Chambal Fertilizers & Chemicals Limited (CHAMBLFERT) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the Chambal Fertilizers and Chemicals Limited Q4FI26 Earnings Conference Call, hosted by Valoram Advisors. 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 touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorium Advisors. Thank you and over to you, ma'am.

Thank you. Good morning, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorium Advisors. We represent the Investor Relations of Chambal Fertilizer and Chemicals Limited. On behalf of the company and Valorum Advisors, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risk and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decision. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhay Vejal, Managing Director, Mr. Narendra Goyal, Business Head, Manufacturing Operations, Mr. Anuj Jain, Chief Financial Officer, Mr. Ashish Srivastav, Vice President, Sales and Marketing, Mr. Tritip Bharat, Vice President, Legal and Company Secretary, And Mr. Vivek Mishra, Business Head of Dan. Without any delay, I request Mr. Abhay to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purwange, and good morning, everyone. Thank you for joining us in this conference call to discuss our fourth quarter and financial year ended 2026. The Indian fertilizer industry faced a challenging environment in 2026, marked by global geopolitical uncertainties, elevated energy prices. Volatility in key raw material markets. India's agriculture fundamentals remain resilient, supported by a favorable southwest monsoon at 108% of the long period average, healthy reservoir levels at 126% of normal, and strop crop sowing activity across both Karif and Ravi seasons. Kari Beckerage stood at 112 million hectares and Ravi sowing at around 68 million hectares, resulting in record food brain production of nearly 348 million tons. The Indian agriculture sector grew around 2.4 percent in FY26, despite uneven climatic conditions. India achieved a record fertilizer production of 503 lakh metric tons during FY26. Thank you. It stood at around 200 lakh metric tons, equivalent to about 51 percent of seasonal requirement as compared to the normal level of 33 percent, supported by strong, advanced stocking and efficient logistics management. During Q4 FY26, geopolitical tensions in West Asia led to sharp volatility in global fertilizer and energy markets. India continues to remain dependent on imports for key raw materials such as LNG, ammonia, and sulfur. During the quarter, disruptions in supplies for Middle East resulted in volatility in availability and pricing across the industry. For instance, ammonia prices increased sharply to about $850 to $900 per ton, while sulfur prices also increased from $900 to $950 per ton. Elevated LNG prices further pressured input economics for the industry. Given India's import dependence for key raw materials, the sector faced higher sourcing costs, supply disruptions, and logistics constraints during the quarter. Although the government raised the NBS subsidy rates upwards by about 10 percent, industry margins would remain under pressure due to high raw materials and costs in rupee deposits. During the quarter, the government also took measures to prioritize gas availability for domestic urea manufacturers. Thank you. As well, companies increased diversified sourcing across Southeast Asia, Africa, Canada, Russia, and China to reduce supply chain risk and improve sourcing security. From an agricultural perspective, the year remained broadly favorable. Reservoir levels across key agricultural states remained healthy and supported strong crop-sowing activities, both Karif and Rabi seasons. Rabbi Akaraj witnessed healthy growth. Led by wheat, pulses, and oil seeds, while early indicators for the upcoming curry season also remain encouraging. Rural demand trends remain to remain supportive for fertilizer consumption across regions. With this backdrop, let me move to our operational and financial performance for the fourth quarter for Holyoke 26. Our crop protection, chemicals, and specialty nutrients business delivered another year of strong growth during FY26. Driven by higher market penetration, expanding product portfolio and improved contribution from well-yarded offerings. Business continued to witness strong growth in both revenues and margins, with contribution increasing by around 27% value-wide. During FY26, we launched 17 new products, spawning herbicides, fungicides, and insecticides, hindering our presence across Key crop segments and geography also continued to build healthy innovation pipeline with 14 new crop protection products and one specialty nutrient product planned for FY27. The biological business continued to scale up well with robust increase of about 30 percent in volumes and 57 percent growth in revenues, reflecting increased farmer adoption of sustainable agricultural solutions. Uttam Pranam, our biogenic nanophosphorus product introduced in Q1-FY25, witnessed significant increase in contribution during FY26. The product is developed through a biogenic process and contains 10% P2O5 with encapsulated biomolecules such as polysaccharides and lipoproteins. Two of our biogenic products, Uttam Superisa and Uttam Pranam, have now covered almost 3 million acres since launch. Supported by increasing awareness and field level demonstrations, during the year, we also introduced a water-soluble variant, powder variant of Chamsupurayga, targeted at precision farming, drip irrigation, and high-value crops. Further extending the portfolio, we have launched four new biological products across fungicide and nematicide categories during the year. Additionally, we partnered with Terry to establish the CFC at Terry Center of Excellence for Advanced and Sustainable Agricultural Solutions, which will focus on research and development of next generation agricultural technologies. Coming to our seed business, we expanded our portfolio during FY26 with the introduction of new products across wheat, maize, mustard, and bajra categories. The initial farmer response and field performance have been very encouraging, and we... Continue to strengthen our portfolio. The coming year will be increased emphasis on cereal and research varieties. Our bulk fertilizers business delivered a robust performance during FY26, despite a volatile Sorry to interrupt in between, sir.

If you're speaking, you're not audible. Sorry to interrupt again. Sir, you're not audible. Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we join them back. Ladies and gentlemen, the line for the management has been connected. Over to you, sir.

Coming to our seed business, we expanded our portfolio during FY26 with the introduction of new products across wheat, maize, mustard, and bajra categories. The initial farmer response and field performance have been very encouraging, and we continue to strengthen our product portfolio. The coming year, we will be seeing increased emphasis on cereal and research varieties. Our bulk fertilizers delivered a robust performance during FY26 despite global volatile Thank you. Thank you. The Chambal Uttam Krishak Mitra app crossed 100,000 downloads during the year, reflecting growing farmer participation and engagement. We also conducted multiple digital knowledge sessions, product awareness campaigns, and farmer education initiatives aimed at approving outreach and strengthening connect with the farming community. Our technical ammonium nitrate project has significant progress during FY26 and has now entered the commissioning phase. Dry runs for the weak nitric acid plant have commenced, and subsequent commissioning activities for downstream tan, including ANS melt and HDM products, are also underway. The project is being developed using state-of-the-art technology from Casale, Switzerland, and has a capacity of 240,000 metric tons per annum, representing Chambal's strategic entry into industrial mining chemicals, marking another important step in the company's growth trajectory. The initiative is aligned with India's broader focus on Atmanir Barbarat domestic manufacturing, infrastructure development, and energy security, while also creating a new long-term growth avenue for the company. Finally, let me walk you through the details of the financial performance for the period under review. On a stand-alone basis, the fourth quarter financial year 2026, revenue from operations grew 14 percent, year-on-year to about 2,785 crores, EBITDA for the quarters. For the financial year as a whole, under 2026, standalone revenue operations increased 25% year-on-year to 20,794 crores. AVIDA rose 8% year-on-year to 2,679 crores, with AVIDA margins at about 12.88%. Profit after tax for the period grew 18% year-on-year to 1,950 crores, with part margins at 9.38%. Subsidy receivables and subsidy flows, we received a subsidy of around 2,048 crores during the quarter as compared to 1,592 crores. In the corresponding quarter last year, during FY26, our subsidy receipts stood at approximately 12,276 crores, broadly in line with 11,945 crores received in the same period during last year. As of 31st March 2026, total receivables stood at about 2,075 crores, comprising market debtors of 121 crores and subsidy receivables of 1,954 crores. Coming to segmental performance, Urea segment delivered stable performance. Urea revenues in the quarter came in about 2,432 crores, an increase of 8%. EBIT margins improved significantly to about 7.83%. Sales volume was marginally higher at 6.72 lakh metric tons as compared to 6.3 lakh metric tons in the same quarter. During FY26, we saw a minor decline in the Urea segment. At around, revenue being 12,566 crores, lower by 5%, while EBIT margins remain steady at 14.6%. The sales volumes declined 2% to stand at 34.06 lakh metric tons as compared to 34.7 lakh metric tons last year. In the complex fertilizer segment, revenues increased significantly to above 323 crores this quarter, reflecting year-on-year an increase of 94%. And sales volume also rolls. Thank you. During FY26, as compared to 5.64 lakh metric tons, led by strong growth in DAP, DSP, and NPK fertilizers. Avid margins stood at around 4% during FY26. The CPC speciality nutrients and seed segment witnessed the decline in performance. In this quarter, revenues lowered by 21% year-on-year. Our Avid margins remained healthy. For FY26, this segment delivered strong performance revenues increasing by 30% year-on-year to 1,203 crores as compared to 926 crores in FY25, when EBIT margins remain healthy at around 23.5%. Our joint venture, Emacid, is performing well. The increase in P205 production capacity from 5 lakh metric tons to 7 is expected to be implemented in December 26. Thank you. It is also being increased, which is expected to be implemented a year ahead in FY27. Board of Directors has recommended a finite dividend of Rs. 6 per share, totaling Rs. 11 per equity share for FY26. Overall, FY26 reflected resilient execution across our core and value-added businesses. Thank you. Progress in technical ammonium nitrate project, continued investment in sustainable agriculture solutions, further strengthen the diversification and long-term growth profile of our operating portfolio. With this, I would like to hand back to the moderator and open for question and answer set. Thank 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 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star, then 2. Participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and 1 to ask a question. We will take the first question from the line of Aman Kothari from Aquitas Investments. Please go ahead.

Yeah. Am I audible? Hello.

Yes, you are audible.

Yeah. So firstly, congratulations, sir, on the wonderful set of results. Sir, the first question that I have is, I think the last time we talked, you said the gas costs were about 20. Can you give us an idea what the current gas costs are looking like for the first quarter?

They will be around the same number. We are still in the midst of the quarter. Currently, what I understand, it is 18 plus, 18 and a half plus. It may be around the same number.

And, sir, we have seen a jump in receivables. So, I think we have reached almost from $367 to $2,075 receivables. And we have also seen an increase in short-term borrowing. So, can you give us an idea on what those are?

Yes, these are some short-term, as far as short-term borrowing are concerned. The company is more or less on a stable keel as far as finances are concerned, as you know. As far as the increase in receivables are concerned, we have a process called escalation and de-escalation. Sometimes what happens is that the government has compensated us on a base of a higher gas number, so that continues when we are actually consuming at a lower cost, then you tend to accumulate cash because you get more subsidies than what... I am very hopeful that the government will look at this very favorably.

But sir, if we see the gas price is elevated for the rest of the year, do you think that this could be a problem that could pop up and continue probably from the end of the year?

See, there is a cycle for about, first of all, there is a, what they give is a provisional price for the previous. What we are going to tell them, in fact, what the industry is continuously telling them is that there has been a dollar increase, a gas price increase. So can you give us interim relief pending final calculations, which I think they are very sympathetic to hearing too. So that's what we are hopeful that we will be able to manage this issue.

Right now, I think we're all aware that the government is running a bit thin on its reserves. Today, we saw the petrol and diesel price increase. We've seen the other, you know, expenditures that they'll have to make in terms of phosphating and for urea also. So, do you think that a situation like the last time we had this in 2022-23 could arrive, let's say, in terms of receiving? Got it. So, for the TAN, I think 30th April is the commissioning and I think you gave the update on the same. So, at this current year, do you see the capacity reaching to 75-80% that we could have done in a year?

Yes, definitely. Mr. Narendra Goyal has promised me that by all means he will reach 75-80%. That is his commitment to me. So, it is his commitment to me, and I am sure that he will meet that commitment.

I am sure, sir, you are aware that TAN prices are up by 40%. We have had Russia also pulling up from putting a curb on the TAN exports to India.

We keep a tab of what's happening in the market. Mr. Mishra gives me a daily report on what the daily price is.

Got it. And so, just last question. So, this year we had a very good growth in terms of complex fertilizers, particularly DAP, NPK, and TSP. So, do you think in this year, in terms of volumes, did you see that we'll be able to deliver a growth on this? Because there will be limited availability, let's say you said, just at the current rises that are elevated.

So, you are very right that this year's availability, especially in the phosphatic segment, is likely to be constrained. The better sense will prevail. It is not a question of production. It is a question of logistics. First of all, let's understand that. We have many ships, about 28 or 29 ships, which are stuck up in the Hormuz. They are carrying material. They are there, loaded up, and so on. So it is more a question of logistics than production. That is firstly one thing to understand. That means if we have an opening up of the Hormuz in the next one month or so, Even if we take a delayed adjustment, because shipping takes some time to adjust, in three months' time, things should return to normal. So that is one thing. Secondly, as far as Chambal is concerned, we did make some strategic purchases, very big, early in the beginning of the year, and we are covered at least in July-August in terms of our stocks.

All complex for July-August. And for this last question, I think in the last concord, you were talking about a new CAPEX that we could be looking at, and a substantial CAPEX. I think there were two, three ideas that you guys had in mind. I think the first one was the Urea, a new plan that we could set up, or a TAN expansion, or a new product line. So, is there any further guidance you would like to give on the same?

I wish that the government looking to the situation that is there are very, very serious in terms of pushing out a policy to attract investment. And for our part, we are very ready in the sense that we have land. We have the environmental clearance. I'm happy to report to you on that issue. We have the water requirements tied up. And we have already started talking to the... The moment the government pushes the button, within five, six months, we will be on the block to run to this particular situation. That is one. Secondly, once you talked about the TAN and so on, there will be subsequent developments, but we are also ready with that in terms of making an analysis where and how we will put that plant. But that is in the works, and I will not be able to reveal much more on that. Fourth plant, in terms of URI are concerned, we are very, very advanced in terms of execution of this.

Okay, got it. Thank you so much, sir. I will just join back in line.

Thank you. We will take the next question from the line of Prashant from Biyani. Please go ahead.

Yeah, thank you for the opportunity. Sir, this quarter, we have seen a significant growth in EBITDA per ton for Urea. What has led to this sharp jump in the quarter? And how to ascertain this quarterly volatility in EBITDA per ton? Because for the last three quarters, it has been more or less flat, but we have seen a sudden jump in Q4.

This is more to do with the product mix. We do know that we do sell a certain amount of ammonia, so we had better margins there.

How much was the ammonia volume for this quality?

Okay, that you will discuss offline with Mr.

But it was primarily because of maybe higher volume and price of ammonia?

No, it is not. There is a price increase, no doubt. And of course, production of urea was also there. And the sales of urea also was higher by about 30,000-40,000 tons. So all of that taken together.

But, sir, regarding urea volume, two years back, same quarter, we had more or less same number of urea sold, but our EBITDA pattern was half.

Also, sometimes what happens is that you are doing maybe two plants at that time in terms of annual turnaround, so debits of that nature also occur. This year, we did one plant, not two. So, that has impacted, although we had planned to do something earlier, but we did not do because of gas shortage and so on. So, that debit in terms of the cost of repair and maintenance also, on a smaller base, it makes a bigger difference in terms of percentage.

Sir, this entire year we had around 3.4 million tons of urea sales. Last year it was 3.47. Would we be touching around 3.5 this year? Is that in the realm of reality?

So, we have to have two shutdowns. This year was... In the end of the year and then in the beginning of the year, we are currently undergoing one shutdown for Ghatipan 1, which is a slightly longest shutdown, which will tend to be happening until about June, middle June. So the number that is there that we are going to do is more or less the same, although we will ramp up and try and ramp up once the... I am confident that we will do better than last year, but whether we will touch 35, we will have to, it's a touch and go there, but we will definitely exceed what we did this year.

Sir, how much would be Urea inventory with the company at the end of 526?

It's about 1,30,000 around.

Sir, for quarter one, till date, how much of our quarterly requirement of gas for all the three plants combined we are getting from the government, or from the Gale and other OMCs?

No, we have no issues in terms of gas availability as of now, thanks to very active procurement by the government, for which I should thank them. They have really been proactive on this issue.

Oh, I'll come back to this.

Thank you. We will take the next question from the line of Manas Pelikar from SRE Equities. Please go ahead.

Yes, thanks for the opportunity. So, as we commissioned the TAN plan, so can you throw some light on the TAN and WNA? And this will be the important chapter for the CSPL for the future growth. So, can you give some idea about what will be the margin range for the TAN when we will operate at the full capacity? And how does the market for the TAN look side?

So, I'll start with the last question first. The market for TAN is buoyant, I would say. The demand is there. And you know that the continued emphasis on mining and infrastructure and all that That is a strong growth driver for this particular... Segment of the market. So my view is that we, for this year at least, we do not have any issues in terms of the demand. And as somebody just said before this, the questioner before this made the comment about Russia not supplying so that the import market is also a little short. So on this basis. I don't think there is an issue in terms of the demand as well. Second part that you question in terms of what would be the EBITDA, I think our budgeted numbers are very well there. In fact, they will be exceeded in terms of what the margins could be. That's my feeling at the moment.

Are we expecting the high working capital requirement for next quarter due to this high gas prices? Because, as you mentioned in the starting comment, the government increased the price for the subsidiary by 12%. Is it par with our cost weaker or it is below our cost?

Do you understand what you are saying, Mr. Yes, you are talking about the NPK. Uriya, Uriya, so as I, if you understand this business, it's basically a cost plus kind of business. So government recognizes the cost, and therefore, in terms of higher prices of gas, except for that impact on working capital, we are able to pass on the cost to the government in the form of subsidy, increased subsidy. It would not be a problem for us.

Thank you, everyone. Thank you.

Before we take the next question, a reminder to all, you may press star and 1 to ask a question. We have the next question from the line of Sandeep Mukherjee from SKP Securities Limited. Please go ahead.

Hi, sir. Thanks for taking my question. Sir, what was the actual GCL of G1 and G2 and G3? G1 plus G2 and G3? Yes, sir. Could you repeat that, please? Sir, what was the actual energy consumption for G1 and G2 and G3 for the year?

Sir, definitely below the government... So, normally we do not reveal these numbers publicly, but we are well below the established norms. Therefore, a certain amount of energy gain does accrue to us.

Sir, can you tell the sales volume of G1, G2, G3 for the quarter?

I will ask Mr. Anuj Jain to answer this question.

Face volume in the quarter, G1 was 2.67 lakh ton, G2 is 1.52 lakh ton, and G3 is 2.53 lakh ton.

We will take the next question from the line of Vishal Thakkar from Balaji Investments. Please go ahead.

Yeah, good morning, sir. I just wanted to ask you about with the current capacity, new capacity coming up, can you give me some guidance about the turnover you are expecting in this financial year?

Which, which, which capacity are you talking about?

The new expansion you are doing, which is coming up today. The production is going to start today.

That you are talking about tan?

Tan, yeah, tan, yeah.

Yeah, yeah. So tan, we normally, our production level is about 700 tons per day. And assuming that we are able to start, we'll start with WNA production, nitric acid, and then it goes to melt production, and then it goes to H10, which will come by the end of the month or a little bit later than that. So let's assume that we have got about nine months production, to be very conservative. So we are saying that we have roughly about... 1,60,000, 1,70,000 tons of production would be possible.

So, can you give me some revenue guidance, roughly, or it can add to the...

Add that, this is a very volatile product in terms of pricing. Somebody just said that the tan prices are up by 40%. Normally, they used to. So, revenue guidance is dependent on what the number is. A budgeted number normally for this is about... 38,000 rupees a ton. That is the normal number that you might think about.

And are you also looking at this year any buyback, also you are thinking about coming up with buyback because we do see promoters buying back the shares in last quarter. So are you looking at buyback and considering buyback?

There is no such proposal on the table as well.

Thank you. We will take the next question from the line of Viraj from Simple. Please go ahead.

Yeah, first question is on the TAN. Would you be able to reach a 60, 70% or even higher utilization in the first year itself? And any color on the market dynamics, you know, given challenges on imports of TAN into the market? So is the market right now very tight or, you know, how would you describe the market structure?

I think the people want material, and in fact, the sooner we get it to the market, the better. That's what the issue is. So that is one. The second is that going forward, it depends on what the geopolitical situation pans out at, and what will be the stance of Russia in terms of exports. But I can say that there is an underlying growth in about 6-7%. In the explosive segment, and therefore that translates back into ammonium nitrate increase. It's about 6 to 7 percent, and it's a healthy growth, I would say, given that we are already at 1.2 million tons or so of demand. So if we are saying 6-7 percent growth, we are talking about 70,000 tons per year, add-on year or year, that kind of number. As of now, I don't think that it is more a question of how we produce and how we place it in the market and what is our connect with the customers and so on. There is enough room for everybody to play at the moment.

So in the first year, should we accept or close to full utilization?

And even in the last year, we know how to run continuous process chemical plants. It all depends on how we successfully commission it, which I am very hopeful that we will be doing it. We have the best technology, we have brand new equipment, and we have a competent team to operate it. So I don't see, in terms of production, why we should have an issue. That's certainly not a constraint.

And in terms of key feedstock and raw material availability, especially for urea or be it for tanks? Do you think you have covered well for the Kharif and the rest of the year?

What I thought you were talking about raw material availability for this is basically ammonia. And ammonia is self-produced in our case because we have got three plants producing ammonia, and we have got three to four, five percent surplus on account of technical reasons. So we don't see any shortfalls coming from that side as far as Stan is concerned. We are there in terms of quantities for, matching quantities for ammonia.

I'm curious, huh?

Gas is the main component. We first make ammonia, then we make urea. So, as I told you that the government are very proactive in getting the gas for the fertilizer plants. So, that I don't think is also a constraint. It's only a question of price.

But given where the prices are for urea and ammonia, Do you think that, you know, it would be enumerative for you to produce, you know, above RAC, you know, any color you can give?

No. I would suggest that you also have a look at where the IPP for Urea is. It is $900, sir. Way, way above. So, this is not a problem in terms of production beyond RAC.

Okay. Thank you.

We will take the next follow-up question from the line of Aman Guttari from Aquitas Investments. Please go ahead.

Yeah. Hi, sir. So, sir, I think you had mentioned some cost structure and how we would be going about urea plants. Can you just help me understand if we are potentially setting up a new urea plant, how would the project cost go and how would we look at funding it?

We have checked around and what has been happening in the sector lately. The price is, say, 9,500 crores to 10,000 crores. That is the upper bound as far as brownfield projects are concerned. For 1.4 million? For 1.3 million tons. You know the balance sheet of Jamal, so I don't think there is much. Funding that, that is. The government policy, now that is the open question, what exactly they are going to offer on the plate, or whatever other information that we have and we are discussing, it's a doable project.

Before we take the next question, a reminder to all, you may press star and 1 to ask a question. We will take the next follow-up question from the line of Prashant from B&R. Please go ahead.

Sir, what would be the CAPEX number for FY27, and what would be the areas of investment?

FY27, there would be some balance expense on account of the TAN project, of course, and plus there would be the normal routine capex of the order of about 170-180 crores. In terms of either replacement or new, more efficient equipment, such as, for instance, steam turbines for CO2 compressors and so on. So those are the standard kind of 160, 170 crores that we spend.

And what is the balancing amount in 10?

Thank you.

Sir, once we commission WNA, we would be taking some time to start ANS and HDAN. So, is it that we will store WNA till the time we produce HDAN or we will sell WNA in the market?

Obviously, we will sell it in the market. There is a ready and good market for WNA at the moment, but I don't think there is... Yes, we are right that there is a sequential commissioning in this process. Our plants on both sides are more or less ready, but as we know that we have to run, do dry runs on both sides and then commission and so on. So it will take a little bit of time, but we are there as far as the most important component of the plant is WNF.

Sir, have we also evaluated making automotive-grade urea, while, you know, it does not come under the subsidy regime, but 75% of India's requirement is imported. So, any thoughts, if you have ever evaluated this?

We are, no, it is definitely possible with our plants, at least one stream or two streams we can take out to do that. And we are, in fact, having some. And we are telling the government also that you should allow us to do this technical grade. But it is very nascent. I would not put any, you know, I won't give a timeline on to this. That depends on government policy.

We would require government approval because gas has to be supplied through them, is that it?

Yeah, obviously, obviously, this is a requirement that they would allow us, like they have allowed, for instance, GNFC.

Is there any clarity on G3 profitability starting next calendar year?

What I can say is that, as I said last time, that the government has seized the matter, the file has started. It's too premature to give you any guidance on this, but it is moving. That much, I can say, because we are to be in this regime from December 1st onwards. The government are quite aware. Currently, they are a little busy with other things, as you know, in terms of sourcing and so on. I'm sure within the fullness of time, maybe within a month or so, we will engage more effectively with the government.

Just lastly, how much would be the net cash on balance sheet?

I think at the end of the year, we were balanced with both, I think it was zero-zero almost. That cash was, whatever cash on the books was more or less countered by the amount of short-term borrowing. Somebody asked that question in the very beginning. But this is a fluctuating number. Once our subsidies get released in the first quarter and so on, so this will go down. And I'm sure we are already surplus, as Anuj informs me.

We will take the next follow-up question from the line of Aman Khutadi from Aquitas Investments. Please go ahead.

Sir, I think you had also mentioned something about setting up a phosphatic fertilizer business primarily in a manufacturing side. So, has there been a push by the government that you have seen for, you know, increasing these capacities also?

The government are, I know, informally talking, I cannot say anything about this, and it would not be proper for me to say this, that they are thinking of something on this area as well. But we have, as I have said, in terms of phosphatic capacity, we are, and we remain very keen on this. But there are two or three important issues which need to be sorted out in this sector, apart from, of course, the scale and... That's right. ...the value of the change. The DAP pricing? I couldn't get what you'd say.

Yeah, I just meant that DAP pricing is also an issue.

No, no, DAP pricing is definitely an issue, but more than that are issues with respect to GST, for instance, in this sector, which is quite a problematic area which they have to sort out. We have been at it for quite some time with them. That's a tax issue which is easily sorted, but they have to... The second part is the upfront investment vis-a-vis the value add, which you rightly said is suppressed because of controlled pricing. So we'll have to see a situation where we are relatively free in terms of pricing power before we can take this forward. And these two things, I think, are the important issues which we are waiting for in terms of. But our thoughts are not only limited to India, by the way. So that is something that, as we have hinted in the past, this is something that remains an ongoing issue. We have had one or two engagements. That is an ongoing affair. At the moment, we have had a break-off due to this Gulf War situation and all that. But we are ready to engage at some point of time in the very near future on this issue.

That would be a JV kind of a structure that we would be looking outside? And for the last question on the CPC and biologic segment, I know we are gearing up with product launches for this year. What do you think is the strategy or outlook that we have for this segment? How big do you think that we can get it in the next two, three years? Considering, I think last quarter you mentioned multiple international companies that you were talking to, Nutrient, Corteva, Sinjin. So how are you thinking about this segment?

Nutrien are already more or less done in terms of engagement. We have got down-term agreements. But those would be potash products. As you say, you see, somebody should understand that the agriculture is moving in a different direction. It is no longer bulk, it is more precision, it is more specific to soil conditions, it is also very specific to nutrient use efficiency and application capabilities. So we have to now move from very generic to kind of specialized. So that is the way it is going, and we have to work with some of the international companies to bring. It's what we are going to do. It's called, I think, Utam Carbonis or something, which we are coming in with. I'm already there with them. Well, if we, when we were talking to Nutrien, they said that, look, what is the total market in India, and we indicated in the region of $1 billion by the next five years. So you can understand what kind of percentage they would be looking for.

Maybe 10% would make Gentlemen, you may press star and 1 to ask a question. A reminder to all, you may press star and one to ask a question. Thank you very much. As there are no further questions from the participants, I now hand the conference back to the management for closing comment.

Thank you, Purwangi. I would like to thank you all for joining the call today, and hope you were able to address all your queries. If you have any further questions, you can reach out to our partners at Valoram Advisors. Thank you once again for participating in the call.

Thank you, members of the management. On behalf of Valigam Advices, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.

Thank you. Thank you.