1. At a Glance
Rashtriya Chemicals & Fertilizers Ltd (RCF) — the PSU that decided fertilizers can be fun and nitric acid can be profitable — just dropped its Q2 FY26 report, and oh boy, it smells like a bag of Ujjwala and Suphala with a dash of government subsidy seasoning. The company, with amarket cap of ₹8,077 croreandcurrent price ₹146, is 75% owned by the Government of India (because who else can afford to fund ammonia dreams).
In Q2 FY26,Revenue stood at ₹5,293 crore, up a healthy23.4% YoY, whilePAT jumped 33.4% YoYto ₹105 crore. EPS came in at ₹1.91 for the quarter. TheROEis crawling at5.03%, and theROCEat7.49%, but hey, it’s a PSU — not a fintech startup. Debt remains at ₹2,778 crore, and theDebt-to-Equity ratio is 0.56, which means the government’s fertilizer baby isn’t over-leveraged… yet.
Dividend yield?0.9%, because what’s more Indian than expecting some bonus cash while the company invests ₹2,170 crore in a coal gasification project. RCF’s latest projects at Thal and Trombay, plus its Navratna crown, make it the fertilizer world’s version of Virat Kohli — all-rounder, consistent, and slightly volatile.
So, should investors pay attention? Absolutely — because this PSU isn’t just growing crops; it’s cultivating a new era of industrial chemistry.
2. Introduction
If you think fertilizers are boring, think again. Rashtriya Chemicals & Fertilizers (RCF) is like that silent topper in your class who suddenly becomes a Navratna and makes everyone else look underachieving. Founded way back in 1978, RCF has been manufacturing Urea, NPK, industrial chemicals, and enough nitric acid to fuel an entire chemistry department’s dream experiments.
The government owns 75% of this chemical garden, ensuring that no matter what happens, subsidies and projects will keep flowing like ammonia through a chilled pipeline. Its brand “Ujjwala” isn’t just for LPG cylinders — RCF’s Ujjwala Urea has been feeding half of Maharashtra’s crops. With over5,800 dealersacross India, the company has a supply chain that rivals FMCG majors.
But don’t let the PSU tag fool you — RCF’s recent elevation toNavratna status (August 2023)has given it superpowers. It can now invest up to ₹1,000 crore in new projects without begging the government every time. Think of it as a PSU teenager finally getting a driver’s license.
And just when you thought it couldn’t get busier, RCF is building new plants:Nano Urea (₹238 Cr),AN Melt Plant (₹187 Cr), and even acoal-based fertilizer project at Talcher (₹17,080 Cr)with Coal India, GAIL, and FCIL. Yes, you read that right — a fertilizer project bigger than some states’ budgets.
With Q2 FY26 showing double-digit growth, one thing’s clear — this is not your usual lazy PSU. RCF is cooking more chemistry than your 11th-grade lab ever did.
3. Business Model – WTF Do They Even Do?
So what exactly does RCF do besides turning natural gas into smelly profits?
RCF hastwo main business divisions:
🧪 Industrial Division
This is the “mad scientist” side of RCF — making industrial chemicals atThal and Trombay. They manufacture everything fromAmmonium Nitrate Melt, Ammonia, Nitric Acid (58–98%), Methyl Amines, Dimethyl Acetamide, to exotic-sounding chemicals likePhosphoric Acid 27%andRefrigerant Ammonia. If chemistry had a buffet, RCF would own the kitchen.
🌾 Fertilizer Division
Under its popular brandsUjjwala,Suphala,Biola, andMicrola, RCF producesUrea, NPK, Biofertilizers, andMicronutrients. Farmers in Maharashtra and Karnataka swear by these brands, and with fertilizer subsidies making up a large part of its revenue, the company practically operates as the government’s agricultural wing.
💰 Trading Arm
When it’s not busy manufacturing, RCF moonlights as a fertilizer trader — importing and sellingDAP, MOP, and other fancy imported nutrients.
Between these divisions, RCF is India’s one-stop fertilizer and chemical bazaar. The company’s mix ensures that even if urea prices fluctuate, its industrial division provides chemical cushioning.
And because India’s farmers can’t
run on memes alone, RCF’s plants atThal (20 lakh MT capacity)andTrombay (3.3 lakh MT)are the real MVPs.
4. Financials Overview
| Metric | Latest Qtr (Sep’25) | Same Qtr LY (Sep’24) | Previous Qtr (Jun’25) | YoY % | QoQ % |
|---|---|---|---|---|---|
| Revenue | ₹5,293 Cr | ₹4,290 Cr | ₹3,371 Cr | +23.4% | +57.0% |
| EBITDA | ₹214 Cr | ₹202 Cr | ₹158 Cr | +5.9% | +35.4% |
| PAT | ₹105 Cr | ₹79 Cr | ₹54 Cr | +33.4% | +94.4% |
| EPS (₹) | 1.91 | 1.43 | 0.99 | +33.6% | +92.9% |
Commentary:If fertilizer demand is cyclical, RCF’s profits are proof that government subsidies are the best fertilizer ever invented. From ₹54 Cr in Q1 FY26 to ₹105 Cr in Q2, the jump is sharper than onion prices before Diwali. TheEBITDA marginimproved slightly, and while it’s still not FMCG-level fancy, for a PSU chemical company, that’s solid chemistry.
5. Valuation Discussion – Fair Value Range
Let’s be nerds for a minute.
- EPS (TTM)= ₹5.66
- Current P/E= 26.1
- Industry P/E= 22.7
- EV/EBITDA (TTM)= 10.6
- Book Value= ₹89.2
- P/B Ratio= 1.64
🔸 Method 1: P/E Based
If we apply a conservative 20–25x P/E on TTM EPS ₹5.66 →Fair Value Range = ₹113 – ₹141
🔸 Method 2: EV/EBITDA Based
TTM EBITDA = ₹729 Cr; EV = ₹9,703 Cr → EV/EBITDA = 13.3xSector average ~10x →Fair Value Range = ₹120 – ₹150
🔸 Method 3: DCF (Simplified Educational Version)
Assuming 6% growth, 10% discount rate, and 30% payout →Intrinsic Value ~₹130–₹155
Educational Fair Value Range: ₹120 – ₹155/share
Disclaimer: This fair value range is for educational purposes only and not investment advice. Don’t call your broker after reading this.
6. What’s Cooking – News, Triggers, Drama
You thought a fertilizer company couldn’t be dramatic? RCF says, “Hold my urea.”
- Navratna Crown (Aug 2023):RCF became thefirst fertilizer PSUto achieve Navratna status. Translation: it can now make bigger moves without running to Delhi every time.
- Talcher Fertilizer Project (₹17,080 Cr):A JV with Coal India, GAIL, and FCIL to make India’s first coal gasification-based urea plant. RCF’s stake? 31.85%. This is the “Baap of all capex”.
- Nano Urea Plant (₹238 Cr):Using IFFCO’s tech, expected completion soon. Nano Urea is 10x more
