Management expects sulfur prices to peak and moderate in coming months:

“I think Sulfur has reached the peak. Our view is that sulfur should moderate from here. based on some spurt in demand from Indonesia for a different industry, and also China imports, it peaked in Q4. Sulfur as a global commodity is in surplus and needs to come down. So, we do expect sulfur to soften in the coming months. Sulfuric acid, again, is a function of demand/supply, and I do expect it to remain static here and soften from here.”

“Globally, commodity prices are not going up, whether it is corn or soya and which can dampen the global fertilizer and food prices as well, as affordability index is coming down for the farmers. So, I do expect the commodity prices to soften in the coming quarters.”

— Sankarasubramanian S. (MD and CEO)

Coromandel says their retail stores are highly profitable with rapid breakeven and negative working capital:

“The retail has been a pretty good growth story for us. In fact, more than 90%, 95% of the retail stores, are in the profit zone now, we have added another 130. Based on our learning curve, now we are able to get the breakeven point in a shorter time frame of six months…So, we are pretty sure that retail is a way to go forward.”

“In terms of investment, as of now, we are only on a rental basis. We do not own the stores. And working capital also, considering the pull it generates, I think we are able to leverage better on the sourcing part.”

“Currently we are running the business on negative working capital. There may be an initial challenge in absorbing the fixed cost as we ramp up these stores, but I am sure for the next two to three years we are confident that we should be able to increase the footprint to 3 times the numbers what we have.”

— Sankarasubramanian S. (MD and CEO)

The company gives a gist on how the different product mixes have changed:

“During the year, domestic phosphatic industry increased its production by 9% to 15 million tons. There has been a significant shift in the consumption mix, with NPK sales moving up by 28% to 14 million tons and replacing the DAP [Diammonium Phosphate] shortfall, especially in central and northern markets despite the lower MRP of DAP.”

“Looking at the whole year number, the share of NPK [Nitrogen (N), Phosphorus (P), and Potassium (K)] has moved up to 60% as compared to 51% in the last year. DAP supplies were impacted due to lower supplies from China and also MRP restrictions affecting the viability of imports for the domestic as well as import of DAP.”

— Sankarasubramanian S. (MD and CEO)

The CEO says specialty nutrients business delivers good margins with consistent growth:

“Specialty is a highly profitable business, but involves a lot of concept selling, the volume scale up will be steady. We have been working on it over the period and various products in the product portfolio are developed in-house based on our R&D. EBITDA margin is also quite healthy, between 18% to 20%, and we have been growing consistently in the top line in the last few years at 15% to 20%. And we are sure we will continue to grow that, and that is also a focus area for us.”

— Sankarasubramanian S. (MD and CEO)