Mangalore Chem.

Mangalore Chemicals & Fertilizers Limited delivered an excellent Q3 FY25, with revenue growing 51% YoY to ₹968 crores and PAT surging 73% YoY to ₹57 crores. Sales volume increased by 61% to 2.19 lakh metric tons. The northeast monsoon brought 9% excess rainfall in operating states, contributing to consistent crop acreage and favorable reservoir levels (120% nationally, 133% in key markets), setting a strong foundation for the upcoming Kharif season and supporting record food production.

The company achieved high production volumes in Q3 FY25, with 1.23 lakh tons of Urea and 0.88 lakh metric tons of NP. A significant achievement was the lowest-ever Urea energy consumption at 5.45 giga calorie per ton, a result of the Ammonia Energy Improvement Project. Management expects to finish FY25 with an energy level of almost 5.55 giga calorie per ton, demonstrating consistent focus on optimizing plant operations.

MCFL's Net Worth crossed ₹1,000 crores in Q3 FY25, growing by ₹114 crores YoY. Long-term debt saw a net decrease of ₹73 crores, and short-term debt stood at ₹220 crores. The reduction in finance cost is attributed to term loan repayments and improved working capital management due to timely subsidy disbursements. The company is carrying a term loan book of ₹312 crores, with the majority expected to be cleared by FY28, leaving a small book of ₹90 crores.

The merger process with PPL is expected to be completed within the next 6-9 months, pending NCLT approval after SEBI's clearance. Post-merger, the company plans new investments, including a sulphuric acid project (₹240 crores investment) to be completed by August 2025, which is expected to reduce urea energy by 0.25 giga calorie per tonne. Further backward integration plans include studying investments in the NPK Plant at MCFL and potentially a phosphoric acid plant at a group level (Paradeep or Morocco).

Raw material prices for Phosphatic fertilizers, particularly phosphoric acid ($1055 per ton) and ammonia ($440-$465), remain elevated. This has resulted in very low margins on Phosphatic fertilizers. DAP import prices are also high ($632.5 per ton), making imports unprofitable due to insufficient government subsidy, leading to a decision not to import DAP. The company anticipates support from the government in the next subsidy revision due in April to aid the Phosphatic fertilizer industry.

Urea business revenue for Q3 FY25 was ₹573 crores, while non-Urea business posted ₹395 crores. Despite a cumulative decline in overall sales volume for 9M FY25 (5.9 lakh metric tons vs 6.77 lakh metric tons in 9M FY24) due to the absence of DAP imports, MCFL continues to hold the top position in N20 sales in Karnataka. The company's sales performance in Q3 FY25 was exceptional, with 2.19 lakh metric tons sold, a significant improvement from 1.36 lakh metric tons in Q3 FY24.