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TABLE OF CONTENTS
1. 2. Executive Summary: Nagarjuna Fertilizers and Chemicals Limited Nagarjuna Fertilizers and Chemicals Limited Business Overview 2.1. 2.2. 2.3. 2.4. 2.5. 3. Corporate Timeline Major Investments in the Company Evolution Nagarjuna Fertilizers and Chemicals Limited Ownership Structure Nagarjuna Fertilizers and Chemicals Limited Organisational Structure Nagarjuna Fertilizers and Chemicals Limited Restructuring of the Company

Nagarjuna Fertilizers and Chemicals Limited Product Portfolio 3.1. 3.2. 3.3. Trading of Fertilizers and Seeds Manufacturing of Urea Agri-Information and Plant Management Services

4. 5. 6. 7.

Nagarjuna Fertilizers and Chemicals Limited Financial and Valuation Analysis Nagarjuna Fertilizers and Chemicals Limited Analyst Recommendations Nagarjuna Fertilizers and Chemicals Limited SWOT Analysis Nagarjuna Fertilizers and Chemicals Limited Key Professionals 7.1. Management Profile

8.

Macro Analysis of Fertilizer Industry 8.1. Indian Fertilizers Industry Market Size, FY2009-FY2013 By Production and Consumption, FY2009-FY2013 By Value, FY2009-FY2013

8.1.1. 8.1.2. 8.2.

Indian Fertilizers Industry Segmentation, FY2012 By Inorganic and Organic Fertilizers, FY2012 By Generic and Bio-Fertilizers, FY2009-FY2012 By Micronutrients and Macronutrients, FY2012

8.2.1. 8.2.2. 8.2.3. 8.3.

Market Share of Major Players in Indian Fertilizer Industry, FY2012 2

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8.3.1. 8.3.2. 8.3.3. 8.3.4. 9.

By Revenue, FY2012 By Urea, FY2011-FY2012 By DAP, FY2012 By Micronutrients, FY2012

Nagarjuna Fertilizers and Chemicals Limited Competitive Analysis 9.2. By Products Offered/ Revenue/ Business Strategy

10. Nagarjuna Fertilizers and Chemicals Limited Management Outlook and Future Projections 10.1. 10.2. 10.3. 11. Nagarjuna Fertilizers and Chemicals Limited Future Projections Nagarjuna Fertilizers and Chemicals Limited Financials Future Projections Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis

Appendix Market Definitions Abbreviations Research Methodology Disclaimer

11.1. 11.2. 11.3. 11.4.

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LIST OF FIGURES
Figure 1: Nagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011 Figure 2: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure in Percentage as on 31st March 2012 Figure 3: Nagarjuna Fertilizers and Chemicals Limited Organizational Structure Figure 4: Nagarjuna Fertilizers and Chemicals Limited Restructuring Figure 5: Nagarjuna Fertilizers and Chemicals Limited Product Portfolio Figure 6: India Fertilizer Market Size on the Basis of Production and Consumption in Thousand Tonnes, FY2009-FY2013 Figure 7: India Fertilizer Industry Market Size by Revenue in INR Crore and Percentage Growth in the Indian Fertilizer Market, FY2009-FY2013 Figure 8: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basis of Contribution in Percentage (%), FY2012 Figure 9: India Fertilizer Market Segmentation by Macronutrients and Micronutrients on the Basis of Contribution in Percentage (%), FY2012 Figure 10: Market Share of Leading Companies in Urea Fertilizer Market on the Basis of Production in Percentage (%), FY2012 Figure 11: Market Share of Leading Companies in DAP on the Basis of Production in India in Percentage (%), FY2012 Figure 12: Market Share of Leading Companies in Micronutrients on the Basis of Production in Percentage, FY2012 Figure 13: Nagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017 Figure 15: Non-linear Regression Analysis and Scatter Chart Based upon Indian Fertilizers Industry Market size, FY2008-FY2013

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LIST OF TABLES
Table 1: Nagarjuna Fertilizers and Chemicals Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, FY2009-FY2013 Table 2: Nagarjuna Fertilizers and Chemicals Limited Major Investments in Company Evaluation on the Basis Deal Type, Stake, Deal Value and Implied Enterprise Value in INR Crore Table 3: Nagarjuna Fertilizers and Chemicals Limited Ownership Structure, FY2011 and FY2012 Table 4: Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded, FY2011 and FY2012 Table 5: Nagarjuna Fertilizers and Chemicals Limited Products Offered on the basis of Segmentation of Micro Irrigation Table 6: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 2009-2013 Table 7: Financial Performance of Fertilizer Companies on the Basis of Revenue in INR Crore, FY2008-LTM Year Ending 31st December 2012 Table 8: Financial Performance of Fertilizer Companies on the Basis of EBITDA in INR Crore, FY2008-LTM Year Ending 31st December 2012 Table 9: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012 Table 10: Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples Table 11: Nagarjuna Fertilizers and Chemicals Limited Board of Directors and Management Profile Table 12: Fertilizer Prices in India in INR per Ton, 2009-2012 Table 13: India Fertilizer Market Segmentation by Organic and Inorganic Fertilizers on the Basis of Revenue in INR Crore, FY2012 Table 14: India Fertilizer Market Segmentation by Bio-fertilizers and Generic Fertilizers on the Basis of Production in Thousand Tonnes, FY2009-FY2012 Table 15: India Fertilizer Market Segmentation by Bio-fertilizers and Generic on the Basis of Contribution in Percentage (%), FY2009-FY2012 5
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Table 16: Market Positioning of Major Players on the Basis of Revenue in INR Crore and Percentage, FY 2012 Table 17: Leading Players in Urea Fertilizer Market on the Basis of Production in Thousand Tonnes, FY2011-FY2012 Table 18: Leading Players in DAP Fertilizer Market on the Basis of Production in Thousand Tonnes, FY2011-FY2012 Table 19: Company Profile of Major Competitors of Nagarjuna on the basis of Services Offered, Revenue and Business Strategies Table 20: Nagarjuna Fertilizers and Chemicals Limited Balance Sheet, 2012-2015 Table 21: Nagarjuna Fertilizers and Chemicals Limited Income Statement, 2012-2015 Table 22: Nagarjuna Fertilizers and Chemicals Limited Cash Flow Statement, 2011-2015 Table 23: Nagarjuna Fertilizers and Chemicals Limited Ratio Analysis on the Basis of Liquidity, Asset Management, Profitability and Leverage Ratios in Multiple and Percentage, FY2012FY2015 Table 24: Regression Coefficients of the Nagarjuna Fertilizers and Chemicals Limited Table 25: Regression Intercepts of the Nagarjuna Fertilizers and Chemicals Limited

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EXECUTIVE SUMMARY: NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED (KAKINAND FERTILIZERS)

Nagarjuna Fertilizers and Chemicals Limited is a flagship company of Nagarjuna Group. The company is amongst the key players of plant nutrients in the Indian fertilizer market. The company is a manufacturer and supplier of both micronutrients and macronutrients in India with a brand name of Nagarjuna. ..

Key Differentiators

In south India, the company has the distinction of being the single largest investment in the private sector

Competition and Positioning Key Developments Financial Summary

Leading position in the Indian Fertilizers market with 4th rank in terms of revenues in FY2012 For the first time in FY2012 the company installed automation micro irrigation system and rain guns in Tamil Nadu

Nagarjuna Fertilizers and Chemicals Limited Financial Summary on the Basis of Revenue, Growth and Net Profit Margin in INR Crore and Percentage, FY2009-FY2013
Particulars Revenue Growth% Net Profit% FY2009 FY2010 FY2011 FY2012 FY2013*

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CORPORATE TIMELINE

Nagarjuna Fertilizers and Chemicals Limited Corporate Timeline 1985-2011

NAGARJUNA FERTILIZERS AND ORGANISATIONAL STRUCTURE

CHEMICALS

LIMITED

The company has 6 subsidiaries located in India and outside India. The company owned 99.8% shareholding in Jaiprakash Engineering and Steel Company Limited, incorporated in ~. Prime focus of this subsidiary is to utilize the land available for the company. Jaiprakash considered the various infrastructure projects of the company. Nagarjuna Mauritius Private Limited is a wholly owned subsidiary of the company. Nagarjuna Mauritius earned INR ~ crore of turnover and PAT of INR ~ crore in FY2012 with an asset base of ~ crore as on 31st March 2012

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Nagarjuna Management Services Private Limited provides the operational and maintenance services to the chemical process plants...

Nagarjuna Fertilizers and Chemicals Limited Organizational Structure

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NAGARJUNA FERTILIZERS AND RESTRUCTURING OF THE COMPANY

CHEMICALS

LIMITED

The company was restructured in FY2012. Oil division of the company was demerged and a new company Nagarjuna Oil Refinery Limited was formed. The deal was approximately of INR 298.0 crore

Nagarjuna Fertilizers and Chemicals Limited Restructuring

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NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED PRODUCT PORTFOLIO

Nagarjuna Fertilizers and Chemicals Limited deal in manufacturing as well as trading of goods and services. The company has a wide variety of product portfolio of micro and macro nutrients for the Indian fertilizer market both in manufacturing and in trading segment The company has a prime focus on the trading of fertilizer product as trading of fertilizers contributes ~% of the companys revenues in FY2012 Nagarjuna Fertilizers and Chemicals Limited Quantity Manufactured, Sale and Traded, FY2011 and FY2012
Particulars Manufactured Products: Urea Produced (tonnes) Urea Sale (tonnes) Micro Irrigation (meters) Traded Products: Bulk Products (MTS) Seeds (MTS) Customized Fertilizers (MTS) Specialty Fertilizers (MTS) Micro Nutrients (MTS) Bio Products (KL) FY2012 FY2011 Change %change

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NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FINANCIAL AND VALUATION ANALYSIS

Revenue of Nagarjuna Fertilizers and Chemicals Limited has shown an average annual growth rate of ~% from FY2008-FY2013. Over the years the company has witnessed such a growth due to the constant growth in the production capacity of the company In FY2012 revenue of the company had shown a growth of ~% from FY2011. The main reason for this increment was the restructuring process carried out by the company in the second quarter of FY2012, which was effective from 1st April 2011 In FY2011 revenue of the company had shown an increment of ~% on y-o-y basis. Major reason for this increase in revenue was due to implementation of nutrient based subsidy (NBS) by the Indian government... EBITDA of the company was a little under pressure as the average annual growth rate in EBITDA was ~% from FY2008-FY2013 as compared to revenue which was 20.1% for the same period... As of 22nd April 2013, Nagarjuna Fertilizers and Chemicals Limited have been valued at INR ~ on company comparable basis. The company has been valued at average revenue multiple of ~x of several listed fertilizers company in India Over the years, the Indian fertilizer industry has witnessed a number of financial deal transactions. Some companies made private placements and some stakeholders purchases and sold shares through stock exchanges Table: Nagarjuna Fertilizers and Chemicals Limited Financial Performance on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore, and Percentage, 20092013
Particulars (in INR Crore and Percentage) Revenue y-o-y Growth% EBITDA% Net Profit% FY2009 FY2010 FY2011 FY2012 FY2013*

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Table: Financial Performance of Other Fertilizer Companies on the Basis of Revenue in INR Crore, FY2008-LTM Year Ending 31st December 2012
Revenue (in INR Crore) Chambal Fertilizers and Chemicals Limited* Coromandel International Limited Gujarat State Fertilizer & Chemical Co. Limited Mangalore Chemicals & Fertilizers Limited National Fertilizers Limited Rashtriya Chemicals and Fertilizers Limited* Zuari Agro Chemicals Limited* FY2008 FY2009 FY2010 FY2011 FY2012 LTM

Table: Company Comparable Analysis on the Basis of Market Capitalization, Net Debt and Enterprise Value and Valuation Multiples in INR Crore and Multiples, LTM 31st December 2012
(INR Crore, unless Stated) Last Twelve Months (LTM) Year Ending December 2012 Market Cap Net Debt Enterprise Value (EV) EV/Revenue EV/EBITDA P/E

Company

Chambal Fertilizers and Chemicals Limited Gujarat State Fertilizer & Chemical Co Limited Coromandel International Limited Zuari Agro Chemicals Limited National Limited Fertilizers

Mangalore Chemicals & Fertilizers Limited Rashtriya Chemicals and Fertilizers Limited Mean

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Relative Valuation Analysis on the Basis of Deal Value, Deal Stake and Multiples in INR Crore, Percentage and Multiples
Date Target Company Deal Type Deal Value INR (Cr) Stake % Implied EV/ Revenue Implied EV/ EBITDA Implied EV/ PAT

02-Apr-13

Mangalore Chemicals & Fertilizers PI Industries Limited

Block trade

29-Jan-13

Private Placement Private Placement Inbound Acquisition

10-Jan-13

Karnalyte Resources Inc. Sree Ramcides Chemicals Private Limited PI Industries Limited PI Industries Limited Shree Renuka Sugars Limited SD Agchem (Netherlands) B.V. Zero Waste Agro Organics Private Limited Bisco Bio Sciences Private Limited Crystal Protection Limited Crop Private

04-Dec-12

04-Dec-12 04-Oct-12 28-Sep-12

Block trade Block trade Block trade

13-Jul-12

Outbound Acquisition Domestic Acquisition

23-Apr-12

21-Mar-12

Inbound Acquisition Domestic Acquisition

03-Nov-11

31-May-11

Sabero Organics Gujarat Limited Fertilizer Manufacturing Facilities Chhattisgarh

Domestic Acquisition Block trade

31-May-10

in

Mean Median

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MACRO ANALYSIS OF FERTILIZER INDUSTRY

MARKET SHARE OF MAJOR PLAYERS IN INDIAN FERTILIZER INDUSTRY, FY2012

BY REVENUE, FY2012

Indian Farmers Fertilizer Co-operative Limited accounted for ~% of the market in FY2012 and generated revenue worth INR ~ crore during the year National fertilizer limited is the second largest player in the fertilizer market in India. It accounted for a share of ~% in the overall fertilizer market in India and generated revenue worth INR ~crore in FY2012. The company has ~ urea production plants with a total installed capacity of ~ million tonnes. Table: Market Positioning of Major Players on the Basis of Revenue in INR Crore and Percentage, FY 2012
Leading Fertilizer Companies Indian Farmers Fertilizer Co-operative Limited (IFFCO) National Fertilizers Limited Zuari Agro Chemicals Limited Nagarjuna Fertilizers and Chemicals Limited Krishak Bharati Co-operative Limited Mangalore Chemicals & Fertilizers Limited Gujarat State Fertilizer & Chemical Co. Limited Coromandel International Limited Chambal Fertilizers and Chemicals Limited Madras Fertilizers Limited The Fertilizers and Chemicals Travancore Limited Rashtriya Fertilizers and Chemicals Limited Revenue (INR Crore) Market Share (%)

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Deepak Fertilizers And Petrochemicals Corporation Limited Others Total

NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED MANAGEMENT OUTLOOK AND FUTURE PROJECTIONS

Nagarjuna Fertilizers and Chemicals Limited has a dominating position in the southern region of India with approximately ~% of the companys revenues came from the same in FY2012 After doing an extensive research on the fertilizer market of Africa, the company is planning to discover and capture the opportunities available in the uncover market of Africa

NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FUTURE PROJECTIONS

Nagarjuna Fertilizers and Chemicals Limited is planning to enhance the quality of its products by introducing advance tools to measure the actual nutrients requirements and status of the crop The company is planning to increase to expand its operational capacity. As of now the company has an operating capacity ~ million tonnes and Nagarjuna is expected to increase its capacity upto ~ million tonnes in the near future Nagarjuna Fertilizers and Chemicals Limited is expected to increase its geographical reach in the international market by covering different countries of Africa With the introduction of new products and covering different geographies it is expected that the EBITDA of the company will outperform the growth showcased from FY2009-FY2013. The company has showcased an EBITDA growth of ~% from FY2009-FY2013 and it is expected that the company will increase it to a CAGR of ~% from FY2013-FY2017

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Nagarjuna Fertilizers and Chemicals Limited Future Projections on the Basis of Revenue, EBITDA Margin and Net Profit Margin in INR Crore and Percentage, 2014-2017
12,000.0 10,000.0 8,000.0 6,000.0 4,000.0 2,000.0 0.0 FY'2014 Revenue FY'2015 EBITDA Margin FY'2016 FY'2017 Net Profit Margin 12.0% 10.0% in Percentage 8.0% 6.0% 4.0% 2.0% 0.0%

NAGARJUNA FERTILIZERS AND CHEMICALS LIMITED FINANCIALS FUTURE PROJECTIONS

Over the year's shareholders funds of the company has shown a constant growth as the company is constantly generating after tax profit. Net worth of the company has shown a CAGR growth of ~% from FY2011-FY2013 due to huge growth in profit after tax of the company Outsider funds of the company include both long term and short term loan of the company. Long term loans constitute only ~% of the total outsider funds in as on 31st March 2013

INR Crore

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DISCLAIMER

The research reports provided by Ken Research are for the personal information of the authorized recipient and is not for public distribution and should not be reproduced or redistributed without prior permission. You are permitted to print or download extracts from this material for your personal use only. None of this material may be used for any commercial or public use. The information provided in the research documents is from publicly available data and other sources, which are reliable. Efforts are made to try and ensure accuracy of data. With respect to documents available, neither the company nor any of its employees makes any warranty, express or implied, including the warranties of merchantability and fitness for a particular purpose, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use will not infringe privately owned rights. The report also includes analysis and views expressed by our research team. The research reports are purely for information purposes. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Investors should not solely rely on the information contained in the research documents and must make investment decisions based on their own investment objectives, risk profile and financial position. The recipients of this material should take their own professional advice before acting on this information. Ken Research will not accept returns of reports once dispatched due to the confidentiality of information provided in our reports. In case, a report qualify for return, we will issue a credit, minus shipping charges, of equal value to the original purchase price, toward a future purchase no refunds. The decision about whether the product return can be accepted or not is solely at our discretion. Any dispute will be subject to the laws of India and exclusive jurisdiction of Indian Courts.

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