Coromandel International Limited — Q1 FY26 earnings call

Call held 25 Jul 2025

Management summary

Coromandel International reported strong Q1 FY26 results with significant revenue and EBITDA growth driven by volume expansion and improved subsidy rates. The company made progress on strategic initiatives including the NACL acquisition, BMCC stake increase, and backward integration projects. Despite firm raw material prices, management is confident in sustaining profitability and expanding market presence through product diversification and agri-tech services.

Highlights

  • Consolidated total income of INR7,126 crores, up 49% YoY from INR4,783 crores in Q1 last year.

  • Consolidated EBITDA of INR782 crores, up 55% YoY from INR506 crores in Q1 last year.

  • Record primary sales volume of 11 lakh tons, marking a 31% growth.

  • Crop Protection and Bio segments revenue grew 31% to Rs 725 crores and EBIT moved up 77% to Rs 111 crores.

  • BMCC output expected to be closer to 300,000 to 400,000 tons per annum this year, with an aim to double in the next 2 years.

Concerns

  • Raw material prices for processed phosphates (DAP), Phos Acid, and sulfur remained firm or increased in Q1, impacting the value gap.

  • Subsidy outstanding as of June 30, 2025, was INR2,911 crores.

  • DAP market has been tight, though management is confident in future supply from Middle East and new capacities.

Key financials

  1. Consolidated Total Income ₹7,126 Cr +49%YoY
  2. Consolidated EBITDA ₹782 Cr +55%YoY
  3. Subsidy Received ₹1,300 Cr
  4. Subsidy Outstanding ₹2,911 Cr
  5. Primary Sales Volume 11 lakh tons +31%YoY
  6. POS Consumption 7 lakh tons +46%YoY

What they filed

Q1 FY27: revenue up 10.6%, net profit down 25.8% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue7,432 6,926 4,993 7,001 9,411 +27%8,457 +22%5,661 +13%7,744 +11%
EBITDA983 727 438 738 1,147 +17%758 +4%459 +5%621 −16%
Net profit696 525 389 508 816 +17%530 +1%154 −60%377 −26%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Crop Protection and Bio
    ₹725 Cr Revenue₹111 Cr EBIT
  • Bio Business
    100% Volume Growth100% Value Growth
  • Specialty Nutrient Business
    12% Volume Growth
  • Organic Fertilizer
    29% Volume Growth
  • SSP Business
    20% Volume Growth1.9 lakh tons Volume

Capital allocation

high confidence
  • Capex ₹2,000 Cr
    • Backward integration projects (phos acid and sulfuric acid) at Kakinada
    • Granulation project (7.5 lakh tons additional capacity)
    • Incremental capex for various product categories ₹300 Cr
    • Incremental capex for various product categories ₹500 Cr
    Jayshree Bajaj: 'Close to INR2,000 crores, we'll be spending.' S. Sankarasubramanian: 'The plant is likely to be commissioned in Q4 of this current financial year.' S. Sankarasubramanian: 'The investment can be in the range of INR300 crores to INR500 crores across various product categories in these business segments.'
  • Debt Debt disclosed
    S. Sankarasubramanian: 'company is working on 0 net debt-to-equity ratio.' S. Sankarasubramanian: 'company may have to resort to long-term funding, especially considering the fact the interest rate on long-term funding is at the lowest level. As soon as we have the right investment decisions, we'll be more than keen to support this with the debt instrument, which provides necessary tax hedge as well.'
  • M&A Baobab Mining and Chemicals Corporation (BMCC) Acquisition · Signed

    Secure captive rock sourcing for new plant requirement and annual needs.

    S. Sankarasubramanian: 'Board has approved increasing the stake by additional 17.7% to reach 71.5%.'
  • M&A NACL Acquisition · Pending regulatory

    Expand product portfolio, leverage synergies in active ingredients, geographies, and R&D.

    S. Sankarasubramanian: 'Coromandel received Competition Commission approval for the newly-acquired NACL and is awaiting SEBI clearance to launch open offer. Once we get the approval, we'll conclude the transaction... Hope we get this in Q2 and should be able to complete the transaction.'
  • M&A Sakarni Plaster Joint venture · Signed

    Manufacture and sale of phospho gypsum based green building materials, converting industrial byproduct into value-added material.

    S. Sankarasubramanian: 'Coromandel signed a definitive agreement to form a joint venture with Sakarni Plaster for the manufacture and sale of phospho gypsum based green building materials.'

Guidance & targets

Capacity

  • Kakinada Backward Integration Plant Commissioning Capacity · Q4 FY26 · High confidence Commissioned
    The plant is likely to be commissioned in Q4 of this current financial year.

    — S. Sankarasubramanian

  • Granulation Project Commissioning Capacity · end of FY26-27 · High confidence Commissioned
    Our granulation project that is expected to add 7.5 lakh tons of additional capacity is on track and is likely to be commissioned by end of FY26-27.

    — S. Sankarasubramanian

  • Granulation Plant Start-up Capacity · Q4 FY27 · High confidence January 2027
    I think '26, '27 fourth quarter, which means that calendar year '27 January, that quarter, we should commission the plant.

    — S. Sankarasubramanian

Volume

  • BMCC Rock Phosphate Output Volume · FY26 · High confidence 300,000 to 400,000 tons per annum
    If everything goes well this year, FY25-26... we should come closer to 300,000 tons to 400,000 tons per annum...

    — S. Sankarasubramanian

  • BMCC Rock Phosphate Output Doubling Volume · next 2 years · High confidence Double current output
    Hopefully, we should double it in the next 2 years. We can do this with not significant investment.

    — S. Sankarasubramanian

Market Penetration

  • Drone Spraying Acreage Market Penetration · current year · High confidence 0.5 million acres
    we hope to reach at least 0.5 million acres of drone spraying in the current year.

    — S. Sankarasubramanian

Retail Expansion

  • New Retail Stores Retail Expansion · this year · High confidence 400 stores
    business is on track to increase the store count by adding 400 stores during the year.

    — S. Sankarasubramanian

Profitability

  • EBITDA per Metric Ton Profitability · this year · High confidence INR5,000
    On the manufactured margin, our normative EBITDA per metric ton of INR5,000 will sustain during this year. That's our hope, and we'll strive to do that.

    — S. Sankarasubramanian

M&A

  • NACL Acquisition Completion M&A · Q2 · High confidence Complete transaction
    Hope we get this in Q2 and should be able to complete the transaction.

    — S. Sankarasubramanian

Capex

  • Incremental Capex for Product Categories Capex · Medium confidence INR300-500 crores
    The investment can be in the range of INR300 crores to INR500 crores across various product categories in these business segments.

    — S. Sankarasubramanian

What to watch in Q2 FY26

NACL Acquisition Completion

Q2 FY26
Current Awaiting SEBI clearance
Target Transaction completed

Why it matters

Completion of this acquisition is key for portfolio expansion and realizing anticipated synergies.

Hope we get this in Q2 and should be able to complete the transaction.

Risks & concerns

  • Raw Material Price Volatility

    medium

    Key raw materials like DAP, Phos Acid, and sulfur witnessed firmness or increases in Q1, impacting the value gap, though management aims to sustain normative EBITDA.

    Management acknowledged

  • DAP Supply Tightness

    medium

    The DAP market has been tight, but management is confident that increased volumes from Middle East and new capacities will ease the situation, expecting prices to soften.

    Management downplayed

  • Challenges in Greenfield Capacity Creation

    low

    Greenfield capacity creation is prohibitive due to high costs and raw material security challenges, leading the company to prefer brownfield or inorganic expansion.

    Management acknowledged

Q&A highlights

6 direct
Strategic response to China specialty fertilizer ban and rare earth minerals Partial
We are evaluating opportunities of creating capacity for some of the key raw materials and as a fertilizer player, our ability to reuse the by-products which are generated out of the process is quite helpful. We are evaluating the investment to create capacities for our captive consumption as well as it provides opportunity for us to export to Europe and various other NPK players globally. Also, it will meet the domestic demand of the rest of the players in the country. On the rare earth minerals. We'll get back to you once we do evaluation. We are trying to focus ourselves mainly on the phosphate-based derivatives. We have not looked at extraction of rare earth minerals.

Highlights the company's strategic focus on backward integration for specialty nutrients and its cautious approach to new, unrelated areas like rare earth minerals, indicating a disciplined capital allocation strategy.

Asked by Prashant Biyani

Direction of NBS subsidy for H2 FY26 Direct
Logically, subsidy should go up.

Provides insight into management's expectation of continued government support for the fertilizer sector, which is crucial for maintaining profitability amidst rising raw material costs.

Asked by Prashant Biyani

DAP market tightness and future supply outlook Direct
While there can be a timing mismatch going forward, with the capacity expansion happening in Middle East, we are reasonably confident we should not face any challenge on DAP availability going forward. ... And I don't see any reason why for India alone DAP price should go up. I have a strong view, if appetite for DAP for the forthcoming rabi seasons are met, DAP prices should soften from there on.

Addresses a key raw material supply concern, with management expressing confidence in easing tightness and potential softening of DAP prices, which could benefit future input costs.

Asked by Somaiah V.

Sustainability of normative EBITDA margin (INR5,000/ton) amidst raw material price changes Partial
On the manufactured margin, our normative EBITDA per metric ton of INR5,000 will sustain during this year. That's our hope, and we'll strive to do that. ... Yes, it has impacted the value gap on captive phosphoric acid because we consume sulfur to produce sulfuric acid, which in turn is used for phosphoric acid, and imported sulfuric acid price has also gone up. To that extent, there has been a marginal reduction in the value addition. But with phosphoric acid going up, again, the value gap will widen further going into next quarter as well.

Clarifies management's commitment to maintaining a key profitability metric despite raw material volatility, while acknowledging short-term impacts on value addition from specific input price movements.

Asked by Somaiah V.

NACL acquisition timeline and funding for capex Direct
In terms of the NACL, we have got the Competition Commission approval, and we are waiting for SEBI clearance. We hope we get this in Q2 and should be able to complete the transaction. ... Close to INR2,000 crores, we'll be spending. That will be dipping out of the surplus what we have generated over the period of time. And also, we are investing in the acquisition. So at some stage, company may have to resort to long-term funding, especially considering the fact the interest rate on long-term funding is at the lowest level.

Provides a clear timeline for the NACL acquisition and indicates a potential shift in capital allocation strategy towards debt funding for significant capex, moving away from a purely internal accrual model.

Asked by Jayshree Bajaj

BMCC rock phosphate current output and future scale-up plans Direct
If everything goes well this year, FY25-26, besides 2 to 3 months of rainy season when we don't operate, we should come closer to 300,000 tons to 400,000 tons per annum, which will be a remarkable achievement. Being the first year of capacity, we are reaching 100%. Hopefully, we should double it in the next 2 years. We can do this with not significant investment.

Details the progress and ambitious growth targets for BMCC, a critical backward integration asset, highlighting its potential to significantly enhance raw material security without substantial additional investment.

Asked by Prashant Biyani

Growth drivers and profitability outlook for Crop Protection business Direct
Absolutely. This year is going to be extremely good for Crop Protection. The major share of profits are coming from Crop Protection, and we keep increasing our capacity. We keep introducing new molecules. We have systematically worked on bringing new products and all this will yield results in the coming years. The momentum what we are seeing this year will continue in the years to come.

Identifies Crop Protection as a key profit driver and highlights management's strategy of capacity expansion, new product introductions, and sustained momentum for future growth and profitability.

Asked by S. Ramesh

Strategy for geographical expansion into Central and North India Direct
we are developing the seed markets in Central and Northern India to move these materials from Kakinada to markets like Rajasthan, M.P., U.P. And as you know, in the current policy framework, railway freight is reimbursed by the government. So to that extent, our MRP will be as competitive as any other players in that state. We don't have immediate plans to set up any facility in the North, but we do have SSP facilities in many of the northern states, and we have been doing business.

Outlines the company's market diversification strategy, leveraging existing infrastructure and government policies to ensure competitive pricing in new regions without immediate greenfield investments.

Asked by Ajit

3 min read 6 chapters

Detailed narrative

Q1 FY26 Financial Performance Overview

Coromandel International reported a robust Q1 FY26, with consolidated total income growing 49% year-on-year to INR7,126 crores, up from INR4,783 crores in Q1 last year. This growth was primarily driven by higher subsidy rates and strong volume growth across all business segments. Consolidated EBITDA saw an even stronger increase of 55% year-on-year, reaching INR782 crores compared to INR506 crores in the previous year's Q1. The company received INR1,300 crores in subsidy claims during the quarter, though INR2,911 crores remained outstanding as of June 30, 2025.

Operational Highlights and Capacity Expansion

The company's plants operated at a full capacity of 8.4 lakh tons in Q1, achieving a 6% volume growth. Phosphoric acid volumes increased by 23%, and production of NPK and DAP moved up 6% from 7.88 to 8.37 lakh tons. The backward integration project for phos acid and sulfuric acid at Kakinada is progressing well, with 70% of the project milestone completed, and is expected to be commissioned in Q4 of the current financial year. Additionally, a new granulation project, set to add 7.5 lakh tons of additional capacity, is on track for commissioning by the end of FY26-27.

Market Dynamics and Product Strategy

Coromandel achieved a record 11 lakh tons in primary sales volume, marking a 31% growth and securing a close to 18% market share in the NPK segment. POS consumption also saw significant growth, up 46% to 7 lakh tons, with the company's market share on a consumption basis improving to 16% from 12% last year. The focus on unique grades, which differentiate the company, increased their share to 34% of sales, up from 31% last year. Despite firm raw material prices for DAP, Phos Acid, and sulfur, management aims to sustain a normative EBITDA of INR5,000 per metric ton for the year.

Strategic Investments and Mergers & Acquisitions

The Board approved increasing the stake in Baobab Mining and Chemicals Corporation (BMCC) by an additional 17.7%, bringing the total ownership to 71.5%, which is crucial for captive rock sourcing. The acquisition of NACL has received Competition Commission approval and is awaiting SEBI clearance, with management targeting completion in Q2 FY26. Furthermore, Coromandel signed a definitive agreement to form a joint venture with Sakarni Plaster to manufacture green building materials, leveraging industrial byproduct gypsum into value-added construction material.

Crop Protection and Bio Business Performance

The Crop Protection and Bio segments delivered a robust performance in Q1, with revenue growing 31% to Rs 725 crores and EBIT increasing 77% to Rs 111 crores. The Bio business experienced significant growth, nearly doubling in both volume and value. The company launched 10 new products during the quarter, including one in-licensing product (Nitenpyram), and is intensifying its focus on domestic formulation segments and expanding its geographical presence, with exports contributing 40% to Crop Protection revenue.

Agri-Tech and Retail Initiatives

Coromandel is actively promoting agri-tech solutions, with its Gromor Drive drone spraying service covering 25,000 acres in Q1 and targeting at least 0.5 million acres for the current year, emphasizing water conservation. The retail business also performed strongly, opening 73 new stores during the quarter and aiming to add 400 stores this year. The company is enhancing customer outreach through e-commerce platforms, enabling door delivery of agri inputs and providing comprehensive farming solutions.

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