A well-known expression, “to be extremely happy after some event,” is “.” Because the company sold two chocolate balls in a pack, the people who made the ads changed the saying and used the tagline above to represent another happy occasion.
The position that investors in Coromandel International hold is perfectly summed up in the aforementioned tagline.
A significant announcement was recently made by the Fertilizer Company.
C International of the Coromandel: Coromandel International is a part of the Murugappa Group, which is growing. In Hyderabad, Telangana, it has its headquarters. The company, which started out as Coromandel Fertilizers, deals in specialty nutrients, pesticides, and fertilizers.
It offers a wide range of goods and services and is one of India’s leading providers of agriculture solutions. The business holds a significant share of the market in a crucial industry.
India is a nation of farmers. Agriculture employs more than half of the Indian workforce. Additionally, India is the world’s most populous nation. India must therefore have a robust agricultural sector for economic and social reasons.
People who work in the agricultural sector make more money and get better agricultural products from a strong agricultural sector. It didn’t take Sherlock Holmes long to realize that the fertilizer industry has a growth opportunity in a growing agricultural sector.
It appears as though Coromandel Global is making the most of this open door. The company held roughly 17.9% of the market share in the Phosphatic Fertilizer and Super Phosphate sector as of September 2022.
spent 2.8 billion dollars on capital expenditures in 2022 and anticipates spending approximately 9 billion dollars in 2023 and 2024. It intends to maintain its debt-free status despite such significant capital expenditures.
With a major capex plan, it likewise plans to send off nine new items in 2022.
In addition, the company’s financial performance over the past five years has been satisfactory. The company’s revenue has increased at a compound annual growth rate (CAGR) of 11.6% over the past five years because of its strong retail presence, which includes more than 750 locations.
Net profit has increased by 17.1% on a compound annual growth rate (CAGR) thanks to the steady production of key input phosphoric acid.
View Full Image
The business reported total sales of 83,492 million (m) for the quarter that ended on December 31, 2022. This represents a significant increase of 64 percent year-over-year. It saw a 41% rise in profit over the same time period.
Aside from acquiring abundantly, the organization has additionally compensated its investors liberally. For the fiscal year that ended in March 2022, it distributed dividends equivalent to 1,200% 12 per share.
Additionally, the business announced a Rs. Six on February 2, 2023 It has paid out 9 dividends on average over the past five years.
View Full Image
Even FIIs have increased their stake in the business over the past three quarters due to its promising growth prospects and strong financial performance. As of December 31, 2022, 10.3% of the company was owned by FIIs.
After recognizing the opportunity in Agri-tech, the company is also implementing new technologies. To launch a first-of-its-kind “drone-as-a-service,” the company invested in a drone-based startup.
The company’s efforts to become the largest fertilizer company are reflected in all of these.
Endeavors are likewise noticeable in its portion cost outlines. The price of its shares has increased by 63.7% over the past five years.
View Full Image
The company announced on March 22, 2023, that its board of directors has approved plans to enter the contract development and manufacturing organization (CDMO) business and expand its operations into crop protection chemicals.
The board also approved expanding into new growth areas like industrial and specialty chemicals.
The company will not only take a sizable share of the market in the business it already operates, but it will also use its extensive technical expertise and world-class infrastructure to enter new markets.
The announcement stated that the company intends to create a large-scale business by investing 10 billion (bn) in the aforementioned businesses and taking advantage of the macro tailwinds in the specialty chemical sector.
How this foray will help Coromandel take advantage of the opportunities: Getting into the CDMO business can help it use its strong development capabilities across a variety of chemistries and expertise in handling complex chemistry on a commercial level.
Pharma companies have a growing desire to outsource drug development to CDMOs due to the rising demand for better drugs. Indian CDMOs will look to provide solutions for complete product development, scale-up, and regulatory approval in the near future, as well as rapidly develop exciting new products.
CDMOs that have marketing alliances with powerful branded generic companies will take on all aspects of a new product’s research and development, from ideation to high volume manufacturing.
The existing capabilities of the company in crop protection chemicals provide a solid foundation and the flexibility necessary to compete in specialty and industrial chemicals.
These businesses have significant growth potential due to global trends in supply chain diversification and strong government policy incentives.
For the Indian specialty chemical industry, Covid-19 was a blessing in disguise. China’s estimated US$ 800 billion 658.8 billion) in the worldwide specialty chemical industry. However, the world turned to India because of China’s stringent lockdown restrictions.
India is the sixth largest producer of chemicals. Low creation costs, modest work and a demonstrated history of delivering world-quality items make India an alluring venture.
India is also able to take advantage of economies of scale because it is so close to the Middle East, which is the largest source of petrochemical reserves in the world.
How the share price of Coromandel International has performed recently Coromandel shares have lost 2% thus far in 2023. Coromandel International has increased by 10.8% over the past year.
Coromandel International is at its 52-week low of 779.8 on March 28, 2022, and it reaches its 52-week high of 1,094.4 on September 1, 2022.
View Full Image
Disclaimer: This article only serves as information. This should not be interpreted as a stock recommendation.
This article is partnered equitymaster.com
