Shree Pushkar Chemicals & Fertilisers Limited Q4 FY22 Earnings Conference Call Insights

Key highlights from Shree Pushkar Chemicals & Fertilisers Limited (SHREEPUSHK) Q4 FY22 Earnings Concall

Q&A Highlights:

• Subham Agarwal from Aequitas Investment asked about the fertilizer division and what kind of volumes the company can do in FY23. Punit Makharia MD replied that the company expects to achieve around 3.75-4 lakh tonnes of quantity in FY23. The company also added that it’s hopeful that in FY23, it would be achieving around 80-85% capacity plus additional what it achieved of Deewanganj and Kisan Phosphates.

• Subham Agarwal from Aequitas Investment also asked about any timeline with respect to Kisan Phosphates expansion of 32,000 and Deewanganj of 132,000 tonnes. Punit Makharia MD said that as far as capex of Kisan Phosphates is concerned, it’s completed. On Deewanganj, a closure order needs to be revoked, post which the company will be able to immediately start the plant.

• Subham Agarwal from Aequitas Investment enquired about the current realization per tonne of SSP and the subsidy amount per tonne. Punit Makharia MD answered that subsidy remains as it is. It was done on 20 May, 2021. And government has not increased any subsidy on the SSP. However, the company has increased the sales price, so in totality it’s around INR16 a kg, including subsidy.

• Subham Agarwal from Aequitas Investment asked if there is any issue with regards to availability of raw material for the SSP division. Punit Makharia MD replied that there is fluctuation in price. SHREEPUSHK is having sufficient stock of raw material till the sale of Aug. 2022.

• Subham Agarwal from Aequitas Investment enquired that due to the solar plant, how much cost saving the company is expecting per unit. Punit Makharia MD answered that for Unit 1, the company is already getting credits in its electricity bill. For Unit 5, the company should be getting the credits from next month. So the company can add around INR5-6 crores to its EBITDA annually.

• Forum Makim of Forum Capital asked that on the fertilizer segment why volumes on a standalone basis are down 9% YonY. Punit Makharia MD clarified that it is mainly because of certain grade of fertilizer for which the raw material was not available.

• Ninad Sabnis with Sabnis Financial asked about the capex plans for FY23 and beyond. Punit Makharia MD said the company currently has completed the capex of around INR165-170 crores out of the internal accrual. Now the company does not have any such major plans of any major capex, except few balancing equipment’s capex.

• Ninad Sabnis with Sabnis Financial asked about the availability of SSP in India and the market size and market share. Punit Makharia MD answered that the total production in India as per the data available in public domain is around INR49 lakh tonnes of the SSPs produced across India. Of this the company’s share is close to 4.5-5% till the last year.

• Anshuman Mohta asked about Unit 5, if the company is going to dyes and chemicals. Punit Makharia MD said there are currently three plants. One is acid plant which started on March 27, 2022. Second, connected to acid plant is one sulphur chemistry plant which will take 1.5-2 months time to start. The third one is the dye intermediate plant.

• DR Varun with Stock Gems asked about the sales being good but margins suffering on a quarterly basis and what’s the outlook for FY23. Punit Makharia MD answered that there is big pressure on the business due to steep increase in energy costs. The company consumes around 3,000 tonnes a month of coal, the cost of which has almost doubled vs. last 6-8 months.