1. 🧾 At a Glance
Krishana Phoschem has grown from a regional fertilizer company into one of the fastest-growing agri-chemical players in India. With ₹1,358 Cr in revenue and ₹87 Cr PAT in FY25, it has posted a 5Y profit CAGR of 44%. But with a 31x P/E and rising debt, can this phosphate-fueled story sustain… or will investors get SSP-ed?
2. 🎬 Introduction with Hook
Fertilizer stocks aren’t sexy—until one of them suddenly hits 5x in 2 years and keeps dropping bonus bombs like a Diwali cracker stall.
Enter Krishana Phoschem Ltd, the only private player in India that turns low-grade rock phosphate into high-grade usable stuff in-house. Sounds boring? The ₹2,600 Cr market cap disagrees. But should you?
3. ⚙️ Business Model – WTF Do They Even Do?
💼 Krishana Phoschem (KPL) is part of the Ostwal Group, with operations across:
- 🧪 Fertilizer Production:
- SSP (Single Super Phosphate) – flagship product under “Annadata”
- NPK/DAP Complex – marketed as “Bharat”
- Market leader in Chhattisgarh (35% share) and MP (20%+)
- 🪨 Rock Phosphate Upgradation:
- Converts low-grade phosphate into fertilizer-grade phosphate
- Only private player in India doing this end-to-end
- 🔋 Sulphuric Acid & Chemicals:
- Key raw material for SSP & DAP
- Helps control input costs
🧭 Vertically integrated + strong brand = pricing power + margin stability.
4. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 188 | 318 | 323 | 924 | 1,358 |
| Net Profit (₹ Cr) | 20 | 29 | 27 | 40 | 87 |
| OPM % | 21% | 17% | 16% | 14% | 14% |
| ROE % | 20% | 18% | 17% | 25% | 25.3% |
| ROCE % | 20% | 20% | 11% | 15% | 21.8% |
📈 5-Year CAGR:
- Revenue: 53%
- Profit: 44%
- EPS: up 4x from FY21 (₹3.75 → ₹14.29)
5. 💸 Valuation – Is It Cheap, Meh, or Crack?
- CMP: ₹443
- P/E (TTM): 31x
- Book Value: ₹63.4
- P/B: 6.99x
- EV/EBITDA (Est.): ~14–15x
📉 Fair Value Range (Based on 18–22x FY26E EPS ₹17–20):
₹306 – ₹440
Current price = upper end of justified range. Any disappointment = de-rating risk.
6. 🍿 What’s Cooking – News, Triggers, Drama
- 🏭 New Capacity Announced:
- 500 TPD fertilizer + 300 TPD sulphuric acid at Meghnagar
- Capex funded via internal accruals + debt
- Adds ~₹500–600 Cr topline in 2–3 years
- 🎁 Bonus Bonanza:
- 1:1 bonus issued in Oct 2023
- Helped retail entry, but also diluted EPS optics
- 🔄 Working Capital Cycle:
- Improved from 151 to 107 days
- Cash conversion improving, albeit still stretched
- 🔬 Zero exports so far = optional upside if global market opens up
7. 🧮 Balance Sheet – How Much Debt, How Many Dreams?
| FY | Total Liabilities | Borrowings | D/E | Capex Trend |
|---|---|---|---|---|
| FY21 | ₹195 Cr | ₹21 Cr | 0.1x | Mild growth |
| FY23 | ₹582 Cr | ₹276 Cr | 0.6x | Heavy expansion |
| FY25 | ₹1,036 Cr | ₹376 Cr | 0.6x | ₹78 Cr CWIP |
🧾 Capital-intensive phase funded by debt. D/E is reasonable but watch for overextension.
8. 💵 Cash Flow – Sab Number Game Hai
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| CFO | -₹33 Cr | -₹82 Cr | ₹154 Cr ✅ |
| CFI | -₹190 Cr | -₹37 Cr | -₹32 Cr |
| CFF | ₹223 Cr | ₹121 Cr | -₹110 Cr |
| Net Cash | Slightly positive in FY25 after years of stress |
💬 Finally generating real cash. Still reliant on subsidies + receivable clearance.
9. 📐 Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROCE | 21.8% ✅ |
| ROE | 25.3% ✅ |
| OPM | 14% |
| D/E | ~0.6x |
| Debtor Days | 102 ❌ |
| Dividend Payout | 0% ❌ |
💬 Strong returns, improving execution—but debtor cycle and zero dividends hurt investor confidence.
10. 💰 P&L Breakdown – Show Me the Money
- FY25 Revenue: ₹1,358 Cr
- EBITDA: ₹184 Cr
- PAT: ₹87 Cr
- EPS (post-bonus): ₹14.29
- Net Margin: 6.4%
📌 Quarterly profits are skewed—Q4 (Mar’25) alone contributed ~40% of full-year PAT.
11. 🆚 Peer Comparison – Who Else in the Game?
| Company | P/E | ROCE | OPM | MCap (₹ Cr) |
|---|---|---|---|---|
| Coromandel Intl | 39.5 | 23.2% | 10.7% | ₹67,900 |
| Chambal Fert. | 13.5 | 27.9% | 14.9% | ₹22,200 |
| Paradeep Phos. | 23.8 | 13.9% | 9.1% | ₹13,100 |
| RCF | 35.6 | 7.5% | 4.0% | ₹8,500 |
| Krishana Phoschem | 31x | 21.8% | 14% | ₹2,684 Cr |
📈 Better margin profile than peers; scale is lower, but growth rate is higher.
12. 🧠 Miscellaneous – Shareholding, Promoters
- 👨👩👧👦 Promoter Holding: 71.86% (strong + rising)
- FIIs: Just 0.04%
- Public: 28.09%
- Shareholders: 9,594
- 💬 High promoter skin in the game, but no major institution yet
13. 🧑⚖️ EduInvesting Verdict™
Krishana Phoschem isn’t your typical PSU fertilizer stock. It’s fast, integrated, and profitable. It grew quietly, rewarded investors with bonuses and earnings, and now sits on a ₹2,600 Cr base—still small compared to Coromandel or Chambal.
But here’s the rub:
📌 Valuation is rich
📌 Working capital cycles are volatile
📌 Q4 profit dependency is risky
📌 No exports = no forex hedge
If it executes Meghnagar capacity without drowning in debt, KPL might be one of the few private agri-chem firms that actually compound and not just trade on subsidy sugar highs.
Fair Value Range (18–22x FY26E EPS ₹17–20):
👉 ₹306 – ₹440
We’re near the upper bound already. Not overvalued, but definitely pricing in best-case execution.
✍️ Written by Prashant | 📅 July 10, 2025
Tags: Krishana Phoschem, Fertilizer Stocks, Rock Phosphate India, Ostwal Group, Agrochemicals, SSP Manufacturer, Meghnagar Expansion, BSE Smallcap
