Ladies and gentlemen, good day and welcome to Paradeep Phosphates Limited Q3 and 9M FY 2025 earnings conference call hosted by Antique Stock Broking 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 this 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. Manish Mahawar from Antique Stock Broking Limited. Thank you, and over to you, Mr. Mahawar.
Thank you, Nirav. On behalf of Antique Stock Broking, I would like to welcome all the participants on the call of Paradeep Phosphates. Today, we have Mr. Suresh Krishnan, MD and CEO, Mr. Rajeev Nambiar, COO, Mr. Bijoy Biswal, CFO, Mr. Alok Saxena, Head, Corporate Finance and IR, Mr. Susnato Lahiri, DGM Strategy, IR and ESG on the call. Without further ado, I would like to hand over the call to Mr. Krishnan for opening remarks, post which we will open the floor for Q&A. Thank you, and over to Mr. Krishnan.
Yeah, thank you, Manish. Good morning, everyone, and welcome to Paradeep Phosphates Limited Q3 and 9M FY 2025 earnings conference call. We have shared our earnings presentation and press release, both available on our website and stock exchanges, and I hope you've had a chance to review them. Building on our momentum, Q3 FY 2025 was another good quarter with robust production, primary sales, and post-sales growth, leading to improved revenue quality. Our focus on value-added NPK fertilizers remains consistent, and we produce seven unique NPK grades in addition to DAP, ensuring greater flexibility to meet the farmers' needs. In Q3 FY 2025, the production rose by 25% year-on-year to 675,808 metric tons, while the sales surged 47% year-on-year to 870,586 metric tons. For the first nine months, production reached 1.91 million metric tons, up 4% year-on-year, with sales climbing 13% year-on-year to 2.29 million metric tons.
We've also seen strong market traction with our newly launched Triple Super Phosphate. Our Biogenic nano-fertilizers continue good performance, with sales surpassing 1.4 million bottles in the nine-month period, with Zypmite production hitting an all-time high of 36,000 metric tons during this period, reinforcing our commitment to a circular economy and sustainable ESG practices. On the backward integration front, our sulfuric acid capacity expansion from 1.3 million tons per annum to 2 million tons per annum remains on track for completion by Q3 FY 2026, supporting our phosphoric acid integration strategy. Additionally, we completed the first phase of our energy-saving initiative at the Goa plant, which is expected to yield efficiency gains and cost savings in the coming quarter. Coming to the financial performance, Q3 FY 2025 income from operations stood at INR 4,105 crore, marking a 58% year-on-year growth, with EBITDA at INR 372 crore and an EBITDA margin of 9%.
PAT for the quarter came in at INR 159 crore, up 47% year-on-year, with PAT margin of 4%. For the nine-month period, income from operations totaled INR 10,326 crore, with EBITDA of INR 978 crore, reflecting a 9.4% margin for the period. PAT for the period stood at INR 392 crore, with a PAT margin of 3.8%. So EBITDA was at INR 978 crore, reflecting a 9.4% margin, and PAT was at INR 392 crore. The performance reflects our efficient raw material sourcing, our strong backward integration, diverse product mix, extensive distribution networks, and deep-rooted relationships with channel partners and farmers. Favorable rainfall, stable reservoir levels, lower-than-normal fertilizer inventory ahead of Rabi, continued government support have all contributed positively to demand. Looking ahead, we remain focused on optimizing our fertilizer mix, managing raw material, managing the raw material price fluctuations, and driving operational excellence.
With strong fundamentals in place, we are well positioned to deliver positive financial year for 2025. With that, I would now like to open the floor to questions. Over to you.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone 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. Participants, you may press star and one to ask a question. The first question is from the line of Prashant Biyani from Elara Securities. Please go ahead.
Sir, thank you for the opportunity, and congratulations on a good set of numbers. Sir, we have committed INR 4,000 crore of CapEx in Odisha. Can you share some details on project-wise breakup and timeline of investment for each of them?
Am I audible?
Yes, you're audible. Mr. Krishnan, can you hear us? Mr. Krishnan, can you hear us?
Yes, I can.
Go ahead, sir.
Hello.
Let me take this. Out of the INR 4,000 crore investment, what we are envisaging is INR 3,000 crore investments will be on the fertilizer operations, which includes phosphoric acid, sulfuric acid, and the downstream granulation unit. The balance, INR 1,000 crore, is estimated to be around green space, which includes green ammonia or a technical grade or merchant grade phosphoric acid. These are the kind of investments that we have indicated to the Government of Odisha. Having said this, these numbers are preliminary in nature, and we'll have to do a detailed project feasibility analysis before we get into the project mode.
Okay. And sir, on the MCFL con call, management has told that post-merger, we may plan some investments in Morocco as well. So can you highlight some details on the Morocco investment plan of ours and timeline for the same again?
No, I think we are still.
What is that?
Yeah.
Yeah, look, go ahead. Yeah.
We are still in discussion phase. I think we'll get back to the audience for today's call at the right stage once we have taken the proposal at the board level.
Sir, on the merger with MCFL, when can we expect the approvals from?
So Prashant, as you know, that in November, we called up for the board meeting wherein the modified scheme was submitted, and the file is now being reviewed by SEBI. Hopefully, we are all expecting SEBI approval to come through shortly. And once that is there, then we'll have to go to the NCLT procedures.
So then the merged financials can come in at the earliest from when?
See, in the scheme, we have said that the merger, once contemplated, will be effective from April 24. So that's the provision we have made in the scheme. And there is a 12-month window that is available from the date of filing of NCLT. So in case we are able to file the NCLT by this March, then obviously, we can take the benefit of April 24 as envisaged in the scheme. But that will be effective only after getting the NCLT approval.
Okay. And sir, according to your last quarter presentation, average rock price in general was around $188 and sulfuric acid at $98. For this quarter, how much could both these be for rock and sulfuric acid?
When it comes to rock, it's a formula that really works for us, and it's predicated to the going rate for phosphoric acid in India. So as you know, we have actually corrected our cost to a $1,050 phosphoric acid price, which is going to be $1,055. So rock levels are going to be pretty similar to what we saw last year. It's not going to be a major change. And sulfuric acid is purely market-driven. And so it's a dynamic situation. But I don't see a phosphoric acid, phosphoric rock price change in a big way going forward this quarter.
Sir, just for the ease of convenience, would you be able to share the phosphoric acid price, average price for Q3?
Currently, the phosphoric acid price for this quarter is $1,055 per metric ton, which is the purchase phosphoric acid that we get.
I'm sorry, I meant sulfuric acid.
Sulfuric acid, we don't buy too many. I mean, if you want to share some number, you can. Because we are a manufacturer of sulfuric acid based on sulfur being available. We purchase sulfur. The sulfur rates have been between $110 and $10. Yes.
Okay.
So the purchase rates have been $110. But that is, we buy as and when we have a need. Otherwise, we normally manufacture sulfuric acid.
Okay. So for the quarter, how much subsidy have we received and how much is pending?
This one, you can take this. Yeah, yeah.
Yeah. No, we have received around INR 1,750 crore of subsidy for this quarter. And what is pending is around INR 2,200 crore. Sorry, INR 1,700 crore.
Right. And sir, what will be the gross and net debt for the quarter?
Yeah, this one, you can respond. Yeah.
We have got a gross debt of around INR 4,000 crore, but after removing the cash, it will be around INR 2,600 crore.
Thank you. Prashant, I'll request to come back for a follow-up question. Thank you. Next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead.
Hello. Can you hear me?
Yes, we are audible.
Yes. Thank you very much for the call and congratulations on your good results. So while your commentary is positive and the results are good, the one thing that I'm curious about is the margins are down in percentage terms. You're taking anything away from your percentage growth. So what is the reason for the decline in margin? Is it just a function of the increase in the top line? And secondly, in terms of the benefit from the captive sulfuric acid and phosphoric acid manufacturer, what would be the impact this quarter in terms of dollar per ton or percentage? And how do you see that improving once your entire backward integration project is completed with the expansion of the phosphoric acid plant?
When you look at this financial year from April 1, I think first and foremost, what we need to understand is that we've been affected by primarily three factors. The first factor is currency. The second factor is the global commodity prices for raw material, which have been there. The third factor is the way the prices are moved in the Indian market for the finished goods. If you look at the third quarter for us, we've had a contraction of margin, which has come in, and it's largely to do with DAP. It is important to understand that we have a good amount of DAP in our manufactured portfolio, which is also a product that is there as part of a larger revenue mix for us. DAP is one product wherein we are seeing a contraction right through.
And the same thing about DAP, which we are seeing today, is the raw material prices have gone up. The currency is weakening. However, the affordability of the farmer has been good. So this, in our view, is not a good situation to be in. What it does to the farm economy is that the balanced fertilization that we all look at might just get disturbed if this kind of a trend continues. So in our view, the DAP margins will expand or will have to get corrected. And the correction can come two ways. One is commodity prices correcting itself, or the overall revenue mix that we'll get in terms of the revenue from the marketplace and the revenue from the government for this particular product will have to kind of change to correct this.
So I think the DAP change is something important to watch out, and it should happen from April 1, 2025.
Okay. And the other question on the value capture on captive sulfuric acid and phosphoric acid, how much would that have?
That continues. The domestic value capture for making phosphoric acid between what we can import and what we do, we've always maintained that there's about an INR 10,000 crore margin that we can get, which actually has been expanding with currency today. So it could be going up to INR 12,000 crore and at times even to go to INR 14,000 crore. So that value capture goes on. And as far as sulfuric acid is concerned, it's slightly more muted because of sulfur prices. So maybe about around INR 2,000 crore a metric ton.
Okay. So that means once your sulfuric acid project is excluded and your phosphoric acid plant is in full production, you'll get this benefit based on the. So when do we expect the full benefit from fourth quarter of FY 2026 or first half of FY 2027?
You look at it, the phosphoric acid capacity has been completed, so we're getting the benefit of it today. But the key thing that we're not getting the full benefit in the phosphoric acid is because we still import a part of the sulfuric acid, which we require. So this increase in capacity by about 0.6 million tons is what we're expecting to do today. It's going to be there in Q3 of 2026 or next year, by about September, October we'll be ready. So the second half of next financial year, you will see the full benefit flowing in.
Thank you for that. So one last thought. So looking at your current net debt and the debt profile in future, now that you are possibly coming to the end of your current CapEx, any further thoughts in terms of CapEx for the next two, three years?
No, I think I would like to state this for the benefit of everyone. We are running a net worth of close to about INR 3,900 crore. And our long-term debt is about INR 600-650 crore today. And we have always maintained that we would like to keep our long-term debt within a range, maybe a 0.3-0.35% of the 0.34 of the overall net worth that we have. So we are planning our projects based on that. So we will be careful in terms of capital allocation when it comes to it. And we will look at projects based on this kind of a debt flexibility that we have. So today, the key project that we are following up, besides the sulfuric acid project, is the expansion of phosphoric acid from 5 lakh to 7 lakh tons, which we announced in the last board meeting.
That is one CapEx that we're doing, which is going to make a material change to us, and that will be available in the year 2026. It will not be now. It will be middle of 2026 is when this will get streamlined for us. Along with that, the other major thing that we're doing is the energy optimization, reducing the carbon footprint in Goa, wherein we expect that we will modernize our compressors in our fertilizer complex, so that project is going to be taken up in December of 2025. So between 2025 and 2026, and these are all finance projects, so there's no new thing to be done here. So these are projects which are going to finally add value and give the positive support to the growth in EBITDA for us.
So if I may just get two more thoughts from you. One is, in terms of this CapEx for this year, next year, what would the number be? And second thing is on the energy efficiency project, what is the benefit you expect, say, in terms of per ton? And when would that go through into your numbers?
If you look at it, as far as the project is concerned, the residual project that we need to finish in the sulfuric acid side will still cost us about INR 200 crore-INR 250 crore. That's been the residual CapEx we will have there. And when it comes to the other project, which is the new phosphoric acid capacity from INR 5 lakh-INR 7 lakh tons, it's going to be roughly about INR 240 crore-INR 250 crore. So these are the two main INR 400 crore-INR 500 crore investment that is going on at this point of time. And these are investments with high numbers of return on capital employed. Coming to the energy efficiency side, we are planning to incur close to about INR 180 crore on energy efficiency. The idea here being this project of INR 180 crore should at least give us 25% return on capital employed.
So that's the return that we are expecting to get from this project.
Okay. Thanks a lot. Congratulations once again and show of hands.
Yep.
Thank you. Next question is from the line of Bhavya Shah from 3A Financial Services. Please go ahead.
Hello. Congratulations for the great result. Am I audible?
Yep.
So, sir, my question is, in the recent financial budget, FY 2025, government has reduced allocation for fertilizer subsidy to INR 1.67 lakh from FY 2024 of INR 1.88 lakh . So our company could have some negative or positive impact of this subsidy?
Coming back to the subsidy allocation which government does, I think it's an adequate subsidy they are provided for. It's normally an estimate based on the current trends where they get to see. So if you look at it today from a budget estimate to a budget estimate, there isn't marginal improvement. But from the revised estimate of last year to the current budget estimate, you may see some kind of a small reduction which is there. But I think we see this as a comfortable position going forward. And typically, government makes an assessment of all this in the first nine months. And if there is no geopolitical issue that you get to see, then you might get to see fertilizer prices in a more stable range. And these numbers will come good.
Okay.
Shah, sorry to interrupt you. There's a lot of airy sound coming while you are speaking. Can you keep the microphone a little away from your mouth, please?
Okay. Sorry for the interruption. Thank you for addressing the query.
Thank you very much. Next question is from the line of Riju. From Antique Stock Broking, please go ahead.
Yeah. Thanks for the opportunity. Sir, my question regarding the current budget. Government has reduced the subsidy, sorry, not subsidy. Government has reduced the import duty on phosphoric acid from 20%- 7.5%. So how will that impact our earnings or our company in terms of profitability?
Did I want to respond to this? Yeah.
Phosphoric acid, I don't think there is any decrease in the phosphoric use rate.
Phosphoric Acid is 5% for 5%-4% for the fertilizer use.
No sir, if you look at the budget document, so there was a reduction in duty, so 20%-7.5%. So is that a same grade or?
This is nothing to do with fertilizer.
No, this is not the same grade. What we input right now, what we input is around 5%.
So this is, I think, on the manufactured phosphoric acid, which is used for the food segments. What we produce is a fertilizer-grade phosphoric acid, which we import from Morocco and all.
Okay. But sir, we input rock phosphate, right? So if we are importing rock phosphate and if phosphoric acid prices are going down, imported prices, then we might have negative impact in terms of EBITDA per tons. So that I wanted to understand.
No, no, no. This phosphoric acid, what you are talking is something different. What we input, the customs duty is 5% right now.
Okay, okay, okay. Understood, understood.
So that is maybe the full grade phosphoric acid.
Understood.
So it will impact the import of the phosphoric acid for the fertilizer grade.
Okay. Understood, sir. Thanks for the clarification. And second question was in terms of sulfuric acid capacity addition that you have announced last year, 0.6 million tons. So that is on track or how it is?
Yes, it's on track. Yeah.
Yeah. So this will lead to commissioning by end of this financial year?
This is expected to commission by September as committed to the board, and I think it is on track, and we don't see any uncertainty in that.
Okay. Understood. Thanks. Thanks for the clarification, sir. Thanks. Panel back to you.
Thank you. Next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Hello Sandeep. Yeah. Thank you for the opportunity. So my first question is on the backward integration part. I wanted to know what is the total savings that we did due to the backward integration of sulfuric acid and phosphoric acid in Q3 as well as nine months. If you could give us a number for that.
Our capacity of phosphoric acid has about increased by about roughly we've increased our capacity by 600 tons per day, which is per day. That's a capacity increase that we have done. And that reflects into about 18,000 tons per month. So in a quarter, we get about 50,000 tons- 60,000 tons more. So that has an impact of close to about INR 50 crore in the overall mix. And the benefit of sulfuric acid and phosphoric acid can merge into that benefit. And that's what we did. And this is the difference between the phosphoric acid that we would have imported in case we have not increased our capacity.
Okay. And so if I understand it right, I mean, this quarter, we have seen some increase in sulfuric acid prices has been reported. And also, one of our peers who is also backward integrated in this, they saved quite a lot of amount. So I mean, the margins, if I have to compare, not on a percentage basis, but on absolute basis, I've seen a very good improvement on year-on-year basis. Would it be correct to say that this primarily is due to the backward integration that the margins that you are seeing?
I think the backward integration is what is playing out for sure. Yeah. Because the MRPs have been changed very much.
Got it.
So the product has been changed very much. So it is the backward integration that is playing up for the margins here.
Yeah. So because the trend of sulfuric acid since last four, five months seems to be more on upwards. That's why the query on it.
Currently, I mean, we have only a 1.3 million ton capacity. So once the new capacity comes in, I'm sure we'll gain from there also. Yeah.
Okay. Just one more question on my side. I understand there is a new capacity is coming in quarter three, FY 2026. On a normalized basis, what would be the kind of EBITDA margin we can see once all our backward integration kicks in for a full year basis, that is?
We have always said that for an integrated plant with introducing newer grades and more soil-specific grades, the range that we've said is about 4,500-5,000. But I believe that once the backward integration for us across the site, I mean, the overall requirement of phosphoric acid and sulfuric acid gets back to us, then we should obviously be pushing ourselves into a range of 5,500 per metric ton and above. Yeah.
Okay. Okay. So just one question, last question from my side. So as of nine months FY 2025, I see we are utilization is somewhere hovering around 83%-84%. Can we expect us to close somewhat about this level for FY 2025? And can we see the sales trend picking up, going in quarter?
Harshdeep like to comment on this?
Yes, sir. I'll clarify. Yeah. Just to share with you, the sales, if you look at it for the current quarter, we've grown by 47%, coupled by both the plants optimally supplying and also supported by the new products that we have been introducing in the market. And we see that growth continues coupled with full capacity utilization and we created volume.
Thank you very much. Vignesh, I'll request you to come back for a follow-up question, please.
Certainly.
Thank you. Next question is from the line of Aman Jain from Arihant Capital. Please go ahead.
Hello.
Yeah. Am I audible?
Yes.
Yeah. Yes, sir. Thank you for the opportunity. Sir, just wanted to understand. So we have launched a new product, Nano DAP, in nano- fertilizers. So sir, what is the total capacity that we have for this product? And have we begun the commercial sales for it? And what is the overall market outlook for the product in the long term?
Yeah. I'll ask my colleague, Harshdeep, to respond. Harshdeep.
Good morning. So see, the first and foremost thing I think I should share with you, we've almost touched 1.4 million nano bottles sales up to December, YTD through December. And the way we look at it is to kind of establish the benefit. And we see a healthy 25%-30% growth being driven into the next year also. We have a capacity which is around 2.5 million bottles. That's 25 lakh bottles. And we have the capacity to also further expand this sourcing. So that's how we're planning it out. And I think the first thing is we'll be happy to note that we have a unique product, which is what we call a Biogenic Nano. And we are getting a very good response, especially for our nano DAP. And we've got a very good growth in the current year.
Thank you. Understood.
So sir, just 2.5 million bottles is the total capacity for Nano DAP and Nano Urea, or just Nano Urea?
Both put together. It's fungible.
So the capacity is flexible. So depending upon the market requirement, you can interchange between the two products. And we have the ability to expand it further.
Thank you.
Hello.
Hello?
Yeah.
Yeah. Am I audible?
Yes.
Yes.
Yes, sir. Yeah. I'm done with my question, sir. Thank you.
Thank you so much. Next question is from the line of Dhruv Muchhal from HDFC Asset Management. Please go ahead.
Yeah, sir. Thank you so much. Sir, this quarter, in terms of demand in segment, seems very strong. But if I look at the production numbers for the complex fertilizers, 0.6 million tons that you have done for the quarter, and a simple annualization takes me to about 2.3 million-2.4 million tons annualized complex production volumes. This is against a capacity of 2.6. So I'm just trying to understand, is this a reasonable utilization level in terms of an annualized run rate, or can we go higher than this?
In terms of Dhruv, in terms of capacity utilization, what we have to keep in mind is that the capacity of the plant depends on the kind of grade that we make. There are grades which are volume drivers, but there are grades where the volumes are less. So the kind of grade that you have made, I think we have achieved good capacity utilization this year. And you're right that we have an ability to go up to 2.6, and that's what we will try. And that will come up only when the grades like 10: 26: 26 come back in a bigger way in the manufactured segment.
It's because I'm just trying to understand. This time, you have done a lot of trading volumes. So there was probably an ability to optimize your production according to your requirement, to the best of your requirement.
Yes.
So hence the extrapolation from these quarter numbers. So I'm just trying to understand, is that a right extrapolation, or there is some more potential?
What you're saying is that we are currently based on the quarter number extrapolation leaves us at about 2.4 million tons of fertilizer annually, which is a fair number. But our ability is to go between 2.4 and 2.6. Why it is showing 2.4 is that we did not do the volume driver in terms of end-to-end as a manufactured product. Had we done that, we would have seen a far more production here.
Got it. Got it.
That's the only thing. Otherwise, a fair thing. And let me tell you, this quarter, the imports were not the most exciting thing for us to do. So that's also an important thing to keep in mind. So we did some imports all right, but those imports were only to supplement the needs of our channel rather than so much from the profitability angle. Yeah.
Got it. Actually, the second question was more on the structure of the market. We are seeing that for you also, and it seems also true for the industry, that the NPKs are growing much stronger than the DAP. Some of this could probably be because of the shortage of DAP. But just excluding the shortage portion, I'm not sure how we can, but is there a structural shift towards NPK that we are seeing for the farmers for the benefits that they get from NPK?
It's an interesting question, and I think my straightforward response is yes. I mean, I think Harshdeep can throw some more details on this.
Yeah. So I see a lot of effort has gone in by us, especially in terms of promoting boron nutrition. And there is a higher awareness amongst customers in terms of adopting the multi-nutrient NPK because they're getting better results. So especially if you look at the category product, which we are also driving the product called 20:20:0:13. So this has got sulfur along with nitrogen and phosphorus. We're seeing a very good growth in this particular segment of NPK. Then we have a unique product from Goa which only we manufacture. It's 19:19:19 , so balance fertilizer. So we are seeing a greater adoption by farmers for the boron nutrition. Of course, like what you rightly said, partly because of limited availability, that also played a role.
If you look at your organization's PPL, our growth rate has been much higher as far as the farmer sales is concerned for NPK. We grew by a farmer's sales of NPK by 48%, while the industry grew by 30%. There is a lot of effort which is going on in terms of promoting NPK with the farmers.
Yeah. Yeah. So the idea was because this has come along with the DAP shortage. But the trend towards NPK is very strong. So just was trying to understand how structural this is. Can this continue? Probably not.
I think it is important for you to realize one thing. When we talk about DAP shortage, I think DAP needs a price correction. That's our strong view, and when the DAP price correction comes in, everything will fall in place. So that is the first important point that we have. The second thing is, for two consecutive years, we are seeing that some of the larger DAP-consuming markets have taken on NPKs. The consumption has been there. So when you see a farmer going through three, four seasons of a new product, and he comes back to buy the same product again, that is necessarily a shift that you're seeing. That shift is positive.
The current situation of DAP, while it is, in my view, not the best situation to be in terms of promoting balanced fertilization, but it has certainly given some trends which, in the long term, can be beneficial.
Got it. Perfect, sir. Great. So thank you so much, and all the best. Thanks.
Thank you. Next question is from the line of Krishan Parwani from JM Financial. Please go ahead.
Thank you for taking my questions. Firstly, on this additional DAP subsidy, INR 3,500 per ton, how much have you received in this quarter?
Yeah. This fall, you want to?
No, we have this subsidy. Whatever the DAP is raised, we have received up to the end of this November. So only December is pending. Now, out of INR 3,500 , I think so far we have raised INR 3,000 based on the notification. So whatever has been raised up to November has been paid by the government.
So essentially, that INR 500 per ton was pending for the last quarter, and it is pending for this quarter as well. So the remaining amount could come through in the subsequent quarters. Is that the understanding?
Yeah.
Okay. I'll find out. And secondly, were there any inventory losses during the quarter?
Sorry?
No.
No. Okay. So.
Nothing.
Okay. And I think Krishnan sir were mentioning, when can we expect that DAP MRP revision, given ammonia prices have moved up and probably resulted in a slight contraction in our gross profit? So when do you expect that?
I think as far as DAP is concerned, as I said earlier, we are the first to receive the subsidy announcement, that NBS announcement by the government, effective 1st of April 2025. I think that will set the tone on the terms for it.
Understood. Well noted. And just the last bit on your trading volume. So what was your per-ton EBITDA margin on trading volumes in this quarter and last quarter?
Yeah. That's all you want to provide?
The per-ton EBITDA for the trading will be around INR 2,000.
This quarter and the last quarter as well?
Yes. Yes. Yes.
Okay. And just one small clarification. Can you share the trading volume for 3Q FY 2024 and 4Q FY 20 24, if you have that handy?
We'll ask Krishnan sir to send you separately, Krishnan.
No problem. No problem. That's all from my side. Thank you for patiently answering my questions, and wish you all the best.
Thank you. Next question is from the line of Prashant Biyani from Elara Securities. Please go ahead.
Yeah. Thank you for the opportunity again. Sir, if I heard Mr. Biswal correctly, we have claimed only INR 3,000 crore out of INR 3,500 crore of incremental subsidy from on DAP. If that is correct, why is it so that we haven't claimed the entire INR 3,500 crore yet?
As per the notification, government said they will pay INR 3,000 crore, and INR 500 crore will be paid at the end of the year after the audited details are given to them, so we are gone by that.
Sir, typically, when does the audit get complete?
Typically, we like to provide them an audit at the end of the year, so we'll be doing it in the month of April.
Okay. And, sir, some update on where we are on widening our distribution reach? How are things panning out there?
Distribution reach for us, as far as north is concerned, I think it's come up well. I think we have from Eastern UP, we are into Western UP, we are reached to Haryana, and we continue to be there in Punjab. We have consolidated ourselves in Karnataka very well now, right across. The next round of, I would say, a change in reach will come post the merger. We expect that to happen next year.
Okay. And if Mr. Biswal can share the POS sales volume for Q3?
Oh, sure. Yeah. Yeah. Certainly.
I'm sorry, you can share that.
I'll tell you the numbers. POS sales discount for the quarter was INR 10.54 lakh metric tons versus last year of INR 6.4 lakh metric tons. We had a 65% growth in POS sales in Q3.
Okay. Thank you.
Second success is 1 million tons plus POS sales.
Right. Okay, sir. Thanks.
Thank you. Next question is from the line of Dhruv Muchhal from HDFC Asset Management. Please go ahead.
Thank you, sir, for the follow-up. So just a quick one. The DAP subsidy is INR 3,500. We are billing INR 3,000. But in terms of accounting, what are we doing? Are we accounting for INR 3,000 or INR 3,500?
Currently, INR 3,000.
We have accounted INR 3,000 only.
Okay, so there is a INR 500 gap which we are not accounting for, which will be accounted for only once it is probably received or confirmed by the government, but that subsidy is.
That's the subsidy. Over and above the prevailing rates.
Yeah. In your view, is that available, or how should we think of?
That's very much available. We have to provide the audited based on the audited account, the account finalization. We have to book that one at the end of the year. So as per the notification, we have booked INR 3,000. The balance INR 500 will be booked in the coming quarter.
Sure. Perfect. Makes sense. Thank you.
Thank you. Next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Hello. Thank you for the opportunity again. So I couldn't get the clarification the first time around. So I just wanted to know, will the sales velocity continue in the quarter four of this year? And what would be the full-year sales volume growth if I have to compare it with FY 2024?
Look, fourth quarter is not a season sale, and by the time we come to mid of February, the season ends all over India, so you normally don't see a big growth in the fourth quarter. But obviously, the kind of momentum that you've got in growth in sales over the first three quarters and the kind of numbers that we're going to get, you will see that continuing in FY next year also. We are nearly going to be hitting closer to the 2.9 million-3 million tons mark that we had in mind in terms of overall sale, so I think that will be a significant milestone for us.
Okay, but if I'm right, over nine months FY 2025, the volume is around INR 23 lakhs, right? And you are saying you will hit around INR 29 lakhs.
Something around that. That's what you see. That's the kind of material that will be available. But it's an off-season, so you have to be careful in terms of what kind of a sales or demand that you get to see in the field.
And a similar number when it comes to FY 2026, just that with a better margin profile due to our backward integration, right?
Yeah. We believe that in FY 2026, I think now we are coming closer to that INR 3 million target that we had in mind as far as we possibly we are today.
Got it. Got it, sir. Yeah. That's all from my side and all the best.
Thank you.
Thank you. A reminder to all the participants, you may press star and one to ask a question. Next question is from the line of Harikumar, Individual Investor. Please go ahead.
Yeah. Regarding this government support from this currency depreciation and increase in fertilizer price, what is the support from the government, sir, as per new policy?
Government doesn't directly intervene in these subjects. The only thing they do is the current international prices and currency is factored into whenever they announce the NBS rates for the season, which is from 1st of April 2025. So we will get to see whenever they announce the next round of rates for NBS, maybe end of February or end of March.
Okay. That's all, sir. Thank you.
Thank you very much. Next follow-up question is from the line of S. Ramesh from Nirmal Bang. Please go ahead.
Thank you very much for the follow-up. So if you look at the base you already achieved for this year, FY 2025 and year to date, what is the kind of volume growth you can expect in point of sale of NPK DAP fertilizers next year?
I think we're doing well as far as cost is concerned. And the kind of level that we have, the ideal situation would be that we are able to do nine months or 10 months of primary sales that we end up doing, that gets converted to POS. And trying to restrict the non-POS component to two to three months at best, yeah.
So would that mean that range of maybe 3%-5%? I'm asking because this base is very high. So in terms of sales volume.
I think we will continue with this base. This base will be continued. And why is this base good today? It is good today because of the robust demand that we have seen in the farmer level right through. And the reservoir levels have been good, and there have been good agricultural activity that we have seen. So if this continues, this post-sale should not be a dampener for us at all, for sure. And we believe that these trends will be maintained.
On the Nano DAP, what's the percentage margin you are earning now? What is the kind of revenue target you are saying?
We were not able to hear your question completely. Can you repeat your question once again, please?
Can you hear me now?
Yes.
Yeah. Go ahead. Yeah.
Yeah. So on the nano- fertilizer sales, if you can give us the share of revenue for year to date, and what is the percentage margin, and what is the kind of growth you can expect in the next two to three years?
Let me tell you, I mean, these are early days as far as nano is concerned, so I think the revenue details, I'm sure Krishnan can share that with you, and profitability is not something that is very significant at this point of time. I mean, we would be kind of look at about 10%-15% margin, and because a lot of development activity, promotional activity is involved for nano.
Okay. And what will be the growth rate likely over the next two to three years?
Growth can be quite significant. I mean, when you're looking at, say, capacity available because of 2.5 million tons, I think we should be I mean, ideally speaking, at the end of this year, what we should see going forward would be maybe a substantial 40% growth from where we are today.
Thank you very much, and we're sold, Mr.
Thank you very much. As there are no further questions, I will now hand the conference over to the management for closing comments.
Yeah. Thank you all for joining the call today, and should you have any further questions, please don't hesitate to reach out to our IR team, and thank you, and have a good day.
Thank you very much. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Thank you.
Thank you.
Thank you.