Sharekhan's research report on Coromandel International
The tighter global fertiliser market will result in higher prices of imported fertilisers, while higher government subsidies could boost demand for fertilisers and improve company’s financial performance in short term. Focus on CDMO and specialty chemical is the right step and could drive meaningful growth in the medium to long term apart from strong contribution from core fertiliser/CPC business. The introduction of innovative products like Nano DAP not only provides incremental revenue along with margin improvement as management expects Nano DAP to generate ~20% OPM. Future technology like drones for the agrochemical space will provide a new platform to expand into the adjacent market and offer new services. The company also has a strong order pipeline which provides decent revenue visibility.
Outlook
We maintain Buy with a revised PT of Rs. 1,430, given a healthy earnings growth outlook and reasonable valuation of 13.7x its FY2026E EPS.
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