Indian Phosphate Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The Fertilizer industry is one of the most important industries that plays a vital role in supporting agricultural productivity and food security through the production of phosphate-based fertilizers. The industry is characterized by its strong linkage with the agricultural sector, which remains the primary end-user of phosphate fertilizers. In recent years, the phosphate industry has experienced a dynamic shift influenced by several macroeconomic and geopolitical factors. These include increasing population-driven food demand, fluctuating commodity prices, government subsidies, trade restrictions, and environmental regulations. The growing emphasis on sustainable agricultural practices is also reshaping the industry, with increased investments in environmentally friendly mining practices and more efficient fertilizer formulations.

However, the fertilizer industry demonstrates moderate to low susceptibility to broader economic fluctuations compared to other industrial sectors. This is largely due to its inherent connection to agriculture, a sector that tends to remain relatively stable even during economic downturns. However, certain segments and dynamics within the phosphate industry do reflect sensitivity to macroeconomic conditions.

Indias Phosphate fertilizer industry is the third in the world, and is expected to grow to USD 5.6 billion by 2026. Its sixth largest employer in the country, after the textile industry, with over 1 million people employed. (according to TechSci Research)

Despite growing global vulnerabilities, better demand conditions, settled GST implementation, expansion from growing investments, continuing positive effects of reform policies and improved credit off take especially in the industrial sector the take of phosphate industry has been steep in Rajasthan and has galloped ahead of other major cities in India.

INDIAN AND RAJASTHAN PHOSPHATE INDUSTRY SECTOR:

India is among the worlds top consumers of fertilizers, yet remains significantly dependent on imports for Phosphatic Fertilizers. To reduce this dependence and enhance self-reliance, the government has been actively promoting domestic production of economic fertilizers.

The Indian and Rajasthan phosphate industry, especially for companies engaged in manufacturing of fertilizers and Chemicals, is poised for sustainable growth. Proximity to raw materials, government incentives, and rising market demand provide a solid foundation for expansion, while strategic focus on efficiency, and innovation leading to long-term competitiveness and growth.

STRENGTH:

• Established market presence and longevity: Company is a well-established Public Limited Company on NSE Emerge and the pioneering unit operating for more than 26 years. The Brand of the Company namely "Ankur SSP” is well established and accepted in the market.

• Strategic manufacturing location: Plants of the Company are located at proximity to availability of raw material and high demand zones ensuring efficient distribution and reduced logistic costs.

• Diversified Product portfolio:

• Company produces a wide range of products including:

Manufacturing of Single Super Phosphate (SSP), Linear Alkyl Benzine Sulphonic Acid (LABSA-90%), etc.

• The Companys continued focus on adding sustainable and innovative products.

WEAKNESS:

• The Fluctuation in the crude prices can affect the raw material cost.

• Dependency on government fertilizer subsidy policy

• High Working Capital Intensive

OPPORTUNITIES:

• Expanding new geographical markets - Tamil Nadu and Maharashtra

• Backward integration into production of Sulphuric Acid at Tamil Nadu THREATS:

• Economic Recession

• Natural Calamities e.g. drought etc.

INDIAN FERTILIZER INDUSTRY OUTLOOK:

The outlook for the phosphate industry remains positive, particularly for companies engaged in the manufacturing of Fertilizers and Chemicals.

As per newspaper article published by Indian Express, FY 25 was a good year for Indian agriculture, in which both tractors and fertilizers notched up impressive sales growth. The tractor and fertilizer sales data act as a mirror for farm sector growth.

As per researchandmarkets.com analysis report, the fertilizer market in India is expected to grow from US$ 43.54 billion in 2024 to reach US$ 74.06 billion by 2033, with a CAGR of 6.08% during the period from 2025 to 2033.

Rising demand for cost-effective and soil-friendly fertilizers, driven by the governments continued support through the Nutrient-Based Subsidy (NBS) scheme, is expected to strengthen the Fertilizer segment. The economical products of the fertilizer division are gaining prominence as a substitute for costlier DAP, especially in sulphur-deficient soils, which supports its long-term demand.

The products of the chemical division being a key raw material in the detergent and cleaning industry, is projected to grow steadily due to increasing hygiene awareness, population growth, and urbanization.

However, supply chain stability, raw material price volatility, and environmental compliance will continue to be key challenges. Companies that invest in technological upgradation, sustainable practices, and backward integration will be better positioned to capture long-term value.

RISK MANAGEMENT POLICY:

Your Company operates in a dynamic business environment which have a bearing on day-to-day operations and thus has adequate internal financial control systems to monitor processes, financial reporting and compliance with applicable regulations viz., legislative changes, financial market volatility etc. Moreover, Risk Management is an integral part of the business process. It is pertinent to note that existing systems are reviewed by Statutory / Internal Auditors and due reporting is made to the Audit Committee for identification of deficiencies and necessary time bound actions to be taken. The Committee constituted as per statutory requirements reviews the risk management periodically and ensure suitable policies / actions are taken to create sustainable value to all stakeholders.

INTERNAL CONTROL SYSTEM AND ITS ADEQUACY:

The Company has a proper and adequate system of internal controls to ensure that all assets are safeguarded and protected against loss from unauthorized use or disposition and all transactions are authorized, recorded and reported correctly. The systems are updated and monitored on a continuous basis. The Companys internal control systems are further supplemented by Internal Audit conducted by competent finance executives and periodic review by Management. The Company has clearly laid down policies, guidelines and procedures which form part of its internal control system.

The Audit Committee of the Company consists of Independent Directors who possess expert knowledge and vast experience. They periodically review accounting records and various Accounts/statements prepared by the accounting department. They advise the senior management of the Company for any precautionary steps to be taken, as required from time to time. During the year under review, four meetings of Audit Committee were held to review, inter alia, the internal audit/controls along with management comments and initiated follow-up actions thereon.

CORPORATE SOCIAL RESPONSIBILITY:

Our Corporate Social Responsibility is based on conviction rather than obligation. We extend our helping hands to fulfill ambition of deprived humans in our factory vicinity through direct or indirect monetary contribution and other requisite assistance as per the need.

INDUSTRIAL SAFETY, ECOLOGY & POLLUTION CONTROL

- Requisite approvals from respective authorities are well in place for operations of all plants.

- Safety trainings, mock-drill activities are regularly conducted and basic trainings are imparted to all workmen and staff at all plants.

- On-line monitoring as per the directives of pollution control authorities are installed and thus complying with the requirements.

SHARE CAPITAL:

The Paid-up Share Capital of your Company as on 31st March 2025, is Rs. 24,98,96,090 /- divided into 2,49,89,609 Equity Shares of Rs. 10/- each.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS:

Manpower is biggest strength in any Sector. The Company has maintained cordial relations with its employees across all levels of the organization during the period under review. Human resource continues to be core strength and always endeavors to work towards having satisfied workforce. The key HR objective is to ensure that our employees are aware of the role they are expected to play in the organization to be able to drive organizational momentum. Going ahead, the Company will continue to invest in its people to strengthen its delivery model.

DISCLAIMER:

The above Management Discussion and Analysis contains certain forward looking statements within the meaning of applicable security laws and regulations. These pertain to the Companys future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, economic growth in India, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, government policies and actions with respect to investments, fiscal deficits, regulation, etc. The shareholders and readers are cautioned that in the case of data and information external to the Company, no representation is made on its accuracy or comprehensiveness though the same are based on sources thought to be reliable. The Company does not undertake to make any announcement in case any of these forward-looking statements become materially incorrect in future or update any forward looking statements made from time to time on behalf of the Company.