CHAMBLFERT - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 4.3

📊 Core Financials:

- Quarterly PAT at 602 Cr. vs 638 Cr. shows slight decline but YoY profit variation remains strong (+20.2%).

- EPS of 46.0 ₹ reflects solid profitability.

- ROCE (27.6%) and ROE (20.3%) are excellent, indicating strong efficiency and shareholder returns.

- Debt-to-equity ratio of 0.00 highlights a debt-free balance sheet.

- Cash flows remain robust, supported by strong margins and zero leverage.

💹 Valuation Indicators:

- Current P/E of 9.67 is well below industry average (20.3), suggesting undervaluation.

- P/B ratio ~ 1.85 (446 ₹ / 241 ₹), reasonable compared to peers.

- PEG ratio of 1.28 indicates fair valuation relative to growth.

- Intrinsic value appears higher than current price, offering margin of safety.

🏭 Business Model & Competitive Advantage:

Chambal Fertilisers operates in agrochemicals and fertilizers, serving India’s agricultural sector. Its competitive advantage lies in scale, strong distribution networks, and government support for fertilizer subsidies. The company benefits from consistent demand driven by India’s agricultural dependency.

🎯 Entry Zone & Long-Term Guidance:

- Entry zone: 420–440 ₹ (near support levels and undervaluation zone).

- Long-term holding: Attractive for value investors seeking stable returns with strong fundamentals. Accumulate on dips for long-term compounding.

Positive

• Debt-free balance sheet
• Strong ROCE (27.6%) and ROE (20.3%)
• EPS of 46.0 ₹ reflects solid profitability
• FII holdings increased (+1.23%)

Limitation

• Slight decline in quarterly PAT (638 Cr. → 602 Cr.)
• DII holdings decreased (-2.56%)
• Weak technical momentum (RSI 44.7, MACD negative)

Company Negative News

• Quarterly PAT declined marginally
• DII holdings reduced (-2.56%)

Company Positive News

• Strong YoY profit growth (+20.2%)
• FII holdings increased (+1.23%)
• Dividend yield at 2.25% provides steady income

Industry

• Industry P/E at 20.3 indicates sector is moderately valued
• Fertilizer demand driven by agricultural cycles and government subsidies
• Competitive landscape with multiple domestic and global players

Conclusion

⚖️ Chambal Fertilisers shows strong fundamentals with high ROE/ROCE, debt-free balance sheet, and undervaluation compared to peers. While short-term profit decline and weak technicals raise caution, the company’s agricultural demand base and dividend yield make it a solid long-term value play. Best accumulated near 420–440 ₹ for optimal entry.