Good monsoon to turn the tide.
Coromandel International Limited (Coromandel) is India’s second largest Phosphatic fertilizer player. Coromandel manufactures a wide range of fertilizers and markets around 3.4mn tons making it a leader in its addressable markets. It is also engaged in the business of other farm inputs comprising of crop protection, specialty nutrients and organic compost.
Valuation & View
We expect revenue and PAT to grow at a CAGR of 5.4% & 34.3% respectively over FY16-18E. Further, EBITDA margin is expected to improve by 180bps on account of rising contribution from non-subsidy business of crop protection chemicals & specialty nutrients coupled with increasing capacity utilization for fertilizers. Hence, we initiate Coromandel with a BUY rating with a TP of Rs.312 based on 15x FY18E EPS.
Research Report Coromandel International Ltd.
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