Chambal Fertilisers and Chemicals (Chambal) is India’s largest producer of Urea in the private sector. It caters to the northern and western regions of India and supplies urea to nine states. The company markets urea under the brand name, Uttam Veer.
Chambal has three divisions - agri-inputs, shipping and textiles. It has two subsidiaries - one in the software business and the other in the infrastructure sector. Its two joint ventures are in the fields of financial services and manufacture of phosphoric acid.
The shipping division, operating under the name of India Steamship has three Aframax tankers with a fleet capacity of about dwt 3,00,000 MT. And the textile unit, known as Birla Textile Mills, has a state-of-the-art spinning unit with a capacity of 80,208 spindles located at Baddi, Himachal Pradesh.
The financial performance of the company for the first quarter ended 30th June 2008 has been mixed. Though it managed to show an improved sales, which was mainly on account of the fertilizer division, the other two sectors – shipping and textiles pulled down the margins.
YoY, the net sales of the company rose 35.31% at Rs.805.27 crore. 62% of its sales came from the fertilizer division. Trading earned it Rs.185.59 crore, shipping Rs.56.58 crore and textile sales was at Rs.66.40 crore. Operating expenses rose 47%. This pulled down the margins.
The shipping venture showed an operating loss of Rs.48.34 crore, while the textiles division had an operating loss of Rs.1. 22 crore, small loss but loss nevertheless. And this affected the overall operating profit of the company. OPM was down from 26.03% to 16.28%. EBIDTA was down 15% at Rs.131.10 crore.
PBT was down 25.51 crore and the tax outgo of Rs.33.51 crore as against Rs.15.31 crore in Q1FY08 pulled down the PAT, it was down by a whopping 61.43% at Rs.23.80 crore. NPM was down at 2.96% as against 10.37%, YoY.
In June, the stock had touched a high of Rs.96 and despite the poor performance it did not exactly slip down drastically. Currently at Rs.62, stay invested but do not increase your exposure further.
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