Coromandel International Ltd Q4 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: S Ramesh - Nirmal Bang Institutional Equities Private Limited - Analyst : Hello, let me, on behalf of Nirmal Bang and myself, first thank Jayashree for being very receptive to the investor questions and increase the level of disclosures in the company. And let me also take this opportunity to welcome Deepak Natarajan. Welcome, Deepak. Pleasure to have you on the call and look forward to continuing our association. So let me now hand over the call back to the company and moderator, you can announce the Q&A.

Question: Prashant Biyani - Elara Capital - Analyst : Congrats on good set of numbers. On the NACL, how do we plan to turn around NACL? And by when can we see NACL aligning with our Crop Protection division margins?

Question: Prashant Biyani - Elara Capital - Analyst : Sure. Sir, we also had a plan of investing INR 1,000 crores in Crop Protection spec chem CDMO. Now post this acquisition. Do we see that INR 1,000 crore CapEx being trimmed? And if yes, by how much? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call

Question: Prashant Biyani - Elara Capital - Analyst : Right. And sir, regarding our agreement with Ma'aden, annually, how much fertilizers do we plan to import with them and in total as?

Question: Prashant Biyani - Elara Capital - Analyst : This INR3 lakh is per annum?

Question: Prashant Biyani - Elara Capital - Analyst : Okay. And sir, before I join the queue, last question, how is our CapEx plan going on? And how much do we plan to invest this year on various projects?

Question: Rahul Jain - Clearwater Partners. - Analyst : Congratulations on a good set of numbers. I just had a follow-up on NACL. So as already told by you that the approvals will come in Q2 and only after that you will decide. But then if I take a 10,000 feet view, say, three years from now, where do you actually see NACL? So before acquisition, you must have set some targets. So what -- where do you see NACL, say, three years from now?

Question: Rahul Jain - Clearwater Partners. - Analyst : At full capacity, sir, what could be the potential top line that this company could generate based on current pricing scenario?

Question: Rahul Jain - Clearwater Partners. - Analyst : Okay. I had one more follow-up on this acquisition itself. So Coromandel today has some INR 2,500 crores to INR 2,600 crores of Crop Protection business. NACL as it is does some INR 1,450-odd crores. And the ballpark calculation, if I do then at full potential, they could do some INR 2,500-odd crores of top line. Is there any plan of creating a separate entity where the Crop Protection division of Coromandel and NACL merge and that becomes your Crop Protection entity and the Coromandel becomes a pure-play fertilizer entity. Any thoughts on this?

Question: Ankur Periwal - Axis Capital Limited - Analyst : So first question on the Crop Protection side. So one, if you can highlight what has been the volumetric growth for the full financial year? And just a follow-up on that, what could be the growth outlook here given the price deflation trend that we have seen historically and hopefully settled now and your outlook on the margin side?

Question: Ankur Periwal - Axis Capital Limited - Analyst : Sure, sir. Okay. Fair enough. And just secondly, on the fertilizer side, given the new capacity coming in probably by FY '27, what is the time line that we are looking at for a full ramp-up over here given the capacity expansion as well as the backward integration? And again, your earlier guidance of 40-odd percent jump in EBITDA margin on the fertilizer side. What timeline can we think of over there?

Question: Ankur Periwal - Axis Capital Limited - Analyst : Congratulations, Mr. Deepak for joining in, and thanks, Jayashree ma'am for your support over the years.

Question: Naushad Chaudhary - Aditya Birla Sun Life Mutual Fund - Analyst : Congrats on a good set of numbers. First one on the Nano DAP, sir, I just wanted to check how is the traction there? Are we experiencing repeat buying here? And if things goes as we have expected from this product, can this travel to the world, can this product travel? And if we succeed, how -- what do you think how big can this product be for us in next three, four years?

Question: Naushad Chaudhary - Aditya Birla Sun Life Mutual Fund - Analyst : Interesting. Second, on the retail side of business, we have indicated we have added 100 more stores and we have indicated to almost, I think, double it in the next two, three years. If you can help us understand in terms of overall economics, how much CapEx and working capital required per store? What is the current financial status of all 900 put together and how it should look like in the next two, three years?

Question: Viraj Kacharia - Securities Investment Management Pvt Ltd - Analyst : Just a couple of questions. First on the NACL part. Just wanted to get your thoughts on what attracted you towards the company other than the fact that it's underutilized in terms of capacity utilization. But broadly in terms of the portfolio mix of the business per se, what is that attracted you the most? And just an extension of that is, if I were to look at our experience in terms of Sabero acquisition and our own journey in terms of Crop Protection over the last eight, ten years, what are the similarities or differences in terms of business or the acquisition you see between NACL and the other two?

Question: Viraj Kacharia - Securities Investment Management Pvt Ltd - Analyst : I hope -- Yes. That's very helpful. Just two questions. One is on the NACL. If you look at the 10-year history, the operating margins has been around 8% to 9%. And this is despite a very sizable domestic B2C business. So if I look at other generic players with AI, even they earn upwards of low-teen margins. So just trying to understand where is the drag in terms of the margin profile in that business? And second question is for, say, specialty nutrients and the retail part for Coromandel. We have been kind of leaders in specialty nutrients... REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call

Question: Viraj Kacharia - Securities Investment Management Pvt Ltd - Analyst : Sure. Is it better?

Question: Viraj Kacharia - Securities Investment Management Pvt Ltd - Analyst : Am I audible?

Question: Viraj Kacharia - Securities Investment Management Pvt Ltd - Analyst : Yes. Second part of the question is more on the scalability and profitability, especially for the retail business and specialty nutrition. If you can just give some color and the part to the aspiration, we would have in those two segments?

Question: Naushad Chaudhary - Aditya Birla Sun Life Mutual Fund - Analyst : Two clarifications, sir. First, on the jump in the sulphuric acid prices. Do you think the real impact has not yet come because recently, also it has jumped substantially. The subsequent quarter should see a major benefit of that? Or what your sense on this thing, sir?

Question: Naushad Chaudhary - Aditya Birla Sun Life Mutual Fund - Analyst : Okay. And on the manufactured volume growth, this year, I think we have optimally utilized the capacity which we have. For next year, do we think we will have capacity constraint on the manufacturing side of volume growth for FY '26, though '27, we are coming up with Kakinada? But '26, do you think the trading portion would be higher because of the capacity constraint?

Question: Vignesh Iyer - Sequent Investments - Analyst : Sir, there are a few unit prices I wanted to know for the quarter 4. Firstly, on the sulphuric acid prices, if you could share...

Question: Vignesh Iyer - Sequent Investments - Analyst : So what I was asking is, basically, I wanted to know prices of few chemicals. That is what is the price that was there for phosphoric acid in quarter 4, firstly? Secondly, I wanted to know how has the price for sulphur panned out from quarter 3 to quarter 4 versus sulphuric acid from quarter 3 to quarter 4? If you could give us the data per tonne?

Question: Vignesh Iyer - Sequent Investments - Analyst : Okay. So I mean, would -- how do we see it -- I mean, our internal estimate on would -- is there a lag between the sulphur and sulphuric acid price and we might see some more increase that is possible on sulphuric acid side of it. I mean, going ahead with the season having more requirement towards fertilizers, et cetera?

Question: Somaiah Valliyappan - Spark Institutional Equities Private Limited - Analyst : Sir, the first question is on fertilizer margin in Q4. You did mention there is a slight compression there. Is it entirely attributed to sulphur? Or is there anything that changed on a quarter-on-quarter basis? For instance, was there any inventory impact that had a bit of an impact on margins?

Question: Somaiah Valliyappan - Spark Institutional Equities Private Limited - Analyst : Got it, sir. Sir, also earlier, we used to give our manufactured EBITDA per tonne guidance, we used to have this INR 5,000 per tonne. So does that still hold good in current context where we are in terms of subsidy allocation for tariff and where raw material prices are?

Question: Somaiah Valliyappan - Spark Institutional Equities Private Limited - Analyst : Got it, sir. Sir, also on Crop Protection, quite a strong growth this time. So we used to be roughly around 50%, 50% in terms of exports and domestic is the mix currently similar? Or has it changed? That's one. And second, if you could just help us in terms of -- I think earlier you did mention in terms of what are the factors that drove as a subsegment within Crop Protection, if you could just give some more color on it.

Question: Somaiah Valliyappan - Spark Institutional Equities Private Limited - Analyst : Sir, exports, what would have been the growth and domestic B2C, what would have been the growth? And Mancozeb, are we seeing any price realization improvements? Raghuram Devarakonda - Coromandel International Ltd - Executive Director - Crop Protection, Bio Products and Retail Business, Whole-time Director Yes. We have seen a marginal improvement in -- because see, the other fungicides are not picking up in terms of their costs or prices you see. So Mancozeb cannot indefinitely increase in price because then there will be a shift between the molecules. So while we have seen an uptick, it's not like something extraordinary. The volume growth has been pretty good year-on-year as far as Mancozeb is concerned in the exports market. So specific statistics, I think somebody had already asked about volume growth. Maybe I'll address your question and the other question together. So the volume growth for exports has been close to 9%. And in terms of B2C, it's in excess of 24%. So volume growth. So that's -- I hope it answers your question.

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Sir, I just missed the last participant's question in terms of the EBITDA per tonne guidance. So we are sticking to that INR 4,500 to INR 5,000 sort of number for FY '26, right?

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Got it. And sir, secondly, if you can help me with this unique share to the overall manufactured volumes for Q4 as well as for FY '25?

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Sorry, 25%?

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : 55% for Q4?

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Sorry sir, I didn't get. 55% for full year FY '25, you mean to say?

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : So that seems to be like too high basically. So what I understand is that FY '24, we were like somewhere around 36%, 38% sort of like number. And this has increased to 55%, you mean to say? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call

Question: Himanshu Binani - Anand Rathi Shares and Stock Brokers Ltd - Analyst : Got it. And sir, one last question basically on the Retail side of the business. Can you help us understand the metrics in terms of the revenue cost for like setting per store and the absolute breakeven number at what revenues we breakeven? Anything -- any color on that would be helpful.

Question: Ranjit Cirumalla - IIFL Capital Services - Analyst : A couple of questions from my side. Firstly, if you can elaborate on the new hirings that we have done in what seems to be a new role altogether, Vice President, Nano Fertilizers and Vice President, Strategic Initiatives. What would be the KRAs for these two appointees?

Question: Ranjit Cirumalla - IIFL Capital Services - Analyst : I hope this should be good. I just wanted a bit more insights on the two new hirings that we have made. One is the VP Nano Fertilizers and the VP Strategic Initiatives. What would be the KRAs for these two new hirings?

Question: Ranjit Cirumalla - IIFL Capital Services - Analyst : Sure. That's helpful. Second question, coming back to the fertilizer guidance back in December 2024, we had guided for a 40% jump in EBITDA per metric ton for our fertilizer business in two to three years' time frame. That still stays intact, right?

Question: Vipulkumar Shah - Sumangal Investment - Analyst : So my question relates to subsidy and non-subsidy profit. So where do you see non-subsidy profit reaching percentage wise three-years down the line, sir?

Question: Rohit Nagraj - B & K SECURITIES LIMITED - Analyst : Congrats on a good set of numbers. First question in terms of the R&D capabilities for both Coromandel and NACL. So how these are -- whether there is any complementary set on this? And in terms of incremental product development of funnel, are we going to optimize the efforts given that now we are a same company and there could be some overlaps, which might be there? So just brief about that would be helpful. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call

Question: Rohit Nagraj - B & K SECURITIES LIMITED - Analyst : And in terms of the number of personnel on -- in both the companies, how are they in terms of R&D, et cetera? Any color on that?

Question: Rohit Nagraj - B & K SECURITIES LIMITED - Analyst : Yes, yes, that's right.

Question: Rohit Nagraj - B & K SECURITIES LIMITED - Analyst : Right. Sir, second question is, I missed the earlier -- I mean, the initial remarks. So are there any targets in terms of synergy benefits that we have given out for the next, say, two, three years? The way you explained from R&D perspective, we will be getting certain synergies. Any financial targets that we are looking at?

Question: Sheel Shah - Sameeksha Capital CFA Institute - Analyst : Am I audible? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call

Question: Sheel Shah - Sameeksha Capital CFA Institute - Analyst : So if you can share manufacturing EBITDA per tonne for FY '24 and FY '25. That's the first. Second, [FSB] EBITDA per tonne for FY '24 and FY '25 and our trading margins EBITDA.

Question: S Ramesh - Nirmal Bang Institutional Equities Private Limited - Analyst : So before we close the call, I would like to have your thoughts on the very high debt in NACL and the high interest cost. So what is the time line you expect to reduce the debt burden and interest cost in NACL? And if you look at the overall CPC business, you said there is some pricing pressure in the domestic markets. So assuming that the inventory-related pressure in the domestic markets out of the way, when do you see the pricing power coming back in domestic formulations?

Question: S Ramesh - Nirmal Bang Institutional Equities Private Limited - Analyst : Okay. With that, let me thank all the investors and analysts for joining the call and my sincere thanks and gratitude for the Management for giving a good insight on the business and answering all the questions. Let me hand over the call back to Sankar for his closing remarks. Thank you very much, sir. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 02, 2025 / 9:00AM, CORF.NS - Q4 2025 Coromandel International Ltd Earnings Call