Coromandel International Q2 Result: Net profit rises 2%, revenue plunges 30%

Coromandel International Limited (BSE: 506395, NSE: COROMANDEL), India’s leading Agri solutions provider is in the business of Fertilisers, Crop Protection Chemicals, Bio products, Specialty Nutrients, Organic Fertilizer and Retail. The Company has reported the financial results for the quarter ended 30th September 2023.

Highlights – Standalone Results:

• Total Income in Q2 was at Rs. 7,031 Cr vs Rs. 10,140 Cr over previous year, registering a de-growth of 31%

• EBITDA for Q2 was Rs. 1,064 Cr vs. Rs. 1,055 Cr in Q2 of previous year, registering a growth of 1%

• PAT for Q2 was Rs. 762 Cr vs Rs. 738 Cr in Q2 of previous year, registering a growth of 3%.

• Total Income in H1 was at Rs. 12,771 Cr vs Rs. 15,916 Cr over previous year, registering a de-growth of 20%

• EBITDA in H1 was at Rs. 12,771 Cr vs Rs. 15,916 Cr over previous year, registering a de-growth of 20%

• PAT for H1 was Rs. 1,267 Cr vs Rs. 1,234 Cr in H1 of previous year, registering a growth of 3%

Review of Businesses

Nutrient and Allied Business

The Revenue for the quarter ended September 2023 was at Rs. 6,307 Cr as against Rs. 9,461 Cr for the quarter ended September 2022. Profit before interest and tax for the quarter was Rs. 998 Cr vs. Rs. 955 Cr for the quarter ended September 2022.

The Revenue for the first half was at Rs. 11,499 Cr compared with Rs. 14,572 Cr in the corresponding period of the previous year. Profit before interest and tax for the first half was Rs. 1,670 Cr vs. Rs. 1,558 Cr in the corresponding period of the previous year.

Crop Protection Business

The Revenue for the quarter ended September 2023 was at Rs. 722 Cr as against Rs. 702 Cr for the quarter ended September 2022. Profit before interest and tax for the quarter was Rs. 88 Cr vs. Rs. 103 Cr for the quarter ended September 2022.

The Revenue for the first half was at Rs. 1,278 Cr compared with Rs. 1,356 Cr in the corresponding period of the previous year. Profit before interest and tax for the first half was Rs. 143 Cr vs. Rs. 188 Cr in the corresponding period of the previous year.

Consolidated Results

Coromandel’s total income for the quarter ended September 2023 was at Rs. 7,033 Cr vs. Rs. 10,145 Cr for the quarter ended September 2022. The profit after tax for the quarter was at Rs. 755 Cr as against Rs. 741 Cr for the quarter ended September 2022.

Coromandel’s total income for the first half was at Rs. 12,771 Cr vs. Rs. 15,927 Cr in the corresponding period of the previous year. The profit after tax for the first half was at Rs. 1,249 Cr as against Rs. 1,240 Cr in the corresponding period of the previous year.

Commenting on the financial results, Mr. Arun Alagappan, Executive Vice Chairman, Coromandel International Ltd. said:

″Coromandel displayed a resilient performance in a challenging business environment, sustaining its profitability and improving its working capital position during the quarter. The company’s key operating markets were impacted by sub normal monsoons affecting the agri inputs offtake.

The Nutrient and Allied businesses focused on nutrient consumption during the quarter. It has introduced Nano DAP, a patented nanotechnology-based fertilizer and the initial customer feedback has been quite encouraging. The business commissioned its 1650 ton per day state-of-the-art Sulphuric acid plant at Visakhapatnam with an investment of Rs 400 Crore to improve its backward integration capabilities. In addition, it has setup a 6 mld desalination plant to meet its water requirements.

The Crop Protection business of the company had a healthy volume growth, improving its performance in Exports and domestic formulations segments; however, global industry headwinds viz. higher channel inventory and decline in commodity prices impacted price realization. The business is closely evaluating the opportunities in the specialty chemicals and CDMO space and has initiated regulatory and infrastructure activities at the new Dahej site.

Company’s recent investment in Dhaksha, a differentiated drone start-up, is progressing well. It has bagged order for its logistics drones from the Indian Army and is receiving good interest for its agricultural drones.

During the quarter, Company also acquired 16.53% equity in XMachines, an AI based robotics start-up focusing on a variety of agricultural operations such as Planting, Weed control & Pest Control.

With forecast of a normal North-East monsoon, we expect the demand cycle to be conducive in the upcoming months. Coromandel with its presence across the farming value chain will continue to drive the sustainable agricultural practices and improve farm prosperity.″