Ladies and gentlemen, good day and welcome to the Coromandel International Limited Q2 FY26 earnings conference call hosted by Phillip Capital India Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Harmish Desai from Phillip Capital. Thank you, and over to you, sir. Thank you, Sarthik. Good evening and welcome to the second quarter and half-year FY26 earnings call of Coromandel International Limited hosted by Phillip Capital. From the management, we have Mr. Sankarasubramanian S, Managing Director and CEO, and Mr. Deepak Natarajan, Chief Financial Officer. I would like to thank the management for giving us the opportunity to host this call. We will begin the call with opening remarks from Mr. Sankarasubramanian S, followed by Mr. Deepak Natarajan for an update on financial performance, post which we'll have a Q&A session. Thank you, and over to you, sir. Good afternoon. Good afternoon, everyone, and thanks, Harmish, for organizing this call. I'll give a brief on business environment experience during Q2, followed by company's performance. India as a whole received the above-normal monsoon at 108% of the long-period average. Widespread rains across India, except for a few pockets in eastern India, resulted in higher Kharif figuring of 1%. The major gains recorded in rice, pulses, and coarse cereal, whereas the cotton and oilseed, there has been a degrowth, recorded lower sowings. However, excess rains, unseasonal rains which happened in August and September, have affected the standing crops and also impacted the application of crop inputs as well as specialty products. Northeast monsoon, which brings major rains in Tamil Nadu, Rayalaseema, Andhra, and Karnataka, also began on a positive note, and IMD has forecasted above-normal rains at 112% of the long-period average for the season. Our reservoir levels are quite healthy, standing 4% above last year level and also 15% above normal storage. Overall, we are looking for a very bountiful Rabi season. South India is 123% of the long-period average in terms of reservoir level, which is very good in our key addressable markets. On the policy front, the government has been taking proactive steps on Agriculture and supporting Agriculture, supporting Agri imports. Announced the MSP revision for the Rabi marketing season, with overall increase of 4%- 10% taken across various crops. As you know, during this quarter, the self-reliance in pulses mission was launched, which is aiming to make India self-sufficient on pulses production. Outlay of INR 11,000 crore has been earmarked for this, and this is expected to give output of 23 million tons of pulses in financial year 2024-2025 to 33 million tons in 2031, through increased coverage, guaranteed procurement, and quality seed distribution and enhanced value chain support. Along with various other reforms taken on the GST front, I think Agri Input sector has also been considered for the GST correction, which has been very beneficial for the sector. Several products such as Micro-nutrients and Biopesticides, Agriculture machinery, and solar equipment, the rates have been reduced from 12% to 5%. The industry has passed on the benefits of these rate revisions to the farming community. In respect of foreclosure, as you know, we have this inverted duty structure where output is 5% and input is ranging between 5%- 18%. This time, GST announcement has come in for reduction of GST rate for ammonia and sulfuric acid from 18% to 5%. In the case of the fertilizer industry, the inverted duty sector remains and the credit accumulation happens. We have been persisting with the government to give clarity for refund of these accumulated credits. With this rate revision, the accumulation for the industry has come down, which is a good sign. As you all know, the NBS rate which gets announced once in six months has been announced for this rabi season, with a 10% increase for P and status quo maintained for N and K. While this may not be reflective of the current raw material prices, we have seen some spurt happen in the ammonia and sulfuric acid prices in the recent past. We do expect that raw material prices will soften over a period of time. Certain raw material inputs like urea or rock phosphate, we have seen softness, and even the international DAP prices have started softening, which will cascade into other input raw material as well. I think as responsible industry players, we will ensure that with this announced subsidy, with better negotiating ability on the raw material side, we should be able to sustain the operations and productions and ensure the availability of fertilizer to the farming community. The prompt announcement of the NBS rate is very helpful in giving clarity ahead of the Rabi season. Coming to industry performance, raw materials were mostly steady across various categories except for the spike which happened in ammonia and sulfur in the middle of the quarter. The sulfur prices went up very high, and ammonia, because of unplanned shutdown happened in the Middle East, hardened during the end of the quarter. Phosphoric acid price last quarter has been negotiated better in Q2, has moved up marginally from INR 1,258-INR 1,290. That ensures the availability of critical input for the entering rabi season. We do hope that there should be a downward correction in sulfur prices in the days to come. International DAP prices, with improved availability, have started softening, and I hope this trend will continue to augurs well for our sector. If you all look at the consumption of phosphatics, overall it remains at the last year level, but it's heartening to note that the share of NPK in the overall phosphatic consumption has moved up to 64%. If you all recollect, this used to be 50-50 in favor of DAP and NPK, and things have moved up to 64%, which is good for balanced nutrition. Slowly, the adoption of NP and NPKs in the Northern markets has started. Increasing trend, and this augurs well for Coromandel, which is predominantly into NP and NPK manufacturing. I think during Q2, the industry has worked very closely with the government in ensuring availability of DAP. The imports have gone up significantly during this quarter, and also on an hourly basis, adequate DAP has been procured, which ensures that the industry carries enough inventory as we move to the Rabi season. Overall, because of the unseasonal rains witnessed in August and September, the consumption for the industry has dampened. Otherwise, it has grown much better than what it has been now. Still, its consumption is healthy at 121 lakh tons for the half-year, and the imports have gone up significantly, as I mentioned, mainly driven by DAP. The industry continues to sustain the production of both DAP and NPK in spite of various geopolitical challenges. The industry could secure raw materials and ensure production is happening. In the crop protection sector, overall inventory hangover has got normalized, and this is helping in improved volume of takeoff key molecules. In India, here again, the excess unseasonal rains of August-September have impacted the spraying application kharif window. Overall, with the improved outlook for the Rabi season, these volumes will be made up in the Rabi coming months. Coming specifically to company's performance, I'm very happy to report very resilient performance by Coromandel for the quarter across all business segments, and thanks to improved offtake of Agri Inputs. Company's phosphoric acid plants operated above its capacity, producing close to 9.1 lakh tons of NPK, up by 3% over last year. This could have been better except for some stock outage we had due to ammonia disturbance witnessed during September. It's very important to note that the company's Phosphoric Acid facility has reported enhanced production through de-bottlenecking efforts, and that has also reflected in the financials, up by 13%. The production for the half-year has been healthy at 17.5 lakh tons, 5% growth over last year, and Phosphoric acid has grown up by 17% over last year with the same plants what we established up to last year. Backward integration project for Sulfuric acid and Phosphoric acid is coming up in Kakinada. It's progressing well. 90% of the project targets have been achieved. I'm sure mechanical completion will happen in the coming quarter, and the commissioning of plants should happen in January. This is going to be the state of the plant with the new technology. It's also helping generating power, which can meet the entire power requirement of Kakinada. It's completely going to change the cost profile of the Kakinada operations from being an importer of acid to integrated play. As you all know, we have already been procuring rock phosphates from Senegal. The operations are getting stabilized. The timing with the commissioning of this plant and Senegal rock will be flowing into Kakinada and blending it with other existing rocks. We are very confident of ramping up the phosphoric acid volume in a short period of time. We can see this benefit flowing into the fourth quarter of this year. We have initiated activities on NPK capacity enhancement at Kakinada for a million ton capacity. It's likely to be completed by the third quarter of next year. The project is progressing well. As you all know, the company also signed up strategic supply contracts with Ma’aden for DAP, the Saudi Arabian Phosphatic Major, and also for securing long-term stock contract from Jordan. On the marketing side, we are happy to state that we have become the largest market for phosphatic fertilizers in the country. Our consumption-based market share in phosphatic fertilizers stands at 19% vs 17% last year. In Q2, we registered a volume increase of 7% and 1.4 million tons of NPKs and DAP. Share of unique grade stands at 36%, similar to last year. Our H1 volumes are up by 17%, in line with our approach to expand presence in northern and central India. We have enhanced our sales to 200,000 tons in the first half. This seed marketing effort will augur well as soon as the new plant gets commissioned next year. SSP volumes were close to last year level and is 6% up over last year. We have completely changed the business profile of SSP. Instead of chasing volumes, we are focusing on value-added products like GroP lus, Gromor Alpha, which has improved the margin structure. Also, ensure that we provide multi-nutrient single super phosphate to the farming community to replace DAP. This initiative of Coromandel to provide SSP Plus urea, SSP Plus micro-nutrients has been quite helpful to meet the shortages of DAP in the northern markets, and they provide a suitable alternative to crops like groundnuts. These products currently account for more than 50% of our overall SSP volume, which is coming through this unique granulation, which Coromandel has been introducing over the last two years. Our market collections have been quite strong, supported by strong agronomic activities and government's timely disposal of subsidies. We may see the higher elevated numbers of subsidy in early September due to being the major quarter for us. The subsidy outstanding is higher, but we have since collected in October, and we should thank government for timely disposal of subsidies, which were received even up to the third week of September. Specialty nutrient business registered a very strong quarter, improving the sales and margin. There's reported at 20% growth in revenue, and focusing on improving the volume of sulfur with the capacity expansion we undertook last year. We are trying to diversify the Sulfur Portfolio to include Sulfur Plus micro-nutrients. We're also looking at seriously on granulation in specialties, including seaweed granulation, and also diversify the product portfolio. With the increased demand for the specialty nutrient business, which is coming outside the subsidy scope, to provide higher EBITDA margin, the company has announced investment in MAP, which is a critical raw material required for manufacturing specialty nutrients. This project is coming up in Visakhapatnam, and this will help us to reduce the dependence of one of the key raw materials for water-soluble fertilizers from China. These investments in granulation plant, MAP plant, will help the company to diversify the product portfolio and promote resource-efficient solutions for the farmers. It also offers both opportunity by ensuring availability of these key nutrients at affordable prices to the farmers. Nano has been doing good. We have been systematically educating the farmers across India, and volume during the quarter has been 1,100 KA. The response in the farming community has been very good on certain crops and fruits and vegetables. The business has been continuously focusing on facilitating the movement of these materials to the farming community and creating awareness campaigns and continuously engaging farmers and channel partners. They've also been engaging with the HR institutes and other technical institutes to spread the positive effects of Nano, which can be an alternative to imported DAP. Coromandel's spraying services through drones have gained momentum, and in fact, we could cover almost 80,000 acres in the current year for the first six months, as against 22,000 what we did last year. The retail business has been expanding its footprint of opening a store a day. We have opened 100 stores in Q2, and totally 170 stores opened in H1. We have entered into new states like Maharashtra, Tamil Nadu, and we are on track to reach the critical store size of 1,200 stores. All segment categories in retail have done very well. There has been an increase in volume of foreclosure sales through the retail outlets, and the business is progressing well on multiple initiatives like e-commerce, drone spraying services, diversifying to financial products including insurance. The company is drawing a blueprint of scaling up these retail stores to 2,000, expand the product portfolio, enhance the value, and will be effectively deploying analytics and AI on the customer-facing business segments like retail to enhance the efficiency and improve the profitability of this business. On the crop protection bio business, the business delivered a very good performance, recording improvements in both sales and margins across domestic, international, and B2B segments. Their product business also has achieved growth in the half-year period. Overall revenue grew by 10% to INR 829 crore, and EBIT was up by 48% to INR 162 crore in the crop protection segment. It's very heartening to know that the key molecule Mancozeb registered a good volume growth in Latin American markets, and the capacity which was implemented in Sarigam has been fully utilized. We anticipate the demand for the molecule and have set up an additional capacity at the Bhagod, which has been recently commissioned in October that will provide an additional impetus for the demand in the second half as well. The domestic B2C segment had an exceptional quarter in a very tough business environment and achieved critical numbers in the early part of the Kharif season. Unseasonal rains have impacted the offtake. Nevertheless, the team has been going as per plan in terms of expanding the territories and introduced almost 40 new markets and also introduced new inlets and products during this year. Our inlets and molecule we have taken from Japan last year has been doing well. Revenues are up by 11% in the new territories that we have set up. We are also embarking on a sales acceleration program in key markets where our margin and market share is beyond threshold of 5%. New products introduced in last year are performing well, and the share in the sales remains at 25%. We continue to progress on CDMO print and have positive discussions with multiple international partners for technicals, intermediates, and patented formulations. During the quarter, the company has successfully completed the acquisition of NACL Industries, followed by the mandatory open offer. Emerging as one of the leading crop protection players in the country, NACL has done well in H1 with revenue growing by 18% to INR 900 crore and EBITDA by 12% to INR 83 crore. NACL is on track with meeting the KPIs as indicated at the time of acquisition. We are looking at various energy areas by aligning our policies, R&D, product development, manufacturing infrastructure, and market access. Overall, on a combined basis, crop protection business is likely to do well. If everything goes well on an annualized basis, crop protection segment, including NACL, should reach the critical mark of INR 5,000 crore of revenue, which is significant and pushes Coromandel in the pecking order to third or fourth largest crop protection company in the country. Biobusiness had a good quarter, introduced eight new Biofertilizers and biobust agents to strengthen its microbial portfolio. The business is collaborating with a global player for manufacturing API and has set up a facility to manufacture the same. Overall, I'm quite satisfied with the way the operations have played out, and we're looking forward to a very positive outlook for the Rabi season. I'll now hand it over to Deepak for commenting on the financial performance of the quarter. I'll come back for the questions and answers. Thank you, Sankar. Good afternoon, everyone. The company recorded a consolidated total income of INR 9,771 crore during the quarter and INR 16,897 crore in the first half of the year, registering a growth of 30% for the quarter and 38% for the first half of the year. The consolidated total income also includes INR 245 crore pertaining to NACL, which became a subsidiary of Coromandel on August 8, 2023. Subsidy business share in the revenue stands at 83% for both first half and also Q2. It is. Broadly in line with what we saw last year at about 84% for the quarter and 83% for the first half of the previous year. With regard to profitability, the consolidated EBITDA for the quarter stands at INR 1,147 crores against INR 975 crores in the previous year. For H1, we recorded INR 1,929 crores against INR 1,481 crores in the previous year. Subsidy business share in the EBITDA stands at 71% for the quarter and 70% for the first half of the year. This is a 2% improvement in a way from the previous year number where it was 73% and 72% for the first half. Net profit after tax for the quarter was INR 793 crores in comparison to INR 659 crores recorded in the corresponding quarter previous year. For H1, that was recorded at INR 1,295 crores against INR 698 crores in the previous year. With regard to subsidy, the company has received INR 3,336 crores towards subsidy claims. For the half year, the company has received subsidy worth INR 4,637 crores. The corresponding previous year number is INR 3,855 crores. The subsidy outstanding as of 30th September stands at INR 3,199 crores vs INR 1,714 crores in the previous year. While the closing number looks higher, it would be pertinent to note that almost INR 1,000 crores of the subsidy has been received in the month of October. Coromandel has been prompt in settling the dues, and the subsidy claims are being processed in a timely fashion. With regard to Forex, we continue to see Rupee trading in a slightly broader range of 85.18- 88.93. There has been volatility during this period, the entire first half. Coromandel continues to hedge its exposures on a conservative basis. Thank you all for your continued support and interest in Coromandel. We look forward to your interactions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management will be able to address the questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have follow-up questions, please rejoin the queue. Our first question comes from the line of Somaiah V from Avendus Spark. Please go ahead. Thanks for the opportunity, sir. Sir, my first question is on the manufactured EBITDA per ton in the fertilizer segment. Quite a robust current quarter. If you could just help us in terms of what are the key drivers in the current quarter which helps us to be much better on comparable, let's say, Q1 or previous year quarter. Also, how do we see things based on current subsidy rates and also the raw material price movements for the second half? That's my first question. We should track the EBITDA margin on a quarterly basis. As you rightly said, Q2 is a peak quarter for us, and I mentioned it in my communication as well. Phosphatic fertilizer production has been very good, and we are able to moderate the rock price increase. Efficiencies have been extremely good on all the plants. We operated the plants at more than 100% capacity, and the conversion cost has been good. All this plays into the mix we have, also helpful for us. The inventory of raw materials we hold, all this flows into EBITDA. Having said that, sometimes one quarter may look up more and one quarter may be less. As I've always been mentioning, as a company, we target the minimum INR 5,500 of EBITDA per metric ton, which we are confident of doing in the second half as well. Got it, sir. The second question is on this. In the case of gaining market share vs DAP at a country level. We're initially seeing signs of DAP prices now kind of coming off. If DAP availability improves, how much of this conversion could be sticky? Can there be some reversal as prices come off and availability of DAP improves? You are not clear. Can you please repeat the question? I couldn't hear you properly. Yeah, yeah. Sorry. My question was on NPK's gaining market share vs DAP. NPK has taken a bit of market share from DAP. In case DAP availability improves, let's say 6 months out or 12 months out, how much of this is sticky? How much of this could reverse? I think more and more farmers are seeing the benefit of balanced nutrition NPK. I'm not sure when this pricing mechanism of DAP will undergo a change. If that happens, please understand, this NPK shift is happening when DAP is INR 13,500. I won't say availability at this point of time because the DAP is available. The imports have gone up and we have adequate inventory happening in the system. In spite of that, there is an uptick in NPK. If at all the availability improves, at some stage, DAP pricing gets aligned with the market. I don't think any major shift back to DAP will happen. As a country, we should move towards balanced nutrition. That's what is happening on more extension activities and companies like Coromandel will be persisting on this. I see this shift is for good. Got it, sir. Just last question from my side on the P hosphoric acid and the Sulfuric acid expansion. What is the level of utilization we can expect in FY 2027? Also, from BMCC, what are the current volumes and what can we expect in FY 2027? We will never be commissioned the plant. As you know, we commission as we commit and then achieve 100% in the first month. Hopefully, I should repeat this TAP record and we're paying for 100% capacity utilization next year for both Phosphoric acid and Sulfuric acid. As far as Senegal rock is concerned, at least we should expect 300,000 tons of rock coming in this year. Our plans are to see how do we scale up the volume to 500,000 next year. Hopefully, we should try and do it. That calls for some additional investments here which we are working on. At this point of time, I'm confident that we should aim for 500,000 tons next year in Senegal. Helpful, sir. Thank you. Thank you. Thank you. Our next question comes from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah, thank you for the opportunity, Sankar. Congrats on a good set of results. Sir, post this NBS policy, do we plan to take any price hike in NPK as an industry? Or how do we plan to defend our profitability? What I can say, NBS policy provides pricing freedom for NPKs. Whatever it is required to be taken to, keeping in mind the needs of the farming community and ensuring availability of fertilizers and Input cost sector, we'll take appropriate cost. I'll be able to put the number whether it be done at the industry level or a company-specific level. Finally, the industry has been very risky in terms of price corrections, and that will be followed through. Sure. Sir, while we don't talk about Dhaksha so much, last year, same time, there was a lot of excitement from Dhaksha, at least in the investor community. Last quarter, we also highlighted about the board revamp and the new team. Incrementally, sir, what are the developments in Dhaksha and by when should we see order execution and fresh orders? How much was the revenue from Dhaksha in H1? Dhaksha is focusing on new product development and executing different orders. The execution of different orders depends on evaluation of the current prototype we have made. These different orders take a long time, and they go through a detailed evaluation process. In this case, it has taken much longer time. I agree with you. We could have started this and executed this order three to six months before. That's the reality. We are proceeding with the government. As and when the evaluation goes through, we should be able to get the order going. It is a starting table. Once the order comes through, the future orders should not be a problem. Currently, we are in this stage. It has taken longer time than what we thought initially. Besides that, Dhaksha is also focusing on Agri drones. The advantage to Dhaksha being Coromandel Agri Input company is buying these drones for carrying out drone spraying services. We have given a lot of Inputs in terms of improving the maintenance uptime, increasing additional features on the drones, improving the battery life, improving the economics of drone spraying. Many things have been worked out. We're in minutes to everything in terms of the numbers, in terms of volumes we are selling. A lot of activities and initiatives are undertaken at Dhaksha level, and it will take some time. Any startup may not play out immediately. We have patience, and we'll try to work on it. It's a high-tech area, and we are getting right partners to ensure that we create a proper ecosystem. There has been change in the government guidelines as well, which we are forced to follow through in terms of the sourcing of components. As per Murugappa Group, we are very responsible on this, and that is why it is taking time. Sure. Sir, other expenses in the last three quarters, every quarter has grown significantly. What would be the reason for same? Lastly, on Phosphoric acid new plant, when are we starting with trial run? From which month? And commercial production from which month? First question, what is that? I didn't get your point, Prashant. The first question was, other expenses in the last three quarters have grown significantly between 30%- 50% every quarter on a YoY basis. What would be the reason for it? It must be the normal course of business. I need to come back to you on whatever, but there was nothing abnormal in this. Sometimes we do have government certifications. Okay. Also, we have a shift in our approach in terms of recognizing the CSR expenditures. In the past, it used to be year-ended. Now it's being spent on a quarterly basis. My CFO says that could be one area where there has been an increase in the CSR expenditure. Also, one of the expenses in terms of various consultancies and engagements, that is also forming part of it. Answer, on Phosphoric acid trial run would start from which month? Will include NACL as well. Also, NACL transaction has had one-time consultancy charges, as I mentioned, in terms of open-off legal charges. Those may be the numbers which may be pronounced in the last two quarters. This may be one of which will come down as we move forward. OK. Sir, lastly, Phosphoric acid trial run and commercial production will start from which month? December, we are looking at mechanical completion. January will be trial run, and production should start by second or third w eek. Thank you, sir. Thank you so much for your time. Thank you. Thank you. Our next question comes from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity and congratulations on good performance. First question on the crop protection side. While there is some bit of benefit because of the integration of NACL for the quarter, if I look at the margins, which is on your slide number 12, the standalone CPC margin vs the consoled CPC margin, is there a loss that NACL had made in this quarter because your standalone consoled EBIT is lower than the standalone EBIT? Yeah, your observation is right. Standalone, the EBIT is quite healthy. As you rightly pointed out, 15% has moved to 20%. Including NACL, it is almost flattish. The reason being, on NACL, there is one of exceptional items and expenses were there. Also, we don't consolidate full quarter performance into the numbers. We take proportionate from the time it has become a subsidiary. It takes, say, 40 days in a 90-day quarter. Probably it may not reflect when the expenses might have got captured, it may not reflect the full benefit. It's a combination of proportionate period consolidation and one-time expenses, which has led to lower margin. Fair, sir. That's helpful. Will it be possible to share the quantum of that one-time expense? I think it is there in the NACL published result. Okay. No problem. I think NACL result, if you look at it, it's appearing as. Growth as an exceptional item. Sure. And just secondly, from a growth outlook perspective, any thoughts on how are we looking at NACL's existing portfolio? Is there a need to maybe cut off some of the lower margin product, or how do you plan the growth expansion there? And commensurate to that, how should one look at the consolidated margins on the crop protection side on an annual basis going ahead? It's a good question. It needs some time in terms of how do we realize the synergy benefits of both the companies. Fortunately, not much of an overlap in molecules except for Profenofos. The market segments they cater to are also different. They have a very strong domestic formulation business with a significant but different set of molecules. Coromandel has found in different states, complementing each other. We try to synergize the R&D effort. We don't duplicate on the same chemistry. We also try and see how best we can introduce our pipeline products so that we don't repeat the same in both the companies. I think with the deputation of senior resource from Coromandel to NACL, there's been a lot of alignment. I would say that 1+1 should become three. It will not come down. It won't be a rationalization; it will be a growth opportunity for both the companies. Having said that, Coromandel crop protection business has got a different margin profile, which is in the high of 17%- 18%. Whereas if you remember, NACL margin profiles are in the range of 9%- 11%. It's fallen off to 4%. Whatever currently the team is trying to do is get to 9%- 11%. Slowly, we need to get the pipeline products, innovative molecules, contract manufacturing to bring the margin of NACL on par with Coromandel. That may require some time and effort, and that's what the NACL team is doing now. Sure, sir. That's helpful. Just one follow-up here. From a revenue growth perspective, given that you mentioned the distribution network for NACL vs Coromandel, there is a lot of complementary areas that we can expand into. Does that also mean the standalone Coromandel portfolio can grow at a much faster pace given the geographical expansion? Absolutely. There is an ambitious growth plan for Coromandel crop protection business, both in terms of active ingredients in the global market, making a global presence on B2C in Latin America. We are seriously evaluating some opportunities. With domestic formulation, we'll be expanding territories. We are not even at a four-digit formulation business turnover in India. In a INR 29,000 crore industry, we are very small. We have put in place an action plan to scale up the domestic formulation business. We have enough product portfolio with a lot of efforts put in in the last three years. We have enough molecules in place. Our aim is to go much faster in domestic formulation business in crop protection. In global markets, we will be focusing on capacity creation and microchips, which will help us to increase the volume and product portfolio. We will also look at B2C light model in Latin American markets. Each business will pursue the growth opportunities on overall consolidated level also. This will be in the growth of 20%- 25% of pipeline, which could happen across segments and across both the companies. Great, Sankar. Just last bit on the CapEx side. Now, given that last part of the Phosphoric acid and Sulfuric acid expansion will be over, how are you looking at our annual CapEx run rate going ahead? We still have this granulation plant CapEx happening. We have announced quite a few CapEx in the last few quarters: MAP project at Kakinada, and also the joint venture in gypsum project to manufacture plaster of Paris. We have additional capacity creation at Senegal mining operations. We will keep looking at expanding debottlenecking capacities in both fertilizer and crop protection. We will be looking at new product registration, new capacity creation for active ingredients, and downstream projects for Mancozeb and other molecules to strengthen raw material security, like how we capture value chain in fertilizers. We will try and do that in crop protection. We have very good pipeline of projects coming in, and we will continue to invest profitably. Great. Thank you for answering all my questions. Thank you, and all the best. Thank you. Thank you. Our next question comes from the line of Naushad Chaudhary from Aditya Birla AMC. Please go ahead. First, on the, assuming next year Sulfur and Sulfuric acid prices correct or normalize, and same we experience in Phosphoric acid, how would that change in terms of your EBITDA expectation from the company? See, it is a function of multiple things, right? Where Phosphoric acid is there, where DAP price is there, how Sulfur behaves. Always, manufacturing of Sulfuric acid using Sulfur burner and generating power is the most economic thing to do. Once you create capacity, that value creation will happen. The Sulfuric acid plant, what we have invested in Bhagod, has almost paid off 60%- 70%. Balance will get paid off during this year. Similarly, the payback of the current investment, which is happening in Kakinada, will happen in the next two years. I think the value addition, one is ensuring the supply security of acid, is very important. Power generation, which helps the running of the entire complex, is the second important thing. The value addition is likely to be better only in the coming period than what we are witnessing at this point of time. That can only positively impact EBITDA much better than what we have at this point of time. Irrespective of the direction of these prices, there will be a positive impact. Is that understood correctly? Absolutely. The value addition of Sulfuric acid will bring in the desired savings. We did talk about it. When I say that a INR 1,000 crore investment will pay back in two, two and a half years' time, you can understand the economic in terms of what it can add to the bottleneck. At what price assumption will we calculate two years of payback? All these prices are linked there, right? DAP, DAP to acid, acid to rock. We play on this thread. The thread will get sustained, and I think two to two and a half years' payback should be possible. What was the non-subsidy EBITDA share in this quarter? I'm not sure what number has been read. There's no specific data point which we'll not be able to share. Thank you. Thank you. Our next question comes from the line of Ranjit from IIFL Capital. Please go ahead. Yeah, sir. Thanks for the opportunity. My first question is on the global dynamics. While we have been seeing a consistent inflation in the Phosphoric acid, we haven't seen any commensurate inflation in the rock. What is leading to this disparity? Good question. If it changed, it's good for us. I thought we should appreciate it. I think new opportunities are also coming up on rock. A lot of sources are opening up, and Egypt is increasing the output. Jordan output is increasing. Multiple sources, and we have also expanded our mining operations. Additional resources are helping to keep the price normalized. That's what I would say. This increase in supply in rock should help us in the higher spread, at least in the foreseeable future. Right. Yeah, sir. That's helpful. Thank you. Second question is, would you be able to share any granularities with regards to MAP capacity, even though the board has approved, but we haven't shared any details with regards to capacity and CapEx? That would be helpful. We are actually planning to make modular investment. At this point of time, the first phase will be 25,000 tons, which involves capital outlay of INR 150- INR 170 crores. Okay, sir. Thank you. And the last question is on earlier, we do have plans to refine phosphoric acid so that we would be able to be a part of the battery chemical supply chain. Any further thoughts on this? We have been working on fine-tuning the technology. We have been talking to the technology providers. We need to ensure that how do we recycle the output of the purification. We are trying to work out the business economy. Also, it is very important when we come up with the end product, we need to have a tie-up for the customer. It has to be for the desired quality standards. That process is going on. As and when we're ready, once we're ready with the proposal internally approved, then we'll be able to share that information. Any timelines we can provide? It's a one or two-year process. Six months. Sure, sir. Thank you. That's all from my side. Thank you. Thank you. Our next question comes from the line of Riju from Antique Stock Broking. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. A couple of questions regarding the price side. If you could share the price side for the NPK portfolio that you have taken during 2Q? Can you please repeat? I couldn't understand your question. The price side that you have taken during 2Q, if you could share the number? For the NPKs. This is an ongoing routine thing. I don't remember anything we have taken recently. We need to take depending on the subsidy rates which are recently announced. We need to pay by the month depending on the cost structure and the subsidy level. Understood. In your opening remarks, you have shared that Phosphoric acid production gone up by 17% during this quarter because of some debottleneck that you have done. If you could share the current Phosphoric acid capacity that you have. It is between 4.5- 5 lakh tons. That's the capacity that you are having for the Phosphoric acid? Sorry, sorry. Can you please reconfirm again? So Phosphoric acid capacity currently, if you could share the number? 2 lakh tons. The current capacity of what we have at Bhagod is 4.5, and 0.6 at Sarigam, totaling to 5.1. The new one which is coming up in Kakinada would be another 200,000. We'll have 7 lakh tons of Phosphoric acid. Yeah. Sir, 4.5+ 0.6, this includes the debottlenecking that you have done during this quarter? Correct. 5+ 2. 2 is the new one which is going to come up now. Understood. Yeah. Sir, one bookkeeping question, if you could share in terms of the current inventory that you are having at the dealer level or the retailer level, if you could share that number. I don't remember. It must be in the range of 6- 7 lakh tons. I don't remember the exact number. I need to check. I'll ask Nush to get that. It must be in the range of 6- 7 lakh tons. This is as per the manufactured volume. Is that correct? We'll have a combination of both, manufactured and [audio distortion]. Okay. Okay. Understood. Understood. Sir, in terms of the BMCC numbers, as for the current quarter, is it fair to assume that BMCC is now profitable or it's now also making loss at the EBITDA level? No, it is making profits here. It is making good profits. You may not see the benefit of it in the consolidation because of various accounting treatments we give for the initial acquisition and other things. At the base operation level, the business is doing profitably because we are scaling up. Understood. Thanks for the clarification. Sir, one last question. If you could indicate the current prices of Phosphoric acid and the Ammonia. Current Phosphoric acid is INR 1,290. Ammonia is in the range of INR 400-INR 450. Understood. Thanks. Thanks. Thank you. Thanks for clarifying all the questions. Thank you. Our next question comes from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah. Sir, can you talk on the crop protection side? How is the export business performing? Sorry, can you please repeat that? I'm asking in crop protection, the export business performance? Export business, as I mentioned, one of the major components is the Mancozeb volumes. Both in terms of volume and profitability has grown very well. That has been one of the key drivers for this quarter profitability as well as for the half year. That will continue to remain as a major focus for the full year as well. Export business has grown for this quarter by almost 6%- 7%. On an annual basis, 12%. There's been a good traction on this Mancozeb molecule, which has been quite good. Profitability is better than that. Profitability growth? Very good. Profitability growth has been extremely good. Any other driver why PBIT margin has gone from 15%- 20%. Any other molecule we are targeting for export market in the next couple of years? Sorry? Any other new molecule we are developing or targeting for the export? We are working on quite a few molecules. We have created capacities. We have got one of the molecules called Boscodate for which research is happening. Pyroxystrobin, there are other molecules. We are increasing the capacity like Malathion. We have pipeline of two, three optimistic molecules we are trying to introduce. Strawberry in chemistries we are working on. I think we have additional capacities both in Coromandel and the active ingredient securities as well as in NACL. We'll be coming up with these molecules over a period of next two, three years. We have pipeline of production. For domestic crop protection, ex of inorganic, how is the performance in the top line and profitability side for Coromandel formulation business? August, September has impacted the sale volume. Otherwise, it was going good. It's 11% growth, but on an hourly basis, it's at 20% growth. Overall for the year, we expect 25% growth in formulation business over the last year. If everything goes well, Coromandel's formulation business, including what we sell through retail, should reach the critical size of INR 1,000 crore, which is very significant. Combined with B2C business of NACL, which is again in the range of INR 1,200 crore, it's a very sizable branded formulation business. Here again, our pipeline of new products, our co-marketing products, in-licensed molecules in Japan are going to be helpful for us. Even this year, our share of new product sale has been 25%. We are increasing our territories, as I mentioned in my remarks, and that has paid off well. Some of the new molecules we introduced during this year, we could achieve full year budget in the first six months. I think crop protection domestic formulation provides enough opportunity with lesser CapEx, which we'll be focusing on. We have enough product portfolio now to meet the customer requirement. Thank you. Thank you. Our next question comes from the line of Dhruv Muchhal from HDFC AMC. Please go ahead. Yeah, sir. Thank you so much. You mentioned the phosphoric acid expansion, which I believe is about INR 1,100 or 1,000 crore CapEx. We'll have a payback of about two years. If I just do a rough math, I get an EBITDA per ton just on the Phosphoric acid plant. I believe that you're mentioning, including Sulfuric, is about $250, $300. Is that a sustainable run rate now? I think the number historically used to be much lower. We are not off the target. I'm just trying to understand if this can sustain. What are the drivers? What's leading to this change vs the historical trend? Is it because the rock, you believe rock can remain lower irrespective of the Phosphoric acid prices, can remain lower given the supply dynamics have changed? Is that the key driver? We also try and produce our own rock from Senegal. We also ensure that we blend various grades of rocks and different quality of rock. We don't depend on high-grade rocks. Our blend changes. We do many things right. We try to see that the new plant which is coming up has got a metallurgy which can handle a low-grade rock as well, and it's on a different technology. Accordingly, we ensure that we buy low-grade rocks and blend it and sustain the margins and improve the margins. That's the way we look at it. That's the only way we can sustain the business. Got it. When you say payback of two years, this includes the Sulfuric acid also, right? This is not just Phosphoric. Effectively, what I'm trying to understand is $250, $300 per ton m argin that I've implied, that is including the Sulfuric acid, right? Yes. Got it. Perfect. Thank you so much. That's all. All the best. Thank you. Our next question comes from the line of Lakshmi Narayanan from Tunga Investments. Please go ahead. Thank you. I just want to understand how we have expanded our reach in terms of fertilizers in India in the last six months. I understand that we had seeded certain markets sometime back when there was short supply of complex fertilizers. I just want to understand what is our reach and how is geographically. The revenue stacked up? The new market like UP, Rajasthan, MP, we have increased our volume from 100,000- 200,000. This has happened in the half-year period. This trend will continue. We'll try and see how to take at least a million ton to the markets which we have not sold so far so that when the new capacity comes in, we'll be able to fulfill the demand. Besides that, we are expanding our footprint in retail. As you know, we are increasing to 1,200 by the end of the year, and ultimately, we will move towards 2,000. That also provides opportunity for us to increase the presence across the key states. Of course, they are primary markets, but that will be more influenced with our own retail outlet. We do get some subsidy for transportation. How many kilometers it actually covers? 1,400. Effectively, we can reach most of the parts of India, right? Okay. Absolutely. Key markets where we want to sell. Got it. In your opinion, how is the competitive scenario in the complex fertilizers looking? Because we are expanding, but as an industry, others are not expanding. How do you think this will pan out in the next 3-5 years? As a country, we need to move towards balanced nutrition, which means NP and NPKs have to increase their share, and DAP needs to come down. With the focus on unique grades, which is currently at 35%, we continue to innovate and come up with new products. We feel generic NPKs will not be sufficient. We need to come up with NPKs plus micronutrients like zincated NPKs. We also need to come up with store release and control release fertilizers. All have played out time. I think this industry will get transformed into more use efficiency products rather than generic grades. That requires a lot of pricing freedom, innovation, and early adoption and fast approval process, which we are pursuing with the government. That's the way we look at it, and that's the reason you can see there are only a few companies who have also been branding our product Gromor. Each of the products, categories, subcategories are also getting branded separately because we need to communicate the trust that farmers have got on the product, communicate the value proposition. We continue to do it. You're absolutely right. This competition can be intensified, and it is important that we need to have that strong connect with the farmers. We're the only company to have agronomists educating the farmers on the unique features of our product. Got it. Any views on these Nano fertilizers? How is this actually in acceptability as well as the preparedness for us? We have been going steadily well on Nano DAP. Our communication right from the beginning has been, instead of two bags, we will substitute one bag of DAP and one bag of Nano DAP bottle. We have done this s tudies across all ICAR institutes in the country. Response has been very positive. Farmer usage has been good. Adoption has been improving. We are doing very systematically. We have our own people educating the farmers. It will take time. From a traditional bulk fertilizer of 50 kg bag, making him accept a 1 L bottle will take time. That is the process we are going through now. We have seen the positive feedback and response from the farming community. We are quite happy with that. It is working very well on fruits and vegetables, high foliage crops. We have also increased our volume, almost doubled the Nano DAP volume in the first half. I think it's one of the innovations which the Indian industry has come up with, and they should sustain. It requires very sustained efforts and very careful education of the farmers and not to push the product or tag the product. That's very important, and I hope the industry will be responsible in doing it. As Coromandel, we have always been focusing on proper education of farmers and let them make the choice. It's also environmentally friendly, and we will continue to focus on it. We are quite happy with the way the product has been accepted. At our retail centers where we have our own Agri graduates communicating with the farmers, we have seen that farmers are willing to take a look at this product in terms of trying it out instead of DAP. That's a great opportunity now when there is a challenge in availability of DAP as well. It can be a boon for the farming community. Got it. Thank you so much. Thank you. Thank you. Our next question comes from the line of Meghna Agarwal from Mount Intra Finance. Please go ahead. Hello. Yes, yes, please. Hi. Thank you for the opportunity. I just wanted to confirm, as you saw, that there is an exceptional item in NACL for around INR 17.25 crore. Can you just confirm the details? Can you give it a run-up or what is it all about? It's a transverse accounting adjustment to harmonize the accounting policies between Coromandel and NACL being same auditors, and we are trying to align this. The real footnote has been given in the terms of NACL. I think it may be more appropriate to refer to. Oh, thank you. Thank you so much. Thank you. Ladies and gentlemen, we will take that as our last question for the day. I would now like to hand the conference over to the management for the closing comments. Thank you very much and for the very insightful question. I really appreciate your interest in Coromandel. Thank all of you for joining the call and also thank Harmish for organizing this call. I look forward to future interactions. Thank you very much. On behalf of Phillip Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.