Chambal profit slips as costs outpace revenue; margin falls QoQ
Q2 revenue rose 9.15% YoY, but operating margin was 1.31 percentage points below the 92-peer commodities median.
Filed 03 Nov 2026, 16:36 IST · after market close · Chambal Fertilisers & Chemicals Ltd (CHAMBLFERT)
Key takeaways
- Consolidated net profit fell 2.59% YoY to Rs 631.92 cr as expenses grew 9.47%, ahead of revenue growth of 9.15%.
- Operating margin narrowed 4.05 percentage points QoQ to 12.87% after expenses grew 46.03%, faster than revenue growth of 39.24%.
- The results were filed after market close; historically, six of eight result sessions were positive, with a median absolute move of 2.58%.
Price around the results
Higher revenue did not translate into higher profit
In consolidated Q2FY27 results, revenue rose 9.15% YoY to Rs 6,999.46 cr, but net profit fell 2.59% to Rs 631.92 cr. Other income declined 45.03% YoY, while interest expense rose 2,416.85%, offsetting the 7.02% increase in operating profit. The higher interest charge also meant that profit before tax fell 1.85% despite the operating profit increase.
Sequential margin reversal reflects faster cost growth
QoQ revenue increased 39.24%, but expenses grew 46.03%, pulling operating margin down 4.05 percentage points to 12.87%. The tax rate fell 6.37 percentage points to 23.51%, which cushioned the decline in pre-tax profit and helped net profit rise 20.69% sequentially. Other income accounted for 5.83% of pre-tax profit, while management said sulphur shortages and higher prices caused a prolonged IMACID shutdown and forced production to resume at lower capacity because of higher input costs.
Margin remains below the commodities peer median
The 12.87% operating margin was 1.31 percentage points below the 14.18% median for 92 commodities peers that had reported the quarter. Margin has been volatile: it fell to 9.16% in Q4FY26, rebounded to 16.92% in Q1FY27, and then declined to 12.87% in Q2FY27. On a YoY basis, the decline was smaller at 0.26 percentage points because expenses grew 9.47%, slightly faster than revenue.
Urea volumes and new products support the operating update
Management said urea volumes were higher in Q2, while MOP and NPK fertiliser volumes were maintained; it also reported seeds revenue growth of 32% and a 69% YoY improvement in seeds margin. The company said its HDAN plant began commercial production on 20 August 2026 and that it introduced KOTAN+ high-density ammonium nitrate for pharmaceutical use. For the proposed new urea plant, management said additional land had been acquired, environmental clearance was in progress and the gas supplier had given in-principle approval; it also said the project requires approval from the Department of Fertilisers and the board.
Market response awaits the post-close filing
The results were filed after market close, so there is no reported market reaction yet. In the previous eight result sessions, the stock rose six times and fell twice, with a median absolute move of 2.58%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹6,999 cr | ₹5,027 cr | +39.24% | +9.15% |
| Other income | ₹48 cr | ₹2 cr | +2516.30% | -45.03% |
| Expenses | ₹6,099 cr | ₹4,176 cr | +46.03% | +9.47% |
| Operating profit | ₹901 cr | ₹851 cr | +5.89% | +7.02% |
| Operating margin (%) | 12.87% | 16.92% | — | — |
| Interest | ₹22 cr | ₹17 cr | +33.57% | +2416.85% |
| Depreciation | ₹100 cr | ₹89 cr | +12.72% | +15.87% |
| Profit before tax | ₹826 cr | ₹747 cr | +10.64% | -1.85% |
| Tax | ₹194 cr | ₹223 cr | -12.93% | +0.65% |
| Net profit | ₹632 cr | ₹524 cr | +20.69% | -2.59% |
| EPS (₹) | ₹15.77 | ₹13.07 | +20.66% | -2.59% |
Operating margin of 12.87% compares with a Commodities sector median of 14.18% across 92 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Urea volumes were higher in Q2.
- MOP and NPK fertiliser volumes were maintained in Q2.
- Seeds revenue grew 32% and margin improved 69% year-on-year.
Guidance & outlook
- The new urea project requires approval from the Department of Fertilizers and the company’s Board of Directors.
- CFCL expects the new urea plant to make it India’s largest single-location urea producer and the world’s second largest.
Expansion
- CFCL acquired an additional land parcel for its new urea plant.
- Environmental clearance for the new urea plant is in progress.
- The gas supplier has provided in-principle approval for the new urea plant.
- The HDAN plant commenced commercial production on 20 August 2026.
New initiatives
- CFCL introduced KOTAN+ high-density ammonium nitrate for pharmaceutical use.
- CFCL introduced four new-age crop-protection products covering herbicides, fungicides and insecticides in Q2.
- CFCL introduced Uttam Fertilis in Q2.
Problems & risks
- Adverse agro-climatic conditions affected some territories, although performance was maintained.
- Sulphur shortages and higher prices caused a prolonged shutdown at the IMACID joint venture.
- IMACID resumed production at lower capacity because of higher input costs.
- India received 12.6% below-normal monsoon rainfall during June-September 2026.
What to watch
- Whether operating margin recovers from 12.87% after the 4.05 percentage-point QoQ decline.
- Interest expense versus Rs 22.40 cr in Q2FY27 after rising 2,416.85% YoY.
- HDAN performance after commercial production began on 20 August 2026.