PARADEEP Q2 FY27 Results Analysis: PAT Plunges 64.6%, EBITDA Margin Halves

PARADEEP reported Q2 FY27 numbers with revenue of Rs. 7,364.06 Cr (+7.20% YoY) and PAT growth of -64.60% YoY. Here's a quick read of what worked, what to watch, and what management said.

Quarter Snapshot

Q2 FY27 revenue grew 7.2% YoY on a low-margin traded-fertilizer ramp, but PAT collapsed 64.6% YoY to Rs.121.01 Cr with EBITDA margin halving to 5.84%, compounded by a Rs.59.98 Cr NRV write-down and the absence of a Rabi subsidy notification. H1 operating cash flow swung to negative Rs.2,314.68 Cr and gross debt rose Rs.2,974.89 Cr to Rs.9,847.22 Cr, directly contradicting management's prior commitment that debt would soften. The end-FY27 EBITDA/ton target of Rs.5,000 looks difficult on current H1 evidence, making the stock a negative-signal quarter pending subsidy notification and H2 realization recovery.

Key Investment Insights

Key Positives

• Revenue grew 7.2% YoY to Rs.7,364.06 Cr and 20.2% QoQ
• Trading purchases rose 69.5% YoY to Rs.3,356.20 Cr, consistent with ~0.5 million tons of imports secured for Q2–Q3 FY27
• H1 cash capex of Rs.310.63 Cr is on track against the FY27 normal capex plan of ~Rs.600 Cr
• MCFL provisional purchase price allocation expired with no adjustments required; goodwill unchanged at Rs.141.34 Cr
• Effective tax rate stable at 26.3% vs 27.0% YoY — no material tax drag

Risk Factors

• PAT fell 64.6% YoY to Rs.121.01 Cr; even normalized PAT of Rs.165.22 Cr is down ~51.7% YoY
• EBITDA margin compressed to 5.84% from 10.10% YoY; EBITDA fell 38.3% YoY to Rs.431.20 Cr
• Rs.59.98 Cr Ind AS 2 inventory NRV write-down recognized in Q2 FY27
• H1 operating cash flow was negative Rs.2,314.68 Cr vs +Rs.161.58 Cr in H1 FY26
• Gross debt rose Rs.2,974.89 Cr since March to Rs.9,847.22 Cr, contradicting management's February 2026 statement that debt would soften
• Disputed Customs, Goa adjudication of Rs.93.59 Cr in fines/penalties on urea imports remains unprovisioned