Shree Pushkar Chemicals & Fertilisers Q1 FY27 earnings call

Shree Pushkar Chemicals & Fertilisers Limited commenced FY27 on a positive note, reporting a 10% year-on-year revenue growth to Rs. 281.1 crores, driven by improved realization despite lower sales volumes. Profitability also saw an uplift, with EBITDA increasing by 9.7% YoY to Rs. 31.9 crores (11.4% margin) and PAT growing by 9.4% to Rs. 22.9 crores (8.2% margin). Gross profit stood at Rs. 89.2 crores, up 6.3% YoY, with a margin of 31.9%.

The company is actively progressing with its expansion initiatives, including Ratnagiri Unit 5 and Unit 6, which are in advanced stages of completion, and the Meghnagar expansion. These projects are expected to significantly expand manufacturing capabilities, adding 450,000 metric tons per annum of fertilizer capacity and 72,000 metric tons per annum of chemical capacity. Additionally, Shree Pushkar acquired 30,000 square meters of land at Lote Parshuram for Rs. 9.33 crores, strategically located near existing Unit 1, to support long-term capacity plans.

Shree Pushkar faced continued challenges from elevated raw material prices and supply chain issues, with sulfur prices surging from USD250-300 to USD1100. To mitigate this, the company strategically operated its acid plants at low load, prioritizing value realization and managing working capital, as sulfur requires advance payment while acid is sold on credit. Management noted an improvement in raw material availability compared to previous months, which is crucial for future production.

While overall sales volumes were lower in Q1 FY27, improved realizations helped offset this impact. The fertilizer business recorded a sales volume of 66,527 metric tons (down from 76,288 MT in Q1 FY26) but achieved a sales value of Rs. 142 crores, growing 4% YoY. The chemical business saw volumes decline to 9,113 metric tons (from 14,837 MT in Q1 FY26) but reported a sales value of Rs. 138 crores, a 17.10% YoY growth. Both segments contributed almost equally to the total sales value (51% fertilizer, 49% chemical).

The company incurred approximately Rs. 20 crores in capex during Q1 FY27, bringing cumulative capex to Rs. 209 crores against a total planned capex of Rs. 512 crores. These investments are funded through internal accruals and preferential issue proceeds, ensuring financial flexibility. Furthermore, the 10-megawatt DC solar power project at Nanded is nearing completion, which will increase the company's total installed solar capacity to 20.6 megawatts on a DC basis, aligning with its sustainable operating model and integration strategy.

Management expressed strong optimism for FY27, anticipating it to be significantly better than the previous two to three years. The company projects achieving a turnover of Rs. 1,350-1,400 crores for FY27, an upward revision from the earlier Rs. 1,250 crores, with PAT levels near 9%. For FY28, with a full year of Unit 6 operations, the company projects turnover could cross Rs. 1,700-1,750 crores. Unit 5 and Unit 6 are expected to commence trials within the next month to month and a half, contributing to operations for four to five months in FY27.