Paradeep Phosphates Q2 FY27 Profit Falls 64.6% to ₹121 Crore

Paradeep Phosphates Limited reported a 64.6% year-on-year fall in consolidated net profit to ₹121.01 crore in Q2 FY27, even as revenue from operations increased 7.2% to ₹7,364 crore. The result highlights the effect of lower operating margins and a ₹59.98 crore inventory write-down during the quarter.

Why did Paradeep Phosphates' Q2 FY27 profit decline?

Paradeep Phosphates' consolidated profit declined because operating profitability weakened sharply during Q2 FY27. Consolidated EBITDA fell 37.0% year on year to ₹413.45 crore from ₹656.64 crore, while the EBITDA margin narrowed to 5.6% from 9.6% in Q2 FY26. Net profit consequently fell to ₹121.01 crore from the prior-year level implied by the reported 64.6% decline.

A ₹59.98 crore inventory write-down also weighed on the quarter's earnings. The company reported basic earnings per share of ₹1.16 for Q2 FY27, compared with ₹3.30 in Q2 FY26 and ₹3.78 in Q1 FY27. These figures show that the pressure was not limited to a year-on-year comparison, as profitability also moderated from the immediately preceding quarter.

How did revenue and sales volumes perform in Q2 FY27?

Paradeep Phosphates recorded revenue from operations of ₹7,364 crore in Q2 FY27, up 7.2% from ₹6,872 crore a year earlier and 20.2% from ₹6,124 crore in Q1 FY27. Total income stood at ₹7,381.81 crore, rising 6.8% year on year and 20.1% sequentially. The revenue increase came alongside sales volume of about 1 million tonnes during the quarter.

The company said sales volumes remained resilient despite subdued monsoon conditions. Its phosphatic fertiliser market share increased by 1 percentage point, according to the reported half-year update. Higher sales activity supported turnover, but it did not prevent margin compression, indicating that the improvement in volumes and revenue was accompanied by weaker operating realisation or higher costs reflected in the reported profitability measures.

What do the half-year numbers show about operations?

Paradeep Phosphates reported H1 FY27 turnover of ₹13,488 crore, up 19% year on year, with sales volume reaching 2 million tonnes. H1 EBITDA was ₹1,173 crore, while EBITDA per tonne improved to ₹5,866 from ₹5,719 in H1 FY26. The half-year numbers therefore point to an improvement in per-tonne operating performance over the full six-month period despite the weaker second quarter.

The difference between the H1 EBITDA-per-tonne improvement and the Q2 margin decline indicates that the first quarter made a substantial contribution to the half-year outcome. The company reported Q2 EBITDA per tonne of ₹4,250, below the H1 average. This places the Q2 result in the context of a business where quarterly profitability can move materially even when half-year turnover and volumes remain strong.

What is the significance of the phosphoric acid expansion project?

Paradeep Phosphates is expanding phosphoric acid capacity from 5 lakh tonnes to 7 lakh tonnes through a backward integration project. The project is reported to be on track for commissioning in Q1 FY28. The company has indicated that the addition is expected to improve profitability by about $150 per tonne.

Backward integration is important for a phosphatic fertiliser producer because phosphoric acid is a key input. Increasing internal capacity can reduce dependence on external supplies and may improve control over input costs. However, the reported benefit remains linked to commissioning of the project and the operating conditions prevailing after it begins production.

How did the results affect investors and the fertiliser market view?

The results presented a mixed operating picture for investors. Revenue growth, stable quarterly volume near 1 million tonnes, and a 1 percentage point market-share gain supported the company's scale in the phosphatic fertiliser market. But the fall in EBITDA, margin compression, inventory write-down and lower EPS highlighted the pressure on earnings quality during the quarter.

Shares were reported to have fallen 6.58% following the Q2 FY27 announcement. The reaction followed disclosed declines in profitability despite higher revenue. For the broader fertiliser sector, the update underlines the importance of input costs, inventory valuation and monsoon-linked demand conditions in determining quarterly earnings, even where sales volumes are maintained.

Conclusion

Paradeep Phosphates delivered higher Q2 FY27 revenue and maintained sales volumes despite subdued monsoon conditions, but consolidated net profit fell 64.6% to ₹121.01 crore as EBITDA declined and margins narrowed. The ₹59.98 crore inventory write-down added to the pressure, while the H1 figures showed turnover growth of 19% and a modest improvement in EBITDA per tonne.

The next disclosed milestone is the planned commissioning of the phosphoric acid capacity expansion in Q1 FY28. Investors will also watch whether margins recover from the Q2 level, whether volume momentum continues, and how inventory and input-cost conditions influence operating performance.