Chambal Fertilisers and Chemicals Ltd
NSE:CHAMBLFERT
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Chambal Fertilisers and Chemicals Ltd
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Ladies and gentlemen, good morning, and welcome to the Q1 FY '23 Earnings Conference Call of Chambal Fertilisers and Chemicals Limited. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rishab Barar from CDR India. Thank you, and over to you, sir.
Thank you. Good day, everyone. Thank you for joining us on the Chambal Fertilisers and Chemicals Q1 FY '23 Earnings Call. We have with us today Mr. Gaurav Mathur, Managing Director; Mr. Abhay Baijal, CFO; Mr. Rajveer Singh, Vice President, Legal and Company Secretary; Mr. Ashish Srivastava, Vice President, Sales and Marketing; Mr. Anand Agrawal, Vice President, Finance; and Mr. Anuj Jain, Assistant Vice President, Finance.
Before we get started, I would like to point out that some statements made or discussed on the conference call today may be forward-looking in nature and must be viewed in conjunction with the risks the company faces. Chambal Fertilisers and Chemicals does not undertake to update them. The statement in this regard is available for reference in the presentation. We will begin the call with opening remarks from Mr. Mathur.
I would now like to invite Mr. Mathur to share his views. Over to you, sir.
Thank you, Rishab. Good day to everybody, and a warm welcome to all of you participating on this call. I'm sure all of you had a chance to go through the presentation.
I'm sorry to interrupt, sir. Sir, your volume is too low. I would request you to come closer to the speaker phone and speak, please?
Is this better now? Hello? Is this better?
Sir, it is still low. I would request you to come closer to the speaker phone a little bit.
Is it better now?
Yes, sir, please to proceed.
Okay. So thanks, Rishab, and good day to everybody. Warm welcome to all of you participating in this call. I'm sure all of you had a chance to go through the presentation and financial performance shared earlier with you. So I will not spend time restating the numbers in my opening remarks.
The proactive procurement of DAP and other P&K Fertilisers and hence, the good inventories, which we had at the beginning of the quarter, enabled us to register higher sales during this quarter. The high price of P&K Fertilisers in the international market continue to post challenge during the first quarter of the financial year and impacted our margins. Similarly, high prices of gas and P&K Fertilisers have also resulted into substantial increase in working capital borrowing and interest cost impact.
As we move forward, we see the prices of phosphatic fertilisers have retreated from their peak levels, and we are hopeful of softening trends in the market going forward. Our urea operations remained steady. We successfully implemented schemes to improve energy efficiency in both Gadepan I and Gadepan II plants. And while there was not much variation in the production and sales volume of urea during the first quarter in comparison to the corresponding quarter of previous year, energy-efficient operations added to the bottom line of the company.
The crop protection chemicals and specialty nutrients remain the focus area, and we are very happy with our performance in these products with another strong quarter of double-digit growth. The geographical expansion in the past year and focused marketing strategy in existing marketing territory is giving impetus to robust growth in crop protection chemicals, specialty nutrients and NPK Fertilisers.
We had done a highlight of our seed to harvest program earlier. And we are very happy that there is good progress on this as we continued in this quarter. We addressed key kharif crops, which include paddy, cotton, maze, oil seeds and vegetables. The trend has been on improving our penetration and reach across our target markets through channel expansion, farmer demand generation and widening of the product portfolio. This demand generation program, that is the seed to harvest program, will be continued through rabi as well as widened in its geographical scope.
We remain confident of our prospects going forward. Groundwater level continue to be high as do acreages and the farmer as well. Our focus continues to be on leveraging our experience in the agri space and our strong relationship with the farmer to widen our product basket and enhance our value proposition.
The ammonium nitrate project is progressing as per plan. Commercial discussions are ongoing with international vendors and the statutory approval process is on track.
With that, we would be very happy to take your questions. Thank you very much.
[Operator Instructions] The first question is from the line of Faisal Hawa from H. G. Hawa & Co. Ladies and gentlemen, we have lost the line of Mr. Hawa. Let's move on to the next question, which is from the line of Surya Patra from PhillipCapital.
Sir, just first question about the MRC. How long that was shut for the quarter, sir?
Sorry, you're asking about the MRC shutdown?
Yes, yes.
Okay. That was about the 30-, 35-day annual shutdown, which they have.
Okay. And the underperformance has...
Carried out once in 2 years in line with most companies. So that was done in this quarter.
Okay. Fine, sir. And the -- regarding to the subsidies receivables that has gone up sequentially, let's say, INR 5,500-odd crores. Can you give us a sense -- the split between the subsidy debtors that has gone up because of the urea and how much because of the P&K?
I'll ask Anuj to give you the details on that. Anuj?
You see urea is about INR 3,400 crores and the P&K Fertilisers is around INR 1,300 crores. So total is about INR 5,485 crores. So urea is -- it includes a financial -- it is majorly on account of activation. We should get near shortly.
Sure. One more clarification that I wanted is for Gadepan III, the 80,000 tons of extra capacity which has been allowed in the previous year, whether that is continuing even for this year and it is a kind of an ongoing kind of approval or it is -- that was only for the last year, sir?
So there are 2 parts to it, Surya. Earlier was a one-off approval. Our understanding and looking at what is happening in the global market is that these approvals most likely be extended. However, having said that, we take a shutdown of our plants every 2 years. So Gadepan III will have a shutdown in March, which is part of the ongoing normal process.
Okay. Okay. So that has already been taken then? Just the maintenance shutdown is already...
It will come up In March of 2023. So we continue to run the plant through March of 2022 based on the approval from the government and our normal once in 2-year shutdown will happen in March of 2023.
Okay. And just on the margin front, sir, one question. Obviously, we have seen a kind of higher production. This is also to some extent on that because of the sharp price in the input cost and obviously, which has been a pass-through. So that is why there is a major shrink in the margins that we are witnessing sequentially as well as Y-o-Y. But who is a bigger culprit? So let's say, gas is obviously one reason, but how much of the dent that we are witnessing at the margin level because of DAP procurement at elevated costs?
I just answered this question. The margin that you are seeing is basically a numerator denominator effect. We have maintained our EBITDA levels or even PAT levels at the stand-alone level. The difference is coming because turnover has gone up due to sharp increase in price. That is the major reason. I would say 90% of the reason is accounted for from that. Of course, yes, traded products margins have undergone decline. But that is not the reason for the major ratios that you are seeing in terms of the decline. That is because the turnover has gone to INR 7,200 crores, profits and EBITDA remain more or less the same.
Yes, yes. So that is clearly visible, sir, but I just was trying to understand something, what is the impact because of the DAP volume rise on profitability? So if you can give some color to that.
DAP volume rise is of the order of about 1.05 lakh metric tons. And the margins have shrunk to the extent that we are still -- you can understand that because of the high input prices and kind of market conditions which prevailed, there has been a substantial decline in the DAP margins.
Okay. Okay. So with the sharp correction in the sulfur prices and the indication is that ammonia is also likely to see a kind of similar. So given that any clarity or color that you can provide for, let's say, next quarter, sir? Because your volume is also expected to be really stronger in the subsequent quarter.
Yes. So Surya, as I mentioned in my opening remarks, we see a softening trend in the prices going forward from international suppliers. And like you mentioned, sulfur has gone down substantially, ammonia while it has gone down, it is steady, and we have to see how it progresses going forward. As you can understand, there are many dynamics at play over here. Obviously, Russia now coming into the picture, right? But overall, like I said, we expect a softening on the international prices going forward.
Sure. If you allow just last one question, sir. Let's say, in fact, in the seed to harvest kind of initiative, obviously, we have seen some progress, but could you give some color, sir, what is the ultimate goal that we are trying to achieve this -- through this initiative? And how successful so far we have been?
Yes. So I'll ask Ashish Srivastava, our Vice President, Sales and Marketing, to give you a view on the seed to harvest program.
Surya, this is Ashish here. So what we did was we did a deep dive on the existing geography last year and looked at some certain districts where the market penetration was low. So those culprits were identified, and then we identified certain crops where we wanted, where the molecule fit was perfect to the penetration needed. So on that basis, certain facilities have been identified, certain foot soldiers have been put in place. So each foot soldier is responsible for taking care of almost roughly 10 villages. And in those 10 villages, each village would be -- there will be 30 farmers who will be enrolled in this program.
So whatever is the need of that farmer right from seed to the harvest, whatever crop protection chemicals are required, whatever specialty nutrients are required, that will be provided from Chambal's window.
Now as far as the progress is concerned, we did a pilot last year, and a double-digit growth was seen in those markets. So we expect similar things to replicate and we felt we've identified so far.
Whether this effort is currently breakeven, sir, at the EBITDA level?
Yes, it is much better than breakeven and that's why if you see the numbers on our crop protection and specialty nutrients, which are there in the presentation, I think that would give you a sense. We have seen, as mentioned in the presentation, 64% growth in our top line. So you can well understand that not only the seed to harvest initiative, but a very active portfolio management. I think the presentation also mentioned the new products, which have been added. So launches, tying up with the channel. So it's a very comprehensive approach of which seed to harvest is a key, key program, but there is an overall comprehensive approach, which is visible in the numbers.
[Operator Instructions] The next question is from the line of Shalini Vasanta from DSP Mutual Fund.
This is Vivek Ramakrishnan. I just have one question. In terms of gas availability, given all the international disturbances, do you see any problem going ahead because there have been new items saying that there'll be some disruptions.
Yes, very good question. So while there was this news about a 10% cut. However, we have not seen any disruption. Our plants continue to operate at full capacity. And the way it works is that we have tied up with spot gas, which is available. So we have seen -- and we do not foresee any disruption in the coming months also on availability of gas for our plants.
The next question is from the line of Abhijit Akella from Kotak Securities.
So just a couple of questions from my side. First one, I was just hoping to get your thoughts on this Nano Urea initiative being proposed by the government. They seem to have very big plans for it, talking about replacing maybe 20 million tons of urea that's sold currently in the country in coming years. So I mean, how do you see this? Is this a realistic target? And what are your thoughts about the product itself? And whether Chambal would also consider getting into the space?
It's a very good question, Abhijit. So I think the way I look at it is that it is early stages in the Nano Urea application, the results that we see. The way it works is that when you apply a nutrient, whether it is urea or Nano Urea, especially when you apply nutrients in the soil traditionally, some of it gets used up by the plant. Some of it gets lost through drainage, et cetera. And the concept of Nano Urea is that since it is trait, it will have a much higher nutrient due to efficiency. However, what we have to see, and this has to be seen across multiple seasons and multiple crops is the overall impact of Nano Urea in reduction of the total urea consumption. And obviously, it is early days. So we are monitoring it very closely, and we are also conducting our own trials to understand this. We will see how it progresses. And as and when we have a much further picture, maybe 6 to 9 months from now, then probably we'll be in a better position. The industry also will be in a better position to understand this. The farmer will be in a better position to understand it as it is used across multiple crop cycles.
Okay. Sure. That's helpful, sir. Also just on the topic to understand, I mean, has such an intervention being tried anywhere else across the globe? And if not, why not? And I mean how do you see -- why is India so different in terms of this product?
So this Nano Urea has not been tried anywhere else in the world. Why it is being tried in India? Well, it's an innovation, right? So it's an innovation, as you know, there is a big trust in India on innovation nowadays. So it probably is a part of that. And in other parts of the world, for example, in North America, they don't use urea so much. They use ammonia. They use liquid ammonia and they inject it into the soil directly. In Europe, of course, urea is used, but that is granular urea, quite a lot of granular urea instead of field urea. So there are different climatic conditions, different agronomic requirements. And of course, the whole concept of innovation. So that's where it is right now.
That's really helpful. One last thing from my side. On the subsidy outlook, how do you see the rest of this year shaping up in the context of the heavy subsidy burden on the government? People are talking about INR 2.50 lakh crores. So I mean, do you expect the flow of subsidies from the government to remain smooth across both the segments, urea and phosphates over the rest of the year?
So if we look at what has happened in the last 2 years, we see a positive stance from the government on subsidy allocation as well as disbursement. If you go back 2 years ago, this government made a big allocation of almost INR 65,000 crores in the month of November 2021 -- 2020, November 2020 to clear the backlog of the industry. Last year also, the original -- if I remember my numbers correctly, the original subsidy amount for '21, '22 was more around INR 80,000 crores and then finally, they increased it and it went up to almost INR 1.50 lakh crores, right?
This year, while the original allocation was around INR 1.10 lakh crores, the government, including the honorable minister has made public statements as well as honorable finance minister has made public statements on increasing the subsidy allocation to initially INR 2.25 lakh crores or so now we're talking of INR 2.50 lakh crores. So to us, in the industry, that is an indication that the government is cognizant of the fact that the subsidy needs to be provided by the government, which passes on to the farmer and through the fertiliser companies. And therefore, we expect the subsidy flow to be positive.
The next question is from the line of Faisal Hawa from H. G. Hawa & Co.
Next expansions. Once these capacities are almost near to the full capacity utilization. And what is our capacity utilization at this point of time in all the units?
So we operate the units at full capacity utilization. Now the way the urea industry works is that there was something called the reassessed capacity, which was for each plant. And for -- based on that, our older plants, which is Gadepan I and Gadepan II, actually operated close to 115% to 120% of the reassessed capacity, which is also the maximum capacity of the plant. The new plant, which is Gadepan III, operates at is full capacity. So all 3 plants we operate at full capacity.
Huge shortage of urea as it is in the country, and we are going to import most of our urea. So will we be planning for further expansions also or you will wait for more clarity on government policies?
So Faisal, if you look at it in -- so if you look at going back to Gadepan III, which was the first new urea plant which Chambal put up in the country, if you start from there to all plants that will come up, I think 7 plants are coming up, right? So you're adding -- 7x13, close to 9 million tons of capacity, right? Earlier than that, the capacity was around 24 million tons. So if you add that, we are talking of 32 million, 33 million tons of capacity which comes very close to the total requirement of the country, right? Therefore, at this point in time, I do not see that there is a need for further capacity addition in the urea industry.
Are we looking at various means to cut down on our debt or be able to really reduce it faster?
See, Faisal, the point is that the debt is episodic coming out of subsidy buildup and the repayment and so on. You see from last year to this year, there has been quite a bit of buildup purely because of the price inflation in commodities. As that cycles out, naturally, the working capital debt will come down. As far as the long-term debt is concerned, that is getting paid according to schedule almost $100 million a year. So that is also declining considerably. And you can see what our ratios were 2 years down -- earlier and now what they are. I mean, we had sub-1 debt equity ratio. So because of this year's high-price inflation, we have had this kind of increase, but that is cycling out to the best 2 to 3 quarters as the subsidy gets reduced.
Utilize tax of land or some commercial real estate, which will be very valuable at this point of time, which you can probably liquidate or have better uses for?
Faisal, we, Chambal Fertilisers has its manufacturing site in Gadepan, which is where we operate. Other than that, we do not have any tracks of land, which we can liquidate.
The next question is from the line of Falguni Thacker from Jet Age Securities Pvt Ltd.
I just have one question, which is on the thought process of the company. Like -- so now we have 3 segments, urea, P&K and the crop protection part. So what I understand is we can -- we would continue to do the way we are doing in P&K that is to trade and cater to the market that way. And then we have entered this new space. So in urea, would we be keen to acquire some existing units to expand? I mean generally, I just wanted to know the broad thought process of the company in these 3 segments.
Falguni, every company probably keeps evaluating options. So I cannot make any specific comments on whether we're going to acquire any other urea company or not, right? So we're evaluating possible options, and that's a normal process that goes on.
And for the other 2 segments, we intend to not shift to manufacturing, right? Just to know, I mean, you may decide at a later point to do that, but the thought process as on it for the other 2?
We actively look at all the options, right? So these are ongoing evaluations which we will be keep carrying out to see whether what is the best way of sourcing the product, whether we continue with the trading model, whether we put our own plant and what kind of plants. So again, those are ongoing evaluations that we do looking at both the pricing, the margins, security of supply considerations.
[Operator Instructions] The next question is from the line of Vidit Shah from IIFL Securities Limited.
Just a few data points that I was seeking from you. Just the first one on the interest rate on the excess working capital debt that we take, what would be the average interest rate on that?
About 5.5%.
Okay, fine. Understood. And can you also share the Gadepan III sales volumes for 1Q?
Yes. So the Gadepan III sales volume was approximately 3.5 lakh metric tons.
Okay. And just last data point on the energy cost for the quarter, what was that fixed at? And what is it right now? And what can we expect going forward?
So the energy price was around $24. Yes, so it was USD 24, approximately that per MMBtu at the net value. And let's see how it -- what happens to it going forward.
Okay. So currently, it's at $24 as well, right?
Yes, it's around the $24 mark.
Okay. Got it. And you've stated before that you're constantly evaluating growth options and opportunities. But are we close to anything likely anytime soon? And are we evaluating stuff only in India? Outside India, what is the thought process there? Again, given this additional debt that we have taken, do we expect to see lesser cash balances to invest further?
See, as Abhay mentioned in response to an earlier question, the additional debt that we see is the working capital debt linked to the high subsidy because of the higher prices and therefore, the ratio of subsidy to market realization going higher, right? And we expect that as the government has talked about making supplementary budget allocations that this will start to hopefully come down by the end of the year.
As regards to any acquisition, evaluation, again, that is not information which I can divulge in this investor call. And we continue to actively look at all possible options to grow. We did -- we've mentioned and announced ammonium nitrate project and like I mentioned in my opening remarks, that is progressing as per plan. Other than that, we continue to evaluate options.
The next question is from the line of Vineet Agrawal from SKP Securities.
Sir, I have one question on the energy consumption. Of all the 3 plants, can you please -- if it is possible to share with us how much is the energy consumption for G1, G2 and G3?
Vineet, we don't have the numbers off hand, right. So yes -- but I mean we are obviously because we are energy efficient. So we do operate below the energy norms that are applicable to our plants.
Okay, sir. And my next question is regarding the new developments, which is happening between China and Taiwan, this aggression of China continued and West imported sanctions on China. So how do you see the business scenario so far as Indian fertiliser industry is concerned as well as Chambal in particular?
So again, Vineet, these are geopolitical questions, which is very difficult to answer. And in a sense, hypothetical questions on sanctions, what is the scope of the sanctions and so on. Even if you see in the case of Russia, while there are sanctions but essential commodities like oil, gas, fertilisers are actually not under sanction. So one cannot define what -- a, what will happen in terms of the China, U.S. Taiwan situation? And b, when and what will be the context, et cetera. So that would be a little bit of crystal ball gazing in my view to talk about these things.
[Operator Instructions] The next question is from the line of Aditya Harlalka from Citibank.
Sir, my only question was that with the innovation in Nano Urea technology coming up, do we see any potential threats if this innovation is successful in case of the industries like us, where we continue to manufacture the synthetic urea going forward, like in the span of 2 years, 3 years or 5 years of time? Or can be kind of the Gadepan plants to manufacture Nano Urea instead of the synthetic urea that we do currently?
Thanks, Aditya, for that question. So we do not see any threat on our urea business as a consequence of Nano Urea in the coming years. If you're -- I mean, in response to an earlier question, I mentioned that even with the new plants coming up, right? We just about the equivalent to what the demand is or remain a few million tons lower because the demand will also grow maybe by 1% or 2%. And Nano Urea, even if you see the public statements that have come out from various places, do not indicate that it is going to very substantially replace the conventional urea. So in short, we do not see any threat.
The next question is from the line of Rohan Gupta from Edelweiss.
Sir, a couple of questions. First is on this -- you mentioned that on DAP trading business, there is a pressure on margins in EBITDA per ton. However, on the other side, that there has been delayed subsidy payments from the government. It means that our margins will further come under pressure if we adjust it for interest cost. Do you see that in the current scenario? Does it makes sense to do the trading with the kind of margin under pressure? What will be your strategy for this year? What kind of volume you're targeting? And it is only to maintain your market share, you will be doing this business? Or there still will be some profit elements will be there?
Yes. Rohan, what happens is that. It's a dynamic situation, right? So we have a situation where prices in the international markets peaked. And now we see that there is softening already from the peak that was had existed even 2 weeks ago, 3 weeks ago to now, there is softening that has happened.
In terms of -- we are not necessarily focused just to maintain market share for the sake of maintaining market share. So we take a logical view of the situation. We also look at what government stance is in terms of subsidy, in terms of how they see the industry with the margins and so on and take decisions based on these number of factors.
We are also cognizant of the fact that there is a requirement of fertiliser in the country for the farmers for full security. And the government is looking at the big companies to partner with them to also ensure adequate supply of fertiliser. Otherwise, it leads to other challenges in the Indian economy, Indian food production and so on, right? So we look at all these factors put together we were closely to understand what's happening with the government and so on and then take a decision.
Sir, second question is on our global ambition, and we have mentioned somewhere earlier that we can backward integrate our DAP business and get into phos acid manufacturing globally. Any thought process on that front? Have you crystalized anything in the CapEx plans or future strategies?
We haven't crystalized anything as yet on putting up for phos acid plant, et cetera. There are a number of dimensions to anybody putting up a new phos acid plant, one is, obviously, the financial feasibility. There are a significant environmental aspects to be addressed because phos acid production generates a lot of gypsum as a byproduct, you can say. So as of now, we don't have any specific concrete plans to put up phos acid plant.
Okay. And sir, the maintenance shutdown, which you mentioned at a urea plant at the end of this year, that will be only at Gadepan III or our entire plant is due for the maintenance and can affect the volume for the current year?
So we actually carried out the shutdown of our Gadepan II plant in February of 2022. Gadepan I plant in March, April of '22 and therefore, both those clients are done. So those plants will not be shut. They will continue to operate. Their next shutdown will be due in March '24. Therefore, only Gadepan III will be having its biannual shutdown in March of '23.
The next question is from the line of Surya Patra from PhillipCapital.
You mentioned about the question of nonavailability of gas. So did you say that you were even looking for spot availability, gas available at the spot rates and all that. Generally, we do get gas at the pool price, right, sir?
Yes. So the way it works is that approximately 80% of our gas is on long-term contracts and 15%, 20% tends to be on spot. Whatever gas is procured by any fertiliser company, all goes into the pool. And therefore, at the end of the year, it becomes one pool price.
Okay. So in the interim period, it could be anything. It could be upward, it could be...
It's pooled on a regular basis and -- but the real squaring of capital on an annualized basis. But the ongoing...
Let me explain. The pooling mechanism is a monthly procedure, everybody takes in gas, and that is pooled and the final numbers are pronounced 45 days from the end of the quarter -- from the end of the month. So it is an ongoing rolling process. And then, of course, final adjustments in terms of production and stock and business back, whatever it is, that is done for the minor numbers that are there at the end of the year. But on an ongoing basis, pooling keeps happening, pooling is a dynamic ongoing process.
Okay. Another question, sir, see sometimes it was believed that this IMACID is a kind of natural hedge against the kind of rising input cost for us. So now how should one really build the profitability in the model for that IMACID JV?
IMACID is an ongoing hedge, I would say that it is just this quarter, they did not produce enough and sell enough. So depending on, of course, the quantum that they will produce in the next 2 or 3 quarters, which I think they will return back to normal. The -- whatever the value addition in the chain in their side and we are participant to the extent of 1/3 there. So that works and should continue to work. Structurally, there is no change.
Okay. There is no change to the volume expectations or anything there by IMACID?
No, their budgets are their budgets, and they will maintain their budgets according to their production plants. I haven't heard anything to the contrary.
Okay, sure. And just on the last question, sir, on the crop protection side. So what would be our ultimate goal? See, why because, in terms of growth, if you think urea may not be a growth area for us in terms of volume, let's say. Trading is obviously one. But in that, the focus area, it seems with the kind of seed to harvest in cities and all that. The focus, it seems that crop protection could be one real focus area and a large part of our energy is going to be there that side. So sure, if you can give some clarity about the portfolio that you're trying to build? The ultimate goal that you're trying to achieve? Something on that front. Or are you trying to really think about having a large manufacturing setup also on that side?
So I think if you look at the -- and we shared the top line numbers for the last financial year. And if you look at the numbers this year, so you can see that even last year, we grew very significantly, and we continue to do so this year. So at a broad level, if I take last year as a base, we are looking to maybe grow that business in the range of 3x of what it was in the last financial year over the next 3, 4 years, right? And therefore, like you rightly mentioned, there's a strong focus and a lot of energy is going in that.
As I said earlier, we have a very, very clear strategic approach where we have looked at in great detail what is our channel penetration, how can we leverage jumbled channel strength and use the fertiliser channel better to penetrate the market. That's on the channel side. And we are creating very strong links with the dealer network, et cetera.
On the supply chain side, we continue to work very closely with a number of supplier companies, both at a tactical and strategic level. So that's the supply side and the front-end side. We carried out a thorough exercise on looking at our product portfolio across the key crops and now have a very robust product portfolio, which has at least in most cases, 2, 3 products for each crop for different, whether it's, we decide, fungicide or insecticide.
We have taken very active steps to train our field force. And as we are growing very rapidly, the whole -- the sales, the selling and so on, both in terms of selling skills, technical skills and so on. We are adding a lot of -- we added a substantial number of people for field demonstrations to work with farmers, with what Ashish mentioned earlier. And so we are basically taking steps on all these verticals across the value chain in a strategic way with the ambition of maybe tripling the business in the next 3, 4 years.
Sure, sir. Just if you can add something, sir, your initiatives in the non-core regions, let's say, down south or something and what has been the kind of progress and success that so far that you have seen?
Can you repeat your question? I couldn't understand it?
How is the progress?
On the down south, in terms of your focus to achieve the Pan-India presence beyond from your core regions.
Right, right. Okay. You're talking about the geographical expansion, which you've undertaken. We are actually making good progress on that. And of course, we started last year and this year, which are very humungous years in the fertiliser industry globally, in India, everywhere because of what's happened in -- globally, both in terms of demand last year and this year, the inflection because of Russia. So taking that into consideration, we are making very good progress. We have sold whatever plants we had for our fertiliser, for our fertiliser sales. We have started the sales of our crop protection and specialty nutrient business. So those will remain -- continue to be focus areas for us going forward.
The next question is from the line of Himanshu Binani from Prabhudas Lilladher.
Yes, thank you for taking my question, sir.
Mr. Binani, you're not audible, I would request you to speak closer to your handset.
Now is it audible?
Yes. Please proceed.
Sir, my first question was largely towards the inventory side. So can you please give us a sense on how has been the inventory position at the end of 1Q for our company as well as for the industry? Any broader sense would do.
Anuj, can you give a sense of that, please? I see one of -- in terms of the industry, we don't have the information. Earlier, there was a situation where the ISMs of the government was available to everybody, where everybody could see the data, that is no longer visible to any company. So there is no visibility of the inventory across the industry as such. So we would not like to hazard a guess on that. In terms of our inventory, Anuj, you can probably provide.
I'll provide. I don't have it really at hand.
Okay. We'll just provide it shortly. He's trying to dig that out.
Sure, sir. And sir, the second question was pertaining to this inventory only. So is there any sort of inventory gain component into the EBITDA numbers basically as compared to March and June quarter?
It is almost negligible for us.
And sir, the third question was regarding to the crop protection business. So what I can see is a 64% sort of growth during this quarter. So just wanted to have a sense on the price and the volume breakup basically on the segment.
So if you see we got a growth of 64%. And a very significant part of that, more than 2/3 of that is volume driven. So it is not just a price-led growth. It is a very good question you asked, Himanshu, because we also monitor it closely, that our growth should not simply come through price increase, but also that we're actually growing our volumes. So significant part of our growth, more than 2/3 is through volume growth.
Okay. And sir, the last question, basically from my side is number one. Sir, we are saying that we want to grow our crop protection business to 3x over the next 3 to 4 years as compared to FY '22 base. So pertaining to that, what different are we doing, number one, in terms of the crop protection business? And secondly, what we see is that the other cooperative players in the fertiliser space, they are also entering into the crop protection segment. So what different in terms of the products as well as the distribution, what we are doing different basically, so that we are able to guide this sort of guidance basically for the 4 years?
So first of all, Himanshu, I just outlined in my previous response or one previous to that, that we have a comprehensive strategy, which straddles the entire value chain of the crop protection business, starting from supplier to product to customer, pharma, demand generation, dealers, et cetera. So it's a comprehensive strategy on that.
The second thing which differentiates Chambal from -- you mentioned cooperative players is that we have a very strong brand, right? One. Second, our decision-making processes, our speed in the market, all of those are significantly, I would say, different from if you would take cooperatives. And of course, our team is a very strong team. All our folks have strong agriculture background, folks have worked for many, many years in the market.
And the last bit is that we are now committed to -- maybe which I didn't mention earlier is that we are now significantly committed to demand generation through various marketing initiatives, right? Whether it is the seed to harvest program, whether it is launching of new products. So if you look at an overall strategy and then a super import on that, Chambal's inherent strengths are huge reach, network, brand, financial strength, that's what gives us the edge, which we see demonstrated in the market over the last 1, 1.5 years that the strong growth we get.
The next question is from the line of Nikhil Rungta from Nippon India Mutual Fund.
Sir, just one question from my side. In our JV, I must say, basically what's the capacity there? And since last year, in a couple of quarters, we operated at almost full utilization level. What are the CapEx plans we have for IMACID?
So the capacity in IMACID is close to 4 lakh, 5 lakh tons. And as of now, there is no immediate capacity expansion plan. We continue to look at it in the JV, with the JV partners, but there is no immediate expansion plan right now.
Okay. Okay, sir. And any plans on any investment in Morocco itself, which we are planning as part of our long-term investment?
Well, we keep evaluating it and as and when anything certifies or whatever then we'll let you know for sure.
The next question is from the line of [ Saket Saurav ], an individual investor.
So very basic and minor question. So when we talk about the DAP, which was primarily responsible for top line increase for same time margin dilution. So I think one of the opening remarks was that the pricing of DAP. So does that mean, say, Q2 onwards, it could also lower our realization? And in case we are carrying say high priced or high cost inventory, will it further dilute our margins? Or if you can help us with this.
See, we are operating in the market and because of the dynamic situation, I think it is difficult for us to say whether there will be further dilution in the margin or vice versa because it's a very dynamic situation. Like I said, we are seeing the softening of international prices. So let's see what happens, [ Saket ]. It's a very, very, very dynamic situation. It keeps changing every few weeks.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.
Thank you, everybody, for joining this call and for your very insightful questions. I wish all of you all the best on behalf of Chambal Fertilisers. And have a good day. Bye-bye.
Thank you. On behalf of Chambal Fertilisers and Chemicals Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.