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Continued price pressure in export technicals
View Risks →Coromandel International Limited — Q1 FY25
Coromandel's Q1 FY25 consolidated total income fell 16.6% YoY to INR 4,783 crore, primarily due to lower subsidy rates.
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Coromandel's Q1 FY25 consolidated total income fell 16.6% YoY to INR 4,783 crore, primarily due to lower subsidy rates. EBITDA declined 28.6% to INR 506 crore, with margin contracting ~180bps to 10.6% as raw material prices rose and NBS rates compressed margins. The non-subsidy EBITDA mix improved to 25% (vs 16% last year). Fertilizer volumes were flat at 8.4 lakh tons, but NPK share rose to 87%. Crop protection volumes grew 5%, with new products contributing 22% of domestic formulation sales. Management expects margin recovery in H2 aided by backward integration, Senegal rock blending, and normalization of channel inventory. Key risks include continued price pressure in export technicals and potential delay in subsidy rate revisions.
कोरोमंडल की पहली तिमाही (Q1 FY25) की कुल आय 16.6% घटकर ₹4,783 करोड़ रही, मुख्यतः सब्सिडी दरों में कमी के कारण। कच्चे माल की बढ़ती कीमतों और सब्सिडी दरों में कमी से मुनाफा (EBITDA) 28.6% गिरकर ₹506 करोड़ हो गया, और मार्जिन 10.6% रह गया। गैर-सब्सिडी वाले कारोबार का हिस्सा बढ़कर 25% हो गया। उर्वरक बिक्री स्थिर रही, लेकिन NPK उर्वरकों की हिस्सेदारी 87% तक पहुंच गई। फसल सुरक्षा उत्पादों की बिक्री 5% बढ़ी, जिसमें नए उत्पादों का योगदान 22% रहा। कंपनी को उम्मीद है कि साल की दूसरी छमाही में मार्जिन सुधरेगा, क्योंकि वे कच्चे माल की कमी दूर कर रहे हैं और बाजार सामान्य हो रहा है। जोखिमों में निर्यात कीमतों पर दबाव और सब्सिडी दरों में देरी शामिल है।
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Read Transcript →Quarter Snapshot
NPK Sales Share
87%
+42% YoY
NPK consumption increased 42% YoY, indicating shift towards balanced nutrition.
MOP Market Share
11.7%
+200bps YoY
Potash sales grew 32% to 480,000 tons, market share improved from 9.7%.
New Product Sales Share (CP)
22%
Not specified
New products introduced in last 3 years contributed 22% of domestic formulation sales.
Plant Capacity Utilization
96%
Not specified
Fertilizer plants operated at 96% capacity, focusing on improving product mix.
What Changed vs Last Quarter
NEW
Kakinada capacity expansion by 1 million ton approved
Board approved expansion of granulation capacity at Kakinada by 1 million ton; investment decision pending current project progress.
NEW
Senegal processing plant commissioning by Q2 FY25
New fixed processing plant at BMCC Senegal expected to complete trial runs by end of September, stabilizing production in H2.
NEW
Nano DAP to substitute 20-25% of DAP demand in 3-5 years
Management expects nano DAP to replace 20-25% of industry DAP consumption over the medium term, with Coromandel focusing on import-substitution states.
UPDATED
Fertilizer segment EBITDA guidance intact at INR 4,500-5,000 per ton
Management confirmed the earlier guidance for fertilizer EBITDA per ton remains unchanged despite Q1 margin pressure.
DROPPED
CapEx of INR 1,200-1,500 crore for FY25
Total capital expenditure for FY25 is estimated between INR 1,200 crore and INR 1,500 crore across multiple businesses.
DROPPED
Debottlenecking to add 3.5 lakh tons granulated capacity
Plans to debottleneck granulated capacity at Kakinada and Vizag, adding 3.5 lakh tons.
DROPPED
Nano DAP plant commissioning in June 2024
The Nano DAP plant at Kakinada with 1 crore bottle capacity is awaiting regulatory approvals and expected to start production in June 2024.
NEW RISK
Continued price pressure in export technicals
Export prices remain soft due to Chinese dumping; management expects pressure for another 1-2 quarters.
NEW RISK
Subsidy rate lag and margin compression
NBS rates fixed in Feb-Mar did not fully reflect subsequent raw material price increases, compressing Q1 margins. Recovery depends on timely revision.
NEW RISK
BMCC Senegal profitability timeline uncertain
Analyst questioned when BMCC JV would turn EBITDA positive; management cited H2 stabilization but no clear breakeven timeline.
NEW RISK
DAP special subsidy uncertainty
Government announced special DAP subsidy but NPK subsidy unchanged; management may need to moderate trade discounts, impacting margins.
RISK GONE
Crop protection margin pressure persists
Global inventory overhang continues to pressure margins in the crop protection business despite volume growth.
RISK GONE
Government subsidy policy uncertainty
Potential shift to direct benefit transfer (DBT) for fertilizers could impact pricing flexibility and margins.
RISK GONE
Dependence on monsoon for fertilizer demand
Below-normal monsoon in key markets has historically impacted volumes; any deviation from normal rainfall could affect sales.
🤫 Topics management stopped discussing
Mentioned in Q2 FY24, Q3 FY24
Board approved setting up a sulfuric acid plant at Karnataka fertilizer unit and a 200,000-ton phosphoric acid plant at Kakinada, with total capex of ~₹2,000 crore.
Mentioned in Q1 FY24, Q3 FY24
Elevated inventory, demand slowdown, and declining commodity prices globally continue to pressure the crop protection business, despite volume growth.
Mentioned in Q3 FY24, Q4 FY24
Plans to debottleneck granulated capacity at Kakinada and Vizag, adding 3.5 lakh tons.
Mentioned in Q1 FY24, Q3 FY24
Company's patented Nano DAP has received encouraging market response; Kakinada nano plant to be ramped up.
Mentioned in Q2 FY24, Q4 FY24
The Nano DAP plant at Kakinada with 1 crore bottle capacity is awaiting regulatory approvals and expected to start production in June 2024.
Fast read
Guidance and risk preview
Management confirmed the earlier guidance for fertilizer EBITDA per ton remains unchanged despite Q1 margin pressure.
Export prices remain soft due to Chinese dumping; management expects pressure for another 1-2 quarters.
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