Concall notes:
- Q2 is a seasonally weak quarter due to monsoons.
Personal opinion: Q1FY23 was a once in a decade quarter. To show you just how high TAN prices have risen, here’s a data point from a free source:
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Only God can tell you what TAN realisations will be H2, even if 7 different analysts on the concall ask the same question repeatedly. Price depends on the spread between ammonia and TAN, and how quickly one falls relative to the other.
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They’re now focusing on different end use for key products. Solar grade nitric acid, medical wipes for IPA, and total cost of operations for mines instead of purely TAN.
Personal note: this affects realisations, not topline, as nitric acid is mostly consumed in house. Room for IPA capacities to go up.
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Fertiliser division saw significant RM cost pressures. Part of the ammonia plan is that it is common RM for any divisions that has an N in the name: NPK, Nitric acid and TAN.
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On the income tax issue, is due to something related to depreciation and goodwill. This part wasn’t clear on the line, but they think there is precedent to defend in court. Worst case will require a 20% deposit, or 100 Cr. Management is confident of beating it.
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Have spent 400 Cr. more this quarter on the ammonia capex, but net debt is only 130 Cr. higher than last quarter. Cash generation has helped.
D: Invested, biased. No transactions in the last 6 months.
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