Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Equity Bottom-Up

Chambal Fertilisers & Chemicals / Equity Bottom-Up

<p style="text-align: justify;"><a href="https://www.smartkarma.com/entities/chambal-fertilisers-chem" target="_blank" data-smartkarma-citation="entities:13473:1" rel="noopener">Chambal Fertilisers &amp; Chem (CHMB IN)</a> predominantly manufactures and markets urea. The company as on today has three large urea plants, while it also trades agri-products and other fertilizers such as di-ammonium phosphate (DAP), murate of potash (MOP) and NPK. The company, through one of its few subsidiaries also operates in the software industry in the US. Moreover, the company also operates through a joint venture in Morocco which is involved in the manufacturing of phosphoric acid.</p><p style="text-align: justify;">Chambal had reported decent F19 and Q3F20 numbers alongside healthy overall margins. The company witnessed a growth of 34.9% while the EBITDA stood at a high of 12.3% in F19. Its own manufactured product i.e. Urea constituted over 60% of the sales while the traded goods accounted for the remaining 39%. Besides, the company had commenced the production in its Gadepan-III urea plant in January this year and is already operating at 100% capacity bolstering the overall sales. However, on the other hand, there is minimal growth seen in the bottom line due to a one-time exceptional loss of INR 1.9bn recognized in the income statement. There are few areas of concern that open a window for a top-line growth threat. Key highlights are as follows:-</p>

Chambal Fertilisers &amp; Chem (CHMB IN) predominantly manufactures and markets urea. The company as on today has three large urea plants, while it also trades agri-products and other fertilizers such as di-ammonium phosphate (DAP), murate of potash (MOP) and NPK. The company, through one of its few subsidiaries also operates in the software industry in the US. Moreover, the company also operates through a joint venture in Morocco which is involved in the manufacturing of phosphoric acid.Chambal had reported decent F19 and Q3F20 numbers alongside healthy overall margins. The company witnessed a growth of 34.9% while the EBITDA stood at a high of 12.3% in F19. Its own manufactured product i.e. Urea constituted over 60% of the sales while the traded goods accounted for the remaining 39%. Besides, the company had commenced the production in its Gadepan-III urea plant in January this year and is already operating at 100% capacity bolstering the overall sales. However, on the other hand, there is minimal growth seen in the bottom line due to a one-time exceptional loss of INR 1.9bn recognized in the income statement. There are few areas of concern that open a window for a top-line growth threat. Key highlights are as follows:-

Chambal Fertilizers: Some Specks of Dirt on a Clean Road

India

Chambal Fertilisers and Chemicals Ltd. manufactures ammonia, urea, pesticides and other products for farming and other agricultural applications.  The Company also provides consulting services to farmers on their seeding programs. Chambal operates throughout India.

Chambal Fertilisers & Chemicals (CHMB IN)

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Chambal Fertilizers: Some Specks of Dirt on a Clean Road

Chambal Fertilisers & Chem (CHMB IN) predominantly manufactures and markets urea. The company as on today has three large urea plants, while it...

Nitin Mangal