Stock Picks: Coromandel International

Coromandel International (CRIN), is the second largest fertilizer company in India. The company’s business segments include Fertilizers, Specialty Nutrients, Crop Protection and Retail. It has 3900 employees across India. It is part of the Rs 30,000 crore Murugappa Group.

Fertilizers:
– CRIN earns 84% of its revenues and 64% of its EBITDA from fertilizer (subsidy) business
– CRIN is a Leader in Single Super Phosphate (SSP) with 13.5% market share
– CRIN manufactures complex fertilizers containing all three major plant nutrients: NPK (Nitrogen, Phosphorous and Potassium)
– CRIN manufactures and markets 3.2m tons of fertilizers under brand name GROMOR
– The company has 13 marketing offices and 7000 dealers across India
– CRIN derives 84% of its revenues from subsidy business and 16% of its revenues from non-subsidy business in FY16
– CRIN is selling its products across India, Latin America, Africa, China, South East Asia and Middle East

Specialty Nutrients, Crop Protection and Retail:
– CRIN earns 16% of its revenues and 36% of its EBITDA from Specialty Nutrients and Crop Protection (non-subsidy) business
– Its non-subsidy EBITDA has increased from 23% in FY09 to 36% in FY16
– CRIN is a Major Player in Crop Protection post acquisition of FICOM, Pasura Bio Tech and Sabero
– CRIN is serving more than 22 lakh farmers through 800 retail outlets in Andhra and Karnataka

Management:
– Mr. A Vellayan, Chairman of CRIN, has over 25 years of experience in the same business. He holds an MBA from University of Warwick, UK. He is the member of board of governors of Doon School
– Mr. V Ravichandran, Vice Chairman of CRIN, has over 25 years of experience in the same business. He holds an MBA from IIM, Ahmedabad
– Able and honest management

Investors:
– Promoters hold 62% of the company
– Mutual Funds hold close to 5.6% of the company.
– ICICI Prudential Life holds 5.2% of the company

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