Coromandel International Q4 FY26: Strong growth, but profit hit by one-offs and a volatile fertilizer cycle

Coromandel International closed Q4 FY26 with strong topline momentum, even as reported profit sharply declined due to exceptional items. Consolidated revenue from operations rose 20% year on year to INR 6,004 crore, while EBITDA excluding exceptional items and JV or associate profit increased 16% to INR 494 crore. The quarter’s profit after tax fell to INR 115 crore versus INR 578 crore last year, largely because Q4 FY25 benefited from an exceptional income of INR 347 crore from a land sale, while Q4 FY26 included an exceptional loss of INR 71 crore, including impairment related to the drones investment.

The full year picture is more constructive. FY26 revenue from operations grew 31% to INR 31,480 crore, and EBITDA rose 23% to INR 3,232 crore. PAT for the year declined 8% to INR 1,898 crore, reflecting a tougher fertilizer margin environment and the impact of exceptional items, even as operating performance improved. Book value per share increased to INR 426, up 13% year on year, and the presentation reported net debt to equity at 0.0 times.

Financial performance in one view

The quarter showed a clear divergence between operating growth and reported profitability. EBITDA margin in Q4 FY26 was 8% versus 9% in Q4 FY25, while PAT margin declined to 2% from 12%. On the full year basis, EBITDA margin moderated to 10% from 11%, and PAT margin declined to 6% from 9%.

Nutrients: growth in sales, pressure on profitability

In the nutrients segment, Q4 FY26 sales rose 15% to INR 4,953 crore from INR 4,321 crore. However, PBIT declined 18% to INR 244 crore, indicating margin compression in a quarter that also included the annual maintenance turnaround.

The volume mix also shifted. Primary sales volumes for manufactured NPK and DAP declined 12.8% in Q4, while imported NPK and DAP increased 26.1%. Urea and MOP volumes rose sharply, with urea up 42.8% and MOP up 84.6%, although these are not the main manufactured phosphatic products.

For the full year, nutrients sales grew 28% to INR 27,727 crore and PBIT grew 12% to INR 2,464 crore. Total NPK and DAP volumes increased 7.3% to 42.77 lakh MT, driven by a 54.8% jump in imported volumes, while manufactured volumes were largely flat.

Management placed the operating environment in the context of a challenging fertilizer cycle. They highlighted that the government’s NBS rates for Kharif 2026 increased nutrient rates by 10% for N, P and S, but said this did not reflect the sharp increase in raw material prices and rupee depreciation after the West Asia crisis. They stressed that ammonia and sulphur prices rose sharply, and that the disruption of shipments through the Strait of Hormuz has created uncertainty, making both availability and pricing difficult to predict.

Backward integration and raw material security become the strategic anchor

Against this backdrop, Coromandel’s recent capex and sourcing strategy is central to the investment case.

Management stated that in March the company commissioned a 2,000 TPD sulphuric acid plant and a 650 TPD phosphoric acid plant at Kakinada. The phosphoric acid plant is described as capable of producing about 200,000 tons annually, and management said it is currently in trial runs. They added that operations are expected to stabilize and reach desired capacity from April-May onwards. They also mentioned synchronization of rock receipt from Senegal for use in the new plant.

The company is also pursuing expansion of granulation capacity, with management expecting commissioning by December of the financial year.

On upstream raw materials, the Senegal rock phosphate project was described as stabilized, with output of more than 3.5 lakh tons last year and a plan to increase volumes by 30% to 40% in the current year. Management also said Coromandel increased its stake to 71.5% in the Senegalese mining entity. In the Q&A, management indicated that BMCC has turned profitable and that mining costs are being amortized as part of accounting treatment.

The company also discussed diversification of sourcing through long-term contracts and spot buys from geographies beyond Saudi Arabia and Qatar, including Southeast Asia, African countries and Canada, with purchases at times from Russia and China. Visibility on raw materials was indicated up to June, while July onwards depends heavily on shipping and the broader situation in West Asia.

Crop protection: a stronger earnings pillar, with NACL integration underway

While fertilizers face subsidy and raw material uncertainty, crop protection has emerged as a more stable growth driver. The presentation shows CPC standalone FY26 revenue grew 16% to INR 3,054 crore and PBIT grew 55% to INR 569 crore, lifting PBIT margin to 19% from 14%. For Q4, CPC standalone revenue was up 2% to INR 715 crore and PBIT was up 35% to INR 138 crore.

Management attributed the improvement to stronger domestic demand in the first half, export volume recovery as global channel inventories normalized, new product introductions and cost discipline. They also said they are comfortable on crop protection raw material supply and expect to pass through input cost increases, with currency depreciation supporting export profitability.

They shared a breakup of the standalone crop protection business for the full year: exports of INR 1,450 crore, domestic B2B of INR 700 crore and formulations of INR 900 crore. They also said 10 new products launched during the year contributed 21% of total revenue.

The NACL acquisition is another lever. NACL became a subsidiary from 8 August 2025. The presentation shows CPC consolidated revenue, including NACL, increased 50% to INR 3,968 crore in FY26. Management stated NACL revenue rose 28% to INR 1,585 crore and EBITDA improved to INR 103 crore versus losses last year. They also referred to a rights issue of INR 250 crore to reduce high-cost debt and said they are exploring synergies across product development, manufacturing and sourcing.

On profitability trajectory, management said NACL margins have improved to 6% to 7% and could stabilize around 9% to 10% with portfolio changes, new products, and registrations, though this would take time.

Key investor takeaways

Coromandel’s FY26 performance shows strong operating momentum and a rapidly scaling non-subsidy earnings pillar, but it also highlights the core risk in fertilizers: sharp raw material inflation and dependence on policy response.

The company is responding by deepening backward integration, expanding granulation capacity, ramping captive rock phosphate mining in Senegal, and diversifying sourcing away from concentrated West Asia supply routes. At the same time, crop protection is benefiting from a normalization in global inventories and higher capacity utilization, while NACL’s turnaround and synergy efforts add optionality.

The near-term swing factor remains fertilizer affordability support. Management repeatedly emphasized that they are engaging with the government for additional compensation mechanisms, including the possibility of pass-through structures beyond DAP. They did not provide a margin or EBITDA per ton outlook because of the fluid situation.

For investors, the quarter is best read as a split screen: solid operational execution, a volatile fertilizer margin cycle, and a steadily strengthening crop protection franchise that is becoming more material to consolidated profitability.