Coromandel Worldwide: ‘Purchase’ with TP of Rs 1,030

CRIN’s general fertilizer volumes grew 11% YoY in FY21 on the again of 35%/20%/16% quantity development in urea/MOP/SSP.

On this notice, now we have analysed quantity development for Coromandel Worldwide (CRIN) and the fertiliser trade in FY21. Furthermore, now we have appeared on the market share pattern, there lease of subsidies, value hikes for DAP/NPKS, & quantity efficiency in 4QFY21. Listed here are the important thing insights.

General fertilizer trade volumes grew 8% YoY in FY21 on the again of 19% quantity development in MOP; NPKS and SSP volumes grew 17% every for FY21. Urea, which accounted for 53% of the fertiliser trade’s volumes, was up by 5% YoY in FY21. CRIN’s general fertilizer volumes grew 11% YoY in FY21 on the again of 35%/20%/16% quantity development in urea/MOP/SSP. NPKS volumes have been up 8%, whereas DAP volumes got here in flat. CRIN leads the market within the NPKS Fertiliser section and instructions market share of 23.1% (FY21). For CRIN, NPKS fashioned 58% of general volumes in FY21 – NPKS grew 8% v/s trade gross sales quantity development of 17%. Thus, CRIN misplaced 191bp market share in FY21. The highest six states, which cumulatively account for 97% of CRIN’s NPKS volumes, are Andhra Pradesh (33%), Telangana (29%), Karnataka (12%), Maharashtra (11%), West Bengal (8%), and Odisha (4%). Maharashtra – the biggest client of NPKS in India – accounts for 23% of India’s NPKS consumption. NPKS trade volumes in Maharashtra have been up 35%, whereas CRIN’s gross sales within the state have been largely in-line (-2%). Thus, robust NPKS quantity development in states whereby CRIN doesn’t have a major presence has impacted the corporate’s general market share. Moreover, the agency is more likely to generate CFO of Rs 41.3b in FY21, aided by the discharge of subsidies by the federal government. Thus, the agency’s capex plan can be a key monitorable, in our view. We count on a income/EBITDA/PAT CAGR of 8%/10%/13% over FY21–23E. We worth CRIN at 17x FY23E EPS to reach at TP of Rs 1,030. Preserve Purchase.

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