Paradeep Phosphates Limited (PARADEEP) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Paradi Postways Limited Q1FI27 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 the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Manish Mahavad from Anti-Stock Broking Limited. Thank you, and over to you, sir.

Yes, thank you, Manav. I am pleased to host today's earning call of Paradis Prospect. We have leadership team represented by Mr. Rajin Nambiyar, Joint MD and CEO, Mr. Harsh Nip Singh, President and Commercial Officer, Chief Commercial Officer, Mr. Vijay Biswal, CFO, and Mr. Alok Asatena, Head Corporate Finance and IR on the call. Without further ado, I would like to hand over the call to Mr. Nambiyar for opening comment, post which we will open the floor for Q&A. Thank you, and over to you, Rajin, sir.

Thank you, Manish, and good morning to everyone who has participated in this call, and we welcome to Paradiv Limited's learning call for the quarter one. I appreciate your time and interest in your company. I trust you have seen our earnings presentation and first release, which have been circulated and are available on our website and stock exchange. Let me take an overview. I am happy to report that PPL has once again delivered a very strong financial and operational performance and the best-in-class EBITDA pertains. Many congratulations to all of you. Despite the prevailing global uncertainties led by the release crisis, which resulted in sharp escalation and volatility in raw material prices as well as availability, PPL delivered a very strong performance on the strength of its existing supply chain efficiency. Sourcing diversification strategy for key raw materials and pan-India marketplace selling and distribution capabilities. With this performance, the company has been able to further strengthen its leadership position in the phosphatic fertilization sector. In Q1, revenue from operations increased 36% YOY to 6124, 6124 crores, EBITDA rose 25% to 742 crores. TBT increased by 24% to 526 crores, and P80 stood at 393 crores. Save volume grew by 4% to 9.85 lakh ton, just close to a million ton sale. During the quarter, full benefit of expanded capabilities of sulfuric acid was available to us, due to which the sulfuric acid production was higher by 32% on a year-over-year basis. Phosphoric acid production was higher by 7% on a YOY, reflecting the strength of our backward integrations benefits in phosphoric acid and sulfuric acid and helped us to improve our quality of earnings. Our key expansion project of phosphoric acid expansion, that is phase 1 from 5 lakh ton to 7 lakh ton material, is on track. I am happy to report that the Board of APL in its Q1 meeting approved an investment proposal of 250 crores for setting up aluminium fluoride plant at our Faraday facility. The proposed investment aligns with company's strategic objective to enter and diversify into related industrial chemical space and will build and strengthen company's non-subsidy portfolio in due course. The proposed investment is a reinforcement of our manufacturing excellence capability by having a by-product converted into value-added products. These investments in specialty or industry chemicals will further augment our endeavour to create long-term value for our shareholders. Looking ahead, we remain in the challenging time amidst the Middle East situation, and we have seen high volatility and availability challenge for key raw materials and particularly sulphur. As you are aware, 70-75% of global trade of sulfur and ammonia across the state of Hormuz. The supply disruptions for these commodities are expected to continue in short term. Despite these uncertainties, industry is making concerted efforts and empowered committees comprising of government and senior industrial officials working in close coordination to ensure fertilizers security for the nation and the farmers. PPL remains committed to drive growth in its challenging time through focused operational discipline. Thank you once again. I now open the floor for questions.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have a first question from the line of. Prashant Biani from Ilara Securities, please go ahead.

Yes, thank you for the opportunity, and congratulations on great numbers. Rajiv, sir, for Q2, how are we placed on sourcing of raw materials? And whether at these prices of sulfur, are we willing to continue to buy and manufacture acid, or is it worthwhile now to buy acid and use it for manufacturing of fertilizers?

Thank you, Prashant. As you are aware, the prices have definitely gone up in the current situation. And we are constantly looking at the various opportunities were... We are able to bring efficiency into the supply chain. With the force acid and sulfur going up, there is a strain in our overall working philosophy, but I think we are also scouting from various sources, and some support extra coming out of the ammonia price reduction. We are hopeful that actually with the production getting today, to large extent we are able to operate around 70% of phosphatic capacity. But moving ahead, I am sure actually there will be some sort of added support which we expect from the government.

Prashant, just to share with you, we are also augmenting through imported DAP and NPKs. So we have a robust pipeline as far as the rabbi season is concerned, where we are augmenting our products through imported product lines.

Sure. Sir, on the AIF or aluminum fluoride side, if you can share some details regarding when the plant can be operational, how much would be the per ton realization and also EBITDA per ton?

Prashanth, what is the plant capacity is going to be around 15,000 tons per annum?

Yes, sir.

Okay. We expect at least a top line of 180 to 200 floors coming out of this facility. We are currently looking quite optimistic about getting this plan commissioned within 22 to 24 months. The basic engineering work is currently in progress, and we are also getting ready for the sourcing strategy, what is the right sourcing strategy for carbonic floor, right? As of today, looking at the market, we don't see major challenge in terms of a B2B sale and expecting at least 50 crores of EBITDA which is coming out of this.

Right. And lastly, before I jump back to the queue, sir, on the trading volume side, what was the traded DAP and NPK for this quarter?

Rishan, we will tell you the numbers.

We will just get back to Rishan, okay? Exactly.

Sure. I will jump back to the queue.

Thank you. We have our next question from the line of Riju from Antique Stock Broking. Please go ahead.

You know, uh...

Sorry to interrupt you, Raju. Your voice is breaking. Can you please move to a better reception area? Hello.

Reju, go ahead.

No, we can't hear you.

We please request you to rejoin the queue and come again for the questions. Thank you. We have our next question from the line of Aman Kothari from EQTest Investments. Please go ahead.

Thank you so much. Firstly, congratulations on the wonderful set of results. Sir, my first question would be around... Mix that we saw this quarter, we saw a 55% growth in DAF volumes and NPK volume degrowth of 9%. So why was NPK degrowth for the first quarter? And is it a mix that's going to be maintained going ahead for the full part of the year?

Good morning. I think two, three important things. The way you look at, yes, there is significant growth of DEP, and that is more like a tactical shift, because from a policy perspective, the profitability of DEP appears significantly better compared to the NPK. But as far as the market strategy is concerned, the focus of NPK continues. As far as farmer sales are concerned, we grew our NPK portfolio by 6%. So NPK farmer sales are up. But as a primary strategy, in line with the kind of optimizing profitability, we have focused more on the DEP and the Q1.

So, I'm going to take one.

Sorry to interrupt you, Aman, we are unable to hear you properly.

Hello, am I orginal now? So my question was, sir, NPK we saw a volume degrowth of 9%, but still you said the portfolio grew by 6%, so is it because of some price height that we took?

No, that is because of the farmer, the trade stocks, the poor sales grew by 6%. So that is one thing. So that growth as a farmer is maintained. Of course, we have taken a significant price increase in the NPK portfolio in order to maintain our profitability. So just to give you an example, a bag of DAP today sells at 1350 rupees a bag, whereas the complexes range from 2100 to 2500 rupees a bag. There is significant difference for a farmer because of the way the current policy is. So we have ensured that we pass on the increase partially to the customer, and we expect government also to address partially the cost increase which has happened. Got it.

I answered this last question before joining back in the queue is in terms of building our non-subsidized portfolio, aluminum fluoride is something that we are going up ahead with. But do you see that this aluminum fluoride would be catering to which industry? Like there's a clear demarcation between a lower grade and higher grade. So what is it that we are targeting?

Mainly, it is going to target the Orissa area where the aluminum industry is there, and we have done our study properly, and we feel, actually, being a strategic player in Orissa, we should be in a position, actually, to, without much greater difficulties, should be able to market it, entirely market it.

Got it. Thank you, sir. I just joined back in the queue.

Thank you. We have our next question from the line of Sukharith Patil from iSight FinTrade. Please go ahead.

Good afternoon to the team. First of all, congratulations on a good set of quarters. My first question to Mr. Nambia is, beyond the regular outlook, just want to understand what are the top two to three execution priorities you are focusing on in the next few quarters? And alongside that, what do you see as the biggest risk in demand shifts or competitive pressures? And how are you preparing to manage them while sustaining paradigm's position in fertilizer and in the fertilizer trade? Thank you.

If you look at it, one clear signal we are given in the quarter, one is there is a tactical shift towards profitable product is coming. We have got a long-term view in terms of NPK, which is very strong, and all the capacity of the nation, which is also going to happen, has got a huge thrust coming out of NPK. But we know this is unprecedented time in our business, which is coming out of the conflict in both Ukraine side as well as in Hormuz side. So we can't be just... Sticking to what exactly we're done. So this is a small-term tactical shift is going to come. We actually explore, actually, whichever the products we can manufacture. We are happy to report that actually we are one of the company who has got maximum product portfolio capability to manufacture in our facilities. So that definitely we will be leveraging it. And wherever the price advantage comes because of our supply chain logistics is quite strong in terms of the sourcing facility, we will be exploring various areas where we can optimize the supply chain. And coupled with our coming capacity expansion, both phosphoric acid as well as the big expansion, which is expected in 2930, These are the three to four areas we will be concentrating in the coming two to three quarters.

Thank you. My second question to Mr. Singh is, on the commercial side, what are the key priorities you are driving in terms of market expansion, pricing, and customer engagement, and what risk do you see in the distribution or regulatory framework, and how are you preparing to mitigate this? Thank you.

Good morning. So there are two, three priorities. One is from a future-looking priority as a market development. See, we are building up a portfolio of high-nutrient use action products. In the portfolio, which is our nano category, and we are growing significantly into that category. As far as the market is concerned, apart from the current supply chain rates, there is also a challenge as far as the monsoon was concerned. But however, July has been a good month for the rainfall. So, how are we trying to address the market requirement? Is it balancing between our NPK and DAP portfolio? DAP, you know, the demand remains quite robust because of the price point which the government has kept per bag of DAP. And we are, if you see our growth, both the farmer sales and the primary sales, we had a significant growth. And if you look at the farmer sales, I think the industry growth of Fosfidec, DEP, and NPK has been around 1%. And we as a company, we have grown around 15-16%. So we maintain our leadership position. As far as market is concerned, we also maintain our leadership position as far as product pricing is concerned. So, we are very conscious that we are going to drive growth, which is profitable. So, that's how our market start leaves today, Gaman.

Thank you, and best wishes.

Thank you. We have our next question from the line of Riju from Anti-Stock Broking. Please go ahead.

Yeah, hi, sir. I hope I'm audible now. So, my question is regarding the sales volume that you have reported. So, in the PPT slide 4, we have seen that the total fertilizer volume is 9.85 lakh ton, right? But if we calculate the... So product-based detail, that is DAP, NPK, UDR, PSP, and MOP, the count is coming at roughly around 10.03 lakh tons. So just want to understand the math here.

No, I think you would have counted the Zipmite sales probably into it. So if you consider the DAP, NPK, MOP, that is around 9.85 lakh metric ton. But if you also consider the Zipmite, which is a soil conditioner, then you write it's a million ton. So that's around 15,000 tons of Zipmite sales. If you add both of them, it will be a million.

Understood, sir.

Understood. Understood.

And, sir, in terms of, you know, the sulfur, like sulfuric acid capacity that we have right now, the excess capacity, so how are we selling that? I think we might be selling it to outside. So, like, how much additional levita that we can make from that sulfuric acid by selling to the outside as of now?

Right now, you know, we are completely utilized, you know, this sulfuric acid capacity, you know, we are not selling outside right now. So, entire thing is, you know, consumed by our fertilizer facilities.

No, sir. My question is regarding, like, we have expanded the sulfuric acid capacity from 1.42 to 2 million metric ton, right? And the fourth acid capacity that will come in the 2Q of F27. So the excess sulfuric acid capacity, how are you utilizing that?

I will explain you. Basically, we don't have any excess capacity of sulfuric acid in Paradeep. Even if it happens, it could be some fluctuations on a short-term duration might be happening. But if you look at it, sulfuric acid we are using not only for the phosphoric acid production, also N20 being sulfur-dominated product. So a lot of amount of sulfur goes there also. So as in today, if you ask me, actually, we don't have an excess kind of a capacity on a sustainable basis in Paradeep. But obviously, there's some smaller quantity here and there. We might be trading, but it's not a significant thing at all.

Understood, sir. And in terms of the power generation, the co-power generation from sulfur to sulfuric acid, are we selling any excess power to the grid as of now, in this quarter, maybe in last quarter?

Last quarter, we have sold at the beginning, but then because of the... We have not done much, but the facility is available for us.

Understood. And one last thing in terms of the urea. So, the Goa urea facility, I think the G-Cal improvement happened in the last quarter. So, how much EBITDA return that we have been able to achieve this quarter? And also in terms of MCFL urea plant, so the EBITDA, the benefit that we are getting as per the old policy, that might have expired in last year. So, how we should look at in terms of the M-SQL plant as well for urea?

Yeah, regarding the Urea policy, I think it has been notified, the new Urea policy has been notified yesterday. So, we are evaluating that policy. But, you know, if you look at the policy and, you know, vis-a-vis the energy benchmark, what we have right now, in Goa, the impact will be around 1,500 rupees per metric term, positive. And, you know, there will be a, you know, reduction in Mangalore of around 700 to 800 rupees per metric ton, based on the new Urea for, you know, energy policy. And this energy improvement, what we are talking, we have invested and we have, this has been completed and it has been capitalized and put to, you know, it has started, you know, this, getting the benefit from this year, this quarter. So, energy has been reduced by 0.2 gcal, you know, on a, you know, urea production basis for this year.

So, sir, acute benefit in terms of EBITDA for that?

No, therefore, you know, 0.2 means, you know, right now, you know, this, due to this energy impact, it will be 1,000 rupees for metric.

Okay. So, over a normalized basis, can you expect that it might have improved by roughly around 7 to 8 hundred rupees per turn and gave it the level for Goa Udia?

At the Q1, yes, you can assume.

Understood, sir. And thanks for clarifying all my questions. Okay.

Thank you. We have our next question from the line of Vatsodha from Tiny Triathlon Managers. Please go ahead.

My origin, hello. Hello.

Yes, sir, we can hear you.

Thank you, and first of all, thank you for the opportunity. My question is like, over the medium or long term, what percentage of EBITDA do you believe will come from non-subsidary business such as industrial chemicals?

We continue to focus on fertilizer, as we said earlier, and the sustainable ability guidance that we give is 5,000 rupees at the moment, which when we complete our backward integration, everything should be improved by 30 to 35 percent. As far as the non-subsidy portion is concerned, I think that will take some time to evolve. And over the period of time, the long-term vision is that at least 20 percent of the ability should be supported through non-subsidy. But that's a long-term target that we have kept for ourselves.

Water, water, thank you so much.

Thank you. We have our next question from the line of Madhur Rathi from Counter-Cyclical Investments. Please go ahead.

Sir, thank you so much for the opportunity. Sir, I wanted to understand currently how much of raw material for this aluminium fluoride, the FSA, is currently produced in-house, and what are we doing to that? Are we selling it outside, or are we incurring some effluent treatment charges for, because, if you could help us understand our doctrine.

Currently, we are producing around 9,000 to 10,000 tons per annum, and all these quantities are sold to outside parties. The whole context of our investment is actually how do we make sure that we get the value, much higher value from what we've been selling as a raw material to other parties.

And sir, if you could help us understand, because it seems that this product is very critical to aluminium smelters. So how is the criticality of this product? And sir, have the validation started for this product? Or will there be a gestation period post the 24-month commissioning of this plant?

That's good. This is basically a... We are just starting, actually, the board has given a go-ahead, and we have just started the engineering. So engineering, construction, and commissioning should be 22 to 24 months, and we don't see any challenge in terms of the marketability or sellability of this product.

And I thought it was getting sold. And just to add to Mr. Nambia, a lot of work has gone in background before we took it to the board, so everything is established. We just need to complete the project in the next 24 months and get it rolling.

And also to your understanding, there's a lot of import happening in this particular product. So with this, we should be able to make sure that the Indian manufacturing setup is able to complement and reduce the import of aluminum fluoride.

Yes, sir. So, my question was similar. On similar lines, because of all these imports are of course different specifications versus what it would be that Paradi phosphate would manufacture. So, will it require some gestation period with the smelting customers for testing out our product and then where is it?

No, it won't be. It won't require any gestation period.

Yes, it will be marketed.

Got it. And sir, how much capacity can we increase? Because we are manufacturing 10,000 metric tons of FSA, so how much can we extend this 15,000 metric tons of capacity to?

15,000 metric tons. We are currently designing 15. Why 15 is because the extended capacity we are expecting within two years. We should be in a position actually to utilize entire hydrofluorosilic acid to aluminum fluoride. Okay, got it.

Sir, that was for a moment. Thank you so much and all of us.

Thank you, thank you.

Thank you. We have our next question from the line of Dhruv Muchal from HTSC ANT. Please go ahead.

Yes, sir. Thank you. A few questions. Firstly, on the traded, can you share the traded volumes this quarter, X of UDR?

Yeah, the traded volumes that you've done is total 1.25 lakh metric, including the MOP, DSP, DAP. The major imports which are coming, the arrivals are happening in July, August and September. We have almost secured around half a million tons of imports for the Rabi season.

Now, what we're seeing right now, for example, the shift in a higher sales of DAP and relatively lower sales of NPK. I'm just trying to understand how does this work in the market? As a structural strategy, it is the market wants to shift towards NPK. I mean, it seems that's the push given the better profitability and also better farm economics, probably better for the farmer. But this, you know, raw material supply chain issues, the common policy reactions and all those creates this disruption. So I'm just trying to understand, say, for example, the farmer shifting to DAP today was an NPK buyer earlier. How soon does he come back to NPK if the price is normalized? I mean, what kind of resistance does that happen? Because these kind of policies, then otherwise you have these disruptions and the movement towards NPK then probably becomes slow. So I'm just trying to understand how does this move and how do you see this?

So, two, three things, I think. First is fundamental, see, the entire market development effort and our farmer engagement effort is to create awareness of the battle fertilization, which is basically phosphorus, potash, micronutents, and even organic carbon, which is very essential from the ecosystem context. As far as the short-term context is concerned, see, farmer, we've done most of our awareness campaigns shifting him from conventional straight, let's say, DEP fertilizer to a NPK mix. Currently, you know, the difference is quite stark between NPK prices and the DP prices, and hence the farmer shift, which is there. But a lot of farmers, especially in South India, where their awareness levels are much higher, they still continue using the NPK portfolio. And we see still NPK as a dominant category. But yes, as far as the current season is concerned, and maybe Rabi, as long as the Uria and DAP prices are held at a special price for the farmers, you will see a shift happening as sort of uptake of DAP is concerned. But I don't see that as a fundamental concern from an overall strategy perspective, because farmers are aware about the use of the balanced fertilization. And if you look at even a fertilizer like potash, where the government support is very minimal, and the prices are almost as high as 2,200 rupees at back, so very aware farmers for cash jobs are still using potash, so the price is quite high.

All right. I was just wondering from the pace of, you know, shift towards NPK, does it slow it down, or the movement can be back again quickly?

Yeah, it will be back again quickly if the price equation is addressed. See, as long as the DAP and NPK are within the price range of 200 will be the back, I think the shift can happen very quickly. Currently, it's quite stark. Almost 1,000 will be the back difference now.

The other question was on the expansion plan. Any change in plans given what is happening or that remains on track? Because I believe last time when we spoke in the call, you mentioned the equipment ordering is pending. So I'm just trying to understand where are we there.

Okay, Draugav, if you see none of the plans are getting changed because of the short-term turbulence that you're experiencing, that's good news for all of us. And second thing is the force acid expansion, what earlier we said is about 5 lakh to 6 lakh will become a reality by this December. And the 6 to 7 is also going to happen mostly by August, September next year.

So current related

to the bigger expansion of the 3 lakh ton of force acid as well as sulfuric acid. That's also going on as per what we have planned. So, almost here in the final commercial discussion is going on. So, all those expansion projects are going in a normal way, respective of what's happening around us.

Thank you so much. Thank you.

Thank you. We have our next question from Linos. So, Amil Chia from Paris Investments. Please go ahead.

Hi, thanks for the opportunity. Sir, I wanted to ask, last quarter EBITDA burden was somewhere around 5,300. So what is the EBITDA burden in this quarter? And have we started seeing benefits of the back-end integration?

This quarter EBITDA is around 7,000 rupees per metric. And in the last quarter, you know, last year, in the same quarter, it was around 6,500. This increase is mainly on account of the stock, you know, what we have got at the beginning of this year. So, that has really played out and, you know, this has given this increase in the EBITDA margin.

Also, if you look at it, our backward integration of sulfuric acid, which is happening in both Mangalur as well as Paradeep. Both are actually running, they were running the full stream. So, coupled with the inventory, which we had able to harness. Within our system, in terms of inventory, coupled with the backward integration, start coming up.

Okay, okay. And so, can this 7000 range sustain for the current quarter as well?

No. No, we feel actually a realistic EBITDA for a year could be around 5000 to 5000. Once we complete our expansion projects, what I explained earlier, we should be in a position to have a sustainable 7000 plus. It could come in phases actually, you can take it as two to two and a half years.

And just one follow-up, you alluded to the previous participant that our post-acid plant's incremental capacity from 5-lec to 6-lec tons will be by when?

By this December.

Okay, okay. And what is the current capacity utilization for this plant?

This is almost 100%.

Okay. Okay. So we are confident of achieving 1 lakh exceptional by Q4 of this year? Yeah.

Yeah. Yeah. Yeah. The execution is already going on. Equipments are also ordered and started getting equipments.

Okay, that's it from my side. Thank you and all of you guys. Thank you.

Thank you. We have our next question from the line of Dave Kulwani from KRPMS. Please go ahead.

Thank you for the opportunity, sir. So, despite industry phosphatid fertilizer volume being flat this quarter, the company is able to grow 13% volume by over. What is the company doing different than peers that we are able to gain this market?

So, if you look at the overall market strategy, we focused in North, East, West and South in a very balanced way. So, we are very strong in West and South, but the overall strategy is to have a kind of balance across the key markets of India. That gives us an advantage, especially when there is a demand effect because of every scenario. That's one strength. Second is a lot of market development efforts as far as the brand is concerned. So Jai Kisan Navratna and Jai Kisan Mangla are strong brands and enjoy a lot of trust with the farmers. So that gives us an advantage as far as the optics and the pause is concerned. So these are two fundamental things that we do. And our portfolio also, we have kept the flexibility between organizing the range of portfolios. So it's URIA, DAP, NPK. So the complete mix is available in terms of solutions to the comma. So that gives the edge to the comma.

And how OCP is helping in securing raw material during this current tough situation?

That is one of the key strengths compared to many other players. So we don't face any serious issue or any issue at all in terms of our rock availability, that also in much superior quality rock availability. And acid also. The rock and acid to large extent, at least, we don't have any major issue other than some smaller supply chain issue which has come up. But I think overall, because of very good planning of raw materials, we have been able to create that uncertainty to our strength.

Okay. And with long-term view of non-subsidy business contributing 20%, so after FB29, we can see capital allocation shift towards other industrial chemicals, right?

Yes, of course, actually. Obviously, backward integration is the current thrust for us, and entering into speciality chemical dose area, but I'm sure the current ALFG project is only beginning, and we are seriously thinking in what else we should be able to do it. This is the shift actually which is really coming.

And last question, do we produce enough hydrofluoro-stilistic acid to cater to 15,000 nitric ton per annum aluminum product? Thank you.

Thank you. We have our next question from the line of Prashant Biani from Inara Securities. Please go ahead.

Harvik sir, you are alluding to a higher trading volume that we plan to do in Rabi. Can you elaborate on that? What are your plans?

So, what we are trying, Shant, is to augment partly imported EV. That's more something the government also wanted to ensure so that the country's supply chain will maintain. So, we will be doing some complex fertilizer also, which we are importing, like NPK. And DAP and TSP. TSP has also been a product from a long-term perspective. We're trying to build a portfolio of a high-phosphate fertilizer with lower nitrogen. So between BAP, ESC, and NPK, and of course, we have also this year put a lot of thirst on ammonium sulfate, which is a good source of nitrogen and sulfur, and the government wanted us to encourage that it will also make source of nitrogen and sulfur. So that's the portfolio of traded products that we're doing.

Sir, last year, Rabi season, our trading volume was around 2,70,000, if I'm not wrong. How much could this year be at?

Well, I think we're not giving a forward guidance on the exact numbers as of now, but it will be significantly higher. That's what I can tell you. And like I told you, we almost secured a kind of half a million tons of imports as far as the trade products are concerned. Which will help us from both Q2 and Q3, right up to December.

Sir, how much is DAP trading volume in Q1 and last year Q1?

So, this year, in the Q1, the DAP traded volumes have been less. So, that's just been around some thousand-odd tons. TSP, we did around 24,000 tons, and ammonium has hit 22,000. Last year, we have not done any. DAP was just 1,000 tons in the first quarter, because we did have a lot of manufactured the DAP.

On the subsidy side, how much is the outstanding subsidy, and how much have we received in Q1?

This subsidy right now, as on 30th June, the outstanding is around 4,600 crore. And during this year, we have received a subsidy of this quarter from around 2,650 crore.

And, sir, how much is the gross debt currently?

Sorry? Gross debt.

Gross debt. So, 6,000, just as a debt, you know. 6,500.

Thank you very much. Yeah.

Thank you. We have our next question from the line of Manish Mahawal from Antique Stock Broking. Please go ahead.

Yeah, hi, sir. Just in terms of a KPEX timeline, right, you said a 4-6-8, a 2-leck turn, right, which is 5-7. Out of that, 1-leck is coming by December, 1-1 is next August, right? You are saying 27. Yes, Manish. Okay, earlier it was a timeline, I believe it was H2 of this year, right? I think PI at Q3 or so, or it has got delayed. Am I missing something in terms of timeline?

It is the same timeline.

Okay, and second thing is CAPEX, which is a bigger CAPEX, what we have announced earlier, right? 3500 or 3600 of CAPEX. What is the timeline of that and whether it will come in stages or it will come in one shot?

It will come in one shot actually, they said it will be 2019. Thank you.

Okay, so what is the timeline for that start?

Yeah, it will be around 29.30 at the beginning.

29, so should we, 29.30 in a sense, FI 29 we should assume or?

We have a larger project, so generally there may be some here and there. It will be like second quarter of the continent.

Okay, I understand. And in terms of when you said that traded just for this year particularly, when you said a DAP, we have done doing a lot of imports and we wanted to have a DAP. Does it mean basically the manufacture volume will be lower in this year itself and total volume will grow and definitely manufacture will come down and your trade will offset that? That's the right understanding?

See, what we are trying to do is, we are trying to optimize the market requirements, and you know, this is a year where there are disruptions, and it would not be appropriate to put volume to volume comparison just for the sake of volume. What you are trying to do is create stakeholder value. So, you're trying to augment between the manufactured and the imported volume, so there's market share in the market, and we will be producing at the plant, but we will not like to produce if the raw material prices are too steep, and if there are supply chain disruptions because of the wall.

So, any cottage in the production will be made good by this, you know, trading. Trading. So, overall, you know, there will be no decrease in the sales and other things.

Understood. And last one, sir, in terms of EBITDA per ton, right, because we did a very good in terms of first quarter and that has some benefit of a low-cost inventory what we have earlier, right? Considering current RM cost in terms of all the 3-4 RM what we have and currency rates, what could be the EBITDA per ton? We are able to make a very shortfall of 5,000 rupees. How do you mitigate or any thinking towards the government additional subsidy we expect?

So, Manish, I think it's an evolving situation with both the state of government and industry, but with the kind of interaction we are having, we continue to say that, you know, we should have a sustainable EBITDA of 5,000 rupees per term. I think that's the number we are looking at the end of this year, and hopefully, you know, with all the coordination that is happening, we should be able to cross that number.

Okay, understood. Sure.

Okay, thanks. Thank you. We have our next question from the line of Aman Kothari from Inquitas Investments. Please go ahead. I'm an idea. No, I'm on your voice and speaking. We still can't hear you. We'll move on to the next participant. We have a next question from the line of Ignesh Ayer from Sequin Investments. Please go ahead.

Thank you for the opportunity. I just wanted to understand what was our average landed cost of Sulphur in Q1 FY27, and what is the price like now? I mean, can you just give us, if you could share the comparison for the Sulphur prices?

So, Sulphur has moved quite between Q1, and the price is now, as we speak, today is $1,000 plus. As far as the sourcing is concerned, I think it will not be prudent for us to give that number because it's commercially sensitive. But it has been competitive vis-a-vis global benchmarks.

The current price is what you're saying. It is around $1,000, right?

$1,000 plus, yeah, $1,000 plus.

And what would this price be like in quarter one, I mean, on an average, if you could say?

Quarter one average was around $800, $850.

Okay, perfect. And can you share the same for Sulfuric Acid?

Sulfuric Acid right from the price is around 350 dollars.

Okay. And the quarter one?

The quarter one we have not purchased most of Sulfuric Acid because we have this, you know, Sulfuric Acid capacity 100% utilized. So, but, you know, as you ask that what is the price, you know, I'm saying that right now, the cryptocurrency price is around

350 to 370 dollars.

Okay. So, and what percentage of our procurement is, in Q4 1, FI 27 specifically, what percentage of our procurement was due to the long-term contract that, or long-term arrangement that we have, you know, entered in with Sulfur, you know, suppliers, and what percentage was on spot basis?

Currently, we don't have any specific long-term arrangement for sulfur because of fluctuations. On both sides, it's happening on the spot basis only now.

Okay. Got it, sir. That's all for my thanks. Thank you.

Thank you. We have our next question from the line of Kush from KRPMS. Please go ahead.

Hello. My question will have been answered. Thank you.

Thank you. We have our next question from the line of. Sandeep Mukherjee from SKP Securities. Please go ahead.

Sir, thanks for taking my question. Sir, what was the production volumes

of DAP, NPK, and UREA for this part?

Hindi, we will come back to you at least. The overall, if you look at the production, the Q1 was 7.66 lakhs. And urea is around 2 lakh tons, remaining we can take it.

Good. Good, like kind of DAP.

Thank you. We have our next question from the line of Archie Tagarwal from Step 8 Capital. Please go ahead.

Hello.

Yeah, yeah. Achit, you need to speak a bit louder.

Hello.

Yes, please go ahead with the question.

Yeah. So my question is, so last part of the management guide is that working capital builds up both inventory and subsidy receivable, largely unwind in Q1 FI27, leading to normalization of operating cash flow and lower borrowing. So could you share the actual progress, how much inventory has been decorated and how much subsidy has been received, and is operating cash flow positive?

Yeah, you know, so last, you know, what we have told that last quarter we have additional inventory which has been liquidated this quarter, and that has occurred well for us. And during this, you know, evolving situation, and this, if you look at the last year, you know, last quarter, you know, this quarter inventory, there is a growth, there is a increase in the inventory, mainly on account of the trading volume, what we are talking. But otherwise, this raw material and finished goods, there is a reduction, and even the data will have reduced from around 700 tours on an overall basis. And the cash flow is also positive from operations.

Just to kind of also augment, see the cash flow has been both robust as far as the market is concerned. We had a 43% growth in cash flow from the market, and even the subsidy collection was 22% higher than last year for the same period. So we've had a robust cash flow, which has helped the overall situation.

Okay, okay. And you have mentioned like 2,600 crore subsidiary received in this quarter.

Yes.

Okay. Yeah, that's all. Thank you.

Thank you. We have our next question from the line of Aman Kothari from EQTest Investments. Please go ahead.

Hello. So, this year we were in the phase of demodelnutting and expanding our granulation capacity. So, when can we see us reaching from 3.7 to 4 this year?

The demodelnutting is actually expected by again December. Okay. The contract is already awarded. It is going in full soon.

Next, I will... And for the rest of the year going forward, as you talked upon that the traded volumes would be significantly higher as compared to the last year. So, we would see a margin impact this year going forward, considering trading volumes would be higher.

No, overall, I think we continue to maintain that EBITDA per turn at the company level and because, you know, we are... There are a lot of supply chain efficiencies that have been brought into the system. So, overall, we don't think that there is a pressure on EBITDA pertains below the guidance that we have talked about.

Okay. And I think in terms of... I think you've touched upon the product mix going forward, but my question there just still remains, sir, that in terms of MPK market, what do you see, apart from the price difference, could be a value unlocker for us, considering we are the industry leader, both in terms of volumes also and pricing going forward?

Could you just clarify what exactly is the concern that you have?

The idea is to understand what would drive the NPK adoption going forward, just apart from the price difference that's currently there.

So there are two, three fundamental drivers. One is kind of really awareness coming with respect to a farmer in terms of understanding his soil health. And where he is able to understand that there is a need for him to have a sustainable agriculture, both in terms of applying organic carbon and balanced nutrients, both in terms of nitrogen, phosphorus and potash. You know, we have a challenge of overuse of nitrogen in the country. So a significant subsidy and the application of the farmer happens is nitrogen and urea. But we see a robust play for both NPK fertilizers going forward because a lot of awareness has happened and farmers today feel they are getting better results. As far as productivity is concerned, when the use of balance portfolio. So if you look at it, last year, the market was around, you know, We are approximately at 24 million tons of phosphates, out of which DAP is around 10 and the NPK is around 14 million tons. And out of 14 million tons, the robust NPK grade where your company is like a leader is 2020-013, which happens to be around 6 to 7 million tons. So, we still feel that's a very promising grade, because there is sulfur deficiency in the soil, and that's a very, very good fertilizer for the farmer. But today, the price difference is there, which I think is a short-term thing. I don't see that sustaining. The moment, I think, the government removes the cap on MRP for DAP, I think the portfolio will get balanced.

Sorry to interrupt, Aman. We are unable to hear. Your voice is cracking.

My question was, is there any possibility for the pricing to be used as pricing and to be moved on?

That's yours to ask. Maybe the... The political people, but I mean, currently it doesn't seem in the short term, but I think somewhere going forward, it should get at least removed. That's how we look at it. But not in the short term.

I am sorry to touch upon this too.

Sorry to interrupt, Amman. We are unable to hear you.

Hello.

Hello, Aman.

Hello. Hello.

Yes, now we can hear you. Sorry, but we are unable to hear you. We can't get you a one. I'm an idea. Ladies and gentlemen, that was the last question of the day. I now hand the conference over to management for closing comments. Over to you, sir.

Thank you, dear investors, in taking time to join our earnings call. In case you have any further questions, we'll be very pleased to address them through our investor relations team. And thank you once again, and have a good afternoon. Thank you.

Thank you.

Thank you. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.