Detailed Narrative
Positive Agricultural Environment and Policy Support
India experienced a positive agricultural environment in 2024-25, with food grain production estimated at 331 million tons, an increase of close to 5% over the last year. Gross value added in Agriculture and allied activities is projected to grow by 4.6%. Government policies, including a 42% increase in P rate subsidy for 25-26 and a special package of ₹3,500 per metric ton on DAP until September 2025, are expected to support the sector.
Strong Financial Performance in Q4 and FY25
Coromandel International reported a consolidated total income of ₹5,114 crores for Q4 FY25, a 28% increase YoY, and ₹24,444 crores for the full year, up 10% YoY. Consolidated EBITDA for Q4 was ₹426 crores, surging by 56.04% YoY, while full-year EBITDA reached ₹2,628 crores, up 9.54% YoY. This growth was primarily driven by volume increases across all businesses and margin expansion in the Crop Protection segment.
Strategic Capacity Expansion and Backward Integration
The company achieved its highest ever volume of 33.3 lakh tons. Backward integration projects for Phosphoric Acid and Sulfuric Acid plants at Kakinada are 45% complete and on track for commissioning in Q4 FY26. Additionally, a brownfield granulation train at Kakinada has been initiated, expected to come on stream in FY27. The Ennore unit's phosphoric acid and sulfuric acid plants resumed operations, contributing to a 6% increase in Phos Acid production for the year.
Crop Protection and Retail Business Growth Drivers
The Crop Protection business saw its revenue grow by 7% to ₹2,637 crores and EBIT by 25% to ₹365 crores, with new products contributing 21% to formulations sales. The retail segment expanded its footprint by adding over 130 Mana Gromor centers, achieving 99% store profitability and a breakeven period of 6 months. Management aims to triple the retail footprint within the next 2-3 years, leveraging digital analytics and high-margin product introductions.
NACL Industries Acquisition and Synergy Potential
Coromandel signed a definitive agreement to acquire a controlling stake in NACL Industries, with regulatory approvals anticipated by Q2 FY26. The acquisition aims to position Coromandel as a leading player in the Indian crop protection sector. Management plans to restore NACL's operating margins from the current 4-5% (down from a historical 10-11% due to AI price contraction) by focusing on procurement efficiencies, increasing production, and synergizing R&D capabilities.
Nano DAP and Specialty Nutrients Performance
The Nano DAP business marketed 26 lakh bottles, achieving an 80-90% liquidation rate and a 33% market share. Management is confident in its potential to replace 2 million tons of DAP in 2-3 years and is exploring export opportunities. The Specialty Nutrients business continued its consistent growth of 15-20% annually, maintaining healthy EBITDA margins of 18-20%, and is focusing on backward integration for key imported raw materials.
Raw Material Price Dynamics and Subsidy Management
The company faced raw material price volatility, with phosphoric acid prices increasing by $98/ton to $1,153/ton in Q1, and sulfur prices spiking from $180 to over $300/ton in Q4. While these spikes impacted Q4 margins, management expects sulfur and sulfuric acid prices to moderate in coming quarters. Subsidy outstanding as of March 31, 2025, stood at ₹1,654 crores, with the government being prompt in clearing dues.