Shree Pushkar Chemicals & Fertilisers Limited ($SHREEPUSHK)

Ladies and gentlemen, good day, and welcome to Shree Pushkar Chemicals & Fertilisers Limited Q4 and FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pankaj Manjani, Company Secretary and Compliance Officer, for his opening remarks. Thank you, and over to you, sir.

Good afternoon, everyone, and we welcome all the participants to Shree Pushkar Chemicals & Fertilizers Limited Q4 and 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 welcome to Shree Pushkar Chemicals & Fertilisers Limited Q4 and FY '26 Earnings Call. I hope you had an opportunity to review our financial results and earnings presentation, which are available on the stock exchange and the company's website also. Joining me today from management team is Mr. Deepak Beriwala, our CFO. As we close financial year 2026, I'm pleased to share that Shree Pushkar has delivered a strong and balanced performance, reflecting steady growth, effective options and progress on key expansion initiatives, both our chemical as well as fertilizer business. Highlighting the business results of our operational focus on strategic initiatives over the year, I would like to walk you through the key financial and operational outcomes as follows. For the full year, revenue from operations reached at INR 97.60 crores, representing a 21.1% increase compared to FY '25. Growth was supported by higher volumes in the Chemicals segment and improved realization in the Fertilizer segment. Over the full year, the Chemicals segment grew by 25.2%, while the Fertilizer segment grew by 16.5%, demonstrating the effectiveness of our operational executions and portfolio strategies. profit for the year stood at INR 9.5 crores with a margin of 10.2%, while PAT comes 17.1%, translating to 7.1% margin. The improvement in the profitability has also translated into strong return ratios. The return on equity increased to 12.2% and return on capital employed rising to 15.3%, reflecting company's disciplined approach to capital deployment. During FY '26, the company has reported revenue from operations of INR 18.2 crores. The perform in the quarter was affected by ongoing supply chains and impacted raw material availability. EBITDA stood at INR 2.1 crores, reflecting a margin of 10.1%, while PAT was 12.9% with a margin of 5.8%. During the year, the company continued to invest in expansion and integration initiatives across both segments, aimed at enhancing production capacity, strengthening our operational efficiencies and supporting long-term growth. The company has a total planned expenses of INR 512 crores as of March 31, 2026, and INR 189 crores has been incurred on the ongoing projects and manufacturing facilities. It is funded through a combination of internal accruals and preferential allotment. These investments reflect the company's commitment to scaling its operations on a disciplined and strategic aligned approach. As of these initiatives, the company has made a steady progress. on its ongoing expansion projects in both chemical and fertilizer segments. While the commission of Ratnagiri Unit 5 and 6 experienced some delays due to external factors, all preparative work and project milestones remain on that track. Contemplating these operational developments and our focus on sustainability, I'm pleased to share that during FY '26, the company has commissioned 1.1 megawatt DC solar power plant at [indiscernible], bringing total installed capacity of solar to 10.6 megawatt DC and enhancing our renewable energy capabilities. Along with this side, the previous announcement of 10-megawatt solar plant at [indiscernible], Maharashtra remains on track, which will ultimately take solar capacity to 20.6 megawatt DC. further emphasizing the company's commitment to renewable energy and sustainable operations. In summary, FY '26 has been a year of steady growth and focused execution for Shree Pushkar. The company has strengthened its operational performance, advanced key expansion initiatives and conducted to invest in sustainability, all while maintaining disciplined financial management. Looking ahead, we remain committed to delivering values for our stakeholders by leveraging our expanding capacities, optimizing of the operation across both the segments and further enhancing our renewable energy initiatives. We are confident that these efforts will position our company for continued growth in the coming years. I will now hand over the call to Mr. Deepak Beriwala, our Chief Financial Officer, to take you through the detailed financial and operational performance for Q4 and FY '26. Over to you, Deepak.

Thank you, sir. Good afternoon, everyone, and thank you for joining us today. I will now take you through the detailed financial and operational performance of the company for the quarter and full year ended 31st March 2026. In Q4 '26, the company reported revenue from operation of INR 218 crores, reflecting a steady performance. Our gross profit during the quarter was INR 83.7 crores with a margin of 38.4%. EBITDA for the quarter was INR 22.1 crores with a margin of 10.1%, while PAT was INR 12.9 crores with a margin of 5.8%. In the Chemicals segment, the company reported sales of 13,725 metric tons, reflecting a 36% year-on-year increase generating revenue from operation of INR 12.4 crores. The Fertilizer segment recorded sales of 5,500 metric tons contributed to INR 91.8 crores in the revenue from the quarter. Overall, consolidated volume for Q4 FY '26 reached 64,239 metric tons. The quarter performance was affected by ongoing supply chain challenges which impacted the availability of the raw materials. For the financial year, the company reported revenue from operation of INR 96 crores, reflecting a 21% growth over FY '25. Gross profit for the year was INR 31.5 crores, up by 17% with a margin of 3.9%. EBITDA stood at INR 9.5 crores, representing an 18.7% growth with a margin of 10.2%, while PAT increased 19.6% year-on-year to INR 70 crores, translating to margin of 7.1%. The growth was supported by higher volumes in the Chemical segment and improved realizations in the Fertilizer segment. The Chemicals segment recorded sales of [ 172,423 ] metric tonnes, up by 7.9%, generating revenue of INR 5.8 segment achieved sales of [ 252,777 ] metric tonnes, contributing INR 444.8 crores in the revenue. Overall consolidated volume for FY '26 reached 25,000 metric tonnes, reflecting a growth of 2.5%. This performance also contributed to improved returns with return on equity rising to 12.2% and return on capital employed increasing to 15.3%, reflecting the company's disciplined approach to capital deployment and financial management. The company continued to maintain a strong financial position and by internal accruals and preferential allotment as of 31st March 2023. non-linked deposit amounting to INR 140.8 crores ensuring adequate liquidity to support ongoing and planned expansion initiative. The company leverage remains minimum with the net debt to equity ratio of minus 0.1x and net debt-EBITDA ratio of minus 0.05x, reflecting financial management and conservative capital structure. In conclusion, the company continues to maintain a disciplined financial position by internal accruals and prudent capital management. With the strong liquidity and minimum leverage, the company is well positioned to support ongoing and planned CapEx expansion initiatives, coupled with sustained profitability and return ratio. This positions the company to effectively pursue the strategic growth and deliver long-term value to the stock shareholders. With that, I will now open the floor for questions.

[Operator Instructions] Your first question is fom the line of [indiscernible]

Sir, my first question is regarding the CapEx. I understand that we have some INR 320-odd crores of CapEx that we will incur and mostly it will be from internal accruals only and we are not going to take any major debt. So sir, can you please explain the math behind it, how exactly are we going to fund it?

See, Harshit, if I take you a bit before, we completed CapEx of INR 174 crores in the year of 2024. That CapEx was INR 175 crores. That CapEx was including the takeover of the Madhya Bharat from NCLT as well as building up a Unit 5. That CapEx was entirely funded by our internal sources. Second line of CapEx was of INR 155 crores and that entire CapEx of INR 155 crores is an additional facility of building up a dyes unit in Unit 5. That was around INR 37 crores, then building up a solar project of INR 35 crores and another CapEx of Unit 6 of around INR 110 crores or so. Deepak, since I'm away from you, I do not have the exact data in front of me. I would request you to please correct me if I spell out any wrong data. This kindly just intervene and correct me immediately.

Unit INR 85 crores.

Okay. Unit INR 85 crores. So this total CapEx is of around INR 155 crores. For this INR 155 crores Harshit, we have taken this term loan from HDFC for our solar unit of INR 25 crores. So the balance of INR 130 crores, we are doing from our internal accruals. Out of that, we have done a majority of the CapEx that is also mentioned into our PPT as well as in the balance sheet also in the financial results also. Though those figures are not right now in front of me because [indiscernible], this con call, I'm attending from my plant. Though my office, my CFO, my compliance office are sitting in the registered office, but I'm away from them at the plant. So please forgive me because I do not have the exact data in front of me, right? So accordingly, I requested Deepak to correct if I see anything wrong. Now thirdly, CapEx, what we are planning is of INR 350 crores. That is of an additional facility built up at Madhya Bharat Phosphorus Limited at Meghnagar site. That INR 350 crores of the CapEx, what we are planning initially that as of now, company holds around INR 140 crores of this initial investments into the AA bonds. And we believe that plus INR 30 crores of the preferential allotment to the promoter, this makes around INR 170 crores. Now the balance left out with us is around this INR 180 crores. We are proposing though we have not finalized either to use our 2 years revenue for this CapEx or either we go for some part term loan in order to keep some cash in the company. So that part, we have not yet decided. At the max, if we go for some term loan also, we will be going maybe 25% or 30% of the term loan of this CapEx side and balance will be funded by the company itself from its internal accruals. I hope this address your question.

Clearly. And my second question is regarding given that we were expecting a Unit 5 and 6 to come live in March, but there were obviously some delays regarding the electricity issues. So what kind of outlook do we have for FY '27 and '28 regarding top line and EBITDA?

Honestly, if I share with you that electricity issue has been resolved. That issue was resolved in the March March first week of 2026 or around second week of March 2026. Unfortunately, due to this ongoing situation in the world, there is an acute shortage and acute unstability in the pricing of the certain key raw materials like ammonia, like sulfur. You got my point. So because of these 2 major issues, we have a bit delayed our plant, though the plant is almost ready. If we wish, we can start the commencement of the trial production within less than a month. But still, there are certain hiccups into the raw material sourcing, the perfect pricing of the raw material sourcing, we are still exploring the situation, Harshit. We have not yet decided how and when we are going to start the trial production. We are expecting some kind of a resolution or maybe some global supply chain restoring and some decent pricing availability of the raw materials. To give you a short idea, the prices of the ammonia and sulfur, which are the key raw materials in this segment is almost 3x. To give you a proper more figures, ammonia used to be INR 40, INR 42 a kg. Now it is INR 100 plus. Sulfur used to be INR 30 a kg, now INR 100 a kg. So the whole raw material chemistry and the pricing structure has gone hey. So we are still holding and waiting and looking and deeply thinking when and how we should do. We haven't come to a closure on that. But to give you more clarity on the matter, we believe that this kharif season, we will not be performing as expected before during our con call of Q3. So at that time, we were expecting something else. But suddenly, on 28th of February, the day we saw that these issues are going up and suddenly the prices have gone hay. We are still exploring that how and when we can come into the commercial production as well as into the trial production. But to give you more clarity, practically, this Kharif season, we do not expect any revenues from our Unit 6 as well as new expansion of Unit 5. You will see in our financials, we have not done even a capitalization of Unit 6 and Unit 5 also. So we are still looking for a better opportunity and better right time to start. But for your thing, I think being we are losing this season of Kharif in FY '26, '27. As earlier, the visibility what was given by me was that, that somewhere we'll be able to touch a business of around INR 1,500 crores in the financial year 2026, '27. In my opinion, I think being we are losing the first season of the Kharif, we should be closing somewhere around INR 1,250 crores or maybe INR 1,300 crores or so. This is my visibility what I can see and what I can share with you at present.

We'll take the next question from the line of Prit Nagersheth from [indiscernible]

Fantastic performance given the huge uncertainty and Pushkar continues to manage the global uncertainty so well. So great, great management could you please explain a little bit on what's happening ammonia sulfur rates have gone up are you making -- are you producing less? Are your production units running low? How are you -- what are you doing on the ground to manage these things? If you can just explain to us?

Is going to be in particular concept that sometimes one wrong decision may keep you out of the business forever. To avoid any such kind of taking wrong decision looking [Foreign Language] there is going to be a tight supply into the fertilizer as well as into the raw materials [Foreign Language] we stopped our sales bottom line. We do understand. But sometimes we have to take a decision as per the prevailing conditions. So according to our best of our wisdom, we decided to go a bit slow.

Sir, what is the current utilization of your plant?

Sir, current utilization of the plant is in my opinion would be the similar range as it has been in the earlier quarters...

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We'll take the next question from the line of Saket Kapoor from Kapoor Company.

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[Foreign Language] In my opinion the I believe in my opinion, better than the price what I had projected mature, let the market be accepting these new prices, which are almost 3x of the raw material prices of our we are debt free, entire CapEx has been done by our internal accruals. We do not have any such financial pressure and any such financial commitments. So we can hold on to wheat. And I see that there is going to be a good opportunity which has gone to INR 10 a kg and earlier which was around INR is not going to be there. It is not going to remain at INR 100 also. Probably when the situation settles down, it may come down to around INR 70, INR 75 in this range. But accordingly, the finished product market be also matured to accept these kind of levels.

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[Foreign Language] I am expecting those volumes 65%, 70% utilization as we as starting Unit 5, Unit 6 somewhere by quarter 1 or maybe quarter 2. [Foreign Language] I'm not sure whether we will be able to start let's see how we get a visibility, let's see -- because it is very uncertain, sir, to comment anything on that.

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We'll take the next question from the line of Raghav [indiscernible] from [indiscernible]

So this quarter 4 press release that we had, we have said that our chemical volumes are up more than 30%, but our revenues are flat from last year quarter 4 to this year quarter 4. So can you explain that, sir?

Deepak, I'm not having the data in front of me. Can you address this question, please?

One second, sir.

Because that's why I'm attending this con call from my factory, not from the office. If I would have been in the office, then all the data would have been in front of us. Deepak would be able to answer this query. Any next question you have, in case if Deepak doesn't have the data in front of you, we will answer this question to you through our IR.

Sir, just a sense on margins for the next year because prices have not kept in line with the raw material prices.

Less than INR 100 crores PBT is around INR 85 that I still have that same attitude that making.

Even the prices will have to double kind of finished product prices with the kind of raw material, but even then...

[Foreign Language] because we are just in the beginning of this new financial year. But in my opinion, there should not be any major issue into that.

We'll take the next question from the line of [indiscernible] from [indiscernible] Capital.

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The next question is from the line of [indiscernible] from [indiscernible] Private Limited.

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I think I have already addressed the question in my earlier reply.

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It is difficult for me to predict for next 2 quarters. But in my opinion, making a margin of around 8% to 10% will not be a great fight for us, right? This is just a visibility I'm giving as per my wisdom. But the rest of the scenario will teach us better. But in my opinion, around 8 to 10 -- on the conservative side, making 8% margin should not be a great fight for us.

Okay. And even on the utilization side, sir, we have been constantly utilizing 65% to 70% we can maintain for next couple of quarters until this raw material resolves.

We really hope, sir, to maintain at least whatever we have been doing and performing in the past to at least maintain that much and try to do and achieve better than what we did in the past.

The next question is from the line of Murtaza from Pinpoint Capital.

Appreciate you attending the call from the plant and giving such a honest commentary. [Foreign Language]

[Foreign Language] there is a stable government in Bangladesh, we believe. But let me tell you, as of now, entire globe is fighting against the crisis of the energy. You got my point. And energy is now the most precious rather than even the gold is not like Bangladesh or India is the whole globe which is resulting into the suppression of demand. And this is also resulting into the decrease of the production as well as the consumption also. It is the whole circle of the economy we need to see we are just the beginning of this financial year. this is what I can reply as of now to the best of my wisdom. But still, we need to complete this remaining around 11 months of this financial year. So let's see how this settle down. And in my opinion, we should try not to go down from our existing capacity utilization, not to go down from our existing market share, not to go down from the kind of the profits we are making. And how do we go forward in the future, we need to figure it out.

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The next question is from the line of [indiscernible].

This is maybe for the CFO. Sir, what is the tax that we should consider in our calculation going ahead [Foreign Language]

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The next question is from the line of Varun Sharma from [indiscernible]

Congratulations for the good set of numbers for the year. [Foreign Language]

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Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over back to Mr. Pankaj Manjani for closing comments. Thank you, and over to you, sir.

Thank you, everyone, for joining FY '26 earnings call. If you have any further questions, please free to connect with our Investor Relations adviser, [indiscernible], and we will be happy to address your queries. Thank you.

Thank you very much.

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