🟢 At a Glance
India’s largest private urea producer, Chambal Fertilisers has transformed from a commoditized fertilizer firm into a cash-rich giant, buying back shares and slashing debt like a boss. With ROCE at 28%, P/E under 14x, and consistent ₹1,000+ Cr profits, this stock is surprisingly… not boring.
1. 🎬 Introduction with Hook
While half of India’s agri stocks are still fighting over subsidies and monsoon predictions, Chambal Fertilisers is out here:
- Buying back shares
- Getting tax penalties stayed in court
- Running phosphoric acid plants in Morocco
- And STILL earning ₹1,649 Cr profit in FY25 😮
For a “commodity business,” this one runs like a listed FMCG. Except the FMCG stands for Fertiliser Margins Creating Gold.
2. 🧪 Business Model (WTF Do They Even Do?)
✅ Core Biz: Urea production — 3 large plants
✅ Product Mix:
- Urea
- DAP
- MOP
- NPK blends
- Speciality nutrients
- Crop protection chemicals
✅ JV: OCP Morocco for phosphoric acid
❌ Exited software biz in FY21 (because…why were they even there?)
📦 Distribution is robust with pan-India agri input marketing. Think of them as the Amazon of fertilizers—but with better EBITDA.
3. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY25 |
|---|---|
| Revenue | ₹16,646 Cr |
| Net Profit | ₹1,649 Cr |
| OPM | 15% |
| ROCE | 28% ✅ |
| ROE | 20.6% ✅ |
| EPS | ₹41.17 |
Despite being cyclical, margins in FY25 rebounded strongly vs the dull FY23 (7% OPM). Operating leverage did its thing.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹554 |
| P/E | 13.5x |
| P/B | 2.55x |
| Dividend Yield | 1.35% |
| Book Value | ₹218 |
Fair Value Calculation:
Let’s apply 14–17x P/E on FY25 EPS of ₹41.17:
- Fair Value Range = ₹576 – ₹700
At CMP ₹554, Chambal trades at a 10–20% discount to intrinsic value, depending on your optimism level (and monsoon forecast).
5. 🔥 What’s Cooking – News, Triggers, Drama
🌾 Recent Buzz:
- ✅ Buyback of 1.55 Cr shares at ₹450 – Completed FY24
- ✅ Zero long-term debt in FY25 vs ₹1,874 Cr in FY24
- 🧾 ₹15.56 Cr CGST penalty (challenged in HC)
- ⚖️ ₹140 Cr tax recovery stayed by Delhi HC
- 🌍 Sustainable agri MoU with TERI
- 📉 Q4FY25 sales down sharply – but so were input costs
Nothing scandalous. Just fertilizer politics and courtrooms, as usual.
6. 🧾 Balance Sheet – How Much Debt, How Many Dreams?
| Metric | FY25 |
|---|---|
| Net Worth | ₹8,728 Cr |
| Debt | ₹99 Cr |
| Cash & Inv. | ₹1,372 Cr |
| Fixed Assets | ₹6,222 Cr |
| CWIP | ₹649 Cr |
✅ From ₹10,000 Cr debt in FY20 → ₹99 Cr now
✅ Asset-heavy, but not bloated
🚫 No toxic intangibles or goodwill
This is what a de-levered capex play looks like.
7. 💵 Cash Flow – Sab Number Game Hai
| FY25 Item | ₹ Cr |
|---|---|
| Cash from Ops | ₹1,394 Cr |
| Cash from Investing | ₹739 Cr |
| Cash from Financing | -₹2,135 Cr |
| Net Cash Flow | -₹2 Cr |
📉 Negative net cash is due to massive buyback payouts
📈 Cash flows from operations have been consistently strong since FY21
8. 📊 Ratios – Sexy or Stressy?
| Ratio | Value | Comment |
|---|---|---|
| ROCE | 28% | 🔥 Efficient & asset-lean |
| ROE | 20.6% | 💪 Consistently strong |
| Working Cap Days | 49 | Balanced ops |
| CCC (FY25) | 54 Days | Efficient, low debtor risk |
| Debt-Equity | ~0.01x | Basically nil |
For a business that was debt-heavy a few years ago, these numbers are a redemption arc.
9. 💰 P&L Breakdown – Show Me the Money
FY25 Highlights:
- Revenue: ₹16,646 Cr
- EBITDA: ₹2,483 Cr
- Net Profit: ₹1,649 Cr
- EPS: ₹41.17
- Net Margin: 9.9%
Compare that to most agri input players with 2–4% margin. Chambal ain’t cyclical anymore, it’s surgical.
10. 🆚 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE % | OPM % | Comment |
|---|---|---|---|---|
| Coromandel Int’l | 39 | 17% | 10.7% | Expensive, high quality |
| Paradeep Phosph. | 23 | 14.4% | 9% | Strong growth, newer biz |
| GSFC | 13.9 | 4.8% | 6.6% | Cheap but cyclical |
| Chambal Fert. | 13.5 | 20.6% | 15% | Best RoE + value combo 💥 |
In short: Chambal = best margin + decent valuation + safest balance sheet.
11. 📦 Miscellaneous – Shareholding, Promoters
| Category | % Holding |
|---|---|
| Promoters | 60.4% |
| FIIs | 20.18% |
| DIIs | 4.59% |
| Public | 14.83% |
📈 FII stake doubled from 10% to 20% in 2 years
🧘 Stable promoter holding
💰 Buybacks + dividends = consistent capital return strategy
Retail may not notice yet, but FIIs clearly do.
12. 🧑⚖️ EduInvesting Verdict™
Chambal is:
✅ A cash machine
✅ Debt-free
✅ Trading at <14x
✅ Paying dividends + doing buybacks
✅ Running a JV in Morocco because why not?
But also:
❌ Low revenue growth (5Y CAGR = 6%)
❌ Fertiliser subsidies = unpredictable mess
❌ CGST cases = annoying legal overhang
Still, for a ₹22K Cr market cap, it gives you better financials than most FMCG or PSU plays. And it’s actually… kind of boring (which is a good thing in commodities).
Verdict:
“Boring is beautiful — especially when margins are this fertile. 🌾”
📈 Fair Value Range (EduInvesting Model™)
- FY25 EPS: ₹41.17
- Valuation Range: 14x to 17x P/E
- 👉 FV Band = ₹576 – ₹700
With buybacks done, debt gone, and cash building, a re-rating can happen anytime it rains well.
✍️ Written by Prashant | 📅 9 July 2025
Tags: Chambal Fertilisers, urea stocks, fertilizer sector, agri inputs, debt-free stocks, Morocco JV, cash flow monsters, ROCE kings, buyback stocks
