Coromandel Inter Q1 FY27 Earnings Call — Analysis (NSE: COROMANDEL)

Coromandel posts resilient Q1 FY27 despite fertilizer margin squeeze from elevated input costs, with record crop protection exports and strong retail performance

31 Jul 2026 · Analysis by Alpha Inflection

The take

Q1FY27 Total income ₹8,215 Cr ( +15% YoY ) . New guidance — fertilizer ebitda per ton ₹6,500/MT . New story: Non-subsidy diversification delivers .

Results

Consolidated total income ₹8,215 Cr (+15% YoY); EBITDA ₹761 Cr (-3% YoY); PAT ₹382 Cr (-24% YoY)

Financial highlights

Guidance

Granulation project on track for Q4FY27 commissioning; crop protection capacity expansion expected by September 2026; normal annual capex guided at ~₹300 Cr

What management committed to

• Granulation project commissioning on track for Q4FY27 — Q4FY27
• Crop protection key molecule capacity expansion to be commissioned by September 2026 — Q2FY27
• Normal annual sustainable capex around ₹300 Cr — ₹300 Cr, FY27
• Nutrient business EBITDA to improve to ₹6,500/MT in steady state once plants are commercialized and input prices normalize — ₹6,500/MT, steady state, post commercialization
• Payback on crop protection capex expected in less than 3 years — <3 years, less than 3 years
• BMCC will invest ~$5–6 million to set up an SSP facility of 100,000–150,000 tons at Senegal — $5–6 million; 100,000–150,000 tons
• MAP plant at Kakinada expected to come up after 1 year or so — FY28
• White-label products for Coromandel retail will be manufactured by bio business, capturing full value chain — FY27

Key themes

Diversified portfolio offsets subsidy-led margin pressure

How the narrative shifted

• Subsidy revision urgency: Current NBS rates do not reflect elevated raw material costs; a mid-season revision is essential to sustain domestic NP/NPK production and prevent demand destruction
• Raw material cost spike (sulphur, ammonia): Global supply disruptions and Middle East conflict have driven input prices to exorbitant levels; management believes they are not sustainable but may persist near-term, so inventory and production have been moderated
• Non-subsidy diversification delivers: Crop protection exports, retail, SSP, specialty nutrients, and bio products delivered strong growth and margin performance, offsetting pressure on the fertilizer franchise
• Backward integration stabilizing: Sulphuric acid and phosphoric acid plants have been commissioned and are stabilizing; granulation on track for year-end; BMCC rock phosphate provides strategic raw material security and value capture
• Capital allocation shift to cash generation: After ~₹7,000 Cr of capex over 3-4 years, management will focus on sweating assets and generating returns; no immediate fertilizer capacity additions; routine capex ~₹300 Cr
• Policy transformation (QR-code, DBT): QR code-based traceability pilot could curb urea/DAP overuse and rationalize nutrient consumption, benefiting balanced fertilizer players like Coromandel

Operational commentary

• Crop Protection business delivered record Q1: revenue +20% YoY, EBIT +44% YoY, driven by strong exports and B2B sales; new product share in domestic B2C rose to 32% (23% LY); Mancozeb capacity expansion on track for Sep 2026 commissioning
• Fertilizer production voluntarily moderated to 6.9 lakh tons (72% utilization) amid volatile raw material costs; sulphuric acid plant achieved rated capacity and power generation; phosphoric acid plant stabilization progressing
• Granulation project on track for Q4FY27 commissioning, supporting forward integration to absorb additional NPK production
• Retail business revenue jumped 85% YoY, store profitability improved to 76% from 61%, network expanded by 22 stores to >1,200 outlets; omni-channel and digital capabilities strengthened
• SSP volumes +19% YoY; differentiated products (GroPlus, Urea-SSP) contributed >50% of SSP sales, underscoring premiumization strategy
• Specialty Nutrients and Organic business launched 3 new products; T-MAP plant at Kakinada and seaweed granulation plant progressing well
• BMCC Senegal rock phosphate production at 1.1 lakh tons; company evaluating establishment of SSP facility at Senegal to unlock additional value and serve international markets
• Nano DAP maintained 60% market share; exports initiated; drone services gaining traction; Dhaksha developed agri-drone variants and applied for type certification
• Bio-products business developing 2 new biostimulant/microbial products; white-label product mandate from retail division provides captive manufacturing opportunity
• NACL Industries EBITDA margin improved to 11% (8% LY); engaging with MNCs on intermediate and AI development; launched 3 new products
• Government piloting QR code-based National Fertilizer Sales Framework; if scaled, could enable DBT and improve nutrient-use efficiency

Analyst Q&A

• Q. How much subsidy increase is needed to maintain EBITDA per ton?

  Let subsidy come and then we will derive the EBITDA per ton. We are seeking 6-month average rates as per policy; what we got under NBS has no relevance to current costs.

• Q. What is the pricing trend and magnitude of price hike taken by industry?

  Price increase of 25–30% across grades has already been taken; beyond this it has to come through subsidy revision.

• Q. Will NPK production remain subdued without subsidy revision?

  100%. Domestic capacities cannot afford to produce at current high sulphur and ammonia prices. It's critical for subsidy rates to be revised, else Q2 production could also be impacted.

• Q. What is causing delay in incremental NBS subsidy announcement?

  There is pressure on overall subsidy bill; urea cost pass-through and DAP compensation are consuming allocation, leading to pushback on NP/NPK.

• Q. At what sulphur price does optimal backward integration kick in?

  Given a phosphoric acid price of $1,700, we want at least $800 sulphur.

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