Shree Pushkar Chemicals & Fertilisers Limited (SHREEPUSHK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Shree Pushkar Chemicals & Fertilisers Limited Q2 and H1 FY '25 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the Company Secretary, Mr. Pankaj Manjani. Thank you, and over to you, sir.

Good evening, everyone, and we welcome all the participants to Shree Pushkar Chemicals & Fertilisers Limited Q2 FY 2025 Earnings Call. Joining us today from the management side, we have Mr. Punit Makharia, Chairman and Managing Director; Mr. Deepak Beriwala, Chief Financial Officer. Now, I will hand over the call to Mr. Punit Makharia for his opening remarks. Over to you, sir.

Thank you, Pankaj. A very good evening to everyone, and welcome to Q2 and H1 FY '25 Earnings Call for Shree Pushkar Chemicals & Fertilisers Limited. I hope you had a great opportunity to review our financial results and investor presentation, which are available on both the stock exchanges and our company website. As we close the second quarter of FY '25, the quarter results has showcased our steady execution and focused on operational efficiencies, positioning us well to navigate both opportunities and challenges in the industry trends. Starting with our Chemical division, our volume reached 15,510 metric tons in Q2 FY '25 compared to 16,475 metric tons in Q2 FY '24. This represents a 5.9% decrease from the same quarter last year. Our Fertilizer division has shown a constant demand with sales volume increasing to 60,896 metric tons in Q2 FY '25, a 23.6% growth year-on-year. Combined, these performance has driven our total sales amount to 76,406 metric tons, making a rise of 16.2% rise on a year-on-year basis. Our focus on sustainable growth is demonstrated by strategic investments made in this quarter, including a CapEx of INR 11 crores. That brings our total CapEx as on 30th of September 2024 to INR 68.48 crores, which has been funded totally through internal accruals, supporting our aim to expand opportunities, diversify our product offerings and enhance both forward and backward integration. This investment aligns with our vision for a more sustainable energy mix for our operations. Friends, our ongoing capital expenditure projects are designated to support our growth path by expanding our production capacity in both the Chemicals and Fertilizers divisions. These upgrades will allow us to meet increasing market demands more efficiently once fully operational. These investments are expected not to increase our output, but also enhance profitability through improved cost efficiencies and economics of scales. Government measures aiming at strengthening industrial production, advanced infrastructure and promoting manufacturing are creating a positive business climate, which reinforce our confidence in our strategic direction. A key highlight to our financial strategy remains non-lien deposits facility, which now stands at INR 141.10 crores. This facility provides us the additional liquidity and flexibility as we are continuing to invest in both current and future projections. Looking forward, our focus remains on enhancing operational efficiencies, expanding our capacities and exploring new growth revenues within both Chemical and Fertilizer sector. We are optimistic about the future, which we expect will drive our sustained demand for our products in coming months. With this, now I would like to hand over the call to Mr. Deepak, our CFO, who will dwell deeper into the operational and financial specifics of Q2 and H1 FY '25. Thank you. Deepak?

Thank you, sir. Good evening, everyone, and thank you for joining us today. I will take you through our operational and financial performance for the second quarter and first half of FY 2025. In Q2 FY '25, our Chemical division achieved a sales volume of 15,510 metric tons, marking a 2.7% decrease from the previous quarter and 5.9% decline compared to Q2 FY '24. In the Fertilizer volume is 60,896 metric tons since Q2 FY '25, down 12.7% quarter-on-quarter, but replacing a 23.6% increase year-on-year basis. Together, these results brought our total Q2 sales volume to 76,406 metric tons, representing a 10.8% sequential decline, but a 16.2% increase over Q2 of the previous year. For the first half of FY 2025, our consolidated volume in Chemical did generate 31,453 metric tons, representing a year-on-year growth of 4.8%. The Fertilizer recorded 130,618 metric tons in H1 FY '25, a 23.6% increase compared to the first half of the previous financial year. This overall growth led to the total volume of 162,071 metric tons for H1 FY '25 marking a 19.4% increase over H1 FY '24. Turning to our financials, we reported a consolidated earning of INR 175.6 crore in Q2 FY '25, reflecting a 9.6% decrease from the previous quarter and 5.2% from Q2 FY '24. EBITDA for Q2 FY '25 was INR 19.1 crores, a year-on improvement of 36.7%, giving an EBITDA margin of 10.9%. Net profit for the Q2 FY '25 INR 13.3 crore, with 57.5% increase year-on-year, resulting in net profit margin of 7.6% for the first half of FY 2025, hour revenue counted so INR 369.8 crores is a 2.5% increase year-on-year. EBITDA for H1 FY '25 was INR 36.7 crores delivering the EBITDA margin of 9.9%, a 31.3% year-on-year increment. Net profit for H1 FY was INR 26.2 crores, a 60% increase on year-on basis with a net profit margin of 7.1%. With that, I open the floor for questions. Thank you so much.

[Operator Instructions] The first question is from the line of Preet [indiscernible]

Yes, good number Shree pushed currently. [indiscernible] we were looking at an overall guidance of 15% for the full financial year, which would have taken, say, our turnover to somewhere between INR 825 crores to INR 840 crores. Now given the run rate that we have achieved, that looks very difficult. So can you share what your revised numbers could look like for the full year?

Preetji, honestly speaking, I don't see it more difficult. And as you see that we have already done close to INR 370 crores revenue on a total consolidated basis and around, I think, profit margin of INR 26 crores on consol basis on H1. If I -- if you see our earlier past performance, generally, it has been seen that the Q4 is always better than the previous 3 quarters. [Foreign Language] I have always said my idea and my projection is that [Foreign Language].

Right, sir. [Foreign Language]

[Foreign Language] I returned on 9th of this month only. [Foreign Language] We were selling till the second quarter. [Foreign Language] Till January, almost, we are packed up.

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Right.

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Sir, everything is done. Complete, complete, complete.

Very good, sir. [Foreign Language]

Definitely. [Foreign Language]

Right, sir.

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[Foreign Language] This will add about 1%-odd more to the EBITDA. [Foreign Language]

No, no, no. [Foreign Language]

Correct.

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[Foreign Language] supposed to completed by '31 or Q2 of FY '28. [Foreign Language]

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[Foreign Language] Can we target INR 1,000 crore turnover for '26, based on how you see the environment and capacity?

'25, '26?

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[Foreign Language] Let us not expect something miracles to this and you will also see [Foreign Language].

Sorry, 8% of?

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[Foreign Language] Let us maintain the cash flows.

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[Foreign Language] we behaved conservatively. [Foreign Language]

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Absolutely, sir. We are very happy with your management, also. And we wish the entire team our very best. [Foreign Language]

[Operator Instructions] The next question is from the line of Harshil Solanki from Equitree Capital.

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[Foreign Language] inventory will build up there. [Foreign Language]

[Foreign Language] Solanki, am I audible?

Yes, yes.

[Foreign Language] I maintain my same submission in reply. [Foreign Language] Same answer, I would like to submit here also in a copy-paste manner. [Foreign Language]

[Foreign Language] No issues with that.

[Foreign Language] When you can manage the inventory, when you can handle your cash flows where you know that the pricing are improving in future market, why to sell today's inventory? When there is no pressure of the cash, when there is no pressure of the bank, still company remains to be debt-free. Rather the company has increased its total investment values to INR 141 crores, then the company is not having any kind of a pressure, then why not to hold inventory if we see a future outlook of the inventories to be at a better pricing level?

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[Foreign Language] I will look for the right time and right opportunity to rate the market.

Sir, I got your point. And sir, [indiscernible].

Yes, yes, please go ahead sir. Mr. Deepak is here.

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[Foreign Language] interest income is INR 2 crores [Foreign Language] investment is INR 92 crores. [Foreign Language]

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H1.

Half year.

Yes.

So 2 divided by 92.

2 divided by?

92.

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Interest income.

Interest income?

Yes.

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Yes.

2.11 CR derivatives and 2.11 CR interest income.

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[Foreign Language] Have you understood the question?

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Do you want to take up the proper things?

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Solankiji, Deepak will dig out the exact situation and then come back to you sooner or later.

Sure, sir. [Foreign Language]

[Foreign Language] I hope you have our office number. You can dial our office number and ask for Mr. Deepak, she will connect you.

[Operator Instructions] The next question is from the line of Saumil Shah from Paris Investments.

I have a couple of questions. So this year, we are guiding for INR 800 crores to INR 825 crores of revenue and INR 60 crores of PAT. So next year, as you said around INR 1,000 crores plus/minus 5%. And what can we expect in terms of PAT, profit after tax?

[Foreign Language] To be on a conservative side. This year, I am projecting that we should be close to 8%-or-so. [Foreign Language] In my opinion, as I said in the last con call that we are end of a dark panel and we see a bright time ahead. I still maintain the same statement as of now also. [Foreign Language] But in my opinion, it will better than this year, but I still maintain the same statement as of now [Foreign Language]

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[Foreign Language] But in my opinion, it will be better than this year, But I still have a very great confidence that [Foreign Language] We will come back on our earlier position, that's not a great thing.

So, maybe in 1 or 2 years, we can reach that.

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[Foreign Language] We are doing INR 230 crore CapEx.

[Foreign Language] Generally, based upon my earlier experience I have seen, [Foreign Language]

[Operator Instructions] As there are no further questions from the participants, I would now like to hand the conference over to Mr. Punit Makharia for closing comments.

Thank you very much. Thank you, everyone, for joining our Q2 and H1 FY '25 earnings call. If you have any further questions, please feel free to contact with our Investor Relations adviser, Chate Partners, and we'll be happy to address your queries. Thank you very much, and have a good day.

On behalf of Shree Pushkar Chemicals & Fertilisers, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.