Fertilizer major Coromandel International reported a whopping 83% (YoY) drop in consolidated net profit at Rs.11.67 crore for Q4FY13 on a 24% decline in net sales at Rs.2066 crore. The company ended the fiscal too on a bad note – with a 8% drop in consolidated net sales at Rs.8970 crore and net profit for the year was down 32% at Rs.432 crore. The performance has been affected by challenging demand conditions and an oversupply situation, which led to all agricultural input businesses getting affected However, with monsoon showing signs of being normal this year, prices are expected to remain robust and farmers incomes are expected to go up. Also seasonally, in Q4 demand is low and this further compounded the problem with lower production and higher inventory. Its ammonia cost for the quarter was also very high and though it has softened but now, the company has to now contend with the gas price hike, which is to be begin from April 2014.

The company is engaged in making fertilizers at its plant at Kakinada in Andhra Pradesh and it commenced production of phospatic fertilizers during Q4FY13. Dispatches from the plant are expected to begin from May. The company during the quarter also acquired a majority stake in Liberty Phospates and this unit is now a subsidiary of Coromandel. During the year, its primary markets - AP, Karnataka, Tamil Nadu and Maharashtra contracted by 44% during the year whereas it actually improved its market share from 9. 7% to 14. 8%. . So its overall market share has remained intact or has actually improved a little bit, DAP going up from 4. 5% to 5% and complexes market share going up from 20. 7% to 21. 9%. With monsoons being good, it expects capacity to go up to an average of around 80% this fiscal. Q1 and Q2 for current fiscal is expected to be good. DAP demand is expected to grow by at least 10% this year from 16.4 million tonnes to about 18 million tones.