Coromandel International Ltd Q1 FY27 Earnings Call: Guides 4 Million Tonne Volume Target, Crop Protection EBITDA Up 44%

Coromandel International Ltd held its Q1 FY27 earnings call on July 23, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Financials and Key Metrics

• Consolidated total income of Rs.8,215 crores in Q1 FY 2026-2027, up 15% YoY, driven by higher fertiliser realisation and non-subsidy business growth.
• EBITDA declined 3% YoY to Rs.761 crores in Q1 FY 2026-2027, as higher input costs from the West Asia crisis were not fully offset by the NBS rate revision; subsidy business contributed 48% of EBITDA.
• Net profit fell to Rs.382 crores in Q1 FY 2026-2027 from Rs.502 crores in Q1 FY 2025-2026, reflecting the margin compression.
• Subsidy received of Rs.1,392 crores during Q1 FY 2026-2027 (vs. Rs.1,300 crores in Q1 FY 2025-2026); outstanding subsidy as of 30 June 2026 stood at Rs.3,254 crores, with an additional Rs.568 crores received in July 2026.
• Foreign currency gains contributed not more than 5-6% of reported Q1 FY 2026-2027 EBITDA, per management’s netting principle on export exposure.
• Q1 FY 2025-2026 comparatives exclude NACL, which became a subsidiary effective 8 August 2025.

Production Cuts, Policy Gaps, and the QR-Code Shift

• Fertiliser sales volumes moderated 9% YoY to 1 million tonnes in Q1 FY 2026-2027; production was consciously cut to 6,90,000 tonnes (72% capacity utilisation) to optimise inventory amid volatile raw material and monsoon conditions.
• Government NBS subsidy rates increased by ~10% but management stated these do not compensate for raw material cost spikes post-Middle East crisis; management expects a positive review to improve NPK viability.
• Management cited “government subsidy rates for NPK have only seen a marginal 10% increase over the last 2-3 seasons” and is requesting the government to apply the policy-envisaged 6-month average rates to restore viability.
• Government delaying NPK incremental subsidy announcement due to pressure on the overall subsidy bill, driven by higher urea subsidy from rising gas prices and full compensation of DAP.
• Without a subsidy rate revision, management expects NPK production could remain impacted in Q2 FY 2026-2027 as well; industry NPK production and imports both declined in Q1 FY 2026-2027.
• Management reported the government’s pilot QR-code-based fertiliser sales programme in 10-12 states, linking Aadhaar, farm holdings, and crop type to restrict over-use of urea/DAP/NPK subsidies; full Pan-India implementation could rationalise demand for urea and DAP while potentially lifting NPK consumption.
• Government approved a national investment policy for urea targeting 9-10 million tonnes of additional domestic capacity over 8 years across 7 projects, plus a Rs.37,500 crore coal/lignite gasification scheme for syngas-based feedstocks.

Export-Driven Growth and Product Pipeline

• Crop protection revenue grew 20% YoY to Rs.870 crores in Q1 FY 2026-2027, with EBITDA up 44% to Rs.159 crores, driven by strong B2B exports of active ingredients where China has limited presence.
• Standalone crop protection business grew 20% in Q1 FY 2026-2027; the company was able to pass on input cost increases in export markets despite soft domestic and global demand, as farmers seek cheaper alternatives.
• Management has 3-4 products coming through every year with clear visibility for the next 3-4 years; the domestic formulation pipeline supports sustained new introductions.
• CDMO strategy focuses on chlorination-based chemicals for agrochemical use initially, with a launch plant planned in Taloja; management is also exploring intermediate production for global MNCs where no registration is required.
• NACL EBITDA margins improved from 3-4% at acquisition to an implied 7-8% in Q1 FY 2026-2027, which management believes is sustainable near-term; a structural alignment with Coromandel margins will require 2-3 years and new product introductions.
• NACL exports declined in Q1 FY 2026-2027 due to price moderation in molecules sold to global MNCs, whereas standalone exports showed strong revenue growth.

New Capacity Coming Online, Then a Cash-Generation Phase

• New 7,50,000-ton capacity coming online in Q4 FY 2026-2027 (Kakinada granulation project), with 50% of volume planned for own retail outlets across Maharashtra, Tamil Nadu, Andhra, and Telangana, and the balance targeting seed markets in Uttar Pradesh, Rajasthan, Madhya Pradesh, and Chhattisgarh.
• Post-commissioning, management targets 4 million tonnes of fertilisers and 1 million tonne of trading, providing ~5 million tonnes of capacity visibility for FY 2026-2027 and FY 2027-2028; combined with SSP, organic, urea, and imported DAP, total nutrient volumes of 8-9 million tonnes are expected.
• Normal sustainable capex of Rs.300 crores per annum guided for FY 2026-2027 and FY 2027-2028, following ~Rs.7,000 crores invested over the past 3-4 years (FY 2023-FY 2026); management now prioritises realising returns before committing to major new capex.
• MAP (monoammonium phosphate) plant expected by Q1 FY 2027-2028 in Vizag for specialty nutrients; purified phosphoric acid for battery chemicals is under evaluation subject to commercial viability.
• Senegal rock phosphate plant operating near target volume of 5 lakh tons; management is evaluating a $5-6 million investment to create 1,00,000-1,50,000 tons of SSP capacity there to capture value from reject rocks for domestic and export markets.
• No immediate capacity additions in fertilisers planned beyond these projects; management is engaging with the government for additional land for future expansion.

Cost Pressure Persists Despite Softer Global Raw Materials

• Phosphoric acid for Q2 FY 2026-2027 settled at $1,700/tonne vs. $1,360/tonne in Q1 FY 2026-2027, reflecting sustained global cost pressure from the Middle East crisis.
• Sulfur prices remain high contrary to initial expectations, driven by Middle East tensions and demand from EV battery nickel leaching in Indonesia; management views current levels as unsustainable and has decided to stay out of the market at these price points.
• Management targets increasing average EBITDA per metric tonne from Rs.5,000 to Rs.6,500 as new capacities ramp up over the next 2-3 years; the backward-integration NPK plant at steady state should realise EBITDA of Rs.6,500 per metric tonne.
• FY 2025-2026 EBITDA was Rs.3,100 crores (actual); specialty nutrients business is growing top line at 20-30% with a 20% EBITDA margin, with total capacity expanded to 88,000 tonnes after doubling bentonite sulphur capacity.
• SSP business contribution per metric tonne guided at Rs.2,500-Rs.3,000 on a steady-state basis; currently 50% of volumes are specialty products.
• Depreciation spiked in Q1 FY 2026-2027 primarily due to amortisation of mining overburden (Rs.30 crores) and intangible assets (Rs.20-21 crores) from consolidation, with incremental fixed-asset depreciation from new capex at only Rs.16-18 crores.

Outlook, Nano DAP, Drones, and Innovation

• Management expects a positive subsidy review by Rabi FY 2026-2027 to improve NPK viability; the industry has taken the maximum price change possible, and further correction requires government action.
• Nano DAP maintained ~60% market share in Q1 FY 2026-2027; exports were initiated in Q1 FY 2026-2027 and will be a focus as international registrations are obtained, though adoption is constrained by bans in Uttar Pradesh and Maharashtra.
• Daksha is focused on agri drones; Coromandel purchased 100-150 drones in Q1 FY 2026-2027 and aims to expand the fleet to 500 drones during FY 2026-2027; defence orders are in the final stage, but management deemed it too early to provide specific financial numbers.
• A corporate research centre is being set up at the IIT Madras Research Park to develop next-generation nano, biological, and advanced chemistry platforms.
• Industry DAP and NPK stocks are adequate for the current kharif season, but sustained production and imports over the next two months are critical for rabi-season inventory; management expects no fertiliser shortage.
• Global raw material prices have softened — urea (which had risen to $900/ton) has declined, and ammonia and sulfur are softening; the industry has been cautious in inventory build-up to avoid high-cost carryover.