Ladies and gentlemen, good day, and welcome to Rallis India Limited's Q2 and H1 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, Mr. Desa. Thank you. Good day, everyone, and thank you for joining us on Rallis India Limited's Q2 and H1 FY 2024 earnings call. We have with us today Mr. Sanjiv Lal, Managing Director and CEO; Mr. S. Nagarajan, the Chief Operating Officer, and Ms. Subhra Gourisaria, the Chief Financial Officer. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and involve risks and uncertainties. A detailed statement in this regard is available in the result presentation sent to you earlier. I now invite Mr. Sanjiv Lal to open proceedings of the call. Over to you, Sanjiv. Thanks, Gavin, and good morning, everyone. I will begin the discussion by providing a brief overview of the industry, as I typically do, post which I will discuss some of the Rallis-specific developments. To begin with, industry had to navigate a challenging and volatile landscape, spanning both domestic and international markets. While erratic monsoon and El Niño conditions led to long, dry spells and spatial distribution-related issues, which in turn impacted the overall volume growth in the domestic market. Pricing pressures in international markets on account of excess supply and destocking had an adverse impact on the margins and profitability of the business. India's rainfall witnessed a 94% of its long period average, with deficit rainfall in South and Northeast regions over the long period average. Of the 36 subdivisions, 29 received normal to excess rainfall, while seven received deficit rainfall. However, although overall sowing was largely satisfactory, with higher acreages in paddy, maize, sugarcane, and coarse cereals, lower acreages were planted under cotton, pulses, and oilseeds. Erratic monsoon had an impact in terms of water availability in the crucial stage of the plant growth. Reservoir levels as of end September was 79% of capacity. This is 18% below previous year's level and 6% below the last 10 years' average. This could impact rabi sowing adversely. As far as international markets are concerned, channel inventory still continues to remain high across geographies, and the situation is slowly normalizing, aided by a stabilization and drop of generic molecule prices. Commentaries of some of the leading global agrochemical players indicate that they expect global crop protection market to decline by low double digits as against earlier guidance of low single digits on the back of significantly poor volume optics, coupled with price correction. Channel inventories are getting corrected very slowly. Moving on to Rallis-specific developments, we believe our quarterly performance is reflective of the challenging environment the industry. Hi, good morning. Sorry for that pause. There was a bit of an announcement happening in office. I just muted the system. Okay, so just to continue, on the Rallis-specific developments, the quarterly performance really reflects the challenge of the industry. Revenue decline is owing to the subdued performance of our international business. Domestic business performed better with decent growth of 5% compared to the corresponding quarter last year. Volume growth was marginally positive, and our cautious and calibrated approach to ensure high right level of placement reflected in improving collections. EBITDA for the quarter stood at INR 133 crore, higher by 13% compared to the corresponding period last year. Despite input and pricing-related challenges, we have been able to maintain our margin on account of a better product mix and better cost optimization and rationalization. PAT for the quarter stood at INR 82 crore as against INR 72 crore during the previous period. During the quarter, EBIT, EBITDA, and PAT margins improved to 16% and 10% respectively. In H1, for the current financial year, the company repaid INR 100 crore of working capital loans. With this, Rallis has become a zero-debt company, except for a small sales tax deferral loan. Moving on to the individual businesses, starting with domestic. As mentioned earlier, monsoon-related challenges, long dry spell, and overall spatial distribution of the rains this season has impacted the business growth momentum. Furthermore, the industry has witnessed pricing pressure as well, owing to pricing out of China and perhaps distressed selling by some players. Having said that, we have seen some stability in the prices towards the end of the quarter, especially for a few molecules. Regarding segment-wise demand, pre-emergent herbicides started well, however, it did decelerate later due to the dry spell. Post-emergent herbicides demand was impacted due to low rainfall. Given this background, our efforts have been directed on improving the product mix, widening distribution reach, and plugging portfolio gaps. With regard to product portfolio, we have launched one new nine chain insecticide, Benzilla. During the quarter, we launched an additional set of two co-marketing products and five nine four products as well. Besides new product launches, we have also been working towards expanding our distribution network and continuing to work with e-commerce channels. Our distribution network for domestic crop care business stood at around 4,900 distributors, and our retail footprint increased to about 61,800 as of end of September. We grew volumetrically in the insecticide category, although our fungicides category de-grew volumetrically over the last year, and herbicides remained flat for our portfolio. Moving on to the international business, as indicated in our previous calls, overall volume growth remains muted against high channel inventory. Pricing pressures continue for some of our key products, especially for Acephate and Hexaconazole. Metribuzin continues to face overall pressure. Amidst this challenge, challenging situation, as indicated by us in Q1 earnings call, we have adopted shorter buying and pricing cycles, and our efforts in the past of clearing out the inventory, even at lower margins, if necessary, has helped us avoid any significant markdown in inventory. Having said that, Pendimethalin prices though have remained stable with volume witnessing reasonable pickup, and we are evaluating continuous expansion of capacity on this product as well. Moving on to our contract manufacturing, the same continues to remain steady with revival of the PEKK. As mentioned previously, we have also signed three contracts and have started dispatch of one new intermediate during the previous quarter. One more CSM product is ready to be commercialized during Q3 from our Dahej multipurpose plant, and we are hopeful that with time we will be able to scale up the contract manufacturing business with progressive utilization of the new multipurpose plant. Moving on to the Seeds business. As mentioned in our earlier calls, we are satisfied with the performance of the business this Kharif season. Desh, our cotton hybrid, has sold well in the northern markets, and Aatish, our cotton hybrid for South and Central India, has also done well. Besides cotton, we are also making steady progress across other crops such as paddy, maize, and millet. In addition to the above, we are also increasing our market share in the North India market area. The Seeds business, as you are aware, has gone through a rough phase in the last couple of years, but we are hopeful of the trend improving over the coming years. Based on the strategic view of the operations, we have implemented steps that prioritize our resources and expenditures in development of the key geographies and crop segments, with a view to improve the unit economics and the business. Our distribution network for Seeds, it stood at 2,700 and 2,750 distributors and a retail footprint of around 47,000 as of end of the quarter. To conclude, we are positive about the growth potential of the business and are taking the requisite steps towards ensuring steady and consistent growth over the coming years. In the near term, our focus will be on ramping up the multipurpose plant. Our new technical difenoconazole has been commercialized, and also our new CSM product we expect to commercialize during the current quarter. Over the medium to long term, though our strategic initiatives, coupled with deep pipeline and steady ramp-up of the multipurpose plant, should help the company improve its overall growth. Our actions on the Seeds front should improve the economics of the business also. Meanwhile, our new product pipeline towards launching new technicals is also progressing well through lab scale, kg scale, and pilot scale stages, and are confident of progressively launching new products in due course. To conclude my opening remarks, I will now request Subhra for a detailed analysis of the financials. Over to you, Subhra. Thank you, Sanjiv. Good morning, everyone, and thank you for joining us today for our Q2 and H1 earnings call. Let me quickly walk you through our financial performance for the quarter, post which we can commence the Q&A session. Starting with the top line for the quarter, our revenue stood at INR 832 crore as against INR 951 crore for the previous year, lower by 12%. The degrowth was a function of uncertain weather, headwinds in the export market, and rising competitiveness prevailing in the market. In terms of business-wise contribution, while domestic business has performed relatively well, international business continues to remain under stress. The Seeds business contributed with a revenue growth of 237% during the quarter, mainly due to small base and lower sales return during the quarter.... EBITDA for the quarter stood at INR 133 crore, as against INR 118 crore during the corresponding period last year. Margins for the quarter stood at 16%, as against 10% during second quarter of FY 2023. Gross margin improved through superior mix, actions taken for improving cost efficiencies in the crop care and seeds business. Profit for the quarter stood at INR 82 crore, as against INR 72 crore during Q2 of FY 2023. Moving on to business-wise performance, delayed and erratic monsoons, coupled with pricing pressure, impacted overall revenue growth during the quarter of the domestic business. Pricing pressure, as we have been indicating in our earlier calls, tended to overall growth in the business despite steady volume growth. Amidst all the challenges, we remain focused towards improving our product mix and plugging the portfolio gaps by launching new products across segments and geographies. We have overall introduced 11 products during the first half of FY 2024. We'll continue our focus behind quality of sales, including conscious placement in line with the regulation and collection of overdues. Moving on to seeds, we had a first half which was very good, driven by the success of Diggaz. In addition to cotton, we are also making steady progress across other crops such as paddy, maize, millets, et cetera. As far as international business is concerned, we have been indicating the on-ground situation continues to remain challenging. We have been also seeing global players forecasting a tough period in the near term amidst high channel inventory and pricing volatility. Pricing products, pricing pressure for some of our key products, especially Acephate and Hexaconazole, continues during the quarter. Prices for metribuzin though remain steady, along with encouraging volumes. Channel inventory for metribuzin is high. We expect to face continued volume challenges on the export front. Our contract manufacturing business performed well during the quarter, and the outlook looks encouraging on a long-term basis. Our cash flows have improved with specific focus on inventory reduction and collections in the domestic and international market. During the quarter, we also repaid INR 75 crores of working capital loan. With this, Rallis became a zero-debt company, except for the sales tax deferral scheme loan of INR 2.66 crores. As far as CapEx is concerned, we envisage that the spending for the year will be in the region of INR 150 crores. To conclude, I'd like to iterate that our recent strategic initiatives, coupled with commissioning of the Dahej plant, should help us to deliver consistent growth over the coming years. That concludes the opening remarks. We can now commence the Q&A session. Thank you very much, ma'am. We will now begin the question and answer session. Anyone who wishes to ask questions 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 use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Ladies and gentlemen, please note, in order to ensure that the management will be able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. We'll take the first question from the line of Prashant Biyani from Elara Securities. Please go ahead. Yeah, thanks for the opportunity. Sir, can you elaborate more on your product mix? What kind of products are you pushing right now? And on the cost optimization measures, which you might have taken, both of which are driving margin expansion for the last two consecutive quarters, despite lower top-line growth for crop care. See, on the cost side, we have been a little prudent on the fixed cost side. So, that to some extent has helped. And, on the product mix side, we have had some new launches also, which have we tried to scale up, not to the extent that we would have really liked, but, there has been some good traction for some of the new products as well. And, certain products which are, you know, in terms of providing certain schemes to the trade, we have also done that for certain products to get the volumes. Nagarajan, would you like to add something more to this? Yeah, sure. If you were to look at the crop care business into the domestic business and the international business separately, in the domestic business, I would say that we have certainly had some good traction on the insecticides front. Like it was indicated in the opening remarks, we had a volumetric growth on the insecticides. We have had a benefit in terms of the overall margin consequent to that. Fungicides have been, which are usually lower in margin, fungicides have been flat. Fungicides, however, have had a volumetric deep growth. Yes, their margins are usually higher, but I think they were more than offset by the gains that we made on the insecticides front. When you come to the international business, we have had pressures, but I would say that the pressures this year, compared to what it was last year same quarter, have been less in terms of the margin front. Some of the costs have also abated. So I think we have benefited on that front. ... I would say at this level, this is probably what it is. But in terms of detailed products, I would imagine that's a little bit difficult to share because it has a competitive element in it. But I guess this gives you a broad idea. Right. So secondly, on the seeds business, what happened this quarter, if you can elaborate, because generally most of the seed sales and liquidation happens in Q1. And a related question to this is, typically, what is the sales return quantum in Q2 every year, and this year it has been how much? So the way we record our sales is largely based on the placement and assumption of sales returns for Q1. Mm. In Q2, once the sales return has already been accounted for, that's when we get the overall revenues from the business. So there had been a special effort which we had put in during the season, Q1 especially, in terms of ground-level activities, in terms of the demand generation activities as well, as well as engagement with the trade. And, as you are aware, that we've had some difficulty in the business over the last two years. So this year, we did make that extra special effort in terms of market-level activities, and that has helped. So we were able to demonstrate some of our product differentiation for the key hybrids, which has actually led to good liquidation at the market level, which resulted in lower sales return. And that, I think, is a benefit which has flown in into Q2 results. On a first half basis as well, we have been positive by 21%, so Q2 may not be the only number that you should look at. Thank you. We'll take the next question from the line of Tarang Agrawal from Old Bridge Asset Management. Please go ahead. Hi, good morning. Just a couple of questions. One, if you could give us a sense on what's the distribution overlap between your seeds and crop protection business? The distribution overlap was about 25%-30% in the sense that we have common distributors between the two businesses. So that's, that's the level of overlap. Okay. So the second question, if you could give us a split of your, you know, H1 seeds revenue between rice, maize, and cotton, and, what was it in the base period for us to understand really what has driven the growth? That's number one. And number two, my sense is in Q1, you anticipated that you'll be selling about 4 lakh packets of Diggaz. Has that played out, or you have, outperformed your expectations? Without giving you a crop-wise breakup, the big contributor to the growth has been the cotton crop. You are right, because we had mentioned it even in Q1, that we were outlooking a good level of sale, and we did end up in fact a little more than 4 lakh. We also had a good performance of Aatish Express. Actually, we rebranded our product Aatish as Aatish Express, which we have also liquidated significantly this year. So these are the two big drivers. The other crops have been, you can say that, let's say ±3% compared to the base year. Volumetrically, ±3%. Thank you, sir. We'll take the next question from the line of Viraj K from SiMPL. Please go ahead. Yeah, hi. Thanks for the opportunity. Am I audible? Yeah, perfectly. So, you know, on the CSM contract, one of the molecules where we've just started out, difenoconazole, you know, so the triazole, it's one of the major triazole. And, if you look at the growth in that particular molecule for last many years, you know, it's been a very flattish or a very low single digit kind of a molecule. So just three questions on this. You know, what is the thought process behind choosing this molecule? How do you see any perspective you can give in terms of the competitive landscape, say, in India or outside, who are the major players? And last is, you know, is this an exclusive contract? It's more like an in-licensing kind of a contract, or if you can just kind of elaborate more on the supply agreement. So with respect to, I think you're asking about Difenoconazole, right? As to- Yes. Yeah. So, the way we have identified the products that we would, you know, get into, is a combination of multiple things. One is, of course, the size of the market, like you talked about, the growth rates, the levels of margin potential, the similarity in terms of, chemistries that we have in other products. The ability for us to access the markets relatively quickly, because in certain products you need to really wait for a long period of time for, registrations to come through. So it's actually a multidimensional, set of, measures, and, Difenoconazole was one of the products that came through that, and that is the first one that we have now introduced, through our, MPP. We hope to sell it largely in the Southeast Asian and somewhat lightly regulated markets to begin with, and thereafter expand it in other parts of the world. In India, of course, as you know, it does have a market, and we have actually already got a couple of our products, formulated products, which are utilizing that active ingredient. We hope to scale that up in India also. ... Any color you can give on the competitive landscape for this particular molecule? Hello? Perhaps we can keep that for later date, so we can sort of give you a better answer for that. Yeah. Okay. Sure, I'll come back. Thank you. Thank you. We'll take the next question from the line of Archit Joshi from B&K Securities. Please go ahead. Hi, sir. Thanks a lot for the opportunity. So just continuing with the previous point, on the CSM business that we have, recently, kind of visited on. So you mentioned that, we are targeting the Southeast Asian geography. So is it that there are multiple customers? I'm just kind of curious to understand the nature of the supply contract. How do we look at the CSM business in general? Are the newer molecules also going to be in a similar way, wherein we are looking at multiple customers for for one molecules? If you can shed some light on that front. So maybe, maybe I should clarify. The response that I have provided with respect to Difenoconazole is not for the CSM product. This is for our own pipeline product, and that is how we chose it, and we will be selling it to multiple customers. As far as the CSM product is concerned, that is something which, beyond the products which we already started making, which are of course very small, we will be producing the first active ingredient in the quarter three, in this quarter, and that is not for Southeast Asian market. And that would be a single- That is for, that is for a specific customer. You are right. That is for a specific customer, and we are unable to reveal the name of that customer or the product at this time, but it is for a specific customer. Sure, sir. I have a second one. So you alluded earlier that some of the success that we got in the insecticide portfolio and maybe a few other products in the domestic landscape was a function of the placements that we did that were quite proactive in nature. So what was the thought process behind these placements? Do we have some data management or any kind of software that kind of predicts, you know, some insufficient supplies in certain catchments of a particular state, wherein we can place these products properly so that the liquidation is stronger than what is happening on the industry level? What exactly did we do for us to get the placements right in the domestic landscape, especially in this challenging high channel inventory sort of a situation? Yeah, you're absolutely right. I think, it was a very challenging period, because as you would recall, there was a kind of a start, stop, start kind of a rainfall pattern. And, at a fundamental level, I guess we had to take a position or a stance in terms of the level of aggression that we would have in terms of stocking up, which I think we decided to stock up on these specific products. The second point, what you're saying in terms of data availability, you are probably aware that we mentioned it probably earlier also. We are in the process of implementing what we call as Plan Guru, which is an SAP integrated business planning platform, SAP IBP, which seeks to get data from the field level and then feeds it back to our planning, and thereafter to our manufacturing teams, to be able to produce the product and then make it available for supply. I wish I could say that this is something which we had made use of last quarter. That is not the case. We are in the process of implementing. But I guess this would be clearly an important lever as we go forward, because we will be able to have much more ground level information, much more easily available and much more easily analyzable, I should say. Thank you. We'll take the next question from the line of Chintan Modi, from Haitong Securities India Private Limited. Please go ahead. Hi, sir. Thank you very much. The first question is with respect to gross margins. We have seen that first two quarters, we have done very well. But now currently looking at, you know, again, the- Sorry to interrupt, Mr. Modi, your audio is not clear, sir. May we request you to use your handset, please? Yeah. Is it good now? Yes, sir. Hello? It's better. Yes. Yeah. So, sir, my first question is with respect to gross margin. We have seen improvement in the first two quarters. Now, going ahead again, we are seeing that, you know, crude oil has started moving up, and this would have definitely impacted the base raw material prices. So do you think that spreads have largely settled, or, you think again, there is some kind of a form of a risk to the spreads? And, second question with respect to the same gross margins would be that, say, in next two to three years, should we expect the gross margin levels to come back to, like, 40%-43%, which we have done in the past also? See, on the, you know, one of the ways that we've been trying to manage the gross margin, and I alluded to it in my remarks also, is on the shorter purchase cycles, that, you know, in a market which is the direction is not very clear, sometimes it's declining, sometimes going up. We've been taking shorter purchase cycles, which has helped us in any kind of margin erosion that which could potentially happen. We've had that kind of situation, especially for some of the international markets, where we've had to even sell at wafer-thin margins. ... So we will continue to sort of keep a shorter purchase cycle till you know we can see some stability in the overall market. The risk of crude oil increase definitely is a risk that is important to keep in mind, because many of the solvents that we use are dependent on crude oil prices. The additional point I would also add is that we try and look at our business as an overall portfolio, comprising of the domestic business, international business, the CSM business, the crop nutrition business, and the seeds business. At a portfolio level, I guess the attempt would always be to kind of improve the margins by having the right mix between these different categories. Even within the categories, within the DF business, for example, as we call the domestic business, we do have the opportunity to sort of manage the portfolio between insecticides, fungicides, and herbicides. I guess these are the levers that we will be using to manage the mix to sort of do the best on the margins. Sure, sir. And sir, second question is with respect to your aspiration to grow international business to almost 40%, which implies that your international business has to grow at a much faster pace than the domestic business. Now, I want to understand this from a perspective of ROE, because we have seen a lot of volatility in the international business, and generally in generic molecules where we deal, this volatility is generally there over long term also. So, whether this will really help you in improving your ROE, taking this, you know, higher share of international business, or whether, you know, this will be more ROE dilutive? If you can explain some thoughts on that. No, I think the way we are looking at it is not that it will be ROCE dilutive. We do think that each of these what you characterize the international business and the domestic business has a certain combination of ROCE and growth rates. And I guess we would have to look at both of them together, and as you are aware, that the growth rates for the export business from India have been quite, quite good. I think the export business is now far higher, right? More than $5-$6 billion compared to the domestic business. So we therefore would tend to look at it as a combination of the growth rate as well as the ROCE. At the overall level, overall business level, between international and domestic, at an overall Rallis level, I should say, the aim is to obviously improve the ROCE, not to dilute it. And just to add that we have to look at this over a period of time, not in a one-year or two-year timeframe. And we have also said that, for our, what we call catalog products, which we are selling to multiple customers in different geographies, we will be introducing one new catalog product every year. So, over time, these will also scale, and that is the approach that we have taken. And we had also mentioned earlier that when we are looking at our investments, we are looking at the ten-year IRR for our decision-making process. Thank you, sir. The next question is from the line of Amar Maurya from Alf Accurate Advisors Private Limited. Please go ahead. Yeah. So thanks a lot for the opportunity, sir. Firstly, on the export business, if you can help us, like, you know, we were talking about high inventory costs, liquidity- I'm sorry to interrupt. Sir, your audio is too low. We don't understand what you're speaking right now. Can you please increase it a little bit? Hello, can you hear me now? Hello. Yes, sir, this is Maggie again. Yeah. Yeah. So, sir, firstly on the export business. Export, you know, we were talking about liquidation of high-cost inventory into the system, so that got liquidated. Secondly, what is the progress on the PKK front? And thirdly, like, you know, this Difenoconazole, which we are going to start from third quarter, what is the overall size of the opportunity, and are we going to supply the technical or formulation for this? These are three questions, sir. So in terms of the high-cost inventory, like it was mentioned in the opening remarks, I think we have been able to navigate through that without too much of negative impact in terms of markdowns. Most of our products are now down in terms of the high-cost inventory. There would be a few, which may be a small quantum, which may be residually present, but we are confident that we should be able to liquidate that either in the export market or in the domestic market under the branded formulations. As far as PKK is concerned, yes, we do believe that it will have a bright future. At this point in time, it is slowly recovering. We are finding some positive movement on it, and over a longer period of time, we do believe that it will come back to reasonable levels. Difenoconazole, like I mentioned earlier, it is largely targeted towards, at this point in time, towards the Southeast Asian and the lightly regulated markets and the Indian market. We are in the process of working through the registrations for some of the other markets, and I guess it will be possible for us to kind of lay out a better roadmap in terms of its scale potential once we are little bit more advanced in the registration process. Right now, these markets are comparatively smaller, and we are in the first year of production in the MPP. We do expect that this will scale up, maybe in couple of years. We will be, like, you know, supplying the formulation or technicals over here? Both. As far as the domestic market is concerned, we already have two products which were launched in this quarter, based on the technical that we produced. As far as the international market is concerned, we will supply technicals, and if possible, and wherever it is, you know, based on the registrations and all of that, we will be also aiming to supply formulation. Okay. Perfect, sir. Thank you, sir. I'll come back in queue. Thank you. The next question is from the line of Abhijit Akela from Kotak Securities. Please go ahead. Yeah, good morning, and thank you for taking my questions. So first question was on the other expenses line, which has declined year-over-year. And even on a sequential basis, it's hardly shown any growth despite the, you know, seasonal heaviness of this quarter. So just sort of wanted to seek your perspective on what sort of, you know, controls we've implemented here, and in what areas has expense cuts, if any, been implemented? So Abhijit, some of the expenses with certain other expenses are, for instance, freight and freight and distribution for our international products, which has seen a compression both in terms of volumes and also in terms of rates, because the container rates and the cost has come down. Secondly, the optimization effort we did in terms of various other co-expenses, be it in terms of bad debts, be it in terms of other expenses with traveling conveyance, where we have tried to optimize that in line with looking at the efficiencies which can be plugged in, has helped in reducing it. Plus, we've also introduced some controls within the expense modules and also that there's better visibility to the operating team in terms of what they can spend in a particular period of time. Understood. That's helpful. Thank you. And, the other question I had was just with regard to the export business. You spoke about, you know, continued high channel inventories and, you know, oversupply and pricing pressure across several molecules. But Pendimethalin, you mentioned that volumes are experiencing a pickup, and you're evaluating an expansion as well of capacity. So if you could please shed some light on, you know, what's happening in Pendimethalin in particular, maybe a little bit more broadly on some of the other products as well. Thank you so much. So in Pendi, in certain markets, we are finding the demand traction to be high. As you're aware, last year, we had received the technical equivalence for the European market, and therefore, that has afforded us the opportunity to sell in the EU market. There are also certain formulations, Pendi-based formulations, mixtures, which are seeming to gain traction in the overseas markets. There are also demand for the CS formulation, the capsule formulation, that seems to be strong. So these are different growth drivers that are helping us to feel confident to expand our capacity. Thank you. The next question is from the line of Rohan Gupta from Nuvama. Please go ahead. Hi, sir. Good morning, and thanks for the opportunity. Sir, first question, you mentioned roughly 5% kind of volume decline from the domestic agrochemicals. Can you give some share of volume and pricing decline in this? Domestic, are you asking about? Yes, sir, domestic. So, domestic, Rohan, the volumes have been largely flat, as we said, marginally positive, and the 5% de-growth that we spoke has been coming from price alone. So you are saying that the total revenue growth from domestic agrochemicals, which you're talking about, is 5% only. Volume has been flat, so minus 5%- Yeah. Is only the price? Yeah. Oh, okay. Okay, second thing is that in our seed business, and in the current quarter, I think a lot of credit goes to significant improvement in the seed business profitability, which earlier had a roughly INR 21 crore, which kind of with a loss, and we ended the quarter with the profit. So, seed being a very heavy Q1 business, do you see that there has been structural change because the company has been driving to drive its non-cotton business to remove the quarterly volatility on, and to drive the business in the other non-season of cotton? So do you see that there is a structural change and can expect that this going forward also can, quarter by quarter, can have an EBITDA positive? Or is it just only seasonal, or in the current year, we have seen a less return of sales from the cotton business, and that has driven this profitability in seeds? So, Rohan, you know, there is a significant Q1 in our seeds business towards Kharif, right? This Q1 will continue at least for, not only this year, but perhaps next year also, till we are able to sort out our Rabi portfolio in the seeds business. So that's, Q1 will continue into this year for sure, and next year, perhaps. Q2, I think, Rohan, the impact that you're seeing is largely because of sales returns accounting. Sales returns have been lower. There is intrinsically no change in terms of portfolio as such, major, major change. ... Thank you, ma'am. The next question is from the line of Somaiah V from Avendus Spark. Please go ahead. Thanks for the opportunity. So, sir, in terms of this, you know, flat volume growth in the domestic front and the 5%, price decline, can you just shed some light, what are your thoughts on the industry, performance, and, I mean, how we would benchmark ourselves with the industry in the previous quarter? So Somaiah, if I understood your question right, there was a bit of break in your audio. If you are referring to- Domestic. The domestic, industry performance? Yes. If that is your question, I think the results will play out. We don't think that there is going to be some significant growth in the domestic industry overall. Some companies which may have had a more favorable portfolio will certainly do much better. But generally, I think it will be low single digit only, if at all. Got it, sir. So also the international revenue, you know, the decline, can you just- Sir, your audio is not clear. May we request you to use your headphones? Is it better now? Hello. Yes, sir. Please continue. Yeah. Sir, on the international front, the revenue decline, can you give some color on pricing versus, volume decline there? The international business, the decline was more in terms of volume, so around 10%-15% is the price drop, and the balance has come from volume. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Hello, good morning, and thank you very much. First, congratulations on what is a good performance, given the challenging environment. The two thoughts I have. One is, what is your reading of the excess supply coming in from China? Is there is it possible to give some timeline over which we can see that subside? And secondly, if you see the Indian water situation, what to what extent do you think the northeast monsoon can make up for the shortfall in the moisture levels for the Rabi? What is your reading of the situation? And how do you see the investments on the MPP adding to your revenue? If you can give some ballpark number in terms of capacity or full potential revenue from the MPP at full capacity, that will be useful. So as far as the channel inventory and the availability of stocks from China, I think it is something based on our interactions with our customers, we feel that it is quite some time away, which is why in the opening remarks also it was mentioned that it will be at least after this quarter. Now, whether it will happen in the Q4 of this year, or whether it will be a renormalization even later than that, we will have to really wait for some more time to see. But the channel stock levels are fairly, fairly high at this point in time. That is one. And the second is in terms of the rainfall. Yes, there is a challenge, particularly in peninsular India, where the reservoir levels at this point in time are significantly lower compared to the long period average. We do think that there is likely to be an impact on account of this in Rabi, and at least we are factoring that into our plans for the upcoming Rabi season. As far as the MPP is concerned, we, as we said, we have started with difenoconazole. We will be getting into our first contract product from there in the course of this year. What we would do is to kind of wait after the execution of this, to kind of arrive at some kind of a normative level at which we can have a good asset turnover ratio, if that's what you're trying to sort of look for. Because as I said, it also depends on the progress of registrations that we are able to achieve, and we are also in the process of developing more pipeline products. So I would say that we will probably be able to aim for some kind of a reasonable ratio after we go through at least a year of experience on the MPP. Thank you very much, and wish you all the best. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity. So the first question is on the global crop protection market. You indicated in your opening remarks that the market is likely to decline by low double digit. Is there any volume impact? I mean, largely it will be attributed because of the pricing, but is there any volume impact that we have seen in certain geographies because of weather-related anomalies? Thank you. Not because of weather-related anomalies. It is more about... We have seen significant volume impact, like we mentioned, like Subhra mentioned, in our Quarter Two international business, only about 10-15% of the decline is attributable to the price drop. The rest of it is actually volume drop. So we have actually seen volume drops in our international business, and we believe that this will be typical of most of the industry. And this is more related to the stock levels in the channel and the companies not being able to place fresh purchases because they are already overstocked and have challenges down the value chain that this is happening. It is not so much about weather-related challenges. Thankfully, actually, the farm income levels in many of the geographies are still robust. So we are not looking at it from a weather perspective point of view, but more from a channel inventory point of view. Additionally, I don't think there's any drop in consumption, because, in some of the markets, the season is going fairly decently. It's not that there's going to be, demand disruption from the consumption level. Right. Right. I was actually looking from the consumption point of view, and it's clear now. The second question is, in terms of the lower water reservoir levels for Rabi, given any historical precedents, does that affect the consumption—I mean, does that affect the acreages? And obviously, it'll have an impact. So excluding the inventory-related impact, from the sowing perspective, have we seen this kind of anomaly in historically, you know, whenever such a situation has happened? Thank you. Yes. I think, in terms of, water shortage, definitely would have a, have an impact. As you are aware, the level of irrigation in the country is 40%, 50 to 45%. So there are, there is bound to be, an impact as far as the domestic business is concerned. And as I said, that is why we are factoring that into our plan. We are trying to look at which geographies, what kind of impact that could be, and how do we, sort of operate under that, situation. Thank you, sir. The next question is from the line of Rishabh Shah from Dalal & Broacha. Please go ahead. Yeah, two questions from my end. Can you just tell me about the export and domestic revenue mix for the quarter? Because that's not mentioned separately in the PPT. And possible to share the CSM margins, expected CSM margins, because usually it will be like a cost-plus margin model, right? So yeah, that's it from my end. So we wanted to share the, the margin profile of our CSM products, but, overall revenue split to sugar, you know, let's share between domestic and international. The domestic and international would be 4:1, you can say, for this quarter. 4:1. And just if you can directionally guide on the CSM margins, is it better than the company-level margins or in line with the company-level margins? Yeah, CSM business is relatively... We can't give that level of detail, because that will, that's also something that our partners do not encourage. But it's in, I would say, it's in line with our business margins. Thank you. The next question is from the line of Rohit Sinha from Sunidhi Securities. Please go ahead. Yeah, thank you for taking my question, sir. Some of my questions are already answered. Just one question, if you can give us an overview on, as we are saying, that the export market is today impacted and the volumes are down. So, is it possible to just give an overview on region-wise specific thing that which regions are doing, and which regions are under pressure, and where we are seeing some kind of improvement? And even going forward, where we are expecting some kind of green shoots in coming times. Green shoots at this stage is a little early, but certainly the U.S. geography is quite a bit affected. E.U. is also affected and Latin America to a smaller extent. So I guess that would probably be the hierarchy of impact. But all these geographies are significantly affected. Green shoots is a little bit difficult to predict at this point in time. It all depends on how long it will take for liquidating the inventory that has been... As you're aware, the global agrochemical business went up to $80-$90 billion from about $60-$65 billion in two years. So there is a kind of a process of working out this flab, which is going to take some time. It's hard to predict when the green shoots will emanate. Okay. I think the next quarter is not going to be easy. That's for sure. Okay. Clear answer. That's it from my side. Thank you. Thank you. Ladies and gentlemen, as that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you. Thank you. As you would appreciate, we are facing significant challenges due to sharp price correction and global, global demand compression as well, due to the inventory overhang, as we have articulated. We expect the situation to continue well into Q3 and perhaps for the rest of the financial year as well. We will continue to monitor the volume-led growth across our portfolio, with pricing growth likely to be negative. Margins will remain our priority, and we will continue to the path to improve on an annualized basis through better product mix and pricing actions. Our wide and diverse portfolio, with presence across domestic and international markets, crop nutrition and seeds business, does offer us some stability to navigate through these challenging times. Quality of sales and cash flow will continue to be a key, key priority across our business teams, and we will further focus on improving collections and controlling inventories during the second half of this year. Our investments made over the last few years in R&D, product development, manufacturing, and capabilities will enable us to deliver our long-term growth agenda in a sustainable way. That concludes my remarks, and we can conclude the call here. Thank you very much for joining. Thank you very much, sir, and the members of the management. Ladies and gentlemen, on behalf of Rallis India Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.