Additionally, I’m a little unsure on the long-term pricing stability for Ammonium Nitrate which is basically contributing to 50-60% of company’s EBITDA currently.
- Demand – As per their presentation, industry is highly counting on 11% YoY growth from both coal and steel industry (combined 20% growth in TAN deman). Not exactly sure, how sustainable this is, please chime-in
- Supply –
Here, I have a question. Is there any distinction in the ammonium nitrate being produced by the company for which it’s commanding higher market share or is this due to other players not having their own capacity.
- Russian production is at pre-war levels and they’re doing 1 MTPA additional capex this year
- Indian capacity (only counting major players) would pretty much break-even with FY26 projected demand and any additional dumping could lead to pricing pressure.
Below is a very rough back of the envelope calculation:
| Market share | 44% | |
|---|---|---|
| Capacity DFPCL | 5,37,000 | |
| Current Domestic Market size | 12,20,455 | |
| Deepak cap addition | 50000 | FY25 |
| Deepak cap addition | 376000 | FY26 |
| Coal India cap addition | 660000 | FY27 (E) |
| Chambal cap addition | 240000 | FY26 |
| GNFC existing cap | 170000 | |
| FY26 expected capacity | 13,73,000 | |
| FY26 expected demand | 17,57,455 | 20% YoY |
| Delta | 3,84,455 | |
| Cap w/ Coal India (FY27) | 20,33,000 | |
| FY27 expected demand | 21,08,945 | |
| Delta | 75,945 |
Basically what I’m seeing is that everything needs to go right for the company to give good returns. If someone can help shed some light on what I might be missing.
Also, can someone help me out on how Ishmohit has projected 950-1000 Cr PAT growth for the company? Isn’t June supposed to be the biggest quarter for them and major capex are scheduled for FY26H2?
| Subscribe To Our Free Newsletter |
