Nagarjuna fertilizers and chemicals limited sample report

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Company’s growth to be complimented by enhancing production capacity and developing new and innovative products

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Nagarjuna fertilizers and chemicals limited sample report

  1. 1. 1© This is a licensed product of Ken Research and should not be copied
  2. 2. 2© This is a licensed product of Ken Research and should not be copiedTABLE OF CONTENTS1. Executive Summary: Nagarjuna Fertilizers and Chemicals Limited2. Nagarjuna Fertilizers and Chemicals Limited Business Overview2.1. Corporate Timeline2.2. Major Investments in the Company Evolution2.3. Nagarjuna Fertilizers and Chemicals Limited Ownership Structure2.4. Nagarjuna Fertilizers and Chemicals Limited Organisational Structure2.5. Nagarjuna Fertilizers and Chemicals Limited Restructuring of the Company3. Nagarjuna Fertilizers and Chemicals Limited Product Portfolio3.1. Trading of Fertilizers and Seeds3.2. Manufacturing of Urea3.3. Agri-Information and Plant Management Services4. Nagarjuna Fertilizers and Chemicals Limited Financial and Valuation Analysis5. Nagarjuna Fertilizers and Chemicals Limited Analyst Recommendations6. Nagarjuna Fertilizers and Chemicals Limited SWOT Analysis7. Nagarjuna Fertilizers and Chemicals Limited Key Professionals7.1. Management Profile8. Macro Analysis of Fertilizer Industry8.1. Indian Fertilizers Industry Market Size, FY’2009-FY’20138.1.1. By Production and Consumption, FY’2009-FY’20138.1.2. By Value, FY’2009-FY’20138.2. Indian Fertilizers Industry Segmentation, FY’20128.2.1. By Inorganic and Organic Fertilizers, FY’20128.2.2. By Generic and Bio-Fertilizers, FY’2009-FY’20128.2.3. By Micronutrients and Macronutrients, FY’20128.3. Market Share of Major Players in Indian Fertilizer Industry, FY’2012
  3. 3. 3© This is a licensed product of Ken Research and should not be copied8.3.1. By Revenue, FY’20128.3.2. By Urea, FY’2011-FY’20128.3.3. By DAP, FY’20128.3.4. By Micronutrients, FY’20129. Nagarjuna Fertilizers and Chemicals Limited Competitive Analysis9.2. By Products Offered/ Revenue/ Business Strategy10. Nagarjuna Fertilizers and Chemicals Limited Management Outlook and FutureProjections10.1. Nagarjuna Fertilizers and Chemicals Limited Future Projections10.2. Nagarjuna Fertilizers and Chemicals Limited Financials Future Projections10.3. Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis11. Appendix11.1. Market Definitions11.2. Abbreviations11.3. Research Methodology11.4. Disclaimer
  4. 4. 4© This is a licensed product of Ken Research and should not be copiedLIST OF FIGURESFigure 1: Nagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011Figure 2: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure in Percentage as on31stMarch 2012Figure 3: Nagarjuna Fertilizers and Chemicals Limited Organizational StructureFigure 4: Nagarjuna Fertilizers and Chemicals Limited RestructuringFigure 5: Nagarjuna Fertilizers and Chemicals Limited Product PortfolioFigure 6: India Fertilizer Market Size on the Basis of Production and Consumption in ThousandTonnes, FY’2009-FY’2013Figure 7: India Fertilizer Industry Market Size by Revenue in INR Crore and Percentage Growthin the Indian Fertilizer Market, FY’2009-FY’2013Figure 8: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basisof Contribution in Percentage (%), FY’2012Figure 9: India Fertilizer Market Segmentation by Macronutrients and Micronutrients on theBasis of Contribution in Percentage (%), FY’2012Figure 10: Market Share of Leading Companies in Urea Fertilizer Market on the Basis ofProduction in Percentage (%), FY’2012Figure 11: Market Share of Leading Companies in DAP on the Basis of Production in India inPercentage (%), FY’2012Figure 12: Market Share of Leading Companies in Micronutrients on the Basis of Production inPercentage, FY’2012Figure 13: Nagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis ofRevenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017Figure 15: Non-linear Regression Analysis and Scatter Chart Based upon Indian FertilizersIndustry Market size, FY’2008-FY’2013
  5. 5. 5© This is a licensed product of Ken Research and should not be copiedLIST OF TABLESTable 1: Nagarjuna Fertilizers and Chemicals Limited Financial Summary on the Basis ofRevenue, Growth and Net Profit Margin in INR Crore and Percentage, FY’2009-FY’2013Table 2: Nagarjuna Fertilizers and Chemicals Limited Major Investments in CompanyEvaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INRCroreTable 3: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure, FY’2011 andFY’2012Table 4: Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded,FY’2011 and FY’2012Table 5: Nagarjuna Fertilizers and Chemicals Limited Products Offered on the basis ofSegmentation of Micro IrrigationTable 6: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis ofRevenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2009-2013Table 7: Financial Performance of Fertilizer Companies on the Basis of Revenue in INR Crore,FY’2008-LTM Year Ending 31st December 2012Table 8: Financial Performance of Fertilizer Companies on the Basis of EBITDA in INR Crore,FY’2008-LTM Year Ending 31st December 2012Table 9: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt andEnterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December2012Table 10: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples inINR Crore, Percentage and MultiplesTable 11: Nagarjuna Fertilizers and Chemicals Limited Board of Directors and ManagementProfileTable 12: Fertilizer Prices in India in INR per Ton, 2009-2012Table 13: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basisof Revenue in INR Crore, FY’2012Table 14: India Fertilizer Market Segmentation by Bio-fertilizers and Generic Fertilizers on theBasis of Production in Thousand Tonnes, FY’2009-FY’2012Table 15: India Fertilizer Market Segmentation by Bio-fertilizers and Generic on the Basis ofContribution in Percentage (%), FY’2009-FY’2012
  6. 6. 6© This is a licensed product of Ken Research and should not be copiedTable 16: Market Positioning of Major Players on the Basis of Revenue in INR Crore andPercentage, FY 2012Table 17: Leading Players in Urea Fertilizer Market on the Basis of Production in ThousandTonnes, FY’2011-FY’2012Table 18: Leading Players in DAP Fertilizer Market on the Basis of Production in ThousandTonnes, FY’2011-FY’2012Table 19: Company Profile of Major Competitors of Nagarjuna on the basis of Services Offered,Revenue and Business StrategiesTable 20: Nagarjuna Fertilizers and Chemicals Limited Balance Sheet, 2012-2015Table 21: Nagarjuna Fertilizers and Chemicals Limited Income Statement, 2012-2015Table 22: Nagarjuna Fertilizers and Chemicals Limited Cash Flow Statement, 2011-2015Table 23: Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis on the Basis of Liquidity,Asset Management, Profitability and Leverage Ratios in Multiple and Percentage, FY’2012-FY’2015Table 24: Regression Coefficients of the Nagarjuna Fertilizers and Chemicals LimitedTable 25: Regression Intercepts of the Nagarjuna Fertilizers and Chemicals Limited
  7. 7. 7© This is a licensed product of Ken Research and should not be copiedEXECUTIVE SUMMARY: NAGARJUNA FERTILIZERSAND CHEMICALS LIMITED (KAKINAND FERTILIZERS)Nagarjuna Fertilizers and Chemicals Limited is a flagship company of Nagarjuna Group. The company isamongst the key players of plant nutrients in the Indian fertilizer market. The company is a manufacturerand supplier of both micronutrients and macronutrients in India with a brand name of “Nagarjuna”. ..KeyDifferentiators In south India, the company has the distinction of being the single largestinvestment in the private sectorCompetition andPositioning Leading position in the Indian Fertilizers market with 4thrank in terms ofrevenues in FY’2012KeyDevelopments For the first time in FY’2012 the company installed automation microirrigation system and rain guns in Tamil NaduFinancialSummaryNagarjuna Fertilizers and Chemicals Limited Financial Summary on theBasis of Revenue, Growth and Net Profit Margin in INR Crore andPercentage, FY’2009-FY’2013Particulars FY’2009 FY’2010 FY’2011 FY’2012 FY’2013*RevenueGrowth%Net Profit%
  8. 8. 8© This is a licensed product of Ken Research and should not be copiedCORPORATE TIMELINENagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011NAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDORGANISATIONAL STRUCTUREThe company has 6 subsidiaries located in India and outside India. The company owned 99.8%shareholding in Jaiprakash Engineering and Steel Company Limited, incorporated in ~. Primefocus of this subsidiary is to utilize the land available for the company. Jaiprakash considered thevarious infrastructure projects of the company. Nagarjuna Mauritius Private Limited is a whollyowned subsidiary of the company. Nagarjuna Mauritius earned INR ~ crore of turnover and PATof INR ~ crore in FY’2012 with an asset base of ~ crore as on 31stMarch 2012…
  9. 9. 9© This is a licensed product of Ken Research and should not be copiedNagarjuna Management Services Private Limited provides the operational and maintenanceservices to the chemical process plants...Nagarjuna Fertilizers and Chemicals Limited Organizational Structure
  10. 10. 10© This is a licensed product of Ken Research and should not be copiedNAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDRESTRUCTURING OF THE COMPANYThe company was restructured in FY’2012. Oil division of the company was demerged and anew company Nagarjuna Oil Refinery Limited was formed. The deal was approximately of INR298.0 crore…Nagarjuna Fertilizers and Chemicals Limited Restructuring
  11. 11. 11© This is a licensed product of Ken Research and should not be copiedNAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDPRODUCT PORTFOLIONagarjuna Fertilizers and Chemicals Limited deal in manufacturing as well as trading of goodsand services. The company has a wide variety of product portfolio of micro and macro nutrientsfor the Indian fertilizer market both in manufacturing and in trading segment…The company has a prime focus on the trading of fertilizer product as trading of fertilizerscontributes ~% of the company’s revenues in FY’2012…Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded,FY’2011 and FY’2012Particulars FY’2012 FY’2011 Change %changeManufactured Products:Urea Produced (tonnes)Urea Sale (tonnes)Micro Irrigation (meters)Traded Products:Bulk Products (MTS)Seeds (MTS)Customized Fertilizers (MTS)Specialty Fertilizers (MTS)Micro Nutrients (MTS)Bio Products (KL)
  12. 12. 12© This is a licensed product of Ken Research and should not be copiedNAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDFINANCIAL AND VALUATION ANALYSISRevenue of Nagarjuna Fertilizers and Chemicals Limited has shown an average annual growthrate of ~% from FY’2008-FY’2013. Over the years the company has witnessed such a growthdue to the constant growth in the production capacity of the company…In FY’2012 revenue of the company had shown a growth of ~% from FY’2011. The main reasonfor this increment was the restructuring process carried out by the company in the second quarterof FY’2012, which was effective from 1stApril 2011…In FY’2011 revenue of the company had shown an increment of ~% on y-o-y basis. Majorreason for this increase in revenue was due to implementation of nutrient based subsidy (NBS)by the Indian government...EBITDA of the company was a little under pressure as the average annual growth rate inEBITDA was ~% from FY’2008-FY’2013 as compared to revenue which was 20.1% for thesame period...As of 22ndApril 2013, Nagarjuna Fertilizers and Chemicals Limited have been valued at INR ~on company comparable basis. The company has been valued at average revenue multiple of ~xof several listed fertilizers company in India…Over the years, the Indian fertilizer industry has witnessed a number of financial dealtransactions. Some companies made private placements and some stakeholders’ purchases andsold shares through stock exchanges…Table: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis ofRevenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2009-2013Particulars (in INR Crore and Percentage) FY’2009 FY’2010 FY’2011 FY’2012 FY’2013*Revenuey-o-y Growth%EBITDA%Net Profit%
  13. 13. 13© This is a licensed product of Ken Research and should not be copiedTable: Financial Performance of Other Fertilizer Companies on the Basis of Revenue inINR Crore, FY’2008-LTM Year Ending 31st December 2012Revenue (in INR Crore) FY’2008 FY’2009 FY’2010 FY’2011 FY’2012 LTMChambal Fertilizers and Chemicals Limited*Coromandel International LimitedGujarat State Fertilizer & Chemical Co.LimitedMangalore Chemicals & Fertilizers LimitedNational Fertilizers LimitedRashtriya Chemicals and Fertilizers Limited*Zuari Agro Chemicals Limited*Table: Company Comparable Analysis on the Basis of Market Capitalization, Net Debtand Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31stDecember 2012(INR Crore, unless Stated) Last Twelve Months (LTM) Year EndingDecember 2012Company MarketCapNetDebtEnterpriseValue (EV)EV/Revenue EV/EBITDA P/EChambal Fertilizers andChemicals LimitedGujarat State Fertilizer& Chemical Co LimitedCoromandelInternational LimitedZuari Agro ChemicalsLimitedNational FertilizersLimitedMangalore Chemicals &Fertilizers LimitedRashtriya Chemicalsand Fertilizers LimitedMean
  14. 14. 14© This is a licensed product of Ken Research and should not be copiedRelative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INRCrore, Percentage and MultiplesDate Target Company Deal Type DealValueINR (Cr)Stake % ImpliedEV/RevenueImpliedEV/EBITDAImpliedEV/ PAT02-Apr-13 Mangalore Chemicals& FertilizersBlock trade29-Jan-13 PI Industries Limited PrivatePlacement10-Jan-13 Karnalyte ResourcesInc.PrivatePlacement04-Dec-12 Sree RamcidesChemicals PrivateLimitedInboundAcquisition04-Dec-12 PI Industries Limited Block trade04-Oct-12 PI Industries Limited Block trade28-Sep-12 Shree Renuka SugarsLimitedBlock trade13-Jul-12 SD Agchem(Netherlands) B.V.OutboundAcquisition23-Apr-12 Zero Waste AgroOrganics PrivateLimitedDomesticAcquisition21-Mar-12 Bisco Bio SciencesPrivate LimitedInboundAcquisition03-Nov-11 Crystal CropProtection PrivateLimitedDomesticAcquisition31-May-11 Sabero OrganicsGujarat LimitedDomesticAcquisition31-May-10 FertilizerManufacturingFacilities inChhattisgarhBlock tradeMeanMedian
  15. 15. 15© This is a licensed product of Ken Research and should not be copiedMACRO ANALYSIS OF FERTILIZER INDUSTRYMARKET SHARE OF MAJOR PLAYERS IN INDIAN FERTILIZERINDUSTRY, FY’2012BY REVENUE, FY’2012Indian Farmers Fertilizer Co-operative Limited accounted for ~% of the market in FY’2012 andgenerated revenue worth INR ~ crore during the year…National fertilizer limited is the second largest player in the fertilizer market in India. Itaccounted for a share of ~% in the overall fertilizer market in India and generated revenue worthINR ~crore in FY’2012. The company has ~ urea production plants with a total installed capacityof ~ million tonnes.Table: Market Positioning of Major Players on the Basis of Revenue in INR Crore andPercentage, FY 2012Leading Fertilizer Companies Revenue (INR Crore) Market Share (%)Indian Farmers Fertilizer Co-operative Limited (IFFCO)National Fertilizers LimitedZuari Agro Chemicals LimitedNagarjuna Fertilizers and Chemicals LimitedKrishak Bharati Co-operative LimitedMangalore Chemicals & Fertilizers LimitedGujarat State Fertilizer & Chemical Co. LimitedCoromandel International LimitedChambal Fertilizers and Chemicals LimitedMadras Fertilizers LimitedThe Fertilizers and Chemicals Travancore LimitedRashtriya Fertilizers and Chemicals Limited
  16. 16. 16© This is a licensed product of Ken Research and should not be copiedDeepak Fertilizers And Petrochemicals Corporation LimitedOthersTotalNAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDMANAGEMENT OUTLOOK AND FUTURE PROJECTIONSNagarjuna Fertilizers and Chemicals Limited has a dominating position in the southern region ofIndia with approximately ~% of the company’s revenues came from the same in FY’2012…After doing an extensive research on the fertilizer market of Africa, the company is planning todiscover and capture the opportunities available in the uncover market of Africa…NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FUTUREPROJECTIONSNagarjuna Fertilizers and Chemicals Limited is planning to enhance the quality of its products byintroducing advance tools to measure the actual nutrients requirements and status of the crop…The company is planning to increase to expand its operational capacity. As of now the companyhas an operating capacity ~ million tonnes and Nagarjuna is expected to increase its capacityupto ~ million tonnes in the near future…Nagarjuna Fertilizers and Chemicals Limited is expected to increase its geographical reach in theinternational market by covering different countries of Africa…With the introduction of new products and covering different geographies it is expected that theEBITDA of the company will outperform the growth showcased from FY’2009-FY’2013. Thecompany has showcased an EBITDA growth of ~% from FY’2009-FY’2013 and it is expectedthat the company will increase it to a CAGR of ~% from FY’2013-FY’2017…
  17. 17. 17© This is a licensed product of Ken Research and should not be copiedNagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis of Revenue,EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017NAGARJUNA FERTILIZERS AND CHEMICALS LIMITEDFINANCIALS FUTURE PROJECTIONSOver the years shareholders’ funds of the company has shown a constant growth as the companyis constantly generating after tax profit. Net worth of the company has shown a CAGR growth of~% from FY’2011-FY’2013 due to huge growth in profit after tax of the company…Outsider funds of the company include both long term and short term loan of the company. Longterm loans constitute only ~% of the total outsider funds in as on 31stMarch 2013…0.0%2.0%4.0%6.0%8.0%10.0%12.0%0.02,000.04,000.06,000.08,000.010,000.012,000.0FY2014 FY2015 FY2016 FY2017inPercentageINRCroreRevenue EBITDA Margin Net Profit Margin
  18. 18. 18© This is a licensed product of Ken Research and should not be copiedDISCLAIMERThe research reports provided by Ken Research are for the personal information of theauthorized recipient and is not for public distribution and should not be reproduced orredistributed without prior permission. You are permitted to print or download extracts from thismaterial for your personal use only. None of this material may be used for any commercial orpublic use.The information provided in the research documents is from publicly available data and othersources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect todocuments available, neither the company nor any of its employees makes any warranty, expressor implied, including the warranties of merchantability and fitness for a particular purpose, orassumes any legal liability or responsibility for the accuracy, completeness, or usefulness of anyinformation, apparatus, product, or process disclosed, or represents that its use will not infringeprivately owned rights.The report also includes analysis and views expressed by our research team. The research reportsare purely for information purposes. The opinions expressed are our current opinions as of thedate appearing in the material and may be subject to change from time to time without notice.Investors should not solely rely on the information contained in the research documents and mustmake investment decisions based on their own investment objectives, risk profile and financialposition. The recipients of this material should take their own professional advice before actingon this information.Ken Research will not accept returns of reports once dispatched due to the confidentiality ofinformation provided in our reports. In case, a report qualify for return, we will issue a credit,minus shipping charges, of equal value to the original purchase price, toward a future purchase—no refunds. The decision about whether the product return can be accepted or not is solely at ourdiscretion. Any dispute will be subject to the laws of India and exclusive jurisdiction of IndianCourts.No part of this manual or any material appearing may be reproduced, stored in or transmittedon any other Web site without written permission of Ken Research and any payments of aspecified fee. Requests to republish any material may be sent to us.

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