In a significant announcement for its shareholders, Chambal Fertilisers and Chemicals Ltd., a mid-cap player in the commodity sector, experienced a surge in stock prices today. The opening price on the Bombay Stock Exchange (BSE) stood strong at Rs 375.30 per share. The intraday peak touched Rs 385.35 per share, marking a commendable gain of 3.35%. This upward momentum follows the company’s endorsement of a share buyback program valued at Rs. 700 crore through a tender offer.

About Chambal Fertilisers and Chemicals Ltd.

Headquartered in Kota, Rajasthan, Chambal Fertilisers and Chemicals Ltd is a prominent Indian agrochemical manufacturing firm. Serving as the primary supplier of fertilizers in states including Rajasthan, Madhya Pradesh, Punjab, Uttar Pradesh, Bihar, Chhattisgarh, and Haryana, the company plays a crucial role in supporting farmers across the northern, eastern, central, and western regions of India.

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Board Approval and Share Buyback Details

At the meeting held on January 8, 2024, the Board of Directors approved the buyback of fully paid-up equity shares with a face value of Rs. 10/- each. The buyback is set not to exceed 1,55,55,555 equity shares, constituting 3.74% of the total paid-up equity share capital as of March 31, 2023. The buyback price is fixed at Rs. 450 per equity share, payable in cash.

The aggregate amount for the buyback is capped at Rs. 700 crore, excluding taxes under the Income Tax Act, 1961, and related expenses. This amounts to 9.82% and 9.52% of the fully paid-up equity share capital and free reserves, respectively, based on the latest audited standalone and consolidated balance sheet for the financial year ending March 31, 2023.

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Record Date and Eligibility

Under Regulation 42 of the Listing Regulations and Regulation 9(i) of the Buyback Regulations, Chambal Fertilisers and Chemicals has designated January 18, 2024, as the ‘Record Date.’ This date determines the entitlement and names of eligible shareholders/beneficial owners who will receive the letter of offer and are eligible to participate in the buyback.

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Financial Performance

For the second quarter of the current fiscal year, the firm reported a remarkable 39% surge in its consolidated net profit, reaching Rs 380.96 crore. This is a substantial increase from the Rs 274.19 crore net profit recorded in the same quarter of FY23. However, total income experienced a decline, falling from Rs 8,675.59 crore in the July-September fiscal year of 2022-23 to Rs 5,467.28 crore in the same period for 2023-24. The total expense also saw a decrease from Rs 8,305.42 crore in Q2FY23 to Rs 4,894.72 crore in Q2FY24.

Profit & Loss Statement of Chambal Fertilisers

(Consolidated Figures in Rs. Crores)

Financials	Mar 2012	Mar 2013	Mar 2014	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Mar 2022	Mar 2023	TTM
Sales +	7,537	8,198	8,906	9,733	9,008	7,553	7,541	10,095	12,206	12,719	16,069	27,773	22,870
Expenses +	6,707	7,512	8,229	8,996	8,354	6,795	6,730	8,894	10,281	10,249	13,804	25,951	20,844
Operating Profit	830	686	677	737	654	759	811	1,200	1,925	2,470	2,265	1,822	2,026
OPM %	11%	8%	8%	8%	7%	10%	11%	12%	16%	19%	14%	7%	9%
Other Income +	72	93	103	103	32	133	172	-2	192	470	374	222	169
Interest	130	140	209	164	267	255	157	247	504	291	109	320	288
Depreciation	308	267	282	216	111	92	85	119	287	289	300	308	310
Profit before tax	464	372	289	459	308	544	740	832	1,327	2,360	2,231	1,416	1,598
Tax %	72%	43%	19%	39%	52%	34%	33%	30%	8%	26%	30%	27%	–
Net Profit +	129	212	235	280	147	359	495	585	1,226	1,748	1,566	1,034	1,137
EPS in Rs	3.80	5.73	5.87	7.08	5.31	8.70	11.99	14.18	29.46	39.76	37.62	24.85	27.34
Dividend Payout %	50%	33%	32%	27%	36%	22%	16%	14%	14%	19%	20%	30%	–

Chambal Fertilisers PE Ratio Chart