Ladies and gentlemen, good day, and welcome to the Coromandel International Limited Q1 FY25 earnings conference call, hosted by Elara Securities Private Limited. As a reminder, all the 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 Mr. Prashant Biyani from Elara Securities Private Limited. Thank you, and over to you, sir. Good afternoon, everyone. Thank you for joining the Q1 FY 2025 earnings con call of Coromandel International. From the management side, we have Mr. S. Sankarasubramanian, MD and CEO; Mrs. Jayashree Satagopan, President Corporate and CFO; and Dr. Raghuram Devarakonda, Executive Director, CPC, Bio and Retail Business. First of all, many congratulations to Mr. Sankarasubramanian on being elevated to the role of MD and CEO for the company. I would request the management to give their opening remarks on the results, post which we'll start with Q&A session. Thank you, and over to the management team. Good afternoon, everyone, and thank you, Prashant, for organizing this call today. Let me give a brief on the business environment experienced during the quarter, following which, we can go through the Q&A session. Indian agriculture, after a slow start to the season, the southwest monsoons have been swift and seen a swift recovery from July onwards. As of 4th August, India has received 106% of the long-term average rainfall, with the exception of Odisha, Coromandel's key operating markets have received above normal rains. Reservoir status, especially in southern regions, have improved considerably, up by 52% compared to last year. Crop sown have also picked up. As on August 2nd, it is up by 3% to 90 million hectares, which is approximately 83% of the country's normal sown area. There has been a good support to the government on the farm income side through higher MSPs announced for Kharif 2024, and direct income transfer schemes like PM Kisan, Rythu Bandhu, et cetera. Industry's performance. Phosphate consumption for the industry improved by 11% during the quarter. This was led by improved NPK consumption, which went up by 42%, indicating a positive shift towards balanced nutrition. Detailed volume breakup for the industry and company is available in the investor presentation placed on the company website. With active monsoons, there has been a good fertilizer offtake, and there is likelihood of channel inventory getting normalized by end of Kharif. Given the higher reservoir levels, we expect a good rabi season as well. DAP prices, after reaching the lows, have started to move up due to the supply side curtailment, mainly from China. On the crop protection side, there has been strong domestic market demand. Global agrochemical market situation is also improving. We have seen that, the inventory is getting normalized. On the company's performance, the nutrition segment, the NPK and DAP primary sales volumes for Coromandel were close to last year's level at 8.4 million tons in the quarter one. Between the NPK and DAP sales, the company has increased the NPK sales share to 87%, unique product sales stand at 31%. The share of the manufacturing sales has also improved in the overall mix. Company has improved the potash sales for the quarter by 32% to 480,000 tons, which is the company's MOP's market share, stands at 11.7% compared to 9.7% year-over-year ago. Plant operated close to 96% capacity, focusing on improving product mix. Company's Ennore plant is awaiting final clearance from the authorities to start its intermediate production. It has carried out the annual turnaround and has received clearances from the technical suppliers like TKIS and MECS. The new sulfuric acid plant commissioned at Vizag in 2023, is operating close to full capacity and has improved backward integration capabilities in addition to generating captive power from the waste heat recovery. Further, the company has received all the statutory clearances for its proposed phosphoric and sulfuric acid plant in Kakinada, and has commenced activities during this quarter, and major orders have been placed. To improve the operational efficiency and throughput at its phosphate mine at BMCC, Senegal, the company is setting up a sixth processing plant, which is expected to be commissioned in the second quarter of the year. Senegal rock is currently being blended and used in its Vizag operation. During this quarter, the business introduced Urea Super Phosphate and Diammophos Plus, which offers balanced utilization through availability of multiple nutrients. On the nano front, during the quarter, the nano facility in Kakinada has been commissioned. The business is giving the required impetus to promote the product by strengthening the marketing structure and has been continuously engaging with the farmers to position the product as an alternative to the conventional DAP. On the crop protection side of the business, the volumes have improved by 5%, driven by growth in both technicals and formulations. During the quarter, the export volumes have seen an increase, however, the prices continue to be soft. The company's focused specialties in new products have performed well. The business continues to adopt cross-solutions approach to capture the market demand. The business introduced 10 new products during the first quarter, including 4 patented products. Its in-licensed insecticide formulation, Prachand, has received encouraging response from the market, and the business plans to introduce such novel formulations in the coming periods by partnering with the global innovators. The share of the new product sales has improved over the quarters, and in the first quarter of FY 2025, it was at 22%. This has also resulted in margin accretion for the business. The business has also finalized plans for the setting up multi-product plants for herbicides and fungicide manufacturing activities in the same location during the year. On the retail side, the business continues to perform well despite late monsoon arrival in its catchment region. It is strengthening the digital footprint at farm level outreach. During the quarter, business has opened 22 new stores. On the bioproduct side, the business focused on expanding its product portfolio to diversify its base. During the quarter, it has ventured into microbes space, in addition to foraying into home and garden gardening segment. Three new products, Mycorrhiza, NPK Consortia, are being introduced. On the technology front, Coromandel increased its shareholding in Dhaksha. This is a drone manufacturing company where Coromandel had invested earlier. The overall stake has moved up to 58% through fresh issue of shares with an investment of INR 150 crores. The profits from this fundraise will help Dhaksha in strengthening its research and development efforts, cater to servicing large orders, and also meet up with its working capital requirements. Further, Coromandel invested INR 24 crores in Ecozen to increase its stake to 5.54%. With increased consumer acceptance and demand for sustainable solutions, Ecozen has been delivering strong results. With that, let me take you through the company's financial performance. Turnover. The company recorded a consolidated total income of INR 4,783 crore during the quarter, vis-à-vis INR 5,738 crore in Q1 of last year. The decrease in revenues has been mainly on account of lower subsidy rates. Subsidy/non-subsidy share of business stands at 81% to 19% during this quarter. In the previous year, it was 86% and 14% in Q1. Profitability. The consolidated EBITDA for the quarter was INR 506 crore, against INR 709 crore in the corresponding period last year. The decrease in EBITDA is mainly due to the lower NBS rates and increase in the raw material prices and fertilizers that we witnessed during the quarter. The company has improved its non-subsidy EBITDA mix during the quarter, which stands at 25%, versus 16% in the previous year. Subsidy. During the quarter, company received INR 987 crore towards subsidy claims, comparative figures last year was INR 2,069 crore. Government has been prompt in clearing the subsidy dues. As of today, we have received our subsidy claims till the first week of July. Subsidy outstanding as of 30th June 2024 was INR 1,970 crore, versus last year, it was INR 2,816 crore. On the Forex front, we have seen the rupee trading in a relatively narrow range, and the company continued to hedge its exposures on a conservative basis. Thank you all for your continued interest in Coromandel and joining our call today. We look forward to the interactions. 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 the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hand lift 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 Nirav Jimudia from Anvil Research. Please go ahead. Yeah, ma'am. Thanks for the opportunity. I have two questions. So one on the crop protection side. So, as per the annual report, what we have written is that on the cost side, we have transited from, let's say, DMP to DMPAT. I am guessing this is for the ethical production which we are undergoing. And we have also mentioned that, we have undertaken a cost reduction initiatives, predominantly the War on Waste, to reduce the specific consumption of RM and utilities. So if you can just help us understand how both of these could help us in terms of cost savings on an annual basis, some understanding on the same, ma'am? Yeah. Thanks, Nirav, for the question. So looking to both our businesses, fertilizers and crop protection, fertilizer has been highly backward integrated. We are taking steps now to the extent possible, and it is feasible to do backward integration in the crop protection as well. As we know, when we do the backward integration, it helps us on two fronts. One is to help secure the raw materials at the right price. The second one, it could also be a cost saving by various means. So in the DM side, very recently we got the business case approved, and it's a smaller capacity plant which will come up in the next 6-8 months time. This will help us to be little more competitive in the agrochemical space. On the War on Waste initiative, currently it will be the third year that the business has been successfully able to identify multiple opportunities across various functions: manufacturing, sourcing, process engineering, looking into every aspect to optimize and reduce the waste. This has actually helped the business during the last year, where there were extreme pressures in terms of prices, and the business was able to use these savings from War on Waste initiatives to competitively bid and expand our customer base. So there is, this is a continuous focus areas and the efforts so far have been strong, successfully reduced the cost, and the business will continue to focus on this. Got it. So, ma'am, based on the plant what we are going to commission over 6-8 months, how much of our requirement from the outside world would come down with the commissioning of this plant? So for DM side, we are expecting about between 25% of our requirements to be in-house, and depending on how this goes, at a later point, we can look at additional capacities. Got it. And secondly, on the in the annual report, like last year, we have launched some close to 7 products. If I see Q1, cumulatively, we have launched close to 10 products on the crop protection side. If you can just help us understand, because in the annual report, we have written that our capacity across the plants is close to 90,000 tons for technicals. So with these new products coming in, what could be the market size of such products in India? Does it qualify for the export opportunities also? And along with this, if you can also share the mix between the technical and the formulation sales in FY 2024 and Q1 of FY 2025. And lastly, how much we are backwards integrated for our formulation sales through our technical plants? Okay. So, I have Dr. Raghu in the call. I'm going to request if he wants to take it, otherwise I can provide some answers. So actually, why don't you go ahead and, you know, there are multiple questions here. Maybe we can split between the two of them. Why don't you start? Yeah. All right. So your first one was relating to the number of products that we've introduced last year, 7, this year, 10, right? If you look at the history of Coromandel, we have been a bit slow in terms of introduction of multiple new products. When we look into the entire product range, go crop- by- crop, this we are talking mainly on the formulation front. There were obvious gaps if you were to take any particular crop like rice or cotton or specific fruits and vegetables. So the team had identified all the gaps so that when a farmer comes to Coromandel, we are able to give them all the solutions and not say we have only few select products to cater to their requirement. So there is a change in the approach. And the second one was also to look into patented products, where we work with the global innovators and get those products in the portfolio, which will possibly have lesser resistance, since they are new to the test. So this was a revised approach. And, going by that, between the last couple of years, we have seen a large number of formulations that have got introduced, and this has been received pretty well. As I was just mentioning few minutes back, we have seen that almost 22% of the sales in the domestic formulation today is coming from new products. When I say new products, these are products that have been introduced in the last 3 years. So let's go back. The second one you were talking about is in terms of the share of formulation in the overall business, which is around 30%. Yeah. Technical continues to be a large portion of the crop protection sales. Formulation still has a long runway. We are tracking the right direction. Currently, it's about 30%. Okay. When we look into the formulation, I would say by far several of those formulations, wherever we have technical, we use the technical to formulate, but that is not a constraint. In some cases where we have to buy technical, either from any of the others who are manufacturing it domestically or if we have to import, we do that, and then those formulations are sold in the market. Raghu, you may want to add anything further. Yeah, sure. So, as Jayashree mentioned, I think, what we have gone through the test is about the formulation new products. We also have plans to launch, some new technicals, for which the, internal processes have been completed. So you should hear about it, shortly once we, you know, have the execution underway. So we have a few technicals also, which will be launched. I mean, these are new products for us. Obviously, none, none of these are new to, the industry as far as technicals are concerned, but there are some, some of those, I mean, at least 4 of the 10 that we launched are patented. So they, these are absolutely new in the industry, addressing some of the farmer requirements. So having said that, in terms of backward integration and leveraging our capabilities in the technical side of things, as I said, we are waiting for these new technicals to come on stream. In the next 6-9 months, we hope to complete the projects. That will further strengthen our competitive in the market. And while we continue to leverage our existing molecules that we manufacture. And the longevity of the existing molecules we are extending by developing new products, which are 2-way combination, 3-way combinations, other than just keeping them as solo. As you may be aware, the solo molecules have a tendency to develop resistance, while the combination formulations extend the life of these molecules because of their multiple modes of attack on the pest. So the pest cannot develop resistance that easily because there are multiple things that are, you know, acting on the pest, meaning the digestive system or the nervous system and so on. So a solo, while a solo will be, attacking just one of those mechanisms. So, I hope between the two of us, we have addressed the question. Absolutely, sir. Just a small clarification, this 90,000 ton capacity is purely the technical side of the business, right? That's right, yes. Got it. Thank you so much, sir, and wish you all the best. Thank you. Thank you. Ladies and gentlemen, I would like to remind the participants that in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question will be from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Hello. Good afternoon, and thank you very much. So if you look at the nutrient business, what is the understanding you have in terms of potential increase in the NBS rates in the second half, or will the industry have to go for an increase in retail prices given the recent increase in the input cost and the, you know, subsidies being frozen at April? What is the current thought process there? Sure. Good afternoon. Currently, the current subsidy which has been announced for Kharif, late after September. To note, there has been a compression in margin in the Kharif, basically because of increase in the commodity prices, when the subsidy was notified there in February, March, tracking the raw material prices, which prevail in the previous period. So there's always a little bit of a lag between the subsidy rate and the actual raw material price trend. So we need to wait and watch as, based on the current raw material price trend, which is prevailing now, there is a possibility that, you know, the subsidy will factor in the increase in input cost. So it's a function of commodity prices, and hopefully, that will be taken care of in early season in the cost. So hopefully we should see that the wages of the price increase get absorbed in the Indian rates at the monthly term also already. Okay. So if you look at your crop protection business, when you say that the domestic market is looking up and the international business is also stabilizing, do you see the decline in prices getting arrested? What was the decline in prices in the overall equation between volume and prices for your crop protection revenue performance? So, Ramesh, this needs to be looking to two aspects. On the formulation business, as I was mentioning earlier, which is mainly for the demand in India, we are seeing that the prices are fairly stabilized. The new product introductions have helped the company, so the margins have seen an accretion. Whereas in the technical front, especially, in our exports, we have seen that, while there has been a volume increase, there is still price pressures that continue. We expect this to be there for another quarter or two, because China continues to be dumping, and the prices of the AIs are still much lower. Is it possible to quantify what is the reduction in realization in the export market? I can come back to you, Ramesh. Yeah. And, just one last thought. In terms of your plan for increasing the profitability of BMCC, what is the timeline you have to see that JV turning EBITDA positive and eventually cash positive, based on the investments you are making? ... Which one you are asking, sorry? I'm asking about BMCC, the Senegal JV. Right now, in the share of JV, there is a loss. So in terms of your initiatives to invest in capacity and increase the productivity there, what is the timeline, and what are the investment required, and how long do you think it will take before you are able to generate positive EBITDA and then eventually positive profits after tax? Yeah. As far as Senegal operation is concerned, last year was the first year, and then we could stabilize the production, and we started using the Senegal rock in our Vizag operation. So to that extent, we made a positive move in the last year. And we have also taken a decision to move away from the setup what we had last year to a fixed processing plant, and the plant commissioning is underway. Hopefully, we should be able to complete the trial run by end of September. And this is the off-season period for mining operations, so probably in the second half, we should be able to stabilize the production, and we'll get the steady material coming into Vizag operation. So, second half, we can see a positive traction on the BMCC operations, and overall for the year, we should be able to reach what we. Okay, thank you very much, and congratulations, Shankar, and all the best. Thank you. Ramesh, on your question, relating to the volumes and price, the volume uptick in Q1 on export has been close to about 10%, and the price pressure has been more or less in the same range. Thank you very much. That's useful. Okay, thank you. Thank you. Ladies and gentlemen, I would like to remind the participants that in order to press a question, you may press Star and One. The next question will be from the line of Vipul Kumar A. Shah from Sumangal Investment. Please go ahead. Hi, thanks for the opportunity. So my question is, what is our annual phosphoric acid requirement for manufacturing this 3.5 million ton of NPK fertilizer? Our capacity right now is 0.5, and same for sulfuric acid also. See, as well as the phosphoric acid requirement is a function of the product mix what we have. If we use a high phosphoric consuming product like DAP, then the requirement goes up. But looking at the mix, what we generally follow, we optimize the product mix depending on the commodity prices. It can be anywhere in the range of 5.5-6 lakh tons. And this is over and above the captive production, what we have at Vizag. And partially, some of these requirements are met from acid coming from Vizag to Kakinada. Predominantly, we import acid only for Kakinada operations. So we can say our net phosphoric acid requirement will be in the range of 4-4.5 lakh tons. Sometimes it goes down to 300,000 tons, sometimes it goes up to 550,000 tons. And in the case of sulfuric acid, as you are all aware, that we have commissioned the plant last year, it's doing good. And imported sulfuric acid, which used to be in the range of 1 million tons, has come down by almost 500,000 tons. On an annual basis, it can potentially come down. In the first quarter, we have ramped up the production of sulfuric acid, and we have done more than 100% of the rated capacity. So full year basis, still we will continue to import sulfuric acid close to 600,000-800,000 tons. Again, it depends on the product mix. Some grades of NPK require more sulfuric acid. We can say, our import requirement of sulfuric acid has come down by 30%-40%. So once this new capacity of phosphoric comes online, still, we'll be importing the phosphoric? Yes, it will be less. It will be in the range of 200,000-300,000 tons, but we'll continue to import, and we have dedicated it over long-term contracts, so there is no challenge. Okay, sir. Thank you. Thank you. Ladies and gentlemen, in order to ask a question, you may press Star and One. The next question will be from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah, thank you for the opportunity. Ma'am, subsidy for Q2 will also be lower on a YOY basis. So what efforts are we taking to reduce the pressure on profitability in Q2? See, as I said, it's a function of the raw material price and the product mix, and also the commodity price, how we are securing. So always, we have ensured the procurement compared to the competition in the industry. We look at... And also, we have improved our captive production both on sulfuric acid and phosphoric acid. And that is really helping us in the way the commodity prices are behaving at this point of time, now that all the raw materials are going up, and we have good long-term contracts. So we hope to see improvement in margin coupled with our efficiency improvement, blending of our own rock, which is coming from Senegal. So all these, you know, will help us to have an improved margin in the Q2. Going forward, we have to see, in terms of the subsidy rates for subsidy, how the commodity prices behave, but definitely it should be much better than what we witnessed in Q1. Just to add you, Shankar, the whole industry came out of a bad rainy season. The soil moisture conditions were not good, and there was also high channel stock. So Q1, across the industry, has also seen some level of discounting. With the rainfalls coming and reservoir levels becoming much better, I think there is a normalization that's happening there. And Prashant, that also needs to be factored in when we look at the margin for the second quarter. Sure. Ma'am, how much was the revenue from Dhaksha in Q1? And if you can provide some updates about the new product development and demand and inquiries from various industries. So Dhaksha, one needs to look at into two, three different ways. They have the 280-odd crores of defense order book, and there were some agriculture related orders that they were executing during this quarter. What has happened for Dhaksha is all the every drone that was produced and distributed. Whereas on the defense front, 150 drones have been manufactured. We are waiting for the PDI to happen, post which the shipment of these drones to logistics requirements will be taken up. In the meantime, there is research which are ongoing. As you know, Coromandel had injected about INR 150 crore of equity into Dhaksha. This is mainly for multiple R&D projects they are working on. This is a technology play, where we expect a lot more R&D work to happen to be on the forefront, and also ensure there are new applications that are getting developed. That is what is happening on the Dhaksha. To your specific point in terms of the turnover, the turnover for the quarter was INR 17 crore. Right. And, ma'am, what would be the outlook on raw material for fertilizers, and how much was nano fertilizer volume in Q1? The raw material, Shankar wants to take it. Yeah. Raw material prices are behaving in different ways. At this point of time, there's been some hardening on raw material prices on ammonia and, MGA, but we have to take it, quarter- by- quarter. And we could contract, positive price at a competitive rate for, Q2, which is fairly, much better position for the company like us, you know, focusing on domestic manufacturing. And also there is a visibility on potash price, which is, compared to last year, has come down to $283 from $390. So those are the key ingredients of, sulfuric acid and potash. The price is relatively stable and, much better than the, price which has prevailed in the earlier quarters. And, for the other raw materials, we have to take the quarters. I would say that, there's a reasonable visibility in terms of the input cost as we move to the Q2. In terms of the nano, it is all early stages. As you know, the nano application happens after 30, 40 days of crop sowing. But in spite of that, we have positioned the material in the channel. So right now, the Coromandel has crossed 1,000,000 liters of nano, which is a very significant volume, and we do it in a very systematic way in terms of convincing the farmers and doing education across the country. And hopefully, we will see improved traction on nano volumes as we move into Q2, when the consumption starts sometime in mid-August. So, but the initial response has been pretty good. All right. Thank you. I'll come back in the queue. Thank you very much. The next question is from the line of Darshita from Antique Stock Broking. Please go ahead. Hi, thank you for the opportunity. Firstly, congratulations to Shankar, sir, for the elevation. My first question was, with respect to the INR 3,500 special DAP subsidy that the government has recently announced. But given that nothing has been announced on the NPK side, do we expect, or are we, are we looking at taking some price hikes, in the NPK products? See, our pricing call is a function of input costs and market response. So I would like to mention, we are not going for an MRP increase as such, but we may look at moderating the trade discount which was offered during the off season period. So that would be sufficient at this point of time. With the revised price contract happened for sulfuric acid and potash, at this point of time, we want to look at correcting the MRP for the NPK. But the main tradable product is DAP, as we predominantly import and we don't manufacture. We still continue to operate at the current MRP, and we are also looking forward to support from government towards additional compensation for the increased cost what we are incurring. Hopefully, if it comes through, that will also help us to bring down the pricing we have on DAP. Right. Right. Got it. And, if you could... I don't know if you gave that number or not, but, I missed that probably. What is the PA price contract we are looking at for the- We have finalized the PA price at $950 for Q2. This price will prevail after September. There's a marginal increase of $2 over the previous quarter price, which was there. Right. Right, right. Okay, that's it from my side. Thank you. Thank you. The next question will be from the line of Ranjeet from IIFL Securities. Please go ahead. ... Yes, sir, thanks for the opportunity. The first one is on just a bit of a confirmation. The guidance for the fertilizer segment, the EBITDA pattern, still stays intact, or are we going to relook at that? That is intact. We spoke about INR 4,500-INR 5,000 to manufacture the product. I think that's pretty much intact. Yeah, thank you. The second one is on the growth projects. In addition to what we have announced, if you can also guide us about how to look at the company probably through the previous year, fertilizer segments and the other adjacencies that we have been doing. You have spoken about drones, but in addition to drones, we also have been speaking about a lot in the spectrum or the chemical side, even in some part of the bulk chemical side. If you can just highlight about these two or three avenues and how much should we be able to grow in these segments? Okay. So first of all, on, before we get on to the adjacencies, I just need to stay focused on core itself. On the nano, this will be the first year, and we are expecting a good uptick to happen. Let's see how the consumption picks up in August, September, while the trials have been, the results or the trials have been encouraging, we need to continue to work with the farmers. So that's number one criteria. The second one is to see how we can improve our, share and sales in formulation, which the team has done a very good job in the first quarter, and we expect it to pick up during the rest of the year. So this is in terms of the core. When we look into adjacencies, as I was mentioning the last call, we have set up a small facility at Nimrani. This is mainly for sodium silico fluoride, and we've started the commercial production and sales tools. Similarly, lot of opportunities have been identified internally, which could be using the existing assets. As we have seen that the prices of the AIs have come down during the last 1.5 years is not only for agrochemicals. We are seeing a similar trend in overall chemical space. Therefore, while we have identified select molecules both in crop protection and in specialty chemicals, using newer chemistries, we are just seeing how to get the business case more attractive. So that's what is happening on the adjacencies space, especially on the specialty chemicals. The smaller research, testing the waters, getting the products out, establishing the customer base is going on well. On CDMO, with the 3 innovators, there has been good dialogues that are happening. That area is progressing well. You know, it's a 2-3-year journey, and so we can only say at this point in time, it's progressing in the right direction. Just to add to what Jayashree said on the... Am I audible? Yeah. Yeah. Yeah. Just to add to that, see, the core business on fertilizers, we have been working on debottlenecking, debottlenecking our plants, and that project is underway. Because if you see notice, we have been operating at 95% capacity, and currently we are embarking on a P&SA plant, which is progressing well. So with a greater visibility on input raw materials, both phosphoric acid and sulfuric acid, and also likely stabilization of rock from Senegal, now it gives us much more visibility for us to expand capacities in our existing facilities. So as a company, we have been always prudent in capital investment, and we have been looking for greenfield expansion. So we are happy to share that we have got approval during this quarter to expand our capacity at Kakinada by another million ton. So as and when the right opportunity comes, we will be looking to expand the capacities as well for granulation, so that it will be in line with our integrated capacity expansion and also will help to grow the top line. So besides looking at adjacencies, we'll also be looking to grow the core business what we are currently doing. Yep. Thank you, sir. That is- Would you like to comment, a little more on the CDMO side, please? No, I think that's the most comprehensive answer we can give at the moment. Other than, you know, getting into details like where are we with the samples, where are we with the tech pack, and the CapEx development. So those I don't think would be necessary to share at the moment. So the progress is happening as planned, and the prospective customers are continuing to engage with us, and both the teams are working a lot more closely. So it's going in the right direction. So we have more than one lead, and they are maturing, you know, taking the different stages that one has to go through. So it's all going well. ... Right. So one bit on that, I believe the team would be in place, so probably the kind of a skill set that would be required for this CDMO kind of a business are slightly different than earlier, like with that? Yes. So, you know, we have also identified where the infrastructure will come. We have got a dedicated team for both sales and operations, including R&D. So inside our R&D, we have a carve-out for CDMO opportunities, and those resources are all full-time dedicated to this opportunity. Right. Thank you. One question for Shankar, sir. We have kind of a high capability in the phosphorus chemistry, and there is a lot of talk on the phosphorus chemistry for the new age businesses. So are we kind of exploring those opportunities, or it is still early to talk about those? You are absolutely right. In fact, that will be the focus area for us. Currently, we leverage phosphoric acid for fertilizer production, but as part of the diversification, we'll definitely require the phosphate-based other derivatives. We have some game plans in terms of using them for purified phosphoric acid, which has got wider applications besides fertilizers into food sector as well as a battery-grade acid. And also it provides opportunity to produce specialty fertilizers like MAP, as well as more purified DAP, which is required for our nano production as well. So I think that will be the area sort of I would say step out for the nutrient business, besides what Raghu and JC talked about on specialty chemicals. In the case of nutrient, that will be the step out beyond the core fertilizer business. And we are in the initial stages. We'll be able to share more as we move to the season, but definitely we are looking at it. Yeah. Thank you again. So that's quite helpful. Also, everything put together, is it fair to assume that probably, incremental 10%-15% of the growth can accrue from these initiatives that you are taking? Probably not in the near term, next 1-2 years, but, definitely in 3-5 years timeframe. Yes. Sure. Thank you. Thank you, Jayashree. Thank you very much. Thank you. Ladies and gentlemen, I would like to remind the participants, please limit your questions to two per participant. The next question will be from the line of Falguni Dutta from Mansarovar Financials. Please go ahead. Yeah, good afternoon, sir. So I just have one question, which is on nano fertilizers, be it urea or DAP. Going by the acceptance that you see now, how much, what percentage of our domestic demand, let's say, in two years from now, can be taken over by the nano variety, be it urea or DAP? You know, there has been a good amount of traction in the last couple of years in the nano space. Nano DAP is, for us, it's only the first year of operation. Based on various inputs that we keep getting, over the next 3-5 years, the expectation is about 20%-25% to be a substitution of. I missed you. You said over the next 3-5 years, about 25% of substitution can happen in as regards DAP consumption, right? Yeah. The same would go for Nano Urea? It's possible, but Nano Urea, we haven't seen as much of results. Okay. Last year, IFFCO has been marketing Nano Urea, isn't it? We will see that level of traction, but DAP looks little more promising. We have introduced a Nano DAP, so there's still work going on in our R&D center. Okay. In order to work in the very steady. Okay. Thank you, ma'am. That's all from my side. And, ma'am, one more question, which is on the MRP and subsidy for DAP. So going by where they are currently, should we, I mean, see the margins to be remain similar as Q1 levels, or do we see any change there on, going by the current subsidy and MRP for DAP and NPK? Can I take that question? Yeah, you can go. Yeah. See, as far as DAP is concerned, we are trying to meet the market demand, basically wherever NPK supplies cannot be met. Ideally, we feel, as an industry, we should go for more balanced nutrition, which is good for the farming community. So our focus is more on NPK, and we can see that improved traction in the first quarter. If you see the consumption as well as the sale of NPK has gone up significantly, whereas DAP has come down, is more due to the absence of availability. So our intent will be to convert DAP into NPK. Having said that, the government is also seriously considering compensating the industry wherever the switchover may take time from DAP to NPK, and that we need to meet the immediate requirement of farmers. We will try and meet the requirement, but the government is also looking to compensate additional costs, whatever we incur. ...So that should come in any time now. So if that happens, that improves the viability of the either DAP imports or DAP manufacturing, either way. Okay. Okay, thank you, sir. That's all from me. Thank you very much. The next question is from the line of Bharat Sheth from Quest Investments. Please go ahead. Hi. Hi, Shankar. First of all, Bharat, your voice is too low. Can you speak a little bit more? Hello. Now is that clear? Yes, that sounds good. Hi, Shankar. Very hearty congratulations on elevation to MD post. Shankar, there's one question which, first of all, we have on the nutrient business. You said that we have already taken approval for 1 million ton additional capacity. So looking at overall business, we are generating very good case as well as... So if we want to go with this 1 million along with the backward integration or only purely granulation part. If you can give, and if we are going forward with backward integration, then how do we really see the key, the way, I mean, volatility in past we have seen again, that kind of volatility affecting our company? We are already doing the backward integration, as you are aware. We are putting up a plant, phosphoric acid, sulfuric acid, integrated facility at Kakinada. Correct. So to that extent, that will help in supporting the additional granulation plant, as and when we choose to do. Right. Also, the product mix makes a difference. The margins may be a challenge for a generic grade, but as a company, we strongly believe in making a unique product offerings to the farming community. We have a wide range of unique products, along with micronutrients. So our new facility, as and when we decide, will have certain unique grades, which will not have pricing pressure, which can be well received from the farmers. Use efficiency will be better. So we do expect that, you know, the additional granulation facility will definitely be a win-win from both from farming community as well as from the company in terms of the payback. Of course, backward integration will be useful, but in many commodity business will not be advisable to do 100% backward integration. These two commodity prices behave highly volatile. So we always would prefer to keep some portion of open input sources rather than creating our own investment. We'll also be prudent on our capital investment in creating this new capacity. Can you give some ballpark figure of that CapEx that we may plan, need to incur for the same? Maybe too early to comment on, but, I can definitely tell you, it is far lower than, typical greenfield project. Since it's going to be a brownfield, which means the common infrastructure, tankages, Okay. Related infrastructure will not be required, and we'll be more focused on operating at that time to produce the product. So it'll be far lower than that, and we will always be capital light on these investments. Okay. Second, on this Nano DAP, when we are talking of reaching, say, 25% of the requirement or demand in next 3 years. So what kind of a CapEx that we may need to incur for the same? For Nano, it's not a major investment. We have already invested a state-of-the-art plant at Kakinada, which has been commissioned, and we can improve the capacity in a batch mode. It will not be a significant investment. Here, again, we have the existing infrastructure created and already in place, so we should be able to scale up the volumes in a shorter period of time, and it is not a very significant CapEx. So on the replacement part of it, we have to wait and see, because as Coromandel, we are very responsible in terms of promoting this product, and we have to see, as the phosphatic industry, we are the largest importer of DAP. Our effort would be to substitute this DAP import through Nano. So our focus would be on those states that currently DAP is subject to imports. And we have a few, at least 2 million tons, to get replaced in at least 2-3 years time frame. And we have adequately, not only from Coromandel, but from other players, because many companies have also started getting into this product. And we don't see any challenge in creating the capacities to meet the such sort of a demand, as well as to happen. Okay, great. And, sir, when we reach, I mean, 25% kind of our business, I mean, making from this Nano DAP, what kind of approximately that in rupee term turnover will be there, sales that do we expect? This replacement, what we are talking about is at the industry level, not at the company level. Okay, still- Currently, if you look at the Nano DAP product for bottle, it's 50% of the DAP price. If DAP is getting sold at INR 1,350, Nano DAP bottle is sold at INR 650. So we can roughly say the turnover will be 50% of the turnover of DAP. Okay, and profitability? Subsidy component. Here there is no subsidy component, so to that extent, we can say that 50% of the DAP MRP will be the value of Nano DAP. Approximately, if you can give some ballpark, I mean, profitability, because here it will be in the percentage term. Yeah, you can do the math, 2 million ton into 1,350, you can do the math and arrive at your answer. It's roughly should be in the range of INR 12,500 crores at the industry level. But just, I need to get back to you on the right number. Profitability, I'm just- Profitability is too early to look into it. We have to see, because this product being a concept selling, it requires lot of spending on the field level in terms of field promotion, engagement and that. Initially, we are not looking at, you know, the profitability is more to facilitate the farmers to go in for environmental friendly product and make them affordable, improve the use efficiency. It can have a decent margin and with the reduced subsidy being not part of the sale price, it will be less working capital intensive as well. So some more quarters to play out before we start talking about margin and profitability. And if, can I- Mr. Bharat- Ask one more question? Return to the question queue, please. Okay. So only one question for Jayashree, if Jayashree allowed. Mr. Bharat, may I request you to return to the question queue as there are other participants waiting. Okay. Next question will be from the line of Vishnu Kumar AS from Avendus Spark. Please go ahead. Good evening, and thanks for your time. Sir, you spoke about the new 1 million ton. I mean, we are talking about some approvals. What I mean, in terms of final investment decisions, what are the events that are contingent upon, like, on, on for us from here to when we are going to be announce this project? And what is the timeline from there to get this on the ground? And what will be the backward integration com- as a overall company at that level? What is your last question? Can you please repeat the last part? I'll answer that. If after everything put together, let's say we, whenever we had get this 1 million ton on the ground, at that level, what will be the phosphoric acid integration and sulfuric acid integration at that complete level, whenever we do it? Right. See, in terms of the investment decision, we are just currently, our internal project team is investing on phosphoric acid and sulfuric acid. So currently our plates are full. So once we reach some certain level of project execution in the intermediate capacities which we are creating in Kakinada, we may take an investment decision at that time. And, after we take final decision and take all approvals, it may take 18 months to create that new capacity. So that's the timeline we have. And, in terms of the intermediate requirement, it's a function of the product mix, what we are going in for, in the new plant. As I mentioned in my earlier communication, we are looking at value-added products, and we can fairly say 60%-70% of the expanded volumes we should be able to meet at our own source. The new capacities, what we create also always will have some provision to increase the production beyond the rated capacity. We have to wait and see, it's too early to do it, but fairly 60%-70% of backward integration will be there. The final decision this year, or we'll have to wait for next year probably to hear more from you? We don't want to pre-empt it. What I can say is we have this, regulatory approvals in place. We will go through the process before we formally communicate. Got it, Shankar. One final question, sir. As the new boss of the company, I mean, we are a fairly well-run company, so, what will be the top two, three KRAs to probably take the company to the next level that you are probably going to embark on? It's not even one day old, so I don't want to come to the decision which are the areas we work on. As you rightly said, it's a very well-managed company, and long-term strategies are already in place. My focus would be to ensure that we sustain the value addition, what we do on core business, and build the capacities, and create a strong front end in the main business where we operate. Besides that, the non-subsidy businesses like crop protection, specialty chemicals will have the focus going forward, to ensure that our overall EBITDA margin improves. And also we talked about in the call about our step outs, what we are planning in the phosphates-based value-added products. So that will also be the area. We will be able to give more clarity, probably after a quarter, but it will be the ongoing process of identifying the newer opportunity to ensure that we get better returns from all the stakeholders. Got it, sir. Thank you and all the best. Thank you very much. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. So thank you all for joining us, and appreciate your interest and questions. In case you have any further clarifications, feel free to reach out to us. We will be happy to take that. Thank you. Thank you. On behalf of Elara Securities Private Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.