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Gujarat State Fertilizers & Chemicals Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '24 Earnings Conference Call of Gujarat State Fertilizer and Chemicals Limited.
[Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Anuj Halakhandi from Anurag Services LLP. Thank you, and over to you.
Good afternoon, everyone, and welcome to the Fourth Quarter and Financial Year Earnings Conference Call for Gujarat State Fertilizers & Chemicals Limited. The call is being hosted by Anurag Services LLP. Present from the management team are Mr. V.D. Nanavaty, Executive Director and CFO; and Mr. Sanjiv Verma, Executive Director of Fertilizer Marketing, along with other senior dignitaries. We appreciate the management for granting us the opportunity to host this call, and we can begin with the management's opening remarks, followed by a question-and-answer session. Thank you, and over to you, sir.
Thank you, Anuj. Welcome to this earnings conference call of GSFC. As you are aware of the economic and fertilizer industry situation, in particular, the government reduced the subsidies for P&K fertilizers from October '23. And that then also mostly continues in April '24 also except the EPS where summarize is given.
In contrast to the reduction in subsidiaries in food costs have actually been rising. And of course, of late, they are a little bit softened. So the industry margins were under screen during the last 6 months, which is reflected in this particular in this Q4 earnings of GSFC. The good thing government deal was to announce subsidiaries for the FY '25 well in advance so that companies were able to plan raw material according to the cost economics of the various products. And take decision how to proceed from April onwards. And that helps GSFC also in planning in advance, assuming that subsidy will continue or will be improved in H2 of '25. So we are glad to inform that we are targeting 20% rise in fertilizer volume in FY '25, based on the higher production and [indiscernible] unit as well as higher production from the -- for the ammonium sulfate plant, mainly out of ammonium sulfate 4 plant, which was commissioned in January '24. Subsidiaries received, as you are following, government has been peculiar in clearing the subsidy dues. We received around INR 4,143 crores subsidy during FY '24, and outstanding is INR 1,106 crores, which has reduced from INR 1,760 crores from FY '23.
Cash position, as you are aware, we are a 0 debt company and the total deposits are around INR 2,200 crores as on March 10. Subsidies has been clear everything for FY '23 and some portion for April '24 has also been paid. As you all know, government has good tax collection, direct and indirect and indirect tax election, GST is making new records a number of times during the year. So government is equally retain the subsidiary dues.
Q4 particularly was a little suppressed because of the particularly [indiscernible] crisis and the whatever raw material inputs were orders, they came late because they have to take a long route to avoid Red Sea route and they disturb the production planning in Q4. So since intently, production sales, everything was affected and was not as per our plan or estimates during the year. However, we are taking care of the same in this current financial year. We are factoring in the long shipping routes, into procurement planning so that we plan in advance and are able to achieve the production -- higher production that we are targeting.
As far as the industrial products are concerned, though we're expecting things to improve in H2, but it has not really improved and the capital mentioned was lower than the last year. The details are in the given in the presentation uploaded on our website as well as the stock exchanges. Still, there are no immediate signs of improvement in this Industrial Products segment also. So I think there, we expect the margin to remain under pressure.
Fertilizer imports prices are in a range bound manner. So for acid, ammonia, [indiscernible] are behaving in a certain manner, including natural gas. So we expect that they will be in this range during the year. and we'll be able to make the fertilizers economically. Dividend, all you have seen, we have declared 200% dividend mainly due to lower PAT and 5% of net worth would have led to a very high payout ratio, which is not good for any company, plus the CapEx plan that we have for the next 5 years, demand in the cash to meet this CapEx requirements.
Salary expenses risen during the year. It was mainly because of the long-term settlement for the staff and offices done every 4 years. But it will come down in the current financial year because the onetime impact will be eliminated. We expect reduction of around INR 90 crores from the FY '24 figures and going into FY '25. Otherwise, all the projects are going on as per the schedule. And as we discussed, we'll be commissioning for CapEx plans during the year. One is sulfuric acid plant, then [indiscernible] crystal plant, than 15-megawatt solar installation. And last is the urea revamping to meet the energy norms as required by Government of India so that will be commissioned by March '25. So we expect these 4 plants to start this year.
And for full effect will be seen next year. So they'll be has been in top line and bottom line or by the cost cutting. And further details of the [indiscernible] plants are already given in the presentation. So you may go through the same. That's all from now. So we can now pick up the questions one by one. Thank you.
[Operator Instructions]
We'll take our first question from the line of Nirav Jimudia from Anvil Research.
I have a few questions to ask. Sir, first is on the ammonium sulfate. So what you indicated in your opening remarks that the subsidy rates have revised from October. So what it seems like that the subsidy, which was INR 16,707 till September has been revised downwards to INR 19,309. But sir, on the cost side, if we see sulfuric prices, which averaged around $156 in 3Q came down to $120. And even the ammonia prices, which averaged around $600 in 3Q came down to around $465. But still we reported the losses in the fertilizer segment. So this is because whether our conversion cost has gone up like freight or power or any other cost increases because of which these losses were reported?
No, I mean, [indiscernible] ammonia out of natural gas, we don't buy ammonia. So natural sell gas prices have been stable. In fact, they are not reduced. But subsidy has reduced. So that was the one major thing that was impacting the plus also because of the competition, we had to either reduce MRP or give large discount to the dealers. Because ammonia sulfate is -- I mean, as you may know, we and FSC are the only producer of and steel grades ammonium sulfate is quite popular in Bengal and those sites where plants are there. So FACP is operating with very few products. And I mean, selling those volumes are kind of a survival issue for them. So they offer very good discounts, which we have to match it if we want to sell our ammonium sulfate.
So all those factors also affect the margin. That is the point. And of course, Q4 is not a fertilizer season. So as you know, the season starts, [indiscernible] season starts from April onwards. So in a dry season those who are lifting material they have a little upper hand in terms of asking for more demand and I mean, discount and all those kind of things. So Q4, I mean, of course, long -- very long credit period because they pay when the starts and farmers starts paying from them. So we have a long credit period as well as and some discounts to be offered to get them [indiscernible] our products. So all these factors come into play for reducing the margin.
Sir, 3 things here. So one, I think the MRPs were close to INR 20,000, if I'm not wrong. So what sort of discounts do we offer number one? Second, vis-a-vis the imported ammonia and our cost of production of ammonia through the natural gas, how much we have to sacrifice in terms of per tonne margins? And third thing is, was there any spillover of inventories of those higher subsidiary times, which we are carrying in our books or at the POS because of which those impacts in the Q4 results are reflected?
Yes. So our [indiscernible] Marketing will clarify on this. .
Yes. Good afternoon, the discount part on ammonium sulfate of MRP of INR 20,000 per metric tonne average out around INR 2,000 per metric tonne. And it calls for higher storage charges and even also secondary freight during the off season for placement. This was the first question which you asked. Ammonia price, I think Nanavaty has given the answer already in some details.
I'll just make one more remark, ammonia price remains soft for a very little in a short period of time during the year. Otherwise, it remains elevated. So comparing imported ammonia and ammonia produced from natural gas is not directly comparable, you cannot switch between the 2. And once you decide that you will use natural gas, then all the natural gas contracts are long term in nature, and there are dedicated pipelines made from the supplies point to your actuary and then there are take-or-pay obligations. So it's very, very tight arrangement buying natural gas. The ones you get into it difficult to get out and definitely not possible to compare ammonia with the imported ammonia.
Plus one cannot transport such huge quantities imported ammonia for fertilizer production. So any ammonia purchase at could we have through pipelines. So those kind of things are not in there. So only those who are having [indiscernible] linkage can only buy import ammonia. Those who are in the interliner, they have to natural gas or their requirements will be less otherwise large volume of ammonia cannot be transported through tankers.
One question you asked for the stocks which produced during the higher subsidy. This normal stock ammonia sulfide is higher than other force fertilizer because specific use mostly during the rainy season for particular crops. So there is an impact, but this is a regular phenomenon which happens at both the sides whenever subsidy increases whenever subsidy decreases. So there was no abnormal as such stock levels.
So sir, given the current situation as it is as we stand now, would be making any profit at the EBITDA level for the ammonium sulfate business Given the kind of situation what you explained. So 1 thing is that the gas prices is coming down. And second part is the discounting thing, which you just explained to us. So if these 2 things are eliminated or, let's say, if these things are not there, would the ammonium sulfate be reporting the profits? Or what 1 should take a normal level of EBITDA per metric tonne given the current situation? .
Yes, yes. So we -- as everybody else there are hardly any rainfall from during January, March of any year and the season starts from April onwards. So definitely in these full season for the fertilizer on the back of cool monsoon that is expected, we'll have a better position from now onwards, say, June say, up to November, December. So only during January, March, we start up in this particular situation where production takes place all the time, 365 days into 24 hours but consumption is limited to the season. And in between, as you say, subsidy changes that inventory effect also takes place that is also definite.
So sir, INR 2,000 or INR 2,500 is a fair assumption to take at the...
Yes. You can take INR 2,500.
Got it. Sir, second question is on the urea plant. I think based on the presentation, what can we observe that we operated our plant at the optimum levels. And as per the NUP policy of 2015, I think we need to bring down our energy consumption because then we were to paying some penalties also from the government. I think that was a policy document mentioned that. .
So 2 things here. One, is our fixed cost higher than what is compensated by the government? What is our actual energy consumption in GKL per metric tonne and how much is government compensate us? And once we complete this project, I think the savings would be close to 2.75 GKI per metric tonne. So how much of our profitability per metric tonne could improve based on the energy consumption exercise which we are going to complete by the end of this financial year?
SP1 So right now, our actual consumption is close to 6.4 to 6.5 GKL, It is mandated to be brought down to 6.2 GKL. So companies have been allowed to do it by December '24 or March '25. So that we will be bringing. But when we achieve that we will be reaching around 5.8 GKL instead of 6.2. So there will be some savings once we achieve the new energy norms. So -- but in the committed in the Paris agreement about the 2030 target, 2070 targets on energy reduction and 1.5c temperature and all these things. So government is constant exercise of pushing the energy reduction for urea plants. So while we will be achieving or more than achieving the present mandate of 6.2 GKL per tonne. By the time we do it in May '25, from April '25, they will come out with new norms, reduced norms. So this is an ever-going cycle, and hardly, you can think of not making any money in urea. So that is the situation.
But sir, at the normalized level, what sort of per tonne margins we should take? Because currently, we may be losing on the energy part, but there is some...
Some fixed cost, you say that is still not interesting. That now government is calculating fixed cost at the base of 2023. So they have not revised the fixed cost base since last 2002, '03, only in 2014, they gave a rise of INR 3.50 per tonne and further INR 1.50 for more than 30 years old plant. So for us, we got INR 500 rise in fixed cost on 2014 onwards, but that is adhoc exercise done. So ex cost, everybody is losing early because you can imagine 2002, '03 in 2023 and '24, 10-years old data they are using for calculating fixed costs. So if you see overall, there is hardly any urea plant is making any profit. only when there are other products, you have been the most popular fertilizer people are able to sell other products when they have urea in their basket. So that is the only purpose that is sold by the urea.
Sir, just to clarify, our fixed cost under absorption is close to INR 1,500 a tonne? Or is it even...
No, government gave INR 3,600 per tonne, our is more than double, more than INR 7,000, INR 8,000.
Okay. Okay. And on the energy side, we may be losing close to INR 80,000 a tonne?
Yes, it is a small loss I mean, the penalty because of not meeting 6.2, some few crores we lose every year. But not converting, I mean, meeting those norms requires INR 450 crores of CapEx, that is the mix side of it. But since government is pushing that you have to meet this norm. So it is a viable proposition or not. You have to meet it. otherwise...
It also allows you to recoup also over a period of 3, 4 years?
No, they don't allow the map of all the gains. Only if you go below their norms, some savings, which they allowed as per their calculation. So like suppose if they continue 6.2 after April '25, and we keep on producing at 5.8, then that difference will be compensated to us based on the matter they had of compensating the sales. Otherwise, all the reduction in energy norms are all these savings are taken out by the government. There is nothing is allowed to be kept with the fertilizer company.
We'll take our next question from the line of Saket Kapoor from Kapoor Company.
Sir, firstly, when you spoke about industrial product margins to remain in this page. So for Q4, I think so we posted the profit for -- under the Industrial Products segment and the PBT margin is also in excess of 10%. So in the current likelihood of what [indiscernible] exit was, can we keep this as a bit for now? Or what's the trend post making it for the Industrial Products segment?
So look at the full year industrial products results for our future forecast. [indiscernible] more than kind of aberration you can say. But what we saw for the full year is the real picture.
Okay. So post March, again, the margins have taken a hit. That is what you are alluding to?
[indiscernible] segments course bifurcation kind of thing. As you know, ammonia sulfate is produced from Keppel electrum plant. So whether I call that plant as Kepper plant or fertilizer plant is a dilemma. But we are forced to recognize between either of the 2, maybe partly here partly there. So in -- because this is a unique situation for GSFC and most of the portage companies in this country don't have so much of industrial products in their portfolio with this kind of integration of plants.
So when this NPS notification came for showing the segment result as per their method of working also. So we have to be remain in tandem with overall scenario that for companies [indiscernible], there is one matter of preparing segment results, now you're saying I also want segment results presented the directors. So all these things which are part of the costing principles are now being brought into accounting perspective. So -- and this had to be audited by the auditors approved by the directors. So and this notification came in January. So its effect is seen in this Q4 result between industrial products and fertilizer segment results. So really, chemical per se have not performed so good in Q4 and going down in Q1 next year. It is not like that. It is consistently not showing good margins, and that picture is still not improved.
Right. So we should not look at this quarterly number this is what the explanation we have given. It is all because of the integration that we have between the fertilizer and the chemicals. .
Correct. Correct.
Sir, this -- and then you explained that the INR 90 crore impact is one-off, and then we will be again back to the -- to our number of INR 175 crores -- INR 170 crore for the employee cost from the next quarter?
INR 170 crores, let me check. So it will be more than INR 170 crores. So right now, it says INR 32 crores, so you remove INR 90 crores from them. So it's INR 750 crores.
Okay. INR 750 crores divide 4, INR 185 crores, INR 190 crores should be the number on a quarterly basis. Sir, and the other expenses part has seen an escalation because of the freight cost only from the Red Sea issue on account rising on account of Red Sea issues? .
No, some marketing costs because of higher volume, around 6% higher volume ferlizer sale has been done. So some parties because of that plus this PM Kisan some of the Kendras were given to us for upgradation and modernization. So PMKK upgradation cost were to be borne by the fertilizer companies plus down [indiscernible] scheme. So [indiscernible] and all related expenditures. So all these things increase the marketing cost. Plus we had some interim stores and steps because we changed the catalyst over after a few years. So when catalyst came, the number goes up for the repairment tenant.
And some rise in administrative cost was there because of the higher fees are spending, which is mandated as 2% of last year's profit for the last 3 years, profit was higher. So we had a higher CSR expenditure. So that also led to rise in the common expenditure, other expenditure.
Sir, can you quantify a number the one-off number would be? Or is it difficult?
No, CSRs will be a difficult, I mean, almost say more people less. -- volumes, we are going to do, say, 20%. So marketing-related packing cost, freight cost is going to be higher. PMKK is also a continuous program. Only [indiscernible] back, we can think of some reduction, maybe say, INR 5 crores to INR 10 crores when catalysts are not changed every year. So some releif will be there. But since you know our plants are old, 40, 50 years old plant. So -- and to run them at above 100%, we have to spend or repair maintenance or spend adequately so no shortcuts can be taken there.
So lastly, that the only positive that we can factor in for this year is the 20% volume growth in the Fertilizers segment that you are testing. And that is what the only solace we have. Other than that, there are so many moving parts that it is very hard for investors to factor in what kind of earnings can be produced then.
Plus some rise subsidiaries will some INR 1,500 about industrial product margins which a bit helpful. and post election results, if they look at this industry's pain points and give some relief in subsidiary calibrated to the input cost then that will be further helping to improve the margin.
Right. Other than that, what the comment the moving parts that there are various moving parts. So very hard to calculate, how to factor what number, very difficult for investors to time.
Yes, yes, there are no large things that can be categorized and put numbers to it. So we are taking so many steps. So cumulatively, they will be helping, but to say this step like this difficult to say. But broadly, to the subdued performance of industry products, we'll be going for the niche product value addition and kind of commodity type, like [indiscernible] has become a commodity now. So we'll be producing more X Crystal, which is a specialized product and substitute API in the pharma industry from China.
So that will be investing this product substituting imports and that is a good value addition. And plus some raw material will be importing instead of making ourselves. So there are also some margin improvement is expected. So like this, we keep on changing product mix to achieve higher realization and better margin. So -- but as I said, there is nothing one-off kind of thing that can be pinpointed. So -- but our efforts are on, that's all we can say.
[Foreign Language]
What are the additional revenue we will be achieving. Additionally, it will go to the top line from the commissioning of the CapEx, which we have toned outlay?
Correct. Correct. So directly, like solar plant will be helping in reducing the power cost, no top line assets contribution. Similarly, urea to revamp will be meeting the statutory requirement. There is no top line effect on the same. This sulfuric acid for plant will also be captively consumption of sulfuric acid and steam generation that will help to reduce steam made from the natural gas, so that will be helping that. On the crystal projects will be directly contributing to the top line part of the year. full effect will be in on the next year. So I think around some INR 100 crores top line effect is to be seen on a full year basis from this plant.
We'll take a next question from the line of Vipul Shah from Sumangal Investments.
Sir, what is our CapEx for [indiscernible] acid and sulfuric acid plants? And what benefit those CapEx will bring in reducing our cost per tonne?
Yes. So the CapEx is around INR 1,500 crores [indiscernible]. And still we are doing the -- we'll be taking the tender for technical deals and all these things. So it is difficult to pay what a exact benefit it will bring. But if you reduce the [indiscernible] acid procurement that we are doing from imports right now. So overall production will be definitely cheaper than imported [indiscernible]. So that will be helping us to one, to produce more DAP and other NPK fertilizers. And second, it will be bringing down the cost of phosphoric acid. So even if I gain $100 per tonne by our own production. So it will be INR 8,000 per tonne of PA. So I will be producing around 2 lakh tonne of cost per sulfuric acid from this plant. So it will result, I mean, bottom line from INR 160 crores to INR 200 crores per year.
So -- but when is it likely to be operational? Because in your presentation, you have mentioned just that it is '27, '28?
Yes, because we'll be trying to do it fast, but being in the public sector, we have certain processes to be followed, and we cannot be so fast like private sector. So that is the retail constraint. But one should understand that we are giving opportunity to that number of [indiscernible] to participate in such project instead of MNCs and large companies taking the work of such projects. So that is the difference why we take time and somebody is not taking so much of time because we are here to fill a wide participation.
So what is our annual requirement as on today for fossil fuel and sulfuric acid? And how much do we -- are they met by 100% import as on today? .
Yes. So if we can produce 10 lakh tonne of P&K fertilizer sales kind. So there we require 4 to 4.5 lakh tonne of sulfuric acid. Right now, everything is imported. We have a joint venture with TiptinTunisia. So some is coming from that JV. But otherwise, everything is imported. So it's 100% import dependent. So with this new plan, we'll be producing out of 4.5 lakh, we will be producing 2 lakh tonne at least 50% of my requirement is captively met and then some part is coming from my JV. So then import dependence will go down. But of course, we will be not sticking ourselves to the 10 lakh tonnes. So we'll be -- in future, we'll be expanding the finished product capacity also. And similarly, putting up a similar plan for -- I mean, same capacity also once this first plant is coming up on the stream.
So for Sikka, we have a long-term plan of expansion -- and that will be kept -- I mean, we'll keep on doing at the time and everything permits. So we'll have another 4 lakh tonne of sulfuric acid after this first phase is commission. And then we will have another facility for producing DAP and NPK fertilizers. So like that, we will keep on expanding. Just to give you some government long-term perspective, [indiscernible] done the study on the full security [indiscernible] 2047, and there, they have indicated that with the steady state of [indiscernible], the fertilizer consumption will be same or a little higher. But if we assume economy to grow, the fertilizer consumption will be still higher. So there is a scope to expand in fertilizer space.
You said our annual requirement for fossil fuels is around 4.5 lakh tonnes tons. So even after this 2 lakh tonne plant become operational, will be importing still more than 50% of our requirement?
Correct. Correct. Right now, we are importing 100%. Of course, we are not able to get all the 4.5 lakh tonnes tons. So the Sikka production capacity, the capacity is there, we are able to operate at 40%, 50%, 60% only because the processes and it is not available or it is available at higher cost that don't permit cost economics of production. So at that time, we keep the plant down. So we are not able to 100% capacity at present.
So what is our capacity at Sikka for DAP and NPK fertilizers? And per tonne of fertilizer -- what quantity of fossil fuels will be required?
So it is all flexible capacity. DAP and NPK we are able to flexibly produce whatever is required. For DAP, for every tonne of DAP will be required for, I mean, 0.46 tonne of [indiscernible]. That is P205. So almost half, a little less than half cost prospect in it. So DAP 46% P25 that is required for [indiscernible]. And NPK for different at different requirements are there. So -- but they are lesser than DAP. So against 46%, some will have 20% for us in that somewhere 25%, some have 32%. So different have different requirements. So -- but generally, they are lesser than DAP.
So what is the capacity, sir, for DAP and Sikka right now named capacity? .
As I said, nameplate is 722,000, but we can actually produce up to 10 lakh tonne.
Okay. Okay. So once you're -- this captive production plants are operational, you will -- you are planning to increase the DAP and NPK capacity also? .
Once this is done, then we'll have similar plants of phosphoric acid and sulfuric acid for another 4 lakh tonne of sulfuric phosphoric. And sometime, we'll expand the DAP and NPK capacities also.
But you will necessary land and infrastructure in placed or to support...
This is there in Sikka. Because when land is taken, it is taken with a very long foresight because land getting land is very difficult. So when you plan for projects and land very long view is taken and adequate lands are acquired at the first floor.
We'll take our next question from the line of Ketan tale from Robo Capital.
I just wanted your revenue and margin guidance for FY '25 and FY '26?
So Ketan, as you know, was subsidiary government keeps changing. So what we plan does not turn into reality. But as of now, it will be a little more than INR 10,000 crores revenue for the next year. And of course, we plan for profits also higher than what we achieved for the full year this year, PBT. So we plan for higher revenue, higher volume and higher PBT for FY '25.
Okay. And can you give the same numbers for FY '26 as well?
Yes, it will be still higher because of the CapEx that we will implement in this year, they will have full year impact in FY '26. So it will be -- hopefully, it will be higher. And we've government in place and the modification in the -- I mean, whole agriculture policy to make Indian agriculture modern whatever steps are taken, we are pulling gear up to take advantage of those steps. So we keep on marching ahead in terms of top line and bottom line.
Okay, sir. And how much incremental revenue do we say we will get from our -- this year's CapEx? I don't think that will be [indiscernible].
Right now, as I said, our revenue side, CapEx is only FX Cristal project that included the early revenue by INR 100 crores. So this year, it will be having some 50% or 40% impact. Next year, it will fully contribute INR 100 crores to the top line.
We'll take our next question from the line of Nirav Jimudia from Anvil Research.
I just wanted to know like we required sulfuric acid for our [indiscernible] acid ammonium sulfur and ammonium phosphate surface. So given our current situation in terms of the prices of sulfuric acid, are we still competitive in terms of the cost of production vis-a-vis what is available from the market? And secondly, I guess, our capacity is close to 796,000 tonnes. So how much we produce and how much we actually acquire? .
No, sulfuric acid, the advantage in terms of producing steam. So we require a lot of steam in the process of making fertilizers and chemicals. So if I don't have sulfuric acid, I will have to use natural gas for making steam. So compared to natural gas, sulfur acid plant is much cheaper. So if you impact if you give comparative study, I would say there is a 0 cost of making sulfuric acid for us because of the team credit. So anything we buy from outside is there still some price, but captive production is almost 0 cost. So that is the logic.
And as we expanded the ammonium sulfate plant in January, the commission ammonia sulfuric 4 plant. So we are commissioning atrial fit the plant in this year also maybe by November. So that will fulfill the further requirements of sulfuric acid, I mean, captive requirement. And also, as I said, for steam that will replace my natural gas and so it's a complicated working. But for a user of team or power, sulfuric acid is a very good product, I would say.
So sir, our capacity post this expansion would be close to 10 lakh tonnes of sulfuric acid?
I don't have -- 10 lakh. One minute, let me just check. Yes, it will be around 9 lakh tonnes.
Our requirement is also closer to that? Or do we still...
We have the added sulfur-based producer of fertilizer in India. Nobody has these quantities of fertilizer, which contains sulfur. And sulfur is a efficient all over India. There is no region where for efficiency. So we had the largest buyer of sulfur in India. We are the largest producer of sulfur-based fertilizer and these things 9 lakh tonnes are not being captively consumed for producing different sulfur-based fertilizers.
And sir, secondly, what is our total requirement of power across both the complexes because now we are focusing more on the renewables and consuming the power through the captive use. So what could be the expected savings in the power cost, which could happen to us given the 20% production increase which you just talked about. So One, what is our total requirement of power, if you can give us some understanding? And second, with this captive source of power getting implemented, how much we would be using power through our own captive source?
So Sikka, I'm not exactly aware but it Broda, we consume 72-megawatt power per hour, and we are at 40% on renewables already. So which is a big achievement. Many companies are still less than 5%. So in this situation, we achieved 40% is a big achievement. So with this new 15-megawatt power for the coming, say, by September '24. It will further improve the renewable portion in our power consumption. And we are still signed up its IPCL, which we have quoted 30 years back.
So they will be coming up with another 75-megawatt power plant, which they will be selling to us and GFCL on a 50% basis, which is likely to commission maybe by June '25. So further -- so with this 15-megawatt plus GFCL, 37.5% what we get on sharing basis. Our renewable power, I mean, breakup or portion of the renewable power will lead to around 57%. So it is a huge saving because with against INR 10 to INR 11 per unit, the state electricity or utility that base power remain around INR 5 per unit.
Correct. So despite of our production going up, one, our power cost in upsell amount won't go up. And from next year onwards, when this GPCL would start operations, probably our power cost would be start trending downwards?
Yes, hopefully, yes, yes.
All right. And sir, just a last clarification. You mentioned about the ammonium sulfate we discussed at the first point. So does the subsidy fixation happens based on the prices of import at ammonia? Or it happens based on the availability or the cost of gas in the domestic market? .
As far as ammonium sulfates is there, I should not say a secret, but since you were asked. You see capacity is the only large industrial undertaking in the state of Kerala. So it is a prime importance for them. And they have limited products. [indiscernible] is one of their major products. So subsidies speaks in such a way that they get some push up. I don't require so much of subsidy.
And sir, 1 thing what you mentioned on that we expect the PBT to be better in FY '25 vis-a-vis FY '24. So would this incremental profits be coming from the fertilizer division because one, you mentioned that the MRPs have been raised or the discounts have been taken back? Secondly, our production is going to go up by 20%. And thirdly, with the commissioning of this backward integration projects, there could be some savings accruing to us on staggered manner over FY '25. So the PBIT of close to INR 325 crores or INR 330 crores what we have reported for FY '24. This number optically should be showing upward trajectory in FY '25. Is my assumption correct? .
Yes. Mostly, it will be coming from fertilizers only because [indiscernible] margin pressure still continues. So with mainly China dumping a lot of their output in India because their economy is sluggish. So -- and they have very large capacities, like caprolactam, if you comped we have capacity of around 90,000 fuel production, which is partly kept to consume from [indiscernible]. But again, they are going to recently commission for [indiscernible] plants apart from already capacities they have built up, further [indiscernible] will be set up. So this is the kind of scale they go for? And then the I mean. So at a very competitive price. So the price that the state support, nobody is able to understand how they are able to produce such a cheap cost. But whatever it may be, but they are able to export it at a very low margin. So it disturbs everything in India. So that situation is going to be there in FY '25 also.
Sir, last question out of the total CapEx of INR 1,600 crores, what you mentioned on the [indiscernible] and sulfuric acid. Apart from that INR 450 crores on the urea. So I think combined -- on a combined basis, we are spending close to INR 2,200 crores, INR 2,300 crores of CapEx. How much of this has already been spent and is there in our FY '24 balance sheet? And how much is still left to be spent? .
So we have spent around INR 230 crores up to FY '24. And this year, FY '25 will spend around INR 600 cores to INR 900 crores.
So balance payments would happen in FY '26?
Yes, it will take some time because our total CapEx is 6,000 more than INR 6,000 crores for a period of 5 years. So what you can INR 2,000 crores. So INR 4,000 crores in the year we are going to spend for this 5 year period. So maybe from next year, I mean, some part will start in this year sell after we have the and was completed. So that is the major chunk because in Baroda, we have our hands full and land, I mean, no land is available for starting a new plant. So all major expansion will now happen in Sikka or Dahej.
As there are no further questions, I would now like to hand the conference over to management for closing comments. Over to you, sir.
Yes. Thank you for the patience listening and joining the call. So as we take every time, GSFC a growth story. And we don't have any one-off kind of promoter who wants higher dividend or part of their pie. So most of our properties are low back in setting up new plants and growing companies growing. So that feature will continue, and we will have better days ahead. Of course, '23, '24 was not a good year from IP and fertilizer segment. But I think the better sense will prevail and things will align with the reality, then we are able to perform better. So thank you, and let us see how the Q1 pans out. Of course, we have volume growth in Q1, but looking to the subsidiary involved, the top and bottom line will emerge. So thank you till then.
Thank you. On behalf of Anurag Services LLP, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.