Chambal Fertilisers and Chemicals - Sector with structural change

The most worrying part is promoters frequently pledge and release the shares.with in 10 days of pledge release they again pledge the shares on from screenshot 10/09/2020.
Are the promoters clean ? why they have to keep pledging the shares

Also looks like Debt is not the burden as of now once the company gets the pending subsidy
Total Debt is 9613.77 subsidy outstanding is 5391.38 . if we deduct the subsidy from Total debt then the final debt is 4,222.39 crs …then D/E is around 1+.

I would think that The invest at CMP is safe

1 Like

This was from coromandel international Q4 FY-20

Let me now give a “Brief on the Subsidy Side.” Subsidy outstanding end of March 31
st was
Rs.2,316 crores. Last year the number was Rs.2,392 crores. The outstanding subsidy includes
approximately Rs.1,100 crores that has been claimed and pending with the government for
disbursal

Coromandel is also one of the biggest player in urea sector. Compared to coromandel why chambal has high Amount of subsidy pending from the govt ?

Because for Chambal - the subsidised urea portion is very high whereas for Coromandel the non-subsidies (other than urea products business) is very high and hence the difference.

2 Likes

Kharif demand quite strong up 5% YoY
25 percent drop in gas prices to also help bottomline.

2015339843PC_-Agriculture_Inputs_Q2FY21_Preview-_Oct_2020_20201005101342.pdf|attachment (307.8 KB)

Disc: invested in Chambal and UPL

1 Like

Actually, all bulk fertilizers are subsidised by Govt of India - be it Urea, DAP, NPKs or MOP. But the difference is that Urea is subsidised heavily, almost 70% of cost of production of urea is subsidy. Whereas non-Urea fertilizers, the subsidy element is around 30%. As Chambal’s sale majorly comprise Urea, its subsidy outstanding is higher relative to Coromandel.

5 Likes


This is Kharif 2020 fertilizer company-wise sale

3 Likes

Some shares are pledged to lender at Zuari Global (Zuari Agro’s holdco) for a loan taken on ZG’s balance sheet (You can see it mentioned there). The overhang of share pledge will go if unsustainable debt at Zuari Agro can be solved for. Given Mr. Poddar’s pedigree and relationship with financiers, you would expect him to tie-up financing

Good results from Chambal Fertilisers.

q2 fy 21 sales 3986 crores vs q2 fy 20 sales at 3550 cr.
q2 fy 21 pbit 640 cr vs q2 fy 21 pbit 381 crores.
q2 fy 21 Net profit 436 cr vs q2 fy 20 NP of 386 cr
q2 fy 21 eps 10.50 vs q2 fy 20 eps of 9.3

Interim dividend of Rs 3 declared.

Of more interest is the reduction in debt.

Long term debt at 3896 cr vs 4392 cr. Nearly 500 cr less
Short term debt at 3253 cr vs 4995 cr. Nearly 1750 cr less.

The working capital as expected has increased vastly due to lower cost of fuel. This can continue atleast till March 2021 (and beyond if gas prices remain low).

q2 fy 21 press release attached.

chambal q2 fy 21 press release.pdf (283.0 KB)

disc: invested.

13 Likes

Madhya Bharat Agro Products, a much smaller player, has reported a good set of numbers too.

And so has Khaitan Chemicals & Fertilizers (again, a very small player)

Disc: Have starter positions in Khaitan and Chambal

2 Likes

Growth % across fertilizers for Chambal is very impressive. It has doubled across DAP, NPK, and MOP while also registering a healthy lead in its core business Urea. Anyone has access to any recent comparative analysis between Coromandel International and Chambal? I need a recent one, have already gone through previous comparative studies. Thanks in advance.

2 Likes

1) Q3FY21 results

https://www.bseindia.com/xml-data/corpfiling/AttachLive/6bf3d3f0-722a-444a-a60a-29d2f2b01ca2.pdf

2) Management comment on the results - press release:

3) Change in Management (source)

We would like to inform you that Mr. Anil Kapoor, Managing Director of the Company is due for retirement upon completion of his tenure on April 15, 2021.

Mr. Gaurav Mathur (DIN: 07610237) is working as Whole Time Director designated as Joint Managing Director of the Company since January 6, 2020. The Board of Directors of the Company at its meeting held on February 04, 2021 has, inter-alia, approved appointment of Mr. Gaurav Mathur as Managing Director of the Company for a period from April 16, 2021 to January 05, 2025, subject to approval of the shareholders of the Company. Mr. Gaurav Mathur is not a relative of any other Director of the Company.

Brief Profile of Mr. Gaurav Mathur

Mr. Gaurav Mathur, aged about 52 years, is a chemical engineer from Indian Institute of Technology, Kanpur having more than 30 years of experience in the fields of Industrial Explosives, Specialty Chemicals, Coatings & Paints and Pharmaceutical Industries. Mr. Gaurav Mathur started his career in 1989 as a Management Trainee in the Explosives business with ICI India Limited (now AkzoNobel India Limited). He worked with ICI India Limited / AkzoNobel India Limited for around 27 years and held various senior executive positions in India and abroad such as Head of Research and Development - Decorative Paints, Global Manufacturing & Supply Chain Director, Global Director - Continuous Improvement & Strategic Initiatives, etc. Before joining the Company, he was working as Managing Director of TEVA API India Private Limited since September 2016 and heading Active Pharmaceutical Ingredient operations for Asia Pacific, Israel and Europe. Mr. Gaurav Mathur joined the Company with effect from January 06, 2020 as Whole Time Director designated as Joint Managing Director.

2 Likes

Per press release

The performance during the quarter ended December 31, 2020 was driven mainly by increase in
sales of Di‐Ammonium Phosphate (DAP) and NPK fertilisers with better margins, apart from
contribution of Urea and other agri‐inputs. For the quarter ended December 31, 2020, the Company
sold 4.57 lakh MT of DAP in comparison to 3.94 lakh MT of DAP sold during the corresponding
quarter of last year, registering a growth of 16%. All the three urea plants continued to operate at
optimal capacity.

With 16% volume growth in high margins product mix, revenue is flattish, would translate to other product realization have gone down.

Debt equity ratio is closer to 1.5 compared to 2.5ish earlier.

With subsidy amount reimbursement expedited, working capital heaviness should go down. Hopefully lighter balance sheet and some rerating. Need to see if this is one off or a trend that is sustainable.

  • current TTM pe ratio is under 8 and long term averages are 12 type.

Invested - tracking position.

Q4F21 and FY21 Result Update

(Audited Consolidated numbers in Crores)

Q4FY21 Q3FY21 Q4FY20 QoQ YoY
Revenue 1640.76 3872.64 1969.09 -57.63% -16.67%
Operating Profit 334 797 199 -58.1% +67.8%
OPM 20% 21% 10% - -
Net Profit 541.75 470.75 201.07 +15.08% +169.43%
EPS 10.76 11.32 4.75 -4.95% +126.53%
FY 2021 FY 2020 YoY Change
Revenue 12756.36 12312.51 +3.6%
Net Profit 1747.59 1225.56 +42.6%
EPS 39.76 29.47 +34.9%
Debt/Equity 0.75 2.94

Final dividend declared: 4.5 rs.

CMP: 223.60

Please note that the profit for this quarter includes an “Exceptional Items” amount of 337.89 Crores. Details of this item:

1 Like

I suppose March is a lean quarter for Chambal every year?

image

image

1 Like

Any Views on Chambal fertilizer acquisition of Zuari Global Limited share moved 4-5% down after the news, Zuari Global Limited making a loss is it a good move to buy the Zuari?

Adventz GroupZuari Acquisition

I found other midcap and smallcap hitting lower circuit today

This is a Release of Pledge disclosure, there is no acquisition. Today’s price fall is not related to this.

5 Likes

Thank you @Chandragupta

1 Like

Saw this in the paper today about acute DAP shortage. Does anyone have any insight into how this would relate to Chambal?

Disc: Invested, satellite stock in PF

1 Like

As we know chambal make urea and other methane related products so can now affect of Russia Ukraine war that will affect natural gas that is important for urea production may affect international price.

So will chambal will be a net beneficiary as Russian dependency is not there and can supply to different countries like Europe

3 Likes