 "PPL to hold back price hike for two months")
"The time is still not appropriate for a price hike due to large carryover of last fiscal. By the end of March 31 this year, fertiliser inventory stood at around five million tonne. Price scenario still remains very depressed due to glut in the market. We have to wait till the kharif season ends," said Sharad S Nandurdikar, managing director, PPL.
PPL that banks on imported raw materials was battling stressed margins and reported 42 per cent slump in net profit at Rs 103.59 crore by the close of 2012-13 compared to Rs 177.71 crore profit in 2011-12. But till now, the company had absorbed the high cost of production without passing on the burden to the farmers. The company's turnover at Rs 5,272.61 crore was up 13 per cent against 2011-12 while its sales volume rose three per cent.
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"Our EBITDA (earnings before interest, taxes, depreciation and amortisation) declined 23 per cent in 2012-13 while net profit saw a drop of 42 per cent. This is due to rupee depreciation, higher interest cost due to delay in subsidy payment by the Government of India, additional cost towards contract workers and lower contribution on account of higher raw material cost," said D S Ravindra Raju, the company's chief operating officer.
PPL had to pass through a tough phase in 2012-13 marked by a deficient and delayed monsoon in many parts of the country, high differential in retail price of urea and di-ammonium phosphate (DAP) owing to skewed government policy that saw demand for phosphatic fertilisers contracting 35 per cent.
Urea which is yet to be brought under the fold of Centre's nutrient based subsidy scheme, was being sold at Rs 5,000 per tonne while prices of phosphatic fertilisers were ruling at Rs 22,500 a tonne. This glaring disparity in prices had prompted farmers to increasingly bank on urea, leading to a huge inventory of phosphatic fertilisers.
PPL sold 857,000 tonne of its own DAP and 430,000 tonne of gypsum during 2012-13. Moreover, as part of its traded products, the company sold 57,000 tonne of MoP (Muriate of Potash), 587,000 tonne of imported DAP and complexes, 4,900 tonne of crop protection chemicals and 500 tonne of water soluble fertilisers under the brand name 'Navratna'. PPL is also on course to implement its Rs 600-crore expansion plan by July 2014. The amount will be invested in setting up an all-new sulphuric acid plant, de-bottlenecking of its existing phosphoric acid plant, setting up a gypsum pond and a 20 Mw captive power plant (CPP) at its project site at Paradeep. Despite problems in raw material availability, PPL produced 942,000 tonne of fertilisers during 2012-13. This included 310,000 tonne of DAP and 632,000 tonne of complexes of NPK. Among intermediary products, production of sulphuric acid and phosphoric acid stood at 610,000 tonne and 210,000 tonne respectively.