Crop Protection and Backward Integration Drive

COROMANDEL

’s Re-Rating Potential

’s stock has risen 22% over the past year, supported by a capex-led plan to structurally lift EBITDA margins and diversify earnings. With ₹4,000–5,000 crore investments planned over FY25–28, the company is scaling fertilizer capacity, deepening backward integration, and doubling its crop protection business to build resilience beyond fertilizer cycles. - Capex-Led Fertilizer Expansion Coromandel is expanding phosphatic granulation capacity from 3.6 mt to 5 mt over 3–5 years, adding SSP and MAP capacity, and rolling out blended products like urea–SSP. Including trading, fertilizer sales could reach ~10 mt, reinforcing its leadership in the segment. Nearly two-thirds of raw material sourcing will come from captive integration. By FY27, fertilizer EBITDA/tonne is expected to rise from ~₹4,500 to ~₹6,500, driven by scaled sulphuric acid, phosphoric acid, and granulation facilities. This margin uplift underpins potential valuation re-rating. The company aims to double crop protection revenue in five years through new molecule launches, faster in-licensing, NACL Industries integration, retail expansion, and exports. New products already contribute 28% of sales, indicating a higher-quality mix. The goal is to build ₹1-billion-plus brands anchored in captive active ingredients. Nuvama Research projects ~15% revenue CAGR over five years, supported by crop protection and integration. However, H2FY26 has seen volume softness and margin pressure from higher sulphur and phosphoric acid costs, not fully offset by subsidy revisions. With a favourable rabi outlook, strong reservoir levels, and easing crop protection inventory, near-term performance should hold steady. The stock trades at 24x FY27 P/E, above historical averages. Successful execution of the capex-led plan could drive meaningful re-rating and sustained profitability.