Ladies and gentlemen, good day and welcome to the Coromandel International Limited Q4 FY 2023 earnings conference call, hosted by PhillipCapital (India) Pvt. Ltd. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, please signal an operator by dialing zero star then zero on your touchtone phone. This conference is being recorded. I now hand the conference over to Mr. Harmish Desai from PhillipCapital (India) Pvt. Ltd. Thank you, and over to you, sir. Thank you, Robin. Good afternoon, and welcome to the 4th quarter and full year FY 2023 earnings call of Coromandel International Limited, hosted by PhillipCapital. From the management, we have Mrs. Jayashree Satagopan, Chief Financial Officer, Mr. S. Sankarasubramanian, Executive Director, Nutrients, Dr. Raghuram Devarakonda, Executive Director, CPC, Bio and Retail Business, and Mr. Shanky Bhola, DGM, Finance. I would like to thank the management for giving us the opportunity to host this call. We'll begin the call with opening remarks from the management, post which we'll have a Q&A session. Thank you. Good afternoon, everyone. Thanks, Harmish, for organizing the conference call. I have Sankar who will join me in responding to your queries. Let me begin by giving an overview on the agricultural environment, followed by the components, and then we will have the Q&A session. As far as Indian agriculture is concerned, the country witnessed above normal rainfall during the last season. Monsoon for this year is also expected to be normal as per IMD with a 96% forecast on the rainfall. However, there are recent indications of El Niño for this year. Central and northwestern regions may witness below normal rainfall. Overall, with the reservoir levels at around 98% of last year's and good soil moisture conditions, agricultural growth is expected to be stable. Fertilizer industry performance, global supply of key commodities improved during this year. We continue to witness softening of prices of major raw materials. Domestically, the fertilizer demand has remained strong, supported by good monsoon and favorable policy measures from the government. Government of India during the year approved Nano Urea and Nano DAP for the benefit of farmers in making the country self-reliant over a period of time. For the industry volume, DAP and complex fertilizers primary sales was up by 62%. Currently, it is 46.4 lakh metric ton vis-à-vis 28.7 lakh metric ton last year, with higher imported DAP sales. DAP and complex fertilizer industry consumption indicated by port sales was marginally up by 2%. Raw material prices continue to witness a downward trend. On an annual, DAP and complex fertilizer industry primary sales volume was up by 23%. Port sales volume was marginally down by 1%. As far as Coromandel's performance is concerned, during the financial year 2022-2023, Coromandel delivered over registering a strong growth in turnover and profitability across its five portfolio of nutrients, crop protection, bioproducts and retail business. Record volume sales in NPKs and high subsidy rates in the nutrients business primarily led to the increase in revenue during the year. In crop protection business, domestic formulation and B2B business grew during the year, which was partly offset with the headwind faced in the export markets. Coromandel ensured that timely inputs were made available to the farmers in key operating markets and promoted the use of balanced nutrition and integrated pest management to help rejuvenate the soil and farm productivity. Company's nutrient segment performance. Nutrient and allied business segment revenue increased by 33% during the quarter and 63% during the year. The company's fertilizer products registered a good growth during the year, both in terms of turnover and profitability. On the sales front, the business registered sales volume of 6.25 lakh metric tons during the quarter, which is 5% higher than the last year. For full year, DAP and complex volume was at 36.45 lakh metric tons vis-à-vis 33.22 lakh metric tons, which is 10% above last year. Manufacturing DAP, complex volume was lower by 1% for the quarter and higher by 10% for full year. Company's market share in Q4, including NPK and DAP, was at 13.5%, and for the full year at 15.4%. The market share for complex fertilizers grew during the full year to 26.7% vis-à-vis 26.3% last year. As far as SSP is concerned, Q4 sales was at 1.9 lakh metric tons with a growth of 19% over last year. On a full year basis, SSP business clocked 8.1 lakh metric tons versus 7.5 lakh metric tons compared to last year. Market share went up to 14%. Last year it was 40%. Our commercial teams have continued to ensure timely availability of raw materials to enable continuous production at the manufacturing plant by staying abreast of the latest developments in the global markets. During this quarter, our DAP and complex fertilizer plants operated at good capacity levels and produced 6.46 lakhs metric tons of fertilizer. On a full year basis, plants operated over 90% of capacity and had a record production of 32.91 lakh metric tons of fertilizer. Phosphate production during the quarter was at 0.67 lakh metric tons. For the full year, it was at 4.1 lakh metric tons. During the year, Coromandel strengthened its backbone integration capabilities in the nutrients business by acquiring 45% shareholding in rock phosphate mining company in Senegal. Major capital expenditure projects like the sulfuric acid plant and the desalination plant are progressing well as per the schedule. Company continued its developing new products via the real new product, Nano DAP, which aims to improve nutrient lower water consumption and minimize environmental on the prevention plant to launch the product in the second half of we will continue to promote balanced nutrition and support the farming community. On the crop protection side, the business registered a growth of 11% in revenue for the quarter and 5% on year-to-date basis. The cost lag effect and price-related challenges in macros were the cross for our export business. A new pre-emerging herbicide, Claro, was launched here. The business of core products have been introduced here in India. The R&D registration team, they are working to products to be launched in the coming year. The business is further accessing registrations in the global market with collaboration with key-to-be customer. Multipurpose plant at Amreli for manufacturing technicals have been commissioned, and two products have been commercially. Business has purchased 50 acres of land lease for its greenfield plant. On the CapEx front, company announced INR 1,000 crore where it intends to invest in new multipurpose plant. Also, it is looking to mind cast structure to foray into adjacent fields like CDMO and specialty chemicals. On the bio front, it is working on product offerings. Azamax, an insecticide. On the manufacturing front, Bio business is under implementation stage with system restoration and concentration plants. The retail store, where we are focusing on providing all around agri-solutions including products, farm advisory and mechanization services. The business launched a new e-commerce platform and a very good response from the end customer. Retail business has improved its operation efficiencies and has leveraged technology farmers. In Q4, 9.7% of stores were profitable as on high-margin products and operated with negative working capital. Company continues to promote ag-tech solutions to and has tied in coalitions through the retail network. It further plans to scale up the drone applications after successful completion of pilot in its key operating markets. With that, let me take you through the company's financial performance. Turnover. Company recorded a consolidated total income of INR 5,523 crores during the quarter and INR 29,799 crores during the full year, vis-à-vis corresponding period, where the total income of INR 4,304 crores for the quarter and INR 19,255 crores for the full year. This represents a growth of 28% for the quarter and 55% on the full year. The reason is attributable to higher raw material prices, which have driven a higher MSP and high subsidy realization as far as the nutrient business is concerned. Nutrients and allied business contributed to 89% share and remaining 11% is from the crop protection business, for this quarter. For the full year, the ratio is at 91% and 9% respectively. Subsidy and non-subsidy share of the business stands at 84% and 16% for the quarter and 87% and 13% for full year. Profitability. Considering for the quarter INR 480 crores last year, and full year it was INR 2,159 crores. In terms of non-subsidy and the subsidy stands at 13% during this quarter and at 28% for full year. Subsidy was INR 19 crores during the quarter and INR 25 crores for the corresponding quarter last year. INR 2,013 crores for the full year against INR 1,528 crores last year. For subsidy, during the quarter, company received subsidy of INR 4,030 crores for full year subsidy billing amount of INR 477 crores. INR 7,777 crores. Interest. During the quarter, company earned interest income. This is excluding the in delay adjustment of INR 3.8 crores. This is the net income of INR 32.7 crores the same quarter last year. For the full year, net interest income earned is about INR 4.3 crores. During the year, the company had elevated working capital requirements, primarily due to the high raw material prices as well as higher subsidy outstanding from the government, which the company managed through taking suppliers and buyers line of credit. Coromandel maintains a surplus funds of approximately INR 3,000 crores in board approved securities, and these are earmarked for specific growth-related investments, apart from funding the capital expenditure program of the company. On a net basis, the company ended the year with a surplus of about INR 3,111 crores, including cash in hand. Credit rating. The company's balance sheet continues to be strong. During the quarter, Company's long-term credit rating by CRISIL has been upgraded from CRISIL AA+ to CRISIL AAA/Stable. The short-term debt rating continues to be at CRISIL A1+. The company's long-term credit rating by India Ratings and Research, a Fitch Group company, continue to be in the AAA/Stable and short-term rating at IND A1+. Forex. During Q4, INR traded in a broad range between INR 80.89- 82.96 crore. The company continued to follow a prudent conservative approach of hedging the Forex exposure, which has immensely helped in limiting the impact of currency fluctuations. Dividend. The board in its meeting held on 15th May 2023 has recommended a final dividend of INR 6 per share. Along with the interim dividend, which was declared and paid earlier, the total dividend for the year is INR 12 per share in line with the prior years. As Indian economy continues to progress well, healthy reservoir levels, good soil moisture conditions and a forecast of a normal monsoon, all these augur well for the Indian agriculture sector. As a leading agri solutions provider, Coromandel will continue to promote integrated farm practices and bring prosperity to the farming community. In terms of financial performance, it has been a great year, and we expect the momentum to continue in the coming years. Thank you for your interest in Coromandel and joining us in the conference call today. With this, we can open the session for question and answers, and we look forward to the interaction. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah, thanks for the opportunity. Ma'am, we had announced investments in crop protection and specialty chemicals a few weeks back. Any investment that we have freezed on the fertilizer side? What we shared with you, Prashant, is only part of the overall investments that we have for 2024 and 2025, specifically on crop protection and specialty chemicals, which is INR 1,000 crores. We also have investments planned for fertilizer, specialty nutrients, and the bioproducts for the company. Overall, for 2024, we have capital projects of about INR 2,000 crores that have been identified, which includes major capital expenditure, which includes some of the normal annual CapEx as well. For fertilizers, we have plans to set up the Nano DAP facility. There is capacity expansions and debottlenecking that is happening in the plants at Vizag and Kakinada. Apart from that, we are also looking at increasing the granulation capacity in our FSP plants. overall for the company, it's about close to INR 2,000 crore of CapEx. Out of INR 2,000 crore, around INR 1,000 crore could be for fertilizers? You'd say about INR 700- 800 crore would be for fertilizers. Yes. By when can we set up the granulation facility? The granulation facility, the granulation is for FSP. Okay. We have powder and, we have granulated FSP. We are looking at increasing the capacity of, for granulated FSP. On, the fertilizer front, we are working on several, actions, including use of, data analytics to see how we can improve the capacity for granulation within our existing facilities. If we are trying to do it in-house, would that expansion be of, say, more than 10% of the existing size? It depends. Currently, we are looking. There is some work that has already happened on Kakinada. Mm-hmm. Which includes a bit of debottlenecking and also using multiple raw material sources, which can actually help in throughput increase. We've seen some benefits flowing in FY 2023, and we expect it to accelerate during the year. Where we continue to work on debottlenecking and increasing the capacity in-house, depending on the market conditions, as we have maintained earlier, we will also look for opportunities to import. You may appreciate during the last year, most of the DAP that we sold in the market had come through our imports, because we were able to then purposefully use the facility for manufacturing the NPK, other NPK grades. Mm-hmm. We'll be looking into all these options to maximize on our capacity utilization. How are we placed on the channel inventory? Because the industry, I believe, is sitting on a higher side of the inventory. If you can just give an idea on our channel inventory position. Sankar, do you want to articulate? Channel inventory, industry has got a huge amount of stocks, DAP as well as NPK. Majority of these stocks are lying with importers who have contracted these volumes in the fourth quarter. As Coromandel, we focus more on manufacturing. Our imports are mainly to meet the demand as and when required. Our channel inventory is one of the lowest, and we continue to maintain that. We do not have any issue on the channel inventory. Okay. ma'am, lastly. Sorry to interrupt. We request you to please rejoin the queue for further questions. Ladies and gentlemen, we request you to please re-restrict your questions to two questions per participant. For follow-up questions, you may rejoin the queue. The next question comes from the line of Naushad Chaudhary from Aditya Birla. Please go ahead. Hi. Thanks, just extension on the previous question. In terms of the cash deployment, I understood you explained your plan for FY 2024, but looking at the cash flow, we have an existing surplus. Beyond FY 2024, what is the outlook? What are we planning and how are we planning to use this cash? Which part of the business would attract more investment? A good question, Naushad. Thanks. As we had indicated in the past, we are looking into opportunities to grow the business, both organically and inorganically, right? For the current year, as I was mentioning, there is about a INR 2,000 crore of capital expenditure that is being looked into. The cash flow might be during the year and spill over into next year. Having said that, we are also looking into further opportunities, depending on the attractiveness, the synergies and what it could do to Coromandel in a medium to long term. That exercise is on. So the intent is obviously to see how we deploy the funds into business for us to get a longer-term, sustainable, profitable growth in Coromandel. The management is focused and working on that aspect. Can we get into a little bit granularity, exactly which area we are looking into? You have talked about CDMO and speciality possibility, but if you can help us understand broadly, in which kind of chemistry we must be targeting and in which kind of end user industry we are looking at, and how would it sync to our existing competencies? See, some of these are very strategic in nature, as you'd appreciate. Last year, we looked into a BMCC investment, right? We were able to come and talk to you once we were more or less there. Similarly, there are multiple proposals that the company is looking into. There are growth, high growth opportunities like specialty chemicals and CDMO, which we've already spoken. Some investment is committed from the company. If there are interesting opportunities coming in these areas, definitely we will be looking into it. I request to hold this on until we come up with something where we can specifically come and talk to you about. All right. I'll come back in queue. Thank you so much. Thank you. Thank you. The next question comes from the line of Vivek Ramakrishnan from DSP Mutual Fund. Please go ahead. Good afternoon, ma'am, congrats on the triple A rating. My questions are on the debt levels in the company. This year, like you, rightly pointed out, because of increased government subsidies you've managed with, stretching creditors. The first question that I had is, are these creditors interest-bearing in any case or in any way, or there's no interest cost in it? The second thing is, given your large INR 2,000 crore CapEx plan, do you expect that the borrowing levels will go up in the current year? Or how do you see the ebb and flow of creditors versus debt levels? Thank you. Yeah. Thanks, Vivek. The elevated working capital requirements were met through extended credit terms. In some cases, while the supplier has sort of accommodated, in other cases where we have taken a loan through the bank, there is an interest component into it. As far as capital expenditure program of INR 2,000 crores is concerned, we intend to fund it internally through our existing resources. Over the last five years plus, we've not resorted to any long-term borrowings for capital expenditure. I think there is enough cash accruals that happens on a yearly basis. That will be then deployed in these investments. Okay, ma'am. Thanks. That's my only question. Thank you. Good luck. Thank you. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Thanks for the time, ma'am. Just on the NBS rates that you have taken, could you just help us understand what is the NB and the NPK rates that you have taken, and how we take, or what is the impact in the first quarter? Sorry, this quarter, the fourth quarter, how much impact you have taken? Vishnu, we have made an estimate on the rate based on the falling raw material prices. As you know, the RM prices have been coming down over the last few months, and we expect that the trend to continue. I do not currently have the rates right in front of me. These are best estimates that we have taken. And based on that, the adjustments for the quarter have been done. I would also like to indicate that, based on our interactions with the DOS, we expect the subsidy rates to be moderated on two days, 1st is of January and then on 31st, or 1st of April. There are two changes that are likely to happen. On the first January, it will have a double impact, one in terms of the subsidy intermittent, the other one is in terms of the channel inventory. Obviously for first April, there is a channel inventory impact that we summon. Appropriately, this has been considered and factored in. I do not have the exact rates in terms of my currency and rate. We can take it offline. For both January and April, both numbers have been already considered. No more, we should not expect anything in first quarter. As I said, we have made a judgment based on what would be the best possible rate. I do not see a reason for any major variation to come in first quarter. Understood. On the INR 1,000 crore investment in the chemical business, if you could just help us understand timelines of plant commissioning, what level of contracting are we there? Very recently, China has again started, we understand from multiple companies that they've started dumping a lot of products. Does it impact at least some part? Do we see some impact in our investment thesis on this side? Okay. Again, a very good question, Vishnu. Out of the INR 1,000 crores, the first and foremost, what we wanted to do was to also purchase additional land for our crop protection business. We had identified a 50-acre plot in Dahej in a very, very short term. The business has worked on, procured the land, and it is now ready. It's got registered as well. That has happened in the last one week. The registration got completed. Apart from this, there are three proposals that the business is working on. One is for a multipurpose plant, especially for the fungicide, which is which would be coming up at Ankleshwar. They have submitted the business proposal, and it is in the final stages of approval internally. The second large multipurpose plant is planned to be set up in Dahej, again, in our existing facility. That will also be on the fungicide front. The third one, which is relating to herbicides, is going to be set up in the newly acquired plot at Dahej. For all of this, the business has identified about 18 molecules which were off patent in the recent past. Three of them will come out of Ankleshwar, and two of them have already been commercialized in the last quarter. Now, as the business case gets developed, we also look into the global trends in terms of pricing, capacities, existing new capacities that are coming up in China and India. Accordingly, it gets factored in in the decision to invest. We go through a very thorough scrutiny before we put in our money in setting up these plants. Unlike in the past, the reason that we are doing a multipurpose plant is also to give the flexibility so that we are not stuck with one product. For instance, the Mancozeb plant is only doing Mancozeb, right? Whereas when we are looking into a plant for doing Azoxystrobin, Picoxystrobin and few other molecules, 5 molecules can be done out of a large multipurpose plant. It is to give the flexibility so that if there is a demand fluctuation or a price fluctuation, the business can accordingly tweak and produce. We feel quite comfortable with this approach. In terms of the project, each of the projects as they start is expected to take between 18-24 months to get completed. The first set of proposal has come and it is almost in the final stages. The others will come in during the year, get reviewed and approved. Any% contracted, I mean, or it's currently completely open or any contracting is done as of now for the capacity? This is not for CDMO. These are primarily technical plants. Understood. Got it. Thank you ma'am. For CFR registrations globally and in India. On the CDMO front, there has been interest from some of our innovators. They've come and visited our plants. We are making a very humble start in terms of getting an NDA signed and possibly looking at one or two smaller lots which can be given to them for approval. Raghu, would you want to add something? Yeah, I think that's fine. Thank you. The next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, good afternoon, thanks for the opportunity. Two, three questions from my side. One, your manufactured volumes grew by about 10% this year. I think it's got to do with the debottlenecking that happened in Kakinada and Vizag. How should we see the manufactured volumes from here on? Does the business have capacity to grow these volumes in the current year or two years from now? That's one. Second, for the crop protections for FY 2023, if you could give us a sense on the split between export of technicals, B2B domestic, and B2C formulation, how were these in FY 2022? The third, the INR 2,000 crore of CapEx that's being deployed, my sense is about INR 1,000 crore of Spec Chem, INR 700 - 800 crore of Fort, and the balance INR 200 - 300 crore. Will all of it be deployed in FY 2023? One. Second, in the other part, which is the INR 200 - 300 crore of remaining figure, what would that be in relation to? As far as the manufacturing volumes of fertilizer is concerned, there are two, three components that goes into it. One is the mix. There are certain products if you manufacture, the throughput could be lower compared to others, so we optimize the mix. The second thing is the debottlenecking that happens in the plants. The third is the raw materials that we use, which can also have an influence in the throughput. A combination of all of this, we achieved closer to a 10% improvement in the manufactured volume last year. Going forward, there's still loss that is happening at the plant. We expect a 6%- 10% improvement in the manufacturing volumes even in the coming year, and that should be possible. As I said, the company's conscious inquiry versus manufacturing, which has helped us in the last year, we are continuing to explore such options to see how we can manufacture products which can give us higher volume. As far as CTC is concerned, you were looking into the aggregate numbers for domestic formulation B2B and export. During the current year, our domestic formulation overall for this segment is about, you can say roughly about INR 70-odd crores. The remaining coming from domestic B2B and exports. Both of them are in similar range, about INR 70-odd crores with domestic B2B and the balance coming from exports. As we have mentioned in the commentary earlier, that we have seen a good growth in domestic formulation. B2B has seen some growth. Exports is where we faced some headwinds, mainly because of the prices of Mancozeb and similar molecules having issues in terms of more supply than demand and impact on raw material prices. Your third point was regarding the CapEx of about INR 2,000-odd crore. INR 1,000 crore goes into CTC, mainly for the multipurpose plants and using the existing infrastructure which required modifications for specialty chemicals and CDMO. We have a large chunk going into fertilizers and SSP and some amount that goes into bioproducts. That's how the entire INR 2,000 crore is split into. We expect this cash outflow to happen over a period of couple of years. As we place the order, some of these are going to be 18- 24 months in terms of time taken to complete the construction. At the same time, from last year projects where we are talking about a SAP 3 as well as a desalination plant which will be commissioned in July or August this year, we may see some cash outflow. All of these will be funded from our own internal accruals, and we're not expecting any borrowings. I hope this clarifies your questions. Yes, just one follow-up. What would be the current maintenance CapEx for your current manufacturing footprint? You can take about, INR 300-odd crores. Okay. Thank you. Thank you. The next question is from the line of Bharat Sheth from Quest Investment Advisors Private Limited. Please go ahead. Thanks for the opportunity and congratulations, Jayashree and team. Can you give little more color on this Nano DAP opportunity from two to three years perspective, how much CapEx we are doing and availability of input, whether again it's the same imported or it's domestically available? If you can give little more color. Yeah, I think this is a interesting question. As Sankar is in the call, I'm going to request Sankar to give a color on Nano DAP. Okay. This product we have just in the market. We are distributing to the farmers to get their firsthand experience of this product. Our field trials indicate, there's a possibility of 50% replacement of the current dosages in the various crops. The behavior of this product also varies from crop to crop. Crops with higher foliage, we have seen good response. In some crops like paddy and wheat, the response has been relatively muted. At this point of time, it's very difficult to see to what extent the demand will pick up because this needs to be adapted by the farmers. Our focus will be for the next six months to try this product with the farmers and take their inputs and make course correction in the product. Accordingly, our capacity will be moderated depending on the market response. As we see in the current year, we may have a difficulty for 400 bottle depending on the market response, so we will scale up the volumes. These investments are relatively small, and it's possible to make it, so we don't anticipate any challenge if the demand really picks up. this input I mean, input availability? There are no challenges in terms of raw material. We have dedicated process, and we have no challenge in securing those raw materials. Okay. Jaishree, one more question on this chemical side that we said that we'll be going for industrial chemical. Mm-hmm. Can you give little more sense on that? Yeah, definitely. I have Raghu with me, he can share some of these inputs. I can add subsequently to his comments. Thanks. Yeah. Some of our, you know, current products itself find use in specialty chemicals industry. That is our first phase so that we diversify our customer base. Subsequently, we plan to leverage our existing security infrastructure to make similar products, similar chemistries-based products for different target industries in the specialty chemical space. Finally, as Jaishree mentioned, as far as INR 1,000 crore investment, we are also identifying molecules for which we will be making specific investments to cater to the specialty chemicals sector. These are the three core phases in which we are looking at this opportunity, starting with our existing products itself. As is, we are capable in specialty chemicals. Is it possible to give little more color which industry are we targeting? I mean, as a user base. For example, paints and coatings. They use some fungicide. One example for you. Okay. Jaishree, color on that CapEx, industrial chemical. The overall CapEx is about INR 1,000 crores, which include multipurpose plant and some amount of CapEx which may be required to cater to the specialty chemical industry. Because as Raghu is mentioning, there are opportunities for the current intermediates that we are doing, which could cater to multiple segments. That's the low-hanging fruit that we want to first address. As we do it, the business is also working on further opportunities in several segments in the specialty chemicals area. They will be presenting in the next couple of months a very detailed business plan. What does it require further in terms of investments, returns? That once it is approved, may call for further investments also. I think it'll be better that, we can come back to you in terms of the better take on specialty chemicals, probably in the next, investor conference call or, a little later. Once we are internally cleared and reviewed the proposals for, the business in, much more in detail. Last questions on CPC side. See all supply chain headwinds are almost over. How do we now see the improvement in the profitability in the CPC business? In this business, you know, one is, as you rightly said, you know, the supply chain side. Also it depends on the agroclimatic conditions and pest incidence. There are several other external factors that we need to consider, you know, while, say, answering profitability questions. We are nimble enough to track these trends in the market. We make sure that, you know, our top line and bottom line are adequately addressed. There's significant progress being made in the area of improving efficiencies in our operations so that we, you know, protect ourselves to a greater extent from the vagaries of the external environment. I would say, you know, we are very well placed, because of the efficiency improvements and also our internal processes to respond to the market, you know, trends. It's just not the supply chain. Okay, thank you, and all the best. Thank you. Thank you. Thank you. The next question is from the line of Vidit from IIFL Securities. Please go ahead. Hi. Thanks for taking my question. Just I had the first question on the Nano DAP research as that we're doing. Do we think that, you know, how much of our, you know, volumes will be replaced by Nano DAP? Are we going to push a product by replacing our existing volumes? Are we going to build upon what we are already selling in the market? Secondly, in terms of, you know, EBITDA per ton that we have guided towards INR 5,500- 6,000 crore, does Nano DAP also, you know, bring in the similar levels of margin or is it significantly different from what we are doing right now? On the margin front, I think we will be in a very similar range, between last year, current year, current year and the coming year. I'm going to once again request Sankar to comment on the Nano DAP, the adoption, what do we see now in the light of what happened with Nano Urea that has been introduced and some of the trials that we have taken in Nano DAP. Over to you, Sankar. Yeah. Because of repetition, I will say we need to wait for the market response. Right now we have got a product, with the foliar application, we are targeting those states which has high import content of DAP. Basically, this is going to have a substitute for DAP. Adoption makes the difference. If there is a early adoption, if they find a replacement of 50% as we see, in our trial results and some of the, you know, city trials, we see that can be a potential replacement of 50%. Which means the high importer DAP consuming states can find better traction for this Nano DAP. Some farmers may take this as an add-on as well because it also helps in improving the yield. If people are habituated to DAP application at the basal stage, at the soil application, this comes at a later stage. We are not sure at this point that we could say definitely whether it will be an add-on or a substitution. It depends on the results what they experience because it goes with the crop agroclimatic conditions, moisture in the soil and the timing of application and the combination they do with each other and the spraying practices. We need to wait and see. It's too premature to comment whether this can replace DAP immediately. We do see a potential in the long run, at least in this period of five to seven years. 20% replacement seem to be a definite possibility. These are all, empirical data point we have, but we need to wait and see how the farmer adopts on the ground. Okay. got it. Just out of the FY 2023 sales, how much would be the imported DAP sales currently? Coromandel International or for the India export? For Coromandel. Coromandel, we do predominantly imported DAP, only 4 lakh tons requested. Okay. Got it. We did EBITDA per ton of roughly, you know, 6,500 odd tons this year. Are we maintaining that guidance going forward? Just wanted to clarify that. Our EBITDA per ton would be in the range of, INR 5,500. You have to look at the full year basis. That's something that we would be in a position to comment later. Okay. Fine. Thank you so much. Bye. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities Private Limited. Please go ahead. Hello, good evening, and thank you very much. I have the following questions. One is in, the crop protection chemicals business, what is the kind of volume growth you have done in domestic and exports in FY 2023? How do you see the volume growth shaping up in domestic and exports say in FY 2024? We, we did not have a volume growth in CPC. It's been more or less flat. As I was mentioning, there's a lot of headwinds, primarily in Mancozeb and Propanil. Therefore, it was wiser on our part not to produce and sell it at a lower price. Okay. Going into next year, again, while we have our own internal budget and our planning process, the call will be taken depending on how the market conditions come in as far as the largest molecule currently in our portfolio Mancozeb is concerned. As we enrich the portfolio and bring in new products, which would actually help us in de-risking from the old, molecules that we currently have. If you're looking at your new investments in CDMO and specialty chemicals and the, you know, active ingredients to start with, what is the timeline for these investments to start adding to your revenues and what is the kind of% margins you will expect compared to the current margins in the CPC business? Yeah. The projects once they get approved, we are expecting anywhere between 18-24 months for completion because these are large plants. One of the three proposals is already in the final stages of approval. The other two would come in in the next three to six months' time. As we phase out these projects, as they get completed at, in three years' time, which we expect these to come to a peak capacity with the multi projects that we are having, we are expecting INR 2,000-3,000 crore of revenue from these investments to come in. The EBITDA margins should be in the range of 16%-18% for the new molecule. Again, as I was mentioning a little while earlier, we are building in a lot of flexibility in the plants with capability to handle multi-products, so that if there is any challenge in terms of volume, pricing, marketing for one of those, we can swiftly shift to other molecules and therefore maintain a stable margin profile. That's the expectation as far as the CPC investments are concerned. Understood. If I may squeeze in one last thought. If you're looking at talking to innovators for contracts, when do you expect to finalize contracts for the CDMO business in terms of timeline? You must be aware that this is a little long drawn process, right? Establishing connect, the customers coming and visiting the facility, clearing it, signing up NDAs, giving certain molecules for us to sort of work out the initial proto pack and send it to them for validation. At this point in time, one of our customers is in the final stage of getting the NDA and the initial order to us. We have hired a business development manager for CDMO, who is pretty new in the system. Over a period in time, this team will start working with the innovators, both in Europe as well as in Japan, have them visit interact and work through it. I think in the next couple of years, we should see some good traction in this area. At the same time, if there are any other opportunities that comes in our way, working with these innovators with our existing facilities per se, that will also be explored. Thank you very much. Wish you all the best. Thank you. Thank you. The next question is from the line of Resham Jain from DSP Asset Managers. Please go ahead. Yeah. Hi. Good afternoon to you, sir. I have two questions. First is, a few years back, we used to have this target of having 50/50 split between subsidy, non-subsidy EBITDA. We haven't heard on that because subsidy business has been doing quite well. Going forward, let's say three years, four years out, how do you see the mix, given that there is incrementally higher focus in the non-subsidy business? Resham, good question. While we maintain that 50/50 has to come from subsidy and non-subsidy, the position always has been to looking to each of these business on its own merits. As you also observed, the subsidy business has been doing pretty well, and therefore we are seeing a benefit of higher EBITDA coming in from that business. On the CPC front, in the past, we haven't made as much of an investment either in terms of backward integration or setting up new multipurpose plants. That's currently the focus. The generic products can give us margins, but to a certain extent, we need to enrich our portfolio, which started happening in the last two, three years in terms of the product development team working on multiple molecules, coming up with new combinations, and that has helped our domestic formulation business. However, if we have to look into the global business and exports that we have, we have to definitely enrich our portfolio, and that is the reason for us to work on a long-term strategic plan, identify 80-odd recently authenticated molecules, 30-odd combinations, which will suit the requirements of both global and Indian conditions. A certain amount of investment has been committed. The first step in terms of setting up a plant for Azoxystrobin, Picoxystrobin and Cyproconazole has been done. Further investments will happen in the next one to two years. We will see an uptick there and also foray into specialty chemicals, seedling also is in the right direction. There is also a big focus on the specialty nutrients business, if you look into it, because we see that the future of fertilizer could be in liquid fertilizers, special grades of fertilizers, slow release, so on and so forth. The Nano DAP is also a step in that direction. This is non-subsidy. As Nano DAP picks up, while it may be part of the nutrients business, it also augurs well with the overall objective of the company to focus on the non-subsidy business. The bioproducts is another very interesting area. While we have been focusing on Azadirachtin in the past, there is scope for us to do more in terms of other plant extracts, and the business is actually working on them. We also have a couple of very interesting Microbials which are in the good stage of development. Tie-ups with agriculture universities on research is also going to help us in some of these fronts. Overall, I think, there will be a good balance between subsidy and non-subsidy as we go forward. Businesses which are doing well will continue to do well, and we will have our investments there too. We don't want to be constrained by the fact that we want to do a 50/50 of subsidy and non-subsidy. I hope that clarifies. Okay. Yeah. My second question is on organizational structure. We made certain changes. Now we have divisional CEOs rather than a CEO at the company level. We have not operated in this kind of structure earlier. If you can give or share any thoughts around this because the responsibility seems to be split and there is no one at the top from the CEO perspective. We have had both, Sankar and Raghu Ram with the company for some time with us, and they have been running the operations while we definitely had an MD for the company. Both Sankar and Raghu comes with rich experience in their respective fields. We have at a corporate level, Mr. Arun Nandakumar, who is sort of overseeing these operations. That structure, this structure provides lot of nimbleness in terms of looking into the businesses per se, helping in quick decision-making. All the directors have been empowered to handle their respective areas. There is a monthly council where we work together with all the businesses to look at areas where there are best practices to adopt. Each of them have their own areas to focus and grow. These are large businesses, right? Each team has their own priorities, I think it's best to structure it in a way that can enable good focus, growth, and opportunities to excel. As a company, we find this pretty comfortable working through this structure. Okay. Perfect, ma'am. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Ms. Jayashree Satagopan for closing comments. Over to you, ma'am. Well, thank you all for your continued interest in Coromandel. Appreciate your time and your questions. If there are any further questions that we could respond to you, please feel free to reach out to Shanky or to me. We'll be happy to connect with you. Thanks again. Thank you. On behalf of PhillipCapital (India) Pvt. Ltd., that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you.