1. At a Glance
MCF (Mangalore Chemicals & Fertilizers) just posted Q1 FY26 numbers that smelled better than urea: ₹862 Cr revenue (+5.9% YoY), ₹111 Cr EBITDA (13% OPM), and ₹62 Cr profit (+40% YoY). Add to that a merger with Paradeep Phosphates brewing in the background, and you’ve got a small-cap stock acting like it’s on steroids.
2. Introduction
Think of MCF as the fertilizer underdog that kept getting bullied by debt, regulatory drama, and low growth. Now, with debt reduction, steady margins, and a high-voltage merger in progress, this once struggling brand is suddenly trending. The share price? Up 165% in a year – clearly, someone’s been sprinkling growth hormone on this script.
3. Business Model (WTF Do They Even Do?)
MCF makes fertilizers (urea, DAP, SSP), plant nutrients, and crop protection products. It sells the stuff farmers actually need, while also dabbling in industrial chemicals like ammonium bicarbonate. It’s not sexy, but it’s necessary – and necessity pays bills.
4. Financials Overview
- Q1 FY26 Revenue: ₹862 Cr
- EBITDA: ₹111 Cr (13% margin)
- Net Profit: ₹62 Cr (vs ₹44 Cr Q1 FY25)
- EPS: ₹5.20
Verdict: Numbers flex harder than the plants they feed.
5. Valuation – What’s This Stock Worth?
- Current P/E: 24x
- Fair Value (P/E 18x): ₹280–₹300
- EV/EBITDA Range: ₹310–₹350
Market has priced in the merger hype, but valuations aren’t crazy yet.
6. What-If Scenarios
- Bull Case: Merger synergies, better subsidy flows → ₹400+.
- Bear Case: Policy shocks, merger mess → ₹250.
- Base Case: ₹300–₹350, stable with a hint of upside.
7. What’s Cooking (SWOT Analysis)
Strengths: Strong promoter (Adventz), diversified portfolio, debt reduction.
Weakness: Low long-term sales growth, subsidy dependence.
Opportunities: Paradeep Phosphates merger → scale & efficiency boost.
Threats: Govt policy swings, raw material price volatility.
8. Balance Sheet 💰
| Particulars (Mar’25) | Amount (₹ Cr) |
|---|---|
| Equity Capital | 119 |
| Reserves | 946 |
| Borrowings | 741 |
| Total Liabilities | 2,333 |
| Total Assets | 2,333 |
| Commentary: Debt halved in 3 years. Someone’s been on a financial keto diet. |
9. Cash Flow (FY14–FY25)
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | 192 | -243 | -101 |
| FY24 | 496 | -82 | -464 |
| FY25 | 271 | -98 | -392 |
| Operating cash flow stays solid, but financing outflows show debt repayment burns. |
10. Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 14.3% |
| ROCE | 14.9% |
| D/E | 0.31 |
| PAT Margin | 9.7% |
| P/E | 23.8 |
| Punchline: ROCE is hotter than a July afternoon in Mangalore. |
11. P&L Breakdown – Show Me the Money
| Year | Revenue (₹ Cr) | EBITDA (₹ Cr) | PAT (₹ Cr) |
|---|---|---|---|
| FY23 | 3,642 | 315 | 135 |
| FY24 | 3,795 | 382 | 155 |
| FY25 | 3,332 | 322 | 144 |
| Topline dipped in FY25, but profitability stayed strong. |
12. Peer Comparison
| Company | Rev (₹ Cr) | PAT (₹ Cr) | P/E |
|---|---|---|---|
| Coromandel | 26,399 | 1,973 | 36 |
| Chambal Fert | 16,646 | 1,649 | 13 |
| Paradeep Phos | 13,820 | 552 | 29 |
| MCF | 3,380 | 161 | 24 |
| The least drunk guest at a party full of fertilizer billionaires. |
13. EduInvesting Verdict™
MCF is in a sweet spot – good Q1, improving cash flows, and a merger catalyst with Paradeep Phosphates. It’s not a multibagger overnight, but definitely a strong plant in a fertile sector. Hold the popcorn; the merger movie is still playing.
Written by EduInvesting Team | 28 July 2025
Tags: Mangalore Chemicals, Fertilizers, Q1 FY26, Paradeep Merger, EduInvesting Premium
