CMP: 503.

15 APR 12th, 2018

ZUARI AGRO CHEMICALS LIMITED
ISIN:
Result Update (PARENT BASIS): Q3 FY18 Overweight
INE840M01016
Index Details
SYNOPSIS
Stock Data
Sector Fertilizers Zuari Agro Chemicals Limited is a fertilizer
BSE Code 534742 company. The Company is engaged in the
Face Value 10.00 manufacture, sale and trading of fertilizers and
52wk. High / Low (Rs.) 689.45/336.00
seeds.
Volume (2wk. Avg.) 9494
Market Cap (Rs. in mn.) 21162.49 During Q3 FY18, the company’s net profit jumps to
Annual Estimated Results(A*: Actual / E*: Estimated) Rs. 480.20 mn as against Rs. 43.20 mn in the
Years(Rs. In mn) FY17A FY18E FY19E corresponding quarter ending of previous year.
Net Sales 39325.00 47424.01 53114.89 Revenue for the 3rd quarter stood at Rs.14343.00 mn
EBITDA 4208.50 4773.26 5389.56 from Rs. 9847.40 mn, when compared with the prior
Net Profit 195.90 1070.22 1199.59
year period, up by 45.65%.
EPS 4.66 25.45 28.52
P/E 108.03 19.77 17.64 For the Q3 FY18, EBITDA stood at Rs. 1435.00 mn

Shareholding Pattern (%) as against Rs. 971.00 mn in the corresponding

period of the previous year.
As on Dec 2017 As on Sep 2017
During Q3 FY18, Profit before tax grew by
Promoter 66.08 66.08
826.97% and stood at Rs. 529.30 mn against Rs.
Public 33.92 33.92 57.10 mn in Q3 FY17.
Others -- --
EPS of the company stood at Rs. 11.42 a share
1 Year Comparative Graph during the quarter, as against Rs. 1.03 per share over
previous year period.

During the nine month ended FY18, Net sales

increased by 13.17% to Rs. 35323.10 mn from Rs.
31212.00 mn in the nine months ended FY17.

Operating Profit of the company is expected to grow

at a CAGR of 19% over 2016 to 2019E.
ZUARI AGRO CHEMICALS LTD S&P BSE SENSEX

PEER GROUPS CMP MARKET CAP EPS(TTM) P/E (X)(TTM) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. In mn. (Rs.) Ratio Ratio (%)
Zuari Agro Chemicals Ltd. 503.15 21162.49 25.80 19.50 2.57 10.00
Coromandel International Ltd. 527.00 154086.10 25.17 20.94 5.48 500.00
Gujarat State Fertilizers & Chemicals Ltd 124.20 49490.90 12.71 9.77 0.75 110.00
National Fertilizers Ltd 58.50 28698.80 4.77 12.26 1.57 8.50

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
QUARTERLY HIGHLIGHTS (PARENT BASIS)

Results updates- Q3 FY18,

(Rs. In millions) Dec-17 Dec-16 % Change

Revenue 14343.00 9847.40 45.65%

Net Profit 480.20 43.20 1011.57%

EPS 11.42 1.03 1011.57%

EBIDTA 1435.00 971.00 47.79%

Revenue for the 3rd quarter increased by 45.65% to Rs. 14343.00 million from Rs. 9847.40 million, when compared with
the prior year period. EBIDTA is Rs. 1435.00 million as against Rs. 971.00 million in the corresponding period of the
previous year. During Q3 FY18, net profit was Rs. 480.20 million from Rs. 43.20 million in the corresponding quarter of
previous year. The company has reported earnings per share stood at Rs. 11.42 as compared to Rs. 1.03 per share over
previous year period.

Break up of Expenditure

Value in Rs. Million

Break up of
Expenditure
%
Q3 FY18 Q3 FY17
Chnge
Cost of Materials
5771.80 4914.50 17%
Consumed
Purchase of Stock in
3474.70 1684.70 106%
Trade
Employee Benefit
236.50 232.10 2%
Expenses
Depreciation&
Amortization 107.70 98.20 10%
Expenses
Power Fuel & Water 672.40 589.20 14%

Outward Freight 1207.20 858.60 41%

Other Expenses 382.40 465.40 -18%

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
COMPANY PROFILE

Zuari Agro Chemicals Limited is a fertilizer company. The Company is engaged in the manufacture, sale and trading of
fertilizers and seeds. The Company is also an importer of fertilizers and farm nutrients. It produces fertilizers of various
grades, along with seeds, pesticides, micro nutrients and specialty fertilizers. Its fertilizer plant has an annual installed
capacity of approximately 1,059,300 metric tons of fertilizer. It has a manufacturing facility at Goa, which consists of
over four plants. Its plants provide farmers with urea, diammonium phosphate (DAP), and nitrogen, phosphorous and
potassium (NPK)-based fertilizers. Its products are marketed under the Jai Kisaan brand. It has approximately 3,300
dealers and over 11,000 sub dealers that market various brands of fertilizer and other agri-inputs. It has marketing offices
that are spread over an area covering Andhra Pradesh and Tamil Nadu, among others. It operates in India and caters to the
needs of the domestic market.

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)

Balance Sheet as of March 31, 2016 -2019E

FY16A FY17A FY18E FY19E
ASSETS
1) Non-Current Assets
a) Property, plant and equipment 3674.60 3726.20 4061.56 4264.64
b) Capital Work in Progress 888.40 1292.00 1201.56 1237.61
c) Other Intangible Assets 19.40 15.50 17.67 19.44
d) Intangible Assets Under Development 1.50 1.90 1.96 2.11
e) Financial Assets
i) Investments 3705.60 4474.00 4384.52 4529.21
ii) Loans 3743.90 3166.10 5414.03 5684.73
iii) Other Financial Assets 1210.00 0.10 0.11 0.11
f) Deferred Tax Assets (net) 136.20 86.00 39.56 36.40
g) Other Non Current Assets 175.70 541.80 498.46 528.36
h) Income tax Assets(net) 323.80 567.10 470.69 494.23
Sub - Total Non- Current Assets 13879.10 13870.70 15619.42 16302.60
2) Current Assets
a) Inventories 4243.70 3746.90 7194.05 8129.27
b) Financial assets
i) Investments 0.00 0.00 0.00 0.00
ii) Trade Receivables 27066.70 21331.00 19199.93 19268.09
iii) Cash and Cash equivalents 23.90 20.70 431.60 492.02
iv) Bank Balances other than Cash 1.80 1.80 11.77 18.25
v) Loans & Advances 1815.50 3307.50 2778.30 2556.04
vi) Other Financial Assets 1793.60 2109.50 1919.65 1804.47
c) Other Current Assets 240.60 284.00 809.40 898.43
Sub - Total Current Assets 35185.80 30801.40 32344.69 33166.57
Total Assets (1+2) 49064.90 44672.10 47964.11 49469.17
EQUITY AND LIABILITIES
1) EQUITY
a) Equity Share Capital 420.60 420.60 420.60 420.60
b) Other Equity 7472.50 7807.10 8877.32 10076.91
Total Equity 7893.10 8227.70 9297.92 10497.51
2) Non Current Liabilities
a) Financial Liabilities
i) Long-Term Borrowings 2262.60 2140.40 1819.34 1710.18
ii) Other Financial Liabilities 19.50 13.50 4.73 4.35
b) Deferred tax liabilities (Net) 0.00 0.00 26.63 28.76
c) Long Term Provisions 11.70 4.50 4.95 5.35
Sub - Total Non Current Liabilities 2293.80 2158.40 1855.65 1748.63
3) Current Liabilities
a) Financial liabilities
i) Short-Term Borrowings 31055.80 24683.30 24189.63 22980.15
ii) Trade Payables 5109.50 5520.80 8621.32 9828.30
iii) Other Current Financial Liabilities 1699.00 2531.40 2328.89 2515.20
b) Other Current Liabilities 780.90 1317.20 1409.40 1606.72
c) Short-Term Provisions 232.80 233.30 261.30 292.65
Sub - Total Current Liabilities 38878.00 34286.00 36810.54 37223.03
Total Equity and Liabilities (1+2+3) 49064.90 44672.10 47964.11 49469.17
Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
Annual Profit & Loss Statement for the period of 2016 to 2019E

Value(Rs.in.mn) FY16A FY17A FY18E FY19E

Description 12m 12m 12m 12m
Net Sales 52801.10 39325.00 47424.01 53114.89
Other Income 1303.60 1301.70 865.37 917.29
Total Income 54104.70 40626.70 48289.38 54032.18
Expenditure -50883.50 -36418.20 -43516.12 -48642.62
Operating Profit 3221.20 4208.50 4773.26 5389.56
Interest -320.20 -2915.10 -2915.80 -3207.38
Gross profit 2901.00 1293.40 1857.46 2182.18
Depreciation -3006.80 -346.10 -412.43 -453.67
Exceptional items -260.90 -643.30 0.00 0.00
Profit Before Tax -366.70 304.00 1445.03 1728.51
Tax 276.40 -108.10 -374.80 -528.92
Net Profit -90.30 195.90 1070.22 1199.59
Equity capital 420.60 420.60 420.60 420.60
Reserves 7472.50 7807.10 8877.32 10076.91
Face value 10.00 10.00 10.00 10.00
EPS -2.15 4.66 25.45 28.52

Quarterly Profit & Loss Statement for the period of 30th Jun, 2017 to 31st Mar, 2018E

Value(Rs.in.mn) 30-June-17 30-Sep-17 31-Dec-17 31-Mar-18E

Description 3m 3m 3m 3m
Net sales 7066.80 13535.80 14343.00 12478.41
Other income 355.50 143.60 177.80 188.47
Total Income 7422.30 13679.40 14520.80 12666.88
Expenditure -6735.40 -12233.50 -13085.80 -11461.42
Operating profit 686.90 1445.90 1435.00 1205.46
Interest -594.40 -765.30 -798.00 -758.10
Gross profit 92.50 680.60 637.00 447.36
Depreciation -87.30 -106.50 -107.70 -110.93
Profit Before Tax 5.20 574.10 529.30 336.43
Tax -2.50 -210.50 -49.10 -112.70
Net Profit 2.70 363.60 480.20 223.72
Equity capital 420.60 420.60 420.60 420.60
Face value 10.00 10.00 10.00 10.00
EPS 0.06 8.64 11.42 5.32

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
Ratio Analysis

Particulars FY16A FY17 FY18E FY19E

EPS (Rs.) -2.15 4.66 25.45 28.52
EBITDA Margin (%) 6.10% 10.70% 10.07% 10.15%
PBT Margin (%) -0.69% 0.77% 3.05% 3.25%
PAT Margin (%) -0.17% 0.50% 2.26% 2.26%
P/E Ratio (x) -234.36 108.03 19.77 17.64
ROE (%) -1.14% 2.38% 11.51% 11.43%
ROCE (%) 0.52% 11.02% 12.35% 14.03%
Debt Equity Ratio 4.22 3.26 2.80 2.35
EV/EBITDA (x) 16.91 11.40 9.79 8.41
Book Value (Rs.) 187.66 195.62 221.06 249.58
P/BV 2.68 2.57 2.28 2.02

Charts

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
OUTLOOK AND CONCLUSION

 At the current market price of Rs. 503.15, the stock P/E ratio is at 19.77 x FY18E and 17.64 x FY19E respectively.

 Earning per share (EPS) of the company for the earnings for FY18E and FY19E is seen at Rs.25.45 and Rs. 28.52
Respectively.

 Operating profit of the company is expected to grow at a CAGR of 19% over 2016 to 2019E.

 On the basis of EV/EBITDA, the stock trades at 9.79 x for FY18E and 8.41 x for FY19E.

 Price to Book Value of the stock is expected to be at 2.28 x and 2.02 x for FY18E and FY19E respectively.

 Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
 Disclosure Section

The information and opinions in Firstcall Research was prepared by our analysts and it does not constitute an offer or
solicitation for the purchase or sale of any financial instrument including any companies scrips or this is not an official
confirmation of any transaction. The information contained herein is from publicly available secondary sources and data
or other secondary sources believed to be reliable but we do not represent that it is accurate or complete and it should not
be relied on as such. Firstcall Research or any of its affiliates shall not be in any way responsible for any loss or damage
that may arise to any person from any inadvertent error in the information contained in this report. Firstcall Research and/
or its affiliates and/or employees will not be liable for the recipients’ investment decision based on this document.

Analyst Certification

The following analysts hereby state that their views about the companies and sectors are on best effort basis to the best of
their knowledge. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts. The
analyst qualifications, sectors covered and their exposure if any are tabulated hereunder:

Exposure/Interest to
Sectorscompany/sector Under
Name of the Analyst Qualifications
CoveredCoverage in the Current
Report
Dr.C.V.S.L. Kameswari M.Sc, PGDCA, Pharma & No Interest/ Exposure
M.B.A, Diversified
Ph.D (Finance)
U. Janaki Rao M.B.A Capital No Interest/ Exposure
Goods
B. Anil Kumar M.B.A Auto, IT & No Interest/ Exposure
FMCG
M. Vijay M.B.A Diversified No Interest/ Exposure
V. Harini Priya M.B.A Diversified No Interest/ Exposure
MD. Naveed M.B.A Diversified No Interest/ Exposure
A. Bhikshapathi M.B.A Diversified No Interest/ Exposure

Important Disclosures on Subject Companies

In the next 3 months, neither Firstcall Research nor the Entity expects to receive or intends to seek compensation for any
services from the company under the current analytical research coverage. Within the last 12 months, Firstcall Research
has not received any compensation for its products and services from the company under the current coverage. Within the
last 12 months, Firstcall Research has not provided or is providing any services to, or has any client relationship with, the
company under current research coverage.

Within the last 12 months, Firstcall Research has neither provided or is providing any services to and/or in the past has not
entered into an agreement to provide services or does not have a client relationship with the company under the research
coverage.

Certain disclosures listed above are also for compliance with applicable regulations in various jurisdictions. Firstcall
Research does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, No-Weight and
Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all weights
used in Firstcall Research. In addition, since Firstcall Research contains more complete information concerning the
analyst's views, investors should carefully read Firstcall Research, in its entirety, and not infer the contents from the
weightages assigned alone. In any case, weightages (or research) should not be used or relied upon as investment advice.
Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
An investor's decision to buy or sell should depend on individual circumstances (such as the investor's own discretion, his
ability of understanding the dynamics, existing holdings) and other considerations.

Analyst Stock Weights

Overweight (O): The stock's total return is expected to exceed the average total return of the analyst's industry (or
industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months.

Equal-weight (E): The stock's total return is expected to be in line with the average total return of the analyst's industry
(or industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months.

No-weight (NR): Currently the analyst does not have adequate conviction about the stock's total return relative to the
average total return of the analyst's industry (or industry team's) coverage universe, on a risk-adjusted basis, over the next
12-18 months.

Underweight (U): The stock's total return is expected to be below the average total return of the analyst's industry (or
industry team's) coverage universe, on a risk-adjusted basis, over the next 12-18 months.

Unless otherwise specified, the weights included in Firstcall Research does not indicate any price targets. The statistical
summaries of Firstcall Research will only indicate the direction of the industry perception of the analyst and the
interpretations of analysts should be seen as statistical summaries of financial data of the companies with perceived
industry direction in terms of weights.

Firstcall Research may not be distributed to the public media or quoted or used by the public media without the express
written consent of Firstcall Research. The reports of Firstcall Research are for Information purposes only and is not to be
construed as a recommendation or a solicitation to trade in any securities/instruments. Firstcall Research is not a
brokerage and does not execute transactions for clients in the securities/instruments.

Firstcall Research - Overall Statement

S. No Particulars Remarks
1 Comments on general trends in the securities market Full Compliance in Place
2 Discussion is broad based and also broad based indices Full Compliance in Place
3 Commentaries on economic, political or market conditions Full Compliance in Place
4 Full Compliance in Place
Periodic reports or other communications not for public appearance
5 The reports are statistical summaries of financial data of the companies as and where Full Compliance in Place
applicable
6 Analysis relating to the sector concerned Full Compliance in Place
7 No material is for public appearance Full Compliance in Place
8 We are no intermediaries for anyone and neither our entity nor our analysts have any Full Compliance in Place
interests in the reports
9 Our reports are password protected and contain all the required applicable Full Compliance in Place
disclosures
10 Analysts as per the policy of the company are not entitled to take positions either for Full Compliance in Place
trading or long term in the analytical view that they form as a part of their work
11 Full Compliance in Place
No conflict of interest and analysts are expected to maintain strict adherence to the
company rules and regulations.

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved
12 Full Compliance in Place
As a matter of policy no analyst will be allowed to do personal trading or deal and
even if they do so they have to disclose the same to the company and take prior
approval of the company
13 Full Compliance in Place
Our entity or any analyst shall not provide any promise or assurance of any favorable
outcome based on their reports on industry, company or sector or group
14 Researchers maintain arms length/ Chinese wall distance from other employees of Full Compliance in Place
the entity
15 Full Compliance in Place
No analyst will be allowed to cover or do any research where he has financial interest
16 Our entity does not do any reports upon receiving any compensation from any Full Compliance in Place
company

Firstcall Research Provides

Industry Research on all the Sectors and Equity Research on Major Companies
Forming part of Listed and Unlisted Segments

For Further Details Contact:

Mobile No: 09959010555

E-mail: info@firstobjectindia.com
info@firstcallresearch.com
www.firstcallresearch.com

Document code: FOTL_120420186_3 Copyright © 2016 Firstobject Technologies Ltd. All rights reserved