Krishana Phoschem FY26: record growth, fresh capacity, and a tougher cost cycle ahead

Krishana Phoschem closed FY26 with its strongest reported year so far. Revenue from operations rose to Rs 2,418 crore, up 78% year on year. EBITDA increased to Rs 298 crore, up 62%, and profit after tax more than doubled to Rs 180 crore. In Q4 FY26, revenue from operations came in at Rs 755.5 crore, while PAT surged to Rs 83.1 crore, helped by scale benefits and deferred tax benefits cited by management.

The year was also an operational milestone. Total production was disclosed at 3,97,263 MT and sales at 3,84,151 MT in the investor presentation, with high utilisation levels across its fertilizer assets. The company describes itself as an integrated phosphatic fertilizer player with SSP and NPK/DAP complexes, backed by captive intermediates and beneficiation capability.

The operating story: utilisation, mix, and trading support

In FY26, Krishana Phoschem reported NPK sales of 2,58,588 tons and SSP sales of 1,25,564 tons. The company highlighted strong asset utilisation, including SSP running above rated capacity in certain periods and FY26 NPK/DAP utilisation at 83% (after capacity expansion inclusion as of March 31, 2026).

A notable theme from the earnings call was the role of trading and imports. Management explained that the company has been producing largely one NPK variant (20-20-0-13) while market demand spans multiple grades. To maintain credibility with distributors and farmers as a full-range supplier, the company imported other variants and supplied them through its network. This supported volume and reach but carried lower profitability.

In Q&A, management quantified FY26 trading turnover at around Rs 550 to 560 crore, with trading volumes of roughly 93,000 metric tons. Manufacturing volumes were stated at around 383,000 metric tons. Management also indicated that trading carries an EBITDA margin of around 5% to 6%, and that imports are primarily done to service market needs rather than generate high profits.

Expansion commissioned: FY27 is the first full year of a larger base

A key event in March 2026 was commissioning of capacity additions at the Meghnagar unit. The investor presentation states that NPK/DAP capacity increased from 330,000 MTPA to 495,000 MTPA, while sulphuric acid capacity increased from 264,000 MTPA to 363,000 MTPA. SSP capacity is stated at 120,000 MTPA, taking total fertilizer capacity to 615,000 MTPA.

Management said on the call that the new expansion commenced production and is expected to stabilise over the next three to four months. The company expects expansion benefits to reflect meaningfully from FY27 onward, driven by improved scale and operating leverage.

On forward expectations, management provided a numeric view of the topline impact. Based on incremental capacity utilisation assumptions, management suggested a revenue increase of roughly Rs 500 crore, implying a FY27 topline of around Rs 2,900 to Rs 3,000 crore. In another response, management stated an overall FY27 revenue growth of about 35% to 40%, including both manufacturing and imports. It also mentioned a plan to import around 150,000 metric tons in FY27, which it estimated could translate into about Rs 1,000 crore of revenue, depending on demand.

Cost headwinds and working capital are the near-term watchlist

While Q4 performance was strong, the call acknowledged a tightening global input environment from mid-February, driven by supply-side constraints, gas-linked production tightness, and higher logistics and freight costs. Management said ammonia and sulphur prices firmed up towards March, creating pressure as domestic demand seasonally moderated late in the quarter.

The company expects part of the input inflation to be offset by government support under the Nutrient Based Subsidy framework, with the remainder addressed through MRP adjustments. Management indicated the subsidy announcement provides relief but does not fully compensate for cost increases. It expects some margin pressure in the first quarter of FY27, and also stated that FY26 margin levels may not be fully sustainable in FY27.

Working capital was another area raised by investors. Management stated subsidy receivables are typically 50 to 55 days, but quarter-end receivables rose due to the timing of imported variant supplies in Q4. In response to an investor question, management provided a split: subsidy receivable of about Rs 400 crore and other receivables of about Rs 300 to Rs 325 crore, and it expects these amounts to be realised during the current quarter.

Green ammonia and integration: a longer-duration strategic bet

Krishana Phoschem highlighted a 10-year green ammonia arrangement for about 70,000 MTPA under the National Green Hydrogen Mission via SECI. The company positioned this as a supply-security and decarbonisation initiative. However, management clarified that green ammonia supply is expected only after approximately three years, and the company will rely on grey ammonia in the interim.

The broader strategic differentiation continues to be backward integration. The presentation highlights beneficiation of low-grade rock phosphate and in-house sulphuric and phosphoric acid capacity. In the call, management said beneficiation is limited to a small set of players, citing constrained domestic rock phosphate reserves, and stated that backward integration is a key contributor to its higher EBITDA margins versus peers.

Takeaways for investors

FY26 was a scale and profitability breakout year for Krishana Phoschem, marked by record revenue, earnings, and high utilisation. The commissioning of added NPK/DAP and sulphuric acid capacity sets up FY27 as the first year of a meaningfully larger production base. At the same time, management commentary flagged a tougher input-cost cycle and acknowledged that margins could moderate, particularly in early FY27, as cost inflation is only partly offset by subsidy and gradually passed through.

The company’s next operating proof points are clear. It needs to ramp the new capacity smoothly, manage the trading-manufacturing mix without stretching working capital, and demonstrate that integration benefits can continue to protect profitability during volatile global commodity cycles.