Coromandel International Revenue Jumps 26%, Profit Dips Amidst Raw Material Surge

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AuthorIshaan Verma|Published at:
Coromandel International Revenue Jumps 26%, Profit Dips Amidst Raw Material Surge
Overview

Coromandel International reported a strong 26% year-on-year revenue growth to ₹8,863 Cr for Q3 FY26. However, Net Profit After Tax (PAT) saw a 4% decline to ₹488 Cr, attributed partly to significant raw material price increases and subsidy collection challenges. The company highlighted robust performance in Crop Protection and Specialty Nutrients segments, with capacity expansions and new product launches driving growth. Management reaffirmed fertilizer EBITDA targets post-commissioning of backward integration projects, while assessing CDMO opportunities and global Nano DAP expansion.

📉 The Financial Deep Dive

Coromandel International Limited announced its Q3 FY26 results, showcasing a significant top-line expansion coupled with a marginal profit contraction. Total income surged by 26% year-on-year to ₹8,863 Cr for the quarter, and accumulated 33% for the nine-month period to ₹25,759 Cr. Consolidated EBITDA registered a healthy increase of 11.5% YoY to ₹805 Cr in Q3 FY26, contributing to a 24.3% rise to ₹2,738 Cr for the nine months. Despite these robust operational indicators, Net Profit After Tax (PAT) experienced a 4% year-on-year decline in Q3 FY26, settling at ₹488 Cr, although it grew by 20.9% for the nine-month period to ₹1,784 Cr.

The divergence between EBITDA and PAT growth points towards potential pressures from rising costs or other financial charges not detailed in the earnings summary. A notable point is the significant increase in subsidy collections to ₹2,571 Cr in Q3 FY26, but the subsidy outstanding also ballooned to ₹3,785 Cr as of December, up from ₹2,095 Cr YoY, indicating a potential working capital strain.

👨‍💼 The Grill

Management acknowledged the sharp increases in key raw material prices like Sulphur and Phos Acid, though they viewed some fluctuations as short-term. The dip in phosphatic fertilizer market share from 15% to 14% was attributed to specific regional consumption slowdowns rather than a systemic issue. Investors' attention was also drawn to the performance of subsidiaries, particularly NACL Industries, which faced margin pressures during the quarter despite completing a rights issue for debt reduction. The early-stage drone subsidiary, Dhaksha, is undergoing corrective actions.

🚩 Risks & Outlook

The increasing subsidy outstanding poses a risk to working capital management and cash flow. Volatility in raw material prices remains a persistent challenge for the fertilizer segment. Integration benefits from NACL Industries are anticipated from Q1 FY27, focusing on cost efficiencies and product mix. The company's strategic initiatives include expanding Mancozeb capacity by 30%, developing purified phosphoric acid projects, and evaluating Contract Development and Manufacturing Organization (CDMO) opportunities. The Nano DAP business is targeted for global market exploration, aiming for leadership. Domestic B2C formulation growth is projected at 20-25% annually, supported by new products and store expansion.

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