Deepak Fertilis. Q4 FY26 Results (NSE: DEEPAKFERT)
Signal: Margin pressure
The read
Standalone Q4FY26 reveals a severe operating margin squeeze: EBITDA margin dropped to 7.5% from 15.5% a year ago as raw material costs surged. PAT fell 30% YoY despite a ₹102.4 Cr dividend from a subsidiary, which masked a far weaker core. The company continues heavy capex for the Dahej and Gopalpur projects, with CWIP ballooning to ₹1,112 Cr, but near-term profitability remains under pressure.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹473.88 Cr | 5.6% | 18.1% |
| EBIT | ₹12.79 Cr | -73.1% | |
| Net profit | ₹121.57 Cr | -30.4% | |
| EPS | ₹9.63 | -30.4% | |
| EBIT margin | 7.53% |
P&L walk
Standalone operating profitability sharply declined, with EBITDA margin falling to 7.5%, though PAT cushioned by subsidiary dividend of ₹102.4 Cr.
Key positives
- Receivables days improved from 49 to 24 and inventory days from 34 to 21, indicating tighter working capital management.
- Board recommended ₹10 per share dividend (yield ~0.6%).
- Subsidiary dividend of ₹102.4 Cr supported standalone profit in a weak operating quarter.
Key concerns
- Raw material cost as % of revenue jumped from 54.3% to 67.3%, crushing gross margin by 560 bps YoY.
- Operating margin contracted 794 bps YoY to 7.5%, reflecting inability to pass through input cost inflation.
- PAT declined 30% YoY even with elevated other income; core earnings dropped sharply.
- Net debt nearly doubled to ₹506 Cr as capex spending accelerated, increasing financial risk.
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