Deepak Fertilisers and Petrochemicals Corporation Limited (NSE: DEEPAKFERT) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Sailesh Mehta — Chairman and Managing Director
Subhash Anand — President and Chief Financial Officer
Analysts:
Pratyush Kamal — Analyst
Nirav Jimudia — Analyst
Jainam Ghelani — Analyst
Hardik Gori — Analyst
Parth Kotak — Analyst
Viraj Mahadevia — Analyst
Sharan Mandi Kaur — Analyst
Harmish Desai — Analyst
Darshil Jhaveri — Analyst
Vignesh Iyer — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Deeper Fertilizers Q3 FY ’25 Earnings Conference Call, hosted by InCred Capital Wealth Portfolio Managers Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr Pratyush Kamal from InCred Capital Wealth Portfolio Managers Private Limited.
Pratyush Kamal — Analyst
Thank you. Good evening and welcome to the third quarter FY25 earnings call of Deepak Fertilisers and Petrochemicals Limited hosted by InCred Equities. From the management, we have Mr. Sailesh Mehta, Chairman and Managing Director; Mr. Subhash Anand, President and Chief Financial Officer; Mr. Suparas Jain, Vice President, Corporate Finance; and Ms. Pallavi Bhalla, Head of Investor Relations.
I would like to thank the management for giving us the opportunity to host this call. We will begin the call with opening remarks from Mr. Mehta followed by Mr. Subhash Anand for update on financial performance, post which we’ll have a Q&A session. Thank you, and over to you, sir.
Sailesh Mehta — Chairman and Managing Director
Thank you. I hope my voice is clear, Pratyush?
Pratyush Kamal — Analyst
Yes sir.
Sailesh Mehta — Chairman and Managing Director
Okay. So good afternoon, ladies and gentlemen. I would once again warmly welcome each of you for the Q3 FY 2025 earnings conference call of Deepak Fertilisers. As usual, I hope you have had a chance to explore the detailed earnings presentation and looked at some of those numbers.
But just as — at the outset, let me share that it’s a happy situation for us to share that our consolidated revenues have surged by 39% and we have crossed INR2,500 crores for the quarter. EBITDA saw a very good smart 72% increase, bringing our EBITDA to almost INR486 crores. I guess, this is the highest in the last five years same quarters. EBITDA margins also have improved significantly. They climbed up from 15% to 19% and net profit surged by 318% reaching almost INR250 crores plus.
So one common denominator and obvious underplay has been the volumes growth in each of the products. But what has gone behind this and what we feel will be giving a very strong foundation for sustainability is something that I would want to share with all of you.
So there are five or six strategies that have been at play since the last few years and we are seeing stronger and stronger validation of some of these in terms of what we see in the quarterly results also. Some of these may be a repeat for some of you who have been with us in every of these calls. But nevertheless, I am restating these because it is giving us a very strong confidence about the validity of some of these strategies at play. So number one is that we are seeing a continued strong validation of the beautiful alignment that all of our three businesses are having with the India growth story.
So as India needs coal for power, limestone for cement and all the push on infrastructure, it provides a very strong tailwind for our mining chemicals, technical ammonium nitrate. As far as the increasing income levels and the shifting food habits towards fruits and vegetables, we see a very good alignment with our crop nutrition business and then the China Plus One and the push towards specialty chemicals is giving a very good impetus to our building block chemicals, nitric acid in the industrial chemicals business.
So one aspect that is definitely getting validated is a beautiful outside in strong alignment with the India growth story for all three of our businesses. When we look at it from the inside out, the tremendous hard work that we have put in, in terms of bringing in operational excellence is something that is also helping to further build on the outside in alignment and the demand drivers that are emerging from the economy. So we have seen anywhere from 85% to 105% capacity utilizations and concerted effort that we had put by way of cross-functional teams to look at every single reason for a downtime in the last three years and then attacking that by way of proper thrust on repair, maintenance, condition monitoring, preventive maintenance, those all have been bearing fruit.
In addition, we are also bringing in now very strongly at the manufacturing end, all the smart factory initiatives. And that is also helping us to have a much better control, section by section, process by process to look at efficiencies which could be globally benchmarked. And at the overall level we have — we are finding very good benefits out of the IT-driven S&OP systems, the sales and operations planning systems that we had put in place where right from raw material logistics, operations and marketing, there was a clear IT-driven loop that has been helping us to plan and plan in a fashion where we can allocate raw materials to the best possible end use. So that has been one aspect that has — at an undercurrent of the results that you see.
Of course, the second one riding on this India growth story, our CapEx program where we have said that look, if all the three businesses are so beautifully aligned, the most clear growth strategy has to be — to be doing more of the same. And from that perspective, post our — some years back we had added capacities in the fertilizer business, in the nitric acid business, as we see in a year’s time, we should have our additional capacities of technical ammonium nitrate at Gopalpur and the additional facilities for nitric acid at Dahej also come alive. These CapExes also will ride on both the strong alignment with India growth story, but so also our solid 40 years of knowledge and experience in the space. And it will also of course take good advantage of the distribution networks and customer bases that are already in existence.
The third aspect as a strategy at play that we are seeing getting validated by this quarter and of course it will continue, which is the advantageous backward integration that we have done to strengthen the whole value chain by our investments in the ammonia facility, a world-scale ammonia plant. Ammonia being the key raw material for all the three business lines. And now the ammonia plant is stabilizing at higher and higher levels. And this is something that is going to continuously give us the solid advantage at the foundation level for the complete chain of products, particularly amid the geopolitical uncertainties, this is going to help us to navigate the market volatility and bring a competitive edge.
The fourth undercurrent strategy that is at play and which is also going to as time elapses, it’s going to get more and more stronger in terms of its delivery and impact has been the transformation from commodity to specialty. And this strategic pivot that we are bringing in, it’s powered by very strong R&D efforts, consumer and market segmentation to make sure that we move from customer to consumer in each of our products, in each of our business lines, moving from pure product to a holistic solution.
So somewhere the efforts that we have been making to bring in steel-grade nitric acid or pharma-grade IPA in the chemicals sector or in case of the mining chemicals, we are bringing in the total cost of operation, meaning covering not just technical ammonium nitrate but also blasting services and holistic offering to raise the mine productivity.
And lastly, but in a major way, if we see this quarter seeing the positive impact of our drive to move the crop nutrition business from commodity NPKs to crop-specific NPKs and that is really bearing good fruits by way of very good acceptance in the marketplace that these, I would say unique fertilizers, performance fertilizers, if I might put it that way, are giving very clear improvements in yield and improvements in quality for our farmers.
Last but not the least in terms of the strategic drivers at play has been the corporate restructuring that we have completed and now we will see in the coming quarters and of course the years ahead in terms of this enhanced focus, so now each business is going to be housed in a separate corporate entity which will have then right from the board member to the lowest officer, very sharply focused on the requirements of that particular business and the requirements of those specific consumers for that business in terms of operations and work culture and all that is required.
So these five have been the strategic drivers at play and that is behind the quarter’s performance as well as, as we see the quarters ahead and the years ahead. Because each of these strategic player — strategic drivers have a very solid muscle power that will help build on the foundation that has been created so far.
Now, as far as the details of the quarterly financials goals, let me hand you over to Subhash Anand, who will take you through the details and then of course, we’ll be available for clarifying any other questions that you may have. Subhash?
Subhash Anand — President and Chief Financial Officer
Thank you. Thanks, Mr. Mehta. And good evening, everyone. Thanks for joining us today. I am pleased to share that our Q3 FY25 results reflect the strength, resilience, effectiveness of our strategic initiative over the past few years. These efforts have enabled us to achieve robust growth across key business segments, reinforcing our commitment to delivering sustainable value.
Starting with our financial highlights for quarter three FY25, operating revenue stood at INR2,579 crore, marking a strong 39% Y-o-Y growth from INR1,853 crore of Q3 FY24. Over the first nine months, revenue grew 15% Y-o-Y to INR7,607 crore compared to INR6,590 crore in nine months FY24.
Operating EBITDA surged 72% Y-o-Y to INR486 crore up from INR282 crore in Q3 FY24. Our EBITDA margin expanded by 362 basis points from 15% to 19% this quarter driven by optimized business mix, pricing strategies, cost effectiveness and other initiatives was Mr. Mehta just explained. Over the nine-month period, EBITDA grew 70% to INR1,445 crore with margin expansion of 611 basis point to 19%.
On net profit front, Q3 FY25 came to INR253 crore, reflecting an impressive 318% Y-o-Y increase from INR61 crore in Q3 FY24. On a nine-month basis, net profit grew 181% to INR666 crore from INR238 crore in nine months FY24, that net margin expanded by 652 basis point to 10%. Just to bring attention, the profit — net profit do include one-time tax provision reversal of INR40 crore. Even excluding this, our profit margin stand at 8.2% for quarter and broadly similar number for nine months. These results underscore our ongoing commitments to cost efficiencies, margin enhancement and successful execution of our strategic priorities.
Now, let’s take a closer look at performance across our key business segments, starting with Mining Chemicals. Our Mining Chemicals segment delivered a strong performance in quarter three FY25. Sales volume of TAN increased 19% Y-o-Y to 129 KMT up from 108 KMT in quarter three FY24. Over the first nine months, the sales volume grew 5% reaching 372 KMT. Our premium product, LDAN saw a 10% Y-o-Y growth in quarter three and 16% Y-o-Y growth for first nine months.
Looking ahead quarter four, typically a peak production period for mining and infrastructure activities. We expect increased demand coming from coal, cement, steel sectors, which recorded roughly 6% to 8% Y-o-Y growth in quarter three FY25. This should further strengthen demand for our TAN business.
On an Industrial Chemical front, despite global challenges, our Industrial Chemical segment demonstrated resilience. Nitric Acid sales volume rose 4% Y-o-Y in quarter three though there was a 3% decline over a nine-month period due to increased import of low cost nitroaromatics impacting downstream asset customers. On an IPA side, sales grew 36% Y-o-Y to 17.48 KMT in quarter three FY25 compared to 12.8 KMT in quarter three last year.
Over the first nine months, sales increased 4% to 48.89 KMT primarily driven by robust demand from pharmaceutical sector. Looking forward, nitric acid demand and margin expected to remain stable. Meanwhile, IPA margin which has seen some pricing pressure likely to improve gradually aided by AntiDumping Duty on IPA and narrowing Phenol-Benzene spread, which should enhance profitability in the coming quarters.
Our Crop Nutrition business delivers strong results in quarter three FY25. Manufactured bulk fertilizers grew 64% Y-o-Y reaching 231 KMT. Over the first nine months, sales increased 52% supported by above-normal monsoon rains in the key operational region. Our flagship products, Smartek and Croptek experienced outstanding growth with volume rising 186% and 56% Y-o-Y respectively. Specialty fertilizers such as Bensulf and water-soluble fertilizers saw an 8% Y-o-Y increase reaching to 19 KMT. Favorable water conditions, improved ground-level availability are expected to sustain growth in the coming Kharif season.
On a project CapEx front, as we communicated earlier, the current capacity utilization is almost at a very high level or a peak level. So we are this point of time more constrained on a supply side rather than on a demand side. Company has undertaken two capacity expansion projects, Mr. Mehta talked about, one in the Dahej, other in Gopalpur, Odisha. The both projects in next 12 months or I’ll say H2 of coming year, we do expect both projects to go live and start adding to our capacities. Project execution is currently in line with plan and expected to start production as we spoke earlier somewhere — sometime during H2 of next year.
In summary, our strong performance in quarter three and first nine months of FY25 reflect the successful execution of our strategies. Our focus on backward integration, shifting from commodity to specialty and driving manufacturing excellence has positioned us for a long-term sustainable growth. We remain confident in our ability to continue delivering value to all our stakeholders.
Thank you. I now welcome any questions you may have.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] First question is from the line of Nirav Jimudia from Anvil Wealth. Please go ahead.
Nirav Jimudia
Yeah, good afternoon team, and thanks for the opportunity. I have a few questions to ask. So first is when we see our current run rate of TAN and WNA production, our ammonia requirement comes to close to around 4,25,000 tonnes. And once our expansion of TAN and WNA goes through, I think this requirement will go up to 6,20,000 tonnes. So just wanted to understand from you, let’s say, for the Gopalpur project, how we are placed in terms of our ammonia requirements? So the ammonia would be transported out of our Taloja plant to the Gopalpur plant, this is how the system would work like.
And also if you can share in terms of how both our plants are currently operating on, let’s say, one old plant of 1,38,000 tonnes and the newly commissioned 5 lakh tonnes of ammonia plant, if you can just help us.
Sailesh Mehta
Okay. Just to share our ammonia plant capacity is 5 lakh plus. Yeah, no, I’m talking the new plant of PCL which we have set up is 500 plus — 500,000 plus capacity and the old one is around 136,000. Now currently our requirement, the new plant takes care of our current requirement what we have. So the old plant is, we are keeping it — or we are not running at this point of time.
Coming to the new plant, once Gopalpur and Dahej comes up, yes, our demand goes up. Current Taloja will not be able to cater to entire capacities. And we have planned to import and feed the ammonia through imported crude to our newer capacity what we have. In fact, the capacity which is coming up in Eastern Coast is much beneficial. We import and utilize that ammonia rather than shipping from Taloja to those locations, so that commercially — it makes more sense to import and run that plant in that model.
Nirav Jimudia
Got it. So that is a requirement of close to 1,30,000 tonnes of ammonia for the new TAN would be imported and whatever is excess produced here at Taloja would be solely at the merchant rates in the open market, right?
Sailesh Mehta
Yeah. We have all the options available. We can do this, whatever commercially more suitable for us. If selling in merchant market and importing in Gopalpur or in Dahej is viable option, we’ll do that. If shipping is cheaper, we can even do that. So we have both options. We’ll evaluate what makes more sense at that point of time.
Nirav Jimudia
Got it. And the number of 4,25,000 tonnes of current requirement of ammonia consumed in the current production is correct in terms of the calculation and probably safe to believe that the balance 75,000 to 80,000 tonnes is getting sold in the open market by us, given the 5 lakh tonnes of newly commissioned plant.
Sailesh Mehta
Currently plant is running at a good capacity utilization, ammonia plant. So — and yes, the surplus capacity what we have in ammonia plant, we are able to sell in the merchant open market or a merchant market so that — that continue to be there.
Nirav Jimudia
Correct, correct. Sir second question is on the IPA side. So like — one thing is like we have been consistently running at our plant close to 100% and with now ADB also in place, any plans to expand here and if you can just correlate with this in terms of the initial remarks from the Chairman that we have been trying to move from the commodity side of the business to the specialty side of the business.
So one thing which is being alluded in the presentation is the electronic-grade IPA which — which has been highlighted on. So if you can share, let’s say, out of INR1,100 crores — INR1,150 crores of turnover which we have reported on the chemicals side, considering both TAN and industrial chemicals, how much is currently the share of specialty and going forward, let’s say, over next two, three years, how this share would look like?
Sailesh Mehta
Okay. In fact currently IPA, you are right, we are running it almost full capacity. This is how it is and we do see demand continue to grow on this. There are more, I’ll say opportunity to move more and more towards specialty in IPA. We are already moving in pharma-grade IPA that’s already running or already in place. On top of that, we are also — we are also looking our chloride, which is I’ll say add — value-added product for clinic or in pharmaceutical sector I call it. So we are even in that size.
Going forward, IPA getting into electronic-grade semiconductor is the opportunity or what we call it high-purity chemical, is an opportunity for us in this space. We are in a stage where we are exploring all these opportunities and once we have a more, I say solid case and we understand it’s going to add value to our business, we’ll take that forward. But yes all remain on our — in our considerations to discuss and see what opportunity we can encash going forward from this.
Nirav Jimudia
Okay, correct. Sir, any numbers which you can share, let’s say, out of current revenue numbers, what according to you could be a share of specialty in the current sales and how much is imminent to take it to, let’s say, over next two, three years, if some qualitative understanding would also help sir. Hello?
Sailesh Mehta
Can you hear me?
Nirav Jimudia
Yeah, sir. So your voice was not audible, if you can just —
Sailesh Mehta
Is it better now?
Nirav Jimudia
Yeah, yeah, it’s better now.
Sailesh Mehta
Okay. Our — if we see our total IC business specialty which we — specialty what we sell out of the total. Company wide, we are almost at 20% share of specialty which comes to — comes through specialty in our overall revenue. On IC side, this is a — this is a place which is catching up in next few years, it will be much bigger but currently IC business contribute almost double-digit overall total revenue what we have.
Nirav Jimudia
Got it, got it. And sir —
Sailesh Mehta
Going forward, this percentage split will be — will be much better because the way our focus is more and more growth initiatives are towards specialty side. So our intent is to grow specialty share to the total business to a larger number.
Nirav Jimudia
Got it. So just a last clarification on the supplies of LNG from Equinor. So if you can just help us in terms of when the supply could start on and how much in the first year of those supplies will help us to suffice our total requirement of gas for us. Thank you, sir.
Sailesh Mehta
The supply starts from next year first quarter. Yeah, no, I’m talking financial year. So FY27 first quarter of next year the supply from Equinor will start and once it starts, it will take care of entire our requirement what we have.
Nirav Jimudia
Correct,sir. Thank you so much, sir and wish the entire team all the best.
Sailesh Mehta
Thank you.
Operator
Thank you. The next question is from the line of Jainam Ghelani from Svan Investments. Please go ahead.
Jainam Ghelani
Thank you for the opportunity, sir. Sir, just carry on with the Nirav’s question in terms of our new project which is coming in Gopalpur, the 10th. So assuming that you will be importing an ammonia. So what will be the IRR that we are expecting on the — both the new projects that we are commencing in the second half?
Sailesh Mehta
Okay. IRR will not be very different because even the way — the way we do run our business currently also. But the TAN business and the transfer of or — I’ll say the intercompany sale happens at a market value or it is international price value, so the profitability which TAN has, even if they start importing, it will continue to be at a similar level.
Jainam Ghelani
Means it will be in the high teens or early-20. I mean can you give a qualitative things on that front.
Sailesh Mehta
It will be high teen.
Jainam Ghelani
Okay. IRR is in the high teens. And on the current utilization, I mean the current capacity that we are having in Taloja and what is the captive consumption, if you can help us in terms of quantity numbers, annually, how much do we consume captively ammonia?
Sailesh Mehta
Majority of the ammonia gets captively consumed, small quantity which we are left over at this stage goes in the market. So if you are looking a number out of the total, I’ll say 80%, 85% is captive consumed.
Jainam Ghelani
80%, 85% is captively consumed. And in the last quarter, I mean what was the actual savings that we got from the ammonia facility? Because we operated almost at a rated capacity. So what are the savings that came from the ammonia for us in the Q3 numbers?
Sailesh Mehta
Okay, I will not give you very specific number, but as we spoke earlier, the moment we have ammonia price crossing $400 plus, we start reaching more and more near towards — near breakeven points. So last quarter was a tenth — was the time when if you see all three months average ammonia prices were $400 plus.
Jainam Ghelani
Yeah.
Sailesh Mehta
We were almost at break even level when it comes to ammonia business.
Jainam Ghelani
No, but if you look in the previous quarter which is a Q2 call, Mr. Rastogi has clearly mentioned that the annual savings was INR45 crores to INR50 crores when the ammonia prices were just crossing $400. And in the last quarter, it was more than $410, $430 if you look on the last three months basis. So is it fair to assume that saving was towards the INR100 crores or it was lower than that?
Sailesh Mehta
If you’re looking EBITDA level, yes, savings are — I’m talking we were at — almost at breakeven at PBT level. EBITDA contribution was much higher than what number — what Mr. Rastogi talk about. The moment we cross $300 — we cross almost $300, $350, our EBITDA is breakeven. So the — and last quarter we are — we were at $400 plus. So we have generated money out of that. Our EBITDA was — I’ll say contributed significantly and it has added to our numbers.
Jainam Ghelani
And in terms of month of January, we are back to breakeven because the ammonia prices as for your presentation is $370 per ton.
Subhash Anand
Yeah. This is a normal trend. If somebody looks at ammonia on a longer duration, normally, the prices of ammonia do come back in quarter four, remain soft in quarter four and early part of quarter one and then again it start going up. So nothing unusual, nothing unexpected. This is a normal trend which this commodity follows.
Jainam Ghelani
Sir, last question, I mean, I know we shouldn’t look at the numbers on the sequential basis, but if you look at our chemical business, I mean TAN business and IC business, definitely, we had seen an overall increase in the revenue, but because of a higher volume. But on the realization front, there was a dip in the TAN business also and as well as in the IC business. So how do you see the realization playing out in the Q4 and probably in full year of FY26?
Subhash Anand
No, it’s a seasonality which comes in. I’m not say if anything very specific thing happens every quarter or if you see annual result every quarter, the prices or the volume moves into that thing. It remain in the range. It’s not something which is exceptional or abnormal what we see in the last quarter. So we do see our margin will remain in a stable range and we continue in the same trajectory.
Jainam Ghelani
Yeah. And sir, any update on the monetization of the non-core assets that you are looking at it, which is the Pune Mall and…
Sailesh Mehta
We haven’t reached a conclusion at this stage. It’s still under discussion and we see what is the right strategy for us to move forward. We’ll let the market know once we reach to any decision point. This point of time, it’s very well there and we are operating well. But at some point of time, we’ll come back.
Jainam Ghelani
And in terms of the demerger, I mean NCLT approved our scheme on June 28. So what is the status on that?
Sailesh Mehta
The demerger, if you ask technically, demerger is over. All three entities are now independent entity, even operating independently. But they continue to be a subsidiary structure. The DFPCL is a main parent entity and both MAL and DMSL are subsidiary of DFPCL operating independently. So this is what the structure is.
Good thing which has happened with this restructuring, since all entities are now independent, each business is highly focused on their key strategic lever, how do they take their business to the next level and how do they move from commodity to specialty. So the lever which was earlier focused on at entity level, now each business is charting out its own growth path and moving in that direction. So that’s what we — where we are at this point of time.
Jainam Ghelani
Sure, sir. And last on the debt front, I mean if you look at last September, we closed the first half at INR3,776 crores of the debt. Now with both these expansion coming in the second half of FY26, what will be our peak debt in FY26?
Sailesh Mehta
Our current debt is — net debt is around INR3,250 crore kind of a thing. Since we are in a capacity expansion mode and next year when — our peak debt will be sometime towards H2 of next year when our growth project gets completed. We will be in the — in a range of — I’ll say we’ll be around INR5,500 crore kind of a net debt and that will be the peak that what we expect to touch. But that will be a gradual increase. And once our plant becomes operational, we’ll start generating enough cash. So what we see, we don’t see challenge in terms of overall debt level because we see this is a temporary phenomena for us. If you see our operational results, we are generating cash. So it’s a matter of some time when we again come back and then impair our debts and bring back to a much much comfortable level.
Jainam Ghelani
So INR5,500 crores of the net debt which one are looking at the end of FY ’26. And if you look on the demerged entity, then the larger portion of the debt will be on the chemical business, right, and then not on the IC and the Smartek business.
Sailesh Mehta
The investment is happening. If you see an investment, Gopalpur investment is TAN business and Dahej investment is IC business. So the — TAN business is DMSL. So some of the debt will be sitting in DMSL. And IC business, that will be in DFPCL books.
Jainam Ghelani
Sure, sir. That’s all from our side. Thank you and all the best.
Sailesh Mehta
Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management has enough time to address all of your questions, we kindly ask that each participant limit their questions to two. Next question is from the line of Hardik Gori from Alpha Plus Capital Associates. Please go ahead.
Hardik Gori
Thank you for the opportunity. This year, we have added approximately 15,000 — 50,000 TAN capacity. So sir, is I wanted to understand is there any leeway for debottlenecking within the Taloja facility?
Sailesh Mehta
In fact, as a part of our ongoing operational efficiency, we keep looking opportunity for debottlenecking. It’s not the first time we did and this won’t be the last time which we are — we will be doing it. So we have a program which what we call it CFTs. And one of their objective is to keep looking opportunities how we can debottleneck. So there are plans to debottleneck and add lines in the existing Taloja facility itself. Not immediate in short term, but since each of these debottlenecking do take time, so over a period of time, some debottlenecking is expected.
Hardik Gori
Got it, got it. That’s helpful. And what is the remaining CapEx out of total cost of INR1,900 crores of CapEx for nitric acid and INR2,200 crores of capex for TAN?
Sailesh Mehta
The total CapEx which in fact if we — if I recollect, we spoke about total CapEx on these plants are expected to be around INR4,500 crore. Spend till now is around INR1,300 crores. So balance is — which is expected to be spent from quarter four of this year to — till the next year project completion.
Hardik Gori
Got it, got it, got it. That’s really helpful. Thanks for taking my question.
Operator
Thank you. The next question is from the line of Parth Kotak from Plus91 Asset Management. Please go ahead.
Parth Kotak
Hi, Sailesh ji, thanks for taking my question. Sir, I have a couple of questions. First on the fertilizers bit. We’ve been seeing encouraging numbers from the crop nutrition business. Just wanted to get a sense of what would be our sustainable EBIT margin from this piece of business. We’ve been talking about 9% for the current quarter, 8%. Is this the sustainable level or is there further room for improvement?
Sailesh Mehta
Okay. We — normally, we don’t talk about business-specific EBITDA numbers. But this business if you see, yes, it’s a single-digit margin business, and we do see with our focus what we have on specialty, the way we are moving our business and going towards specialty, our intent is to move this margin up. We are seeing every quarter or quarter-on-quarter, this shift is helping us to expand margin and this journey will continue.
Parth Kotak
Perfect, sir. That’s very encouraging. A lot of my other questions have been answered. One another piece and probably a little too early to talk about this strategic demerger, but maybe if you can just throw some light on how do you see Deepak Fertilizers evolving over the next five years in terms of business mix, profitability and growth focus that would be really helpful.
Subhash Anand
Okay, that’s — I’ll say two longer version or two longer vision. But if you ask me, the early part of our call, Mr. Mehta, do speak about the way our business — we are seeing this business, our business will move more and more from commodity to specialty. Each business now with the — after demerger is looking into their growth charter plan. How do they move more into specialty like TAN business, we are talking about moving from pure TAN to PCO kind of an approach, which is state getting connecting with mine owners or with infrastructure project owners. So we not just control TAN, but we participate in entire value chain of this business.
Same way, C&B, if we talk about crop nutrient business, if we talk about, we have a strategy or we are internally looking how do we do 5x in this business. The recent if you see our collaboration with Haifa, that also is basically with the intent to bring more specialty product into the Indian market. So all those opportunity in this business has been looked.
I just spoke about IC business some time back bringing more high-purity chemical into our fold. Looking into IC — looking into adjacencies which are the places or which are the business which has I’d say synergy where we can expand those business into specialty. So all those pieces which we are part of our strategy are in discussion and getting discussed to draw a next five-year roadmap. Plan is to share or get a much bigger share of specialty business and expand the margin portfolio — margin profile of entire Deepak portfolio. That’s what we are looking into.
Parth Kotak
Perfect, sir. That’s very encouraging and wish you all the very best for the future. That’s all from my side. Thanks.
Subhash Anand
Thank you.
Operator
Thank you. The next question is from the line of Viraj Mahadevia from MoneyGrow India. Please go ahead.
Viraj Mahadevia
Hi, this is Viraj here. So a quick question. How much of the performance is being driven by geopolitical events, particularly with Russia reducing dumping of TAN into India? And is this sustainable in terms of our current TAN production? Is it on par with Russian landed TAN cost?
Subhash Anand
Okay. In fact, if you see this year, we haven’t seen much impact on TAN because of geopolitical whatever incident, what we have, last year definitely has much bigger impact on the business. This year, it’s normalized I call it. So whatever performance you see on TAN business is actually a sustainable normal business performance.
Viraj Mahadevia
Okay. Excellent. And in terms of the landed cost of Russian TAN in India versus our production costs. Is there a big difference?
Subhash Anand
No. At the end, we are competitive in the market. Our strategy is very clear. Being a player and being a I’ll say sustainable player in India, we will charge premium to the imported price and that strategy will continue to play.
Viraj Mahadevia
Right. And clients are seeing value in having a second local supplier even if they’re buying some imported TAN.
Subhash Anand
Yes.
Viraj Mahadevia
Thank you. All the best.
Operator
Thank you. Next question is from the line of Sharan Mandi Kaur [Phonetic] an individual investor. Please go ahead.
Sharan Mandi Kaur
I saw this time there is a mention about cartridge-based explosives in the presentation. Is it a new product and what’s the potential and market share of this cartridge-based explosive? Are you able to hear me?
Subhash Anand
Oh, this is basically TAN business downstream — downstream business, what we are talking since we are saying we are going to move into the entire value chain of TAN business currently with the mine owner discussion. So as a part of that we are doing, I call it some of the concept testing and we would have gone and done some part of, I’d say, that product. But currently, that’s not sizable in our overall portfolio what we have.
Sharan Mandi Kaur
Okay. And where it is used, is it only in the mining or it is used in defense as well?
Subhash Anand
No, we are not in defense this point of time.
Sharan Mandi Kaur
Okay. Sure. And follow-up question on that for the mining, if there is any software required for mining services, is it completely done end-to-end in house or you have any partnership with any other IT company like do you have dependency on IT company for that?
Subhash Anand
No, it’s actually part of our TCO team. They do have software support and we have — we have, I’d say, developed those software internally and also taken a help of external advisor or a consultant, I call it. But yes, to drive our TCO business, software is something which we have our right and proprietary right and on which we are working on.
Sharan Mandi Kaur
Okay. And like since you mentioned already, most of the existing capacities are running at maximum utilization levels and the next big CapEx is coming in the next year second half. So till that time next three to four quarter, what will be our growth driving factors? Because we are already at maximum utilization level for existing ones. Next CapEx is almost three to four quarters away. So in between these couple of quarters, what will be the growth factors?
Subhash Anand
No, in fact the driving factor will be getting into more and more profitable segments, the customer segmentations and looking how we can sell it in more profitable places and segments rather than selling and capturing anything in everywhere. So we’ll be segmenting the market and looking more profitable growth rather than a growth. Second thing, a capacity debottlenecking what we did will help us to utilize for next full year plan. Third thing, not in TAN business, but other business, we do have debottlenecking in NPK and ANP. So, that’s an ongoing process. So we’ll get the more capacity coming from those businesses.
Sharan Mandi Kaur
Okay, and can you throw some light on this semiconductor and solar-grade IC chemical and any partnership or vendor we have onboarded and supplying to them, is the semiconductor and solar is already in place, right now?
Subhash Anand
No, in fact, these are the specialty business in IC what we are working on and growing it. We do have, in fact, in-house capability through which we have developed it. But specific detail what you are looking, we normally — we don’t share. That’s a very specific business detail, so that we will not be able to share in this call.
Sharan Mandi Kaur
Okay. But we have started already supplying the specialty chemical, industrial chemicals for solar and semiconductor?
Subhash Anand
We do have share of those business. Not — we not just started this year, it’s an ongoing business or we have started this from last couple of quarters. So it’s an ongoing business for us.
Sharan Mandi Kaur
Okay. And when do you see it’s gradually increasing from each quarter?
Subhash Anand
It’s an ongoing I’d say efforts.
Sharan Mandi Kaur
Okay.
Subhash Anand
How big this business can be, we are putting an effort. Let’s see in next couple of years, it will be a business which we can talk about and say, okay, this much it contributed. But this point of time, it contributes I’ll say a single digit to our industrial chemical business.
Sharan Mandi Kaur
Okay, sure. Thank you, sir. Thanks for the time and opportunity to ask questions and all the best.
Operator
Thank you. The next question is from the line of Harmish Desai from PhillipCapital. Please go ahead.
Harmish Desai
Good evening and thank you for taking my question. Sir, my first question is on Equinor gas supply. Once the gas supply starts, that is Q1 FY27 which you mentioned earlier in the call, what changes there will be in — what will be the changes in our cost structure with regards to gas once the supply starts?
Subhash Anand
The cost structure will be far more efficient I call it. Our overall cost of production will be sizably reduced I call it. And the breakeven point will be at much lower or price range what we are talking.
Harmish Desai
Sir, any percentage reduction in cost which you mentioned, sizable percentage number correct?
Subhash Anand
It will be 20% plus.
Harmish Desai
20% reduction in gas cost, correct?
Subhash Anand
20% reduction in gas cost.
Harmish Desai
Got it. And so what is our gas — what has been our gas cost for the third quarter?
Subhash Anand
It’s around $13.
Harmish Desai
Okay. And so now we are, you know, almost less than a year with our plants commissioning. So have you set a definite timeline? Is it in Q3 or Q4 or we are still going with H2?
Subhash Anand
Sorry, come again?
Harmish Desai
I’m asking, sir, with the two projects to be commissioned in less than a year, have we set a definite timeline, whether it is Q3 of FY26 or Q4 of FY26? Because that will give us an idea, you know, how fast can we ramp up and whether FY27 will be having the full numbers or not. So that — just to get an idea of the — do you have that?
Subhash Anand
The plan is to complete in towards H2 of FY26. Definite timeline, if you ask me, just wait, maybe next call when we come in, we’ll able to share with you more accurate or more better idea which quarter or which month those plants will become operational. Because most of the activity will be coming to a stage where timeline will become far more crystal clear for us.
Harmish Desai
That will be helpful, sir. Yeah. And sir, what has been our capex for nine months FY25?
Subhash Anand
For these two plants, it’s around 1,300.
Harmish Desai
No, no, sir, total CapEx for Deepak consol for nine months FY25?
Subhash Anand
Just a minute.
Harmish Desai
Okay.
Subhash Anand
It will be roughly around INR1,800 crore, INR1,800 crore to INR1,900 crore.
Harmish Desai
Understood. That is all from my side. Thank you so much.
Subhash Anand
Okay.
Operator
Thank you. Next question is from the line of Darshil Jhaveri from Crown Capital. Please go ahead.
Darshil Jhaveri
Hello. Good evening, sir. Thank you so much for taking my question. Some of my questions have already been answered, sir. So sir, just regards to our currently margin, sir. So our EBITDA on a consol level basis will be sustainable, right, sir?
Subhash Anand
Yes.
Darshil Jhaveri
Okay. Okay. Fair enough, sir. And — hello?
Subhash Anand
Yes, we can hear you.
Darshil Jhaveri
Yeah, yeah. And so with our — the CapEx, so what kind of asset turnover are we looking at, sir, like with the CapEx is coming online next year?
Subhash Anand
Okay. Typically, for this kind of a business and this size of a CapEx, asset turn anything around 0.7, 0.8 seems to be a good asset turn.
Darshil Jhaveri
Okay, okay, fair enough. So that’s helpful, sir. And sir, so, once we get the capacities online, what would be the timeline we see for you know getting them to optimum utilization levels?
Sailesh Mehta
Good thing for our CapEx capacity what we have put in. These are the same product or same plant which we are running in Taloja. For us, it’s not a learning period which will make difference to us. It will be ramp up, and we expect ramp up to be pretty fast.
Darshil Jhaveri
Okay. Okay. So ramp up, we can expect pretty fast. And so, sir, just on a like overall picture, sir. So FY27, we’ll have two plants as well as the gas plan — we have our gas deal going on. So what kind of like an outlook would you — is it possible to give us in terms of revenue or margins that we’ll be looking forward out there?
Subhash Anand
Too early to talk about FY27.
Darshil Jhaveri
Okay. So maybe next year, sir, what can we guide for something?
Subhash Anand
Yeah, let’s wait for I think for the right time. So we start having a discussion around how — post all this thing, how our guidelines will be. So — but we’ll come back.
Darshil Jhaveri
Okay, fair enough, sir. And just like last so till the time a CapEx has come online, the current level of performance is sustainable, right? And we’ll have some other growth as you were saying like more premiumization.
Subhash Anand
Correct, correct. That’s what the plans are.
Darshil Jhaveri
Okay. Okay. And sir, just — sorry, so last. So our tax adjustment we said we have like a INR40 crore one-off. So going forward, what would be roughly the, you know, effective tax rate?
Subhash Anand
The last quarter was normal tax rate. So if you compute that, that’s what the normal tax rate will be for us.
Darshil Jhaveri
Okay, okay, fair enough. That’s from my side. Thank you so much.
Subhash Anand
Okay.
Operator
Thank you, next question is from the line of Vignesh Iyer from Sequent Investments. Please go ahead.
Vignesh Iyer
Thank you for the opportunity, sir. So a few questions on my side. First, from the crop nutrition business side of it, I know it wouldn’t be correct to compare it on a quarter-on-quarter basis, but just to get an understanding on a Y-o-Y basis, we have done an exceptional improvement when it comes to volume and still we have managed to keep our profitability in line with what it was in Q2, whereas Q2 is a very probably the best quarter for us. So just wanted to understand on which area that we have actually managed to make our mark in this quarter and if you could give us an idea of the product that we targeted and managed to sell more of volumes when it comes to crop nutrition.
Subhash Anand
Few things which help actually if you see CNB or a crop nutrition business. Our focus on specialty definitely helping us to maintain our margin. Our focus on Croptek and Smartek is something where our growth was phenomenal in the overall growth what you see in a CNB business and these being value-added product. So it help us to not only grow — revenue grow more in proportionate to volume and also help us to maintain profitability. Second thing which is important, the kind of a business mix which we have, CNB, TAN, and IC, there is a natural hedge between these businesses. One business when it goes towards off-season, other business running towards peak season. So at an overall level, we are able to hold on to our overall profitability at a consol level. And that’s the beauty of our three businesses. Beautifully aligned to seasonality and India growth story.
Vignesh Iyer
Right. So but just — if I just take crop nutrition business segment specific, you have still maintained CNB margins almost at the same level despite doing a lower volume. Sir, I wanted to understand more on your flagship side of the product, let’s say, like you did — if I’m not wrong, you did a sale of Croptek around 37,000 metric tons last quarter. So what would that volume be in this quarter?
Subhash Anand
It will be — it’s 60.
Vignesh Iyer
Sorry.
Subhash Anand
60,000.
Vignesh Iyer
Okay. Okay. And which product is this targeted towards, it is sugar cane? I mean, what sugar cane would be one of it. What other products that it would be targeted towards the crop?
Subhash Anand
It is sugar cane and onion.
Vignesh Iyer
Sugar cane and onion. Okay. Sir, can we assume going ahead in the quarter four that we can maintain around this utilization level?
Subhash Anand
It’s a seasonality do play in. But yes, we’ll able to maintain this kind of level. Some fluctuation do expected in this business, because this is not a quarter-on-quarter business one should look in.
Vignesh Iyer
Yes, yes, definitely. Definitely. Sir, just one more question on my understanding on the industrial chemical side of it. I mean our — what would be our mix of specialty and regular grade nitric acid be in this quarter? Because from I see that instead of doing better volumes to what we did last quarter, we have seen some dip in revenue. So if you could help me understand what would the mix be.
Subhash Anand
You’re talking industrial chemicals.
Vignesh Iyer
Yes, yes. More on nitric acid side of it.
Subhash Anand
Okay. Nitric acid side of this business, there’s no major change when it comes to specialty to overall. It still remain broadly similar level what it was earlier in this quarter. But overall, if you are looking at volume increase to value increase, you do see some softness coming on pricing side. That is result of as I spoke during my commentary there is a import of microaromatics and that has a pressure on overall end customers’ pricing resulting to this business — this business — pressure on — pressure on — what you call it, pressure on pricing side. But the growth in volume and other efficiency help us to maintain the overall margin or overall EBITDA level for this business.
Vignesh Iyer
Okay, sir. Got it. Got it, sir. That’s all from my side and all the best.
Subhash Anand
Okay. Thank you.
Operator
Thank you very much. Ladies and gentlemen, that was the last question for today’s call. I would now like to hand the conference over to Mr. Subhash Anand for closing comments.
Subhash Anand
Speaker C-Subhash Anand
Thanks. Thanks, everyone, for taking up time and participating in our call. I wish all of you best of luck and good times coming ahead and look forward seeing you again or talking to you again next quarter. Thank you.
Operator
[Operator Closing Remarks]