Shree Pushkar Chemicals & Fertilizers LtdQ1 FY23Chemicals & Petrochemicals

Shree Pushkar Chemicals & Fertilizers Ltd

Q1 FY23 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→The company expects a revenue growth in FY '24, building on INR 684 crores in FY '23, which was up from INR 584 crores the previous year.
→They anticipate touching close to INR 900 crores in the current financial year under similar market conditions.
→With improvements and full capacity utilization, crossing INR 1,000 crores in revenue is considered achievable.
→Fertilizer volumes are expected to grow by 20%-25% in the financial year, especially with the addition of the new Deewanganj plant.
→Capacity utilization should improve as preventive maintenance and balancing equipment installations complete.
→Management remains conservative and cautious, focusing on sustainable growth rather than aggressive expansion or margin chasing.
→They foresee a possible turnaround or improvement in demand starting Q2 of the financial year.

Margin guidance

Category 3

→The company anticipates revenue growth in FY ’24 compared to INR 684 crores in FY ’23, expecting to approach INR 900 crores and potentially INR 1,000 crores with current capacities and market conditions (Pages 11-12).
→EBITDA margins have been around 10%, with recent margins dipping to about 5.5%-6% due to market pressures, but management aims to improve margins and maintain them at least at last year's levels (Pages 7-8).
→Q1 FY ’24 is expected to be weak with limited margin improvement, but management is optimistic about a turnaround starting Q2 (Page 13).
→The company is focused on consolidation and efficiency rather than aggressive capex in the near term, preparing to capture growth when market conditions improve (Pages 7,11).
→Overall, management expects gradual recovery in profitability and steady growth, with a conservative approach to protect cash and margins amid industry uncertainties (Pages 7,13-14).

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Fundraise plans

→As per the management commentary in the call transcript (Page 7), there are **no immediate plans for any major capital expenditure (capex)**.
→The company has recently completed a capex of around INR 175 crores, including Unit 5 Madhya Bharat and balancing equipment.
→The management is currently in a **consolidation phase** to stabilize new capacities and maximize productivity.
→There is **no mention of new fundraising through debt or equity** at this time.
→Any future significant capex or fundraising plans will be **informed to shareholders** when such announcements are made.
→The company is maintaining a **strong cash position with INR 94 crores in deposits**, aiding stability and sustainability without requiring immediate fundraising.

Order book

→The company experiences a routine business process where a certain quantity of production remains unsold at any given time, typically varying by about ±5-10%.
→There was no specific disclosure of a current or expected order book or pending orders during the call.
→The management emphasized focusing on improving business performance rather than discussing promoters buying shares or market issues.
→Demand pressure is noted, with a slow recovery expected; visibility on demand is limited.
→The company is cautiously optimistic about demand improving around Q2 of the fiscal year.
→Customers are advised to manage inventory and cash carefully given current market conditions.
→No explicit figures or details about outstanding order books or pending orders were mentioned.

Capex plans

Yes

→Recently completed a capex of approximately INR175 crores, including Unit 5 Madhya Bharat, balancing equipment, and solar initiatives.
→No immediate plans for any major new capex; the company is currently in a consolidation phase to fully establish and optimize new capacities.
→Maintenance and repair work is ongoing during this lean period to ensure facilities run at optimum efficiency.
→The company is cautious and conservative with further investments, focusing on sustaining business and preparing for future opportunities.
→Any future significant capex will be communicated to shareholders in due course.
→Expansion includes the recent startup of the Deewanganj plant in Q4, which adds capacity to the fertilizer business.

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1Shree Pushkar Chemicals & Fertilizers Ltd

Rev 3Mar 3

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