Chambal Fertilisers & Chemicals Ltd (CHAMBLFERT) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (Valorem Advisors): Ladies and gentlemen, good day, and welcome to the Chambal Fertilisers and Chemicals Limited Q2 and H1 FY '27 earnings conference call, hosted by Valorem Advisors. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Purvangi Jain from Valorem Advisors. Thank you, and over to you, ma'am.
Purvangi Jain (Valorem Advisors): Thank you. Good morning, everyone, and a very warm welcome to you all. My name is Purvangi Jain from Valorem Advisors. We represent the investor relations of Chambal Fertilisers and Chemicals Limited. On behalf of the company, I'd like to thank you all for participating in today's earnings call for the second quarter and first half of the financial year 2027. Before we begin, let me mention a quick cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of
Purvangi Jain (Valorem Advisors): The earnings call is purely to educate and bring awareness about the company's fundamental business and financial period under review. Now, let me introduce you to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Abhay Baijal, Managing Director; Mr. Narendra Goyal, Business Head of Manufacturing Operations; Mr. Anuj Jain, Chief Financial Officer; Mr. Ashish Shrivastava, VP of Sales and Marketing; and Mr. Vivek Mishra, Business Head of TAN. Without any delay, I request Mr. Abhay Baijal to start with his opening remarks. Thank you, and over to you, sir.
Abhay Baijal (Chambal Fertilisers & Chemicals Ltd): Good morning everyone and thank you for joining us on the conference call to discuss Chambal Fertilisers' performance for the second quarter and first half of the financial year 2027. The Indian fertilizer industry continued to navigate a challenging operating environment during the second quarter of the financial year 2027 with geopolitical uncertainties, elevated input costs, and uneven weather conditions across key agricultural markets. Geopolitical tensions, especially in West Asia, continued to put pressure on global supply chains, keeping energy-linked inputs, key raw materials, and freight costs elevated. Weather conditions also remained a key factor influencing agriculture activity during the quarter. The impact of El Nino and prolonged dry spells across several regions affected crop planting and application windows in various agricultural markets. In India, uneven rainfall throughout the Kharif season created challenges for agricultural input demand with the country recording a 12.6 rainfall deficit during the June and September period. Global conditions for raw materials and finished fertilizers remain volatile and choppy. The impact that it has had on domestic fertilizer demand will depend on crop realizations, regional agriculture conditions, and affordability of farm inputs. The government of India has played and continues to play an important role in ensuring the availability of fertilizers and supporting the sector. We also remain focused on maintaining adequate product availability and ensuring efficient distribution to meet the requirements of farmers across our markets. We shall continue to monitor movement in global raw material prices, subsidy-related developments, and timely disbursement of subsidies given their implications for procurement costs and working capital. A key policy development during the previous quarter was the government approval of the National Investment Policy for Urea 2026. The policy provides a framework for future investments in domestic urea capacity and supports India's objective of strengthening self-sufficiency in fertilizer production. We continue to undertake preparatory activities for a potential fourth urea plant with investment decisions subject to government approvals, project economics, and approval by our board. Turning to our operational performance during the quarter, our urea business recorded production of 9.13 lakh metric ton and sales volume of 8.8 lakh metric tons. Our complex fertilizer business recorded sales volume of 3.04 lakh metric ton during the quarter, supported by procurement and distribution capabilities. We continue to focus on product availability and strengthening our portfolio to address the evolving nutritional requirements of farmers with plans to introduce new NPK grades in the future. Our crop protection chemicals, specialty nutrients, and seeds business recorded a revenue of 325 crores during the quarter. We continue to focus on expanding our product portfolio and strengthening our presence across three categories having launched 13 products in the first half of financial year 2027 out of 14 products planned for FY '27. We also introduced new-age products across the herbicide, fungicide, and insecticide categories in Q2 while maintaining performance despite adverse agro-climatic conditions in certain territories. The biological business continues to strengthen and witnessed growth in both volume and revenue. Additionally, we strengthened our biostimulant portfolio with the launch
Abhay Baijal (Chambal Fertilisers & Chemicals Ltd): of Uttam Aeris Cold in Q1 and Uttam Fertilis in Q2 in partnership with Nutrien. Our Biologicals business continued to witness continuous growth in volumes and revenues driven by increasing farmer acceptance and sustainable crop solutions. We partnered with TERI to establish CFCL TERI Centre of Excellence for Advanced and Sustainable Agri- Agricultural Solutions, which will focus on research and development of new next-generation agricultural technologies. I would like to point out there's exciting development in terms of the plans to introduce 10 new products, where IP rights shall be jointly owned between CFCL and TERI and Chambal will have exclusive commercial rights globally on these products. Out of these 10 products, five products will be launched in FY '28 '29 and data generation for registration have been initiated through ICAR and universities. The said products will leverage our market capabilities in horticulture, spices, cereals, sugar cane, cotton crop. The rest of the five products are planned to be launched in FY 2030 and '31. Our seed-to-harvest programs continue to contribute towards improving farmer awareness and showcase product efficacy. During the quarter, Chambal conducted over 2,800 farmer meetings and crop seminars. We also laid 3,600 demonstration of CPC SN products to show farm results with the concept of seeing is believing. We have analyzed more than 38,000 soil samples. We also significantly expanded our use of social media to reach out to a large number of stakeholders with both Facebook, YouTube, and Instagram platforms crossing 4.27 crore views. We have also partnered with progressive farmers as influencers to motivate other farmers to adapt modern practices. Our technical ammonium nitrate project started commercial production during the quarter with high-density ammonium nitrate plant and has progressed well. Weak nitric acid and ammonium nitrate solutions are up operating at optimum levels, while HDAN is being ramped up. Product quality has also been well accepted by explosives manufacturers. Our joint venture, IMACID, regumed- resumed production during the quarter at lower capacity. Performance was influenced by the availability and pricing of sulfur and other operating conditions. We continue to monitor the global sulfur market and its impact on joint venture's profitability. Finally, let me take you through the financial performance of the period under review. On a stand-alone basis, revenue from operations grew 9% year-on-year to INR 7,000 crores in Q2 5 FY '27, up from INR 6,413 crores in the corresponding quarter of last year. EBITDA stood at INR 901 crores with a margin of 12.87%, while profit after tax increased 6% year-on-year to INR 635 crores. During the first half of the financial year, revenue from operations stood at 12,027 crores. EBITDA grew 9% to 1,752 crores with EBITDA margin expanding by 133 basis points. Profit after tax increased 8% to 1,338 crores, while PAT margin expanded by 89 basis points. On a consolidated basis, revenue from operations grew 9% year-on-year to 7,000 crores, up from 6,413 crores in corresponding quarter last year. EBITDA at 900 crores with margin of 12.87%. Profit after tax was 632 crores with a PAT margin of 9.0- during 9.03%. During the first half of the financial year, consolidated revenue from operations stood at INR 12,027 crores. EBITDA grew 9% to 1,752 crores, EBITDA margin expanding by 133 basis points. Profit after tax stood at 1,156 crores. On subsidy flows, we received subsidy of approximately 3,300 crores during the quarter. As at 30th September '26, the total receivables stood at 4,818 crores, comprising market debtors of 661 crores and subsidy receivables of 4,157 crores. Coming to segmental performance, our Urea segment reported revenue of 4,629 crores during this quarter, compared to 1 3,317 crores in corresponding period last year. Segment EBIT stood at 668 crores with margin that 14.4
Abhay Baijal (Chambal Fertilisers & Chemicals Ltd): %. In the complex fertilizer segment, revenue stood at 1978 crores compared to 2721 crores in the corresponding quarter. Segment EBIT was INR 78 crores with margins at 3.97%. The crop protection chemicals specialty nutrients and seeds segment recorded revenue of 325 crores during the quarter compared to 374 crores in the corresponding period. Segment EBIT stood at 87 crores with margins of 26.76%. The technical ammonium nitrate segment recorded revenue of 67 crores during the quarter. Segment EBIT stood at 12 crores with margin of 17.97 crores. Overall, the first half of FY 2027 reflects our continued focus on operational efficiency, prudent procurement, and disciplined management of our businesses amid challenging environments. Looking ahead, our operating performance and environment will remain influenced by geopolitical developments, global raw material prices, and weather conditions. The commencement and ramp-up of our technical ammonium nitrate project and continued development of value-added businesses and potential for future urea capacity expansion under the National Investment Policy provide opportunities to strengthen our business profile. We remain focused on operational efficiency, capital allocation, and sustainable value creation for our stakeholders. With this, I would like it hand handed back to the moderator and open the floor for questions and answers. Thank you, sir.
Moderator (Valorem Advisors): Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions, may please press star and one on their touch-tone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. You may please press star and one to ask questions.
Moderator (Valorem Advisors): We'll take the first question from the line of Sarthak Jain, an individual investor. Please go ahead.
Sarthak Jain: Hello?
Moderator (Valorem Advisors): Yes, sir. You're audible.
Sarthak Jain: Yeah, good morning, sir. Thank you for the opportunity. I just have a couple of questions. Firstly, let our our EBITDA margin held at 12.1%, despite higher input cost and industry headwinds. So, which segment absorbed the pressure, which offset it?
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