Ladies and gentlemen, good day and welcome to the PI Industries Limited Q2 FY26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star, then zero on your touchstone phone. I now hand the conference over to Mr. Nishid Solanki from CDR India. Thank you, and over to you, sir. Thank you. Good morning, everyone, and thank you for joining us on PI Industries Q2 FY2026 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. Sanjay Agarwal, Group Chief Financial Officer; Dr. Atul Gupta, CEO, CSM business; Mr. Prashant Hegde, CEO, AgChem Brands; Dr. Ramesh Subramanian, Global CEO, PI Health Sciences; and Mr. Jagresh Rana, Global CEO, Biologicals. We will begin the call with key perspectives from Mr. Singhal. Following that, Mr. Agarwal will take us through his views on the financial performance. Thereafter, the forum will be open for interactive question-and-answer session. Before we begin, I would like to underline that certain statements made on today's conference call may be forward-looking in nature. A disclaimer to this effect has been included in the investor presentation shared with you earlier and also uploaded on stock exchange websites. I would now like to request Mr. Singhal to share his perspectives. Thank you, and over to you, sir. Thank you, and good morning to everyone. Let us begin by sharing my views on the global AgChem industry scenario and then on the performance of PI in this context. The global crop protection industry has been passing through a prolonged down cycle driven by distributed pharma destocking, sharp price deflations, and Chinese overcapacity, low commodity prices, rising interest rates. On top of this, weather disruptions that cut the springs in several regions. 2025 is expected to see a modest recovery in Q4. A full recovery is not expected to realize before the second half of 2026 or later. The silver lining is that input prices are stable. The volume increase is driving gradual normalization of inventory levels. Most of the global innovators have been reporting a 3%-5% decline in H1 revenues, with cautious volumes led to recovery in the second half. On the domestic side, duty witnessed erratic prolonged rain, which negated the positive start of the Kharif season, while we have seen largely a favorable monsoon and a positive sowing trend in the major crops. Excessive rainfall, abrupt regulatory changes on biologicals, and fertilizer shortfalls have played a spoilsport for the growing momentum in Kharif. Over 1.2 million hectares of crop have been damaged in Punjab and Maharashtra due to excessive rain and consequent falling. As a result, we are seeing high inventories and credit levels, and as the industry has sought to support channel partners and market liquidity constraints. On a positive note, the plentiful rainfall will help Paddy crop and also Rabi in the good so far with replenishment of healthy reservoir levels. Over the medium to long term, the push to develop next-generation crop protection enhancement technologies remains vital over global agriculture due to ergonomic, environmental, and economic pressures. Customers are seeing new products that are environmentally friendly, can overcome diseases, pest resistance, and existing chemicals, and produce high yields to meet increasing demands of food, fiber, and biofuels. At the same time, the demand of biologicals for an integrated crop health management is growing faster than the challenge posed by climate change. In the current landscape, global companies continue to elevate the strategic partnerships across the value chain in the pursuit of cost optimization and build resilient business models amidst heightened regulatory challenges and partner with innovation. I shall now move on to the business highlights. During Q2 of FY2026, our performance is broadly reflected with the current market conditions in line with our plans expected for domestic markets when excessive and uneven rainfall erupted and regulatory actions in the biological area impacted the demand scenario. On the CSM export side, we have seen a decline in line with the customer delivery schedules to balance the overall inventory level. As explained before, we build this traditional softness in our 2026 plans. However, it is also important to highlight that the growth of the new products commercialized over the last three years has registered a decent 38% growth year- on- year in H1. We remain on track to commercialize 8-10 new molecules in the coming fiscal, having commercialized 5 in H1. I'm pleased to share our current pipeline includes non-CSM molecules in the categories of specialty and fine chemicals. On the domestic side, we have seen a 5% year-on-year decline during H1. Domestic revenues are negatively affected in Q2, offsetting the growth seen in Q1. Thanks to an advanced product mix and solution-oriented approach, the momentum of new product launch remains strong. We introduced three new brands in the first half of the year and plan to launch an additional two to three in the later parts of the year. Our development pipelines include over 20 new products scheduled for future development and regulatory registrations. During the quarter, our pharma business showed a 50% year-on-year growth. We've onboarded two new customers to build pipelines with our business development teams in the U.S. and Europe. Although our pharma business is modest with significant headroom for growth, there is a slowdown in the biotech funding and geopolitical challenges impacting the conversion of proposals in the pipeline. In the meantime, we continue to invest in capability-building people, process assets, and integrated CRDMO platform. We've also carried out plans to upgrade the additional assets to continue to support the strategic growth. Last year, as you're aware, at the acquisition of Plant Health Care, we took a significant step of scaling biological business globally, bringing innovation of sustainable solutions to farmers across the world. In India, we are well on our way to becoming a leading player, if not the largest player in biological company, both in terms of product portfolio and revenue. Our peptide-based biological technology platform is unique and offers biological solutions to many unmet needs of the growers across the world. The platform has the potential to develop many new products for variety crop solutions. During this quarter, we have commissioned a new biological research center in Hyderabad with the Plant Systems Lab to study plant systems and support global biological research out of Seattle. We continue to make investments in the market and product development to focus geographies across the U.S., Brazil, Europe, Mexico, and India, and partnering with crop solution companies. We continue to seize the growth opportunities across the AgScience, Pharma, CRDMO, and Specialty Chemicals, transforming our company from AgScience into a diversified life science enterprise. Each of these segments presents considerable potential to expand our global presence and leadership led by science. Our ongoing investments in these growth sectors are creating a solid base for the next stage of growth and sustainable growth. On long-term, our outlook remains intact, while in the short term, global and local industries are still facing macro headwinds, climate change, and geopolitical uncertainties. Our long-term strategic initiatives are on track, aligned to the strength of our leadership positions in the market and achieve scale across new platforms. We remain committed to harnessing cutting-edge technologies and leveraging our integrated model to drive niche offerings. Furthermore, financial discipline to ensure that this growth is balanced with robust cash flows and sustainable return on capital. Now, with this, I would like to hand over the discussion to our Group CFO, Sanjay. Thank you very much, and over to you, Sanjay. Thank you. Thank you, Mr. Singhal, and good morning, everyone. I'll summarize the company's financial highlights for the quarter ended 30th September 2025. We have been delivering resilient performance amid headwinds in the global agrochemical industry, which have been driven by factors such as low commodity prices, rising interest rates, inventory destocking, and extreme weather challenges. This demand softness has been coupled with excess capacity in China causing value erosion, particularly in the generic products. Back home in Q2, as you all know, uneven rains created huge crop losses impacting our key focus crops. However, we expect better Rabi season and an increase in rice and corn acreages, given the confidence that should lead to a positive market scenario in H2. To share the financial performance highlights for quarter two, we reported a revenue of INR 18,723 million, a 16% decline from the high base of the same period last year, and a 1% sequential decline. On a three-year CAGR basis, the growth in Q2 is 2%, as we had registered a growth of 5% in quarter two FY2025 and a 20% in quarter two FY2024, making it a high base. On an H1 basis, there is a 12% decline in revenue, which is broadly in line with the plan, except for domestic revenues, which were impacted due to excessive rainfall and abrupt regulatory actions. We have delivered on an H1 4% three-year CAGR basis, which continues to outbeat the industry. We have also commercialized five new products in CSM exports and three in domestic agri brands. These new products in Akkam exports have seen a 38% growth on a year-on-year basis in H1, which clearly demonstrates our de-risking strategy and focus approach to gain new businesses in this tough environment. Decline in Akkam exports business is primarily volume-led and driven by slow demand and customer delivery schedule deferments. The domestic business, despite a strong product portfolio and new product launches, declined due to erratic rainfall, which disrupted demand, and the biological business was impacted by abrupt regulatory changes. We expect both these businesses, these issues which I just spoke to be transitionary, and we are confident in driving the business to a higher growth trajectory in the coming quarters. Our pharma platform doubled its revenue over H1 of the previous year, driven by a deepening relationship with biotech and big pharma innovators. Our development spend into creating a fully integrated pharma CRDMO platform has helped to create an accelerated pathway for strong future growth. We are currently in the investment phase in this business, building capabilities, strengthening people and processes, which is reflected in higher overhead and is expected to be absorbed with higher scale over the next few years. Our global biological business has also been performing in line with the long-term business plan, and we are focused on new product development, strengthening our go-to-market in the U.S., Brazil, and other markets, and filing for registration of new products and label expansions for peptides. Moving on to the margins profile, due to the favorable product mix and operational efficiencies, our gross margin for the quarter has expanded, and our EBITDA margin remained resilient. While the revenue has been affected by industry headwinds, we are adopting a focused approach to maintain healthy margins, which allow us to withstand industry challenges and also invest for the future. We expect the ETR to be in the range of 22%-23% for the next two to three years. Furthermore, the trade working capital in terms of days of sale has risen to 115 days, which reflects the current market conditions. We expect to improve this as the market scenario normalizes in the coming quarters. We remain very positive about the company's long-term growth outlook and expect to regain the growth momentum in the coming years. We also anticipate a recovery in our domestic and Akkam exports, particularly from Q4 to offset the decline in revenue and profitability in the first half. With this, friends, I will conclude my opening remarks. 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 questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Also, before we begin, a request to participants to please limit your questions to two per participant. Should you have follow-up questions, we request you to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Saurabh Jain from HSBC. Please go ahead. Thank you for the opportunity. My first question is on the guidance. You were vocal about saying that you expect a mid-single-digit kind of a maybe a single-digit kind of a growth possibilities for this year. How would you look at your H2 given such a sharp decline in the first half? Could you give us more details around what kind of growth you're expecting in your exports, your domestic, and your pharma business for the remainder of the year? As we mentioned in the earlier parts of our talk today, as you've seen, the climatical challenge and the expected growth rate have not kept up to the mark in the H1. As we see, at least in the domestic and the export ag exports, we see additions of the positive trajectory. Clearly, we see good potential for the coming H2 coming from the Rabi season given the water levels. Again, I must put a cautious to say that today, looking at the climatical situations, we'll be very much dependent on that. The positivity of the moisture, the level of water gives us to look at a positive outlook for Rabi. Kevin, again on the export side, what we understand is that in the U.S., we are seeing a good amount of restocking that is happening. Some of the products that you do, the competing products with those portfolio of yours are doing really well in the U.S. When do you expect those kind of positive tailwinds also reflecting in your portfolio, whether it is going to happen in Q3 or Q4, because now the season is closing by? Any thoughts on that side? Yeah. As we said, we see those positivities coming to Q4, yeah? Can it really open up in a very big way? Because can you go back to those double-digit kind of growth in the second half is where I'm coming from. It is picking up, but one market is not going to drive that, as you well understand. There is US, Brazil, there is India. We expect to see that come up, but as I said earlier, in 2026. Sure. The second question would be on the. Sorry? Go ahead. Yeah, sure. So I was asking about one of the competitors, the global players. They have been vocal about talking, they're exiting the Indian markets, right? I can call it FMC is talking about exiting the Indian markets for which they have also taken a write-down on their Indian business. And PI in the past has been talking about looking at several inorganic opportunities if they come their way. So any comments on that side? What would be your outlook when you look at such opportunities? That would be very useful for us. I don't think this kind of a comment can be given. We are always open to looking at opportunities, but we are not very clear about this specific opportunity, yeah? Okay. If I may just rephrase it, do you think there is enough merit in this business because the pressure that FMC has been witnessing in the Indian market, if they kind of take back their stocks or if they look to exit the Indian market, does it at least help the competitors or the peers in India get into more of market share opportunities? Does it bring health of the Indian market back? I don't think it would be very fair, sorry, for me to comment on somebody else's business at this point, please. Thank you. Sure. I'll get back into the queue with more questions. Thank you. The next question is from Abhijit Akella from Kotak Institutional Equities. Please go ahead. Yeah, thank you very much. Just on the cash flow statement, there's a significant increase in contract assets of about INR 4.5 billion. If you could please just specify what that might be due to. Sure. As you know, the increase in contract asset is in line with the customer delivery schedules which are lined up for H2, and those are in line or in accordance with the accounting standards. There has been an increase, but this is keeping in line with the customer delivery schedules, which is arising again from the global agrochemical industry situation today. Yeah, I'm sorry. If you could please just help me understand the accounting here. I mean, what exactly does this asset represent on the balance sheet? These are the finished goods what we have produced, which is to be delivered to the customers. As we have confirmed orders from them and they have been produced only for them, the deliveries will happen over a period of time in the next one to two quarters. Therefore, as per accounting standard, we would have to recognize the revenue and create a corresponding asset on the balance sheet side. Okay. So this does not get shown on their inventories, is it? You have to separately break it out as contract assets? Correct. That's right. I see. Okay. Thank you. Then just on the outlook front, if I may, pharma, we were expecting to grow 75% this year. Yet there does seem to be some headwinds from the biotech slowdown, funding slowdown, and those sorts of things. If you could please just update us on what our new expectations might be over there. Plant Health Care, will it be possible to just break out the revenue number for the first half of the year that's gone by? Yeah. So pharma, we spoke in the past also directionally on the call today by Mayank and myself. The business directionally has been doing well. We have a positive outlook. It's a business for long term, and we are doing well there. On the plant healthcare, the yearly revenues are in the range of $10-$12 million, and we have been doing well there as well. Yeah. Sorry, just on pharma, so 75% is still something we can hold on to, or that might be a bit out of reach? Right now you see the CDMOs in different development phases. As things mature, the numbers come close. Right now, we are ready to need significant space for that growth, yeah? We are positive about long-term outcomes of that. Yeah. Sure. EBITDA margins have been very strong. They've been significantly higher than your guidance range of 26%-27%. Should we expect them to remain around this range of 28%-29% going forward? I wish, but I think as we've given the annual guidance, given the top-line challenges, this quarter has been good because we've been given product mix, as you mentioned, yeah? We will keep to our guidance as earlier. Okay, sir. Got it. Thank you so much. Thank you. The next question is from Rohit Nagaraj from 360 ONE Capital. Please go ahead. Thanks for the opportunity. First question is, what has been the contribution of new CSM products in the overall CSM revenues during the first half of this financial year? As we mentioned, we don't have the numbers here, but I think we've given about a 38% growth on new products on our new product pipeline over the last year. Yeah. Fair enough. No problem. Second, on the biological strength, on PHC, we have just indicated that we have about $10-12 million of revenues. When do we see a significant scale-up in this opportunity? Would it be more like FY 2028, given that there are multiple registrations which are currently ongoing across different markets? What could be the potential, sometimes maybe FY 2028, FY 2029 from this biological acquisition? Thank you. Jagresh, would you like to come in back, please? Yes, absolutely. CNT biological phase, we are in the situation where we are investing in the market, creating distribution as well as launching our new product and getting label expansion for the product. We are into that kind of a phase. We expect, based on the performance of product, what we are seeing, we expect our growth to start from we are growing this year as well and continue to grow basically from the next year onwards. We see a significant growth from this business in the years to come. Is this business, again, generating profitability at the EBITDA level, or will it have some time to break even? Yes. This is a business, as you know, as we are in the investment phase. Once the scale has been achieved, the profitability will also follow. Yeah. Yeah. As we said, go ahead. Yes, sorry. Sorry, sir. No, no. Go ahead. Next week. Yeah. That's it from my side. Thank you and all the best. Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Navid Virani from Bastion Research. Please go ahead. Hello. Am I audible? Yeah, we can hear you. Yeah. Thank you for the opportunity. I have two, three questions. First one is on the newly commercialized products. We can see that there are five new products which we have commercialized in H1, FY 2026. I'm sure there will be a couple of products planned in the two quarters which are expected to come. What I wanted to understand was what is the agri versus non-agri mix in these newly commercialized products, be it H1 or coming H2? Do you want to answer that? I don't have that opportunity right now. Yeah. These are primarily in the agri side of it. Sorry? Sure, sure. Please go ahead. Yeah. These are primarily in the agri side of the business, the new commercial products in the H1. It will be 100% on the agri side, or are we looking at something only? The reason why I'm asking this question is just wanted to understand how are we progressing on the diversification aspect of the CSM business? Yes. I think. Right. In the CSM business, just to answer that, in the CSM business, yes, there have been two, three or three products commercialized in H2. It takes about three to five years to really get to the ramp-up stage, yeah? Just to give you a sense of what it takes, because you get into the evaluation, you get into the early stage, and as the production molecules pick up, the values go up, yeah? Yes. Maybe Axan is there. Axan can explain that how many of HM or non-HM are there. In the first half, yes. Yeah. Yeah. I just try to answer it. At this point of time, we have come. Audio. Audio is not good. Yeah. I think that's the challenge he's having. Let me just—is it better now? Yes, yes. Hello? Yes. Go ahead. Yeah. This year, in the H1, we have been able to commercialize five to six new products. Another five to six new products are planned, which has got the mix of both agrochemicals as well as the non-HM products. We are ramping up our capacities with the expansions wherein we had a plan to start the new plants. Out of the two plants which are in the process of getting commissioned, one is of the non-crop chemicals plant where we intend to take up these products. That is where we stand today from the new product commercialization point of view and the assets which are being leveraged. Thank you. Sure. Thank you for the clarity. Next up, I just wanted to have a long-term view on the biological business since we are so bullish and are investing heavily in this business. Sir, if we take a next year five-year view, given the visibility which we have right now, how big do we see the biological business becoming for PI? If you can give some numeric sense to give us an understanding, that would be very helpful, sir. Yeah. Today, as you look at the biological business to where we are today, we expect it to at least have a three- to four-folds because that's an area where we've invested. We've shown that kind of growth. If you look at the past, we've given a 25%+ CAGR on the domestic business, now with global platforms and with the development regulatory timelines. Once we're able to cross those hurdles, we see at least achieving that level of growth, yeah? Sure. Thank you for that answer. If I can squeeze in one more, wanted to understand regarding the pharmaceutical business. In the past, we have talked about onboarding three to four large pharmaceutical clients in the segment. Where are we on that particular journey, sir? As we have mentioned in my earlier talk today, we've onboarded a couple of pharma companies. Onboarding is one process, but then moving into the next phase of the journey, and that's where we are right now on, yeah? Okay. Thank you for all the answers. Wishing you all the best. Thank you. The next question is from Vivek Rajamani from Morgan Stanley. Please go ahead. Hi, sir. Thank you for the presentation. Apologies if this was addressed in the previous questions, but just wanted to clarify where exactly are we with respect to the regulatory challenges that you were alluding to on biologicals? Have we seen the resolution for that, or that would continue for maybe one more quarter? In that case, how should we think about the scale-up of the biological segment in the next two quarters and potentially fiscal 2027? That's the first question. Sorry, I didn't get the first part of your question clearly. I just wanted to get a sense of, with respect to the ongoing industry regulatory challenges on the biologicals with respect to registrations and everything else, just wanted to get your sense where we are in the resolution of that, if it's been fully resolved, and if we could get some normalization from the next quarter, or how should we think about that process for the rest of the fiscal 2026 and fiscal 2027? If you look at it from what was mentioned earlier, for the Indian regulatory context, there have been disruptions. We are expecting to see in this coming quarter or the next quarter for that to somewhere wind out and get sorted. Regarding the global perspective, Jagresh gave an outlook to say some of these are there, and by 2028 or so, we have seen some of these things moving well. Sure, sir. Just one clarification there. I think in the previous quarter, you mentioned that because of this, you could not make any sales in the previous quarter. Would it be fair to say that at least we started to see some traction come back, or that is still some time away? Yeah. As you know, there were bans put on biologicals with the regulatory framework in India. Those have now been sorted out, but now we're in the regulatory phases of getting the documentation procedures, which government is taking their own time. Once that comes, we see that move at least in the fourth quarter, yeah? If that's specific to India, I wouldn't mention that. Okay. Thank you. Yep. Thank you, sir. That's very clear. The second question that I had was just some color with respect to the U.S. tariff, if that's been having any sort of impact on the business or the conversations that you may have with respective customers. Any color on that will be super helpful. Thank you. Yes. The U.S. tariff is a complicated conversation. For the present, we are not seeing much, but clearly, we are seeing confusion and other takeoffs and understandings both in the ag and the pharma sector to have a long-term clarity, which is creating slowdown in there, I would say, in decision-making, yeah? Sure, sir. I'll rejoin the queue. Thank you so much, and I'll delete this. Thank you. The next question is from Tejas Pradhan from Citigroup. Please go ahead. Yes. Hi, sir. Just to clarify, on the domestic biological business, could you split out what would have been the impact of the regulatory changes from this quarter revenue perspective? For half part of the year, the business was under restricted category. Then post, as Manik mentioned, we are still in the process of getting approvals from the state levels to continue the sales. Yes, it has impacted significantly, and that's why you are seeing the overall agri business being significantly down in this particular quarter. To be honest, we do not have that exact number on hand, but maybe we can split it up with Sanjay later, yeah? Sure, sure. No problem. Apologies if this was clarified earlier, but just on the FY2026 overall guidance, we still maintain the guidance that we had initially provided? No, we had said that looking at how the H1 has gone, and I think we had a conversation as you are trying to get it, we expect the positive trajectory now coming from Q4 in the exports. The domestic business, we expect a good rally. I would put a cautious statement given the weather situations of climate change, which we were expecting very good in that first half, have drained out. I am hoping that this quarter, if things go well, we should be well on that path, yeah? Okay. Thank you. I would keep those guided muted, yeah. Okay. Thank you. Thank you. Thank you. The next question is from Sumant Kumar from Motilal Oswal. Please go ahead. My question regarding Pharma, we have a bit of loss. When can we expect a positive trajectory in the coming year? Sorry, I think your line is dropping off. Could you just repeat again? I'm told the farm business, the profitability will loss. Sumant Kumar, sorry to interrupt, but your voice is breaking. If you are on a headset, request to use the handset. Can you hear me now? Hello? Hello? Yes, sir. Please go ahead. Yeah. So my question regarding pharma business loss in H1, and when we can see a positive trajectory in the coming year? What is the key molecule development happening in the segment where we can see a momentum in the we can see a profitable growth? Go ahead. Go ahead. Go ahead, Sanjay. No, no. Please go ahead. Yeah. As we explained, we are right now in the investment phase, okay? We expect that this phase will continue for another year or so. We expect that in the next one year, we will reach to a scale that we will be able to sustain and maintain profitable growth and also achieve positive revenue. Now, according to CSM segment, we have seen a significant degrowth in Q2. Your audio is not good at all. We are not able to understand. Mr. Sumant? So my question regarding— Hello? Yes, please go ahead. My question regarding CSM, we have seen a muted performance in Q2 in CSM segment. You are talking about recovery going forward. Can we see some single digits in Q3, Q4? Again, your audio was not good to understand your question. Mr. Sumant, we request you to call us back. As we are already guided, that we anticipate recovery of growth from Q4, and accordingly, this whole year will pan out, okay? Will we see a bit of growth in Q3 also? I think it is too speculative to talk about quarterly things. What we are indicating today is that what is our current visibility on domestic and exports? Okay. Thank you, sir. Thank you. Next question is from Darshita from DSP Asset Managers. Please go ahead. Yeah. Thank you for taking my question, team. I just had one question. What's giving us the confidence of the recovery that we are anticipating in the fourth quarter? That's coming from what we see from the feedbacks from our customers, right? Because their expectations are what they're looking from us, the deliveries. Got it. Okay. So this is maybe a schedule, a tentative schedule shared by the customer, which is driving the confidence. Yes. Got it. Okay. That's all. Thank you. Thank you. The next question is from Farokh Pandole from Avestha Fund Management. Please go ahead. Hello. Am I audible? Yes, sir. Hello? Please go ahead. Yeah. Yeah. Okay. I'm referring to the presentation where there's been a mention of PI's own NCEs and there's been good progress and forward movement on that. Is there some additional color or light you can shed on these initiatives and tell us how we are placed and sort of some kind of timeline with respect to the future? Second question, with respect to the cash position, is this sort of a level that we are comfortable with? How do we see that playing out, or what's the plan with respect to future cash flows? Okay. There was a lot of disturbance in the line. If you can please quickly repeat your question. Yeah. My first question—hello? Yeah. My first question is about the from the presentation where you mentioned the commercialization of PI's own NCEs progressing well. Is there color or light you can shed on that? My second question was with respect to the cash level that we are running at, the net cash level we are running at this point in time. How do we feel about that? With respect to future cash flows, what is our thinking on that? Okay. Okay. So for our new NCE, we are on track for registration, first registration in India. While we are waiting for it, we have also gone ahead for a large number of field trials in India and working on product development in that direction. As regards cash flow question, yes. We are right now evaluating several inorganic opportunities in the domestic and also in other technology areas outside India as well, okay? At the same time, given the kinds of uncertainties in the general business environment, we are not hurrying up or in any kind of hurry to kind of deploy the available cash. We are happy sitting on cash and looking for the right set of opportunities. Great. Thanks very much and wish you all the best for the coming quarters. Thank you. Thank you. The next question is from Chetan Thacker from M3 Investment. Please go ahead. Hello. Am I audible? Hi. Yeah. Hi. Yes. Just one clarification on that contract asset piece. Is the, from an accounting perspective, is the revenue already booked in this quarter, and that is the asset that is sitting on the balance sheet? Yes. Yes. Yes. This is how it is. By the way, this is not the first quarter that we are talking about contract assets. It has increased in recent quarters mainly because of deferred customer schedule, supply schedule. This has been the accounting practice as per Indian accounting standard for quite some time now. There is nothing new about it. Sure, sir. So I just wanted to clarify that for my understanding. Thank you so much. All the best. Thank you. The next question is from Madhav from Fidelity. Please go ahead. Hi, good afternoon. Thank you so much for your time. I have two questions. The first one is on the pharma CDMO business, which we're looking to grow. As we understand, looking at many of your peers in India as well, it's slightly a longer gestation business. Just wanted to understand where we are in that journey in terms of building up the pipeline and if you could give some color in terms of how many projects we are addressing and how many are in phase one, phase two, phase three. If you could give some color there on our sort of pipeline, that will be super helpful to understand the business better. Thank you. Yeah. Ramesh, if you are there, you can come in. Sure. Thank you for inviting me. Can you hear me? Yeah. We can hear you, Ramesh. Okay. Fantastic. Yeah, I can give you some color. What we've done is we've onboarded seven new clients in the first half. The focus is on investing in the CDMO business and that part sustainably and carefully. There are two pieces to that, right? One, we looked at growing late-stage programs, onboarding late-stage programs, which in the next two to four years potentially start giving you sustainable revenue. The other one is onboarding quality customers. On that regard, in addition to the seven customers that we have onboarded, I can tell you that we have two new late-stage programs that we have onboarded, and we also expect to add two more late-stage programs in the second half. Right now, these things have to gestate. They shouldn't, hopefully, have drifted. As they move forward, they can become good businesses. We have several that we are actually actively pursuing, late-stage opportunities, and we will see how some of them play out. That is the first foundation. The second foundation is quality customers. I think Mike and Sanjay referred to it in their opening dialogue. We have onboarded two large pharmas, and we expect to get one more in Q3 and one more in Q4. We have given guidance that we will try to onboard four, and we are well on track for that. Hopefully, that gives you a flavor. Wonderful. So currently, how many phase three programs do we have? I'll gently comment on that. In terms of late-stage programs, we have six. Six late-stage. I mean, usually, late-stage pilots in the industry is usually phase three or late phase two, something like that. Is how we should also look at that, right? Yeah. Phase two. Phase three. Yeah. Phase two, phase three. Got it. Okay. Perfect. Understood. There are no commercial programs yet, right, for us? We are doing more pipeline development work. There is no commercialized molecule yet in our revenue. We have quoted on some. Yes. Quoted on some. Okay. Okay. So this would be as a second source to an already commercial molecule, something like that, a quote also? That's correct. Okay. Perfect. Got it. I thought the second question was PI in the past few years has been looking to feed in electronic chemical business as well. I do not know if you all have shared any update yet on how that is progressing in terms of ramping that up and any update on that business as well. That would be helpful. Thank you. We are already doing electronic chemical products for the last few years. I think already we have commercialized five, six products. Currently, also, we are commercializing tomorrow. On top of it, we have a very good pipeline in R&D for a scale of studies and development. Yes, we are very much there in electronic chemicals and growing and also expect to do well in the next one or two years. Is there any comment you can share in terms of capital or CapEx that we've installed for electronic chemicals specifically for us in our current growth log? I think Atul, while responding to your question, already mentioned this that we have one plant which is already in build-up, near commissioning. We already have another plant, multi-product plant we are building for electronic chemicals. Yeah, there are a couple of plants which are being used for these kind of products. Most of the growth log, including the one that we are adding into one which is, I think, already. We do not have this number in front of us. Maybe outside, right? Understood. Understood. Thank you. Thank you. The next question is from Krishan Parwani from JM Financial. Please go ahead. Yes. Hi, sir. Thank you for taking my question. Just one from my side. I think Mayank, you mentioned that you have optic visibility from Q4 FY 2026. In that context, can you guide us for the order book status for FY 2027 and probably a resultant CSM growth in FY 2027? Book would be in the range. Sorry? Yeah. We will not have order book conditions for FY 2027 or 2026 or something like this. We generally keep a track on the overall order book position, which is around $1.25 billion, around $1.25-$1.26 billion as of now. I think it is too early to kind of guide you for FY 2027. We still have to see how the inventory restocking and normalization happens in the next two quarters. Yes, we will surely guide you maybe sometime in the fourth quarter around what is our visibility for FY 2027 and FY 2028. Okay. Just one clarification. I think you have stopped giving the overheads and the gross margin for the pharma piece from this quarter. Can you please give us for the second quarter, or you are going to stop it from going forward? Most of the revenue, sorry, the gross margins have been in line with what we had seen in the past. In this particular quarter, the EBITDA or the pivot margins are what are required to be disclosed, and they have been there. There has been slight decline in the profitability in this quarter for the pharma business due to some one-off processing-related costs and unfavorable product mix. As you know, the overheads have been higher because we've been in the investment phase building capability buildings and people cost and processes. That's the stand on the pharma business. Okay. I'll be, I think the information structure is the same as previous quarter. Is that correct, Sanjay? Yes. The statutory requirement disclosures all have been given. I think he wanted more color on the gross margins piece and at the overhead level, which obviously gets culminated at the pivot level. Okay. Okay. No problem. Thank you so much for answering my question. Wish you all the best. Thank you. Next question is from Raju from Antique Stock Broking. Please go ahead. Thanks for taking my question. I think all my questions have been answered broadly. Sir, last one thing. If I look at the gross margins, that has increased by roughly around over 500 basis points. Is it because of lower inventory that has helped in terms of getting the gross margin, or was there only the product mix that you have talked about earlier? It is primarily because of product mix. As we have explained in the past also, every quarter you will have variability in the product mix. It is primarily because of product mix. On a longer-term basis, on an annual or a longer-term basis, as we have guided in the past, 50-52% gross margin is what we believe is sustainable level. Understood. Sir, one last clarification in terms of CSM order book that you have mentioned. That is $1.25 billion that you have said, right, as on Q2? Yes. Okay. Yeah. Thanks. Thank you. The next question is from Abhijit Akella from Kotak Institutional Equities. Please go ahead. Yeah. Thank you so much for taking my follow-up. Just to understand the point about the contract effects one last time. I'm sorry. It was a bit unclear in the past. This is basically revenue that we have recognized, but the billing has not been made to the customer. Is that basically how it is? Yes. Correct, Abhijit. Okay. How do we make the decision regarding when to shift it from, say, inventories to contract assets? I guess we would have the choice of showing it as inventories as well. In what setting is that? No. Accounting is not done by choice. Accounting is by accounting standard. So if you are doing something exclusively for a customer and you have an order in place, accounting has to be done that way. It is not by choice. Okay. Okay. So the increase in this line item is largely because certain large deliveries have gotten deferred in the recent past? Yes. Yes. Okay. Got it. And just last thing on the outlook for this year and maybe a little bit beyond. Fourth quarter, so third quarter, we still expect maybe a little bit of lingering softness in terms of the CSM business on a year-on-year basis. But 4Q onwards, we expect growth to revive. Is that how you're looking at it, sir? Yes. Yes. You're right. Okay. Finally, I mean, just with regard to calendar 2026 or fiscal 2027, whichever, are you seeing that there could be a recovery in the agro industry in terms of demand, or do things still look a little bit challenging? As I think in the earlier commentary, Mayank also indicated, we see recovery in the second half of calendar year 2026, okay? This is based on the discussions and the commentary we see from all the global players because the consumption is more or less normalized. The restocking also in many geographies has already happened. It is only a matter of next few quarters, two, three quarters, that the normalization of purchases and stocking will happen. Got it. No, that's very clear, sir. Thank you so much, and wish you all the best. Thank you. Thank you. We take the last question from Rohit Nagaraj from 360 ONE Capital. Please go ahead. Thanks for the follow-up. On the biological front, when do we expect the margins to converge to the business-level margins, I'd say 25% plus minus? As I explained, biologicals for us is a global long-term play, okay? We are right now in the investment phase. We have a very small scale revenue of per million. You will see that we will be growing at a very high growth rate, but we are also investing in the market development, in the product development for the next couple of years. My view is that as far as margins are concerned, for the next few years, we should only be focusing on scaling up this business and not looking at margin. I hope this clarifies. Also, let me add that biologicals for this industry is going to be the next growth level, okay? Last five years, biologicals is growing at double digits, while chemical is growing at 2-3%. Next five, ten years, biologicals will still continue to grow at that scale and become a significant portion of the overall crop protection. PI, being in the cutting-edge technology platform of pesticides, for us, there is a great opportunity to be at a right place at the right time in biologicals in the next few years. If we are able to scale up, which is what the aim is, to a level which is reasonable, the profitability is obviously going to be the outcome. Sure. That explains. Thanks a lot and all the best. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. Morning, everybody. Thank you once again for joining this call for PI, and look forward to connecting with you in the past. Thank you for all your support. Thank you very much. On behalf of PI Industries Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.