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Aditya Sharma    


Mumbai, India

I am a MBA students and simultaneously reading on capital market to get some knowledge on fundamental research where I more focus on business model, opportunity size of the industry and their related parameters who help me out to find out great businesses for the investment. Nevertheless, I always look forward to learn about grow further into the same.

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Contributor since: 2022

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PARADEEP

Comments: 0 | Likes: 1 | Current Price: ₹ 69.11


Paradeep Phosphates Ltd

Q3FY23 Result Analysis


Business Overview

Paradeep Phosphates is India’s second largest integrated phosphatic private sector company

  • Paradeep Phosphates Limited (PPL) is India’s second largest private sector  phosphatic company with a capacity of 3.0 MMTPA (finished fertilizers NPK, DAP and Urea).
  • Diverse consumer product portfolio of phosphatic grades of fertilizer:
    • N-10, N-12, and N-20: Core NPK products
    • N-14, N-19 and N-28: Recent NPK products
    • DAP
  • Industrial supplier of Phospho - gyp sum, Zypmite, Sulphuric Acid and Hydro fluorosilicic Acid (HFSA)
  • PPL also trades in Muriate of Potash (MOP)

Q3FY23 Performance Highlights

  • EBITDA for the quarter is Rs. 3,773.1 million, up by 76% as compared to Rs 2,147.2 million of the corresponding quarter of previous year.
  • Revenue from Operations is Rs. 43,984.4 million, up by 62 % as compared to Rs. 27,093.3 million of the corresponding quarter of previous year.
  • Total fertilizers produced in Q3 FY 2023 is 621,815 MT, up by 66% vis a vis 374,060 MT in Q3 FY 2022.

Business Highlights

Goa Plant is fully stabilized, Paradeep Plant is running at 5,000 MT of daily average production from December 2022:

Q3 PPL Operational Highlights

Q3 FY23: Brownfield Backward Integration

Phosphoric Acid

Sulphuric Acid

Quarter Performance Trend

Q3FY23 Performance Highlights

  • EBITDA for the quarter is INR 377.31 Cr, up by 76 % as compared to Rs 214.72 cr of the corresponding quarter of previous year
  • Revenue from Operations is INR 4,398.44 Cr, up by 62 % as compared to INR 2,709.33 Cr of the corresponding quarter of previous year
  • Total fertilizers produced in Q3 FY 22-23 is 6,21,815 MT, up by 66% vis a vis 3,74,060 MT in Q3 FY 21-22

Q3 Business Highlights

Paradeep Phosphates Ltd (PPL) today declared its financial results for the quarter ended 31st December, 2022. The Company reported income from operations at Rs 4,398.44 Cr, up by 62 % as compared to Rs 2,709.33 Cr of the corresponding quarter of previous year. EBITDA for the quarter is Rs 377.31 Cr, up by 76 % as compared to Rs 214.72 cr of the corresponding quarter of previous year.

Commenting on the results, Mr. S Krishnan, Managing Director, Paradeep Phosphates said,

“During the third quarter, we have been able to operate both the plants steadily with the help of our strong supply-side linkages notwithstanding a volatile global macro environment.

Post acquisition of the Goa plant on June 1st 2022, we are happy to report that we have now fully stabilized the Goa operations and the plant has been steadily producing both Urea and phosphatic fertilizers. We have been able to produce 2,61,550 tons of finished fertilizers this quarter at our Goa Plant with several NPK grades (viz. N10, N14, N19, N20, N24) and 1,24,271 MT of Urea.

At our Paradeep Plant, we completed the revamp of all granulation trains and all four plant-lines have been running since November 2022, resulting in a daily average production run-rate of 5000 MT December 2022 onwards, thereby meeting the revamp targets.

We are keen to continue such a steady rate of production at both our plants with the right product mix aligned to the market-need. With an aim to further improve our earning potential, we have embarked upon two brownfield backward-integration projects -  a  2 Lakh ton of phosphoric acid capacity by Q1 of FY 24 and 6 Lakh ton of sulphuric acid capacity over the next 2 years. The sulphuric acid capacity will additionally enable us to generate green captive power.

At a macro-economic level, the outlook remains positive with prices correcting and global markets further improving post China opening up.” 

Capex and Production Capacity

  • After the completion of revamp of all four granulation trains by November 2022, the Paradeep Plant has achieved highest ever monthly production of 1,44,355 MT of fertilizers during December 2022.
  • Total finished fertilizer produced at Paradeep plant this quarter 3,61,000 MT.
  • Goa fertilizer plant, which was acquired on 01 June 2022, has produced 2,61,550 tons of finished fertilizers in Q3 this year which includes 1,24,271 MT of Urea.
  • Key raw material prices, albeit high during the start of the quarter, have seen a steady decline especially towards the end of Q3 in FY 22-23.
  • Finance cost has increased due to increase in subsidy outstanding, currency volatility and a slightly higher long term borrowing vis-à-vis the same quarter of previous year.
  • Given growing food demand and “area under crop cultivation” in the country, supported by good monsoons and high reservoir levels, fertilizer demand is expected to remain firm.

About Paradeep

  • Paradeep Phosphates Limited (PPL) is one of India's largest private sector phosphatic players, producing a wide range of phosphatic grades including DAP, N-10, N-12, N14, N-19, N-20 and N28. The company’s Goa Plant also produces Urea. PPL is a key supplier of fertilizers to the states of Maharashtra, Karnataka, Odisha, Bengal, UP, MP, AP, Telengana, Chattisgarh and MP. The company is also a major supplier of various industrial products like Gypsum, Zypmite, HFSA (Hydrofluorosilicic Acid), Sulphuric Acid & Ammonia.
  • In May 2022, PPL successfully completed the INR 1500cr initial public offering (IPO) and used part of the proceeds to complete the acquisition of the 1.2 million MT fertilizer plant at Goa. PPL’s current promoter, “Zuari Maroc Phosphates Pvt Ltd”, is a 50:50 joint venture between Zuari Agrochemicals and the OCP Group of Morocco.  
  • PPL currently has a total capacity of 3 million MT, of which 0.4 million MT is Urea and the balance 2.6 million MT is phosphates. The company has 2 large manufacturing facilities - one at Paradeep in Odisha and another at Zuarinagar, Goa.
  • The company's products are marketed under the brand names of "Jai Kisaan" and "Navratna" with over four decades of brand equity. The company has a customer base of 8+ million farmers spread across 16 states. 

Disclosure:

I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Business relationship disclosure:

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Stocx Research Club). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure:

Disc - Given stock name in the article is for knowledge purpose only, not an recommendation. Source of the data is - Company presentation, press release, conference call

Disclosure legality:

I am not a SEBI Registered individual/entity and the above research article is only for educational purpose and is never intended as trading/investment advice.

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