DEEPAKFERTNSEQ1 FY 2026July 30, 2025

Deepak Fertilizers and Petrochemicals Corporation Limited

8,308words
147turns
10analyst exchanges
7executives
Management on call
Shailesh C. Mehta
CHAIRMAN & MANAGING DIRECTOR
Subhash Anand
PRESIDENT & CHIEF FINANCIAL OFFICER
Tarun Sinha
PRESIDENT (TECHNICAL
Suparas Jain
EXECUTIVE VICE PRESIDENT
Debasish Kedia
SENIOR GENERAL MANAGER
Ranjit Cirumalla
IIFL CAPITAL SERVICES LIMITED
S.C. Mehta
Chairman and Managing Director, Mr.
Key numbers — 40 extracted
17%
t at the outset, I am again happy to share that in the quarter that we just closed, we have had a 17% improvement in the top line and a 22% jump in the bottom line over the same quarter last year. Th
22%
hare that in the quarter that we just closed, we have had a 17% improvement in the top line and a 22% jump in the bottom line over the same quarter last year. The net debt reduced by over Rs. 225 cro
Rs. 225 crore
e and a 22% jump in the bottom line over the same quarter last year. The net debt reduced by over Rs. 225 crores, resulting into a net debt-to-EBITDA ratio improvement from 1.72x to the 1.5x, despite the CAPEX
1.72x
t debt reduced by over Rs. 225 crores, resulting into a net debt-to-EBITDA ratio improvement from 1.72x to the 1.5x, despite the CAPEX cycle still going on. Also, our journey from commodity to specialt
1.5x
d by over Rs. 225 crores, resulting into a net debt-to-EBITDA ratio improvement from 1.72x to the 1.5x, despite the CAPEX cycle still going on. Also, our journey from commodity to specialty continues
25%
EX cycle still going on. Also, our journey from commodity to specialty continues where now almost 25% of our top line is emerging from the shift. And of course, the biggest contributor has been the c
90%
As regards the two major ongoing projects, Gopalpur, the TAN project, there we are seeing almost 90% of the total plant and machinery is already ordered, or I would say 100% of the tagged equipment,
100%
here we are seeing almost 90% of the total plant and machinery is already ordered, or I would say 100% of the tagged equipment, meaning equipment, machinery, control valves, panels, packages are all
63%
uld be balanced, which is normal in any project. And as far as the Dahej acid project goes, while 63% of the total plant and machinery is already ordered, 100% of the tagged one is already ordered.
rs,
s. And in comparison to any kind of competition, we have; number one, maximum proximity to customers, and in some of the products, we are on both the coasts. So that gives us the lowest freight delive
75%
few interesting insights. Now, as many of you may know, ammonia contributes or constitutes almost 75% to 80% of our key chemical variable cost of production, 75% to 80%. Now ammonia has seen a volati
80%
eresting insights. Now, as many of you may know, ammonia contributes or constitutes almost 75% to 80% of our key chemical variable cost of production, 75% to 80%. Now ammonia has seen a volatility in
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Guidance — 20 items
Sailesh Mehta
opening
“As regards the two major ongoing projects, Gopalpur, the TAN project, there we are seeing almost 90% of the total plant and machinery is already ordered, or I would say 100% of the tagged equipment, meaning equipment, machinery, control valves, panels, packages are all ordered.”
Sailesh Mehta
opening
“Only some of the bulk items now would be balanced, which is normal in any project.”
Sailesh Mehta
opening
“And as far as the Dahej acid project goes, while 63% of the total plant and machinery is already ordered, 100% of the tagged one is already ordered.”
Sailesh Mehta
opening
“All these three strategies get validated that we are in the right direction and that it will deliver good shareholder value quarter-on-quarter or year-on-year.”
Talking about outlook for our CNB business
opening
“With a favorable monsoon, increasing adoptions of high-value solutions like Croptek and Solutek, and a sharper marketing, we anticipate strong momentum for kharif 2025 season.”
In terms of outlook
opening
“We expect Q2 to be seasonally muted due to monsoon.”
On our projects of Dahej and Gopalpur
opening
“We continue to advance our strategic CAPEX project.”
On our projects of Dahej and Gopalpur
opening
“4,661 crores across Dahej and Gopalpur project.”
On our projects of Dahej and Gopalpur
opening
“Gopalpur TAN project is at 80% complete stage and Dahej nitric acid project is at 57% complete.”
On our projects of Dahej and Gopalpur
opening
“We are firmly on track to commence commercial operation by end of FY '26 and with tight control on timeliness and execution.”
Risks & concerns — 11 flagged
Second strategy that we need to look at, backward integration as a risk mitigator.
— Sailesh Mehta
While we foresee some pricing pressure in IPA and nitric acid due to seasonal and inventory led dynamics, our growing specialty portfolio and targeted customer segmentation efforts position us to weather these short-term challenges effectively.
— On outlook
One is, given that you have a larger share of the higher margin business where you are seeing margins under pressure now if you go in the first quarter, so how do you see the margins in the chemical segment moving in the next one, two years?
— S. Ramesh
Because Coal India is talking about backward integrated capacity addition by '29, and that does raise some concern about the Coal India demand for the entire industry.
— S. Ramesh
Demand supply, currently, I do not see there is much challenge on demand supply of ammonia.
— Subhash Anand
So we will not be seeing that's a concern for us at this point of time.
— Subhash Anand
Secondly, this quarter, the nitric acid prices were in pressure despite that we were able to achieve a good number over there.
— Deepak Poddar
Nitic acid is not under pressure, nitric acid pricing.
— Subhash Anand
It was IPA pricing which is more in pressure actually if I talk about.
— Subhash Anand
H2 was very good for IPA and after H2, every quarter-on-quarter we are seeing a IPA pricing getting further soften.
— Subhash Anand
No, ammonia will be imported ammonia for Gopalpur and we are already in process of tying it up because ammonia, as I spoke earlier, ammonia quantity is not a challenge.
— Subhash Anand
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Q&A — 10 exchanges
Q
Sir, my first question is on the TAN value addition business. How meaningful is the TAN value addition business for us? Where do we see ourselves in the next two to three years with this value addition services?
Subhash Anand
Okay. Currently as we just informed, the 16% of our total revenue comes from B2C segment. In terms of how things are going to span out, Tarun, would you like to add? Sure. So, thank you for your question. In terms of value-adding business for the technical ammonium nitrate portfolio, as we have been talking about in the previous investor calls as well, we pursue a model which is called as total cost of operations model, which is really the value for the end consumers. And these end consumers being the mine owners, the mine operators, mining contractors; and in the infrastructure sector, differ
Q
Yes, hi. Thank you very much. Well, my question is related to the export quota of TAN, which was recently increased to 50,000 metric tonnes. So what was the earlier quota? And I mean, were we able to utilize the earlier quota in full?
Tarun Sinha
Yes. Thank you. If I can take that question, Subhash, with your permission. So, a great question again. So the previous quota was 2-0, 20,000 tonnes, which was valid till December 2024, that was fully exhausted. That is the first part of your question. And the new export quota which we have got from Government of India, which is 5-0, 50,000 tonnes, it is per financial year at this stage. And once we start delivering those numbers, we are reasonably confident that eventually Government of India will remove this quota system completely as far as the exports of ammonium nitrate is concerned. Okay
Q
So if you are talking about your Australian subsidiary, can you share what is the investment and the cost acquired just additional 20% and what is the size of the company in terms of revenue and profits?
Subhash Anand
The last year if we talk about the total revenues of the company is around Rs. 600 crores approximate. And how much was the profit last year EBIT or EBITDA? See, we do not in fact share profitability specific, so you need to wait for that number. Yeah, and in terms of acquisition, the total entity value at which we acquired was approximate about -- I think about Rs. 80-odd crores, somewhere in that range. That 15%. Yes, we will check back and get back to you with that. But that's the sort of magnitude. 20% at Rs. 80 crores, right, so Rs. 400 crores. Around that. Yes, do not hold me to that num
Q
Yes, thank you. A few questions. One, what was the CAPEX completed in rupees crores for both the projects? And second is, what is your view on the outlook of ammonia demand supply on the global situation? I understand there's an Indian market, but as well as global how you see the panning out of that? And thirdly, on the fertilizer, some specialty fertilizer has been export custom China. Any impact on Deepak Fertilisers because of that?
Subhash Anand
Sorry, can you repeat the question? CAPEX of each, how much amount has been spent till date on both the project? Ammonia outlook that you see globally and specialty fertilizers curbs of China, how can it positively or negatively impact Deepak? Okay. Ammonia, you say ammonia supply at this point of time, there is no shortage of ammonia at this point of time, I call it that way, when it comes to overall demand supply of ammonia is concerned. Ammonia prices are short. We continue to maintain that at this point of time if somebody is looking ammonia prices, the ammonia price is running at almost a
Q
Hello. Thank you for taking my questions. So sir, when we created the new plant and going to start in Q4 FY '26, are we expecting some kind of loss in the quarter or two due to low volumes?
Subhash Anand
No, no, we do not expect loss in that quarter because it only expected towards end of FY '26. So nothing specific impact is visible for that quarter. The only thing is, yes, it will have a low capacity utilization in the initial time, but that will be for a couple of quarters is expected. Okay. And sir, what would be the beginning point for the move about the plant? And my second question is, there used to be exclusive TAN export from Russia, so are we seeing any of that in this scenario? Breakeven is not a question in terms of these projects are concerned, because the kind of a margin this pr
Q
The question is while the crop protection segment did pretty well in --
Subhash Anand
No, again your voice is bad. Not able to hear.
Q
Hello. Good afternoon. This quarter we had a really good margin improvement Q-o-Q, so do we expect our EBITDA growing from quarter-to-quarter or will it stay in this range for the rest of the year?
Subhash Anand
What's the question in fact? Your question is not clear, can you repeat the question? Yes, I was asking on the EBITDA margin is 19.3%. Are we going to grow quarter-to-quarter on these, or are we going to remain stable in this range for the rest of the year? No, in fact if you see our last few quarters, now we are in a range. We are currently between 18% to 20% range, because our business is a mix of three businesses and each business has their own profitability and the seasonality. So it moves within the quarter depending on which business is contributing more. But we are confident we will be
Q
Hello. Sir, I would like to congratulate the team first for the excellent set of numbers. My question is on our Gopalpur plant. So can you give me a ballpark figure that what kind of revenues would be achieved by next year on 70% or 80% utilization as you said?
Subhash Anand
No, just simple, I just spoke about the capacity addition is around 3,80,000. You take 70% capacity utilization and you have per tonne pricing we publish every quarter. So a simple math can help everybody. Yes, I understand. Secondly, this quarter, the nitric acid prices were in pressure despite that we were able to achieve a good number over there. Do you see any growth from nitric acid prices in a few quarters or will it remain stable? What's your view on that? Nitic acid is not under pressure, nitric acid pricing. It was IPA pricing which is more in pressure actually if I talk about. And we
Q
Yes. Thank you for the opportunity. Sir, my first question is, is there any progress on the IPA that we were creating for semiconductors?
Subhash Anand
Not right now. We are still in our, I would say, drawing board and trying to evaluate various options, what is the right way for us to go. So, you need to wait for some more time till we make some concrete plan and come back and share with you. Sure, sir. Sir, second thing I wanted to know, we have planned to procure almost 25 Btu annually. Will that suffice the requirement of the ammonia plant that we have on the West Coast, 629,000 capacity? Okay. You are talking about ammonia supply, right? Yes. Or natural gas? Yes. The natural gas contract what we have is enough or more than enough what we
Q
Thanks, everyone, and thank you once again for joining us for Deepak Fertilisers and Petrochemicals Corporation Limited Q1 FY '26 Earnings Call. We look forward to engaging with you further in the coming quarters ahead. Thanks, everyone.
Management
Speaking time
Subhash Anand
53
Tarun Sinha
15
Moderator
12
S. Ramesh
11
Niraj Mansingka
9
Chirag Maroo
9
Maitri Shah
6
Yash Gupta
5
Adarsh Jain
5
Shubam Dashmana
4
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Opening remarks
Ranjit Cirumalla
Thank you, Preet. Good evening. Thank you for joining us on the Deepak Fertilisers and Petrochemicals Corporation Limited Q1 FY '26 Earnings Conference Call. From the company, we have with us Mr. S.C. Mehta – Chairman and Managing Director, Mr. Subhash Anand – President and Chief Financial Officer, Mr. Tarun Sinha – President (Technical Ammonium Nitrate), Mr. Suparas Jain – Executive Vice President (Corporate Finance), and Mr. Debasish Kedia – Senior General Manager (Corporate Finance). We would like to begin the call with a brief opening remarks from the management, following which we will have the forum open for a Q&A session. I would now like to invite Mr. S.C. Mehta, Chairman and Managing Director, to make the initial remarks. Thank you, and over to you, sir.
Sailesh Mehta
Yes. Thank you. So, a very warm welcome to all of you once again. And I hope you had a chance to review the Results that we have uploaded on the website and stock exchange. But at the outset, I am again happy to share that in the quarter that we just closed, we have had a 17% improvement in the top line and a 22% jump in the bottom line over the same quarter last year. The net debt reduced by over Rs. 225 crores, resulting into a net debt-to-EBITDA ratio improvement from 1.72x to the 1.5x, despite the CAPEX cycle still going on. Also, our journey from commodity to specialty continues where now almost 25% of our top line is emerging from the shift. And of course, the biggest contributor has been the crop nutrition business, where we are seeing an excellent traction. As regards the two major ongoing projects, Gopalpur, the TAN project, there we are seeing almost 90% of the total plant and machinery is already ordered, or I would say 100% of the tagged equipment, meaning equipment, machin
Subhash Anand
Thank you, Mr. Mehta. And good afternoon, everyone. Thank you, all of you joining us today to discuss the financials and operational performance of Deepak Fertilisers and Petrochemicals Corporation Limited for Q1 FY '26. We are pleased to report a strong start to the fiscal year marked by disciplined execution, improving operational efficiency and a healthy financial performance. Our strategic priorities are translating into tangible progress and we continue to strengthen our foundations for long- term sustainable growth. Let me now take you through the key financial highlights for the quarter: Operational revenue stood at Rs. 2,659 crores, a robust 17% increase Y-o-Y, driven by broad- based growth across segment. Notably, our differentiated specialty product portfolio in crop nutrition business contributed 45% of revenue and the B2C segment in TAN accounted for 16%, underscoring the success of our market focus approach. On EBITDA, operating EBITDA reached Rs. 513 crores, up 10% Y-o-Y
On profitability
The net profit grew 22% Y-o-Y to Rs. 244 crores, with PAT margin of 9.1%. While the PAT declined sequentially 12%, but that was due to Rs. 37 crores after-tax reversal booked in Q4 of FY '25. If we adjust to that, the PAT is largely flat and that reinforces our underlying earnings spend.
Coming on segmental performance
Fertilizer segment delivers stellar Y-o-Y growth of 125%, driven by higher value-added products and favorable market dynamics. On the chemical front side, the profit declined 9% Y-o-Y due to pricing softness in IPA and ammonia. The rest two verticals has shown improvement or almost at a similar level of profitability.
On balance sheet and CAPEX
We invested Rs. 377 crores in CAPEX during this quarter. We have successfully reduced the net debt from Rs. 3,305 crores to Rs. 3,078 crores. Our net debt-to-EBITDA ratio improved to 1.5x from 1.72x in March '25. The net debt-to-equity remain comfortable at 0.43x. Let me share one of the legal update which happened just couple of days back: In our Mahadhan Agritech Limited, we received a favorable ITAT orders ruling for assessment year 2016-'17 to 2021. The ITAT deleted all additions made by the income tax department, eliminating tax demand totaling Rs. 581 crores. Corresponding penalty order of Rs. 479 crores are expected to be withdrawn, providing significant regulatory clarity.
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