Chambal Fertilisers and Chemicals Limited (CFCL) Q3 FY2025 Results
Value Pick Multibagger Stock to buy
Investment Summary
Market Cap: ₹ 22,256 Cr
Current Price: ₹ 556
High/Low: ₹ 575 / 331
Stock P/E: 13.8
Book Value: ₹ 205
Dividend Yield: 1.35%
ROCE: 20.2%
ROE: 17.0%
Face Value: ₹ 10.0
Debt: ₹ 99.4 Cr
Reserves: ₹ 7,803 Cr
Promoter Holding: 60.4%
Sales Growth (YoY): -11.0%
Profit Growth: 26.9%
Sales: ₹ 16,841 Cr
Operating Profit Margin: 14.8%
Q3 FY2025 Financial Performance
Revenue: ₹ 4,918 Cr (13% YoY increase)
EBITDA: ₹ 843 Cr (16% YoY increase)
PBT: ₹ 753 Cr (24% YoY increase)
PAT: ₹ 505 Cr (25% YoY increase)
Consolidated PAT: ₹ 534 Cr (16% YoY increase)
Qtr Sales Variation: 13.1%
3-Year Sales Growth: 12.2%
3-Year Profit Variation: -4.98%
Key Drivers
- Higher sales volume of Urea & P&K fertilisers
- Improved energy efficiency & production capacity
- Strong performance in Crop Protection Chemicals (CPC) & Speciality Nutrients (SN)
- Improved margins in joint venture IMACID Morocco
- Strong operational cash flows aiding balance sheet stability
Future Growth Plans & Expansion
1. Technical Ammonium Nitrate (TAN) Project
Investment: ₹ 1,645 Cr
Capacity: 2.4 Lakh MTPA
Amount spent till Dec 31, 2024: ₹ 466 Cr
Current Progress: Civil foundation, detail engineering & major structures near completion
Configuration Changes: Enable additional ammonia feed
Revised Completion Timeline: January 2026 (No cost escalation)
Strategic Rationale: Diversification into industrial chemicals, catering to mining & explosive industries
Revenue Contribution: Estimated annual revenue of ₹ 2,000+ Cr post-commissioning
2. Crop Protection Chemicals (CPC) & Speciality Nutrients (SN) Expansion
Quarterly Growth: 39%
YoY Growth (9 months): 38%
New Territories Revenue Growth: 141%
New Products Launched: 12 (weedicide, fungicide & insecticide)
Focus Areas: Biologicals (Mycorrhiza biofertilizers, bio-nematicides, bio-fungicides)
Revenue Target by FY26-27: ₹ 1,750 Cr (from ₹ 760 Cr in FY24)
Strategic Alliances: Collaborations with Japanese, US & European firms
New Market Entry: Africa & South-East Asia
3. CFCL-TERI Centre of Excellence
Collaboration: The Energy and Resources Institute (TERI)
Focus Areas: Sustainable agriculture solutions, nano-biotechnology, bio-stimulants & biopesticides
Alignment: PM PRANAAM scheme promoting biofertilizers
Goal: Reduce chemical fertilizer dependency by 20% over 5 years
4. Digital & Market Expansion Initiatives
Farmer Education: Seed to Harvest program
Support: ‘Hello Uttam Experts’ farmer call center
Domestic B2C Market Target: ₹ 10,500 Cr by FY26-27
Retail Expansion: Increased distributor network by 15% YoY
Competitive Landscape & Risks
Competitive Positioning
- Largest private Urea manufacturer in India
- Diversified portfolio covering Urea, P&K fertilisers, CPC & SN
- Strong farmer outreach programs enhancing brand loyalty
- Emerging Player in TAN Segment with competitive advantage
Key Risks
- Regulatory Dependence: Government pricing & subsidy policies impact margins
- Raw Material Volatility: Dependency on imported raw materials
- Delayed TAN Project Execution: Potential impact on future revenue projections
- Competition: Increasing market presence of domestic & international agrochemical players
- Environmental & ESG Concerns: Stricter pollution norms could impact manufacturing costs
Valuation & Investment Thesis
P/E Ratio: 13.8 (Fairly valued compared to peers)
ROE: 17.0%
ROCE: 20.2%
Debt: Low at ₹ 99.4 Cr
Dividend Yield: 1.35%
Urea Demand: Expected to remain steady
CPC & SN Growth: >20% CAGR over next 3 years
Long-term Goal: Market leadership in sustainable agrochemical solutions
Investment Verdict: Moderate Buy
- Strong fundamentals with diversified product portfolio
- Expansion in high-margin CPC & SN business is a key positive
- Risk: Dependency on government policies & regulatory changes
- Valuation: Fairly priced with scope for future growth
Disclaimer
This report is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence before making investment decisions. Stock market investments are subject to market risks. Past performance does not guarantee future results.
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