Please note that the conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stock Broking. Thank you, and over to you, sir. Thank you, Akshay. Warm welcome to all the participants on the Sharda call and Q2 FY 2024 conference call. From the management, we have Mr. RV Bubna, Chairman and Managing Director, Mr. Dinesh Nahar, GM Finance, and Mr. Jetkin Gudhka, Company Secretary on the call. Without further ado, I would like to hand over the call to Mr. Bubna for opening remarks, after which we will open the floor for Q&A. Thank you, and over to you, Mr. Bubna. Thank you, Manish Good afternoon, and very warm welcome to everyone present on this call. Along with me, I have Mr. Dinesh Nahar, General Manager, Finance, and Mr. Jetkin Gudhka, Company Secretary, and SGA, our investor relations advisors. Hope you all have received our investor deck by now. For those who have not, you can view them on the stock exchanges and the company website. As you are aware, we specialize in marketing and distribution for a wide range of formulations and active ingredients of agrochemicals. These encompass fungicides, herbicides, insecticides, and biocides, catering to a diverse global customer base. Through its expertise and commitment, the company has established itself as a trusted partner in the agricultural industry worldwide. We prepare comprehensive dossiers and seek registrations in our own name. We allocate substantial resources and establish our foothold in the market. Our total product registrations stood at 2,885, as on September 30th 2023. Additionally, 1,130 applications for the product registrations globally are at different stages of approval. The CapEx for H1 FY 2024 stood at INR 217 crores. For the full year, we expect a CapEx of around 400-INR 450 crores. We have successfully maintained a strong relationship with third-party manufacturers in China and India, ensuring quality products at optimal prices. Over the years, we have built a customer network in global markets. Additionally, we are benefiting through the economies of scale and leveraging our supply chain to deliver value to our customers. For Q2 FY 2024, the revenues have degrown from INR 722 crores to INR 581 crores. We have seen a volume growth of 19.7% Y to Y. Volumes from agrochemicals grew by 18.8% Y to Y, whereas volume from non-agrochemicals grew by 30.3% Y to Y. Sales have degrown due to lower product price realizations across the globe, across Europe, NAFTA, and LATAM regions. Gross margins have reduced to 25.1% in Q2 FY 2024. The raw material and finished good sales, raw material finished good sales price have reduced substantially. This has led to stock revaluation as per our accounting policy and has impacted the gross profits and profitability to the tune of INR 13 crore in Q2 FY 2024 and INR 84 crore in H1 FY 2024. The company is seeing an improvement, improving trend in the second half of the year. With this brief review, I would now like to hand over the call to our General Manager, Finance, Mr. Dinesh Nahar, for discussing our financial performances. Thank you very much. Now I hand over to Mr. Dinesh Nahar. Thank you, sir. Good afternoon, everyone. Coming to Q2 FY 2024 performance, revenues stood at INR 581 crore, versus INR 722 crore in Q2 FY 2023, a degrowth of 20% year-over-year. Coming to the split, agrochemical business degrew by 23% year-over-year to INR 441 crore, whereas the non-agrochemical business degrew by 4% year-over-year to INR 140 crore... Gross margin stood at 25.1% in Q2 FY 2024, as against 27.3% in Q2 FY 2023. Raw material and finished goods sales prices have reduced substantially. This has led to a stock revaluation as per accounting policy and has impacted the gross profit and profitability to the tune of INR 13 crore in Q2 FY 2024. EBITDA stood at INR 38 crore, which is mainly due to the decline in the gross margin and increased other expenses, which are related to strengthening of global workforce to support future growth. PAT for the quarter stood at negative INR 28 crore. In the agrochemical space, Europe degrew by 3%, NAFTA region degrew by 42%, LATAM region degrew by 21%, whereas sales in the rest of the world degrew by 40%. Europe contributes 53%, NAFTA 30%, LATAM 11%, and ROW 6% of the agrochemical business for Q2 FY 2024. In the non-agrochemical space, Europe degrew by 29%, NAFTA region grew by 3%, LATAM region degrew by 20%, and ROW region grew by 13%. Europe contributes 16%, NAFTA 61%, LATAM 6%, and ROW 17% of the non-agrochemical business for Q2 FY 2024. Now, coming to H1 FY 2024 performance, revenues stood at INR 1,219 crores, versus INR 1,546 crores in H1 FY 2024, a degrowth of 21% year-on-year. Coming to the split, agrochemical business degrew by 23% year-on-year to INR 916 crores, whereas the non-agrochemical business degrew by 15% year-on-year to INR 303 crores. Gross margin stood at 16.5% in Q2 FY 2024, as against 26.3% in FY 2023. Raw material and finished goods sales prices have reduced substantially. This has further led to a stock revaluation as per accounting policy and has impacted the gross profit and profitability to the tune of INR 84 crore in H1 FY 2024. EBITDA stood at negative INR 28 crore, whereas profit after tax for the half year stood at negative INR 116 crore. In the agrochemical space, Europe de grew by 13%, NAFTA region de grew by 29%, LATAM region de grew by 38%, whereas sales in the rest of the world de grew by 31%. Europe contributed, contributed 52%, NAFTA 33%, LATAM 10%, and ROW 5% of the agrochemical business for H1 FY 2024. In the non-agrochemical space, Europe de grew by 51%, NAFTA region de grew by 14%, LATAM region de grew by 18%, whereas sales in the rest of the world region grew by 56%. Europe contributed 15%, NAFTA 56%, LATAM 6%, ROW 23% of the non-agrochemical business for H1 FY 2024. Working capital days as on 30th September 2023, stand at 120 days. Thank you. We can now open the floor for the questions. Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press two-star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question is from the line of Himanshu Upadhyay. Please, please go ahead. Yeah, hi, good afternoon. I had a simple question. We have seen a volume growth of 18.8% and a fall in revenue of 23%. So should we assume that overall average price fall is something like 40%? And, is it... What we understand is we are very diversified across the product segment, okay? But with simple calculations I do, it seems that price fall is something like 40%, which I am not able to comprehend. Secondly, you say we are seeing improvement in the second half or expecting improvement. The improvement is on the demand side only, or we are seeing the prices of commodity chemicals also increasing and hence both sides, both things are improving. So can you elaborate on this question? Sir, I'll have to break your question into two parts. One, you said if the drop in the price is to the tune of 40%. Yeah. My answer is yes, there's a substantial drop in the prices of the products. In some products, the prices have fell down to even 30% of their original prices about a year back, you know. Now, the second part is, there's an increase in the volume, and will that also impact the prices? My answer is yes here also. So it's only a question of supply and demand. There was abundant and excess supply from China and lot of products in the pipeline, which led to a sudden crash in the prices and demand. Now, once demand is improving, and the stocks in the pipeline are getting consumed, there would be some upward swing in the prices, but I don't expect it to be very sharp. It will be very gradual, because the stocks available are in abundance. Thank you. Yeah. And the second question, then I'll join back the interview. We are seeing inflation as challenge across the globe. Mr. Himanshu, which company do you represent? o3 PMS. I didn't understand. No... Yeah, o3 PMS. o3? PMS. Okay. Can I ask second question? Yes, please. Yeah, I see we are seeing inflation a challenge across the globe, and almost all raw material prices are increasing, okay? But if I see the price of, agrochemicals or the overall basket falling by 30%-35%, is it that the capacity has expanded substantially for chemicals and hence, this, price fall is there? Or do you think capacities have not increased, it is just the channel which has, so flooded that, we are seeing such a price or abnormal price fall? See, you have to go a little backward and see the background of the general industry. During the Corona time, the capacities had got shrunk, and the prices had jumped up very substantially. Now, after the COVID situation has got improved, the factories have restarted. Some people have had, with enthusiasm, added additional capacities, so the production has increased substantially. Okay. Okay. But are we still seeing the supplies to be in quite excess of demand, or your expectation is that? As of now, the supply is sufficiently in excess of the demand. Hence, our assumption is that prices will move very slowly upward. Yeah, the movement is expected to be slow. Okay. Thank you for your reply. Thank you, Mr. Himanshu. Thank you. The next question is from line of Sri S urya Kalagarla from Poddar Diamonds. Please go, please go ahead. Hi, good afternoon. I can see that our performance in top line from last three quarters is decreasing YOY. EBITDA margin is also going down. We are shifting in losses from last two quarters. Earlier it was Forex fluctuation. Because of that Forex fluctuation, it was decreasing performance, but now we can see the overall performance of the company itself is going. So I just wanted to understand, I mean, what's the future of the company going ahead? Is this- Sir, your voice is not very clear, and voice is cracking in between. Am I audible? Can you please switch to the handset? Am I audible now? Now you are audible. Yeah, I was saying that our performance is decreasing for last three quarters in top line, EBITDA margins are... Again, again, sir, the voice is getting cut in between. You can hear clearly now. Yes, this sentence I heard clearly. Yes. I was saying that from last quarters YOY. Sorry for the interruptions. No. Sir, your voice is not audible. Can you please switch to the handset? Can you please switch to the handset? Yes, please. Or get in the queue. Hello. Sri Surya, sir, please go ahead. Am I audible now? Can I repeat the question? Yes, please go ahead. Yes. I think that our top line performance is decreasing from last three quarters. Our EBITDA margins are shifting downwards. We are going into losses from last two quarters on net losses. Few quarters before was a fall, impacted the company's performance. No, sir. No, sir, the voice is not audible. As the current participant is not audible, we'll now move to the next question from Sonal Minhas from Prescient Capital. Please go ahead. Hi, sir, this is Sonal Minhas. Am I audible? Yes, please. Yes, sir. Hi. Sir, I wanted to understand. The volume growth that we have seen during COVID and right now, during COVID, we saw a very negligible volume growth, but the realizations were really going up. Now we are seeing that the volumes are up, while the realizations have tanked by around 40%. So in a business where you say you are filing, you're filing for specialized products, your product niche areas in which you're operating are going up. As an investor, sir, who looks at your business quarter- on- quarter, how are we supposed to understand and connect the quality of your product vis-a-vis the volume that you basically are growing in? Because if we are filing in Europe, if we are filing for new products in U.S., and the products are in the niche areas where you have a reasonable presence, there should be some understanding of volume growing over time, sir. Sir, and I am a little handicapped here to understand that if the volume—how am I, how am I supposed to understand the volume of this business, given that this is a specialty product that we are actually selling here? So just educate us a little, sir, because the vast swing in volumes is very difficult to understand. Mr. Minhas, you must understand that we still have less than 5% of the total global volume of the business, you know. So at a global level, the scenario may be different, but at an individual level, our scenario is little more brighter than the global level. You understand? Sir, I appreciate that, and therefore, the potential looks bright. But, and I understand that for you to give guidance on volume and realization, it is difficult, because this is not in your control. But, I am questioning the fact that the products that you're filing, the niche areas you are entering, are these, these defensible? Because, sir, we are public market investors. We have seen products which are into niches and good quality areas. There is either a defense of margins or there is a defense on realization, which we don't see here, sir. So are we missing something in terms of understanding the product, sir, fundamentally? Because such swings don't happen in defensible products, sir. No, that may be your experience. Our experience is that we are going into the products which are just going off-patent, you know, where the competition is very little. And again, after we get the registration, the competition is still very in, less because of the entry barrier of registrations, which is a very difficult, highly capital-intensive and time-consuming process. And, the innovators still control about 75% of the market, even after products go off-patent, you know. So we feel that we are on the right track, and if we continue like this, we will continue to grow. Okay, sir. So if we assume this COVID-related screen first did not happen or supply constraint did not happen, and let's take, let's say, 12 months from hereon or 18 months from hereon, where all of this is behind us, can we assume more linearity and more predictability in the volume of the business, just the volume, sir? I think the volume will increase. Got it, sir. Thank you, lot. Thanks so much. Thank you. Thank you, sir. Thank you. The next question is from the line of Rohan Gupta from Nuvama. Please go ahead. Rohanji, hi, sir, good evening. Thanks for the opportunity. Hello, sir. Sir, first question is on our segmental losses in agrochemicals. So you mentioned definitely roughly INR 13 crore is attributable to inventory led losses because of the liquidation of high-cost inventory. Yes, sir. However, there is an EBIT loss of INR 58 crore. So, rest, is it because of the continuous pricing pressure, and then we have to sell it at a lower prices, or the scenario will continue, or it is just only high inventory, which we had and then we had to sell it and that this loss is over now? Yeah, unfortunately, this inventory was not created by us and the planning. We have received firm purchase orders from our customers, mainly in North America. We delivered the goods to them, and then the prices started crashing. So the customer said, "You please take back the goods. We will not be able to pay you. And even if you leave it to our godown, you'll have to pay us rent." We were forced to take the goods back, and that added to our inventories. And now, those inventories are getting offloaded. We are moving towards the normalcy, and this is what leads us to give us a little bit of optimism about the performance of the company. When you say, sir, INR 13 crore is the inventory losses, it includes that all the goods which you have taken back, including that also? One minute, sir. One minute, sir. Rohan, it is mainly the revaluation of the stock, which are in our possession [crosstalk] Revaluation of the stock, which is already with us only, right? Yeah, with us, and the prices have shrunk. So this, this is basically including primarily the material which we have taken back from the distributors? Yes, sir. Yes. Okay. And so there is no commitment from the distributor side, and if the prices fell, even they have taken the material and it was, I mean, it was a sold material, we were bound to take it back. Isn't it some kind of breach of the contract or the, I mean, the trade of the terms? It is a blatant breach of the contract, and we had to go through it. Just because we want to maintain the relationship with the dealers? Sir, we had no other choice except to take them to the court of law, which is a very difficult process and not advisable, you know. It was happening across the industry. Every customer or purchaser has gone back on his commitments and raised his hands up. Okay. Sir, does it have a severe impact on our relationship or our dealers' model, to whom, with whom we were doing the business? And we have also gained a lot of market share in last two years in, especially in a European market, when the prices were going up and many regional player in Europe was not able to meet that demand, and we gained the market share that actually helped us in post-pandemic environment. So is it that, the returns are more from the new traders, new dealers, or with the old relationship, it was not visible, or it is across? And how it is going to have impact on our market share going forward? Ranjit, your question has been very long, and it is comprised of many questions. First of all, I was able to get the grasp of your first part of the question. Whether it has led to soreness in the relationship, my answer is no. In fact, we have gained a lot of respect and confidence from our customers, that we have stood by them, and we have helped them to come out of the situation. And it will definitely also increase our customer base. I don't know if that I answered all your questions, or if something remains, please repeat it. Sir, I was saying that we had gained a lot of market share in post-pandemic era, because when the China prices were going up and material was not available, many of the local European guy could not cater to the market, and we gained the market share. And in that process, we added new dealers. So is the return more from the new dealers which we have added in last two years, or it is across? Very difficult to distinguish. We have, in general, received more respect from most of our dealers and customers, that we are a company which is able to support them in a tough time. Okay. Sir, next question, and I'll come back into you after that. Sir, we have shown a very solid volume growth. However, we have seen that there is a huge inventory de-stocking going on. So in that kind of scenario, how you were able to push the inventories in the market? I mean, how we could gather input report this kind of volume growth, and what territory? Sir, this is a very difficult question to answer, but the customers have approached us, we approach the customers, and that bought the goods from me, goods from us. Sir, it may be because you were taking the materials back, so all the high-cost inventory they have given you back and then repurchase the item at a lower cost, right? Yes, sir. In some instances, they say the inventory can stay with us, but you give us the discount from the sale price to prevailing market price, and we've also complied with that request of them, you know. So physically, some inventories have not come back to us, but we have given them a credit note or discount. Okay. So in terms of volume growth and the kind of margin which we have seen in first half, how do we see that the recovery in second half, more importantly, in terms of margins? Is this high-cost inventory liquidation an impact on the profitability and, higher discounts asked by the dealers, all that is over, or there is still some pressure on margin front in second half? Sir, the customers are also aware what the prevailing prices at the source, which is China, are. It's a very transparent system, so we have to also live within those constraints. And if somebody was selling at $100, and if I'm earning 25% margin, then the gross profit for me was $25. But if the same product is being sold at $30, and I'm earning 35% margin still, then my gain is only $7.50. So this is making a big impact, and that's why I would say that there would be a very slow improvement on the profitability. So you're saying that even if the percentage margin may come back to 25%-30%, at absolute level, with a fall in 30%-40% realization, absolute EBITDA or absolute gross profit will be significantly under pressure, even in the second half or maybe even next year as well? I would say in the second half. I don't want to make a guess, it with your guess in the next year. I would say in second half, yes. Okay. Sir, I'll come back to you for further questions. Thank you. Thank you. Thank you. The next question is from the line of Resham Jain from DSP Asset Managers. Please go ahead. Yeah. Hi, good evening, sir. Am I audible clearly? Yes, yes, you are very much audible. Yeah, yeah. Yeah. Good evening, sir. So, sir, I have three questions. First question is, typically, we have seen general behavior of a distributor. Whenever prices are falling, they, they hold up their purchases, and reverse is also true. When prices goes up, demand suddenly goes up. So at this point of time, obviously, prices have come down, but what are your experiences, let's say, of the past, whenever this kind of situation has occurred in the past? Resham, this kind of situation has not occurred in the past. This is a very unique situation, which we feel is in the history of our company's existence, you know. That the prices have dropped and crashed so severely and so quickly, and I do not think that such unique things happen very often. Understood, sir. Very clear. Sir, second question is, as you clearly mentioned, that this kind of situation were unique and since Sharda has a very strong balance sheet, it could sustain all the kind of losses and maybe for even could sustain even more quarters. But lot of smaller marginal players who might be present in this market, even some of the larger companies are facing a kind of balance sheet-related issues and all. Are you seeing any consolidation happening at the smaller...? Obviously, there are very, very few smaller players present, but any consolidation in the marketplace? Resham, we have no active role in these things, so whatever I say would be just a guess. We don't spend much time on what is happening with the smaller players. It could happen. My answer to you is that it could happen, but it may not happen. Okay, understood, sir. That is also clear. Sir, lastly, this is not a financial question, but generally an observation. Over the last three, four years, what we have seen is that there have been multiple changes in the CFOs at the company. Since FY, let's say, 18-19, there are, like, three, four CFOs which got changed, and at a very short interval. And CFO, as a designation for a listed company, is a very important role, especially. So, any thoughts there? How do you see this, with the new selection of a new CFO selection over there? Mr. Resham, we are talking about human beings. Human beings have the same nature, but what I can tell you is that everybody who has come and gone, he has gone with a very big prospectus. So he finds that his tenure in Sharda proves lucky to him, and he gets a better opportunity, better offers, which we are also happy that people are prospering, you know. But we have not forced, we have not created any situation for any CFO to quit our company. We have been able to make the best use of whichever CFO has joined us, and he has helped us to grow the company. Okay, sir. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Darshita from Antique Stock Broking. Please go ahead. Yeah, thank you. Good afternoon, Bubna. Thank you for the opportunity. Darshita, Darshita, ma'am, your voice is not audible. Yes. Can you please switch to the headset? Is it better now? Yes, slightly better, but needs to be still better, madam. Is it better now? Yes. Yeah, so my first question was regarding the prices. I wanted to understand how the prices are moving currently. I mean, do we expect any stock evaluation taking place in the second half of the year as well, or have you already taken the impact of it in the first half itself? Madam, we have taken care of the. We did some stock revaluation also in the first quarter, assuming that that would be the end of the thing, but it did not happen. We have again did that revaluation. The impact has been much smaller than the first quarter, and we feel that right now, there's not much of a scope for further prices going down and our necessity to do any stock revaluation in the third or fourth quarter. Okay, okay. Thank you. That's helpful. Very clear. The second question was regarding, so, our competition in the regions where we largely operate in, that is Europe and NAFTA, would be MNCs and also a few Chinese players. So, when we say that China has been dumping the inventory in the market, what is the kind of discount at which they are dumping, as compared to what we are selling at? Madam, I would not call it as dumping. They are making goods available at the prices, and if they are not able to sell it, they reduce the prices on their own. Okay. This is happening right at the source. If some customer goes with them and presses them for some further reduction, considering their own situation, they comply with that, you know. They are also suffering. Mm. They are not very happy. Many of them have closed their manufacturing plants and sitting on an inventory, and they are also losing very heavily because they have bought the raw materials at a higher level, and now they are forced to sell at a loss. Right. They are not very happy to do that. They are not doing it willingly, but if they are to stay in business, then they have to do these things. Right. So, does a scenario like this result in a market share loss for us of any kind? Market share loss, no, not for us. All right. Okay. Because, because of the entry barrier of registrations, the Chinese players can play any role within China or outside the territories where goods are selling. Inside the territories, the scenario is different. They cannot go and dump anything into the any country without registration. Right. Right. And just one last thing on the pricing. I mean, if we look at the, you mentioned that there is almost a 40% decline on realization during the quarter. If we look at that number, it looks like the prices are way below the pre-COVID levels also. I mean, if we compare that to your FY 2021 realization number versus right now, it looks like the prices are below pre-COVID levels, significantly below pre-COVID levels. So, why, I mean, are we not expecting any, jump, at least, you know, I mean, the prices coming back to the mean level, if not, going above that? Or, I mean, at least reaching the pre-COVID levels. Madam, I have not understood your question very well, but I only understood your remark that the prices have gone down to a pre-COVID level. The answer is yes. And now, a lot of the manufacturers are sitting with high quantity of inventories, and they are also eager to... They also need cash flow. So in the need of their needs, they are trying to increase the price, but then again, they have to also see if there should be customers will, who will increase, I mean, buy them at that higher price. Right. So it's an open, transparent question of supply and demand. Right. And the on-ground demand con- Supply is still there. Right. Excess is there. Excess is there. Got it. And the on-ground demand continues to be strong on farmer level? Farmer level, yes. Farmer level, because if you have... I mean, I'm sure you are doing this, these studies also. The agricultural productions have not gone down. The demand of agri products have not gone down. Right. Right. Even in countries like Ukraine, I would like to let you know that the agricultural activity is fairly normal. We are selling to Ukraine, and our sale to Ukraine during the wartime has been slightly higher than the previous year. Mm. They are paying. Right. Got it. And just, two data-related questions. If you could give us the agrochemical volume, region-wise agrochemical volume. Yes, one minute. Yes, region-wise, agrochemical volume. In Europe, it is 3.6 million, LATAM, 0.8 million, NAFTA, 2.6 million, rest of the world, 0.5 million. Okay, and the gross margins, region-wise? Gross margin, one minute. Gross margin, Europe, 34%, LATAM, 28%, NAFTA, 5%, rest of the world, 45%. All right. NAFTA has been the biggest affected region, and that constitutes also a substantial part of our business. Right. And could you give the difference, I mean, the distribution between volume, price, and exchange? I want, just want to understand if there was any exchange benefit. Madam, your question got blurred. What [crosstalk] Volume, price, and exchange. Volume, price, and exchange. So the, the differ- I mean, the distribution of volume, price, and exchange. Volume has grown. This is globally, no? Volume has grown by 20%. Foreign exchange impact has been about 5%. Price and product mix is - 45%, and total growth is - 19.5%. Got it. Thank you so much, sir. I'll get back in with you. Thank you. Thank you, madam. Thank you. The next question is from the line of Dhruv Muchhal from HDFC AMC. Please go ahead. Yeah, sir. Thank you so much. Sir, what was the sales reversal that we would have booked in 2Q? Q2, Q2? Yeah. One minute. Sales reversal in Q2 has been in the range of about INR 70 crores. Okay. And sir, when you give this volume, price, and, you know, FX split, where does the sales reversal come in? Is it negative on volumes or, I mean, where does it fit in? It fits into the volume growth. Okay. So had the sales reversal not been there, your volume growth would have been this, whatever percentage higher. That is the right way to think of? Yes. Okay. Okay. Sure, sir. And sir, your inventory, even in the, I mean, at the end of 2Q, still seems a bit high in number of days. I mean, if I look, you know, compare it versus the history for the 2 Q period, it is still a bit high. So is there any worrying sign still that in, the inventory that we carry, you know, can still create, create some pressure? See, this is a result of all those reversals that we had to do, and collecting the goods back from our customers. But that process has more or less dried up now. So the inventories will get consumed in the next quarter, you know. Okay, okay. All these inventories are mark-to-market to the current technical prices, so there is no further loss that can come on these inventories? No, it's mark-to-market. Sir, one thing you mentioned about the U.S., you know, distributors of yours, returning goods and [crosstalk] Speaking loudly. Sir, yeah, U.S. distributors returning these goods, because of the pricing impact. Is the same situation also in Europe, or Europe is adhering to the commitments? I'm just trying to understand the intensity. In Europe, it is not, it's very insignificant. In Europe, they only request for extension of the payment terms or some small discount, but not be so much blunt. In U.S., it has been the other way. Mm-hmm, mm-hmm. And, sir, in U.S., what we see, is it specific to some molecules that we had some exposure to, and hence, the impact is large, or it is across many, I mean, many technicals? I would say across. It again depends from, molecule to molecule. Mm-hmm. If some molecules productions have gone up and the demand has been normal than that, then the drop has been very significant. In some molecules, it's not so bad. Mm. So because when we see the data, whatever data we get, you know, it seems the price impact and volume impact for U.S. is mainly in Glyphosate and probably some other herbicides. So I'm just trying to understand, is this very particular to specific molecules? Or, I mean, as you said, it is across many molecules. Mr. Dhruv, Glyphosate is known to be a very volatile product and the biggest product in the agrochemical business. So even in the normal cases, the fluctuations in Glyphosate has been more prominent, more obvious. Other products, there are many other products which has faced this thing, and it is not Glyphosate—they are non-Glyphosate. Okay. It's not only Glyphosate, it is other- Glyphosate, glufosinate ammonium Mm. Which is having similar applications of Glyphosate. That product has seen a very big drop this year. Okay. Mm. In prices. Got it. And, sir, one last thing is, probably two things, sir. You mentioned that, you know, in enthusiasm, a lot of Chinese have set up new capacities also. Sir, is there a significant increase in new capacities in China based on, you know, whatever your ground checks are saying? I mean, say, for example, I'm not sure how you put it, but some qualitative comments there will be helpful, sir. What is the quantum of capacities that have come? What is the new supply that has come up in China? Well, I was there in China about three months back. There's an exhibition, and I'm also going for China, to China tonight for another exhibition, which are annual. Last time when the manufacturers came, they said they have shut down their plants. One manufacturer said they, he said that they had seven plants, and they've shut down four of them because they cannot afford to run them. Now I think the situations are getting more normalized. The shutting down process may not be so abrupt, but I get the feedback from when we talk to them and communicate with them, that they're still sitting with a lot of inventory. Okay, and the [crosstalk] No, nobody's daring to put up a new plant. So they've already put it, seems, of not so many. Yeah. Yeah. Sir, last question, The biggest problem would be to restart the plants that they have shut down- Mm. If the demand goes up. Yeah. Which is not happening so far. And sir, last question is, sir, any guidance you can give for sales growth for the full year 2024 this year and the EBITDA growth, that EBITDA margin probably that you're expecting? Or just for Q2 FY24, what is the growth that you're expecting in EBITDA margin? I think we'll have to wait and watch the situation. If I'm going to give you something, this is going to be a guess, which I prefer to avoid. Sure, sir. No worries. Thank you so much, sir, and all the best. Thank you. Thank you, sir. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your question to two per participant. The next question is on the line of Vishnu Kumar from Avendus Spark. Please go ahead. Hello. Thanks for your time, sir. But over the conversation, you mentioned high inventories across manufacturers, China, and also the end market. So when we look at over the next two quarters to four quarters or 12 months or so, how should... How are we thinking in terms of planning our inventory, how purchases? Or when do you think this situation, in your opinion, will normalize? Because you also said this is a unique case, and so when we are really getting into the market, how are you thinking the market will change? Mr. Vishnu Kumar, this process is very simple for us, and one of the reasons for our it being so simple for us is that we are very nimble-footed. We are not manufacturing, so we, we very easily can switch from one product to the other product without any botheration of any restrictions at all. Most of our planning is guided by the discussions which we have with our distributors, our customers, consumers. And they give us a feedback, at this season, this product is likely to... And then we plan to source them in. We are not planning so much in advance that this thing will happen. We always get a feedback from our customers, and then we do the planning. Understood, sir. So current feedback that you have, at least when do you think this excess inventory situation will normalize? At least whatever feedback you have on an industry or more, this is more from an industry question. Trying to understand when this will, excess inventory will probably change, in your opinion. See, some customers who must have bought 10 containers from us are asking for only two containers now... but they're asking for some product quantity. So this gives us an indication that earlier it was out of excitement, out of greed, and now they are being more practical. Understood, sir. The question we are, we are presuming at least the end level customers, distributors, they are not speculating. Do you understand? Chinese are obviously not speculating because they're already suffering with the inventories. So this gives us an impression that slowly the things will come back to reason and normality and logic. Got it. Just a timeline, if you have anything that you think will change this, this finally, what you said, if there is any timeline you think it will improve? I have already said that this is moving towards normality, and the speed is not very big. Speed is normal or less than normal. Understood. Sir, first off, is most- Sorry for the interruption. Vishnu, sir, may we request you to return to the queue, please? Thank you. The next question is from the line of Rohit Nagaraj from Centrum Broking. Please go ahead. Yeah, thanks for the opportunity. So my first question is, again, harping on China. So what is your assessment from Q1 to Q2 in terms of the supplies coming from China and the pricing of products? I mean, how it has changed, on a QOQ basis. Your thoughts on that? Thank you. Mr. Nagaraj, this depends from product to product. You cannot generalize it. In some product, there is an excess capacity or excess stocks. The normalizing process is very slow. Some products, it is getting faster. That's the only thing I can say. It's very difficult to generalize. Sure, sir. That is helpful. Sir, second question is in terms of weather-related challenges in any of the geographies. Are we seeing it across any geographies and for particularly some crops in those geographies? Thank you. Sir, those things are also the fact and reality. In some European territories, the weather has not been so good, and our customers and distributors are sitting with the unsold stock, you know. But this has not been the case. You cannot generalize it. Sure. It's happening in some pockets of the Europe, some pockets of also U.S. Right. Right. Thank you so much, sir, and best of luck. Thank you. Thank you. The next question is from the line of Anuj Sharma from M3. Please go ahead. Yeah. Thank you for this opportunity. So two questions. One is, you know, our model has been challenged for the first time as you- Sorry for the interruption. Anuj, sir, can you please come closer to the handset? Yeah, I am on the handset actually. Is my voice audible? Yes, yes. Please go ahead. Yeah. So I was saying that our model has been challenged for the first time, considering the price falls. Do you, do you intend to have any changes to the model, or what are the key changes you will bring about after this, price falls? See, Mr. Anuj, we don't see any reason to change our model because of this. We feel that this model is the most flexible one, and we would like to continue with that. Okay. Just in terms of how do you deal with your customers, any, any changes or, you know, these are, this is part of the trade, the, the rejection of goods. Anything you can think about in that or, and that's part of the trade? I think it's a part of the game, and this does not happen very often. As I've told some of your colleagues that this has... We are facing this for the first time in the history of our company. I don't think these things are very, they are going to be normal or usual. Okay. My second question is on the non-agrochemical segment. Now, behavior also in terms of pricing seems to mimic the agrochemical segment. Now, I understand these were more manufacturing-oriented stocks. How is the pricing so much varying in the non-agro segment, especially in Europe and- The variation has not been too much. For your information, many of our non-agro products are giving us better margins than the agro products at this point of time. The only factors which were affecting the non-agrochemical business were the logistics costs, the transportation costs, which became very significant, and transportation had increased more than 10-12x. Those prices, the freight and transportation costs are coming down, but we are, non-agro business is made to order. It's not keeping inventory and then selling. So the inventory problem has not been very severe in non-agro end. Okay. You know, when I look at your slides, it seems to indicate the pricing fall in even non-agro in the first half is more than 20%. And I was wondering, how does that function? Mr. Anuj, that price includes the cost of freight. Okay. Okay. The freight has come down from, say, $100 to $10 now, back to the pre-COVID times. Okay. Okay. Okay. All right. Thank you. That answers my question. Thank you, sir. Thank you. The next question is from the line of Siddharth Gadekar from Equirus. Please go ahead. Yeah. Hi, sir. My question is specifically to the North American market, where we have seen a significant drop in our gross margins. Can you just highlight how much is the contribution from Glyphosate and glufosinate to the overall drop? One, and secondly, in terms of the end demand, are we still seeing inventory built up there, or are things likely to go back to normal in the next two, three quarters? Sir, your voice was getting cut in between for the first part, so can you repeat the question once again? So in North [crosstalk] A little louder and speed should be a little slow. Sir, in North America, specifically, we have seen a sharp drop in our gross margins. How much of that would you attribute to Glyphosate and glufosinate? 1. Secondly, in terms of the inventory levels in Glyphosate and glufosinate, is there still a significant amount of inventory built up even for CY 2024? How should we look at it? Sir, you... Now I'll answer your question. Glyphosate forms a very small part of our total business. Glufosinate, yes, but most of the inventories have been taken care of. Nobody is sitting with a significant inventory. In fact, we are buying something for the new requirements at a price which is about 20% of the original prices that we paid. And selling it with about same margins that we are earning, but the absolute margins are much lesser. Is it fair to assume glufosinate is still below $10, and even for the third quarter, we are not seeing any recovery in those prices? You are very intelligent, and you know all the things. Yes, you're right. Glufosinate selling at $10- less than $10, which was otherwise selling at $45, $45. Okay. Okay, sir. Sir, in terms of cost of production, you will have any sense what would be the cost of production in glufosinate or that we can get a sense that when can we see recovery? Mr. Vidyut, how does it help us? We can go get into a lot of details, but does it help us? We have a lot of better things to do, look at our, our business than looking at the manufacturer's business. Manufacturer is crying. Manufacturer is very unhappy with these prices. He's forced to sell it at these prices because he also needs some cash flow. Okay, sir. Got it. What is his raw material prices now and at that time? That's a very, long thing for us to go, which is not necessary for us. Okay, sir. Yes. Thank you. Thank you. Thank you. The next question is from the line of Dhruv Muchhal from HDFC AMC. Please go ahead. Hello? Hello? Sir, only I can hear you. Probably, he's not able to hear you. Hello? Hello? I think he must be... He must have put it off- Hello, sir? Or something like that. Hello? Ladies, ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to management for closing comment. Thank you everyone for joining us. I hope we've been able to answer all your queries. We look forward to such interactions in future. We hope to meet you- meet your expectations in the future, too. In case you require any further details, you may contact us or Mr. Deven Dhruva from HGA, our Investor Relations advisors. Thank you once again, and have a nice evening. Thank you. On behalf of Antique Stock Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.