Deepak Fertilisers And Petrochemicals Corporation Limited ($500645)

Ladies and gentlemen, good day, and welcome to the Q4 FY '26 Financial Results Conference Call of Deepak Fertilisers hosted by IIFL Capital Services. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. [ Akash Maji ] from IIFL Capital Services. Thank you, and over to you, sir.

Thank you. Good evening, everyone, and thank you for joining us on the Deepak Fertilizers Q4 FY '26 Earnings Conference Call. Today, we have with us Mr. Sailesh Mehta, Chairman and MD Company; Mr. Subhash Anand, President and CFO; Mr. Tarun Sinha, President of the tan Business; and Mr. Suparas Jain, Executive VP, Corporate Finance. We will begin the call with opening remarks from the management team followed by an interactive Q&A session. To begin, Mr. Sailesh Mehta will share views on the operating performance and the growth plans of the company, followed by Mr. Subhash Anand, who shall take us through the financial performance. I now invite Mr. Mehta to share his opening comments. Thank you, and over to you, sir. Thank you.

Is my voice clear?

Yes.

So a very warm welcome, rather hot welcome with this peak of summer to everyone. And thank you for joining us today. Our earnings presentation and press release were available on the stock exchanges and our website. And I do hope you have had an opportunity to review them. So as usual, what I will do is share some under current and insights. And then, of course, the detailed financial analysis would be shared by Subhash and the team and of course, they are available for all question and answers also. So as we saw Q4 pan out, we also like companies in India and globally, had to operate in a very challenging environment, thanks to Mr. Trump. We saw a sudden impact emerging from certain shortage of LPG and the refineries were also pushed hard to not reduce the supplies of LPG and that impacted an LPG cut, which is propylene which supports our IP business. We also saw LNG cuts that impacted our fertilizer and chemical businesses because LNG vessels got stuck as you're all aware. Fertilizer prices when shooting to the roof, and we saw an inadequate and delayed subsidy coverage from the government. Somewhere we saw even skilled labor for our projects impacted by LPG shortage for cooking besides a lot of them vanishing due to the West Bengal and other state elections. We also saw China bringing an export ban on some of the critical products and conversely, we also saw India bringing in a ban on exports of ammonium nitrate. Now considering these multiple challenges, I think we have navigated very well. As we see things panning out now and the positive trends continuing over -- we are now seeing that there has been some respite we have got, thanks to the petroleum ministry providing us some help to source LPG propylene, but we're still having some challenges because they have indicated refineries, which are far away from us. So the landed costs are higher, but that is something we are navigating. On the LNG front, while there has been an improvement on the gas front, I'm really happy to share that our maiden cargo from our 15-year contract arrived just a few weeks back. And frankly, I might share that any relationship and such long-term relationship is truly tested during a crisis and I'm truly happy and grateful to share that our Norwegian suppliers went backwards to ensure that the LNG supplies don't get impacted, thanks to the holdbacks and all. Also, while Q4 saw a long-ish planned shutdown for our ammonia plant to also bring in some efficiencies and capacity improvements and that brought in an impact of around INR 70 crores in Q4. But as we speak today, the plant is performing very well, and we are seeing not only an improvement in capacity but also efficiencies. So as we see now we are seeing the real benefits emerging of our value chain, that is LNG to ammonia to the complete downstream. That is now gradually coming alive. As far as our Crop Nutrition business goes, we did try to push for even higher premiums so that some of these higher costs could be passed on. But somewhere the subsidy support was not adequate to bridge this runaway raw material price hike. Also, as the government held the fertilizer prices, the [ urea ] and [ DAP ] prices to the farmers in view of the state elections, it put a little lid on how much premium we could charge on our NPKs. Yet the quantum of premiums gives a very strong validation to us that the enrich, specialty smart fertilizers that we have brought in have truly crossed the mindset of price boundaries in view of the superior value proposition that they gave in terms of better yields and better quality produce. I might also share that while we do hear about the El Nino impact likely to pull down the range somewhat, we are still tracking for granular kind details and reports. Since broadly, we have gathered that the impact could possibly be lesser in our crop geographies, but we need to wait and see the weather reports to come up. Now while the project execution is going strong, we do have a little time realignment due to severe shortage of skill contract manpower, which we face with various states going in for elections and suddenly, there's a severe shortage with West Bengal, Tamil Nadu and other elections and also some impact that emerged because of lack of cooking LPG. But now we are again onpack to full fleet full steam working. We, on the other side, we completed the acquisition of an exclusive unit and are now moving forward on our planned strategy from product to holistic solutions for our [ TAN ] and [ Mining ] business. As we see the Gopalpur 10 facilities, we will be uniquely placed as we come into production because our 10 facilities will be based on stable and consistently available produced or imported ammonia and not based on constraints of government surplus ammonia policies for urea ammonia plants. Our Gopalpur facilities are advantageously placed in the midst of the key mining geographies in the East. And that we would enjoy --

I'm sorry to interrupt, sir, your voice is not clear now.

Is it better now?

No, sir.

I think from the handset.

Okay. Sir, please go ahead.

So are goal facilities are advantages based in the key mining geography in the ...

I'm sorry to interrupt, your voice is not clear. I'll just call you back. Ladies and gentlemen, please stay connected. I call back the management. Thank you. [Technical Difficulty] Ladies and gentlemen, the management has now been connected. Please go ahead, sir.

Okay. Yes. My voice is clear, right?

Yes, sir.

Okay. So as I was saying, as far as Gopalpur goes, that our time facilities at Gopalpur are going to be based on stable and consistently available produce or imported ammonia and not based on the constraints of the government surplus ammonia policy for urea ammonia plants. Our Gopalpur facilities are advantageously placed in the midst of the key mining geographies in the East. And would that enjoy good freight advantages, having 10 facility in the West and East will give our customers a strong risk-mitigated supply consistency while allowing us to supply from the best freight economic zone. The other is having 9 nitric acid plants for ammonium [indiscernible] plants, global base technologies and 45 years of customer relationships. These trends obviously can be easily replicated. And lastly, with our unique [indiscernible] the mining knowledge base, [ BMDs ] for the last mile connectivity to the mines, we will enjoy unique selling propositions for the premium segments of the market. So all in all, as I see it, we are finding very strong validation on our strategies of number one, the investments we have made in the value chain. So now it will pan out very clearly right from the 15-year LNG contract, the world-class ammonia plant, the downstream capacities that we have added in terms of fertilizer acid, ammonium nitrate. And last but not the least, the very strong strategic drive that we have brought in from commodity to holistic solutions. So all of these we are going to see unfolding in the next year, obviously supported with the larger tonnages coming out of the 2 projects. So this is broadly the way we see things panning out. I now would invite Subhash to share with you the financials and the logic [indiscernible], of course, help you on all clarifications and questions. Subhash?

Thank you, Mr. Mehta, and good afternoon, everyone. Let me take you through the financial performance and highlight the key drivers across businesses. At the consolidated level, we delivered revenue growth of around 12% for the full year, with revenue at INR 11,506 crores. For the quarter, revenue stood at INR 3011 crores, reflecting continued volume-led growth in Mining Chemicals and Crop Nutrition along with a sequential recovery in Industrial Chemicals. On profitability, our full year EBITDA stood at INR 1,684 crores, while Q4 EBITDA came in INR 354 crores. If I step back and look at the full year picture, it was a story of 2 half. In the first half, we saw a strong performance across businesses, supported by relatively favorable pricing and operating conditions. However, the second half was more subdued. This was largely due to sharp increase in input cost in fertilizer business, particularly for acid and sulfur whereas the pass-through to customer and the [ costponding ] subsidy support lagged the cost explanation. At the same time, we also saw pricing pressure in Chemicals segment, especially in IPA, which further weighed on margin during the second half. It is also important to note that Q4 includes the impact of planned ammonia shutdown with a one-off effect of around INR 75 crores. Adjusting to this, the underlying operating trend is more stable, and we are beginning to see early sign of sequential momentum. At the PAT level, full year profit stood at INR 739 crores. After adjusting the onetime tax credit in previous year, the decline is around 18%, largely driven by margin compression, partly offset by lower finance cost. Let me now briefly touch upon the performance across businesses. In Mining Chemicals, the business delivered a strong recovery during a quarter after a softer Q3. Volumes were up 12% Y-o-Y basis and 27% sequentially with a full year growth of around 11%. The B2C segment continued to scale well, now contributes around 16% of the revenue compared to 13% last year. This is an important structural shift improving both realization and customer engagement and will remain key drivers going forward. In Industrial Chemicals, performance remained mixed -- but the -- but with improving trends, nitric acid volume shows healthy growth during the year, while IPA performance were impacted by weak price and lately constraint in RGP availability which continue to limit volumes. However, now we are seeing an early sign of recovery in both PAM and Industrial Chemicals segment with improving spread supported by tighter global supply conditions and lower import. In Crop Nutrition, the quarter was challenging. The business impacted by lower farm gate prices, elevated channel inventory and sharp increase in input cost. Importantly, there was also a lag in subsidy realignment, which affected margins during the period. Despite this crop [ tech ] delivered resilient performance and the overall product mix continue to improve. Specialty and crop [ back ] now contributes around 33% of segment revenue, up from 30% previous year, which is a very important structural level lever for improving margins over time. On the balance sheet, CapEx during the year to around INR 1,569 crores, as we move closer to the completion of our key growth projects. As a result, the net debt EBITDA stood at INR 4,800. The net debt stood at INR 4,824 crores and net debt to EBITDA is around 2.86x. This reflects the final phase of our investment cycle and is aligned with our capacity creation underway. On a project growth -- on a project progress, both our key projects are now in advanced stage. Gopalpur [ 10 ] projected of around 95% complete. The [indiscernible] nitric acid project is around 86% complete. The cumulative [ CWIP ] on both the project is around INR 3,050 crores. However, if we see a total bank including GST and advances, is total cumulative spend is around INR 3,800 crores. Commissioning is expected in Q2 FY '27, and both projects remain within the approved CapEx annual. These efforts will significantly enhance our capacity cost competitiveness and operating leverage going forward. Another key milestone during the period has been commencement of supply under our long-term LNG contract with [ Equinor ], with the first shipment already received in May. This strengthens our ammonia value chain by improving supply security, cost visibility and integration advantage, which will support margin stability across downstream businesses. In addition, we have completed the acquisition at [ DMSL ], we strengthened our mining chemical platforms and enhance our ability to deliver integrated value-added solutions to customers. Let me now summarize. We have delivered strong revenue growth despite operating in change -- operating in a challenging environment. Margins were impacted by input cost inflation, pricing pressure, certain one-off factors, but we are now beginning to see a clear sign of improvement. Going forward, we expect quality of earnings to improve, supported by 3 key levers: tightening global supply conditions, which are helping to improve spreads, better cost visibility and stability from our long-term gas arrangement. Any customer business makes stronger business mix, which with higher contribution from specialty products and B2C segment. In addition, the ramp-up of new capacities in the coming quarters will provide further support to growth and operating leverage. So overall, with these levers coming into play, we are confident of progressively stronger performance in the coming period. Thank you. We would now be happy to take your questions.

[Operator Instructions]. Our first question comes from the line of Rohit Sinha with Sunidhi Securities.

So first question is on the [ PAN ] volume side. This quarter, we did, I think, one of the highest volume on a quarterly basis. Although in the last 2 quarters, there was some subdued numbers. So is this a new run rate for us? Or is there some backlog sales also in this quarter, which led to higher volume?

Okay. Thanks for the question. This is Tarun Sina speaking. The reason for a slightly better performance in Q4 on volume terms compared to Q3 is demand strengthening. And as you know, as we get to the last quarter of the financial year in India, all the mining companies particularly have their targets of mineral production and drop production to achieve. So that provides the impetus to the explosive demand. [indiscernible] the TAN volume. So that would be the reason -- primary reason I would say, for better volumes in Q4. This trend is likely to continue, although we are getting into a soft season, as you know, we're getting into monsoon. So Q2 is cyclically and seasonally weaker in terms of demand, but we don't see any long-term demand destruction for any reason.

Right. And currently, the volume, what you're seeing is from our existing capacity once Gopalpur could come in, then definitely, the new normal volume will be much higher where we are going to [indiscernible].

Got it. And sir, in terms of realization, if you could highlight how much benefit we have seen in this quarter or how much is expected to be coming in the Q1, as I believe still considering the kind of volume, revenue is slightly lower as what we have seen the kind of prices prevailing in the market.

Let me start and then Tarun will add into this. Yes, and as you can see on the international market, prices of [indiscernible] are firming up primarily led by disturbance or distractions in the -- because of war in Russia, Ukraine, some of the export got bank and some of the volumes got, I'd say, since both quantity in the country got restricted. On top of that, as when prices get started getting [indiscernible]. So that is getting reflected on our realization of getting this visible at this point of time.

Basically, I think what sort of realization they are prevailing currently, if at all you can disclose?

No. In fact, it's a published number. I'd say, if you're looking in [indiscernible] prices, it's a public number and every month, prices are going up. March has been international was somewhere around 300 -- somewhere around [ 400 50 ]. It has further funded during this quarter. So prices are firming up, although most of our time, domestic prices broadly go in line with international prices. But correlation is not always one-on-one, but broadly trend remains similar, I call.

Secondly, sir, on the [ Equinor ] supply side in as we have received the shipment. So just wanted to understand that kind of how long we have secured in terms of natural gas supply from this shipment?

Now we are fully secured and they're fully secured. The way we have contract, we have a minimum take and take contract with our existing local suppliers. On top of that, we have got now a 10-year long supply. So we don't see actually any shortage of some [ gas ] at this point of time. And not just for the next couple of months, we have a few more shipment parcels already lined up in this year. So it's not the first shipment, and it's not the last shipment. Every -- with a gap of few months, we are getting new parcels. So we are comfortably placed in terms of gas supply is concerned.

Got it. Got it, sir. And one last question before I -- sorry, joining the queue. From the nitric acid side, could you throw some color on specialty grade attract products that we are working on and how we are progressing and what kind of opportunity we have in this?

We are working on some of the, I call it, some of the special customer-grade metric as product. But they are in early stage this point of time. Most of them in, I say, commercial trial-base, not yet fully commercialized. So in terms of contribution, we've been small, but definitely, they are the one which as a team, we are focused on and we are trying to take it to a commercial stage and then it ramp up capital. But currently, it's too early on those products to contribute meaningful in our overall portfolio.

[Operator Instructions]. The next question comes from the line of Shubham Dhasmana with [indiscernible] Office.

Sir, for asset owner IPA prices, what are our expectations for the next 6 months but could be the driving factor for the price result in your opinion?

Sorry, your voice is not very clear. If you can repeat the question.

So for acetone or IP prices, what are our expectations for next month? And what could be the driving factor for the price recovery in your opinion?

Okay. Now if you're asking current IPA prices, it's already very, very high. And the reason for that is the polypropylene is not available for the government restriction because of SPA shortage. So the prices have moved up is [ IP-able ] limited quantity of IP available at this point of time because of RGP limited availability.

So is the price remain -- allocated for some time?

Yes, price will remain a [indiscernible] for some time. before the situation becomes normal, and then we'll have to see what will be the normal IPS prices once things go back. Will it come back to a similar level? Unlikely, but the new normal is expected post that.

Okay. And sir, for a new plant, but what are the cap utilization numbers are we expecting for the full year FY '27?

Okay. The way things look like and since we are in plan business and operating across various geographies this point of time on TAM, we don't expect us, will take much longer time to ramp up and redo I'd say, good capacity utilization level. We expect by end of this year, we should be at least touching 90% to 95% utilization. It will be a gradual uptick. But yes, we should be able to reach there.

The next question comes from the line of Kushal Shah and individual investor.

So my first question is in terms of percentage of [indiscernible] and that we are going to produce from Gopalpur facility and our current facility, and it is in the light of the fact that we are oversupplied as far as [indiscernible] is concerned and also as an investor rose a question in previous quarterly call. But as far as [indiscernible] is concerned, I think we are undersupplied and please confirm that a [indiscernible].

Thank you for the question. Again, this is Tarun and I'm answering this question. One of the benefits we have across our can plants whichever location you look at, if all our tank plants are fully fungible in terms of the product mix which means all plants, whether 3 production lines in [indiscernible], one in [ Chikapalam ] and the new one coming up in Gopalpur, they can produce any kind of product mix in solid in the good form. And within solid any mix between high density and low density. So this benefit is passed on to the market because we produce to market needs. It is not inward or an internal decision that this is the ratio of the products that we produce in different plants. We are here for customers and the market needs. So we keep changing gears in terms of the product mix as and when the market needs change. That's how we look at it. That's how we plan things going forward. So there is no particular number or ratio anyone can give at any point in time in terms of the product mix.

And my second question is on the lines of that we acquired an exclusive manufacturer. Could you please tell the long-term strategy of the company with respect to that particular explosive manufacturer?

So this acquisition, as our Chairman mentioned in his opening speech also, is consistent with and a very big enabler to the transformation strategy of DMSL, which is the mining solutions mining services entity of the group. In the sense that the business model that we are evolving in [ DSL ] is that of being able to provide the productivity improvements in the mines and the quarries and the infrastructure projects, simple definition of productivity improvement is cost of mineral extraction, cost of log extraction. So how can we impact that through a solution? For that, we need a full range of products under our control, and that comes from -- that's one of the things we achieved from this acquisition as we build upon this journey of being able to have a full range of products to take it to the mines and end users to provide those solutions. So that's the strategic fit of this acquisition in the overall transformation journey of [ DMS ] from being a traditionally an producer and supplier to a holistic mining solutions provider.

The next question comes from the line of [ Shi Kumara ] with Sumika Capital.

Yes. My first question is on margins. So how should we look at chemical margins because of backward integration benefits and this gas contract keeping in.

If you're looking total I'd say, segment-ize chemical, then yes, the margin improvement will happen because e-commerce contracts do give us benefit in terms of all our input costs. However, the way we look in the business, each business has been seen rapidly based on IP transfer pricing, not based on cost plus. So each business on its own will show the profitability. And Equinor gas contract benefit will finally flow into our ammonia business, which is [indiscernible]. But if we're looking holistically, the margin improvement is certain and that will get reflected in our consolidated chemical portfolio.

Any quantification would help if you can?

No. That's the information. You'll be able to see once we come up with next quarter result, partial reflection will be visible there.

Okay. And my second question is on the cash flow. Receivables and inventory days have gone up significantly during the year. So how should we [indiscernible]?

Okay. This is basically as [indiscernible] also spoke fertilizer business has gone soft. The [indiscernible] season was not -- I'd say it towards the end of [indiscernible],we have been uneven brain and then farmers getting impacted. Currently, the inventory is slightly higher in the trade channel inventory is slightly higher. So that's what is leading to higher inventory as well as receivables in our fertilizer business, but now reaching to [indiscernible] season, the actual pool is going to start from next, I'd say, any time now, we have reached to paid. So this is a temporary buildup for our [indiscernible] maybe next month or 2, we'll back to normal and this elevated working capital will not be there.

Okay. And if you can give us a CapEx guidance for FY '27 and possibly '28?

'27, definitely, CapEx continues to be because we have 2 ongoing projects, which is -- which needs to get completed both the [indiscernible] and the -- and there is a CapEx spending. I already shared all overall project CapEx for that is around INR 4,650. And currently, total CapEx spend, including ESPN advances around INR 3,800 crores. So there is -- there is almost INR 800 crores to INR 1,000 crores CapEx spending, including maintenance. So this year will be an elevated CapEx. Next year onwards, we should back to a normal CapEx because our current phase of investment will come into an end and before the next wave start it will be a normal maintenance CapEx, and that should be in line with what we have seen in the last couple of years, not significantly [indiscernible].

The next question comes from the line of Parth Kotak with [indiscernible] Asset Management.

Most of my questions have been answered. A couple of questions. One, on the demerger front. Any expected time lines are we expecting to do it this year?

No, not immediately. In fact, we yet to take a call in terms of form and shape and timing of subsidiary listing and the major listing, I call it not be matter, how and when it has to happen. So we'll come back once we have more clarity. But yes, we are committed and we'll work that [indiscernible].

Sure. Sir, just second question. In the opening remarks, you mentioned that we have adequate supply tie down for ammonia [indiscernible]. So if you could probably give us some details on where the supply is coming from, I mean, how have you tied up the capacity, that would be helpful.

Okay. Now a couple of things when we say ammonia. Currently, if you see -- we ourselves produce almost 500,000 plus ammonia from PCL. We also trade in ammonia, a large quantity of ammonia is being paid by us, which means we import and we sell -- we do have an expertise of ammonia, that's what we claim, I call it or we can gain. We are in this business for long. So there's no -- I'd say there's no disconnect in terms of we think ammonia has been tighter. We have a contract in place. So we know from where the origin plays -- and we have -- since we have -- we are already in importing and selling ammonia for us, some more additional quantity need to buy and supply into that plant. So that's not a challenge for us. And that's why -- that's what gives us the confidence we are ready for the [indiscernible] supply.

That's great to hear, sir. So going by your guidance, I'm assuming there is no Strait of Hormuz risk for procurement of ammonia. And just to add to that, do we have like a long-term contract for ammonia as well? Or it just like being traded on spot?

This point of time, long-term contract, no, I call it, but we have a contract with not one, but number of suppliers and that supplies continue to supply. It's not we buy one of -- so every month, we continue to buy. So that contract holds good. But yes, once we reach near to the farmer, if we need -- if we feel there's a need for long-term contract, we are ready and that can be done. So there's no short stop that.

The next question comes from the line of Ritesh Bhagwati with [ Alpha ] Capital.

So my first question was on the [indiscernible] chemicals that we have acquired. So like we have paid around INR 120-odd crores, [ 400% ] stake. Now can management just walk me through in terms of the valuation breakup. Like what are we paying for it exactly? Is it the licenses, the assets, technology, order book? And also, if you can give some guidance as to when this particular stake will you get operational and what sort of revenue and EBITDA we can see over the next 1 or 2 years?

A lot of questions in a single question. So Tarun Sinha again here. In terms of the valuation, without getting into the numbers and the breakup, you're right in terms of the overall number, but what it is made up of is, it's the value of the land. It is the value of the licenses. It is the value of some plants and equipment. It is the value of the location of the facility, which is the proximity to the market. And last but not the least, it's the get to market speed through this acquisition compared to if we were to put up a greenfield site. All these factors have been taken into consideration for the valuation, and that's the number you talked about. So that's the answer to the first part of your question. In terms of how are you going to set it up, our plan is to bring this facility to deeper standards. So there will be a project team, which is going to reform very soon, and they will work on the upgradation of the facility. Also, we will add a number of new clients to this facility to capitalize on the license capacity that we have invested in. And then once we are ready with all of this, there will be a point in time, we will update all of you when we are ready to roll the products out in the market. And again, these products will go out in the market, not as products, not as commodities, but they will go in the form of holistic solutions, which is what I was talking earlier. These products will be supplied in a way and provide it to the mines and infrastructure segments in a way that the products and associated solutions are able to improve the cost of rock and mineral extraction of the end consumers. [ Cash ] the business model, and that's what this investment is aimed to achieve for us.

Okay. That's a great understanding that you have given. Lastly, on the CCDs that we have issued for the [ MS ] like INR 800 crores. I just want to understand like who holds the [ CCDs ], like is it some third party? Or is it some promoter or related entity? And also, I just want to understand as to what is the conversion price ratios and what sort of trigger terms that we have finalized for that. Because what I want to understand is what is our stake eventually if such conversion happens.

Now the CCD was issued last year in quarter 1 actually. And that CCD was issued as a mix of third party as well as the promoter entity participated in that. The split was issued by accounts subscribed by third party and INR 300 crores the promoter entity. Since they are CCD, it has a fixed conversion ratio -- no, it has a fixed conversion ratio. The number of shares are fixed at this point of time because our the [ CCD ] can be structured. And issuance is post roughly around 3 months when the conversion [indiscernible]. So it's just 12 months so far. So we still have time before the issuance gets converted.

The next question comes from the line of [Adarsh Jan ] and Individual Investor.

My question is related to both the projects which are coming up now in Q2. Earlier this was [indiscernible] I mean, in Q4, the 26%, but then it got delayed by 1 quarter, and now it is again delayed by 1 more quarter. So do we see -- I mean, further delays in implementing, I mean, starting with the projects for this?

Currently, if you ask -- are we expecting any further delay? No, definitely no. Even this quarter, delay, which got delayed from Q4 to now -- from Q1 to Q2, while not led by any major factor. It was more led by nonavailability of still workforce because of various factors, which came and got impacted or got affected. We could not see a progress which idly should have happened. And that's what has pushed us. Nothing is otherwise is there, which we see this project can be delayed or can push this further. More other reasons are visible [indiscernible].

Okay. And what was the last year -- last financial year, revising for [indiscernible] chemicals, which we have acquired -- before that I could see, there were no revenue or before the [indiscernible] for 3 years, there worsening from the rotations. So for last year, was there any revenue from [indiscernible]?

No, there are no revenue. At arose, we are actually going to revamp this facility and bring it up to deeper standard, and then revenue will flow for [indiscernible].

Okay. And do we see a significant amount of allocation again for ramping up the capacity?

In terms of CapEx, you're asking?

Yes, yes.

No large CapEx expected in this for ramping up the stability or bringing it to our standard, no [indiscernible].

The next question comes from the line of Meet Vora with Emkay Global.

I had a couple of them. The first was on [ PCL ]. What would be our current gas costs, including contractual and spot from the existing mix? And so how will this change with the final contract?

Okay. We don't share very precise gas cost and pool gas price. But definitely, [indiscernible] will give us 2 things very clearly, one supply security or supply surety, which definitely [indiscernible] challenge in the current environment. Second, it will give a cost optimization or cost benefit because of long-term contracts. And the current gas prices are -- the benefit is definitely there. And even the long-term rate averages in wise, we do see the benefit continue to flow from here. How much it is? Yes, that's information, still not available for public or in the public domain. We'll come back once we feel this is the right time for us to share.

Sure, sir. So basically, what I was trying to understand, based on the current gas cost, even if we take some modeling contracts, which is available in the country in public or ammonium breakeven or anyone remembers among the country, breakeven should come to around $550, $600. Where is the current ammonia price is between $900 to $1,000 or maybe slightly more than that in domestic market? So is it fair to assume that the strength of converting gas to mono currently would be around $450, $500?

Okay. Without specifying on numbers, but adjunction is right. the ammonia price currently is trading at much elevated level. In fact, in the last published number itself was almost around $800 [indiscernible]. So that's the prices at which ammonia already trading and with gas prices for [ Henri ], broadly, yes, we do see a significant spread in the current market environment, which ammonia will have.

All right. So the time these prices sustain, this should be fair to assume because we would be manufacturing somewhere around 125,000 tonnes kind of ammonia per quarter. So till the time these prices remain [indiscernible], we can make a roughly around INR 40 crores, INR 50 crores of EBITDA per quarter.

I will not go with the number. But yes, our margin in ammonia business will be significantly better than -- better what we used to discuss or what we used to talk about.

Because there were a lot of questions around the investment done in the ammonia plant. And I think this is the current situation where the ammonia investment is justified, to build on current spreads, we can recover more than 30%, 40% of our investment in this year itself. So --

You are right. And this is the basic -- when we put in a business case for ammonia, we knew ammonia is a volatile commodity. And there will be a time when ammonia having a manufacturing facility will reduce much higher spread and there will be time when we'll squeeze on margin in terms of ammonia. So these are the business banking and business cycle will play both on positive, negative. This point of time, we are in a, say, upcycle and definitely right time for ammonia business to turn around and to make money.

Then I think just if you have any estimate of your debt number because I think the ammonia plant will help us repay significant debt, which is there on the balance sheet. So any estimate around FY '27 and what we look at today's number?

Not yet, I will give that number at this point of time because we do have 2 CapEx going on -- so we need -- so we may need to balance the [indiscernible] and see where the debt number will be for this year.

Okay. Okay. And the second question was with regards to the tank supply from Russia, actually, we have seen disruptions in the last couple of months because of the work providing over there. And we have seen actually blast and few plants, which used to manufacture ammonia and ammonium nitrate -- and this has also led to a sharp increase in van prices. So just wanted your broad thoughts, how do you view the situation in your current context? And what is your expectation? Do you expect this to normalize and say 1, 2 quarters or it may take a longer period of time for the supplies to resume from Russia?

Thanks for the question. Tarun Sinha again answering this question. So you're right, there was a temporary ban imposed by the government of India on export of ammonium and fertilizers for some time --

And also import ban by the [indiscernible].

And also import ban on [indiscernible]. And then that band -- so that caused a little bit of slowness in terms of product availability from Russia. Also, as you rightly said, one of a -- couple of their plants were impacted because of some safety security reasons. So that also caused a little bit of disruption, I would say, in the supply chain from there. The ban has been removed earlier this month by [indiscernible] of Russia. So some supplies are expected to resume from Russia, although the cost levels and price levers will be different. Having said that, as capacities are getting created in media through the fresh investment, one of them being Deepak in Gopalpur. There is a very strong, I would say, a very strong case that Government of India might be thinking that once India becomes completely self-reliant for its ammonium rated needs, then maybe a different approach to imports will be looked at. So that's the latest I can share with you. But of course, things will evolve as we go along.

The next question comes from the line of [indiscernible] with [indiscernible] Capital.

I just wanted to understand the thinking that we are doing and now [indiscernible] iteration turn around. What is the growth that we see in FY '27? And if our margins will be in the similar range that we did in FY '26 or there is a possibility for them to be [indiscernible]?

Okay. I'll not give specific numbers on margin, but in the current environment of global supply tightness, and also with equal gas availability or gas surety and the cost advantage, which we have. We do expect improvement both on growth as well as on -- I call it, on our margin front. Growth will be led both value driven as well as volume driven. When it's a value-driven because in the current environment, in the current environment, price has gone and realization has gone up. So that will get reflected in revenue growth. Volume growth will come up come more with the new capacity when it gets added both Gopalpur and nitric acid. So that will give us a large volume growth coming in this year.

The next question comes from the line of Rohit from Sunidhi Securities. We move to the next participant. That would be [indiscernible] from [indiscernible] Family Office.

Sir, my question is on the time business. What could be our inflation level for FY '27 and '28 for the Gopalpur facility and along with it, there are some news that as [indiscernible] is our largest client, [indiscernible] India is also working on this time CapEx. So what's your thought on it?

Okay. Now on mobile for utilization level. I already spoke about -- this year, ramp-up will be there, and we expect by the end of this year, we should be in the range of 90% to 95%. So the utilization level will reach to its optimum level. And next year, we should full capacity utilization or almost similar capacity utilization from a great level. So that's how the number was for the expectation what we have. [ Coal India ], Tarun.

So regarding the question about [indiscernible] money market plant. It's all in the public domain, so I don't think I need to elaborate too much on that. One can just read it. But since you have asked. So Indian coal is very rich in ash content. And there is no coal gasification technology available currently in India to produce syngas through gasification of this high ash content Indian coal. That technology is currently being developed by [indiscernible] India through some joint ventures through some alliances. We do not know at this stage. We are not privy to that information. How far is the progress and how long it might take to develop that technology. Then of course, as things progress, there'll be more [indiscernible] which will emerge and it will come in the public domain. So I mean, these questions are better asked in [indiscernible] India's conference calls rather than in Deepak's calls.

Okay, sir. Second question on Specialty Chemical business. What's your outlook on the Specialty Chemicals segment over the medium term, particularly the context of the current pricing and the environment demand. What sector could be like critical for us for the margin to recover towards the tonic level?

You're talking about fertilizer business, right?

Yes, sir.

Okay. Now we are committed, and that's what we continue to say. Our business focus is very clearly grow our specialty business in fertilizers. And we continue to work in terms of different -- I said on different dimensions when it comes to specialty business. One, keep looking at introducing new products on specialty side. And that's our R&D divisions that we have in the company works to develop those products, also keep looking in sourcing those products from our JV partners. So that's the strategy. Second, we are also looking on key market -- the focused market where we know these products can help us to grow faster, where the farmer adoptions will be very fast. And that's our focus very clearly the way we look both working with R&D to improve product portfolio and also getting into -- deeper into geographies will give us significant very high growth compared to our fertilities. The pie of specialty will keep going up compared to the overall revenue share. And definitely, you would have seen the margin profile or specialty business and subsidized business is different. So more share coming from specialty will help us to do a margin upliftment. And that's the strategy on which we are working and we'll continue to work on that.

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

Thanks, everyone, for taking out time and extending your support to Deepak. I wish all of you health and good time, look forward connecting with you again, in between the calls or during the next conference call. Thank you. Bye.

Thank you, sir. Ladies and gentlemen, on behalf of IIFL Capital Services, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.