Madras Fertilizers Reports FY26 Net Profit of ₹8,042 Lakhs; Equity Turns Positive

Madras Fertilizers Limited , a Government of India Undertaking headquartered in Manali, Chennai, released its audited standalone financial results for the fourth quarter and full year ended March 31, 2026, following Board approval at a meeting held on May 12, 2026. The statutory auditors, M/s Sundar Srini & Sridhar, Chartered Accountants, issued an unmodified opinion on the financial results. The Board also approved the appointment of Mrs. Aruna Prasad, Practicing Cost Accountant, as Cost Auditor for the financial year 2026-27, subject to shareholder confirmation at the forthcoming Annual General Meeting.

Financial Performance Overview

Madras Fertilizers recorded a net profit of ₹8,042 lakhs for the year ended March 31, 2026, compared to ₹6,425 lakhs in the previous year. Total income for the full year stood at ₹2,37,355 lakhs, declining from ₹2,58,504 lakhs in FY25. Revenue from operations for FY26 was ₹2,30,035 lakhs, against ₹2,54,108 lakhs in FY25. Total expenses for the year were ₹2,26,286 lakhs, compared to ₹2,49,344 lakhs in the prior year.

The following table presents the key financial metrics for the quarter and year ended March 31, 2026 (₹ in lakhs):

Metric: Q4 FY26 Q3 FY26 Q4 FY25 FY26 FY25 Revenue from Operations: 69,921 41,869 55,452 2,30,035 2,54,108 Other Income: 1,344 2,447 1,625 7,320 4,396 Total Income: 71,265 44,316 57,077 2,37,355 2,58,504 Total Expenses: 68,175 43,962 63,512 2,26,286 2,49,344 Profit/(Loss) Before Exceptional Items & Tax: 3,090 354 (6,435) 11,069 9,160 Exceptional Items: (838) - - (838) - Profit/(Loss) Before Tax: 2,252 354 (6,435) 10,231 9,160 Total Tax Expense: 163 102 (1,191) 2,189 2,735 Net Profit/(Loss): 2,089 252 (5,244) 8,042 6,425 Other Comprehensive Income: 4,385 - (421) 4,385 9,317 Total Comprehensive Income: 6,474 252 (5,665) 12,427 15,742 Basic EPS (₹): 1.30 0.16 (3.26) 4.99 3.99 Diluted EPS (₹): 1.30 0.16 (3.26) 4.99 3.99

Revenue Composition and Subsidy Details

The revenue from operations of ₹2,30,035 lakhs for the year ended March 31, 2026 includes ₹1,83,478 lakhs towards subsidy for Neem coated Urea and ₹7,157 lakhs for freight subsidy. The subsidy rate adopted by the company for accounting the subsidy claim amounted to ₹38,360 per MT, which remains subject to variation upon final determination of rates by the Government of India under the new pricing scheme.

During the quarter ended March 31, 2026, final tariff notifications were issued for FY 2023-24 in respect of Neem coated urea subsidy, and for FYs 2021-22, 2022-23, and 2023-24 in respect of freight subsidy. As a result, the current year subsidy for Neem coated urea includes a reversal of ₹4,873 lakhs, while subsidy for freight is higher by ₹1,730 lakhs on account of these notifications. Additionally, pending Government approval for extension of the existing energy norm of 8.337 Gcal/MT of Urea, the company recognised a penalty of ₹1,148 lakhs for the quarter and ₹16,425 lakhs for the year ended March 31, 2026 as a deduction in subsidy income.

Balance Sheet Highlights

The company's total equity turned positive at ₹9,197 lakhs as at March 31, 2026, compared to a negative equity of ₹(3,230) lakhs as at March 31, 2025. Paid-up equity share capital stood at ₹16,110 lakhs (face value of ₹10/- each) across all reported periods. The following table summarises the company's assets and liabilities position (₹ in lakhs):

Metric: March 31, 2026 March 31, 2025 Total Non-Current Assets: 84,347 77,442 Total Current Assets: 1,48,869 1,45,893 Total Assets: 2,33,255 2,23,335 Total Equity: 9,197 (3,230) Total Non-Current Liabilities: 14,544 12,792 Total Current Liabilities: 2,09,514 2,13,773 Total Equity and Liabilities: 2,33,255 2,23,335

Cash Flow Summary

For the year ended March 31, 2026, net cash from operating activities stood at ₹529 lakhs, compared to ₹11,404 lakhs in the previous year. Net cash from investing activities was ₹3,092 lakhs, against a net outflow of ₹(17,400) lakhs in FY25. Net cash used in financing activities was ₹(3,418) lakhs, compared to ₹(5,130) lakhs in FY25. Cash and cash equivalents at the end of the period were ₹14,191 lakhs, up from ₹13,988 lakhs at the beginning of the period.

Operational and Governance Matters

During the quarter ended March 31, 2026, plant shutdowns were recorded as follows:

Plant: Shutdown Duration Reason Ammonia Plant: 0.17 days To attend a few minor issues Urea Plant: 2.25 days To attend a few minor issues Complex Fertilizer Plants: Entire quarter Safety issues and manpower shortage

The company has defaulted in repayment of principal and interest on loans taken from the Government of India. A request for waiver of accrued and penal interest, along with conversion of principal loan into zero-interest borrowings, has been placed on hold by the Department of Fertilizers under the new PSE policy framework under Atmanirbhar Bharat, and the company has been advised to submit a fresh proposal. Penal interest of ₹44,333 lakhs (previous year: ₹39,468 lakhs) has been reported as a contingent liability.

Exceptional items for the quarter and year ended March 31, 2026 totalling ₹(838) lakhs include enhanced gratuity cost with interest of ₹236 lakhs pursuant to a Madras High Court order, and a service cost of ₹602 lakhs arising from an increase in the gratuity benefit limit from ₹20 lakhs to ₹25 lakhs following a Pay Revision Order. The company also noted the absence of the requisite number of independent directors and a women director on its Board, resulting in non-compliance with applicable provisions and penalties imposed by the stock exchange, reported as contingent liabilities. NPK production has remained under suspension since December 2022, with raw materials held at ₹2,789 lakhs as at year-end under periodic technical assessment.

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