Goal: ₹2,103
CMP : ₹1,813
Coromandel Worldwide has reported better-than-expected Q3 throughout all parameters. Topline outperformance was led by 13 per cet higher-than-expected quantity progress within the P&Okay fertilizer phase at 1.13 million tonnes.
Non-subsidy enterprise grew 13 per cent y-o-y. EBITDA grew 102 per cent to ₹720 crore, led by 2.8x progress in EBITDA from subsidy enterprise to ₹500 crore. Profitability was bolstered by greater quantity progress and spiked manufacturing of phosphoric acid and sulphuric acid (led by resumption at Ennore plant and better acid costs). EBITDA per tonne rose 209 per cent y-o-y for the subsidy enterprise (all fertilizers besides urea thought-about for calculation).
We stay structurally constructive on Coromandel Worldwide on the again of aggressive funding plans throughout enterprise segments, rising profitability within the core fertilizer enterprise and rising free cashflow (after assembly capex requirement).
Submit elevation of Sankarasubramanian on the helm of affairs, progress visibility throughout all enterprise segments and sub-segments has improved considerably, pushed by administration’s plan to scale up these segments. Whereas the corporate continues on the trail to realize these progress targets, money accumulation will even enhance as annual money technology will outweigh deployments in growth tasks.
We revise Coromandel Worldwide to Accumulate from Purchase with TP raised to ₹2,103 (from ₹2,041).
