Madhya Bharat Agro Products Limited (NSE: MBAPL) Q4 2025 Earnings Call dated May. 13, 2025
Corporate Participants:
Mcenro Samdani — Group Strategy & Investment Head
Pankaj Ostwal — Promoter & Director
Sourabh Gupta — Whole Time Director & Chief Financial Officer
Analysts:
Jas Nahata — Analyst
Raghav Nathani — Analyst
Mahantesh M. — Analyst
Puja — Individual Investor
Raaj Macwan — Analyst
Presentation:
Operator
Good evening ladies and gentlemen. A very warm welcome to the Q4 and FY ’25 earnings conference call of Madhya Bharat Agro Products Limited from the senior management, we have with us today Mr. Pankaj Otswar, promoter and director. Mr. Sourav Gupta, whole time Director and Chief Financial Officer and Mr. Makro Samdani, Consultant Satri and investor. As a reminder, all participant line will be in 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 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. McIndrew Samdani. Thank you. And over to you sir.
Mcenro Samdani — Group Strategy & Investment Head
Thank you, Sejal. Good evening everyone and welcome to the earnings call of Madhya Bharat Agro Products Limited. Before we begin the call, I would like to mention that some of the statements made during today’s call might be forward looking in nature and hence it may involve risks and uncertainties including those related to the future financials and operating performances. Please bear with us. If there is a call drop during the course of the conference call we would ensure the call is reconnected the soonest. I would like to hand over the conference to Mr. Pankaj Ostwal, Managing Director. Over to you Pankaj ji.
Pankaj Ostwal — Promoter & Director
Thank you very much sir. Good evening everyone and welcome to the fourth quarter and full year earnings call for FY ’25 of Bhagya Bharat Agribus Ltd. A company belonging to Oswald Group of Industries and one of the leading prosthetics fertilizer company. As you are aware, we are expanding our footprint in products as well as area of operations. Since its takeover in 2004 by Oskarco. I will start giving with a brief on the industry scenario followed by company performance and question answer session. In FY ’25, prosthetic fertilizer industry volumes excluding MOP grew by 7.5% on yoy basis. Overall the growth was driven by NPK grades. At the same time Matabhara Agroproducts Limited recorded much higher volume growth of 17% for FY ’25. We have consistently outgrown the industry demand financial and operating performance for the quarter ending 31st March 25th. Starting with the quarterly financials, revenue stood at INR297 crores reflecting a robust 103.7% year on year growth and a 4.6 increase. Sequentially adita stood at 36 crores registering a strong growth of 155.3% year on year with a healthy margin of 12.1%. Profit after tax stood at INR14 crores recording a growth of 984.6% year on year growth and tax margin for the quarter stood at 4.8% EBITDA per tonne during the quarter was INR4698 reflecting our continued operational efficiency.
Now moving to the quarterly operational performance we saw strong traction in SSP its sales of 39,723 metric tonnes delivering a 21.2% year on year growth. We also saw a significant improvement in capacity utilization for SSP which rose to 79% up from 65% in the same period last year. On the other hand, NPK DHP sales of 36,909 metric tonnes with 42.3% year on year growth Financial and operating performance for the full year ending 31st March 25. Revenue for the year was 1059 crores up 29.7% year on year compared to INR817 crores in FY ’24. Supported by strong market demand and improved SSV volumes, EBITDA stood at INR146 crores registering a 51.4% growth year on year with a stable EBITDA margin of 13.7%. Tax for the full year came in at INR57 crores. A strong 132% year on year increase with a tag margin of 5.4% EBITDA per tonne for the full year was Rupees 4,287 reflecting consistent operational efficiencies. Outstanding subsidy receivables as of March 3125 were Rupees one hundred and 20 seven crores compared to seventy seven crores on December 31, 2024 and Rupees one hundred and six crores on March 31 24. Net debt as of 31.03.25 stood at 307 crores compared to 278 crores as of 31.03.24. Reflecting the continued investment in our growth initiatives, we command a lion’s share of 9% and 19% in Madhya Pradesh and Satyrjet for SSP respectively.
Now moving to full year operational performance, SSP sales stood at 1:83,028 metric tonnes, a 12% increase year on year compared to 1:62,970 metric tonnes in SY24 and SSP apply at 73% inflation. NPK sales surged to 1:56,346 metric tonnes, a 22% increase from 1,27,648 metric tonnes in FY ’24 while NPK3at license improved significantly rising from 63% to 64% which shows stabilization on expanded capacity undertaken in house during past five years on raw material price scenario raw material price movement it has been mixed. Sulfur prices have doubled over previous year because of volatile global demand, but ammonia and off market prices are tougher and stable. The government has increased price concession for Korea to 2025 to cover the increasing raw material costs. Since we mainly sell NPK and SSP, I would like to give some color on price consistence increase for these products. The increase was around 42% for SSV and 18% in NPK over the period cycle.
Now I would like to tell you about the new product launches and updates. We are excited to announce the launch of new products in our portfolio looking to the increased demand of fortified SSP Annadata Urea sfp, a combination of urea and SSP for holistic crop nutrition Annadata Superfic enriched with zinc, boron and magnesium for enhanced oil health and Annadata Zebo fortified with zinc and boron to address nutrition deficiencies. These new offerings reflect our commitment to meeting the evolving needs of farmers and reinforcing our leadership in the fertilizer market. Since value added nutrient has good demand, we expect good response and expect handsome addition in profit. Our Expansion Plan we recently expanded phosphoric acid at Sagar, Madhya Pradesh in March 2025. With this our phosphoric acid capacity has increased to 69,000 metric tonnes of the benefit of this expansion will be recorded in FY ’26. In bottom line, our major expansion plan of Maharashtra announced last year is on track. Just to refresh, we are coming up with three 30,000 tonnes of DAP NPK plant at Dhule in Maharashtra. By October 26 this plant will be having captive raw material speed manufacturing capabilities of phosphoric acid and sulfuric acid. The total capex for this plant is INR550 crores for which two crores term loan is sanctioned by banks for the first phase of capex of INR350 crores to add to above. Recently in this month we even announced expansion of sulfuric acid capacity by another one 65,000 tonnes of Madhya brace for a capex of INR100 crores which should be operational by March 25th. The above capex will be funded with a mix of debt and equity in Addition, we are in continuous lookout to increase capacities by re bottlenecking existing facilities.
Now I would like to present Growth Outlook. We are optimistic about financial year 26 and beyond driven by both recent capacity additions and strategic expansion initiatives. As a group, we do implement various marketing strategies. Our recent additions of some of the products in our portfolio is key to our commitment to meet new demand of the product. We believe that NPK and FSP will remain key to the growth of cosmetic fertilizer. We will continue to keep focus on these products for financial year 26. Currently, the commissioning of our expanded phosphoric acid plant at Sagar, Madhya Pradesh in March 2025 will enhance our health efficiency leading to better cost efficiencies and improved margins. Starting FY ’26 we expect to see tangible benefits from this investment and accordingly we are guiding for a robust 15% growth in revenue with better profitability in FY ’26. This growth will be supported by continued demand for our flagship products like NPK and SSE operational efficiencies and improved capacity utilization across our clients. Additionally, our announcement to further expand sulfuric acid capacity at Target by 1:65,000 to be operational by March 26 underlines our commitment to backward integration and value gen resilience. These strategic investments combined with a focus on de bottlenecking existing capabilities and launching pharma centric products reaffirm our long term growth vision. We are confident that these efforts will not only sustain our leadership position in core markets but also unlock new avenues for growth, scale and profitability.
Looking further ahead, our greenfield project in Boule, Maharashtra is three lakhs 30,000 tonnes of BAP and PVA plants equipped with captive phosphoric acid and sulfuric acid units. Setup is a progress, is progressing as planned and is slated to commission by October 26th. This facility is expected to significantly enhance our production capabilities and market reach setting a strong foundation for accelerating growth in FY ’27 and beyond. We continuously work on optimizing our manufacturing processes and improve technology to enhance our efficiencies and production. Our years of experience along with technology firms deals us with one of the best cost metrics for manufacturing to push new capacities. We already strengthened our marketing team and have invested good amount in R&D improvement in efficiencies including better improved product. We have broad based our funding partners including SBI who has shown appreciable interest in our expansion. Our rating agency continues to have faith in our capabilities. I would like to end my opening remarks with this and open to take up the questions from the participants. Thank you very much.
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 touchtone 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. Participants, you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The first question is from the line of Jas Nahata from Anand Rathi. Please go ahead. Sorry to interrupt. Sir, I would request you to please use your hand. Sir.
Jas Nahata
Hello.
Operator
Yes, sir. Sir, are you connected to a bluetooth device?
Jas Nahata
Yes.
Operator
Sir, I would request you to please disconnect. We can’t hear you clearly.
Pankaj Ostwal
Hello
Sourabh Gupta
Yeah.
Pankaj Ostwal
Yeah. Please continue.
Jas Nahata
Sir, congratulations on the figures. I just wanted to ask that your working capital has been significantly improved recently. Is it going to stay that?
Pankaj Ostwal
What is your question?
Jas Nahata
So, your working capital days, your cash conversion cycle has been improved significantly for over the past years. Is it going to stay that way?
Sourabh Gupta
Yes.
Pankaj Ostwal
Yes, definitely we are working on it to improve our working capital cycle. And definitely we look forward to have better working capital cycles in coming quarters and coming years.
Jas Nahata
Okay, sir, nothing. Thank you.
Sourabh Gupta
Improves because of our holding level of raw material. Everything in absolute terms remains same. As such, any better management capacity utilization will lead to the better working of the startup.
Jas Nahata
Okay sir, no more questions. Thank you.
Sourabh Gupta
Thank you.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. The next question is from the line of Raghav Nathani from Bajrang Medical. Please go ahead.
Raghav Nathani
Am I audible?
Pankaj Ostwal
Yes.
Raghav Nathani
Yes.
Sourabh Gupta
Yeah.
Raghav Nathani
So, my question is regarding the increased subsidy from the government which recently has been announced so will be going forward. Will we see any improvement in the margin because of this subsidy?
Pankaj Ostwal
What happens is whenever government increases or decreases the subsidies, it depends on the cost of the product. So, there is a formula which is already prevailing in the ministry for calculating this NBS amount, Mutant waste subsidy amount. So. And it is done every six months, 1st of April and 1st of October. What has happened is the prices of raw material have increased and that is why the subsidy hasn’t increased. And if the prices go down or up. The subsidy goes up and down. It happens.
Raghav Nathani
So, basically we will see the. At least you see whatever margins you’re working on being stable in the next financial year.
Pankaj Ostwal
Yes, definitely. There is no issue of margins as we improve our production in the coming year. Definitely the percentage terms will remain same or it may slightly improve. But the profits will definitely improve.
Raghav Nathani
And so what growth we can expect in the next coming financial year? Sir, in terms of the turnover.
Pankaj Ostwal
In terms of turnover, I have already spoken that we are expecting an around 15% growth in this year and in next year. Once our project. Once our client at Dheel Maharashtra is operating then the full client operations will give its revenue. That has to be calculated.
Raghav Nathani
Thank you so much.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Mahantesh from Mann Industries. Please go ahead.
Mahantesh M.
Greetings. Sir. Just to repeat about that subsidy mentioned about?
Pankaj Ostwal
Subsidy increase or decrease.
Mahantesh M.
Yeah. The impact on your financials. Just. You just can get the point.
Pankaj Ostwal
So, what happens is I will explain you again. What happens is whenever the. Whenever there is an increase or decrease in the raw material prices government has to increase or decrease the subsidy. Or we increase our MRP or reduce our MRP. So, what has happened in this last six months? The prices of raw material has increased. The government has increased the subsidy so that we need not increase our MRP. Because the objective of the government is to ensure availability of fertilizers to the farmers at reasonable prices. So, this is how the subsidy works. And there is a formula in Ministry of fertilizer which is being monitored. And as per the formula the subsidy of nutrient based amount is being calculated on individual nutrients. And that is how the subsidy is calculated.
Mahantesh M.
How does the profitability get impacted, sir? it will be one is to one ratio or it will depend upon the cost structure. And.
Pankaj Ostwal
You try to understand, subsidy is not the profit.
Mahantesh M.
I know. how does it affect your profitability?
Pankaj Ostwal
No, no. Normally it does not impact. Normally it is not. Because what happens is whatever. Whatever your cost of goods sold is. Is equal to subsidy plus revenue from the sales plus office. So, normally does not happen like that.
Mahantesh M.
Okay. So, subsidy has nothing to do with your profitability.
Sourabh Gupta
Price compensation subsidy is nothing. But any increase in input cost is offset through this mechanism of increase in subsidy which is technically price compensation.
Mahantesh M.
That’s true, but the cost of it will vary from company to company. There is some variation. So, that’s where one company will certainly do better than other, right?
Pankaj Ostwal
No, no, company to company obviously costing varies. But then government looks from a broader angle. They take country as a whole.
Mahantesh M.
So, that’s what I am trying to convey, the company is slightly more efficient, will do better in, in terms of.
Sourabh Gupta
It is not only the customer. Yes, efficiency does play a role. At the same time location at the same time your efficiency also play a major role.
Pankaj Ostwal
Definitely you have pointed out correctly that the efficiencies are better, the profits may be comparatively better the industry you expect.
Mahantesh M.
Because when one looks at the fertilizer companies, each company very valuation varies from company to company. So, come some fertilizer companies get a better valuation maybe due to better efficiency that they’re operating. That’s what I’m trying to understand.
Pankaj Ostwal
You can see from our results that in comparison to other companies we have better results. And one more reason for having better results is that we have that beneficiation of rock Crossfit plant is there. So, at any point of time we have that edge over any other manufacturer. Because in India there are no rock phosphate beneficiary manufacturers in India. So, that is an important part which is playing a key role in the profits. Okay.
Operator
So, does that…
Mahantesh M.
Now due to the geopolitical implications, is there any curtailment or maybe change in the raw metal import for different companies? Like especially due to the wars with Pakistan, Turkey or maybe any supply chain issues that the industry.
Pankaj Ostwal
No, no raw material is coming from Pakistan or Turkey. All the raw material comes from Egypt and Jordan or Qatar or Morocco and all these countries. So, there is no issue of geopolitical tensions in case of raw material or finished goods. Definitely there could be a chance that some weight on shipping rates may increase or decrease. That could be there. But as a industry we keep monitoring on that, and we are honest that the cost is under control for shipping trades and that is. That is a continuous part of the business to look for the cost.
Mahantesh M.
Okay.
Operator
Sir, does that answer your question?
Mahantesh M.
Yeah
Operator
Thank you. Ladies and gentlemen, you may press Star and one to ask a question. The next question is from the line of Puja who is an individual investor. Please go ahead.
Puja
Very congratulations sir for the thousand CR mark. My question is, do you have any plan to fund the expansion through equity?
Pankaj Ostwal
We have already approved that GIB is underway. We hope that we may be able to achieve our GIB targets most probably in this quarter. Let’s hope we are keeping because already the market is volatile, and we are looking forward to have good QIDs on the board.
Sourabh Gupta
But in any case, even if QIP does not take place, the company has internal approvals adequate to take care of the expansion. So, expansion will be on the line. On the date back September 26th, we will be on screen whether QIP comes or does not come.
Puja
Okay. So, my next question is what type of trading activity undertaking in your company?
Sourabh Gupta
Look, Ostwal Group per se, we have almost 1.1 million tonne of prospective fertilizer capacity for which we require a large number of rock phosphate. And as a group, because we have entered into an agreement for import of rock phosphate. So, to make an economy of size, many times one company imports a ship load of gross profit. And then on high C basis it is distributed among our group companies. This type of trading activity, this is considered as trading. So, this type of trading activity which is beneficial for the group as a whole we are undertaking. But it is done at arm’s length purely on commercial lines. And sometimes we import MOP also. Which is because it is not manufactured in India. It is purely imported. And from last year government of India has permitted private player Taxo to import. So, as and when some opportunity comes forward, we import MOP and then sell it directly. So, only these limited items.
Puja
Okay. Thank you very much.
Operator
Thank you. The next question is from the line of Raaj from Arjav Partners. Please go ahead.
Raaj Macwan
Hello. I’m audible?
Operator
Yes sir.
Raaj Macwan
Once we expanded capacity in October 2026 how much volume growth are we anticipating in full year?
Sourabh Gupta
FY ’25, 2027 we will be having half year contribution. And because plant being under setup recently we estimated only 40% capacity. So, we’ll be adding around 400 crores INR worth of turnover.
Raaj Macwan
Additional turnover in FY ’27 from the new plant?
Sourabh Gupta
Full year will be 2728. And while we have projected and capacity inflation of 50% only. But we may looking to our experience and past 10 internally we expect that the capacity replacement should grow 60%.
Raaj Macwan
60% will be 27 itself.
Sourabh Gupta
Right. 20.
Pankaj Ostwal
27.
Sourabh Gupta
28. So, 27.
Raaj Macwan
Okay.
Sourabh Gupta
Ah.
Pankaj Ostwal
50%. 50. 60%.
Sourabh Gupta
If it goes then it is almost 200,000 tonne and it will add 800 crores INR.
Pankaj Ostwal
More than 800 crores.
Raaj Macwan
This plan can give us an incremental release of around thousand crores.
Sourabh Gupta
Right?
Raaj Macwan
We are expecting that in FY ’27 will do 400 crores of incremental sales from this new plan.
Sourabh Gupta
Yes, yes
Raaj Macwan
All right. And sir, you commented on FY ’26 sales growth. Do you do you want to comment on the EBITDA? Because if I look at your PR, your EBITDA margin is two to 3% higher than your PR. What is the reason for that?
Sourabh Gupta
Historically if you see the EBITDA margin in our company has been better. And the reason is earlier we have explained you, number one is the BRP. Where the local low grade rock process is used to get BRP. Where our FST cost of production is far less than others. Other is our efficiency. Low capex, low opex. You see, the project which the Madhya Bharat has implemented is the first 240,000 metric tonne of NPK capacity which we have created. The total project cost was hardly less than 200 crores INR. And anybody who is setting projects elsewhere, the project cost Is range of 800 crores. So, all these sectors, our efficiency, as I told you, the procurement of raw material at the group level, our ability to bargain, all these sectors put together give us an edge when we have better EBITDA.
Raaj Macwan
All right, so in FY ’26 also, are we expecting a similar EBITDA or are we expecting an increase or decrease in EBITDA?
Pankaj Ostwal
Similar. No, no decrease. You maintain it.
Raaj Macwan
Maintain it. Okay.
Sourabh Gupta
Other, other, we expect that there must be some improvement with our efficiency.
Mcenro Samdani
Just to add. Can I add something sir? Pankaj ji, on the better margins, one of the key reasons which sir told Pankaj ji told about the backward integration. In terms of backward integration we are 100. Backward integration, even our 100% phosphoric acid is used. Our entire facilities are based on 100 in house manufacturing of phosphoric acid. Whereas when you compare to a lot of other players which I’m sure you’re comparing, they are not fully backward integrated in terms of their entire capacities of fertilizer. And that is one of the key reasons why we have a better margins in terms of percentage as well.
Raaj Macwan
Understood, sir. All right. Thank you. All the best.
Pankaj Ostwal
Thank you very much.
Operator
Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question. Participants who wish to ask a question may press star and 1. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Mcenro Samdani for closing comments.
Mcenro Samdani
Yeah, thank you once again, everybody for joining us. If you have any further questions, please don’t hesitate to reach out to our investor relations team. Thank you and have a great day.
Pankaj Ostwal
Thank you very much.
Operator
Thank you. On behalf of Madhya Bharat Agro Products Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.