Agro Chemicals Q1 Earnings Preview - Sector Valuations Price In A Good Season: Prabhudas Lilladher
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Prabhudas Lilladher Report
The aggregate topline/Ebitda/PAT growth in Q1 for agri-inputs industry is expected to be 13%/15%/28%.
International business growth will likely outperform domestic business growth due to strong global agri-inputs demand, driven by elevated crop prices (up between 35-85% year-on-year in Q1, Exhibit- 2) enabling companies to pass on higher raw material cost (Exhibit- 4).
We expect some demand impact for Agro chemicals due to shift in crop from cotton to Soybean and Pulses (lower pesticide requirement).
Fertiliser demand outlook looks strong given Government of India's move of providing ~Rs 150 billion of higher NBS subsidy (due to rise in raw material prices Exhibit- 5) which will benefit backward integrated players of DAP and complex fertilisers.
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