Ladies and gentlemen, good day, and welcome to the Coromandel International Q4 FY 2024 earnings conference call, hosted by PhillipCapital (India) Private Limited. As a reminder, all participants' line 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 Harmish Desai from PhillipCapital (India) Private Limited. Thank you, and over to you, sir. Thank you, Manisha. Good afternoon, and welome to the fourth quarter and full year FY 2024 earnings call of Coromandel International, hosted by PhillipCapital. From the management, we have Mrs. Jayashree Satagopan, President Corporate and Chief Financial Officer, Mr. Sankarasubramanian, Executive Director, Nutrient Business. I'd like to thank the management for giving us the opportu nity to hold this call. We will begin the call with opening remarks from Jayashree ma'am, post which we'll have a Q and A session. Thank you, and over to you, ma'am. Good morning, everyone, and thanks, Harmish, for organizing this conference call today. Let me give you a brief on the business environment experienced during the quarter, followed by the company's performance, and then we will have the Q and A session. I'll try and keep the session short so that we spend more time on the Q and A session. As far as the Indian agriculture is concerned, India experienced a challenging agri environment during the year. Agri GVA is expected to grow marginally by 0.7%, and the second advance estimate projects slight reduction in food grain production during the year. India as a whole received a below normal monsoon, 94% of the long period average, for the first time in four years now. This led to lower crop sowing, especially in Coromandel's key markets, and has also resulted in lower reservoir levels, further impacting the Rabi plantings. Coromandel's primary markets were severely impacted: Rayalaseema by 13%, North Interior Karnataka by 10%, Coastal Andhra by 3%, Vidarbha by 2%, Bengal by 22%, and Marathwada by 11%, which has also impacted the agri nutrient consumption in these regions. On a positive note, the recent forecast by IMD and Skymet have estimated normal to above normal rainfall for Kharif 2024, which bodes well for the upcoming agriculture season. Fertilizer industry performance: Q4 was a weak quarter for the industry, as phosphatic point of sale consumption declined by 11%. On a full year basis, the consumption improved by 7%. Detailed volume breakup for the industry and the company are available in the investor presentation placed on the company's website. Low Indian rates during the second half of the year was not commensurate to the raw material prices, and therefore impacted the operational viability of the phosphatic players in the industry. With the new subsidy rates announced for first half of FY 2025, we expect the fertilizer margins to show improvement. Raw material prices have remained stable to soft during the quarter, and we expect a similar trend in the coming year. Speaking about the company's performance, the NPK volumes were down by 6% in the fourth quarter of the year, and for full year, it was lower by 3%. Company's market share, POS, in Q4 for NPK and DAP was 24%, and for the full year, it was at 15%. Comparison with last year, it was 25% in Q4 and 17% for the full year. The company's market share, POS, in Q4 for SSP was 17%, and for full year was 15%. Last year, it was 15% in Q4 and 14% for the full year. During the year, the plant operated close to 95% capacity, and further, the company is planning to debottleneck its granulated capacity in Kakinada and Vizag, adding up to 3.5 lakh tons. Company has just commenced work on the new phosphoric acid and sulphuric acid complex plants at Kakinada, with an estimated CapEx of about INR 1,030 crores. These plants are expected to come up in couple of years' time. Further, the company plans to introduce new Urea SSP product, which has recently been approved by the FCO and brought under NBS. This innovative product will provide source of N added to the traditional SSP. On the new plant, the NGT has concluded the hearing, and the matter is reserved for order. We expect the order to come in soon. The commercial sales of Nano DAP started from the second half of the year, and the response from the market has been quite encouraging. We expect to receive approval for commissioning the 1 Cr bottle capacity for Nano DAP plant at Kakinada very soon. Further to this, the Specialty Nutrients business also plans to double the sulphur production capacity during the year. On the crop protection chemicals, our business has registered a stong 20% volume growth across the international and domestic markets despite the severe industry headwinds faced during the year. However, the margin pressure persists due to higher inventory in the global markets. The business focused on several value and IT initiatives, which helped in strengthening its cost position to offset some of the pricing pressures in the market. The business introduced seven new products during the year and is partnering with innovator companies to launch in-licensing products. The new product turnover index for the year was at 15%. During the quarter, CPC business introduced Prachand. This is a 9,3 formulation product from ISK. Formulations business is strengthening its branding capabilities and customer reach. During the year, one of its biostimulant brands achieved a INR 100 crore mark. The business is planning to set up multi-purpose plants for manufacture of six new chemicals in the coming year. Our retail stores improved the farm level outreach and operated well during the year. Overall, 97% of the stores were profitable, despite the severe monsoon conditions in its key operating markets. Retail business is further planning to foray into newer markets by opening 100 new stores in FY 2025. This includes 55 stores that were planned in FY 2024. The work is underway. Drone-based spraying services by our retail stores and Gromor Drive, taken up by the specialty nutrients team, is progressing pretty well, and Coromandel covered more than 25,000 acres during the year. While Coromandel continues to focus on growth core businesses, it has been carefully crafting its long-term strategic growth areas and accordingly focusing itself. One, investment in drones. Dhaksha, which is a newly acquired startup company by Coromandel, is progressing well and has commissioned its new plant in Chennai. Dhaksha's order book stands at around INR 250 crore, and the company plans to service the same in the first half of the year. Two, efforts in CDMO is progressing well, and Coromandel is in advanced stages of discussions with three innovator companies. This being a two to three year journey, company expects additional traction to build up during the coming year. Three, foray into specialty chemicals. The company has initiated a small plant at Vizag to manufacture sodium silico chloride, apart from leveraging its CPC plant infrastructure, and also has been acquiring new customers in this segment space. So Coromandel is looking at newer chemistries like chlorination chemistry for its crop protection and specialty chemicals business. It has identified nine molecules, and the R&D team is in the process of finalizing the DOTs. The company plans to leverage its unique advantage of having byproducts from its fertilizer business, which can be a source for fluorination chemistry. Five, investment in AgTech. Coromandel continues to evaluate its interest in AgTech companies and would be investing in them, like in the last couple of years. With that, let me take you through the company's financial performance. Turnover. The company recorded a consolidated income of INR 3,996 crore during the quarter ended March 31, and INR 22,290 crore for the full year versus corresponding period of INR 5,563 crore for the quarter and INR 29,799 crore for the full year. This registers a degrowth of 28% for the quarter and 25% for the full year. The decrease in revenues has been mainly on account of lower subsidy rates and the lower RM prices, apart from some volume impact in fertilizer business and pricing in the crop protection. Subsidy versus non-subsidy share of business stand at 78% and 22% during the quarter, vis-à-vis 84% and 16% last year. For full year, it is 83% and 17% compared to 87% and 13% in the prior year. Profitability. Consolidated EBITDA for the quarter was INR 273 crores against 203 crores last year, and for full year, it was INR 2,399 crores vis-à-vis INR 2,936 crores in the last year. In terms of subsidy, non-subsidy, 53% and 47% during the quarter, vis-à-vis 56% and 34% in the last year, and for the full year, 72% and 28% vis-à-vis 75% and 25% in the last year. Subsidy. During the quarter, company received INR 2,165 crores towards subsidy claims, compared to last year's INR 4,483 crores. For the full year, subsidy received is INR 9,198 crores. The government has been prompt in clearing the subsidy dues, and as of today, we have received our subsidy claims for March third week. Subsidy outstanding as of 31st March 2024 was INR 1,377 crores, vis-à-vis INR 2,378 crores in the last year. Forex. During Q4, rupees traded within a range of INR 82.64-INR 83.71. Coromandel continues to follow a very conservative approach in terms of hedging and managing its product exposure, which has immensely helped in limiting the impact of currency movement. Dividend, the board has recommended dividend of INR 6 per share for the financial year 2023,2024. With this, I thank you all for your interest in Coromandel and joining us in the call today, and we really look forward to the interaction. 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 Somaiah V from Avendus Spark. Please go ahead. Thanks for the opportunity, ma'am. My first question is on fertilizer margin. So we used to give guidance earlier, around 5,000 to 5,500 EBITDA per ton. So, I mean, in the current context of subsidy rates, how do we see this for the next year? Yeah. Thanks, Somaiah. The margins for next year, we are expecting in the range of about INR 4,500-5,000 per ton in terms of EBITDA. This considers the NBS rate that has been announced by the government. We expect an uptick of about INR 1,500-INR 2,000 coming out of it. And then there are obviously the initiatives that happened within the company in terms of smart sourcing, operational improvements, so on and so forth. So for full year, one could look into a range of about INR 4,500-INR 5,000. Obviously, the intent is to see how we can maximize this further. Understood, ma'am. From an industry price increase, how do we see things? Because earlier, I mean, in one of the calls earlier, we were saying it is also a function of demand. So how do we see demand or inventory that is there in the system, and what is the scope for a price increase for this? Yeah, I think that's a very good question, and I have Sankara, who I'm going to just request to respond on this. Good morning. See, overall, price is a function of global prices of input, raw materials and commodity prices. We have seen some softness in the global DAP prices as well as, as you know, the phosphoric acid price for the quarter has also been negotiated at a lower level. So we need to wait and see how the commodity prices play out in the next two to three months. If that warrants a correction, we may look at it, but as you see, at this point of time, we should be able to manage with the announced subsidy and the MRPs, which should give us a decent margin. Understood. One final question on the brownfield expansions on the fertilizer front. So now that we have announced backward integration projects, and we are also doing work in progress on crop protection, so how would we think about it, and when do we actually will start, you know, planning for this? And when we can expect anything on this front, on the brownfield expansion? On the crop protection front, Somaya, there are three things that are happening currently. As I was mentioning, there has been very strong industry headwinds, and therefore, like many other companies, we also took time to reevaluate certain molecules which were earlier shortlisted for setting up the multiproduct plant. Now that we are hearing by fourth quarter of this calendar year, the situation is likely to improve. This is inputs that are coming from various quarters. With that, and the new chemistry that we are planning to look into, we have another shortlist of six molecules, and the proposals for those MPPs are being put up now. We expect these molecules and the MPP work to be initiated during the year. These are all brownfields which will come in Ankleshwar, as well as in the sites that are being put up in Dahej. There it is a bit of a greenfield. The Dahej site is going to be mainly used for herbicides, whereas Ankleshwar will be used for insecticides and maybe one or two fungicides. This is the overall game plan. The infrastructure-related work at Dahej has already begun, and therefore, as the proposals get approved for the MPP, they should be in a position to get started during the year. This is being also factored in the business plan and the CapEx for FY 2025. Thanks, ma'am. My question was pertaining to the fertilizer segment. Just want to understand on the brownfield and fertilizer segment. So when will we take this up? Because given that we are already doing, you know, on crop production and backward integration, so when is this, some... I mean, we will consider doing this? And also, if you could just help us, what is the current capacity, and where the after de-bottlenecking making, where this capacity will be in this couple of years? Okay. So currently, the focus for fertilizer is to get the SA and PA plant, that is the margin is very important and critical for the business to get our backward integration or our project increase. So that's from there, definitely we announce the and going forward, the business is looking at the opportunity to add further 3.5 lakh tons in the existing capacity. Which means from the current 34.5 lakh tons we are expecting another 3.5 lakh tons to be added to the generation capacity. As we go along, depending on the market situation, clearly Coromandel will be looking into opportunities for further expansion. But at this point in time, this is what we have considered in our business. Thank you. Thank you very much. Thank you very much. I request all the participants to restrict their questions to two per participant, in order the management is able to address everyone in the queue. Next question is from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah, thanks for the opportunity. Ma'am, what would be the plans for Dhaksha this year? Some comments on enhancing its capabilities, what area are they working on in R&D, and what could be the normal business margins as it scales up? Okay. Prashant, Dhaksha is on a solid start at this point in time. We have set up a new state-of-the-art manufacturing facility at Cholavaram in Chennai, which has capacity to manufacture about 400 drones per day, per month, for the agriculture drones and about 50 drones on the logistics as well. This gives a pretty good capacity for them to scale up. As I was also mentioning earlier during the call, we have an order book of INR 250 crore, and all of these, we believe, should get executed in this first half of the year. As they complete their execution and delivery of the logistic drones to the customers, we expect some repeat orders to come, but one needs to wait and watch. We are also expecting work that's going on, on the R&D side, on multiple new types of drones. And, in the business plan, Dhaksha has considered adequate, funding for the R&D-related investments that are likely to go on. So I think the days are going to be pretty exciting for, the Dhaksha drone in terms of scale up. Margin should be into with the high teens to begin with, and as they improve on their localization and their operational efficiency, we should see some more, improvement in that. Ma'am, one concern about the drone industry is that there is very high competitive intensity. So with vis-à-vis its competitors, how is Dhaksha placed better, if you can highlight that? There is likely to be competition. However, it is an early set up in the industry where it is very nascent. The opportunity for drones is huge, whether you take agriculture as a space or you look into defense or logistics. So there is scope for many, many more players to come in. What is important is the company needs to be on top in terms of technology. They must be having a good position to manufacture and do timely delivery, and the quality of the drone has to be good. I think from that perspective, Coromandel, with all its manufacturing experiences in terms of putting together efficient processes, is helping Dhaksha to stabilize and scale up. Right. Ma'am, on the phosphoric acid and sulphuric acid production, how much it was in 4Q and full year? One second. You want the production? Yes, phos and sulphuric both. We can pull it up in our notes, or Anuj will be able to give you the details offline. Sure. And, ma'am, lastly, on CapEx side, how much are we investing this year? We have, for FY 2025, estimated between INR 1,200 crore to INR 1,500 crore overall in terms of CapEx investment. This is across the multiple businesses that we have. Right. Thank you, ma'am. That's it from my side. Thank you very much. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, ma'am. Thanks for the opportunity. First question on the two other new businesses, specialty chemicals as well as the nano fertilizer side. If you could, you know, help share some outlook on the CapEx, the revenue timelines, and how should one look at these businesses? You did mention on the fluorination chemistry that we plan to expand into, but will be helpful to get your comments on maybe new customers and how the discussion with clients is going on over there. Yeah. So Ankur, I talked a little bit in terms of how we want to go on the specialty chemical side. There are two aspects to it. One, leverage the CPC assets and some of the intermediate molecules where we find customers who are not traditionally in the agrochemical space, but they are into Spec Chem. This helps us to diversify the customer base, look into newer opportunities, secure the customer, so that as we scale up, we have an existing customer base who we can go to. That has already started, and last year, we would have clocked close about INR 50 crore in terms of sales to the specialty chemicals base customers. The second thing that we are doing is looking into opportunities where we have by-products, which can become a base for new chemistries like fluorination. Here is where the first plant that has come up. It's not a huge investment, but the investment is the right direction. As in one of our FC plants, where we are using it for making sodium silico fluorides. Similarly, we are looking into opportunities in various other plants, and this could become a feeder into Spec Chem. In the next two to three years, we expect this business to grow upside. We are coming up with a specific business plan at this point in time. During the year, we haven't started any specific large investment for Spec Chem. As I was mentioning, there are four or five new molecules on Spec Chem, which is based on fluorination chemistry. As the DPRs get finalized, they will come up with a business plan, and if it requires, we will add investment to couple during the year. That is as far as the Spec Chem is considered. It looks promising and interesting because we also have the unique advantage of getting the source from our existing businesses. Having said that, on the Nano DAP, this again is a very interesting product, and Sankara being on the call, I'm going to have him respond to the Nano DAP. Sankar? Yeah, the product is quite promising. We launched Nano DAP in a commercial scale last year. We started the second of the season, and the farmers' response has been quite good. So we hope to expand the volumes in next year in especially in the northern markets. The facility for manufacturing Nano DAP is coming up in Karnataka. We are waiting for the regulatory approvals, and we should be able to start the production sometime in June. And we are geared up, and there will be a exclusive profit center to manage this business, and we also hope to introduce variants of Nano DAP, as well as Nano Urea. We have got... We are in the final stage of getting approval from the government for Nano Urea as well. This as a product will be a good alternative to the traditional DAPs being used in especially in the northern markets, all the imports. So we hope to see 20-25% replacement happening over the next three to four years, and government is rightfully positioned to take advantage of this opportunity. Thanks,Sankar, that's helpful. Just, just to follow up on that, did I hear it right? You mentioned 20-25% utilization next year? This is on 1 crore bottle capacity. I said, no, I talked about the replacement on the imports over a period of three to four years, we should be able to replace the import to the 20%-25%. Sure. And just- The capacity is modular in nature. We can keep adding depending on the needs. It doesn't take much time. Sure. And just your comment on the margin side for this business. How do you look at that part? Reasonably good, but being a new business, it requires a lot of contract selling. So we need to invest heavily in terms of educating the farmers to the extent that field engagement activities have been more. Our margins are reasonable, and it's healthy. That's all I can say at this point in time. Okay, sure. Ma'am, second bit on our medium-term thoughts on the business overall. You know, if I go back in history, we always had a thought of, you know, increasing the non-subsidy EBITDA contribution significantly. The fertilizer business has performed exceedingly well in terms of backward integration and growth. What are your thoughts on that EBITDA mix, let's say, three, four years out, if you could highlight that? Yeah, sure. See, each of the business have their own attractiveness and the growth trajectory. The intent, obviously, is to see how we can propel the growth for the non-subsidy businesses, right? And that's where you would see that investments are happening in, some of the newer chemistries, some of the relatively, recently off-patent technologies in the crop protection pipelines. We're also looking into getting into CDMO. And then there are other entries or step outs, like the drones and other aspects. So this is a conscious, decision to look into other areas for growth. Having said that, each business, based on their own ROIs and the opportunities, they will be given their own capital expansions, so on and so forth. So it's not at the cost of one business to another. All the core businesses will have their own opportunities to grow. Where we find it more attractive in terms of newer areas and adjacencies or step outs, the company will also be taking those steps there. Sure, ma'am. That's helpful. Thank you, and all the best. Thank you very much. The next question is from the line of Bharat Sheth from Quest Investment. Please go ahead. Hi, ma'am, thanks for the opportunity, and you have answered my question largely on the new initiative. But on... If you can give little more and color on the retail store strategy, as well as the SNP, where how much is currently the total size, and how do we see the SNP going along with, which is, once we were talking of a big potential? And last one is, our acquisition, which we did from E.I.D. Parry earlier, how that business is playing out? ... Okay. Thanks for your questions. As I was mentioning, the retail business has done extremely well during the last year. They continue to grow on their strength for the past two, three years, and despite tough monsoon conditions across all the stores, we have seen excellent traction, focus, and customer engagement activities. Last year, I would say that we had somewhere close to INR 1,700 crore of revenue from all our retail centers. We have about 750-odd stores. We're planning to expand by 55 stores in last year, an additional INR 50 crore in by 25. This will mean that the overall number of stores will go about 850 or so. The expansion is going to be mainly, not only in APTC, but also adjacent states, especially like Tamil Nadu. The retail business not only is focusing on the products, which is our own, as well as what we buy and trade from other agri-input companies. It is also focusing on services as a separate focus area. A lot of services in terms of crop advisory is given for the farmers. They, we do not charge. However, there are services like drones, so drone spraying, or at a point in time, we are looking into insurance for the retail business. These all will become a bundle which will benefit the farmers overall. So within retail business, expect for a good growth and will continue to be an extremely value-added branding for Coromandel as such, with your amount of Gromor, you know, branding that they have. I think you were talking about the specialty nutrient business. Here again, the traction has been good. The first quarter of last year was very tough for the business. However, during the year, they have also registered a good volume growth, and they continue to focus on key specific segments, whether it is sulphur or foliar, so on and so forth. Nano DAP will also be part of the entire specialty nutrient team, while we are internally tracking it as a separate focus area. On the sulfur front, we are doubling the capacity so that we should be able to provide products for the sulfur segment, because the country, as you know, is deficient on sulfur in many parts. So this is something that the business has taken up almost after a gap of few years to consciously increase the capacity. The business that we bought from E.I.D Parry is Bio. Bio has been traditionally focused on Azadirachtin, which is a neem product. Last two years, we have seen a very high increase in the cost of procuring the neem seeds. While there has been excellent efforts in terms of cost efficiency, optimizing at the plant, the business has done well. We've been able to take price increases in the- with the customers. And, having said that, through all the same price increase, we also expect that the customers will look for some reduction or opportunities in this calendar year. With a high dependency on neem base, currently the business is looking into various opportunities for diversifying and growing the bioproduct portfolio. One such activity is currently in terms of looking at Marigold, which could be used for producing something called as lutein, which can go for poultry feed. So this is a new area of diversification that bioproducts is looking at. They are also looking into certain biofertilizers, like the mycorrhiza, which can come in. There are a long list of new products, including microbial, which will get introduced during the year. So we believe that bioproducts per se could be a very attractive segment, not just focusing on new, new plus multi other areas. Then bio is an evolving area, a lot of traction, very attractive globally, since we also do a lot of exports. I think in the next two to three years, this should further solidify and become a business of sometime for us. So, ma'am, do you, if you can deal with these, all these in three years, what kind of opportunity we are seeing, say, in all these three area? And SNP, what is the current size of the business? SND is about INR 600 crore at this point in time. And, as I was telling, retail, if you add another 100 stores, depending on the... I mean, I wouldn't look too much in terms of the turnover, right? Because turnover is also driven by fertilizer, which again, is dependent on raw materials, whether it is low or high. I think qualitatively, all these businesses are expected to grow, grow at a healthy number. I would think about, more than 10%-15% is what one could look at in terms of growth in each of these businesses. Profitability, if you can give little, just color on broader number. Profitability from the existing margins, we expect them also to improve over a period in time, because we are getting a healthy mix in terms of various other plant extracts for microbial. Nano DAP is a new concept. Sankar was recently explaining to you all in terms of the margins, it's healthy. It's a new product. We have to work on lot of customer advocacy, helping them to understand and then move into a Nano DAP from a traditional DAP. When I look at it overall, I think it's all in the positive trend. While I may not be able to pinpoint and give you, it is a 0.5%, 1%, 2% improvement in the margin, directionally, it's all in the going up in the right scale. Can I chip in one more question? Yeah. Hello? Yeah. Ma'am, if I'm not mistaken, I heard that we are also launching Urea plus SSP product on a nano scale. So if you can give some color on that. Sankar, do you want to touch on this please? See, this is a value-added product from the base SSP. SSP contains only P of 15% or 16%. We wanted to add Urea to it to have N also, 5%. So if you look at the Urea SSP, it will have 1:2.5 ratio. It's sort of a replica of diammonium phosphate. So DAP has got a nutrient content NPK in the same ratio of 1:2.5 between NPK. So this has the same ratio, and we thought it makes a lot of sense, and a lot of field trials have been carried out and proves that it can be a good alternative to DAP. And the government has taken the initiative and got it included in the FCO, and we have set up the facility at Nimrani. It can be a good alternative for major crops like oil seeds, cotton. We are just carrying out the trials also. It's quite promising. It's the best alternative to imported DAP. So the company will... And this also gets the NBS subsidy from the NBS rates for the urea portion. So government has been talking about innovation in SSP, and they've added micronutrients to it. So as part of the diverse product portfolio for SSP, we are trying to introduce this grade. So next year will be the first full year of operations also. Okay, thank you, and all the best. Thank you very much. The next question is from the line of Arjun Khanna from Kotak Mahindra Asset Management. Please go ahead. Sure. Thank you for taking my question. First question, just on the Urea SSP. So if we look at the subsidy that we receive for DAP, essentially, while you mentioned same ratio, that has phosphorus almost 46%, this is significantly lower. So, in terms of a sense, it will be a lower price DAP. Is that what we are aiming for? See, actually, this Urea SSP is one third of our normal DAP, right? In terms of- Right. Nutrient content. We also try to see whether we can price it, but the benefits are far higher here. So the pricing also will be generally the farmer acceptance is 1:2.5. This is around 14 or 13, 14 DAP. This goes around 5% and 14, because they've got other nutrients other than NPK. SSP. Right. Sulfur. Yeah, like sulphur, magnesium, calcium- Right. Ammonium oxide binding agent, so the value addition is much more clear. So, right now, we'll try to price it in a way it's attractive for them to try this product as compared to DAP. Will be very attractive for the farmer to try this. Sure. Very helpful. So just, on this question itself, we talked of Nano Urea, and we are using Urea SSP. So essentially, are we looking at setting up a Urea facility, or this would be, bought out urea, which we would look to granulate or, the production of, Nano Urea? The Nano Urea as well as Urea SSP requires very insignificant volume of urea. So we are allowed to import the urea for manufacturing in NPKs and SSPs. We'll be importing urea for this purpose. It didn't call for setting up a separate urea plant for this. Sure. So no major CapEx on the anvil as of now on the urea side. Is that the right understanding? Absolutely. Perfect. So, the second question is, ma'am, on the cash on balance sheet, it seems to have increased further. We have in excess of INR 3,000 crore of cash on balance sheet, investments, et cetera, all combined. How do you see this actually pan out going forward? You did mention our CapEx, but we would have a cash flow generation. So what is our thought process on the cash that continues to grow on balance sheet? One, obviously, is to use our cash for all our capital expenditure programs. The second one is also to have capital for any further expansion, whether it is on the organic or inorganic. I was mentioning to you, we have not factored in any CapEx as such for Spe Chem or CDMO, because we are still working on the DOTs and the tech packs. So as and when these gets materialized, there will be additional capital expenditure required for these two businesses. We would also be open to look at inorganic opportunities, whether it is in the bio space or in the chemical side. If it is attractive and it is synergistic to the business, that will require money, and the existing cash should be used for it. Fourthly, let's not forget the fact that some of our businesses are highly capital intensive, I mean, highly working capital intensive, right? While the government had given us all the subsidies last year, sometimes there could be situations where subsidy could take a little more time. For instance, end of the year, our receivables is likely on the higher end compared to the past few years, mainly because of market conditions. So we want to have kitty, which will help us to fund through CapEx, any new business opportunities that we are looking at, any inorganic growth, and also support in our working capital. ... Fair enough, ma'am. The reason I ask this is in the context of the government circular in terms of profitability for fertilizers. So the cash on balance sheet works as a negative for us since it's on a PBT basis, and the income on cash would actually decrease the margins, pure margins we can earn from the fertilizer piece. Just wanted your comments on this. Here we are representing to the government, because the surplus is of a corporate and linked as a corpus for certain purposes. So each of the businesses have their own cash flows, working capital. We are awaiting some clarifications. Whatever guidelines that the government has, we believe through our representation, will be looked into very fairly, because it's not for our business, this is for multiple businesses, and the corpus is being maintained for a period in time. If you look back, three years back, it will be some INR 3,500 crore of cash with us, right? So that's the position the company is taking. Sure. Thank you, and wish you all the best. Thank you. Thank you very much. The next question is from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. Thank you and good morning. So just to put the discussions on your growth plans, the specialty chemicals and, you know, investments in chemicals in perspective, so can you give us an idea in terms of, when you expect this, CapEx of INR 1,200-INR 1,500 crores to be monetized in terms of revenue and profits? Will it be somewhere in the second half of FY 2026, or can we expect it from the beginning of FY 2026, or will it slip into FY 2027? Thanks, Ramesh, for your question. The CapEx that we had indicated now is for two major CapEx, right? One is our SA and PA plant, which is likely to come up at Kakinada. The other one is for the MPPs for crop protection chemicals. SA and PA plant will take two years to get completed, and hopefully in FY 2026 end or early FY 2027 is when those plants will be up and running. So those are primarily backward integration projects, where you will see the benefits flowing from then onwards. On the MPPs, the business is in the process of setting up the proposals. It could take again 18months-20 months' time in terms of setting up the facilities, and therefore, again, you should look at a two-year window for looking at the benefits to come in. The rest of the CapEx for the year is mainly on account of, you know, the maintenance CapEx, while there is a Nano DAP facility that will come up and get commissioned. Most of the work is completed. We are just waiting for the government approvals to come in. Similarly, sulfur is a small capacity addition. The rest are not very major. The two big items that are being considered are in these fronts. So that clarifies. Okay. So if you look at the specialty chemicals and the, you know, SNP revenue, on a back of the envelope calculation, your non-subsidized revenues are about INR 4,500 crore, EBITDA is INR 600 crore, and if you net out the CPC, you are in a non-subsidized business, you know, comes to about INR 2,000 crore, excluding the SNPs. So if you look at this, you know, excluding the CPC, whatever is the non-subsidized business, what is the kind of growth you can expect in that? And right now, I think your EBIT margin, EBITDA margin is about 16%, to work out. So is this margin going to be in this range, 16%, or will you see the margins improve? What is the top line growth you can expect in the non-subsidized business, excluding crop protection? Mm-hmm. When I was just mentioning some time back, Nano is one area which is non-subsidized. It's a new area. We expected good growth to come in. A lot of farmer advocacy is happening there and will continue to happen. So we don't have a big base for us to say what it could be, but here it's going to be pretty attractive. On the specialty nutrient segment, where we have around INR 600 crore of turnover, here also we are expecting a good amount of growth to come in, mainly on the sulfur side, for which a new plant is also getting set up at Vizag. So these two are mainly on the non-CPC bio area at this point in time. Nano can be exponential. SNP could be in the teens, anywhere between 10%-20%. We have seen that level of growth happening in the past, so we expect to continue there. In both these, we also expect the margin accretion to happen, over a period in time. So just to, you know, put all this in perspective, if you look at your nutrient business, you're talking about 3 lakh tons-3.5 lakh tons of expansion. That possibly, you know, possibly the exit rate will go up by about 3 lakh tons-3.5 lakh tons, say, by FY 2025 end. And similarly, you are getting some traction in terms of your specialty chemicals, where you reported about INR 50 crores. That may see some growth. So all the other initiatives may take some time. So can you give us some indication in terms of how your chemicals and mining volume growth can support, you know, some operating leverage benefits for nutrient business in terms of both volumes as well as margins? And secondly, on the drones business, you're going to do about INR 250 crores in the first half. If you can give us some indication in terms of the kind of potential revenue you can do in 2026, 2027, and the kind of EBITDA margins you can earn in that, that will be useful. ... Okay. So on the new three, and the first one, we wanted to ask how our mining backward integration would help us? As you know, we have invested in BMCC a couple of years back, and last year, the overall rock production in the mine had gone up considerably compared to previous year. And in the coming year, we are looking at somewhere close to 2.5 lakh-3 lakh tons of rock to be mined and sent to Vizag for consumption. Senegal is a very important strategic initiative for us, as we are setting up our Kakinada plant for phosphoric acid. We will require more of rock, and having our own backward integration in terms of rock will only help us, both in terms of supply as well as negotiations with the other rock suppliers. We expect the rock mining from Senegal to go up to 500,000 tons, and Sankar and his team has been working closely with the Senegal operations there. Secondly, when you talk about specialty chemicals, that I was mentioning, so if you close up, we have about INR 50 crores last year, and with various initiatives that we are looking at and also acquiring new customers, we expect this to increase during the year. And more importantly, as the new fluorination-based chemistries for the molecules are firmed up and we start putting up exclusive plants, this will become a new stream of business of some size and scale for Coromandel. So that's the plan. And you were talking about Dhaksha. Dhaksha has the current order book, which we expect to execute in the first half. The logistic drones orders as they get completed, we can expect repeat orders coming from the government. The team is working on it. Apart from it, a lot of efforts are going on the R&D side for various types of drones, not just the ones that we are currently doing. Since it is in the R&D stage, we may not be able to come and discuss this openly, but good amount of research forming in a steering committee to look into what are the opportunities, doing a stage-gate process to ensure that everything is on track, and we are able to deliver on the R&D commitment timing is going on. So this is a very new and interesting area. A lot of procedures are being put in place so that there is good amount of time and management time that goes into ensuring that the investment in Dhaksha is actually helping in terms of scaling the business. Margin should be attractive as we go along. Okay, thank you very much. I'll join the queue and wish you all the best. Thank you. Thank you very much. The next question is from the line of Rohan Gupta from Nuvama Wealth Management. Please go ahead. Yeah. Hi, ma'am. Good afternoon. Ma'am, on the margin, you are talking about still INR 4,500 to INR 5,000 per ton for the current year, and we are quite confident about it. Our last two quarters have been a sub INR 2,000 kind of margins. That's what we understand. So, with the... Given the current Kharif season rates, subsidy rates are already out by the government, and we do not see that any further revision in near term. If that doesn't happen, then do you think that this margin, which you're talking about, will be difficult to achieve? Or you expect that that in second half, with the increased volume and also from the value added, we can achieve these numbers? Yeah, good afternoon, Rohan. As I was mentioning, there has been a reduction in the NBS rates between various product categories, where one could look at INR 1,500-INR 2,000 increase in the overall subsidy. The current quarter and the past quarter has been pretty tight, and as you all know, this is mainly driven by two factors. One is the lower NBS rates, which is not commensurate with the raw material prices. Secondly, the RM value that started cooling had shot up in between. However, we are seeing a trend for RM to be soft and stable as we go along into FY 2025. Plus, the sulfuric acid plant, which has got operational, will also bring in more operational efficiencies and also savings in terms of power cost. So all of these put together, that's why I gave a broad range, which one should look at for EBITDA per ton as we get into FY 2025. And as you know, there are lots of, percentage. You know, things could become favorable. When the raw material prices went up, the value capture was quite high in Coromandel. There is another one in terms of subsidy rates, where the government is looking at when it comes to the second half. Third is the season per se. If it's good, farmers will need fertilizer, and we are also hoping with, the elections getting over, there will be more flexibility in terms of pricing to the market. So all of these, one should bear in mind as we look into the sales and margins for the coming year. Ma'am, as far as the pricing in the market, even post the election, I think that we have been closely monitoring that from last two to 2.5 years since the RM prices has gone up. The government has been very sticky as far as the DAP prices is concerned in the market. I mean, but just as a confident that there may be possibility and opportunity to tinker with the market prices as far as DAP or maybe even complex are concerned, I mean? The government has not only just looking at the monitoring it- I'll leave that to Sankar, right? See, the government has been very supportive, giving high subsidies. And, let's also think about it. How much of subsidy do the government would want to continue to provide to the companies? They're also talking about direct transfers to farmers, which is being on the anvil for quite some time. We do not know how all of these are going to pan out, and therefore, somewhere there's a belief that there would be some amount of flexibility which is given to the company, rather than only relying on the subsidy element, if the government will increase or decrease. So that's a broad thinking. Having said that, I would have Sankar to also share his perspective, as he works closely with the industry and the ministry. See, we'll be responsible in, fixing the right MRP, which we need to have for the level of investment and the cost what we incur. So, to that extent, I think, government always supports the decision, keeping the farmers' interest in mind. Well, margin accretion will happen more in terms of improved operational efficiencies, as Jayashree said. Sulphuric acid plant, the full benefit will flow in, and we've also been working on improving our rock efficiencies. And the backward value chain in Senegal also will add to the improved profitability. And also, we have to understand that as a company, we focus more on the unique grades. And in fact, last year, our unique grades volume, which Coromandel manufactures have grown up significantly, and we'll continue to focus on those unique grades. So our aim in terms of improving the EBITDA margins are not by increasing prices, but by improving our operational efficiencies, bringing the value-added products, where the farmer gets the benefit. In fact, we are looking at more of, fortification, as a plan for, our generic grades. We'll add zinc boron to it, and, we have been fairly successful in SSP. We may repeat the story in phosphate as well, and we have plans to do it. So our aim will be to focus on cost, improve operational efficiencies, product mix, our unique grades, which brings in value proposition to farmers so that he doesn't, feel the impact of the price change. I think going forward also, we should be able to sustain the momentum, because the inflation prices also are coming down, and our ability to smart purchase at the right time also helps us. That's what differentiating Coromandel from others. Our procurement efficiency is some of the best, and that also helps us to sustain the momentum, even in the challenging environment. Helpful, sir. And Sankar, sir, you also mentioned that over the next maybe two to four years, you see that the Nano DAP can replace probably 20%-25% of imported DAP in the current... I mean, that's what the government is looking like. Sir, any idea or indication you can share that how, what kind of market share we are looking in, Nano DAP? So I think that the competition is going to definitely pick up in nano categories. And, what kind of sustainable margins, we still have no clarity, that what kind of margins are there in, nano, nano product categories across. So if you can just share that, what kind of market share and what kind of margin one can expect from Nano DAP? See, this is a new product, new segment, and, we have got, our own innovative product. It's unique in nature. We don't compare with others. And, we have got very good response in the market space. So I would say what capacity we can do, rather than putting market share at this point of time, more players are welcome here. But our ability to connect with the farming community, ability to educate with the farmers, and our brand and our, loyalty, will definitely help us to sustain the momentum that we have received in the last six months of introduction. It's very promising now. All I can say is, we will try and keep on improving our, capacity utilization and try to add capacities. It will be very difficult to put any market share at this point of time, because this market is just opening up now. And also, this product is not only confined to domestic market, we have huge opportunities and exports as well. So we'll also be trying to see how best we can leverage in our, global presence as well. So the potential is there as a replacement, but also in certain crops, the farmer's behavior is also as an add-on. Some of the crops where they don't use DAP, there they are trying to use this as they make it convenient for pulses or for green grams. So there are a lot of different experiences. It's for the farmers to decide and, accept this product. So potentially, that's what I can say. And the products also will evolve. There'll be multiple grades which can come in, and we have to wait and see. It's too early to make observations on the market share. Any indication on margins at all, sir? Gross margins. Margins are basically good, but we need to make a lot of investments on Farmer Connect programs and creating awareness and carrying out a lot of tests and field trials. But definitely I can say it is very healthy at this point of time. It can... it's a non-subsidy business, and obviously, the margin sectors are even better than the specialty nutrients margin what we make. Okay. So that's very helpful, sir. Thank you so much. Thank you. Thank you very much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Ms. Jayashree for closing comments. Thank you, and over to you, ma'am. Yeah, thank you all for joining us today. I know that there were a few more in the queue. We'll be happy to take the questions post the call, Anuj Naithani, for any clarifications. And we will also be soon setting up a meeting in Mumbai, where we will come and meet up with some of the investors and analysts. We'll be glad to interact further. Thank you once again for your interest in Coromandel, and have a great day. On behalf of PhillipCapital (India) Private Limited, that concludes the conference call. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.