At a Glance
Deepak Fertilisers (DFPCL) came out swinging in Q1 FY26 with 17% revenue growth and a 22% jump in PAT, backed by specialty chemicals and mining explosives doing the heavy lifting. The cherry on top? A favorable ITAT ruling for its subsidiary Mahadhan Agritech—less tax drama, more profits. Stock surged nearly 6% post-results because the market loves both numbers and good courtroom gossip.
1. Introduction
DFPCL isn’t just about fertilizers; it’s a chemical cocktail of mining explosives, bulk chemicals, and real estate (because why not?). Over the last decade, it’s evolved from a plain ammonia player to a diversified chemical powerhouse. Q1FY26 proved this pivot works, with specialty chemicals contributing chunky margins while agri services stayed steady. With the government’s infra push, mining chemical demand is booming, and DFPCL is cashing in like a pro.
2. Business Model (WTF Do They Even Do?)
- Fertilizers: Core NP prill (24:24:0) and Bentonite Sulphur—market leadership.
- Mining Chemicals: Prilled Ammonium Nitrate for mining and infrastructure—DFPCL is the only domestic supplier.
- Bulk Chemicals: IPA (isopropyl alcohol), nitric acid, etc.
- Real Estate: A small, non-core segment adding minor revenue.
The model thrives on scale and diversification. But it’s cyclical—crop cycles, global chemical prices, and mining activity all play their part.
3. Financials Overview
Q1 FY26 Highlights:
- Revenue: ₹2,659 Cr (+17% YoY)
- EBITDA: ₹513 Cr (margin 19%)
- PAT: ₹244 Cr (+22% YoY)
- EPS: ₹19.3
FY25:
- Revenue ₹10,274 Cr | PAT ₹945 Cr | EPS ₹73.9
Margins at 19% are rock solid, and capex continues to expand specialty production.
4. Valuation
Valuation math—no fertilizer magic, just hard numbers:
- P/E: EPS ₹77 × 15 = ₹1,155
- EV/EBITDA: EBITDA ₹1,973 Cr × 8 = ₹1,578 (per share approx ₹1,500)
- DCF: Growth assumptions give a range ₹1,450 – ₹1,650
Fair Value Range: ₹1,450 – ₹1,650
CMP ₹1,606 is at the upper band—priced for perfection, but growth supports it.
5. What’s Cooking – News, Triggers, Drama
- ITAT Victory: Mahadhan AgriTech’s tax appeals win—goodbye ₹cr litigation risk.
- Specialty Segment Gains: Better realizations driving EBITDA.
- Capex Progress: Ongoing expansion in IPA & nitric acid to enhance capacity.
- Debt Reduction: Net debt falling; balance sheet healthier than last season’s crops.
6. Balance Sheet
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Assets | 11,421 | 11,783 | 13,148 |
| Liabilities | 6,480 | 6,375 | 6,911 |
| Net Worth | 5,067 | 5,408 | 6,236 |
| Borrowings | 3,699 | 4,149 | 4,152 |
Remark: Debt stable but equity rising—balance sheet slowly flexing its muscles.
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | 493 | 732 | 1,880 |
| Investing | -979 | -375 | -1,062 |
| Financing | 604 | -410 | -689 |
Commentary: Operations throwing cash, but investing eats it up—thanks to capex.
8. Ratios – Sexy or Stressy?
| Ratio | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 25% | 11% | 16% |
| ROCE | 25% | 11% | 16% |
| P/E | 20.7x | — | — |
| PAT Margin | 11% | 4% | 9% |
| D/E | 0.73 | 0.77 | 0.66 |
Verdict: Ratios scream “sexy with a hint of leverage”.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 11,301 | 8,676 | 10,274 |
| EBITDA | 2,165 | 1,287 | 1,925 |
| PAT | 1,221 | 457 | 945 |
Commentary: FY24 was a pothole, FY25 was a comeback; Q1FY26 says recovery continues.
10. Peer Comparison
| Company | Revenue (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| SRF | 15,047 | 1,430 | 64 |
| Tata Chemicals | 14,817 | 461 | 55 |
| Deepak Fertilisers | 10,274 | 945 | 21 |
| GNFC | 7,892 | 597 | 13 |
Commentary: DFPCL trades at a sane multiple compared to SRF & Tata Chem.
11. Miscellaneous – Shareholding, Promoters
- Promoters: 45.6% (stable)
- FIIs: 11.2% (recovering from 9.8%)
- DIIs: 12.3% (increasing)
- Public: 30.8%
Foreign interest is creeping back, DIIs solidly adding.
12. EduInvesting Verdict™
Deepak Fertilisers is firing on all cylinders. Specialty chemicals and mining explosives keep margins juicy, while fertilizers provide volume stability. The ITAT ruling removed a legal headache, and capex promises future earnings lift. However, debt levels and cyclicality remain the two potholes on this otherwise smooth expressway.
SWOT Snapshot:
- Strengths: Market leader in niche products, strong specialty segment, healthy EBITDA margins.
- Weaknesses: High dependency on commodity prices, moderate leverage.
- Opportunities: Expanding specialty chemicals, mining demand boom.
- Threats: Raw material volatility, regulatory risk.
At ₹1,606, the stock sits near fair value but could run if specialty growth sustains.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Deepak Fertilisers, Specialty Chemicals, Q1 FY26 Results
