Lower raw material cost and traded goods cost has enabled the company to improve its OPM margin by 150 bps to 20.4% during the quarter ended March 2009. The operating profit as a result increased 7% to Rs 68.03 crore during the quarter under review as compared to the same period last year. After providing for other finance charges the profit before tax after EO increased by 5% to Rs 51.32 crore during the quarter under review. The effective tax rate was significantly lower during the quarter at 23% as compared to 36% during the corresponding quarter of the previous year, owing to which the company managed to post a net profit of Rs 39.63 crore, which was 26% higher compared to the corresponding quarter of the previous year.

Commenting on the results, the Vice Chairman and the Managing Director, Mr. S. C. Mehta said, "This Company's performance clearly indicates the strengths of our fundamentals and our management skills. We have successfully withstood the downturn through our ability to leverage our marketing network to optimal value. The results, this time, firmly emphasize our resilient product mix. We will now focus strongly on growth in the Agri-sector and mining, with our strategy mirroring the growth drivers in the Indian economy – infrastructure / mining and food / agriculture. With the commencement of KG basin gas, the question of gas availability should be behind us soon."

Performance for the quarter ended March 2009

The company posted extremely disappointing top-line growth during the 4^th quarter ended March 2009. The revenue during the quarter fell by 1% to Rs 332.95 crore as compared to the corresponding quarter of the previous year. Despite excellent performance by the fertilizer division, the chemicals division performed badly thus impacting the overall top-line growth. The chemicals business, which contributed 50% of the total revenue during the quarter, fell significantly by 31% to Rs 167.42 crore, whereas the fertilizer division posted an impressive 78% growth in revenue to Rs 161.34 crore during the quarter under review. The realty division also posted 73% growth in the top-line.

However lower raw material cost and traded goods cost has resulted in the OPM margin improving by 150 bps to 20.4% during the quarter ended March 2009. As a percentage of adjusted sales, the raw material cost fell by 340 bps to 24.2% during the quarter, whereas the cost of traded goods fell to 37.7% of adjusted sales as compared to 48.9% of adjusted sales during the corresponding quarter of the previous year.

The operating profit as a result increased 7% to Rs 68.03 crore during the quarter under review as compared to the same period last year. Other income also increased significantly during the quarter thus enabling the profit before interest, depreciation and taxes (PBIDT) increasing by 10% to Rs 72.16 crore. After providing for the interest cost, which increased by 91% and the depreciation allowance, which increased by 7%, the profit before tax before EO increased by only 4% to Rs 51.49 crore during the quarter ended March 2009 as compared to the same period last year. The company incurred extraordinary expenses of Rs.17 lakhs during the quarter under review in comparison to Rs 57 lakh during the same period last year towards amortization of VRS compensation paid. Thus the PBT after EO increased by 5% to Rs 51.32 crore during the quarter under review. The effective tax rate fell significantly to 23% as compared to 36% during the corresponding quarter of the previous year, owing to which the company managed to post a net profit of Rs 39.63 crore, which was 26% higher compared to the corresponding quarter of the previous year.

Performance for the year ended March 2009

Performance for the full year ended March 2009 was however impressive as compared to the previous fiscal. The top-line posted a healthy growth of 33% to Rs 1412.10 crore during the year under review, primarily driven by the fertilizer division, which performed exceedingly well during the year. The fertilizer division revenue, which constituted 40% of the company's top-line during the year increased by an impressive 93% to Rs 576.80 crore, thus continuing the thrust on the specialty and traded fertilizers. The Chemical division sales however only increased 9% to Rs 827.30 crore. The Realty segment has registered an income of Rs. 15.92 crore for FY09 against Rs. 4.57 crores in FY08. This includes lease rentals from property income and Ishanya, India's largest Specialty Mall for interiors and exteriors.

The raw material cost, traded goods cost and the employee cost of the company fell by 50 bps, 70 bps and 20 bps respectively, enabling the company to improve its OPM margin by 100 bps to 19.3% during the year. Thus the operating profit increased by 41% to Rs 272.16 crore during the year under review as compared to the previous fiscal.

The company earned other income of Rs 36 crore, which was 68% higher compared to the previous year. Thus the PBIDT registered a growth of 43% to Rs 308.16 crore during the year ended March 2009. However the interest cost of the company and the depreciation allowance increased by 154% and 17% to Rs 40.47 crore and Rs 52.38 crore respectively during the year, as a result of which the company's profit before tax before EO improved 40% to Rs 215.31 crore. After considering the extraordinary expense of Rs 3.31 crore during the period, which included brand launching expenses as well as amortization of VRS expenses paid, the profit before tax after EO increased 40% to Rs 212 crore as compared to the same period last year. The tax rate fell 400 bps, thus the net profit increased by 48% to Rs 148.70 crore during the year ended March 2009.

Other developments-

Ishanya has registered over 1.3 million footfalls and has seen conversion rates of up to 35%, among the highest in the mall industry. Ishanya has also successfully developed good alternative sources of revenue through its non-lease income sources, viz. its amphitheatre, exhibition areas, mini-convention center, etc.

The Company augmented its Technical Ammonium Nitrate capacity to 132,000 MTPA from 90,000 MTPA during the year under review. The company also commissioned its Bentonite Sulfur plant at Taloja in W. Maharashtra with a capacity of 25,000 MTPA. The 15,000 MT Ammonia tank at JNPT is now ready, giving the company a clear make-or-buy option for Ammonia.

The 450 TPD additional Nitric Acid facilities would be commissioned in the first half of FY10. The addition of this Nitric Acid facility should make the Company among the largest producers of the product in Asia. The new chemical complex to support the mining sector is progressing well and is on track for commissioning in FY11.

The Company has begun purchase of consignments of LNG through the GAIL pipeline. The Company's Saarrthie initiative had made great strides with both farmer acquisition through the scheme and a considerable growth in the exports of fruits and vegetables. About 5,500 farmers were now members of Saarrthie and 56 containers comprising of grapes, pomegranates and onions had been exported successfully during the year under review.

The Company declared a dividend of 40% for FY09.

The promoters' stake stands at 42.61% as at the end of March 2009.

The scrip is currently trading at around Rs 86 per equity share on the BSE.