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Ammonia price spike may pressure margins
View Risks →Coromandel International Limited — Q2 FY25
Coromandel reported a strong Q2 FY25 with consolidated revenue of INR 7,498 crore (+7% YoY) driven by 13% volume growth in fertilizers and a 20%+ volume growth in domestic crop protection formulations.
bullish
high
Financial stats pending filing verification
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Coromandel reported a strong Q2 FY25 with consolidated revenue of INR 7,498 crore (+7% YoY) driven by 13% volume growth in fertilizers and a 20%+ volume growth in domestic crop protection formulations. EBITDA came in at INR 975 crore (margin 13.0%), down 7.9% YoY due to volatile commodity prices and lower subsidy rates, but sequentially improved. PAT was INR 659 crore (-12.7% YoY). The company benefited from captive sulfuric acid production (saving ~INR 160-170 crore annually) and operational efficiencies. Management guided for sustained EBITDA per ton of INR 4,500-5,000, backed by backward integration and a new 7.5 lakh ton granulation capacity at Kakinada (by FY27). The crop protection segment is gaining traction with a new multipurpose plant (INR 170 crore) for off-patent fungicides. Key risk: sustained high ammonia prices could pressure near-term margins.
कोरोमंडल ने दूसरी तिमाही में मजबूत प्रदर्शन किया। कंपनी की कुल कमाई 7,498 करोड़ रुपये रही, जो पिछले साल से 7% ज्यादा है। खाद की बिक्री 13% और फसल सुरक्षा उत्पादों की बिक्री 20% से ज्यादा बढ़ी। कंपनी का मुनाफा (EBITDA) 975 करोड़ रुपये रहा, लेकिन कच्चे माल के महंगे दाम और कम सब्सिडी के कारण यह पिछले साल से 7.9% कम है। शुद्ध मुनाफा (PAT) 659 करोड़ रुपये रहा, जो 12.7% कम है। कंपनी को अपने खुद के सल्फ्यूरिक एसिड उत्पादन से हर साल 160-170 करोड़ रुपये की बचत हो रही है। प्रबंधन का कहना है कि वे हर टन खाद पर 4,500-5,000 रुपये का मुनाफा कमाने की उम्मीद रखते हैं। नए कारखाने से 2027 तक उत्पादन बढ़ेगा। लेकिन अमोनिया के दाम बढ़ने से मुनाफा कम हो सकता है।
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Read Transcript →Quarter Snapshot
Fertilizer sales volume (H1)
21.5 lakh tonnes
+7% YoY
Record half-yearly sales volume driven by strong Kharif season and market share gains.
Market share in nutrients (Q2)
20%
+5pp YoY
Significant increase from 15% last year, reflecting improved penetration.
Nano DAP bottles sold (H1)
16.8 lakh bottles
New product
Initial volumes focused on consumption; scaling up planned in Q3.
Domestic formulation volume growth (Q2)
>20%
+20% YoY
Driven by 10 new product launches including a patented molecule.
What Changed vs Last Quarter
NEW
Granulation capacity expansion to 30 lakh tonnes at Kakinada
Board approved 7.5 lakh tonne brownfield expansion, making it one of India's largest phosphate sites. Commissioning expected in ~2 years.
NEW
Multipurpose plant at Ankleshwar for fungicides
INR 170 crore investment for off-patent fungicide molecules; commissioning in 18 months. Targets Latin American and domestic markets.
NEW
Sulfuric acid cost savings of INR 160-170 crore per annum
Structural cost advantage from captive sulfuric acid production and power generation, expected to double from current INR 40-45 crore.
UPDATED
EBITDA per ton guidance of INR 4,500-5,000
Management reiterated sustainable EBITDA per ton range for fertilizer business, supported by backward integration and captive intermediates.
DROPPED
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.
DROPPED
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.
DROPPED
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.
NEW RISK
Ammonia price spike may pressure margins
Ammonia prices rose sharply due to Middle East production outages; if sustained, could compress Rabi season margins despite product mix flexibility.
NEW RISK
DAP subsidy compensation may not fully offset cost
Analyst questioned if higher DAP subsidy changes production mix; management confirmed they will continue to prioritize NPK and import DAP, implying limited margin benefit.
NEW RISK
Crop protection CDMO/specialty chemicals progress slow
Management acknowledged that CDMO and specialty chemicals initiatives are still in early stages; no near-term revenue visibility despite prior announcements.
NEW RISK
Geopolitical risks to raw material supply
Global supply chain disruptions and Middle East tensions could impact phosphoric acid and rock phosphate availability, though company maintains 3-4 months inventory.
RISK GONE
Continued price pressure in export technicals
Export prices remain soft due to Chinese dumping; management expects pressure for another 1-2 quarters.
RISK GONE
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.
RISK GONE
BMCC Senegal profitability timeline uncertain
Analyst questioned when BMCC JV would turn EBITDA positive; management cited H2 stabilization but no clear breakeven timeline.
RISK GONE
DAP special subsidy uncertainty
Government announced special DAP subsidy but NPK subsidy unchanged; management may need to moderate trade discounts, impacting margins.
🤫 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
Board approved 7.5 lakh tonne brownfield expansion, making it one of India's largest phosphate sites.
Ammonia prices rose sharply due to Middle East production outages; if sustained, could compress Rabi season margins despite product mix flexibility.
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