Gujarat State Fertilizers & Chemicals Limited (NSE: GSFC) Q1 2026 Earnings Call dated Aug. 08, 2025
Corporate Participants:
Unidentified Speaker
S K Bajpai — Senior Vice President and Chief Financial Officer
Analysts:
Unidentified Participant
Nirav Jimudia — Analyst
Yash Master — Analyst
Saket Kapoor — Analyst
Saania Jain — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Gujarat State Fertilizers and Chemicals Ltd. Quarter 1 FY 2020 05:26 Earnings conference call. This call is hosted by Anurag Services LLP on behalf of GSFC. From the management we have Mr. S.K. bajpai, Senior Vice President, Finance and Legal and CFO Mr. S.V. verma, Executive Director, Agribusiness, HRS and IR and other senior members from the management. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchstone phone.
I now hand the conference over to Mr. S.K. bajpi. Thank you. And over to you sir.
S K Bajpai — Senior Vice President and Chief Financial Officer
Okay. Good afternoon everyone and thank you for joining us for quarter one 202526 earning call of Gujarat Estate Fertilizers and Chemicals Limited. It’s always great pleasure to connect with all of you and share the key updates that we experienced during the quarter. I hope that you had a chance to review the financial results, media release and investor presentation available on the stock exchanges and also uploaded on our company’s website. As we see the consolidated financial performance for bio batches, revenue from operation grew marginally by 1% bio by from 2163 crores to 2184 crores. Pvt. Rose by 63%, Vyu by 184 crores from 113 crores and Pat by 59% bio by 139 crores versus 87 crores.
If we see quarter over quarter then revenue from operation grew by 14%. 2,184 crores from 1922 crores. Pvt. Jumped by 108% quarter over quarter 184 crores from 89 crores and PAT by 93%. 139 crores from 72 crores. Quarter one marked as a resilient start to financial year 2526 with stable revenues and improved profitability in volume tons. Fertilizer Production reduced by 40,787 metric tonnes. That is approximately 10% in quarter one by Oy. However, this includes a 1.1 time transfer of 40,435 metric ton of urea towards the revamping project. Taking this into consideration, the production reduction is limited to 3352 that is only 1% bio y due to lesser urea and DFP production.
IP production remains stable year on year basis. Reported fertilizer sales grew marginally in volume 2% and estimated stable in volume terms around 4.51 lakh VT in Q1 biobases. However, this includes a one time transfer of Rs 149 crores of urea towards the revamping project. Taking this into consideration, fertilizer system would have grown by 11% in value terms and 10% in volume terms in quarter one. On the cost side, raw material trends were mixed. Prices of natural gas and ammonia subtended offering some relief while cost of phosphoric acid and sulfuric acid saw a sharp increase impacting PLK cost economics.
Our fertilizer segment delivered a strong EV EBIT of 137 crore up from 86 crore in the corresponding quarter last year reflecting stronger operating leverage, favorable product mix and better cost absorption. This was supported by robust trading volumes especially in npk, higher manufactured APS and AS sales and improved realization in PNK fertilizers. Urea volumes however declined due to stabilization challenges and exclusion of project related trial sales bucked rupees 149 crores in quarter one. The industrial product segment turned profitable with rupees 25 crore EBIT added by improved utilization in ammonia and ADSEX crystal. Even as spreads and core volume remain subdued, we continue to maintain a strong balance sheet with no long term debt, healthy net worth and adequate liquidity.
Our liquidity position has also been supported by the timely disbursement of government subsidies reflecting a proactive fiscal approach by the government. As of date the company has received subsidy dues for PNK fertilizers and urea acnens raised up to the first and second week of July respectively. This provides the foundation for advancing our CAPEX roadmap. I am happy to report that three major projects were commissioned during the quarter. First one is 15 megawatt solar power project at Charakna Urea two energy revamp facilities and our participation in GIPCL 75 megawatt solar project with our share of 50% that is 37.5 megawatt.
These will enhance cost efficiency and sustainability over the long term. Looking ahead, the progress of the southwest monsoon has been healthy so far supporting Kharib sowing and agri input demand. However, rising input cost especially for phosphoric acid and DAP pose challenges for the fertilizer sector. We may see some upward pressure on MRP in the coming months. Policy actions from the Department of Fertilizer will be critical in this context. We intend to pursue A balanced production import strategy, particularly in DAP and non DAP grids to protect margins and optimize sterilization. In the industrial segment, caprolactam manufacturers are likely to remain under pressure due to oversupply and continued Chinese dumping.
That said, demand for melamine and other key products is expected to remain stable and we anticipate much better performance in segment for quarter two. With that I now hand over the call for question and answer. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR 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 handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of NIRAV with Anvil Wealth Management. Please go ahead.
Nirav Jimudia
Thanks for the opportunity and good afternoon team. Sir, I have a few questions. So sir, just to understand like when we produce ASN ANP fertilizers, how are the profitability is fixed? So just like as a percentage of realization which is a mix of MRP and subsidy, we get a certain percentage of this as an operating profit or at the PBT level. So how this mechanism works? Let’s say if we take for AS grade which is like MRP plus subsidies close to around 29 30,000 3030000 rupees a ton. So how the profitability is ensured by the government something as a percentage of these or is there any other mechanism which is fixed?
S K Bajpai
So actually the profitability in case of ammonium sulfate and ammonium phosphate sulfate is dependent on the cost of the nutrient. What we are using the production of AS and APS actually as well as this P205 rates are very high and it is presently around $1258 per metric ton. So there is no fixed norm that what is the percentage of profit we are earning. It all depends upon what at what cost. We get this raw material from the international market and as far as ammonium sulfate is concerned, we produce here in Balodra. So sulfuric acid. As you see sulfur and sulfuric acid prices are very high.
Approximately 150% has been resumed if you compare with the last quarter or last on bio biobases. So really the margins in the case of ammolia sulfate has squeezed a lot and in APS due to the phosphoric acid prices going high there also we are getting hit in the margin Terms.
Nirav Jimudia
Got it. So sir, last year you mentioned that on an average we make close to around 3,000 3,500 rupees a metric ton for both these fertilizers put together. How was the scenario in Q1 and how do you see panning out for FY26?
S K Bajpai
As I told you, because of the cost inflation it is around 2000-2500 in case of ammonium sulfate we are getting for methane.
Nirav Jimudia
Okay, and how do we see for the rest of the year?
S K Bajpai
As I told you in the opening remarks, the subsidy is due to be fixed based on the input cost by the government of India with effect from 1st of October. So we are quite hopeful that there must be some division because sulfuric acid price and phosphoric acid price both have been risen a lot. And that is the reason the DAP is not economically viable for us to produce. And there is a lot of shortage of DAP in the market also. So that we hope that government will do certain things with certain criteria for fixing the subsidy with effect from 1st of October.
Nirav Jimudia
So two clarifications here. So one, let’s say for both these fertilizer grades we produce close to around 3 lakh 17 thousand tons of volumes. And based on the convergence I think ammonia requirement is close to around 85,000 tonnes and sulfuric acid is close to around 1 90,000 tons for this quarter. So are both these inputs produced captively or do we need to source something from the outside market?
S K Bajpai
Also as far as sulfuric acid is concerned, we have the four sulfuric acid plants. But still the demand is demand of the sulphuric acid in our complex due to the ammonia in sulfate 4 new plant capitalized years ago is high. So that the company has already in the process of establishing sulfuric acid 5 plant which is due to be commissioned in two months from now. So till now we are getting the long term arrangement with the companies who are supplying the sulfuric acid at the Bonoza complex and as well as Sika complex for ammonium sulfate phosphate.
But after commissioning of the sulfuric acid fifth plant we will be having the sufficient the required quantity of sulfuric acid for production of ammonium sulfate.
Nirav Jimudia
Plus we would have something surplus also.
S K Bajpai
To be sold in surplus also this will it will be transferred to the Sikka unit for APS production.
Nirav Jimudia
What could be the surplus which we could sell in the market? Sir, out of this one like 98000 tons after.
operator
Sorry to interrupt there sir, we are not able to hear you. Can you speak a bit louder?
Nirav Jimudia
Yeah. So just wanted to understand from you sir, out of this 1 lakh 98,000 tons how much would be available for sale in the market after using for captive?
S K Bajpai
I don’t think so. If the APS requirement in the SIKA so around 200 or 250 metric tons. Additional quantity we will be having in the air here at Banota complex. So really tapping the sulfuric acid to Sika unit. But looking at the price, if the sulfuric acid price comes down and there is any opportunity that we are getting sulfuric acid at the lower price then we can think of going into the market for sale.
Nirav Jimudia
Is there any volume guidance you can tell for both these fertilizer grades put together and for a company as a whole for FY26.
S K Bajpai
FY26. The whole year we are expecting fertilizer in the range of 23 to 24 lakhs and APS and this both combined around 10 lakhs.
Nirav Jimudia
Correct. And this also includes this. 23 lakhs also includes the trading volumes or they are separate out of this.
S K Bajpai
Estimated on conservative basis. Because DAP prices are volatile and we are handling urea for government of India at Rosie port. But we could not get much allocation last year. So we have taken a conservative. This is a minimum which we think if the trading improves it will be further increased.
Nirav Jimudia
Got it. So second question is on the urea part. So we had a revamp undertaken in first quarter. So what was the impact on the sales and profitability in first quarter of.
S K Bajpai
FY26 because of the launch during the quarter? No, we have commissioned this project on the 2nd of June. So commercial production started only after that. So only 28 days we could get the commercial production. Otherwise whatever the production was there during the trial run. So we have transformed to the capital side of the balance sheet. So during the trial there is a lot of bastards of the import and all this. So we are not in a position to say what is the profitability. And as such in the area there is no bigger big margins available.
So it is only I think if I remember 3 crores rupees only we shifted to the and adjusted the capital cost.
Nirav Jimudia
And sir, like currently we have a G helper metric ton consumption or the group norm of 6.5. I think after this revamp. You were saying earlier that our consumption could go down to 5.75g per metric ton with this revamp. So let’s say given the current gas prices what could be the savings which could accrue to us on a pertinent basis a Or if you can say that what sort of incremental EBITDA could come to us with this urea revamp?
S K Bajpai
Actually after this revamp we could get less than 6 the GKL consumption energy consumption per metric ton of urea. So whatever the targeted energy norm by the government of India it has been achieved. And the less conserving of this energy. No, that will provide temporary relief. But I don’t know what is the government of India they will fix the energy norms and the subsidy for the gsfc. It is under the proposal of Doc ministry. So until unless they notify the energy consumption by for GSFC and fix the subsidy accordingly then after we will be only having some margin.
Nirav Jimudia
So sir, two things here. One, are we allowed to recover the revamp cost which like we have spent close to around 500 crores for this revamp. So are we allowed to recover through a higher energy consumption norms A and B Also there is a proposal to have an increase in the fixed cost compensation by the government. So your thoughts here?
S K Bajpai
Yeah. Actually as you rightly said, this energy consumption norm has been achieved. Now we have requested government of India that they have not reimbursed any capital cost for the vamp. And actually it is not 500 crore, it is below 400 crores. So we have completed about revamping below 400 crores. So if they fix the subsidy based on the old energy norms then we will generate some something like 50, 60 crores per annum. So that will payback period will be six to seven years.
Nirav Jimudia
Correct?
S K Bajpai
Correct. Correct.
Nirav Jimudia
So next question is on the chemicals. So like we have one close to around 25 crores this quarter despite of challenging caprobenzene spreads. So last quarter I think we were at 94 crores. And you mentioned that we had done some ammonia trading last quarter because of which the numbers were higher. So what was the situation for this quarter like is this 25 crores entirely from chemicals? And this could be a steady run rate which is we should assume or work with given the current spreads of melamine and Capro. Or does it also include some proportion of trading from ammonia?
S K Bajpai
No, actually as you rightly said this Capro benzene spread has been reduced to $540 ABC the same quarter last year it was $582 but it has improved from $521 in the last quarter. So if you see the quarter over quarter basis it has improved from $521 to $540. So that is a good sign of improvement. And we have also Taken up with the government of India for anti dumping duty Because a lot of caprolactam and melamine is dumped from the Chinese material in India. So what protection of our industry, local industry. We expect that government of India will do something very soon as the tariff bar is already going on geopolitical.
So for saving the industry we are only the producer of melamine in the country. And as far as Caprolactam we are only an fsect produces the caprolactam but FSET plant I don’t know whether it is continued. Most of the time they are because of the this price war they are closed. So we are only the producer of Caprolactam melamine and we patiently waiting for the any positive outcome from the government of India. And as for information we are having, they are certainly doing something for the anti dumping duty, Correct?
Nirav Jimudia
So sir, just my question is whether this 25 crores is the steady state run rate which one should work with going forward given the current spread.
S K Bajpai
That is not only the ammonia trading. Ammonia trading is the basic factor and we continue the ammonia trading if we get the ammonia at a good price. So we import ammonia in trade and there is a good demand of ammonia. So we have the contact in our hand and we will continue to do so in the next quarter or coming quarters also. But also in the Caprolactam side now we have developed a new product HX crystal. So while the Caprolactam are not giving any positive contribution so we have shifted some of the intermediate product like HA’s for manufacturing of assets crystal.
So during the last quarter it has also given a very good margin. So the IP sector has coming to positive side and it will continue to do so because these are the permanent plants, you know, HX crystal and other things like ammonia. So I think it now the we will have some more improvement in the coming quarters.
Nirav Jimudia
The last question if you allow so on the power side I think we have been investing a lot on renewables which is also visible in the presentation what we have shared. So if you can share like for both the complex put together what is our current requirement of power at both the locations and currently how much it is coming from renewables.
S K Bajpai
So whatever the requirement of the power is there more than more than 50% is coming from the as a green power put together this wind means what we are having and solar projects we are having at Charakna and the one from the GIPCL. So that power 37.5 megawatt we are getting from GIPCL our sister Concern. So it is very good and cheap source of power. And because of that we have stopped our any power requirement or steam requirement from the gases by generating the power from the gas turbine or steam turbines. And we have also reduced our power requirement from the electricity board.
So this all combined together has given a lot of cost efficiency as far as power is concerned.
Nirav Jimudia
It is visible in our numbers. Also because our power cost has not gone up despite of the increase increase in the production numbers. So correct, sir. Thank you so much sir and wish you all the best.
S K Bajpai
Thank you. Thank you.
operator
Thank you. The next question comes from the line of Yash with Unifi Capital Private Limited. Please go ahead.
Yash Master
Hi sir. Am I audible? Yes, yes, yes, yes, yes. So in the presentation you have put that there was an increase in PNK fertilizer trading and I saw the volume also has increased by around 4x. So can you just give us the breakup of cleaning and manufacturing revenue wise? What’s the breakup? It will be helpful.
S K Bajpai
So actually, whatever trading we had, we have done in the last quarter for the NPK10 and NPK12 rate of fertilizers. So that is the trading portion and the manufacturing side, we have not produced much dap. Only a small quantity of DAP we produce in the sector. But all our plants at the Baroda fertilizer complex, it is running more than 100% capacity as usual, other than the urea. Because the revamping project was just commissioned percentage wise. If you see that trading 10, 10% of the total fertilizers, it’s in revenue, Right?
Yash Master
Right. Right, sir.
S K Bajpai
Yes. Yes.
Yash Master
Yeah. Okay. And last year it was comparatively lower, right?
S K Bajpai
Yeah, yeah. Because there was no NPK trade. So now DAP is not available. So we are exploring the APS and other NPK rate of fertilizers and it is required for the balanced nutrition to our crops now. So government is also pushing us to provide the balanced fertilizer or complex fertilizer to the required as per the requirement of the crops.
Yash Master
Another question regarding the past participant just asked. So can you just quantify what will in the power reduction savings by the two new plants which we have just commissioned? Annual run rate, what will be the cost savings? So the solar power plant two plants we have commissioned this quarter, right? So what will be the annual power cost savings?
S K Bajpai
Actually, Yuriya, it is this solar plant has been commissioned just now in the last quarter only. So full impact will be coming the next quarter. But roughly we can say that 20, 20 crores or odd figures we will be receiving by way of reduction in the power cost. Okay.
Yash Master
And just last one, I think this. Quarter we also had a reduction in.
Yash Master
Your employee benefit expense. So you can just like quantify what was the specific one of either it one of the reason or anything specifically related to that.
S K Bajpai
Actually last year in the same quarter due to the revision of your four years revision. No. We have paid all the some money to the LIC and for this graduity and pension funds. So that was the major factor. Now it is not coming. This will come only after four months. A four years. So at the time of revision certainly the liability accused. No. So we had to pay the deficit in the fund set up with the LICS for the pension as and as well as.
Yash Master
Just one last thing. Do we intend to increase the production of DAP? Like 34 years back we used to produce basically a DAP move. So considering the import restriction from China basically has put export restriction and there’s a shortage of dap. So we do we intend to increase the production in coming quarters.
S K Bajpai
No, actually the DAP production is not cost economical. So we have tied up four segment of DAP from the international suppliers and actually one has already arrived and three are in the line queue. So enough DAP will be available to the farmers during the season. And in place of DAP we are manufacturing this APS and one idle strain of this DAP production at Sikta unit. Now we are proposing to convert into for the fungible production. Whether we require to produce DAP or APS or other NPK grade of fertilizer. So we are carrying out the modification very soon.
We are approaching the board for the approval. And as soon as we get this approval we will start the work. And within salt period we will be converting this facility also for production of APS or DAP. So in that case AP6 APS production will be doubled. Whatever we are achieving presently at the current.
Yash Master
Okay, thank you.
S K Bajpai
Okay.
operator
Thank you. A reminder to all participants to ask a question. You may press star and 1. The next question is from the line of Sakit Kapoor with Kapoor and company. Please go ahead.
Saket Kapoor
Yeah, and thank you for the opportunity. Keeping in mind the our quarter one performance especially in the fertilizer segment and then with the higher raw material prices especially phosphoric acid and sulfuric acids, phosphorus and sulfuric acid. What should be patterning in in terms of margin pattern going ahead? I think. So you gave the volume number of production number and sales for 2.3 million for fertilizer.
S K Bajpai
Yeah. This is the yearly what Bharmaji is saying that 2.3 million metric ton of fertilizers we will be producing and selling at the for the full year. But what I am saying that during the quarter, as you rightly said, the phosphoric acid and sulfuric acid price were very high. So it creates some problem in production of dap. And we are also facing the reduction in the margins in case of ammonium sulfate and ammonium phosphate sulphate because the sulfuric acid prices are also very high, as you rightly said. But slowly I will say that these are in the peak levels now.
So if there is any reduction, it will additionally benefit in our production margins of the phosphatic and sulphuric acid fertilizers. As far as this subsidy is concerned, because of the prevailing prices of the phosphoric acid and sulphuric acid, they fix the subsidy so which is due with the effort from 1st of October. So I presume that government of India will take a note of these high prices of the phosphoric and sulfuric acid and they will take some higher subsidy for the phosphatic and sulfur based fertilizers.
Saket Kapoor
Right. So quarter two generally, sir, how. What is the kind of volume uptake we experienced for industry and what. What are we anticipating for this this quarter in terms of volume for the fertilizer segment?
S K Bajpai
Around 5.8 to 6 lakhs.
Saket Kapoor
Okay.
S K Bajpai
5.8 to 6 lakhs.
Saket Kapoor
Okay. This is for the entire entirety for the company.
S K Bajpai
Yeah. As a company. YouTube.
Saket Kapoor
Okay. When we look at these RM prices which are I think so all are as per the import parity prices and that are very dynamically changing. Why are companies like us, which are. Which are government entities not referring or suggesting a model by which with the variations in the prices, the subsidy mechanism could be created in a formula base so that these ad hoc pin that that goes through the companies like us can be reverted into that to that sense in prices, everything is available in public domain 1. Only an automated formula principle can be created.
A platform can be created or suggested by which these wages can be can be removed when prices or subsidies are reset by themselves and not waiting for the government authorities to take note of the thing.
S K Bajpai
You are right. But if we see the side of the government, they cannot give the subsidy whatever the price is internationally coming and they are raising the price as per their mercy because the subsidy is given by the Indian government. So there will not be any end to it. Because if they give the subsidy whatever the price of phosphoricated phosphoric acid prevails in the international market. Or there are few countries which are having this phosphate deposits and they are producing the phosphoric acid in big quantity. So then there will not be any end. So that is the limitation with the government also because the subsidy budget is limited and they cannot fix like the unlimited dispersal of the subsidy.
So for just checking the things. No, they are keeping this twice in a year. They see what is the price and then they provide the subsidy. I think it is a fair working.
Saket Kapoor
For Q1, our total sales for manufacturing was 3.64 lakhs. And on this we are expecting a tonnage of 5.82. That is what we have. You have just answered in the previous question.
S K Bajpai
Yes, yes. But total our credit if you see the including trading it is 4.51 million tons.
Saket Kapoor
Yes, yes.
S K Bajpai
4.51 lakhs. So what is saying it is it including trading that he is seeing that 6 lakh mitigation we will be selling in the market. But that is including the trading. Yeah, total.
Saket Kapoor
Okay, okay. And. And what should be the likely then the breakup? I just were trying to understand the type of profitability which we have done for this quarter in the fertilizer segment. And with the increase in raw material prices, is there any threat to the profit margin in the ensuing quarter? Or we can maintain these numbers.
S K Bajpai
No, no, we will maintain irrespective of the whatever the. Because we have a lot of got the material in hand at least for the quarter. There is no problem. We have got this pharmac as a P205 in our stock. So whatever the price increase, it will reflect it only in the third quarter of the company. So we are quite sure that there will not be any hit in the margin. And after this September though, as I said that I am pretty sure that government of India will certainly revise the subsidy rates.
Saket Kapoor
Can you mention for the industrial product that includes some ammonia trading. So can you quantify for us what would what was the contribution from ammonia trading in terms of revenue and profitability?
S K Bajpai
So this is around 20 crores across margin we have got from this ammonia training. So we are also trading from the Sika and when the UEA plant was in the revamp. Now we also have the excess ammonia production. So that we also marketed a little bit here in fertilizer complex.
Saket Kapoor
That is 20 crore is the revenue contribution.
S K Bajpai
Yes, yes. No, not margin. Margin profitability. Yes, yes.
Saket Kapoor
Okay. So out of our segmented profit we see 25 crore. 20 crore is attitudable to only the ammonia Trading.
S K Bajpai
Yeah, that is right.
Saket Kapoor
Okay. And this is only a one time phenomenon. Since our unit was not commissioned and we have surplus of the same board. These factors are not going to continue going, going ahead.
S K Bajpai
No, no, we will continue as far as this import of ammonia at Sika plant. So we will continue. We have the long term contact with the suppliers now. So we have the separate quantity for the trading. And as for the requirement of Indian market, we trade and provide this imported ammonia. So it was a one off that during this quarter sometimes the ammonia stock was full. So either we had to reduce the load of the plant or where we stock. So just a little we have. But they did the ammonia from the fertilizer complex.
Saket Kapoor
When we look at your price graph on slide number six, we find ammonia prices trending lower or settling lower from. Yes, 38,000 metric rupees metric 10 to 31. So. And so we are carrying straw. What should one read into this decline from 38 to 31 that we should factor in for the current issuing quarter?
S K Bajpai
No, actually ammonia import is based on the international preventing prices. It may come down, it may go up little bit here and there. But whatever the supply contact we are having to supply the ammonia to Indian market. No, that is based on the delta on the imported price. So that will never be a loss to GSFC even if we are carrying the ammonia stock or fresh ammonia we are receiving at a higher price or lower price. So we have fixed the formula like delta over the imported price so that we are getting the margins.
Saket Kapoor
Okay. Sir, can you give only one more color what would be the revenue that in the. In that sense because industrial product segment posted revenue quarter on quarter is higher, even year on year is higher. So. And you have mentioned that the capital vector prices were lower, the spread was lower. So ammonia trading, how much has it constituted to the top line for the quarter?
S K Bajpai
It is around 60 crores.
Saket Kapoor
Only 51. That is 11% or 10, 10, 11% of the total revenue in the industrial product.
S K Bajpai
Yes, yes.
Saket Kapoor
Okay. Anchor going ahead. Also in the industrial product segment, I think so March quarter we did saw a higher contribution to the profit. So what were the factors that were reversed per Q1Q that led into these profitability going taking a hit? Or if you could just give the number of ammonia trading for the March quarter also how much did we margins we create we earned for the March quarter?
S K Bajpai
Actually one more factor which I I tell to you that during this physical inspection as on 31st March of the fiscal stock of the ammonia and the book stock, there was some Mismatch So we have inflated the stock in the system because fiscal stock was there. So that was also one factor which provided a little more margin because it was the zero stock material uploaded in the system. And that is the reason that you are seeing the higher margins available by way of sale. Trading of ammonia.
Saket Kapoor
Didn’t get the last point. Can you please repeat once more about the closing stock part? Is it the revaluation aspect which we are mentioning?
S K Bajpai
Not revaluation Actually at the financial year end we stop, we check the stock, our statutory auditors, the physical stock versus the book stock. If there is any discrepancy then we have to replace. We have to make the connect the other book stock as per the fiscal stock available. So certain times some there are so many segments coming of the ammonia so there may be some somewhere the some more material comes somewhere there is a gap. So at the year end we match the book stock with the fiscal stock and in that process we have got this stock hiked.
Saket Kapoor
Okay. So that has gone to the profitability.
S K Bajpai
Yeah. Because if we sell that stock then it will be a total profit because it’s zero cost. Because cost is already.
Saket Kapoor
Right sir. And lastly sir, on the other expenses line item also I think so. Q1Q there is a significant diploma from 285 crore to 201 crore. What explains this lowering of other expenses? Q1Q basis.
S K Bajpai
Other expenses?
Saket Kapoor
Yes sir. Other expensive line items.
S K Bajpai
One of the reason I told that this urea plant was under the trial and production. So as we have shifted this sales value of the 40,000 vtikta of urea amounting to 150 crores the same manner we have also credited the expenses in the revenue side and transferred it to the capital so that balance can be met and there is no difference as per the accounting standard. So we have transferred the expenditure incurred during the quarter for the trial and period that is around two months so that battalion for there. So that may be the reason that other expenses might be lower in comparison to other.
Saket Kapoor
Right. And on the bid on the larger projection of setting up of this phosphoric acid and sulfuric acid project at Tika sir, where are we in terms of. Where are exactly? At what stage are we set? Since it is an if it will be commissioned by as per the your slide number eight it will be commissioned in sometimes in FY 2728. So if you could just give whether DPR is done. What is the update on the same Current update on the same.
S K Bajpai
Yeah. PSA plan we have got the Basic engineering and we have issued the tenders for detail engineering and that are under the investigation and negotiation label. As soon as you fix the detail engineers we will start the activities at the Sikha for this PHA project and.
Saket Kapoor
What is the total cost of the project for both phosphoric and separate Audi if you could give the breakup.
S K Bajpai
Still we are in the negotiation stage so it is not formed up earlier. We have estimated around 1500-1600 crores for this PSA prone but after receiving the actual code and commercial negotiation we will be able to finalize and tell to you what is the real cost of.
Saket Kapoor
This project and for this sir, how what are we doing for the raw material sourcing for both phosphorus and and sulfur to get this project viable and also to ensure raw material security what steps are there being taken or are in the annual?
S K Bajpai
As I told you that sulfuric acid 5 plant we are already commissioning in Fertilizer Nagar so whatever the additional we will be having we will be transferring it to Sikka for this production. Additionally we have the long term arrangement of sulfuric acid supply from the Hindustan Zinc and other suppliers like Adani who are presently coming in the market Whether with bid volume of sulfuric acid as far as sulphuric acid is concerned we are getting it from the foreign suppliers and for PA plant we require a rock phosphate so we have dialogue with the certain parties for securing the rock process supply and it is not a very challenging job.
I think we will be at the time of requirement of rock perfect we will be having fun Time of the rock supplies.
Saket Kapoor
Point sir, we have some investment in Tunisia I think so earlier some JV what is the latest update on the same? Correct me there.
S K Bajpai
Is a fire in the February so it is still closed I think so there is more supply we are receiving from the different presently but as soon as we have sent to executives from GSFC to Tunisia for this part for getting the feedback to what is the status of the facility to be restarted after this fire and we are. We will get the information as soon as the plant is started. So we will restore over the supply from the port.
Saket Kapoor
As of now that we used to source the rock phosphate on a on a contractual basis or what was the last act consignment or tonnage we we received from them no.
S K Bajpai
From we receive only P205 phosphoric acid not from phosphor. So as time before six months we received one segment but then after the plants were closed so there was no production and there is no segment Accordingly.
Saket Kapoor
So what is our investments are there. How much have we invested in this project?
S K Bajpai
Maybe it is way back in 12 or 13, maybe 200 crores or odd figures. We might have invested in equity in the default project along with the CORO bundle.
Saket Kapoor
And lastly sir, on the consolidated numbers when we consolidate our quarterly results here the there is a increase of revenue to the tune of 13 crore and the bottom line is reduced by 6 crores. So can you explain this phenomenon? Why what goes into consolidation and why the profitability at the PBT level goes down?
S K Bajpai
No, because I think the subsidy impact when the we are having our 100 on subsidy gatl. So if there is any stock lying there we book as a sale in the standalone accounts. But well the in consolidation that subsidy portion is adjusted. So that’s why the PVT is down. But whatever sale is there of the GATL as a whole that increases the revenues. So while consolidating we we adjust the sales and the PVT levels.
Saket Kapoor
I’ll just go through it again. Okay sir, thank you for all the elaborate answers in the presentation part offline. I would like to give some more suggestions wherein our presentation can be made more addressable to the investors. But lot of changes. Good changes have been made to the presentation and we are really grateful for the 2D management for addressing our request. Some more changes can be made that would make the presentation more addressable going ahead. So we would look to interact with the team who have prepared the thing. So for my input if they can be deliberated on.
S K Bajpai
Sure, sure. Thank you.
Saket Kapoor
Okay, thank you.
operator
Thank you. The next question comes from Sanya Jain with care pms. Please go ahead.
Saania Jain
Hello sir. Thank you for the opportunity. Just wanted to know what would be the CAPEX number this year?
S K Bajpai
CAPEX which is catalyzed or under execution.
Saania Jain
Under execution.
S K Bajpai
Under execution today only this phosphoricated and sulfuric acid plant at Sika which is proposed so that capex is around 1600-1700 crores what we have projected at the time of proposal. Now the form bits have been received and we are under negotiation. We cannot disclose the price. So this is the CAPEX available presently one more steam of DAP at Sika is supposed to be converted into fungible production facilities like APS and other NPK. So approximately 30 to 40 crores expenditure would be there to convert this DAP tank.
Saania Jain
And so what about the sulfuric acid plant in Vadodra?
S K Bajpai
Yeah, that is commissioned in next month or so or September, October. So that is around 300. 300340 crores of the plant. So we will be capitalizing that in the next quarter or in the third quarter.
Saania Jain
Okay. And sir, did you we experience any inventory gain this quarter in the fertilizer segment?
S K Bajpai
What you’re saying? Please repeat.
Saania Jain
Did we experience any inventory gain in the fertilizer segment this quarter and if we could quantify them.
S K Bajpai
Inventory gain.
Saania Jain
Yes.
S K Bajpai
See in case of fertilizer you know that subsidies were paid on cost. Normally in case of Q1 is already off season. So normally this doesn’t happen. So not a major part of anything.
Saania Jain
Okay, that’s it from my side. Thank you.
S K Bajpai
Thanks.
operator
Thank you. The next question comes from the line of Munzer Shah with nsfo. Please go ahead.
Unidentified Participant
Good evening sir. A couple of questions. One is a few years back the Gujarat government had come out with some guidelines For Gujarat based PSUs in with respect to dividend policy and buyback. So are they still. Are you supposed to follow those guidelines actually still?
S K Bajpai
Yes sir, because the record is still in the force. So we are actually following it.
Unidentified Participant
Okay. Because you know there was a guideline for buyback also. And I think GSFC was one of the candidates, you know for fulfilling those guidelines. Actually.
S K Bajpai
Yeah. As far as dividend is concerned, the last quarter we have said now the activity then when it will be paid the board will decide accordingly. As far as buy, buyback or bonus share, whatever the items were there in the circular. Our chairman is the chief secretary of government of Gujarat. So he knows better. So whatever the instruction coming from the board for buyback or bonus accordingly apply.
Unidentified Participant
And so would it be fair to assume that whatever capex you have announced and obviously they yet not finalized. Okay. But considering improved performance it would be mostly financed to internal accruals.
S K Bajpai
No, no. We have three, three, four project we have already commissioned and now the money we are having it is not. It is not sufficient to cater the needs of BSA project which is more than 1600 crores. So let us see. Whenever we need we will approach the market for the debt portion.
Unidentified Participant
So. But we already have more than 2000 crores cash in the books. And our annual cash generation is close to 800 odd crores.
S K Bajpai
Yeah, so that has been reduced quite a bit. 800 crores. So now the because of the raw material prices going on other inventory we are piling up for the next quarter production. So we are not having that much else which I can assume that there will not be. It will suffice for the PSA plant.
Unidentified Participant
So you mean to say the March 2025 cash has reduced substantially?
S K Bajpai
Yeah, it is reduced. I don’t know if the subsidies increase and receive good margin on the fertilizer along with the subsidy then it will require again.
Unidentified Participant
So last question one is there is, there is, you know, with regards to lot of increase in the fertilizer prices, there is a talk that the fertilizer subsidy will increase substantially this year. So you know, say by March 2026, do you think that all the companies would be receiving the subsidies or the this time there is a possibility that, you know, they can be delayed.
S K Bajpai
No, no. I think that whatever the pricing of the raw material is prevailing, certainly look into and increase the subsidy especially on the phosphoric, phosphorus and sulfuric acid content P and S, whatever budget the government has provided in the budget. So that will be devised. I think whatever additional is needed because the agriculture sector, fertilizer sector is the prime importance for the economy and for the government.
Unidentified Participant
Also the cash flow perspective, actually more from the cash flow perspective because government has been repaying subsidies for last couple of years. But this year, you know, there would be a substantial increase and you know, considering the cash flows, would they be able to repay on time or there could be delay.
S K Bajpai
We are receiving the subsidy well in time. Up to the july second week we have been receiving the subsidy. There is no delay from the government side. And I hope that this will continue.
Unidentified Participant
Sure. Thanks a lot sir.
operator
Thank you. Reminder to participants to ask a question. You may press star and 1. As there are no further questions from the participants, I now hand the conference over to Mr. S.K. bajpi for closing remarks.
S K Bajpai
Yeah, so thank you participants and I hope that our team and myself has given the satisfactory reply whatever questions has been posed to us. And it is good quarter for us and hopefully good season, rainy season is there. So we will come out with the better results in the coming quarter. And till then, goodbye. Thank you.
operator
Thank you on behalf of Gujarat State Fertilizers and Chemicals Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.