IPHL

IPHL reported a strong H1 FY26, with revenue from operations increasing by 17.14% year-on-year to ₹451 crores, up from ₹385 crores in H1 FY25. This growth was accompanied by a significant 40% jump in EBITDA and an almost 50% increase in PAT compared to the previous year's first half. The company expressed optimism that the current positive trend would continue, enabling them to achieve better financial results for the full financial year across both fertilizer and chemical segments.

The company provided an update on its Tamil Nadu project, which includes a sulfuric acid plant and a Labsa plant. The sulfuric acid plant, commissioned in July and August, has been operational for five months and is currently running at approximately 75% capacity utilization. Construction of the Labsa plant is almost complete, with commissioning expected by the last quarter of FY26 (Q4 FY26), and it is anticipated to contribute revenue in the current financial year.

The Dhule plant in Maharashtra, a purely fertilizer plant, has seen its construction timeline remain uncertain. Management prioritized the Tamil Nadu project, funded by IPO proceeds, and noted that past unfavorable government subsidy policies for the fertilizer sector had impacted the Dhule plant's progress. However, with government efforts to restore fertilizer subsidies, the outlook for the fertilizer industry is improving, and the company plans to focus on the Dhule plant once the Tamil Nadu Labsa plant is fully operational.

The company highlighted the competitive advantages of its integrated operations, particularly the captive production of sulfuric acid for the Labsa plant. This integration eliminates inward freight costs for sulfuric acid and allows for power generation, which will be utilized internally, contributing to improved profit margins. Management emphasized that this integrated approach, combined with extensive experience in both sulfuric acid and Labsa production, leads to efficient and cost-effective operations.

IPHL has provided a corporate guarantee of ₹105 crores for a related party project. Management expects this project to be completed in the next financial year (FY27), at which point the guarantee will be automatically released. Regarding its external credit rating, which expired in September 2024, the company stated it is under renewal and anticipates an improvement from its previous rating of BBB- with a stable outlook.

Management acknowledged the significant volatility in raw material prices, particularly for LAB (Linear Alkyl Benzene), crude oil, and sulfur. They noted that crude oil and sulfur prices are unpredictable, with sulfur prices changing every 15 days from refineries. This volatility makes it challenging to provide exact turnover projections for the Labsa plant, as revenue is heavily influenced by raw material costs, which are typically passed on to buyers.