| Coromandel International Limited | ||||||
| Ratings reaffirmed at 'Crisil AAA / Stable / Crisil A1+ ' | ||||||
| Rating Action | ||||||
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| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed rationale Crisil Ratings has reaffirmed its ‘Crisil AAA/Stable/Crisil A1+’ ratings on the bank facilities of Coromandel International Ltd (Coromandel).
The ratings factor in the company’s robust market position in India’s phosphatic-fertiliser market and strong operating efficiency supporting a healthy business risk profile. Coromandel continues to be the largest single super phosphate player in the domestic market, with a share of ~15% in fiscal 2025; and the second-largest player in other complex phosphatic (diammonium phosphate-nitrogen, phosphorus and potassium [DAP+NPK]) fertilisers with a consumption-based share of ~18%.
Crisil Ratings notes the completion of the acquisition of 53% stake, worth ~Rs 820 crore, in NACL Industries Ltd (NACL; rated ‘Crisil AA/Stable/Crisil A1+’) on August 8, 2025. The purchase was funded via internal cash accrual and net liquidity post the acquisition stood at ~Rs 450 crore as on August 31, 2025. Given strong expected accrual and no significant debt-funded acquisitions, Coromandel’s financial risk profile is expected to remain strong.
This acquisition augments the crop protection business of Coromandel, strengthening its presence in the domestic formulations business, expanding existing product portfolio and helping in securing contract manufacturing relationships with NACL’s established customers. NACL’s operating profitability remained weak over fiscals 2024 and 2025 due to subdued realisation, with certain provisions on debtors. However, there has been a turnaround in operating performance in the recent quarters which is expected to sustain over the medium term. NACL’s operating performance will contribute to less than 10% of the combined entity’s revenue and profitability. Synergies from combined sourcing, consolidation of research and development centre, benefit from the management’s expertise and financial reputation shall improve NACL’s business and financial risk profiles in the medium term and will remain monitorable.
The reaffirmation factors in healthy operating performance of Coromandel, with revenue of Rs 24,085 crore and the earnings before interest, taxes, depreciation and amortisation (Ebitda) margin of 10.95% in fiscal 2025 compared with Rs 22,058 crore and 10.9%, respectively, in the last fiscal. Coromandel’s ability to prioritise NPK production, which is fungible with DAP, backward integration measures undertaken and favourable supply agreements, have supported profitability. The annual Ebitda per tonne is likely to remain healthy and sustain over Rs 5,000 over the medium term with the expectation of adequate Nutrient Based Subsidy (NBS) rates in line with raw material prices. Any significant revision in NBS rates and resultant impact on operating profitability will remain monitorable over the medium term.
Furthermore, the company is undertaking capital expenditure (capex) to increase the granulation capacity by 7.5 lakh tonne per annum, improve the backward integration capacity of both its key raw materials, phosphoric acid and sulphuric acid, at the Kakinada (Andhra Pradesh) plant, which was the company’s only non-integrated plant. These will be funded entirely via internal accrual. This project is expected to be completed by the end of fiscal 2027 and will aid operating performance over the medium term.
The government has also demonstrated its financial support to the fertiliser sector via additional subsidies recently. While the initial announced subsidy of Rs 1.67 lakh crore for fiscal 2026 may not fully suffice due to increase in raw material prices, additional disbursement is expected leading to no significant subsidy arrears. This, combined with healthy cash accrual and healthy liquidity, will enable the company to maintain its net debt-free position over the medium term. Since timely disbursement of the entitled subsidy is crucial for the company to maintain its robust financial risk profile, any change in policy support or sustained delays in payouts would remain monitorable.
The ratings continue to reflect the strong position of Coromandel in India’s phosphatic-fertiliser market, strong operating efficiency supported by backward-integration facilities and robust financial risk profile. These strengths are partially offset by exposure to risks related to the regulated nature of the fertiliser industry in India and volatility in raw material prices. |
Analytical approach Crisil Ratings has combined the business and financial risk profiles of Coromandel and its associate and subsidiary companies, considering the operational, managerial and financial linkages among them.
Please refer Annexure - List of Entities Consolidated, which captures the list of entities considered and their analytical treatment of consolidation. |
Key Rating Drivers - Strengths Strong position in India’s phosphatic-fertiliser market Coromandel is the second-largest player in the phosphatic-fertiliser industry in India with a consumption based market share of ~18% in DAP/NPK; and the largest share of ~15% in single super phosphate for fiscal 2025. Its market position is underpinned by an entrenched and leading position in Andhra Pradesh and Telangana — India’s largest complex-fertiliser market — and a wide product portfolio. The company has also been gradually increasing the sale of non-subsidy-based products, including crop protection, specialty nutrients (secondary and micro-nutrients [sulphur, zinc, calcium and boron], water-soluble fertilisers and compost), and bioproducts (non-fertiliser segments contributed ~11% to the overall revenue in fiscal 2025). It operates around 1,000 retail outlets and has tied up with over 14,000 dealers, through which it sells fertilisers, crop-protection chemicals, specialty nutrient products, seeds, sprayers, veterinary products, among others.
Strong operating efficiency Operations benefit from the economies of scale, better raw material procurement due to established relationships with suppliers, captive production of phosphoric acid, superior plant infrastructure and low handling and transportation costs. Captive phosphoric acid meets close to 50% of the company’s total requirement while captive sulfuric acid meets ~60%. There are further plans to improve the backward integration in the near term by ramping up sulphuric acid and phosphoric acid capacities in the Kakinada plant. Operating efficiency is also supported by the ability to adjust product mix (between DAP and other complex fertilisers).
The scale of operations of the crop protection business has also improved over the years, with revenue of ~Rs 2,637 crore for fiscal 2025 and Ebit (earnings before interest and taxes) margin of 13.8% compared with Rs 2,457 crore and 11.8%, respectively in the previous fiscal. This is expected to significantly improve with the acquisition of NACL.. Turnaround in operating profitability in NACL, with synergies arising post-acquisition, will remain monitorable. Focus on increasing the share of non-subsidy-based products will reduce the vulnerability of profit to changes in the government subsidy policies.
Robust financial risk profile Coromandel maintained a net cash position of over Rs 450 crore (net of acceptances/supplier’s credit/buyer’s credit) as on August 31, 2025. Annual capex of Rs 800–1,000 crore and incremental working capital requirement over the medium term will be met through strong yearly cash accrual of Rs 1,700–1,900 crore. Accordingly, the company is expected to remain net debt-free over the medium term. Any larger-than-expected, debt-funded capex or acquisition that could materially alter the capital structure would be monitorable.
Key Rating Drivers - Weaknesses Exposure to regulated nature of the fertiliser industry and volatility in raw material prices The fertiliser industry is strategic, but highly controlled, with fertiliser subsidy being an important component of profitability. The phosphatic-fertiliser industry was brought under the NBS regime from April 1, 2010. Under this scheme, the Government of India fixes the subsidy payable on nutrients for the entire fiscal (with an option to review this every six months), while retail prices are market driven. Manufacturers of phosphatic fertilisers are dependent on imports for their key raw materials, such as rock phosphate and phosphoric acid. Cost of raw materials accounts for about 75% of the operating income. The regulated nature of the industry and susceptibility of complex fertiliser players (including Coromandel) to raw material price volatility under the NBS regime continues to be key rating sensitivity factors.
Fertiliser companies are also exposed to subsidy payments from the government, which may get delayed, leading to reliance on short-term working capital borrowing. |
Liquidity Superior Cash and equivalents (net of acceptances) stood at ~Rs 450 crore and unutilised fund-based limit was around Rs 1,500 crore, as on August 31, 2025. Annual cash accrual of Rs 1,700–1,900 crore, with no term debt repayment and sufficient to cover annual capex of Rs 800–1,000 crore over the medium term, further supports liquidity. |
Outlook Stable Business risk profile will remain comfortable over the medium term, with continued focus on improving operating efficiency and diversification of operations into the agrochemicals segment. Continued and timely release of subsidies by the government will remain key to maintaining strong financial risk profile. |
Rating sensitivity factors Downward factors
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About the company Coromandel, one of the flagship companies of the Murugappa group, was established as a private company in 1961. As on September 30, 2025, E.I.D. Parry (India) Ltd, a Murugappa group company, owned 56.10% of Coromandel.
The company’s business structure is bifurcated into two segments — nutrient and other allied businesses, and crop protection business. The nutrient and other allied segment includes the manufacturing and marketing of phosphatic fertilisers, specialty nutrients, organic fertilisers and retail. The crop protection business includes manufacturing of bio-based and chemical pesticides.
The company has the capacity to manufacture over 3.6 million tonne (MT) of fertilisers and pesticides and 1.0 MT of single super phosphate per annum. Besides this, the company manufactures water-soluble fertilisers, biopesticides and agrochemical technicals and formulations.
For the first three months of fiscal 2026, profit after tax (PAT) was Rs 502 crore on total income of Rs 7,042 crore, against Rs 309 crore and Rs 4,729 crore, respectively, during the corresponding period of the previous fiscal. |
Key financials
As per the Crisil Ratings analytical adjustment |
Any other information: Not applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
& - Sanctioned OD facilities against FD
% - Fully interchangeable with WCDL (INR and FCY), CP, export credit (INR upto Rs. 100 crores and FCY 17.75 crores). One way interchangeable from Fund based to Non- Fund limits. 100% two way interchangeability between Pre and Post Shipment Export credit
< - Fully interchangeable with letter of credit limits
&& - Fully interchangeable with LC and SBLC. One way interchangeable from Fund based to Non- Fund limits (100%), Credt Limit exposure for derivatives (upto 50 crs)
%% - Limits sanctioned Rs. 120 crores under corporate commercial card
@@ - Secuded LC Interchangeable with SBLC upto Rs. 1,000 crores. Two way interchangability between LC and BG. One-way interchangeability from LC to CC limit up to Rs 300 crore. Utilization of NFB limits of the company for issue of LCs/BGs on behalf of subsidiary/JVs, subject to a cap of Rs.300 Cr.
~~ - Fully interchangeable with letter of credit, bank guarantee, short term loan and buyers credit
<< - Fully Interchangeable to SBLC up to Rs.2800 Crs and Interchangeable with BG limit up to Rs. 400 crores and OD/WCDL up to Rs 50 crores.
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Annexure - List of entities consolidated
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| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Criteria Details
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