Ladies and gentlemen, good day, and welcome to the Sharda Cropchem Q4 FY 2023 Earnings Conference Call hosted by Antique Stock Broking. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on the touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Darshita Shah from Antique Stock Broking. Thank you and over to you, ma'am. Thank you. Good evening, everyone. On behalf of Antique Stock Broking, I would like to welcome all the participants in the fourth quarter and FY 2023 earnings call of Sharda Cropchem. On the call with me, we have Mr. Ramprakash Bubna, Chairman and Managing Director, and Mr. Ashok Vashist, Chief Financial Officer. Without any further ado, I would like to hand over the call to Mr. Bubna for his opening remarks, after which we can open the floor to Q&A. Thank you, and over to you, Bubna. Thank you, ma'am. Good evening. A warm welcome to everyone present here on the call. Along with me, I have Mr. Ashok Vashist, our Chief Financial Officer, and Mr. Shailesh Mehendale, General Manager Finance, and SGA team of our investor relations on the call. Hope you all have received our investor deck by now. For those who have not, you can view the same on the stock exchanges and the company website. We are a global agrochemical company engaged in the process of marketing and distribution of agrochemicals by procuring wide spectrum of formulations and generic active registrations across the globe. Leveraging on our expertise and product registration capabilities by identifying generic molecules, preparing dossiers, seeking registrations, marketing and distributing. The company continues to identify opportunities in generic molecules. Sharda Cropchem's total product registrations stand at 2,821 as on 31st March 2023. Additionally, 1,143 applications of the product registrations are in pipeline. The CapEx for the financial year 2023 stood at INR 355 crores. Every jurisdiction has different legal and procedural requirements for providing registrations. The company has successfully obtained the regulatory approvals from these jurisdictions. The company is well equipped to respond to all the potential issues as well as has the readiness to efficiently respond and comply with the regulatory requirements. We maintain a healthy relationship with multiple manufacturers, mainly in China and India. Sourcing from multiple manufacturers helps the company in getting quality products at optimal price, thereby de-risking its sourcing dependencies. Over the years, we have built a strong network within our global markets. We are benefiting through the economies of scale and leveraging value of our supply chain to deliver value to the customers. In Q4, in quarter four 2023, the revenues grew by 3% to INR 1,482 crores, and for the full financial year, the revenues have grown by 13% to INR 4,045 crores. The revenue growth led by better product mix and price realizations. During quarter four 23, the gross margins have improved by 240 basis points due to increased sales in Europe and better margins. Most of the currencies had depreciated against US dollars in the first six months of the financial year, mainly due to the ongoing war between Russia and Ukraine. In the first half of the year, the company incurred forex losses of INR 82 crores. In the last two quarters, that is, second half of the year, we have seen some rebound of these currencies. For the full- year, the company has incurred a forex loss of INR 58 crores, due to favorable environment for INR 25 crores in the last two quarters. Over 53% of our FY 2023 sales of agrochemical business have been to Europe, where the majority of the company's raw materials is imported from China and the payments are done in USD. This had impacted the company's gross margins and overall profitability in first half of 2023. We have seen this trend reversing in the second half of FY 2023, as Euro has started appreciating against USD and INR. We have accelerated focus on revenue-generating investments and are continually looking to improve the operation efficiencies which will help improve our margins. With this brief overview, I would now like to hand over the call to our CFO, Mr. Ashok Vashist, for discussing our financial performance. Thank you very much, ladies and gentlemen. I give it to Mr. Ashok. Thank you. Thank you, sir. Good evening, everyone over the call. Coming to Q4 FY23 performance, our revenue stood at INR 14.82 billion against INR 14.34 billion in Q4 last year, thereby registering a growth of 3% year-on-year. The company is focusing on value-based growth. Gross margin stood at 31.6% in Q4 FY23 against 29.2% same quarter last year, higher by 240 bps, mainly due to increased sales in the European region and better margin in Europe and the rest of the world. The EBITDA margin stood at 21% at INR 312 crore in Q4 FY23 versus INR 317 crore in Q4 FY22. Profit after tax stood at INR 199 crore against INR 169 crore Quarter four last year, registering a growth of 18%. PAT was supported by better product mix and price realization and positive impact of Forex gain. Coming to the split. Agrochemical business grew by 6% year-on-year to INR 13.16 billion, whereas the non-agro business grew by 13% year-on-year to INR 166 crore. In the agrochemical space, Europe grew by 46%, NAFTA de-grow by 37%, LATAM de-grow by 58%, whereas sales in the rest of the world grew by 88%. In total, Europe contributed 68%, NAFTA 23%, LATAM 4%, and ROW 5% of the agrochemical business for Q4 FY23. In the non-agrochemical space, Europe de-grow by 64%, NAFTA region marginally grew by 1%, LATAM de-grow by 50%, and ROW grew by 78%. Europe contributes 12%, NAFTA 67%, LATAM 3%, and ROW 18% of the non-agro business for Q4 FY23. Coming to full- year performance FY23. Revenue stood at INR 4,045 crore for the full- year FY23, against INR 3,580 crore last year FY22, registering a growth of 13% year-on-year. Revenue growth was led by better product mix and better price realization. Gross margin stood at 29.3% in comparison to 30.2% in FY23. If we compare this from the first half of the year, margin of full- year, we have nearly improved by 300 bps in H2 versus H1. EBITDA de-grow by 2% to INR 713 crore, and PAT stood at INR 342 crore versus INR 349 crore FY 2022. Coming to the split of agrochemical business. Agrochemical business grew by 11% year-on-year to INR 33,348 crore, whereas non-agro business grew by 21% to INR 697 crore. In the agrochemical space, Europe grew by 29%, NAFTA region de-grow marginally by 2%, LATAM de-grow by 24%, and Rest of the World grew by 34%. In agrochemical business, Europe contributes 53% for full- year, NAFTA 34%, LATAM 7%, and Rest of the World 6%. In the non-agro chemical space, NAFTA grew by 47%, LATAM grew by 35%, Rest of the World grew by 23%, and Europe de-grow by 24%. Europe contributes 20% of the total non-agro business, NAFTA contributes 61%, Rest of the World contributes 14%, and LATAM 5%. In terms of working capital as of 31st March 2023, in terms of days, it's 104 days. We are a net cash company. Our cash and cash equivalent stood at INR 320 crore as of 31st March 2023, and our total debt stood at INR 3 crore. With this, we are now keeping the floor open for questions. Thank you very much. Thank you. Thank you. Ladies and gentlemen, we will now begin with the question and answer session. Anyone wishing to ask a question may please press star and one on your 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 Harshvardhan, a professional investor. Please go ahead. Hi. Thanks for the opportunity. My first question is regarding our Property, Plant and Equipment shown in the balance sheet. I think this has reduced from 14.4 crores in FY 2022 to five crores in FY 2023. Can you tell what did we sell that has resulted in a reduction of this? Just give one minute. This is essentially the lease assets, you know, which has, you know, as per in line with the Ind AS 116. depreciated, it come down like this. Mainly due to depreciated lease assets. My next question is about our working capital. If you see like, we have seen a bit of an increase in our working capital. Can you tell the reasons behind it? Yeah. You know, two reasons. One is, you know, quarter four is, you know, our 45% of the business comes into quarter four. Having said that, there are, you know, in terms of inventory, there are certain challenges in the NAFTA region, which has temporarily led to the little higher working capital. Barring that, you know, we are in line with, you know, our last year. Essentially because of inventory. All right. you know, in the NAFTA region. Is there also a possibility that we might have to write- off a bit of our inventory in NAFTA region if it doesn't get sold? No, not really. Covered. It's just because of temporary demand issues led by the weather conditions. As of now, we do not foresee any such, you know, such kind of, you know, this thing. Write- off. Okay. Yeah. Can you just tell us a bit about the broader agrochemical scenario? It seems that there's a lot of inventory in the channel, and a number of companies are struggling in terms of growth. Can you just give a basic outlook of the industry? This agrochemical industry is a seasonal business and very much dependent upon the weather. This year, coincidentally, NAFTA region is facing a lot of hardship and whatever was planned has not been able to taken off or given it to the in agriculture because of adverse weather conditions. Otherwise, things are very much normal and there's not much things to worry about. We also see that we have had pressure in. Sorry to interrupt, Harshvardhan. May we request that. Sure. return to... Thank you. The next question is from the line of Priyansh Shah, an individual investor. Please go ahead. Congratulations, Mr. Bubna ji, for the very good set of numbers. My question is, Sir, interest rates. See, pricings are guided by 2 or 3 factors. In our case, the sales prices are guided by the multinational companies and innovators who are the innovators of these molecules. The second factor is the cost of sourcing, which is mainly China and India. Due to many factors in China, the prices of our inputs, raw materials and technical products varied because of the local situations in China. In the first half of this year, the Chinese situation was not so comfortable and the prices were high. In the last quarter of this year, Chinese prices are on the downslide, and that will have a positive impact on our business. Okay, sir. Thank you, sir. Thank you very much. Thank you. The next question is from the line of S Ramesh from Nirmal Bang Equities. Please go ahead. Good evening, thank you very much, Mr. Bubna. My first thought is if you're looking at the decline in input costs and the pressure on margins, do we see any risk of some pressure on margins before we see the recovery in margins? You'll obviously be able to pass on the lower cost and improve demand. How do you see the outlook for margins given that, you know, there is an overall reduction in the top line as well as raw material costs? Mr. Ramesh, this is a mixed situation. In some of the territories where we have some inventories, it will have a pressure on the margins because everybody's looking at the prices in origin that is China. A lot of our territories, we do not have such inventories, so there we are getting benefited. Okay. On the receivable side, it's gone up. It's almost between five and six months. Do you see that coming down in the foreseeable future or will this continue for a while? How do you see that? It should improve. The receivables should improve because our business being seasonal business, a big chunk of our sales are happening in the fourth quarter and in the last month of the financial year, mainly because of the spring season coming closer to the closing. Initially, every financial year, our receivables are at the top, and then they start going down and I don't think any big impact will be there on account of higher receivables. One last thought. If you look at third quarter and during even the Rabi season, there's a lot of generic competition. Even the leading companies, they're under pressure. Where do you see the industry kind of settling? Will it, you know, will you, will we see some improvement in volumes in the Kharif and in the international market in the next six months, particularly in Asia and other markets where we have agricultural season, or will it take another one year before we see the, you know, overall outlook for consumption growth improve? What is your thought on that? No, I don't think we have to wait for a year. The impact will start within next three to six months, and it'll be gradual. Thank you very much, and wish you all the best. I'll join with you. Thank you. Thank you. The next question is from the line of Dhruv Moondhra from HDFC Mutual Fund. Please go ahead. Hello, sir. Thank you so much. Can you give the volume price and split for the quarter? Revenue growth. For the quarter? Yes, sir. One minute. Sir, even for the full- year. Both. Hello. Yes, sir. The impact on the growth is plus 2% because of product and price mixture. Volume growth has been a negative impact of 3%. Foreign exchange impact has been about 4.3%. Total growth is 3.3%. Same for the full- year, if you have. Same for? Full- year, FY 23. One minute. Full- year, the impact of price and product mix is +15%, volume -4.6%, foreign exchange impact +2.5%, and total growth 13.0%. Okay. How do you look at the growth for the next year? I am also asking in context because we are seeing that you also mentioned that technical prices from China are lower now, and last two, three years we had good benefit in revenue growth because of pricing. Do you think that reversing and having can cause some drag on revenue growth for the next year? No, not very much. I think we should grow by at the around 15%. 15%-18%. This will be largely driven by. Because I, if I'm not wrong, price to negative, there will be some delta negative because of price. Do you think volume will offset that negative impact? No, volume will increase. When the price is on the drop, the volume increases. Demand increases. All right. Sir, the Just sorry, sir, but the impact of the benefit of price in the last two years has been reasonable. For you itself, I think the growth has been 25% in FY. One second. Was about 25% in FY 2022 and 15% in FY 2023, driven by pricing. We see that technical prices are coming off in China. Just wanted to reassure on that, you still are comfortable with 15% growth. Yeah, we are comfortable, sir. All right. Sir, this, your inventory, just coming back to that question earlier, your inventories. We understand prices have fallen significantly. Likes of glyphosate have fallen probably more than half. We don't see that as a risk of inventory write-off on us. That we are very, very confident about. There will be some, say, some small impact, but not very significant. Only in the territories where we are left with the inventories and those happen because of adverse weather conditions and drop of demand. On the other side, where we don't have much of an inventory, we will have benefit also. Okay. That's primarily the increase in inventory that we see versus normalized. Normally, you have about 60, 70 odd days of inventory. This time it is about 90 odd days. This is primarily because of NAFTA only. For other regions, you are fairly comfortable. Mainly, yeah, mainly because of NAFTA. Okay. Sir, one last question is on the CapEx guidance. So what could be the number for FY 2024? When you say CapEx, do you also include, the registration cost which you partly expense out in your PNL? No, we are capitalizing the Capital Work in Progress when we receive the registration. We start depreciating them by straight-line method over a period of 5 years. Okay. Why I'm asking this is because, in your commentary, you mentioned the CapEx is INR 355 crores. If I look at the cash flow statement, the amount is, if I'm not wrong, only INR 244 crores. I'm just trying to understand what is the difference. Is that INR 100 crores booked in expenses and ensure they're saying it that way? One minute. Dhruv, what happens is, you know, CapEx, whatever we incur, it doesn't mean every, you know, all the cash outflow happens in the same year. Okay. there's, you know. That's the difference. Yeah. Opening, closing credits and, you know, those kind of things. Got it. CapEx depreciation. Yeah. Got it. sir, CapEx for this year will be about what, sir, of it in FY 2024? Around INR 400 crores. 400. Got it. Yeah. Sure, sir. Thank you so much, sir, and all the best. Thanks. Thank you. Thank you. The next question is from the line of Darshan Trivedi from Crown Capital. Please go ahead. Hello. Good evening, sir, and thank you for taking my question. Firstly, congratulations on a great set of results. My question was regarding margins. With, lower prices, would that impact our EBITDA margin? How would our EBITDA margin play going forward in the, you know, next year? Our EBITDA margins is projected as between 18%-20%. Okay. Between 18%-20% for next year. Yes. Okay. This would basic Forex expense that we could reasonably estimate would be included in this. Could there be any other risk that we see for getting towards this margin? No, we have taken all the risks into account when we have projected this 18-20%. Okay. That helps me a lot, sir. Thank you for that. Thank you. Thank you. The next question is from the line of Sameer Deshpande from Fair Deal Investments. Please go ahead. Hello. Congratulations, on the very good set of numbers because we started the year on a very difficult note. In the half two, we have covered the entire loss, which was incurred in the half 1. Really, it is a commendable job. Congratulations, Mr. Bubna Ji, and all the team for the hard work. Mainly to the team, sir. No, but yes, but it is under your stewardship, so it goes to you also. This year, we are hearing a lot of noise about this El Niño and the weather conditions being adverse, not only in Asia but also abroad. Because in a large company's conference call, we heard that the product prices have also fallen. After China's reopening, the prices of the products have fallen significantly in this quarter, reopening of China. Actually, does it benefit us in any way? It has a mixed impact. See, Mr., you are Mr. Sameer Deshpande. Yeah, yeah. Sameer Deshpande- Ha. As I explained, because of a very healthy relationship with the suppliers and manufacturers. Mm-hmm. We get the advantage of the drop in the prices. We are the first to get the advantage. Okay. The advantage takes some time to be passed on to various levels. During this intermediate period, we get benefited. Okay. You understand? Ha. When the prices go down. Ha. Our business gets positively impacted. Yes, sure. Only these weather issues, at this point, we don't feel anything much adverse in agriculture. Sameer Ji, I still remember the word you had said for this weather. You hear a lot of noises. Ha. You should not pay attention to the noises. Yes. There's no reason. You used the right word. These are all noises. Okay. The world is going to stay. Yeah, yeah. People are going to eat. People are going to live. Yeah. They require agriculture. Yes. The population is growing. Yes. one more- The agriculture has become so resilient. Yeah. It can withstand a lot of noises, you know. I was just going through all that data which we have provided for last about four years consecutively. From FY 2018, 2019, I've seen the sales have grown from INR 2,000 to INR 4,000, so it is a growth of 100%, so which is a good growth of more than 20% CAGR. Our operating profits and net profit also have grown by about 18%-19%. As they are over the last four years. That is really a good thing, and hope the things continue in the same way. I had a question about the Q4. Our other expenses have shot up from INR 107 crore to INR 147 crore. What is the any one-off in that? Sir, this is mainly due to increase in the cost of living and significant increase in the cost of living in the European region. Sure. This has happened because of the Russia-Ukraine war. The cost of fuel going up, energy going up, transportation going up. Mm-hmm. The surface transport is extremely high in Europe nowadays, and these are all adding. Then also our consultants. Mm-hmm. We have max amount of consultants coming out from Europe. Yeah. Europe has been a very stable economy for the last many decades. Mm-hmm. This is the first time that they are getting impacted because of all these things, but they'll find a way out. Everything has a short life. This Russia-Ukraine war was never expected to last so long, but it's still going on. Mm-hmm. Mm-hmm. Now I think the overall the effects are fading. I'm sorry to interrupt, Mr. Deshpande. May we request that you return to the question queue? There are participants waiting for their turn. Okay. Thank you, and all the best to you. Mm-hmm. The next question is from the line of Himanshu Binani from Prabhudas Lilladher. Please go ahead. Thank you. Thank you, sir, for taking my question. My question was Yes, sir. largely on the revenue and the margin outlook going forward. What we have seen in the global agrochemical companies till date who have reported their numbers, so the major thing or the common thing which was coming out is that the generic players were facing an immense pressure across geographies. Despite that, we have actually bucked that trend, and we have posted a decent sort of, like, growth into the agrochemical side. What different we have done basically as compared to the other players or the global majors, number one. Secondly, what we have seen is there has been a huge margin erosion also across names. Despite that, we have, like, we have posted a very decent sort of, like, gross margin expansion during this quarter. The question was largely around this only, sir, so maybe you can tell. Mr. Himanshu, you have to see our business model. Our business model is very unique. It is not like other generic players who are sitting with lot of fixed assets, manufacturing facilities, and they have to live with those manufacturing facilities even if the demand for their normal products go down. We are very nimble-footed. Mm-hmm. If any product has less demand and less margins, we try to put that on the side or give it the last preference. We have, wherever we find that the margins are good, demands are good, we pay attention to that molecule or that product and leave aside same, like you said, glyphosate. Glyphosate prices were very high, now it is going down. When the prices go down, we give least importance to this product. Where the manufacturer cannot avoid that, they have to live with them. That's a very big difference between other generic players and our business, you know. Right. Sir, secondly, on the margin side, have we taken any sort of like high-cost inventory provision into our numbers and which is reflected into the gross margins despite this to 40 basis points of margin expansion? Sir, we have taken into account whatever inventories we have today. You call it high cost or low cost, but the overall cost of those inventories are not significantly high as compared to the current prices. Got it, sir. Sir, how should actually one look at the gross margin profile going forward for FY 2024? We continue to maintain that 26%-30% sort of range in the gross margin side? Yes, sir. Yes, sir. We are very comfortable. It could be nearer to 30%. 26% was in the first half of this year. Right. mainly because of the exchange rate variation. Right. Going forward, sir, with the, now the Forex are turning favorable and moreover the RM prices are, like, correcting. Are we, like, giving a conservative sort of guidance into the gross margin side? Sir, we prefer to be practical. We don't prefer to be very optimistic. We know that we have to face our investors every three months, you know. Right. We like to give as realistic an estimate as possible. You can call it optimistic or pessimistic. Right, sir. Sir, one last question, basically. Can you please help us with the gross margin reason why is gross margin as well as the volumes for this quarter and for the full- year FY23? Thank you. Yes, sir. Region-wise gross margins have been, 36% in Europe, Latin America 26.5%, NAFTA 24.5%, and rest of the world 22%. Got it, sir. As usual, Europe has been the best margin and very regularized, regulated market and very little fluctuations. Sir, LATAM, we have seen a decline, a huge contraction in the revenues. However, we are seeing a huge expansion in the gross margins. What had been the reason basically for this? Last year we had a very big volume of one or two particular products which were not giving us very good margins. Very comfortable, but the volume was very high. This year, that molecule is not playing that important a role and things have become more normal. Got it, sir. Sir, the volumes, the region-wise volumes. One second. This you are talking about the quarter four, no? Yes, sir. The volume in Europe. What is the unit here? INR 81 million. What currency? Hmm? INR 81 million. INR 1,560. Yeah. Okay. The Europe, the volume is 8,200,000. Latin America, 520,000. NAFTA, 3,200,000. Rest of the world, 1,000,000. Got it, sir. Thank you, sir. Thank you. Thank you. The next question is from the line of Resham Jain from DSP Mutual Fund. Please go ahead. Yeah. Hi. Good evening, sir. My question was on generic manufacturing. We hear that with China opening, some of the Chinese players are also selling several products at cost as well. Some of the Indian players are saying that because of this, they have shut down their plant also in some cases. In this kind of situation, how does it helps or it impacts Sharda? I presume it will help Sharda, but any sense on will it help our overall volume growth in 2024? It should. Resham bhai- Yes, sir. See, our sourcing is mainly from China. Correct. getting difficult and Indian manufacturers had appeared on the scene, it was very slowly, at a very slow rate, it was also shifting towards India. Now it will go back to China if the Indian manufacturers are not able to compete with the Chinese in the price. Okay. That will be, to some extent, beneficial to Sharda because of Sharda's business model. As I'm very repeatedly saying, we are nimble-footed. We have all the possibilities and very convenient for us to shift from one source to the other source, both approved sources. Okay. Thank you, sir. Sir, my second question was related to the off-patented product. A few years back, you mentioned that there are several large products going off patent and in next few years, those opportunities should come. I see there are several products getting off-patented since last year. Are you seeing any major opportunities there? How are we positioned in those products and tires at the manufacturer? Sir, they will definitely give us a good opportunity. The off-patented products are also very difficult for registration and also for manufacturing. There will be some quality issues. We will have to pay more attention, and we'll have to spend more time and resources to get the registrations. We are on the right track and right path, and that will help us in the long run. can give on the registrations which you have been doing last 2 years and in the coming 2-3 years. How is the mix between, let's say, a traditional generic product versus slightly more complex product where the competition probably at the marketplace is lower or the price differential is better or the margins are better? Any comments if you can help with? Sir, it is very natural and obvious that the new products which are going off patent, the competition is very less. If we can get the registrations of these products in a good time or short time, the benefit will come to us because there's very little competition. Other generic products which are generic for last 20 years or 15 years, we call them as commodities. There the competition is more and margins are less. We also market those products because we have to fulfill the requirements of our customers for as much products that they want, and they'll prefer also buy from one source, that is why we also market them. Our stress is on the newer products. Understood, sir. Okay. Thank you, and all the best. Thank you, Roshanji. Thank you. The next question is in the line of Anshid Joshi from BNK Securities. Please go ahead. Hi. Good evening, sir. Thanks for the opportunity. Sir, my first question is on the CapEx guidance that you gave, which is around INR 400 crores. As I remember right, it used to be in the range of INR 150-200 crores sometime back. You have alluded to the fact that registration costs have been going up. Is this purely because of the rising registration cost or do we have more number of molecules in the pipeline compared to what we used to do before? See, my friend, this is because of both the factors, but more because of the cost of registration is going up, not because of the molecules. Every time, every year, the cost of registration is going up because of the requirements of the authorities. They are more and more stringent and they want to do a very thorough test and make very sure, you know. The same molecule, if I had registered, six years back, five years back, it would have cost me, say, $1 million. Today, the same molecule will cost anybody between $1.2 million-$2 million, you know. Understood, sir. Thanks for that. The requirements of the authorities are also increasing and expanding. Understood. Understood, sir. Thanks. My second question, sir, I'm, apologies for harping on the same issue, a lot of participants have asked on your margins, previously. But you mentioned that you have grown in terms of pricing for this quarter by about 2%, and even more for the entire financial year. We have seen, that the generic prices are falling as many participants mentioned before. I'm just curious to understand, were we in a, extremely better off position at the end of the third quarter to take benefit of the situation in China of falling raw material prices, that we must have procured at a very low cost. Then on the top of that, we were able to pass it on quite well in the European and, other geographies. Would that be a fair assumption? No, sir. When you say very low prices, that assumption is not correct. The drop in the prices in China has also been gradual. The current prices, which are probably at the lowest level, nobody has been able to take advantage of because there is a time factor. You have to source the product, transport them, deliver them, pack them as per the requirements. Any advantage of the drop in price, there's a time lag of at least about two to three months. We would be able to do it a little faster, but most of the people who are doing their own manufacturing, they are also buying penultimate raw materials from China. For them to get advantage of all these things will the time lag is still more in. Understood, sir. I was actually curious, how in this environment you were able to improve on the pricing also. That was my main question and some wanted some more understanding from you. Usually a price increase that we were able to take usually happens when our inventory levels are very comfortable from the previous quarter. I'm sure that there must have been some amount of inventory back in 3Q that you're already sitting on. As you rightly mentioned, that the price fall was gradual. How did we manage the inventory and eventually subsequently passing on these prices or being able to sell at a higher realization? That's my last question. Sorry, if you can answer. Thank you. Very obvious, my friend. As I told you, there's a lot of noise about the prices, most of the customers, they want the goods next day. They don't wait for three months to take advantage of the prices. These are all seasonal products. Many times if I tell a customer that, "Yes, the goods have landed on the port and it'll be there with you in two weeks," he doesn't come back to us. People want the product the day they need it, you know. Got it, sir. Yeah. What they are going with the price in China after three months, they, it doesn't help them. They have no other choice but to come to me because I'm able to deliver to them the next day. They have to pay my price and, price in China is just imagination for him. Got it, sir. Thanks. Thanks for the explanation. Yes, sir. I do. I do. Thank you, sir. Thanks. All the best. Thank you. We'll move on to the next question. That is on the line of Saumya Vohra from Avendus Spark Capital. Please go ahead. Thanks for the opportunity, sir. My question is on the revenue guidance outlook that we have given, led by volume growth. Just want to understand what would be the primary driver for the strong double-digit outlook on volume growth. Is it because this kind of a macro is something that suits us with, as in a low RM price environment allows us to take a lot of market share gain. Is that the primary driver? That's my first question. That is going to be both price and product mix as well as volume. This 15% plus revenue growth guidance, it includes a mix of all three? Yes. Okay. Sir, in terms of geographical outlook, between the geographies, I mean, any color that you know, you are at this point in time looking at your outlook for any of these three geographies? How you're expecting things to kind of progress? Yeah. Our, our best geography is European Union, where there's a discipline and the rule of law is being followed and there are no shortcuts or parallel products entering and wrong products entering into the territory region. There we get the best value for the product. NAFTA had been increasing for the last two years. This year there has been a little bit of a dip because of the sudden adversity of the weather. This will also improve because ultimately, the farmers are also doing their best to grow their crops, and they will need also agrochemicals. Got you. In terms of our registration portfolio that we have, do we see in the last one or two years, things have, you know, improved in terms of the portfolio that we have in hand that gives us a better confidence in terms of, you know, increasing our market share in these geographies? Is there any material shift that you see that has happened in the last two, three years? That it gives us a very good level of confidence, and when we look at our portfolio, we feel very proud. Anybody who looks at our portfolio, who knows the products and the registrations, he has a lot of respect for Sharda, that we have been able to get the registrations in time and choose good molecules for registering. One final question from my side. Sir, Sir, in terms of distribution reach, for this incremental, market share or volume-driven growth, is this something that we need to augment or we already have in place a good distribution reach, so that level itself is good enough for us to further take it up in terms of volume? We have a good set of distributors and we are adding. Distributors remain more or less the same, there's also an addition into that. Thanks. Thank you. Thank you. The next question is from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity and congrats on good set of numbers. First question is on the patent, off-patent products. Just wanted your perspective historically. Whenever there is a spate of off-patent products, does it actually have a positive impact or in the short term, it could be a negative impact because the competitive products are coming at a lower price once these off-patent products are being genericized? Over a period of time, it is actually favorable for us. Just wanted to get a perspective, a short-term impact of these off-patent products and a medium-term impact on our business? Mr. Nagraj, I want to just explain you that the registration and off-patent process in agrochemicals is very much different than in the pharmaceutical sectors. In the pharma sectors, when the product goes off-patent, all of a sudden, there are large number of players who are sitting with the registrations and they jump into the arena very quickly because the process of registration is not so expensive and not so time consuming in pharma sector. In agrochemicals it is absolutely different. In pharma, the innovator loses interest of that molecule or product within next two, three years. But in agrochemicals, an innovator continues to be playing a very significant role in an off-patent product, commanding 70%-80% of market share, even 10 years after the product goes off-patent. Because the process of entry of the competitors is very slow and very difficult and not so attractive for any investor. If he wants to invest some capital, he prefers to invest his capital into many other areas, including plant and machinery fixed assets, rather than going for registrations, which is not so interesting for him, and it's built up with a lot of uncertainties. Right, sir. This is absolutely. I answer your question? Yes, sir. This is absolutely helpful and probably the analogy can be applied for other off-patented molecules as well. Thanks very much for this. Sir, second question is from the product pricing perspective. Again, apologies harping on the same issue. Given that, the generic prices have corrected meaningfully over the last one year, what is your sense that now those prices are stabilizing and probably will stay at these levels given that even the raw material prices have corrected and the associated operating expenses, logistic costs have also corrected? Effectively from here, there will not be any downside for the product pricing and whenever things improve, inventory gets consumed, the product prices will start again moving up slowly. Your sense on this, sir? Thank you. Sir, as I'm explaining you again, probably I'm going to repeat. The prices don't correct in the agrochemical field so abruptly and so fast. Multinationals and innovators continue to share 75%-80% market at their prevailing prices. These things get impacted if there are many competitors jumping into the field all of a sudden. In agrochemicals, you will find that even today, for 7-8 years or 10 years, maybe we are the third or fourth registrant of a molecule, getting a very good margin on those molecules and no competition. Our strategy is not to kill the product and the market. Our strategy is to support the innovators. We don't drop the prices more than 10% of the innovator's price. Innovators also not very much angry with us that we are going to kill this molecule. Right. Right. Got it. I was more talking from the generics, like, say, glyphosate, glufosinate, where the prices have dropped and those prices are getting stabilized now, from that perspective, sir. Sir, generics, these kind of generics don't interest us. We call them as commodities. Right. When there are 20 people sitting with the registration, then it is no longer a sort of entry barrier. I'm not talking about these products when I talk of agrochemicals in context of Sharda. Right. Right. Right, sir. Got it. This is very helpful and best of luck, sir. Thank you so much for answering all the questions. Thank you, sir. Thank you, sir. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments. I would thank everybody and all of our, my investor friends who have spared their valuable time to join this conference call. I hope we have been able to answer all your queries, and we learn a lot from the queries that you put to us. It help us to guide and pilot our business. We look forward to such interactions in the future. We hope to meet your expectations in the future, too. In case you require any further details, you may contact us or our strategic growth advisors without any hesitation. Thank you so much. Thank you, members of the management team. Ladies and gentlemen, on behalf of Angel Stock Broking, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.