Ladies and gentlemen, good day and welcome to Rallis India Limited Q2 and H1 FY26 earnings conference call. We have with us today Dr. Gyanendra Shukla, Managing Director and CEO, and Mr. Bhaskar Swaminathan, Chief Financial Officer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen room 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Gyanendra Shukla. Thank you, and over to you, Mr. Shukla. Good morning, and thank you everyone for joining us today for Rallis India Limited Q2 and H1 2026 earnings call. As mentioned, I have alongside with me Mr. Bhaskar Swaminathan, our new CFO. Welcome, Bhaskar. Let me begin the discussion by delving into the industry landscape initially, post which I will discuss Rallis's specific developments. Abnormal and uneven rainfall distribution in Q2 of 2025 has led to significant crop losses and clear drying in the United States. The heavy rain caused floods, waterlogging, and submersions of large farmland areas, which even affected crops like soybean, maize, cotton, and pulses. These conditions delayed harvesting and the application of crop protection products, limited pest infection due to heavy rain washing over pests, and increased sales return of agrochemical products due to lower demand from farmers. Moving on to global signals for recovery in the agrochemical sector in 2025 show cautious optimism with gradual demand improvement supported by stable pricing and strong export demand, particularly from markets like the U.S. and Brazil. Industry margins are likely to remain subdued amid rising competition and U.S. tariffs on Chinese agrochemical imports. Indian agriculture exports to key markets like the U.S. and Brazil are growing at 5%- 6%, supported by de-stocking normalization. China continues to keep the market well supplied; demand in the U.S. has been stable. The U.S.-China trade tensions, including tariffs up to 60%, are pushing U.S. manufacturing repatriation and reducing Chinese export competitiveness. Moving to Rallis's specific developments, we had a muted Q2 performance on the back of increasing rainfall in the key agrochemical consumer states like Punjab, Maharashtra, UP, and Rajasthan. Our revenue stood at INR 861 crore versus INR 921 crore of Q2 2025. Overall EBITDA for Q2 2026 stood at INR 150 crore, lower by 7% compared to Q2 of the previous year. Profit after tax at INR 102 crore versus INR 98 crore of Q2 2025, which is under 20 basis points higher than the previous same quarter. Crop care segment grew by 3% due to lower performance on the domestic front due to excessive rains. Export revenue grew by 33%, whereas seed segment grew by 29%. Moving into domestic B2C, our revenue grew by 8% and volume grew by 3%. Liquidation of herbicides in cotton and soybeans have been suffered, which led to returns in overall volume growth, with farmers missing on their spread due to heavy rains. Insecticides also registered the growth. From an overall perspective, herbicide categories are still under-indexed within our business, and we are consciously working on launching new products and improving the share progressively. New product launched during the quarter are Dweed and Dorido. Dweed is a herbicide and Dorido is a fungicide. Soil and Plant Health category face subdued demand due to poor crop yield prospect, adverse weather conditions, and regulatory challenges. Our continuous excellence around expanding targeted reach and penetration level in digital initiatives showing good momentum. We continue to work on rationalizing the portfolio and sharpening focus across key markets. Our export business has displayed encouraging performance with a focus on maximizing volume, driving capacity utilization for our plants, and expanding customer base. U.S. Cafe impacted some technical and formulation business for U.S. CSM Q2. As a result, CSM Q2 revenue is impacted due to customer phasing of dispatch plans for key products. Revision and hexaconazole growth showed good momentum and also on the good track, and with long-term demand remaining steady. We also have to mystify the plant capacity expansion with new efficient technologies. Excitator has also shown improvement in H1 fiscal year 2026 in comparison to the same period of last year, improving capacity utilization. Across technicals, we are steadily working on expanding the customer base and securing registrations with more global players to improve our share. Moving to seed business, seed revenue grew by 29% in the quarter from under INR 31 crore to INR 101 crore. Q2 witnessed significant supply chain constraints for maize, particularly in Tamil Nadu and neighboring states in Q2. Our placement volume fell short of plant targets, which indicates through enhancement of placement of mustard. Widespread adoption of illegal HTBt varieties resulted in higher returns of organized seed companies. We have increased product demonstration activities to maximize sales in Q2 2026. We have focused on accelerating the launch pipeline for proprietary research ID varieties with high yield potential. The near-term outlook for the business remains positive on the back of increasing our level of positive engagement with export customers. Our continuous efforts are directed towards long-term improvement, like customer centricity, sharpening the portfolio choices, launching new products, expanding its physical alliances in farmer reach, and leveraging digitalization across the operations. That concludes my opening remark. I will now hand over to Bhaskar, our CFO, for a detailed analysis of the financial situation. Over to you, Bhaskar. Thank you, Dr. Gyanendra. Good morning, everyone, and thank you for joining us today for our Q2 and H1 FY26 earnings call. I will walk you through our financial performance for the quarter, post which we shall commence the Q&A session. Starting with the top line for the quarter, our revenue stood at INR 861 crore as against INR 926 crore for the same period last year, resulting in overall degrowth of 7%. Overall, there's been a volume degrowth of 6% and price degrowth of 1%. EBITDA for the quarter was INR 154 crore against INR 166 crore for the same period last year. Profit after tax for the quarter stood at INR 102 crore as against INR 98 crore for the same period last year. We are significantly pleased with the response we are getting for our cotton hybrid biggage, and we believe it has significant growth runway. Our focus will be primarily on five key crops: cotton, maize, millet, mustard, and rice. We believe the focus on such selective crops will aid in driving scale. We aim to gradually build our presence across these five crops with a focus on profitability. Our efforts on expanding the customer base and product portfolio are going to help build more resilient business. Our efforts continue to be directed towards driving focused execution both at the front as well as the back end. This includes portfolio optimization, territory rationalization, removing overlaps, and driving cost efficiencies and simplification across the value chain. Our action across the portfolio continues with two new products in crop production segment launched during the quarter. We continue to be persistent on improving capital efficiency, both for fixed capital as well as working capital. Our inventory levels have moderated. Collections have also improved. We have a healthy cash and liquid balance of INR 454 crore as of 30th September. We envisage spends on CapEx would be around INR 50 crore. In summary, we are implementing various initiatives and we are trying towards achieving consistent, competitive, and profitable growth. That concludes our opening remarks. We can now commence the Q&A session. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone 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. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Sucrit D. Patil with Eyesight FinTrade. Please go ahead. Good morning to the entire Rallis team. I have two questions, one for Dr. Gyanendra and one for Mr. Bhaskar. Mr. Gyanendra, my question to you is, given the volatility in monsoon patterns and farmer sentiments, what are the biggest execution challenges you foresee in scaling your crop protection and feed business over the next few quarters? How is Rallis adapting its go-to-market and product strategy to stay competitive and relevant in this shifting agri landscape? Yes, thank you. You want me to take one by one? Okay. Look, I think volatility in the agriculture sector now, it looks like it has become a norm, not only in India and across the globe. Obviously, it poses challenges, but I think what we have been saying in the past is that our focus on three segments, which is soil and plant health, our crop protection portfolio, and seed will anchor our business. Because we produce these products, we research these products, we sell in India, we will continue to not only sell in India, we will also continue to explore the opportunities for export. Along with it comes our collaboration product access with multinational companies. We believe the kind of pipeline we are developing and the relations we are developing for product access, as well as some of the CSM development, I think will ensure that we continue to get seed of some new products to develop combinations or co-launch with the multinationals in the domestic market, as well as continue to explore some export opportunities. On top of that, the other thing we have been saying is that we are getting very focused in the very large country, very dispersed, but companies with the focus on short-term villages are likely to more succeed. Our continued focus on identifying right villages, leveraging digital market feeds, combination of digitalization across, focus on manufacturing efficiencies, getting new products launched. I think combination of all of those things we believe now we should be able to grow better than the industry in the long term. Okay, great. Thank you. My final question to Mr. Bhaskar is, with raw material inflation and pricing pressure in the key markets, how is Rallis planning to protect the margins going forward, especially in balancing procurement efficiency, product mix, and pricing discipline? What are the key financial levers you are planning to maintain the profitability going ahead? Yes, thank you. When we say procurement efficiencies, I think the efficiency lies directly around the procurement decision itself. We buy at the right time. Timing of purchases is very important. That's kind of a very calculated call wherein we look at the input side as well as the sales side, what is our view of the price ultimately will fetch. Most of the time, these are spot decisions, and that's how we have a control, rigor control over it. Okay, fine. Fair enough. Thank you very much. I wish the entire Rallis India Limited team happy Diwali and best of luck for the next Q3. Thank you so much. Thank you. Thank you. Next question comes from the line of Rehan Saiyyed with Trinetra Asset Managers. Please go ahead. Good morning, and thank you for giving me an opportunity. I have only two questions. First, on the CSM revenue side. Am audible right? Yeah, yeah. Okay. My first question is on the CSM revenue side. The CSM revenue will be due to customer phasing. Can you help us understand whether this is purely time-aggregated, or do you expect a normal volume to phase in from quarter two or quarter four? This is my first question. Yeah. I think our current year's CSM revenue, if you see, has come from all the products. So metribuzin has done very well. Soy's been limiting and hexaconazole growth. Majority of the gain which has come is actually the combination of really expanding to the new markets and also trying to be very competitive in the marketplace. I think our focus is really new product, new country, I mean, the product, new registrations, new customers. That is really helping us. The other benefit which we had was many of our products, actually, other than formulations, are exempted from tariff in the U.S. As a result, we were able to continuously supply. Okay. That's fair enough. The second question is on your newly project product launch of Dweed and Dorido. This is the company launched eight new products year to date, including Dweed and Dorido. Could you describe which of these products have shown the most promising early response, and how do you see them going forward for the coming years? Yeah. We launched products both in crop protection and we have seed. The seed product which we launched, one new hybrid in cotton, one in rice, and one in maize, all three have done very well. Now it's a question of producing more and scaling up. We're very optimistic about the performance of those products in the future. On the eight products which we talked about, in one product we had to delay the launch because we were not happy with the quality of the formulation that came out. We have fixed that problem. That will get introduced now because that has application across the crop. It's a broad-spectrum insecticide. Of the remainder, a majority of them were herbicide and one fungicide and insecticide. All I can tell you, these products were introduced towards quarter four of last year as a test launch. We actually have more than doubled their volume as we speak on a YTD basis. It looks like good traction and good momentum in the market. Okay. Fair enough. That's it from my side. Wish you happy Diwali to whole Rallis team. Thank you. Next question comes from the line of Rohit Nagaraj with BNK Securities. Please go ahead. Thanks for the opportunity. I should have the power to the entire team. First question is on the biostimulants market. If you could just give us an understanding about how the last three months have transpired in terms of the regulatory regime, and how are we placed in terms of the opportunity? More importantly, if some of those non-regulatory players are weeded out, will it be a better opportunity for the incumbents like us? A broader understanding on the industry in general and Rallis in particular would be very helpful. Thank you. Yeah. I think, yes, what government is trying to do probably was overdue, and that simply means that there are challenges for everybody in the short term. From a long-term perspective, I see this as a positive development because it does, I don't know, help in bringing more organized players, organized market players. Having said that, quarter two was challenging on two points. Farmers do tend to miss its crate, and there's so much uncertainty in the marketplace because of the extensive weather conditions. As a result, and then some of the products, for example, we were dependent on our third-party supplier. They were able to not secure the permission to sell. All of that is sorted out. I think there was a storm in quarter two, if I can use the more appropriate word, but this would lead to better prospects for organized players like us in the future. Sure. Thanks. That's helpful. Our second question is in terms of the seeds availability for next season. Given that for this quarter, there was an impact generally across the board, are we seeing that for the next, I mean, kharif season, there will be some issues in terms of availability of seeds? If you see from a crop perspective, four crops are more important for us because they constitute bulk of the revenue. One is cotton, followed by maize, rice, and bajra and mustard. I do not see any risk to mustard because there are limited players. Bajra also, I do not see any challenge at this point of time. Most of the challenges are expected in cotton, rice, and maize. Now, cotton, we already had taken sufficient planting. I think we are covered. Maize and rice are getting planted now, right? As we speak, and kharif gets harvested, particularly in the place of Tamil Nadu and part of the reach of Chhattisgarh. Rice gets planted and maize gets primarily produced in Andhra and Telangana. Planting season is progressing. We are working hard. Last year, the challenge was not only with the planting. I think planting happened on time, but everything happened so much on time in a narrow window. When harvest came and all harvests happened at the same time, there was a constraint that was created in drying capacity, and rain led to other challenges. We are tying up the processing capacity, the storage capacity. At the same time, production planning is in place. As I speak, I don't see any risk in cotton. Rice and maize, I think we are planting, and we are taking sufficient measure based on our past experiences to ensure supplies. Thanks a lot and all the best. Thank you. Thank you. Next question comes from the line of Saurabh Jain with HSBC. Please go ahead. Thank you for the opportunity. Again, on the seeds front, there are two headwinds in the cotton side, right? One, we are noticing a consistent decline in the overall cotton acreages in the country. Structurally, does it become a problem for the seed players having a high portfolio to the cotton in our products? Secondly, you also highlighted there is another rising problem of illegal seeds. My question is, these two problems, do you see them as structural, or at least in the midterm, as a major headwind for you? Can that actually restrict the opportunities for you to continue to grow your cotton portfolio the way it has done for the last few years? Yeah. Our cotton dependency is very high on Northern India. Excuse me. Fortunately, illegal cotton has not made inroads into that. To that extent, we are secured because I think about 70%, 80% of the business still comes from North. Now, South and Central, yes, this year there was a setback in terms of cotton planting. How this will pan out in the future, I don't know. Given the rise of illegal HTBt cotton last year, a lot will depend on how well the harvest comes. I think I'll have to wait for really third quarter to get over because that's the time when you start getting more clarity from the farmers whether they were able to secure enough yield from HTBt cotton, what kind of experiences they had. If it turns out to be successful as it was this year, I think it does create challenges for companies operating primarily in South and Central sector, Central part of India. Okay, that is helpful. Part two, also, if we look at the margin profile this quarter, wherever this is, seeds have declined in high double digits. Still, we noticed that there has been an improvement in the margins. Two things. One, can you explain to us what could be the broad margin differences between all of these four products that you do? If you know the margin, can the margin improvement be attributed to your lower margin product not growing in this quarter? Is that the reason, or are there more reasons behind it? Also, have you seen any sales returns even in your seeds portfolio as well? I think for the current kharif season, we have accounted for everything. T`he numbers you see are true kharif numbers. Sales returns are accounted for, discounts are accounted for, manufacturing cost overruns, everything is accounted for. The numbers you see are real. Do not see this as a quarter number. See this as a half-yearly number, kharif season number. On a half-yearly basis, we have seen significant improvement in margin. I think in seed what happens, if you have a portfolio which is coming primarily from your own research, then you tend to make a higher margin. Not every company can research and sell everything. The good news is that in the first half of the year, more than 80% of our business comes from our own research product. As a result, margins are higher. As we move into quarter two and quarter four, which is more rabi season, which is less than 20% of the revenue, that gets skewed towards basically more products coming from the partnership. That's where margin profile tends to get lower. I believe past is behind us. We are a very focused seed company now doing a few things. I believe that we should be able to sustain and grow margins. Our target is that we should bring our seed business to in the range of 23%- 25% in the margin. First half, we are very close. Second, cost there could be slightly dilution because revenue will be smaller than the cost in its same. Revenue will be smaller, but I think they're on track to deliver that kind of margin, which will be on par with the industry best players. Okay. Understood. Just very last bit, can you also give us some sense in terms of the difference between margins of your cotton and maize? I presume it would be more of your in-house products. What could be the margin difference between Badra and all of these other products? Badra tends to be the highest margin product. Cotton, maize, and rice, it would tend to fall in the same bucket because cotton challenges the government price control. Yeah, of course. Yes. Okay. Understood. Thank you so much, and I'll get back in to queue. Yeah. Thank you. Next question comes from the line of Somaya with Avendus Capital. Please go ahead. Mr. Somaya, you are not audible. Can you come a little closer to the mic? Yeah, your voice is not that clear. We have lost the line of Mr. Somaya. We'll take the next. That is Abhijit Akela with Kotak Securities. Please go ahead. Good morning, and thank you so much. On the export business, we've called out 33% growth for this quarter. Would it be possible to also just share the absolute number, the export revenue number in INR gross? Also, if it's possible to share an export growth percentage for the entire first half of the year, that would be great. My understanding is our export has grown by, I think, more than 30% in the first half. Is that right? Yes, yeah, close to that. Yeah, it's about 30% growth over the previous H1. Okay. For the quarter, I think we can assume it ended up at somewhere around INR 190 crore. Would that be a fair number to work with? Let me see. What is the quarter number? Bhaskar, can you check the quarter number? For the quarter, it's INR 161 crore. Oh, I see. I thought last year's corresponding number was about INR 142 crore, if I'm not mistaken, based on last year's disclosures. 33% growth would have implied about INR 190 crore. Now 33%, we are talking on a six-monthly basis, right? Yes. If you look at the absolute number, it is about 24% for the H1 point of view. Right. Yeah, I was referring to the quarter because quarterly it's at 33% growth. Last year's number wouldn't be INR 142. Is INR 142 still accurate, or has there been a change to that number? No. The H1 we have grown, we have from about INR 200 crore last year to about INR 300+. Oh, okay. Yeah, there seems to be some, you know, difference versus what we had reported last year. Maybe I can take it offline. Yeah, you can speak. Yeah, sure. If you can just clarify it just a moment. H1, you know, absolute number is INR 312 crore, okay? This would be more like a 51% growth against last year, which was INR 207 crore at the H1 level. At the H1 level. Yeah, 51% growth. Yeah, on the H1 level. Okay. All right. I'll take it offline in the interest of time. Just one other topic. The way we tell our number is basically export B2B and export. You can actually take offline and get what I told you was more about export. Last year, I don't know what number you take. We were about INR 120, and this is INR 160+. Yes, that's why I said 30% growth. Okay. Got it. Thank you. Just the other thing with regard to the outlook for the second half of the year now, number one, on the export side, has there been any, you know, in your estimation, has there been any front loading, and therefore, could there be some, you know, softness because of that in the second half this year? Conversely, on the domestic business, how do you see the rabi season now shaping up, you know, following whatever has happened before? Thank you. Yeah. Two things can happen. I think there could be some spillover of kharif season, 10%-15%, to October because there could be extended rabi season for some crops. The export, I don't think there's any front loading happening because customers also, after them getting aggressive about the inventory purchase in the past, I think customers also have become very cautious. I think what we should watch out is if the U.S. market remains restricted, effort from a Chinese player to take the product more to the Brazilian market, and the Brazilian market has its own limits and commodity prices are soft. As a result, while volumes might go, there might be some pricing pressure. Okay, understood. Thank you. I'll come back in the future. Yeah. On domestic, I would say one is extended the kharif season, and then normally residual moisture leads to a better rabi crop. If this situation continues, I'm expecting rabi prospects look slightly better at this point of time. I know there are challenges in terms of fertilizer supply. Fertilizer is the shortage. A lot of capital goes towards securing fertilizer first, and then the pesticide companies and seed companies take a backfill. I believe once this planting happens, fertilizer issue gets resolved, farmers would shift their focus to crop protection. Understood. Thank you so much, and all the best. Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Prashant Biyani with Elara Capital. Please go ahead. Thank you for the opportunity. Sir, this quarter, branded business seems to have declined by 10%. One would assume that margins would contract, but you rather delivered a margin expansion at gross level. Is it because of product mix change in branded business, or is it that lower sales of non-profitable products like [Actifate] in B2B business led to this? Yeah. I would say, I mean, the overall decline in crop protection in Q2 you're referring to, right? From a GC perspective, I would say domestic is a combination of price and, in fact, we probably would have done overall basis. We can look at it. We might have done better on the volume because I guess what has happened is a tendency in the market to reduce the price and offer more schemes so that, you know, as a result, retailers and distributors are able to pass on some benefit to the farmers. A lot of promotional campaigns done. I would say from that perspective, it could be just, you know, price getting impacted more than the volume. Okay. Sir, on seed side, you have mentioned in one of the questions that we have taken sufficient planting in cotton. That should yield to how much of growth in seed sales or at least seed available for sale in next kharif? Based on our target, we expect our generally launched cotton hybrid to keep doing well. We have planned for a significant volume expansion. You have to understand cotton seed production is still in the field, right? It will all start coming now from quarter three onward to our warehouse, and it has to go through what we call quality testing. I would say we have planned for sufficient expansion, significant expansion of our cotton business. I cannot put a finger on volume now. Maybe towards the end of quarter three, we will have more clarity on how much comes in and how much it passes the quality test. Okay. Actually, sir, the only thing was that the year before last, we had seed sales impact because of cyclones and all. Now this season, I thought the expectation, I thought that we would have ample seeds available. Now. The cotton does not get impacted by the cyclone, right? Cotton is already in the field. It gets planted in kharif. The cyclone has impact on rice, maize, and other crops. Okay. We have got good products in artificial diggers. In your view, what would be the optimum top-line level if we can take it to take full advantage of those seeds before a competitor comes in with a better variety? I think we probably have only harnessed 50%- 60% of the potential of the product. There's still a lot of unwell health. Right. Okay, sir. Thank you so much for your time. Yeah. Thank you. A reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Somaiah V with Avendus Spark. Please go ahead. Thank you for the opportunity, sir. My first question is on the export business. If you could give some color in terms of volume growth during the quarter, pricing, and also you did mention about entering into newer geographies, a ballpark, how all these three kind of contribute to the overall growth? On a half-yearly basis, if you see, I think bulk of the gains have come from 85%, 90% have come from volume and some from efficiencies and price. Yeah. When it comes to volumes in the existing geographies, is yours more or less from existing geographies? I just wanted to understand the newer geographies that we are getting into. How much are we in the market? Yes. For the current product, I would say bulk of our business still comes from existing geographies, but we have been able to add new customers in the same geographies. There is some growth in newer geographies, but I think those are early supplies. We have to build on those businesses. I would say bulk of it is existing geography, more customers. Got it, sir. When it comes to the tariff impact, any ballpark in terms of our total exports, what would be the quantum that we'd be exposed to with higher tariffs? How is it getting approached in terms of, you know, are we able to take commensurate price size, or we have to absorb it? How is it getting? As I said, we naturally have come from volume, right? A small percentage has come from price. We are in a very competitive market. On a continuous basis, we are competing with basically Chinese players and domestic players. Our U.S., Brazil, China, Bangladesh, these are our primary markets. We have added some countries like France, Malaysia, and Spain also to our portfolio this year. Yeah, please. I was just trying to understand on the tariff impact for our set of products. I mean, in our overall, it's so large. U.S. is our primary business, right? Now, U.S. has tariff challenges, but fortunately for us, 85% of our business is technical supply that is not impacted by tariffs as of now. Only 15% of export business is impacted by tariff because it is formulation-based, right? I think to that extent, we are secured. Got it. It has a secondary effect on Brazil because when people are not able to supply to the U.S., they tend to go to the second largest market, which is Brazil. Got it, sir. In the domestic market, in the quarter, in terms of the extent of volume versus pricing, was there any negative pricing impact also? Generally, how is the pricing then for the industry, especially with this prolonged rainfall impacting two of the pockets? In terms of sales return, is this something that's done with this quarter, or is this something that can extend into next quarter as well? I think now we do have a fairly robust process of what we call building bottom-up stock-taking from distributors, distributors in turn take feedback from retailers. I think we have sufficient provision and taken returns. What we have not taken return is for the residual part of the crop. I would say by and large covered under something untoward we experience. Yeah, that's more on the domestic pricing versus volume impact during the quarter, sir. As I said earlier, pricing has been challenging because when there's enough supply in the market, what every company in the industry does, and we also have to do to be online with the market situation, is you tend to float more schemes, more to pellet money. You tend to float more schemes to push the product to the tailored level. That also, when it gets passed on to the farmer part, farmers are also encouraged to use the product. I guess it depends on the product. By and large, I would say pricing probably will remain subdued for the sector. If somebody has got a specialty product, a unique product, that might be a special situation. We have a 10% odd decline right away in the domestic this quarter. Would be like low single-digit kind of a pricing impact is something that is there, and that number is the right way to think about it? Yeah, bulk of it is pricing. There's some volume as well. Got it, sir. One last question, sir, on the Soil and Plant Health portfolio, what would be a quantum within our overall domestic portfolio? The share of this part of the. On an annual basis, last year we did about INR 225 crore. This year, on a half-yearly basis, we are flat. We were planning for actually 20% growth. We are flat in terms of revenue. The majority of the impact has come from roots. The biosupplementer business we have actually also has when there are too much challenges because the process to make biosupplementer is also called open field system. When too much rain, it becomes difficult to process too much biosupply. The other is biostimulant area which got impacted. That's the price. On the growth side, the supply side on the growth product where regulations were not challenging because of excess rain supply of the government will begin a challenge. On the biostimulant, it was primarily change in government regulation. I think most of the issues are sorted for us, and we expect no recovery of the normal business from here on. Thank you, sir. Also, in terms of margin profile, if you have to put the three segments, the crop care, seeds, and bio, bio probably would be higher in terms of margin profile. Bio followed by seeds or the crop care, which I'm right taking. If you have to take that, I think Soil and Plant Health obviously contributes higher margin, GC margin, followed by seed, you're right. Even on CSM, though it's a small business, margin higher. Where we have margin challenges are really export business where it's very competitive, even our domestic institutional business. Part of the product we sell also selected domestic suppliers, those domestic companies. That's where most of the challenges are. Our domestic B2C business actually, on an overall basis, because of the better cost management model and better solar management, that's one marginal improvement from a GC perspective. Thank you, sir. This is quite helpful. Thank you. Next question comes from the line of Pavan Kaware with Nayan M Vala Securities. Please go ahead. Hi. Thank you for the opportunity. I'm audible? Yeah. My question was on CSM part. Last year, what were the CSM numbers in our export and this half year and half year basis? What was the growth in the CSM business? The CSM business, if you see on an H1 basis, actually has shown some degrowth, but I believe a lot of it is also related to timing of the customers. One of our key products is used in making airplanes and all, you know, with Boeing facing challenges, I think now there's some resettling of order. The CSM customer, I think, is more of a timing issue than anything else. Okay, I wanted to. Yeah. Yeah, you can. Yeah, our CSM margins continue to remain intact. Okay. Our CSM business is mostly focused on the export or do we provide at domestic level? It's a combination, primarily export, but we do have, in fact, one or two customers we have added to our CSM portfolio domestically. Okay. Out of the number of INR 312 crore in the H1, what was the contribution from CSM? CSM, I said this H1 was relatively small. In fact, the majority of the business has come from export of technicals and domestic institutional business. CSM is relatively small this time. Any estimate or percentage number? Actually, less than 5%. Okay, thank you. I'm happy to be able to return to queue. Thank you. Okay. Thank you. Next question comes from the line of Sakit with Kapoor & Company. Please go ahead. Yeah. Namaskar, sir. I'm audible? Namaskar. Yes. Sir, firstly, coming to the sales returns, what have you factored in for this first half, and how should this keep continuing for the remaining part? I think you did allude to it. Secondly, sir, with the delays in the rains and that affecting the crop protection business, how should the current and spring quarter look? Generally, this is a weak quarter, seasonally weak quarter for us and the industry. If you could give some color on the export. Generally, when there are late rains and a lot of residual moisture, we call it primarily rabi season. Other than chili crop, which anyway was planted less, looks better compared to previous years. As far as no returns are concerned, I think we have methodology and we have created sufficient return reserve provisioning. Hopefully, we should not get into significant negative or positive surprises in those years. Seasonally, and if we compare it on the last year basis, these were not the factors for Q2. Taking into account Q3, on a prospect basis, with the moisture in the system, in the soil, should be comparatively better in terms of the uptake also for, as you said, the groundwork for rabi begins early. That should be a fair understanding for. Absolutely. Planting should be good. I think right now there's a scrambling for fertilizer and all. I think once that settles, there's a convention of herbicide in primarily Southern India rice as well as maize in the south and eastern part of the country and deep in the northern part of the country. Then vegetable insecticide and fungicide season should kick in, minus chili. Chili has been a bit disappointing because of the low commodity prices. Overall, we are positive about quarter three and quarter four. If you could just give your take on the shortage of fertilizers and the real aspect of how that has affected the agriculture industry as a whole, because when we hear and we read about the yield part, in all cases, everywhere the acreages have gone up and at least the newspapers are pointing towards higher yields. Correct me there. What has exactly played out for the shortage of fertilizer and what's the corrective steps are there in the ML that will correct the situation going ahead and thereby revising the ML? Let's split the business into kharif and rabi. In kharif, the overall area went up, but based on what I'm hearing, an estimate is that while area has gone up, overall production may not go up because a lot of it got damaged because of weather conditions and various other things. When area goes up, obviously fertilizer also goes up. As far as rabi, demand is slightly higher right now because there's an anticipation of area increase, and that's why prices are up. That does not always mean higher area. Production overall might go up, but productivity and production are two different things. I think this year what you will see is a kharif season productivity drop. Now, rabi is a relatively more secured season because rains are more certain or they're not as vigorous. These are not related eventually to fertilizer shortage to increase our production or decrease in production. There's a challenge at the time of planting, but as the season progresses, you'll also see the situation eases a little bit. Sir, just to get on the fertilizer shortage part, what is the take of the industries on the sectors? Is it only the subsidy part and the culture is residual, or what has led exactly to fertilizer shortage, which we have not heard for a very long time? If your take on the same, sir. I actually do not get into details of why shortage is there. Obviously, India, for some certain products, has to import and sell, so there could be challenges on those fronts. Our urea capacity also has peaked, so there might be import requirements, and there could be challenges related to that. When there's a shortage of fertilizer, a lot of market money, which would come to pesticide and seed companies, tends to go to fertilizer players first. That puts challenges on the receivables of the pesticide and seed companies. In fact, when there's too much of fertilizer noise, it's bad news for pesticide sectors from a receivable perspective and your ability to place the product because you want some money before you place the product, but these shortages create some kind of imbalance in terms of movement of the money to different components of the business. Right. Lastly, sir, on the R&D part, what are the key highlights for the first half in the R&D, and what are we anticipating? What should be expected going ahead in the R&D in terms of any of the molecules getting second off and we developing the same? What's the take for the R&D? Yeah. I think one of the things we did, and I talked about in previous calls, is that we have got R&D very focused now. A lot of things we were doing, we have stopped, right? For example, we don't do any vegetable R&D now. We are less focusing on GM crops now. We are focusing more on modern breeding tools, which are biotechnology-driven, but are not GM crops. In fact, the progress we are seeing in the seed side is a lot of it is driven from focus. The same applies to, you know, crop protection side of the R&D. I think as things unfold, I think towards the end of this year or early next year, we would be able to, you know, probably give a more comprehensive summary of the progress we have made. I'm very pleased with the resistance we are securing. We should be launching a wheat herbicide, a rice herbicide next year, which will be completely lime free. That can be progressive. Okay. Can you quantify, sir, how much have we spent on the R&D and what is anticipated? What can we advertise for the remaining part of the year? I don't have an exact number. Bhaskar, you can give, but our R&D budget ranges from INR 60 crore-INR 70 crore per year. I think what we're trying to do, not trying to cut on R&D, but trying to get in more focus. Do you have separate cuts for R&D, Bhaskar? Yes, it's about INR 60 crore-INR 70 crore. Yeah. Thank you, sir. All the best and should be public to the entire team. Thank you. Same to you. Thank you. Next question comes from the line of Riju Dalui with Antique Stock Broking. Please go ahead. Hi, sir. Thanks for the opportunity. Hope I'm audible. Yeah. In H1, we have, like in this Q3, we have registered crashing 10% of declines in our overall growth in domestic business. As far as your understanding, how was the industry growth for this quarter or maybe for the H1? It's too early to comment because a lot of numbers are yet to come. Based on what I hear, that industry is not likely to grow beyond low to mid-single digit. Understood. When we are talking to some of the channel partners, we understood exactly there was some decline in the volumes across key regions, maybe Maharashtra and other parts of maybe Punjab. There was a decline in terms of volume for 10%- 15%. Is that a correct understanding? Yeah, right. Also, some of, so not across the Punjab, certain pockets in Punjab. Okay, can you say that the industry for H1 could be around - 5% to + 5% kind of a growth trajectory? Companies could be in that range, right? I think industries would grow low to mid-single digit in my view. Understood, sir. Companies with the seed in the portfolio get some cushion because seed business has done overall bad. Got it, sir. In terms of excessive rainfall and rainfall till the first week of October or maybe late September, how do you see the rabi season and the field preparation will happen and the rabi season will be good? You have commented that excess rainfall always follows by a good rabi season. For field preparation and the early sowing for the rabi, how will that happen in areas where we have seen crop damage or field damage, maybe eastern part of Maharashtra or maybe Rajasthan, Punjab, like this part? How do you see that scenario? Farmers are very, you know, optimistic people, right? Even if they have a bad kharif, they'll still go ahead and have a rabi because this residual moisture only factors in central and southern part of India and western part of India. East and north anyway has a lot of groundwater, so it doesn't impact them. My personal view is that larger planting of pulses and some more rice in the south and eastern part of the country should help in basically higher rabi planting and higher input usage. I think probably by mid of November, we'll have more clarity because that's when the majority of the crops get planted. Normal thumb rule would say late rains contribute positively to the rabi prospects. Understood, sir. Understood. Like as you mentioned that we are in this kharif season, there was an extended kharif season maybe till October. Was there any kind of case chat happening between this period, maybe last one month period? This year, disease has been more prevalent than insects. A lot of insects actually got washed away by heavy rains also, right? I think the crops which are left for spring are mainly southern rice that gets planted late and some cotton in south. As far as north is concerned, everything is over. Soybean is over, north cotton is over, rice is over, millets are over. North and east primarily is down. Thank you. Mr. Dali, please reach out in the queue for more questions. Next question comes from the line of [Virat Jukhe] with SEC Investment Management. Please go ahead. Yeah, thanks for the opportunity. Just two questions. One is on the plant nutrition, the regulation. Sorry, I missed that. Is there any resolution to that? Do we see impact continuing for Q3 and the rest of the year? Should one understand this? For our business, I think we have sorted now, right? We had a challenge with the amount of products, but we have found a solution to those with the help of partners. I believe the long-term here on business to normalize. Okay. For the industry, you know, because there's a lot of re-aggregation required and maybe weeding out unorganized players, just trying to understand because of the share of those unorganized or, you know, not so players not adhering to quality standards, what would be the share if I have to look at the overall pie of the market? I exactly don't know volume and revenue share of our unorganized people, but there are too many players, right? I think the number of players would certainly reduce. I believe in this development of trying to regulate the market better, it brings more clarity for an organized company like ours. I see this segment, we continue to look at very positively from here on. The second question is on the export piece. I think what you said is technical export is more viable and competitive, especially to the U.S. with various formulations. Can you explain how does the price and cost dynamics compare if someone's formulating in the U.S. versus someone, say, formulating from China or India and exporting? I think the value addition part cost probably China would always be more efficient because of their cost of capital, their scale, and all. At the same time, we should not forget that there's an increasing demand from companies operating in those markets to look at alternate sources. Given the geopolitical situation, I think all companies at the same time would look for diversifying their supplier basket. While one thing is negative, we also have to see the positive side. The positive side is, I think, while it may not have benefited in the short term, from a long-term perspective, you know, suppliers are looking for alternate sources like India. I think it's still August 12th as a business. No, I understand the diversification piece, but I was just trying to understand, is it still viable or competitive for anyone formulating in the U.S. and sourcing the AI from India or China? Or is it still economically, even post-carrot, for someone to do import of formulations from India or China? There is no straight answer. For example, if you go in the southern hemisphere, there are some formulation capabilities beyond the U.S. in Colombia, Brazil, some in Mexico. Depending on the source registration, some companies can take the technical to their facility in Mexico. If Mexico is exempted, they can still sell very competitively to the U.S. It depends on the product and registration status. There is no general answer. Last question, second, please. In the U.S., because of everything with tariff and trade war, what do you see for certain large product segments like, say, soybean or maybe corn? There's an increasing pressure on commercial farmers in those regions, right? Are you seeing incrementally any softening in the demand from those pockets or region? I think given that channel inventory is normalized, I do not see pressure in the demand. I only see pressure on prices. Thank you very much. Thank you. Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session. On behalf of Rallis India Limited, that concludes this conference. Thank you for joining us. We may now disconnect the lines. Thank you, everybody, for joining. Happy Diwali and festive greetings to everyone. Thank you, everyone.