PARADEEP - Paradeep Phosph.

📊 NSE: PARADEEP 🏢 Fertilizers 📅 Last Updated: 12/14/2025 10:51

💰 Financial Performance

Revenue Growth by Segment

Revenue from operations in Q2 FY26 rose 48.8% YoY to INR 6,872.2 Cr. Growth was led by value-added NPK grades (N20 volumes grew 52% YoY) and TSP (volumes grew 339% YoY). H1 FY26 revenue grew 46.3% YoY to INR 11,375.7 Cr.

Geographic Revenue Split

Not explicitly disclosed in percentages, but the company is expanding into the Southern region of India following the strategic merger with MCFL.

Profitability Margins

Net Profit Ratio improved significantly from 0.86% in FY24 to 4.00% in FY25. ROCE improved from 6.57% to 12.98% over the same period. Q2 FY26 PAT margin stood at 4.9%.

EBITDA Margin

EBITDA margin for Q2 FY26 was 10.1%, a decrease from 11.4% in Q2 FY25. However, H1 FY26 EBITDA grew 69.3% YoY to INR 1,313.1 Cr with a margin of 11.5%.

Capital Expenditure

The company is undertaking a major capacity expansion with a planned Capex of INR 3,600 Cr, targeting an asset turn of 2x to 2.5x with commissioning expected by FY28.

Credit Rating & Borrowing

ICRA has assigned a rating of [ICRA]A+ (Rating watch with developing implications). Borrowing costs for term loans range between 7.12% and 9.0%.

⚙️ Operational Drivers

Raw Materials

Critical raw materials include Rock Phosphate, Sulphuric Acid, Phosphoric Acid, and Ammonia. Cost of material consumed represented 47.1% of revenue in Q2 FY26 (INR 3,236.6 Cr).

Import Sources

Raw materials are imported from various global markets to mitigate domestic supply constraints, though specific countries are not listed.

Key Suppliers

Approximately 48% of total purchases are from related parties within the promoter group to ensure supply security.

Capacity Expansion

Phosphoric acid capacity was increased from 3 lakh MTPA to 5 lakh MTPA in Q2 FY24. Planned Capex of INR 3,600 Cr will further expand complex fertilizer granulation units by FY28.

Raw Material Costs

Raw material costs are highly sensitive to global price volatility. Backward integration into phosphoric and sulphuric acid is expected to improve margins by INR 1,000 to INR 1,500 per ton.

Manufacturing Efficiency

Q2 FY26 production rose 19% YoY to 10.06 lakh tons. The company aims for 100% backward integration by the end of FY28 to maximize efficiency.

Logistics & Distribution

The company leverages its port-based location at Paradeep for efficient raw material handling, though port congestion remains a noted risk factor.

📈 Strategic Growth

Expected Growth Rate

28%

Growth Strategy

Growth will be achieved through an INR 3,600 Cr capacity expansion (FY28 commissioning), 100% backward integration to boost margins by INR 1,000-1,500/ton, and capturing Southern Indian market share via MCFL synergies.

Products & Services

Manufactured and traded fertilizers including NPK (notably N20), DAP (Di-Ammonium Phosphate), MOP (Muriate of Potash), TSP (Triple Super Phosphate), and Nano fertilizers.

Brand Portfolio

Paradeep Phosphates (PPL) and Mangalore Chemicals and Fertilizers Limited (MCFL).

New Products/Services

Strategic focus on TSP (Triple Super Phosphate) and Nano fertilizers which have a smaller carbon footprint and higher value-add potential.

Market Expansion

Expanding market presence into Southern India through the MCFL merger and strengthening dealer engagement (6,050 dealers currently).

Market Share & Ranking

The company claims leadership in sustainable business practices and is a major player in the phosphatic/complex fertilizer segment.

Strategic Alliances

Strategic merger with MCFL and established joint ventures for operational synergies.

🌍 External Factors

Industry Trends

The industry is shifting toward value-added NPKs and sustainable 'green' fertilizers. Regulatory trends include potential mandates for green hydrogen in manufacturing.

Competitive Landscape

Facing pressure from existing competitors' capacity expansions and industry consolidation leading to larger players with enhanced economies of scale.

Competitive Moat

Moat is built on cost leadership through 100% backward integration (target FY28), port-based logistics advantages, and a massive distribution network of 6,050 dealers.