Accumulate Paradeep Phosphates; target of Rs 148: Prabhudas Lilladher

What happened

Prabhudas Lilladher recommended accumulating Paradeep Phosphates and set a target price of Rs 148. The company reported Q2FY27 revenue of INR73.6bn and EBITDA of INR4.1bn, while sales volumes fell 25% year on year to 1mn tn amid weak monsoon conditions.

Confirmed

Global impact / market context

Lower sales volumes and higher raw material costs reduced EBITDA per tonne, while INR67bn in subsidy receivables and elevated inventory contributed to higher debt. If inventory is sold and subsidies are received, working capital needs and debt could ease; delays would keep pressure on cash available.

Analyst inference

The report describes a mixed outlook: management says sulphur prices have started to soften, but raw material volatility and delayed Rabi subsidy notification remain concerns. The planned phosphoric acid capacity additions could expand production, but the first increase is not expected until Q1FY28.

Analyst inference

What to watch

1. Watch for the Rabi NBS subsidy notification and payment timing, because delayed subsidies leave receivables unpaid and can keep borrowing needs elevated. Analyst inference
2. Track inventory liquidation during the Rabi season; management expects it to reduce working capital needs and debt, but the article gives no amount or timing. Confirmed
3. Check whether the phosphoric acid expansion from 0.5mmtpa to 0.7mmtpa remains on schedule for Q1FY28, and the later 1mmtpa target for FY29/FY30. Confirmed

Evidence

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