Buy Coromandel International; target of Rs 1155: Sharekhan

Sharekhan is bullish on Coromandel Interational has recommended buy rating on the stock with a target price of Rs 1155 in its research report dated February 06, 2023.

Broker Research

February 10, 2023 / 17:17 IST

26 Aug, 2025 12:21

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Sharekhan's research report on Coromandel International

Q3FY2023 PAT of Rs. 527 crore (up 38% y-o-y) was 22% above our estimate led by strong performance from nutrients and other allied business offsetting muted growth from the CPC business. OPM, at 9.4%, lagged our estimate due to lower gross margins and higher other expenses. Revenue/EBIT from nutrients and other allied businesses grew strongly by 72%/59% y-o-y to Rs. 7,710 crore/Rs. 697 crore led by higher subsidy support and better realisation. However, CPC revenue/EBIT growth of 5%/-13% y-o-y was muted as growth in domestic formulation and B2B businesses was offset by headwinds in export markets. The management guided for better fertilizer margins of Rs. 5,500-6,000/mt in the coming years led by declining raw material prices and increasing cost efficiencies. It had earlier guided for margins Rs. 5,500/mt for FY23. Phosphoric acid price declined to $1,050/mt in Q3FY23 versus $1,175/tonne in Q2FY23 and the same bodes well for fertiliser margins.

Outlook

We maintain Coromandel to Buy with an unchanged PT of Rs. 1,155 as margin/earnings outlook has improved as input price pressures ease and valuation of 11.7x/10.9x FY24E/FY25E EPS seems reasonable.

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