Conference is being now recorded. I now hand the conference over to Mr. Siddharth Gadekar from Equirus Securities. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on the Godrej Agrovet Q2 and H1 FY 2024 earnings conference call. From the company we have with us Mr. Nadir Godrej, our Chairman of the company, Mr. Balram S. Yadav, the Managing Director, Mr. S. Varadaraj, the Chief Financial Officer, and Mr. Anurag Roy, the Chief Executive Officer of Astec LifeSciences. We would like to begin the call with a few opening remarks from the management, following which we'll have the floor open for an interactive question and answer session. Before we start, I would like to point out that some statements made in today's call may be forward-looking, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Mr. Nadir Godrej to make the initial remarks. Over to you, sir. Good afternoon, everyone. I welcome you all to the Godrej Agrovet earnings call. I hope you are doing well. Godrej Agrovet continued to deliver a robust improvement in profitability as profits before tax grew by 53% year-on-year in quarter two, fiscal year 2024. While revenues grew by 5% year-on-year, EBITDA margin improved by 183 basis points in quarter two, fiscal year 2024, as compared to quarter two, fiscal year 2023. Except for Astec LifeSciences, all the segments delivered growth in profitability. The domestic crop protection business maintained consistent good performance in the second quarter on the back of good volume growth and realizations in the in-license portfolio. Our food business continued to deliver healthy volume growth in branded products, along with sustainable margin expansion. The poultry business recorded exceptional profitability, while the dairy business achieved EBIT breakeven in quarter two, fiscal year 2024. In the feed segment, cattle feed and aqua feed categories maintained strong volume growth. In the vegetable oil business, lower end product prices were more than offset by growth in volume of fresh fruit bunches. However, Astec LifeSciences continued to witness an extremely challenging external and market environment. Now, coming to the key financial and business highlights of each of our business segments. The animal feed business recorded 16% year-over-year growth in segment results in quarter two. The cattle feed category continued to gain market share and maintain growth momentum with 16% year-over-year growth in volume. The aqua feed category also registered 15% year-over-year volume growth on account of higher fish feed sales. Softening commodity prices and higher realizations in the cattle and fish feed categories led to significant improvement in segment margin in quarter two. In the vegetable oil segment, the strong volume growth in fresh fruit bunches by 17% year-on-year was more than adequate to offset the lower crude palm oil prices and marginal decline in the oil extraction ratio. Crude palm oil and palm kernel oil prices were lower by 16% and 24% year-on-year, respectively. The standalone crop protection segment continued to deliver an outstanding performance in the second quarter as well. Growth in quarter two was primarily led by the in-license portfolio and product mix rationalization. Segment results grew by 149% year-on-year, with segment margin of 29.7% in quarter two. In October 2023, an in-license insecticide from Nissan Chemical Corporation, Rashinban, was launched. This was a global launch for the first time in India. Rashinban will provide effective protection against a wide range of pests in the chili crop. Along with Hanabi and Gracia, the addition of Rashinban will enable us to serve the entire value chain of the chili crop. In Astec LifeSciences, revenues and margins were impacted due to continued price erosion and sluggish demand for enterprise products. High levels of channel inventories in export markets and continued industry-wide destocking has further delayed recovery. However, the contract manufacturing segment maintained robust performance on account of a new product. The CMO category revenues in quarter two, fiscal year 2024, were 3.5x vis-a-vis quarter two, fiscal year 2023. The dairy business maintained positive momentum in quarter two as well and turned EBIT positive. Value-added product revenues grew by 19% year-on-year. With this, the sales for value-added products increased to 37% of total sales in H1 fiscal year 2024 from 34% a year ago. A higher gross margin, coupled with operational efficiencies, translated into significant improvement in the EBITDA margin of 412 basis points, for which Tyson delivered another quarter of remarkable performance in quarter two, fiscal year 2024. The live bird category achieved better-than-expected results on the back of improved cost efficiency and realization. This is despite quarter two being a seasonally weak quarter. The branded business reported healthy volume growth of 14% year-on-year. Our joint venture in Bangladesh, ACI Godrej, recorded its revenue growth of 13% year-on-year on a local currency basis in quarter two, fiscal year 2024. This was mainly driven by higher volumes as compared to quarter two, fiscal year 2022. That concludes our business and financial performance update for the quarter. 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 their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment as the question queue assembles. There are more than 20 parties in the conference. The first question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, good afternoon, sir. Thank you so much for taking my questions, and congratulations on good set of results. Just two broad, broad, you know, topics I wanted to understand. First, on the market share gains in animal feed, especially cattle and aqua. If you could please just help us understand what exactly is the reason, you know, for this continued market share gain? And, you know, whether this would- you would expect to continue this across all the animal feed categories going forward. And the other one was just with regard to Astec LifeSciences. You know, given that, is there some sort of discomfort that we might be encountering from customers with regard to our own domestic business when we sort of pitch for contract manufacturing, you know, tie-ups with them? Is that sort of a hurdle that we need to cross, and if so, how do we, you know, overcome that hurdle? Thank you so much. So thank you for your question. I'll answer the animal feed question, and Mr. Anurag will take the Astec LifeSciences question. Two reasons why we have improved market share in fish feed and cattle feed. In fish feed, we commissioned a plant in UP last year, which came into full capacity this year. So it is mainly because of geographical expansion that our market share is increasing. Now we are present in UP, Bihar, Madhya Pradesh, Chhattisgarh, as well as Assam, and we are improving our presence in West Bengal. As far as cattle feed is concerned, again, I think our dominant position in Maharashtra is further strengthened because we commissioned one more 90-ton per month capacity in June this year. In Maharashtra, we have more than 20% growth over last year in Q2 because of that new capacity. We believe that we will continue to increase our market share in cattle feed and fish feed category. Hello, Abhijit, Anurag here. For your question on Astec LifeSciences, I would assume you mean that our domestic sales coming from CPB and B2B versus the Astec CMO business, right? That's what you were trying to ask, whether there's a, Yeah. Yeah, so just to clarify, what I meant was that, you know, given that we have a domestic branded business as well, is that a source of discomfort for potential customers with whom we might be engaged in negotiations or discussions? So, CPB has been our base business right from the start, and Astec also been positioned within the fungicide space and having our relationship with the innovators. We do not see any conflict when it comes to getting more CDMO business for Astec LifeSciences, primarily because our way of working with the innovators are completely based on relationship, complete transparency, also leveraging the unique sets of technology platforms which Astec has. So we have been very clear in those communications right up front with our customers, so giving very clear indication on what CPB brings to the table and what Astec brings to the table. And as most of us are aware, we are a separate listed company. In a lot of cases, we have very clear firewalls also in place, wherein there's been no exchange of information. In a few of the cases, our contracts are also set in such a way wherein we have very clear clause that, there'll be no conflict going from B2B to B2C, zone, unless and until approved by the customer. So as of now, we haven't seen any of those, conflicts arising, and, I think our approach would be to work with transparency with the innovators and, highlight all our strengths in both the businesses area and then move forward with it. Got it. Thank you so much for answering my questions, and all the best. Thank you. The next question is from the line of Lokesh Maru from Nippon India Mutual Fund. Please go ahead. Thank you. So I have a few questions on the feed segment. To start with, what is the EBITDA per kg at this point, for the segment, and what is the outlook, going forward into Q3 and Q4 on margin per kg? EBITDA per kg, hmm? Yes, sir. So this quarter, EBITDA per kg was- EBIT per kg was about INR 1,531 per ton. So normally we have seen in H2, our EBITDA is about 10%-12% per ton higher than H1. So we believe that we may average anything between INR 1,650-INR 1,700 per ton in H2. Sure, sir. Understood. And, so cattle feed segment obviously is doing quite good consecutively, right, for the last two years. But what's happening in the broiler and layer feed segment, which is dragging the performance of this? Cattle feed, I think one thing which is happening is, which also is reflected in our Creamline Dairy business, is number of cattle increased, which was not the case for last two years. That is why you saw secular increase in milk prices. The second thing is that milk prices are still okay and remunerative, that is why there is lot of category conversion. Apart from that, the new capacity in Maharashtra has also added to our market share. As far as poultry, I will tell you, broiler keeps on going up and down, and you know that the market is also shrinking because of increased integration. But we used to have very dominant position in layer feed. We still have dominant position in layer feed, but once in two, three years, it happens when the egg prices go down, there is excessive culling of layers. So we suffered because of that, and that is why you see a 17% degrowth in layer. It is not that people have stopped eating eggs, it is just that there is a gap in production right now. My sense is that within this quarter, you will see our volume growth in layer feed start with. So worry is only broiler feed, and then for other segments we are okay. Sure, sir. The last question from my side is on the oil palm segment. Our volumes have been up 17%, but average realization has been down equally. But still if you see the segment results, they have been positive, right, 10%. What is the disparity in these two numbers? Yeah [audio distortion]. I mean, the decline in realization is enough to offset the growth volumes. So how are we still, you know, growing 5% on top line and 10% on within palm oil? For us, the realization came down by almost 16% per metric ton in CPO, and about 24% per metric ton in PKO. Segment revenue has grown by 10.5% because of increase in volumes by 17%. Mm-hmm. That is point number one. Point number two, we had some leftover inventory from Q1, which was disposed of in this quarter. And about small part has been contributed by... Now we are not a CPO, crude palm oil player. We are a refiner now, so we get slightly good, better realization from the output of refining CPO, which is clearly only in the FFA. This segment should continue to post better results, as we have started refining now, right? Yeah. So, one thing which I must tell you that what refining has done for us is that every year we used to have, lot of discount on CPO because of, FFA. Because the demand would be very, patchy. So when we carry the oil in our tank for some time, the FFA increase, and there used to be a discount for higher FFAs. So there is no discount this year, so that is point number one. And point number two is also that the number of customers for Olein, et cetera, are much more than number of customers we had for CPO. So that is one advantage, so the price realization and price discovery is better. Sure, sir. Understood. Thank you so much. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask questions. The next question is from the line of Rikin Shah from Omkara Capital. Please go ahead. Hi, my question is for Anurag. I wanted to understand what the inventory positioning was as of March 2023 versus now. We had INR 295 crore of inventory as of March 2023, and INR 204 crore now. I wanted to understand how much was high-cost inventory back then and how much remains now? Yeah. So from quarter one, as you would have seen, there's been almost, you know, INR 85 crore-INR 90 crore of depletion in the inventory levels which we have seen. And at a very broad level, without getting into the specifics, I would say almost 40%-50% depletion has happened for the high-cost inventory, and the remaining is for the CDMO inventory which we were carrying. So that's the overall picture from the inventory perspective. Okay, got it. And, in terms of, spreads for the enterprise molecules now, so have the, are the RMs currently suitable to make a, you know, good EBITDA margin at current pricing? So clearly the RM prices on most of these enterprise products have also come down significantly. So if we look at, you know, the domestic market, based on the existing RM prices, you could still make, you know, a single digit contribution margins, assuming that the players are, vertically integrated to a particular degree. But on export markets, still the RM prices are not low enough to make positive contributions. So that's the situation right now on some of these enterprise products. Okay, that's it from my end. Thank you. The next question is from the line of Aejas Lakhani from Unifi Capital. Please go ahead. Yeah, hi, team. My first question is for Anurag. Anurag, could you just, in propi and tebu, could you just call out what exactly is happening, at, you know, end customer levels from a stocking slash restocking slash destocking perspective, please? See, I think this has been a very common question which we're getting from the last 2.5 quarters, and we are also accumulating a lot of this information based on our primary research with the customers or, you know, what we are hearing from the market. So as we see right now, we still see some amount of destocking happening in the global markets. Seems like September, October, at least on the price front, the bottom has been reached out. In Latin, primarily in Brazil, which has been the root cause for all these destocking from a year or so, it seems like it should even out. That, again, you know, based on some of the customers we have been talking and some of the industry players, that by, say, end of this quarter or the early next quarter, as the demand starts picking up, destocking or the excess stock in the market, at least for the Latin, followed by the Europe market, should be more or less evened out. U.S., we are getting mixed response from our end customers as well. In few of the cases, they are still not coming back with the 100% level of, you know, the volumes they were historically buying from us. It's ranging anywhere from 30%-50%. So just based on our limited customer profile, it's giving us an indication that the destocking or the inventory levels, at least in the U.S. market, might take at least two more quarters to even out. So that's how the situation is, you know, on the destocking level. Demand, there has been positive signs on demand potentially coming back say December, January, Q1, the season for these markets and obviously, you know, it's been muted for almost the entire previous season. So there's an expectation that demand is likely to come back, but we would still see significant pressure on the prices. So, you know, that's how the things are on the supply-demand side, the destocking by various regions and what we are picking up from the customer. Got it. That's helpful. And secondly, on the run rate that you have seen on the CMO side, can we expect, you know, the run rate to go into the second half? Because typically, second half is better than your first half. So your comments on that. And then, going into 2025, how should we think about the CMO business, and at what size and reach, capacity, that, you know, you require capacity to grow there on? Right. So our goal, you know, as we get into H2, is at least to, you know, get to, our H1 numbers for CDMO. Because on H1 as well, we have really pushed the pedal on CDMO. So we are expecting that, you know, we do H2 as good as, H1 as we get into this year. But as we have indicated in our previous calls as well, our forecast is heavily on CDMO. There's a good amount of pipeline business which we have generated now based on our new R&D center as well. So we continue to maintain these growth rates. Obviously, you know, we have been doubling our CDMO business over the last two years, it was from a smaller base. As we move forward, anywhere, say, in between 25%-40% year-on-year growth is what we expect on the CDMO side of the business. In terms of the bottlenecks, you know, we are realigning our existing Astec footprint, which we have primarily in Mahad, to bring out as much CDMO as possible with new investments in the herbicide plant. Clearly, we would need more investment in greenfield, which we have announced or, you know, spoken about in the previous investor calls as well. As we move forward over the next year or so, we would definitely need to commercialize some of our greenfield investments. That's how we see the CDMO business growing 25%-35% year-on-year, that's our target. You know, investments as and when we keep scaling up the business year-on-year. Got it. Thanks. Balram sir, my next question is for you. You know, one is just a data point, if you could speak about what is the OER today, and you know, since you know, you've been gaining market shares and cattle feed and vegetable oil is on a you know, good footing with the outlook quite clear in terms of FFBs and you know, the refinery and the traditional crop protection business is in good stead today. I want to speak to you about capital allocation on your you know, dairy and the Tyson Foods business. So, as you are aware that it's been employing a lot of capital and not generating returns, and the trajectory that you've exhibited is quite, you know, it you're following that path, but when can we expect the, you know, segmental improvement so that the capital employed is justified there? So first question was about OER. So quarter two, FY 2023, OER was 18.41. Quarter two, FY 2024, that is current year, is 17.91. And if you remember in my last call, I said that the erratic rainfall, it started early, then there was a gap, and it happened affect OER. But I must also say that there is a very smart recovery month-on-month, and we crossed 19% in October. And October, we crossed 20%, in September we crossed 19%, and we are holding above 20%. And the good news is that it has again rained in some of our plantation areas, and if this continues for another three to four days more, we're likely to have more FFB and better OER in whatever season is remaining. So that's point number one. Point number two, you asked me about capital employed and capital allocation. INR 246 crore have been capitalized this year. We have made investments. Of that, major chunks have gone into oil palm plantation and in the Astec LifeSciences business with a new herbicide plant. And as Anurag said that we would need this capacity once we grow CDMO business, which is just around the corner, and we are very confident that we utilize it. In the oil palm, we did take a refinery and solvent extraction plant, and I told you earlier about the benefits we are getting in terms of better price, no discount because of FFB, et cetera. And we believe that these investments will pay much faster than we had envisioned because the efficiencies are very good. Lastly, the dairy business. The dairy business, I must say, is EBITDA positive in Q2. There is a major improvement, largely because of efficiency improvement. If you want some numbers, I can give it to you. That last year, our contribution net one was INR 54 crores-INR 55 crores, and we have gone to about INR 92 crores this year. Half of it has come from definitely reduced milk prices, but also the other half has come from volume growth and the efficiency improvement and product mix. I must also say that we are taking help of consultants for last seven, eight months to improve efficiency. It is only this efficiency of about INR 15 crores has come only from August onwards, when the project has been implemented. My view is that, not only we will turn profitable this year, breakeven this year, but we'll also turn profitable. However, the focus will also always remain on value-added products, and that is where you will get maximum bang for the buck. We are glad to say that as compared to last year, our saliency in the VAP stock has gone from 34%-37%, in spite of the fact that it has not been a very good year for beverages, because of erratic rainfall and rain, but we see the monsoon peak, so it affects all this. So we are very conscious about capital allocation. I can definitely say that no further investments are planned in both the food businesses, animal feed business, aqua feed business. Only the focus is oil palm plantation and asset. Astec, definitely, we believe that we once we look at our traction we are getting in the CDMO business, we will continuously invest in capacities in future, because that is more insulated and more sustainable than the enterprise business, so that seriousness is worth dealing with here. Got it. And sir, just one last question on the traditional crop protection side. So you have now the portfolio of, you know, Gracia, the new product that you launched, Rashinban. So is it the same sales channel, or are you expanding the sales channel as well? And is it the same dealer network or, or are there different, sort of distribution touchpoints? So I must tell you that both have happened. One is because of the wonderful products, our quality of distribution has definitely improved. And of course, quality looks good because we suffered last year, and after that, we have put lot of controls in the business. So we are ready to suffer loss of sale, but not create toxic inventories and better. So that is the motto we are going with. But I must also tell you that because of the, because of Gracia and now Rashinban, which are coming, these are insecticide which are for vegetable crops, and we got label claims for chili already, which consume 10% of the total insecticide, pesticide, sales in this country. So we are making forays into vegetable crops, which was a weak area for us. So I think in those areas, we have increased our distribution in numbers also. I'll tell you that it has taken some time to get registrations, et cetera. COVID one, COVID two has taken a toll on lot of our hygiene issues, but all this is behind us. And there's a decent pipeline of products we have right now. So we have almost six products to be launched in the next three years. This is in-licensed, right? Incrementally. Yeah. Some are in-house also, which are the mixes, and some are in license. Yeah. Sir, you mentioned that the quality of distribution has been enhanced. Could you give me some color on what that really means? Quality means that the size of the distributor is very important there. Because if you really ask me, in agri business, distributor is also the banker. All the best, and thank you. Thank you. Thank you. The next question is from the line of Viraj from SiMPL. Please go ahead. Yeah, hi. Thanks for the opportunity. Just a couple of questions on the Astec part of the business. You know, especially, you know, so on, say, Tebuconazole and Propiconazole, what you talked about in terms of contribution margin, which we are earning right now. So in the past, we talked about three to four major players from China, which used to drive the overall market dynamics. So if you can just probably give some color in terms of overall capacity, are we seeing any further addition in these two molecules and generally also in Triazole? And any change in terms of market adjustment you're seeing. So if you can comment on that. Right. So I can, you know, talk broadly, not specific to these two products, but in terms of the global market segment, clearly, we do not see more capacities coming in the market. In fact, over the last couple of quarters, we have seen reduction or in terms of closure of some of the plants or the capacities, because of the reduced demand or the destocking that has been happening in the industry. So, there has been muted demand on one of those products which you talked about, wherein the demand has not come for the last three quarters. You know, the swing is almost 60%-80% in terms of demand uptake. On the other product, you know, or I would say in some of those products, you still have demand that has come back, but there's an overcapacity situation from China, and China, particularly in the export market, has, you know, completely degraded the price points, just to take on more volume. So that has also, you know, led to a lot of these companies not able to sell into the export market or sell at margins which are even less than their production cost or even at negative contribution. So I think the entire fungicide segment, if you would see, the current scenario, they are the worst hit. The domestic market had some green shoots, but, you know, the first season has not kind of pushed the fungicide market too much. The second, the coming season, there's been some good hopes, that there could be some green shoots, coming in within this segment of the whole segment from the domestic market. And as the season open up around for Latin, North America and Europe, we might see some demand evening out, but prices might take a little bit longer to still come back to the previous levels. So extremely challenging, market conditions which we are facing, in this whole segment. And, you know, might take another quarter or couple of quarters for us to, get back on the margins, which these products were fetching us historically. So you talked about the overall you see in last couple of quarters, you've already seen some amount of capacity adjustment happening. You know, still you kind of seeing at current prices, players not making any money at the contribution level in exports. So, what is the level of overcapacity you are seeing in the marketplace? And other than China, say, in last three, four years, have you seen any other capacity or have you seen increase in number of players in the overall triazoles space? And that's the biggest question which all of the companies are toying with: how much more of excess capacities are there in the market? And that's where the destocking which we are seeing. So I think we also got the assumptions wrong as we got into this year. We were thinking, you know, excess capacities could be 20%-30% of the total global market. But what we are finding out is, you know, we are almost at 60%-70%, and still we are talking about destocking. So it would lead me to believe that, you know, almost a year, year and a half long of stocking has happened with the onset of COVID period and due to the supply/demand shock over the last year, year and a half. But again, you know, these are just based on our analysis or our position right now, and very difficult to comment anything beyond this. Okay, just two more questions again. There's no other than the Chinese players, there's no change in the number of players, either from India or outside India or China in this space. Do you see any, is it more new players have entered the space in the last three to four years, or they are the same players, but maybe they expanded capacity from existing players? No new player, we can confidently say, at least in this segment. China, you know, January, when they came on board, there's been increase in their capacities, particularly for the export markets, because I think they came up with a strategy that they have to just flood these markets on whatever demand that is out there by crashing the price point. So they've briefly increased the capacities that time, because historically, a lot of these China plants were running at lower utilization rates. But after that, I think what we have also picked up is, a lot of these companies have also cut down or curtailed on their capacities now. So slowly and steadily, you know, with the destocking happening, the supply-demand situations are returning back to the original positions, as we have seen historically. And in terms of the enterprise CDMO mix, if you can just give for H1 for this quarter, and if CDMO, if you can just give some more color in terms of, you know, how many molecules and, and how many customers we currently cater to, existing, you know, what we have, the orders we have. It's, I think, I think historically, what guidance we have given is, you know, three or four new molecules every year is what we kind of quote with the target. With the new R&D center coming in, I've bumped up those new molecule target to almost double, and that's the goal which we are working on right now. So we plan to have, you know, six to eight at least molecules at any point of time. So that 20%-30% of that we could easily commercialize year-on-year basis. So that's, that's the goal of the plan which we are working on. The CDMO enterprise, and also in terms of the existing business which we already cater to, you know, how is it spread in terms of, say, number of molecules or customer base? Yeah. So we could, you know, even connect offline for more- Sure. Details or discussions on this. On the existing one, as you clearly know, we had four to six molecules which are in different stages of scaling up. So there are a couple which are almost at the stage of commercialization. There are others which are almost getting to the stage of commercialization over the next one to two years. But we can take this offline in more detail. Sure. Sure. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask questions. The next question is from the line of Jagdish Sharma. Please go ahead. Hello, sir. This is Jagdish. I have one doubt on expansion plant. What is the timeline for getting it commissioned, and what is the peak capacity it can do, and what is the top line and EBITDA margin can deliver? Can you please clarify that? On herbicide. Yeah. Aspect. On the herbicide plant, the second herbicide plant has been from the capacity size perspective, it's exactly the same as the first one. Our guidance remains the same as we had put it for the first herbicide plant, that we would, you know, fully utilize this plant in 2.5-3 years with an asset turn of 1.6-1.8. So we stick to those guidelines as we, you know, commercialize this second herbicide plant. We are working, our teams are doing a great job on commercializing or bringing it to potential, you know, commercial levels over the next three to four months. So we still keep that indication that by end of this financial year, we should be able to commercialize that second herbicide plant. What is our top-line margins there, in this way? We normally do not get into those details, but as I mentioned, you know, if you are bringing in INR 120 crore of investment, if you look at the asset turn of 1.6-1.8, CDMO business are roughly, you know, 5%-7% higher contribution as compared to enterprise. So you could do the math yourselves there. That's, that's how we kind of look at it at a very broad level. But obviously, our in- Okay. is to bring in the molecules wherein we could have maximum asset turn coming from our plants, and obviously fetch the maximum margins and utilizations. But that's the way- Last question. Yeah. Okay. Yeah, last question. You have mentioned that you are expecting CDMO business to grow 25%-35% year-on-year. Just so for we can, can we take this for the next three, four years or five years, or you are mentioning it for next two, three years? See, at least for the next two, three years, because you will also appreciate we were growing from a very small base. You know, two, three years back, our numbers were in only two digits, you know, less than INR 50 crore, INR 40 crore. So initially, you could easily double it up, and you could grow at 40%-50%. But then from that base, you know, we get to higher than the industry growth rates, number. So if industry is growing at 10% or 12%, we'll aim to grow at 15% or so. That's how we see it from the growth perspective. Okay, sir. That's all from my side, sir. Happy Diwali. Thank you. Happy Diwali to you. Thank you. Thank you. The next question is from the line of Rikin Shah from Omkara Capital. Please go ahead. Yeah, thanks for taking my question again. So I just wanted to ask on the CDMO end, you know, what kind of molecules are we now being able to target with the new R&D coming in? And earlier, you were targeting $10 million-$15 million proprietary generic molecules. So now, in terms of the current basket and the new ones coming in, like, how does that change? Sorry, I missed out the last part. You mentioned, earlier we were targeting INR 10 million-INR 15 million? dollar size proprietary generic molecules, and now with the new R&D coming in, does that change the size of the molecule that we are targeting? Okay. See, one is on the size of the business or the size of molecule. Yes, historically, we have been, we haven't had a proven, you know, molecule or a CDMO project wherein we have looked into large volumes, you know, scaling up to, say, thousands of metric tons. So now with the new R&D center, we definitely are in that position to even focus or target those molecules, and that's at top of our list to get some of those molecules in our kitty. So that's to answer your later part of the question. Your first part of the question was, what kind of CDMO business? At a very broad level, there are three components of CDMO business which we are targeting based on our new R&D center. One is, you know, with the innovators, starting with the contract development, holding their hand, right up to commercial phase. So that's one innovator pipeline business which we are targeting. The second one are, some of these enterprise products or generic products, which are to be licensed out by the innovator. We could be either exclusive partners or one of the few partners, from these innovators. So that's the second pillar of our CDMO business. And then, third is, you know, one-off unique chemistry business coming in, from innovator, either in the enterprise space or, you know, could be the innovator space. So I think those are the three different categories of the CDMO business which we are targeting, across the innovators. Historically, Astec has done a good job in developing relationships in Japan. We have further, you know, deep dive into it. We have recently, you know, increased our footprint in Japan as well to get closer to our customers in Japan with a local presence. And then we have also actively started working on CDMO players in the Western geographies, in U.S. and Europe markets. Okay, thanks a lot. That's it from my end. Thank you. The next question is from the line of Manish. Please go ahead. Hello. Hi, sir. First of all, congratulations on a good set of numbers. So my question is to Balram, sir. Sir, can you tell me how much growth can we expect in the oil palm business in terms of mature plantations within acreage, you can tell? There'll be two phases of growth if you talk about long term. So we will have close to about 8%-9% organic growth in FFB arrival, and about 2%-3% added to it because of our productivity improvement initiatives through our one-stop shop for solution, proper fertilization, proper management. So next three to four years, you will see a 12%-14% rigor as well as FFB arrival. With the start of NMEO-OP scheme last year, we have upped our game in terms of area coverage. Till, say, FY 2023, we were covering 3,500-4,000 hectares net, and from this year onward, we'll be covering 10,000-12,000 hectares net because we got more allocations in Telangana and Northeast. To give you a flavor is that our seedling nursing capacity in the first half of 2023 was about 1.2 million, and today it is about 3.2 million seedlings. So you will see a growth, big growth coming in when these plantations come into production five years from now. So 12%-13% will jump to 17%-18% in four to five years. Sir, how much area is matured? Just a flavor of that, how much area is exactly generating revenue? So, about 60% of our area is mature, and about 20% is between four to eight years, and about 18%, 19% in 0-4. But this segment of 0-4 will grow in a big way in here from next year on, from this year onwards, actually, FY 2024 onwards. Okay. Okay, sir. And then crop protection business is doing quite well. I'm just concerned the margins are sustainable. The margins which are showing right now, are these margins sustainable for the coming quarters also, sir? I think it also depends on season. I must say that we had very good season for our in-house products, particularly Hitweed and Hitweed Max, and we broke all records. I think one of the reason is that it rained on time, and it did not rain on time also. Because plenty of times we used to have a problem that it was not raining on time, and when it rained, it rained a lot, so then the farmer could not go for spraying. So we were a bit lucky here. So we had a very minimal return. The other big thing happened was this Gracia proved to be a blockbuster product. We were left with zero inventory at the end of the season. Most of the sales were either on cash or on very controlled credit. I think a lot of things have gone right. We would like to believe that with the introduction of new molecules, year on year, we will be able to probably keep the ballpark margins same in time to come. Having said that, I must also use a caveat that it is also dependent on weather. For next half, can you just tell me how much the business is spread in first half and the second half of the year, like, for last two quarters? Yeah, just hold on. I don't know. First half used to be three-quarters of the business. Hmm. The two more molecules, first half will be something like 60%, and second half will be about 40%. And my sense is that in case Rashinban gets full, if we get more label claim and we get the full potential, it might become 50/50. The direct procurement, what is the percentage there? Have we increased some percentage in direct procurement of the milk there or not, sir? Yeah, yeah, yeah. So, hold on here. We'll give you exact projection. So in FY 2023, direct procurement was 19%. In FY 2024, it is 38%. That's very good. No, this is focus I'm telling you. Most probably next year, FY, it will be more than 48. I won't be surprised if it touches 50 also. Far in, according to our gross margins, according to our peers in the particularly dairy business, or there is something less in? So there are two things which we should keep in mind. One is the level of value addition and scale. So if people we compare with are Hatsun, Heritage, and Dodla, all of us are bigger in scale as far as we are concerned, and Hatsun has a decent amount of value addition. To just give you a flavor that Hatsun is about 29% gross margin, Heritage is about 18% gross margin. Heritage gross margin is not because they sold some bulk also. So maybe they will be at 22%-23%, and Dodla is at about 24%. And this quarter, that is Q2, we have reached about 21.2%, which is a 5.3% jump over the same quarter last year. My sense is the efficiency benefits coming in, I think on a year, overall year basis, we will finish between 22%-24%. I think next round of improvement will come from increased volumes, because most of the efficiency benefit will factor in, in this year. Actually, our dairy plants are working right now, so we have the enough capacity to cater this demand there? Or do we need to put some more capital into the business? No, no, no. I think that all we get, I answered all the questions you asked on capital allocation also that time. So we have adequate capacity in both value-added products and in milk. And whatever capacity is needed for some short shelf life products, hardly cost anything, maybe INR 2 crore-INR 3 crore a year. Can you just give some guidance for the top line and PBT margins there? So, one thing I must tell you, with our efficiency improvement drive, we have dropped some volumes also in milk, in non-lucrative, lucrative geographies, where we were stretched in terms of supply. Now, at when milk costs were very, very high, I would say benign, it was a profitable business for us, but no longer with milk cost and logistics cost both going up. So my sense is that this year we might grow about 11%-12% in top line, and we will cross breakeven even more probably easily by January or February. Corporate level, the consolidated guidance, if you can provide any, and the PBT margin on the consolidated chunk. You tell me. Because the only, I don't think the black box we have is Astec LifeSciences. And most of our assumptions have gone wrong in terms of estimates of what kind of inventory overhang we have. So I would refrain from making any guidance here, because I think what we assume for Astec will be just conjecture. But let me just tell you one thing is that it is better than last year. Yeah. Yeah? Thank you. Ladies and gentlemen, we take that as the last question, and I would now like to hand the conference over to the management for closing comments. 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'd 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.