Chambal Fertilizers & Chemicals Limited (NSE: CHAMBLFERT) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Abhay Baijal — Managing Director, Executive Director
Anand Agarwal — Chief Financial Officer
Anuj Jain — Assistant Vice President – Finance
Analysts:
Rishab Barar — Analyst
Prashant Biyani — Analyst
Jenam Gilani — Analyst
Harmish Desai — Analyst
Dhruv Muchhal — Analyst
Ramesh Sankaranarayanan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Chumbal Fertilisers and Chemicals Limited Q3 and 9M FY25 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 touch tone phone. Please note that that this conference is being recorded. I now hand the conference over to Mr. Rishabh Parar from CDR India. Thank you. And over to you, Mr. Parar.
Rishab Barar — Analyst
Good day everyone and thank you for joining us on the Chumbal Fertilizers and Chemicals Q3 and 9 month FY25 earnings call. We have with us today Mr. Abe Bejal, Managing Director Mr. Anand Agrawal, CFO Mr. Anuj Jain, Assistant Vice President Finance Mr. Tridev 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 Fertilizers and Chemicals does not undertake to update them. The statement in this regard is available for reference in the presentation. We will begin this call with opening remarks from Mr. Bajal. I would now like to invite Mr. Bajal to share his views. Over to you sir.
Abhay Baijal — Managing Director, Executive Director
Thank you Rishabh. Good day to everybody and a warm welcome to all of you participating in this call. At the outset, let me wish everyone a healthy and prosperous 2025. During the quarter on a standalone basis the company has achieved an ebitda of rupees 843 crores as against 724 crore last year.
This is a growth of about 16%. A profit after tax of 505 crores as against 404 crores last year which is also growth of 25%. For the nine months the company achieved an EBITDA of rupees 2,619 crores as against 2001199 crores last year which is a growth of 19% and a PAT of rupees 1557 crores as against 1,245 crores showing a growth of 25%. Y o y at the consolidated levels Also the company has performed well during the quarter registering a PAT of 534 crores as against 459 crores last year which is about to 16%. For the nine months there was a PAT of 1,519 crores as against 1,179 crores last year which is showing a growth of 29%. Our urea operating units operated at optimal capacity.
Production during the quarter stood at 9.18 lakh metric tons against 9.1 lakh metric tons last year. Why? Urea sales stood at 9.88 lakh metric tons against 8.92 lakh metric tonnes. Yui subsidy receipts too continue to be timely received 3350 crores approximately in subsidies during the quarter three of financial year 25. Of course these numbers are there for you to see in the segment results, but I would like to highlight the performance of for crop protection, chemicals and specialty nutrients, it continues to be quite encouraging.
During the quarter CPC SN revenue stood at 255 crores as against 203 crores last year which is a growth of almost 26% value wide with a contribution of 68 crores against 49 crores which is a 39% increase. For the nine months the revenue was 887 crore 745 crores showing a growth of 19% and a contribution of 232 crores as against 168 crore last year showing 38% worldwide. In the quarter under review we introduced two new bdicides today we have a CPC product portfolio that spans 13 states, 64 offerings covering fungicides, weedicides and insecticides. We are also working on a range of new products which have been introduced in Some of The products are Generation 1X that is products which are of the latest chemistry.
In collaboration with our partners, our strategy continues to focus on creating partnerships and alliances for introducing better chemistries and increasing the width of our offerings in our channel. I would like to highlight that we have made a strong beginning in biologicals and they are increasingly gaining importance in the crop crop protection space. A biological fungicide and nematicide will be shortly introduced to address farmer pain point for nematodes and disease control for which internal field tests have been successful.
The other product lines and biologicals will gain importance as green and sustainable technologies become extremely important. One of the highlights of the quarter was the chamber fertilizers and teri, which is the Energy Resource and Resource Institute, entered into an agreement for research to establish the CFCL Terry center for Excellence for Advanced and Sustainable Agricultural Solutions. This is significant in the background of food security challenges between increasing population.
The success of our guptam supervisor offering an encouraging response to biogenic nanophosphorus gives us confidence in our ability to produce promote sustainability through bio based agricultural solutions in India. Terry, as you know is a pioneer institution in this area and center of Excellence aligns closely with the Government of India’s BIO E3 initiative which aims to promote bio manufacturing industries. Under the arrangement, Terry will be doing research in the center of Excellence to develop new products where the IP rights will be jointly owned between cfcf.
Terry and Chumbal will have exclusive commercial rights globally on the products which are developed over a period of next five years. The laboratories and equipment are more or less in position and the work will start in earnest from March onwards. We will also be focusing on entry into hybrid and research variety seeds for which substantially and it will complete our agri input source.
We expect to start sales and marketing of hybrid wheat, mustard, medex etc. In the next financial year starting from Kari 25 onwards in the non US space our product portfolio approach continues and glad to inform you that in market our joint venture, the expansion project from 5 lakh metric tons approximately to 7 lakh metric tons has been approved by the board as we speak. Work is going on to implement that particular project not only on the phosphoric acid expansion but also to attend to the deficit in the sulphuric acid plant.
The total investment in those areas will be about $173 million which will be completed by 2728. As far as volumes for our farmer Connect Seed to Harvest program is now growing. We are also placing great amount of emphasis on communication and reaching out to our stakeholders and partners.
Besides our hello Town Sports at all four locations received more than 9,000 calls and queries. This happens to be a very important program for us to assist our farmers and to get specialized knowledge across to them as to how to use products. And we are also as part of our seed to house program which is a key focus area Chambal, we undertook more than 2,500 farmer meetings, conducted 3,500 demos and analyzed 98,000 soil samples for macro and micronutrient.
The technical ammonium nitrate project is progressing quite well. Statutory approvals are in place, equipment has started to get received. You must have seen photographs showing the extent of the civil and other construction works have been completed and we are very confident that we will be able to start the plant in January 26th.
Cumulative expenditure as of December 31st it has been 466 crores. In January 25th we have spent a further sum of 75 crores making it a total of 541 crores. I have spoken about EM Assid which continues to do well in terms of its current performance. And as we go forward and complete the project for expansion, Assid will be one of the largest producers in the world with 7 lakh metric ton capacity and with some of the most the lowest capital cost per ton of capacity added. We look continue to. We look forward to continuing to create value.
With that we are now happy to take your questions. Thank you.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes on the line of Prashant Biyani with Elara Securities. Please go ahead.
Prashant Biyani
Yeah. Thank you for the opportunity. And sir, congrats on good set of results. Sir, regarding our trading business, how much of the additional 3500 rupee per ton of DAP subsidy have we booked in Q3?
Abhay Baijal
Not completely. I am told roughly 80, 85%.
Prashant Biyani
Okay. Sir, seeing your EBITDA per ton for traded fertilizer it does not look like we are making money on dap. Would that assessment be right?
Abhay Baijal
DAP is a very zero sum game at the moment. And we don’t have. We haven’t done too much of dfp. I think the total sales in the quarter was about 1 lakh tonnes plus or minus. That is only to have the portfolio approach rather than anything else. See, we are traders rather we are importers and sellers. We don’t have the cost structure on. We have to see what we can do in terms of the total portfolio approach. And we have done what we felt was necessary to keep the channel lubricated.
Prashant Biyani
Okay sir, I missed your opening remarks on the massive capacity expansion. There was some patchy voice. Can you please repeat it?
Abhay Baijal
I am just saying that we have. The board there has approved the expansion from 5 lakh metric ton to 7 lakh metric ton. And there are two parts to it. The phosphoric acid plant and the sulfuric acid plant which is a concomitant facility which is needed to support the production. In the first phase the phosphoric acid plant will go into production maybe by N26 or maybe early 27th. And the other part which is a sulfuric acid plant. The studies for narrowing down the cost is still on but we are quite hopeful that that will also be done. And taken together, the total cost of the expansion is about $173 million.
Prashant Biyani
$173 million.
Abhay Baijal
$173 million.
Prashant Biyani
Okay. And sir, what led us to configure some changes in the tan?
Abhay Baijal
These changes are the things which are causing the delay or something else. These changes are necessary to get operating efficiency when you do warm omnia. Otherwise, just give you a small understanding of this. You first, if you have to store back the ammonia, you have to basically chill it. Instead of that, it’s able to directly pump the ammonia into the system. Whatever is being produced online. Then you save energy in that. That’s a very simple process that I should have done. Second part is that looking to the fact that LDAM will. That is light density ammonium nitrate is going to play an important role going future. We have to make provisions in terms of layouts and other such things. So that engineering took about one, one and a half months of study. It does not materially.
Prashant Biyani
Right. Sure, I’ll come back in the queue. I have few more questions.
Operator
Thank you. Next question comes from the line of J. Nam Killani with Swan Investments. Please go ahead.
Jenam Gilani
Hi sir. Thanks for this opportunity and congratulations for a good set of numbers. So I have a few questions about Tan. So currently, what could be the domestic demand for tan and how much of it is being imported?
Abhay Baijal
My understanding is that domestic production, all told, is close to a million tons. Imports could be varying between 200,000 tons to 400,000 tons depending on what positioning happens. That is how it is. There is increasingly demand in terms of infrastructure development, in terms of mining, in terms of border roads, in terms of, you know, cement production and so on. So all of that is contributing to the growth. And government’s capex investments is one part, because it’s mostly infrastructure. It is taking its, you know, it is casting its pressure on the demand. So that’s how it is. The growth is, I’m told, close to the 6% CAGR.
Jenam Gilani
Okay, so sir, we are also. We are expanding into 10 and our competitor is also expanding into 10. So do we see an oversupply situation in the near term?
Abhay Baijal
It could be going forward in the next two, three years because other capacities are also coming, assuming that they do come. But it will still be a stable market in terms of it is not going to be very long in the sense that there is not too much of overcapacity. But it also depends on what percent and what cost structure. I think that’s where Jambal will score.
Jenam Gilani
Okay, and so what could be the Ebitda per ton we can expect in this project.
Abhay Baijal
You will have to wait. We will reveal that one more time.
Jenam Gilani
Okay. And sir, would we be backward integrating into Ammonia 2 for this project?
Abhay Baijal
In terms of planning projects and we have a certain payback. Payback number of years in our mind when we are confident that we will achieve.
Jenam Gilani
Okay, so that’s it from my side. Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes on the line of Harmish Desai with Philip Capital. Please go ahead.
Harmish Desai
Good evening and thank you for taking my question. So my first question is on the MRC expansion. So how much capex do we expect to incur in this expansion?
Abhay Baijal
I think I told $173 million.
Harmish Desai
Okay, I’m sorry. I must have missed out. Sorry for that answer. What is our total capex that we have incurred in nine months apart from the tan capex?
Abhay Baijal
I will ask Mr. Anand Magawad.
Anand Agarwal
One second. Hi Ramesh. Hi sir. So current year we have actually invested around 357 crores of capex total. Out of which 10 is around 250 crores.
Harmish Desai
Understood? Yeah. And so in Tan. So now we have shifted the date to January. So how much time will take for us to ramp up the project and any you know, expectation of contribution from the tan business in FY? 27.
Anand Agarwal
Yeah, 27. We definitely have current year. We are not being too aggressive on our number but obviously we want to ramp it up in the same month as such. So it will get ramped up very soon.
Abhay Baijal
I’ll just make this point that the date of that in January 26 is the date of commercial production delivery. That means it meets all parameters in terms of capacity, in terms of efficiency, in terms of quality. January 20th.
Harmish Desai
Got it? Yeah. And sir, this you mentioned in your presentation that you know we have achieved our energy. Energy efficiency has increased by 3%. So how much does it translate in terms of increase in ebitda?
Abhay Baijal
See this is you. I just give you. This is a rough computation. 3% saving on from 5000 rupees per gcal.
Harmish Desai
Okay, got it. Answer. If you can just help us with the volume numbers for GPAN 1, 2 and 3.
Abhay Baijal
That I will ask Mr. Jan or Mr. Ghan.
Anuj Jain
In the quarter we had production of 2.96 and GPAN 22 2.67 and GAN 3 3.55. So total put together we had production of 9.18 lak.
Harmish Desai
Answer. The gas cost for Q3.
Anuj Jain
Gas cost of Q3 is about 15.$85 per MMBtu on LCV under.
Harmish Desai
Understood, sir. Thank you. I’ll come back in. Q. Thank you so much.
Operator
Thank you. A reminder to all the participants that you may press Star and one to ask a question. Next question comes from the line of Prashant Biani with the LARA securities. Please go ahead.
Prashant Biyani
So what would be the mode of our share of invested investment?
Abhay Baijal
You don’t have to invest. They have got enough cash.
Prashant Biyani
Okay, so dividend receipt and all those things will continue as they are continuing.
Abhay Baijal
Dividend will go up and down. Or we may take dividend and then reinvest back into them. That’s up to us what we want to do. That’s a tactical decision from time to time. And let me also tell you that this Chambal is quite serious in looking at ensuring phosphate supply or securing phosphate supply chains in phosphate rich countries. So there are discussions on. We will inform you from time to time as to what we are and what our progress on that matter is.
Prashant Biyani
Right. Sir, what kind of urea volume run rate can we have in Q4?
Abhay Baijal
Last year Q4 there was some lower number for some reason. You see what happens in the last quarter is that we go under what we call the annual turnarounds. Last year we had two. This year we have only one. So I would only hazard a guess. Assuming that the plants run full capacity. We will. If you minus the amount or 3,500 to 3,900 tons per day for. For about 30 days. That’s the kind of minus that you will get. But there are one or two niggling problems. G1 and two very short shutdowns will be taken. So I would guess between one to one and a half. Like one and a half from the normal run rate.
Prashant Biyani
Right. And sir, the you told this year G3 will go under shutdown. If I heard it right. Okay. And sir, how much is the net debt at the end of Q3 or net cash?
Abhay Baijal
Cash is high. Cash is high. I think to the tune of 2,500 crores.
Prashant Biyani
Okay. And sir, for or within CPC and SN what could be the breakup of CPC and SN revenue on annualized basis?
Abhay Baijal
I think it is if I’m not wrong either 65, 35 or 70 depending on which quarter we sell.
Prashant Biyani
Okay sir, again the recurring question after the expiration of G3 benefits. First of all we don’t know how much the benefits will reduce by. But any further plans or decision if we have taken on how are we going to compensate that to Any of the growth project. You also mentioned about securing the phosphate supply for India. So when can we hear something on that?
Abhay Baijal
Very soon. But it depends on negotiations. Outer timeline of this I can’t say that. That’s very difficult to say. Because when you are dealing with foreign partners, where it ends, how it ends one doesn’t know. But we are quite on the way and there is active interest on both sides. This could lead to some investments in India or international. It will lead to international and we will secure the supply chain till the end. Or depends not only for India. It’s a global business.
Prashant Biyani
Right? So would there be role of government as well?
Abhay Baijal
I don’t think so.
Prashant Biyani
Okay, that’s it. From my side. Thank you.
Operator
Thank you. A reminder to all the participants that you may press Star and one to ask a question. Next question comes from the line of truth Muchal with HDFC amc. Please go ahead.
Dhruv Muchhal
Yes sir. Thank you. So just on Prashant’s earlier question. So the P acid you mentioned is for global supply or we can think of this as downstream for the NPK that we may put in. Or just from largely global supply.
Abhay Baijal
We already manufacture 5 lakh tons in Himachal. 70 to 75% of that material comes from India. Balance 20, 25%, 30% depending on supply circumstances is transferred to CP sometimes which they use for their global supply. In this additional 2 lakh metric tons. We have to see how we can find the markets to absorb these quantities either in India or abroad. But given the fact that as I told you this is the least capital cost project or rather in the totality of the 7 lakh tonnes, one of the least capital cost projects, most efficient projects. So we have a very good price advantage in terms of how we the fixed cost that is voted on of course. The other costs in terms of the cost of rock and so on. These are variable costs, fixed cost wise. It is also one of the most efficient. So that gives us some advantage. And how we parlay that in terms of the world supply that is a question of marketing. It’s between the partners. How we go about it. If the Indian market is ready to pay the necessary prices, why should we send it to.
Dhruv Muchhal
Sorry, sorry for my lack of background on this. So whatever imasid expands or sells the marketing right. For that is with Chammal or the responsibility is with Chambal is it?
Abhay Baijal
Which is between the partners. But OCP is the lead in that.
Dhruv Muchhal
Okay, perfect.
Abhay Baijal
And what is to be. And then there are somewhere there are long term supply agreements, arrangements with Indians. So that continues but if there are anything excess of that it can get transferred to supply.
Dhruv Muchhal
The other thing was just on the cost, probably not as relevant for you, but because that goes in the JV. But you mentioned 175 around 173 million which is about say at the rate of 83 is about 1400 odd crores. So some of her peers domestically are expanding P acid at phosp acid at about of a similar capacity incremental in sense at about 200300 crore.
So the additional amount is because of the sulphuric acid, is it? Correct. And the other thing was on the energy efficiency gains. So in your presentation you mentioned 3% improvement in energy efficiency and 125 metric ton per day of incremental production. So sorry again, a simple understanding lacking is does both of that flow into our EBITDA or something has to be shared with the government. I mean in terms of our match to understand what is incremental EBITDA gain, 3% of energy cost and 125 metric ton of incremental production both add to the EBITDA. Is that the right way?
Abhay Baijal
Yes, they add to the ebitda. But you made an important point as to whether some gain sharing. Yes, there is a gain sharing formula. And on the additional production that we do, it goes beyond the rse. And as you know that there are two parts to this compensation to the plant. One is up to RSC and one is beyond rsc. While the energy efficiency works on the entire production, the additional production works on the RSC beyond rsc.
So depending on how the other things factors play out in terms of the price of imports of urea and the dollar and so on so forth, that would vary. But so far as we are continuing to improve on efficiency and that’s one of our target and target strategy, we’ll continue to improve regardless because we want to be prepared for a day when this may get precontrolled. And we should be in terms of cost structure, one of the finest cost structures all over the world.
So in that sense this is a priority project for us. There’s not only this, but going forward we have planned up three or four other projects and see if this happens episodically. Because you first establish a base and then you again see from that base how much you are going to do.
So this is a continuous kind of process, but it takes place every two two and a half years on the basis of what studies we have. But coming back to your question, positive, yes. And to what extent? That is a question of how the circumstances play out insofar as gas cost $what is the cost of the decal and so on. So it is to that extent some of the factors not under control. But what we really want to do is to keep pushing the barriers in the envelope down and down and down. That’s what we want to do. So if I understand so as per the mechanism 3% of the saving in the energy efficiency saving 3% that you mentioned that is direct, that flows completely to you. There is no ambiguity. The 125/whatever increment production that depends upon market forces multiple variables as it happens.
I just think there the energy gain in some amount of gain sharing. But since it is a consistent policy, for every ton for ton or every gcal for gcal you will get a certain amount of compensation.
Dhruv Muchhal
And so last question, if you can share what would be the ammonia profit this quarter and for nine months surplus ammonia.
Abhay Baijal
Profit. See, this year has been a little soft even Stevens. I would say we have done I think about 80, 81,000 tons of sales. 80,000 tons of sales.
I think reasonable four digit profit survey.
Dhruv Muchhal
Okay. Okay, perfect. Thank you so much and all the best. Thanks.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Harmish Desai with Philip Capital. Please go ahead.
Harmish Desai
Thank you for taking my question again. So my question is on seeds. You mentioned that you know the new focus area is going to be seeds going ahead. So any update on that?
Abhay Baijal
I just mentioned that we have tied up and in terms of wheat, hybrid wheat, in terms of millet, in terms of maize, in terms of mustard.
Harmish Desai
Understood. And the increase in NPK volume. Now there’s not much change in subsidy. So what has led to this increase in Q3 and do you expect this run rate to continue in Q4 as well?
Abhay Baijal
Q4 normally is not a quarter for sales of NPK. Its sales will start basically from first quarter of next year which is when the Kharif really kicks in. Whatever sales we do, little bit of mop and all that. This is small, small places where small, small demands come in traditional crops of some type, Mentha etc and so on. So it’s not really a quarter where you will do save. But coming back to what you said about npk, let me show you that we have tied up some quantities for the Kharif in the NPK side and we are adequately stocked for.
Harmish Desai
Understood. And so my last question is on ldan which you know the delay in the TAN project has become. Your guys are trying to accomplish the ldan equipment. So earlier the plan was to just introduce SDAN. So going ahead it is going to be HDAN and LDN both. You know, when the 1B Tan project is commissioned.
Abhay Baijal
Let me. Let me just clarify. We have made a provision to install ldan equipment alongside the original configuration. Because if we had not done that then we would have to take a very long shutdown sometime in the future. Or to shut the plant for 4 months, 6 months, 10 months in order to incorporate those things. Because therefore we had to intervene. It’s like this that if you want to build a four bedroom house, you have laid the foundation for three rooms. The fourth room will be added as and when necessary. So to create that position we have to change equipment orientation, do some re engineering. I hope I make myself clear.
Harmish Desai
Yes. Yes sir. Yes, sir. That is all from my side. So thank you for taking my question.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of S. Ramesh with Nirmalpang. Please go ahead.
Ramesh Sankaranarayanan
Thank you and good evening and congratulations on your good results. So if you look at the crop protection business in your expansion to crores by 27 the Delta in terms of the contribution is declining as a percentage. So is that something you are making on a conservative basis or is there a reason in terms of your product mix and your reading on the market, how should we see that?
Abhay Baijal
I think it is a question of representation whether we are presenting it in terms of gross or net. I think I’ll ask Anand to explain what is happening. Because what’s really the projection that will be given was acting on the business gross sales. And what we are reporting in the segment is on the basis of next sales which is after trade discounts and all that. That’s where the difference.
Ramesh Sankaranarayanan
Yeah. But in the slide 6 if you see between. See if you look at revenue and contribution for FY24 the percentage margin more than 25%. And if you see the target revenue for 271750 and the contribution target of 310 crore, the percentage margin is declining. If you take the delta.
Abhay Baijal
Yeah. In that 1715 number you deflate it by about 20, 20%. You will come to the number.
Ramesh Sankaranarayanan
Okay. Okay. You’re saying that there is a difference in terms of these revenue reporting. Okay, fine.
Abhay Baijal
So cross basis or net basis? When I just explained to you that we are. When we are doing it in the segment results, it is negative. For the sake of consistency and not to, you know, make a variation, they decided to keep sticking to.
Anand Agarwal
The earlier number which we had told. However, that was a gross number and what we have to put up in our account is a net number and that is the difference. It will be somewhere around 20, 22%.
Ramesh Sankaranarayanan
So are you saying the FY24 number has to be deflated or the 1750 has to be deflated?
Anand Agarwal
The projected number has to come down.
Ramesh Sankaranarayanan
So if you look at your overall strategy for the crop protection business, how are you reading the current pricing environment and the demand growth and in terms of the top line growth for next year, what will be the kind of percentage volume growth you can get? And to the extent that there could be some continued pressure on pricing, what would be the revenue growth on a given volume growth?
Abhay Baijal
We continue to grow at the rates that we have been doing. In fact try to better it. That’s my. Therefore, if I if you recall in my opening statement that we said that we are now starting to get gen 1x molecules and we are creating strong alliances with companies which have got research basis and therefore we are introducing those new products and therefore expanding the portfolio with at least three to four new products can be. So that is what our strategy is. That will give us the growth. Plus there is as we widen the channel, as we take more wallet share in the channel, the growth will come from there. So we feel that we will continue to go in the same way.
Ramesh Sankaranarayanan
Yeah. So if you look at the nine month revenue growth, 19% Q3 growth is 26%. Can we get the breakup in terms of how much of this is volume growth? Because the reason why I’m asking is on this base, you know, if you look at certain volume growth, if there is some price decline, the top line growth might look lower. So on this, if you can give us the, you know, volume growth out of this three third quarter and full nine months of revenue growth, that will be helpful.
Abhay Baijal
I think you can discuss this offline with Anand. We will give you this discussion this how much will volume and how much was price that you can discuss?
Ramesh Sankaranarayanan
Okay. Okay. Fair enough. So in the TAN project, if I may ask, if you look at the long run, you know, economics of that business, what is the utilization you require to get your threshold IRR of around say 1415 that you may expect in that.
Abhay Baijal
See Chamber believes in running its plant 100% plus. First of all that is good as far as the IRR is computed. It is computed conservative basis and that I would say that they have Got a certain break even number. I won’t tell you what the break even is, but it is. We will be operating even at 80, 85%.
Ramesh Sankaranarayanan
Okay. So finally, in terms of the thoughts on capital allocation, you’re going to get incremental cash even after the time project executed. And given your portfolio in terms of a subsidized business, your trading business, which perhaps is a little bit more, you know, vulnerable to the, you know, global prices and the crop protection business seems to have its own leg.
Abhay Baijal
So incrementally, you know, in terms of your focus, where will you allocate this capital once the TAN project is completed? I think I just made a mention of global phosphate supply chain somewhere. I think that will be one of the breakthroughs that if I could or the company could do during this time. That will create a very strong base for Chambal to be a global phosphate place. And that is one area we’re definitely looking to. This is another area we are looking where we will start with the introduction reintroduction of Chambal back into market and then take it forward from there and add value one way or the other going forward.
So that might require some inorganic movements into the market. So those are things that, as I said, biologicals is one of the very key areas that we are working in. And we believe that we will be creating a very strong pipeline of products, the tele research. There is a very systematic program being done there with targeted products which will come out in 26, 27, 27, 28, 28. And there is a very large ambition out there to go up to almost 3,400crores of biological sales. And those will be increasingly important elements in what we are doing as far as specialty nutrients are concerned.
We will be creating some very specific grades and all that. So those things are being cooked as we speak and we will definitely keep adding to the portfolio.
Ramesh Sankaranarayanan
Okay, thanks a lot and wish you all the best. Thank you.
Operator
Thank you. A reminder to all the participants that you may press star and one to ask a question. Once again, a reminder to all the participants that you may press star and one to ask a question. Thank you ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Abhay Baijal
So thank you very much gentlemen and ladies for your patience. Hearing to our conference call, we hope to be doing continuing to do well and continue to serve the investor community. Thank you very much once again for this participation.
Operator
Thank you. On behalf of Chumbal Fertilizers and Chemicals limited. That concludes this conference. Thank you for joining us. You may now disconnect your lines.