Mangalore Chemicals & Fertilizers Ltd (MANGCHEFER) Q4 FY23 Earnings Concall Transcript

Mangalore Chemicals & Fertilizers Ltd (NSE:MANGCHEFER) Q4 FY23 Earnings Concall dated May. 12, 2023.

Corporate Participants:

Nikhil Saboo — Head Of Equity Research

Nitin M Kantak — Whole Time Director

T M Muralidharan — Joint President – Finance

Analysts:

Gopal Agrawal — HDFC Mutual Fund — Analyst

Kaushal Kedia — — Analyst

Vineet Agarwal — — Analyst

Presentation:

Nikhil Saboo — Head Of Equity Research

Good morning, ladies and gentlemen. It’s my pleasure to welcome you on behalf of Mangalore Chemicals and Fertilizers Limited and SKP Securities for this financial result webinar. We have with us Mr. Nitin Kantak, Whole Time Director and Mr. Muralidharan, CFO. All participant lines have been muted, and this webinar is been recorded for compliance reasons. We’ll have the opening remarks and the presentation from Mr. Kantak and Mr. Muralidharan, followed by a question-and-answer session. Thank you, and over to you Mr. Kantak.

Nitin M Kantak — Whole Time Director

Thank you, Mr. Nikhil for this conference call, and a very good morning to all. Warm welcome to all of you attending this call. Let me give you a short overview of the agriculture scenario and fertilizer business environment followed by MCFL performance for the quarter and the year.

In the backdrop of good monsoon for the fourth successive year, as per the second advanced estimates for the year 2022, 2023, India is poised to post record food grain production of 323.6 million metric tons, an increase of nearly 8 million metric tons over previous year. IMD has predicted normal monsoon which is 96% of long period average for this year, whereas Skymet has predicted below normal monsoon, around 94% of long period average.

As far as the Fertilizer business environment is concerned, the trend of reduction in the international prices of finished fertilizers and fertilizers inputs continued for the quarter. In the last one year, DAP prices are down 42% to about $530 per metric ton, $540 per metric ton. Urea prices are down almost 53%, down to around $330 per ton, P2O5 prices are down 43% to $970 per ton, and ammonia prices are down 68% between $300 to $330 per ton.

All India urea sales for the quarter were down 5.6% to 7.6 million metric tons compared to Q4 last year. Urea sales year-on-year were up 4.5% to 35.7 million metric tons. All India DAP sales for the quarters were down 1.9% to 1.3 million metric tons and year-on year, higher by 13.6% at 10.5 million metric tons. All India, NP/NPK sales for the quarter were up 5% at 2.1 million metric tons, and for the year, down 12% to about 10.1 million metric ton.

And all-India MOP sales for the quarter were down 36% to 2.44 lakh metric tons, and for the year, down 24% to 1.87 million metric tons. Coming to MCFL marketing area, comprising of the states of Karnataka, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra and Kerala, industry urea sales in MCFL market for the quarter were up 21% to 26 lakh metric ton, compared to Q4 financial year ’22, whereas MCFL sales increased by 33% to 1.22 lakh metric ton over Q4 financial year ’22.

Industry DAP sales for the quarter in MCFL market increased by 71% from 4 lakh metric ton to 6.9 lakh metric ton, whereas MCFL DAP sales increased 24% to 36,000 metric ton from 29,000 metric ton in Q4 financial year ’22. NP/NPK industry sales for the quarter increased by 43% to 16.15 lakh metric ton, whereas MCFL NP sales increased to 64,000 metric tons from just about 1,000 metric ton in Q4 financial year ’22.

On the plant operations front, after Energy Improvement Project implementation in Q2, ammonia and urea plants operated continuously at lower urea energy level, and we finished the year with 3.32 lakh metric tons of urea. On the phosphatic front, during the quarter, NP/DAP plant were operated continuously till March 20th, when we took annual turnaround for our maintenance jobs. Production for the quarter was 67,000 metric ton, and for the year was 2.3 lakh metric ton. Coming to our financial performance, as in Q3, we have come out with another robust performance in Q4. This was possible due to higher sales in Q4, and also handsome margins both on urea and phosphatic fertilizers.

MCFL has registered a revenue growth of INR1,164 crores for the quarter growing 62% over Q4 financial year ’22. And this is almost same as in the previous quarter. For the year, the revenue growth is INR3,642 crores which is 26% higher than financial year ’22. For the quarter, MCFL has posted EBITDA of INR139 crores compared to INR32 crores in Q4 financial year ’22, a growth of 334%. EBITDA for the year is INR340 crores compared to INR235 crores in financial year ’22, a growth of 45%.

Profit before-tax for the quarter is INR92 crores against INR4 crores in Q4 financial year ’22. The profit before-tax for the year is INR176 crores, against INR135 crores in financial year ’22. Profit-after-tax for the year is INR135 crores which is a 53% increase year-on year. These are the best-ever annual performance in over 50 years history of MCFL.

I will now hand over to our CFO, Mr. Muralidharan to give you a detailed presentation on our financial performance. Thank you.

Nikhil Saboo — Head Of Equity Research

Mr. Muralidharan, please take over. You can share your presentation.

T M Muralidharan — Joint President – Finance

Yeah. Thank you sir for your introduction. Is my screen visible to all of you?

Nikhil Saboo — Head Of Equity Research

Yes. The screen is visible.

T M Muralidharan — Joint President – Finance

Nikhil, is my presentation visible?

Nikhil Saboo — Head Of Equity Research

Yeah. It is visible. Go ahead.

T M Muralidharan — Joint President – Finance

Good morning to all of you. We welcome to the Investor Presentation for the performance for the quarter-ending 31st, March 2023 and for the year ended 31st, March 2023. In this presentation, we shall cover the highlights of Q4 and year ended FY23 and some past annual performance.

During the financial year, Ammonia Energy Improvement Project successfully commissioned in September ’22, and ammonia and urea production tons per day ramped-up post-commissioning. In respect of DAP/NPK, we optimized the operations by suitable product mix in view of the viability and availability of critical raw materials. We shall now move to the highlights of Q4 and the year ended FY23 with corresponding quarter and year ended FY22. This was broadly touch based by my CEO, Mr. Nitin Kantak. Nevertheless, we’ll proceed [Phonetic] with the presentation.

The revenue went up by 62% during the quarter and 26% for the year-ended FY23 compared to the previous year. EBITDA also increased by 334% for the quarter and 45% for the year ended FY23, compared to the previous year. For the first time, we have crossed the EBITDA at the — post the INR300 crores mark. As regards to PBT and PAT, we’ve registered an increase of 2,103% and 2,160% respectively during the quarter, and an increase of 30% and 53% respectively during FY23, compared to previous year primarily on account of commissioning of AEIP project during the second quarter of FY23.

Now, we present the details of production, sales and revenue. The production and sale of Urea is 1.24 lakh metric tons in Q4 FY23 compared to production of 0.94 lakh metric tons and sale of 0.93 lakh metric tons in Q4 FY22. The production and sale of urea is 3.32 lakh metric tons and 3.31 lakh metric tons respectively during FY23 compared to production of 4.29 lakh tons and sale of 4.31 lakh tons during FY22. As regards complex fertilizers, we have sold 1 lakh tons in Q4 FY23 compared to 0.3 lakh metric tons in Q4 FY22. Also, we have sold 2.83 lakh tons in FY23 compared to 2.66 lakh metric tons in FY22.

Now, we shall discuss on the revenue from operations. As far as revenue from operations, revenue from Urea is INR588 crores for Q4 FY23, as against INR485 crores in Q4 FY22. Revenue from Urea for the full-year FY23 is INR1,797 crores as against INR1,653 crores in FY 22. This is despite the reduction in the volumes on account of increase in the prices of gas. Coming to revenue from non-urea business, we have registered a revenue of INR576 crores in Q4 FY23 as against INR234 crores in Q4 FY22. Coming to the full year basis, we have registered a growth in revenue of non-urea business of INR1,845 crores in FY23 as against INR1,243 crores in FY22.

Now, we shall look at some of the data points of the financial position. The net worth is INR803 crores at the end of March ’23 as against INR683 crores at the end of March ’22, registering mechanization [Phonetic] of INR120 crores. As far as the long-term debt, there is an increase of INR139 crores in March ’23 over March ’22. This is primarily on account of the loan availed for the Ammonia Energy Improvement Project, which is commissioned in the current financial year after factoring the repayment of some existing long-term loans.

Coming to short-term debt which is working capital, is at INR1,001 crores at the end of March 23 as against INR1,124 crores end of March ’22. The short-term surplus was INR366 crores at the end of Q4 FY23 as against by INR557 crores at the end of FY’22. By virtue of this, we’re able to reduce the [Indecipherable] borrowing and manage the requirement of the liquidity.

Coming to receivables, in bulk fertilizers industry, there are two types of receivables; subsidies from government of India and receivables from market dealers. As regards to the market debtors it is INR124 crores at the end of FY23, as against INR88 crores at the end of FY22. Coming to subsidy receivables, it is INR634 crores at the end of FY23 as against INR577 crores at the end of FY22. We want to give some details of the subsidies disbursed during the current financial year and last financial year. We have received INR888 crores during Q4 FY23 and for the full-year FY23 we received INR2,640 crores as subsidies. In relation to — in comparison to, we received INR806 crores of subsidy in Q4 of FY22 and INR1,780 [Phonetic] crores for the full-year FY22. This demonstrates that the government is able to disburse the subsidies in regular intervals and throughout the year so that we’re able to improve the liquidity position.

Now, we shall look at some past annual performance. The revenue from operations was at the levels of INR3,000 crores in FY19 which got increased to INR3,600 crores in FY23. Coming to EBITDA, you can see from the levels of INR200 crores in FY’19, we have been able to maintain the EBITDA during difficult times in the last three years and able to improve it to INR340 crores in FY23.

While PBT has improved from the levels of INR50 crores to INR176 crores in FY23 due to receipt of natural gas in FY21, and successful commissioning of Ammonia Energy Improvement Project in FY23. In respect of PAT, similarly, we have been able to improve from INR33 crores in FY19 to INR135 crores in FY23.

The cash profit has improved from INR72 crores in FY19 to INR194 crores in FY23. Earnings per share has improved from INR3.00 per share in FY19 to INR11.00 per share in FY23. We could see that the total receivables have come down from the levels of INR1,564 crores in FY19 to the levels of INR757 crores which is almost 50% reduction. This is possible on account of improved liquidity in the market and significant reduction in subsidy receivables due to fiscal stimulus given in FY21 during COVID-19 to clear subsidy arrears and continued additional support given in FY22 and FY23 by Government of India and timely disbursements of subsidies. We expect the similar trend going forward.

We shall look at the details of production and sale of urea. We are able to consistently produce to the levels of 3.8 lakh tons per annum, which is our re-assessed capacity. However in current financial year, FY23, there is a reduction in production due to plant shutdown for implementation of Energy Improvement Project as already explained to you.

The trend in sale of P&K fertilizers is based on availability and viability in this vertical. Coming to the overview of MCF operations, as regards the location of the plant, products manufactured, the capacities, marketing territories and the brand. We carry this slide, what we call, more relevant to the first time participants. The plant is situated at Mangalore, West Coast, opposite Mangalore port. And our present capacity of urea is 3.8 lakh tons, which is our re-assessed [Phonetic] capacity, whereas the capacity of DAP and other complex is 2.8 lakh tons per annum.

We also are trading in MOP and DAP based on market opportunity and business viability. We operate in the states of Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Telangana and Maharashtra. We sell about 77% of our sales in Karnataka, 1% in Kerala, 11% in Tamil Nadu, 7% in Andhra Pradesh, 1% in Telangana and 3% in Maharashtra. We sell under the brand, Jai Kisaan Mangala.

The major significant event in this financial year is the successful commissioning of the Ammonia Energy Project in Q2, and we are able to post impressive performance in Q3 of PBT at INR97 crores, followed by another quarter of Q4, the profit at INR92 crores.

Thank you for your time.

Questions and Answers:

Nikhil Saboo — Head Of Equity Research

Thank you, Murali sir. Your presentation was really very insightful. Friends, now we’ll start with the Q&A session. We’ll wait for a couple of minutes, let some questions line-up, and we can get it started. [Operator Instructions]. The first question is from Mr. Gopal Agrawal from HDFC Mutual Fund. Sir, please unmute. Sir, you’re on mute. Gopal sir, you’re on mute. We can’t hear you.

Gopal Agrawal — HDFC Mutual Fund — Analyst

I have unmuted myself, actually.

Nikhil Saboo — Head Of Equity Research

Yeah. Now we can hear you sir.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Yeah. So good morning, and many congratulations for excellent results sir. I wanted to understand in terms of energy consumption where are we at this point of time at the exit of March in terms of Gcal per metric ton. And wanted to understand on the DAP side, how these — the margins between the rock phosphate and phos acid is behaving, though I know it may not be applicable for you, but generally understanding the industry scenario worldwide, how the rock market and the phos acid price behavior on DAP side. Thank you very much.

Nitin M Kantak — Whole Time Director

Murali, I’ll take this?

T M Muralidharan — Joint President – Finance

Yeah, please sir.

Nitin M Kantak — Whole Time Director

Yeah. So we were operating at the energy level of 6.2 to 6.25 gigacalorie per metric ton prior to implementation of the energy improvement project. Post energy improvement project, we have been able to bring down the energy to a level like in quarter four, we have a energy — Urea energy of 5.6 gigacalorie per ton of urea. We are yet to reach 5.5. Minor teething issues are there which are being addressed and shortly we’ll be at 5.5. For the year, our total Urea energy was 5.875 gigacalorie per ton of urea. So that is your first question.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Yeah.

Nitin M Kantak — Whole Time Director

Regarding your second question, as you are aware, we don’t have a Phosphoric acid plant. Ours is not an integrated facility, it is only on imported phosphoric acid. Those who are having integrated facility where you have your own sulfuric acid plant and phosphoric acid plant, there is a big advantage. And the margins what you can get from DAP will be much higher at least more INR3,000 to INR4,000 per ton higher than what margins we are able to get on imported phosphoric acid.

Gopal Agrawal — HDFC Mutual Fund — Analyst

So sir, just wanted to take one-step ahead means at this point of time as we are seeing the phos acid availability is improving, so generally how the conversion margins are, and any thoughts on revision of subsidy from the government? Thanks.

Nitin M Kantak — Whole Time Director

Yeah. Actually, current margins have been quite attractive. For the last financial year, we had margins of around 5,500 on our 20:20. Our focus has been on 20:20:00 production most of the year. In fact we produce around 2 lakh metric tons for the whole year. And we had a very less DAP production done and margins contributions were only about 2,500 per metric tons or so in that range.

So, current phosphoric acid price for this quarter is $970 per metric ton, and it is on the downward trend. And, as you mentioned, the subsidies are yet to be declared by the government. NBS is yet to be declared for the — this financial year. And we expect it is to be shortly declared and accordingly you know, we will maintain our margins around 3,500 to 4,000 per ton on DAP and 20:20.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Sure. And sir, just to understand in detail on your Urea profitability. Then sir — as we — our incentive starts from what level [Phonetic] of Gcal per metric ton, means at your level of capacity, and now you are using gas.

Nitin M Kantak — Whole Time Director

We are getting very handsome margin on urea at the moment even at this current energy level. But our margins were more driven by the natural gas prices, which have been on the higher side in the last financial year. And we got quite decent margins almost on an average around INR9,000 a ton in the last financial year.

But mainly, one is of course because of reduction in the Urea energy per ton, as well as very high natural gas prices over the last one year. And now, the natural gas prices are softening, it has already come down to around $17 per mmBTU. The average for last financial year was around $19 per mmBTU, $19.5.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Okay.

Nitin M Kantak — Whole Time Director

So now it is already coming down as of now it is around $17 per mmbtu.

Gopal Agrawal — HDFC Mutual Fund — Analyst

What I want to understand, I mean, on the sustainable basis, this INR9,000 per metric ton, will it sustain or how do you see it will stabilize that is my main questions to understand. Thank you sir.

Nitin M Kantak — Whole Time Director

This year also we expect it to be in the range of around INR9,000 a ton, because we are going to go down to 5.5 gigacalorie per ton energy level or even lower. Right now we have some limitation in the plant which is going to be addressed by September. Post-September, we will be operating at 5.5 or below 5.5. So, and that will give us the advantage and allow us to maintain our margins around INR9,000-odd ton despite the gas prices going down.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Excellent, sir. And many congratulations. Wish you all the best. Thank you.

T M Muralidharan — Joint President – Finance

Sir, can I add on — supplement Mr. Kantak. Okay?

Nitin M Kantak — Whole Time Director

Yeah, please go ahead.

T M Muralidharan — Joint President – Finance

Gopal, see, the levels quoted by Mr. Kantak is the gross contribution levels. The EBITDA will be, what you call, another INR3,000 be taken off, okay, so the EBITDA levels is around INR7,000. It’s not that — what you call contribution is EBITDA, okay. So, the EBITDA will be around INR7,000, the same levels will be what we call, we expect to maintain this current financial year FY24, what you call despite the improvement in the [Indecipherable] what you call, energy consumption, we are able to see what we call try to achieve. And with the reduction in the gas prices which you could see the trend is about $15.5 per mmbtu for the April-May, that is a trend going on. I mean, the fuel [Phonetic] prices are at already at $75 per barrel, and — but it’s not able to breach the $80 mark.

So despite this particular flip side, we are able to — we’ll be able to maintain the EBITDA around INR6,500 to INR7,000 per ton.

Gopal Agrawal — HDFC Mutual Fund — Analyst

Great. Thanks for clarification. Good day, sir.

Nitin M Kantak — Whole Time Director

Thank you, Gopal sir. The next question is from Kaushal Kedia. Kaushal, please unmute yourself.

Kaushal Kedia — — Analyst

Yeah. Can you hear me?

Nitin M Kantak — Whole Time Director

Yes.

Kaushal Kedia — — Analyst

Yeah. Sir, can you give I’m sorry, I joined the call little late, what is your guidance for FY24?

Nitin M Kantak — Whole Time Director

We do not give any guidance, kindly excuse us, okay.

Kaushal Kedia — — Analyst

Thank you.

Nikhil Saboo — Head Of Equity Research

Thank you, Kaushal. [Operator Instructions]. The next question is from Vineet Agarwal. Vineet, please unmute yourself.

Vineet Agarwal — — Analyst

Good morning, sir. And congratulations on the good set of numbers.

Nitin M Kantak — Whole Time Director

Good morning.

Vineet Agarwal — — Analyst

Good morning sir. I have a few questions, first of all, can you provide us the breakup between manufacturing and trading volumes?

Nitin M Kantak — Whole Time Director

This year actually we have done very less of trading, because the market was very uncertain throughout the year, and the margins on BAP which is our normal import was very less. We have only imported just two vessels of DAP during the last year. And you know that quantity was also quite smaller, around 40,000. Out of that, we have converted almost 30,000 tons — nearly 30,000, Murali can give you correct figures. Around 30,000 tons of sales out of this will be on imported traded fertilizers. Rest all is all manufactured. And we finished with sales of 6,14,000 tons for the year.

T M Muralidharan — Joint President – Finance

To add on to Mr. Kantak, sorry to interrupt you sir. We have sold 5,84,000 tons of manufactured fertilizers. As briefed by Mr. Kantak, we have sold 30,000 tons of DAP taking to 6,14,000 tons.

Vineet Agarwal — — Analyst

Sir, what is the targeted number for trading volumes for FY24, any targeted number?

Nitin M Kantak — Whole Time Director

Yeah. We are looking at a figure of 1,10,000 tons imports that is what we are budgeting. And we are hopeful of achieving that because the market scenario is much improved now. With the commodity price going down, we are in a much better situation. And, we’re confident that we’ll be able to meet that requirement. In fact, we already imported one vessel of DAP, 30,000 — 33,000 tons already being imported and it is — will be received in the month of June.

And we also imported a vessel of 10:26:26 which will also be received in June, that is about 10,000 tons. So 40,000 tons import we have already taken action on. And we are hopeful of — for reaching at least 1,10,000 tons minimum of imports for this year.

Vineet Agarwal — — Analyst

So to this — our focus will be more of 10:26:26, or it will more of DAP? How the…[Speech Overlap]

Nitin M Kantak — Whole Time Director

Yeah. It will be more of Di-Ammonium Phosphate. But you know, since we don’t have any NPKs in our portfolio, we are importing some quantity of 10:26:26 also to support our market.

Vineet Agarwal — — Analyst

Okay, sir. And sir, my next question is on the revenue side. Our revenue is almost equivalent to quarter three revenue as you have also mentioned in your opening statement. Though our Q4 is a leaner quarter in comparison to Q3, so any specific reason why our revenues are high during the Q4?

Nitin M Kantak — Whole Time Director

See, similar to Q3 — Murali, you can give more details about it.

T M Muralidharan — Joint President – Finance

Yeah. See — Can you repeat your question if you don’t mind, Vineet?

Vineet Agarwal — — Analyst

Yeah. Sir, generally Q3 is the busiest period for the industry because of Rabi season, Rabi demand. And Q4 is the [Indecipherable] season. So, still our Q4 revenue is more or less equivalent to Q3 revenue. So, any specific reason why it is that high?

T M Muralidharan — Joint President – Finance

See, we have improved our volumes of sales, okay, by ramping-up the production of NPK — NP. We only manufacture DAB and N20 as you know. And we had challenges in procuring raw materials because the prices were due in correction in the first half of FY23. By virtue of that, we’re unable to source the raw materials, which got stabilized when the prices started softening from Q3 FY23. So then — by which of that we were able to position our raw-material sourcing, and we’re able to get the production rate up, okay. And urea also, after the teething troubles in Q3 here and there, we’re able to consistently produce, this significant, what you call, reason on account of what you call quantity of sales as well as on account of the commodity prices compared to the earlier years.

Vineet Agarwal — — Analyst

Okay, sir. Sir, just needed a confirmation on margin per ton which Mr. Kantak gave earlier, 5,500 metric tons per metric ton we have for NP20, 2,500 per metric ton on DAP. This is for quarter four?

Nitin M Kantak — Whole Time Director

This is the contributions I was talking about.

T M Muralidharan — Joint President – Finance

I’ll explain it sir. Okay. See, INR3,000 — around INR3,000 is the — our EBITDA per ton of DAP and INR4,000 per ton for N20. There are the levels, the details given by Mr. Kantak is the gross contribution. This is the EBITDA is after providing for, fixed costs allocable to this particular product.

Vineet Agarwal — — Analyst

Okay. Sir, that INR3,000 and INR4,000 for quarter four?

T M Muralidharan — Joint President – Finance

Yes.

Vineet Agarwal — — Analyst

And sir, can you also tell me about Urea, EBITDA per ton?

T M Muralidharan — Joint President – Finance

Yeah. INR6,500 per ton.

Vineet Agarwal — — Analyst

And all these, all the INR3,000, INR4,000, INR6,500 are maintainable going forward or it will be, I mean, depending — how it will be?

T M Muralidharan — Joint President – Finance

Yeah, it’s difficult. As Mr. Kantak explained during the introduction and other during the Q&A, it’s very difficult to predict the — you saw a super-cycle of the prices commodities. Started from the — what you call in FY22, okay, it continued for about close to 18 months and started softening, what you call, then it is all depends on the final prices, what this subsidy is going to be offered by the government for this post factoring the reduction in prices. And what is the market demand is going to be, and all the different factors. It’s endeavor to maintain and improve, okay? And very difficult to commit a particular the season we don’t — the guidance is not possible in the industry, because it is dependent on vagaries of this market and the market what you call cost drivers, the profit drivers are multiple. So, we — our endeavor is to maintain it at least the levels what we achieved, okay, and to improve on. Okay, but very difficult to give guidance at this point of time.

And the market outlook is very positive and the — the rains and monsoon predictions are in line with what you call either at the normal or marginally below normal rainfall on long period average, it augers well for the industry.

Vineet Agarwal — — Analyst

So sir, lastly, can you please provide us the pool gas price once again for quarter four as well as FY24?

T M Muralidharan — Joint President – Finance

Which one? I don’t get you.

Vineet Agarwal — — Analyst

Pool gas price.

Nitin M Kantak — Whole Time Director

NG pool price he wants for the quarter and for the year.

T M Muralidharan — Joint President – Finance

Okay. See, for the quarter it was around $16 –$17 per mmbtu on the gross GCV basis. And it as a whole is about $19.5.

Vineet Agarwal — — Analyst

And sir, how much is — it is currently?

T M Muralidharan — Joint President – Finance

Now it’s currently down to $15.5.

Vineet Agarwal — — Analyst

And sir, last one question if you allow me again IFFCO has launched a nano DAP recently. So how do you see this development on for the industry as a whole and as well as MCFL?

Nitin M Kantak — Whole Time Director

As of now, MCFL is not looking at going into a nano urea or nano DAP. This is a good development for the country going forward. At the Group level, our another company, which is Zuari FarmHub Limited is already working on this and are going to come with nano urea and maybe nano DAP also in a short time.

But as of now, we are not looking at this. This is very positive for the agriculture. And going forward, it can help reduce the imports of DAP into India. However, it is not going to affect the current manufacturing units, manufacturing chemical fertilizers.

Vineet Agarwal — — Analyst

Okay sir. Thank you. That’s all from my side.

Nitin M Kantak — Whole Time Director

Thank you.

T M Muralidharan — Joint President – Finance

Thank you, Vineet.

Nikhil Saboo — Head Of Equity Research

[Operator Instructions]. Since we have no more questions, I would like to now hand over the webinar to Mr. Kantak for his closing remarks. Over to you sir.

Nitin M Kantak — Whole Time Director

Thank you, Nikhil. Thanks to all the participating in this session and putting up very insightful questions. As I informed you in my opening remarks, this year’s performance is the best-ever in over 50 years operating history of MCFL. Despite lower production levels, in the year gone by, we were short both on urea production due to implementation of the energy improvement project in our ammonia plant, and short on DAP 20:20:00:13 production due to raw-material constraints.

We also could not do significant trading activity due to very low or negative contributions. So, as the finished fertilizer and input prices have softened due to improvement in the geopolitical situation, we are now looking forward to fully utilizing our production capacity for financial year ’24. Also we are planning DAP and MOP ports. And looking at a sales target of around 9 lakh tons for financial year ’24, which would be almost 1.5 times the sales of financial year ’23.

So I assure all the investors that we are committed to perform well, and very hopeful of surpassing financial year ’23 performance in the current year. Thank you.

Nikhil Saboo — Head Of Equity Research

Thank you, sir.