Summary
Krishana Phoschem Limited - Q3 FY26 Earnings Call Summary Tuesday, January 13, 2026, 4.00 P.M. IST
Event Participants
Executives 2 Mr. Pankaj Ostwal – Promoter and Director, Mr. Pukhraj Kanther – Group Financial Advisor
Analysts 5 Bhaskar (Three Head Capital), Disha (Sapphire Capital), Gaurav Gandhi (Individual Investor), Keshav Sharma (Individual Investor), Nirav (Sunidhi Securities), Vighnesh Iyer (Sequent Investments)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹659.11 crores | +116.8% YoY; Driven by strong fertilizer demand, volume expansion, and higher trading/import activity. |
| EBITDA | ₹70.1 crores | +58.4% YoY; Benefited from operating leverage and managed cost environment despite margin compression. |
| EBITDA Margin | 10.64% | -392 bps YoY; Compression due to higher proportion of low-margin trading/import revenue (₹245 crores). |
| Net Profit (PAT) | ₹33.3 crores | +62.3% YoY; Record quarterly profit aided by higher scale and stable financing costs. |
| Earnings Per Share (EPS) | ₹5.39 | +62.3% YoY; Reached an all-time high for the quarter. |
| Fertilizer Production | 1,13,155 MT | Highest-ever quarterly volumes; NPK/DAP at 98% utilization and SSP at 107%. |
| 9M FY26 Revenue | ₹1,663 crores | +88% YoY; Record 9-month performance on strong plant utilization. |
| 9M FY26 PAT | ₹97 crores | +80.8% YoY; Nearly doubled compared to 9M FY25 (₹54 crores). |
Geographic & Segment Commentary
- Manufacturing: Revenue of ₹413 crores for Q3. The company maintained strong margins of 14-15% in integrated production lines, reaching up to 16% due to capacity utilization exceeding 100% in SSP plants.
- Trading/Imports: Revenue of ₹245 crores for Q3. Management utilizes imports of varied NPK grades to meet domestic deficits and ensure a “one-shelf” availability for farmers, despite significantly lower profitability compared to manufactured goods.
Company-Specific & Strategic Commentary
- Capacity Expansion: A 50% expansion of NPK/DAP capacity at Meghnagar is on track for commissioning by March 2026, with commercial production expected in April 2026.
- Revenue Potential: The new expansion has the potential to add ₹1,000 crores to annual revenue; management targets 60% capacity utilization in the first year of operation.
- Market Transition: Strategic pivot from traditional DAP to balanced NPK blends to align with shifting farmer preferences and soil health requirements.
- Vertical Integration: Integrated production model allows the company to absorb short-term raw material price fluctuations in sulfur and phosphoric acid.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | >₹2,200 crores (FY26) | Based on 9M run rate of ₹1,663 crores and expectation of Q4 exceeding the quarterly average. |
| EBITDA Margin | 14-15% (Manufacturing) | Management aims to maintain these levels for manufactured products by adjusting MRP/marketing if input costs rise. |
| Capacity Utilization | 60% (New Plant) | Targeted utilization for the Meghnagar expansion during FY27. |
| Tax Rate | ~22% (Future Transition) | Current 40% rate is due to MAT and 30%+ slab; will drop once the company exits MAT. |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Sulfur prices rose from ₹28,000/MT in April to ₹45,000/MT in Dec; Sulfuric acid rose from ₹8,000 to ₹12,000/MT. |
| Margin Dilution | Increased reliance on imported/traded NPK to meet demand is diluting overall EBITDA margins (currently 10.64%). |
| Logistics/Timing | Q3 manufacturing turnover was slightly impacted by year-end dispatch spill-overs into January 2026. |
Q&A Highlights
DAP vs. NPK Demand
- Question: What is the inventory situation for DAP versus NPK? (Vighnesh Iyer)
- Answer: Global and domestic preference is shifting from DAP to crop-specific NPK variants; Krishana is focusing on NPK to meet specific soil requirements (Pankaj Ostwal).
Input Cost Management
- Question: How are rising sulfur and sulfuric acid costs being managed? (Vighnesh Iyer)
- Answer: Sulfur rose to ₹45,000/MT in December; the company will adjust MRP or marketing policies to maintain 14-15% EBITDA margins in manufacturing (Pukhraj Kanther).
Trading Revenue Impact
- Question: Why did margins taper to 10.6% this quarter? (Disha)
- Answer: High volume of imports (₹245 crores) which carry lower margins; manufacturing margins remained healthy at 14-15% (Pukhraj Kanther).
Expansion Funding
- Question: How will future capex be funded? (Nirav)
- Answer: Current expansions are funded through internal cash accruals; shareholder approval for debentures is an enabling provision, but no immediate capital raise is planned (Pukhraj Kanther).
Key Takeaway
Krishana Phoschem delivered a record-breaking Q3 FY26, with revenue surging 116.8% YoY to ₹659.11 crores and PAT rising 62.3% to ₹33.3 crores. While overall EBITDA margins contracted to 10.64% due to a higher mix of low-margin traded imports (₹245 crores), manufacturing operations remained robust with 14-15% margins and utilization rates exceeding 100% in SSP. The company is strategically shifting focus from DAP to NPK blends to meet evolving agricultural demands. Looking ahead, the Meghnagar capacity expansion is on track for an April 2026 start, providing a potential ₹1,000 crore revenue upside. Despite sharp increases in sulfur costs (up 60% since April), management remains confident in maintaining profitability through its integrated model and pricing flexibility. The company is well-positioned to capitalize on a favorable Rabi season and supportive government nutrient subsidies.
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