Ladies and gentlemen, good day, and welcome to the Q1 FY 2023 earnings conference call of PI Industries Limited. As a reminder, all participants lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation is complete. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nishid Solanki from CDR India. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q1 FY23 earnings conference call. Today, we are joined by senior members of the management team, including Mr. Mayank Singhal, Executive Vice Chairman and Managing Director, Mr. Rajnish Sarna, Joint Managing Director, Mr. Manikantan Viswanathan, Chief Financial Officer, Mr. Prashant Hegde, CEO Domestic, and Mr. Atul Gupta, CEO Exports. We will begin the call with key perspectives from Mr. Singhal. Thereafter, we will have Mr. Manikantan sharing his views on the financial performance of the company. After that, the forum will be open for question and answer session. Before we begin, I would like to underline certain statements that may be made on today's conference call could be forward-looking in nature, and a disclaimer to this effect has been included in the investor presentation, which has been shared with you earlier and also available on the stock exchange website. I would now like to invite Mr. Singhal to share his perspectives with you. Thank you, and over to you, sir. Yeah. Thank you, Nishid. Welcome, everyone, and thank you for your participation today. The macro environment continues to remain challenging, characterized by resurgence of COVID-19 cases in many parts of the world, high inflation, sustained rise in input costs, uncertainties around availability of critical inputs, currency fluctuations, et cetera. The food security for a growing global population at affordable price continues to remain a threat owing to climate changes, impacts of the ongoing war, particularly when the arable land is also shrinking. Therefore, the need for assured yields and higher plant productivity per acre is only growing, making the role of agri-input industries very critical and important. Against this backdrop of the operating environment, I'm happy to report that PI delivered yet another strong performance in Q1 2023. The expansion came despite the challenging vis-à-vis above and high base of last year in the CSM exports. While the overall growth was mainly led by volume and scale, the price correction on account of increased costs and favorable product mix, currencies, et cetera, have also contributed to the growth. I once again thank all the PIT members for their customer centricity and our business partnership, continued support and trust of our relationships. Traction in the new inquiries in the CSM exports continued with significant numbers also coming from the non-agchem space. With a good build-up of rich pipeline in more than 40 products at different development stages, out of which a substantial number are non-agchem products. We're targeting to commercialize 7 new core molecules during the current fiscal year, one of which has already been done in Q1. Delayed onset of the monsoon, late pick-up in the sowing of the key crops are reflected in the growth of our domestic revenues. We did not witness much volume uptick, although we benefited from favorable product mix. During the quarter, we successfully launched new herbicide Akira and an insecticide Dinoace for cotton and a combination of fungicide Teklin for horticulture. We systematically are rolling out a crop solutions approach that already offers one of the most comprehensive portfolios for key crops. We are augmenting our portfolio in biological with a strong pipeline in place. We're excited about the whole slew of products in the launch coming shortly. Brofreya, a new generation broad-spectrum insecticide, Aldinar, a long-duration insecticide in the Achieva portfolio and a further growth engine focusing on horticulture. In addition to crop solutions, we continue to leverage our deep marketing penetration engaged with over 3 million farmers with digitization and farm application services. Our constant endeavor to help farmers improve through one-stop-shop easy eco-friendly solutions and services. We are building a green and a more sustainable tomorrow. We strive to develop transformative solutions by harnessing advanced technologies and chemistries. Last but not least, we are investing to create digital growth platforms through an integrated approach and programs. We have not just deployed state-of-the-art models of AI, machine learning tools, but aiming to create a long-term sustainable business edge. The work we have undertaken to scale our presence in next-gen technology and advanced chemistries will help set us apart from the industry. Our business outlook remains robust confident of delivering 20+% revenue growth in 2023, with continued improvement in margins and returns. Manufacturing activities remain impacted by inflation trends triggered by rising energy costs and supply chain interruptions. We have always strived to optimize on performance in the given circumstances by way of improving product mix line, better productivity and efficiencies. Diversification with adjacencies in the inorganic routes remains in our top agenda for the technology and scale. We are actively evaluating various opportunities both in India and globally to zero in on a few that could meet the objective to create a sustainable differentiated value proposition. We're proud as an industry and customer favorite. As announced earlier, CSM has been crowned the Corporate Award 2022 for outstanding performance. The work done in the backshop won the top 500 in India. We also want to go and pick up all the work showing a commitment to excellence and high quality. Let me now thank all the stakeholders for their contribution. I would like to hand over to Manikantan to take over the financial performance, and we look forward to a good year ahead. Thank you. Thank you, Mr. Mayank. Good afternoon, everyone, and thank you all for joining us on the call today. I'll be summarizing the financial highlights of the company for the first quarter ended 31st June 2022. Please note that all these comparisons are on a year-on-year basis, and as opposed to the consolidated performance. During Q1 FY twenty-three, we reported a revenue of INR 15,432 million, a growth of 29% over the same period of last year. This was driven by growth in export revenue by 42% to INR 11,422 million and 4% increase in domestic revenue to INR 4,011 million. Export revenue growth of 42% was driven by volume growth of around 30%, coupled with favorable price and currency of around 12%. Domestic revenue growth was mainly driven by the price. The trend of elevated input cost continued during the quarter, although we effected partial pass-through by increasing product prices both in export as well as in domestic. Our gross margin increased by eight basis points in Q1 to 44%, particularly possibly due to cost pass-through and favorable product mix with negligible impact of the rising input cost. EBITDA increased by 39% to INR 3,495 million for the quarter, driven by efficient supply chain management, operational efficiency and tight control on fixed overheads. Profit after tax increased by 40% to INR 3,624 million on account of lower effective tax rate. Net cash flow from operating activities during Q1 was INR 1,915 million. Our balance sheet, further strengthened during the quarter. Net worth increased to INR 63,497 million. Total CapEx for Q1 stood at INR 506 million. For this year, we estimate a CapEx of around INR 5,000 million. Inventory level increased by INR 1,522 million compared to previous quarter due to our supply chain disruption to meet customer supply schedules and continued operations. Trade working capital in terms of days of sales remained relatively flat at 102 days versus 103 days as on March 31, 2022. The company maintained a strong liquidity position with surplus cash net of increasing cost of INR 23,715 million, including cash and credit. That concludes my opening commentary. I will now request the moderator to open the forum for Q&A. 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. We would also request participants to please limit your questions to two at a time. Should you have a follow-up question, please rejoin the queue. Thank you. The first question is from the line of Aditya Dhawan from Investec Capital. Please go ahead. Yeah, hi, thanks for the opportunity and congrats on a great set of numbers. My first question is, you know, that, you know, Manikanth, your commentary was very upbeat on the group prospects. Just, you know, if you can help us understand that, what are the factors that are driving this strong visibility and what implication it has on our organic CapEx plans? Thanks, Aditya. The key factors driving this growth are one is the, you know, volume scale-up of some of our existing CSM exports products. The other factor is, of course, that the pace of launching these new molecules has picked up in last, you know, couple of quarters. Obviously these new products are also kind of scaling up, as their registrations and their demands are picking up in different geographies. Yes, in general, the demand update is there from these global customers, which is certainly helping the uptake in the growth and demand of the CSM export. This is certainly also kind of reflecting in our efforts in terms of capacity optimization as well as enhancement. While on optimization front in last few quarters, we have been already giving the commentary that we are putting in a lot of effort in terms of increasing the throughput, efficiencies. Last year we improved by close to 15% or so. This year that effort has continued, so that is helping in terms of utilizing that. In addition, given the significantly better visibility, we have already, in the recent board meeting, also decided to increase our CapEx plan. We are now considering close to INR 650 crore of investment in the current financial year. Thanks for the insight, sir. My second question is on the acquisition that we have been, you know, talking about it. You know, any areas that you have, you know, shortlisted. You know, in the past, you have also indicated that, you know, the geographies can be overseas. If you are looking for overseas, what kind of, you know, asset it could be in the sense that will it have a manufacturing base overseas? Any update on the, you know, acquisition area, sir? Yes. We have very much, you know, identified, also, you know, screened. You can appreciate that in M&A there are lengthy processes. We have done the long list, short list, screened, evaluated. Now we are zeroed in on certain opportunities both in India as well as outside India, and actively evaluating them. Yes, this process takes its own time and, but we are very actively working in the direction that we have set for ourselves. Yes, sir. If it is overseas, would it mean that it should have manufacturing facilities in overseas geographies? Yes. In terms of what we are looking at, obviously we are looking at, you know, good set of products, regulatory approved sites, portfolio of good set of customers. Obviously, I mean, these are the things that we are looking at, in the opportunities and of course the pipeline of products, you know. What kind of synergy and, you know, leveraging we can achieve by combining our organic efforts that we are already making inside PI, with combining with these potential entities. Perfect, sir. That's it from my side, sir. All the best. I'll join back in queue. Thank you. Thank you. The next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Hi, sir. Congratulations for a good set of numbers. Continuing on the CSM side, you did alluded towards, you know, elevated CapEx. Earlier in the call we had mentioned of, you know, the tech-led initiatives which will increase our asset turns here. Are the full benefits behind us or there could be, you know, decent uptick further here, you know, over the next, let's say, one to two years? No, we are still, I mean, working on many of these initiatives. Some have certified, some, it's still in the process, which we are expecting to realize in the coming years, also in the second half of current year. Yeah, I mean, there are multiple initiatives we have taken in terms of increasing the throughput of our existing plants, and then we are still to let some of these benefits to realize. Sure. Sir, secondly, in the PPT we do mention, you know, around 5, 6 odd products to be commercialized. Sorry, 7 products to be commercialized this financial year in the CSM space. If you could broadly highlight in terms of, you know, what could be the size potential, whether these are existing customers that we are, you know, launching against whom we are launching this or there is addition of newer customers or geographies as well. Yes, obviously as you know, we're working with most all the global innovators, so there will be some business from the existing customers. Obviously there are some in the non-agchem space which are there. There is a potential in size, they're in the early stages, and I think they will back up the different opportunities and scales as they are new generation products that they don't diminish it to come up as we've seen historically from the 3-5-year timeline. Obviously there are decent size opportunities which we are excited about. That's how I would like to put it for now. Which is also the, Ankur, you know, even the initial screening, all these aspects are very thoroughly assessed that what is the future potential, what size, what kind of scale that these products are expected to go globally. Only then, you know, once they meet our desired expectation, then they, you know, we will take them forward in the next scale and next phase and all. Yeah, I mean, these aspects are also assessed during the initial screening itself. Sure, sir. Just a follow-up here. Does it mean, you know, our earlier guidance was around 20-odd% growth on the CSM side. Given the increase in CapEx and, you know, your softer commentary, any revised thoughts there? Yeah. Last time we had indicated 18%-20%, but I mean, given the current rate and also the visibility, we are certainly expecting to do better. It should be certainly 20%+. At the same time, I must also caution that, I mean, in fact, we all should be cautioned of the current scenario, global scenario that we have. Every day we hear different news, whether it is about the war-related uncertainties or COVID-related uncertainties. We always want to be very cautious in our commentary that while we see good possibilities of exceeding our guidelines, but we are cautious, and therefore we are very cautiously anticipating on 20%+ kind of growth rate. Sure, sir. That's helpful. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity, and congrats on a good set of numbers. First question is, we've been saying that we are building manufacturing capabilities for electronic chemicals. Where are we currently, and when do we expect any commercialization of our products from this particular segment? Thank you. In fact, we, as we reported last time, that we already commercialized couple of products last year. This year also we are scaling them up. In terms of building capacity, again, we are working on that project. Maybe I request Atul to kind of briefly give some commentary on that. Yeah. I mean, you know, for the electronic chemicals, we are building the, you know, the capacities at, commercial scale as well as. Can you hear me? Yeah. May we continue? Yeah, yeah. You can. Yeah. We are building. Are you there? Yes, sir. We can. Okay. Yeah. As I said that, you know, we are expanding the capacities for, you know, the electronic chemicals at a commercial scale as well as at the pilot scale to, you know, upgrade the infrastructure. There are good amount of molecules in pipeline. As you know, Mr. Sarna said that last year we did, you know, scaled up the molecules to a commercial scale. We do have plans, you know, for couple of molecules to scale up in this year as well. Thank you. that we can assign for these molecules? Pardon. Can you come again? Yeah. Any potential for the commercialized molecules in terms of size of the opportunity that we are targeting? Well, we generally do not talk about specific, you know, size and values and volumes of product, you know, product-specific things. Sure. Got it. We don't do that. Sure. Sir, second question is, you also mentioned that we have successfully developed and operationalized a wide chemistry. Is it for a particular user segment, in terms, apart from the agro and pharma space? Yeah, I mean, like technologies when we are talking these are across these verticals, you know. These technologies are either some of them in engineering technologies, some of them chemistries, and their usage and application is across these verticals, you know. Like today we are also getting lot of traction in our specialty chemical segment like electronics and various other specialty chemical segments. There also we are able to use these technologies in the scale-up and achieving the desired efficiencies and all. Oh, got it, sir. Thank you so much for answering all the questions, and best of luck. Thank you. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Congratulations on the great set of numbers, sir. My first question on the prevailing situation in the European market. There are indications from bigger agri players that there could be stoppage of production and all that because of the gas concern and all. How should one really think that is an opportunity or is a risk for us? Well, I mean, as far as our sourcing is concerned, I mean, we are not so much dependent on, you know, raw material sourcing from Europe. To that extent, I mean, it's not, you know, anyway impacting our productions and our operations and all. You know, many a times it is very difficult to anticipate and also estimate the far-reaching impact of this. Yes, you're right that we also hear sometimes some commentaries around, you know, some of these large chemical companies setups getting impacted because of gas availability. Now, these are very large chemical companies and setups. They may have what kind of linkage to the downstream and upstream, you know, material producers, raw material producers. It is very difficult to, you know, estimate. Directly there is no kind of impact as such. That some of these European that we are importing and that may get impacted. That is not the kind of scenario that we see. In terms of opportunities, well, yes, in general, there are certainly good opportunities for the other derivatives, particularly in specialty chemicals and biochemical areas. As we have always, you know, commented that, the kind of business model that we operate, we do not work on spot opportunities kind of a model, you know. We engage with our customers in early-stage molecules, and the whole process is a very time-consuming, couple of years process, and we identify opportunities, we screen them according to our principles, and then we engage if we are able to add certain value. These, you know, ad hoc opportunities, in any case, they generally do not fit in our scheme of things, to say the least, in short. Okay. Okay. Yes, in general, there are opportunities for the industry. For example, if not for the agro, sir, let's say we have been talking about even the electronic or electric space or electronic chemicals or the fine chemicals space, which we have already launched few products. We are also seeing there is a kind of a rise in the inquiries, customer inquiries and all that. The current trend is also talking about larger outsourcing opportunities for players in India and all that. Given that, have you seen any meaningful change to your order book position from the non-agro base? The non-agchem products, as we explained, I mean, obviously, there's good traction both in the R&D scale as well as at commercialization. In last few years, we have commercialized several products. You know, at commercialization in the initial years, the volumes values are not very significant. In any case, in these verticals, we are kind of at the stage where we are building our, you know, rapport with these large global customers in non-agchem space and then getting into more strategic and larger products. At some stage then we'll get into, you know, maybe a longer-term understanding of these strategic products. In short, they do not have a meaningful representation in the order book today, but we are certainly expecting. The way we are progressing, we are certainly expecting this to become a, you know, reasonable size businesses and component in our overall order book in years to come. Sure, sir. Just one clarification, sir. See, this quarter that we have seen strong pricing scenario for our product segment, and the industry pricing scenario is also, like, really robust. Twelve percent what we have indicated for us. Given that, and the outlook also indicates that most likely this is the kind of a pricing scenario likely to prevail in the near future, given the elevated cost. Is it fair to believe that the guidance what we have given, let's say 20%, considering the volume growth what we have seen in the fourth quarter and this pricing scenario, which is likely to prevail, it is a very conservative number? Yes. That's your perspective, and I think I already explained to the earlier participant that, yes, I mean, there is good visibility. We are also seeing good traction, and therefore from 18-odd%, 18-20%, we are already indicating 20%+ kind of growth. At the same time, we all have to be mindful of the uncertainties that we are, you know, the world is facing. I'll not say conservative, but yes, this is a very cautious guideline. We are always, as a company, we are happy to deliver better than what we guide. Thank you. Wish you all the best. Thank you. The next question is from the line of Harish Shah for ASK Investment Managers. Please go ahead. Yeah, hi. The first question, if we look at our journey over last 3-5 years in terms of the customer relationships, depth of it, diversity of it, as well as branches of chemistry, our strength is new product introduction and deepening and widening the moats, you know. Considerable, and of course, people and R&D capabilities. Number of important strides have been made. If you had to think about what PI would look like 5 years down the line on each of these parameters, and therefore it will have implication on the growth of the firm. The customer centricity and the relationships and the depth and the width of it, products, technology, engineering, chemistry, various segments, whether pharmaceutical or specialty and of course, you know, agrochem. People are in the where do you think, what PI would look like not happening of which will leave you dissatisfied and, attaining which, PI would feel justifiably proud of what it has done? Okay. If I was to take that very, very nicely, you know, as you see that, you know, I think that's a very good question. It is actually putting out together what is the purpose for which PI will exist five years from now. Mm-hmm. You know, we as a leadership team, with whatever we do, we have put ourselves really putting this whole piece out of saying reimagining a healthier planet. You know, reimagining a healthier planet means I think that's going to be the key. You know, that environmental health is going to be the key driver as we see. We really want to use the enabler of the science and technology to do it. To enable to do that, we are looking at what we call the partnership models, because, you know, in today's world, innovations in science and technology is going to take you to that level, you know, in any sector. How we're gonna do that is taking science at work and building partnerships to do that. Because I don't believe I should do it solo. You know, I don't do everything. We need to partner up. Put that to be driven by the people first approach with the best in learning work capabilities, obviously supported with strong capabilities and abilities. That's why what we call the ESG framework, which is what's in the way of life at PI. Now, once you start moving in these directions, these become the anchor of the areas of our expertise, which are being leveraged in different fragments and segments of the business, whether it's in the area of agri-chemistry, pharma or fine chemicals, eventually becoming a smart life science industry, which is backed with strong creativity, the courageous capability to innovate with a curious mindset to deliver with a care to the planet and human beings. That's really how would I like to say that five years from now we will see PI. All these factors stack together to create an innovative led organization. Clearly would like to see PI being recoined as a company known P standing for passion, I standing for innovation. The later part of the question. What would you think therefore, apart from the qualitative dimension of this journey, what it would mean for in quantitative terms for PI, say five years down the line, achieving which it will be a moment of pride and not being able to fulfill that would leave a lot of pinch of regret? See, as we keep talking, we have continued to show growth, and we do believe without growth there is no life. But now it's also becoming important, as I mentioned in the earlier part of my statement, to continue to do that journey and to be always above the mark or the radar if we are to achieve what we set. With that, qualitatively, the quantitative growth should be far above what we've been able to do. Based on these various attributes which I put out to you, that when added together should give us an exceptional compared to the competitive landscape. That's the way we look at it. Second question, if you make a critical internal evaluation of all the things, customer relationships, product portfolio, technology, chemistry and other aligned strength, various brand segments that we need to serve, our people portfolio, intellectual capital, research. If you make a critical evaluation as to where PI stands today, what will be your candid thoughts on that? Let me answer that in a different way. You know, if you look at the journey for the last decade and look when we look at putting the journey that you're putting for the going forward decade, as always we, you know, when you climb one peak, you always want to set the aspiration to the next higher peak. The delta is something which you aspire to fill all the time. Each of these stacks at different stages will have a different width and depth which need to be put together to anchor ourselves to the peak. What we do is constantly keep evaluating, and as a leadership team, we look all these factors which you already mentioned to say what we need to proactively invest, what we need to strengthen, and what we need to change, and constantly reinvent ourselves and be adaptable to reaching our objectives. At different stages in different scales, we have been different shades in maturity. If you were to talk to me 10 years ago, innovation was not something, it was an idea. Today's innovation is becoming a culture at PI. Tomorrow it will be led by innovation. I just say that is enough of that. The skills, capability, organizational thinking, structure, financial structuring to building the structures to the kind of partners that we need to work, we constantly evaluate and change. That's really what I would like to take example to answer that question. I hope that answers your question. Yes. Thank you, Mayank. Thank you. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, sure. Can you talk about the recently commercialized product, say for last three year, its overall revenue mix and growth of these products? You looking for revenue mix in the last three years products? Yeah. In CSM segment. Well, we don't have the numbers upfront, but typically a freshness index over a three-year scenario will be about 25%-30% of the revenue. Okay. The growth of this product? Sorry? Growth rate. I mean, I don't know the exact growth rates right now in hand. Okay. The growth rate is usually higher than what we see in the older products because these are typically new generation products. They double their deep every year. Okay. Also the base is small. obviously in the initial years, their growth rate is higher. Okay. Let's say for 75% of your business in CSM, what will be the growth? Come again. 75% of your business, while you're talking about 25% is newly commercialized product in last 3 years. 75% of the CSM is growing at what rate? In last, say, 3-year CAGR or 5-year CAGR? I mean, last year we grew by close to, I think, 21%. Before that we grew by 30%. This year again, we are talking about more than 20%. Yeah, I mean, you can say 25%. What is the CapEx and tax rate for FY 2023? CapEx for FY 2023 remains around INR 650 crore this year. Okay. Up. Tax rate. Tax rate is, you know, it's a changing thing. It's slightly at 15.5%. Okay. The last question for domestic business. Are we seeing recovery in domestic business in the current month? Yeah. Hi, this is Prashant. Look, our growth this year is driven by new products, and the first quarter usually is more of a generic product because it's a placement for 3 months. New product sales will start from second quarter onwards because new products usually we don't place in advance. It is closer to the season, and almost 6 new products we are launching in FY 2023, so the growth will pick up from quarter two. That is what I can say. Okay. Thank you so much. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Thanks for the time, sir. In the past, we have spoken about the agrochem CRAMS as an opportunity not being very big in terms of $8 billion-$10 billion, and there could be a time or point where it could kind of stall. Given this backdrop, I mean, since you are also talking about a lot of new molecules that are coming in, can we double our agrochem exports, or within the CRAMS subset, we think still, there's a lot more scope for us to double. Is that a right understanding? Is it possible? What is the horizon that you think double or triple? I mean, the question is number one that. Obviously, as you can see, there are three headwinds which are becoming stable. I think you look at China, that's one factor. You look at the global challenges in manufacturing and the recent statements, and we look at the cost at which innovation has happened, leading to looking at return on capital coming from outsourcing. Looking at these opportunities, I don't see that challenge really. I'll be looking at a 20% CAGR for CSM over the next three years, which is reasonable. Doubling should not be a challenge over the next three or five years. Looking at that scenario and added with the other innovation and ideas that we put together, it is this opportunity that applies probably going at double the rate of the industry growth. While the front end is only growing at single-digit, as you would say, the agrochemical industry. The value chain, which is manufacturing outsourcing, is probably going double or 2.5 times the rate. In many cases, you know, our size with the global opportunity is not that big today. Yes, there is certainly scope for, you know, growing at a much higher pace. Also the overall market is also growing because of these challenges that we discussed. The share of India as a country is also growing. Besides this, as a company, as we explained earlier, we are also continuously working on diversification beyond the agrochemicals. That is another initiative, keeping in mind, you know, 3-5-year scenario ahead of us, that we are working in different areas of specialty chemicals, both at research, R&D, and also commercial scale. Got it, sir. Sir, on the pharma bit, while we are making our best efforts for closing any deal, we understand that. Is there a plan B at some point, where you think that there are no suitable suitors for you, so would you probably start considering direct investments, where you start things from scratch? Is that a possibility or any thoughts on that? Well, by the way, that we are already doing, you know. For last year and a half, we are already working organically what we intended in terms of working on certain intermediates in our R&D, certain scale-up in our pilot. I mean, we are already doing that. In fact, we commercialized a couple of products from suppliers also last year. Yes, we have actually started investing more in purchase R&D or building team and capability. Obviously, you want ABC. I know the question is very clear that we need to get into finding the right mix while we're developing our own strategies. Yes, but we are looking at this inorganic approach where you bolt-on this to a different level. You would appreciate that build-up and timeline, which come to the organic plays, will not be that aggressive. We are fully cognizant of that, and we are still continuing to do that. Quietly, we're developing inorganic approach. On that, we are very much on full steam in that right now. Got it, sir. One final question. If you could just help us understand what percentage of our revenues would be from, say, pharma, if you can, and non-pharma, non-agrochemical, anything on the other specialty chemicals as a bucket, if you could give that split. At least a rough sense. Sorry, can you come back, please? On our revenues that we have reported, is it possible to say what percentage would be pharma and maybe non-agro chem, that is, let's call it, say, specialty? I would say that agriculture is becoming the biggest deal right now. As we mentioned that we are now putting this full stock of investment, and that could probably be looked at differently. As another step to this area, we've already put a leadership in place only last month, is Mr. Anil Jain has joined in as the Managing Director of PI Health Sciences, where he will be leading this whole initiative with his vast experience from operations to leading the API business last assignment as the CEO of Sun Pharma API business at a global level. We are clearly looking at various optimal structures to integrate and create a synergistic and differentiated solution across the value chain, again, in the pharma play. Got it, sir. Thank you and all the very best, sir. Thank you. Thank you. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah. Sorry, good afternoon. Thank you so much for taking my questions. Most of them have been answered. Just a couple of clarifications, minor ones. One is on the tax rate. I'm sorry, I couldn't quite understand the guidance for fiscal 2023. Also just wanted to check that in the past few quarters, the tax rate has been rather on the lower side, you know, 17%-18% or so. What is driving this? Sort of, what do we see as a more sustainable number over the medium term? Yeah. Thanks. On the tax side, this is driven by the SEZ eligibility and the revenues from SEZ which are growing, which we have been seeing and our exports are growing. This is where the trigger for getting an efficient or a better tax rate. As we look at the back, we are looking at around 16.5% for the effective tax rate during this fiscal. Depends upon the growth of the exports. In this is the first quarter, it will be difficult to judge, but this is where we are. You said 16.5, sir? 16.5? 16.5. Okay, understood. Thank you so much. The other one I just had was on the, you know, acquisition. I mean, any rough timelines you could share with us, you know, by when you might expect to get closer to completion of that process? Well, we are actively evaluating and, I think you can imagine that it is very difficult to put a timeline. Yes, we are very actively evaluating certain, stock listed, opportunities. Okay. Got it, sir. Thank you so much and all the best. Thank you. Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah. Hi, sir. Good afternoon. Thank you for the opportunity. Sir, a couple of questions. Sir, first is on our gross block to asset turnover. Sir, you have mentioned that the endeavor of the company will be to achieve close to 2.2x+ in future. What we want to understand, sir, definitely it must have some lag of close to 2 years to 2.5 years to fully utilize that potential. With the current run rate and you have committed roughly INR 600-INR 650 crore kind of CapEx for the current year, it means that even at the full potential, it can add close to INR 1,200-INR 1,300 crore rupees in terms of revenues. Sir, just the concern is that going forward, I mean, over next 2-3 years, if we are not able to seal any deal right now, or there is some further delays, aren't we future ready or, isn't there going to be gaps in terms of future growth if we are not fully investing in a CapEx or greenfield capacities are not being created for the future growth? Good question, Rohan. We need to actually combine two answers to get the complete answer. Because, you know, one side we are also talking about improving throughput and efficiency for our existing plants, as we discussed earlier, you know, with the earlier participant. There is good opportunities there and good scope there that we are working towards. The second is this investment that we are talking which, you know, we have decided around, say, INR 650-odd crores of investment in capacities and expansion. Going with the previous, if you look at the previous two years, we've done very aggressive investments. That is also available to become the capacity. Thirdly, that as we are moving forward and the kind of pressures that we are seeing, we can always review this situation on investment in the coming quarters as well. Therefore, there is no question of you know kind of staying behind the cycle in terms of investment and in terms of opportunities and all. As a company, we have always invested ahead of time, and that's what we have seen over say last 5, 10 years, that we have always invested ahead of time, and that's the reason we have always been able to also catch up the cycle. That's what we are doing today. If you see our growth rates for last 3, 4 years. Sir, only because when we compare our CapEx plans compared to some other industry players, they are making investment up to INR 2.5 crore-INR 2,000 crore+ and much lower in terms of investment. While we are definitely sitting on a huge pile of cash and still our investment compared to other companies still remains muted. That was the concern that aren't we going slow on the CapEx, though you always mention that there is a potential improvement in asset turnover, but that can definitely have some limitations. If the concern was definitely on the compared to the industry over next 3 years, can we be behind in terms of growth? Second, sir, in your presentation only you mentioned that there is a surge in new inquiries and product scale-up driving the growth of CSM exports. Sir, this is something incremental you are seeing in last one year or experiencing it, or it is the old thing which has been going on and that is driving the growth for the CSM exports. Before this, let me also, you know, reflect on your earlier point. When we say INR 650-odd crore, this is the investment in organic business, I mean, core business. I'm not adding here the kind of close to whatever INR 2,000 crore that we are in any case targeting towards this inorganic opportunities and all our initiatives in the pharma. If you sum it up, then it will be more than INR 2,000 crore, isn't it? Now, coming to your point on inquiries, yes, there is certainly a surge in inquiries over last, I would say, last couple of years. This year also that trend has continued. Maybe, Atul, you can throw some light on it. Yeah. In terms of the inquiries, you know, the trend in the inquiries has shown a very positive trend. This quarter we have received a good amount of inquiries from both agchem and non-agchem space. There is good visibility about, you know, these inquiries turning into the good opportunity for us. Thanks, sir. Thank you very much for answering the question. Thank you. The next question is on the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Hello. Thank you, and good evening. In terms of the CSM growth, in the last couple of calls, we were able to understand that you're not laying as much store on the order book and capacity creation through MPP as you were before. In terms of the growth you have achieved this quarter, can you give us some color on how much of that was from the order book? How much of that was from business you do as the same merchant business for the year? And how much of the new MPP capacity has already been, you know, monetized in the current quarter's growth? Well, to be honest, we not have these numbers in front of us. Yeah, this, I mean, significant portion of this business is from the order book. Okay? Which also will tell you that, the fill-up of order book is also continuing. You know, if we are delivering at this pace 40% growth and delivering this kind of business in a quarter, and still, you know, maintaining around $1.4 billion of order book this tells you that the order filling is also continuing at the same pace. In terms of MPP's utilization, can you please repeat your question? The two MPPs you had commissioned in the second quarter, has it been fully utilized? How much of that is utilized, and what is the kind of headroom you have in terms of either volumes or, you know, the synthesis that you can do with those two new facilities? Yeah. Currently they are utilized at close to 55-60%. As the volumes of these molecules will scale up, I mean obviously we will surely be seeing more than 85-odd%, 85-90% utilization in a year and a half. The second thought is on the domestic business. We saw a lot of traction in the fourth quarter, possibly because of the, you know, Akira brand as well as the, you know, Rabi contribution. How do we read the potential for growth, especially because you have launched a lot of products last year? Is there going to be some kind of back-ended growth in Rabi because your horticulture portfolio is perhaps skewed towards your fruits and vegetables? Is there a seasonality there? Do you see the traction based on the, you know, traction we see in the industry overall based on the pickup in monsoon and the slowing pattern growth from the second quarter onwards? Yeah. A good question. As I said earlier, yes, we have launched new products, including the one which you mentioned of Akira, which we have decided around 3 years back. All these products are having a good traction. As I said earlier, most of these products are basically, and we are tracking as per the plan in all these products, that is what I can say. Yes, we are optimistic and we are tracking as per the plan. Okay. If I may just squeeze in one last thought. In terms of the global environment for your, you know, potential customers in agrochemicals and other areas, you know, to give business for how CSM companies like you are. What is the kind of, you know, expectations you have on the budgets, say over the next two, three years, given that everybody's facing headwind, but at the same time this year we are seeing a lot of, you know, positive tailwinds for growth. Do you see the inquiries and the flow of business continuing unless we have some, you know, major setback? Do you see some continuity in terms of the momentum over the next two, three years for order flows for CSM and for your company? Yes. I mean, we are seeing very positive commentary from all these large global customers of ours. As and when we are meeting them, we are hearing very positive commentary. Obviously this is also driven from commodity prices in general, but also the new launches that have been, you know, made by these companies. The good part is that, if you look at our product portfolio, we are participating in many of these very interesting new launches and some of those, you know, big blockbusters of theirs, either through API or intermediate. Yeah, I mean, we are getting very positive commentary and this. I mean, if you track commentary of these global companies, and we will also kind of note that most of them are giving a very positive commentary, not only for this year but next two years. I think we'll take the last question, which is from the line of Usha Agarwal from Virtuous Capital. Please go ahead. Just one question from my side. Like, as you see the CSM outlook to be very strong and we have strong order pipelines inquiries in our CSM. Do we see the order book improving? Like, will it add directly to the order book? Yes. We certainly expect this to reflect in order book expansion improvement in coming quarters. Although as I said that maybe in the last call or the previous quarter call, that given the current uncertain environment, both the customer as well as the suppliers always kind of want a normal normalization of scenario before we get into a very long-term kind of under contract and understanding. Yes, having said so, I mean, given the kind of pipeline that we have and the way it is progressing towards commercialization, we expect this to reflect in the order book position as well. Also, basically. I mean, your audio is not audible at our end. I was just confirming, like with the present order book of $1.4 billion, we expect to see it in the numbers, like improve it to the previous numbers of $1.5 billion, like that? No, again, I mean, I couldn't make out what exactly is your question. I just wanted to confirm that as you mentioned, that yes, we see the present inquiries adding it to our order book. From the recent levels of $1.4 billion, we see it to the previous level, last year levels of $1.5 billion or it should be at the present level going? No, no. It will certainly improve from the present level. Now, whether it will become $1.5 billion or $1.75 billion or $2 billion, it is difficult to, you know, comment right now. Because we will find that when these products progress from RFQ stage to the commercial stage. Mm-hmm. You know, during this period, a lot of volume estimates are made by the customers and then commercial negotiations and discussions happen on price and all. Basis those who have finalized terms on both volumes and on pricing, at certain point we will be able to quantify that. Okay. I mean, if you know, 10 out of 20-30 inquiries are progressing and moving towards commercialization, what is the total value of these you know, products and all. It is difficult to quantify at this point, but what I can tell you is that it will surely reflect in improvement of order book where we are today. Okay. Thank you so much. That's it from my side. 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. Thank you. Thank you to all, our friends, who were there on this call for your continued interest in PI and also your, all good wishes and blessings. Thank you so much, and have a good day. Thank you. On behalf of PI Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.