After the board approved the voluntary liquidation of its wholly-owned subsidiary Sabero Europe B.V., shares fell by 10 per cent to Rs 875.95 on the BSE in Wednesday s trade on profit booking.
The board on May 25, 2022 approved the voluntary liquidation of Sabero Europe B.V., a wholly-owned subsidiary of the company in the Netherlands, as per the applicable laws of the Netherlands. In an exchange filing, Coromandel said that the subsidiary is not a material subsidiary of the company.
The company said that Sabero Europe B.V., which is the wholly-owned subsidiary of the company in the Netherlands, has not been involved in any business operations and has no plans to undertake any business operations in the future.
On May 9, 2022, the stock was trading 8 per cent lower at Rs 893, as opposed to a 0.22 per cent decline in the stock.
In the past month, the stock has outperformed the market by 17 per cent since yesterday, after Coromandel reported better than expected operating performance, despite rising input costs, control on fixed costs, better outsourcing of raw material, and better capacity utilization.
The profit after tax grew 17 per cent YoY at Rs 156 crore, up from a 50 per cent rise in total income at Rs 4,294 crore in the previous year.
The largest private sector phosphatic fertilizer manufacturer in India is located in India. The implementation of the NBS scheme in India is one of the biggest beneficiaries of the complex fertiliser space.
Analysts at HDFC Securities believe that the company should benefit from the debottlenecking of the phosphoric acid plant and increased share of newly-launched, high margin, crop protection products in FY 23 and that input cost headwinds are likely to persist in the medium term.
Coromandel continues to focus on the backward integration of phosphoric acid and sulphuric acid, which would help maintain profitability in the coming quarters. Four new products in the domestic market and three new molecule launches in technicals would drive growth, according to Crop Protection. The brokerage firm said in its result update that subsidies by the government have reduced working capital and boosted free cash flows as well as a reduction in debtors for the company.
Analysts believe that investors can add further dips to Rs by buying the stock in the band of Rs 926 -- 938. The 839 13 x FY 24 EEPS for base case target of Rs 1032 16 x FY 24 EEPS and bull case target of Rs 1096 17 x FY 24 EEPS over the next 2 quarters is set to be 839 13 x FY 24 EEPS.