Investors are buzzing with excitement as Paradeep Phosphates continues to show remarkable momentum, with its share price soaring for a second consecutive day. On May 12, the stock climbed an impressive 7%, reaching a peak of ₹152 per share. This surge reflects a strong bullish sentiment among traders, despite the broader market experiencing increased volatility, particularly due to recent tensions between India and Pakistan. Over the past two months, Paradeep Phosphates has delivered a staggering 61% return, far surpassing the Nifty Smallcap 100 index, which managed just 10.42%.

Strong Q4 Performance Fuels Stock Surge

In its Q4 FY25 earnings report, Paradeep Phosphates posted a jaw-dropping 644% year-on-year increase in consolidated net profit, amounting to ₹160 crore. This impressive growth was bolstered by strong volume increases in a typically quiet quarter and an advantageous product mix that improved gross margins.

• Revenue from operations surged 56% year-on-year to ₹3,494 crore.
• EBITDA skyrocketed by 119% to reach ₹389 crore, with margins expanding by 300 basis points to 10%.

For the entire fiscal year, the company reported a 452% increase in profit after tax, driven by record fertilizer sales of 3.03 million tonnes and total revenue of ₹13,820 crore, marking a 19% growth from the previous year.

Future Growth Projections

Paradeep Phosphates is on track to achieve its ambitious volume growth targets, aiming for a 5-7% annual increase over the next few years. The company has already met its sales volume guidance of 3 million metric tons (MMT) ahead of schedule, thanks to strategic sourcing and a diversified production mix.

• The company’s total production capacity stands at 3 million MT, including 2.6 million MT of phosphates and 0.4 million MT of urea.

JM Financial Revises Target Price

In response to these stellar results, JM Financial has upgraded its target price for Paradeep Phosphates to ₹160, a record high for the stock, while maintaining its ‘Buy’ recommendation. The brokerage is optimistic about the company’s ability to sustain robust volume growth, particularly with the anticipated benefits from a favorable monsoon season.

• They project a 7% CAGR in volume growth from FY25 to FY28.
• The integration of phosphoric acid and improved energy efficiency measures are expected to enhance EBITDA per kg to ₹5/kg by FY27, up from ₹4.1/kg in FY25.

Two-Year Stock Performance

Remarkably, Paradeep Phosphates has seen its share price triple from ₹50 to ₹152, representing a remarkable 204% increase over the past two years. The stock recently achieved an all-time high of ₹153.50 on April 29, indicating strong market confidence in its future prospects.

As Paradeep Phosphates continues to break records and capture investor interest, it remains a noteworthy contender in the small-cap stock arena. For those looking to explore investment opportunities, this company is certainly one to watch closely.