Ladies and gentlemen, good day and welcome to Coromandel International Limited's Q4 FY 2026 earnings conference call hosted by Elara Securities. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prashant Biyani from Elara Securities. Thank you. Over to you, Mr. Biyani.
Hi. Thank you all for joining the call today. We would request Mr. S. Sankarasubramanian to start the session with his opening remarks. Then we'll follow it up with Q&A. Over to you, sir.
Good afternoon, everyone, and thank you, Prashant, for organizing this call. I'll begin with a brief overview of the business environment during the year, followed by detailed comment on operations, and thereafter, I will request Deepak to talk on financial performance. The Indian agriculture sector in last year witnessed moderate growth, with Agri GDP expanding by 2.4%, reflecting the impact of uneven climatic conditions and softening agri commodity prices. The southwest monsoon was above normal at 108% of the long period average. However, its erratic distribution delayed with the affected crop cycles and rural consumption, particularly during the Rabi season. Increasingly, the reservoir levels were quite strong, supporting the improved sowing activity.
As you all know, kharif acreage increased to 112 million hectares, and rabi sowing rose to 68 million hectares, culminating in record food grain production of close to 348 million tons. As on April end, all India reservoir levels are 115% of the last year's storage and 126% of the normal storage. South region is 93% of the last year's storage and 121% of normal storage. Going forward, weather forecasting agencies have estimated a below monsoon for the upcoming kharif season. Based on the recent estimates, key operating pattern markets are likely to experience largely normal rainfall. IMD is expected to issue the updated forecast providing region-wise view in the last week of May. I think this can provide better clarity for all of us. Summer sowings have started in a positive note.
As on April end, crop sowings stood at 8 million hectares, marginally better than last year. As you are aware, government has announced the NBS rates for Kharif 2026, increasing nutrient rates by 10% for N, P, and S. These rates do not reflect the sharp increase in raw material prices and rupee depreciation post the Middle East crisis. Industry expects further support to address the affordability issue for the farming community. Industry has been constantly engaging with the government to address these issues. We are hopeful of a positive outcome. Last year has been tough year for the sector, as the supply disruption from Middle East has resulted in elevated prices, especially in the back end of the year. We have seen sudden spurt in key raw materials like ammonia and sulfur. Availability of finished fertilizers became a challenge.
As you are aware, Middle East contributes significantly to raw material, feedstocks, and finished products. Our India dependence on ammonia and sulfur is upwards of 80%, and most of the shipments cross the Strait of Hormuz, and thereby this disruption in the region has led to sharp rise in commodity prices. While certain industry stocks remain balanced at this point, industry is making concerted efforts to maximize supplies in Q1. An empowered committee comprising of government and industry officials have been working in close coordination for fertilizer production, planning, and raw material sourcing. During the year, domestic phosphate industry increased its production to 16 million tons. Industry also resorted to a higher level of imports, both DAP and NPK, which added up to 10 million tons against previous year of 7 million tons.
Consumption for the year was close to 24 million tons, more or less same as the previous year. The mix is favoring NPK despite relatively higher prices compared to DAP. The share in the overall phosphatics, the NPK currently is having a share of 60%. During the year, industry players signed an off-take agreement close to 7 lakh tons of green ammonia. These efforts are expected to play a crucial role in reducing the carbon footprint of fertilizer production while aligning with India's long-term climate commitments. Happy to share Coromandel has also taken a lead in this government initiative and agreed for the coverage of 20% of the total ammonia requirement to be met through green ammonia route. On the agrochemical industry side, situation presented broadly constructive operating environment for the global industry.
After two years of destocking and demand suppression driven by inflated post-pandemic inventory, channel inventory levels show signs of normalization across major geographies. Indian agrochemical segment, as the market experienced a recovery trade in the first half with a near normal monsoon healthy Kharif sowing, which translated into stronger field-level demand compared to the previous year. However, the Rabi demand was muted due to late withdrawal of monsoon, leading to lower liquidation than expected. Having covered the industry, I will specifically now talk about company's performance. During the year, company's manufacturing plant registered record fertilizer production of 3.5 million tons with the highest level of safety and environmental management.
In fact, it is heartening to note that one of our largest fertilizer plant has been given British Safety Council five-star rating and also got the British Safety Council Sword of Honor awards. All the plants undertook annual maintenance turnaround in March, April month, and they have now resumed normal operations. Phosphate production for the year was up by 3% to 4.5 lakh tons. In March month, company successfully commissioned, as we communicated in the past meetings, commissioned the 2,000 tons per day sulfuric acid plant and 650 tons per day phosphoric acid plant at Kakinada, strengthening its backward integration capabilities. This plant is capable of producing annually 200,000 tons of phosphoric acid, and we have also synchronized the receipt of rock from Senegal, which will be used in this new plant.
Currently, this plant is going through trial runs and sulfuric acid volumes have scaled up. Power generation has also been met through captive power plants. Operations are getting overall stabilized, and we expect to operate at a desired capacity from April, May onwards. Our project to expand our granulation capacity is gaining momentum. We are on our way to commission this plant by December of this financial year. Our rock phosphate project at Senegal has stabilized very well, and we have reached the output of more than 3.5 lakh tons last year. We're planning to increase the volume further by 30%-40% in the current year. The company also has enhanced its stake in Senegalese entity and currently holding 71.5% in the mining company.
We have been diversifying our raw material sources through long-term contracts with various countries beyond Saudi and Qatar, like Southeast Asian countries, African countries, and Canada, and sometimes from Russia and China as well. Sadly, we are reasonably covered in terms of the raw material for the first quarter. We do hope that there can be a early resolution to the Russia-Ukraine crisis, and we'll be able to secure raw materials for Q2. I would like to point out here the challenge is not only the availability but also the price, and we are closely working with the government for suitable support to handle the current price volatility. I do hope when the supply side improves, price should get normalized. Currently, it's quite abnormal and beyond the affordability of any industry player to secure and produce and convert them into DAPs.
On the marketing front, we delivered record sales of 4.3 million tons of DAP and NPK, a growth of 7% over last year. Our consumption has reached the peak of 4.1 million tons, making it the largest player with the highest market share of 17.5% in the phosphoric sector in the country. Our share of unique rates remains at 35%. We continue to expand our footprint across North and Central India markets by active channel engagement and farmer connect initiatives, and we registered a growth of more than 24% in these markets. Our Single Super Phosphate business registered highest ever sales volume of 8.4 lakh tons, with differentiated grades like Groplus and GroAlpha contributing to more than 50% of the volume, and we continue to be the market leader in the SSP sector.
Coromandel drone spraying service delivering through Gromor Drive initiative and also through our own retail centers, we have covered close to I3 lakh acres and is witnessing strong adoption by the farming community. Our specialty nutrient business delivered strong performance, supported by focused market development and farmer engagement activities. We introduced different products across organic and specialty segments, offering crop specific and performance-enhancing solutions. Business is strengthening its manufacturing capability and is setting up a MPP plant and also seaweed granulation capacity. These investments will generate revenue in the coming years. Our Nano business had a strong year emerging as a leader in the Nano DAP segment with around 50% market share, while also expanding its presence in international markets through ongoing trials and registrations. Overall volumes expanded by 60%.
Company marketed close to INR 42 lakh Nano bottles by demonstrating product efficacy through extensive field trials, scientific studies, and farmer outreach programs. We strongly believe during this period of challenge and crisis, alternate solutions like nanotechnology can make a huge impact and can save the country from the huge foreign exchange outflow as well as help the farmers to have the right nutrient application for the crop. Company's retail business reported strong performance, growing over 20% in 2025-2026. Business expanded its footprint with the addition of over 300 new stores in Andhra Pradesh, Telangana, and Karnataka, while also entering new markets such as Maharashtra and Tamil Nadu. We continue to leverage technology-driven solutions including precision advisory, e-commerce, drone spraying services, and last mile delivery.
Moving on to one of our significant business segments which we have been growing consistently over the last two, three years and also where we made a significant investment through acquiring Nagarjuna Agrichem from the year beginning. The crop protection business of Coromandel achieved a healthy growth, both in terms of revenue and profitability. Performance was supported by strong domestic demand, recovery in export volume and new product introduction and disciplined cost management. Our standalone crop protection business of Coromandel, the revenue moved up by 16% to go up to INR 3,054 crores, led by higher sales across segments.
Formulations, exports, B2B and bio volumes have shown significant growth and margins have improved significantly and profitability of crop protection business has grown by 53% to reach INR 516 crores, benefiting from favorable demand for its key molecule across exports and domestic market. On a combined basis, our governmental crop protection business as well as Nagarjuna Agrichem has reported a combined revenue of INR 4,000 crores, which could have been better but for the late development monsoon in the Rabi season. Structurally, the business has been growing good, and we are soon to reach a milestone what we have been indicating in the past. In domestic market, we expanded our presence by introducing new territories, onboarding more new dealers, close to 1,000, and also introduced new formulations. We have introduced 10 new products during this year, which represent 21% of our total revenue.
Our export business registered strong volume growth, reflecting both the global inventory rebalancing cycle and targeted business development efforts by Coromandel in key geographies. During this year, the Coromandel commissioned a technical plant at Dahej and is further expanding our technical capacity at Sarigam. Bio business, where we are the largest player in neem-based biopesticides. The demand for neem-based Azadirachtin received good traction during the year. Expanding beyond plant extracts, the company has built a fermentation and microbial processing capabilities to diversify its biological portfolio. The launch of five biopesticides and three biofortifications has strengthened its innovation pipeline, with new products gaining good traction in the domestic market. We have completed the acquisition of 53% stake in NACL and also followed on with the rights issue of INR 250 crores to reduce the high cost debt.
The borrowing cost has come down significantly from NACL, and we are bringing the best practice of Coromandel, and we are now exploring the synergy opportunities between the two companies. NACL has made a significant progress, with revenue moving up by 28% to register INR 1,583 crores of top line and EBITDA of INR 103 crores against last year's loss. CA is working closely with the NACL team on leveraging synergies across product development, manufacturing and sourcing. Talking about our another subsidiary, Dhaksha, a drone subsidiary, it is currently in the nascent phase with substantial headroom for growth. Focused efforts are being made to streamline operations and address early stage challenges. With a clear emphasis on driving improved performance in the periods ahead, the company is working towards building strategic collaborations and sharpening execution capabilities to fast-track product introduction, improve business development and service aspects.
Dhaksha and Coromandel's agri business has been working very closely to develop agri drones specifically to address the need and provide comprehensive solution to the farming community of India. Overall, Coromandel supported strong operational performance in fourth quarter, with revenue growing by 19%, reaching INR 6,058 crores and EBITDA growing by 16% and reached INR 494 crores. It's pertinent to note that last year, Q4 had exceptional income of INR 347 crores relating to land sale against the current year provision of INR 71 crores, which we have taken towards investment impairment of investment. Hence, the reported profit is modest at INR 115 crores due to this variation of almost INR 418 crores during the corresponding period. Operationally, we have done very well, including the fourth quarter where we took annual turnaround. We operated the plant full.
In spite of the challenging situation which industry is facing due to certain spot in global prices not adequately covered by subsidy rates, Coromandel has turned around with a resilient performance. There has been a compression in fertilizer margins. All other business segments like Specialty Nutrients or Crop Protection Retail business have reported healthy growth in revenue and profitability. On a full year basis, Coromandel has reported highest ever revenue of INR 31,827 crores and EBITDA of INR 3,232 crores. Recently acquired NACL, as I mentioned, has turned profitable and registered EBITDA of INR 103 crores. Coromandel has invested significant investment of over INR 3,000 crores in the last two years across business segments, and I'm sure this will generate targeted revenue and profitability in the coming period.
I'll now hand over to Deepak to comment on the financial performance before I take any questions from the team here.
Thank you, Shankar. Good afternoon, everyone. The company recorded a consolidated total income of INR 6,068 crores during the quarter and INR 31,827 crores during the financial year FY 2025, 2026. This is a corresponding period of INR 5,113 crores and INR 24,434 crores, registering a growth of 19% for the quarter and 30% for the full year. The subsidy business share in the revenue stands at about 75% for the quarter and 85% for the full year. From a profitability point of view, the consolidated EBITDA for the quarter stands at INR 494 crores against INR 426 crores in the previous year. On a full year basis, the consolidated EBITDA stands at INR 3,232 crores against INR 2,628 crores last year.
The subsidy business share in EBITDA stands at 57% for the quarter and 66% for the full year. Correspondingly, last year it was 67% and 70%. The net profit after tax for the quarter stands at INR 115 crores in comparison to INR 578 crores in the previous year same quarter. That was essentially because of some of the exceptional items we have taken last year and this year. The net profit after tax for the full year stands at INR 1,898 crores against INR 2,055 crores in the previous year. As far as subsidy is concerned, during the quarter, the company received INR 3,441 crores towards subsidy claims.
For the full year, we have received INR 10,649 crores as subsidy. This compares with INR 8,082 crores we received last year. Subsidy outstanding at the end of March stands at INR 2,168 crores compared with INR 1,654 crores in the previous year. We have received the subsidy claims till the third week of March 2026. While the subsidy outstanding at the end of the year is higher as compared to the previous year, it has come down sequentially quarter-on-quarter from INR 3,785 crores to INR 3,199 crores at the end of September. As you may be aware, the government has also come up with supplementary grant of INR 1,500 crores for NBS in March, and we have hedged certain use in the month of March.
Inventory has remained at a slightly elevated levels, driven primarily by elevated raw material prices and certain incremental inventory that we have kept for our newly inaugurated phosphoric acid and sulfuric acid plant in Kakinada. We are also holding some level of strategic inventory, considering the ongoing crisis in West Asia. During the quarter, we took an impairment on the investments and goodwill in the standalone and consolidated financial results of the company, relating to the drones business, which is primarily due to long lead time, the execution of certain orders. Management believes the value of the investment is to improve and has provided for impairment on a prudent basis.
Finally, on Forex, during Q4, the rupee traded in a very broad range of INR 89.75-INR 95.23, which continued to pose certain level of challenges. Coromandel has continued to hedge its exposure on a competitive basis. Thank you.
Sir, should we open the floor for the Q&A?
Yeah, please.
Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on their touch tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only hands-free while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. The first question is from the line of Ahmed Madha from Unify Capital. Please go ahead.
Thanks for the opportunity. I have few questions. Firstly, if I compare the consolidated P&L and standalone P&L, there is a gap. Obviously NACL doesn't have incremental loss. I'm assuming that is coming from the mining entity, BMCC, and even the depreciation numbers are much higher compared to last year. If you can expand on how is BMCC as an entity placed in terms of financials, and also explain how the depreciation amortization of the mining asset moves forward in next year and thereafter, and how do you see the profitability trends of the BMCC entity?
On the mining side, you are absolutely right. The amortization expenses, depreciation is more of an accounting where the mining costs are also getting amortized, and it is shown there. Basically, it is a basic cost what we incur before we reach the ore. That gets amortized over a period of time. As to the accounting requirement, that needs to be accounted under the amortization. That's the reason when the volume of operation goes up, the amortization cost increases, we charge the entire initial mining cost over the volume of ore which we can extract in the pit. We do our mining accounting, and accordingly that gets reflected in the consolidated financial. Your observation is right. In terms of the financial health and performance of BMCC has turned profitable now.
The increased volume of operations, better absorption of fixed costs, improved efficiencies, and the price is linked to the market price because it's an intercompany transfer. Factoring that market price for the rock phosphate, it turns profitable, and it will improve its margin going forward with the increased volume of production coming through. This as far as BMCC is concerned. In terms of the overall subsidy and other amortizations which are happening, it's more of an accounting thing which you should get evened out. When you do the consolidation accounting involving subsidiaries, there is a certain amount of the intangibles which get amortized over the period, and that has gone into the accounts. In operationally standalone, Nagarjuna has turned profitable at the EBITDA level.
On a consolidated level, we need to have some amortization of certain expenses. It's more of a consolidation accounting between the acquisition value versus the holding value that gets amortized over the period. That is reflected there. That is why you see the change in the depreciation compared to standalone numbers.
Sure. Makes sense. Secondly, on the margins of the fertilizer business for the upcoming season, how should one look at it considering the very nominal increase in the subsidy numbers, about 10%, while the raw material prices are, have gone up materially. How do you see government response coming in, whether there can be another sort of a price increase rather subsidy increase, which sort of happened in FY 2023. We were going through similar phase where raw material prices went up materially, and government again revised the subsidies. How do you see the current situation, and what is your broad sense of how you'll be compensated for the higher raw material costs? Because I'm assuming current subsidy and the MRPs are not sufficient for it.
You are right. It's too early stages to this. Raw materials are coming in with higher prices. Of course, industry has some benefit of the carryover inventory in the first one or two months. Our farmers also will be able to have access to the opening stock of niche fertilizers. The replacement cost is very high. One is availability, another one is the price. As I mentioned in my opening remarks, the prices of ammonia sulfate have gone up extra-exorbitantly higher, and this naturally calls for additional compensation subsidies, which we have taken up with the government. It's under discussion stage, and hopefully we should get some. They have positively looked at it, and hopefully we should get a pass-through on this cost.
Basic objective is to see that how best we can secure first and produce niche fertilizers, then try and see how best we can retain the price to the farmers at more or less same level. If that calls for additional subsidy, it will happen. A very gap still remains. We may have to correct the prices because these are all too early stages and these extraordinary times, we don't want to put any number. We don't expect this scenario also to remain for long time. Abnormal event has happened, we hope the normalcy gets restored. Once the supply side improves, we do expect things to be back to normal. Having said that, it's very critical for additional subsidies to come in beyond what has been notified, as these rates are based on earlier rates.
We need to have additional subsidy and some pass-on will also happen, which industry also has taken some corrections in the last one or two months. As far as DAP is concerned, government has been considerate, and they have given a pass-through last year, and hopefully same should continue now.
Sure. My third question was on the crop protection business. If you look at, I mean, the performance in terms of standalone has been pretty good in terms of margin improvement. Can you just elaborate how do you see overall opportunity with the NACL acquisition done now? The entity has been consolidated for about two and a half quarters. How do you see the opportunity in terms of export side, in terms of scale-up of your agrochemical business? Nagarjuna's NACL's margins, how do you see the trend changing? Lastly, the standalone crop protection had low growth, about 2%- 2.5%. Were there any factors that led to that, how do you see the growth moving forward?
No, standalone has grown well. It's not 2%, 3%. No, we have grown INR 3,053.
Standalone crop protection, I meant. Standalone crop protection.
Yeah, I also was referring to crop protection only. 15.8% if I'm right. Revenue has grown significantly. This year is very overall. Just have a look at the math.
No, I meant for Q4, sir.
Oh, Q4. Q4 is a off-season generally.
Yeah. Yeah, yeah.
Okay. I was talking about the overall number.
Yeah. Yeah, fair. Yeah, overall, as I said initially, that you've done well. I meant just for Q4.
But in terms of the profitability they've gone up. Also we, overall if you want me just to give you a comment on the crop protection business, we have done extremely well on all segments. Whether it is global exports of active ingredients, especially the key molecule Mancozeb. We have got better volume growth as well as better realization. Our additional capacity which came up in Dahej during the year was quite helpful to meet the additional demand. In the domestic B2C market, we added territories and we increased the volume. Our formulation business overall has grown by 15%-20% while the domestic sector as a whole had a degrowth. Coromandel, thanks to the new territory from the new products introduced through this year, we have done well.
We could have done much better but for the challenges we faced in the rainy season, which is true for the entire industry. Domestic B2B segment, where we do sell active ingredients to other institutional customers, we have broadened the portfolio beyond Mancozeb and we have scaled up well. Prices of most of the AAs also improved during this year, and that has resulted in improved margins. On a standalone basis, crop protection business has reached the record turnover and record profitability. As you can see, it's close to 19% EBITDA margin on a revenue of INR 3,000 crores. This includes bio business as well, where the neem-based bio business has recorded good export volume. We started our own channel in bio for domestic sale as well.
We have also expanded the product portfolio in bio business to go in for microbials and plant extract products. On the NACL side, as I mentioned in my opening remarks, overall turnover has grown by 28% and profitability has improved operationally. Well, it has not added significantly to the bottom line, mainly because of alignment of major accounting policies in line with Coromandel, and that has resulted in provisioning which has reduced the net profit on a standalone basis. Capacity utilization of the technical plants have improved significantly. We are also looking at additional intermediate and technical capacities in the
Sure, sir. Thank you so much.
Thank you. The next question is from the line of Ankur from Axis Capital. Please go ahead.
Hi, sir. Good afternoon, and thanks for the opportunity. First, you know, if you can give the EBITDA breakup for, you know, for the full year in terms of subsidy, non-subsidy. The revenue breakup for Crop Protection, in terms of, you know, B2B, B2C, and export and domestic.
Sorry, sir. Come again. First one, what is it? EBITDA?
The non-subsidy, you know, EBITDA share for the full year, if you can share that, as well as you know, the breakup in the crop protection business, breakup between export domestic, as well as B2B, B2C revenue share for the full year.
Subsidy business share for the full year is 57%. That is clear.
I'm sorry, sir. You're not audible right now.
Hello?
Yes, sir. The line is-
If you give me a minute, just check in the.
Sure. Sure. Sure.
It's 66% for the year as a whole. What I said, 57, is for the quarter, and 66% for the year as a whole.
Sure, sir. You know, the breakup between export domestic and B2B, B2C.
You need this for the full year or for the quarter?
Full year, sir.
Coromandel Crop Protection business, right?
Yeah.
The exports will be INR 1,450 crores exports. Domestic will be INR 700 crores. Domestic B2B and formulation will be INR 900 crores.
Sure, sir. That's helpful.
Yeah.
Yeah. Okay. You know, and as you rightly highlighted in terms of the growth that we have seen for the non-subsidy business as well as the strong, you know, operating profit and margin expansion as well for the full year. Given the macro, one, is there any concern from an RM availability perspective for the crop protection business or even from a pricing perspective? Second, how do you look at the growth going ahead? You did allude towards NACL sort of, you know, cross-selling opportunity being there. Let's say on Coromandel, you know, own portfolio basis, what sort of growth are you looking at and sustainable margins there?
As far as raw material supply chain is concerned on Crop Protection, we are quite comfortable and we are fairly covered. I don't see any challenge. It continues to be available. Whatever input cost increases happened because of global phenomena, we are able to pass through. We don't see any impact on margin due to input costs. The Crop Protection business is fairly, we are comfortable. In terms of the growth opportunities, it is driven by active ingredient volumes. For Mancozeb, our additional capacity is coming up. That will be commissioned during the year. That will be the major volume kicker for active ingredient. On the domestic formulation business, we are planning to grow aggressively by another 20-25% because of the new registrations which are coming through in this year. We'll be launching another six new products.
Also we are increasing our import of active ingredients from China and also introducing new products in India. Overall, we can see a revenue growth of 20%-25% besides the capacity-driven growth in active ingredients, which were mainly for the export market.
Sure, sir. On the margins, do we think we'll be sustaining, let's say, 19-ish%, you know, non-NACL EBITDA margin for our business? Absolutely for that.
I don't see any challenge. Also we should note that the currency depreciation is heavily helping this business, with significant share of exports happening.
Sure, sir. That's very helpful. Just lastly, you know, you did cover up, you know, in your opening comments on the raw material inflation on the fertilizer side, and our expectation that probably, you know, there could be another round of maybe an increase in subsidy from the government side. My question here was, you know, one, given that Q1 is fairly there, but Q2 there could be RM inflation which could hit us. What if the government is not increasing, or maybe there is a delay in terms of increase in subsidy from the government side? Are we looking to increase the finished goods prices there as aggressively? You know, how much should Because that will have an implication on your, you know, overall margins as well.
How should one look at that part?
These are very abnormal situations, very difficult to predict, how long it will take, but it is very important both for the sector health as well as for the farmer benefit. Government responds favorably, which they are, they are looking into it, and it should happen here and now. If the production has to continue and fertilizer is to be made available to the farmers. We do hope that we'll have a yearly resolution on this additional compensation to ensure that any further price increase on NPKs are reasonable for the farming community to absorb.
Sure, sir. Okay. That's helpful. I'll get back into the queue for if I have any more questions. Thank you and all the best.
Thank you. Thank you, sir. The next question is from the line of Riju from Antique Stock Broking. Please go ahead.
Yeah, hi, sir. Thanks for the opportunity. Sir, the domestic and export revenue share that you have mentioned for the CPC business, that was the standalone business or including NACL?
That is for the standalone business. Yeah, it's for the standalone business.
If you could mention the NACL, like including NACL number for the Q4, for the export revenue, that will be helpful.
I need to get back to you on export revenue. Overall revenue is INR 1,584 crores for the full year and INR 361 crores for Q4. I need to just get back to you on domestic and export breakup in past few months later.
Understood, sir. In terms of the fertilizer business, could you please elaborate in terms of the finished goods inventory that you have as on March 26?
It may be close to 12.5 lakh tons, roughly finished fertilizers we may be having, and, that's where approximate at this point of time it can be collected.
Do you think entirely the manufacturing volume or, including trading one?
Trading is not much, probably INR 16,000-INR 70,000 may be trading.
Understood, sir. If I look at in terms of the Coromandel CPC business, standalone CPC business Coromandel, the growth was 2%. That was mainly because of this poor growth in the domestic market or it is mainly on account of both domestic and exports?
Sorry. Come again. What you're saying?
If I look at Coromandel CPC business for the standalone ones, the growth was 2.5% for the quarter. The primary reason was, you know, because of the poor domestic business growth or it is a mix of domestic and export, both have not performed well?
No, actually, it's off-season in domestic market, you know, so there also at least there is a volume increase. It's exports we have moderated the sale in fourth quarter, as we have opportunities to sell during season time in April, May. We have consciously taken a call to have a moderate sales in fourth quarter. There has been significant increase in site sales during that period. We have to look for right opportunity to sell, hence, we didn't push for more volume of exports in fourth quarter. It's a temporary slowdown in fourth quarter that will come back in first quarter. Formulation business anyhow they've grown well by 14% and in spite of being in off-season sales.
Domestic B2B is more of a function of demand requirement and that can always be made up in first quarter. I don't see any major issue per se in any personal segment. Area where we have marginally de-grown compared to last year is in bioproduct category, where we did exports in the fourth quarter of last year, and we have executed this export orders earlier in December, hence it is showing a de-growth in the current year. That is why the overall Crop Protection CPC is looking marginal at 2%. Otherwise, overall, fourth year growth 16% and that sort of a growth, we do expect to sustain.
Understood, sir. One last thing. If I look at in terms of the global industry, specifically in the Latin market, Latin market is, you know, struggling with the inventory issues. How do you see that market for your growth? Second part is that if I look at manganese prices for the last maybe one or two months, the prices have gone up roughly by, you know, 30%-40% in the range. How do you assess that in terms of your Q1 performance? Second is that if you could, you know, share the unique grade continuation number in the fertilizer business as well.
Our understanding is, this sorting has already happened in Latin America markets. We are not facing any challenge. The manganese per se, our cost increase is getting passed on, and that is required in the current market situation. Our dependency is not only on Latin America. We have a widespread reach across various continents. Those sections we are very comfortable, and we are awaiting for the new capacity to come out to increase our volumes and revenues in the coming quarters. I don't see any challenge in improving our margins or performance or sustaining the same in the first quarter.
Understood, sir. The unit grade continuing for this quarter?
Model has remained the same because some of the unique grades, because of the price increase in inputs were not viable. It remains a little bit different than the annual rates for this year.
Understood. Thank you, sir. Thanks for answering all the questions.
Thank you.
Thank you. The next question is from the line of Somaiya V. from Avendus Spark. Please go ahead.
Yeah, thanks for the opportunity, sir. My first question is on the phosphate price for the quarter. Has it been decided? That's one. In the international market, if you were to procure sulfur and ammonia, what is the current pricing level?
Yeah, price was fixed at INR 1,316. When there was a short gap of six days when it happened that time. Around the time we fixed that phosphoric acid price at INR 1,360. Against the previous of INR 1,290.
1,290.
And-
INR 1,360. Okay.
Respect of ammonia gone up significantly. There are deals that are happening around $840, $850 dollar range. That's where last we heard. Sulfur is also around the same level, $800 dollar range.
Got you. In terms of this, the backward integrated capacity that you have added last quarter, for the first half of this year, do we see any challenges in terms of raw material availability to run this at the fullest? Also in terms of margin contribution, do you see it to be accretive, given the, let's say, sulfur price volatility?
These, these are very extraordinary times, very difficult to, you know, look at margin at this point of time. It doesn't make sense even to look at whether product margin or the phosphate value gap. If you take current quarter phosphoric acid price and try to project next quarter, values are obviously to be negative because this price increase of sulfur and other input prices will come in in the next quarter. This may be one or two quarters of challenges and pressures, but it should get normalized. Structurally, the value gap what we regularly message will come through. I don't see any challenge in availability per se for running the plant because we have a good coverage of rock phosphate, and Senegal mines is operating at full stream, and we are getting rock phosphate from there.
Sulfur, there is a challenge. We have taken lot of efforts. There is a visibility up to first quarter as I mentioned. Going forward, things ease out, we should be able to secure raw material for the second quarter as well. We have to wait and see how this Middle East crisis is playing out.
Understood, sir. In terms of between Q1 and Q2, I think we should be having a fair idea of at least how things stand today in terms of inventory that is there in the system, NPK subsidy that's being given and pricing that's happened. Would be fair to say Q1 is kind of still manageable and Q2 is where definitely the subsidy support should come in? Or is it like in Q1 itself we need this incremental subsidy support?
Every day is a new day. We're not able to predict anything. This time it's a little uncomfortable for us to put any number on the table. Let's wait for things to play out before we can completely have understanding. It's bit challenging. Right now, we are focusing more on securing raw materials and having the production, ensuring fertilizers availability for this . We have a lot of things, and government has to do, then we have to correct the prices. So many things are there. Bit fluid at this stage, I would say.
Okay. last question is on.
I'm sorry to interrupt you. Somaiya, I would request you to kindly rejoin the queue for follow-up questions, please. There are others who are waiting for their turn.
Sure.
Thank you so much.
Thanks.
Yeah. We'll take the next question from the line of Akash Mehta from Canara HSBC Life. Please go ahead.
Hi, sir. Thank you for having me call. My first question is on the sourcing bit only. You said, I mean, sir, on the sulfur front, it's slightly challenging as of now. Obviously we have a visibility of Q1, but going into Q2 it's a bit difficult. Can you just help us with the current sourcing? I mean, it was earlier with the Middle East, from where you are kind of managing the sourcing for sulfur and the raw materials, if there is any change. That's my first question.
Sir, we used to source predominantly from Middle East only. Now we have diversified sources. Wherever sulfur is available, we shall buy. We have been getting some shipments from Canada as well. We have got tying some domestic source also, we are getting something from South Asian countries, Japan. We're looking at all the opportunities. It's quite fortunate that we have got our own sulfuric acid plant coming up in Kakinada as well, so that we can produce sulfuric acid because sulfuric acid prices have gone up significantly higher. Hence it comes handy to have our own sulfuric acid, which in turn can generate steam and produce power as well. We have multiple sources we are working on. Whoever supplies sulfur to us, we are okay to take it. Yeah, right now it's more of a spot transaction which we are doing.
Otherwise, the major source used to be QatarEnergy and Saudi.
Sure, sir. As of now, there is no shortfall as such. It's available at a higher price. That's about it, right?
Yeah, visibility up to June. We have to keep covering. Hopefully it should ease out. See, the major challenge is the bottleneck of the ships to cross. It is not sulfur is not available. Sulfur is available in plenty. It is the movement of ship through this Strait of Hormuz is what's making it difficult for us to predict anything. We are hoping things normalize and sailing time is not much between Middle East to India. For July it is too early to predict whether it will happen or not. In a logical sense, it looks like it will happen.
Sure. My second question is in terms of business highlight, on the subsidy front, or again, you cannot give a clear timeline if it will and when it will come through. Based on, given the raw material price increase, any number you can just help us out with in terms of the implied increase in subsidy or the price on the last number and on percentage terms or other terms there.
We have to wait and see. For the Rabi season, NBS rate formula will kick in. Probably will get updated. What we are talking about is the intervening period of June to September, where the raw material prices have gone up very sharply. It may be a cost to cost reimbursement is what we are looking at, so that we can cushion the current spotting prices to a great extent, while we arrive at the final price to the farmers. Very difficult to predict how much they will give. Like a pass-through in DAP, we are trying whether there can be a pass-through in NPK as well. We need to wait and see how it's going to happen.
No, sir. That's it from my side. Thank you.
Thank you. The next question is from the line of Darshita from DSP Asset Managers. Please go ahead.
Hi, sir. Thank you for the opportunity. I just had one question. Is there any key intermediate for Mancozeb that we import from Middle East countries, where we may be facing any constraint for importing it?
Fortunately not. We are able to get everything from other than. It's only import we have this raw material, nothing is coming from Middle East. Yeah. Of course, we have some products, but we have alternate sources, so we are quite okay with it.
We've been able to pass on the price increase even in the last two months. Fourth quarter, of course, we can see that. Over the last two months also, we've been able to pass on the price increase.
Yes. Yes. To some extent, the currency depreciation also has aided this absorption some.
Got it. Okay. Not facing any shortage for sourcing the intermediate?
Yeah. We had some small disruption in the month of April. We have now looked at alternate suppliers. Unlike nutrients, the import of these raw materials from China is quite okay. It takes time, but it comes, and we are fairly covered.
Okay, got it. Yeah. That's all. Thank you.
Thank you. We will take the next question from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead.
Hi. Thanks for the opportunity. In view of the raw material inflation, what should be our margin guidance as far as EBITDA pattern is concerned for the whole year?
I'd prefer to pass this question.
Sorry?
Very difficult to predict at this point of time. Let's see how it goes, because it's a function of what government is going to compensate and how much we are going to look at price corrections. It's a function of many things. It's very fluid. I don't want to put any number now. Let's wait for things to get normalized. See, factually nothing has changed except for the blockade which has happened, which has resulted in shipments not going through. Once the supply situation improves, supply chain gets normalized, prices should come back. Putting any number for the next two, three months, how it's going to be, it's not going to help any of us.
Okay, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Sheel Kumar Shah from Sameeksha Capital. Please go ahead.
Yeah. Hello, am I audible?
Yes, sir.
Yeah, very much.
Yeah. Thank you for the opportunity. My first question is, what is our manufacturing EBITDA on fertilizer side, I mean, pattern for the 4Q and for the full year?
Last year it was around INR 5,000+ that we had mentioned, and fourth quarter was compressed. It was less than INR 3,500, around that number. It was around INR 3,500 for fourth quarter.
Okay. What about on a trading side? If you can share margins or EBITDA pattern.
It's too difficult to make. Depends on the grade, the timing of purchase, and there is a pass-through on DAP. Different set of numbers are there.
On an average, what type of margin would we be making on a trade?
You can take roughly 4%-5%, sort of a number.
Okay. How do you see trading volume I mean, for FY 2027 on high days of FY 2026?
We have a challenge in availability, especially on DAP. We need to see how things improve. We'd love to do the same volume. There can be a potential reduction in the first quarter because of non-availability, especially major imports coming through from Saudi may not happen. We also want to be conscious on working capital liquidity. We do not be shipping unless it is absolutely essential to meet whatever the demand. Second half, I think it should get normalized if things improve, the volumes should come back.
Mm. Okay.
Based on availability of that and our risk appetite.
Understood. My last question is on, what would be the revenue for Nano DAP?
I can tell you INR 45 lakh. I didn't get the number now. It's part of the overall segment. I will come back to you on this. I think I have it written.
Yeah, sure. Thank you. Thank you so much.
Thank you.
Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead.
Hi. Thanks for the opportunity. My question is related to this Dahej capacity that which you are expanding. How much additional revenue or asset turn, if you can give, do we expect, and what kind of, I mean, product portfolio diversity specification it will have?
We expanded our capacity by 10,000 tons of micro DAP. I'll get back to you on the revenue for this, on Dahej. The payback will be much faster, less than one year. The investment what we have made in debottlenecking the facility that gets paid off less than 1 year. In fact, we are expanding another 20,000 tons with Sarigam as well. That project is underway. That should come through by middle of this year. Hopefully, there also, I think margins are pretty good, and we should have a payback in a shorter time frame of less than two years.
Okay. Hello? Sorry.
Yes.
Earlier, you were evaluating in foraying into CDMO. What stage we are having the CDMO? How is the opportunity that we look forward? Any further progress?
The CDMO takes very long time, two, three years.
Yeah
right, MNCs have responded favorably. They looked at the facility. They moved to the next stage. They take quite a long time. Two, three European entities have shown interest. With the combined strength of NACL Industries, we are able to fast-track some of the intermediate manufacturing. We are looking at fluorination chemistry very seriously. While NACL Industries has got the capability, and we are going to invest on fluorination chemistry in the coming quarter to showcase it to the potential CDMO players. They're quite happy with this, and some of the Japanese collaborators are also keen to work with us. Things are progressing well. While it is not immediately impacting the revenue in the current year, but I'm sure few years down the line, we'll have a significant play in this space.
We are trying to do it organically, and we will scale up. We are not looking for big-ticket investment immediately. Looking at the current market situation, we wanted to focus on current investments, what we have made, realize the value out of it before we make any fresh investment on a large scale on CDMO space. We are doing well on the organic space. At this point of time, I'm not able to put out the partly claim, but things are progressing very well.
Could we see any revenue in, from FY 2028 or?
It may go into the year after that also. Because once they,
Right
Get the proof of concept ready and, we start releasing the product and then agree to the costing, margins, et cetera, it may happen. We will start creating some capacities of smaller scale this year, and that will go into production next year. Some revenues is coming, but significant can come in year after.
Now, taking, with the price increase substantially in this fertilizer, how should we think that adoption of Nano DAP, I mean, going ahead, say post, I mean, harvesting?
Ideally, this is a great opportunity. Like COVID, many things have happened. I wish farmers' adoption increases. We are trying to do and promote balanced nutrition. As long as you have urea and DAP are available at affordable price, the situation will be difficult. Unless there's a major policy correction happens and restrict the availability in terms of actual need for the marginal farmers, this adoption will be slow and steady. We are also not in a hurry to push through. The product is working well, and it can dictate shortage situations. It can be a boon to the farmers. That's all it is.
Okay. Last question, sir, if with your permission. Any update on Dhaksha?
A good question. I mean, thank you. A righteous point because I've taken the diminution in the earlier earnings contribution to Dhaksha. As you know, we have got a large order which is pending for execution, and we have fixed all the technical-related gaps, and we are awaiting for the execution of orders. I'm personally driving this initiative, and we have made significant progress on introducing new products. A lot of projects have been identified, a lot of partnerships have been identified, and we are seeing good traction coming on the different segment after the usage of drones in various warfare. Besides that, Agri, Coromandel and Dhaksha have been working very closely. They have come up with new products. They are going through type certification.
We strongly believe there's one space in agriculture where drone response has been extremely good for the farming community. We'll be scaling up volume. We are participating in the institutional tenders. We are also looking at drones for various institutional applications, and we are trying to develop the complete ecosystem for Dhaksha by tying up with the various component manufacturers, whether it is for the batteries or cameras or various other electronics instruments, and also for software development. Dhaksha will be moving to a larger place, more than 60,000 sq ft, where they will build this facility where the entire team will sit in Chennai. Hopefully, this facility should be ready by May. A lot of progress are happening, and I think we are in a good recovery mode.
After we execute the first order during this year, that will give us the confidence to have repeat orders across various segments of defense. Meanwhile, we are also centering the R&D, and we are going to introduce new products over the next 6 to 9 months. We will try and realize the value of investment what we have made. We are bit ahead of time, but it's going to make a difference in next two years.
Thank you very much, sir, and all the best.
Thank you.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.
Thank you very much. Thank you for the insightful questions, and I know it's a challenging time, and definitely I'm sure, we'll do our best to serve the farming community. Thank you for your continued support.
Thank you, members of the management. On behalf of Elara Securities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.