Shares of Paradeep Phosphates Ltd. tumbled as much as 14% on Friday, October 30, making the stock the biggest loser on the Nifty 500 index. The decline came a day after the fertiliser maker reported a weak set of results for the September quarter, with net profit and EBITDA declining sharply year-on-year amid elevated input costs and subdued fertiliser demand.
The company reported a 69% year-on-year decline in net profit to ₹121 crore in the second quarter, compared with ₹393 crore in the corresponding period last year.
Revenue, however, rose 7.2% to ₹7,364 crore from ₹6,872 crore a year ago.
Operating performance remained under pressure. EBITDA fell 37% year-on-year to ₹413.4 crore from ₹656.6 crore, while the EBITDA margin contracted to 5.6% from 9.6% in the year-ago quarter.
On the operational front, sulphuric acid production increased 32% year-on-year, while phosphoric acid production rose 7%. The company is also progressing with the first phase of its phosphoric acid expansion, which will increase annual capacity from 5 lakh tonnes to 7 lakh tonnes.
Separately, the company has approved an investment of ₹250 crore to set up an aluminium fluoride plant.
Key monitorables
Investors will track movements in the prices of key raw materials, including sulphur, phosphoric acid and ammonia, as well as freight and insurance costs. A recovery in NPK fertiliser sales, the pace of subsidy collections, inventory levels and the company’s debt requirements will also remain important factors.
Progress on the phosphoric acid capacity expansion and the proposed ₹250 crore aluminium fluoride project will be among the other developments to watch.
The September quarter was challenging for the company, with weaker fertiliser demand and elevated raw-material costs weighing on profitability despite an increase in revenue.
Paradeep Phosphates shares slide 14%, biggest Nifty 500 loser after weak Q2 results