Q2 FY2026 Fertilizers Sector Overview

Fertilizers Sector: Comprehensive Industry Analysis and Company Deep Dive

Small Summary for What's Below

The Indian Fertilizers sector is experiencing robust growth, driven by favorable monsoons, government policy support for farm incomes (MSP hikes), and a strategic push towards balanced nutrition and domestic self-reliance. Phosphatic fertilizers, including DAP, NPK, and SSP, are at the forefront of this growth, benefiting from global supply chain disruptions impacting DAP availability and government initiatives promoting cost-effective indigenous alternatives like SSP. Companies like Coromandel International, Madhya Bharat Agro Products, Krishana Phoschem, and Khaitan Chemicals & Fertilizers are demonstrating strong financial performance, marked by significant revenue and profit growth in H1 FY26. Strategic initiatives include aggressive capacity expansions, backward integration for raw material security, product innovation in fortified fertilizers, and exploration of sustainable solutions like Green Ammonia. While the sector faces risks from raw material price volatility and subsidy dependence, the outlook remains positive, underpinned by sustained agricultural demand and supportive policy frameworks.

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A. INDUSTRY OVERVIEW & MARKET LANDSCAPE

The Indian fertilizer industry is a critical component of the nation's agricultural economy, directly impacting food security and rural livelihoods. India stands as the **second-largest fertilizer consumer globally**, with an annual consumption exceeding **60 million metric tonnes (MT)**. The sector is currently undergoing a significant transformation, driven by both domestic demand dynamics and global supply chain shifts.

**Total Addressable Market Size and Growth Rates:** The Indian fertilizer industry is projected to reach a market size of **USD 16.6 billion by 2032**. This projection underscores a robust growth trajectory for the coming decade, building on the current momentum. The growth is fueled by increasing agricultural output requirements, a growing population, and government support for the agricultural sector.

**Market Structure and Segmentation:** The fertilizer market is broadly segmented by nutrient type and product form: * **Nutrient Types:** Nitrogen (N), Phosphorus (P), Potassium (K), and Sulphur (S) are the primary macronutrients. Micronutrients and fortified fertilizers are also gaining traction. * **Product Forms:** * **Urea:** A nitrogenous fertilizer, its pricing is fixed by the government, and it is heavily subsidized. Domestic urea production increased by 35% in FY24-25, reflecting a push for self-reliance. * **Di-Ammonium Phosphate (DAP):** A phosphatic fertilizer, it is crucial for crop growth. The market has faced severe availability challenges due to global supply chain disruptions, particularly **China's export restrictions**, and low domestic production. India has signed a 5-year deal with Saudi Arabia to import 3.1 million tonnes of DAP to mitigate these issues. * **NPK (Nitrogen, Phosphorus, Potassium) Complex Fertilizers:** These are multi-nutrient fertilizers tailored to specific crop requirements. Their manufacturing surged by 44% in FY24-25. * **Single Super Phosphate (SSP):** A cost-effective, indigenous alternative to DAP, providing both phosphorus (16%) and sulphur (11%). The government is actively promoting its adoption. The SSP market is resilient and expanding. * **Muriate of Potash (MOP):** A potassium-rich fertilizer, almost entirely imported.

**Key End Markets and Applications:** The primary end market is agriculture, with fertilizers being essential inputs for crop cultivation across various seasons (Kharif and Rabi). Demand is directly correlated with: * **Monsoon Performance:** Favorable monsoon conditions (e.g., Kharif 2025, Monsoon 2025) are consistently cited as a key driver for healthy performance and strong demand for agri-inputs. * **Farm Incomes:** Supported by government policies like Minimum Support Price (MSP) hikes across all mandated Rabi crops, which enhance farmers' purchasing power for agri-inputs. * **Crop Sowing:** Robust sowing activity directly translates to higher fertilizer consumption.

**Geographic Distribution and Regional Dynamics:** The companies analyzed demonstrate a wide geographic reach: * **Coromandel International Ltd (CIL):** A major player with a national presence, part of the Murugappa Group. * **Madhya Bharat Agro Products Ltd (MBAPL) & Krishana Phoschem Limited (KPL):** Both part of the Ostwal Group of Industries (OGI), they cover **11 states** with extensive dealer networks. MBAPL has a strong SSP market share of **19% in Chhattisgarh and 9% in Madhya Pradesh**. KPL holds **16% SSP market share in Chhattisgarh and 6% in Madhya Pradesh**. * **Khaitan Chemicals & Fertilizers Ltd (KCFL):** Operates across **19+ states** with 6 strategically located manufacturing plants in Madhya Pradesh, Uttar Pradesh, Rajasthan, Chhattisgarh, and Gujarat. Its SSP market reach via distributor network is approximately **90%**.

**Market Maturity and Lifecycle Stage:** The Indian fertilizer market is in a growth phase, characterized by: * **Policy Push for Balanced Nutrition:** Historically, excessive urea usage has skewed the NPK ratio to **7.7:3.1:1**, significantly deviating from the ideal ratio of **4:2:1**. This has led to **83% of Indian soils being phosphorous deficient**. The government is actively promoting balanced nutrition through policies that encourage the use of P&K fertilizers. * **Fertilizer Self-Reliance:** India imports over **50% of its fertilizer requirements** and key raw materials like rock phosphate, sulfur, potash, and ammonia. There is a strong policy push towards increasing domestic production and reducing import dependence, as evidenced by the surge in domestic urea, DAP, and NPK manufacturing in FY24-25. * **Innovation:** Introduction of fortified and specialized fertilizers (e.g., Urea-SSP, Super 6 fortified SSP with Zinc, Boron, Magnesium) indicates a move towards value-added products.

**Industry Value Chain and Ecosystem:** The fertilizer value chain is complex, starting from raw material sourcing to manufacturing, distribution, and end-user application. * **Raw Material Sourcing:** A significant portion of raw materials (rock phosphate, sulfur, potash, ammonia) is imported. This exposes the industry to global price volatility and supply chain disruptions. Companies are mitigating this through: * **Long-term contracts:** MBAPL has a 10-year long-term contract with Jordan JPMC for rock phosphate. * **Backward Integration:** In-house production of sulphuric acid and phosphoric acid is a key strategic initiative for MBAPL, KPL, and KCFL, aiming to reduce dependency and control costs. * **Manufacturing:** Involves complex chemical processes to convert raw materials into various fertilizer products. * **Distribution:** Extensive networks of wholesalers, dealers, and retailers (e.g., MBAPL/KPL have 2,500+ wholesalers/dealers and 30,000+ retailers; KCFL has 3,000+ dealers and 30,000+ retailers) are crucial for reaching farmers across diverse geographies. * **Government Role:** The government plays a pivotal role through subsidies (Urea price fixed, Non-Urea under NBS scheme with DBT), MSP hikes, and policy directives for balanced nutrition and domestic production.

B. FINANCIAL & ECONOMIC PROFILE

The fertilizer sector, as evidenced by the performance of the analyzed companies, is demonstrating strong financial health and growth, albeit with varying profitability and return profiles influenced by scale, product mix, and strategic investments.

**Industry Aggregate Revenue Scale and Growth Trajectory:** While aggregate industry revenue is projected to reach USD 16.6 billion by 2032, the individual company performances provide a snapshot of the current growth momentum. All companies have reported robust revenue growth in H1 FY26:

• **Coromandel International Ltd (CIL):**

• **Madhya Bharat Agro Products Ltd (MBAPL):**

• **Krishana Phoschem Limited (KPL):**

• **Khaitan Chemicals & Fertilizers Ltd (KCFL):**

**Profitability Levels Across Companies (Gross Margin, EBITDA, Net Margin):** Profitability varies, influenced by product mix (subsidized vs. non-subsidized, trading vs. manufacturing), raw material costs, and operational efficiencies.

• **EBITDA Margins:**

• **Net Profit / PAT Margins:**

**Return Profiles (ROCE, ROE) by Company:** * **CIL:** Book Value per share grew by **20%** in Q2/H1 FY26 vs Q2/H1 FY25, indicating strong equity growth. * **MBAPL (FY25):** Exceptional returns. * **RoE: 48.72%** * **ROCE: 22.24%** * **KPL (FY25):** Strong returns. * **RoE: 21.20%** * **ROCE: 21.20%** * **KCFL:** Recovering from negative returns. * **FY25:** ROCE 5%, ROE 1%. * **FY24:** ROCE -16%, ROE -32%. * **FY23:** ROCE 21%, ROE 14%. The H1 FY26 performance suggests a return to healthier return profiles.

**Working Capital Characteristics and Cash Conversion Cycles:** Working capital management is crucial due to the seasonal nature of demand and the subsidy mechanism. * **CIL:** Reported **Subsidy Outstanding of ₹3,199 Cr as of 30th Sep '25**, up from ₹1,714 Cr on 30th Sep '24. This indicates a significant portion of capital tied up in receivables from the government. * **MBAPL & KPL:** Mention a credit cycle of **45-60 days** for wholesalers/market federations. The subsidy part can take around **100 days** for realization. Trade receivables spiked in Q2 FY26 due to trading activities but are expected to be realized by December. * **KCFL:** Improved working capital days from 78 (FY23) to 76 (FY24) and then to **59 (FY25)**, indicating better efficiency.

**Capital Intensity Requirements:** The fertilizer industry, especially for integrated players, is capital-intensive due to manufacturing facilities, backward integration projects, and capacity expansions. * **MBAPL:** Has massive CAPEX plans totaling over ₹1,200 Cr for Dhule and Sagar expansions. * FY26 CAPEX: **~₹400 Cr**. * FY27 CAPEX: Remaining **~₹300 Cr** of the ₹700 Cr total project cost (Sagar & Dhule) in H1 FY27. * **KPL:** Meghnagar expansion project involves a total investment of **₹142 Cr**. * **CIL:** Increasing depreciation (Q2 FY26: ₹102 Cr vs ₹69 Cr in Q2 FY25; H1 FY26: ₹222 Cr vs ₹134 Cr in H1 FY25) and finance costs (Q2 FY26: ₹102 Cr vs ₹66 Cr in Q2 FY25; H1 FY26: ₹170 Cr vs ₹123 Cr in H1 FY25) suggest ongoing capital investments.

**Revenue Quality (Recurring vs One-time, Contract Length):** The majority of revenue is recurring, driven by continuous agricultural demand. However, trading activities (as seen with KPL, constituting 20%-22% of Q2 FY26 revenue vs 4.5% earlier) can introduce a more opportunistic, one-time component with potentially lower margins. Long-term contracts for raw materials (e.g., MBAPL's 10-year contract with Jordan JPMC for rock phosphate) provide stability to input costs. Green Ammonia supply contracts (MBAPL, KPL) for 10 years also contribute to long-term revenue visibility and cost stability.

C. COMPETITIVE STRUCTURE & DYNAMICS

The Indian fertilizer sector, particularly the phosphatic segment, exhibits a mix of concentration and fragmentation, with strong regional players and national giants.

**Number of Players and Market Concentration:** * The **SSP market alone has ~72 companies** nationally, as per KCFL data, indicating a fragmented landscape for this specific product. * However, the data also highlights the emergence of dominant players within this fragmentation.

**Market Share Distribution (with specific percentages):** * **SSP Segment:** * **Khaitan Chemicals & Fertilizers Ltd (KCFL):** Positions itself as the **2nd largest SSP manufacturer in India**, holding a national SSP market share of **~10%**. * **Madhya Bharat Agro Products Ltd (MBAPL) & Krishana Phoschem Limited (KPL):** Both part of the Ostwal Group of Industries (OGI), they collectively claim to be the **2nd largest SSP producer** and the **4th largest Phosphatic fertilizer producer in India**. * **MBAPL's SSP market share:** **19% in Chhattisgarh** and **9% in Madhya Pradesh**. * **KPL's SSP market share:** **16% in Chhattisgarh** and **6% in Madhya Pradesh**. * The combined market share of MBAPL and KPL in Chhattisgarh (35%) and Madhya Pradesh (15%) for SSP indicates strong regional dominance. * **Overall Phosphatic Fertilizers:** CIL is a major diversified player, while MBAPL and KPL's combined positioning as the 4th largest highlights their growing influence.

**Competitive Intensity Assessment (Porter's 5 Forces style):** * **Threat of New Entrants (Moderate to Low):** * **Entry Barriers:** High capital intensity for setting up integrated manufacturing plants (e.g., MBAPL's Dhule project cost of ₹1,100 Cr). * **Regulatory Hurdles:** Obtaining licenses and complying with environmental regulations can be complex. * **Distribution Network:** Establishing an extensive network of 2,500+ dealers and 30,000+ retailers (MBAPL/KPL) takes time and significant investment. * **Raw Material Sourcing:** Securing long-term contracts for imported raw materials like rock phosphate and sulfur is critical and challenging for new players. * **Bargaining Power of Buyers (Moderate to High):** * **Farmers:** Price sensitivity among farmers is high, especially for essential inputs. * **Government Intervention:** The government acts as a major buyer/regulator through subsidies and fixed MRPs (e.g., DAP MRP restricted to ₹1,350), which limits manufacturers' pricing power. * **Distribution Channels:** Large wholesalers and market federations can exert some pressure. * **Bargaining Power of Suppliers (Moderate to High):** * **Raw Material Imports:** India's over 50% import dependence for key raw materials (rock phosphate, sulfur, potash, ammonia) gives significant power to international suppliers. * **Global Supply Chain Disruptions:** Events like China's export restrictions can severely impact availability and prices, as seen with DAP. * **Mitigation:** Backward integration (in-house sulphuric acid, phosphoric acid production) and long-term supply contracts (MBAPL with Jordan JPMC) are strategies to reduce supplier power. * **Threat of Substitute Products or Services (Moderate):** * **Within Fertilizers:** SSP is a direct, cost-effective indigenous substitute for DAP, especially given DAP shortages and affordability issues. This is a significant dynamic favoring SSP manufacturers. * **Organic Fertilizers:** While a growing segment, they are not yet a large-scale substitute for conventional chemical fertilizers due to yield requirements. * **Balanced Nutrition:** Policy push towards balanced nutrition encourages a mix of fertilizers rather than a single substitute. * **Rivalry Among Existing Competitors (High):** * **Price Competition:** Especially in subsidized segments, competition can be intense. * **Capacity Expansion:** Aggressive capacity expansions by players like MBAPL and KPL indicate a race for market share and scale. * **Product Innovation:** Companies are differentiating through fortified fertilizers and new product offerings (Urea-SSP, Super 6 SSP). * **Geographic Expansion:** Companies are actively entering untapped geographies and institutional channels.

**Entry Barriers and Competitive Moats:** * **Backward Integration:** In-house production of key intermediates like sulphuric acid and phosphoric acid provides a cost advantage, supply security, and quality control. * **Extensive Distribution Networks:** Reaching 20 lakh farmers (MBAPL/KPL) or 30,000+ retailers (KCFL) creates a significant moat. * **Brand Recognition:** Brands like 'Annadata', 'Bharat', 'Khaitan SSP', and 'Utsav SSP' build farmer loyalty. * **Scale and Efficiency:** Larger players benefit from economies of scale in procurement, manufacturing, and distribution. * **Government Relations:** Navigating the complex subsidy regime and policy landscape requires established relationships and understanding.

**Pricing Power Dynamics and Pricing Trends:** * **Subsidized Products:** Pricing power is limited by government-fixed MRPs (e.g., DAP at ₹1,350) and the Nutrient Based Subsidy (NBS) scheme. * **Raw Material Impact:** Fluctuations in raw material prices (Sulfur, Rock Phosphate) directly impact costs. Companies expect revisions in subsidy rates to offset these increases. * **Current Trends (H2 FY26 outlook):** * **NPK:** Expected to be around **₹45,000/ton**, with minor fluctuations (~₹1,000). * **SSP:** Expected to be around **₹15,000-₹16,000/ton**, with similar minor variations. * Prices are generally expected to remain largely stable or see slight increases.

**Differentiation Strategies Employed:** * **Product Innovation:** * **Fortified Fertilizers:** MBAPL introduced NPK 5:15:0:10 as a DAP substitute. KPL launched Urea SSP and Super 6 fortified SSP (with Zinc, Boron, and Magnesium). KCFL is launching Urea-SSP and other value-added, non-subsidized fertilizers. * **Balanced Nutrition:** Aligning with government policy to promote healthier soil and crop yields. * **Backward Integration:** Enhances cost competitiveness and supply reliability. * **Extensive Reach:** Deep penetration into rural markets through robust dealer and retailer networks. * **Sustainability Initiatives:** Green Ammonia projects by MBAPL and KPL position them for future environmental compliance and potentially lower input costs.

**Consolidation Trends and M&A Activity:** The sector shows signs of consolidation and strategic partnerships: * **MBAPL & KPL Merger:** MBAPL is "examining the proposal" for a merger with Krishana Phoschem and is "talking to regulators." This would consolidate two significant players within the Ostwal Group, further strengthening their market position. * **MBAPL Acquisitions:** MBAPL is "exploring acquisition of fertilizer assets," indicating a strategy for inorganic growth. * **CIL Acquisition:** Coromandel International acquired NACL Industries Limited, which became a subsidiary w.e.f. 8th August 2025, expanding its portfolio, likely in crop protection chemicals (CPC segment).

**Competitive Advantages of Each Player:** * **Coromandel International Ltd (CIL):** * **Scale and Diversification:** Part of the Murugappa Group, CIL is a large, diversified agri-input player with strong presence in nutrients and crop protection chemicals (CPC). * **Financial Strength:** Zero net debt to equity, providing financial flexibility for growth and acquisitions. * **Strategic Supply Management:** Ability to manage supply chains effectively, including imports, to meet demand. * **Madhya Bharat Agro Products Ltd (MBAPL) & Krishana Phoschem Limited (KPL) (Ostwal Group):** * **Integrated Operations:** Significant backward integration in sulphuric acid and phosphoric acid, reducing reliance on external suppliers. * **Aggressive Capacity Expansion:** Large-scale CAPEX projects to significantly boost DAP/NPK, SSP, and acid capacities, positioning them for future growth. * **Strong Regional Presence:** Dominant market shares in key agricultural states like Chhattisgarh and Madhya Pradesh for SSP. * **Innovation Focus:** Early adopters of Green Ammonia and developers of fortified SSP. * **Khaitan Chemicals & Fertilizers Ltd (KCFL):** * **SSP Specialization:** As the 2nd largest SSP manufacturer, it benefits from the government's push for SSP as a DAP alternative. * **Strategic Plant Locations:** 6 plants across key agricultural states ensure efficient logistics and market access. * **Backward Integration:** In-house sulphuric acid production at multiple sites. * **Experienced Leadership:** Chairman Mr. Shailesh Khaitan's long-standing role in the SSP Advisory Committee provides deep industry insight and influence.

D. OPERATIONAL CHARACTERISTICS

Operational efficiency, capacity management, and supply chain resilience are critical for success in the fertilizer sector, especially given its capital-intensive nature and reliance on imported raw materials.

**Capacity and Utilization Trends Across Companies:**

• **Coromandel International Ltd (CIL):**

• **Madhya Bharat Agro Products Ltd (MBAPL):**

• **Krishana Phoschem Limited (KPL):**

• **Khaitan Chemicals & Fertilizers Ltd (KCFL):**

**Production Economics and Cost Structures:** * **Backward Integration:** A key strategy to control costs and ensure raw material availability. MBAPL, KPL, and KCFL all have in-house sulphuric acid production. MBAPL and KPL also have significant phosphoric acid capacities. This reduces reliance on external suppliers for these critical intermediates. * **Raw Material Prices:** * **Rock Phosphate:** Marginal fluctuations (1% to 3%) in the last six months, mainly due to freight costs (MBAPL). MBAPL has a 10-year long-term contract with Jordan JPMC, providing price stability. * **Sulfur:** Prices increased from around ₹27,500 per tonne in April 2025 to around ₹33,000 per tonne currently (KPL). This impacts sulphuric acid costs. * **Sulphuric Acid:** Prices moved up from roughly ₹8,000 per tonne in April 2025 to ₹9,000 to ₹10,000 per tonne (KPL), reflecting sulfur price increases. These increases are passed on through MRP, with an expectation of subsidy revisions. * **Phosphoric Acid:** Prices remained stable (KPL). * **Ammonia:** Softened (KPL). * **Green Ammonia Initiative:** MBAPL and KPL's selection as preferred buyers of Green Ammonia under SECI's SIGHT Scheme for 10 years (MBAPL: 130,000 MTPA; KPL: 70,000 MTPA) is a long-term strategy to secure a sustainable and potentially cost-effective nitrogen source, reducing reliance on conventional ammonia.

**Supply Chain Structure and Dependencies:** * **High Import Dependence:** India imports over **50% of its key fertilizer raw materials** (rock phosphate, sulfur, potash, ammonia). This makes the supply chain vulnerable to global geopolitical events, trade policies (e.g., China's export restrictions on DAP), and freight costs. * **Strategic Sourcing:** Companies like CIL rely on a mix of manufactured and imported volumes for NPK+DAP to manage supply. MBAPL's long-term contract for rock phosphate is a de-risking strategy. * **Domestic Focus for Projects:** MBAPL and KPL emphasize that most purchases for their CAPEX projects are indigenous, reducing reliance on international supply chains for project execution.

**Technology Landscape and Innovation Pace:** * **Backward Integration Technologies:** Expertise in manufacturing sulphuric acid and phosphoric acid is a core technological capability. * **Fortified Fertilizers:** R&D efforts are focused on developing innovative, value-added products like Urea-SSP and fortified SSP with micronutrients (Zinc, Boron, Magnesium) to address soil deficiencies and promote balanced nutrition. * **Green Technologies:** Adoption of Green Ammonia under the SECI SIGHT Scheme represents a significant step towards sustainable manufacturing and reducing the carbon footprint.

**Operational Efficiency Benchmarks:** * **EBITDA per Tonne:** MBAPL's EBITDA per tonne grew by 31.0% YoY in Q2 FY26 and 29.2% YoY in H1 FY26, indicating improved operational efficiency and/or better realizations. * **Capacity Utilization:** High utilization rates (e.g., MBAPL's SSP at 104%, KPL's SSP at 111%) demonstrate efficient asset utilization. * **Working Capital Days:** KCFL's reduction in working capital days from 78 to 59 in FY25 points to improved cash conversion.

**Key Performance Indicators (Company-Specific and Industry Averages):** * **Production Volumes:** Total fertilizer production (MBAPL: 1,18,541 MT in Q2 FY26, KPL: 95,783 MT in Q2 FY26) and sales volumes are key indicators of operational scale. * **Capacity Utilization:** Directly impacts cost efficiency. * **Raw Material Consumption:** Efficient use of raw materials is crucial. * **Energy Consumption:** Power generation from waste heat (TG Power plants at KCFL's facilities) contributes to energy efficiency and cost reduction.

**Asset Efficiency Metrics:** * **ROCE (Return on Capital Employed):** MBAPL (22.24% in FY25) and KPL (21.20% in FY25) demonstrate strong asset efficiency. KCFL's ROCE recovered to 5% in FY25 from negative in FY24, indicating improving asset utilization. * **Capital Expenditure (CAPEX):** The significant CAPEX plans of MBAPL and KPL are aimed at expanding their asset base to drive future revenue and profit growth.

E. GROWTH DYNAMICS & DRIVERS

The fertilizer sector is experiencing a period of accelerated growth, fueled by a confluence of favorable macroeconomic conditions, supportive government policies, and strategic company-level initiatives.

**Historical Growth Trajectory (3-5 year view with specific rates):**

• **Coromandel International Ltd (CIL):**

• **Madhya Bharat Agro Products Ltd (MBAPL):**

• **Krishana Phoschem Limited (KPL):**

• **Khaitan Chemicals & Fertilizers Ltd (KCFL):**

**Current Growth Rates and Acceleration/Deceleration:** The H1 FY26 results across all companies show an acceleration in revenue and profit growth compared to historical CAGRs for MBAPL and KPL, and a strong turnaround for KCFL. CIL also maintains robust double-digit growth. This indicates a strong current growth phase for the sector.

**Volume vs Price Contribution to Growth:** * **Volume Growth:** Clearly a significant contributor. * CIL's total NPK+DAP volumes grew by **16.7%** in H1 FY26. Urea volumes grew by **42.3%**. * MBAPL's H1 FY26 sales volumes were **2,34,705 MT**, with SSP sales up **14%** and NPK sales up **58%** YoY. * KPL's H1 FY26 sales volumes were **2,12,441 MT**, with SSP sales up **19%** and NPK sales up **46%** YoY. * KCFL's H1 FY26 fertilizer volumes grew by **11%** YoY. * **Price Contribution:** While specific price contributions are not quantified, management guidance suggests stable to slightly increasing prices for SSP and NPK in H2 FY26. Raw material price increases (e.g., Sulfur) are being passed on through MRP, with expectations of subsidy revisions to maintain margins. This implies that price increases, where feasible, also contribute to revenue growth.

**Organic vs Inorganic Growth Components:** * **Organic Growth:** Predominantly driven by capacity expansions (MBAPL, KPL, KCFL), increased utilization, and product innovation (fortified fertilizers). * **Inorganic Growth:** Evident through: * **CIL's acquisition of NACL Industries Limited** (effective August 2025), expanding its portfolio. * **MBAPL's exploration of fertilizer asset acquisitions**. * **MBAPL and KPL examining a potential merger**, which would be a significant consolidation within the Ostwal Group.

**Geographic Expansion Opportunities and Progress:** * **Untapped Geographies:** KCFL is actively "entering untapped geographies and institutional channels," indicating room for market penetration. * **Existing Reach:** All companies already cover multiple states (11-19+), suggesting a focus on deepening penetration within existing markets while selectively expanding.

**Product/Service Innovation Pipeline:** * **Fortified Fertilizers:** A key area of innovation. * MBAPL introduced **NPK 5:15:0:10** as a DAP substitute. * KPL launched **Urea SSP and Super 6 fortified SSP** (with Zinc, Boron, and Magnesium). * KCFL is launching **Urea-SSP and value-added, non-subsidized fertilizers**. * **Balanced Nutrition:** Innovation is aligned with the policy push for balanced nutrition, addressing soil health and crop productivity. * **Green Ammonia:** MBAPL and KPL's initiatives to procure Green Ammonia represent a significant innovation in sustainable raw material sourcing.

**Adjacent Market Opportunities:** * **Crop Protection Chemicals (CPC):** CIL has a CPC segment, which showed strong growth (Standalone Q2 FY26 Revenue: ₹829 Cr, 10% Gr%; PBIT: ₹162 Cr, 48% Gr%). The acquisition of NACL further strengthens this segment. * **Specialty Chemicals:** KCFL is engaged in specialty chemicals like Sulphuric Acid, Oleum, Liquid Sulphur Trioxide, and Sodium Silico Fluoride (SSF), providing diversification beyond fertilizers.

**Customer Acquisition and Penetration Trends:** * **Extensive Networks:** Companies leverage vast networks of wholesalers, dealers, and retailers (e.g., 2,500+ dealers and 30,000+ retailers for MBAPL/KPL and KCFL) to reach a large farmer base (20 lakh farmers for MBAPL/KPL). * **Promotional Activities:** KCFL promotes SSP adoption through "on-ground and digital initiatives." * **Institutional Channels:** KCFL is also targeting institutional channels for growth.

F. RISK LANDSCAPE

The fertilizer sector, while currently experiencing strong growth, is exposed to several inherent risks, ranging from global economic and geopolitical factors to domestic policy and environmental dependencies.

**Industry-Wide Systematic Risks:**

• **Global Supply Chain Vulnerabilities:**
• **Raw Material Price Volatility:**
• **Policy and Regulatory Risks:**
• **Environmental and Climate Risks:**

**Cyclicality and Economic Sensitivity:** * **Agricultural Cycles:** The fertilizer industry is inherently cyclical, tied to agricultural seasons (Kharif and Rabi) and overall farm income levels. * **Rural Economy:** The "improving rural economy" is a key growth driver, but any downturn in rural incomes or agricultural prosperity can dampen demand.

**Regulatory and Policy Risks by Geography:** * While the data primarily focuses on India, global trade policies and regulations in raw material exporting countries directly impact the Indian market. * Domestic policies, such as the "continued policy push towards balanced nutrition," while supportive, also dictate product focus and market development.

**Technology Disruption Threats:** * While not explicitly detailed as a major threat, advancements in precision agriculture, alternative nutrient delivery systems, or highly efficient microbial fertilizers could, in the long term, alter demand patterns for traditional chemical fertilizers. However, the current focus is on innovation within the existing framework (fortified fertilizers, Green Ammonia).

**ESG and Sustainability Challenges:** * **Environmental Impact:** Manufacturing processes for fertilizers, particularly sulphuric and phosphoric acid, can have environmental footprints. The "Green India Initiative" and procurement of "Green Ammonia" by MBAPL and KPL are proactive steps to address these concerns and align with sustainability goals. * **Resource Depletion:** Reliance on finite resources like rock phosphate poses a long-term sustainability challenge.

**Supply Chain Vulnerabilities:** * **DAP Shortage:** "Disruptions in global supply chain (China's export restrictions, low domestic productions) severely impacted DAP availability." This highlights a critical vulnerability. India's deal with Saudi Arabia for DAP imports is an attempt to mitigate this. * **Logistics:** Efficient transportation and storage are crucial, especially for a bulk commodity. Any disruptions in logistics infrastructure can impact supply to farmers.

**Competitive Threats (New Entrants, Substitutes):** * **Intra-segment Competition:** The SSP market, with 72 companies, is competitive. The push for SSP as a DAP substitute intensifies competition among SSP manufacturers. * **Consolidation:** While M&A can strengthen players, it also means larger, more formidable competitors. The potential merger of MBAPL and KPL would create a stronger entity.

**Customer Concentration Risks:** * While the customer base (farmers) is highly fragmented, the dependence on government policies (subsidies, MSP) means that the government effectively acts as a major "customer" or influencer, introducing a form of concentration risk in terms of policy decisions.

**Risks to Projects (MBAPL & KPL):** * Management for MBAPL and KPL states that risks to their large CAPEX projects are mitigated by: * **Indigenous Purchases:** Most purchases are indigenous, reducing international supply chain risks for equipment. * **Strong Track Record:** Established history of project execution. * **Sufficient Internal Accruals:** Funding supported by internal cash generation. * **Debt Tied Up:** Secured financing from banks (SBI, Axis, Federal, HDFC). * **Experienced Teams:** Skilled engineers and experienced promoters. * **No Major Risks:** Except for unforeseen natural events.

G. CAPITAL ALLOCATION & INVESTOR RETURNS

Capital allocation strategies in the fertilizer sector are heavily influenced by the need for capacity expansion, backward integration, and managing working capital, all while aiming to deliver strong investor returns.

**Capex Trends and Requirements (Growth vs Maintenance):**

The companies analyzed are undertaking significant capital expenditures, primarily for growth-oriented capacity expansions and backward integration, rather than just maintenance.

• **Madhya Bharat Agro Products Ltd (MBAPL):**

• **Krishana Phoschem Limited (KPL):**

• **Coromandel International Ltd (CIL):**

**R&D Investment Levels as % of Revenue:** Specific R&D percentages are not provided, but companies like KPL mention "innovation-led R&D efforts on fortified fertilizers," indicating a commitment to product development. This R&D is crucial for developing new, value-added products and improving existing ones to meet the policy push for balanced nutrition.

**Dividend Policies and Payout Ratios:** No specific dividend policies or payout ratios are mentioned in the provided data. However, strong PAT growth and healthy cash generation typically support dividend distributions.

**Share Buyback Programs:** No information on share buyback programs is provided.

**M&A Activity and Strategy:** M&A is a notable capital allocation strategy in the sector: * **CIL:** Acquired **NACL Industries Limited**, which became a subsidiary on August 8, 2025, demonstrating a strategy to expand its portfolio, likely in crop protection chemicals. * **MBAPL:** Is "exploring acquisition of fertilizer assets," indicating a proactive inorganic growth strategy. * **MBAPL & KPL:** Are "examining the proposal" for a merger, which would consolidate their operations and market position within the Ostwal Group. This suggests a strategy to achieve greater scale and synergy.

**Cash Generation and Free Cash Flow Profiles:** * **Strong PAT Growth:** All companies, particularly MBAPL and KPL, have reported significant PAT growth in H1 FY26 (MBAPL up 132%, KPL up 93%), which directly contributes to strong internal accruals. * **Internal Accruals for CAPEX:** MBAPL and KPL explicitly state that their CAPEX projects are funded by a mix of term loans and "sufficient internal accruals," highlighting healthy cash generation. * **Working Capital Management:** Efficient working capital management (e.g., KCFL's reduced working capital days) is crucial for converting profits into free cash flow, especially given the subsidy outstanding (CIL) and credit cycles (MBAPL, KPL). * **Debt Management:** * **CIL:** Maintains a **Net Debt to equity ratio of 0.0 times**, indicating a very strong balance sheet and high financial flexibility. * **MBAPL:** Has long-term debt outstanding of **~₹150 Cr** (vs EBITDA of ~₹130-₹140 Cr), suggesting a manageable debt level relative to its earnings. Management states "no immediate reduction in borrowings necessary, focus on operational efficiency. No current plans for equity infusion." * **KCFL:** Net Debt to Equity improved to **1.0** in H1 FY26 from 1.3 in FY25 and 1.4 in FY24, indicating deleveraging and improved financial health.

**Capital Efficiency Improvements:** * **High ROCE/ROE:** MBAPL (ROCE 22.24%, RoE 48.72% in FY25) and KPL (ROCE 21.20%, RoE 21.20% in FY25) demonstrate excellent capital efficiency, generating high returns on their capital base. * **Capacity Utilization:** High utilization rates of existing assets (e.g., MBAPL's SSP at 104%, KPL's SSP at 111%) ensure optimal use of invested capital. * **Backward Integration:** Investing in in-house production of intermediates like sulphuric and phosphoric acid is a long-term capital efficiency play, reducing external costs and improving margins.

H. FUTURE OUTLOOK & PROJECTIONS

The outlook for the Indian fertilizer sector remains largely positive, driven by sustained agricultural demand, supportive government policies, and strategic expansion initiatives by key players.

**Industry Growth Projections (with timeframes):** * The Indian fertilizer industry is projected to reach **USD 16.6 billion by 2032**. This long-term projection indicates a continued growth trajectory for the sector. * The current momentum, characterized by robust H1 FY26 performance across companies, suggests that the industry is well on track to meet or exceed these projections.

**Management Guidance Across Companies:**

• **Coromandel International Ltd (CIL):**

• **Madhya Bharat Agro Products Ltd (MBAPL):**

• **Krishana Phoschem Limited (KPL):**

• **Khaitan Chemicals & Fertilizers Ltd (KCFL):**

**Emerging Opportunities and Whitespace:** * **Balanced Nutrition:** The continued policy push towards balanced nutrition creates a significant opportunity for fortified and complex fertilizers that address specific soil deficiencies (e.g., phosphorous deficiency in 83% of Indian soils). * **Fertilizer Self-Reliance:** India's drive to reduce import dependence (currently over 50% for key raw materials and complex fertilizers) creates a whitespace for domestic manufacturers to expand capacity and backward integrate. * **Green Ammonia:** The "Green India Initiative" and SECI's SIGHT Scheme for Green Ammonia present a long-term opportunity for sustainable and potentially cost-effective nitrogen sourcing, aligning with global ESG trends. * **Value-Added Products:** Innovation in specialized and fortified fertilizers (Urea-SSP, Super 6 SSP) offers higher margin opportunities. * **Untapped Geographies/Channels:** KCFL's strategy to enter these areas suggests ongoing market expansion potential.

**Transformation Themes and Inflection Points:** * **Shift from Urea-centric to Balanced Nutrition:** This is a fundamental transformation, driving demand for P&K fertilizers. * **Backward Integration:** The aggressive backward integration into sulphuric and phosphoric acid by MBAPL, KPL, and KCFL is a key inflection point, enhancing self-sufficiency and cost control. * **Sustainability:** The adoption of Green Ammonia marks a significant step towards a more sustainable and environmentally friendly fertilizer industry. * **Consolidation:** Potential mergers and acquisitions (MBAPL-KPL merger talks, MBAPL exploring acquisitions, CIL's NACL acquisition) could lead to a more consolidated and efficient industry structure.

**Long-Term Structural Trends (5-10 year view):** * **Increasing Agricultural Productivity:** Driven by population growth and food security needs, ensuring sustained demand for fertilizers. * **Focus on Soil Health:** Growing awareness and policy emphasis on soil health will drive demand for specialized and fortified fertilizers. * **Sustainability and Green Technologies:** The long-term trend towards reducing carbon footprint and adopting green manufacturing processes will continue to shape the industry. * **Digitalization in Agriculture:** While not explicitly detailed, digital initiatives (KCFL's digital promotion) could become more prevalent in farmer outreach and product adoption.

**Potential Disruptions on the Horizon:** * **Major Geopolitical Shocks:** Further disruptions to global raw material supply chains could severely impact the industry. * **Radical Technological Breakthroughs:** While not imminent, significant breakthroughs in bio-fertilizers or nutrient delivery could alter the market. * **Climate Change Impacts:** More frequent extreme weather events could impact agricultural output and fertilizer demand volatility.

**Expected Margin Evolution:** * Management guidance from MBAPL and KPL suggests a consistent operating margin target of **13%-15%**. * The ability to pass on raw material cost increases and receive timely subsidy revisions will be crucial for maintaining these margins. * Backward integration is expected to provide a structural advantage in margin stability. * Higher trading components (as seen with KPL in Q2 FY26) can temporarily dilute margins.

I. COMPANY-BY-COMPANY PROFILES

Coromandel International Ltd (CIL)

**Company Description:** Coromandel International Ltd (CIL) is a leading Indian agri-input company, part of the Murugappa Group. It operates primarily in the nutrients (fertilizers) and crop protection chemicals (CPC) segments, offering a comprehensive range of products and solutions to farmers.

**Scale Metrics:** * **Revenue (H1 FY26):** ₹16,696 Cr * **Nutrients Segment Sales (H1 FY26):** ₹15,013 Cr * **CPC Segment Sales (Standalone Q2 FY26):** ₹829 Cr * **Net Debt to Equity:** 0.0 times (Q2 FY26) - indicating a very strong balance sheet.

**Financial Performance Summary:** * **Strong Growth:** * Q2 FY26 Revenue: ₹9,654 Cr (30% growth YoY) * H1 FY26 Revenue: ₹16,696 Cr (37% growth YoY) * Q2 FY26 PAT: ₹793 Cr (20% growth YoY) * H1 FY26 PAT: ₹1,295 Cr (34% growth YoY) * **Stable Margins:** * Q2 FY26 EBITDA Margin: 12% (vs 13% in Q2 FY25) * H1 FY26 EBITDA Margin: 12% (vs 12% in H1 FY25) * Q2 FY26 PAT Margin: 8% (vs 9% in Q2 FY25) * H1 FY26 PAT Margin: 8% (vs 8% in H1 FY25) * **Healthy Returns:** Book Value per share grew by 20% in Q2/H1 FY26. Basic EPS grew by 34% in H1 FY26. * **Subsidy Outstanding:** ₹3,199 Cr as of 30th Sep '25 (up from ₹1,714 Cr on 30th Sep '24), indicating significant working capital tied up.

**Strategic Priorities and Focus Areas:** * **Nutrients Segment Growth:** Continued focus on expanding sales and PBIT in its core nutrients business (H1 FY26 PBIT ₹1,613 Cr, 26% growth). * **Diversification into CPC:** Strengthening its crop protection chemicals segment, as evidenced by the acquisition of NACL Industries Limited. * **Strategic Supply Management:** Balancing manufactured and imported volumes (NPK+DAP imported volumes grew 115.8% in H1 FY26) to ensure product availability. * **Innovation and Operational Excellence:** Dedicated to driving sustainable, long-term growth through these pillars.

**Competitive Advantages and Positioning:** * **Market Leadership:** A major player in the Indian fertilizer and agri-input market. * **Financial Strength:** Zero net debt provides significant financial flexibility. * **Diversified Portfolio:** Presence in both nutrients and CPC segments offers resilience. * **Murugappa Group Backing:** Benefits from the strong reputation and resources of the Murugappa Group.

**Key Metrics and KPIs Specific to the Company:** * **NPK+DAP Total Volume (H1 FY26):** 25.06 Lakh MT (16.7% growth YoY). * **Urea Volume (H1 FY26):** 7.20 Lakh MT (42.3% growth YoY). * **Subsidy Outstanding:** A key working capital metric.

**Management Outlook and Guidance:** * Confident about the outlook for H2 FY25-26. * Expects favorable monsoon, improving rural economy, strategic supply management, and MSP hikes to contribute to healthy performance. * Committed to innovation and operational excellence for sustainable, long-term growth.

**Recent Developments and Initiatives:** * NACL Industries Limited became a subsidiary of Coromandel w.e.f. 8th August 2025.

Madhya Bharat Agro Products Ltd (MBAPL)

**Company Description:** Madhya Bharat Agro Products Ltd (MBAPL), part of the Ostwal Group of Industries (OGI), is a leading producer of phosphatic fertilizers in India, specializing in SSP and NPK/DAP complex fertilizers. It was acquired in 2004.

**Scale Metrics:** * **Revenue (H1 FY26):** ₹860 Cr * **Market Cap (Sep-25):** ₹3,318 Cr (76% 5-year CAGR) * **Market Position:** 2nd largest SSP & 4th largest Phosphatic fertilizer producer in India (as part of OGI). * **SSP Market Share:** 19% in Chhattisgarh, 9% in Madhya Pradesh. * **Total Capacity after expansion:** More than 1.2 million tons (12 lakh tons) of fertilizer (660,000 tons DAP/NPK, 570,000 tons SSP).

**Financial Performance Summary:** * **Exceptional Growth:** * Q2 FY26 Revenue: ₹450.2 Cr (61.8% growth YoY) * H1 FY26 Revenue: ₹860 Cr (80% growth YoY) * Q2 FY26 PAT: ₹30.5 Cr (120.1% growth YoY) * H1 FY26 PAT: ₹59 Cr (132% growth YoY) * 5-Year CAGR (FY21-FY25): Revenue ~58%, PAT ~31%. * **Strong Margins:** * Q2 FY26 EBITDA Margin: 13.7% (vs 13.0% in Q2 FY25) * H1 FY26 EBITDA Margin: 13.8% (vs 14.6% in H1 FY25) * Management aims for 14%-15% EBITDA margin. * EBITDA Per Tonne (H1 FY26): ₹5,095.3 (29.2% growth YoY). * **High Returns:** RoE 48.72%, ROCE 22.24% (FY25). * **Debt:** Long-term debt outstanding ~₹150 Cr (vs EBITDA ~₹130-₹140 Cr).

**Strategic Priorities and Focus Areas:** * **Aggressive Capacity Expansion:** Major CAPEX projects at Dhule (₹1,100 Cr) and Sagar (₹107 Cr) for DAP/NPK, SSP, phosphoric acid, and sulphuric acid. * **Backward Integration:** Enhancing in-house production of phosphoric acid and sulphuric acid to secure raw material supply and improve cost efficiency. * **Product Diversification:** Introduced fortified SSP range including NPK 5:15:0:10 as a DAP substitute. * **Sustainability:** Green India Initiative, selected as preferred buyer of 1,30,000 MTPA of Green Ammonia under SECI's SIGHT Scheme for 10 years. * **Inorganic Growth:** Exploring acquisition of fertilizer assets. * **Consolidation:** Examining merger proposal with Krishana Phoschem.

**Competitive Advantages and Positioning:** * **Integrated Operations:** Significant backward integration provides cost control and supply security. * **Strong Growth Trajectory:** Demonstrated ability to achieve high revenue and profit growth. * **Extensive Distribution:** 2,500+ wholesalers/dealers, 30,000+ retailers, covering 20 lakh farmers across 11 states. * **Long-term Raw Material Contracts:** 10-year contract with Jordan JPMC for rock phosphate.

**Key Metrics and KPIs Specific to the Company:** * **Highest-ever fertilizer production (Q2 FY26):** 1,18,541 MT. * **Highest Quarterly sales volume (Q2 FY26):** 1,35,187 MT. * **SSP capacity utilization (Q2 FY26):** 104%. * **NPK/DAP capacity utilization (Q2 FY26):** 94%. * **EBITDA Per Tonne:** ₹5,095.3 (H1 FY26).

**Management Outlook and Guidance:** * Confident about H2 FY'26 due to strong demand and strategic initiatives. * H2 FY'26 revenue expected to be around ₹850 Cr, with slightly better prices. * FY'26 CAPEX: ~₹400 Cr. FY'27 CAPEX: ~₹300 Cr. * New capacity utilization expected at 50%-55% in the first year, increasing to 80%+. * No plans for immediate reduction in borrowings or equity infusion.

**Recent Developments and Initiatives:** * Commissioned Phosphoric Acid Plant at Sagar in March 2025. * Selected as preferred buyer for Green Ammonia. * Examining merger with Krishana Phoschem.

Krishana Phoschem Limited (KPL)

**Company Description:** Krishana Phoschem Limited (KPL), also part of the Ostwal Group of Industries (OGI), is a significant player in the Indian phosphatic fertilizer market, focusing on SSP and NPK/DAP complex fertilizers. It was acquired in 2007.

**Scale Metrics:** * **Revenue (H1 FY26):** ₹1,003 Cr * **Market Cap (FY25):** ₹1,509 Cr (64% 5-year CAGR) * **Market Position:** 2nd largest SSP and 4th largest Phosphatic fertilizer producer in India (as part of OGI). * **SSP Market Share:** 16% in Chhattisgarh, 6% in Madhya Pradesh. * **Total Capacity after expansion:** ~0.45 million tonnes for NPK/DAP and SSP (495,000 tonnes NPK/DAP, 120,000 tonnes SSP).

**Financial Performance Summary:** * **Exceptional Growth:** * Q2 FY26 Revenue: ₹608 Cr (102% growth YoY) * H1 FY26 Revenue: ₹1,003 Cr (73% growth YoY) * Q2 FY26 PAT: ₹33 Cr (99% growth YoY) * H1 FY26 PAT: ₹64 Cr (93% growth YoY) * 5-Year CAGR (FY21-FY25): Revenue ~53%, PAT ~44%. * **Healthy Margins (with slight Q2 dip due to trading):** * Q2 FY26 EBITDA Margin: 12.1% (vs 13.4% in Q2 FY25) * H1 FY26 EBITDA Margin: 13.8% (vs 14.1% in H1 FY25) * Management aims for 13%-14% operating margin consistently. * EBITDA per ton: SSP around ₹1,900-₹2,000; NPK around ₹6,000+. * **Strong Returns:** RoE 21.20%, ROCE 21.20% (FY25).

**Strategic Priorities and Focus Areas:** * **Capacity Expansion:** Meghnagar expansion project (₹142 Cr) to increase NPK/DAP and Sulphuric Acid capacity. * **Backward Integration:** Expanding Sulphuric Acid capacity to enhance self-sufficiency. * **Product Innovation:** Launched Urea SSP and Super 6 fortified SSP (with Zinc, Boron, and Magnesium). * **Sustainability:** Selected as preferred buyer of 70,000 MTPA of Green Ammonia under SECI's SIGHT Scheme for 10 years. * **Consolidation:** Examining merger proposal with Madhya Bharat Agro Products.

**Competitive Advantages and Positioning:** * **Integrated Operations:** In-house sulphuric and phosphoric acid production. * **Strong Growth & Profitability:** Consistent high growth rates and healthy returns. * **Extensive Distribution:** Shares the Ostwal Group's robust network of 2,500+ wholesalers/dealers and 30,000+ retailers, covering 20 lakh farmers. * **Innovation Focus:** R&D efforts on fortified fertilizers.

**Key Metrics and KPIs Specific to the Company:** * **Highest-ever fertilizer production (Q2 FY26):** 95,783 MT. * **Highest Quarterly sales volume (Q2 FY26):** 1,21,491 MT. * **SSP capacity utilization (Q2 FY26):** 111%. * **Trading component (Q2 FY26):** 20%-22% of total revenue (vs 4.5% earlier).

**Management Outlook and Guidance:** * Expects similar results in H2 FY'26 as H1. * FY'26 revenue guidance of ₹1,500 Cr is conservative, likely to exceed. * Post-CAPEX, potential revenue around ₹1,800-₹2,000 Cr from DAP-NPK. * New capacity utilization expected at 50%-55% in the first year, increasing to 80%+. * Will continue expanding capacity and diversifying portfolio over the next five years.

**Recent Developments and Initiatives:** * Selected as preferred buyer for Green Ammonia. * Examining merger with Madhya Bharat Agro Products.

Khaitan Chemicals & Fertilizers Ltd (KCFL)

**Company Description:** Khaitan Chemicals & Fertilizers Ltd (KCFL), established in 1982, is the second-largest SSP manufacturer in India. It also produces specialty chemicals like Sulphuric Acid, Oleum, and Liquid Sulphur Trioxide.

**Scale Metrics:** * **Operational Revenue (H1 FY26):** ₹5,429 Mn (₹542.9 Cr) * **Market Position:** 2nd largest SSP manufacturer in India. * **National SSP Market Share:** ~10% (amongst 72 companies). * **SSP Manufacturing Capacity:** 11.1 Lakh MT. * **Manufacturing Plants:** 6 strategically located plants across 5 states.

**Financial Performance Summary:** * **Strong Turnaround:** * Q2 FY26 Operational Revenue: ₹3,086 Mn (33.8% growth YoY) * H1 FY26 Operational Revenue: ₹5,429 Mn (50.5% growth YoY) * Q2 FY26 PAT: ₹215 Mn (vs loss of ₹31 Mn in Q2 FY25) * H1 FY26 PAT: ₹429 Mn (vs loss of ₹198 Mn in H1 FY25) * **Significant Margin Recovery:** * Q2 FY26 EBITDA Margin: 10.05% (vs 3.73% in Q2 FY25), a 632 Bps increase. * H1 FY26 EBITDA Margin: 11.57% (vs 0.47% in H1 FY25). * FY25 EBITDA margin was 3.2%, recovering from -5.6% in FY24. * **Improving Returns:** ROCE 5%, ROE 1% (FY25), recovering from negative returns in FY24. * **Deleveraging:** Net Debt to Equity improved to 1.0 in H1 FY26 from 1.3 in FY25. * **Working Capital:** Improved to 59 days in FY25.

**Strategic Priorities and Focus Areas:** * **SSP Market Leadership:** Leveraging its position as the 2nd largest SSP manufacturer, benefiting from the government's push for SSP as a DAP alternative. * **Backward Integration:** In-house sulphuric acid production at multiple plants for cost control. * **Product Innovation:** Launching Urea-SSP and value-added, non-subsidized fertilizers. * **Market Expansion:** Entering untapped geographies and institutional channels. * **Brand Building:** Promoting SSP adoption through on-ground and digital initiatives for "Khaitan SSP" and "Utsav SSP" brands. * **Specialty Chemicals:** Diversifying revenue streams through sulphuric acid and other specialty chemicals.

**Competitive Advantages and Positioning:** * **SSP Specialization:** Deep expertise and market penetration in the SSP segment. * **Extensive Reach:** 6 strategically located plants and a vast network of 3,000+ dealers and 30,000+ retailers covering 19+ states. * **Integrated Manufacturing:** In-house sulphuric acid production at multiple sites. * **Experienced Leadership:** Chairman's long-standing role in the SSP Advisory Committee.

**Key Metrics and KPIs Specific to the Company:** * **Fertilizers Volume (H1 FY26):** 2.58 Lakh MT (11% growth YoY). * **Chemicals Volume (H1 FY26):** 0.69 Lakh MT (18% growth YoY). * **SSP delivers primary nutrients:** 16% phosphate, 11% Sulphur.

**Management Outlook and Guidance:** * Growth driven by strong demand for SSP, improved realizations, and higher sales volumes. * Favorable monsoon outlook and SSP substituting trend (given DAP shortages) are supportive demand triggers. * Government approval of ₹37,952 Cr under NBS scheme for P&K fertilizers (Rabi 2025-26) expected to support affordability and sustain fertilizer demand.

**Recent Developments and Initiatives:** * Continued focus on launching innovative offerings and promoting SSP adoption.

J. TABLES

**Table 1: Coromandel International Ltd - Consolidated Financial Performance (Q2 & H1 FY26 vs FY25)**

| Metric | Q2 FY26 (₹ Cr) | Q2 FY25 (₹ Cr) | Q2 Gr% | H1 FY26 (₹ Cr) | H1 FY25 (₹ Cr) | H1 Gr% | | :------------------------ | :------------- | :------------- | :----- | :------------- | :------------- | :----- | | Revenue from Operations | 9,654 | 7,433 | 30% | 16,696 | 12,162 | 37% | | EBITDA* | 1,147 | 975 | 18% | 1,929 | 1,481 | 30% | | EBITDA Margin % | 12% | 13% | | 12% | 12% | | | Depreciation | 102 | 69 | | 222 | 134 | | | Finance cost | 102 | 66 | | 170 | 123 | | | Profit After Tax | 793 | 659 | 20% | 1,295 | 968 | 34% | | PAT % | 8% | 9% | | 8% | 8% | | | Book Value (per share) | ₹413 | ₹345 | 20% | ₹413 | ₹345 | 20% | | Basic EPS (not annualized)| ₹27.3 | ₹22.6 | 21% | ₹44.5 | ₹33.1 | 34% | | Net Debt to equity ratio | 0.0 times | 0.0 times | | 0.0 times | 0.0 times | |

**Table 2: Coromandel International Ltd - Segmental Performance (Nutrients & CPC)**

| Segment (Standalone) | Q2 FY26 (₹ Cr) | Q2 FY25 (₹ Cr) | Q2 Gr% | H1 FY26 (₹ Cr) | H1 FY25 (₹ Cr) | H1 Gr% | | :------------------- | :------------- | :------------- | :----- | :------------- | :------------- | :----- | | **Nutrients** | | | | | | | | Sales | 8,661 | 6,766 | 28% | 15,013 | 10,958 | 37% | | PBIT | 983 | 847 | 16% | 1,613 | 1,280 | 26% | | **CPC (Standalone)** | | | | | | | | Revenue | 829 | 755 | 10% | 1,553 | 1,306 | 19% | | PBIT | 162 | 110 | 48% | 272 | 173 | 58% | | PBIT% | 20% | 15% | | 18% | 13% | | | **CPC (Consol incl. NACL)** | | | | | | | | Revenue | 1,069 | 751 | 42% | 1,794 | 1,303 | 38% | | PBIT | 145 | 108 | 34% | 256 | 171 | 50% |

**Table 3: Coromandel International Ltd - Nutrients Segment Volume (Lakh MT)**

| Volume Metric | Q2 FY26 | Q2 FY25 | Q2 Gr% | H1 FY26 | H1 FY25 | H1 Gr% | | :-------------------- | :------ | :------ | :----- | :------ | :------ | :----- | | NPK+DAP Manufactured | 10.73 | 10.86 | -1.2% | 19.67 | 18.98 | 3.6% | | NPK+DAP Imported | 3.33 | 2.24 | 49.0% | 5.40 | 2.50 | 115.8% | | **NPK+DAP Total** | **14.06** | **13.10** | **7.4%** | **25.06** | **21.48** | **16.7%** | | SSP | 2.23 | 2.31 | -3.3% | 4.12 | 3.88 | 6.2% | | MOP | 0.14 | 0.29 | -51.2% | 0.20 | 0.36 | -45.5% | | Urea | 4.45 | 2.83 | 57.1% | 7.20 | 5.06 | 42.3% |

**Table 4: Fertilizer Industry Key Metrics (Q2 & H1 FY26)**

| Metric (Qty in Lakh MT) | Q2 FY26 Production | Q2 FY26 Imports | Q2 FY26 Sales | Q2 Gr% (Prod) | Q2 Gr% (Imp) | Q2 Gr% (Sales) | H1 FY26 Production | H1 FY26 Imports | H1 FY26 Sales | H1 Gr% (Prod) | H1 Gr% (Imp) | H1 Gr% (Sales) | | :---------------------- | :----------------- | :-------------- | :------------ | :------------ | :----------- | :------------- | :----------------- | :-------------- | :------------ | :------------ | :----------- | :------------- | | DAP | 9.7 | 28.5 | 28.4 | -16% | 236% | 7% | 20.0 | 38.3 | 43.9 | -7% | 95% | -4% | | NPK | 32.7 | 10.7 | 47.9 | 14% | 135% | -5% | 59.3 | 20.2 | 77.3 | 10% | 84% | 7% | | Urea | 76.6 | 31.4 | 123.2 | -1% | 345% | -3% | 144.4 | 39.8 | 193.1 | -6% | 139% | 2% | | MOP | N/A | 9.3 | 6.4 | N/A | 46% | 4% | N/A | 11.9 | 10.9 | N/A | -22% | 18% |

**Table 5: Nutrient Based Subsidy Rates (Rs/kg)**

| Nutrient | FY26 H1 | FY26 H2 | Rabi 2025-26 | | :------- | :------ | :------ | :----------- | | N | 43.02 | 43.02 | 43.02 | | P | 43.60 | 47.96 | 47.96 (+10%) | | K | 2.38 | 2.38 | 2.38 | | S | 2.61 | 2.87 | 2.87 (+10%) |

**Table 6: Madhya Bharat Agro Products Ltd - Financial Performance (Q2 & H1 FY26 vs FY25)**

| Metric | Q2 FY26 (₹ Cr) | Q2 FY25 (₹ Cr) | Q2 Gr% | H1 FY26 (₹ Cr) | H1 FY25 (₹ Cr) | H1 Gr% | | :-------------- | :------------- | :------------- | :----- | :------------- | :------------- | :----- | | Revenue | 450.2 | 278.2 | 61.8% | 860 | 478 | 80% | | EBITDA | 61.8 | 36.3 | 70.4% | 119 | 70 | 70% | | PAT | 30.5 | 13.8 | 120.1% | 59 | 25 | 132% | | EPS | ₹3.48 | ₹1.58 | 120.3% | ₹6.7 | ₹2.9 | 132% | | EBITDA Margin % | 13.7% | 13.0% | | 13.8% | 14.6% | | | PAT Margin % | 6.8% | 5.0% | | 6.8% | 5.3% | | | EBITDA Per Tonne| ₹4,627 | ₹3,534 | 31.0% | ₹5,095.3 | ₹3,934 | 29.2% |

**Table 7: Madhya Bharat Agro Products Ltd - Operational Volumes (MT)**

| Volume Metric | Q2 FY26 | H1 FY26 | H1 FY25 | H1 Gr% | | :---------------- | :------ | :------ | :------ | :----- | | Fertilizer Production | 1,18,541 | 2,24,517 | N/A | N/A | | Sales Volume | 1,35,187 | 2,34,705 | N/A | N/A | | SSP Sales | 78,555 | 1,18,418 | 1,03,875 | 14% | | NPK Sales | 56,632 | 1,16,288 | 73,630 | 58% | | BRP Crushing | 45,263 | 81,465 | N/A | N/A | | Sulphuric Acid Prod | 37,100 | 81,892 | N/A | N/A | | Phosphoric Acid Prod| 8,697 | 33,030 | N/A | N/A |

**Table 8: Madhya Bharat Agro Products Ltd - Installed/Planned Capacity (MTPA)**

| Product | Existing (Banda/Sagar) | Proposed (Sagar/Dhule) | Total Post-Expansion | | :---------------- | :--------------------- | :--------------------- | :------------------- | | SSP | 240,000 | 330,000 | 570,000 | | DAP/NPK | 240,000 | 420,000 | 660,000 | | BRP | 189,000 | - | 189,000 | | Phosphoric Acid | 69,000 | 99,000 | 168,000 | | Sulphuric Acid | 165,000 | 363,000 | 528,000 |

**Table 9: Krishana Phoschem Limited - Financial Performance (Q2 & H1 FY26 vs FY25)**

| Metric | Q2 FY26 (₹ Cr) | Q2 FY25 (₹ Cr) | Q2 Gr% | H1 FY26 (₹ Cr) | H1 FY25 (₹ Cr) | H1 Gr% | | :-------------- | :------------- | :------------- | :----- | :------------- | :------------- | :----- | | Revenue | 608 | 301 | 102% | 1,003 | 580 | 73% | | EBITDA | 73 | 40 | 82% | 139 | 82 | 69% | | PAT | 33 | 16.6 | 99% | 64 | 33 | 93% | | EPS | ₹5.4 | ₹2.7 | 100% | ₹10.31 | ₹5.36 | 93% | | EBITDA Margin % | 12.1% | 13.4% | | 13.8% | 14.1% | | | PAT Margin % | 6.0% | 5.6% | | 6.4% | 5.7% | |

**Table 10: Krishana Phoschem Limited - Operational Volumes (MT)**

| Volume Metric | Q2 FY26 | H1 FY26 | H1 FY25 | H1 Gr% | | :---------------- | :------ | :------ | :------ | :----- | | Fertilizer Production | 95,783 | 1,90,005 | N/A | N/A | | Sales Volume | 1,21,491 | 2,12,441 | N/A | N/A | | SSP Sales | 49,389 | 75,359 | 63,350 | 19% | | NPK Sales | 72,102 | 1,37,081 | 93,890 | 46% | | BRP Crushing | 38,835 | 86,750 | N/A | N/A | | Sulphuric Acid Prod | 46,682 | 1,04,153 | N/A | N/A | | Phosphoric Acid Prod| 16,589 | 33,030 | N/A | N/A |

**Table 11: Krishana Phoschem Limited - Installed/Planned Capacity (MTPA)**

| Product | Existing (Meghnagar) | Proposed (Meghnagar) | Total Post-Expansion | | :---------------- | :------------------- | :------------------- | :------------------- | | SSP | 120,000 | - | 120,000 | | NPK/DAP | 330,000 | 165,000 | 495,000 | | BRP (Crushing) | 200,000 | - | 200,000 | | Sulphuric Acid | 264,000 | 99,000 | 363,000 | | Phosphoric Acid | 99,000 | - | 99,000 |

**Table 12: Khaitan Chemicals & Fertilizers Ltd - Financial Performance (INR Mn)**

| Metric | FY23 | FY24 | FY25 | H1-FY26 | H1-FY25 | Q2-FY26 | Q2-FY25 | | :-------------------- | :----- | :------ | :----- | :------ | :------ | :------ | :------ | | Operational Revenue | 8,878 | 5,358 | 7,202 | 5,429 | 3,607 | 3,086 | 2,306 | | EBITDA | 779 | (302) | 230 | 628 | 17 | 310 | 86 | | EBITDA Margin % | 8.8% | -5.6% | 3.2% | 11.57% | 0.47% | 10.05% | 3.73% | | Net Profit / PAT | 421 | (705) | 14 | 429 | (198) | 215 | (31) | | PAT Margin % | 4.74% | -13.16% | 0.19% | 7.90% | -5.49% | 6.97% | -1.33% | | Basic & Diluted EPS (INR)| 4.34 | (7.27) | 0.14 | 4.42 | (2.04) | 2.21 | (0.32) | | Working Capital Days | 78 | 76 | 59 | N/A | N/A | N/A | N/A | | Net Debt to Equity (X)| 0.7 | 1.4 | 1.3 | 1.0 | N/A | N/A | N/A | | ROCE (%) | 21% | -16% | 5% | N/A | N/A | N/A | N/A | | ROE (%) | 14% | -32% | 1% | N/A | N/A | N/A | N/A |

**Table 13: Khaitan Chemicals & Fertilizers Ltd - Segmental Revenue (INR Mn)**

| Segment | FY23 | FY24 | FY25 | H1 FY26 | | :---------- | :---- | :---- | :---- | :------ | | Fertilizers | 7,915 | 4,663 | 6,345 | 4,584 | | Chemicals | 941 | 524 | 848 | 851 |

**Table 14: Khaitan Chemicals & Fertilizers Ltd - Operational Volumes (Lakh MT)**

| Volume Metric | FY23 | FY24 | FY25 | H1 FY26 | | :------------ | :--- | :--- | :--- | :------ | | Fertilizers | 4.73 | 3.46 | 4.40 | 2.58 | | Chemicals | 1.14 | 1.08 | 1.26 | 0.69 |