Ladies and gentlemen, good day and welcome to the Coromandel International Q3 FY 2022 earnings conference call hosted by Prabhudas Lilladher Private Limited. 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 this 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. Himanshu Binani from Prabhudas Lilladher. Thank you, and over to you. Thank you. Thank you, Stanford. Good day, everyone, and on behalf of Prabhudas Lilladher, I would like to welcome all the participants on the Q3 FY 2022 post results conference call of Coromandel International. From the management, we have Mr. Sameer Goel, Managing Director of the company, and Ms. Jayashree Satagopan, the CFO of the company. Without any further delay, I would like to hand over the call to Mr. Goel for his opening remarks, and post which we can take the Q&A session. Thank you, and over to you, sir. Am I audible? Yes, sir, you are. Yes. Yes, sir, please. Okay. Good afternoon, everyone. I hope everyone is keeping safe and healthy. Thanks, Himanshu, for organizing this conference call. As it is, I'll give an overview of the business environment experienced during the quarter, followed by the company performance and the Q&A. The world, as you know, has witnessed the emergence of the third wave of coronavirus, this time the Omicron variant, at the end of the third quarter this fiscal year. Comprehensive vaccination drive, proactive action by the Government of India, and preparedness of the various agencies resulted in minimum impact on economic activities and, you know, there was little distinct disturbance on normal life. I would like to congratulate all the frontline workers, especially the doctors community and the scientists who discovered the vaccines. As per economic survey, India is expected to grow by 9.2% during the current fiscal year. The growth is expected based on the sharp economic revival after the negative growth last year due to the COVID. India is likely to remain the fastest growing large economy in the world. On the agriculture front, agri GVA is expected to grow by 3.9% in the full year 2021, 2022 versus 3.6% last year. The Northeast monsoons, which basically impacts the south part of India, ended with 44% higher than normal for the full season. It is the highest rainfall in the last 100 years ever since IMD started recording this from 1901. This has resulted that the reservoir levels in the country remains at 119% of the long-term average. In southern and western India, reservoir levels are well above the long-term average. The crop acreage was marginally higher than last year, but the big increase was in oilseeds. Paddy saw a decline over the last year due to crop diversification, and quite frankly, the country has excess stocks available and therefore there were procurement issues also. I think with the third consecutive years of good monsoons, agriculture continues to be the sweet spot in the Indian economy. Global supply shortages of key commodity continues in quarter three and have resulted in higher prices, and also there have been some delays in receiving shipments. There was shortage of containers, which continued throughout the quarter with rising prices and uncertainty in containers availability. This is both for imports and exports. On the agri input side, there's been an increased demand for fertilizer and agri inputs, especially due to record production and also higher priced fertilizers. Coming now specifically to the fertilizer industry performance. For the quarter, DAP and complex industry primary sales volume was marginally higher, 58.3 lakh metric tons versus 57.1 lakh metric tons last year. The industry consumption sales recorded by point of sales machines was, however, down by 3% over last year, 73.3 lakh metric tons versus 75.4 lakh metric tons during the same quarter. Major raw material prices continue to remain high. The price of phosphoric acid for quarter four is yet to be finalized. Government had announced a special package for DAP and the three generic grades for the rabi season just to ensure that availability is made by the companies, and they relied a lot more on the manufacturing industry as, you know, importers were not able to get consignment at the desired price. For year to date, DAP and complex fertilizers timely sales volumes was down by 12%. Currently at 158 lakh metric tons versus 181 lakh metric tons last previous year. Industry point of sale was also down by 8% over last year. 174 lakhs metric tons versus 190 lakh metric tons previous year, same quarter. Coming now to Coromandel's performance. Coromandel registered a revenue growth of 34% during the quarter, driven by both the nutrient and the crop protection business. Coromandel ensured that agri inputs are made available to the farmers in its operating markets and promoted the use of balanced nutrition, including organic fertilizer, to help to rejuvenate the soil and improve farm productivity. Am I still well and audible? Yes. Yes, sir. Okay, thank you. Company's nutritional segment performance. The nutritional and allied businesses segment revenue increased by 48% over the same period last year. Company's thrust to provide specialized fertilizer and green solutions to farmers has gained further momentum in the market. Company registered a very good growth in specialized nutrition and organic products. In fact, in the first nine months, we have already exceeded what we had done in the full year last year. We have been able in this business to even be able to push the price because there's no cap to the farming community, given the novelty of our products. On the sales front, in quarter three, DAP and complex volumes was at 8.3 lakh tons, slightly higher than last year. Manufactured DAP and complex value was higher by 6% over last year. Import volumes were lower by 33%. Company market share in Q3 remained the same at 14%, same as last year. Company increases consumption market share, which is a true measure, to 13% from 10% during last year. The gain in consumption market demonstrates the company commitment to the farming community, ensuring timely availability of balanced nutrition and ability of our supply chain to get the products at the right place at the right time. Single Super Phosphate Q3 sales was 1.9 lakh metric tons with a growth of 18% over last year. Our market shares has improved to 14%, up from 12% last year for the same quarter. Our point of sale market consumption share of SSP increased by 50% to 3.1 lakh metric tons last year. There was a very good attraction in terms of our new product launches, which is Grow Plus. The fact that in single super phosphate, not just us and our agronomist team, but even the universities are talking about using locally made single super phosphate instead of imported DAP, especially in the northern and western markets. On YTD, DAP and complex volume were at 27.3 lakh metric tons, around the same figure of 27.6 lakh metric tons last year. The company's market share, because overall market decline, improved to 17% from 15% last year. Single super phosphate YTD, the sales was 6 lakh metric tons with a growth of 22% over last year. Our market shares improved to 15% versus 13% last for the same period. Our sourcing team ensured timely availability of raw materials to enable continuous production at our manufacturing plants. During the quarter, our DAP and complex fertilizer plants operated at more than 87% capacity to produce 7.4 lakh metric tons. We had also taken shutdown for number of our lines, basically at our Kakinada plant to ensure safety and our overall annual maintenance flow. Phosphoric acid production continues to remain high during the quarter. To improve the sourcing security of key raw materials and commitment to Aatmanirbhar Bharat, the company has announced setting up of a sulfuric acid plant during the last quarter. This will cost the company roughly INR 400 crore. The work on the project has started and is progressing well. We also enhancing our SSP capacity. Company has taken a plant on lease in Chennai, and we have also ensuring that in a plant which we had mothballed in Pune in Maharashtra, we are going to start operations. We hope to get products in this quarter from both these plants. I was very glad to say that the technology team has worked, and we have set up a liquid fertilizer plant at a plant in Vizag, and it's working towards liquid and fortified fertilizer to enhance the availability of nutrients to the farmers, which will be as per our strategy of more crop per gram or per drop of fertilizer. On the crop protection side. Am I still audible? Yes, sir. Yes, sir. Thank you. On the crop protection side, crop protection business registered a growth of 23% in revenue for the quarter, supported by good performance in our export markets and our B2C segment. The increase in raw material cost and a lag cost and pricing lag resulted in a bit of margin stretch during the quarter. The new product launched by the company in the first quarter this year has found good traction in the market. The strategy of introducing new generation products is helping by our farmer connect initiatives and improve farm productivity. Overall, the business has built a rich product pipeline backed by strong R&D capabilities and is partnering with global innovators to further strengthen its product offering. On the manufacturing side, our crop protection plants operated at an increased capacity utilization of 77% during the quarter versus 73% same period last year. Work on setting up new plants for manufacture of herbicides at Sarigam in our unit in Gujarat is progressing well. Our retail stores continued to operate well during the quarter, despite taking all the precautions due to COVID. The store focus in providing all round agriculture solution including product, farm advisory and mechanization service. Business has improved its operational efficiency and leveraged technology to reach out to the farmers. The company has progressed well on its digitalization transformation journey and has rolled out several digital initiatives across the organization, including digital marketing, sales force engagement, data analytics and customer connect. We are also looking at AgT ech, including use of drones for spraying and other activities. I think the healthy reservoir water and good soil moisture condition augur well for the upcoming kharif and rabi season. Coromandel will continue to work to fulfill the needs of the farming community through its innovative products and farming solutions. I'll now hand over to Jayashree to take you through about the company's financials, and then we can call it a Q&A. Over to you, Jayashree. Thank you, Sameer, and good afternoon all. I will now provide updates on the company's financials. For Q3, as far as the turnover is concerned, the company recorded a consolidated total income of INR 5,100 crore during the quarter vis-à-vis the same quarter prior year, where the revenue was INR 3,542 crore. On a quarter-to-quarter basis, this represents a growth of 44%. Nutrients and allied business contributed to 88% share of total income and the remaining 12% comes from the crop protection business. Subsidy, non-subsidy share of business stands at 82% and 18% during the quarter. In the previous year it was 78% and 22%. On the profitability front, the consolidated EBITDA for the quarter was INR 546 crore against INR 500 crore during the same quarter last year. In terms of subsidy and non-subsidy share, the subsidy share was 70% and the non-subsidy 30% during the quarter. Net profit after tax for the quarter was INR 382 crore in comparison to INR 334 crore during the corresponding quarter last year. For the nine months ended 31st December, company recorded a consolidated total income of INR 14,952 crore. This is against INR 11,385 crore during the last year. The net profit after tax was at INR 1,239 crore, vis-à-vis INR 1,173 crore in the prior year. As far as the subsidy is concerned, during the quarter, the company received INR 2,295 crore towards subsidy receipts. The comparative figures of last year was INR 785 crore. Subsidy outstanding on December 31st, 2021 was at INR 1,336 crore vis-à-vis INR 2,854 crore during the previous year. On the interest front, during the quarter, company earned a net interest income. This is excluding Ind AS interest of INR 14 crore, vis-à-vis an interest cost of INR 4 crore in the same quarter last year. The balance sheet continues to remain strong. Company has maintained its surplus funds in board approved securities and these are earmarked for specific growth related activities. The board has approved payment of an interim dividend for the financial year 2021-2022 at INR 6 per equity share, representing 600% on the face value of the share. On the Forex front, during quarter two, rupee remained in a broad range of INR 73.85-INR 76.32. Rupee also witnessed a high level of volatility. Coromandel continued to follow a conservative approach of hedging the Forex exposures and managing its portfolio well. Thank you all for your interest in Coromandel and joining us on the call today. We will now open the session for question and answers. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may please press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Anyone who wishes to ask questions, please press star then one. The first question is from the line of Varshit Shah from Catalyst Capital. Please go ahead. Thanks for the opportunity and congratulations on a great set of numbers given the challenges. My first question is largely on the raw material pricing front because a lot of efficiencies are already coming in and we are mitigating the RM pressure to cost efficiencies. The day the RM starts moderating, I think the pickup in volumes might be much better than we are doing today. My question is that ammonia prices seems to be at least taking a breather. In fact, they have fallen off their peak. With the Indian deal with Russia and Belarus in potash, will that at least stabilize going into the next immediate quarters? That's my first question. Yeah. Firstly, Jayashree, I'll take that. Sure, Sameer. Okay. Thanks, Varshit Shah. Thanks for your commendation. I think it's all team effort. As far as raw material prices are concerned, obviously, firstly, you talked about two things. One is ammonia. We need to wait and watch the situation, particularly what's happening in Ukraine and in Europe. I think the good news seems to be that the winter so far has been less harsh, and therefore the natural gas prices may cool off a bit. We need to wait and watch. We don't really have a clear listing on what is going to happen in Europe. The good thing is we have our long-term contracts with our suppliers and very reliable suppliers in the Middle East. Availability won't be a pressure, but we are looking at whether the prices can get moderated. One thing which we are pushing the Indian government for is also to get Iran back on stream because they then tend to add volumes and also then tend to mitigate some of the Middle East prices. That's where we are. We are diversifying our source. As far as potash is concerned, again, you know, obviously there are a number of big suppliers, big market suppliers in the country. I mean, well, globally, and of course Canada is one of them. A number of their mines are getting revived. It was unfortunate that Belarus and Russia had come to the fore. The ministry again is taking steps. They have talked about, and especially with the sanctions against Belarus, they have now. We have to wait and watch this space. We are covered for this quarter four. We'll wait and watch to see what happens on that pricing front. Obviously the government, like you rightly said, is trying to strike a deal directly with Russia, you know, just to mitigate some of this problem. On a very different note, we have an organic product called K-ash, you know, which is basically derived from molasses, and that product has done very well as a substitute to potash. It's more organic form than the mineral form. A little bit with the volumes being low, but that's some substitute that's seen very good traction and we are expanding that capacity. I hope that answers your first question. Yeah, yeah, definitely. Yes. My second question is on what are the I mean in terms of our chemical business, I mean agrochemical business, your absolute EBIT growth in the segment is just 3%. I s there margin pressure or because of the raw material pressure or the volumes are largely flattish YoY, you know, on the business as a whole? Jayashree, you'll take that. Yes. Varshit, good question. On the agrochemicals front, we have seen a growth in terms of overall revenues, as you have seen, both in a quarter-over-quarter basis as well as a year-to-date basis. However, like in the nutrient business, we have seen that there has been an increase in the raw materials prices and also availability. Added to it, there has also been a rise in the transportation costs, especially due to container availability and the oil prices going up. The business has taken actions in terms of pricing for this. However, there has been a lag between the cost that has been incurred and the pricing that has been passed on to the market. Therefore, you would see that the margins are to some extent, depressed during the quarter, but we expect the situation to ease out, very soon. We have effected the price hikes, but will get reflected with the lag or we have yet to effect some of these price hikes to fully cover the inflation so far? We have covered the inflation so far, but then one also needs to see how the raw material prices are going to be in the coming quarter. Sure. That's been helpful. I'll get back into the queue and all the best. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference call, please limit your questions to two per participant. For any further questions, you may come back for a follow-up. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, hi, sir. Overall, my question regarding the pricing scenario for fertilizer and government has restricted the price increase. Despite of that, we have seen a decent margin in this quarter. Also, can you talk about the overall price increase what we have taken? Because we are unable to understand overall the kind of margin we have shown. We were expecting a lower margin, whatever expectation we have. What price increase you have taken over the with the significant increase in price started for phosphoric acid and ammonia, and what are the gaps, and what price increase we require to take from here if the government is going to allow? Could I take this? Sumant, firstly, I hope you're happy with our margin. Yes, sir. Okay. Yeah, Jayashree, you want to go or I'll just say firstly and you can just add on to it. Firstly, Sumant, the first thing for us is to deal with the raw material availability. We have driven efficiencies. We talked about our backward integration also. We had talked about this. Like I said, we've already now announced even going further backward for other raw materials like sulfuric acid. You'll see more of it coming out. Our whole idea is that as much as possible, as part of like Jayashree said, Atmanirbhar Bharat, we can capture the values here. That's something which we are looking at. That's on one front. The other thing is of course, you know, we have shown sourcing efficiency and also we have reliable suppliers. T hat is something which our commercial team does well. At the same time we have been able to also ensure consumption happens with the help in the market, with the help of our agronomist team and our sales team. Now the government has asked us to cap, and like all companies we have capped the prices. In our balanced nutritional products we have been able to take that differential better. That's something which is there. Hence we have been able to drive this efficiency. You talked about going forward. We'll have to wait and watch what the NBS rates are. Also this balance between NPK is sorted out, which we have represented to the government. You know, we have seen one good thing the government has done is to clear all the subsidies. T hat we are very. As an industry, it's been great for the government. Because we sell to consumption, we don't have so much of a pipeline in the trade channel. T hat also helps our working capital. The main thing is that we have to wait and watch what the government policy is going to be and how do the international pricing firm up for next year. Couple of things which have to be done at a country level is if China comes back, which is a big producer currently. There are certain import restriction also partly got to do with Beijing Olympics, which is happening now. You know, because they are big supplier both of raw materials and of finished goods. Then the tension in Europe eases out, which we hope it will. Of course, we are also looking at newer markets like Oman to come back like Iran. Government is looking at fertilizer being a super-sensitive subject. They are looking at, you know, government to government arrangements for supply. First, availability and supply of raw materials at the price. We are hoping that this imbalance which we had faced this year does correct from next year onwards. That's where we are currently. Jayashree, you want to add anything? The couple of things that I also wanted to touch upon is apart from the efficiencies at the plants, I think the multiple sources of raw material that the plants are currently able to produce. Bringing in the flexibility is also very important. That has helped us a lot during this quarter because if we can source from different places and we are able to get the efficiencies of cost, that can be harnessed. The next one, which is also important is the logistical and supply chain costs that are being managed quite well. As much possible we have been doing the direct deliveries, which has also reduced the costs on that front. The third one I would also want to sort of bring up is the containment or the control on the fixed cost front, especially the nutrient part of the business. Given the challenges, I have actually looked into every aspect of cost to see how this can be managed well. All of these have sort of worked out quite well. As Sameer was telling, we are seeing some sort of silver linings. The urea prices, for instance, have cooled down from its peak of $900 to around $638 or so. With China opening up hopefully soon, we should see that the prices of DAP also coming down, and this should sort of help as we move into the kharif season. What is the contracted phosphoric acid price for the coming quarter? Sorry? That currently has not been announced on phosphoric acid. Okay. They're still negotiating. I think they are giving provisional shipments based on last quarter prices. We do expect them to increase because DAP prices are still high, so but the negotiation is still on. Quarter four is a lower quarter basically because, at least for us, we'll be taking shutdowns, Annual Turnaround, so that we gear up for our Kharif season next year. Thank you so much, sir. Thank you. Thank you. The next question is from the line of Bharat Sheth from Quest Investments. Please go ahead. Hi. Thanks for the opportunity and congratulations on trying times. Sameer, I just want to understand on the strategy for SSP since we have grown nine-month 22% and which we were evaluating as a part of the some kind of a replacement in some of the geography to the NPK and the prices of SSP is also relatively lower. To increase and we are also taking a plant on the lease and reviving two facility which we had shut down. How do we really look at in medium term this to play out? And second thing, how are we seeing the EBITDA per ton in the SSP? Thanks, Bharat. I'll take the first question, and second, Jayashree can answer that. Right? Okay. Firstly, thanks for the thing. I think the SSP, we, like we always say, we have the oldest fertilizer plant in, not just in India, but probably in Asia, in Ranipet, in Villupuram district, way back in 18. We have been the first fertilizer which was manufactured SSP. We had the Liberty acquisition. We got number of plants. Yes. We obviously saw that, you know, there were cost inefficiencies there. Right. Now, one good thing which happened this year, but it's not an overnight thing. We definitely didn't want to be just an SSP player. Our technology team have developed what we call SSP Plus. Yes. Already we have a product called Gro Plus in the market, which actually is, you know, farmers are now not talking about SSP. They talk about SSP, they call it Gro Plus, and basically it gives wonderful results. I'm a practicing farmer myself, in our field. In fact, my own people when I grew the potato crop said, "Why aren't we using DAP?" I said, "Nothing doing. Please use SSP." For them, it was a first, even for my farm hands. Okay. We got excellent results to a neighboring field which had used DAP. Yes. I'm just telling you the impact as a farmer. SSP is definitely something which we will continue to grow. We had a strategy. We had mothballed couple of our plants, but now we are expanding. As we speak, you know, we have a plant in Pali, in Maharashtra, and we are renovating it. It was mothballed because of the fact that, you know, we are not making enough money there. The government also when it launched the P thing and they wanted and now they're encouraging SSP because DAP, a lot of it is imported and P, most of the raw materials are locally sourced, so there's value addition within the country only. It is also a fertilizer which is actually in a way I will call it a magic fertilizer because it just doesn't supply P, but it's rich in calcium, magnesium and other thing which actually benefits the field and the farmer. Plus, this whole issue towards oil seeds. Oil seeds require sulfur and therefore, SSP has sulfur also in it. Therefore, it's a grade which is used by farmers. The only thing is, because of the quality which was being provided by SSP, some of the what is called local manufacturers. Yeah. Didn't test on quality. Therefore, the farmers had had a bad experience, and therefore they switched to DAP, which was imported. I think now with players like us entering and even our competition say that we are giving great emphasis on quality. We are giving great emphasis on value addition. There's a huge market to it, and we have combined our fertilizer and single super phosphate teams to leverage the strength in the market and also not only that, also in the manufacturing side. We are expanding capacity as we speak. We're also increasing from powder to granulation because again, when the farmers have granulation, it is not just a basal application. You end up also applying it to the crop number of times. That's our whole strategy and it's paying dividends. That's the reason why, next to our plant, which is a NPK plant in Ennore in Chennai, Kothari plant was available, so we have taken it on lease. We are putting money there and basically we want more capacity, including granulation capacity. This is something which will grow and being quality players because there are a lot of unorganized players in the market, we do expect with the help of our quality and our innovations that, you know, we'll continue to gain market share. Our strategy of acquiring Liberty Phosphate company is now really paying off. So. Sorry, but it's taken a while. Sorry to interrupt. It's paying off. I mean. Yeah. Hello. What will be our? Yeah, go ahead. capacity post this, before Jayashree. Currently we have a capacity of, we can do 1 million, but we need certain upgradations to happen. Currently, we are at 10.16 lakhs, but we'll get to 1 million in the short future. 1 lakh, 1 million tons. Jayashree, you want to answer the margin thing? We can take it separately. Yeah. On a discussion on SSP because I think other people are also on the call. Okay. Jayashree, if we just give some, I mean, directionally margin front. Yeah. See, on SSP, the way we look into the margins is at a plant level. Okay. We don't do it, unlike NPK at a company level because SSP is to be distributed very close to the plant. The proximity we are and the type of products that we are doing normally brings us to say for instance, the profitability. The Grow Plus products will have a slightly higher profitability compared to the powder SSP. I think we will have to take this on a separate call to sort of. Okay. Explain the dynamics in the SSP market and how we look at the profitability. Again, Sameer, I mean, coming back to our Gro products. This is our second question. May we request you to come back in the queue for a follow-up, please? Okay. Sure. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity and congratulations for a superb performance in the challenging times. You know, on the fertilizer margin side, you know, given we had the backward integration that benefits as well as you know, the RM supply surety which you mentioned. Y ou know, the pricing led restrictions by the government on the end product pricing. Do we expect these margins, you know, INR 4,500+, you know, on the manufactured EBITDA side or fertilizer side? Are these numbers sustainable, presuming, you know, the macro stays what it is, the phosphate prices remain where they are with an improving trajectory? I think, Jayashree, you can. Can I take this? Yeah, go ahead, please. Yeah. Ankur, the way one needs to look at this is currently the RM prices are at its record high. We are probably at the peak of a commodity cycle. Right? Over a period these prices will come down. If you ask us at the current prices, INR 4,500 will be difficult. A t the same time, are these prices going to remain at these elevated levels? Possibly no. We are seeing that additional capacity is coming in for ammonia, for instance. Same is the case for sulfuric acid. In a period in time these costs will come down and with the inputs from China that opening up, it will also ensure that the urea and DAP prices come down. In my view, in our view, possibly the next couple of quarters may see higher RM prices slowly coming down. As it normalizes, you will see the margins also in the range of INR 2,000-INR 2,500 as we've indicated earlier. For us, what is important is to see how we can continue to get the benefits of a backward integration. Therefore, running our phosphate plants at full capacity is extremely important. As the raw material prices are higher, the more we do, the better is the value captured at that plant. That is what has actually helped us to sort of work through the last quarter and this quarter. The Vizag and Ennore plants, which are totally dependent on our own phosphoric acid, has actually helped in our profitability. We are also exporting our phosphate from Vizag to Kakinada for its operation. Some of these are helping. We believe that strongly in the next two, three quarters, the prices of raw materials will cool down. Which one goes first? How much is obviously something that we have to wait and watch. Having said that, if you look into the last 10 years trend, probably this is a year where we have seen the cycle can increase. The government has also been supportive in terms of giving a higher subsidy to sort of compensate for the raw material prices. Last year they have done mostly on P, and as the new NBS rates are likely to get announced, the rate would get across M, P and K, which is what we are also representing with the government. In a medium longer term, definitely these margins are there. In a short term, if you were to look into it, if the prices continue, there could be a bit of a stretch. Just to add one more thing, Ankur. Firstly, thanks for the compliment and a good question. You know, firstly, the cap is only on certain raw, what is called, products. We have been able to pass on higher prices for some of our what is called our unique grades and our branding strategy has helped. T hat's one. The second thing is. Our diversified portfolio does help. We have seen growth even in what is called our specialty nutrient organic business, even on the nutrient side, where there's no cap as such, but the raw material prices are rising. The other thing is, the government will, you know, currently there is a certain compulsion, but the government will ease some of the price restrictions which are there as we go forward. Definitely next year there will be some amount of this thing because the whole idea of NPK was based on the NBS policy, which is the market-based has to be more. Government only steps in to provide few subsidies. That change will happen. Sure, sir. That's helpful. Second question on the, you know, the crop protection side. While we have seen some bit of, you know, RM inflation impacting our margins here, but you know, your thoughts in terms of when are you seeing, you know, more or less full pass-through of this RM inflation, and the contribution of the newer product launches, you know, how has that been, panning out in the crop protection? I think, Ankur, Jayashree answered that question before. One is there was a lag in the price increase which you have already done. That's one thing. Provided of course, the raw material prices don't go up more. We are again expecting some of the raw material prices to come down after the Beijing Olympics, because China is one of the major sources. We are seeing the softening also on the container part of it. We do expect, you know, things to really get stabilized. At the same time, like in any other operation, we are looking at efficiencies at our plant and also certain amount of backward integration. The new product is working well, although a little bit, especially in the domestic market. Of course export markets have been, you know, sold products and led by Mancozeb. There has been quite a lot of demand for Mancozeb across the markets. Now we are having the pass-through with the customers on the raw material front, pricing front. Thank you. That's helpful. Thank you and all the best. Yeah. Thanks. Thank you. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead. Sir, thank you and good evening, and congratulations on a good performance. What I would like to understand is, in terms of the EBIT performance, in the nutrient business, can you give us the volume of the share of the non-subsidized fertilizers or non-subsidized products, which represent the 30% of the non-subsidized EBITDA? Jayashree, you want to answer that? Thanks S. Ramesh for the compliment. Yeah. Thank you. Thank you, Ramesh. The nutrient business, we have fertilizer, SSP, MOP and organic. Right? The major portion, I would say substantial portion of the revenue and the margin comes from fertilizer and SSP, which are the subsidy business. I would say almost 80%-85% constitutes comes from the fertilizer and SSP. The balance is coming from our specialty nutrients, organic and the others. You're talking about the volume. Because I understand the product mix. I'm saying your margins seem to have gone up and 30% of your EBITDA is from non-subsidized products, including PPC and non-subsidized fertilizers. I'm just trying to get a sense in terms of the volumes you're talking about and how we can expect the trend in the non-subsidized products going forward in terms of volume growth. Okay. The question is this, right? We have given a segmental report. The segmental report is Nutrients and Crop Protection. The Crop Protection performance, the growth has already been sort of covered there. Within the Nutrient business also, there is a small portion of business which is not under the subsidy, which is specifically the specialty Nutrient business as well as the organic, which is what I articulated now. Yeah. As far as the future is concerned, as we've always maintained, our growth engines are going to be the non-subsidy business. There is lot of focus and thrust on seeing how we have to grow the specialty nutrient business, the liquid fertilizer and so on and so forth, because there is ample scope for growth there. Similarly, there is a thrust on increasing the organic growth, and you would have also seen the government even in the budget is laying emphasis on this. Apart from that, crop protection as well as the bio products that we are having is another area of focus for the company. While we focus on all these non-subsidy businesses, clearly we do not want to ignore the larger part of the business which is stable. Though it is under subsidy, there is opportunities for us to grow. There will be some amount of, growth and impetus given to them as well. If I were to summarize, there is emphasis and, identification of growth engines which are primarily the non-subsidy business. We did a strategic plan three years back, and that has been clearly laid out. As we speak, we are going to be revisiting our strategic plan for the next three years, and that exercise will get completed in the next three to six months' time. Here again, the focus is to see how we can accelerate the growth on some of the non-subsidy businesses. The focus and the thrust of the company is definitely there to see that these businesses get far more attention or capital allocation so that we can accelerate the growth. Just to add, Ramesh, to your question. Yes. One of the things is you're talking about the nutritional part of the non-subsidy. Yeah. Normally we are seeing the CAGR in the growth of a range of 20% upwards. Even this year it's going to be like that. While it's a small but it's a very fast-growing business. When you look at the non-subsidy part of it, given our strength in fertilizer, this business, especially on the nutritional side, and given the innovations which we have and Jayashree talked about, we expect that to continue to grow and get bigger and bigger. In fact, one of the things we are also looking at is whether we can even look at, you know, looking at inorganic growth in those business, because that's going to be the future. We have launched, you know, we have set up a liquid fertilizer plant in Vizag to look at lot of new products which are going to come out. This is going to expand. When I went to U.S., you know, 25 this way back in 2017, 20%-25% of the sale of fertilizer was actually in liquid fertilizer. I t was add on to it than the powder. That is something which we are looking at. We've just launched a product, you know, which is basically a foliar spray liquid fertilizer. The main reason for that is the nutritional uptake for zinc there is around 70%-80%. When you get products of zinc, particularly zinc sulfate, the uptake by the plant is only 5%-10%. We also talk about nutrition efficiency here. You'll see more and more of this coming up as we go forward, and this will become bigger and bigger. That's the reason we have brought it under the same umbrella of the nutrition, so that we can leverage all the strengths. There also what we are doing is earlier it was a trading, you know, we are doing more of trading. We are now upgrading our plants and getting more manufacturing done locally so that we can do the value capture. Hope that answers your question. You can take it offline if you have more questions. Yeah. Yeah. Understood. That's very helpful. Just to understand, you know, the trend in the subsidized fertilizers, the one thing that has been eluding understanding is the certain amount of, you know, under recovery or not adequate compensation being given to all the nutrients. In this quarter, based on the NBS rates for the third quarter, was there any under recovery in the subsidized fertilizers? And has that been covered by the non-subsidy fertilizers in terms of the EBIT reporting? And when do you see the entire under recovery being completely passed on? Jayashree, you want to answer that? There is not been any under recovery as such. Are you able to hear me? I have a certain disturbance here outside, so I was not able to get your question completely. She's saying, we can take it offline. She's saying under recovery as far as the nutrients are concerned. There's not been any under recovery as such. Based on the NBS and your price increases, you are able to, you know, cover all your costs. Yeah. To the extent possible, we have been able to cover the cost. As I was mentioning earlier, there has also been a subsidy increase that has been given by the government. Having said that, post the subsidy increase that has been given, raw material prices have gone up. For which we are also in dialogue with the government to see how they can support with the further increase in the subsidy rates. T he margins compared to last year have come down, as you could see. There has been a bit of a compression primarily because of some of the restrictions in MRP, especially on DAP and monoammonium phosphate. The subsidy being restricted to P rather than to N, P and K. As I mentioned earlier, we expect this to get corrected as the Government is going to announce the new NBS rates for the coming year. Okay. Thank you very much indeed to all of you. Thank you. Thank you. Thank you. The next question is on the line of Deepak Chitroda from PhillipCapital. Please go ahead. Yeah, thanks for the opportunity and, congratulations on great set of numbers, you know, despite the RM pressure, which we have seen not only for Coro, but I think for the entire industry. My first question is about, you know, the subsidy. The party you are speaking with has put your call on hold. Hello? Am I on? Yeah. We can hear you. Please go ahead. My first question is about the subsidy allocation which we have during the budget. You know, the revised amount which we have now is around INR 64,000 crore or so. Do you think that particular, you know, allocation which we have is probably cover the, you know, the whatever the RM spike which we have seen since October, you know? Also there is some, you know, amount left, which probably government can compensate, you know, for the, for the, you know, subsidy probably in the coming months. One thing here. Firstly, thanks for your confidence, Deepak. Just on the subsidy front, to be fair to this government, you know, last year they cleared for the industry the entire backlog, giving out claims which they had to process or not settle. That really helped the entire industry, number one. This year also, while they had budgeted, say, around INR 18,000 crore, they've ended up now having additional allocation of around INR 60,000 crore. I'm talking about both urea and NPK together. It's coming to INR 1.4 lakh crore. They have been very prompt in paying, at least especially on the DBT and the freight bills. We have to compliment that. I mean, as we submit, they are quite good at it. We have some few old claims which will obviously get again corrected as they get the time. Overall they have been doing well. To your question whether we see any gaps, so far we've not seen the gaps. If there's something depending on how the sales and the consumption happens for the industry, we'll have to take it as it comes. Even in January we got some very good collections, so we have nothing to complain about. Okay. Basically the 64,000 allocation which we have now basically covers the, if we take the current cost, you know, of RM. Basically that covers the entire allocation. No. Again, you know, I can't talk on behalf of the industry. Okay. Overall they would have taken that into account. A lot also depends on what gets made and imported in February, March. Yeah. Sure. Thanks. My second question is about the margin. Just to the extent, I think, you know, from the previous participant. In fact if you look at our volumes, you know, the complex volume have been, you know, on a YoY basis kind of, you know, similar. I n fact our unique grade share has, you know, declined from 43% to 24%. In fact, the growth which we have witnessed were on the SSP side of around, you know, 190 lakh tons of SSP. If you can basically explain how we have, you know, sustained or improved to some extent margin. I f you can quantify in terms of price increase, which we have taken for, you know, some of the grades, for the quarter. First, I don't think we've lost market share. You know, just a correction. Saurabh can give you the exact figures including on consumption even on NPK per se. In fact, because the market. Unique grade share I'm talking about, sir. Again, when you talk about unique grades, you know, it depends, you know, what the NPK elements are. Purposely also what the government wants. The reason for, you know, not manufacturing some of the unique grades was because the government wanted us, the manufacturers. I started at the beginning of my thing, because there were import issues and availability. They had requested all manufacturers including us to, you know, supply DAP for some of the markets, where especially in the North and West, and which we and other companies obliged. It was more of a marketing thrust, and, you know, and to meet the demand of North and West. That's the reason for this change as such. I don't think we have lost anything. It's more of a temporary thing to satisfy a need, which the government had requested for. That's the way it is. Sure. Yeah. Thank you for that. Thanks. Thank you. Thank you. Ladies and gentlemen, we request you all to please limit your questions to one per participant. We take the next question from the line of Vishnu Kumar from Spark Capital. Please go ahead. Good evening, and thanks for the time. Wanted to understand the entire import of DAP and phosphatic fertilizers. I mean, from urea side, I think government has substantially reduced it to import dependence to less than 10%, post the new plan. Given that, what's the problem that we have faced this year? Do you think that any proposal from the government in terms of any incentives or any PLI schemes or something that will come up even given that we should not continuously face the DAP shortages globally? A connected question is that, what do we see as a growth in our fertilizer segment over the next 2-3 years, either of capacity additions or anything that you give could give us some color as to where this segment, as investors should look for over the next 2-3 years from a volume perspective. I think again, Vishnu, it's a good question you have asked. Just to break it up into two. You talked about DAP and you talked about NPK. The NPK CAGR for the industry is close to 10% over the years, and obviously it's led by companies like us who want to follow a balanced nutritional strategy. Right? DAP has been actually marginal. This year it will show a decline. You know, again, it's been 1%-2%. I do call DAP a very generic fertilizer, right? You know, these are high concentrated fertilizer. I think what the Indian soil now requires, like urea also, is required with fertilizer which are more balanced and even crops require that. Therefore there's less of leaching and other things, right? That's one part of it, right? Now, your next question was if there's a gap between currently even the domestic manufacturers when you look at overall capacity. I think the number is around 70%-80%, and it's lower in SSP where it's close to 40%. Right? Now, part of the reason is that you know this year the government saw the importers can import products during the season and then sell off and go out of it. Like this is not just the first time. It has happened in the past also where we had quality issues on imports and the market size. The government is seized with this situation. More and more the suppliers are wanting, you know, when I say the suppliers, we turn into suppliers want to convert into finished products in their country to get the value addition. Right? The government is definitely looking at this. One is they are looking at backward integration to secure and something we mentioned in the beginning of the call about talking about government to government deals like with Russia and other places, is to secure the raw materials, you know, and have long-term contracts with that. Number two, we have pleaded to the government also is to support as part of Atmanirbhar Bharat to support domestic manufacturer. Firstly is to ensure that we operate at full capacity, but that's our marketing ability and our efficiency. To ensure that, you know, companies which are able to import at full thing either to get the raw materials or to convert efficiently. There we have talked about whether we can have advantage both in terms of customs duties in favor to this thing. Also early on the subsidy was given first to the domestic manufacturers, only then given to importers. That's something which we've asked for. Definitely what I see for and it's been talked in that circle also, like in urea, the fertilizer being such a essential commodity, government is definitely going to look at how we expand our capacity at least in the medium to long term. You're absolutely right. To reduce the dependence on imports. Sorry. Am I audible? Yes, sir, you are. I hope that answers your question. A good question. Thank you. Ladies and gentlemen, we take the last question from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah, thanks for the opportunity. Sir, congrats on good set of numbers. On what factor is our decision to expand capacity in complex fertilizer space hinged upon? Again, I mean, like Jayashree was saying, we are looking at strategically. Our first thing is to ensure that we get, one is we are doing debottling of the plants, which anyway is adding to the capacity. We are also looking at efficiency. As we speak, you know, because of ATA and various other disruptions, you know, we are at 86% of our capacity, 87%. We can easily reach taking a one year's ATA to 97%, 93%-94%, one month ATA. That is something which we are looking at apart from debottling. I think our first thing is to look at backward integration and secure the raw materials. Once that happens, we'll definitely and to grow the market. The market is growing like I said in the previous thing and to go for more and more specialized grades. We have a full plan not just for our base fertilizers, but we are looking at, you know, liquid fertilizers. We talk about nano, we are talking about slow release fertilizers. All that is in the pipeline. We've already launched liquid fertilizer. Y ou'll see, you know, slow release coated fertilizers and also nano and some other fertilizers which are going to come which will add on to it. That is something which will happen. Sir, on the primary fertilizer front, is the creation of market a primary deterrent as of now or is it the securing of raw materials? Not really. We obviously service our own markets. Like I said, NPK is growing in volume and our balanced nutrition approach is growing. This time when government told us to sell even to markets like UP and MP where we had this thing we were able to sell because we are selling SSP in that market. I don't think market is an issue and we have very strong brands. We are getting into the branding strategy. That is one. We are not into selling commodities or grades that way. That's not the thing. Main thing for us is to ensure that, you know, we have, you know, always a secured source of raw material coming in to backward integrate and get the value capture yourself than someone else capturing it. Sir, actually, on the raw material front, our sense was that rock is primarily available in abundant quantity globally even right now when there is some sort of a shortfall in supplies. Is it that there is some shortfall in phosphoric acid availability that is here acting as a deterrent to finalize the CapEx or if you can? There are two things here. Firstly, phos acid is also available, but the main thing is for the manufacturers then to convert it into their own finished products and they are meeting the global demand. If you have got higher demand in Brazil for MAP or Africa as a continent is growing, you will then tend to even focus there. Obviously they can't ignore India because they know India is a big market, that's one. Obviously the prices when there's a huge demand, the prices obviously go up. That's one part of it. As far as the rock is concerned, yes, the rock is available, but again, the rock quality has to be different and each rock has got its own challenges. The good thing is when we are setting up our new plants, particularly on phosphate, we have designed our plants to take any type of rocks. Even our old plants, we are actually working towards seeing that we can use any and therefore the alternate rock and acid strategy is also helping us, so that we can source from various countries wherever it's available. Right. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. Thanks. I don't know whether Jayashree is still there. I'm there. Yeah, thanks. Firstly, thanks for all the comments. Quarter three obviously is a good quarter for rabi. We are happy to see how the agriculture is continuing to do well, how the rains have played out. Although amidst, there were some crop damages and some procurement issues which happened during rabi. Overall, India is in a good state as far as agriculture is concerned. Definitely this crop diversification, whether it is to oilseeds or fruits and vegetables, also help as input companies because you can keep focusing and not dependent just on cereals, on that count. we do expect, quarter four anyway is not a consumption quarter for us, and we will be taking it easy so that we gear up. We are expecting again a very good kharif to come. Given the current moisture levels, given the current dam levels, and even though we watch for the forecast. I think we are now getting more and more out of this monsoon dependent, because we have a large market to serve. Given our strength of our brands, we are quite confident of making that work. The ability we have—the company has, the money and the ability to invest, whether both in organic or inorganic growth. Do watch this space. Jayashree, if there's anything else you want to add. You have summarized it well, Sameer I think, with good monsoon conditions, we expect the upcoming kharif season also to be encouraging. We have to wait and see how the raw material prices come down. Of course, Coromandel will continue to focus on any action that will help us to stay competitive and serve the needs of the farming community. Thank you all for your interest in the company and look forward to future interaction. Thank you. You can always reach out to us if there's any question to Saurabh, and we are more than happy to answer that. Thank you. Thank you very much. Thank you. Thanks. Thank you very much, sir. Ladies and gentlemen, on behalf of Prabhudas Lilladher Private Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.