At a Glance
Rama Phosphates Ltd is a small-cap fertilizer + chemical + edible oil combo that makes Single Super Phosphate (SSP), Sulphuric Acid, Micronutrients and Soya Refined Oil. It posted a loss in FY24, bounced back in FY25, and now trades at 31x earnings with just 3.78% ROE. So, is it a multi-bagger in disguise — or just a slippery blend of commoditized businesses?
1. 🪜 Introduction – Fertilizer Stock with Cooking Oil Dreams?
This is one of those companies that leaves investors confused.
Do they sell fertilizers?
Yes.
Do they sell edible oil?
Also yes.
Do they make money consistently from either?
Well…
FY24 was a loss-making year, FY25 showed some recovery, and now the stock is up 50% from 52-week lows — but still down 13% YoY.
2. 🧪 WTF Do They Even Do?
Fertilizers Division:
- SSP (Single Super Phosphate) – Powder & Granule
- NPK Complex fertilizers
- Water-soluble fertilizers
- Magnesium Sulphate, Insecticides, Soil conditioners
Chemicals Division:
- Sulphuric Acid (98%)
- Oleum
- LABSA – detergent ingredient
Edible Oil Division:
- Soya Crude Oil
- Soya De-oiled Cake
- Refined Edible Oil & Lecithin
This is a classic B2B + Agri commodity play — no brand, no pricing power, and heavy raw material volatility.
3. 📊 Financials – Profitability as Volatile as Oil Prices
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹875 Cr | ₹603 Cr | ₹744 Cr |
| EBITDA | ₹73 Cr | ₹-20 Cr | ₹43 Cr |
| Net Profit | ₹41 Cr | ₹-31 Cr | ₹14 Cr |
| ROE | 11.56% | -8.78% | 3.78% |
| EPS | ₹11.56 | ₹-8.78 | ₹3.87 |
FY24 saw massive de-growth — thanks to price erosion in SSP, weak edible oil margins, and inventory losses. FY25 saw a modest bounceback.
But FY25’s net profit ₹14 Cr on ₹744 Cr revenue = ~2% net margin 😬
4. 💸 Valuation – Cheap? Or Just Chemically Confused?
- CMP: ₹121
- EPS (FY25): ₹3.87
- P/E: 31.3x
- Book Value: ₹105 → P/B = 1.15x
🧮 Fair Value Range: ₹75 – ₹105
Based on 15x–25x normalized EPS of ₹3–₹4, and low ROE environment.
Current valuation assumes future growth — but business is too commoditized to justify 30x earnings.
5. 🔥 What’s Cooking – Dhule Expansion & FY25 Revival
- 🏭 New Plant: ₹27.13 Cr capex at Dhule for fertilizer expansion; production by Q4 FY26
- 📈 Q4 FY25 profit: ₹5.25 Cr → turnaround confirmed
- 🧪 Improved OPM: From negative in FY24 to 6% in FY25
- 📉 But still low return metrics and muted cash flows
This is not a growth story yet — it’s a repair story with FY26 as possible inflection.
6. 💼 Balance Sheet – Stable But Nothing Special
| FY25 |
|---|
| Equity Capital |
| Reserves |
| Total Debt |
| Total Assets |
| Net Worth |
| D/E Ratio |
Debt is modest. Capex funded via internal accruals + term loans. Liquidity position is okay, but margins don’t justify large leverage anyway.
7. 💵 Cash Flow – Can They Pay for Fertilizer Dreams?
| FY25 |
|---|
| CFO |
| Capex |
| FCF |
| CFF |
FY25 saw modest positive cash flows again after FY24 wipeout. But no dividend payout = shareholders still waiting for “harvest”.
8. 📉 Ratios – Not Fertile Yet
| Metric | FY25 |
|---|---|
| ROCE | 8% |
| ROE | 3.78% |
| OPM | 6% |
| Net Profit Margin | 1.88% |
| Inventory Days | 147 |
| CCC | 105 Days (⚠️ long) |
| Interest Coverage | ~2.5x |
Not sexy. Not scary. But definitely not efficient. Working capital cycle is long, and return ratios don’t excite.
9. 💰 P&L Breakdown – Where’s the Margin?
- FY23: ₹875 Cr revenue, ₹41 Cr PAT
- FY24: ₹603 Cr revenue, ₹-31 Cr loss
- FY25: ₹744 Cr revenue, ₹14 Cr PAT
Margins are a function of commodity prices + fertilizer subsidies + edible oil spreads — none of which are under management’s control.
10. 🧪 Peer Comparison – Standing Among Giants
| Company | P/E | ROE | OPM | Mcap |
|---|---|---|---|---|
| Coromandel | 37.4x | 17.5% | 10.7% | ₹67,000 Cr |
| Chambal Fert | 13.4x | 20.6% | 14.9% | ₹22,000 Cr |
| Paradeep | 23.5x | 14.4% | 9.1% | ₹13,000 Cr |
| Rama Phosphates | 31.3x | 3.78% | 6% | ₹429 Cr |
👎 High P/E
👎 Low ROE
👎 Smaller scale
👎 No pricing moat
Only thing working: stock was under ₹100 till recently → smallcap PSU/chemical rally effect.
11. 🔍 Misc – Shareholding, Dividends & FOMO
- Promoters: 75% (unchanged)
- FII/DII: Tiny
- Retail: 25%, ~15,000 holders
- Dividend? Nah. 1.4% payout over 3 years.
- FY25 Concall/Investor updates? Rare.
This stock mostly flies when fertilizer themes or PSU/commodity baskets trend. Fundamentals aren’t enough to sustain rallies.
12. 🧠 EduInvesting Verdict™
“Multi-business. Multi-cycle. But no clear multi-bagger yet.”
- ✅ Back to profit in FY25
- ✅ Capex underway
- ✅ Debt under control
- ❌ No brand moat
- ❌ Low return ratios
- ❌ Highly cyclical, subsidy-driven
Unless they execute their Dhule expansion + margin improvement plan, this will stay a ₹100–₹130 trader’s toy, not a long-term wealth builder.
Hold if you’re playing PSU-Agro-Infra FOMO bingo. Else, better fertilizers exist.
✍️ Written by Prashant | 📅 July 3, 2025
Tags: Rama Phosphates, Fertilizer Stocks India, Edible Oil Stocks, Agrochemicals, Smallcap Fertilizer, SSP Manufacturers, Dhule Plant Expansion, FY25 Turnaround Stocks, EduInvesting, Phosphatic Fertilizers India
