Deepak Fertilisers annual profit drops 18% on raw material costs
Revenue climbed 12% to ₹11,506 cr, but higher ammonia and phosphoric acid prices squeezed margins. The company proposed a ₹10 dividend.
— 4 earlier stories on Deepak Fertilisers And Petrochemicals Corporation Ltd. →What's new
- Annual revenue rose 12% to ₹11,506 cr, led by volume growth in Technical Ammonium Nitrate.
- Profitability fell 18% to ₹739 cr due to rising raw material costs and lower subsidy support.
- The company started receiving LNG shipments under a 15-year supply contract.
Why this matters
Volume growth is failing to offset the volatility of raw material inputs like ammonia. While the new long-term LNG contract provides a path to better margin visibility, the current results show a company struggling to maintain bottom-line health in a high-cost environment.
What we're watching
- Whether the LNG contract successfully stabilizes raw material costs in FY27.
- Future subsidy adjustments from the government.
- Impact of the new promoter-family board appointments on governance.
The full read
Deepak Fertilisers grew its annual revenue by 12% to ₹11,506 cr in FY26, driven by volume gains in its Technical Ammonium Nitrate segment. Despite this top-line expansion, annual profit dropped 18% to ₹739 cr.
Margins are suffering.
The shortfall stems from rising input costs for ammonia and phosphoric acid, compounded by a lack of sufficient subsidy support. To address these cost pressures, the company has commenced LNG shipments under a 15-year long-term contract, which aims to secure raw materials and provide better margin visibility for future quarters. The board also proposed a ₹10 dividend and added new non-executive directors from the promoter family. These results align with recent trends, offering no surprises for investors. The core challenge remains the same: managing the margin squeeze between volatile raw material prices and government-controlled subsidies.
Questions answered
- Why did profit decline despite a 12% increase in revenue?
- Profit fell because raw material costs for ammonia and phosphoric acid rose, while government subsidy support remained insufficient to cover these expenses.
- What is the significance of the new LNG contract?
- The 15-year contract is intended to secure raw material supplies and improve margin visibility for the company's operations.
- What dividend did the board propose?
- The board proposed a dividend of ₹10 per share.
- Were there any major changes to the board?
- The company appointed additional non-executive directors from the promoter family, which is a routine year-end disclosure.
Story so far
All notes on DEEPAKFERT →- 28 May 2026 · 3:54 PM IST Deepak Fertilisers annual profit drops 18% on raw material costs
- today Deepak Fertilisers profit drops 22% as costs outpace revenue
- today Deepak Fertilisers profit drops 22% as input costs bite
- today Deepak Fertilisers profit drops 22% as margins buckle under costs
- today Deepak Fertilisers profit drops 22% as raw material costs bite