Ladies and gentlemen, good day, and welcome to Paradeep Phosphates Q3 FY23 Earnings Conference Call, hosted by ICICI Securities. 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 the 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 Mr. Aniruddha Joshi from ICICI Securities. Thank you, and over to you, sir. Yeah, thanks, Lizan. On behalf of ICICI Securities, we welcome you all to Q3 FY23 Results Conference Call of Paradeep Phosphates. We have with us senior management, represented by Mr. Suresh Krishnan, Managing Director, and Mr. Sabaleel Nandy, President and Chief Operating Officer. Now, I hand over the call to the management for initial comments on the quarterly performance, as well as 9-month performance, and then we will open the floor for question and answer session. Thanks, and over to you, sir. Good afternoon, everyone, and welcome to the Q3 FY 2023 Earnings Call of Paradeep Phosphates. At the outset, let me wish all of you a Happy New Year. This is our first call in the year 2023, and I hope and I'm sure that all of you are staying safe and healthy. We have already circulated our earnings presentation, which is available on our website as well as stock exchange websites. I hope you all have had opportunity to go through the presentation, and we would be happy to take any questions afterwards. The fertilizer industry, as you know, in India, has seen significant growth in the recent years, driven by the increased demand for food, a good support from the government, rising awareness of benefits of fertilizer and all major nutrients, including phosphatic, and the expansion in the industry. The government initiatives on subsidies and incentives to make farmers, fertilizers more affordable to farmers, has further led to the growth of the industry. We are pleased to report another robust quarter with our highest quarterly revenue from operation of INR 4,398 crores, an increase of 62% year-on-year, and 54% on sequential basis. The growth was primarily driven by efficient capacity utilization, successful stabilization of Goa, of plant, given our strong supply side linkages, notwithstanding a volatile global macro environment. In Q3 FY 2023, we registered strong improvements in EBITDA and margins as well. The EBITDA for the quarter stood at INR 3,773 million, registering a year-on-year growth of 76%. Our profit after tax stood at INR 1,803 million, compared to INR 1,277 million in the same quarter last year, registering a year-on-year growth of 41.2%. The margins during the quarter were partially impacted by higher depreciation charges, along an increase in finance costs resulting from subsidies, currency instability, and slightly higher long-term borrowings compared to the previous year. The EBITDA margin for Q3 FY 2023 was at INR 5,995 million, as compared to INR 4,425 million the same quarter last year. Total fertilizer production during the quarter was 621,815 metric ton, registering an increase of 66% on year-on-year basis. We are happy to report that we have fully stabilized the Goa operations, and the plant has been steadily producing both urea and phosphatic fertilizers. We have been able to produce 261,550 tons of finished fertilizer this quarter at our Goa plant, with several NPK grades like N10, N14, N19, N20 and N24, and 124,271 metric tons of urea. On the Paradip plant, we have successfully completed the revamp of all the granulation trains. As you know, we have four granulation trains running since 2, and they have been running since November 2022, and we have achieved a daily average production run rate of 5,000 metric tons from December 2022 onwards. This has allowed us to meet our revamp targets, and we're eager to continue the steady rate of production at both our plants aligned to the market need with the right product mix. To further enhance our earning potential, we have embarked on two brownfield backward integration projects, first of which will increase our phosphoric acid capacity by 200,000 tons by Q1 of FY 2024. The second is to increase our sulfuric acid capacity from 1.4 million tons per annum to 2 million tons per annum, which will initially enable us to generate captive power. At a macroeconomic level, the outlook remains positive, with prices correcting and global markets improving post China's opening up. We are confident that our strong financial results and developments will position us well for continued growth in the future. These are our initial thoughts, and the details have already been provided in our presentation, and we will be happy to take any questions from your end. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. If you want to ask a question, maybe press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Darshita from Antique Stock Broking. Please go ahead. Hi, thank you for the opportunity. What would be the capacity utilization for 3QFY 23 as well as 3QFY 22? Hello, am I audible? Yeah, before your question, as far as FY 2023 is concerned, both in Goa and in Paradip, we are, we are close to working at 95%, and the 5% gap is largely due to the fact that we were stabilizing the plants post our revamps. And as far as FY 2022 was concerned, the last year, Paradip was operating as it is in its full capacity. And as far as Goa is concerned, we were not running that plant then, so we don't have a comparable number. Right. Yeah, that, that's okay. So, what I wanted to understand was if the capacity utilization was largely the same, what is fueling the 66% volume growth? So as you look at it, yeah, no, as far as fertilizer- Due to... Yeah, go ahead. Yeah, sorry. Go ahead. No, no, I just wanted to understand, is it largely due to the market share gain? Have we probably entered into other regions that we were not covering back then? That is what I'm trying to understand. Ma'am, you need to understand that last year we were running only Paradip. This year we are running Paradip and Goa together, and Goa has added 261,000 tons additional to the overall, volumes that we have. So that's one of the, that's one primary reason that we get to see. The second reason for the growth is also given the fact that fertilizer prices have gone up, the input prices have gone up, and hence the overall market realization has gone up as the fertilizer is concerned. So it's a price increase and a volume increase, both adding up to the overall increase in revenue. Right. No, I think in your press release, we had mentioned there's a 66% volume growth, so that is what I was referring to, not the- Yeah. Overall top line growth. No, the 66% volume growth, which is coming primarily from Goa volume of 261,000 tons, which we didn't have last year. Right. Okay. I mean, with respect to market share, if you could give any data, what was the market share right now versus back in 3Q FY22? You know, For Paradip specifically, even that's okay. Yeah. Under normal circumstances, this question would have been relevant, but in the circumstance where the Goa plant was acquired by PPL on first of June 2022, this question is not quite relevant. But at a national level, PPL as an entity would be looking or aspiring to around 12%-13% market share of fertilizers on an aggregate level. Okay. Okay, all right. Also, could you provide the sales volume numbers for manufactured and what, you know, what would be trade days? And also for that- Pretty much everything is manufactured. Pretty much everything is manufactured. We didn't trade. Okay. Okay, and sales for DAP, NPK and urea. I, I think the ones that you've provided are manufactured volumes. Yeah. So I'll tell you, if you are talking of the numbers, for the April to December or the quarter, the total sales figure for DAP is around 193,000, for NPK is 171,000. This is for the quarter. For the YTD, which is April, December, the same numbers are 408 and 554. These are for Paradip. For Goa, the numbers would be 247 total for the quarter, and for the year it's 426- Okay, and the- Thousand. These are all just, thousand. Right. 426,000. The same for 3QFY 22. No, no. 3QFY 20- FY 2022, last year, same quarter. FY 2022, Goa obviously is not relevant. Yeah. As far as Paradip is concerned, it is 1084. Split between DAP and NPK? 669 is DAP, 400 is NPK. All right. Okay. Thank you so much for the opportunity. Congratulations on this set of numbers. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is on the line of Vihang Subramanian from Zaaba Capital. Please go ahead. Hi, sir. Congratulations on the good set of numbers, and thank you for the opportunity. Could you provide what is the gross debt, cash on hand and subsidy receivables outstanding as of 3Q? Okay. Anything else? Yeah, that, that'll be my first question, and then I'll follow up with a couple. Okay. You know, when for fertilizer operations, as we have been maintaining in the earlier calls, we look at long-term debt as the main debt. The working capital debt continues to fluctuate. The long-term debt for us is around INR 700 and- Thirty. INR 33 crore. And put together it's- No, the total debt, sir. The total debt... I want the total gross debt and the cash on hand that we have. Trying to understand what's the net debt and what's the subsidiary receivables outstanding. No, we have a total debt of INR 4,298 crore as on December 2, 2022. And the- INR 4,298 crore. Yeah. Out of which, the long-term debt is INR 713 crore, and the short-term working capital debt is INR 3,585 crores. Subsidy receivable is INR 3,457 crores. Inventories are INR 2,812 crores. Yeah. So the INR 4,298 is gross debt, right? Yes. What would be the cash on hand that we have? We, I mean, we primarily have a large limit available from the working capital consortium, and the limits available, which we can draw upon today, is over INR 1,500 crore. No, I mean, the cash on the balance sheet, sir. No, no, we're not showing. As you know that we have, we have borrowed. We're not really showing any surplus cash or invested cash in the balance sheet, and all the cash has been utilized to pay down the working capital, cash-based facilities. Net debt is broadly around INR 4,300. It's the same number, and we have borrowing limits available and drawing power available, and that number is over INR 1,000 crore. Got it. And, sir, I really thought that the net debt should have come down more quarter on quarter, right? Given that we like, almost got like around INR 2,000 crore or so of, you know, subsidy payments from the government. So any thoughts on why it didn't come down? No, it is very good. Look, the way it works is, the debt comes down because primary composition of the debt, as we said, the long-term debt is only INR 713 crore. The primary composition of the debt is biased towards the working capital, which is because of subsidy receivables of INR 3,500 crore. The subsidy receivables, as you know, the way it works is the government pays the companies within 15 days of the sale happening. End of December number is not the right number to look at because Rabi has just started or had just started around that time. If the same number were to be looked at end of February or so, the numbers end of January or so, the numbers come down. Just to give you a feel, I mean, we have had a good run in terms of subsidy received from the government. During this quarter, we got INR 1,500 crores of subsidy, and the total subsidy that we received over the nine-month period is INR 2,885 crores. Our market collections have been very robust right through. We got 1,500, you said, right? From the- Yes, INR 1,500 crore during this quarter, yeah. Got it. So, given you mentioned about February, right? Like, any guidance on what would be the net debt number by year-end? Well, I think the way we look at it is, you know, we are looking at a long-term debt, as we have been, giving this guidance for a long time, is expected to be around INR 1,000 crore for us, because by this time, we would have kind of completed all our projects. As far as working capital debt is concerned, which is the cash borrowing that we will do from the banking system, is not expected to increase over INR 1,000 crore. That's the kind of number that we've always planned for, and that's the kind of indication that we are getting. The rest of it is, will be primarily to do with, a supplier or a, or a buyer arrangement that we will do. These are the two critical numbers that we need to look at, and, so based on the subsidy received, by thirty-first of March, the INR 1,000 crore number will go up or down, and that's the way we look at it. The net debt number of INR 4,300 should go down by- It should not be increasing at all. It should not be increasing. We would be able to maintain those numbers, yeah. It wouldn't go down, though, but from 4,300- It could. The way the sales are happening, the progress that we get to see, and the way the subsidies will get paid, and there is a good possibility for this to also come down. Got it, sir. Got it. And just on the EBITDA per ton, do you think Q4 also we could maintain our current levels, or do you see this dropping off? Well, we always believe that as far as the phosphatic business or the blended business that we look at, INR 5,000 per metric ton is a good EBITDA number to go with. And you'll obviously a fluctuation in the commodity trade, where you would see, some, some quarters which are better. So I think we would like to kind of maintain the same, and, we're hopeful that, the stability that we are seeing in prices and the improvement that we are seeing in terms of availability, could well, lead to some improvements. Got it, sir. Just last thing on the finance cost, could you just give some guidance on how one should think of it? Well, when you look at finance costs today, there are two elements to it. One is the long-term money that we've been borrowing, where the average cost has been around 8.5% for us. When it comes to short-term borrowing, in the kind of weighted average that we're looking at, at this point of time, is about 6.75%. That's the kind of costing we are running today. Understood, sir. That's it from my side. Thank you so much again, and good luck. Thank you. The next question is on the line of Akshat Mehta from Sameeksha Capital. Please go ahead. Hello. Yes. Yes, listen, couple of questions. The first thing is, you know, can you tell what are key reasons for this, you know, sharp jump in your EBITDA per ton? I'm sorry to interrupt, Mr. Mehta. Sir, your audio is not clear. What? We would request you to use a handset mode while speaking. Yes. Am I audible now? Sir, slightly better. Please proceed. Yeah. So my first question is on the EBITDA per ton. So you've done, there's been a sharp jump in your EBITDA per ton from around INR 5,200, you know, normalized EBITDA per ton last quarter to INR 6,000. And so what has been the key driver of, you know, this, this sharp jump in EBITDA per ton? But, well, you must understand here that we have been in a process of increasing our capacity. Our fixed costs have remained the same. So the capacity increase has already taken up, which is adding to our efficiency, without having any further increase in fixed cost. So I just want to understand that this you're saying is purely operating leverage. So, you know, last in quarter two, you know, what were your capacity utilization numbers? No, no, we- Goa plant was still operational in three- Last quarter Goa plant was in operation. With three manufacturing units. Last quarter, Goa plant was in operation. Okay. We had taken over Goa in the month of June, and only at the end of August that we started operating Goa, and we were stabilizing the Goa operation based on various grades and various combinations that we were looking at. It is only from the month of November that we have seen... We have reached a point where we, we have a stability and we have a clear plan in terms of how we're going to use those capacities. In fact, if you remember when we had the last investors call, this is the point that we had said, that our focus in the current quarter, which is October-December quarter, would be to stabilize the Goa operations. Because the last two quarters before that, while we had just acquired Goa, there were supply chain issues, and it was not yet smoothened out. And that's where bulk of the management attention has been, which is to stabilize and generate steady throughput out of Goa. So that has been the key contributor to the seemingly better performance. Of course, the other factor that have helped us is a general, generally positive scenario as far as the demand supply is concerned, and a scenario of overall softening or a gradual softening of prices. Okay. And I just want to understand how sustainable is the INR 6,000 per ton number? Do you know what kind of outlook should we see for the rest of the year, as well as so far FY 2024, where should this number go? And will it sustain- Like we said, you know, we felt... I mean, it's our view that, as far as the phosphoric business is concerned, INR 5,000 per metric ton EBITDA is a good, stable number to look at. So we would like to remain with that, and you'll always have an opportunity in certain quarters where your numbers look better. Okay. Yeah, we continue to maintain what we have been maintaining right from our pre-IPO days, which is an INR 5,000 per metric ton number. That's what we would like to believe will be the number going forward. That doesn't mean that we will leave any stone unturned to increase that number. Okay. Okay. I think that means somewhere, you know, we are, we are considering that there will be a fall in number, because till now, you had very good numbers overall, in the nine-month period as well. So that can happen. Secondly, I just want to understand, you know, what is the kind of CapEx that you're going to spend on the two backward integration projects that you have announced? As far as the CapEx is concerned, the primary CapEx on granulation is already completed. As far as the sulfuric—phosphoric acid capacity increase is concerned, the overall CapEx is on, you know, about INR 225 crore. And we've spent about 50% of that, and the balance will get consumed during the next few months. That is the CapEx that is going to be there. As far as the sulfuric acid project is concerned, that's a INR 425 crore project, which is going to be taken over a period of next two years. You're not going to have any bunching about the CapEx that's happening. We are now at an advanced stage of engineering, and we would expect the project activities to peak sometime in the second half of this calendar year, which will be the second half of the next financial year. Okay. So as we are, again, borrowing from the, from the, arguments or the discussions that we have been having in the run-up to the IPO and the last two calls, bulk of our investments are, have been already put on the ground, and we are looking at reaping the benefits of that. One of the points that we have also mentioned in the press release, and which we have not discussed so far in the call, is the fact that all four granulation trains in Paradip have been fully revamped. That was one of the important projects that we were running. Today, as we speak, we are able to generate or realize the targeted per-day production numbers from Paradip fully, which means Paradip is now running at 1.8 million tons annualized run rate. So that's point 1. The other project that Mr. Krishnan just referred to, which is related to the phosphoric acid expansion, which is a very, very critical project, is also broadly on track, but running a quarter or two behind schedule, which we will catch up, and we should see that also coming on stream soon. Once that is done, the other project that will be remaining to balance out the requirement of sulfuric acid would be a sulfuric acid plant. But by and large, we are done with very major CapEx plans. We are in the drawing board to look at the next wave of growth for PPL, and whenever that's ready, we'll come back to share that with you. Okay. So another, you know, general broad question on the industrial as well. You know, the industry is now moving towards more and more nano fertilizer production. So is there any, you know, intention of the company to go towards that production? You know, what do you think would be the impact overall on the industry, you know, once nano fertilizer comes in couple of years, at large scale? Well, nano fertilizers as far as nano fertilizers are concerned, we believe it's a more a specialty product, product, which is, which will be in the category of, non-subsidized product, and I'm sure that we will add that to our portfolio going forward. However, nano's potential today looks like more like replacing about 10%, a maximum of 10%, starting with about maybe 3%-5% in the case of urea....And, we'll have to get to see how much of DAP that it can replace. A good target to begin with will be 5% of overall market size. But you must, you must keep this in mind, that, as nano gets in, you also have a growth in the phosphoric fertilizer consumption. What we can very clearly see is that our import dependence on account of growth which is there could well get partially offset by the Nano category that will come in. Okay. Thank you. Thank you for your answer. Thank you. The next question is on the line of Devvrat Himatsingka from Augmenta Research Private Limited. Please go ahead. Hi, sir. Fantastic numbers. Very impressed with the performance. Just wanted to understand a little bit more on the Goa plant acquisition. Currently, and I'm sorry, I must have missed this because I joined the call a little late. But overall, what is the capacity utilization in Goa? We are-- Like, as you said, you know, we are, we are running at 267,000 tonnes of production that we did in the last quarter, and Goa is potentially good for about 280,000 tonnes in the given quarter. So we're nearly at the peak level, based on the grades that we manufactured there. Urea is running full capacity, roughly 1,350 tonnes per day, and as far as phosphoric capacity is concerned, it's about 2,000 tonnes per day. Okay. And going forward, you know, if we had to look forward into FY 2024, what kind of volumes could we grow at? Like, if you had a year-on-year idea, like, if you have a target in mind or something. Well, no, well, we are. See, this year is going to be more like a, we've done already 1.4 million tonnes of sales, and we could, we could be somewhere in the ballpark of about 2 million tonnes of sales as we end this financial year. And because the current three months are the second half of the—this quarter is going to be, like, off-season for the fertilizer market. When it comes to next year, we have a capacity which is close to 3 million tonnes. And so obviously, we will be looking forward to utilizing most of it, and so our targets will be based on that. So you should see a good increase from the current levels of 2 million tons that we're doing this year, for the next financial year. Okay. Okay, noted. That's all from my side, sir. Wish you the very best for the future. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is on the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Good evening, gentlemen. Can you hear me? Yes, sure. Hello? Yeah. Yes. Thanks for the call. Yeah, thanks for the call and the results. So, the first thought is with the Phosphoric acid prices, I think, showing a decline, has there been any impact because of the excess inventory from the second quarter? And how do you see the outlook for the sulfur, Sulfuric acid, and Phosphoric acid prices to the extent that you have to buy it from the markets over the next few quarters? What is the sense you have? Well, in terms of availability, we see a stable availability of all these products. And we believe that, the fertilizer raw materials in general, they are pretty much the prices of feed. So we are seeing a correction downwards, and that should, that is likely to continue for a couple of quarters the way, the way things are. I think it. And, we believe, that availability will not be an issue, as far as the industry is concerned. And when it comes to inventory, yes, we are a manufacturer. We do carry raw materials with us, and based on, it could well be between 20 days to a 30-35 days inventory is something that we always carry. That gets into manufacturing and gets corrected in terms of pricing over the period of time. Okay, okay. So in terms of the margins you have reported for this quarter, you would have had a certain level of pricing for your fertilizers, a net of the subsidies. So have you been able to maintain that price per bag or price per tonne for the third quarter, or have you cut prices? As far as phosphoric is concerned, we did not have to cut any prices. I mean, they were pretty stable. And I personally see that as far as the MRP for fertilizer is concerned, we will have a stable regime. You know, maybe a grade or two might get a kind of end up changing, but it looks like a stable year going forward. So in terms of your captive production of sulfuric acid and phosphoric acid, what is the percentage of captive production, if you look at your Paradip fertilizer unit? Well, as far as sulfuric acid is concerned, we pretty much meet all our requirements from our own production. As far as phosphoric acid is concerned, we've already we are currently at about 70% in terms of a backward integration, and with the new capacity coming in, we could be closer to 90% as far as Paradip is concerned. In case of Goa, we will import all our sulfur-- phosphoric acid that's required. Okay, so this sulfuric acid expansion is primarily for your additional phosphoric acid production. Absolutely. Is that right? Absolutely. Yeah, that's right, yes. Oh. Okay, thank you very much, and I wish you all the best. Thank you. Thank you. The next question is on the line of Vignesh Iyer from Sequent Investments. Please go ahead. Hello, sir. Congratulations on good set of numbers. I just wanted to ask about, if I'm not wrong, your capacity is around 30 lakhs MT, right? And you were saying that you had utilization of roughly 95%. So, were you speaking about all the fertilizer or DAP and NPK only? No, if you look at it, our current run rate is at 30 lakh tons per annum. As for when we started this year, we had only 15 lakh tons. As far as the capacity was concerned, that was only Paradip. We added Goa in the month of June, and Goa has finally got stabilized, and as we had mentioned that it'll take us some time to stabilize Goa. During this quarter, Goa has got stabilized. So we have been using whatever capacity was available because of Paradip to over 95% capacity, because we were having one train always under revamp, and all the revamps have been completed, so we are in a position to run all our 4 trains effectively. As far as Goa is concerned, right through from the time of acquisition, we've been able to run our urea plant to full capacity. Phosphatic plant, after ironing out all the issues on supply chain, now since October, November, is running at a pace which is close to over 90% capacity utilization. Okay. So, would it be, sir, fair to assume that, for the quarter four, we can do somewhere around 7 lakh tons and for the FY 2024, around 28 lakh tons or 27 lakh tons, roughly? Well, as far as Quarter Four is concerned, you know, second half of the Quarter Four is an off-season, so we'll have to take a call in terms of market demand. So we believe that we will, I mean, we should do a, a good quantity. It may not be 700,000 tons, but we'll be more like a 600,000 tons number, if something is should be feasible, and we would have a complete clarity by end of February as the season ends. And based on the market requirement, we'll be producing. And you're right, I mean, we have a capability to take the capacity, utilization, and production to 2,800,000 tons next year. Okay, sir. Thank you. That, that's all from my side. Thank you. Thank you. The next question is from the line of Chintan Shah from JM Financial. Please go ahead. Hi, sir. Thanks for the opportunity. So I just wanted to see in case of the current raw material pricing scenario, just wanted your sense on how to expect the subsidy, component to play out, and how would that impact the margins going ahead? Well, if you look at it, right, since 2019, the subsidy per ton for phosphatic fertilizer has only gone up. And, if you look at it today, it's roughly about 70%, 67%-70% is the subsidy for the phosphatic fertilizer. We believe that going forward, with prices getting corrected and MRP being at what level that we see, the subsidy per ton will come down, and the proportion of market prices to the overall realization will keep increasing. So on a net, net, we should maintain our profitability? Yeah, I think, there is every case for us to really maintain profitability in general. But given that, the industry has been affected by geopolitical reasons in the last year, since February, and we are very quite confident that that particular event is being handled well and the global market is stable. And it'll be good to see the sector from a quarter to quarter basis as you get these global situations evolve. But one big positive that we're getting to see is a stabilization in China, which we believe is on the whole good for the co- for the sector. Okay, I got it. And secondly, in that slide, how do we see the imports playing out? Could that be a spoil sport in the coming quarters? Well, as far as imports of DAP is concerned, the availability of DAP is there, and I think India's current position of DAP in terms of closing stock for the next season looks to be quite good. And we don't, at this point of time, see challenges in import of DAP. Okay, got it. Sure. And lastly, with this expansion largely done and in next quarters, probably next quarter will probably ramp up completely, just wanted a sense in terms of growth perspective and from FY2024 and beyond, do we have any other plans to expand capacity or we look at some other products, et cetera? If you can throw some light on this. Well, from FY 2024 onwards, like we said, you know, we're gonna have some of the efficiencies kicking in from the backward integration. So that's going to make a difference. As far as Paradip is concerned, there's a phos acid efficiency coming in. As far as Goa is concerned, we're doing an energy efficiency improvement in Goa, in urea, ammonia-urea complex. The benefit of it will come in the fourth quarter of next year. And so these are initial benefits which are there, and as we said earlier, we are back to the drawing board in terms of we're looking at FY 2025 onwards. I think we are. We got our hands full as far as 2024 is there, and for what we need to do from 2025, we will work on it. The one important project that can kick in in FY 2025 is also the completion of the sulfuric acid project. Okay, got it, understood. That's it from my end. Thanks. Thank you. We'll move on to the next question. That is from the line of Dhwanil from iWealth. Please go ahead. Congrats, sir, on a great set of numbers, and thank you for the opportunity. Sir, am I audible? Yes, yes. Yeah. So sir, just couple of questions. First was, again, sir, on the volume, that you were saying that we did close to 68,210 this quarter, and on the quarterly side, at the optimum level, we can do somewhere around 77.1 lakh, so which is around 28 for the year. Yes. So, so, sir, from here on, incrementally, the two CapEx which we are doing is more on the backward integration, and they won't help us in adding more volume? Right. So, so from here on sir, how do we see volume growth shaping up once we reach almost, currently we are at 95%, right? So- No, but you look at it- Yeah. But this financial year, we will end up with about, about 2 million tons. And, you know, we saw the- Correct. We have to, we'll have to travel from 2 million tons to 3 million tons, which you will get to see in the coming years. And, just to add, there is no company, which you will see, at least in India, which, whose sales volume is equal to production volume. Most of them also have a top-up of, traded volumes, which we have not yet intentionally marked upon. And the advantage of the, of the, efficiency that kicks in with an additional traded volume is because from the same fixed cost base of the sales and marketing network, we can, we can churn out more volumes through imports. So that is also kicking. The main reason why PPL as a company has not gone into it, is because we were, we were in the middle of a very aggressive expansion program. In Paradip, we are moving from 1.2 to 1.8. Goa, we are taking on another 1.2. So for the next 3 years, at least the management team is completely, you know, we have our hands full as far as the volume growth is concerned, and there are many areas from which this volume growth will come. Okay, okay. So, so you are saying that the imports or the trading can be done to increase the volume, correct? Yes, yes. Which currently we aren't doing it? Yes. Because we are utilizing our own capacity. Got that. Right. Sir, when you do the trading, so in that case, what is the EBITDA per ton we generally make on that? In case of trading, you know, contribution is equal to EBITDA is equal to PBT, because it is, it is going to be riding on the same sales and marketing networks. Correct, correct. But, but I wanted to understand on the EBITDA per ton. So, so INR 6,000 is what currently we are doing. It depends on the global prices. It depends on the global prices. Yeah. Which you derived from historical. Yeah, it will be lower than manufacturer. Say INR 3,000-INR 3,500 is a decent number to take. Got it. Got it. And just one last question, the phosphate backward integration, so, how to understand the impact of that, sir? So in terms of our EBITDA per ton would increase, how to understand that, sir? So then I understand. No, it's an efficiency improvement, so it'll have to reflect on EBITDA per ton. I'm sure we'll get a chance to discuss this in the next earnings call year, once we're done with it. Yeah. Okay, okay. Because in the earlier call, you were saying that INR 1,000-INR 1,500 will be generally the conversion- which you will be able to get, right? Yes. Got it. And, what is the capacity, sir, we are putting in phosphate? 200,000 tons. Additional. Additional. Additional, which will start from Q1. Q1. From there. We are expecting that the plant should get into a commissioning mode in Q1. Q1. Great, sir. Thank you and all the best. Thank you. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is on the line of Dhruv Muchhal from HDFC Mutual Fund. Please go ahead. Hello. Yes, we can hear you. Yeah. Yeah. Thank you so much, sir. Sir, I just wanted to reconfirm the sales numbers. For Q3 this year, it is 611,000 tons. Yes. For Q3 last year, it was 494,000 tons. Right, sir? Yeah, yeah. Perfect. And, sir, you mentioned the subsidy this quarter end is about INR 3,400. What would this be at the end of the September quarter? At the end of September quarter, the subsidy, The subsidy we got INR 1,504 crores of subsidy at, at the end of subsidy. Outstanding at end of September was INR 2,252 crores, yeah. INR 2,252 crores. Got it. Our subsidy is going up today because we're producing more. More. Our volumes have substantially increased, so you will see all the numbers. Versus Q4. Yeah, yeah. Right. The number that you mentioned, INR 1,500 crore, that you have received in January, right, sir? Yes. This is what we received during the Q3 quarter, between September, October, November, December. Thank you, Suresh. Okay. So just on the EBITDA number, now, if I look at the number per ton, and considering that you probably had some higher cost inventory, and also the manufacturing spread, if I'm not wrong, for phosphates has been a bit lower versus the last quarter. But the EBITDA number seems quite strong, also in context of the urea volumes. You had decent urea volumes even this quarter, so which I believe is not as profitable as the normal fertilizer, the NPK fertilizers or DAP. So just wanted to understand better on the EBITDA per ton. Is it probably seasonal, which is driving this, or they can be further upside to significant upside? Because versus the guidance, there's a significant difference, 7,006 and probably a further 6,000 versus 5,000, your guidance. Well, you look at it as far as the EBITDA is concerned, it's number one: manufacturing efficiency. The second most important thing that I mentioned earlier was that we started increasing our volume with the same fixed cost. That's making a difference. The fixed cost that we're carrying in the last quarter, Q2, the similar fixed cost that we're carrying in Q3, but our volumes are very different. And so the incremental volume which is coming in, there again, your contribution becomes equal to EBITDA. It doesn't have to have any other fixed costs at all. So that is the impact that we're getting. So the volume, the increase in volume at the manufacturing price is what is driving this. So but the understanding is clear that the manufacturing spreads probably were on benchmark levels, were probably lower. So despite that, the overall EBITDA is still better. Well, as far as the right across all products mix, I think we've had good EBITDA, and we made various grades of fertilizer which have kind of worked for us. So what was your question? What exactly do you want to know? Urea is lower. Yeah, no. So if I just adjust for the urea volumes, your EBITDA per ton will be even better, because that probably is the right way to understand, because urea- It's always will be- Yeah. It's, it's the case. But, you know, urea is a stable, a stable product with a stable EBITDA that gets it. No, just to, you know, as Mr. Krishnan mentioned earlier, we are telling you the EBITDA that we have achieved this quarter and the guidance going forward, which is around INR 5,000. We'll try to exceed that, but we'd like to maintain that as the number. The reason being, you know, we've just had one quarter of steady Goa performance. We would like to repeat that for a few quarters before being able to increase that guidance, in case that's what you are going towards. Yeah. And, the fact that we have urea, unlike some of our competition, is actually a de-risking strategy. Because there will be quarters, there will be years when urea will be good, especially in scenarios where gas prices are high, et cetera, as we are, as you are probably alluding to. So this, the balanced portfolio that PPL has compared to some others, is working. And that was one of the reasons why we decided to go after the Goa plant, to increase or diversify our product portfolio beyond a pure phosphate play. It is going to be an advantage, and we may see more of it going forward. Sure, sir. That's helpful. Since I have... Just one last thing. Is Goa, your plan was to, you know, shift more towards the NPKs rather than DAP, if I'm not wrong. So, based on probably early, early performances, is that on track or do you see- Absolutely. It's completely on track, and we made some small quantities of DAP. We touched on all the grades, including DAP, as Goa is concerned. But if you look at it, during the last quarter, we have made N-14, N-19, N-20, all grades that we made out there. So only, of the six, of the 247,000 tons in Goa, only 19 is DAP. Rest is all NPK. Rest is NPKs. Okay. Okay. Thank you so much. That's all. Thank you. A reminder to the participants, anyone wishing to ask a question, may please press star and one. The next question is from the line of Manish Mahawar from Antique Stock Broking. Please go ahead. Yeah, good evening, sir. In terms of the EBITDA, EBITDA per ton perspective, as you said, a INR 5,000 per ton of margin, so this is blended margin, right? It's a phosphatic as well as urea blended margin you're talking about. Yes, yes. Yes, Manish. Yeah. Okay. Going forward, once this your backward integration in terms of phosphoric acid, sulfuric acid will be in place in FY 2024, and I would say 2025, the capacity will be available, right? What type of EBITDA pattern we can make? Or if you can say basically what type of benefit, EBITDA benefit can come from these two project? Well, as you look at it, the volumes are going to be where, the volume growth is also going to drive the overall absolute rupee terms or EBITDA, which is going to be there, which you will get to see in FY 2024, and also the benefit of the phosphoric acid capacity. And, that's certainly going to add, and because our backward integration will go up from 70% to 90% in Paradip. Yeah. But I think, Manish, the best thing is, you know, this, these are all commodities, volatile markets, you know, and we should be clear that all this is going to be positive as far as the company is concerned. As we come to those, those quarters where we start producing, we'll discuss it here. Okay. But we are very confident that all of it will be positive for us. Okay. That was my point, actually. Basically, we can make a higher EBITDA, what we are guiding for at the moment, and it is conservative at the moment, right? There is a- I think INR 5,000 being an average EBITDA, given the kind of product mix that we have. Okay. Given the efficiencies that we are going to bring in, I'm sure the objective is to increase the EBITDA. As we mentioned earlier, we will look at a better guidance as the months will reach there. Yeah, and just to add to what Mr. Krishnan said, you know, the EBITDA pattern is also a function of the prices of, you know, rock phosphate, phosphoric acid, and our long-term contracts are such that we get, you know, it's a discount percentage, et cetera, et cetera. All those things come in. Yeah. The INR 5,000 per ton is an EBITDA per ton number that we keep saying, which we're saying, we are saying we are going to maintain. But as you realize, when the prices go down- Right We will also shift the discussion to an EBITDA margin, which will start to show, much better. Yeah. So where in a scenario where the prices are very high, we don't talk of EBITDA margin, we talk of EBITDA per ton. But when prices will go down, we will again, we will shift the discussion to EBITDA margin. Mm-hmm. Okay. As far as this industry is concerned, it's important to note that the volumes are important and the quality of the volumes are equally important. So I think that is exactly where our focus is. And the quality of volume that you will get to see from us will finally determine the kind of EBITDA that we will generate. Understood. In terms of a mix perspective in our finished goods, the last year, we sold around 700,000 tons of DAP. So, going forward, incremental, whatever volume we sell, it is towards the NPK side, most of it, right? Yeah. Go ahead. Yeah. So actually, you know, from a production capacity point of view, we are in a position to make of the 3 million tons of 30 lakhs. You leave aside 4 lakhs, you are left to 26 lakhs. We can make 26 lakh tons of DAP if it is needed. However, our choice of product is determined by what our farmers need, and of course, a consideration of what kind of contribution we will make from those products. That's what determines the product market choice. Having said that, this year we have deliberately reduced or subdued our DAP production and DAP sales. We will continue to look at dynamically the scenario of the market and decide which products to make. The important point which we would like you to understand is the flexibility that the production plants have, which many other competition does not have. Right. They're stuck. They're kind of, they have to make a non-DAP product perforce or a DAP product perforce, which is not the case with us. Hey, look at our last quarter performance. Our DAP was down by 10%, whereas our NPKs, like, N-20 was up by 33%. And when it comes to the other specialized grade of NPKs, which we look at in Goa, it's like 500% increase was there in the quantity. So this has been the change that has come into the overall product mix. Okay. But my limited point is that, going forward, in terms of overall volume, your mix in terms of NPK will increase or it will be remain, at the same as what we are seeing in the past? We would always increase depending upon the need of the farmer and how the liquidation happens, you know. We have a, as we said, we have a very good capability today. Yeah. We are a highly fungible granulation plant right across Goa and Paradip. So we will take a call as we go forward, based on what market requirements are. Okay, understood. And last point, Mr. Krishnan, if you can throw some your thought in terms of a government subsidy provision for the next year, which is today actually budget 175. What we saw in the budget was INR 175,000- Seventy-five. Yeah, you know, yeah, which is a good number. And, I mean, this could be an, as good an estimate as you, as you can get today. And we feel that, we have got a healthy number. Okay. What's your expectation for the phosphoric acid price, maybe for a coming quarter or so? It will come down? Because this, this quarter it will come down, for sure, Q4. Okay. The trends that we'll be looking at it is that maybe this quarter, next quarter, you will see correction downwards and, and post that we'll see. Okay, but what contract has yet to be finalized for the fourth Q, right? Yeah, I think they are pretty advanced stage, and you... I'm sure you'll get to hear it soon. Yeah. Okay, understood, sir. Sure, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Rishikesh from RoboCapital. Please go ahead. Hi, sir. Thank you for the opportunity. Firstly, just wanted to know if my understanding is correct here. If next year we can do 28 lakh tons of sales, and on that, the steady state EBITDA per ton of INR 5,000 per ton, and assuming, you know, provided that prices don't go down, are we talking about, like, almost INR 1,400 crore of EBITDA potential? Well, we've all, I mean, if you look at our time of investor presentation during IPO, this is the kind of growth that we had projected. Yes. Yeah, does that surprise you? We have been saying this in all the calls and all the, you know, for the last one year or more. Oh, okay. Because I'm actually new. Sure. Okay. And second, sir, can you share debt outlook for FY 2023 and FY 2024? What is it? I didn't get the question, yeah. Can you share debt outlook for next two years, sir? Sorry, what outlook do you want? Sorry. Debt, debt outlook, sir? You see, as far as the long-term debt is concerned, we're pretty much making INR 1,000 crore, and it will keep coming down from there on. So we're not expecting that to happen. As far as cash-based working capital is concerned, as you said, that, you know, we're trying to run at a level between INR 1,000 crore-INR 1,500 crore between the two units. As we speak, we are below the targeted number that we are in. We will always have a suppliers credit, which is primarily a suppliers or a buyers credit arrangement based on the purchases that we do. That will primarily depend upon global prices. As we get to see global prices coming down, I believe that those numbers will be significantly corrected. Yeah, and, and as we were mentioning earlier, that the number that we actually look at internally is the long-term debt, because the short-term debt is well covered through, on one side, it's largely comprised of subsidy receivables, which is an assured money that comes, and also, again, the subsidy receivables, we have enough and more working capital limits at very attractive rates for us. Bringing in the earlier question, if we can actually realize the kind of EBITDA numbers that we are talking of, we would be long-term debt free in two years. But that's not the position that we would like to go to, which means that we would have run out of ideas to expand the company, which will not be the case with us. So by the time we reach that, we would have other ideas to expand the organization and invest in profitable areas for future growth. Okay, sir, that was helpful. Thank you very much. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments. Thank you, everyone, for joining our call. We are confident and we are quite keen to grow, the way we have indicated to you in this call and, and the presentation that we made earlier. Our team remains focused on executing our strategy and delivering value to our shareholders. We appreciate your continued support, and we look forward to connecting with you all in the coming days. If any question remains unanswered or you have any further questions, please feel free to connect to our investor relations team. Thank you. Thank you. Ladies and gentlemen, on behalf of ICICI Securities, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.