Chambal Fertilisers and Chemicals Limited (CHAMBLFERT) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9M FY '26 Earnings Conference Call of Chambal Fertilisers and Chemicals Limited. [Operator Instructions] Please note that this conference is being recorded. I will now hand the conference over to Ms. Purvangi Jain from Valorem Advisors for opening remarks. Thank you, and over to you.

Thank you. Good afternoon, everyone, and a warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the Investor Relations of Chambal Fertilisers and Chemicals Limited. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the third quarter and 9 months ended of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to apprise about the company's fundamental business and financial quarter under review. Let me now introduce you to the management of Chambal Fertilisers participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhay Baijal, Managing Director; Mr. Narinder Goyal, Business Head, Manufacturing Operations; Mr. Anuj Jain, Chief Financial Officer; Mr. Ashish Srivastava, Vice President, Sales and Marketing; and Mr. Tridib Barat, Vice President, Legal and Company Secretary. Without any delay, I request Mr. Abhay Baijal to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi. Good afternoon, everyone, and thank you for joining us in this conference call to discuss our financial performance during the third quarter and 9 months ended fiscal 2026. Chambal Fertilisers continue to play a critical role in supporting India's agricultural ecosystem. As India's largest private sector urea fertilizer contributing close to 10% of domestic supply, but not only that, we are almost 3% of the crop protection chemicals and specialty nutrients business in the country. In NPKs, our share is almost 5%, DAP is also 5%, MOP is about 6%. Therefore, we are an important contributor to country's agricultural outputs. The union budget has allocated about INR 1.71 lakh crores to the Department of Fertilizer this year, providing long-term visibility and stability to the sector. From an agronomic standpoint, conditions during the last quarter of the rabi season were broadly favorable. India received 11% higher than normal rainfall during October to December 2025 with strong October rains offsetting deficits later in the season. Key northern states such as Rajasthan, Uttar Pradesh, Haryana, Punjab witnessed favorable conditions supporting early sowing. As a result, rabi sowing increased by 2.8% year-on-year to 652.3 lakh hectares as of January '26. Wheat acreage reached a record level alongside healthy growth in pulses and oilseeds. Northern states such as Rajasthan, Uttar Pradesh, Haryana and Punjab saw higher sowing of wheat and mustard supported by favorable rainfall conditions during October. For Chambal, this translated into a stable outlook with urea continuing to anchor volumes and cash flows and DAP and NPK providing diversification and growth, positioning us well to benefit from both steady base demand and gradual shift towards balanced fertilization. With this backdrop, let me now move to our operational performance for the quarter under review. During the quarter and 9 months period, our Crop Protection Chemicals and Specialty Nutrients business alongside biologicals continued to demonstrate strong momentum with sustained growth in both revenue and margins. On a 9-month basis, the contribution from the segment grew by 30% year-on-year, reflecting improving scale, product mix and execution. In the third quarter, we introduced 5 new products across biopesticides, biofungicides and insecticides, further strengthening our differentiated portfolio. Looking ahead, our pipeline remains healthy with 12 new CPC products and 1 new specialty nutrient product lined up for launch in FY '27, supporting our growth ambitions. On biologicals portfolio, I am happy to report that we continue to perform strongly with volumes increasing by 31% and revenues growing by almost 58% year-on-year over the 9-month period. Encouragingly, Uttam Pranaam, our bio-nano phosphorus product launched last year is witnessing strong market acceptance and better product outcomes with volumes and revenue up almost 250% year-on-year. We are doing well in this area and actively working on expanding our biological offerings, particularly in the fungicides and nematicides, which are planned for launch over the course of the next financial year. I'm also happy to report that in terms of biologicals, we are almost 6% of the market as on today. Chambal Fertilisers and TERI, The Energy and Resources Institute, entered into an agreement for research for advanced and sustainable agricultural solutions. This is significant in the backdrop of food security challenges due to an increasing population. TERI, as you may know, is a pioneer institution in the area and we'll be doing research under the center of excellence to develop products where IP rights are jointly owned by CFCL and TERI. And Chambal will have exclusive commercial rights globally on the product. A dedicated lab is operational now and the products are expected to launch from FY '27, '28 onwards. Based on product efficacy, we will also explore the export market for these products. In the seed segment, we have launched research variety of seed wheats and early results have been encouraging, giving us confidence as we continue to build capabilities in this segment. In the bulk fertilizers category, P&K fertilizers delivered good performance, supported by timely and prudent procurement strategy and effective placement during the season. Further, we have sourced adequate volumes of P&K fertilizers, ensuring preparedness for the kharif season. The demand for phosphatic fertilizers continues to grow, and we continue exploring and evaluating capacity in India or abroad. On the marketing and farmer engagement front, we continue to strengthen our digital outreach. Our Chambal Uttam Krishak Mitra app crossed about 100,000 downloads, and we have launched a quarterly digital marketing newsletter. Our social media campaigns around National Farmer Day and World Soil Day further enhanced Farmer Connect and our YouTube channel received YouTube Creator Award and the Silver Play button, reflecting growing engagement. Lastly, with respect to our Technical Ammonium Nitrate project, the progress is ongoing with EPC work largely completed at 92% as of third quarter and construction activities are in full swing. The date of completion is scheduled for April 30, '26. As at the end of third quarter, we have incurred a project expenditure of INR 1,184 crores out of the total estimated cost of INR 1,645 crores. TAN is a very important focus area for CFCL, and vertical and horizontal expansions are being actively explored. Our joint venture IMACID is performing well. The increase in P2O5 production capacity from 5 lakh metric tonnes to 7 lakh metric tonnes is expected to be implemented by December 2026. Further, the sulfuric acid capacity is also being increased. It is expected to be implemented a year ahead of -- a year ahead in financial year '27. This will optimize its operations and increase the profitability further. Overall, our operational performance during the quarter reflects steady progress across core and value-added segments, continued portfolio expansion and disciplined execution, positioning us well for the coming periods. Finally, let me walk you through some of the detailed financial performance for the period under review. On a stand-alone basis, for the third quarter of financial year '26, revenue from operations grew 20% to touch INR 5,898 crores. EBITDA for the quarter came at INR 821 crores, up 6% despite taking a hit of INR 31 crores on account of labor code, with EBITDA margins at 13.92%. Profit after tax was INR 565 crores, up 12% year-on-year with PAT margins of 9.57%. For the 9 months ended financial year 2026, stand-alone revenue from operations increased 27% year-on-year to INR 18,009 crores, EBITDA rose 4% year-on-year to INR 2,424 crores with EBITDA margins at 13.46%. Profit after tax for the period grew 16% year-on-year to INR 1,804 crores with PAT margins at 10.02%. I will again remind you that this is after taking a hit on labor codes of the extent of INR 30 crores this quarter. On receivables and subsidy flows, during the quarter, we received subsidy of INR 3,880 crores compared to INR 3,349 crores in the corresponding quarter last year. For the 9-month period, subsidy received stood at approximately INR 10,228 crores, broadly in line with INR 10,353 crores received in the same period last year. As of 31st December '25, total receivables stood at around INR 2,346 crores, comprising market debtors of INR 367 crores and subsidy receivables of INR 1,979 crores. In terms of segmental performance for the quarter, our Urea segment delivered stable performance. Urea revenues in the quarter stood at INR 3,708 crores, which remained broadly stable year-on-year. EBIT margins remained broadly stable at around 17.28%. Urea sales volumes were largely flat at 9.83 lakh metric tonnes in the quarter compared to 9.88 lakh metric tonnes in the same quarter last year. In the Complex Fertilisers segment, revenues increased significantly to approximately INR 1,850 crores in the quarter, reflecting year-on-year increase of 81%. Sales volume also grow -- also rose to 2.94 lakh metric tonnes compared to 2.13 lakh metric tonnes last year, reflecting strong seasonal demand and EBIT margins improved modestly to around 1.4%, supported by better operating leverage. The CPC, Special Nutrients and Seeds segment continued to deliver robust year-on-year growth. Revenues increased 33% year-on-year to about INR 340 crores in the quarter, representing strong growth driven by portfolio expansion and improved penetration. EBIT margins remained healthy at around 22.8%. On a year-to-date basis, the Urea segment delivered stable performance with revenues around INR 10,134 crores in 9 months FY '26, whilst EBIT margins remained steady at around 16.3%. Urea sales volumes were largely flat at 27.3 lakh metric tonnes, respectively. The Complex Fertilisers segment recorded strong growth with revenues increasing sharply to approximately INR 6,702 crores in 9 months FY '26, a year-on-year increase of 180%. Sales volume increased to 11.7 lakh metric tonnes, led by strong growth in DAP, TSP and NPK. EBIT margins moderated to around 4.4% from 6.87%. The CPC, Specialty Nutrients and Seeds segment continued its healthy momentum with revenues growing to about INR 1,172 crores from INR 887 crores and EBIT margins improved slightly to 23.69%. Overall, the year-to-year performance reflects stable execution in Urea, strong growth in Complex Fertilisers and continued momentum in value-added businesses, reinforcing the strength and diversification of our operating portfolio. With this, I would like to hand it back to the moderator and open for question-and-answer session. Thank you.

[Operator Instructions] We take the first question from the line of Prashant Biyani from Elara Securities.

Sir, when are we going to start the trial run for the TAN plant?

We are just at the cusp. In fact, we had started the steam blowing and other pre-commissioning activities. So that part is for the WNA plant. And for the ANS and melt, we should be doing that shortly thereafter.

But the end product should be out by, say, March onwards?

April.

Okay. And sir, what would be your expectation from the upcoming NBS policy?

NBS policy, we believe will be more or less a continuation from the past, wherein I do not expect the government to go opening up the DAP segment. But as you know, the other parts of the NPKs are open in terms of pricing. I would believe that that will be more or less the -- what they will continue to go forward. Already have a mechanism, and that mechanism of DAP has worked so far, although there are now increasing difficulties in terms of working capital management because of blockage of GST and all that. But I think the government is seized of the problem and they'll come with a resolution. More or less a continuation.

Right. Sir, for our urea plant, there was some unscheduled stoppage in Q2 as well, if I recollect.

Q2, yes. Q2, yes. Q3, we had a minor stripper leak for 3 days, that's all, in Gadepan 1 plant. But otherwise, it has been a steady quarter in terms of production.

And there will be further maintenance shutdown in 4Q?

Yes, there will be a maintenance shutdown for Gadepan 2 plant effective 20th February, which will take about 30 days, 35 days.

Okay. Sir, traded business EBITDA per tonne was around INR 900, I believe, this time. While it has improved year-on-year, but on an absolute basis, it seems to be low. Is it that on a per bag basis, it is higher and the overhead cost has taken it down to INR 900 or it is at that level only on a per bag basis as well?

[Operator Instructions] Ladies and gentlemen, we have the management line reconnected. Prashant, if you could please repeat your question for the management.

Yes, sure. Sir, traded business EBITDA per tonne seems to be at around INR 900 per tonne, which is higher year-on-year, but on an absolute basis, it seems to be lower. So my question was on a per bag basis, it is higher and the overhead cost is dragging it down or it is at INR 900 on a per bag basis as well?

I don't -- see, the way it is to be seen is that we had significantly higher capacity also sale of DAP. DAP is a fixed margin business despite the higher cost that we see. Procurement was done at much higher prices in this quarter, although the government gives you a fixed percentage or fixed number, INR 1,026 or some such number because it's 4% of the MRP. So that drags the margin down.

But sir, we had decent mix of NPK and MOP as well.

No, that's okay. That's okay, but the very large quantity or large price increase in DAP, it went as high as $850 or something like that. So if you do the math, INR 1,000 on something like INR 60,000 is a very small amount.

Sure. And any communication from the management regarding profit calculation or cost calculation for G3 post expiry of benefits?

No. As far as we understand, we have waked up this issue with the government. We have met the requisite personnel, but they said that we have to start the exercise. They are busy with other things on other matters so far. One of them, of course, is the futuristic expansion of capacity in the country. And they are caught up with some other things. So we have not been able to start on this so far. We have touched base with them at least twice in the last quarter.

Okay. And lastly, sir, any update on investment plans after TAN? You have briefly touched upon, but some clarity...

I said TAN remains a focus area for CFCL and vertical and horizontal expansion are being actively pursued. I think that's a very sufficient indication of what we want to...

[Operator Instructions] We take the next question from the line of Viraj Kacharia from SiMPL.

A couple of questions. First, any update you can give for G3? I think it's kind of -- the policy benefits expire by the end of this year.

I think I've just explained that we do not really have a handle on this, although there are precedents, but we do not know what the government is actually going to do or what thought process they are going to follow. I have touched base with the -- generally with the people who matter in this, and they have said that they have not yet started the exercise. Once we have a start on the exercise, maybe I can give you some explanation on this.

But in terms of precedents, can you give some perspective, what are those? And how does it positively or negatively affect?

Precedence is what they have been doing for the past for other -- in the past, what have they done for our other plants. So briefly, it is considers the net fixed assets and then the return on net worth and so on and so forth. So it's a calculation based on that. Given that Chambal III, that is Gadepan 3 has finished its tenor, in what way they will treat these numbers is something open to question. We are not hazarding a guess as to what they will do. The numbers could vary from our estimate, both positively and negatively. So we have to see because normally, they take a 15-year span for depreciation and so on and so forth. But currently, this plant is only 8 years into its life. So what exactly will be the parameters they will choose for NIP 2012 units going forward because this will be a template not only for us, but for all other plants that will follow through. That is Matix is there, HURL 3 plants are there and so on. So it will be -- have to be very well thought out because what they will do with us will go forth for others also.

And sir, in terms of TAN project, any perspective if you see, how should we see the scale up happening in FY '27? Should we see a 70%, 80% or even a higher kind of utilization?

We do hope that we have the capacity in terms of running the plant. We have trained up our people. I don't think production is going to be an issue. We have to see how well the market absorbs the product with something in the future. And that is the key because at the end point, we have to see, and we are fairly confident we have our people in place, marketing team in place. And I think we have, I think, today, the most modern technology available for this kind of product. So at the moment, I don't see any showstoppers as far as reaching a very healthy capacity utilization, 75%, 80% plus. I don't see any problem.

Okay. And sir, I think last just 2 questions. First, in the opening remarks, you talked about us signing an MOU or a licensing deal with MNC. Can you just explain what does it pertain to? In the sense, is it purely for domestic market or it's more an opportunity? And how can this...

I think you are talking about -- we were talking about TERI. TERI is a very well-known institute in terms of sustainable agricultural solutions in biologicals. We had, as you know, entered into an understanding from them to do research on specified product lines and with specific personality traits or whatever of the products. Now we have also commissioned a laboratory to do the specific job there. That is one. Secondly, as we have -- as I indicated, there is a pipeline of products which are going to come from now up to 2028. They are, in fact, if I'm not wrong, and Ashish will correct me there, there are about 8 or 9 products in various varieties, which are including bio nematicides and fungicides and so on, on which we have complete IP control. And as they form, and we feel confident we can go, I mean, beyond our borders to sell that kind of thing. And we are having interesting inquiries from some 1 or 2 companies who are looking at our performance of our product. And they might, after their set of field trials or getting convinced on the product capability, could take it abroad as well.

Okay. But any other tie-up? So I think we were exploring in-licensing opportunities with other MNCs for the CPP (sic) [ CPC ] portfolio and same for manufacturing [indiscernible]

That is continuing. We are introducing products that we said our new products are coming from those so-called formal and informal arrangements with the multinationals that we are talking to. And we have progressed some way. First of all, we have a company called Nutrien worldwide, which is going to give us some carbon-related products, which will come in next year. And then there are products coming from Nichino, which we already have. We are also talking to Syngenta, Corteva, all those people. So as they get confident about our reach, capability to market the Gen X or 1.5x products, definitely get into that. And there are both arrangements in terms of the volumes of sales that we have to achieve, the geography in which we have to do that, et cetera, et cetera. So those are arrangements that we have with many of our corresponding companies who are now taking the company seriously in terms of reach, in terms of our marketing capability, in terms of the trust we enjoy with our brands.

[Operator Instructions] We take the next question from the line of Sandeep Mukherjee from SKP Securities Limited.

Had certain bookkeeping questions, like what was the gas cost for the quarter?

I'll ask Mr. Anuj Jain to give the answer to that.

Quarter was $14.6 on NCV basis per MMBtu.

Okay, sir. And sir, if you can please give the plant-wise production volume for G1, G2, G3?

Okay. So Gadepan 1 for the quarter, we had about 2.84 lakh tonnes produced. Gadepan 2, it was 2.6 lakh tonnes. And Gadepan 3, it was 3.51 lakh tonnes. So total 9.04 lakh tonnes.

Okay. Okay, sir. And sir, actual Gcal for G1 G2 for Q3 and 9-month, what would be the number?

Mr. Baijal.

Yes. I couldn't get your question. Could you repeat, please?

Sir, the actual Gcal energy efficiency for G1 and G2 for Q3 and 9-month, what would be the numbers?

I can only give you a range. They were quite a bit, I would say, 5% to 6% -- 4% to 5% lower than the norms for G1 and G2. And about, let's say, about 4% to 5% lower -- about 2% to 3% lower for Gadepan 3.

We take the next question from the line of Dhruv Muchhal from HDFC AMC.

Yes, sir. Sir, just a question on the NPK and the DAP business. So we are seeing that the input prices have increased both phos acid, sulfuric acid significantly, which will probably lead to an increase in the NPK pricing if you have to probably pass it on. And the DAP pricing remains steady because of whatever government policy. So does it start to have an impact in terms of the offtake of NPK because for the last 9 months, 12 months, we are seeing a good uptake in NPKs, probably also because of the shortage in DAP. But does the economics don't work very favorably for the farmers if you have to take that price hike? I mean just trying to understand how does this dynamic work?

Naturally, there is a substitution effect if prices are beyond a certain range. Farmers will tolerate a certain price gap beyond which they will not. Now that is also incumbent upon the availability of the substitute. Last year, the substitute was not available. To some extent, that is why the NPKs worked well for the industry. The second part is we are not prognosticating what is going to happen to the DAP availability this year. But you rightly said there are pointers which are worrying. One is that the price of sulfur is very high and not seem to be coming down very soon. The second part is that it has a knock-on effect on the price of phosphoric acid. And that also is not conducive to the production of a high (P) percentage fertilizer like DAP. So naturally, the cost of production of DAP is going high. From rock, yes, if people have got the rock route, definitely, they have still some margin left, although it's getting squeezed. But it will all depend on what the price fixation for DAP, for phosphoric acid happens in this quarter. But from my understanding, it has not yet happened, although discussions are going on. That is one part. The other part is that ammonia itself also has a little elevated levels at this point of time. What I'm trying to say ultimately is that it will depend on the price dynamics and what the government, of course, has got the policy for advantage, disadvantage as far as DAP is concerned for the importers, where, as I told you that the increasing involvement of working capital is an issue. And secondly, as far as the producers are concerned, they have a slightly different formula. I think if I'm not wrong, this past 6 months prices and then their subsidy is derived from the import of the actual import of the material for the last 6 months. How it will work for them is something that you should ask either Paradeep or Coromandel or somebody who is actually producing that. So that would decide the availability in terms of the DAP in the country going forward. The situation looked to be okay sometime back in January when prices were at INR 650 levels, INR 670 levels. But of late, they have climbed up rather sharply. My understanding is that they are reaching levels of INR 720, INR 730 already. And where it will end up and what it will do to the availability once again is something -- although the starting point this time is more favorable in terms of better stock position. It's a little complex interplay. I will not be able to predict. But I think still, there will be a demand for NPK in a certain percentage, and Chambal is well poised to take advantage.

Sure, sir. Sir, just to extend on this. So basically, there are 2 things. First is the pricing of DAP -- sorry, the availability of DAP and the relative price gap between DAP and NPK. So keeping the availability aside because that will -- I'm not sure how it will play out. But just on the pricing gap, I mean, is there space to take price hikes in NPKs for the cost increase or the tipping point is reached where the affordability versus the DAP becomes increasingly more challenging.

It is then a question of positioning and who has taken what position in terms of pricing in the market. So that is an important issue because, as you rightly said, there's a tipping point, whereby after which the consumption will drop to some extent. So that will be pressure all around. But on the same -- let's look at it this way, that the availability itself of these will be domestically quite constrained because the economics don't work out at all for NPKs. DAP, still there is some protection. In NPK, there is no option except for a grade like possibly 20, 20, 13, where also because of sulfur prices, margins are under pressure.

Sure. Got it. And sir, the second question was on the TAN, you mentioned about horizontal and vertical possibilities. So any -- if you can provide some more comments here, what these possibilities could be?

I think I've thrown a very broad and encompassing hint on this. The idea is...

Yes, it's a very broad encompassing hint, if you can give more. It's a very broad...

Horizontally means that you produce more of the same stuff and vertically means that you go forward in the value chain.

Got it. Sure. And sir, how -- when do you -- I mean, is there a point where you decide that you go ahead with this? Or I mean, how does that...

I mean there are 2 points to it. One is that we have to -- we decide with it when we go to the Board and say, okay, here is a specific proposal, okay, that this plant will be put at this place with this cost and with this return and this product kind of mix. And that is when we will announce. In the meantime, there are all kind of things going on in the background.

We take the next question from the line of Prashant Biyani from Elara Securities.

Sir, ideally for DAP, how much availability would the government want to ensure every year, be it from domestic production or imports?

As much as possible. DAP has now become as important a product as urea in terms of the requirement from the farmers. Ideally, in my opinion, what I have seen in the past, and Ashish can bear me out on that, is that we have seen levels of about 2.3 million, 2.4 million tonnes in April, which is -- was considered safe. But if you see what I mentioned in the first paragraph, that there has been extensive sowing of wheat and so on. Of course, some part of it has already been used as basal dose, which is where most of the DAP goes. But there are sometimes top-up pressing and so on, what they call. I would like Ashish to explain that further. So my feeling is that the consumption in the balance period from January to March is also not going to be a small number. What it will do to the availability on 1st of April is something to guess at, at the moment. But I'll ask Ashish to give some color on this.

Okay. So Prashant, if you look at the DAP availability as of now vis-a-vis end January last year, so the inventories end of January last year were around 1.3 million tonnes, and the end of January, it is around 2.5 million tonnes. And if you look at the import contracts and the production for February, March, we should open up with an inventory of 2.8 million tonnes from 1st April, which is a very safe inventory to start the season with. So I think no panic as of now as far as DAP is concerned. Hope I have answered your question.

No, sir, my question was irrespective of any month in any calendar year, what is clear minimum amount of DAP would India want, be it from domestic source or imports?

So if you look at the capacities, India produces a minimum of 300,000 tonnes and a magnum of 360,000 tonnes in a month. So that's the range.

No I think, Ashish, what he's asking is what is the minimum comfortable inventory which the government would want. Now I think you should come from there, Prashant, that there is a kharif-rabi split in this. Total amount is about 105 lakh, 106 lakh metric tonnes. Although if you see the numbers last year and sometime, that is more due to availability. There was no availability. That's why the amount fell, although the Latin demand, in my opinion, is close to 106 lakh to 107 lakh metric tonnes. Now given that most of that, I do not know the exact split between kharif and rabi, you divide by the number of months and take a center point, and that would be the kind of inventory that the government would like to have. So assuming, let's say, I'm just doing a very, very crude math on this, most of the consumption takes place in rabi, somewhere around 55%, 60%, I think, goes into rabi. So we are talking about 6 million tonnes in the 2.5 months or 3 months of rabi, which is active. So we are talking about 2 million tonnes a month will get flushed out of the system. If that is the case, the government should have by rabi at least 3 million, 3.5 million tonnes in its pocket. That's the way to look at it.

And sir, how much is the net cash and liquid investment right now?

I will ask Anuj to answer this question.

About INR 800 crores as of today.

Okay. And Mr. Baijal, it has been a while since you are talking about overseas investment. Nothing concrete you have shared as of now.

I can only report that we are in active discussions, and we continue to have active discussions. But as I said last time, sometimes you break off and then engage. So this is a time when I'm talking to you, we have had a significant reengagement. And where it will lead to, we'll have to wait for some time. But I think there has been a reengagement and a positive reengagement.

[Operator Instructions] We take the next question from the line of Viraj Kacharia from SiMPL.

Any color you can give how we are looking at ramping up? [Indiscernible]

I think your voice is breaking. I could not really hear.

Yes. Is it audible now?

Yes, you are audible, but there was a break in the sound.

Yes. So I was just trying to understand how are we looking at scaling in the seed business? Any tie-up with MNCs?

No. We are doing a two-pronged approach. First of all, this year, we just introduced and tested the market. And we went into mustard, we went into pearl millet, we went into wheat and so on. Small quantities to just test out what really happens in this market, what are the operating realities of this market. So we have got a good fix. We are going to scale this up. While we look for opportunities, and there are -- because of our entry into this, we have started receiving inquiries of a significant nature on people who want to tie-up or offer a stake. So we will look at those. And once we have something to tell you, we shall.

But in the stake also, we will be looking at a majority ownership kind of structure...

We don't know what will work depending on the valuations and so on. We don't know what will work. But we have started receiving inquiries, that much I can say.

Okay. And second question was on the CPP (sic) [ CPC ]. We were also evaluating into the own manufacturing setup. So any decision we have come to in terms of...

No. We really have not thought in terms of proactive going out and snagging some asset or something like that. But what we are talking to 1 or 2 people is that they develop some generic combinations for us. And although this is very embryonic, very embryonic, we have had just a discussion on this, there are people who are willing to develop our white label generic combinations, which we will then see if it is -- once it is -- and then also manufacture it for us, if it is possible. So at the moment, asset acquisition in this site is not really on the table. But this way, where we get, again, a TERI kind of model where we get stuff done for us and then also get manufactured is what we are actually exploring.

[Operator Instructions] We take the next question from the line of Karan Gupta from CAVI Capital.

One question on the demand-supply dynamics in the TAN market. There were some recent reports about CIL also wanting to set up its own manufacturing facilities. So could you just talk a little bit more about your thinking about the market?

No, this is a good. It's an expanding market. Let me tell you, we are anyways growing in the market, I think, around 5% to 6% CAGR, and that you can recheck from Deepak as well. But -- and the market will shortly become short -- I mean long in the sense that there will be some capacities added by us by even Gopalpur at Deepak and so on in the next 1 or 2 years. But overall, if you see the trajectory of what's going to happen in India, infrastructure, data centers, copper, cement, requirement of power through coal and so on, I'm pretty confident that the trajectory is going to go higher. Secondly, the other trigger that we think is going to happen is the private sector involvement in mining, especially metals and so on. This is going to open up a big way in the next 3, 4 years. That is a real opportunity because there will be requirement for specific stuff there, which is why we talked about some kind of vertical integration into this. Then that, in any case, doing vertical integration insulates us to some extent. The second part is that we have heard about CIL and BHEL. Coal technology is -- definitely gives a lot of advantages in terms of ammonia manufacture, but it's a difficult technology to master and it's very emission intensive. We have a lot of respect for Coal India and BHEL. But by their own admission, they are talking about 4 years from now. So we are looking at a space where the market is already going to go long. And at that point of time, I think we will have enough space for everybody around, I think, to tackle this issue. We are quite confident.

Okay. Another question is regarding capital allocation. So apart from the expected TAN expansion and any inorganic opportunities, is there any consideration of increasing cash returns to shareholders?

I think if our plans work out, we don't have anything to offer in the next 1 or 2 years. Beyond that, we'll see.

Okay. And lastly, on the pending dues -- subsidy dues, when do you expect to receive those from the government?

My understanding is it is a cycle, goes back and forth. We have a total of [Technical Difficulty]

[Operator Instructions] Ladies and gentlemen, thank you for your patience. We have the management line reconnected. Karan, if you could please repeat the question for the management.

Yes, I think they were in the process of telling us about any...

I will -- see, if I'm not wrong, as of end of December, we had something like INR 1,600 crores, INR 1,700 crores or a little bit tad more INR 1,500 crores here or there. That's my memory. Anuj can feed me on that. That was outstanding as receivable from the books, of which about INR 700 crores is what has been billed and the balance is unbilled because there is a certain process of flushing it out through POS and all that. So that is -- that will keep on coming and going. So we know that the government has taken some extra for the sector by way of some supplementary brands and all that. So I think we are comfortable there. I don't think there's much of an issue. But you can either -- I can ask Anuj to give you the exact numbers.

About INR 1,980 crores. And as Mr. Baijal rightly said, that's about INR 600-odd crores is the billed value. Balance is, because of some POS clearance or some advantage, disadvantage and freight, et cetera. And in January and February till date, we have received about INR 1,000 crores.

We take the next question from the line of Akash Maji from IIFL Capital.

Can you please share the urea sales volume for Gadepan 1, 2 and 3 facilities?

I'll ask Anuj to answer that.

Yes. So we have sold in the quarter, Gadepan 1, 2.87 lakh tonnes, Gadepan 2, 2.79 lakh tonnes, and Gadepan 3, 4.8 lakh tonnes. So total 9.8 lakh tonnes.

Okay. And what would be the estimated volume loss from this unplanned shutdown in 3Q? Would that be minimal? Or is there a figure for that?

So that's not much. We are talking hardly 3,000, 4,000. We had enough stock to make up for that loss of 10,000.

Okay. The last question would be, given the unplanned shutdown in 2Q, now in 3Q and now the planned shutdown in 4Q as well, what would be the urea volume growth that you're expecting for FY '26? Is there any figure for that?

I think urea volumes normally, Mr. Akash, remains static because we run as it is beyond 100% capacity for all 3 plants. We are fully and more exploiting the capacity. And these plants have a certain number, which -- beyond which you cannot sort of exploit capacities, unless you run for a larger number of days in a year. So as you know, we are already in a 2-year cycle before we do turnaround for all the 3 plants. Our effort technically is to go to 3-year cycle in this. As and when we do that, some unexploited capacity will come out in all 3 plants.

[Operator Instructions] As there are no further questions from the participants, I now hand the conference over to the management for their closing comments.

Thank you. I would like to thank all of you for the call today, and I hope that we were able to address all your queries. If you have any further questions, you can reach out to IR partners at Valorem Advisors. Thank you once again for participating in the call.

Thank you. On behalf of Chambal Fertilisers and Chemicals Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.