Deepak Fertilisers and Petrochemicals Corporation Limited (NSE: DEEPAKFERT) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Akash Majhi — Head of Investor Relations
Sailesh Chimanlal Mehta — Chairman and Managing Director
Subhash Anand — President and Chief Financial Officer
Tarun Sinha — President – Technical Ammonium Nitrate
Analysts:
Unidentified Participant
Niraj Mansingka — Analyst
Pratyush Kamal — Analyst
Chirag Maroo — Analyst
Mukta Chandani — Analyst
Sheel Kumar Shah — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Deepak Fertilizers Q3FY26 earnings call. As a reminder, all participant lines will be in the listen only mode and there’ll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touchstone phone to. I now hand the conference over to Mr. Akash Mai. Thank you. And over to you.
Akash Majhi — Head of Investor Relations
Thank you, Mike. Good evening everyone. Thank you for joining us on the Deepak Fertilizers and Petrochemicals Q3FY26 earnings conference call from the company. We have with us Mr. Shailesh Mehta, the Chairman, Managing Director, Mr. Subhash Anand, President and CFO Mr. Tarun Sinha, President, Technical Ammonium Nitrate and Mr. Subaras Jain, Executive Vice President, Corporate Finance. We would like to begin the call with opening remarks from the management, following which we will have the forum open for an interactive question and answer session. I would now like to invite Mr. Shailesh Mehta to make the initial remarks. Thank you.
And over to you, sir.
Sailesh Chimanlal Mehta — Chairman and Managing Director
Thank you. My voice is clear, right?
operator
Yes, sir, you. Loud and clear.
Sailesh Chimanlal Mehta — Chairman and Managing Director
Okay, so very good afternoon to everyone and thank you once again for joining us for the Q3FY26 earnings call of DFPCL. Our earnings presentation and press releases have been shared with the stock exchange and are also available on our website. And I do hope you had a chance to look at them. So, as you would have seen, Q3 was a challenging quarter and it got shaped by extended rains, geopolitical uncertainties and certain degree of price volatility. However, what differentiates DFPCL today is our ability to navigate some of these volatile cycles with a greater degree of resilience.
Over the past few years, we have increasingly transformed our portfolio, further strengthen our operating model, substantially enhance our customer engagement approach. And all of that has supported building this resilience. Now let me begin with a brief overview of our financial performance for the year to date. FY26 revenues grew by 12% driven by a healthy momentum in our crop, nutrition and bulk businesses. And adjusted for the one time tax credit in the previous year, PAT did decline 4%. Our net debt to EBITDA ratio today stands at 2.27x, fully aligned with our ongoing CAPEX cycle which is in its last leg of execution.
And it is going to be laying the foundation for our future growth and enhanced competitiveness. Having said that, at the undercurrent level there were two or three Aspects that impacted our results in a predominant manner. The first one being unseasonal and heavy rains. Now, what it did was it slowed down the mining activity in the country and that impacted by slowing down the requirement of technical ammonium nitrate, one of our key products. And for us and the industry, it also brought in a certain kind of constraint in terms of nitric acid usage, because nitric acid goes to feed into ammonium nitrate.
So there was a dual impact emerging out of extended monsoon season. Softness in the technical ammonium nitrate space and softness in the nitric acid space. Now, added to this, we also saw an increase in the ammonia prices globally. And that, you know, brought in the raw material price increase for both technical ammonium nitrate and nitric acid. So it was a bit of a double whammy. Now, if this were not enough, normally the range would have been good for the fertilizer sector, for the crop nutrition business. But the timing and the continuance of the heavy monsoon impacted the Kharif crop and you know, a lot of sufferance at the farmer level.
And in our Q3, actually, the farmers were cleaning away the fields from the Kharif crop which because of heavy rains, you know, got impacted and they were getting ready for the Rabi plantation. So this major ripple effect, which is like a black swan event, impacted all the three of our businesses. Having said that, now as we see things, it is broadly behind us and with now the normal weather emerging, mining is expected to pick up to its normal levels and the resultant, you know, demand for technical ammonium nitrate and also the resultant technical demand for nitric acid should pick up with the good water table.
We are expecting the Rabi season to also be very good supportive season for the crop nutrition and fertilizer business. Now our other product, IPA coincidentally also during this period got impacted due to much lower propylene prices globally, but not, you know, available in India at those lower prices. And this again impacted in terms of softening of the IPA prices. However, as per the ISIS Asia Pacific Pricing Insight analysis report dated 2728 Jan, there again we are seeing a slow improvement in the IPA prices that is being seen. So in summary, if I look at the operations, I would somewhere see three things that we continue to firmly believe in and we see validation.
Number one is that the basket of products that is from gas to ammonia to nitric acid to the downstream, the basket of products is giving us a good risk mitigator to be able to bring the resilience. The second thing that is getting validated quarter after quarter which is that the strong alignment with the India growth story that all of our three businesses have, that has always supported us in terms of ensuring that there is no demand destruction. And the third is that our continued drive from commodity to specialty or being more and more segment focused and wherever possible combining products plus services, this transformative model is certainly appearing to be in the right direction on the project front.
The project execution is going on in full steam and again that despite all the challenges, we are forging ahead with now almost 91% completion of our Gopalpur Technical Ammonitrade project and around 79% completion of our Daige Acid project. So as I look ahead the next quarter and mainly the year ahead, we will certainly see I would say at least minimum for half of the year the Tan Gopalpur project and the Acid Dahed project contributing to the bottom line. So this will be a major addition that we are foreseeing. The year is also going to see a partial advantage emerging out of our 15 year long term LNG contract with the Norwegian giant which will be somewhere supporting the good, I would say gas pricing.
So with that note let me hand you over now to our CFO Mr. Subhash Anand who will take you through the detailed financial performance of the quarter and be available for any clarification that you may want to seek.
Subhash Anand — President and Chief Financial Officer
Subash, thank you. Thank you, thank you Mr. Mehta and good afternoon everyone. Thank you for joining us For Deepak Fertilizers and Petrochemical Corporations Limited Q3 FY26 earning call, it’s always a pleasure to update you on our performance and share how we are progressing on our key priorities. At dfpcl. Our focus continue to be what drives long term value, strengthening our specialty product mix, staying close to our customers and ensuring agility across the organization. Despite the volatility in the external environment, our teams have maintained strong operational discipline and prudent financials management keeping us on track for sustainable growth.
Let me begin with the financial performance. As Mr. Mehta stated for Q3FY26 consolidated operating revenues stood at 2,830 crore reflecting a 10% YoY growth led primarily by CNB business. On YTD basis, revenue was 8,495 crore up 12% YoY demonstrating healthy demand despite extended monsoon geopolitical uncertainty and supply chain disruption. Moving to the segment wide performance in Mining Chemical Q3 volumes were largely flat YOY due to extended monsoon and softer coal demand. The bright spot was our B2C segment which continued its strong momentum with 26% YoY growth and on YTD basis total TAN volume grew 11% YoY.
In IPA volume declined 26% YoY largely due to plant shutdown in quarter three and weaker sentiments from correctness in acetone prices. YTD volume remains stable. In nitric acid volume was steady with a marginal uptick though pricing remain under pressure from excess imports and downstream dumping from abroad, YTD volume increased 4% yoy basis. Turning to our crop nutrition, CNB revenue grew 26% yoy in Q3. However delayed Ravi sowing and heavy monsoon impacted the uptake of crop tech in our specialty product with raw material cost inflation affecting margins. Even so, specialty fertilizer and crop tips contributed 30% of CNB revenue up from our previous quarter, an encouraging shift towards a more value centric mix.
Coming to profitability, Q3 EBITDA came in at 353 crore, a 27% YoY decline driven by higher raw material cost, inadequate subsidies support in fertilizers, a weaker realization in IPA and nitric acid tan remained steady and in ammonia higher pricing supported delivery though the GST reduction on the incentive income impacted the profitability. On YTD basis, EBITDA stood at 1330 crore down 8% yoyo primarily due to softness in IPA and ammonia with CNB and TAN helping cushion the overall impact. Adjusted TAN for Q3 was 141 crore down 34% YoY. After normalizing for one time 40 crore tax credit in Q3 FY25 YTD PAT was 599 crore down 4% YoY.
Shifting to product mix and balance sheet, we continue to reshape the business towards high value solutions driven offering. Specialty product contributed 33% of CNP revenue and B2C accounted for 16% of mining chemical revenue. On the investment front, YTT capex is around 1495 crore largely directed towards Gopalpur pan and the Haze 2 nitric asset project. Net debt stands at 4021 crore with a net debt EBITDA of 2.2x in line with our planned CAPEX cycle. Both key projects are progressing well and expected for commissioning in Q1 FY27. They will materially enhance competitiveness and margin resilience once operational.
Looking ahead, while some near term volatility may continue, we are beginning to see improvement in few areas. In mining chemical Q3 softness came from lower coal demand, extended monsoon and higher channel inventory. However, the early sign of recovery are already visible in Q4. Our focus remains on strengthening direct sales, expanding regional warehousing scaling exports and deepening our TCO based customer engagement model. In.
Our pharma and specialty chemical IPA sentiment is likely to stay muted in the near term due to weak acetone prices and elevated inventory. Nitric acid prices will remain stable amid excess imports and new capacity. We are responding by sharpening our application led segmentations and strengthening solution based customer engagement which will help to improve the overall nitric acid business in our crop. Nutrition favorable reservoir levels and healthy farmer sentiment position us well for Ravi 2026. Our farmer activation program continue to deliver strong engagement on the ground. With our major strategic projects nearing completions and our portfolio steadily shifting towards value solutions led offering, we expect earning visibility and margin stability to strengthen meaningfully in the medium term.
Thank you once again for your continued support. We now welcome your questions.
Questions and Answers:
operator
Thank you. We will now begin the question 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 and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question on the line of Neeraj Mansinkha from White Pine Investment. Please go ahead.
Niraj Mansingka
Yeah, thank you. I had two questions. One is on the can you give us some color on the new upcoming. Tan and ammonia projects and any impact. That can have on India’s demand supply equation. And secondly, how much could be the savings from the LNG long term contract once they start?
Subhash Anand
Okay, just a clarification. When you say 10 upcoming projects you are talking about Arbopalpur project, right? Not the industry?
Niraj Mansingka
No, no no. I’m talking of other like Chambal and. Other government also signed ammonia projects. So how will the demand supply equation. In India change and what is it?
Subhash Anand
Okay and understand. Let me pass on these questions to our President Sina.
Tarun Sinha
Thank you. Subhash, just to check, am I audible?
Subhash Anand
Yeah.
Tarun Sinha
Okay. Thank you. Thanks for your question. This question has been asked in the past also. So we see the situation like this from our point of view. You know the demand growth in India which is driven by mining and infrastructure largely for our products for tan products is likely to be in the range of 6% compared to compounded average growth rate over the course of next five to six years. At least that we can see. That’s the first point. Which means that you know every three years or so, two to three years or so, a fresh demand, additional demand, creation of around two and a half lakh tons of tan will take place.
So that’s the first point. So the demand creation is quite good. On the other hand, you know the country imports at this point in time close to 4 lakh tonnes of ammonium nitrate which will have to slowly reduce with the domestic capacities coming in. So if you add these two, the demand growth rate and the imports which will get substituted we are looking at quite a reasonable market getting created to accommodate these capacities in the coming years. That’s on the tan part. On the. There was also this question on the nitric acid part as well I think.
Subhash Anand
Yeah, let me take that second side. On ammonia side the question basically or you want first nitric acid basically there no new further capacity getting added are the haze tube plant is expected to come in sometime in towards end of quarter one and the way we have planned we have almost 70% of the capacity is already tied up with long term CNA capacities tied up. And seeing the current situation we haven’t seen a demand shortage for our nitric acid business whatever. In fact we always remain shortage of DNA for long long time. So we are confident able to place that additional capacity which will be available in the marketplace.
Coming on ammonia. Ammonia business. Yes we have a new Econor contract is coming in place from next year quarter one that will give us a. I’ll say decent cost saving in terms of gas price prices are concerned and will bring the overall breakeven levels significantly down from where the ammonia currently or PCL is currently operating. Just to give broader sense of number I call it currently with the revised GST reduction which has happened in October out towards the end of. Towards September end our breakeven EBITDA is almost around 430. 440 at this point of time at the current gas prices which will come down substantially in the coming quarter once we have an Econar contract kicking in and recently the ammonia prices has formed up.
So that has supported PCL turnaround in Tansaro or PC ECL was almost at breakeven level in last quarter.
Niraj Mansingka
Just related only the 430 would fall down to how much on a like to like basis.
Subhash Anand
You need to wait for that specific numbers. But it’s a. It’s a significant reduction. Not can you give a range because.
Niraj Mansingka
It’Ll be easy for us to slightly understand the financials in it’s a double.
Subhash Anand
Digit reduction definitely it’s not. It’s more than it’s in double digit. I call it that way.
Niraj Mansingka
In percent terms.
Niraj Mansingka
Could you give something was it bit or 10%?
Subhash Anand
That’s what we’re saying it. I’m saying the percentage reduction is in double digit. Not.
Niraj Mansingka
Okay, I thought I saw double digit in dollars. Okay, sorry. Thank you very much.
Subhash Anand
Percentage reduction is in double digit.
Niraj Mansingka
Okay, thank you.
operator
Thank you. We have the next question from the line of Shubham Tasmana from Asit Kotija family office. Please go ahead.
Unidentified Participant
Hello sir. Am I audible?
Subhash Anand
Yes.
Unidentified Participant
So sir, I wanted to understand the reason behind s tone price volatility and what is your outlook for the IPA business for a whole year?
Subhash Anand
Okay. The IPA business price volatility is I call it severe at this point of time. If we just talk about number the price correction or other the price reduction in this year is almost around 2020, roughly around 22, 23%. That’s the kind of a price correction which IPA business has seen this year and various reason. I call it primarily driven by softer prices of acetone in the market and also a lot of imports which is coming. We haven’t seen a pressure on our demand side. In fact the volume which we were selling we are able to hold on to volume.
In fact we have sold more volume compared to last year. But pricing pressure which is there in IP business expected to continue for some more time although the slower recovery has started I call it. But we don’t see immediate quick turnaround of IV prices happening in a quarter or two. It will take some time to come back to a normal.
Unidentified Participant
Okay. And sir, I want to understand the tan business. So how much revenue comes from around. Top five or top three players in the tan business? How much concentration risk are we having?
Subhash Anand
In fact, sorry, we don’t share customer wise profiling of tan business. So that, that’s very, very clear. But yes, if you talk about our market share is almost around 40% what we hold in this business and any customer you talk about in tan business we are supplying to them. So they know almost every customer is covered by us. I can call it that way. Okay. Depending on explosive business market share they’re buying also broadly will be in a similar line from us also I call it that way.
Unidentified Participant
Okay, thank you. Yeah.
operator
Thank you. Participants who wish to ask a question may press star and one on your touchstone telephone. We have the next question from the line of Pratyush Kamal from Incred Equities. Please go ahead.
Pratyush Kamal
Hello sir, I’m audible.
Subhash Anand
Yes.
Pratyush Kamal
Okay, so thanks for letting me ask the question. So I have concern regarding all the three segments, you know, with deeper fertilizers working into first regarding the tan segment. So there are few things which I’M seeing in the back end when I’m analyzing the data and when I’m looking at the industry. First thing is the China increase in the export of China as far as ammonium nitrate is concerned. So in January the sale of ammonium nitrate exports from China used to be 7%. It has increased about 30% between January and December and it is playing its role perfectly well in terms of decreasing the ammonium united spreads.
Also even after you know, ammonia prices increasing to a level, to a level of you know, 450 to $500 from $350, there’s the ammonium nitrate prices has not increased. So it means that you know there is, there is a bit of supply glut which I’m seeing in ammonium nitrate export market. Also if I talk about the domestic market, sir, domestic market demand definitely is not increasing. In fact it has shrinked by 1% YTD. If you compare in terms of IUI basis in Q3 it has decreased by 5%. So in place of increasing the demand, the coal demand is getting decreased.
And if you talk about the supply of ammoni domestic supply it is getting increased by about 500 KTP in FY27 by Chamber and GNFC. So when you know current demand would be about 1 million ton if 500 and total demand would be 1.5 million ton, total supply domestic would be 1 million ton. And if you know 500 KTP additional supply comes off then definitely there would be no place for anyone to sell the ammonium nitrate in the, you know, India market. So how do you. And definitely they just export capital of ammonium nitrate. And if there would be supply glut in the global market it becomes difficult for us to supply apply to other places also.
So how do you come across that problem and you know what’s the response which you have for about this problem which I am currently seeing in the back end.
Subhash Anand
I’ll. I’ll just start with. And when I pass on to Tarun now Pratish, you need to see industry not with one quarter lens. You need to see slightly longer horizon and see how India energy and consumption or a coal consumption going to go. Yes, you are right. Coal consumption or coal production has come down in the last quarter and the region was as articulated earlier. Also the extended monsoon which normally get over in September got extended for longer time and that has impacted coal production. And so the time demand, if we look from a, I’ll say from a 1/4 perspective, most of your comment may be right.
But are we looking 1/4 business. No, this is a long term business. And when India look at his energy requirement, long term energy requirement, demand projection, there are no reasons to believe the India coal production is going to come down the industry. All the projection, all the long term projection, all the right thesis, if you pick it up it’s showing the demand for coal is going to go up around 4 to 5%. If that is a scenario the tan demand will grow. So that’s definitely one thing. Second thing if I talk about yes, there is a additional capacity getting added.
We are coming up with our plant in Gopalpur so the competitor also is coming in that segment. But adding capacity is one thing. Either production or the license capacity or the capacity which is getting added, will that be available for sale in the very first year? No, it’s not going to happen. There is a ramp up phase for everybody. So if you see that perspective, the demand with 4 to 5% growth and the available capacity, India may still be short supply or may just be balanced. So if in in those scenario we don’t see a challenge where we see will not be able to place this material and then there are inherent advantage.
Tarun, you want to touch upon.
Pratyush Kamal
I think you’ve covered everything. If there’s any question and answered of yours. Yeah sure.
Subhash Anand
I’ll just give one more. The place where or either the location where our plant is coming. We are coming very near or at the heart of mining activity. So we are pretty confident we will be able to place our material much better and with the kind of a reach, market, region, experience in this industry or in this place which we have that gives us a confidence we have a plan in place and we should be able to ramp it up and.
Tarun Sinha
Just on the export quota because that was another one. So. So we have had a very fruitful discussion with the concerned ministries just a couple of weeks back on this topic and I think there is a fair amount of realization that now India is not short of ammonium nitrate because of the additional capacities that are coming in and it has enough product to feed the mining industry and the infrastructure industry. Hence there is a very strong case for reviewing this 50,000 ton per year of export quota and if things goes as per the plan based on the way the discussions have gone by, this quota may also get removed eventually.
Pratyush Kamal
Okay sir, so you know there is a follow up question regarding the same since definitely since sir mentioned that you know definitely there would be no ramp up in the first year itself. But if you look at the total capacity addition it is on a tune of about 900 kilo 500 by Chamberlain BNFC and approximately 386, 350 by you. So even if they, you know, they run by 50% utilization rate it means that about 450 additional KTPA would easily cover up the entire India market. And when you talk about the global exports, definitely there’s an opportunity.
Even if the, you know, the lift is opened up, the ceiling is opened up of 50 kilotals. And if you’re ready to export to the global market it becomes, you know, very challenging and difficult for Indian player to sell the ammonium nitrate exports. Especially in a situation where, you know, since I mentioned the Chinese export is increasing continuously from the last, you know, five, six months at least. From 7% market share in January, it has increased to about 30% in December. In October. December. So it means that definitely there would be a supply glut and you would be competing with all the major players be it China, Chinese, Russian or Bulgarian.
So do you still think that there’s an export opportunity of ammonium nitrate in the global market? After seeing the margin crash in Q3, even if the raw material prices ammonia has increased from 350 to 450. The ammonium united prices have not seen any jump. In fact has become stagnant. So how do you tackle that?
Subhash Anand
Okay, I’ll again come back to same if you, if you look industry with 1/4 phenomena you’ll always have a short term view which may not align with the long term the way industries. Second thing, if I talk about. Your GNSC capacity is coming in FY28, not in FY27. So it’s not everything. 450 what you are counting is there in FY27. It’s not going to be available in FY27. Third thing I call it, industry is growing. Even 4 to 5% growth means adding hundred thousand ton every year in demand. By the time GNSC comes in, industry moves from 1.5 to 1.7 two years from now.
With that three years from now, all the capacity, what we are talking this point of time will not be good enough to even meet India demand. After that export, Yes, I will not say export. One need to take it with the broad brush. No, from India not every market is survival profitably. So one need to know which market, what is the right place, where it’s a profitable market. And that’s what we are focused on. We are not saying we’ll export tan to every place, every country, every market. No, that’s not our goal. We are looking a focused market and that’s where the export development is going on.
Pratyush Kamal
But sir, in your own guidance you said that coal demand would grow at a rate of 5%. And if you say that the tan demand would be increasing from 1500 KTP to 70 under it means that we are estimating a demand increase of about 16.6%. Right? So how like again the math isn’t matching itself that 5% growth of coal would it lead to a 16% growth in the tan demand?
Tarun Sinha
Tarun here let me again try to clarify some of your points. So first is, and I’ll repeat some of the points which I mentioned in the very first question. I’m not sure whether you were there at that time. Hence I’m kind of repeating the first is today there is about 4 lakh tons of import which is substitutable. That’s a ready made demand available in the country for the domestic producers. Second, every two years to three years time period, let’s say three years. Every three years two and a half lakh tonnes of additional demand because of the mining and infrastructure growth is likely to take place.
So in two to three years from now we are looking at four lakh tons of import substituted plus two and a half lakh tonnes of fresh demand created six and a half lakh tonnes two to three years from now. GNFC plant comes after that. By the time GNFC plant comes, as Subhash was saying, the demand will continue to grow. So therefore those capacities will start to get utilized. At the same time the exports of tan which currently we have seen should see a little bit of uplift in volume also because of, you know the reason Subhash was talking and we are very selective in where we export.
We are not like China. So therefore if you combine all of this, this is how the numbers stack up over a three to five year period. And the capacity is.
Pratyush Kamal
And how about the isopropyl alcohol? Because you know the prices have come down from 1 lakh 37 thousand per ton to about 8590 thousand per ton. And in that case you know your correct situation is that you are making it through the propylene road. Acetone would be cheaper which your competitors are doing. So you definitely face that margin pressure also. And you know when the relation is coming down has continuously come down in the last 12 months. How do you see it ramping up and about the again Nitric acid front, nitro aromatics. Something has always been a concern from China.
So how do you tackle the industrial chemical side in that case going forward.
Subhash Anand
Okay, pratish I think. Let me answer it. And then you need to leave a space for others also to speak otherwise one, I’ll have it here. But let me give you ipa. In my opening commentary I was very clear. There’s a correction in prices and we expect softness to continue for some time. We don’t expect overnight things are going to change. No, it’s not. It’s a cyclic business that also a reality. There is a time when prices start going in other direction and when the phenol prices start getting firmed up, acetone availability gets challenged or the prices become firmed up and so the IPA prices goes up.
There is a cycle currently cycle is in a at a bottom I call it at this point of time. We are seeing IPA prices broadly now at a level where it’s there for some time now. It’s not every quarter. We are seeing further reduction it broadly remaining at that level now the cycle need to turn. Will it turn in 1/4, 2/4? We need to wait. We are in the commodity business when it comes to ipa. It has a cyclic process and things will move back in coming time once the demand supply gets corrected. Overall geopolitical issue which has created this tension.
Once it’s open up, the demand supply will get balanced and these prices will come back. But yes, it will take some time. We ourselves are not saying IPA is getting corrected in one quarter. No, it’s not.
Pratyush Kamal
Okay, sir. And about nitric acid,
operator
Sorry to interrupt you Mr. Kamal. Request to kindly come back in the queue for follow up question.
Pratyush Kamal
It’s the same question. It was the same question regarding nitric acid.
Subhash Anand
So nitric acid is 1/4 phenomena. It was an import access. Import happened in last quarter. Normally nitric acid otherwise it is short in demand. We haven’t, we don’t have the issue of demand side of nitric acid. If you see nitric acid remains stable for long, long time even it’s just one quarter. When we have seen softness in nitric acid prices again since tan was soft, lot of nitric acid dose in tan tan softness impacted the nitric acid demand and so the prices once the tan demand is okay, we don’t see a nitric acid business having a challenge.
That’s a short term phenomenon. That’s not going to be long term.
operator
Thank you. We have the next question online of Kushal Shah and regional investor. Please go ahead.
Unidentified Participant
Hello. Am I audible?
operator
Yes.
Unidentified Participant
Okay. My first question is from exclusive manufacturer that we did purchased. I want to know the Strategy behind that acquisition. Is it more of a production ramp up or is it more of a acquisition from point of view of technology gain and any capex that we are looking for any amount of money we are trying to infuse in that exclusive manufacturer. That’s my first question and second is on the line of Deepak Mining Solutions and Deepak Fertilizers Demerger. We have been saying it Since I think 2023 or 2024 and we are in 2026 and we are yet to see any updates on Vaikunt.
Subhash Anand
Okay, let me give second answer first and then I’ll pass on to Tarun. Now the demerger. There are two aspects demur the per se in a separate entity happened last year. We have created a separate entity which is DMSL and the business of Mining Chemical moved out of mal and gone to dmsl. So thus restructuring of entity has happened. If you are looking. Yeah, the listing of subsidiary. Yes, that is I say as a part of our plan. We are in fact when we went with the restructuring the focus was very clear. We need to have a very clean entity structure so each business can draw its own growth charter and see how how do they take business to the next level to achieve that Listing also is one of that.
I’ll say roadmap timing is we haven’t yet say we have taken a decision and we have found up the timing. No, we are still. I say we yet to decide when are we going ahead and with the process of list. So we need to wait for some more time till. Till we form up our plan and then share with the external world. You want to talk about explosives?
Tarun Sinha
Sure. So I think your first question was about something about explosives acquisition. Is that correct?
Unidentified Participant
So it was about. I’ll repeat myself. It was about an exclusive manufacturer that we recently acquired. I want to know the kind of strategy we are playing with that is it more like production ramp up or is it more like a tech acquisition or and are we looking forward for infusing any amount of money in that explosive manufacturer?
Tarun Sinha
Okay, so first is we have not yet acquired the company as you mentioned. You know, I think you said you have acquired. The answer is no, we haven’t. What we have done is we have signed an agreement to acquire. So that’s the first clarification. And the acquisition will be subject to certain due diligence and conditions precedence as we say being fulfilled. After which if everything goes to our satisfaction then the transaction will go through and that would mark the acquisition. So that’s one clarification. Now if that goes through under that assumption, what’s the purpose of that? The purpose is basically for us to for DMSL to produce differentiated value adding kind of product to help enhance our journey in the mining industry as a solutions provider and also help in terms of our export business.
So one example of that could be we could look at bundling those newly produced products along with our technical ammonium nitrate and provide a comprehensive bundled offering to the international markets and to some extent also assist our Australian subsidiary which is known as Platinum Blasting Service. So that’s the kind of overall view we have at this stage.
Unidentified Participant
Thanks for the answer. And whether that manufacturer is placed in India or is it outside the India.
Tarun Sinha
Based in India.
Unidentified Participant
Thanks. And the last question, could you please throw some light on how our steel pickling solution that we recently launched, I think Pig Bright is the name is performing.
Subhash Anand
Sorry, come again?
Unidentified Participant
We had a steel pickling solution. I think the Pig Bright is the brand name. I just wanted to know how that is performing in the market.
Subhash Anand
Okay, that is still in ramp up stage. I call it. It’s an early stage where we are working with couple of manufacturer and then I say take it up from you call it from a ramp up stage to commercialization. So still not reached to a level where it has a meaningful or I’ll say sizable contribution to our overall scenario. But yes, this is one of the product on which which we are working and then once is there it will be a differentiated product in our nitric acid business.
Unidentified Participant
Thanks for all the answers. Thank you.
operator
Thank you. Participants are requested to kindly restrict your questions to two per participant. Participants are requested to kindly restrict your questions to two per participant. We have the next question online of Chirag from Keynote Capitals. Please go ahead.
Chirag Maroo
Yeah, thank you for the opportunity. So my first question is related to the fertilizer segment as I’m able to see that our volume growth was stable for the quarter and the realization has improved. However there has been a significant dip in the margins. So do you want to say that this is purely because of the increase in price of phosphoric acid which you are trying to pass on to the customers. However, the pass on was not that much due to the ability for us to charge higher as there was an extended monsoon. This is the reason behind that.
Subhash Anand
Two region Chirag. Yes, one region. Very clearly this is sizable cost increases which has happened on raw material side and subsidy was not in tune with the the increases the size of increases which happen impacting the overall profitability of that second if you see the growth in overall revenue which has come. It has come in primarily from I say low end of the product. Since the monsoon was delayed and erratic. Actually that give us only just a month to place the product of our value added product which was crop tech and specialty. So the mix has changed in last quarter and that another reason for us with the lower profitability.
What has come in one was raw material cost not compensated by subsidy. Second, erratic rain and delayed rain finally restricted our ability to push the. Or I’ll say place the full value added product which normally which happens in this business. So both region was there in. In the last quarter. Now with this quarter with Ravi back in place, we hope now things will will be back in place.
Chirag Maroo
Fair enough. Fair enough. Second question is related to the IPA. Segment which you have mentioned. I couldn’t understand the reason behind the plan shut down. If you could just repeat that once again.
Subhash Anand
It was a annual planned maintenance which we need to carry it out. So it was. It was nothing to do with anything specific. There was a planned shutdown which happened last maintenance.
Chirag Maroo
Okay. And the third thing I wanted to understand that we have an ammonia plant with ourselves too. So any increase in price of the ammonia is actually beneficial for us as it helps us to make the plant break even to an extent. Right. So even after increase in ammonia prices. I would just wanted to understand why. There was a reason our margin significantly took a hit in our chemical segment.
Subhash Anand
Yeah. Normally if you say mid to long term ammonia prices get passed down in the and in the end product. Whether it’s a tan or whether it’s a other nitric acid product. But it’s always. There is always a time lag. It doesn’t happen immediately with ammonia price movement. So what price increases? What we have seen in ammonia in last quarter. If it remain at this level for some time, then we will see the collection happen in product and that’s the time when the real benefit come out. Otherwise it’s a shift from one basket to another basket or one segment to another segment till the end product prices gets corrected in line with ammonia.
Chirag Maroo
Okay, so will it be fair for me to assume that in Tang specifically there was no margin corrections. There were no margin impact. However, the impact was majorly into industrial.
Subhash Anand
I will. Okay. Yeah. If you’re looking combine ammonia and tan together then yes, tan price increase or ammonia price increases impacted tan standalone margin. But both put together margin was same. And nitric acid. Yes. Has seen a price in a cost increases because of ammonia coming to them.
Chirag Maroo
That’s it. From my side. Thank you. Sir.
operator
We have the next question from the line of Mukhta Chandani from Aryan Capital. Please go ahead.
Mukta Chandani
Hello. Hello.
operator
Kindly come closer to the microphone. Your voice is not very much audible.
Mukta Chandani
Okay, am I audible now?
operator
This is much better, yes.
Mukta Chandani
First of all, thanks for taking my question. I wanted to know regarding mining chemical business. I can see B2C revenue share to stood at 15% this time. So if you could just throw some light on long term target it would be great.
Subhash Anand
B2C mining.
Tarun Sinha
Okay, so Tarun here. Thank you for your question. So one thing which you know the way we are looking at B2C is in the. We now start to call it as a downstream business of dmsl because I think earlier in the call there was some, there was one question on DMSL as an entity and things like that. So as an entity DMSL has got its own upstream and downstream businesses. Upstream business is largely tan and supported by its own ammonia as was answered in the previous question from now. And the downstream is the B2C part which you are talking.
So first I wanted to clarify not just for you but for all the callers. And the way we measure downstream is, you know, through that model, through that B2C model we connect with directly with the mining companies, the end consumers. So there are various ways we do that and you know there are different go to market models that we adopt for that. But that’s where I would like to leave it at. It’s growing, it’s growing in its own way driven by the mining, you know, the growth in mining and infrastructure and our share is slowly, slowly improving there.
Having said that, as we will have the new tan facility in Gopalpur in a few months from now. Again, you know, the mix will look a little bit different because we’ve got a range of products coming in Gopalpur also to market. So what we will have to see is not downstream as the overall mix in the revenue but in terms of absolute numbers, whether it’s growing or not. And the answer is yes, in absolute number it will be growing in line with the market growth.
Subhash Anand
And just to add to Tarun our strategy or just now just couple of questions back. We talk about acquisition in explosive. So that’s also part of our downstream journey. How do we take that downstream journey and, and speed up that journey in that. So all actions all in place, we want to make that business grow and then meaningful for us. So we are working in that direction.
Mukta Chandani
Okay, thank you. Thank. This is, this was.
Subhash Anand
Thank you
operator
thank you. We have the next question from the line of SHIELD Kumar Shah from Samiksha Capital. Please go ahead. Okay.
Sheel Kumar Shah
Yeah. Hello. Am I audible?
operator
Yes, SHIELD Kumar, we can hear you.
Sheel Kumar Shah
Yeah, hi. Thanks for the opportunity. My question is on a fertilizer side. So I could see that our trading business revenue has significantly increased probably for the 4.2Q and this quarter as well. So what is driving that? I mean is it going to continue for 4Q and probably next year as well? And what type of margins. Margins do we make on this trading side? Yeah.
Subhash Anand
Okay. The strategy in our fertilizer business is simple. Our focus is to grow specialty and crop focused business and that’s, that’s how we are looking crop tech and specialty growth happening in overall side. We have a limited manufacturing facility but it’s fungible. So our priority will always be dedicating our manufacturing facility more and more towards crop tech. At the same time we have a brand, we have a market presence. So if we see a demand, we will look at trading route to fulfill that demand of smart tech and other product. So that’s the strategy which we’ll continue to take.
Yes, specialty products do have a margin profile which is I’ll say elevated compared to rest of the product profile. But at the same time when we are looking at traded versus manufacturing, even if we go with trading, we see we maintain right margin profile even with that journey and that’s what the focus will continue to have. Our strategy is to focus on crop tech and specialty and grow that in a big way. For us, trading is an opportunity will keep looking that way.
Sheel Kumar Shah
So I mean, do you mean that when you say trading it’s like a B2B of whatever manufacturing we have done of smart tech or croptech products or it’s like getting products from somewhere and probably importing and then selling to the market.
Subhash Anand
No, we, it’s not a plain vanilla product. What we import and sell. Even if we import, we have our own process which we need to apply to make a customer product which is differentiated and which match to our product differentiation and quality. So we follow that route. But yes we do. If we see an opportunity and if manufacturing capability is not good enough, we are open to looking that opportunity through trade route and then doing a few processes in house to make it the right product for our quality level and for our customer level.
Sheel Kumar Shah
Okay, so do you think this to continue in 4Q and probably 1Q as well?
Subhash Anand
We are, that’s what I’m saying. Our focus is more on crop tech and specialty. That’s our priority. But this is an opportunity business. We are in market. If we see a demand, we’ll continue with this journey.
Sheel Kumar Shah
Okay, understood. Yeah. Thank you.
operator
Thank you. We have the next question from the line of Dave Mehta, an individual investor. Please go ahead.
Unidentified Participant
So yes, I have one question with respect to our forward integration in the tan business into explosives. So are we directly competing one of the largest mining explosive manufacturer in India.
Tarun Sinha
Thanks for your. Yeah. So our business model is likely to be quite different from the existing players in the explosives industry in India. And the main difference will be the offering that we will make to the mining companies, mining contractors, infrastructure projects and that will be that our proposal and our offering will be more on the outcome based, more on the solution based rather than on the product sale based. Which means, you know, eventually we will be you know, guaranteeing, you know, some KPIs, some deliverables to the mine owners, mine operators, mine contractors, which others are not doing.
And that’s the very big difference in in our business model compared to what currently prevails in the country.
Unidentified Participant
Okay, answer the second question is the 430, $450 savings which was mentioned was at EBITDA level. 430, 450 break even, break even. I mean the 430 $450 that’s EBITDA level. So in our previous con call sir it was mentioned as $350. So why is there so much difference?
Subhash Anand
There always a. I call it two things which one need to see. One is a gas prices where it is. Second is with GST reduction or lower GST rate the incentive has come down. So that impact also now got factoring.
Unidentified Participant
Okay so sir this much difference it will have approx. Almost $80 if we. Because for calculation purposes what should we take as a sustainable basis for savings amount? Because when we take $350 then we are breaking even at a very low level considering the ammonia prices have reached $500. So there is a $150 of savings we can see here. So if you can just guide me through that.
Subhash Anand
In fact if you see the incentive benefit itself which 9% local steel tax coming down to 2.5% itself is sizable on the overall volume and that that’s what the impact is. Now what what we are seeing basically currently current last quarter Middle East FOB was around 400, around 420, 430 at that. We were almost at breakeven last quarter but that was at a gas price which is prevailing today. Now with a new contract coming in we do see a substantial gas prices reduction and that will bring our breakeven down in double digit percentage term I will say at this point of time.
So that will bring the overall break even much lower and will make the PCL profitable.
Unidentified Participant
Okay, and the last question with respect to our tan business, only if we are looking for forward integration, so are we looking at any potential acquisition in the smaller explosive companies to get all the licenses in place. So maybe if we can intend to sell products in future, we can do the same.
Subhash Anand
We are. We are not. I said we have all options open. We’ll see what is fit for our strategy and we’ll. We’ll keep doing those steps. As Tarun spoke just a few times, we had one acquisition in pipeline for which we have done a communication not yet concluded. But the opportunity, if it comes and if it makes a business case, we are open for that.
Unidentified Participant
Okay sir. Yeah. Thank you so much.
operator
Thank you ladies and gentlemen. That was the last question. I now hand the conference over to Mr. Subash Anand, President and Chief Financial Officer for closing comments.
Subhash Anand
Thanks and thanks everyone for taking out time and having a conversation. Look forward connecting with all of you. I understand we are not able to take all the questions because of time constraint. So in case you feel please do reach out. We’ll able to answer those questions on one, on one basis or any further clarity question. But thanks everyone. Look forward connecting again next quarter. Thank you.
operator
Thank you on behalf of Deepak Fertilizer. That concludes this conference. Thank you for joining us. And you may now disconnect your line.