Deepak Fertilisers & Petrochemicals Corp Ltd (DEEPAKFERT) Q1 FY27 Earnings Call: Posts Record EBITDA of Rs. 845 Cr, Sees Rs. 300 Cr Annual LNG Savings

Deepak Fertilisers & Petrochemicals Corp Ltd held its Q1 FY27 earnings call on July 30, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record EBITDA and PAT Doubling Mark the Quarter

• Consolidated revenue of Rs.3,256 Cr — up 22% YoY and 8% QoQ, driven by stronger realisations across ammonia, mining chemicals, and industrial chemicals in Q1 FY2026-2027.
• Operating EBITDA at a record Rs.845 Cr — margin of 26.0%, up 65% YoY and 139% sequentially, supported by broad-based margin expansion and initial benefits from the integrated gas-to-ammonia value chain.
• Net profit of Rs.490 Cr — up 101% YoY and 252% QoQ, reflecting margin expansion and improved operating leverage; Q1 FY2026-2027 profits already covered over 65% of FY2025-2026 full-year profits.
• EPS matched the June 2022 quarter at ~Rs.30 — management noted that the ~Rs.30 EPS level from Q1 FY2022-2023 was only repeated in Q1 FY2026-2027, highlighting past volatility.
• Net debt-to-EBITDA improved to 1.4x — from 2.86x in the prior period, despite net debt remaining near peak at Rs.4,719 Cr as of Q1 FY2026-2027.

Two Major Projects on Track for Q2 FY2026-2027 Commissioning

• Gopalpur TAN project 96% complete — and the Dahej Haze nitric acid project 93% complete; both are expected to commence operations during Q2 FY2026-2027, remaining within the approved capex envelope of Rs.3,850 Cr spent through Q1.
• Target ~80% utilisation by Q4 FY2026-2027 — management expects a faster ramp-up for these plants given familiar chemistry, subject to smooth operations.
• Ammonia plant debottlenecked for ~10% capacity improvement — achieved 94% utilisation in Q1 FY2026-2027 despite gas issues in early April; captive consumption of ammonia stood at approximately 80% on the debottlenecked capacity.
• Capex of Rs.500 Cr incurred in Q1 FY2026-2027 — the two new projects (B2B, working-capital efficient) are in the final leg of completion; both are expected to contribute EBITDA from Q3-Q4 FY2026-2027 onward.
• Explosives company acquired in May 2026 — completed during Q1 FY2026-2027 to complete the mining solutions value chain; facility being upgraded with new explosives plant investments to follow, using a TCO outcome-based commercial model.

Equinor LNG Reshapes Cost Structure; Margins Expand 5.5%

• First Equinor LNG cargo received in May 2026 — contributed to only two of three months in Q1 FY2026-2027; management confirmed a full-quarter benefit from Q2 FY2026-2027, improving supply security and cost visibility.
• MD indicated potential annual savings of ~Rs.300 Cr — from the Equinor LNG supply once the transition is fully complete; actual savings in FY2026-2027 and FY2027-2028 will depend on movement in crude and Henry Hub prices.
• Government gas allocation of 70% to phase down by Q4 FY2026-2027 — the share will decline as existing contracts phase out; Equinor supply will ramp up, with the phase-out fully completed by Q4 FY2026-2027. Equinor pricing is described as commercially favourable over the contracts being replaced.
• Gross margins expanded by 5.5% in Q1 FY2026-2027 — driven by lower costs, improved realisations, and operational efficiencies from debottlenecking; management noted pricing remains elevated though some softening from war-induced peaks has occurred.
• No specific Q2 FY2026-2027 margin guidance given — CFO Subhash Anand stated it is too early to provide full-year EBITDA margin guidance for FY2026-2027, and declined to confirm whether margins would match Q1 FY2026-2027 levels.

Mining Chemicals Leads with 37% Revenue Growth; Crop Nutrition Holds Steady

• Mining chemicals revenue of Rs.911 Cr — up 37% YoY despite a temporary volume disruption (lower to 13,080 units) due to changes in the PESO portal; the disruption has been resolved with no expected impact in Q2 or Q3 FY2026-2027.
• B2C revenue of Rs.151 Cr, up 42% YoY — contributing 17% of the mining segment; management sees strong fundamentals and the B2C franchise as ongoing growth drivers.
• Crop nutrition revenue of Rs.1,367 Cr, up 9% YoY — despite a delayed monsoon and elevated input costs; manufactured NPK sales grew 4%, and specialty/crop-tech products contributed 40% of segment revenue.
• Industrial chemicals revenue of ~Rs.490 Cr — nitric acid volumes remained stable with improved pricing; IPA volumes were impacted by propylene (RGP) availability but profitability supported by strong farmer-grade demand, with recovery expected as propylene improves.
• Nitric acid merchant sales flat at ~80,000 tonnes — total nitric acid production dropped from ~2,35,000 tonnes (Q4 FY2025-2026) to ~2,00,000 tonnes (Q1 FY2026-2027) due to higher captive consumption, not weak demand.

Net Debt Near Peak; Deleveraging Expected from FY2026-2027

• Net debt of Rs.4,719 Cr as of Q1 FY2026-2027 — near peak levels of ~Rs.4,700-Rs.4,800 Cr; management expects deleveraging to begin from FY2026-2027 onward as new projects contribute EBITDA and operating cash flow.
• Net debt-to-EBITDA improved to 1.4x — from 2.86x in the comparable prior period, reflecting the record EBITDA performance.
• Interest on project loans being capitalised — management sees an elevated earnings base by end-FY2026-2027 due to two new capex contributions from Q3-Q4 FY2026-2027, full-quarter gas-supply benefit, and a proportionate increase in 'econo gas' over time.
• Management did not confirm the analyst's hypothetical FCF assumption — of Rs.2,000 Cr free cash flow and Rs.1,000-Rs.1,500 Cr working capital requirement in FY27, and declined to provide specific margin guidance for the remainder of FY2026-2027.

Ammonia Pricing Elevated; Global Analysts Flag Potential Russian Export Ban

• Ammonia FOB Middle East at ~$600/ton — management expects current elevated levels to persist for at least two to three quarters (through Q3/Q4 FY2026-2027); even after the conflict ends, prices are not expected to fall to previous levels quickly, with a "new normal" likely.
• Tarun Sinha reported that "global analysts indicate a potential Russian ban on ammonia exports from October 2026" — citing Ukrainian drone attacks near the Black Sea disrupting supply chains; management does not see major supply from China offsetting disruptions, with prices expected around $600 near term.
• Industry demand growing at 6-7% per annum — despite competitor capacity additions, management sees the market remaining balanced or turning short in the medium term, preventing prolonged oversupply.
• DMSL listing commitment confirmed — with either an IPO or demerger route still under evaluation; no final decision has been made, and management stated they will evaluate all options in due course.
• Next growth engine over the three to five years from FY2026-2027 — will come from multiple levers: DMSL moving downstream, crop-tech shifting toward specialty products, and industrial chemicals moving into specialty segments; details beyond this organic phase will be shared after current capex stabilises.
• Risks identified: geopolitical and international supply-side disturbances — the Middle East war continues to strain sourcing and prices of rock phosphate and sulfur, requiring faster government subsidy corrections; external factors remain the primary uncertainty while execution and strategy are on track.