Highlights of the concall

The company's net sales for Q2 FY14 has increased by 43% to Rs 983.79 crore while net profit inclined by 12% to Rs 45.44 crore.

The growth in top-line was on account of higher manufactured and higher trading. Fertilizer segment revenues at Rs 450 crore, up by 33% due to 42% rise in manufacturing and 26% rise in trading. Sales volume for the own manufactured fertilizers grew by 45%yoy.

The chemicals segment revenues grew by 54% to Rs 580 crore. Revenues from own manufactured chemicals grew by 47% to Rs 480 crore while trading sales doubled to Rs 100 crore.

The volume of ANP was higher by 45%.

The total TAN volume for H1 FY14 up by 31% at 152000 MT.

The EBITDA margins declined by 88 bps 10.7% on the back of higher traded revenues and lower margins in the chemicals segment. Cost pressures were further accentuated due to the rupee volatility as depreciation of the rupee impacted rupee cost for gas and phosphoric acid.

EBIT margins for the acid products fell from 15% to 5% due to higher currency depreciation and sluggish demand impacting realizations.

Average gas cost increased to Rs 14.6/scm as compared to Rs 11.6/scm last year average.

The mgmt expects margin to recover due to drop in contracted phosphoric acid prices for Q3 from $715 ton to $609 ton. On the nitric acid front, the mgmt expects gross margins to steadily recover as the company's TDI plant gets commissioned in Q3 as current supply for the company will be used for captive consumption

The mgmt said that TAN production for H2 FY14 will be 175000 MT.

There was forex loss of Rs 8.12 crore in Q2. The mgmt said that loss was on account of MTM , of which it expects 50% of the loss to reverse in coming quarters.

The company has announced a VRS scheme which is likely to have an impact of Rs 10 crore in the coming quarter and will lead to an annual savings of Rs 2.5 crore.