Thank you. Thank you to moderator as well as the organizer for holding this call on Q1 FY '26-'27.

Apart from the names which are given, we have other members also from procurement and marketing, investors may direct the query accordingly. May we know number of participants?

[whispering in background: Kul 53 hain?] .

We welcome all the investors to the call as well. We'll first start with the business update as to what is happening to the business.

Overall during the quarter one, it has been the situation of escalation and de-escalation as far as war is concerned, and that has a ripple effect on the business as well in terms of at times viability issues, at times realizations which have gone up. Similarly, the input costs have also gone up because of the war situation.

During this quarter gone by, there are plants which we could not run for cost economics reason, like acetic acid, ethyl acetate, and to some extent, TDI as well. Although in the investor presentation the spreads seem to be better, but the offtake has not been so good, which resulted into some increase in the inventory.

Overall, the profits for Q1, in our view, has been significantly higher, and it is the second highest in the history of the company after the Q1 of '22. This typically happens in a war-like situation; it can go either side.

On the fertilizer front, there is one good news that energy norms have been revised in case of company. It was 6.20 Gcal per metric ton of urea, which is revised to 6.37 Gcal now.

This has been revised for a period from FY '25-'26, and valid for three years period. This is positive.

The other positive for the company is now during July, most of the plants which were not operational because of the cost economics reason have resumed the operation, whether it is ethyl acetate, acetic acid. TDI-II is about to start.

TDI-I has started. Except for the methanol, most of the plants are running now.

Coming to the projects, out of the four ongoing projects, the overdue project of Dahej has started providing now. Out of the steam and power, the steam portion has started coming, which is giving substantial relief in terms of the better cost position to TDI-II plant.

This is expected to save materially because the gas prices are significantly higher, although relatively coal prices are also higher, but then the delta is more, which is causing this differential saving. The costly gas is actually already replaced as far as steam is concerned.

Power, we are expecting to come in a month's time or so, or around 45 days' time. Apart from that, most of the projects are on stream.

There is slight time change in case of a weak nitric acid plant, but that is being monitored actively. About three months delay is there, which is going to be recouped.

In case of AMGCL and AN Melt, it is absolutely on line. AN Melt is on positive side.

This is what is the update on the project side. Coming to now the other part which is already there as part of announcement, GNFC has proposed the memorandum of understanding with GMDC.

This is for the underground coal gasification. GMDC is already into the mining business, and we are already in the downstream business, this will augur well.

There are certain studies which are ongoing, very sooner there will be announcement. The similar announcement has gone in the public domain from GMDC as well.

Coming to financials, the operating part has remained better more or less mainly because of the better realization, although volumes have gone down. Volumes of sales have gone down substantially than the volumes of production has been the situation.

There is some change in the overhead part and certain other income which is on a lower side, but on the operational side, it is basically the good realization which has augured well for the company. Most of the stock which was built up by Q1 is getting gradually liquidated in July and now in August as well.

As far as segment results are concerned, the results in case of fertilizer has further deteriorated by around ₹60 cr or so from around ₹24 crore to ₹85 crore, and the majority of that is coming from urea, around ₹48 crore, and ₹12 crore is coming from the ANP side. The rest of the predominant profit is coming from chemical, for which we discussed the reason.

Now with this initial comments, I leave the floor open for question and answer. Thank you very much.

Sir. Good afternoon and congratulations on a very good set of numbers.

Sir, two-three questions from my side. First on the oil prices.

When we see the investor presentation, the prices have gone up from close to around ₹43, ₹44 to around ₹73, and I believe that predominantly this is a raw material for our ammonia production. How has been the situation currently?

Have the prices further gone up from this average prices of Q1? Also if you can help us understand on the gas side also.

How has been the current situation in terms of gas availability as well as the gas prices?

Yeah. Am I audible now?

No, we have got the question. I don't think there was some disturbance, but we got the question.

We'll request our MM head, Shri Nirmeshbhai Desai, to respond on this.

Yeah. Good evening.

You have indicated that during this Q1 the oil prices has gone up as compared to Q4 of last financial year. Mainly it is due to Middle East crisis.

Slowly and slowly in the month of July and August, it is started coming down. Only point is that still the Middle East crisis has not resolved.

Going forward, the prices may come down if everything goes well. Otherwise it is difficult to predict anything.

Similarly on front of the gas, the prices remains volatile and availability of the volume is always a concern. Our operations are not affected on account of availability of the gas.

Thank you. Second question is on if you can share the production numbers for ammonia both through the oil and the gas route in first quarter.

Along with it, if you can share the production numbers for WNA, CNA, TDI, TGU, and AN Melt, that would be very useful, sir. Ammonia,

I am Nitin Patel. Ammonia production was approximately 173,000, and 51% out of that was from oil and 49% was from gas.

TDI total production was 12,800 with a breakup of 66% from Dahej unit and 34% from Bharuch unit. Next was WNA, right?

Yes.

WNA total is 113,000 production with a share of two plant, 70% and 30%. Next was?

CNA.

CNA, the total production was 37,500.

Okay. AN Melt?

AN Melt was 50,000 55,600.

Okay. For the TGU how was the production, and last was formic acid, sir?

TGU was 74,800, and formic acid was 8,200.

Perfect, sir. Thank you so much, sir.

I'll join back again in the queue. I have further questions to ask, sir.

Thank you so much.

Hi. Thank you for the opportunity, sir.

Just wanted to check, we have been reading about rotational maintenance shutdown by Covestro, Wanhua, etc. If you can just help, is that helping in terms of pricing or those are very temporary in nature and you don't see that sustaining beyond a point?

Mr. Tejash, are you online?

Yes, Nitin.

Yes, please go ahead and reply.

As far as that Covestro and Wanhua shutdown is concerned, they are basically making TDI. Right.

There are so many other players are there. Overall globally TDI production is quite high against the demand.

One month shutdown of Covestro and or Wanhua will not affect the overall pricing of the TDI. Yes, there is a shortage in the Indian market of TDI.

That will definitely affect the pricing.

Sure, sir. Thanks.

Thank you so much for answering.

Yeah. Good afternoon, sir.

Sir, I wanted to know the inventory that we are liquidating now, the margins that we are making there are less than what we made in Q1?

I am Dilip Parikh. I will answer your question.

The inventory which was built up up to 30th of June is liquidated to the extent of around 15% by the end of July. There is a mixed bag as far as realization is concerned.

Okay? Initially the realizations were lower.

Off late the prices have gone up, realizations have gone up. It's a mixed bag.

There is no specific realization number for it because it is a mixed one.

Okay. Sir, in last quarter, you had given a rough guidance about directionally how the Q1 would be versus Q4.

Can you give me a similar guidance for the chemical sector, how would the Q2 be versus Q1 directionally?

We do not recall, gentle lady, having given any guidance of such nature. Now

You had generally mentioned that realization in Q1 are somewhat lower than in Q4. This is what you had said.

Similarly, can you give a realization guidance let's say for Q2 versus Q1?

Hi. This is Rajesh here, the company secretary.

I think we have never given any guidance as such, and I think we should not also get into that guidance part, because that will also lead to a certain misinterpretation.

It

is better we avoid that situation.

Let me put it this way, current realizations, how are they versus the Q1 average for the chemical part broadly?

The current results are not yet

Our marketing Not current results, sir, current realization.

Our marketing head will respond on this.

Ma'am, we are talking about the Q1, it is difficult to predict about the Q2 because the market is very very volatile at present.

Okay. Sir.

Okay.

Thank you for taking my questions. I had two questions.

One is, sir, what is the savings that is anticipated on this once the coal-based steam and power plant start at Dahej, that is one. Secondly, sir, any update on the A.T.

Kearney that we had signed with them for this advisory in terms of savings, sir, management consultants, sir? These two are my questions.

Thank you.

Okay. I am Dilip Parikh.

I'll answer your first question. For the next, there are certain initiatives from operations, I'll request my colleague to answer that.

The first question is on the likely saving of this steam and power project. See, this saving is actually fluctuating in nature depending upon the delta between gas and coal.

Currently, we are likely to save around ₹30,000 to ₹40,000 per metric ton of TDI because of the current prices of gas and coal. The dynamic will keep changing depending upon the price dynamics of this two variables.

It's difficult to estimate, sir?

No. See, as far as current position is concerned, we conveyed the current position.

It could be higher, it could be somewhat lower depending upon the element-wise change in the prices of gas and coal. Okay?

Okay.

In current times, it is very difficult to gauge any movement. Whether it is coal or gas, they are at an elevated level, but how more elevated it can become is anybody's guess.

Or it will taper down with some resolution coming. It's not so clear as far as future is concerned.

If coal prices go down, it would be more beneficial to us.

Of course. It's a coal-based plant.

Correct. Okay.

The second question?

Looking to second question, I am Nitin Patel, Executive Director. Kearney is hand-holding us for various initiatives in various verticals for margin improvement and cost saving.

Some of the initiatives which are completed, I will just outline. One was about fuel oil our main raw material negotiation with the supplier for structural reduction in pricing.

Second was coal grade change, blend mix optimization for reducing the input cost. Third one was major overhauling of boilers.

We have three BHEL make boilers. One of the boiler was overhauled in Q1, and that has resulted into efficiency improvement, and that is a direct cost saving.

We are also into RE short-term power purchase agreement for Bharuch and Dahej. Then we are also exploring alternate supply of fuel oil from another suppliers.

Then as a part of project execution, coal conveyor was to be replaced, and while doing that natural gas was to be used as an alternate fuel. With in-house innovation by project team of GNFC and contractor and operation team, we could complete that job without using NG and continue to use coal, thereby there is a saving in the costlier fuel usage.

Then load optimization of our power mix. We have steam turbine, we have gas turbine, we have grid connectivity through state electricity company.

Power mix was optimized in order to keep the weighted average cost lowest possible. Then there was a focus on inventory management of Indian and different other brands of the coal, and inventory control is defined and being executed.

There was a focus on inventory management of spare parts. There are couple of more initiatives which are going on, like purchase of methanol, import methanol, importing acetic acid.

Then we are also trying to make more focus on export. Then auction-based price discovery is also being explored.

In Dahej also, we have taken several improvements for reliability and consistent operations, better O&M practices, and CCPP commissioning, which my colleague Mr. Parikh has already outlined.

Thank you. Oh,

can you quantify in terms of how much could be the savings that you see here? See,

quantification is we have not yet signed off with the Kearney. It is under different stage of evaluation, and maybe by next quarter end, we may have a better picture flowing into P&L.

Because they had initially estimated or claiming of about ₹250-₹300 crore saving, no, sir?

That's right, that's right.

Q2 you will get a better idea in terms of savings.

Yeah.

The last question, sir, what is the cash on hand in the books?

Around ₹4,000 cr.

That would all be with I think that financial institution that you must have kept, right?

It's a mix, yes. It's a mix across three things: GSEC, GSFS, and bank.

Sir, what was the capex spent this Q1?

Capex occurred was ₹300 cr in CWIP.

What is the targeted for the full year?

Targeted for the full year is another ₹1,200 to ₹1,500 crore.

Totally ₹1,800 crores, ₹1,500 to ₹1,800 for the full year?

Yes.

Sir.

This will all majority form part of the capital work-in-progress, because except for the CCPP, which is ₹613 crore worth of project, the rest are going to be commercially operational sometime in the mid of 2027. There will be capex, but capitalization will happen only partially this year.

Sir. Thank you very much, sir.

Thank you.

Hello. Am I audible?

Yes, you are audible. Please continue.

Yeah. Thank you for the opportunity.

Sir, my question is which capital expenditure projects would be coming on stream in FY '28 and FY '29, and FY '30 as well?

Gentleman, we have already given investor presentation and that contains timeline for all the projects under execution and also for under consideration.

Right, sir. Sir, what was the capacity utilization overall and of the individual products?

It is a very exhaustive list because we have many products. Some of the production figure I have spoken.

I'll

say that except ANP, acetic, and ethyl, and TDI, which were shut during a part of the quarter, rest all the plants have operated beyond the rated capacity, whether it is ammonia, urea, both weak nitric acid, and CNA is dependent on market sale as well as internal consumptions. Internal consumptions in TDI was low, CNA capacity utilization was less than the design capacity.

Aniline and nitrobenzene were above the design capacity.

Right, sir. Sir, if you can share the capital expenditure amounts for FY '28 and '29?

The total projects on hand are of ₹2,800 crores. Okay?

Over the next two years, around another ₹1,500 crore will also be spent. This is aside from what we undertake freshly, which is under consideration.

Right, sir. Right.

Hope that's it from my side. Thank you.

Thank you so much.

Sir. Thanks for the opportunity again.

Am I audible, sir?

Yes,

you are audible.

Sir. You touched upon that acetic acid, ethyl acetate, and TDI had lower production this quarter.

Has the situation improved currently in terms of let's say either the availability of methanol for acetic acid or let's say acetic acid availability in terms of imports for ethyl acetate production? Also if you can share your thoughts on the TDI part, last year we produced close to around 57,000 tons if I'm not wrong.

How do we see for the balance part of the year in terms of TDI, and if you can share on ethyl acetate and acetic acid, that would be helpful.

Far as ethyl acetate is concerned, the plant was down in last quarter and now the plant is fully operational since 1st of August. It was not operational in July.

Acetic acid was down from 6th of May and now it is operational from 1st of August. TDI Bharuch plant was down in July.

All these three plants, we lost some production because of the downtime and viability issue. Now we are back to normal at our normal rated capacity, and we expect plant to run smoothly till the end of financial year, except any global political war situation going up again and creating the viability issues.

Far as methanol sourcing is concerned, currently we have started sourcing for our captive use for acetic acid production. We manage the customer base with import of acetic acid.

Currently we are not importing because captively we have started producing, and we have run ethyl acetate till the threshold of viability on import acetic acid for some period in quarter one.

Perfect. Sir, second question is on the TGU.

I think last year, if I recollect, we produced close to around 210,000 tons. If I see the run rate this quarter, I think we are close to around 300,000 tons on an annual run rate basis.

What has changed? Because I think you have also explained that there is a government regulation in terms of how much we can produce.

If you can share your thoughts here. Also is it a right understanding that a major portion of our profitability in this quarter was driven by the TGU sales?

I'll first touch upon production part. Production of TGU and NCU, first rule of the game is we are supposed to produce 637,000 minimum of neem coated urea for Department of Fertilizer and fulfill our production target.

Rest is TGU, which has a variable portion during the entire period of operation for product mix optimization.

On your question of profitability from TGU, yes, it is one of the significant contributor as well. Correct, correct.

Can we presume, sir, that this run rate of TGU production, what we have seen this quarter, can it be extrapolated to the rest of the quarters? See, basically

it is our expectation of TGU production to be more or less at the same level as that of last FY.

Okay. Sir, last clarification from my side.

On the WNA and CNA, you shared the production numbers. If you can also share the sales numbers, that would be very helpful, sir.

Thank you so much.

In WNA, we sold around 20,800, and in case of CNA, the same figure was 16,400.

Sir. Thank you so much and wish you all the best.

Good evening, sir. Thank you for taking my question.

Sir, I wanted to understand this ₹2,800 crores of capex that we are doing, I assume this is for the five items that you have under execution presently. Wanted to understand what will be the incremental turnover once this is complete?

Can we answer this question as we go closer to the project completion? Because there is too much of a price differential and volatility as of now.

Attaching a number would not be right that it will increase the revenue by so much and profit by so much.

Understood. A ballpark figure?

Considering where prices are maybe now or maybe where prices were some time back, maybe a range if you could give us?

Okay. Range for the current part or prognosis is difficult to give, but by and large, we foresee the revenue to increase by ₹12 to ₹1500 crore rupees and contribution to improve by around ₹500 to ₹600 crore rupees.

Okay. Got it, sir.

That's very useful. Thank you so much, sir.

Hello.

Yes, Mr. Ashok, please proceed.

Sir, thanks for the opportunity. Hello.

Yes, Mr. Ashok, please proceed.

Sir, thanks for the opportunity.

Yeah. Please go ahead.

Sir, mujhe yeh janna tha sir apna GNFC (n)Code jo apna 20 saal purani company hai, sir apna usko leke kya woh hai future guidance? Aur sir ek aur cheez, woh apan mention nahi karte usko investor presentation mein kabhi bhi.

Hello.

Yes, you are audible. The size is around ₹100 crore as of now.

Okay? Management is working on the plan

Sir.

for increasing the presence in the digitization, AI, etc. Then it is yet in a very formative stage.

If you see there are three segments, the other segment already represents (n)Code, okay, both in terms of turnover and in terms of segment result. As far as the detailed plans are concerned, maybe by end of this year whatever is the finalized situation we will get back to you with those plans.

Okay. Sir, aapne Electromec ke saath bhi ek partnership mein kiya tha, aisa kuch?

We do not recall any such name specifically. From where do you get this name?

LinkedIn, sir. LinkedIn mein Electromec that is mentioned.

It's hard to comment on this kind

Ashok ji, iske

baare mein theek nahi rahega kyunki LinkedIn mein dusre ka profile mein kya likha hua hai uske baare mein GNFC ke officials kuch nahi bol sakte hain. Sir.

Okay. Okay.

Thank you, sir. Thank you.

Thank you. Thank you, Ashok ji.

Hi. This is Rajesh here.

I would like to thank all the participants as well as the senior executives of the company for joining this call. I would also like to express my gratitude to Mr.

Manav, the moderator, as well as the Anurag Services for conducting this conference call. Thank you.

We close this call as of now. Thank you.

Thank you very much.