Summary
Coromandel International Limited - Q3 FY 2026 Earnings Call Summary Monday, February 02, 2026 02:00 PM
Event Participants
Executives 2 Deepak Natarajan (CFO), S. Sankarasubramanian (MD & CEO)
Analysts 8 Ahmed (Unifi Capital), Akansha (Axis Capital), Ankur (Axis Capital), Darshita Shah (DSP Mutual Fund), Falguni Dutta (Mansarovar Financials), Naushad Chaudhary (Birla Mutual Fund), Nirav (Anvil Wealth), Rishabh (Individual Investor), Rohit Nagraj (360 One Capital), Somaiah (Avendus Spark)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Subsidy Collected | ₹2,571 crores | +26% YoY from ₹2,036 crores; reflects robust settlement of claims. |
| Total Income | ₹8,863 crores | +26% YoY; driven by strong sales in CPC and volume growth in fertilizers. |
| Fertilizer Production | 9.9 lakh tons | +18% YoY; highest ever quarterly production, operating at 100% capacity. |
| Fertilizer Primary Sales | 11.2 lakh tons | Flat YoY; moderation in AP/Telangana offset by growth in Maharashtra/TN. |
| CPC Standalone Revenue | ₹785 crores | +24% YoY; driven by 32% growth in exports and 36% in B2B segments. |
| Consolidated EBITDA | ₹805 crores | +11.5% YoY from ₹722 crores; margin pressure in fertilizers offset by CPC growth. |
| Consolidated PAT | ₹488 crores | -4% YoY from ₹508 crores; impacted by currency depreciation and input costs. |
| Subsidy Outstanding | ₹3,785 crores | +80% YoY from ₹2,095 crores; additional ₹1,300 crores collected in Jan 2026. |
| Nano Products Sales | 4,000 KL (YTD) | +68% YTD growth; company maintains market leadership in Nano DAP. |
| Store Count | 1,113 stores | 84 new stores added in Q3; retail revenue grew 20% YoY. |
Geographic & Segment Commentary
- Fertilizers: Performance was resilient despite higher Phos Acid ($1,290) and Sulphur ($550) prices. While unseasonal rains reduced consumption in Andhra and Telangana, the company expanded in Northern markets with 4 lakh tons of seed marketing volumes (+30% YoY).
- Crop Protection (CPC): Standalone EBIT grew 74% YoY to ₹158 crores with margins expanding to 20%. Growth was primarily export-led (Mancozeb demand in Latin America) and via new products, which now contribute 25% of YTD sales.
- Retail: Achieved 20% YoY growth despite a slow start to the quarter. Strategic focus remains on e-commerce, drone spraying services (2 lakh acres covered YTD), and expanding the footprint in rural markets.
Company-Specific & Strategic Commentary
- Backward Integration: Kakinada plants for Sulfuric and Phosphoric acid are on track for commissioning in Q4 FY26. This is expected to increase annualized EBITDA from ₹5,500 to ₹6,500 per ton.
- NACL Integration: Following a successful rights issue to retire high-cost debt, focus has shifted to improving capacity utilization at the Dahej facility and leveraging manufacturing synergies.
- Mancozeb Expansion: Capacity was expanded by 20% recently, with plans for a further 30% expansion at the Sarigam plant to meet rising global demand for wide-spectrum fungicides.
- Mining (Senegal): Captured supply security for 20-25% of rock phosphate requirements. Production is on track to reach 3.5 lakh tons this year, with a long-term target of 5 lakh tons.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Fertilizer EBITDA/Ton | ₹5,000 - ₹5,500 | Target maintained for FY26 despite Q3 margin pressure; integration to boost this later. |
| Fertilizer EBITDA/Ton | ₹6,500 | Targeted annualized rate post-commissioning of backward integration projects. |
| CPC Revenue Growth | 20% - 25% YoY | Driven by a pipeline of 9 key registrations and expansion into 30 new territories. |
| Phos Gypsum Project | 15-Month Timeline | JV Stuccoedge started for manufacturing value-added gypsum products. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Sulphur prices rose to $550/ton and Ammonia faced supply outages. Sustained high prices could stress fertilizer margins if NBS rates don’t compensate. |
| Currency Depreciation | The Rupee depreciated ~7% YTD, increasing the cost of imported intermediates and raw materials like Phos Acid. |
| Climate/Acreage | Late monsoon withdrawal impacted key crop segments (chilli/grapes) in South India, leading to a 7% drop in regional fertilizer consumption. |
| Subsidiary Performance | Dhaksha (drones) and NACL (Dahej plant) are currently in early stages or recovery phases, requiring management intervention to reach full potential. |
Q&A Highlights
Fertilizer Margins & Pricing
- Question: Do we need price hikes to maintain ₹5,000/ton margins given high RM costs? (Somaiah)
- Answer: We have taken 3-4% price corrections in Q4. While quarterly margins fluctuate, ₹5,000-₹5,500 is achievable for FY26 through inventory management and product mix (S. Sankarasubramanian).
Mancozeb Strategic Rationale
- Question: Why expand Mancozeb further after one round of debottlenecking? (Ahmed)
- Answer: Surging demand in Brazil/Latin America for soybean and corn. We are moving from B2B to B2C and securing long-term volume arrangements (S. Sankarasubramanian).
Backward Integration Economics
- Question: How do high sulphur prices impact the ₹400cr EBITDA benefit from the new plant? (Naushad Chaudhary)
- Answer: The value addition remains stable because Phos Acid prices also trend upwards. Benefit also includes 24MW captive power generation (S. Sankarasubramanian).
EU FTA Impact
- Question: How will the India-EU FTA benefit the CPC business? (Nirav)
- Answer: Currently, 15-20% of exports go to Europe. The FTA eliminates 12% duties, aiding Bio-products, and reduces 22% tariffs on imported intermediates from Europe (S. Sankarasubramanian).
Key Takeaway
Coromandel delivered a resilient Q3 FY26, characterized by record fertilizer production (9.9 lakh tons) and a robust 74% EBIT growth in its Crop Protection segment. Despite headwinds from soaring sulphur prices ($550/ton) and unseasonal rains affecting consumption in core markets like Andhra Pradesh, the company maintained its FY26 guidance of ₹5,000-₹5,500 EBITDA per ton for fertilizers. Strategically, the firm is nearing the finish line for its massive backward integration project at Kakinada, which is expected to structurally elevate margins by ₹1,000 per ton. With the acquisition of NACL and aggressive expansion in Mancozeb and Nano fertilizers, Coromandel is successfully diversifying its non-subsidy portfolio. While currency volatility and raw material spikes remain watch points, the management remains confident in achieving significant margin expansion in FY27 as captive acid capacities and mining volumes scale up.
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