Ladies and gentlemen, good day, and welcome to the Coromandel International Ltd Q1 FY 2023 earnings conference call hosted by PhillipCapital India Private Ltd. 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. Harmish Desai from PhillipCapital India Private Ltd. Thank you, and over to you, sir. Thank you, Michelle. Good afternoon, and welcome to the first quarter FY 2023 earnings call of Coromandel International Limited, hosted by PhillipCapital. From the management, we have Mr. Sameer Goel, Managing Director, Ms. Jayashree Satagopan, CFO, Mr. Mayur Gangwal, GM Finance. I would like to thank the management for giving us the opportunity to host this call. We will begin the call with opening remarks from the management, post which we will have a Q&A session. Thank you, and over to you, sir. Good afternoon, everyone. Am I audible enough? Okay. Good afternoon, everyone, and thanks, Harmish, for organizing the conference call. I'll first give an overview of the business environment experienced during the quarter, followed by company's performance, and then we'll have the Q&A. Firstly, to touch upon the global economy. The global economy, as all of us know, is experiencing a slowdown, with 2022 growth estimated lower to 2.9%. Last year it was 5.7, a bit on top of COVID season. One of the reason has been the tightening of monetary policy, including interest rate hike, and the strengthening of dollars against major currencies have resulted in driving inflationary pressure across economies. Further, there has been impact of the protectionist policy by some of the countries causing supply chain disruptions. The agriculture continues to be good news. The food price index remains at healthy levels. Of late, there has been slight softening in commodity prices from their peak levels. Going forward, the geopolitical uncertainty, also via the Ukraine war, partly COVID flare-ups and the steps taken by various governments, rising commodity prices, financial stress and monetary tightening, can have an impact on the economic recovery. It is a VUCA world out there. I think Indian economy has still done better. It is progressing well through the growth rates, which have been slightly revised downwards. Quarter one GST collections were buoyant at INR 1.4 lakh crore, up 37% year-on-year. India started its vaccination program from January 2021 and has now administered more than 2 billion COVID vaccinations. With the vaccination program having covered the bulk of the population, the economic momentum is building up and India is likely to remain the fastest growing large economy in the world. Major headlines are around rupee depreciation, inflation around 7% and of course the energy prices, which needs to be closely watched. Coming now to Indian agriculture. As all of us know, the southwest monsoon is progressing well and is currently at 111% of the long period averages. There was initial shortfall and erratic rains in the month of June, which has actually impacted the sowing season, and it got pushed outwards. However, there was a very strong recovery made in the month of July, especially in the markets in which we operate. The reservoir levels currently stand at 155% of long period average. Last year it was around 143%. One good news on the agriculture front is, and India is feeding the world, is the agricultural exports is up by 18%, signaling resilience of the Indian agriculture. The crop sowing as of 15th of July remains more or less at the last year levels, with gains in pulses, coarse cereals, oilseeds and cotton. However, there is a shortfall or a delay in planting of rice, which is the main crop for Kharif. During the quarter, MSP of Kharif 2023 was announced, which had an increase of 5%. Currently, agricultural commodity prices across the board remain favorable and are operating above the MSP levels, partly also got to do with the demand even coming from the export markets. There has been increased thrust on the agtech side with industry and government working together to promote dissemination of technology in agriculture. These are areas like drones, mechanization, new tech for fertilizer like nano, slow and coated release fertilizer and organic fertilizer, including SSP, is being promoted by the government. With the signs, we will have a fourth consecutive year of good monsoons, and with that, agriculture continues to be a sweet spot in the Indian economy, especially in the markets in which we operate. Coming to the fertilizer industry performance. Global prices of key commodities continued in Q1, and have resulted in higher prices and delays in seasonal shipments. The industry witnessed higher prices of key raw materials due to the supply disruption caused by Russia-Ukraine war and also emergence of COVID wave in China and the protectionist or regulatory policies being followed in China. However, in the last few weeks, we have seen signs of cooling of some of the raw material prices. The government from its side has done well in terms of ensuring that raw material is made available, including having certain deals with Russia to ensure at least some of the critical raw material is made available to the farmers here, and also having some long-term ties with other nations to use their diplomacy. For the quarter, DAP complex fertilizer industry primary volumes were up by 23%, quantitated at 53.8 lakh metric tons versus 43.7 lakh metric tons last year. This is largely due to the higher imports of DAP. While the government had announced increase in subsidy, there was some delay in payments of NPK in quarter one, which has impacted the cash flows of a number of companies. However, urea subsidy has been paid on time. Like I said, the India rates for 2022-2023 were announced on 27th April 2022. Subsidy approved by the cabinet for NBS Kharif season 2022, which is the period up to 30 September 2022, will be around INR 60,939 crore, including the support given to SSP through state subsidy and additional support for indigenous manufacturing and imports of DAP. This is quite unprecedented. As per the requirement of the industry, while the total year budget has been over INR 2 lakh crore, the requirement could be INR 2.5 lakh crore. Coming now to Coromandel performance. Despite all these uncertainties in the international market, Coromandel has displayed a strong performance during the quarter, registering good growth across the business segments. I'll mention this is quite creditable given the uncertain business environment, the geopolitical uncertainty, supply chain disruptions and firm raw material pricing scenario. We registered a revenue growth of 57% during the quarter, driven by both nutrition and crop protection business. This was due to also the higher subsidy which was available, leading to the turnover growth. Also in the non-subsidized business, we were able to pass through the raw material prices cost. Our main aim of Coromandel was that agricultural inputs are made available to the farmers in its key operating markets, and also continue to promote balanced nutrition, including organic fertilizer, which helps to rejuvenate the soil and improves farm productivity. Coming to segmentation performance, company nutritional segment. The Nutrition and Allied Business segment revenue increased by 66% during the quarter. The company's thrust to provide specialty fertilizers and greener solutions to farmers has gained momentum in the market and has registered a very good growth in both our specialty nutrition and organic products. On the sales front, in quarter one, DAP and complex volumes were at 7.3 lakh tons, slightly lower than last year, which was at 7.8 lakh metric tons. Manufactured DAP and complex volume were lower by 10% during the quarter, since we had deferred some of the sales to quarter two, mainly to be in sync with the delay in sowing season due to the delay in monsoons in the month of June. Imported product volumes was higher by 170% during the quarter. Company market share in quarter one for DAP and complexes was at 13.5%. Previously, it was at 17.8%. Mainly got to do with the fact that the season has got delayed in our market. The lower market share also was due to the industrial growth in DAP. In the NPK or complex segment, our market share improved from 27% to 28%. Our Single Super Phosphate quarter one sales was 1.6 lakh metric tons versus 1.86 lakh metric tons last year. Our primary market share was slightly down at 11.9% from 14.3% last year for the same quarter. We had some availability and production issues of the raw material during the quarter one. Our commercial and social teams did very well to ensure timely availability of raw material to enable continuous production of our manufacturing plants. During the quarter, our DAP and complex fertilizer plants operated at 91% capacity and produced 7.9 lakh metric tons of fertilizer, up by 32%. This bodes well for the coming quarter two current season. Our phosphoric acid production continues to remain high during the quarter with a growth of 27% at 1.12 lakh tons. Our key CapEx projects are progressing as per plan. The work on the sulfuric acid plant is progressing well, and the commissioning of the plant is expected in quarter one FY 2023. This is part of our backward integration and to ensure that we have our own sources for raw materials. Given the high demand for SSP, the company has enhanced SSP facilities, and we are very happy to say that we have reinstated the Hospet plant in Karnataka and also the plant which was mothballed in Pali, in Western Maharashtra. We have also taken up production of Kothari in Ennore, and 10,000 metric tons was produced during quarter one. The merger of CHKM into Coromandel has been completed during this quarter. With this, the business of CHKM has been fully integrated with our specialty nutrition business, and we are looking forward to building up both capacity and also having a common warehousing. Our technology team is working on new tech products like customized fertilizer, nano to enhance the productivity of nutrients. We are expanding our network of Nutri-Clinics, which are supporting the business in promoting balanced nutrition and market development initiatives. For our specialized nutrition business, we have conducted drone trials for spraying application, and the results have been very positive. Coming now to the crop protection side. Our crop protection business registered a modest growth of 5% in revenue for the quarter, with good growth coming in from the domestic market segment. There was some tightening we have faced in the export markets. The increase in raw material costs and a lag in cost and pricing has impacted slightly the margin during the quarter. We are very happy to announce that four new combination products have been launched in the quarter. Three of these are insecticides and one is a fungicide. This is strengthening the company's portfolio towards newer and safer chemistry. The initial response has been very encouraging. The business has built a rich product pipeline backed with strong R&D capabilities and is partnering with global innovators to further strengthen its product offering. On the manufacturing plant side, CPC plants, particularly those operated at 60% during the quarter compared to 29% last year. We were utilizing some of the products which were produced in quarter one of last year. Work has been set up for building a new multi-product plant for manufacturing of fungicides at Ankleshwar during this quarter. Like in our specialty nutrition, the company has successfully conducted drone spraying activities in the farmer fields with crop protection products and have finalized 10 products for regulatory trials. Our rural retailers network did extremely well during the quarter, with focus on non-traditional crops and providing all-round agriculture solutions, including products, farm advisory and mechanization service. Business has improved its operational efficiency and has leveraged technology to reach out to the farmers. We are very happy that, you know, with the help of technology and better negotiations, our retail business has a negative working capital. Coromandel continues to invest strategically. During the quarter, we invested in a rock mine in Senegal, which is Baobab Mining, BMCC. This will help to diversify our rock sourcing and strengthen our backward linkage. These mines can meet one third of our mineral phosphatic rock requirements. We have started investing in active startups. The first one was Ecozen, which provides renewable energy-based technology-led solutions for agriculture. They have installed more than 50,000 irrigation pumps and 350 solar cold rooms till date in India and abroad. We have also invested in a biotechnology startup called String Bio. It basically uses ammonia and methane to have fermentation-based products targeting agriculture, animal and human nutrition. They have developed and ready to market several biosimilar products. As we had mentioned last time, our digital transformation journey continues. We have made significant steps in the last one year with the adoption of business intelligence dashboards, Salesforce productivity tools, and robotic process automation in our manufacturing and our supply chain, which has helped to improve process efficiency and forecasting capability within the organization. We are witnessing adequate monsoon coverage and high reservoir levels, which will augur well for not just Kharif, but also for Rabi in our key operating markets. We are ensuring timely availability of agri inputs to the farm community through our vast dealer network and our retail network. Coromandel with its diversified presence in agriculture value chain will continue to provide balanced nutrition and integrated pest management solution to maximize farm productivity. I'll now hand over to Jayashree Satagopan to talk about company financials. Over to you, Jayashree Satagopan. Thank you. Thank you, Sameer Goel. I will now proceed to provide an update on the company financials. As far as the turnover is concerned, the company recorded a consolidated total income of INR 5,783 crore during the quarter, vis-à-vis INR 3,686 crore in the same quarter prior year. This registered a growth of 57% for this quarter. Nutrients and Allied Businesses contributed to 89% share. The remaining 11% comes from the crop protection business for the quarter. Subsidy versus non-subsidy share of business stands at 83% and 17% during the quarter. Previous year it was 76% and 24%. The consolidated EBITDA for the quarter INR 87 crore against INR 486 crore of last year. Ma'am, I would request you to again repeat what you said just now, a line, as your voice was breaking in the middle. Okay. On the profitability front, the consolidated EBITDA for the quarter was INR 687 crore against INR 486 crore of the last year. In terms of subsidy, non-subsidy, the shares stand at 78% and 22% during this quarter. During the previous year, it was 75% and 25%, respectively. The net profit after tax for the quarter was INR 499 crore. This is in comparison to INR 338 crore for the corresponding quarter last year. As regards subsidy, during the first quarter, the company received INR 136 crore towards subsidy receipts. The comparative figures of last year were INR 493 crore. Subsidy outstanding as on 30th June 2022 was at INR 2,731 crore versus INR 1,149 crore during the previous year. During the quarter, the company earned net interest income. This income excludes the Ind AS adjustments of INR 22 crore, vis-à-vis the interest income of INR 12 crore in the same quarter last year. The company has maintained its surplus funds in both approved securities, and these have been earmarked for specific growth-related investments, both organic and inorganic. Short-term borrowings have been used to primarily fund the working capital requirement. On the foreign exchange front, as we have all seen, the rupee remained volatile and was in a very broad range of 75.95-78.96 to a dollar. Coromandel continued to follow a conservative approach in line with the hedging policy that has been approved by the board, and the Forex exposures have been covered and the portfolio managed well. The company has got a reaffirmation of the credit rating from CRISIL and ICRA during the quarter. We thank you all for your interest in Coromandel and joining us on our call today. We can now open the session for question and answer. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tarang Agrawal from Old Bridge Capital Management. Please go ahead. Hello, good afternoon, and congratulations for a strong set of results. Hi, Tarang. Three questions from me. One, would it be fair to presume that a material amount of your profitability this quarter could be attributed to your phosphoric acid integration and your sourcing of rock phosphates? Actually, you have questions. Okay. The second is, you know, if I can get a broad split of the inventory as on 30th June 2022, between finished goods and rock. The last, you know, what would be the inventory that may have been dispatched before the year-end and which was probably in channel at the end of April? Great. Thanks, Tarang, for your questions. The margins for the quarter obviously has been contributed by the backward integration strategy of Coromandel. The PA plant one and two at Vizag have been fully operational. Currently the team is also working on additional debottlenecking if possible. While PA integration or the backward integration has given us the fillip to the margin, it is also to be noted that there are other areas where the company continues its focus, like smart sourcing, where the sourcing or the commercial team have looked into various sources of raw materials and ensured timely availability. I think the flexibility that the manufacturing teams have exhibited in processing different grades of rocks and acids has also positively contributed to the margin. This is as far as fertilizers is concerned. While we covered a portion of the manufacturing and the commercial capabilities of the company, equally we are seeing that the logistics and the supply chain team over the last couple of years on reducing the freight-related costs. You would see that despite the increase in the freight rates that we are seeing globally, we've been able to sort of manage it quite well. It's a combination of all these, including tightening up on the fixed costs. All of those have sort of helped in quarter one. I mean, we're also aided by good performance by crop, you know, non-subsidy business, specialty nutrition, which continues to do very well organic and also crop protection. All this is adding to the profitability of the company. Thanks, Sameer. I do not have immediately at hand the inventory value between FG and rock. The channel inventory. Do you have the numbers? The channel inventory numbers, I think we can. We can give it to you. We can give it to you offline. Yeah. Okay. The position is much more better than, you know, In the past years. In the past years. You know, the channel inventory is there, and we are waiting for the season to start. That's going to be better. Yeah. Correct. Market fall in end of March. Correct. Just last follow-up, I mean, in crop protection, did we see volume growth in Q1 FY 2023 versus Q1 FY 2022? Among different categories that we had, in few of them we have seen a volume growth. Different businesses like domestic and the B2B business, Indian business volume growth. There were some pricing pressure on the export market. Correct. Okay. That's helpful. Thank you, and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to answer questions from all the participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Ltd. Please go ahead. Hi. Congratulations, Sameer and Jayashree, on good set of numbers. Sameer, my first question is related to the change in the mix of the business. In FY 2021, our DAP, and normally in Q1 DAP used to remain very high vis-à-vis complex. Then last year and this year we have seen that DAP volume has been substantial, almost 50% almost two years back. I mean, can you give little more color? And is that also helping us in improving our EBITDA per ton? And all the benefit of this backward integration that you spoke about, sulfuric, then processing phosphate mine, and when that will start really playing out and some color, how much, what additional contribution per ton we can have? I'll just answer your first part of the thing on the complex. As you know, you know, we are a balanced nutrition provider. DAP is mainly around phosphate and also on nitrogen, which is in a way not required for the crop and mainly it's a product for the northern, central market where the demand is. Even there, as part of our foray and also as part of government foray to reduce the dependence on, you know, imported DAP, they are promoting now Single Super Phosphate, which used to be the fertilizer of choice. So the government is also promoting because Single Super Phosphate, most of the raw materials are available within the country. That's the reason we have seen a spurt in the demand of Single Super Phosphate, including promotion. As far as we are concerned, we just don't sell Single Super Phosphate. We have a Single Super Phosphate plus, which also has other beneficial materials for the crop and hence the farmer. That's been a foray that we will continue to, you know, focus, which is what our market demand is on the NPK. The one thing for a slight surge in demand for DAP has been the pricing cap on DAP, which the government wants to do to ensure affordability to the farmers, particularly in west where there are more price-sensitive markets. That's the reason why you see the quarter one sales of DAP going up, when for us our season will begin now in quarter two. In NPK, our market share has also improved. The second question you want to ask? Yeah. The second question was in terms of what could be the EBITDA per ton margin, in terms of guidance that you wanted to understand from us. I think it will be in the same range of INR 4,000-INR 4,500 per metric ton, at least recurrently, right? Because there are several headwinds that the industry is facing that the company is facing. We have seen the raw material prices have been very high. Of late we are seeing some sort of softening happening, which is primarily for urea as well as sulfur. Phosphoric is still high. Ammonia is going even higher. So there are quite a bit of headwinds at this point in time. Our backward integration will help to offset some of these. Having said that, 4,000-4,500 is something that we can definitely look at for the year. As there is any opportunity, the company will try to see how we can maximize and improve it further. Sorry, Jayashree. My question was, I mean, the backward integration, other process that sulfuric acid and acquiring a rock phosphate mine and when that will start playing out and how much additional contribution can come from there? Oh, okay. Sorry. Now, on the sulfuric acid, it is going to be commissioned in next year around the second quarter. The plant has been progressing well. Correct. The work going on full steam. As we indicated earlier, the main purpose of setting up the sulfuric acid plant is to ensure supply security, because today we are importing. We can't have that high level of import of sulfuric acid into the country. Coromandel is the largest importer of sulfuric acid in the country. Therefore, it is more of a supply chain security. Once we have part of the acid coming from our own plant, it will also help us better in negotiation. That's the way I would look at sulfuric acid plant that is coming up in Vizag. On the BMCC mine, as I was mentioning in the last conference, it will take about three years for us to get the maximum throughput from the mine. They have started commercial production. We have received on them. There is good amount of work that is required to ensure there is scale-up happening so that we can get the maximum out of it. The cost of mining also will be determined during this period. Based on that, definitely we will get a benefit. More importantly, having our own source of getting rock will also help us to negotiate better with the other rock suppliers. Okay. Thank you and all the best. Thanks, Bharat Sheth. Thank you. The next question is from the line of Vidit from IIFL Securities. Please go ahead. Hi. Good evening, afternoon, and thanks for taking my question. My first question was on the EBITDA margins of the nutrient and allied business. You know, there have been companies that have reported numbers who've made, you know, one-time benefits from inventory that is sold post-March at a higher subsidy realization on that inventory. Would you be able to quantify what the number for Coromandel would be in this quarter? And has that driven you know, such a high performance in the business? When, in terms of the additional subsidy that comes in from the government on the opening inventory, this primarily happens when there is a point of sale or the final liquidation that happens in the retailers to the farmers. Moreover, during the quarter, as per the results, the subsidy disbursement from the government has been very low. We received somewhere close to about INR 136 crore of subsidy only during first quarter. The revenue recognition principles is primarily based on when the sale happened, right? The sales for all of this will happen last year. The subsidy is recognized based on last year rate. As and when the cost acknowledgment happens, and more importantly, the subsidy receipts are received from the government, then there could be a benefit that will come on account of the channel inventory. Okay. Partly it has come, partly it will come in Q2, if I were to respond to you. Okay, understood. This new MPP plant for which work has begun at Ankleshwar, what is the expected CapEx? Can you just shed some light on over what period and what the revenue potential could possibly be? What we are doing in Ankleshwar is we're also repurposing some of our existing plants. This multipurpose plant for three fungicides would be operational from the fourth quarter of this financial year. For this year we are expecting between INR 20 crore and INR 30 crore of technical sales from this multipurpose plant. The CapEx is around INR 25 crore at this point in time. Okay, fine. This is for this year itself, and are you expanding further in 2024 as well, FY 2024/2025? I've given you the revenue numbers for this year. Okay. As we go along, full year basis, the numbers are expected to be higher. There is also opportunity to formulate and sell in the domestic market. This is clearly for the current financial year. Okay. Understood. Thanks so much for taking my questions. Thank you. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Thanks for your time. Wanted to understand firstly, on the pricing that you mentioned on DAP and other NPKs, which is causing a distortion in the demand structure between DAP and NPK. Given this backdrop, for the rest of kharif and let's say even for the Rabi season, would we start switching more towards the production towards these products or we'll continue to only be on NPK side? Because generally we have only 2%-3% of DAPs which we manufacture. Our focus will be on NPK and there will be. Because that's the demand which is there in the market. One of the things which we'll be doing is to promote the low P grades, which the farmer wants. That's something which we'll continue, which are also attractive. Some of the grades which are high P, you know, as and when the demand improves, we'll be producing that. But the strategy will be towards NPK. Got it. The second question is, in the past you've mentioned that if you want to consider further capacity expansion in the fertilizer business, we would probably keep looking for more sources internationally and probably backward integrate. In terms of where you want to be, have you almost reached there in terms of what we want to achieve? Can we expect some kind of a further capacity expansion in the fertilizer? Also if there is any large program that you have in the agrochemical, if you could help us understand. Essentially because we have a substantial cash that we have built in. Just trying to understand that, in the next couple of years should we expect a large deployment in both the businesses? Yeah. Vishnu, the focus currently is in terms of three things. One, completing the backward integration at Vizag. We've completed the PA, now we have to get SA also completed timely. Second, we are looking at the investment in BMCC, which is our mine in Senegal, and getting the mines fully operationalized, because that is going to take some time. We are new into the mining business. We have strong partner there. We have to see how the mines are fully used up and we're able to get the rock supply as we have contemplated. Plus, we have two JVs with Foskor. There is enough to be done at these two entities to ensure that they are fully operational. For some reason or the other, they have been facing some challenges, either due to availability of raw material or some social unrest issues, say for instance in Tunisia. The focus is to have our people there help these JVs turn around. These are the top three priorities at this point in time for the fertilizer business. Having said that, there is some de-bottlenecking opportunities that have been identified which could definitely add to our capacity at both Kakinada and Vizag. I believe this can come all the way up to 2 lakh tons-4 lakh tons of finished goods. On the Single Super Phosphate, we have seen an additional demand that has been coming in. There we have expanded our capacity, moved more into granulation. The new leach facility at Ennore is fully operational now. At Pali we have revived the plant which was shut down for almost five years. Production has commenced last month. We are also contemplating what needs to be done at our plant at Rangiri. The strategy is to see how we can provide more of Single Super Phosphate with lot of enhanced nutrition in it. Very recently, our R&D teams have also come up with a new variety of SSP where it can combine the base SSP with, say, for instance, nitrogen, which can be very helpful for the soil. That is also being contemplated. That's the plan as far as fertilizer is concerned. On the crop protection front, MPP has been initiated as per our earlier plan, and it should get completed in the fourth quarter of this year and be fully operational. The business is also looking into another MPP, which would be mostly for herbicides. They are currently working out the proposal. Their investment could be INR 200 crore-INR 300 crore. That's something that they're working on. Apart from this, there is also plans to see how we can expand our biopesticides, where we are currently getting new seed and processing them for other content. We are looking at not just seeds, but also fruits and also sourcing from different markets. There is likely to be capacity expansion and also some footprint expansion. These are the current areas that we are working on. Also to add to what Jayashree said on our specialty nutrition and also organic, the whole aim is to, you know, strategically ensure that relying on trading, which mainly comes from and importing the products from China, we are looking at how we can get the full value by. Those plans are already in place. We have also been put up a liquid fertilizer pilot plant. The initial results are very good. We'll be setting up some new technology products soon, as and when the trials are completed. We watch this space. Got it. Thanks. One final, if I may, squeeze. If you could just give us the inventory gain, if any, this quarter. Inventory gain I think you answered them. Yeah. Okay, ma'am. Thank you. We can take it offline, but not really clear. Okay, sir. Thanks. Thank you. The next question is from the line of Resham Jain from DSP Investment Managers. Please go ahead. Sorry. Just two data points. Excuse me. Please me. Please give these two numbers, claims pending to be acknowledged and acknowledged but pending claims. Just two data points. Acknowledged and pending claims. We couldn't get the- Yes, ma'am. I hope you're well. Sorry. Yeah. Just two data points. One is claims pending to be acknowledged, and another is acknowledged, but pending to be received. This is on the subsidy side? Yes, subsidy side. Okay. Our channel stock as of the subsidy received in the channel stock end of June was around INR 2,000 crore. Because this is yet to be acknowledged. On the claims that we have made and pending with the government is about, I'd say close to INR 1,500 crore-INR 1,600 crore. Okay. Also, ma'am, on the CapEx side, what is the total planned CapEx for this year, FY 2023? FY 2023, we are expecting close to about INR 800 crore-INR 900 crore. Okay. Is it possible to give a break-up between fertilizer and others? In the region of about. Ma'am, could you please repeat? Your voice was breaking. Fertilizer would be in the region of about 600 crore-650 crore. This includes the Satwari captive plant. It includes the work that's happening in all the SSP plants, and then the normal capital expenditure that happens on a year-on-year basis. There is a CapEx that is being planned for crop protection chemicals. This is about INR 150-200 odd crore. Okay. As the other participant also was asking on the new capacity addition on the fertilizer space itself, because what we are seeing since last 2, 3 years, maybe 4 years, is the amount of cash generation versus the amount being deployed in the business. There has been a continuous cash generation, which is in a way impacting our return ratios. If you can just highlight, because this year also the cash generation versus your CapEx seems to be you will still generate free cash flows. You already have a large amount of cash sitting on books. If you can just explain what is the thought process on the capital allocation side? Yeah, Resham Jain. As I was responding to Vishnu Kumar, the current thought process is to strengthen what we have. Until we have further silos for our fertilizer bulk business, I don't think it would make good economic sense to add capacity. At the same time, big bottlenecking efforts are going on. It is not only for the granulated products, but it is also for our phosphate plant. As I mentioned, that could release about 2-4 lakh tons of additional capacity. That is what is on the anvil at this point in time. Having said that, the future of our fertilizer is also going to be in more novel products. It could be liquid fertilizer, for instance, or nano fertilizer or coated fertilizer. That is where our R&D team is currently focusing on. Last year, we had set up a liquid fertilizer plant on a small scale, and we have had couple of products which have been introduced out of it. We are currently undergoing testing for few other products. As they get approved through the FCO, we should be in a position to see how we can scale up some of these liquid fertilizer plants, because these are going to be the future products as far as we can see it going. Having said that, on the crop protection, there are plans to set up couple more entities. As we alluded in the past, we are also actively looking for any inorganic opportunities which would be complementary to our business. We evaluated couple of them, doesn't look very interesting. We are looking for opportunities in the bio space, not necessarily in biopesticides, but overall as a bioproduct portfolio. These are some areas where we are looking at deployment of our capital. As we mentioned in the past, from a capital allocation, there would be a bias for our growth engines, which would be the non-fertilizer businesses, mainly crop protection, bio, specialty nutrients. I hope. Yeah, yeah. That covers your question. Yeah. Thank you. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah. Good afternoon, Sameer Goel. Good afternoon, ma'am. Thanks for taking my questions. Just a couple. One was hoping to hear your thoughts on the prospects of these nano products that are now hitting the markets. You alluded to it a brief while ago. You know, the government seems to have very big plans for Nano Urea. They're talking about potentially using it to replace 20 million tons of manufactured urea in India. Do you see these products getting a very large scale of adoption from the farming community, not just in urea, but possibly even in DAP? And is this an opportunity or could it also be a threat for established large companies? I think a very good question, Abhijit Akella. It's early days for nano and particularly what has been introduced in the market. Obviously the trials are going on. It also requires conceptually to the farmers. Last time we have built our own through our R&D network, research and development network, we have built up our own Nano DAP. This is as part of the registration process we have given to the government. Now it's getting evaluated there. The results which we have done in the universities now look promising, particularly in areas where you know there's extensive use and irrational use of both urea and phosphate as such. We do not see this as any threat. This is not just nano and like, Abhijit Akela, you are alluding to. We are looking at coated fertilizers. We are looking at slow-release fertilizers, which we have already done successfully in our specialty business. The whole idea is to have more crop per gram or more crop per drop. This is what our liquid fertilizer is also doing. Now, by planting, and we have a full agronomist team which works with the farmers. The way it looks like is, you know, the farmers think it's only bulk fertilizer and mainly given through, and I come from the agriculture sector too, but mainly given through the roots, which helps the plant. We have seen with our products and especially with the new products which we are launching, that when you do a foliar spray, and I'm a practicing farmer myself, the absorption is almost as compared to even in the roots, it's almost at 70%-80%. For example, just as a case in point is in zinc, we used to give what is called, zinc sulfate, to the soil as a micronutrient. The absorption, which is, you know, widely used in the industry, the absorption is only 5%. While our Novozymes and our products, the absorption when we give it for foliar applications, almost 250. That's what Jayashree was alluding to, is the new generation products which will help us to get the next level of intervention. You know, this includes, of course, integrated farmer practice. But what it requires is to change the concept of how the farmers look at things. There we are also working on application technology. That's why we mentioned in our thing that we are looking at how we can use drone for spraying both our crop protection and also our specialty nutrition, and the trials have been quite successful. We are going to scale it up and get into looking at doing investments on that count. With our Yanmar products will be used rice transplanters. We have developed imported fertilizers which are biodegradable so that they can grow into the rice transplanter, which is the application will be right next to the roots. Again, the absorption is very, very high. That is something which the, you know, Indian agriculture or fertilizer has to move. Like I said, is that we have the largest range of grades. We have now about grades between six crop points. Because, you know, it's like any human nutrition. You don't. Each person doesn't require the same type of grade. The basic needs are there, but then it is the secondary and the micronutrients which will make all the difference. That is something which we are working towards with our R&D team. Recently, we are going to even get into urban gardening, specialized grades have been developed into that. We have grades now which are crop wise, to help to get better productivity for crops. I hope that answers your question. We can also take it offline. Sure. No, that's very helpful. Thank you so much, Sameer Goel. The other. Sorry. Sorry, can I just finish? Yeah. Thank you so much. The other one was just with regard to the investments in the couple of startups that we have made. I was just hoping to hear your thoughts on, you know, the opportunities you see for these, you know, fledgling companies and what excites you about their, prospects. Thanks. Right. The way we have done it is we have set up an investment arm called Dare Investments Limited to basically look at startups because it requires a totally different evaluation. We are very pleased to invest in two such startup companies to begin with. One of the companies which we have invested in is into energy, better energy providing and, you know, even use of what is called alternative energy, you know, because they basically use solar energy. They have developed what is called solar power cooling systems, which are highly transferable. They are both in India and can be exported also. Very low-cost solution for the farmer, but technologically superior. Now, this will definitely help in post-harvest, which we have seen, and we are already looking at, you know, putting these up in our retail network to help the farmers, especially those who have perishable crops or even into flowers and other things. At the same time, there's an opportunity for these to be used in, our new collection, which we will do from the forest, so that the shelf life of the product by the farmer reaches the client is maintained. So watch this space. These are technologically superior products. Same thing is the thing with String Bio, which are into fermentation technology, which is what we do with the bioproducts. The good thing is they use ammonia and also methane to produce, products for agriculture but also for human and animal consumption. Some of these products are very superior. They have international tie-ups also. Definitely on the agri space, we are looking at how we can partner with them to help them to market their products. Watch this space. There will be few more which will be doing soon. Yes, sir. Thank you so much. Wish you all the best. Thank you. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah. Hi. Thank you, sir, and thanks for the opportunity. You know, first question on the crop protection side. You did mention that, you know, slightly lower realization on the export front, pulling down the overall revenue growth here. If you can, broadly highlight what could be the domestic growth. Where I'm coming from is, you know, we had done a good amount of, you know, new product launches, both contribution as well as in nascent, as well expanded the distribution network. Is it just a quarterly phenomenon probably, you know, because of the delayed rains or, you know, how should one look at it? Okay, Ankur. As far as the export is concerned, there were some pricing pressures on nitrogen. What we have done is two things. We said we will not be reducing our margins and selling in some markets. That has led to a reduction in our volume in export markets. Having said that, the domestic B2B has been robust. More importantly, the formulation. The new products that we have been introducing in the last couple of years have actually helped gain a good amount of momentum in the domestic market. This year also four new products have been launched, and that is actually helping us in achieving the volumes in the domestic market. Because quarter, the new product introductions are happening only in June, we expect a good traction for it in the coming pre-season. That should help fill up the volume growth for domestic formulation. Sure, ma'am. From a full year perspective, you know, our earlier thoughts of maybe a high teen sort of a growth here, is that thought intact despite this, you know, slightly slower. Yeah, yeah. That is intact. That's intact. I should also tell you that as we have seen pressures in margins and sizing, this also happened because there is a steep cost increase that happened for the raw materials, especially CO2 and MIDA. We are seeing those prices cooling. The team has proactively worked with the customers globally and they've taken some pricing actions in the market. So all of this should help as we go along. The new technical plants that are going to come up in Ankleshwar should also contribute additional, maybe, revenue during the year. Our estimate in terms of high teen growth holds good for CPC. I don't see a challenge there. One of the things we are leveraging is also now is to leverage our distribution network in fertilizer and specialty nutrition, to get, you know, gain further traction for the crop protection business, especially in the domestic market. Sure. Which is where we are sort of, you know, guiding a strong growth there, aided by the distribution network. Yeah. Absolutely. At the same time, we have placed people in the markets in export markets, and they are building customers and also crop health solutions for those markets so that we reduce our dependence on the trade and own the brands also. It takes some time, but that's something which is there so that we are not dependent on customers who then can switch, but create our own brands in the export markets. Sure, sir. Second bit on the fertilizer side. I'm sorry I'm harping again on the same bit. Where I'm coming from is your guidance of around INR 4,000-INR 4,500 EBITDA on a per ton basis. Two questions there. One, as I understand in the initial comments, we did highlight, you know, the first and second plant full benefit coming in this quarter on the phosphate side, as well as some sourcing-led benefits which were in this quarter. Were these benefits, especially on the sourcing side, one time in nature, and hence we are still maintaining our earlier guidance of INR 4,000-INR 4,500? Because if I do my back of the numbers workings, you know, our margins, even if I adjust for the inventory gains, is still much higher versus what we do last year, on a year-on-year basis. Just wanted your thoughts there. Yeah, Ankur, you're right in a way. Given lot of uncertainties in the way the RM prices are behaving, right? We're not too sure how the second half of the year is going to be. Added to it, the NBS rate that has been announced by the government is only for the current season. If there's any cooling in raw material prices, we will also see corresponding reduction in the NBS rates and the subsidy realization. Factoring in all of this for the full year, I think this INR 4,000 or INR 4,500 would be a good estimate. As I mentioned earlier, the intent is to see how to grow it, and that's where all these measures in terms of backward integration, cost optimization, digitization, automation, everything comes into play. There could be definitely upside, but at this point in time it is a cautious approach because there are too many unknowns. We never expected the raw material prices to go this crazy last year. It continues to be high except for a couple of commodities wherein we are seeing that easing has happened. Still with the Russia-Ukraine crisis going on, we don't know how many of these are going to be for the rest of the year. Therefore, I think it is prudent to assume $2,500 at this point in time with definitely opportunities that could be there for further margin expansion. Sure, ma'am. That's helpful. Just one clarification, if I may. You know, Sameer sir did highlight it towards, you know, the nano fertilizers as well as the pilot that we are doing on the liquid fertilizer front. Just trying to understand from a timeline perspective, is it something that one should, you know, look forward to maybe in the next 1-2 years, or it is more medium-term or longer term thought or, you know, investment opportunity there? The liquid fertilizer plant is already over. We have introduced this product in the market and the traction is really good. And it's a multipurpose plant, so even nano can be made there. The whole idea is that, you know, as we find traction, we will then scale it up on that front. When we talk about it is happening now. As far as the nano is concerned, we have to find the application and making further approvals for that. But it's a different way of, you know, of doing nano as compared to what that goes to. Sure, sir. That's helpful. How much time does it take to set up a liquid fertilizer? Theoretically, if you want to scale this up to a bigger plant. We set it up, you know, we did the pilots and that was the time. The technology team did very well in setting it up within 9 months period. I think it's a question of how much scaling up you want to do. We know the scale we can take. It's not so something which is very difficult. Sure. Now that we know the technology, and we have proven that we can produce very good product from it. Yeah. The first pilot plant that we set up for liquid fertilizer took us less than a year. Less than nine months, yeah. About nine months or so. Set up on a modular basis. As we get a new product approved, we don't see it as a challenge. Okay, great, ma'am. That's good to hear. Thank you and all the best. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Hi. So firstly, thanks everyone for joining in. Appreciate your interest. It is a VUCA world, but I think what is very helpful is that the monsoons have so far, and we still have to wait for the August month, but so far has been very good in fact, with anything but excess. This will also help the reservoir and also flow of water through the canal and also will help the RMP. I think Coromandel with the government is meeting the requirement firstly of the country to make fertilizer and agri-input products available to the farmers in the crisis which is happening. Got to do with the El Niño and the war which is there. There our procurement and our manufacturing team have done exceedingly well to make availability, which is the key to the farmers. The good thing is, with our diverse portfolio, and also with crop-specific products, we are able to then manage on how to meet the demand and the needs of the farmers to promote balanced nutrition. The investment which we have done, in backward integration, like we see, is paying dividends to that extent so that we are not dependent. Overall, I would like to compliment everyone, you know, in a crisis like we are globally. I think India and the government, across whether it's the center or the states, have done exceedingly well not to have the type of food crisis which our neighbors are facing. Just compliment to everyone. I think as Indians we should feel very proud of it in our 73rd year of independence. All the very best. Thank you. Thank you. On behalf of PhillipCapital India Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.