Ladies and gentlemen, good day and welcome to Coromandel International Limited, Q4 FY 2025 earnings call hosted by Nirmal Bang Institutional Equities Private Limited. 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, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. S. Ramesh. Thank you, and over to you, sir.
Good afternoon, ladies and gentlemen. On behalf of Nirmal Bang Equities, I'm very pleased to be meeting all of you for the Q4 FY 2025 earnings call with the management of Coromandel International. The company is represented by Mr. Sankarasubramanian, MD and CEO; Dr. Raghuram Devarakonda, Executive Director, CPC Bio and Retail; Ms. Jayashree Satagopan , President Corporate; and the new CFO, Mr. Deepak Natarajan. Let me hand over the call to Sankar for his opening remarks. Over to you, sir.
Good afternoon, everyone, and thanks, Ramesh, for organizing this call. Let me give a brief on the business environment experience during the year, and then we'll talk about the company's performance, followed by a Q&A session. India experienced the positive agriculture environment during 2024,2025, aided by above-normal monsoons and higher reservoir levels leading to higher crop growing. As per the latest estimate for 2024,2025, the food grain production is estimated at 331 million tons, increased close to 5% over last year. As per the National Statistical Office, the gross value added in agriculture and allied activities for the financial year 2024,2025 is projected to grow by 4.6%, as against 2.7% last year, and this reflects a positive turnaround in the agri-sector.
With a good monsoon during Rabi, reservoir levels as of date are much more comfortable at 36% compared to 30% last year, with South, Central, and West regions well above last year's levels. Going forward, the weather forecasting agencies like Skymet and IMD have estimated normal to above-normal monsoon for the upcoming Kharif season. Our key operating markets are expected to receive good rains. IMD has also issued updated forecasts, providing a region-wide view in the last week of May. Summer sowings have started on a positive note, as on 18th April, the crop sowings stood at 7 acres compared to 6 acres last year. Coming to the policy front, the irrigation infrastructure has been making a lot of progress. The area under assured irrigation has increased from 45% in 2010- 55% in 2021, resulting in increased cropping intensity.
In its budget, Andhra Pradesh has committed an outlay of INR 18,000 crores for various irrigation projects, which include Polavaram, to be implemented in 2025,2026. Similarly, Telangana has also got the clearance for the integrated Sitarama lift irrigation project and multi-purpose project, which is expected to bring close to 800,000 acres under assured irrigation. Direct income schemes like PM-KISAN are gaining good traction. Andhra Pradesh government has recently announced the implementation of another suitable scheme, and this proposes a deposit of INR 20,000 annually, including the PM-KISAN scheme of INR 6,000 into farmers' accounts. As you all know, Telangana has also introduced the Rythu Bandhu scheme, and it intends to provide a cash transfer of INR 12,000 per acre annually. All these measures will help in increasing the disposable income for farmers.
The government has announced a new nutrient-based subsidy rate for 2025,2026, with an increase in fee rates by almost 42%, in line with the increase in global DAP prices and increase in other input raw material prices. The cabinet has also extended a one-time special package of INR 3,500 per metric tons on DAP, beyond the NBS subsidy rate for a period up to 30th September 2025, and also given additional compensation to make DAP imports viable. During the last year, most of the fertilizer raw material prices remained broadly stable, likely at a higher level. Recently, sulfur and sulfuric acid prices went up very high as a result of demand from China, Indonesia, and Morocco. The phosphoric acid price per kilo has been fixed at INR 11.53, reflecting an increase of $98 per ton over the previous quarter.
This is perfectly in line with the significant increase in DAP price witnessed during this period. During the year, the domestic phosphatic industry increased its production by 9% to 15 million tons. There has been a significant shift in the consumption mix, with NPK sales moving up by 28% to 14 million tons and replacing the DAP shortfall, especially in central and northern markets, despite the lower MRP of DAP. Looking at the whole year number, the share of NPK has moved up to 60% as compared to 15% in the last year. DAP supplies were impacted due to lower supplies from China and also MRP restrictions affecting the viability of imports for the domestic as well as imports of DAP.
During the year, the crop production industry experienced reasonably stable volumes, and going forward into 2025, the market is expected to be relatively positive, with stabilizing agrochemical prices, improved inventory situation, and favorable weather conditions in Europe, Asia, and Brazil. Some of our key molecules have received good interest from the market, and we do expect the situation to further improve in the coming period. Coming to the company's performance for the year, our manufacturing plants undertook capacity de-bottlenecking to deliver a higher silver volume of 33.3 lakh tons, with a high level of safety and environmental management. Our Ennore unit safely resumed the phosphoric acid and sulfuric acid plants after obtaining all necessary statutory clearances, and the company's phosphorus production including Ennore went up by 6% during the year.
The major backward integration projects for phosphorus and sulfuric acid plants at Kakinada are on track and are expected to be commissioned in the current financial year 2025,2026. We have also initiated work on the brownfield granulation train at Kakinada, which is expected to come on stream in the year 2026,2027. The company has obtained all requisite approvals from the Government of Senegal and has increased the shareholding in the mining company BMCC to 54%, and now BMCC has become a subsidiary of Coromandel. It has stabilized the production through setting up a fixed processing plant, and the throughput has significantly improved over the earlier quarters, resulting in the business achieving operational profitability in the last two quarters. Going forward, we do expect a consistent supply of rock phosphate from BMCC, which can meet one-third of our total rock requirements for Coromandel.
The company has also signed a long-term contract with Ma'aden, one of the world's largest producers of phosphatic fertilizers, for the long-term supply of DAP and NP and PK fertilizers. On the marketing side, Coromandel registered record sales of phosphatic fertilizers and record consumption in the year 2024,2025, increasing the volume by 13%. The share of unique grade stands at 35%. On a consumption basis, the market share for Coromandel has improved to 18% from 15% over the last year. As part of its market diversification approach, the company has pulled into north and central markets and has received good response, making Coromandel a pan-India player in fertilizers. On the SSP front, our sales volumes for the year were up by 18%, with major growth coming from differentiated variants like GrowPlus and UVSSP.
Coromandel's drone spraying services delivered through Gromor Drive initiative and retail centers achieved significant sales, covering close to 2.2 lakh acres, and is witnessing strong adoption by the farming community. Specialty business, mainly comprising water-soluble fertilizers, secondary micronutrients, and organic fertilizers, had a good year. The volumes have been consistently growing year after year. The business also introduced crop-specific and state-specific products to expand its portfolio. The business commissioned the sulfur plant to double its capacity, also evaluating creating water-soluble fertilizer capacity by leveraging its strength in phosphates. Nano DAP business continued its focus to promote awareness of the product. During the year, the company has marketed 26 lakh bottles, maintaining a market share of 33%, achieving close to 80% of liquidation. The business is also seriously evaluating the export opportunities of Nano DAP across various countries.
Coming to crop protection and bio business, the revenue from crop protection business was up by 7% to INR 2,637 crores, led by higher sales in formulation, which has grown by 16%, export grown by 5%, and bio grown by 9%. EBIT margins were up by 25% to INR 363 crores, as improved demand for its key molecules in domestic and export markets and performance of new products and captive molecules enhanced the profitability for the business. Share from sale of new products in formulations is at 21%, up from 15% last year. In bioproduct business, despite a slowdown in acid reacting export markets, the business achieved volume and sales growth. As part of its diversification strategy, it expanded into non-acid reacting plant extracts and launched VAM-based biofertilizers. The business has also built in-house fermentation microbial R&D capabilities and plants launched microbial crop protection products in 2025,2026.
During the year, Coromandel signed a definitive agreement to acquire controlling stake in NACL Industries. The proposed acquisition will position Coromandel as one of the leading players in the Indian crop protection sector, with a wide range of technicals and pan-India presence in domestic formulation business. This will help in expanding Coromandel's scale, accelerate its entry into contract manufacturing business, fast-tracking new product commercialization, and expanding its product portfolio. We expect the transaction process and regulatory approvals to come through by Q2 of this year. Coming to retail, during the year, the retail business of the company expanded its footprint by adding another 130 Mana Gromor centers in Andhra Pradesh, Telangana, and Karnataka, and also being ported into new markets like Maharashtra and Tamil Nadu. We are expanding our digital presence through Mana Gromor app and other social media platforms.
With 99% of the stores profitable, we are looking at expanding our presence in the coming years. With that, I will now hand over to Jayashree to take you through the company's financial performance. Over to you, Jayashree.
Thanks, Sankar, and good afternoon, everyone. Let me quickly take you through the company's financial performance. In terms of the turnover, the company recorded a consolidated total income of INR 5,114 crores during the quarter and INR 24,444 crores for the full year, vis-à-vis the corresponding period of INR 3,996 crores for the quarter and INR 22,290 crores for the full year. This registers a growth of 28% for the quarter and 10% for the full year. The increase in revenues has been mainly on account of growth in volumes registered across all our businesses. The breakup of subsidy and non-subsidy share of business stands at 79% and 21% during the last quarter. Previous year, the percentages were 78% and 22%, respectively. For the full year, it's 82% and 18%. For the corresponding period in the last year, it is 83% and 17%.
As far as the profitability is concerned, the consolidated EBIT of the quarter was INR 426 crores, against INR 273 crores during the last year. For the full year, it was INR 2,628 crores, against INR 2,399 crores during the last year. The increase in EBITDA is mainly due to volume growth across the businesses and margin expansion in our CPC business. Subsidy/non-subsidy share stands at 67% and 33% during the quarter. During the previous year, it was 53% and 47%. For the full year, the breakup is 70% and 30%. Corresponding figures for the previous year are 72% and 28%. The board had approved a final dividend of INR 9 per share.
This includes normal final dividend of INR 6 per share and a one-time special dividend of INR 3 per share. On subsidy during the quarter, the company received INR 2,190 crores towards subsidy claims. Comparative figures in the last year were INR 2,165 crores.
For the full year, subsidy received is INR 8,082 crores. Previous year, it was INR 9,198 crores. The government has been prompt in clearing the subsidy dues. As of today, we have received our subsidy claims till the third week of March. Subsidy outstanding as of 31st March 2025 was at INR 1,654 crores. During the previous year, it was INR 1,377 crores. As far as forex is concerned, you would have seen that the rupee had been very volatile during the quarter. It traded in a broad range of 85.39-87.71. Coromandel continued to follow a conservative approach and has hedged most of its exposures. I have with me Deepak Natarajan , who has recently joined us as CFO in Coromandel, and let me hand over the call to him for a brief introduction. Thank you all for your interest in Coromandel and joining us for the call today.
Deepak, over to you.
Thank you, Jayashree. Good afternoon, everyone. Pleasure connecting with you all. Myself, Deepak Natarajan, come here with about 25 years of work experience. Last five years, I used to work for Tata Projects Limited, and then prior to that with GE for 10 years and Cisco for six years. That is my brief background. Look forward to connecting with you going forward in the subsequent quarters in more detail. Thank you.
With that, we can open the session for questions, and we look forward to the interactions.
Before that, I would now like to hand the conference over to Mr. S. Ramesh. Thank you, and over to you, sir.
Hello. Let me, on behalf of Nirmal Bang and myself, first thank Jayashree for being very receptive to the investor questions and increase the level of disclosures in the company. Let me also take this opportunity to welcome Deepak Natarajan. Welcome, Deepak. Pleasure to have you on the call, and look forward to continuing our discussion. Let me now hand over the call back to the company, and later you can announce the Q&A.
Thank you so much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prashant Biyani from Elara Capital. Please go ahead.
Yeah, thank you for the opportunity, and congrats on a good set of numbers. On the NACL, how do we plan to turn N ACL, and by when can we see NACL aligning with our crop protection division margins?
See, right now we are waiting for the regulatory approval, which may take another two, three months, and post which we should take stock of what are the opportunities available. As we mentioned earlier, we need to put the process back in procurement, which will improve the EBITDA margin by significantly working on the procurement efficiencies. The funding is coming through for them so that they will be able to increase their level of production and operation. Some of the molecules what they're dealing with also seeing some price traction in the marketplace. Our aim would be to continue what they've been doing well and try and see how do we restore the margins what they've been making two years before because we look at introducing new molecules and the new products. They do have spare capacity, which can be leveraged.
They have R&D setup, which can again be synergized. There are quite a few molecules which are completely complementary to what we have, which will be able to tap the export market as well.
Sure. Sir, we also had a plan of investing INR 1,000 crore in crop protection spectrum CDMO. Now, post this acquisition, do we see that INR 1,000 crore CapEx being trimmed, and if yes, by how much?
No, I won't say it will be trimmed. It will be moderated because the active ingredient capacity creation can be slowed down since we have spare capacities which can be leveraged. That helps us in two ways: reduce our cash overload at the same time to go to market faster because the time it takes to set up the facility can be shortened considerably. We may have to do the retrofitting of existing facilities. In terms of other investments on CDMO and specialty chemicals, there are new business opportunities which may be, depending on the new molecules, chemistries, what we are signing up, may require that investment. That may we are evaluating the products in which we need to get in specialty chemicals, and we are also on discussion with various players on CDMO opportunities.
That investment will be more linked to the calendar of new products signed up with the parties rather than NACL being the reason. It is a slight deferment in the investment plan, but we are on the track.
Right. Sir, regarding our agreement with Ma'aden, annually, how much fertilizer do we plan to import with them and in total?
Right now, the contract is for INR 300,000, and we can potentially go up to INR 500,000. Our aim would be to see how much we can enhance our DAP imports from Ma'aden for the long period so that that will help us to maximize our NPK production in our existing facility.
Is it INR 300,000 per annum?
Yes.
Okay. Sir, before I join the queue, last question. How is our CapEx plan going on, and how much do we plan to invest this year on various projects?
The project what we announced last year for fertilizer sulfuric acid is progressing well. 45% of the project has been completed both on PA-SA, and we are on track to commission this during the last quarter of the current financial year. As part of granulation train, we have commenced the project in January, and that will take 18-20 months to complete. That will come on stream by 2026,2027. Besides that, in the next year, we'll be looking to expand our capacities on active ingredients at Dahej for CPC, and we are also looking to de-bottleneck some of our facilities both in Karnataka and Visakhapatnam to increase the fertilizer volumes. Other normal sustainable CapEx, we are looking at. Whatever the annual sustainable CapEx requirements, that will continue. We will also look at any inorganic opportunities.
As soon as an opportunity arises complementary to our product portfolio, we may look at it.
Right. I shall join back with you. Thank you so much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Rahul Jain from Clearwater Partners. Please go ahead.
Yeah, thank you so much, and congratulations on a good set of numbers. I just had a follow-up on NSCL. As already told by you, the approvals will come in Q2, and only after that you will decide. If I take a 10,000-foot view, say three years from now, where do you actually see NSCL? Before acquisition, you must have set some targets. Where do you see NSCL, say three years from now?
NSCL is to get back in terms of the capacity utilization. They have invested in Dahej facility, which is not operational fully. Our aim would be to see how we can get those new molecules in place and operate those new ingredients and bring the capacities of the AI at full level. The second segment is the formulation, domestic formulation. They have strong brands, and we should try and see how best we can grow the formulation business and change the.
At full capacity, sir, what could be the potential top line that this company could generate based on current pricing scenario?
Too early to comment on it, and they should at least minimum go back to the numbers what they have achieved two years before without considering any new add-ons.
Okay. I have one more follow-up on this acquisition itself. Coromandel today has some INR 2,500 crore, close to INR 2,600 crore of crop protection business. NSCL as it is does some INR 1,450-odd crore. The ballpark calculation, if I do, then at full potential, they could do some INR 2,500-odd crore of top line. Is there any plan of creating a separate entity where the crop protection division of Coromandel and NSCL merge, and that becomes your crop protection entity, and Coromandel becomes a pure-play fertilizer entity? Any thoughts on these?
No, there is no such plan at this point of time. Currently, we are trying to run NACL assets, and we will achieve the target what we set out also for the time of acquisition. Coromandel SBU CPC crop protection business has its own set of product pipeline and strategic plans to expand capacities. Both will leverage the synergies, but we will continue to operate this way. We will have to see at appropriate time what are the best for the investors, and we will do that.
Okay. Thank you so much.
Thank you. The next question is from the line of Ankur from Axis. Please go ahead.
Yeah, hi sir. Thanks for the opportunity. First question on the crop production side. One, if you can highlight what has been the volumetric growth for the full financial year. Just to follow up on that, what could be the growth outlook here given the price inflation trend that we have seen historically and hopefully settled now? Your outlook on the margin side?
See, we operate on different segments. It's very difficult to put one number to the volume part of it because, A, we measure in volume. In the case of domestic formulation, we track in rupees per hour. Putting a number in terms of the volume may not be meaningful. I would suggest we should look at high-end double-digit growth for the next year across these three segments: domestic formulation, domestic B2B, and export market. Outlook is quite positive. Basing on the success we had on new product introduction the current year, we have a pipeline of products coming in next year as well, which will continue to take our share of new products in the overall portfolio and will improve margins.
All I can say is our turnover for the next year, our revenue can be on the high double-digit side, supported by healthy profitability margins with a changing portfolio towards high-margin products.
Sure, sir. Okay, fair enough. Just secondly, on the fertilizer side, given the new capacity coming in probably by FY 2027, what is the timeline that we are looking at for a full ramp-up over here given the capacity expansion as well as the backward integration? Again, your earlier guidance of 48% jump in EBITDA margin on the fertilizer side, what timeline can we think of over there?
In the case of intermediate capacities, phosphoric acid, sulfuric acid, which will get commissioned in the Q4 of the current year, we can expect the full play to come in in the next year, 2026,2027, because we'll be separating our production in the Q4 of the current year, which means next year will be the full year of operation where we will always achieve the rated capacity. That has been our track record. Our aim would be to do that as well for phosphoric acid and sulfuric acid plant. In the case of granulation plant, the plant will get commissioned in third or Q4 of 2026,2027. From marketing side, we have taken already steps to create seed marketing in the northern markets to absorb the additional volumes. We are expanding our retail footprint across various states.
There will not be any challenge in absorbing the additional volume. Our aim would be to do it in the first full year of operation, the full expanded capacity. As India being a net import of fertilizer and we being a strong player in phosphatic segments, we do not feel any challenge in operating plant at the full capacity in the first full year of operation.
Great, sir. That's helpful. Thank you for the detailed answers. Congratulations, Mr. Deepak, for joining in. Thanks, Jayashree, for your support over the years. Thank you.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla. Please go ahead.
Hi. Thanks for the opportunity and congrats on a good setup number. First one on the Nano DAP, sir, just wanted to check how the traction there. Are we experiencing repeat buying here? If things go as we have expected from this product, can this travel to the world? Can this product travel? If we succeed, what do you think how big can this product be for us in the next three, four years?
No, thank you. Thank you for the good questions. I'm pretty confident that this product definitely will scale up in the coming years. We've been very, very systematic in our market approach, and we are not pushing the product. We are generating a pull. We are working with various ICAR institutes across the country and going through the detailed evaluation on various crops. Based on the response, we are very confident that partially this can replace DAP. Every acre, as I mentioned earlier, instead of two bags, one bag can be cut out, and Nano DAP, one-liter bottle can be used. We find that the response to the crop has been pretty good in the crops with high foliage. During this year, we sold 2.6 million bottles, and we have seen 80%-90% of liquidation, which is very creditable.
We are very confident going into next year, we'll be able to improve the volumes. Thanks to our retail stores, we're able to communicate with the farming community, explaining the importance of providing the eco-friendly phosphatic fertilizers. It is going to be a game changer for the industry as a whole. If everything happens in the way we expect, we do expect replacement of 2 million tons of DAP in another two to three years' time. This has been our initial estimate as well. We also find that there is a positive response from various countries for this product, and we have taken Government of India approval to export this as well. We have capability to increase the capacity in a modular way, and we should be able to ramp up the volume with a quick leap.
I'm personally confident that this can be one of the significant business units for Coromandel in the coming year.
Interesting. Second, on the retail side of business, we have indicated we have added 100 more stores, and we have indicated to almost, I think, double it in the next two, three years. If you can help us understand in terms of overall economics, how much CapEx and working capital required, but so, what is the current financial status of all 900 put together, and how it should look like in the next two, three years?
The retail has been a pretty good growth story for us. In fact, more than 90%-95% of the retail stores, 8 and 10, 20+ are in profit zone now. We have added another 130. Based on our learning, now we are able to get the break-even point in a shorter time frame of six months. As we understand the portfolio, as we understand the customer preferences on the weight spaces, we could reach the break-even point much faster. We also understand how to reach the customers, how to introduce new products. I think retail overall has become very profitable, and it's a multi-label store. It doesn't depend on our own product. Here again, we educate the farmers on what is the right set of products to operate to increase their productivity.
We provide services, and we have seen the drone spraying has also been received very well for the farming community. Wherever we do drone spraying, there is a spike in crop production uptake. We are pretty sure that retail is the way to go forward. In terms of investment, as of now, we are only on a rental basis. We do not own the stores. Working capital also, considering the pool it generates, I think we are able to leverage better on the sourcing part. Currently, we are running the business on a negative working capital. There may be initial challenge in absorbing the fixed cost as we ramp up the stores, but I am sure for the next two to three years, we are very confident that we should be able to increase the footprint to three times the numbers we have.
This is the way to go forward, and we'll put all our efforts and leverage on the digital analytics part to ensure we get this right from day one onwards.
Thank you, sir. I'll come back in the queue, and all the best.
Thank you. The next question is from the line of Viraj from SIMPL. Please go ahead.
Hi, Sankar. Thanks for the opportunity. Just a couple of questions. First, on the NSCL part, just wanted to get your thoughts on what attracted you towards the company, other than the fact that it's underutilized in terms of capacity utilization, but broadly in terms of the portfolio mix of the business per se. What is what attracted you the most? Just an extension of that is, if I were to look at our experience in terms of Sabero acquisition, and our own journey into the crop protection over the last 8 to 10 years, what are the similarities or differences in the business or acquisition you see between NSCL and the other two?
See, NSCL is again more or less similar to our business model. Focuses mainly on genetic space. The important aspect is they have been the supplier of choice for the major MNCs for many years. In fact, what we call it as a modern-time CDMO, most of those manufacturing cabinetry is set up by NSCL much earlier. It extends their plant facilities, and the processes have been set up in such a way to produce high-quality products. That is something which is very critical and useful for a business like A manufacturing. Besides that, they have a good set of enabled accredited R&D facilities, and they have been working on complementary set of chemistries to what we are working on, including the latest fluorination chemistry, which will be helpful as we go into future molecules which are based on fluorination chemistry.
They have spare capacity, and they have also built very strong brands in the Indian market. India is a large market for domestic formulation business, and they have built brands of larger size, and they operate in key markets which are again complementary to our markets. We see a lot of cross-learning between both the entities, which will help to grow the business overall. Comparing this to Sabero, Sabero is more of an AI play in the export market, whereas Nagarjuna has got all the three segments: domestic B2B, export, and sort of a CDMO type of operations. I think these two are completely different. Only challenge would be being in a generic space. Margin sector may not be as high as what we tend to expect with the new chemistries. That is a change we can bring about. I hope I answered that.
Yeah. That's very helpful. Thank you. Just two questions. One is on the NSCL. If you look at the 10-year history, the operating margins have been around 8%-9%, and this is despite a very sizable domestic B2C business. If I look at other vendors with AI, even they are on upwards of pretty low-paying margins. Just trying to understand where is the gap in terms of the margin profile in that business. Second question is for, say, specialty nutrients and the retail part of Coromandel. You have been kind of leaders in specialty nutrient.
Sorry to interrupt. Could you move a bit away from your phone? You're very static.
Sure. Is it better now?
A bit more, please.
Yeah. Just Sam, audible?
Yes, yes, you are. You can press.
Yeah. Second part of the question is more on the scalability and profitability, especially for the retail business and specialty nutrient. If you can just give some color and the part to the aspiration we would have in those two segments.
Yeah. I'll take the second question first. Specialty is a highly profitable business, but involves a lot of consistent selling. The volume scale-up will be steady and slow. We have been working on it for the period, and various products in the product portfolio are developed in-house based on our R&D. There, EBITDA margin is also quite healthy, between 18%-20%, and we have been growing consistently the top line in the last few years at 15%-20%. We are sure we'll continue to grow that, and that is also a focus area for us. There also, the subsidy gambit, and it's the way to go forward in terms of improving introducing the more nutrient-efficient products to the farming community. SND will be focusing on creating some backward integration on the key raw materials which are currently imported.
We are looking to capture the value chain in SND and sustain the volume growth. Many of the key raw materials are currently being imported from China. We are looking to create capacities to ensure that we have a steady supply chain, as well as we can increase the margin for this business. On the retail, as I mentioned, we are doing well. We will continue to do well. It has not been exploited fully, according to us. We have created the funnel through which many products can come in. As the base is used like CPC and specialty nutrients and bio business start introducing new products, our aim would be to introduce those products through retail, which are high margin, which will also help in retail to break even much faster.
It is profitable now, and I'm sure with the increase of the centers, increased revenue, profit margin should grow for retail as well. Coming to your first question in terms of the NSCL margin, it operates in the genetic space. The way the AA prices have behaved in the last few years, there has been significant contraction in the AA margin. That is actually impacting the overall margin portfolio, even though the formulation bit commands higher margin. Weighted average pool margin is much lesser due to supplier AA prices. We do expect in the coming years, the active ingredient prices should improve, which in turn can improve the margin sector for NSCL. NSCL used to make margins in the range of 10%-11% in the past, which came down to 4%-5%.
Our aim would be to first restore the margin back to 10%-11%, get the capacities back on track, and try and see how do we build this margin by adding new products in the portfolio. That will be our approach.
Sure. I'll come back in queue. Thank you very much.
Thank you. The next question is from the line of Naushad Chaudhary from Aditya Birla. Please go ahead.
Thanks for the opportunity again. Two clarifications, sir. First, on the jump in the sulfuric acid prices, do you think the real impact has not yet come? Because recently, also, it has jumped substantially. The subsequent quarter should see a major benefit of that, or what's your sense on this thing, sir?
Yes. Sulfur prices are really short-term, then as played out in the Q4. In fact, you can see some slight compression in the margin. You also realize that phosphoric acid prices have gone up to that extent. The value addition on phosphoric acid remains the same. To the extent of sulfur prices, the phosphoric acid price has gone up. Now, the end product prices on NPK fertilizers will get corrected as we move forward, besides DAP, to absorb this price increase. Having said that, there are also other soft spots like ammonia where the prices, if you are prevailing, $400 have come down to $330. These plus and minuses do happen. Overall, I think with the announced subsidy rate, the business is reasonably confident of achieving the margins what it set out every year.
Okay. On the manufactured volume growth, this year, I think we have optimally used the capacity which we have. For next year, do we think we will have capacity constraint on the manufacturing side of volume growth for FY 2026? Twenty-seven, we are coming up with Kakinada. For 2026, do you think the trading portion would be higher because of the capacity constraint?
The two things we need to note: one is we are deburdening our Kakinada plant, and that benefit has to flow in for the full year next year. We also keep tweaking the product mix to increase the throughput. The throughput, depending on the NPK, what we produce, that can also aid us in increasing the volume. The Ennore granulation facility is still not back on track. We are working with various regulators to see how best we can come back on track on the Ennore granulation facility. The deburdening of Kakinada, Ennore coming back on track, and the product mix, and the imported NP/NPKs to do the seed marketing and not should provide the required impetus on the volumes so that when the new capacity comes in, we are able to sell the volume in the first year.
All right. Thank you so much.
Thank you. The next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Hi. Sure. Yeah. There are a few donors. Donors, I wanted to know for the quarter four, firstly, on the phosphatic prices, if you could share.
Sir, if you could be a bit clear.
Hello. Am I audible now? Hello.
Could you move out a bit far from your phone? You're very loud.
Now? Hello.
Could you speak out a few sentences if you got?
Hello. Yeah. What I was asking is, basically, I wanted to know prices of a few chemicals. That is, what is the price that was there for phosphoric acid in quarter four, firstly? Secondly, wanted to know how has the price for sulfur panned out from quarter three to quarter four versus sulfuric acid from quarter three to quarter four, if you could give us the data per ton this?
PA price, as I mentioned earlier, it has moved up from $1,055 to $1,153, $98. Sulfur moved up by almost $120. What it used to be $180 moved up to $300+ . Sulfuric acid, it used to be $70, $80, moved up to $100 and $105. These are the spikes which have happened from Q3 to Q4.
Okay. So, I mean, how do we see it? I mean, our internal estimate on is there a lag between the sulfur and sulfuric acid price? And we might see some more increase that is possible on sulfuric acid side of it, I mean, going ahead with the season having more requirement towards fertilizer, etc.
Look, sulfur, I think, has reached the peak. Our view would be sulfur should moderate from here based on some spot in demand from Indonesia for a different industry sector, not for fertilizers, and also China imports. I think sulfur as a global commodity is a surplus that needs to come down. We do expect sulfur to soften in the coming months. Sulfuric acid is, again, a function of demand supply, and I do expect to remain static here and soften from here. Globally, commodity prices are not going up, whether it is corn, soya, and which can dampen the global fertilizer input prices as well as the affordability index is going up, coming down for the farmers. I do expect the commodity prices to soften in the coming quarters.
Thank you. The next question is from the line of Somaiah V from Avendus Spark Institutional Equities . Please go ahead.
Thank you, sir. The first question is on fertilizer margin in Q4. You did mention there is a slight compression there. Is it entirely attributed to sulfur, or is there anything that changed on a quarter-on-quarter basis? For instance, was there any inventory impact that had a bit of an impact on margins?
Of course, sulfur plays the trade role, but other than that, there's no inventory impact. Rather, we have improved on the channel inventory with improved liquidation. The Q4 is always a soft quarter with annual turnaround happening, and many of the intermediate plants will take annual shutdown. To the extent, the valuation will be relatively less. It is in line with the past trend, and I think this will happen in the Q4 .
Got it, sir. Sir, also, earlier, we used to give our manufactured EBITDA per ton guidance. We used to have this INR 5,000 per ton. Does that still hold good in current context where we are in terms of subsidy allocation for carriers and where raw material prices are?
Yes. We should be able to sustain that margin.
Got it, sir. Also on crop protection, quite a strong growth this time. We used to be roughly around 50%-50% in terms of exports and domestic. Is the mix currently similar, or has it changed? That is one. Second, if you could just help us in terms of I think earlier you did mention in terms of what are the factors that drove as a subsegment within crop protection, if you can just give some more color on it.
Raghuram, do you want to take that?
Am I audible?
Yes. Yes, sir.
Okay. Great.
Yes.
As Shankar mentioned, part of the growth has come because of the introduction of new products in the B2C segment, and there is an uptick in mancozeb demand in Latin America. Primarily, these two have contributed to the growth between exports and domestic B2C.
Sir, exports, what would have been the growth, and domestic B2C, what would have been the growth? Mancozeb , are we seeing any price realization improvement?
Yeah. We have seen marginal improvement in because, see, the other fungicides are not picking up in terms of their costs or prices, you see. Mancozeb cannot indefinitely increase in price because then there will be a shift between the molecules. While we have seen an uptick, it's not like something extraordinary. The volume growth has been pretty good year on year as far as manpower is concerned in the exports market. Specific statistics, I think somebody had already asked about volume growth. Maybe I'll address your question and the other question together. The volume growth for exports has been close to 9%. In terms of B2C, it's in excess of 24%. Volume growth. I hope it answers your question.
Sure, sir. It does. Also, what would be the value growth in exports and B2C?
Anuj, would you have that number ready, handy? As I said, the prices have also moved out somewhat, you will see a pretty decent growth in exports. As far as domestic market prices are concerned, it has been either flat or it has gone down in some cases. Maybe give me some time. I will try to dig it out. I do not have it in front of me. No, Raghuram, I have this data in terms of the formulation business. They are looking for 16% grow the on a rupees crore basis
As you can tell, while there is a volume growth, there's a bit of price erosion resulting in overall value growth of 16% when the volume growth has been 24% plus in the domestic market.
Yes. Okay. Sure, sir. Thank you. That's helpful.
Thank you. The next question is from the line of Himanshu Binani from Anand Rathi. Please go ahead.
Hi, sir. Thank you for taking my question. Sir, I just missed the last participant's question in terms of the EBITDA per ton guidance. We are sticking to that INR 2,500-INR 5,000 sort of number for FY 2026, right?
Yes. Very much.
Got it. Sir, secondly, if you can help me with this, unique grade share to the overall manufactured volume for Q4 as well as for FY 2025?
25%. 35%. Sorry.
Sorry? 25%?
55. 35%.
25% for Q4?
No. 35% for the full year basis. 35% for full year. Hello. You will hear me.
Sorry, sir. I didn't get 55% for full year FY 2025, you mean to say?
Correct. Correct.
Sir, that seems to be too high, basically. What I understand is that FY 2024, we will come around a 36%-38% sort of number. This has increased to 55%, you mean to say?
No. No. I said 35.
35?
Yes.
Okay. Okay. Got it. Got it. Sir, one last question, basically, on the retail side of the business. Can you help us understand the metrics in terms of the revenue cost for setting per store and the absolute break-even number at what revenues we break even? Any color on that would you like to share?
I would prefer to take it off. I don't want to put it at this point of time. What I can say is we do break even if we can sell 2,000 tons of fertilizers and a crore of non-fertilizer, which would be able to cover the expenses and start making a profit. That is happening within six months. That is what we said. Initially, it used to take two years. We reduced it to a year. Now we are able to do it in six months, basically because we are able to identify the right location for the store. The product assessments have improved significantly.
Can we move ahead?
Yes.
Sure, sir. Thank you. The next question is from the line of Ranjith from IIFL Capital Services. Please go ahead.
Yes, sir. Thanks for this opportunity. A couple of questions from my side, especially if you can elaborate on the new hirings that we have done. We both seem to be new rolled on together, Vice President Manufacturing and Vice President Strategic Initiatives. What would be the KRAs for these two appointees?
Ranjith is not able to hear you clearly. Can you please repeat?
Yes, sir. Ranjith, I would like to ask you to move a bit away from your phone so that we can hear you. I hope this should be good. Yeah. You can go ahead. Yeah. Thank you for the opportunity. I just wanted a bit more insight from the two new hirings that we have made. One is VP Nano Fertilizers and the VP Strategic Initiatives. What would be the KRAs for these two new hirings?
See, in the case of VP Nano, as the name suggests, he will be a business head for the Nano fertilizers, both in domestic and export markets, besides focusing on exports for specialty fertilizers. He has a rich experience in crop protection space and having worked in the Latin American market, we have hired him back in Coromandel for driving the Nano business initiative in Coromandel. In respect of VP Strategic Finance, as the company, we are looking for opportunities. We have created an M&A cell. Basically, to provide financial insight or the business evaluation of the new targets for the exporting, we have taken this person on board. He is experienced in business valuations and the technical metrics to evaluate the target for the company before looking at the new inorganic opportunities for growth.
Sure. Thank you. That's helpful. Second question, coming back to the fertilizer guidance, back in December 2024, we had guided for a 40% jump in EBITDA per metric ton for our fertilizer business in two- to three-year time frame. That still stays intact, right?
Yes. When the plant gets commissioned, the valuation of the plant closing should see that sort of an improvement. That is likely to happen in the Q4 when the PA/SA plant gets commissioned. Personally, the increase will play out on their own. After that, the improvement will happen once we get the new granulation plant in place.
Sure, sir. Thank you. That's all from my side.
Thank you. The next question is from the line of Vipul Shah from Sumangal Investment. Please go ahead.
Hi, sir. Thanks for the opportunity. My question relates to subsidy and non-subsidy profits. Where do you see non-subsidy profit reaching percentage-wise three years down the line, sir?
Currently, I think it's around 70/30, right, on the subsidy-non-subsidy share and the profitability. Fertilizer also is likely to grow with the expanded capacities, increasing intermediate capacities. We are focusing on CPC growth opportunities now. Ideally, we want to put the number 50/50, but not at the cost of slowing down on fertilizers. While we aim for that number, fertilizer is also growing good, and we are diversifying the portfolio. Our aim would be to write a right balance between the fertilizer-non-fertilizer business. It's very difficult for us to put the number at this point of time with the way the nutrient business is shaping up. We will invest and we will focus on non-fertilizers, especially CPC, in the coming years.
Okay, sir. Thank you.
Thank you. The next question is from the line of Rohit Nagraj from B & K Securities. Please go ahead.
Yeah. Thanks for the opportunity and congrats on your Q4 numbers. The first question in terms of the R&D capabilities for both Sumangal and NACL. How these are, whether there is any complementary set on this. In terms of incremental product development of panel, are we going to optimize the efforts given that now we are a same company and there could be some overlap which might be there? Just brief about that would be helpful. Thank you.
Absolutely. We will leverage the energy benefit between both entities. I'll leverage on their expertise. Of any chemistries they are good at, as I mentioned in my earlier opening remarks, they are good in fluorination chemistry. They have got certain capabilities. Coromandel has developed certain chemistries over a period of time. We'll try to optimize between both the companies and try to see how we consolidate and get a synergistic value out of the development efforts. It may even include getting some infrastructure synergies as well. We may consolidate the R&D facilities in a single location to leverage the size and scale and attract talents and pull up together the efforts in introducing the new products. Definitely, this will be leveraged.
In terms of the number of personnel in both the companies, how are they in terms of PhD, etc., and color on that?
You're talking about R&D personnel?
Yes. Yes. That's right.
I think we have close to 100 and they have close to 50-55. Roughly 160-170 numbers is what we are talking about on a combined thing. Only for CPC, but Coromandel has got some nutrients.
Right. The second question is I missed your earlier remark. Are there any targets in terms of synergy benefits that we have given out for the next two, three years? Just the way you explained from R&D perspective, we will be getting certain synergies. Any such financial targets that we are looking at?
Very early days. We have to wait for the regulatory approvals and get that production and sales on track first. We need to put our heads together and then put these numbers against each of these events: the procurement efficiency, or new product introduction, or the market synergies, or the R&D development. Probably six months down the line, we should be able to answer it more appropriately.
Yeah. Thanks for answering all of this. Thank you.
Thank you. The next question is from the line of Shilkumar Shah from Sameeksha Capital. Please go ahead.
Yeah. Hello. Am I audible?
Yes.
Yeah. If you can share manufacturing EBITDA pattern for FY 2024 and FY 2025. That's the first. Second, SSP EBITDA pattern for FY 2024 and FY 2025 and our trading margin EBITDA.
I will get back to you on the segment-wise EBITDA margins. I'll ask Anuj in a short lesson to communicate with you.
Mr. Shilkumar? Hello?
Yes.
Would you like to go ahead?
No. No. Thanks.
Okay. Thank you. The next question is from the line of Mr. S. Ramesh from Nirmal Bang Institutional Equities Private Limited. Please go ahead, sir.
Thank you. Before we close the call, I would like to have your thoughts on the very high debt in NACL and the high interest cost. What is the timeline you expect to reduce the debt burden and interest cost in NACL? If you look at the overall CPC business, you said there is some pricing pressure in the domestic markets. Assuming that the inventory-related pressure in the domestic markets is out of the way, when do you see the pricing power coming back in domestic formulations?
Yeah. Definitely. Formulation power. Overall, the approach to the formulation business will be synergized with the Coromandel way of doing business. That should bring in discipline in the market placement and the working capital needs. That should improve the profit margins and formulation. We do expect a disciplined approach to grow the formulation business. I think over a period of time, with the plants operating at full capacity, including the new Tech plant, we should see some improved cash flows and liquidity coming into the system. We should bring down the debt. The debts have been secured for the CapEx investments, and it may take a while to pay them back.
At this point, on a standalone basis, it's difficult to put the timeline, but our effort would be to see they have good control over the working capital, release the cash to pay off the debt, and bring down the interest burden.
Okay. With that, let me thank all the investors, handlers for joining the call. My sincere thanks and gratitude for the management for giving a good insight on the business and answering all the questions. Let me hand over the call back to Shankar for his closing remarks. Thank you very much, sir.
Thank you, Ramesh. Thank you, everyone, for your insightful questions. We will be more responsible in ensuring that we deliver on whatever we commit and looking forward to future interactions. Thank you very much.
Thank you. On behalf of Nirmal Bang Institutional Equities Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.
Thank you.