Krishana Phoschem Limited — Q4 FY25 earnings call

Call held 13 May 2025

Management summary

Krishana Phoschem delivered a strong Q4 and full-year FY25 performance, marked by robust revenue and profit growth driven by increased volumes and improved operational efficiency. The company saw significant increases in SSP and NPK/DAP sales and utilization, with full-year PAT more than doubling. Management outlined plans for capacity expansion and product innovation, while acknowledging that future margin expansion might be limited due to raw material and subsidy dynamics.

Highlights

  • Q4 FY25 Revenue of ₹472.9 crores, up 79.5% YoY and 55.6% QoQ, demonstrating strong growth.

  • Q4 FY25 EBITDA increased by 119.2% YoY to ₹56.3 crores, with a healthy margin of 11.9%.

  • Q4 FY25 PAT surged by 492.7% YoY to ₹32.6 crores, reflecting significant profitability improvement.

  • Full-year FY25 PAT more than doubled to ₹86.3 crores, a 114.1% YoY increase.

  • SSP sales volume increased by 153.8% YoY in Q4 FY25, and NPK/DAP sales grew 40.8% YoY.

Concerns

  • Management indicated that the high profitability seen in FY22-23 (20-23% margins) was an 'aberration' and current margins are a 'reasonable, normal level', implying limited scope for significant margin expansion going forward.

  • Outstanding subsidy receivables as of March 31, 2025, stood at ₹189.1 crores, an increase from ₹133.2 crores on March 31, 2024, which ties up working capital.

Key financials

3 periods

Headline

  • Outstanding Subsidy Receivables (Mar 31, 2025)
    ₹189.1 Cr

Q4 FY25

  • Revenue
    ₹472.9 Cr
    YoY +79.5% QoQ +55.6%
  • EBITDA
    ₹56.3 Cr
    YoY +119.2% QoQ +27.7%
  • EBITDA Margin
    11.9%
  • PAT
    ₹32.6 Cr
    YoY +492.7% QoQ +59%

FY25

  • Revenue
    ₹1,358.2 Cr
    YoY +47%
  • PAT
    ₹86.3 Cr
    YoY +114.1%
  • EBITDA per Ton
    ₹5,251

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.

Capital allocation

medium confidence
  • Capex Capex disclosed
    We are in advanced stages of planning for capacity expansion in fertilizer as well as backward production facilities with options being explored both organically through brownfield expansion and backward integration and inorganically through acquisitions that could offer market product or logistics synergies. We continuously work on optimizing our manufacturing process and improving technology to enhance our efficiencies and production.
  • Debt Debt disclosed
    Our debt-to-equity ratio improved, with net debt decreasing by 19%, reflecting our commitment to prudent financial management.

Guidance & targets

Volume

  • NPK Sales Volume Volume · FY26 · High confidence 280,000 metric tons
    We hope to sell about 280,000 metric ton of NPK, which will be up from last year.

    — Sunil Kothari

Capacity

  • NPK/DAP Capacity Utilization Capacity · FY26 · High confidence 80%
    We hope to touch 80% this year.

    — Sunil Kothari

Profitability

  • EBITDA per Ton Profitability · FY26 · High confidence 5,500-6,000 Rs per ton (similar to Q4 FY25)
    It will be stable, because the raw material prices have gone up and that is why the subsidies have been increased. So, EBITDA levels will be almost similar. ... Absolutely, you can consider that comfortably [5,500-6,000 per ton].

    — Praveen Ostwal / Sunil Kothari

  • Overall Profits Growth Profitability · FY26 · Low confidence grow
    Profitability may not expand much, but overall profits will grow.

    — Praveen Ostwal

Working Capital

  • Debtor Cycle Improvement Working Capital · FY26 · High confidence 10 to 15 days improvement
    I'm confident that in FY26, you'll see an improvement of at least 10 to 15 days.

    — Sunil Kothari

What to watch in Q1 FY26

NPK Sales Volume

next quarter / FY26
Current 232,715 tons (FY25)
Target 280,000 metric tons (FY26)

Why it matters

To verify the company's ability to achieve its stated volume growth target for NPK, a key product.

We hope to sell about 280,000 metric ton of NPK, which will be up from last year.

Risks & concerns

  • Raw material price volatility

    medium

    Sulfur prices doubled over the previous year, mainly due to volatile global demand, but government subsidies largely offset this impact on price competitiveness and margin stability.

    Management acknowledged

  • Limited future margin expansion

    medium

    Management stated that high margins seen in FY22-23 were an 'aberration' and current levels are 'reasonable, normal', implying that significant margin jumps are not expected as subsidies adjust for raw material prices.

    Management acknowledged

  • Working capital tied up in subsidy receivables

    medium

    Outstanding subsidy receivables increased to ₹189.1 crores as of March 31, 2025, from ₹133.2 crores a year prior, indicating a continued impact on working capital.

    Management acknowledged

Q&A highlights

7 direct
NPK vs DAP growth and industry shift Direct
See, the government is already working on the nutrient based policy, which aims to ensure that hat only the exact nutrients required are provided to the soil. ... Globally, DAP production is declining, which is leading to higher prices. ... So, it's both, a soil nutrient issue and a subsidy concern. And in coming times, definitely NPK's will continue to be the future of the country.

Management explained the strategic shift towards NPK over DAP, driven by government policy, soil health needs, and global production dynamics, positioning NPK as a key growth driver.

Asked by Dhwanil

Future CapEx plans and capacity utilization Direct
in SSP, we are almost at 90% plus, but in NPK/DAP, definitely we still have some unutilized capacity because our installed capacity is 3,30,000 tons and this year, we could produce only less than 2,40,000 tons. So, we're focused on fully utilizing that 3,30,000 tons capacity. And above all, we are planning to enhance our capacities of phosphoric acid and NPK/DAP. We are working on it, and at the right time we will come out with the project reports and information.

Management clarified current capacity utilization levels and signaled future CapEx for enhancing phosphoric acid and NPK/DAP capacities, indicating future growth investments.

Asked by Dhwanil

Sustainability of EBITDA per ton and future margin expansion Direct
It will be stable, because the raw material prices have gone up and that is why the subsidies have been increased. So, EBITDA levels will be almost similar. ... The 22-23% profitability was an aberration and exception happened only in FY22-23. hat we are showing now is a reasonable, normal level, and we expect to continue at this level. ... we don't expect a significant jump in profitability anytime soon.

Management set expectations for stable, rather than significantly expanding, EBITDA per ton and overall margins, attributing it to the balancing act between raw material costs and government subsidies.

Asked by Dhwanil

Improvement in working capital and debtor cycle Direct
Earlier, a higher percentage of our sales came from SSP. Now, NPK is contributing more. In the case of NPK, payments from marketing federations and wholesalers come in faster. That's why our debtor cycle is improving slightly. ... I'm confident that in FY26, you'll see an improvement of at least 10 to 15 days.

Management detailed the drivers behind improving debtor days, including product mix shift and marketing efforts, and provided a specific target for further improvement in FY26.

Asked by Deekshant B

Parent company's increased shareholding and capital infusion strategy Direct
I think it's mainly about opportunities that come our way. Our holding company currently owns around 65%. So, whenever an opportunity arises, OPIL increases its stake. Later, when we do a public offering, like a follow-on offer or QIP, having a higher stake helps minimize dilution. That's why whenever the chance comes, we increase OPIL's stake.

Management explained the strategic rationale behind the parent company's increased stake, linking it to future capital raising events and minimizing dilution.

Asked by Deekshant B

Nature of SBI's interest in expansion Direct
It's not a capital partnership, but a funding partnership. ... Yeah, funding.

Clarified that SBI's interest is for debt funding, not equity partnership, providing clarity on potential capital structure.

Asked by Deekshant B

Volume expectations for NPK and SSP in FY26 Direct
We hope to sell about 280,000 metric ton of NPK, which will be up from last year. Because as we have already worked on de-bottlenecking some problems and the capacity utilization which was hovering in the range of 70%, we hope to touch 80% this year.

Management provided specific volume and capacity utilization targets for NPK in FY26, indicating expected operational improvements and growth.

Asked by Soham

2 min read 6 chapters

Detailed narrative

Q4 FY25 Financial Performance Highlights

Krishana Phoschem reported a robust Q4 FY25, with revenue reaching ₹472.9 crores, marking a significant 79.5% YoY and 55.6% QoQ increase. EBITDA for the quarter rose to ₹56.3 crores, up 119.2% YoY and 27.7% QoQ, achieving an EBITDA margin of 11.9%. Profit After Tax (PAT) surged by an impressive 492.7% YoY to ₹32.6 crores, with a PAT margin of 6.9%, demonstrating strong quarterly profitability.

FY25 Full Year Financial Overview

For the full fiscal year 2025, the company's revenue grew 47.0% YoY to ₹1,358.2 crores, up from ₹923.9 crores in FY24. EBITDA stood at ₹183.9 crores, a 43.4% YoY increase, with a healthy margin of 13.5%. PAT more than doubled to ₹86.3 crores, reflecting a 114.1% YoY increase and a PAT margin of 6.4%. The EBITDA per ton for the year was ₹5,251, indicating strong operational efficiency.

Operational Performance and Capacity Utilization

FY25 was a landmark year for Krishana Phoschem, achieving highest-ever volumes and improved plant utilization. SSP sales reached 1,17,536 tons for the full year, a 21.4% YoY increase, with Q4 sales up 153.8% YoY to 32,835 tons. NPK/DAP sales surged to 2,32,715 tons for the full year, a 70.4% YoY increase, with Q4 sales up 40.8% YoY to 68,606 tons. SSP operated at 95% utilization for the full year, while NPK/DAP utilization improved significantly from 45% to 70%.

Product Strategy and Innovation

The company announced the launch and relaunch of key products, including Annadata Urea SSP, Annadata Super 6 (enriched with Zinc, Boron, Magnesium), and Annadata Zibo (fortified with Zinc and Boron). These new offerings aim to meet evolving farmer needs and address nutrient deficiencies, reinforcing leadership in fertilizer markets. Management expects these value-added nutrients to drive handsome additions to profit.

Industry Outlook and Raw Material Dynamics

The phosphatic fertilizer industry saw 7.5% YoY volume growth in FY25, primarily driven by NPK grades. Krishana Phoschem outgrew the industry with 50% volume growth. While sulfur prices doubled YoY due to global demand volatility, government subsidies (up 42% for SSP, 18% for NPK) largely offset raw material inflation, helping maintain price competitiveness and margin stability. Management emphasized NPK's future growth potential due to nutrient-based policy and declining global DAP production.

Capital Allocation and Funding Plans

The company's net debt decreased by 19% in FY25, reflecting prudent financial management. Outstanding subsidy receivables as of March 31, 2025, were ₹189.1 crores. Krishana Phoschem is in advanced stages of planning for capacity expansion in fertilizer and backward production facilities, including enhancing phosphoric acid and NPK/DAP capacities. SBI has shown interest in providing debt funding for these expansion plans.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Chemicals earnings calls