IPHL - Indian Phosphate

📊 NSE: IPHL 🏢 Chemicals 📅 Last Updated: 12/14/2025 7:59

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations grew 13.48% YoY to INR 799.09 Cr in FY25 from INR 704.18 Cr in FY24. Segment-specific growth percentages for fertilizers and LABSA were not explicitly disclosed, though LABSA operations are expected to drive 5-7% growth in FY25.

Geographic Revenue Split

Not disclosed in available documents; however, the company operates units in Rajasthan (Umarda) and Maharashtra (Dhule), and is expanding into Tamil Nadu (Cuddalore) to capture the South Indian market.

Profitability Margins

PAT margin declined to 1.15% in FY25 from 1.91% in FY24. Operating margins have shown a downward trend, dropping from 6.4% in FY22 to 4% in FY23 and stabilizing at approximately 3.5% in FY24-25 due to lower fertilizer subsidies and higher LABSA manufacturing volumes.

EBITDA Margin

Operating margin remained steady at approximately 3.5% in FY24-25. Core profitability is impacted by the lower-margin LABSA segment and fluctuations in government fertilizer subsidies, which increased by INR 1,581/MT in FY25.

Capital Expenditure

Historical capex for FY25 was INR 25.90 Cr, a significant increase from INR 9.93 Cr in FY24. Planned expansion includes a INR 33 Cr investment in a new facility in Cuddalore, Tamil Nadu, funded by IPO proceeds.

Credit Rating & Borrowing

CRISIL Rating is 'Stable'. Interest coverage ratio was 2.7 times in FY25, down from 5.10 times in FY24. Finance costs for FY25 were INR 3.91 Cr, down 16.3% from INR 4.67 Cr in FY24.

⚙️ Operational Drivers

Raw Materials

Key raw materials include Rock Phosphate and Sulphuric Acid for SSP production, and specific chemical inputs for LABSA (Linear Alkyl Benzene Sulphonic Acid). Raw material costs represented 89.5% of total revenue in FY25.

Import Sources

Not specifically disclosed, though the company notes that supply chain stability and raw material price volatility are key operational challenges.

Capacity Expansion

Current expansion includes a new unit in Cuddalore, Tamil Nadu (INR 33 Cr investment) and a fertilizer unit in Dhule, Maharashtra. Ramp-up of expanded LABSA capacity is expected to drive a 5-7% revenue increase in FY25.

Raw Material Costs

Cost of materials consumed was INR 715.53 Cr in FY25 (89.5% of revenue) compared to INR 645.58 Cr in FY24 (91.7% of revenue). Procurement strategies focus on managing volatility in LABSA and SSP input prices.

Manufacturing Efficiency

Bank limit utilization averaged 59% to 86% over the past 12-24 months, indicating moderate utilization. The current ratio improved to 1.95 times in March 2025 from 1.63 times in FY24, reflecting better liquidity management.

Logistics & Distribution

Not disclosed as a specific percentage; however, geographic expansion to South India is intended to optimize distribution and market reach.

📈 Strategic Growth

Expected Growth Rate

5-7%

Growth Strategy

Growth will be achieved through the ramp-up of expanded LABSA capacity, geographic expansion into South India via the Cuddalore plant (INR 33 Cr investment), and improved working capital management using INR 25 Cr from IPO proceeds to lower interest costs.

Products & Services

Single Super Phosphate (SSP) in granular and powdered forms, and Linear Alkyl Benzene Sulphonic Acid (LABSA) used in detergent manufacturing.

Brand Portfolio

Indian Phosphate Limited (IPL).

New Products/Services

Expanded capacity for LABSA, a key raw material for the detergent industry, is the primary new driver, projected to grow due to increasing hygiene awareness and urbanization.

Market Expansion

Targeting South India with a new facility in Cuddalore, Tamil Nadu, to diversify from existing strongholds in Rajasthan and Maharashtra.

🌍 External Factors

Industry Trends

The chemical division is projected to grow due to hygiene awareness. The fertilizer industry remains dependent on the timeliness and amount of government subsidies, with FY25 seeing a subsidy increase of INR 1,581/MT.

Competitive Landscape

The company faces competition in the SSP and LABSA markets, though specific competitor names were not provided in the excerpts.

Competitive Moat

Moat is derived from the 25+ years of experience of promoters (Mr. Ravinder Singh, etc.) and the strategic location of plants near key markets. Sustainability is supported by backward integration efforts and geographic diversification.

Macro Economic Sensitivity

Highly sensitive to agricultural demand and government fiscal policy regarding fertilizer subsidies. Detergent demand (LABSA) is sensitive to population growth and urbanization trends.

Consumer Behavior

Increasing hygiene awareness and urbanization are driving steady demand growth for LABSA-based cleaning products.

Geopolitical Risks

Trade barriers or supply chain disruptions affecting the import of raw materials for SSP and LABSA could impact production costs.

⚖️ Regulatory & Governance

Industry Regulations

Operations are heavily influenced by the Department of Fertilizers' subsidy policies and Section 52 of the Companies Act, 2013, regarding the treatment of IPO expenses (INR 68 Cr issue).

Environmental Compliance

Environmental compliance is noted as a key challenge for the chemical division, though specific ESG costs were not disclosed.

Taxation Policy Impact

Standard corporate tax rates apply; the company reported a tax expense for continuing operations, resulting in a PAT of INR 9.17 Cr in FY25.

Legal Contingencies

The company has disclosed pending litigations in its financial statements; auditors noted that these are disclosed but did not provide a consolidated INR value in the excerpts.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timeliness and amount of government subsidy payments; any stretch in these payments can weaken liquidity. Raw material price volatility is a secondary key risk.

Geographic Concentration Risk

Currently concentrated in Western and Northern India (Rajasthan and Maharashtra), with 100% of current revenue likely from these regions prior to the Tamil Nadu expansion.