CHAMBLFERT - Chambal Fertilisers & Chemicals Ltd Share Price

Chambal Fertilisers' management provided an optimistic outlook for the company, highlighting its critical role in India's agricultural sector as the largest private urea producer, contributing about 10% of domestic supply. Key forward-looking points shared include:

1. Union Budget Support: The government allocated INR 1.71 lakh crores to the Department of Fertilizers, enhancing sector stability.

2. Rabi Season Performance: The company noted a favorable agronomic backdrop with a 2.8% year-on-year increase in Rabi sowing to 652.3 lakh hectares, driven by good weather conditions.

3. Product Development and Growth Ambitions: Chambers plans to launch 12 new crop protection products and one specialty nutrient in FY '27, with an increased focus on biological products, including a 31% increase in volumes and a 58% rise in revenue over nine months.

4. Collaboration with TERI: The partnership with The Energy and Resources Institute aims to develop sustainable agricultural solutions, with product launches expected between FY '27-28.

5. Technical Ammonium Nitrate (TAN) Project: The project is progressing well, with completion expected by April 30, 2026. A total expenditure of INR 1,184 crores has been incurred out of an estimated cost of INR 1,645 crores.

6. Financial Performance: For Q3 FY '26, revenue from operations stood at INR 5,898 crores (20% YoY growth), with EBITDA at INR 821 crores (6% increase) and a profit after tax of INR 565 crores (12% YoY growth).

7. CPC and Specialty Nutrients Segment: This segment grew by 30% YoY in the nine-month period, signifying a strong growth trajectory.

The overall positioning reflects solid operational performance and strategic initiatives that are expected to contribute positively in the upcoming quarters.

Q1: When are we going to start the trial run for the TAN plant?
We are just at the cusp. We've started the steam blowing and other pre-commissioning activities. For ANS and Melt, we should be doing that shortly thereafter.

Q2: What would be your expectation from the upcoming NBS policy?
We believe the NBS policy will mostly continue from the past. I don't expect the government to open up the DAP segment much. They have a mechanism that has worked, but complexities around working capital management are acknowledged.

Q3: Any update on profit calculation or cost calculation for G3 post-expiry?
We have raised this issue with the government, but they have not started the necessary exercise yet as they're currently busy with other matters.

Q4: Any updates on investment plans after TAN?
TAN remains a focus area. We're actively pursuing vertical and horizontal expansions, indicating our plans for growth.

Q5: What is the gas cost for the quarter?
The gas cost for the quarter was $14.6 on an NCV basis, per MMBtu.

Q6: Update on the DAP availability?
By April 1, we're expecting about 2.8 million tons, which positions us safely. No immediate panic regarding DAP.

Q7: How much is the net cash and liquid investment right now?
Currently, our net cash and liquid investments stand at about INR 800 crores.

Q8: Update on subsidy dues from the government?
As of the end of December, we had about INR 1,980 crores outstanding. Of this, INR 600 crores is billable, while the rest involves clearance processes.

Q9: What is the expected urea volume growth for FY '26?
Urea volumes typically remain static as we operate beyond 100% capacity. Our focus is on extending our turnaround cycles to improve capacity utilization.

Q10: Can you elaborate on TAN's market dynamics?
The TAN market is growing at a 5%-6% CAGR. We anticipate some mid-term capacity additions and believe that various infrastructure developments will necessitate increased demand.

Please let me know if you need any further information!