Thank you very much. The first question is from the line of Nirav Jimudia from Anvil Research. Please go ahead.

Ma'am, I have two questions to ask. So one on the agro side. Ma'am, if you can share what was the volume growth for Mancozeb in 9 months of FY '25 vis -a-vis of 9 months of last year as well as also if you can share that like recently, we have seen the pric es of Mancozeb in the international market moving up. So how much of that is captured in Q3? And how much it is still left to be captured going forward?

So, Nirav, thanks for your question. I'm just going to get the volume data out. Meanwhile, in terms of the Mancozeb prices, I'm going to request Raghu to give you a bit of an update.

So my suggestion would be, instead of specific products and pricing, let's look at the macro picture. I would request Raghu to respond to it. But we'll not get into the specifics on the product pricing and volume at this stage.

Fine, fine, fine. Sir, also, if you can share like last year, we produced close to around 70,000 tons of technicals out of over 90,000 tons of production capacity. So how are we looking FY '25 and FY '26 in terms of the production of technicals, given the kind of newer products we have launched on the formulation side? This along with if you can combine the volume data growth for Mancozeb, that would be helpful.

Raghu, I'll briefly touch upon before you comment on Mancozeb.

Sure.

It may not be appropriate to look at absolute volume of technicals because more and more new products are coming in , which are high value and low volume. Some molecules also go out of the system. So it may not be appropriate to look at tonnage as the indicator for the future growth prospects. Rather we should look at whether we have got registration for new generation molecules, which can improve the overall business prospects and the margin structure. There are enough opportunit ies available for us to scale up the production. And recently, in yesterday's Board meeting also, we have taken approval to enhance the capacity of our technical facility. Besides the multiproduct plant for which we took approval, we are looking at some brownfield capacity expansion, which may come up between Sarigam and Dahej. So we are looking at the current business environment, opportunity that it throws up in terms of the registration, and the countries in which we operate. We are planning to take advantage of the market situation and increase our volume growth. Definitely, the capacity utilization may come down due to monocrotophos moving out, but we are repurposing these plants with new technicals and new products and the products which have been initiated in the beginning of this quarter are in the final stage and will be completed by March. And this will come into next year in production, and we'll be launching the products and brands both in domestic and global markets. Raghu may supplement with any volume data relating to Mancozeb.

So primarily, just to add, I think specifically the Technicals that we are talking about, as we have mentioned in the previous interactions, we are expanding our product portfolio to enter herbicide also, so that we get a good balanced portfolio of insecticides, fungicides and herbicides with a view to support our formulation foray. We have made a foray into selling formulations in the exports market as well. So with that objective, we have invested in the back end to make some technicals so that we produce ample quantity both to support the B2C as well as the B2B opportunity.

Got it, got it, sir. Sir, second question is on the SSP side. So if you can share your thoughts here because last year was bad in terms of the SSP. But given the kind of price increases and the shortages, what we have seen on the DAP side, possibly SSP bei ng a good substitute, how do you see the volume growth for SSP in FY '25 and FY '26? And also, if you can share like what sort of margins per ton we are currently making on the SSP side? Because in one of the interactions earlier, ma'am mentioned that like we were anywhere between Rs. 1,500 to Rs. 2,500 a ton of SSP margin. So if you can share your thoughts here, that would be very helpful.

SSP has definitely revived. In fact, current year performance is much better. As you rightly said, due to the shortage of DAP and also the good monsoon situation, there has been a spike in SSP volume. In the case of Coromandel, more than chasing volume, we have looked at value -added products. We have a unique product, which is base SSP plus micronutrients like zinc and boron, which can be a potential alternate to DAP, which has been doing extremely well. We have scaled up the volume of these variants. In fact, the major share of our volume growth, which happened in this quarter has come from these differentiated products like Gro Plus. Also, as you are aware, we have introduced urea SSP, which besides P, contains N as well. And this is again a one-to-one alternative to DAP. This has also been very well received in the market. So our aim in SSP business is to focus more on value -added granulation products. And accordingly, we are increasing our capacity to produce urea SSP. The plant which came up in Nimrani for urea SSP has been operating at full capacity. Now we are trying to add this facility at Udaipur, which is another plant for SSP. And going forward, more than 50% to 60% of the total SSP volume will come from these differentiated products, which improves the margin structure. You are absolutely right, the margins are in the range of Rs. 1,500 to Rs. 2,000, but it can potentially go up with the increased share of th ese unique grades. As you know, we have plants across the country, and we have capacity close to 1 million ton. This year, we had some challenges in availability of sulfuric acid, and we couldn't scale up the volume. But going forward, our aim would be to reach 1 million ton capacity in 2 years' time, probably taking it to 8 lakh tons next year and thereafter 1 million ton, and that too with focus on these specialty grades, which are as good as any other NPK products.

The next question is from the line of Prashant Biyani from Elara Securities.

Congratulations on great set of numbers. Sir, POS volume this quarter has been very strong across India in both urea and complex. What is driving this? And would it mean that Q4 dispatches should again be seeing double-digit growth for us?

So overall monsoon condition, reservoir levels and crop acreages are up , due to which the consumption has gone up significantly. In fact, as you're all aware, in the year beginning, the channel was carrying higher inventory that partially got reduced in kharif. Now in this Q3, there's a significant reduction in the channel inventory. As you all know, in most of the markets, the crop season comes to an end by February middle or end. The consumption may not happen from March until season starts in May. But having said that, we could see a significant improvement in POS volume even in January. So this is really helpful in terms of reducing the channel inventory, thereby unlocking the subsidy amount which is stuck in the system. It's good. It augurs well for the next kharif season where the industry can build up inventory and meet the market demand. But the volume growth is contingent upon the capacity and the import tie-up, which has happened. So it won't be a double-digit growth. It will be as per our plan. And as you know, fourth quarter, we generally take annual turnaround. So our volumes will be more or less aligned with the market demand. That's the way we have been doing every year.

Sure. Sir, for FY '26, what kind of volume growth are you looking at? And it will be contributed by incremental volumes would be contributed through manufacturing or trading?

See, it will be a combination of both. Very difficult to put a number, but we have been carrying out some debottlenecking of our facilities at Kakinada as well as Vizag. And that will be really adding to the volume increase next year. Also in our Ennore plant where we have currently restarted only phosphoric acid and sulfuric acid, we are yet to start the granulation plant. We are trying to repurpose this plant for any alternate range of NPK fertilizers. So there is a potential volume increase for manufacturing from Ennore and also by debottlenecking the capacities at Kakinada and Vizag. Besides that, we may resort to imports, especially DAP. As a company we manufacture NP / NPKs and we import DAP. Sometimes we also resort to NPK. As a strategy, we have decided to scale up the volume in the next 2 years to ensure that whenever the new plant comes up, we develop the markets, especially in the northern states of MP, Rajasthan and Uttar Pradesh, so that we'll be able to easily absorb the volumes as and when the plant is commissioned.

Right. Sir, for this quarter, I think there is a dip in non -subsidy non-CP EBITDA, the segment which comprises of spec chem, organic nutrients, retail and others. Is the reading right? And if yes, what is driving this decline? And I was a bit confused because in your initial commentary, you told that specialty nutrients business was good, but this non -subsidy non-CP EBITDA is showing some decline. If you can confirm that?

I don't know how you arrive at the math. All these are part of the Nutrient segment, both specialties as well as retail comes under the Nutrient segment and that has grown. Our retail stores have done extremely well on the volumes across categories and most stores have become profitable. And specialty nutrients have also grown on volume terms compared to last year, both top line and profitability has grown for this segment as well. We have improved our Nano DAP volumes as well compared to last year. So probably there can be a marginal reduction in the bio business where the export orders we executed last year has not happened to that extent.

The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management.

Congratulations on a great set of numbers. The first question is in terms of supply chain. So we are setting up a new granulation trains. So we had acquired a stake in Baobab Mining. Any other such acquisitions on the anvil? We had talked about securing ro ck phosphate. We haven't seen any such acquisitions or such tie -ups post this one. Would like to hear your comments on the same.

For the new granulation capacity, the phosphoric acid required is 2,00,000 tons. We are putting up a new plant that will take care of Phos acid. For the corresponding sulfuric acid needs also , we are putting up a plant. For ammonia, we have a long -term contractual arrangement. So we don't see any challenge. For phosphoric acid, we require rock. We have fair visibility on the sources of rock. You are right, Baobab Mines, we are scaling up. During this quarter, we have commissioned the fixed processing plant and the operations are getting stabilized. At this current rate, we are able to ship out 1 ship every 45 days. And soon that will get reduced to 30 days with improved throughput. So we do expect Baobab Mining can scale up volume to 3,00,000 tons next year and in the following year up to 5,00,000 tons, which is a significant supply to meet the Kakinada rock requirement for the new phosphoric acid plant. So we don't anticipate any challenge in terms of securing rock phosphate for the new plant. It will be driven by Senegal supply plus other existing sources where we have long-term contracts.

Sure. That's helpful. And at 5,00,000, would that entity be profitable?

Yes. It should, with the cost structure once the volume improves. Currently, the cost structure is a little on the higher side because of the lower output, but when the output gets stabilized, we are highly confident that we'll be much more competitive. More than looking at the stand-alone profitability of Baobab, we look at the complete value chain of phosphoric as a value addition and also our ability to buy rock from other sources at a competitive price. Our understanding of mining, our understanding of rock market is definitely helpful to secure the entire volume at the most competitive price. So I don't look at Baobab on a stand -alone profitability basis. On an integrated basis, it makes a lot of strategic sense for the company.

Sure. Very helpful, sir. Sir, the second question is on the retail piece. You also did allude to it. What would the turnover be of this business, say, in the third quarter and in 9 months? And in terms of year-on-year, how are we looking at scaling this up going forward?

As per the segmental, we don't put out the separate top line and profitability. But what I can say is that it has grown significantly. On Q3 alone, the top line growth is 20%. And in terms of bottom line growth, we have seen significant improvement. In bottom line on retail , we capture only the retail margin, we don't capture the entire margin because that remains with the respective SBUs in terms of captive products. Only for the third party, the entire margin goes into the retail business. There has been 17% growth in the profitability as well. Besides revenue and profitability, it improves our ability to scale up the new products. So we have seen in the last few quarters, whatever new products in Crop Protection or specialty segments or organic, the ability of retail to connect with and communicate with the farmers and scale up the volume h as been tremendous. This has given enough confidence to us to enhance the number of centers from the current level. The last time also, we spoke about doubling the centers from current levels, and we are on that path. We'll be adding significant number of stores in fourth quarter as well. So strategically, I think upside of retail is still yet to be played out.

Sure. Sir, what would be the number of stores as on 31st of December? And would it be PBT positive as a whole?

Absolutely. 810 stores.

810?

Yes.

And you said we are looking at doubling it over 2 years to maybe 1,500 plus by FY '27?

Correct.

The next question is from the line of Somaiah from Avendus Spark.

The first question is on the volumes that we have done, 11% growth. Could you help us understand how much was contributed from our core region? And how did we benefit from the northern market expansion? And also, if you can give some color on the northern market expansion, which are the regions and how you are planning it for the next 1 year?

See, this quarter, basically rabi season, the activity is more in the northern markets compared to the south market, especially in the month of November. And as I mentioned in my earlier communication, as part of our strategy to increase the availability of fertilizers in the northern market, we started sending shipments to state of Madhya Pradesh, Uttar Pradesh, Rajasthan. The volumes, of ~3.1 lakh tons have come from north and central. If I have to compare the earlier year corresponding period, it was around 1.6 lakh. So we can say we have doubled our numbers as compared to last year corresponding quarter. This is a strategic call we have taken to ensure that we move to northern markets for our NP / NPK and position ourselves as a pan -India player in the fertilizer, especially phosphatic business. We have significant presence through single super phosphate , specialty nutrients and Nano and we have a complete range of product portfolio. While we have been focusing on primary markets of Andhra, Telangana, Karnataka and Maharashtra, we started focusing on these secondary markets.

Got it, sir. Sir, also, could you give some color on the global phos acid market, how you are seeing in terms of supply -demand dynamics and also on rock? Is this a year where there is a good amount of supply and the demand is kind of normalizing compared to last year? Or you see still things to be on the tighter front because phos acid prices have kind of slightly gone up now. Now we are at Rs. 1,050-odd levels. So just wanted to understand your thoughts on the supply-demand dynamics.

So phosphoric acid globally, most of the countries have started securing fertilizers for their domestic use. So to that extent, there is no significant addition to the global trade of phos acid. But the sources which have been supplying acid, especially to Coromandel, we continue to receive those supplies. In fact, we have diversified our phos acid sources to more than 6 to 7 and derisked ourselves. Besides various sources, we are putting up a new phosphoric acid plant of 2,00,000 tons. We don't see much challenge in terms of availability of phosphoric acid. Whatever is required, we should be able to tap the market and make it available. And in terms of the rock, we have a significant requirement both for Vizag and Kakinada. Currently, we have 1.5 million tons we consume in Vizag. It may go up to 2.3 million, 2.4 million tons when we commission Kakinada plant. But we have stable sources from African countries, and we don't see any major challenge. The current pricing scenario, Phos Acid prices generally track DAP prices. And as a country and as a company, we are in a position to negotiate terms in line with the DAP price movement and ammonia prices. That has been the trend in the past. And India was able to negotiate better price as compared to global prices prevailing in Europe and other parts of the world. In terms of the rock pricing, as I mentioned in my earlier communication, there has been reduction in rock price in the last quarter. And going forward also, I expect some softness in rock phosphate, which we could see especially for SSP use and also for our main Phos acid production. We are not expecting any challenge in securing raw material as well as the prices.

The next question is from the line of Ankur Periwal from Axis Capital.

Congratulations on a good set of number. First question on the fertilizer margin outlook. We had highlighted during our management interaction earlier around 40 -odd percent jump in overall fertilizer margin. Just wanted to understand the time lines for it and whether the change in SSP portfolio, the differentiated products that we are making is a top -up to that 40% jump or is it including in that guidance that you had given earlier?

This I refer in the context of the value addition what we'll get once we commission sulfuric acid, phosphoric acid plants at Kakinada . And as and when this plant gets commissioned, the improved conversion cost efficiency and the value addition what we have and our ability to secure rock from our captive mines, we should be able to achieve this sort of improvement in the EBITDA margin probably in 2 years down the line. And that also includes the portfolio of SSP.

Sure, sir. And just secondly, your thoughts on the Crop Protection business, especially on the export side. The pricing-led competition that we had been seeing earlier, are we now expanding into newer geographies as well? Or the growth focus from crop protection perspective will be largely on India as a market in terms of in-license and combination products and export will be taking a back seat? Your thoughts there?

No, we'll be growing in all the 3 segments, whether it is exports , B2B or B2C. And the main reason we are expanding capacity is to cater to all the 3 segments. We are also diversifying our presence. Price fluctuations do happen in any commodity. We've seen in the recent past that there has been an increased demand and uptake of these molecules because of the additional spraying, especially by Latin American growers . The lowering of inventory is helping us to get the better price. Our focus will be to see how best we can increase the volume in the export market. Right now, we predominantly focus on B2B. We are trying to see how we can formulate and sell various technicals. While we are preparing ourselves for introducing and registering new products, we are also in parallel working on creating the market opportunities to participate in B2C, especially in Latin America. and Southeast Asian countries. We are also initiating registration in Europe and U.S. So we will definitely continue to focus in export market. Of course, India is not to be left out. In India market, as I mentioned in my last earnings call, we are bringing back the focus with our wide range of 14 technical active ingredients that we manufacture, which provides us with enough opportunity to scale up the branded volumes. We are coming up with new combinations and formulations, and we'll give an aggressive push to the domestic formulation business. This may not require capex, but its more in terms of brand building and strengthening product management approach. We are updating our organization structure to suit the revised needs. Our aim would be to grow all the 3 segments. And whatever the residual capacity is there to optimize the operations at our plant, we will focus on B2B domestic as well.

The next question is from the line of S. Ramesh from Nirmal Bang Equities.

Congratulations. So if you look at the volume growth for the industry in exports, numbers range 30%, 40%, 50%. So in terms of the volume growth expectation in exports next year on this base, what is a realistic assessment of volume growth possible for the industry in your company?

Raghu, you want to take that?

As Sankar mentioned, the outlook is quite positive. Having said that, from a value perspective, for many of the active s because we still largely do business in actives, the prices, while they have stabilized, they are at a fairly low level. So therefore, volume becomes an important play to keep the overall sales at an even field. So having said that, that is the reason why we thought we could foray into the formulation segment where not only we capture a decent amount of top line, but also the margins. So in that regard, the thrust that the management is taking, is putting more money into registration. So when there is so much of competition on generic actives, the only way to make money would be to enhance our presence in the formulations market, both in India and abroad. So when you say volume, our growth expectation is buoyant i n both actives as well as formulations. But as a company that is making a more recent foray into formulations, its outlook for formulation growth is on the higher side in exports, specifically that you ask. Does that answer?

Okay. That is fair enough.

There is a shift. Yes, there is a shift. So the thrust is more on formulations, yes.

Okay. And in terms of the nutrient business, based on the October NBS rate, is there any under recovery in the fourth quarter? And how do you see that being reset in the April subsidy? What is the indication you're getting from the government?

See, there are some uptick in raw material prices like sulphur, sulfuric acid. And definitely, DAP margin-wise, it is not good enough for us to produce and sell. So we have been representing to the government. And also certain NPK grades like N -10, there has been challenges because of very low subsidy on potash. As the industry, we have been representing to the government to make those corrections and also consider additional costs. If you ask me for the fourth quarter at this point of time, in certain products, it looks okay , but for certain grades , there is a shortfall in margin. We will be continuously engaging with government and hope to see some correction happening in the next year.

Okay. One last thought on the minority interest accounted in the consolidated results, I presume it's mostly based on your Dare Ventures and your drone subsidiary. So when do you think the drone and Dare Ventures subsidiary impact on your consolidated numbers turn positive?

Jayashree, you want to take that?

Yes. You're right, Ramesh. Most of our subsidiaries, which are less than 50% is getting counted as a minority interest. As far as the subsidiaries are concerned, the larger entity that is into operations is the drone subsidiary. Here, as you know, we had received the orders from the emergency procurement t eam on defence and the order book is about Rs. 250-odd crores. Dhaksha is awaiting the PDI so that the shipment of these drones can be made. Pending that, we are just focusing on the agri drones business at this point in time, and also training of pilots. So we expect in the coming year quite a positive traction in the drone company operation. Dare Ventures is nothing but an entity which looks into investing in new ag -tech start -up companies. Like, for instance, we had invested in a company called Ecozen, which is into solar power related and then XMachines, which is into small agri robotic applications. So Dare Ventures is just a small investment arm, but there are other entities, which are subsidiaries globally, which hold primarily registration for exports in the CPC segment. So the main one is the drones company, which we believe, with traction building up on agri as well as some turnaround on defence, should do well in the coming year.

The next question is from the line of Bharat Sheth from Quest Investment.

Congratulations on good set of numbers. Sankar, if you can give a little more color, say, where we are talking of, say, reaching SSP 1 million tons. So what kind of a blended will be, let's say, out of that mixture of SSP and urea? And if you can also share the profitability part, how is it with this mixture will be having higher than the SSP and/or sitting somewhere in what kind of a range?

From the value-added products, both urea SSP and Gro Plus when we reach scale, I expect 60% to come from these 2 products. And balance 20%, 25% will come from normal granulated SSP with zinc and balance can be powder SSP. So blended margin with this sort of a combination of 60:40 should go to Rs. 2,500 per ton. Currently, base SSP is powder SSP and granulated SSP in the range of Rs. 1,500 to Rs. 1,800. And the other products are in the range of Rs. 2,000 to Rs. 2,500. So blend with the increased volume of this Gro Plus and urea SSP should take the margin up for SSP.

How much? Sorry, can you repeat?

Sorry?

This blended margin, how much you said? Sorry, I missed it.

Okay. And secondly, if you can give a little more color on our specialty nutrient business. So what is the size? And how do we see with this expansion in geography also?

Which business? I'm not clear.

Special nutrients. SND.

In Specialty nutrients, we operate on pan-India basis. And especially in Western Maharashtra, Rajasthan, MP, UP, Punjab, Haryana, these are all the key markets for the specialty nutrients. We have increased our sulfur capacity also and have put up a new plant. We have seen 30%, 40% volume growth in specialty nutrients in the retail centers, especially in AP, Telangana. We also sell in other common markets through fertilizer channel, whether it is Karnataka, Andhra, Telangana or other parts of India. So , we have a combination of retail network, exclusive markets, predominantly for horticulture crops and drip irrigation and also we sell through common markets. We have introduced seaweed granules this year. Right now, we are doing it with a third-party product. If the volume scales up, then we may put up new facility to make our seaweed granules. And we are also scaling up volumes on organic potash. Our focus will be to scale up the volume and create capacities. In fact, we are reaching the size and scale, we are seriously looking at manufacturing some of the raw materials to reduce our dependence on imports from China. That provides opportunity because global players of specialty nutrients are also looking for India sourcing. They are trying to shift the manufacturing source from China to India. If that happens, that provides additional opportunity for companies like Coromandel to come up with these raw materials because water-soluble fertilizers use MAP, SOP and potassium nitrate. We are also seriously evaluating as part of our growth strategy to create a back-end value chain for specialty nutrients and also be a global supplier. I strongly believe water -soluble fertilizers, high-end specialties, organic and bio will be the next phas e of growth, and we are currently positioning ourselves for that.

So currently, what is the size and profitability? Is that fair understanding, earlier, we were talking of around 20% kind of EBITDA margin.

Absolutely. It has the potential to generate EBITDA margin of 20%, 25%

And what is current size?

I think with their currently placing as well.

And currently, how -- what is the size?

It will be in the range of Rs. 550 crores to Rs. 600 crores on an annualized basis. Our aim would be to see how do we double it in the next 2 years' time.

My first question was on the line of sulfuric acid, due to backward integration, can you tell me how much did we save instead of, say, importing the same in this quarter as well as quarter 2? And second question is, how has the price of sulfuric acid panne d out in, let's say, last 4 to 5 months? I mean if you could quantify like in January, how much it has increased as compared to maybe September or October level?

It used to be in the $80, $85 range, that has moved up to $100. And we do have a combination of annual contracts and the spot contracts. So if you can say the average around $90 to $100 has been the sulfuric acid price if they import. On the value addition, what we get in terms of manufacturing sulfuric acid, we have two benefits, cost of production versus imported sulfuric acid as well as the power savings. I may not have an exact number for the quarter, but I can say roughly Rs. 180 crores is the 9 months benefit we have realized on account of sulfuric acid value addition.

That is your Vizag and Ennore plant together, right?

Vizag. We have got new sulfuric acid capacity in Vizag.

The next question is from the line of Liju Dalu from Antique Stock Broking.

Sir, my question was in terms of the unique grade share to the total fertilizer volume this quarter. So if you could share that number?

For this quarter is around 34%.

34%, yes. That’s it from my side.

As that was the last question for the day, I now hand the conference over to the management for closing comments. Over to you.

Thank you very much. We will continue to do our best to improve our performance in the coming quarters. Thank you for your active support. Thank you, Ranjit.

Thank you, all.

Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.