Tuesday, April 24, 2012

>Coromandel International Ltd- Q4 FY2012 Result

Coromandel International Ltd (CIL), a Muragappa Group company is engaged in fertilizer, pesticides, speciality nutrients, farm mechanization and life style products businesses. On 23rd April 2012, CIL announced its Q4 FY12 and FY12 results. The consolidated result includes the audited results of company’s subsidiaries/JV’s/Associate concerns namely Parry Chemicals Ltd, Coromandel Brasil Limitada, Tunisian Indian Fertiliser SA, Mauritius ltd, Coromandel Getax Phosphates Pte Ltd, Coromandel SQM (India) Private Ltd and consolidated results of Sabero Organics Gujarat Ltd and its subsidiaries. A glimpse of the company’s consolidated Q4 FY2012 results is as follows:

The revenue increased by 133% and 30% on quarterly y-o-y and annual basis respectively. The top line growth was driven by 994% higher subsidy income on quarterly yoy basis and higher volume sales through the push selling method to the dealers by giving higher commissions and credits. The operating profit margin (OPM) of FY12 (annual) declined by 293 basis points despite 312 basis points OPM rise on Q4 FY12 due to the increased raw material prices, international fertilizer prices and currency volatility. Furthermore, the Net Profit Margin dropped by 374 basis points and 269 basis points on y-o-y quarterly and annual basis respectively.

The Board of Directors have recommended final dividend of INR 3 per share on the face value of INR 1 per share.

View: We are having a long term positive view about the company as price of key raw materials like phosphoric acid, ammonia and sulphur jump down by around 11%, 30% and 14% respectively which is likely to increase margins. In addition to that, increasing number of retail stores is likely to boost company’s profitability. Moreover, by acquisition of 74.57% equity stake of Sabero Organics, CIL enhanced its product portfolio.