Accumulate Chambal Fertilisers - Emkay

Reco: ACCUMULATE
CMP: Rs 79
Target Price: Rs 98

Operating results – better than estimates

Results were above est with APAT of Rs 862mn (adjusted for deferred tax liability in shipping of Rs 929mn) -5% yoy, sales Rs 18 bn, +32% yoy. Reported PAT stood at loss of Rs 12mn.

Shift from tonnage tax in shipping to normal tax regime to reduce tax rates under weak environment resulted in deferred tax liability of Rs 929mn in Q3FY12.

All segment results were encouraging while trading margins at 6% (EBIT Rs 482mn) was positive surprise. Lower losses in textile and shipping too contributed to higher profit.

Change in tax policies may reduce effective tax rates by 4-5% depending on shipping business performance. Maintain FY12/FY13 est at Rs 9.0 / 8.9 and reiterate Accumulate.

Source : Equity Bulls

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