Nuvama says 'Buy' again on Coromandel Int'l; 3 drivers behind the call

Nuvama on Coromandel International: Domestic brokerage Nuvama has reaffirmed its ‘Buy’ rating on agri-solutions provider Coromandel International on the back of a stronger multi-year growth runway built on diversification, backward integration and scale expansion. 

 

At its recent analyst meet, the company laid out an ambitious roadmap aimed at transforming its fertiliser and crop protection franchises, while selectively building optionality in adjacent chemistries. 

 

Analysts at Nuvama expect Coromandel to clock ~15 per cent revenue compound annual growth rate (CAGR) over the next five years, with profitability improving as integration benefits materialise. The brokerage has maintained its target price at ₹3,234, valuing the stock at 30x Q2FY28E earnings per share (EPS).

 

“We reckon Coromandel shall deliver ~15% revenue CAGR over five years, driven by momentum in crop protection, backward integration, and a more diversified mix. Profitability should improve meaningfully as these initiatives mature,” said Archit Joshi and Rohan Ohri of Nuvama, in a note dated December 2, 2025.

 

Meanwhile, here are top three drivers behind the call:

 

Diversification, integration, and scale-up

 

Coromandel is positioning itself for a larger play across agri-inputs, targeting ~10 million tonnes of fertiliser sales (including trading) supported by deeper backward integration, analysts noted. Management highlighted plans to expand its footprint in northern India and widen its chemistry capabilities. As the mix becomes more balanced between fertilisers and crop protection, Nuvama sees stronger earnings visibility. Integration gains are likely to be meaningful over the medium term, with current valuation multiples (41x/29x/23x FY25A/26E/27E) reflecting the early phase of this transition.

 

Crop protection: Doubling the franchise

 

The company aims to double its crop protection (CP) business, including NACL, to ~₹10,000 crore over the next five years. Momentum in in-licensing continues, with Japanese partnerships contributing 28 per cent to CP revenues. Retail expansion is gathering pace, with 2,000-2,500 outlets planned across three years. Coromandel is also strengthening its Latin American presence through distributor tie-ups, scaling up capacity for Mancozeb by 30 per cent and building out its CDMO vertical, which is expected to gain traction in two to three years. The roadmap includes creating ₹100 crore-plus mega brands based on captive active ingredients.

 

Fertilisers: Capacity expansion and backward integration

 

Coromandel plans to lift phosphatic granulation capacity to 5 million tonnes (from 3.6 million tonnes), add 1 million tonnes in SSP, expand MAP by 25,000 tonnes and introduce innovations like Urea-SSP. The company aims to source nearly two-thirds of raw materials internally. Ebitda/tonne, currently around ₹4,500, is guided to rise towards ₹6,500 as integration deepens. Phosphoric acid capacity could climb to 1 million tonnes, though full-scale requirements are pegged at ~1.5 million tonnes. While H2FY26 may see softer volumes and short-term margin pressures from higher sulphur and phosphoric acid prices, analysts expect these to be transitory.

 

Beyond the core, the company continues to explore adjacencies, from fluorination and phosphate chemistries to battery-grade phosphoric acid and nano-NPKs. While these optionalities add long-term potential, Nuvama believes medium-term growth will remain anchored in the CPC and fertiliser businesses, underlining its renewed ‘Buy’ stance. 

Disclaimer: Target price and stock/sector outlook has been suggested by Nuvama. Views expressed are their own.