CHAMBLFERT - Chambal Fert.

📊 NSE: CHAMBLFERT 🏢 Fertilizers 📅 Last Updated: 12/13/2025 20:54

💰 Financial Performance

Revenue Growth by Segment

Consolidated revenue for H1 FY26 grew 30.5% YoY to INR 12,110 Cr from INR 9,279 Cr. Crop Protection Chemicals (CPC) revenue grew 19% to INR 887 Cr in 9M FY25. Urea sales volumes increased 6.6% to 34.71 Lakh MT in FY25, while total sales including other agri-inputs decreased 7.2% to INR 16,646.12 Cr due to lower natural gas prices.

Geographic Revenue Split

The company maintains a dominant market share in North India through its 'Uttam Vir' brand. International operations via the Moroccan joint venture (IMACID) contributed INR 3,773.99 Cr (MAD 4,466.26 Million) in revenue for FY25, representing a 29.3% increase from INR 2,918.24 Cr in FY24.

Profitability Margins

Net profit margin improved as PAT grew 18% YoY to INR 1,240 Cr in H1 FY26. Crop Protection margins reached a record 30% in recent quarters, significantly higher than the sustainable historical range of 18-20%, driven by a fresh portfolio of 22 new product introductions.

EBITDA Margin

EBITDA for H1 FY26 was INR 1,812 Cr, a 2% increase YoY. 9M FY25 EBITDA margin for the CPC segment was 23%, up from 20% YoY. Operating profit for FY25 was INR 2,837.59 Cr, benefiting from lower finance costs and higher volumes of own-manufactured urea.

Capital Expenditure

The company is investing in a Technical Ammonium Nitrate (TAN) plant with a capacity of 240,000 metric tonnes per annum, expected to be commercialized by January 2026. This project is being funded primarily through internal accruals, supported by a net cash surplus of INR 2,985 Cr as of December 2024.

Credit Rating & Borrowing

CRISIL reaffirmed 'CRISIL AA+/Stable' for long-term and 'CRISIL A1+' for short-term facilities. The company achieved a zero-debt status as of March 31, 2025, after prepaying the entire term debt for the Gadepan-III plant. Interest coverage ratio is strong at over 10 times.

⚙️ Operational Drivers

Raw Materials

Natural Gas (feedstock for Urea), Ammonia (feedstock for TAN), and Phosphates/Potash (for DAP/NPK trading). Natural gas price fluctuations directly impact turnover, with a 7% decrease in FY25 revenue attributed partly to lower gas prices.

Import Sources

Phosphatic and Potassic (P&K) fertilizers are imported to supplement domestic trading. Specific sourcing includes Morocco through the IMACID joint venture for phosphoric acid.

Key Suppliers

Suppliers include global phosphoric acid producers like OCP (via IMACID JV) and domestic/international natural gas suppliers for the Gadepan manufacturing complex.

Capacity Expansion

Current Urea capacity is 3.30 million metric tonnes (MT), the largest in India's private sector. Expansion includes a 0.24 MTPA Technical Ammonium Nitrate (TAN) plant scheduled for completion by the end of FY26.

Raw Material Costs

Raw material costs are largely mitigated in the Urea segment as the government compensates for natural gas price increases through subsidy receipts. Traded segment margins are more sensitive, with DAP procurement prices rising from $650 to $850 per ton in 2024.

Manufacturing Efficiency

Urea plants consistently operate at over 100% capacity utilization. Gadepan-III is one of the most energy-efficient plants globally, operating significantly below normative energy consumption levels.

Logistics & Distribution

The company utilizes an extensive distribution network in North India to support its 'Uttam Vir' brand, ensuring high market penetration for both manufactured urea and traded products.

📈 Strategic Growth

Expected Growth Rate

18%

Growth Strategy

Growth will be driven by the commercialization of the TAN plant in Q4 FY26, targeting the coal mining segment. Additionally, the company is scaling its Crop Protection business through 22 new product launches and entering the seeds market to diversify revenue away from the subsidy-heavy urea segment.

Products & Services

Manufactured Urea, traded Di-Ammonium Phosphate (DAP), Muriate of Potash (MOP), NPK fertilizers, Crop Protection Chemicals (insecticides, fungicides, herbicides), Specialty Nutrients, Seeds, and upcoming Technical Ammonium Nitrate (TAN).

Brand Portfolio

Uttam Vir (Urea and fertilizers).

New Products/Services

Introduced 22 new products in the Crop Protection segment and recently entered the seeds business. TAN is expected to provide a 'four-to-five digit' margin per ton upon commercialization.

Market Expansion

Focusing on increasing the share of non-subsidy profitability to 25% from the current <10%. Target markets for TAN include the domestic coal mining industry.

Market Share & Ranking

Largest private sector urea manufacturer in India with a 3.30 million tonne installed capacity.

Strategic Alliances

IMACID (Joint Venture in Morocco) for phosphoric acid supply and ISGN India (subsidiary).

🌍 External Factors

Industry Trends

The industry is shifting toward 'non-subsidy' diversification. Chambal is positioning itself by moving into Technical Ammonium Nitrate and high-margin Agrochemicals to mitigate the impact of tightening government energy norms and subsidy delays.

Competitive Landscape

Competes with other private and public sector fertilizer manufacturers in India. Differentiation is achieved through a 30% margin in the traded agrochemical segment versus the industry standard of 18-20%.

Competitive Moat

Durable competitive advantage through the 'Uttam Vir' brand, massive scale (3.30 MTPA Urea), and superior energy efficiency at Gadepan-III. These factors provide a cost leadership position in a regulated market.

Macro Economic Sensitivity

Highly sensitive to the Union Budget's subsidy allocation (INR 1.91 lakh crore for FY26) and monsoon performance which dictates pan-India fertilizer demand.

Consumer Behavior

Farmer demand is shifting toward specialty nutrients and crop protection, evidenced by the company's double-digit growth in the agrochemical portfolio despite heavy rainfall.

Geopolitical Risks

Exposure to global fertilizer price volatility (e.g., DAP price spikes to $850/ton) and potential trade barriers affecting raw material imports from regions like Morocco.

⚖️ Regulatory & Governance

Industry Regulations

Subject to New Urea Policy (NUP) and Nutrient Based Subsidy (NBS) rates. Regulatory risk includes potential tightening of energy efficiency norms for Gadepan I, II, and III plants.

Environmental Compliance

Investing in eco-friendly technologies and maintaining a dense green belt at the Gadepan campus. ESG commitment is high to maintain access to capital markets for borrowings.

Legal Contingencies

No pending proceedings under the Insolvency and Bankruptcy Code, 2016. Internal financial controls are reported as adequate and operating effectively by the Board.

⚠️ Risk Analysis

Key Uncertainties

Regulatory changes in subsidy calculations or energy norms could impact operating performance. Monsoon dependency remains a 10-15% swing factor for annual demand.

Geographic Concentration Risk

High concentration in North India for urea distribution; however, the Moroccan JV provides geographic diversification for raw material sourcing.

Third Party Dependencies

High dependency on the Government of India for timely subsidy payments to maintain the current net-cash positive position.

Technology Obsolescence Risk

Mitigated by Gadepan-III being one of the most modern and energy-efficient urea plants globally. Investing in TAN to stay ahead of industrial chemical demand.