Coromandel International is strategically expanding beyond its traditional fertilizer business into crop protection products and farm services, positioning itself for enhanced growth and margin stability. The Chennai-based company, a subsidiary of E.I.D.-Parry (India) Limited, is targeting ₹10,000 crore revenue from crop protection over the next five years as it diversifies its business portfolio.

Strong Financial Performance in Q2FY26

The company delivered robust financial results for Q2FY26, demonstrating the strength of its diversification strategy:

Over the past five years, Coromandel has achieved a revenue CAGR of 13%, profit CAGR of 10%, and share price CAGR of 23%, reflecting strong operational performance and market confidence.

Crop Protection: The Strategic Growth Driver

Crop protection is emerging as the key growth engine for Coromandel's future expansion. The company plans to double its crop protection business, including the integration of NACL Industries, to reach ₹10,000 crore over five years. This growth is being driven by:

• New molecule launches and faster in-licensing
• Japanese partnerships contributing 28% of revenues
• Focus on broader, higher-quality product mix
• Reduced reliance on single molecules for enhanced earnings resilience

Capacity Expansion and Integration Strategy

Coromandel's expansion strategy centers on significant capacity increases across multiple segments:

Including trading operations, fertilizer sales could potentially reach 10 million tonnes. The company expects nearly two-thirds of raw materials to come from captive sources, which should push EBITDA per tonne from approximately ₹4,500 currently to ₹6,500 post-integration.

Retail Expansion and Global Presence

To support crop protection growth, Coromandel plans to add 2,000-2,500 retail outlets over three years. The retail expansion is complemented by:

• Expansion in Latin America through distributor partnerships
• Scaling up Mancozeb capacity by 30%
• Building a Contract Development & Manufacturing Organization (CDMO) vertical expected to gain traction in two to three years
• Creating ₹100 crore-plus mega brands anchored in captive active ingredients

Investment and Market Position

The company's ₹4,000-5,000 crore capex program underpins both fertilizer and crop protection expansion, with investments in phosphoric acid, sulphuric acid, and granulation capacities aimed at lifting margins and reducing earnings volatility.

Analysts at Nuvama have maintained a 'Buy' rating with a target price of ₹3,234, representing an upside of 39.65%. They expect the company to deliver a revenue CAGR of approximately 15% over the next five years, supported by momentum in crop protection and enhanced chemistry capabilities.

Shareholding Pattern and Investor Confidence

As of September 2025, promoters hold 56.88% of the company, followed by domestic institutional investors at 15.88% and foreign institutional investors at 14.45%. Notably, foreign institutional investor interest has strengthened significantly, with FII holdings nearly doubling from 7.79% in September 2024 to 14.45% in September 2025, reflecting rising global confidence in the company's growth strategy.

Coromandel International Limited has strengthened its position in subsidiary NACL Industries Limited by participating in the latter's rights issue, increasing its shareholding from 53.06% to 53.73%. The Securities Issue Committee of NACL Industries approved the allotment of shares on December 31, 2025.

Rights Issue Allotment Details

NACL Industries Limited completed its rights issue by allotting 3,25,01,851 fully paid-up equity shares of face value ₹1.00 each to eligible shareholders and renouncees. Coromandel International received 1,88,24,301 shares through this allotment, which included both its rights entitlement and additional shares applied for.

Shareholding Changes

Following the allotment, Coromandel International's shareholding in NACL Industries has increased substantially. The company's equity holding rose from 10,69,12,581 shares to 12,57,36,882 shares, representing a percentage increase from 53.06% to 53.73%.

NACL Industries Profile

NACL Industries Limited, incorporated on November 11, 1986, operates as a prominent player in the agrochemical space. The company manufactures and sells crop protection technicals, including pesticides, insecticides, herbicides, fungicides, and plant growth chemicals, along with branded formulations.

Financial Performance Overview

The company's recent financial performance shows the following turnover trends:

Regulatory Compliance

The investment by Coromandel International in NACL's rights issue does not fall within the ambit of Related Party Transactions, despite NACL being a subsidiary. The company confirmed that no promoter, promoter group, or group companies have any interest in NACL except for existing shareholdings. The transaction complies with applicable laws including Minimum Public Shareholding requirements under Securities Contract Regulation Rules, 1957 and SEBI Listing Regulations.