Summary of earnings call for Chambal Fertilisers & Chemicals Ltd published on 07 Aug, 2025
Chambal Fertilisers and Chemicals Limited
Q1 FY26
Call date · August 01, 2025
1 · Management Commentary
Key Positives
- Standalone revenue at Rs.5,698 crore; EBITDA Rs.929 crore; PAT Rs.638 crore (16% YoY growth).
- Consolidated PAT at Rs.549 crore, up 23% YoY.
- Strong P&K fertiliser sales at 4.21 lakh MT (up ~70% YoY).
- CPC-SN business revenue up 32% YoY to Rs.452 crore; contribution up by Rs.21 crore.
- 13 new CPC products launched; CPC portfolio now at 73 products.
- Biologicals revenue up 80% QoQ to Rs.29 crore.
- Seed business launched (maize and bajra), contributing Rs.6 crore revenue.
- Technical Ammonium Nitrate (TAN) project progressing on schedule; Rs.918 crore spent till June 2025.
- IMACID JV performing well; phosphoric acid capacity expansion underway.
Key Negatives
- Urea production down to 8.54 lakh MT (vs. 9.03 lakh MT YoY) due to Gadepan-II breakdown (24–25 days downtime in May).
- Urea sales down to 8.41 lakh MT (vs. 8.87 lakh MT YoY).
- Energy norm tightening by government, with negative impact already factored in.
- No clarity yet on post-2026 policy for Gadepan-III.
Forward Guidance
- Capex: TAN project total outlay Rs.1,645 crore; Rs.300–400 crore remaining; normal capex of Rs.250 crore for FY26.
- TAN trial production to start late Nov/early Dec 2025; commercial production by mid-Jan 2026.
- TAN plant to produce 55,000–56,000 tons in Q4 FY26 at Rs.35,000–40,000/ton.
- IMACID phosphoric acid expansion to 7 lakh tons by late 2026/early 2027; sulfuric acid plant to follow.
- Biological fungicide and nematicide launches planned for Kharif '25 and Rabi '25.
- Ongoing focus on alliances, new product launches, and expanding CPC and seed businesses.
- Exploring global expansion and complex fertiliser assets; discussions ongoing but no timeline.
- No major new greenfield urea projects planned; focus remains on efficiency and incremental growth in existing/new segments.
2 · Q&A Highlights
Q 1 (Composite): How will global fertiliser prices, currency volatility, and policy changes impact margins and volumes for urea and P&K fertilisers?
A (Management):
• Urea margins stable due to formula pricing; P&K margins depend on strategic sourcing and subsidy/MRP; company well-covered on stocks.
Q 2 (Composite): Details and outlook for CPC-SN, biologicals, and seed segments; go-to-market strategy and revenue targets?
A (Management):
• All segments contribute similarly to margins; digital and channel expansion ongoing; on track for Rs.1,500 crore CPC-SN revenue in FY26; seed business started via white-label alliances.
Q 3 (Composite): Updates on TAN project timeline, capex, expected production, and state incentives?
A (Management):
• Rs.918 crore spent; total project cost Rs.1,645 crore; trial production by Dec 2025, commercial by Jan 2026; state incentive ~2% of Rs.1,100 crore hard cost per year for 10 years.
Q 4 (Composite): Impact and details of energy norm changes for urea; effect on EBITDA and efficiency projects?
A (Management):
• Marginal tightening; negative impact already included in Q1; company continues efficiency projects to maintain gap vs. norms; low double-digit crore impact per quarter.
Q 5 (Composite): Plant-wise production, ammonia sales, and IMACID volumes?
A (Management):
• Gadepan-I: 2.9 lakh MT; Gadepan-II: 2.15 lakh MT; Gadepan-III: 3.5 lakh MT; ammonia sales: 23,000 MT; IMACID: 1.26 lakh MT (vs. 1.3 lakh MT YoY).
Q 6 (Composite): Channel inventory, industry demand, and outlook for fertiliser volumes?
A (Management):
• Company POS inventory: 1.6 lakh MT NPK, total 2.6 lakh MT; industry stocks low, strong demand expected in Q2/Q3.
Q 7 (Composite): Capex plans beyond TAN; future expansion and use of cash?
A (Management):
• Rs.250 crore normal capex for FY26; focus on organic/inorganic growth in seeds, specialty nutrients, and alliances; complex fertiliser asset discussions ongoing.
Q 8 (Composite): Gadepan-II downtime and impact; maintenance shutdowns?
A (Management):
• Gadepan-II down ~24–25 days in May; production loss ~55,000 MT, contribution loss Rs.16–17 crore; next annual turnaround in March 2026.
3 · Other Key Numbers
- Standalone revenue: Rs.5,698 crore
- Standalone EBITDA: Rs.929 crore
- Standalone PAT: Rs.638 crore
- Consolidated PAT: Rs.549 crore
- Urea production: 8.54 lakh MT; sales: 8.41 lakh MT
- P&K fertiliser sales: 4.21 lakh MT (vs. 2.41 lakh MT YoY)
- CPC-SN revenue: Rs.452 crore (vs. Rs.343 crore YoY); contribution: Rs.102 crore (up Rs.21 crore YoY)
- Biologicals revenue: Rs.29 crore (vs. Rs.16 crore QoQ)
- Seed business revenue: Rs.6 crore; contribution: Rs.2 crore
- Subsidy outstanding: Rs.1,326 crore (as of Q1FY26)
- TAN project capex spent: Rs.918 crore (out of Rs.1,645 crore)
- Net cash on balance sheet: Rs.1,600 crore (as of June 30, 2025)
- Gas price: $15.15/MMBtu (NCV basis)
- Gadepan-III urea sales: 3.4 lakh MT
- Ammonia sales: 23,000 MT
- IMACID production: 1.26 lakh MT (vs. 1.3 lakh MT YoY)
- TAN expected Q4 production: 55,000–56,000 MT at Rs.35,000–40,000/MT
- IMACID phosphoric acid expansion capex: $40–45 million; sulfuric acid plant: $120–130 million
- Normal capex (ex-TAN): Rs.250 crore for FY26
- Gadepan-II downtime: 24–25 days in May; production loss ~55,000 MT; contribution loss Rs.16–17 crore
- Channel POS inventory (NPK): 1.6 lakh MT; total: 2.6 lakh MT
- TAN state incentive: ~2% of Rs.1,100 crore per year for 10 years
- Over 700 farmer meetings, 420 demos, 27,000 soil samples analyzed in the quarter
- Over 73 CPC products in portfolio; 13 new CPC products launched in Q1
- IMACID phosphoric acid capacity to increase from 5 lakh to 7 lakh MT by late 2026/early 2027
All figures as stated in the call.
Note: This is an AI generated summary of the earnings call. There may be inaccuracies in the summary. Please refer to the original transcript before making investment decisions.