Besides increase in raw material cost and employee cost, the lower cost of traded goods helped the company to improve its OPM by 320 bps to 23.8% during the quarter under review. Hence the absolute operating profit fell by 16% to Rs 57.79 crore.

After providing for other finance charges and EO expenses the PBT fell 19% to Rs 54.44 crore during the quarter under review. The effective tax rate fell significantly to 29% as compared to 33% during the corresponding quarter of the previous year, owing to which the company posted a bottom-line of Rs 38.91 crore during the quarter ended June 2009, which was 13% lower compared to the corresponding quarter of the previous year.

Performance for the quarter ended June 2009

The performance of the company during the 1^st quarter ended June 2009 was extremely disappointing as compared to the corresponding quarter of the previous year. The top-line fell by 27% to Rs 242.39 crore due to temporary repairs of Nitric acid plant and planned shutdown of ammonia plant, coupled with relatively lower prices in the fertilizer sector and across key chemicals like IPA. Although the ammonia plant has commenced production the nitric acid plant is yet to commence normal production. The Company's IPA and Technical Ammonium Nitrate (TAN) business continues to grow. Segment-wise both the chemicals division as well as the fertilizers division performed badly although the realty segment and other division posted decent top-line during the quarter. The chemicals division which contributed a major 71% of the total top-line during the quarter fell by 24% to Rs 175.08 crore whereas the fertilizers division revenue fell by 35%. The realty division revenue rose by 15% during the quarter under review.

The raw material cost and the employee cost significantly rose during the quarter; however the company managed to keep the cost of traded goods at lower levels compared to the corresponding quarter of the previous year. As a percentage of adjusted sales, the raw material cost and the employee cost increased by 910 bps and 400 bps respectively. However the traded goods cost fell to 19.5% of adjusted sales during the 1^st quarter of FY 2010 as compared to 40.7% of adjusted sales during the same period last year. Thus the OPM improved by 320 bps to 23.8% during the quarter under review. Hence the absolute operating profit fell by 16% to Rs 57.79 crore.

Other income increased during the quarter by 15%, however the interest cost and the depreciation allowance also increased by 39% and 20% respectively. As a result of which the PBT before EO fell by 20% to Rs 54.60 crore during the quarter ended June 2009.

The company incurred extraordinary expenses of Rs 16 lakh during the quarter under review in comparison to Rs 1.37 crore during the same period last year towards amortization of VRS compensation paid. Thus the PBT after EO fell 19% to Rs 54.44 crore during the quarter under review. The effective tax rate fell significantly to 29% as compared to 33% during the corresponding quarter of the previous year, owing to which the company posted a bottom-line of Rs 38.91 crore during the quarter ended June 2009, which was 13% lower 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-

Production of methanol has re-commenced with prices stabilizing. Capacity utilization is expected to increase in subsequent quarters with an expectation that prices are now firmly stabilizing.

Speaking about the results for Q1 and the future plans for the company, Mr. S. C. Mehta, the Vice Chairman and Managing Director said "that the shortages of natural gas would soon be a thing of the past and that FY10 would see significant improvements in capacity utilization. "With the multiple gas sourcing possibilities now emerging, including the KG Basin Gas, we are now looking at higher capacity utilization in the coming quarters."

He added "that the company's strategy of expanding synergistically to enhance its product portfolio was now comprehensively underway and very advantageously tied to the country's growth drivers – agriculture, mining and chemicals – and this would provide increasingly strong growth in the future. The Government's thrust in the infrastructure and mining sector would further enhance growth opportunities for key products".

The Company's new 300,000 MTPA project to support the mining sector is strongly underway and would be commissioned in the latter half of FY2011. Once commissioned, the company would be the fifth largest producer of the product in the world deriving considerable economies of scale that would further contribute to the company's performance in future. The new 450 MTPD Nitric Acid plant is also expected to be commissioned soon. This would be supported by in-house ammonia as well as imported Ammonia through the company's new JNPT Ammonia storage tank.

The company's upgraded Lab & Diagnostic facilities for soil/plant testing is poised for accreditation shortly further strengthening the Saarrthie business.

Ishanya, India's largest Specialty Mall for interiors and exteriors crossed over 1.5 million footfalls with around 35% conversions, among the highest in the country. Future plans for Ishanya are being evolved on the basis of customer feedback. The basic business model having been established, the company is confident that Ishanya will emerge as one of the finest landmark destinations in shopping centers in India.

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

The scrip is currently trading at around Rs 82 per equity share on the BSE.