Ladies and gentlemen, good day, and welcome to Sharda Cropchem 3Q FY24 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 your touchtone phone. Please note that this 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. Yeah. Thank you, Seema. Warm welcome to all the participants on the 3Q FY 2024 earnings call of Sharda Cropchem. From the management, we have Mr. R.V. Bubna, Chairman and Managing Director, Mr. Shailesh Mahendale, CFO, and Mr. Dinesh Nahar, GM, Finance on the call. Without any delay, 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 evening, and very warm welcome to everyone present in this call. Along with me, I have Mr. Shailesh Mahendale, our CFO, and Mr. Dinesh Nahar, General Manager, Finance, 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. I'll give you some background. We specialize in marketing and distribution of wide range of agrochemical products, that is, herbicides, insecticides, fungicides, and biocides, catering to the diverse global customer base. We prepare comprehensive brochures and seek registration of our products in our own name. We allocate substantial resources and establish our foothold in the markets. Our total product registrations stood at 2,901 as on 31st December 2023. Additionally, 1,075 applications for product registrations globally are at different stages of approval. The CapEx for the last nine months of FY 2024 stood at INR 276 crore. For the full year, we expect the CapEx in the range of INR 352 crore-INR 400 crore. For Q1 2024, the revenues have got reduced from INR 1,017 crore to INR 632 crore. We have seen a volume reduction of approximately 20% year-on-year on our products. Volumes of agrochemicals reduced by 21% year-on-year, and volume of non-agrochemicals reduced by 16% year-on-year. Revenues got reduced mainly due to weaker demand because of drought season in Europe and adverse weather conditions in NAFTA region. Also, there has been lower product price realization across all the regions. Gross margins have got reduced from 30.5% to 26.2% in Q3 of financial year 2024. The finished good prices have also reduced substantially. We have done stock revaluation as our accounting policy, and that has impacted our gross profit and profitability to the tune of INR 7 crore in Q3 FY 2024 and INR 91 crore in the nine months of FY 2024. The company is seeing an improving trend in Q4 FY 2024. With this brief review, overview, I would now like to hand over the call to our CFO, Mr. Shailesh Mehendale, for discussing our financial performance. Thank you, everybody. Over to you, Mr. Shailesh Mehendale. Yeah. Thank you, sir. Good evening. Good evening, everyone. Coming to quarter three, FY 2024 performance, revenues stood at INR 632 crores in quarter three, FY 2024, versus INR 1,017 crores in quarter three, FY 2023, with a reduction of 38% year-on-year. Coming to the split, agrochemical business reduced by 40% year-on-year to INR 508 crores, whereas the non-agrochemical business reduced by 29% year-on-year to INR 124 crores. Gross margin stood at 26.2% in quarter three, FY 2024, as against 30.5% in quarter three, FY 2023. The finished goods prices have also reduced substantially. We have done stock revaluation as per accounting policy, and that has impacted our GP and profitability to the tune of INR 7 crores in quarter three, FY 2024. EBITDA stood at INR 47 crore in Q3 FY 2024, which is mainly due to the decline in the gross margins and increased other expenses which are relating to strengthening of our global workforce to support future growth. As for the quarter stood at INR 4.6 crores. Coming to nine months FY 2024 financial performance, revenue stood at INR 1,851 crores in nine months FY 2024, versus INR 2,630 crores in nine months FY 2023, a reduction of 21%-28% year-on-year. Coming to the split, agrochemical business reduced by 30% year-on-year to INR 1,424 crores, whereas the non-agrochemical business reduced by 20% year-on-year to INR 427 crores. Gross margin stood at 19.8% in nine months FY 2024, as against 28% in nine months FY 2023. We have done stock revaluation as per accounting policy, and that has impacted our GP and profitability to the tune of INR 91 crores in nine months FY 2024. EBITDA stood at INR 919 crores, whereas PAT level reported loss of INR 112 crores for FY, 9 months FY24. Working capital days as on thirty-first December 2023, stands at 131 days. We remain debt-free company and holding cash and cash equivalents of INR 370 crores as on thirty-first December 2023. The company is seeing an improving trade in quarter four of FY24. Thank you. We can now open the floor for questions and answers. Thank you. Thank you very much. We will now begin with 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. Thank you. We take the first question from the line of Viraj from SiMPL. Please go ahead, sir. Yeah, thanks for the opportunity. Just a couple of questions. First is, you know, if you can just probably give the figure for sales return in the nine months 2024 and for the quarter. And- One minute, sir. May I know your good name? Viraj. Mr. Viraj, your voice is getting cut in between, and also, it's not loud enough. So can you speak little louder and maybe- Yeah. Bring the headphone closer to your mouth? Yeah. So can you give me the sales return figure for the first nine months and for the quarter? And second question is, you know, in the other expenses, you talked about higher investment in your whole workforce. But, you know, when you look at our own employee costs, you know, it's hardly 1%-2% of our sales. So what is driving this higher expenses, you know, for last few quarters for us, so? One minute. The sales return figures are being... Mr. Viraj, the sales return figures are not readily available, so we'll be able to provide it later. Sure, sir. And employee costs. One minute. See, we have expenses. We don't have the employee costs so much, but we engage more than 300 people outside India, and all those people are working with us as a consultants. Instead of having employee-employer relationship, they are consultant and client relationship. So client consultancy charges have gone up by almost 18.5%, year-on-year. Similarly, professional charges have gone up by 48.2%. Business development expenses are also professional and marketing expenses of the consultants. That has gone up by 26%. Service charges have gone up by 46%. And total, these expenses have gone up by 24.45%. All the expenses that I mentioned, if they're put together. Okay. And would this rate of investment would continue in the coming in, or? Rate of investment in the registration, yes. Yes, Mr. Viraj, it will continue because it is not a one-time process. If we take up any product for registration, then the process of registration lasts maybe two, three, four, even five, six, seven years. You cannot stop them in between. And this is the backbone of our business model. We, in order to get entry into the markets, we have to have a lot of registrations. You cannot market any of agrochemical products in any country without having the registration of that product and that formulation of the same molecule in that country.... So if you are to stay in business, we have to continue continuously continue the investment in this registration processes, which is our capital expenditure. Thank you. No, what I, what I was asking was the rate of growth in some of these expenses, like the consultancy and, you know, the service charges, the business development, will that rate of growth would largely continue in coming years as well, or this is like more of a one time, you know, we should kind of meet this kind of level? Registration cost. Yeah. The rate of growth will increase because the process of registration is becoming more expensive, more difficult, and more time-consuming. Okay. As far as the other costs are concerned, they would be I mean, the increase will not be very much. It could be also controlled to on the lower side. It depends. Okay. Second question was on the competitive dynamics, right? Now, if you look at, say, this particular quarter, we had seen a volume degrowth of somewhere around 21-22%. Now, if you look at the actions of some of the larger Chinese players, say, you know, there's a player called Rainbow and there are some similar ones. In last one year alone, some of these guys have acquired, say, plus 1,100 registrations, you know, each player. So and they are looking to increase that pace of registration acquisition to participate in a lot of generic molecule play, you know, as against being a manufacturer. So for some of these major markets which we cater to, if you can give any color in terms of how the competitive dynamics, you know, has played out. So this growth, degrowth of 20% is more driven by end market demand as being lower, or you're seeing a competition dynamics also changing? No, sir, this degrowth has nothing to do with the registration costs. The degrowth is mainly because of the reduction in the prices of these products, mainly the reduction in the prices of same products. In some products, the prices have gone down to about 25% of what was prevailing one year back then. So the degrowth is mainly on account of this reduction in the prices. No, sir, what I'm asking is, this degrowth of 20% in volume, which you've seen in quarter three, is it also driven by increase in competition? So has there been any market share loss or change in market shares in the major markets which we cater to, or it's more driven by end market being? Well, the main reason is the degrowth of the market itself, because of the adverse weather, drought in European region and, complicated weather in the United States. It is only because of these factors. Okay, just one last question and I'll come to you. You know, if you look at the working capital again, right, we've seen a very sharp increase both in receivables and inventory. So do we see any risk of further provision, either for bad debts or for inventory write-offs, you know, in coming quarters? No, I don't foresee any provision for these things. These working capital have gone up mainly because of poor sales by our customers. And that is responsible, that is because of adverse weather and drought situation in many important countries. But this is not likely to continue year after year. Okay, thank you. Thank you. Thank you, sir. We'll take the next question from the line of Rohit Nagaraj from Centrum Broking. Please go ahead, sir. Yeah, thanks for the opportunity. Am I audible, sir? Hello? Hello, am I audible, sir? Yes, you are audible, Mr. Nagaraj. Yeah. Thank you. Thanks for the opportunity. The first question is, on the supplies from China. So we've been hearing during the entire 2023, and your comments also, that there have been, significant supplies which have come from China. So what is your assessment, currently in terms of whether the supplies have alleviated or the momentum is still continuing, and a general understanding of inventory situation across, different regions of your operations? Thank you. Mr. Rohit, the situation in China continues to be the same. All the manufacturers are sitting with huge inventories. Some of them have reduced their production, some of them have closed the plants with who had more than six, seven plants, but they are still, the inventory level is still continuing to be very high and very uncomfortable for the entire world. Right. Right. The second part of your question? The inventory situation across different markets, what we hear is that Latin America still has a lot of generic inventory. Your understanding of the same? Mr. Rohit, these are not available as in public domain. It's very difficult to make an assessment, and it does not help us in our business model. We can only tell you that there are inventories also in the pipeline and also in the destination countries. Sure. Sure. That's helpful. The second question is in terms of the Red Sea issue and the freight costs, which have jumped almost 2x, 3x from China to the European region. So what is your understanding of whether there will be a significant impact during Q4 in terms of the freight costs for us, given that we will be supplying, we are originating our materials from China and supplying into different geographies? Thank you. So it is just the beginning of the Red Sea disturbance. The freight rates have already gone up more than three times, but it has not made any significant contribution into our business because this is not the correct period for us to make excessive shipments, you know. Most of our goods have already been transported to the destinations. So Sharda Cropchem is not so much affected, but I cannot comment about the entire industry. Sure, sure. This is helpful, sir. Thanks a lot, and best of luck. Thank you. Thank you, sir. We'll take the next question from the line of Preet Malde from Centra Insights. Please go ahead. Can you please pronounce the name little more clearly and louder? It's Preet Malde, sir. Please go ahead, sir. No, your voice is, again not so clear. Yeah, sir, this is Preet Malde over here. Malde? Preet, yeah. Preet Malde. Preet Malde. Yeah. Okay. So, I have a few questions regarding the registration costs. And then we- Which company you represent? Centrum Insights. Which one? Centra Insights. Centra Insights. Yeah. Okay. I understand that the registration costs have been going up significantly. Historically, we have been able to maintain more than 20-25% ROCE levels. So what can we expect from now on? We have been to maintain 20-25% ROCE levels and around 5-6 times asset turnover. So what can we expect now? Sir, we think that the same rates will continue. As and when these registration costs are becoming more expensive, it is also becoming prohibitive for the competition. Mm-hmm. This trend will continue. Okay. And do we see the prices coming back to normalcy in any sort of near future, in the next quarter or in the next year? What is the guidance that you can give? See, I am not an astrologer, I can only give you a little comment. In the near future, no, but within a year, I am quite hopeful that they'll go up. Within the next year? Yes. Okay. And our CapEx guidance for INR 350 crore-INR 400 crore remains the same, right? It may remain the same or it may even go up. It may even go up. So I actually want to understand if the registration costs are going up, how much have the registration costs gone up since the last year, if you can give a number and percentage? As I explained to you, this is not year-on-year. Okay. One process, registration takes five-seven years. So Yeah I can only tell you that the requirement of the authorities is going up. Yeah . year after year. The data they require and the details they require are also going up very much. But this is very arbitrary, there's no hard and fast rule or trend or practice in this field, so it's very difficult for us to comment. Okay, okay. Our turnover ratios and profitability ratios won't be affected so much because it is going up for the whole industry? Yes, please. Okay, okay. Thank you so much. That's it from my side. Thank you, sir. The next question is from the line of Himanshu Upadhyay from O3 Capital. Please go ahead, sir. Yeah, hi. Good evening. My first question is, last time when we met, you said that our major focus is on getting the receivables back, okay, and collection is the priority for us. And right now also, if we see the receivables remain high only, or they have increased, can you give some analysis on receivable dates, and how much would be pending for more than six months? And is it still the highest priority, or you think the payments and everything have started smoothening out Sir, I don't recollect I said that this is our highest priority, because receivables have been our priority all throughout. But I don't think I ever used the word highest. It will continue to be, our priority, and it's very normal. Okay, okay. When you say that the market situation is improving, in the starting comment, is it you are seeing that the demand is improving, or you are seeing the prices have stabilized, or you are seeing both the things are improving? Can you repeat your question once again, Mr. Upadhyay? You said that market situation is improving, okay, in the initial comments, okay? Yes. Is it, is it because of demand side you are improved, seeing an improvement, or the prices have stabilized and hence, you are saying the situation is improving, or both have started improving? Any- Sir, I mean, present scenario, price is not a big incentive because everybody is having enough stock. And when I say improving, I said it is improving, but the scale, the speed of improvement is also very small. It has not picked up in a big way. It is improving because many Chinese factories have stopped their production. They cannot afford to hold the stock for such a long period, it's a big, big strain on their finances. So the productions have gone down, but availability still continues to be in abundance. And then the final distributor end, okay, in NAFTA and Europe and Latin. Still the inventories are very high. Do you think the situation has improved? I beg your pardon? The inventories that the dis- No, Mr. Upadhyay, these figures are not available in public domain. It is anybody's guess. All I can tell you is that the inventories are there, and the enthusiasm of the distributors or the customers is lacking. Earlier, the distributors and customers used to be very anxious to build up the stock and inventory, but at least in this year, they are delaying the decision of purchasing because they feel that the inventory situation is very comfortable and they don't feel very anxious or nervous of not getting the products. One thing, we stated why we are not yet present in India. It is because the payment terms are not very great in India, okay? Outside India, the payment terms are much better. Okay. I think, can you repeat your question, please? One of the earlier transcripts, we have stated that, why we have not focused on India was because the payment terms are not very great, okay? The payment gets generally very delayed from the distribution side, okay? But if you look at- I made this statement as bluntly as you are quoting me. Our main reason for our not being present in India is the registrations. In India, the manufacturers are the registration holders also, and we don't have our own manufacturing. So even if we get the registration, we have to depend upon the manufacturer, who themselves are also marketing the same product in the same market. So that is why the Indian market doesn't fit into our business model. We are a asset-light company, and we outsource everything. That model does not work in India when there are so many manufacturers present in India for most of the products. Thank you. Okay, thank you. Thank you, sir. We take the next question from the line of Bhavya Gandhi from Dalal & Broacha Stock Broking. Please go ahead. Yeah, thank you for the opportunity. Am I audible? Yes, please. Yeah. Just wanted to know what has led to the growth in insecticides as a segment, because that has grown 21% vis-à-vis herbicides and fungicides. Is it due to some specific reason or better placement? If you can just help on that front. Sir, it has grown up, but in the absolute terms, the growth is not so much. From INR 97 crores to INR 118 crores, and there's no specific reason. It all depends upon the cropping pattern and the climates. In general, the insecticides have a bigger demand in tropical countries. In the cooler countries, the insecticides have very less demand. So we have not spent our energy in trying to analyze, but I don't think it has any specific reason. It's just normal, it happens. Okay, got it. And also, with your experience in agrochem over the years, just wanted to know, whenever this restocking happens, is it like a steep recovery, or is it like a gradual recovery where, you know, distributors start restocking? I mean, if we want to, you know, model our numbers, is it like next year could be a sudden bounce back, or is it going to be a gradual recovery here on? I think it is going to be a gradual recovery. Okay. It's not going to be steep or all of sudden big demand. Okay, got it. And also just wanted to know, what is the amortization policy with respect to registration? For the newer registrations, like, what sort of policy, how I mean, across, for how many years we amortize our registrations? If you can throw some light on that. See, we amortize our capital assets over a period of five years. Okay. That has been the practice right from beginning, and it continues to remain the same even at present. Okay. Also from an end demand consumer standpoint, just wanted to know, how is the sentiment? Is it like the end demand is also still getting affected, or is it only because of the channel inventory we are facing demand issues? Sir, nobody is excited in this our market today. Everybody is suffering. Even the end user who has purchased the product six months back is nervous because the current prices are much lower than what the inventory he has. So there's no excitement among anybody about the demand. Okay. Got it. Just one last question. Wanted to understand, whenever we supply to NAFTA, Europe, is it to third-party distributors or is it to our own distributors? Like, what is the business model, if you can throw some light on that? Mr. Gandhi, none of the distributors are owned by us. They're all independent players, and they act in their own way, seeing the circumstances, the market dynamics, and they take a decision. We don't own or we don't have anything like a own distributor. Many of our distributors are also distributing for the multinational companies and innovators. Got it. Got it. Got it. Fair enough. And just one more thing, Chinese players who are the manufacturers of our product, do they also have their own registrations in the market that they... I mean, we supply? ... No, so normally, a manufacturer is not interested in registrations. He feels that his capital would be much better if he invests into tangible assets which he can see, even sell at a time of need. Intangible assets are not very exciting and interesting for a manufacturer. Got it. If he has extra capital, he would like to put up another plant or increase the capacity of his plant, rather than investing in funds into invisible and intangible registration assets. Got it. And with the surplus cash that we have Maybe the question- Sir, you have put too many questions. Sure, sure. Thank you. We'll take the next question from the line of Mr. Dhruv Muchhal from HDFC AMC. Please go ahead, sir. Hi, sir. Namaskar, sir. Sir, yeah, for 3Q, you gave volumes for agrochemicals division was down 21% YOY. What is price and effects? One minute. You talk for agrochemicals or, both together? For just Agrochemicals, sir. Yeah. Sir, we don't have figure for agrochemicals. We have figures for the in both, both the things, the total company. Okay, sir. Overall is also okay. FX impact has been +2.3%. Volume has contributed -20.8%. And, Thank you. Price and product mix has impacted by 19.4%. Overall, growth has been going down with almost 38%. Sir, the other thing was, so last time you had mentioned that, anything in the previous or the call prior to that, that, some of the distributors in North America are saying that, "Take away the inventory or give some extended credit period." Sir, is that situation over now? Whatever that situation was, is that over or still it continues? Sir, please repeat your question. It's a little, there was some small problem with the voice. Yes. Yeah. Can you repeat the question once again? Yeah. Sir, I was saying that, in the prior calls, you had mentioned that in distributors in North America, where, you know, because of the lower prices, were saying that you either take the inventory or give us some discounts. Sir, is that situation over or I mean, still that situation, I mean, still it continues in 3Q and 4Q also? No, sir. That situation was a very unique situation when the prices dropped significantly in a period of time. Now, everybody has got used to it. Nobody is buying in big quantities, and also the decline in price has gone down considerably. Hmm. Okay, okay. Got it. And sir, last question is, what would be our net cash, sir, by the end of net cash or net debt by the end of FY, by December end? You said, this end of Q3 or, you said next year? Q3 Q3 Q3 sir, Q3. Net cash at the end of Q3 is INR 370 crores. 370, okay. Sure, sir. Great, sir. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Gokul Maheshwari from Awriga Capital. Please go ahead, sir. Yeah, hi. Good evening. Am I audible? Speak a little louder, sir. Yes, I am. Is this okay? Am I okay now? Now, it's okay. Okay. Thank you. So, Bubna ji, you've mentioned two important things. One is that the inventory in China on the manufacturing side continues to remain elevated, and on the other side, you're mentioning that you're hopeful of price increases possibly coming in this year. Now, two questions based on that. I mean, if there is a lot of inventory yet, where do you I mean, one way, what we have to see is that a lot of production has to go out of the system, which you did allude to. So can you just highlight any point on regarding that? Sir, I thought you, I mean, your question has been little longer, and I thought you had provided answer also to the questions, yourself. Can you be a little more brief and, Yes, okay. Specific about your question, sir? Yes. So, no, because I was a little confused that one way we are saying there is a lot of inventory in the system, and one way we are a bit hopeful of price increases. So where- No, no. Can you repeat the last sentence again? Yes, sorry. I'll repeat myself. The second part I was saying is that somewhere when someone raised a question about price increases, and you did mention that we are hopeful those prices, and price increases come through in a within a year. Yes. If we have a lot of inventory in the system, where do you see that hope coming from for the price increases to happen? Sir, as I have also mentioned, the Chinese production capacities have been reduced by the manufacturers voluntarily. And, that means- Oh ... addition to the inventory is going to be less, and whatever demand is catered to our suppliers, the inventory level will go down, and this will contribute to slight improvement in the prices. Okay. Because everybody is suffering, and everybody is eager and doing his best to get a better realization, better prices. Okay. So I think, so net/net, in a way, what you're saying is that with a certain level of price increases, that inventory can get absorbed in the system? Yes. It's a natural phenomenon. Yes. Okay, I think that answers my question. Thank you. Thank you, sir. Thank you, sir. The next question is from the line of Rohan Gupta from Nuvama. Please go ahead, sir. Rohanji, hi, sir, good evening. Hi, good evening. Sir, the first question is on our increased working capital stock, both inventory as well as debtors, has gone up compared to last year. While the focus was on collection and reducing the inventory, but it has still gone up. So it is very muted demand scenario which has impacted this, or we have just increased the inventories to benefit from the expected price rise maybe in future, or debtors are not paying. I mean, is that driven by that reason? No, sir. Now, you, can you repeat? You said you put your question in three parts. What I feel in general is that the first part is right, second and part, third parts are not right. But if you can repeat, I can answer you specifically each part, and then wait for my answer. Sir, what was the reason for increase in inventories? The reason for increase in inventory is slow receipt of the payments and inventory which was returned back to us by our customers. We have not added to them, voluntarily we have not created those inventories. These inventories got created because of the return by the customers who could not sell their products. Sir, the second is then, what was the reason for increase in debtors? Increase in the debtors, one minute. Is there an increase in the debtors? [audio distortion] Rohanji, you will be surprised, pleasantly surprised. Our debtors have reduced from INR 1,830 crores to INR 890 crores, so almost 60%. Okay. Between March 2023 and December 2023. So we are comparing four month periods with four quarters and 3 quarters. Last quarter our sales are also very high, so that is one of the reasons. I don't have ready figures for December 2022 for the debtors, but there is no significant increase in the debtors, sir. Sir, if I understand our business model right, then we have always and we should always be beneficiary when the prices fall of the raw materials, because we don't manufacture anything, we just buy from the market. This is the time when we have seen the maximum price fall has happened in China. But on the contrary, where we should have gained in the current environment, we still posted weak margins and losses, and also have to give probably higher discount to the customers to collect the payment. So, sir, is it this understanding probably about our business model that is wrong? Because even the raw material prices fall, we won't benefit. When the raw material prices will go up, at that scenario also we won't benefit, like how we have seen in the post-pandemic environment when the prices were going up. Sir, there seems to be some disconnect in our business model. Just wanted to understand your thought process on that. Rohanji, your question has consumed nearly four minutes. I would answer all those questions very pleasantly if you break it down to one question and one answer, and then second question and second answer. So repeat your question part by part and wait for my answer. Sir, I just want to understand, in a falling raw material prices, ideally, we should have benefited. I will answer this. Yes. Sir, our inventory has increased not because of our voluntary purchases. Our inventory has increased because our customers were very enthusiastic, almost one and a half years ago, to build up the inventory because they had passed through the COVID situation, where the material was not available to them as per their demand. So they built up, they ordered, and by the time the goods were delivered to them, there was a steep decrease in the prices. So they returned the goods to us, and in spite of fighting them with them on the legal questions and ruining our relations, we And following the trend of the market, we gracefully accepted the goods back because they were supplied to them on credit. And they said, "If you don't take it back, we will not be able to pay you." So our inventory got built up involuntarily because of return of huge amount of goods by our customers. Now, come to the next part of your question. So, sir, when the prices, raw material prices now have started going up, are you expecting that they, at least, they will not fall over next one year, because Chinese supply is coming down, so they may go up. Do you think that we will go back to the previous level margins, sir, at gross level? Sir, this is the, that's what we hope. But I want to tell you, our inventory levels will also go down because we will sell to our customers from the inventory we already have Our purchases from China has got reduced considerably because there is no fresh demand. Third question, third part of your question, Rohanji? No, sir, I think that answers both the questions. So thank you very much, sir, Thank you. for answering so patiently, sir. Thank you. Thank you, sir. We take the next question from the line of Manav Kapasi from B&K Securities. Please go ahead, sir. Yeah, thank you for the opportunity. Am I audible? Yeah, you have to speak little more louder Okay. So, last quarter, sir, you had given gross margin breakup region-wide, as well as, agrochemical region-wide volume. So if you can help us with this quarter number, sir? Yes, sir. Yeah. Uh, region-wise- Yeah. Our, what is this? Gross margins. Yes, gross margin, sir. Gross margin, you want in quarter three or nine months ended, quarter three? Quarter 3, FY24, just for the quarter, sir. Quarter three, okay. Our gross margin in Europe has come down from 37.7% to 36.4%. Very marginal drop. Okay. In Latin America, the gross margins have gone up from 24%-31%. Okay. In NAFTA, gross margin have gone down from 27% to 12%. This is the region which has been very badly hit us, and this is the contribution to high inventories and very poor margins. Okay. Gross margin in rest of the world has stayed stable, 25%-25%. Okay. Then, volume breakup, region-wide for agrochemicals? One minute. Sir, I appreciate these questions, very intelligent questions. Our volumes. In Europe, the volumes have gone down from 3,300 to 2,850, minus 13%. Okay. In Latin America, the volumes have gone up from 422 to 503, an increase of 19.3%. NAFTA region, the volumes have gone down considerably from 5,000 to 3,250, amounting to -35.3%. Rest of the world, the volumes have gone up from 1,055 to 1,105, almost 5% increase. Overall, the volumes have gone down by 21%, put all the four regions together. Okay, understood. Thank you so much, sir, and all the best. Thank you, sir. Thank you, sir. We take the next question from the line of Mr. Viraj from SiMPL. Please go ahead, sir. Yeah, hi. Am I audible? No, sir. You have to speak little louder. Got you. Just a couple of questions. One is little clarification on the cash part. You know, you said the debtors have reduced from INR 1,830 crores to INR 890 crores. So it's almost INR 90 crores reduction in debtors, in last 9 months. But, you know, it- I, yeah, from like nine months. Yeah, you're right. But our overall cash component has just increased from, say, INR 323 to INR 370. So is it- Maybe you have to look at the inventory. Yeah. Yeah, I was clicking on that, yeah. Receivables. These are the two, three factors which like to lead to the cash results. No, receivables have you said that it's already reduced by almost INR 950 crore? So, is the major part of that in inventory, right? Yes, please. Okay. Just couple of questions on the non-ag chem business. You know, if you look at this space, right, it's primarily conveyor belts, you know, for us and the market- I'm not able to understand. Please speak little louder and slowly. Yeah. If you see the business right, it's mainly conveyor belts is a product which we cater to. Okay, non-ag chemical, yes. So can you give some perspective on what is driving growth in this business for us? Because the market is, you know, you have seen an industry which is a multi-billion dollar industry, and you're, you know, unless there's a consistency in terms of supply and good credentials in terms of manufacturing, companies usually they don't entertain, you know, new suppliers. So for us, what is driving this growth in this business? Sir, I can only say one thing: service, quality, and transparency. At the same time, we don't have a very big share of the world market. We may not be having more than 10% of the world market, so a small, significant increase in our company's market contributes to very small part to the world market. ...if we have to understand the mix in that business, say between replacement versus new projects, you know, how would that mix be like? I cannot comment on this. I have not looked into it from that, angle. Okay. Generally, is it more of a replacement driven business or is it more of a project driven business or? Demands are replacements. Sorry, sir, I didn't hear that. Most of our demand is coming from resellers, distributors in that particular region. We do not have any access to the end users. Okay. Just one more question on this. You know, if you look at the margin in this business, you know, in last 10 years, we've been earning around 17% operating margin, and in last nine months, we've gone 24% operating margin. So what is driving such a high margin for us? And why, you know, if a manufacturer sees this kind of a margin, then what stops them from entering in this, you know, further in, into the end market? Because unlike agchem, there is no registration required here. That this business is purely service-oriented. If you supply the customer quality goods in time, the customer becomes good friend, and he comes to us again and again. I can only say maybe our competitors are not so efficient or so, competent to give them the same service. That's the only thing I can say. Okay, and this increase in margin- In our hands to influence him or mesmerize him. Okay, so the increase in margin also in the last nine months to, say, 24%, what is that, you know, driven by? So, pure buying and selling things with little alertness and smartness. Okay. Thank you, sir. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to Mr. R.V. Bubna for closing comments. Please go ahead, sir. Yes, madam. Thank you, everyone, for joining us. I hope we have been able to answer all your queries. We look forward to such interactions in the future. We hope to meet your expectations in future, too. In case you require any further details, you may contact us or Mr. Deven Dhruva from SGA, our investor relations partner. Thank you very much. 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.