Paradeep Phosphates: Fertilizing India's Future with Strategic Growth and Strong Q2 FY26 Performance

Paradeep Phosphates Limited (PPL), a prominent player in India's phosphatic fertilizer industry, has reported a robust financial and operational performance for the second quarter and first half of the fiscal year 2026. The period was marked by significant growth across key metrics and a landmark strategic move: the successful merger with Mangalore Chemicals & Fertilizers Limited (MCFL). This integration, effective October 16, 2025, has solidified PPL's position as a pan-India fertilizer company, expanding its total production capacity by over 23% to 3.7 million metric tonnes (MMT) and enhancing its market reach, particularly in the southern regions.

For Q2 FY26, PPL's revenue from operations surged by 49% year-on-year to ₹6,872.2 crore. This strong top-line growth was complemented by a 32.4% increase in EBITDA, which reached ₹698.4 crore. The company's Profit Before Tax (PBT) stood at ₹468.5 crore, while Profit After Tax (PAT) grew by 33.9% year-on-year to ₹341.9 crore. The first half of FY26 also demonstrated impressive momentum, with revenue from operations increasing by 46.3% to ₹11,375.7 crore and EBITDA rising by 69.3% to ₹1,313.1 crore. PAT for H1 FY26 saw a remarkable 134.7% jump to ₹658.7 crore, reflecting both volume growth and a richer product mix. Operationally, production volumes in Q2 FY26 grew by 19% year-on-year to 10.06 lakh tonnes, and sales volumes increased by 30% to 13.55 lakh tonnes. The first half saw production and sales reaching 18.6 lakh tonnes and 22.96 lakh tonnes, respectively, up 17% and 28% year-on-year. This growth was notably driven by strong performance in value-added NPK grades, with N-20 sales soaring by 52% year-on-year and TSP sales surging by 339% year-on-year.

Strategic Expansion and Market Leadership

The successful merger with MCFL is a cornerstone of PPL's strategic vision, creating a unified entity with a strong national footprint. This integration not only boosts manufacturing scale but also enhances market reach, particularly in the agriculturally developed southern states with high phosphate consumption. The combined entity benefits from a wider product portfolio, more efficient supply chain, and optimized distribution through an extensive network of dealers and partners. This move is expected to drive economies of scale in production and logistics, ultimately reducing costs and improving service quality for farmers.

Further reinforcing its growth trajectory, PPL has announced a substantial ₹3,600 crore investment program. This ambitious plan aims to add 1 million tonnes of new granulation capacity and significantly strengthen backward integration across phosphoric acid and sulphuric acid production at its Paradeep and Mangalore units. Specifically, phosphoric acid capacity will increase by 0.5 million tonnes, a 140% jump, and sulphuric acid capacity by 1.5 million tonnes, an 83% increase. This will make all three of PPL's manufacturing sites fully backward integrated, elevating the company's total capacity to almost 5 million tonnes and targeting 5.0 million tonnes of sales over the next 2.5 years. This investment, to be financed through a 30% equity and 70% debt mix, is projected to yield an asset turn of 2x to 2.5x and contribute an incremental EBITDA margin of ₹1,000 to ₹1,500 per ton from backward integration, ensuring profitability grows in line with capacity.

Brand Building and Sustainability Initiatives

PPL's commitment extends beyond financial metrics to brand building and sustainable practices. The company recently onboarded cricket legend Rahul Dravid as its brand ambassador. This association aims to amplify PPL's efforts in promoting innovative and sustainable farming solutions under its trusted brands, Jai Kisaan Navratna and Jai Kisaan Mangala. Dravid's values of trust, discipline, reliability, and performance are seen as mirroring PPL's ethos and its relationship with the Indian farming community.

In the realm of Environmental, Social, and Governance (ESG), PPL continues to demonstrate strong leadership. The company has published its 4th ESG Report for FY24-25, which was externally assured by TUV India, and has applied for the S&P DJSI Rating. PPL's S&P Corporate Sustainability Assessment Score of 75 places it among the top 2% globally in the chemicals sector, reaffirming its leadership in sustainable business practices. The company has implemented new ESG initiatives across all pillars, including Climate Risk Assessment, Life Cycle Analysis of key products, Supplier ESG Assessment, Human Rights Due Diligence, and ESG Policies and Targets.

Outlook and Future Focus

Looking ahead, Paradeep Phosphates remains optimistic about fertilizer demand, driven by a favorable Rabi season and continued government emphasis on soil health and balanced nutrient application. The company's strategic priorities are clear: enhancing scale efficiency, deepening backward integration, accelerating product innovation, and embedding sustainability at the core of its operations. The improved cash conversion cycle, which shortened by 30 days to 58 days in H1 FY26, and a comfortable net debt-to-equity ratio of 0.66x, provide ample balance sheet flexibility to fund future growth. PPL's focus on operational excellence, innovation, and disciplined execution positions it to create enduring value for its shareholders and for India's farming community, truly nourishing the future.