Ladies and gentlemen, good day and welcome to UPL Limited Q1 FY-2022 earnings conference call. 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 we 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 Ms. Radhika Arora. Thank you, and over to you, ma'am. Hi. Ma'am, we can't hear you. The audio is breaking. Good morning and good evening, ladies and gentlemen. Is it better now? Yes, ma'am. Please go ahead. Thanks for joining us today for the results for the quarter ended June 30, 2021. On this call, we will be referring to a presentation that has been shared with you and is also available on our website, and we take as having read the safe harbor statement. From the management we have with us our Global CEO, Mr. Jai Shroff, Group CFO, Rajendra Darak, COO, Carlos Pellicer, Global CFO, Anand Vora, Raj Tiwari, our Global Chief Supply Chain Officer, and Farokh Hilloo, Chief Commercial Officer. We will start with an overview from Jai, followed by a business update from Carlos and a financial update from Anand. With that, let me now hand over to Jai. Over to you, Jai. Thank you very much, Radhika. It's a pleasure to be on the call. The quarter has been challenging in many ways. We've seen a huge cost increase across the board in raw materials and in freight charges. In spite of that, I believe the team has delivered fantastic performance, particularly in the circumstances of so many weather impacts, which Carlos will go through. I think the team has done an excellent job, and we see the prospects for the full year to be very promising. The India business has done very well. The U.S. business has done well and performed much better than last year, but the weather impact in Latin America, China, and Europe has slowed down some of our growth in the first quarter. Thank you very much, and I'll hand over to Carlos and be waiting for questions after. Ladies and gentlemen, the line for Mr. Carlos Pellicer has got disconnected. Please hold while we reconnect him. Thank you. Ladies and gentlemen, thank you for patiently waiting. The line for Mr. Carlos Pellicer has got reconnected. Thank you, and over to you, sir. Thanks so much, Jai. Good evening, everyone. I'm pleased to join you today and present our financial results for the first quarter of full year 2022. Despite numerous challenges intensified by the extended pandemic across the world, we have continued to deliver our commitments during this period. Our OpenAg purpose inspired us to be agile, to focus deeply in our customers, and to grow sustainably. Exemplified by the prestigious Asia Sustainability Leadership Award for displaying commendable commitment to sustainability. During the second week of July of 2021, unfortunately, incident of political riots in Ladysmith were reported in South Africa. The rioters forcibly gained access into one of warehouse rented by UPL, situated in Durban, South Africa, and attempted to loot and ultimately torch the warehouse. Due to the fire, a significant portion of the warehouse and all UPL-owned inventory were damaged. Fortunately, there were no casualty or major injuries to report. We have engaged the service of global renowned industrial cleaning service providers, environmental specialists, and other solution streamers to assist the local authorities and managed to deal with the aftermath of the incident at the warehouse. I'm grateful for all the effort made by our team and partners in this extremely difficult circumstance to protect the community and the environment. We believe that the damage will be totally covered by insurance, the calculation of the exact damage value is in progress. I'd like to thank to our relationship with our customers and to our supply chain team that have been able to manage and minimize and mitigate the business impact. We are in a good way to manage the relationship with the customers and be able to manage properly all the products. Our financial results. I'm glad to report that the revenue, as well as EBITDA for the quarter, improved by 9% each. The increase was supported by strong volume growth, favorable mix, and price increases. This has led to an improvement in gross profit by 50 basis points, despite unfavorable weather condition across several regions, coupled with supply constraint and increased cost pressure. In addition, our net working capital was around 91 days, approximately seven days higher than Q1 full year 2021, primarily due to higher inventories that have been created to support our growth in Q1 and Q2. We also remain committed to continue to reduce our debt. Overall, we maintain our full year 2022 outlook as highlighted in the Capital Markets Day presentation. Based on our robust customer-centric model, integrate manufacturing in our OpenAg approach, despite cost pressures in our other external challenge. Let's look at our overall performance highlight for the quarter. We are happy to report that three out of five regions, LATAM, North America, and India, delivered strong growth in the quarter. Europe and rest of the world were impacted by unfavorable weather conditions, resulting in a shrink market and pockets, as well as supply constraints. As part of this impact was offset by a higher price realization and a strengthening of Euro against the India rupee. Overall, we achieved 6% volume growth, 2% price growth, and further 1% upside due to currency movement. Improved gross margin were led by better price realization and favorable product mix in most geographies. This comes despite increased overall cost pressure, as well as delay realization of price correlation to the pre-book orders in an unfavorable mix, especially in LATAM. Gx overheads were 11% higher than previous years, primarily driven by the increase in personal expenses and lessening COVID restriction. Despite all the external challenge and increase in overheads, UPL managed 9% increase in EBITDA versus previous year. Let's take a look on the overall performance of our regions. In LATAM, we saw a strong revenue growth, especially in Brazil, led by higher volumes. Among other major markets, Mexico was impacted due to a severe ongoing drought. As I also mentioned earlier, Brazil was impacted by cost increases and delayed price realizations due to pre-booked orders and unfavorable mix in Brazil. In North America, higher volumes led by growth in post-patent solutions, coupled with a strong overall price realization, driven robust growth of 19% over Q1 FY 2021. This was aided by favorable commodity prices, a strong seasonal outlook, an increase in acreage of most of major row crops. Further, favorable price realization has also helped in adequately compensating for marginal cost increase, resulting in an improved profitability in the region. In Europe, unfavorable weather conditions result in a shrinkage of key markets, especially in the southern region. Further, non-revocation of, and competition from generics of key products impact sales of about INR 9 million versus Q1 2021. In India, UPL exhibited strong performance in this quarter, despite delayed monsoons in parts of the country. Severe impact of COVID from a second wave in April and May and delay upward price revisions. This was partially offset by favorable commodity price for food grains and key cash crops in pulses. glufosinate-based brands Feroce and Sweep Power demonstrated strong quarter-to-quarter growth, supported by the very high price realization. The rest of the world witnessed around 14% dip in revenues versus last year, negatively impacted by unfavorable weather, such as the frost in China and supply constraints, leading to decreased volumes. In Southeast Asia, glufosinate sales in Vietnam faced challenges due to supply constraints, but were offset by increased sales in Thailand. Further, glufosinate supply constraints and unfavorable weather conditions impacted sweet potato sales in China. Japan sales were down versus Q1 full year 2021 due to the lower realization in health and nutrition sales in Japanese yen depreciation. I would like now to talk briefly about our recent announcement and exciting new launches. Through our OpenAg, we continue our path of reimagining sustainability. With an open network to create sustainable growth for all, no limits, no borders, we are proud of our recent launch of Natural Plant Protection, our NPP, and nurture.farm, to further enhance farmer resilience and sustainability. As announced in June, Natural Plant Protection, our NPP, is a new global business unit that houses our complete portfolio of natural and biological-derived agriculture inputs and technologies. NPP shall be a standalone brand consolidating UPL existing biosolutions portfolio, network of R&D laboratories, and our facilities worldwide. Natural Plant Protection, our NPP, we will work across UPL's global footprint to shape and scale the biological technologies of the future. The strength of NPP is that it will be a catalyst to our progressive approach to sustainable agriculture, meeting the innovation and the technology needs of our farmers, consumers, and environment. Natural Plant Protection will play a very important role, as we have our micros that create micro impact with macro impact. nurture.farm, launched in July, is a digital platform that advances resilience for farmers and the food system, make agriculture simple, profitable, and sustainable through technology-led solutions for generations to come. Covering every step of the farming life cycle, nurture.farm will operate as an open platform in the supply of products, innovation, and mechanization. In case you wish to learn more about Natural Plant Protection, our NPP, and nurture.farm launches, please refer to the links of videos provided in this presentation. Before I hand over the call to our CFO, Anand, to provide more details about our Q1 financial results, I would like to recognize our teams for their resilience and dedication in ensuring this strong performance in Q1 and launch these key initiatives as NPP and nurture.farm, despite multiple challenges on several fronts. Thank you, and over to you, Anand. Thank you. Thank you, Carlos. Good evening and good morning, good afternoon to all of you. Before taking you through the key numbers, we take as having read the Safe Harbor statement, which is a part of the presentation. I'll begin with providing you the key highlights for the first quarter earnings and then take you through the detailed financials. The first quarter provided us a good start and added the momentum to growth in revenue and EBITDA, as we work towards delivery of our commitment for the current financial year. We are seeing very strong crop prices in our key markets, while also experiencing challenges on weather in some geographies and supply chain pressures. Besides those challenges, we did deliver 9% revenue growth over last year, same quarter, with a volume growth of 6%. We saw our price increases had an overall positive price variance of 2% and a currency variance of 1%. EBITDA grew by 9% over that of the same quarter of last year. I'm pleased to say that we are on track to deliver on our commitment, both on revenue as well as EBITDA. Talking about the key financial metrics, we ended the quarter with revenues of INR 8,515 crores and an EBITDA of INR 1,862 crores, an increase of 9% in both. The net profit for the quarter was INR 678 crores, an increase of 23% over that of the same quarter in the previous year. Gross margins were higher by 50 basis points and stood at 44%, against 43.5% in Q1 of last year. The margins expanded mainly due to better price realization and product mix, despite increases in supply chain costs and other increases in cost of raw material and intermediates, and the logistic costs. For the quarter, the fixed costs were higher by 11% as compared to the corresponding period of the last year. This increase was largely on account of increased investments in resources as we moved our business to sustainable and differentiated products, and the launch of NPP and nurture.farm, as mentioned by Carlos earlier. During the quarter, we had an adverse net foreign exchange impact of INR 202 crores. This was due to the mark-to-market impact of hedges taken on advance orders in Brazil. As a normal industry practice, we book significant business with our customers in the first four to five months of the calendar year. The hedges ensure that the company's realization in U.S. dollar are protected. These hedges enable us to offer a committed BRL rate for the product irrespective of the movement in exchange vis-à-vis the US dollar. During the quarter, there was significant appreciation of BRL by 12%. These hedges are taken on advance orders, which we would be executing in the subsequent quarter, the MTM or the mark-to-market will wind down with the execution of the orders. The INR 200 crore MTM on these hedges has been recorded as a part of the finance cost, which is attributed to the timing mismatch between the quarters. I would also like to state here that we are close to half a billion of advance orders, which we have received in the first five months of the calendar year in Brazil. On the tax line, a deferred tax asset was created in line with the normal tax computation, which would get adjusted as the year unfolds. These deferred tax assets primarily are from Brazil and Europe. The full-year tax rate is expected to be at the lower end of the guidance of 15%-18%. Exceptional items for the quarter of INR 63 crores are largely on account of certain additional costs that we have incurred on the closure of our Rotterdam manufacturing facility. Net profit for the quarter stood at INR 678 crores versus INR 550 crores, showing a growth of 23% over that of the previous year. Moving on to working capital. In line with the seasonality of business, where working capital builds up in Q3 and then releases in Q4, the net working capital stood at 91 days, higher by seven days compared to last year. The payables for the quarter increased by seven days, while inventory increased by 12 days and receivables increased by two days. We expect the net working capital days to stay between the 80 to 90 days range in the current financial year, in line with the increase in the sales. Moving on to cash flow and debt position. As informed earlier, our debt obligation is being serviced efficiently, demonstrating our commitment towards our bankers and stakeholders at large, and we remain committed to reduce the debt and maintain the investment grade rating of the company. During the quarter, Fitch Ratings and S&P Global Ratings retained their investment grade credit rating for UPL, which also upgraded its credit outlook to stable. During the quarter, we also borrowed $250 million of sustainability loan, taking the total sustainability linked loan to $750 million, which was completely used to repay the acquisition loan which we had taken earlier. The acquisition loan now stands at $1.5 billion. The sustainability loan is a five-year bullet repayment loan, which was borrowed at 30 basis points below the cost of the acquisition loan. The cost of sustainability loan is at LIBOR plus 130 basis points and has the potential to provide another 5 basis point reduction on meeting the sustainability KPIs agreed upon with the investors. The gross debt and net debt stood at INR 25,099 crores, and the net debt stood at INR 21,467 crores. As regards the outlook for the full financial year, we believe that the price correction, higher proportion of differentiated and sustainable products, and strong demand growth will enable us to deliver strong results going forward. I would like to reiterate that we maintain our guidance for the financial year 2022 of 7%-10% revenue growth and 12%-15% EBITDA growth for the year. With this, I would like to hand over back to the operator, and me and the senior management team are ready to take questions. Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Niranjan Salkar from Equitas Capital. Please go ahead. Yeah, hi. Thanks for the opportunity. My question is to Anand. I wanted to understand why is the cash flow operation for this quarter lower than Y-O-Y basis, despite our revenues and EBITDA growing? Well, Niranjan, if you see, our working capital has gone up, and as we build up for inventory and for the next two quarters, the working capital typically takes up the cash flow that we generate during the quarter. It's largely because you will see that the working capital ramps up in Q2, Q3, and you will see despite positive also cash flow coming from operation, but at the overall level, it gets invested in working capital. Okay. Yeah. Thanks a lot. Thank you. Thank you. The next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hello, team. Good evening. Three questions from my side. One, in LATAM, excluding Brazil, how has the overall market behaved, and have you lost market share there? Carlos? Yes. Overall, the main constraint in LATAM was in Mexico because of the drought, very severe drought in Mexico. Our LATAM business is quite good. We have not lost market share. We have even progressed well in some countries like Chile, Paraguay, and other countries. What have been the impact for us is, we have a very good business in Mexico, and the drought in the first quarter that have impacted more our sales there. The impact is for the market, is not for us especially. Our growth in LATAM was good, and we have not lost market share. Sure. During the commentaries of peers, they seem to have suggested that Europe, the season was actually favorable. My sense is the target territories are different. Just wanted to get some sense in your target territories in Europe, how has the market behaved, and how is the uptake on the biosolutions business there? Yeah. Very good question. We are on track with our Biosolution approach in Europe, the disruption that is happening in Europe, in terms of product mix changing and all this, the first quarter have been impacted because of the frost. What we have been able is to create solutions that replace what we have lost. We have been very successful, example for you for that is our Argos, our solution to anti-sprout. That one product was a solution to control sprout in potatoes. We have been able to launch a new solution to control sprouts in Europe, that the value of that solution is three times more than the value of the solution that we was selling before. I'd say for us, the challenge that is happening in Europe, in some way, is giving us a lot of opportunities. We are launching new products. We are coming with the new solutions. This quarter of Q2 is starting a good way for us. We are seeing a good growth. We are, with this customer-centric approach, really focused in create solutions to the pain point of the farms. This is what we are doing. I have been visiting, together with Jai, we have been in Poland last month. The results of our solutions there is amazing. We have been visiting apple farmer that is using our Vacciplant. That is a vaccine to control disease and to make the plant more healthy in many different crops. For apple, this farmer that we visit is our ProNutiva farm. We have been able to apply six times our Vacciplant, and close the crop without disease and without any residue in their crop. It's moving good, and we are very excited about the opportunity that this disruption is happening in Europe, and our pipeline of solutions of NPP is coming and will help us a lot to grow in Europe. Thanks, Carlos. Just the last one. Guys, you seem to be gaining some decent traction in your non-agro business in India. Noticed in FY 2021 over FY 2020, it's grown about 50%, and the trajectory seems to be similar in Q1 FY 2021 over FY 2020. If you could just elucidate what is this business all about, and what is your outlook for it? I believe that Jai, can yo u talk about that? Yeah. The specialty. Yeah. Thanks. Yeah. UPL has been building out a specialty chemical business, pharma intermediates, et cetera. We ancillary to our existing feedstock of raw materials, which we do, and that business is growing nicely. We are seeing actually quite good growth rates in that space. We have some investments also in the last two years, which are all kicking in and giving us revenue growth. We believe that business will continue to grow quite fast because of the demand and the investments we have made. A lot of it is intermediate for pharmaceutical industry and other ancillary industries, not necessarily ag-chem. Okay. Thank you. Thank you. The next question is from the line of Girish Achhipalia from Morgan Stanley. Please go ahead. Good evening. Thanks for this question opportunity. I had two questions for Anand. Firstly, on this tax results, I probably didn't understand that Brazil and Europe, is it something which is one-off year? Why should it reverse then subsequently with this Brazil and Europe have contributed this way in a big way, even historically? What's really happened in the tax rate level that's filed? Second, if you can just quantify the BRL impact out of that INR 200 odd crores, because we had about INR 177 crores impact even in Q1 of previous year. Just wanted to understand what's really changed. Sure. Thanks, Girish. Girish, on the taxes, it's just that based on the quarterly numbers and with the mark-to-market impact, even last year we had a negative deferred tax asset which got created in Brazil, but then in other regions did well, and therefore the net impact of tax was a provision for taxation. This year, because of the large impact coming out of mark-to-market, there was a larger deferred tax asset which got created. Also in Europe, as you saw, our sales were below the last year's sales, and therefore obviously the cost of operations and other things are there. That gave us some benefit of creating, and which resulted in creation of the deferred tax assets. As I mentioned in my commentary, that as we move forward into Q2 and Q3, you will see the reversal of these deferred tax assets. In case of Brazil, the orders get executed, then they will be converted into sales. In case of Europe, as the business picks up in Q3 and Q4, you will see the reversal happening on deferred tax asset. That's on the taxation part. Your second question, which was with regard to the FX. As I mentioned in my commentary, we saw a 12% appreciation in Brazilian real from 1st April to 30th of June. It jumped up from 5.6 to a dollar to five to a dollar. Although we are back at 5.2. As of 30th of June, there was an appreciation of 12% in Brazilian real in that quarter. Besides, as you know the business from January to May, June, we collect advance orders. As I mentioned in my commentary, we had advance orders in excess of $500 million. We have taken NDFs and put options to hedge our advance orders. As I mentioned in my commentary, that this helps us to protect our dollar profits, at the same time, dollar margins. At the same time, it gives us an assurance to the customer that they will be getting the products to the price at which they have booked. It's just a mark-to-market on these orders, and as the orders get executed in Q2 and Q3, you will see that those reversals would happen as we move forward. As I mentioned, it's just a timing mismatch, Q1 mark-to-market rolling over into Q2 and Q3 as we execute the orders. This would get normalized. Anand, I just wanted to understand the Q YOY variance, because even in Q1 of last year, you had a similar situation. Have you booked much higher orders and hence this is becoming bigger? Even if I look at FX impact slide that you have put out- Yeah The number is 202 versus INR 177 crore versus last year. It's an INR 30 crore move. We're talking just INR 30 crore delta, right? Some other reasons would have positively contributed to that delta being lower? I think it's largely coming out of the excess orders that we have got this year, one. Two is, last year we didn't follow this practice of taking the hedge. As you know, we had shared with you last year. We did get impacted, because we had the advanced orders, but the currency depreciated significantly during this quarter. We saw almost a 30% depreciation, which happened in the currency. This quarter, it's gone the other way around. In order to protect our committed selling price to the customers, and also in order to protect our profit margin, we adopted this derivative strategy. Typically, you would see this phenomenon quarter ending 30th of June, because that's when we'll have the peak advance orders. Once those orders are executed at the end of Q3, Q4, you will see that this coming down significantly. Great. My last question, Carlos. Just if you can spend a minute on sustainable solutions growth during the quarter, and what target do you have for the growth of sustainable solutions business in FY 2022, in the underlying growth that we're talking about 7% to 10%? Just, if you can comment on the European market share. Are we flat or are we down a little bit given the changes that are happening on the product side over there? Sorry, I was in mute. Thanks for the question, Girish. Looking to Europe, what is happening is we have lost registration, like the CIPC, and we replaced that technology to sustainable technology, that is Argos. In that way, we reduce our sales of chemistry and we increase our sales of sustainable. This is what we are doing with all the products that we have had impact. In Europe, we are working very deeply on gain speed on the penetration of the biosolutions. Our growth of biosolutions, it will be almost the double of the growth of our normal solution. If we are looking to grow in the range of 7%-9%, our growth in biosolutions will be disproportionately bigger than the growth in the chemicals side. We are seeing this all over Europe. It's not just one country, but all over the Europe. We are quite dedicated on that. We are putting more people in the field to say, biosolutions demand much more work. It's a much more profitable business. Even in Europe, that we have already a very good profitable business. biosolutions, it's more profitable. Demand more service, demand more work in the field. For that, we are adding additional resource in hub countries to help us to have that growth. To answer your question, we will grow more in biosolutions. In general, we are gain share in Europe because the market, it's stable or degrow a little bit in Europe. We are gain share because of our sustainable solutions. We will see more depth in the next years. New solutions are coming, new registrations are coming. Our footprint that we have in terms of manufacturing, that we have in Europe, that we have in South Africa, that we have in Mexico, that we are building in India, it's helping us to do that. When we see the demand increasing, we will need more capacity too. We have a good capacity today, but we will need to keep focused on supply because the growth of these sustainable solutions will be disproportional. Our sulfur footprint. We have a very strong sulfur footprint. We are leader in sulfur globally, and we will see this solution. We are developing a lot of this diversified type of sweet potato and sulfur and our biosolution, our ProNutiva approach. That will give us a lot of growth in Europe and other countries too. Thank you. I'll join with you. Thank you. Thank you. The next question is from the line of Ritesh Gupta from Kotak. Please go ahead. Hi, thanks for taking my questions. Just on the NPP side, what is the likely revenues of this be? If you could share that. Would it be launched like a separate brand or eventually, could it also attract some third-party investment as well as a separate platform? If you could just highlight that bit. Then on the Europe side, in terms of, I couldn't follow, Carlos did talk about it, but what is the outlook for the rest of the year in India especially has grown materially faster while the sowing, et cetera, has been running behind expectations or at least running behind. What's the outlook for India during the rest of the year? Yeah. Anand, in terms of the NPP, can we disclose that number? How will you see that? I think we had shared with the investor community that our sales from the biosolutions and the NPP range of products which we have now regrouped under the brand of NPP, is in the range of about INR 350 million to INR 375 million per annum. This year, we expect that to grow at a faster than the normal growth rate of ours. I can only say that because we are in the first quarter, but our internal targets are to grow at a faster pace than the normal business. That's almost on the numbers. Please go ahead and the qualitative piece you may explain to Ritesh. I say, in terms of India perspective, we have had a very good Q1. Q2, we are monitoring and working. I say, that have had a delay in rain and now it's raining a lot. I say, we are very close to the customers. We are supporting them, very close to the retailers, to our distributors. We expect a very good year in India because technology-wise, it's been increasing a lot. We are seeing a very good perspective. The point that we need to work is the weather. Now, I'd say the weather conditions that will be important to monitor now. We are with a lot of new products launch. Our glufosinate technology now, it's moving very good values and all the other brands that we have in glufosinate are moving good. We have launched our clethodim. It's first time that clethodim, it's sold in India. We have sold our propanil. It's first time that propanil is sold in India. Say, we have brought our TripleWE mixture. It's the first time that TripleWE mixture, it's registered in India for seed treatment. There are new products coming in this season. There are a lot of new product launch in India and our platform, our ecosystem to work in India is so strong, that say, we are really gaining share and we are progressing quite well, in India. Sure. Thank you. Thanks. That's helpful. Just one bit on the gross margin side, you saw a year-over-year expansion of about 50 basis points. How should we see it in the subsequent quarters? One is on the price side that probably need to be taken or probably have been taken and yet to come through into the numbers. Secondly, on the logistics cost, could you quantify what kind of logistics cost impact we'll be seeing and how that should evolve over the rest of the year? Yeah. We are affecting all that in our price increase. We have been able to increase our prices, and we are continuing increasing monitoring the cost and the price. As the price of commodities are so good, farmers are making money, have been good for them. There are constraints of product availability. As we have our manufacturing footprint, all the investment that the company has done during the last 20 years on the manufacturing side, now it's coming to us in a very good momentum because, I'd say, so many companies have closed their factories or have stopped. They've transferred their structure to China or some other countries, and we have done the reverse. We have invested in manufacturing. We have invested in our supply chain capabilities. We have a very strong team on supply chain now and our manufacturing capability. This is giving us a very good momentum, constrained on some products, and cost increase of some raw materials. Because we are so much tech integrated, we are able to play in the market now and be able to have product availability and be less impacting cost than others. This is why our margin have improved in Q1, even though we have old orders, we have all this situation, we have improved our margin in Q1, and we are expecting the same in the following quarters. This is the reason why, I'd say, I believe, Jai have been so resilient. The company have been so resilient in keeping the manufacturing focus and keeping the manufacturing footprint. That is, I believe, fundamental to the business model that we have. Should we expect the gross margins to sequentially improve in the subsequent quarters? Yes, we expect that we will be on track with our announcement that we have done in Capital Markets Day. We are keeping our perspective exactly aligned with that promise that we have done in Capital Markets Day. Cool. Thank you so much. Thanks a lot. Thank you. The next question is from the line of Prabal Singh from Centrum Broking. Please go ahead. Thank you for the opportunity. Am I audible? Yes, you are. All right. Just on the weather conditions that you spoke about quite a bit with respect to Latin America and as well as Europe. In Latin America, is it fair to say that in Brazil, the first half of the sowing season is something that has obviously not gone as planned. What would be the monetizable one should look at to measure whether the second half of the sowing season or the rainfall, which starts from September, I believe, that is actually performing as per expectations in order to sort of meet our Latin American revenue guidance or the growth guidance that we're talking about right now? Yeah, I'd say, when we see Brazil, the second season of corn have been impacted by some drought, what we named Safrinha, the corn that we have been is planted in February, March. This year, the planted corn have delay a little bit because have delayed the planting of soybean last year. Soybean delayed 30 days, then the following corn have delay 30 days, too. For us, soybean is by far much more important than corn. Soybean prices are so good this year, that we will expect an increase in planted area of soybean in Brazil and South Cone. We are seeing already a very good year of soybean in North America. The stocks very low. The inventory of soybean is quite low globally. We are seeing that the price of soybean will be keeping in this range between $13-$14 per bushel. This is exceptional price. Before COVID, the price was in the range of $8.8, $8.6 per bushel, $9 per bushel. Now we are in the range from $13-$14. Farmers will invest a lot in the crop. They will try to capture as much yield as possible per hectare. Exchange rate, in Brazil and in South Cone, Argentina, Paraguay, it's quite good to the farmers, too. We are not seeing any weather prediction that will come with a problem for soybean in that area. Say, today is too early to say that. The soybean will be start planting in the end of September in Brazil. The first regions will start about 20 of September. Up today, we don't have anything that creates any, let's say, point that put in risk the starting of the crop. The expectation is the increase in about 2 million hectares of soybean just in Brazil that the planted area will be increased. That is very good for us because our portfolio soybean is very strong. All right. That is very useful. Thank you. The second question again was on weather this time in terms of the Indian market. Obviously, you have done perhaps much better than estimates because of stronger pricing realizations from what the briefing was earlier. The delay that happened in June, in terms of monsoon through to the first week of July, do you see that as at least a permanent impact, at least for FY 2022 with respect to kharif sowing. Does that have an impact on our domestic business at least for Q2 before the second half of rabi sowing actually starts from September, October? We have here in the line Farokh, that is our Chief Commercial Officer. I would request to Farokh, if you can explain that. You are so close to the market there, can you make some view on that? Yeah, sure. Thank you, Carlos. Could you please repeat that question, please, one more time? I was wondering that the kind of delay that's happened based on whatever we little can understand, that some of the delay in sowing is not something that can be captured back, at least as of now, despite the fact that rains have actually picked up post the second week of July. Does that impact our prospects, at least for Q2 before the impact of, let's say, rabi sowing again starts to show up in our growth numbers? That was my question. You are right. There are some areas in MP where we have lost out on some acreages of soybeans. What we have been doing in the last three, four years is that, whilst we are looking at the big crop, the big acreages, we have also started the work on looking at the small crops. Small but very niche, very specialized crops, like groundnut, like pomegranate and all those kinds of products, all those kinds of crops. Secondly, what is helping us also is this, the ProNutiva concept that we are going with in certain geographies where we have the adoption of the entire farms, the entire villages for that particular crop. Yes, we would have some impact when it comes to acreages for crops like soybean. We don't see that impacting our Q2 or even the full year, basically because we have a mitigation plan in place where we will catch up on those losses with the other crops that we are focusing on. Great. One last question, if I may. With respect to the impact of freight supply constraints as well as some increase that is being seen in raw material prices from China, any view on how the rest of the year would pan out on these fronts? I'm sorry if you covered this earlier. No, no. Thank you for your question. We have Raj Tiwari, our supply chain manufacturing head. He can give a brief for you on that, and we are quite on track on that. Raj, can you pick up this question? Yeah, sure, Carlos. As far as the logistics cost is concerned, going forward, I see the cost at a similar level for next three quarters. Universally, there has been, especially on the ocean trades, there has been an increase to the tune of 15%, 20%. In some routes even 25%. That is going to stay. In my view, that will not now further go up or will remain stable there. As far as the cost increases are concerned, there has been some cost increase on basic commodity, also some corrections which has happened. Also in case of intermediates, since most of the product what we make ourselves, we are also backward integrated, not much impact. There has been an impact because of basic commodity increases, but not on account of large price increases, what has happened in intermediates in China. There has been also, for example, glyphosate and glufosinate that has moved very rapidly up in last three, four months. Glyphosate as such is not a big molecule for us. There has been an impact, but for us the impact has been less as compared to any of our peer groups. All right, sir. I have more questions. I'll come back. Thank you so much for your time. Thanks. Vishnu Kumar from Spark Capital, please go ahead with your question. Thanks for the time, sir. This question is for Carlos. I'm circling back on the same question on the weather in Brazil. I understand about the Safrinha corn that you spoke about and the Southern Brazil going under stress. Would Mato Grosso, which is the key region for our soya crop, does it depend more on rainfall or more from reservoir levels? We understand even the reservoir data that is coming out of Brazil is showing some phenomenally low water levels there. Would that be at a risk if the following rains don't really show up that Brazil probably may see some stress perhaps in the second half? No. Thank you for the question. I say soybean in Brazil is so interesting because we have from the Rio Grande do Sul that is very south of Brazil up to almost Amazon. That is very north, and very wide from almost Bolivia through Minas Gerais state. It's very wide and very long country. The weather can be more dry in one region, more wet in other regions, but in average, the soybean it's quite sustainable in Brazil. Mato Grosso is the main state, and weather in Mato Grosso used to be very regular. Like say, you can delay a little bit to start rain or have a little bit of shortage on the end of the corn, but it's amazing that it is not irrigated area, but you are able to do two seasons. Two seasons of, one first is soybean, followed by a cotton, as a Safrinha cotton. First season is soybean and second season is corn. Two seasons in a non-irrigated region. Mato Grosso is really perfect for agriculture. The soil is good, and the farmers are so technified. What happen every year is, they start sowing in 15th, 20th of September is when it's allowed to start the planting soy. Before 15th of September, it's not allowed to plant soybean in Brazil, all over Brazil. It's starting from September that is allowed to manage disease control from one season to another. Normally what is happening is, worst case scenario is that instead to start planting 15th of September, it starts planting 30th of September or first week of October when it's the worst case. Like last year, instead to start first 15th of September, it start to planting in second week of October. The weather it's quite good now, and we don't have any predicted drought in Mato Grosso this year. What we expecting is that the planted area in Mato Grosso could increase quite a lot this year because of the excellent price on cotton, corn, and soybean. The three crops, that is the main crops for Mato Grosso, the prices are exceptionally high. Almost $0.09 for cotton, $5.5 per bushel in corn, and $13-$14 per bushel in soybean. Mato Grosso this year will be like, the farmers are making so much money. Even have this drought in corn, the farmers can make a lot of money this year in Mato Grosso. Especially in Mato Grosso. Got it, sir. No machines there. A big line, a big queue on the machine supply because the farmers are buying machine, they are buying cars, because they are making a lot of money. Got it, sir. Just on the U.S. market, again, there's a lot of drought news that we keep hearing on the Midwest. I understand that the season is already almost over, another maybe month or so. How is the current inventory situation there? Is it okay? Or more from a next year standpoint, how do we see that? Is the market okay or are inventory building up there? The inventory is quite low. Very quite low. In North Europe and U.S.A. is where the inventories are the lowest. As the price of commodities are so good, the farmers are applying technology and the inventory is good. The inventory is very low. We have been able to increase price quite a lot in the U.S. because of the inventory is low, and we have been able to quickly adjust our prices there. It's moving very good. I believe North America would be one of the best regions for us this year. We have improved our footprint there, too. We are closer to the farmers. We are closer to our dealers, our partners there. Yeah, we are quite confident in the North America business this year. Okay. Thanks and all the best, sir. Thanks. Thank you. Thank you. The next question is from the line of Matias Vammale from BlueBay Asset Management. Please go ahead. Hi. Thank you. Hopefully you guys can hear me all right. Hi, Anand. Quick question from my side. Good to talk again. If you can just tell us a little bit for the debt guys, what's your total debt and cash balance? If I understood correctly. Over the quarter, you drew $250 million of the sustainability loan, so that's up to $750 million. With that you repaid a similar amount of the Arysta acquisition, so that's currently around $1.5 billion. Is that correct? Thank you. That's right, Matías. What's your total debt and cash balance as of the end of the quarter, please? Our gross debt is, I'm going to say in crores. That's INR 25,099 crore, and the net debt is INR 21,467 crore. The delta is the cash on hand. Perfect. All right. Thanks, Anand. Thank you very much. Thank you, Matias. Thanks for joining us. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Thank you for this opportunity. If you can just talk something about the OpenAg pipeline that you have created or creating, and how is that getting complemented by the NPP effort that you are consolidating everything there. Something on that point you can please add. If you can repeat the question, my line broke a little bit. Can you repeat, please? Yeah. I just ask about, what is the progress in the OpenAg pipeline that we are witnessing, and how is that getting complemented by the NPP effort that, or the launch of the NPP portfolio and consolidating it to the OpenAg pipeline? Thank you for the question. You know how I love the OpenAg purpose, really, the OpenAg purpose inspired us a lot and gave so much energy to us to really be focused and create sustainability and transform the agriculture worldwide. Our purpose, OpenAg, that had been launched in the 1st of February 2019, has created so much energy in the direction of reimagining sustainability, and our strategic agenda in that direction, arising the launch of NPP now. Natural Plant Protection, it's a thing that the world needs. The world needs more sustainability. The world needs our urgency in moving that direction. The NPP, our Natural Plant Protection pipeline, will come very much in that direction. You know our dedication to the soil side, to the soil health. You know how much GA have addressed the Zeba technology that we have launched some years ago. This technology, it's now gaining more and more traction. The combination of this technology of Zeba, together with our other NPP pipelines and the blend of these, is creating so much value in terms of the soil health side. We are very much dedicated to the health soil technology. We are very much dedicated to the first phase of the crops. The return that the crop are germinating and transforming from the seed to a plant. The soil have a so important part on that. In our NPP technology, we are combining a lot of technology for the soil health perspective, for the germination moment of the plant, what we mean crop establishment. All the work that we are doing to make the plants more strong, more healthy. What we are creating with our Vacciplant, that is this product or this solution that works like a vaccine to the plants. We are working with all these different dimensions, from the soil side, from the crop establishment side, from the side of make the plant more health, more capable to compete with the disease, and combining that with our ProNutiva approach. The sustainability comes from that perspective. We need to make the plants more strong, more able to compete. At the same time, if it's necessary to use a chemistry, to use intervention, we have that intervention to be done. It's like in our life now as a human being. We try to take vitamins. We take vaccines. We take everything to avoid to take an antibiotic. If we need antibiotic, we need to have the antibiotic to cure, to control that problem. We are working with the plants in the same way. We are working to make the plants more resilient, more able to compete without so much chemistry intervention. But when it's needed, we have the chemistry to control that too. That is the beautiful from Kiva, that we apply the biosolutions, we apply the sustainable solutions, and when is needed, we have the chemistry to support that, and to have the best productivity, the best yield per hectare in a sustainable way. I believe this purpose, our OpenAg purpose, that came to us, gave to us this sustainable side, is really transformed UPL in a company that is really connected with what the world needs. It's connected what the consumers are demanding. It's connected with what our soil is demanding, our farmers are demanding. Our focus in solving our farmers' pain points, it's very much there. I hope I have answered you, but OpenAg for us means so much and so strong for us that I can stay here three days talk with you about that. Yeah, sure. Just a suggestion, since all of us are excited to see the kind of faster progress in the biosolutions portfolio and the OpenAg portfolio and all that. It could be great if you can just share quarterly performance of this portfolio. If not regionally, at least global, what is the contribution that the portfolio is really making per quarter, so that could be helpful in understanding and seeing the progress of the company qualitatively going ahead. That was one suggestion. Last question from my side, sir. On the non-agri new businesses, what you have mentioned in the initial part of the discussion Q&A. What is the size and scale that you are targeting? Also, if you can just talk something about the progress on the integrated manufacturing effort that you are witnessing, considering the current global supply disruption that has been prevailing. Jai, can you answer that? Thanks for the question. UPL is probably the most backward integrated ag chem company in the world. We are completely backward integrated. A lot of the feedstocks go into alternative industry like pharmaceutical industry. We've started to exploit that backward integration core competence into developing other ancillary. It goes from lubrication industry to pharmaceutical industry, et cetera. That portfolio is continuing to grow. I think probably at the next annual meeting, we can give more details. That business is growing. If you look at our chemical manufacturing platform, we are by far the largest specialty chemical company, if you look at it from chemicals point of view. We are completely integrated, so that insulates us from price fluctuation, and we are not really dependent on any particular source from any country for our raw materials. We are fairly well hedged from that point of view. It just gives us and our customers the comfort that they can have a very strong alternative supply chain platform, which is not dependent on where all the other guys are sourcing from. It's an alternative, and it gives our customers a lot of comfort. That industry is growing, as you know, the chemical industry is growing. UPL is investing a lot in backward integration. We believe that that platform will continue to grow much faster than the other sectors which we are growing. Sure, sir. Thank you. Wish you all the best. Thank you. The next question is from the line of Dhruv Muchhal from HDFC Fund. Please go ahead. Yeah. Thank you so much. My question is a bit related to the earlier one, is that we have a very strong manufacturing base, and given the context that price out of China rising, this gives probably us a significant advantage. Can you share some thoughts on what probably our share of total technicals probably we self-manufacture? Also, if you probably internally do some quantitative analysis, and you can share some thoughts there. As to say, for example, how have the technical prices globally moved, and probably how has your cost of production moved, and how much is that contributing to your competitive advantage? The cost is increasing for all your peers, but probably it is not increasing as much for you because you are backward integrated. If you can give some quantitative data for us to understand how is this helping us. Hi, Dhruv. I'm going to go to Raj. Oh, Jai? Yeah. Yeah. Before Raj goes, UPL has been gaining market share for the last 10 years in almost every market. We believe we are competitive, we still have the highest margins in the industry. You can just understand that our cost of manufacture is much better than anybody else, because you cannot go into all markets. We generally have an advantage in our cost that shows up in our margins. The fact that we are gaining market share is that we are able to exploit the advantage of our cost of manufacture. Raj, you can answer that. Yeah. Go ahead. Thanks. I think he was asking a follow-on question. My point was only that in the current context where the prices are rising globally, this gives a further advantage to us. I just wanted to better understand on some qualitative data or some quantitative data in terms of how is that contributing to us. No, it would be difficult for me to tell you. I think you will see that when the market fluctuates a lot, we see a steady growth in UPL business in growth, in volume and market share. That sort of gives you the barometers. Quantifying numbers, this is all a moving target. We have a whole portfolio of products, so it's not easy to say what happens in synthetic pyrethroids or happens in other or some other portfolio. It doesn't necessarily match up all the time because this is all a moving target. It's very difficult to say exactly how much advantage, but you can for sure say that we are probably the lowest cost manufacturer in all the products we operate in. Yeah. That's also evident there. I think, the point which I was trying to drive was that if you see our result, we have 6% volume growth, right. Our margins expanded with the 2% increase in the prices, right. Which means we have been able to very much defend our cost with such large cost increases which happened in the market. We still have been able to deliver 6% volume growth on back of our manufacturing, and also have been able to defend the cost so that we are the least impacted, which is evident also from the result. Difficult to say that how much is our technical share which we buy from other players in kind or in terms of making it. I can only say that a substantial part of our business comes from our own manufacturing. Sure. Thanks much. Thank you. The next question is from the line of Aditya Jhawar from Investec Capital. Please go ahead. Hi. Thanks for the opportunity. Most of the questions have been answered. Just one question for Anand. Anand, our debt increased in this quarter by over INR 1,000 crores, and this is typically a lower working capital kind quarter. In the next couple of quarters where the contribution of Latin America would increase. Will the quantum of debt further increase in the next two quarters, and any target that you would like to share of debt by end of this financial year? Sure. I would say that you're right, working capital will go up as we keep saying in end of Q2 and Q3. You have a sharp decline in working capital in Q4 as all the collections and other things come by. The debt will go up, but definitely not in line with the working capital going up. It will be at a lower pace. You will see a sharp decline in debt by end of the year. Yeah as we collect the cash. Our target, as I mentioned earlier in my commentary, that we would be looking at bringing down our net debt levels to below two, net debt to EBITDA. That's something which is our commitment to all the rating agencies as well as to our debt investors, that we will bring down our net debt to EBITDA to below two levels. Okay. Yeah. That's it from my side. All the best. Thank you. Thank you. The next question is from the line of Akshay Jain from ICICI Prudential AMC. Please go ahead. Hello, sir. Thank you for the opportunity. I just wanted to understand the guidance for revenue growth, 7%-10%. How much of it will come from the NPP platform? Like if we exclude the NPP platform, how much revenue growth guidance are you looking for? I think about 8%-10%, more towards 10% with all the investments which we are doing in NPP platform. We do expect now to be at a slightly higher contribution to the overall revenue. We would be looking around the 10% levels. Thank you. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang. Please go ahead. Good evening, thank you very much. Going back to the European situation, you mentioned that you are trying to recoup the technical efficacy product and sustainable product. What is the transition time and to what extent do you expect your growth rate in a few quarters? Can you share some thoughts on that? Let's see if I understood the question. In Europe, what will be the change from chemical to sustainable? In what will be the process of that. Can you repeat the question please, again? Yeah. I just want to understand the process of the transition that you expected, better on revenue growth to continue. You see the revenue growth being negative for, you say, some more quarters before you're able to generate growth from the shift to the sustainable products? Yeah. Now it's amazing the pain points that the farmers in Europe is having now because of this challenge that very important products have been banned. They are having so much different kind of pain points. This is what we are very concentrated. We are very much concentrated to understand their pain points and to be able to find solutions to that pain points in a way that they can keep the yield. Like I was talking about this farmer in Poland, to say that we have many farmers in Poland that is part of our ProNutiva approach. When we visit the farmer and the farmer was producing 80 tons of apple per hectare, we were so happy to see that because with so much constraint and so much pains. This farmer was an example of quality and an example of sustainability approach, with a so high yield. Then we went there to understand what he's doing different. What they were doing different is that they were doing the last six applications with our Vacciplant, our sustainable solution. He was explaining to us and giving to us, let's say, how happy he was with our technology. We are learning from the farmers, their pain points. At the same time, we are learning from them sometimes from how they have been able to use our technology at maximum. This example of Vacciplant in apple is so interesting that a farmer that is using a sustainable solution, a vaccine, to finalize their crop and apply as soon as the fruit start to become like a ping-pong size. They just treat with our Vacciplant until the end, and they have been able to produce 80 tons, 80 tons of apple per hectare with that technology. This example is what we are doing. Let's say we are really understanding their pain points, understanding how to positioning our product, how to use our product in each phase of the crop. Sustainable solutions is very much like that. We need to positioning the products to use the technology in the right time. That is the secret of the biosolutions, is to use in the right time. Like our anti-sprout. I was talk about our Argos, this technology that we have to anti-sprouting in potato. You need to apply the product in the right moment. The moment that the sprout it start to grow, you need to apply the product. That intervention in the right time makes a huge difference. This is why we are so much customer-centric and we are pushing the company to become more and more customer-centric, is to become more and more closer to the farmer and able to understand that. This is the way that we are growing Europe, the way that you continue grow all over the world. In Europe especially, it's even more important. We are quite happy to see the progress that we are having there. Hello? This is the operator. Yes. Yeah, go ahead. Yeah. Okay, just sticking to Europe now, what is the impact of the floods in Europe on the crops and crop losses, and how would it impact your sales in the coming quarters? What will be the impact of our product loss in the next quarter? This is the question? Yes. What will be the impact of the floods in Europe on the crops in Europe and the overall industry sales? Oh, no impact. You're saying business as usual in spite of the floods? Yeah. No impact because of this other product solutions. Okay, thank you very much, sir. I will join the queue. Thank you. Ladies and gentlemen, we will take one last question from the line of Sonali Salgaonkar from Jefferies India. Please go ahead. Thank you for the opportunity. Most of my questions are answered. Just one question. Could you give us an update on the synergies, both on the revenue and the cost side? Thank you. Hi, Sonali. This is Anand here. I think when we announced the Arysta transaction, we had announced about the cost of the revenue synergies target. As you know, the cost synergy is there for a period of two years. Two years are done by March 2021. While we continue to get the benefit of cost synergies, but we stopped tracking it. As we announced during our annual results, cost synergies were upwards of INR 200 million. I think it was around INR 220 odd million. We are above the target, that was delivered on cost synergy. On revenue synergies also, we have exceeded our target. We had set ourselves a target of INR 350 million, and I think we are way above INR 400 million. We work now as one integrated company and while we continue in our journey of cost reduction and bringing in more sales, but we are not tracking separately under the synergy lens. Understand. Sir, I'm sorry, one last question from my side. Sir, what is the situation of the inventories on a global level? You talked about the inventories in the U.S., et cetera, but what about the other regions? That's it from my side. Carlos? Yes. The inventories in broader regions, let's say South and North Europe, in North America is the lowest inventory that we see in the market. When you go to Brazil, when you go to Latin America, South Europe, we see more inventory. In our expectation that this inventory will be reduced quite a lot in the next season now. In the case of Latin America, including Brazil, with the price of the commodities that we are seeing, we believe that this year, the use of the inventory will be quite high, and the decrease of the level of inventory will be very big because of the price of the commodities. In the constraint of some products, we are seeing that fertilizers are with a lot of constraint in terms of availability, because the farmers are demanding a lot. Seeds are in constraint because the demand for soybean seeds, corn seeds are very high. In Europe, like South Europe, we are seeing a reduction now in the inventory because the rain came in the end of June, beginning of July. The rain came and the demand of products have been quite high in July. I say our sales in some countries have increased a lot in July, and the use of the products, it's there. We don't believe that we will have inventory at the end of the season, high inventory at the end of the season, even in South Europe. The frost have impact at the beginning, but now the rain comes and it is normalizing, and we are not seeing a issue. We see this year much more constraint in availability of product than in high inventory. I believe it's the opposite this year. I don't know if you have any other questions. This is the operator. The current participant has left a question queue, and that was the last question. I would now like to hand the conference over to Mr. Anand Vora for closing comments. Thank you. Once again, thank you everyone for joining us on this call. I think there are some very good questions, and we had a full spectrum of questions. If anyone has any follow-up questions, please do not hesitate to reach out to Radhika Arora or myself, and we'll be happy to answer the questions. Thanks once again for joining us on the call and have a good weekend. Thank you. Bye. Thank you. Thank you. Ladies and gentlemen, on behalf of UPL Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.