Deepak Fertilizers and Petrochemicals Corporation Limited CC-Mar25.pdf · 2025-05-23
Congratulations on good set of numbers, sir. I have few questions. First is regarding the Ammonia business, wherein you used to mention that about $380 per ton would be breakeven cost for you. But I suppose that you usually produce ammonia from natural gas, use about 33, 35 MMBtu of natural gas for that. And given the fact that the natural gas prices have fallen down significantly from Q3 to Q4 , because of Brent-linked and Henry Hub linked contract. So what is the current cost of gas that you are accumulating right now due to which you would have, again, shifted your breakeven cost from $380 to now $330, which you just mentioned? Subhash Anand: No. In fact, $380 I don ’t think so we ever talked $380 in dollars. We always maintain for EBITDA breakeven, our number is around $310 to $320. So, we broadly remain at that level for EBITDA breakeven. Second thing, you are talking about gas. Currently, our gas prices are more I will say since our long-term Equinor contract yet to get kicked in and that will get kicked in only next year, FY ‘26, and that’s where we will start seeing the real benefit of gas price reduction happening. Till that time, our contracts are linked to various baskets, not just one Brent or not just one thing. Movement of gas price is not immediately visible to us or not immediately getting passed on to us. So it has some lag when it comes to our ammonia pricing or the costing.
Okay. So what is the usual time lag, sir, from the reduction of the basket of the price and your accumulating of the benefits of that? Subhash Anand: It depends, but we buy from 3, 4 sources, not just one source. So, each has a different formula. I call it linkages. Yes.