Coromandel International Q1 FY27 earnings call

Coromandel International reported a consolidated total income of ₹8,215 crores for Q1 FY27, marking a 15% year-on-year growth compared to ₹7,126 crores in the previous year. However, consolidated EBITDA saw a 3% degrowth to ₹761 crores from ₹782 crores last year, primarily due to higher input costs not fully offset by subsidy revisions. Net profit for the quarter was ₹382 crores, a 24% decline from ₹502 crores in Q1 FY26. The company received ₹1,392 crores in subsidy claims during the quarter, with ₹3,254 crores outstanding as of June 30, 2026.

The phosphatic sector faced a challenging operating environment with elevated global prices for key raw materials like phosphoric acid, ammonia, and sulphur, driven by geopolitical uncertainties. Despite a 10% increase in subsidy rates for Nitrogen, Phosphatic, and Sulphur nutrients, these rates did not fully compensate for the raw material cost surge. This led to moderated production and imports of NP/NPK fertilizers, which were down by 21% and 38% respectively during the quarter. The company consciously moderated production to 6.9 lakh tons (72% capacity utilization) to optimize inventory.

The Crop Protection business delivered a record Q1 performance, with revenue growing 20% year-on-year to ₹870 crores and EBIT increasing 44% to ₹159 crores, driven by strong exports and B2B sales. The Specialty Nutrients and Organic business also showed robust growth, with a 25-30% year-on-year top-line increase and a 20% EBITDA margin. The Retail business demonstrated outstanding performance, with revenue increasing 85% year-on-year and 76% of its over 1,200 outlets becoming profitable during the quarter.

Coromandel has successfully commissioned its sulphuric acid and phos acid plants, with sulphuric acid achieving rated capacity and generating power as envisaged. The granulation project is progressing well and is on track for commissioning in Q4 FY27. Capacity expansion for key molecules in the Crop Protection segment is also on track for commissioning by September 2026. The company is evaluating the establishment of an SSP facility in Senegal to further leverage its rock phosphate resources.

The company continues to strengthen its innovation pipeline, launching 3 new products in water-soluble and sulphur nutrition segments, and 3 new products in Crop Protection. It is also establishing a launch facility for Fluoro chemistry and advancing its CDMO strategy. The Nano business, despite facing bans in Uttar Pradesh and Maharashtra, achieved 2% year-on-year sales volume growth and initiated exports, with plans to secure further international registrations.

The government's pilot implementation of a National Fertilizer sales framework, utilizing QR code-enabled traceability, is a significant initiative. This system links farmer, land, and sales data, recommending appropriate dosages and restricting purchases, which is expected to reduce overuse of straight fertilizers like Urea and DAP. Management believes this can lead to substantial subsidy savings and promote balanced nutrient usage, transforming the agricultural sector. The company's drone subsidiary, Dhaksha, plans to expand its agri-drone fleet to 500 during the year.

NACL Industries, a subsidiary, improved its performance with EBITDA moving up 9% to ₹41 crores, and its margin increasing to 11% from 8%. Despite moderate revenues of ₹383 crores due to lower export volumes and price pressure, the business is strengthening its product portfolio. The company plans to accelerate new product introductions in the coming months^⏳ and is engaging with MNC customers for AI and intermediate development, aiming to sustain and further improve margins.