Coromandel International reported a resilient performance in Q3 FY26 despite challenging headwinds from unseasonal rains and rising raw material costs. The company achieved its highest ever quarterly fertilizer production at 9.9 lakh tons (up 18%). Crop Protection showed robust growth, with standalone revenue hitting INR785 crores (up 24%) and EBIT soaring 74%. Management is focused on backward integration completion and normalizing margins post-input cost spikes, targeting INR5,000 to INR5,500 EBITDA per ton.
Q3 FY26 Business Environment Overview
Management noted that while the macroeconomic environment was stable, the agriculture sector faced challenges due to the late withdrawal of the Southwest monsoon, impacting consumption in key pockets during October and November. However, Rabi sowings showed positive trends, with wheat and rice up 3% and 22% year-on-year, respectively. Regulatory updates included the draft Pesticides Management Bill 2025 and the launch of an integrated digital fertilizer claim process.
Fertilizer Business Performance and Strategy
The fertilizer division navigated a tough quarter marked by higher raw material costs, a depreciated rupee, and reduced consumption (down 7% overall for the industry). Despite this, Coromandel delivered production of 9.9 lakh tons, an 18% increase year-on-year. Primary sales stood at 11.2 lakh tons. The consumption-based market share for phosphatic fertilizers moderated to 14% in Q3. On a Year-to-Date (YTD) basis, phosphatic volumes reached 36.3 lakh tons (up 10%), with market share at 17%.
Key strategic developments include the backward integration projects at Kakinada (sulfuric acid and phosphoric acid) progressing well for commissioning this quarter. The company expects the phosphoric acid plant to increase annualized EBITDA per ton from the current average of INR5,500 to INR6,500 once fully operational across the entire capacity. The mining project in Senegal has stabilized, targeting 3.5 lakh tons of rock production this year, meeting 20% to 25% of the company’s rock needs.
Crop Protection and Specialty Segments
The Crop Protection & Bio business reported a very strong quarter. Standalone revenue grew 24% to INR785 crores, with EBIT growing 74% to INR158 crores, resulting in a margin improvement from 14% to 20%. This was driven by strong export performance (up 32% by volume) and domestic B2B growth (up 36%). The company is capitalizing on Mancozeb demand, having already expanded capacity by 20% and planning a further 30% expansion.
The Specialty Nutrient business achieved record Q3 volumes, driven by micronutrients and organic categories, and commenced work on the MAP water-soluble fertilizer plant in Vizag. The Nano DAP segment achieved market leader status, with YTD sales reaching over 4,000 KL (a 68% growth).
Subsidiary Performance (NACL Industries)
Coromandel’s subsidiary, NACL Industries, faced a tough quarter where domestic B2C sales were impacted, leading to lower margins despite revenue and EBITDA being better than the prior year. NACL successfully completed a rights issue to retire high-cost debt and fund CAPEX, leading to a credit rating upgrade to CRISIL AA stable. Management expects NACL’s operational improvements to start yielding significant benefits from Q1 FY27 onwards.
Financial Highlights (Consolidated)
Total Income for Q3 stood at INR8,863 crores (26% growth YoY). Consolidated EBITDA was INR805 crores (up from INR722 crores last year). Net Profit After Tax (NPAT) for the quarter was INR488 crores (compared to INR508 crores the previous year). Subsidy accounted for 82% of total income for the quarter.
Dividend Announcement
The Board, in its meeting on January 29th, approved an interim dividend of INR9 per equity share, representing a 900% return on the face value of INR1.
Source: BSE
