Academic Research Project –Not a Recommendation

Coromandel Int.Ltd Recommendation :xxx

Current price :1090
Equity Research Report Target price :xxx
About the company Stock data (as on sep 01 ,2023)
Coromandel International Ltd, referred to as "Coromandel" or the
company, is a leading agro solution provider, offering diverse products NIFTY :19513.6
and services across the farming value chain. It is the second-largest 52-week H/L(INR) :1267/838
phosphate fertilizer company in India and is headquartered in Market cap(INR crs) :36,605
Hyderabad. The company inaugurated its first fertilizer plant in o/s shares (crs) :29.40
Ranipet, Tamil Nadu, in 1906. Originally owned by EID Parry, the parent Dividend yield(%) :0.97%
company, Coromandel was acquired by the Murugappa Group in 1981, NSE code COROMANDEL
which holds a majority shareholding in EID Parry.
The company's brand is named "Gromor". Coromandel operates in Relative stock Performance
three major segments: crop protection, crop nutrition, and retail, each
with its own subcategories. It boasts sixteen manufacturing facilities Coromandel Nifty 50
and seven R&D centers located across seven states. Expanding its
marketing footprint, the company now has a presence in over 80
countries and operates 750 rural outlets in Andhra Pradesh, Telangana,
and Karnataka. During this quarter, the company generated a total
income of 7033 crores. Additionally, Coromandel holds a 15%
shareholding in Tunisia, 14% equity in Foskor, and a 40% equity stake in
Yanmar Coromandel Agri Solution Pvt Ltd.
Key highlights
• The major fall in input prices, improved capacity utilization, and
Absolute return(%)
backward integration measures will enhance the margin outlook in
the near term. 1 year :33.22%
• Additionally, Dhaksha, a differential drone start-up program, is 3 year : 58.16%
making significant strides on the technology front, with the 5 year :176.79%
company's investments yielding positive results. Moreover, the
company has acquired a 16.53% equity stake in X Machine, an AI-
based robotic startup focusing on agricultural organizations. Shareholding pattern
• The crop protection business of the company has experienced Promotors :57.3%
healthy volume growth, thereby enhancing its performance in both FII‘S : 7.2%
exports and domestic formulation segments. Furthermore, the DII'S :21.2%
export segment of the business witnessed a notable 29% growth, Public :14.3%
with the majority of the increase originating from South America
and Africa markets.
• Currently, the stock is trading at a P/E ratio of 17.5. Financial summary

Valuation view
• The company achieved a year-on-year growth of 30% in Q4FY23 (IN INR b) FY23 FY24E FY25E
compared to Q4FY22.
• The gross margin of the company stood at 20.8% in FY23, down Net Revenue 296.30 257.10 270.70
from 25.6% in FY22. EBITDA 29.3 28.7 30.9
• The decline in segment revenue during this quarter was attributed EBITDA
to lower primary sales by 7% and a decrease in subsidy rates. Margin(%) 9.90 11.20 11.4
• However, the bio product business of the company showed ROE(%) 28.2 23 20.9
improvement in procurement during the year. ROCE(%) 30.5 24.1 21.7
• Additionally, the business successfully commissioned a state-of- EPS(inr) 68.5 68 73.6
the-art sulfuric acid plant at Vishakhapatnam, with a capacity of
EV/EBITDA(x) 9.2 8.9 8
1650 tons per day, involving an investment of 400 crores.
Academic Research Project –Not a Recommendation

Global Economy
The global economy experienced a significant shock due to the Global GDP Projections
COVID-19 pandemic. While many countries witnessed a sharp
recovery post-COVID, CY22 proved to be a challenging period 0.50% 5.50%
characterized by high inflation, increased cost of living, and a
World
surge in energy prices. Additionally, geopolitical tensions
between Russia and Ukraine disrupted trade and supply chains, Advanced
affecting Western countries. Central banks worldwide are Economics
combating inflation through rate hikes. The recent conflict Emerging
between Israel and Gaza presents further challenges, particularly Economics
in energy costs and supply chain stability. Consequently, Euro area
developed economies grew at a slower pace of 2.7% compared
to 5.0% in CY 2021, while emerging and developing economies US
posted growth of 4.5% versus 6.5% in CY 2022. Within the Euro
region, companies with a dominant international presence grew Japan
at 3.5% compared to 5.2% in CY 2022. Overall, the global
economy witnessed a growth rate of 3.4% in CY 2022, down UK
from 5.0% previously. Global growth is projected to decrease
from an estimated 3.5% in CY22 to 3.0% in both CY 23 and CY 24. China
While the CY23 forecast is slightly higher than previously
anticipated, it remains weak compared to historical standards. India
The continued rise in central bank policy rates aimed at
combating inflation continues to weigh on economic activity. 2022A 2023P 2024P
Global headline inflation is expected to decline from 8.7% in
CY22 to 6.8% in CY23 and further to 5.2% in CY24.
Source IMF WEO,RBI,SBI Research company analysis
Indian economy India GDP growth
FY23 marked a year of significant achievement for India as it
surpassed the UK to become the 5th largest economy globally. 10.00% 8.00%
India recorded a growth rate of 7.2% in FY23, surpassing the 5.00% 6.00%
global average of 3.5%. Despite facing various global economic 4.00%
challenges such as the post-COVID impact, supply chain 0.00% 2.00%
disruptions, increased inflation, and interest rate hikes, the 2018 2019 2020 2021 2022 2023 2024 0.00%
Indian economy exhibited resilience and sustained growth. This -5.00% -2.00%
growth was fueled by government initiatives across multiple
-10.00% -4.00%
fronts, including the PLI scheme, National logistic reforms,
increased infrastructure spending, robust local demand, and India Global
fast-paced digitalization. According to a note from SBI Research
Economist, India is expected to become the third-largest
economy by FY28, two years earlier than projected. The SBI
economist further forecasted a growth rate of 8.1% in the first India GDP Quarterly growth Actual vs
Projected
quarter of FY24, pushing the overall growth rate to 6.5%. India
recorded a growth rate of 13.5% in the first quarter of FY23. This 16.00%
forecast aligns with RBI projections of 6.5% growth in FY24 but is 14.00%
more optimistic than the International Monetary Fund’s revised 12.00%
forecast of 6.1%. Earlier this week, the IMF revised its growth 10.00%
forecast upwards by 0.2 percentage points on the back of strong 8.00%
domestic investment. On the demand front, urban consumption 6.00%
remains flat while rural demand shows signs of revival. 4.00%
Investment activity is benefiting from public sector capex, and 2.00%
strong growth is observed in imports and the production of
capital goods. Additionally, inflation is expected to soften and
fall within the targeted range soon. The Indian economy is Actual Projected
robustly progressing towards becoming the 3rd largest economy
with a $5 trillion GDP. Source IMF WEO,RBI,SBI Research company analysis
Academic Research Project –Not a Recommendation

Global Agricultural Industry Indian Agricultural Industry

The Food Price Index, which monitors the movement of The Indian agricultural industry contributes
agricultural commodities, has witnessed its twelfth 18.3% to the Gross Value Added of the country
consecutive monthly decline since reaching its peak in and accounts for 47% of India’s employment.
March 2022, dropping by 21% over this period, with Over the past six years, the agriculture sector in
significant declines observed across vegetable oil and India has maintained an annual growth rate of
cereals. Global cereal production in 2022 is estimated to 4.6%. For the estimation of 2022-23, the total
decrease by 1.3% (to 2,774 million MT), resulting in a food grain production in the country is
marginal decrease in the world cereal stocks-to-use ratio, anticipated to reach a record high of 323
indicating a generally balanced supply-demand million MT, representing a 2.5% increase over
relationship. According to the OECD-FAO Agricultural the previous year. The sector is projected to
Outlook 2022-2031, global agricultural production is grow by 3.5% during 2022-23. The National
projected to increase by 1.1% per annum over the next Agriculture Market of India, an electronic
decade, with the bulk of the additional output expected to trading platform, has supported farmers by
originate from middle- and low-income countries. This providing them with much-needed access to
growth will be driven by improved access to inputs and trade at better prices. The government's plan
increased investments in productivity-enhancing to convert 0.3 million fertilizer retail shops into
technologies, infrastructure, and training. Since the early "Pradhan Mantri Kisan Samrudhi Kendras" aims
2000s, there has been a significant increase in demand for to provide nutritional food to the populace. The
biofuels, spurred by policies aimed at reducing CO2 United Nations has declared 2023 as the
emissions and decreasing dependence on imported fossil International Year of Millets, acknowledging
fuels. However, biofuel demand is anticipated to slow India's significant contribution of nearly 20% to
down over the next decade, with India accounting for half global millet production. Millets are recognized
of the additional consumption. India has set a target of for their lower carbon and water footprints and
achieving 20% ethanol blending by 2025 and successfully their resilience to climate change impacts. The
reached 10% blending in 2022. focus on technology such as drone-based
spraying in the agrochemical industry, along
with efforts to make it more affordable for
farmers, has led the government to closely
Food Price Index engage with drone manufacturers, service
160
providers, and agrochemical companies to
143.7 develop cost-effective solutions and enhance
140
125.7 126.9 technology. Drone manufacturing has been
included under the Production Linked Incentive
120
scheme. In the Union Budget 2023-24, the
95.9 95.1 98.1
100 establishment of an ‘Agriculture Accelerator
Fund’ aims to foster entrepreneurship among
80 rural farming communities by building a startup
60 ecosystem. The Indian agricultural sector has
demonstrated commendable performance by
40 taking significant strides towards developing
sustainable solutions, particularly in mitigating
20
adverse climate change impacts, and has
0 maintained an average growth rate of 4.6% per
2018 2019 2020 2021 2022 2023 annum over the last six years, with total food
grain production expected to reach 323 million
MT.
Academic Research Project –Not a Recommendation

GLOBAL CROP NUTRITION

In the realm of crop nutrition, sudden export sanctions imposed on Russia and Belarus, which collectively
account for 41% of globally traded potash and 25% of nitrogenous fertilizers, resulted in significant volatility in
global markets. Additionally, the natural gas and ammonia markets contributed to record-high raw material
costs for processed phosphate producers. The sector, which had been experiencing lower channel inventory,
witnessed further challenges with export restrictions from China, exacerbating the already reduced global
availability. The diminished global supplies, stemming from market disruptions and heightened demand in
competing markets, led to a surge in fertilizer prices, reaching a peak in mid-2022. However, in the latter half of
the year, fertilizer prices began to decline due to several factors, including market loosening, record output in
Russia surpassing initial expectations, shifts in trade flows, and diminished buying interest for fertilizer
applications due to improved affordability. With declining fertilizer prices and an improvement in the energy
situation in Europe, thanks to robust stocking and lower-than-expected demand, affordability has been steadily
improving. It is anticipated that fertilizer demand will rebound in FY2024 to compensate for the application
shortfall in the previous year. Moreover, supply is expected to improve with an overall increase in
manufacturing capabilities in major producing hubs, along with the potential easing of export restrictions in
China and enhancements in potash supplies. According to the International Fertilizer Association, a 3% recovery
in global fertilizer consumption is anticipated in 2023, reaching 194 million MT of nutrients (+5.9 million MT),
thus returning consumption levels to those seen in 2019.

Global fertilizer consumption

6.00% 4.60%
4.00% 2.60%
2.20% 2.00%
2.00%
0.00%
FY19 FY20 FY21 FY22 FY23 FY24
FY14
-2.00%
-4.00%
-3.60%
-4.20%
-6.00%

FY19 FY20 FY21 FY22 FY23 FY14

FY24

INDIAN CROP NUTRITION

India ranks as the second-largest consumer of fertilizer globally, trailing only behind China, and serves over 190
million hectares of gross cropped area, benefiting approximately 140 million farmlands. As the third-largest
producer of fertilizer, India meets 70-75% of its nutrient requirements domestically. In the case of DAP & NPKs,
efforts are concentrated on reinforcing the backward supply linkages for crucial raw materials and finished
products like DAP. There has been a heightened emphasis on revitalizing the Single Super Phosphate industry,
known as the most cost-effective source of Phosphate, providing multiple nutrients such as Sulphur and
Calcium. In FY23, the government released INR 2.5 lakh crore funds towards fertilizer subsidies, surpassing the
budgetary allocation of INR 1.05 lakh crore for Urea and NPK fertilizers. The revival of Urea plants and increased
utilization by Phosphate players contributed to an 11% rise in production during the year. To promote balanced
nutrition and address soil health concerns, the industry has collaborated with the government to advocate the
use of organic fertilizers and integrated nutrient management programs. Organic variants like City compost
Potash, derived from molasses, have been included in the subsidy program to encourage their adoption.
Additionally, new technology solutions such as nano, slow release, coated, liquid, and bio-fertilizers are being
actively promoted. A significant development in the year was the introduction of the "One Nation One
Fertilizer" initiative. These centers, besides providing agricultural inputs, will offer farm extension and diagnostic
services, as well as farm mechanization solutions. Drones are expected to revolutionize the adoption of water-
soluble fertilizers, liquid fertilizers, Nano fertilizers, and crop protection, representing a game-changing
advancement.
Source: company analysis
Academic Research Project –Not a Recommendation

GLOBAL CROP PROTECTION

The global Crop Protection industry is projected
Global crop potection industry
to experience a 6% growth, reaching USD 69 80
billion in 2022, primarily driven by improved 69
sales in Latin America and North America. 70 65
Enhanced crop prices throughout the year
facilitated increased consumption of 60
agrochemicals. Global agrochemical companies
are seeking to diversify their sources, with India 50
emerging as a robust manufacturing alternative.
The escalating focus on sustainability and 40
environmental consciousness is fostering a
30
more stringent regulatory landscape,
particularly evident in Europe, thus shaping the 21 22
19
20 16 16 16
global crop protection market and advocating 13
11
for the adoption of biologicals and integrated
10
pest management systems. However, adverse
weather patterns prevailed in key regions such
0
as Africa and the Asia-Pacific, while Latin Asia pacific Latin EMEA North Total
America exhibited relatively favorable america america
conditions across its primary producing areas.
The manufacturing sector faced heightened 2021 2022
restrictions due to the Chinese government's
initiatives toward carbon neutrality, aimed at
enhancing energy efficiency. Furthermore, INDIAN CROP PROTECTION
elevated prices of critical commodities like In the field of crop protection, the primary culprits
natural gas, Sulphur, and ammonia contributed causing crop loss are insects, diseases, and weeds,
to a global increase in product prices. against which these products are engineered to
safeguard crop health and address these
challenges. In India, the crop protection sector has
been influenced by various factors. Widespread
Consumption of pesticide in rainfall across many regions of the country resulted
India (tons) in reduced pest infestations, leading to decreased
demand for crucial agrochemical compounds.
70
62.19 63.28 Moreover, elevated end-user prices and higher per-
61.7
59.67 acre expenses for farmers due to rising input costs
60
52.47 have affected the demand for agrochemical
products. Throughout the year, the industry
50
collaborated through a technical task force and
40
presented its findings to the Expert Committee
regarding the proposed prohibition of 27
30
pesticides. Industry players have initiated trials for
the Drone Application of Pesticides, supported by
20 the Central Insecticides Board & Registration
Committee. The committee has granted permission
10 for the temporary usage of 507 registered crop
protection products with drones for a two-year
0 interim period. This move is expected to promote
2018-2019 2019-2020 2020-2021 2021-2022 2022-2023 widespread adoption of new technology, which has
been observed to be more efficient and safer.

Source:stastica,company analysis
Academic Research Project –Not a Recommendation

Economic Outlook:
• The global economy is experiencing a muted recovery, with inflationary pressure and geopolitical issues
persisting.
• The Indian economy is the fastest-growing large economy, with a revised GDP growth of 6.1% in Q1FY23,
while global growth is approximately 3% in Q2FY23.

• Fertilizer Industry and Nutrient Consumption:

• The Nutrient and Allied business segment witnessed an 18% growth in sales volume for phosphate
fertilizers in Q1FY23.
• However, the Company's Nutrient and Allied businesses, which concentrated on nutrient consumption,
experienced a decline in segment revenue in Q2FY23. In the same quarter, primary sales volume for DAP
and complex fertilizers within the industry increased by 19%.
• Meanwhile, the Crop Protection segment was adversely affected by industry headwinds and sub-normal
rainfall in Q1FY23.

Market & Business development.

• Coromandel conducted a soft launch of Nano DAP, a nanotechnology-based fertilizer, with plans to
introduce it fully in Q2FY23.
• Additionally, the company acquired a majority shareholding in Daksha Unmanned Systems, a drone start-
up, in the first quarter, and commissioned a state-of-the-art sulphuric acid plant and desalination plant in
Q2FY23.
• The crop protection business experienced healthy volume growth, particularly in exports.
• The business initiated regulatory and infrastructure activities at the new Dahej site.
• The specialty chemicals business commenced marketing its products to customers and focused on
strengthening research and technology processes.
• The company closely engaged with customers in the CDMO (Contract Development and Manufacturing
Organization) business, organizing customer visits to its facilities.
• The bio product business improved procurement and engaged in process improvement initiatives.
• Retail stores performed well during the quarter, with 93% remaining profitable.

Financial Performance:
• Coromandel International demonstrated steady performance in Q1, marked by volume growth in fertilizer
and sustained profitability.
• The company recorded a consolidated total income of INR 5,738 crores in Q1, accompanied by an EBITDA
of INR 709 crores.
• In Q2FY23, the consolidated total income amounted to Rs 7,033 Crores, with a net profit after tax of Rs
755 Crores
• The subsidy outstanding as of September 30, 2023, stood at Rs 1,497 Crores.
• Coromandel International maintains a long-term credit rating of CRISIL AAA stable and a short-term rating
of CRISIL A1+.
• The rupee traded in a range of 81.81 to 83.30 during the quarter.

Export Market:
• The Crop Protection business has grown by 17% in the export market, with plans to launch novel
combination and technical products in Q1FY23

Crop Sowing and Reservoir Levels:

• India experienced below-normal Southwest monsoon, impacting crop sowing.
• Crop sowing in Andhra was impacted, while other regions were close to normal levels.
• All India reservoir levels are at 92% of the long period average in Q2FY23
Academic Research Project –Not a Recommendation

Commentary

Outlook and Future Plans:

IN Q2FY23
• Margins in the crop protection business have been impacted by price pressures and decline in commodity prices.
• Future margin growth will depend on market conditions and government support.
• Company has adequate management bandwidth to execute large Capex projects.
• Subsidy receivables have reduced due to timely claims submission and government support.
• Company is involved in the management of the fertilizer investment ,drone investment & manufacturing and
helping in setting up operations.

Capex

According to a report by Crisil, the Indian agrochemicals sector is poised to experience a 3 percent revenue
decline in the current fiscal year, attributed to diminishing prices, sluggish demand, and reduced reservoir levels.
This downturn is primarily driven by an influx of supply from China, dwindling export demand, and the adverse
effects of lower reservoir levels on winter crop planting. Operating margins are expected to decline by 400-450
basis points this financial year due to decreased sales volumes and realizations, impacting cash flows for
agrochemical companies. The prevailing subdued demand is prompting manufacturers in the agrochemical sector
to scale back their capital expenditure plans. Despite the anticipated revenue decline of 3% in FY24, robust
balance sheets should provide adequate resilience to weather business challenges. In the Specialty Chemicals
category, substantial growth is anticipated, with forecasts suggesting a value of approximately $50 billion by
2025.

Import

Relying heavily on rock phosphate imports underscores India's need to enhance its long-term sustainability and
supply security objectives, a goal that investments in BMCC aim to achieve for meeting the nation's fertilizer
demands. As a net importer of sulphuric acid, India stands as the third-largest importer globally, with imports
totaling close to 20 lakh metric tonnes. Despite being the second most utilized fertilizer in India, Di-Ammonium
Phosphate (DAP) sees over 50% of its requirement met through imports, highlighting the country's dependency
on external sources.

Export
In FY23, although the budgetary allocation for Urea and NPK fertilizers stood at INR 1.05 lakh crore, a
substantial amount of INR 2.5 lakh crore was disbursed towards fertilizer subsidies. Looking forward, the
affordability of fertilizers has been steadily improving, buoyed by decreasing fertilizer prices and a more
favorable energy situation in Europe, thanks to robust stocking and a mild winter. Anticipated enhancements in
fertilizer demand for FY2024 are expected to compensate for the previous year's application shortfall.
Moreover, supply prospects are set to ameliorate with enhanced manufacturing capacities in key production
centers and the potential relaxation of export restrictions by global suppliers. On the front of crop protection,
there is a discernible trend of global agrochemical firms seeking diversified sourcing options, with India poised
as a robust manufacturing base. Notably, the country's total foodgrain production is estimated to reach a record
323 million MT, further underlining the sector's growth trajectory. Forecasts indicate a potential surge, with
approximately USD 50 billion worth of agricultural and livestock produce slated for export this year. However,
recent export sanctions on Russia and Belarus, major players in global potash and nitrogenous fertilizers trade,
have introduced significant volatility into the global markets. Added strain from export restrictions imposed by
China has exacerbated supply pressures amidst an already constrained global availability. Additionally, soaring
costs of raw materials such as natural gas and ammonia have contributed to record-high production expenses
for fertilizer manufacturers. The looming threat of diminished global supply has triggered a swift escalation in
fertilizer prices and intensified demand dynamics..
 Academic Research Project –Not a Recommendation

Commentary

The company benefits from strong management with extensive experience and technical expertise. Its board of
independent directors' hails from diverse industries and includes respected professionals such as a former Union
Finance Secretary, ex-CFO, research faculty, and development economists. Upon scrutinizing available data, no
prominent political affiliations have been found between the leadership and independent directors with national or
regional political parties. Additionally, there are no reported conflicts of interest between the independent directors
and the company. Mr. A. Vellayan, the company's chairman, brings significant experience in the fertilizers business,
general management, and financial planning, having previously served as the vice chairman of the Murugappa Group

Shareholding Pattern

Yearly and quarterly shareholding pattern of the company

Particular Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Promotors 61.81% 61.78% 61.63% 57.56% 57.53% 57.41%
FIIs 5.58% 4.13% 3.50% 7.73% 7.08% 9.40%
DIIs 10.49% 13.78% 19.71% 20.59% 21.23% 18.86%
Public 22.12% 20.31% 15.16% 14.12% 14.17% 14.33%

Particular Sep-21 Dec-21 Mar-22 Jun-22 Sep-22 Dec-22 Mar-23 Jun-23 Sep-23
Promoters 57.54% 57.53% 57.53% 57.48% 57.45% 57.41% 57.41% 57.41% 57.34%
FIIs 7.63% 7.21% 7.08% 8.04% 9.93% 10.26% 9.40% 7.56% 7.18%
DIIs 21.12% 21.74% 21.23% 20.06% 18.65% 18.00% 18.86% 20.59% 21.11%
Public 13.71% 13.52% 14.17% 14.43% 13.97% 14.34% 14.33% 14.46% 14.37%

Quarterly Promotor Holding vs Pledge Quarterly FII Holding Pattern

60 12.0%
50 10.0%
40 8.0%
30 6.0%
20 4.0%
10 2.0%
0
0.0%

promotor holding % ofpromotor holding

Academic Research Project –Not a Recommendation

Management analysis

Details and experience of management

S.NO Name Designation Qualification

He completed BSc commerce and a Diploma in Industrial Administration

from Aston University, UK. He has extensive experience in the fertilizer
business, general management, and financial planning, and has also
received a Master’s in Business Studies from the University of Warwick
Business School and a Doctor of Science conferred by Tamil Nadu
1 Mr .A.Vellayan Chairman
Agricultural University and also Aston University UK. Apart from being the
Chairman of the Indian Institute of Management, Kozhikode, he is an
Independent Director in Kanoria Chemicals & Industries Limited and
NOCIL Limited. He has held various positions in the Murugappa Group in
the past.

He has done his Graduation in Commerce and completed the ‘Owner

President/Management Program’ from Harvard Business School at
Boston, USA Mr. Alagappan started his career with GE Capital Services
India . After a two-year stint with GE, he joined the Murugappa Group in
1999 in Parry ware, part of E.I.D Parry Limited. he served in Tube
Investments of India Limited heading various divisions and functions
Executive
before eventually becoming the President & Business Head of TI Cycles.
2 Mr. Arun Alagappan Vice
Mr. Alagappan was appointed as Executive Director of Cholamandalam
chairman
Investment and Finance Company Limited and subsequently as the
Managing Director . He held this position until F, prior to joining
Coromandel International Limited. He holds directorship in various other
companies such as Lakshmi Machine Works Limited and Tirumala
Chemicals Limited. Mr. Alagappan is acknowledged as a thought leader in
the Bicycle Industry and the NBFC Industry.

He majored in Mathematics at the University of Madras and is a member

of The Institute of Cost and Management Accountants of India. He has
done his Advanced Management Program . He served the Company as
President Nutrient Business, before being appointed as Executive Director
– Nutrient Business, responsible for Fertilisers and Specialty Nutrients
Mr. business segments. His professional experience of almost three decades
Executive
3 Sankarasubramania in finance, operations, and general management began at E.I.D Parry
director
n Limited, where he was primarily involved in corporate finance. He has
extensive experience in Business Strategy, General Management, M&A
and Policy interventions especially for the Fertiliser sector. Currently, he
serves on multiple boards including the Fertiliser Association of India,
Tunisian Indian Fertiliser S.A., Tunisia, and Foskor Ltd., South Africa, along
with some of the company’s subsidiaries.
Academic Research Project –Not a Recommendation

He holds a Master’s Degree in Business Administration from George

Washington University, USA, and is also a graduate of the University of
Agricultural Sciences in Bangalore. With a professional experience
spanning over 25 years in the Murugappa Group, he currently serves as
Mr. M .M the Chairman of E.I.D Parry (India) Limited, Coromandel Engineering
4 Director
Venkatachalam Company Limited and Parry Agro Industries Limited and is also part of the
board of directors of Ramco Cements Limited and Ramco Systems
Limited. Mr. Venkatachalam’s role as a Director in the Company
emphasizes his expertise and experience to provide valuable insights to
drive the organization towards success

He has a Ph.D. degree in Mechanical Engineering from University of

California at Berkeley, and B.Tech. degree from Indian Institute of
Technology, Mumbai. He served the Company as President Crop
Protection, Bio Products & Retail, before being appointed as Executive
Director – Crop Protection, Bio Products and Retail Business. He has over
Dr. Raghu ram 28 years of experience in Indian industry and business consulting with
5 Executive
Devarakonda about 16 years in C-Suite positions. He started his career as a consultant
director
with Accenture, Mumbai. He also worked for the Murugappa Group as
Head - Corporate Strategy and Planning Department and was the
Business Head of Tl Cycles for about 6 years. Later, in his second stint
with the firm, he joined Accenture as Managing Director. He also served
as Chief Operating Officer at Ramco Cements.
Academic Research Project –Not a Recommendation

Independent director

S.N
O Name Designation Qualification
He holds a Master’s Degree in Social Policy and Planning from the
London School of Economics and a Master of Arts from St.
Stephen’s College, Delhi. Having joined the Indian Administrative
Service in 1976, Mr. Bose served in various positions in the
Government of Madhya Pradesh and the Government of India
before retiring as the Union Finance Secretary, Government of
India. In the Finance Ministry he served as Secretary , Secretary and
Independent
Mr.Sumit Bose Secretary as well as Secretary in the Thirteenth Finance
1 director
Commission. Mr. Bose is currently on the boards of HDFC Pension
Management Company Limited, HDFC Life Insurance Company
Limited, TATA AIG General Insurance Company Limited, JM
Financial Limited, J B Chemicals and Pharmaceuticals Limited and
other companies. He also serves on the Boards of non-profit
organisations such as Nidhi Centre for Legal Policy, Water Aid India,
Parivaar and Foundation to Educate Girls Globally.
She has extensive background in General Management and
Strategic Financial Planning. She is a Science Graduate (Hons) from
the University of Sussex and pursued Owners Management
Programme from Harvard Business School and Strategic Financial
Ms.Aruna Independent Planning from IIM Ahmedabad. Having been associated with Ador
2
B.Advani Director Welding Limited for over four decades, during which she served as
Executive Chairman, she continued to be part of the Boards of
various associated companies. Ms. Advani is presently on the Board
of Metro Brands Limited, leveraging her valuable experience and
insights to assist the company in its endeavours.
He is a Chartered Accountant and holds a Post Graduate Diploma in
Management from IIM Ahmedabad. He started his career in Asian
Paints Limited and, thereafter, worked with Citigroup for twenty
years in multiple roles in India, Australia, South Korea, UAE and the
UK. His last role in Citigroup was as the Regional Chief Financial
Officer for the Europe and Middle East divisions for the Consumer
Mr.K V Independent Bank. He then worked as the Chief Financial Officer of a start-up
3
Parameshwar Director financial services entity- Dunia Group – in the UAE from 2010 till
early 2018. He is currently the head of Administration and Finance
at the Wildlife Conservation Society – India and holds Directorship
in 360 One Asset Trustee Limited. Mr. Parameshwar has more than
30 years of experience and expertise in Business and Financial
Management including Control, Reporting, Taxation, Treasury and
Legal.
Academic Research Project –Not a Recommendation

He holds a B.Tech. degree in Chemical Engineering from IIT Madras, and a

Ph.D. in the same field from Yale University ( Dr. Nagarajan is currently the
Alumni Community Chair Professor in the Department of Chemical
Engineering, IIT Madras. He recently stepped down as the Head of the
Dr.R.Nagaraj Independen Department after a 3-year term. His teaching and research activities at IIT
4 an t Madras are focused on cleanroom processes, cancer nanotechnology and
director ultrasonic process-intensification. Post-Ph.D., he served as Research Faculty
in the Department of Mechanical & Aerospace Engineering at West Virginia
University, Morgantown, WV, USA. He was also a Senior Technical Staff
Member with IBM Storage Systems’ Development Laboratory .

Mr. Venu holds a Graduate Degree with Honors in the Jerome Fisher
Program in Management and Technology . He holds B.S. in Mechanical
Engineering from the School of Engineering and Applied Sciences and B.S. in
Mr.Sudarsha Independen
5 n Venu t director
Economics . He has also completed M.Sc. in International Technology
Management . He is the Managing Director of TVS Motor Company Limited ,
Non-Executive Director in Sundaram-Clayton Ltd and Chairman of TVS Credit
Services Ltd

she is a former executive director of the Reserve Bank of India (RBI). She is a
a public policy professional, a development economist, policy analyst and a
writer on economic subjects. At RBI, her responsibilities included heading
the Department of Currency Management, Legal Department, Financial
Inclusion Department, Customer Protection and Education Department. She
was the First Appellate authority under the Right to Information Act, as well
as the RBI nominee on the governing council of the Institute of Banking
Dr.Deepali Independen Personnel Selection and director on the Board of Bharatiya Reserve Bank
6 Pant Joshi t Director Note Mudran Private Limited part of the Board for Financial Supervision at
the RBI and the Board for Financial Supervision of RRBS and Co-operatives at
NABARD. Dr. Joshi is a macro policy analyst, a prolific writer with 9 acclaimed
books and a host of papers to her credit. She was Banking Ombudsman for
the State of Undivided Andhra Pradesh, Regional Director RBI Office. She
holds Law and Management Degree and is a fellow of the Harvard University
Asia Centre whereas a Fellow of the Harvard University she pursued
postdoctoral research in Economics and Finance.
Academic Research Project –Not a Recommendation

Commentary

Management remuneration

S.No Name Designation Salary ( In Lakhs)

1 Mr. Arun Alagappan Executive Vice Chairman 739.82
2 Mr. Sankara Subramanian Executive Director 42.63
3 Mr .Raghu Ram Devarkonda Executive Director 34.39

% Increase In Remuneration In FY 2022-

Name Designation Ratio
2023
Mr. Vellayan Chairman 27.92 0.79
Mr. Arun Alagappan Executive Vice Chairman 100.76 42.35
Mr Venkatachalam Director 1.84 8
Mr.Sankara subramaniyan Executive Director 5.81 -
Mr.Raghuram Devarkonda Executive Director 4.68 -
Mr.Jayasree Sathyagopan Chief Financial Officer 43.53 17.65
Mr. Rajesh Mukhija Secretary 23.44 13.1

No of meetings
Name Designation Attendance at last AGM
Held Attended
Mr.Vellayan Non-Executive director and promotor 7 7 Present
Mr.Aun alagappan Executive and promotor 7 7 Present
Mr.sankarasubramaniyan Executive director 2 2 Not attended
Dr.Raghuram devarkonda Executive director 2 2 Not attended
Mr.Venkatachalam Non-executive director and promotor 7 7 Present
Non-executive and independent
Mr.Sumit bose 7 7 Present
director
Non-executive and independent
Ms.Aruna advani 7 7 Present
director
Non-executive and independent
Dr.Nagarajan 7 7 Present
director
Non-executive and independent
Mr.Parameshwaran 7 7 Present
director
Non-executive and independent
Mr.Sudarsan venu 7 5 Present
director
Non-executive and independent
Dr. Deepali pant Joshi 2 2 Not attended
director
Academic Research Project –Not a Recommendation

Revenue
Sales And Sales Growth
The revenue of company INR54.8b in 4QFY23, 29.5%
YoY higher .The company recorded a consolidated total 300000 60%
50%
income of Rs 7,033 Crores during the quarter. The sales 250000
40%
volume of 8.6 lakh metric tons during the quarter 18% 200000 30%
higher than the last year at 7.3 lakh metric tons.
150000 20%
Manufactured DAP plus complex volume is 7.6 lakh metric
10%
tons, higher by 10% over last year. The decrease in 100000
0%
revenue is mainly on account of drop-in subsidy rates in 50000 -10%
the fertilizer business compared to last year. Total
0 -20%
phosphate fertilizer manufacturing volumes including SSP
FY19 FY20 FY21 FY22 FY23 FY24E FY25E
grew 4% YoY while total manufacturing phosphate
fertilizer volumes (DAP and NPK) declined 1% YoY. Sales sales growth
Company’s Nutrient and Allied business focused on the
nutrient consumption. Lower primary sales about 7% and
fall in subsidy rates resulted in decline in the segment
revenue.
EBITDA and EBIDTA margin
Gross Margin 12000 14
10000 12
EBITDA grew by 6.2% in Q4FY23. In FY23.We expect 10
8000
the company to be able to improve margins through 8
efficient sourcing of raw materials, utilization of plant 6000
6
flexibility and expansion. Consolidated EBITDA for the 4000
4
quarter was Rs 1,059 Crores vis-à-vis Rs 1,057 Crores last 2000 2
year and for the half year it was Rs 1,768 Crores vis-à-vis
0 0
Rs 1,742 Crores during the last year. Subsidy businesses’
share in EBITDA stands at 81% during the quarter In the
previous year, it was 78% for both the quarter and first
half. Net profit after tax for the quarter was at Rs 755 EBITDA EBITDA Margin
Crores in comparison to Rs 741 Crores for the
corresponding quarter last year .

Inventory And Inventory Days

Inventory
5000 140
4416
4500 127
The channel inventory is slightly higher. In 120
4000 3663
Telangana, the rains have been pretty excessive in 109
3500 3241 98 100
certain districts and some parts of interior 94
3000 2697 2600
Maharashtra, Karnataka are not doing well. However, 80
global industry headwinds, namely higher channel 2500 69
2000 60
inventory and decline in commodity prices had its
impact on price realization. The export segment of the 1500 40
business grew by 29% with major increase coming from 1000
20
500
South America and Africa markets. Brazil is our largest
0 0
consumer of agrochemicals and there is a high level of
Jan-19 Jan-20 Jan-21 Jan-22 Jan-23
channel inventory in Brazil.
inventory inventory days

Source: company analysis

Academic Research Project –Not a Recommendation

Annual snapshot

Particulars INR mn FY19 FY20 FY21 FY22 FY23 FY24E FY25E

Total income from operation 132246 131367 141820 191109 296279 257118 270687
change(%) 19.3 0.7 8 34.8 55 13.2 5.3
Material cost 93396 90556 96879 142165 234725 194608 204043
Total Expenditure 117815 114057 121977 169610 267017 228388 239833
EBITDA 14431 17310 19843 21499 29262 28730 30854
EBITDA Margin(%) 10.9 13.2 14 11.2 9.9 11.2 11.4
Depreciation 1138 1580 1731 1727 1820 2045 2315
EBIT 13292 15730 18112 19772 27442 26685 28540
other income 371 400 751 1443 1711 1369 1506
PBT before EO expenses 11156 13777 17806 20460 27253 27054 29295
Tax 3721 3135 4568 5213 6879 6810 7374

Quarterly snapshot
Particular INR mn FY22Q1 FY22Q2 FY22Q3 FY22Q4 FY23Q1 FY23Q2 FY23Q3 FY23Q4
Net sales 36639 61475 50726 42268 57291 101134 83096 54758
Total expenditure 31808 54043 45288 38471 50437 90564 75290 50726
EBITDA 4831 7432 5439 3797 6854 10570 7806 4032
EBITDA Margin 13.2 12.1 10.7 9 12 10.5 9.4 7.4
Depriciation 423 421 429 454 446 457 471 446
Interest 171 192 178 214 266 542 568 524
other income 218 189 269 768 536 311 396 469
PBT before EO expenses 4455 7008 5101 3897 6678 9881 7163 3531
Extra - ord expense 0 0 0 0 0 0 0 0
PBT 4455 7008 5101 3897 6678 9881 7163 3531
Tax rate 24.8 26 25.4 25.4 25.5 25.1 25 25.5
Academic Research Project –Not a Recommendation

COROMANDEL INTERNATIONAL LTD

(COROMANDEL | BSE Code: 506395)

INR 1076.45
52 Week (High - INR 4609 & Low - 3292)

Revenues (INR Crs.) Net Profit (INR Crs.) Average Total Assets (INR Crs.)

12,760
2,013
29,628
10,361 10,090
1,528 9,522
1,329
19,111
1,065
13,137 14,182

2020 2021 2022 2023 2020 2021 2022 2023

2020 2021 2022 2023

Return on Equity (%) Return on Asset (%) Financial Leverage

28.22% 2.70x
28.08%
27.75% 15.15% 15.78%
13.96% 2.01x
1.75x 1.79x
10.28%
26.56%

2020 2021 2022 2023 2020 2021 2022 2023 2020 2021 2022 2023
Academic Research Project –Not a Recommendation

Dupont Analysis - Return on Equity & Return on Asset

Return on Equity
Year Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23
Net Profit 477 691.3 720.5 1,065.00 1,329.20 1,528.50 2,012.90
Average Shareholder Equity 2,762.40 2,893.50 3,127.30 3,838.00 4,734.10 5,754.40 7,133.00
Return on Equity 17.27% 23.89% 23.04% 27.75% 28.08% 26.56% 28.22%

Year Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Net Profit 477 691.3 720.5 1,065.00 1,329.20 1,528.50 2,012.90
Revenue 10,030.80 11,082.90 13,224.60 13,136.70 14,182.00 19,110.90 29,627.90
Net Profit Margin (A) 4.75% 6.24% 5.45% 8.11% 9.37% 8.00% 6.79%
Revenue 10,030.80 11,082.90 13,224.60 13,136.70 14,182.00 19,110.90 29,627.90
Average Total Asset 8,913.30 9,246.70 10,211.10 10,361.30 9,522.10 10,090.10 12,759.80
Asset Turnover Ratio (B) 1.1x 1.2x 1.3x 1.3x 1.5x 1.9x 2.3x
Average Total Asset 8,913.30 9,246.70 10,211.10 10,361.30 9,522.10 10,090.10 12,759.80
Average Shareholder Equity 2,762.40 2,893.50 3,127.30 3,838.00 4,734.10 5,754.40 7,133.00
Equity Multiplier (C) 3.23x 3.20x 3.27x 2.70x 2.01x 1.75x 1.79x
Return on Equity (A*B*C) 17.27% 23.89% 23.04% 27.75% 28.08% 26.56% 28.22%

Return on Asset

Year Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Net Profit 477 691.3 720.5 1,065.00 1,329.20 1,528.50 2,012.90
Average Total Asset 8,913.30 9,246.70 10,211.10 10,361.30 9,522.10 10,090.10 12,759.80
Return on Asset 5.35% 7.48% 7.06% 10.28% 13.96% 15.15% 15.78%

Year Mar-17 Mar-18 Mar-19 Mar-20 Mar-21 Mar-22 Mar-23

Net Profit 477 691.3 720.5 1,065.00 1,329.20 1,528.50 2,012.90
Revenue 10,030.80 11,082.90 13,224.60 13,136.70 14,182.00 19,110.90 29,627.90
Net Profit Margin (A) 4.75% 6.24% 5.45% 8.11% 9.37% 8.00% 6.79%
Revenue 10,030.80 11,082.90 13,224.60 13,136.70 14,182.00 19,110.90 29,627.90
Average Total Asset 8,913.30 9,246.70 10,211.10 10,361.30 9,522.10 10,090.10 12,759.80
Asset Turnover Ratio (B) 1.1x 1.2x 1.3x 1.3x 1.5x 1.9x 2.3x
Return on Asset (A*B) 5.35% 7.48% 7.06% 10.28% 13.96% 15.15% 15.78%