Analyzing...
Sorry, please continue.
Yes, so it's like and then it says that the state government has mandated a minimum of 30% net profit or 5% net profit, which is higher to be a minimum level of dividend declared for shareholders. However, it has been mentioned in this order that this is the only minimum level and maximum permissible level of dividend should be declared. So what you are saying, sir, and what is available in the Money Control is totally contradicting. So I would say this one.
Okay. I'm Ashwin Shah answering to your point. In fact, we do not know where from Money Control has got the information. Point number one. Point number two, we have not and we cannot share this circular to any of the stakeholders because it is an internal circular issued by the Government of Gujarat to its companies promoted over a period of time. So the authenticity we do not know.
But as such, the intention of the Government of Gujarat is to get a positive note and positive intention. The Government expects the companies to give a good return to the shareholders to also ensure that the activities and the corporate actions are done in such a way that the shareholders wealth improves over a period of time. That is what our perception is. Okay.
Okay. So coming to my other question that considering the prices of raw material during this Q2 and currently and considering the prices of, for example, the product which we manufacture during Q2 and now, how do we see the scenario like that? Are we positive or are we negative during the current quarter?
Okay. [am D V Parikh. As far as volume is concerned, it is stable.
It is bad. No, sir, your word is missing. So far volume is concerned, it is? Stable. It is stable. And prices, there are ups and downs, but no major corrections which we have witnessed. And this keeps on changing from period to period, day to day. So making a prognostic for the whole period is not right when it comes to price. Volume part, our Head of O&M has already explained that there are no practical issues from the plant side, operation side.
And the raw material prices have softened or like are stable? As compared to last year, softened, yes. No, no, Q2, Q2 September? Page 14 of 19
As compared to Q2, more or less, same.
And did we take any price hike from October 1 till now for any product? Output product?
Did we take any hike in the prices of any of our product from October 1 till now? Output product?
Did we take any hike? Did we increase the price of any of our product from October 1 till now?
So we want to clarify, is it output product or input, you are asking?
No, no, no, sir, [ am saying the price of a finished product.
This is what [ am saying, output product is finished product. Output finished product.
Our marketing colleague will answer that. Please, sir. Please, sir.
Sir, not increase in any product so far, because raw material prices going down and we have kept our price almost at the steady or slightly reduction side.
Thank you for the follow up opportunity. Just one question, what, I mean, could you give any idea regarding the asset turnover we are looking at? Asset turnover? Asset turnover ratios. Asset turnover ratios.
So, last year it is already in the annual report. Okay.
This year, it's going to be less than that, depending upon how we fare in terms of the revenue side.
So like, once all our, capex plans, they, start coming into play like, say, from FY25, 26, can we see an increase in the turnover? Like, and if from what, if you could guide a timeline if possible? Page 15 of 19
What kind of timeline?
So like, in case we, as you said, we might take a dip in the asset turnover in the current year. So when can we start seeing the improvement in the gross asset turnover or net asset turnover as you would, say, FY26 or 27? If briefly, if you could give some color on that?
Forecasting the marketing projections. So, okay, I'll request our marketing colleague to tell us the scenario up to FY 26, 27. Normally, in a chemical sector, it is difficult, but let's see.
Manish Upadhyay. Normal chemical market is normally growing. Okay.
Normally growing. Of course, it all depends on the raw material price. So how price is going to behave depends on the raw material prices. So it's not difficult to predict at the moment how will be the scenario. Okay. Yes.
Okay, okay. So my question basically was that once we place, you know, our new expansion plans in place, once they are in place and our revenue starts to increase, when can we see such an improvement? Optimistically from, say, FY26, 27 or, you know, four, five years hence is what my question is.
So, you are asking about the project revenue when they start coming in?
Yes. And what are the peak revenues they canreach? Yes, it will be, you know, beyond 26 only, you know, we'll be seeing that, you know, real increase in revenue. Thank you for taking my question.
I missed the capex plans, you said it's INR4,800 crores for the next five years. What was the year-wise breakup? You said FY24, current year 200, FY25, 700. After that I missed, if you could please repeat.
Subsequently, it is 1500 and 1200, 1200, you can say. These are tentative figures.
Okay, but this is for all the 4 megawatt solar power plant till the Ammonia expansion, which is mentioned in the presentation, correct?
Yes, that also includes, you know, our project for which, you know, bidding is going on, that is, you know, weak nitric acid 3 and AN well 2. And also... Page 16 of 19
That is there in the presentation. Pardon? That is there in the presentation. Yes, yes.
So, the ongoing project is 4 megawatt solar power plant, coal-based cement power plant, TDI 1, 2, then 10 megawatt electrolyzer-based green hydrogen project, weak nitric acid, ammonium nitrate prints and Ammonia expansion. These six projects, correct? Yes. And, sir, the real impact of the increase in revenue will be only from FY27 or FY28-29, according to you? Beyond 26, you will be able to see. Beyond 26, so from FY 27? Yes.
So, with respect to the spreads across the products, say for example, TDI is one of the lowest ones and the Methylalanine Acetic Acid is at the highest one, one of the highest ones. So, will these spreads remain volatile? So, for example, Methanol Acetic Acid has more than doubled over the last three months. So, the Acid prices, Acidic Acid prices also have been very volatile.
So, is this sustainable or it will go back to normalized levels?
Manish Upadhyay from Marketing. Normally, raw material cost is different and finished product price is also different. Spread sometime may go narrow down or sometime it may increase also, decrease also.
It all depends on the volume of the import because all products are more or less we are competing with the import.
Okay. So, it will be as dynamic as it is. So, we might see a drop maybe in the next quarter or...
We are hopeful that normally this, whatever the ratio we have seen at the moment, definitely likely to be maintained. Or it may improve also. Okay. Because the last, this year, this particular financial first half year is not very encouraging. This year can be improved.
Okay. And one of the earlier participants had asked a question with respect to CNA and how its market dynamics are. So, my question is on a similar line with respect to the entire product portfolio. So, during the first half and especially in quarter one, we saw a lot of impact from the China dumping, China being aggressive in its pricing of its products. So, it seems that it has Page 17 of 19
receded to a certain degree. But I would like to get a sense from you, are we still chasing it at a substantial level and will it continue or will it recede further?
There are chances of the improvement because last, first quarter, first half, there was a hit because of the high price of the, low price of the urea, low price of the ammonia for the world.
So, one, they made, this ammonia is the main raw material for the CNA. So, CNA price and nitric acid price was on lower side. These are, it has already started improving and we are hopeful that it will likely to go up now.
Okay. So, by improving you mean the market dynamics will improve in our favor and not that the China dumping will work?
Price will definitely, it would like to improve. So, it will be favorable for us?
Maybe short term, maybe not improving, but if you see the second half totally, there are possibilities of the improvement because of the improvement in the ammonia price internationally. Okay.
So, that would be kind of favorable, in our favor also? Okay. And with respect to the oil price also, I think it was explained, but I did not understand properly. So, the gasification of the oil, the oil-based gas that we produce of ammonia, how is that priced? I was not able to understand that logic properly. It is not proper crude oil, the normal oil. So, how is that?
Okay. See, we source a differently value added kind of an oil, okay, known as FOHV. It is a variant of an oil with a different sulfur content and therefore, the pricing formula is configured accordingly and with some premium over the normal oil.
Okay. So, that is because of the sulfur content or is it something else?
Mainly sulfur content, tailor-made to our requirement.
Okay. And because we are also using that gas, [ heard late, right, correct me if I am wrong, this also helps us in other chemistries also, in industrial chemistries because the output products are also used in other chemicals? Yes, this is how it is configured.
So, going on, we would be trying to shift towards that and, you know, move away from the gas- based. Will that be?
We have two independent facilities. Gas-based is meant for exclusively urea and the rest is for chemicals and complex fertilizer both. Page 18 of 19
Okay, okay. So, it will be case-specific, use-specific?
See, the ratio will remain same. There won't be any change. Okay. Our plants are designed like that. Yes, I'm Ashwin Shah, Company Secretary.
I would like to extend our sincere thanks from GNFC management side for all the participants who actively participated and made this con-call of the investors a success. Also, we extend our sincere thanks to Anurag Services LLP for arranging this con call meet with investors to have exchange of information and get idea about the scenario about working of the company.
I also personally thank the representatives from the management, various verticals, head of the departments for actively participating and nicely responding to the queries raised by the investors. Thank you. Thank you one and all. Page 19 of 19