Thank you, Shruthi. On behalf of Antique Stock Broking, I am pleased to host today's earning call of Coromandel International.

Today, we have Mr. Sankarasubramanian S., Managing Director and CEO, Mr.

Deepak Natarajan, CFO on the call. Without further ado, I would like to hand over the call to Mr.

Shankar for opening remarks, post which we will open the floor for Q&A. Thank you, and over to you, Mr.

Shankar.

Overview of business environment experienced during the quarter, and provide an update on Coromandel's operational performance. Thereafter, I will request Deepak to take you through the financial performance.

On the agriculture side, India witnessed 23% of deficit rainfall on the long-period average, with most of the regions reporting lower rainfall. This has moderated fertilizer offtake as well in the current month.

June was one of the driest months, and we have seen some recovery in the last few days, particularly in Gujarat and central regions, and this deficit has moderated to 17%. All-India reservoir levels stood at 34% of capacity versus 57% last year, and southern reservoirs have come down to 28% versus 65% last year.

On crop acreages, picture is slightly mixed, where there is a drop in pulses by 15%, oilseed by 6%, and cotton by 6%. Paddy acreages have come back to normal, aided by early monsoon in paddy belt.

With monsoon activity improving during July, sowing momentum has picked up, and we expect the acreages gap to narrow further over the coming weeks. Overall farmer sentiment remains relatively cautious, influenced by uncertainty around monsoon and variability in agri-commodity and input prices.

On the regulatory side, government was quite active with a lot of policy announcements during this quarter. The government has approved National Investment Policy for urea, which could potentially facilitate 9 to 10 million tons of additional domestic urea capacity over the next 8 years across seven proposed projects.

In parallel, the announcement of ₹37,500 crore coal and lignite gasification scheme is expected to support the development of domestic syngas-based feedstocks and progressively reduce India's dependence on imported ammonia and other energy inputs over the medium term. The government has also initiated the pilot implementation of National Fertilizer Sales Framework, introducing QR code-enabled traceability across fertilizer transactions by integrating farmer, land, and sales data.

If scaled effectively, this initiative can be very transformative for the sector, enabling a shift from conventional distribution system to more transparent, data-driven, and nutrient-stewardship-based farming systems. The quarter was characterized by challenging operating environment for the phosphatic sector.

Global prices of key raw materials, including phosphoric acid, ammonia, and sulfur, remained elevated, driven by continued geopolitical uncertainties and supply disruption. On the subsidy front, the government announced increase of about 10% in subsidy rates across nitrogen, phosphatic, and sulfur nutrients under the NBS regime, and this rate has been announced without factoring the Middle East crisis situation.

These rates do not fully compensate for the increase in global raw material costs which happened subsequent to Middle East crisis. The industry continues to engage closely with the Department of Fertilizers on the need for a review, and we remain hopeful of a positive outcome on this front.

Actually, this sort of subdued subsidy rates, especially for NP, NPK fertilizers, have impacted production and imports during the quarter, which were down by 21% and 38%, respectively. On the demand side, consumption remains stable, especially farmers picking up lower-MRP stocks in the first quarter, and the industry maintained the same volume of phosphatic fertilizer in the first quarter as compared to last year.

Globally, there has been some impact on shortage of raw materials and production cuts announced by major manufacturers due to Middle East conflict, and this has led to lower availability of key raw materials like sulfur, acid, and ammonia, resulting in surging prices. However, the fortunate point is that industry inventories remain comfortable despite lower production and imports.

In fact, urea and DAP stocks are reasonably comfortable, and NPK stocks are also comfortable at this point of time to see through this kharif season. It is very critical industry continues to sustain production and imports in the next 2 months to ensure that the carryover inventory into rabi is augmented for the smooth completion of rabi season as well.

On the crop protection sector, domestic market was very muted in the early part of the kharif season. Demand was impacted due to delay in crop sowings.

However, the export markets have shown improvement, although the market remained cautious and is waiting for price stabilization. There has been a shift in biological products globally as well as in India, and we continue to witness healthy growth driven by increased adoption of sustainable agriculture practices.

In this backdrop, very happy to note Coromandel has reported a very resilient performance. Especially fertilizer business delivered very strong numbers in spite of a lot of headwinds that prevailed during this quarter.

We have taken a conscious call to moderate production to 6.9 lakh tons compared to 8.4 lakh tons, roughly representing 72% of capacity utilization, as the business prioritized inventory optimization amid volatile raw material markets. Phos acid production also got moderated to 1.2 lakh tons, more or less in line with last year.

Ideally, this should have grown with the commissioning of new plant, but higher sulfur prices, we have optimized the usage of sulfur and operated sulfuric acid plants at moderate capacity to extend the availability of sulfur for a longer period. Elevated sulfur prices during this quarter, the company took a conscious call to moderate phos acid production and ensure that the prices of sulfur reaches reasonable levels, be competitive on sourcing, and also looked at various other options to secure sulfur both from domestic and global markets.

Fertilizer business margins are under pressure due to sudden spurt in key input raw materials like ammonia and sulfur, as these rates have not been factored in the subsidy rates announced by the government, as these rates are prior to the Middle East crisis. The government is seized of this issue, and we hope we get the updated NBS rates for the kharif season, and this should help to improve the viability for NP, NPK fertilizers.

As you are aware, phosphoric acid prices for Q2 has been settled at $1,700 as compared to $1,360 prevailed in Q1, reflecting a sharp increase in line with increase in international price of DAP and other raw material inputs. On the project front, Coromandel has commissioned sulfuric acid plant and phos acid plant, and operations have come and got stabilized, and sulfuric acid has achieved the rated capacity and also generated power as designed.

Phos acid operations are getting stabilized, and we are embarking on the new technology implemented here to ensure optimum utilization of rock. Commissioning of these plants been at a very opportune time, and this has ensured that we continue to produce and make fertilizers available to farmers when industry is facing shortage of key raw materials.

Happy to note that granulation project is progressing well, and as planned, we are on track for commissioning this in Q4 of this year. In terms of sales, these are all early part of the season, volumes have been moderated by 9% to 10 lakh tons as compared to corresponding period last year.

Despite this, the company has strengthened its market position, increasing the primary market share to 22% compared to 18% in the last year. Consumption being encouraging due to lower-MRP stocks in the channel, the point of sales increased by 13% to 7.9 lakh tons, resulting in market share improving to 16%.

SSP business continued its strong growth trajectory, with volumes increasing by 19%, and we have been focusing on differentiated products like Groshakti and Urea SSP, which constituted more than 50% of the total SSP sales, highlighting the success of company's strategy to drive premiumization and improve product mix. At our Senegal operations, the rock phosphate mining project produced over 1.1 lakh tons for this quarter, broadly in line with our plan.

Building on the strength of this backward integration, the company is evaluating establishment of SSP facility at Senegal to cater to international markets and unlock additional value from its phosphate resources. Specialty Nutrients and Organic business delivered a very strong performance in Q1, aided by higher offtake in organics and micronutrient segments.

We are seeing increasing adoption of these products by farmers, particularly given their ability to improve soil health and help crops withstand stress condition in an increasingly volatile climate. The business strengthened its innovation pipeline with the launch of three new products across water-soluble and sulfur-nutrition segments.

As highlighted earlier, we are building manufacturing capability to support long-term growth and reduce dependence on external sourcing. Our strategic project of setting up WMAP plant at Kakinada and seaweed granulation plant are progressing well and will enhance our ability to offer differentiated crop solutions.

The crop protection business delivered a record performance in Q1, driven by strong growth in exports and B2B sales despite softer demand environment in the domestic formulation segment. Revenue grew by 20% year-on-year to ₹870 crores, while EBITDA increased 44% to ₹159 crores, reflecting improved product mix, traction for its key molecule, and the ability to pass on higher raw material costs in the export markets.

Share of sales in the new products in the domestic B2C stands at 32% as compared to 23% last year, and we also introduced three new products during this current quarter. Operationally, the business continued to make steady progress on its strategic priorities.

Capacity expansion of key molecule is on track and is expected to be commissioned by September, strengthening our ability to support future growth. We are in the process of advancing our pyro-chemistry capabilities and are establishing a launch facility to support product development and scale-up opportunities.

Further progress was made on our CDMO strategy through engagements with leading global innovators, while long-term raw material security was enhanced through strategic sourcing and supply arrangements. Our innovation pipeline continues to strengthen with new product registrations, novel combinations, and patent filings.

We remain focused on bringing differentiated solutions to the market and plan to introduce several new products over the coming months. We will also be focusing on strengthening our market presence in Latin American markets to ensure that the market for our key molecules remain robust for the coming quarters.

On subsidiary, NACL Industries improved its performance, and EBITDA has moved up by 9% to ₹41 crores, with margin improving to 11% from 8%. These are in line with what we envisaged at the time of acquisition.

Lower export volumes and price pressure has impacted export revenues, and overall revenues were moderate at ₹383 crores. However, the business is strengthening its product portfolio and launched three new products during the quarter, and is planning to accelerate new product introductions in the coming months.

The company is closely engaging with MNC customers on development of AI intermediates in its current facility. The bio-product business delivered a steady performance in Q1, supported by decent growth in domestic and export markets.

The business is strengthening its innovation pipeline and developed two new products in the biostimulant and microbial categories specifically designed to address the requirements from the retail business. The white-label products in the retail business, which hitherto sourced from outside, will be now manufactured by bio-business, providing huge opportunity and complete capturing of value chain, right from manufacturing to marketing these products through our own captive retail outlets.

In addition, a number of products are progressing through various stages of development and regulatory approvals. Bio-business will be one of the key focus areas for us to grow both in domestic and global markets, and the company has invested in direct retailing of bio-products by having their own trade team besides the retail outlets.

The team is also actively exploring collaboration opportunities in adjacent segments, such as feed additives, while continue to build capabilities in plant extracts and microbial space. The retail business delivered an outstanding performance in the current quarter, benefiting from strong farmer engagement, expanded store network, and higher sale of fertilizers, specialty nutrients, and organic products.

Revenue on a standalone retail increased by 85% year-on-year, reflecting improved scale, operating leverage, and profitability across the network. 76% of the stores were profitable during the quarter compared to 61% in the corresponding period last year.

The business deepened its reach through additional 22 new stores, taking the network to over 1,200 outlets, while also expanding its digital and omnichannel capabilities through e-commerce and farmer engagement initiatives. The nano-business delivered stable performance, with sales volume growing 2% year-on-year, supported by sustained demand for Nano DAP and a market leadership position with nearly 60% of market share.

The business also initiated exports during the quarter and sees encouraging opportunities to expand its presence in international market, supported by registration secured in three markets in few markets. There has been a ban on some of these products by fertilizer companies in the state of UP and Maharashtra, which industry has been representing, which has moderated the growth of these volumes.

In this current global crisis, it's very pertinent to note that these alternate fertilizers can make a huge difference to the farming community and also can save precious subsidy bill for the country. Industry has been approaching state governments towards the same.

Coromandel has been pursuing with drone spraying services, continued to gain traction during the quarter, reflecting increasing farmer adoption of precision agriculture solutions. We are also evaluating introduction of higher-capacity drones capable of fertilizer applications, which can significantly expand the addressable markets and enhance the value proposition of our farm mechanization services.

Our drone subsidiary, Dhaksha, while pursuing the defense orders, has focused on agri-drone platform and has come up with variants on agri-drones based on the inputs provided by the Coromandel Agri team, and has also applied for test certifications of new type of drones, which can improve the efficiency and increase the battery life of drones. The business has consolidated its operations in its new integrated facility and is actively pursuing growth opportunities across various verticals, while continuing to expand its technology and product capabilities through collaborations.

Happy to share that Coromandel achieved a significant sustainability milestone during the quarter with the receipt of Responsible Care certification, reflecting our commitment to the highest standards of health, safety, environment, and operational excellence. We are also setting up corporate research center at IIT Madras Research Park, which will focus on developing next-generation platform technologies in nano, biologicals, and advanced chemistries, strengthening our innovation pipeline and supporting long-term growth.

Overall, we have delivered a resilient performance in a challenging operating environment marked by delayed monsoon, elevated raw material costs, and pressure on fertilizer margins. The strength of our diversified portfolio, disciplined execution, and strong growth across non-fertilizer business has helped us to offset the market headwinds which you have witnessed in fertilizer business and enabled us to deliver a healthy performance during the quarter.

Now I'd request Deepak to cover the financial performance.

Thank you, Shankar. Good afternoon, everyone.

During the quarter, company recorded a consolidated total income of ₹8,215 crores as against ₹7,126 crores in Q1 of last year, registering a growth of 15%. The increase in revenues has been mainly on account of higher realization in fertilizers, combined with growth in the non-subsidy business.

It's pertinent to note that last year's Q1 results does not include the NACL numbers, as it became a subsidiary effective 8th August 2025 onwards. The revenue share from subsidy business stands at 77% during the quarter.

As far as profitability is concerned, consolidated EBITDA for the quarter was ₹761 crores against ₹782 crores last year, registering a degrowth of 3%. The decrease in EBITDA is mainly due to higher input costs on account of the ongoing West Asia crisis, and this input cost inflation has not been fully commensurate with the revision in the NBS rates.

The EBITDA share of subsidy business stands at 48% during the quarter. Net profit for the quarter was ₹382 crores in comparison to ₹502 crores last year.

With regard to subsidy, during the quarter, the company received ₹1,392 crores towards the subsidy claims compared to ₹1,300 crores last year in Q1. Government has been prompt in clearing the subsidy dues.

As of today, we have received our subsidy claims till the third week of June. Subsidy outstanding as on 30th June was about ₹3,254 crores.

We have received additional subsidy of ₹568 crores in the month of July. As far as forex is concerned, during Q1, the rupee traded in a wide range of 92.59 to 96.83.

Coromandel continues to hedge its exposures on a conservative basis. Thank you for the continued interest.

We look forward to these interactions. I'll now hand it over to Manish.

Hi, sir. Thanks for the opportunity.

First question on the overall on-ground scenario. You mentioned a relatively lower utilization for us in this quarter, and presumably the imported fertilizer will also be lower, more importantly, urea and DAP there.

Is there any structural shift that you are seeing, higher demand for NPKs there, or there is some shortage of fertilizers on the ground and how are you looking at the on-ground scenario?

Ankur, there is no shortage per se. Sufficient stocks of urea and DAP is available in the market.

In the early part of the season, farmers have picked up lower-MRP bags, and hence there was an advance purchase ahead of the season. With the slowdown in the monsoon and improved availability, there has been a slowdown in purchase as well.

I think currently the offtake is more to do with the monsoon than availability a challenge.

Sure, sir. Given there is no further revision in subsidy rates, is the situation on the ground still comfortable from a kharif demand-supply perspective?

See, industry has taken some price change. At this point of time, this is the maximum the industry can do.

Beyond this, this has to come through subsidies. That is what we have represented to government, and hopefully it should come through.

As long as we don't correct it further, of course, the demand portion is intact.

Sure, sir. Second bit on the crop protection and the export side.

Congratulations for a strong show there. Your thoughts on the bioproducts or the product registration for the formulation ones, both in the domestic and the export market.

What could be the timelines that one can think of in terms of revenue ramp-up here? A second part of that question, on the mancozeb capacity expansion, how's the demand pricing situation there as well?

In the domestic formulation, our new product introduction, the action has been initiated 2-3 years before, we have been getting new 9(3) registrations, 3 to 4 products coming through every year. That trend will continue.

We have lined up the product pipeline with a clear visibility for next 3 to 4 years. On the export front, especially on mancozeb, we have a broad-based sale of mancozeb across various continents.

We don't depend on one particular geography. Our presence in Latin America is fairly less at this point of time.

Post completion of this project, we are planning to increase our volume in Latin American markets. There we are trying to see how best we can come up with combination products, and how do we have physical presence on the ground through some collaborative support to ensure that there's a long-term demand for mancozeb.

At this point of time, we are quite comfortable on the offtake, but will be very important for us to build this portfolio for long term through combination products, and that is what we are working on.

Sure, sir. That's helpful.

Just one last bit if I may. You did alluded towards the CDMO opportunity for us, and earlier also we had mentioned on the industrial chemical side.

How do you look at from a capital allocation perspective, given that will you prefer to expand into industrial chemical, CDMO, etc., here, which we have been sort of talking for a last couple of years? Or there is scope for more getting backward integrated on the fertilizer side, whether it is BMCC or maybe possible further backward integration into PA and SA in India?

No, these two are separate tracks. We'll continue to pursue this opportunity with the commissioning of new PASA plant, 60% of the acid requirements are taken care, and we are reasonably comfortable at this point of time.

We'll continue to keep some option open for imported acid as well. On the CDMO side, we are trying to do it in an organic way, and it calls for huge investments for various fluorination-based derivatives to be manufactured.

Before we make that investment, we wanted to ensure that we have a proper product and customer fits are met, and hence we are looking for launch plant, which we will be doing it in Ankleshwar. Once we succeed here, then we will look at the sectors in which we will develop these products.

Currently, we are focusing on fluorination-based chemicals for our agrochemical use. Once we succeed there, then we will look for other sectors as well to cater to.

That's our game plan on CDMO right now, but we are also trying to look at various other intermediates. Along with NACL, we are trying to see how best we can provide intermediate support to global MNCs.

Instead of finished agrochemicals which requires registration, it's a long-gestation project, intermediate does not require registrations, we are trying to see how best we can leverage our capacities to produce those intermediates. The discussions are underway.

We are having a multi-pronged approach to introduce some new products under this category as well.

Sure, sir. That's helpful.

Thank you, and all the best.

Thank you.

Hi. I wanted to ask on the CPC business.

On the crop protection, just wanted to understand how much percentage of gains is coming from foreign currency, like foreign currency gains?

I'm not able to hear you clearly. Can you please repeat the question?

Am I audible now, sir?

Hello?

Yes, sir. Am I audible?

Now it's better.

Yeah. Sorry.

I just wanted to understand when our export business on the CPC side has done well, how much percentage of gains is because of foreign currency gains?

See, we follow the netting principle. We have a net exposure, to that extent, the overall margins, the EBITDA what we reported, not more than 5% to 6% can be attributable to foreign currency.

Okay. Thank you.

Just another question. Basis our NACL acquisition in last year, do we have any plans to increase our shareholding in the company?

I wish we can do that.

Okay. Thank you.

Thanks for the opportunity, sir. Sir, my first question is on the medium-term capex or capital allocation.

Now that the PA plant and SA plant is commissioned and the granulation is also about to get commissioned, what are the options that we have? Whether we can add further NPK's capacity from import substitution angle and land availability?

In terms of priorities, which will be the ones that we'll be evaluating closely, and when can we expect any plan for the next couple of years? That's my first question.

See, on fertilizer, we are just completing the investments, and we want to ensure that we generate cash out of these investments. Meanwhile, we have this Middle East crisis, which is impacting in terms of margins.

We may not add any capacities immediately in fertilizers. Our game plan as of now, post commissioning of this new plant, we will be going up to 4 million tons of fertilizers and 1 million ton of trading, predominantly DAP.

We have a fair visibility of 5 million tons at this point of time, plus a million ton of SSP plus organic plus urea and imported DAP. We have fair visibility of 8 to 9 million tons of nutrients, that I think will see us through for the next 2 years, because we want to ensure that whatever money we have invested, we generate the cash, whether it is phos acid, sulfuric acid, or finished fertilizers.

In terms of the land, we always been looking for additional land for the future growth and opportunities that investment can happen, and we have been working with Andhra Pradesh government for securing additional land for the future expansion. This is as far as nutrient business is concerned.

Of course, we are looking at other opportunities like MAP plant, which we are putting up in Vizag, for our specialty nutrient business. Besides that, we are also evaluating purified phos acid, phos acid for battery chemicals.

These projects are under evaluation. We will see commercial viability, we will explore those opportunities.

In crop protection business, we are just completing the capacity expansion. Here again, we wanted to focus on generating the cash.

We're also trying to see how best we can realize value in all these investments. We may not be adding capacities for active ingredients because we have spare capacities available in NACL.

Hence, we will try and leverage the capacities between both the plants on the AI side. In crop protection business, investment will be more towards marketing, brand building, channel network creation, rather than focusing on any asset creation.

That is what we are looking at this point of time. Besides that, retail, we are expanding our network, which doesn't cost us much in terms of the capex.

It's more towards creation of network and providing additional supply chain support.

Got it, sir. Sir, also on NACL, this time we have seen margin improvement in NACL.

This is the intended level of margin, or this is kind of we'll be stabilizing at this level, or we see further scope for improvement in NACL margins? Second, related to NACL, this time, in our own crop protection, we had a very strong revenue growth, you had alluded to exports.

What in terms of product portfolio or the difference that's leading to a decline in NACL versus a strong growth for us in our standalone business? See,

I think with the current product portfolio what they have got, I think we have reached a reasonable level of EBITDA. If you remember, at the time of acquisition also, we talked about EBITDA which has fallen to 3%-4% at the first stage will move to 7%-8%, and then we'll move it to 10%-11%.

I think the product portfolio, some molecules always keep going up, some comes down. Unless we introduce new products, which again will take 2-3 years' time, sustaining this margin at this level is the best we can do for NACL.

That's the reason they are looking at investing in intermediate capacity creation, CDMO opportunities. Those are other value chain creation we can do to improve the EBITDA margins.

Also, we continue to pursue efficiency improvement, cost reduction initiatives. Those things are yet to play out.

Those things can take extra 1% or 2% margin, but any significant improvement to align it with Coromandel will call for additional investments there, and new products to come in, which will be a little time-consuming. Got it.

Sir,

the other part was on the revenue front, where standalone we'd bear quite strong exports, but NACL we had an impact there. Just want to understand the difference, what's

Sorry, I didn't get that again. Can you please repeat?

Sir, no,

in the standalone crop protection, we had a very strong revenue growth, which you alluded to the exports part. NACL had a decline.

Just wanted to understand I think in the comments, you also mentioned about NACL exports was a bit impacted, just want to understand the region or molecules, or what was that causing the difference? There

has been some price moderation in their molecules which they are selling it to global MNCs, and that has moderated the revenue per se. Whereas the case of Coromandel, our ability to pass on the input cost increase of prices helped us to realize better pricing, and that is why you see a top-line growth in Coromandel, whereas there has been a marginal reduction in NACL.

It goes with the product mix between the two companies.

Sure, sir. Just one last, your thoughts on sulfur.

We were expecting at a point in time sulfur can at least come off slightly, but it's still continuing to hold high. Your thoughts on this?

See, sulfur is actually against our initial expectation, sulfur is holding high. It's quite unfortunate, in fact, again, the revival of Middle East situation, the way it is playing out now.

I think sulfur may likely to remain high for some time. It's not sustainable.

If you recollect, sulfur used to be a disposal issue for most of the oil companies, and suddenly the price has gone up. This is not the correct position to be in.

While there are structural shifts happened in terms of demand from EV batteries for nickel leaching, and that is why the offtake of sulfur has moved up from Indonesia and other countries, still we feel that these are all exorbitant levels. It should come down, but it may take a while.

That is where, as Indian fertilizer sector, we decided to stay out at these price points. It doesn't make economic sense.

We strongly believe the prices should soften. These are not sustainable levels to be in.

Got it, sir. Thank you.

Thank you.

Sir, sorry, I joined the call a little late. I have just one question.

You said that you're going to exploit the capacities you've added for the next one to two years. Have you given a capex target, sir, in terms of what you'll see for the next one to two years in terms of rupees crores?

See, these things change. If there are opportunities, definitely we do invest in capex.

At this point of time, we wanted to realize value of investments what we have made. In fact, last 3-4 years, we have invested close to ₹7,000 crores both for organic and inorganic opportunities.

It's very important for us to get the returns on those investments before we embark on further capex. I would put a normal sustainable capex of ₹300 crores would be the numbers we look at.

Having said that, if there are good opportunities and there are any reasonable-return projects coming, we will not be averse to look at that.

Put, sir. Thank you very much, and wish you all the best.

Thank you.

Hi, sir. Congrats for a decent set of numbers amid challenging environment.

My question regarding the industry levels shift, if I look at in terms of NPK at a farmer level, prices that are much, much higher compared to last year. While if I look at the DAP prices at the farmer level, that is roughly at ₹27,000 per ton.

Do you see this shift in terms of NPK to DAP regaining this year or how is the consumption level market share of DAP and NPK, overall the non-urea overall consumption overall demand as of now?

No, the shift is not happening. If it continues to remain like this for long period of time and if subsidy is not corrected for NP, NPK, we can't correct MRPS beyond certain levels.

Then this will have a challenge of farmers looking for cheaper alternative. DAP, which is a high-P product, is available at ₹1,350 per bag, and whereas low-P product like 20-20 is going at ₹2,100.

It doesn't reflect the balanced nutrition need of the crop. I hope, as and when the subsidy revision happens, it will bring some normalcy.

Current artificial pegging of DAP price is also impacting at this point of time. Farmers understand this balanced nutrition, and I don't think the reverse shift will happen.

Also, it's also a function of availability. DAP is not available beyond certain volumes, and government also is encouraging farmers to look for alternates like SSP, organic fertilizers.

I don't think the need for NPK will remain, but too much of price can lead to demand destruction. That is what we have been presenting to the government as well.

Understood. Sir, in terms of the BMCC, I think the ramp-up during the quarter was robust.

If you could highlight that thing as well. Also, if I look at in terms of the depreciation overall this quarter was much, much higher on a sequential and on a YoY basis.

If you could highlight why that is the case? Also, adding to that, if you could give us a sense that due to the commissioning of sulfuric acid and phos acid capacities in 4Q, how much additional depreciation that you have booked during this quarter?

See, this additional depreciation is also includes, for the consolidated company, the amortization of mining costs that actually, as per the accounting standard, some of the mining costs of overburden needs to be grouped under depreciation. The spike in depreciation what you are seeing is not because of additional capex.

Only on account of additional capex, the increase is around ₹16 to ₹18 crores, not more than that. The rest of them is only amortization expenses in mining operations, plus when we do the consolidated financials, as per the merger accounting, we had to amortize the what you call amortization of intangibles.

That is close to ₹20-₹21 crores. This is a combination of PASA gap of ₹16 crores and amortization of NACL intangibles ₹20 crores, and rest is coming mainly from mining charge towards overburden.

How much, sir, was for the mining?

Mining will be ₹30-odd crores.

Okay. On BMCC in terms of overall mining capacity of mining activities, and also how BMCC in terms of the overall improvement in the fertilizer business EBITDA.

If you could quantify that thing?

See, mining operations are to be seen in two contexts. One is what is the margin we capture in the overseas entity, that is only one aspect of it.

Suppose if we have a half a million ton of rock phosphate produced there, at a net EBITDA of even $30, half a million ton, that's a minimum number we are talking about accruing year after year. That is a value what we capture in that company.

What it makes a difference is the rock gets converted into acid and you get a value gap in acid while you import. To be seen as a raw material security for our new projects at Kakinada, plus the value gap on phos acid which we accrue as compared to imported phos acid.

It can't be seen in isolation. More of a strategic investment to ensure supply security, capturing value on rock side as well as on the acid side in India.

Understood. Sir, one last question in terms of the CP business.

If you could provide us a mix of exports and the domestic CP business, including NACL numbers?

Can I ask my team to get back to you on the specifics, how much is the breakup? I'll get back to you on this.

Sure, sir. Sure.

Thank you, sir, and congratulations for a good set of numbers in a challenging environment. My first question is on your commentary that you shared that the fertilizers are now being sold through QR code.

If you can shed more light on the dynamics that are playing out on ground or the government's policy, are these to be taken as an parts and pieces that may eventually lead to an ideal DBT implementation? That's my first question.

That is my wish as well, Ranjit. That happens now.

It's quite effective. I've witnessed myself the pilot operations in one of our retail stores.

That QR code scans the person, when he gives the Aadhaar number, it links to his farmholding, type of crop, and accordingly what dosage of urea, DAP, and NPKs are required, and it is linked to the retailer. Retailer has to take this QR code into his POS machine, and accordingly delivers the bags what has been mentioned there.

A farmer has to restrict the purchase to that many number of bags. That does two things: overuse of straight fertilizers like urea and DAP is restricted.

That can bring about huge savings for the government in terms of subsidy. It helps the farmer to ensure that the overuse of N is taken care.

It also takes away the arbitrage available to the channel because of urea demand. I think it's a win-win situation for all the stakeholders, and I wish if it gets replicated all across, it can bring about some sanity in balanced fertilizer usage, and ultimately can lead to direct benefit transfer to the farmers.

They can decide what is good for them for their crops.

Right, sir. Any guidance for how much is this been implemented?

It's on a pilot basis. In which states or districts it's been started?

Same like they're trying to do it in 10 to 12 states, two, three districts in each state. I will get back to you in specifics.

That is what my understanding is. Of course, it has been picked up for Medak district in Telangana and one more district in Telangana.

That is where we have witnessed, but I'm very impressed with the way the system is functioning.

Sure, sir. Thank you.

The second question is just trying to understand the difference. If you do console minus standalone, the EBITDA that we see in the remaining part has seen quite a bit of a jump.

I understand that a part of it is due to NACL consolidation and some growth in the base business. Still not able to reconcile that figure.

There is a gap of 30, 40-odd crores. Is this attributable to BMCC profitability?

That's what I was telling. See, in a mining cost, it comes below EBITDA under depreciation.

Previous caller also has been asking for the reason for spurt in depreciation numbers. That includes amortization of mining expenditure, which comes below the line.

To that extent, the BMCC increase in the consolidated financials is showing up in EBITDA. After providing for this amortization, the net impact comes down.

That is 30-odd crores which has got included under amortization.

Right, sir. One request from our side is that now the non-subsidy business is kind of a gaining scale, and in yesterday's press release, we also started highlighting or at least mentioning the crop protection EBITDA.

If you can also try and give a bit more KPIs on the non-subsidy front, the subsidy EBITDA and non-subsidy, at least to monitor them going forward would be helpful from our side, and that would help us to understand the company a little bit more in detail. That's the request from my side.

Thank you.

We should do that, definitely. We'll try and put those things.

Thank you.

Hi. Am I audible?

Yes.

Hi. A couple of questions.

One on crop protection, and the other one on fertilizers. First one, fertilizer.

Stepping into Q1, from an industry vantage, the industry already had excess inventory, a sizable inventory. You did call out that there was some element of pre-buying because there were lower-MRP packets that were sort of available.

In that context, the real impact of high-cost inventory would have probably impacted only the latter part of this quarter. Just wanted to understand, over and above the subsidy, what is the broad pricing trends, pricing actions that the industry's taken?

Number two, given that now the inventory that would be in the system would be fairly expensive, and at least sowing seems to have caught up now, how should we look at Q2 on this business and for the fertilizer business? That's on the fertilizer.

On crop protection, I'll probably ask after the first question's response. Thanks.

You're right, actually. We need to wait for whatever we could do in terms of the price increases already happened.

Industry has taken the price increase. Beyond this, it has to be supplemented with the subsidy correction.

That's exact reason why we are impressing upon the need to update the NBS rates for kharif. Anyway, for the rabi, the revision will happen.

What we are seeking correction is for the ongoing kharif season, because we don't want to increase MRP beyond the current levels. Having said that, there has been correction in some of the global raw material prices.

The urea, having gone up to $900, has come down. Ammonia has started softening, and sulfur is only a matter of time before it comes off.

Industry has been very cautious in building up inventories, and there has been lack of supplies as well. Most of us have calibrated our purchases and productions to avoid any carryover of high-cost inventories.

Further increase is not doable. It has to come from subsidy.

Let's hope it happens.

How much has been the price increase, on a broad basis, for this quarter?

25% to 30% across. 20% to 30%,

is it?

25% to 30%.

Okay. Got it.

Okay. On the crop protection business, your commentary on domestic crop protection consumption or even on international markets, for the broader market was slightly soft.

Despite that, the standalone business has grown 20%. Just trying to understand what part of that business is really grown.

Is it B2B technicals, B2C branded, is it really your export technicals, or your export B2C franchise? If you could give slightly granular sense on what part of this business really did well, because what we understand is technical prices broadly have come off again, which is also sort of visible on NACL prices.

Secondly, given how fertilizer prices have inched up globally, just wanted to understand what is the demand pattern that's emerging from farmers, both in India as well as abroad for crop protection? Thanks.

You are absolutely right. Global commodity prices are softening, whether it is corn or maize.

To that extent, the farmer's affordability has come down. Farmers are looking for cheaper alternatives and specialties are getting pushback, and that is where some of molecules, active ingredients what we are dealing with, are gaining some traction.

Positively, these molecules are not the ones which China is in. China has kept artificially active ingredients at low prices, including the intermediates at a higher level.

There are certain markets which can take this sort of a price increase, we could pass on the input cost increase to the markets for these AIs what we are dealing with. This may sustain because of the nature of the molecule, and currently we are focusing on B2B exports, but our aim is to see how best we can get into B2C.

Right now, we are not having B2C presence. We are exploring opportunities to create specific brands and also combination products based on our AIs.

That effort is underway for the long-term sustenance and demand for these molecules.

Okay. Thank you, sir.

It was much better than what it was a year before. Yeah.

Thank you.

Sorry, sir.

It was much better than what it was earlier in terms of AI pricing. There has been a slight improvement, I won't say that bad what we witnessed a year before.

Yeah. Hi, sir.

Thank you so much. Sir, looking at the NPK production data for the industry, it seems it has come off significantly in 1Q.

Probably 4Q was also a bit lower, and imports have also come down. Now, is it fair to understand that subsidy policy by the government will be key for this number to probably go up?

Is that a fair way to think of this?

100%. Otherwise, it doesn't make economic sense for the people to produce, and domestic capacities cannot afford to produce at high input prices of sulfur and ammonia.

It's very critical for the subsidy rates to get revised if the production has to come through. Otherwise, it can have an impact in Q2 as well.

Got it, sure. Sir, secondly, given the market dynamics currently, are we seeing any change in the adoption of Nano DAP, Nano Urea, probably more entrenched at least in the foliar application where it probably works well?

Ideally, it should happen, but unfortunately, some of the state governments like UP and Maharashtra has banned these products, and that has put the lid on the demand for these products. Had it not been for this, definitely the volumes will pick up.

We have seen a very good response. We strongly believe in these products.

In fact, globally also, we have received good response. We started exporting nano-products last quarter.

Coming quarters, we'll be focusing on how do we improve our international business on nano-products once the registration comes through. Our Nano DAP is working very well, and we are very confident.

We have been very diligently promoting this across various geographies, and the response has been pretty good.

Got it.

Thank you for the opportunity. Sir, while we're in Q2, we will have benefit of higher production, and just wanted to get a sense of to maintain the same level of EBITDA per ton supposedly, how much increase in subsidy would one seek?

Prashant, I don't count chickens before they hatch. Just let subsidy come, we'll derive the EBITDA, not the other way round.

Right. Sir, regarding this

QR No, just to be serious on this, you're very valid question. What we have been asking government is to give us what is due to us.

Policy envisages 6 months average rates to be applied for NBS. That's all we are asking for.

If that is restored, see, the subsidy rates for the last two, three seasons has been marginal 10% increase. In this global environment, no plant can sustain this sort of cost increase and try to achieve EBITDA.

What we are seeking help from the government is to provide 6 months average, then rest we will take care because, fortunately, NP, NPK's pricings are not controlled.

Sir, that is what I was asking for. How much is due to the industry and how much has the government not given yet?

It varies for the nutrients. N is a very significant, steep correction required, and P will also require steep correction, because the 6 months average price for even in April, if you are to go back and put these numbers, what prevailed 6 months prior to April, what we got has got no relevance to the numbers prevailed even without the crisis.

Right. Sir, secondly, on this QR code-based selling of fertilizer, sir, if this is applicable pan-India, then there could also be some rationalization in fertilizer sales, whosoever are using it on an excess.

Would that understanding be right?

Of urea and DAP, definitely.

This is

That's not happening on NP, NPKs. Ideally, it should increase the demand for NP, NPK fertilizers.

Okay. For NPK, consumption is not in excess, but for DAP, it is there, is what you are trying to say?

Yes.

Overuse of N and P, both urea and DAP, may get curtailed.

Right. Sir, as per your annual report and also from the data that you share

Okay.

No, let him complete the question. It's

okay. You can continue.

Prashant, please go ahead. Sure, sir.

Just we may extend the call by 10 minutes to accommodate callers.

Yeah. Sir, on the SSP part, we are already running above capacity.

If you can share some expansion plans which you might have there. On BMCC side, if you can repeat what you told in the opening remarks regarding the capex?

On the BMCC, currently we are operating the plant closer to the target volumes of 5 lakh tons of rock phosphate production. That is going as per plan.

Besides that, we wanted to invest in single superphosphate facility. It doesn't cost much.

It may be $5 to $6 million, $5 to $6 million of investment to create 100,000 tons of 100-150,000 tons of SSP. It provides a huge opportunity because we'll be using the reject rocks to process and produce SSP for the domestic market as well as for the export market.

It provides a value addition of rock phosphate in Senegal, and also we can export to other countries from there. Once we succeed in the smaller capacities, then we may look to expand the capacity so that we can capture the value in Senegal itself.

That's what we are looking at. Besides supplying rock to India, we can also look at capturing value there.

Sure. Thank you so much.

I'll join the queue.

Thank you.

Thank you, sir. My first question was regarding the delay in the subsidy, incremental subsidy announcement.

We've been waiting to hear back on this since the last quarter. If you could just throw some light on what's causing the delay from the government's end?

Sir,

obviously, there is a pressure on overall subsidy bill across various product categories. With the gas price, urea subsidy is going up.

With the DAP being compensated fully, there is a reasonable amount of allocation happening for DAP as well. Hence there is a pushback on NP, NPK, which we have represented to the government.

More of a subsidy overall bill which is causing this delay.

Okay. Got it.

Sir, secondly, with the incremental capacity coming in the fourth fourth quarter fourth quarter of this year, what are we doing with respect to entering the new markets? We've spoken about it a little in the past, but if you could just share with us, what are the key new markets that you're looking at, and any key markets where you feel that we may be able to gain incremental market share, maybe somewhere like a Maharashtra, something on those fronts?

See, capacity is 750,000. 50% of the volume we wanted to sell through our own retail outlets.

We are increasing our footprint in Maharashtra, Tamil Nadu, and also we're increasing number of retail outlets in Andhra, Telangana. In the current markets where we have significant presence, we will be maximizing our sale through our own retail outlets.

Balance 50%, selling this 3.5 to 4 lakh tons, we don't see a challenge. We have already developed the seed markets in UP, Rajasthan, MP, Chhattisgarh.

These markets can absorb the balance volume. I don't see any challenge in taking the additional volume.

All right. Sir.

That's all. Thank you.

Thank you.

Hi. Thank you for the opportunity.

Just one clarification, sir. Based on our calculation looking at the price hike industry has taken, there is a substantial could be historic high requirement from the government in terms of a fertilizer budget, which I think industry would have not experienced anytime in the past.

Looking at the different commitments government has on their balance sheet side, could this be the year where everybody, from farmer to companies and government, every body has to take the share of the hit which the sector may face? No,

I understand. What we are seeking is what is in line with policy.

We are not asking for any additional ad hoc subsidy, which has been given to DAP or for urea to absorb the additional gas price. NP, NPK fertilizer which is currently produced predominantly in India, Atmanirbhar, government is also promoting.

What we are seeking is the average 6 months rate, which anyway defined under the policy. We are not asking for anything higher.

I think which is a fair expectation and hopefully it should be met.

Perfect. All right, sir.

Thank you, and all the best.

Thank you.

Yeah. Sir, thanks for the opportunity.

Sir, two questions. First, on the capex part, in last 5 years, we have invested close to around ₹7,000 crores.

Let's say, given the steady state, and this capex which we have generally invested towards the backward integration and the strategic part. On a steady-state basis, how much of the EBITDA this capex could generate over next 2, 3 years given the kind of ramp-up we are seeing in terms of the strategic investments as well as the backward integration projects?

I did talk about this sometime back. Our average EBITDA, which used to be 5,000, need to go up to ₹6,500.

₹6,500 per metric ton. Correct.

Correct.

That is the improvement we are looking for as far as the nutrient business is concerned. Rest of the capex are towards acquisition or towards Senegal operations or towards new capacity creation in crop protection business.

The way the margins are accruing to crop protection business, we see the payback of less than 3 years in some of these capex what we have invested in the last 2 years. Hope we continue to recover the money.

Correct. I think we have also expanded the capacity on the bentonite sulfur side, where we doubled our capacity, taking the total specialty nutrients capacity to close to around 88,000 tons.

If you can give us some sense in terms of how much the specialty nutrient business would have contributed in that ₹3,100 crores of EBITDA which we have generated in FY26?

We don't put out a separate number for specialties, but all we can say is we have been continuously growing the top line of special nutrition business by 25%-30% with EBITDA margin of 20%. Of course, the sulfur expansion has not really helped due to the current situation what we are facing, but these are all temporary.

Once things are normalized, we should be able to utilize that capacities. We are looking at MAP, which is again a strategic investment from raw material sourcing as well as for trading opportunities.

That will come up after 1 year or so. Granulation of specialty nutrients and organic fertilizer, which also helps us to diversify the product portfolio towards seaweed granulation, gypsum granulation, and other micronutrient granulation.

These things are gaining good traction from the farming community, and they are high-margin products and doesn't cost much. The specialty nutrient business is growing really well, and with the stress on crops, definitely farmers will use water-soluble grades in the drip irrigation system, and we hope we are able to take advantage of this opportunity.

Clarification on the SSP side, like you mentioned in your opening remarks that now 50% of our volumes are specialty ones. Let's say, on a steady-state basis, what one should assume now in terms of per metric ton contribution from the SSP business?

₹2,500 to ₹3,000.

Correct. Thank you so much, sir, and wish you all the best.

Thank you.

Hi, sir. Thanks for the opportunity.

Can you give some figures regarding Dhaksha, our drone company?

Once they put some numbers there, I will talk about it. At this point of time, they are focusing more on agri-drones, which has gained good traction.

In fact, Coromandel itself has purchased close to 100-150 drones this quarter, and we are trying to expand the fleet to 500 drones during the year. That shall be mainly catering to agri-drones and until we get the defense orders, we will be focusing on agri-business.

On defense orders, we are in the final stage. As and when it materializes, we should be able to scale up the volumes.

There are humongous opportunities available in this sector. We'll continue to pursue them.

We're trying to also ensure that how do we strengthen the supply chain, how do we develop the complete ecosystem. We're working on it.

It's still work in progress. It's too early stages for me to comment on those numbers specifically.

Are they a big drag as far as EBITDA level is concerned, or it's at least?

It's not very significant. It's very insignificant than the overall numbers.

Doesn't impact much. See, these are all startups.

We need to deal with them and ensure that we create a future value. That way, it's been helpful for us.

We'll try to create value out of this business sometime.

Sir. Lastly, you said, due to this backward integration, our EBITDA in NPK will move to ₹6,500.

That is what I heard. Is that correct, sir?

Yeah. That is what we have always been telling, once we commercialize the plant and steady state, we should generate that set of revenue.

Don't ask me this number for this quarter. It doesn't happen today because of the spurt in input prices.

I said, in a normal situation, we should realize that set of an EBITDA. These are all abnormal periods.

Once the normalcy restores, we should realize that value.

Yeah. Means, all thing being equal, it should reach there, right, sir?

Yeah.

Yes, absolutely.

Okay. Thank you, sir, and all the best.

Thank you very much.

Thanks for taking my question. Sir, I wanted to know what levels of pricing of sulfur do you think optimal backward integration kicks in?

Just for understanding, sir.

At the current given phosphoric acid price of $1,700, at least we want $800 of sulfur.

$800, okay. Thank you.

Thank you. Thank you, sir.

Thank you very much, and thanks for raising some insightful questions. We strive to do our best, and hope the situation improves and the offtake improves, and we also improve on the subsidy realization from the government.

Thank you for your interest in Coromandel. Thank you, Manish.