Ladies and gentlemen, good day and welcome to Gujarat Narmada Valley Fertilizers & Chemicals Limited, GNFC Q2 and FY 2027 earnings conference call. This call is hosted by Anurag Services LLP on behalf of GNFC Limited. From the management, we have Mr. D.V. Parikh, Executive Director and Chief Financial Officer, Mr. Nitin Patel, Executive Director, Mr. P.K. Purohit, Executive Director, Mr. Rajesh Pillai, Company Secretary and Compliance Officer, and the other senior members from the management. As a reminder, all the participants' line will be in the listen-only mode. There will be an opportunity for you to ask a question after the presentation concludes. Should you need assist during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand over the conference to Mr. D.V. Parikh, Executive Director and CFO from GNFC. Thank you, and over to you, sir.
Thank you, ma'am. Thank you, Anurag Services, for organizing this call. Good afternoon to moderator and all the participants, investors, prospect investors, and analysts. GNFC welcomes you all to this conference call. Joined along with me are two other gentlemen, one from the fertilizer marketing and one from the industry product marketing. So they will take your questions related to marketing. The quarter two results, investor presentation, press release, among other things, have already been shared yesterday in the public domain. I'll first start with the business overview and then go to financials. Business in general is witnessing the times of resilience during the war-driven turbulent times, where the only certainty as of now is the uncertainty. Company has been in a position to weather away the uncertainty by balancing out with its multiple product portfolio, maintaining the profitability.
Especially the energy prices in general from period to period have witnessed a very sharp upturns, like oil has been on the boil, gas is having its pricier glitters, coal casting its dark net on the utility cost. Period-to-period impacts have been different, but in general, energy prices are on an escalated level across the board. This has a ripple effect on the feed and fuel cost soaring, and it affects the fertilizer sector too badly with very high cost of loading on the government subsidy. Companies in turn are also bearing the burden of soaring input cost, not becoming a full pass-through due to the open fronts available to competitors like China. Overall inflationary effect of high energy prices have become apparent in various forms, as high labor and maintenance cost as well.
Against these steep headwinds, the business is navigating its ship in a manner it sweats its assets for the maximum possible positive results. On the front of government support and policy-related initiatives, in spite of the issues on the energy sector, the Government of India has been successful in ensuring the adequate availability of both feed and fuel at industry level and at country level. Subsidy payouts have been timely, so liquidity is in place. The nutrient-based subsidy rates are yet to get announced for the Rabi season. In respect of the fertilizer sector, the NITI Aayog has been assigned the task of reviewing the fixed cost of urea industry. Coming to the financial performance, we start with the P&L first.
While the YoY performance has been significantly better as compared to the previous year, as well as compared to the YoY Q2, the sequential quarter has witnessed margin pressures, mainly because of the lower margins on the finished product and also because of certain energy prices going abnormally high. While the sales volumes in general have improved on a YoY basis, prices have played a key role in the turnover. As is apparent in the segment results, the fertilizer operating results have been relatively improved, mainly driven by the volumes and improvement in energy norms, whereas the chemical segment has witnessed margin pressures, mainly due to realization impact on some of the chemicals like TGU, technical grade urea, ammonium nitrate melt, Weak Nitric Acid, and so on. Coming to the balance sheet, it continues to be in the healthy `. CapEx for H1 amounts to about INR 500 crores.
Captive coal-based plant is now operational, and ongoing projects by and large are on execution schedule, in spite of certain impact of geopolitical effects. Going over to cash flow, for H1, there is a healthy operating cash flow generated. Working capital levels in general have gone up mainly due to the subsidy receivables, where the energy prices are of the previous period, and therefore, the concession rates are tagged to those periods. Dividend declared has been paid out during the quarter, and given this situation, a highly fluid situation we will call. Navigating the situation as it comes has been the way forward for the short term. Although for medium-term to long-term, the focus has been running the fair operations as well as adding meaningful products to the pipeline. With this, we open the floor to Q&A. Thank you very much.
Thank you very much. Now we begin the question and answer session. Anyone who wish to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use a headset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. As soon as someone presses star and one to ask a question, the lead operator will enter the conference and announce the participant in this way. The first question is from the line of Nirav, Anvil Wealth. Please go ahead.
Yeah, good afternoon, sir, and thanks for the brief presentation. Sir, you touched upon few aspects in terms of various products impacting the profitability, but when we see your presentation and the products what you have shown, I think spreads for most of the products were either steady or were on the higher side in this quarter. The major raw material, which is oil for us, which is used for Ammonia, it is also down on a QoQ basis. When we see the operating profit on a sequential basis, we were down by close to around INR 200 crores. So, if you can slightly explain much in detail about this sharp fall in the profitability on QoQ basis, that would be very helpful.
The next question is from Ashish Agarwal, Confident Cap. Please go ahead.
Hello.
Hello. No, no, it is yet being answered, ma'am.
Manasa, what we will do is that we will take up the questions, and along with that, we will also provide the management will reply, and then we go to the next investors. This is how we will follow. So let us first give answer to Mr. Nirav, and then we will proceed.
I will answer. See, Mr. Nirav, right?
Yeah.
Yeah. These spreads which you see in the investor presentation are with respect to one of the key elements which is getting used. Let me give you an example of TDI, where the spread is shown with respect to the toluene. There are other things also which goes into the product which has different effects. If we look at sequential quarter, which is your question, the realization in three key products, Weak Nitric Acid, WNA, technical grade urea, and ammonium nitrate melt, four products have been substantially hit, which is predominantly the reason for impact on the margins, number one. Number two, on the energy front, it is basically the coal prices which has impacted in terms of the fuel cost. Number three, effective July 1, the long-term settlement-related provisions are all done because of the four-year completion with respect to the last settlement.
These are predominantly the reasons which have impacted the margins. Otherwise, if you look at in isolation, like gas prices on a QoQ basis has not changed much. Oil prices have not changed much. But these are the other variables which are impacting the profitability.
Thank you, sir. Manasa.
Hello?
Thank you. The next question is from the line of Ashish Agarwal. Please go ahead.
Hello. Am I audible?
Yes, sir, we can hear you.
Two questions. One is, put together cash and bank plus all the other deposits in the form of, say, cash and bank balance, which is deposits, investments, et cetera, how much is the total as of September end? Second, sir, when you were explaining earlier that there was a long-standing contract hit that came in, given other fuel, gas, et cetera, Q1, Q2 remains to be same. When we see that segmental profits for chemicals have come down by approximately INR 250 crore, how much of the impact come from that long-standing contract, and do we see normalization from Q3 prospective, given Q2 versus Q3 also we are not seeing much of a jump in terms of all these fuel costs, et cetera?
Okay.
Hello?
Yeah. I missed your first question.
First question is simple, on the cash and bank balance put together along with deposits.
It is all taken together in around INR 3,900 crore.
Okay.
Regarding your next question, it is not long-term contract. It is basically the long-term settlement.
Sure.
Okay? Which pertains to the wage revisions, where you will see the impact under employee cost.
Okay.
If you see the quarter-on-quarter, there is a 33 CR which appears as a variance in the employee benefit cost. We are referring to the long-term settlement-related provision, not any long-term contract-related impacts.
That would not repeat in Q3 from that perspective?
There will be certain accruals because it takes time to settle down on the wage settlement aspect. Okay? There will be certain accruals for employee benefit expenses.
My question is, given we are in, say, November month, probably we have some insight of how October went and given how market also reacted to the share price. Wanted to understand chemical, say, difference of between Q1, Q2, 250-odd crores, how much is going to continue in Q3 as well?
I will request on this marketing to respond.
Tejas, sir.
Can you repeat the question, please?
My question is, if the fuel cost, which is gas, oil, et cetera, continues to be similar, Q1 versus Q2, and now probably Q3 also we are seeing something only getting better off from here. The difference between, say, the Q1 and Q2 segmental profits on chemical side was approximately INR 250 crore lower. How much is that going to continue in Q3 going forward, given we have already seen October month, and the spreads that you have shown in the presentation are on the higher side as of now?
As far as the marketing concerned, Q3 is going on well. That other part, Parikh sir, you can take up.
Yes. See, this is something, one aspect is how things are faring. This has something to do with the ongoing profitability, which I would request our company secretary, because of approach, we don't comment on the quarter which is running. This is the time results are-
Parikh sir, I will inform the investor. Sir, we would request all the investors to keep their questions pertaining to the financials of Q2 and not to any questions related to Q2 or its relevant, as these are all price-sensitive informations, and we would like to refrain from commenting on this.
Then my question is, in Q2, what was the total of one-time impacts which we have seen? One you boiled out, which is INR 33-odd crore on account of settlement. What are other one-time impacts that we saw in Q2 versus Q1?
Okay. The net impact of one-time was around INR 75 crore. Okay? It consists of various things, like energy norm, like freight claims, this wage settlement. Had it not been there, it would have been positive by INR 75 crore.
Okay. So technically, we are seeing the segmental profits on chemical side, which is disclosed at INR 177, would have been INR 255 had the one-time—
Had the one-timers not been there.
Okay, got it.
It is not exclusively on chemical, because one-timers comprise of across the board business.
Sure. In total, it would have been INR 255 crores.
Yes.
Okay. Simple question, this one-time, I am not talking about any profitability or numbers from that perspective. One-time, in our analysis, should not continue for that matter?
By and large, except the wage-related, because that is ongoing.
Yeah. Sure. Thank you. That helps.
This is Rajesh here, Rajesh Pillai, Company Secretary and Compliance Officer.
Yeah
I request that you please inform the investors that their questions should be limited for three questions maximum, so that we give a fair chance to all the investors who have joined at this con call. Thank you.
Thank you.
Thank you. I am done with my question. Thank you.
The next question is from Falguni Dutta, Mansarovar Financials. Please go ahead.
Sir, could you please repeat your explanation on AN Melt? I just missed that.
Madam, there are a few chemicals where there is price realization erosion witnessed. AN Melt is one of them.
Okay. And sir, what could be the cause, given that in this, like generally, up move in various chemical prices, what could be the reason for erosion in AN Melt price, to your mind?
Basically, these are the competitive forces, okay, which has created these impacts on various chemicals.
Okay. And can you—
As you know, ma'am, except one or two products, we do our pricing based on the import parity.
Most of these chemicals are imported into India.
Aside from some of the products where we also compete domestically.
This is the competitive scenario, based on which these chemicals are impacted currently.
Okay. And sir, one final question, if it is possible for you to answer, is if we see as on date, let us say today, on the TDI margins today, would they be better than the Q2 average? Is it possible for you to comment on that?
Ma'am, being a listed company, normally
No, I am saying today. I am not saying previous quarter, what would be the Q3 average?
That is what I am saying. Being a listed company, today is the current quarter. And current quarter, normally, unless it goes through a proper channel of board approval and all, we can't comment on any of these aspects.
Okay. Never mind. Thank you. That's all from my side.
Ladies and gentlemen, in order to ensure the management is able to address the questions from all the participants in conference, please limit your question to one or two per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Nirav from Anvil Wealth. Please go ahead.
Yeah, sir, my question got disconnected in between. Just two questions. First on the production numbers for ammonia, TDI, WNA, CNA, AN Melt, and TGU for this quarter.
Nirav, I am Nitin Patel, Executive Director. The production of ammonia in Q2 was close to 178,000. TGU was 44,900. AN Melt was close to 41,000. WNA, 114,000, and CNA was 41,000.
TDI, sir?
TDI was INR 8,700.
Okay, it was less Q-on-Q.
Yeah.
Okay. Had that plant now ramped up? Because last time you said that we started again operating the plant from July onwards, so some of the production would have lost. Had that production run rate been restored now?
See, production is on in both the plants. Unfortunately, in July, because of the viability issue, as narrated by our CFO
Yes
The plants were not producing because we were in a cash loss situation. The same scenario applied to acetic acid as well as Ethyl Acetate. Because of that, the volumes are less.
Correct. But now all of these three products where we had a problem, now they are all operating normally?
Yeah, yeah, they are all operating. It was for 30 days- 35 days.
Correct.
And it is operating normally.
Yeah. The second question is on the trend of oil prices, like what we have seen in Q2 and Q1. I think they are more or less similar. Possibly they wouldn't have captured in terms of whatever is the increase in the prices of crude which has happened. Like directionally, had the prices of oil started moving up because they are calculated based on the previous month's averages, if I understand it correctly. Some thoughts over that. Secondly, on the coal-based boiler where you touched upon that it has started now producing for us. When can we expect the full benefit of this coal-based boiler to the company?
I'll request our materials head, Mr. Desai, to respond on first question. Second question, our CFO sir will respond.
Good evening. I am N.B. Desai. Regarding this question on the oil prices, month-on-month basis, the oil prices are seeing a volatility. It is largely depending upon the indices of the crude. Due to current geopolitical situation, we witness that month-on-month volatility is there, and price increase and decrease. Somewhat it remains within the range, but it has an impact.
Okay.
I will touch on the second one. Before that, to add to what is said on the oil front, as compared to Q1, the oil prices overall have been down. With every different escalations, things change. This is the situation on the quarter gone by. Regarding your question on the captive coal-based plant, it has started generating steam from 25th of July. Around August, it has started catering to the power requirement. On your question of full benefit, as of now, the situation is that we are taking the benefit of steam, okay? Not the power, because power is relatively, given the high coal prices, grid power is turning out to be currently cheaper. We normally keep that as the fallback.
The captive power plant, we keep it as a fallback, whereas the main source we use is that of the grid for the purpose of power. For the purpose of steam, this benefit is already availed. Regarding the full-scale one, the performance guarantee test run will happen during this quarter, and thereafter, it will go on full scale. Anyway, steam, barring for certain interruption, can be catered at the full rate.
Correct. Sir, just a follow-up, if you allow me. Sir, A, on any other cost initiatives which could fructify in second half of FY 2027, which could directly help us reducing our operating cost, A. And B, on your earlier comments about the price erosions happening on WNA, TGU, and AN melt side, was it because of the fact that in the month of July, when crude prices went down and some of the imports which were booked earlier started coming to India, because of which the prices got impacted, and now the situation is slightly turning in our favor in terms of the normal pricing scenario? Is it a right assumption to work with, sir?
On your first one, regarding the various initiatives, see, this is a process-driven company. There are various initiatives which are already taken, whether sourcing, gas sourcing, okay? And depending upon what is the opportunity to encash in terms of the lower cost, decisions are taken. Okay? And that way, cost is optimized. An effort is being done for optimizing the cost, but there are many factors which remain beyond the control, given the warlike situation. On your next question, that price erosion and reasons thereof, there are multiple market dynamics. It is very difficult to comprehend one single reason for this. What finally we witness is there is a scenario playing out, and we need to respond accordingly. More than this, there could be multiple factors affecting this, and difficult to fathom out.
Perfect, sir. Thank you so much. I will join back in the queue for further questions, sir.
Thank you. The next question is from Atishay Malak from Axis. Please go ahead.
Yeah, hi. Am I audible?
Yes, sir, we can hear you. Please go ahead.
Yeah. Hi, good afternoon to the management. In the Q1 FY 2027 investor presentation, you had mentioned that there would be a positive financial impact of about INR 61 crores pertaining to the new energy norm of NCU, and this was likely to be accounted for in Q2 FY 2027. So, has that INR 61 crores been accounted for in the results of Q2 2027?
Yes.
Okay. How has that been accounted for? Where will that be reflected?
It will be in the form of the concession rate revision. What happens is, as you know, the Fertilizer Industry Coordination Committee revises the rates based on the input as well as energy norms. There is already certain accrual based on, let's say, earlier norm of 6.20%, right? When it is revised to 6.37%, the concession rate gets revised accordingly. Therefore, it appears on the balance sheet as subsidy receivable in the P&L as part of the subsidy.
Okay. That would be accounted for in the revenue, is it? The fertilizer revenue?
Yes. It pertains to urea, so has to be part of fertilizer.
Okay. Thank you.
Thank you. The next question is from Abhinav Mandovar, Aequitas Investments. Please go ahead.
Yeah. Hi. Thanks for the opportunity. My first question was with respect to TDI. Just wanted to understand, has there been any Chinese capacity addition in 2026, 2027, and how much has there been, and how does it affect our spot prices? Also, just wanted to understand concentration, customer concentration for TDI.
Thanks, Tejas Shah. As you might be knowing, Wanhua has increased their capacity in 2026, 2027. One of the plant's capacity is increased. As far as the Indian market is concerned, the Indian market is a 120 KT market. No doubt, with the Chinese imports, the fierce competition we are facing. As far as our production capacity is concerned, it is 70,000 tons per annum. So, there is a huge market, and market growth CAGR is around 8%-9%. No doubt, whatever we produce, the other material has to come to Indian market via imports.
How much was the capacity that was increased by Chinese?
Chinese one was one of the plants, Fujian plant capacity from 150 KT to 310 KT.
Okay, 150 KT. I just wanted to understand our customer concentration in the TDI space. Who are our major?
Most—
Yeah.
All the major foam manufacturers, basically TDI is used in manufacturing of foam.
Yeah.
All the major foam manufacturers are connected with GNFC.
Okay. Also with regard to the Bharuch plant viability, what is the difference, the cash cost difference versus Bharuch and Dahej? Are we planning to shut down Bharuch plant?
No plan to shut down Bharuch plant. In fact, it has been cost competitive as compared to the Dahej plant. With operation of this captive power plant, both are coming nearer now. Okay? Depending upon the dynamic of coal and gas prices, at times TDI might remain more attractive than TDI-II might remain more attractive in terms of cost than the first plant at Bharuch.
Okay. Also with regards to, we have good amount of cash on books, what are our capital allocation plans here?
These are already part of the investor presentation as to what are the current projects which are poor in nature, and what is on the anvil.
Okay. That's it. Thank you. I'll get back with you.
Thank you. The next question is from Ashish Agarwal, Confident Cap. Please go ahead.
So same, similar question which I had asked earlier, on the lines that the current prices we will not be able to disclose of the products that we sell. Hello?
You want current prices?
Yeah.
For TDI and aniline—
Like—
As our Company Secretary explained, there are certain sensitivities attached to the current quarter-related aspects. We request you people to confine your questions to the quarter for which we are holding the call. That is preferable.
Q2, can we then only give a small answer? Q2 average prices were what, like for TDI, aniline, and acetic acid, and Q2 end prices was what? That is pertaining to previous quarter. Can we answer that?
Yes, that I will request our marketing team to let you know.
Sure.
You asked me about the pricing of Q2 for TDI.
Average prices for TDI, aniline, acetic acid, and Weak Nitric Acid.
Acetic acid and Weak Nitric Acid. Okay. TDI prices for the Q2 average was around INR 285,000.
Okay.
Aniline was around INR 180,000.
Okay.
Acetic acid price was around INR 35,000.
Okay.
This is 61.5% concentration price.
Yeah.
Sorry, sorry. Nitric acid price, I have to calculate because we are normally taking the realization on 100% basis.
I will tell you on a 100% basis the realization. I will request our marketing counterpart to add the discount. Basically, 28,500 is the weak nitric acid price on 100% basis, not the price realization. There are certain discounts which can be added to arrive at the price.
So, acetic acid?
Acetic acid will be around 65,000.
What was it at Q2 end?
Pardon?
These are average prices which you told me for Q2. How was it at the end of Q2?
End of Q2, the prices were almost same because this is the average price. I do not have at present the exact price on the 31st.
Okay. I will explain for the whole quarter, we have the price. If you want it at the end of the period, my marketing colleague may answer. But if your answer is for the whole quarter average, then it was INR 62,600 for Q1, and for Q2 it is INR 72,840. Let's say INR 73,000. Acetic acid has Okay, acetic acid. Okay. This is for acetic acid. And the figure which you are hearing from me is the average for the whole quarter.
Okay, got it. Got it. Got it. Similar for others, sir, if you can answer for others as well.
See, okay. As you know, there is a final difference between price and realization. From finance side, I will know more about realization than the price. For price, I will refer back to our marketing colleague.
For TDI, whatever I told you now, INR 285,000.
Okay.
Last date price is not with me, only on September 30.
Last week price will also do, or last month price will also do. If that is, if you can recall that, or the current price.
Last week price was INR 310,000.
Okay
Week of September.
Sure. Similar for aniline acetic acid as well, if you could share the numbers.
Aniline
If possible, can you share those numbers for the quarter gone by offline? It will save time of everybody, if investor is okay.
Yeah, I'm okay. How do we get this information?
For aniline, it was 198,000.
Okay, great. What was it for acetic? Acetic it was 72,000, like sir explained. Weak Nitric Acid was around 28, 29 only?
Yes.
Okay. Thank you. Thank you. That explains my question. Thank you.
Thank you. The next question is from Vibhrat from Agument. Please go ahead.
Hello?
Sir, we can hear you. Please go ahead.
Hi. Sir, sorry, I just joined the call a little late, but I wanted to understand a couple of things. I mean, I believe people may have asked you the same questions, so I apologize for repeating it. But, just wanted to understand a couple of things. In your presentation, right, you've shared that spreads have gone up significantly over the past year or so. But if we see the impact on the gross margins, they're down. Now, I believe that would be because of higher cost of inventory that we've been carrying from Q1. But typically, what kind of inventory have you been carrying, and did you really stock up a lot in Q1? Like, what would be the inventory days that you would have in Q1, towards the end of Q1?
I'll answer that. See, if you see the financials, the decrease in the inventory is already showing up, which is INR 236 CR.
Yeah.
And if we couple it up with the increase in the inventory, which was there in quarter one, the cumulative impact is INR 533 CR, which is the liquidation happened.
Right.
This is the liquidation we could do during the quarter.
Mm-hmm. And sir, going forward, I mean, in terms of inventory, how are we looking at things? I mean, with the war kind of stabilizing today, war scenario kind of stabilizing, do we think prices are going to normalize both on realizations as well as the raw material? How is this going to impact us over the next few months or maybe the next six months, if I may ask?
In the opening remark, we said that this is really an uncertain time because every other day or week, we hear something, which is contrary to what was heard earlier. Therefore, it makes predictions to be made very, very difficult.
Right.
So, for the short term, there is no clear idea which we are getting.
Okay. We are running the business, but most of our guesses are not stabilizing. They change by a wide margin from time to time.
Okay. These are not the times to really hedge the things. There are many things happening across.
No, but sir, in terms of raw material procurement policy, right, like, would you be procuring your raw material on a monthly basis today? Would you be procuring it on a 3-month basis, right? Like, how are you acting on that? Because, I mean, if the war goes on, then there is a possibility that we do not get raw material in the future. So, are you stocked up for that? Like, Vibhrat, you want to just-
The point is that there is no clarity whether the war will stop the input coming in.
Like, war has been there since, what, by late February or March?
Right.
It has affected initially, especially the gas availability. On the rest of the feed, we have not faced any difficulty in terms of availability. But of course, it has its ripple effect in case of demand and supply getting affected overall on the prices which is playing out. We do our sourcing. On the sourcing part, our colleague will tell better, but we do our sourcing based on the production plan for the month. In anticipation, if we, let's say, store today something by buying out and tomorrow prices go down, then it is sort of element of speculation in that. Rather better to buy what you really need for a reasonable time based on your production plan. This is how the company operates.
Correct.
We do not do stocking assuming that things will go up or down and therefore let us stock. That is not the way we work.
Sir, I mean, is there any way that you can guide on what kind of spreads you see? I mean, I understand that things are very volatile, but if I look at the past one year, right, the spreads have only been increasing. Sir, your chemicals are, I mean, I would believe that GNFC having a clear advantage of being one of the sole manufacturers of most of the chemicals you guys are in. I mean, I would assume that because of the China cutting down on production and exports and putting export rebates and everything in place, that should benefit us, right, over the long term? I mean, if my thinking is correct.
These guesses are hazardous guesses, so really we do not. This is not the time to tell because how it will play out in a short term. Really, we would refrain from this question because honestly, none of us, whether on the marketing front, on procurement front, making a guess is going to be hazardous because we really do not know tomorrow what will happen. But we navigate our size, our shape of the company in a cautious way so that as far as possible, the profitability aspects are taken care, aside from the customer satisfaction and delivery. This is what is the area of focus as of now.
Sir, all the CapExes are going to happen on time, right? We see them going live as per schedule?
By and large, you can say, okay. In case of only one project, we have a delay of 3 months, but recouping plan is already discussed with the lump sum turnkey contractor. The rest are by and large on the schedule. At times, things come up in terms of delivery, which is of imported material, but somehow this is managed so far.
Right. Noted, sir. Realizations are holding up fine right now as we speak, right? Because I read something that acetic acid prices had gone down quite a bit in the month of October. When it comes to these chemicals, do you think that we would be very sensitive to crude?
Sir, we will talk about Q2.
Yeah. If I had to look at Q2, right, like the chemicals in Q2, the chemical segment in Q2, because of crude prices going up, I believe the realizations also went up. I mean, could one assume that if crude prices were to come down, then realizations would come down?
We have not seen this kind of correlation, especially in this war situation. Let me give you a clear example in Q2 itself. Oil prices have not moved further up. Rather, it has gone down, okay? On a consumption basis. You see, what we are witnessing is different when we look at the segment. These relationships are going haywire currently.
Okay. Let me give you another example. We have, let's say, some of our product, let me give you the example of technical grade urea. Okay. Oil has marginally gone down, but the kind of realizations which are impacted are way different, disproportionate in nature. This time, this linearity is not working out. As such, there are many products where linearity is not at all there even over a longer time, like TDI and toluene.
That's not the right way to look at is what I would say.
Got it, sir. Understood. Okay. Thank you so much for your time. That's all from my side.
Thank you. This was the last question. I now hand over the conference to Mr. D.V. Parikh, Executive Director and CFO, GNFC Limited. Thank you, and over to you.
Thank you, ma'am. On behalf of GNFC, the management thanks all the participants, and we would request to join the call next quarter as well. Meanwhile, we take your leave. Thank you very much.
Thank you. On behalf of GNFC Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.