Chambal Fertilizers & Chemicals Limited (NSE: CHAMBLFERT) Q4 2026 Earnings Call dated May. 15, 2026
Corporate Participants:
Abhay Baijal — Managing Director
Anuj Jain — Chief Financial Officer
Analysts:
Purvangi Jain — Analyst
Aman Kothari — Analyst
Prashant Biyani — Analyst
Unidentified Participant
Manas B — Analyst
Sandeep Mukherjee — Analyst
Viraj Kacharia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Chumbal Fertilizers and Chemicals Ltd. Q4FY26 earnings conference call hosted by Valeriam Advisors. 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 this conference call, please signal an operator by pressing Star Bin zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purwangi Jain from Ballerim Advisors. Thank you. And over to you, ma’. Am.
Purvangi Jain — Analyst
Thank you. Good morning everyone and a warm welcome to you all. My name is Parvangi Jain from Ballerim Advisors. Welcome. We represent the investor relations of Chambal Fertilisers and Chemicals Ltd. On behalf of the company and Valorum Advisors, I would like to thank you all for participating in the company’s earnings call for the fourth quarter and financial year ended 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today’s earnings call may be forward looking in nature.
Such forward looking statements are subject to risks and uncertainties which could cause actual results to differ from those anticipated. Such statements are based on management’s belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward looking statements in making any investment decision. The purpose of today’s earnings call is purely to educate and bring awareness about the company’s fundamental business and financial quarter under review.
Let me now introduce you to the management participating with us in today’s earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhichav, Managing Director, Mr. Narendra Goyal, Business Head, Manufacturing Operations. Mr. Anuj Jain, Chief Financial Officer Mr. Ashish Srivastava, Vice President, Sales and Marketing. Mr. Prithip Bharat, Vice President, Legal and Company Secretary and Mr. Vivek Mishra, Business Head of DAN. Without any delay, I request Mr. Abhay to start with his opening remarks.
Thank you. And over to you, sir.
Abhay Baijal — Managing Director
Thank you Purvangi. And good morning everyone. Thank you for joining us in this conference call to discuss our fourth quarter and financial year ended 2026. The Indian fertilizer industry faced a challenging environment in 2026 marked by global geopolitical uncertainties, elevated energy prices, volatility in key raw material markets. India’s agricultural fundamentals remained resilient supported by a favorable southwest monsoon at 108% of the long period, average healthy reservoir levels at 126% of normal and stock crop sowing activity across both Kharif and Ravi seasons, Karif acreage stood at 112 million hectares and Ravi sowing at around 68 billion hectares, resulting in record food grain production of barely 348 million tons.
The Indian agriculture sector grew around 2.4% in FY26. Despite uneven climatic conditions, India achieved a record Fertilizer production of 503 lakh metric tons during FY26 across both Urei and NPK DAP sectors, reflecting continued capacity expansion and improved product availability across regions. Fertilizer demand also remained healthy during the year while the government continued to support the industry through stable urea pricing, robust subsidy allocation, DBT implementation, and close coordination with industry participants to ensure uninterrupted supply across the country.
Ahead of the Kharif 2026 season, the total fertilizer inventory stood at around 200 lakh metric tons, equivalent to about 51% of seasonal requirement as compared to the normal level of 33%. Supported by strong advanced stocking and efficient logistics management during Q4 FY26, geopolitical tensions in West Asia led to sharp volatility in global fertilizer and energy markets. India continues to remain dependent on imports for key raw materials such as lng, ammonia and sulfur. During the quarter, disruptions in supplies from Middle east resulted in volatility in availability and pricing across the industry.
For instance, ammonia prices increased sharply toward 850 to $900 per ton, while sulfur prices also increased from 900 to $950 per ton. Elevated LNG prices further pressured input economics for the industry. Given India’s import dependence for key raw materials, the sector faced higher sourcing costs, supply disruptions and logistics constraints during the quarter. Although the government raised the NBS subsidy rates upwards by about 10%, industry margins would remain under pressure due to high raw material and costs and rupee depreciation during the quarter.
The government also took measures to prioritize gas availability for domestic urea manufacturers, which helped limit the impact on production to a very large extent. Our lower gas availability during part of the quarter impacted the capacity utilization slightly and energy efficiency for the sector. Domestic prospective fertilizer Production increased during FY26 while imports of DAP and NPK fertilizers also rose sharply to ensure availability within the phosphatic segment, NPK fertilizers continued to gain shares while companies increased diversified sourcing across Southeast Asia, Africa, Canada, Russia and China to reduce supply chain risk and improve sourcing security.
From an agricultural perspective, the year remained broadly favorable. Reservoir levels across key agricultural states remained healthy and supported strong crop sowing activity. During both Kharif and Ravi seasons. Rabi acreage witnessed healthy growth led by wheat pulses and oilseeds were early indicators for the upcoming Khari season also remain encouraging. Rural demand trends remain to remain supportive for fertilizer consumption across regions. With this backdrop, let me move to our operational and financial performance for the fourth quarter for full year 26.
Our crop protection, chemicals and specialty nutrients business delivered another year of strong growth during FY26 driven by higher market penetration, expanding product portfolio and improved contribution from value added offerings. Business continued to witness strong growth in both revenues and margins with contribution increasing by around 27% y o y during FY26 we launched 17 new products spanning herbicides, fungicides and insecticides presence across key crop segments and geographies. We also continue to build healthy innovation pipeline with 14 new crop protection products and one specialty nutrient product plant for FY27.
The biologicals business continued to scale up well with robust increase about 30% in volumes and 57% growth in revenues reflecting increased farmer adoption of sustainable agricultural solutions. Uttam Pranam, our biogenic nanophosphorus product introduced in Q1 FY25 witnessed significant increase in contribution during FY26. The product is developed through a biogenic process and contains 10% P2O5 with encapsulated biomolecules such as polysaccharides and lipoproteins. Two of our biological products, Uttam Sufariza and Uttam Pranam have now covered almost 3 million acres since launch, supported by increasing awareness and field level demonstrations during the year.
We also introduced the water soluble variant powder variant of some supervisor targeted at precision farming, drip irrigation and high value crops, further strengthening the portfolio. We’ve launched four new biological products across fungicide and nematicide categories during the year. Additionally, we partnered with Terry to establish the CFCL Terry center of Excellence for Advanced and Sustainable Agricultural Solutions which will focus on research and development of next generation agricultural technologies.
Coming to our seeds business, we expanded our portfolio during FY26 with the introduction of new products across wheat, maize, mustard and bajra categories. The initial farmer response and field performance have been very encouraging and we continue to strengthen our portfolio. The coming year will be increased emphasis on cereal and research variety. Our bulk fertilizers business delivered a robust performance during FY26 despite a volatile.
Operator
Sorry to interrupt in between sir, if you’re speaking, you’re not audible. Sorry to interrupt again sir, you’re not audible. Ladies and gentlemen, the line for the management has been disconnected. Please stay connected while we join them back. Sa. Ladies and gentlemen, the line for the management has been connected over to you sir.
Abhay Baijal — Managing Director
Yeah Coming to our seeds business, we expanded our portfolio during FY26 with the introduction of new products across wheat, maize, mustard and bajira categories. The initial farmer response and field performance have been very encouraging and we continue to strengthen our product portfolio. The coming year will be seeing increased emphasis on cereal and research varieties. Our bulk fertilizers delivered a robust performance during FY26 despite global volatile operating environment. The phosphatic and potassic fertilizer portfolio segment performed well during the year supported by effective sourcing strategy, inventory planning and timely market placement.
We also secured product availability for upcoming KHARIF season despite continued uncertainty in global market, raw material market and supply chains and urea volumes for the year were more or less marginally lower due to an unscheduled shutdown at one of our plants in quarter one which temporarily affected production during COVID during FY20. Engagement initiatives through digital platforms and Outreach Programs Our social media funded significantly during the year with both Facebook and YouTube platforms crossing 100,000 subscribers while our YouTube channel received the Silver Play button recognition.
The Chamber Uttam Krishak Mitra app crossed 100,000 downloads during the year reflecting growing farmer participation, participation and engagement. We also conducted multiple digital knowledge sessions, product awareness campaigns and pharma education initiatives aimed at approving outreach and strengthening connect with the farming community. Our technical Ammonium nitrate project is significant progress during FY26 and has now entered the commissioning phase. Dry runs for the weak nitric acid plant have commenced and subsequent commissioning activities for downstream tan including ANS melt and HDAN products are also underway.
The project is being developed using state of the art technology from Kasale, Switzerland and has a capacity of 240,000 metric tons per annum, representing Chumbal’s strategic entry into industrial mining chemicals, marking another important step in the company’s growth trajectory. The initiative is aligned with India’s broader focus on Atmanirbhar Bharat domestic manufacturing, infrastructure development and energy security while also creating a new long term growth revenue for the company. Finally, let me walk you through the details of the financial performance for the period under review on a standalone basis.
The fourth quarter financial year 2026. Revenue from operations grew 14% year on year to about 2,785 crores. EBITDA for the quarter 55 crores up 56% year on year with EBITDA margins at 9.16%. Profit after tax was INR145 crores up 46% year on year with packed margins of 5.22% for the financial year as a whole ended 2026. Standalone revenue operations increased 25% year on year to 20,794 crores. EBITDA rose 8% year on year to 2,679 crores with EBITDA margins at about 12.88%. Profit after tax for the period grew 18% year on year to 1,950 crores with part margins at 9.38%.
Subsidy receivables and Subsidy Flows we received a subsidy of around 2,048 crores during the quarter as compared to 1,592 crores in the corresponding quarter last year. During FY26 our subsidy receipts stood at approximately 12,276 crores broadly in line with 11,945 crores received in the same period. During last year. As of 31st March 2026, total receivables stood at about 2,075 crores comprising market debtors of 121 crores and subsidy receivables of 1,950 crore.
Coming to segmental performance, UREA segment delivered stable performance. Urea revenues in the quarter came in at about 2,432 crores increase of 8%. EBIT margins improved 70 significantly to about 7.83%. Sales volume was marginally higher at 6.72 lakh metric tons as compared to 6.3 lakh metric tons in the same quarter. During FY26 we saw a minor decline in the urea segment at around revenue being to 12,566 crores lower by 5% while EBIT margins remained steady at 14.6%. The sales volumes declined 2% to stand at 34.06 lakh metric tonnes as compared to 34.7 lakh metric tons last year.
In the complex fertilizer segment, revenues increased significantly to above 323 crores in the quarter reflecting year on year increase of 94%. Sales volume also rose 0.65 lakh metric tons compared to 0.38 Mac metric tons. Strong demand and steady Increasing Adoption of balanced fertilizers. Complex fertilizer segment continued to perform outperformed during FY26 with revenues increasing sharply to INR7025 crores reflecting year on year growth of 175%. Sales volume increased 12.31 lakh metric ton during FY26 as compared to 5.64 lakh metric tons led by strong growth in DAP, TSP and NPK fertilizers. EBIT margins stood at around 4% during FY26. The CPC specialty nutrients and seed segment witnessed a decline in performance in this quarter. Revenues lowered by 21% year on year.
Our EBIT margins remained healthy for FY26. The segment delivered strong performance, revenues increasing by 30% year on year to 1,203 crores as compared to 926 crores in FY25 and EBIT margins remained healthy at around 23.5%. Our joint venture Emerson is performing well. The increase in P205 production capacity from 5 lakh metric tons to 7 is expected to be implemented in December 26. Further sulfuric acid capacity is also being increased which is expected to be implemented a year ahead in FY27.
Board of directors has recommended a final dividend of rupees INR6 per share totaling to rupees 11 rupees per equity share for FY26. Overall, FY26 reflected resilient execution across our core and value added businesses despite global volatile global operating environment. While the UREA business continued to provide operational stability and healthy cash flows. The complex fertilizer segment delivered strong growth driven by dap, TSP and NPK volumes. At the same time, our crop protection, chemicals, specialty nutrients and biologicals business continue to scale up well, improving contribution product expansion and increasing farmer adoption.
Progress in technical ammonium nitrate project, continued investment in sustainable agriculture solutions further strengthen the diversification and long term growth profile of our operating portfolio. With this I would like at hand to back to the moderator and open for question and answer session. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press Star then two participants, you are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all you may press star N1 to ask a question. We will take the first question from the line of Aman Kothari from Aquitas Investments.
Please go ahead.
Aman Kothari
Yeah, Am I audible? Hello. Yes,
Operator
You’re audible.
Aman Kothari
Yeah. So firstly congratulations sir. On the wonderful set of results. So the first question that I have is, I think the last time we talked you said the gas costs were about 20. Can you give us an idea what the current gas costs are looking like for the first quarter?
Abhay Baijal
They will be around the same number. We are still in the midst of the quarter currently what I Understand it is 18/18 and a half plus. It may be around the same number.
Aman Kothari
Okay. And so this quarter we have seen a jump in receivables. So I think we’ve reached almost from 367 to 2000 crore to 2075 receivables. And we have also seen an increase in short term borrowings. So can you give us an idea on what those are?
Abhay Baijal
These are some short term. As far as short term borrowings are concerned, these are small cash flow mismatches which happen but they will be eventually evened out during the course of the year. The company is more or less on a stable keel as far as finances are concerned. As you know, as far as the increase in receivables are concerned. We have a process called escalation and de escalation. Sometimes what happens is that the government have compensated us on a base of a higher gas number. So that continues.
When you are actually consuming at a lower cost then you tend to accumulate cash because you get more subsidies than what you would be actually spending. Reverse starts happening. If they have derecognized that subsidy or taken it back then you get a different set of equations. And secondly, as we go forward, as you know that the prices are going up from the base, there will be some escalation which we have taken up with the government to give us interim relief in terms of cash flow. So I am very hopeful that the government will look at this very favorably.
Aman Kothari
But sir, if we see the gas prices elevated for the rest of the year, do you see, do you think that this could be a problem that could pop up and continue probably to the end of the year?
Abhay Baijal
There is a cycle for about. First of all there is a. What they give is a provisional price for the previous which is applicable for the next one or two quarters. What we are going to tell them, in fact what the industry is continuously telling them is that there has been a dollar increase in the gas price increase. So can you give us interim relief pending final calculations which I think they are very sympathetic to hearing too. So that’s what we are, we are hopeful that we will be able to manage this issue.
Not a big problem.
Aman Kothari
Okay. But sir, right now I think we’re all aware that government is running a bit thin on its reserve. We today saw the Pennsylvania petrol and diesel price increase. We’re seeing the other expenditures that they will have to make in terms of phosphating and for urea also. So do you think that situation like the last time we had this in 22, 23 could arrive, let’s say in terms of receivables bloating up?
Abhay Baijal
No, I don’t think that is going to happen. This government in particular are very clear that fertilizer is a very, very important sector to support. And we have seen the kind of support that they are giving in terms of purchasing even higher costs. So there is a clear focus on farmer being a very important element of the economy. And so this support I think is likely to continue despite the costs. And I would hazard a guess as to how much the amount of increase in subsidy is going to be. But I hear from the concerned quarters that whatever it takes is the world line there.
Whatever it takes to support the segment will be available.
Aman Kothari
Got it. So for the tan, I think the 30th of April is the commission and I think you gave the update on the same. So at this current year, do you see the capacities reaching to 75, 80% that we could have done in a year?
Abhay Baijal
Yes, definitely that. Mr. Narendra Goyal has promised me that by all means he will. That is his commitment to me. So it is his commitment to me and I am sure that he will meet that.
Aman Kothari
And I’m sure that you’re aware tank prices are up by 40%. We’ve had Russia also pulling up from putting a curb on the tank exports to India.
Abhay Baijal
We keep a tab of what’s happening in the market. Mr. Mishra keeps me and give me a daily report on what the daily prices are.
Aman Kothari
And so just last question. So this year we had a very good growth in terms of complex fertilizers, particularly dap, NPK and tsp. So do you think in this year in terms of volumes, do you see that we’ll be able to deliver a growth on this because there will be limited availability, let’s say you said just at the current prices that are elevated.
Abhay Baijal
Well, you are very right that this year availability, especially in the phosphoretic segment, is likely to be constrained. We do hope that the better sense will prevail in terms of it is not a question of production, it is a question of logistics. First of all, let’s understand that we have many ships of 28 or 29 ships which are stuck up in the hormones. They are carrying material, they are there loaded up and so on. So it is more a question of logistics than production. That is firstly one thing to understand.
That means if we have an opening up of hormones in the next one month or so, even if we take a delayed, you know, adjustment because this shipping takes some time to adjust, in three months time things should return to normal. So that is one thing. Secondly, as far as Chambal is concerned, we did make some strategic purchases very big in the beginning of the year. And we are covered at least July, August in terms of our stocks.
Aman Kothari
All complex fertilizers.
Abhay Baijal
Yes,
Aman Kothari
Got it. And sir, just last question. I think in the last con call you upon a new capex that we could be looking at and a substantial capex. I think there were two, three ideas that you guys. I think first one was the urea new plan that we could set up or a tan expansion or a new product line. So is there any further guidance you would like to give on the same?
Abhay Baijal
The only guidance I would give is that the government looking to the situation that is there are very, very serious in terms of pushing out a policy to attract investment. And for our part, we are very ready in the sense that we have land, we have the environmental clearance. I’m happy to report to you on that issue. We have the water requirements tied up and we have already started talking to the technology suppliers. Some of them have visited our plant. So we are ready. The moment the government pushes the button, within five, six months we will be on the block to run to this particular situation.
That is one. Secondly, they what you talked about, the tan and so on, there will be subsequent developments. But we are also ready with that in terms of making an analysis where and how we will put that plant. So that is. But that is in the works and I will not be able to reveal much more on that. But as far as the fourth plant in terms of urea concerned, we are very, very advanced in terms of execution of this.
Aman Kothari
Okay, got it. Thank you so much, sir. I’ll just join back in line.
Abhay Baijal
Yeah,
Operator
Thank you. We will take the next question from the line of Prashant from Biani. Please go ahead.
Prashant Biyani
Yeah, thank you for the opportunity, sir. This quarter we have seen a significant growth in EBITDA per ton for urea. What has led to this sharp jump in the quarter and how to ascertain this quarterly volatility in ebitda per ton? Because for the last three quarters it has been more or less flat. But we have seen a sudden jump in Q4.
Abhay Baijal
It is more to do with the product mix. We do know that we do sell a certain amount of ammonia, so we had better margins there.
Prashant Biyani
How much was the ammonia volume for this quarter?
Abhay Baijal
Okay, that you will discuss offline with.
Prashant Biyani
But it was primarily because of maybe higher volume and price of ammonia.
Abhay Baijal
Oh no, it is not. Not. We have. There is a price increase, no doubt. And of course production of urea was also there and we have used the sales of urea also was higher by about 30, 40,000 tonnes. So all of that taken together.
Prashant Biyani
But sir, regarding urea volume, two years back, same quarter we had more or less same number of urea sold, but our EBITDA pattern was half.
Abhay Baijal
Sometimes what happens is that you are doing maybe two plants at that time in terms of annual turnaround. So debits of that nature also occur. This year we did one plant, not two. So that has impacted. Although we had planned to do something earlier but we did not do because of gas shortage and so on. So that debit in terms of the cost of repair and maintenance also went on a smaller base. It makes a bigger difference in terms of percentages.
Prashant Biyani
Right? Sir, this entire year we had around 3.4 million tons of urea sales. Last year it was 3.47. Would we be touching around 3.5 this year? Is that in the realm of reality?
Abhay Baijal
We had to have two shutdowns. This year was in the end of the year and then in the the beginning of the year. We are currently undergoing one shutdown for Gadipan 1 which is slightly longer shutdown which will tend to be happening till about June, middle June. So the number that is there that we are going to do is more or less the same. Although we will ramp up and try and ramp up once the. Once we have completed the turnaround, run it at a little higher rate. We are confident that we will do better than last year.
But whether we touch 35, we will have to. It’s a touch and go there, but we will definitely exceed what we did this year.
Prashant Biyani
Sir, how much would be urea inventory with the company at the end of 526?
Unidentified Participant
It’s about 1lakh 30,000 around.
Prashant Biyani
And so for quarter one till date, how much of our quarterly requirement of gas for all the three plants combined we are getting from the government or from the gale and other OMCs?
Abhay Baijal
No, we have no issues in terms of gas availability as of now, thanks to very active procurement by the government, for which I should thank them. They have really been proactive on this Issue.
Prashant Biyani
I’ll jump back to the.
Operator
Thank you. We will take the next question from the line of Manas Pelikar from SRE equities. Please go ahead.
Manas B
Yes, thanks for the opportunity. So as we commission the time plan, so can you throw some light on the time and wna and this will be the important chapter for the CFCA for the future growth. So can you give some idea about what will be the margin range for the 10 when we will operate at the full capacity and how does the market for the tan look side.
Abhay Baijal
So I’ll start with the last question first. The market for tan is buoyant. I would say the demand is there and you know that the continued emphasis on mining and infrastructure and all that is a strong growth driver for this particular, for this particular segment of the market. So my view is that we for this year at least we do not have any issues in terms of the demand. And as somebody just said before this, the questioner before this had made the comment about Russia not supplying so that the import market is also a little short.
So on this basis I don’t think there is an issue in terms of the demand. As second part that you questioned in terms of what would be the ebitda, I think our budgeted numbers are very well there. In fact we exceeded in terms of what the margins could be and that’s my feeling at the moment.
Manas B
Oh for sure. And secondly, are we expecting the high working capital requirement for next quarter due to these high gas prices? Because as you mentioned in the starting comment that the government increased the price for the subsidiary by 12%. Is it par with our cost we incur or little below our cost?
Abhay Baijal
No, I, if I could understand what you are saying Mr. Belaker is that you are talking about the India price or you are talking about the
Manas B
Npk
Abhay Baijal
Yuri. So as I if you understand this business is basically a cost plus kind of business. So government recognizes the cost and therefore in terms of higher prices of gas, except for that impact on working capital, we are able to pass on the cost to the government in the form of subsidy, increased subsidy. So it would not be a problem for us.
Manas B
Oh sure. That’s from my. All right, I’m best with this for the. Thank you.
Operator
Thank you. Before we take the next question, a reminder to all, you may press Star and one to ask a question. We have the next question from the line of Sandeep Mukherjee from SKP Securities Ltd. Please go ahead.
Sandeep Mukherjee
Hi sir, thanks for taking my question. Sir, what was the actual GCAL of G1 and G2 and G3 G1 plus G2 and G3 for the quarter for the full year. Sorry,
Abhay Baijal
Could you repeat that please?
Sandeep Mukherjee
Sir, what was the actual energy consumption decal per metric turn for G1 and G2 and G3 for the year?
Abhay Baijal
Definitely below the government norms by a percentage. Good percentage. So normally we do not reveal these numbers publicly but we are well below the established norms. Therefore a certain amount of energy gain does accrue to us.
Sandeep Mukherjee
Right answer. Can you tell the sales volume of G1, G2, G3 for the quarter?
Abhay Baijal
I will ask Mr. Anujain to answer this question.
Anuj Jain
Sales volume for the quarter in the quarter G1 was 2.67 lakhs turn. G2 is 1.52 lakh ton and V3 is 2.53 lakhtar.
Sandeep Mukherjee
Okay sir. Okay sir. Thank you. Thank you very much.
Operator
Thank you. We will take the next question from the line of Vishal Takur from Balaji Investment. Please go ahead.
Unidentified Participant
Yeah, good morning sir. I just wanted to ask you about. With the current capacity, new capacity coming up, can you give me some guidance about the turnover you’re expecting in this financial year?
Abhay Baijal
Which, which, which
Unidentified Participant
The new expansion you are doing which is coming up today. The production is going to start today
Abhay Baijal
That you are talking about 10.
Unidentified Participant
Yeah,
Abhay Baijal
Yeah. So tank we normally our production level is about 700 tons per day and assuming that we are able to start we will start with WNA production,
Unidentified Participant
Nitric
Abhay Baijal
Acid and then it goes to melt production and then it goes to H10 which will come by the end of the month or little bit later than that. So let’s assume that we have got about nine months production to be very conservative. So we are saying that we have roughly about. 1 lakh, 61 lakh, 70,000 tons of production would be possible.
Unidentified Participant
Can you give me some revenue guidance? Roughly it can add the.
Abhay Baijal
This is a very volatile product in terms of pricing. Somebody just said that the tan prices are up by 40%
Unidentified Participant
Normally.
Abhay Baijal
They used to. So it will. Revenue guidance is dependent on what the number is budgeted number normally for this is about. 37,38,000 rupees. That is the normal number that you might think about.
Unidentified Participant
Okay, thank you. And are you also looking at this year any buyback? So you’re thinking about coming up with buyback because we do see promoters buying back the shares in last quarter. So are you looking at buyback and considering buyback? There’s
Abhay Baijal
No such, there’s no such proposal on the table as of
Unidentified Participant
Now. Thank you so much.
Operator
Thank you. We will take the next Question from the line of Viraj from Simple. Please go ahead.
Viraj Kacharia
Yeah, first question is on the tank. Would we be able to reach a 60, 70% or even higher utilization in the first year itself? And any color on the market dynamics, you know, given challenges on imports of that into the market. So is the market right now very tight or you know, how would you describe the market structure right now?
Abhay Baijal
Market at the moment is short. I think the people want material and in fact the sooner we get it to the market the better. That’s what the issue is. So that is one. The second is that going forward it depends on what the geopolitical situation pans out at and what will be the stance of Russia in terms of exports. But I can say that there is an underlying growth in about 6 to 7% in the explosive segment and therefore that translates back into ammonium nitrate increase. It’s about 6 to 7 and it’s a healthy growth I would say given that we are already at 1.2 million tonnes or so of demand.
So if we are saying 6, 7% growth, we are talking about 70,000 tons per year, add on year or year, that kind of number. So as of now I don’t think it is more a question of how we produce and how we place it in the market and what is our connect with the customers and so on. There’s enough room for everybody to play at the home.
Viraj Kacharia
So in the first year should we accept or close to full utilization or. And even in regards to your scrap
Abhay Baijal
That we know how to run continuous process chemical plants. It all depends on how we successfully commission it, which I’m very hopeful that we will be doing it. We have the best technology, we have brand new equipment and we have a competent team to operate it. So I don’t see in terms of production why we should have an issue. That’s certainly not a concern.
Viraj Kacharia
And in terms of key feedstock and raw material availability, especially for urea, be it for tank, do you think you are covered well for the Kharif and rest of the year
Abhay Baijal
I couldn’t get you but I thought you were talking about raw material availability for this is basically ammonia and ammonia is self produced in our case because we have got three plants producing ammonia and we have about 3 to 4, 5% surplus on account of technical reasons. So we don’t see any shortfall coming from that side as far as technology. So we are there in terms of quantities for matching quantities for ammonia.
Viraj Kacharia
On urea, sir,
Abhay Baijal
On urea, of course, gas is the main component. We first make Ammonia then we make urea. So as I’ve told you that the government are very proactive in getting the gas for the plants, fertilizer plants. So that I don’t think is also a constraint. It’s only a question of price.
Viraj Kacharia
Okay, but given where the prices are for urea and ammonia do you think that you know, it would be for you to produce, you know, above rec, you know, any color you can give?
Abhay Baijal
No. I would suggest that you also have a look at where the IP for urea is. It is $900 way, way above. So this is not a problem in terms of production beyond rsc.
Viraj Kacharia
Thank you.
Operator
Thank you. We will take the next follow up question from the line of Aman Kothari from Acquitas Investments. Please go ahead.
Aman Kothari
Yeah, hi sir, I think you had mentioned some cost structure and how we would be going about urea plants. Can you just help me understand if we are potentially setting up a new urea plant how would the project cost go and how would we look at funding it?
Abhay Baijal
See we have checked around and what has been happening in the sector lately. The prices will be nine and a half thousand tons. Nine and a half thousand crores to ten thousand. That is the upper bound as far as brownfield projects are concerned for 1.3 million tons. Roughly the same now that you know the balance sheet of chamble. So I don’t think there is much of a challenge in funding that. That is one,
Aman Kothari
Yes.
Abhay Baijal
Second of all in terms of the government policy now that is the open question what exactly they are going to offer on the plate or whatever other information that we have and we have been discussing. It’s a doable project.
Operator
Thank you. Before we take the next question a reminder to all, you may press star and one to ask a question. We will take the next follow up question from the line of Prashant from brn. Please go ahead
Prashant Biyani
Sir. What would be the capex number for FY27 and what would be the areas of investment?
Abhay Baijal
FY27 there would be some balance expense on account of the TAN project of course and plus there would be the normal routine capex of the order of about 170, 180 crores which is there every year which are in terms of either replacement or new more efficient equipment such as for instance steam turbines or CO2 compressors and so on. So those are the standard kind of 160, 170 crores that we spend.
Prashant Biyani
And what is the balancing amount in 10
Anuj Jain
Total put together should be around 500 crores. Balance I mean urea and tan put to L.
Prashant Biyani
Okay, sir, once we’ve commissioned wna, we would be taking some time to start ANS and hdan. So is it that we will store WNA till the time we produce HDAN or we will sell WNA in the market?
Abhay Baijal
Obviously we’ll sell it in the market. There’s a ready and good market for W at the moment. But I don’t think there is. Yes, you’re right that there is a sequential commissioning in this process. Our plants on both sides are more or less ready but as you know that we have to run, do dry runs, both sides and then commission and so on. So it will take a little bit of time but we are, we are there. As far as the most important component of the plant is double nipple.
Prashant Biyani
Have we also evaluated making automotive grade urea? While you know it does not come under the subsidy regime but 75% of India’s requirement is imported. So any thoughts if you have ever evaluated this?
Abhay Baijal
We are. No, it is definitely possible with our plants, at least one stream or two streams we can take out to do that. And we are in fact having some very, very preliminary discussions on this issue and we are telling the government also that you should allow us to do this
Viraj Kacharia
Technical
Abhay Baijal
Grade urea for automated purpose. But it is very nascent. I would not put any, you know, I won’t give a timeline onto this. That depends on government policy.
Prashant Biyani
We would require government approval because gas has to be supplied through them. Yeah,
Abhay Baijal
Obviously, obviously this is a requirement that they would allow us like they have allowed for instance GNFC and GSFC to do.
Prashant Biyani
Any clarity on G3 profitability starting next calendar year?
Abhay Baijal
What I can say is that what I said last time, that the government are seized of the matter. The file has started. We have had one or two preliminary discussions too premature to give you any guidance on this. But it is moving. That much I can say because we are to be in this regime from December 1 onwards. The government are quite aware currently they are a little busy with other things as you know, in terms of sourcing and so on. I’m sure in the fullness of time, maybe within maybe a month or so we will engage more effectively with the government.
Prashant Biyani
And just lastly, how much would be the net cash on balance sheet?
Abhay Baijal
I think at the end of the year we were balanced with both. I think it was 00 almost net cash was whatever cash on the books was more or less counter by the amount of short term borrowing. Somebody asked that question in the very beginning. But this is A fluctuating number once our subsidies get released in the first quarter and so on. So this will go down and I’m sure we are already surplus. As Anuj informs me, we are already surplus.
Prashant Biyani
Okay, sir, thank you so much for your time.
Operator
Thank you. We will take the next follow up question from the line of Aman Kothari from Aquitas Investments. Please go ahead.
Aman Kothari
Sir. I think you also mentioned something about setting up a phosphate fertilizer business primarily in a manufacturing side. So has there been a push by the government that you have seen for, you know, increasing these capacities also?
Abhay Baijal
The government are, I know, informally talking. I cannot say anything about this and it would not be proper for me to say this, that they are thinking of something on this area as well. But we have, as I’ve said, in terms of phosphatic capacity, we are and we remain very keen
Aman Kothari
On this.
Abhay Baijal
But there are two or three important issues which need to be sorted out in this sector. Apart from of course the scale and value addition. I couldn’t get. What did you say?
Aman Kothari
Yeah, I just meant that. That pricing is also an issue.
Abhay Baijal
Oh no, that pricing is definitely an issue. But more than that are issues with respect to GST for instance, in this sector, which is quite a problematic area which they have to sort out. We have been at it for quite some time with them. That’s a tax issue which is easily sorted. But they have to rework their entire GST around this particular sector. That is one part. Second part is the upfront investment vis a vis the value add which you rightly said is suppressed because of controlled pricing. So we’ll have to see a situation where we are relatively free in terms of pricing power before we can take this forward.
And these two things I think are the important issues which we are waiting for in terms of production inland. But our thoughts are not only limited to India, by the way. So that is something that, as we have hinted in the past, this is something that remains an ongoing issue. We have had one or two engagements with somebody who could provide us possibilities outside India and that is an ongoing affair. At the moment we have had a break off due to this Gulf War situation and all that. But we are ready to engage at some point of time, very near future on this issue.
Aman Kothari
That would be a JV kind of a structure that we’ll be looking outside.
Abhay Baijal
Yes, sir,
Aman Kothari
Got it. And third, last question on the CPC and Biologic segment. I know we are gearing up with product launches for this year. What do you think is the strategy or the Outlook that we have for this segment. How big do you think that we can get it in the next two, three years considering? I think last quarter you mentioned multiple international companies that you are talking to. Nutrien, Corteva, Syngene. So how are you thinking about this segment?
Abhay Baijal
So I would tell you that Nutrien are already more or less done in terms of engagement. We have got long term agreements more or less in place. So we will be starting with their products very soon. Those
Aman Kothari
Would be potash products.
Abhay Baijal
No, no, they are specialized nutrient use efficiency products. Very high. Yeah, those are as you say. See, somebody should understand that the agriculture is moving in a different direction. It is no longer bulk, it is more precision, it is more specific to soil conditions. It is also very specific to nutrient use efficiency and application capabilities. So we have to now move from very generic to kind of specialized agricultural inputs. So that is the way it is going. And we have to work with some of the international companies to bring products that really work.
And one of them is what we are going to do, called I think Uttam Carbonis or something which we are coming in with nutrient, it’s content to increase the carbon content in the soil. It will improve the nutrient use efficiency. So these kind of products plus Cortiva, we are already there with them in terms of some of their products. We are already co marketing.
Aman Kothari
And sir, how big do you think this could get for us in terms of Route 2?
Abhay Baijal
Well, if we, if we, when we were talking to Nutrien, they said that, look, what is the total market in India? And we indicated in the region of $1 billion by the next five years. So you can understand what kind of percentage they would be looking for. Maybe 10% would make a large number.
Aman Kothari
Yeah. Thank you. Thank you, sir.
Operator
Thank you. Ladies and gentlemen. You may press Star and one to ask a question. A reminder to all. You may press Star and one to ask a question. Thank you very much. As there are no further questions from the participants, I now hand the conference back to the management for closing comments.
Abhay Baijal
Thank you, Purvangi. I would like to thank you all for joining the talk today and hope you were able to address all your queries. If you have any questions, further questions, you can reach out to our IR partners at Valoram Advisors. Thank you once again for participating in the.
Operator
Thank you members of the management, on behalf of Valorum Advisors. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines.