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Motilal Oswal Report
Coromandel International Ltd.'s operating performance beat our estimate, largely led by strong volume growth of 21% YoY in total manufactured phosphatic fertiliser (di-ammonium phosphate and nitrogen-phosphorous-potassium) to 0.91 metric million tonne (our estimate: 0.83 mmt) and better Ebitda/million tonne.
The company reported a revenue of Rs 83.1 billion (our estimate: Rs 68 billion) in Q3 FY23, up 64% YoY, led by strong sales volume in NPKs and higher subsidy realisation in the nutrients business. The nutrient and other allied business segment grew 72% YoY to Rs 77.1 billion. The crop protection segment grew 5% YoY to Rs 6.5 billion, led by slowdown in export challenges in Mancozeb
Coromandel's better margins were on account of backward integration, better outsourcing of raw materials, and favorable agricultural environment in most of its key operating markets.
Factoring in strong Q3 FY23 operating performance, we raise our Ebitda estimates for FY23/FY24/FY25 by 6%/5%/7%, respectively, on improving Ebitda/mt of fertiliser business.
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