CRISIL reaffirms rating of Coromandel International's bank facilities worth Rs11,500 crore; stock under pressure

Coromandel International Limited informed that CRISIL Ratings has reaffirmed its ‘CRISIL AA+’ rating on the long-term bank facilities of the company. It has assigned a ‘Positive’ outlook on the same.

Further, it has reaffirmed the short-term rating at ‘CRISIL A1+’.

The rating agency has also reaffirmed the credit rating of the company’s commercial papers worth Rs2,000 crore at ‘CRISIL A1+’.

Apart from commercial papers, the total bank facilities reviewed are worth Rs9,500 crore.

The ratings continue to reflect Coromandel’s strong market position and operating efficiency in India’s phosphatic fertilizer market.

The company has been able to improve its market position to 17.90% in fiscal 2022, from 15.30% previously, thanks to the backward-integration facilities established over the years, which provide it with a competitive advantage against imports, stated CRISIL in its rationale.

Despite the industry being under pressure from rising raw material prices, Coromandel has been able to maintain its operating performance, particularly in the second half of fiscal 2022.

To protect its operating performance from fluctuations in raw material prices, the company has ensured that a large portion of its phosphoric acid requirement is produced in-house over the years. The scale of operations in the company’s agrochemicals business has also improved.