Coromandel International Limited earnings call

MR. PRASHANT BIYANI – ELARA SECURITIES

Ladies and Gentlemen, Good Day and Welcome to Coromandel International Limited ’s Q4 FY26 Earnings Conference Call hosted by Elara Securities. 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 “*” then “0” on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prashant Biyani from Elara Securities. Thank you and over to you, Mr. Biyani.

Hi! Thank you all for joining the call today. We would request “Mr. Sankarasubramanian to start the Session with his Opening Remarks” and then we will follow it up with “Q&A.” Over to you, sir.

Good afternoon, everyone, and thank you, Prashant, for organizing this call. I will begin with “Brief Overview of the Business Environment During the Year, followed by a Detailed Comment on Operations” and thereafter I will request “Deepak to Talk on Financial

Performance.”

The Indian Agriculture sector in last year witnessed moderate growth with Agri-GDP expanding by 2.4%, reflecting the impact of uneven climatic conditions and softening Agri-commodity prices. The southwest monsoon was above normal at 108 % of the long period average. However, its erratic distribution and delayed withdrawal affected crop cycles and rural consumption, particularly during the rabi season. Encouragingly, the reservoir levels were quite strong, supporting the improved sowing activity. As you all know, kharif acreage increased to 112 million hectares and rabi sowing rose to 68 million hectares, culminating in record foodgrain production of close to 348 million tons. As on April end, all India reservoir levels were 115% of the last year’s storage and 126% of the normal storage, south region is 93% of the last year’s storage and 121% of normal storage. Going forward, weather forecasting agencies have estimated a below -monsoon for the upcoming kharif season. Based on the recent estimates, key operating Southern markets are likely to experience largely normal rainfall. IMD is expected to issue the updated forecast, providing region -wise view in the last week of May. I think this can provide better clarity for all of us. Summer sowings have started in a positive note. As on April -end, crop sowing stood at 8 million hectares, marginally better than last year. As you are aware, government has announced the NBS rates for Kharif 2026, increasing nutrient rates by 10% for N, P and S. These rates do not reflect the sharp increase in raw material prices and rupee depreciation post the Middle East crisis. Industry expects further support to address the affordability issue for the farming community. Industry has been constantly engaging with the government to address these issues, and we are hopeful of a positive outcome. Last year has been tough year for the sector, as the supply disruption from Middle East has resulted in elevated prices, especially in the fag end of the year. We have seen sudden spurt in key raw materials like Ammonia and Sulphur, and availability of finished fertilizers became a challenge. As you are aware, Middle East contributes significantly to raw materials, feedstocks and finished products. Our India dependence on Ammonia and Sulphur is upwards of 80 %, and most of the shipments cross the Strait of Hormuz, and thereby this disruption in the region has led to sharp rise in commodity prices. While channel and industry stocks remain balanced at this point, industry is making concerted efforts to maximize supplies in Q1. An empowered committee comprising of government and industry officials have been working in close coordination for fertilizer production, planning and raw material sourcing. During the year, domestic phosphatic industry increased its production to 16 million tons. Industry also resorted to a higher level of imports, both DAP and NPK, which added up to 10 million tons against previous year of 7 million tons. Consumption for the year was close to 24 million tons, more or less the same as the previous year, and the mix is favoring NPK, despite relatively higher prices compared to DAP. The share of NPKs in the overall Phosphatics is currently at 60%. During the year, industry players signed an off -take agreement of close to 7 lakh tons of green Ammonia. These efforts are expected to play a crucial role in reducing the carbon footprint of fertilizer production, while aligning with India ’s long-term climate commitments. Happy to share, Coromandel has also taken a lead in this government initiative and agreed for the coverage of upto 20% of its total Ammonia requirement. On the agrochemical industry side, the situation presented broadly constructive operating environment for the global industry. After two years of de -stocking and demand suppression driven by inflated post -pandemic inventory, channel inventory levels show ed signs of normalizing across major geographies. Indian agrochemical market experienced a recovery period in the first half, with a near -normal monsoon, healthy kharif sowing, which translated into stronger field-level demand compared to the previous year. However, the rabi demand was muted due to late withdrawal of monsoon, leading to lower liquidation than expected. Having covered the industry, I will specifically now talk about “Company’s Performance.” During the year, company’s manufacturing plant registered record fertilizer production of 3.5 million tons, with the highest level of safety and environmental management. It is heartening to note that one of our largest fertilizer plant has been given British Safety Council Five-Star Rating and also got the British Safety Council’s Sword of Honour Award. All the plants undertook annual maintenance turnaround in March-April months and they have now resumed normal operations. Phos-acid production for the year was up by 3% to 4.5 lakh tons. In March month, compan y successfully commissioned the 2,000 tons per day Sulphuric acid plant and 650 tons per day Phosphoric acid plant at Kakinada, strengthening its backward integration capabilities. This plant is capable of producing annually 200,000 tons of phosphoric acid , and we have also synchronized the receipt of rock from Senegal, which will be used in this new plant. Currently, this plant is going through trial runs. Sulphuric acid volumes have scaled up , power generation has also been met through captive power plants. Operations are getting stabilized and we expect to operate at a desired capacity from April, May onwards. Our project to expand our granulation capacity is gaining momentum. We are on our way to commission this plant by December of this financial year. Our rock phosphate project at Senegal has stabilized very well and we have reached the output of more than 3.5 lakh tons last year, and we are planning to increase the volume further by 30 %-40% in the current year. The company also has enhanced its stake in Senegalese entity and currently holding 71.5% in the mining company. We have been diversifying our raw material sources through long -term contracts with various countries beyond Saudi and Qatar, like Southeast Asian countries, African countries and Canada and sometime from Russia and China as well. So, fairly we are reasonably covered in terms of the raw material for the first quarter. We do hope that there can be an early resolution to the West Asian crisis and we will be able to secure raw materials for Q2. I would like to point out here the challenge is not only the availability but also the price. We are closely working with the government for suitable support to handle the current price volatility. I do hope when the supply side improves, price will normalize. Currently, it is quite abnormal and beyond the affordability of any industry player to secure and produce and convert them into fertilizers. On the marketing front, we delivered record sales of 4.3 million tons of DAP and NPK, a growth of 7% over last year. Our consumption has reached the peak of 4.1 million tons, making us the largest player with the highest market share of 17.5% in the phosph atic sector in the country. Our share of unique grades remains at 35%. We continue to expand our footprint across North and Central India markets by active channel engagement and farmer -connect initiatives and registered a growth of more than 24% in these markets. Our single superphosphate business registered highest ever sale volume of 8.4 lakh tons with differentiated grades like GroPlus and GroAlpha, contributing to more than 50% of the volume, and we continue to be the market leader in the SSP sector. Coromandel’s drone spraying service delivered through Gromor drive initiative and also through our own retail centers, covered close to 3 lakh acres and is witnessing strong adoption by the farming community. Our specialty nutrient business delivered strong performance, supported by focused market development and farmer engagement activities. We introduced different products across organic and specialty segments, offering cross-specific and performance-enhancing solutions. Business is strengthening its manufacturing capability and is setting up a Technical MAP plant and also seaweed granulation capacity. These investments will generate revenue in the coming years. Our Nano business had a strong year, emerging as a leader in the Nano DAP segment with around 50% market share, while also expanding its presence in international markets through ongoing trials and registrations. Overall volumes expanded by 60% . Company marketed close to 42 lakh Nano Bottles by demonstrating product efficacy through extensive field trials, scientific studies and farmer outreach programs. We strongly believe during this period of challenge and crisis, alternate solutions like nanotechnology can make a huge impact and can save the country from the huge foreign exchange outgo as well as help the farmers to have the right nutrient application for the crop. Company’s retail business reported strong performance, growing over 30% in 2025-26. Business expanded its footprint with the addition of over 300 new stores in Andhra Pradesh, Telangana and Karnataka, while also entering new markets such as Maharashtra and Tamil Nadu. We continue to leverage technology -driven solutions including precision advisory, e-commerce, drone spraying services and last-mile delivery. Moving on to one of our significant business segments, which we have been growing consistently over the last two, three years and also where we made a significant investment through acquiring Nagarjuna Agrichem in the year beginning. The crop protection business of Coromandel achieved healthy growth both in terms of revenue and profitability. Performance was supported by strong domestic demand, recovery in export volume and new product introduction and disciplined cost management. Our standalone crop protection business of Coromandel, the revenue moved up by 15% to go up to INR 3,054 crores, led by higher sales across segments. Formulations, Exports, B2B and Bio volumes have shown strong growth, and margins have improved significantly. Profitability of crop protection business has grown by 55% to reach INR 569 crores, benefiting from favorable demand for its key molecules across exports and domestic market. On a combined basis, our Coromandel crop protection business as well as Nagarjuna Agrichem has reported a combined revenue of INR 4,000 crores, which could have been better, but for the late withdrawal of monsoon in the rabi season. But structurally the business has been going well and we are soon to reach a milestone what we have been indicating in the past. In domestic market, we expanded our presence by introducing new territories, onboarding over 1000 new dealers and also introduced new formulations. We have introduced 10 new products during this year which represent 21% of our total revenue. Our export business registered strong volume growth reflecting both the global inventory rebalancing cycle and targeted business development efforts by Coromandel in key geographies. During this year, the Coromandel commissioned a technical plant at Dahej and is further expanding technical capacity at Sarigam. Bio business, where we are the large player in neem-based biopesticides, the demand for neem-based Aza received good traction during the year. Expanding beyond plant extracts, the company has built fermentation and microbial processing capabilities to diversify its biological portfolio. The launch of five biopesticides and three biofertilizers has strengthened its innovation pipeline with new products gaining good traction in the domestic market. We have completed the acquisition of 53% stake in NACL and also followed on with the rights issue of INR 250 crores to reduce the high-cost debt. So, the borrowing cost has come down significantly from NACL and we have brought in the best practice of Coromandel . We are now exploring the synergy opportunities between the two companies. NACL has made significant progress with revenue moving up by 28 % to register INR 1,585 crores of top line and EBITDA of INR 103 crores against last year’s losses. CIL is working closely with the NACL team on leveraging synergies across product development, manufacturing and sourcing. Talking about another subsidiary, Dhaksha, a drone company which is currently in a nascent phase with substantial headroom for growth. Focused efforts are being made to streamline operations and address early-stage challenges with a clear emphasis on driving improved performance in the periods ahead. The company is working towards building strategic collaboration and sharpening execution capabilities to fast-track product introduction, improve business development and service experts. Dhaksha and Coromandel have been working very closely to develop Agri drones specifically to address the need and provide comprehensive solutions to the farming community of India. Overall, Coromandel has reported strong operational performance in fourth quarter with revenue growing by 19 % reaching INR 6,068 crores and EBITDA growing by 16 % and reached INR 494 crores. It is pertinent to note that last year Q4 had exceptional income of INR 347 crores relating to land sale against the current year loss of INR 71 crores which we have taken towards impairment of investments. Hence, the reported profit is modest at INR 115 crores due to this variation of almost INR 420 crores between the corresponding periods. Operationally, we have done very well, including the fourth quarter where we took annual turnaround. We operated the plant full. In spite of the challenging situation which industry is facing due to certain spurt in global prices not adequately covered by subsidy rates , Coromandel has turned around with a resilient performance. There has been a compression in fertilizer margins. However, all other business segments like specialty nutrients , crop protection , retail business have reported healthy growth in revenue and profitability. On a full year basis, Coromandel has reported highest ever revenue of INR 31,827 crores and EBITDA of INR 3,232 crores. Recently acquired NACL has turned profitable and registered EBITDA of INR 103 crores. Coromandel has made significant investment of over INR 3,000 crores in the last two years across business segments, and I am sure this will generate target revenue and profitability in the coming period. I will now hand over to “Deepak to comment on the Financial Performance ” before I take any questions from the team here.

Thank you, Sankar. Good afternoon, everyone. The company recorded a consolidated total income of INR 6,068 crores during the quarter and INR 31,827 crores during the financial year FY25 -26. This is the corresponding period of INR 5,114 crores and INR 24,444 crores, registering a growth of 19% for the quarter and 30% for the full year. The subsidy business share in the revenue stands at about 75% for the quarter and 85% for the full year. From a profitability point of view, the consolidated EBITDA for the quarter stands at INR 494 crores against INR 426 crores in the previous year. On a full year basis, the consolidated EBITDA stands at INR 3,232 crores against INR 2,628 crores last year. The subsidy business share in EBITDA stands at 57% for the quarter and 66% for the full year. Correspondingly, last year it was 67% and 70%. The net profit after tax for the quarter stands at INR 115 crores in comparison to INR 578 crores in the previous year’s same quarter. That was essentially because of some of the exceptional items we had taken last year and this year. And the net profit after tax for the full year stands at INR 1,898 crores against INR 2,055 crores in the previous year. As far as subsidy is concerned, during the quarter, the company received INR 3,441 crores towards subsidy claims. For the full year, we have received INR 10,649 crores as subsidy. This compares with INR 8,082 crores we received last year. Subsidy outstanding at the end of March stands at INR 2,168 crores compared with INR 1,654 crores in the previous year. We have received subsidy claims till the third week of March 2026. While the subsidy outstanding at the end of the year is higher as compared to t he previous year, it has come down sequentially quarter -on-quarter from INR 3,785 crores at the end of September to INR 2,199 crores. As you may be aware, the government has also come up with supplementary grant of INR 1,500 crores for NBS in March and this has settled use in the month of March. Inventory has remained at slightly elevated levels, driven primarily by elevated raw material prices and certain incremental inventory that we have kept for our newly inaugurated Phosphoric acid and Sulphuric acid plant in Kakinada. We are also holding some level of strategic inventory considering the ongoing crisis in West Asia. During the quarter, we took an impairment on the investments and goodwill in the standalone and consolidated financial results of the company relating to the drones business. This is primarily due to long lead time in execution of certain orders. Managemen t believes the value of the investments to improve and has provided for impairment on a prudent basis. Finally on Forex, during Q4, the rupee traded in a very broad range of 89.75 to 95.23 which continued to pose certain level of challenges. Coromandel has continued to hedge its exposures on a conservative basis. Thank you.

Ladies and gentlemen, we will now begin with the question -and-answer session. The first question is from the line of Ahmed Madha from Unifier Capital. Please go ahead.

Yes, thanks for the opportunity. I have a few questions. Firstly, if I compare the consolidated P&L and standalone P&L, there is a gap. Obviously, NACL does not have incremental loss. I am assuming that this is coming from the mining entity BMCC and even the depreciation numbers are much higher compared to last year. So, if you can expand on how is BMCC as an entity placed in terms of financials, and also explain how the depreciation, amortization of the mining asset moves forward in next year and thereafter and how do you see the profitability trends of the BMCC entity?

The amortization expense reflected in the financials is more of an accounting treatment where the mining costs are also getting amortized. In terms of the financial health and performance of BMCC, it has turned profitable now. With the increased volume of operations, better absorption of fixed costs, improved efficiencies and market linked price, it turns profitable and it will improve its margin going forward with increased volume of production. When you do the consolidation accounting involving subsidiary, there are certain amount of the intangibles which get amortized over the period and that has gone into the accounts. While operationally standalone Nagarjuna has turned profitable at EBITDA level, but on a consolidated level, we need to have some amortization of certain expenses. It is more of a accounting between the acquisition value versus the holding value that gets amortized over the period. That way you see the change in the depreciation compared to standalone numbers.

Sure, makes sense. Secondly, on the margins of the fertilizer business for the upcoming season, how should one look at it considering the very nominal increase in the subsidy numbers about 10% while the raw material prices have gone up materially ? So how do you see government response coming in, whether there can be another sort of a price increase rather subsidy increase, which sort of happened in FY23 ? We were going through similar phase where raw material prices went up materially and govern ment again revised the subsid y. So how do you see the current situation and what is your broad sense of how you will be compensated for the higher raw material costs? Because I am assuming current subsidy and the MRPs are not sufficient for it.

You are right. Of course, industry has some benefit of the carryover inventory in the first one or two months. Farmers also will be able to have access to the opening stock of finished fertilizers, but the replacement cost is very high. One is the availability, another is the price. As I mentioned in my opening remarks, the prices of Ammonia, Sulphur have gone up exorbitantly higher and it definitely calls for additional compensation of subsidies, which we have taken up with the government. It is under discussion stage and they have positively looked at it and hopefully we should get the pass - through on these costs. Basic objective is to see that how best we can secure first and produce finished fertilizers and then try and see how we can maintain the price to the farmers at more or less same level. After additional subsidy if any gap still remains, we may have to correct the prices . These discussions are in early stages and in these extraordinary times, we do not want to put any number. We do not expect this scenario also to remain for a long time. We hope the normalcy gets restored once the supply side improves, we do expect things to be back to normal. Having said that, it is very critical for additional subsidies to come in beyond what has been notified as these rates are based on early rates. On MRP, industry has also taken some corrections in the last one or two months. As far as DAP is concerned, government given a pass -through last year and hopefully the same should continue now.

Sure. My third question was on the crop protection business. If you look at the performance in terms of standalone has been pretty good in terms of margin improvement. So, can you just elaborate how do you see overall opportunity with the NACL acquisition done now? The entity has been consolidated for about two and a half quarters. So, how do you see the opportunity in terms of export side, in terms of scale up of your agrochemical business? And Nagarjuna ’s NACL margins, how do you see the trend changing? A nd lastly, the standalone crop protection had low growth about 2%, 2.5%. Were there any factors that led to that? And how do you see the growth moving forward?

The standalone has grown well. We have grown to INR 3,053 crores.

Standalone crop protection, I mean.

Yes, I was also referring to crop protection. It is 15.8% if I am right. Revenue has grown significantly.

No, I meant for Q4.

Q4 is the off-season. I was talking about the full year.

Yes. Overall, as I said initially, that you have done well. So I meant just for Q4.

But in terms of the profitability it has gone up. O verall, on the crop protection business, we have done extremely well on all segments, whether it is global exports of active ingredients . For our key molecule Mancozeb, we have got a better volume growth as well as better realization. Our additional capacity, which came up in Dahej during the year, was quite helpful to meet the additional demand. In the domestic B2C market, we added territories and increased the volume. Our formulation business overall has grown by 15%-20%. We could have done much better, but for the challenges we faced in the rabi season, which is true for the entire industry. In Domestic B2B segment, where we do sell active ingredients to other institutional customers , w e have broadened the portfolio beyond Mancozeb and have scaled up well. Prices of most of the molecules also improved during the year, and that has resulted in improved margins. On a standalone basis , crop protection business has reached the record turnover and record profitability. As you ca n see, it is close to 19 % EBITDA margin and a revenue of INR 3,000 crores. This includes bio business as well, where the neem based bio products have recorded good export volume. We started our own channel in bio for domestic sale and have expanded the product portfolio with microbials and plant-extract products. On the NACL side, as I mentioned in my opening remark, overall turnover has grown by 28% and profitability has improved operationally. This has not added significantly to the bottom line, mainly because of alignment of major accounting policies in line with Coromandel, which has resulted in provisioning, which has reduced the net profit on a standalone basis. But capacity utilization of the technical plants have improved significantly. We are also looking at additional intermediate and technical capacities in the Dahej plant, which is currently operating at low level. Coromandel and NACL team s are working together for leveraging synergy benefits and cross-selling products across various markets, depending on the strength of each company. So, overall, on a consolidated basis, we have reached INR 4,000 crores. Margin of NACL has improved to 6% to 7%, and that is what we indicated in the beginning, and going forward next year with the change in product portfolio, that should stabilize around 9% to 10%. We need some time to introduce new products, register new products, introduce 9(3) formulations to significantly improve EBITDA in line with Coromandel. It would be difficult for NACL on a standalone basis to increase the margins unless new active ingredients and new formulations are introduced, which will take some time. So, currently, we can say we can restore the margins, what it was 7% to 8% percent, beyond that, it requires investment, which we will take a view at appropriate time.

Sure, sir. Thank you so much.

The next question is from the line of Ankur from Axis Capital. Please go ahead.

Hi, sir. Good afternoon. Thanks for the opportunity. First, if you can give the EBITDA breakup for the full year in terms of subsidy and non -subsidy? And the revenue breakup for crop protection in terms of B2B, B2C, and export and domestic.

Sorry. Come again. First one, what is it?

The non-subsidy EBITDA share for the full year, if you can share that, as well as the breakup for the crop protection business, breakup between export domestic as well as B2B, B2C revenues there for the full year?

Subsidy business share for Q4 is 57%. It is 66% for the year as a whole.

Sure, sir. And the breakup between export, domestic and B2B, B2C for crop protection?

You need this for the full year or for the quarter?

Full year, sir.

Coromandel crop protection business, right?

Yes.

The exports will be INR 1,450 crores, domestic B2B will be INR 700 crores and formulation will be INR 900 crores.

Sure, sir. That is helpful. So, as you rightly highlighted in terms of the growth that we have seen for the non-subsidy business as well as the strong operating profits, the margin expansion as well for the full year. Given the macro, one, is there any concern from an RM availability perspective for the crop protection business or even from a pricing perspective? And second, how do you look at the growth going ahead? You did allude towards NACL sort of cross-selling opportunity being there, but let us say on Coromandel’s own portfolio basis, what sort of growth are you looking at and sustainable margins there?

As far as raw material supply chain is concerned on crop protection, we are quite comfortable and we are fairly covered. I do not see any challenge. It continues to be available. And whatever input cost increase has happened because of global phenomenon, w e are able to pass -through. So, we do not see any impact on margin due to input cost. So, crop protection business is fairly comfortable. In terms of the growth opportunities, it is driven by active ingredient volumes - With Mancozeb’s additional capacity coming up during the year , that will be the major volume kicker for active ingredient. On the domestic formulation business, we are planning to grow aggressively by another 20%-25% because of the new registrations and will be launching six new products. We are increasing our import of active ingredients from China and also introducing new products in India. Overall, we can see a revenue growth of 20%-25% besides the capacity-driven growth in active ingredients which were mainly for the export market.

Sure, sir. And on the margins, do we think we will be sustaining let us say 19 -ish% non-NACL EBITDA margin for our business or -?

I do not see any challenge. And also, we should note that the currency depr eciation is helping this business with significant share of exports happening.

Sure, sir. That is very helpful. And just lastly, you did cover up in your opening comments on the raw material inflation on the fertilizer side, and our expectation that probably there could be another round of maybe an increase in subsidy from the government side. My question here was, one, given that Q1 is fairly there, but Q2, there could be RM inflation which could hit us. And what if the government is not increasing or maybe there is a delay in terms of increase in subsidy from the government side? Are we looking to increase the finished goods prices there as aggressively, because that will have an implication on your overall margins as well, so, how should one look at that part?

These are all very abnormal situations, very difficult to predict how long it will take. But it is very important both for the sector health as well as for the farmer benefit, that government response favorably. They are looking into it. For the production to continue and fertilizer to be made available to the farmers, we hope to have a early resolution through additional compensation to ensure that any further price increase on NPKs are reasonable for the farming community to absorb.

Sure, sir. Okay. That is helpful. I will get back into the queue if I have many more questions. Thank you and all the best.

The next question is from the line of Riju from Antique Stock Broking. Please go ahead.

Hi, sir. Thanks for the opportunity. Sir, the domestic and export revenue share that you have mentioned for the CP business, that was the standalone business or including NACL?

That is for the standalone business, they asked for the standalone business.

So, if you could mention like including NACL number for the Q4 for export revenue, that will be helpful?

I need to get back to you on export revenue. Overall revenue is INR 1,584 crores for the full year and INR 361 crores for Q4, but I need to just get back to you on domestic and export breakup. We will pass this on later.

Understood, sir. In terms of the fertilizer business, could you please elaborate in terms of the finished goods inventory that you have as on March ‘26?

It may be close to 5.5 lakh tons roughly of finished fertilizers.

This is entirely the manufacturing volume or including trading ones?

Trading is not much, probably 60,000-70,000 may be trading.

Understood, sir. And if I look at in terms of the Coromandel standalone CP business, so the growth was 2%. So, that was mainly because of this poor growth in the domestic market or it is mainly on account of both domestic and exports?

Sorry, come again. What you are saying?

If I have a look at Coromandel CP business for the standalone ones, the growth was 2% , 2.5% for the quarter. So, the primary reason was the poor domestic business growth or it is a mix of domestic and export, both have not performed well?

No, actually it is off -season in domestic market - but there also at least there is a volume increase. On exports, we have moderated the sale in fourth quarter as we have opportunities to sell during season time in April -May. So, it is a temporary slowdown in fourth quarter that will come back in first quarter. And form ulation business, anyway has grown well by 14% in spite of being an off - season period. Domestic B2B is more of a function of demand requirement and that can always be made up in first quarter. So, I do not see any major issue per se in any particular segment. The area where we have marginally de-grown compared to last year is in bio-product category, where we did exports in the fourth quarter of last year and we have executed this export order earlier in December, hence it is showing a de-growth in the current year. So, that is why overall CPC is looking marginal at 2%. Otherwise, overall for the year growth is 16% and that sort of a growth we do expect to sustain.

Understood, sir. One last thing so, if were to look at in terms of the global industry, specifically in the LATAM market, so LATAM market is struggling with the inventory issue. So, how do you see that market for your growth? And second part is that if I look at Mancozeb prices for the last maybe one or two months, so the prices have gone up roughly by 30% to 40% in the range. So, how do you assess that in terms of your Q1 performance? And second is that if you could share the unique grade contribution number in the fertilizer business?

I think our understanding is that de-stocking has already happened in Latin America market. We are not facing any challenge. And for Mancozeb per se, our cost increase is getting passed on. Also, our dependency is not only in Latin America. We have a widespread reach across various continents. So, to this extent, we are very comfortable and are awaiting for the new capacity to come up to increase our volumes and revenues in the coming quarters. I do not see any challenge in improving our margins or performance or sustaining the same in the first quarter.

Understood, sir. And the unique grades contribution for this quarter?

More or less remains the same. It remains at 35% on an annualized basis for the year.

Understood. Thanks for answering all my questions.

The next question is from the line of Somaiah V from Avendus Spark. Please go ahead.

Yes, thanks for the opportunity, sir. Sir, my first question is on Phos Acid price for the quarter. Has it been decided? That is one. And in the international market, if you were to procure Sulphur and Ammonia, what is the current pricing?

Phosphoric Acid price was fixed at USD 1,360 as against the previous of USD 1,290. The spread of Ammonia has gone up significantly. There are deals which are happening around $840, $850 range. That is where last we heard. And Sulphur is also around the same level, $800 price.

In terms of this backward integrated capacity that we have added last quarter, so, for the first half of this year, do we see any challenges in terms of raw material availability to run this at the fullest? And also, in terms of margin contribution, do we see to be accretive given where let us say Sulphur price is occurring?

These are very extraordinary times. Very difficult to look at margins at this point of time. It does not make sense even to look at either product margin or Phos Acid value gap. If you take current quarter Phosphoric acid price and try to project next quarter value gap, obviously it will be negative because this price increase of Sulphur and other input prices will come in the next quarter. There may be one or two challenging quarters, but it should get normalized and structurally the value gap what we originally envisaged will come through. I do not see any challenge in availability per se for running the plant because we have a good coverage of rock phosphate and with Senegal mines operating in full stream, and we are getting rock phosphate from there. For Sulphur, we have taken a lot of efforts. There is a visibility up to first quarter and as I mentioned going forward with things easing out, we should be able to secure raw material for second quarter as well. We have to wait and see how this Middle East crisis is playing out.

Understood, Sir. In terms of between Q1 and Q2, I think we should be having a fair idea of at least how things stand today in terms of our inventory that is there in the system, NPK subsidy that is being given and pricing that is happening. So, it would be fair to say Q1 i s kind of still manageable and Q2 is where definitely the subsidy support should come in or is it like in Q1 itself we need this incremental subsidy support?

Every day is a new day, we are not able to predict anything. This time it is a little uncomfortable for us to put any number on the table. Let us wait for things to play out before we can come to any fair understanding. It is bit challenging. Right now, we are focusing more on securing raw materials and having the production, ensuring fertilizer availability for the system. We are looking at support from Government, price corrections – situation is fluid at this stage I would say.

We will take the next question from the line of Akash Mehta from Canara HSBC Life.

Hi, sir, thank you for having the call. So, my first question is on the sourcing bit only. You said on the Sulphur front it is slightly challenging as of now. I mean obviously we have visibility of Q1 but going into Q2 it is a bit difficult. So, can you just help us with the current sourcing? I mean it was earlier with the Middle East so from where you are kind of man aging the sourcing for Sulphur and the raw materials, if there is any change? So, that is my first question.

We used to source predominantly from Middle East. Now we have diversified our sources, wherever Sulphur is available we are buying, and we have been getting some shipments from Canada as well. We are trying some domestic sources also. So, we are getting something from South Asian countries, Japan. So, we are looking at all the opportunities. It is quite fortunate that we have got our new Sulphuric acid plant in Kakinada in Q4. Sulphuric acid prices have gone significantly higher and hence it comes handy to have our own Sulphuric acid which in turn can generate steam and produce power. So, we have multiple sources. Right now it is more of a spot transaction which we are doing. Otherwise, the major source used to be Qatar Energy and Saudi.

Sure, sir. As of now there is no shortfall as such. It is available at a higher price. That is about it, right?

We have visibility up to June. We have to keep covering. So, hopefully situation should ease out. The major challenge is the bottleneck of the ships to cross. It is not Sulphur is not available. Sulphur is available in plenty. It is the movement of ship through the Strait of Hormuz which is making it difficult for us to predict anything. We are hoping things normalize and sailing time is not much between Middle East to India. So, for July, it is too early to predict whether it will happen or not. In a logical sense, it looks like it will happen.

Sure sir. My second question is, by any chance if you can just highlight on the subsidy front , again you cannot give a clear timeline when it will come through, but given the raw material price increase, any number you can just help us out with in terms of the implied increase in subsidy or the price on the last number and on peak percentage terms?

We have to wait and see. For the Rabi season, NBS rate formula will kick in and probably will get updated. What we are talking about is the intervening period of June to September where the raw material prices have gone up very sharply. So, it may be a cos t-to-cost reimbursement - so that we can cushion the sudden spurt in prices to a great extent while we arrive at the final price to the farmer. Very difficult to predict how much they will do. Like a pass-through in DAP, we are trying whether there can be a pass-through in NPK as well. We need to wait and see how it is going to happen.

Sure sir. That is it from my side. Thank you.

The next question is from the line of Darshita from DSP Asset Managers. Please go ahead.

Hi, sir. Thank you for the opportunity. I just had one question. Is there any key intermediate for Mancozeb that we import from Middle East countries where we may be facing any constraint for importing it?

Fortunately not. We are able to get everything from other countries. It is the only comfort we have in this raw material. Of course, we have some products but we have alternate sources. So, we are quite okay with it.

And we have been able to pass on the price increase even in the last two months , fourth quarter, of course, we can see that , but over the last two months also, we have been able to pass on the price increase.

Yes. And to some extent, the currency depreciation also has aided this to absorb some increase.

Got it. Okay. And not facing any shortage for sourcing the intermediate?

Yes. We had some small disruption in the month of April , but we have now looked at the alternate sourcing. Unlike nutrients, the import of these raw materials from China is quite okay. So, it takes time but it comes. We are fairly covered.

Okay. Got it. Yes. That is all. Thank you.

We will take the next question from the line of Vipul Kumar Shah from Sumangal Investments. Please go ahead.

Hi, thanks for the opportunity. So, in view of the raw material inflation, what should be our margin guidance as far as EBITDA per ton is concerned for the whole year?

Very difficult to predict at this point of time. Let us see how it goes because it is a function of what government is going to compensate and how much we are going to look at price corrections. It is very fluid. I do not want to put any number now. So, let us wait for things to get normalized. Once the situation improves and supply chain gets normalized, prices should come back.

Okay, sir. Thank you.

The next question is from the line of Sheel Kumar Shah from Sameeksha Capital. Please go ahead.

Thank you for the opportunity. My first question is what is our manufacturing EBITDA on fertilizer side, I mean per ton for 4Q and for the full year?

Last year, it was around INR 5,000 plus that we have mentioned and fourth quarter was compressed; it was less than INR 3,500 for fourth quarter.

Okay. And what about on the trading side, if you can share margins or EBITDA per ton?

It is too difficult to make. It depends on the grades, the timing of purchase, and there is a pass-through on DAP. So, different set of numbers are there.

But on an average, what type of margin would we be making on our trading?

You can take roughly 4% to 5% sort of a number.

Okay. And how do you see trading volume for FY27 on high days of FY26?

We have a challenge in availability, especially on DAP. So, we need to see how things improve. We doubt doing the same volume. And there can be a potential reduction in the first quarter because of non-availability, especially major imports coming through from Saudi may not happen. We also want to be conscious on working capital liquidity. So, we may not be pushing unless it is absolutely essential to meet the demand. But second half, I think, should get normalized. If things improve, the volume should come back. So, it is a function of availability in a quarter and our risk appetite.

Understood. And my last question is what would be the revenue for Nano DAP?

We marketed 45 lakhs bottles. I will come back to you on the revenue. I do not have it readily available.

Sure. Thank you.

The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead.

Hi, thanks for the opportunity. My question is related to th is Dahej capacity that which w e are expanding. So, how much additional revenue or asset turn if you can give, do we expect and what kind of I mean portfolio diversification it will have?

We expanded our capacity by 10,000 tons of Mancozeb. I will get back to you on the revenue on Dahej. But the payback will be much faster, less than one year. So, the investment what we have made in debottlenecking the facility gets paid off less than one year. In fact, we are expanding another 20,000 tons at Sarigam. That project is underway, and should come through by middle of this year. Hopefully, there also I think margins are pretty good and we should have a payback in a shorter timeframe of less than two years.

Earlier, we were evaluating in foraying into CRDMO. So, what stage we are in CDMO? I mean, how is the opportunity that we look forward, any further progress?

The CDMO takes long time, two, three years. And MNCs have responded favorably. They looked at the facility. They moved to the next stage. They take quite a long time. Two, three European entities have shown interest. And with the combined strength of Nagarjuna, we are able to fast track some of the intermediate manufacturing. We are looking at fluorination chemistry very seriously. While Nagarjuna has got the capability and we are going to invest on fluorination chemistry in the coming quarters to showcase it to the potential CDMO players. We are quite happy with this. Some of the Japanese collaborators are also keen to work with us. Things are progressing well. While it is not materially impacting the revenue in the current year, but I am sure two years down the line, we will have significant play in this space. We are trying to do it organically and we will scale up. We are not looking for big -ticket investment immediately . Looking at the current market situation , we wanted to focus on current investments what we have made, re alize the value out of it before we make any fresh investments on a large scale on CDMO space. But we are doing well organically. At this point of time, I am not able to put out the parties name, but things are progressing very well.

But could we see revenue from FY28?

It may go into the year after that also, because once they get the proof-of-concept ready and they start listing the product and then agree to the costing, margins. But we will start creating some capacities of smaller scale this year and that will go into production next year. So, some revenues will come in, but significant can come in a year after.

Now, with this price increase substantially in this fertilizer, how should we think that adoption of Nano DAP, I mean, going ahead, say, post-harvesting?

Ideally, this is a great opportunity. Like in COVID, many things have happened. I wish farmers ’ adoption increases. We are trying to do and promote balanced nutrition. But as long as you have urea and DAP available at an highly subsidized price, this situation may be difficult. So, unless there is a major policy correction that restricts the availability in terms of actual need for the marginal farmers, this adoption will be slow and steady . We are also not in a hurry to push through - the product is working well and it can replace shortage situations and be a boon to the farmers. That is all I can say.

Last question with your permission, Any update on Dhaksha?

A good question. Thank you for raising this point because we have taken the diminution in the value of investment relating to D haksha. As you know, we have got a large order which is pending for execution and we have fixed all the technical -related gaps and we are awaiting for the execution of orders. We have made significant progress on introducing new products, a lot of projects have been identified, a lot of partnerships have been identified , and we are seeing good traction coming from the defence segment after the usage of drones in various warfare. Besides that, in Agri, Coromandel and Dhaksha have been working very closely. We have come up with new products . We are going through type certification. In Agriculture, drone response has been extremely good from the farming community and we will be scaling up volume . We are participating in the institutional tenders. We are also looking at drones for various institutional applications and trying to develop the complete ecosystem for Dhaksha by tie-ing up with the various component manufacturers, whether it is for batteries or cameras or various other electronics components and software development. Dhaksha will be moving to a larger place, and hopefully this facility should be ready by May. A lot of progress is happening and I think we are in a good recovery mode. After we execute the first order during this year, that will give us the confidence to have repeat orders across various segments of defen ce. Meanwhile, we are also strengthening the R&D and are going to introduce new products over the next six to nine months. We will try and realize the value of investment what we have made. We are a bit ahead of time, but it is going to make a difference in the next two years.

Thank you very much, sir, and all the best.

Thank you.

Ladies and gentlemen, we will take that as the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you and over to you, sir.

Thank you very much. Thank you for the insightful questions and I know it is a challenging time and definitely I am sure we will do our best to serve the farming community. Thank you for your continued support.

Thank you, members of the management. On behalf of Elara Securities, that concludes this conference. We thank you for joining us and you may now disconnect your lines.