Coromandel International Limited — Q1 FY24
Coromandel reported a steady Q1 FY24 with consolidated revenue of INR 5,758 crore (down 1% YoY) and EBITDA of INR 709 crore (up 3.5% YoY).
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Claim Ledger
Did management answer the analysts?
Every material analyst question, graded on whether management actually answered it — with the verbatim exchange and quantitative claims checked against filed numbers.
50%Questions answered3Evaded / deflected11Questions audited
Partial answer
High priority
Reason for EBITDA margin increase in NPK/DAP manufacturing
Asked by Sumant Kumar, Motilal Oswal
Management gave annual guidance but did not explain the quarterly YoY increase.
deferred to annual viewno quarterly margin given
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Question
Can you talk about EBITDA margin % for manufacturing NPK and DAP, DAP fertilizer, since it has gone up YOY, so what is the reason for that?
Jayashree Satagopan, CFO
When you look at it on an annualized basis, I think we will be in the range of INR 5,500-INR 6,000, as we had indicated earlier.
Partial answer
Medium priority
SSP business EBITDA contribution and volume growth drivers
Asked by Nirav Jimudia, Anvil Research
Provided per-ton margin range but not total EBITDA contribution.
no absolute EBITDA figure given
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Question
If you can share your qualitative thoughts on this, and if it's possible to share, how much is the contribution in terms of EBITDA from the SSP business in FY 23 or probably in Q1 of FY 24, that would be helpful.
Jayashree Satagopan, CFO
Normally, in SSP business, the SSP products have a margin of about INR 2,000-INR 2,500. In some cases where we have value-added SSP, it can go up to INR 3,000 per metric ton.
Answered
High priority
Subsidy vs non-subsidy EBITDA share in Q1 FY23 and Q1 FY24
Asked by Tarang Agrawal, Old Bridge Capital
Provided specific percentages for both years.
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Question
The subsidy share of EBITDA in the base quarter, in the Q1 of FY 23, was it 78% or 87%?
Jayashree Satagopan, CFO
Last year, non-subsidy was 70... It was 84% during this year, and in the last year, subsidy business share was 77%.
Evasive
Medium priority
Provision taken in Q4 FY23 for raw material price decline
Asked by Tarang Agrawal, Old Bridge Capital
Acknowledged provision but did not quantify it.
no amount givenreferred to notes
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Question
Was there any provision that you took in Q4 2023 as a matter of prudence and consonance with lighting up of raw materials? If so, could you qualify the amount?
Jayashree Satagopan, CFO
We have made necessary adjustment in the books as a conservation principle based on the subsidy reduction that was supposed to come in. This has also been disclosed in the notes to the accounts.
Evasive
High priority
Risk to EBITDA guidance if rock prices don't fall
Asked by Vishal Biraia, Bandhan Mutual Fund
Did not directly address the risk scenario, just reiterated guidance.
repeated guidance without addressing risk
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Question
When you say for the full year, INR 5,500 per ton-INR 6,000 per ton for manufactured, this assumes that the rock should fall, consequently, right? In case that doesn't happen, then this number could be at risk?
Jayashree Satagopan, CFO
Taking into consideration all these factors, we believe that about INR 5,500 million-INR 6,000 million achievable business for the year.
Partial answer
Medium priority
Economics of Nano DAP and drone business revenue
Asked by Bharat Sheth, Quest Investment Advisors
Provided qualitative updates but no quantitative economics or revenue.
no revenue or profit figures for drones
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Question
Can you please throw some light on these economics of Nano DAP and the raw material of the availability... Second, any color on this, our investment in this drone business. Is it generating revenue or not?
Sankarasubramanian S, MD & CEO; Jayashree Satagopan, CFO
Nano DAP... factory is coming up in Karnataka, and hopefully we should be able to commercialize the plant in October... On the drones... they have recently received an order of 100 drones from IFFCO.
Partial answer
Medium priority
New chemistries for specialty chemicals and CDMO timeline
Asked by Arjun Khanna, Kotak Mutual Funds
Gave general update but did not specify the chemistries.
no specific chemistries named
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Question
Could you help us with what are these chemistries we are looking at entering into? Would the CDMO discussions with innovators start off only post the STP in the heat, or is something that could start now?
Raghuram Devarakonda, Executive Director
We have identified those molecules that we can potentially manufacture using the existing setup... We do have inquiries that come up from some of the Japanese innovators as well as European ones.
Evasive
Medium priority
Cash deployment plan beyond FY24, split between fertilizer and non-fertilizer
Asked by Naushad Chaudhary, Aditya Birla Sun Life Mutual Fund
Declined to provide a breakdown despite being asked directly.
refused to give percentage split
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Question
In terms of the deployment within fertilizer and non-fertilizer. Broadly, if you have to give us the %, what % of would go to fertilizer business in next 2-3 years, and, what % would be non-fertilizer investment?
Jayashree Satagopan, CFO
We are not doing a segregation of saying, 'I want to invest only so much in our group business.' It is attractive, and it makes value in the longer term, there will definitely be investment allocated to that.
Answered
Medium priority
CDMO business model: manufacturing only or full innovation chain
Asked by Ramesh Sankaranarayanan, Nirmal Bang Equities
Clearly explained the phased approach.
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Question
Are you going to be just doing manufacturing contracts, or will you be involved in the entire innovation process?
Raghuram Devarakonda, Executive Director
The eventual destination is what you just described, but, you'll appreciate, I mean, the customers would like us to graduate step by step. We're going to start with manufacturing and then graduate step by step.
Evasive
Low priority
Additional CapEx for specialty chemicals in next 2 years
Asked by Vishnu Kumar, Spark Capital
Acknowledged possibility but gave no numbers.
no specific amount given
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Question
In the chemical business, on the specialty chemical, is there any additional CapEx in thought as to how much we probably might consider to additionally invest in the next 2 years?
Jayashree Satagopan, CFO
Currently we do not have anything majorly planned, but based on the business case, I do believe there will be some modest investment required for this segment as well.
Partial answer
Medium priority
Scope for further change in product mix and utilization increase
Asked by Rohan Gupta, Nuvama Wealth Management
Gave qualitative direction but no quantitative utilization target.
no specific utilization number
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Question
Do you see that this year we have a further scope for any change in mix and further manufacturing of complex fertilizer while continuously going for trading and DAP, and how much utilization we can increase further?
Sankarasubramanian S, MD & CEO
Our utilization will be more or less the same as last year, because we also did well. Also we use different type of input raw materials, which can increase the throughput.
Answered
Medium priority
Debt on books and processing prices
Asked by Rohan Gupta, Nuvama Wealth Management
Provided clear answers on debt and processing price.
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Question
What is the debt number right now, and what is the processing prices current contract right now?
Jayashree Satagopan, CFO; Sankarasubramanian S, MD & CEO
We don't have debt on the books. We don't have any borrowings. There have been some very short-term working capital limits that we avail... $2-$3 is the processing price.