Buy Coromandel International; target of Rs 821: Geojit

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Geojit's research report on Coromandel International

Coromandel International (CRIN) is one of the leading private sector fertilizer producers in the country with significant presence in South India. They are one of the leading producers of NPK and SSP grade fertilizers. Q4FY20 revenues grew by 9% YoY, led by 7% growth in Nutrient and other allied business and 22% growth in crop protection business (CPC). During the year EBITDA margins grew to 13.2% vs 10.9% in FY19 as increase in sale of high margin complex fertilizers, debottlenecking of plants and soft raw material prices aided margin expansion.

Outlook

The Company expects the recent ban on pesticides to be overturned, CRIN sells 4 out of the 27 molecules banned With the expectation of a normal monsoon, backward integration and new launches, we expect net profit CAGR of 12% over FY20-FY22E Hence we recommend a "Buy" and value CRIN at 18x FY22E EPS with a target of Rs.821.

For all recommendations report, click here

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