India Ratings and Research (Ind-Ra) has revised Coromandel International Limited's (CIL) outlook to positive from stable while affirming its long-term issuer rating at 'IND AA+'.

Ind-Ra continues to combine the business and financial risk profiles of CIL and its associate and subsidiary companies to arrive at CIL's ratings, considering the operational, managerial and financial linkages between them.

The positive outlook reflects Ind-Ra's expectation of a sustained improvement in CIL's profitability in FY22, with improved stability in its EBITDA margin, led by an enhanced product mix, and its continued strong credit metrics.

Ind-Ra expects CIL's non-subsidised business (led by continued strong research and development efforts and the introduction and acceptance of new molecules in this segment) to witness continued growth, resulting in increased market share and healthy margins. The outlook revision also factors in the sustained resilience of the company's nutrient & allied business (NAB) segment.

The financial risk profile of the entity also improved structurally during FY21 post the clearance of subsidy backlog by the Government of India (GoI) resulting in a meaningful improvement in working capital cycle and credit metrics. This, the agency believes will sustain in the medium term given strong cash flow generation and limited capex plans.