Deepak Fertilisers and Petrochemicals Corporation Limited (NSE: DEEPAKFERT) Q4 2025 Earnings Call dated May. 23, 2025
Corporate Participants:
Unidentified Speaker
Sailesh Mehta — Chairman and Managing Director
Subhash Anand — President and Chief Financial Officer
Analysts:
Unidentified Participant
Harmish Desai — Analyst
Jainam Ghelani — Analyst
Ramesh Sankaranarayanan — Analyst
Nikhil Gada — Analyst
Bharat Shah — Analyst
Pratyush Kamal — Analyst
Tarang Agrawal — Analyst
Presentation:
operator
Print is now being recorded. Foreign. Ladies and gentlemen, good day and welcome to Deepak Fertilizers and Petrochemicals Corporation Limited Q4FY25 earnings conference call hosted by Philip Capital India Pvt Ltd. 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 Stars and zero on your Touchton phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harmish Desai. Thank you. And over to you sir.
Harmish Desai — Analyst
Thank you. Avirath. Good evening and welcome to the fourth. Quarter and full year FY25 earnings call of DFAB Fertiliser and Petrochemicals Limited hosted by Philip Capital. From the management we have Mr. Salish. Mehta, Chairman and Managing Director Mr. Subhash Anand, President and Chief Financial Officer Mr. Supraz Jain, Executive VP Corporate Finance and. Mr. Dibeshish Keria, Senior GM Corporate Finance. 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. Salish Mehta followed by. Mr. Subhash Anand from for update on. Financial performance post which we’ll have a Q and A session. Thank you. And over to you sir.
Sailesh Mehta — Chairman and Managing Director
Thank you. Is my voice clear?
Harmish Desai — Analyst
It’s clear sir. Yeah.
Sailesh Mehta — Chairman and Managing Director
Okay. Thank you. So very warm welcome to all of you for the Q4 and 12 month FY25 earnings call. I do hope all of you have had a chance to review the presentations. But just from my side at the outset in terms of the headlines, I’m indeed happy to share that Q4 top line grew by 28% and Pat the bottom line grew by 21% for the full year the top line grew by 18% and we crossed 10,000 crores. But the headline there is that pat bottom line grew by 102%.
It’s almost doubled based on these good results and also balancing it out with the Capex plan. You know though the thought was to look at even higher dividends but the board in a conservative manner has recommended 100% dividends. So now just to share some insights in terms of when I look at the year as a whole, to look at the undercurrents and to try and share with you in terms of what we feel is panning out, what has worked. So somewhere I see very clearly that strategy and execution coming together now and getting validated, revalidated in the P and L In the financial outcomes that we are seeing.
So number one that we see is that our enhance business focus aligned to the India growth story is certainly, you know, continuing to be a very positive tailwind for all the businesses that we are looking at in the sense that the for the fueling of the India growth story, the focus on coal, for power, limestone, cement, for the real estate sector infrastructure, all those are going to be continuing to be critical. And that is where our mining chemicals, technical ammonium nitrate continues to be beautifully aligned. Similarly, as the mid income group grows, the move from basic rice with bajra to horticulture fruits, vegetables is something that we are seeing as a continuing trend and which is where our CNB business, fertilizer business is very well aligned.
And similarly our industrial chemicals business is riding on the alignment with China plus one specialty chemicals and the pharma sector. So one dimension that we see is that this alignment with the India growth story not only is giving us continued positive traction on the demand perspective side, but is also somewhere insulating us from the global volatility which has somewhere emerged, you know, with all these tariff dimensions that are emerging. The second and the more critical aspect that we are seeing is that our dedicated drive to move from commodity to specialty is continuing to gain grounds and give us very positive traction with the push that we have.
Overall, we are seeing that almost 22% of our revenues are now emerging out of this move into the specialty space. The key contributor to the transformation from commodity to specialty is certainly the crop nutrition business, the fertiliser business, where virtually now every product that we sell has somewhere a specialty offering. It is not just same as what anyone else in the industry are offering. And all of our NPK either is sold as NPK with growth promoter coating, which is giving a much higher boost to the nutrient use efficiency or in a major way, which is what has transpired in this last year where we have moved from commodity NPK to crop specific NPK along with micronutrients and growth promoters.
And by now we have now enhanced the number of grades. We are catering to many more crops than what we were in the previous year. Now this aspect of it is somewhere very, very deeply making an impact in terms of not just the yield, but also somewhere the quality dimensions of the agri produce. And which is where we are now having a very positive traction in terms of repeat customers and a very strong attraction also from the channel. And uniquely we have seen that it now we have clocked up not just in terms of the sales, which is by way of invoices, but also by way of liquidation, which would mean that the farmers have actually bought the fertilisers.
And that speaks very strongly about the value proposition that they are seeing in terms of the crop tech or the crop specific fertilizers. So with that, if I look at just the crop nutrition business, besides the crop specific fertilizers, we are also into Ben Self, which is another specialty fertilizer. We are also into the water soluble fertilizers, which are also specialty fertilizers. And all put together, we are seeing that there is a lot of value that we could bring to the table by looking at not just commodity product orientation, but somewhere bringing in a lot of weightage to what could impact the farmers and the yields and so also their income levels.
Similarly, the journey continues from commodity to specialty, even in our technical ammonium nitrate mining chemical business. And whereas you would be aware that our range of product itself caters to all possible segments in the mining sector, whether it is ammonium nitrate melt or the high dense product, or the porous sprills. The global best porous sprills, right up to the hospital segment is what we are catering to. And some of these segment by segment catering to the needs of that particular segment is somewhere now making more and more sense that that is the way to go and that is what is bringing the strength similarly in the assets.
You know, again, every segment, right from 58% asset, 60% asset, 72% acid, right up to 98% acid is something that we are catering to and going up to even specialized acid with additives for the steel grid, steel companies that are there. Finally, even in case of ipa, that our move towards moving away from commodity IPA to pharma grade IPA is something that is bearing good fruits. So that those two aspects are aspects which I feel at the undercurrent level have given a lot of confidence and is giving us a very positive feeling in terms of sustainability of these good results.
And going forward, as we move more and more towards segmenting the market and catering to each segment, and as we move more and more from pure commodity product offering to a holistic solution offering, we are seeing that, you know, not only there will be, I would say, additions to the contribution margin, but we are on our way to creating valuable brands in the spaces that we are performing, in the spaces that we are having our business focus building upon the same, I would say strength. We have also taken up projects of enhancing capacities on nitric acid at Dahij and on our technical ammonium nitrate At Gopalpur and somewhere, you know, those aspects are also very strongly built on both these dimensions.
Both are projects that are beautifully aligned to the India growth story. Both the projects draw strength from our 40 years of knowledge and experience of that sector. And you know, that aspect of it is going to ensure that in the least gestation period it should be, you know, begin its contribution to the bottom line. And both of them we are looking at somewhere, you know, H2 of FY26 to bring it into our financial fold. I am also happy to share that we with the good cash flows that were there, we were in a position to further reduce the net debt by around 120 crores.
And now the net to EBITDA ratio has improved to a healthy 1.72 versus 2.66 which was in the previous year. We also brought in and infused 800 crores in our subsidiary Deepak Mining Solutions which is also available for the group by way of CCD compulsory convertible debentures. And that is also going to deleverage and make the balance sheet even more healthier as we go forward. So as we look at this aspect, we were also from a project perspective seeing that some, I would say competition could be emerging. And when we looked at ourselves, we saw unique USPs against competition that you know, we will be bringing to the table.
Uniquely our facilities will be now on both east coast and west coast. And that will provide a freight advantage to us as we serve our customers with having multiple facilities in terms of our technical ammonium nitrate and our nitric acids. We will be singularly placed to provide 100% assured supplies to our customers which others may not be able to with the 40 years of knowledge and experience in the market. Uniquely we will be bringing in a huge supply chain advantage of warehouses, dealers and others to be able to cater to these customers. And of course the 40 years of knowledge and experience will be uniquely standing on our side whether it is in terms of raw material availability, operations, safety, health, environment, logistics, so on and so forth.
And the biggest advantage that we see in ourselves is now integrated advantage emerging out of a tied up long term tied up LNG contract. Then from LNG ammonia, from ammonia, the multiple nitric acid plants that are there and then reaching up to the downstream. So this kind of complete value chain is something which will be very, very unique to the Deepak fertilizer group. And finally when we move right up to the requirements of the end consumer, whether it is the farmer or the mine, you know, this is something where this kind of strength right from LNG to the final finish Impactful product plus solutions is something that you know in the next two to three years will be something that will be uniquely available from Deepak Fertilizer and its subsidiaries unlike anyone else.
Having said that, there is a perplexment that does remain in my mind. Recently when we did the CCD negotiations on the basis of just the mining business dmsl, we were in a position to garner the funding at 12x EBITDA which puts the valuation of just the mining business to 13,000 odd crores. Whereas in totality Deepak Fertilizer is somewhere getting valued at 17,000 odd or 18,000 odd. And the perplexment has been that how is it that the sum of the parts meaning the totality of the three businesses which are doing so well somewhere is not getting valued as much as one part is getting valued.
And which is where I seek a better understanding with your help to be able to somewhere get across to the various investor community in terms of the real strength that we bring in terms of our 40 years of knowledge base. The real strength that is going to emerge in terms of the strategy at play, whether it is in terms of the alignment with the India growth story, whether it is in terms of the long term LNG contract that we have and the value that we will be bringing right from gas to ammonia to the downstream or the huge work and now well accepted work that we are doing from commodity to specialty.
And finally, you know, also helping to bring far more clarity in terms of each business having unwound and now restructured into each business into a separate context corporate entity to bring a much more clearer perspective and vision some of these aspects. I look forward to each one of you to not only absorb but to help communicate so that there is a better understanding of our businesses. So with that thought I hand you over to Subhash who will take you through the details of the Q4 and 12 month. Subhash.
Subhash Anand — President and Chief Financial Officer
Yeah. Thank you Mr. Mehta and good evening everyone. It’s a pleasure to welcome you all to Deepak Fertilizer and Petrochemical Corporation Limited earning call for the fourth quarter and full year financial year ended 31 March 2025. We are pleased to report yet another quarter and year of strong performance marked by resilient operations, robust financials and continued progress on our strategic transformation journey. Let me start with financials. Highlight revenue for quarter four operating revenues today 2667 crore, a strong 28% increase yoy primarily led by our CNB business which which grew at 86% the full year FY25 we reported 10,274 crore in revenue.
That’s an 18% growth over FY24. Notably our specialty product portfolio now contribute 22% of our total revenue led by our crop specific innovations and our premium Elden product. On EBITDA front Q4 EBITDA came in at 480 crore up 10% YoY while the margin for quarter stood at 18% slightly lower due to change in business mix individually. If we look three business separately, both Tan and CNB segments individually margin expansions since the growth of this quarter primarily led by fertilizer business, that mix change is resulted into this contractions or the lower margin. What we are able to see at console level individually each business is showing an expanded margin and contributing healthy to the bottom line.
For the full year EBITDA grew remarkably 50% up to 1,925 crore with a margin improvement of 390 basis point to 19%. Coming to net profit, our Q4 net profit increased 21% YoY to 278 crore. FY25 we deliver 945 crore in net profit doubling YoY reflecting strong margin execution and cost discipline. The net Profit margin improved by 381 basis point to 9%. I would like to highlight that Q4 includes one time deferred tax creation of 37 crore linked to DMSL Demerger. Excluding this, the group effective tax rate would be approximately 24.7 for the quarter compared to reported 13.2%.
Coming to balance sheet and cash flow as Mr. Mehta pointed out, we have generated 1400 crores free operating cash flow supported by robust EBITDA and improved working capital efficiency. Working capital as a percentage of revenue declined from 17% to 12% despite capital expenditure or capex of around 1100 crore. In FY25 net debt was reduced to 3305 crore from 3426 crore a year ago. As a result our net debt to EBITDA ratio improved significantly from 2.66 to 1.72x in this year. Net debt to equity now stands at healthy 0.53. In Q1FY26 our subsidiary DMSL raised 800 crore CCD further fortifying the group balance sheet.
These results reflect our clear focus on financial prudence, capital efficiency and balance sheet strengthening. Some more insight on our segmentals performance on our crop nutrition business that is CNB. The business has one of its strongest ever Q4 showing the bulk fertilizers grew at 68% YoY to 2.1 lakh metric ton for the full year FY25 we have crossed 1 million metric ton milestone with manufactured volume surged from 55% to 888kt. Our crop focused specialty product crop tech more than double in Its volume in Q4 up 111% YoY basis Specialty fertilizers volume which includes Bellsulf and WSF rose 13% yoy.
Looking ahead we are optimistic for the Kharis region. Supported by forecast of above normal monsoon and our targeted approach across cotton, soybean, paddy and corn through the Mahadan brand on mining chemical, our TAN business continue to deliver strong operational performance. TAN volume in Q4 grew 13% sequentially to 146kt. Though YoY we have seen a 3% decline full year basis the volume grew by 3%. Elden, our premium specialty offering recorded 13% sequential and 11% YoY growth or increasing the B2C revenue share to 18%. As India Infrastructure and mining demand remain strong particularly in coal, cement, steel and aggregate, we see a positive momentum sustaining through FY26 on industrial chemical.
Despite a volatile global environment, this segment saw a solid performance. Nitric Acid volume saw 29% YoY increase in Q4 and 3% for full year IPA volume decline due to plant shutdown for our process enhancement and productivity improvement which is now completed in FY25 and IPA volume for full year IPA volume was down 5% primarily again led by this shutdown which was important for us to ensure we have enhanced productivity and process going forward. Talking about outlook, nitric acid remain well positioned with improving downstream downstream demand from tan. While IPA faces some near term margin pressures due to oversupply and weak acetone prices, our specialty product line is gaining steady market traction and positive customer feedback.
Coming to our strategic project update which is Gopalpur for TAN and nitric acid for the haze, both have seen steady performance. The Gopalpur progress is 75% and the Hays project has progressed 48%. We stand committed commissioning of the commissioning of both the plant is expected in H2FY26. These investments are crucial enablers of our next growth cycle focus on import substitutions, margin expansions and deeper market integrations. To conclude, FY25 was pivotal year for Deepak Fertilizer. Our strong financials and operational performance is a direct result of strategic transformations undertaken over the past few years. The momentum is expected to continue in FY26 driven by macro Tailwind and our focus on high margin differentiated products.
We are entering the new fiscal year with strong foundations, financially and operationally. And we remain confident in our ability to deliver sustained long term value to all our stakeholders. With that, I now open the floor for any questions you may have.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press char and one on the touchtone phone. If you wish to remove yourself from the question queue, you may press char and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tarang Agarwal from Old Bridge. Please go ahead. Mr. Tarang, your line has been unmuted. Please go ahead with your question. Mr. Tarang, your line has been unmuted.
The next question. Since there is no response, the next question is from the line of Jainam Galani from Swan Investments. Please go ahead. Mr. Jainam, your line has been unmuted. Please go ahead with your question.
Jainam Ghelani
Hi sir, am I audible?
operator
Yes, you may go ahead.
Jainam Ghelani
Yeah, hi sir. Thanks for this opportunity. So my first question is what is the current ammonia pricing and what was. Our annual savings in FY25 from the ammonia plant?
Subhash Anand
Okay. In fact the current price of ammonia is around 300. Yeah. The last quarter I say the average price is around $330. That, that’s what average number. What we have seen the saving is. I will not say saving in terms of ammonia. We need to see separately because now we have an integrated supply chain as we continue to maintain our EBITDA Break even is around 310, 320$. And that’s, that’s the time. Or that at that price the PCL remain a EBITDA breakeven.
Jainam Ghelani
Okay, and so what would be our EBITDA from our industrial chemicals business and fertilizers business? If you could specify.
Subhash Anand
So we don’t give segment wise beta margin this thing but overall beta. If you see. Yes, at console level we have delivered. Yeah, 19 20%. 19% EBITDA. All three business has a different level of EBITDA. That’s definitely we all understand and each one of you aware of. In terms of mining business, that’s a highly profitable business. Fertilizer business as such the industry is compared to all three businesses comes at a lower level. Industrial chemical at the mid level.
Jainam Ghelani
Okay, that would be helpful sir. And my last question is that. What. Would be our peak debt levels over the next two years? Because we have this huge capex upcoming.
Subhash Anand
No, that’s in fact standard question. I call it every time this come up and. Right. So also we are good thing is we are reaching towards our current capex cycle is reaching towards FAG end the cycle we started with PCL capitalization or PCL operations. Now with Gopalpur and the haze coming to a fag end and we are expecting to commence production sometime in H2 of this year. So the debt level currently we are at around 3,300 crore. So we expect to be around 5,000 crore when the peak touches.
Jainam Ghelani
So can we expect that by end. Of FY26 5000 crores could be a. Peak debt and then we can expect. Deleveraging from next year?
Subhash Anand
Yes, that that’s the right assumption because the two new facilities which are coming up will start contributing sizably to our bottom line as well as to cash flow. So the deleveraging will start after that.
Jainam Ghelani
Okay, so that’s it for my side. Thank you sir. All the best.
operator
Thank you. The next question is from the line of SRMESH from Nirmal Bank Equities. Please go ahead.
Ramesh Sankaranarayanan
Thank you very much for your very detailed presentation and congratulations on the results. So in terms of the two housekeeping questions I have, one is your other expenses have gone up both on a yoy and quarter quarter basis in the consolidated results and secondly in the segment results your chemical business segment earnings is down both again on yo and quarter and quarter basis because of the IPA shutdown or any other reason for that.
Subhash Anand
You’re talking quarter, right?
Ramesh Sankaranarayanan
For the fourth quarter? Yeah,
Subhash Anand
yeah. In fact Industrial chemical. Yes, we have a IPA shutdown and that has an impact on our profitability.
Ramesh Sankaranarayanan
And in terms of the increase in other expenses.
Subhash Anand
In fact since the majority of the growth has come from see business and that has a very high freight outward. So that’s the impact. What you see in our other expenses.
Ramesh Sankaranarayanan
Is that either seasonal or is it something which will continue depending on the growth in your fertilizer business?
Subhash Anand
It’s a business specific CNB growing will always see freight expenses going up higher compared to other two business.
Ramesh Sankaranarayanan
Okay so now on the projects and the long term I know growth in your cash flows and returns. So if you, if you look at your expansion in nitric acid and the integration into downstream tan, what are the incremental ROC you will get on the additional CapEx once you reach peak utilization. And what is the peak utilization is expect by say FY27?
Subhash Anand
No, in fact both the new projects what we we have embarked on we are looking in our healthy ROC somewhere in the range of I say 18 to 20% and we will prefer to maintain that level for these two projects.
Ramesh Sankaranarayanan
And what is the utilization level required for this sort of roc?
Subhash Anand
This is the standard what we see, I call it first year we expect 70% which is the normal ramp up. The moment we go to an 80, 85% we start seeing this kind of an ROC.
Ramesh Sankaranarayanan
Okay, so one last thought on the ammonium nitrate prices which you may have used for your estimate. So these numbers require any further increase in prices or at current prices you will be able to achieve. Because the reason why I’m asking that is there are two competitors who are setting up Chumbal and gnfc. So is there a challenge in terms of the placement of the additional volume in the next 12 years before the actual long term growth in the downstream end use sectors is able to absorb the incremental capacity. What is your thought on that?
Subhash Anand
In fact although Mr. Mehta, touch upon our plant USB and uniqueness but let me give you a few data points. Currently the demand of tan is around 1.4 million. And the present capacity in Indian market is around 1 million. So this industry is net net short. So there is enough headroom for new player to come in and substitute import. And second thing this industry, the tank demand itself is growing 6 to 7% YoY. That itself is if we say roughly around a million dollar million ton is getting added in the demand every year. So if you just put these two number in place and the new capacity which is coming up the ramp up doesn’t happen on day one.
Everybody will have its own ramp up time. By the time this capacity actually available in the market net will again be start seeing import higher than the supply available. So we don’t see a challenge in the time demand. Second we are you would have seen our specialty and downstream efforts reaching from customer to consumer. So that’s another thing which will help us to create our space and our uniqueness. Because we are a strong player in this market. First mover, 40 years downstream, all this and then we have uniquely placed on both the cost, western north, all these things factor will make us a very different player or at a different league player.
We don’t see a challenge placing our capacity in the market.
Ramesh Sankaranarayanan
Thank you for your detailed explanation and wish you all the best. I’ll join the queue.
Subhash Anand
Thank you.
operator
Thank you. The next question is from the line of Nikhil Gadda from Abacus amc. Please go ahead.
Nikhil Gada
Yeah. Hi. Thanks for the opportunity. On Congrats on a good set of numbers. So just sort of a continuation on this overall tan growth, you know, just for the fourth quarter as well as, you know, for the last three years. If we see the growth in our tan volumes has been sort of suboptimal, it’s been around 1 to 2% range. And while we are talking about a capacity of close to 6 lakhs, we’ve still not been able to achieve, you know, it is closer to those kind of levels. So is it because of the demand being slower or is it something where we are capacity constrained in terms of our nitric acid which you mentioned that is having an impact on this overall business?
Subhash Anand
No, Nikhil, you are right. There is no demand constraint. Actually we do have a demand and we are at this point of time constrained by supply side. We have a nitric acid capacity constraint constraint and that’s a. That’s a limiting factors for us to grow our tan substantially. And that’s one of the main reason for us to get into capacity and expansions and then cater to the demand which we already know we have in front of us. Second thing, if you see what is immediate, we have done some debottleneck of tan business, tan capacity and nitric acid capacity last year towards H2, towards end of H1 or beginning H2 I call it.
So that will also help us to do some additional volume this year. But yes, and second thing, if you ask me, in tan business especially our focus is more moving from more and more specialty downstream from customer to consumer. And that gives us not only additional stickiness of the business but also incremental margins. So the focus is more till the time we have capacity, we’ll continue to go more towards value add and expand our margin. And when the capacity available we are good to go in a full flow.
Nikhil Gada
Okay sir,
Subhash Anand
I hope I answered your question.
Nikhil Gada
Yes. So then do we sort of say that even for FY26? I understand that you’re focusing on more value addition but in terms of volume growth, do we see FY26 also to do like a 2.3percent volume growth or we see a better volume growth in FY26 since your capacity is going to come, you know most of it will start in FY27.
Subhash Anand
No, it will be slightly more than the number what you are saying. We do expect with some bottlenecking we’ll able to do slightly better or better than. But yes, if you’re looking leapfrog jump then that that will happen once the Gopalpur comes in place.
Nikhil Gada
Fair enough, sir. Got it, sir. And in terms of, you know, the ammonia business, you sort of mentioned that, you know, 310, 320 levels in terms of our. Because we have factored in it at $400 or $410 and based on that our working has been made in this business. Is there a better way to, you know, are we always dependent on the pricing for ammonia on a global level or is there a better way to get an understanding of the spreads? Because since quarterly we are not getting all the subsidiary data as well, it’s becoming a bit of a challenge to understand exactly the spread levels.
Subhash Anand
Two things basically. Okay. Ammonia pricing is internationally available. I won’t say there is any challenges. This is a published number, everyday numbers available. So one can.
Nikhil Gada
I understand. But then because you sell at a premium as well. Well, so definitely the price. Yeah, sorry.
Subhash Anand
Okay. Broadly, if you ask me, we do publish quarterly. How is ammonia price going on? So this, this is a number and, and there is a standard formula from FOB Middle east to the landed how the number comes in. We can, we can have that discussion and we can discuss around that. But normally if I talk about finally any change in ammonia price, we are an integrated. So it’s a shift from one business to another in net net. If you see, we still the margin remain within business because we are an integrated player. So we do.
Even if we see a softness here, but we do see a margin expansion for our other business.
Nikhil Gada
So sir, if I want to ask it in a different way, the fourth quarter margins which were at 23% it has got nothing to do with the tan ammonia spread. It’s largely because of the industrial chemical business. You know, IPA business not doing well.
Subhash Anand
No. Which, which for fourth quarter 23. I. I didn’t get your number. That’s. We. We have a 18 margin.
Nikhil Gada
So I’m talking about the chemical business EBIT margins which were at 23% for the fourth quarter. Visa was 27, 28, 31 for the last three quarters.
Subhash Anand
No. Okay. When you’re looking at chemical business, it has overall, if you see ammonia price between this last year broadly it remain at a similar level barring 1/4 when it significantly gone up. But otherwise it remains broadly at the same level last quarter. Specifically the dip in industrial chemical or dip in chemical business segment is IPA is one thing which has impacted because there is a pressure of IPA prices globally and that has impacted margin of industrial chemical business. The last year overall ammonia prices were broadly stable barring quarter three when it has seen a Substantial increase.
I call it.
Nikhil Gada
Understood. Got it. So. So then just to complete this point.
operator
Sorry to interrupt. Mr. Nikhil, can we return to the question queue for a follow up?
Nikhil Gada
Sure, sure. Thanks.
operator
Thank you. The next question is from the line of Paracha from ask Investment Managers Ltd. Please go ahead.
Bharat Shah
Yeah, I hope Sailesh is on the call because in his initial remarks he made a comment that there was a certain valuation assigned to the. To the mining chemical business which represented the bulk of the value of the firm. And he was kind of expressing wonderment as to why that is the case. So if I hope Sageshwar is on the call.
Subhash Anand
No, Bharat, keep asking. I should be able to answer. Answer your questions.
Bharat Shah
Okay. Because he raised the question. I thought he’ll be there to discuss that question that he had raised. But be it as it may, I’ll reach out to him separately. But if he. Shivasi, if he continue to play coy and not give proper details of each business in terms of underlying moving parts, profitability and the change of the traction over a period of time. How do you expect really speaking for people to be able to analyze a business which is three main activities. And each activity has many moving parts and therefore whole aggregate performance is so much harder to analyze unless and until details are shared.
Now of course the crop business is put into modern and the mining business is going into I think dmsl. So picture would start getting more clear. But I wonder why that has not been the case so far.
Subhash Anand
No, Bharatbhai, very rightly so. And definitely we started talking more. More. Far more insight into our segmental businesses. What we used to talk earlier. And it’s only a matter of time when you start seeing us coming up with far more detail input. Well taken. We’ll work on this.
Bharat Shah
Shivashi, the entity which is DMA sale now received 800 crores of the convertible debenture. Right?
Subhash Anand
Yes.
Bharat Shah
And effectively I assume it will dilute equity capital of that business by about 6 to 7%.
Subhash Anand
Yeah. On a valuation of around 13,000 crore. 800 crore will be around. Yeah, around that 6%.
Bharat Shah
That will get converted in by what time frame?
Subhash Anand
No, in fact CCD is for 48 months. But there is an options after 30 months. We. We can convert anything after 30 months.
Bharat Shah
Okay. And till then it will carry the interest rate.
Subhash Anand
Yeah. Till that time it has a coupon rate.
Bharat Shah
So therefore about 94% equity will belong to the holding Deepak Fertilizers.
Subhash Anand
That’s right. Yeah.
Bharat Shah
And on Mardan what is the equity dilution of 400 crore that has happened. How much is the equity?
Subhash Anand
That is internal not to external public. That’s basically there was a over OCD which Deepak has that got converted into equity. So that’s 100% remain 100%. Nothing changes.
Bharat Shah
So then 400 crore which is being injected there. Where does it reside?
Subhash Anand
Yeah, it basically there was a OCD which was in icd. There was a, there was a equity infusion from Deepak fertilizers to Mahadan. So the 100% still remain 100%. Nothing changes for them.
Bharat Shah
Oh it’s just the left and right pockets.
Subhash Anand
Yeah, that’s what I’m saying. So there no external.
Bharat Shah
Okay, so that’s a very confusing kind.
Subhash Anand
No, it’s basically to strengthen Mahadan balance sheets fertilizer put in money.
Bharat Shah
Okay. And the 800 crore received in DMSL I suppose will remain in DMSL. Except whenever dividends are paid out the Dipak fertilizer will get.
Subhash Anand
No. In fact 800 crore in DMSL has come in for strengthening the DMSL balance sheet including their capital expansions which is planned. The Gopalpur is part of dmsl. So it’s part and parcel of dmsl. Strengthening balance sheet overpur capital expansion.
Bharat Shah
One last thing Subashi. Over years we have grown eight times. We have leapt ahead then we have fallen behind. But we are still well below what we did in 2020-23 when the turnover exceeded 11,000 crore and bottom line exceeded more than 2,000 crore. We are still well below those numbers. When do you think we’ll surpass this performance?
Subhash Anand
Let’s hope we surpass very soon.
Bharat Shah
Soon is in the.
Subhash Anand
No, I, I, I, I won’t put a number or time immediate time frame for that. But yes, as a management definitely surpassing that should be, should be soon.
Bharat Shah
Okay, just one final thing. Current year outlook on the mining chemical business. How would you portray it?
Subhash Anand
Okay. Current year we do see demand side. We don’t see a challenge. Definitely we do have capacity constraint and some debottle lacking will help us to grew volume. We expect volume will grow in current year although it will be single digit. But we do expect margin expansions will play a larger role than the just volume growth. And that’s what will be the story of DMSL. And then towards H2 when the new capacity come in that will be a big I say change which will take the entire mining business to the new level.
Bharat Shah
So year of 2627 should be a record year for mining capital.
Subhash Anand
Yes, that. That’s where all the levers whether it’s a Gopalpur, whether it’s the his new plant or whether it’s a new gas contract. All will be fully operational at that time and we will be in the the new leap I call it.
Bharat Shah
Okay, so 26 will be better year than 25 for Mining Chemical.
operator
Sorry to interrupt Mr.
Bharat Shah
Completing this question.
Subhash Anand
Yeah, we do expect 26. Definitely we will do an improvement. You see. Definitely a better result compared to FY25 what we have.
Bharat Shah
Sure. Thank you Subhashi. And we’ll connect with also.
Subhash Anand
Sure, sure.
operator
Thank you. The next question is from the line of Pratyush Kamal from Incred Capital. Please go ahead.
Pratyush Kamal
Hello. Yeah, I’m audible.
Subhash Anand
Yes, Pratyush.
Pratyush Kamal
Yeah, Congratulations on good set of numbers sir. I have few questions. First is regarding the ammonia business wherein you used to mention that about $380 per ton would be kind of breakeven cost for you. But I suppose that you know usually produce ammonia from natural gas use about 3335 mm if you have natural gas for that. And given the fact that the natural gas prices have fallen down significantly from Q3 to Q4 because of Brent linked and contract. So what is the current cost of gas that you are accumulating right now due to which you would have again shifted your breakeven cost from $380 to now $330 which you just mentioned.
Subhash Anand
No, in fact 380 was. I don’t think so we ever talked 380 in the dollars we always maintain for EBITDA break even our number is around 310 to 320. So we broadly remain at that level for EBITDA break even. Second thing you are talking about gas. Currently our gas prices are more I say since our long term equinor contract yet to get kicked in and that will get kicked in only next year FY26. And that’s where we’ll start seeing the real benefit of Gans price reduction happening. Till that time our contracts are linked to various baskets.
Not just one brand or not not just one thing. And. And the impact of that is not immediately movement of gas price is not immediately visible to us or not immediately getting passed on to us. So it has some leg when it comes to our ammonia pricing or a costing.
Pratyush Kamal
Okay, so what is the usual time lag sir from the reduction of the basket of the price and you’re accumulating of the benefits of that?
Subhash Anand
It depends but because each we buy from three, four sources, not just one source. So each has a different Formula, I call it linkages.
Pratyush Kamal
Yeah, understood, sir. And second is regarding your nitric acid business. I wanted to ask that other than the ipa, did you also see some kind of dumping from sign as far as nitro aromatics compound is concerned, due to which you know it would have reduced or impacted your margins on nitric acid front?
Subhash Anand
Okay, nitric acid when you’re talking, yes, nitro aromatics do have a challenge because of imports coming in and that. That seeing a competition. But other side of things, the tan business across the country is seeing a good demand. And nitric acid is one of the important component or a raw material input for that business. So nitric acid as a demand, as a total business, we haven’t seen a challenge placing our nitric acid. Actually, if you see we are net, net short of nitric acid. If we have more nitric acid, we can, we can sell much more than what we are selling.
So we don’t see an immediate impact of one of the specific segments. Seeing a softness of nitric softness. Overall, we are comfortable when it comes to our. Whatever capacity we have. We are able to place and place it comfortably at the right profit level.
Pratyush Kamal
Understood, sir. So is there a. Was there a possibility in terms of, you know, getting the nitric acid from some other manufacturers and you know, manufacturing ammonium nitrate from that? If you were seeing a good demand coming up for ammonium nitrate and you were feeling short of the nitric acid. So was there a possibility or what do you think on that, Sir?
Subhash Anand
We continue to explore and keep looking for those opportunity. It’s not key. We don’t do that. We whenever right opportunity. We continue to keep looking and keep doing it.
Pratyush Kamal
Understood. Just a final question regarding the expansion.
operator
Mr. Pratyoksh, can I request you to return to the question queue for follow up question?
Pratyush Kamal
Sure. Thank you.
operator
Thank you. Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Taran Agarwal from Old Bridge. Please go ahead.
Tarang Agrawal
Hello. Hi. Am I audible?
Subhash Anand
Yes.
Tarang Agrawal
Oh, wonderful. Thanks. Just a couple of questions. You know, rather bookkeeping, you know, you said for tan is the licensed capacity 587 KT or 630 KT?
Subhash Anand
It’s 587.
Tarang Agrawal
Right. Okay, got it. Second, how big is Eldan for you? And what is the significance of the B2C metric that you laid out in the presentation?
Subhash Anand
Okay. No, in fact the Ioden is basically a product which gets Used as an explosive in the in the mines or infrastructure. So we used to sell most of the product as a B2B segments. Of late as a part of our TCO we started working with end consumers which is various mines and infra and started working with them to supply Elden directly to them. And that’s how our downstream business or a B2C journey in Tan is expanding. And now we have reached to a level where our 18% of the share comes from our sale to B2C segment.
Tarang Agrawal
So just to understand correctly, I mean if quite cold India was your customer, was there an intermediary involved in between? And now you’re selling it to coal India directly? Is that what you’re trying to say?
Subhash Anand
I’ll not say the name of the. Customer xyz
Tarang Agrawal
no, just an example. Just an example.
Subhash Anand
But your understanding is right. Earlier we were going through intermediary who were converting. Now we are able to reach out directly and make our product available to them.
Tarang Agrawal
Okay, and how, I mean how are the metrics different for that business versus your overall business? I mean do you get higher pricing or your volume visibility is better or your ability to protect your market share is better? I mean any insight would be helpful.
Subhash Anand
All three actually, not just one. It definitely it gives me value based pricing because the way RTC work and we explained earlier we are moving towards solutions productivity solutions to the to the end consumer. We are not just selling products, we are working as a partnership to them and showing we can improve their minds productivity or infra productivity the moment we reach out to solutions. So it’s a, it’s a value pricing that help us to expand margin that help us to improve stickiness and also because then we become actually a true partner. And third thing definitely I call it once you have a stickiness in this your market share improves.
Tarang Agrawal
So 18 is for FY25. Q4.
Subhash Anand
It’s Q4.
Tarang Agrawal
Okay, a couple more on CapEx. You know
operator
Mr. Tarang, can we return to the question queue for a follow up question?
Tarang Agrawal
These are just objective one liner questions that I’m asking. Just give me a couple more and then I’ll get back on the line. So sir, on CapEx, if you could give us your overall CapEx for FY26 and 27, the maintenance CapEx within that and last for Gopalpur and Daij, what has been the capex outlay till March 26 to 25 and what is the likely outlay in 2016? In 27. Thanks. That’s it for me.
Subhash Anand
Okay. In fact the total capex this year which we talk about FY26 total. The two new projects total capex is expected to be around 4,500 crore total. I’m talking out of that we already have. Our capitalization is around 1400 crore. Okay that that’s what we already completed. So balance is expected in the current year.
Tarang Agrawal
So 3100 crores in FY26.
Subhash Anand
All of it that that’s what we. Because we have to complete the project. So this is the capex of this year expected.
Tarang Agrawal
And for, for your footprint what is the maintenance capex that you run with?
Subhash Anand
That’s roughly around I say 300 to 400. That’s a normal maintenance capex which will continue as a normal business.
Tarang Agrawal
Sure. Thank you. I’ll join a queue.
operator
Thank you. Ladies and gentlemen. Due to time constraints. That was the last question. I now hand the conference over to the management for closing comments.
Subhash Anand
Thanks and thank you once again for your time and interest in Deepak fertilizers and petrochemical corporations. We appreciate your continued support and look forward to engaging with you in the next quarter. Thank you.
operator
Thank you on behalf of Philip Capital India Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. It.