (DAP & NPK) to 0.91MMT (est. 0.83MMT) and better EBITDA/MT. Better margins were on account of backward integration, better outsourcing of raw materials, and favorable agricultural environment in most of its key operating markets.

Outlook

Factoring in strong 3QFY23 operating performance, we raise our EBITDA estimates for FY23/FY24/FY25 by 6%/5%/7%, respectively, on improving EBIDTA/MT of fertilizer business. We value the stock at 16x Dec’24 EPS to arrive at our TP of INR1,180. We reiterate our Buy rating on the stock.