Coromandel International - Near-Term Challenges On Higher Raw Material: Motilal Oswal
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Motilal Oswal Report
In this note we have analysed the volume performance for Coromandel International Ltd. in Q3 FY22, the trend in its key raw materials, Rabi sowing in its key markets and capacity expansion in sulfuric acid. The key insights are highlighted below:
As per the Ministry of Fertiliser, Coromandel International’s overall volumes in October-November 2021 declined by 20% YoY due to a 78% fall in trading volumes, whereas manufacturing volumes grew 12%.
Growth in manufacturing volumes is aided by a favorable base in FY21, whereas volumes declined by 7% YoY in Oct-Nov-2020 and 3% in Q3 FY21. Total phosphatic fertiliser volumes grew 6% YoY in Oct-Nov-21.
Coromandel International has announced setting up of a new 1,650 million tonne/day design capacity sulfuric acid plant at its fertiliser complex in Visakhapatnam at a cost of Rs 4 billion. This would result in annual cost savings of Rs 500-600 million. The plant will be operational by Q2 FY24.
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