01 — At a Glance
The Murugappa Group’s Quiet Cash Engine Hits Turbulence. Then Buys More Assets.
- 52-Week High / Low₹2,720 / ₹1,700
- FY26 Revenue (TTM)₹30,464 Cr
- FY25 PAT (Full Year)₹2,055 Cr
- Full-Year EPS (FY25)₹70.14
- TTM EPS₹81.26
- Book Value₹413
- Price to Book4.90x
- Dividend Yield0.59%
- Debt / Equity0.12x
- Working Capital Cycle-7 days
The Auditor’s Roast: Coromandel finished FY25 with ₹24,085 crore revenue (+9.2% YoY), ₹2,055 crore PAT, a fortress balance sheet (net cash of ₹450 cr post-acquisition), and a CRISIL AAA rating — the kind of report card that gets framed. Yet the stock dropped 12.6% in three months. Meanwhile, they acquired 53% of NACL Industries (a crop-protection peer) for ₹820 crore mid-way through the fiscal, integrated it into the P&L, and still managed profitable results. This is not a “buy-and-hope” story. This is “buy-execute-ignore-the-market” territory.
02 — Introduction
The Fertilizer Story Your Portfolio Manager Will Never Pitchbooking About
Let’s be direct: Coromandel International is a fertilizer company. That’s it. That’s the whole pitch. No AI, no cloud, no SaaS, no venture bets that return 100x (actually, they did acquire drones via Dhaksha, but more on that later). The company sells phosphate-based complex fertilizers, single super phosphate, urea, crop protection chemicals, and bioproducts to Indian farmers and exports to 80+ countries. It owns rock phosphate mines in Senegal. It has backward-integrated acid plants in Visakhapatnam and is commissioning another in Kakinada. It owns ~1,000 retail outlets across India and ties into 14,000+ dealers. In the three months to December 2025, it made ₹488 crore profit on ₹8,779 crore of revenue, and the market yawned.
Revenue hit a record high. ROCE of 23.2% — highest among peers. Working capital is negative (that’s farming gold — you collect cash before you pay suppliers). But the P/E is 28.1x — nearly double the Nifty 50 — because the market has priced in permanent high growth (spoiler: fertilizer growth is mid-to-single digit) or permanent subsidy dysfunction (spoiler: the government always coughs up). The stock has returned +15.2% annually over one year and +30% over three years, but on an absolute basis, it’s a dividend compounding story dressed as a growth play.
Q3 FY26 was “very challenging,” per management’s own concall. Southwest monsoon withdrawal caused crop damage. Input costs spiked. INR depreciated ~7% YTD. And yet the company posted record quarterly fertilizer production (9.9 lakh tons), expanded mancozeb capacity (a key export molecule), and completed the largest acquisition in the crop-protection space. Most companies would issue a stress memo. Coromandel issued an interim dividend.
Concall Signal (Feb 2026): Management flagged “late withdrawal of Southwest monsoon” hitting crop damage in pockets. Yet Q3 was “record quarterly fertilizer production.” Translation: when demand is weak, you still maximize utilization. When input costs spike, you price and shift mix. This is operational discipline. Not exciting, but effective.
03 — Business Model: What Do They Actually Sell?
Rocks, Sulphur, Ammonia. Plants. Dealers. Farmers. Subsidy. Rinse. Repeat.
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