“Coromandel posted a steady performance in Q1 registering a volume growth in fertilizer and sustaining its profitability, despite the challenging business environment of delayed monsoon onset impacting crop growth sowing and agri inputs application. Nutrient and Allied business performance was led by a robust 18% sales volume growth in phosphatic fertilizers. The Crop Protection segment performance during the quarter was affected by industry headwinds and sub normal rainfall in its key markets.”
– Mr. Jayashree Satagopan, President & CFO, Coromandel International on Q1FY24 Results
| Stock Data | |
| Ticker | COROMANDEL |
| Exchange | NSE |
| Industry | FERTILIZER |
| Price Performance | |
| Last 5 Days | -0.82% |
| YTD | +18.67% |
| Last 12 Months | +0.60% |
*As of 23.08.2023
Company Description:
Coromandel International Ltd, an Indian company, primarily operates in the agricultural sector, specializing in fertilizers and crop protection products. The company’s business model revolves around various aspects of agriculture and related industries. Here are key components of its business model:
- Fertilizers: Coromandel International is a significant player in the production and distribution of fertilizers. They manufacture a wide range of fertilizers, including phosphatic fertilizers, organic fertilizers, and specialty nutrients. Their business model involves producing these fertilizers and distributing them to farmers through a network of dealers and retailers.
- Crop Protection Products: The company also manufactures and markets crop protection products such as pesticides, insecticides, and herbicides. These products are designed to protect crops from pests and diseases. Coromandel’s business model includes developing and selling these products to farmers.
- Retail and Distribution: Coromandel has an extensive network of dealers, retailers, and distributors across India. They collaborate with these partners to reach farmers in various regions. This distribution network is a crucial part of their business model, ensuring their products are readily available to farmers.
Financial Results:
Coromandel International Ltd reported Revenues for Q1FY24 of ₹5,693.00 Crores down from ₹5,729.00 Crore year on year, a fall of 0.63%.
Total Expenses for Q1FY24 of ₹5,077.00 Crores down from ₹5,116.00 Crores year on year, a fall of 0.76%.
Consolidated Net Profit of ₹494.00 Crores down 1.0% from ₹499.00 Crores in the same quarter of the previous year.
The Earnings per Share is ₹16.80, down 1.12% from ₹16.99 in the same quarter of the previous year.
Key Strengths:
- Market Leadership: Coromandel International was one of the leading companies in India’s agricultural inputs sector, with a significant market share in fertilizers and crop protection products. This leadership position allowed them to influence market dynamics and maintain a strong brand presence.
- Diverse Product Portfolio: The company had a wide range of agricultural products, including various types of fertilizers, crop protection products, and customized nutrient management solutions. A diverse product portfolio helped them cater to a broad spectrum of farmer needs.
- Distribution Network: Coromandel had an extensive distribution network with dealers and retailers spread across India. This network enabled them to reach farmers in even remote rural areas effectively.
- Research and Development: The company invested in research and development to develop innovative and sustainable agricultural solutions. This focus on R&D allowed them to introduce new products that align with changing farmer and regulatory requirements.
- Customized Services: Coromandel offered personalized nutrient management solutions and advisory services to farmers, enhancing customer loyalty and promoting product adoption.
- Sustainability Initiatives: As the agriculture industry increasingly emphasized sustainability, Coromandel had initiated eco-friendly and sustainable agricultural practices and products. These initiatives aligned with global environmental goals and changing consumer preferences.
Key Weaknesses:
- Dependence on the Agriculture Sector: Coromandel’s business is closely tied to the agriculture sector. As such, it can be vulnerable to fluctuations in agricultural commodity prices, weather patterns, and overall economic conditions in the farming industry.
- Input Price Volatility: The prices of raw materials for fertilizer production can be subject to volatility, impacting the company’s cost structure and profit margins.
- Competitive Landscape: The agricultural inputs sector in India is highly competitive, with several domestic and international players. Coromandel faces competition from other well-established companies, which could put pressure on pricing and market share.
- Weather-Dependent Demand: The demand for agricultural inputs, particularly fertilizers and crop protection products, can be heavily influenced by weather conditions. Variations in rainfall and climate can lead to fluctuations in demand.
- Supply Chain Risks: Disruptions in the supply chain, whether due to transportation issues, labor strikes, or other factors, can affect the availability of products and timely delivery to customers.