💰 Financial Performance

Revenue Growth by Segment

Total revenue grew 10.5% YoY to INR 6.57 Cr in Q3 FY24. While segment-specific growth percentages were not fully disclosed, the Hospitality segment maintains a 50-60% occupancy rate, and the Reality segment is transitioning from planning to execution with a projected revenue of INR 400-500 Cr from the Thane project.

Geographic Revenue Split

100% of revenue is derived from India, specifically Maharashtra, with major operations in Thane (Realty), Palghar/Wada (Fertilizer and Hospitality), and Mumbai (Corporate/Realty).

Profitability Margins

Profitability was severely impacted in Q3 FY24 by a one-time exceptional loss of INR 2.40 Cr due to a reduction in government subsidy rates for SSP fertilizer. This resulted in a negative bottom line for the quarter despite the 10.5% revenue growth.

EBITDA Margin

Core EBITDA was pressured by the INR 2.40 Cr inventory write-down under the NBS policy. Management expects margins to recover as they pivot to a lease-cum-conversion model for the fertilizer plant, which will eliminate raw material price volatility.

Capital Expenditure

The company has planned significant CAPEX for the Anchaviyo resort expansion (adding 4-5 rooms per quarter to reach 125 rooms) and the construction of a 60-story residential tower in Thane with an estimated construction cost of INR 3,500 per sq. ft.

Credit Rating & Borrowing

ICRA previously assigned [ICRA]B+(Stable)/[ICRA]A4 under the 'Issuer Not Cooperating' category in January 2022; these ratings were withdrawn in July 2022 at the company's request. Current debt includes a sanctioned construction loan of INR 29 Cr from Saraswat Cooperative Bank and INR 20 Cr from another bank.

⚙️ Operational Drivers

Raw Materials

Spent Sulfuric Acid (approx. 30-40% of SSP cost) and Rock Phosphate (approx. 50-60% of SSP cost).

Import Sources

Raw materials are sourced from Maharashtra (Spent Sulfuric Acid) and international markets (Rock Phosphate), with supply chains currently disrupted by the Russia-Ukraine war.

Key Suppliers

Rashtriya Chemicals and Fertilizer Limited (RCF) is a primary supplier of spent sulfuric acid from its Chembur plant.

Capacity Expansion

Hospitality: Currently 51 rooms, expanding to 60 by March 2024 and 125 rooms eventually. Realty: 60-story tower in Thane (262 flats) and a 13-story building in Vile Parle. Fertilizer: Plant currently being offered for lease to larger players like Chambal Fertilizer.

Raw Material Costs

Raw material costs for the fertilizer segment have been volatile due to the Russia-Ukraine war and changes in the Nutrient Based Subsidy (NBS) policy, leading to a specific INR 2.40 Cr loss on unsold inventory.

Manufacturing Efficiency

Fertilizer operations are currently being optimized through third-party leasing; Hospitality efficiency is measured by a 50-60% average yearly occupancy at the Anchaviyo resort.

Logistics & Distribution

Distribution is focused on the fertilizer markets in Maharashtra, though the company is currently pivoting its business model toward real estate development to capture higher margins.

📈 Strategic Growth

Expected Growth Rate

400%

Growth Strategy

The company aims to generate INR 2,000-2,500 Cr in cash flow over the next 3-4 years. This will be achieved through: 1) Developing a 60-story tower in Thane (INR 800 Cr revenue potential), 2) Expanding Anchaviyo resort to 125 rooms for wedding tourism, 3) Developing 100 acres of land in Wada (INR 1,000 Cr revenue potential), and 4) A joint venture for a 13-story luxury project in Vile Parle (INR 175-200 Cr revenue).

Products & Services

Single Super Phosphate (SSP) fertilizer (powder and granulated), 2 BHK and 3 BHK residential flats, luxury theme-based resort stays, and sporting complex facilities.

Brand Portfolio

Bharat (Fertilizers), Anchaviyo (Resort), Bharat Agri Fert & Realty (Real Estate).

New Products/Services

Launch of a 60-story residential project in Thane (Majiwada) and development of a sporting complex facility in Wada to complement the resort business.

Market Expansion

Expansion into the luxury residential market in Mumbai (Vile Parle and Fort) and the destination wedding market in Palghar district.

Market Share & Ranking

The company identifies as the oldest SSP company in India still surviving and diversifying.

Strategic Alliances

The company is in discussions with Chambal Fertilizer for a lease-cum-conversion agreement for its fertilizer plant and has explored joint venture possibilities with Shapoorji Pallonji for the Fort project.

🌍 External Factors

Industry Trends

The fertilizer industry is facing margin pressure due to policy shifts, leading companies to diversify. The real estate sector in Thane is seeing a trend toward high-rise luxury developments, which the company is capitalizing on with its 60-story project.

Competitive Landscape

Competes with major fertilizer players like Chambal Fertilizer and Dharamsi Morarji Chemical Company (though the latter's plants are noted as closed), and various Tier-1 real estate developers in the Thane/Mumbai region.

Competitive Moat

The company's moat is its massive, low-cost land bank (120 acres in Wada and prime land in Thane) acquired decades ago. This allows for a low cost of production in Realty (INR 3,500/sq. ft. cost vs INR 18,000/sq. ft. selling price).

Macro Economic Sensitivity

Highly sensitive to Indian government fertilizer subsidy policies (NBS) and interest rate cycles affecting real estate demand.

Consumer Behavior

Increasing demand for 'staycation' and 'wedding destination' resorts near Mumbai, which supports the expansion of the Anchaviyo resort.

Geopolitical Risks

The Russia-Ukraine war is a primary risk factor, having already disrupted the supply of raw materials for the fertilizer division.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Fertilizer Control Order and NBS policy for the agri-division, and RERA (Real Estate Regulatory Authority) for the reality division. The company has received RERA approval for 35 floors of its 60-story Thane project.

Environmental Compliance

Not specifically disclosed, though fertilizer manufacturing is subject to stringent pollution control norms.

Taxation Policy Impact

The company is subject to standard Indian corporate tax rates; fiscal policy regarding fertilizer subsidies (NBS) is the most critical regulatory driver.

Legal Contingencies

No specific pending court cases or values were disclosed in the provided documents.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the timing of regulatory approvals for the remaining 25 floors of the Thane project and the volatility of government subsidy rates which can impact the fertilizer bottom line by 30-40%.

Geographic Concentration Risk

100% of physical assets and revenue generation are concentrated in the state of Maharashtra, specifically the Mumbai-Thane-Palghar belt.

Third Party Dependencies

Significant dependency on government subsidies and the successful execution of the lease agreement with a 'fertilizer giant' to stabilize the agri-business.

Technology Obsolescence Risk

Low risk in Realty/Hospitality; Fertilizer plant requires periodic maintenance but the shift to a lease model transfers some operational tech risk to the lessee.

Credit & Counterparty Risk

The company is reducing credit risk by moving toward a cash-flow-heavy real estate model and seeking reputable corporate lessees for its industrial assets.