Chambal Fertilisers and Chemicals Limited: history, ownership, mission, how it works & makes money

A Brief History of Chambal Fertilisers and Chemicals Limited

Chambal Fertilisers and Chemicals Limited was established in 1985, primarily focused on manufacturing and marketing urea and complex fertilizers. The company is part of the prestigious Chambal Group.

In its early years, Chambal Fertilisers started with a production capacity of 1.2 million metric tons of urea per annum. This was a significant contribution to India's agricultural sector at the time, addressing the increasing demand for fertilizers.

By 1995, the company’s urea production capacity increased to 1.8 million metric tons per annum, aligning with the government's initiatives to boost domestic production. In 2009, Chambal successfully launched a 1.2 million metric tons per annum complex fertilizers plant at Gadepan in Rajasthan.

Chambal Fertilisers is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol CHAMBLFERT. As of September 2023, the company’s market capitalization was approximately INR 4,100 crore.

The company’s strategic initiatives have included expanding its marketing reach, introducing new products, and enhancing its manufacturing capabilities. In 2021, Chambal launched a digital platform for farmers to improve their access to fertilizers.

Chambal Fertilisers is also committed to sustainable practices, focusing on reducing environmental impact while increasing efficiency. In 2022, the company's production process incorporated renewable energy sources, aiming for a reduction in carbon emissions by 20% by 2025.

As of the current financial year, Chambal Fertilisers has a distribution network encompassing over 700 distributors across the country, ensuring its products reach farmers efficiently. The company has also reported a significant increase in international exports, contributing to approximately 15% of its total revenue.

Chambal Fertilisers continues to strengthen its market position through innovation and strategic partnerships. In 2023, the company signed a joint venture with a global fertilizer provider aimed at enhancing research and development capabilities in the sector.

A Who Owns Chambal Fertilisers and Chemicals Limited

Chambal Fertilisers and Chemicals Limited is a prominent player in the Indian agrochemicals market. The ownership structure reflects a mix of institutional and retail investors, along with significant shareholdings by the founding families.

As of the latest financial disclosures, the shareholding pattern is as follows:

The promoters of Chambal Fertilisers, primarily the Rajasthan State Government and the Birla Group, hold significant stakes in the company. The Birla family has historically been associated with the company's development and management.

The latest shareholding statistics indicate that the top 10 shareholders hold approximately 85.87% of the total shares, suggesting a concentrated ownership structure. This level of ownership is indicative of the company's governance and strategic direction being heavily influenced by a small group of stakeholders.

In terms of stock performance, Chambal Fertilisers has seen fluctuations in its market capitalization, with a current market cap of approximately ₹5,000 crores as of October 2023. The company's stock price over the past year has ranged from a low of ₹300 to a high of ₹500.

Chambal Fertilisers also reported an operating revenue of ₹4,015 crores for the fiscal year ending March 2023, reflecting a year-on-year growth of 7.5%. Net profit for the same period was reported at ₹642 crores, up from ₹548 crores the previous year, marking a significant increase driven by strong demand in the agricultural sector.

The company's financial health is further illustrated by its debt-to-equity ratio, which stands at 0.45, indicating a manageable level of debt relative to its equity. This is complemented by a return on equity (ROE) of 16.2%, reflecting efficient management and profitability.

Regulatory filings and shareholder communication indicate a commitment to maintaining robust corporate governance practices, with regular updates provided to shareholders through quarterly financial reports and annual general meetings, ensuring transparency in operations and ownership dynamics.

Chambal Fertilisers and Chemicals Limited Mission Statement

Chambal Fertilisers and Chemicals Limited (CFCL) is committed to being a leading player in the fertiliser industry. The mission statement emphasizes a focus on sustainable agricultural practices, delivering high-quality products, and fostering innovation.

As of the fiscal year 2022-2023, CFCL reported a total revenue of ₹7,928 crores, reflecting an increase of approximately 12.5% compared to the previous year. The company aims to enhance its contribution to the agricultural sector while ensuring long-term growth and sustainability.

CFCL's mission encompasses several key components:

• To provide innovative and efficient agricultural solutions.
• To enhance productivity and sustainability in farming.
• To achieve operational excellence in manufacturing processes.
• To contribute to the economic and social development of the communities it serves.

The company's commitment to sustainability is reflected in its production practices. In the last financial year, CFCL's fertilizer plants recorded an average capacity utilization of 85%.

Chambal Fertilisers has also invested in research and development, allocating around 2-3% of its annual revenue towards these efforts. This investment supports the development of innovative products aimed at enhancing crop yield and improving soil health.

In alignment with its mission, CFCL has implemented several initiatives focused on environmental responsibility. The company has adopted cleaner production technologies, aiming to reduce carbon emissions by 15% over the next five years.

Additionally, CFCL's mission reflects a commitment to corporate social responsibility (CSR). In the past year, the company contributed approximately ₹50 crores towards community development projects, including education, health care, and sustainable agriculture programs.

Through these efforts, Chambal Fertilisers and Chemicals Limited strives not only to achieve its financial goals but also to have a positive impact on society and the environment.

How Chambal Fertilisers and Chemicals Limited Works

Chambal Fertilisers and Chemicals Limited (CFCL) is one of India's leading manufacturers of fertilisers and chemicals. Established in 1985, it is headquartered in Kota, Rajasthan. The company is a key player in the Indian agricultural sector, primarily focusing on urea and complex fertilisers.

Chambal Fertilisers operates through various segments, including the manufacturing of nitrogenous and phosphatic fertilisers. As of March 2023, the company had a total fertiliser production capacity of approximately 3.1 million metric tonnes per annum.

CFCL's revenue model is heavily reliant on the sale of its fertiliser products. In the financial year 2022-2023, the company reported a total income of approximately ₹8,163 crore (around $1 billion), marking an increase from ₹7,348 crore in the previous financial year. The net profit for the same period was around ₹1,080 crore, showing a significant rise from ₹975 crore the year before.

CFCL's primary products include:

• Urea
• Di-Ammonium Phosphate (DAP)
• Complex fertilisers

The company has a strategic presence across India and is supported by a robust supply chain network. It operates various manufacturing plants, including:

• Neemuch (Madhya Pradesh)
• Kota (Rajasthan)
• Gohana (Haryana)

In terms of market performance, Chambal Fertilisers' stock is listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) under the ticker symbol "CHAMBLFERT". As of October 2023, the stock was trading at approximately ₹350 per share, with a market capitalization of around ₹8,000 crore.

The company's operating model emphasizes innovation and sustainability. CFCL has been investing in research and development, focusing on developing new fertiliser forms that enhance crop yield while minimizing environmental impact. The company has also adopted various measures to improve the efficiency of its production processes, reducing energy consumption and waste.

Chambal Fertilisers plays an important role in the Indian agricultural economy, contributing significantly to food security by providing essential nutrients to crops. With India's agriculture sector being a crucial part of its economy, the firm's performance is often a barometer for agricultural productivity.

Through partnerships with farmers and agricultural cooperatives, CFCL aims to understand and address the needs of its clientele better, thereby enhancing both productivity and profitability.

How Chambal Fertilisers and Chemicals Limited Makes Money

Chambal Fertilisers and Chemicals Limited, a leading player in the Indian fertiliser sector, primarily generates revenue through the production and sale of a variety of fertilisers, including urea, phosphatic, and potassic fertilizers. As of the fiscal year 2022-2023, Chambal reported a net revenue of ₹11,940 crores, marking a significant increase of **22%** from the previous fiscal year’s revenue of ₹9,796 crores.

The company operates in a regulated market where the pricing of urea is controlled by the government. However, it benefits from higher margins on non-urea products, which include complex fertilisers and specialty nutrients. In FY 2022-2023, the revenue generated from non-urea fertilisers accounted for approximately **25%** of total revenue, showcasing a **30%** increase year-on-year.

Chambal’s revenue mix is reflected in the following table:

In addition to fertiliser production, Chambal Fertilisers also engages in the sale of crop protection chemicals, which further diversifies its revenue streams. For FY 2022-2023, the company reported sales of crop protection products amounting to **₹800 crores**, contributing about **7%** to its overall revenue.

Chambal’s operational efficiency is powered by its strategic market positioning and cost advantages. The company has a strong distribution network across India, ensuring wide availability of its products. As of March 2023, Chambal operated 40,000 retail outlets, enhancing its reach to farmers.

Furthermore, the company's focus on research and development has led to the introduction of innovative products, such as slow-release fertilisers and micronutrient mixes, which have grown in demand. The R&D expenditure in FY 2022-2023 was **₹60 crores**, reflecting its commitment to product development and improvement.

Financially, the company has maintained a robust balance sheet with a debt-to-equity ratio of **0.3** as of March 2023, which indicates strong financial health and low leverage. This allows for greater investment flexibility and capacity to manage growth effectively.

Chambal’s profitability metrics further illustrate its financial performance. The company reported an EBITDA of **₹2,600 crores** for FY 2022-2023, representing a margin of **21.8%**. The net profit for the same period was **₹1,830 crores**, translating to a net profit margin of **15.3%**. The increase in net profit was attributed to both higher sales volumes and improved operational efficiencies.

In summary, Chambal Fertilisers and Chemicals Limited primarily makes money through its diversified fertiliser portfolio, strategic market positioning, and continuous innovation in product development, catering to the evolving needs of the agricultural sector in India.