Krishana Phoschem Limited — Q4 FY26 earnings call

Call held 14 Apr 2026

Management summary

Krishana Phoschem reported a strong Q4 and full year FY26, driven by significant revenue and profit growth, supported by successful capacity expansion and operational efficiency. The company's credit rating was upgraded to A+ (Stable). While management anticipates some margin pressure in Q1 FY27 due to input cost volatility, they expect stabilization and continued profitability, with new capacities set to drive over 40% growth in FY27.

Highlights

  • Q4 FY26 Revenue from Operations of Rs.756 crore, up 60% YoY.

  • Q4 FY26 PAT of Rs.83 crore, up 153% YoY.

  • Full Year FY26 Revenue from Operations of Rs.2,418 crore, up 78% YoY.

  • Full Year FY26 PAT of Rs.180 crore, up 107% YoY.

  • Total phosphatic fertilizer capacity increased to 615,000 MTPA, and sulphuric acid capacity to 99,000 MTPA.

Concerns

  • Profitability expected to come down slightly in FY27 due to input price increases, with a major part borne by consumers.

  • Receivable days touched ~100 days at March end due to imported NPK variants, though normally 50-55 days for subsidy.

  • Margins expected to be under pressure in Q1 FY27 due to global input cost volatility, with stabilization expected later in the year.

Key financials

2 periods

Q4

  • Revenue from Operations
    ₹756 Cr
    YoY +60%
  • EBITDA
    ₹90 Cr
    YoY +59%
  • PAT
    ₹83 Cr
    YoY +153%
  • EPS
    ₹13.4
    YoY +153%

FY26

  • Revenue from Operations
    ₹2,418 Cr
    YoY +78%
  • EBITDA
    ₹298 Cr
    YoY +62%
  • PAT
    ₹180 Cr
    YoY +107%
  • EPS
    ₹29.1
    YoY +107%
  • Overall EBITDA Margin
    12.3%
  • Manufacturing EBITDA per ton
    ₹5,200

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

high confidence
  • Capex Capex disclosed prudent mix of internal accruals and term loans
    • NPK/DAP capacity enhancement by 50%
    • Sulphuric acid capacity for backward integration
    This expansion has been funded through a prudent mix of internal accruals and term loans, reflecting disciplined capital allocation.
  • Liquidity Liquidity disclosed Receivables of ~Rs.400 crore (subsidy) and ~Rs.300-325 crore (other) expected to be realized in the current quarter, with no stress on cash flow.
    We expect these amounts to be realized during the current quarter. Accordingly, we do not foresee any stress on the cash flow position.

Guidance & targets

Growth

  • Growth across key parameters Growth · current year (FY27) · High confidence over 40%
    Accordingly, we expect to deliver growth of over 40% across key parameters during the current year.

    — Pukhraj Kanther

Revenue

  • Top line increase Revenue · FY27 · High confidence around Rs.500 crore
    So, you can expect a top line increase of around Rs. 500 crore. So, this year we had around Rs. 2,400 odd crore. So, you expect an increase of around Rs. 500 crore more, Rs. 2,900 to Rs. 3,000.

    — Pukhraj Kanther

  • Overall revenue growth Revenue · FY27 · High confidence 35-40%
    Yes, including the import and manufacturing we expect 40% growth should not be a big issue.

    — Pukhraj Kanther

Green Ammonia

  • Green ammonia supply commencement Green Ammonia · next 3 years · High confidence after approximately three years
    As per the contract, the green ammonia plant is expected to commence operations in the third year, so we expect supply after approximately three years.

    — Praveen Ostwal

Trading Volume

  • Imported material volume Trading Volume · FY27 · High confidence around 150,000 metric tons
    For FY27, based on market demand, we expect to import around 150,000 metric tons of material, which would translate into approximately Rs.1,000 crore of revenue.

    — Pukhraj Kanther

Manufacturing Growth

  • Manufacturing growth Manufacturing Growth · FY27 · High confidence 25%
    And based on the capacity utilization on a reasonable level, the growth in the manufacturing will be in the range of 25%.

    — Pukhraj Kanther

EBITDA per ton

  • SSP EBITDA per ton EBITDA per ton · FY27 · High confidence around Rs.1,500 - Rs.1,600 per ton
    For SSP, that range should broadly hold.

    — Pukhraj Kanther

  • NPK EBITDA per ton EBITDA per ton · FY27 · Medium confidence around Rs.6,000 per ton, varying ±3-4%
    For NPK, EBITDA of around Rs.6,000 per ton may vary slightly, within a range of approximately ±3% to 4%.

    — Pukhraj Kanther

What to watch in Q1 FY27

Q1 FY27 Profitability Stabilization

After Q1 FY27 / in coming quarters
Current Margins expected to be under pressure in Q1 FY27
Target Margins to stabilize and sustain profitability

Why it matters

Crucial to see if the company can effectively pass on increased input costs and maintain profitability as guided.

definitely 1st Quarter may be difficult, but in coming quarters and the year along, we will be able to sustain the profitability.

Risks & concerns

  • Input Cost Volatility

    high

    Global input costs for ammonia and sulphur tightened in Q4 FY26 and are expected to remain volatile, impacting margins.

    Management acknowledged

  • Profitability Pressure in Q1 FY27

    medium

    Due to input cost increases, profitability is expected to come down slightly in Q1 FY27, with a major part of the burden on consumers, though stabilization is expected later.

    Management acknowledged

  • Increased Receivable Days

    medium

    Receivable days touched ~100 days at March end due to imported NPK variants and supplies to cooperatives, higher than the normal 50-55 days for subsidy.

    Analyst acknowledged

  • Geopolitical Factors Affecting Industry Outlook

    medium

    Geopolitical factors like the Iran-Israel conflict and gas availability contribute to a negative outlook for the industry as a whole.

    Management acknowledged

  • Monsoon Forecast Impact on Demand

    low

    Skymet forecast a weaker monsoon (94% of LPA), but management believes it's not a major variation and fertilizer demand will remain stable due to higher water levels.

    Analyst downplayed

Q&A highlights

4 direct, 1 evasive
FY27 Growth and Profitability Outlook Direct
As our Managing Director mentioned, our new expansion has already commenced production and is expected to stabilize over the next three to four months. Accordingly, we expect to deliver growth of over 40% across key parameters during the current year.

Sets clear expectations for the next fiscal year's growth trajectory and acknowledges potential short-term margin pressure.

Asked by Aditya Agarwal

Impact of Government Subsidy and Input Costs on Profitability Partial
Obviously. The price rise has been phenomenal in the last quarter. Yes, of course, we will absorb to some extent and as a result, our profitability is expected to come down slightly during the current year FY27. But a major part will have to be borne by the consumers.

Highlights the challenge of passing on raw material cost increases and the expected impact on the company's profitability for the upcoming year.

Asked by Aditya Agarwal

Receivable Days and Working Capital Management Direct
Obviously, what happened in the last earning call also, I explained that the demand for different variants of NPK is rising in India. We have been producing one variant at 20-20-0-13 and even the demand of this product, we have not been able to meet adequately. As a result, our plants are operating purely on this one product. Now, to meet the market demand and just that our consumers should think that we are capable of providing all variants, we import other variants and that we supply. And that has happened during the last quarter. As a result, on the balance sheet side, on the day, March end closing, the receivable levels are going up. But for subsidy, our receivable levels are normally in the range of 50-55 days.

Clarifies the reason for increased receivables at year-end and provides context on normal collection cycles, addressing potential liquidity concerns.

Asked by Aditya Agarwal

Quantification of Margin Impact from Input Cost Volatility Partial
At present, it is difficult to quantify, as we are still working on sourcing raw materials at reasonable prices and that reasonable price increase will be passed on to the customers because subsidy has already been announced. So, we do not expect a significant long-term impact; however, there may be some pressure in the first quarter. After this phase, we expect to pass on the price increases to customers.

Management acknowledges short-term margin pressure but defers specific quantification, indicating ongoing efforts to manage costs and pass them on.

Asked by Dhruv Mukesh Bajaj

Strategic Role of Trading Business and Profitability Direct
As explained earlier, we have been manufacturing only one variant of NPK. However, there is demand for other variants, and to ensure that customers perceive us as a supplier of a full range of products, we have imported these variants and supplied them to our partners. Accordingly, this increase reflects higher purchases of traded goods.

Clarifies the strategic rationale behind increased trading activity, emphasizing market presence and customer service over direct profitability from trading.

Asked by Nitin Kaushik

EBITDA Margin for Trading Segment vs. Interest Cost Direct
In trading, as I told you, EBITDA is 6% and we spend about, in interest cost and depreciation, interest goes to 3%, so left over is 3%. Yes, obviously, we are working only on 2.5% to 3% net margin on imports. Nothing more than that. But the question is when we are able to provide all types of variants that is more useful, that gives some credibility to this organization that we are able to meet the demand of the market. It is not a question of profit. Import is being done to facilitate our consumer, not to earn profit. For profit, we have our production facilities.

Provides specific financial details on the trading segment's profitability and reinforces its strategic role as a market enabler rather than a primary profit center.

Asked by Aditya

Sulphur Price Volatility and Mitigation Measures Partial
Firstly, the quoted sulphur price of Rs.90,000 per ton is not accurate. Secondly, the assumption that costs cannot be passed on is not entirely correct. A balanced approach is required-some portion may be absorbed by the company, some supported by the government, and the remaining passed on to customers. We have already initiated MRP increases.

Addresses concerns about high sulphur prices and outlines the company's strategy to manage input cost increases through a combination of absorption, government support, and MRP adjustments.

Asked by Balachander

FY27 CAPEX Plans Disclosure Evasive
See, when we have not declared with the regulators, we cannot come out right now. It is on part of the statutory obligation to declare with the regulator and then only we can come out with the exact CAPEX for the year.

Indicates that significant CAPEX plans might be in the pipeline but are not yet publicly disclosed, making it a key item for future monitoring.

Asked by Nitin Kaushik

3 min read 7 chapters

Detailed narrative

Exceptional Financial Performance in FY26

Krishana Phoschem Limited delivered a year of exceptional performance in FY26, with Revenue from Operations growing 78% YoY to Rs.2,418 crore. This was primarily driven by significant volume growth and strong demand across fertilizer segments. EBITDA increased by 62% YoY to Rs.298 crore, and PAT saw a substantial rise of 107% YoY to Rs.180 crore, reflecting robust profitability expansion. The company's EPS for FY26 stood at Rs.29.1, a 107% increase from Rs.14 in the previous year.

Strategic Capacity Expansion and Backward Integration

During FY26, the company successfully completed a significant capacity expansion, enhancing NPK/DAP capacity by 50% to 495,000 MTPA and maintaining SSP capacity at 120,000 MTPA, bringing total phosphatic fertilizer capacity to 615,000 MTPA. Backward integration was also strengthened with the addition of 99,000 MTPA sulphuric acid capacity. This expansion was prudently funded through a mix of internal accruals and term loans, reflecting disciplined capital allocation and is expected to drive benefits from FY27 onwards.

Navigating Input Cost Volatility and Subsidy Framework

The global input cost environment tightened in the latter part of Q4 FY26, with ammonia and sulphur prices firming up. Management acknowledged that while the recently announced Nutrient Based Subsidy (NBS) provides relief, it does not fully offset the increase in input costs. The remaining impact is expected to be addressed through MRP adjustments, with some pressure on margins anticipated in Q1 FY27, but stabilization and sustained profitability are expected in subsequent quarters.

Strategic Trading to Expand Product Range

To meet the rising demand for various NPK variants and ensure a full range of products for customers, Krishana Phoschem increased its trading activities. In FY26, trading volumes were approximately 93,000 metric tons, contributing around Rs.550 crore to revenue. Management clarified that this trading strategy is primarily for market presence and customer service, not a major profit driver, with the company's production facilities being the core source of profit.

Receivables and Working Capital Management

At the end of March 2026, receivable levels increased, with approximately Rs.400 crore pending from government subsidies and Rs.300-325 crore from other receivables. This increase was attributed to importing other NPK variants in Q4 FY26 and supplies to cooperative institutions where invoicing is delayed until inspection. Management expects these amounts to be realized in Q1 FY27, assuring no stress on the cash flow position.

Green Ammonia Commitment and Long-term Vision

As part of its long-term sustainability strategy, Krishana Phoschem has entered into a 10-year Green Ammonia Sale Agreement for 70,000 MTPA under India's National Green Hydrogen Mission. This initiative is expected to enhance supply security, support decarbonization, and improve long-term cost visibility. Supply from the green ammonia plant is anticipated to commence after approximately three years.

Backward Integration as a Competitive Advantage

The company highlighted its backward integration, particularly in rock phosphate beneficiation, as a key contributor to its higher EBITDA margins compared to peers. Krishana Phoschem procures low-grade rock domestically from MP State Mining Corporation Limited and undertakes beneficiation, a process that provides a margin advantage. Management noted that limited rock phosphate reserves and beneficiation capabilities in India make this competitive advantage difficult for other players to replicate.

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