Coromandel International Limited — Q3 FY24
Coromandel's Q3 FY24 results were sharply down YoY, with consolidated revenue of ₹5,523 crore (-33.8%), EBITDA of ₹358 crore (-54.2%), and PAT of ₹288 crore (-69.3%).
bearish
high
✓ Verified against BSE filing
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.
88%Questions answered0Evaded / deflected12Questions audited
Answered
High priority
Impact of new government margin guidelines on Coromandel's profitability.
Asked by Sumant Kumar, Motilal Oswal Financial Services Ltd.
Management clearly explained the new margin guidelines and their categorization.
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Question
So, can you talk about the price fertilizer, non-urea fertilizer and the price control, and government is trying to fix profit margin also...
Jayashree Satagopan, President and CFO
The government has issued an office memorandum... integrated manufacturers will be able to get a 12% margin... manufacturers who do not have backward integration... could get about a 10%, and importers about 8%.
Answered
High priority
Inventory loss and phosphoric acid capacity expansion.
Asked by Sumant Kumar, Motilal Oswal Financial Services Ltd.
Management provided specific numbers for capacity addition and inventory loss.
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Question
And the second question is phosphoric acid. Can you guide us how much capacity we are going to increase and any inventory loss in this...?
Jayashree Satagopan, President and CFO
On the PA capacity, we are looking at, adding about 650 tons per day capacity... inventory, hit is concerned for the quarter... in the range of about INR 30 crore or so.
Answered
High priority
Clarification on Coromandel's classification under new guidelines.
Asked by Arjun Khanna, Kotak Mahindra Asset Management Company
Management confirmed the classification directly.
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Question
Just to clarify, with the latest guidelines, Coromandel will be treated as an integrated manufacturer? Would that be the right understanding?
Jayashree Satagopan, President and CFO
Yeah, because we have both granulation as well as phosphoric, sulfuric plants here, we would be an integrated manufacturer.
Partial answer
High priority
Impact of unreasonable profit clause on previous year.
Asked by Arjun Khanna, Kotak Mahindra Asset Management Company
Management gave an initial assessment but deferred final conclusion.
initial assessment onlydeferred to year-end
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Question
Can you confirm on the call that we would have no impact from that aspect?
Jayashree Satagopan, President and CFO
This guideline is effective first of April 2023... my initial assessment is it's not likely to have an impact for the company.
Answered
Medium priority
Treatment of retail subsidiary margins under new guidelines.
Asked by Arjun Khanna, Kotak Mahindra Asset Management Company
Management clarified that retail margins are included in overall margin.
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Question
Gromor, given it's a subsidiary, would it be subsumed in that 12%, that's considered separately as a dealer, so that impact would be plus?
Jayashree Satagopan, President and CFO
It will be taken as the same, and the margin that we make on the sales will be considered as the overall margin for the company.
Partial answer
Medium priority
Impact of cash-rich balance sheet on margin calculation.
Asked by Vishnu Kumar, Avendus Spark
Management acknowledged the point but minimized its practical impact.
acknowledged theoretically but downplayed impact
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Question
Having large cash on balance sheet, would be a detriment to a nutrient or a fertilizer player. Would that be a right understanding?
Jayashree Satagopan, President and CFO
One can interpret it that way... I don't think it's going to impact to a very great extent, considering the current situation.
Answered
High priority
Whether 12% PBT margin is on actual or normalized costs.
Asked by Dheeresh Pathak, WhiteOak Capital
Management gave a clear one-word answer.
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Question
Is it going to be on actual basis, or is it going to be on a normalized basis?
Jayashree Satagopan, President and CFO
It will be on actual.
Answered
High priority
Why current margins are below 12% PBT despite flexibility.
Asked by Dheeresh Pathak, WhiteOak Capital
Management explained multiple factors including subsidy rates and demand.
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Question
The only reason we are not able to increase MRP is because it is an election year period. Is that the only difference?
Jayashree Satagopan, President and CFO
Not every year is going to be the same... Last quarter has been tough. The NBS rates have been sharply corrected... there is no point in increasing the MRP and not being able to sell.
Answered
High priority
Phosphoric acid capacity and backward integration details.
Asked by Bharat Sheth, Quest Investment Advisors Pvt Ltd
Management provided specific capacity numbers and remaining import needs.
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Question
How much capacity have we planned for this phosphoric plant... how much still we need to have a backward integration scope is there?
Jayashree Satagopan, President and CFO
The phosphoric plant that we are looking at is a 200,000-ton capacity per annum... after this plant comes in place, we will still have about 200,000 tons or so, which we might have to import.
Partial answer
Medium priority
Historical average margins vs new guideline ceilings.
Asked by Gagan Thareja, ASK Investment Managers
Management avoided giving specific historical margin numbers.
declined industry comparisongave qualitative answer
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Question
What in your experience have been the cyclical average margins that Coromandel would have seen...?
Jayashree Satagopan, President and CFO
I may not be able to answer you at the industry level, but if you look at the performance of the company over a period in time, I don't think that companies have hit this line of cap at all.
Answered
High priority
Progress on crop protection business and Dhaksha drones.
Asked by Ankur Periwal, Axis Capital Ltd.
Management provided volume growth and specific order book number.
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Question
Your thoughts on both B2B as well as B2C growth, and as well as how is the progress going on Dhaksha side?
Raghuram Devarakonda, Executive Director; Jayashree Satagopan, President and CFO
In Q3, we grew handsomely, in volume terms... we have close to INR 300 crore of an order book for Dhaksha at this point in time.
Answered
High priority
Reason for stark reduction in per ton margins in Q3.
Asked by Tarun, Old Bridge Asset Management
Management explained the factors clearly.
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Question
What drove such a stark reduction in the per ton margins?
Jayashree Satagopan, President and CFO
The impact of channel inventory has been taken in Q2 numbers, but the sales in Q3, the subsidy realization is also very low... raw material prices slightly going up.