Ladies and gentlemen, good day, and welcome to the Best Agrolife Limited Q2 FY 2024 earnings conference call. As a reminder, all participant lines will be in the listen 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 star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Advait from Ernst & Young. Thank you, and over to you, sir. Thank you, Seema, and good evening, everyone. Welcome to Best Agrolife Q2 and H1 FY 2024 earnings conference call. Please note that a copy of our disclosure is available on the investor section of our website, as well as on the stock exchanges. Please do note that anything said on this call which reflects our outlook towards the future or which could be construed as a forward-looking statement, must be reviewed in conjunction with the risk that the company faces. This conference call is being recorded, and the transcript, along with the audio of the same, will be made available on the website of the company and exchanges. Please also note that the audio of the conference call is the copyright material of Best Agrolife and cannot be copied, rebroadcast, or attributed in press or media without specific and written consent of the company. Today, from the management side, we have with us Mr. Vimal Kumar, Managing Director, Mr. Sanjeev Kharbanda, Chief Financial Officer, and Mr. N. Surendra Sai, Head, Strategy and Overseas Business. I would now like to hand over the call to Mr. Vimal Kumar for his opening remarks. Thank you, and over to you, sir. Yeah. Thank you. Good evening, and welcome, everyone, to our Q2 and H1 FY 2024 earnings call. I'm pleased to share that Best Agrolife had yet another impressive quarter, with revenue from operations INR 811 crore. This represents a solid sequential growth of 32% and year-on-year increasing, increase of 16%. However, before we deep dive into the quarterly business performance, let us take a closer look at the broader industry landscape and how it has panned out for us. The global economy continued to remain uncertain: low consumer demand, high inflation, and geopolitical challenges. On the industry front, the global agrochemical industry innovating through a rather challenging environment on the back of higher channel inventory, resulting in sustained pricing pressure. On the domestic front, the situation is slightly better, but challenges persist. The monsoon deficit has created its own challenges for the domestic industry. According to IMD, India witnessed its lowest rainfall since 2018 this year, with August being the driest month of the century. While excessive rainfall within a limited timeframe lead to flooding in specific regions of India, negatively impacting on the cultivation of certain crops, conversely, a notable deficiency in rainfall in certain areas has had adverse effects on the sowing activities. This erratic distribution of rainfall impacted the demand for agrochemical product to a great extent in the domestic market. Moving on the business performance, I'm delighted to share that Best Agrolife has performed well this quarter, with 32% sequential and 16% year-on-year growth. The revenue from operations stood at INR 811 crore. This growth was on the account of strong demand for different products such as Ronfen Ultra, Tricolor, PropiQ, Amito, among others. Our product basket give us an edge in the Indian market, given our potential products along with other combination products, have delivered better results for the, to the farmer, resulting in stronger demand for each of them. Recently, Best Agrolife entered into agreement with Syngenta for making prosulfuron 25% WG, a herbicide branded as Movento. This agreement will help improve the value of new herbicide that has a market of over INR 450 crore, while also achieving considerable revenue from this product solely. Please note that towards the end of quarter two, we already launched prosulfuron, branded as Azaro, in Best Agrolife, and have received great traction for the market. We believe the product will help us deliver good growth and margin in H2 FY 2024. Last year. Last but not the least, we have also launched our patented product, Tricolor, in various regions in July 2023. This is the product, Tricolor, after Ronfen, and is our second patented molecule, which we have launched. Till now, we have launched only Ronfen last year, and now we can say this two product which is patented. We have launched total two products only. Tricolor is a unique combination for the crop diseases such as powdery mildew, scab, and alternaria. The strategic combination of the three active ingredients in which Trifloxystrobin, which is very unique, and again, Azoxystrobin and the sulfur, which sulfur is, you know, as a catalyst we use in this combination. This ensures, you know, the benefits to crops like rice, tomatoes, grapes, chili, wheat, mango, and apples on the scab. We are hoping that this product will be another compound for us in the next two years. To summarize, we have launched a couple of major products this year with a pipeline of a few more in H2 and FY 2025, which will aid in driving the growth. This increases the overall revenue visibility for FY 2024 as well as FY 2025. Before I hand over the call to our CFO, Mr. Sanjeev Kharbanda, who will provide you with more updates on the business and financials for the quarter, I would like to highlight that even though the industry is expecting some headwinds in the coming quarter, I believe we will be protected to a great extent, driven by our differentiated portfolio. This gives me a confidence of sticking to our guidance to close to 25%-30% growth with 20% EBITDA margin for FY 2024. With this, I would like to hand over the call to our CFO, Mr. Sanjeev Kharbanda, to provide you with the business and financial updates. Thank you. Thank you very much. Thank you, [inaudible], and good evening, everyone. Thank you for joining us here today. Before I take you to the financial numbers directly for the quarter and first half, let me take this opportunity to provide you with some important business updates, which are more in strategic nature and which are going to help the organization maintaining this growth trajectory. I'm proud to share that we have achieved a groundbreaking innovation with our subsidiary, Seedling India Private Limited, receiving a 20-year patent for revolutionary invention of a synergistic pesticidal composition. This includes two insecticide and a fungicide to address some of the most pressing challenges in rice cultivation. We have also secured a key 20-year patent for revolutionary herbicidal composition to boost rice crop yields. This is one-shot herbicide, which we plan to launch in next Kharif season under brand name Orisulam, which will further strengthen our herbicidal portfolio. So it is really critical, and it is pertinent to mention, with this kind of innovative products, we are not only de-risking ourselves from, you know, only selective, Kharif season product, we are also coming up with more and more solutions and, you know, products which are used for the wider horizon of the crop, which will help organization taking this growth trajectory further, and will also help the farmers for increasing their yields. Now, if you see, we have two very strong products for rice crop, which will act as one short solution for most of the problems farmers cultivating rice have on days. Moving on, in our efforts to fortify our footprint in southern India, we have recently inaugurated our regional office in Hyderabad, which will help us as a strategical vital, vital move to have our commanding presence in this region. With this development, now we proudly say, you know, we are by and large a pan-India organization. We have a presence pan-India with only fewer states which are left, where we are still working to have our footprint, which is largely in east and northeast sectors, northeast region. Further, to give you an update on another strategic move, recently, we have acquired 99% stake in a partnership firm, Kashmir Chemicals. It's a partnership firm based at Jammu, and this firm is engaged in manufacturing of formulation. This strategic move aims at expanding its manufacturing capacity. It will help us expanding our manufacturing capacity in response to the growing markets and demand for our branded agrochemical formulation products. So this will further help us to ensure that as our product acceptance has been really good, the market demands are increasing, so we have, at the back end, adequate production capacity to serve the markets. Now, I'll move to the key performance highlights of the financial numbers for the quarter ended 30th September and the first half, ending 30th September 2023. Just to reiterate, as Vimal has already mentioned, revenue from operations for the quarter two stood at INR 811 crore, as compared to INR 612 crore in quarter one of the FY 2024, and INR 700 crore in quarter two of FY 2023, same period. So virtually, we can say, you know, it's a quarter-on-quarter 32% growth, with a 16% year-on-year growth. This, you know, the time when most of the companies in agrochemical sector are facing challenges, at that in that situation, our company is able to maintain the growth trajectory in a consistent manner. So another quarter with a good growth number, we are happy to share with you. Even though we did not see much impact of pricing pressure on our products, but for sure, you can understand, there is a pricing pressure as well as there is a inventory challenge, challenges in the market. There is oversupply, so that is somewhere impacting the overall sector. EBITDA for the quarter was INR 144 crore, as compared to INR 130 crore in Q1, and INR 183 crore in Q2 FY 2023. EBITDA margin for the quarter stood at 18%. Tax for the quarter is INR 94.5 crore. In terms of percentage margin, it is 10% to the NSR. Coming to the first half results, YTD September, H1 top line stood at INR 1,423 crore, as compared to INR 1,154 crore in H1 last year, which is a growth of 22%. With the kinds of products we are coming up, the expansion we are doing in market, and the numbers which substantiate what we say, we are quite confident we will be able to maintain our guidance, which we have said in a range of 25%-30% growth over last year, we'll be able to do that. EBITDA for H1 came INR 274 crore as compared to INR 248 crore in H1 FY 2023. Tax for H1 stood at INR 185 crore, which is up by 9%. Of course, it is up in absolute terms also, and EBITDA margin for first half came at 13%. In terms of balance sheets, we do understand as an organization, since we are a growing organization, we realize, you know, there is also, you know, concerns of the market and investors that, you know, the pressure on working capital is increasing. But reality is when you expand multiple fronts in multiple directions, one is, you know, expanding with new products, then it's also expanding the footprint in the market. You can understand there is a need of having inventory at each channel level, at CF and distributor level, with all the SPUs required by the consumer and consumers. So therefore, this pressure, which right now is high, we assure that this is a temporary phase. In the growth phase, it happens, and the organization is quite focused on bringing down the overall cash conversion cycles by almost 20-25 days in next two quarters. The other thing, other strategic initiatives and updates organization has taken, which is important for us to keep you updated. Organization has taken step towards migration to SAP S/4HANA, which is best ERP across industry. Rather, I would say the, you know, across the world, 500 Fortune companies are using this ERP. So we are working to migrate ourselves on SAP S/4HANA environment, effective for April. And since the implementation phase is going on as we speak, by January, middle of January or early February, we are, you know, making ourselves ready for a soft launch so that we can have nearly two- and-a-half months parallel run. And by the time we enter into the new financial year, April 1, 2024, we would be 100% migrated on the SAP S/4HANA. And this is also a step, which is also linked to the business performance and the various, you know, performance parameters of the operation. This will also help us in optimization of the resources, be it inventory planning, sales planning, production planning. This will be a major step, you know, to drive the efficiency in the overall system. With that, now invite our Head International Business and Strategy, Mr. Surendra Sai, to give some updates on international business, what steps company is taking. Thank you very much. Thank you, Mr. Kharbanda. Good evening, everyone, and thank you for joining us today. I'm pleased to share some insights into our international business expansion, our plan, and I'll do that just before we engage in the Q&A session. Right now at Best Agrolife, we are poised to broaden our horizon and venture into the international market. These are early days, but we are looking at the special focus of our portfolio of specialty products and patented products. These have been instrumental in our success, and we hope to replicate this success abroad. As the steps to be able to do that, we are in the process of finalizing and identifying the countries, regions, where our products can be, have a value and margin in this area. Our initial priority is in Southeast Asia, that given its climatic conditions, crops and the pests, which closely mirror those in India. We are actively exploring the opportunities in Thailand, Malaysia, Vietnam, Cambodia, Philippines and Indonesia. In addition to our Southeast Asia expansion, we are looking also at South America, Africa and the Middle East. These will happen in the subsequent phases of our international growth strategy. In each of these target geographies, we are working to initiate the product registration process. Simultaneously, we are also actively working on creating an international and overseas business model, which will involve setting up of different companies and holding companies and subsidiaries. And I'm pleased to report that, our progress in this regard is on track. As far as our revenue vision from our exports over the coming years, obviously these are early times. Registration process normally takes 1-3 years. Just some estimates, these are just forward-looking statements. In the initial phases, spanning over the next 1-3 years, we anticipate lower revenue of approximately $1 million per year. But as we have our establishment set up, and we establish our presence and operation in the international market, and then make sure we foresee a substantial growth trajectory in the subsequent 2-5 years. During this period, we project the revenue to be in the range of $10 million-$30 million per year. These strategic moves into our international markets underscores our commitment to driving substantial and continuing growth in, by leveraging our expertise in the agrochemical products. We are excited about the vast opportunities these markets offer, and we are confident in our ability to make a significant impact. ... with that, I would like to open the floor for questions and further discussion. Over to you. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. Thank you. We take the first question from the line of Giriraj Daga from the Visaria Family Trust. Please go ahead, sir. Yeah. Hello, Tim. First, just some data points first, like, we provide what are the product-wise revenue, like, how much was Ronfen in Quarter Two, how much was Tricolor, how much was CTPR in Quarter Two revenue? Yeah. In fact, segment-wise, we can tell you product specific is little difficult to tell you, because you are asking just a specific product. But of course, segment-wise, we can tell you, like, fungicide, how much it is, and herbicide, how much it is, and insecticide, how much it is. So which product you are asking, so I can tell you the category-wise. Ronfen, you are asking is insecticide. The total, insecticide, you can say in the second quarter out of INR 811 crore, it is approximate, insecticide portfolio will be around INR 400 crore. INR 400 crore. Okay. But you, like, last quarter, you used to give the product-wise number. You said last quarter, it is INR 71.70 crore in Quarter One in Rabi time. Yeah, of course. So- We don't have product-wide number in front of us. That we have to check it. Okay. Second, my question is on the working capital side. So I understand that we are a growing company, and we need working capital. But even because our debtors, like, we did a revenue of INR 811 crore, and our receivable is, like, INR 1,012 crore. So, like, the entire quarter's sales is still on credit, and like, it's more than three months credit given to the district, dealer, distributor. That's not the case. The credit policy of Best Agrolife is also aligned with the other players in the market. If you look at UPL, which is almost like, you know, leader in this industry, even UPL DSO on thirtieth September is 135 days. So somehow, you know, due to the climatic condition and that weather, weather has also impacted the secondary movement. So when secondary movement gets slow in the markets, the end of the day, you know, the chain should get completed. Farmers should also pay to the retailer, and retailers should pay to, to the distributor. So of course, we are not trying to defend that, you know, the receivable is healthy. No, receivable, we are also concerned, and we are chasing to reduce it. But at the same time, ground reality at the market is, there is little slowness in the entire chain, therefore, the receivable is slightly higher, but it will be well addressed very soon. Okay. My next question is the margin. When I look at gross margin, like, we have declined sharply. So we are in an environment where actually the raw material cost or prices has gone down. And while we are being branded player, branded, so we- we're thinking that at least we'll have some pricing power there. But you are mentioning the pricing decline is severe and we are lost gross margin there. A little drop in the gross margin is also. You need to appreciate there is a product mix. It is not just the value. For example, some of the products, our volume delivery is higher than the overall sales growth we are talking about. So the product mix has actually made certain impact on little bit drop on when we compare last year or when we compare, you know, quarter to quarter. But in overall range, the EBITDA margin is maintained at 18% for the quarter and 19% at YTD level. So we have always committed for a 20% range of EBITDA margin, therefore, you know, we are quite on track. So the product mix makes little, you know, play on it. Last thing from my side, CapEx, you mentioned INR 200 crore for the full year, so we did about INR 30 crore in the first half. Are you still on track for the INR 200 crore CapEx for the full year? Yeah, CapEx, it was little slow in Quarter One, and now the CapEx is on a, you know, on a higher speed side. In next two quarters, we are very much aggressively driving our soybean project, soybean chemistry project, and the other CapEx. So we have made a announcement of INR 200 crore CapEx, which is an approximate number. I think by end of the year, around INR 130 crore CapEx would have been spent. Okay. Thank you for my side. Thank you, sir. We take the next question from the line of Sandeep Raj from Oculus Capital Growth Fund. Please go ahead, sir. Hi, am I audible? Yes, you are. Hello. Hi. Hi, good evening. My question is regarding our progress on NSE listing. Any update on that and any timeline that you can provide? The NSE listing, documentation part has already been completed by the company. So there were few, you know, back and forth queries as part of the due diligence which NSE does, which is normal for every client. So those back and forth queries have also been submitted, and, you know, we are expecting, you know, another few weeks, maybe, you know, there will be a response from the NSE. ... Okay, understood. And, regarding the CapEx, the INR 200 crore CapEx, if you can give us a breakdown, like how much should be for backward integration and how much will be for, you know, capacity expansion, and in, which, you know, which, segment the capacity is being added, insecticide or fungicide? Some of the details regarding CapEx. Yeah. Yeah, yeah, Mr. Sandeep. Mostly CapEx, it will go mostly go in the Strobilurin project, and Strobilurin project covers the backward integration. Right now, also we are producing, you know, producing some of product of Strobilurin, Azoxystrobin, Pyroxystrobin, Picoxystrobin, and other products. But in the coming, you know, for this CapEx, we will go backward integration. It will go like, you know, purely made in India, which no chemical will be imported in that particular segment. So in that way, we are working for the CapEx. So mostly you can say it will go in the CapEx in the backward integration. Okay, mostly the backward integration. So like of INR 200 crore, how much could we say would go into backward, INR 150 crores? Most, yeah, INR 150 crore, you can say, it will go in the backward integration. Other will be like we have just take over one company that is formulation only, Kashmir Chemicals. Okay. Other will be like this, and some of it can change the formulation and in the R&D. Okay, okay. So capacity addition in formulation and INR 150 crore for backward integration. Exactly. Okay, okay. Perfect. That's it from my side. Thank you, sir. Thank you. Thank you. We take the next question from the line of Darshit Shah from Nirvana Capital. Please go ahead, sir. Yeah, hi, sir. Thank you for the opportunity. So can you let me know how much sales you made for CTPR this quarter? CTPI? Mm-hmm. I tell you, you know, because specific tell, you know, product to product, that is, hard to know because I don't we don't have data product to product right now. But segment-wise, I tell you, CTPR also come under the insecticides only, and the same Ronfen. Ronfen and the CTPR include all of that in quarter two, that is a INR 400 crore number of, the total Sure. And so, any specific reason we stopped giving product-wise details? Until last quarter we were giving, so your thoughts on that? That is purely confidential, because product-wise sell is, not, you know, that is not right. It sell each product and each formulation which we are selling is a little bit confidential. Sure. Can you, on the balance sheet side, so you know, later you have rightly explained. So, the trade payables have also gone up far from around INR 300 crore to INR 89 crore. So can you explain that part, please? You know that first two quarters are the, you know, most important quarters in our industry. So we had very aggressive plans for driving the growth. Of course, we have delivered our projection growth also, was slightly bigger, so we were spending upfront. And since we are every quarter, we are introducing new products, so you can understand the requirement of general inventory is important. Therefore, you know, the, the, these are interlinked. So when these kind of inventories require, your purchases also goes up, and as a result, your payables are also higher. And then it is interconnected with the cycle of the cash. So we have, you know, this is very much within the terms we have agreed and negotiated with our suppliers. Since it is interconnected with the overall cash conversion cycle, when receivables are little slow, so the trade payables will also, at the same time, will be corresponding numbers, unless we, you know, pump in additional money and we settle it. So it's part of the overall working capital cycle only. Sure. And so, like, earlier, we were alluding to the fact that, you know, we are working hard on cash flow management in the end of FY 2024, you could see some sort of impact. So, given that we have this kind of metrics, do you think that this collection will be normalized over next Q3 and Q4, and by the end of March, in the balance sheet and cash will be better than what we have right now? Yes, we are confident when we produce the balance sheet for the full year, these numbers will be, will improve a lot. So, as I said, we are targeting to reduce our overall cash conversion cycle by 20 days. So when I say reducing by 20 days, that's all the three sides. It will reduce the receivable, it will also reduce the inventory level. So therefore, when you have better cash flow, your payables side will also come down. We'll be able to cut down the payables. So another two quarters, we are hopeful, because steps are being taken in that direction. Sure, sir. Thank you. Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, you may press star and one. Ladies and gentlemen, if you wish to ask a question, you may press star and one on your touchtone telephone. We take the next question from the line of Sagar Shah from Pragati Sarika. Please go ahead, sir. Sure. Good evening, gentlemen. Thank you so much for the opportunity. I wanted to ask- ... Hello, Mr. Shah? Yes, sir. Yes, sir, please go ahead with your question. Yeah, sure. My first question, sir, was regarding to I wanted to know what is our actually inventory strategy? Means, how do you plan your inventory situation and in the company? Because in the last quarter, you had, you had said that, due to the new product introduction, you had, ordered your raw materials and your, you had made all the products in bulk, actually, in anticipation of demand. So accordingly, what is the strategy right now? Because still your receivables days, your receivables are quite high as compared to the industry now. As you said, that it will come down, we understand that. But I we wanted to know what exactly is your strategy, actually. Why are your receivables constantly going up, so as compared to even the industry actually? The industry also hasn't seen so much of hike in the receivables cycle. So what is your strategy exactly right now, and how do you say that it will, your inventory days will come down by 20-25 days? So what actually helps you to say that? What exactly are you doing to actually reduce your cycle? Because accordingly, your working capital situation will also become more favorable. So can you please elaborate on that first, please? Yes, Mr. Shah. Thank you, thank you for the question. Yeah, exactly, the same question actually, what they asked, but anyway, in my commentary also, I said, you know, there are many challenges which are actually in the, you know, whatever the, you know, geopolitical challenges. I told you, high inflation, there are price growth. So you can see, you know, other companies there in the industry also. I would not say the name, but you can see all of the, you know, results in front of you. If you see, as all, all over, you know, we, we see, you know, we are in a better position for any of our industry colleagues. Our better position because of this only, because we have planned, of course, in a very high ambition, we have planned for the 30%-40% growth in spite of prices reducing, in spite of different challenges, still we are able to deliver this much of. And the delivery only know the—only we are aggressive, that is not meaning we have, you know, on the time delivery, on the time stocks, on the time, you know, our policies. All you put together, then only this growth is possible. Being a not very old company in agrochemicals, still we are, you know, able to deliver this kind of number. More, you know, you can see our patented molecule, whatever our patented molecule, of course, we have to plan earlier, like 3-4 months, we have to keep the inventory, we have to plan all over India, we have to distribute, we have to plan backward integration. So however, we will go backward integration, because you see, somebody has pointed out for the our gross margin also and our working expenses also. If you see, our expenses are very high this year, I mean, you know, we have spent for our, you know, upcoming product. Like if we are Orisulam, you know, Mr. Kharbanda said, you know, we are Orisulam we are launching next year. One product of item, which is a seed treatment molecule, that is again, our patented molecule. To prepare versions of these products, of course, we are going for some kind of a backward integration. We have to keep the stock, because it's an initial product. Till now, we have only, you know, launched 2 products in 2 years, which is our patented molecule. We have in pipeline more than 26 products, and you know, each year it is increasing. The 26 products, and once you come with any new product, you have to prepare a lot for that particular product. And, you know, if there are 3 products, so all the backward you have to plan, all, you know, you have to spend a lot of money in the field. Either, you know, we have time, but we have to show to the farmer what really they are getting. We are not selling product, we are selling solution. So when you are selling, selling any solution to the farmer, which is, you know, one stop solution, we always say, for you know, three crops, they are, they are, you know, directly. So it is very, very beneficial to farmer, but definitely right now it is, little bit pain for us as a, as a financial because we are not in, that, you know, cash flow is not improving. But I'm sure in the, in the, you know, next third quarter and, you know, fourth quarter, year-end, FY 2024, you will see very positive things. You will see, very, you know, this will I, I, I hope, you know, it will the cash flow improve a lot and, our mostly because, you know, some of the product like Tricolor, it is going in the fourth quarter also. In third quarter also, sale is very good. If you compare to last year, third quarter and fourth quarter, this year will be really will be better, which I can expect as of now. So there are many things which we can say. There's not only one way, one strategy or one planning which we are giving and doing, and this is not only that thing, there is a multi thing. So we can say, you know, this inventory is also high and you can see it is also high. But I'm sure in next two quarters, it will drastically and in FY 2024, the year results, it will be really, really in a very good, I can say. Yeah. Okay. Okay, that's great, sir, to hear that. Now, my next question, sir, was regarding to your products, actually. First of all, I wanted to understand in your entire product portfolio, what is the... If you can, if you have the answer to this, it's related, first of all, what is the top 10 products concentration out of your total turnover? And secondly, in the product cycle life, if you are expecting around 25%-30% growth year-over-year actually, as compared to FY 2023 and the entire FY 2024, so we need to have a very strong H2 also as compared to the H1. So to support H2 growth, just, you just said that Tricolor will support, and along with Tricolor, can you state some products actually which can help you in the coming Rabi season, which can actually help us generate revenue growth? That is my second question, sir, related to products. Yeah, definitely. We have mentioned in our commentary the product of prosulfuron, which is really very good product for the wheat weedicide herbicide, which we have given to MNC company like Syngenta, and also we are giving to some other company, companies also, and as well as we are bringing our own brand. And our brand is also getting strong. Our B2C is also getting very strong with these products, because these products is very, very you know, different product. We are actually, you can say, really R&D-based company. And if you talk about top ten molecule, as of now, this year, top ten molecule are different. Next, it will be little bit different. Cannot change all the molecule because our top molecule always will be our patented molecule, either it will be exclusive molecule. Earlier we were doing, you know, some of the generics. Slowly, slowly, year on year, we are, you know, leaving each, each of, the generic product, and we are upcoming with a specialty molecule, as well as the patented molecule. The patented molecule, this is second one, I again repeated. Tricolor is second one, so next year it will be number four. So, you know, Orisulam will be there, Titan will be there. So in last year it was one product, this year it was second product. Next year it will be four product. And each product have its own potential, and we want to be in the top 10, which is your question. Top 10 will be our... All molecule will be our patented molecule, and each molecule have its own big potential. We are only launching patented. We have different, patent also. We have more patented product also, but we are going only where the farmer is getting benefit. We are launching that product, we are promoting that patented molecule only. And there, we are also getting, you know, good product, and where farmer is also getting, you know, good yield or either maybe some of the benefit to the farmer, because solution we can sell, the, say, the pesticide is a different thing, but always we are selling the solution to the farmer. So if you see in that way, all the top ten molecules will be our patented molecule in coming three years. That is our main idea. And slowly, slowly, we are inclined to the, our patented molecule only. Okay. Okay. Sure, sir, sure. So, on this, on the margin front, actually, before my last question goes, that, on the margin front, as compared to last year, the margins have dropped by almost 800 basis points, actually. So the primary reason is just the product mix, the falling margins, or is there something else, or is there some pressure in pricing, pressure in the market? Can you something like quantify that, what exactly percentage is due to pricing and what exactly percentage is due to the product mix? Because last year also, your product Ronfen actually had contributed to the large amount of sales. And this year, if I'm not wrong, Ronfen would have also contributed along with your other patented products, actually. So, even with a good product, even for better products, what exactly led to such a huge margin decline? I understand that you have a target of 20%. I completely understand, but this kind of volatility in margins, can you justify some reason actually? No, no, we cannot say there is a big volatility, because if you see, you know, according to... Because where our margins is very good in the patented molecule, the other side, if you see, there is not very good margin in the annual generic products. And this is our turnover of INR 811 crore. Of course, that is not all the patented molecules. If it is all patent, and our target in the coming year to ensure that, you know, our 60% or 70% sale will be all the patented molecule, but of course, it will take some time, and it will come over the years. But, you know, if you see this year even, I again mention, you know, that our, you know, upcoming product, Orisulam, and our seed treatment product, we are spending on the marketing, we are spending on their, you know, field trials. There are many, you know, field assistants, and we have increased lot of, you know, people in the field level. And there if you see, our operating expenses increased like anything. Because operating expenses in Q2 FY 2023, it was around INR 83 crore, but now if you see, this is around INR 123 crore. So it mean, you know, you can say 20, it is a INR 40 crore. One quarter, INR 40 crore, you know, our operating expenses are increased. This is including, you know, our R&D expenses, our, you know, field expenses, our upcoming product expenses. If you put, you know, this INR 40 crore we don't spend, how we will get the new, next year, you know, of our patented molecule? Because we always prepare our all the molecules before one or two year, give them field demo to the farmer, and, you know, we test the product. We always, you know, you know, the farmer is asking, like, I, I know that, you know, people are asking, "You should give, you know, this year, this product only." That much of, effectiveness of that product. So we have to prove them one year or two year before, this product is very good at this upcoming, in coming years. So on that, you know, INR 40 crore we have spent. If you put- if we are not spending that INR 40 crore, of course, it will come into the margin. That will improve. Now, now if we are talking about 18% EBITDA, of course, it will improve to maybe 22%. So now, of course, we are spending that way in our expense, three to four percent, whatever the extra expense, it will give us very good leverage in our upcoming, you know, years, in, you can say FY 2025, FY 2026. It will be very, very... You know, it's a base work which we are doing. ... Okay, okay. Sure, sir. sir. Mm, okay, okay. Sure, sir. So basically, just last one from my side, that means to connect with the farmers, as you rightly said, you are actually solving these products that you're launching. If you, if we talk of Tricolor, the recent patented molecule that that you bought for sulfoxibutyl, pyroxosulfone. So basically, how exactly are you connecting with the farmers? Means, what exactly are you doing? Are you, are you conducting some programs, some education programs for the farmers to at least educate them about your product? Actually, something like, are you? How are you marketing your products in the market basically? That is, you know, the last one from my side. Thank you for the question. I appreciate the question. As you see in the Indian agrochemical industry, the dealers actually end up playing a major part. And there is a lot of sales which actually end up, you know, getting going through the dealers and the distributors. But we do realize that it is the end customer or the farmer who needs to be aware of the benefits, as well as who needs to be aware of the advantages of using these patented products, which are safer, which have a higher efficacy, and at the end of the day, they provide a value to the farmer. Now, that is exactly what Mr. Vimal was saying, that there is an investment which needs to be done to be able to reach to the grassroots level. And that is where we are investing significantly in the field assistance. And these field assistants are actually ground level force people. So we have currently approximately 1,000 plus of these field assistants. Many of them have been very recently employed. These are very trained, and they have a very clear strategy of doing a farmer demo. They hold evening classes, they hold evening sessions, they hold night sessions, they hold meetings in the day. They take the farmers right to the field. They show them the effect of the demo applications. They sort of walk them through the sort of, I would say, the best and what can be done, what cannot be done. And they have, they have various things. They have something called, you know, even they have a teams which have something called as child researcher. So the point being that we are able to get these farmers to be onboarded, we are sort of educating them so that not just on our products, but to be educating them on the best practices in the field. When they sort of go to the dealer, they are able to ask for our product by name, and that is what is helping us drive the sales. That is what is helping us actually be able to drive a sales growth in even situations where, you know, the overall pesticide growth volumes are much lower. So product mix is definitely something, but the product mix and our patented molecule is a new product, which is not on the tips or the tongue tips of the farmer. So we need to get them to be able to do that, and, and that's, that's where the whole marketing team is in. We are right now at a very grassroots level in terms of a digital marketing, in terms of being able to reach to the farmers on a technical and a technological level. We are working on those strategies. At this particular point of time, the strategy in this particular quarter and half year has been more in terms of a field force and the marketing and the ground level work. But going forward, we will be going, reaching out to the farmers digitally and technically. Okay, okay, okay. Sure, sure. And, one more part. Oh, now go ahead. Actually, I mentioned to you INR 83 crore of, that is half year, which was operating expense in a half year, FY 2023, and INR 123 crore is a half year of this FY 2024. Because you are asking for the quarter, I mentioned quarter, but it is actually half year. So I'm correcting myself, INR 83 crore-INR 123 crore. It is a half year expense, which is INR 40 crore increase, this, in this half year. Okay. So that is the, that is why, basically your OpEx is high, but still your gross margins are actually have decreased. So that was my worry actually that, because in spite of such strong products in the market, what has actually led to, led to, decrease in the, gross margins, actually? That gross margin because of two reasons. One major reason I told you, because of the prices have reduced a lot, and global synergies for the whole, the companies, even the MNCs company, even the Indian companies, all are facing that, you know, margin problem. And of course, another thing, when the, when the, you know, price has drastically changed, drastically down, so definitely the revenue will hit, our gross margin will hit. Because suppose last year our sales was INR 100 crore of one of the product, and this year the price of that product is INR 80 crore. So our INR 100 crore margin and INR 80 crore margin, of course, will be different. You know, at INR 100 crore, maybe 20% is 20, INR 80 crore will be 60. So of course, the gross margin also reduced because of that product. Another reason of this Prathamesh, yeah. Yeah, the other reason is the product mix also, because with the new trials and new products which are coming up, the price stability takes time, market to market. So we have to play with the dealer, distributor, discounting strategy also for whenever we launch the new products. So the gross margin has, due to the fact of one is, as you mentioned, the pricing pressure, and pricing pressure has to be in the proximity of the market. Okay, okay. Sure, sir. Thank you so much for the opportunity, and all the best for the future. Thank you, sir. We take the next question from the line of Siddharth Gadekar from Equirus Securities. Please go ahead. ... Hello. Sir, am I, am I audible? Yeah. The first question is on the inventory losses. What kind of inventory losses we had because of the high cost inventory that we were carrying? So the inventory losses, we have not said that there is an inventory loss. Inventory, see, as per accounting charter, the NRV testing every quarter happens to follow the accounting guidelines. So net realizable value versus the cost of inventory. This pressure was there while signing the last year financial statement for every organization, so that was there with us also. However, as of now, there is no risk on the inventory. Okay, sir. And are we carrying any high-cost inventory on our books as of now, or everything has been written down to market value? Definitely. Definitely, it is in the market value. Yeah. Already the price has settled at a lower level, and all the price is current market price. Okay. Correct. And what would be our volume growth this quarter? If you want to give a split between pricing and volume, what would be our volume growth this quarter on a YOY basis? It will, yeah. Actually, volume growth is over more than 30%. If you talk about last year, which some new product we have launched this year, that is separate. But if you talk about the last year product, most of the product is 30%, as a volume growth. Okay, sir, thank you. Thank you very much, Mr. Siddharth. Thank you, sir. We take the next question from the line of Giriraj Daga from Visaria Family Trust. Please go ahead, sir. Hello, sir. Yeah. My first follow-up question there, you mentioned, somewhat, that the secondary offtake is still very slow, relatively slow, I'll say, not very slow. So let's say, like, by what time you'll be... We'll have to buy or return those, basically, it will come to us, and will come to the quarter three or probably quarter four, if, if there is any returns. Let me, you know, give more clarification on that. I think there is slight confusion. When I say secondary slowness and, you know, the cash, from cash conversion cycle point of view, slowness, because the climatic conditions are, you know, affecting it and the shortfall in rain also affecting it. However, your specific query, query on that stock return, we understand every quarter, in fact, month-on-month, when we prepare our financial statement, and more importantly, the every quarter when we prepare our financial statements, the necessary provisions based on the trend and based on the market insight reading, with the help of our field force, sales force, the provisioning is already done. The numbers which we have presented to you, these numbers already have been, you know, these numbers have accounted for that provision of the potential sales return, so there is no risk taking on that account to the organization. Okay. And if I just ask, like, what was the provision this quarter versus last quarter, second quarter, how much provision we did, and this quarter, how much provision we did? How much provision you are talking about? Increase in... You said we are already providing provision for it, risk. So I just want to understand that year-on-year, has that number been some different there or it's probably similar with the sales trend? So it is not different, it is not increasing. However, accounting is always on a most, you know, one take a conservative step so that you don't get negative surprises at least, or, you know, per se, don't get the surprises. So the provisioning is, when we do the provisioning, we, you know, take a review segment-wise, product-wise, and state-wise case number, where, you know, every product doesn't have the same trend of purchase stock return. So stock return happens in the industry, there is no doubt about it. For all the company, it happens, but the provisioning methodology is very detailed, so it is not that standard you take the total sales and X percentage, you take a provision. So it is state-wise, product-wise provisioning which is being made to the direct action of the auditor by showing them the trend also. Okay. Last thing on the export, you mentioned some number, like $1 million. Was it as $1 million in the 1 or 2 year, and then $10 million-$20 million in 5 year? That was the number you mentioned, export capability? Yes. So yeah, yeah. So in the next couple of years, or at least around by the next 3 years, we will be investing more in terms of getting registrations in different countries. And during these times, there will be smaller deals that we'll be making with, dealers and distributors, who will be... To whom we will do our product registration. And, and they are all already a portfolio of, registrations that we have. These, registrations, will yield a small revenue. Just being, just, you know, going forward and, you know, just calling it out in terms of, and, you know, this is a sort of a small foreign, exchange revenue that from an export business that we'll be getting for the next couple, you know, to 1 to 3 years. Post that, post that we expect to be able to start, you know, driving our export business. That number was $10-$20 million per year, right? If I heard the correct number. Yes, yes, yes. You are right. You are absolutely right. Okay, sure. Thank you. Thank you, sir. We take the next question from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity. Just one question. During the second quarter and first half of this year, what would have been the contribution from newly launched products over the last three years? Sorry, what is the question? Yeah. So, what has been the contribution of products which have been launched in the last three years, the new products which have been launched during the second quarter and first half? ... See, I would like to answer this in slightly different manner. We are keeping a track on formulation and technical, right? So the, all the new branded products fall in the category of formulation. So our formulation, contribution formulation, segment contribution is increasing. It was couple of years back, less than 50%, then we got 55, 60%, and now it is more than 70% contribution by the branded product. Right. So just probably as an industry practice, even our peers usually share the innovation turnover index, wherein they usually tell us what has been the contribution from the products which have been launched in the last three to five years. I think if we are able to share it probably from next time onwards, it will be a good practice to understand how things are moving from the new product launches perspective. Just a suggestion. Thank you so much, and best of luck, sir. Fair point. We will definitely, you know, provide that information way forward. Thank you so much, sir, and best of luck. Thank you very much. Thank you. The next question is from the line of Sandeep Raj from Oculus Capital Growth Fund. Please go ahead, sir. Hi, sir. Thanks for the follow-up. I want to ask how much EBITDA contribution can we expect from the CapEx that we are doing? The CapEx actually is, Revenue. Yeah, it will give revenue, and revenue will keep on helping us driving this range of 20% or 20%+ EBITDA. Moreover, the CapEx is done with a long-term perspective. The return out of CapEx or the return on CapEx takes time. So what we can say is, after doing the backward integration, once the backward integration gets stabilized, it will definitely help us improving EBITDA margins from there also. Okay, any range that you can give, how much would it hurt us? Definitely, definitely it will go higher than 3%-5% more, because it is one of the probably factors. Yeah, yeah. 3-5. Okay, and, sir, can you give me higher level breakup of inventories? You know, some numbers around any product specific or molecules. Most of the inventory actually belongs to the intermediates and other raw materials, which are, you know, procured and which are planned way procured for producing the branded products. Since we are growing in that segment, so inventory also belongs to that segment. Majority of inventory belongs to that segment only. These are technicals, and these are intermediates for manufacturing those blended products and the formulation products. Okay, okay. Understood. And so if the new products, you know, will be launched in the next year, then why are we keeping high inventories right now when working capital is already stretched? Sorry, say again? The new product that will be launched next year, correct? If I'm not wrong. So why are we keeping inventories for that? Do we have any inventories for that product as well right now? See, not exactly for the new product yet to come, which is not that directly connected to that inventory, but there are certain technical and intermediates which are required for those, you know, blending of those products as well. So it is not, you know, the base product, as you have noticed, Mr. Vimal categorically mentioned that we believe in providing solutions. So when we say we believe in providing solutions, there are unique composition, there are three-way combination, two-way combination products which are coming. So some of the base product chemicals, some of the technicals and intermediates, any which way are required, so it is not directly proportionate to the new product launch plan. However, yes, some of the inventory is going to help us in launching the new product when in time. When you have got the product acceptance on the trial, so the planning starts from there itself. However, the product will hit the market maybe next quarter or quarter, two quarters from here, but your planning starts, therefore, we have that kind of inventory. Okay, okay. Understood. And, sir, just if you could, you know, provide detailed explanation of your CapEx plan in your presentation, that will be really helpful. Okay. Okay. Thank you. Thank you so much, sir. That's it. Thank you very much. Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to the management for closing comments. Thank you. We would like to extend our gratitude to everyone. Thank you very much for joining us. Thank you very much for keep giving us the confidence for driving the business, driving the efficiency. Thank you very much for all your feedback, your input. This is going to help us. We take it in a very positive manner. It will really help us to drive more efficiency across the function and across the business operation. Thanks to all. Thank you. Thank you very much. Thank you, sir. On behalf of Best Agrolife Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.