COROMANDEL - Coromandel International Limited Share Price

Management Outlook and Major Points:

Outlook:
Coromandel International's management projects a positive outlook driven by strong agricultural conditions, government infrastructure initiatives, and strategic expansions. Favorable monsoon rains, high reservoir levels in southern regions, and expected La Nina-neutral conditions bode well for future crop seasons. The company anticipates stable raw material prices and improved operational efficiencies from new facilities. Growth is expected across fertilizer, crop protection, and retail segments, supported by market share gains, product diversification, and expansion into northern markets.

Major Points:

1. Agriculture & Policy Support:

   • Robust monsoon and reservoir levels enhance crop prospects.
   • Government irrigation projects (Ken-Betwa, Polavaram) to expand arable land.
   • Subsidy extensions and incentives for DAP/NPK transition to ensure fertilizer availability.

2. Operational Performance:

   • Fertilizer production rose 5% industry-wide; NPK demand surged 27% in Q3.
   • Plants operated at 95% capacity, with record phosphoric acid production.
   • New Kakinada sulfuric/phosphoric acid plants to bolster margins (commissioning by Q4 2026).

3. Expansion & Innovation:

   • NPK capacity expansion (7.5 lakh tons) underway; retail outlets increased to 810.
   • Nano DAP sales captured 40% market share; drone services covered 1.1 lakh acres.
   • Specialty nutrients (water-soluble/organic) and bioproducts (plant extracts) to drive future growth.

4. Financial Highlights:

   • Q3 revenue up 28% YoY; EBITDA doubled to Rs.722 crore.
   • Subsidy receivables at Rs.2,095 crore; strong cash position supports capex.
   • Interim dividend of Rs.6/share declared.

5. Segment Growth:

   • Crop Protection: 15% domestic and 5% export growth; new formulations contribute 24% of sales.
   • Retail: 20% revenue growth; piloting CoroCare stores for agri-services.
   • SSP: Focus on value-added grades (Gro Plus, urea-SSP) to boost margins (~Rs.2,500/ton).

6. Strategic Initiatives:

   • Raw material security via Senegal's Baobab Mining (target: 5 lakh tons rock phosphate).
   • Multi-product Crop Protection plant in Ankleshwar to enhance global exports.

The company remains focused on balancing volume growth with margin improvement, leveraging captive inputs, and scaling high-margin specialty products.

Question 1:
Ma'am, if you can share what was the volume growth for Mancozeb in 9 months of FY '25 vis-a-vis of 9 months of last year as well as also if you can share that like recently, we have seen the prices of Mancozeb in the international market moving up. So how much of that is captured in Q3? And how much it is still left to be captured going forward?
Answer: Management declined to share specific product-wise volume/pricing details but emphasized a strategic shift toward high-value, low-volume products and new technical registrations. Capacity expansions are planned to improve margins and address export/domestic demand, with brownfield expansions and repurposing existing plants for newer molecules.

Question 2:
Sir, second question is on the SSP side. How do you see the volume growth for SSP in FY '25 and FY '26? What margins per ton are currently being made on SSP?
Answer: SSP volumes grew 29% YoY in Q3, driven by value-added products like Gro Plus and urea SSP. Margins range Rs.1,500"“Rs.2,000/ton, likely rising to Rs.2,500/ton as differentiated products (targeting 60% of volumes) scale. Capacity expansion to 1 million tons in 2 years is planned, focusing on granulated and specialty grades.

Question 3:
POS volume this quarter has been very strong. What is driving this? Would Q4 dispatches see double-digit growth?
Answer: Strong POS growth (73% YoY consumption) stemmed from favorable monsoon conditions, reduced channel inventory, and crop acreage expansion. Q4 volumes will align with annual maintenance schedules and market demand, not necessarily double-digit growth. Northern market expansion (doubling shipments to 3.1 lakh tons) supports long-term volume growth.

Question 4:
For FY '26, what volume growth is expected? Will it come from manufacturing or trading?
Answer: Growth will combine manufacturing (debottlenecking, Ennore plant repurposing) and imports. New Kakinada NPK plant (7.5 lakh tons by Q4 2027) and northern market penetration (MP, Rajasthan, UP) will drive volumes. No specific FY26 guidance, but strategic focus on diversified sourcing and capacity expansion.

Question 5:
Are there supply chain acquisitions planned post-Baobab Mining? Will Baobab be profitable at 5,00,000 tons?
Answer: Baobab Mining (Senegal) will scale to 5,00,000 tons by FY27, improving cost efficiency. Integrated profitability (not standalone) is prioritized. No immediate acquisitions; rock phosphate security is ensured via contracts and captive mining. Current operations ship 1 vessel/45 days, targeting 30 days post-stabilization.

Question 6:
What is the retail business turnover and PBT status? How many stores are planned?
Answer: Retail revenue grew 20% YoY in Q3, with 18 stores added (total 810). Most stores are PBT-positive. Plans to double stores to 1,500+ by FY27 include pilots for CoroCare (crop protection/drone services). Margins improved 17% YoY, driven by third-party sales and specialty/organic products.

Question 7:
How much of Q3 volume came from northern markets? What are global phosphoric acid/rock supply dynamics?
Answer: Northern markets contributed 3.1 lakh tons (doubling YoY). Global phosphoric acid supply remains stable; Coromandel diversified suppliers (6"“7 sources). New Kakinada plant (2 lakh tons) and captive rock (Baobab) will secure raw materials. Rock prices softened, with no major supply risks.

Question 8:
What is the fertilizer margin outlook? How will SSP's product mix affect this?
Answer: Fertilizer margins to improve 40% post-Kakinada plant commissioning (Q4 FY26), driven by captive sulfuric/phosphoric acid, lower conversion costs, and value-added SSP. Blended SSP margins (Rs.2,500/ton) will rise as urea SSP/Gro Plus reach 60% of volumes.

Question 9:
What is the Crop Protection export strategy amid pricing pressures?
Answer: Exports to grow via formulations (higher margins) in LatAm, SEA, and new EU/US registrations. Domestic B2C/B2B expansion (14 technicals) and new combinations will offset generic price pressures. Multi-product plant (Ankleshwar) to boost capacity for all segments.

Question 10:
Is there subsidy under-recovery in Q4? How will April subsidy revisions impact?
Answer: Subsidy challenges persist for DAP/N-10 grades due to raw material cost hikes. Industry requested government corrections. Q4 under-recovery risks exist, but FY26 negotiations may address gaps. Current focus on NPK over DAP aligns with subsidy stability.

Question 11:
When will drone/Dare Ventures subsidiaries turn profitable?
Answer: Dhaksha (drones) awaits defence orders (Rs.250 crore pending PDI) but sees agri-drone traction. Dare Ventures (agri-tech investments) remains minor. Minority losses (Rs.5"“6 crore/quarter) may reduce as subsidiaries scale.

Question 12:
What savings occurred from sulfuric acid backward integration? Recent price trends?
Answer: Sulfuric acid savings (Rs.180 crore/9M) came from captive production vs. imports ($90"“$100/ton). Prices rose from $80"“$85 to $100/ton. Power savings and stability from new Vizag plant (100%+ utilization) aided margins.

Question 13:
What is the unique grade share in fertilizer volumes?
Answer: Unique grades (e.g., NPK 20-20-0-13) constituted 34% of Q3 volumes. Northern market expansion and balanced nutrition focus aim to increase this share, leveraging government support for DAP alternatives.