Deepak Fertilisers and Petrochemicals Corporation Limited (DFPCL) reported resilient Q2 FY26 results amidst global headwinds. TAN business volume grew by 29%, and Crop Nutrition grew by 54%. Overall topline growth was 9%. Specialty products contribute about 22% of H1 revenues. The company anticipates improved performance in the coming quarters with new projects and cost optimizations.
Financial Performance Overview
DFPCL demonstrated resilience in Q2 FY26, achieving a 9% year-on-year growth in operating revenue, reaching INR 3,006 crores. This growth was primarily propelled by strong contributions from the specialty product portfolio within the Crop Nutrition business, which now accounts for 28% of the segment revenue.
Segment Highlights
The Technical Ammonium Nitrate (TAN) business showed robust momentum, with sales volume increasing by 29% year-on-year to 137 KT, achieving full capacity utilization. The B2C segment of the TAN business also saw growth, contributing 14% to total revenue.
In Crop Nutrition, flagship specialty product Croptek recorded a 54% year-on-year growth.
Project Updates and Expansion
The TAN project at Gopalpur is nearing completion at 87%, while the Nitric Acid project at Dahej has reached almost 70% completion. Both projects are on track for commissioning towards the end of Q4 FY26.
Acquisition and Strategic Moves
The company completed the full acquisition of Platinum Blasting Services (PBS), its Australian subsidiary. This move is expected to strengthen DFPCL’s footprint in the Australian market and reinforce its forward integration strategy.
Challenges and Outlook
The Chemical segment faced challenges due to subdued performance in IPA and Ammonia, leading to a segment decline of 21% year-on-year. However, early signs of price stabilization are emerging due to global trade realignment and sanctions. Ammonia prices are expected to rebound, and a planned shutdown in Q4 is anticipated to enhance capacity.
Future Expectations
DFPCL expects around 70% capacity utilization in FY27 and over 80% in FY28 from the new projects. The company anticipates a return to normal margin ranges and expects FY27 to be a stepping stone year, driven by new capacities and improvement in the PCL business.
Ammonia Price and Production
Ammonia prices averaged around $300 per metric ton (FOB Middle East) during the quarter, but are now rebounding above $400. A planned shutdown in Q4 is expected to enhance capacity. The company expects the Equinor natural gas supply to further improve margins.
Source: BSE
