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ICRA revises ratings outlook of Rama Phosphates to 'stable'; reaffirms ratings at 'A-/A2+'
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(15:30, 27 Dec 2025)

The agency has also affirmed the company's short-term rating at '[ICRA] A2+'.

ICRA stated that the revision in the outlook factors in an improvement in the company's overall credit profile, supported by a strong recovery in operating performance in FY2025 and H1 FY2026. The remunerative subsidy rates and retail prices for single super phosphate (SSP) supported the improved performance.

Additionally, there has been a sharp uptick in profitability from the sale of sulphuric acid amid its constrained availability in the domestic market. As a result, the credit metrics are expected to witness a significant improvement in FY2026.

ICRA expects RPL's profitability to remain healthy, given the Government of India's (GoI's) focus on maintaining adequate availability of fertilisers and RPL's backward integrated operations supported by sulphuric acid manufacturing, which will keep the credit metrics stable.

ICRA notes that the company is in the final stages of commissioning the Dhule plant, wherein the company is adding 0.22 MMT of SSP capacity. The commissioning of the Dhule plant in March 2026 will help scale up the revenue FY2027 onwards.

The company is also looking to set up a sulphuric acid manufacturing capacity of 90,000 MT at Dhule in FY2027 at a total capital outlay of Rs 30 crore, to be funded through a term loan of Rs. 20 crore and the rest from internal accruals. ICRA expects the company to maintain a stable credit profile while incurring the aforementioned capex.

The ratings assigned to the bank lines of RPL continue to factor in the company's established presence as a manufacturer of SSP fertiliser acrossMaharashtra, Madhya Pradesh, Rajasthan, Karnataka, Gujarat, Uttar Pradesh, Haryana, etc.

The ratings favourably consider the extensive experience of the promoters of more than five decades in the fertiliser and chemical businesses along with a diversified product portfolio comprising phosphate fertilisers, sulphuric acid and soya-based products.

The ratings also factor in the integrated operations of the company wherein it also manufactures sulphuric acid which is usedas an input for manufacturing SSP. The backward integration ensures assured availability of the raw materialfor the company.

The capital structure remains comfortable, with total debt-to-OPBDITA expected to remain in the range of 1.2x'1.5x, despite the ongoing capex for capacity expansion.

The ratings, however, are constrained by the volatility in raw material prices, majorly rock phosphate and sulphuric acid along with volatility in the foreign exchange rates. The profitability remains vulnerable to foreign currency riskas a large part of the rock phosphate requirement and some part of the sulphur requirement is met through imports while the company does not hedge its forex exposure.

Further, the overall realisations on the sale of SSP comprise subsidy payable by the GoI and the retail price. The subsidy rates are usually fixed for a period of six months and there is limited flexibility in revising the retail prices owing to the price sensitive nature of the end user i.e. farmers. Hence, the company's profitability remains exposed to the volatility in raw material prices.

The company's profitability is also exposed to regulatory risks pertaining to the announcement of subsidy by the GoI, which is a key driver of the industry's profitability. This, along with the schedule of the subsidy release, determines the working capital cycle of fertiliser companies.

The company is also present in the soya oil division which involves the sale of unrefined soya oil and de-oiled soya cakes as animal feed. The segment has been posting minor losses for the last few yearsand the subdued performance is expected to continue amid volatile prices for soya oil.

RPL manufactures phosphatic fertilisers -single super phosphate (SSP), fortified fertilisers namely boronated SSP as well as sulphuric acid and its derivatives. It also has a soya oil division which is engaged in the extraction of soya oil.

The scrip had fallen 2.50% to end at Rs 159.75 on the BSE on Friday.

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