Shree Pushkar Chemicals & Fertilisers Limited (SHREEPUSHK) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Q3 and 9 Months FY '26 Earnings Conference Call of Shree Pushkar Chemicals & Fertilisers Limited. [Operator Instructions] Please note that this conference is being recorded. I would now hand the conference over to Mr. Pankaj Manjani, Company Secretary of Shree Pushkar Chemicals & Fertilisers. Thank you, and over to you, sir.

Good afternoon, everyone, and we welcome all the participants to Shree Pushkar Chemicals & Fertilisers Limited 's Q3 and 9 Months FY 2026 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'll hand over the call to Mr. Punit Makharia for his opening remarks. Over to you, sir.

Thank you, Pankaj. A very good afternoon to everyone. And a very warm welcome to Shree Pushkar Chemicals & Fertilisers Limited Q3 FY '26 Earnings Call. I hope you all had an opportunity to review our financial results and earnings presentation, which are available on the stock exchange and the company website. Joining me today from this management side is Mr. Deepak Beriwala, our Chief Financial Officer. In continuation of the growth momentum witnessed in the previous quarter, I'm pleased to share that Shree Pushkar Chemicals has delivered a strong performance during Q3 FY '26. Revenue from operations was at INR 249 crores, reflecting a growth of 14.6% on a year-on-year basis, driven by an increase in volume sold and sales in the Chemical business. On the profitability front, EBITDA was at INR 22 crores with a margin of 8.9%, while profit after tax was at INR 18 crores with a margin of 7.3%. On the operational front, in addition to the ongoing capacity expansions planned at Ratnagari Unit 5 and Unit 6 and at Meghnagar Unit 8, the company has completed the land acquisition, commenced civil work and is in the process of placement of the orders for the critical plant and machinery. In line with the progress, 25% of the proceeds from the preferential issue has been directed towards the Meghnagar Unit 8 project. Shree Pushkar is also committed to driving sustainable growth alongside its expansion plans. In line with its commitment, the company currently operates 9.8 megawatt DC solar plant with the capacity being expanded through 2 additional installations. Upon completion, the total solar will reach to 20.6 megawatt DC under open access scheme. These initiatives is a part of the key strategy to enhance energy self-reliance, reduce carbon emission and ensure long-term sustainability. The company has also incorporated a subsidiary in Bangladesh that is Dyecol Bangladesh Limited. This subsidiary will serve as a representative and marketing office for the company and will carry out related business activities in Bangladesh. During this quarter, company carried out a preferential allotment to the promoter for INR 30 crores. This makes a third preferential allotment by the company, underscoring the promoter continuation confidence in Shree Pushkar's future prospect and its ongoing strategic growth plans. With these strategy initiatives backed by strong integration and sustainability-focused operation, Shree Pushkar remains well positioned to sustain growth momentum and enhance profitability and create long-term value for all the stakeholders. Friends, I will now hand over the call to Mr. Deepak Beriwala, our CFO, to take you through the detailed financial performance of the quarter. Over to you, Deepak.

Thank you, sir. Good afternoon, everyone, and thank you for joining us today. I will now take you through the financial performance of the Shree Pushkar Chemicals & Fertilisers Limited for the third quarter of FY '26. Starting with the top line, revenue from operations for Q3 FY '26 was INR 249 crores, reflecting a growth of 14.6% on a year-on-year basis and remaining broadly stable sequentially. This strong performance was driven by an increase in volumes sold and sales in the Chemical business. In the Chemical segment, revenue was INR 156 crores, a growth of 38.1% year-on-year basis and 18.2% quarter-on-quarter, driven by the improved volumes and strong demand. Sales volume for the segment was 26,595 metric tonnes, marking an increase of 75.6% year-on-year and 54% sequentially, reflecting continued stability in the chemical markets. In the Fertilizer segment, revenue declined by 10.6% year-on-year to INR 93 crores due to steady demand from the Agriculture sector. On a sequential basis, revenue declined by 25% due to the seasonal moderation in the December quarter. In terms of the volume, the segment achieved sales of 53,444 metric tonnes lower by 23.7% year-on-year and 26.3% sequentially. Moving to the profitability growth for the quarter was INR 79 crores, a growth of 2.4% year-on-year with a gross margin of 31.9%. EBITDA come in at INR 22 crores, a decline of 1.7% year-on-year with the margin at 8.9%. Profit before tax was INR 20 crores, up by 8.8% year-on-year, while profit after tax was INR 18 crores, up by 13.5% year-on-year basis. The PAT margin for the quarter was 7.3% for the 9 months FY '26 revenue from operations was reported an INR 759 crores, a 29.2% increase year-on-year. EBITDA was INR 77 crores, up 13.8% and PAT was INR 57 crores, up by 36% compared to the 9 months FY '25, reflecting sustained momentum across both business segments. The company continued to maintain a strong financial position supported by the strong internal approvals and preferential allotment. As of 31st December 2025, non-lien deposits of amount to INR 176.75 crores, providing ample liquidity to fund ongoing and upcoming expansion plan without relying on the external borrowings. To summarize, Q3 FY '26 reflects steady performance for the fiscal marked by the consistent revenue growth supported by the operational efficiencies disciplined financial management and a strong balance sheet, we remain confident of sustaining our growth momentum while continuing to strengthen our integrated and sustainable business model. With that, I will now open the floor for questions. Thank you.

[Operator Instructions] The first question is from the line of Prit Nagersheth from Wealth Find Advisors (sic) [Wealth Finvisor].

So my question is that I wanted to basically understand why the gross margin declined from 35.7% in Q3 of FY '25 to 31.9% for this quarter.

Your question is, can you come again?

Punitji [Foreign Language].

[Foreign Language].

[Foreign Language].

35.7 percentage, okay.

[Foreign Language].

And in terms of value because I'm not in the office, Pritji, so the exact data are in front of me. So my apologies for that.

[Foreign Language] So the gross profit has come to INR 79.3 crores absolute [Foreign Language] from quarter last year INR 77.4 crores. [Foreign Language].

[Foreign Language] based upon your question and the data you gave to me is that [Foreign Language] this is mainly in terms of the increase into this raw material prices. That too also specifically because of due to the sulphurous, due to the sulphur. Sulphur is a very important ingredient in our whole chain of the raw materials. We have got our various plants of sulphuric acid wherein we use sulphur as a basic raw material. And in turn, with the sulfuric acid, oleum 23%, oleum 65%, thyonil chloride and like chloro sulphonic acid. These are -- these all are the derivatives of the sulphur [Foreign Language], whatever the acid we produce almost 70%, 75% of this total acid we consume in-house balance [Foreign Language]. And if you look at the sulphur, sulphur has started going up from mid of the second quarter till today from -- traveling from $283, $284 as of now, it's $560. As of now, $560. [Foreign Language] it is $520 FOB. So I think [Foreign Language] further, I will go in more details about this input, and I will again come back to you. But as of now, apparently [Foreign Language] this might be one of the major reason that the cost of the sulphur has gone up tremendously, which has resulted into the increase in the raw material cost. [Foreign Language] acid which was earlier prevailing at [Foreign Language], now is at close to INR 18,000 tonne. That could be the major impact to answer your question.

[Foreign Language].

[Foreign Language] it takes a bit time. [Foreign Language] because what we import sulphur, we import in a bulk [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

I believe Q4 [Foreign Language].

[Foreign Language].

Hopefully.

Correct. Correct. [Foreign Language] volumes may have decreased by 10%. [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]. Same story of sulphuric acid as well. To produce 1 tonne of SSP, you require 0.35x of sulphuric acid. And you can imagine when the sulphur price goes almost double, what kind of impact it would have on the SSP. [Foreign Language].

[Foreign Language].

[Foreign Language] this will go further next season. [Foreign Language] Because let me be very honest with you [Foreign Language]. Generally we use to take the sulphur cost, the sulphuric acid cost of around INR 3,500 to INR 4,000. Sir, today it has gone [Foreign Language]. It's a bit painful transition phase. But then also looking at the whole business model of the company, zero waste, debt-free, we have been able to perform much better than our other competitors. So we have behaved much better than others.

Perfect, sir. [Foreign Language].

Still we are waiting for the electricity line. [Foreign Language] as I mentioned last time that MSEDCL has promised us that by the month of February, they would install an additional this transformer. This is the beginning of February. We hope [Foreign Language] then we should be able to proceed further. Otherwise, if you talk about the plant and machinery, almost the entire plant is completely ready and we just need to announce the commencement of the trial production, for which we are waiting for the electricity connection to be resumed.

Okay, sir. [Foreign Language].

Sir, MSEDCL [Foreign Language] and we are in 12th of February. Still there is a time to go. We still await and we are still quite hopeful that we should get in February. Or honestly speaking, [Foreign Language] let us wait for the best [Foreign Language] we hope in next few, next few, 1 or 2 weeks, we should have more clarity on this subject.

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]. This is a whole turning of the industry wherein you will see earlier these products were being imported from China. Now these products are being exported to China. So this -- you can easily visualize the kind of a change. And just imagine once this happens like this reduction or this removal of the VAT refund, ultimately, China has become noncompetitive.

The next question is from the line of Harshil Solanki from Equitree Capital.

[Foreign Language] So does this affect our business negatively because if [Foreign Language].

[Foreign Language] I'm just sharing my views with you on a very open platform, right. Because [Foreign Language] they may put certain of their demands. If their demands are not met to the required levels, they will shut the whole textile industry off. This is what I have understood from that news article and from the various inputs and the various intelligences, what the people and connections we have in Dhaka, number one. Number two, [Foreign Language] without this textile Bangladesh economy is difficult to run. Though there is a political instability in Bangladesh, I can understand whatever the news articles we are reading in the various print media or the digital media is a bit scary. We have stopped going to Dhaka for the past few weeks. Our people had traveled to Dhaka almost [Foreign Language]. After that, we have not traveled to even Dhaka also. But as far as the business is concerned, let me tell you very loud and clear, there is still business coming from Dhaka. Yes, volumes have reduced. But we also believe strongly and the kind of inputs we get from our customers there that this is a very temporary phenomenon, which will subsidize post elections. [Foreign Language] I'm not too sure about that. Once the election is completed and the proper government established in Bangladesh, I'm sure the things will come back to the track. The kind of uncertainties going in Dhaka is, in my opinion, it is just temporary. It is not permanently. We also need to believe [Foreign Language] their employment generation, their government revenue generation, their tax generation is mainly from this textile industry. [Foreign Language] I don't think that it is going to remain for a longer time. Secondly, as far as Shree Pushkar is concerned, we have around INR 50 crores of business or maybe INR 60 crores, INR 70 crores of business annually with Dhaka, which is around you can say, 7% or 8% of the total revenue of the company. In the meantime, we also started exploring other markets also like Egypt and other countries, Vietnam and Indonesia. So Bangladesh is definitely, we are not going to leave. As far as our new company establishment is concerned, Dyecol Bangladesh Limited. That company we have made with -- this entire platform has been established by us, but we are yet to start some business or some marketing into this company. We are only waiting for the stability to come, which I believe in next -- post this election, it should be there.

[Foreign Language] Understood. [Foreign Language] sulphur prices have gone up [Foreign Language]?

Sir, ultimately [Foreign Language].

[Foreign Language].

Sir, ultimately [Foreign Language] and this is a completely integrated business vertical, sir. The main important fact what I believe is that [Foreign Language] but the very important is to maintain the stability and sustainability and keep your volumes, keep your customers intact with you. Whether you make some money where more, some less money at some other products. In my opinion, that's not an important criteria. The important criteria is the growth into the business, growth into the volume, addition of a few more customers, managing your inventories and your book debts, that is more important, sir. There are various factors, [Foreign Language], which I explained just now on this con call. [Foreign Language].

[Foreign Language] Understood, sir. [Foreign Language] if you can quantify that?

Which labor, sir?

[Foreign Language].

But Deepak, this is which labor court he is talking about?

[Foreign Language].

I got it. I got it. There is new code of conduct of the labor which has been announced by the government recently.

[Foreign Language] if you can give us some guidance for this year as well as next year?

[Foreign Language] We have been always maintaining that we should be around INR 950 crores or so. In my opinion, we should be close to [Foreign Language].

Okay. And next year, sir?

Next year, sir, I still maintain my earlier statement of INR 1,500 crores, which I believe should not be any problem.

[Foreign Language].

[Foreign Language] and we should be at a PAT margin of around 8% or so approximately. I'm talking about PAT margin of around 8% for this financial year. Next financial year, I believe there would be improvement in the profitability also since the whole scenario is also improving the kind of a political instability and this global -- what we see is [Foreign Language] America, Iran, Israel, Russia, [Foreign Language] I believe these things would also come to some kind of a lower down, mellow down. And in that situation, I believe there would be improvement in the bottom line also.

The next question is from the line of Saket Kapoor from Kapoor & Company.

[Foreign Language].

[Foreign Language] which are awaiting for additional electricity requirement by the company. And in that, there is one additional of this complex unit, which is NPK's phosphoric acid and sulphuric acid and one more unit at Unit 5, which is a dyes plant. Both these plants have almost completely ready to start with. [Foreign Language] because honestly speaking we also thought [Foreign Language]. So it's a continuous process. So we need a permanent regular electricity supply. So because of that, we are just awaiting, rest everything is completed. So what I'm talking is that the addition of these 2 facilities of NPKs and this additional dyes unit. These 2 units will get us more business, but then to also on a conservative basis, I'm only talking about INR 1,500 crores.

[Foreign Language].

[Foreign Language] Because honestly speaking, because I'm a bit conservative and a bit practical person [Foreign Language] it may take another 1 or 2 months more also, sir. So taking in all these accounts in factor, I believe the 60% efficiency is a bit practical and conservative. On the basis of the same, I'm projecting at least INR 1,500 crores. This additional INR 500 crores is not only going to be generated from these 2 expansions. There is an additional utilization of existing capacities also in my opinion.

[Foreign Language].

Deepak, do you have that figure?

One second, sir.

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

Deepak, I think it is A plus.

A plus. [Foreign Language].

[Foreign Language].

[Foreign Language] that has built a pressure on the profitability that was my submission.

[Foreign Language]. Okay. Okay. [Foreign Language].

Because the first question was that, that these margins have slided from 35% to 31%.

[Operator Instructions] The next question is from the line of Varun Sharma, an Individual Investor.

Sir, I wanted to know that 2 deals have been cracked by India. One is the mother of all deals, the European Union deal and the American deal. Sir, do we see any positive impact from the European deal on our company because we can export to Europe also our textiles.

Yes, sir, we do export to Europe. And yes, obviously, we believe that there would be this part of pie, which we would be enjoying in that because we have a big customer of one of a vertical based in Europe. And in my opinion, we should be more competitive to him other than the China. And -- but the same competition is also there with other competitors based in India also. So we believe, yes, it would be on a positive note, thanks to the honorable Prime Minister that he has taken a very positive view and did this lot for this entire industry in India. In my opinion, that should be a positive outlook, sir. But in times, we need to see that how it is reflected into the performance.

Okay, sir. Sir, my second question is that as there is a lot of geopolitical sanction between America and Iran, I hope we don't export anything to Iran.

We don't have any business to any sanctioned countries, whether it is Iran or Russia or any other country, whatever it is, we don't have any business interest and discuss these things with the sanctioned countries.

And sir, my last question is that as we go forward, out of the 2 businesses, fertilizer and chemicals, in which business more pressure is expected in this profitability?

[Foreign Language] you can't say that [Foreign Language] both the businesses have their individual features. And being the whole business model is completely integrated on a based on a zero waste business model. And financially, company is quite healthy and strong, though it's not a very large company, it's a midsized company. And looking at this kind of financial performance of the company, we see that both the businesses are equally important for the company because the whole -- both the businesses are integrated with this one another.

So -- continue, please, sir.

Any more questions?

Yes, sir. I wanted to -- sir, one more question. Sir, what is the minimum margin we should expect that the company will not go below that level in the PAT margin?

[Foreign Language] we went down till 5.5%, but that was a different global situation. And today, we have reached to a level of 8%. In my opinion, we still have a capacity and capability of going it to around 10% to 11% in times to come.

And what is the lower end, sir?

[Foreign Language] I can't predict. How can I say what could be the lower end when this -- what could be the higher end? We are doing our level?

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]. Let us have a positive view. We look there is this great opportunity lying ahead. We have excellent business model. We have excellent track record. We are a financial stable company. And being we are the financial stable company, therefore, we have completed this expansion of INR 175 crores from internal accruals. We have -- we are on the verge of completing this additional expansion of INR 155 crores also. Over and above, we have also announced the third expansion also of INR 347 crores. And that too also promoter is also doing the third preferential allotment.

The next question is from the line of [Neeraj] from [France Group].

Congratulations on great set of numbers. My question is, I'm on the Slide 14 of the presentation.

Sorry?

I'm on the Slide #14 of your presentation.

Deepak, can you open Slide #14? Okay. Please go ahead.

So Unit #5 and 6, you are saying that it's expected to get started in Feb 2026. But when I'm seeing the CapEx?

Wait, wait, wait. I have not said like that. I have said as follows that we are expecting to see.

You said that the electricity connection, we can get started the Unit 5 and 6 in Feb of 2023.

We are expected to see the trials somewhere by the March if we get electricity connection by February.

Yes, yes. But I'm seeing that Unit 6, the CapEx outstanding is close to INR 60 crores. So I don't know if these numbers are as of 31st December or as of current number. But with such a large CapEx, is the plant almost?

INR 155 crores [Foreign Language] it is not only Unit 6. It is Unit 6 plus Unit 5, dyes plant plus our solar of 10 megawatt. Am I right, Deepak? Correct me if you found me wrong, Deepak.

Yes.

[Foreign Language].

[Foreign Language].

[Foreign Language] which is ongoing. We haven't -- that is under process, which I believe should be completed before March.

Before March. Okay. The second question is with regards to the [Foreign Language] where you are saying it is by March 2028. Now since the land acquisition and everything is completed, can't it be completed in 18 months.

It's a greenfield project. [Foreign Language] Pardon?

Is this a conservative estimate of March 2028 to keep?

Sir, it is a estimate because there are 3 plants in Unit 8 also. It is not only 1 plant. These are 3 plants. And the capacity is also quite decent capacity. It's almost double the capacity of our existing Unit 6. So we believe this is at least going to take 2 years or so.

Okay. Okay. And is there any chance, any thought process in the promoter mind that we create 2 separate companies, demerge the chemical and fertilizer business or it's going to be staying as an integrated operation for you?

Sir, we are open to the various views and ideas for the benefit of the shareholders and the company. As of -- in future, if any such things come, we will keep you updated. But we are open to the benefit of this wealth of the shareholders.

[Operator Instructions] The next question is from the line of Praveen Agarwal, an Individual Investor.

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language] double conservative will mis-lead us.

[Foreign Language] And sir, would this be fair estimate [Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language].

[Foreign Language]. We always prefer to sell our product overseas not in local. [Foreign Language].

[Foreign Language].

[Foreign Language] At least when we export these products, so there is a surety of the payment because this is against confirmed instrument of the banking. You got my point.

Yes, sir.

[Foreign Language] because we have already burnt our this oil of mid-night in recovering our money from this east market. [Foreign Language].

[Foreign Language].

I think, Praveenji [Foreign Language]. Since you are into the similar industry, you can speak to me in a different call and I can [Foreign Language] I am not -- I will not like to discuss the plus point of mine and negative point of theirs or plus point. Though both the companies you named are respective companies are my good friends, my close friends and my customers also.

[Foreign Language].

[Foreign Language].

[Foreign Language]. All the best for the future, we're looking forward to FY'29.

Thank you, sir. Thank you.

[Operator Instructions] The next question is from the line of Yash Jhunjhunwala, an Individual Investor.

[Foreign Language] current capacity utilization in the both the industries [Foreign Language].

[Foreign Language] Though the segment would be the similar or the same. But the products are different. [Foreign Language] as far as my experience is concerned, there are very less companies who I believe that are able to achieve 100% capacity [Foreign Language]. If we have a different gamut of certain different products, then we have the better scalability in the market also. And whatever the expansion we are doing and which is under process is not of same products. It's of a different product, but with a similar segment. So I think that will give us more edge in penetration with our customer base also. And since we have a similar kind of a selling platform, our sales team, our dealer network is the same and dealers sell various kind of different products in fertilizer, we only supply him 1 or 2 these products. In case if we can offer him other multiple products also of a similar segment, that will be a better scalability into the market.

[Foreign Language] in the Fertilizer segment, I can think [Foreign Language] so what was the reason behind this decline?

[Foreign Language] increase in the raw material input cost, whereas we have not been able to pass on the entire cost of the increased raw material to our customers. Therefore, we preferred to sell less because [Foreign Language] I would not like to do the business and until and unless there is a profit margin into the business, it is not -- in my opinion, we should be slowing down at that time [Foreign Language] otherwise, let's wait and watch. Secondly, this third quarter [Foreign Language] because being this is a winter season going on [Foreign Language] this is a degrowth into the fertilizer volumes.

And lastly, sir, [Foreign Language] from raw material perspective as well as from finished goods perspective, what can be the impact on pricing? And how -- is this a net-net going to be positive or negative for us?

Sir, it is going to be net-net positive because since the China is reducing its exposure in the international market for the dyes intermediates as well as the dyestuff. So leaving apart China, there's only one country left, which is India, which has the whole chemistry technology for these intermediates and dyestuff in the globe. And China itself has got a huge consumption of the dyestuff within-house. And wherein the India, they export most of their products. As I told before also, if you do pick up the import and export data, you will see that on net-on-net, there is an export from India to China of these dyes intermediates. So I look forward that these are the good signs for getting more -- this recognizing for the Indian dyestuff industry.

As that was the last question for the day, I would now hand the conference over to the management for closing comments. Over to you, sir.

Thank you, everyone, for joining us on Q3 and 9 months FY '26 earnings call. If you have any further questions, please feel free to contact us or our Investor Relations adviser, Churchgate Partners, and we will be happy to address all your queries. Thank you very much, and have a good day.

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