Deepak Fertilisers’ operating margin rebounds to 25.96% in Q1
Expenses grew slower than revenue, while the tax rate fell year on year; management flagged weaker Q2 demand risk from the monsoon.
Filed 30 Jul 2026, 13:21 IST · Deepak Fertilisers & Petrochemicals Corp Ltd (DEEPAKFERT)
Key takeaways
- Consolidated operating margin rose 14.20 percentage points quarter on quarter to 25.96%, ending a four-quarter decline.
- Revenue grew 22.47% year on year while expenses rose 12.36%, lifting operating profit 64.79% to Rs 845.40 cr.
- Net profit rose 100.95% year on year to Rs 490.04 cr, helped by a 4.59-percentage-point fall in the tax rate to 24.77%.
Price around the results
Operating profit recovers after four weak quarters
Deepak Fertilisers reported consolidated revenue of Rs 3,256.26 cr in Q1FY27, up 22.47% year on year and 8.13% quarter on quarter. Operating profit grew 64.79% year on year to Rs 845.40 cr, as expenses increased 12.36% year on year and fell 9.28% sequentially. The company’s 25.96% operating margin was 8.64 percentage points above the 17.32% median among 29 commodities peers that had reported.
Lower costs drove the margin reset; tax aided profit growth
Sequentially, revenue rose 8.13% while expenses fell 9.28%, widening operating margin by 14.20 percentage points. Year on year, the 22.47% revenue increase also outpaced the 12.36% rise in expenses, expanding margin by 6.66 percentage points. Other income contributed only 0.91% of pre-tax profit, so the quarter’s operating recovery was not dependent on non-operating income; however, the tax rate fell from 29.36% to 24.77%, adding to net profit growth.
Margin direction turns after reaching 11.76% in Q4FY26
Operating margin had declined from 19.30% in Q1FY26 to 15.42% in Q2FY26, 12.48% in Q3FY26 and 11.76% in Q4FY26. Q1FY27 therefore marks the first quarterly recovery in that sequence, with profit before tax rising 304.38% sequentially despite interest increasing 1.44%. The rebound was broad-based at the operating level, while other income was lower by 74.97% year on year.
Management flags mixed demand and product-market conditions
Management said monsoon-related weakness in mining and infrastructure could affect Q2 demand, while elevated FGAN prices are expected to support margin. It also said Nitric Acid demand is expected to remain stable because import supply is limited, whereas IPA supply should improve after RGP quota relaxation and domestic IPA prices are expected to correct. TAN sales volume was 130 KT, down 12% year on year and 21% quarter on quarter. Management said post-expansion AN capacity would be approximately 1.0 MMTPA and WNA capacity approximately 1.2 MMTPA.
No immediate move yet against a mostly negative results history
After the last eight results, the stock rose once and fell seven times, with a median absolute move of 4.86%. There is no immediate market move to compare for this filing.
Q1FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹3,256 cr | ₹3,011 cr | +8.13% | +22.47% |
| Other income | ₹6 cr | ₹6 cr | -2.14% | -74.97% |
| Expenses | ₹2,411 cr | ₹2,657 cr | -9.28% | +12.36% |
| Operating profit | ₹845 cr | ₹354 cr | +138.82% | +64.79% |
| Operating margin (%) | 25.96% | 11.76% | — | — |
| Interest | ₹95 cr | ₹93 cr | +1.44% | +7.58% |
| Depreciation | ₹105 cr | ₹106 cr | -0.34% | +1.66% |
| Profit before tax | ₹651 cr | ₹161 cr | +304.38% | +88.69% |
| Tax | ₹161 cr | ₹22 cr | +643.80% | +59.18% |
| Net profit | ₹490 cr | ₹139 cr | +251.56% | +100.95% |
| EPS (₹) | ₹38.82 | ₹11.04 | +251.63% | +101.56% |
Operating margin of 25.96% compares with a Commodities sector median of 17.32% across 29 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- TAN sales volume was 130 KT in Q1, down 12% year on year and 21% quarter on quarter.
Guidance & outlook
- Monsoon-driven mining and infrastructure slowdown may impact Q2 demand, while elevated FGAN prices are expected to support margin.
- Nitric Acid demand is expected to remain stable with limited import supply.
- Relaxation of the RGP quota is expected to improve IPA supply availability, but domestic IPA prices are expected to correct.
Expansion
- After expansion, total AN capacity will be approximately 1.0 MMTPA.
- After expansion, total WNA capacity will be approximately 1.2 MMTPA.
New products
- Croptek is described as an innovative crop-specific specialty product.
What to watch
- Whether operating margin holds above 25.96% next quarter.
- TAN sales volume versus the Q1 level of 130 KT.
- Whether the tax rate moves from 24.77% as net profit growth is assessed.