Paradeep Phosphates Limited

Basic Materials — Agricultural Inputs · NSE

₹147.59+₹1.18 (+0.81%)

DalalBaazaar Score

68 / 100

🟢 Good

Verdict

REASONABLE

Risk

Moderate

Driven by moderate debt load, negative free cash flow, small-cap size, which brings sharper price swings.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:00 pm

Understanding the Business

Company site ↗

The 60-second version of Paradeep Phosphates Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Paradeep Phosphates Limited manufactures, trades, distributes, and sells urea and complex fertilizers in India. It sells its products through dealers and retailers under the Navratna and Jai Kisaan and Mangala brand names.

IndustryAgricultural Inputs

SectorBasic Materials

Employees2,163

Annual revenue₹10,191 Cr

How does it make money?

Turns over ₹10,191 Cr a year. Of every ₹100 of sales, about ₹10 reaches shareholders as profit, with ₹21 left at the operating level before interest, tax and depreciation. Each of its 2,163 employees supports ₹4.71 Cr of revenue a year, the signature of a capital- or asset-led business.

Revenue / employee₹4.71 Cr

Who are its competitors?

The closest listed comparisons in its industry are TATA STEEL LIMITED, JSW STEEL LIMITED, ULTRATECH CEMENT LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Some evidence

ROCE of 20.7% is above what capital typically costs, which suggests some pricing power, though not yet the sustained, wide gap that marks a durable advantage.

Peer median ROE22.3%

What is the outlook?

4 analysts covering the stock expect revenue to shrink about 2.5% and earnings to grow about 33.0% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth-2.5%

Est. earnings growth+33.0%

Analysts4

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +114% while net margin moved +53% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+114%

Margin effect+53%

DalalBaazaar Score

68/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.08 — historically steadier than the index
✗ Small Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

69/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

81/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

14.3x

3Y Median

21.8x

40 monthly readings · mean 44.7x · range 15.3x–176.6x

Sector Median

28.7x

median of 4 sector peers

🟢Current valuation is approximately 34% below its 3y median of 21.8x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 50% below the peer median of 28.7x.

vs. its own history

Cheap

21.8x median over 40 months · -34%

vs. sector peers

Cheap

28.7x median of 4 peers · -50%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

10.4x

PEG

0.29

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 17.1% to 20.7% over 3 years.
Return on equity is rising
ROE has improved from 8.7% to 14.7%.
Return on capital is rising
ROCE has improved from 14.7% to 20.7%.
High return on capital employed
ROCE of 20.7% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

4 items require attention · 1 high · 3 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🟡Debt is increasingFinancial
Total debt is up 49% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹1,880 Cr in the latest year.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 27% over 3 years — each existing share owns a smaller slice of the company.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 20.7% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 17.1% to 20.7%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 34% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 50% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

The debt load needs earnings to hold up
Debt is 3.3x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 22% a year✓ 28.8% CAGR
Latest reported year was 63.1%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 19%✓ 20.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Debt / EBITDA falls below 3x✗ 3.3x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
4Free cash flow remains positive✗ -₹1,880 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 18%✓ 20.7%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 12 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 5 neutral · 1 weak

Market Cap

₹15,328 Cr

Small Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

14.3x

Cheap

Cheap against the generic band

P/B Ratio

2.26x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹10.32

Profitable

Profitable on a per-share basis

ROE

14.7%

Moderate

Moderate capital efficiency

ROCE

20.7%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

1.02x

Moderate

Moderate leverage

Revenue Growth (YoY)

63.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

20.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.02%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹1,880 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

13.3x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

Operating Margin

10.0%

Average

Average margins

Net Margin

4.6%

Average

Average bottom-line conversion

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.08

Defensive

Steadier than the market

52W Range Position

59%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

151.6 / 152.8

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

36.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹4,770 Cr	₹5,643 Cr	₹8,116 Cr	₹10,191 Cr	+28.8%
EBITDA	₹815 Cr	₹672 Cr	₹1,602 Cr	₹2,105 Cr	+37.2%
EBITDA Margin	17.1%	11.9%	19.7%	20.7%	—
PAT (Net Profit)	₹304 Cr	₹100 Cr	₹662 Cr	₹996 Cr	+48.5%
EPS	₹3.9	₹1.22	₹6.38	₹9.59	+35.0%
ROE	8.7%	2.8%	11.3%	14.7%	—
ROCE	14.7%	9.9%	17.7%	20.7%	—
Total Debt	₹4,648 Cr	₹4,014 Cr	₹5,100 Cr	₹6,906 Cr	+14.1%
Free Cash Flow	-₹2,813 Cr	₹1,025 Cr	₹1,190 Cr	-₹1,880 Cr	—

🟢 Revenue has grown at 28.8% a year over 3 years.

🟢 EBITDA has grown at 37.2% a year over 3 years.

🟢 EBITDA Margin has risen from 17.1% to 20.7% over 3 years (+3.6 pts).

🟢 PAT (Net Profit) has grown at 48.5% a year over 3 years.

🟢 EPS has grown at 35.0% a year over 3 years.

🟢 ROE has risen from 8.7% to 14.7% over 3 years (+6.0 pts).

🟢 ROCE has risen from 14.7% to 20.7% over 3 years (+6.1 pts).

🔴 Total Debt has grown at 14.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹17,936 Cr

Total Liabilities

₹11,153 Cr

Cash & Equivalents

₹363 Cr

Operating Cash Flow

-₹1,012 Cr

Capex

-₹868 Cr

Shareholding (proxy)

Institutional Holding

22.6%

Insider Holding

58.4%

Corporate Actions

Dividend Rate

₹1.5

Ex-Dividend Date

04 Sept 2026

Analyst Consensus

Recommendations

3 Buy · 0 Hold · 1 Sell

Target Price (Mean)

₹165.75

+12.3% vs CMP

Target Range

₹135 – ₹185

Peer Comparison

Company	P/E	ROE
TATA STEEL LIMITED	19.8x	10.8%
JSW STEEL LIMITED	12.0x	24.7%
ULTRATECH CEMENT LIMITED	37.6x	11.1%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

4 mixed2 general

Paradeep Phosphates incorporates Fertilizer Innovation Foundation–India

scanx.trade, 16 Oct

Paradeep Phosphates (NSEI:PARADEEP) Stock Forecast & Analyst Predictions

Simply Wall Street, 09 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Paradeep Phosphates Share Price: Price Fall and Valuation

Univest, 13 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

PARADEEP Forecast — Price Target — Prediction for 2027

TradingView, 25 JunAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Earnings call transcript: Paradeep Phosphates Q1 2026 revenue beats forecast

Investing.com, 31 JulResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Why Paradeep Phosphates Share Price is Rising

Equitymaster, 29 Jul

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongBusiness Quality · Growth · Valuation

MiddlingFinancial Health · Profitability · Risk

Points for each in the Score ↑

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive · see Key things to watch ↑