Synopsis: Technical ammonium nitride (TAN) segment maintained stable performance despite seasonal softness, supported by steady demand, improving exports, and strategic shift towards value-added segments, with strong operational efficiency and positive outlook ahead.
Technical Ammonium Nitrate (TAN) is a critical industrial chemical primarily used in mining, infrastructure, and explosives manufacturing. It serves as a key raw material for producing bulk and cartridge explosives, especially in coal, metal mining, and construction activities such as road building and tunnelling. The industry’s growth is closely linked to infrastructure development, mining output, and government spending on large-scale projects.
With the market capitalization of Rs. 15,464 Crores, the shares of Deepak Fertilisers & Petrochemicals Corp Ltd were trading at around Rs. 1225 per share which is 31 percent discount from its 52 weeks high of Rs. 1779 per share and is trading at a P/E of 17.8 whereas industry P/E stands at 18.3
Business segment:
Mining Chemicals: The Mining Chemicals segment operates with a Technical Ammonium Nitrate capacity of 587 KTPA and holds a dominant domestic market share of approximately 40 percent . This business vertical contributes 20 percent to the total group revenue as of FY25.Its product range includes high-density and low-density Ammonium Nitrate along with AN-Melt. These products serve critical end markets such as mining, infrastructure, explosives, and healthcare.
Industrial Chemicals : In the Industrial Chemicals division, the company maintains a substantial production capacity of 885 KTPA for Diluted Nitric Acid, 231 KTPA for Concentrated Nitric Acid, and 70 KTPA for Iso Propyl Alcohol. This segment commands a strong market position with a 58 percent share in CNA, 32 percent in DNA, and 24 percent in Merchant IPA. It accounted for 15 percent of the group’s total revenue in FY25, providing essential solvents for the pharmaceutical, nitroaromatics, and chemical derivative industries
Crop Nutrition : The Crop Nutrition segment is the largest revenue driver, representing 58 percent of the total revenue share for FY25. It possesses a manufacturing capacity of 300 KTPA for NP, 800 KTPA for NPK, and 57 KTPA for Bensulf.Recognized as a leading player in India’s specialty fertilizer market, the segment offers premium branded products such as Smartek and Croptek. These are strategically targeted toward cash crops, fruits, vegetables, and the water-soluble segment.
Technical Ammonium Nitrate Capacity Overview
Deepak Fertilisers has established a strong presence in the mining chemicals segment with a Technical Ammonium Nitrate (TAN) capacity of around 587 KTPA, catering to key end-use industries such as mining, infrastructure, and explosives. Its manufacturing footprint is strategically distributed, with a major capacity of about 544 KTPA atTaloja, Maharashtra and a smaller unit of 43 KTPA at Srikakulam, enabling proximity to key consumption centers. To further strengthen its market position, the company is undertaking a significant expansion through a 376 KTPA TAN project at Gopalpur, which is expected to be commissioned by Q1 FY27. Upon completion, the total ammonium nitrate capacity is projected to reach nearly 1.0 MMTPA, enhancing its scale and positioning it among the leading global pure-play TAN producers. Additionally, the company benefits from strong backward integration, supported by substantial nitric acid capacities which are critical raw materials for TAN production, thereby ensuring supply security, cost efficiency, and improved operational reliability.
Transitioning from Commodity to Specialty
The company is strategically evolving from being a pure Technical Ammonium Nitrate (TAN) supplier to a more integrated and value-added explosives solutions provider. Traditionally focused on supplying TAN in various forms such as ANS, LDAN, and HDAN, it is now moving downstream into higher-margin segments like cartridge-based explosives and ANFO-based bulk explosives.
This transition is further strengthened through the development of technical services and downstream operations, including offerings like TCO (Total Cost of Ownership) solutions and “down-the-hole” services used in mining activities. By expanding into blast-based services and adopting new business models, the company is shifting from a commodity-driven approach to a specialty and solutions-oriented model, enabling better margins, deeper customer engagement, and a more resilient business structure.
TAN Performance Remains Steady:
The Mining Chemicals (TAN) segment delivered a stable performance in Q3 FY26, with sales volume at 129 KT remaining flat YoY while declining 6 percent QoQ due to monsoon seasonality. Revenue increased marginally by 1 percent YoY in line with volumes but fell 4 percent sequentially QoQ. On a YTD basis, performance remained strong with volumes growing 11 percent YoY to 413 KT, while revenue rose 8 percent YoY.
The company’s strategic shift towards direct customers is reflected in the B2C segment contributing 16 percent to YTD revenue. Export volumes also improved following the government’s revision of export quotas to 50 KT per year in June 2025. Operational efficiency remained robust, with capacity utilization at 97 percent during YTD Dec’25. Looking ahead, Q4 is expected to be seasonally stronger post-monsoon, with demand recovery likely, supported by increased focus on direct sales and exports.
Conclusion:
Overall, the TAN business demonstrates a resilient performance backed by strong capacity utilization, steady demand from core sectors like mining and infrastructure, and improving export opportunities. While short-term fluctuations due to seasonality persist, the long-term outlook remains positive, supported by capacity expansions and a strategic shift towards value-added explosives and service offerings. This transition from a commodity-driven model to a solutions-oriented approach is expected to enhance margins, strengthen market positioning, and drive sustainable growth.
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