Ladies and gentlemen, good day, and welcome to UPL's First Quarter FY 2023 Conference Call. As a reminder, all participant lines will be in the listen-only mode. 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 and then zero on your touchtone telephone. 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. Thank you, Inba. Good morning and good evening to everyone. Thanks for joining us today for the results for the quarter ending June 30th, 2022. On this call, we will be referring to a presentation that is available on our website, and we take as having read the safe harbor statement. From the management team, we have with us today Global CEO, Jai Shroff, but he's down with a bad throat, so I would apologize on his behalf that he won't be able to present today. We do have our Group CFO, Rajendra Darak, President and COO, Mike Frank, Global CFO, Anand Vora, and Chief Supply Chain Officer, Raj Tiwari. We are also joined by the Head of our India Business, Mr. Ashish Dobhal. We will start with an overview and a financial update from Mike and Anand, followed by the Q&A. With that, let me now hand it over to Mike. Mike, over to you. Thank you, Radhika, and hello, everyone. It's been a fast and exciting first six months for me at UPL. Best of all has been working with our amazing team around the globe as we focus on helping farmers become more successful with a commitment to enhancing sustainability in everything that we do. We continue to operate in a highly volatile and uncertain world, and we take pride in the agility of our team, strong customer relationships, unique backward integration, and our supply chain resilience to address these challenges head-on. Our strong results from the first quarter demonstrate this competitive advantage. I would like to also highlight two important achievements for the last quarter. First, we're excited about our recently announced collaboration with Bunge for the creation of Orígeo in Brazil, which is subject to antitrust approval. This innovative company will increase productivity, profitability, and sustainability for farmers in five states of the north and northeast region of Brazil. Secondly, after extensive trials, we have also launched the first Flupyrimin-based insecticide in India to protect rice yields by controlling brown planthopper and yellow stem borer on rice, making it an important milestone with our collaboration with Mitsui Chemicals subsidiary, MMAG. Now turning to our performance highlights. In Q1, we have experienced strong growth across the Americas. In particular, the favorable market conditions and strong commodity prices allowed us to improve gross margins in Brazil, and we've grown both volume and price in the U.S. market. Multiple challenges have been faced in Europe, including unfavorable weather conditions, the impact of product bans, and the war in Ukraine, and overall, the devaluation of the rupee. In spite of that, we continue to see strong growth in our business in Europe. In India, the application timing was impacted by delayed. Ladies and gentlemen, it looks like Mr. Frank's line is disconnected. We request you to please hold the line while we reconnect him back. Please do not disconnect. Ladies and gentlemen, thank you for your patience. We have the line for Mr. Mike Frank connected. Over to you, sir. Yes, thank you. Sorry that I got disconnected. As I was saying, we continue to operate in a highly volatile and uncertain world, and we take pride in the agility of our team, our strong customer relationships, unique backward integration, and our supply chain resilience to address these challenges head on. Our strong results in the first quarter demonstrate this competitive advantage. I would like to highlight two important achievements for the last quarter. First, we're excited about the recently announced collaboration with Bunge for the creation of Orígeo in Brazil, which is still subject to antitrust approval. This innovative company will increase productivity, profitability, and sustainability for farmers in five states of the north and northeastern regions of Brazil. Secondly, after extensive trials, we have also launched the first Flupyrimin-based insecticide in India to protect rice fields by controlling brown planthopper and yellow stem borer on rice, making it an important milestone in our collaboration with Mitsui Chemicals subsidiary, MMAG. Now turning to our performance highlights. In Q1, we have experienced strong growth across the Americas. In particular, the favorable market conditions and strong commodity prices allowed us to improve gross margins in Brazil, and we grew both volume and price in the U.S. market. Multiple challenges have faced our team in Europe, including unfavorable weather conditions, the impact of product bans, and of course, the war in Ukraine, as well as the overall devaluation of the currency. Despite all those challenges, we did see strong growth in our European business. In India, the application timing was impacted by delayed plantings. Moving to the financial results, our revenue as well as our EBITDA for the quarter have both grown by 27% versus Q1 of our last fiscal year. The growth in revenue was led by significantly improved price realizations, coupled with a healthy volume increase despite the multiple challenges. Our contribution margins stood at around 44%, enabled by 18% price realizations offsetting the inflationary input and freight costs. Our EBITDA margins lowered slightly as a result of increasing our investments in SG&A. The key driver for this SG&A increase was related to employee costs, which were around an increase of INR 214 crores. We intentionally increased our headcount versus last year in the areas of R&D, our NPP Biosolutions business and in our Southeast Asia business, where we're transitioning that business to a B2C model. Let us now talk about the performance of our regions in the quarter. In Latin America, we achieved a strong 38% growth led by our herbicide portfolio and through improved pricing. The growth was mostly led by Brazil, driven by a robust demand for post-emergent herbicides and strong price realization. Argentina and Andean countries also contributed to overall growth of the region, mostly driven by herbicides. As another highlight in Latin America, our NPP Biosolutions business achieved a strong double-digit growth in Mexico and the Andean countries. In North America, revenue grew by 47% in this quarter due to higher volumes as well as improved price realization. Our performance was supported by high commodity prices with strong growth in both U.S. and Canada. Despite challenges which included the drought in western U.S., where we have a strong NPP Biosolutions business, this did impact that part of our business in Q1 in that specialty crop market. The pre-emergent herbicides have led the growth in the region to a mix of volume and price. We also successfully launched our new three-way herbicide in soybeans, PREVIEW. I visited with our U.S. field technical team last week and the field results are looking fantastic. We expect PREVIEW to really start ramping up in the next crop season. In Europe, we grew by a robust 13%. This strong performance has been achieved through increased volume growth and higher price realization. Among major countries, growth in France was led by NPP Biosolutions. Central Europe grew through a mix of volume increase as well as price. The European business achieved this growth despite multiple challenges that I mentioned earlier, including the devaluation of the euro by around 6% against the INR versus last year. In India, we achieved a moderate growth of 8%, much impacted by the delayed planting of key crops. Regarding crop protection, our NPP Biosolutions portfolio delivered strong growth. In addition, we're pleased that our Flupyrimin-based sales have started in the last quarter. Among other businesses, Advanta's growth has been led by corn-related sales. Due to the recent start of the monsoon season, we are now seeing significant product application in the field, which will set up for a strong Q2. The rest of the world delivered a 31% growth in revenues, driven by significant increases in volumes and supported by improved price. Significant growth in Southeast Asia, Australia and New Zealand were led by insecticides and fungicides despite the supply constraints. This increase. Also, we have launched our first ever Africa Sustainability Report, showcasing UPL's commitment to farmers and food systems across the continent. Before I hand over to Anand, our Global CFO, I would like to highlight that we are poised to deliver strong growth for the year. Considering this positive outlook, we are revising our FY 2023 guidance to 15%, 15% growth for revenue and 15%-18% growth for EBITDA. Our strong Q1 performance anticipated robust demand for our portfolio of solutions for the balance of the year and an expectation of contribution margin expansion support the revised guidance. We will also be very diligent with SG&A as we are experiencing inflation across our various SG&A components. Lastly, and very importantly, we are also laser focused on the working capital management and delivering a strong net cash flow for the year. While Anand will get into the details on working capital and net debt, I would like to emphasize here that we remain committed to deliver 80 days of working capital by the end of the year. Finally, I would like to congratulate and thank our team for their resilience, dedication and unified focus in delivering such strong performance in this quarter despite challenges on several fronts. I will now turn it over to Anand to take a deeper dive into the financial performance. Thank you, Mike. A warm welcome to all of you who have joined us today. I'll begin by discussing the key financial highlights for the first quarter and then take you through the detailed financials. At the outset, I'm delighted to share that we have delivered a solid all around operational performance during the first quarter, marked by robust growth in both revenue and profitability. Delivering such a solid performance against the backdrop of challenging macro environment and significant input cost pressures vindicates the robustness of our business model and more important, our team's ability to adjust and deliver superior performance in a dynamic environment. Talking specifically about our quarter's year-on-year performance on the key financial metrics in Q1, we ended the first quarter with revenues of over INR 10,800 crores, reporting a robust growth of 27%, of which 6% came from volume growth, 18% from price increase and 3% due to favorable exchange impact. Almost all major regions delivered double-digit growth. As Mike alluded to earlier, we are confident of a strong performance in Q2, including India, which has seen muted growth in Q1 due to the delayed monsoon. Contribution margins were higher by 7 basis points on the back of improved margins in our herbicide portfolio and improved margins in our Latin American markets. SG&A expenses rose by 29% as the company invested in building teams and capabilities to grow its differentiated and sustainable portfolio, strengthen distribution capabilities and normalization of overheads post-COVID. However, it's heartening to see that we are still able to keep our EBITDA margins intact and deliver a strong EBITDA growth of 26%. Strong contribution and EBITDA growth led to 29% growth in net profit after taxes, minority interest and exceptional costs. On the finance cost and other income, let me share with you certain details. As you would have seen, the finance costs in Q1 are lower by INR 88 crores. This reduction is largely on account of gains on hedges taken against advanced orders. Overall interest costs has for the quarter gone up to INR 478 crores on the back of increase in the LIBOR rates and the base rates in most of the countries. As regards other income for the quarter, we had an expense of INR 124 crores versus INR 41 crores in the same quarter of last year. This again was largely on account of mark to market on receivables and payables across various geographies. Therefore, net exchange gain year-on-year for the quarter has been INR 183 crores. Tax for the quarter was INR 59 crores, and we expect to end the year as per the guidance of 12%-15% of expected tax rate, that's the ETR. Previous year, same quarter due to losses in Brazil in Q1 on account of foreign exchange impact and recognition of certain deferred tax assets in our Swiss sub-subsidiary, we had a net tax credit of INR 152 crores. Further, minority interest rates grew significantly due to the superior performance of our global business. Despite the increase in tax and minority interest, we reported a net profit growth of 29% to INR 877 crores, while the earnings per share grew by 33% to INR 10.76. The first quarter also witnessed an increase of INR 5,608 crores in net working capital on a sequential basis. Primarily on account of four major factors. We saw a robust growth in sales of 27%. There's been a conscious reduction in inventory quantum by almost INR 3,000 crores in Q1 FY 2023 as compared to INR 619 crores in Q1 FY 2022. To optimize, this was done largely to optimize the interest cost in certain geographies which saw a disproportionate spike in inventory premium. As a result of this, receivables and net working capital was higher by 28 days. Inventory is higher by 10 days due to buildup in inventory on account of strong demand and uncertainties around the supply chain. However, notwithstanding the reduced factoring and the effects of foreign exchange impact of INR 58 crores, the increase in net working capital would have been lower at INR 1,931 crores, vis-à-vis the INR 5,600 crores, reflecting actually a reduction of 11 days year-on-year. The net debt at the end of first quarter stood at INR 7,574 crores as compared to March 2022 levels of INR 26,486 crores, primarily due to significant increase in working capital as highlighted earlier. However, adjusting for the reduced factoring, that's of INR 3,000-odd crores, the effect impact and the implied increase in net debt on a sequential basis would have been lower by INR 3,392 crores vis-à-vis the INR 7,574 crores. Accordingly, the implied net debt would have been around INR 22,300 crores as of June, as compared to INR 26,480 crores as is reported. Going forward, we expect the working capital days to be in line with our guidance of 80 days by the end of the year. This would lead to a significant release of working capital in second half of FY 2023, enabling us to manage our net debt position effectively by the end of the year. Further, as Mike and Jai high... As Mike highlighted, we have revised both revenue and EBITDA growth range guidance for FY 2023 upwards by 300 basis points and 500 basis points respectively, considering the improved performance. On this optimistic note, I would hand over back to the operator and we can start the question and answer session. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Anyone who has a question may enter star and one. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question is from the line of Prashant Biyani from Elara Capital. Please go ahead. Yeah, thanks for the opportunity. What would be the mandate of our JV with Bunge? Why to form a new JV after Bunge's investment in Sinagro? Yeah. Hello, Prashant. I'll take that question. Yeah, this is the second venture that we have entered with Bunge. We see them as a very good partner for our business in Brazil. They have an extensive soybean trading business as you likely know, and they're very strong, particularly in the country of Brazil. The opportunity we have with Orígeo is in the five states where that business is focused, largely those are large growers that are not served by extensive retailers in that region. There's not a significant overlap between our Sinagro business and the geography where the Orígeo business is being focused. This is an opportunity for us to take an entire portfolio to these large growers, and work with them in a way that not only brings them solutions, focusing on sustainability and yield, but also complete package, including the buying of their grain on the back end, which helps from a risk management standpoint. It's a very unique model, and we're very excited about this opportunity to really grow our business in that region of Brazil, where we don't have a significant presence today. Sure. Secondly, while Europe is going through a very unfortunate gas crisis, but, business-wise it would be beneficial for agrochemical players or it may be loss of business, due to lower agriculture activity? Yeah. Prashant, the agricultural activity continues across Europe. I mean, obviously there's been an impact with the conflict in Ukraine as well as, you know, hot, dry conditions across much of Europe over the past month. Especially. That being said, you know, we continue to see opportunities for our portfolio in Europe. Our NPP business is exceptionally strong in Europe, and so we've seen good growth of that business in several countries. Yeah, I mean, the gas situation, I would say is not impacting agriculture and not impacting the, you know, what farmers are doing in the field, and therefore our business continues to evolve and we're having, you know, good momentum there. Would we have any nutrient-based product, which can be placed against fertilizers, because fertilizers have been quite expensive now? It may be an opportunity for those nutrient-based products to be sold. Yes, absolutely, it's a very exciting part of our NPP portfolio where we have microbials and other nutritional products which really help our growers, you know, create stronger roots and ultimately manage some of their increasing costs that they're seeing with fertilizer. Maybe I'll ask Ashish to provide some color to this situation. We have a very strong portfolio in India, and we've expanded it recently. Ashish, maybe you can highlight some of the opportunities and products that we're selling in India and how they're helping farmers with managing their overall fertilizer costs. Sure. I think fertilizer scarcity is a big, big problem in India, and we have very few liquids for it. We have perhaps the biggest NPP or the bio-solution portfolio in India, starting right from the time even soil is prepared. We have products, you know, we have mycorrhiza-based products which actually helps to pick up the fertilizers from soil. We all know that, you know, fertilizers are lying here inside and a lot of the elements are immobile. These products help them to take the extra fertilizers or extra macro and micronutrients inside. We have products like, you know, phosphate-solubilizing bacteria, you know, which can actually move the phosphorus which is already there in the soil. We have products, you know, these days, you know, fertilizer scarcity is one thing, but we also have huge challenge on the kind of heat that we are seeing in India. Again, we are very well placed with that, and we have certain stress, you know, abiotic stress products. We have the full range of products which can help to counter this entire thing on the fertilizer front. We also have, you know, in addition to this, we also have, you know, liquid fertilizers that, you know, they're having macro and micronutrients which also has been doing very well for them. With that, yeah. Thank you for the opportunity. Thank you. We will take a next question from the line of Girish Achhipalia from Morgan Stanley. Please go ahead. Thanks for the opportunity. Is it possible to provide a range on interest costs? Because we are seeing that 80 days is the net working capital at the end of the year. Obviously, your expectation on interest costs would have increased given what is happening. If you can guide on that range. Secondly, what is the net debt reduction guidance, and does it include the share buyback or is it excluding the share buyback amount that you've already spent in Q1? Yeah. Thanks, Girish Achhipalia. This is Rajendra Darak here. On the interest costs, you're right. You know, I mean, there is a spike because of the base increase in LIBOR or SOFR as these days that's been the benchmark, and we are seeing corresponding increase in most countries. We expect at least the interest cost level. I'm not talking the finance cost. The interest cost is anywhere in the range of around INR 300 million would be the overall cost of borrowings, you know, for the financial year, full financial year. So that's on the interest cost. On the net debt guidance, you know, we have told at the beginning, we are looking at INR 400 million. I think as Mike also alluded, we are committed to bringing the working capital. We are at least at this stage maintaining what it is, but we will keep you updated as we move forward quarter on quarter. All efforts are being made to see wherever possible to reduce the working capital and see how we can reduce the net debt. Is this number gross of the share buyback or net of the share buyback, the INR 400 million? It's gross of the share buyback. Okay. If you can guide on the CapEx, because your run rate on growth is, has surprised on the upside. Is there any upward guidance to that? I also see in your exceptional items, insurance claim was close to $600,000 or higher. If you can provide any color on when this money would be received. No. As far as the CapEx, we are not changing the guidance. We are retaining our guidance or what we had said at the beginning of the year, around $300-$325 million. As far as the insurance claim and the exceptional, we are you know, we as we are you know, these are large amounts, the insurance claims, some of these are taking a bit of a time. We are confident of getting these claims either this quarter or definitely by next quarter. That's the plan as of now. Thank you. That's what we also want to improve from here. Sure. I'll get back into it. Thank you. Thanks, Girish Achhipalia, for joining us. Thank you. Our next question is from the line of Abhiram Iyer from Deutsche Bank. Please go ahead. Yeah. Congratulations on this set of numbers. I have similar questions sort of mirroring the leverage reduction. Now, obviously, we're targeting INR 400 million leverage reduction over the year, and it's gone in the opposite direction because of lower factoring in receivables. Is it fair to say that towards the end of the year, the reduction might potentially come from the reversal of this lower factoring in receivables or would this come through a different avenue in terms of paying down the debt from our cash flows? No, I think, for this quarter at least, we did the assessment, you know. We chose to do the borrowings, the normal borrowings rather than do the factoring. We'll assess the situation. You know, typically, as you know, every beginning of Q1, Q2 and Q3, the trend, the working capital keeps going up. In Q4, we have the drop in working capital as we see the collections coming through from Latin America as well as from the European and U.S. markets. Strategically, if you look at last five years, you'll see that working capital is going up quarter on quarter, and then it drops in Q4. As far as factoring is concerned, we would like to maintain at the same levels because what we are seeing is increasingly as far as the rating agencies are concerned, they don't give the benefit of factoring, although not a single dollar of factoring is with reports. All our factoring is without reports. So clearly, and also as far as delinquencies are concerned in terms of receivables, it's a very low ratio. We also take credit insurance. So we will see, as we move forward, we will see what are the arbitrage opportunities available. If factoring costs are very high, as I mentioned also in certain geographies, Q1 we saw them shooting up. We decided to go for plain vanilla borrowing. So we'll continue to keep evaluating. As I said, we will see. We will work towards the net debt reduction target, what we had guided for at the beginning of the year. Got it. Just a quick question on your perpetual bonds. What's the company's current status on the same? Is it, you know, to be called at the first date or is it a decision that will be taken later, and maybe only at the step update? Well, you know, by definition they're perpetual, so they need to be, they will remain. We're closer to the. You know, after five and a half years, there's an interest reset, and we'll put up to the Board and decide as to how we want to whether we would like to continue or discontinue. I think some of the rating agencies, even if we continue after five and a half years, do not give us the benefit of it being treated, 50% of it being treated as equity. We will take a call based on when we are closer to the date, which is at the end of five and a half years, where we have the interest reset to be done. Got it. Thanks a lot for your answers. Thank you, Abhiram, for joining us. Thank you. Our next question is from the line of Antonio Luiz Gomes from Ninety One. Please go ahead. Hi there. Thank you for your time. I appreciate it. I just had a couple of questions regarding your financial policy. You know, you mentioned the INR 400 million debt reduction and as you've mentioned, the receivables factoring. You know, you're looking to keep it stable. I was just wondering on the equity. You know, any dividends or share buybacks that you're planning on, you know, going forward, and what kind of free cash flow you're looking for overall towards the end of the year. Thank you. Thanks, Antonio. Thanks for joining us. Antonio, as far as share buyback is concerned, we've done it at the beginning of the year, and as per the regulators in India, we cannot do one until the next 18 months from now. Therefore, we have no intentions as of now, at least for this financial year, statutory we cannot do. Not that we have any intentions of doing a share buyback again, having just completed one. As far as dividends, we do. A policy is put up on the website. We declare anywhere between 20-22% of our PAT, 20-25% of our PAT as dividends. that remains our policy unless there is at the end of the year, based on the financial results and the cash flow, if the board decides, then we may, you know, we may change the policy. I don't see that happening. That's been a consistent policy for many years now. Whatever free cash we have, we go to reduce our debt and besides whatever is the budgeted CapEx and other budgeted expenses and other things. That's broadly our financial policy on free cash flow. Okay, great. Thank you very much. Thank you, Antonio, for joining us. Thank you. Our next question is from the line of Abhijit Akella from Kotak Securities. Please go ahead. Yes. Hi. So just a couple from my side. First is on the guidance. Just wanted to clarify whether this 15%-18% EBITDA growth guidance is on a US dollar basis. Should we take, you know, the FY 2022 base of EBITDA as- $1.368 billion. Would that be the right, you know, assumption to make? I think we have to go with INR. Whatever the industry uses. Our original guidance also was on INR. Basically, guidance is typically we give it on INR basis only. That's our reporting currency, right? Okay. It's on INR basis. Okay. Second, on the balance sheet front, you know, the guidance of 80 days for net working capital. The last quarter's presentation showed a net working capital days of 69 as of March 2022. How should we you know read that? I mean, is there a you know pending increase in net working capital that we're talking about? The other thing I just wanted to check was on Latin America. Last quarter we had guided to about single-digit revenue growth for fiscal 2023. It seems to be growing considerably faster than we had anticipated, which probably puts pressure on the working capital. You know, how do we sort of manage that situation? Thanks. Sure. No, you're right. You know, I mean, we delivered 69 days and it would be our endeavor to keep improving on the working capital. We always give a bit of a conservative guidance and therefore we have always even last year we had guided for 80 days around those levels. We maintain that for business of the model which we follow and the business of our size, we will rather be conservative than to overshoot our guidance. As you have seen, last year also we delivered much better numbers on working capital. That endeavor to keep reducing our working capital year-on-year is something which we continue doing it. You're right. Maybe, you know, you can send in something in between for your modeling, but that's broadly the indication from our side. Mm-hmm. Maybe on the Latin America Anand, maybe Yeah. I'll give it to Maybe I'll jump in on. Okay. Yeah. Obviously coming out of Q1, you know, which is a smaller quarter for us, but we clearly have significant momentum in Latin America with overall growth of 38%. You know, as we increase our overall guidance on revenue, we would expect that Latin America will, you know, be greater than the single-digit growth. That would be our expectations. Now, there are parts of Latin America where working capital is quite efficient and other parts, such as Brazil, where our working capital is not quite as efficient. We're working with our teams there and with our partners, and we're looking for ways to improve the working capital efficiency. You know, I do believe that we will succeed in doing that this year, although it'll likely be a multiple year journey. Yeah, depending on where our growth is, it does have an impact on overall working capital. That would be the color on our Latin America growth. Okay. Thank you so much. I'll come back in the queue for any more. Thanks, Abhijit. Thank you. Thank you. The next question is from the line of S. Ramesh from Nirmal Bang Equities. Please go ahead. Good evening, thank you very much. My first thought is on the stupendous performance in Latin America and North America. To see the ground level, you know, data point and currency we have been hearing negative news on the weather and the, you know, expensive cost of chemicals and fertilizers. What has exactly driven this growth in spite of all the challenges? Is there any inventory you have pushed to the trade, which explains the volume growth? Secondly, what is the current status on your credit rating? Maybe I'll start with the Latin America, North American business, and then, Anand, you can talk about the credit rating. I mean, generally speaking, coming into the planting season in the Americas, you know, the weather was, you know, generally in a good situation. Again, other than, I would say some parts of Mexico and then the western part of the U.S. where it's been extremely dry. The crop got planted, the row crops got planted, and our portfolio, you know, was performed very well. Now look, I think the entire market was strong. As the rest of the industry, you know, will be reporting over the next several weeks, I would expect that there's overall strong market growth across the Americas. I do think our performance is gonna be on the high side both from a price and a volume standpoint. You know, you talk about product costs. There's no question, of course, including with our portfolio, that the prices are higher. Of course our costs are higher as well. When you take it to the grower margins, you know, based on strong commodity prices for row crops, generally across the Americas, the income statement is gonna be strong, margins will be strong for growers across our region. That's how it's played out. In terms of inventory, look, I do think there was probably a little bit of incremental buying this year in anticipation of a strong market and with everyone a bit concerned about product availability. When we look at our portfolio in particular, we believe that channel stocks are in a good position. With our core products in the marketplace, we think that we're, you know, well-positioned from a channel stock standpoint. On top of that, we've got a number of new products that we're launching. Over 80 products in total around the world, and some very significant blockbusters that we're launching in Brazil and the U.S. Yeah, we're very optimistic we're gonna continue to see strong growth, you know, for the rest of the year across our region. Anand, maybe you can then pick up on the credit agency question. Yeah, thanks, Mike. I mean, you know, Ramesh, we, that's something which we are engaged with the rating agency. We are extremely conscious of our investment-grade rating. You know, if you look at again, if you do a simple calculation of net debt to EBITDA, we're well below the two, which is the threshold for investment-grade rating, and we are well below that. If you see the margins improving this year, I mean, it will only improve further. Having said that, you know, each rating agency has a different model. Some of them add back the non-recourse, some add back certain of the cash which is on the balance sheet, they only consider certain cash or free cash. The others, they consider as a part of the business requirement and so on and so forth. They have different formulas. We keep monitoring the situation. We work hard to make sure we remain as an investment-grade rating, but we keep engaging with the rating agencies on a regular basis. In summary, I can only say we are conscious that, yes, we are at the borderline, and we work hard to maintain our investment-grade rating. Thank you. If I may just squeeze in one more question. In terms of your guidance, are you expecting normalized weather for the rest of the year? What is the risk to that in case of any commodity price deflation? Would that have a negative impact on your margins as you cut prices? Can you give some thoughts on that? Mike, maybe. Yeah, sure. Yeah. You know, based on our guidance, I would say, you know, we're expecting reasonable weather throughout the key growing areas. That being said, you know, much of Q2 and even parts now of Q3, we do have orders in hand. You know, supply chain is working hard to deliver against that opportunity. We wouldn't anticipate price pressures necessarily in Q2 and Q3. Look, at some point if commodity prices, grain commodity prices come down and grower margins are challenged, that would be a different scenario. That's not what we're seeing right now. We're seeing grower margins strong. Look, I think it's a dynamic marketplace, and at this point in time, we're still in an inflationary environment from both a cost of goods standpoint, our process DNA, and again, you know, grower margins based on commodity prices, you know, have supported this, the current market dynamic. Thank you very much. All the best as I join the queue. Thank you. Thank you. Our next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Hello. Yeah. Thank you for taking my question. Mr. Patra, I'm sorry, he can't hear you clearly. Can you switch it to handset mode please and speak? Yeah. Okay. Is it right? I'm audible? Yeah. You can go ahead. Yeah. Congratulations on the great set of numbers. Particularly the key markets, the kind of strong growth number what you have reported. I'm just trying to understand, is it possible to share what is the volume rise and what is the price rise in the key markets in North America and Latin America? That is one. Second is whether this growth is to some extent contributed by the operational challenges what your European peers should be currently facing, whether you have realized any benefit of that competitive advantage? Yeah. Thank you for the question. You know, as we provided in the materials, overall, the volume increased over 6%, price increased 18%. I would say, you know, specific to your question, in North America, it was heavily weighted to volume, and in Latin America, it was heavily weighted towards price. There was some difference between those two markets. Volumes were you know, less of a contribution in Latin America. We did see really strong herbicide, insecticide, fungicide movement in North America. Our volumes there were quite strong. That's you know, on just from a volume versus price. With respect to you know, the competitive set, we haven't seen any impact from an operating standpoint across our competitors. I think supply chains have continued to be a challenge, including freight and logistics. I think the resiliency of our supply chain is clearly one of our competitive advantages. As I talk to our customers, especially some of the global retailer and distributor companies that really understand the impact of global logistics, we are viewed as a company that can be, you know, extremely reliable in delivering product. That has given us a competitive advantage. I think that's an advantage that's gonna be durable. Specifically to the European competitors, we haven't seen anything specific at this point in time. Sure, sir. Just an extended question on this. How should we look at this gross margin scenario? While the prices has gone up by 18%, there is a favorable currency factor, still the gross margins remain almost, YoY remain flat. Now how should one view this? There is a kind of integrated operation that we generally go for. How should one see the gross margin today for going ahead, moving? How should be that panning out or moving ahead? Any sense on that could be useful. Yeah. I think if you kind of zoom out on the situation and look at our portfolio, you know, last year about 30% of our portfolio sales were differentiated and sustainable products and about 70% were post-patent. As we look ahead and look, say that, over the next five years, we believe the evolution of that mix will move to more towards a 50/50 mix. As we see the performance in our portfolio today, we can see that cost of goods impact has a much lower overall impact on our differentiated and sustainable products. I think that part of our portfolio is extremely durable. You know, as you know, if we see commodity prices change going forward. Obviously the post-patent part of our mix is impacted at a higher rate based on cost of goods as well as commodity prices. That part of our portfolio, I think, will be more dynamic, as you know, as the markets evolve and the differentiated and sustainable products, which is our fastest growing segment overall, if you look over the next three to five years, that part is less impacted by the volatility in cost and commodity prices. Okay. Just a quick question. On the NPP biosolutions, I think it has performed strongly this quarter across various regions. Can you share what is the accumulated number for the quarter? We don't break out by segment on a quarter-by-quarter basis. Yes. Yes. We provide that guidance on the year. You know, we guided for the year that we expect our mix will be approximately 61%, sustainable and differentiated products this year. You know, Q1 is a smaller quarter for that part of our business. I would say there's not a lot to read through based on you know, how Q1 played out. That being said, just like Ashish talked about from an India perspective, you know, there is a lot of interest and growers are looking at the significant portfolio that we do have in bio solutions, and we continue to add to that portfolio from an innovation and a collaboration standpoint. Yeah, we're very excited about that part of our business. We're leading in that whole sustainability front right now, and we're looking for more collaborations going forward. We do expect that we'll see good growth in that part of our business as the quarters evolve. Like I said, the first quarter is not a significant quarter specifically globally for the NPP portfolio. Sure. Thank you. It's all I have, sir. Thank you. Thank you. Thank you. The next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Sure. Good evening and thanks for your time. Want to understand on the ground level measures that you are actually doing to bring down the working capital days or be it the debtors or even inventory or the payables. Because it appears that we are growing the fastest in the market, which has the highest working capital base. This is becoming a circular reference every quarter for us. How do we really break this and/or at least on the ground, are we doing something different at least that going forward, at least the working capital days could slightly come off? If you could help us understand on this. Mike, maybe you can start. Yeah. Then I will chip in. Yeah. Perfect, Anand. Look, it's a very important question and we do have a lot of focus on this specific area with all of our teams on the ground. We're working closely with our customers and we are looking for opportunities to, you know, look at our portfolio. Again, as we look at our differentiated and sustainable portfolio where margins are strong, you know, we continue to wanna have commercial terms which really benefit those products and allow us to grow that part of our business, you know, exponentially. I think as we look at just the margin profile of our entire business and, you know, just like in any business, there's parts of our portfolio that are lower margin. I think as we think about our business going forward, we're gonna be more discerning on payment terms and credits that we provide on the lower margin part of our portfolio. Again, I think this is gonna be evolutionary in nature, not revolutionary. It's something that we're very focused on. As Anand and I both mentioned, we're committed to getting to 80 days of working capital by the time we get to the end of the year. Our teams are working hard to make sure that we deliver against that. Thanks. Maybe we have our global head of supply chain, Raj Tiwari, and he can some of the initiatives which we are taking on inventory management, he can share his thought. Over to you, Raj. Yeah. On inventory in the first quarter, we have little bit high inventory as compared to last year. It's basically because of the fact that you know, India has been flat and we are building the inventory for bigger Q2 and Q3 looking at the growth momentum what we have. As you know that, you know, as you have noted in the previous years, that generally we do that buildup, and then in the Q4 you'll find that our inventory comes down dramatically and we are confident of delivering on the inventory guidance what we had given earlier. Maybe you can elaborate on some measures which are taken to reduce the inventory. On the measures, you know, specifically for your inventory, what we are doing is we are running a project specifically on inventory measurement. Wherein we are looking at building inventory at technical level and not at formulation so that we can be closer to the market. When the demand comes up or pent-up, at that point of time we can quickly formulate and serve the market. Specifically, for the LatAm and in the U.S. As I mentioned during our annual investors meet, we are targeting a 10% reduction on the inventory as compared to last year's, you know, closing. That I'm confident that we should be able to achieve. Thanks. To your question, Vishnu, there are several initiatives being taken and as also Mike mentioned in his initial remarks, I think we are you know really working hard to make sure that we manage and see how we can improve on our working capital. There are several initiatives being taken both on the payables, on inventory, storing inventories and so on and so forth. It's a clear focus area and we will see. We are quite confident that we will be able to bring some changes by the end of this year. Got it, sir. Just on the commodity prices, on one side, we are seeing some softening and secondly we are taking price hikes. Wanted to understand that next couple of quarters should our margins expand and also connected point, if crude were to stay stabilized at 100 or say closer to 90, then is there a possibility of a faster working capital release? Because I think as of March we were at probably at 115 when we closed. If it ends up slightly lower, then should we see our guidance of 400 go up slightly? This as a hypothetical question, but at least directionally as strict as possible on both these. Yeah. On commodity prices, you know, they did spike up three or four months ago and of course we've seen at least in most row crops, those prices have come back down. I mean generally the prices are very strong and as I mentioned earlier, you know, grower margins are still supported based on, you know, both current and future commodity prices. I think in terms of our margin expectations, you know, we do expect an increase in margin on the year. You know, again, depending on what happens with cost of goods as the quarters play out, we'll see how that evolves. We would anticipate a little bit of a strengthening of margins as the year plays out and, you know, especially as we look at Q2, Q3. Got it, sir. One question, if I may, on Brazil, we have been growing pretty fast. As one of the previous participants was also asking, if our European competitors are not able to supply in the market, do you have a significant headroom for growth in this market or we are more or less there from a medium-term angle? If you could just give some direction on this. Yeah. Again, we're not quite. Yeah. No, understand. You know, we're not anticipating that there's gonna be significant shortages. You know, but look, we've got a very strong portfolio in Brazil. You know, our OpenAg Farm where we are focused specifically on UPL products in both soybeans and corn. Over 70% of all the inputs on this research and demo farm are UPL products. We have a portfolio that really stands across both crops. On that farm we're seeing yields much higher than average yields. We're very confident in our portfolio. We're launching new products this year, LIFELINE Evolution, LIFELINE 280, which is one of our important herbicides. You know, we have growth built in. One of the strengths and I think core competencies of UPL is our agility. As the market evolves and, you know, if certain situations happen with our competitors, again, we'll use our agility as one of our core strengths to take advantage of any opportunity. Got it, sir. Thank you and all the best. Thanks. Thank you. Thank you. Next question is from the line of Tarang Agrawal from Old Bridge Capital. Please go ahead. Hi, good evening. Three questions from my side. One, you know, while Brazil is the biggest crop protection market and you've been doing reasonably well there, but, it is also a sizable portion of your business now, which brings in reasonable amount of concentration risk, whether it's property or, you know, clearly or in terms of balance sheet. How should we see this, you know, sort of getting hedged over a span of next two, three years? Do you anticipate, this part of the market to, contribute lower than what it does right now? And if so, what are the steps that are gonna be taken to sort of, address that? That's number one. Number two, if you could give us a sense on what your working capital cycle is across the markets that you operate in. Number three, with the fire incident at Ankleshwar, did it have an impact on your business in Q1? If so, if you could give us some qualitative sense as to how it impacted your business. That's it. Thank you. All right. Why don't we answer that in reverse order? Raj, why don't you take the. Yeah. Location, and then, Anand, you can take the working capital cycle. This fire was in a plant which used to make monocrotophos. You know, there is a very small impact, basically India business. Monocrotophos is India-based, and that's a very small. You know, out of the total year, the requirement of monocrotophos, 50% volume we already had in hand. It's only about, you know, 50% volume loss of business. Which is, it is not significant. Which is quite small. That's on that fire incident, you know, loss of business which you asked. Thanks, Raj. Tarang, on the working capital by region, we generally don't share that data because, you know, it's not only that, we do factoring in some markets we don't do. Then the terms vary from each market to market. Within that, also within the crop, the terms vary. It it's, you know, depends on the, what sort of weather, what cropping is done, and that determines the working capital because in certain markets it has to be based on the, what you call the crop terms. In certain markets, it's a fixed 90 days. In France, it's 45 days. That's what the statute. It varies from market to market. Over to Mike. Maybe just on Yeah. Yeah. On Brazil. Look, I think if you look out over the next two or three years, the reality is we've got strong momentum in Brazil, but also in many regions outside of Brazil. I wouldn't anticipate a material change in the mix of our business from a geographic standpoint in the next two or three years. You know, we're gonna see, I think, exponential growth beyond Brazil. It's gonna be in North America, in India, in Southeast Asia. We're seeing very nice growth across Africa right now. With our NPP business, that really has a global opportunity for us and probably weighted very heavily on Europe. We do have a number of layers of growth that we are aggressively pursuing, you know, outside of Brazil. That being said, our Brazil business and portfolio is extremely strong, and so we're gonna continue to, I believe, to see strong growth in that market there as well. Okay, thank you. Thank you. Our next question is from the line of Rohan Gupta from Edelweiss. Please go ahead. Hi, good evening, and thanks for the opportunity. The question is on our increased or reduction in factoring per se. Definitely a lot of working capital requirements have gone into that. Just wanted to understand the reduction in factoring, which are the primary key markets where you have reduced your factoring and where you see that going forward, this number can recover here. Thanks, Rohan, for joining us and for your question. Rohan, currently, I think we have reduced factoring in Latin America where the interest costs have gone significantly high. We are monitoring the situation. I mean, at least I don't see the cost coming down over the next one or two quarters. We'll probably compensate that by doing more in other risk markets like U.S. and Europe. That's, as of now, the plan. Let's see how the interest rates behave as we move forward. I think factoring definitely not only just improve our cash flows, but also gives you in terms of hedges as against any payment failure. Do you see that this Latin American market where you have reduced factoring and increasing working capital increases your risk of bad debts and further increasing overall working capital cycles overall? Oh, we looked at those things, those facts, and, you know, based on that only we took a decision that we would better go for taking third lender loans instead of going for factoring because we looked at the track record over the last two years and we have extremely low bad debts in single digits. Yeah, we are quite comfortable and considering that interest costs have gone up almost three times more, I mean, average cost of borrowing last year. I mean, the CDI, what you call, in Brazil and some of the other LatAm countries, the basic bank rates, they have gone up almost 300%. You know, they were in the range of 4%-6%, they are now in the range of 12%-15%. Doesn't make sense to pay that sort of cost of borrowing. This is last from my side. On the increased or revised guidance for the year forward, can you just give some more color? Is this primarily driven by unit growth? Which are the key markets you see that there is a high growth which you are predicting now, which we didn't earlier when we gave the guidance earlier? Yeah. Rohan, I would say again, we're likely seeing very strong growth coming out of the Americas, across the Americas. Strong growth in Southeast Asia, in Australia, and in India and Africa. I think all those markets will contribute to our growth and are giving us confidence in the revised guidance that we issued today. Thank you, sir. Thank you very much. Thank you. Ladies and gentlemen, in the interest of time, we'll be taking our last question from the line of Rohit Nagraj from Centrum Broking. Please go ahead. Yeah. Thanks for the opportunity and, congrats on a strong set of numbers. My first question is on the FMC contract. Where are we currently? We've started, you know, supplying the material. When are we expecting material benefits from this particular collaboration? Thank you. So maybe there's two aspects to that. One is from a supply chain standpoint, the other one is from a commercial standpoint. I'll let Raj talk about the supply chain piece of it. Commercially, we have started commercializing chlorantraniliprole in a number of markets. As we look at the next 24 months, we have the opportunity to commercialize in more and more markets. If for FY 2023 this will not be a material part of our business, by looking at FY 2024 and beyond, it will become a more important part of our business. But Raj, maybe you can also talk about it from a supply chain standpoint. Yeah. Thanks. Rohan, on the chlorantraniliprole on the supply chain side agreement, we have already commissioned the plant in the last quarter, which is the you know Q1 of this year. We have started already commercializing the supplies to our customers. All right. Thanks. The second question, again, hopping on the working capital. The higher working capital is also a function of gaining market share from competitors, or is it purely based on the other factors that we have, you know, elucidated in our discussion? Thank you. You know, so specifically we're not using, let's say, our balance sheet to try and gain advantage over competitors. We're not going out with extended terms or something like that to gain an advantage. In fact, we're being very diligent with how we position our products. That being said, you know, I think with our increase in volume in INR of 6%, it's likely on the higher side. I do believe we are gaining share in the marketplace. I really think it's based on our, you know, the strength of our portfolio, our go-to-market approach, and the relationships that we've established with our customers. Again, the view and the understanding of our. The resilient supply chain we have, and we're getting the benefit of that when customers are looking at alternatives and they're deciding to de-risk their business by partnering with us. Those are the advantages we have, I would say, in our business right now. Right. Got it. Just one last clarification. On revenue growth guidance of 12%-15%, what is the volume growth that we're considering? You know, again, coming out of Q1, we saw, you know, about one quarter of our revenue increase was from volume and about three quarters from price if you ignore currency. I would say that ratio will likely make up our growth as we look at the whole year. There'll be a piece of it, a quarter to a third that will be volume related and, you know, two-thirds to three-quarters that will be more price related. Right. Got it. Thanks for all the answers and the best of luck. Thank you. Thank you. Okay. Thank you very much, everybody, for joining us on this call. If you have any follow-up questions, feel free to either reach out to me or to Radhika. We'll be happy to answer your questions. Thanks again for joining us on the call. Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of UPL Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.