Please note that this conference is being recorded. I now hand the conference over to Mr. Mit Shah from CDR India. Thank you and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on the Godrej Agrovet Q4 and FY 22 earnings conference call. From the company, we have Mr. Nadir Godrej, Chairman of the company, Mr. Balram S. Yadav, Managing Director, and Mr. S. Varadaraj, Chief Financial Officer. We would like to begin the call with a brief opening remarks from the management, following which we will open the forum for an interactive Q&A session. Before we begin, I'd like to point out that certain statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would like to invite Mr. Nadir Godrej to make his initial remarks. Thank you, and over to you, sir. Good afternoon, everyone. I welcome you all to the Godrej Agrovet earnings conference call. I hope and wish you are doing well and are staying safe. The financial year 2021-2022 turned out to be a strong financial year for Godrej Agrovet in terms of top line growth with strengthening profitability. We recorded a total income of INR 8,385.7 crore in financial year 2021-22, growing at 33% as compared to the previous year. Our quarter four growth in total income was also excellent at 44.9% year-on-year. The consolidated profit before tax grew by 92.4% and 22.4% for quarter four and fiscal year 2022 respectively. Please note that the above numbers are excluding exceptional and non-recurring items and the breakup of the same has been provided in our earnings presentation for the quarter. Our consolidated balance sheet remains strong with net debt to equity in a ratio of 0.57 as on March 31st, 2022, largely unchanged from the previous quarter. Now, I will discuss the key financial and business highlights of each of our business segments. In animal feed, we achieved 20% growth in volumes in Q4 as well as in financial year 2021-2022. The volume growth was achieved across key feed categories and was mainly led by new products and market share gains. In Q4, the segment results were impacted due to the continued rise in input commodity. However, for the full- year 2022, segment results grew by 22.2% year-on-year. There were several factors driving growth in segment results, such as timely price hikes during the year and R&D benefits and strategic stocking initiatives. The vegetable oil segment witnessed the most remarkable year. The combination of improvement in yield levels and all-time high oil prices led to almost 2.9 times year-on-year growth in segment results in fiscal year 2022. For the fourth quarter, segment results were higher by 6.2 times as compared to quarter four fiscal year 2022. The average prices of crude palm oil and palm kernel oil increased by 51% and 90% respectively in fiscal year 2022 versus fiscal year 2021. Improvement in the oil extraction ratio in fiscal year 2022 was driven by R&D and operational efficiencies. For the standalone crop protection business, it was one of the most difficult years in terms of operations. The monsoon turned out to be extremely erratic and uneven, limiting application opportunities while input cost inflation continued to impact profitability. In the second half of the year, we focused on improvement in channel hygiene, which led to higher sales returns and increased provision for doubtful debts in the third quarter. Consequently, fiscal year 2022 standalone crop protection revenues and profitability were below our expectations. Moving to the performance of our subsidiary, Astec LifeSciences delivered its best quarterly and annual performance in quarter four and fiscal year 2022. Revenues grew by 68.2% in quarter four, while it closed the year with a growth of 21.9%, reaching INR 676.6 crore in fiscal year 2022. The robust performance was mainly driven by higher export realization and a favorable product mix. Astec achieved EBITDA growth of 82% and 38% in quarter four and fiscal year 2022 respectively, with higher realization supported by backward integration benefits. Our poultry subsidiary, Godrej Tyson Foods Limited, registered a revenue growth of 45.8% in quarter four fiscal year 2022, led by strong volume growth in Real Good and Live Bird categories. EBITDA for the quarter also jumped to INR 16.2 crore, as live bird prices rose sharply on a demand rebound. For the full- year, top line growth of 30.1% was offset by falling EBITDA on account of elevated feed costs throughout the year. Our dairy subsidiary, Creamline Dairy Products Limited, continued to gain market share in value-added products, such as curd, buttermilk, ghee, whipped cream, et cetera, in its key markets. As a result, revenue from value-added products grew by 16% in quarter four and 27% in fiscal year 2022 over the corresponding two years. This further translated into CDPL's total revenue growth of 20.2% and 13.8% in quarter four and fiscal year 2022 respectively. However, unprecedented inflation in the entire basket of input costs had a severe impact on CDPL's margin profile. While quarter four EBITDA growth was higher at 29.7% owing to product mix and increase in end product prices, there was a degrowth in margins for fiscal year 2022. GAVL's joint venture in Bangladesh, ACI Godrej Agrovet, recorded another quarter and another year of strong performance with revenue growth of 41% and 24.5% in quarter four and fiscal year 2022 respectively. All feed categories, that is cattle, poultry and aqua feed, witnessed strong demand and market share gains in Bangladesh. That concludes our business and financial performance update for the quarter and the full- year. With this, I close my opening remarks. We will now be happy to take your questions. Thank you. Thank you very much. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Anyone who would like to ask a question, please press star and one at this time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nitin Awasthi from InCred Equities. Please go ahead. Hello, sir. Thank you for the opportunity. The first question would be, just as per my understanding, it is the aqua division in the feed segment which is the most profitable among the other feeds, which is poultry and cattle. Is that understanding correct, sir? Yes. Aqua is part of the feed segment. Yeah. Is it more profitable than the cattle feed segment and the poultry feed segment, which includes broiler and layer? No, not this year, because. Traditionally, that is the case. I beg your pardon? Historically, that has been the case. I believe this year there has been disruption. Because of two reasons. One reason is that, high soya meal prices and fish meal prices ate into the profitability. The big problem is that, there are certain price controls being exercised by Government of Andhra Pradesh. A full passthrough has not been possible in aqua feeds, particularly in the state of Andhra Pradesh, which is the main state. This is not only for us, but for all, fish feed and shrimp feed players. Understood, sir. Also in your presentation, you have not mentioned the growth or degrowth in the aqua segment compared to cattle, broiler and layer, in which you have shown impressive growth. If you could just give us that figure, if possible. We can give you that offline. This variance is close to 10%. Hello? Mr. Awasthi, is there any other question? Mr. Awasthi, we cannot hear you. Please confirm. Due to no response, we'll move to the next question. Before we take the next question, we would like to remind our participants, you may press star and one to ask a question. The next question is from the line of Saurabh from AMSEC. Please go ahead. Thank you for the opportunity. Our Q4 volumes in the animal feed was lower than Q3. Was it only because of aqua or are you witnessing you know at a higher price realization there has been some demand destruction? I think Q4 normally is a weaker quarter anyway because it is off-season for aqua, both for fish and shrimp. There was a little bit of demand destruction also, particularly in broilers. Because of low prices, the broiler population really went down in January and February, and it is only in the March the placement started and, so these were two reasons why, Q4, is lower than Q3. Any guidance in terms of the volume growth, for next year? I think it was an amazing year for us in animal feeds last year, where we grabbed a lot of market share because the markets in different segments were either flat or decreasing. We grew. Totally we have grown almost 20.3% last year. I must tell you that this is an opportunity which does not come our way every time. I would be very happy if we register anything between 13%-15% growth in volume in the coming year or this year, current year. That is what the trend of April is also showing. Okay. Hold on. Having said that, just wanted to also put one more perspective in terms of Q4 performance. Q4, the volumes of most of our product categories has grown. On an overall basis in animal feed, we had a growth of around 20%, in Q4, led by cattle feed, which grew by almost 25% and layer feed, which grew by almost 28%, vis-a-vis quarter four of the previous financial year. Okay. Now coming to the pricing, now we are seeing some pressure on the margin. Have you taken a further price hike or how is the inventory situation in terms of the you know for the bean feed or the inventory upon the animal feed segment? I think for shrimp feed and fish feed in Andhra Pradesh, and for the obvious reasons of government interference in the pricing, in all the other states and segments, we are taking a continuous price increase because the inflationary conditions continue. Whether it is de-oiled rice bran or corn, in spite of it being a season, the prices are at least 10%-12% still higher than last year. The only respite has been that government has again allowed import of soya meal, and the soya meal prices have dropped by about 10%-12% in last one week. I think as and when needed, we are taking price increases, but I must also qualify that this price increases with a time lag. This takes us about two to three weeks after the raw material prices have risen to probably take a price increase. You must always keep in mind the time lag will remain. Okay. The next one. On the whole, I think 90%-100% pass-through is possible. Okay. Your Crop Protection business. FY 2022 was a bit challenging for the standalone Crop Protection business. How should we see, you know, for the next season and also any new launches that is lined up? I think everybody knows that what happened, and I think we are not out of place because most of the other companies also are reporting returns and a little bit of challenging debtor situation. Having said that, we bit the bullet in Q3. We have taken back the raw material. We have made extra provisions also just to clean the balance sheet for future and not to punish future because of last year. Of course, that money will be recovered and most of the stock which has been taken back will be, I would say, redispatched because all of this stock had almost 1.5 years of expiry remaining. Having said that, we have been extremely careful. New processes and systems have been set so that we don't get into a jam like this. We also took consultants' help who are working on this project for last six months to set processes and set checks and balances so that in case there is a COVID wave or drought we should not get into a similar jam. In fact, this division had a very good track record for almost a decade, but one monsoon failure and consecutive waves of COVID definitely threw us off balance. I'm very sure that with lot of discipline, we will regain our lost glory. We are not very aggressive in going for top line this year, but we will come back to 13%-14% EBIT on sales, which has been norm. This will be much cleaner sales, and we will maintain the hygiene in the market. Okay. Lastly, on the oil palm oil business. If you can provide, you know, the area and total palm oil. Last time we had number of about 72,000 hectares. Has it increased? And also the total FFB arrival for FY 2022 and oil extraction ratio. I think palm oil, I think a lot of hard, good work we have done has been masked by high prices. I need to tell you that last year was an amazing year from the point of view of improved efficiency. Whereas OER improved significantly from, I think 17.5% to 18.75%, which was a very, very big improvement, which came in because of lot of procedural changes, better management, new equipment and some R&D initiatives which we took in oil recovery by using several physical and chemical methods. I think that has been done there. The overall increase in FFB processed last year was 9%. 9% because we lost a few 2,000 tons to Telangana because of price differential. The Andhra Pradesh government was very sluggish in revising the formula. Telangana government was very, very proactive. Just because we have contiguous area, this flight of fruit keeps on happening, and it was a significant number we lost last year, but not anymore. That's point number one. Point number two is that, yes, I would say that we are close to about 70,000 hectares already. This year again, we are going to do 4,000-5,000 more expansion. But I must also tell you that net increase is only about 3,000 hectares because uprooting keeps on happening. Now that NMEO-OP scheme is there, once we get allocations in northeast and in other states, we might increase this number to 7,000-8,000 hectares a year from next year onwards. This OER, can it be sustained now at 18.75%, or can it be further improved? Definitely the target is because I think, better analysis, better equipment, better technology. A lot of work has happened for last three, four years with this because, you know, more OER is more profit for us because we pay on fruit weight. I have a feeling that definitely this is sustainable this year, but most probably we will take more steps to improve it further, next year also. Okay. Thank you and all the best. Going by April and May to- date, it is sustainable. Okay. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants, we would request you to please limit your question to two at a time. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Thanks. Thanks for the opportunity. Sir, just one question. Has Godrej Agrovet gained market share across segments, considering this has been a very tough time for most of the unorganized players? If true, can you indicate the market share gains also in past one year for the company? Yeah, thanks. Look, on animal feed, I can definitely tell you that we have had an unprecedented year and when the market has not grown or de-grew in most of the segments. I must tell you that we have 20.1% growth in cattle feed, 32% growth in broiler feed, 26% growth in layer feed. We had almost 21% growth in shrimp feed. Unfortunately, fish suffered because for fish the first quarter, that is April to June, is very important. April to June was wiped out in rural India because of COVID too. I think there we de-grew almost about 18%. Overall, I would say that there is a big stride in our market share. Definitely I'm not talking about basis points. I'm talking about at least 2%-3% improvement in our market share in each of these segments. We believe that, we have got into dominant position in several states, particularly in cattle feed and layer feed. We are very, very hopeful that not only we will be able to maintain that leadership, but also add one or two more states in this list. I must tell you that even though we are the largest cattle feed player in the country, we were not number one in any of these states. Now, this year we have regained our number one position in Maharashtra, and most likely one or two states will also be added in the next few quarters in this list. Okay, sir. This is very, very helpful. Many thanks. I think since we talked about market share, I also need to tell you that in several categories of poultry and dairy, particularly the value-added products, as per Nielsen we have had major gains in market share in Andhra Pradesh and Telangana. Thank you. Anyone who would like to ask a question, you may press star and one. The next question is from the line of Vidit Shah from IIFL. Please go ahead. Hi. Thank you for taking my question. Could you provide some color and outlook on the vegetable oil business, and, you know, prices and availability, demand of the palm oil and palm kernel oil. I mean, where do you see this going, given the volatility in the market? Today the CPO price is close to about INR 150 a kg, and the CPKO price is close to about INR 220 a kg, which are totally unstable because at these levels there'll be huge demand destruction. The two big variables at this are the Indonesian government's policy, because Indonesia is one of the biggest suppliers of palm oil. Almost they produce about 48 million tons. They have banned exports for some time just to cool off their domestic prices. They have to withdraw that ban because the season is coming. They are going to produce good quantities of palm oil, and they have storage of 6 million-7 million tons only, which will get filled in next week or two. Ultimately this ban is going to go, and definitely the CPO prices are likely to come down in next few days. My sense is that they will come down, but they will not come down to last year levels of INR 90,000 or INR 100,000 at this time. Because there is another variable, which is the Ukraine-Russian conflict, where almost 22 million tons of sunflower oil has been out of the market for some time. I think the palm oil is the only substitute for that sunflower oil. I believe that even though the prices will come down, they will continue to be at least 10%-15% higher than last year. Let us see how the season progresses, because I think regulatory environment is also very, very important in exporting countries. We have our fingers crossed. We believe that the prices should come down because demand destruction is disastrous for the industry in the long run. We are also waiting for the Indonesian government's some policy decision. I have not been in touch for last three, four hours because today there was a meeting supposed to happen in Jakarta, so I don't know. My sense is that these are the two big variables. Balram? Balram, I would like to add that apart from sunflower oil, the Ukraine war has also impacted crude oil and gas prices. Biodiesel is made from vegetable oils, and therefore, the demand for biodiesel is immense. As long as crude oil is high, there is no chance for vegetable oil prices to fall. Yeah. Thank you, sir. Mm-hmm. Got it. That's very helpful. Thank you, sir. My second question was, sir, if you could just provide some outlook on, you know, some of the margins of the hit businesses. Animal feed and standalone, for example, standalone crop protection had, you know, an unfavorable margin movement this year. I mean, do you see this recovering in FY 2023? I mean, both are, you know, commentary is fairly positive with prices being passed on in animal feed and, you know, less provisions being taken in standalone. What extent of recovery can we expect to see in the two margins? One thing which I need to clarify that whatever I am talking, I'm talking about the whole year, I'm not talking quarter-on-quarter. Because definitely there'll be lots of macro-environmental factors, regulatory factors, monsoon factors, et cetera, which will affect quarter-on-quarter margins. I can definitely tell you that will the margins of animal feed business be maintained? The answer is yes. We will be able to maintain the same level of margin and register 12%-14% growth in volume. That I can definitely tell you. I can also tell you that most of our problems are behind us in the agri business. We may see a 15%-20% top-line growth, but we will see the profitability going back to 13%-14% PBT of sales what it used to be. Because last year, the biggest hit was sales returns. Just to maintain hygiene in the market and just to make sure that we don't have any obsolete unnecessarily, we took back the material. Which is not the case every year. My sense is in this, the margin will be maintained. In case the turmoil in OPP business continues, definitely I would say that margins will be better than last year in OPP business. If you ask me, Bangladesh, definitely it will follow the same trend as our animal feed business and slightly better because Bangladesh is mainly import-dependent. I believe that they will have some kind of position advantage which they have been taking for quite some time in last two to three months. As far as our food businesses are concerned, I must say that dairy, I think I'll speak later in case there is a specific question. In chicken business you will see improvement in margins, where I think that the prices which were lagging for some time have definitely increased and measured up. In our business, everywhere there is a time lag between cost increases and price increases, and that hurt us in January, February. You must have seen our smart recovery in the chicken business and margin, that will continue. In the milk business, the big problem is that we are unable to pass through the continuous increase in cost of milk because the cooperatives in South India are just not increasing prices. You'll be really surprised that last year 8%-9% of the cost increase was milk and because of petroleum increase, the packaging product went through the roof. The whole industry is going through this trauma. Even though we have a higher unprecedented growth in value-added products which are more profitable than milk. The cost or inability to pass on the total cost has definitely hurt us last year. Price increases have come, albeit a little late, but the cost of milk continues to increase. This is a very rare phenomenon in the industry. I've been here 22 years. I have always seen that prices definitely go down in the flush season starting August. For last two years we haven't had a flush. Prices have been moving northward and cooperatives are losing money, but still supporting the farmers. There I think the profitability and the margin rests on the fact that in case there is a flush, we are going to get very good margins because the prices are very high of poultry products. In case INR 2-INR 3 reduction in milk price happens, you can imagine that for last seven months we can even make 6%-7% PBT on sales in milk business because it is a scale business and INR 2-INR 3 is a big amount when we are collecting almost 8 lakh L-9 lakh L of milk per day. I'm saying that this is the margin profile. So far, so good. I definitely feel that this year will again present lot of challenges every year and we are just keeping our fingers crossed and waiting for the first one, which is the monsoon. Got it. That's helpful. Sir, can I just request one data point in terms of the share of value-added products in the milk business? Yeah. I think last year we have reached about 28% from 23% of total sales. This year it is going to be big. Let me just tell you one more thing, that you should not look at FY 2021 and FY 2022 to judge our performance because quarter one, which is April, May, June, in both years were COVID quarter. That is the time the value-added products, the ice creams, the lassis, the buttermilk, the flavored milk shakes, et cetera, move because of summer season. Unfortunately, this business has lost both the summer seasons to COVID. My sense is this year we are likely to end up more than a third, at least, value-added products. Okay. Thanks so much. That's it for. Thank you. The next question is from the line of Aman Vora from Premier Capital. Please go ahead. Hi. Thanks for the opportunity, and congratulations on a great set of numbers. I had two questions. The first was on the palm oil segment. You mentioned that we'd be adding net 3,000-4,000 hectares per year. We see Ruchi Soya and other companies also adding a lot of capacity. Like, do we have that endeavor of maintaining the number one position in the country? The allocation we have in, I'm not talking about states which we have exited, like Maharashtra, Karnataka and Gujarat because of lack of government support, because the farmers also had other opportunities. We are active in the states of Odisha, Telangana, Andhra Pradesh and Tamil Nadu. I can definitely tell you the kind of allocations we have, say 4,000 hectares per annum increase definitely can be done for next about seven to eight years. Telangana and Odisha, both are likely to give us further allocations. We have also applied in Northeast Arunachal Pradesh and Assam presents a good opportunity for expansion, and the government schemes are also extremely favorable. We are already present in Mizoram, so we know the lay of land and we know the challenges of that area. In case we get some allocation in Assam, we can definitely increase it from, say, 4,000 per annum to about 6,000-7,000 hectares per annum. Right. Got it. Second question is like we've been investors in this company for more than three years now. I want to understand from you more on a longer term basis, like there are a lot of moving parts because we are an agriculture-based company and it's affected by so many things in the macroeconomic environment. As an investor over two, three years, how should we look at on a consolidated basis? How should we look at the company? Whether you want to talk about top line or bottom line or margins, anything. Like, on a consolidated basis as Godrej Agrovet shareholder. Let me just tell you the portfolio is the strength and it is the weakness also. I'll tell you why it is strength. If you see our track record, I think the kind of turmoil this sector has gone in, but we have still maintained our profitability growth and we are still very solvent. Debt equity is 0.5. We are continuously investing and we are upping our investments in the businesses we are in. I think this, that way I would say that the business is solid. Lot of businesses hedge each other. I'll give you an example. Through R&D initiatives, we had substitute for soya meal in our poultry feed. The soya meal went up. As. We were so happy that soya meal is very high because we were able to substitute it with other raw materials which were much cheaper. That was through our R&D initiatives and huge amounts of money we had invested in last five years in that direction. That resulted in unprecedented growth in our poultry feed, unprecedented increase in our market share and unprecedented increase in our profitability. On the other side, it hit our aquafeed business significantly because we don't have any substitute in aquafeed for soya. It also hit our Godrej Tyson Foods business because the cost of production went up and we were left with huge amount of long-term contracts at lower prices with QSRs. These international multinational QSRs, because of our global relationships at Tyson levels, it was not possible to re-negotiate in the middle of the year. Of course, we have broken out of that tradition, and we have now negotiated processing chicken contracts on quarterly basis. I'm saying just see the hedge here. Definitely, I think, long term, we will continue to invest. AgTech will be another big vehicle because the opportunity is very big because China plus one opportunity and India becoming a very big hub for chemicals. You will see, you will see lot of investment going in AgTech life sciences. CPB business once comes back on track, every year we have something or the other to launch, either own products or in-licensing, so we can maintain a 15%-17% growth in top line and bottom line. Gracia is the one molecule which we have got from Nissan. It has a INR 200 crore opportunity in next three years, and we will show significant capture of that potential in first year itself. Having said that, our two underperforming businesses are milk and chicken. I think chicken is work in progress, and this quarter you will see much improved numbers in chicken. That will also give you some confidence that this is a game which we can play profitably and sustainably. The problem in milk business is that either the prices have to go up, which is going to be excruciatingly slow. The reason is because the cooperatives will be very reluctant to raise prices at consumer level. Or the flush has to come and the milk cost has to come down. I am very, very hopeful for the second because flush has been missed. We are seeing lot of improvements happening in rural India. People are taking care of animals. Eventually the milk will definitely come down. Right. By August or September. The way to look at it is from the positive side. From the negative side, some business is underperforming, and if we are able to fix them, definitely return on equity, return on capital employed, et cetera, will go up. We are just keeping our fingers crossed. We have done whatever is in our control, and I think a little bit of help from macro environment will definitely propel us into a 15%-20% top line, bottom line growth on a steady-state basis. Right. Madan, I would like to add two points to that. One is we are doing a lot of R&D, and we've increased our R&D spend in all the businesses. In businesses like animal feed and oil palm, we don't see others doing R&D at our levels. Of course, in agrochemicals, there are a lot of Indian companies doing a lot of R&D, but we have also stepped up our R&D spends, and that will help in the future. The other thing is the great commodity boom is affecting a lot of economies, but it's wonderful news for Indian agriculture. Indian agricultural productivity is very, very low, so there's very little opportunity to produce more anywhere in the world other than in India. This is a big opportunity, and Godrej Agrovet can take benefits from it, and India can benefit from it. Right. Thank you. I would just like to, like, mention this point here, like what Mr. Godrej mentioned. I'm extremely proud of that as a shareholder also because the R&D benefits and the R&D that Godrej Agrovet as a company is doing, actually you don't see on ground other companies doing when I talk to people around. That is something that I'm really proud of and all the very best and thank you so much. Just to give you the good news that our agrochemical R&D center, which will cater to Astec LifeSciences mainly and also crop protection business, is almost 75% through. We might just inaugurate that R&D center in October or November this year. I must say that we have not left no stone unturned in sophistication as well as capacity to create a world-class and top-of-the-line R&D center at Rabale in Mumbai. Great. Great. All the best. Thank you so much. Thank you. Thank you. The next question is from the line of Falguni Dutta from Geojit Securities. Please go ahead. Hello? Hello? Yes, please. Yeah, sir. Sir, pardon me for asking basic questions. I'm new to getting into, I mean, understanding your company. A basic question I had, what is the basis for allocation of plantation in palm oil business, suppose two companies were to apply at the same time? There are two things I must answer. First and foremost is that, in the existing areas where we have been allocated, every year government gives us a target which is controlled by the government to cover that area or to cultivate the farmers and convert them into oil palms. This target is based on the fact because the central government and the state government have to support the farmers for next three, four years. They see their budget and they say that, "Let us do only 10,000 hectares in Andhra Pradesh." Based on our performance in past several years, the different companies get, give different shares. We have been getting a lion's share out of that in both Andhra Pradesh and Telangana, including Tamil Nadu also. Now, the other interesting question, which is very difficult to answer, is the new allocation. Right? Today, Northeast has opened up this National Edible Oil Mission Oil Palm. There is a big outlay in Northeast. Northeast has become suddenly attractive because not only the government is going to support for a year or two, the farmers and the companies will be supported till 2035. That is the first time central government has made such a long commitment to any project. Now, there the most important states are Arunachal Pradesh and Assam. I must tell you that how they are likely to allocate is a black box because all the documentation has been done and we are just waiting that what allocations we will get because I think all the information has been given to them. I do not know whether we'll get any allocations or somebody else will take it because of some other reason. I don't know. There was a small pocket in Manipur, which was closer to our Mizoram facility where we have already got allocation. We are the only company who will be operating in Mizoram in future. I think that, as I said earlier, that we have at least a 10-year runway of 3,500-4,000 hectares per annum in the core states where we are already operating. Okay, sir. This is a genuine question. What if in your allocated area only if the farmer were to decide to cultivate some other crop? Is that allowed? I mean, if you want to shift from. I think that has been the history because one of the big problems with this crop is that it is a plantation crop. The big problem is that the first three to four years, even though the farmer is supported by the government in cost, but he does not have any income. At least 10%-15% of area which is planted is uprooted within one to two years because the farmer is not able to get any income out of it. The new policy addresses that. That's point number one. Point number two is that, my sense is that inflation has done wonders for oilseed industry, including oil palm in this country. I always believe no amount of government or private sector initiatives can deliver a result what inflation can deliver. It is a pulses moment for oilseeds in India. About five years ago, you know, pulses price went up by 70%-80%. It became very, very attractive for farmers and farmers are businessmen. Suddenly from a pulse deficit state, we became a pulse surplus state, at least till last year. I'm saying this is going to happen in oilseed. Of course, import dependence will be there, but we are seeing lot of conversion to oilseed, not only oil palm in the country. In oil palm also, you'll be really surprised that in FY 2022 and FY 2023, this will be the most profitable crop for farmer, and I can bet on any crop. Because normally farmers have made in the Andhra Pradesh, Telangana, where farmers are doing very well between INR 4-INR 5 per hectare in these two years. Per hectare per annum in these two years. My sense is that because of this reason, there'll be lot of acceleration in growth of palm and other oilseeds in the country. Right. Balram, you should stress that oil palm yields are higher than any other crop. Yeah. Yeah. Oil is the commodity that has inflated the most. Yeah. In addition, the oil palm produces a lot of biomass, and that has become very valuable because petroleum prices are so high. The oil palm trumps any other crop today. Normal traditional oilseeds like mustard, soya, cotton seed, groundnut, et cetera, they produce about 350 kg-700 kg per hectare of oil per hectare. Oil palm produces between 3.5-4 tons in Indian condition per hectare. Apart from biomass, you won't believe that the kind of biomass we produce in our factories produces 8 MW of electricity per day. We don't buy any electricity in our oil palm factories, which are very, very energy intensive. We have a stream of revenue from biomass, which is converted into bricks. Okay. Sir, one more question, related to this. Also a basic one. On what basis do we pay the farmers? I mean, is it linked to what? It's a fair formula. It is a formula which has been given by the central government and implemented by state. Unlike sugarcane, we pay as a percentage of oil price of that month. When the oil price will increase, the farmer gets paid more. When the oil price is decreased, farmer gets paid less. It comes to something like 78.5% of the oil price goes to the farmer, which is a very fair formula. Now, we don't have many marketing expenses et cetera, because we are sellers of crude palm oil and palm kernel oil to the refiners et cetera. Our fixed costs are low, whatever variable costs are there. Our profitability is very high in inflationary conditions. That is one big advantage we are having right now. Thank you. I would request Miss Dutta to rejoin the queue for follow-up questions. The next question is from the line of Depesh Kashyap from Equirus. Please go ahead. Yeah. Thanks for taking my questions. Sir, again, on palm oil segment, you talked about pricing and the profitability for farmers, but given that palm oil tree takes around four years to give the fruits, right? I just want to understand what is the volume growth outlook for this year, FY 2023. Do you see any disruption like the whitefly attack that we saw in FY 2021 to happen this year? Whitefly attacks, if it had to happen, it would have happened because whitefly attacks, the peak comes in March. Well, I must tell you that I think certain amount of trauma from nature as well as government has brought the industry together, and one of the best examples has been our whitefly control. Because if one company does whitefly, it does not help because from my plantation they go to the other plantation and then they grow there. I think it was done on community basis, total private sector effort, and we eliminated 99% of the problem of whitefly as of now. That is point number one. Point number two, we are expecting a growth of almost 17%-18% in oil production this year. About 75% because of volume increases and about 25% because of OER improvements and other efficiency improvement. Great, sir. Above there will be a pricing growth that we already seen, right? That I think will apply. Consult Indonesians and other questions. Right. Other question I had was on the ACI JV that you have, right? That has been doing very well for the last three years. If you can call out what is happening in Bangladesh, is the underlying market also growing at that rate, or you are gaining market share? Which particular segments are doing well for you there? We were number three last year. That is FY 2021. In FY 2022, I think that market also degrew because Bangladesh also had very severe COVID, and unfortunately, they did not have the kind of vaccine capability et cetera than what we had. There was a big drop in their industry, particularly in the first quarter, that is April, May, June, and they took some time to recover. One of the things is that we still grew about 13% in volume, which has increased our market share. We were number three, and I can definitely tell you that we are just knocking on the doors of becoming the number two animal feed company in Bangladesh. The margins dropped because of logistics issues because 90% of the raw material in Bangladesh for animal feed come from outside. You knew the container situation in the first half of the last financial year. There were a lot of ups and downs, cost increases, freight issues, et cetera. I think a 13% growth maintaining the margin at the last year level was a great show by the team, and it has definitely put us at a different level in this country. Right. Sir, which segments have been doing well, sir? Cattle, poultry or aqua, which segment? The segment which have not done well, and this is something which is very interesting learning for us, is that fish was under pressure in India also and in Bangladesh also. Poultry we did very well, cattle we did very well at. Okay, got it. This is a significant part of our business here, almost 1/4. Got it. Lastly, sir, you talked about the margin pressure in the shrimp feed segment. I believe the industry took a price hike in the month of March and again in April. Can you please confirm that Godrej Agro also took a price hike and by how much? Do you see the margin pressure easing now? Not at all. The cost increases was about INR 9 a kg. The price increase was about INR 5 a kg. The problem is that the price increase has to be negotiated with Andhra Pradesh government. That was a very big problem. Soya meal has come down in last one week because of imports coming. My sense is that even though the cost increase comes down to about seven and a half rupees a kg, we still have to go about INR 2-INR 3 a kg to cover the raw material cost only. I'm saying that. That has become a very tough place to do business. I only can say that. Got it. Only INR 5 hike that you took in March, that was the hike recently you have taken. Yeah, yeah. One of the things is that hike happens on the MRP, you know, then discounts, et cetera. What we get is little lower than what we take. Okay. Got it. Thank you, sir. Hike was more than 6%, and our NRV will get about 5% or something. Understood, sir. Thank you. Thank you, sir. All the best. Thank you. Thank you. The next question is from the line of Kashyap from Broadview Research. Please go ahead. Hi. Good afternoon, Mr. Balram. Just one quick question on the capital intensity in the business. The working capital has kind of moved up while obviously you're seeing good earnings growth, but compared to pre-COVID, where our working capital to sales was quite under control, the working capital has been moving up. Just wanted to understand your thought, what are your thoughts on, you know, working capital going forward and, you know, what are the levers you can use to pull it back to what it used to be earlier? The only places where working capital is better than aqua feed and better than CPB, which we are trying to control desperately. We love increase in receivables and advances because definitely our exports are growing rapidly, and we have currency benefits as well as margin benefits there. We love working stocks and we are carrying lot of stock in animal feed. Very good positions on certain raw materials. Same in aqua feeds. We are sitting on enough SMP and fat to tide over the milk shortage time in the milk business. Definitely I think movement in working capital northwards is largely because of stocks which we are carrying, and less because of debtors. I'm saying that I think if we do mark-to-market, we are in good situation as far as stocks are concerned. The only place we are going to be very careful is in CPB and in aqua feeds. Sure. Okay. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments. Members of the management, you may go ahead with the closing comments. Would you like to give any closing comments or should I go ahead and close the call? Thank you. I hope we have been able to answer all your questions. If you have any further questions or would like to know more about the company, we will be happy to be of assistance. Stay safe and stay healthy. Thank you once again for taking the time to join us on this call. Thank you. On behalf of Godrej Agrovet Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.