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ResearchReport 9364(-61) 2865(-10) 9300(+210) 2843(+63)

FINANCIALS OF CHAMBAL FERTILISERS AND CHEMICALS LTD

Trailing 4th Quarter Results-December 2007/2008
Amount in Crores

Particulars December 2008 December 2007 %Change

Net Sales 4369.00 2610.00 40.26
Other Income 96.13 96.06 0.07
Total Income
Expenditure
4465.04
3879.66
2706.69
2163.86
39.38
44.22
BgSE FINANCIALS LIMITED
Operating Profit 585.38 542.83 7.26
(A Subsidiary of Bangalore Stock Exchange Ltd)
Depreciation 211.20 185.05 12.38 51, Stock Exchange Towers, 1st Cross, J. C. Road, Bangalore - 560 027.
Interest 126.27 100.32 20.55 Phone : 41575234 / 35, 41575203 Fax : 41575232
Tax 114.22 91.25 20.11 visit us at : www.bfsl.co.in
Fringe Benefit Tax 1.31 1.15 12.21
Deferred Tax
Net Profit / Loss
(33.67)
166.05
(24.61)
189.68
(26.90)
(14.23)
Research Report
Equity 416.21 416.21 0.00 on
Reserves 749.84 496.66 33.76
CHAMBAL FERTILISERS AND CHEMICALS LTD
Earnings Per Share (EPS) 3.98 4.55 (14.32)
Cash Earning Per Share (CEPS) 9.06 9.00 0.66 Release Date: 09-02-2009
Face Value (Rs.) 10.00
PE Ratio 9.54
PC Ratio 4.19
Price as on 06/02/2009 38.00

CHAMBAL FERTILISERS AND CHEMICALS LTD (December 2007-2008)

5000 4369 4465

4000
RS IN CRORES

2610 2706
3000
2000
1000 542.82585.38 416.21 416.21
189.68166.05
0
OPE RAT I N G

E QU I T Y
I NCOME
N E T S AL E S

PROFI T
T OTA L

NE T
PROFI T

Series1
Series2
FINANCIALS INDICATARS

STATEMENT OF CAUTION: INVESTORS ARE ADVISED TO EXERCISE CAUTION AND INVEST IN PHASED
¿
This report is meant for private circulation only.
MANNER. ¿
The views expressed in this report are that of experts and not of BgSE Financials Ltd.
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ResearchReport 9364(-61)
CHAMBAL FERTILISERS AND CHEMICALS LTD
Price as on 06/02/2009 Rs. 38/-
COMPANY'S PROFILE
YEAR OF INCORPORATION : Chambal
Fertilisers and Chemicals Ltd was
incorporated in the year 1985 and was
promoted by Zuari Agro Chemicals. The
Company set up urea and ammonia
plant at Gadepan in Rajasthan. They
started commercial production in the
year 1994.
GLANCE ABOUT CHAMBAL & ITS MAJOR ACTIVITIES : The
Company has Three Divisions namely Agri-inputs, Shipping
and Textiles. The company is a diversified conglomerate
having interests in fertilizers, phosphoric acid, agri-inputs &
seeds, agri-biotechnology, textiles, information technology,
food processing and shipping. They are also having business
interest through subsidiaries and Joint Ventures in the areas of
software, power, and financial and insurance services and
has a phosphoric acid facility in the Kingdom of Morocco.
MAILSTONES : In the year 1997, the company entered into a
joint venture with Office Cherifien Des Phosphates, a
Moroccan Government company and Indo Maroc
Phosphore SA.
In the year 1998, the company promoted India Software
group, a software division which makes inroads into the
software business.
In the year 1999, the company acquires ITC Classic Home
Finance Ltd and renamed as Birla Home Finance Ltd.
In the year 2000, Birla Home Finance Ltd took on BHW Holding
AG of Germany, as 50:50 joint venture partner.
In the year 2001, the company acquired majority stake in
Novasoft Information Corporation of New Jersey to integrate
and broaden their IT service business.
In the year 2003, the company acquired 51% stake in Techino
Pty of Australia through a special purpose vehicle namely
Chambal Biotech Pvt Ltd, incorporated in Singapore.
During the year 2007-08, Chambal Infrastructure Ventures Ltd,
a wholly owned subsidiary incorporated two wholly owned
subsidiaries namely Chambal Energy (Chhattisgarh) Ltd and
Chambal Energy (Orissa) Ltd for taking up power projects in
the states of Chhattisgarh and Orissa respectively.
In April 25, 2008 the company had taken delivery of a new
Aframax Tanker namely M T Ratna Shruti from Hyundai Heavy
Industries Co Ltd, South Korea. Also, in June 9, 2008, they had
taken the delivery of another Aframax Tanker namely M T
Ratna Shradha.
SUBSIDIARIES :
1. Chambal Infrastructure Ventures Limited.
2. CFCL Overseas Limited, Cayman Islands.
3. India Steamship Pte. Limited, Singapore.
4. Chambal Biotech Pvt. Limited, Singapore.
INDUSTRY PROFILE
ROLE OF FERTILISERS INDUSTRY IN INDIAN ECONOMY : After the
announcement of the new investment and the pricing policy
by the Cabinet Committee on Economic Affairs (CCEA), the
industry awaits the speedy implementation of the scheme in
order to reap the full benefit. Fresh green-field investments in
the sector will reduce the dependence on imports that
bridges the demand gap. However inadequate availability of
natural gas and the pricing scenario continues to be a major
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2865(-10) 9300(+210) 2843(+63)
bottleneck for the industry. The industry faces a natural gas
shortage of 12 million metric standard cubic meters
(mmscmd). Natural gas is a cheaper feedstock for
manufacturing fertilizers as compared to Naphtha. Although
the prices of various inputs used by the industry have come
down significantly, the continuation of the subsidy payments in
the form of subsidy bonds is another major issue.
The industry has urged the government for reduction of
regulation of the industry and timely payment of subsidy in
cash. The industry also wants the subsidy bill to be raised to
over Rs 1,00,000 crore.
According to a study done by the Fertilizer Association of India
(FAI), The subsidy of about Rs 70,000 crore released so far in
2008-09 is grossly inadequate to meet the estimated need of
over Rs 1,00,000 crore.
Although the decline in global prices of raw materials could
have resulted in reduced subsidy requirement for the year, the
simultaneous depreciation in the value of rupee in comparison
to dollar has taken away most of the gains arising out of
reduction in international prices. The subsidy constituted 80%
of the total delivered cost, thus it needed to be released in
time.
FERTILIZERS SUPPLY : The fertilizer supply during the current year
has been adequately provided for by the Government of India
during the current year despite significant increase in
demand. The Government of India has fixed the target for
supply at about 28.8 million metric tonnes of Urea this year, out
of which about 15.8 million metric tonnes of Urea was made
available.
LATEST DEVELOPMENTS : The ministry of chemicals and fertilizers
has sought cooperation from the State governments to prevent
any illegal movement of fertilizer across the border.
Aries Agro, a specialty fertilizer manufacturing company, has
deferred the launch of a new production unit at Panvel in the
outskirts of Mumbai to March from the earlier schedule of
December. The Company has cited the slowdown in demand
for crop nutrients as the reason for deferring the commissioning
of the new plant with an annual capacity of 10,000 tonnes.
Chennai based Archean group is planning to set up a fertilizer
unit in Gujarat for a projected investment of Rs 1000 crore. The
group's subsidiary Jhakhau Salt has been allotted about
60,000 acres of land in Greater Rann of Kutch for the project
that will produce sulphate of potash (SOP) fertilizer from sea
bitterns.
The fertilizer ministry along with IFFCO plans to set-up 1.6 million
metric tonnes fertilizer plant in Qatar with a buyback
arrangement to import urea at a fixed price to augment its
domestic supply. Qatar has agreed to supply gas for the
proposed urea plant if there is additional availability after
making an assessment in 2011-12.
There is a moratorium on fresh supply of gas in Qatar till 2011-
12. India is keen to set up the urea plant on the lines of Oman
India Fertiliser Company. India is looking at a joint venture with
Qatar wherein both the countries will have 50 per cent equity
each in the proposed plant.
OUTLOOK : The next major opportunity for the fertilizer sector
will be gas from KG basin of Reliance Industries. Until then, the
outlook of the sector is maintained neutral.
(Source: Capital Line)
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9364(-61) 2865(-10) 9300(+210) 2843(+63) ResearchReport
HIGHLIGHTS RISK FACTORS
q
Chambal Fertilisers is a company in the K K Birla Group. q
MARKET RISK : The Company has significant quoted
Chambal was promoted by Zuari Industries Limited (ZIL) investments, which are exposed to fluctuations in stock
and its two hi-tech nitrogenous Fertiliser Plants- Gadepan-
prices. These investments represent a material portion of
I and Gadepan-II are located at Gadepan, Rajasthan,
India. the Company's business and are vulnerable to
fluctuations in the stock markets. Any decline in the
q INDIA'S LARGEST PRODUCER OF UREA : Chambal Fertilisers
prices of the Company's quoted investments may affect
and Chemicals Ltd is India's largest producer of Urea in
the Private sector. its financial position and the results of its operations.
q FINANCE : Chambal Fertilizer posted decent set of q
PRICE ESCALATION : Raw material price escalation & the
numbers during the third quarter ended December 2008
lag effect in passing these on to customers.
as compared to the same period last year. The top-line
growth was 54% at Rs 1,245.89 crore during the third q
COMPETITION RISK : Inability of the Companies to
quarter ended December 2008, primarily driven by the innovate may face intense competition affecting the
traded goods segment of the company where the
revenues; The Company encounters competition from
company trades in DAP, SSP and other fertilizer products local and international Companies.
and chemicals products. However the OPM fell by 300
bps to 15.1% during the quarter under review. Increase in q
FOREIGN CURRENCY EXCHANGE RISK : Company’s forex
traded goods contribution to the total revenue has transactions is crucial with different countries. So the
resulted in the cost of traded goods as a percentage of Currency exchange risks always one of the prominent
adjusted sales increasing by 1500 bps to 25.9% of risks in its business.
adjusted sales during the quarter.
q
BUSINESS RISK : Rapid changes in business and customer
SEGMENT RESULTS :
preferences require innovative solutions and services to
q MANUFACTURED FERTILIZERS : The revenue of
retain and improve market share in the challenging
manufactured fertilizer, which contributed 53% of the total
global economic environment, every business
revenue of the company during the quarter ended
organization is subject to the inherent risk of decline in
December 2008 increased by 17% to Rs 663.41 crore as
compared to the corresponding quarter of the previous business due to rapid technological change, evolving
year. The gross profit from this division increased by 2% to industry standards, changing client preferences and
Rs 94.76 crore. new product and service introductions.
q TRADED GOODS : The revenue from the traded goods also
q
TECHNOLOGY RISK : Achieving and sustaining constant
contributed significantly to the total revenue of the
growth depends on ability to adopt emerging
company during the quarter ended December 2008. The
technologies. In the current highly competitive
traded goods contributed 30% of the total revenue of the
company during the quarter ended December 2008. The environment, the technology is evolving rapidly making it
revenue increased by 212% to Rs 373.92 crore as imperative for every company to adopt and assimilate
compared to the same period last year. The division the changes in technology to enhance the quality and
however posted a loss of Rs 2.62 crore as compared to a scope of its offerings.
profit of Rs 10.11 crore during the corresponding previous
q
ECONOMIC CYCLE : The Indian economy has shown
year quarter.
sustained growth over the last several years. Any
q SHIPPING & TEXTILES : The Shipping and the textiles division
slowdown in economic growth could adversely affect the
also posted excellent growth in revenue during the
Industry/Company's business.
quarter though it contributed 11% and 6% respectively to
the total revenue of the company. The revenue increased
by 104% and 19% to Rs 130.71 crore and Rs 73.13 crore
respectively. The shipping division posted a profit of
Rs 33.89 crore, which was 28% higher compared to the
same period last year. However the textiles division
posted a loss of Rs 3.88 crore during the quarter under
review.
q FINANCIAL PERFORMANCE (TRAILING 4TH QUARTER) : The
Company achieved Net Sales of Rs. 4369.00 crores for the
year ended 31st Dec 2008 as compared to Rs. 2610.00
crores during the previous year, with 40.26%
appreciation. The Company has slipped a Net Loss of
Rs.166.05 crores for the year ended 31st Dec 2008 as
compared to Rs.189.68 crores for the previous year, with
depreciation of 14.23%.
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9364(-61) 2865(-10) 9300(+210) 2843(+63) ResearchReport ResearchReport 9364(-61) 2865(-10) 9300(+210) 2843(+63)

MARKET DATA TECHNICAL ANALYSIS

Industry Fertilizers-Nitrogenous
Market Cap (as on 06/02/2009) Rs.1585.76 Chambal Fertilisers & Chemicals :-
52 week high / low 96 / 30 Chambal Ferilesers share price has made multiple top near Rs 95 & multiple bottoms around Rs 30 in the
BSE code & Group 500085 year 2008. Chambal fertilisers share price has been in consolidation mode since Sep 08, long term trend
NSE code CHAMBALFERT (200 DMA) is at Rs 51 which is falling, Medium term trend (50 DMA) is near Rs 40 which is moving
Face Value 10.00 sideways. If share price move above Rs 43 first target is around Rs 55 long term target is near Rs 95.
Free traded (No of Shares) 210209538
Listing BSE, NSE
Dividend% & Yield in 2008 18%, 3.61
Dividend% & Yield in 2007 18%, 5.71
Capital Employed in Mar. 2008 & 2007 3031.90 & 3052.09
Current Ratio in Mar. 2008 & 2007 0.84% & 0.74%
Debt Equity Ratio in Mar. 2008 & 2007 1.82% & 1.52%
Net worth in Mar. 2008 & 2007 1138.27&1022.12
Latest Book Value (Rs) 27.35
Beta 1.09
ISIN Code INE085A01013

SHARE HOLDING PATTERN

NON-PROMOTER
11%

INSTITUTIONAL
10%

PROMOTER
49%

FOREIGN
5%

PUBLIC & OTHERS

25%

CHAMBAL FERTILISERS AND CHEMICALS LTD (YEARWISE RATE OF GROWTH IN %)

Rate of Growth (%) 200803 200703 200603 200503 200403 AVG (%)

Net Worth 11.36 6.34 15.35 12.05 7.47 10.514

Sales 4.97 -5.77 2.23 20.64 17.17 7.848

PAT 34.85 -25.6 -7.94 76.52 39.87 23.54

M Cap 59.27 -19.95 34.28 59.63 34.53 33.552

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9364(-61) 2865(-10) 9300(+210) 2843(+63) ResearchReport LIST OF INVESTORS SERVICE CENTRES (ISC) :
1. CHENNAI : No. 3, G, 3rd Floor, Mandira Apartment, Raman Street, North Boag Road, T Nagar,
CHENNAI - 600 017. Tel. : (044) 39148836 / 35 Email : isc_chennai@bfsl.co.in
TECHNICAL ANALYSIS 2. HYDERABAD : Shop No-8,Ground Floor, "Meridian Plaza” No-6-3-853/1,Ameerpet, HYDERABAD - 500016.
Tel. : (040) 30726212 / 17/ 18 Email : isc_hyderabad@bfsl.co.in
Nifty :- 3. KOLKATTA : 16, India Exchange Place, Ground Floor, Room No.43, KOLKATTA - 700001.
Nifty opened the week at 2872 points & traded between 2752 to 2873 with a variation of 121 points Tel. : (033) 22313234 Email : isc_kolkatta@bfsl.co.in
i.e.4.2%. Nifty closed the week at 2843 with a net loss of 31 points for the week from the last 4 weeks 4. MUMBAI : Unit No.116, First Floor, Veena Chambers Co-Operative Society Ltd, Opposite to
Nifty has been moving in 2661 to 2886 a 225 points variation. Nifty break out from this range on downside Bombay Stock Exchange, Dalal Street, MUMBAI - 400001. Tel : (022) 30281931 / 935
will take Nifty to 2500 points breaks out on higher side above 2880 will take Nifty to 3050 to 3150 points. Email : isc_mumbai@bfsl.co.in
5. ARSIKERE : RS No. 2780, KJ Diamond Shopping Complex, Shanbogh Street, ARSIKERE - 573 103.
Tel. : (08174) 233283 Email : isc_arsikere@bfsl.co.in
6. CHIKMAGALUR : Sri Vasavi Multipurpose Souharda Sahakari Niyamitha Vasavi Complex, B.M. Sri Road,
CHIKMAGALUR - 577101. Tel. : (8262) 239554 Email : isc_chikmagalur@bfsl.co.in
7. CHITRADURGA : DCRM Complex, State Bank of India, APMC Road, CHITRADURGA - 577501.
Tel. : (08194) 220660 Email : isc_chitradurga@bfsl.co.in
8. DAVANAGERE : No. 66, 2A / 2B, 5th Cross, P.J. Extension, DAVANAGERE - 577 002.
Tel. : (08192) 234060 / 234061 Email : isc_davangere@bfsl.co.in
9. DHARWAD : G-13, Shree Banashankari Avenue, Opp NTTF Ramnagar, P.B. Road, DHARWAD - 580 001.
Tel. : (0836) 2444011 Email : isc_dharwad@bfsl.co.in
10. HASSAN : 1st Floor, Shantha Sundar Complex, Near Hotel Palika, R.C. Road,
HASSAN - 573201. Tel. : (08172) 232223 Email : isc_hassan@bfsl.co.in
11. HUBLI : II Floor, Varsha Complex, Behind Bhavani Arcade, Next to Corporation Bank,
HUBLI - 580 029. Tel. : (0836) 2250958 / 2355756 Email : isc_hubli@bfsl.co.in
12. MADIKERI : Ist Floor Gangothri Complex, College Road, MADIKERI - 571 201. Tel. : (08272) 228445
Email : isc_madikere@bfsl.co.in
13. MANGALORE : Essel Chambers, Second Floor, No. 136,137/2, Karangalpady, MANGALORE - 575 003.
Tel. : (0824) 2497170 / 2497180 Email : isc_mangalore@bfsl.co.in
14. MANDYA : No. 366/C, Opp old TalukOffice Bazar Street, MANDYA - 571401. Tel. : (082324) 402925
Email : isc_mandya@bfsl.co.in
15. MYSORE : No. 85, Ist Floor, 9th Main, 5th Cross, Saraswathipuram, MYSORE - 570 009.
Tel. : (0821) 2540525 / 2546702 Email : isc_mysore@bfsl.co.in
16. RANEBENNUR : No. 886, Kathare Building, Opp. Gupta Petrol Bunk, PB Road, RANEBENNUR - 581115.
Tel. : (08373) 263350 / 263351 Email : isc_ranebennur@bfsl.co.in
17. SHIMOGA : 1791, 2nd Parallel Road, Durgigudi, SHIMOGA - 577 201. Tel. : (08182) 277701
Email : isc_shimoga@bfsl.co.in
18. TUMKUR : “Sri Krishna” 1st Floor, BNP Compound, M.G. Road, TUMKUR - 572 101.
Tel. : (0816) 2254159 / 2254195 Email : isc_tumkur@bfsl.co.in

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