Release Date: July 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mangalore Chemicals & Fertilizers Ltd (BOM:530011, Financial) posted a PBT of INR68 crores for Q1 FY25, showcasing strong financial performance.
- The company benefited from favorable monsoon conditions, which positively impacted agricultural activities and business growth.
- Operational performance remained robust with continuous operation of ammonia and urea plants, and phosphatic production based on market demand.
- The company maintained a leading market share in Karnataka for N20 primary sales and POS sales.
- Net worth increased by INR132 crores between June 2023 and June 2024, indicating strong financial health.
Negative Points
- Sales volume decreased by 9% in Q1 FY25 compared to Q1 FY24, primarily due to no imports for trading.
- Revenue for Q1 FY25 decreased by 15% year-on-year, attributed to the reduction in commodity prices and lack of imports for trading.
- EBITDA for Q1 FY25 decreased by 10% compared to Q1 FY24, mainly due to pressure on NPK fertilizer margins.
- PAT for Q1 FY25 was INR44 crores, a 10% reduction from INR49 crores in Q1 FY24.
- The company faced challenges with DAP sales due to high international prices and lower availability, resulting in loss-making DAP operations.
Q & A Highlights
Q: Can you provide a split between DAP and NPK volumes sold this quarter?
A: We sold a small leftover volume of 134 tons of DAP. The remaining volume sold was all NPK.
Q: Did the urea EBITDA per ton remain at INR6,500 this quarter?
A: Yes, the urea EBITDA per ton continued to be at INR6,500.
Q: Is DAP still loss-making?
A: Yes, DAP remains loss-making due to high prices and insufficient subsidy to cover costs.
Q: How has the volume growth been in the second quarter so far?
A: Urea production will be normal, similar to the previous year. NPK production may be slightly lower or almost the same. We are focusing on MOP imports due to decent contributions.
Q: What is the current gas cost for the urea plant?
A: The gas cost for the urea plant in the first quarter was about $15.47 per metric ton.
Q: Can you elaborate on the merger with Paradeep Phosphates Limited and its synergies?
A: The merger will create a nationwide market presence, better product mix, and improved raw material sourcing. We will also benefit from OCP's support and potential expansion in phosphoric acid capacity.
Q: How much subsidy has been received in Q1 FY25?
A: We received INR561 crores in Q1 FY25 and INR168 crores in June, totaling INR729 crores so far this financial year.
Q: What is your outlook on nano-urea and its impact on conventional urea?
A: Nano-urea is expected to replace imported urea, not conventional urea. The initial basal dose will still use conventional urea, while nano-urea will be used for top dressing.
Q: What is the current MRP for N20?
A: The current MRP for N20 is INR1,225 per bag.
Q: What are the expected benefits from the new Sulfuric Acid plant?
A: The new plant will produce 1,46,000 tons per annum, with 1,25,000 tons consumed internally and 20,000 tons sold. It will also generate 17 tons per hour of steam, reducing urea energy costs.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
