Coromondel-International-Ltd.-

Coromandel International Limited is India’s second largest Phosphatic fertilizer player, is in the business segments of Fertilizers, Specialty Nutrients, Crop Protection and Retail. The Company manufactures a wide range of fertilizers and markets around 4.5 million tons making it a leader in its addressable markets. The company is No.1 Organic fertilizer marketer in India.

Stock Details

Market Cap. (Cr.) 23316.26
Face Value 1.00
Equity (Cr.) 29.32
52 Wk. high/low 829.85/348.95
BSE Code 506395
NSE Code COROMANDEL
Book Value (Rs) 147.28
Industry Fertilizers

 

Share Holding Pattern %

Promoter

59.60
FIIs 7.26
Institutions 21.28
Non Promoter Corp. 0.91
Public & Others

Government

10.96

0.00

Total 100.00

Coromondel-International-Ltd.-Price-Chart

  • Coromandel had a resilient performance in Q1 FY21, registering a strong growth despite the unprecedented external environment posed by COVID 19 pandemic. The company’s EBITDA margins grew by 368 bps YoY to 12.8% in Q1FY21 while EBITDA itself grew by 111% YoY to Rs.412cr.

  • Crop Protection segment had a very good quarter and registered a strong growth of 54% across both exports and domestic market. The business is accelerating its efforts on new product development and strengthening its strategic tie ups with global players.

  • Phosphatic volume up 75% YoY to 0.83mn tonnes for 1QFY21, while manufactured product sale/DAP imports stood at 0.76mn tonnes/0.06mn tonnes. Market share improved from 12.9% last year to 16.3% in 1QFY21.

  • In line with the government’s ‘Make in India’ initiative, the Company established a state-of-the-art Phosphoric Acid plant at Vizag. The plant was successfully commissioned in the third quarter of the year. With this, the Company has become self-sufficient for its phosphoric acid requirements for its Vizag plant.

  • As on August 21, total kharif crops sown has risen 9% to 1,062.93 lakh hectare area, against 979.15 lakh hectare area during the corresponding period of last year on better monsoon.

  • Central and state governments’ income support scheme for farmers increasing the disposable income in the hands of farmers for agri-inputs.

  • Prices of natural gas in India are likely to be cut to $1.9- $1.94 the lowest in more than a decade from October. Natural gas is a key raw material for the manufacturing of urea and comprises nearly 70 percent of the total cost of urea production.

Business Overview: 

Fertilizers

Coromandel is a leading manufacturer of phosphatic fertilisers with plants located at Visakhapatnam & Kakinada in Andhra Pradesh and Ennore & Ranipet at Tamil Nadu. The range of products from Coromandel is popularly known by the brand GROMOR. The segment contributes 81% to revenue.

Crop Protection:

The Crop Protection business produces insecticides, fungicides, herbicides and markets these products in India and abroad. Coromandel is the second largest manufacturer of Malathion and is the major manufacturer of Phenthoate in Asia. Coromandel Crop protection brands have been synchronized to emerge under a stronger brand “GROMOR SURAKSHA”. Company is presently the largest player in neem seed extract-based ‘Azadirachtin’ segment.

Speciality nutrients:

In its efforts to promote balanced fertilisation Coromandel intends to be a complete plant nutrition solution Company by adding speciality nutrients/ fertilisers to its portfolio and now offers various customised products to its customers.

Retail:

Coromandel has also ventured into the retail business in 2007 by setting up around 800 rural retail centers in the States of Andhra Pradesh, Telangana, Karnataka and Maharashtra.

Q1FY21 Performance:

Particulars (in Rs Cr.) Q1FY21 Q4FY20 Q1FY20 QoQ (%) YoY (%)
Net Sales 3213.23 2869.32 2130.74 12.0% 50.8%
Raw Material Consumed 1287.7 1797 1666.43 -28.3% -22.7%
Stock Adjustment 370.65 -44.14 -722.35 939.7% 151.3%
Purchase of Finished Goods 622.8 112.96 477.63 451.3% 30.4%
Employee Expenses 121.58 116.87 110.7 4.0% 9.8%
Selling & Administrative Expenses 193.46 211.31 198.46 -8.4% -2.5%
Other Expenses 204.55 284.61 204.72 -28.1% -0.1%
Total Expenditure 2800.74 2478.61 1935.59 13.0% 44.7%
EBITDA 412.49 390.71 195.15 5.6% 111.4%
Profit After Tax 250.57 234.2 62.43 7.0% 301.4%
EPS (in Rs .) 8.55 8 2.13 6.9% 301.4%
PATM (%) 7.8 8.16 2.93 (36) bps 487 bps
EBITDA Margin (%) 12.84% 13.62% 9.16% (78) bpd 368 bps

Outlook:

Coromandel International is the leading phosphatic fertilizer manufacturers in India with a market share of 16.3%. It has considerable presence in its home markets of Andhra Pradesh, Telangana and other nearby states where it enjoys a 65% market share. The Government Atma Nirbhar package totaling 20 lakh crore to double farmer’s income will boost demand for fertilizer products. Coromandel International new launches in various segments gained momentum during the quarter and it would focus government announced MSP on the sale of kharif crops, which would lead to minimum 50%+ gains on cost of production for farmers. On the Capex front, the company stated that in the near term, it would focus on de-bottlenecking the fertilizer plants, thereby potentially increasing their capacities as well as optimizing the product mix. Therefore we initiate buy on Coromandel at CMP for the target price of Rs.970.

DISCLOSURE IN PURSUANCE OF SECTION 19 OF SEBI (RA) REGULATION 2014

Elite Wealth Advisors Limited does/does not do business with companies covered in its research reports. Investors should be aware that the Elite Wealth Advisors Limited may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as read more


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