COROMANDEL - Investment Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Investment Rating: 3.5

🌾 Fundamental Analysis: Coromandel International Ltd. (COROMANDEL)

Coromandel is a leading agri-input company with strong fundamentals and a dominant position in fertilizers and crop protection. While its recent earnings growth is impressive, the valuation has run ahead of fundamentals, making it a bit frothy for fresh long-term entry.

Metric Value Implication

Market Cap ₹73,756 Cr Large-cap; stable and well-established

Stock P/E 37.4 Expensive vs. industry PE of 26.1

PEG Ratio 9.56 Extremely overvalued relative to growth

ROCE / ROE 23.2% / 16.8% Strong capital efficiency; good but not elite

Dividend Yield 0.48% Low; not ideal for income-focused investors

Debt-to-Equity 0.07 Very low; excellent financial health

EPS ₹76.7 Strong earnings base

Qtr Profit Var +62.2% Exceptional growth; recent earnings surge

FII/DII Holding Change +3.67% / -3.11% FII accumulation; DII trimming — mixed institutional sentiment

📉 Technical Analysis

Current Price: ₹2,495

DMA 50 / DMA 200: ₹2,322 / ₹2,037 → Trading above both; bullish trend

RSI: 61.8 → Near overbought zone; caution for short-term entry

MACD: +30.8 → Strong bullish momentum

Volume: Well above average; high investor interest

💰 Ideal Entry Price Zone

₹2,250–₹2,350

This range offers a better margin of safety and aligns with DMA support levels

Avoid fresh entry above ₹2,500 unless PEG ratio compresses significantly

📈 Long-Term Investment Outlook

Strengths

Strong ROCE and ROE — efficient capital deployment

Debt-free balance sheet — financial resilience

Exceptional quarterly profit growth — earnings momentum is real

FII buying — positive institutional sentiment

Risks

PEG > 9 — severely overvalued for current growth trajectory

P/E far above industry average — priced for perfection

Low dividend yield — not ideal for conservative investors

RSI near overbought — short-term correction possible

Coromandel is a quality growth stock, but current valuations suggest caution. Long-term potential remains strong if earnings growth sustains and valuation cools.

🏁 Exit Strategy / Holding Period

If you already hold COROMANDEL

Holding Period: 3–5 years for compounding and sector tailwinds

Exit Strategy

Consider partial profit booking near ₹2,600–₹2,650 (recent high)

Hold as long as ROCE stays above 20% and PEG drops below 2.5

Reassess if earnings growth slows or valuation remains stretched

Would you like a comparison with other agri-input players like Chambal Fertilizers or UPL to explore sector alternatives?

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