Ladies and gentlemen, good day, and welcome to the Q3 FY 2022 earnings conference call of Sharda Cropchem Limited hosted by Antique Stockbroking. As a reminder, all participant lines will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stockbroking. Thank you, and over to you, sir. Thank you, Steven. On behalf of Antique Stockbroking, I would like to welcome all the participants on the call of Sharda Cropchem. From the management, we have Mr. RV Bubna, Chairman and Managing Director, Mr. Ashok Vashisht, CFO, and Mr. Dinesh Nahar, GM Finance on the call. Without further ado, I would like to hand over the call to Mr. Bubna for opening remarks, post which we will open the floor for Q&A. Thank you and over to you, Bubna. Thank you, Manish. Good day, ladies and gentlemen. A very warm welcome to everyone present here for the earnings call of Sharda Cropchem Limited for Q3 FY 2022. Sharda Cropchem is represented by myself, Ramprakash Bubna, Chairman and Managing Director, our Chief Financial Officer, Mr. Ashok Vashisht, and Mr. Dinesh Nahar, General Manager, Finance. Talking briefly about our Q3 FY 2022 results. Revenues grew by 78.2% year-over-year from INR 494 crores in Q3 FY 2021 to INR 880 crores in Q3 FY 2022, led by strong volume growth across geographies and better product mix and price realization. Europe grew by 124%, NAFTA grew by 76%, LATAM grew by 18%, and rest of the world by 19%. During Q3 FY 2022, agrochemicals to non-agrochemical mix stood at 82% versus 18%. Agrochemical business grew by 80% year-on-year. Europe grew by 124% year-on-year. NAFTA grew by 82%. LATAM grew by 27% year-on-year. Rest of the world grew by 5%. Formulation and active mix stood at 94% versus 6% in Q3 FY 2022. Non-agricultural business grew by 71% year-on-year during Q3 FY 2022. NAFTA grew by 52%, Europe grew by 127%, rest of the world grew by 80%, and LATAM grew by 36%. The company continues to strengthen its product portfolio by prudently investing in new product registrations. Sharda Cropchem's total product registrations stood at 2,645 on 31st December 2021. Additionally, 1,099 applications of the product registrations globally are at different stages of approval. The CapEx stood at INR 203 crore as on 31st December 2022 versus INR 170 crore in the same period last financial year. With this brief overview, I would now like to hand over the call to our CFO, Mr. Ashok Vashisht, for discussing our financial performances. Thank you, Mr. Bubna. Good evening, everyone on the call, and thank you for attending the call. I'm pleased to give you a brief on the Q3 FY 2022 financial performance. During the Q3 FY 2022, our revenue surged by 78.2%, which was mainly driven by strong volume growth of 50.9%, favorable price and product mix contributing 26.5%, coupled with exchange gain of 0.8% during the quarter. On year-to-date basis, that's for nine months, revenue grew by 64.1%, so we reached INR 2,145 crore in FY 2022 from INR 1,308 crore last year, same nine months. Gross profit for the quarter grew by 75% from INR 171 crore in quarter three FY 2021 to INR 298 crore in quarter three FY 2022. Gross margin slightly reduced to 23.9% in quarter three FY 2022, mainly because of slightly high freight costs. On geographical mix, Europe region was the highest contributor during the quarter three, followed by NAFTA and RoW. In terms of year-to-date, gross profit grew by 57.8% from INR 490 crore last year, nine months, to INR 6,661 crore in nine months, FY 2022. EBITDA registered a very strong growth of 97.1% for the quarter. We recorded EBITDA of INR 201 crore in quarter three, FY 2022, and the EBITDA for the nine months ending 31st December 2021 was INR 102 crore, so thereby growth of 27.1%. The EBITDA margin expansion was by 222 BPS, and we reached to 22.8% in quarter three, FY 2022, mainly driven by economies of scale, effective cost management, and which was marginally traded off by the higher freight cost. Year- to- date EBITDA grew by very impressive numbers, by 96.6%, from INR 209 crore in nine months of FY 2021 to INR 411 crore YTD, 31st December, FY 2022. Profit after tax grew by 112% from INR 48 crore in Q3 FY 2021 to INR 102 crore in Q3 FY 2022. Thereby a growth of 112% on quarter-on-quarter basis. Year-to-date profit after tax, that's for the nine months, grew by 80.8% from INR 95 crore in FY 2021 for nine months to INR 172 crore in FY 2022 on year-to-date basis. Cash profit stood at INR 161 crore as compared to INR 89 crore in quarter three last year. We continue to focus on working capital efficiencies and net working capital in terms of number of days stood at 72 days as at 31st December 2022. Thank you very much again for being on the call. We now open the floor for the questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tarang from Old Bridge Capital. Please go ahead. Hello, sir. Good evening, and congratulations for extremely strong set of numbers. I have three questions. Number one, sir, you know, if you could give us some sense on different components of CapEx for a registration in terms of costing. Say, for instance, when you are you know, incurring CapEx for a registration, how much would it cost to get the bioequivalence studies? How much would you know, registration take, and what are the other components? Typically, the time it takes to you know, get a registration up and running. Hello? Are you finished with your question, Mr. Tarang? Yes, sir. I have two more, so I'll just. Okay. I'll just finish them as well. Also, while you're at it, you know, if you could, within the geographies that you operate, some sense on the timing differences of getting the registration approved across geographies and the cost differential. Like which is the most expensive? How much would it be versus some other geography that you would typically get a registration done? And third, if I see your presentation, you've spoken about, you know, penetrating deeper into certain markets by deploying your own field force. So, what's the thought process behind it? Or, you know, what is the incremental sort of spread that you get on realization by doing that? And what are the strategic advantages that the business gets by doing that? Because I would presume it would also involve front loading of lot of costs on your P&L. Yeah, three questions from me, sir. Okay. Mr. Tarang, I'll answer your questions one by one, but the question has been very long, so maybe I forget it on the way. First was, the components of CapEx. Yes, sir. Now, this is something if you have been tracking the agrochemical companies and the registration costs, this is absolutely undefinable. It depends from product to product, country to country, and even within the same country, depends upon lot of bureaucratic processes, so it is endless. I mean, sometimes one registration may take three years and another product in the same country or same geography may take six years or seven years. That is very difficult to give you these components of CapEx. What was your second question, Mr. Tarang? Actually, it was something which is sort of. Sir, typically which geography would be the most expensive, say, if you were to get same registration done, which geography would it be more expensive than the other, the most expensive? In terms of timing, how much time would it take in? Which geography commands the most or is most stringent when it comes to the timeline for getting the registrations? The answer to both the questions is Europe, both in terms of expense and timelines. Sometimes the product you register in Europe may cost you EUR 4 million, EUR 5 million, or EUR 6 million, and the time can go as high as eight to nine years. That will be How many million euros? EUR 2 million-EUR 3 million, and get the registration in two, three or four years. Okay. That'll be homogeneous across all of Europe? Pardon me. That would be pervasive across all the countries in Europe? No, sir. The first registration. In all the countries in Europe, we go step by step. We receive registration in one country first and then expand our base to the second, third and fourth countries. Here also, the lab results and the active ingredient is approved by one country, which is nominated by the European Union for every product. So that country first evaluates the equivalence of our product with the original product. After having received the approval and registration of the active ingredient, then we apply for the formulated product. The formulated product has to be approved by each country individually. Okay. Got it. The third step is the number of crops. I mean, we get the approval for one crop and then slowly expand to other crops for which the same product is applicable. It's a very continuous process, long-term process, and very expensive. It needs a lot of patience. Got it. Sir, you spoke about, you know, deploying additional workforce on the ground in certain markets, which my sense is maybe getting closer to the farmers than you already are. What kind of additional realization would this involve? I mean, I'm pretty sure your margins would be a lot better for you to probably do this. What kind of impact could we see in your P&L as you start deploying the strategy? Mr. Tarang, most of our products are sold to the distributors, not to the direct farmers as far as we are concerned. The products go from distributors to the retailers and sometimes directly to the farmers. The only contact we have directly with the farmers are some cooperatives who buy in a bulk way and then distribute to their members. We put people on the ground, field force on the ground only to get the feedback about the usefulness of the product, performance of the product and demands and things like that. The dealing are done with the distributors. Okay. Because the presentation said forward integration build own sales force, that is again would be restricted to the distributors, correct? Yes, sir. Okay. That's it from me. Thank you. Thank you. Before we take the next question, a reminder to the participants, please limit your questions to two per participant. Should you have any follow-up, may we request you to rejoin the queue. The next question is from the line of Pujan Shah from Akash Ganga Investments. Please go ahead. Hello. Am I audible? Yes, please. What is your name? I didn't understand your name properly. Pujan Shah. Pujan? Yes. Okay. Sir, my first question would be on this, we have great growth in this agro business. can you just give us a brief outlook why about this type of such a type of growth? would it be sustainable for, you can say, for next four to five years? are we getting traction from these new products which we have registered or it is been getting traction from our old products only, old product portfolio? Mr. Pujan, it is both. Getting traction from the old products as well as the new products. New products takes little extra time to establish, to find the acceptability in the market. The old products who have been already established and accepted by the market, farmers and the consumers. It also depends upon the weather, many other factors to get the traction. Okay, sir. Sir, on the industry outlook, if you can give some broad guidelines. Beg your pardon? Industry outlook for agro business, like, will it be sustainable or you can say this would be a sort of three to four times event which we are seeing from China plus one or any sort of a thing? Can you just give broad outlook on industry? Sir, the industry outlook is very good and positive. As you know, the population of the world is increasing and the number of people who need food is continuously increasing, and so is the demand for agricultural commodities and agrochemicals. We are in this business for almost more than 25 years, and we are seeing that the global volume of agrochemical demand has increased from about $45 billion to around $70 billion now, and it is continuously increasing. The outlook is positive. Okay, sir. My last question would be, are we focusing right now on new geographies or we are focusing on this, our previous geographies only, and we have been concentrating over there. Can you just give some broad idea on that? See, Mr. Pujan, we have been dealing with most of the geographies for the last many years, but now we are concentrating on enlarging our portfolio for each geography. Okay, sir. Got it. Thank you, sir. Yes. Thank you. The next question is from the line of Dhaval Shah from Svan Investments. Please go ahead. Hello. Hello, sir. Congratulations on great numbers, sir. Sir, I have a couple of questions. First to start with, sir, if you look at our long-term sales growth, it has been in high double digit, but something has really changed for the company in the last four, five quarters. If you could elaborate, is it, you know, has our distributor switched a supplier, you know, and chosen our company to buy, procure more? Or have we added, you know, expanded our market? What has really changed, which is giving us such, you know, high growth rates and along with good margins? Secondly, we've been procuring from China, and we hear different stories in the last 6-8 months regarding the cost pressure and the supply bottleneck what China is having. Our company seems to be, you know, quite resilient from all those problems. Can you give us some understanding what exactly, you know, what has changed for us in the last four, five quarters? And what sort of growth do you foresee going forward? Thank you. Mr. Dhaval. Yeah. You are talking of last four, five quarters. These four, five quarters have been very unique. Yes. We have passed through such a big crisis, such a big hassles and so many difficulties. We have been really prudent and in choosing our strategy. We have been able to choose right products and right quantities in spite of increase in the prices, foreseeing that at the end of the day, the world will have to be paying those high prices, you know. So many of these strategies and our direct communication and contact with the markets has helped us in planning these strategies. I think they will be sustainable. This growth rate, what will be the normalized growth rate you think is sustainable? See, growth depends upon many factors. The number of products and portfolio is one of the important factor, but it also depends upon the climatic conditions, the sort of sowing patterns of the crops and various agri commodities. I feel that the growth rate will continue very positively. Oh, that's a great, good statement. Thank you. Sir, but have you won any higher volume share from a distributor, in terms of, you know, they have switched to us? Because, you know, whatever be the product mix or whatever be the, you know, the price increase, such high 70%, 60% kind of growth, I'm unable to understand where, you know, where are we getting that growth from? Or, you know, did we have a, some exclusivity for some product in some geography in there? If you can little bit elaborate. Sir, we don't believe in exclusivity, and we don't like to be exclusive to any distributor for any product as far as we can help. Because at the end of the day, one distributor will be able to cover a limited geography in his territory, and not a big way. I think the biggest factor that has helped us is some sort of, I mean, our better position compared to our competitors. We find when the competitors or distributors ask for some products and we try to give him a higher price, he immediately grabs it, which means that the competition has not been able to provide him, and that is a factor that has helped us a lot. Okay. Did we go and book some large quantities with our, from where we are procuring, and because of the supply bottlenecks, we were ready with the product and, meet the demand? Has that helped us? Yeah, something like that. The path has not been so easy. It's very difficult. The biggest problem that we are seeing is in the logistics and the freight and delivery of the cargo. Can you believe sometimes our ship has to wait four to six weeks? Correct. At the destination ports after it reaches the port? To find a berth on the port, sometimes it takes him four to five weeks. Correct. Correct. This is totally unimaginable and unexpected. Okay. Clearing the cargo and taking to the consumer may take another two, three, four weeks. We have been able to very, sort of, I won't say, sir, work smartly, but we've been able to perform better on these fronts compared to competition. Okay. More efficient. Got it. sir- Sir, sorry to interrupt, but for any follow-up may we request you to rejoin the queue, please. Yeah. Thank you. Before we take the next question, a reminder to the participants, please limit your questions to two per participant. For any follow-up, may we request you to rejoin the queue. The next question is from the line of Saumya V from Spark Capital. Please go ahead. Thanks for the opportunity, sir. My first question is with regards to the volume breakup that you can really give across geographies and the gross margin breakup across geographies. One moment. I'll give you the volume breakup first. In Europe, the volume was 4.35 million kg. Yeah, INR 43 lakh 58,000 kg. NAFTA, INR 32 lakh kg. Latin America, INR 7.7 lakh kg. Rest of the world, INR 10 lakh kg. Totally about INR 95 lakh kg. What was the next question? The geography-wise gross margin breakup. Geography-wise gross margin. Europe, the gross margin was in the range of 36%. NAFTA, 37%. Latin America, 14%. Rest of the world, 23%. Overall, 34%. Thank you, sir. That's helpful. The second question is with respect to the raw material sourcing cost. Are you seeing any slowdown, if any, you know, from China, from the peak that you saw last year, or it's still continuing to remain at the same level? We have a feeling that, from this year onwards, starting from 2022, there is an easing of the situation, in terms of availability of the product and sustainability of the prices. Prices may be slightly declining. Got it, sir. I'll join back the queue. Thank you. Yeah. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead. Good evening, Bubna-ji. Sir, all is well. Thank you very much for the call. Yes, sir. Yeah. All is well. Thank you. Just to understand your perspective on the outlook for the coming rabi and how you see the impact of the high input prices affecting the volume of sales of crop protection chemicals. Because in the U.S. there's a concern that the high input costs may result in some slowdown in farmer spending. What is your view on the potential for growth in volume terms for the crop protection chemical industry for the next one year? I feel that there will be some growth in the demand of these products for the crop, for the crop protection. The agricultural yield will improve and the consumption of agrochemicals will also go up. You are not unduly worried about the current high cost of inputs impacting the farmer income and, you know, forcing them to reduce acreage or planted area? Mr. Ramesh, I feel the worst is over. Fair enough. We are on the path for a little bit more comfort, so comfort zone than what we have seen in the year 2021 and 2020. Fair enough. Thank you very much. Wish you all the best. Thank you. The next question is from the line of Bharat Gupta from Edelweiss. Please go ahead. Hi, Bubna-ji. Good evening. Thanks for taking my question. Just for confirmation, like in terms of our revenue splits, so what would have been the contribution coming out from the volume growth in the higher realization? In Q3 this year, the volume, the contribution by the volume impact is over 51%. For the entire three quarters ending 31st December, the volume impact has been 53%. Right, sir. Sir, in terms of the realization, so what has been the realization that gave during this quarter? realization. I've not understood the question, sir. How much pricing increase you have taken during this quarter, sir? Pricing increase? Mm-hmm. Yeah. Yeah, pricing in this quarter has been 26.5%. Right, sir. Also just to get a sense, because it's been a high realization, like we have taken a decent amount of pricing increase, that is eventually reflecting in our numbers as well. Is it primarily because MNCs have also passed it across to the end customers, taking into account the higher commodity prices which are there in the global markets? It could be. It could be like, that is one of the factors. Right, sir. Simultaneously the amount of equivalent, like the percentage hike has been comparative as per what MNCs have taken. Is my understanding correct? No. I mean, I'm not able to comment on that because it's very difficult to understand the strategies of MNCs. They make it more complicated by giving a higher amount in the price list and then giving discounts or incentives behind the back end. Right, sir. I guess that must have been one of the factors. Sir, also, if I look at the gross margin profile, so there has been a decent amount of jump if I look at the NAFTA margins or the North America margins. Can you give us a brief on what has been the key contributors behind such a spike in the gross margins if I see from that region? I think one of the main important factor is availability of the products on the part of our competitors. Inventory situation is, has dried up out there in the North American markets? Yes, sir. Is that one of the reasons? Yes, it is. Okay, sir. That's it from my side, sir. Thank you so much. Thank you. Thank you. The next question is from the line of Siddharth Gadekar from Equirus. Please go ahead. Hello. Hello. I have one question. One is regarding, if you look at the active ingredient even from China, YoY, if I compare for Q3 FY 2022 versus Q3 FY 2021, it broadly appears that prices have increased anywhere between 30%-300% YoY. In terms of that, did we face any challenges in sourcing our active ingredients from China? One. Secondly, have we taken the entire price hike in this quarter, or there could be some more price hikes which could reflect in the fourth quarter? No, I think we've taken the effect of the price rise in the third quarter. Fourth quarter, we have still to see how the price rise or prices behave. We have to follow the trends in the market. Okay. There was no major inventory gain that we were carrying some low cost inventory, because of that we have seen this kind of a margin increase. Is that understanding right? I would say marginal advantage of the price rise in the inventory. Okay, got it. Got it. Yes. Thank you. The next question is from the line of Rohit Nagaraj from Emkay Global. Please go ahead. Yeah. Thanks for the opportunity and congrats on very good set of numbers. The first question is in terms of the logistics and freight cost, you indicated that in Q3 also we had seen some pressure. Coming into Q4, how are we seeing the situation? Has there been any alleviation in the freight as well as logistic cost? Given that, for the next couple of months, how are we seeing those rates? Probably we would have booked shipments from China to other geographies. Thank you. Mr. Nagaraj, the trend continues to be there, but the encouraging thing to be seen is that there's no further increase in the freight. Slightly there's a small softening of the freight rates as well as availability of the shipping space. They are still very painful, very heavy, but I see the trend is slightly easing out. Right, sir. Got it. Sir, the second question is, you indicated just for a particular participant that on China availability of materials is it is relatively easing out as far as 2022 is concerned. Given this case, would there be some pressure on us in terms of volume growth? Given that for the first nine months we have grown because probably the competition was having a relatively lesser amount of stocks or inventory, and we were better positioned in terms of materials. Would that impact say FY 2023 volume growth for us? Thank you. It will not impact adversely, Mr. Nagaraj. We feel it may impact positively. Fair enough, sir. That's really helpful. Thank you so much, and best of luck. Thank you. Thank you. The next question is from the line of Dhruv from HDFC AMC. Please go ahead. Thank you so much. Congratulations, sir. Very good set of numbers. First question is a bit repetition of the earlier one. Sir, in the last few calls and this call you have mentioned that the disruption from China and the freight issue has benefited us because we have been more agile versus probably the competitors. Sir, you also mentioned that this is now easing, freight is also not increasing further, and China is improving. Sir, still you don't see a risk to the existing sales or the growth forecast. What's driving this, sir, if you can help us, probably confidence in terms of the stability of sales growth? Mr. Dhruv, it's partly my hunch, my confidence in you. I do not know if the competitors will be able to take immediate advantage of the easing of situation. We feel that we are feeling more at peace than the things have been there in the past. It seems basically the distributors which were buying from you have now, which were probably buying from others have shifted to you, and that is why because in the earlier call you mentioned the number of distributors as such have not increased significantly. It is the existing distributors buying more from you. Do you see the shift to you by the distributors as more permanent and they will continue to buy more from you because of some underlying change which has happened in the market? Sir, I have not said that the number of distributors has not been increasing. No, I mean, not significantly. The number of distributors also. If, I mean, I think there's a small misunderstanding here. The distributors are finding our service much better to suit their requirements and they are patronizing us. That's the only thing I can say. All right. Even as the situation normalizes, be it from freight or availability from China, you don't see that the current base declining and then you grow. I mean, you can grow on the existing base itself. Yes, sir. We will be able to grow. It will not affect our growth. Easing of the situation could go also to our advantage. Sir, why do you say that? Because now it's improving and now it's easing, so how does it come to our advantage then? Less painful. Less, uncertainties. Okay. Got it. I thought that was benefiting you, this uncertainty and, this, the lack of, transparency in the system was benefiting you. Even as it improves, that will also still benefit you. I'm making a comparative statement as compared to the competitors. Okay. Got it. Sir, the second question was on the use of cash. Now, sir, given the sustainability of this run rate, you are generating decent quantities of cash and your CapEx requirement I believe is around INR 300 crores, which can be, I mean, the FCF generation is quite healthy. Sir, any, I mean, just some thoughts on probably increasing dividend or any use of some capital, this capital allocation thing. Mr. Dhruv, you'll have to speak a little loudly. When you are putting your question, there was an aircraft passing over our building, so I could not hear you very clearly. I would request you to please repeat the question once again. Yes, sir. I was saying that FCF generation, free cash flow generation now will be very strong. The CapEx requirement I believe is around INR 300 crores, which can be sufficiently met with the, which was already getting met with the existing business. Sir, any plans for probably increasing dividend or using, some thoughts on the capital allocation thing? We are looking into that direction. Huh? We are looking into that direction. On the dividend, okay. The CapEx remains at INR 300 crores, right, sir? More or less. Got it. Sir, one last question, quick one, is it possible to share what would be the market share of some of your, say, for example, the top three products. Individually, what would be the market share in these products be? Say, for example, let us talk about Europe. You might have an X molecule. I'll say top one molecule. What would be market share in that molecule for you in Europe? Or any representative, you know, say that you can give us. Mr. Dhruv, we are a very small fry in the world and global market, and our market share will not be more than 10% in any geography, any country for any molecule. Okay. 10% would be the max for any, even if you have top molecules. It is not a very precisely calculated figure. Yeah. It is just an estimate that it'll not be more than 10%. It could be even 8%, 7% also. Yeah. Got it. It was great, sir. Go ahead and thanks. Thanks so much. Thank you. Thank you. The next question is from the line of Archit Joshi from Dolat Capital. Please go ahead. Thank you for the opportunity, sir, and congrats for a great set of numbers. Sir, I was just trying to understand a bit more on the commentary that you gave for the growth that we have registered a very healthy growth number this quarter. Sir, is it that other than the dried up inventory that you are talking about, were there some molecules that were registered of late, which were picked up by distributors and, you know, there was a strong volume growth for some of the molecules, which were in the pipeline and then specified into sales volumes? Is it that or it was just, you know, the inventory situation which helped us? I'm looking at it from a more sustainability perspective. I mean, if this growth can sustain going ahead. Just give me some time for the aircraft to pass over our building once again. Mr. Archit, when we get a new molecule, it does not have an impact immediately. Ours is a seasonal business. Sometimes we register a molecule, when the product, I mean, it is off season for the product, you know. To introduce the product into the market also takes at least one or two seasons. Most of this is from the products which were registered in the previous years. Some products have done, helped us during this year. Got it, sir. Sir, so basically, was this just like a one-off quarter? I mean, because if you look at the growth numbers, I think in the last nine, ten quarters, we haven't seen NAFTA doing better than Europe, not just in terms of sales, but also in terms of gross margins. So I was just a little curious to understand where this is coming from. Would this situation, if not this high, at least in mid-teens%, would we be able to see growth in the ensuing quarters? Yes, sir. That's right. Got it, sir. Thank you. Thanks for the clarification. Thank you. Thank you. Thank you. The next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thank you. Nitin, good afternoon. Congratulations on a very good set of numbers. Sir, two questions. One is, A, on the non-agro business. What has been the driver for that business? It's also grown very well in this year. Give me one minute. There are many cars passing over our office. The non-agro business has grown again because of proper strategizing the requirements. Just remember, most of the non-agro business is made to order. In the non-agro business, there is no stocking and selling. We receive orders, and we have to get the products made as per the requirements and specifications of the customers, and then deliver. Probably, here also our customers have found Sharda a better source to provide, so supply them the products within their expected timelines compared to the competitors. It is basically mainly based on the service and deliveries. Sir, if you could just help us to remind us what is the main concentrate, main products actually there in this business? Hello? Hello. Sir, this business, what would be the main products in this business, sir? Sir, the quality of your voice has gone down very substantially. It needs to be improved. Can you hear me, sir? Now I can hear you. I'm saying what will be the main products actually, made for the customers in this business? It is largely the belts business or something else which is there along with it? No, largely the belts and also other products, you know. We get them made after we receive the orders from the customers. What is the gross margin in this business, in general, you know, over the last nine months or so? One minute. Gross margin in this business is around 13%-14%. Okay, sir. Sir, lastly, on the agrochemical business, we've heard about 50% volume growth or thereabouts, you mentioned for the nine months. Is it possible to, sir, break it between existing products and new products in terms of what would have driven the volume growth? It's not so easy. We haven't done that analysis. Okay, sir. Sir, just lastly, you know, you also answered that in answer to the previous participants, but this is a very high growth year. We'll probably be growing 50% or so in our volumes, assuming the trends continue, sustained for this last quarter also. On this high base, which is there, you know, what would be, if you take a three to five-year view of the business, what is the normalized volume growth that one can think this business can achieve 15%, 20%? What is the normalized level of volume growth we can achieve, sir? I would say around 20%. With margin, with some value increases, because we are doing relatively more higher value products as we go forward. I feel that this will be also able to maintain the margins. Okay, sir. Thank you, sir. Thank you. The next question is from the line of Sonal Minhas from Prescient Capital. Please go ahead. Hi there. Am I audible? Yes, please. Sir, I had two questions. One was around the Europe business. Wanted to understand, you mentioned that the reason you've done exceptionally well in this nine months and this three, this quarter has been your service and the inventory levels of the competition. On the service, just want to, sir, double-click and understand, what do the distributors actually say about the product in terms of the yield of your product being better than competition? Or is there some other quantitative factor about the productivity of the product which is important? Why I'm asking this is to understand also the stickiness of the business over the course of next one, two, three years given the product specifications. I hope I'm clear on that, sir, the question here. Mr. Sonal, if I understood your question correctly, do you mean performance of our product compared to the competition? Yes, sir, performance. Yes. I think our product is performing very well. I do not know if they have had any bad experience with the competition, but our product is performing very well. You must know that when you deal with agrochemical products. The quality and lot of parameters are decided by the registration authority, which we have to comply with. Sure. Our product has to be equivalent in all respects to the innovator's product. When these are the factors which are taken care of at the production stage- Mm-hmm. Performance is more or less following. Unless, of course, there is some variation or deficiency at the stage of application on the part of the farmers or some other adverse weather effects. There's no complaint about the performance of our product. Okay. Sir, a follow-on there. What is the pricing gap of our products in general, maybe we can just compare Europe. Our products versus, let's say, the largest competition there, and has that pricing gap narrowed over the course of the last one or two years? Just want to understand that. Sir, we try to understand the pricing of our big brothers. That is our leaders who are multinational innovators. Mm-hmm. We try to price our product at about 10%, I mean, around, plus or minus 10% of the innovator's product. The biggest secrecy about the innovator's product is that it is not a very open and transparent information. I understand. Okay. Yeah. With pricing, sir, just on your hunch or whatever you've understood from the distributor, has that gap narrowed, because of inventory shortages in the last one year? It could have been, but not very significantly. Okay. Understand that. That's it from my side. Thank you. Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers. Please go ahead. Yes, sir. Good afternoon. Am Am I audible? Mr. Thareja, if you can speak closer to the handset, please. Your voice is not audible. Okay. Is it better now? Can you hear me now? Yes, it is better now. Yeah. My first question is approximate timeline for the pending registrations or what time can they be registered and you know, brought to market? It's very difficult, Mr. Thareja. We need to consult an astrologer for these things, you know. No logic works in the process of registrations and no forecast works over there. Because we are dependent upon a lot of uncertain factors. One is the bureaucracy of the registration authorities. They have to meet a representative from various ministries. They have to get together and meet to take a decision. Second is the trials on the field. Weather conditions, the infections during the weather. Which are a lot of uncertain factors, and I don't think it is possible for anybody to make a guess and predict and achieve defined timelines for the registration. Okay. To a previous participant, you indicated that, on your current sales base, post FY 2022, you think 20% annualized growth is sustainable. Are you talking about volume growth or are you saying that it's rupee term growth of 20% which is sustainable going ahead? Volume growth. Volume growth. In terms of pricing, you know, it has been, you know, very volatile in the last entire year. Input prices moved up. You've been very proactive and taken, you know, price increases and passed them on. Do you foresee a situation where next year, you know, prices move down sharply also? I don't think it will move down sharply. If there is a decline, it will be very gradual and slow. Okay. A gradual and slow decline. Sir, this year's 50% volume growth, you indicated, you know, that it's partly coming from your competitors not being able to put inventory in the market and, you know, partly your own efficiencies. If you could give us some, you know, ballpark idea as to one, you know, are your major customers or, sorry, competitors based out of China itself? Secondly, you know, if they can even input material situation when they come back into the market and try to take back share which they have lost by aggressively pricing, you know, how are you thinking about strategizing around that and sort of maintaining the market share that you've gained in the last year maybe? Mr. Thareja, you have made your question very long. I have understood some part of your question, which I will, is easier for me to answer. Sure. Is our competitors. Mm-hmm. Now, whether they are from China directly. No, they are not from China directly. Okay. Chinese producers believe in production and not investing in any tangible asset like registration. Okay. China is not our direct competitor for any of these markets. Right. Sir, secondly, I mean, your competitors will invariably in an easing input material scenario, you know, want to grab back some volume share which they might have lost in the last year. You indicated that they could not supply and you gained at their expense. Consequently, I am, you know, inferring that they will also want to take back whatever share they lost and therefore maybe go a little aggressive in pricing. Do you foresee a situation where, you know, some of the gains that you have made this year, you know, which have come due to market share gains, might not stick or sustain? Or do you feel that now, you know, your situation with the distributors is strong enough for you to sustain your gained market share? Mr. Thareja, we will find out other revenues, how to keep the growth of our products and keep penetrating into the market. What I stated, I'm not saying with full confidence that this has been the fact. I'm saying that this could be one of the reasons why we were able to get a better share of the market. Right. Finally, after margin. Mr. Thareja, so sorry to interrupt, but for any follow-up questions may we request you to return the queue, please. The next question is from the line of Vishal Biraia from Max Life Insurance. Please go ahead. Just one question. How has been the inventory scenario, at the retail level, at distributor level? Inventory scenario at the retail level and distributor level. Your question is not very clear, Mr. Vishal. The retail channel chain in Europe and NAFTA, how has been the inventory at their end, at the retailer's end? If I have understood these markets, my understanding of the markets is that the retailers don't maintain a very big stock. If they want a product, they send an inquiry. They want the product the next day or the third day. If I tell him that I'm going to get a product, it's on the sea or on the way and take a week, they don't come back to us. They want product very quickly whenever they come up with a demand. Right, sir. The distributors would be maintaining all the inventory. What is the kind of inventory level that they would have? Would they have lower than normal inventory levels then? Sir, the distributors also would maintain minimum inventories. They all depend upon the registration holders to meet their requirements for the inventories as and when they want. Okay. Thank you very much. Thank you. Thank you. The next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead. Yeah. Thank you very much, sir, for the opportunity. Mr. Poddar, may we request you to speak closer to the answer, please. Hello? Hello? Still not sufficient. You have to speak a little louder. Now it's better, sir? Slightly better. Okay. Sir, just I wanted to understand now, you spoke about the several price hike that you have taken and in the fourth quarter as well. You will see, depending upon the raw material situation, how do you place your price hike. Now, sir, just wanted to understand on the back of these. How do you see a better margin sustainability? Now, it has increased over last maybe couple of quarters and standing about 20-21%. Is that the sustainable level that we are looking at going forward? I think it is sustainable. What sort of improvement we are looking at over and above that, if at all? It's very difficult to comment. I think it is sustainable, and our effort would be to still improve as much as we can. Fair. Okay. Yeah, that's it for me. All the very best. Thank you. The next question is from the line of Paras Adenwala from Capital Portfolio Advisors. Please go ahead. Yeah. I was just looking at your numbers for the last six to seven years, and I realized that, you know, on normalized basis, your operating margins are around 24%. So do you think that is something which, going ahead, should be, you know, kind of, you would be in a position to, you know, reach over there and maintain it? Yes. We should be able. You said we will be able to reach there and maintain? Yes. you also said that you have seen that it's around 24% for last couple of years. This year and for the last couple of years, it's been lower than that. In the nine months again, it's been about around 21%. You think you would be in a position to reach 24%, which has been a case in the past? You should be able to reach over there once again? I would say that, we should be there between 20% and 24%. Okay. Secondly, your return on capital employed, you know, considering the fact that you're essentially a marketing and distribution company, your return on capital employed should be significantly higher than what we are seeing right now. It has been that your competitors tend to do much better, you know, despite the fact that they have good amount of manufacturing capacities. What would you have to comment on that, please? One minute. Let me see. I am not ready with this answer. I'd really like to. You may contact us directly for the answer. I don't have immediate answer to this question. Okay. That's all right, please. Thank you very much. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Sir, thank you for your time. So you sounded one of the most optimistic and confident that I've heard at least in the last two to three years on your business prospects. If you could tell us, I know I understand your business, but if you could tell us what is it that you're doing slightly different? Because in general, the U.S. agrochemical market is 3%-5% is the growth rate. The large companies have also grown at 8%-10% last two and three quarters. If the growth slows down there, then how should we think about it? Vishnu, I have not understood your question, sir. Can you repeat once again? Okay. I'm just trying to understand, sir, because the strong growth that you have seen, what is that that gives you super confidence that now that the growth rate will be much better than the past? I mean, is there any specific things, sorry, that we are doing that is going to drive this growth? If so, if you can just spell out a few things that you are doing differently versus what you've been doing till now. Sir, the biggest factor is our understanding of the market. U.S. market is very strange and difficult to understand. We feel that we understood the market over the last so many years, and then accordingly play our cards. Is the last two quarter growth because glyphosate was in short supply price-wise also, and are we seeing a benefit because we are operating in other products which is not glyphosate? Is there any big up move in our volume growth that has come because of this? In context of glyphosate, it'll be very difficult for me to comment. All I can say is that we have been able to meet the demands of the customers for the products that they have asked for. Many times we have to also decline. In spite of this growth, we have to decline many inquiries and demands because we do not have inventories ourselves. Whether it is related to glyphosate or availability and the shortage of glyphosate, it's very difficult for me to comment. Any top two, three chemicals that you can give us, names of which you have done well this season in NAFTA region? The chemicals, we do not disclose in these kind of meetings, sir. It is our trade secret. Understood. Sir, just again circling back on the growth front only. This week, last one year things have been really great for the NAFTA and Europe markets from a farmer income price point. It's seeming to change as we speak, that farm income are coming down, fertilizer prices have gone up. Generally, the profitability of farmers are coming down. At the time, I'm asking actually two questions in the same one. Farm income coming down, also there seem to be some sense of restocking that is getting completed. Should we see some of the end market slow down, next one year or so? Are you seeing any signs? I know the current trend is very strong now, but, one year down the line, how do you see the end market and our growth accordingly? Mr. Vishnu Kumar, I can only comment that most of our customers have never complained about availability of the funds with them to make payments on time. We've been receiving payments on time and with slight incentives, we get payments before time. That gives me an impression that the farmers are flush with funds. Now, where are they getting from and how are they getting, that is a next level which we have no time to go into. Got it. One last question, sir. Mr. Vishnu Kumar, so sorry to interrupt, but for any follow-up may we request that you join the queue, please. Thank you. The next question is from the line of Pushkar Jain from Sequent Investment. Please go ahead. Hello, sir. I wanted a breakdown of volumes region-wise for the nine months. Can you provide in detail? Yes. Okay. Mr. Pushkar, I give the breakup of the volume for the nine months. Europe it is INR 116 lakh 64,000 kg. NAFTA, INR 87 lakh kg. Latin America, INR 38 lakh kg. Rest of the world, INR 26 lakh kg. Just to repeat the Europe. INR 268 lakh kg. Yes, sir. Can you just repeat the Europe volumes? Sorry, I missed that. Europe is INR 116 lakhs. Okay. That is INR 11.67 million lakhs kg. Okay. Thanks a lot, sir. This actually has an increase of 30%, right? It has- This is 30% in the current year as compared to the last nine months. Overall, yes. Yes, yes, sir. Overall. Okay. Thanks. Thanks a lot, sir. Thank you. Ladies and gentlemen, due to time constraint, that was the last question. Now on the conference over to Mr. Manish Mahawar for closing comments. Over to you, sir. Yeah. Thanks, Steven. On behalf of Antique Stockbroking, I would like to thank the team of Sharda Cropchem for providing us an opportunity to host the call. Vishnu, would you like to make a closing comment, sir? No, sir. I think we've spoken enough and, there's no further thing to add. The time is also. We have exceeded the time. Sure, sir. Thank you. With that, we will conclude the call here. Thank you. Ladies and gentlemen, on behalf of Antique Stockbroking, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.