Sustained raw material cost inflation
Sulfur prices surged 61% and sulfuric acid 50% in 8 months. Management maintained 14-15% EBITDA guidance by passing through costs, but sustained input inflation could pressure margins if price hikes lag.
KRISHANA / Q3-FY26 / risks
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Krishana Phoschem · Material risks, their source context, and severity in the latest available quarter.
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Material risks this quarter
medium
Margin dilution from high-growth import trading
Import revenue of ₹345 crore (52% of total) with significantly lower profitability than manufacturing compressed overall margins to 10.64%. Management acknowledged this as the primary margin compression reason.
Corporate tax rate at 40% impacts earnings
Company remains in MAT bracket (30%+ tax rate) resulting in effective 40% corporate tax. Deferred tax liability creates elevated tax outgo until exiting MAT, impacting EPS. Analyst questioned this; management attributed it to regulatory requirements.
Execution risk on new plant ramp-up
Madhogarh expansion targeting April 2026 commercial production faces execution risk given management acknowledged 'teething problems' expected in first year, with only 60% utilization targeted for FY27.