Welcome to Coromandel International Q3 FY25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star 70 on your touch-tone phone. I now hand the conference over to Mr. Ranjit Cirumalla from IIFL Capital. Thank you, and over to you, sir.
Thank you, Muskan. Good afternoon, everyone. Welcome to the Coromandel International Q3 FY25 earnings conference call. We thank the management for giving us this opportunity to host the earnings call today. From the management, we have with us Mr. Sankarasubramanian, Managing Director and Chief Executive Officer, Dr. Raghuram Devarakonda, Executive Director, CPC, BioProducts and Retail, and Mrs. Jayashree Sadagopan, President, Corporate and CFO. We would begin the call with an opening remark from the management, after which we will have a Q&A session. Over to you.
Good afternoon, everyone, and thanks, Ranjit, for organizing this conference call. I'll give a brief overview on the business environment and the company performance, and Jayashree will take you through the financials, then we can have a Q&A session at the end. On the agriculture scenario, the rainfall in the Northeast Monsoon, which is a major rainfall activity over the South Peninsula, especially in our markets of Andhra, Rajasthan, Tamil Nadu, and Karnataka, has been good, and all regions have reported good rain, especially in the October-December period. And the majority of these regions received above-normal rain. Also, going by the yearly estimates for the next cropping season, global weather models are predicting low to neutral conditions to prevail, which augurs very well for the agriculture scenario for the next season.
Thanks to good monsoon, reservoir levels are comfortable, especially in the southern part, with most of the regions reporting high storage compared to last year's normal levels, although there are some drops in the northern regions. The environmental conditions have resulted in improved crop sowing. As of January, we could see 2% growth in the crop sowing, reaching 64 million hectares, predominantly wheat, rabi beans; the rabi season wheat is the predominant crop, 31 million for pulses, 14 million for oilseeds. The first advance estimate of the major agri crops projects the food grain output at 167 million tonnes, which is 9 million tonnes more than last year, and the record output of paddy and millet is expected in the current season.
The gross value added from agri and allied industries is also expected to grow at 3.8% compared to last 1.4%, making it the fastest-growing sector in the country. On the policy side, there has been good development in terms of infrastructure strengthening. The government has recently announced the work under the Ken-Betwa River Linking Project that intends to bring 3.5 million hectares under restored irrigation. Further, there has been renewed impetus for completion of the Polavaram Project in Andhra, and that can bring in another one million hectares of land under irrigation, especially in our home market. As you are aware, the government has been closely engaging with the industry to ensure availability of fertilizers.
During the Rabi period, especially in the initial sowing stage, the industry and government have worked together and ensured availability of DAP in the northern markets, and also availability of alternate grades of NP and NPK grades. To support this, the government has also announced a special package of INR 3,500 per metric tonne, which extended beyond 31st December up to 31st March. Besides this one-time package, they have also extended additional price compensation beyond purchase price of DAP in order to ensure availability of DAP. As a company in the industry, we are working towards balanced distribution and trying to see how best the shift can happen from DAP to NPK. On the industry side, fertilizer raw materials are fairly stable, except we saw a sudden spike in sulfur and sulfuric acid, especially due to demand coming from China and Indonesia.
Processing price for Q3 has been fixed at $1,055, a $5 reduction over the previous quarter. Also, there has been a corresponding reduction in crop prices we have witnessed. Overall, I would say the raw material prices remain reasonably stable and likely to remain stable in the fourth quarter with the easing of geopolitical tensions across the globe. For the nine-month period, phosphatic fertilizer production for the industry has gone up by 5% to 11.3 million tons. Of course, imports were lower to 5.6 million tons, almost 20% lower, basically due to the upside change in the direction of DAP. Overall, on the consumption side, it is one of the best seasons industry has ever witnessed, and this period, the year-to-date consumption has grown by 6% to 20 million tons versus 18.9 million tons last year.
Also, we have seen the shift happening between DAP, even though the availability was less, but farmers have opted for NPK, and almost, I would say, a million-tonne shift has happened from DAP to NPK, especially in the northern markets. The response to the grade by 20 days has been good. Overall, share of NPK has moved up to 58% from 49%, and Q3 also witnessed significant uptake in demand, and consumption rose by 27% due to improved agroclimatic situation. SSP industry consumption also has grown by 3% on a year-to-date basis, and especially in Q3, it has grown by almost 59%. Crop protection, global markets are seeing gradual reduction in the channel inventory level with improvement in consumption. Some of our key molecules have received good interest in the market, and we expect the situation to further improve in the coming period.
Coming specifically to our company performance for Q3, Coromandel has reported very resilient performance with overall increase in volumes across the business segment and improved operational efficiencies due to higher throughput, especially of intermediate phosphoric acid and sulfuric acid, low conversion costs, and improved power generation in the fertilizer units. Besides that, all business segments have grown on new products and value-added products. Our plants have been operating at 95% capacity, producing 8.4 lakh tons of NPK. We also registered record phosphoric acid production in Q3, and the new sulfuric acid plant, which commissioned in the last year, has been operating on 100% capacity, which helped the business to capture value on power savings, and also in the volatile spike of sulfuric acid, it was very advantageous for the business to have access to capture sulfuric acid.
Our ongoing project at Kakinada for setting up 2 lakh tons of phosphoric acid and related sulfuric acid is progressing well, and we expect the plant to be commissioned by Q4 of next year. As you all know, we announced investment in additional capacity of 7.5 lakh tons of NPK facility at Kakinada. Last week, we carried out Bhoomi Puja to initiate the project activity, and we are in the final stage of negotiating with technology providers and also business partners and ensure that this project will come up in the next 24 months and be there for commercial production from Q4 of 2027. On the marketing side, we have significantly improved our volumes. Primary sale of NPK in Q3 stands at 11.4 lakh tons, has, again, 9.4 lakh tons we had last year, corresponding trade, registering growth of 21%.
It's heartening to note that our consumption has been extremely good. There has been an increase of 78% in consumption, and it stands at 12.7 lakh tons, as against 7.3 lakh tons we had. This has considerably reduced the channel inventory for the company, and also our ability to take the material to northern markets has also been very useful to balance inventories in case of any uncertainty. For the nine-month period, our consumption-based market share has moved up to 17% as compared to 13% last year. The company is strengthening its marketing infrastructure and, during the quarter, inaugurated central soil and leaf testing labs, a state-of-the-art facility at Kakinada. They also set up a polyhouse facility near Hyderabad to drive research in protected agriculture space. SSP also registered a quarterly volume growth of 29% with the major share coming from value-added products like GroPlus and our SSP.
On the specialty nutrient business, which mainly relates to water-soluble fertilizers, secondary micronutrients, and organic fertilizers, we had a very good quarter. The business could recoup the volumes lost out in Kharif, and they could show improved volumes, especially in organic fertilizers. The business commissioned bentonite sulfur plant, which has improved the capacity from the current levels. On the Nano DAP, our agronomy team has been continuously engaging with the farmers across the country and carrying out field trials, and the response has been quite positive, and during the nine-month period, we have sold 25 lakh bottles, almost 40% of the total sales happened in the country. As you all know, we have also started the Gromor Drive, which is a drone spraying activity carried out in the last nine months, and we have covered more than 1.1 lakh hectares, including the services rendered through our retail outlets.
These spraying services, besides providing benefit of cost and convenience to farmers, it can also comfortably save 90% of the water during input application as compared to conventional methods. This will be one of the activities which Coromandel will be scaling up as we move forward in the next two years. Crop protection bio-business, actually, crop protection has done well in the domestic formulation segment, registering growth of 14%, and global export market also registering growth of 5%. The business also improved its margin structure, and EBIT has improved by 8%, especially driven by domestic B2B and formulation segment. Overall, EBIT margin for the segment is at 14.3%. The new products introduced during the year have performed very well, and the share of sales on new products for the year stands at 24%, has, again, 14% we had last year.
In exports, our key products have started receiving increasing demand, driven by positive momentum in Brazil. The business has initiated activities for its multi-purpose product plant at Ankleshwar, which was approved by the board in the last board meeting, and we are progressing well to commission the plant in 18 months' time. Bioproduct business improved its margin during the quarter through volume, though export volumes have got impacted, and there has been a delay in securing orders, which will come through in the fourth quarter. The business is looking at collaborative opportunity on the agri side, expanding the product portfolio beyond agri. The company has also initiated steps to collaborate with a global trading company based out of Europe for niche product segments, similar to a CDMO opportunity, which can open up doors for future such engagement and can take the bio-business to the next level.
It's also testing out the new products in plant extract and microbial space, and happy to share that a lot of products are in the final stage of approvals and registration. In CDMO, we continue to engage with multiple customers, and we are in the stage of sample submission. Further engagement will happen before we come into operation. Retail business delivered very strong performance during this quarter, and the business focused on all across segments. Fertilizer has done extremely well through the retail outlet, and also they improved the performance on all other verticals. Crop protection sales have considerably improved. Specialty nutrients have grown well, and they also increased organic fertilizer volumes. And also, they are in the process of adding new stores. They've added 18 stores during this quarter, and now the total store count has moved to 800.
The retail business is also focusing on creating exclusive crop protection liquid fertilizers and drone spraying services stores under the brand name of Gromor, and they are doing the pilot for three or four stores, and if it works well, they will extend this to more number of stores across AP, Telangana, and other states. These are my initial observations on the business performance. I will request Jayashree to cover on the financial side.
Thank you, Sankar. Good afternoon, all. Let me take you through the financial performance for the quarter and for year-to-date. Turnover, the company recorded a consolidated total income of INR 7,049 crores during this quarter and INR 9,330 crores for the nine months ended 31st December, registering a growth of 28% for the quarter and 6% for the nine months. The increase in revenues is mainly on account of higher volumes in the business.
Nutrients and allied businesses contribute to 91% share, and the remaining 9% comes from crop protection business. For the nine-month period, it was 90% and 10%, respectively. Subsidy businesses shared in revenues stand at 84% for the quarter and 83% for nine months. During the previous year, it was 82% for the quarter and 84% for nine months. Profitability, the consolidated EBITDA for the quarter was INR 722 crores, as against INR 358 crores during the last year. For the nine-month period, it was INR 2,202 crores, as against INR 2,126 crores during the last year. Subsidy businesses shared in EBITDA stands at 69% during the quarter and 71% for the nine months. Previous year, it was 37% for the quarter and 74% for nine months.
Net profit after tax for the quarter is INR 508 crores in comparison to INR 228 crores for the corresponding quarter last year and INR 1,476 crores for the nine months against INR 1,477 crores during the last year. Subsidy. During quarter three, the company received subsidy amount of INR 2,036 crores. Last year, it was INR 721 crores. For the nine-month period, subsidy received totals to INR 5,892 crores, and in the last year, it was INR 7,033 crores. Subsidy outstanding as of 31st December 2024 was at INR 2,095 crores. Balance sheet. The company's balance sheet continues to be strong. Focus on working capital improvements has helped in augmenting the cash position. Company intends to utilize the investable surplus for its capital investments as well. Incentives on capital investments. The company had applied to the AP government for availing incentives on the large capital investments that's being made in the state.
This has been favorably considered by the State Industrial Promotion Board. Tax matters, the company has successfully applied and has been receiving GST refunds. During the quarter, the company engaged proactively with the GST authorities and represented the matter relating to a demand of INR 489 crores against the earlier GST applications and refund receipts. The company has recently received a favorable order from the GST Commissioner of East. Interest, during the quarter, the company earned net interest income, excluding the Ind AS adjustments, of INR 51 crores vis-à-vis INR 31 crores in the last year. For the nine-month period, company earned a net interest income of INR 68 crores vis-à-vis INR 53 crores in the last year. Company continues to deploy the surplus funds in board-approved securities and will be deploying them further for its future strategic investments.
Forex, during the later part of the third quarter, the US dollar strengthened against most currencies, with the Republicans winning in the US elections and Donald Trump getting back to power. Indian rupee, like other global currencies, witnessed a sharp depreciation, moving from INR 83.79 to INR 85.68 during the quarter. Coromandel continued to follow a prudent conservative approach of hedging the forex exposure, which has immensely helped in limiting the impact of the currency depreciation. Dividend, the board in its meeting held on 30th January 2025 has approved an interim dividend of INR 6 per share. Thank you all for your interest in Coromandel and joining the call today. We look forward to the interactions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touch-tone telephone.
If you wish to remove yourself from question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Nilesh Shah from Envision Capital. Please go ahead.
Yeah, good afternoon, team. Ma'am, I have two questions to ask. So one on the agro side. Ma'am, if you can share what was the volume growth for mancozeb in nine months of FY25 vis-à-vis of nine months of last year, as well as if you can share that recently we have seen the prices of mancozeb in the international market moving up. So how much of that is captured in Q3, and how much is still left to be captured going forward?
So Nilesh, thanks for your question.
I'm just going to get the volume data out. Meanwhile, in terms of the Mancozeb prices, I'm going to request Raghur to give you a bit of an update.
My question is in terms of specific products and pricing, let's look at the macro picture if we need anything.
I'll let Raghur to respond to it, but we'll not get into specifics on the product pricing and volume at this stage.
Fine. Fine. Fine. Sir, also if you can share, last year we produced close to around 70,000 tons of technicals out of our 90,000 tons of production capacity. So how are we looking FY25 and FY26 in terms of the production of technicals, even the kind of newer products we have launched on the formulation side? Please along with if you can combine the volume data growth for Mancozeb, that would be helpful.
Look, as Jayashree touched upon, before you comment on mancozeb, it may not be appropriate to look at absolute volume technicals because more and more new products are coming in which are high volume and low volume, and some molecules also go out of the system. It may not be appropriate to look at tonnage as the indicator for the future growth prospects. Rather, we should look at whether we have got pipeline for new generation molecules which can improve the overall business prospects and the margin structure. There are enough opportunities available for us to scale up the production, and recently, in the last board meeting also, we have taken approval to enhance the capacity of our technical facility. Besides whatever multi-purpose plant, we took approval. We are looking at some greenfield capacity expansion, which may come up between Sarigam and Dahej.
We are looking at the current business environment, opportunity it grows up with us in terms of the registration for countries in which we operate. We are planning to take advantage of the market situation and increase our volume growth. Definitely, the capacity utilization may come down due to monocrotophos moving out, but we are resurfacing these plants with new technicals and new products. The projects which have been initiated in the beginning of this quarter or in the final stage will be completed by March. This will come into next year in production line and will be launching the products and brands both in domestic and global markets. Raghur may supplement with any volume data relating to Mancozeb.
So, primarily, just to add, I think specifically the technicals that we are talking about, as we have mentioned in the previous interactions, we're crossing our portfolio to enter herbicides also. So, I think there is so that we get a good balanced portfolio of insecticides, fungicides, and herbicides, which are viewed to support our formulation foray, which is with the greater determination to grow into the market, as well as we have moved our foray into selling formulations in the export market as well. So, with that objective, we have invested in the backend to make some new technicals so that we produce ample quantity both to support the B2C as well as the B2B opportunity.
Got it. Got it. The second question is on the SSP side.
So if you can share your thoughts here because last year was bad in terms of the SSP, but given the kind of price increases and the shortages that we have seen on the DAP side, possibly SSP being a good substitute, how do you see the volume growth for SSP in FY25 and FY26? And also if you can share what sort of margins per ton we are currently making on the SSP side? Because in one of the interactions earlier, Ma'am mentioned that we were anywhere between INR 1,500 to INR 2,500 a ton of SSP margin. So if you can share your thoughts here, that would be very helpful. Thank you so much.
SSP is definitely revert. In fact, current year performance is much better. As I rightly said, the shortage of DAP and also the good monsoon situation, there has been a spike in SSP volume.
In the case of Coromandel, more than chasing volume, we have looked at the value-added products. We have a unique product which is base SSP plus micronutrients like zinc and boron, which can be a potential alternative to DAP. It's been doing extremely well. We have scaled up the volume of these variants. In fact, the major share of our volume growth which happened in this quarter has come from these differentiated products like GroPlus. Also here where we have introduced UVSSP, which besides C, it's called contained N as well. And this is again a one-to-one alternative to DAP. So that has also been very well received in the market. Our aim in SSP business is to focus more on value-added granulation products. And accordingly, we are increasing our capacity to produce UVSSP. A plant which came up in Nimrani for UVSSP has been operating at full capacity.
Now we are trying to add this facility at Udaipur, which is another plant for SSP, and going forward, more than 50%-60% of the total SSP volume will come from these differentiated products, which improves the margin structure. You are absolutely right. The margins are in the range of INR 1,500-INR 2,000, but it can potentially go up with the increase in share of this upgrade. As you know, we have plants across the country, and we have capacity close to a million tons. This year, we had some challenges in availability of sulphuric acid, and we couldn't scale up the volume, but going forward, our aim would be to reach a million ton capacity in two years' time, probably taking it to 800,000 tons next year and thereafter a million ton.
And that too with focus on these specialty grades, which are as good as any other NPK product.
Thank you, participant Nilesh. The next question is from the line of Prashant Biyani from Elara Capital. Please go ahead.
Yeah, thank you for the opportunity and congratulations on great set of numbers. Sir, POS volume this quarter has been very strong across India in both Urea and Complex. What is driving this, and would it mean that Q4 dispatches should again be seeing double-digit growth for us?
So overall monsoon conditions, reservoir levels, and crop acreages, the consumption has gone up significantly. In fact, as you are aware, in the year beginning, the channel was carrying higher inventory that partially got reduced in Kharif. Now in this Q3, there's a significant reduction in the channel inventory.
As you all know, most of the market, the crop season comes to an end by February, middle, or end. The consumption may not happen from March until the season starts in May. But having said that, we could see significant improvement in POS volume even in January. So this is really helpful in terms of reducing the channel inventory, thereby unlocking the subsidy amount which is stuck in the system. It's good, and also it portends well for the ensuing Kharif season where the industry can build up inventory and meet the market demand. But the volume growth is contingent upon the capacity and the import tie-up which has happened. So it won't be a double-digit growth. It will be as per our plan, and as you know, fourth quarter, we generally take annual turnaround. So our volumes will be more or less aligned with the market demand.
That's the way we have been doing it here.
Sure. Sir, for FY26, what kind of volume growth are you looking at? And it will be contributed by incremental volumes would be contributed through manufacturing or trading?
It will be a combination of both. Very difficult to put a number, but we have been carrying out some debottlenecking of our facilities at Kakinada as well as Vizag. And that will be really adding to the volume increase next year. And also our Ennore plant where we have currently restarted only phosphoric acid and sulfuric acid, we are yet to start the granulation plant. So that volume, you all see the volume growth. All this growth is happening in the existing plant with Ennore not operating at granulation facility from the year beginning. It shows the productivity and the debottlenecking which has already happened in the existing facility.
We are trying to repurpose this plant for any alternate range of NPK facilities. So there is a potential volume increase in manufacturing, either by getting back Ennore and also by debottlenecking the capacities at Kakinada and Visakhapatnam. Besides that, we may resort to import, especially DAP. The company we manufacture NPKs and we import DAP. And also sometimes we also resort to NPK. As a strategy, we are determined to scale up the volume in the next two years to ensure that whenever the new plant comes up, we develop the markets, especially in the northern states of Punjab, Haryana, Rajasthan, and Uttar Pradesh, that we'll be able to easily absorb the volume as soon as the plant is commissioned. So there will be growth in volume in the coming years.
Right.
Sir, for this quarter, I think there is a dip in non-subsidy, non-CP EBITDA from the segment which comprises of Spectrum Organic Nutrients, retail, and others. Is the reading right? And if yes, what is driving this decline? And I was a bit confused because in your initial commentary, you told that specialty nutrient business was good, but this non-subsidy, non-CP EBITDA is showing some decline. If you can confirm that.
I don't know how you arrive at the math. All these are part of the nutrient segment, both specialties as well as retail. Consumption of the nutrient segment, and that has grown. And in fact, our retail growth has done extremely well in volumes across categories, and most of those have become profitable. 90%-95% of those growth are profitable. The retail has done well. And specialty nutrients have also grown on volume compared to last year.
Both solubles and phosphoric nutrients have grown for this segment as well. And also we have improved our Nano DAP volumes compared to last year. So probably there can be a marginal reduction in the bio business where the export orders we executed last year has not happened. A reduction. There is only a correction or a reduction in the bio business. The rest of the segments have grown well.
Okay. I'll come back in the queue. Thank you.
Thank you.
Thank you. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead.
Thank you for taking my question and congratulations on a great set of numbers. The first question is in terms of supply chain. So we are setting up new granulation trains. So we had acquired a stake in Baobab Mining. Any other such acquisitions on the anvil?
We had talked about securing rock phosphate. We haven't seen any such acquisitions or such tie-ups post this one. So would like to hear your comments on the same.
For the new granulation capacity, the phosphoric acid required INR 200,000. We are putting up a new plant. So that takes care of, and the corresponding sulfuric acid needs also we are putting up a plant. So these two major intermediates, what is required for granulation facility is tie-up, and ammonia we have a long-term contract in that instance, so we don't see any challenge. For phosphoric acid, we require rock. And we have a fair visibility on the supply of rock. And you are right, Baobab Mines, we are scaling up during this quarter. We have commissioned the fixed flotation plant, and the operations are getting stabilized.
At this current rate, we are able to ship out one ship every 45 days, and soon that will get reduced to 30 days with improved throughput, so we do expect Baobab Mines can scale up volume to 300,000 next year and in the following year up to 500,000, which is a significant supply to meet the Kakinada rock requirement for the new phosphoric acid plant, so we don't anticipate any challenge in terms of securing rock phosphate for the new plant. It will be driven by Senegal supply plus other existing sources where we have long-term contracts.
Sure. That's helpful, and at 500,000, would that entity be profitable?
Yes. It should. The cost structure once the volume improves. Currently, the cost structure is a little on the higher side because of the lower output, but output gets stabilized. We are highly confident that it will be much more competitive.
More than looking at the standalone profitability of Baobab, we look at the complete value chain of phosphoric acid as a value addition and also our ability to buy rock from other sources at a competitive price. Our understanding of mining, our understanding of rock market is definitely helpful to secure the entire volume at a most competitive price. But I don't look at Baobab on a standalone phosphoric acid basis. On an integrated basis, it's a strategic choice for the company.
Sure. Very helpful, sir. Sir, the second question is on the retail piece. You also did allude to it. What would the turnover be of this business, say, in the third quarter and in nine months? And in terms of year on year, how are we looking at scaling this up going forward?
I don't know. As for the segmental, we don't put out the separate top line and profitability. But what I can say is that it has grown significantly on Q3 alone. The top line growth is 20%. And in terms of bottom line growth, there also we have seen significant improvement. The category, more than the absolute profitability, in fact, the bottom line on retail, where we capture only the retail margin, we don't capture the entire margin because that remains with the rest of the CP in terms of captive product. Only for the third-party, the entire margin goes to the retail business. There has been 17% growth in the profitability as well. Looking at the revenue and profitability, that alone is a replicated scale of the new product.
So we have seen in the last few quarters, whatever new product in crop protection or specialty segments or organic, the ability of retail to connect with and communicate with the farmers and scale up the volume has been tremendous. We have given enough confidence for us to enhance the number of centers on the current level. The last time also we spoke about increasing the centers, doubling from current level, and we are on that path. And we'll be adding significant number of stores in fourth quarter as well. And we also plan to add additional numbers in the next year as well. But strategically, I think the upside of retail is still left to play out.
Sure. Sir, what would be the number of stores as of 31st of December? And would it be EBIT positive as a whole?
Absolutely. 810 stores. 810. Yes.
And you said we are looking at doubling it over two years to maybe 1,500 plus by FY27.
Correct.
Perfect. Thank you so much and wishing you all the best.
Thank you.
Thank you. Ladies and gentlemen, to ensure that management is able to address questions from all the participants, please limit the question to two questions per participant. For follow-up question, we request you to rejoin the queue. The next question is from the line of Somaiah from Avendus Spark. Please go ahead.
Yeah. Thanks for the opportunity. Sir, the first question is on the volume that we have done, 11% growth. Could you help us understand how much was contributed from our core regions and how did we benefit from the northern market expansion?
And also, if you could give some color on the northern market expansion, which are the regions and how we are planning it for the next one year?
This quarter, basically Rabi season, the activity is more in the northern markets compared to the south markets, especially in the month of November. And as I mentioned in my earlier communication, as part of our strategy to increase the availability of Gromor in the northern market, we started sending shipments to the state of Madhya Pradesh, Uttar Pradesh, Rajasthan. The volumes, almost 3.1 lakh tons, have come from north and central. If I have to compare the earlier last quarter corresponding to this, they've run 1.6. So almost we can say we have doubled our numbers as compared to last year's corresponding quarter.
These are strategic calls we have taken to ensure that we move to northern markets for our entry NPK and position ourselves as a pan-India player on the fertilizer, especially phosphoric acid business, and also, we have significant presence through Single Super Phosphate, also through specialty nutrients, and this year we launched the nano, so we have a complete range of product portfolio, so while we have been focusing on primary markets of Andhra, Telangana, Karnataka, and Maharashtra, we started focusing on these secondary markets. Our aim would be to scale up the volume in the coming years, and we are a pan-India player for the entire nutrition segment, ranging from SSP to specialty fertilizers.
Got it, sir. Sir, also, could you give some color on the global phosphoric acid market, how you are seeing in terms of supply-demand dynamics and also on rock?
Is this a year where there is a good amount of supply and the demand is kind of normalizing compared to last year, or do you see still things to be on the tighter front because phosphoric acid prices have kind of slightly gone up now, now we are at INR 1,000 to INR 300 level? So just wanted to understand your thoughts on the supply-demand dynamics.
So phosphoric acid globally, most of the countries have started securing fertilizers for their domestic use, but to that extent, there is no significant addition to the global trade of phosphoric acid. But the sources which have been supplying acid, especially to Coromandel, we continue to receive those supplies. In fact, we have diversified our phosphoric acid sources to more than six to seven.
And these are sulfur that we import from China, we import from Middle East, we import from Philippines, and also we get it from our own joint ventures like Tunisia, and we also get it from Europe. So to that extent, and also we have de-bottlenecked our capacity at Vizag steadily year on year. And the surplus acid from Vizag also moves to Kakinada. Besides that, we are putting up a new phosphoric acid plant of INR 200,000. We don't see much challenge in terms of availability of phosphoric acid. However, we should be able to grab the market and make it available. And in terms of the rock, we have a significant requirement both for Vizag and Kakinada. Currently, we have 1.5 million tons we consume with Vizag. It may go up to 2.3-2.4 million tons when we commission Kakinada plant.
But we have stable sources from African countries, and we don't see any major challenge. The current pricing scenario, phosphoric acid prices generally track DAP prices. And as a country, as a company, we are in a position to negotiate terms in line with the DAP price movements and ammonia prices, which leaves the residual value for phosphoric acid. That has been the trend in the past. And India was able to negotiate better price terms as compared to global prices prevailing in Europe and other parts of the world. So in terms of the rock pricing, as I mentioned in my earlier communication, there has been a reduction in rock price in the last quarter, and that will be consumed in the next quarter.
And going forward, also, I expect some softness in rock phosphate, which we could see, especially for SSP use and also for our main phosphoric acid production. So we are not expecting any challenge in securing raw material as well as the prices. Prices generally track DAP, and phosphoric acid tracks DAP, and rock tracks phosphoric acid. That has been the trend. And with our own captive mines coming in, additional supplies coming in, we don't expect any significant jump in price of rock phosphate.
Got it, sir. Sir, one follow-up on our margin outlook. If we need to give -
Sure, sure. Yeah. Thank you so much. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead.
Yeah. Hi, sir. Congratulations on a good set of numbers, and thanks for the opportunity. First question on the fertilizer margin outlook.
We had highlighted during our management interaction earlier around 40-odd% jump in overall fertilizer margin. Just wanted to understand the timeline for it and whether the SSP change in SSP portfolio, the differentiated products that we are making, is a top-up to that 40% jump or is including in that guidance that you had given earlier?
This is different in the context of the value addition what we'll get once we commission sulfuric acid, phosphoric acid plants at Kakinada. So that number remains intact. And as soon as this plant gets commissioned, the improved conversion cost, efficiency, and the value addition what we have, and the ability to secure rock from our captive mines, we should be able to achieve this sort of a jump in EBITDA margin probably in two years down the line. And that also includes the portfolio of SSP as well.
Overall, on the fertilizer portfolio, it was suffering a little. While the jump in SSP may not be to the extent of 40%, but definitely with the value-added products, there will be a significant increase in the margin profile of SSP as well.
Sure, sir. And just secondly, your thoughts on the crop protection business, especially on the export side. The pricing-led competition that we had been seeing earlier, and given that we are now, are we now expanding into newer geographies as well, or the growth focus from crop protection perspective will be largely on India as a market in terms of in-license and combination products, and export will be taking a backseat? Your thoughts there.
So we'll be growing in all the three segments, whether it is exports or B2B and B2C. And the main reason we are expanding capacity is catered to all the three segments today.
If price fluctuations do happen in any commodity sector, and we have also diversified our geographies, so we don't depend only on Latin American markets. That can be a price competition. But we have our own long-term buyers of our key molecules that negotiate. And we've also seen that in the recent past, there has been increased demand and uptake of these molecules because of the additional space, which certainly Latin American growers have recovered to, that has created additional demand. And also the de-sucking which is happening in the ongoing season, that is also helping us to get the better price. Our focus will be to see how best we can increase the volume in the export market. Right now, we predominantly focus on B2B. We are also trying to see how do we formulate and sell various technicals.
Also, we are trying to see can we look at B2C market also. While we are preparing also for introducing new products and releasing new products, we are also in parallel working on creating the market opportunities to participate in B2C, especially in Latin America, and parallelly, we are also looking at those different countries, and we are also initiating negotiations in Europe and the U.S., so we will definitely continue to focus in export markets. Of course, India is not to be left out. India market, as I mentioned in my last time call as well, we missed the opportunity, and we are bringing back the focus with our wide range of 14 technicals, active ingredients, what we manufacture, provides us enough opportunity to scale up the branded volumes of these captive technicals, which we are growing systematically.
We have also come up with new combinations and the new formulations, and we'll give an aggressive push to the domestic formulation business, which may not require capsules, but more in terms of brand building and product management approach. So we are updating our organization structure to suit the diverse needs. Our aim would be to grow all the three segments. And whatever the residual capacity is there to optimize the operations at our plant, we will focus on B2B domestic as well.
Okay. Great, sir. Thank you a lot for the elaborate answer. Thank you and all the best.
Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead.
Congratulations and thank you very much for the call. So if you look at the volume growth for the industry in exports, numbers range 30%, 40%, 50%.
In terms of the volume growth expectation in exports next year on this base, what is a realistic assessment of volume growth possible for the industry in your company?
You will want to take that?
As Sankar mentioned, the outlook is quite positive. Having said that, from a value perspective, many of the prices for many of the actives, because we still largely do business in actives, the prices, while they have stabilized, they are at a fairly low level. So therefore, volume becomes an important play to keep the overall sales at an even keel. So having said that, that is the reason why we thought we should foray into the formulation segment, where not only we capture a good decent amount of top line, but also the margin.
So in that regard, the thrust that the management is taking, again, as Sankar mentioned, we are putting more money into registration. So when there is so much of competition on generic actives, the only way to make money would be to enhance our presence in the formulations market, both in India and abroad. So when you say volume, our growth expectation is buoyant in both actives as well as formulations. But as a company that is making a more recent foray into formulations, its outlook for formulation growth is on the higher side in exports, specifically that you asked. Does that answer?
Okay. That's fair enough.
There is a shift. So the thrust is more on formulation.
Okay. And in terms of the nutrient business, based on the October NBS rate, is there any under-recovery in the fourth quarter?
How do you see that being reset in the April subsidy? What is the indication you're getting from the government?
There are some uptick in raw material prices like sulfuric acid. And definitely, DAP margin-wise, it is not good enough for us to produce and sell. So we have been representing to the government. And these additional plant rates will cover the cost. And also certain NPK grades like 10:26, there have been challenges because of very low subsidy on potash. That industry, we have been representing to the government to make those corrections and also consider additional costs. We are still to get some figures on what would be the final number, which will come through by March. So if you ask me for the fourth quarter at this point of time, in certain products, it looks okay. In certain products, there is a plus four in margin.
And we'll be continuously engaging with government and hope to see some corrections happening in the early subsidy quarter.
Okay. One last thought on the minority interest accounted in the consolidated result. I presume it's mostly based on your Dare Ventures and your drone subsidiaries. So when do you think the drone and Dare Ventures subsidiary impact on your consolidated numbers turn positive?
Jayashree, you want to take that?
Yeah. You're right, Ramesh. Most of our subs, which are less than 50%, are getting counted as a minority interest. As far as the subsidiaries are concerned, the larger entity that is into operations is the drone subsidiary. Here, as you know, we had received the orders from the emergency procurement team on defense, and the order book is about 250-odd crores. That shells are rating the PDI so that the shipment of these drones can be made.
Pending that, we are just focusing on the agri drones business at this point in time, also training of pilots. So we expect in the coming year quite a positive traction in the drone company operation. Bear Ventures is nothing but an entity which looks into investing in new ag-tech startup companies. For instance, we had invested in a company called Ecozen, which is into solar power-related, and then X-Machines, which is into small agri-robotic applications. So Bear Ventures is just a small investment arm, but there are other entities which are subsidiaries globally, which hold primarily registration for exports in the CPC segment. So the main one is the drones company, which we believe with traction building up on agri, as well as some turnaround on defense, should do well in the coming year.
Thank you very much and wish you all the best.
Thank you.
Thank you.
The next question is from the line of Rohit G. from Quest Investment . Please go ahead.
Hi, Sankar, and team, congratulations on good set of numbers. Sankar, if you can give a little more color say when we are talking of, say, reaching SSP 1 million ton, so what kind of a blend will be to say one of that mixture of SSP and urea? And if you can also say how the profitability part, how is it with this mixture will be having a higher than the SSP or sitting somewhere in what kind of a range?
Yeah, the value-added products with urea SSP and GroPlus, out of 1 million ton, when we reach, at least I expect 60% to come from these two products, GroPlus and urea SSP. And balance 20-25% will come from normal branded SSP with zinc, and balance can be powder SSP.
So blended margin with this sort of a combination should go to INR 2,500 per ton when we reach this ratio of 60-40. Currently, base SSP, this powder SSP and branded SSP is in the range of INR 1,500-INR 1,800. And the other products are in the range of INR 2,000-INR 2,500. So blend with the increased volume of this GroPlus and Urea SSP should take the margin up for SSP companies.
How much? Sorry, can you repeat?
Sorry?
This blended margin, how much you said? Sorry, I missed it.
For INR 2,500, it can definitely take the blended margin.
Okay. And second thing, if you can give a little more color on our nutrient business, what is the size and how do we see with this expansion in geography also? Which business? I'm not sure. Special nutrients, special SNG.
Oh, specialty nutrients.
Specialty nutrients, we operate pan-India business, and especially in Maharashtra, Western Maharashtra, Rajasthan, Uttar Pradesh, Punjab, Haryana, these are all the key markets for the specialty nutrients, and in SNG, we have increased our capacity also. We have put up a new plant, so that volume also will kick in, and in the Indian market, we also sell through our own retail outlets. We have seen 30%-40% volume growth in specialty nutrients in the retail centers, especially in AP, Telangana. We also sell in other common markets through public channels, whether it is Karnataka, Andhra, Telangana, or other parts of India, so we have a combination of retail network, exclusive markets, predominantly horticulture crops and distribution side, and also we sell through common markets, and we looked at introducing new products there. We have introduced seaweed granules this year.
Right now, we are doing it with a third-party product. If the volume scales up, then we may put up a plan to make our own seaweed granules. And we are also scaling up volume on organic potash, which is glycerin-based molecules from where we extract potash. That volume also is seeing good traction. So if I had to look at specialty fertilizers, I will put it as water-soluble. Then we have this PDM, then we have sulfur, then we have micronutrients and other crop-specific grades. All these segments are receiving good traction, and the focus will be to scale up the volume and create capacity. In fact, we are reaching the size and scale. We are seriously looking at manufacturing some of the raw materials to reduce our dependence on imports from China. That provides opportunity because global players of specialty nutrients are also looking for India sourcing.
They are trying to shift the manufacturing source from China to India. If that happens, that provides additional opportunity for companies like Coromandel to come up with these raw materials because water-soluble fertilizers used in NPK SOP and KNO3, potassium nitrate, these are the products. So we are also seriously evaluating a part of our growth strategy to create a back-end value chain for specialty nutrients and also be a global supplier for those grades. I strongly believe water-soluble fertilizers, high-end specialties, organic and bio will be the next phase of growth, and we are currently positioning ourselves for that.
So currently, what is the size and profitability? Is that fair understanding? Earlier, you were talking of around 20% kind of EBITDA margin, so.
Absolutely. It has a potential to generate EBITDA margin of 20%-25%.
And what is current size? Currently. And currently, what is the size?
It will be in the range of 500-600,000 annualized basis. Our aim would be to see how do we double it in the next few years.
Okay. Thank you. And all the best.
Thank you. The next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Thank you for the opportunity, sir. My first question was on the line of sulfuric acid due to backward integration. Can you tell me how much did we save instead of, say, importing the same in this quarter as well as quarter two? And second question is, how has the price of sulfuric acid panned out in, let's say, last four to five months? I mean, if you could quantify in January, how much it has increased as compared to maybe September or October level?
It used to be in the $80-$85 range.
That has moved up to $100, and we do have a combination of annual contract and the spot contract, so if you can say that average around $90-$100 has been the sulfuric acid price at the import. On the value addition, what we get in terms of manufacturing sulfuric acid, we have two benefits: cost of production versus imported sulfuric acid, as well as the power savings. I may not have an exact number for the quarter, but I can say roughly 180 crores is the nine-month benefit we have realized on a total sulfuric acid value addition.
Oh, that is your Vizag and Northland together, right? I mean, Vizag. Vizag.
We have got sulfuric acid capacity same as in Vizag.
Okay. Okay. Got it. Got it, sir. Yeah, that's awesome.
Thank you. The next question is from the line of Vishesh Dhoka from Nuvama. Please go ahead.
So your voice is not audible properly. So I just request you to rejoin the queue again, please. The next question is from the line of Vidhi Shah from Antique Stock Broking. Please go ahead.
Hello. Hello. Am I audible?
Yes, sir.
Yeah. Yeah. Please go ahead.
I just want to ask some questions in terms of the unique grade share to the total for the volume this quarter. If you could share that. This quarter is around 34%.
34%. Yeah.
Thank you.
Thanks.
That's all for the questions, sir. Yeah. That's all from my side.
Thank you. And that was the last question for today. I now hand the conference over to the management for closing comments. Over to you.
Thank you very much. We will continue to do our best to improve our performance in the coming quarter. Thank you for your attention. Thank you. Thank you.
Thank you. Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.