CHAMBLFERT - Chambal Fertilisers & Chemicals Ltd Share Price

Major Questions and Detailed Answers from the Q&A Section of the Transcript

Question 1: "Out of Rs. 953 crore of recovery on de-escalation on urea subsidy, which we have shared in your presentation, is there any element of it in P&L as well or everything is in balance sheet only?"

Answer: "We account for subsidy based on income accrued to us, factoring in gas prices and other relevant factors. Any extra or lesser income will not affect the income itself; this is purely a cash flow event."

Question 2: "Based on the current NBS policy, what would be your outlook on your traded volume for H2?"

Answer: "We've contracted quite a bit already for Rabi 2025 despite the late announcement of the policy. We have some stocks of NPK and DAP, and contracted nearly one lakh tons of DAP. Thus, we're well covered for the upcoming season."

Question 3: "So, when are we commencing the trial run for the TAN plant?"

Answer: "We plan to start trial runs in December for nitric acid, proceeding to the next part in January. Revenue recognition should start in Q4."

Question 4: "How sustainable do you see the performance of P&K fertilisers in the second half, and are there any potential policies that could impact this momentum?"

Answer: "Third quarter will carry momentum forward, though Q4 is off-season. There's continuity in policy, but depending on fiscal positions, marketing and stocking plans for the next season will be critical."

Question 5: "Are we doing some trading business, and does this pertain to the complex fertiliser segment?"

Answer: "Yes, we internationally source fertilisers, which we then market. The capital employed has increased due to rising volumes, but it will decrease after we liquidate the stock by December."

Question 6: "Is the increase in capital employed to Rs. 3,000 crore temporary, or will it stay at these levels?"

Answer: "It will decrease as we convert stock to cash, liquidating by the end of December, with possibly some outstanding for subsidies."

Question 7: "Regarding our TAN foray, is this plant expected to break even from the start or will there be initial losses?"

Answer: "We anticipate breaking even quickly due to competent management, but I cannot specify the number of quarters it will take."

Question 8: "What kind of revenue and EBITDA margins can shareholders expect from this TAN?"

Answer: "The plant has a capacity of 240,000 tons per year. Given current ammonia costs, we expect healthy margins, though I won't provide specific numbers."

Question 9: "Any update on energy norms for G1, G2?"

Answer: "Energy norms remain in the low double digits per quarter, as previously communicated."

Question 10: "How were we able to generate strong double-digit growth in the agrochemical portfolio during adverse weather conditions?"

Answer: "We strategically placed products in regions where rains were slightly delayed, allowing us to leverage opportunities even during the extended monsoon season."

Question 11: "How much DAP imports or availability for the Rabi season compared to last year?"

Answer: "DAP imports during the first half were 106% higher than last Kharif, showcasing significant availability for the upcoming Rabi season."

Question 12: "Did we receive a GST notice and what's its status?"

Answer: "Yes, it's regarding subsidy components, which are exempt from GST. We're filing a rectification application, expecting positive results, since the law is clear."

Question 13: "Do we have plans for deploying significant cash generation over the next 1-2 years?"

Answer: "We are developing project lines for capital deployment, ensuring alignment with our business, and looking for projects that provide returns over a stringent screening process."