Ladies and gentlemen, good day, and welcome to Rallis India Limited Q1 FY25 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 this 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 Q1 FY25 earnings call. We have with us today Mr. Gyanendra Shukla, Managing Director and CEO, Mr. S. Nagarajan, Chief Operating Officer, and Ms. Subhra Gourisaria, Chief Financial Officer. Before we begin, I would like to mention that some of the statements made in today's discussions may be forward-looking in nature and more involved with certain uncertainties. A detailed statement in this regard is available in the results presentation. I now invite Mr. Shukla to begin proceedings of the call. Thanks, Gavin. Good morning, everyone, and thank you for joining us today on our quarter 1 fiscal year 25 earnings call. As mentioned by Gavin, Gavin, I have alongside with me, Nagarajan, our Chief Operating Officer, and Subhra, our CFO. Let me begin, the discussion by, getting into the industry landscape initially, post which I will discuss the result, discuss Rallis' specific developments. On the industry side, we have seen an early sign of demand recovery after a long time. All of you know that a couple of years have been a little bad. In domestic markets, there's a positive sentiment, primarily driven by monsoon prediction of IMD. There is a deficient rainfall till, June 2024, that did impact, quarter 1 fiscal year 25 sales. But of late monsoon has started really picking up well, and the kharif sowing is registering significant growth, about 10%, compared to last year. If you look at key crops, paddy is about 21%, soybean is about 30%, maize is 34%, and pigeon pea is about 191%. This is one crop has seen significant increase in acres driven by commodity prices. From field reports, what we are hearing, cotton acreages have reduced significantly in northern part of India. There's one particular pest called pink bollworm has been bothering the farmers. However, on the export front, recovery remains soft with the key markets like the EU, US, SEA, all they have. So while volumes have started picking up, prices continue to depress due to oversupply from China. We think that the ongoing season in northern hemisphere, including, you know, US, should lead to some balancing of the inventory, and hopefully things will move, will start looking positively from there. Coming to Rallis' specific developments, we have started the year with overall revenue being flat. I mean, it's an overall number when you compare with the last year, but there are some, I would say, green shoots are there. So, for example, our domestic crop business, crop care business, has delivered a positive growth. And seed, as we had indicated in the previous call, we had supply constraint. As a result, we had to take the de-growth. And crop care, I think, is largely domestic as well as international business, you know, as I said, continues to remain under pressure because of the price. EBITDA for the quarter stood at INR 96 crore. It is lower by about 13% compared to same quarter last year. The gross contribution margin of 30%, and PAT for the quarter stood at INR 48 crore compared to the INR 63 crore reported during Q1 of fiscal year 2024. Getting more specific about the individual businesses. So starting with domestic crop care business. Crop prices are relatively better, particularly for pulses and oilseeds, and favorable monsoon was the primary growth driver for the business. Input prices were relatively stable during the quarter, which in turn resulted in better margin profitability for the business. In terms of product categories, I think I had indicated in the last call, herbicide is one area, which is growing faster, driven by the labor dynamics in the country, has performed well for us. Having said that, I think we still have a gap in our herbicide portfolio, which we are working on. On the back of it, crop care delivered a strong volume-led growth of about 8%. Growth was good in both domestic crop protection and crop nutrition business, with year-on-year price drop impacting growth. Now, as we see domestic market, I think prices are stabilized, but our strategy is to continue to grow the business with more thrust on developing differentiated product. We are improving our front-end capabilities based on the theme of customer centricity I talked last time. As we work more on this, you will start hearing more about this as we move forward. Our endeavor will be to build a more connected organization, leveraging digital. I think, you know, digital will give us the scale, and that's where we'll get close with the customer. We have also progressed well in our supply chain management strategy, linking demand and supply planning with SAP IBP going live. It was just, you know, launched in the month of August, so work is still going on, but this will help in driving efficiencies on all the fronts. Crop protection— Crop nutrition had a very good quarter, and we had a growth of roughly 31%.... As it was informed earlier, we also commissioned a water-soluble fertilizer plant during the year. The crop nutrition, as I mentioned last time, is continuing to be our strong pillar for the long-term growth, and we'll continue to invest in this segment. Coming back to international business, our revenue stood at INR 133 crore, which is lower by 5%, compared to the similar period last year, though we had a decent growth of about 19%, but the price challenges are really impacting overall growth from a revenue perspective. We have some old product like Acephate, Hexaconazole, and Pendimethalin, where prices continue to remain muted with the Metribuzin prices actually are almost at the level of half compared to what they were two years ago. On the top of that, sea freight has also seen a steep hike as Baltic Dry Index has doubled over last year, impacting margins. In terms of our key products, Acephate continues to face challenges in Brazil and U.S. Pendimethalin operated at low capacity, but we are confident on long-term product of this technical, so we are more optimistic about Pendimethalin related to Acephate in the long term. And Metribuzin and Hexaconazole exhibited its steady traction in the U.S. and Southeast Asian markets. We also progressed well in terms of commencing new relationship with global majors for some of some of our old technical. In contract manufacturing business, we are also working on expanding formulation alliances with global players to build a more resilient portfolio. This will help us improve the capacity utilization of our state-of-the-art manufacturing facility in the chemical zone in Dahej. We are confident that this business will meaningfully contribute to both top line and bottom line in the years to come. So that's on the chemical side. Shifting gears to seed business. As I earlier said, look, we had a seed supply shortage in several crops. And as a result of that, our revenue has dropped by 15%. But with the prudent cost management and pricing, we have been able to improve our GC by 4.4% compared to similar period last year. We also have invested in technology, a tool called SeedSafe, which is which uses AI and ML forecasting abilities to really ensure that optimum, optimal placement is happening in the market. I am also very happy to report that Diggaz, the hybrid cotton which we had launched in the north, has seen a good volume growth, and this is on the top of that with significant lower cotton area planted in northern part of the country. As far as other crops are concerned, the liquidation trends are satisfactory, as rains have hit us everywhere almost now. In terms of our long-term strategy for the business, we are on the right path with the sharpened portfolio choices and driving sustainability, profitability, with measures being taken across the value chain. In conclusion, I think near-term outlook for the business, particularly international, remains challenging, at least for the next three months at least. However, domestic business with the rain and the commodity prices being, you know, good, are looking positive. We are very confident and optimistic about the overall growth prospect in the medium to long term. Furthermore, our efforts are now directed towards improving, as I said earlier, customer connectivity, leveraging the digital sharpening product portfolio choices. When I said last time, I really meant that, look, we are going to work more on a differentiated product and, also going to phase out some of the products do not make money, are too small, and they bring supply chain complexity. We are working on new partnership and alliances to build, renew our portfolio. That concludes my opening remark. Now I'll hand over to Subhra, our CFO, for a detailed analysis of the financials. Subhra, over to you. Good morning, everyone. I'll quickly walk you through financials, and after that, we can start the Q&A session. Our revenue stood at INR 783 crores, as against INR 782 crores for the same period last year. Volume growth was encouraging at 9%, but price challenge, especially in international market, impacted the overall growth. Also, as Mr. Gyanendra mentioned, supply challenges in seeds has impacted the growth in the business. EBITDA for the quarter stood at INR 96 crores against INR 110 crores for the same period last year. Profit, PAT for the quarter stood at INR 48 crores against INR 63 crores for the same period last year. In terms of domestic business, crop care business, it had a good growth of 13%. Due to poor Rabi crop, we had high trade inventory, which also we corrected during the quarter. However, now we believe sentiments are improved with new MSP and monsoon progressing quite well. As far as seeds is concerned, we did well despite reduced cotton acreages. We have made calibrated placements considering the inventory level, and I'm hopeful that our liquidation trends will be better. International business, the high inventory and the China prices continue to impact sales and profitability. In terms of performance of key technicals, which Gyanendra already spoke about, we are working on expanding our customer base and product portfolio to build a more resilient business in this trend. Our efforts continue to be directed towards driving focused execution both at the front and the back end. This includes portfolio optimization, territory rationalization, removing overlaps wherever it's there, and looking at cost efficiency and simplification across the value chain. Our actions around portfolio refresh continue, and we have launched 5 new products in crop and 14 products in seeds during the quarter. We will continue to be relentless on improving capital efficiency, both for working and fixed capital. We do have a very healthy cash balance as of thirtieth June as well, and with no external borrowings. Our CapEx, we are also very prudent in CapEx investment, and this year's CapEx spend should be in the range of INR 100 crore. In summary, we are implementing various initiatives in our drive towards achieving consistent, competitive, and profitable growth. That concludes the remarks. We can now start the Q&A session. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question, may press star and one on their desktop telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Request to all the participants, kindly restrict to two questions per participant and join the queue again for the follow-up question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from Viraj Kacharia from SIMPL. Please, go ahead. Yeah, hi. Thanks for the opportunity. Just a couple of questions. First, on the gross margin. See, you know, you talked about an increase in prices and seeds and cost management. So the margin in seeds is quite healthy despite the drop in seeds. And, you know, one—if one looks at the growth in B2C business, one would think the overall gross margin per se, for the company as a whole should be better. But so, you know, the question is that, is it that the international business is making a negative margin or a loss in this particular quarter? So, and if you can just give some perspective, what is driving this loss? Because, if I look at other industry B2B players, you know, they are seeing an improvement in margins and recovery in sales as well. But for us, it seems, you know, it's a kind of downside, it seems. The business has incurred a loss in the B2B business. So that is one. Viraj, is there any other question or should we respond? Can we just start with this? Okay. The gross margin has come down, not because of international business making any negative margin, so we didn't make negative margin in international business. We had mentioned in the earlier calls that we were taking swift actions in terms of liquidating old inventory. Overall spread has indeed compressed, and hence the margins are lower than what we have made historically, but we have not made any negative margins. The overall margin compression has come, A, because the mix has overall every year Q1 seeds is a larger proportion of the portfolio, and seeds mix has come down. As you would have seen, seeds has had a negative growth compared to crop care. So while the mix is positive in terms of domestic crop care versus international, it's adverse in case of seeds. Secondly, certainly in case of domestic and international, the relative margins are relatively poorer than the historical margins. Does it help answer your question? No. See, if you look at seeds margin per se, right, you did around 22% EBITDA margin in seeds as against 20%. The drop is hardly INR 4 crore on a year-on-year basis. So even if you adjust for that drop in sales in seeds, you've kind of done a very, done a far better job in terms of managing the profitability in seeds. In domestic, if you look at, you know, the environment, the RM prices are many, so you're reporting a very strong, healthy volume growth. So one would think that, you know, the overall margin, either at the gross or the EBITDA level, would be relatively better. But that is not the case. So, I mean, the only thing which adds up is the, either the loss or the sharp compression in the international business. That's where I was just trying to come from. The related part was in, see, in other expenses also, you've seen a jump from INR 125-INR 136, while sales is largely flat. Any one of them? Yeah. So let me first give you my perspective on this margin. So obviously, seed, we are up, and as I said earlier, we are managing. We're going to be managing seed for profitability. Now, when it comes to B2C or B2B in crop care, you have to understand that for us to significantly move margin, when I'm comparing with company A, B, C, D, we have to see the product mix they have or we have. We are a company where our herbicide portfolio, which really for most companies in quarter, will comprise most of their sales. Herbicide is one area where I would say we are not very strong. So that is something as we work on portfolio in herbicide, I think that should start changing. Even so, I think it's always a combination of to know what product mix I have got and what others have got. So, we are aware of this fact, and I think our attempt is to start looking at portfolio and start cleaning up so that, you know, we are continuously improving our margins. And that will only come from portfolio churn. And portfolio churn, you know, it's a phase out process. It's not a startup process. On the other expenses, sir? So the other expenses, Viraj, has gone up, one, obviously, because we spoke about the contribution to BP electoral trust, and there is also an element of increase in rates and some investments that we have done behind digital settings there, including migration to SAP S/4HANA. Okay. Just one question, if I may. You know, if I look at 2024 as a whole, you know, in the annual report also, we talked about around INR 30 crore of investment in P&L from digital or IT spends. So, can you elaborate how are these helped or we expect to help either in terms of better sales through the cost efficiency, and how should we understand this range going there? I, can you just, reiterate your question? So, you know, if you look at, I think, 2024, in the annual report, we talked about INR 28-30 crore of spends in the P&L towards digital and IT spends. So idea was to understand, you know, how these spends are helping us either in terms of better sales throughput or cost efficiency. So if you can give some examples, and if you can also help us understand how should we understand this range of spends, you know, going ahead? So if you look at all of our digital spend, actually you can categorize into four, four rather five categories. One is obviously back end is very, very important, which is, you know, SAP S/4HANA, where we are going through, you know, complete changeover of our ERP system. That obviously takes time and money. On the other efficiency related, we are building a tool called Drishti, and I think it has been talked about in the past, and that's where we're trying to develop how can we use AI and ML technologies, leveraging satellite data, et cetera, to help farmers warn about flooding, drought, you know, pest pressure, so that they can optimize, you know, uses of the chemical from the crop and hence benefit. Because unless farmers make more money, you know, none of the companies are going to be successful. Other things are really, our channel focus, where we call, you know... So we are investing a lot in really getting visibility. One of the challenge we and the industry faces is when once product moves from distributor to retailer, there's hardly any visibility, and that shows up in the form of return at the end of the season. So there's something called Anubandh. It's a program we are investing in. It's again, digitally enabled to really, two things: A, we, we start getting better visibility of what is happening at the channel level, one more step down beyond distribution. And another thing, to expand our footprint of retail so that we are reaching to the unreached customer. The other areas where we have, you know, SeedSafe, where we are trying to use planning, it's a planning tool to really say how we should plan and how much we should plan. And we are trying to work on some of the leading indicators to really understand how much placement we should make of the seed, because seed is one category. If you place too much, if it comes back, it also leads to a lot of write-off. And the other thing is really, you know, another tool is, which is more related to production, planning, tracking, improving the efficiency of SeedSafe. So there are 4, 5 initiatives, and I think sixth one, which I have been talking is really customer connected. Because so we're trying to look at a lot of internal things. So from a company perspective, ERP is strong, ERP is important. Then we have done something which are related to production and tracking and retailer distribution, and now we're talking about customer. So I think as we look at as we move forward, digital investment is going to further go up because we would like to understand customer, and it's very, very important to understand your business to get lead indicators ahead of time, because that helps you in planning and forecasting business better. And the other one, we probably have not talked about it. I think manufacturing is one area where we are also evaluating various options and what kind of required automation we can bring, and that can bring efficiency, efficiency, and, you know, timely delivery, because everything, you know, is very, very important. So we're also looking at automation in manufacturing, and that has not been done yet. But customer and manufacturing automation are two focus areas. Others have started, will continue to improve and invest in those areas, but these are, these two are going to be fresh investment. Also, to add, Gyanendra, we also have last year, since the reference was about last year, we had invested in a supply chain tool as well, SAP IBP integration called Plan Guru. We're branding it as Plan Guru internally, and of course, that is something that will help us in better forecasting, better logistics. So the question of how it will help us in improvement in operating efficiencies, we believe that this can actually help us in managing our stock flows much better, and also be able to respond to demand changes that happen, inevitably happen during the course of the season in a lot more agile fashion. I mean, in a nutshell, I can tell you. So, for example, this year, nobody would have thought the farmers would not plant the cotton in March. Such a significant drop will happen, in some of the areas actually drop is to the extent of 50%. So what are the things we can do digitally to connect with the market better and can get some leading indicator to manage business better? I mean, pulses going up, you know, the pulse planting going up by 200% is something very unprecedented. Thank you. Because land is limited in the country. They are growing so much of one crop, that means other is going to suffer. Thank you very much, Viraj. A request to all the participants, kindly restrict it to questions per participant and join the queue again for a follow-up question. The next question is from the line of Darshita from Antique Stock Broking. Please go ahead. Yeah. Hi. Thank you for the opportunity. The first question was regarding the supply constraints that we've been seeing in the seeds business. If you could elaborate a little bit on these supply constraints, one, and two, when do we expect, you know, these to smoothen? ...So, seed supply chain, if I may say, is very complicated. What I want to sell in 2025, for example, I should be taking production this year, right? And parents of those seeds should have, I should have produced in 2023. So it requires two years of planning. So that's one, and you need to have a parent, enough parents to produce. The second thing is seed production, for majority of the crop we are dealing with, happens in the Rabi season of Southern India. So most of the seed is being produced in Andhra, Telangana, and little bit in Karnataka, Maharashtra, and, Tamil Nadu. Now, last two years have seen significant drought, right from the month of September all the way to, you know, November, December in this part. So there was, there were two years where there was excess rainfall, planting got delayed, and then last year was significant water shortage. As a result, there was a competition for what you call seed crop acres. So those are the things led to really less production. The other thing is, we are also becoming, you know, we are raising our bar on the quality standard, because in seed, so, so when seed comes back, we have to test it and check it for, check it for its integrity, from purity and germination perspective. So all those things also sometimes lead to, you know, these shortages. Now, the other, other thing is, this is one category where I, either I keep too much of inventory, right? In anticipation of demand, which also means I lock in working capital for a lock-in period, which I think is not desirable. So we're trying to fine-tune in such a way, and my colleague, Nagarajan, mentioned about some of the tools we are using to really forecast demand and produce accordingly. So it's a combination of things, it's a complicated supply chain. I think we're just trying to manage it, the whole business for profit, rather than trying to say, you know, we'll just shave the volume in this. Because seed inventory can come to haunt us, you know, very badly. It all becomes write-offs. Right. Got that. Second one was, it was a clarification. I think Subhra, I mentioned that we have seen a margin compression in the domestic market as well. Did I hear it correct? Yeah, relatively, yes, you're right, Darshita, because also I said that we corrected inventory from Rabi, and Rabi's inventory made higher margin for us. In terms of the current placement, we are well on track in terms of the margin as well as the plan that we had. But now monsoon is picking up, hopefully the liquidation should be improving. Thank you very much. The next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yeah, good morning, and thanks for taking my questions. I maybe just start with a couple on the seed side. Would it be possible to give us some flavor of, you know, the crop-wise breakdown of the seed business? Just rough numbers would also be great. And, in terms of the Y-o-Y growth, or the decline that we've seen, is that coming primarily from the non-cotton categories, or how should we think about that? Thank you. So, if you see our business, you know, the two areas where we had supply challenges primarily was hybrid maize as well as hybrid paddy. So cotton was indeed actually, Abhijit. South, north cotton, we said we had very good momentum. South and west cotton, we have to yet see how the liquidation progresses, but it's not a big part of our portfolio. So paddy and maize were the bigger ripples for us. And they are a significant part of our revenue. Yeah. Okay, understood. And, just in the context of this pink bollworm infestation in the north, you know, what's your early sense about how Diggaz and your other hybrids are sort of, you know, coping, with, with the, you know, attack and, and thereby, you know, maybe generating better demand for next season from the farming community? So, I think it's a very difficult situation for the farmer, because each company has a common denominator of Bollgard gene as their technology platform. So seed per se cannot control the pink bollworm, right? So whether it's Diggaz or anything else, any competitor product, what we are looking at is, because our seed in the last two years has performed very well in the farmer's field, in the comparable situations, is all always relative performance. Everybody has pink bollworm bollworm issue. I think what we're trying to do, our team is on the ground, and we're trying to really educate farmers what kind of a strategy they can adopt from crop protection perspective to save their crop. And every company is trying to do that. But given everything else being at par, I think Diggaz has performed well, and that's why demand was very high this year. Abhijit, I can add a little bit. I think... Yeah, so I think, I believe the purchases for this year have been very, very encouraging, and obviously the purchases for this year are driven by the performance and the experience over the prior, prior years. And therefore, you know, if you kind of recall, we had moved from 200,000 packets a couple years back to about 400,000 packets last year. Clearly demonstrating that the proposition of a shorter duration- ... to kind of beat the pink bollworm impact has been very well received, and that is what has played out in this particular quarter for us. We believe the liquidation also will be very high. In fact, it is in some of the pockets where it is complete. The experience of the farmers this year is going to be very critical for the future. So the key monitorable from our point of view, and which, of course, we will really be focused on, is the experience in terms of the yield after two pickings, for example, and kind of see how it compares with various other brands. So I think that's really where we are, and we are positive at this point in time. Thank you very much, Abhijit. I'll request you to come back for a follow-up question. Next question is from line of Ankur Periwal from Axis Capital. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. First question, you know, on the export demand, especially for our key crops. If you can highlight the pricing and demand trend there, because I think in the initial comments you did mention that Pendi had a lower capacity utilization wherein, if I'm not wrong, you were planning to expand the capacity. So if you could highlight some comments there. So of all the molecules we produce, I think, pendi is one which has a good future. It has continuing demand. Having said that, I think industries are still dealing with the oversupply from the previous productions, right? And so other product where I think we face challenge is really acephate, because that product, you know, not only could come under significant, what do you call it? Regulatory review, but suffers from the same fate as it is only sold in certain markets, not sold in certain markets. So how the supply situation is in those markets, you know, that determines at what price we can sell. So I would, at this point of time, say Acephate is a larger challenge than Pendimethalin, because, I mean, we like it or not, you know, China will be there, they will continue to supply, so we'll have to become... We also have to start internally looking how do we become more efficient with that and be competitive. Sure. So from a full year growth perspective, given the pricing is what it is, would it be fair to say that large part of the growth will be volume-led, while pricing will still be, you know, an overhang in terms of overall revenues for exports? So, so it's very, very difficult to say what will happen, you know, 10 months from now, 11 months from now. But what we see is, if you start splitting our business in the segments, as I said, domestic formulation demand is looking good, for the various factors I mentioned. Seed, majority of our season is over. We are primarily, you know, bulk of the business happens in Kharif, and the only adjustment would be related to how much, you know, return comes versus what we have estimated. So that adjustment you will see probably in the subsequent quarters. And domestic season, you know, is actually coming big. Then you have obviously CSM business. I think, you know, CSM business also has the same dynamics as international business, while, you know, contracts are slightly different. On international, I guess if you go around world, commodity prices are low, but consumption is taking place, prices have not improved. So, I guess a little bit of this inventory in the system, nobody is able to predict. I know neither I am able to predict. There's no crystal ball in my hand to say, what will happen. Having said that, I think we have to start becoming efficient on our cost and customer relationship. You know, that's the only way to manage the situation. And look, start looking for new molecules, new products, and phase out some of the older ones. Thank you, Ankur. Kindly join the queue again for a follow-up question. Next question is from line of S. Ramesh from Nirmal Bang. Please go ahead. Good morning, and thank you very much. So if you are looking at the current progress in the monsoon, is it possible to give us some indication of what is the kind of volume growth you can expect in the domestic market? And is the 19% volume growth you reported in exports kind of sustainable over the next few quarters, and what is the sense you have? Obviously, I can't give you a percentage. You know, it's very, very difficult to say what percentage, but given the sentiments, you know, we are expecting a significant growth. You have seen that has happened in the past quarter as well. Because when prices are decent and planting is there, rainfall situation is certain, farmers do try to maximize their yield and return, and that's where crop protection do play a very, very important role. Our attempt would be to, you know, you know, try to take full advantage of the situation, which is in front of us. In terms of the export volumes, do you see the trend continuing? So, export, I think, you know, so obviously from a volume perspective, things have started moving. Pricing is something nobody knows. And again, it depends on the molecule, because one of your colleagues did mention, person on the call, that others have seen, but it depends on the what molecule we are talking, because every molecule has its own dynamics and market. In terms of margins, is there some sense you have in terms of when you can see margins achieve what you did a year ago, say, if you take a full year? So I cannot give you numbers, but all I can tell you the initiatives we are taking and some of these initiatives, for us being a seasonal business, you don't see in a very short period of time. So fundamentally, we are trying to look at our organization differently, trying to get it more focused on the business units. We are double dialing up on the partnership and collaborations. As I said, we are looking at portfolio, but we also have to understand portfolio, we have to do analysis, and we have to make sure we are able to exhaust, you know, inventory. So a transition to more profitable, differentiated product itself is a journey, which means you have to identify your product, do that proper analysis, phase out them. But I said, look, crop nutrition is looking very attractive and this is something we want to. It's a relatively higher margin, and seed also is a higher margin, and we want to manage for profitability. Thank you. Thanks, Ramesh, I'll request you to come back for a follow-up question. Participants, kindly restrict to two questions per participant. Next question is from the line of Rohan Gupta from Nuvama Institutional. Please go ahead. Hi, sir. Good morning, and thanks for the opportunity. The question is on this, you mentioned that rationalization of the portfolio in agrochemicals, where you want to focus more on herbicide portfolio, which is weak. So what strategies you are looking at, whether you are getting into more collaboration with the global partners, global players, or going to develop your own molecules launched by yourself, more in generic or in special categories or specialty chemicals? So what is the strategy you're going to adopt in to strengthening your product market? So I said two things, not only herbicide, crop nutrition. I also said even in insecticide and fungicide, which is a larger chunk of the portfolio in crop care, there also our attempt is to slowly phase out low margins and start bringing new and differentiated product where margins are relatively better. Now, obviously, we are not looking at doing everything on our own, even if that means, you know, we have... And I have been talking about partnership and collaboration as important part of the strategy so that we are able to partner with the companies, both global as well as Indian companies, to bring those products and then, what do you call, refresh their portfolio. Now, these things do take time. I know, it's not something, you know, you can do overnight. It's a combination of things, not one thing. Okay. So you mentioned that definitely you'll be looking at more of the collaborative partnerships, I mean, with the coming with the global players. I think we have to. We are moving to a mindset to say, we have to make a smart decision, make versus buy, right? In a world where so many supply chain and product partnerships are available, we have to be very prudent in making decisions. So whatever is financially better, that's the decision we should make, and obviously, there's a point on supply chain certainty. So our decisions are more going to be based on, you know, make versus buy, you know, pure economical decisions, combining with making sure there's a certainty of supplies. Just to add, the product that we launched in this quarter, one of the products we launched, Mark Plus, one, is a 9(3 product, which is, in collaboration with, one of the leaders. So I think there would be examples and like what Gyanendra said, it will be a combination of both partnerships as well as, prudent buys and in-house products as well. Sir, similarly, in our export market, market also you mentioned, like, product like Metri and all, have seen a significant price drop, almost half. However, you have seen a significant volume-led growth of almost 19% in exports. So just want to know that, this, very solid volume-led growth, which is between the current quarter, is it driven by what? Inventory restocking happening globally, or the demand has picked up globally, what is driving this? And second, with such a sharp price drop in some of the molecules which we are making intermediates, do you see that the gross margin in this business will remain at the lower end only and probably will drag the overall profitability? It was also surprising to see when Subhra mentioned that we didn't have any inventory-led losses in, export business despite such a heavy price drop. So it is not able to figure out the math that what earlier participants also asked, that we had a seed business which is a 22% margin in the current quarter. Domestic business should have a better margin, but still we had a 12% overall margin, which should be only the function of that international business would have been in the red. But we're still not able to figure it out that how the margins are actually in the international business or in export business with such a price? Maybe I can provide you some color on that, if I may, Dr. Gyanendra. Yeah, please go ahead. See, I think you are right. I think the volumes have actually been better on the international business for most of our products, except the two that Dr. Gyanendra called out, one, of course, Pendimethalin and Acephate. What is driving the volume growth in these other products? I think the farmer level demand, because of, let's say, restocking that has played out, the farmer level demand has actually been fairly robust continuously. But I think the intermediary level demand, I mean, the stock levels have influenced the volumes that people like us are able to accomplish. So I think that has certainly changed, and we are finding that for the other products, the volumes have picked up. However, prices have continued to remain under pressure. And that is why, the margins, the contribution levels, for example, in the case of the international business, have been lower than last year. With respect to your query about the math on this and the earlier caller's question as well, I think one way where I can try and help you with that is, if you look at our quarter one EBITDA at INR 96 crores, last year was INR 110 crores. So that's a drop of about 14 crores, right? 4 crores is the drop. You can see this in the investor deck, actually. And there is a 4 crore drop in seeds, which already Subhra explained, leaving you with a 10 crore drop in the crop care area. A large contribution to this INR 10 crore EBITDA drop is coming from the international business gross contribution drop, which I just now alluded to. But despite that drop, the profitability, that is, EBITDA on the IB, the export business, because 10 crores is a drop, but it doesn't really make it negative. So that's, that's really the math to kind of reconcile the fact that the business has remained profitable. And, of course, we have had specific deals where we have had, let's say, prices with very, very little margin because of the inventory that we were holding. But we have not, as a export business, lost money, is what we would say, at the EBITDA level. I hope it helps. Thank you very much. Rohan, I'll request to come back for a follow-up question. Participants, kindly restrict to two questions per participant. Next question is from the line of Bhavya Gandhi from Dalal & Broacha. Please go ahead. Yeah. Sir, thank you for the opportunity. Hope I'm audible. Just two questions. One with respect to, ours was the price decline when it comes to domestic markets. We had a volume growth of 13%. Was there any price decline in the domestic market? You've not given this split. So, the volume decline in domestic business, volume price decline was upwards of 10%, and this is Y-o-Y decline. So the quarter-on-quarter decline has come down, but obviously this Q1 was on a higher price last year. It's 14% decline. Right. And with respect to the 13% volume growth, if you can share, which products have worked better and, with respect to price decline also, which products have not worked better? If you can just throw some light on that as well. So, last part of this volume growth is coming from herbicides, and it is a small part of our portfolio, but, we have seen good momentum in herbicide business in our domestic, portfolio. Plus, some of the recent launches we called out, Clasto and Prexin, these as well. Some of the recent launches have picked up well. So that's how the volume growth has come through. Okay, and where have we seen the price decline? So, price declines are coming in parts of the portfolio where we compete directly, and we have to be priced as far as the market is concerned. So, that's where the price declines are coming. So we have a fair bit of matrix in which we've split our portfolio, which is not very differentiated, and where we have not a great share in terms of brand, is where the price decline is largely coming from. Okay, fair enough. Yeah, thanks so much. Yeah. That's it from my end. Thank you. Next question is from line of Ravi Purohit from SiMPL. Please go ahead. Hi. Most of my questions have been answered. Just one broader, you know, question, Mr. Shukla, for you. I think, you know, it's been now four months that you've been in the company. And, you know, if you could just share, you know, for what have been your learnings so far. I mean, Rallis is probably the only Tata Group company which where, you know, profits are same where they were 10 years back, even today. You know, so, you know, what, what, what changes are you looking to make? What have, what have gone wrong over the last 10 years? You know, how should investors look forward to in Rallis, you know, with your experience, what should we expect over the next 3 to 5 years? If you could just share, that'll be very helpful for investors at large, to understand where the company is, you know, headed toward the next 3 to 5 years. Thank you. Yeah. Yeah. So one of the things I can reiterate, as I said last time, was that group is committed to this business and there's a lot of support. And I've been saying this is the only direct farmer-facing business we have. So there's a lot of commitment to grow this business. And I probably might be just reiterating what I've been saying is, so we're in the right businesses. You know, seed is a business, if it is run for profitability, is a very, very good business to be. Crop nutrition is a very good opportunity where I see a growth as well as, you know, healthier margin, because beyond bulk fertilizer, there's a lot of scope to grow the business and help farmers make more money. Because any company, unless can help farmer make more money, is not going to win the heart of the farmer. So those two areas from a business sector perspective, very important. And coming to crop protection, I think we have been weaker on the herbicides. We are working on it. And, you know, even this year also, as Nagarajan has mentioned, we have launched a product and so we will continue to focus on that because that is driven by labor dynamics of the country, where labor is available. Or, you know, if it, mostly it's not available, and it's available, it's becoming very, very expensive, and there, herbicide users come to play. Having said that, fungicide and insecticide will also remain very, very important. ... So from a portfolio perspective, we are in the right segment. I think what we need to, what you would see over a period of time, we'll launch new differentiated products. We'll transition to new product by slowly phasing out old products which are less, they do not contribute to profitability, and they unnecessarily create supply chain complexity. So that process you will start seeing. Obviously, it's a phase out. When I say phase out, doesn't mean it'll happen next month. It does, it's a process, right? Now, from a, from a product sourcing perspective, we do have our own R&D. As we have reiterated in multiple calls in the past that we are trying to now build an integrated facility, which should be ready in two years' time, where we bring our two R&D capacities together, you know, at one center in Bengaluru. So we'll continue to invest in R&D in the right areas. From a product sourcing perspective, we are going to be very, very thoughtful about partnership and collaboration. So the mindset of I should do everything on our own, I think we are moving away from that to be a more collaborative partner for global companies as well as domestic companies. Because I personally believe we have a very strong Tata values brand in the market, which works very well for us. So same product launched by us can get a faster and better traction in the market compared to a relatively unknown company. So partnerships and collaborations are going to be key pillar. I also talked about, you know, investing in customer-facing digital initiatives. So I think a lot of work has been done and will continue to augment that, which is more internal efficiency planning and accounting and everything else. But tracking retail and customer and spending time with the farmers, leveraging digital, because digital give us a scale. I mean, there are only so many people a company can deploy in the marketplace and get access to the farmer and get a consistent message. So we're going to be investing on more customer side digital investment. That includes, you know, training, marketing material, you know, leveraging them, to get lead indicators, and that helps in planning our business better. So that's on the digital side. And as I said, look, manufacturing also, we are going to have a deep dive to really see how do we make sure, each of our products remain profitable and competitive in the market? And that's where we are not only looking at the product, our product life cycle, at what life cycle they are in global regulatory framework, where things stand. We are also going to invest in automation to really bring efficiency in our production and supply chain. So those are broadly areas. And the last but not the least is, investment in people. I think, you know, we are moving, we are looking at, you know, some significant leadership changes, you know, wherever required, to bring some fresh thinking. And also, looking at not only from the perspective of what is the right, also right sizing the organization. And, some of those things, as we move forward, I know you'll start seeing. Ultimately, the goal is that we should be able to deliver higher return on capital, to the shareholders. Okay, sir. Thanks a lot. We look forward to seeing the things that you mentioned today. Thank you. Thank you very much. Next follow-up question is from the line of Abhijit Akela from Kotak Securities. Please go ahead. Yeah, thank you so much for taking the follow-ups. One is actually just on, you know, the cotton seeds business that we were discussing earlier. So, just to sort of check, versus the 4 lakh packets that we did last year, what's an approximate number we would look to maybe end this year with? Obviously, assuming there is no significant sales returns. Second thing is just on the innovation turnover index, the ITI number. Given the kind of traction you're getting with Clasto and certain others, is there a broad number ballpark that you would expect that index to end up with for fiscal 2025? And finally, just your sense on how the margins in crop nutrition compare with the margin in the overall crop care business? That would be it. Thank you so much. So, I think there's a normalized margin and the margin we make. Our attempt is to move from the margin we make to the normalized margin, right? So, if you say normalized margin as a sector, seeds generally has higher than crop nutrition, and crop care is just below, what do you call it? Crop protection is just below crop nutrition. Now, the caveat here is that on the mix of portfolio, if you get a differentiated product, you know, which is well received in the market, your margins could be very high. But at a macro level, I would say, crop protection, followed by crop nutrition, followed by seed. So, Abhijit, maybe I'll answer your question on cotton. So cotton, overall, I think, we are hopeful that this year we'll do highest ever cotton packets between North cotton and Southwest cotton. Obviously, Southwest cotton liquidation trends are yet to be seen. North cotton, looking at the liquidation trend, again, we are hopeful that we should be able to get significant growth over last year's actual liquidation. And, this was also in a way constrained by the packets that we got in terms of production. So it was—if it was unconstrained, we would have got further high volumes on cotton. Crop nutrition, I think Mr. Shukla already alluded that it does make better margin. Given the fact that we share common resources in terms of crop protection and nutrition, in terms of front-end, we do get a significant benefit in terms of bottom line. ... Well, where are the ITI keys, so Subhra, if possible? ITI, Abhijit, is difficult to say because this last four years, contribution of it versus the overall portfolio, and we do expect the overall portfolio to grow as well. Having said that, our ambition is certainly, as we said earlier as well, that ITI should start moving to high teens, and which is where we have seen, an uptick happening in first quarter as well. Okay, thank you so much, and all the best. Thank you. Next follow-up question is from Darshita, from Antique Stock Broking. Please go ahead. Thank you for the opportunity again. Darshita, can you speak a little louder, please? Is it better now? Little better. Yeah, hello? Yeah, we can hear you. Yeah. So, we've heard that there has been an increase in the technical prices in the domestic market, largely due to the freight issues that we've been seeing. So, you know, if you could suggest if something like this, that is happening with us as well, and if this would, you know, put some pressure on margins, probably sometime in the second or the third quarter in the domestic market? Abhijit, I can take that, Dr. Gyanendra? Yeah, please go ahead. Yeah, no, I think, we have to look at the timescale. Actually, if you compare it with last year, that is Y-O-Y, that may not be, necessarily correct. But if you're comparing it in short run, that is, let's say, M-O-M or, Q-O-Q, what you're saying, yes, there are certain, technicals where the, certainly the raw material prices as well as the, technical prices are, creeping up. We will have to really see product by product. In some products where, the brand strength is there to absorb these increases, it would be possible, but certainly there would be some where it may be leading to some kind of margin compression. It's hard to say at an overall, overall level. Got it. And, one question on if we have taken any price hikes, probably on sequential basis, especially ever since, in the domestic market, that is, ever since the monsoon has picked up? Our pricing has actually been very, very product specific. I mean, I think, there are products where we increase and products we reduce. That is more dictated by the strength of our product and the demand that we are out looking for that product. So to answer your question, some products, yes. But most of the products, I would say, have actually had a reduction, most of the products. If you compare it, I would say Y-O-Y is a better comparison because, if you compare sequentially, the products that go into Kharif and the products... I mean, there's a difference, you know, right? Right now, we have more of herbicides and all of that going. So Y-O-Y, I would say pretty much most products there would have been a decline. Thank you. Darshita, I'll request you to come back for a follow-up question. Next question is from line of Pradeep Rawat from Yogya Capital. Please go ahead. Yeah, good morning, and thank you for the opportunity. So my first question is regarding the overcapacity in China. So we are hearing from other players that there is many capacities in the Chinese mainland has been shut down, and their inventory level are also on the higher side. So can you comment regarding that? Yes, I think that is correct. I think we have also got a lot of inputs about high capacity. Yes, some of them are closed down, but I think the supply is pretty high, which is what is causing the price creating a lid on the price to move, even if there is a volumetric demand at the farm level, which is robust. So yes, I think that is true. Yeah. With regard to inventory levels at distributor and retailers, in domestic and international markets, can you comment on that as well? So, international supplies certainly continue. There's no dearth of material. North America is going through a big season, and then Latin America, these are the two largest markets that will consume, including China, ASEAN and India. I think at a domestic level, I'm sure you're aware that many companies were stuck with inventory, and that's one of the reasons, you know, prices are still subdued, because everybody's trying to convert that, you know, inventory to cash, and also make sure their products are available during the season. So... but having said that, I think, as monsoon progresses, sentiments are positive. I believe, you know, companies also have been very careful in planning subsequent inventories. So, I think, at a domestic level, situation to only improve, not get worse. Okay, okay. Thank you. Thank you. Next follow-up question is from the line of S. Ramesh, from Nirmal Bang. Please go ahead. Hello, thank you very much. So, you said there has been an inventory impact in the first quarter. Is it possible to give a value to that inventory impact? And secondly, in the crop care business, the revenue is INR 428 crore. Can we have a split between domestic crop protection and the crop nutrition, either in numbers or in percentage? So, we keep doing this inventory. We look at trade inventory and look at what is it that is sustainable, and do the inventory correction at periodic levels. As I mentioned, there was, in some parts of the market, high inventory, which we did correction in the quarter, but I don't expect, I don't think that it's a sizable number to be called out. As far as your question around crop protection and nutrition is concerned, we already call out that it is, for instance, in the last year, we did around INR 180 crore of crop nutrition business. ... So it's currently around, maybe 15% of our overall domestic crop care business. 10%-15%. Okay. And secondly, if you're looking at, say, FY 2026, 2027, do you see any additional levers for growth, like your manufacturing business? Or would it still depend on the export business improving and the domestic business improving in terms of pricing and margins? How do you see, say, FY 2026, 2027 from where we are today? I think, I have already articulated as part of my, broader strategic intent, that we want to make sure, because, so, so there's always a, B2B, and which is important, but not, less important. But our focus big way is going to be in B2B, and three segments, as I said, are important. Growing crop protection, and within that, making sure our herbicide portfolio gets beefed up. We start, putting extra foot on nutrition and seed manage for profitability. The one more thing I want to, really talk about it, crop nutrition, because of the sentiments, crop, protection, because of sentiments around, you know, pesticides in general, based on what has happened recently in, what do you call it? Spices market. We are also conscious of that fact, and we are also going to be investing in new age portfolio, which is more based on peptides, enzymes and biologicals. That eventually will become fourth segment, you know, as we move forward from a customer perspective. Okay, thank you very much, and wish you all the best. Thank you. Thank you. Next follow-up question is from the line of Viraj from SiMPL. Please go ahead. Yeah, my question is largely on seed business. Just three specific questions. First is, do you expect any sales return to happen in Q2 or the rest of the year, based on the placement we have made in Q1? Secondly, you know, if you look at the R&D spend, you know, for which we did say in FY 2024, so it's something like INR 60 crore of R&D spend, and that has doubled in the last 5 years. Now, of this 60, roughly half, around INR 30 crore, is done in seed, so that roughly translates to almost 8%-10% of sales of the seed business. So question is, what corrections in our new product selection and R&D approach for that personnel we have done? Give some sense on the efficiency of these spend. Because in the past we've seen a lot of- Am I audible now? Yeah. Can you please repeat the question? Yeah. The question is that, you know, we've been, so we have spent, seen a good amount of spend happening in R&D with the seed portfolio. So in 2024, we did something like 8%-10% of our sales in R&D in the seed business. And this is a business where in the past also we've done a lot of spends, but we've seen good amount of impairments and write-offs and all. So the question is, what correction either in terms of the selection process, in new products or in the process which we have done, which gives you the confidence that you'll see a better efficiency on the spend? So that's the second question. And third is, do you expect this trend to continue going forward? I think, look, two investments are very critical for us. One is related to R&D, and second one is related to investing in the people. These two areas we will continue to invest. Now, your question is whether our R&D spend has been efficient or not. There's not much I can tell you now, but there's work going on to say how do we get more focused in R&D, and what are the new tools of R&D we can deploy to improve the outcome of our R&D? The average age profile of the products, you know, average age profile of the product portfolio in seeds, and what averages we think we have in the interim, which can drive growth. Because R&D itself is a, I mean, in seeds it can take somewhere between 7-10 years, you know, from idea to actually commercialization. So if you can just give some perspective on, As I said, look, in normal course, you're right. I think, you know, now it cannot be 7-10 years, because there are a lot of modern, modern breeding tools are becoming available, and our attempt would be that get that money focused on few things rather than thinly spreading it. Second thing is also investing that money wisely in the newer technologies, so that we can reduce the time of, product development and launch. Because 8-10 years is really very long, and no company can get into that and hope to be successful. Because by the time you develop product, you know, competition moves on. We're looking at both the aspects, say, what we do in a very focused manner and what kind of new technological tools we deploy to make R&D more efficient. Thank you very much. Ladies and gentlemen, we'll take the last question from the line of Rajkumar Vaidyanathan, individual investor. Please go ahead. Yeah. Good afternoon. Thanks for the opportunity. So my question is regarding the exports. So if I see the presentation, it says there's a 19% volume growth and leading to 5% value decline. So that means approximately there's a 20% price decline. So I just want to know, see, given that you reported negative growth in Q2, Q3 and Q4 of last year on exports, so does it mean that sequentially we are seeing an improvement in terms of the pricing? ... See, it also depends on the portfolio mix, so I don't think we can just add up the numbers and say that it. But having said that, I'd mentioned in the earlier call as well, that the year-over-year price drop is now going to get annualized. So we will start seeing, hopefully, not such steep price decline. This should probably manifest in better growth numbers. But the situation is quite volatile and difficult for us to say how Q2 or Q3 will pan out. Yeah, ma'am, because in Q2 you reported 50% decline in exports, and Q3 and Q4 also a significant decline. So compared to that, in current Q1, you are reporting only 20% decline in price. So that is why I'm asking this question. So sequentially, then, you should have seen an improvement, right, from a pricing perspective? So sequentially, price drops have stabilized. So sequentially, price growth, at least, you should see price moderation, I would say, you will start seeing. Okay. And, and also, there was a point mentioned about the buy versus, make, decision. So I was just, you know, my question is, so are we looking at any asset-light model when it comes to exports? Because, companies like, if you take companies like Sharda Cropchem, so they have been able to kind of, mitigate, this price decline because of asset-light model. So I just want to know, what do you think that you are kind of late into the, you know, kind of, the export market by pursuing the manufacturing-led strategy? Yeah. So, so look, we have already made significant investment in the manufacturing, and our attempt is to really make sure we sweat it out better. Having said that, as we get more relationship abroad, we are going to be making more prudent decisions that whether we have to make on our own or we can, you know, do things differently. So, it's not one approach cast in stone. We are going to be flexible. I think the whole idea is that how do we grow business and how do we return, how do we generate better return on the capital employed? Thank you very much. Ladies and gentlemen, we'll take that as our last question. I will now hand the conference over to the management for closing comments. Sir, would you make any closing comments? No. So, I just want to say thank you very much for all your questions. I think, they're important to us. They always keep us on the toes, you know, to make sure we live up to your expectations. So, but you have to understand, we are in a very complex business cycle, and there are a lot of external variables. Our attempt is to really bring more certainty to the business. Thank you for your time. Thank you very much. On behalf of Rallis India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.