Paradeep Phosph.

Paradeep Phosphates delivered a strong performance in FY26, with revenue growing by 29% year-over-year to INR 21,826 crores. EBITDA increased by 33% to INR 2,259 crores, and profit after tax surged by 52% to INR 1,000 crores. Production volumes reached 36.66 lakh metric tons, an 8% increase, achieving almost 100% capacity utilization, while sales volumes rose by 10% to 42.1 lakh metric tons, driven by a 22% growth in NPK sales to 24.64 lakh tons.

The company successfully commissioned 0.6 million tons of new Sulfuric Acid capacity in FY26, increasing its total capacity by 45%, with the benefits expected to materialize in FY27. Additionally, Phase-I of the Phos Acid capacity expansion, aiming to increase capacity from 0.5 million tons to 0.7 million tons at Paradeep, is currently underway and projected for commissioning by FY27. These projects are integral to the company's goal of achieving 80-90% backward integration in phosphoric acid and enhancing earnings quality.

The company acknowledged challenges stemming from the Middle East situation, which has led to a significant increase in ammonia and sulfur prices. This raw material price volatility, coupled with a strategic build-up of inventory (an additional 30 days' worth), resulted in a negative operating cash flow of approximately INR 1,000 crores in FY26. Management anticipates that this situation will normalize in Q1 FY27 as the inventory is utilized and subsidy receivables are realized.

Management emphasized ongoing active engagement with the government regarding raw material availability and subsidy policies. They expressed confidence in the stability of government support, noting that subsidies are adequately budgeted and are not expected to be delayed. The government's policy for DAP and TSP is designed to factor in import price increases, ensuring a positive adjustment to the company's bottom line and supporting food security.

The energy efficiency project at the Goa plant was completed in Q4 FY26, following a shutdown from February to April. This initiative is projected to deliver an EBITDA improvement of INR 1,000-1,200 per ton of urea under current gas price scenarios. Furthermore, the Sulfuric Acid plant expansion is expected to contribute positively to margins, with an estimated impact of approximately INR 1,000 per ton, enhancing overall profitability.

The planned capital expenditure for FY27 is approximately INR 600 crores, which includes normal CAPEX and outflows for major projects like Phos Acid expansion and debottlenecking at the Paradeep unit. While specific FY27 EBITDA per ton and revenue guidance were not provided due to global uncertainties, management expects the benefits from backward integration and new capacities to flow in FY27, contributing to future growth and market presence.