Shree Pushkar Chemicals & Fertilisers Limited (NSE:SHREEPUSHK) Q4 FY23 Earnings Concall dated May. 17, 2023.
Corporate Participants:
Rasika Sawant — Investor Relations Manager
Punit Makharia — Founder, Chairman and Managing Director
Deepak Beriwala — Chief Financial Officer
Analysts:
Unidentified Participant — — Analyst
Harshil Solanki — Equitree Capital Advisors — Analyst
Samarth Singh — TPF Capital — Analyst
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
Pawan Kaul — Compound 26 Capital — Analyst
Forum Makim — JHP Securities — Analyst
Sanjeev Kumar Damani — SKD Consulting — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Shree Pushkar Chemicals & Fertilisers Limited Q4 FY ’23 Earnings Conference Call. [Operator Instructions] And there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]
I now hand the conference over to Ms. Rasika Sawant from Orient Capital, Investor Relations Partner. Thank you, and over to you.
Rasika Sawant — Investor Relations Manager
Hello, thank you, and welcome to the Q4 and FY ’23 earning conference call of Shree Pushkar Chemicals & Fertilisers Limited. Today, on this call, we have Mr. Punit Makharia, Chairman and Managing Director, along with Mr. Deepak Beriwala, CFO.
This conference call may contain forward-looking statements about the company, which is based on beliefs, opinions, and expectations as of today. Actual results may different materially. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. A detailed safe harbor statement is given on page number two of Company’s investor presentation, which has been uploaded on the stock exchange and Company’s website as well.
With this, I hand over the call to Mr. Punit Makharia for his opening remarks. Over to you, sir.
Punit Makharia — Founder, Chairman and Managing Director
Thank you very much. A very good afternoon to all my dear friends, and welcome to the Q4 FY ’23 earning call of our company. Today, on this call, I’m joined with Mr. Deepak Beriwala, our CFO; Mr. Nitesh Pangle, our Company Secretary and Compliance Officer; and Orient Capital, our Investor Relations partners.
Friends, I hope you all have got an opportunity to go through the financial results and investor presentation, which we had uploaded on the stock exchange as well as on the Company’s website also. Friends, now I will take you through the financial and operational performance of our company for Q4 and FY ’23.
In spite of all the challenges, business environments, we have reported a revenue growth of 17% in FY ’23 as compared to the last year. Also, there is a revenue growth of 17% subsequently in the Q4 FY ’23 versus Q3 FY ’23. Considering the financial performance delivered for the year, the Board of Directors have further recommended a payment of INR1.50 per equity share as the final dividend of the financial year ’22, ’23.
In the financial year ’23, our main goal was to ensure the efficient operation of our manufacturing plants, while also focusing on maintaining a strong cash conversion cycle. Friends, we are very careful not to accumulate any kind of costly inventory or bad debts that could have a negative impact on our financial health of our company.
Rather than pursuing a rapid top line growth without considering the long-term implications, we took a measured approach and prioritized sustainability over short-term mindset. Additionally, we made sure to stay away — stay aware of the commodity pricing and market trends so that we could avoid any unfavorable situation. By taking these precautions and making strategic decisions, we are able to successfully navigate the challenges for the year and maintain our financial stability.
During the quarter, we have observed a slower growth in the demand of dyes, dyes intermediates and the fertilizers, leading to a lower than anticipated realization for the current financial year. While the demand in both domestic and export markets have softened due to demand depression, energy crisis, and cautious discriminatory spendings, which ultimately affected the capacity utilization in textile and garment industry.
Despite these market conditions, our efforts and initiative allowed us to maintain stable with the new figures. The basic chemical and intermediate pricing rose as the dye intermediate pricing us forced to reduce the production drastically. However, there is a sign of recovery, and we expect production to improve gradually, demand for dyes it — increasing again. And now the cotton prices have also started arriving at the market yards.
Friends, with respect to the Madhya Bharat Phosphate Limited, our 100% owned subsidiary, we have achieved a revenue of INR132.60 crores for financial year ’23 versus INR100.9 crores for financial year ’22, an increase of 31%. For Kisan Phosphates Private Limited, which is also our 100% owned subsidiary, the revenue generation for FY ’23 is INR132.40 crores versus INR125.20 crores in financial year, which is an increase of 6%.
We are pleased to announce that despite several obstacles, we have successfully commissioned the Deewanganj plant of Madhya Bharat Phosphate Private Limited in Q4 FY ’23 with a rated production capacity of 132,000 metric ton of Single Super Phosphate also. We have also completed the additional capacity of 32,000 metric tons in Kisan Phosphates Private Limited. These represent significant milestones for our company, and we anticipate experiencing higher volume growth in our SSP division as a result of this expansion.
Friends, additionally, we are proud to be supporting the Atmanirbhar Bharat Abhiyaan initiative by promoting the use of indigenous fertilizers, like SSP. The government is also actively encouraging the convention of SSP, which we believe will further drive the demand for our products and positive impact on our business. Despite a strong growth in recent year, the average intensity of fertilizer usage in India remains much lower than most of the developed and emerging countries around the world.
There are currently a number of states in which we still have a very low penetration of the fertilizers, this leaves a lot of room for the future growth. In recent budget also, the subsidy of the fertilizer and food for the financial year ’23, ’24 have been also reduced by 22% and 31%, respectively. While the present challenges, we are confident in our ability to [Indecipherable] and navigate the evolving landscapes.
Now, update on capital expenditure. Unit 5 has started its commercial production and trials further in the amount of INR120.48 crores has been capitalized as on 31st March, 2023. When the demand is low, it presents an opportunity to prioritize repair and maintenance for our plants and equipments.
Our company is taking advantage of this lean period to address any necessary repairs and perform regular maintenance tasks to ensure that our facilities are running at the optimum efficiency. By doing so, we aim to reduce the risk of unexpected equipment failure or downtime when the demand increases. Our goal is to proactively maintain our facilities and equipments, which will ultimately position us for the long-term growth.
Lastly, I’m delighted to report that our company has a robust balance sheet with no lien deposits for INR94.91 crores on a consolidated basis. This strong cash position is a significant asset for the long-term stability and sustainability of our business models.
Friends, as you are aware that, we have managed to achieve moderate growth despite the challenges, circumstances of geopolitical tensions, economic downturn, and high inflationary pressures. We attribute this success to our unwavering commitment for our sustainable growth.
Even in the face of adversity, looking ahead, we are optimistic about the future and expect to see significant improvements in both our profitability and revenue growth in the next few quarters. We remain steadfast in our dedication to achieve our goal as confident that our hard work and strategic planning will continue to pay off in the months and years to come. Friends, despite the challenges that lie ahead, we are excited to tackle them head-on-head and build our success as we have achieved thus so far.
With this, I would like to hand over the call to Mr. Deepak Beriwala, who is our CFO, and now will take you through the financial operation highlights for the Q4 FY ’23. Over to Deepak.
Deepak Beriwala — Chief Financial Officer
Good afternoon, and a very warm welcome to everyone. Our revenue for Q4 FY ’23 was INR180.3 crore and a decrease of 6% on year-on basis. EBITDA for Q4 FY ’23 stood at INR20.4 crores with an EBITDA margin of 11%. PAT for Q4 FY ’23 stood at INR12.8 crores with a PAT margin of 7.1%. For FY ’23, the Company has reported turnover of INR684 crore versus INR584 crore for FY ’22 and an increase of 17%. EBITDA stood at INR68.4 crore with an EBITDA margin of 10%. PAT stood at INR37.2 crores with a PAT margin of 5.4%.
With this, we can now open the floor for question-and-answer. Thank you from my side.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Minal Sabnis[Phonetic] with Sabnis Financial. Please go ahead.
Unidentified Participant — — Analyst
Hello, am I audible.
Operator
Yes, sir, you are audible. Please go ahead.
Unidentified Participant — — Analyst
Okay, thanks for the opportunity, sir. So I had a couple of questions. So firstly, on a broad-based outlook for the fertilizer division for the company going forward. And the second question is with respect to when do you anticipate to add — have an increase in capacity utilization and are there any specific factors that will drive the increase in capacity in the future?
Punit Makharia — Founder, Chairman and Managing Director
Thank you, Mr. Sabnis. First of all, I will take your second question on the first priority. See, we are already in the process of adding our capacity in regards to the fertilizer business. For that, we are almost — we have already started our Deewanganj plant, and that Deewanganj plant we have just started in Q4 of the last financial year. And we are also in a process of doing some balancing equipment into that particular Deewanganj plant, so that the proper capacities can be utilized. And I believe that the performance of Deewanganj plant will be visible in this particular financial year. And the main impact would be from Q3 because, in the first two quarters, we need to overall do some balancing equipment act for the Deewanganj plant. But definitely, we’ve already started the production in Deewanganj plant. We have already started dispatches from the Deewanganj plant. So during this financial year, we’ll build up the capacity on Deewanganj plant.
Now, as far as the outlook of the fertilizer business in India is concerned, definitely, Government of India is giving much emphasize on the domestic fertilizers, like SSP. SSP is basically Make in India concept by the Honorable Prime Minister. And government is giving a lot of — this encouragement for improving the SSP. The government is just implementing few more qualities of SSP. Government is also considering very positively to add urea also into SSP, which is under the consideration with government, so that the dependency on the import fertilizer, like DAP, can be reduced. So we believe that, in future times to come, there is a good opportunity lying ahead in the SSP business.
Unidentified Participant — — Analyst
Okay, thanks sir. And with respect to the — so I think does this answer the outlook question also for the fertilizer division?
.
Punit Makharia — Founder, Chairman and Managing Director
Yeah, I think we can consider this also in a similar manner.
Unidentified Participant — — Analyst
Okay, okay. And just last question, if I can squeeze in. So have you observed any increase in demand for dye, and dye intermediate from Bangladesh and Turkey in the current quarter?
Punit Makharia — Founder, Chairman and Managing Director
See, Mr. Sabnis, basically Bangladesh and Turkey, both these countries are facing acute problem in terms of the currency fluctuations. And these three countries are — on the globe, are majorly, like Pakistan, Bangladesh and Turkey. Pakistan, we all know what is the situation of their internal financial situation, and regarding the dollar pricing in terms of the Pakistani rupee, which I heard is almost PKR300 equal to $1 almost. And like Bangladesh also, they have recently got some package from the World Bank in terms of the foreign exchange in terms of dollar. But yes, there are certain hiccups in terms of the demand pressure, demand in terms of the energy pricing and some foreign exchange, but we — I personally think that, in coming few months, things should be stabilized, and there would be a good demand in the same sector.
Unidentified Participant — — Analyst
Okay, thank you, sir. That’s it from my side.
Punit Makharia — Founder, Chairman and Managing Director
Thank you.
Operator
Thank you. Our next question comes from Harshil Solanki with Equitree Capital Advisors. Please go ahead.
Harshil Solanki — Equitree Capital Advisors — Analyst
Hello, sir. I had three questions. So first is, can you help us with the revenue of both the segments, chemicals and fertilizers, separately?
Punit Makharia — Founder, Chairman and Managing Director
Sir, can you be a bit louder? We are not able to hear and understand your question properly. Can you be a bit louder, please?
Harshil Solanki — Equitree Capital Advisors — Analyst
Yeah, sure. Can you help us with the revenue of both the segments, that is chemicals and fertilizers, for Q4?
Punit Makharia — Founder, Chairman and Managing Director
For Q4, the total revenue of chemical is — you are talking only about the Q4 or the whole year?
Harshil Solanki — Equitree Capital Advisors — Analyst
If you can give both, that would be very helpful.
Punit Makharia — Founder, Chairman and Managing Director
Okay. For Q4, the chemical business is INR85.42 crores, and fertilizer business is INR94.90 crores. If you take on a complete year basis, chemical business is INR305.88 crores, and fertilizer business is INR378.15 crores.
Harshil Solanki — Equitree Capital Advisors — Analyst
Okay, thank you, sir. Sir, our realizations have dropped quarter-on-quarter. So how are the realizations right now and what is the trend that we are seeing on realization?
Punit Makharia — Founder, Chairman and Managing Director
Sir, I would like to put this answer of this question in another phase, and I would like to address this question as follows. Definitely, our bottom line has dropped significantly, almost from 9% to 10% in the earlier period to almost 5.5% to 6%. Rather, I would say, in this present circumstances, the last year, looking at all the geopolitical situations and the demand situation and overall looking at the industry, not only our company, but other also companies available in the same sector or another sector also, you will see that most of the company’s business is almost flat. Wherein we have achieved a better realization — sorry, we have achieved a better — these volumes and the values.
Definitely, we have compromised a bit on the profitability. The whole idea for sacrificing of the profitability is to mainly maintain our cash mainly to maintain our inventories so that we doesn’t fall into any such kind of a trap whereas we regret our decisions — we regret at our decision at a future later date. We are behaving very conservatively in this period, and we are trying to retain our customers and — as well as trying to protect our inventory as well as cash. As far as the profitability in future times to concern, I think that can be ramped up when the market permits us when there is a bit of a demand into the market. I foresee that should be by the end of the quarter two, we should be able to recover out of this issue.
Harshil Solanki — Equitree Capital Advisors — Analyst
Got it, sir. Thank you. Sir, last question, you have INR94 crores of deposit line with you. So what’s the plan of deploying it?
Punit Makharia — Founder, Chairman and Managing Director
Sir, definitely, those plans would be there. But as of now, we are not going very aggressively on any kind of new capexes. Recently, we completed a capex of almost INR175 crores, including Unit 5 Madhya Bharat and some balancing equipment including the solar also. So this particular financial year, we are behaving and we are planning to go on a consolidation phase, mainly to establish all the — these activities of the company as well as to achieve the maximum productivity for the new capacities of what we have built in.
Looking at the current situation of the demand and other issues, which are connected to the business, we want to, first of all, look at how it impacts when it gets stabilized. So before doing any further major, this capex step, we are going for the consolidation phase. So therefore, as of now, with immediate effect, there are no such any plans for any major capex.
Harshil Solanki — Equitree Capital Advisors — Analyst
Okay, sir. And sir [Speech Overlap]
Punit Makharia — Founder, Chairman and Managing Director
And whenever it comes, definitely it will be informed to all the shareholders when the announcement is there.
Harshil Solanki — Equitree Capital Advisors — Analyst
Got it, sir. Thank you. And sir, last thing, if you can give any guidance for FY ’24, that would be helpful.
Punit Makharia — Founder, Chairman and Managing Director
Guidance for.
Harshil Solanki — Equitree Capital Advisors — Analyst
FY ’24.
Punit Makharia — Founder, Chairman and Managing Director
Sir, FY ’24, definitely, there would be a growth in terms of the revenues of the company because last year, we did INR684 crores. Before that, it was INR584 crores. So there is a jump of almost — this is close to 20%. We believe that in the similar year, we would maintain the growth trajectory of 20% to 25% in ’23, ’24 also.
Harshil Solanki — Equitree Capital Advisors — Analyst
And margins would be back to the normal levels or is there still [Speech Overlap]?
Punit Makharia — Founder, Chairman and Managing Director
To comment on that because there are many factors which are — this impacting the margins, but yes, we are trying our level best to improve the margins as much as possible, but it is not fair on my part to say something blanket or blindly on the part of the margin. But I personally believe that the margin should improve — should not go below than what we achieved in the last financial year.
Harshil Solanki — Equitree Capital Advisors — Analyst
Got it, sir. Thanks a lot for answering the questions.
Punit Makharia — Founder, Chairman and Managing Director
Thank you, sir.
.
Operator
Thank you. Our next question comes from Samarth Singh with TPF Capital. Please go ahead.
Samarth Singh — TPF Capital — Analyst
Good afternoon, sir. Thank you for the opportunity. Could you please give me the total capacity for our four fertilizer units?
Punit Makharia — Founder, Chairman and Managing Director
Sir, can you be — sir, can you please repeat? Your voice was cracking.
Samarth Singh — TPF Capital — Analyst
For our four fertilizer units, can you please give me the capacity now individually for each unit?
Punit Makharia — Founder, Chairman and Managing Director
Are you are seeing the capacity utilization?
Samarth Singh — TPF Capital — Analyst
Just the capacity, just the capacity.
Punit Makharia — Founder, Chairman and Managing Director
Sir, installed capacity for all the units in terms of the SSP is around 5 lakh tons a year. That is only covered in our PPT.
Samarth Singh — TPF Capital — Analyst
Sir, that is 1 lakh out of Pushkar, 1,32,000 out of Kisan, 1,32,000 out of Deewanganj, and 1,65,000 out of Meghnagar. Is that right?
Punit Makharia — Founder, Chairman and Managing Director
Right, sir. That’s right, sir.
Samarth Singh — TPF Capital — Analyst
Yeah. And for the year, what was the total sales from each of these units?
Punit Makharia — Founder, Chairman and Managing Director
Sir, out of this 5 lakh tons of capacity, you can just straightaway take out Deewanganj capacity of 132,000 tons, which is a rated capacity. But very honestly speaking, Deewanganj plant is a rated capacity of 132,000 tons. But this plant needs some balancing equipment addition. After that only — because as you’re aware that we just purchased this company from NCLT. So the way we got it is accepted — was accepted by us. On a rating capacity, this is 132,000 tons plant. But actually, this is not 132,000 tons of plant. This needs some balancing addition. So if out of 5 lakh tons, if you remove 132,000 tons, which we started in the Q4 last financial year, so it works out to be around 360-odd-thousand tons of the plant. Out of that, we have achieved some 207,000 tons. How much fertilizer we have done? Quantity. Okay. 222,000 tons we have achieved.
Samarth Singh — TPF Capital — Analyst
Right. Sir, I’m asking for, I think our [Speech Overlap]
Punit Makharia — Founder, Chairman and Managing Director
Sorry, sorry, sorry, sorry, my mistake. We have achieved 2,600 tons of the fertilizer business in last financial year.
Deepak Beriwala — Chief Financial Officer
206,000.
Punit Makharia — Founder, Chairman and Managing Director
Yeah.
Samarth Singh — TPF Capital — Analyst
The reason I’m asking you because I think our Kisan Phosphate plant runs at like almost 80%, 85% utilization, but the Pushkar and our Meghnagar plants run at a much lower utilization. And I’m not understanding why they’re not able to ramp up with the same utilization as Kisan Phosphates?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] And see, there is no issue in the plant. There is no problem in the plant, but it depends on many other factors [Foreign Speech]. If you see last to last year, Kisan did close to 80,000 tons, if I’m not wrong. Last year, Kisan did some 67,000, 68,000 tons. So there is a dip in the Kisan also. If you talk about ’21, ’22, Kisan did 81,241 tons. If you talk about ’22, ’23 last financial year, Kisan did 66,238 tons. Whereas if you talk about Madhya Bharat, Madhya Bharat did in ’21, ’22, 66,000 tons, Madhya Bharat did 73,000 tons in the last financial. So there is an increase in that. If you talk about Shree Pushkar, Shree Pushkar did 64,000 tons in ’21, ’22, and last financial year, it did close to 60,000 tons. So Madhya Bharat performed better. And now in this financial year, we’ll add up Deewanganj also. We believe that there should be at least 20%, 25% growth in fertilizer volumes in this financial year.
Samarth Singh — TPF Capital — Analyst
Okay, sir. And sir, this is individually area-wise you’re talking in terms of demand and supply or is it also just some time taking in getting our marketing and our distribution out?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] I’ll tell you, we cannot push the product of Kisan into Madhya Pradesh. At the same time, we cannot push the production of Madhya Bharat into Haryana, Punjab because transport plays a major role into the whole business. So it is not viable for us to move the material from one area to — one plant where it is situated, it needs to cater the area of that nearby particular that plant. At the maximum, this area we try to capture is around 300 kilometers in the circumference of our various plants. So whatever area, it gets covered into that because we have to take care about the transportation cost also. But I’m sure that after addition of Deewanganj in this particular financial year, we should be able to build better volumes in terms of the fertilizers.
Samarth Singh — TPF Capital — Analyst
That’s it, sir. Thank you very much.
Punit Makharia — Founder, Chairman and Managing Director
Thank you.
Operator
Thank you. [Operator Instructions] Our next question comes from Ankur Agrawal with RC Wealth Solutions Private Limited. Please go ahead.
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
Hello?
Punit Makharia — Founder, Chairman and Managing Director
Yeah, Mr. Agrawal.
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
Sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
Sir, [Foreign Speech] that is mainly because of the chemical business. Fertilizer business has fairly performed well. [Foreign Speech] because of the chemical, which is we all know very well [Foreign Speech]. But because of our business model, which is completely integrated and [Foreign Speech] stage backward integrated [Foreign Speech], zero-waste business model [Foreign Speech] because of that, we have been able to survive ourselves at a much better position than others. Then too also, we have done almost EBITDA levels of [Foreign Speech]. On a consol basis, we have been able to achieve EBITDA levels to — close to 10% levels, that is mainly because of the fertilizer business we’ve been able to do so.
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
Sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] we have to be completely positive-minded. We have to believe in our business. [Foreign Speech] It doesn’t make much difference. We have to see one basic point is that we have to be in business, we have to retain the volumes, we have to build the volumes, and we have to see that we manage our cash flows and inventory at an optimum best possible level. [Foreign Speech]
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech]
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Urea is a nitrogen component and we providing phosphatic — this content.
Ankur Agrawal — RC Wealth Solutions Private Limited — Analyst
Thank you, sir. Thank you.
Punit Makharia — Founder, Chairman and Managing Director
Thank you, sir.
Operator
Thank you. Our next question comes from Pawan with Compound 26 Capital. Please go ahead.
Pawan Kaul — Compound 26 Capital — Analyst
Hi. Can you hear me?
Operator
Pawan, could you please speak up a bit.
Pawan Kaul — Compound 26 Capital — Analyst
Yeah. Hello?
Punit Makharia — Founder, Chairman and Managing Director
Hi, Pawan. Please go ahead.
Pawan Kaul — Compound 26 Capital — Analyst
Hello? Hi.
Punit Makharia — Founder, Chairman and Managing Director
Yeah, Pawan. I can hear you. Please go ahead.
Pawan Kaul — Compound 26 Capital — Analyst
Okay. I missed one participant’s previous question that you might have answered. What is the capacity utilization right now for our chemical business and the fertilizer business right now?
Punit Makharia — Founder, Chairman and Managing Director
Sir, fertilizer business [Foreign Speech] if I take out the Deewanganj facility because that has just started recently in Q4, then I believe the 50% — sorry, around 60% should be the utilization in fertilizer business. And in chemical business, do we have figure in front of us right now, Deepak? [Speech Overlap] [Foreign Speech] Pawan, I don’t have the exact figure, we’ll submit figures through our IR to you. But in my opinion, it should be around 60% or so in the chemical business, but I’m not sure about it. Give us some time. We’ll give you the proper details on the subject.
Pawan Kaul — Compound 26 Capital — Analyst
Sure, no problem. And generally in kind of a normal cycle, what is the optimum capacity utilization that these plants can operate at?
Punit Makharia — Founder, Chairman and Managing Director
Sir, if I talk in terms of the value, like we did INR684 crores after expansion of Unit 5, and Unit 5 also, we got some, I think, one quarter in the last financial year for achievement. Now, all the capacities have been built up and have been properly established, quality and other things have been properly well-established and accepted. On the same production volumes and the facilities, capacities, what we have, I believe that now the company has the potential to cross INR1,000 crores in the same capacity.
Now, the question here is that, how do we achieve INR1,000 crores above and how — and when this can be achieved? I think in this financial year, we should closely touch close to somewhere INR900 crores in a similar kind of a situation, position, market demand and supply as we are into it. And probably, once we see a bit of the improvement, I think easily we can touch INR1,000 crores. I think this is what — was your question, if I’m not wrong?
Pawan Kaul — Compound 26 Capital — Analyst
Yes, yes. That’s fair. And sir, this INR1,000 crores assuming that, including Deewanganj capacity that is coming online, and things remaining as they are right now, right?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] because being — it’s a lean period going on, so we are keeping ourselves fully prepared that whenever the time and opportunity comes, we should be ready fully loaded our bullets into the gun. [Foreign Speech] I’m not talking something very positive or something great expectations. [Foreign Speech] This is what I want to convey. I hope that I’m able to convey what I’m thinking.
Pawan Kaul — Compound 26 Capital — Analyst
Yes, yes, you are. No, thank you for that. And in terms of — you mentioned something about the demand outlook [Foreign Speech] the first quarter is already halfway through and you’re expecting some kind of a turnaround by Q2. And when you’re speaking to your customers, what kind of demand projections or what kind of order feedback do they give? Is it like more of a spot-based feedback or is it they say [Foreign Speech] this is what our requirements would be, what kind of that lead time is what you get?
Punit Makharia — Founder, Chairman and Managing Director
Sir, [Foreign Speech] and it is my duty to share my thoughts on a very straightforward manner to whosever person who is connected with the company and whosever person who asked me a question, it is my moral duty to give what I’m thinking. [Foreign Speech] I don’t want to make any — or just cook up any answer. [Foreign Speech] we are looking this kind of a situation over the period of almost a year or so. Sir, [Foreign Speech] we are almost at the end of the dark tunnel now. And I believe any moment we should see the light of hope, and somewhere in Q2, [Foreign Speech].
Pawan Kaul — Compound 26 Capital — Analyst
Okay. Got it, sir. Thank you so much.
Operator
Thank you. Our next question comes from Forum Makim with JHP Securities. Please go ahead.
Forum Makim — JHP Securities — Analyst
Hello, sir, congratulations on great set of numbers Q-on-Q. [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech]
Forum Makim — JHP Securities — Analyst
Sir, honestly [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
I appreciate you have understood the industry. I appreciate that you have understood the atmosphere prevailing in present market conditions. Thank you very much for your comments. Please go ahead.
Forum Makim — JHP Securities — Analyst
Sir, [Foreign Speech].
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] [Speech Overlap]
Forum Makim — JHP Securities — Analyst
Sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] gross margin in the quarter four is 42%, and on a year-on year basis, it is 20 — sorry, 37% in comparison with FY ’22, it was 39%.
Forum Makim — JHP Securities — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] including all the sectors.
Forum Makim — JHP Securities — Analyst
Sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] but I have informed Mr. Deepak. He will give it to you through our IR.
Forum Makim — JHP Securities — Analyst
Okay, sir. Okay.
Punit Makharia — Founder, Chairman and Managing Director
Right now, it is not handy with us, but definitely we’ll give it to you.
Forum Makim — JHP Securities — Analyst
So, sir [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Hello?
Forum Makim — JHP Securities — Analyst
[Foreign Speech], right?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] but it is difficult for me to comment at this point of time, until and unless I have the proper numbers in front of me, which Mr. Deepak will pull out from the system and we will share it to you, then we can have a detailed discussion over the matter on this subject. Because right now, [Foreign Speech] so it would be difficult for me to answer this question [Foreign Speech] honestly, if you ask me.
Forum Makim — JHP Securities — Analyst
Right, right. Sir, [Foreign Speech], right?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] particular ongoing Q1 of this financial year [Foreign Speech] because Q1 — almost half of the Q1 has already gone. [Foreign Speech] at the same time [Foreign Speech] overall [Foreign Speech] everybody knows about it. I think you guys know better than us because [Foreign Speech]. So our area of visibility is limited in comparison with your area of visibility. So overall situation, [Foreign Speech] and in a similar manner, we are behaving conservatively. We are ready to compromise on our margins, and we are not — we don’t want any such kind of a situation that we see ourselves that we have landed into this difficult soup, which becomes difficult for us to get out of it. Sometimes business [Foreign Speech] not taking a bold decision is also a good decision.
Forum Makim — JHP Securities — Analyst
Right, right, sir. Sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Q4 [Foreign Speech] Unit 5 [Foreign Speech] INR16.84 crores [Foreign Speech] which is only in Q4.
Forum Makim — JHP Securities — Analyst
Okay, sir.
Punit Makharia — Founder, Chairman and Managing Director
Unit 5 [Foreign Speech] that I have already discussed in my previous calls also.
Forum Makim — JHP Securities — Analyst
Sir, [Foreign Speech] [Speech Overlap]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] let the time come.
Forum Makim — JHP Securities — Analyst
Okay, sir. Sir, [Foreign Speech] sulfur derivative chemistry plan, [Foreign Speech], right?
Punit Makharia — Founder, Chairman and Managing Director
Unit 5 [Foreign Speech] We’ll be producing that particular product raw material into that, which we existingly consume in our Unit 5 also as well as in our Unit 1 also. Definitely, intentionally, we are not disclosing the name of the product because of the competitions. Because see, this is a public platform where we are talking and we don’t want to disclose the product to avoid our competitors know our next move.
Forum Makim — JHP Securities — Analyst
Right, sir. Sir, just one last question. [Foreign Speech] Unit 5, sir, [Foreign Speech] INR200 crores, INR250 crores of revenue [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech]
Forum Makim — JHP Securities — Analyst
[Foreign Speech]. Sir, [Foreign Speech] INR900 crores [Foreign Speech] next year, [Foreign Speech]. So are you like being conservative or?
Punit Makharia — Founder, Chairman and Managing Director
I would like to behave more conservatively, if I’m permitted to do so, but I don’t see any area or any place going down below the INR900 crores in spite of my all conservative formulas.
Forum Makim — JHP Securities — Analyst
Okay, sir. Okay, thank you so much, and all the best.
Punit Makharia — Founder, Chairman and Managing Director
Thank you very much.
Operator
Thank you. Our next question comes from Sanjeev Kumar Damani with SKD Consulting. Please go ahead.
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech], sir. Am I audible?
Punit Makharia — Founder, Chairman and Managing Director
Yeah, Damani ji. Please go ahead.
Sanjeev Kumar Damani — SKD Consulting — Analyst
Sir, my first question is regarding subsidies that are to be received by us if at all from government. So is it all clear or there are delays in realizing subsidies?
Punit Makharia — Founder, Chairman and Managing Director
Sir, [Foreign Speech] At any given point of time, X quantity of the production is always unsold on the cost or [Foreign Speech] Damani ji.
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech]
Sanjeev Kumar Damani — SKD Consulting — Analyst
Okay, okay. Got it, sir. Got it.
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Damani ji..
Sanjeev Kumar Damani — SKD Consulting — Analyst
Okay. [Foreign Speech] Now, coming to dicalcium phosphate, sir, [Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech]
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech] approximate realizable sales [Foreign Speech], sir, sales value?
Punit Makharia — Founder, Chairman and Managing Director
Sir, [Foreign Speech]
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Damani ji.
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech]
Punit Makharia — Founder, Chairman and Managing Director
Sir, Meghnagar, Madhya Pradesh [Foreign Speech] that we buy from the local market. [Foreign Speech], sir.
Sanjeev Kumar Damani — SKD Consulting — Analyst
[Foreign Speech] Thank you very much, and all the very best.
Punit Makharia — Founder, Chairman and Managing Director
Thank you, sir. Thank you.
Operator
Thank you. Our next question comes from Varun Sharma, an investor. Please go ahead.
Unidentified Participant — — Analyst
Hello?
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech], sir. Yes, sir. Please go ahead.
Unidentified Participant — — Analyst
Sir, thanks for the opportunity.
Punit Makharia — Founder, Chairman and Managing Director
Sir, you have to be a bit louder, your voice is not clear to us. Please go ahead.
Unidentified Participant — — Analyst
Yes, sir. Thanks for the opportunity, sir.
Punit Makharia — Founder, Chairman and Managing Director
Thank you, sir.
Unidentified Participant — — Analyst
Sir, first question is that, can you give the guidance for the revenues for the next year?
Punit Makharia — Founder, Chairman and Managing Director
Sir, we have just discussed that particular question over the last two questions. I think you were on the line. You would have been listening to all the communications and various questions.
Unidentified Participant — — Analyst
Yes, sir. Yes, sir. And one — and I have one question as an individual shareholder. The share price of our company is continuously falling. We want that some promoters should buy from the open market so that it gives confidence to investors.
Punit Makharia — Founder, Chairman and Managing Director
[Foreign Speech] Sharma ji, my job is to perform to — [Foreign Speech] I think, sir, that is not a question to be asked [Foreign Speech] I would you request you to please ask. Hello?
Operator
Dear management members, the line of Varun Sharma has left the question queue. Ladies and gentlemen, in the interest of time, that was the last question. And I would now like to hand the conference over to Mr. Punit Makharia for closing comments.
Punit Makharia — Founder, Chairman and Managing Director
Thank you, everyone. I would like to thank all for joining this call. I hope we have been able to respond to all your queries adequately. If you have any further questions, we request you to please get in touch with Orient Capital, our Investor Relations advisor. Thank you very much, friends, and take care. Bye.
Operator
[Operator Closing Remarks]