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TABLE OF CONTENTS
1. Executive Summary: Nagarjuna Fertilizers and Chemicals Limited
2. Nagarjuna Fertilizers and Chemicals Limited Business Overview
2.1. Corporate Timeline
2.2. Major Investments in the Company Evolution
2.3. Nagarjuna Fertilizers and Chemicals Limited Ownership Structure
2.4. Nagarjuna Fertilizers and Chemicals Limited Organisational Structure
2.5. Nagarjuna Fertilizers and Chemicals Limited Restructuring of the Company
3. Nagarjuna Fertilizers and Chemicals Limited Product Portfolio
3.1. Trading of Fertilizers and Seeds
3.2. Manufacturing of Urea
3.3. Agri-Information and Plant Management Services
4. Nagarjuna Fertilizers and Chemicals Limited Financial and Valuation Analysis
5. Nagarjuna Fertilizers and Chemicals Limited Analyst Recommendations
6. Nagarjuna Fertilizers and Chemicals Limited SWOT Analysis
7. Nagarjuna Fertilizers and Chemicals Limited Key Professionals
7.1. Management Profile
8. Macro Analysis of Fertilizer Industry
8.1. Indian Fertilizers Industry Market Size, FY2009-FY2013
8.1.1. By Production and Consumption, FY2009-FY2013
8.1.2. By Value, FY2009-FY2013
8.2. Indian Fertilizers Industry Segmentation, FY2012
8.2.1. By Inorganic and Organic Fertilizers, FY2012
8.2.2. By Generic and Bio-Fertilizers, FY2009-FY2012
8.2.3. By Micronutrients and Macronutrients, FY2012
8.3. Market Share of Major Players in Indian Fertilizer Industry, FY2012
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8.3.1. By Revenue, FY2012
8.3.2. By Urea, FY2011-FY2012
8.3.3. By DAP, FY2012
8.3.4. By Micronutrients, FY2012
9. Nagarjuna Fertilizers and Chemicals Limited Competitive Analysis
9.2. By Products Offered/ Revenue/ Business Strategy
10. Nagarjuna Fertilizers and Chemicals Limited Management Outlook and Future Projections
10.1. Nagarjuna Fertilizers and Chemicals Limited Future Projections
10.2. Nagarjuna Fertilizers and Chemicals Limited Financials Future Projections
10.3. Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis
11. Appendix
11.1. Market Definitions
11.2. Abbreviations
11.3. Research Methodology
11.4. Disclaimer
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LIST OF FIGURES
Figure 1: Nagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011
Figure 2: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure in Percentage as on 31st March 2012
Figure 3: Nagarjuna Fertilizers and Chemicals Limited Organizational Structure
Figure 4: Nagarjuna Fertilizers and Chemicals Limited Restructuring
Figure 5: Nagarjuna Fertilizers and Chemicals Limited Product Portfolio
Figure 6: India Fertilizer Market Size on the Basis of Production and Consumption in Thousand Tonnes, FY2009-FY2013
Figure 7: India Fertilizer Industry Market Size by Revenue in INR Crore and Percentage Growth in the Indian Fertilizer Market, FY2009-FY2013
Figure 8: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basis of Contribution in Percentage (%), FY2012
Figure 9: India Fertilizer Market Segmentation by Macronutrients and Micronutrients on the Basis of Contribution in Percentage (%), FY2012
Figure 10: Market Share of Leading Companies in Urea Fertilizer Market on the Basis of Production in Percentage (%), FY2012
Figure 11: Market Share of Leading Companies in DAP on the Basis of Production in India in Percentage (%), FY2012
Figure 12: Market Share of Leading Companies in Micronutrients on the Basis of Production in Percentage, FY2012
Figure 13: Nagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017
Figure 15: Non-linear Regression Analysis and Scatter Chart Based upon Indian Fertilizers Industry Market size, FY2008-FY2013
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LIST OF TABLES
Table 1: Nagarjuna Fertilizers and Chemicals Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, FY2009-FY2013
Table 2: Nagarjuna Fertilizers and Chemicals Limited Major Investments in Company Evaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INR Crore
Table 3: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure, FY2011 and FY2012
Table 4: Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded, FY2011 and FY2012
Table 5: Nagarjuna Fertilizers and Chemicals Limited Products Offered on the basis of Segmentation of Micro Irrigation
Table 6: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2009-2013
Table 7: Financial Performance of Fertilizer Companies on the Basis of Revenue in INR Crore, FY2008-LTM Year Ending 31st December 2012
Table 8: Financial Performance of Fertilizer Companies on the Basis of EBITDA in INR Crore, FY2008-LTM Year Ending 31st December 2012
Table 9: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
Table 10: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Table 11: Nagarjuna Fertilizers and Chemicals Limited Board of Directors and Management Profile
Table 12: Fertilizer Prices in India in INR per Ton, 2009-2012
Table 13: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basis of Revenue in INR Crore, FY2012
Table 14: India Fertilizer Market Segmentation by Bio-fertilizers and Generic Fertilizers on the Basis of Production in Thousand Tonnes, FY2009-FY2012
Table 15: India Fertilizer Market Segmentation by Bio-fertilizers and Generic on the Basis of Contribution in Percentage (%), FY2009-FY2012
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Table 16: Market Positioning of Major Players on the Basis of Revenue in INR Crore and Percentage, FY 2012
Table 17: Leading Players in Urea Fertilizer Market on the Basis of Production in Thousand Tonnes, FY2011-FY2012
Table 18: Leading Players in DAP Fertilizer Market on the Basis of Production in Thousand Tonnes, FY2011-FY2012
Table 19: Company Profile of Major Competitors of Nagarjuna on the basis of Services Offered, Revenue and Business Strategies
Table 20: Nagarjuna Fertilizers and Chemicals Limited Balance Sheet, 2012-2015
Table 21: Nagarjuna Fertilizers and Chemicals Limited Income Statement, 2012-2015
Table 22: Nagarjuna Fertilizers and Chemicals Limited Cash Flow Statement, 2011-2015
Table 23: Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis on the Basis of Liquidity, Asset Management, Profitability and Leverage Ratios in Multiple and Percentage, FY2012-FY2015
Table 24: Regression Coefficients of the Nagarjuna Fertilizers and Chemicals Limited
Table 25: Regression Intercepts of the Nagarjuna Fertilizers and Chemicals Limited
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EXECUTIVE SUMMARY: NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED (KAKINAND FERTILIZERS)
Nagarjuna Fertilizers and Chemicals Limited is a flagship company of Nagarjuna Group. The company is amongst the key players of plant nutrients in the Indian fertilizer market. The company is a manufacturer and supplier of both micronutrients and macronutrients in India with a brand name of Nagarjuna. ..
Key Differentiators
In south India, the company has the distinction of being the single largest investment in the private sector
Competition and Positioning
Leading position in the Indian Fertilizers market with 4th rank in terms of revenues in FY2012
Key Developments
For the first time in FY2012 the company installed automation micro irrigation system and rain guns in Tamil Nadu
Financial Summary
Nagarjuna Fertilizers and Chemicals Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, FY2009-FY2013
Particulars FY2009 FY2010 FY2011 FY2012 FY2013*
Revenue
Growth%
Net Profit%
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CORPORATE TIMELINE
Nagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011
NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED ORGANISATIONAL STRUCTURE
The 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 ~. Prime focus of this subsidiary is to utilize the land available for the company. Jaiprakash considered the various infrastructure projects of the company. Nagarjuna Mauritius Private Limited is a wholly owned subsidiary of the company. Nagarjuna Mauritius earned INR ~ crore of turnover and PAT of INR ~ crore in FY2012 with an asset base of ~ crore as on 31st March 2012
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Nagarjuna Management Services Private Limited provides the operational and maintenance services to the chemical process plants...
Nagarjuna Fertilizers and Chemicals Limited Organizational Structure
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NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED RESTRUCTURING OF THE COMPANY
The company was restructured in FY2012. Oil division of the company was demerged and a new company Nagarjuna Oil Refinery Limited was formed. The deal was approximately of INR 298.0 crore
Nagarjuna Fertilizers and Chemicals Limited Restructuring
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NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED PRODUCT PORTFOLIO
Nagarjuna Fertilizers and Chemicals Limited deal in manufacturing as well as trading of goods and services. The company has a wide variety of product portfolio of micro and macro nutrients for 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 fertilizers contributes ~% of the companys revenues in FY2012
Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded, FY2011 and FY2012
Particulars FY2012 FY2011 Change %change
Manufactured 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)
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NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FINANCIAL AND VALUATION ANALYSIS
Revenue of Nagarjuna Fertilizers and Chemicals Limited has shown an average annual growth rate of ~% from FY2008-FY2013. Over the years the company has witnessed such a growth due to the constant growth in the production capacity of the company
In FY2012 revenue of the company had shown a growth of ~% from FY2011. The main reason for this increment was the restructuring process carried out by the company in the second quarter of FY2012, which was effective from 1st April 2011
In FY2011 revenue of the company had shown an increment of ~% on y-o-y basis. Major reason 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 in EBITDA was ~% from FY2008-FY2013 as compared to revenue which was 20.1% for the same period...
As of 22nd April 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 ~x of several listed fertilizers company in India
Over the years, the Indian fertilizer industry has witnessed a number of financial deal transactions. Some companies made private placements and some stakeholders purchases and sold shares through stock exchanges
Table: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2009-2013
Particulars (in INR Crore and Percentage) FY2009 FY2010 FY2011 FY2012 FY2013*
Revenue
y-o-y Growth%
EBITDA%
Net Profit%
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Table: Financial Performance of Other Fertilizer Companies on the Basis of Revenue in INR Crore, FY2008-LTM Year Ending 31st December 2012
Revenue (in INR Crore) FY2008 FY2009 FY2010 FY2011 FY2012 LTM
Chambal Fertilizers and Chemicals Limited*
Coromandel International Limited
Gujarat State Fertilizer & Chemical Co. Limited
Mangalore Chemicals & Fertilizers Limited
National Fertilizers Limited
Rashtriya Chemicals and Fertilizers Limited*
Zuari Agro Chemicals Limited*
Table: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
(INR Crore, unless Stated) Last Twelve Months (LTM) Year Ending December 2012
Company Market Cap
Net Debt
Enterprise Value (EV)
EV/Revenue EV/EBITDA P/E
Chambal Fertilizers and Chemicals Limited
Gujarat State Fertilizer & Chemical Co Limited
Coromandel International Limited
Zuari Agro Chemicals Limited
National Fertilizers Limited
Mangalore Chemicals & Fertilizers Limited
Rashtriya Chemicals and Fertilizers Limited
Mean
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Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Date Target Company Deal Type Deal Value
INR (Cr)
Stake % Implied EV/
Revenue
Implied EV/
EBITDA
Implied EV/ PAT
02-Apr-13 Mangalore Chemicals & Fertilizers
Block trade
29-Jan-13 PI Industries Limited Private Placement
10-Jan-13 Karnalyte Resources Inc.
Private Placement
04-Dec-12 Sree Ramcides Chemicals Private Limited
Inbound Acquisition
04-Dec-12 PI Industries Limited Block trade
04-Oct-12 PI Industries Limited Block trade
28-Sep-12 Shree Renuka Sugars Limited
Block trade
13-Jul-12 SD Agchem (Netherlands) B.V.
Outbound Acquisition
23-Apr-12 Zero Waste Agro Organics Private Limited
Domestic Acquisition
21-Mar-12 Bisco Bio Sciences Private Limited
Inbound Acquisition
03-Nov-11 Crystal Crop Protection Private Limited
Domestic Acquisition
31-May-11 Sabero Organics Gujarat Limited
Domestic Acquisition
31-May-10 Fertilizer Manufacturing Facilities in Chhattisgarh
Block trade
Mean
Median
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MACRO ANALYSIS OF FERTILIZER INDUSTRY
MARKET SHARE OF MAJOR PLAYERS IN INDIAN FERTILIZER INDUSTRY, FY2012
BY REVENUE, FY2012
Indian Farmers Fertilizer Co-operative Limited accounted for ~% of the market in FY2012 and generated revenue worth INR ~ crore during the year
National fertilizer limited is the second largest player in the fertilizer market in India. It accounted for a share of ~% in the overall fertilizer market in India and generated revenue worth INR ~crore in FY2012. The company has ~ urea production plants with a total installed capacity of ~ million tonnes.
Table: Market Positioning of Major Players on the Basis of Revenue in INR Crore and Percentage, FY 2012
Leading Fertilizer Companies Revenue (INR Crore) Market Share (%)
Indian Farmers Fertilizer Co-operative Limited (IFFCO)
National Fertilizers Limited
Zuari Agro Chemicals Limited
Nagarjuna Fertilizers and Chemicals Limited
Krishak Bharati Co-operative Limited
Mangalore Chemicals & Fertilizers Limited
Gujarat State Fertilizer & Chemical Co. Limited
Coromandel International Limited
Chambal Fertilizers and Chemicals Limited
Madras Fertilizers Limited
The Fertilizers and Chemicals Travancore Limited
Rashtriya Fertilizers and Chemicals Limited
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Deepak Fertilizers And Petrochemicals Corporation Limited
Others
Total
NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED MANAGEMENT OUTLOOK AND FUTURE PROJECTIONS
Nagarjuna Fertilizers and Chemicals Limited has a dominating position in the southern region of India with approximately ~% of the companys revenues came from the same in FY2012
After doing an extensive research on the fertilizer market of Africa, the company is planning to discover and capture the opportunities available in the uncover market of Africa
NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FUTURE PROJECTIONS
Nagarjuna Fertilizers and Chemicals Limited is planning to enhance the quality of its products by introducing 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 company has an operating capacity ~ million tonnes and Nagarjuna is expected to increase its capacity upto ~ million tonnes in the near future
Nagarjuna Fertilizers and Chemicals Limited is expected to increase its geographical reach in the international market by covering different countries of Africa
With the introduction of new products and covering different geographies it is expected that the EBITDA of the company will outperform the growth showcased from FY2009-FY2013. The company has showcased an EBITDA growth of ~% from FY2009-FY2013 and it is expected that the company will increase it to a CAGR of ~% from FY2013-FY2017
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Nagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017
NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FINANCIALS FUTURE PROJECTIONS
Over the year's shareholders funds of the company has shown a constant growth as the company is constantly generating after tax profit. Net worth of the company has shown a CAGR growth of ~% from FY2011-FY2013 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. Long term loans constitute only ~% of the total outsider funds in as on 31st March 2013
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
0.0
2,000.0
4,000.0
6,000.0
8,000.0
10,000.0
12,000.0
FY'2014 FY'2015 FY'2016 FY'2017
in P
erce
ntag
e
INR
Cro
re
Revenue EBITDA Margin Net Profit Margin
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DISCLAIMER
The research reports provided by Ken Research are for the personal information of the authorized recipient and is not for public distribution and should not be reproduced or redistributed without prior permission. You are permitted to print or download extracts from this material for your personal use only. None of this material may be used for any commercial or public use.
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The report also includes analysis and views expressed by our research team. The research reports are purely for information purposes. The opinions expressed are our current opinions as of the date 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 must make investment decisions based on their own investment objectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information.
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Table of ContentsList of FiguresList of TablesExecutive Summary: Nagarjuna Fertilizers and Chemicals Limited (Kakinand Fertilizers)Corporate TimelineNagarjuna Fertilizers and Chemicals Limited Organisational StructureNagarjuna Fertilizers and Chemicals Limited Restructuring of the Company
Nagarjuna Fertilizers and Chemicals Limited Product PortfolioNagarjuna Fertilizers and Chemicals Limited Financial and Valuation AnalysisMacro Analysis of Fertilizer IndustryMarket Share of Major Players in Indian Fertilizer Industry, FY2012By Revenue, FY2012
Nagarjuna Fertilizers and Chemicals Limited Management Outlook and Future ProjectionsNagarjuna Fertilizers and Chemicals Limited Future ProjectionsNagarjuna Fertilizers and Chemicals Limited Financials Future ProjectionsDisclaimer