NACL zooms over 100% in 1 month as Coromandel set to acquire majority stake

Synergies from Coromandel and NACL's combined sourcing, consolidation of R&D, benefits from the management's expertise and financial reputation shall improve NACL's business profile.

Shares of NACL Industries (NACL) hit a new high of ₹149.10, as they gained 5 per cent on the BSE in Tuesday’s intra-day trade with only buyers seen on the counter. Till 11:03 AM; a combined 258,000 shares had changed hands and there were pending buy orders for nearly 1.5 million shares on the NSE and BSE.

 

The stock of the pesticides and agrochemicals company is locked in upper circuit for the sixth straight trading day and it has rallied 52 per cent during the period. In the past one month, it has zoomed 112 per cent, as compared to the 1 per cent decline in the BSE Sensex.

 

On March 12, 2025, Coromandel International, the Murugappa group company, announced the acquisition of a 53 per cent stake, worth around ₹820 crore in NACL. This transaction is expected to be completed by the first half of fiscal 2026, subject to regulatory approvals.

 

Synergies from combined sourcing, consolidation of research and development center, benefit from the management’s expertise and financial reputation shall improve NACL’s business and financial risk profiles in the near- to medium-term. This will remain a monitorable, according to analysts.  ALSO READ | Stock Market LIVE: Sensex 600 pts higher to 73,700; Nifty below 22,400

 

NACL is an India-based crop protection company with a strong branded formulation business in the domestic markets. It exports technicals to key global markets and has a presence in contract manufacturing operations with multinational agrochemical companies.

 

Coromandel said the acquisition would establish it as a leading player in India’s crop protection industry, expanding its technical portfolio and strengthening its domestic formulation business. The deal will also help Coromandel scale up, enter the contract manufacturing business, fast-track new product commercialisation, and expand its product lineup.

 

The management added that the acquisition would bolster Coromandel’s presence in both the domestic and export markets. It plans to leverage its management expertise, credit access, sourcing capabilities, and international reach to enhance NACL’s operations and create value for shareholders.

 

Meanwhile, shares of Coromondel gained 4 per cent to ₹2,055 on the BSE in intra-day trade. It had hit a 52-week high of ₹2,125 on April 3, 2025. Since March 2025, the stock has rallied 19 per cent.

 

This acquisition will augment the crop protection business of Coromandel, strengthen its presence in the domestic formulations business, expand existing product portfolio and help in securing contract manufacturing relationships with NACL’s established customer relationships.

 

NACL’s operating profitability has remained weak over fiscal 2024 and 2025 due to subdued realisations along with certain provisions on debtors. However, there should not be any significant impact on operating performance of Coromandel in the near-term since it will contribute to around 10 per cent of the combined entity’s revenue and profitability, according to Crisil Ratings.  ALSO READ | Bank of Maharashtra stock rallies 5% as Q4 gross loans rise 18% YoY

 

Coromandel continues to be the single-largest super phosphate player in the domestic market, with a share of ~15 per cent in fiscal 2024; and the second-largest player in other complex phosphatic (diammonium phosphate-nitrogen, phosphorus and potassium [DAP+NPK]) fertilisers with a primary share of ~15 per cent. The company's financial risk profile remains robust, with a strong net cash position as of December 2024.

 

The annual earnings before interest, tax, depreciation, and amortisation (Ebitda) per tonne is likely to remain healthy and sustain over ₹5,000 going forward 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, the ratings agency said in the rationale.

 

Meanwhile, the government has also demonstrated its financial support to the fertiliser sector via additional subsidies in the past two fiscal years. The announced subsidy of ~₹1.67 trillion for fiscal 2026 should be sufficient to meet the requirement. This, combined with healthy cash accruals and surplus liquidity, will be sufficient to fund working capital requirement, thus enabling it to maintain its net debt-free position over the medium-term, Crisil Ratings said.

 

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, it added.