Shree Pushkar Chemicals & Fertilisers Limited Q3 FY22 Earnings Conference Call Insights

Key highlights from Shree Pushkar Chemicals & Fertilisers Limited (SHREEPUSHK) Q3 FY22 Earnings Concall

Q&A Highlights:

• Shubham Agarwal from Aequitas India asked about the reason for a 33% QonQ volume drop in the dye and dye intermediary division. Punit Makharia MD answered that as far as dye, the company was flat, while in dye intermediary, the drop was due to the demand being less and the company preferred to hold back the stock instead of selling it.

• Shubham Agarwal from Aequitas India also asked how the company expects the chemical division to deliver from 4Q22 onwards. Punit Makharia MD replied that 4Q generally is the best period amongst the all four quarters. The company believes it will be doing much better than 3Q and 2Q. SHREEPUSHK is confident of doing around INR550 crore of total revenue from chemicals for full year.

• Shubham Agarwal from Aequitas India asked about the expectation of ramping up the new facility, Unit 5.  Punit Makharia MD said that Unit 5 is almost done and the company has already started the dry trial runs of the plant. Internally the company has decided that by the first or second week of March Unit 5 production will be commenced.

• Shubham Agarwal from Aequitas India asked about drivers of fertilizer volume decline QonQ and the revenue number for Madhya Bharat. Punit Makharia MD answered that it was a seasonal impact. And revenue for Madhya Bharat in 3Q22 was INR26.5 crores versus INR16 crore in 3Q21. And Pushkar standalone revenue was INR17.12 crore in 3Q22.

• Sumesh Guleria from Green Portfolio asked about the Deewanganj plant and when the company expects to start.  Punit Makharia MD answered that the company is targeting to start Deewanganj as early as possible. The company has already obtained all the necessary approvals for starting of the plant. Only a few local issues are there which the company expects to resolve by April or May.

• Forum Makim of Equitree Capital asked about unit wise capacity utilization. Deepak Beriwala CFO replied that in 3Q, capacity utilization for Dye Intermediates was 30%, for Dyes it was 80%, for Fertilizer 33% on a QonQ basis. In Kisan, capacity was 72%, and in Madhya Bharat, it was 63%.

• Forum Makim with Equitree Capital also asked about the export breakup for the chemical business. Deepak Beriwala CFO said that in chemical business, till nine-months 2022, total export was INR69 crores. And for 3Q22 it was INR24 crores. The company added it’s exporting only from Pushkar.

• Forum Makim with Equitree Capital enquired about the current demand and pricing scenario for fertilizer and chemical segments. Punit Makharia MD replied that in comparison with last year 2021, the company believes that the business is good at this point of time.

• Forum Makim with Equitree Capital also asked about the impact of subsidy reduction on the industry and on SHREEPUSHK. Punit Makharia MD answered that there is an acute shortage of fertilizer and fertilizer raw materials also. This in turn will shoot up costs which will be a concern on the supply side. Also, demand will be bullish due to shortage of supply.

• Forum Makim with Equitree Capital asked about the company’s three year plan. Punit Makharia MD said it’s too early to discuss about a three year plan. But expects to cross INR550 crores in FY22. And targeting for touching INR1,000 crores at least for FY23.

• Samarth Singh TPF Capital asked about the nine-month fertilizer sales in Pushkar, Kisan and Madhya Bharat. Deepak Beriwala CFO said that Shree Pushkar stand-alone was a total of 40,000 metric tonnes sales. In Kisan, 9 months total sales was 62,000 metric tonnes. And in Madhya Bharat total sales was 48,000 metric tonnes.