Reduce Coromandel International; target of Rs 676: Prabhudas Lilladher

Prabhudas Lilladher's research report on Coromandel International

CRIN reported inline set of results with 5% decline in topline (PLe (5%)), 18% EBITDA growth (PLe 16%) and 17% increase in PAT (PLe 12%) but the segmental margin expansion was higher than anticipated in both segments. Sales & EBITDA mix stood at 86% & 84% respectively for Nutrient segment. CP segment is consistent on its structural growth trajectory with 25% & 66% growth in topline & profits respectively. Despite strong underlying demand in fertilisers, it will be a herculean task for CRIN to clock volume growth in 2H due to high base and its own capacity constraints.

Outlook

RM cost inflation may also reflect in financials by way of gross margin pressure 4Q onwards. Maintain reduce with a target price of Rs676 based on 15x Sep’22 EPS of Rs45.

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