Coromandel is betting on gains from backward integration

Despite a dull first half (H1 FY25), shareholders of Coromandel International are brimming with optimism. The fertilizer firm's stock hit a new 52-week high of ₹1,882 on Wednesday, taking its gains so far this year to 46%.

- Manish Joshi

In his first interaction with analysts this week, managing director and CEO S Sankarasubramanian highlighted the increased thrust on cost savings from backward integration. The company expects it to result in an increase of about 40% in Ebitda per tonne for manufactured fertilizers to around ₹7,000 by FY28 from the guidance of ₹4,500-5,000 per tonne for FY25. In H1, it stood at ₹4,800.

The bulk of the gains are likely to come from captive manufacturing. The company is ramping up sulphuric acid and phosphoric acid capacities to 2,000 tonnes per day (tpd) and 650 tpd, respectively, at its plants in Kakinada, which will be operational in FY25 and FY26.