
Gujarat Mineral Development Corporation Ltd
NSE:GMDCLTD

Gujarat Mineral Development Corporation Ltd
Gujarat Mineral Development Corporation Ltd. (GMDC) has carved a niche for itself as a prominent player in the mineral and mining sector of India, riding the waves of economic and industrial transformation. Established in 1963, GMDC set out with a vision to develop the mineral resources of the state of Gujarat, then untapped and waiting to be harnessed. Over the decades, the company has become a cornerstone of Gujarat's industrial landscape, primarily focusing on the production of lignite, which is a key component for power generation and not surprisingly, the mainstay of its revenue stream. Lignite mining operations spread across the state form the backbone of GMDC's business model, creating a formidable supply chain that caters to diverse industries, including textiles, chemicals, and ceramics.
Yet, GMDC's narrative isn't solely dictated by lignite. The company has strategically diversified its portfolio to include other minerals such as bauxite, fluorspar, and manganese. This diversification not only fortifies its revenue model against the volatility of single-mineral dependency but also underscores GMDC's adaptability in meeting varied industrial demands. The organization enriches its mining expertise with a venture into power generation, tapping into wind and solar energy projects, a testament to its forward-thinking strategy and commitment to sustainability. By leveraging its rich legacy in mining, alongside a progressive vision for renewable energy, GMDC continues to play a pivotal role in bolstering Gujarat’s industrial growth while embracing a future-oriented business ethos.
Earnings Calls
In Q4, Coromandel International showcased impressive growth with a total income of INR 5,114 crores, up 28% year-over-year, driven by strong demand across its sectors. The company anticipates high double-digit revenue growth for FY '26, bolstered by new product introductions and an expanding retail footprint. A final dividend of INR 9 per share was declared, with INR 3 as a special one-time payout. Notably, Coromandel is set to enhance its position in the crop protection sector through its acquisition of NACL Industries, which is expected to be finalized by Q2 FY '26.
Ladies and gentlemen, good day, and welcome to Coromandel International Limited Q4 FY '25 Earnings Call hosted by Nirmal Bang Institutional Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. S. Ramesh. Thank you, and over to you, sir.
Good afternoon, ladies and gentlemen. On behalf of Nirmal Bang Equities, I have great pleasure in inviting all of you for the 4Q FY '25 earnings call with the management of Coromandel International. The company is represented by Mr. Sankarasubramanian, MD and CEO; Dr. Raghuram Devarakonda, Executive Director, CPC, Bio and Retail; Mrs. Jayashree Satagopan, President Corporate; and the new CFO, Mr. Deepak Natarajan.
So let me hand over the call to Sankar for his opening remarks. Over to you, sir.
Good afternoon, everyone, and thanks, Ramesh, for arranging this call. Let me give a brief on the business environment experienced during the year, and then we'll talk about the company's performance followed by Q&A session.
India experienced the positive agriculture environment during '24, '25 aided by above normal monsoons and higher reservoir levels leading to higher crop sowings. As per the latest estimate for '24, '25, the food grain production is estimated at 331 million tonnes, in case of close to 5% over the last year. As per national strategical office, the gross value added in agriculture and allied activities for the financial year '24, '25 is projected to grow by 4.6% as against 2.7% last year, and this reflects a positive turnaround in agri sector. With a good monsoon and during rabi, reservoir levels on date is much comfortable at 36% compared to 30% last year with South, Central and West regions well above last year level.
Going forward, the weather forecasting agencies like Skymet and IMD have estimated normal to above normal monsoon for the upcoming kharif season. Our key operating markets are expected to receive good rains. IMD has also issued updated forecast providing region-wise view in the last week of May. Summer sowings has started in a passive note. As on 18th April, the crop sowings stood at 7 hectares compared to 6 hectares last year.
Coming to the policy front, irrigation infrastructure has been making a lot of progress. The area under issued irrigation has increased from 45% in 2010 to 55% in 2021, resulting in increased cropping intensity. In its budget, Andhra state has committed an outlay of INR 18,000 crores for various irrigation projects, which includes Pallavaram, to be implemented in '25, '26. Similarly, Telangana state also got the clearance for integrated Sitarama Lift Irrigation Project and multipurpose project, which is expected to bring close to 8 lakh acres under assured irrigation.
Direct income schemes like PM-Kisan are gaining good traction. Andhra Pradesh government has recently announced implementation of another suitable scheme, and this proposes a deposit of INR 20,000 annually, including the PM-Kisan scheme of INR 6,000 into farmers' account. As you all know, Telangana has also introduced the Rythu Bharosa scheme, and it intends to provide cash transfer of INR 12,000 per acre annually.
All this augurs well to increasing the disposal income in the hands of the farmers. And government has announced nutrient-based subsidy rates for '25-'26 with increase in P rate by almost 42%, in line with increasing in global DAP prices and increase in other input raw material prices. The cabinet has also extended one-time special package of INR 3,500 per metric tonne on DAP beyond the NBS subsidy rate for a period up to 30th September '25 and also given additional compensation to make DAP imports viable.
During the last year, most of the fertilizer raw material prices remained broadly stable, slightly at a higher level. Recently, sulphur sulphuric acid prices went up very high as a result of demand from China, Indonesia and Morocco. The phosphoric acid price for Q1 has been fixed at $1,153, reflecting an increase of $98 per tonne over the previous quarter. This is perfectly in line with the significant increase in DAP price witnessed during this period.
During the year, domestic phosphatic industry increased its production by 9% to 15 million tonnes. There has been a significant shift in the consumption mix with NPK sales moving up by 28% to 14 million tonnes and replacing the DAP shortfall, especially in Central and Northern markets despite the lower MRP of DAP.
Looking at the whole year number, the share of NPK has moved up to 60% as compared to 15% in the last year. DAP supplies were impacted due to lower supplies from China and also MRP restrictions affecting the viability of imports for the domestic as well as import of DAP.
During the year, the crop protection industry experienced reasonably stable volumes. And going forward into 2025, market is expected to be relatively positive with stabilizing agrochemical prices, improved inventory situation and favorable weather conditions in Europe, Asia and Brazil. Some of our key molecules have received good interest from the market, and we do expect situation to further improve in the coming periods.
Coming to company's performance for the year, our manufacturing plants undertook capacity debottlenecking to deliver highest ever volume of 33.3 lakh tonnes with a high level of safety and environmental management. Our Ennore unit safely resumed the phosphoric acid and sulphuric acid plants after obtaining all necessary statutory clearances. And company's phosphatic production, including Ennore, went up by 6% during the year.
The major backward integration projects for phosphoric, sulphuric acid plant at Kakinada are on track and is expected to be commissioned in the current financial year '25-'26. We have also initiated work on the brownfield granulation train at Kakinada, which is expected to come on stream in the year '26, '27. Company has obtained all requisite approvals from Government of Senegal and has increased the shareholding in the mining company, BMCC to 54%, and now BMCC has become subsidiary of Coromandel. It has stabilized the production through setting up a fixed processing plant and the throughput has significantly improved over the earlier quarters, resulting in the business achieving operational profitability in the last 2 quarters.
Going forward, we do expect consistent supply of rock phosphate from BMCC, which can meet 1/3 of our total rock requirements for Coromandel. Company has also signed a long-term contract with Ma'aden, one of the world's largest producers of phosphatic fertilizers for the long-term supply of DAP and NP/NPK fertilizers.
On the marketing side, Coromandel registered record sale of phosphatic fertilizers and record consumption in the year '24-'25, increasing the volume by 13%. The share of unique grade stands at 35%. On a consumption basis, the market share for Coromandel has improved to 18% from 15% over last year. As part of its market diversification approach, company has forayed into North and Central markets and has received good response, making Coromandel a pan-India player in fertilizers.
On the SSP front, our sales volumes for the year were up by 18%, with major growth coming from differentiated variants like Groplus and Urea SSP. Coromandel's drone spray services delivered through promo drive initiative and retail centers achieved significant scale, covering close to 2.2 lakh acres and is witnessing strong adoption by the farming community.
Specialty business, mainly comprising of water-soluble fertilizers, secondary micronutrients and organic fertilizers had a good year. The volumes have been consistently growing year after year. The business also introduced cross-specific and state-specific products to expand its portfolio. The business commissioned a sulphur plant to double its capacity. It's also evaluating creating water-soluble fertilizer capacity by leveraging its strengths in phosphates.
Nano DAP business continued its focus to promote awareness of the product. During the year, the company has marketed 26 lakh bottles, maintaining a market share of 33%, achieving close to 80% of liquidation. Business is also seriously evaluating the export opportunities of Nano DAP across various countries.
Coming to Crop Protection and Bio business. The revenue from Crop Protection business were up by 7% to INR 2,637 crores, led by higher sales in formulation, which has grown by 16%, export grown by 5% and bio grown by 9%. EBIT margins are up by 25% to INR 363 crores as improved demand for its key molecules in domestic and export markets and performance of new products and captive molecules enhanced the profitability for the business. Share from sale of new products in formulations is at 21%, up from 15% last year.
In Bioproducts business, despite a slowdown in accelerating export markets, the business achieved volume and sales growth. As part of its diversification strategy, it expanded into non-acid [indiscernible] plant extracts and launched VAM-based biofertilizers. The business has also built in-house fermentation and microbial R&D capabilities and plans to launch microbial crop protection products in '25, '26.
During the year, the Coromandel signed a definitive agreement to acquire a controlling stake in NACL Industries. The proposed acquisition will position Coromandel as one of the leading players in the Indian crop protection sector with a wide range of technicals and pan-India presence in domestic formulation business. This will help in expanding Coromandel's scale, accelerate its entry into contract manufacturing business, fast tracking new product commercialization, expanding its product portfolio. We expect the transaction closure and regulatory approvals to come through by Q2 of this year.
Coming to Retail. During the year, the Retail business of the company expanded its footprint by adding another 130 [ My Gromor ] centers in Andhra, Telangana, Karnataka. And also, we forwarded into new markets like Maharashtra and Tamil Nadu. We are expanding our digital presence through My Gromor app and other social media platforms. With 99% of the stores profitable, we are looking at expanding our presence in coming years.
With that, I will now hand over to Jayashree to take you through the company financial performance. Over to you, Jayashree.
Thanks, Sankar, and good afternoon, everyone. Let me quickly take you through the company's financial performance. In terms of the turnover, the company recorded a consolidated total income of INR 5,114 crores during the quarter and INR 24,444 crores for the full year vis-a-vis the corresponding period of INR 3,996 crores for the quarter and INR 22,290 crores for the full year. This registers a growth of 28% for the quarter and 10% for the full year. The increase in revenues has been mainly on account of growth in volumes registered across all our businesses.
The breakup of subsidy and non-subsidy share of business stands at 79% and 21% during the last quarter. Previous year, the percentages were 78% and 22%, respectively. For the full year, it's 82% and 18%. For the corresponding period in the last year, it is 83% and 17%.
As far as the profitability is concerned, the consolidated EBITDA for the quarter was INR 426 crores against INR 273 crores during the last year. For the full year, it was INR 2,628 crores against INR 2,399 crores during the last year. The increase in EBITDA is mainly due to volume growth across the businesses and margin expansion in our CPC business.
Subsidy, non-subsidy share stands at 67% and 33% during the quarter. During the previous year, it was 53% and 47%. For the full year, the breakup is 70% and 30%. Corresponding figures for the previous year is 72% and 28%.
The Board had approved a final dividend of INR 9 per share. This includes normal final dividend of INR 6 per share and a one-time special dividend of INR 3 per share. On subsidy, during the quarter, the company received INR 2,190 crores towards subsidy claims. Comparative figures in the last year was INR 2,165 crores. For the full year, subsidy received is INR 8,082 crores. Previous year, it was INR 9,198 crores. The government has been prompt in clearing the subsidy dues. As of today, we have received our subsidy claims till third week of March. Subsidy outstanding as on 31st March 2025 was at INR 1,654 crores. During the previous year, it was INR 1,377 crores.
As far as ForEx is concerned, you would have seen that the rupee had been pretty volatile during the quarter. It traded in a broad range of INR 85.39 to INR 87.71. Coromandel continued to follow a conservative approach and has hedged most of its exposures.
I have with me Deepak Natarajan, who has recently joined us as the CFO in Coromandel. And let me hand over the call to him for a brief introduction. Thank you all for your interest in Coromandel and joining us for the call today. Deepak, over to you.
Thank you, Jayashree. Good afternoon, everyone. Pleasure connecting with you all. Myself, Deepak Natarajan -- come here with about 25 years of work experience. Last 5 years, I used to work for Tata Projects Limited and then prior to that, with GE for 10 years and Cisco for 6 years. So that's my brief background. Look forward to connecting with you going forward in the subsequent quarters in more detail. Thank you.
With that, we can open the session for questions, and we look forward to the interactions.
Before that, I would now like to hand the conference over to Mr. S. Ramesh. Thank you, and over to you, sir.
Hello -- let me, on behalf of Nirmal Bang and myself, first thank Jayashree for being very receptive to the investor questions and increase the level of disclosures in the company. And let me also take this opportunity to welcome Deepak Natarajan. Welcome, Deepak. Pleasure to have you on the call and look forward to continuing our association.
So let me now hand over the call back to the company and moderator, you can announce the Q&A.
[Operator Instructions] The first question is from the line of Prashant Biyani from Elara Capital.
Congrats on good set of numbers. On the NACL, how do we plan to turn around NACL? And by when can we see NACL aligning with our Crop Protection division margins?
See, right now, we are waiting for the regulatory approvals, which may take another 2, 3 months. And post which we should take stock of what are the opportunities available. But as we mentioned earlier, we need to put the process back in procurement, which will improve the EBITDA margin by significantly working on the procurement efficiencies. The funding is coming through for them so that they will be able to increase their level of production and operation. And some of the molecules what they're dealing with also seeing some price traction in the marketplace.
So our aim would be to continue what they have been doing well and try and see how do we restore the margins what they have been making 2 years before, before we look at introducing new molecules and new products. They do have spare capacity, which can be leveraged. They have R&D setup, which can again be synergized. And there are quite a few molecules which are completely complementary to what we have. So we should be able to tap the export market as well.
Sure. Sir, we also had a plan of investing INR 1,000 crores in crop protection spec chem CDMO. Now post this acquisition, do we see that INR 1,000 crore CapEx being trimmed? And if yes, by how much?
No. I won't say it will be trimmed. It will be moderated because the active ingredient capacity creation can be slowed down since we have spare capacities, which can be leveraged. So that helps us in 2 ways, reduce our cash output at the same time to go to market faster because the time it takes to set up the facility can be shortened considerably. We may have to do the retrofitting of existing facilities.
But in terms of other investments on CDMO and specialty chemicals, there are new business opportunities, which may be depending on the new molecules, chemistries, what we are signing up, may require that investment. So that may -- we are evaluating the products in which we need to get in specialty chemicals, and we are also in discussion with various players and CDMO opportunities. So that investment will be more linked to the calendar of new products signed up with the parties rather than NACL being the reason. So it's a slight deferment in the investment plan, but we are on the track.
Right. And sir, regarding our agreement with Ma'aden, annually, how much fertilizers do we plan to import with them and in total as?
Right now, the contract is for 300,000, and we can potentially go up to 0.5 million tonne. Our aim would be to see how much we can enhance our DAP imports from Ma'aden, the long part of a long period so that, that will help us to maximize our NPK production in our existing facilities.
This 3 lakh is per annum?
Yes.
Okay. And sir, before I join the queue, last question, how is our CapEx plan going on? And how much do we plan to invest this year on various projects?
The projects what we announced last year, phosphoric acid, sulphuric acid is progressing well. 45% of the project has been completed both on PA and SA, and we are on track to commission this during last quarter of the current financial year. As part of granulation train, we have commenced the project in January, and that will take 18 to 20 months to complete. That will come on stream by '26, '27.
Besides that, in the next year, we'll be looking to expand our capacities on active ingredients at Dahej for CPC. And we are also looking to debottleneck some of our facilities, both in Kakinada and Vizag to increase the fertilizer volumes and other normal sustainable CapEx we are looking at.
So whatever annual sustainable CapEx recommends, that will continue. And we'll also look at any inorganic opportunities as and when opportunity arises, complementary to our product portfolio, we may look at it.
[Operator Instructions] The next question is from the line of Rahul Jain from Clearwater Partner.
Congratulations on a good set of numbers. I just had a follow-up on NACL. So as already told by you that the approvals will come in Q2 and only after that, you will decide. But then if I take a 10,000 feet view, say, 3 years from now, where do you actually see NACL? So before acquisition, you must have set some targets. So what -- where do you see NACL, say, 3 years from now?
NACL is to get back in terms of the capacity utilization. They have invested in Dahej facility, which is not operational fully. So our aim would be to see how we can get those new molecules in place and operate those active ingredients and bring the capacities of the AI at full level.
And second segment is the formulation, domestic formulation. They have strong brands, and we should try and see how best we can grow the formulation business and change the product...
At full capacity, sir, what could be the potential top line that this company could generate based on current pricing scenario?
Too early to comment on it, and they should at least minimum go back to the numbers what they have achieved 2 years before and without considering any new add-ons.
Okay. I had one more follow-up on this acquisition itself. So Coromandel today has some INR 2,500 crores to INR 2,600 crores of Crop Protection business. NACL as it is does some INR 1,450-odd crores. And the ballpark calculation, if I do then at full potential, they could do some INR 2,500-odd crores of top line. Is there any plan of creating a separate entity where the Crop Protection division of Coromandel and NACL merge and that becomes your crop protection entity and the Coromandel becomes a pure-play fertilizer entity. Any thoughts on this?
No, there is no such plan at this point of time. Currently, we are trying to run NACL as such, and we will achieve the targets what we set out ourselves at the time of acquisition. And Coromandel, the SBU CPC Crop Protection business has its own set of product pipeline and strategic plans to expand capacities. Both will leverage the synergies, but we'll continue to operate this way. We'll have to see at appropriate time, whatever the best for the investors and shareholders, we'll do that.
The next question is from the line of Ankur from Axis.
So first question on the Crop Protection side. So one, if you can highlight what has been the volumetric growth for the full financial year? And just a follow-up on that, what could be the growth outlook here given the price deflation trend that we have seen historically and hopefully settled now and your outlook on the margin side?
See, we operate in different segments, very difficult to put one number to the volume part of it because, a, we measure in volume. And in the case of domestic formulation, we track in rupees crores, putting a number in terms of the volume may not be meaningful. I would suggest we should look at high-end double-digit growth for the next year across these 3 segments, domestic formulation, domestic B2C and exports market.
Outlook is quite positive and facing on the success we had on new products introduction in the current year, we have a pipeline of products coming in next year as well, which will continue to take our share of new products in the overall portfolio and will improve the margins. So all I can say is our turnover for the next year can be -- revenue can be on the high double-digit side, supported by healthy profitability margins with a changing portfolio towards high-margin products.
Sure, sir. Okay. Fair enough. And just secondly, on the fertilizer side, given the new capacity coming in probably by FY '27, what is the time line that we are looking at for a full ramp-up over here given the capacity expansion as well as the backward integration? And again, your earlier guidance of 40-odd percent jump in EBITDA margin on the fertilizer side, what time line can we think of over there?
In the case of intermediate capacities, phosphoric acid, sulphuric acid, which will get commissioned in the fourth quarter of the current year. we can expect the full play to come in, in the next year '26, '27 because we'll be stabilizing our production in the fourth quarter of the current year, which means next year will be the full year of operation where we will always achieve the rated capacity. That has been our track record. Our aim would be to do that as well for phosphoric acid and sulphuric acid plant.
In the case of granulation plant, the plant will get commissioned in third or fourth quarter of '26, '27. For marketing side, we have taken already steps to create seed marketing in the Northern markets to absorb the additional volumes. And also, we are expanding our retail footprint across various states. So there will not be any challenge in absorbing the additional volume. Our aim would be to do it in the first full year of operation, the full expanded capacity. As India being a net importer of fertilizer and we being a strong player in phosphatic signals, we don't feel any challenge in operating plant at the full capacity in the first full year of operations.
Congratulations, Mr. Deepak for joining in, and thanks, Jayashree ma'am for your support over the years.
The next question is from the line of Naushad Chaudhary from Aditya Birla.
Congrats on a good set of numbers. First one on the Nano DAP, sir, I just wanted to check how is the traction there? Are we experiencing repeat buying here? And if things goes as we have expected from this product, can this travel to the world, can this product travel? And if we succeed, how -- what do you think how big can this product be for us in next 3, 4 years?
Thank you. Thank you for the good question. I'm very confident that this product definitely will scale up in the coming years. We have been very, very systematic in our market approach, and we are not pushing the product. We are generating a pull. We are working with the various ICR institutes across the country and going through the detailed evaluation on various crops. And based on the response, we are very confident that partially this can replace DAP.
Every acre, as I mentioned earlier, instead of 2 bags, 1 bag can be cut out and Nano DAP 1 liter bottle can be used. And we find that the response to the crop has been pretty good in the crops with high full age. And during this year, we have sold 26 lakh bottles, and we have seen 80% to 90% of liquidation, which is very creditable. And we are very confident going into next year, we'll be able to improve the volumes.
And thanks to our retail stores, we are able to communicate with the farming community, explaining the importance of providing the eco-friendly phosphate fertilizers has been going to be a game changer for the industry as a whole. And if everything happens in the way we expect, we do expect replacement of 2 million tonnes of DAP in another 2, 3 years' time. This has been our initial estimate as well. And we also find that there is a positive response from various countries for this product, and we have taken Government of India approval to export this as well.
So we have capability to increase the capacity in a modular way, and we should be able to ramp up the volume with the quick need. I'm personally confident that this can be one of the significant business unit for Coromandel in the coming years.
Interesting. Second, on the Retail side of business, we have indicated we have added 100 more stores and we have indicated to almost, I think, double it in the next 2, 3 years. If you can help us understand in terms of overall economics, how much CapEx and working capital required per store? What is the current financial status of all 900 put together and how it should look like in the next 2, 3 years?
The Retail has been a pretty good growth story for us. In fact, more than 90%, 95% of the retail stores, 820 plus are in profit zone now. We have added another 130. Based on our learning curve, now we are able to get the breakeven point in a shorter time frame of 6 months. As we understand the portfolio, we understand the customer preferences and the white spaces, we could reach the breakeven point much faster.
So -- and also, we understand how to reach the customer, how to introduce new products. I think retail overall has become very profitable, and it's a multi-label store. It doesn't depend on our own products. And here, again, we educate the farmers on what is the right set of products to operate to increase their productivity. And also, we provide services, and we have seen that drone spraying has also been received very well by the farming community. And wherever we do drone spraying, there is a spike in crop protection offtake. So we are pretty sure that retail is the way to go forward.
In terms of investment, as of now, we are only on a rental basis. We don't own the stores. And working capital also, considering the fully generates, I think we are able to leverage better on the sourcing part. And currently, we are running the business on a negative working capital. And there may be initial challenge in absorbing the fixed cost as we ramp up the stores, but I'm sure for the next 2, 3 years, we are very confident that we should be able to increase the footprint to 3x of the numbers what we have. And this is the way to go forward, and we'll put all our efforts and leverage on the digital analytics part to ensure we get this right from the day 1 onwards.
The next question is from the line of Viraj from SiMPL.
Just a couple of questions. First on the NACL part. Just wanted to get your thoughts on what attracted you towards the company other than the fact that it's underutilized in terms of capacity utilization. But broadly in terms of the portfolio mix of the business per se, what is that attracted you the most?
And just an extension of that is, if I were to look at our experience in terms of Sabero acquisition and our own journey in terms of crop protection over the last 8, 10 years, what are the similarities or differences in terms of business or the acquisition you see between NACL and the other 2?
See, NACL is, again, more or less similar to our business model, focuses mainly on genetic space. But the important aspect is they have been the supplier of choice for the major MNCs for many years. In fact, what we call it as a modern time CDMO, most of those manufacturing capabilities were set up by NACL much earlier. So to the extent the plant facilities and the processes have been set up in such a way to produce high-quality products. That is something which is very critical and useful for a business like AI manufacturing.
Besides that, they have a good set of enable accredited R&D facility, and they have been working on complementary set of chemistries to what we are working on, including the latest fluorination chemistry, which will be helpful as we go into future molecules, which are based on fluorination chemistry.
And also, they have spare capacities and they have also built very strong brands in Indian market. India is a large market for domestic formulation business and they have built brands of largest size, and they operate in key markets, which are again complementary to our markets. So we see a lot of cross learning between both the entities, which will help to grow the business overall. Comparing this to Sabero, Sabero is more of an AI play in the export market, whereas Nagarajuna has got all the 3 segments, domestic B2B, exports and sort of a CDMO type of operations.
So I think these 2 are completely different. Only challenge would be being in a generic space, margin structure may not be as high as what we tend to expect with the new chemistries. That is a change we can bring about.
I hope -- Yes. That's very helpful. Just 2 questions. One is on the NACL. If you look at the 10-year history, the operating margins has been around 8% to 9%. And this is despite a very sizable domestic B2C business. So if I look at other generic players with AI, even they earn upwards of low-teen margins. So just trying to understand where is the drag in terms of the margin profile in that business?
And second question is for, say, specialty nutrients and the retail part for Coromandel. We have been kind of leaders in specialty nutrients...
Sorry to interrupt. Could you move a bit away from your phone, you're very static.
Sure. Is it better?
A bit more, please?
Am I audible?
Yes, yes, you are. You can continue.
Yes. Second part of the question is more on the scalability and profitability, especially for the retail business and specialty nutrition. If you can just give some color and the part to the aspiration we would have in those 2 segments?
Yes, I'll take the second question first. Specialty is a highly profitable business, but involves a lot of concept selling. The volume scale-up will be steady and slow. And we have been working on it for the period and various products in the product portfolio are developed in-house based on our R&D. So their EBITDA margin is also quite healthy between 18% to 20%, and we have been growing consistently the top line in the last few years at 15% to 20%. And we are sure we'll continue to grow that. And that is also a focus area for us -- so they are outside the subsidy gambit, and it's a way to go forward in terms of introducing the more nutrient efficient products to the farming community.
So [indiscernible] we'll be focusing on creating some backward integration on the key raw materials, which are currently imported. We are looking to capture the value chain in [ S&D ] and sustain the volume growth. Many of the key raw materials are currently being imported from China. So we're looking to create capacities to ensure that we have a steady supply chain as well as we can increase the margin for this business.
On the Retail, as I mentioned, we are doing well. We will continue to do well. And this has not been exploited fully according to us. We have created the funnel through which many products can come in. As the base SBUs like CPC and specialty nutrients and bio business start introducing new products, our aim would be to produce those products through retail, which are high margin, which will also help in retail to breakeven much faster. And it is profitable now. And I'm sure with the increased centers, increased revenue, profit margin should grow for Retail as well.
Coming to your first question in terms of the NACL margin, it operates in the generic space with the way the AI prices have behaved in the last few years, there has been significant contraction in AI margins. So that is actually impacting the overall margin portfolio, even though the formulation bit commands higher margin. So weighted average full margin is much lesser due to surplus the AI prices. We do expect in the coming years, the active ingredient prices should improve, which in turn can improve the margin structure for NACL.
NACL used to make margins in the range of 10% to 11% in the past, which came down to 4%, 5%. Our aim would be to first restore the margin back to 10% to 11%, get the capacities back on track and try and see how do we build this margin by adding new products in the portfolio. That will be our approach.
The next question is from the line of Naushad Chaudhary from Aditya Birla.
2 clarifications, sir. First, on the jump in the sulphuric acid prices, do you think the real impact has not yet come because recently, also it has jumped substantially. The subsequent quarter should see a major benefit of that? Or what your sense on this thing, sir?
See, sulphur prices have really shot up. That has played out in the Q4. In fact, you can see some slight compression in the margin. And -- but you also realize that phosphoric acid prices also has gone up to that extent. So the value addition on phosphoric acid remains the same to the extent of sulphur prices, the phosphate price has gone up.
Now the end product prices on NPK fertilizers will get corrected as we move forward besides DAP to absorb this price increase. But having said that, there are also other soft spots like ammonia where the prices which are prevailing $400 have come down to $330. These plus and minuses do happen. And overall, I think with the announced subsidy rates, the business is reasonably confident of achieving the margins what it set out every year.
Okay. And on the manufactured volume growth, this year, I think we have optimally utilized the capacity which we have. For next year, do we think we will have capacity constraint on the manufacturing side of volume growth for FY '26, though '27, we are coming up with Kakinada? But '26, do you think the trading portion would be higher because of the capacity constraint?
2 things we need to note. One is we are debottlenecking our Kakinada plant, and that benefit is to flow in for the full year next year. And we also keep tweaking the product mix to increase the throughput. The throughput is depending on the NPKs, what we produce. So that can also aid us in increasing the volume.
And Ennore granulation facility is still not back on track. And we are working with the various regulators to see how best we can come back on track on the Ennore granulation facility. So the debottlenecking of Kakinada, Ennore coming back on track and the product mix and the imported NP/NPKs to do the seed marketing in North should provide required impetus on the volumes so that when the new capacity comes in, we are able to sell the volume in the first year.
The next question is from the line of Vignesh Iyer from Sequent Investments.
Sir, there are a few unit prices I wanted to know for the quarter 4. Firstly, on the phos acid prices, if you could share.
If you could be a bit clear. Could you move a bit far from phone?
So what I was asking is, basically, I wanted to know prices of few chemicals. That is what is the price that was there for phosphoric acid in quarter 4, firstly?
Secondly, I wanted to know how has the price for sulphur panned out from quarter 3 to quarter 4 versus sulphuric acid from quarter 3 to quarter 4? If you could give us the data per tonne?
PA price, as I mentioned earlier, it has moved up from $1,055 to $1,153, $98. Sulphur moved up by almost $120. What it used to be $180 moved up to $300 plus. On sulphuric acid, which used to be $70, $80 moved up to $100, $105. So these are all the spike which has happened from Q3 to Q4.
Okay. So I mean, would -- how do we see it -- I mean, our internal estimate on would -- is there a lag between the sulphur and sulphuric acid price and we might see some more increase that is possible on sulphuric acid side of it, I mean, going ahead with the season having more requirement towards fertilizers, et cetera?
Sulphur, I think, has reached the peak. Our view would be sulphur should moderate from here based on some spot in demand from Indonesia for a different industry sector, not for fertilizers and also China imports. So I think sulphur is a global commodity is a surplus and need to come down. So we do expect sulphur should soften in the coming months. Sulphuric acid, again, a function of demand supply, and I do expect to remain static here and soften from here.
Globally, commodity prices are not going up, whether it is corn, soya and which can dampen the global fertilizer input prices as well as affordability index is going up, coming down for the farmers. So I do expect the commodity prices to soften in the coming quarters.
The next question is from the line of Somaiah Valliyappan from Avendus Spark Institutional Equities Private Limited.
Sir, the first question is on fertilizer margin in Q4. You did mention there is a slight compression there. Is it entirely attributed to sulphur? Or is there anything that changed on a quarter-on-quarter basis? For instance, was there any inventory impact that had a bit of an impact on margins?
So of course, sulphur played a role. But other than that, there's no inventory impact rather we have improved on the channel inventory with improved liquidation. Fourth quarter is always a soft quarter with the annual turnaround happening and many of the intermediate plants will -- we take annual shutdown. So to that extent, the value addition will be relatively less. So it is in line with the past and nothing special happened in the fourth...
Got it, sir. Sir, also earlier, we used to give our manufactured EBITDA per tonne guidance, we used to have this INR 5,000 per tonne. So does that still hold good in current context where we are in terms of subsidy allocation for tariff and where raw material prices are?
Yes, we should be able to sustain that margin.
Got it, sir. Sir, also on Crop Protection, quite a strong growth this time. So we used to be roughly around 50%, 50% in terms of exports and domestic. Is the mix currently similar? Or has it changed? That's one.
And second, if you could just help us in terms of -- I think earlier you did mention in terms of what are the factors that drove as a subsegment within Crop Protection, if you could just give some more color on it.
Raghu, do you want to take that?
Am I audible?
Yes, yes.
Okay. Great. As Sankar mentioned, part of the growth has come because of the introduction of new products in the B2C segment. And there is an uptick in Mancozeb demand in LatAm. So primarily these 2 have contributed to the growth between exports and domestic B2C.
Sir, exports, what would have been the growth and domestic B2C, what would have been the growth? And Mancozeb, are we seeing any price realization improvements?
Yes. We have seen a marginal improvement in -- because see, the other fungicides are not picking up in terms of their costs or prices you see. So Mancozeb cannot indefinitely increase in price because then there will be a shift between the molecules. So while we have seen an uptick, it's not like something extraordinary. The volume growth has been pretty good year-on-year as far as Mancozeb is concerned in the exports market.
So specific statistics, I think somebody had already asked about volume growth. Maybe I'll address your question and the other question together. So the volume growth for exports has been close to 9%. And in terms of B2C, it's in excess of 24%. So volume growth. So that's -- I hope it answers your question.
Sure, sir, it does. And also, what would be the value growth in exports and B2C?
Anuj, would you have that number ready, handy? As I said, the prices have also moved out somewhat. So in exports, you will see a pretty decent growth. But as far as domestic market prices are concerned, it's been either flat or it has gone down in some cases. So maybe give me some time, I'll try to dig it out. I don't have it in front of me.
Raghu, I have this data. In terms of the formulation business, they are looking for 16% growth on a rupees crore basis, the value increase. And for the quarter, it's been a good jump, 31%. In fact, if you see the share of CPC revenue has increased in this quarter, mainly driven by domestic formulation business, thanks to the new molecules we had, 31% growth has happened in Q4. And for the full year, there's a 16% growth which has happened.
So as you can tell, while there is a volume growth, there's a bit of price erosion resulting in an overall value growth of 16% when the volume growth has been 24% plus in the domestic market.
The next question is from the line of Himanshu Binani from Anand Rathi.
Sir, I just missed the last participant's question in terms of the EBITDA per tonne guidance. So we are sticking to that INR 4,500 to INR 5,000 sort of number for FY '26, right?
Yes, very much.
Got it. And sir, secondly, if you can help me with this unique share to the overall manufactured volumes for Q4 as well as for FY '25?
25% -- 35%, sorry.
Sorry, 25%?
55%.
55% for Q4?
No, 35% for the full year basis.
Sorry sir, I didn't get. 55% for full year FY '25, you mean to say?
Correct. Correct.
So that seems to be like too high basically. So what I understand is that FY '24, we were like somewhere around 36%, 38% sort of like number. And this has increased to 55%, you mean to say?
No, I said 35%.
Got it. And sir, one last question basically on the Retail side of the business. Can you help us understand the metrics in terms of the revenue cost for like setting per store and the absolute breakeven number at what revenues we breakeven? A anything -- any color on that would be helpful.
I would prefer to take it offline. I want to put it at this point of time. And -- but what I can say is we do breakeven. If we can sell 2,000 tonnes of fertilizers and 1 crore of non-fertilizer, we should be able to cover the expenses and start making profits. And that's happening within 6 months. So that's what we said. Initially, it used to take 2 years, then we reduced it in a year. Now we are able to do it in 6 months, basically because we are able to identify the right location for the stores improved significantly.
The next question is from the line of Ranjit from IIFL Capital Services.
A couple of questions from my side. Firstly, if you can elaborate on the new hirings that we have done in what seems to be a new role altogether, Vice President, Nano Fertilizers and Vice President, Strategic Initiatives. What would be the KRAs for these 2 appointees?
Ranjit, we are not able to hear you clearly. Can you please repeat?
Mr. Ranjit, I would request you to move a bit away from your phone so that we can hear you.
I hope this should be good. I just wanted a bit more insights on the 2 new hirings that we have made. One is the VP Nano Fertilizers and the VP Strategic Initiatives. What would be the KRAs for these 2 new hirings?
See, in the case of VP Nano, as the name suggests, he will be a business head for the Nano Fertilizers, both in domestic and export markets besides focusing on exports for specialty fertilizers. See has a rich experience in crop protection space and having worked in Latin American market, we have hired him back in Coromandel for driving the Nano business initiative in Coromandel.
In respect of VP Strategic Finance, as a company, we are looking for opportunities. We have created an M&A sale and basically to provide financial insights of the business evaluation of the new targets what we are exploring, we have taken this person on board. So his experience in business valuations and metrics to evaluate the targets will come handy for us to look at new inorganic opportunities for growth.
Sure. That's helpful. Second question, coming back to the fertilizer guidance back in December 2024, we had guided for a 40% jump in EBITDA per metric ton for our fertilizer business in 2 to 3 years' time frame. That still stays intact, right?
Yes. When the plant gets commissioned, the value addition of the plant flows in, should see that sort of an improvement. That is likely to happen in the fourth quarter when PA [indiscernible] plant gets commissioned. Portion of the increase will play out from there on. Then after that, the improvement will happen once we get the new granulation plant.
The next question is from the line of Vipulkumar Shah from Sumangal Investment.
So my question relates to subsidy and non-subsidy profit. So where do you see non-subsidy profit reaching percentage-wise 3 years down the line, sir?
Currently, I think it's around 70-30, right, on the subsidy, non-subsidy share and the profitability. And see, fertilizer also is likely to grow with the expanded capacities, increase in intermediate capacities. And we are focusing on CPC growth opportunities now. Ideally, we want to put the number 50-50, but not at the cost of slowing down on fertilizers.
So while we aim for that number, but fertilizer is also growing good, and we are diversifying the portfolio. And our aim would be to a balance -- strike a right balance between the fertilizer and non-fertilizer business. Very difficult for us to put the number at this point of time with the way the nutrient business is shaping up. We will invest and we will focus on non-fertilizers, especially CPC in the coming years.
The next question is from the line of Rohit Nagraj from B&K Securities.
Congrats on a good set of numbers. First question in terms of the R&D capabilities for both Coromandel and NACL. So how these are -- whether there is any complementary set on this?
And in terms of incremental product development of funnel, are we going to optimize the efforts given that now we are a same company and there could be some overlaps, which might be there? So just brief about that would be helpful.
No, absolutely. We will leverage the synergy benefits between both entities and leverage on their expertise. And many chemistries they are good at, as I mentioned in my earlier opening remarks, they are good in fluorination chemistry. They have got certain capabilities. And Coromandel has developed certain chemistries over a period of time.
We'll try to optimize between both the companies and try to see how do we consolidate and get a synergistic value out of the development efforts. It may even include getting some infrastructure synergies as well. So we may consolidate the R&D facilities in a single location to leverage the size and scale and attract talents and pull up together the efforts in introducing the new products. Definitely, this will be leveraged.
And in terms of the number of personnel on -- in both the companies, how are they in terms of [ TSD ], et cetera? Any color on that?
No, you're talking about R&D personnel?
Yes, yes, that's right.
I think we have close to 100 and they have close to 50, 55 and roughly 160, 170 numbers is what we are talking about on a combined basis. Only for CPC, but Coromandel has got some new changes as well.
Right. Sir, second question is, I missed the earlier -- I mean, the initial remarks. So are there any targets in terms of synergy benefits that we have given out for the next, say, 2, 3 years? The way you explained from R&D perspective, we will be getting certain synergies. Any financial targets that we are looking at?
Very early days. We have to wait for the regulatory approvals and get the production and sales on track first. We need to put our heads together and then put these numbers against each of these, whether it's a procurement efficiency or new product introduction or the market synergies or the R&D. development. Probably 6 months down the line, we should be able to answer it more appropriately.
The next question is from the line of Sheel Kumar Shah from Sameeksha Capital.
Am I audible?
Yes.
So if you can share manufacturing EBITDA per tonne for FY '24 and FY '25. That's the first.
Second, [ FSB ] EBITDA per tonne for FY '24 and FY '25 and our trading margins EBITDA.
We'll get back to you on the segment-wise EBITDA margins. I'll ask Anuj Investor Relations to communicate with you on this.
The next question is from the line of Mr. S. Ramesh from Nirmal Bang Institutional Equities Private Limited.
So before we close the call, I would like to have your thoughts on the very high debt in NACL and the high interest cost. So what is the time line you expect to reduce the debt burden and interest cost in NACL? And if you look at the overall CPC business, you said there is some pricing pressure in the domestic markets. So assuming that the inventory-related pressure in the domestic markets out of the way, when do you see the pricing power coming back in domestic formulations?
Yes, definitely. Formulation overall approach to the formulation business will be synergized with the Coromandel way of doing business, and that should bring in discipline in the market placement and the working capital needs, and that should improve the profit margins and formulation. And we do expect a disciplined approach to grow the formulation business.
So I think over a period of time, with the plants operating at full capacity, including the new Dahej plant, we should see some improved cash flows and liquidity coming into the system, and we should bring down the debt. But these debts have been secured for the CapEx investments, and it may take a while to pay them back.
So at this point of time on a stand-alone basis, difficult to put the time lines, but our effort would be to see they have a good control over the working capital and release the cash to pay off the debt and bring down the interest.
Okay. With that, let me thank all the investors and analysts for joining the call and my sincere thanks and gratitude for the management for giving a good insight on the business and answering all the questions.
Let me hand over the call back to Sankar for his closing remarks. Thank you very much, sir.
Thank you, Ramesh. Thank you, everyone, for your insightful questions. And definitely, we'll be more responsible in ensuring that we deliver on whatever we commit and looking forward to future interaction. Thank you very much.
Thank you. On behalf of Nirmal Bang Institutional Equities Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.