Chambal Fertilizers & Chemicals Limited — Q4 FY26 earnings call

Call held 15 May 2026

Management summary

Chambal Fertilisers and Chemicals Limited reported a robust Q4 and FY26, marked by strong revenue and PAT growth, particularly in the Complex Fertilizer segment. The company made significant progress on its TAN project and expanded its product portfolio. However, challenges included a decline in Urea segment revenue, increased receivables, and volatility in raw material prices due to geopolitical tensions and import dependence.

Highlights

  • Standalone revenue operations for FY26 increased 25% year-on-year to ₹20,794 crores.

  • Standalone Profit after tax for FY26 grew 18% year-on-year to ₹1,950 crores.

  • Q4 FY26 EBITDA increased 56% year-on-year to ₹255 crores, with EBITDA margin at 9.16%.

  • Complex Fertilizer segment revenues for FY26 increased sharply by 175% year-on-year to ₹7,025 crores, driven by strong growth in DAP, TSP, and NPK fertilizers.

  • The Technical Ammonium Nitrate (TAN) project achieved significant progress, entering the commissioning phase with a capacity of 240,000 metric tons per annum.

Concerns

  • Urea segment revenue for FY26 declined 5% year-on-year to ₹12,566 crores, with sales volumes down 1.84% to 34.06 lakh metric tons.

  • Q4 FY26 revenues for the CPC Speciality Nutrients and Seed segment lowered by 21% year-on-year.

  • Receivables increased significantly from ₹367 crores to ₹2,075 crores, primarily due to the government's subsidy mechanism and cash flow mismatches.

  • Ammonia prices increased sharply to $850-$900 per ton and Sulphur prices to $900-$950 per ton in Q4 FY26, pressuring industry margins.

  • Availability in the phosphatic segment is likely to be constrained due to logistics issues (28-29 ships stuck in Hormuz).

Key financials

3 periods

Headline

  • Total Receivables (Mar 31, 2026)
    ₹2,075 Cr

Q4 FY26

  • Revenue
    ₹2,785 Cr
    YoY +14%
  • EBITDA
    ₹255 Cr
    YoY +56%
  • PAT
    ₹145 Cr
    YoY +46%

FY26

  • Revenue
    ₹20,794 Cr
    YoY +25%
  • EBITDA
    ₹2,679 Cr
    YoY +8%
  • EBITDA Margin
    12.9%
  • PAT
    ₹1,950 Cr
    YoY +18%
  • PAT Margin
    9.4%

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

Share of FY26 Revenue
₹20,794 Cr Total
  • Urea ₹12,566 Cr 60.4%
  • Complex Fertilizer ₹7,025 Cr 33.8%
  • CPC Speciality Nutrients and Seed ₹1,203 Cr 5.8%

Capital allocation

high confidence
  • Capex ₹500 Cr
    • Balance expense on TAN project
    • Routine capex (replacement, efficient equipment like steam turbines, CO2 compressors) ₹170 Cr
    • New Urea plant (brownfield, 1.3-1.4 million tons capacity) ₹9,500 Cr
    Finally, let me walk you through the details of the financial performance for the period under review. On a standalone basis, the 4th Quarter Financial Year, 2026, revenue from operations grew 14% year-on-year to about Rs. 2,785 crores. EBITDA for the quarter, Rs. 255 crores, up 56% year-on-year with EBITDA margin at 9.16%. Profit after tax was INR 145 crores, up 46% year-on-year with PAT margin of 5.22%.
  • Debt Net ₹0 Cr
    I think at the end of the year we were balanced with both, I think it was 0-0 almost, net cash was whatever cash on the books was more or less countered by the amount of short-term borrowing. Somebody asked that question in the very beginning. But this is a fluctuating number. Once our subsidies get released in the first quarter and so on, so this will go down. And I am sure we are already surplus, as Anuj informs me, we are already surplus.
  • Dividend ₹6/share (final)
    Board of Directors has recommended a final dividend of Rs. INR 6 per share, totaling to Rs. 11 per equity share for FY '26.
  • M&A TERI Joint venture · Signed

    Established CFCL - TERI Centre of Excellence for Advanced and Sustainable Agricultural Solutions, focusing on R&D of next generation agricultural technologies.

    Additionally, we partnered with TERI to establish the CFCL - TERI Centre of Excellence for Advanced and Sustainable Agricultural Solutions, which will focus on research and development of next generation agricultural technologies.
  • M&A Nutrien Joint venture · Signed

    Long-term agreements in place to bring specialized nutrient use efficiency products to India, addressing the $1 billion market opportunity.

    So, I would tell you that Nutrien are already more or less done in terms of engagement. We have got long-term agreements more or less in place. So, we will be starting with their products very soon.
  • Liquidity Liquidity disclosed Company experienced short-term cash flow mismatches leading to increased short-term borrowing, but expects these to even out as subsidies are released.
    These are some short-term, as far as short-term borrowings are concerned, these are small cash flow mismatches which happen, but they will be eventually evened out during the course of the year. The company is more or less on a stable nod as far as finances are concerned, as you know.

Guidance & targets

Product Development

  • New crop protection products Product Development · FY27 · High confidence 14
    We also continued to build a healthy innovation pipeline with 14 new crop protection products and one speciality nutrient product planned for FY '27.

    — Abhay Baijal

  • New specialty nutrient product Product Development · FY27 · High confidence 1

    — Abhay Baijal

Capacity Expansion

  • IMACID P2O5 production capacity Capacity Expansion · December 2026 · High confidence 7 lakh metric tons

    From 5 lakh metric tons today

    The increase in P2O5 production capacity from 5 lakh metric tons to 7 lakh metric tons is expected to be implemented in December 26.

    — Abhay Baijal

  • IMACID Sulphuric acid capacity increase Capacity Expansion · FY27 (a year ahead) · High confidence Increased capacity
    Further, Sulphuric acid capacity is also being increased, which is expected to be implemented a year ahead in FY '27.

    — Abhay Baijal

TAN Production

  • TAN capacity utilization TAN Production · within a year · High confidence 75-80%
    Yes, definitely that Mr. Narinder Goyal has promised me that by all means he will reach 75%-80%. That is his commitment to me. So, it is his commitment to me and I am sure that he will meet that commitment.

    — Abhay Baijal

  • TAN production volume TAN Production · 9 months (conservative) · Medium confidence 1,60,000 - 1,70,000 tons
    So, let's assume that we have got about nine months production to be very conservative. So, we are saying that we have roughly about 1,60,000 - 1,70,000 tons of production would be possible.

    — Abhay Baijal

TAN Revenue

  • TAN revenue per ton TAN Revenue · Normal budgeted · Medium confidence ₹37,000 - ₹38,000
    A budgeted number normally for this is about Rs. 37,000, Rs. 38,000 a ton. That is the normal number that you might think about.

    — Abhay Baijal

Urea Sales Volume

  • Urea sales volume Urea Sales Volume · FY27 · Medium confidence Exceed last year's 34.06 lakh MT

    From 34.06 lakh metric tons today

    We are confident that we will do better than last year, but whether we will touch 35, is a touch and go here and there, but we will definitely exceed what we did this year.

    — Abhay Baijal

Market Opportunity

  • Specialized nutrient use efficiency products market in India Market Opportunity · next 5 years · High confidence $1 billion
    Well, when we were talking to Nutrien, they said that, look, what is the total market in India? We indicated in the region of $1 billion by the next 5 years.

    — Abhay Baijal

What to watch in Q1 FY27

TAN project commissioning and capacity ramp-up

within a year
Current Commissioning phase, dry run for nitric acid plant commenced
Target Achieve 75-80% capacity utilization

Why it matters

Successful commissioning and ramp-up of the TAN project is crucial for new revenue streams and strategic diversification.

Yes, definitely that Mr. Narinder Goyal has promised me that by all means he will reach 75%-80%. That is his commitment to me. So, it is his commitment to me and I am sure that he will meet that commitment.

Risks & concerns

  • Geopolitical tensions and import dependence for raw materials

    high

    Geopolitical tensions in West Asia led to sharp volatility in global fertilizer and energy markets, impacting prices of LNG, ammonia, and Sulphur, for which India is import-dependent.

    Management acknowledged

  • High raw material costs and rupee depreciation

    high

    Elevated LNG prices and increased ammonia/sulphur costs, coupled with rupee depreciation, put pressure on industry margins despite NBS subsidy rate increases.

    Management acknowledged

  • Increased receivables due to subsidy mechanism

    medium

    Receivables jumped to ₹2,075 crores due to the government's 'escalation and de-escalation' process for gas prices, leading to cash flow mismatches.

    Management acknowledged

  • Logistics constraints impacting phosphatic segment availability

    medium

    Availability in the phosphatic segment is likely to be constrained due to 28-29 ships being stuck in Hormuz, impacting supply.

    Management acknowledged

  • Regulatory and pricing issues in phosphatic fertilizer business

    medium

    Issues related to GST and controlled pricing make the phosphatic sector problematic for new investments, requiring resolution before further expansion.

    Management acknowledged

Q&A highlights

4 direct
Gas costs for Q1 FY27 Direct
They will be around the same number. We are still in the midst of the quarter. Currently, what I understand, it is USD 18 plus, USD 18.5 plus. It may be around the same number.

Provides insight into raw material cost outlook for the current quarter, impacting margins.

Asked by Aman Kothari

Jump in receivables and short-term borrowing Partial
As far as the increase in receivables are concerned, we have a process called escalation and de-escalation. Sometimes what happens is that the government has compensated us on a base of a higher gas number. So, that continues. When we are actually consuming at a lower cost, then you tend to accumulate cash because you get more subsidies than what you would be actually spending.

Highlights a significant increase in receivables to ₹2,075 crores and explains the mechanism behind it, indicating potential cash flow mismatches.

Asked by Aman Kothari

TAN capacity utilization and market outlook Direct
Yes, definitely that Mr. Narinder Goyal has promised me that by all means he will reach 75%-80%. That is his commitment to me. So, it is his commitment to me and I am sure that he will meet that commitment.

Confirms the target capacity utilization for the newly commissioned TAN plant and indicates a strong market demand.

Asked by Aman Kothari

New Capex plans (Urea plant, TAN expansion) Direct
The only guidance I would give is that the government, looking to the situation that is there, are very, very serious in terms of pushing out a policy to attract investment. And for our part, we are very ready in the sense that we have land, we have environmental clearance. I am happy to report to you on that issue.

Reveals the company's readiness and the government's push for a new Urea plant, outlining a significant future investment.

Asked by Aman Kothari

Phosphatic fertilizer business expansion (issues: GST, pricing) Partial
No, no. DAP pricing is definitely an issue, but more than that, our issues with respect to GST, for instance, in this sector, which is quite a problematic area which they have to sort out. We have been at it for quite some time with them.

Identifies key regulatory and pricing challenges hindering expansion in the phosphatic fertilizer segment.

Asked by Aman Kothari

Automotive-grade Urea production Partial
No, it is definitely possible with our plants, at least one stream or two streams we can take out to do that. And we are, in fact, having some very preliminary discussions on this issue and we are telling the government also that you should allow us to do this technical-grade Urea for automotive purpose.

Indicates a potential new product avenue for the company, contingent on government policy and approvals.

Asked by Prashant

G-3 profitability next calendar year Partial
What I can say is that, what I said last time, that the government are seized of the matter, the file has started. We have had one or two preliminary discussions. Too premature to give you any guidance on this, but it is moving. That much I can say, because we are to be in this regime from December 1st onwards.

Suggests ongoing discussions with the government regarding G-3 profitability, which could impact future earnings.

Asked by Prashant

CPC and biologic segment strategy, Nutrien partnership Direct
So, I would tell you that Nutrien are already more or less done in terms of engagement. We have got long-term agreements more or less in place. So, we will be starting with their products very soon.

Highlights a strategic partnership with Nutrien to introduce specialized nutrient use efficiency products, targeting a significant market opportunity.

Asked by Aman Kothari

2 min read 5 chapters

Detailed narrative

Overall Financial Performance and Outlook

Chambal Fertilisers and Chemicals Limited reported a strong financial performance for FY26, with standalone revenue operations growing 25% YoY to ₹20,794 crores and Profit After Tax increasing 18% YoY to ₹1,950 crores. The EBITDA margin for FY26 stood at 12.88%. For Q4 FY26, revenue from operations grew 14% YoY to ₹2,785 crores, and EBITDA saw a significant 56% YoY increase to ₹255 crores, with an EBITDA margin of 9.16%. The company's net cash position was almost balanced at year-end, despite a temporary increase in short-term borrowing due to cash flow mismatches.

Segmental Performance Highlights

The Complex Fertilizer segment was a key growth driver, with revenues surging 175% YoY to ₹7,025 crores in FY26 and sales volumes increasing 118.26% to 12.31 lakh metric tons. The Urea segment, however, saw a 5% YoY decline in revenue to ₹12,566 crores in FY26, with sales volumes slightly down by 1.84% to 34.06 lakh metric tons, partly due to an unscheduled shutdown in Q1. The CPC Speciality Nutrients and Seed segment demonstrated robust growth in FY26, with revenues up 30% YoY to ₹1,203 crores and healthy EBIT margins of 23.5%.

Strategic Initiatives and Capacity Expansion

The Technical Ammonium Nitrate (TAN) project, with a capacity of 240,000 metric tons per annum, has entered its commissioning phase, with dry runs for the nitric acid plant already commenced. Management expects 75-80% capacity utilization within a year, projecting 1,60,000-1,70,000 tons of production and revenue of ₹37,000-₹38,000 per ton. The IMACID JV is also expanding its P2O5 production capacity from 5 lakh to 7 lakh metric tons by December 2026, and Sulphuric acid capacity is expected to increase a year ahead in FY27. The company also launched 17 new products in FY26 and plans 14 new crop protection and one specialty nutrient product for FY27.

Raw Material and Subsidy Dynamics

The company faced challenges from geopolitical tensions in West Asia, leading to significant volatility in global fertilizer and energy markets. Ammonia prices increased to $850-$900 per ton and Sulphur prices to $900-$950 per ton in Q4 FY26. While the government raised NBS subsidy rates by 10%, industry margins remained under pressure due to high raw material costs and rupee depreciation. Receivables increased to ₹2,075 crores due to the government's provisional pricing mechanism for gas, which management is addressing for interim relief.

Future Growth and Capital Allocation Plans

Chambal is actively pursuing new growth avenues, including a potential new Urea plant with an estimated cost of ₹9,500-₹10,000 crores for 1.3-1.4 million tons capacity, for which land and environmental clearances are secured. The company is also exploring expansion in the phosphatic fertilizer business, potentially through a JV outside India, while addressing domestic challenges like GST and controlled pricing. A partnership with Nutrien is in place to introduce specialized nutrient use efficiency products, targeting a $1 billion market in India over the next five years. The Board recommended a final dividend of ₹6 per share, bringing the total FY26 dividend to ₹11 per share.

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