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Ladies and gentlemen, good day, and welcome to the Gujarat State Fertilizers & Chemicals Limited Investor Conference Call meet to discuss the financial performance for Q1 FY 2023/'24 Earnings Conference Call. As a reminder, aided there will be no opportunity for you to ask questions after the presentation concludes. Should you need sand.[Operator Instructions], Please note that this conference is being recorded. I now hand the conference over to Mr. Nitesh Vaghela from Anurag Services LLP -- thank you, and over to you, sir.
Thank you, and good afternoon. Welcome to the Q1 2021 Earnings Conference of taste Parade and Chemical Limited Hosted Ara Services are. From the management, we have Mr. Budiana Audi, to Director, Sina and CFO; Mr. Nikitina, Ubli Secretary and Vice President Betaland other senior members from the man. I would like to thank the management for giving us the opportunity to host this call. We will present the opening remarks from the Management, post which you will have a Q&A site, thank you, and over to you, sir.
Yes. Good afternoon, everybody. Thank you for joining this SX1 for prevent conference call. All welcome to the event. Hope you are seeing our results and the other presentations uploaded on our website and as well as the stock exchanges. This was a mixed quarter. We had the highest sales in last 10 years, Q1, second higher sales. Last year was the highest sales. Though the margins are under special, there are 2 main factors leading to the margin being down. One was the subsidiary adjustment, the as you know, government did you subsidy from January '23 as well as April 23. So all the inventory line without or sales, the subsidiary or subsidy impact was felt and it was accounted in Q1. So it was a onetime impact, and we hope now this is not repeated. Similarly, for the industrial products, high cost inventory built up at the beginning of the quarter when it sold at a lower price because of the international price parity. The margins were affected in IP also. This was also kind of a onetime event, and we hope it will not be repeated. As far as subsidiary collection is concerned, government has been very prompt in releasing to Subsea. For P&K Fertilizers, we have got subsidiary up to 15th of July, and for urea, it is up to June, and it is reflected in our healthy cash flow. As you all know, we are a tech fee company and a good amount of liquid cash in our hand. Vehicle performance was okay, except the shutdown of urea and some other plants during Q1, so as far as physical performance as well as the market demand of the products are concerned, there is no issue in this quarter. As I explained to the subsidy detect and inventory write-downs kind of things that affected the financial performance. Along with the reduction in the end product prices, the cost input also went down. ammonia processes Mangate sulfur, benzene, palmed raw material prices were down during the quarter and now sales kind of bottom out or stimulate been sulfur are, as you know, the derivatives of crude to crude improved from between $80 to $85. So that size is reflected in these crude derivatives. Industrial Products, we see some increase in the margin and the realization, but I think better site will come from in the H2 only. As I said in the morning, we are expecting 15% to 20% rise in volume in fertilizer sales this year. So Q1 being not a rainy season. So like every year, the sales volume when it was subdued, but it will pick up, and overall, yearly growth of 15% to 20% is expected. It, particularly, we are increasing the production in this 4 months, it has been almost the last year's level and with good price support and subsidy levels at post economic level, we will have a good margin in Sika, and we going to continue production of the APN and PK there throughout the year. Further details are there in our website. All those projects are going on as per the schedule. We will be commissioning ammonia for project by December 23. Another project will be coming up for the time line mentioned, so on overall basis, we feel that Q1 is not really the reflection of the coming period and CSC will be performing much better in terms of top line and bottom line throughout the year, and we also hope that looking to the economic scenario government will calibrate the subsidiary from October, considering all the rear factors and much reduction in subsidiary may or may not take it, so with these remarks, thank you for the patient hearing. Now we can take up the question-answer session, please.
Thank you. Ladies and gentlemen, we will now begin with a question-and-answer session. [Operator Instructions], the first question is from the line of Ashish Agarwal, an individual investor.
Hello... Am I audible?
Yes, yes.
So basically, I wanted to check last time in the con call, we were informed that something is going on the restructuring side, which guidelines that come from the Gujarat government. So I understand that it is price sensitive and you might not be able to tell much. But at least, can you know something happening on that has some makings happened so far or not?
So you invent Galan will be examining those restructuring proposals. There is no consumption to that. So on dividend, as you know, we have already declared the other bonus issue, buyback and splitting of shares, -- those will be examined and in due course, constable announcements will be made. So yes, as I said, for those who are bound by the calculus, they have to the exercise. So SFC was no assumption.
But the only thing is, sir, can we have some time line because it is already 4, 5 months, I think that particular is out, and if we are still examining, can there be a time line like a quarter, 2 quarter, something can happen like that.
No. Unfortunately, I'm not able to give any time line because these are all sensitive issues and in amount of money.
So, one can expect some action, right? Because there is no assumption as you rightly…
Right it will come -- I mean, whether we are doing or not doing that will come and so suitable time period. So...
Okay, and second question, what is. I understand that you will not be able to say much on this issue, but I just wanted a fair thing that at least something we'll get to know in some time, which you are saying, yes, -- that's enough. The second question is, basically, there was something around shutdown, so what was the turndown number of days in this quarter?
Shutdown was for the ammonia plant, urea plant and BP Electron plant, different period as per the requirement. So it ranges from, say, 15 days to 30 days depending on how BP plant is, and we don't take shutdown every year, so when we take it duration which is taken every 4 years, so depending upon the term of the plant, the annual shutdown is taken. This is not something accidental shutdown or like that. It is a plant shutdown.
Normally, you take every 2 years. Is this shutdown?
Generally, yes.
Okay. One thing is how much was the loss on account of this? You had the shutdown not been there, what would be the situation of EPS or tax for us? Because ideally, I understand that last year was to be true, and the current period looks a little bit, say, lower, but what would be the ideal number for this quarter? Has the shutdown not been there?
Not -- I mean, right, to angle to look at because Kenter down, then plant will be will not work in a safe condition, then anything can happen.
No, I understand, but coming quarter, what can one assume...
Yes. If you want to see the impact of shutdown, we have put the volume number from our website. So whatever reduction in quantity that you see in sales quantity, and that is on account of shutdown. As I said, we don't have any demand issue and all. So we are producing, we are able to sell. So when there is a reduction in volume, main reason is this plant shutdown.
What was the operational expense on account of the shutdown basically repairs and maintenance that you would have done improved.
So it comes to around, say, INR 25 crores, INR 30 crores. It ends if you want to a major equipment and it can be more also.
And sir, last thing, when we had this one call, you said that gas prices have come down, so what is it for last quarter? And what is it today in terms of the input cost that we are getting on account of this?
It is more or less the same, not much difference. I mean it is reduced compared to, say, Q1 last year, it is more than 25% reduction. But as of now, it is stable kind of thing.
Last question from my answer, we have heard that Melamine prices have improved in the month of July and so has other chemical prices. So have that and how much time does it take for us to take pricing.
This industrial products are rise on an install price parity basis, ITP. So when in line with international sizes, we have to change our price otherwise a will import or domestic prices more because we'll import and use it. So we can't work like that. So it is in parity. So as you rightly said, it is improving somewhat from July. But as I said, full impact will be seen in H2. It is improving in this quarter. But not so much.
Okay, That's it all for my in the other questions.
Thank you. [Operator Instructions]. The next question is from the line of Saket Kapoor from Kapoor
Thank you, sir. Sir, I missed some bit of your opening remarks. So if I'm repetitive kindly pardon me. So you did mention to the fact that Q1 numbers and the Q1 operations should not be extrapolated as the annual -- and we are going -- progressing ahead, the numbers are going to improve both on the operational as well as the financial front. So this should be the coming sustains firstly, on the reported number for this quarter?
Yes. repeat the last sentence please.
Sir, this should be the sum and substance on the performance that this performance should not be annualized. There are factors that has led to that to be lower numbers. And our numbers are here to improve from here only both on the operational terms and thereby also on the financial terms.
Correct, Correct.
So sir, as you told last time that you would be giving the EBITDA margin, the number for the Patria segment post Q1 number, so what should we now expect from the fertilizer segment going ahead from Q-o-Q onwards, sir? And also on the utilization levels post the plant shutdown, what are we anticipating going ahead?
Yes, I promise that I am not able to make up any number because government subsidies behaves in a very elastic way because, say, whatever a produce even now, say, in August, if I will say in October filing the reduced subsidy. So when we'll be able to know farmer will take the fertilizer from retail point, if it's very difficult to pay it. But until I will come back to you later on with some number can be firmed up per part to EBIT level for fertilizers.
Okay, and on the volume front, sir, what are you looking for, if you take the last year number? What should the growth we should look also depending upon the types of advisers we tell -- what should be the volume growth we can anticipate...
Yes. So we anticipate some 15% to 20% growth in fertilizer volume base last year.
And which bucket are you referring to, sir? Because we have a traded component also here?
Yes, it will be total -- but as I said, we are increasing product it. That is the main reason for growth in volume. Last year, we had a very low production there, but net new cost economics, stable subsidy and lower input prices, we are able to run it in a fairly more than 50% level. So that will contribute to the growth, and of course, we will have caring urea as well as DSP in this growth story.
And Sika number, sir, can you give the volume data? What was the production and sales production number from the unit last year? And what are we emphasizing for the current financial year?
So last year, I will just give one...
Sir, then your comment on the raw materials also, sir, I think so this time, we have an improved investor presentation, so thank you, sir, and we -- and I hope that this is a descriptive information provided in the presentation, we will continue with the same. So your thought on how the RM basket is likely to behave, and sir, and then there's a P205, what does that stand for if you could explain?
Production -- all the products together were 73,000 tonnes. Up to July, we have crossed 2 lakh tonnes, so in the first, last year's securing production, and we hope to meet our to capacity of 22,000 tonnes. That is 100% production of install capacity and that is our target this year.
And here, sir, what are the product profile there for us? What are we producing from the sector.
The one prospect APS P10 and NPK for products.
Okay, so sir, with this increased production, there is no issue in the marketing side on selling on the sale...
We have a good brand recall, farmer selling is not a problem, and we are depending on the requirement we cater to the whole country, so our market is quite wide. So even if there are issues in some states. We can go to the other states and our CD marketing will throw more light on marketing aspects. Good afternoon, marketing is not a problem for us in case of fertilizers because if consumption of India, is quite high, and we are very small in this if you see the overall consumption. But Kapoor said our product mix will be built on the market requirements with BP, the IGF 10, then PSPs, and we are targeting our com market of Gujarat to the tune of 50% to 60% of the total sales, and that with our prime market, Maharashtra, MP, Karnataka, Ryan. So there will be no issues because our products are of good quality and as required by the farmers.
Right, and sir, now coming to the key input cost movement, sir, firstly, so P205 is for the phosphate, sir, that mentioned there, what does imported P205 transfer?
That is a phosphatic form of first debt, of course. But I sewer import phosphoric as the prices have come down and oil price analysis is given in our presentation on our website earlier what was the price last year and now what is the price, so you can look at the major raw material prices there.
And sir, how was the power and fuel prices and the raw material mix going to trends are going ahead, especially on the power and fuel front, I think so this could throw some light.
Yes, Power and sale costs will also be low because of what our power is coming from get better our donation, and we also have our own cogeneration plants, so since GasTrade lower compared to last year, for the whole of the last year or Q1 of the last day, whatever period we see. So the power cost is going to be lower, and we are putting up a new solar power plant and in some channels. Of course, it will take some time for commissioning. So it is such green power, the overall power across filter.
Correct, sir, and sir, was there any impact of the cyclone also on the constraint on any of the plants, the last one...
There. We are technical at without doing any dent to us.
Sir, I missed your comment.
Then Aclara now was the impact on us, some wins and first power as months were affected. But I said that nothing more has happened, so we don't have any insurance claim or anything on fat loan.
I get for the EBIT number, sir, once you can come up with the same...
Yes. I will...
Okay, so if you can spell them out also, sir, that would be over the car.
We have to make careful in giving you numbers.
Okay, sir, and sir, last point is, sir, if we take the impact of the extraordinary line items that has affected this quarterly profit. What should be that figure be, sir? Has this been a normal quarter in that press what would have been our normalized margins?
So FY subsidiary impact is confirmed for P&K fertilizers. There is a INR 97 crore impact on for the whatever sales we booked in last year, but when it was all through past machine this year, they reduced the subsidy from till onwards. So that impact was in Q1 was Otherwise, inventory impact and all these are all continuous quarters, but that impact was also around INR 25 crores. That is -- we write down the inventory to net realization value. So whatever is what you at high cost and likely to be sold at lower price has to be brought down to the actual realization as per the accounting standards. So that impact was around INR 25 crores. So in all, around INR 120 crores, INR 125 crores would be safe to be 1x effect not really pertaining to this quarter.
125 is not for the entire for the June quarter, that is you tend...
Yes, so it is out of whatever critical activities I did -- this is the financial theme that has come up. Otherwise, it's not relating to my operation during the quarter.
No, no, what I was asking is this INR 125 crore entire impact has been felt for the June quarter itself? Or has it populated for the part...
Mainly in June quarter.
June quarter -- and further Yes, please. Not in the previous , not in the subsequent quarters.
Yes, I will not rest subsequent...
And the subsidiary revision downward was last in the month of only.
Yes, it was done in was January 23 also, and then again, it was done in April 23, and again, it is likely to be done in from October 23.
Okay, so at that time, again, for that quarter, we may face this inventory losses?
But we will take care in September quarter, it has to still lower is rewarded as far as possible.
So this INR 125 crore impact is what will get negative going ahead? That will be going back to the bottom line.
Right...
Sir, on the work postpaid prices, sir, how was our contracts being there for price trends there? And I think so we have made some investment in one of the JVs also in international geography. So how is the optic there capacity? What is your plan for this year?
The Vifor Ostrich in Tunisia that is tau, so it supplies for cases, but there are no pricing advantage, the international price applicable to India during the quarter is applied for whatever supply they make from Tunisia. There is no price advantage there, only supply surety is then. That plant is also not operating at optimum capacity around 30%, 40%, only they have some technical and social issues. But hopefully, from next year 24.25%, it should improve the performance with all whatever steps they are taking for plant improvement, so we should be able to see the results next year with improved supply from them.
So total requirement as in a sort currently?
Umar agreement at 188,025, then on is trying to accommodate so total capacity is 60,000 tonnes, so we and Coromandel share 50%, 50% of the output. And with 20,000, if it is coming, we can make around 4 lakh tonnes of DAP in faith, and balance 34 lakh production, we saw 32 open market.
Okay, and the pricing advantage on this 18,000 quantity? Is it at arm-length market price or... Arm-length. So there are no price advantage...
On the quantity expense, that don't give you the short source of supply.
Correct, and on the Rock prospect, the last point on the -- how are the rock postpaid prices currently trending for last quarter, what it was? And have we contracted price Caragenin?
We closed most of our prospect from Rajasthan state mines and minerals company, so there, it is a steady price. So maybe once in a year or so, they can decay according to their cost team, so right now, it is around INR 15,000 per tonne, and we source 1 or 2 concern and that is totaling 60,000, 70,000 tonnes from import sources. So that price is also prices are quite low now in line with the posited price, so imported rock is also in that resumes 16,000, 17,000.
So for Person, what is our contracted price for the next quarter, sir? That trend is lower on...
This quarter side is expected to be $850 July to September. October onwards is steel prices are not decided. So in this quarter, like last year, I mean October to December, it was $1,700. Now it is hard to $850. It is half now.
Okay, and what was factored in for the April, June quarter, sir?
In June was $970. Is it is $120 July to September.
Correct, and you gave the outlook for industrial products to be flattish to slightly on the upper side. This is what we can look forward for these...
It will not go lower as we can see, but it will improve only going forward.
Thank you, sir, for all the elaborate answer to all the best to you, sir and to the team as well.
The next question is from the line of Madhur Rathi from Counter Cyclical Investments.
Good afternoon. can you just explain regarding the...
Mr. Rathi, we are unable to hear you clearly.
Am I audible right now?
You're standing very soft, Please proceeds.
Yes. Sir, can you just explain regarding the buyback that we had considered with the Gujarat government. So where is the process on that?
Yes, so as I say, the metro as splitting of shares, all those supposes will be done by the FSC board and whatever outcome or decision is that will be enough whenever it is not we cited some concrete course of action. But as I said, for the government guidelines, we will be examining those restructuring proposals, and there are no exemptions to any PSU in this matter.
Okay. Sir, is that amount of time line when you think that this will happen?
No, there is no fixed time lend. Everything will be done during this year. I mean we will -- whatever alternatives is possible, it'd be examined and something we added during this year. That I can say.
Most likely in FY '24, where you see some kind of outcome from that, right?
Is there a presort...
Sir, most likely in FY '24, we'll see some kind of outcome from this, right?
Yes. At least we can act I think I hope so. It is more erogating, so I'm not able to comment much.
Thank you. That is very helpful.
Thank you, the next question is from the line of Ankur Sanwal an Individual Investor.
Does company expect a positive revision in subsidies for -- in October for fertilizers?
No, no, it will be lower because in prices have come down, so subsidy will go down.
Sir, can you also give a detailed analysis of what industrial production is performing? And what will be the future trend?
As I said, our product capital attain, I don't see. They are monopoly or semi-monopoly products of DSC, and our plants are quite old. So the plant capacities are built up as per the past demand consideration, and compared to that, today's demand is much more. We don't have any much issue on selling of our chemicals out products, and we have steady markets and large customers tie up. So we don't do any kind of retail saving or small lot trading. It is a more complete B2B segment that we get, and as I said, the prices are the international price parity basis. So every month when prices change, we calibrate our price in line with international prices. So that local buyers don't have intent to import if you are buying from us, and as you know, all the chemical industry is going through the lower right now and all chemical companies have shown subdued performance. So our Chemicals segment was also no exception, so the margin was under pressure and some inventory built up trade happen. But now on July, we see some improvement in realization, and going forward, we expect the prices to improve, and with that margin also had improved, so that is the picture that we see in FY '24.
Traditionally, sir, our margins from industry products are 30 less. Are we working on modernizing the plants or debottlenecking them?
As product, you said...
The industrial products, you told prolactin melamine.
Those are... Vehicle in nature, so melamine give us a huge profit 2 years before the prices were all-time high, so plans are up to date and all they are working, we own 100%. All plants are working on more than 100% capacity, plant in go.
[Operator Instructions], the next question is from the line of Ashi Sakurada investor.
For... Yes Or no fertilizers for that matter?
Our marketing will reply on this, and is your question for Ammonia. It's still in the last skilled manufacturing, but we are looking out for the tires also, and other an fertilizers like DAP or NPL is still in the last scale status only. So once ladies over, we'll be having a test marketing and then it will be commercialized. So we are working on that.
When can you expect something positive on that side, just the deal time line?
I think the urea and DAP can be in this financial year, most probably because we need a 6-month period for 10,000, we have to go for the report for 2 years seasonal this thing. So it will take a little time for commercialization, but we will be able to know the test result by 6 months' time.
[Operator Instructions], the next question is from the line of Ashish Agarwal, an Individual Investor.
Only one last question to be answered, which is on subsidy receivable amount, what is it right now in the books? And what is cash-in-hand currently in the books?
Subsidiary in the book sale, I mean, to be received from government is a very small amount, maybe INR 200 crores, INR 300 crores, okay. In books, it remains more because government considers subsidiary payable only after fossil and farmer by the fertilizer. So where we book the subsidiary when we do the first point sales, but government obligation arises much later, OEM subsidy receivable is very small. As I said, for PNK, they have paid subsidiary 25th of July, and for urea, they pay to 30th June, so a very small amount in outstanding on subsidy accounts as you may have been taking mental huge funding flow in form of good CST collection, good corporate tax and initial income tax collections. So they are equally fast still paying their subsidies and other days, so like in past years, we don't have much subsidies outstanding.
And what would be the cash in hand in terms of both or ICD or any bank balance put together?
Yes, so we have around INR 2,000 crores cash in a -- and of course, we'll have a big obligation of dividend payment of around INR 400 crores in September, so that we use up some cash. But ultimately, when large projects are implemented, the real utilization will come into place.
So still, you are saying that INR 400 crores netting of that also, we have some INR 1,600 crores, INR 1,700 crores of cash, right?
Yes, yes.
Okay, and where have we invested this?
In these deposits and some government schemes,
what would be the yield for currently of yield?
It depends upon the cash requirement, but it is between 6% to 7%.
[Operator Instructions], the next question is from the line of Sunil Kumar Gupta lines.
Only one question I have, turnover that has gone down from INR 3,000-odd crores in the last Q1 of '20 to '23 to INR 2,062 crores in June 23, which is around 25%. So is it only because of subsidy reduction or is there a lack of demand or something?
No, there is no lack of demand. So many subsidiary reduction and some price reduction in the product -- so that is on overall basis, we expect that we'll maintain the turnover last year turnover in this year also.
That means last year, your turnover was INR 11, INR 368 crores. So you'll come to that level for the full year, '23,'24.
That is what we expect.
Okay, and the profitability will it also come to that level or there will be some reduction...
Last year was the historic profit for GSFC. So that is not achievable. But we will have a good profit for the year.
Okay, because last time, your profit was something around INR 1,255...
Net profit was around that, correct.
Okay, so it will be less, but whatever has been lost in the June quarter, obviously, cannot be equipped. That's what I assume.
No, you may be knowing that we talked about the government guidelines per issue, so first guideline was on dividend, so SFC shares in various state PSUs and other companies, so all are mandated with declaring higher dividend. Sells be beneficiary of that large dividend declared by various companies, very flattering this Q2 when -- because most of the companies are ATM by September, and we can account to dividend in this Q2 results. So that dividend income will be substantial in...
That will be around INR 80 crores to INR 90 crores. But last year also, if I compare Q1 of last year and Q1 of this year, -- your other income will be included -- will include a dividend also.
So that other income is going up from INR 30 crores to INR 48 crores, INR 49 crores... So other income will have dual component on the cash we talk so it is on good intake and other...
Incremental because the INR 30 crores of income last year was with very poor dividend from other companies that will blow to around INR 80 crores, INR 90 crores in the current year.
No, it will be much more. It will be INR 140 crores... INR 140 crores.
Okay, sir, and as a shareholder, we all up as the very best.
Thank you. The next question is from the line of Dhavan from Kawa Investments.
I have only 3 questions, first, how -- just a follow-up question on the previous one. What is the change in volumes you are seeing, sir? Is it positive or negative? And also the changes in the price which we have seen, how is it corresponding to the revenue this quarter?
No. There was some action in volume in Q1 versus Q1. But as I said, volume mainly pertains to put other segments. So we expect on overall yearly is a growth of 15% to 20% compared to last year. FY '24, we expect a growth in volume, fertilizer volume, and the price yes, some price corrections are there. But as I said, we expect some improvement in prices of industrial products in Q2 and a little more from to onwards.
Okay, sir. Sir, and certain competitors are also filing with the government requesting them to don't to revise the subsidies not to revise a subsidiary retrospect, do GSSC stand on that? Or we are just following the government...
No, this quality is from after sort of deliberations and then it is difficult to have any say that. But government ultimate objective is the direct subsidiary transfer in farmers accounts. So they also be working on pilot on this line, and if they find it savable, then we will be released from all the subsidiary issues. We will be adding full amount from farmer and government will be paying subsidy to for account directive. So we will not have to worry about subsidiary claims and delayed payment and this and that.
Sir, how do you -- what is your outlook on the agriculture this year, the season this year, the case season this year.
Italy is good because now the rainfall as well as reserve levels are book, and so that will occur well for Rabi season also, and based on that only, we see a rise in the volume. Otherwise, with bad season, we would not have been able to project growth.
Sir, in the inventory, which we are holding, what is the rotation of that inventory every 3 months, are we rotating one? Or how is the inventory ratio going also?
Fertilizer, it is seasonal because say, January too much, whatever vols don't get sold until in the May, June, July -- so but in it is a little longer depend on the season, but when we produce from the [indiscernible] immediately sold. But we don't have such a long inventory thing. It is 1 month in industrial products and fertilizer on an average, it can be 2 months. So we don't have much outstanding as well as we don't have much inventory blocking.
Sir, initially mentioned one of the participant had asked the question regarding the Gujarat is 50% of our business, and the rest of the states are 50%. Are we planning to change this ratio or the proportion which we are concentrated on Gujarat in India?
In in our home market, we consider to have the minimum 50% of our share here. The reason is because this is the most economical zone for GSFC to deal in fertilizers, and that is why we are consolidating -- we have our own network here of 272 depots, run by our 100% subsidy GTL, and rest of the country, we deal with the dealers only, so we will be concentrating on Gujarat, a bit more. But yes, our production will be increasing, so we'll be reaching the other seats also effectively.
So which is a 2 top export market in the whole? Export for the parties?
Yes... Fertilizers in India since this is under subsidy, we -- there may have any export except we need the permissions, and India is importing 50% of fertilizers approximately of the total requirement. So exports, we can say question still.
Okay. So sir, what is your view, India is totally listing the ban on import and reducing it, that's totally reflected in the subsidy price as well going forward. So do we envisage these exports to be higher than what is the traction of these imports coming into India.
Okay. But to understand the question, yes.
I'm asking, sir, followed by reduction of subsidy as government has lifted the ban on imports of fertilizer also, so government is appreciating imports of fertilizer. How are you seeing this traction? Do we think is it completely open for countries or there is a certain restriction like among to 10% only has been we have seen remaining 90% has to come -- or how is the traction going forward? Is it totally coming full-fledged coming in India? Or is it just the trailer of the picture, which is going to come?
Restriction on the fertilizer sales in case of imports, the need base imports are done effectively by the industry as a whole, and yes, government is coming in between controlling the prices because what I said earlier, India, depend highly on importantly, 50% of requirement, and if there are no controls on the prices, it will be a big go to the country as a whole. As such, Indian requirement is met, and we are one of the biggest consumers and other is a bagels it becomes a season, so imports to India. -- yes, and India keen to buy bad price, which is reasonable to this.
And what is the price tier there might be some price parity, what is the price parity of imports and domestic...
If you see the prices of trade across various country of fertilizers India is the best country where taking on the cheapest prices. If you go to Bangladesh also, they are still $100 more and giving an average figure to you. If we move to Brazil, it is $200 more per tonne on average basis. So India is working very nicely the applies.
First market there is -- as we have also planned a CapEx of INR 4,000 crores, which will be paid out in 2 years, do we envisage because we have focused more on self-install, and do we -- and just sort of how much is a backward integrated change? Are we fully backward integrated? Or how is it -- how much percentage are we back on how much self-sustained as a company GSFC?
In Brazil, we are fully backward integrated in Sika, we are in a process of getting backward integrated to some extent, not fully. It will be a phased manner, but yet in Baroda, 100% that was integrated.
What is the volume of pro-- what is the volume of Baroda in proportionately to...
Really both per 10 on each, so it's a 50%...
Okay. 50%, 5%, sir, okay, so Masa -- just a follow up on a final question I think cancer is depending on fertilizer. So what do you envisage going forward '24, '25 to be not just price, but the volume as well, what do you envisage in the volume growth for...
We'll be amortizing some 15%, 20% growth in the volume, So we are not talking about that total value. We are talking about the growth in the turnover and also...
And are we fully equipped to meet that growth? Or are we seeing an expansion going forward in case...
Seller expansion cannot come in 1 year time, we'll be utilizing the capacity to the fuller section, and we'll add some 10% volume, we are coming to a small plant. But yes, we are expecting a bigger expense in our loan, it a lot of expansion and debottlenecking going on.
Okay. Sir, and after what is the purpose okay will those cash reserves being held in the company after dividend being used for these expansions? Or are we planning to raise any funds going forward also?
That... Paul will take the call, but...
The requirement is there. Do you see the requirement apart from cash results?
No. Only thing I can say is that there will be consistency in dividend in line with the earnings. So if there are earnings, I think management will not for the dividend belonging to shareholders. So in line with the earnings, the dividend consistency may be infected...
And sir this conference call, I heard on 2 different from other previous conference call. You're already confident about Naouri first time. So what do you feel like there is certain conclusions come on Urea and other note because this type of positivity has seen first time in GST because you were saying at the end, we'll be completing our test and probably commercializing in 2 years' time. So I'm seeing a positivity. How do you see it as a business going forward?
See, in case of Urea, the Urea is the most preferred utilizer by the farmers of India because of the prices and subsidiary as the prices are very low. This is the most preferred parties. -- second comes for DAP is what you are talking, so Indian farmers are highly dependent on the snus slowly. -- different companies, including GSFC, are trying to have a balanced nutrition amine major state, which is our 4 to 221 ratios, and therefore, GSFs mostly promoting sulfur-based fertilizer like ammonium hydrosulfide...
Just 3 things just I wanted to know in this is one, whether there is -- whether the news are side or not, whether it will be costing 1/10 of what actual fertilizer is cost in total. Is it true, sir, what is your view on the prices? Will it reduce the burden of farmers and the government to...
Prices of Urea?
Yes, I know you if it comes.
Nano usually is already there, and is already there in the market in a big way and the prices are in -- both of them are Namo Urea, 1 bottle of 500 as cheaper than the one type of fertilizer, but still it is in initial stages because consuming this applying that to the field in a different way and slowly farmer is getting used to that thing. So once that comes in full, even if we're able to replace 25% of this Urea it will be a good achievement for the country as well.
Okay, Sir, just one thing, just a judgment answer I want this and forward-looking is very subject to -- going forward, will GSFC see a huge traction in the government side also, not just as a fertilizer company, but as a chemical business because we also plan to enter into chemicals rather than just being fertilizer as rightly pointed out last year by last investor call, we surely moving to chemicals. So will the government appreciate this step and also whether the business model is sick to get into chemical business, just to be not just to be a fertilizer company, but to enter into the chemicals business as well. What is your view.
Yes, so as everybody's fertilizer is highly control segment from the front angle. So to run a company in a businesslike manner, you need to get off or have a reduction in those kind of thing.
So we are we are having a vision to shift from just fertilizers to be in the chemicals business. Is it on our flats -- are we on that plant?
Yes, So last time it may have been mentioned that in ahead, at what we are doing is only for chemicals that will be starting, and we don't have any plan for expanding in fertilizer space in the rate. So right now, we are receiving a further investment of INR 4,000 crores in the Chemicals business.
Whether this is president, sir, because we are partly on the government...
No, no, this is all broad even company and government don't give us any instruction. So all the directors together, whatever they feel based for the company, we have paid to do government do arise from any of...
Okay. So which build of you...
Thank you [Operator Instructions], as there are no further questions, I now hand the conference over to Mr. V.D Nanavaty for his closing comments.
Yes. Thank you all for the participation and asking 11 questions. So as I mentioned, the growth story continues, and therefore, some kind of tabulation on the financial numbers, and we in it out during the year, and we'll be aiming for marking higher and higher in top line and bottom line. There is no crossing anywhere and request you to maintain your trust in BA subsea. Thank you.
Thank you, members of the management team. Ladies and gentlemen, on behalf of GSFC, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.