1. At a Glance
Paradeep Phosphates (PPL) delivered a PAT of ₹256 Cr in Q1 FY26, a jaw-dropping 4655% YoY jump, on sales of ₹3,754 Cr (+57.9% YoY). Backed by OCP Group and Zuari, the company is flexing like a heavyweight while trading at a modest P/E of 20.2.
2. Introduction
Imagine a boring bag of fertilizer suddenly turning into a Ferrari. That’s Paradeep Phosphates. After a few dull quarters, it came out swinging – margins expanded to 12%, and profits exploded. Thanks to OCP’s phosphate muscle, this Odisha-based player is turning dirt into gold.
3. Business Model (WTF Do They Even Do?)
- Products: DAP, NPK fertilizers, gypsum, and byproducts.
- Operations: Manufacturing, trading, and distribution of non-urea fertilizers.
- Moat: Access to OCP’s phosphate reserves, second-largest phosphatic player in India.
- Revenue Stream: Primarily domestic agri-inputs with exports as a small kicker.
Punchline: They sell nutrients to farmers but are feeding investors fat profits.
4. Financials Overview
Q1 FY26 Performance:
- Revenue: ₹3,754 Cr (+58% YoY)
- EBITDA: ₹465 Cr
- EBITDA Margin: 12% (up from 6%)
- PAT: ₹256 Cr (vs ₹5 Cr LY)
- EPS: ₹3.14
Verdict: Fertilizer has never looked this spicy.
5. Valuation – What’s This Stock Worth?
- Current P/E: 20.2
- Peer Average P/E: 25+
- ROE: 14.4%
Fair Value Range: ₹180–₹230.
At ₹199, this stock is still in a sweet spot, though not dirt cheap.
6. What-If Scenarios
- If fertilizer subsidy reforms hit: Margins take a haircut.
- If merger with Mangalore Chemicals accelerates: EPS boosts.
- If global phosphate prices rise: Windfall profits.
- If subsidy delays persist: Cash flow headaches.
7. What’s Cooking (SWOT)
Strengths: Strong promoter backing, market leader in phosphates, improved working capital.
Weaknesses: Dependency on subsidies, low historical ROE.
Opportunities: Merger synergies, Odisha ₹4000 Cr investment, rising agri demand.
Threats: Price volatility, regulatory risks.
8. Balance Sheet 💰
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Equity | 814 | 815 | 815 |
| Reserves | 2,690 | 2,750 | 3,262 |
| Borrowings | 4,648 | 4,014 | 4,358 |
| Total Liabilities | 10,657 | 9,661 | 11,146 |
Leverage manageable, reserves swelling.
9. Cash Flow (FY23–FY25)
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Operating | -2,377 | 1,437 | 1,386 |
| Investing | -419 | -367 | -597 |
| Financing | 2,301 | -1,022 | -6 |
| Net Cash | -495 | 48 | 783 |
Turnaround from cash burn to positive flows.
10. Ratios – Sexy or Stressy?
| Metric | FY24 | FY25 |
|---|---|---|
| ROE (%) | 10 | 14.4 |
| ROCE (%) | 7 | 14 |
| OPM (%) | 6 | 10 |
| D/E | 0.4 | 0.39 |
Sexy and improving.
11. P&L Breakdown
| ₹ Cr | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | 13,341 | 11,575 | 13,820 |
| Operating Profit | 816 | 672 | 1,255 |
| PAT | 304 | 100 | 552 |
FY24 was a hiccup; FY25 recovery is real.
12. Peer Comparison
| Company | P/E | ROE% | Sales Qtr Cr |
|---|---|---|---|
| Paradeep Phosphates | 20.2 | 14.4 | 3,754 |
| Chambal Fertilizers | 12.9 | 20.6 | 2,449 |
| Coromandel Int’l | 36.1 | 16.8 | 7,042 |
Paradeep is undervalued relative to peers with solid growth.
13. EduInvesting Verdict™
Paradeep Phosphates is no longer the underdog—it’s a high-yield crop ready to harvest. With booming profits, a strategic merger, and OCP’s phosphate backing, it’s hard to ignore.
For now, this fertilizer is turning into financial rocket fuel.
Written by EduInvesting Team | 28 July 2025
Tags: Paradeep Phosphates, Fertilizer, Q1 FY26, EduInvesting Premium
