Deepak Fertilisers And Petrochemicals : DFPCL Q4 FY 2025 Earnings Call Transcript

28thMay, 2025

The Secretary Listing Department

BSE Limited National Stock Exchange of India Ltd.

Phiroze Jeejeebhoy Towers, Exchange Plaza,

Dalal Street, Fort, Bandra - Kurla Complex, Bandra (E)

Mumbai - 400 001 Mumbai - 400 051

BSE Code: 500645 NSE Code: DEEPAKFERT

Subject: Management Transcript of Q4 FY 2025 Earnings Conference Call

Dear Sir / Madam,

Pursuant to the Regulation 30(6) read with Part A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements), Regulations 2015, please find enclosed the Management Transcript of the Earnings Conference Call held on 23rdMay, 2025 to discuss the financial results of the Company for the quarter & year ended 31stMarch, 2025.

The transcript of the Q4 FY 2025 Earnings Conference Call will also be made available on the website of the Company i.e. https://www.dfpcl.com/.

We request you to take the same on your record.

Thanking you, Yours faithfully,

For Deepak Fertilisers

And Petrochemicals Corporation Limited

RABINDRA

Digitally signed by RABINDRA KUMAR PUROHIT

+05'30'

KUMAR PUROHIT Date: 2025.05.28 16:56:49

Rabindra Purohit VP - Legal, Compliance & Company Secretary

Encl: as above

"Deepak Fertilisers And Petrochemicals Corporation Limited Q4 FY-25 Earnings Conference Call"

May 23, 2025

Management: Mr. Sailesh Mehta - Chairman and Managing Director, Deepak Fertilisers And Petrochemicals Corporation Limited Mr. Subhash Anand, President & CFO, Deepak Fertilisers And Petrochemicals Corporation Limited Mr. Suparas Jain - Executive Vice President, Corporate Finance, Deepak Fertilisers And Petrochemicals Corporation Limited Mr. Debasish Kedia - Senior GM, Corporate Finance, Deepak Fertilisers And Petrochemicals Corporation Limited Moderator: Mr. Harmish Desai - PhillipCapital (India) Private Limited Moderator: Ladies and gentlemen, good day, and welcome to Deepak Fertilisers and Petrochemicals Corporation Limited Q4 FY '25 Earnings Conference Call, hosted by PhillipCapital (India) Private Limited.

As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing '*' then '0' on your touchtone phone. Please note that this conference is being recorded. Please note that this conference is being recorded.

I now hand the conference over to Mr. Harmish Desai. Thank you. And over to you, sir.

Harmish Desai: Thank you, Avirath. Good evening, and welcome to the 4th Quarter and Full-Year FY '25 Earnings Call of Deepak Fertilisers and Petrochemicals Limited, hosted by PhillipCapital.

From the Management, we have Mr. Sailesh Mehta - Chairman and Managing Director; Mr. Subhash Anand - President and Chief Financial Officer; Mr. Suparas Jain - Executive VP (Corporate Finance); and Mr. Debasish Kedia - Senior GM (Corporate Finance).

I would like to thank the Management for giving us the opportunity to host this call. We will begin the call with Opening Remarks from Mr. Sailesh Mehta, followed by Mr. Subhash Anand for an update on financial performance, post which we will have a Q&A session.

Thank you. And over to you, sir.

Sailesh Mehta: Okay. Thank you. So, a very warm welcome to all of you for the Q4 and 12-month FY '25 earnings call.

I do hope all of you had a chance to review the presentations. But just from my side at the outset in terms of the headlines, I am indeed happy to share that Q4 top line grew by 28% and PAT bottom line grew by 21%. For the full year, the top line grew by 18%, and we crossed INR 10,000 crores. But the headline there is that PAT bottom line grew by 102%. It's almost doubled. Based on these good results and also balancing it out with the CAPEX plan, though the thought was to look at even higher dividends, but the Board in a conservative manner has recommended 100% dividend.

So now just to share some insights in terms of when I look at the year as a whole to look at the undercurrents and to try and share with you in terms of what we feel is panning out, what has worked. So somewhere, I see very clearly that strategy and execution coming together now and getting validated, revalidated in the P&L in the financial outcomes that we are seeing.

So, number one that we see is that our enhanced business focus, aligned to the India growth story is certainly continuing to be a very positive tailwind for all the businesses that we are looking at, in the sense for the fueling of the India growth story, the focus on coal for power, limestone,

cement for the real estate sector, infrastructure, all those are going to be continuing to be critical. And that is where our mining chemicals, technical ammonium nitrate, continues to be beautifully aligned.

Similarly, as the mid-income group grows, the move from basic rice, wheat, bajra to horticulture, fruits, vegetables is something that we are seeing as a continuing trend, and which is where our CNB business, Fertilizer business is very well aligned.

And similarly, our Industrial Chemicals business is riding on the alignment with China Plus One Specialty Chemicals and the Pharma sector. So, one dimension that we see is that this alignment with the India growth story not only is giving us a continued positive traction on the demand perspective side, but is also somewhere insulating us from the global volatility, which has somewhere emerged with all these tariff dimensions that are emerging.

The second and the more critical aspect that we are seeing is that our dedicated drive to move from commodity to specialty is continuing to gain grounds and give us a very positive traction. With the push that we have, overall, we are seeing that almost 22% of our revenues are now emerging out of this move into the specialty space.

The key contributor to the transformation from commodity to specialty is certainly the Crop Nutrition business, the Fertilizer business, where virtually now every product that we sell has somewhere a specialty offering. It is not the same as what anyone else in the industry are offering.

And all of our NPK, either is sold as NPK with growth promoter coating, which is giving a much higher boost to the nutrient use efficiency or in a major way, which is what has transpired in this last year, where we have moved from commodity NPK to crop-specific NPK along with micronutrients and growth promoters. And by now, we have now enhanced the number of grades. We are catering to many more crops than what we were in the previous year.

Now, this aspect of it is somewhere very, very deeply making an impact in terms of not just the yield, but also somewhere the quality dimensions of the agri produce, which is where we are now having a very positive traction in terms of repeat customers, and a very strong attraction also from the channel.

And uniquely, now we have clocked up not just in terms of the sales, which is by way of invoices, but also by way of liquidation, which would mean that the farmers have actually bought the fertilizers. And that speaks very strongly about the value proposition that they are seeing in terms of the Croptek or the crop-specific fertilizers.

So with that, if I look at just the Crop Nutrition business, besides the crop-specific fertilizers, we are also into Bensulf, which is another specialty fertilizer. We are also into the water-soluble fertilizers, which are also specialty fertilizers. And all put together, we are seeing that there is a lot of value that we could bring to the table by looking at not just commodity product orientation,

but somewhere bringing in a lot of weightage to what could impact the farmers and the yields, and so also their income levels.

Similarly, the journey continues from commodity to specialty even in our technical ammonium nitrate mining chemical business, and where, as you would be aware that our range of product itself caters to all possible segments in the mining sector, whether it is ammonium nitrate melt or the high-dense product or the porous prills, the global best porous prills, right up to the Hospital segment is what we are catering to.

And some of these segment-by-segment catering to the needs of that particular segment is somewhere now making more and more sense that, that is the way to go, and that is what is bringing the strength. Similarly, in the acids, again, every segment right from 58% acid, 60% acid, 72% acid, right up to 98% acid is something that we are catering to, and going up to even specialized acid with additives for the steel companies that are there.

Finally, even in case of IPA, that our move towards moving away from commodity IPA to pharma-grade IPA is something that is bearing good fruits. So, those 2 aspects are aspects which I feel at the undercurrent level, have given a lot of confidence and is giving us a very positive feeling in terms of sustainability of these good results.

And going forward, as we move more and more towards segmenting the market and catering to each segment, and as we move more and more from pure commodity product offering to a holistic solution offering, we are seeing that not only there will be, I would say, additions to the contribution margin, but we are on our way to creating valuable brands in the spaces that we are performing, in the spaces that we are having our business focus.

Building upon the same, I would say, strength, we have also taken up projects of enhancing capacities on nitric acid at Dahej and on our technical ammonium nitrate at Gopalpur. And somewhere those aspects are also very strongly built on both these dimensions. Both are projects that are beautifully aligned to the India growth story. Both the projects draw strength from our 40-years of knowledge and experience of that sector. And that aspect of it is going to ensure that in the least gestation period, it should begin its contribution to the bottom line. And both of them, we are looking at somewhere, H2 of FY '26 to bring it into our financial fold.

I am also happy to share that with the good cash flows that were there, we were in a position to further reduce the net debt by around INR 120 crores. And now the net-to-EBITDA ratio has improved to a healthy 1.72x versus 2.66x, which was in the previous year.

We also brought in and infused INR 800 crores in our subsidiary, Deepak Mining Solutions, which is also available for the group by way of CCD, Compulsory Convertible Debentures. And that is also going to deleverage and make the balance sheet even more healthier as we go forward.