Coromandel International - Release Of Subsidies To Aid Cash Flow Generation: Motilal Oswal
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Motilal Oswal Report
In this note, we have analyzed volume growth for Coromandel International Ltd. and the fertilizer industry in FY21.
Moreover, we have looked at the market share trend, the release of subsidies, price hikes for Di-ammonium phosphate/ nitrogen-phosphorous-potassium, and volume performance in Q4 FY21.
Here are the key insights:
Coromandel’s overall fertilizer volumes grew 11% YoY in FY21 on the back of 35%/20%/16% volume growth in urea/ muriate of potash/ single superphosphate.
The company is likely to generate cash flow from operations of Rs 41.3 billion in FY21, aided by the release of subsidies by the government.
Thus, the company’s capex plan would be a key monitorable, in our view.
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