Robert Green, 21, who was covered in Satanic tattoos and boasted of his animal sacrifices, daubed a Satanic symbol on his victim's forehead, Birmingham Crown Court was told.
He denied murder but admitted manslaughter on the grounds of diminished responsibility, and was was detained under a hospital order with no limit for his release.
The judge, Mr Justice French, said: 'This was an appalling and horrendous slaughter of a totally inoffensive young man. I am satisfied at the time you were, and to a lesser extent are, thoroughly deranged and deluded, and you continue to present a danger to yourself and others.'
Timothy Raggatt, for the prosecution, said Green became obsessed with the occult and had a Satanic symbol tattooed on his forehead.
'He thinks himself as a devil's disciple and his room shows that. It is covered in posters and signs showing a manifestation of his obsession, and he has tattoos on his forehead and arms.'
Green, of Tile Hill, Coventry, West Midlands, and the victim, Thomas Coleman, 30, were both long-term unemployed and were working on a training scheme run by Coventry City Council at Cardinal Newman School.
Mr Coleman's Christian beliefs led Green to single him out. Green designed an axe with a pointed metal head for his ritual killing and attacked him while the two men were working in a greenhouse.
In an interview with police, Green is alleged to have said: 'He started on me, pushing the Bible, but this time he went too far.'