Coromandel, Chambal Fertilisers - Nurturing A Sustainable Tomorrow: Prabhudas Lilladher Initiates Coverage

Prabhudas Lilladher Report

As we slowly emerge out of Covid-19 pandemic, the need to secure food supply is set to be top priority of every nation. Consequently, we believe domestic fertiliser industry is well poised for structural growth, led by renewed emphasis towards food security in current times of shortage and global supply chain upheaval.

The domestic agri-input industry holds immense growth potential given-

1. rising domestic demand,

2. tighter global supply scenario from China (China controls ~40% of the global phosphate exports);

3. balanced plant nutrition through higher agri-input penetration;

4. higher usage of specialised nutrients led by change in dietary preferences and continued emphasis on improving farm productivity and farm income.

Accordingly, we are initiating coverage on two highly integrated fertiliser companies: Coromandel International Ltd. and Chambal Fertilisers and Chemicals Ltd. with a positive view underpinned by-

1. their strong focus on core business areas,

2. compelling valuations and

3. better product offerings among Indian peers.

Both Coromandel International and Chambal Fertilisers are well placed to capitalise on long term growth opportunities, given their dominant market share of more than 50% in home markets.

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