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Subsidy under-recovery in Q4
View Risks →Coromandel International Limited — Q3 FY25
Coromandel reported a stellar Q3 FY25 with consolidated revenue of INR 7,049 crore (+28% YoY) and EBITDA of INR 722 crore (+102% YoY), driven by record NPK volumes (11.4 lakh tons primary sales, +21% YoY) and strong operating leverage.
bullish
high
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Coromandel reported a stellar Q3 FY25 with consolidated revenue of INR 7,049 crore (+28% YoY) and EBITDA of INR 722 crore (+102% YoY), driven by record NPK volumes (11.4 lakh tons primary sales, +21% YoY) and strong operating leverage. The company benefited from favorable monsoon, robust Rabi sowing, and a strategic shift from DAP to NPK, with its market share rising to 17% (vs 13% last year). Management guided for continued volume growth via debottlenecking and new capacity (7.5 lakh ton NPK plant by Q4 FY27), while backward integration (sulfuric acid savings of ~INR 180 crore in 9M) and value-added SSP products are expected to structurally improve margins. Key risks include potential subsidy under-recovery in Q4 and volatility in raw material prices (sulfur/sulfuric acid).
कोरोमंडल ने तीसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल कमाई 7,049 करोड़ रुपये रही, जो पिछले साल से 28% ज्यादा है। मुनाफा 722 करोड़ रुपये रहा, जो 102% बढ़ा। इसकी वजह है खाद की बिक्री में 21% का उछाल। अच्छी बारिश और रबी की बुआई से मांग बढ़ी। कंपनी ने डीएपी की जगह एनपीके खाद पर जोर दिया, जिससे बाजार हिस्सेदारी 13% से बढ़कर 17% हो गई। आगे भी उत्पादन बढ़ाने की योजना है। नए कारखाने से 2027 तक क्षमता बढ़ेगी। सल्फ्यूरिक एसिड बनाने से 180 करोड़ रुपये बचे। हालांकि, सरकारी सब्सिडी में कमी और कच्चे माल की कीमतों में उतार-चढ़ाव का जोखिम है।
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Read Transcript →Quarter Snapshot
NPK Primary Sales Volume
11.4 lakh tons
+21% YoY
Record quarterly volume driven by strong Rabi demand and market share gains in northern India.
Market Share (Consumption-based, 9M)
17%
+4pp YoY
Increased from 13% last year, reflecting successful expansion into new geographies.
Nano DAP Bottles Sold (9M)
25 lakh bottles
40% of national sales
Strong adoption; company accounts for 40% of total Nano DAP sales in India.
Drone Spraying Coverage (9M)
1.1 lakh hectares
New initiative
Scaled drone services; saves 90% water vs conventional methods; planned for further scale-up.
What Changed vs Last Quarter
NEW
Phosphoric acid plant (2 lakh tons) at Kakinada by Q4 FY26
Ongoing project expected to be commissioned by Q4 of next fiscal year (FY26).
NEW
SSP volume target of 1 million tons in two years
Aiming to reach 800,000 tons next year and 1 million tons thereafter, with 60% from value-added products.
NEW
Retail store count to double to ~1,600 by FY27
Currently at 810 stores; plan to add significantly in Q4 and next year to reach 1,500+ by FY27.
UPDATED
NPK capacity expansion to 7.5 lakh tons at Kakinada by Q4 FY27
New granulation plant to be commissioned in 24 months, targeting commercial production from Q4 FY27.
DROPPED
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.
DROPPED
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.
DROPPED
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.
NEW RISK
Subsidy under-recovery in Q4
Management noted that DAP margins are not adequate due to raw material cost increases; representation to government ongoing, but correction may not happen before April.
NEW RISK
Raw material price volatility (sulfur/sulfuric acid)
Sudden spike in sulfur and sulfuric acid prices due to demand from China and Indonesia could impact input costs.
NEW RISK
Delays in securing export orders for bioproducts
Export volumes in bioproducts were impacted due to delays in order finalization, though expected to recover in Q4.
NEW RISK
Competition and pricing pressure in crop protection exports
Analyst raised concern about pricing-led competition in export markets; management acknowledged but highlighted diversification and formulation foray as mitigants.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
RISK GONE
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.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q1 FY25, Q2 FY24, Q2 FY25, Q4 FY24
Management reiterated sustainable EBITDA per ton range for fertilizer business, supported by backward integration and captive intermediates.
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.
Fast read
Guidance and risk preview
New granulation plant to be commissioned in 24 months, targeting commercial production from Q4 FY27.
Management noted that DAP margins are not adequate due to raw material cost increases; representation to government ongoing, but correction may not...
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