Coromandel International Limited ($COROMANDEL)

Ladies and gentlemen, good day, and welcome to Coromandel International Limited Q4 FY '26 Earnings Conference Call hosted by Elara Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prashant Biyani from Elara Securities. Thank you, and over to you, Mr. Biyani.

Thank you all for joining the call today. We would request Mr. Sankarasubramanian to start the session with his opening remarks, and then we'll follow it up with Q&A. Over to you, sir.

Good afternoon, everyone, and thank you, Prashant, for organizing this call. I'll begin with a brief overview of the business environment during the year, followed by a detailed comment on operations. And thereafter, I will request Deepak to talk on financial performance. The Indian agriculture sector in last year witnessed moderate growth with agri GDP expanding by 2.4%, reflecting the impact of uneven climatic conditions and softening agri commodity prices. The Southwest monsoon was above normal at 108% of the long period average. However, it's erratic distribution, delayed withdrawal affected crop cycles and rural consumption, particularly during the rabi season. Encouragingly, the reservoir levels were quite strong, supporting the improved sowing activity. As you all know, Kharif acreage increased to 112 million hectares and rabi sowing rose to 68 million hectares, culminating in record foodgrain production of close to 348 million tonnes. As on April end, all India reservoir levels are 115% of the last year's storage and 126% of the normal storage. South region is 93% of the last year's storage and 121% of normal storage. Going forward, weather forecasting agencies have estimated a below monsoon for the upcoming Kharif season. Based on the recent estimates, key operating southern markets are likely to experience largely normal rainfall. IMD is expected to issue the updated forecast, providing region-wise view in the last week of May. I think this can provide better clarity for all of us. Summer sowings have started on a positive note as on April end, crop sowing stood at 8 million hectares, marginally better than last year. As you are aware, Government has announced the NBS rates for Kharif 2026, increasing nutrient rates by 10% for [indiscernible]. These rates do not reflect the sharp increase in raw material prices and rupee depreciation post the Middle East crisis. Industry expects further support to address the affordability issue for the farming community. Industry has been constantly engaging with the government to address these issues, and we are hopeful of a positive outcome. Last year has been tough year for the sector as the supply disruption from Middle East has resulted in elevated prices, especially in the back end of the year. We have seen sudden spurt in key raw materials like ammonia and sulfur and availability of finished fertilizer has became a challenge. As you are aware, Middle East contributes significantly to raw material feedstocks and finished products. India dependence on ammonia and sulfur is upwards of 80%, and most of the shipments cross the Strait of Hormuz and thereby the disruption in the region has led to sharp rise in commodity prices. While [Technical Difficulty] industry stocks remain balanced at this point, industry is making concerted efforts to maximize supplies in Q1. Empower committee comprising of government and industry officials have been working in close coordination for fertilizer production, planning and raw material sourcing. During the year, domestic phosphatic industry increased its production to 16 million tonnes. Industry also resorted to a higher level of imports, both DAP and NPK, which added up to 10 million tonnes against previous year of 7 million tonnes. Consumption for the year was close to 24 million tonnes, more or less same as the previous year, and the mix is favoring NPK despite relatively higher prices compared to DAP. And the share in the overall phosphate NPK currently having a share of 60%. During the year, industry players signed our offtake agreement close to 7 lakh tonnes of green ammonia. These efforts are expected to play a crucial role in reducing the carbon footprint of fertilizer production while aligning with India's long-term climate commitments. Happy to share Coromandel has also taken a lead in this government initiative and agreed for the coverage of 20% of the total ammonia requirement to be met through green ammonia route. On the agrochemical industry side, situation presented broadly constructive operating environment for the global industry. After 2 years of destocking and demand suppression driven by inflated post-pandemic inventory, channel inventory levels show signs of normalizing across major geographies. Indian agrochemical climate as the market experienced a recovery period in the first half with a near normal monsoon healthy kharif sowing which translated into stronger field-level demand compared to the previous year. However, the Rabi demand was muted due to late withdrawal of monsoon leading to lower liquidation than expected. Having covered the industry, I will specifically now talk about company's performance. During the year, company's manufacturing plant registered record fertilizer production of 3.5 million tonnes with the highest level of safety and inventory management. In fact, it is heartening to note that one of our largest fertilizer plant has been given British Safety Council 5-star rating and also got British Safety Council Sword of Honour award. And all the plants undertook annual maintenance turnaround in March, April month, and they have now resumed normal operations. Phos acid production for the year was up by 3% to 4.5 lakh tonnes. In March month, company successfully commissioned, as we communicated in the past meetings, commissioned the 2,000 tonnes per day sulfuric acid plant and 650 tonnes per day phosphoric acid plant at Kakinada, strengthening its backward integration capabilities. This plant is capable of producing annually 200,000 tonnes of phosphoric acid. And we have also synchronized the receipt of rock from Senegal, which will be used in this new plant. Currently, this plant is going through trial run and sulfuric acid volumes have scaled up. Power generation has also been met through captive power plant. Operations are getting overall stabilized, and we expect to operate at a [indiscernible] capacity from April, May and onwards. Our project to expand our granulation capacity is gaining momentum. We are on our way to commission this plant by December of this financial year. Our rock phosphate project at Senegal has stabilized very well and we have reached the output of more than 3.5 lakh tonnes last year, and we are planning to increase the volume further by 30%, 40% in the current year. The company also has enhanced its stake in Senegalese entity and currently holding 71.5% in the mining company. We have been diversifying our raw material sources through long-term contracts with various countries beyond Saudi and Qatar, like Southeast Asian countries, African countries from Canada and sometimes from Russia and China as well. So fairly, we are reasonably covered in terms of the raw material for the first quarter. We do hope that there can be a early resolution to the [Middle Eastern ] crisis, and we'll be able to secure raw materials for Q2. I would like to point out here the challenges not only to availability, but also the price, and we are closely working with the government for suitable support to handle the current price volatility. I do hope when the supply side improves, price would get normalized. Currently, it's quite abnormal and beyond the affordability of any industry player to secure and produce and convert them into fertilizers. On the marketing front, we delivered record sales of 4.3 million tonnes of DAP and NPK, a growth of 7% over last year. Our consumption has reached the peak of 4.1 million tonnes, making it the largest player with the highest market share of 17.5% in the phosphatic sector in the country. Our share of unique grades remains at 35%. We continue to expand our footprint across north and Central India markets by active channel engagement and farmer connect initiatives, and we registered a growth of more than 24% in these markets. Our single superphosphate business registered highest ever sales volume of 8.4 lakh tonnes with differentiated grades like GroPlus and GroAlpha, contributing to more than 50% of the volume, and we continue to be the market leader in the SSP sector. Coromandel's drone spraying services, delivered through Gromor Drive initiative and also through our own retail centers, we have covered close to 3 lakh acres and is witnessing strong adoption by the farming community. Our Specialty Nutrient business delivered strong performance, supported by focused market development and farmer engagement activities. We introduced different products across organic and specialty segments, offering crop-specific and performance enhancing solutions. Business is strengthening its manufacturing capability and is setting up a MAP plant and also seaweed granulation capacity. These investments will generate revenue in the coming years. Our Nano business had a strong year, emerging as a leader in the Nano DAP segment with around 50% market share while also expanding its presence in the international markets through ongoing trials and registrations. Overall volumes expanded by 60% company marketed close to 42 lakh nano bottles by demonstrating product efficacy through extensive field trials, scientific studies and farmer outreach programs. We strongly believe during this period of challenge and prices, alternate solutions like nano technology can make a huge impact and can save the country from the huge foreign exchange outgo as well as help the farmers to have the right nutrient application for the crop. Company's retail business reported strong performance, growing over 30% in '25-'26. Business expanded its footprint with the addition of over 300 new stores in Andhra Pradesh, Telangana and Karnataka, while also entering new markets such as Maharashtra and Tamil Nadu. We continue to leverage technology-driven solutions, including precision, advisory, e-commerce, drone spaying services and last-mile delivery. Moving on to one of our significant business segments, which we have been growing consistently over the last 2, 3 years and also where we made a significant investment through acquiring Nagarjuna Agrichem in the year beginning. The crop protection business of Coromandel achieved a healthy growth, both in terms of revenue and profitability. Performance was supported by strong domestic demand, recovery in export volume and new product introduction and disciplined cost management. Our stand-alone Crop Protection business at Coromandel, the revenue moved up by 16% to go up to INR [indiscernible] 3,054 crores, led by higher sales across segments. Formulations, exports, B2B and bio volumes have shown significant growth and margins have improved significantly and profitability of Crop Protection business has grown by 55% to reach INR 569 crores, benefiting from favorable demand for its key molecule across exports and domestic market. On a combined basis, our Coromandel Crop Protection business as well as Nagarjuna Agrichem has reported a combined revenue of INR 4,000 crores, which could have been better but for the late withdrawal of monsoon in the rabi season. But structurally, the business has been growing good, and we are soon to reach the milestone what we have been indicating in the past. In domestic market, we expanded our presence by introducing new territories, onboarding over new dealers, close to 1,000 and also introduced new formulations. We have introduced 10 new products during this year, which represent 21% of our total revenue. Our export business registered strong volume growth, reflecting both the global inventory rebalancing cycle and targeted business development efforts by Coromandel in key geographies. During this year, the Coromandel commissioned their technical plant at Dahej and is further expanding technical capacity at Sarigam. Bio business, while we are the large player in neem-based biopesticides, the demand for [indiscernible] received good traction during the year. Expanding beyond plant extract, the company has built a fermentation and microbial processing capabilities to diversify its biological portfolio. The launch of 5 biopesticides and 3 biofertilizers has strengthened its innovation pipeline with new products gaining good traction in the domestic market. We have completed the acquisition of 50% stake in NACL and also followed on with the rights issue of INR 250 crores to reduce the high-cost debt. So the borrowing cost has come down significantly from NACL, and we have brought in the best practice of Coromandel, and we are now exploring the synergy opportunities between the 2 companies. NACL has made a significant progress with revenue moving up by 28% to register INR 1,583 crores of top line and EBITDA of INR 103 crores against last year loss. CL is working closely with the NACL team on leveraging synergies across product development, manufacturing and sourcing. Talking about our another subsidiary, Daksha, a drone subsidiary, which is currently in a nascent phase with substantial headroom for growth. Focused efforts are being made to streamline operations and address early stage challenges with a clear emphasis on driving improved performance in the periods ahead. The company is working towards building strategic collaboration and sharpening execution capabilities to fast track product introductions, improve business development and services. Dhaksha and Coromandel's agri business has been working very closely to develop agri drones, specifically to address the need and provide comprehensive solution to the farming community of India. Overall, Coromandel has reported strong operational performance in fourth quarter with revenue growing by 19%, reaching INR 6,068 crores and EBITDA growing by 16% and reached INR 494 crores. It's pertinent to note that last year, Q4 had exceptional income of INR 347 crores relating to land sales against the current year provision of INR 71 crores, which we have taken towards investment -- impairment of investment. Hence, the reported profit is modest at INR 115 crores due to this variation of almost INR 418 crores during the corresponding period. Operationally, we have done very well, including the fourth quarter, where we took annual turnaround. We operated the plant full. In spite of the challenging situation industry is facing due to sudden spot in global prices, not adequately covered by subsidy rates, Coromandel has turned around with a resilient performance. There has been a compression in fertilizer margins. However, all other business segments like specialty nutrients, our crop protection, retail business have reported healthy growth in revenue and profitability. On a full year basis, Coromandel has reported highest ever revenue of INR 31,827 crores and EBITDA of INR 3,232 crores. Recently acquired NACL, as I mentioned, has turned profitable and registered EBITDA of INR 103 crores. Coromandel has invested significant investment of over INR 3,000 crores in the last 2 years across business segments, and I'm sure this will generate target revenue and profitability in the coming period. I'll now hand over to Deepak to comment on the financial performance before I take any questions from the team.

Thank you, Sankar. Good afternoon, everyone. The company recorded a consolidated total income of INR 6,068 crores during the quarter and INR 31,827 crores during the financial year FY '25, '26. This is a corresponding period of INR 5,114 crores and INR 24,444 crores, registering a growth of 19% for the quarter and 30% for the full year. The subsidy business share in the revenue stands at about 75% for the quarter and 85% for the full year. From a profitability point of view, the consolidated EBITDA for the quarter stands at INR 494 crores against INR 426 crores in the previous year. On a full year basis, the consolidated EBITDA stands at INR 3,232 crores, against INR 2,628 crores last year. The subsidy business share in EBITDA stands at 57% for the quarter and 66% for the full year. Correspondingly, last year, it was 67% and 70%. Net profit after tax for the quarter stands at INR 115 crores in comparison to INR 578 crores in the previous year same quarter. That was essentially because of some of the exceptional items we had taken last year and this year. And the net profit after tax for the full year stands at INR 1,898 crores against INR 2,055 crores in the previous year. During -- as far as subsidies concerned during the quarter, the company received INR 3,441 crores towards subsidiary claims. For the full year, we have received INR 10,649 crores as subsidy. This compares with INR 8,082 crores we received last year. Subsidy outstanding at the end of March stands at INR 2,168 crores, compared with INR 1,654 crores in the previous year. We have received the subsidy claims until the third week of March 2026. While the subsidy outstanding at the end of the year is higher as compared to the previous year, it has come down sequentially quarter-on-quarter from INR 3,785 crores to INR 3,199 crores at the end of September. As you maybe aware, the government has also come up with supplementary grant of INR 1,500 crores for NDS in March and this has helped settle dues in the month of March. Inventory has remained at a slightly elevated levels, driven primarily by elevated raw material prices. and certain incremental inventory that we have kept for our newly inaugurated phosphoric acid and sulfuric acid plant in Kakinada. We are also holding some level of strategic inventory considering the ongoing crisis in West Asia. During the quarter, we took an impairment on the investments and goodwill in the stand-alone and consolidated financial results of the company relating to the drones business. This is primarily due to long lead time in the execution of certain orders. Management believes the value of the investments to improve and has provided for impairment on a prudent basis. Finally, on ForEx during the -- during Q4, the rupee traded in a very broad range of INR 89.75 to INR 95.23, which continues to pose certain level of challenges. Coromandel has continued to hedge its exposure exposures on a conservative basis. Thank you.

[Operator Instructions] The first question is from the line of Ahmed Madha from Unifi Capital.

I have a few questions. Firstly, if I compare the consolidated P&L and stand-alone P&L, there is a gap Obviously, NACL doesn't have incremental loss. I'm assuming that it's coming from the mining entity, BMCC and even the depreciation numbers are much higher compared to last year. So if you can expand on how is BMCC as an entity placed in terms of financials and also explain how the depreciation, amortization of the mining asset moves forward in next year and thereafter? And how do you see the profitability trends of the BMCC entity?

See, on the mining side, you're absolutely right. The amortization expenses, depreciation is more of an accounting where the mining costs are also getting amortized and it is showing there. Basically, it is a basic cost what we incur before we reach the [indiscernible], that gets amortized over a period of time. As per the accounting requirement that needs to be under the amortization. So that's the reason when the volume of operation goes up, that amortization cost increases and we charge the entire initial mining cost over the volume of ore which we can extract in the pit. We'll do our mining accounting and accordingly that gets reflected in the consolidated financial. Your observation is right. In terms of the financial health and performance of BMCC, BMCC has turned profitable now with the increased volume of operations, better absorption of fixed costs, improved efficiencies. And that price is linked to the market price because it's an intercompany transfer and factoring that market price for phosphate, it turns profitable. And it will improve its margin going forward with increased volume of production coming through is as far as BMCC is concerned. In terms of the overall -- another amortization which are happening. It's more of an accounting thing which you should get evened out. When you do the consolidation accounting involving subsidiaries, there is a certain amount of the intangibles, which get amortized over the period, and that has gone into the accounts. While operationally stand-alone Nagarjuna has turned profitable at EBITDA level. But on a consolidated level, we need to have some amortization of certain expenses between the -- it's more of a consolidation accounting between the acquisition value versus the holding value that gets amortized over the period. So that is reflected there. That is why you see the change in the depreciation compared to stand-alone numbers.

Sure. Makes sense. Secondly, on the margins of the fertilizer business for the upcoming season, how should one look at it considering the very nominal increase in the subsidy numbers, about 10%, while the raw material prices are -- have gone up materially. So how do you see government response coming in whether there can be another sort of a price increase rather subsidy increase which sort of happened in FY '23. We were going through a similar phase where raw material prices went up materially and government again revised the subsidies. So how do you see the current situation? And what is your broad sense of -- how you'll be compensated for the higher raw material cost because I'm assuming current subsidy and the MRPs are not sufficient for it.

So you're right. It's too early stages because the raw materials are coming in at the higher prices. Of course, industry has some benefit of the carryover inventory in the first 1 or 2 months. Our farmers also will be able to have access to the opening stock of finished fertilizers, but the replacement cost is very high. One is the availability, another is a price. As I mentioned in my opening remarks, the prices of ammonia sulfur has gone up exorbitantly higher. And it definitely calls for additional compensation subsidies, which we have taken up with the government. It's under discussion stage, and hopefully, we should get some -- they are positively looked at it. And hopefully, we should get the pass-through on these costs. Basic objective is to see that how best we can secure first and produce finished fertilizers and then try and see how best we can retain the price to the farmers at more or less same level. If that calls for additional subsidy, it will happen as the gap still remains, we may have to correct the prices because these are all too early stages and these extraordinary times, and we don't want to put any number. We don't expect this scenario also to remain for a long time. Abnormal event has happened, and we hope the normalcy gets restored once the supply side improves, we do expect things to be back to normal. Having said that, it's very critical for additional subsidy to come in beyond what has been notified as these rates are based on yearly rates. We need to have additional subsidy and some pass on will also happen, which industry also has taken some corrections in the last 1 to 2 months. As far as DAP is concerned, government has been considerate and they've given a pass-through last year, and hopefully, same should continue now.

My third question was on the Crop Protection business. If you look at, I mean, the performance in terms of stand-alone has been pretty good in terms of margin improvement. So can you just elaborate how do you see overall opportunity with the NACL acquisition done now? I mean -- and we have been -- entity has been consolidated for about 2.5 quarters. So how do you see the opportunity in terms of export side in terms of scale-up of your agrochemical business? And Nagarjuna's NACL's margins, how do you see the trend changing. And lastly, the stand-alone crop protection had low growth, about 2% to 2.5%. Were there any factors that led to that? And how do you see the growth moving forward?

Stand-alone is grown well. It's not 2%, 3%. We have grown INR 3,053 crores as against...

Standalone crop protection, I meant, stand-alone crop protection business.

Yes, I'm also referring to crop protection only. 15.8%, if I'm right. Revenue has grown significantly. This year really overall, just have a look at the math, but...

Yes, I meant for Q4. I meant for Q4, sir.

Q4. Q4 is off season. Yes. I was talking about the overall number.

Yes, fair. Overall, as I said initially that we have done well. So I meant just for Q4.

So -- but in terms of the profitability, we have gone up, also we -- overall, if you want just to give you a comment on the Crop Protection business, we have done extremely well on all segments, whether it is global exports of active ingredients, especially the key molecule, Mancozeb. We have got a better volume growth as well as better realization. And our additional capacity, which came up in Dahej during the year was quite helpful to meet the additional demand. In the domestic B2C market, we added territories and we increased the volume. Our formulation business overall has grown by 15%, 20%, while the domestic sector as a whole had a degrowth. Coromandel, thanks to the new territories and the new products introduced during the year, we have done well. We could have done much better, but for the challenges we faced in the rabi season, which is true for the entire industry. Domestic B2B segment, where we do sell active ingredients to other institutional customers. We have broadened the portfolio beyond Mancozeb, and we have scaled up well. Prices of most of the [indiscernible] also improved during the year, and that has resulted in improved margins. On a stand-alone basis, Crop Protection business has reached the record turnover and record profitability, as you can see, it's close to 19% EBITDA margin and a revenue of INR 3,000 crores. This includes bio business as well where the new-based bio business has recorded good export volume, and we started our own channel in bio for domestic sale as well. And we have also expanded the product portfolio in bio business to grow in for microbials and plant textile products. On the NACL side, as I mentioned in my opening remarks, overall turnover has grown by 28% and profitability has improved operationally. While it has not added significantly to the bottom line, mainly because of alignment of major accounting policies in line with Coromandel and that has resulted in provisioning, which has reduced the net profit on a stand-alone basis. But capacity utilization of the technical plants have improved significantly. And we are also looking at additional intermediates and technical capacities in the Dahej plant, which is currently operating at low level. Coromandel and NACL team working together for leveraging synergy benefits and cross-selling products across various markets, depending on the strength of each company. So overall, on a consolidated basis, we have reached INR 4,000 crores and margin of NACL has improved to 6% to 7%, that is what we indicated in the beginning. And going forward, next year with the change in product portfolio that should stabilize around 9% to 10%. And we need some time to introduce new products, register new products, introduce 9(3) formulations to significantly improve EBITDA in line with Coromandel. It will be difficult for NACL on a stand-alone basis to increase the margins unless new active ingredients and new formulations are introduced, which will take some time. So currently, we can say we can restore the margins what it was 7% to 8%. Beyond that, it requires investment, which we will take a view at appropriate time.

The next question is from the line of Ankur from Axis Capital.

First, if you can give the EBITDA breakup for the full year in terms of subsidy and non-subsidy and the revenue breakup for Crop Protection in terms of B2B, B2C and export and domestic?

Sorry, come again. First one what you said EBITDA?

So the non-subsidy EBITDA share for the full year. if you can share that as well as the breakup in the -- for the Crop Protection business, breakup between export, domestic as well as B2B-B2C revenues there for the full year.

Subsidy business share for the full year is 57% -- that is clear. In terms of...

I'm sorry, sir, you are not audible right now.

Yes, just give me a minute -- just taking -- it's 66% for the year as a whole. What I said 57% is for the quarter and 66% for the year as a whole.

Sure, sir. And the breakup between export, domestic, and B2B, B2C for Crop Protection?

You need this for the full year or for the quarter?

Full year, sir.

Coromandel Crop Protection business, right? The exports will be INR 1,450 crores exports. Domestic will be INR 700 crores, domestic B2B, and formulation will be INR 900 crores.

Sure, sir. That's helpful. So you -- as you rightly highlighted, in terms of the growth that we have seen for the non-subsidy business as well as the strong operating profit, the margin expansion as well for the full year. Given the macro one, is there any concern from an RM availability perspective for the Crop Protection business or even from a pricing perspective? And second, how do you look at the growth going ahead? You did allude towards NACL sort of cross-selling opportunity being there. But let's say, on Coromandel, own portfolio basis, what sort of growth are you looking at and sustainable margins there?

As far as raw material supply chain is concerned on crop protection, we are quite comfortable, and we are fairly covered, I don't see any challenge. It continues to be available. And whatever input cost increase has happened because of global phenomenon, we are able to pass through -- so we don't see any impact on margin due to input costs. For Crop Protection business, it's fairly comfortable. In terms of the growth opportunities, it is driven by active ingredient volumes, Mancozeb where additional capacity is coming up that will be commissioned during the year. That will be the major volume kicker for active ingredients. On the domestic formulation business, we are planning to grow aggressively by another 20%, 25% because of the new registrations, which are coming through in this year, we'll be launching another 6 new products. And also, we are increasing our import of active ingredients from China and also introducing new products in India. So overall, we can see a revenue growth of 20% to 25% besides the capacity-driven growth in active ingredients, which were mainly for the export market.

Sure, sir. And on the margins, do we think we'll be sustaining let's say, 19-ish percent non-NACL EBITDA margin for our business or...

I don't see any challenge. And also, we should note that with the currency depreciation is probably helping this business with significant share of exports happening.

Sure, sir. That's very helpful. And just lastly, you did cover up in your opening comments on the raw material inflation on the fertilizer side and our expectation is that probably there could be another round of maybe an increase in subsidy from the government side. My question here was, one, given that Q1 is fairly there, but Q2, there could be RM inflation which could hit us. And what if the government is not increasing or maybe there is a delay in terms of increase in subsidy from the government side? Are we looking to increase the finished good prices there as aggressively? Or how should -- because that will have an implication on your overall margins as well. So how should one look at that part?

These are all very abnormal situations, very difficult to predict how long it will take, but it is very important both for the sector health as well as for the farmer benefit, government responds favorably, which they are looking into it. And it should happen here and now if the production has to continue and fertilizer is to be made available to the farmers. So we do hope that we'll have a yearly resolution on this additional compensation to ensure that any further price increase on NPKs are reasonable for the farming community to absorb.

The next question is from the line of Riju from Antique Stockbroking.

Sir, the domestic and export revenue share that you have mentioned for the CP business, that was the stand-alone business or including NACL?

That is for the standalone business. Yes, for the standalone business.

So if you could mention the NACL -- like including NACL number for the Q4 for the export revenue, that will be helpful.

I need to get back to you on export revenue. Overall revenue is INR 1,584 crores for the full year and INR 361 crores for Q4, but I need to just get back to you on domestic and export breakup. We'll pass this later.

Understood, sir. And in terms of the fertilizer business, so could you please elaborate in terms of the finished goods inventory that you have as on [indiscernible].

Maybe close to 5. 5 Lakh tonnes roughly finished fertilizer we maybe having. And that's where approximately at this point of [indiscernible]

This is entirely the manufacturing volume or including trading one?

Trading is not much, probably 60,000, 70,000 may be trading.

Understood, sir. And if I look at in terms of the Coromandel CP business, stand-alone CP business, Coromandel, so the growth was 2%. So that was mainly because of this poor growth in the domestic market or it is mainly on account of both domestic and exports?

Sorry, come again, what you're saying?

If I look at Coromandel CP business for the stand-alone ones, the growth was 2%, 2.5% for the quarter. So the primary reason was to -- because of the poor domestic business growth or it is a mix of domestic and export both have performed -- not performed well.

No. Actually, it's off-season in domestic market. So there also, at least there is a volume increase. It's exports, we have moderated the sale in fourth quarter as we have opportunities to sell including season time in April, May. We have consciously taken a call to have a moderate sales in fourth quarter. And there has been significant increase in freight rates during that period. So we have to look for right opportunities. Hence, we didn't push for more volume of exports in fourth quarter. So it's a temporary slowdown in fourth quarter that will come back in first quarter. And formulation business anyhow it has grown well by 14% and in spite of being an off-season period. And domestic B2B is more of a function of demand requirement and that can always be made up in first quarter. So I don't see any major issue per se in any personal segment. Area where we have marginally degrown compared to last year is in bioproduct category, where we did exports in the fourth quarter of last year, and we have executed this export order earlier in December. Hence, it is showing a degrowth in the current year. So that is why the overall Crop Protection, CPC is looking marginal at 4%. Otherwise, overall for the year growth is 16%, and that sort of a growth we do expect to sustain.

Understood, sir. And one last thing. So the -- if I look at in terms of the global industry specifically, in the LatAm market. So LatAm market is struggling with the inventory issues. So how do you see that market for your growth? And second part is that if I look at Mancozeb prices for the last maybe 1 or 2 months, so the prices have gone up roughly by 30% to 40% in the range. So how do you assess that in terms of your Q1 performance? And second is that if you could share the unit grade contribution number in the fertilizer business.

Our understanding is destocking has already happened in Latin American markets. We are not facing any challenge. And the Mancozeb per se, our cost increase is getting passed on, and that is required in the current market situation. Also, our dependency is not only in Latin America. We have a widespread reach across various continents. But to that extent, we are very comfortable, and we are awaiting for the new capacity to come up to increase our volumes and revenues in the coming quarters. I don't see any challenge in improving our margins or performance or sustaining the same in the first quarter.

Understood, sir. And the unique grades continuing for this quarter?

More or less remains the same because some of the unique grades because of the price increase in inputs were not that viable. So it remains at 35% on an annualized basis for the year.

The next question is from the line of Somaiah V from Avendus Park.

Sir, my first question is on phos acid price for the quarter. Has it been decided? That's one. And in the international market, if you were to procure sulfur and ammonia, what is the current pricing level?

PA price was fixed at INR 1,350 when there was a short gap of ceasefire has happened that time -- around the time we fixed the phosphoric acid price at INR 1,360 as against the pre of INR 1,290.

INR 1,290 to INR 1,360, okay.

[indiscernible] of ammonia has gone up significantly. There are deals which are happening around $840, $850 range. That's where last we had. And sulfur is also around the same level, $800 range.

Sir, in terms of this -- the backward integrated capacity that we have added last quarter. So for the first half of this year, do we see any challenges in terms of raw material availability to run this at the fullest? And also in terms of margin contribution, do we see it to be accretive given where, let's say, sulfur prices are today?

See these are all very extraordinary times, very difficult to look at margins at this point of time. It doesn't make sense even to look at either product margin or phosphoric acid value gap. If you take current quarter phosphoric acid price and try to project next quarter value gap, obviously will be negative because this price increase of sulfur and other input prices will come in the next quarter. This may be 1 or 2 quarters of challenges and pressures, but it should get normalized. And structurally, the value gap what we envisage will come through. I don't see any challenge in availability per se for running the plant because we have a good coverage of rock phosphate and chemical mines is operating at full stream, and we are getting rock phosphate from there. And sulfur, there is a challenge. We have taken a lot of efforts. There is a visibility up to first quarter, as I mentioned. And going forward, things ease out, we should be able to secure raw material for second quarter as well. We have to wait and see how this Middle East crisis is playing out.

Understood, sir. Sir, in terms of -- between Q1 and Q2, I think we should be having a fair idea of at least how things stand today in terms of our inventory that is there in the system, NPK subsidy that's been given and pricing that's happened. So would it be fair to say Q1 is kind of still manageable and Q2 is where definitely the subsidy support should come in? Or is it like in Q1 itself, we need this incremental subsidy support?

Every day is a new day. We're not able to predict anything. This time, it's a little uncomfortable for us to put any number on the table. Let's wait for things to play out before we can continue fair understanding. It's a bit challenging. Right now, we are focusing more on securing raw materials and having the production fertilizer availability for this -- we have a lot of [indiscernible] we had to correct the prices and so many things are there. Big fluid at this stage, I would say.

I would request you to kind you rejoin the queue for follow-up questions. There are others who are waiting for their turn. We'll take the next question from the line of Akash Mehta from Canara HSBC Life.

So my first question is on the sourcing bit only. You said -- I mean, on the sulfur front, it's slightly challenging as of now. I mean, obviously, we have visibility of Q1, but going into Q2, it's a bit difficult. So can you just help us with the current sourcing? I mean, it was earlier with the Middle East. So from where you are kind of managing the sourcing for sulfur and the raw materials, if there is any change? So that's my first question.

We used to source predominantly from Middle East only. Now we are diversified sources. Wherever sulfur is available, we are buying. And we have been getting some shipments from Canada as well. We have got tying some domestic source also. So we are getting something from Southeast Asian countries, Japan. So we're looking at all the opportunities. It's quite fortunate that we have got our own sulfuric acid plant coming up in Kakinada as well so that we can produce sulfuric acid because sulfuric acid prices have gone up significantly higher. And hence, it comes handy to have our own sulfuric acid, which in turn can generate steam and produce power as well. So we have multiple sources we are working on. So whoever supplies sulfur to us, we are okay to take it. It's not -- right now, it's more of a spot transaction which we are doing. Otherwise, the major source used to be Qatar Energy and Saudi.

Sure, sir. As of now, there is no shortfall as such. It's available at a higher price. That's about it, right?

Yes, visibility up to June. We have to keep covering. So hopefully, it should ease out. See, the major challenge is the bottleneck of the ships to cross. It is not sulfur is not available. Sulfur is available in printing. It is a movement of ship through port of Hormuz, it's what making it difficult for us to predict any. So we are hoping things normalize and sailing time is not much between Middle East to India. So for July, it is too early to predict whether it will happen or not. In a logical sense, it looks like it will happen.

Sure, sir. And my second question is, I mean, you just highlight any -- on the subsidy front, again, you cannot give a clear time line if it will and when it will come through. But basis given the raw material price increase, any number you can just help us out with in terms of the implied increase in subsidy or the price on the last number and in percentage terms or?

See, we have to wait and see for the rabi season NBS rate formula will kick in and probably will get updated. What we are talking about is the intervening period of June to September, where the raw material prices have gone up very sharply. So maybe a cost-to-cost reimbursement is what we are looking at so that we can cushion the current spot in prices to a great extent while we arrive at the final price to the [indiscernible]. Very difficult to predict how much they will give. Like a pass-through in DAP, we are trying whether there can be a pass-through in NPKs as well. We need to wait and see how it's going to happen.

The next question is from the line of Darshita from DSP Asset Managers.

I just had one question. Is there any key intermediate for Mancozeb that we import from Middle East countries where we may be facing any constraint for importing it?

Fortunately, not. We are able to get everything from other than. That's the only comfort we have this raw material, nothing is coming from Middle East. Of course, we have some products, but we have alternate sources. So we are quite okay with...

And we've been able to pass on the price increase even in the last 2 months. The fourth quarter, of course, we can see that. But over the last 2 months ago, we've been able to pass on the price increase.

And to some extent, the currency depreciation also has aided this absorption.

And not facing any shortage for sourcing the intermediate.

Yes, we had some small disruption in the month of April, but we have now looked at the alternate coverage. Unlike nutrients, the import of these raw materials from China is quite okay. So it takes time, but it comes. So we are fairly covered.

We'll take the next question from the line of Vipulkumar Shah from Sumangal Investments.

So in view of the raw material inflation, what should be our margin guidance as far as EBITDA per tonne is concerned for the whole year?

I prefer to pass this question. Very difficult to predict at this point of time. Let's see how it goes because it's a function of what government is going to compensate and how much we are going to look at price corrections. It's a function of many things. It's very fluid. I don't want to put any number now. So let's wait for things to get normalized. Actually, nothing has changed except for the blockade, which has happened, which has resulted in shipments not going through. Once the supply situation improves, supply chain gets normalized, prices should come back. Putting any number for the next 2, 3 months, how it's going to be is not going to help any of us.

The next question is from the line of Sheel Kumar Shah from Sameeksha Capital.

My first question is what is our manufacturing EBITDA on fertilizer side, I mean per tonne for 4Q and for the full year?

Last year, it was around INR 5,000 plus that we have mentioned. And fourth quarter was compressed. It was less than INR 3,500, around that number. It was around INR 3,500 for the fourth quarter.

And what about on the trading side, if you can share margins or EBITDA per tonne?

It's too difficult to make. It depends on the grades and the timing of purchase and the pass-through on DAP. So it's different set of numbers are there.

But on an average, what type of margin would we be making on [indiscernible].

You can take roughly 4% to 5% sort of a number.

And how do you see trading volume for -- I mean, for FY '27 on a high base of FY '26?

See, we have a challenge in availability, especially on DAP. So we need to see how things improve. We love to do the same volume. And there can be a potential reduction in the first quarter because of nonavailability major imports coming through from Saudi will not happen. And we also want to be conscious on working capital liquidity. So we do not [indiscernible] unless it is absolutely essential to meet whatever the demand. But second half, I think should get normalized. If things improve, the volumes should come back. So it's about [indiscernible] our risk appetite.

Understood. And my last question is on what would be the revenue for Nano DAP.

I can tell you INR 45 lakh, I'm not sure what -- I don't get the number now. It's part of the overall segment. I'll come back to you on this...

The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Ltd.

Sir my question is related to this Dahej capacity that which we are expanding. So how much additional revenue or asset turn, if you can give -- do we expect? And what kind of product portfolio diversification it will help.

We expanded our capacity by 10,000 tonnes of [indiscernible]. And I will get back to you on the revenue per se on Dahej, but the payback will be much faster, less than 1 year. So the investment what we have made in debottlenecking the facility that gets paid off less than 1 year. In fact, we are expanding another 20,000 tonnes at [indiscernible] as well. And that project is underway that should come through by middle of this year. Hopefully, there also, I think margins are pretty good, and we should have a payback in a shorter time frame of less than 2 years.

And earlier, we were evaluating in borrowing into CRDMO. So what stage we are, I mean, the CDMO and how is the opportunity that we look forward? Any further progress?

The CDMO takes a very long time, 2, 3 years. And MNCs have responded favorably. They looked at the facilities. They moved to the next stage. They take quite a long time [indiscernible] European entities have shown interest. And with the combined strength of Nagarjuna, we are able to fast track some of the intermediate manufacturing. We are looking at fluorination chemistry very seriously. While Nagarjuna has got the capability and we are going to invest on fluorination chemistry in the coming quarters to showcase it to the potential CDMO players. And we are quite happy with this and some of the Japanese collaborators are also keen to work with us. Things are progressing well. While it is not materially impacting the revenue in the current year, but I'm sure a few years down the line, we will have a significant play in this space. We are trying to do it organically, and we will scale up. We are not looking for big ticket investment immediately looking at the current market situation, wanted to focus on current investments what we have made, realize the value out of it before we make any fresh investments on a large scale on CDMO space. But we are doing well on the organic space. At this point of time, I'm not able to put out the party thing, but things are progressing very well.

So could we see, I mean, some revenue in from FY '28 or...

It may go into the year after that also because once they have the proof of concept [indiscernible] they start registering the product and then agree to the costing margins, it may be happen. But we will start creating some capacities of smaller scale this year, and that will go into production next year. So some revenues will come in, but significant can come in the year after.

Now taking -- see, with this price increase substantially in this fertilizer, how should we think that adoption of Nano DAP, I mean, going ahead, say, post I mean, harvesting?

Ideally, this is a great opportunity like COVID, many things have happened. I wish farmers adoption increases. They are trying to do and promote balanced nutrition. But as long as you have urea and DAP available at affordable price, the switch over maybe difficult. So unless there's a major policy correction happens and restrict the availability in terms of actual need for the marginal farmers, this adoption will be slow and steady, and we are also not in a hurry to push through. But the product is working well, and it can dictate shortage situations, it can be [indiscernible] to the farmers.

And last question, sir, with your permission, any update on Dhaksha?

Good question. Thanks you raised this point because I've taken the diminution in the value of investment relating to Dhaksha. As you know, we have got a large order which is pending for execution, and we have fixed all the technical-related gaps, and we are waiting for the execution of orders. I'm personally driving this initiative, and they have made significant progress on introducing new products. A lot of projects have been identified, a lot of partnerships have been identified. And we are seeing good traction coming on the defense segment after the usage of drones in various warfare. And besides that, agri, Coromandel and Dhaksha has been working very closely. They have come up with new products. We are going through type certification. And we strongly believe there is one space in agriculture where drone response has been extremely good from the farming community. And we'll be scaling up volume. We are participating in the institutional tenders. We are also looking at drones for various institutional applications. And we are trying to develop the complete ecosystem for Dhaksha by tying up with the various component manufacturers, whether it is for batteries or cameras or various other electronics instruments and also for software development. That shall be moving to a larger place, more than 60,000 square feet where they will build this facility, but the entire team will sit in Chennai. Hopefully, this facility should be ready by May. A lot of projects are happening. And I think we are in a good recovery mode. After we execute the first order during this year, that will give us the confidence to have repeat orders across various segments of defense. Meanwhile, we are also strengthening the R&D, and we are going to introduce new products over the next 6 to 9 months. We will try and realize the value of investment what we have made. We are a bit ahead of time, but it's going to make a difference in next 2 years.

Ladies and gentlemen, we will take that as a last question for today. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir.

Thank you very much. Thank you for the insightful questions. And I know it's a challenging time. And definitely, I'm sure we'll do our best to serve the farming community. Thank you for your continued support.

Thank you, members of the management. On behalf of Elara Securities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.