Mirae Asset Sharekhan has suggested a BUY call on Coromandel International, maintaining a target price of Rs 2,535. The endorsement rests on the company’s aggressive backward integration, robust entry into contract development and manufacturing organization (CDMO), specialty chemicals, and a promising drone business—all of which position Coromandel at the vanguard of India’s agri-solutions and crop protection landscape. The company’s strong operational performance, margin expansion, and transformational strategy promise substantial shareholder value, even as macroeconomic and regulatory headwinds linger.

Sharekhan Research Recommendations and Stock Levels

Mirae Asset Sharekhan recommends a BUY on Coromandel International, targeting Rs 2,535 with the stock currently at Rs 2,259 as of September 23, 2025. This target is predicated on a 26x FY27 estimated earnings per share (EPS) multiple, reflecting high growth conviction powered by the company's backward integration and strategic expansion into non-fertilizer verticals. The stock trades at a forward PE ratio of 23x-28x on FY27/FY26 estimates, offering a valuation edge amid sector growth.

Top Highlights and Performance Drivers

Coromandel posted stellar Q1FY26 results, clocking a 49% year-on-year jump in consolidated revenue to Rs 7,042 crore, supported by both Nutrition & Allied and Crop Protection segments. Operating profit rose by 55% year-on-year to Rs 782 crore as margins improved in the crop protection business. The adjusted quarterly PAT soared by an impressive 62% to Rs 505 crore as subsidy flows accelerated and operational efficiencies took hold.

The Nutrient & Allied segment led sales with a 51% year-on-year jump to Rs 6,352 crore, while crop protection revenue advanced by 31% to Rs 725 crore. Notably, the NPK segment constituted 65% of total sales and market share in consumption terms rose to 16% (from 12% previously), reflecting execution prowess and growing brand equity.

Strategic Initiatives and Industry Positioning

Significant backward integration initiatives define Coromandel’s roadmap, including ramping up rock phosphate production in Senegal (raising stake to 71.5%), and constructing a phosphoric and sulphuric acid facility in Kakinada, due for commissioning by Q4FY26 (70% project completion). These steps are calibrated to ensure input security amidst global volatility, deliver sustainable margins, and enable product innovation.

The company’s foray into high-value segments such as CDMO, specialty chemicals, and agri-drones broadens its revenue streams beyond regulated, subsidy-dependent fertilizers. The drone business, housed in Dhaksha, boasts a current order book of Rs 250 crore, underscoring its emerging relevance to precision agriculture and the government’s rural tech aspirations.

Robust Financials and Shareholder Structure

Coromandel maintains enviable financial metrics with operating profit margins climbing to 11.1%, return on equity projected at 19.9% for FY27, and healthy cash flows enabling inorganic expansion. With a market cap of Rs 66,558 crore, the top ten institutional shareholders include marquee names such as Kotak Mahindra AMC, Axis AMC, and Vanguard, reinforcing institutional confidence.

Here is the financial summary table illustrating progression across key operating metrics:

Sectoral and Policy Tailwinds

India’s agri-solutions sector retains robust policy support, exemplified by the government’s Rs 1.68 lakh crore fertilizer subsidy for FY26 and priority for agri-tech innovations including Kisan Drones. Demand visibility remains high with crop protection and nutrient optimization rising, while large-scale monsoon variability, regulatory pivots, and raw material cost swings persist as sectoral risks.

Investment Risks and Mitigants

Key risks for Coromandel include poor monsoons affecting demand, volatility in raw material prices, and sustained margin pressure in the crop protection business. These factors could pressure earnings and justify the company’s diversified approach and push towards value-added verticals to buffer against cyclical swings.

Management and Corporate Ethos

The leadership of Arun Alagappan (Executive Chairman) and Sankarasubramanian S (Managing Director & CEO) anchors the company’s progressive agenda, backed by a talented executive team across operations and finance. The company’s rich heritage as part of the Murugappa Group, combined with decisive steps towards sustainability and innovation, strengthen its competitive moat.

Stock Levels and Investor Takeaways

Coromandel International’s current market price of Rs 2,259 offers a compelling entry point for long-term investors with a price target of Rs 2,535. Tactical support is seen near Rs 2,150, with immediate resistance at Rs 2,350 and further upside potential tied to the success of backward integration and high-value business lines. Investors are advised to monitor monsoon patterns, input cost trends, and progress on new verticals closely.