Coromandel's granulation project slips to Q4 with no explanation
A previously repeated timeline for the granulation expansion has been pushed back one quarter, while fertilizer EBITDA fell 3% and the company flagged subsidy and input-cost risks.
What's new
- Consolidated revenue up 15% to ₹8,215 cr, but PAT down 23.9% to ₹382 cr.
- Fertilizer sales volumes fell 9% to 10 lakh tons, though market share rose to 22%.
- Crop protection revenue grew 20% to ₹870 cr, EBITDA up 44% to ₹159 cr.
- Granulation project commissioning delayed to Q4 FY27 from earlier Q3/December guidance.
Themes from the call
Demand
Fertilizer sales fell 9% on monsoon delay and cautious farmer sentiment, but market share improved; crop protection exports drove record EBITDA.
Margins
Fertilizer EBITDA was ₹6,500/ton target is aspirational; current input costs (sulfur, ammonia) and inadequate NBS subsidy compress margins.
Capital allocation
Normal capex guided at ₹300 cr/year; granulation and crop protection expansions are key projects; BMCC mining adds raw material security.
Guidance watch
- Granulation project commissioning in Q4 FY27 (slipped from Q3/December).
- Crop protection key-molecule capacity commissioning by September 2026.
- Fertilizer EBITDA steady-state target of ₹6,500/ton in normal operations.
Risk flags
- Granulation timeline slippage without explanation may indicate execution or input challenges.
- NBS rates rose only 10% while ammonia and sulfur costs surged; industry viability depends on policy correction.
- High phosphoric acid price ($1,700/ton in Q2) and potential demand destruction from DAP-NPK price gap.
Key quotes
-
"We aim for our fertilizer EBITDA to move to Rs 6,500 per ton."
— Deepak Natarajan, CFO -
"Our granulation project is progressing well, and we are on track for commissioning in Q4 of this year."
— Management, July 2026 call
The brief
Coromandel's granulation project slipped to Q4 without explanation — a one-quarter pushback after two prior calls had fixed on Q3 or December. It is not a major delay, but the silence on why matters. The rest of the quarter was a story of offset: fertilizer EBITDA fell 3% and volumes dropped 9% as the monsoon disappointed and subsidy gaps widened, but crop protection delivered a record quarter, retail revenue surged 85%, and market share rose. The diversified structure worked as advertised. The forward challenge remains the NBS policy — management cited a 25-30% price hike in the industry and acknowledged demand-destruction risk if the gap is not corrected. The granulation delay, while minor, chips at the credibility of the project timeline narrative. For now, the non-fertilizer engines are buying time. The verdict: the buffer is real, but the margin bridge rests on policy and project execution, both of which are showing cracks.
Coromandel's diversification cushions the fertilizer blow, but the granulation delay and subsidy gap mean the margin recovery relies on execution and policy — both uncertain.