Gujarat State Fertilizers & Chemicals Limited — Q3 FY26

Gujarat State Fertilizers & Chemicls Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=ntRD9p1z1xs Published: 3 months ago

0:00 Ladies and gentlemen, good day and welcome to the Gujarat State Fertilizers and Chemicals Limited GSFC conference call for Q3 FI26 earnings. This call has 0:10 10 seconds been hosted by Anurag Services LLP on behalf of GSFC Limited. From the management we have Mr. SK Vajpai, senior VP finance and legal and CFO, Mr. Svma, 0:20 20 seconds executive director, agri business, HRS and IR and other senior members from the management. As a reminder, all participant lines will be in the listen only mode and there will be an 0:28 28 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on 0:36 36 seconds your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. SK Bachai, senior VP finance and legal and 0:43 43 seconds CFO GSFC Limited. Thank you and over to you sir. 0:48 48 seconds Yeah, good afternoon everyone. Thank you for joining us for quarter 3 to uh 2526 0:55 55 seconds earning call of Gujal State Fertilizers and Chemicals Limited. It's always great to connect with all of you and share the 1:02 1 minute, 2 seconds key updates that we have from the quarter. I hope that you had a chance to review the financial results media release and investor presentation 1:10 1 minute, 10 seconds available on the stock exchanges and also on our company website. 1:15 1 minute, 15 seconds If you see standalone financial performance, the company had delivered strong financial and operational performance in 1:23 1 minute, 23 seconds quarter 3 demonstrating robust growth across key metrics. On the production front, the company achieved the highest 1:29 1 minute, 29 seconds Q3 5.07 lakh metric ton and in 9 months 13.30 lakh metric ton volumes in the 1:37 1 minute, 37 seconds last 5 years. Revenue growth we see sales increased by 139 cr representing 1:44 1 minute, 44 seconds 5% year-on-year growth. Profit before tax rose by 27 cr a healthy 18% increase. Profit after tax grew by 38 1:52 1 minute, 52 seconds crores marking an impressive 32% improvement. 1:58 1 minute, 58 seconds Operating profitability improved from 540% to 6.11% reflecting enhanced operational efficiency. 2:06 2 minutes, 6 seconds Fertlia segment revenue increased from 2,172 cr to rupees 2,298 2:13 2 minutes, 13 seconds cr in quarter 3 on May basis. Our sales volume remaining stable at 6.27 27 lakh 2:21 2 minutes, 21 seconds m segment AIC moderated to rupees 119 cr from rupees 126 cr due to sharp 2:30 2 minutes, 30 seconds escalation in k rail like tasphoric acid up by 34% sulfur up by 140% and sulfuric acid up by 91%. 2:40 2 minutes, 40 seconds Which offset the benefit of highization in of fatic and potass potastic fertilizers. The quarter recorded the 2:49 2 minutes, 49 seconds highest APS production and sales in the last 5 years resulting in a net revenue increase that largely compensated for the decline in DAP sales. 2:58 2 minutes, 58 seconds Industrial product segment delivered a resilient performance in quarter 3 on a buyby basis with sales rising from 583 3:05 3 minutes, 5 seconds cr to 596 cr and aid turning around to a profit of rupees 9 cr reflecting improved operational balance. 3:15 3 minutes, 15 seconds Growth B supported by a strategic focus on higher melamine exports where realizations were stronger than in domestic markets along with higher 3:24 3 minutes, 24 seconds traded ammonia sales. These measures overcame the headwinds in other major industrial products while the capital 3:31 3 minutes, 31 seconds benion spread declined to US dollar 495 per meter ton from US dollar 588 3:39 3 minutes, 39 seconds per meter ton diversification and product portfolio management supported profitability. 3:45 3 minutes, 45 seconds Overall the company maintained a healthy performance in quarter 3 demonstrating resilience against raw meter volatility and sustaining growth momentum across 3:53 3 minutes, 53 seconds both business segments. We continue to maintain a strong balance sheet with no long-term debt, healthy net worth and adequate liquidity. Government of 4:02 4 minutes, 2 seconds India's outstanding support on release of fertilizer subsidy has kept the working capital levels at optimum level. 4:09 4 minutes, 9 seconds As of date, the company has received subsidiary use for uraned PNK fertilizer up to fourth week of December 25 and 4:17 4 minutes, 17 seconds manufactured phosphoric phosphate fertilizers up to 1st week of January 26. 4:24 4 minutes, 24 seconds This provides the foundation for advance advancing our capex road map as detailed in the investor presentation. The sulfuric acid 5 project was commissioned 4:32 4 minutes, 32 seconds on 7th January 2026 providing both incremental capacity and cost efficiency benefits. The project will cater the 4:42 4 minutes, 42 seconds requirement of sulfuric acid for manufacturing of fertilizers like ammonium sulfate and ammonium phosphate sulfate. Further the steam generated 4:50 4 minutes, 50 seconds therefore shall be available for utilization at the Balra complex. 4:55 4 minutes, 55 seconds Favorable season conditions and healthy raising position the country for a strong harvest with fertilizers requirement for the season largely 5:03 5 minutes, 3 seconds addressed. Consequently only limited incremental demand from the salt duration hot weather crop is expected. 5:11 5 minutes, 11 seconds While the industry may experience cost pressures from the elevated prices of key inputs such as phosphoric acid and sulfur, the company remains focused on 5:19 5 minutes, 19 seconds disciplined margin management. Strategic priorities including optimizing market opportunities and ensuring calibrated 5:26 5 minutes, 26 seconds inventory positioning to effectively service demand for the upcoming khif season thereby supporting volume stability and supply readiness. The 5:35 5 minutes, 35 seconds government of India's ongoing trade facilitation measures including recently executed FTA and CP Cas with key nomies 5:44 5 minutes, 44 seconds are expected to improve market access and competitiveness for Indian chemical export subject to a product specific tariff outcomes. Capatum engine spread 5:54 5 minutes, 54 seconds are expected to improve in quarter 4 2526 providing a supportive margin environment. Product rationalization 6:02 6 minutes, 2 seconds in other Asen countries across the capital nylon 6 value chain aimed at preventing over supply and moderating 6:10 6 minutes, 10 seconds price competition has led to a firmer realization in quarter 3 2526 a trend that is expected to lead near-term stability to the market. 6:20 6 minutes, 20 seconds Marlamine demand is expected to remain steady in domestic markets with the growth anticipated in export markets. SF crystal volumes are expected to improve across both domestic and export markets. 6:31 6 minutes, 31 seconds Demand for other industrial products is also likely to hold stable during the quarter. Overall, the company anticipates consistent demand conditions 6:39 6 minutes, 39 seconds and stable turnover in the industrial product segment at quarter 4 2526. 6:45 6 minutes, 45 seconds I now turn over the call for question and answers. 6:49 6 minutes, 49 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove 6:57 6 minutes, 57 seconds yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question assembles. 7:15 7 minutes, 15 seconds The first question is from the line of Nav Jimodia from Anvil Wealth. Please go ahead. 7:20 7 minutes, 20 seconds Yes sir. Good afternoon. Uh sir I have three questions to ask. Uh sir first is on u the guidance for uh the sales 7:29 7 minutes, 29 seconds volume if you can share for uh quarter 4 and for FY26. 7:41 7 minutes, 41 seconds sales volume in uh rupita. 7:44 7 minutes, 44 seconds No, no guidance of absolute sales volume for Q4 of FI26 like any guidance which you would like to share as compared to 7:53 7 minutes, 53 seconds what we have achieved in uh quarter third. 7:57 7 minutes, 57 seconds Actually quarter 4 is the lean season for the fertilizer industry. 8:02 8 minutes, 2 seconds Yes. So there is not uh that much uh sale and margin available in quarter 4. 8:08 8 minutes, 8 seconds As you can see from the history of the company also during last two years the quarter four is not that uh great as compared to the other quarters of the uh 8:17 8 minutes, 17 seconds financial year. Uh having said that I have uh told that uh we have placed our 8:26 8 minutes, 26 seconds DAP, URLA and other uh fertilizers in the market and as per the requirement uh it will be uh provided to the farmers. 8:37 8 minutes, 37 seconds Perfect. Uh sir like if we see our manufacturing volumes we are near to almost 1.5 1.6 million tons. I'm talking 8:45 8 minutes, 45 seconds from the manufacturing point of view. So you rightly explained this time that there were cost escalations on the 8:52 8 minutes, 52 seconds phosphoric acid sulfuric acid also on the sulfur part for sulfuric acid uh uh production. So if you just want to share 9:01 9 minutes, 1 second your views like uh if we just want to divide our volumes between let's say the manufacturing volumes and the trading 9:09 9 minutes, 9 seconds volumes what we do uh what sort of IITA per metric turn which we would be generating on the manufacturing side 9:21 9 minutes, 21 seconds AIA overall we are generating uh 5 to 6% uh from the can share on the per metric 9:30 9 minutes, 30 seconds ton basis that would be very helpful because then uh the prices also keeps on changing based on the subsidy and everything. So if you can uh 9:39 9 minutes, 39 seconds that is but aita product wise like fertilizer if you see the fertilizer then ura dap np gigs or APS ammonium 9:46 9 minutes, 46 seconds sulfate everywhere there is a different avita it is not a combined uh figure available to me but if you see overall 9:54 9 minutes, 54 seconds that I can say five to 6% avita is there in the fertilizer segment correct and uh in terms of because you 10:03 10 minutes, 3 seconds rightly explain that Q4 generally is a lean season and uh we tend to provide some sort of discounts also to uh pro 10:12 10 minutes, 12 seconds place our products in the market. But let's say going forward from next year onwards with this kind of uh cost 10:19 10 minutes, 19 seconds escalations which we have seen on the raw material side uh how we are going to deal with this situation in terms of uh 10:28 10 minutes, 28 seconds uh a improvement in the margins and second in terms of uh improvement in our manufacturing volumes. 10:37 10 minutes, 37 seconds uh there are two uh two two raw materials or key inputs uh that has shown the abnormal increase in prices. 10:46 10 minutes, 46 seconds One is the sulfuric acid and sulfur prices and another is phosphoric acid. 10:51 10 minutes, 51 seconds Ammonia is also trending very high at around $525 or $530 per metric ton presently. 10:59 10 minutes, 59 seconds But for sulfuric acid uh we have made always in the long-term contact with the 11:04 11 minutes, 4 seconds suppliers. So we can um fix the uh total purchase price by kept keeping a u 11:14 11 minutes, 14 seconds uh uh like purchase price fixing in the inception of the financial year. uh over and above we have also capitalized 11:22 11 minutes, 22 seconds sulfuric acid 5 plant at fertilizer complex which is producing near about uh two lakh micton per nanom sulfuric acid 11:32 11 minutes, 32 seconds and it is running very uh nicely and production is also good. So whatever the requirement of sulfuric acid will be met 11:40 11 minutes, 40 seconds from the our own production. So that is very cost effective and in comparison to the purchase price and the market 11:47 11 minutes, 47 seconds volatility we can cater maximum uh sulfuric acid requirement from our own production and fertilizer complex. As 11:56 11 minutes, 56 seconds far as phosphoric acid is concerned the prices are very high but let us see how it uh comes in the next quarter and the 12:05 12 minutes, 5 seconds government subsided fixation based on the phosphoric ammonia pricing in the next quarter. So based on that our 12:12 12 minutes, 12 seconds margins will be uh calculated and margins will be uh there in the business. 12:19 12 minutes, 19 seconds Correct. Uh so second question is on the chemical side. You mentioned that uh caproenzin spreads have been improving 12:26 12 minutes, 26 seconds uh and that could help us to a improve our volumes b improve our profitability. 12:34 12 minutes, 34 seconds So if let's say the spreads what we have achieved in third quarter was close to around $500. So let's say uh at what 12:43 12 minutes, 43 seconds level of spreads uh uh our caprolum business should start seeing an improvement in the profitability whereby 12:51 12 minutes, 51 seconds let's say it should start uh covering our fixed and the variable cost. 12:58 12 minutes, 58 seconds Uh actually uh now it is ranging about $590 per meter the spread between capital and Benjene uh in the January. 13:09 13 minutes, 9 seconds So it has improved drastically and it covers the variable cost. Uh how why we 13:18 13 minutes, 18 seconds are operating the capital atom because we are getting the byproduct ammonium sulfate and which is as a 13:27 13 minutes, 27 seconds fertilizer and it is a profitable product for us as a in fertilizer segment. So even if there is a little negative contribution in the capital 13:35 13 minutes, 35 seconds atom we do not set the operation because it cuts the production of the ammonium sulfate also. So that is the logic we 13:44 13 minutes, 44 seconds continue but by increasing this capo engine spread to a comfortable level now I don't foresee that there is a negative contribution in the capital business. 13:54 13 minutes, 54 seconds Correct. But at $500 there was a negative contribution. So is it safe to Yeah. So is it safe to assume sir that 14:02 14 minutes, 2 seconds uh at $500 possibly we would be losing close to around $100 at the contribution level from the capital? No no no no that 14:12 14 minutes, 12 seconds not not that much a little uh I cannot say what is the uh negative contribution but it is not much it is a slight 14:19 14 minutes, 19 seconds negative contribution in the capital actum uh and we are also saving the cost by importing unknown because unown cost 14:27 14 minutes, 27 seconds is uh our own manufacturer unknown is uh higher so we are importing unknown and by cost cutting and we are cutting the 14:35 14 minutes, 35 seconds contribution uh negative contribution also in the capital Yes, got it sir. Also sir, we have seen uh 14:42 14 minutes, 42 seconds slightly a fall in the uh industrial products margin this quarter. So was it because of uh lesser ammonia trading 14:50 14 minutes, 50 seconds which uh in the earlier quarters were a significant contributor to our profitability? 14:57 14 minutes, 57 seconds Yeah, that's up to one u stage. It is correct because the ammonia prices are again high and our domestic requirement 15:05 15 minutes, 5 seconds of ammonia is there but at that level of ammonia the few small players cannot afford to purchase the ammonia and uh um 15:14 15 minutes, 14 seconds use that costly ammonia for their product. So there is a little uh less demand in the quarter three. Uh but uh 15:23 15 minutes, 23 seconds with uh some reduction in the margin I we also prefer to sell because there was a positive contribution and ammonia uh 15:31 15 minutes, 31 seconds trading is helpful for getting the IP uh uh IP segment in a profitable uh segment. 15:38 15 minutes, 38 seconds Correct. So let's say sir in quarter four uh how do we see the industrial products? one you mentioned about the 15:46 15 minutes, 46 seconds caprolum part but uh is there any further scope of improvement in the profitability from the industrial 15:53 15 minutes, 53 seconds product side from other products and also how do you see Q4 shaping up in terms of uh the ammonia part 16:03 16 minutes, 3 seconds yeah ammonia prices are now stable and we are going for long-term ammonia 16:09 16 minutes, 9 seconds contact with the buyers so that will uh that will firm up our uh delta on the 16:17 16 minutes, 17 seconds ammonia business and also the requirement uh from the other from the suppliers whatever ammonia they want to 16:24 16 minutes, 24 seconds purchase for the whole year. Uh second thing is this FDA agreement signed by the executed by the government of India 16:32 16 minutes, 32 seconds with European Union and now the tariff consists in America. So that will boost our melamine export uh not only melamine 16:42 16 minutes, 42 seconds but also capacum and hx crystal uh products for the export purposes and the export realization is better than the 16:50 16 minutes, 50 seconds domestic uh market. So that is another area we are hoping for a uh better margin uh in the IP segment. Third one 16:58 16 minutes, 58 seconds we have also taken up with the government of India because in domestic market realization is not that great. So 17:06 17 minutes, 6 seconds for and we are only the producer of melamine capitalum and HF crystal in India. So we have we have requested to 17:13 17 minutes, 13 seconds government of India that for protection of our industry and the aba concept of government of India there should be some 17:21 17 minutes, 21 seconds protection available otherwise we are uh manufacturing and exporting the product and on other side we are the other 17:29 17 minutes, 29 seconds countries are dumping into India. So some minimum support price or some basic duty structure we have requested 17:36 17 minutes, 36 seconds government of India to form in case of melamine capital actum and nylon 6. So that would if something comes out 17:43 17 minutes, 43 seconds positively by the government of India then it will further boost up of the IP segment also. 17:49 17 minutes, 49 seconds Right. So this is safe to assume here that our MMA and CPRO and HX plant is operating close to 100%. So whatever 17:57 17 minutes, 57 seconds would be going for the exports would be a lesser volumes in the domestic market. Is a correct assumption to make? Yeah. Yeah. That's correct. 18:05 18 minutes, 5 seconds Correct. Uh sir last two questions from my side. So one uh sir based on our uh fertilizer production of let's say close 18:13 18 minutes, 13 seconds to around 1.5 million tons on an annual basis uh put together from both the 18:20 18 minutes, 20 seconds complexes how much ammonia and sulfuric acid would be required on an annual basis 18:27 18 minutes, 27 seconds bar give this answer to u just a minute uh uh for ammonia both 18:34 18 minutes, 34 seconds the units you are looking after Yeah, just a minute. Give me a second, please. 19:00 19 minutes Yeah. See the requirement both the units should be around five. It varies between 5.5 to 6 lakhs tons per considering the uh capity operations for 16 to 18 lakhs. 19:14 19 minutes, 14 seconds Correct. Ammonia and uh in case of sulfuric acids it is slightly uh in the same range only. Yeah. Yeah. 19:25 19 minutes, 25 seconds Same range. Six lakhs right. Yeah. 19:30 19 minutes, 30 seconds The last question from my side like anything we are hearing from the government in terms of uh uh revision in 19:36 19 minutes, 36 seconds the uh fixed cost of for the URA business also on the revision in the energy consumption norms anything if you 19:44 19 minutes, 44 seconds can share your thoughts because I think some of the meetings have happened so if you can share your thoughts here would be very helpful. 19:52 19 minutes, 52 seconds Now fish code data as required by the government of India we have already submitted along with the other fertilizer producers. So now it is the 19:59 19 minutes, 59 seconds government of India's term to come out with the final fixation of fixed cost because till now this cost fixed by the government is very old and it is not 20:07 20 minutes, 7 seconds sustainable. Any increase in the fertilizer fixed cost or ura fixed cost will further um further helpful for the 20:15 20 minutes, 15 seconds ura producers in fertilizer sector. Uh what was the second one your question revision in the energy consumption 20:24 20 minutes, 24 seconds norms? energy consumption. Actually we have already revamped our URA 2 plant. 20:30 20 minutes, 30 seconds So we are meeting with the URA 2 energy now faced by the government of India and as per the minutes and best information 20:38 20 minutes, 38 seconds available to me they are continuing uh the reimbursement of subsidi uh for further 3 years on the same uh energy 20:46 20 minutes, 46 seconds consumption. So that will be the additional benefit available to the GSFC because presently it is coming around 5.9 to6 GL meter ton of production of UDIA. 20:59 20 minutes, 59 seconds Perfect. Thank you so much sir and wish you all the best. Thank you. Thank you. Thank you. 21:07 21 minutes, 7 seconds Before we take the next question, we would like to remind participants that you may press char1 to ask a question. 21:12 21 minutes, 12 seconds The next question is from the line of sake Kapoor from Kapoor and Co. Please go ahead. Namaskar sir. Uh 21:19 21 minutes, 19 seconds namaskar. Namaskar sir. Uh majority of everything has been covered by our learned uh participant. 21:28 21 minutes, 28 seconds Thank you to him for uh very caliberately asking all the questions. 21:32 21 minutes, 32 seconds Uh sir only uh one point about uh the the sulfuric acid plant which was commissioned in the 21:40 21 minutes, 40 seconds month of January. uh what would be the uh benefit uh that we will be attributing to for this quarter in terms 21:48 21 minutes, 48 seconds of the uh backward integration that that's that will be for our utilization captive use. 21:57 21 minutes, 57 seconds Yeah. uh sulfuric acid fire project is commissioned in uh January uh somewhere in the first week of January 26 and it 22:07 22 minutes, 7 seconds is operating nicely and the benefit will be available for the next two months in the coming quarter and the again for the 22:14 22 minutes, 14 seconds whole year next year. uh if you see that production capacity is 2 lakh metric ton perom for the sulfuric acid plant and uh 22:23 22 minutes, 23 seconds as you know the present sulfuric acid price is more than 17,000 rupees per metric ton in the Indian market and more 22:30 22 minutes, 30 seconds than $500 per metric ton of silver cost in the international market. So till the 22:38 22 minutes, 38 seconds time this Asian countries have uh banned the export of the sulfuric acid that's 22:45 22 minutes, 45 seconds why the prices are high and uh this is a very good uh thing for GSFC that we have commissioned this uh plant at very 22:53 22 minutes, 53 seconds appropriate time. So we will be having this uh our own manufactured sulfuric acid available for the production of ammonium sulfate and ammonium phosphate. 23:05 23 minutes, 5 seconds So that that impact will be not that big as in the uh the pricing increase in the 23:12 23 minutes, 12 seconds pricing of sulfuric acid in the uh Indian market. So we will curtail certain certain certain portion of the 23:21 23 minutes, 21 seconds cost increase uh from by replacing our own manufactured uh sulfuric acid. 23:28 23 minutes, 28 seconds So that will not be meaningful. That is what you are trying to allude to. Sorry. 23:35 23 minutes, 35 seconds that will not be a meaningful value sir on an annual basis the savings that will be accured due to 23:42 23 minutes, 42 seconds apart from this this steam is also available from uh the sulfuric acid plant no so that steam is also uh useful 23:51 23 minutes, 51 seconds for other operation of other plants and our steam uh production from the bers will be stopped so natural gas consumption will come down so if you 24:00 24 minutes want to monetize is I think it is near about 100 kores per anom advantage available by uh commissioning of this project. 24:12 24 minutes, 12 seconds Right. 24:14 24 minutes, 14 seconds So we were also contemplating some uh said some debut making and some changes in our uh lines fertilizer lines wherein 24:23 24 minutes, 23 seconds we would be able to manufacture I think so ammonium circuit from the lines which were not being not been uh attributed to 24:31 24 minutes, 31 seconds that there was some things we were working on. Where are we sir in terms of that uh tinkering uh with the production lines uh that was anticipated? 24:42 24 minutes, 42 seconds Yeah, there is one line uh I think you are talking about this sika where the DAP bunch and we were producing and we are converting it for the funible 24:50 24 minutes, 50 seconds production for ASP and DAP whatever is requirement of the market. So that product is as per the schedule and we 24:58 24 minutes, 58 seconds will be completing this by the end of September this year. So that facility is available then we will be producing the 25:05 25 minutes, 5 seconds ammonium phosphate sulfate in the line of DAP whenever the requirement of APS is there in the market 25:15 25 minutes, 15 seconds right sir uh I have not pardon me there I have not checked but labor code impact in terms of uh the employee cost have 25:24 25 minutes, 24 seconds you faced in into our numbers or that there will be any revision because of Right. 25:32 25 minutes, 32 seconds You're talking about new level code. Yes. The new level code. 25:36 25 minutes, 36 seconds Yeah. Yeah. As for the information or notification available with us. So whatever we could get it clearly, we 25:44 25 minutes, 44 seconds have provided liability provisions in our books of account in quarter 3 for the fixedterm employment employees. Our 25:52 25 minutes, 52 seconds most of the provisions we are already doing as a very government promoted company. We are meeting all the requirements as per new labor code. 26:00 26 minutes However, rules are still pending to be notified as soon as it comes. So rest of the things we will see and make the provisions there is no problem. But 26:08 26 minutes, 8 seconds there is no huge impact as far as our this GSC is concerned because we are already meeting uh most of the provisions. 26:18 26 minutes, 18 seconds So what I could gather from the previous participants questions and your answer that for IP the the environment is now 26:25 26 minutes, 25 seconds conducive and the profitability barring the market conditions are expected to improve for the ensuing quarter. This is 26:33 26 minutes, 33 seconds what the underlining uh factors whether it is the capital uh benzene spread or 26:40 26 minutes, 40 seconds the higher prices for melamine. Uh is that understanding uh correct there sir? 26:46 26 minutes, 46 seconds Yeah. Yeah. Very much because by putting little efforts in the export of melamine, we have turned out to be positive uh margins in the coming 26:55 26 minutes, 55 seconds quarter and in the next quarter and henceforth since the capital engine spread is improving and the acts signed 27:04 27 minutes, 4 seconds by the government of India with the European market and tariff consessions in US. We are again looking for this 27:12 27 minutes, 12 seconds export of melanamine and capital lectum and third one is SX crystal to this market where the realization is better than the domestic market. 27:22 27 minutes, 22 seconds Okay. And so lastly I think so FX crystals were I think so were were uh we were selling this product because of the lower uh uh prices for caprolent. 27:34 27 minutes, 34 seconds Correct me there. So currently how does the metrics work with with the improvement in the spread? How how do 27:41 27 minutes, 41 seconds how are we placed in uh in terms of uh this HX crystal product because here also you have mentioned that volumes are expected to improve. 27:52 27 minutes, 52 seconds If you could just explain the value chain. 27:56 27 minutes, 56 seconds Yeah, the SS crystal product is our own uh R&D created uh product and it is well accepted by the market but uh we have 28:05 28 minutes, 5 seconds the 100% capacity of the Indian market because we are only the producer. So sometimes if the import is cheaper than 28:13 28 minutes, 13 seconds our um realization price then we we may look for the export of the HS crystal. 28:20 28 minutes, 20 seconds So that is my sense that in export market the realization is better than domestic market. So that will provide an 28:27 28 minutes, 27 seconds extra advantage for the new product and as far as capoctum is concerned it is uh the capolctum and the engine has reached 28:36 28 minutes, 36 seconds to a comfortable level where the contribution is positive. So that will again boost the IP segment resulting quarter for. 28:44 28 minutes, 44 seconds Okay. Just just a small clarification then where does FX crystal fall into place in the value chain that we were 28:51 28 minutes, 51 seconds selling HS crystal uh since the realizations were higher instead of selling capo or correct me there how the the methods work here. 29:02 29 minutes, 2 seconds No HS crystal the contribution is better margins are better than the capacum. So we are trying to run the HS crystal at 29:11 29 minutes, 11 seconds the full label uh rather than the capleum because uh when the capum price is not good that's why we have developed 29:18 29 minutes, 18 seconds this HF crystal and we are diling one of the intermediate product SAS to the HF crystal and where the margins are better 29:26 29 minutes, 26 seconds than the uh caprolactum. So we always prefer to uh use the full capacity of asset crystal and gain uh better margins 29:35 29 minutes, 35 seconds rather than uh selling the capital at time at lower price. 29:41 29 minutes, 41 seconds Thank you for for all in case any clarification I'll come back as I said thank you to the team and all the best. 29:52 29 minutes, 52 seconds Thank you. Participants who wish to ask questions may press star and one at this time. The next question is from the line of Madhurati from Counterycling Investments. Please go ahead. 30:02 30 minutes, 2 seconds Sir, thank you for the opportunity. So, I wanted to understand regarding our sulfuric acid uh the one that we have commissioned and the one that is 30:09 30 minutes, 9 seconds expected in FI28. So, so it seems that there is going to be a lot of sulfuric acid availability in Gujarat due to uh 30:17 30 minutes, 17 seconds Kaj copper commissioning. So do we see that the uh payback period for these capex decreasing once uh the production 30:26 30 minutes, 26 seconds commercializes or sulfuric acid availability increases? 30:32 30 minutes, 32 seconds The market availability and supply factor is not a fixed. It is it keeps changing but uh uh our sulfuric acid 30:41 30 minutes, 41 seconds plant is commissioned for meeting the own requirement of sulfuric acid in ammonium sulfate and ammonium phosphate sulfate. So we are not going to sell in 30:49 30 minutes, 49 seconds the market whatever the price sulfur is available at uh for the GSC we produce sulfuric acid and consume it in the 30:57 30 minutes, 57 seconds fertilizer production. So there will not be very many negative impact whatever the price of sulfuric acid may be in the future. 31:06 31 minutes, 6 seconds uh uh uh sulfuric acid is uh pay as far as payback is concerned that if uh uh 31:13 31 minutes, 13 seconds 100 cr is uh uh really the uh margin available in the first year so we will be uh payback in 2 three years so there 31:21 31 minutes, 21 seconds will not be any risk available for the company for the payback of the sulfuric acid right so so we don't see any scenario 31:30 31 minutes, 30 seconds where due to productions and increasing that cut copper are the next suric I said uh capacity of 200 uh two lakh 31:39 31 minutes, 39 seconds metric then that will be commissioning uh sorry six lakh metric then that will be commissioning uh for that payback 31:45 31 minutes, 45 seconds period to uh uh uh increase further 31:53 31 minutes, 53 seconds no um I don't think so because uh um in up to the I do not know when this 32:00 32 minutes chemical facility will be shaping up and coming the the the sulfuric acid is uh uh coming in the market but as far as we 32:09 32 minutes, 9 seconds are concerned and looking to the present pricing of the sulfuric acid we will be recovering our cost in 2 three years. 32:16 32 minutes, 16 seconds Got it. And sir we mentioned that currently sulfur cost is 500 per metric t and sulfuric acid is 17,000 rupees per 32:24 32 minutes, 24 seconds metric ton. Do we see this prices to remain steady for the next one or two years or where do we see the 32:32 32 minutes, 32 seconds realizations for these both of these raw material as well as the finished product? 32:38 32 minutes, 38 seconds It is very difficult to comment upon because as you rightly said demand and supply position fixes the prices. If there some new supply suppliers are 32:47 32 minutes, 47 seconds coming in the market or the other Asian countries like China and Russia start exporting the sulfuric acid 32:57 32 minutes, 57 seconds the sulfur then the prices of this sulfur and sulfuric acid will come down drastically in the near future. 33:04 33 minutes, 4 seconds Okay sir. So why sir pardon my ignorance but why has the prices risen so much? 33:13 33 minutes, 13 seconds because the other countries have start stop supplying in the international market. So there is supply demand gap. 33:22 33 minutes, 22 seconds So whatever sulfuric acid is required for the fertilizer as well as for other industries, it is not supplied by the 33:30 33 minutes, 30 seconds other foreign markets like China, Russia, they have stopped supplying the sulfuric acid. I think in my opinion 33:37 33 minutes, 37 seconds this is one of the reason of this high prices of sulfur and sulfuric acid. 33:43 33 minutes, 43 seconds Okay sir, sir. Thank you so much and all the best. Thank you. 33:48 33 minutes, 48 seconds Thank you. Participants who wish to ask questions may press star and one at this time. 34:00 34 minutes The next question is from the line of Nav Jamia from Anvil Wealth. Please go ahead. 34:06 34 minutes, 6 seconds Yes sir. Thanks for the opportunity again. Uh sir just a clarification on um the ammonia and the sulfuric acid part. 34:13 34 minutes, 13 seconds So uh you mentioned that we require close to around 5 and a half to six lakh tons of ammonia. So how much of this 34:21 34 minutes, 21 seconds would be matched to our uh own production and how much we are importing? 34:26 34 minutes, 26 seconds Uh around 4.2 to 4.5 we are uh meeting from our production rest we are importing. 34:33 34 minutes, 33 seconds Correct. And sir, after this expansion of uh 1 lakh 98,000 tons of sulfuric 34:39 34 minutes, 39 seconds acid, how much uh is our uh capacity now for sulfuric acid? 34:45 34 minutes, 45 seconds Uh sulfuric acid capacity will go to around yeah near to the 100% cap require 34:53 34 minutes, 53 seconds requirement of BA unit and slightly we'll be requiring it at Sika around 1.6 35:00 35 minutes uh six to two lakhs based on the requirement of based on the product mixture. 35:06 35 minutes, 6 seconds Correct. So uh let's say for sulfuric acid possibly also we'll be producing the similar amount of 4.5 lakh tons and 35:16 35 minutes, 16 seconds 1.5 lakh tons we are buying from the outside market right cor right correct uh so second question is on um 35:23 35 minutes, 23 seconds the ura part you mentioned that u we have revamped and our energy consumption uh in gal per metric t have come down 35:32 35 minutes, 32 seconds what let's say from earlier 6.4 4 6.5 to now 5.5 5.9 to around six. So how does 35:39 35 minutes, 39 seconds it help us in terms of the profitability and also is this capex what we have 35:45 35 minutes, 45 seconds incurred for uh revapping our URA uh part uh are we getting some fixed uh 35:54 35 minutes, 54 seconds compensation from the government like earlier they used to give us in a period of four five years. So uh if you can help us both these aspects uh that would be very helpful. 36:06 36 minutes, 6 seconds No UI plant was very old plant of 1969. 36:10 36 minutes, 10 seconds So anyway we have to revamp this plant because of the old technology and the very poor condition of the plant. So we 36:19 36 minutes, 19 seconds had to incur this revamp facilities at URA 2. Uria plant we have already stopped because that machindi is not useful and it is of 1967. 36:30 36 minutes, 30 seconds Uh whatever the government of India uh has been uh giving some money to other 36:38 36 minutes, 38 seconds companies for this capeex in case of GSFC we are not getting anything by way of fixed cost. However, they have 36:45 36 minutes, 45 seconds exceeded our request of uh providing the subsidy at the old rate uh even after the consumption of uh uh energy at lower 36:54 36 minutes, 54 seconds rate. So that will benefit as a payback period of 5 years uh time uh for the 37:02 37 minutes, 2 seconds GSFC in of the capital expenditure of around 300 to 50 to 400 crores. 37:09 37 minutes, 9 seconds Got it. So every year we would be possibly saving around 80 80 crores from the ura with this and that is up to you to calculate but I 37:18 37 minutes, 18 seconds have told that around four to 5 years we will be recovering the cost. 37:22 37 minutes, 22 seconds Got it. Uh sir uh also on the industrial product side are we thinking of any 37:29 37 minutes, 29 seconds newer products or expansion into the existing products line because HX plant has been consistently operating at 37:36 37 minutes, 36 seconds around 100%. So are we thinking any expansion there or introduction of any newer products? Uh 37:45 37 minutes, 45 seconds in the IP segment we have appointed one BCG consultant Bushan consultancy group and they are uh in process of preparing 37:55 37 minutes, 55 seconds this 10 10 year growth strategy and road map for GSFC. So we have the already 38:01 38 minutes, 1 second acquired the land at the age. So uh any facilities further facilities of IP 38:08 38 minutes, 8 seconds products will be uh put in there. So here in fertilizer complex there is hardly any space available to put any 38:16 38 minutes, 16 seconds new facility. So now we are going to shift our production facilities at the h. So as for this uh report final report 38:25 38 minutes, 25 seconds of the VCG and getting approval from the B board we will execute this uh uh start of the putting new facilities in IP segment. 38:35 38 minutes, 35 seconds Okay. So is this expected in uh next 6 to 12 months this final report or it would take a slightly a longer term? 38:43 38 minutes, 43 seconds No no it will come in the next 6 to 12 months. I think the report will be there. And also sir this uh BCG what we 38:52 38 minutes, 52 seconds have hired is only for helping us in the growth part or uh would they also be helping us in terms of uh reduction in some of the operating cost? 39:02 39 minutes, 2 seconds Yeah. Yeah. In both the operational efficiency also they are advising us. So whenever there is a gap so we we are filling the gap and operational 39:11 39 minutes, 11 seconds efficiency will be achieved and uh this growth strategies also they are submitting their report. 39:19 39 minutes, 19 seconds Okay. Okay. So the the areas for improvement in the operational efficiencies have been identified or they are yet to be identified sir. 39:28 39 minutes, 28 seconds They have been identified. There are certain lowhanging fruits which we have already in the process of implementing. 39:34 39 minutes, 34 seconds However, there are certain midterm and long-term. So that will be executed uh as per the scheme and uh implementation 39:42 39 minutes, 42 seconds of a scheme in the near 6 to month uh to one year time. 39:47 39 minutes, 47 seconds Correct. There any quantification in terms of benefits if you can share is it possible to share in terms of any 39:54 39 minutes, 54 seconds quantitative benefits which could uh happen to us on a annual basis. Any any thoughts? 40:03 40 minutes, 3 seconds um at least 40 40 crores of operational efficiency they have identified certain 40:12 40 minutes, 12 seconds schemes and that will be achieved by the company in the near future. Got it. Got it. Thank you so much sir. 40:25 40 minutes, 25 seconds Thank you. 40:27 40 minutes, 27 seconds As there are no further questions from the participants, I now hand the conference over to Mr. SK Bajpai from GSFC Limited for closing comments. 40:35 40 minutes, 35 seconds Yeah, thank you participate for the very good questions and uh elaborative questions on the performance of the 40:42 40 minutes, 42 seconds company. Uh it is pleasure uh to talk to all of you and thanks again for participating in this conference call. 40:51 40 minutes, 51 seconds Thank you very much. Thank you on behalf of GSFC Limited. 40:57 40 minutes, 57 seconds That concludes this conference. Thank you for joining us. And you may now disconnect your lines.