Coromandel Q2 profit dips 34% on high raw material costs

CHENNAI: Coromandel International on Friday reported a 34% drop in consolidated net profit to Rs 523.37 crore for the second quarter of FY27, as higher raw material costs linked to the Middle East crisis squeezed margins in its fertiliser business.

The company's net profit declined from Rs 793.44 crore a year earlier, as per a release.

Total income rose 7% to Rs 10,294.13 crore from Rs 9,651.13 crore. Expenses jumped 11% to Rs 9,642 crore from Rs 8,711.6 crore a year ago.

It reported 6% revenue growth during the quarter and 10% in H1; however, EBITDA declined, largely reflecting the margin pressure in the fertiliser business due to spurt in raw material costs triggered by ongoing Middle East crisis not adequately covered by subsidy.

Company’s long term strategic initiatives remain on track. The new NPK fertiliser capacity is progressing well and is expected to be completed by Q4 FY27. In crop protection, additional capacity for one of its key molecules is expected to come on stream during Q3.

The company also plans to set up a launch plant for fluoro intermediates to support phased R&D-to-commercial scale-up and strengthen its capabilities in speciality chemistry. The retail business continued expansion of its store footprint and opened close to 100 new stores during the quarter, taking the network to over 1,300 stores.
 S Sankarasubramanian, MD-CEO, Coromandel International, said: “Coromandel delivered a resilient performance in a challenging business environment experienced during Q2."

In fertilisers, deficit rainfall, elevated input prices and lower Nutrient Based Subsidy (NBS) rates for the Kharif season hurt product offtake and margins in the NP/NPK segment, the company said.

It supplied about 3.3 million tonnes of fertilisers in the first half, and its share of the phosphatic segment rose to 19% from 17% a year earlier.

The newly-commissioned phosphoric acid and sulphuric acid plant at Kakinada helped offset external supply disruptions, it said.