Scripscan:Zuari Industries Ltd
cmp:430
Code:500780
Story:Recently, Zuari, in joint venture with Mitsubishi Corporation, acquired a 30% stake in Peruvian mine Fospac for 230 crore for assured supply of phosphate rock- the main feedstock for di-ammonium phosphate (DAP). Fospac?s annual rock phosphate production is expected to reach 2.5 million tonne by 2015, half of which will come to Zuari. The company plans to set up a 1 million tonne DAP plant at Karwar in Karnataka with a capex of 750 crore.In mid August 2011 the company finalised a contract to source potash feed, which will help the company grow its revenue and profit.Recently, Zuari also signed a gas-supply agreement with GAIL for 0.4 million tonnes urea plant at Zuarinagar. With fuel supply expected to start from January 2012, the company?s annual urea production capacity will grow 10% to 441000 tonnes. This is likely to attract an additional margin of 3,000 a tonne, which means an additional profit of 12.6 crore.The company also has plans to set up 1.3 million tonne gasbased urea plant at Belgaum in Karnataka at a cost of 5,000 crore by 2015-16. The Dabhol-Bangalore gas pipeline project may supply the project with natural gasDuring the first half of FY12, Zuari's performance was impacted by a 63-day long disruption in urea production and a 20-day break in phosphatic and potassic fertiliser production during the September 2011 quarter following a fire accident.These led to a 15% fall in the total sales volume of the company to 0.94 million tonnes compared with a year-ago period. Consequently, Zuari?s top-line also fell 1.2% to 2,995 crore on a standalone basis and bottomline dropped 27% to 80 crore. Operating profit margins were down 130 basis points to 3.3%. Zuari could complete only 40% of its annual target of 0.4 million tonne of urea production during the first half due to plant shutdown. The company expects to make up for the shortfall in the remaining two quarters. Also, as on September 30, 2011, the company had a builtup inventory of over 1,300 crore which is expected to liquidate with the resumption of operation at the plants.At the current market price of 430, the stock trades at nearly nine times its earnings for the trailing 12 months. Industry rivals such as Coromandel International and Gujarat State Fertilizes Corporation are currentlytrading at 11 and 4.1, respectively.
Search This Blog(Over 800 companies covered in the blog).
Archives : Old artciles
Important Disclaimer&Privacy policy
This blog does not share personal information with third parties nor do we store any information about your visit to this blog other than to analyze and optimize your content and reading experience through the use of cookies.You can turn off the use of cookies at anytime by changing your specific browser settings.This privacy policy is subject to change without notice and was last updated on 20.3.2013. If you have any questions, feel free to contact me directly here: arunsharemarket@gmail.com
Investment in equity shares has its own risks.Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that I consider reliable. I,however,do not vouch for the accuracy or the completeness thereof.This material is for personal information and am not responsible for any loss incurred based upon it & take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations above.The stock price projections shown are not necessarily indicative of future price performance.The information herein, together with all estimates and forecasts, can change without notice.
