Ladies and gentlemen, good day and welcome to Dhanuka Agritech Limited Q3 FY25 earnings conference call hosted by Antique Stock Broking Limited. As a reminder, all participant lines will be in the list-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Riju Dalui from Antique Stock Broking. Thank you, and over to you, sir. Thank you. On behalf of Antique Stock Broking, a warm welcome to all the participants on Q3 FY25 earnings call of Dhanuka Agritech. Today, we have Mr. M. K. Dhanuka, Chairman; Mr. Rahul Dhanuka, Managing Director; Mr. Harsh Dhanuka, Executive Director; and Mr. V. K. Bansal, CFO, on the call. Without any further delay, I would like to hand over the call to Mr. M. K. Dhanuka for opening remarks, post which we will open the floor for Q&A. Thank you, and over to you, sir. Thank you. Good afternoon, ladies and gentlemen. Myself, M. K. Dhanuka, Chairman of Dhanuka Agritech Limited, welcome you all to the Q3 earnings call. I hope all of you are doing well and keeping safe. I have with me Mr. Rahul Dhanuka, Managing Director, Mr. Harsh Dhanuka, Executive Director, and Mr. V. K. Bansal, CFO of the company. As you are aware, Dhanuka Agritech is a leading Indian agrochemical company. Dhanuka is working with the vision of transforming India through agriculture. We have a pan-India presence in all major states to reach out to more than 10 million farmers with our products and services. Dhanuka's key focus has been on the introduction of novel chemistry and extensive product development, distinguishing us from the rest of the industry. With four manufacturing units and 41 warehouses across India, we cater to around 6,500 distributors and around 80,000 retailers. Dhanuka has a strong sales and marketing team to promote and develop new products. Dhanuka's strong R&D division has world-class NABL-accredited laboratory, as well as an excellent team for new product registration and development. Dhanuka has international collaboration with 10 leading global agrochemical companies from Japan, the U.S., and Europe, which helps us to introduce the latest technology in India. Quarter three is important from the perspective of Rabi crops like rice in South and East India, wheat in North and Central India. This quarter is also important for farmers for harvest of Kharif crops and selling the harvest to generate money for the next season. In the horticulture segment, Q3 is a key season for potato in North India, grapes in West India, and chili in South India. This year, the disease appearance in potato, grapes, and chili was less, resulting in lower sales of some key fungicides. Also, due to carryover inventory of chili from last season, the commodity prices remained low, resulting in fewer sprays in the crop. However, I am happy to share that we got excellent sales and liquidation for key products like LaNevo, as well as Mycore Super in this season. Both these products were introduced in this year itself and have been well accepted by the farmers across India. Further, we introduced one new 9(4) product, Purge Pyroxasulfone, 85% WG, to control weeds in wheat crops and received good response from the market. In terms of financial performance for the Q3 FY24-25, revenue from the operations stood at INR 445.27 crore in Q3 of FY24-25 versus INR 403.24 crore in Q3 FY23-24, representing an increase of 10.42%. EBITDA stood at INR 75.56 crore in Q3 of FY24-25 versus INR 62.16 crore in Q3 FY23-24, up by 21.55%. Profit after tax stood at INR 65.04 crore in Q3 of FY24-25 versus INR 45.37 crore in Q3 FY23-24, up by 21.33%. Zone-wide share of turnover for Q3 FY24-25: North India 22.63%, East India 11.18%, West India 27.57%, and South India 38.62%. Product category-wide percentage share of turnover for Q3 FY24-25: insecticides 29.99%, fungicides 19.96%, herbicides 34.71%, and others 15.34%. We have also informed that the company has acquired international rights to the active ingredient Iprovalicarb and Triadimenol, invented by Bayer AG, Germany. With this acquisition, Dhanuka plans to expand its footprint in more than 20 countries, including the regions of Latin America, Europe, the Middle East, and Africa, as well as Asia, including India. This acquisition will enable Dhanuka to embark on a journey of global market expansion. Dhanuka will be shifting the manufacturing of at least one of the products to India, leveraging the capabilities of our manufacturing unit at Dahej, Gujarat. Dhanuka considers itself responsible towards securing the farmers' welfare and preserving food security of the nation. We continue to strengthen our association with the agriculture universities, Krishi Vigyan Kendra, and other critical institutions to impart knowledge and latest technology to the farmers. I am happy that in spite of a challenging environment, the company has been able to deliver double-digit growth in top line and around 21% growth in the bottom line. So, considering the low pest attacks, low rainfall in the rainy season, and the challenging environment, I congratulate the team for these reasonably good results. Thank you very much for your kind attention. And now, we would like to open the forum to take the questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Himanshu Upadhyay from Bugle Rock PMS. Please go ahead. Yeah, hi. Good afternoon. My question was regarding the acquisition we made. We bought a brand name for Triadimenol, which we did not buy, which is a larger product, and the market share is around 25% for the existing brand. Can you give some thoughts for it and our strategy here when it's a larger product and why we did not choose to buy the rights for that brand? Yeah. Thank you for that question. So these two products, Iprovalicarb and Triadimenol, they both contribute about 55%-45% to the revenue. Iprovalicarb is the larger revenue contributor out of these two products. With respect to the brand name around of Triadimenol, so these were brand names in a series of other products also with Bayer and had Bayer initials, B-A-Y, in some of these products attached. So they cannot transfer these brands to Dhanuka. So that was the reason not to acquire those brand names. Okay. And outside India means the type of model we are thinking is of owning or having a basket of products and brands, and registration for these products will be ours. And generally, it would be one national distributor. Manufacturing may be ours or from a third party, okay, depending upon the situation. So is this the type of business model we like to be building outside India or parts of this? Based on acquisition, should we understand this? Yes, absolutely. So this acquisition is for a couple of products. Of course, we have our own products right now from Dahej, which is Bifenthrin, which is already there. And we are looking at expanding this basket of products further in the future, maybe through organic or inorganic route, whatever will be feasible in the future. But yes, have a basket of products available for international markets where most of the countries we will acquire national distributors where the registrations are owned by us, and they will be doing the sales of the products. And what are the challenges in such a business model, and what are the capabilities we'll need to develop? Because currently, when we are working in our country, the whole distribution is ours. And we have a pretty good connect in all these in the country with distributors from top level to bottom. And we have a pretty good understanding of the country. So what type of challenges are there, and how do we overcome those challenges in the business model what we are trying to build outside India? Yeah. I think one of the biggest challenges is around registrations. Global registrations are a time-taking process. And to understand the registration process across different countries and their rules and regulations and doing the entire documentation work, that is the challenging work. And of course, building the customer base. So with these two products, we'll get the customer base and the existing registrations for increasing the new products, adding new products within this customer basket and acquiring more customers. That is going to be the path forward. For building these skills, we have some team members already. We have created a specialist team for focusing on international business. And we've identified a few positions where we'd like to get capability from outside. Are these products already present in India? What is the size of these products in India? Can you give what crops are they used in India for, or they are not present in India currently? Yeah. So Iprovalicarb is present in India. Roughly, the revenue would be in the range of about INR 30 crore for last year. And Triadimenol is not present in India. The crops in which Iprovalicarb is used are horticultural crops, grapes, tomatoes, and other fruits and vegetables. And one thing you stated in the last call after the acquisition that we expect these products to grow by 10%-15%. But the last two years have been painful for these products. So what are the things you are planning or thinking that which can take the growth ahead for these products and gain market share in those geographies or, let's say, presence across more countries? So some thoughts on that will be helpful. And that was the last question. Thanks from my side. Yeah. Thank you so much. And really interesting questions from your side. And yes, to revive the volumes of these products, we are working on a marketing campaign. Last two, three years, due to portfolio clashes within Bayer's internal portfolio, their attention to this product has been reduced. And there has been no marketing spend on this product. Now, we will be doing marketing spend further to enhance the volumes of these products over the next few years. Yeah. Thanks so much. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Rohit Nagraj from B&K Securities. Please go ahead. Yeah. Thanks for the opportunity and congrats on the consistent set of numbers. First question is for this quarter, of the 10% YoY growth, how much has been contributed from volumes and pricing? You see, there is a difference of 125-ish points. Value is 10.42, and volume is around 11.67 times. Okay. So basically, there is still continued impact on the pricing for the products. So pricing has not improved. It is more or less stable to slightly plus-minus. Is that understanding correct? You see, during this financial year, so quarter two and then quarter three. Right. Right. Quarter four should be value and volume must be similar. Okay. So we expect in Q4 that the growth will be driven both from volumes as well as pricing. Absolutely. Okay. Fair enough. Second question is on the Dahej manufacturing facility. So again, similar question. What was the revenues in Q3 nine months? And what was the EBITDA level negative contribution from the same for Q3 and nine months? You see, in Q3, the revenue is around INR 4 crore, and in nine months, the revenue is around INR 26 crore. In terms of EBITDA, loss in Q3 is around INR 4.25 crore, and in nine months, it is around INR 12 crore. Okay. Fair enough. Now, coming to the products lineup, so we have mentioned that we will be having multiple sets of products over the next two years. Almost eight new product launches are planned. If you can just give us an idea about in FY26, which are all products and which categories are these products used for, which we are planning to launch? Thank you. You're talking about from Dahej for the brand sales? For the brand sales. And if you can provide Dahej's details as well. Yeah. For brand sales, we have a lineup of products. In the next financial year, we'll be launching one rice herbicide and a new fungicide for grapes and horticultural crops. These are the two new 9(3) introductions, plus a few 9(4) products, Me-Too introductions, as identified by our portfolio gap, and moving forward, also, we'll have new products being introduced every year, 9(3) as well as 9(4). With respect to Dahej, we have developed many products in the lab. Right now, the commercial viability is slightly on the lower side, and the fresh CapEx is not justified for low viability products, so we have not gone ahead for any new fresh CapEx in Dahej's part, but yes, we are working on some more new product development in the R&D, and we'll be coming out with some more products in the next two to three years. Sure. Just one last question. Again, on the Dahej facility, given that currently it is operating at low levels, what do we expect in terms of revenue and contribution in FY26, given that probably we'll be only continuing Bifenthrin for the time being? So any plans? How does FY26 look like from the Dahej perspective? Thank you. Yes. For FY26, we are looking at a revenue of in the range of INR 60-70 crore. And assuming only Bifenthrin over there. And the efforts around that is, of course, domestic sales is there. And we are looking at international registration. Some of them are at advanced stage. Some of them are at early stage. So we are working on international registration for Bifenthrin. Sure. That's it from my side. Thanks a lot. All the best. Thank you. Participants who wish to ask a question may press star and one. The next question is from the line of Bharat Gupta from Fair Value Capital. Please go ahead. Hi, sir. Thanks for the opportunity and congratulations for a good set of numbers. A couple of questions are from my side. So first, when we look, particularly since we'll be gearing up for the next Rabi, so how do you see the pricing of the RMs currently in place? Do you see a stabilization which is there in the RM prices? Yeah. As per the discussion with the Chinese players, so China plays an important role in deciding the prices. So overall, the prices are more or less stable, but it differs from product to product. Some of the products' price increases are also there, like in the Cartap, in the Mancozeb, in the Chlorpyrifos, Cypermethrin, etc. But overall, in general, the prices are stable. And in the near future, we don't foresee any major change in the prices. Right. Sir, particularly with respect to the regime changes, U.S. trade tariffs are one of the critical things which are bringing everything to a head. So how do you see this particular thing playing out for us? Eventually, we are also one of the manufacturers in the technical side. So do you think it will be a sizable amount of opportunity which we'll be getting? And how do you see with respect to our core business? This will take time to play out the impact of tariffs because China continues to impact the chemical industry globally because of their really low prices and almost eating into very sharp price that they manage. In addition to that, in anticipation of tariffs, China has front-loaded various markets, including the U.S., in the last quarter. So that will have its own impact over the next few months to go. Yet, China Plus One story has more grounds to play out as we see that this tariff regime, as of now, appears to be favoring Indian growth story and Indian chemical industry growth story and Indian partnership with U.S. and other countries' story, so that appears to be more favorable. Now, the impact of tariffs from the U.S. will have another side of it, which is if China will not be able to export to the U.S., then Chinese prices will come down further for other countries. Now, will that happen or not? We are yet to see and a few more months before we can really understand and break through or see through the impact. Right. The reason I was asking because in terms of tariffs, so we'll be procuring a majority amount of RMs. Our contracts would be in place. So thereby, my question was whether there has been some sort of a moderation in the prices, it has stabilized, or you anticipate that because of the actions which will be taken in place so the prices can see a further amount of correction? So as of now, like you said earlier, most prices appear to be balanced. Many product prices have already shown upward trend for tariffs. So we are looking at no further corrections, not major corrections for sure, in the next few months. Sir, with respect to the gross margins, so how are we looking at the FY26? Will there be any kind of an improvement which currently we are factoring in? You see, the gross margin continuous improvement is really very difficult. This year, the gross margin is almost best in the last five years. So maintaining the gross margin would be a really difficult task in the year FY26. Right. And sir, my last question remains on the Bayer side. So what is the overall revenue potential which we can factor in from these two products? For the next year, part of the revenue will come in the P&L because the transition will be over a period of time. In the initial period, while Bayer continues to sell, they will be transferring royalties to Dhanuka. In next FY, by the end of next FY, the entire 100% revenue will come on Dhanuka's books. For FY27 onwards, yes, we are looking at 15% growth in the product revenues year on year for the first five years. All right. So these two molecules are generic in nature, right? Yes, that is correct. Overall market potential for these two molecules in dollars or in INR terms, what would it be? In terms of value or volume? In terms of value. In terms of value, both the products combined can go up to INR 250 crores. Okay. That's it from my side. Thanks so much. Thank you. The next question is from the line of Ramesh Sankaranarayanan from Nirmal Bang Equities. Please go ahead. Thank you. And good evening and congratulations on the results. Sir, in the presentation, in the product mix you have shown, the other category seems to have increased the share. So is the margin improvement driven by the other category? And what are these products and the other categories? The margin improvement is almost all round. Largely it's driven by the licensed category, which is specialty molecules. But in some of the molecules, where the price drop was there, but that was not passed on into the brand in the same percentage. Therefore, in general, there is an improvement in the gross margins. So, these other categories is what? Plant growth regulators. What are these other categories? Whether the 300 basis points increase? Generics. They are the generics. Okay. Okay. And secondly, on the Bayer products, is there any cost you have booked? And what is the overall acquisition cost? Because we'll have to amortize that, right? So in terms of the P&L impact and the balance sheet, what is the cost you will book in your balance sheet in terms of the value of the acquisition? And what will be the amortization per annum for that acquisition? You see, overall cost would be around INR 160 crore, which will be capitalized in Q4. Okay. And how would the amortization be over the next four, five years? Everything issued under deposition will be clean deposition. They will all be registrations, right? It will be under the higher rate of depreciation. Right, I need to check, but we are eligible for the depreciation every year. Okay. And so to the extent that you are seeing visibility on royalty and the income from sale of these products by the end of next year, when do you think you'll be able to generate the kind of IRR you expect for this acquisition in terms of ROC or IRR, whatever measure you're using? Will it be visible from the second half of FY26, or will it be more like towards FY27? I think in the second half of the next financial year, that visibility will definitely be there. Okay. So one last thought. In terms of the volume growth for FY26, now, this year we have seen very high volume growth in most geographies, especially in the export market. For you, of course, it's the domestic market. So on the kind of performance we have seen in your company year to date and likely for FY25, what is the more realistic top-line growth we can expect next year? And how much of that would be driven by volume growth in FY26? I think other than Bayer molecules, it should be around 15%. 15% will be your top-line growth? Yeah. Plus whatever revenue we will generate from the Bayer molecules. Yeah. And this 15% growth, what is the ballpark volume growth you would expect? What is the volume growth? Volume, I'm thinking almost similar. So mostly driven by volum e growth. Okay. I appreciate it. Thank you very much, sir. Thank you very much. Thank you. The next question is from the line of Dhruv Muchhal from HDFC. Please go ahead. Yeah. Thank you so much. Sir, if I look at the nine-month volume growth versus the last year, it seems it's been reasonable. And it's not as if the last year was a very weak year. So just trying to understand, is there something which is structurally helping us, or is it across the industry? Or if it's structural, what's aiding such decent volume growths? Just trying to understand what's helping. Your question is not clear to me. Could you repeat that, Dhruv? Yeah, so if I look at the nine-month numbers for volumes, the growth has been quite reasonable, and it is not as if the last year's base was weak, so there continues to be consistent volume growth, so just trying to understand what's helping. Is it across the industry that volumes are strong? There are some fundamental factors which are aiding this. Okay. So what's happening across the industry, of course, you would have a better idea in terms of the financial numbers. Some have come in. Some more will come in a few days. I can say that Dhanuka Agritech is doing a good job in terms of reaching out to the farmer, educating them, and servicing the retail channel, which is the secondary sales channel which we are working on aggressively. In addition to that, the volume growth has been aided, supported by the new products that we have introduced: LaNevo, a powerful insecticide; MYCORe Super, a soil health rejuvenator; Purge, a very wonderful Japanese herbicide; Miyako, again, a Japanese miticide; and a couple of other products. So they have done a good job. And we have done a good job of introducing them and quickly commercializing them, ramping up the volumes. So I think that's what's behind our volume growth overall. Generic products in our portfolio have taken a beating. So I would say generic products across the industry have taken a sharp beating. And overall, the season has not been very favorable. And that's why generic products have taken a price as well as volume beating. So for you, on a ballpark basis, if you split the business between generic and your specialty, what would be the decline in generic volumes versus what is the specialty growth? Or whatever? What is the range of specialty and generic growth in volumes? So you see, in overall growth is largely driven by the specialty molecules. Generic, there is no growth in terms of value. Volume could be 3%-4%. Okay. And for you, the split between generic and specialty, as you classify, is about two-thirds, one-third, right? Yeah. Largely, you can say. All right. And so the second question is on the margins. So again, you are also consistent steadiness in margins. So again, the same question I've been asking for some time. Is it primarily because of the fall in AI prices, which is probably not passed on to the market at some point that will happen? Or do you think these margins are now consistent, sustainable, and can continue? Whatever had to be passed on is largely passed on. You see, gross margin in the range of 38%-39%, I feel is sustainable, right? And beyond that, in this year, exceptionally, it's in the range of around 40%. So that is basically because of declining P&L prices and all. But in the long run, I think between 38%-39% gross margin is absolutely sustainable. So I'm just wondering, it has been more than a year now where the AI prices have been low, and the market is probably, in some sense, it seems, absorbing the final formulation prices despite the low AI prices. So do you think there is scope for correction? Or I'm just trying to understand what's helping. If the AIs are lower and the formulation is not passed on, but still the market is accepting it, so why do you worry that the margins can probably revert back? You are repeatedly using a word called correction. So when you say correction, what do you mean by correction? Is my point, that is one. I will leave that question over there. And the second one is what is helping. So helping is our approach. Our approach of educating the farmer with Dhanuka Doctors, servicing our primary channel, keeping robust relationship wherein, rather than working with other competitors, they would prefer to work with Dhanuka. And our efforts to work with the secondary channel, the retail network, as we call it. These are some of the dimensions of what is working in our favor in terms of why we are able to grow our specialty products and why we are kind of holding back margin loss on generic products. Having said that, demonstrating margin growth year on year may not work out due to some seen and some unforeseen reasons. Still, our commitment is to stay around 38%-39% bracket, and that would be the effort. Got it. That's helpful. Thank you so much and all the best. Thanks. The next question is from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking. Please go ahead. Yeah. Hi. Thanks for the opportunity. Hope I'm audible. So my first question is with respect to the Rabi season, how has been the January offtakes? If you can throw some light, how have the offtakes been in the January month for the domestic market? Overall, January, and if I may say December, both the months have not been very great in terms of Rabi's off-take, and the pest pressure, disease pressure has been pretty low in North India as well as in West India, including chili or South India, so pest and disease pressure has been really low, unconventionally low for December and January. Okay. So we will be able to achieve the guidance that we mentioned, around 14% sort of revenue guidance and 100 basis points improvement in the margin in the fourth quarter? That's right. That's right. We stick to that. We stick to that. Okay. And so I just wanted to understand what would be the trade margins for the dealers and distributors? If you can throw some light on that front as well. Is it like trade margins is important to throw some light? Can we skip that one? You can find out from your market research. Sure. Sure. And just wanted to know one more thing on the number of registrations that would be transferred from Bayer to Dhanuka. How many number of registrations would be transferred for both the products? So the products, the products are registered in almost if I talk about across all the formulations. So two products into two formulations each, four formulations. Across the four formulations, almost 30 registrations will be passed on to Dhanuka. And at the same time, we are finding out from our market connect, there are some registrations which Bayer has not renewed in the past. So there is possibility to renew those registrations as well. Okay. And is it possible to share any gross margin or EBITDA margin for these products? And what would be maybe a two-year forward guidance for these products on gross margin and EBITDA? Yeah. The EBITDA margins will be in line with our existing EBITDA margins. Okay. Fair enough. That's it from my end. Thank you so much. Thank you. The next question is from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah. Thank you for the opportunity. Sir, by when would you be shifting manufacturing for both the molecules to India? Right. So one of the molecules we are planning to shift for sure. That will take about one and a half, two years to get the regulatory approvals because it doesn't have an Indian manufacturing approval to date. So it will take roughly two to three years. And the other product, currently, we are not planning to manufacture in India because it was already outsourced by Bayer to a third party. So cost reduction and optimization over there will take longer. So that is not in the plan immediately. Okay. So then keeping it outside, I mean, would it be more accurate for us? Generally, people shift manufacturing to India for the sake of lower cost. India or China. So keeping the manufacturing there, would it be margin accurate at current price? So for Triadimenol, it is not being manufactured in Europe. So it is already outsourced to another country. So we believe it is at a fairly competitive price already. Okay, and sir, would you be looking at geographical expansion for these molecules? I believe one of the molecules is sold only in Brazil for you. I mean, for Bayer, so would you be eyeing some registrations in newer geography? Yes. So for Triadimenol, the product registration is only in Brazil, the part of the business that we have purchased. So Brazil, as you are aware, is a high entry barrier country where new registrations take five-to-six years' time even for an existing registered product. So that is why it's a critical acquisition for us. Expanding this product to other countries, we bring demand for this product in other countries as well because it is used in cereal crops also. But in Europe, it is restricted usage. So there are other countries like Australia and some countries in South Asia which are looking forward for this product as well. Sir, for this molecule, I believe you bought only the Latin business or Brazil business. Bayer might be selling this product in other geographies. Can you compete with them on this? In Brazil, we have exclusive rights. And in other countries, currently, we do not know Bayer's position. Okay. And next year, sir, how much could be the top-line contribution from these molecules, these two? Top-line contribution? Top-line contribution from these two products in FY 27, when the full revenue will come on the books of Dhanuka, will be in the range of INR 175 crore to INR 200 crore. No. In 26, I was asking. In 2026 because the business will be in transition country by country. So once we appoint the distributor in each country, the revenue will start. Till that time, it will be in the form of royalty. It will not come in as a revenue on the books. Could you share the tentative royalty number? How much could it be? You see, it depends when things are transferred in the name of Dhanuka. So basically, this number, sharing of this number is a little difficult. Revenue versus royalty split sharing is difficult. Okay, and once we start to book revenue, we will not receive any royalty after that? Yes. Absolutely. Okay. And for these molecules, what will drive the 10%-15% CAGR that you are expecting? One is for Iprovalicarb. There are new registrations for a new combination, which some of them are coming in 2025 and 2026. So that is one. Second is renewing the marketing efforts. So that will revive the volume. For Triadimenol also, there is a new registration, maybe four or five-year-old in Brazil itself, which is already growing at a good pace. And we intend to continue increasing that growth in the second formulation. Right. Okay. That's it from my side. Thank you. Thank you. The next question is from the line of Ramesh Sankaranarayanan from Nirmal Bang Equities. Please go ahead. Thanks for the follow-up. So what is the sense you get on the channel inventory for your own company and the industry as of now? And secondly, is there any structural change you expect in terms of the Indian crop because of the budget focus on cotton, the pulses, and oil seeds? How do you see that shaping up in the next two, three years? Right. So as a matter of practice, at Dhanuka, we continue to clean channel inventory as and when it piles up, and we also do not front-load our channel. December has not been a very good consumption month, so we kind of picked up whatever was unsold inventory, and we believe for Dhanuka, there is hardly any channel inventory out there. But we do believe that industry normally conventionally front-loads the channel, so there should be quarter-ending channel inventory for most of the industry players, so that's part one. Part two is crop shift. Government's focus on pulses has been deep-rooted, and pulses is costing us some forex. Pulses import has doubled to manage the inflation, so that is one area which is certainly going to dominate the acreage increase of toor, chana, yellow peas, and all. So this increase in pulse area, which will be nutrition management and protein management for the nation, gives a flip to Dhanuka as we have one of the best portfolios to service pulses, both in terms of weed management as well as insect management. We have a wide portfolio with label claims on most pulses. Cotton, government is bringing in renewed attention to manage cotton loss caused by Pink Bollworm. Cotton once revived, and most states, Punjab, Haryana, Rajasthan, all the western states, central and southern states, except for some eastern states, bank upon cotton for their agriculture revenue. So that will bring renewed energy and attention of the farmer for investments in cotton. Our products like Targa Super, Mycore Super, various other insecticides, fungicides will find a lot of opportunity in cotton. So these attentions, these focus will certainly bring a flip to our portfolio for sure. Thank you very much. I just want to add one thing here that the government did not talk much about ethanol, yet the ethanol price correction from molasses was done just a few days before the budget. This will give a boost to sugarcane economy, where again, Dhanuka is really strongly positioned to leverage that opportunity. Thank you very much, sir. Thank you. Wish you all the best. Thanks. Thank you. A reminder to all participants that you may press star and one to ask a question. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. The next question is from the line of Riju from Antique Stock Broking. Please go ahead. Hi sir. So during Q3, if you could break it up, how was the domestic formulation business growth and the export formulation business growth? For Q3 as well as for nine months for 25. You see, entire growth largely from domestic export. There is no significant growth. Understood. Understood. And sir, a few bookkeeping questions. This quarter, we have seen roughly 100% kind of rise in the interest costs. So what has actually driven this kind of increase in the interest cost? You see, normally, we are not using our limits for the last so many years. But there was some limit utilization at the time of buyback that was happened sometime in September. So because of this, some limit utilization in the month of October, and there was zero in the month of November. And there is a provision we have for this acquisition. We have taken a loan of INR 15 crore in the month of December for Bayer acquisition. And the rest, under INR 15 crore, is basically met with the internal accruals. Because of which, the interest cost has increased, but the base is very nominal. Therefore, it appears to be significant. Otherwise, again, the percentage is very low as of now. Understood. So sir, you have said that you have raised some borrowings to fund the acquisition. So if you could quantify that number broadly? It's INR 50 Cr. Okay. INR 50 crore. And this will be repaid by when? Maybe by next year or next to next year? Before December 25. Okay. Understood. Understood. So this is short-term borrowings. Okay. And another question that I had was you said that you will get royalty in 2026. And if you could give us a sense of how much percentage royalty you will get on a total revenue. So I will not ask about the number, but the percentage that you will get from the revenue. That clarity is about to come from Bayer. Probably will be better off by the end of February. Okay. Okay. Understood, sir. Yeah. Thank you. That's all from my side. The next question is from the line of Prashant Biyani from Elara Securities. Please go ahead. Bharat Ji, I had a question for you. This was regarding sugarcane only. So we heard of Red Rot disease cropping up in UP from the eastern side, and then now it has spread to central and western, and what we hear from the company is that once a crop is invested, once sugarcane is invested with Red Rot, then you have to burn the crop. There's no other option. So I just wanted to check whether, as an industry, do we have any solution? And if yes, why either Dhanuka or the industry has not been able to capitalize on it? Because the sugarcane variety, which is getting infected with Red Rot, is a very good or the best variety that was there available right now in terms of yield. Right. So thanks for that question. That gives me an opportunity to highlight the portfolio that we have. But let me try and address the second part first, which is why we have not been able to capitalize. So that's not really true. Industry has really worked hard to deal with the Red Rot opportunity or, let's say, Red Rot crisis that the North Indian sugarcane faces. This brings to forefront the challenge of working in agriculture, which is the education of the farmer. How do you educate the farmer for a crisis which is looming large? Now, as we talk on this call, this crisis has been on the horizon since 2019 because the variety 60238, which is the highest yielding variety, now any variety at any given point of time should not cross 25% of the total acreages because if and when a disease strikes, then it will become a pandemic for the entire variety. Now, this variety, as you said, is the most high-yielding variety. It has the highest sugar content. So this is covering more than 75% of the total sugarcane acreage in North India, which also makes us almost disaster-prone in our sugarcane production. The challenge is farmer education. The challenge is seed quality upgradation. The challenge is corrective work to be done in an integrated way by the Department of Agriculture, KVKs, universities, farmer bodies, and the industry together. At Dhanuka, we are offering biological solution as well as our product, Godiva Super. We are exploring one more Japanese product with seed treatment trials, how it is performing, so there are various options we are putting on the table for the farmer and educating the farmer. Yet, to your point, the crisis is pretty imminent and out there. So I mean, I thought that because sugar companies are also involved, so at least on the sugarcane side, there won't be any problem regarding the imparting of knowledge to farmers because it might come from the sugar companies itself who are there in the hinterland. Is that not the case? Your question is not clear to me. Educating through the sugarcane companies is what we do. No. I was asking that. I mean, you told that, I mean, the flow of knowledge to the farmers might not have happened properly, if I understood you correctly. That's right. But sugarcane farmers and sugar mills work in very close association with each other. And generally, sugar mills advise them which seed to use or which crop protection products to use, which fertilizer to use. So I thought, at least in that industry, the use of crop protection or right crop protection products to use is not a problem. Is that not the case? The evidence in front of us puts it differently. It's a chicken-and-egg situation because this is the most high-yielding variety. The next variety, the yields are 25%-30% lower than what this variety provides. There are certain sugar mills which are really managing it well and are able to generate good sugar yield and are able to educate the farmer on disease management better than the others. Yet, there are sugar mills, there are farmers, and vast acreages which are not well managed against Red Rot. Okay. Sir, last question on maize. Government has opened FCI rice as alternative route. I mean, and that too at a very attractive price, which has reduced the price of maize also, I think, in mandis. So would you expect that in the upcoming seasons or even in the Rabi harvest, maize farmers' income may be under threat, and hence the investment in crop protection in future may reduce? We are looking at maize acreages to go up because of its sturdy nature, consumption in animal feed, and other opportunities, including ethanol and starch extraction, so maize acreages are certainly going up. As of now, the economics have not become unfavorable. However, if the commodity prices and the economics become unfavorable at a certain point of time, then yes, the agri-input investments do get impacted. The current high temperatures that we are witnessing in North India is impacting wheat yields. Wheat crop yields are getting impacted. This impact on commodity and wheat production can actually move the maize prices in another direction, which means maize prices can actually go up again, driven by the market opportunity of cross-balancing the nutrition of the carbohydrate required from source by wheat versus carbohydrate source by maize, so there's actually an opportunity of maize prices going up. Acreages will certainly remain stable or go up marginally. Right. Okay, sir. Thank you. That's from my side. Thank you. Thank you. Are there any further questions from the participants? I now hand the conference over to the management for their closing comments. Thank you. Once again, I would like to thank all the investors and analysts for your support and confidence in Dhanuka. With the transition in management, we have embarked on our next era of growth and business success. I reassure our stakeholders that we are committed to the task of transforming the landscape of agriculture and farmers in India. India Ka Pranam Har Kisan Ke Naam. Thank you and goodbye until next time. Thank you.