Nuvama Institutional Equities sees as much as 35.2% upside in Coromandel International, while maintaining its ‘Buy’ rating. The brokerage maintained its outlook on the back of the company’s expansion plan.
The brokerage house said that the company is preparing for scale. By that, Nuvama meant that Coromandel is targeting 10 million tons of fertiliser sales, doubling its crop protection franchise over five years, and deepening backward integration.
Nuvama on Coromandel International: Doubling crop protection business
The company plans to double its crop protection business (including NACL) to Rs 10,000 crore in five years. The company is accelerating in-licensing from Japanese innovators, with new products already contributing 28% to crop protection Sales. Retail expansion is underway with 2,000–2,500 outlets planned over three years.
Nuvama on Coromandel International: Scaling up fertiliser capacity
Coromandel plans to increase phosphatic granulation capacity to 5 million tons. Currently, phosphatic granulation capacity stands at 3.6 million tons. It also expects to add 1 million tons in SSP, expand MAP by 25,000 tons and introduce new products such as Urea-SSP—ultimately targeting 10 million tons of fertiliser sales, including trading volumes. The ambition is to source nearly two-thirds of raw materials through captive backward integration.
However, the company witnessed softness in early H2FY26 volumes, which will lead to sustained pressure on the profitability in the near term, contributed by the higher sulphur and phosphoric acid costs, which were not fully offset by the recent NBS subsidy adjustments.
Nuvama on Coromandel International: New foray
Apart from that, the management aims to create Rs 100 crore-plus mega-brands from captive active ingredients while the CDMO vertical is likely to gain scale over the next two–three years.
All in all, Nuvama estimates that Coromandel International shall deliver 15% revenue CAGR over the next five years, driven by momentum in crop protection, backward integration, and a more diversified mix. “Profitability should improve meaningfully as these initiatives mature,” said the brokerage house.