Coromandel Q2 PAT declines on rising costs; to invest ₹800 cr to set up plants in AP, Gujarat
Coromandel International Limited, a Murugappa group company that provides agricultural solutions, has reported a decline in net profit for the quarter ending September 30, 2024. The company’s profit after tax (PAT) for the quarter stood at ₹696 crore as against ₹762 crore in the corresponding quarter last year.
This decline comes despite a 7 per cent increase in total income, which reached ₹7,509 crore in the quarter, up from ₹7,031 crore in the corresponding quarter of the previous year.
The net profit for the first half stood at ₹1,027 crore as against ₹1,267 crore in the comparable period in the previous year. During the period, the company’s total income fell to ₹12,277 crore from ₹12,771 crore.
The company attributed the drop in net profit to higher input costs and lower subsidy rates. However, Coromandel International remains optimistic about the future, citing favorable agricultural conditions and increased government support for the sector.
Higher input costs
The company attributed the decline in net profit to higher input costs and reduced subsidy rates. These factors offset the gains from increased sales volume and improved operational efficiencies.
“The company registered a healthy performance in the quarter, led by higher sales volumes and improved operational efficiencies across the businesses. The company continues to make sequential recovery quarter on quarter, despite lower subsidy rates and firming up of raw material prices,” Sankarasubramanian S, Managing Director & CEO, Coromandel International Ltd, said.
“Favourable agricultural environment like above normal monsoon and higher crop sowing supported agri inputs consumption,” he said.
Meanwhile, the board of directors of the company has approved a ₹800-crore plan to expand the company’s operations. Part of the funds would go enhance granulation capacity by 7.5 lakh tons per annum for the manufacture of complex and unique fertilisers at Kakinada in Andhra Pradesh. The investment will enable the production of high-quality phosphatic fertilisers to meet the growing domestic demand.
The company would also set up a multi-product plant for the manufacture of recently off-patented fungicides at Ankleshwar in Gujarat.
Despite the challenges in the quarter, Coromandel International remains optimistic about the future. The company cited favourable agricultural conditions, such as above-normal monsoon rains and increased crop sowing, as positive indicators for the agricultural sector.