RCF - R C F

📊 NSE: RCF 🏢 Fertilizers 📅 Last Updated: 12/14/2025 11:26

💰 Financial Performance

Revenue Growth by Segment

Total revenue for FY25 was INR 16,933.64 Cr, a marginal decline of 0.17% from INR 16,962 Cr in FY24. Segment performance: Fertilizers revenue was INR 10,590.49 Cr (62.5% of total), Industrial Chemicals was INR 1,656.36 Cr (9.8% of total), and Trading revenue was INR 4,675.13 Cr (27.6% of total).

Geographic Revenue Split

Not disclosed in available documents; however, the company operates primarily in the domestic Indian market with major plants in Thal (Raigad) and Trombay (Mumbai), Maharashtra.

Profitability Margins

PAT margin improved slightly to 1.43% in FY25 from 1.33% in FY24. Industrial Chemicals PBIT margins saw a significant recovery to 21.72% in FY25 from 12.50% in FY24, further increasing to 26.41% in Q1FY26. Fertilizer segment PBIT margin remained thin at approximately 1.09% in FY25.

EBITDA Margin

Historical EBITDA margins were 8.79% in FY22 and 8.74% in H1FY23. Operating profitability in FY25 was impacted by planned and unplanned shutdowns, though recovery is expected through energy efficiency schemes yielding 0.25 Gcal/MT savings in ammonia production.

Capital Expenditure

Planned capex of ~INR 3,000 Cr over FY26-FY27. This includes INR 1,400 Cr for a new 1,200 TPD NPK plant at Thal, energy efficiency revamps for the Thal ammonia plant, and an additional equity commitment of INR 1,069 Cr for the Talcher Fertilizers JV.

Credit Rating & Borrowing

Commercial Paper rated CARE A1+. Long-term debt facilities benefit from 75% GoI ownership. Borrowing costs are competitive; for example, NCDs were issued at 6.59% (Series I-2020) and 7.99% (Series I-2024). Overall gearing improved to 0.58x in March 2025 from 0.72x in March 2024.

⚙️ Operational Drivers

Raw Materials

Natural Gas (primary feedstock for Ammonia/Urea), Rock Phosphate, Phosphoric Acid, and Potash for NPK/Complex fertilizers. Traded products include imported DAP (Di-Ammonium Phosphate) and MOP (Muriate of Potash).

Import Sources

Not specifically detailed by country, but the company relies on imports for the trading segment (DAP/MOP) and raw materials for complex fertilizers, exposing it to global commodity price cycles.

Key Suppliers

GAIL Limited (Gas supplier), Coal India Limited (JV partner in Talcher), and various international suppliers for imported DAP and MOP.

Capacity Expansion

Current urea capacity accounts for ~8% of total domestic production (27.2 lakh tonnes sold in FY24). Planned expansion includes a new 1,200 TPD (Tons Per Day) NPK plant at Thal expected to commence operations in FY28.

Raw Material Costs

Raw material costs are highly volatile; the trading portfolio was specifically impacted by high import prices and inadequate NBS (Nutrient Based Subsidy) rates in FY24, leading to a recovery in FY25 as prices stabilized.

Manufacturing Efficiency

Plants operate at optimum capacity; however, FY25 manufacturing profitability was restricted by planned and unplanned shutdowns which limited energy efficiency gains.

Logistics & Distribution

Not disclosed as a specific percentage of revenue, but the company utilizes a domestic network to distribute urea and NPK across India.

📈 Strategic Growth

Expected Growth Rate

Not disclosed

Growth Strategy

Growth is driven by a two-pronged strategy: 1) Capacity expansion via the INR 1,400 Cr NPK plant at Thal and the revival of the Talcher unit (JV) to increase production volumes. 2) Margin expansion through energy efficiency revamps in ammonia plants and increasing the share of high-margin industrial chemicals.

Products & Services

Urea, NPK (Complex Fertilizers), Methanol, Methylamines, Di-methyl Formamide, AN Melt, Nitric Acid, Ammonia, and traded DAP/MOP.

Brand Portfolio

Ujjwala (Urea), Suphala (Complex Fertilizers), Microla (Micronutrients), and Biola (Bio-fertilizers).

New Products/Services

Expansion of NPK capacity (1,200 TPD) and diversification into technical Ammonium Nitrate (AN) melt to serve industrial chemical demand.

Market Expansion

Focus on domestic market penetration and strengthening the presence in the industrial chemicals segment which currently contributes ~10% of turnover.

Market Share & Ranking

RCF accounts for approximately 8% of the total domestic urea production capacity in India.

Strategic Alliances

Talcher Fertilizers Limited (JV with Coal India, GAIL, and FCI) for coal-gasification based urea; FACT-RCF Building Products Limited (FRBL) (JV with FACT, currently under liquidation).

🌍 External Factors

Industry Trends

The industry is moving toward higher energy efficiency and 'One Nation One Fertilizer' policy. RCF is positioning itself by revamping old plants to meet tighter energy norms and expanding into non-urea fertilizers (NPK).

Competitive Landscape

Competes with other PSU and private fertilizer players like IFFCO, NFL, and Chambal Fertilisers, particularly in the NPK and industrial chemicals segments.

Competitive Moat

Strategic importance to the Government of India (75% stake) provides a massive moat in terms of financial flexibility and access to low-cost debt. Established manufacturing infrastructure and 8% market share in urea provide scale advantages.

Macro Economic Sensitivity

Highly sensitive to government fiscal policy; the FY26 subsidy budget of INR 1.69 lakh crore is a key determinant of liquidity and financial health.

Consumer Behavior

Shift toward balanced fertilization and micronutrients (Microla/Biola) to improve soil health, influencing RCF's product diversification.

Geopolitical Risks

Global supply chain disruptions affecting the availability and pricing of imported phosphoric acid and potash.

⚖️ Regulatory & Governance

Industry Regulations

Highly regulated by the Department of Fertilizers (DoF). Urea prices are fixed, and P&K fertilizers are governed by the Nutrient Based Subsidy (NBS) scheme. Energy consumption norms are strictly mandated.

Environmental Compliance

Continuous investment in ESG; completed upgrade of effluent treatment plant at Thal and ongoing energy saving projects to reduce greenhouse gas emissions.

Taxation Policy Impact

Standard corporate tax rates apply; however, the company receives government subsidies which are the primary revenue driver for the fertilizer segment.

Legal Contingencies

Pending financial impact of INR 218.46 Cr plus 6% interest p.a. following a Bombay High Court order in favor of Thermax Limited (dated December 2025).

⚠️ Risk Analysis

Key Uncertainties

1) Subsidy disbursement timing (impacts liquidity). 2) Project execution risk for the INR 3,000 Cr capex. 3) Volatility in industrial chemical prices (PBIT margin fluctuated from 27.5% to 12.5% to 21.7% over three years).

Geographic Concentration Risk

Manufacturing is concentrated in Maharashtra (Thal and Trombay units), making it susceptible to regional industrial policies or localized disruptions.