Unlisted Shares

Revenue Growth:

• Operational revenue increased by 61% year-over-year due to a surge in sales. Total revenue grew by 80% year-over-year as a result of strategic import portfolio changes. Revenue was further boosted by a 33% year-over-year growth in the sugar and dairy division.
• Company profits increased by 16% year-over-year (YoY) in FY23, driven by surging fertilizer sales amidst cooling prices and favorable rainfall. To offset the shortfall in phosphatic fertilizers, the company increased imports of complex fertilizers by 198%, leading to remarkable sales growth in this segment.

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Profitability: 

• Net profit margin (NPM) declined to 10.5% in FY23 due to escalating finance costs.

• Return on equity (ROE) witnessed a marginal drop to 26% as a result of a simultaneous decline in NPM and equity multiplier.

• Return on assets (RoA) also experienced a fall, partly attributable to a reduction in current assets. However, a noteworthy improvement in asset turnover was observed.

• Conversely, return on capital employed (RoCE) exhibited an upward trend, driven by a substantial year-over-year (y-o-y) increase in EBIT (80%), surpassing the growth in capital employed (45% y-o-y)

Investment Thesis: 

• Indian Potash holds a dominant position as the market leader for DAP+MOP fertilizer and primarily serves as a government-subsidized canalizing agent for imports. The company boasts a strong reputation and a substantial presence across the domestic grassroots level.

• Indian Potash further engages in the trading of other fertilizers and operates a modest dairy and cattle division. The company has secured a significant stake in Jordan mines, expanding its operational scope.

• Despite the presence of growth opportunities, Indian Potash's growth is primarily driven by demand-led imports rather than value-added products.

• As a company predominantly held by non-public cooperatives, the likelihood of investor exits through a public IPO or other means is relatively low. Consequently, the stock is perceived as a stable dividend-generating asset. Due to these factors, Indian Potash's price-to-earnings (P/E) ratio is considerably lower compared to its peers. Nevertheless, it remains a fundamentally strong enterprise.

Key Stakeholders: ​Indian Farmers Fertilisers Cooperative Limited (IFFCO), Gujarat State Co-operative Marketing Federation Limited, Gujarat State Fertilisers and Chemicals Limited ,Andhra Pradesh State Cooperative Marketing Federation Limited, Madras Fertilisers Limited cumulatively hold 64.08% stake in the company.