Agriculture-solutions provider Coromandel International Ltd’s stock has risen 30% over the past year as investors warm to its push to structurally lift Ebitda margins and smoothen earnings.
A ₹4,000–5,000 crore capex commitment over FY25–28 is central to this shift. The strategy hinges on expanded scale, backward integration and a steadily rising contribution from the non-fertilizer portfolio.
Scaling up fertilizers
At the heart of the plan is scale.
Coromandel is investing heavily across its fertilizer and crop protection platforms. In fertilizers, it is expanding phosphatic granulation capacity to 5 million tonnes (mt) from 3.6 mt over the next three to five years, adding Single Super Phosphate (SSP) and Monoammonium Phosphate (MAP) capacity, and rolling out combinations such as urea–SSP. With trading included, this could take potential fertilizer sales to nearly 10 mt.
But volumes alone won’t drive the turnaround. The real lever is cost control in raw materials. Nearly two-thirds of raw material sourcing is planned to come from captive backward integration and management expects fertilizer Ebitda/tonne to climb from roughly ₹4,500 today to about ₹6,500 post-integration from FY27. Sulphuric acid, phosphoric acid and granulation capacities are to scale up. That margin uplift is what underpins expectations of a valuation reset.
Crop protection momentum
Crop protection is the second leg of the story, and seems to be a more powerful one. It plans to double revenue over five years, backed by new molecule launches, faster in-licensing, the integration of NACL Industries, retail expansion and exports.
New products already account for 28% of crop protection sales—an indicator that growth is being driven by a broader, higher-quality mix rather than dependence on a single molecule or market.
The company’s ambition is to build ₹1-billion-plus brands anchored in captive active ingredients and create a business that provides earnings resilience when fertilizer cycles soften.
Nuvama Research expects about 15% revenue CAGR over the next five years, driven by crop protection momentum, backward integration and a more diversified portfolio. Profitability, too, should improve as these initiatives mature.
However, the near term isn’t friction-free. The second half of FY26 has begun with some volume softness, and margins are under pressure as higher sulphur and phosphoric acid costs have not been fully offset by NBS subsidy revisions.
On the bright side, a favourable rabi outlook, above-normal reservoir levels, and easing inventory overhangs in crop protection are expected to support performance in the near-term. Meanwhile, the stock trades at 24x FY27 price-earnings, showed Bloomberg. If execution holds well, it can drive meaningful re-rating as this capex-led plan begins to provide earnings durability.
