Mangalore Chem: A fertilizer stock that shines in Q4 with 62% revenue growth

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Mangalore Chem delivers stellar Q4 results, stock surges

Mangalore Chemicals and Fertilizers Limited (MCF), the largest manufacturer of chemical fertilizers in Karnataka, announced its fourth-quarter results for the financial year 2022-23 on Tuesday. The company posted a net profit of Rs 67.9 crore, a whopping 1840% increase from Rs 3.5 crore in the same quarter last year. Revenue from operations also rose by 62% to Rs 1,163 crore from Rs 719 crore in Q4 FY22.

Key highlights of Q4 results

  • MCF sold 3.28 lakh tonnes of fertilizers in Q4 FY23, up 18% from 2.78 lakh tonnes in Q4 FY22.
  • The company benefited from the government’s subsidy scheme for urea and complex fertilizers, which helped reduce its working capital requirements and interest expenses.
  • The company’s board recommended a dividend of Rs 1.50 per share for FY23.

Stock performance and valuation

  • The stock of MCF closed at Rs 98.45 on Tuesday, up 6.7% from its previous close of Rs 92.30.
  • The stock has gained over 36% in the last one year, outperforming the Nifty Fertilizers index, which has risen by 25% in the same period.
  • The company has a market capitalization of Rs 1,176 crore and a price-to-earnings ratio of 16.6.

Business Overview and Outlook

  • MCF is a subsidiary of Zuari Agro Chemicals Limited, an Adventz group company, which holds 54.03% equity shares.
  • The company's diversified product portfolio includes urea, di-ammonium phosphate, muriate of potash, ammonium sulfate, and specialty fertilizers.
  • The company operates a state-of-the-art plant at Panambur, Mangalore with an annual capacity of 4.17 lakh tonnes of ammonia and 6.75 lakh tonnes of urea.
  • MCF is well-positioned to cater to the growing demand for fertilizers in the southern and western regions of India, with a strong distribution network and loyal customer base.
  • The company also exports its products to Sri Lanka, Bangladesh, and other countries.
  • The company is focused on enhancing its operational efficiency, product innovation, and customer satisfaction to achieve sustainable growth and profitability.

Conclusion

If you are looking for a fertilizer stock that has delivered consistent performance and attractive returns, consider Mangalore Chem as a potential investment option.

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