Coromandel Inter (COROMANDEL)

FairStock Score: 61/100 — STEADY

Score breakdown: P/E: 0/3 · ROCE: 1/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• Strong return ratios: ROE 21.61% and ROCE 23.20%
• Very low leverage: Debt/Equity of only 0.12
• Healthy operational quality: Piotroski F-Score 7/9 and Altman Z-Score 4.81
• High promoter holding of 56.86%, aligning interests with minority shareholders
• Solid revenue momentum: 35.01% sales growth and 5-year revenue CAGR of 11.17%

Concerns

• Rich valuation: P/E 30.87 and P/B 5.43, with price far above Graham Number of ₹829.92 and negative margin of safety of -167.49%
• Profit growth of 12.33% lags sales growth of 35.01%, indicating earnings are not keeping pace with the top line
• Negative free cash flow of -₹174 Cr despite reported profitability is a red flag for earnings quality
• Low dividend yield of 0.54% provides limited income support and downside protection

AI Analysis

Coromandel International is not a cigar butt; it is a high-quality fertilizer franchise. The numbers tell me that: return on equity at 21.61% and ROCE at 23.20%, with a debt/equity of just 0.12. That combination is rare. Promoter holding of 56.86% is reassuring and aligns owners with management. The Piotroski score of 7 out of 9 and an Altman Z-score of 4.81 indicate a financially sound balance sheet. The latest quarter shows sales of ₹8,779 Cr and net profit of ₹488 Cr, and the 5-year revenue CAGR of 11.17%; the recent 35.01% sales growth is impressive. But I cannot ignore valuation. At ₹2,039.80, the P/E is 30.87 and P/B is 5.43. The Graham Number of ₹829.92 puts the price far above a conservative intrinsic value; the stated margin of safety is -167.49%. That means I would be paying a full price, perhaps more, for quality. The dividend yield of only 0.54% offers little downside cushion. Also worrying is that profit growth of 12.33% trails the top line, and free cash flow is negative at -₹174 Cr. Profit without cash is not what Benjamin Graham taught me to trust. A PEG of 1.66 suggests the growth is already discounted. This is a good business, but a good business can still be a poor investment if bought at the wrong price. I would want a better price, or at least evidence that cash generation and earnings growth will catch up with headline revenue growth. Until then, patience is wiser than enthusiasm.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer