Coromandel International - Concerns receding; Upgrade to Accumulate - Emkay

Reco: ACCUMULATE
CMP: Rs 280
Target Price: Rs 340

- Q2 results disappointed due to lower margins. EBITDA margins stood at 9.2% (-460bps yoy/-210bps qoq). APAT at Rs 1.54bn, -41% yoy has been adjusted for Rs 1bn subsidy inc

- Though Q2FY13 faced multiple headwinds, we believe near-term outlook has improved. Increase in agri-produce prices, improved rabi outlook has boosted farmers' sentiments

- Kakinada expansion & TIFERT commissioning are likely to materialize from Q3FY13. Sabero posted profit after six consecutive quarters of losses

- Trim FY13 EPS by 13% to Rs 20.7 to reflect lower margins. However, with improvement in demand outlook, receding cost pressures we upgrade stock to Accu (from Hold) with target of Rs 340 (from Rs 271) based on 12x FY14 earnings

Source : Equity Bulls

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