Sharekhan has given Buy recommendation for Coromandel International with a target price of Rs. 1070 in its research report issued on Jul 27, 2021
Sharekhan’s research report on Coromandel International
For Q1FY2022, Coromandel International Limited’s PAT stood at Rs. 338 crore, up 34.8% y-o-y, and was 19% above our estimate, led by beat in OPM at 13.2% and higher other income. Revenue growth of 14% y-o-y was marginally above our estimate of 12.6% y-o-y growth. Strong margin performance was led by higher gross margin at 30.7% (up 170 bps and beat of 211 bps versus our estimate), supported by sharp hike in fertiliser subsidy on DAP, inventory gains, and benefit of backward integration. Fertiliser margin guidance of Rs. 4,000-4,250/tonne is encouraging (given high RM price) and would be aided by backward integration and recent price hike taken for some NPK grades. Double-digit growth outlook for CPC business to be supported by new generation products (launched six new products in June 2021 with one 9/(3) product registration).