Chambal Fertilisers' operating margin drops 4.75 points QoQ
Revenue and operating profit improved YoY, but the sequential decline left margin below the 18.77% median for 51 reported commodity peers.
Filed 14 May 2026, 17:03 IST · after market close · Chambal Fertilisers & Chemicals Ltd (CHAMBLFERT)
Key takeaways
- Consolidated operating margin fell 4.75 percentage points QoQ to 9.16% as expenses declined less than revenue.
- Despite the sequential slowdown, revenue grew +13.73% YoY and operating profit rose +56.13%.
- Other income accounted for 24.48% of pre-tax profit, making reported profit quality a key caveat.
Price around the results
A sharp sequential reset after Q3FY26
Consolidated revenue fell -52.78% QoQ, while net profit dropped -71.14%, reflecting a much weaker sequential quarter than Q3FY26. Expenses declined -50.17%, less than the fall in revenue, which reduced operating profit by -68.92%. On a YoY basis, revenue grew +13.73% and operating profit rose +56.13%, so the quarter was better than Q4FY25 despite the sequential contraction.
Margin improved YoY but other income remains material
Expenses grew +10.70% YoY against revenue growth of +13.73%, allowing operating margin to expand by 2.49 percentage points. QoQ, the reverse relationship held: expenses fell -50.17% versus a -52.78% revenue decline, narrowing margin by 4.75 percentage points. Interest rose +179.35% QoQ, while the tax rate fell by 2.35 percentage points; other income contributed 24.48% of pre-tax profit, which tempers the quality of reported earnings.
Margin is still below both recent levels and sector peers
The 9.16% operating margin was below 13.91% in Q3FY26 and marked a 4.75-point sequential decline, although it remained 2.49 points above Q4FY25. It was also 9.61 percentage points below the 18.77% median operating margin among 51 reported Commodities peers, placing Chambal sixth from the bottom. The trend therefore shows a sharp recovery from Q4FY25 followed by a weaker Q4FY26 exit.
Management points to products and capacity additions
Management said CPC and speciality nutrients delivered a 27% YoY increase in contribution, while biologicals volume and revenue rose 30% and 57%, respectively, in FY26. The company said it introduced 17 CPC products in FY26 and has 14 CPC products and one speciality-nutrient product in the pipeline for FY27. Management also said the Rs 16,450 million TAN project, with 2.4 lakh MTPA capacity, is in commissioning and that the WNA plant has begun dry runs.
The market reaction was larger than Chambal's usual result-day move
The stock rose +5.96% on the first session after the results and gained +7.70% by the next session, with volume at 16.7 times its usual level. That initial move was above the 4.37% median absolute reaction across the last eight results, during which the stock rose after six and fell after two. The stock's +6.15% relative move on the first session also indicates wider market outperformance.
Q4FY26 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹2,785 cr | ₹5,898 cr | -52.78% | +13.73% |
| Other income | ₹53 cr | ₹36 cr | +46.25% | -38.76% |
| Expenses | ₹2,530 cr | ₹5,078 cr | -50.17% | +10.70% |
| Operating profit | ₹255 cr | ₹821 cr | -68.92% | +56.13% |
| Operating margin (%) | 9.16% | 13.91% | — | — |
| Interest | ₹3 cr | ₹1 cr | +179.35% | — |
| Depreciation | ₹90 cr | ₹88 cr | +2.63% | +10.38% |
| Profit before tax | ₹215 cr | ₹768 cr | -72.00% | +28.21% |
| Tax | ₹46 cr | ₹182 cr | -74.79% | +22.43% |
| Net profit | ₹169 cr | ₹586 cr | -71.14% | +29.87% |
| EPS (₹) | ₹4.23 | ₹14.64 | -71.11% | +30.15% |
Operating margin of 9.16% compares with a Commodities sector median of 18.77% across 51 peers that have reported Q4FY26.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +5.96% | +6.15% |
| Next session | +7.70% | — |
| 5 sessions | +7.09% | +6.96% |
| 15 sessions | +5.68% | — |
| 30 sessions | +10.21% | — |
Volume on the results session was 16.70× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- CPC and speciality nutrients continued to deliver strong revenue and margin growth, with contribution up 27% year on year.
- Four crop seeds were introduced in FY26 with encouraging results.
- Biologicals volume increased 30% and revenue increased 57% in FY26.
Guidance & outlook
- Fourteen CPC products and one SN product are in the pipeline for launch in FY27.
- P&K fertiliser sourcing is in place for the Kharif season.
Expansion
- CFCL is commissioning a TAN plant and has started the WNA plant dry run.
- The TAN project has a total cost of Rs. 16,450 million and capacity of 2.4 lakh MTPA.
- The TAN project includes a 700 MTPD TAN plant and a 650 MTPD WNA plant.
New products
- CFCL introduced 17 new CPC products across herbicides, fungicides and insecticides in FY26.
- CFCL launched a drip-irrigation-friendly water-soluble powder variant of Uttam Superrhiza.
New initiatives
- CFCL signed an MOU with TERI to establish a Centre of Excellence for sustainable agriculture solutions.
- CFCL conducted 25 virtual Uttam Krishi Pathshala knowledge sessions to educate farmers.
- The Chambal Uttam Krishak Mitra App exceeded 100,000 downloads.
Competition
- CFCL describes itself as India's largest private-sector manufacturer of urea.
Problems & risks
- Urea volumes were lower mainly because one urea plant had an unscheduled stoppage during FY26.
What to watch
- Whether operating margin recovers from 9.16% after the 4.75-point QoQ decline.
- Whether CPC and speciality-nutrient contribution builds on the 27% YoY increase reported for FY26.
- Progress on commissioning the 2.4 lakh MTPA TAN project and the 650 MTPD WNA plant dry run.