Madhya Bharat Agro Products Ltd Q1 FY27 Earnings Analysis

- Phase-I Dhule facility partially commissioned; full Phase-I capacity expected by October 2026. - Phase-I expansions along with Sagar unit expansion expected to deliver ~100% revenue growth over current baseline. - A further phase of expansion planned by October 2027, providing an additional ~25% revenue upside. - Overall capacity to increase from 9 lakh MT p.a. to 1.56 million MT p.a., targeting becoming India's third-largest private-sector phosphatic fertilizer company. - SSP fertilizer plant already commissioned (March FY26), with sales commencing soon. - DAP-NPK plant operational by October 2026. - FY27 utilization expected at 50–60% of added capacity, rising to 75–80% in following year. - FY28 growth over FY26 base could exceed 200%. - Revenue projection of approximately ₹4,000 crore by FY28. - Sustainable EBITDA per ton targeted (₹6,000 for NPK in FY27).

- FY26 reported strong performance: Profit after tax ₹150 crore (up 161% YoY), EPS ₹17.14. - Significant revenue growth expected: ~100% growth with current expansions; over 200% by FY28 compared to FY26 baseline. - EBITDA per ton target for FY27 is around ₹6,000 for NPK; sustainable EBITDA levels expected. - Margins: Aim to maintain absolute EBITDA margins; 50% MRP price increase implemented to cover rising raw material costs. - Capacity expansions (Dhule plant Phase-I completion by Oct 2026, further expansion by Oct 2027) to drive volume and profitability growth. - Green ammonia supply to commence by April 2029 under a 10-year government-backed contract, enhancing input cost stability. - CRISIL upgraded credit rating to A+ (stable), enabling better financing for growth. - The company targets becoming India's third-largest private-sector phosphate fertilizer producer with capacity exceeding 1.5 million MT.

- Total project cost for Dhule platform Phase-I and Phase-II is ₹675 crores, with ₹460 crores already spent; balance to be incurred in 3-4 months. - Dhule DAP/NPK facility commissioning targeted before October 2026; Phase-II expansion planned by October 2027. - Ongoing expansions expected to double revenue over the current baseline, followed by an additional 25% upside post next phase. - Dhule project fully funded with financial closure achieved; funding through internal accruals and term loans. - Further capacity expansion under evaluation, with details expected around October-November 2026. - No capex involved in green ammonia supply agreement; green ammonia project developed by a third party, with supply starting in April 2029. - Strategic investments include backward integration (phosphoric acid, sulphuric acid capacities) and green ammonia procurement for long-term input security and sustainability.

- The Dhule project is fully funded with financial closure achieved and term loan disbursements underway. - Funding for the ongoing expansion is expected to come through internal accruals, including accruals over the next six months. - There is no immediate need for new fundraising as the current expansion is fully financially closed. - A second phase of expansion is under evaluation, with further details to be shared once commercialization begins, likely around October–November 2026. - The company’s upgraded credit rating (CRISIL & ICRA A+ Stable) strengthens access to capital markets and supports funding for ongoing and planned capacity expansion, providing flexibility for future fundraising if needed.

- Madhya Bharat Agro Products Limited has tied up for approximately 130,000 tons of green ammonia through a 10-year contract with SECI (a government agency). - The company is among participants in contracts totaling around 700,000 metric tons awarded in the industry. - Within the Ostwal Group, MBAPL holds the largest allocation with 200,000 metric tons per annum, split between Madhya Bharat Agro and another group company, Krishana Phoschem. - The supply arrangement for green ammonia is expected to commence around April 2029. - These offtake agreements do not require MBAPL to make capex for green ammonia projects, as the projects will be developed by other players. - The contracts have ensured long-term input security aligned with sustainability and cost-optimization goals.