India: Coromandel International to Expand Granulation Facility, Develop Fungicide Manufacturing Plant

Coromandel International Limited, India’s leading agri solutions, has reported the financial results for the quarter ending 30 September 2024.

Highlights include:

• Total Income in Q2 was at Rs. 7,509 Cr vs Rs. 7,031 Cr for the corresponding quarter of last year
• EBITDA for Q2 was Rs. 983 Cr vs. Rs. 1,064 Cr for the corresponding quarter of last year
• PAT for Q2 was Rs. 696 Cr vs Rs. 762 Cr in Q2 for the corresponding quarter of last year
• Total Income in H1 was at Rs. 12,277 Cr vs Rs. 12,771 Cr for the corresponding period of last year
• EBITDA for H1 was Rs. 1,490 Cr vs. Rs. 1,774 Cr for the corresponding period of last year
• PAT for H1 was Rs. 1,027 Cr vs Rs. 1,267 Cr for the corresponding period of last year

Nutrient and Allied Business

The Revenue for the quarter ended September 2024 was at Rs. 6,746 Cr as against Rs. 6,307 Cr for the quarter ended September 2023. Profit before interest and tax for the quarter was Rs. 861 Cr vs. Rs. 998 Cr for the quarter ended September 2023.

The Revenue for the first half was at Rs. 10,944 Cr compared with Rs. 11,499 Cr in the corresponding period of the previous year. Profit before interest and tax for the first half was Rs. 1,297 Cr vs. Rs. 1,670 Cr in the corresponding period of the previous year.

Crop Protection Business

The Revenue for the quarter ended September 2024 was at Rs. 755 Cr as against Rs. 722 Cr for the quarter ended September 2023. Profit before interest and tax for the quarter was Rs. 110 Cr vs. Rs. 88 Cr for the quarter ended September 2023.

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The Revenue for the first half was at Rs. 1,306 Cr compared with Rs. 1,278 Cr in the corresponding period of the previous year. Profit before interest and tax for the first half was Rs. 173 Cr vs. Rs. 143 Cr in the corresponding period of the previous year.

Consolidated Results

Coromandel’s total income for the quarter ended September 2024 was at Rs. 7,498 Cr vs. Rs. 7,033 Cr for the quarter ended September 2023. The profit after tax for the quarter was at Rs. 659 Cr as against Rs. 755 Cr for the quarter ended September 2023.

Coromandel’s total income for the first half was at Rs. 12,281 Cr vs. Rs. 12,771 Cr in the corresponding period of the previous year. The profit after tax for the first half was at Rs. 968 Cr as against Rs. 1,249 Cr in the corresponding period of the previous year.

New Projects

The Board of Directors of Coromandel International Limited today approved capital projects with an investment outlay of around INR 800 Crore mainly pertaining to:

• Enhancement of granulation capacity by 7.5 lakh tons per annum for manufacture of complex and unique fertilizers at Kakinada, Andhra Pradesh.
• Setting up of a state-of-the-art, multi-product plant for manufacture of recently off-patented fungicides at Ankleshwar, Gujarat.

The capacity enhancement will involve setting up of a new granulation train for NPKs at Coromandel’s existing fertilizer manufacturing unit at Kakinada. The new granulation train will have an annual production capacity of 7.5 lakh tons, taking the total production capacity of the Kakinada site to 30 lakh tons. Earlier this year, company announced the setting up of Phosphoric acid plant with a capacity of 650 tons per day (TPD) and sulphuric acid plant with a capacity of 2000 TPD at a cost of INR 1000 Crore. The strategic location of the Kakinada facility on the east coast of India provides Coromandel with logistical advantages, ensuring efficient supplies to markets across India. The proposed granulation plant will be equipped with state-of-the-art technology, adhering to the highest environmental and safety standards, while ensuring energy-efficient operations. The investment will enable production of high-quality phosphatic fertilizers to meet the growing demand of Indian farmers.

Coromandel’s Board has also approved the establishment of a state-of-the-art, multi-product plant (MPP) for manufacturing Crop Protection Technicals at its Ankleshwar unit in Gujarat. This move aligns with the company’s growth ambitions in crop protection segment and capitalizes on India’s emerging role as a key player in the global AgChem supply chain. The investment reflects Coromandel’s long-term vision to become a leading player in crop protection, leveraging its expertise in complex chemistries to introduce next-generation molecules. Recently, the company has also launched 10 new crop protection products aimed at strengthening its domestic formulations business. The proposed MPP will further enhance Coromandel’s backend manufacturing capabilities and help meet the growing demand for the identified products in both domestic and export geographies.

Besides these major capex projects, the Board has also approved fund infusion into company’s mining entity Baobab Mining Chemical Corporation (BMCC) at Senegal for its ongoing capex program. Also, during the quarter, Coromandel through its wholly owned subsidiary, Coromandel Chemicals Limited, has announced acquisition of additional 8.8% stakes in BMCC, subject to regulatory approvals, which will take its overall shareholding in BMCC to 53.8%.

Commenting on the financial results, Mr. Sankarasubramanian S, Managing Director & CEO, Coromandel International Ltd., said:

“Company registered a healthy performance in Q2, led by higher sales volumes and improved operational efficiencies across the businesses. The company continues to make sequential recovery quarter on quarter, despite lower subsidy rates and firming up of raw material prices. Favorable agricultural environment like above normal monsoon and higher crop sowing supported agri inputs consumption. During the quarter, fertilizer business of the company increased its primary sale volumes by 13% and improved its consumption share to 20%.

“The company has taken steps to secure its backend supply chain and has been setting up intermediate capacities over the past few years, besides foraying into mining at Senegal. In January 2024, we had announced Sulphuric acid (2000 TPD) and Phosphoric acid (650 TPD) plants at Kakinada and the projects are progressing as per plan and are likely to be commissioned by early 2026, thereby making all of the company’s fertilizer manufacturing sites backward integrated and reducing their dependence on imports.

“The Board’s approval for expanding its Phosphatic fertilizer capacity by 7.5 lakh tons is in line with the Government’s Atmanirbhar Bharat initiative of achieving self-sufficiency in phosphatic fertilizer space. This expansion will make Kakinada plant one of the largest fertilizer manufacturing sites in India, cementing Coromandel’s leadership in the fertilizer sector. This brownfield expansion is expected to come up in two years’ time and will help in substituting DAP imports, especially in the northern markets, thereby increasing balanced nutrition through NPK fertilizers.

“Crop Protection segment exhibited a strong performance, driven by increased sale of new products in domestic formulations. Board’s approval today for setting up a new Multi-Product Plant is in line with our growth aspirations in the crop protection space. The plant is likely to be commissioned in 18 months’ time and will enhance company’s product portfolio, especially in the global markets.

“Company continues to expand its Retail footprint and has opened 45 new stores during the first half of the year. Company is scaling up its drone spraying services to the farmers and has covered ~40,000 acres during the first half of the year.

“With improved reservoir levels and forecast of above normal north-east monsoons, we expect the growth momentum to continue in the coming quarters.”

Coromandel International Limited is amongst India’s pioneers and leading Agri solutions provider, offering diverse products and services across the farming value chain. It operates in two major segments: Nutrient and other allied businesses and Crop Protection. These include Fertilizer, Crop Protection, Bio Products, Specialty Nutrients and Organic businesses. See all author stories here.

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