Chambal Fertilisers and Chemicals Limited ($CHAMBLFERT)

Ladies and gentlemen, good day, and welcome to the Chambal Fertilisers and Chemicals Limited Q4 FY '26 Earnings Conference Call hosted by Valorem Advisors. [Operator Instructions] Please note that this conference is been recorded. I now hand the conference over to Mr. Randy Ken from Valorem Advisors. Thank you, over to you, ma'am.

Good morning, everyone, and a warm welcome to you all. My name is Bhuwania from management vectors. We represent the Investor Relations of Chambal Fertilisers and Chemicals Limited. On behalf of the company and Valorem, I would like to thank you all for participating in the company's earnings call for the fourth quarter and financial year ended 2026. Before we begin, as we 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 sorry to educate and bring awareness about the company's fundamental business and financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call, and handing 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; Mr. Tridib Barat, Vice President, Legal and Company Secretary and Mr. Vivek Mishra, Business Head of TAN. Without any delay, I request Mr. Abhay to start his opening remarks. Thank you, and over to you, sir.

Thank you, Purvangi, and good morning, everyone. Thank you for joining us in this conference call to discuss our fourth quarter and financial year ended FY '26. The Indian fertilizer industry faced a challenging environment in 2026 marked by global geopolitical uncertainties, elevated energy prices. volatility in the raw material market. India elite fundamentals remained resilient, supported by applicable southwest monsoon at 108% of the long period average. And the revolver of normal and stock drop showing activity across both [indiscernible] and [indiscernible] side. Carriage stood at 112 million Heta and Ravi showing at around 68 billion [indiscernible] record food and production of gearing 348 million tonnes. The Indian agriculture sector to around 2.4% in FY '26 despite uneven climate conditions. India achieved a record for trial production of INR 53 lakh metric tons during FY '26 across both UV and EDLP sectors, reflecting continued capacity expansion and improve product availability across regions. Fertilizer demand also remained healthy during the year while the government continues to support the industry to stable urea pricing, robust subsidy allocation, BBT implementation and closed quarterin industry participants to ensure uninterrupted supply across the country. Ahead of the [indiscernible] 2026 season, the total fertilizer inventory stood at around 200 metric tons equivalent 2.51% of seasonal requirement as compared to the normal level of 33%, supported by strong advanced stocking and efficient logistics management. During Q4 FY '26, geopolitical mentions in West Asia led to sharp volatility in global fertilizer and energy markets. India continues to remain dependent on imports for key raw materials such as LNG, ammonia and sulfur. During the quarter, disruptions in supplies from Middle East resulted in volatility in availability and pricing across the industry. Constant ammonia places increased sharply towards $890 per tonne grade sulfur prices also increased from $99 per tonne. Elevated LNG prices further pressure input economics of the industry. Given India's important comments of key raw materials, the sector for higher sourcing costs, supply disruptions and logistics constraints during the quarter. Although the government raised the NGF subsidy rates upwards were about 10%. Industry margins would remain under pressure due to high raw material and cost that will be different. So during the quarter, the government also took measures to prioritize gas availability for domestic urea manufacturers, which help meet the impact on production to a very large extent. Our lower gas availability during part of the quarter impacted the capacity utilization slightly and energy efficiency for the sector. Domestic phosphatic fertilizer production includes increased during FY '26, while imports of DAP and NPK fertilizers also go sharply to ensure availability. Within the phosphatic segment, NPP for ag continues to be sales while companies increased diversified sourcing across Southeast Asia, Africa, Canada, Russia and China to reduce supply chain risk and improve sourcing security. From an agricultural perspective, the year remained broadly favorable reservoir levels across the agricultural states remain healthy and supported strong crop sowing acquisition in both [indiscernible] business healthy growth led by lead pulses and males were early indicators for the upcoming carry season also remain encouraging. -- rural demand trends remain to remain supportive tier consumption across seasons. With this backdrop, let me move to our operation and our financial performance for the fourth quarter, so wholly at 26%. Our crop protection chemicals and Specialty Nutrients business delivered another year of strong growth during FY '26, driven by higher market penetration expanding product portfolio and improved contribution from value-added offerings. Business continued to witness strong growth in both revenues and margins with contribution increasing by around 27% Y-o-Y. During FY '26, we won 17 new products spanning herbicides, and [indiscernible] up the presence across key crop segments and geographies also continue to build healthy innovation pipeline with working new top protection products and on specialty metal product plan for 2. The biological business continued to scale up well. The robust increase about 30% in volume and 57% growth in revenues, reflecting increased farmer adoption of sustainable agricultural solutions, bottom [indiscernible] biogenic [indiscernible] product introduced in Q1 FY '25 with a significant increase in contribution during FY '26. The product is developed through a value process and contains 10% P205 with encapsulated biomolecules such as polycatites and lipoproteins. Two of our marginal products, [indiscernible] have marked our almost 3 million acres since launch, supported by increasing awareness and fee level demonstrations -- during the year, we also introduced a water solidaria partner are come to Paris targeted precision farming, drip irrigation and high-value costs. Further sending the portfolio, we've launched 4 new biological products across fungicide and the mitotic category during the year. Additionally, we partnered with Keri to struggle with Sapar center of excellence for advanced and sustainable advice solutions which will focus on research and development of next-generation agricultural technologies. Coming to our state business, we expanded our portfolio during FY '26 with the introduction of new products across almost and part category. -- ensnare response and field performance has been very encouraging, and we continue to strengthen our portfolio. The coming year will be increased emphasis on serial and research variety. Our bulk fertilizers business delivered a robust performance during FY '16 despite a volatile.... [Technical Difficulty]

Ladies and gentlemen, the line for the management has been disconnected. Ladies and gentlemen, the line for the management has been connected. Over to you, sir.

Yes. Coming to our seeds business, we expanded our portfolio during FY '26 with the introduction of new products across wheat, maize, mustard and bar categories. The initial farmer response and field performance has been very encouraging, and we continue to strengthen our product portfolio. The coming year we'll be seeing increased emphasis on cereal and research varieties. Our bulk fertilizers delivered a robust performance during FY '26 despite global volatile operating environment. The phosphatic and potassic fertilizer portfolio segment performed well during the year, supported by effective sourcing, strategic inventory planning and timely market placement. We also secured Product availability for upcoming [ kharif ] season despite continued uncertainty in global market, raw material market and supply chains, urea volumes for the year were more or less marginally lower due to an unscheduled shutdown at one of our plants in quarter 1, which temporarily affected production during. During FY '23, we continued our engagement initiatives through digital platforms and outreach programs. Our social media presence expanded significantly during the year with both Facebook and YouTube platforms crossing 100,000 subscribers, while our YouTube channel received the silver play button recognition. The Chambal Uttam Krishak Mitra app crossed 100,000 downloads during the year, reflecting growing farmer participation and engagement. We also conducted multiple digital knowledge sessions, product awareness campaigns and farmer education initiatives aimed at improving outreach and strengthening connect with the farming community. Our technical ammonium nitrate project has significant progress during FY '26 and has now entered the commissioning phase. Dry runs for the wheat nitric acid plant have commenced and subsequent commissioning activities for downstream TAN, including ANS melt and HD products are also underway. The project is being developed using state-of-the-art technology from Kafale, Switzerland and has a capacity of 240,000 metric tons per annum, representing Chambal's strategic entry into industrial and mining chemicals, making -- marking another important step in the company's growth trajectory. The initiative is aligned with India's broader focus on [indiscernible] domestic manufacturing, infrastructure development and energy security while also creating a new long-term growth revenue for the company. Finally, let me walk you through the details of the financial performance for the period under review. On a stand-alone basis, the fourth quarter financial year 2026, revenue from operations grew 14% year-on-year to about INR 2,785 crores. EBITDA for the quarter INR 255 crores, up 56% year-on-year with EBITDA margins at 9.16%. Profit after tax was INR 145 crores, up 46% year-on-year with PAT margins of 5.2%. For the financial year as a whole ended 2026, stand-alone revenue operations increased 25% year-on-year to INR 20,794rores rose 8% year-on-year to INR 2,679 crores with EBITDA margins at about 12.8%. Profit after tax for the period grew 18% year-on-year to INR 1,950 crores with PAT margins at 9.38%. Our subsidy receivables and subsidy flows, we received a subsidy of around INR 2,048 crores during the quarter as compared to INR 1,592 crores in the corresponding quarter last year. During FY '26, our subsidy receipts stood at approximately INR 12,276 crores, broadly in line with INR 1,945 crores received in the same period during last year. As of 31st March 2026, total receivables stood at about INR 2,075 crores comprising market debt of INR 121 crores and subsidy receivables of INR 1,954 crores. Coming to segmental performance. Our urea segment delivered stable performance, urea revenues in the quarter came in at about INR 2,432 crores, an increase of 8%. EBIT margins improved significantly to about 7.83%. Sales volume was marginally higher at 6.72 lakh metric tons as compared to 6.3 lakh metric tons in the same quarter. During FY '26, we saw a minor decline in the urea segment at around revenue being INR 12,566 crores, lower by 5%, while EBIT margins remained steady at 14.6%. The sales volumes declined 2% to stand at 34.06 lakh metric tons as compared to 34.7 lakh metric tons last year. In the complex Fertilizer segment, revenues increased significantly to 323 crores during the quarter, reflecting year-on-year an increase of 94%. Sales volume also rose to 0.65 lakh metric tons compared to 0.38 lakh metric tons, strong demand and steady increasing adoption of balanced fertilizers. Complex Fertilizer segment continued to perform -- outperform during FY '26 with revenues increasing sharply to INR 7,025 crores, reflecting year-on-year growth of 175%. Sales volume increased 12.31 lakh metric tons during FY '26 as compared to 5.64 lakh metric tons, led by strong growth in DAP PSP and NPK fertilizers. EBIT margin stood at around 4% during FY '26. The CPC Specialty Nutrients and Feed segment witnessed a decline in performance in this quarter, revenues lower by 21% year-on-year. However, EBIT margins remained healthy. For FY '26, the segment has delivered strong performance with revenues increasing by 30% year-on-year to INR 1,203 crores as compared to INR 926 crores in FY '25 and EBIT margins remained healthy at around 23.5%. Our joint venture in Mid is performing well. The increase in P2O5 production capacity from 5 lakh metric tonnes to 7 is expected to be implemented in December '26. Further sulfuric acid capacity is also being increased, which is expected to be implemented a year ahead in FY '27. Board of Directors has recommended a final dividend of INR 6 per share, totaling to INR 11 per equity share for FY '26 Overall, FY '26 reflected resilient execution across our core and value-added businesses despite global -- a volatile global operating environment, while the urea business continued to provide operational stability and healthy cash flows. The complex fertilizer segment delivered strong growth driven by TAP, TSP and NPK volumes. At the same time, our crop protection chemicals, specialty nutrients and biologicals business continued to scale up well with improving contribution, product expansion and increasing farmer adoption. Progress in technical ammonium nitrate projects, continued investment in sustainable agriculture solutions further strengthen the diversification and long-term growth profile of our operating portfolio. With this, I would like to hand back to the moderator and open for question and answers. Thank you.

[Operator Instructions] We will take the first question from the line of Amar Kotari from Acuitas Investments.

Yes. So congratulations, sir, on a wonderful set of presents. So the first question that I have is I think the last time we. You said the gas cost was about 20%. Can you give us an idea what the current gas costs are looking like for the fourth quarter?

They will be around the same number. We are still in the midst of the quarter. Currently, what I understand, it will be 18 plus, 18.5% plus -- it may be around.

Okay. And sir, this quarter, we have seen a jump in receivables. So I think is almost from INR 367275 receivables and we have also seen an increase in short-term borrowings. So can you give us an idea on what those are?

See, these are some short-term as far as short-term borrowings are concerned, these are small [indiscernible] mismatches, which happen, but they will be eventually even out during the course of the year. The company more or less on a stable feel as far as financials are concerned, as you know. As far as we have increased in receivables are concerned, we have a process called escalation and de-escalation. Sometimes what happens is that the government has compensated us on a base of a higher gas number. So that continues when you are actually consuming at a lower cost than you tend to accumulate cash because we get more subsidies than what we would be actually spending level starts happening if they have derecognized that subsidy or taken it back, then you get different questions. And secondly, as we go forward, as you know, that the prices are going up from the base, there will be some amount of escalation, which we have taken up with the government to give us interim relief in terms of cash flow. So I am very hopeful that the government will look at this very [indiscernible]

But sir, if we see the gas prices elevated for the rest of the year, do you think that this could be a problem that could pop up and continue probably in the end of the year?

See, there is a cycle for about -- first of all, there is a -- what they gave us a provisional price for the previous , which is applicable for the next 1 or 2 quarters. What we are going to tell them, in fact, what the industry is continuously telling them is that there has been a dollar increase to the gas price increase -- so let me give us interim relief, pending final calculations, which I think we are very sympathetic to hear into. So that's what we have. We are hopeful that we'll be able to manage this issue, not a big problem.

Okay. But sir, right now, I think we are all aware that government is running a bit thin on its results. We today for the petrol and diesel price increase, we have seen the other expenditures that they'll have to make in terms of phosphating and for urea also. So do you think that situation like the last time we had this in '22, '23 could arise, let's say, in terms of receivables going up.

No, I don't think that is going to happen. This government, in particular, are very clear that fertilizer is a very, very important sector to support. And you have seen the kind of support that they are in terms of purchasing it maybe even higher costs. So there is a clear focus on [indiscernible] being a very important element of the economy. And so this support, I think, is likely to continue despite the costs and I would guess as to how much the amount of increase in subsidy is going to be. But I hear from the concerned quarters that whatever it takes is the Worldline line there. whatever it takes to support the segment will be available.

Got it. So for the TAN, I think at the committing and I think you gave the update on the same. So at this caring -- do you see the capacity being to 75%, 50% that we could have done in a year?

Yes, definitely that Mr. Minda Goyal has promised me that by all means he will 25%, 80%. That is his commitment to me. So it is his commitment to me, and I'm sure that he will meet that.

And I'm sure you're aware TAN prices are up by 40%. We have had Russia also pulling up from putting a on the TAM exports to India.

We keep a tap of what's happening in the market. Mr. Mishra keeps me giving a daily report on what the diaries of [indiscernible] .

And then just last question. So this year, we had a very good growth in terms of complex fertilizers, particularly DAP. So do you think in this year in terms of volumes, do you see that we'll be able to deliver growth on this because there will be limited availability, let's say, you said that at the current prices that are elevated.

So you are very right that this year, availability, especially in the phosphatic segment is likely to be constrained. We do hope that we have a better sense to prevail in terms of it is not a question of production question, logistics. First of all, let's understand that. We have many ships above 28 or 29 ships which are stuck up in the hormones. They are carrying material. They are there, load and so on. So it is more a question of logistics than production that is firstly 1 thing to understand. That means if we have an opening up of format in the next 1 month or so, even if you take a delayed adjustment because you think takes some time to adjust 3 months time, things should return to normal. So that is one thing. Secondly, as far as Jumbais concerned, we did make some strategic purchases very big army in the beginning of the year, and we are covered at least in July, August in terms of our stock.

And sir, just last question. I think in the last call you on new CapEx that we could be in that and a substantial CapEx. I think there were ideas that you guys had in mind item for an water, a new plant that we could set up or a pan expansion or a new product line. So is there any further guidance you would like to give on the same.

The only guidance I will give is that the government looking to the situation that is there are very, very serious in terms of pushing out the policy to attract investment. And for our part, we are very ready in the sense that we have land. We have the environmental clearance. I'm happy to report to you on that issue. We have the water requirements tied up. And we have already started talking to the technology team. Some of the cloud that visited our plant -- so we are ready. At the moment, the government pushes the button within 5, 6 months, we will be on the block to run to this particular situation. That is one. Secondly, they want to talk about the TAM and so on, there will be subsequent development, but we are also ready with that in terms of making an analysis where and how we should put that plant. So that is -- but that is the word, and I will not be able to review much more on that. But as far as the fourth plant in terms of we are concerned, we are very, very advanced in terms of execution of this.

We will take the next question from the line of Rishabh from [indiscernible]

Sir, this quarter, we have seen a significant growth in EBITDA per ton for urea what has led to this sharp jump in the quarter? And how to ascertain this quarterly volatility in EBITDA per ton for the last 3 quarters, it has been more or less planned, but we have seen a sudden jump in Q4.

No, it is more to do with the product mix. We do know that we do sell a certain amount of ammonia -- so we had better margins there.

How much on the ammonia volume for this quarter?

Okay. That you will discuss offline.

But it was primarily because of maybe higher volume and price of ammonia.

No, no. It is not we have -- there is a price increase moot. And of course, production of UV is also there -- and we have -- the sales of Una also was higher by about 30,000, 40,000 tonnes. So all of that taken -- but sir,.

Regarding urea volume, 2 years back, same quarter, we had more or less same number of urea sold. But it was a [indiscernible]

Sometimes what happens is that you are doing maybe 2 plants at that time in terms of annual turnaround. So debt of that nature also occurred. This year, we did one plant, not to -- so that has impacted, although we had planned to do something much earlier, but we did not do because of gas drops and so on. So that debit in terms of the cost of repair and maintenance also went on a smaller base, it makes a bigger difference in terms of percentage.

Right. So this in an had around 3.4 million tonnes of real sales. Last year, it was 3.47%. Would we be touching around INR 3.5 crore this year. Is that in the real reality.

We have to have 2 shutdowns. This year was in the end of the year. And then in the beginning of the year, we are currently undergoing on shutdown to 1, which is slightly longer down will tend to be happening until about June, middle of June. So the number that is there that we are going to do is more or less the same, although we'll ramp up and try and ramp up once the -- once we have completed the turn around, run it at a little higher rate. We are confident that we will do better than last year, but the weather with that 35% you have to -- it's a touch and go there, but we will definitely exceed what we did this year.

Sir, how much was the urea inventory with the company at the end of [indiscernible]

It's about 10,000 [indiscernible]

And sir, for quarter 1, till date, how much of our quarterly requirement of gas for all the 3 plants combined, we are getting some or from the gain and number [indiscernible]

No, we have more issues in terms of that availability as of now, thanks to very active procurement by the government for which I should thank them. They have really been proactive on this issue.

We will take the next question from the line of Manas Berica from SR Equities.

So as we commission the TAM term. So can you throw some light on the end of D&A this will be the important chapter for the for the [indiscernible] So can you give you some ad about what will be the EBITDA margin range for the time when you will operate at the full capital. And how does the market for the TAN looks like?

I'll start with the last question first. The market for TAN is buoyant out. The demand is there. And you know that we continue to emphasis on mining and infrastructure and all that is a strong growth driver for this particular -- for this particular segment of the market. So my view is that we -- for this year, at least, we do not have any issues in terms of the demand. And as somebody just said before this, the question before this, I made the comment about Russia not supplying so that the import market is also a little short. So on this basis, I don't think there's an issue in terms of the demand as second part with your question in terms of what would be the EBITDA, I think our budgeted numbers are very well there. In fact, we exceeded in terms of what the margins would be, and that's my feeling at the moment.

And secondly, are you expecting no high working at to requirement for this quarter due to the high side because as you mentioned in the start income government increased the price for the subsidiary by 12%. Is it part with our cost or our cost [indiscernible]

No, if I could understand what you are saying, Mr. Blicker is that if you are talking about the [indiscernible] , you are talking about the NPK. So as I -- if you understand this business is basically a cost-plus kind of business. So government recognizes the cost. And therefore, in terms of higher prices of gas, except for the impact on working capital, we are able to pass on the cost to the government in the form of subsidy, increase its subsidy. So it would not be a problem for us.

We have the next question from the line of Sandeep Mukherjee from SKP Securities Limited.

What was the actual retail of G1 and G2 and G3 on a G2 and G3 for the quarter -- for the full year, sorry.

Could you repeat that, please?

Sir, what was the actual energy consumption telemetric on for -- given and G2 and G3 for the year?

Definitely below the government norms, the percentage, good percentage. So normally, we do not read these numbers oily. But we are well below the established norms. Therefore, a certain amount of energy gain does accrue to us.

Right. Sure. And can you tell the sales volume of Gen3 for the quarter?

I will ask Mr. Anuj Jain to answer this question.

Sales volume for the quarter -- in the quarter 1 was 2.67 lakh tonnes. G2 is 1.52 lakh tonnes and G3 is 2.53 lakh tonnes.

We will take the next question from the line of Vishal Takoradi Investment.

I just wanted to ask you about the current capacity -- new capacity coming up. Can you give me some guidance about the turnover you are expecting in this financial year?

The new expansion on the , which is coming up today, operation is going to start today. That you are talking about TAM.

Yes.

Yes. So then we -- normally, our production level is about 700 tonnes per day. And assuming that we are able to start -- we'll start with the W production. Nitric acid. And then it goes to met production and then it goes to TAM, which will come by the end of the month or a little bit better than that. So let's assume that we have got about 9 months production to be very conservative. So we are saying that we are roughly about 60,000, 70,000 tonnes of production would be possible.

So can you give me some moving guidance as we can add the that.

This is a very volatile product in terms of pricing. Memory the can prices are up by 40%. Normally, they used to. So it will -- revenue guidance is dependent on what the number is. budgeted numbers normally for this is about or INR 70, INR 8,000 a tonne. That is the normal number that you might think about.

Okay. Are you also looking at this year, a buyback, you're pinot coming up with buyback because we do see promoters bandage shares in last quarter. So on considering buyback.

There is no such proposal on the table as we.

We take the next question from the line of Viraj from Syn.

Yes. First question is on the plan. So would we be able to reach a 60% or even higher utilization in the first -- and any color on the market dynamics the own challenges on imports of time into the market. So is the market right now where it ties -- or how would you describe the market subs.

[indiscernible] at the moment is short. I think the people want material. And in fact, the sooner we get it to the market, the better that's what the issue is. So that is one. The second is that going forward, it depends on what the geopolitical situation pans out that and what will be the stance of Russia in terms of exports. And -- but I can say that this an underlying growth the explosive segment and therefore, that translates back into ammonium nitrate increase is about 6% to 7%. And it's a heavy growth, I would say, given that we are already at 1.2 million tonnes of demand. So if we are saying 6%, 7% growth, we are talking about 70,000 tonnes per add-on yet or here that kind of number. So as of now, I don't think that it is more a question of how we produce and how we place it in the market and what is our connect with the customers and so on. There's enough room for everybody to play at the moment.

So in the first year should we expect or close for the utilization or -- and even in regard to your spreads.

That we know how to run continuous process technical plants. It all depends on how we successfully commission it, which I'm very hopeful that we will be doing it. We have the best technology. We have a brand-new equipment, and we have a competent team to operate it. So I don't see in terms of production while we should at -- that's certainly not

And in terms of in feedstock and raw material levity especially for urea or be for tanks. Do you think you are covered well for the current invest of the year?

I couldn't get you but I thought you were talking about raw material availability for business, basically ammonia. And ammonia has set produced in our case because we have got 3 plants producing pneumonia and we have got 4 -- 3% to 4%, 5% surplus on account of technical levels. So we don't see any shortfall on that side as far as TAN is concerned. So we are there in terms of quantities for matching quantities for ammonia.

And urea, sir?

On urea, of course, gas is the main component. We first make ammonia, then we make year. So as I've told you that the government are very proactive in getting the gas for the plants, fertilizer plants. So that I don't think is also substance. It's only a question of price.

Got it. But given where the prices are for urea and ammonium. Do you think that it's going to be perimerative for you to produce above [indiscernible] any color you can give?

No. I would suggest that you also have a look at where the IPP for urea, it is $900 a way of -- so this is not a problem in terms of production beyond RSC.

We will take the next follow-up question from the line of Aman Kotari from Acuitas Investments.

Sir, I think you had mentioned some cost structure and how you will be doing about a plan to tell you just I understand if we are potentially picking up a new urea plant, how would the project costs go? And how would the tax funding it?

See, we have tagged around and what has been happening in the sector lately. Prices 9,500 tonnes -- INR 900 crores to INR 10,000. So that is the upper-bound as far as how these projects are concerned.

1.4 million tons?

For 1.3 million tonnes, roughly to say.Now that you know the balance sheet has jumbled, so I don't think there is much of challenge in funding that. That is one. Second of all, in terms of the government policy, now that is the open question what exactly they are going to offer on the place or whatever other information that we have and we have been discussing, it's a dual good project.

Will we take the next follow-up question from the line of Tushar from B.

Sir, what would be the CapEx number for FY '27 and what will be the areas of investment?

FY '27, there will be some balance expense on account of the TAN project, of course. And plus there would be the normal routine CapEx of the order of about INR 170 crores, INR 180 crores, which is there regard in terms of either replacement or new more efficient equipment such as steam turbines for CO2 compressors and so on. So those are the standard kind of INR 160 crores, INR 170 crores to see.

What is the balancing amount in [indiscernible] ?

Total for together should be around INR 500 crores, [indiscernible] and TAN book to ever.

Sir, once we commission WME, we would be taking some time to start paying as an on -- so is it that we will store WNA till the fine we produce then or sell WNA in the market?

Obviously, we'll sell it in the market. There's a ready and good market for WNA at the moment. But I don't think there is -- yes, you are right that there is a sequential commissioning in this process. Our plants on both sides are more or less ready. But as you know that we have to run to ride on both sides and then commission and so on. So it will take a little bit tough time, but we are there as far as the most important component of the plant is a bone.

Sir, have we also evaluated making automotive grade area, while it does not come under the subsidy regime, but 75% of India's requirement is imported -- so any thoughts that you have evaluated the [indiscernible]

So we are -- no, it is definitely possible with our plants at least 1 stream or 2 streams we can take out to do that. And we are, in fact, having some very, very preliminary discussions on this issue. And we are telling the government also that this should allow us to do the second technical grade area for automotive. But it is very nascent, I would not put any. We give a time line on this. That depends on government [indiscernible]

Would require government a pool because gas has to be supplied through the [indiscernible]

Yes. Obviously, this is a requirement that they would allow us right? We have a long funds GNFC and GSS to do that.

Sir, any clarity on G3 profitability starting next calendar year?

What I can say is that what I said last time that the government are seized of the matters. The file has started. We have had 1 or 2 pricier discussions, to premature to give you any guidance on this. but it is moving that mutant because we have to be regime from December 1 onwards. The governments are quite aware. Currently, they are a little busy with other things, as you know, in terms of sourcing and so on. I'm sure in the full month of time when we will maybe a month or so, we'll engage more effectively with the government [indiscernible]

And just lastly, how much would be the net cash on the balance sheet?

I think at the end of the year, we were balanced with both -- I think almost cash was whatever cash on the books was more or less counter by the amount of short-term borrowing. Somebody asked that question in the very evening. But this is a fluctuating number. Once our subsidies get released in the first quarter and so on. So this will go down. And I'm sure we are already surplus, as Anuj informs me we are already surplus.

We will take the next follow-up from the line of Aman Kotari from Acuitas Investments.

So, I think you had also mentioned something about setting up a phosphatic politer business, primarily in the manufacturing side. So has there been a push by the government that you are seeing for increasing these capacities also?

The government, I know informally talking -- I cannot say anything about this. and it will not be proper for the changes that they are thinking of something on this area as well. But we have -- as I said, in terms of phosphatic capacity in gas, and we remain very keen on this. But there are 2 or 3 important issues, which need to be sorted out in this sector apart from, of course, the scale and pricing binding. I can't get what did you say?

Yes. I just mean pricing is also an issue.

No, no, at pricing is definitely an issue. But more than that, our issues with respect to for instance, in this sector, which is quite a problematic area, they have to sort out. We have been at it for quite some time with them. That's the tax issue, which is easily sorted, but they have to rework the entire GST around this particular sector. That is 1 part. Second part is the upfront investment vis-a-vis the value add, which you rightly said is suppressed because of controlled pricing. So we'll have to see a situation where we are relatively free in terms of pricing power before we can take this forward. And these 2 things, I think, are the important issues which we are getting for in terms of production in land, but our thoughts are not only limited to India, by the way. So that is something that, as we have said hinted in the past. This is something that remains an ongoing issue. We have had 1 or 2 engagements with somebody who could provide us possibilities outside India. And that is an ongoing affair. At the moment, we have had a break off due to this well situation and all that. We are ready to engage at some point of time with very near future on this issue.

So that would be a JV kind of structure that we'll be looking outside?

Yes, sir.

And sir, last question on the CPC and Biologics segment. I know we are gearing up with product launches for this year. What do you think is the strategy or the outlook that we have for the segment? How big do you think that we can get it in the next 2, 3 years? Considering, I think last quarter you mentioned multiple international companies that you were talking to an [indiscernible] Cotai. So how are you thinking about the segment?

So I'd tell you that nuclear are already more or less done in terms of engagement, we have got taken agreements more or less in place. So we'll be starting with the products very soon.

And those will be for cash [indiscernible]

No, no. They are specialized nutrient efficiency products, very high. Those are as you say, you see somebody should understand that the agriculture is moving in a different direction, which is no longer a pump. It is more precision. It is more specific to fire conditions. It is also very specific to muted use efficiency and application capabilities -- so we have to now move from a very generic to kind of specialized consumer inputs. So that is the way it is going, and we have to work with some of the international companies to bring products that really work. And one of them is what we are going to do is call I think with some carbon or something, which we are coming again, it's content to increase the carbon content in the soil if we have improved the 20 efficiency. So these kind of products plus [indiscernible] are already there with them in terms of some of the products we are already marketing.

Okay. And sir, how big do you think this could get for us in terms of our outlook.

Well, if we -- when we were talking through Nutrien -- they said that, look, what is the total market in India, we indicated in the region of $1 billion by the next 5 years. So you can understand what kind of content they're looking for. Maybe with a [indiscernible]

Thank you very much. As there are no further questions from the participants. I now hand the conference back to the management for closing comments.

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

Thank you, members of the management. On behalf of Valorem Advisors, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.