Paradeep Phosphates margin falls as costs outpace revenue
Q2 consolidated revenue rose 7.16% YoY, but operating margin fell 3.95 percentage points and net profit dropped 64.61%.
Filed 29 Oct 2026, 18:07 IST · after market close · Paradeep Phosphates Ltd (PARADEEP)
Key takeaways
- Consolidated operating margin fell 3.95 percentage points YoY to 5.61% as expenses grew 11.83% against 7.16% revenue growth.
- Net profit dropped 64.61% YoY to Rs 121.01 cr, while other income accounted for 10.81% of profit before tax.
- Paradeep Phosphates' 5.61% operating margin was 9.02 percentage points below the 14.63% median for 41 reported commodities peers.
Price around the results
Revenue growth did not convert into operating profit
Consolidated revenue increased 7.16% YoY and 20.24% QoQ, but operating profit fell 37.04% YoY and 42.59% QoQ. Expenses grew 11.83% YoY and 28.62% QoQ, outpacing revenue in both comparisons. The result was a 3.95 percentage-point YoY contraction in operating margin and a 6.15 percentage-point QoQ decline.
Higher interest and depreciation added to the squeeze
Interest expense rose 12.67% YoY and 19.98% QoQ, while depreciation increased 21.69% YoY and 3.15% QoQ. Profit before tax therefore fell 64.96% YoY and 68.80% QoQ, despite the tax rate being 0.73 percentage points lower than a year earlier. Other income contributed 10.81% of profit before tax, so it remained a material part of reported pre-tax earnings.
Margin reversal leaves the company near the bottom of its peer group
The operating margin has moved from 12.41% in Q1FY26 to 9.56%, 8.22%, 9.41%, 11.76% and now 5.61% across the reported quarters. Q2FY27 therefore marks a sharp reversal from the previous quarter's recovery and is below the 9.56% level recorded in Q2FY26. Among 41 commodities peers that have reported, the company's margin is 9.02 percentage points below the sector median and ranks sixth from the bottom.
Results were filed after market close
The results were filed after market close, so there is no current market reaction to assess. Across the last eight result reactions, the stock rose six times and fell twice, with a median absolute move of 6.19%.
Q2FY27 at a glance
Consolidated figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹7,364 cr | ₹6,124 cr | +20.24% | +7.16% |
| Other income | ₹18 cr | ₹43 cr | -59.02% | -57.45% |
| Expenses | ₹6,951 cr | ₹5,404 cr | +28.62% | +11.83% |
| Operating profit | ₹413 cr | ₹720 cr | -42.59% | -37.04% |
| Operating margin (%) | 5.61% | 11.76% | — | — |
| Interest | ₹158 cr | ₹132 cr | +19.98% | +12.67% |
| Depreciation | ₹109 cr | ₹106 cr | +3.15% | +21.69% |
| Profit before tax | ₹164 cr | ₹526 cr | -68.80% | -64.96% |
| Tax | ₹43 cr | ₹134 cr | -67.70% | -65.91% |
| Net profit | ₹121 cr | ₹393 cr | -69.17% | -64.61% |
| EPS (₹) | ₹1.16 | ₹3.78 | -69.31% | -64.85% |
Operating margin of 5.61% compares with a Commodities sector median of 14.63% across 41 peers that have reported Q2FY27.
What to watch
- Whether operating margin recovers from 5.61% after the 6.15 percentage-point QoQ decline.
- Whether expense growth falls below revenue growth after expenses rose 28.62% QoQ against 20.24% revenue growth.
- Whether interest expense moves below Rs 158.02 cr after rising 19.98% QoQ.