FY14E FY15E FY14E FY15E

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1 Sep 13 Complex fertiliser sales down 13%; urea up by 2.6% YoY October 14, 2013 Balwindar Singh Sensex v/s PL Agri Products & Chemical Index PL Agri Products & Chemical Index Sensex Oct-12 Dec-12 Source: Bloomberg Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Preliminary data from the Ministry of indicates that sales volumes of overall complex fertilisers (incl. manufactured & traded) declined 12.7% YoY for the industry during Sep 13, primarily due to decline in trading volumes. Imported complex fertilisers witnessed a decline of 39.7% YoY during Sep 13, while manufactured volumes increased by 11.8% YoY. On the other hand, urea was up 2.6% YoY during Sep 13. Since inventory situation has normalized now and with expectations of rabi being strong, we expect company level sales growth to return over the next couple of quarters. Over the last couple of quarters as expected, manufactured indigenous volumes have improved, while imports continue to decline as importers have till now refrained from importing. However, our recent interaction with industry participants suggests that as inventory in the system has normalized and with currency stabilising, imports are likely to pick up again. Further, global DAP prices have currently fallen to US$368/mt providing incentive for importers to start importing. As global fertiliser prices continue their downward trend, chances of reduction in fertiliser farmgate prices during the rabi season has increased. Global fertiliser prices continue their slide...: Global fertiliser prices continue to decline due to demand-supply mismatch. Global DAP prices are currently quoting at US$368/mt compared to US$475/mt in July Ammonia prices have corrected to US$490/mt currently due to improvement in supply over the last few months. Potash prices are currently ruling at US$380/mt and are expected to slide further post the break-up of joint venture between Uralkali and Belaruskali. Sector Update Stock Performance (%) 1M 6M 12M Sensex PL Agri Products Index 4.2 (3.7) (15.6) Chambal 5.3 (27.3) (47.0) Coromandel Int. (2.8) 17.7 (23.4) Deepak (11.5) Dhanuka Agritech (3.0) GSFC 8.8 (2.6) (29.1) Rallis India Tata Chemicals 0.4 (21.4) (23.6) United Phosphorus Exhibit 1: Valuations Primer Name Rating CMP (Rs) TP (Rs)...reviving likelihood of reduction in farmgate prices during the rabi season: With global fertiliser prices continuing their downward trend, it is quite likely that farmgate prices of complex fertilisers might be reduced during the rabi season. We believe such reduction in prices will be beneficial for the sector and would help to spur agri-inputs consumption. Further, even after the reduction in prices, companies would be able to maintain their margins. However, delay in subsidy receivables remains a key risk for the sector. After the recent run up of ~25 30% in Coromandel s stock price, we remain wary on valuations front: Though we remain bullish on Coromandel s mediumterm prospects, we remain cautious in the near-term due to expensive valuations. Our current earnings are at Rs13.8/18.2 for FY14E/15E and at CMP, stock is trading at 16.0x/12.1x FY14E/15E earnings. Any reversal in raw materials prices, rupee depreciation, delayed subsidy receivables and resumption of imports remain key risks in the near-term. Our scenario analysis suggests that even at extremely bullish estimates of Rs17.6/25.0 for FY14E/15E, stock is trading at 12.6x/9.0x earnings, respectively (average trading range of 11-14x one-year forward earnings). EPS (Rs) Source: PL Research Prabhudas Lilladher Pvt. Ltd. and/or its associates (the 'Firm') does and/or seeks to do business with companies covered in its research reports. As a result investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of the report. Investors should consider this report as only a single factor in making their investment decision. Please refer to important disclosures and disclaimers at the end of the report PE (x) FY14E FY15E FY14E FY15E Chambal Fertilizers & Chemicals BUY Coromandel International Accumulate Deepak & Petrochemicals Corporation Accumulate Gujarat State & Chemicals Accumulate Tata Chemicals Accumulate

2 Fertiliser Sales Volume Exhibit 2: September'2013 sales volumes Product mt Sep 12 Sep 13 % change YTDFY13 YTDFY14 % change Imported DAP 908, , % 2,511,649 1,724, % Imported NPK 104,026 22, % 776, , % MoP 260, , % 1,099,449 1,067, % Others imported 40 - NA 89,358 - NA Total Imported 1,273, , % 4,477,309 2,919, % Indigenous DAP 353, , % 1,476,981 1,437, % Indigenous NPK 659, , % 2,953,428 2,904, % Other complex indigenous (excl. SSP, TSP) 47,428 20, % 230, , % SSP, TSP 342, , % 1,893,772 1,791, % Total indigenous fertilisers 1,402,846 1,568, % 6,554,478 6,304, % Total complex fertilisers 2,675,968 2,336, % 11,031,787 9,223, % Urea 2,714,023 2,783, % 13,581,614 15,097, % Source: Ministry of, PL Research Exhibit 3: Company level complex fertiliser sales volumes Company mt Sep 12 Sep 13 % change YTDFY13 YTDFY14 % change Chambal Fertiliser 114, , % 326, , % Coromandel Int'l 319, , % 1,140,936 1,222, % Manufactured 236, , % 969,308 1,118, % Traded 83,041 19, % 171, , % Deepak NA 30,497 NA NA 163,521 NA FACT 71,587 85, % 373, , % GNFC 14,928 20, % 83,882 89, % GSFC 79,989 87, % 570, , % IFFCO 426, , % 1,629,342 1,217, % Indian Potash 450, , % 1,861,269 1,233, % Paradeep Phospates 185, , % 624, , % RCF 68,756 72, % 437, , % Tata Chemicals 129, , % 411, , % Zuari Holdings 183,120 4, % 534, , % Source: Ministry of, PL Research October 14,

3 Exhibit 4: Company wise urea sales volumes Company mt Sep 12 Sep 13 % change YTDFY13 YTDFY14 % change Chambal 184, ,276 2% 899, ,115 8% GNFC 84,532 62,044 27% 350, ,849 22% GSFC 28,783 29,724 3% 139, ,413 24% IFFCO 550, ,120 34% 2,317,555 2,603,614 12% KRIBHCO 253, ,556 26% 1,281,961 1,304,038 2% Nagarjuna 209, , % 861,338 1,308,639 52% National 275, ,239 15% 1,231,783 1,468,004 19% RCF 186, ,228 34% 986,438 1,066,779 8% Tata Chemicals 111, ,639 7% 446, ,963 17% Source: Ministry of, PL Research Exhibit 5: Annual sales volumes Product mt FY10 FY11 FY12 FY13 YTD FY13 YTDFY14 % change Imported DAP 5,805,146 7,541,386 6,902,274 5,467,985 2,511,649 1,724, % Imported NPK - 1,076,379 3,299,541 1,077, , , % MoP 4,675,723 3,899,849 2,994,530 2,135,938 1,099,449 1,067, % Others imported 135,757 88, ,505 89,603 89,358 - NA Total Imported 10,616,626 12,606,057 13,519,850 8,771,482 4,477,309 2,919, % Indigenous DAP 4,347,054 3,565,397 4,010,539 3,669,475 1,476,981 1,437, % Indigenous NPK 8,036,492 9,151,715 7,769,499 6,224,809 2,953,428 2,904, % Other complex indigenous (excl. SSP, TSP) 145, , , , , , % SSP, TSP 119,115 3,426,405 3,360,000 3,944,756 1,893,772 1,791, % Total Indigenous fertilisers 12,647,997 16,,415 15,619,621 14,292,765 6,554,478 6,304, % Total Complex fertilisers 23,264,623 29,306,472 29,139,471 23,064,247 11,031,787 9,223, % Urea 25,233,711 27,115,837 29,356,568 30,159,512 13,581,614 15,097, % Source: Ministry of, PL Research Exhibit 6: Quarterly sales volumes Product mt Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Imported DAP 2,135,162 1,916, ,760 1,836,889 1,982, , ,676 1,350,848 Imported NPK 917,111 1,142, , , , ,932 34,533 92,462 MoP 1,065,357 1,226, , , , , , ,563 Others imported 145,764 86,148 21,931 67, Total Imported 4,263,394 4,371,771 1,552,804 2,924,505 2,636,049 1,658, ,384 2,084,873 Indigenous DAP 756,094 1,225, , , ,096 1,440, , ,016 Indigenous NPK 1,975,468 1,732,999 1,175,275 1,778,153 1,517,028 1,754, ,033 2,021,124 Other complex indigenous (excl. SSP, TSP) 139,526 92,556 88, , , ,824 80,501 90,456 SSP, TSP 819, , ,555 1,035, ,104 1,145, ,760 1,113,754 Total Indigenous fertilisers 3,690,315 3,706,356 2,713,905 3,811,979 3,319,832 4,447,049 2,101,673 4,169,350 Total Complex fertilisers 7,953,709 8,078,127 4,266,709 6,736,484 5,955,881 6,105,173 2,936,057 6,254,223 Urea 7,982,628 7,408,193 5,575,049 8,006,565 8,483,936 8,093,962 5,909,469 9,188,271 Source: Ministry of, PL Research October 14,

4 Exhibit 7: Quarterly sales volumes growth YoY Product Q3FY12 Q4FY12 Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14 Q2FY14 Imported DAP -10% 168% 25% -21% -7% -49% -45% -26% Imported NPK 99% 677% 253% -70% -81% -89% -92% -72% MoP 6% 32% -20% 259% -55% -55% 4% -7% Others imported 1635% % 22% -8% -100% -100% -100% -100% Total Imported 11% 144% 30% 21% 38% 62% 46% 29% Indigenous DAP -12% 58% -33% -22% -1% 18% -21% 10% Indigenous NPK -17% -21% -36% -20% -23% 1% -25% 14% Other complex indigenous (excl. SSP, TSP) -3% -25% -7% -7% -16% 15% -9% -36% SSP, TSP 8% 6% -2% 0% 14% 75% -22% 8% Total Indigenous fertilisers -11% 0% -27% -16% -10% 20% -23% 9% Total Complex fertilisers 1% 47% 13% 18% 25% 24% 31% 7% Urea 0% 5% 5% 1% 6% 9% 6% 15% Source: Ministry of, PL Research October 14,

5 Prices Exhibit 8: Global Fertiliser prices US$/mt Sep 13 Sep 12 Aug 13 % YoY % MoM Comments Ammonia % 3% Improvement in supply to keep prices under check ; current ammonia prices at $460/mt Phos Acid % 4% Current phos acid prices are ruling at less than $650/mt Rock Phospate % 18% Potash % 3% Prices might come down further DAP % 10% Current DAP prices are at $368/mt Urea % 5% Globally weak demand & bearish fundamentals ; current prices at $283/mt Exhibit 9: Ammonia prices Exhibit 10: Phos Acid prices 780 1,200 1, , Exhibit 11: Rock Phospate prices Exhibit 12: Potash prices October 14,

6 Exhibit 13: Global DAP prices Exhibit 14: Urea prices (US$ / MT) October 14,

7 Prabhudas Lilladher Pvt. Ltd. 3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai , India Tel: (91 22) Fax: (91 22) Rating Distribution of Research Coverage % of Total Coverage 60% 50% 40% 30% 20% 10% 0% 53.2% 28.2% 16.9% 1.6% BUY Accumulate Reduce Sell PL s Recommendation Nomenclature BUY : Over 15% Outperformance to Sensex over 12-months Accumulate : Outperformance to Sensex over 12-months Reduce : Underperformance to Sensex over 12-months Sell : Over 15% underperformance to Sensex over 12-months Trading Buy : Over 10% absolute upside in 1-month Trading Sell : Over 10% absolute decline in 1-month Not Rated (NR) : No specific call on the stock Under Review (UR) : Rating likely to change shortly This document has been prepared by the Research Division of Prabhudas Lilladher Pvt. Ltd. Mumbai, India (PL) and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of PL. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, PL has not independently verified the accuracy or completeness of the same. Neither PL nor any of its affiliates, its directors or its employees accept any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient's particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. Either PL or its affiliates or its directors or its employees or its representatives or its clients or their relatives may have position(s), make market, act as principal or engage in transactions of securities of companies referred to in this report and they may have used the research material prior to publication. We may from time to time solicit or perform investment banking or other services for any company mentioned in this document. October 14,