Krishana Phoschem Limited — Q3 FY26 earnings call

Call held 13 Jan 2026

Management summary

Krishana Phoschem Limited reported a record-breaking Q3 FY26, driven by strong demand, volume expansion, and high capacity utilization. Revenue from operations surged by 116.8% YoY to ₹659.11 crores, with PAT growing 62.3% YoY to ₹33.3 crores. While overall operating margins compressed due to trading activities, manufacturing margins expanded. The company's NPK/DAP capacity expansion is on track for commissioning by March 2026, promising future growth.

Highlights

  • Record Revenue from Operations of ₹659.11 crores in Q3 FY26, a 116.8% increase from ₹304.03 crores in Q3 FY25.

  • EBITDA grew by 58.4% YoY to ₹70.1 crores, benefiting from operating efficiencies and managed cost environment.

  • PAT reached ₹33.3 crores, a 62.3% YoY growth, supported by higher operating scale and stable financing costs.

  • Achieved highest-ever fertilizer production volumes of 1,13,155 MT, with NPK/DAP operations at 98% utilization and SSP plant at 107%.

  • The 50% expansion of NPK/DAP capacity at Meghnagar is advancing as scheduled for commissioning by March 2026.

Concerns

  • Overall operating margins compressed to 10.64% in Q3 FY26 from 14.56% YoY, primarily due to lower profitability from trading activities.

  • Raw material prices for sulfur and sulfuric acid saw significant increases during Q3 FY26, putting pressure on input costs.

  • Logistics issues in the last week of December 2025 led to some dispatches spilling over into January, impacting Q3 manufacturing turnover.

Key financials

2 periods

Q3 FY26

  • Revenue from Operations
    ₹659.11 Cr
    YoY +116.8%
  • EBITDA
    ₹70.1 Cr
    YoY +58.4%
  • Operating Margin
    10.6%
  • PAT
    ₹33.3 Cr
    YoY +62.3%
  • EPS
    ₹5.39

9M FY26

  • Revenue
    ₹1,663 Cr
    YoY +88%
  • EBITDA
    ₹209 Cr
    YoY +65%
  • PAT
    ₹97 Cr
    YoY +80.8%
  • EPS
    ₹15.7
    YoY +81%

What they filed

Q1 FY27: revenue up 34.3%, net profit up 51.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue301 304 473 396 608 +102%659 +117%755 +60%532 +34%
EBITDA40 44 56 66 73 +83%70 +59%89 +59%89 +35%
Net profit17 21 33 31 33 +94%33 +57%83 +152%47 +52%
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 Revenue
₹658 Cr Total
  • Manufacturing ₹413 Cr 62.8%
  • Trading (Import) ₹245 Cr 37.2%

Capital allocation

medium confidence
  • Capex Capex disclosed
    • 50% expansion of NPK/DAP capacity at Meghnagar, including DAP, NPK, and sulfuric acid capacities
    Our next phase of growth is well underway: the 50% expansion of our NPK/DAP capacity at Meghnagar is advancing as scheduled and remains on track for commissioning by March 2026. These expansions are expected to strengthen our operating performance and enhance long-term growth visibility. In parallel with our current projects, we are actively evaluating new strategic opportunities to diversify our portfolio and further scale our integrated growth operations.
  • Debt Debt disclosed
    Our cash accruals and expansion plans are well synchronized, and currently we do not require additional capital. This approval is an enabling provision that we keep in place to avoid any last-minute rush, if required.
  • Liquidity Liquidity disclosed Company's cash accruals and expansion plans are well synchronized, and currently no additional capital is required.
    Our cash accruals and expansion plans are well synchronized, and currently we do not require additional capital.

Guidance & targets

Capacity

  • NPK/DAP capacity expansion commissioning Capacity · March 2026 · High confidence March 2026
    Our next phase of growth is well underway: the 50% expansion of our NPK/DAP capacity at Meghnagar is advancing as scheduled and remains on track for commissioning by March 2026.

    — Pankaj Ostwal

  • New plant commercial production start Capacity · April · High confidence April
    We will have trial production, and we hope to start commercial production in April.

    — Pukhraj Kather

Revenue

  • New plant revenue potential Revenue · Annual · High confidence ₹1,000 crores
    The plant has the capacity to add almost Rs. 1,000 crores of revenue.

    — Pukhraj Kather

  • FY26 total revenue Revenue · FY26 · Medium confidence More than 9M average of ₹570 crores
    You can analyze it from the trends. But yes, it will be more than the proportion what we have achieved in nine months. That much I can tell you. Nine months average is coming at about Rs.570 crores. And this quarter, it will be more than that.

    — Pukhraj Kather

Capacity Utilization

  • New plant first-year capacity utilization Capacity Utilization · First year of operation · Medium confidence 60%
    Since the plant will start from April, there may be teething issues, and in the first year we are expecting around 60% capacity utilization.

    — Pukhraj Kather

Profitability

  • Manufacturing EBITDA margin Profitability · Ongoing · High confidence 14-15%
    As far as manufacturing is concerned, we will continue to maintain an EBITDA margin of 14% to 15%, and sometimes even around 16%.

    — Pukhraj Kather

What to watch in Q4 FY26

NPK/DAP capacity expansion commissioning

March 2026
Current Advancing as scheduled
Target Commissioned

Why it matters

Successful commissioning is crucial for future revenue growth and operational efficiency.

Our next phase of growth is well underway: the 50% expansion of our NPK/DAP capacity at Meghnagar is advancing as scheduled and remains on track for commissioning by March 2026.

Risks & concerns

  • Raw material price volatility

    medium

    Sulfur and sulfuric acid prices increased significantly during Q3 FY26, putting pressure on input costs.

    Analyst acknowledged

  • Margin compression from trading activities

    medium

    Lower profitability of import-based trading activities, undertaken to meet diverse demand, led to overall operating margin compression.

    Management acknowledged

  • Logistics issues impacting manufacturing turnover

    low

    Logistics delays in late December caused some manufacturing dispatches to spill into January, affecting Q3 turnover, but expected to be recovered in Q4.

    Management acknowledged

Q&A highlights

6 direct
DAP inventory and availability for upcoming seasons Direct
DAP is one of the quality fertilizers available in the country and across the world, containing nutrients of 18% nitrogen and 46% phosphorus. However, what has evolved is that the usage of DAP across the world is going down, and different grades of NPKs are coming up. Now, it is not an issue of DAP availability or the quantity available in the country. The issue is what nutrients are required for the soil, for different types of crops, and at what stage.

Management clarified the evolving market preference from DAP to NPKs and the need for imports to meet domestic demand, indicating a strategic shift in product focus.

Asked by Vighnesh Iyer

NPK EBITDA per ton and realization in Q4 and Kharif season Direct
We are operating in a competitive environment, notwithstanding that domestic production is less than demand. At the same time, we are dependent on government subsidies and must keep the interest of farmers in mind, along with the interests of our stakeholders and the Company. Considering all these factors, we continue to earn an EBITDA of around 14-15% on our manufactured products. We do not intend to encash any demand-supply gap by increasing MRP to boost profits.

Management committed to maintaining EBITDA margins of 14-15% for manufactured products, even if it requires price adjustments, while balancing farmer interests and government subsidies.

Asked by Vighnesh Iyer

Impact of sulfur and sulfuric acid costs on raw material costs Direct
If we look at sulfur prices from April to December, in April they were around Rs. 28,000-29,000 per ton. By October-November, prices increased to around Rs. 35,000 per ton, and in December they rose further to around Rs. 45,000 per ton. Sulfuric acid was around Rs. 8,000 per ton in April. It increased to around Rs. 9,500 in October, and in December it went up to around Rs. 12,000.

Specific raw material price increases were detailed, highlighting the cost pressures faced during the quarter and the need for strategic margin management.

Asked by Vighnesh Iyer

Proportion of trading revenue for Q3 FY26 and its impact on margins Direct
Rs. 245 crores are import and Rs. 413 crores are manufacturing. Why we resort to import is also a vital question. We are operating at almost 100% capacity for SSP as well as DAP-NPK, and we are producing only one variant of NPK. Demand is huge, including demand for other variants. To make all types of products available at one shelf from our side, we import other variants and make them available to farmers. That is why we resort to imports, despite the fact that profitability in imports is very low. Yes, that is the reason [for margin compression].

Management clarified the revenue split between manufacturing and lower-margin trading, explaining that trading is necessary to meet diverse farmer demand and contributes to overall margin compression.

Asked by Disha

Revenue potential and utilization of the new plant commissioning in March Direct
The plant has the capacity to add almost Rs. 1,000 crores of revenue. Since the plant will start from April, there may be teething issues, and in the first year we are expecting around 60% capacity utilization.

Specific financial projections for the new capacity expansion were provided, indicating significant revenue potential and initial utilization targets.

Asked by Disha

High corporate tax rate and its future outlook Direct
Currently we are under MAT, and you would already be aware that for the calculation of deferred tax, we need to consider the rate applicable to the Company. The Company falls under the tax slab of 30% plus surcharge and cess. That is why the overall tax liability you are seeing is around 40%. Whenever we move out of MAT, we will switch to the lower tax alternative of 22%, and in that particular year you will see a significant reduction in tax liability, which will also impact EPS.

Management explained the reason for the current high tax rate and outlined a clear path for a significant reduction in tax liability and improved EPS once the company moves out of MAT.

Asked by Nirav

Plan for listing the company on BSE Partial
As of now, this is not being discussed at the Board or Company level. Since you have raised this question, we will examine it and explore the possibility of listing on BSE.

While not an immediate plan, management indicated they would consider the possibility of a BSE listing, which could enhance shareholder value.

Asked by Keshav Sharma

3 min read 6 chapters

Detailed narrative

Strong Q3 FY26 Performance Driven by Volume and Efficiency

Krishana Phoschem Limited reported a robust Q3 FY26, with Revenue from Operations reaching a record ₹659.11 crores, marking a significant 116.8% year-over-year increase from ₹304.03 crores in Q3 FY25. This growth was supported by strong fertilizer demand and volume expansion. EBITDA for the quarter increased by 58.4% YoY to ₹70.1 crores, benefiting from enhanced operating efficiencies and a managed cost environment. Net Profit After Tax (PAT) also saw substantial growth, rising 62.3% YoY to ₹33.3 crores, leading to an all-time high EPS of ₹5.39 for the quarter.

Capacity Utilization and Production Milestones

The company achieved its highest-ever fertilizer production volumes of 1,13,155 MT during Q3 FY26. Capacity utilization remained exceptionally high, with NPK/DAP operations running at 98% and the SSP plant exceeding its capacity at 107%. This high utilization underscores the strong demand for the company's products and its operational effectiveness in meeting market needs. For the nine-month period, revenue stood at ₹1,663 crores, up 88%, with PAT at ₹97 crores, an 80.8% increase from ₹54 crores in the prior year.

Strategic Expansion and Future Growth Outlook

The 50% expansion of the NPK/DAP capacity at Meghnagar is progressing as scheduled and is expected to be commissioned by March 2026. This expansion, which includes DAP, NPK, and sulfuric acid capacities, is projected to add approximately ₹1,000 crores in annual revenue potential. Management anticipates around 60% capacity utilization in the first year of the new plant's operation, which is slated to begin commercial production in April. This strategic move is expected to further strengthen operating performance and enhance long-term growth visibility.

Margin Dynamics and Raw Material Headwinds

While overall operating margins compressed to 10.64% in Q3 FY26 from 14.56% YoY, primarily due to lower profitability from trading activities, the integrated production line saw margin expansion from 14% to 15%. Raw material prices, particularly for sulfur and sulfuric acid, experienced significant increases during the quarter. Sulfur prices rose from ₹28,000-29,000 per ton in April to ₹45,000 per ton by December, and sulfuric acid from ₹8,000 to ₹12,000 per ton in the same period. Management affirmed its commitment to maintaining manufacturing EBITDA margins at 14-15% by adjusting pricing if necessary.

Government Support and Industry Trends

The company benefited from a favorable agricultural landscape and supportive government policies, including new Nutrient Based Subsidy (NBS) rates for Rabi 2025-26 and the 'Mission for Aatmanirbharta in Pulses' with an ₹11,440 crore budget. The Indian phosphatic fertilizer industry is shifting from traditional DAP use towards balanced NPK and SSP blends, creating opportunities for integrated manufacturers like Krishana. The government's enforcement actions against diversion and black marketing also ensured timely availability of fertilizers to genuine farmers.

Taxation and Capital Structure

The company's corporate tax rate is currently around 40% due to being under MAT and falling into the 30% tax slab plus surcharge and cess. Management indicated that once the company moves out of MAT, the tax rate would reduce to 22%, leading to a significant reduction in tax liability and improved EPS. The company's cash accruals are well synchronized with its expansion plans, and currently, no additional capital is required, despite having shareholder approval for the issuance of shared debentures as an enabling provision.

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