Indian Phosphate Ltd — Q2 FY26 earnings call

Call held 6 Dec 2025

Management summary

IPHL reported strong H1 FY26 results with revenue up 17.14% to ₹451 crores, EBITDA up 40%, and PAT up nearly 50%. The Tamil Nadu sulfuric acid plant is operating at 75% capacity, and the Labsa plant is nearing commissioning by Q4 FY26. However, the Dhule plant's timeline remains uncertain due to past policy issues and project prioritization, and a ₹105 crore corporate guarantee for a related party project is expected to be released in FY27.

Highlights

  • H1 FY26 Revenue from operations increased by 17.14% YoY to ₹451 crores (from ₹385 crores in H1 FY25).

  • EBITDA for H1 FY26 jumped by 40% YoY.

  • PAT for H1 FY26 increased by almost 50% YoY.

  • Sulfuric acid plant is operational with 75% capacity utilization.

  • Labsa plant construction is almost complete and expected to be commissioned by Q4 FY26.

Concerns

  • Dhule plant (Maharashtra) timeline is uncertain due to previous unfavorable fertilizer policies and current focus on the Tamil Nadu project.

  • A corporate guarantee of ₹105 crores has been provided for a related party project, with release expected in FY27.

  • Sulfuric acid plant commissioning faced delays due to regulatory approvals (Consent to Operate).

Key financials

  1. Revenue ₹451 Cr +17.1%YoY
  2. EBITDA Growth 40% +40%YoY
  3. PAT Growth 50% +50%YoY

What they filed

Q4 FY26: revenue up 35.5%, net profit up 1200.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue428 428 452 499 580 +36%
EBITDA7 7 12 19 25 +257%
Net profit1 1 7 10 13 +1200%
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.

Capital allocation

high confidence
  • Debt Debt disclosed
    We are utilizing only working capital debt. There is no long term debt on the books of the accounts that we have checked.

Guidance & targets

Capacity

  • Labsa Plant Commissioning Capacity · Q4 FY26 · High confidence Operational
    Labsa plant is also just about to get Commission which we will in due course we will update on NSC also. The construction is almost complete and we are taking certain trials and some assessment including the statutory requirements. So shortly that plant will also be commissioned and will be ready for operation lapsa plant. So then. Both plant are integrated. Sulfuric acid goes into production of Labsa. So both the plant hopefully we expect maybe the beginning of next quarter that is the last quarter of 2526.

    — cs india indianphosphate

Revenue

  • Labsa Plant Revenue Contribution Revenue · FY26 · High confidence Contribute revenue
    We hope that Labsa plan will be operational and the Labsa plan will also punch the revenue in the current financial year.

    — cs india indianphosphate

Debt

  • Corporate Guarantee Release Debt · FY27 · High confidence Released
    Yes, hopefully your project will extend guarantee that project is expected to be completed in next financial year. So we hope that once that project is operational, this bank guarantee will be automatically released.

    — cs india indianphosphate

Credit Rating

  • Credit Rating Outlook Credit Rating · Next few quarters · Medium confidence Improved

    From Triple B minus today

    It is under renewal but it it is a it is going to be a positive only if I'm not wrong it is going to be we had when we went for the IPO it was a triple B minus it is going to be. Yes. So I I think the rating will be improved further.

    — cs india indianphosphate

What to watch in Q3 FY26

Labsa Plant Commissioning

Q4 FY26
Current Under construction, almost complete
Target Commercial operations

Why it matters

Successful commissioning of the Labsa plant is crucial for new revenue streams and integrated operations benefits.

Labsa plant is also just about to get Commission... hopefully we expect maybe the beginning of next quarter that is the last quarter of 2526.

Risks & concerns

  • Raw Material Price Volatility

    high

    Prices of LAB, crude oil, and sulfur are highly volatile and unpredictable, making revenue projections challenging.

    Management acknowledged

  • Fertilizer Sector Policy Volatility

    medium

    Previous unfavorable government subsidy policies impacted the Dhule plant's progress, though policies are now improving.

    Management acknowledged

  • Regulatory Delays for Plant Commissioning

    medium

    Sulfuric acid plant commissioning was delayed due to extended time for statutory permissions and consent to operate from the State Pollution Control Board.

    Management acknowledged

  • Corporate Guarantee for Related Party Project

    medium

    A ₹105 crore corporate guarantee for a related party project represents a contingent liability, expected to be released in FY27.

    Management acknowledged

Q&A highlights

6 direct
Dhule Plant Status and Prioritization Direct
Actually this Dule plant is also we had started construction but considering these priority of this Tamil Nadu plant, Kadlar plant... So once this Labsa plant is also get commissioned and operational. We'll take up a Dule plant for the further construction.

Clarifies the company's strategic prioritization of the Tamil Nadu project over the Dhule plant and the sequential development plan.

Asked by Vikas

Dhule Plant Timeline Direct
for for Dhule plant as such, there is no timeline have we have said because in between if you look at Dhule plant, you must know that it is a purely purely fertilizer plant.

Indicates continued uncertainty regarding the timeline for the Dhule project, linking it to the fertilizer sector's policy environment.

Asked by Vikas

Labsa Plant Full Year Operation Direct
OK, Sir, as per understanding to upna Lepsawala party, first priority of the company is on that plan. So maybe in this current year the old plans will be commissioned. So FY27, FY27 will be the first full year of operation for Lepsaw plan, correct Sir? Correct.

Confirms that FY27 will be the first full year of operations for the Labsa plant, providing clarity on its revenue contribution timeline.

Asked by Vikas

Margin Improvement from Integrated Operations Direct
Definitely, yes, because right now in Tamil Nadu say we have mentioned in our prospectus that this plan we are putting up for our principal Unilever, right... So those sulfuric acid producers will be depending upon market demand and other factors, they will add their profit margin accordingly. If it is in very short supply, the profit margin will go like other way around and if it is very competitive then it will be minimal profit margin and then plus inward freight like whichever location you buy you have to.

Highlights the competitive advantage and potential for margin improvement due to captive sulfuric acid production, eliminating freight costs and generating power.

Asked by Vikas

Credit Rating Status Direct
It is under renewal but it it is a it is going to be a positive only if I'm not wrong it is going to be we had when we went for the IPO it was a triple B minus it is going to be... I think the rating will be improved further.

Provides an update on the company's credit rating renewal process and management's expectation for an upgrade from BBB-.

Asked by Vikas

Corporate Guarantee Release Timeline Direct
Yes, hopefully your project will extend guarantee that project is expected to be completed in next financial year. So we hope that once that project is operational, this bank guarantee will be automatically released.

Addresses the timeline for the release of a significant ₹105 crore corporate guarantee, linking it to the completion of a related party project.

Asked by Dinesh Kumar (EXT)

Turnover from Labsa Plant Partial
Yes, I would have loved to give you the exact number, but the raw material for Labsa is originally from the refinery like LAB is the raw material... So which is almost more than 100% jump, right? So this is a number one. Number two means my top line revenue comes from the raw material cost.

Explains the difficulty in providing precise turnover figures for the Labsa plant due to raw material price volatility, but confirms significant revenue contribution.

Asked by Dinesh Kumar (EXT)

FY27 EBITA Percentage Partial
Yeah, again, it's very difficult to give you the absolute number, but definitely I can give you certain input which will give you some, you know, like insight. In case of a Tamil Nadu operation, I will, I have my own sulfuric acid plant. So as I have shared that I don't have to incur the freight in.

Provides qualitative insights into future margin drivers, such as integrated operations and power generation, without committing to a specific EBITA percentage.

Asked by Dinesh Kumar (EXT)

2 min read 6 chapters

Detailed narrative

H1 FY26 Financial Performance Overview

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.

Tamil Nadu Project Update: Sulfuric Acid & Labsa Plants

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.

Dhule Plant and Fertilizer Sector Outlook

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.

Benefits of Integrated Operations on Margins

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.

Corporate Guarantee and Credit Rating Status

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.

Raw Material Price Volatility and Revenue Impact

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.

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