Coromandel International Limited: history, ownership, mission, how it works & makes money

A Brief History of Coromandel International Limited

Coromandel International Limited, established in 1961, is one of India's leading fertilizer companies, primarily engaged in the manufacturing and marketing of a wide range of fertilizers and crop protection products. The company is a part of the Murugappa Group, a conglomerate with a rich history and diverse portfolio.

In its early years, Coromandel began by producing NPK fertilizers, quickly establishing a strong foothold in the Indian agricultural sector. By the late 1970s, the company expanded its operations to include crop protection chemicals, which significantly enhanced its product offerings. As of March 2023, Coromandel’s market capitalization stood at approximately INR 25,000 Crores.

In 1980, the company commenced its journey into the production of complex fertilizers, further solidifying its market position. The 1990s saw Coromandel International increasing its production capacity with the commissioning of its new plant in Kakinada, which had a capacity of 1.3 million metric tonnes per annum. This expansion allowed the company to meet the growing demand in both domestic and export markets.

As of FY 2022-2023, Coromandel reported consolidated revenues of INR 21,700 Crores, showing a considerable growth of around 20% year-on-year. The company has consistently focused on innovation and sustainability, investing in R&D to develop products that support environmentally friendly agricultural practices.

The company's financial performance is reflected in its earnings before interest, taxes, depreciation, and amortization (EBITDA), which reached INR 3,100 Crores for FY 2022-2023, translating to an EBITDA margin of approximately 14.3%.

The strategic acquisitions over the years have also played a crucial role in the company's growth trajectory. In 2011, Coromandel International acquired the crop protection business of the erstwhile E.I. DuPont in India, which allowed it to enhance its position in the crop protection segment significantly.

By 2020, Coromandel's product portfolio had expanded to over 230 products across fertilizers and pesticides, catering to a diverse set of crops and soil types. The company has a robust distribution network spanning more than 10,000 dealers and distributors across India.

As of October 2023, the company has continued its focus on sustainability, working towards reducing carbon emissions and increasing the efficiency of its manufacturing processes. Coromandel's commitment to sustainable practices is evident in its CSR initiatives, which focus on improving agricultural practices and supporting rural communities.

Coromandel International's stock has shown resilience, with a year-to-date increase of approximately 35% as of October 2023. The stock price peaked at INR 1,232 in early September 2023, reflecting positive investor sentiments driven by robust earnings reports and strategic growth initiatives.

A Who Owns Coromandel International Limited

Coromandel International Limited, a prominent player in the agrochemical sector, is primarily owned by institutional investors and individual shareholders. As of the latest data, the following table outlines the significant ownership percentages among the major shareholders.

The promoters are primarily represented by the Adventz Group, which is closely associated with the family of Saroj Kumar Poddar. The Poddar family controls a significant portion of Coromandel's shares, ensuring strong influence over the company’s strategic decisions.

As per the latest shareholding pattern reported for the quarter ended September 2023, institutional investors hold a sizeable stake in the company. Foreign institutional investors have shown substantial interest, with their stake rising from previous quarters. This increase suggests confidence in Coromandel's future growth prospects amidst the competitive agrochemical industry.

Additionally, public shareholders hold a varied stake, reflecting a decentralized ownership structure that is typical for companies in this sector. The diversified investor base aids in stabilizing stock performance, as seen during market fluctuations.

In terms of share price performance, Coromandel International Limited's stock has shown resilience. As of October 2023, the stock price was trading around INR 1,100, with a year-to-date return of approximately 12%. This performance is underpinned by robust earnings growth and strategic expansion plans, feeding investor optimism.

Looking at the company’s recent financials, Coromandel reported a revenue of approximately INR 15,000 crores for the fiscal year ending March 2023, with a net profit of about INR 1,500 crores. These figures are indicative of a solid operational framework and effective cost management strategies.

In conclusion, the ownership composition of Coromandel International Limited paints a picture of a stable yet dynamic investment opportunity. Strongly backed by promoters and institutional investors, the company appears well-positioned for future developments in the agrochemical market.

Coromandel International Limited Mission Statement

Coromandel International Limited aims to be the most trusted and preferred partner in the agricultural sector. The company focuses on enhancing farm productivity through its wide range of products and solutions, including fertilizers, pesticides, and specialty nutrients.

As of FY2023, Coromandel reported a revenue of ₹15,411 crore, reflecting a growth of 18% compared to the previous fiscal year. The company's commitment to sustainable agriculture is embedded in its mission to improve the livelihoods of farmers while promoting environmental stewardship.

The company's mission is driven by a focus on innovation and customer satisfaction. Coromandel strives to develop high-quality products that address the specific needs of farmers, thus enhancing agricultural productivity. The company has invested heavily in R&D, allocating approximately 2.5% of its annual revenue towards this initiative in 2023, which equates to around ₹385 crore.

Coromandel’s mission is also reflected in its sustainability initiatives. The company aims to achieve carbon neutrality by 2040 and has set a target to reduce water consumption per ton of production by 30% by 2025.

In alignment with its mission, Coromandel has expanded its product portfolio to include various sustainable practices, such as organic fertilizers and integrated pest management solutions. In 2023, the contribution of specialty nutrients to total revenue stood at 28%, indicating a shift towards more sustainable agricultural solutions.

Furthermore, Coromandel's commitment to its mission is demonstrated in community engagement, where it has invested over ₹100 crore in various agricultural development programs across India over the last five years. These programs focus on training farmers in modern agricultural practices and enhancing crop yields.

The company’s mission statement is not just a declaration but is actively pursued through measurable goals and objectives, fostering a culture of accountability and continuous improvement. Thus, Coromandel International Limited continues to align its operations with its core mission of becoming a leader in the agricultural sector while making significant contributions to society and the environment.

How Coromandel International Limited Works

Coromandel International Limited is a leading player in the Indian agrochemical sector. The company primarily operates in the manufacturing and marketing of fertilizers, crop protection chemicals, and specialty nutrients. In FY 2022-23, Coromandel reported a revenue of approximately ₹15,210 crore, which marked an increase of about 16% from the previous fiscal year.

As a part of its operations, Coromandel engages in three main segments:

• Fertilizers: The company is known for its diverse range of fertilizers. In FY 2022-23, fertilizers contributed around 60% of its total revenue.
• Crop Protection: This segment includes pesticides and herbicides, which has been witnessing significant growth, accounting for roughly 25% of the overall revenue.
• Specialty Nutrients: This growing category contributed nearly 15% to the total revenue.

Coromandel operates manufacturing facilities across India, with major plants located in locations such as Vishakhapatnam, Kakinada, and Goa. The total production capacity for fertilizers is approximately 2.2 million metric tonnes per annum.

In terms of financial performance, the company's EBITDA for FY 2022-23 stood at approximately ₹2,376 crore, implying an EBITDA margin of about 15.6%. Net profit for the period was reported at ₹1,122 crore, reflecting a growth of 20% year-on-year.

Coromandel International is also actively investing in research and development to innovate and improve its product offerings. In FY 2022-23, the company allocated around ₹150 crore towards R&D initiatives. This investment is aimed at developing new formulations and advancing sustainable agriculture practices.

On the stock market, Coromandel's shares are traded on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). As of October 2023, the stock price was hovering around ₹1,275 per share, with a market capitalization of approximately ₹36,000 crore.

The company has also maintained a good dividend-paying track record. In FY 2022-23, Coromandel declared a dividend of ₹6.50 per share, resulting in a dividend yield of around 0.51% at the current market price.

Coromandel's strategic initiatives, including the focus on sustainable practices and technological advancements, have positioned it favorably in a competitive market. The company is expected to leverage its strong distribution network that spans over 11,000 dealers to enhance its reach in rural India, where demand for agricultural inputs is rapidly growing.

How Coromandel International Limited Makes Money

Coromandel International Limited, a leading agri-inputs company in India, primarily generates revenue through its diverse product offerings, including fertilizers, crop protection chemicals, and specialty nutrients. For the financial year ending March 2023, Coromandel reported a consolidated revenue of ₹12,069 crores, marking a growth of approximately 22% compared to the previous year.

The company's revenue streams can be broken down into several segments:

• Fertilizers: This segment remains the backbone of Coromandel's revenue generation, contributing about 70% to total sales. In FY 2023, fertilizers alone accounted for approximately ₹8,440 crores.
• Crop Protection: With sales amounting to around ₹1,823 crores, crop protection products contributed roughly 15% of the total revenue. The company has enhanced its portfolio by focusing on innovative agrochemical solutions.
• Specialty Nutrients: This segment has witnessed a surge, generating ₹1,140 crores, accounting for about 9% of total revenues. The increased demand for specialty products has aided growth in this area.
• Others: This segment includes seeds and other agri-inputs, contributing approximately ₹666 crores, or 6% to the overall revenue.

Coromandel International's strategy includes expanding its production capacities, optimizing supply chain efficiencies, and enhancing customer engagement, which has fueled growth across all segments. The company operates multiple manufacturing facilities, including locations in Andhra Pradesh, Telangana, and Karnataka.

Key drivers of revenue for Coromandel include:

• Government Policies: Supportive government initiatives, such as subsidies for fertilizer manufacturers and increased spending on agricultural infrastructure, play a crucial role in driving demand.
• Market Share: Coromandel holds a significant market share in the fertilizer sector, estimated at around 13% in the Indian market, which gives it a competitive edge.
• Innovation: The company invests heavily in research and development, enhancing its product line to cater to evolving farmer needs, leading to increased sales volumes.
• Export Sales: Coromandel has expanded its footprint in international markets, exporting products to over 25 countries, contributing an additional revenue stream.

Financial performance metrics for Coromandel International indicate a robust operational efficiency. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) for FY 2023 stood at approximately ₹1,600 crores, with a margin of 13.2%. The net profit for the fiscal year was reported at ₹823 crores, with a net profit margin of 6.8%.

Coromandel's strategic initiatives focus on sustainability and environmental stewardship, positioning the company favorably in a market increasingly driven by eco-conscious practices. The company has committed to reducing carbon footprints and engaging in sustainable agriculture, further enhancing its brand value and loyalty among consumers.