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    Paradeep Phosph.

    PARADEEP
    Chemicals·4 Feb 2026
    Management Summary

    Paradeep Phosphates delivered strong operational and financial results for Q3 and 9M FY26, driven by volume growth and product mix optimization. The company is actively pursuing backward integration and capacity expansion projects, with several key initiatives nearing completion. While facing short-term pressures from raw material volatility, management remains optimistic about future growth and profitability, supported by expected NBS subsidy revisions and strategic investments.

    Highlights

    5

    • Production in Q3 FY26 increased by 13% Y-o-Y to 1 million tons, marking the second consecutive quarter at this level.

    • For 9M FY26, production reached 2.86 million tons (up 15% Y-o-Y) and sales reached 3.37 million tons (up 17% Y-o-Y).

    • 9M FY26 revenue grew by 34%, EBITDA by 45%, and PAT by 71% Y-o-Y, reflecting strong volume growth and quality of earnings.

    • The fifth evaporator at Paradeep and the 1,500 tons sulphuric acid plant are now operational, with the latter reaching rated capacity.

    • The company's long-term and short-term credit ratings were upgraded to A- and A1+, respectively, indicating strong fundamentals and improved credit profile.

    Concerns

    3

    • Global uncertainty, raw material price volatility, and currency volatility are expected to put pricing pressure in the short term.

    • Sulphur prices have significantly increased from INR 150-200 to INR 540-550, impacting raw material costs.

    • An inventory buildup, primarily of raw materials, occurred in Q3 FY26 due to high prices, though it is expected to liquidate in the upcoming quarter.

    Key financials

    Metrics

    10

    Periods

    2

    Q3

    4
    • Production
      1 MT
      YoY+13%
    • EBITDA per Metric Ton
      ₹4,700
    • Sulphuric Acid Production
      4.5 lakh metric tons
    • Phosphoric Acid Production
      1.45 lakh metric tons

    9M

    6
    • Production
      2.86 MT
      YoY+15%
    • Sales
      3.37 MT
      YoY+17%
    • Revenue Growth
      34%
    • EBITDA Growth
      45%
    • PAT Growth
      71%

    Capital allocation

    2
    high confidence
    CategoryHeadline
    Capex

    ₹500 crores

    Debt

    Gross ₹5,400 crores · Net ₹5,450 crores

    Guidance & targets

    16
    CategoryTargetPriority
    EBITDA
    Minimum EBITDA
    INR 4,500 crores to INR 5,000 crores
    		High
    EBITDA
    EBITDA per metric ton
    around INR 5,000
    		High
    EBITDA
    EBITDA per metric ton
    around INR 4,500 to INR 5,000
    		Medium
    EBITDA
    EBITDA per ton benefit from phos acid expansion
    $150 per ton
    		High
    EBITDA
    EBITDA per ton benefit from sulphuric acid expansion
    $50
    		High
    EBITDA
    EBITDA per ton improvement from 100% backward integration
    30% to 35%
    		High
    Volume
    Total Volume
    four million tons plus
    		High
    Capacity
    Sulphuric acid plant commissioning (Mangalore)
    300 tons capacity
    		High
    Capacity
    Phosphoric acid expansion (Paradeep)
    from 0.5 million to 0.7 million tons
    		High
    Capacity
    Granulation capacity increase (Paradeep)
    from 1.8 million to 2 million tons
    		High
    Capacity
    Phosphoric acid capacity addition (0.2 MMTPA)
    commissioned
    		High
    Capacity
    Sulphuric acid addition (0.1 MMTPA Mangalore)
    commissioned
    		High
    Energy Efficiency
    Energy improvement project completion (Goa)
    completed
    		High
    Tax Rate
    Effective tax rate
    22% to 23%
    		Medium
    Capex
    Paradeep capex commissioning
    around March FY28
    		Medium
    Capex
    Mangalore capex commissioning
    around December FY28
    		Medium

    Mangalore Sulphuric Acid Plant Commissioning

    end of Q4 FY26
    CurrentNearing completion
    TargetCommissioned and operational

    Why it matters

    Will provide additional energy to the urea plant, mitigating the impact of expiring energy efficiency benefits and improving operational efficiency.

    Sulphuric acid plant at Mangalore, which is on 300 tons capacity will be commissioned in the end of the Q4 FY2025-26.

    How to verify

    guidance_and_targets[metric='Sulphuric acid plant commissioning (Mangalore)'][target_period='end of Q4 FY26']

    Risks & concerns

    3
    RiskSeverity

    Global uncertainty, raw material price volatility, and currency volatility

    Expected to put pricing pressure in the short term, necessitating product mix optimization and manufacturing excellence. — Management acknowledged

    medium

    Significant increase in sulphur prices

    Sulphur prices have risen from INR 150-200 to INR 540-550; management made a conscious decision to build raw material inventory and expects normalization in 1-2 months. — Management acknowledged

    high

    Dependency on imported raw materials

    Mitigated through strategic partnerships (e.g., OCP for rock phosphate) and ongoing backward integration projects. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Even though the current condition is actually we are under a little pricing pressure. But a lot of optimization is going back in terms of the product profitability and the portfolio, along with the manufacturing excellence, actually, we are driving that. If you look at actually our basic volumes have been shifting from low profitability product to the higher profitable product, which has been very consistently followed for this year.”

    Highlights management's proactive strategy to counter pricing pressure by shifting towards higher-margin products and focusing on operational efficiency.

    asked by Sucrit D. Patil

    2 min read5 chapters

    Detailed Narrative

    01

    Robust Q3 and 9M FY26 Performance Driven by Volume and Product Mix

    Paradeep Phosphates demonstrated strong operational and financial performance in Q3 and 9M FY26. Q3 production reached 1 million tons, a 13% Y-o-Y increase, marking the second consecutive quarter at this level. For the nine-month period, production grew 15% to 2.86 million tons, and sales increased 17% to 3.37 million tons. This volume growth translated into significant financial gains, with 9M FY26 revenue up 34%, EBITDA up 45%, and PAT up 71% Y-o-Y, reflecting a successful strategy of shifting towards higher-margin NPK grades, which grew 30% YTD.

    02

    Strategic Backward Integration and Capacity Expansion Initiatives

    The company is aggressively pursuing backward integration and capacity expansion to enhance earnings quality. The fifth evaporator and a 1,500 tons sulphuric acid plant at Paradeep are now fully operational. Key upcoming projects include the commissioning of a 300 tons sulphuric acid plant at Mangalore by Q4 FY26 and an energy improvement project at Goa by Q4 FY26, which is expected to reduce energy consumption by 0.3 Gcal. Additionally, phosphoric acid capacity is being expanded from 0.5 million to 0.7 million tons, and granulation capacity at Paradeep is targeted to increase from 1.8 million to 2 million tons, with a 0.2 MMTPA phosphoric acid addition expected by Q2 FY27.

    03

    Capital Allocation Focused on Growth and Efficiency

    Paradeep Phosphates reported a 9M FY26 capex spend of INR 450 crores, with an estimated total of INR 500 crores for the full FY26. The company has a larger multi-year capex plan of INR 3,600 crores, including INR 800 crores for granulation, INR 800-900 crores for standalone phosphate, and INR 1,500 crores for phosphoric and sulphuric acid at Paradeep. Net debt as of December 31, 2025, stood at INR 5,450 crores, with a net debt to equity ratio of 0.75. Management is committed to maintaining debt levels and optimizing working capital through tight inventory control.

    04

    Managing Raw Material Volatility and Strategic Sourcing

    The company acknowledged the impact of global uncertainty🌐, raw material price volatility, and currency fluctuations, which are expected to exert short-term pricing pressure. Sulphur prices, for instance, have surged from INR 150-200 to INR 540-550. In response to this volatility, Paradeep Phosphates made a conscious decision to build up raw material inventory in Q3, which is expected to be utilized in the upcoming quarter. Strategic partnerships, such as with OCP for rock phosphate, are crucial for ensuring raw material security.

    05

    Optimistic Outlook on NBS Subsidy and Green Ammonia Initiative

    Management expressed strong optimism regarding the upcoming NBS subsidy revision, anticipating it to be positive and crucial for the industry, supported by favorable budget allocations. In parallel, the company is pursuing a green ammonia offtake agreement with SECI for its Paradeep and Goa sites. While the agreement is in a preliminary stage and could be signed soon, the actual production and supply are projected to commence in 2-3 years, highlighting a long-term strategic move towards sustainable practices.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.