Deepak Fertilisers & Petrochemicals has reported mixed financial results for the second quarter of fiscal year 2026, with revenue growth offset by a decline in profitability.

Revenue Growth Amid Challenges

The company's consolidated revenue for Q2 FY26 increased by 9% year-over-year to ₹3,006.00 crore. For the first half of FY26, revenue grew by 13% to ₹5,665.00 crore.

Profitability

Net profit remained flat at ₹214.00 crore for the quarter but increased 11% for the half-year to ₹458.00 crore.

Segment Performance

Fertilizer Business

• Showed strong performance with 36% year-over-year growth
• Specialty products now comprise 28% of the crop nutrition business revenue

Chemicals Segment

• Declined 21% due to headwinds in IPA and Ammonia businesses

Strategic Developments

Deepak Fertilisers completed the full acquisition of Platinum Blasting Services (PBS), its Australian subsidiary. PBS delivered ₹533.00 crore in revenue and ₹80.00 crore in EBITDA in FY25.

Ongoing Projects

• Expansion project at Gopalpur (TAN) is 87% complete
• Dahej (Nitric Acid) project is 70% complete
• Both projects are expected to be commissioned by the end of FY26

Management Commentary

S.C. Mehta, Chairman and Managing Director of Deepak Fertilisers, stated, "Our Fertiliser and TAN businesses continue to deliver robust performance, driving strong growth in both revenue and margins. The Chemicals segment, however, was impacted by global headwinds, particularly in the IPA and Ammonia businesses."

As Deepak Fertilisers navigates through market challenges, it continues to focus on its strategic transformation towards specialty products and customer-centric solutions, aiming for sustainable growth in the long term.

Deepak Fertilisers & Petrochemicals has disclosed that its wholly owned subsidiary, Mahadhan Agri Tech Limited (MAL), has received a Goods and Services Tax (GST) demand order from the Joint Commissioner of State Tax, Maharashtra. The order, which pertains to the period from July 2017 to March 2018, raises financial implications for the subsidiary.

Demand Order Details

The GST demand order, as revealed in the company's regulatory filing, comprises the following components:

Reason for the Demand

The demand order cites the inadmissibility of credit claimed in GSTR3B compared to the credit quantum reflected on the GST portal. This discrepancy has led to the demand raised by the tax authorities.

Company's Stance

Deepak Fertilisers & Petrochemicals has stated that there is no material impact on the financials or operations of either the parent company or its subsidiary, MAL. The company further elaborated that MAL believes the demand is not tenable and plans to challenge the order at an appropriate forum.

Timeline and Next Steps

1. The appeal order was received by the company via email on 31st October 2025.
2. MAL has taken a legal view that the demand is not sustainable and may be set aside upon appeal.
3. The company has expressed its intention to challenge the order at an appropriate forum.

While the GST demand order represents a significant amount, Deepak Fertilisers & Petrochemicals' stance and immediate disclosure to the stock exchanges demonstrate the company's commitment to transparency and its belief in the strength of its position. Investors and market watchers may keep a close eye on the developments as the company proceeds with its challenge to the order.

As this situation unfolds, it could have implications for other companies in the sector, potentially highlighting the complexities of GST compliance and credit claims in the fertilizer and petrochemical industries.