ICRA removes Deepak Fertilisers’ rating from watch and assigns a Positive outlook on [ICRA]AA-

Deepak Fertilisers And Petrochemicals Corporation Limited has told the exchanges that ICRA Limited has reaffirmed its long-term fund-based term loan rating at [ICRA]AA-, removed it from "Watch with Developing Implications", and assigned a Positive outlook. The filing is dated 15 Oct 2026.

ICRA says the rating action follows the start of gas supplies under the company's contract with Equinor on the agreed schedule and pricing terms, which has supported stable ammonia production at its subsidiary Performance Chemiserve Limited. ICRA says the gas is linked to the Henry Hub index, so the group's landed gas cost is lower than for oil-linked or spot LNG, and elevated ammonia prices lifted the subsidiary's profit in the first quarter of FY2027.

ICRA also notes healthy growth in the ammonium nitrate business, while the fertiliser segment faces high phosphoric acid and ammonia costs that the industry has not been able to fully pass on. It names the coming announcement of nutrient based subsidy rates as a key monitorable, and expects the group's profitability to remain healthy in FY2027.

Inference

A rating on watch means the agency was reviewing it because of a pending event; removing it from watch and giving a Positive outlook means the agency now sees a better chance of an upgrade than a downgrade, though the rating itself stays at AA-.

ICRA's reasons depend on gas supply under the Equinor contract and on ammonia prices, and it points to subsidy rates for fertilisers as a risk to watch. Shareholders may want to follow those two factors and the company's results for how they show up in profit.