Chambal Fertilizers & Chemicals Limited (NSE: CHAMBLFERT) Q1 2026 Earnings Call dated Aug. 01, 2025
Corporate Participants:
Unidentified Speaker
Abhay Baijal — Managing Director
Ashish K Srivastava — Vice President – Sales & Marketing
Anuj Jain — Chief Financial Officer
Analysts:
Unidentified Participant
Presentation:
operator
Sam.
operator
Ladies and gentlemen, good day and welcome to the Chumbal fertilizers and chemicals Q1 FY26 earnings conference call. 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. Ladies and gentlemen, good day and welcome to the Chumbal fertilizers and chemicals Q1 FY26 earnings conference call. 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 Star then zero on your touchtone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Deesa from CDR India. Thank you. And over to you sir.
Unidentified Speaker
Thank you, Sagar. Good day everyone and thank you for joining us on Chumbal Fertilizer and Chemicals Q1 and FY26 earnings call. We have with us today Mr. Abhay.
Unidentified Speaker
Bejal, the Managing Director.
Unidentified Speaker
Mr. Narendra Goyal, Business Head Manufacturing Operations. Mr. Anuj Jain, CFO. Mr. Ashi Srivastava, Vice President, Sales and Marketing. Mr. Sridh Kumar Bharat, Vice President, Legal and Company Secretary. Before we get started, I would like to point out that some statements made or discussed in the conference call today may be forward looking in nature and must be viewed in conjunction with the risks the company faces. Chamber of Fertilizers and Chemicals does not.
Unidentified Speaker
Undertake to update them.
Unidentified Speaker
The statement in this regard is available.
Unidentified Speaker
For reference in the presentation.
Unidentified Speaker
We will begin the call with opening remarks from Mr. Beger. I would now like to invite Mr. Beger to share his views. Over to you sir.
Abhay Baijal — Managing Director
Thank you, Gavin. Thank you. Good day to everybody and a warm welcome to all of you participating in this call. For the quarter under review on a standalone basis, revenues amounted to 5,698 crore crores. The EBITDA was 929 crores. The profit after tax was 638 crores as against 552 crores on a year on year basis with a growth of 16% at the consolidated levels. Also, the company has performed well during the quarter registering a PAT of 549 crores as against 448 crores last year. This is about 23% growth for the quarter. Urea production volumes were 8.54 lakh metric tons as compared to 9.03 lakh metric tons.
Urea sales for the quarter were 8.41 lakh metric tonnes against 8.87 lakh metric tonnes. Urea production was lower primarily because of some breakdown at our second plant that is Guided plant two, but now that is normal. Subsidy receipts continue to be timely. The subsidy outstanding was rupees 1326 crores as at the end of Q1. During the quarter our sales volume of PNK fertilizers consisted of DAP, MOP, NPK and triple superphosphate was strong at 4.21 lakh metric tonnes as against 2.41 lakh metric tonnes last year with a growth of almost 70%. This has been driven by prudent and strategic sourcing strategy and an enabling subsidy framework.
Further, we have sourced adequate volumes of PNK fertilizer ensuring preparedness for the Rabi season. Volume and sales growth for our CPC SN business continues to be strong at 32%. First quarter 26 CPC SN revenues stood at 452 crores as against 343 crores in the corresponding quarter showing continuing momentum contribution for the quarter stood at 102 crores which was higher by 21 crores as compared to last year. During the quarter we introduced 13 new CPC products primarily comprising of weedicides and insecticides. Today our CPC Portfolio comprises of 73 products of distinct chemistry covering fungicides, weedicides and insecticides and these products are well accepted by farmers across India and our territory.
Our strategy continues to focus on creating partnership and alliances for introducing better chemistries and and increasing the width of offerings in our channel. During the quarter we have started the seeds business and introduced maize and Bajra seed which added 6 crores to the top line to the contribution of 2 crores. Biological side we have achieved revenue growth by 80% as compared to last quarter. Total revenue stood at 29 crores against 16 crores in the previous quarter and as planned a biological fungicide and nematicide will be introduced in Karif 25 and Rabbit 25 respectively to address the farmer’s pain point for nematodes and disease control.
In short, CFCL is now increasingly focused on technologies which bring benefits in terms of improving farm yields, improve soil health and provide better product outcomes. During the quarter we have inaugurated Crop Protection Laboratory with our partner Terry, the Energy Resources Institute which will develop five new biological crop protection patented products over a period. Terry, as you may know, is a pioneer institution in the area and will be doing this research under the center of Excellence which we have established to develop these new products. Our Seed to Hours program which is a pioneer program in meeting are synergizing our contracts with our farmers, playing a significant role towards strengthening and expanding our relationships with both the farmer and Chinese partners.
During the quarter, Chumbal conducted over 700 farmer meetings, 420 demos and have analyzed about 27,000 soil samples. We have also significantly expanded our use of social media to reach out to a large number of stakeholders and have launched Uttam Krishi Patshala which cover a webinar dedicated solely for educating farmers on various agricultural practices on social media platforms. Our technical ammonium nitrate project is progressing in line with stated timelines. All requisite statutory approvals are in place and we have spent around 918 crores till June n 2025. Our joint venture Emasid is going well. The increase in capacity of P205 from 5 lakh tonnes to 7 lakh tonnes is under implementation which will optimize its operations and increase the profitability further.
With that, we are now happy to take your questions. Thank you.
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 Star then one on their touchstone phone. If you wish to remove yourself from the question queue, you may press Star then 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. Our first question comes from the line of Vishal from Trimetro Asset Managers. Please go ahead.
Unidentified Participant
Yeah, so good afternoon sir, Am I audible to you?
operator
Yes, I’m sorry to interrupt. Vishal sir, if you’re using a speakerphone, may we request to use a handset please? The voice was echoing a little bit.
Unidentified Participant
Okay, so considering the broader macro environment like where global fertilizer price remain elevated, currency volatility precision, the department of fertilizer policy shift.
Unidentified Participant
So how do you expect this factor to influence your urea and P and.
Unidentified Participant
K fertilizer margins and volumes for the.
Unidentified Participant
Rest of the year?
Abhay Baijal
So let me take this question in two parts. The urea is a kind of formula related pricing and and the margins are not expected to vary very much in the remaining part of the year. As far as the NPK is concerned there is of course you have to strategically purchase position basis, the subsidy and the MRP that you can get in the market. But you’re right that the prices have shown degree of upward mobility, rapid upward mobility rather in the last 1/4 some signs of abatement are there but we will have to see how it goes forward.
However, our stocks are well covered for that.
Unidentified Participant
Okay, and on a second side like Your crop protection, chemicals, specialty, nutrient, biologicals and seed segment delivered a standout 32%.
Unidentified Participant
Biovine revenue and like you have launched.
Unidentified Participant
30 new CPC launches and enter into hybrid seats. So could you unpack the respective contribution.
Unidentified Participant
Of CPC SN versus Biology versus seed segment?
Abhay Baijal
No, all of them are more or less in the same contribution range give or take 2 or 3 percentage.
Unidentified Participant
Okay, and what is your go to market plan like across distribution digital engagement which is or Jumbal Otum Connect and.
Unidentified Participant
The field demonstration to scale these new products?
Abhay Baijal
No, I will ask Mr. Ashish to speak about how we go about marketing this. So over to you Ashish.
Ashish K Srivastava
Okay, thank you Vishal. So your question precisely is on the digital interventions or on the seed to harvest program? Can you hear me Vishal?
Unidentified Participant
Yeah I can hear you.
Ashish K Srivastava
So your question precisely is on the digital interventions in marketing or on the seed to harvest program
Unidentified Participant
like across the diffusion channels or how are you new product are achieving?
Ashish K Srivastava
So new products you know to start with there is a. Since the chemistry has come from some other research partners so we do an elaborate product launch and then we have digital connectivity through some WhatsApp chatbot and Uttam pharmaconnect.
So it is all the these things are digitally spread to various stakeholders in the ecosystem.
Unidentified Participant
And Azure achieve the revised.
Unidentified Participant
FY26 target of 1500 crore revenue in CPC and SN.
Unidentified Participant
So are we good in the content?
Ashish K Srivastava
Yes we are.
Unidentified Participant
Okay, that’s it from my end.
Unidentified Participant
Thank you for the answer.
Ashish K Srivastava
Thank you Vishal.
operator
Thank you. Our next question comes from the line of Prashant Biani from Elara Capital. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity and congrats on decent set of results. What is your expectation from NBS subsidy net 2 and in that backdrop what kind of credit fertilizer volumes can we see this year?
Abhay Baijal
I would say that after the DAP and DSP side have been largely moderated by the government’s new approach to keep the companies insulated from price shocks we are trending back to our original numbers billion ton plus.
Unidentified Participant
Sir. But in is the price control for TSP there as well? Or I mean not price control but.
Abhay Baijal
DAP TSP are under price control other NPK’s or not.
Unidentified Participant
And government is reimbursing thousand rupee over and above the cost on both.
Abhay Baijal
Yeah, more or less.
Unidentified Participant
And what is our trade inventory of credit fertilizer at the end of Q1.
Abhay Baijal
Trade inventory I would ask Mr. Anu Jain to speak about how much sales we have made. What we are talking I think is the POS you’re talking about inventory or are you talking about what we have in stock?
Unidentified Participant
Actually no. Or post inventory only. I mean which is lying with the channel.
Abhay Baijal
Okay, pause inventory please. Anuj, can you please enlighten us? As at the end of June 30.
Anuj Jain
Which product exactly is. So we had a lakh and 60,000 odd tons of NPK including potash inventories as of end of the 30th of June. Right. And sir Stan, by when are we planning the trial production for it? And since we are nearing the trial.
Anuj Jain
Productions will commence early December, late November and we should be starting production by middle January.
Unidentified Participant
And just some color on EBITDA per ton on for tan based on current realization, what kind of EBITDA per ton we can achieve?
Unidentified Participant
The current prices, if I am not wrong are between 35 to 37,000 rupees a ton net back. And I would assume that they would be in the region of five digit plus at the moment.
Anuj Jain
Okay, so Prashant, just one clarification. The pause inventory 160s of NPKs total is around 260. Okay then sir, on UREA norms, government was about to revise it either in CY or FY25. When is that happening? And what kind of changes would you be expecting?
Anuj Jain
Which one are you talking about? There are two parts. One is energy norm and one is fixed cost. What is it that.
Unidentified Participant
Energy norms.
Anuj Jain
Energy norm. I think the government have informally told us. The effect of that is already encapsulated in current results.
Unidentified Participant
And can you elaborate what is the change in norm?
Anuj Jain
There is some reduction. There is some reduction and to that effect the negative impact has been factored.
Unidentified Participant
Okay. This would be a public document, sir, because this is relating to industry.
Anuj Jain
No, not yet. Not yet. It will be a public document as and when they publish it.
Unidentified Participant
Okay, sure sir, I’ll. I’ll come back in the queue. I have some more questions.
Anuj Jain
Yes.
operator
Thank you. Our next question comes from the line of Viraj from Simpl. Please go ahead.
Unidentified Participant
Hello. Hello.
Abhay Baijal
Yeah. Yeah.
Unidentified Participant
Am I audible? Yeah, just a couple of questions. First was on the earlier question pertaining to the earlier participant was asking. So if you see for you know our limit once. Hello. Yes.
operator
Yes, Hello.
Unidentified Participant
Yeah, so you know, if you see what the earlier norms were for us, you know say for GAN1 and GAN2 we were around in FY25 somewhere around 5.2 gcal per ton. And the group which we were under group 3. I think the unit norms are somewhere around 5.5. Correct me. So the change which you’re Talking about is even below 5.2. This.
Abhay Baijal
No, no. There are marginal variations from the current.
Unidentified Participant
No. Okay. So given that we were, you know, we have been taking this energy efficiency projects in our last two years, we have seen a good amount of gains flowing in and we were looking at further efficiency projects. So the impact of this in terms of will that largely negate the efficiency gains or we should still see gains flowing, you know, for us.
Abhay Baijal
Let’S put this away. That the government does review the norms from time to time. And there is a. We need to continuously keep improving our norms, which we do as you know that we continue to do that norm, not the norm, but efficiency itself through various efficiency projects. We have a pipeline of such projects stretching at least up to 20, 27, 26, 27. And those will come into position. And as they come into position, the our consumption will actually come down again. So the delta which is there, that can keep varying a little bit here and there, but it will be constantly more or less maintained.
That’s what it is.
Unidentified Participant
And there is no, sorry,
Abhay Baijal
we are.
Abhay Baijal
Well below the norms, being an efficient producer and we will continue to maintain that gap between the norm and our.
Abhay Baijal
Operating parameters
Unidentified Participant
and the percentage sharing between of the gains between us and the government. That is. There’s no change to that. Right? It is a tightening of behavior.
Abhay Baijal
No, there is no change in the percentage sharing. What happens is as the norms shift downwards, if you have not made adjustments to your own consumption by efficiency project, you will tend to lose out.
Unidentified Participant
Got it. So just few more questions on the manufacturing area business. One is the 30.3 benefits. Is there now any communication, you know, in terms of what kind of a plan or a structure we would be post 2026 December.
Abhay Baijal
So as of now, no discussion on that has taken place.
Unidentified Participant
So assuming that you were kind of the benefit similar to paper 1.3 for the unit 3 as well, what kind of impact one would see in terms of the AMENDA from this rough ballpark? Not exact.
Abhay Baijal
We see. The point is, as of now they have not stated anything. All of it is speculative and we don’t believe in discussing speculative numbers. How to open. We have had no discussion absolutely with the government as to what line of action it will follow. As far as the new plants is concerned, there could well be a different policy than what it is today. So let’s wait till we get some clarity. As and when we get clarity, we’ll definitely communicate.
Unidentified Participant
Okay. And just one more question on the JUA business. See if you see the market per se, you are you know, industry consumption is much higher than the production and we are now back in deficit, you know, and given the natural rate of growth in the consumption he was on the line, that will still be a much higher number than what we are today. But if you look from an investment point of view, in terms of any new greenfield at current prices and the structure, it doesn’t seem to be generative. So from your interactions with the government, do you see any new policy being laid out for any new greenfield investment or you know, what is that reading, you know, or communication you’re getting from them?
Abhay Baijal
So I can only tell you that the government is seized of the problems and they can see the trajectory of growth in terms of consumption. We have seen sharp fall this year itself in terms of the inventories because of the accelerated demand due to slightly early rains, widespread rains, change in cropping patterns, growth of maize cultivation and all that. All of that is being factored into their thought process. Should they feel the need, they will definitely invite new participants. Because you see, setting up the urea plants is a very capital intensive, time consuming business and it is best carried out by those proponents of projects who have got prior experience in doing so.
So in that sense, I think the government are quite seized of the matter. As far as my understanding goes, how and what will happen in a short period or in a medium period, I can’t say. But my understanding is that they are quite seized of the matter.
Unidentified Participant
But the discussions on new investment, if at all with the government, are they more so that the driver of that would be a new policy similar to NUIP 12 or it will be more driven by deregulating the price?
Abhay Baijal
I can’t speculate. See, the point is the government has, for your information, and I think everybody knows that in the budget extended the policy for Namrukh fertilizer. I mean one can speculate, one could always think that, look, the same policy would be extended again if I knew because they have done it just about three months back, four months back.
Unidentified Participant
Okay, thank you.
operator
Thank you. Before we take the next question, a request to all the participants to use only handsets while asking a question. Our next question comes from the line of Sandeep Mukherjee from SKP Securities Ltd. Please go ahead.
Unidentified Participant
Yes, sir. Thanks for taking the question. Sir, can you please share the plant wise production volumes and total ammonia sales.
Unidentified Participant
Figure for this quarter?
Abhay Baijal
I will ask Mr. Anu Jain to explain the plant wise production and ammonia sales. If I’m not wrong, you can take down ammonia sale as about 23,000 tons plant wise. He will explain.
Anuj Jain
We had production of GPAN1 about 2.9 lakh ton. GPAN2 around 2.15 lakh ton. And GPANT3 about 3.5 lakh ton.
Unidentified Participant
Okay, sir. And sir, what would be the volume in emacid for this quarter?
Anuj Jain
Yeah. Imacid volume. We had about 1.26 lakh ton.
Anuj Jain
We have produced.
Unidentified Participant
And sir, last quarter. Previous year.
Unidentified Participant
Previous year.
Unidentified Participant
Last quarter. What was it
Anuj Jain
this year? Same quarter was 1.3 Lakhan last quarter. I don’t have the information right now. 1.3 lakh.
Unidentified Participant
Okay. Okay sir. And sir, my last question is like. Sir, on. Please throw some light on the recently ventured seed business. Like who. What is the market size and sourcing or collaboration if any. And the growth ambitions over there.
Anuj Jain
See, seeds is a very important part of the agri input segment. It’s a very big market. In terms of the total size. They will have to go through various sections of this. There is hybrid, there is open pollinated varieties and so on. But our focus at the moment is on hybrid and research. So the products that we are talking about are maize, mustard, millets, research, variety of wheat. These are basically our focus areas. Because Northwest company like we are. These are some of the things that will have traction in the market. We have started with.
Started with something like the mustard and maize, Bajra and maize. And we have done about I think 6 crores in sales. It is a very. We just made a small beginning. Of course our Ravi ambitions are much higher. They will be an order of magnitude higher than what we have done. As far as far as the total market size is concerned which includes open pollinated variety and research. And hybrid marketing informs me is of the order of about 50,000 crores.
Unidentified Participant
Answer for this. We are sourcing or we have a collaboration with someone.
Abhay Baijal
We have got alliances. I have asked Mr. Ashish to speak about
Ashish K Srivastava
Sandeep.
Ashish K Srivastava
Presently we have embarked on the seed journey through the white label business. That means we are buying a very popular product from top manufacturers. You know we have tie ups with the top manufacturers in all crop segments. It will not be okay for me to reveal the names but we are in tie ups with the best in business.
Ashish K Srivastava
Best in class.
Unidentified Participant
Okay. Okay, sir.
Unidentified Participant
Okay, sir.
Unidentified Participant
Thank you very much, sir.
operator
Thank you. Our next question comes from the line of Amit Agicha from HG Hawa. Please go ahead.
Unidentified Participant
Yeah. Good afternoon sir. Thank you for the opportunity. So my question was connected to the Tan project like you said. Like by then. I think so. We’ll start the commercial production and you said like 918 crores already spent. I think so. I. What total capex that we are planning is 1645, correct?
Abhay Baijal
Yes.
Unidentified Participant
And so we balance whatever we will be from the internal sources or you’ll be raising funds.
Abhay Baijal
No, no. Please understand that the total project cost includes contingency, it includes tax, includes interest during construction and all that. Correct. So you take it out from there then the balance quantity that we have still to spend, you have the order of 300, 400 crores and there are some other items in terms of housing and so on or what you call as owner scope that will get completed over time but that has no connection with the production as such.
Unidentified Participant
What will be the possibility of revenue from this plant once it is commercialized?
Abhay Baijal
See, we have normally you do not expect 100% production rate from day one. We have basically one operating quarter that is middle of Jan to March. So assuming that we do about even 60, 70% rate of production then we are talking about 55, 56,000 tons product. It sells at today around 40,000. 35 to 40,000 rupees a ton. You can do the math.
Unidentified Participant
Understood, sir. Thank you sir. All the best for the future.
operator
Thank you. Our next question comes from the line of Prashant Kumar Azariwala, an investor. Please go ahead. Mr. Prashant. Your line is unmuted. Yes, please proceed.
Unidentified Participant
Yeah, yeah.
Unidentified Participant
Congratulations for good startup.
Unidentified Participant
So my question is like how long.
Unidentified Participant
This Gaddafan Plan 2 was? Breakdown
Abhay Baijal
5 memory is not wrong. It is about in 2 instances total about 24 or 25 days.
Unidentified Participant
Exactly what time it was down for.
Unidentified Participant
First time like in May or like.
Unidentified Participant
When it was down. Right.
Abhay Baijal
It was down in the month of May.
Unidentified Participant
In the month of May, Right.
Unidentified Participant
So my like my request for to you guys like because I think we.
Unidentified Participant
Have lost almost 20% of our revenue in urea.
Unidentified Participant
In urea, Right.
Abhay Baijal
You are right. 92 days. 20 days or not 92 days will be close to 20%. Right.
Abhay Baijal
So there is no.
Abhay Baijal
Overall material in terms of reportage to the stock exchanges.
operator
Sorry to interrupt. Prashant sir, your audio is not very consistent. Your line is breaking.
Unidentified Participant
So it was not reported into the.
Unidentified Participant
To the stock exchanges. Right?
Abhay Baijal
We are talking about materiality here. It is not material enough.
Unidentified Participant
20% is material. I think it’s a. It’s a. It’s a concern to the investor.
Abhay Baijal
If you see the total EBITDA for the quarter from that angle, we are.
Abhay Baijal
Talking about this is total. Now I’m talking about turnover point of view, right?
Unidentified Participant
Because turnover was down like 20% because.
Unidentified Participant
Of this problem and investor doesn’t know about it and maybe some informal guys.
Unidentified Participant
From somewhere, I don’t know.
Unidentified Participant
But since May 6th, 7th, 6th of 7th or 7th like that was the peak our process made and then it.
Unidentified Participant
Has came down to this level.
Unidentified Participant
So that is what my concern is.
Unidentified Participant
Maybe some guys know about it or.
Unidentified Participant
What I don’t understand.
Abhay Baijal
No. Mr. Let me, let me explain to you. Most of the segment revenue reduction in this particular quarter as compared to last quarter due to reduction in the prices of gas which is of the order of 10%. And beyond that, the reduction which is there on account of this is of the order of, if I’m not wrong, just 3 to 4% of them.
Unidentified Participant
So that is what 20% volume doesn’t make sense like in the turnover, right? That is what you are trying to tell me?
Abhay Baijal
No, no. When we are looking at contribution definitely not to that extent. But even in the terms of the turnover of the total company, if you see on 5000 crore crores or whatever we have reported, it is not even. It is about of the order of 2 to 3%
Unidentified Participant
for union last year.
Unidentified Participant
Last year we have done something like.
Unidentified Participant
Three 600 crores kind of thing. This year we have done
Abhay Baijal
understand that the turnover depends on gas prices. This time gas price.
Unidentified Participant
Okay, so 10% is. 10% is.
Unidentified Participant
You can consider from, from the gas price.
Unidentified Participant
Right. So another 10% will be from Graphan 1. Right. Garrison 2 Right.
Abhay Baijal
No, no, I’m saying this is of the order of 2 to 3%.
Unidentified Participant
Okay. All right. That was just. I, my concern is like 20, 20 days, 24 days.
Unidentified Participant
Like at least we can, we can have one intimation about it that that will be good for investors.
Abhay Baijal
We, we will discuss this internally and get back.
Unidentified Participant
Yeah, please.
Unidentified Participant
Okay. Thank you.
Unidentified Participant
Have a good day.
operator
Yeah, thank you. Our next question comes from the line of Falguni Dutta from Mansourovar Financials. Please go ahead.
Unidentified Participant
Hello.
Abhay Baijal
Yes.
Unidentified Participant
Yeah. Yes, I have just two questions. One is on that energy change norm in Urea. So how frequently does it change? Is there a duration that it changes after so many years each time this changes.
Abhay Baijal
The government can be inconsistent on this and sometimes consistent on this. So this norm has been changed after almost 818 seven years.
Unidentified Participant
After seven years. Okay. But. But normally is it supposed to change after five years or there is nothing such thing. No such thing.
Abhay Baijal
We have no such. They always in the policy will give it some sunset clause in that.
Unidentified Participant
So sorry I missed you.
Abhay Baijal
No, there is a sunset normally given.
Unidentified Participant
Okay.
Abhay Baijal
From this time to this.
Unidentified Participant
Okay, so after this is. I mean after this change is there. Is it known now only as to when will be. When will the next change happen?
Abhay Baijal
No, we have no communication that.
Abhay Baijal
Okay. The other question.
Abhay Baijal
This is not a published policy. This is on the basis of a discussion that was held between us and the department. And the numbers that were given to us were. Have been factored into current years first quarter calculation.
Unidentified Participant
Okay. And so the second question is on the JV expansion. The first asset price to 7 lakh tonight. When is that going to come up?
Abhay Baijal
My information is it is late 26.
Unidentified Participant
Okay.
Abhay Baijal
Maybe early 27. That kind of time.
Unidentified Participant
Okay. Thank you sir. That’s also.
Abhay Baijal
Thank you.
operator
Thank you. Our next follow up question comes from the line of Prashant Biani from Ilara Capital. Please go ahead.
Unidentified Participant
Yeah, thank you for the opportunity again. Sir, how much is the net cash on balance sheet right now?
Abhay Baijal
Around 1600 crores as on 30 June.
Unidentified Participant
Gas. Sorry, urea volumes from G3 plant sales volume, not the production.
Unidentified Participant
Sales volumes. Can you please.
Abhay Baijal
3.4 lakhtar.
Unidentified Participant
Okay. And the gas prices for the quarter,
Abhay Baijal
it is about 15.$15 on NCV basis per MMT.
Unidentified Participant
Okay. Sir, on the tan plant, have we been able to calculate how much benefit are we getting from the state incentives either annually or cumulatively over a certain period of time?
Abhay Baijal
Well, the package that has been proposed is not yet in a sense signed off. Within the advanced stages of being signed off. There is a RIPS policy in this and RIPS means Rajasthan Investment Construction Scheme. It is a certain percentage of the total hard project cost. That means excluding interest during construction and certain other things of which I think a certain percentage, not, not wrong. Between 20, 25, 20 to 25% which comes back as some sort of per year payment over a period of 10 years. That means roughly 2 to 3% of the hard cost of the project per year.
Yeah.
Unidentified Participant
That’s it.
Abhay Baijal
Yeah.
Unidentified Participant
And then what is the hard project cost for us?
Abhay Baijal
If I’m not wrong, it is about 1100 course. 1100 course. Yeah.
Abhay Baijal
Around 11, 1200 crores.
Unidentified Participant
Okay. And no incentive on GST, GST or intervention?
Abhay Baijal
No, I don’t think there are any such schemes in rips.
Unidentified Participant
Okay. And what is the quantum of impact of energy norm reduction which we have taken provisionally?
Abhay Baijal
It is low double Digits per quad.
Unidentified Participant
20 crore. 50 crore.
Abhay Baijal
No, no. Low double digits. Very low double digits.
Unidentified Participant
Okay. And sir, any informal talks with the government on fixed cost reimbursement? That revision is also pending for many years.
Abhay Baijal
I have absolutely no idea what they are doing.
Unidentified Participant
Okay. And how much is the massive investing for fault asset expansion?
Abhay Baijal
See there are two parts to a. I think the first part phosphoric acid plant is about 45, 40 to 45 million dollars. And there is a sulfuric acid plant which has to come after that. That is of the order of 120 to 130 million dollars.
Unidentified Participant
Okay. And as sulfuric acid capacity will be how much? I mean the expansion.
Abhay Baijal
If I’m not wrong it is something of the order of 3200 tons per day. But I’ll have to check that.
Unidentified Participant
Right.
Abhay Baijal
And it’s a kind of a balancing capacity. We have got already. The. There is a boosting up of the capacity which is there already already. So I’ll have to check that. But if my memory is not wrong it is about a million ton plus.
Unidentified Participant
So just lastly how do you see the channel inventory in fertilizer for the industry.
Abhay Baijal
For the industry that I lost Anu Ashish to give.
Ashish K Srivastava
Prashant, we don’t have access to the channel inventory data. But if you look at the industry stocks it is down. Urea stock or each commodity stocks are down.
Unidentified Participant
But I mean is it like the shortage would be such that whatever the industry sells in Q2 will just go off the shelf and hence the volume growth can be healthy for Q2 as well as Q3. Is it that kind of situation?
Ashish K Srivastava
See whatever inventories are available at port or and plant is a continuous operation. So they produce and sell. So there is not much much inventories in the pipeline.
That’s what I can say.
Anuj Jain
No, but I think Prashant, what we are trying to get at there is some amount of truth in that that the demand is fairly, fairly strong.
Anuj Jain
Strong.
Anuj Jain
And supplies both from self production as well as imports are running a little short. So therefore there would be a kind of quick liquidation of.
Unidentified Participant
Okay. Okay. So thank you so much for asking for answering the question. Thank you.
operator
Thank you. Our next question comes from the line of Viraj from Simpl. Please go ahead.
Unidentified Participant
Yeah. Just two questions. One is any. You know I think we. In the past we’ve talked about us evaluating different capital projects be it in the nitric value nitric asset value chain or other segments and agri input value chain. So any color you can give Any update?
Abhay Baijal
No. At the moment our complete focus is on getting the technical ammonium nitrate plant off ground commissioning it. There are additional variations in the product let us say like L damage which are being for which certain type of engineering is being progressed. But that is technically ammonium nitrate only. Only a different version of it. We have got three versions of it. Two versions of it are already there which is hdan, which is high density. And then there is a melt, ammonium nitrate melt. There is a third category which is called low density. So for that the engineering part is on that is a significant addition to the portfolio of the technical ammonium nitrate project.
Unidentified Participant
Okay. And on the crop protection, any color you gave network coverage now and of these areas which we have now say I think FY25. How much of the sales are outside our core network of urea and how much is through the user channel?
Abhay Baijal
We are quite a bit focused on our juvia channel. Quite a bit of our people have in the channel width itself in terms of. There’s still some way to go in our fertilizer channel itself. However, we are beginning to pick up stray one or two kind of people who are purely from the CPC channel, not very big participants in the fertilizer channel and they are beginning to get familiarized with our product portfolio. But it is a process which will take some time. The fertilizer channel itself is quite. Offering quite big opportunities in terms of growth as of now.
Unidentified Participant
Okay. And we were to. We were also engaging with few MNC players for introduction of nine, three or unique products in the portfolios. Any update on that?
Abhay Baijal
I will ask Ashish to answer.
Ashish K Srivastava
Can you repeat your question?
Unidentified Participant
I think we were in the past talking about talks with various MNC players for introduction of specialty molecules on nine, three products.
Ashish K Srivastava
Yeah, it’s an ongoing process, Viraj. We keep adding molecules every year. This year we have added I think 13. So it’s a continuous process. We keep adding it in the portfolio.
Unidentified Participant
But of these or in the pipeline are there any specialty molecules or 9, 3 products?
Ashish K Srivastava
Majority of them are specialty production in line 3.
Unidentified Participant
So any color you can give. Who are the partners here? The products which you launch difficult to.
Ashish K Srivastava
They are not to name them to name them. Th
Ashish K Srivastava
at’s.
Abhay Baijal
But. But looking at the existing portfolio we always deal with some very good player best in class.
Unidentified Participant
Okay, thank you very much you.
operator
Thank you. Our next question comes from the line of Pawan Nahar from an investor. Please go ahead.
Unidentified Participant
Thank you. So my question is on gpan3 or the urea unit. As I understand we have a eight year policy period in which we are entitled to incentives and thereafter there will be changes. So if you can explain what are these incentives and what will be the changes that come across, you know in 2027 and later if you can quantify.
Unidentified Participant
What would be the impact after that
Abhay Baijal
the change that will come about. Let me speak to you. We have not initiated any discussion rather the government has not initiated any discussion with us what shape form it will take. That is something still. I mean at the moment, not even on the first paper on the file. That’s what I can say. The second part is as to what is currently the scheme. Currently the scheme is a normative scheme. It says that for a certain dollar value of your gas a certain amount shall be paid at the base level and as the price increases from that linearly, an addition shall be made to the product price at the rate of something like $20 per ton of gas.
For every $20 of ton as for every $1 increase in gas price that is currently the policy at a base of something like $285. That is how it goes. Now as far as the new policy is concerned, whether it will be still norm based, whether it will be on unit cost basis, we don’t know. As I’ve said to you, the first paper on the file has not yet been put.
Unidentified Participant
No sir, I understand that.
operator
Please 1 hello?
Abhay Baijal
Yes, go ahead.
Unidentified Participant
Yeah, so basically I get it that you know, government has not initiated any policy discussion. Still we would be having some assumptions. Let’s say, you know we are right.
Unidentified Participant
Now in a zone where there is.
Unidentified Participant
Perhaps only us or maybe another company which is getting those getting the pricing.
Unidentified Participant
Pricing.
Unidentified Participant
I will not use the word benefit, I’ll use the word pricing or a formula. Now if, if after the eight year period we go back to the formula which is being applied to the other UREA units, what would be the change for us?
Abhay Baijal
So let’s say today our contribution is X dollars.
Unidentified Participant
How much would that become?
Unidentified Participant
Because see I, I read that in the policy document. Perhaps if I got it right, the band for roe is between 16 to 20%. And I see that without leverage you the company has been able to make good roe.
Unidentified Participant
But there’s no point in me getting.
Unidentified Participant
In there because there are multiple things into that ROE for multiple businesses. So if you can just simply tell me that if the policy were to transition from the, to, to the existing units formula.
Abhay Baijal
The existing unit formula is a 12% return on network policy, correct?
Unidentified Participant
Right.
Abhay Baijal
That is for the unit based specific net worth. So it is a matter of plus there are costs etc which have to be reimbursed. What kind of cost, how much cost will they reimburse? That’s what I’m saying. As of now the current policy for 1 and 2 is a 12% return on network policy. But when they actually effectuated what exactly will be the number is something is difficult to hazard a guess. Of course there will be a reduction. I know what you are driving at question is what is the extent of the reduction. And that is what we are not hazarding a guess at.
The company has its own estimations which I am not going to share with you at the moment.
Unidentified Participant
Okay, fine. Thank you.
operator
Thank you. Our next follow up question comes from the line of Palguni Datta from answer over financials. Please go ahead.
Unidentified Participant
Yeah sir, I just missed on what you said on that Rajasthan government incentive for the tan plant. So on that hard project cost of 1100 crore, what benefit are we supposed to get? And is to that part it is.
Abhay Baijal
About for 10 years. Let us say about 2% of the cost per year or something like that.
Unidentified Participant
2% of the project cost which is this 1100 crore?
Abhay Baijal
Yes.
Unidentified Participant
Over a period of 10 years.
Abhay Baijal
Yes. That means every year you will get 2%.
Unidentified Participant
Every year we get 2%.
Abhay Baijal
So it adds up to 20%.
Unidentified Participant
Yeah. Okay. Okay. Thank you so much.
operator
Thank you. Our next question comes from the line of Ranjit from IIFL Capital Services. Please go ahead.
Unidentified Participant
Yes sir. Thanks for the opportunity. My first question. In the past we have shared our.
Unidentified Participant
Aspiration to Glow Global as well. Probably tapping some assets for complex fertilizer so that we can use the phosphorum acid. So any update on that front?
Abhay Baijal
I can only say that we are working on it. Any active discussion? Huh?
Unidentified Participant
Yes sir please.
Abhay Baijal
Yeah. There we are in contact with the parties.
Unidentified Participant
So any outer timeline I would like to share for concluding this.
Abhay Baijal
These are long drawn out and very complicated discussions. It has stop and start options in between. Sometimes you walk away from the table, sometimes you walk towards the table. You know how negotiations are. We don’t put timelines. We only hope for the best results. For us it is like the India US trade deal. People are walking off the table. They are back coming back to the table. So that things happen all the time.
Unidentified Participant
Right. But pretty certain that the deal is going to happen?
Abhay Baijal
I can’t say. I mean how can I. How can I say what the other party. As long as there’s a willingness to negotiate, something will happen.
Unidentified Participant
Second question is on the time business. So what are your thoughts on the demand supply dynamics at least in India and how soon you’d like to see ramped up. Then lastly the government has also opened up export quota.
Unidentified Participant
So how do you see that as well?
Unidentified Participant
Thank you.
Abhay Baijal
See Dan, the market is expected to be short For a short while I would say then go along as some capacities come into position. But the if you see the overall environment I was with the coal India chairman ex chairman. In fact sometime back they are going from 800 million tons of mined coal to 1.5 million tons by 2032. In the various collaries that they have they are themselves putting up a plant on on coal waste which they say will be fully absorbed and they will still be short again on that quantities. So in the longer run with the infrastructure push that we have and you know that the government have asked for 100 gigawatt of power capacity coal based power capacity addition out of which about 70 to 80 gigawatt has achieved FID.
So we can see that there will be growth. There may be intermittent phases in which there will be market could be a little long and where there will be some pressures in terms of prices. But on a long term basis you see that so far we have grown in 5 to 6% CAGR. It will grow at that kind of. I am quite optimistic that the demand supply situation is in the favor of the suppliers.
Unidentified Participant
On the export front we’d also like.
Unidentified Participant
To tag those front
Abhay Baijal
is mostly see export mostly is Eldan. Eldan is a product that is mostly exported and we are as I told you doing the engineering work for that. And as and when we have completed that of course that will be post the implementation of this particular phase of the project. That will be phase two of the project.
Unidentified Participant
So thank you.
Abhay Baijal
It will take us some some time to get to that phase where we can’t do too many things at the same time. Please understand there is a first basic phase one that you do and then you go to the next stage.
We will definitely look into that. Look into that means we are already committed into doing that kind of project and so far after that then we will see how the market plays out.
Unidentified Participant
Thank you.
operator
Thank you. Our next question comes from the line of Sandeep Mukherjee from SKP securities limited Please go ahead sir.
Unidentified Participant
Thanks for the follow up question. Sir, can you throw some color on the Capex plans for this year? Apart from Tan.
Abhay Baijal
We have some ongoing projects. Can I will ask Mr. Anuj Jain to tell us what is the extent of the normal replacement capital expenditure etc. Committed for this year?
Unidentified Participant
Hello.
Anuj Jain
Yeah, one minute. Normal CAPEX plans are there. It’s about 250 crores worth of projects we have.
Anuj Jain
These are ongoing projects. Phase wise. Phase wise expenditures. Yeah.
Unidentified Participant
Okay, thank you.
operator
Thank you. Our next follow up question comes from the line of AMIT Akicha from HD Hawa Please go ahead.
Unidentified Participant
Yeah, thank you. So my question was the G2 urea plant like has it resumed full operations and what was the exact impact on volume and profitability and connected to that like what will be the planned maintenance shutdown schedule in FY26.
Abhay Baijal
The there will be a Gant 2 is scheduled to go in March 26 at for its annual turnaround since the second year of operation would have completed. As far as this loss of 55,000 tons is concerned the total loss of production have costed the company in terms of contribution about 1716, 17 crores.
Unidentified Participant
Thank you sir that was.
operator
Thank you. Our next question comes from the line of Prashant Biani from Ilara Capital. Please go ahead.
Unidentified Participant
Sir. We are around the corner to commence our tan plant and our cash generation will increase further. So sir, any plans of future capacity expansion except from the long pending discussion on Complex Fertilizer?
Abhay Baijal
Mr. Biani, do you know how much time it takes to let us say just for argument’s sake take to plant a 9,000 crore capex? Let us say hypothetically speaking on a plant like Gaddapan 4 or Garapan 3.
Unidentified Participant
No sir, I am not aware of.
Abhay Baijal
The technicality even a million ton or something of that sort. NPK plant There is so much to be done which and in terms of ties up, tie ups and either in policy or in you know discussions with parties and so on. So definitely the company is not going to sit on its cash going to do something work. I mean I cannot put a finger on the date and time for these things. That’s all.
Unidentified Participant
I mean except on the complex plan whatever has been the discussion outside of that any other thing we want to pursue and we are there will be.
Abhay Baijal
I mean in the sense that we have two other three lines of businesses. Seeds is there, specialty nutrients are there. All of them present either organic or inorganic opportunities. And not only that there could be alliances or collaborations there as well. These are businesses that we need to grow and you can see the way that we are growing them. Sometimes the growth will come through alliances or supply arrangements. Sometimes will come through collaborations and joint manufacturing. Sometimes it will come through. What pathway will actually happen is in the future depends on the market, depends on the grades that we are doing the kind of products that we are.
Unidentified Participant
In case of alliances I would believe cash outlay will not be that high.
Unidentified Participant
So any decision
Abhay Baijal
we can go into the same with the same partner joint manufacturing.
Unidentified Participant
Sir, you have been giving feelers for quite a while for anything.
Unidentified Participant
More than.
Unidentified Participant
That if you can say that will be great.
Abhay Baijal
See, if I had something to say and it was approved by the board, definitely, I would say.
Unidentified Participant
Okay, sir. Thank you.
Abhay Baijal
Thank you.
operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Abhay Baijal
Thank you all, gentlemen, for this very engaging one hour of conversation. I hope to have been able to answer your questions and if there are any follow up questions individually that can be, then Mr. Anu Jain is there to take them. Thank you so much.
Anuj Jain
Thank you. Thank you.
operator
Thank you on behalf of chumbals, fertilizers and chemicals. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.