Chambal Fertilisers and Chemicals Limited (CHAMBLFERT) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us on Chambal Fertilisers and Chemicals Q2 and H1 Conference Call. We have with us today, Mr. Anil Kapoor, Managing Director; Mr. Gaurav Mathur, Joint Managing Director; Mr. Abhay Baijal, Chief Financial Officer; Mr. V.K. Gupta, Vice President, Marketing; Mr. Rajveer Singh, Vice President, Legal and Company Secretary; and Mr. Anuj Jain, Assistant Vice President, Finance. Before we get started, I would like to point out that some statements made or discussed on the conference call today may be forward-looking in nature and must be viewed in conjunction with the risks the company faces. Chambal Fertilisers and Chemicals Limited does not undertake to update them. A statement in this regard is available for reference in the presentation. We will begin the call with opening remarks from Mr. Kapoor. I would now like to invite Mr. Anil Kapoor to share his views. Over to you, sir.

Thank you, Gavin. Thank you for joining us on this call. I trust you and your families are safe and well. At the outset, I would like to inform you that there is no impact of COVID-19 on our operations and our plants are operating at normal levels. We are taking all necessary precautions and following stringent norms to ensure the safety of our people. Despite the challenges posed by the pandemic, the company performed exceedingly well during the quarter and half year ended September 30, 2020. For the quarter ended September 30, on a stand-alone basis, the company achieved a revenue of INR 3,986.94 crores, EBITDA of INR 794.71 crores and profit after tax of INR 416.14 crores, registering a growth of 12.3%, 32.1% and 10.89%, respectively. In comparison to the corresponding quarter of the previous year, our performance in DAP and potash was -- our sales in DAP and potash was extremely robust. For the half year ended September 30, 2020, on a stand-alone basis, the company achieved a revenue of INR 7,205.61 crores, EBITDA of INR 1,438.34 crores and profit after tax of INR 730.17 crores, registering a growth of 12.5%, 25.57% and 19.47%, respectively, in comparison to the corresponding period of the previous year. Trends. Considering the excellent performance during the current year, the Board of Directors declared an interim dividend of INR 3 per equity share of INR 10 each of the company. The Board has also approved a revised distribution policy which is available on our corporate website. That said policy contains a provision that's subject to the parameters given in the policy. The company shall endeavor to maintain a total dividend payout ratio of about 25% of the annual stand-alone profit after tax of the company. Chambal Fertilisers and Chemicals Limited is today an established and extremely well-regarded agri product company. Ours is the largest single-site urea facility in the country. Gadepan-III is also, as you know, one of the most modern and efficient urea manufacturing plant in the world. Our distribution network is very strong, which offers us an opportunity to grow a non-urea fertilizer business. The company has established reliable supply channel over the years for sourcing of non-urea fertilizer from international manufacturers of repute. We also placed a significant amount of emphasis on sustainability and the environment and continuously make efforts to better our performance in this aspect. Our Corporate Social Responsibility initiative, for which we are very proud, continues to support the community at large. We are proud to share with you that our CSR intervention, especially in the area of education, is playing a significant role in improving the education standards in the rural area around our plant. I request you all to kindly visit our corporate website for more details in this regard. We are happy with our performance and look forward to continued growth and sustained value creation for all our stakeholders. With that, we will now open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Madhav Marda from Fidelity.

Congrats on a very good set of numbers. So my question was, basically, is there any updated thoughts on our strategy for growth going forward? I understand that the balance sheet probably needs some more time to become ready for like a big CapEx. But any thoughts on our strategy going forward that's on the discussions? If you could share, sir.

Madhav, our strategy at this moment is to grow in our non-urea business. And along with me in this room is -- along with me in this call is also Gaurav Mathur whom I'll request to say a few words after I finish. As you can see, Madhav, we have grown quite well in the phosphatic business compared to last year. I'm sure you have the numbers. But quarter-on-quarter, last year, second quarter, we sold 2.8 lakh tonnes of DAP. This year, in the second quarter, we have sold 5.04 lakh tonnes of DAP. It's a substantial growth. And I'll now request Gaurav to say a few words regarding the future strategy of Chambal. Gaurav, would you like to say a few words?

Yes. Thank you very much, Anil. Madhav, I think Anil mentioned in his opening remarks also Chambal has established and is a very robust company with strong brands, quality and a very, very good channel. So we will continue to focus strongly on the non-urea products as part of our growth strategy. We do see even further opportunities in that area and that still continues to be our focus for growth in the future.

Okay. And are there any specific, I don't know, revenue targets or any type of products that you would like to talk about where we want to grow in the next 2 or 3 years?

Madhav, those are very forward-looking guidance and at this moment, we would not like to comment on those because now that guidance will be for basically next year. Third quarter sales are coming to a close. We have got only November and partial of December for which the sales will take place. And then the rabi season is coming to a close. Fourth quarter, as you people are all aware, is a very lean quarter for Chambal and lean quarter on sales. Our sales in the month of October is already the investment website which I've given to you all. So kindly go to that website and you can see that we have done quite well in the month of October. So phosphatic continues to be our growth area. Non-urea, non-fertilizer business, as Gaurav was mentioning, also is a focus area for Chambal. And Gaurav and his team, I would be happy to share with you all, are going into fairly -- a fair amount of details in strategizing non-fertilizer sales in our territory. As soon as we are very clear on the path which we'll take, we will share with you.

And sir, just last question, if I can just ask. What sort of net debt-to-equity on the debt-to-EBITDA number once we reach, we become comfortable going ahead with a CapEx program?

No. I would put it -- I will not put the cart before the horse. If there's an interesting CapEx program or if there's an interesting CapEx project available, we will go ahead. We -- our profits are quite good. Our cash profit is very decent. If there's a very interesting project, I don't think so our debt and debt reduction is going to be a hindrance in that field, but that should be an interesting project. There's a very, very good return on capital.

In the past, you mentioned that...

Mr. Madhav, sorry to interrupt, but may we please request you to return to the queue for your follow-up questions as we have several participants in the queue waiting for their turn. [Operator Instructions] Our next question is from the line of Baidik Sarkar from Unifi Capital.

Congrats on a very strong quarter of execution. My question is our tailwinds from the monsoons this year and resulting acreage expansion has obviously been very strong. And obviously the data is showing up in the DAP volumes, up 69% Y-o-Y. Would this high base be of concern as we head into next kharif? And if not, why?

Very good question, Baidik. I would like to mention that Chambal operates in an area which is more or less 100% irrigated. Punjab, Haryana is very well irrigated. Madhya Pradesh is fairly well irrigated. Western UP is very well irrigated. Small pockets of Rajasthan and Eastern UP are areas where irrigation potential is not up to the mark compared to our other territories. So if you have seen the total sales in our territory, not necessary numbers, total sales, even in bad monsoon year, have been pretty good. So we are sort of independent of monsoon. Now regarding your second question, as to sustainability and growth, I can share with you that the sales which we have done this year are sustainable. I do not see any reason why they are not sustainable.

Sure. That's helpful, sir. And secondly, our leverage is off very sharply this year. To understand this better, is there any amount of seasonality in the reduction of leverage? And as we head into kharif next year, do we see our capital requirements go up? Or would you reckon the amount of cash flow you're getting in, as we speak, are good enough to support our capital requirements for the coming season? And if you could quantify, what number of leverage are we looking at towards the [ battle ] with numbers?

I would request Abhay Baijal to answer this question, Baidik, if it is okay.

Yes.

Yes, Baidik, coming to your question, we have got a good amount of subsidy in this last quarter, which is reflected in the reduction in the leverage which you have rightly pointed out. This last quarter of the year is normally lean for subsidy so we will expect some amount of grow back or growth back on the leverage. But I think overall, we will be better off by a couple of at least 50, 20 basis points from the last year's situation. And also, we will try and see in terms of how we can manage this particular situation. Going forward, the kharif season requirements, depending on the prices of gas as well as the prices of other fertilizers, that outlook is slowly beginning to develop and we should have a fair fix of the number by the third quarter. Once we have that, the capital requirement for the kharif season will become clearer. So as of now, I'm not ready to predict on both because of the gas prices as well as the value of the -- dollar value of the imports that we will do for the non-urea fertilizer business. I would say that, that question, it should be left for the third quarter when we would...

Baidik, I would also like -- and Baidik, this is for you and all my colleagues who are there in their investor call. Baidik, are you there?

Yes, yes, sir. Please go ahead.

Baidik, you see, our -- there are 2 types of borrowing in Chambal. One is our long-term project of Gadepan-III on which we have borrowed and we have an ECB. The second one is our working capital. Our working capital is more or less backed by the bills which we have raised on Government of India. And you will appreciate, so far, government has not defaulted on any of our bills which we have raised on them. And there is actually deviation in those bills. This is like a sovereign debt. So how you treat it? I've been asking Abhay that you should discuss with the rating agencies that this is like a sovereign debt. The process of raising a bill is fairly complex. I cannot just raise a bill on Government of India. So sometime later on, if anybody desires to understand how we raise a bill on Government of India, it's a very complex process. And once our bill is raised, the payment is assured. Am I right, Mr. Baijal?

Yes, sir, very much so. And in fact, we have indicated in our presentation that both in our representation on the subsidy receivables that there is an amount of INR 4,031 crores, which is the claims which have been preferred on the Government of India as of September 30, 2020. And our short-term borrowings against that are actually INR 3,200 crores, INR 3,300 crores, which means that virtually if I were to treat that as cash on hand, in some sense, because it's our near cash asset, only the factor is delayed because of some reasons. But otherwise, it is more or less like a near cash asset. If we have to set them off, our debt equity is very, very comfortable, actually speaking. So at that point, what we're making is we have tried to emphasize in our investment presentation to the investor -- presentation to the investors slide.

Sure. That's very helpful, Mr. Baijal. And for last question for Mr. Baijal. Can you just give us a range of what the proportion of our non-urea EBIT might have been for this H1? I understand the annual disclosure, but if you just give us a broad range for this H1.

Abhay, would you like to share on the first part?

I would say that it is about -- it's a fairly decent number and the fact that we are emphasizing the sales of DAP and margin expansion mentioned by Mr. Kapoor...

Baidik, I would request that this is a very confidential number. It's a very robust number, that I can share with you. And for us to share that number of non-urea business at this -- in a call, it also opens up more...

No, I understand that, sir.

I should be very careful on this number.

Sure. Sure. And we've been reading about a lot of acreage expansion this rabi. Are you seeing that reflecting your DAP dispatches as well as channel stocking for the months of October and November?

See, it will be very interesting. I'll ask Mr. Gupta to give you a -- he's our Head of Marketing and Sales. The way to look at our business is to look at the 9 months period, don't go with the 6 months period. And if you look at the 9 months growth from January through September, you will see that the growth in the -- because what happens, rabi season, Baidik, gets over by December. Then from January, the placement starts. And sales in our territory should ideally be taken from January onwards. So when you take from September, you can get comparison from year-to-year, can be -- it can -- may not be a right way to look at it. So when you look at from January to September, Mr. Gupta, would you like to share what was the sales in the country or in our territory last year compared to this year? What is the growth this year?

I'll give you. Yes, Mr. Sarkar, last year, if you look at the 9 months numbers, last year, that is January '19 to September '19, in our territory, CFCL territory that is North India, the sale was 58 lakh tonnes. This year, it has been 61 lakh tonnes. So growth has been of 3 lakh tonnes while Chambal's growth has been from 7.5 lakh tonnes to 11 lakh tonnes. So we have taken the, you can say, the total growth in our territory, that we have taken plus 50,000 more we have taken this year.

We have answered the question, Baidik.

I already said -- answered that area. So monsoon does not make that much of an impact. The swing is not that high. It's a very stable market, but we are growing in this market because our footprint has increased in terms of urea sales and in terms of non-urea sales. So all our products, they are following the same cut. So Gadepan-III has given us their fleet to increase our depth in this market and we still see some more potential for further growth.

The next question is from the line of Amit Doshi from Care PMS.

Congratulations on the great set of numbers. Just -- sir, you had mentioned in the last con call that you are considering the additional approval from the ministry with reference to that 15% possibility of additional urea production. So anything on that, that you can share?

I thought I had mentioned in the last call, government has not given us approval for additional production from Gadepan-III.

Okay. Okay. Okay. So that's not likely to come up?

No, that's not likely to come. And even if they -- let me be honest with you, Amit, the contribution, because of that, it was so small, hardly worth pushing government to reconsider that. We thought we'll use that opportunity to carry out necessary repair work and maintenance work in the plant which will help us in the next year.

Okay. Okay. Okay, fine. With reference to this presentation where you've mentioned that your market share has increased on the urea side, so can you share as to how are we increasing our market share? I mean in the urea, since we have already -- Gadepan-III has been there since last year. And so that's Maharashtra, is the reason why it has increased? And if yes, so basically, if you can share something on the market share growth on the urea side?

V.K. Gupta, would you like to share?

Sure. Mr. Doshi, if you look at in our territory where Chambal is operating with urea quantities, the total sale is about 210 lakh tonnes of urea. 40% of this sale goes through cooperative where we are not there. To a large extent, we are not there. So the leftover market is about 1 lakh 20,000 -- 120 lakh metric tonnes, and we are selling almost 32 lakh tonnes in this market. So almost 25% is our market share, which earlier used to be about 16% in private sector. So that has given us the real footing in the urea segment here because every fourth bag in private sector is a Chambal bag.

What he means to say, Amit, is basically we have been able to expand into areas where we were not prevalent in the past.

No, we were there. We -- our market share has increased in all markets where we were operating, Punjab, Haryana, Rajasthan, Bihar.

By market share, I mean to say -- by market share and say is Uttar Pradesh. We have been -- where we were in areas where we were not prevalent or not strong in the past, we have -- because of additional urea available, we have been able to grow an additional area. So with that, what happened, we have got new dealers, we have got new retailers and our market share in that -- those territories have increased.

Okay, okay. And Maharashtra is also, I mean, kind of an added geography, right?

That's right. Maharashtra is a territory which we would definitely look at in future and I'm sure Gaurav may like to throw some light on what we plan to do. Gaurav?

Yes. So we have developed our plans for Maharashtra. And our team is also now partly in place and we are looking to make a formal entry into Maharashtra next year in the coming -- and we will start our placements as per the season in Maharashtra in the coming fourth quarter of this year. We have already taken an office over there and we have lined up -- we have looked at the product range that sells in Maharashtra, specifically the seeding of the market in terms of urea. Rakes supply has also started. So we are very actively pursuing our entry into Maharashtra again.

Okay. Okay. Okay. And now the third and the last question. On the non-urea front, basically, apart from DAP and MOP, we also mentioned that we are into pesticides and micronutrients, et cetera. So what kind of portion would that be? It will be very minuscule? Or -- and accordingly, what kind of target do we have on that segment? And on the non-urea front, because earlier in our major portion of the outselling subsidy used to be on the urea side, now with non-urea, continuously growing approximately 1/3 plus outselling subsidies of non-urea. So is there any separate mechanism on the non-urea front? Anything that you can show? So basically both this part and the non-urea front.

You have asked too -- a lot many questions. I'll just confine my answer to non-fertilizer business. You see non-fertilizer business is a very interesting opportunity for Chambal. And Gaurav and his team are sort of going into a fairly detailed manner in our non-fertilizer business. And it's not a small business, it's a fairly, fairly decent business. There are very large companies operating in that area. And with Chambal's dealer network, it's a very good opportunity for Chambal to grow. Compared to urea and DAP EBITDA, it could be small but potentially very good. And growth rate in that area of business would be 20%, 25%, 30%. So in the next few years, in say, 2 years or 3 years, it will become a substantial contribution to Chambal's bottom line. We started with DAP also the same way. 7, 8 years back, our contribution in non-urea business was abysmally small. Today, it constitutes a fairly large portion of our business. Now, while urea, DAP, MOP, NPK continues to be the bread and butter of the company, we are now focusing on non-fertilizer business and we are quite excited by that prospect. Am I right, Mr. Gaurav?

Yes, Anil, absolutely. And like we are working in that area and looking to expand that on -- and leveraging, like Anil mentioned, our strong dealer network, our brand, clearly, because of -- the focus a lot in this last few years was to make sure that Gadepan-III comes online, and we really make that happen well, which Chambal has done an excellent job of. And now the time has come that we are looking at these products also. So we have some work going on to grow that area significantly.

Okay. Okay. Okay. On the subsidy front, sir, the non-urea part, anything that you can comment on?

Subsidy in non-urea part is substantially lower. See, what happens in urea, it is -- it will be not 1/3 of the total subsidy would be phosphatic. Abhay, would you like to share out of the total subsidy, what is the percentage of share in phosphatic? And what is the percentage of share is in urea?

Anuj, do you have the numbers?

We'll share with you later on, Amit. We'll post it.

Yes, sure, sure. I think as per presentation, the P&K represents approximately 1/3 of outstanding subsidies.

It is given. That is given. P&K is a...

No, I just wanted to understand is there any separate or a different process with the recovery of those subsidy or it's the same like urea. That's it.

There is no difference in the recovery process. The same sort of bills are to be made. The same process has to be followed. And the allocation of subsidy also is more or less similar.

But I would just like to mention, Amit, if you look at the total subsidy is INR 3,916 crores, subsidy outstanding. And in urea, it is INR 3,226 crores and P&K is INR 674 crores. So it is 15% of our total subsidy outstanding. You see what happens...

I think you're referring to Q2 FY '20 numbers whereas FY '21 is a different number.

We don't have FY '21 right now.

Okay. Okay. H1. Okay. Okay.

I'm going by FY '20. FY '21 also, if you see, out of our total subsidy outstanding of INR 4,774 crores, it is INR 1,301 crores, which is for P&K. So it is around 25%. And what happens is that in P&K for -- let's look at a product like DAP, the selling price for market realization, we get approximately INR 22,000, and subsidy is approximately INR 10,000. But when you go to urea business, it just flips around. We have got government outstanding at maybe INR 10,000 to INR 12,000 per tonne and market realization is only INR 5,000 to INR 5,500 per tonne. That's a big difference.

Next question is from the line of Pratik Tholiya from Elara Capital.

Congratulations on a very strong set of numbers. Sir, my question is pertaining to your non-urea business which you were just alluding to. So sir, EBITDA contribution, although you are not sharing it, but based on my calculation would be the EBITDA split between fertilizers and nonfertilizers -- sorry, urea and non-urea was just around 70% to 30%. And you mentioned that this number was -- used to be very abysmal a few years back. So it already 30% right now. So my question is basically going forward, with all the strategies that you're developing in terms of kind of scaling up your non-urea business, where do you see the split going forward? The urea business could become 50% sort of because your urea EBITDA would clearly remain constant. So this non-urea, can -- how much can you scale up from here onwards? And what would be the views for this to make this 50-50, let's say in about 3 years from now?

We will have to progress in a very gradual manner. We cannot sort of shake the market in a sense that there are established players in the market. So the growth is going to be a decent growth, albeit it's not a very aggressive one. And that is the reason why we are entering new territories. Growth is going to come in our territory as well as in newer territories. And as Gaurav just mentioned, we are entering Maharashtra where there is a lot of opportunities in, a, urea business; b, non-urea business; c, non-fertilizer business. Maharashtra is a very interesting place as far as non-fertilizer/urea business and for our P&K business. It's got very aggressive water soluble, it's got opportunity for agrochemicals. So there will be -- it can open a very interesting opportunity for Chambal. And as soon as we start getting our feet wet in territories like Maharashtra, we'll have the same growth as what we have shown in our territory. So you should have faith in Chambal. We have delivered whatever we have promised. I don't want to commit to a certain number and then not deliver, which will not be fair to Chambal. It's better to deliver and then talk.

Right. But just on the margin front at this time, even the non-urea margins are also very strong based on my calculation, again. But do you think that with now cost, asset prices going up and DAP prices have also increased, do you think that we can maintain or sustain these margin levels or -- because the manufacturers, especially with backward integration would be better off under such time versus a company who are trading. So how do you expect to -- or sustain your margins at current levels or even improve from here onwards?

A very interesting question which you have raised. Let's look at backward integration. We are already backward-integrated. We have got a phosphoric acid plant in Morocco. So if phosphoric acid will make money, we will make money in Morocco for which we have got 1/3 share in Morocco. So as a result, we'll get profits there. We are a -- we just told, between the phosphoric acid and selling, we just don't have a granulation plant, which is not a very expensive plant and not a very value-addition plant as far as the product is concerned. We can put a granulation plan any day we want. So the real value addition, it comes from the market and in phosphoric acid. We are present in both those places. So there as well -- and as far as DAP pricing going up -- and so if the DAP prices go up, yes, they have gone up. And there forward going, the DAP prices will fall down or the market will correct itself to higher MRP.

All right. Sure. But any thoughts on -- because now we have -- our DAP and NPK volumes are also so high. We've captured market share. So any thoughts on putting up the granulation plant and getting that value-added -- whatever value addition instead you are capturing that also or we will be comfortable with trading even now?

Let me put it this way, we are constantly in our organization thinking about growth strategy. And as soon as we finalize any strategy but for which we need to do some backward integration, we will share with our stakeholders immediately. As a large company, we are constantly evaluating options for growth in Chambal. I cannot share more than that.

Fair point. Just one last question, so...

Sorry to interrupt, sir, but may I please request you to return to the queue for your follow-up questions, please, sir. The next question is from the line of [ Manish Jain ], an individual investor.

Sir, the food prices have gone up substantially and the procurement from the government, especially in Punjab and Haryana and all the -- as pointed by the Commerce Minister, Mr. Piyush Goyal, has gone up substantially. So do you think it would help us in the rabi season quite nicely?

Thank you, Manish. Manish, Punjab and Haryana are fairly saturated market. And we do not get much of growth in business from -- in those territories. We may get growth in non-fertilizer business in those territories, but as far as fertilizer is concerned, they are fairly saturated, 100% irrigation. And what we have seen is, over the years, Punjab and Haryana have hardly grown in their consumption. The basic consumption area actually increasing is newer territories like Madhya Pradesh, Rajasthan, certain aspects of UP. And that is what our focus is. If you look at -- MFMS is an excellent website and if you can go to that, you will see Punjab, Haryana fertilizer consumption is quite static, hardly any growth.

Next question is from the line of Sudarshan Padmanabhan from Sundaram Mutual Fund.

Sir, my question is -- sir, can you hear me, sir?

Yes, I can hear you, sir.

Yes. Sir, my question is on the cash flows. I mean I -- in your initial remarks, you did talk about the receivables being better and therefore debt coming down. But if I look at the actual cash flows, I mean you basically have seen a release of about INR 200 crores in terms of receivables. But where I see a large part of cash getting generated on the working capital is from the payable side, I mean from the reference point that is given that's from the last year, it's actually added close to about INR 1,000-odd crores. And I mean my question here is, one is, if I look at the urea and non-urea component, the non-urea substantially moved up. So is it primarily because of the mix? Or have we taken a conscious decision to basically have much better negotiation powers with our suppliers?

Abhay, would you like to answer this question?

See, much better negotiation definitely is one of the things that will happen going forward. But in this particular instance, the release that you are seeing is also because of the fact of being some amount of ships being in transit. And here, we have got CFR contracts. So that is one of the issues, but also definitely some of these suppliers have given us a little bit more extended credit. So -- and that crossed the quarter in a certain sense. So that has helped us, as you rightly said, in terms of trade payables.

Sir, my second question is on this whole subsidy part. The government had talked about a pilot program with DBT too wherein they are basically putting the money directly to the farmers. And there has been a white paper on that suggesting how much money is to be given for a piece of land. From that side, I mean, number one is, how serious is the government with respect to going ahead with this? And number two, if they go ahead with it, I mean, any time lines -- I mean, whether it's going to be next 1 year, 2 years, 3 years down the line? Because from our cash flows perspective, I mean, subsidy moving away from us and directly to the farmer would mean a completely different paradigm as far as cash flows are concerned.

See, Sudarshan, as far as subsidy is concerned, if the DBT direct to farmer, something would have happened if COVID had not taken place. COVID has created a sort of a setback into government's plan for direct benefit transfer. Nevertheless, this is my personal view, as far as subsidy is concerned, the way things are moving, the industry -- the only few companies in the industry are making decent profits. You have -- I'm sure you are following the profits of the entire industry. And for the health of the industry, the government still has to do something major, if not this year, then definitely in a year or 2. I've been in this industry for too long and I can see some of my colleagues in the other industry are struggling. As I said, there are a couple of companies, maybe 2 or 3 at best, continue to do well and attract capital at very low rates from the market. So as a result for companies like us, INR 1,000 crores would only mean an increase in interest rate of INR 35 crores to INR 40 crores, which is neither here nor there. But for certain other companies who are borrowing at 9%, 10%, 8%, the impact is quite bad on their balance sheets. Hence, something will happen in the next year or 2. And whenever that happens, Sudarshan, the good companies will always benefit. That will be the turning point where our -- certain of our ratios, which you people keep asking, will substantially change. And I'm quite certain that will happen, Sudarshan. I hope I've given you a sort of a forward-looking answer, however, it's my personal view point.

Sudarshan, I'd just add, I forgot to mention one thing, Mr. Rajveer Singh, who handles our legal also handles gas and he has been successful in also elongating the payment cycle for gas payments. So that has also contributed for last year. That's for the question about [ acreage ].

The next question is from the line of Deepak Chitroda from PhillipCapital (India) Private Limited.

Congratulation on good set of numbers, sir. So I think most of the questions have been answered but if I can ask about the shutdown plans which we have for end of this Q4, which were already taken last year. So any plans of a shutdown for any of the urea plant this year?

Chambal follows a 2-year cycle for shutting down its plants. But Gadepan-III because we achieved 100% production in [ 7 ] months, so that will necessitate a shutdown of Gadepan-III in the month of March. And then also, Gadepan-II, we actually had to take a shutdown in the month of April, but because of COVID, we could not do it. So we just had a small -- very small shutdown of 8 -- 10 to 11 days because there were certain repairs which were absolutely necessary. So we will take a shutdown of Gadepan-II in the month of March.

Okay. And for how many days for G-III in March?

G-III would be for the full month of March. It also will be about 30, 35 days. Some amount would be -- the bulk of it would be this year and it will carry forward to beginning of next year.

Okay. Okay. Sure. Sure. And secondly, just to basically take it forward from the previous participant regarding the outlook for H2. As we have already seen, almost about 70% to 80% kind of growth in Q1 and Q2. So do you think this kind of a higher rate of growth will be sustained in the H2, especially in the non-urea side considering last year also, we had a very strong rabi season? So any thought process on that side?

As far as quarter 3 is concerned, we will have a -- a, we have got enough material, which is required by the market. We will be able to sell. And we have bought the material and we'll be able to sell. Our growth will be decent in that area. And fourth quarter, we have hardly any sales. Fourth quarter, there are hardly any sales in the country, it's all a placement strategy. If I want to increase my sale, I can show it, but it's a placement strategy. So that will basically depend on how we want to see. Otherwise, it's -- the fourth quarter is for placement, complete placement.

Sure. Sure. And sir, my last question regarding the debt repayment, is there any now scheduled repayment which is due in the Q3 and Q4 for the long-term debt? I understand that on the working capital side, it's very difficult to have any clear view as Mr. Baijal also mentioned about it, but any thought process on the long-term debt part?

See, long-term debt is -- there's a very scheduled payment cycle. Every half year, we have to pay. And the next payment will be in March 2021. And every 6 months, we have to repay our loans. And we are following that cycle. So March '21, we'll have to pay.

Okay. Okay. And if I can squeeze in some -- a couple of bookkeeping question about the MRPs, the current prevailing MRPs for DAP, MOP and what was the 2-year's price for the quarter?

See, what happened was, in the second quarter -- early second quarter, the MRP has remained same in second quarter, early second quarter and third quarter. But the margins which we were giving to the dealer have substantially reduced. Are you getting it, what I'm trying to say?