Fertiliser margin squeeze drags Coromandel Q1 PAT down 24% YoY despite 16% revenue growth

Coromandel International reported Q1 FY27 (Jun-2026) consolidated revenue of Rs 8,214.58 Cr, up 15.9% YoY, but net profit fell 23.9% to Rs 381.56 Cr from Rs 501.59 Cr a year ago — a clear case of top-line growth failing to reach the bottom line. Net margin compressed to 4.7% from 7.0%, and operating margin to roughly 7.4% from ~11%. The sequential optics look spectacular (PAT +233% over Q4's Rs 114.64 Cr), but that base was depressed by a Rs 70.56 Cr impairment and by seasonality — Q1 is the peak Kharif fertiliser season while Q4 is a trough — so the QoQ jump is an artifact, not momentum. Standalone tells the cleaner organic story: revenue Rs 7,743.55 Cr (+10.6%) with PAT down 25.8% to Rs 376.96 Cr.

The squeeze sits squarely in the nutrient/fertiliser business, exactly where management warned it would. Standalone nutrient segment result fell to Rs 469.88 Cr from Rs 636.68 Cr (-26%) as elevated raw-material costs (ammonia, phosphoric acid) outran subsidy support — the 'abnormal and fluid' situation flagged on the Q4 concall has now shown up in the P&L. Crop protection was the offset and broadly delivered on guidance: standalone crop-protection revenue rose 20.1% YoY to Rs 870.08 Cr (the low end of the 20-25% guided range), with segment result up 44% to Rs 158.81 Cr. On a consolidated basis crop protection revenue jumped ~72% to Rs 1,250.76 Cr, but a large part of that is inorganic — the NACL Industries acquisition, consolidated from Aug 2025 — and inflates the headline growth rate.

The stock went into the print at ₹2,011.3, up 1.1% over the past month of trading.

Against street math this is a miss: the only public model (Univest) mechanically extrapolated ~Rs 753 Cr PAT on ~Rs 10,486 Cr revenue; the actual Rs 382 Cr / Rs 8,215 Cr fell well short, consistent with the margin pressure the company had signalled rather than the trailing-growth assumption analysts pencilled in. Management gave no formal consolidated guidance last quarter, citing the Middle-East-driven cost spike; the crop-protection growth target it did give was met. Alongside the results the board approved housekeeping on overseas/subsidiary structure — a Rs 108 Cr loan-to-equity conversion in wholly-owned Coromandel Chemicals and restructuring of USD 9.7M of loans to Senegal step-down subsidiary BMCC into equity/preference instruments. Auditors S R Batliboi issued an unmodified limited-review conclusion.