BQ Prime's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BQ Prime's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Prabhudas Lilladher Report
We expect companies in our coverage universe to report revenue / Ebitda /profit after tax de-growth of 1%/10%/19% YoY (agrochemicals 4%/-11%/-26% YoY; fertilizers -8%/-5%/-5% YoY). Performance of agrochemical companies is likely to be muted (our estimate: -1% YoY revenue de-growth) primarily due to-
sluggish demand environment in both domestic and global markets;
higher carry-over inventory from last year (FY23) leaving limited room for further inventory push; and
provisions of high cost inventory amid falling raw material cost scenario.
Further, revenue decline in fertiliser companies is in-line with decrease in subsidy rates from the Government we expect overall volume growth to be in mid-single digits (largely led by higher marketing volumes) and profitability (Ebitdam/million tonne) to be lower YoY due to inferior product mix and further provisioning of high cost inventories amid falling raw material cost scenario.
We continue to maintain our cautious stance on the sector largely led by-
delayed monsoons with looming fears of El-Nino in H2 of the monsoon season (mid-august to September);
pressure on price realisations amid falling raw material cost scenario (particularly generic molecules); and
higher base of last year (for agrochemicals Q1 FY23/H1 FY23 revenue growth of +25%/+22% YoY respectively).
While, on the exports side lower demand in key geographies coupled with higher inventory pile-up is likely to keep near term performance under check. We continue to like PI Industries Ltd. in agrochemical space and Coromandel International Ltd. in fertiliser space.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
