Ladies and gentlemen, good day, and welcome to the Rallis India Q1 FY 2024 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 conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Desa from CDR India. Thank you, and over to you, sir. Thank you. Good day, everyone, thank you for joining us on Rallis India's Q1 FY 2024 earnings call. We have with us today Mr. Sanjiv Lal, Managing Director and CEO, and Ms. Subhra Gourisaria, Chief Financial Officer. Before we begin, I would like to mention that some 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 open proceedings of the call. Over to you, Mr. Sanjiv. Thanks, Gavin, good morning, everyone. As mentioned, Subhra Gourisaria, our CFO, is also joining me on this call this morning. I will begin the discussion by providing a brief overview of the industry, post which I will comment on Ralli's specific developments. The agrochemical sector has encountered a rather challenging external environment. Delayed progress of monsoons uneven rainfall distribution has impacted sowing patterns in the domestic market. High channel inventory and unprecedented price drop for a few active ingredients due to an oversupply from China has created near-term volatility. We have also witnessed distress selling by some of the parties, resulting in very low price levels. As far as monsoons are concerned, we experienced a delayed start to the season due to cyclone Biparjoy, resulting in a rainfall deficit during the H1 of June. There was an improvement in the H2 of June, leading to a reduced deficit. Except for Northwest India, other regions received below average rainfall compared to the long-term average. The monsoons have picked up, with cumulative rainfall being 2% above normal till July 12th. For the period up to July 12th, out of the 36 sub-regions, 15 have received deficit rainfall, 10 have received normal rainfall, and 11 have received excess rainfall. We have seen monsoon picking up pace and are hopeful of a good rainfall for the remainder of the season, El Niño notwithstanding. The delayed onset of the monsoon had an impact on crop acreage, with paddy and cotton being most affected. As per the Ministry of Agriculture and news reports, the overall kharif sowing is showing 4.29% lower than previous year same time. Paddy cultivation, which constitutes a sizable part of the kharif crop cultivation, decreased by around 9.8%, and cotton has decreased by about 5% compared to the previous year. On the other hand, the acreage for other major crops, such as coarse cereals and sugarcane, increased by 15.9% and 4.7%, respectively, compared to the previous year. With the improvement in rainfall across regions, we can expect an increase in sowing activity and hope things will reach normal levels by the season end. In terms of international business, there were challenges due to excess inventory buildup and pricing pressures on major generic active ingredients, which has affected business sentiments. Moving on to Rallis' specific developments, starting with our headline numbers. Revenue de-grew by 9% over previous year. Crop Care business de-grew by 13%, and Seed business registered a 2% de-growth over the previous year. EBITDA for the quarter stood at INR 109 crores, as against INR 113 crores last year. EBITDA margins came in at 14%, higher than the 13% of the previous year. There were concerted efforts to improve margin through timely pricing actions, better product mix, and control on fixed costs. Our actions of timely liquidation of high-cost inventory in the past have also helped us during these turbulent times. Profit for the quarter stood at INR 63 crores, as against a profit of INR 67 crores reported during the corresponding period last year. Moving on to the individual businesses, as mentioned earlier, domestic business was impacted by the delayed onset of monsoon. This impacted the sowing activities, coupled with excess channel inventory, which we have been indicating in our earlier calls as well, which has restricted the volume growth during the quarter. Channel inventory continues to be on the higher side, primarily due to higher carryover inventories from the previous year, led by low pest infestation in the rainy season. Due to the expectations of drop in prices, the trade is expected to be cautious and are more likely to decide on their purchases closer to consumption. Q1 is largely a placement season, and clearer liquidation trends will become evident during Q2. Besides, new product launches, we have also been working towards expanding our distribution network and continue to work with e-com channels as well. Our distribution network for domestic crop care business stood at 4,700, with our retail footprint increasing to about 61,000 as of end June. Moving on to international business, as mentioned earlier, excess channel inventory, coupled with sharp price erosion across major generic active ingredients, has impacted the overall growth sentiment during the quarter. Prices of certain key products, like acetamiprid and hexaconazole, continue to trend lower.... Prices for pendimethalin has been somewhat stable. Overall, volumes during the quarter have been significantly lower compared to the previous year, and we continue to remain positive on pendimethalin, for which we have secured technical equivalence in EU. Also, for pendimethalin, as indicated in our earlier calls, raw material supplies for the product have been secured, and the outlook remains positive, due to our new access to the EU market. Moving on to contract manufacturing, the business remains steady with the revival of BKK after a gap of nearly two years. Our teams continue to engage with overseas partners for further expanding contract manufacturing partnerships. As mentioned in the earlier calls, we have signed three new contract manufacturing opportunities. We have commenced the dispatch of one intermediate during the last quarter. At Dahej SEZ, our MPP has been put to use in terms of trial production, which has started. We have expanded the capacity for one of our key hybrid formulations, both for domestic and export markets. On the digitization front, we have strengthened our planning process by deployment of SAP Integrated Business Planning solution. We expect this to enable more agile and precise decision making, while also digitizing many of our processes. Moving on to seeds business, we had a good start, with revenue marginally lower over the previous year. Our placement efforts were quite satisfactory, with support from all teams. We also had a good marketing engagement for most of our regions. In terms of the new hybrids, we are pleased with the performance of Bigus, our north cotton hybrid, which has seen a good volume growth. In terms of absolute numbers, this season we sold four lakh packets as against 1.5 lakh packets during Q1 FY 2023. As far as other crops are concerned, we are waiting to see clear trends in liquidation, with rains picking up only now. Our distribution network for seeds business stood at 2,750, and retail footprint increasing to 47,000 retailers as of end June. To conclude, while the year has started on a challenging note, we are hopeful that the situation will ease in the H2 of the fiscal. Our efforts are directed towards strengthening our product portfolio across businesses, our domestic formulation business, our seeds business, and international business as well. We are also working towards widening our distribution reach. With these opening remarks, I will now hand over to Subhra for a detailed analysis of the financials. Over to you, Subhra. Thank you, Sanjiv. Good morning, everyone. Thank you today for joining us for our Q1 earnings call. Let me 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 revenue for the quarter was INR 782 crores, as against INR 863 crores during the previous quarter same period. The degrowth in the revenue was primarily on account of volumes and sharp drop in prices, as mentioned by Sanjiv. Performance of both domestic and international business was somewhat benign. Seeds business was broadly flat, with revenue INR 262 crores during the quarter. EBITDA for the quarter stood at INR 109 crores, as against INR 113 crores during corresponding period last year. While the absolute EBITDA is lower, however, the EBITDA margin stood at 14%, vis-a-vis 13% in Q1 FY 2023. Our teams have displayed agility in navigating through these turbulent times by ensuring market-linked pricing and superior product mix. Profit for the quarter stood at INR 63 crores, as against INR 67 crores for the corresponding quarter in previous year. PAT for the quarter at 8.1%, vis-a-vis 7.8% in Q1 FY 2023. Moving on to business-wide performance, delayed monsoons, coupled with high channel inventory, impacted volumes and realization during the quarter. We had also indicated in our previous calls that the channel inventory has been higher, and the sales growth will be impacted in the near term owing to the same. The trade is in a wait and watch mode, and are likely to form out their decision closer to the consumption period. We are committed towards improving our product mix by launching towards new and innovative products. These new products are targeted towards not only strengthening our existing position, but also helping us plug the crop and regional gaps in our portfolio. Moving on to international business, we remain cautious. Prices of input materials have been very volatile, with some of the raw materials witnessing drop of more than 50% since their peak 2 years back. As you can expect, in this situation, it is exceedingly difficult to predetermine the right purchase price. We are working on shorter purchase and pricing cycles, and are taking portfolio ports to liquidate inventory, even at lower margins, wherever necessary. Globally, some of the players in the industry have been holding very high inventory and delaying purchases till they're able to liquidate the old stocks. Moving on to seeds, early trends are positive, especially the liquidation of north cotton. We'll get clear read on the balance crops only by the end of current season. Our cash flows are improved, with specific focus on inventory reduction and collections in the domestic and international markets. During the quarter, we also repaid INR 25 crores for working capital loan, where we understand our spend for CapEx would be in the region of INR 150 crores for the year. To conclude, we are hopeful that our efforts towards improving product mix and distribution network, coupled with efforts towards lowering our dependency on China for raw materials, will contribute meaningfully in the coming years....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 press star and 1 on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to 1 to 2 per participant. Should you have a follow-up question, we would request you to rejoin the queue. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Prashant Biyani from Elara Securities. Please go ahead. Thanks for the opportunity. Sir, 2% increase in Crop Care EBITDA in this sort of a subdued environment is quite commendable. What were the drivers in that, if you can just highlight, you know, for the start? Prashant, you know, the prices have been quite volatile, as you would have also got from your own network. What we've been trying to do is taking more frequent pricing calls downwards when necessary, upwards when necessary, and also ensuring that we are not pushing too much into the trade because the trade is already overloaded. Not with our product, but I'm saying generally, the trade is overloaded. We've also been taking these pricing calls and also been looking at our portfolio in terms of the more relevant products for the current period of time. That is the portfolio choices that we are making for pushing appropriately. largely, these are the actions, and we had already started the work on our network expansion, two quarters back, and we had spoken about it, and that is also helping and sort of increasing our reach and width of our network. Secondly, sir, post Q1, in the first 17 days of Q2, how has been the demand from the trade as well as the actual liquidation at the farmers end? See, actually, what is happening is that the northwest of the country, where the sowing initially starts, as you're aware, that is having excessive rainfall, right? The consumption of many of these chemicals is still going to have to wait. I think consumption may take some time for picking up, but since the overall acreages have now increased and come to more than 5% of the same period last year, I think the overall sentiment seems to be in the right direction. That gives us some optimism. Thank you. Our next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, good morning. Three questions from my side, mainly on the Bigus seeds. What are the attributes of, the seed which are driving offtake? Well, I think, what is driving offtake is that this is a slightly early variety, and it has shown a very good yield. This is what is finding favor with the farmers. Last year also, we had a very positive response, although the volumes which we sold were limited by what we had, which was about 1.5, 1.7 lakh packets. We had scaled up to about 4 lakh packets, which practically we believe have all got sold out. This is come out as a good product, and the farmers are appreciating the performance over the last two years, which is helping us scale it up, Tarang. Okay. I mean, how do you see it for next year? Well, we believe that this particular product is going to grow even further. We are hopeful of being able to get enough acreages for planting for the next season. That will be work currently underway for securing acreages for expanding the availability for next year. Okay. How is it priced? I mean, is it priced at par, slightly at a premium? No, no, this, we are not doing any value extraction to a premium. It's sort of priced at a similar level to what our products have been. Thank you. Our next question is from the line of Rahul Veera from Abakkus. Please go ahead. Hi, sir. Just want to understand our new launches, Gateway and Gateway GR. Are we making the technical by ourselves, or are we procuring it from outside? No, no, this is currently, insourced. We are going to be making the technical, but that is some time away. Okay, okay. Is it a domestic manufacturer? Yes, yes, it's a domestic supplier. Okay, okay. Coming back to the seeds portfolio, are you seeing a reduction of spurious seeds in the cotton, where we are able to gain more market share? At the industry level data, we are showing that the sowing is down by 12%. versus our product has done extremely well, is it also because of the spurious seeds going down? What is the industry or channel saying, sir? Rahul, I'm not very clear as to what is the level of the illegal cotton that has been sown this year, that we will know only more towards the end of this Q2. Certainly, I think there has been a mixed experience of the farmers. This is from what our understanding is, that they have really not benefited from the illegal cotton that has been used by them. All said and done, having seeds from a known company is giving a lot of assurance. That has been our experience, where our products, at least in the north market, has moved well. Even Maharashtra is an important market for us. We believe that one of our very good hybrids, which unfortunately did not do very well in the last two years, has also done, I would say reasonably well, although we will know the final figures after the liquidation only towards the end of Q2. Thank you. Our next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, good morning. Thank you. Is it possible to share the breakdown between price and volume between both the domestic crop care and the export for the quarter, please? Shival, would you like to just help me with some numbers? Yes. Abhijit, domestic crop care business volumes were largely flattish. Price was the one which had led to this degrowth. As far as international crop care business is concerned, the last part of the degrowth was led out of volume. At a level of, with the mix of the portfolio, we were able to manage at an overall level, the price. Last part of the degrowth was coming out of volume. Okay. The extent of price decline, possible to share a rough range there for the export side? It will be sub-10%, Abhijit. Okay, got it. Also just on the pricing actions now, you know, were there further price reductions taken during the quarter? Should we expect any lagged impact of that for the upcoming September quarter as well? There will be definitely carry forward, because some of the price changes, as you know, Abhijit, the prices or the material cost has been on a downward trajectory, and that's where, we will have a carry forward impact further into this. Thank you. Our next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity. First question is from the demand from global markets. On the exports front, are there particular geographies where the inventories are higher and other geographies where it is normal? Any sense on this? Thank you. Rohit, in terms of our portfolio, pendimethalin is one of our important herbicide items, and the demand for that, we have seen largely stable, although there has been some price correction. On the insecticides, which, where acephate is one of our big insecticides that we export to, largely into Brazil, there we find that the price erosion has been very, very significant. As well as the inventory of herbicide, our understanding is also on the higher side, although metribuzin is a smaller volume for us in that market, presently. All right, got it, sir. Second question is in terms of the increase of Chinese generics the domestic market. What is your sense, how this is affecting the domestic market? Will it have a significant impact during the current season? Because there's just a placement quarter, second quarter we'll see the actual impact in terms of any returns. Thank you. Yeah, Rohit, you know, we have a number of multinationals and Indian companies in the domestic formulation business. It's basically, the competition is in this set only. Many of these Chinese generics are being secured for formulation by the Indian companies, as well as some of these multinationals. Nothing has changed as far as that is concerned. The issue is the prices are coming down, and there is already overload of inventory in the market. If the consumption picks up as the season progresses, then I think the industry will also have a positive outcome. Thank you, sir. Our next question is from the line of Viraj Kacharia from Securities Investment Manager. Please go ahead. Yeah, hi. Thanks for the opportunity. Am I audible? Yes, sir. Please go ahead. Yeah. First question is on the inventory part. you know, again, this probably gives some perspective both in India and in international markets. What is the extent of inventory in the system? you know, if an annual consumption is 100, then are we at 30 or 60? any perspective you can give both for the market or, you know, key regions, India and abroad, and for us. Viraj, I know for some, as I already have mentioned in my earlier comment, that for the products that we are dealing in, we are finding that pendimethalin, the demand is stable. We've also expanded our technical equivalence in EU, so that is also helping in us being able to maintain the volumes as far as pendimethalin is concerned. We do have issues with the paclitaxel, more so on the pricing. Hexaconazole, which is another big molecule of ours, which we are selling into Southeast Asia, we have seen some revival in terms of consumption, uptake in particular. Largely it and methidiazol is, I would say, more or less flat, with maybe some slight uptick in terms of volume that we're expecting going forward. Okay, so basically, what I was trying to understand is, you know, so Q1, if we see our, especially the domestic business, you know, so the factors which you outlined in product mix are more dynamic pricing and, but product mix also doesn't change in a quarter. I mean, I understand you've been trying to launch new products and trying to scale them up. There's also a factor of the other key product prices, mix change and be on a downward trajectory. In terms of Q1 performance, is there something? I mean, was there any one-offs in this, or how should one really understand, you know, the performance in domestic business, which helped us go to the sales and what can happen? Viraj, I don't think we've had any one-offs. No. There are no one-offs. I would just say that we tried to be very prudent in terms of how we are doing our pricing. Also on the procurement side, we've been reducing the quantities that we've been buying at any particular point in time, so that it has limited impact on the in case the prices come down further. We've been trying to navigate through this in a manner which I would say has been helpful. What has also been mentioned is that last quarter, we were sitting on higher cost inventory, which we had liquidated even at very, very nominal margins. That has also helped. Thank you. Our next question is from the line of Arjun Khanna from Kotak Mutual Funds. Please go ahead. Sir, thank you for taking my question. Just on the exports front, we talked of in the previous quarter, the export of PEKK, the molecule, coming back for the aerospace. Has that come through, or, do we expect it to take further time? No, no, I had also mentioned that, we will be exporting some of the PEKK during the current financial year, from practically 0 in the last 2 years. Right. We will be doing some volume this year. Our understanding with our customer is that this volume is expected to steadily pick up over the next couple of years, back to where it was before this pandemic started. It is, I think, in the right direction now. Did we see any revenues in the first quarter? No, no, we saw revenues in first quarter. In fact, we commenced this quarter from Q4. Sure. Sure. No, because we've yet de-grown 30% sales this quarter, obviously, the scale is smaller. Sure. Yeah. Sure. Yeah. Sure. The second is in terms of the MPP that's come through. In terms of the products you're going to fill it in, do we have a sense of roadmap of when we could reach peak sales and which products we are going to fill in? This year, we've already commenced with difenoconazole. Trial production is currently going on. All going well, we will be doing one contract manufacturing molecule towards end of Q3 in the same plant. Again, there is another intermediate that we are going to do in that plant. That may also happen towards Q3. Q2 will largely be difenoconazole in the Multi-Purpose Plant. Thank you. Our next question is from the line of Rohan Gupta from Nuvama. Please go ahead. Yeah, hi, sir, good morning and thanks for the opportunity. A couple of questions. One is on this, sharp fall in prices and, especially our supplies, which are coming majorly from China, where we are seeing a sharp price reduction. Are we seeing that, definitely the, when the high-cost inventory is over, we see that the benefit of, low availability, I mean, this, low cost from Chinese material will help us in margin expansion? Do you see that it will, everything will be passed on in the current competitive environment and no opportunity for the margin gain? Rohan, you know, the prices have been coming down quite sharply, and practically, there's been new pricing which is being offered on a day-to-day basis, right? The issue is that even the customer is seeing this declining price trend, and for our products also, they are demanding lower pricing. In a declining market, it becomes very difficult to sort of get any kind of upside, if that's what you are alluding to, Rohan. You know, our view is that in this kind of uncertain market, it may be better to take shorter procurement calls rather than taking a position, and then you find that the prices fallen even further. My question was more basically, we at least procure close to 45%-50% of our raw material requirements from the China market. Exactly. Which is pretty high compared to other players. When the Chinese prices have corrected so much, I was just expecting that, are we in a position to gain some benefit in terms of the low pricing environment? Because we are still dependent on China market. Also, another question is that we have better integrated in intermediates of Pendi and Metri. In the current environment, do we see that the Chinese raw material availability is a much attractive price than manufacturing by ourself? In terms of if we have to keep running our plant, we may lose in terms of the pricing advantage, which otherwise would have been offered from China. Rohan, this is again that question of make versus buy. If there's a better pricing that we are getting from imports, we will certainly look at that. Wherever we've got commitments, because we have developed a domestic manufacturer, we will stick to our commitment only. That is very clear. There could be some lower pricing that may be happening out of China, but we have certain tie-ups and commitments with some of our partners, and we are also discussing with them about the correct level of pricing for the intermediates that we have shifted from import to domestic. Also, the first question, I think the prices will ultimately reach to a level of equilibrium. I don't think that anybody having a invest to a major source will help, over a period of time. It will be market-determined pricing. Thank you. Before we take the next question, a reminder to all participants that you may press star and one to ask a question. Our next question is from the line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question on the overall revenue growth, both in the domestic as well as international market. You know, given the on-ground scenario in terms of elevated inventory, what are our thoughts both on domestic and international, considering that there are certain product launches that you have done already and probably are planning going ahead also? Okay, sir, I understand your question. It is on revenue growth. Yeah, more focusing on the volume part here. Yes. Revenue is a pricing function there, so. Yeah. You know, in terms of revenue growth, pricing growth, I think, is unlikely to happen in the near term because currently where the prices are, the main thing is volume recovery, right? That is going to be a key driver for overall growth. For the international market, we are a little cautious because the inventories are on the higher side, which is really putting a huge amount of pressure on all pricing. As far as domestic is concerned, we expect that as the season is progressing, the consumption of these chemicals will start happening, these products will start happening, which will help in bringing back the volume growth. We are really looking for volume growth with new products being introduced as well. Sure. The contribution from the new products, especially in the domestic market, will still be hovering around 10%-12%, or it will be improving? We've been tracking what we call as the innovation turnover index. Last year it was at around 13. As mentioned in earlier calls, that if we are able to get to about ITI of about 15, we will be in a good position. We are still very much focused on getting our new products to be scaled up. In that context, not only in the crop protection business, we launched some new products this season. Also, in the crop nutrition category, we've launched, as well as in the seeds category, we've also launched. We are looking across our portfolio to be able to bring in new products for driving the innovation turnover index. Thank you. Our next question is from the line of Chintan Modi from Haitong Securities India Private Limited. Please go ahead. Yes, sir. Thank you. The degrowth that we have seen in the international market, do you think this is more or less in line with the market trends, or do you think that Chinese companies have got very aggressive in gaining market share there? Well, see, Chintan, I don't have a very clear answer. I guess that will emerge as the time progresses, exactly who is winning and who is losing. You know, I'm sure you also come across these various news reports of very serious inventory and pricing, even with the multinationals, which is likely to impact their overall revenues and growth during the current calendar year. Sure. Second is with respect to the MPP. When should we expect this to be like, you know, full utilization levels? This year we are outlooking, maybe we'll get to about 60% capacity utilization. Next year, it should be much better. This is the first year that we are going to be using it, so we have to bring in the new products. I've mentioned that one we've already started, and one more intermediate and a molecule we will be producing towards Q3. Thank you. Our next question is from the line of Archit from B&K Securities. Please go ahead. Hi, sir. Thanks for the opportunity. Just one question. Sir, can you give us some general sense of what the situation in China, and when do you see this entire inventory problem subsiding? Any thoughts on the situation? Well, Archit, I can only sort of go with what I have heard and also some of the inputs that we have received following the CAC, which was, I think, very well attended by many global companies as well. The sense is that the Chinese industry is also trying to get back to a growth path, which I think is perhaps putting a lot of pressure on availability out of China. With the inventories being where they are globally, that is sort of pushing prices downwards. I guess there will be some amount of stability which will come once the inventory of many of these input materials in China also starts building up. Unless there is consumption of these intermediates, they will also have to curtail their production. If they all continue to produce the way they are, then there is going to be a serious issue on even inventory of some of these materials in China. Our sense is that there could be some price stability that may start emerging in the next month or two. We've already seen it in some of the products which seem to have now touched the bottom, because some of the offers that are coming are at a slightly elevated price. There seems to be some stability that is now coming in, at least for some of the intermediates. Sure, sir. Actually, there were a few companies, obviously, global companies, some of them saying that, you know, the inventory situation can alleviate a bit, probably in the H1 of this calendar year. There are some companies who are calling out for a complete washout for this entire calendar year or probably financial year. I know that this will go, you know, it will be product specific, and it might differ from one product to another. For our company, specifically, whatever we are exporting in the international markets, for that, do you see, as you mentioned earlier, would that, you know, in some situations, like acephate maybe, the bottom has already reached. Would that be like, a safer assumption, going forward, and that there may not be any more deterioration in terms of prices? Archit, as far as, you know, the season in Brazil is concerned, it is going to be picking up now in Q2. If that season goes well, then there could be a huge demand coming back. As far as our portfolio is concerned, I would say that we are need to be a little watchful, largely for acetate. The others, I think we will be able to manage. Acetate, the price erosion has been fairly sharp, and we are a little cautious on that particular product. Others, I think, we should be able to navigate. Thank you. Our next question is from the line of Jyoti Singh from Arihant Capital Markets Limited. Please go ahead. Hi, thank you for taking my question. This is Abhishek here, sir. Sir, two questions. What will be the incremental revenue come from the CapEx completed in Dahej? If you can throw some light on the same. Second question on the CapEx apart from Dahej CapEx, what is the additional CapEx timeline for next two years? If you can give it, this is more of an accounting question. Thank you, sir. Abhishek, the revenue from our new NPP, there is nothing in Q1 in terms of revenue from the new product, because we started the trial production in the month of June. There is no revenue, but it will start accruing from Q2 onwards. As far as capital is concerned, we expect to be incurring a CapEx of about INR 150 odd crores during FY 2024. We will be spending some part of that on our new R&D facility as well, and also for perhaps some debottlenecking that we would like to do for one or two of our products, where we see some good opportunity. Largely, that's it, Abhishek. Sir, going forward, any numbers, like what kind of revenue, like, asset turnover you'll be looking out for in the next three years? Abhishek, you know, typically, as we mentioned in the earlier calls also, we look at our investment decisions slightly on the longer term, using the internal rate of return, for the investments that we make. The asset terms and all, we have to see in a slightly longer period of time. Shubha, unless you'd like to add something? No, no. See, this is a multipurpose plant, and it's for seeding new opportunities. It will take some time as we try to reach the full capacity utilization. I think it will be early for us to talk about asset terms on this plant now. Thank you. Our next question is from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. Good morning. Thank you very much. In terms of the gross margin expansion in the first quarter. Can you explain how you have been able to achieve that? Is it because of the decline in the international business, that you may possibly be enjoying lower margins, or what is the reason for this? One factor you said is, of course, the mix, which is domestic versus international. More importantly, it is within the products that we sold within the international business and the domestic business. That has helped in terms of margin expansion. Plus, as Sanjiv mentioned earlier, what we have been able to do is sell off our high-priced inventory. We do have a small proportion even now, but not a significant one, and that has helped in terms of not coming under pricing pressure in terms of being on a very low margin. We have indeed taken some pricing calls at a low margin, but at a portfolio level, we've been able to be at a similar margin level or slightly better. Right. As a follow-up, are we in a position to sustain the gross margin reported in the first quarter for the rest of the year, adjusted for seasonality, of course? On this base for next year, will you be able to, you know, maintain this sort of margin, assuming prices are stable, so that the volume growth can show earnings from a product trajectory perspective? See, you yourself have said that there are multiple factors which are going to depend on margin. More importantly, you should remember that Q1 is a seed business, where the margins are relatively better. Yeah. If domestic business does well, which makes better gross margin for us, the margin should continue to improve. It's too early or too premature to say, this is dependent on various factors. Just one last thought. If you're looking at the MPP and the new products, incrementally, you know, our understanding is a long-term decision, but incrementally, do we see, growth coming more from volume growth, or would you also be able to, you know, improve your margin profile? I think in the near term, it will be more of the volume growth, Ramesh, because the price volatility is such, I don't think we can get huge revenue growth coming from pricing, at least in the near term. Thank you. Our next question is on the line of Vishnu Kumar from Spark Capital. Please go ahead. Thanks, sir. Thanks, sir. Wanted to understand how the current demand trends, especially with the fact that we are facing excess rainfall in certain regions and very deficient rainfalls, at least in the southern, central. If you could just help us understand on this. Vishu, I think, we just have to wait for some time because the consumption really needs to start now. Q1 largely is placement for crop protection, and it is the main season for our seeds business, which, as we already said, has done off well in our context. The agrochemical consumption will just about now be getting started. Very in early trends that are picking up, sir, because at least in the southern markets, the rainfall deficiency seems to be much higher. That is true. Actually, if you see the offtake by trade, I think that is now picking up slightly because, in anticipation of, good planting, which is happening, the trade is also picking up material now. We expect things to become clear in about a week, 10 days' time. Got it, sir. Also, sir, you mentioned that the price, I mean, the price erosion is continuing. Is it more or less passed through at the retail level, or, you still expect that the retail pricing can come down a little bit further to accommodate for the price reduction that is happening currently? Sure. In terms of our inventory in the market, I think we are okay. There will be no further reduction that we will see, because we've sort of, as I mentioned, done very, very measured placement in the market, with the pricing that we believe is right. Thank you. A reminder to all participants, you may press star and one to ask a question. Our next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, thank you for your time again. Just a couple of questions on the technical business. This is more to do with, you know, trying to get a sense on acephate and pendimethalin, where you guys are big players. On the market, the global market, right, is the pricing impact on account of, you know, incumbent manufacturers liquidating the stock that was already lying in their factories? You know, maybe because of COVID, they were not able to supply. Or is it because of, you know, some sort of aggression on their part, wanting to garner higher market share, irrespective of whatever price it comes at? That's one. Number two, I mean, given your scale in manufacturing these technicals, right, you all are fairly well aware of the cost structures, and the current pricing and how they both, you know, interact. At current prices of acephate, pendimethalin, do you think these are sustainable prices for any player? In terms of pendimethalin, I think the pricing has been a little more stable. We don't see any major issue there. Yes, in terms of acephate, we are seeing a very sharp reduction in pricing. Just to give you a sense of some numbers, that DMPAT, which is one of the key starting materials for acephate, the price has come down by over 40% since its peak last year. Which has led to the price of the product itself declining very sharply. I would say that the price for acephate is largely being driven off the price of the starting material, which is sort of forcing the product to be sold at much lower pricing. Okay. Do you see this? I mean, whatever action that we are seeing, whether it's on the technical or the intermediate, that action is on account of the manufacturer trying to liquidate the stock that was already lying, or is it on account of, you know, some aggression of them wanting to, you know, come back on the horse and, you know, really gain market share, irrespective of whatever price they gain market share at? No, I think there is some additional capacity which is which has come up, and some of perhaps the newer players are trying to establish themselves with some of these intermediates, which is also adding to the lower pricing. Thank you. Our next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Thank you for the follow-up. Just one question. For the domestic crop protection business, possible to share the% of revenues from the top five products? Second, just on the new products, pura and Chlorantraniliprole, the two formulations that we are launching, if you could, you know, just help us understand your outlook for that market. I believe it's very large, but there's probably a lot of generic competition that's creeping in now. What sort of market share would you potentially aspire to get in that? Thank you so much. Well, you're absolutely right, Abhijit, that this Fludioxanil is a fairly large market as far as India is concerned, and more recently, we've seen number of products getting launched in this category. We are also going to be participating in this particular segment with this particular product. Initially, we will have, I guess, product introduction and we will maybe take a year to scale it up, as you rightly pointed out, that many competitors have now come out with similar products. As far as the top few products are concerned, perhaps that may be a little difficult to share with you. Yeah. Abhijit, I don't think at the quarter level, we can look at the revenues for the top products. it's not that any of our products is not overindexed in any specific product. we have our top 10, 12 products, which contribute some 40% for the revenue. it's a very diversified portfolio. Okay, got it. Thank you so much. All the best. Thank you. Our next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Yeah. good morning. I hope I'm audible. Yeah. Last year you took significant write-offs and provisions on seeds. I think there was something in the first quarter of last year as well. Would you know a reduction there or elimination altogether of that, have, you know, had a favorable impact on seeds business for the quarter and for the full year this year? Firstly, we didn't take any write-offs or any material write-offs in Q1. It was all in Q4. You would have seen the numbers, and we have not had any reversal of that in Q1. Nothing of one-off that Sanjay mentioned, which has helped us out. No write back. For the full year. So we- in coming to? Whether there'll be a write back or a further write-off, it will all depend on how kharif goes. All right. Thank you. That's all from me. Thank you. Our next question is from the line of Dheeresh Pathak from White Oak. Please go ahead. Yeah. Thank you. For the question. Of the export market, where everybody and you are experiencing higher invention- Mr. Dheeresh, may we request you to use the handset, as you're not audible, sir. I am using the handset. Am I better now? Yeah, we can hear you. Go ahead. Okay. Thank you. For the export markets, where, you know, the industry in general and we are also experiencing higher inventory in the channel. If you can give some better, you know, quantification, let's say, for, let's say, acephate in Brazil, which we have a larger market. If the baseline inventory, the channel for acephate in Brazilian market, we look at 100, where are we, where is the industry in aggregate at? Is it at 200? Is it at 150? You know, something like that would help me get a better sense of the magnitude and the severity of the channel. You know, everybody is saying there is too much channel inventory, but there is, you know, not enough understanding, at least on my side, you know, what is the extent of the problem? I think, Dheeresh, that issue is certainly there. I mean, it is all qualitative information. This quantitative information is not available. That's why I'm picking a particular product and particular market, because that you would know, right? Because you are so acephate in Brazilian market is an important product for you. You would, from your sales team, you would have some sense of, you know, what kind of channel invention there, right? We don't- As far as acephate is concerned, Dheeraj, the issue is not that we will not be able to sell our entire production volume during the year. The issue for us is largely the pricing, which is being forced downwards. Thank you. Due to time constraint, that was the last question of the question and answer session. I would now like to hand the conference over to the management for closing comments. Thank you, Nico. As you would appreciate, we are facing significant challenges in the near term due to sharp price reduction and global demand reduction due to inventory overhang, and we discussed quite a bit about that during the call today. We'll continue to monitor the volume led growth across our portfolio. Price led revenue growth may not, that's certainly going to be a challenge. Our focus will be on improving realization through better product mix and dynamic pricing actions. Our diverse portfolio with presence across domestic and international markets, crop nutrition and seeds business does offer the business enough stability to navigate through these challenging times. Absolute EBITDA and cash flow will also continue to be a key priority across our teams, and we will further focus on improving collections across geographies in Q2. Investments, which we've been doing over the last couple of years in R&D, product development, manufacturing, will certainly enable us to drive our growth agenda in a sustainable way. With that, thank you all for joining, and we will connect again three months from now with our Q2 outcomes. Thank you very much. Thank you. On behalf of Rallis India, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.