# 1. Financial Performance ## A. Key Figures * **Revenue:** **₹450 Cr** Q2 (+62%) · **₹860 Cr** H1 (+80%) * **EBITDA:** **₹62 Cr** Q2 (+70%) · **₹119 Cr** H1 (+70%) * **PAT:** **₹31 Cr** Q2 (+120%) · **₹59 Cr** H1 (+132%) * **EPS:** **₹3.48** Q2 (+120%) · **₹6.7** H1 (+132%) ## B. Revenue Growth * **Exceptional Top-Line Acceleration:** Revenue surged on the back of high SSP capacity utilization and stable complex fertilizer operations, with strong volume growth and government subsidy support. * **Subsidy Contribution:** H1 performance benefited from a **₹78 crore** investment subsidy from the Madhya Pradesh government, enhancing reported sales. ## C. Profitability Trends * **Outsize Earnings Leverage:** PAT growth significantly outpaced revenue, reflecting operating leverage and sustained cost efficiencies despite flat cash conversion cycle outlook. * **Efficiency Gains:** EBITDA and PAT growth aligned, indicating scalable operations and effective margin management across the product portfolio. ## D. Margin Analysis * **Product-Level Margin Divergence:** NPK generates substantially higher **EBITDA per ton (₹6,000)** versus SSP **(₹1,800)**, highlighting strategic value in product mix. * **Stable Margin Guidance:** Current EBITDA margins for SSP and NPK remain in the **14%-15%** range, with no updated per-ton targets post-expansion. --- # 2. Product & Segment Performance ## A. Key Figures * **NPK Sales Volume:** **116,288 MT** H1 FY26 (+58%) · **56,632 MT** Q2 FY26 * **SSP Sales Volume:** **118,418 MT** H1 FY26 (+14%) · **78,555 MT** Q2 FY26 * **Total Fertilizer Sales Volume:** **234,705 MT** H1 FY26 · **135,187 MT** Q2 FY26 * **Revenue by Product:** **₹512 Cr** from NPK · **₹278 Cr** from SSP ## B. NPK Sales Volume * **Record NPK Performance:** Strong double-digit volume growth and record quarterly sales reflect robust market penetration and capacity utilization. * **Growth Drivers:** Favorable monsoon, rural economic recovery, and strategic supply management underpinned NPK demand surge. ## C. SSP Sales Volume * **SSP Demand Resilience:** Solid volume performance amid farmer shift toward value-added phosphatic fertilizers, including complex and fortified variants. * **Product Innovation:** Launch of **NPK 5:15:0:10** as a DAP substitute targets supply gap, enhancing SSP portfolio relevance. ## D. Revenue by Product * **NPK Dominates Revenue Mix:** NPK delivers the highest realization per unit and is the largest revenue contributor, signaling strategic segment importance. * **Limited Market Share, Insulated Outlook:** Company produces <**2%** of India’s fertilizer demand; unaffected by large-scale DAP import contracts. --- # 3. Capacity & Production ## A. Key Figures * **Fertilizer Production:** **118,541 MT** quarterly (record) · **224,517 MT** half-year * **BRP Crushing:** **45,263 MT** quarterly (96% capacity) · **81,465 MT** half-year (86% utilization) * **Sulphuric Acid Production:** **37,100 MT** quarterly (90% capacity) · **81,892 MT** half-year (99% utilization) * **Future Capacity:** **660,000 tons** DAP/NPK · **570,000 tons** SSP (post-expansion) ## B. Plant Utilization * **Near-Full Utilization:** Operations running at best-in-class efficiency across BRP and sulphuric acid plants, with acid production nearing full capacity. * **Phased Ramp-Up:** Current capacity use is optimized but managed in stages; full operational scale expected by **September 2026** following Sagar and Dhule plant commissioning. * **Captive Integration:** Expanded sulphuric acid capacity dedicated to internal use, reinforcing backward integration strength. ## C. Expansion Projects * **Sagar Project on Track:** 90,000 MTPA DAP/NPK and 165,000 MTPA sulphuric acid expansion progressing with ₹73 crore term loan secured; commissioning expected by **March 2026**. * **No FY26 Revenue Impact:** New capacities from Sagar and Dhule plants will not contribute to sales in FY26, with production starting **end-March/April 2026** and **September 2026**, respectively. ## D. Future Capacity * **Transformational Scale-Up:** SSP and NPK capacities set to more than double by **September 2026**, driving a ~150% increase in total fertilizer capacity. * **Integrated Growth Pipeline:** Dhule plant (330,000 MTPA DAP/NPK, 330,000 MTPA SSP) on schedule for **October 2026** commissioning, completing major capacity buildout. --- # 4. Supply Chain & Input Costs ## A. Key Figures * **Rock Phosphate Landed Cost Change:** **$1 to $3/tonne** (1–3% fluctuation due to freight) * **Green Ammonia Supply Volume:** **130,000 MT/year** (10-year agreement under SECI SIGHT Scheme) ## B. Raw Material Sourcing * **Severe DAP Supply Constraints:** Significant supply deficits in India driven by global disruptions, China export restrictions, and low domestic production. * **Stable Rock Phosphate Costs:** Input prices remained flat over six months with only minor landed cost changes due to freight volatility. * **Elevated Sulphur Costs Mitigated:** Rising Sulphur and Sulphuric Acid prices absorbed through MRP adjustments and expected subsidy revisions. ## C. Green Ammonia Supply * **Strategic Long-Term Offtake Secured:** Selection as preferred buyer in India’s major SECI SIGHT auction ensures stable, long-term Green Ammonia supply for NPK production. * **Import Substitution & Sustainability Boost:** Domestic Green Ammonia sourcing will reduce import dependency and support self-reliance and ESG goals. * **Cost Parity Expected:** Green Ammonia pricing anticipated to align with current imported ammonia parity, though final terms under discussion. ## D. Cost Pass-Through * **Full Cost Recovery Achieved:** No material impact on net price realization from higher Sulphuric Acid costs due to effective pass-through and subsidy support. --- # 5. Demand & Market Conditions ## A. Key Figures * **DAP MRP:** **₹1,350** (government-capped) * **Pricing Outlook:** **SSP and NPK prices** expected to remain stable in H2 FY'26, with potential for slight increases ## B. Rabi Season Demand * **Favorable Agri-Conditions:** Strong Rabi season demand outlook driven by above-normal monsoon, improved soil moisture, and higher water reservoir levels. * **Policy Tailwinds:** MSP hikes for all mandated Rabi crops to boost farm incomes and stimulate input demand, supporting fertilizer offtake. * **Uninterrupted Market Activity:** Sales momentum maintained in early Q3 with no delay in buyer decisions despite pending subsidy announcements; government ensuring supply continuity. * **Company Positioning:** Madhya Bharat well-placed to benefit from balanced fertilization push, favorable agro-climatic conditions, and proactive government availability measures. ## C. Farmer Shift Trends * **Shift to Balanced Nutrition:** Policy-driven adoption of nutrient-based fertilizers is accelerating NPK demand, with tightening stocks signaling restocking ahead of Rabi. * **DAP Substitution Trend:** DAP shortage not structural; government promoting alternatives like SSP and NPK based on soil and crop needs, reinforcing long-term demand shift. * **Sustained NPK Momentum:** NPK production and sales to continue robustly, while DAP volumes expected to remain depressed for the full year. --- # 6. Risks & Regulatory Factors ## A. Subsidy Delays * **Pending Subsidy Notification:** Subsidy accounting for early Q3 sales awaits formal confirmation from the Department of Fertilizers, Government of India, typically effective October 1, 2025. ## B. Import Dependency * **High Import Reliance, Stable Supply:** India imports nearly **50%** of its fertilizer needs, with Rock Phosphate sourced from Jordan, Egypt, Morocco, and Togo; no current supply disruptions reported. * **Strategic Alignment with National Initiatives:** Recent agreements reinforce commitment to Green India Initiative and Atmanirbhar Bharat, supporting renewable energy use and secure raw material access. ## C. Policy Changes * **Merger Under Evaluation:** Company is actively assessing a merger between Krishana Phoschem and Madhya Bharat, with ongoing regulator discussions; execution contingent on approvals and clearances. --- # 7. Guidance & Outlook ## A. Key Figures * H1 Revenue: ₹860 Cr (~80% YoY growth) · H2 Expected: ~₹860 Cr (in line with H1) * **Full-Year Revenue Estimate:** **~₹1,720 Cr** * **CAPEX FY '26:** **₹400 Cr** * **Total Project CAPEX (Sagar & Dhule):** **₹700 Cr** (₹200 Cr spent, ₹200 Cr by Mar '26, remainder H1 FY '27) * **Funding:** **₹430 Cr debt** (₹202 Cr sanctioned, ₹230 Cr in-principle approval) · **Balance from internal accruals** * **Dhule Project Spend:** **₹199 Cr** incurred as of Sep 30, 2025 (₹75 Cr disbursed) * **HDFC-Sanctioned Project Spend:** **₹31 Cr** spent toward March 2026 commissioning ## B. H2 Revenue View * **Revenue Plateau Expected:** H2 revenue projected in line with H1 on an absolute basis, implying a significant deceleration in YoY growth despite sustained scale. * **Forward Momentum:** Operations expected to ramp meaningfully in next fiscal, with management citing potential for improved results pending stakeholder cooperation. ## C. CAPEX Plan * **Funding Structure Confirmed:** ₹700 Cr expansion CAPEX fully funded via **debt (₹430 Cr)** and **internal accruals**, with near-complete sanctioning of required loans. * **Spending Phasing:** FY '26 sees ₹400 Cr in CAPEX, with the bulk of remaining outlay scheduled for H1 FY '27 as projects near completion. ## D. Project Commissioning * **Near-Term Ramp-Up:** Dhule project set to commence by **end-Sept to Oct 2025**, delivering ~6 months of production in FY '27. * **Margin Parity Expected:** New projects anticipated to generate EBITDA per ton **in line with current operations**, underpinned by BRP benefits at Sagar. * **March 2026 Commissioning Target:** One plant remains on track for commissioning by March 2026, with early spend from HDFC funding.