Shree Pushkar Chemicals & Fertilizers Ltd Management Discussions

1. Macroeconomic & Industry Overview: 1.1 Economic Performance

In FY2024-25, Indias GDP growth is forecast at 7%, reflectingan upward revision from previous estimates. Resilient performance across manufacturing, agriculture, and services has contributed to this positive outlook. India is expected to sustain its growth momentum, benefiting from demographic advantages and a rising middle-class population. The governments focus on infrastructure through initiatives such as Make in India and the National Infrastructure Pipeline has supported the economys transformation. Efforts to promote digital transformation, financial inclusion, and the development of smart cities have led to increased economic activity across both urban and rural areas. Additionally, the governments commitment to digital payments and cashless transactions has enhanced in tax collections, with gross GST collections reaching Rs. 22.1 lakh crore in FY25, registering a 9.4% year-on-year increase. This reflects firm consumer demand and robust business activity.

Trade and logistics indicators also continued to strengthen. E-way bill generation expanded, reflecting the growth of trade and logistics infrastructure. Similarly, rose in e-toll collections indicates solid progress in infrastructure development and the transportation sector. These indicators underscore Indias economic resilience, with sustained momentum in goods movement and freight.

The agricultural sector remained supportive during FY25, with favorable monsoon conditions leading to record foodgrain production. Government initiatives such as the PM PRANAM Scheme, which promotes reduced chemical fertilizer usage and encourages sustainable agricultural practices, are aligning with the industrys long-term growth trajectory. These developments have created a positive environment for the fertilizer industry, supporting stable demand.

Key indicators for FY25 reflected steady progress. E-way bill generation grew, highlighting stronger activity in logistics and supply chain networks. The favourable monsoon supported record foodgrain production, which has had a direct impact on fertilizer demand and is expected to maintain strong momentum as agricultural productivity improves. The governments continued reforms and emphasis on promoting sustainable agricultural practices have created an enabling environment for growth in eco-friendly fertilizers.

2. Company Overview & Strategy: 2.1 Strategic Growth and Vision

Shree Pushkar Chemicals & Fertilisers Limited capitalised on robust demand across both the chemical and fertilizer markets in FY25, achieving total revenue of Rs. 806.3 crore, reflecting an 11% year-on-year growth. Revenue from the chemical segment stood at Rs. 422.51 crore, while the fertilizer segment contributed Rs. 383.77 crore. product portfolio and its resilience in addressing market ThisperformanceunderscorestheCompanysdiversified opportunities.

The Company continued to focus on sustainability-led growth, with strategic investments to expand production capacity while prioritising environmentally responsible practices. The commissioning of a 9.52 MW solar power capacity at our Ahilyanagar facility demonstrates its commitment to energy cost reduction and minimising its carbon footprint. In addition, the Company maintained a strong emphasis on raw material security, particularly rock phosphate, which is critical for its fertilizer business. This proactive strategy has supported stability in sourcing key inputs and mitigated risks associated with global supply chain disruptions and price volatility.

Sustainability remains integral to Shree Pushkars strategic framework. The 9.52 MW solar installation at the Ahilyanagar facility is already contributing to improved operational the Companys broader goals of responsible manufacturing and reduced environmental impact. Alongside renewable energy initiatives, Shree Pushkar has reinforced its raw material procurement strategy, maintaining a reliable supply of key inputs such as rock phosphate, thereby strengthening its ability to manage price fluctuations and ensuring production stability. These measures support the Companys long-term vision of developing a more environmentally conscious and resilient business model in both the chemical and fertilizer sectors.

3. Industry Structure and Developments: 3.1. Chemical Industry Overview

As the worlds sixth-largest producer of chemicals, India holds a strong position to expand its market share, particularly in dye intermediates and specialty chemicals. dyestuffsector remained resilient, with India contributing The approximately 16% 18% of global dyestuff exports. DuringFY25,Indiasdyestuffexports were valued at Rs. 14,712 crore, reflecting consistent growth over previous years. The reactive dyes market is projected to grow at a CAGR of 8.09% through 2032, supported by demand from the textile and apparel industries. Shree Pushkar, with its established presence in dye intermediates, is well-positioned to benefit from these trends. The increasing preference for bio-based and sustainable chemicals presents further opportunities for the Company to expand its portfolio in line with industry shifts towards eco-friendly solutions.

India continues to rank among the largest fertilizer producers globally, with total production reaching 42 45 million tonnes in FY25. The governments initiatives to promote self-reliance through schemes such as PM PRANAM and Atmanirbhar Bharat have supported domestic production while aiming to reduce import dependency. In FY25, Indias fertilizer imports were approximately 18 million tonnes, highlighting the existing gap the industry is working to address. Shree Pushkar has benefited from these supportive policies by expanding its fertilizer production capacities. The Companys focus on eco-friendly fertilizers is aligned with the governments vision for sustainable agricultural practices. Revenue from the fertilizer segment reached Rs. 383.77 crore during FY25, reflecting its meaningful contribution to the Companys overall performance. The emphasis on integrated nutrient management and sustainable inputs has created opportunities for Shree Pushkar to further strengthen its market position in the eco-friendly fertilizer segment, in line with global shifts towards green agriculture.

4. Financial Performance:

Shree Pushkar Chemicals & Fertilisers Limited delivered strong financial performance during FY25, with total revenue of Rs. 806.3 crore, representing an 11.0% year-on-year increase. The chemical segment contributed Rs. 422.51 crore, while the fertilizer segment generated Rs. 383.77 crore, demonstrating a balanced growth trajectory across its core businesses. The Company reported EBITDA of Rs. 83.9 crore for the year, reflecting a 38.2% increase compared to the previous year. The EBITDA margin improved to 10.4%, supported by operational efficiency Profit After Tax stood at Rs. 58.6 crore, an increase of 58.2% year-on-year, highlighting the Companys focus on optimising resources and maintaining strong growth momentum.

5. Operational Performance:

Shree Pushkars operational performance in FY25 was marked by improvements in capacity utilisation and strengthened raw material procurement processes. The Company optimised production capacity at its chemical and fertilizer plants to meet growing demand in both domestic and international markets.

Proactive procurement strategies, including long-term contracts and supplier diversification, enabled Shree Pushkar to maintain a consistent supply of key raw materials such as rock phosphate. These efforts helped mitigate risks associated with global supply chain disruptions and price volatility, ensuring production stability throughout the year.

6. Opportunities and Threats: A. Opportunities

Shree Pushkar is well-positioned to benefit from several growth drivers in the coming years. The global chemical market is projected to reach USD 304 billion by 2025, with specialty chemicals and dyestuffs supporting this expansion.

As a leading producer of dye intermediates, the Company is positioned to capture a meaningful share of this growth, especially as demand for sustainable and bio-based chemicals continues to rise.

In the fertilizer industry, Indias focus on self-reliance and sustainable agricultural practices under government for the Company. Investments in eco-friendly fertilizers, along with a initiativesprovidessignificant robust raw material procurement strategy, are expected to maintain Shree Pushkars competitive advantage in the domestic fertilizer market.

The Companys initiatives in solar energy and green manufacturing processes also create long-term opportunities, improving cost efficiency while supporting its sustainability agenda friendly solutions, Shree Pushkar is well-placed to serve this evolving market demand.

The chemical and fertiliser industries continue to face external and structural challenges. Rising environmental scrutiny and stricter regulatory norms in India and export markets necessitate ongoing compliance investments, particularly in effluent treatment, renewable energy adoption and waste management. risk, as these areVolatility influenced keyinputcostsremainsasignificant by global commodity cycles and geopolitical uncertainties. Any sustained increase in these costs could affect margins. Additionally, currency fluctuations and movement in global trade policies may create pricing pressure in export markets. Rising competition in both domestic and export markets, particularly in dyes and dye intermediates, also poses the risk of price undercutting and margin compression. For the fertiliser business, performance remains closely linked to monsoon patterns and the overall health of the rural economy. Unpredictable rainfall and climatic changes can affect crop yields and fertiliser demand. Further, any changes in government policies relating to subsidies or nutrient-based pricing structures couldinfluencemarket dynamics.

7. Segment–wise or Product-wise Performance:

The standalone vertical wise quantitative Sales for the Financial Year 2024-25 vis-a-vis that of Financial Year 2023-24 is as under:

8. Outlook: A. Chemicals

Global demand for dyes and dye-intermediates is stabilizing as brand and retailer destocking has largely ended in 2024, supported by easing inflationand selective restocking. At the same time, regulatory requirements are becoming stricter, with brands introducing sustainability programs that raise standards for traceability. Europes REACH framework is also expanding, increasing the need for safer and substitute chemistries. In India, textile exports are showing early signs of recovery, though they remain sensitive to freight costs and tariff changes. Overall, we see a gradual improvement in demand for reactive dyes and intermediates, though ongoing regulatory and trade-related challenges may keep pricing and product mix under pressure.

Fertilizer markets show tight but improving supply dynamics. Chinas export restrictions on phosphates from late 2024, along with a mid-2025 rebound in Sulphur prices have kept input costs volatile, though the situation should stabilize as new capacity comes on stream. In India, government support remains strong, with revised NBS rates for Kharif 2025 ensuring affordability and steady demand for phosphatic products like SSP and NPK. The focus on balanced nutrition and soil health is also strengthening. With forecasts of an above-normal monsoon, fertilizer demand is expected to remain healthy, though regional weather risks persist. Overall, we see stable domestic demand, while careful management of input costs and working capital will remain important.

9. Risks and Concerns:

The Company continues to face risks linked to raw material price volatility, particularly for phosphate and potash, which are critical inputs for the fertilizer sector. Despite long-term supply agreements and supplier diversification, fluctuations in global markets may affect input costs and margins.

Weather patterns, including an unpredictable monsoon, also present a risk for the fertilizer business, potentially impacting agricultural yields and thus fertilizer demand. Although risk mitigation strategies have been implemented, climatic variability remains a concern for consistent performance.

Additionally, any tightening of environmental or compliance regulations could lead to increased investment requirements to ensure adherence, particularly for smaller industry players, potentially affecting sector competitiveness.

The Company has established robust internal control systems designed to ensure the orderly and efficient conduct of its business, adherence to policies, the safeguarding of assets, and the prevention and detection of fraud and errors. These controls also help ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial information in compliance with applicable laws and regulations.

The Statutory Auditors, while conducting the statutory audit, review and evaluate the internal controls, with their observations being discussed with the Audit Committee of the Board. The Company continues to monitor its internal controls through regular internal audits and by leveraging ERP systems to enhance operational oversight. These measures collectively support a framework of sound corporate governance and compliance across its business activities.

As on 31st March 2025, the Company employed 570 individuals across its various facilities in India. Shree Pushkar considers its employees its most valuable asset and remains committed to fostering talent through continuous development, engagement, and retention initiatives. The Company has undertaken various programs to strengthen employee capabilities and promote a culture of growth and inclusivity.

Amidst the expanding business operations, industrial relations remainedcordialduringtheyear,withnosignificantdisputes reported. The Companys focus on maintaining a motivated and skilled workforce continues to support its long-term strategic objectives.

The Company remains committed to investing in green energy and sustainable practices, which are expected to enhance operational efficiencies and align with global sustainability priorities. The Company also plans to strengthen its presence in emerging markets, particularly in the Asia-Pacific and African regions, where demand for fertilizers and specialty chemicals is projected to rise. Through its focus on innovation, cost optimisation, and sustainability-led growth, Shree Pushkar intends to build on its market position and create long-term value for its stakeholders.

13. Discussion on financial performance with respect to operational performance:

Viewing the operational performance over the years, the Company has till last year been maintaining steady progress over the years in terms of sales and profits. However, the Company has still been maintaining its operational efficiency as can be observed from the cost of raw material to sales and the profitability margins such as EBIDTA margin and PAT margin.

Disclosure on change in Return on Net Worth as compared to the immediately previous financial year along with a detailed explanation thereof is not applicable for this Financial Year. CAUTIONARY STATEMENT: Some of the statements in the report may be forward looking and are stated as required by applicable laws & regulations. Many factors may affect the actual results, which could be different from what the Directors envisage in terms of future performance and outlook. The Companys Performance is dependent on several external factors such as performance fluctuationof pricesofrawmaterialandfinishedproducts and alsomonsoons,governmentpolicy, their availability, which could adversely affect the operations of theCompany.