Chambal Fertilizers & Chemicals Limited — Q1 FY26 earnings call

Call held 1 Aug 2025

Management summary

Chambal Fertilisers delivered a strong Q1 FY26 performance characterized by significant volume growth in non-urea segments and steady progress on its capital projects. While urea production faced a temporary setback due to a plant breakdown, the P&K and Crop Protection (CPC-SN) segments showed robust momentum. Management is pivotally focused on the upcoming TAN plant commercialization and expanding its presence in seeds and biologicals to diversify revenue streams.

Highlights

  • Consolidated PAT grew 23% YoY to ₹549 crore, while Standalone PAT rose 16% to ₹638 crore.

  • P&K fertilizer sales volumes surged 70% YoY to 4.21 lakh metric tons, driven by strategic sourcing.

  • CPC-SN business revenue reached ₹452 crore, a 32% YoY growth, with a contribution of ₹102 crore.

  • Technical Ammonium Nitrate (TAN) project is on track with ₹918 crore spent; commercial production expected mid-January 2026.

  • Urea production was lower at 8.54 lakh MT (vs 9.03 lakh MT YoY) due to a 24-25 day breakdown at Gadepan-II.

  • Subsidy receipts remain timely with outstanding subsidy at ₹1,326 crore as of June 30, 2025.

  • Net cash on the balance sheet stood at approximately ₹1,600 crore as of quarter-end.

Concerns

  • Tightening of Energy Efficiency Norms

Key financials

  1. Standalone Revenue ₹5,698 Cr
  2. Standalone EBITDA ₹929 Cr
  3. Consolidated PAT ₹549 Cr +23%YoY
  4. P&K Sales Volume 4.21 lakh mt +70%YoY
  5. CPC-SN Revenue ₹452 Cr +32%YoY

What they filed

Q1 FY27: revenue down 11.8%, net profit down 4.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue4,346 4,918 2,449 5,698 6,413 +48%5,898 +20%2,785 +14%5,027 −12%
EBITDA790 778 163 761 842 +7%821 +6%255 +56%826 +9%
Net profit536 534 130 549 649 +21%586 +10%169 +30%524 −5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Urea
    8.54 lakh mt Production Volume8.41 lakh mt Sales Volume
  • P&K Fertilisers
    4.21 lakh mt Sales Volume
  • CPC-SN
    ₹452 Cr Revenue₹102 Cr Contribution
  • Seeds & Biologicals
    ₹6 Cr Seeds Revenue₹29 Cr Biologicals Revenue

Guidance & targets

Revenue

  • CPC and SN Revenue Revenue · FY26 · High confidence ₹1,500 crore
    And as you achieved the revised FY26 target of Rs. 1,500 crore revenue in CPC and SN, so are we good in the run rate? ... Yes, we are.

    — Ashish Srivastava, VP Sales & Marketing

Capacity

  • TAN Commercial Production Start Capacity · Q4 FY26 · High confidence Mid-January 2026
    Trial production will commence early December or late November and we should be starting production by mid-January.

    — Abhay Baijal, Managing Director

  • IMACID Phosphoric Acid Capacity Capacity · Late 2026 / Early 2027 · Medium confidence 7 lakh tons

    From 5 lakh tons today

    The increase in capacity of Phosphoric Acid from 5 lakh tons to 7 lakh tons is under implementation... My information is it is late '26, maybe early '27, that kind of time.

    — Abhay Baijal, Managing Director

Capex

  • Total TAN Project Capex Capex · FY26 · High confidence ₹1,645 crore
    I think so total Capex that we are planning is Rs.1,645 crore, correct? ... Yes.

    — Abhay Baijal, Managing Director

  • Normal Replacement Capex Capex · FY26 · Medium confidence ₹250 crore
    Normal CAPEX plans are there. It is about Rs. 250 crore worth of projects we have.

    — Anuj Jain, CFO

Risks & concerns

  • Tightening of Energy Efficiency Norms

    high

    Government reduction in energy norms creates a negative impact on margins, requiring continuous efficiency projects to maintain the gap.

    Both acknowledged

  • Plant Operational Reliability

    medium

    Gadepan-II breakdown resulted in a loss of ~55,000 tons of urea production and ₹16-17 crore in contribution.

    Management acknowledged

  • TAN Market Supply Surplus

    medium

    Management expects a short-term supply surplus in the TAN market but remains optimistic about long-term demand from the coal mining sector.

    Management acknowledged

Areas of evasion (2)

  • Specific names of research partners for the seed and CPC business.
  • Internal estimations of the impact of post-2027 urea policy changes.

Q&A highlights

2 direct
Materiality of Gadepan-II Plant Shutdown Partial
20 days on 92 days will be close to 20%... But even in terms of the turnover of the total Company... it is about of the order of 2% to 3%.

The analyst challenged management on why a 20-day shutdown (impacting 20% of urea volume) wasn't reported to exchanges; management argued it wasn't material to total company turnover.

Asked by Prashant Kumar Hazariwala

Impact of Energy Norm Reductions Direct
Energy norm, I think the government has informally told us and the effect of that, is already encapsulated in current results... It is low double-digits per quarter.

Reveals a regulatory headwind where the government has tightened energy efficiency norms, reducing the subsidy margin, though management claims it's already factored in.

Asked by Prashant Biyani

State Incentives for TAN Project Direct
It is about for 10 years, let us say, about 2% of the cost per year... On that hard project cost of Rs. 1,100 crore... It adds up to 20%.

Clarifies the financial benefit from the Rajasthan Investment Promotion Scheme (RIPS), providing a predictable 10-year cash inflow post-commissioning.

Asked by Falguni Dutta

2 min read 5 chapters

Detailed narrative

P&K Segment Drives Non-Urea Growth

The P&K fertilizer segment was a standout performer in Q1 FY26, with sales volumes growing 70% YoY to 4.21 lakh metric tons. This growth was supported by a strategic sourcing strategy and an enabling subsidy framework. Management noted that DAP and TSP volumes are trending back toward historical levels of over 1 million tons annually as government pricing approaches have moderated price shocks.

CPC-SN and New Business Verticals Gain Momentum

The Crop Protection Chemicals and Specialty Nutrients (CPC-SN) business continued its strong trajectory with 32% revenue growth, reaching ₹452 crore. The company introduced 13 new products during the quarter, expanding its portfolio to 73 products. Additionally, Chambal entered the seed business (maize and bajra), contributing ₹6 crore to the top line, and saw an 80% sequential revenue jump in its biologicals segment to ₹29 crore.

TAN Project Execution and Financial Incentives

The Technical Ammonium Nitrate (TAN) project is nearing completion with ₹918 crore of the ₹1,645 crore total capex already spent. Trial production is slated for late 2025, with full commercial operations starting in mid-January 2026. The project is eligible for Rajasthan state incentives (RIPS), which will provide a refund of approximately 2% of the ₹1,100 crore hard project cost annually for 10 years.

Urea Operations and Regulatory Headwinds

Urea production was impacted by a breakdown at the Gadepan-II plant, leading to a 24-25 day shutdown in May and a production loss of ~55,000 tons. Furthermore, management acknowledged a reduction in government energy norms, which creates a 'low double-digit' crore impact per quarter. To counter this, the company has a pipeline of energy-efficiency projects stretching through FY27 to maintain its status as an efficient producer.

Strategic Joint Venture Expansion

The company's joint venture, IMACID, is performing well and is currently undergoing a capacity expansion for Phosphoric Acid from 5 lakh to 7 lakh tons. This expansion, costing approximately $40-$45 million for the acid plant and $120-$130 million for a subsequent sulfuric acid plant, is expected to be operational by late 2026 or early 2027, further optimizing global sourcing for complex fertilizers.

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