Ladies and gentlemen, good day, and welcome to the Q3 FY23 earnings conference call of Rallis India Limited. As a reminder, all participant lines will be in listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Desa from CDR India. Thank you and over to you. Thank you. Good day, everyone, and thank you for joining us on Rallis India Limited's Q3 FY23 earnings call. We have with us today Mr. Sanjiv Lal, the Managing Director, and Ms. Subhra Gourisaria, Chief Financial Officer. Before we begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and may involve risks and uncertainties. A detailed statement in this regard is available in the results presentation. I now invite Mr. Lal to begin proceedings of the call. Over to you, Sanjiv. Thanks, Gavin. Good afternoon, everyone, and thank you for joining us today on our Q3 earnings call. As mentioned, Subhra, our CFO, is joining me for this session. I'll begin the discussion by providing a brief overview of the industry before delving into Rallis' specific performance. At the industry level, overall demand, especially in the domestic market, was somewhat sluggish during the quarter, largely owing to delay in sowing on account of the extended monsoons. And higher channel inventory due to slower offtake during the kharif season. Having said that, rabi acreage for all major crops has been satisfactory across states and water reservoir levels continue to remain healthy. Demand in the international market, on the other hand, has also witnessed some headwinds due to stocking levels in specific actors and countries despite remunerative commodity prices. Moving on to Rallis' specific developments. Starting with our headline numbers, we have had a flat revenue compared to last year's third quarter. Domestic crop care business, however, grew by 6.7%, largely price driven. crop nutrition business grew by 22%. Exports revenues declined by 6.5%, chiefly due to inventory buildup at our customer end. As mentioned earlier, a challenging external environment, particularly erratic rainfall in the domestic market and headwinds in international business, restricted volume growth during the quarter. EBITDA for the quarter stood at INR 53 crores. EBITDA margins came in at 8.5%, lower by 2.3%, owing to lower gross margin and increase in other expenses. Profit for the quarter stood at INR 23 crores against INR 50 crores reported during corresponding period last year. Moving on to individual businesses, starting with our domestic business. As mentioned, the external conditions were not favorable for growth. Overall revenues were impacted by higher kharif returns due to erratic rainfall in states like West Bengal and Chhattisgarh. Our inventory levels, that was somewhat elevated at the end of Q2, has moderated in Q3, and rabi outlook looks favorable. In terms of new product launches, we introduced one new 9(3) emergent wheat herbicide, Daksh Plus, during the quarter. Our efforts in recent years have been directed towards plugging the gaps in our portfolio, especially for certain crops and certain pests. We have also been working towards expanding our distribution network and working on alternate channels as well. At the end of Q3, our retail footprint reached 60,000 for our crop care business. As far as international business is concerned, we have seen a decline in revenues during the quarter. The decline was primarily volume led. Higher inventory in some of the markets for AIs has been the chief cause. Utilization rates for pendimethalin, carfentrazone methyl, acephate plants continues to remain satisfactory, underscoring the key demand for these products. On a nine-month basis, metribuzin has seen gradual pickup in sales following normalization of inventory in the global market. As far as pricing is concerned, we have indicated pricing pressures for acephate in Brazil as well as hexaconazole in Southeast Asia. Regarding our seeds business, Q3 being a small quarter for seeds, our revenue was INR 24 crores. Focus is now on field-level demonstrations, marketing activities, and preparation for the kharif season. Our VRL trials on maize in Karnataka have commenced, and we will be taking up cotton VRL trials in the coming kharif season. In preparation for the upcoming kharif processing and packing operations, quality inspection of our inventory is underway. Overall margin margins for crop care as a whole was impacted due to headwinds in the margins from international business. We are hopeful of sustaining the margin expansion by increasing our focus on margin accretive formulation business and judicious customer mix. In terms of the contract manufacturing segment, we expect TKK shipments to commence in a small way from Q4 after a gap of two years. The two recently won contracts, which in a way reflects our commitment towards reviving and growing the contract manufacturing business, are awaiting regulatory approval in their respective markets prior to commercialization. We have had a number of good visits from some prospective customers to our plants, and we are hopeful that some of these will translate into future opportunities. Last, as mentioned in our previous calls, we are making steady progress towards reducing our dependence on China for raw materials by sourcing some of our key starting materials from domestic suppliers. To conclude, we expect the business to exhibit steady improvement going forward. For the ongoing rabi, we remain positive due to increased crop acreages, robust commodity prices, and healthy water reservoir levels. While the overall growth rate may be dependent on external factors, our efforts towards improving our product mix, widening our distribution reach, scaling up our capacities, and efficiently sourcing raw materials positions us well to limit the overall impact and deliver consistent results going forward. On a positive note, some of our new hybrids, for the seeds business, have had a good start with a record collection under the advanced booking scheme. With that, now I request Subhra to give us insights on the financial performance. Thank you, Sanjiv Lal. Good morning, everyone, and thank you for joining us today for our Q3 earnings call. I'll quickly walk you through our financial performance for the quarter, post which we shall commence the Q&A session. Starting with the top line, our revenues for the quarter stood at INR 63 crores as against INR 6.8 crores generated during Q3 FY22, a growth of 0.3%. The growth has largely been driven by the growth in domestic market and crop nutrition, while international business saw degrowth during the quarter. Domestic business registered revenue of INR 368 crores, higher by 6.7%, largely due to price hikes undertaken earlier during the year. Volumes during the quarter were largely benign as far as domestic business is concerned. International business reported a growth of 6.5%. Seeds business generated revenue of INR 24 crores during the quarter. Our placement for vegetable seeds has been moderated due to sales reorganization, which we spoke about earlier. EBITDA for the quarter stood at INR 53 crores as against INR 67 crores generated during the same period last year. EBITDA margins stood at 8.5% as against 10.7% last year. Gross margins are largely protected. Our actions in H1 to liquidate the high-priced inventory and also shorter procurement cycles going forward have helped us to largely mitigate the impact at gross margin levels. Our EBITDA margin got impacted due to higher marketing and demand generation spend. As you would appreciate, last year our activities were somewhat suppressed due to COVID. There was also one-off cost of INR 4.5 crores recognized for a demand notice served by us on a retrospective basis for few godowns by Bombay Port Trust. We are contesting this demand. PBT has got impacted by the increased depreciation charge for the newly capitalized assets, especially our formulation plant earlier this year. Higher interest expenses and lower other income have reduced the profit. Profit after tax for the quarter stood at INR 23 crores as against INR 40 crore during Q3 FY22, lower by 43%. Moving on to business-wise performance. Domestic business operated under a challenging environment. Delayed sowing season owing to extended monsoon, coupled with high channel inventory, impacted volume growth for the quarter. Despite external challenges, we continue to make steady progress in our attempts towards introducing new products, both 9(3) and 9(4), expect the momentum to continue during the year. These products are targeted towards plugging the crop and regional gaps in our portfolio. The international business witnessed a degrowth of 6.5%, albeit on a good base due to lower volumes amid inventory buildup at customers' end. The company is focusing on improving its product mix by increasing the share of higher margin products and also formulation products. We had mentioned earlier, one of the strategic priorities for us is to address the profitability of seed business. We have already merged the vegetables and field crop sales organization. We also had challenges since some of our earlier promising hybrids, especially in cotton, did not perform as per our expectations. As a result of which we are holding slow-moving inventory, for which we had recognized provision in H1 of the year. We are further reviewing the overall sales plan in light of the inventory levels and also our future development plan, and will conclude this exercise by Q4. A quick word on CapEx before I hand it back to the operator. Our effort on working capital optimization is progressing well. Inventory levels have moderated, and focus on Q4 will be to ensure good collection. To conclude, I would like to iterate that the company is taking necessary steps to enhance growth in both domestic and international markets. The focus remains on introducing new products, expanding distribution, and establishing alternate source for raw materials to decrease our dependency on China. The company is optimistic that these efforts will lead to steady growth in the future. That concludes the opening remarks. We can now commence the Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may please press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to do this while asking a question. Also, in order to ensure that the management is able to answer queries from all participants, kindly restrict your questions to query time. We will wait for a moment while the questions to assemble. We have our first question from the line of Varshit Shah from Ventura Securities. Please go ahead. Hi, sir. Thanks for the opportunity. My first question is that, on the raw materials side, are you seeing moderation in AIs prices, as China is ramping up production due to unlocking of the economy? What would that have an impact on our procurement and margins going ahead with next quarter? Varshit, that is indeed correct. We are seeing a decline in prices of AIs as well as intermediates. Of course, as these prices are coming down, we will see some amount of margin pressures. While of course we'll try and get the best price based on the competitive situation in the market. Yes, to answer your question, the prices of key materials are coming down, including some of the intermediates. Sure, sir. Well, because of this destocking, I mean, happening on account of lower prices and always channels destocking, in anticipation of not the lower price for the next batch of products. Are you seeing that the industry is playing more aggressive, both in the B2B and the B2C segment to kind of maintain sales? Is that something which is occurring at the industry level? Varshit, I will desist from talking about what others are doing. Our own understanding is that the inventory levels are tracking much higher in the market and there will be pressure on collections. That is why Shubhra has called out. There is a specific focus that we will be doing on collections because there is high inventory. Liquidation has been on the lower side. There will be pressure on both pricing as well as collections as various companies will be looking at liquidating the market inventory. What we had also mentioned is that at the end of Q2, we had indicated that our own inventory was on the higher side because of the way the monsoon was playing out at that point in time. We have, specifically, worked towards ensuring that our market inventory is moderated at the end of Q3. Sure, sir. I have more but I'll get back with you. Thank you. We have our next question from the line of [audio distortion]. Please go ahead. Yeah, hi. Thanks for the opportunity. Just have three broader questions. First is on the domestic business. If you can just kind of dwell a little bit on the inventory both for us and the industry. With segments or molecules, you've seen, you know, inventory being higher relatively. In relation, you know, when we say a 6% or 7% growth in domestic for us in Q3, in relation to the market, how would have that grown? Any perspective on the overall market performance and our margin in domestic, because I think in international business we took some hit in terms of provisionings and price corrections, being more severe there. Just to kind of have three questions on the domestic side to start with. See, on the domestic side, we will be seeing some amount of price correction, which will be there. The inventory levels are high because the pest infestation has also been on the lower side. There is high inventory level on that account, Chirag. What is the other question, Marina? Margins. Yeah, go ahead. Margins are largely, your question was on domestic business. Margins for domestic business are similar or I would say largely in line with the previous year. We're not seeing a compression in margins. Here our efforts in terms of pushing high-mix products have helped. Here I'm talking about gross margin specifically. On IBD, just to correct, we have not taken any provision, since you mentioned that we have taken provision. The impact is because of the overall market being competitive in terms of pricing pressure. Okay. Sir, the question on domestic on the, you know, how has the overall market grown? When you say- Okay. Yeah. inventory levels are higher, which molecules or segments these are, you know, in. Well, the domestic market, our own assessment as the growth has been fairly sluggish. Of course, since Rallis is the earlier companies to be reporting results, we really don't know what has happened, what others will be reporting. The our assessment on the ground is that the growth has been fairly sluggish, largely driven off lower consumption, lower application of agrochemicals. Okay. Just one more question was on the international side. You know, if you look at the commentary of all the major ag chem companies globally, you know, they kind of point to very robust kind of volume and traction, overall business traction for them in major markets. When we say that, you know, we've seen overstocking and inventory correction happening, are these specific to certain molecules like, say for example, like Metribuzin or Acephate or, you know, or any of those specifically, and is it just kind of in certain regions of office where this is a pain point or, you know, how do you see that? I think the pain point will be for specific molecules. For example, I'll just use the example of our own Hexaconazole, which is largely a molecule that we sell in China and Southeast Asia. There, we have seen very little demand coming from that particular AI. We've had a lot of challenges in placing our Hexaconazole in the Southeast Asia and China markets as well. We are seeing some correction which is happening or the consumption is happening and the inventory levels are coming down. That's why we are expecting maybe from Q1 we will get back onto a good track as far as molecules like Hexaconazole is concerned. As far as Acephate is concerned, there is a good demand. There is a lot of pricing pressure, which is coming from the customer end. Otherwise the demand has been good. Our plant has been running practically at its full capacity. Even pendimethalin has been tracking okay in terms of demand, overall demand. There is some slowdown which we are seeing. Metri on a 9-month basis also we've seen the demand coming back. Just one more data input, Chirag. For 9-month period, we have still clocked 31% growth in international business. As this quarter was, a degrowth, but overall still we are looking at 31% growth on the 9-month basis. in Metribuzin, has the price- Mr. Chirag, I request you to come back in. Thank you. Sure. How has the price trend been like? Is it kind of settling down now or any perspective you can share in the demand supply economics in Metribuzin? Yeah. The metribuzin prices are certainly coming down. The key starting material prices have also come down. Both of the prices of the finished AI and the key starting materials are tracking in the declining trend. Spread will remain more or less in a similar range, Chirag. Thank you. We have our next question from the line of Abhijeet Akle from Kotak Securities. Yeah. Good afternoon, ma'am. Thanks so much for taking my questions. Just a couple from my end. One is regard to the inventory position. So compared to normal levels, would you say the inventories are still high in the domestic as well as export markets? That was one. Also while in India we understand that the, you know, high channel inventories are attributable to the, you know, erratic rainfall and low pest infestation and those sorts of things. What exactly is the reason for the inventory build-up overseas? You know, what has led to the slowdown in demand over there, if you could please advise for? Thank you. The inventory level for our molecules in the international market, Abhijeet, there has been some pushback that we've been getting, as I mentioned, on Hexaconazole from the Southeast Asia market. As far as the domestic situation is concerned, I think I've already answered that, where we believe that the inventory level is on the higher side, largely driven off lower consumption of these agrochemical formulations in the domestic market because of lower pest infestation. Okay. Do you see this inventory, you know, rather, demand in the international market as more of a temporary phenomenon because of falling prices of agrochemicals? Is it, you know, company has to do with, say the weather conditions? No, no, Abhijeet. I think, overall, there is no slowdown in agriculture. Perhaps what has happened is, some of the customers have built up inventory and, also because they also had their financial year closing. There could be some restocking that they are also wanting to do before they again start the procurement cycle. This could be one of the reasons. Otherwise, I don't think there was, of course, some drought conditions in certain markets, but that is not impacting to that extent on the overall demand. Got it. Thank you. One, just one last quick thing for Shubhra, if I may. The gross margins have improved significantly on a quarter-on-quarter basis, essentially. Almost 500 basis points it seems. What could have driven that? Do we see this as the new normal going forward for succeeding quarters? Abhijeet, there are two factors. See, one, gross margin, as I said, because we were liquidating some of the high drive inventory in Q2, that has also impacted the Q2 when you see in comparison to Q3. Also we recognized provisions for our slow moving stocks and inventory. Q3, we have been able to largely protect. That's why I said that largely protect our gross margins through pricing actions. It's difficult to say whether the margin levels will sustain because we will also need to be watchful of how the market dynamics work out, both in terms of input raw materials and future pricing by competitors. Got it. Thank you so much, and all the best. Thank you. A reminder to participants to press star and ask a question. We have our next question from the line of Yogesh Tewari from Arihant Capital Markets. Please go ahead. Thank you, sir. Sir, my first question is, a re we seeing any increased business environment in Northern Europe, specifically the Benelux region? If you can share some color around impact in terms of volumes and pricing in that region. So, Mr. Tewari, actually, what is working well for us is that two of our products have got what is called technical equivalence. Metronidazole and Pendimethalin have got technical equivalence in EU. On that basis, we are going to be adding more customers. We have already secured some small shipments from customers both in the U.K. as well as in the EU region. So for us, there is a good development as two of our products have got technical equivalence. Do we expect this to continue in Q4 and coming quarters as well for Northern Europe? Yes, yes. For us, it's going to be a positive development because we have been waiting for some time for this technical equivalence. This opens us, gives us the opportunity for new customers for these two important products in our portfolio. Sir, anything related to the current, you know, gas environment, because of the conflict, the prices have increased and therefore, the local players are, you know, importing more from India and other countries? Anything connected with this as well? Any demand you are seeing from this driver in Northern Europe? Yeah. We had seen some demand, basically demand, for certain of our chemicals which was coming because supplies from Europe into other markets had reduced because of the gas related issue. We had seen some demand for some of our chemicals happening on account of that. That was more for supply to the domestic market, not for the international market. You know, there is a registration process that is required before we can supply into new markets. Thank you. We have our next question from the line of Alok Ranjan from IIFL AMC. Please go ahead. Sir, we wanted to get clarity on the impact of the lower AIs prices in exports market. You mentioned that the demand for the product was lower, so it was more due to the volume that the international business have not done well. My question is like, do you see the realization impact to come in coming quarters? Also for company like Rallis and other companies which might be having distribution in the international markets, how the impact is different in case of prices going down? If you can elaborate on both the two, please. See the realization, the question was on realization. Going the international. For the international market. Certainly there is some pressure coming because of the declining prices of starting materials and AIs. There is going to be a pressure on the selling price. You know, one of the things that we had done in the last couple of months is also to be a little more moderate in our planning and sourcing of the starting materials. So that to some extent is going to help us in terms of our margins. We still have some carry forward pricing which is there in Q3. What we wanted to highlight was the prices have started to taper in terms of key starting raw materials, which will soon start reflecting in terms of NRBs. What we'll try to sustain is the spread between, so because the input raw material is also going down, but it will take some time depending on the inventory levels. Got it. Second clarification was that, I assume that we are selling through dealers and distributor here, and we do not have the distribution presence of our own. For, you know, companies like Rallis and other companies which might be having distribution structure, is there the differences only in the visibility that you can get in terms of product availability or someone who might be having their captive distribution structure, they will be having better understanding of the demand or something or there are more differences that happen? See, we are largely our customers are largely not distributors directly, but they're basically companies who do the formulation and they will then distribute the formulation in their respective market. Apart from Africa where we go through distributors. Otherwise, for Brazil, for North America, for the business that we do in Europe, it is largely to the main customers. Southeast Asia is also through distributors. We do get fairly good insight as to what are the inventory levels and all. If you had joined us in the Q2 call, we had indicated that there is going to be some pressure on offtake during H2 for our exports business. We had in fact talked about this. Got it, sir. Sir, just the last question on the new product launches in the YTD FY23. There are three products that you have highlighted, nine key products, especially the Pendimethalin, the Metribuzin. Individually, they are bigger products. The combination products that we are coming up with, apart from that there are two more. Could you highlight like what is the expectation we are having from these products going ahead? The three products that we have launched, one of course, as you pointed out, is twenty plus thirty. This is Daksh Plus. This is a wheat pre-emergent herbicide. We had introduced this product for the current season. This is expected to be a important product in our portfolio going forward. The other two products are technicals, are from our partner company, Japanese company. These are very, very innovative products. One is a product for whitefly, the other is a fungicide which we have also launched. These volumes will build up. There's a lot of ground level activity that we will be doing in the kharif season, especially for the other two products, not the wheat herbicide, 'cause that season is over for us for the year. We expect a good traction. We are working on securing the AIs from our Japanese partner for that. Okay, sir. Thank you. That's all from my side. Thank you, Alok. Thank you. We have our next question from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question on, you know, the volumetric growth, both in the domestic and the export market. Given, you know, your comment just suggesting there's still elevated inventory in both the markets. What could be your thought from a, let's say, you know, when should we see a positive growth there, more directionally? Ankur, as far as the domestic market is concerned, you know, rabi is going to be a great season because for all the right reasons, the acreages are up by almost 1.5% for multiple crops. There is no issue in terms of water availability. Of course, we've got a kharif season which is coming up. We remain extremely positive on the overall demand for agrochemicals. Of course, it is subject to the weather conditions and pest infestations, which will impact the consumption. That of course, we will see how that plays out. As far as exports business is concerned, you know, while we did see some slowdown in terms of offtake during Q3, we expect that the offtake to be back to the normal level towards Q1 of next financial year. Although the prices may be on the lower side, but we do expect the volume growth to be at a level of about 3%. I'm talking about overall agrochemicals volume growth in the global market at around 3%. The prices of course would have settled at a lower level compared to the pricing that was there during the current, rather the calendar year FY22, because the prices were highly elevated. Sure, sir. During this transition wherein, you know, higher prices get normalized with lower one, will there be a hit or impact on our earnings? We'll be able to manage our supply chain efficiently and probably, you know, from a even on a quarter-on-quarter basis, the margin hit should not be there. Yeah. That's what I mentioned. We've also been sort of, you know, being a little more judicious in our sourcing of raw materials because of the declining market. We would not like to be seen holding high priced inventory. We've also been taking slightly more judicious calls on our procurement. That being said, in the month of December, you'll be aware that the way China had announced unlocking of the economy, there was a certain anticipation that it could lead to significant issues in terms of logistics and supply chain. In the month of December, we have indeed taken a slightly more aggressive position on the key starting materials that we need. To that extent, the prices have been more or less stable, so it's not that we've been buying very expensive inventory. Prices have remained more or less at the same level during December and even what we are seeing now. It's not that we've landed up buying very expensive inventory, so we don't expect that to have a negative impact on our margins. Thank you. We have our next question from the line of Akhil Broachwala from IIFL Securities. Please go ahead. Thanks so much for the opportunity. Two questions from my side. Basically, this CapEx guidance that you've given of INR 200 crores. Like, earlier you mentioned that CapEx would be somewhere around INR 250 crores. Like, are we kind of witnessing some slippages in terms of CapEx? Where are we, you know, in terms of commissioning of MPP plant? One was on that. Secondly, you mentioned that, you know, there are two new products for which you are awaiting regulatory approvals. How sizable are these products? You know, whether we have, whether these products are going to get manufactured from our existing lines or are we anticipating any further CapEx for these specific molecules? So the overall CapEx, yes, that is right, that we have indicated that we'll have a CapEx of between INR 200-250 crores. We are currently outlooking that we will be able to get to about INR 200 crores. This is largely towards the multi-purpose plant that we are building out. The project is running a little behind schedule because of certain materials that we have been struggling to get on time. Currently, we are outlooking the commissioning of the plant within this financial year itself. As far as the products that I had alluded to, which are awaiting regulatory approval, both of them are small opportunities initially, so we will see only small revenue coming from there. One of these products is to be produced in our multi-purpose plant, perhaps towards the end of FY 24. Again, that depends on by when the regulatory approval will come. One is a product that we will be formulating for one of our customers. All going well, regulatory approval being available, we should do that in the next financial year. These are things that are small building blocks for our contract manufacturing business, which will grow over a period of times in term of the size. Right. Specifically for MPP, I mean, are we targeting any specific customers, you know, wherein we tie a few supply contracts with you or here also, like, we are expecting some bit of regulatory cycle, approval cycle to play in. Because of that, probably, the revenue contribution might, you know, delay even further. Are we looking at those kinds of delays as well? No, certainly, we are going to have to go through a regulatory process. While we are also looking at doing some intermediates, but largely we've been working on AIs only for some of these customers which will require regulatory approval. It will be maybe two years to three years before we will be able to have any significant revenues coming from the contract manufacturing opportunities that we are building out. Understood. Thank you. That's it from my end. Thank you. We have our next question from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Thank you, and good morning. Can you give us the value of exports done year-to-date this year compared to the year-to-date last year and for the third quarter in terms of INR growth? No, no, we've understood the question. Subhra, he's wanting the 9 months revenue on exports for FY 23 over FY 24. You can just call that out for Ramesh. Ramesh, international business, I said that has done 31% growth. This year was INR 574 crores, and this year we have clocked INR 6,751 crores till now. If all the [audio distortion]. Okay. In terms of your MPP business, can you indicate at full potential what the kind of revenue you can generate or net return if you're investing those INR crores? Would you try to assume about, say, INR 400-500 revenue over the next three years if the [audio distortion]. Ramesh, perhaps we'll keep this answer for another meeting. Currently we are outlooking one of our own AIs to go into the MPP to start with. We're also looking at another two contract manufacturing opportunities to be in this plant. Maybe six months from now, we will get a better fix on answering your question. Okay. Just one last thought. We are looking at, you know, the next few quarters being a little bit, you know, up or down term in terms of pricing. If you look at FY25 once prices are stabilized, assuming that we do 5% volume growth, would you try to assume another 5% of price growth and say 10%-12% overall revenue growth once markets are stabilized or rally? Ramesh, You know, the question which you're asking is that what is the kind of volume growth and price growth that we can expect. You know, we are really looking at driving our overall growth. Whether it is from our domestic market, international market. Whether it is from our portfolio of crop nutrition. All these levers we will be using for driving growth. We would not like to specifically call out what is that% growth that we are driving for. Thank you. We have our next question from the line of Darshita from Roc Broking. Please go ahead. Hi, thank you for the opportunity. Hope I'm audible. Yes. My question is regarding the seed provisioning. I think Subha mentioned or Sushant had mentioned that we will be doing an exercise to identify the provisioning for the seed. Was that to do with identifying how much more provisioning do we require, or was that to do with providing the actual provisioning numbers for those seed provisions? No. Typically in Q4, you know, we start planning for the processing and packing for our seeds business. Of course, it goes through a lot of quality checks. As you're aware that we are sitting on considerable market returns, coming out of FY21, especially on the cotton side. There will be a complete analysis done on if any further provisioning that may need to be done. Darshita typically as an annual exercise, we look at the entire impairment in Q4, which is where in this year, in light of, what is the future sellable plan, we'll conduct this exercise. That's why I mentioned that we will finish this exercise by Q4. Okay. do we expect... I think, lately in the second quarter, coincident mentioned that there might be some more provisioning happening for the current year, specifically in the second half of the year. Do we expect something coming in for, Q2? I think, there will be certain additional provisioning that may be called for, but we will get a fix once we've done the entire process, Darshita Shah. Okay. Okay. Could you provide some more clarity on the rent bit, the provisioning of rent? Sorry to interrupt. Can you please come back in the queue? I just have one question. It's okay. Go ahead. Go ahead. Go ahead, Darshita. Yeah. I wanted to get an understanding of the rent provisioning bit. I think we've already, we have made a provision of over INR 40 million during the current quarter. What will that be like for Q4? Will we be providing for the entire INR 44 crore, the provision for the entire INR 44 crore in the rest of the FY 2023? Dashatha, we have got a demand notice, as we have mentioned in the notes, of INR 43 crores. This is for the period 2012 to 2022, which we have got it on a retrospective basis. What we have provided is, the management's estimate of the realistic amount that would be required to settle the obligations in December 2022. In future periods, on a similar run rate we'll be providing. We do not expect to provide the full amount at this juncture. Thank you. We have our next from the line of Somaiya V from Spark Institutional Equities. Please go ahead. Thanks for the opportunity. The first question, you did mention that on a year-over-year basis, the domestic revenue growth was based on price hikes. On a quarter-over-quarter basis, was there any price hike as one? Second, given the RM price trajectory or the scaling of an RM, the price hike part, is it largely done? Have you come to a point where the RM softening has happened, any more further price hikes are not required? That's my first question. On the domestic business side, we did mention that it's been largely price growth. These are the price corrections that we have taken during the quarter. And of course, the pricing has to be in consonance with what is the competitive situation at that point in time. For Q3 we have taken price increases. Sugar and natural have something more. There'll be largely residual, carry forward pricing. The in-quarter pricing will be very low, which is when it starts anniversarizing. That's what we said, that price growth will come under pressure when we carry forward pricing of first half will start anniversarizing. Understood. My other question was, because the RM prices have already started to cool off maybe last couple of quarters, so are we at a point where further price hikes are not required? The full impact of higher RM is something that is now gone for? We will go by replacement pricing. We don't go by purchase price. We'll have to keep the pricing relative to the market. It's not that across the portfolio we'll have price drop or price increase. Depending on, which pockets of the product, where is our pricing strength, what is the competitive scenario, that's how we take the pricing. Largely the price hikes have now come down and in very few pockets we will see price hikes now coming through. Okay. The other question is, you know, I mean, the sales return you said, the domestic funds have an impact. Any color on what is the extent and, if not for this on a normalized sales return basis, what would have been the volume impact in the current quarter on the domestic front? It would be difficult to call out this number very specifically because we've made provisions for sales return considering historical run rate and management judgment. I would say that yes, the sales returns are higher, and this especially as we called out is in the eastern market, where you know that there were a lot of vagaries of monsoon. Thank you. We have our next question from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity. First question, during the first nine months, can you provide what was? Sorry. The first person not on the line. One second. One second. Hello? Yeah. Is it better? Good. Good. Carry on. Yeah. Yeah. Yeah. Thanks, sir. First question is, during the first nine months, can you split up, what was the volume growth in domestic and international market? Overall volume growth? Right. Right. See, international market, our volume, our growth was 31%. I would say it's fairly balanced between volume and price. We can say that it's a good growth. In domestic market, our growth was 15%, 14.6. Again, here prices constitute a major part of it, but we have got volume growth as well in low single digits. Great. I've got it. Second question is, we mentioned about the feeds business reorganization, on the vegetable feeds front, oilseed front. When do we expect that this exercise will get over and we'll see the normalized performance from the feeds business? No. Rohit, I'll just go back to what we had said at the Q2 call. What we had mentioned is that we are going to be subsuming our vegetable seeds business into the field crop business, right? There is no separate line of business for vegetable seeds. This is now all part of the seeds organization, the sales organization. That exercise has been completed., What we had also done is just to avoid any serious issue on market returns on the vegetable seed side, we had also moderated the placement of vegetable seeds. Therefore, when you see our revenue on the seed side, it is reflective of the lower placement of vegetable seeds. That being said, the work is complete. The sales team harmonization has been completed. That is a question related with the sales seed sales organization. Right. just, you know, a small clarification on the slow-moving inventories, you just explained, Subhra explained about, with the decision will be taken in Q4. Once these slow-moving inventories decision in terms of provisioning is taken, after that from Q1 FY24, we'll have a normalized seed business wherein based on the demand supply situation, the returns will come, and we will not have to take extra provisioning for any excess inventories. That is our intention, Rohit. We want to just make sure that the business is back to its normal flow. We had also mentioned in our earlier call that we are going to be looking at our seeds business very closely. Some of the aggressive growth plans that we had set out in the previous year, we had moderated it. You are aware that the seeds cycle tends to be almost two to three years, starting with parent seed production, hybrid seed production. We had reduced the acreage that we had taken up for the potential growth in our seeds business. We had moderated all of that. With whatever corrections that we need to do during Q4, we would be on a normal sales cycle business from the forthcoming, upcoming relief. That is Q1 of next year. That's why we'll do, Rohit, a complete exhaustive exercise of looking at complete inventory levels and even doing a proper impairment testing. From Q1, as you rightly said, we are going by the flow of market demand and supply. Right. Good. Got Got it. Thanks a lot for answering all the questions and best of luck to all. Thank you. Thank you. We have our next question from the line of Rohit Sinha from Sunidhi Securities. Please go ahead. Yeah. Hello. Sir, thank you for taking my question, sir. Firstly, I would like to have some clarity on the other participant's question about the two contract manufacturing products. Approvals are pending on our side or from the customer end? Have we worked on the pilot project as of yet? Yes. The pilot work, all approvals are in place. As far as we are concerned, the process is now at the customer end for the regulatory approval. Okay. Okay. Thank you for the clarification. One question is from my side is on the bioproduct side. On the bioproduct space, how we are placed and how has been the market outlook as of now, especially when government is pushing for more towards this biofertilizers side? Rohit, this is actually a important part of our own growth strategy, growth plans for our overall domestic business. As had been called out, we have seen a good growth even in Q3. While the crop protection may have been a bit subdued, the crop nutrition category, which includes things like biologicals, micronutrients and the soil conditioners. We're collectively calling it as a crop nutrition category. We are seeing a good traction for these, for this category. We've also been adding newer products which have been well received, including some of the biopesticides. We are continuing to add more products into this category as well. Okay. Any contribution% we are targeting in next three years, like 10%-15% kind of number? You know, one of the things, Rohit, that we have articulated, and that is also for our domestic crop protection business, we believe that our network and our sales organization will help us deliver better than the average for the industry. Whether it is crop protection or whether it is crop nutrition. If the crop nutrition category is growing at an average of 15%, our objective is to grow at a rate which is higher than the average of the industry. In a way, you can take that as a guidance for our own growth plans for both domestic crop protection as well as domestic crop nutrition. Okay. Okay. Thank you. Secondly, and we have been looking to expand our export business from 35% currently to maybe 40% in next few years. Given the current situation in the Europe side, any revision there will be possible or we are looking at the seed number? I think it may be too early for us to be revising our stance on this, Rohit, because this is all linked with what we are referring to internally as our long-term strategic plan, which includes the capital investment program for building capacities. Largely from our existing product category, we have done debottlenecking to increase capacities, and we will invest further for the products that we believe we still have some headroom for growth. As far as the expansion of our exports portfolio is concerned, there we've got what we call the catalog products which is the Clethodim, Hexa, and that category for which we are adding new off-patent molecules into our portfolio. We had called out that Difenoconazole is the next product that we will be adding to our catalog of export products. Likewise, on the contract manufacturing, while we have signed up, I would say now three contracts for the contract manufacturing business. We have a number of projects which are currently at various stages of lab as well as kilo and the pilot stage as well. These will also in due course of time convert into firm contracts, priced contracts. This is playing out, I would say reasonably well, and we will build additional capacities in due course of time. Our first milestone is to get the multi-purpose plant commissioned and its capacity utilization fully in place. Thank you. We have our next question on the line of Rohan Gupta from Nuvama. Please go ahead. Hi, sir. Good afternoon, and thanks for the opportunity. Sir, first question is on our domestic business growth, which is roughly 7% for the quarter. Would it be possible for you to give some breakup on the volume and price led growth, sir? I think Subhra had called it out, Rohan. You can just again repeat it, yeah. Rohan, our volume was flat. As I told also that the last part of the growth is price driven. Okay. similarly in international business, this is 7% downfall. This is also, led by the price drop? No, no. This is more volume driven. The de-growth is more volume driven. There's still some residual pricing, but it's largely volume driven de-growth. Any particular reason for the international market being weak in the current quarter, while on YTD level we have still done pretty decent? Is there any one-off which has been impacted, which has impacted the international demand volume? Rohan, perhaps, you joined the call a little late. I think we had answered this question. I think even in Q2 when we had our quarterly results call, we had mentioned that we are seeing some pressure on uptake of our category of products, especially the Hexaconazole and Clethodim. We had actually expected slightly slower growth in the H2, which we had called out. I would say that this is in a way playing out. We, as I mentioned that Q1 we expect our volume growth to be back on track. Okay. Sir, pardon me, sir, because I joined the call late, so I would have missed out on those numbers. Sir, just the last thing from my side is on our long-term strategy, which you were just talking about. There you see that the CapEx led growth and the company will continue to focus on CapEx and basically building the capacities in intermediates. Sir, there I think and we are still lacking in terms of the growth visibility on the products and the product pipeline, and also in the CRAMS business that any new customer additions or new product development. Sir, though we are talking about that we in the long-term strategy we will invest in that business, is there any product development and the customer confidence you are gaining? How much investment do you see that over next two to three years we can invest, we can make in this in this CRAMS or building up intermediate business for exports? You know, I did mention that one is that we've already got three small contracts signed up. The other is a number of our opportunities are at various stages of development, either at the lab or the kilo scale or at the pilot scale. That is the next level of opportunities which will get converted into agreements and contracts. The next level is number of visits by both Japanese as well as Europe-based companies to our facility has happened, where we are positioning ourself as a partner of choice for both intermediates as well as the AIs. We do expect this contracts list to start growing as we move forward. As of now, we've got three contracts that have been signed up. We expect to progress along that over the next couple of months. As far as the new product introduction, what we are calling our catalog products is concerned, Difenoconazole, we will be commercializing as the first product from the multi-purpose plant, we've also called out that every year we expect to add at least one new active ingredient into our catalog product. Hope that answers your question, Rohan. Thank you. We have our next question from the line of Jasmeen Kaur from Fortuna Investment Advisors. Please go ahead. Hi. Thanks for the opportunity. Am I audible? Yeah. Yeah. Go ahead. Yes. Yeah. Yeah. Okay. My question is on the receivables, which had increased substantially. Is there any relief on that front, and what is the situation now? Also I wanted to know that, you know, why exactly the receivables position had increased so much. Is it more on the domestic side or also on the international side that we are seeing this increase? Yeah. Receivables we had commented in Q2, there were two parts to it. I'll dissect domestic and international first. Since the international business was growing and the typically credit period there is longer, that had caused one impact. Secondly, we had also mentioned about the fact that we had stopped discounting for one of our key customers, which is where the international receivables had gone up. Nevertheless, all I must say that there is not no overdue in any of our international customers. Moving to domestic parties, yes, there was a collection which had got stuck up because of kharif and seasonal unseasonal rainfall. We have now working towards how do we mop up this collection, and we've seen good progress last month. We hope to get more normalcy around this in Q4. Okay. That's why I said focus area for us. Okay. Q3 would have been lower than, compared to Q2? Not in receivables perspective because our international customers, there were some payments which had not come in by December. Yes, Q4, January onwards, we have started seeing a trend reversal. Okay. Okay. The second question was, Can I ask one more question? Yeah, go ahead. We'll take that as the last question. Okay. It's a small question, but on the contract manufacturing, I understand, you know, the existing contracts that you have, and they will achieve a meaningful scale in 2-3 years because registrations are pending. On this PEKK revival, because that's a revival, is there any meaningful impact we will see on the numbers on account of PEKK in the coming quarters? PEKK, I had mentioned that some business we are expecting to do during Q4 itself. This is extremely encouraging because you'll be aware that for the last two years the plant has remained idle. The plant has been restarted, and we are going to be exporting some of the PEKK. That is the order that we have received. This is a positive sign. In fact, since this goes largely into the airline industry, we are seeing a revival of the airline industry itself. I believe that maybe in the next six to nine months, the plant should also be back to a good capacity utilization. We are still awaiting the next year's plan from our customer. Thank you. I would now like to hand over the conference over to management team for closing comments. Over to you, sir. Thanks. Thank you, and thanks everyone for the questions, and I hope that we've been able to provide necessary clarity on the results. Q4 is a smaller quarter, and our larger focus will be on planning for the next upcoming kharif season. We expect international business to start picking momentum from Q1, as I had mentioned. We will continue to pursue all efforts to drive maximum utilization of our plants and get volume-led growth with price growth coming under pressure. As far as seeds business is concerned, we are focused on developing a clear roadmap for the seeds business, and we'll also conclude the review of inventory and any impairments that may need to be taken so that the business is back to normal, back to usual from the upcoming kharif. Our long-term strategy for driving competitive growth remains on track, and we'll keep reviewing all opportunities as relevant. With that, I'll hand it back to the moderator till we meet three months from now. Thank you very much. Thank you, sir. On behalf of Rallis India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.