Key highlights of FY24:
• Consolidated operating revenue of INR 8,676 Crore
• Operating EBITDA margin of 15%.
• Board recommended dividend of 85%.
• Achieving 100% design throughput for our 5,00,000 MT per annum capacity Ultra
Mega Ammonia Plant.
• Highest short term credit ratings by CRISIL and reaffirmation of long term
rating by ICRAwith stable outlook.
Headwinds of FY24:
• Below normal and erratic monsoon
• Dumping of Russian Fertiliser Grade Ammonium Nitrate
• Dumping of Nitroaromatics and downstream from China impacting Nitric Acid
• Geo-political tensions from war and strife
• Fertiliser subsidy mismatch with volatility in global raw material prices
A rare black swan year where all our diverse businesses were tested for resilience, all
in the same year!
While the topline decline was understandably in line with the general tapering down of
both finished product and raw material pricing, the contribution margins stood the test of
time, if one were to keep aside the one-time fertiliser subsidy correction and the one
time cost hit from the stabilisation of the new Ammonia plant.
Despite the headwinds we remained steadfast in our resilience and resolve to move
forward on the committed strategic path.
Over the last few years, our committed strategic path has remained focussed on:
A. Getting Right Sized
B. Solidifying Fundamentals with Backward Integration
C. Evolving from Volume to Value
Let me share some updates on this journey.
A. Getting Right Sized
Our three businesses namely,
• Crop Nutrition Business,
• Mining Chemicals Business and
• Industrial Chemicals Business enjoy a beautiful alignment with the India Growth
Story and continue to sail with very positive tailwinds: the growing demand from the
country's needs for
• fruits & vegetables,
• power & infrastructure and
• Speciality chemicals & pharmaceuticals.
One of our capex drivers has been synergising our four decades of operational strengths
with this excellent alignment with the India Growth story. The past capital outlay to
enlarge our capacities in the Fertiliser/Crop Nutrition space and the on-going Capex
projects in the building block specialty chemicals and mining chemicals space promise to
deliver risk mitigated attractive returns with lower gestation. This is supported by the
healthy GDP growth of the country as well as India providing a China-plus-one alternative
global opportunity.
In particular, the on-going Nitric Acid project at Dahej and the Technical Ammonium
Nitrate project at Gopalpur in Odisha, with a total capital outlay of over ?4,500 Crore
will both bring global scale and current generation highly efficient capacities, to propel
the company as a right-sized strong player in each segment.
Despite the large capital outlay, given the synergies arising out of the alignment of
our four decades of solid operational grip as well as the hugely growing country's demand,
ICRA has reaffirmed our long-term and short-term ratings.
The fast-paced project progress and the resultant top-bottom line boost likely to
emerge in the next 24 months are slated to raise the company to the next levels of
financial performance.
B. Solidifying Fundamentals with Backward Integration
The stabilisation of our new global scale current generation Ammonia project has
solidified the foundation for all three business segments in terms of securitising the key
raw material. The erstwhile global volatility in Ammonia prices is now a strong risk
mitigation well captured in our basket of products covering the upstream and downstream of
the chain. Port congestion led demurrages and stock out scenarios on the Ammonia front
have become a thing of the past. The large freight cost savings as well as a massive
carbon footprint reduction have been the cherries-on-the-cake.
With your company entering into India's largest private sector 15-year LNG contract
with the Norwegian giant, Equinor, at globally linked attractive terms commencing from
2026, brings another large risk-mitigating strategy with respect to the value chain,
solidifying the foundation, right from LNG to Ammonia to the building of Nitric Acids and
leading to the downstream.
C. Evolving from Volume to Value
Our passionate journey from Volume to Value continues and now promises to be a game-
changer for each of our Business segments.
In our Crop Nutrition Business, newer crop-specific nutrient grades based on internal
R&D efforts, multiple Agriculture University trials and field demos have now
established our credibility at the farmer level, that of delivering improved Benefit
Ratios covering yield and quality of the produce. The range of our crop nutrition
portfolio now covers crop- specific grades for attractive cash crops like cotton, onion,
soyabean and sugarcane. Our endeavour on top quality crop specific Water Soluble
Fertilisers too have begun bearing fruits.
With the 80,000 demo plots and over 16 lakh farmers having experienced the efficacy of
our new grades our the years, our "Volume to Value" business model, has moved
from Concept to firm establishment with impactful and favourable thrust in our P&L.
Similarly exciting has been the journey of moving the product/volume centric portfolio
of our Technical Ammonium Nitrate (TAN) to a mine-productivity improvement centric
solution provider, thereby bringing significant TCO (Total Cost of Ownership) benefits to
mine owners. The impactful value proposition of our Blasting Solutions has now also been
established with third party certification and appreciation by some of our marquee
customers especially in the limestone / cement, coal and infrastructure mine segments. Our
investments in mining specific software solutions, tech-sawy teams, drones along with last
mile delivery systems, have now ensured a firm footing for the "Volume to Value"
strategy for our Mining Business.
Even in the Industrial Chemicals segment, the Steel Grade Nitric Acid and the Pharma
Grade IPA based on intense work at the customer end along with backend tweaking of the
manufacturing, storage and delivery systems, have now kickstarted firm delivery of value
beyond a volume play.
Additionally, our drive continues to bring sustained value and contributions towards
environmental protection and reduction of carbon footprint. Proactive capital-intensive
steps such as the installation of N20 abatement systems in the Nitric Acid plants and
nutrient recovery through RO-MEE, underscore our dedication to environmental stewardship.
The new Ammonia plant has eliminated the logistic requirement from port to plant,
resulting in a significant reduction of ground level emissions from road tanker movements.
The company has also initiated steps to increase its share of renewables beyond the
existing 15 MW of wind and solar installations. The Company continues to strive to instil
a culture of safety and sustainability by conducting regular training awareness programs /
periodic audits to review process safety, energy usage, losses, strict compliances and
alarm triggers.
Aligning with the UN Sustainable Development Goals, the Company is working to implement
energy-efficient technologies, renewable energy, water conservation and waste reduction
initiatives. As a part of Extended Producer Responsibility (EPR), it has committed to
responsible plastic waste management.
Our committed CSR initiatives bring strong self-reliance and positive impact in the
needy segments of societies around all geographies of our operational footprint.
Aligned Corporate Restructuring
Strengthening the value drive, the recently approved Corporate Restructuring plan by
National Company Law Tribunal (NCLT), carving out each of our Business Segment into a
separate corporate entity, will ensure:
• Passionate and focussed deliveries to the Volume to Value journey with dedicated
work ethos focus right from the Board members to the lowest rung officer.
• Improved transparency and visibility for the investors to feel and understand
the specific business segment dynamics.
• Sharply attractive propositions for global industry leaders to seek strategic
alliances and joint ventures to expand their India footprints.
Our Volume to Value journey is now on a firm path to transform the very face of the
Group in the years to follow.
Being right sized with a solidified foundation and a powerful strategy at play, moving
from volume to value, all of it with restructured new corporate entities and excellent
alignment with the India Growth Story, we are on the runway for a new take off.
For their trust and uncompromising support through our journey of value creation, let
me express my gratitude to our customers, business partners, bankers, associates, team
members, and all other stake-holders. I would also like to convey my deep appreciation to
our esteemed Board members whose wisdom and constructive critiques on strategic matters
have been of immense help.
Bringing meaningful Value in every facet of our operations will remain our mantra for
the decade ahead.
S. C. Mehta
Chairman & Managing Director