Event Participants
Executives
3 Deepak Beriwala, Pankaj Manjani, Punit Makharia
Analysts
6 Amit Mehendale, Harshil Solanki, Prit Nagersheth, Riddhesh Ram Gandhi, Saket Kapoor, Varun Sharma
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue from Operations | ₹281.1 crores | +10% YoY, +28.4% QoQ; growth driven by improved realizations despite lower sales volumes |
| Fertilizer Sales Value | ₹142 crores | +4% YoY; 51% of total sales, with volume at 66,527 MT vs 76,288 MT in Q1 FY26 |
| Chemical Sales Value | ₹138 crores | +17.1% YoY; 49% of total sales, with volume at 9,113 MT vs 14,837 MT in Q1 FY26 |
| Gross Profit | ₹89.2 crores | +6.3% YoY; margin at 31.9%, supported by improved realizations |
| EBITDA | ₹31.9 crores | +9.7% YoY; margin at 11.4%, reflecting operating discipline |
| Profit After Tax | ₹22.9 crores | +9.4% YoY; PAT margin at 8.2%, up from ~5.5% in recent past |
| Capital Expenditure | ₹20 crores (Q1 FY27) | Cumulative spend ₹209 crores vs planned ₹512 crores; funded via internal accruals and preferential issue proceeds |
| Cash & Investments | ₹125 crores (non-lien deposits) | Maintained comfortable liquidity to support ongoing capex program |
Geographic & Segment Commentary
Fertilizers: Sales value grew 4% YoY to ₹142 crores despite volumes declining 13% to 66,527 MT from 76,288 MT in Q1 FY26. Improved realizations offset volume softness; segment contributed 51% of total sales value. East Asia conflict-driven raw material challenges persisted during the quarter, but management indicates customer absorption of higher prices is underway.
Chemicals: Sales value grew 17.1% YoY to ₹138 crores with volumes down 39% to 9,113 MT from 14,837 MT in Q1 FY26 (driven by deliberate low-load acid plant operation due to high sulfur prices). Segment accounted for 49% of sales value. Management noted strong inquiry pipeline for chemicals to China (HF, KF, etc.).
Company-Specific & Strategic Commentary
Capacity Expansion: Ratnagiri Unit 5 and Unit 6 at advanced completion stage; together with Meghnagar expansion, these will add 4.5 lakh MT/annum fertilizer and 72,000 MT/annum chemical capacity. Trial runs expected by August-September 2026. Management deliberately holding back commissioning of Unit 6 until raw material (ammonia, sulfur) availability normalizes.
Land Acquisition: Purchased ~30,000 sq meters adjacent to Unit 1 at Lote Parshuram for ₹9.33 crores to support long-term expansion headroom at established manufacturing location.
Renewable Energy: 10 MW DC solar project at Nanded nearing completion; once commissioned, total installed solar capacity will reach 20.6 MW DC, supporting sustainable operating model.
Funding Strategy: Planned capex of ₹512 crores funded through internal accruals and preferential issue proceeds; management emphasized "why waste time waiting for utilization" when strategic land banking strengthens future growth positioning.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| FY27 Revenue | ~₹1,600 crores (₹1.6 thousand crores range) | Management reiterated target from last call; Q1 revenue of ₹281 crores on track to achieve this |
| FY27 PAT Margin | ~9% | Improved from 8.2% in Q1; management optimistic about further improvement |
| Q2 FY27 Performance | Better than Q1 FY27 and Q2 FY26 | Management expects Q2 to exceed both Q1 FY27 and Q2 FY26 (Q2 FY26 revenue was ~₹250-255 crores); Penned as "much better than last year Q2" |
| Unit 5 & 6 Commissioning | Trial runs August-September 2026 | Raw material (ammonia, sulfur) availability normalized; customer price absorption underway |
| Strategic Approach | Measured commissioning given raw material volatility | Management prioritizing margin protection over volume maximization |
Risks & Constraints
| Risk | Context |
|---|---|
| Raw Material Volatility | Ammonia and sulfur shortages caused by Hormuz closure continue; management had to run acid plants at low load and stop dispatches in March expecting price spikes. While management believes prices have "reset" and availability improved, Hormuz remains closed, creating ongoing supply chain uncertainty. |
| Volume Decline Risk | Both fertilizer (-13%) and chemical (-39%) volumes declined YoY; management views this as deliberate and temporary, but if demand doesn't recover as expected, revenue targets could be at risk. |
| Execution Risk on Expansion | Capex program of ₹512 crores with ₹209 crores spent; any delay in commissioning or cost overruns could impact balance sheet and earnings. Management committing to disciplined capital deployment. |
| West Asia Conflict Escalation | Ongoing conflict was a key driver of raw material issues; further escalation could disrupt supply chains again and force another round of price adjustments. |
Q&A Highlights
Volume Decline vs. Realization Focus
- Question: Was the Q1 performance expected? Given lower volumes, how do you see the year? (Saket Kapoor)
- Answer: Management stated they deliberately slowed dispatches in March expecting price increases from West Asia conflict; Q1 delivered 10% better revenue and profitability despite volumes being lower. Punit Makharia emphasized "adding value to the business" as priority over volumes. He expects FY27 to be "much better than last 2-3 years" with volumes returning to original levels and margins improving toward 8-9%.
Unit 5 and Unit 6 Commissioning and Peak Revenue
- Question: Once Unit 6 is commissioned, what could peak revenue be at current prices? (Amit Mehendale)
- Answer: Punit Makharia indicated that with Unit 6 operational and the present trajectory, revenue of ~₹1,700 crores "will not be a difficult task." Unit 6 expected to start during the second fertilizer season of FY27. Management also confirmed advanced negotiations with raw material suppliers, with trial runs expected in August-September.
Q1 Results vs. Q4 Commentary Alignment
- Question: Q4 was weak because orders were deliberately deferred into Q1; but Q1 results don't seem to reflect a significant upside from price movement. Why? (Riddhesh Ram Gandhi)
- Answer: Management clarified that most deferred orders don't carry over to the next quarter—customers won't wait to buy. They maintained that Q1 FY27 revenue and EBITDA were both
10% higher than Q1 FY26 in spite of lower volumes, which itself demonstrates the price spike benefit. Management guided Q2 FY27 to be "much better than Q2 FY26" (₹250-255 crores revenue) and expects Q2 to be 10%+ better.
Acid Plant Operations and Sulfur Economics
- Question: Why did chemical volumes drop so sharply? (Prit Nagersheth)
- Answer: Management explained acid plants were deliberately run at low load due to high sulfur prices—"it doesn't make a business sense" to produce at current input costs. With sulfur and ammonia availability normalizing, management plans to restart Unit 6. Inquiries for chemicals to China (HF, KF, etc.) are picking up, showing rapid market shifts.
Integration Strategy and Battery-Grade Phosphoric Acid
- Question: Any plans for battery-grade phosphoric acid or other new products? (Harshil Solanki)
- Answer: Management stated battery-grade materials are "not in our agenda as of now." Primary focus is completing and stabilizing current expansions; phosphoric acid produced will be used for backward integration into finished products. The goal is better value per ton, with volumes building gradually.
Key Takeaway
Shree Pushkar delivered a steady Q1 FY27 with revenue of ₹281.1 crores (+10% YoY), EBITDA of ₹31.9 crores (+9.7% YoY), and PAT of ₹22.9 crores (+9.4% YoY), driven entirely by improved realizations as deliberate volume moderation (fertilizer volumes down 13%, chemicals down 39%) cushioned the impact of West Asia conflict-driven raw material shortages. The company maintained its FY27 guidance of ~₹1,600 crores revenue and ~9% PAT margin, with management confident of surpassing Q2 FY26 performance and reaching ₹1,700 crores revenue once Unit 6 commences in the second fertilizer season. Strategic focus remains on executing the ₹512-crore capex program (₹209 crores spent) across Ratnagiri Units 5/6 and Meghnagar expansion, strengthening backward integration, and building land bank at Lote Parshuram for future growth. Key watch points: raw material availability (ammonia, sulfur) with Hormuz still closed, acid plant restart economics, and disciplined commissioning of new capacity despite demand recovery signals from China. Management's measured approach—prioritizing margin protection over volume—appears prudent but leaves FY27 targets contingent on sustained price realization and raw material normalization through the coming quarters.