Madhya Bharat Agro Products Limited (NSE: MBAPL) Q1 2026 Earnings Call dated Jul. 16, 2025
Corporate Participants:
Pankaj Ostwal — Promoter & Director
Analysts:
Gaurav Ranka — Analyst
Subrata Sarkar — Analyst
Viraj — Analyst
Riju — Analyst
Hitesh Randhawa — Analyst
Vaibhav Badjatya — Analyst
Darshal Javeri — Analyst
Isha Shah — Analyst
Majeed Ahmed — Analyst
Unidentified Participant
Presentation:
Operator
Good afternoon ladies and gentlemen. A very warm welcome to Madhya Bharat Agro Products Limited Q1FY26 earnings conference call from the senior management. We have with us today. Mr. Pankaj Oswal, Promoter and Director. Mr. Gaurav Ranka, Accounts General Manager. 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 in the conference call, please signal an operator by pressing on your touchstone phone. Please note that this conference is being recorded.
Gaurav Ranka — Analyst
I now hand the conference over to Mr. Gaurav Ranka. Thank you. And over to you Mr. Ranka.
Thank you, Ranju. Good afternoon everyone and welcome to the earning call for Madhya Bharat Eco Product Ltd. Before we begin the earning call, I would like to mention that some of the statement made during the during today’s call might be forward looking in nature and hence it may involve risk and uncertainties including those related to future financials and operating performance.
Please bear with us. If there is a call drop during the course of the conference call. We would ensure that the call is reconnected the soonest. I would like to hand over the conference to Mr. Pankaj Aswan, Managing Director. Over to you please. Pankaj.
Pankaj Ostwal — Promoter & Director
Good afternoon everyone. A warm welcome to Madhya Bharat Agro Products Limited first quarter earnings call for FY26. We are pleased to report an exceptional start to FY26 delivering record breaking revenue, production and operational performance for the quarter ended June 30, 2025.
Industry Overview Q1 typically aligns with the onset of Kharif season, a critical demand cycle for the fertilizer industry. This year was no exception. The sector saw robust seasonal traction especially in complex and phosphate based fertilizers supported by active sowing and well distributed monsoons. While these favorable agroclimatic conditions boosted demand particularly for NPK grades, the industry also faced significant raw material cost, inflation and supply side competitiveness. Raw material headwinds. Raw material prices remained highly volatile while ammonia saw moderate softening key Inputs like sulfur experienced sharp price escalations, nearly doubling in some cases over recent quarters. These input trends underscored the need for sharp procurement discipline and efficient cost management. Financial Performance Q1FY26Our financial performance for this quarter demonstrates strong execution and resilient growth. Revenue from operations stood at rupees 409.7 crores up 38% quarter on quarter and 104.5% year on year, the highest ever quarterly revenue led by NPK volume growth. EBITDA excluding other income stood at 57 crores, a 60% quarter on quarter and 71.1% increase year on year with EBITDA margins improving to 13.9% EBITDA per ton of rupees 5728 marks a notable outperformance compared to typical industry levels backed by scale efficiency and disciplined margin management. Profit after tax at rupees 28.2 crores, 100% quarter on quarter and a 145.5% year on year growth with PAT margin at 6.9%. Basic EPS rose to rupees 3.22 from rupees 1.63 in quarter 4 FY25 and rupees 1.31 in Q1 FY25. Operational highlights we achieved our highest ever quarterly fertilizer production of 1 14,773 metric tons and a record sales volume of 15976 metric ton driven by robust seasonal demand and improved operational throughput. NTK DAP sales sells to 59,655 metric ton registering 79.4% year on year growth supported by optimal capacity utilization at 98%. SSP sales stood at 39,863 metric ton, a modest decline of 8.4% year on year though capacity utilization remained healthy at 79%. Strategic product innovation we continue to drive value led growth through product innovation. Bharat Yuri SSP and novel formulation enhancing nutrient use efficiency Anadata Super 6 a fortified SSP enriched with zinc, boron and magnesium targeting micronutrient deficit soils. Both products were successfully launched and are expected to contribute meaningfully in the upcoming quarters. Expansion and Strategic Investment Our strategic expansion roadmap is advancing very well in Dhule, Maharashtra. The company’s major expansion is progressing very well comprising three 30,000 metric ton per annum NPK DAP 99,000 metric ton per annum phosphoric acid, one 98,000 metric ton per annum sulfuric acid. Additionally a 3.30,000 metric ton per annum single super phosphate fertilizer. Grant has been proposed at Dule to further strengthen the portfolio. We have secured phase one funding of rupees 202 crores through term loans from SBI, Axis bank and Federal bank with rupees 51 crore dispersed as of June 30, 2025. Project expenditure till date stands at rupees 135 crore. All regulatory approvals related to this backward manufacturing have been obtained. We have secured 17.82 hectares of land adjacent to its Banda Sagar facility through a long term lease from Akvin to support future capacity expansion and integration. We have also announced a further debottlenecking initiative to enhance DAP NPK capacity by 33,000 metric ton per annum and a new capacity of sulfuric acid at Sagar by 1,65,000 metric ton per annum. These expansions aim to fortify backward integration, ensure supply chain resilience and broaden our footprint in Western and central markets. Outlook we remain optimistic about SY26 supported by favorable seasonal momentum, robust product pipeline and expanding infrastructure. The successful launch of differentiated products such as Urea, SSP and Anadata Super 6 positions as well to meet evolving farmer needs and enhance farmer traction in upcoming quarters. Our ongoing expansion projects in Dhule and the proposed facilities in Banda are expected to significantly strengthen our manufacturing footprint, though results would be visible in FY27 only and will result into improved cost control through backward integration and enhanced supply security across key regions. We continue to invest in improving our manufacturing technology and process efficiencies with R and D efforts focused on optimizing product performance and cost structure. These initiatives are aimed at enhancing operational productivity and supporting the launch of farmer centric products that respond to nutrient challenge in Indian agriculture. However, we believe our integrated operations, agile sourcing strategy and expanded product portfolio will position well to navigate these uncertainties and deliver long term stakeholder value. With that, we are now open to the floor of questions. Thank you very much.
Questions and Answers:
Operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on your touch tone telephone. If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles.
The first question comes to the line of Subrata Sarkar with Mount Indra. Please go ahead.
Subrata Sarkar
Yes, Hello. Yes, this is regarding. Yes, this is regarding our SSP sir. So recently government has increased the fertilizer subsidy on SSP by quite a huge margin. Like up to 7,000. So can you just make us understand like what will be the impact on that vis a vis what is the like price of the like? If you. It will also help us if you explain a little bit about how this subsidy is set. Because rock phosphate prices also gone up. But what is the relation? And are we going to benefit out of benefit means? Are we expecting either in terms of like profit or increase in volume because of this action?
Pankaj Ostwal
Yeah, I have understood your question. So coming to the subsidy numbers. The last. Last six months which was 31st March 25th, the SSP subsidy was 5121 rupees per ton. And now the subsidy is 7263. So approximately the subsidy have increased by 2100 rupees. So what has happened? Why the subsidy increases or why the subsidy decreases? You need to understand the basic reason before behind increase or decrease is the increase in raw material prices in last six months.
So what has happened is the prices have gone up for phosphates and sulfur. That is why the prices have increased. And the government of India Department of Fertilizer wants to ensure the availability of fertilizers at a reasonable price to the farmers. So this is the whole thought process. The subsidy has increased. Definitely the increase in subsidy will somehow what we can call it as it may impact the profitability in positive terms. Because the profit on the opening stock of the inventory on the 1st of April 2025 which is there, it may. It may increase slightly. But the raw material prices have also increased. So let’s see the exact calculation, exact working that what. What is the impact on the profits for the increase in subsidy.
Sir, can you like explain at least can you give some ballpark number how much th
Subrata Sarkar
E raw material price has increased? Sir.
Pankaj Ostwal
The force rate, the prices, the prices for rock phosphate the prices would have increased by around 5 to 10%. Exactly. I don’t have the numbers right now. And for sulfur the prices have almost doubled.
Subrata Sarkar
Okay. Okay. Sir. Just another thing like SSP subsidy has gone up. But vis a vis depth subsidy has not gone up. So will that help? Will. Will it be like can that have a positive impact on SSC sale, SSP sale. Because that price, that subsidy has not changed so relatively. It has become cheaper to the farmer. And there may be some shift from damp to SSP because of this reason. Sir.
Pankaj Ostwal
No, no. You need to try to understand that the subsidy is not dependent on product to product but it is. It is a nutrient based subsidy. Department of Fertilizer, Government of India decides the value as per the nutrient N, P and K and S. So it is the value determines the total amount of subsidy on every product. Whether it is ssp, whether it is dap, whether it is npk
And what has happened is right now dap, DAP has an extra subsidy being given. So it is not the case that ssp, SSP or dap, the subsidies are different or NPK is the subsidy as different. Only DAP has some extra subsidy involved. Which is. Which is around rupees 3500 per metric ton. And. And coming to further the sales of DAP or npk, the. The product is being bought out by the farmers. So farmer decides what product has to be purchased on what crop. And stay specific and at what time.
Subrata Sarkar
Okay, sir. Thank you. Thank you for the clarification.
Operator
Thank you. Next question comes from the line of Viraj with Motilal Oswal amc. Please go ahead.
Viraj
Hello.
Pankaj Ostwal
Yes.
Viraj
So my question regards the roadmap for expansion. So what do you see your outlook in the next five years?
Pankaj Ostwal
I have already told you that our expansion project is coming up at Dule Maharashtra industrial area. And we are putting up a plant of 3,30,000 tons. DAP, NTK and SSP. 3,30,000 tons. So. And which is. Which is having a backward integration of phosphoric acid of 99,000 metric tons per annum and sulfuric acid 1 98,000 metric tons per annum.
Definitely. In India the complex fertilizer is being imported in huge quantities. Approximately almost 50% of the manufactured. 50% of the total requirement of complex fertilizers is being imported. So and Maharashtra is one of the highest consuming states in the country. And we will be just replacing the imported fertilizer in case of dap. NPK complex fertilizer for ssp. India is completely dependent on Indian manufacturers and there is a huge scope of increasing the market for SSP in the country. So both these products which we are going to manufacture, start manufacturing by September 26th will be, will be in demand and the demand is also increasing on year, on year basis. We are very positive on this and we hope that our capacities will be fully utilized in coming years.
Viraj
Okay, thank you.
Operator
Thank you. Next question comes from the line of Riju with Antique stockbroking. Please go ahead.
Riju
Hi sir. Thanks for the opportunity. So my question is regarding the EBITDA that we have reported this quarter. So there is a sharp improvement in terms of YOY and in terms of sequential basis. So can you please clarify like how much this was due to the inventory gain or because we are in a, you know a scenario that RM price are moving upwards. Basically this sulfur. So if you could clarify that thing.
Pankaj Ostwal
The ebitda. Definitely ebitda you want for metric for per turn basis or total ebitda because right now I have the figures.
Riju
Yeah. So total EBITDA is roughly around 55 or 56 crores that you have reported this year. 57 crores. Yeah, yeah, 57 crores. So how much that was due to the inventory gain? Because there must be some inventory gain in this quarter because we are in a, you know, in a scenario where RN prices are moving upwards. So how much that was due to the inventory gain?
Pankaj Ostwal
Okay, right now I don’t have the figures. Give me another python minutes so we can reply it later. That will be better. Yeah, because right now I don’t have the figures. I cannot. But you can, you can put your question again. We can. Where are you calling from?
Riju
I’m calling for Anti Shock Dopamine.
Pankaj Ostwal
Antique Antique stores. Okay, just give us if we are able to give you the numbers now or we will take.
Riju
I have your number so I’ll take it. Obligation.
Pankaj Ostwal
Yeah. Yeah. Okay. Thank you very much. Sorry, Sorry, we could not answer you right now.
Riju
No problem, sir. And in terms of the other questions, like so we have the combined capacity of DAP and npk. Right. And I do understand that it’s, it’s a fungi. Fungible capacity. But if you could broadly, broadly guide like in this quarter, how much we are manufactured NPK, how much we are manufactured DAP. A broad number?
Pankaj Ostwal
So for DAP, it was zero in this quarter. NPK, we manufactured NPK. We manufactured 59,655 metric tons.
Riju
Understood, sir. And in terms of you know, in your last year figure. So in 25, so how was the manufactured out of the manufactured fertilizer? How was your in picker share and how, how much was your DIP share in Indian, the complex side.
Pankaj Ostwal
Yeah. For last, the total DAP NPK production was 1:51,579 metric tons. And DAP was 1900 metric ton.
Riju
Understood.
Pankaj Ostwal
And it was a very small quantity. DAP was very small quantity.
Riju
Okay. And sir, for this full year of FY25 like roughly around can we expect 90 and 10%. So 90 is NPA. 10% is DAP?
Pankaj Ostwal
For FY?
Riju
FY25 for the entire year.
Pankaj Ostwal
Yeah, I told you the exact numbers. 1 lakh 51 thousand is correct. 1 lakh 51 thousand is NPK. 1900 is DAP. So it is not 90. It is almost 99 is NPK.
Riju
Okay, understood. Okay. So broadly we are into the NPK side in, in terms of the manufactured fertilizer, is that correct? Right?
Pankaj Ostwal
Yes. Yes. Yes, yes. Yeah. Yeah. NPK fertilizer has been in demand by the farmers. And what happens is in case of NPK’s farmer is able to decide what nutrient has to be given to the crop at times at growth specific timings. So NPKs have been and always. Are best best fertilizers.
Riju
Understood. Yeah. That’s great. And in the other questions I had like the, the EBITDA pattern that we have, you know we, we have reported this this quarter. So how sustainable is that going forward? And and and the another thing like if you look at the DAP D from the global market, so that has came down sharply over last one or two years period mainly because of constraint in China.
But now Indian government has I think a few of the companies have, you know, make some MOU saying some MOU or the like the the agreement with the Middle east companies to to get DAP in the Ravi season. So how you see this scenario changing? Because we have seen NPK share like NPK mix for the entire industry has inched up by 2% roughly compared to DAP. NPICA replaced the DAP market in FY25. So how do you see going forward if DAP capacities start to come in India the volumes start to come in India from the Middle East Middle east region.
Pankaj Ostwal
See definitely our higher volumes scale efficiencies and superior capacity utilization has helped improved our cost absorption which directly enhances the EBITDA per ton. Right. So in, in future also we are, we are pretty confident that we will be able to achieve the similar EBITDA numbers in incoming times in coming quarters and coming years.
And your, and your question regarding the DAP and npk again what I want to tell you is DAP has its own place and NPK has its own place. If you, if you see the market position of DAP and NPK in various states like, like Madhya Pradesh, sorry, Punjab, Haryana, they will be demanding more of daps. But if you go down, down the line, down the states like MP Maharashtra, Andhra Pradesh, UP Chhattisgarh, all these states have a huge demand of NPKs. NPK’s could be 2020013 or 123216 or 20202020191919 various type of NPK.
So, so again what I want to say is NPKs will enjoy their market positions in coming times and DAP fertilizer has its own demand of fertilizers in various parts of country as per the crop pattern. So both products will be in demand in coming years.
Riju
Understood sir. That’s very helpful. And that’s all from my side. Thank you. Thanks for clarifying all the.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. Next question comes from the line of Hitesh Randhawa with CEGR Capital. Please go ahead.
Hitesh Randhawa
Hi. Am I audible? Yes. Yes. Yeah. Hi. I think you did say that by September I think the new capacities would be commercialized. So I’m assuming that. Okay. The CAPEX is. Capex core. I was on track. Okay.
And second of, from a utilization ramp up point of view, say kind of how do we see the utilization 2728 onwards?
Pankaj Ostwal
See for, for, for year 27, FY27 we have already explained you that we will be starting our production in the month of September 26th. So half. Okay. Yeah. Okay. So half the year of the production, production is available in FY27. And and for, for our project purpose we, we have taken the capacity utilization around 50%. And for, for the next year that will be FY28. Right. FY28. So for that year we have taken the capacity utilization at 70%.
Hitesh Randhawa
Okay. FY28. 70%. Okay.
Pankaj Ostwal
In, in our, in our project, in our project reports which has been submitted to the banks.
Hitesh Randhawa
Right. Okay. Okay. But second, if that is how you kind of expect. I know it’s a bit far off, but that is how you expect things to pan out given that.
Pankaj Ostwal
These are very conservative numbers which we have these, these are very conservative numbers which we have taken for our capacity utilization. But from the performance of our present facilities we are, we are very confident that we will be able to achieve these numbers or better also.
Hitesh Randhawa
Right. Okay. Okay, thanks for that.
And second of, I think there was some discussion around government subsidies as well. I’m sorry, I had a bad line then. Second of see whenever these government subsidies are kind of declared and you did say that, okay, it is also kind of nutrient based and also dependent upon the raw materials etc. So kind of does the. If the raw material prices a kind of go down and say do during the year because the subsidy has been fixed for the year so kind of does that benefit us in some way?
So subsidies. Remains constant. But the RM price movement does that benefit as well. Gives us extra delta.
Pankaj Ostwal
The subsidies are not decided for a year. It’s. It is decided for six months from the 1st of April to the 30th of September and then first October to the 31st of March. And now. And now coming to the increase or decrease of subsidy figures or the nutrient based subsidy figures of NPK and S definitely increase or decrease impacts the numbers. It is. It is nowhere that I don’t want to give you in that. That the subsidy figures going up or down what happens.
But definitely it impacts. But. But how. How you do the business, how you have that capacity to absorb that increase or decrease and particularly decrease. Because when. When the decreasing. When the prices are decreasing and the subsidies are expected to go down. How you manage your inventories and how you are able to purchase your raw material. There is always a utilization of your skill to purchase the raw material so that you. You are. You don’t end up into a higher cost inventory once the. Once the subsidies goes down on half yearly basis. So it is all. It is all the efficiency of the management.
Hitesh Randhawa
Okay. Sure. Thanks for that. And so talking about the tax rates, second of I think I just was able to glance through one of the annual reports and second of there was quite a few components basically due to which the tax rate has been a bit all over the place. So what kind of tax rate would this tax rate become a bit predictable and would it normalize over a period of maybe next FY26, FY27 or it will keep on fluctuating
Pankaj Ostwal
Tax rate. You are talking about income tax or which tax rate?
Hitesh Randhawa
Yes, income tax. Income tax.
Pankaj Ostwal
In case of income tax it is. It is in. In last FY 2526 we are under math. 2627 we are under math. And 2728 also we are under math. So after 28, FY 2829 right now I cannot say what could be the. What could be the percentage terms because since we are on an expansion mode we remain to be under math. But till FY27 28 we are definitely confident because our project is under expansion. So we are under math only
Hitesh Randhawa
Okay, okay. And lastly, I do not know if this would make sense or not. But second of, are there any plans of any kind of corporate action or merging or other entities actually say for example, we’ve got another listed entity, Krishna as well, and I think you’ve got another one. So are there any plans of maybe merging these is in any way?
Pankaj Ostwal
See, I have been talking to many investors and this question has come up every time. But what I would like to say again is that we are foreseeing some difficulties in merging the entities from the Department of Fertilizer because as you are already aware that there is a subsidy component being involved in every bag or every ton of fertilizer being sold to a farmer. So and the full and the subsidy is being under this fertilizer monitoring system called as FMS by Department of Fertilizers.
So we have that apprehension that in case of the companies going under merger may face some subsidy or cash flow problem. So we are not right now foreseeing any merger as long as we are able to sort it out. The problem of subsidy cash flow in case the merger happens and the subsidies are struck up for a month or two months or three months, which we are not able to identify.
So until, unless we are able to sort it out or there is a second option that the subsidies goes to the farmers and we get the full amount from the farmers, then we are always open in the interest of the shareholders that we may merge. But right now there are no such plans to merge right now.
Hitesh Randhawa
Okay, sure. Thanks very much. That’s it from my system.
Pankaj Ostwal
Thank you. Thank you very much.
Operator
Thank you. Next question comes from the line of Vaibhav Badjatya with honesty and integrity investments. Please go ahead.
Vaibhav Badjatya
Yeah, thanks for providing the opportunity. I just have two questions. What is like, you know, average prices of SSP in our catchment, in our catchment area for our product average SSP pricing. Average SSP pricing like for that it is 1ft 50 when listed by the government. I think SFP is relatively more free and then employment has done for that. So for ssp, what is that pricing on an average basis? I understand it will differ from company to company, but on average basis what is the broad range?
Pankaj Ostwal
The SSP is available in powder and granule with an additional nutrient of zinc, boron. So average pricing across the industry could be around 475 to 525 rupees per bag.
Vaibhav Badjatya
Okay. And secondly, you know, recently there have been a proposal draft notification to amend the Mineral Concession Rules 2016. And under that, under that rules government is proposing that the ASP which is declared by Ministry of Mining for all the rock phosphate will be based on CFR rather than the actual actual rock phosphate being sold by different mines like from the mine sweep procure for example.
So do you see any any impact on our rock phosphate domestic procurement because of this these changes in regulation?
Pankaj Ostwal
See in India the rock phosphate is mined in Udaipur owned by RSM Limited which is a government of Rajasthan Company Government of Isan Company. And and the other mines is based out at Sagar and Jaguar which is again the mines are owned by government of multiplication. Some mines are owned by private players also.
So. And these and the and the prices of rock phosphates by these sellers are normally normally connected to the import prices. So I don’t see any material material impact because if the. If the imported prices increases they also increase the price. If the metal. If the imported prices decreases, they also decrease the price. So in that, in
Vaibhav Badjatya
That notification you know there is. There has been a ratio mentioned for the percentage of phosphate concentration in different. So that might actually differ than what we procure and their royalties and everything can get increasing. They might want to pass on that royalty increase and everything to us in DMS loyalty. So I was trying to understand. Understand that.
Pankaj Ostwal
No, no. But again what I want to tell you is that whatever is the CFR prices for any any type of rock being imported in India the prices has to be matched by the domestic players. Otherwise. Otherwise there’s an opportunity for. For. For the imports. So the prices will will match up whatever be the amount of royalties.
You need to understand the total costner. We we cannot be. We cannot go for a royalty or taxes or something like that. Maybe it is more of a CFR cost to a plant.
Vaibhav Badjatya
Yeah, I. I completely understand it but the objective of bringing that notification, Draft notification. The premise of the drop notification was at the price Prices are different and that’s why they want to have the CFR benchmark. So I was under the impression that probably the prices might be different for cfr. And yeah, ultimately I got your point. Ultimately,
Pankaj Ostwal
Ultimately the prices will be in line with the import prices because almost, almost huge, huge quantity of the nutrient is being imported in, in the form of raw material or in the form of intermediate or finished goods directly. So the prices will be aligned with the imported prices.
Vaibhav Badjatya
Okay, got it sir. Thank you. That’s it from me. Thank you.
Pankaj Ostwal
Thank you. Thank you.
Operator
Thank you. Next question comes on the line of Darshal Javeri with Crown Capital. Please go ahead.
Darshal Javeri
Hello. Yes, hello. Good evening sir. Thank you so much for taking the question. Firstly, congratulations on a great set of results, sir. So I was going through our last con call. We, I think out there we guided for a 15 growth in FY26. But I think seeing our Q1 result, I think that only has, you know, taken care of all our growth aspirations. Maybe. So we want to know what kind of revenue guidance and EBITDA guidance can we have for FY26?
Pankaj Ostwal
Revenue guidance and EBITDA guidance?
Darshal Javeri
Yes sir.
Pankaj Ostwal
Definitely the EBITDA guidance has come out through our higher volumes and the better efficiencies and, and the capacity utilization. So what, what I would say is we, we will continue with all those efficiencies and we hope that the EBITDA remains same or better from this quarter. This is for EBITDA and in terms of revenue also, since we have already utilized our most of the capacity like in complex fertilizers, we have achieved the 98% as I have told in my speech also. So we, we are confident that we will be achieving the capacity utilization at, at the best.
Darshal Javeri
At the best. So, so does that mean like our quarterly run rate is now around 400 cr? Is that a fair assumption? Sir.
Pankaj Ostwal
I have told you that we will be able to achieve our production capacities. And definitely once the production capacities are achieved, EBITDA will also be in line with the utilization. Definitely after this second quarter, the subsidy numbers are also going to be revised. So we are We are. We are hopeful and we are confident that definitely our. Our capacities will be fully utilized and, and we will achieve in. In line with this first quarter.
Darshal Javeri
Okay. Okay. That’s, that’s great to hear, sir. And this also if I can. So yes. In FY27 next year our capacities are coming online in H2. So I just wanted to know like how will that impact? Like it will take some time to scale up. I think you were saying 50 utilization. So just wanted to know like how the, you know, do we feel like, you know, will we have enough, you know, demand for our products or how would. How do you plan for that? How are we planning for the next year, sir?
Pankaj Ostwal
See as I have told you that we will be utilizing our 50 capacity for the new plant. We also understand that once, once the plant starts there are. There are some teething problems. So we have already included those teething issues into our numbers. And we are looking forward for only 50% of the capacity utilization. So one point is this.
Other point is that we are based out in Maharashtra. And Maharashtra is one of the highest consuming states of fertilizers in the country. And huge quantity of fertilizer is being imported in Maharashtra. Either from. Either from outside the country or inside the country also. Like, like SSP there is a demand of almost 10 lakh metric ton. And against that only 3. Around 3 to 4 lakh tons is being manufactured in Maharashtra. And for DAP NPK’s there is a demand of almost 30 lakh tonnes. More than 30 lakh tons. And the quantity is not being manufactured in Maharashtra. So we are. We are confident to sell our production capacities. There is no issue in coming years.
Darshal Javeri
Okay. Okay. Great. That’s great. And I just wanted to know just the bookkeeping question in terms of like you were saying about two questions. So one like the tax rate as per matt. What I didn’t know how much is our tax rate like as per mat. Because we see sometimes it is 30%, sometimes it’s by 24 or 50%. So what is the effective tax rate? We can explain. And our total capex cost is around 600 crores. Right. So that depreciation will come in next year. Right?Once the capex is online.
Pankaj Ostwal
Yeah. The. The depreciation there is. There is a section 35, 35 AD income in income tax which allows us for an 100% depreciation in the same year. So we will. We will be claiming the depreciation in FY27. Okay. So we will be getting that 100% depreciation of 600 around 600 crores or the expenditure done in the project. One point is this, the other point is that the MAD percentage. 17 point. 17.47% is the MAD percentage. But then there is a deferred tax liability also which has to be calculated and which will be, which is, which will be 35% approximately total total total liability.
Darshal Javeri
Oh okay. So around roughly as I will say that our tax liability will be around 35 can plus minus something but roughly is going to be that.
Pankaj Ostwal
Yes, yes, yes, yes, yes, yes. Okay Okay.
Darshal Javeri
I just want to know sir, currency like we also taking bet for our capex. So what is the cost of funds that you know that, that we have? Like do we have any interest, you know the subvention or something? Like what’s the roughly cost of funds that we have?
Pankaj Ostwal
See we have, we. We have been sanctioned loans from SBI Federal bank and Exit Bank. So the interest rate for. For the term loan is. It is around 8.50.
Darshal Javeri
Okay, that’s a very great rate. Yeah, that’s it on my side. So thank you so much for all the best.
Operator
Thank you. Next question comes from the line of Isha Shah with Nizar Enterprise. Please go ahead.
Isha Shah
Good afternoon sir. Am I audible?
Pankaj Ostwal
Yes, yes, please carry on. Okay. Yes. First of all congratulations on good set of numbers. I have few questions. First is so what would be the asset turnover for the. For our new capacity that is coming up in dule. Just hold on. The total capex will be it is around 600, 650 odd crores. And the first year turnover. First year turnover based on the capacity utilization. Just hold on a.
Isha Shah
Yeah.
Pankaj Ostwal
It will be around 1 is to 1 1.
Isha Shah
So here we have taken capacity utilization of this — first year which is around 50%.
Pankaj Ostwal
Yeah, which is, which is around 50% for the six months because we are going to start the production in September. September 26th.
Isha Shah
Correct. Okay. And. And so what would be our SSP and DAP margins?
Pankaj Ostwal
In, in, in. in the new project or in the old project?
Isha Shah
Like currently what would be. And DAP margins? Yeah.
Pankaj Ostwal
We are expecting a PBT of around 8 to 10%.
Isha Shah
Individually like in SSP also it is 8% and DAP also it is 8%. Like that.
Pankaj Ostwal
If you take it as a industry, we take it as a industry as a whole. If you want to have the numbers on product wise then I will have to work it out.
Isha Shah
Okay? Okay. Okay. No problem sir. And also where are we when it comes to cost in terms of SSP and DAP as compared to Quora Mandal?
Pankaj Ostwal
Madhya Bharat Agro Products Limited has a facility of beneficiation of rock phosphate having a capacity of 200,000 tons per annum and which is not available in the Dhule plant. It is very clear. So only Sagar plant has that capacity. Dhule plant does not have that capacity and that is the extra margins available with the Sagar plant.
So if we compare with the, if you compare it with Coromandel and once we see the numbers of Coromandel because they use phosphoric acid directly also they manufacture phosphoric acid also we, we manufacture phosphoric acid, we manufacture sulfuric acid then we have this rock phosphate beneficiation plant. So definitely in terms of EBITDA or in terms of PBT or pat, in terms of EBITDA I can typically say we are better than the others.
But in terms of PBT or PAD because many other products are also involved like non subsidized fertilizers are also involved. So PBT or pat, I don’t want to comment on that. But in terms of EBITA for the, for this complex fertilizer or ssp definitely we are better.
Isha Shah
Okay. Okay, understood. And so from where are we sourcing our raw materials?
Pankaj Ostwal
We are sourcing our raw material from Egypt, Jordan and then we have tie up with our local mining which is Empty State Mining Corporation and there are some private players also which are giving us the rock phosphate for our beneficiation.
Isha Shah
Okay, thank you so much sir. That would be all from my side.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. A reminder to all the participants, please restrict your sleep 12 to 2 questions. Next question comes from the line of Majeed Ahmed with Pinpoint X Capital. Please go ahead.
Pankaj Ostwal
Yes, yes, please go ahead.
Majeed Ahmed
Thank you for the opportunity. This quarter we have done a very good revenue growth. But when I see that particularly in your gross profit margins there’s nearly contracted by 11% on 38 to 27% YoY basis. So sir, just want to understand, of course, more than ever I just want to understand what is the gross profit margin that you want to stabilize for FY26 gross profit margin for FY26 for the whole year. How do you see 26, 27% to be maintained or would it be improved better?
Pankaj Ostwal
The gross profit margin it is nearly EBITDA. Also it is nearly EBITDA is X of your employee and other expenses revenue minus your cost of goods. So what was your question?
Majeed Ahmed
So my question is going forward like what is your expected EBITDA? Because for both your FY24 and 25 you maintain at 32%. Would that be maintained or is there you see compression on your modules for this.
Pankaj Ostwal
Yeah, for this quarter basically the EBITDA has improved.
Majeed Ahmed
That is because you have rationalized your fixed expenses. But again if your gross margin or due to your comps is getting fall due to some sort of price realization or something of that sort, if your cost overrun, so how much ever you do real cost rationalization that won’t help. So just want to understand how are you going to maintain your gross margins?
Pankaj Ostwal
The gross. See if the EBITDA has improved that that all depends on the gross margins. Only because gross margins has improved then only the EBITDA has improved and ultimately the PBT and pat. So what I what again I would like to tell you is all these factors are improving due to the, due to the efficiencies, due to the capacity utilizing.
Yeah. So we are confident that the similar, similar, similar efficiencies or similar utilization will be maintained down the year.
Majeed Ahmed
So. So if I assume then your 32% gross margin and 14 to 15% EBITDA will be maintained going forward with your better efficiency and overall on analytics basis, your margins would be at 30% gross margins.
Pankaj Ostwal
We have achieved in this quarter and we are hopeful and we are confident that we will achieve in the coming quarters also.
Majeed Ahmed
Thank you.
Operator
Mr. Ahmed, please rejoin the queue for more questions. Next question comes from the line of Rishi mehta, an individual. Mr. Please go ahead.
Unidentified Participant
Hello.
Pankaj Ostwal
Yeah. Hello.
Unidentified Participant
Sir, can I expect the continued production records as quarter one in quarter two given seasonal dynamics?
Pankaj Ostwal
I did not get your question.
Unidentified Participant
Can. Can I expect continued production records in quarter two given seasonal dynamics?
Pankaj Ostwal
Yes. Yes, definitely. Because see the Q2. Q2 was a post Kharif showing. And with our strong inventory pipeline and expanded product mix we will definitely have that production levels being maintained. There is no issue.
Unidentified Participant
Okay. And one more thing is that. What about urea? Do you have any plan to move towards urea? See right now we h
Pankaj Ostwal
Ave already very huge scope in phosphatic fertilizers. And that is why we are expanding our business in Maharashtra also. So at. At this point of time we don’t have any plans for urea. But as we are into the fertilizer industry, maybe down the line in another coming years we can think it up. But right now there is no plan to diversify in urea.
Operator
Thank you. Mr. Mehta, please rejoin the queue for more questions. Next question comes from the line of Medila Jain, an individual investor. Please go ahead.
Unidentified Participant
Yeah. First of all congratulations for the result.
Pankaj Ostwal
Thank you.
Unidentified Participant
Hello. Am I audible?
Pankaj Ostwal
Yes. Yes. Yes. Yeah. Congratulations for the good results. My question is what is the impact of Iran Israel’s war on import of rock phosphate. And also the impact of the this on crisis, the
Iran Israel war. Since now the Iran Israel war has already stopped. There is no material impact. Definitely the FOB prices did not increase. But there was an increase in freight component, sea freight component. But that has also. It is. It is more in line with the. With the old, old dates. So there is no material impact of Iran Israel war.
Unidentified Participant
Okay then. Thank you.
Pankaj Ostwal
Thank you.
Operator
Thank you. Next question comes from the line of Kalavati and individual Investor. Please go ahead.
Unidentified Participant
Thank you very much.
Unidentified Participant
I want to ask regarding EBITDA person, what contribution most to the EBITDA person’s outperformance and will it continue in future?
Pankaj Ostwal
Yeah. As I have told in my earlier answers also that we have performed very well in terms of volumes and we have performed very well in efficiencies which has ultimately absorbed the cost which has directly announced our EBITDA pattern. And we are, we are confident that this will. This will continue in future also.
Unidentified Participant
Thank you very much.
Pankaj Ostwal
Thank you.
Operator
Thank you. Next question comes from the line of Gayatri Sharma and individual master. Please go ahead.
Unidentified Participant
Hello. Yes, good afternoon sir.
Pankaj Ostwal
Yeah, good afternoon.
Unidentified Participant
Marketing agreement that was for a year or the NFL agreement has expired or DAP NPK market or promising market or is almost Jabham. 98% capacity utilized
Pankaj Ostwal
And we are moving ahead without any inventories in the market in the factory. So without NFL agreement also market there is no issue right now. NFL agreement.
Unidentified Participant
Okay sir, thank you.
Operator
Thank you. Next question comes on the line of Rajesh Toshnival, an Individual investor. Please go ahead.
Unidentified Participant
Good afternoon sir. Congratulations on the excellent numbers. Sir, I just had a small query with regard to an enabling resolution which we took sometime around Jan Fair for raising further funds. So since then have we like closed our term loans and others favorably. Would there still be any need for equity dilution or. Sir, we’ll be able to make do with our own internal cash approval as you have already
Pankaj Ostwal
Told that we are. We have already tied up our funds for our project. But every time if there is an investor coming up in the company it ultimately improves the financial strength of the company. So as a company management we are always open for the. Investors to invest the funds in the company. But we always tie up the funds for our project so that there is no hindrance in implementing the project. And again, I would like to tell you that every project which our company takes up has a strong backup of financial. Either they are in terms of loan or they are in terms of equity. So the project, project will keep on go, keep on moving and it will get successfully completed on time. There is no issue of funds whether it is by loan or whether it is by equity. But equity always supports for the financial strength of the company.
Unidentified Participant
Understood. And good luck, sir. And Godspeed. Thank you.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. Ladies and gentlemen, due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Pankaj Ostwal
Thank you once again for joining us. If you have any further questions, please don’t hesitate to reach out to our investor relations team. Thank you. Have a great day.
Operator
Thank you. On behalf of Madhya Bharat Agro Products limited That concludes this conference. Thank you for joining us. You may now disconnect your lines.