Deepak Fertilisers and Petrochemicals Corporation Limited (NSE: DEEPAKFERT) Q1 2026 Earnings Call dated Jul. 30, 2025
Corporate Participants:
Unidentified Speaker
Ranjit Chirumala — Analyst
Yeshil Mehta — Executive Director
Subhash Anand — President & Chief Financial Officer
Tarun Sinha — President, Technical Ammonium Nitrate
Analysts:
Unidentified Participant
Ramesh — Analyst
Niraj Mansingka — Analyst
Shubham Dhasmana — Analyst
Harsh Shah — Analyst
Maitri Shah — Analyst
Deepak Pawar — Analyst
Chirag Maroo — Analyst
Deepak Pawar — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Deepak Fertilizers Q1FY26 earnings conference call hosted by IIFL Capital Services Limited. As a reminder, all participants line will be in listen only mode. And there will be an opportunity for you to ask question after the presentation continues. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand over the conference to Mr. Ranjit Chirumala from IIFL Capital Service Limited. Thank you. And over to you sir.
Ranjit Chirumala — Analyst
Thank you Pari. Good evening everyone and thank you for. Joining us on the Deepak Fertilizers and Petrochemicals Corporation Limited Q1FY26 earnings conference call from the company. We have with us Mr. S.C. mehta, Chairman and Managing Director. Mr. Subhashanan President and Chief Financial Officer. Mr. Taruhi Sinha, President Technical Ammonium Nitrate. Mr. Subaras Jain, Executive Vice President, Corporate Finance. And Mr. Debashish Khedia, Senior General Manager, Corporate Finance. We would like to begin the call with a brief opening remarks from the management. Following which we will have the forum open for a Q and A session. I would now like to invite Mr. S. Mehta, chairman and Managing Director to make the initial remarks.
Thank you. And over to you sir.
Yeshil Mehta — Executive Director
Yeah, thank you. My voice is clear, right?
Ranjit Chirumala — Analyst
Yes sir.
Yeshil Mehta — Executive Director
Yes. Okay. So very warm welcome to all of you once again. And I hope you had a chance to review the results that we have uploaded on the website and stock exchange. But at the outset I am again happy to share that in the quarter that we just closed we have had a 17% improvement in the top line and a 22% jump in the bottom line over the same quarter last year. The net debt reduced by over 225 crores resulting into a net debt to EBITDA ratio improvement from 1.7 to to be 1.5x despite the capex cycle still going on.
Also our journey from commodity to specialty continues where now almost 25% of our top line is emerging from this shift. And of course the biggest contributor has been the crop nutrition business where we are seeing an excellent traction as regards the two major ongoing projects. Gopalpur, the Tan project. There we are seeing almost 90% of the total plant and machinery is already ordered or I would say 100% of the tagged, you know, equipment meaning equipment, machinery, control valves, panels, packages are all ordered. Only some of the bulk items now would be balanced which is normal in any project.
And as far as the Dahedge asset project goes, while 63% of the total plant and machinery is already ordered, 100% of the tagged one is already ordered. And so both the projects we are looking at commissioning in the Q4 FY26. Both the projects are in a space where we’ve been there since the last 40 years. And in comparison to any kind of competition we have number one, maximum proximity to customers. And in some of the products we are on both the coast. So that gives us the lowest freight deliveries to our customers. We are having multiple facilities which gives a huge assurance to the consumers because they will have, you know, a fallback kind of a thing from multiple manufacturing facilities.
We have a complete ready supply chain right from, you know, all the transportation warehouses and dealers and retailer networks. Of course there is a 40 years of solid experience right from raw material, sourcing, operations, safety, health, environment, all the regulatory frameworks, linkages with, you know, on the sales and marketing side. And last but not the least unique that is going to be with us is that we are an integrated player right from, you know, LNG gas to ammonia to the building block nitric acid, right up to all the finished products. So this is going to be something which you know, will pan out in terms of, you know, further strength to our foundational projects and products that are there.
As far as the quarter goes, I thought of sharing a few interesting insights. Now as many of you may know, ammonia contributes or constitutes almost 75 to 80% of our key chemical variable cost of production. 75 to 80%. Now ammonia has seen a volatility in the pricing right from say 10% to 200% over the last five years Q1 quarters, if I might take it that way. And yet our contribution margin in the downstream of our market determined key products, I.e. technical ammonium nitride assets has hovered around 40% plus and our consolidated EBITDA margins have hovered around 18 to 20% over the last 5 Q1 quarters.
Now what it tells very clearly in terms of these actual facts that the business model, the businesses have a very strong resilience and robustness which is evident from some of these financial figures. The second insight I might want to share is that our plant OPE, OPE’s operational efficiencies have now improved from 78 odd percent to almost 86 and some plants over 93% over the last five years of hard work. And as per global benchmarks, this sits in what they would call it as a very efficient operations category. So the manufacturing setup and facilities are also on a very strong wicket.
The third insight I might share is that with over 25% of our revenues now emerging thanks to the move from commodity to specialty, the specialty shift has given us price premiums from 15 to almost 40% over the old commodity pricing. So net net, you know, the above. All of this confirms and validates for us that the three major strategies that we have been working on over the last I would say five years, namely number one that we grow in the area of our expertise where we have the expertise over the last 40 years. Second strategy that we need to look at backward integration as a risk mitigator and third most important that we get close to the end consumer based on not just products but tech superior services.
All these three strategies get validated that you know we are in the right direction and that it will deliver good shareholder value quarter on quarter or year on year. So with these I would say broad insights. Let me hand you over to our CFO Subhashanan who will take you through the details of the workings of the quarter and as we see things pan out. Subhash.
Subhash Anand — President & Chief Financial Officer
Thank you Mr. Mehta and good afternoon everyone. Thank you. All of you joining us today to discuss the financials and operational performance of B Plus Fertilizers and Petrochemicals Corporation Limited for quarter one FY26. We are pleased to report a strong start to the fiscal year marked by disciplined execution, improving operational efficiency and in healthy financial performance. Our strategic priorities are translating into intangible progress or tangible progress. And we continue to strengthen our foundations for long term sustainable growth. Let me now take you through the key financial highlights for the quarter. Revenue. The operational revenue stood at 2,659 crore, a robust 17% increase.
YoY driven by broad based growth across segment. Notably our differentiated specialty product portfolio in crop Nutrition business contributed 45% of revenue and the B2C segment in PAN accounted for 16%. Underscoring the success of our market focused approach on EBITDA operating EBITDA reached 513 crore up 10% YoY and 7% sequentially. Among our strongest Q1 result, EBITDA margin improved to 19.3%. A 130 basis point increase. YoY reflecting improved product mix and disciplined cost management. On profitability, the net profit grew 22% YoY to 244 crore with PAT margin of 9.1% while the PATs declined sequentially 12%. But that was due to 37 crore defer tax reversal booked in quarter 4 of FY25.
If we adjust to that, the pat is largely flat and that reinforce our underlying earnings strength. Coming on segmental performance, Fertilizer segment delivers stellar YOY growth of 125% driven by higher value added products and favorable market dynamics. On a chemical front side, the profit declined 9% YoY due to pricing softness in IPA and ammonia. The rest two verticals has shown an improvement or almost at a similar level of profitability on the balance sheet and capex. We invested 377 crore in capex during this quarter yet successfully reduced the net debt from 3,305 crore to 3,078 crore.
Our net debt to EBITDA ratio improved to 1.5x from 1.72x in March 25. The net debt to equity remain comfortable at 0.43x. Let me share one of the legal updates which happened just a couple of days back in our Mahathan Agritech Ltd. We received a favorable ITAT orders ruling for assessment year 201617 to 2020 21. The ITAT deleted all additions made by the Income Tax Department eliminating tax demand totaling 581 crore. Corresponding penalty order of 479 crore are expected to be withdrawn providing significant regulatory clarity. On a segmental highlight in our CNB crop nutrition business, the segment posted another strong quarter.
Manufactured bulk Fertilizer sales reached 1.8 lakhs metric turn up 3% YoY. Croptech, our specialty bulk products are 73% YoY growth demonstrating growing farmer adoption. Specialty fertilizers like pencils, water soluble grades recorded 21% YoY and 99% quarter on quarter growth respectively supported by sharp market penetration. Talking about outlook for our CNB business with a favorable monsoon increasing adoption of high value solutions like Softtech and Solutec and a sharper marketing, we anticipate strong momentum for creep 2025 season on our mining chemical business the sales volume rose 7% YUI 146kt supported by full capacity utilization. Elden volume declined 15% YOY due to early monsoon impacting mining activities.
B2C volume grew 15% QoQ down marginally 2% YOY on account of lower ELDEN off tech. As we just talked about early monsoon impacting activities. In terms of outlook we expect Q2 to be a seasonal seasonally muted due to monsoon. However the enhancement of our export quota to 50,000 metric tons per year is a strategic positive positioning us for growth in H2. Our focus remain on differentiated high value offering to mining and infra customers coming to industrial chemical segment, the nitric Acid volume reached 74 kg growing 15% YoY and 3% QoQ. IPA volume surged 27% YoY and 51% Q benefiting from plant upgrade completed in quarter four.
The continued softness in IPA pricing is a key factor weighing on the margins of our industrial chemical segment this quarter. On Outlook, while we foresee some pricing pressure in IPA and nitric acid due to seasonal and inventory late dynamics, our growing specialty portfolio and targeted customer segmentation efforts position us to weather these short term challenges effectively. On our projects of the Hague and Gopalsurg, we continue to advance our strategic CAPEX project. The combined investment of 4,661 crore across the Hayes and Gopalpur project. Gopalpur Tan project is at 80% complete stage and the Hayes Nitric Acid Project is at 57% complete.
We are firmly on track to commence commercial operations by end of FY26 and with tight control on timeliness and execution. In summary, Q1FY26 demonstrate our continued resilience and agility in a dynamic market environment. Our integrated strategy anchored in innovations, operational excellence and customer centricity is delivering consistent performance across all business lines. Each of our segments aligns strongly with India’s core economic growth pillars, agriculture, mining, infrastructure and pharmaceuticals, providing us the robust platform to create enduring value for all our stakeholders. We deeply appreciate your continued trust and support in our journey. I now welcome any questions you may have.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone 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 will wait for a moment while the question queue assembles. The first question is from the line of Yash Gupta from Achit Kotecha family office. Please go ahead.
Unidentified Participant
Good afternoon everyone. So my first question is on the 10 value addition business. How meaningful is the 1010 value addition business for us? Where do we see ourselves in next two to three years with this value addition services?
Subhash Anand
Okay. Currently as we just informed, the 16% of our total revenue comes from B2C segment in terms of how things are going to span out. Tarun, you would like to add? Sure.
Tarun Sinha
Moderator, just to check, Tarun here. Am I audible?
Subhash Anand
Yes sir.
operator
Yes sir.
Tarun Sinha
Thank you. So thank you for your question in terms of value adding business. For the technical ammonium nitrate portfolio as we’ve been talking about in the previous investor calls as well, we pursue a model which is called as total cost of our patients model, which is really the value for the end consumers. And these end consumers being the mine owners, mine operators, mining contractors, and in the infrastructure sector, different kinds of projects where rock excavation takes place. So this model was started about a year and a half ago, roughly from now. And it is in simple terms, it’s about how can we help these end consumers optimizing and potentially reducing the cost of rock extraction or cost of mineral extraction if it is a mine.
That’s the value added model, you know, at a high level that we are pursuing. It has got a combination of specialty products, it’s got, you know, different kinds of technological interventions, it’s got people capabilities, so on and so forth, which we have been building over a period of time. So this journey and the important part that I would like to underscore here in this value added part of our business is the proof of concept. This total cost of operations that we have embarked upon has been proven in the industry in different kinds of mining conditions, in different kinds of minerals deposits as well.
So that’s one good news. And now we are working on a plan to scale it up going forward which will require further capabilities to be built for the investments to be made, so on and so forth. That’s where I will leave it at this point in time. But certainly it’s moving in the right direction.
Subhash Anand
Yeah, our initial phase was more to build or I say prove ourselves on a proof of concept which we did successfully. Now to time for us to look how do we accelerate and take it to the next level. And that’s where we are in our journey.
Unidentified Participant
If you can throw some light on the EBITDA margin like suppose like in the normal business of the 10 hours EBITDA margin are this much and if we are going with the value addition services that our EBITDA margin for that service is this much, it will be better help us to understand.
Subhash Anand
No, in fact as Mr. Mehta spoke in his address, any specialty product or B2C segment help us do help us to have a price premium and saw this business of also we do have a differential margin portfolio to our normal tan business to specialty or a B2C business. And that differentiation we expect to continue because that’s where we are adding value. And we expect that to go further up, not come down because we were at a proof of concept. More we go in commercial, it will improve further.
Unidentified Participant
Okay, sir, the second question is on the Gopalpur project We expect it to achieve like 75% of our capacity by FY27. So how we are going to achieve this new capacity? Have we done any tie up as of now?
Subhash Anand
No, it doesn’t need a tie up actually if you ask me, this business is so far within India added in a short, there’s more demand than supply. So the additional capacity, what we expect will help us actually to be more self sustained India and then yes, there are many activities currently which we are under or which we are taking up to ensure we have a right marketplace to fulfill or to go down in this and then place this material. Dhanun, you would like to add more of this? Yeah, sure.
Tarun Sinha
So just adding up to what Mr. Subhash Anand mentioned right now, as many of you would be aware who are tracking the market closely, you know, roughly we see annual imports of ammonium nitrate to the tune of 400,000 tons, 4 lakh tonnes. Now obviously you know, that’s the first thing to replace when these capacities are coming up. So that’s the first point. You know, how these additional domestic capacities will be used up. At the same time the domestic market is projected to grow at a CAGR of anywhere around 6 to 7% which in simple terms would mean every three years, roughly every three years, close to 250 to 300,000 tons of additional demand getting created.
If you combine these two, the import substitution to the extent I talked about in the quantities that I talked about and the extra demand creation which is taking place in India, there is no need to be concerned. And the other advantage we have with at least Deepak’s Gopalpur plant is it’s on the east coast. It is the only ammonium nitrate plant in the country on the east coast at that scale. There’s another satellite plant of our own only in Chicagoland on the east coast. So therefore we will have, due to the locational advantage, as Mr.
Mehta also pointed out, of having monumental plants on the west coast as well as on the east coast of India. It will give us a very unique position in terms of optimizing the logistics, cost, cost of delivery to our customers and that will further help in capacity utilization. So if we combine all of this, you know, we are reasonably placed a longer perspective.
Unidentified Participant
Sir. But if we talk about like 4 lakh metric, then we import overall in India. So are we price competitive in terms of what’s imported land and cost and what we are planning to sell?
Tarun Sinha
As we talked earlier in the very first question, although it was from a different caller, I think but it was, it was about value. So we at least Deepak does not have a business model which competes on price. We have a business model which competes on value. And that’s what we will continue to do.
Unidentified Participant
Okay, sure. Thank you sir.
operator
Thank you. Before we take the next question, we would like to remind participants you may press star and one to ask a question. The next question is from the line of Adarsh Jain, an individual investor. Please go ahead.
Unidentified Participant
Thank you very much. Well, my question is related to the export quota of 10 which was recently increased to 50,000 metric ton. So what was the earlier quota and how much? I mean were you able to utilize the earlier quota?
Tarun Sinha
Yeah, thank you. If I can take that question subash, with your permission? Yes, yes please. So great question again. So the previous quota was 202000 tons which was valid till December 2024. That was fully exhausted. That is the first part of your question. And the new export quota which we have got from government of India, which is 5,053, it is per financial year at this stage. And once we start delivering those numbers, we are reasonably confident that eventually government of India will remove this quota system completely as far as the exports of ammonium nitrate is concerned.
Unidentified Participant
Okay. So this 50,000 metric ton quota is. Allotted to deeper for every manufacturers of India.
Tarun Sinha
Technically it is to Deepak because Deepak is the only exporter of ammonium nitrate as we speak.
Unidentified Participant
And one more question related to Australian subsidiary. I think before some time we had bought some additional shares from very stake. Actually some additional. We had bought some additional intake in the Australian subsidiary from the local institutions in Australia. So what are we doing there? I mean how much revenue we are generating from there? And what is the plan of scaling up that Australian business?
Tarun Sinha
Shall I take that? Yeah, thank you for that question as well. So you’re right. A few months back we. So we were 65% shareholder in our Australian subsidiary company and the name is Platinum Blasting Services. Few months back we acquired 20% additional shares of that company which has brought us to 85, 85, 85% as we speak. Certainly it’s a move by Deepak in the right direction. When we earlier talked about the value driven total cost of operations driven business model model that we are rolling out in India. It’s, you know, this enhancement of shareholding in the Australian subsidiary is also a move in the same direction as far as the Australian market goes for us where we will be playing a much more pronounced, I would say role in Platinum and accelerating the growth of that subsidiary company in The Australian market.
And secondly, by virtue of increasing our stakes in the Australian entity, it allows us to have exchange of knowledge or transfer of knowledge, intelligence, technology because Australia is a much more advanced country compared to India when it comes to mining. So there’s a lot of other benefits to be gained through our Australian subsidiary by way of the shareholding enhancement that is for the Indian market.
Subhash Anand
And in terms of overall number, yes, there is a qualitative benefit. What spoke about, we get a lot of knowledge coming from our Australian entity and currently the co model what we are looking in India, yes, we get a lot of knowledge benefit coming from that entity. And then financially this entity is profitable to contribute in a, in a decent amount to our bottom line. So everything is strategically, it’s the right thing for us and that’s what prompted us to enhance our holding in that entity.
Unidentified Participant
So are we trans, I mean are we exporting paint from here to Australia?
Tarun Sinha
Yes, there is a plan to do that. Once we have our Gopalpur plant on the east coast up and running then if you visualize the world political map, it will be closer, you know, from India east coast to Australia compared to currently the only plant that we have on the west coast of India. From there to Australia is a long shot. So the answer is yes.
Subhash Anand
And currently we don’t have any surplus capacity in town. So even if we want, we can’t because, because of demand supply shortage. But yes, there is a plan.
Unidentified Participant
Okay. Thank you.
operator
The next question is from the line of S. Ramesh from Nirmal Bank Equities. Please go ahead.
Ramesh
Thank you very much and good afternoon. So if you’re talking about your Australian subsidy, can you share what is the investment in the cost equipment required this additional 20% and what is the size of the company in terms of revenue and profits.
Subhash Anand
The last year? If we talk about the total revenue of the company is around 6, 600 crore approximately.
Ramesh
And how much was the profit last year? EBITDA or EBITDA?
Subhash Anand
We don’t in fact share profitability specific so you need to wait for that number. But in terms, yeah, and in terms of acquisition, the total entity value at which we acquired was approximate, I think.
Tarun Sinha
About 80 or crore somewhere in that.
Subhash Anand
Range that’s a 15%.
Tarun Sinha
Yeah, we’ll check back and get back to you with that. But that’s the sort of magnitude 20%.
Ramesh
At 80, 80 crores right around that.
Tarun Sinha
Yeah, don’t, don’t hold me to that number because I have to check roughly.
Ramesh
So is there any debt, is there any debt in that Entity.
Subhash Anand
Small debt is there in that entity? Not very high.
Ramesh
And what is the value of the 65% investment in your balance sheet?
Subhash Anand
No, I do not have that value of that number. But if you see the total valuation on 15% equity, if I go with the number it’s roughly around 5 second. 500, 500, 500, 550 crore. That’s whatever is the total equity value which has come.
Ramesh
So 15 equity. You said 65% shareholding.
Subhash Anand
That’s the value of the company. I’m saying 15% acquired value is around 75, 76 crore. That’s what we have paid for 15% share. So you can do a reverse computation and see the total equity or ability enterprise value for that company.
Ramesh
Okay. Okay. So you’re saying from 65 it’s gone up to 80. Earlier I thought it was 80%.
Subhash Anand
Now it is 80. 85. 85.
Tarun Sinha
65 plus 20. So 85. Yeah. And the value of that 20 we’ve got the number the 6. 77.
Subhash Anand
That’s what I’m saying.
Tarun Sinha
Yeah. 77 crore. So it was, I was, I was saying 880 ballpark. But that’s the number.
Subhash Anand
So, so equity value of around 400 crore. That’s what we are paid to for that entity to acquire this state.
Ramesh
So this is the equity value. Okay, 80 crores for 20. Fine, understood. Okay. So now if you see the B2C mining revenue, it is flat. Is it because of monsoon and do you expect that to improve the next nine months?
Subhash Anand
Don’t, don’t expect this number quarter on quarter to improve. Because this is a proof of concept and we are moving in that direction. The ramp up will take some time. So it’s not, it’s not a number which every quarter need to be tracked but directionally it gives where the company focuses and how it’s moving. So you’ll continue to be slightly mid to long term. You’ll continue continuously keep seeing things moving in this direction.
Ramesh
Okay, so I have two more thoughts. One is given that you have a larger share of the higher margin business where you’re seeing margins under pressure now in the first quarter. So how do you see the margins in the chemical segment moving the next 12 years? And secondly on the tan business, can you share what is the current absolute demand in India and the current capacity and how do you see the capacity addition in the next two to three years? Because coal India is talking about backward integrated capacity addition by 29 and that does raise some concern about the coal India demand for the entire industry.
So if you can give your thoughts on the capacity addition and you know, particularly that of Coal India and secondly, how you see the margin profile in the next 12 years.
Subhash Anand
Okay. In terms of industry capacities coming. Let Param give more insight. How about the Coal India plan? Coal India, Okay.
Tarun Sinha
See, I don’t want to go out of turn in trying to answer what Kohl India might be doing. That’s the first thing I want to put on record. They are our customers at the end of the day. Secondly, I’m sure the way, you know things are panning out, there are think tanks in the government who are also looking at this thing. Whether core India should have its own ammonium. See, the critical thing is it’s not important whether it’s ammonium nitrate plant or something else. Where this all started from is see, India has got abundant coal reserves as we all know.
So that means there’s a lot of carbon we are sitting on as a country. On the other hand, as a country we import huge amount of carbon in the form of coal, natural gas, crude oil on and so forth. This is what prompted the policymakers in our government some years back. How is it possible that on one hand we are importing so much of carbon, on the other hand we are sitting on world’s third largest carbon deserves. This is a complete contradiction in terms of how it should be. So that stemmed this whole thought process that okay, how can we put India’s carbon, which is the coal reserves to different usage.
And that’s where Niti Aayog started do some work seven years back and they came up with various initiatives. One of the themes they came out with is what is called in India today as coal to chemicals. Which means starting with coal that we have in India, how can we produce different kinds of chemicals? And that theme then got further evaluated and there is a long list of chemicals which can be produced through coal gasification process. Now coal gasification technology for Indian coal itself is not proven commercially at this stage. It’s work in progress. But that’s how it all started.
That’s where it is. So today somebody might be thinking I will start from coal and produce ammonium nitrate. But that’s not the only thing. At some stage stage people may realize that India has a deficit of many other chemicals which can be produced through coal gasification process which India is currently importing all those chemicals. So why we do that? So now all this is work in motion. You know, I’m not of course doing any of those government committees, but I can definitely say this with some Comfort and confidence that these things will be looked at by the government over a period of time as to how beneficial best to put this Indian coal to which kind of use.
No point creating assets and products which we already have enough of, rather focus on producing things which we have deficit of. That’s where government will intervene at some stage is my view.
Ramesh
So just to get things in perspective then are we to assume that the definite capacity additions will be fertilizer, then GNFC and jumble. And you, you are not in the camp that believes that that coal India project will make progress although being announced in parliament and they have set up a JV and they’re talking about, you know, executing by 29. So that’s a very large capacity. They are putting up 6 lakh tons and that is about 60% of current consumption. So for an investor that’s a huge overhang. So is there any discussion between you and the government to suggest that you know this possibly not in the best interest of the industry and you expect the serious reconsideration or are we to assume that you will be able to, you know, grow despite that capacity coming up? How should we look at that?
Tarun Sinha
The first thing, as I mentioned earlier that we are not, first of all, we are not sitting in any of those government committees or think tanks who are making these policies. Hence we are not in dialogue with government or anyone else on this matter. We are purely going by rationale how the industry will look at things. What to produce a thing which is already in sufficiency in the country to produce more of it even if it is not required, or to produce other things which is possible to produce from coal gasification. Which country has a deficit of.
Somebody has to answer that question at some point in time. Deepak is not the one who will answer that question.
Ramesh
Okay, so if you take the private industry capacity addition, what would that number be in the next two years and do you think the 6, 7% CAGR is enough to help everybody operate at 85, 90%? What is the kind of data you can share on that?
Tarun Sinha
Yes, the answer is yes because as we talked earlier, there will also be some exports which will be taking place from India. So the sort of capacity utilization numbers that you talked about as a combination of everything, the answer is yes.
Subhash Anand
And couple of things I just add into what just spoke about the new capacity which is coming up, coming up in towards end of this year, I call it not, will become operational from day one. Neither we nor anybody else will have a hundred percent capacity utilization immediately. So the Capacity utilization will get built up for everybody and so the CAGR of 600 additional demand also will be keep coming. So as spoke about three years put together add to around another 300,000 ton additional demand in this if we see a shortfall of current shortfall of capacity and additional demand which will come in in three years will again be reaching to a net net short capacity for India is concerned.
So it’s not a question of oversupplying if somebody looking mid term term it’s again a question of demand supply getting balanced and we continue to win the same speed and then yes other thing which are important for us which your next question was margin production. We are continuously working on margin expansion various initiative on margin expansions PCO is for downstream Germany is one of them which spoke about because. Because that’s what help us margin expansion Export is another thing doing more and more export and seeing how can we protect our margin Other thing with Gopalpur coming in place we’ll be among the largest producer of tan not just in India but among the world I call it the size and scale and efficiency what we’ll have will definitely give us a complete so that’s what we some of the few things which we know will help us to sustain, maintain or expand the margin in the near future or in the coming time.
Ramesh
Thank you very much. I’ll join the Q and wish you all the best.
Subhash Anand
Thank you.
operator
Thank you. Ladies and gentlemen Please limit to 2 questions per participant and come back in the queue for a follow up. Thank you. The next question is from the line of Neeraj Mansingha from White Pine Investment Management Pvt Ltd. Please go ahead.
Niraj Mansingka
Yeah, thank you. Few questions 1 what are the capex completed in rupees core for both the projects and yeah. And second is what is your view on the outlook of ammonia demand supply in the global situation market as well as global how you see the panning out of that and thirdly on the fertilizer some specialty fertilizer has been you know export cups from China Any impact of on deeper fertilizer because of that?
Subhash Anand
Sorry, can you repeat the question Capex.
Niraj Mansingka
Of each how much amount has been spent till date with the product ammonia outlook that you see globally and fertilizer specialty fertilizer curbs of China how can it positively or negatively impact the programs?
Subhash Anand
Okay, ammonia if you say ammonia supply this point of time there’s no. There’s no shortage of ammonia at this point of time. I call it that way when it comes to overall demand supply of ammonia is concerned Ammonia prices are soft. We are. We continue to maintain that at this point of time. If somebody looking ammonia prices. The ammonia prices are running it almost at a low of many many years average. In fact this is one of the lowest ammonia prices currently what we have seen or what we have seen in last quarter. So two things what we expect globally ammonia demand will catch up because a couple of things which normally happen to the motion in S2 some of the plants Europe goes for shutdown and that’s already started.
And on top of that the gas prices demand supply also changes globally in quarter two or in S2. So that brings the ammonia prices up in S2 and that will happen. Or that’s what is expected to happen. I call it in terms of ammonia pricing is concerned demand supply. Currently I don’t see there is much challenge of demand supply of ammonia. Ammonia is available. It’s more of a pricing which is more important. And that’s what we need to keep a watch on. So far we are concerned than for RPCL or ammonia profitability is concerned in terms of total capex done so far.
Niraj Mansingka
Cumulative capex for.
Subhash Anand
So we. We have done roughly around 1700 crore capex so far.
Niraj Mansingka
Can you give an individual number if possible?
Subhash Anand
No, not this point. I don’t have it right now in front of me. We can. We can give you offer and you can reach out to one of us.
Niraj Mansingka
Okay. And what is the view of the China specialty chemical export curves?
Subhash Anand
China’s basically fertilizer export of that study more rather specialty I call it now There are two things which is. Which has happened with that curve coming in lot of specialty fertilizers which comes into India comes through from China. So with that ban happening the demand or the supply has moved out from China to other countries like European country including Israel and other countries. So that has finally it has increased the cost for everybody because whose most of the supply of specialities from outside India not in India. And that cost has been passed on. So net net.
We don’t. There’s no impact to profitability is concerned. But the cost of buying what it used to be earlier when it was coming from. From China has gone up the moment supply has moved out from China to other countries.
Niraj Mansingka
So the related is how much percentage we are buying from China for smart tech.
Subhash Anand
Not. Not much smart tech or proptech. It’s more of a specialty chemical. That’s. That’s what the most of the specialty chemicals have some share of trading volume which comes from China.
Niraj Mansingka
Okay. So. So the impact is the traded volume we just see a higher number because of higher realization because of pass on. But is that the right way to look at.
Subhash Anand
Yes. In fact the traded volume, not the bulk. I talk about specialty. If we talk about oral specialty volume, what we do do have some traded element part of that and that has gone up that has moved out from China to European countries.
Niraj Mansingka
Okay. And is there any inventory gain sitting in for this on this specialty? Okay, great. Thank you very much.
operator
Thank you. The next question is from the line of Chuband Dashmana from Ashit Koticha family office. Please go ahead.
Shubham Dhasmana
Hello. So thank you for taking my question.
Tarun Sinha
Yes, we can hear you. Yes.
Shubham Dhasmana
Okay. So so when we say that the new plant is going to start in Q4 F26 so are we expecting some kind of loss in a quarter or two due to low volumes?
Subhash Anand
No, no we don’t expect loss in that quarter because it only expected towards end of FY26. So no, no nothing specific impact is visible for that quarter. Only thing is it will have a low capacity utilization in the initial time. But that will be for a full cover of quarter is expected.
Shubham Dhasmana
Okay. And sir, that would be the breakeven point for the for both the plants. And my second question is there used to be exclusive let’s say 10 exports from Russia. So are we seeing any of that in this scenario.
Subhash Anand
Break even is not a question in terms of these projects are concerned because the kind of a margin this project has so break even will not I will not think that fact concern for us at this point of time. So her pan from Russia is concerned. You would like to talk.
Tarun Sinha
So what was the concern from. Can you elaborate your question regarding Russia then?
Shubham Dhasmana
Hopefully I think I think so. When so before the conflict Russia you can consider I think there was a supply of of can from Russia to India.
Subhash Anand
Yes. Okay now let me start and then can add to that. Basically there was a time Ukraine was started and since Russia comes under a lot of restriction so there are a lot of import. India being the market. A lot of import happened from Russia to India during that time. Fact had had an impact but that was more FY24 that that’s what the phenomena which was seen. If we go back and see last one one and a half year or last five quarter primarily barring I say recent phenomena. But otherwise if we see that import in India pan is now broadly spread.
It’s not just only focused on Russia. If we see it has a mixed pie from other country also off late again. Yes, Russia price has gone up but that seasonal keep Switching from one to another. But if we are looking slightly longer, five, six, quarter now the SPY is broadly distributed among four, five countries. That’s the way it used to be.
Shubham Dhasmana
Okay, thank you for taking my question.
operator
Thank you. The next question is from the line of Harsh Shah from Seven Rivers Holding. Please go ahead.
Subhash Anand
Your voice is cracking. Not able to hear.
Harsh Shah
Am I audible?
Subhash Anand
Looks slightly better. Go ahead.
Harsh Shah
Hello.
Subhash Anand
Yeah. Yes, yes.
Harsh Shah
Question is while the crop prediction segment liquidy well in Q Industrial.
Subhash Anand
You know, again your voice is bad. I’m not able to hear.
operator
The next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead.
Maitri Shah
Hello, good afternoon. Am I audible?
Subhash Anand
Yes, we can hear.
Maitri Shah
Yeah. This quarter we had a really Good margin improvement qoq so we had 19.3 programs. So do we expect that EBITDA growing from your cotton quarter or will stay in this range for the rest of the year?
Subhash Anand
What’s the question earlier?
Maitri Shah
Hello.
Subhash Anand
Your question is not clear. Can you repeat the question?
Maitri Shah
Yeah, I was asking on the ebitda margins of 19.3% are we going to grow quarter on quarter on these or are we going to remain stable in this range for the rest of the year?
Subhash Anand
No, in fact if you see our last few quarters now we are in a range we are somewhere between 18 to 20% range. And because our business is a mix of three businesses and each business has their own profitability and the seasonality so it moves within the quarter depending on which business is contributing more. But we are confident we’re able to hold on to our range what we have maintained so far.
Maitri Shah
Can we expect a better margin? For last year we clocked in about 18.7%. So growth on that, is that possible?
Subhash Anand
Keep finger crossed. We all want to do it better. Let’s see how things go. But that’s what I say. We are keeping a range and we’ll continue to to be in that lane. That that’s what our endeavor is.
Maitri Shah
Okay. And on the top line. So two of our plant additions are coming at the end of the year. So for this year, what sort of growth are we expecting in our revenues and with additional.
Subhash Anand
This year will not be a major impact because both plants are expected towards end of this year. So you’ll see a impact coming in FY27 for us, not this year.
Maitri Shah
What sort of capacity utilization are we targeting from the two new plants and how will the growth pan out in 27?
Subhash Anand
We do see somewhere between around 70% capacity utilization in first years. That that’s what our number or our estimate at this point of time we have already talked about or given a number what capacity addition which we have. So it’s a simple math after that for anybody how things will pan out once we go with 50% utilization experience.
Maitri Shah
Okay, thank you. That is it for myself.
Subhash Anand
Thank you.
operator
Thank you. The next question is from the line of Deepak Pawar from Vasuki Indian Fund. Please go ahead.
Deepak Pawar
Am I audible?
Subhash Anand
Yes.
Deepak Pawar
I would like to congratulate the team first for the excellent set of members. My question is on our Gopal plant. So can you give me a ballpark figure that what kind of revenues would be achieved on by next year on 70 or 80% utilization as you said.
Subhash Anand
No, just simple. I just spoke about the capacity addition is around 387.3lakh 73.80,000. You take 70% capacity utilization and you have but done pricing already. With you we. We publish every quarter. So a simple math can help everybody. So.
Deepak Pawar
Yeah, I understand. Secondly, this year, this quarter the nitric acid prices were in pressure. Despite that we were able to achieve good numbers over there. Do you see any growth in nitric acid prices in a few quarters or will it remain stable? What’s your view on that?
Subhash Anand
Nitric acid is not in the pressure. Nitric acid pricing. It was an IPA pricing which is more in pressure. Actually if I talk about and. And we. We have spoke about even in our earlier communication Also last quarter IPA going through a difficult cycle. It has H2 was very good for IP. And after H2 every quarter on quarter we are seeing it IPA pricing getting further stuck. And this demand supply gap of quantity is not an issue. Demand is there but it’s the pricing which is more challenging. And that we expect. That we expect to continue for some more time.
Deepak Pawar
That’s all from myself. Thank you for your time.
operator
Thank you. The next question is from the line of Chirag from Keynote Capitals. Please go ahead.
Chirag Maroo
Yes. Thank you for the opportunity. So my first question. Is there any progress on the IPA that we were creating for semiconductor?
Subhash Anand
Not. Not right now. We are still in our I say drawing board and trying to evaluate various options. What is the right way for us to move. So you need to wait for some more time till we make it some concrete plan and come back and share with me.
Chirag Maroo
Sure, sir. So second thing I wanted to know. We have. We have planned to procure almost 25 TBtu annually. Will that suffice the requirement of the ammonia plant that we have on the West Coast. 629,000 capacity.
Subhash Anand
Okay. You are talking about ammonia supply, right? As you Get. Yes yeah the natural gas contract what we have is enough or more than enough what we need for our PCL or ammonia plant. So we don’t have any, any shortfall or any any further requirement of natural gas to be tackled. Our current contract is taken care for that.
Chirag Maroo
Just for better understanding could you give me a fall pass number like how much, how much tons or TBTU of natural gas is required for 100,000 tons capacity of ammonia?
Subhash Anand
I’ll just, just give me a minute I’ll tell you. Broadly okay broadly we need around 200 to 200,000 or more 20 TV that’s our requirement what we have TCL plan.
Chirag Maroo
Okay annual return is.
Subhash Anand
Yeah that’s, that’s around approximate requirement what we have. So that’s the reason we’re saying if the contract what we have is good enough for us to meet all requirement.
Chirag Maroo
Fair enough. So next question is related to the pricing of ammonia which is going on today. At what price of ammonia do we do a break even on EBITDA levels and PVT levels?
Subhash Anand
We have shared in fact in past around 300, 325 Middle east fob we will we are at EBITDA break here and around 400 we are pvt breakeven.
Chirag Maroo
And the last, last question from my side just wanted to check do we have any supply contracts on the east side of India where the Gopal plant is expected to come? So do we require any ammonia on.
Subhash Anand
That side and no, the supply in ammonia will be imported ammonia for the Palpur and we are already in process of tying it up because ammonia as I spoke earlier ammonia quantity is not a challenge so that will happen.
Chirag Maroo
Fair enough. Thank you. Thank you so much.
Subhash Anand
Okay, thanks a lot.
operator
Thank you ladies and gentlemen. That was the last question for today. I now hand over the conference to management for closing comments.
Subhash Anand
Thanks everyone and thank you once again for joining us for Debug Fertilizers and Petrochemical Corporation Limited Q1 FY26 earning call. We look forward to engaging with you further in the coming quarters ahead. Thanks everyone.
operator
Thank you. On behalf of IIFL Capital Services Limited concludes this conference. Thank you for joining us and you may now disconnect your line.