Emkay Reseach: Accumulate Deepak Fertilisers

Emkay Research has, in a result update, put an "Accumulate" rating on Deepak Fertilisers and Petrochemicals.

The report, released on July 17, said: "Deepak Fertilisers and Chemicals (DFPCL) Q1FY07 results were in line with our expectations. Company posted impressive 20.5%YoY growth in topline to Rs 1.67bn on back of higher revenues from fertiliser sale, which saw a rise of 64.3%YoY (primarily on low base affect). EBITDA margins slashed by 540 bps to 22.3% and hence EBITDA came down 3%YoY to Rs 371mn. Higher share of traded goods business (both in chemicals and fertilisers) and remarkable rise in fertiliser sales reduced the operating margins. APAT increased by 4.4% YoY to Rs 237mn and hence AEPS for the quarter works out Rs 2.7. Given the company's ongoing projects advancing as per schedule, wemaintain our 'ACCUMULATE' rating on the stock."

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