Balaji Phosphates has been operating in the fertiliser industry for several years. The company claims to have an established network of quality dealers and raw material suppliers.
Balaji Phosphates’ manufacturing unit is located in the Dewas industrial area of Madhya Pradesh, which is centrally positioned to serve key agricultural regions.
The company claims to have an in-house testing laboratory equipped with electronic analytical balances, pH metres, sieve shakers, muffle furnaces, water distillation plants, and magnetic stirrers. This laboratory is used to conduct quality control tests on raw materials and finished products.
The company has seen a consistent increase in revenue from operations. Revenue from operations increased from Rs 123.65 crore in FY22 to Rs 144.54 crore in FY23 to Rs 151.55 crore in FY24.
The company’s revenue is highly dependent on the agricultural sector, which in turn is influenced by factors such as rainfall, soil quality, water availability, and government policies. Any reduction in cultivated land, erratic monsoons, or shifts in cropping patterns can lead to lower demand for fertilisers and negatively affect the company’s business, results of operations, and financial condition.
The company relies on imported rock phosphate as well as locally procured BRP and sulfuric acid. Any increase in global commodity prices, supply chain disruptions, or geopolitical tensions affecting these imports could raise production costs and impact profitability.
A significant portion of fertiliser sales in India depends on government subsidies provided to farmers. Any reduction or withdrawal of these subsidies, delays in payments under the direct benefit transfer (DBT) system, or changes in minimum support prices (MSP) for crops can decrease fertiliser demand and negatively impact the company’s business and financial performance.
The company primarily operates in Madhya Pradesh, Chhattisgarh, Maharashtra, Telangana, and Andhra Pradesh. Any economic, political, or social disruptions in these states could impact distribution channels, affect product sales, and negatively impact the company's overall financial performance.
The company, its subsidiaries, promoters, and directors are involved in certain ongoing legal proceedings. Any adverse judgments in any of these cases could be detrimental to the company’s business prospects.
As of January 31, 2025, the company had outstanding financial indebtedness of Rs 39.67 crore. Any failure to service or repay these loans can harm the company’s operations and financial position.
The company makes trade payments in foreign currencies, particularly US dollars, for imported raw materials. In FY24, FY23, and FY22, the company incurred foreign exchange losses of Rs 0.03 crore, Rs 0.15 crore, and Rs 0.05 crore, respectively. Any further depreciation of the Indian rupee could increase the company’s costs, negatively impacting profitability.
Balaji Phosphates has experienced negative cash flows in the past. For FY24 and FY23, the company reported negative cash flows from operating activities of Rs 3.48 crore and Rs 3.63 crore, respectively. Any continued negative cash flows could impact the company’s liquidity, ability to fund operations, and overall financial stability.
A major portion of the company’s revenue comes from its top key customers. Any failure to retain these key customers, expand the customer base, or a loss of business from these clients can adversely affect the company’s business and financial standing.