Shree Pushkar Chemicals & Fertilisers Limited (SHREEPUSHK) Earnings Call Transcript
August 13, 2025
Earnings Call Speaker Segments
Ladies and gentlemen, welcome to Shree Pushkar Chemicals & Fertilisers Limited Q1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Before we begin, I would like to remind all participants that some of the statements or comments made on today's call may be forward-looking in nature. These may include, but are not necessarily limited to, financial projections or other statements of the company's plan, objectives, expectations or intentions. The company disclaims any obligation to update these forward-looking statements to reflect future events or developments. Kindly refer to Slide #15 of the earnings presentation for a detailed disclaimer. I now hand the conference over to Mr. Pankaj Manjani, Company Secretary and Compliance Officer of Shree Pushkar Chemicals & Fertilisers Limited. Thank you, and over to you, sir.
Good afternoon, everyone, and we welcome all the participants to Shree Pushkar Chemicals & Fertilisers Limited Q1 FY 2026 Earnings Call. Joining us today from the management side, we have Mr. Punit Makharia, Chairman and Managing Director; Mr. Deepak Beriwala, Chief Financial Officer. Now I will hand over the call to Mr. Punit Makharia for his opening remarks. Over to you, sir.
Thank you, Pankaj. A very good afternoon to all the friends, and I welcome to Shree Pushkar Chemicals & Fertilisers Limited Q1 FY '26 Earnings Call. I hope you had an opportunity to go through our financial results and investor presentation, which are available on the stock -- on the exchange as well as on our company's website. Friends, joining me today on from the management side is Mr. Deepak Beriwala, our CFO. As we begin FY '26, I'm pleased to report Shree Pushkar Chemicals had a strong start for the year in Q1 FY '26. The company delivered strong performance across both chemical as well as fertilizer segment. Revenues from operations were INR 254.5 crores in Q1 FY '26, reflecting strong growth of 31.1% year-on-year and sequential increase of 16%. This performance was primarily driven by Fertilisers segment, which has been benefited from strong demand in the agriculture sector. Despite some volatility in the chemical market, our continued focus on cost optimization and improved realization has helped to mitigate challenges and maintain strong financial results. Trends. Looking at the industry trends. The demand for the fertilizer has remained positive with agriculture output in key markets continuing to show growth. Fertilizer being an essential part of the farming ecosystem continues to benefit from favorable government policies and initiatives aimed at improving agriculture productivity. Our Fertilisers segment has been particularly strong and volume growth is by 9.4% year-on-year basis and 27.1% on a quarter-on-quarter basis. As we capitalize on rising demand, this has resulted a 33.4% year-on-year and 46.8% quarter-on-quarter increase in revenue for the Fertilisers segment. On the other hand, the Chemicals segment faced some pressure due to fluctuating raw material prices and demand volatility. We saw a decline in sales volume in this segment by 6.9% year-on-year basis. However, we did experience a significant recovery of 48% on a sequential basis. This results our ability to manage short-term market fluctuation effectively and continue to optimize our operations. The recovery in the volume was mainly driven by a favorable shift in product mix and a better realization in this quarter. One of the key operational highlights this quarter was our continued focus on capital expenditures, we have been consistently investing in expanding our manufacturing capacity and improving the overall operational efficiencies across both our business segments. This quarter, our capital expenditure focused on increasing the capacity of both Fertilisers as well as Chemicals division as we look to position ourselves to meet growing market demands more effectively. Our financial discipline remains strong, and we continue to operate with net cash positive position backed by non-lien deposits, which provides us with the flexibility to execute our growth strategy without relying on external debt. As we continue to expand our capacity and product offering, we are confident to deliver consistent and sustainable growth across both Fertilisers as well as Chemicals segments. In addition to our financial performance, I would like to share an important strategic development for the company. During this quarter, the Board of Directors has approved the incorporation of a wholly-owned subsidiary that is Dyecol Color Technologies Private Limited. This subsidiary will act as a marketing arm of Shree Pushkar's dyes and dyes intermediates business. This move is expected to provide several strategic benefits for the company, aligning with our broader business goals and growth strategy. The incorporation of Dyecol Color Technologies allow us to focus more intently on our dyes intermediates business and dyestuffs by separating the marketing function from the manufacturing. This will not only enhance our market reach, but will also allow us to tailor our marketing strategies specifically for this segment. With a dedicated subsidiary, we will be able to improve operational synergies, better streamline our marketing efforts and respond with greater flexibility and agility to the dynamic needs of the market. Furthermore, we remain focused on sustainability and energy self-reliance. We are scaling up our solar capacity with a planned 10-megawatt DC solar project in Nanded complementing with the existing 9.52 megawatt DC solar project at our Ratnagiri plant. In Q1 FY '26, we also initiated to set up 1.1 additional megawatt DC solar plant at our Kisan Phosphates Private Limited facility in Haryana, Hisar for the captive consumption. On the capital expenditure front, we have invested INR 202 crores on a consolidated basis in FY '26, fully funded through internal accruals, primarily towards expanding our Chemicals and Fertilisers business. INR 13 crores of this was incurred in Q1 FY '26 alone. Going forward, CapEx will be directed towards backward and forward integration in the Chemical business and diversification into complementary products in the Fertilisers segment. This initiative will scale up our production capacity, improve our operational efficiencies and strengthen our cost competitiveness. With these developments, I continue to maintain a disciplined financial approach while positioning our long-term growth. Friends, now I hand over this call to Mr. Deepak Beriwala, our CFO, who will take you through the detailed financial performance for this quarter. Over to you, Deepak.
Thank you, sir. Good afternoon, everyone, and thank you for joining us today. I will now take you through the financial performance of the company for Q1 FY '26. Starting with the top line, we reported a revenue from operations of INR 254.5 crores, which represents a growth of 31.1% on a year-on-year basis and 16% on a quarter-on-quarter basis. This increase was driven primarily by the Fertilisers segment, which showed a strong volume growth of 9.4% year-on-year and 27.1% on quarter-on-quarter basis. This further resulted in a revenue growth of 33.4% year-on-year and 46.8% on quarter-on-quarter in the Fertilisers segment. On the Chemicals side, while volumes declined by 6.9% year-on-year, there was a notable recovery of 48% on the quarter-on-quarter basis. This performance highlights the seasonal fluctuation in the chemical markets and our ability to navigate those fluctuations. Despite the decline in the volume, revenue from the Chemicals segment increased by 28.4% year-on-year driven by the better realization, although it showed a 6.8% decline on the quarter-on-quarter basis. Moving to the margin. The gross profit for the quarter stood INR 83.9 crores, marking a 25.7% increase from Q1 FY '25. The gross profit was 33.0% in Q1 FY '26 compared to 34.4% in Q1 FY '25 and 38.8% in the Q4 FY '25. EBITDA for the quarter grew by 64% year-on-year and 17.9% quarter-on-quarter to INR 29.1 crores with the EBITDA margin expanded to 11.4%, up from 9.1% in Q1 FY '25. This growth was driven by the favorable product mix, particularly in the fertilizer segment as well our focus on the improving operational efficiency. Profit after tax for Q1 FY '26 came in to INR 21 crores, making -- marking a 63.2% increase year-on-year and 26.7% sequential increase. The PAT margin for the quarter was 8.2%, up from 7.5% in the Q1 FY '25. In terms of the volume, the total sales volume for the quarter was 91,125 metric ton which is 6.4% year-on-year and a 30.1% improvement on sequential basis. The strong growth in the Fertilisers segment both year-on-year and sequential basis was the driver of the overall revenue growth. Turning to the [indiscernible] the company remains in a strong liquidity position with INR 112 crores in the non-lien deposits. These deposits continue to provide us with the financial flexibility required to fund our growth initiatives without any external debt. To summarize, Q1 FY '26 was a strong quarter for the Shree Pushkar with a strong growth in both revenue and profitability. Our strategic focus on enhancing operational efficiency, expanding capacity and maintain disciplined financial management continues to support our growth trajectory. We are confident that we will contribute -- continue to deliver sustained and profitable growth in the coming quarters. With that, I will now open the floor for questions. Thank you.
[Operator Instructions] First question is from the line of Aditya Sen from Findoc.
Congratulations on great set of numbers. Sir, my first question is that we see there is a minor dip in the volume of Chemicals business Y-o-Y, but the revenue has increased by 28%. So is it because of the change in the product mix? And is that the number sustainable? The realization growth, is that sustainable?
Thanks, Aditya. Because this is mainly because the volumes have dipped, but the value has gone up. As I mentioned in my last, this con call also, that we have started looking at improvement into the volumes of the -- this Chemicals business also. I mean slowly and gradually, business has started pumping in. Now recently, after even this America tariff also, we see that this overseas market will generate a better business than before. So in my opinion, in future, the Chemicals business is going to get more better results in this operational efficiencies.
Okay. That's great to hear. And the second question is what is the status of Unit 6 and Unit 5? When are we expecting to commission both of them?
Sir, Unit 5, we have already completed the CapEx almost. And we have already started the trial runs for Unit 5, and hopefully, we will be announcing the commercial production of Unit 5 in one or two months or so. We are only waiting for our electricity, this connection load enhancement, which we are expected to get somewhere by the end of August or maybe later by September. As soon as we get our electricity enhancement sanctioned, we will immediately start the commercial production of our Unit 5. And then we will announce the completion of Unit 5 expansion. As of now, we are in the trial mode of Unit 5. Now as far as Unit 6 is concerned, Aditya, we -- hopefully, we plan to start our trials by the December. And we think that by December '25, we should be in a situation to start the dry trials. And January, February, March of this financial year, we are giving it as a trial and the stabilization of the plant and the quality. And we are quite hopeful that for the next financial year, starting from the season -- the first season of the next financial year, we should be able to penetrate into the market.
Okay. Perfect. And just the last question for the time being. Can you please share the capacity utilization of KPPL and MBPPL, if possible?
You're talking about this particular quarter 1.
70%.
Yes, quarter 1.
It's almost 70% of it.
Both the subsidiaries?
Both, yes, both the subsidiaries.
Next question is from the line of Harshil Solanki from Equitree Capital.
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[Foreign Language] They already had their two plants operating. One in Sagar, another in Meghnagar. [Foreign Language] Those will lose their focus. Wherein the domestic supply will increase their focus. [Foreign Language] Import of the fertilizers is reducing every month by month. [Foreign Language] If there is a huge space for all the players in the market still there is a big gap into the demand and supply. Only such the issue is that the supply will be shifted from the international market to the domestic market.
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Totally.
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[Foreign Language] Whatever we're working upon we're -- we already have our water soluble plant which we've already started recently, right? If you see in our earlier to earlier PPT there we already had a water soluble plant that we've already started that's the specialty fertilizers we're working upon that. And as far as [Foreign Language] that will create a future opportunity for the players like Shree Pushkar in future.
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[Foreign Language] Once this picks up and...
[Foreign Language] We need to complete these two capacities. And we'll go in a proper sustainable manner doing this one by one. Now we've got a lot things in our platter to handle these two new expansions. Let us have some consolidation after completing these two new facilities.
Next question is from the line of Ritesh Gandhi from Discover Capital. As there is no response from the current questioner, we'll move to the next question from the line of Kush Bafna from Bafna Brothers Financial and Property Agent.
Congratulations on a great set of numbers. I just had a couple of general questions. First was that there's a lot of talk about the U.S.A. increased tariffs and the effects on the textile sector. And considering the dyes segment, I wanted to know how you're thinking is going to mitigate this.
Sir, first of all [Foreign Language] in terms of the total sales revenue of the company, dyes is not a major contributor, right? Secondly, in India, they have increased the duties, whereas in other markets where the company supplies like in Bangladesh and Vietnam, and Turkey, the duty is much reduced. In India as well as we don't have a major market share of dyestuffs. So I don't think that there is going to be a significant impact on these duty structures input by America. Because majority of business we already have in Dhaka in Bangladesh and Vietnam. And we do have some long-term contracts with certain multinationals. Those multinationals have nothing to do with the India market versus the U.S. market.
Right, right. And one more thing was, sir, if you see the public shareholding of a company, there's not much of FII or DII investment. Are you planning any investor meet in the foreseeable future to get some institutions on board as well?
Definitely, we are working upon that. Before we started off this con call, we were discussing with our IR to let us make a sound plan for some more visibility and getting some big investors into this thing. And we're working upon the same. We have a similar thought process.
Next question is from the line of Saket Kapoor from Kapoor & Co.
Firstly, as the earlier speaker was mentioning about institutional interest in the organization, sir, although it is not worthy to mention, but today, the market cap of the our listed company, Shree Pushkar was down closer to 16%, 17% even after posting a good set of numbers for this quarter. So the lack of institutional support or this has what's still today, sir. This was only just to add to what the earlier participant was speaking to.
Sir, I agree with this opinion, Kapoor saab, and that is what we were discussing before the starting of this con call. And surely, we'll be working upon that direction in jointly with our IR also. We understand this in spite of giving a good set of numbers the company achieved. Still I think this is the first time I have seen that it is down by 15%. I've never seen. So, I really myself don't know the surprise for me. Rather I see it as a good opportunity. Let me put it like this.
How sir? Come again.
Rather I will see it as again an opportunity.
Correct, sir. Correct, sir. Sir, definitely. [Foreign Language] So taking into account [Foreign Language]
[Foreign Language] Quarter 1 is always the lean period. If you go on a year-on-year quarter 1 '24, '25 in that year it was INR 191 crores. [Foreign Language] We started from 5.2% journey to 7.26% journey. Now again as improvement of almost 1%. Let us hope for the better improvement in coming few years also.
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Okay. PAT margin of 8.5% to 9%.
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[Foreign Language] They are changing that transformer. [Foreign Language]
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[Foreign Language] Because these two plants will be fully operative. [Foreign Language] In my opinion, I'm giving three more months to Unit 6 also for the stabilization phase. I'm taking from April '26 onwards to March '27, we should be having Unit 6 also fully operational and Unit 5 part-expansion also fully operational. All the availability of required infrastructure will be fully available to us.
[Foreign Language] That is the product profile. [Foreign Language] And these are not one-off in the segment. [Foreign Language]
[Foreign Language] Buying pattern of the people have bit changed, has bit delayed because of the geopolitical situations which are quite unstable as you all see the global market better than us. You might have a better visibility and clarity of the global situation. [Foreign Language] Otherwise I don't see that there is a major any such [Foreign Language] This should be stable and sustainable. [Foreign Language] Let us believe in the business whatever we do. This is what I'm saying.
Sir we're reporting the volumes. We're reporting revenue mix. [Foreign Language]
[Foreign Language] Being an integrated business model, practically -- theoretically, yes there are ways and means of doing so but practically if you go there are no proper systems [Foreign Language] We ourselves are not satisfied with that kind of a formula. And because how to present any misleading or any wrong kind of statements or datas they might mislead.
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[Foreign Language] So why don't you explain him whatever you're talking to me.
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Sir, we'll explain you about this.
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[Foreign Language] And we use that acid from. And acid being the low value item, right? So when you see the quantity jump from INR 10 to INR 15, INR 15 to INR 10 and then you see the value, your value is not that large because it's a low price product. [Foreign Language]
But I think the sulfuric acid prices have moved up significantly. [Foreign Language]
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[Foreign Language] Come again, sir. Sir, can you repeat your statement once again. I was telling that sulfuric acid realizations [Foreign Language] prices have moved up on the higher side.
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You mentioned sulfuric acid as INR 10 or some number you shared, so I was just alluding to the price that sulfuric acid prices moved up significantly over the last few quarters. So their contribution to the top line and the bottom line should be greater. That is what my understanding was.
[Foreign Language] We'll have a one-to-one discussion for a better clarity.
[Operator Instructions] Next question is from the line of Preet Nagarsheth from Wealth Financial Advisors.
Great numbers. I just joined in, I'm traveling actually. I couldn't follow up on some of the earlier questions or things you may have said. Sir, firstly I wanted to understand [Foreign Language]
[Foreign Language] for better understanding so that I can address your question.
Sure, sure. [Foreign Language] in terms of volumes and value in last quarter. Because China had stopped the exporting urea. [Foreign Language]
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[Foreign Language] So there are these -- all the various companies reported extra volume just because of this element that came in. [Foreign Language]
[Foreign Language] To the best of my capacity and capability [Foreign Language] Short time ban. Later on they started, they lifted the ban also for few products. Now let me tell you, as of now, there is a global issue in the phosphatic fertilizers sector. [Foreign Language] Globally, there is a heavy shortage of nitrogen-based phosphates -- of the nitrogen-based fertilizers as well as on the phosphatic-based fertilizers also. If you look at the volumes of the import in India, whether it is from China or other countries, it has reduced to a great level. Therefore, the Government of India is giving more focus on this Atmanirbhar formula. Therefore [Foreign Language] They are trying to increase the domestic capability of the production. [Foreign Language] India has started it's initiative on the green hydrogen. [Foreign Language] And let us understand one thing that the fertilizer requirement cannot be reduced. We have to have our self-reliance, self-dependency on this fertilizer. [Foreign Language] On these signs of thought process is, on these kind of formulas we cannot run our business. I always say again and again that in our -- stable and sustainable. [Foreign Language] This is a total theory of going in a -- this domestic -- this availability. So I personally don't see. [Foreign Language] All over India. In the media also there is a huge shortage going on. We'll clearly say -- tells that there is a huge opportunity also lies.
[Foreign Language] That itself will further increase our fertilizer sector volume months ahead.
Yes. That's right.
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[Foreign Language] This will grow as and how the volumes and the revenue has been grow. [Foreign Language] Then next year you'll be having a volume of close to INR 1,500 crores then you can multiply the PAT levels on to that.
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[Foreign Language] So you don't expect. [Foreign Language] We're building a new facility, new capacity. So we're having expenses also accordingly of the new infrastructure. We're not -- see, listen you're not optimizing your production facility. [Foreign Language] Just addition of a one balancing equipment. It does not like that. [Foreign Language]
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I think, sir, it should be around INR 60 crore approximately.
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Correct, sir. [Foreign Language]
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[Foreign Language] But sorry for repeating the question. [Foreign Language]
[Foreign Language] That is very minuscule amount which we have.
[Foreign Language] Should we expect then each one of them to be better than at least quarter 1. Is that a fair assessment on our side?
[Foreign Language] Let us see. [Foreign Language]
[Foreign Language] Because of some reason. Now the question that like no silver bullet, I would want to understand is the sustainability of it, right? [Foreign Language]
I think you're outside the question.
Next question is from the line of [ Sudhir Devda from Balaji ]
Congrats on quarter 1. It was absolutely excellent and I want to congratulate you and the team for it. I have one follow-up question to something somebody asked earlier and you were talking about a global shortage in phosphatic fertilizer, nitrogen as well as phosphatic fertilizers. Could you please help me understand the reason behind this shortage? Because my understanding is that certain countries had reduced their exports for political reasons. So is that incorrect? Like China has reduced the exports politically. Is that incorrect? Or is there some other reason why there's been a global shortage of these products?
Sudhir, if you ask me very honestly, this is a mixture of everything, right? It's a political scenario also and this lot of turbulence going this politically in between a few countries. So things are quite disturbed. And very honestly, Sudhir, what I personally feel is that I can share my opinion. But honestly, I also don't have that much of data or that much of in-depth correct knowledge. Whatever we hear, whatever we see, whatever we talk, whatever we read, based upon all our this intelligence, we form our thoughts, our views, not necessary that, that thoughts and those views are 100% correct and to the reality, right? First of all, I believe you will agree with me on this point, right? But in looking at in all this scenario, I see that now India is say trying to help to have self-dependency on the fertilizer sector and which is the government is discouraging DAP, government is encouraging now other available phosphatic fertilizers, the substitute of DAP is SSP only like the government has introduced now SSP urea also, which is a low-grade DAP, you can call in this another way, like dependency on ammonia on external side, like this now Solar Energy Corporation of India is also floating a tender for production of in-house ammonia, which will help and support this urea production in India, which will support NPK and this complex and DAP production in India. So this is a long-term strategy and government what they are looking in future. Plus the kind of fertilizer bill Government of India is having, they're also trying to reduce this fertilizer bill. So this is a long-term strategy. So in my opinion, whatever is going is good for Indian industries who have a large home consumption. And in future, if you will ask me that still in spite of $870 or so the DAP price, government is not buying DAP. Government is not allowing anyone to easily get DAP because [Foreign Language] INR 1,350 for one bag and the subsidy is close to INR 20, INR 21 or so. Still it is not viable. In my opinion, if you ask me, I see a long-term good future for the integrated manufacturers of these products in India.
Right, sir. Is it likely that the realization that we are benefiting from because of the shortage in the global market, that realization has been elevated. Is that correct?
No, no, no. See, it is not like a shortage or something like this. It is rather that import market is the import products are slowly and gradually substituted by the domestic production. I would rather put it like this.
Okay. So I guess where I'm trying to go is I'm just trying to understand what could change at a global level politically or if any trade relations open with India, China or other countries, would that change anything, in terms of business when you devise a business plan or NPA, NPK [Foreign Language] You must have planned and built from your own assumptions about the long term...
[Foreign Language] Karnataka, Chhattisgarh, and Madhya Pradesh where we're having their marketing strengths also. [Foreign Language] I don't see any big issues into that, sir. And we're fully confident to achieving these numbers. You know that we're bit [Foreign Language].
Sir, therefore I fully understand this point. My only question is that if any of the global factors change would that change the realization that we would achieve or the margin that we would achieve if supply start to improve from other parts of the world. That's all.
[Foreign Language] Same like India. So, same like India. [Foreign Language]
Next question is from the line of [ Purushottam from Wise Old Bot Limited ].
This is Purushottam. Sir, congrats on a good set of numbers. So I think I basically had the same question, so which you already answered about China, China has got approval to start the fertilizer also they have started importing again to India. So yesterday, I was reading that news about the China has opened the fertilizers for India. So I was seeing what is the impact? You already answered that there would be not much impact due to that because we have -- the demand is very high.
Yes, yes, yes. There's a huge gap in the demand and supply as of now.
Okay, sir. And one more question I have, sir, how is the Bangladesh, sir, you have last quarter also, you told that things are -- if Bangladesh is having trouble, we have other contained markets like Vietnam and all. So now how is the situation? So...
What is the problem in Bangladesh, sir?
No. See, the business got affected because of the India and Bangladesh relationship.
So who says business got affected.
No, we were anticipating.
Don't do anticipation. No, no.
Media anticipation. So it is the media anticipation, but...
There's no issues in Bangladesh. [Foreign Language] They were having a disturbance. It doesn't mean that they will always remain in disturbance.
Okay. So now things are back to normal, right, sir?
Right, sir.
Ladies and gentlemen, we will take this as the last question for the day. I would now like to hand the conference over to the management for the closing comments.
Thank you, everyone, for joining us Q1 FY '26 earnings call. If you have any further questions, please feel free to contact with our Investor Relations adviser, Churchgate Partners, and we will be happy to address your queries. Thank you very much.
Thank you, sir. On behalf of Shree Pushkar Chemicals & Fertilisers Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.
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