💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue grew 30% YoY in Q2 FY26 to INR 9,654 Cr. The Crop Protection (CPC) segment (consolidated including NACL) grew 42% YoY to INR 1,069 Cr in Q2 FY26, while standalone CPC grew 10% to INR 829 Cr. Nutrients and allied businesses remain the primary revenue driver, benefiting from record fertilizer sales volumes.

Geographic Revenue Split

While specific regional percentages are not fully itemized, the company holds a dominant position in Andhra Pradesh and Telangana (India's largest complex-fertilizer market) and is expanding its footprint in North and Central India. International operations include subsidiaries in Senegal, Brazil, Mexico, and Australia, with a new subsidiary planned for the Philippines.

Profitability Margins

Consolidated PAT margin stood at 8% in Q2 FY26. Standalone CPC PBIT margins improved significantly from 15% to 20% YoY in Q2 FY26. However, the consolidated CPC margin was diluted to 13.5% due to the inclusion of NACL, which currently operates at a lower margin of 4% compared to its historical 9-11% range.

EBITDA Margin

Consolidated EBITDA margin was 12% in Q2 FY26, a slight compression from 13% in the previous year. Absolute EBITDA grew 18% YoY to INR 1,147 Cr. The company aims to sustain an EBITDA per tonne of over INR 5,000 in the nutrients business through backward integration and favorable NBS rates.

Capital Expenditure

Planned annual capital expenditure is between INR 800 Cr and INR 1,000 Cr. Key investments include setting up new granulation, phosphoric acid, and sulphuric acid capacities at the Kakinada plant to enhance backward integration and production efficiency.

Credit Rating & Borrowing

The company maintains a 'CRISIL AAA/Stable' long-term rating and 'CRISIL A1+' short-term rating. It is net debt-free with a 0.0 debt-to-equity ratio and maintained net liquidity of ~INR 450 Cr as of August 31, 2025, after funding the INR 820 Cr NACL acquisition through internal accruals.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Rock Phosphate (secured via 53.8% stake in BMCC, Senegal), Phosphoric Acid, Sulphuric Acid, and Ammonia. These materials constitute the bulk of the cost of goods sold for the phosphatic fertilizer segment.

Import Sources

Sourced globally with strategic linkages in Senegal (Rock Phosphate via BMCC) and South Africa (dividend income and supply potential from Foskor). The company also utilizes domestic sourcing for various chemical intermediates.

Key Suppliers

Key strategic partners include Baobab Mining and Chemicals Corporation (BMCC) in Senegal and Foskor (Pty) Ltd in South Africa. The company also engages in contract manufacturing for global players in the CPC segment.

Capacity Expansion

Current expansion includes new sulphuric acid and phosphoric acid plants at Kakinada. The company is also scaling its drone manufacturing through Dhaksha Unmanned Systems and expanding its retail footprint by adding over 100 stores in FY25.

Raw Material Costs

Raw material costs are highly volatile and linked to global commodity prices. The company mitigates this through backward integration (BMCC stake) and long-term supply agreements. Profitability is sensitive to the alignment of Nutrient Based Subsidy (NBS) rates with these input costs.

Manufacturing Efficiency

The company emphasizes a 'zero-incident culture' with a Total Recordable Injury Rate (TRIR) of 0.3. Efficiency is driven by integrated manufacturing at Kakinada, allowing for fungible production between DAP and NPK based on market demand.

Logistics & Distribution

Coromandel is expanding its reach into North and Central India. It also utilizes its drone subsidiary, Dhaksha, to offer 'drone-as-a-service' for liquid fertilizer and pesticide application, modernizing its distribution value proposition.

📈 Strategic Growth

Expected Growth Rate

25%

Growth Strategy

Growth will be driven by the integration of NACL (targeting a revenue of INR 1,000-1,200 Cr for NACL's B2C business), scaling the domestic formulation business to reach INR 1,000 Cr, and expanding the global CPC footprint in Latin America. Capacity expansions at Kakinada and the launch of 8 new bio-products will further support this CAGR.

Products & Services

Phosphatic fertilizers (DAP, NPK, SSP), Specialty Nutrients, Organic Fertilizers, Bio-pesticides, Chemical Pesticides (Formulations and APIs), Nano-fertilizers, and Unmanned Aerial Vehicles (Drones) for agricultural use.

Brand Portfolio

Gromor (implied as part of the branded formulation business), Dhaksha (Drones), and NACL (Crop Protection).

New Products/Services

Launched 8 new bio-fertilizers and biopesticides in Q2 FY26. The company is also scaling its 'Nano' product line and drone-based agricultural services.

Market Expansion

Targeting expansion in North and Central India for fertilizers and Latin America for the Crop Protection business. A new subsidiary is being established in the Philippines to tap into Southeast Asian markets.

Market Share & Ranking

2nd largest player in India's phosphatic-fertilizer market with ~18% share in DAP/NPK. Largest player in Single Super Phosphate (SSP) with ~15% market share.

Strategic Alliances

Strategic 53.8% stake in BMCC (Senegal) for rock phosphate. Collaboration with a global player for manufacturing APIs in the Bio-business segment.

🌍 External Factors

Industry Trends

The industry is shifting toward 'Integrated Farm Management' involving nano-fertilizers, bio-stimulants, and precision farming (drones). Coromandel is positioning itself as a total solutions provider rather than just a fertilizer manufacturer.

Competitive Landscape

Competes with major domestic fertilizer players and global CPC companies. Ranking 3rd or 4th in the Indian CPC pecking order following the NACL acquisition.

Competitive Moat

Moat is built on deep backward integration (acid plants and rock phosphate stakes), a massive rural retail network (100+ new stores), and a leading 18% market share in complex fertilizers. These are sustainable due to the high capital intensity and regulatory hurdles for new entrants.

Macro Economic Sensitivity

Highly sensitive to agricultural GDP growth and rural income levels. Inflation in global raw material prices (Ammonia, Sulfur) directly impacts production costs.

Consumer Behavior

Increasing farmer adoption of drone technology for spraying and a shift toward bio-based crop protection products due to environmental concerns.

Geopolitical Risks

Exposure to geopolitical stability in West Africa (Senegal) for rock phosphate and global trade dynamics affecting the export of CPC molecules.

⚖️ Regulatory & Governance

Industry Regulations

Highly regulated by the Department of Fertilizers; profitability depends on the Nutrient Based Subsidy (NBS) scheme and timely subsidy payouts from the Government of India.

Environmental Compliance

Ranked in the top 7 percentile of global chemical companies in the Dow Jones Sustainability Indices (DJSI). Focus on desalination, rainwater harvesting, and plastic management.

Taxation Policy Impact

Subject to standard Indian corporate tax rates; specific fiscal incentives for the Kakinada expansion were not detailed.

Legal Contingencies

No major pending court cases or specific litigation values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

Volatility in NBS rates and raw material prices could impact EBITDA margins by 2-3%. Delays in government subsidy payments could increase working capital requirements significantly.

Geographic Concentration Risk

High concentration in Andhra Pradesh and Telangana, though actively diversifying into North and Central India.

Third Party Dependencies

Dependency on the Government of India for subsidies and on Senegal (BMCC) for critical rock phosphate supplies.

Technology Obsolescence Risk

Mitigated by investments in Dhaksha (Drones) and Nano-fertilizers to stay ahead of traditional chemical fertilizer displacement.

Credit & Counterparty Risk

Subsidy receivables from the Government of India represent the largest credit exposure; historically considered low risk but subject to timing delays.