Deepak Fertilisers’ profit rests on other income as margins recover
Standalone margin improved from Q3FY26, but remained well below last year as costs outpaced revenue; other income drove nearly all pre-tax profit.
Filed 28 May 2026, 15:02 IST · after market close · Deepak Fertilisers & Petrochemicals Corp Ltd (DEEPAKFERT)
Key takeaways
- Standalone operating margin recovered 3.28 percentage points sequentially to 7.53%, but remained 7.94 percentage points below Q4FY25.
- Net profit fell 30.37% year on year because expenses grew 15.55% against 5.63% revenue growth, despite a lower tax rate.
- Other income contributed 94.52% of pre-tax profit, making the Rs 121.57 cr profit less reflective of operating performance.
Price around the results
Sequential recovery did not undo the annual margin decline
Standalone revenue rose 18.12% sequentially, while expenses increased 14.07%, allowing operating margin to recover 3.28 percentage points from Q3FY26. Year on year, the picture was weaker: expenses grew 15.55% against 5.63% revenue growth, narrowing operating margin by 7.94 percentage points. Q4FY26 was the fourth quarter in the reported trend, and margin remained below 20.14% in Q1FY26 and 17.59% in Q2FY26 despite the recovery from 4.25% in Q3FY26.
Profit quality was dominated by other income
Other income accounted for 94.52% of standalone pre-tax profit, so the Rs 121.57 cr net profit was not primarily generated by operations. The 3.23% tax rate also flattered net profit, falling 6.22 percentage points year on year and 32.49 percentage points sequentially. Lower interest expense helped year-on-year earnings, but it did not offset the operating profit decline.
Mining chemicals volume rose, but several businesses faced pressure
Management said Q4 mining chemicals volume reached 164 KT, up 12% year on year and 27% sequentially. The company said Building-Block Nitric Acid faced pricing pressure, Crop Nutrition was hurt by higher input costs and inadequate subsidy support, and constrained Refinery Grade Propylene availability affected IPA sales. Management also said three large customers approved SGNA for ingot and wafer applications, with further trial orders expected.
Management expects demand and pricing factors to aid the next quarter
Management said Q1FY27 demand is expected to remain steady and that elevated FGAN prices and Middle East-related supply volatility are expected to support margin improvement. The company also said Nitric Acid demand is expected to strengthen, with limited imports supporting pricing. Management said differentiated offerings, mix enrichment and B2C expansion should support pricing discipline, while it continues to focus on application-led segmentation and solution-driven products.
The stock reaction was negative but within its usual range
After the results, the stock fell 2.64% on the first trading day and was down 2.60% after one day, while the opening gap was -7.19%. That closing decline was smaller than the 4.86% median absolute move after the last eight results, although the stock has fallen after seven of those eight results. It was down 1.55% after five trading days before gaining 7.94% after 15 trading days.
Q4FY26 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q4FY26 | Q3FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹474 cr | ₹401 cr | +18.12% | +5.63% |
| Other income | ₹119 cr | ₹29 cr | +307.90% | -23.00% |
| Expenses | ₹438 cr | ₹384 cr | +14.07% | +15.55% |
| Operating profit | ₹36 cr | ₹17 cr | +109.39% | -48.59% |
| Operating margin (%) | 7.53% | 4.25% | — | — |
| Interest | ₹6 cr | ₹6 cr | -1.67% | -33.56% |
| Depreciation | ₹23 cr | ₹23 cr | -2.10% | +4.38% |
| Profit before tax | ₹126 cr | ₹17 cr | +649.14% | -34.84% |
| Tax | ₹4 cr | ₹6 cr | -32.22% | -77.70% |
| Net profit | ₹122 cr | ₹11 cr | +1027.74% | -30.37% |
| EPS (₹) | ₹9.63 | ₹0.85 | +1032.94% | -30.37% |
Operating margin of 7.53% 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 | -2.64% | -1.13% |
| Next session | -2.60% | — |
| 5 sessions | -1.55% | +0.71% |
| 15 sessions | +7.94% | — |
| 30 sessions | +4.49% | — |
Volume on the results session was 1.62× 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
- Q4 mining chemicals sales volume was 164 KT, up 12% year over year and 27% quarter over quarter.
Guidance & outlook
- Q1 FY27 demand is expected to remain steady, while elevated FGAN prices and Middle East-related supply volatility are expected to support margin improvement.
- Nitric Acid demand is expected to strengthen, with limited imports supporting pricing.
- The company expects differentiated offerings, mix enrichment and B2C expansion to support pricing discipline and premium positioning.
New products
- SGNA received approvals for ingot and wafer applications from three large customers, with further trial orders expected.
New initiatives
- The company will maintain value pricing using supply reliability, application-specific products and customer partnerships to improve blasting productivity and cost efficiency.
- The company continues to focus on application-led segmentation, innovation and differentiated, solution-driven offerings.
Problems & risks
- Mining-site LOAN consumption was lower because of prolonged monsoon conditions and licensing-related delays.
- Building-Block Nitric Acid faced ongoing pricing pressure in Q4.
- Refinery Grade Propylene availability remains constrained, impacting IPA sales.
- Crop Nutrition had a weak Q4 because of sharply higher input costs and inadequate subsidy support.
What to watch
- Whether standalone operating margin holds above 7.53% after the Q4FY26 recovery.
- Whether other income remains a material contributor to pre-tax profit after accounting for 94.52% in Q4FY26.
- Whether mining chemicals volume sustains the 164 KT Q4FY26 level and its 12% year-on-year growth.