Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q1 FY27 Earnings Conference Call.

Today we are joined by senior members of the management team, including Mr. Mayank Singhal, Executive Vice Chairperson and Managing Director; Mr.

Sanjay Agarwal, Group Chief Financial Officer; Dr. Atul Gupta, CEO CSM AgChem and Executive Director; Mr.

Jagresh Rana, Global CEO of PI Ag Sciences. We shall begin the call with key perspectives from Mr.

Singhal. Following that, Mr.

Agarwal will share his views on the company's financial performance. Thereafter, the forum will be open for question-and-answer session.

Before we begin, I would like to underline that certain statements made on today's conference call could be forward-looking in nature. A disclaimer to this effect has been included in the investor presentation that is available on stock exchange website and also shared with you earlier.

With that, I invite Mr. Singhal to share his perspectives.

Thank you, and over to you, sir.

Thanks. Good afternoon, everyone, and thank you for joining the call today.

I will share a few of my perspectives on the agrochemical industry dynamics, followed by PI's performance and progress on its new strategic initiatives. The global crop protection market is showing early signs of demand and stabilization.

While geopolitical and energy disruptions have moderated, the need for resilient supply chains and diversification needs have been reinforced. This environment plays directly to PI's strengths as a research technology leader with unique proposition of a long-term partnerships.

The industry is going through a structural shift with adoption of safer, more sustainable technologies, while increasing scrutiny and replacement for older technologies and solutions with limited innovation to answer these challenges. In addition, competitive edge is moving forward with innovation, process excellence, and ability to commercialize new complex solutions.

As PI has invested ahead of the curve to differentiate capabilities in the area of research and technology to find chem-bio solutions for the end farmer. Today, our customers view us not as a reliable long-term partner, but as someone deepening our relationships across the business value chain to deliver more economical and sustainable advantages.

These capabilities closely align to PI's business model over decades serving highly regulated global innovated solutions, providing strong foundations for our expansions in high-value adjacencies such as pharma, electronics, and specialty chemicals. We believe PI is well-placed to participate in the next wave of technology-led growth while continue to create long-term sustained value for all its stakeholders.

On the domestic front, this year has begun with El Niño, strong heat waves, delayed sowings, and high levels of inventories from prior years. As you see today, sowing and monsoon has picked up, and we believe sowing is at par as the last year.

This delay, however, has impacted pre-placement sales of chemicals. While there has been shortages of fertilizer area, our special efforts to use biologicals to support the need of the farmer while addressing the need of a sustainable vision in agriculture has resulted in achieving a positive quarter, an aggressive growth of 50% in biological, and a flat rather than a negative outlook.

We believe this would be seen positively in the coming period ahead. There are pressures on margins due to high input costs, higher levels of inventory.

However, we believe consumption patterns would see a positive trajectory, and the industry remains cautious and watchful of erratic weather and climatic situations, which will impact crop and consumption. Overall, we believe the long term, the need for food, population, farmer global are demanding solutions for a safer, selective, and sustainable.

Innovative solutions with integrated approaches of chemistry and biology, driven by strong capability of R&D and commercialization with a proven trust of execution, we believe this positions us strongly to be a long-term winner. With respect to export business, the operating environment continues to remain challenging.

Soft commodity prices, in line with impact of previous year industry downturn and muted recovery in crop economics, consumption patterns continue to exert pressure on growth and pricing. This is further compounded with the rising costs due to geopolitical issues and genericization pressures, including tariffs.

Given our unique business model, we remain confident of a positive trajectory for the business over the mid to long term. We commissioned in one of the world's largest flow plants, advanced flow chemistry capabilities, ensuring better, sustainable, safer, of hazardous chemistry and superior process control, and to look at manufacturing for the sustainable labs while value-adding to the cost and efficiency of production.

PI continues with such unique complex capabilities with a well-position to be meet futuristic requirements of our products and solutions with high precision meeting stringent regulatory compliance standards. I'm also happy to inform that, slowly but steadily, we are moving the right direction in our pharma play and seeing early positive sign transforming a differentiated CRDMO organization.

Some early shoots of couple of interesting inquiries seem going into the commercial phase. On the other side, the capability buildout is now coming to a stronger foothold, putting the Center of Excellence of drug discovery in Hyderabad and CRO facilities to support IDE programs with customers and the commissioning of a QC lab of which is now approved by regulators in our sites in Italy.

With regard to the electronic and specialty chemicals, the inquiries and commercializations showing a positive trajectory. The investments which are supporting for this are also running on track.

PI is moving into the next orbit, where we've become a research technology-based company through partnership models with a global footprint while investing in our core strengths to bring innovation to life at a global level. Let me now turn to our biologicals, which we have been in passion the last two decades, during which we have built one of the most comprehensive biological portfolios in India, now with the passion of expanding this into the global markets with the last over our acquisitions with a unique peptide platform.

We are excited to see the progress and investments that we have made in the past and the coming year, that results are in the various large-scale demonstrations and validation, conviction of our farmers, showing consistent form performance across the geographies: United States, Mexico, Brazil, and Asia. Our unique new foliar application nematicide, first of its in the industry, is at par, if not better, than some of the chemical alternatives, creating a meaningful differentiation to the farmer.

Now I would like to move and focus on defining platform for PI, which is built over decades. Our in-house innovation in R&D platform, our first NCE, Pyoxaniliprole, an insecticide discovered in India for Indian farmers, now to go to global farmers, is set to be launched in domestic market very soon, our awaiting the regulatory approvals.

This marks our capability by demonstrating our ability to have invested at a global scale and take innovation from India to the world. We've invested deeply both in financial, processes, and human capabilities to ensure our ability to deliver this at a global scale, to taking molecules from lab to market.

These capabilities over the years will be leveraged with the pipeline of products that we have. While looking at the external challenges and aggressive investments to support our new initiatives, we remain positive on the growth trajectory for '27.

With this, I will hand this over to Sanjay for the financial performance. Over to you, Sanjay, and thank you.

Thank you, Mr. Singhal.

Good afternoon and a very warm welcome to everyone. I'll summarize our financial performance for the quarter of FY first quarter of FY27 and the progress we continue to make in strengthening PI's long-term growth initiatives.

While the quarter witnessed softness amid cyclical headwinds and global disruptions, we are steadily transitioning towards growth trajectory. For Q1 FY27, reported revenue is INR 17,023 million, with healthy gross margin of 57% and EBITDA at 22%.

To bring context to these numbers, let me explain few of the initiatives behind each of our businesses. Firstly, AgChem exports business, which is built on a deep foundation of innovation, R&D excellence, complex chemistries, and next-generation technologies, has created a significant competitive moat and delivered differentiated value to our global customers.

While the business has faced near-term challenges reflecting contraction of global crop protection industry, the strength of our core business remains intact and future-ready. We continue to invest in this platform through commercialization of new molecules and targeted capex, positioning us to capture the next phase of industry revival and growth.

These capabilities not only reinforce our strategic partnership with global innovators, but also provide a strong foundation for expansion into high-value adjacencies such as electronic and specialty chemicals. Thereafter, domestic agri business continues to be built around differentiated and high-value crop protection solutions rather than a generic product approach.

Many of our flagship brands, including Nominee Gold, Brofreya, PiVita, have maintained leadership position over over several years, reflecting the strength of our portfolio and customer trust. Biologicals have shown an aggressive growth of 50%, with a 3-year CAGR of 15%.

Over decades, we have over decades, we have developed a deep market presence with more than 15,000 distributors and 1.5 lakh retailers, creating a resilient channel network and strong partner relationships that help us effectively navigate market and supply chain disruptions. Despite a challenging operating environment in the domestic market, we delivered a 12% volume growth in this quarter, translating into a 3% revenue growth.

With the new product launches planned and monsoon conditions improving in this quarter, we remain optimist about the growth outlook for the coming quarters. Over the past few years, we have strategically invested in building an integrated pharma platform across Jaipur, Hyderabad in India, and Lodi in Italy, creating a differentiated capability base and a strong foundation for future growth.

While our current pharma business spans CRO and and product offering, our long-term ambition is to evolve into a fully integrated CRDMO platform, recognizing that such a transition requires patience, capability building, and customer trust. Our global biological platform continue to gain strong global traction.

We are on a track for aggressive growth across Brazil, Mexico, Europe, and US, supported by 500+ field trials, 1,000+ grower engagements are strengthening our market presence and accelerating adoption. We maintained a healthy gross margin of 57% during the quarter, supported by our disciplined execution.

While margins remain robust, we continue to closely monitor the operating environment given the volatility in the raw material prices. EBITDA for the quarter stood at 3,693 million, translating into an EBITDA margin of 22%.

This performance has been delivered while we continue to invest significantly in our future growth platforms, including new businesses, innovation initiatives, and R&D investments, which contribute 3% to 4% of our revenue. We expect ETR for FY27 to be around 24%.

Moving on to balance sheet, we've always believed in disciplined capital allocation and therefore maintained a rigorous focus on net working capital as well. Despite the challenging environment, the team delivered an impressive reduction of 19 days in net working capital, releasing 300 crores of cash.

We continue to drive excellence across our commercial and sales team to further strengthen working capital efficiency, which is, in any way, best in the industry. Our strong debt-free balance sheet supported with net cash of 38 billion provides resilience and flexibility for strategic investments.

We expect FY27 to be better over FY26, driven by recovery in exports in second half, supported by our new product launches and gradual scale-up of our pharma and global biologicals business. With this, I conclude my opening remarks.

I will now request the moderator to open the forum for Q&A. Thank you.

Hi. Good afternoon, sir.

Thanks for the opportunity. I'm audible, right?

Yes, we can hear you, Ankur.

Hi. First question on the new molecule pipeline.

Our annual report talks of 90 molecules under various stages of progress. Out of them, 60% of them are at advance stage.

Could you help us better understand how should one look at this pipeline across the AgChem, electronic, as well as pharma, biologicals, etc.?

I think, Ankur, that is a very, very long question. I think pipelines overall look at what we have production development.

It's a funnel approach, as you rightly understood, and there are about 60 they have 90 projects under that class. Pipeline with these molecules usually, there are majority would be AgChem, which are one is pipeline the R&D, one is pipeline the CSM, the other is the pipeline of products which are going to go to market from a development point.

Now that gets further multiplied by chemistry and biology. Then we look at molecules and structures coming for electronics and specialty chemical segment.

That's the bundle of the whole piece. We don't really have the breakup right now, but that's a large number.

What I can say, very excited state from the NCE point of view, good pipeline here. Our biological products, we have a pipeline, as you've seen we've launched two products.

We have another two or three to go in the pipe. Each one seems to be showing very good positive trajectory given that huge potentials.

For the electronics, the pipelines are larger, but the value propositions are different. They are different.

I would say it's a pipeline aggressive, if you were to ask me in one family line, and it is interesting to see that some of these if fruitify would give us some great positive trajectory in the mid to long term.

Sure, sir. Just the comment that we had made launching of 4 to 5 molecules in FY27, would this be across only AgChem, or this includes electronic chemicals and other products as well?

It's

broadly in the AgChem area this year. The electronic chemicals and two would be about a couple of products and one or two in the pharma, which is not being covered yet.

More in the health science we will see that in that segment. Yeah.

Sure. Then just second bit on the comment on overall pricing across AgChem as well as the domestic agro business.

Is it fine now?

Yeah. Go ahead.

Still sound is maybe touch away. Please go ahead.

Sure. I'll probably talk slightly slower.

On the pricing front overall, across agrochem CSM as well as the domestic agrochemical side, we have seen some bit of pricing pressure in Q1 as well. Your thoughts if this is some product-specific issue, or it is general trend across the products?

Just to give you the input to the pricing pressure, you'll see the demand cycle has been challenged. Automatically, that puts pressure on price.

You've seen the last year performance in the ag industry has not been that aggressive, followed by the commodity prices have not picked up. These are directors which put up directives to be pricing pressure.

Also the other challenge, and the consumption pattern is not high. Once that is the pricing pressure, on the other hand, you have the challenge of input cost.

Striking that fine balance is the challenge in the industry today, and you can see that in the gadgets of the global companies which are facing this challenge, both in the input and the selling price cost. In certain cases, segments and companies which have one or two of simple generic products, which are large, where they have a pricing pressure and have been able to pass because the lower end of the value chain.

That's been the situation. Pricing pressures are there.

I believe this would be better answered starting the second quarter in the global scenario as how these market and the commodity prices pan out. I'm hoping, at least in my experience, I haven't seen such a long gestation period of cycle, that this finally, the cycle breaks, and that's really what we all in this industry are betting on.

Sure, sir. Thanks a lot for your answers.

I'll get back into the queue if I have more. Thank you.

Yeah. Hi, sir.

Firstly, on the guidance for FY27, you had earlier indicated that you would expect some sort of a growth this year. Would you reiterate that or any change on that front?

Sorry, I didn't get your question. It was a bit muffled at the end.

What was

the FY27 revenue growth guidance.

You see that, we stated earlier, we are looking at a positive trajectory and at the lower single digits as indicated earlier. Again, depends on the cycle in the industry.

It could go one way or the other, but that's what we are confident for right now and maintain the same as we said earlier.

Understood. On the EBITDA margin front, considering the different product mix that you would have scheduled through the year, how should we look at the margins?

Should we assume the run rate that we have seen in the last couple of quarters or any material change in the mix that we can see towards second, third quarters?

Margins are not that straightforward as you would appreciate given the geopolitical situation, the commodity prices, and the logistics and scenarios. At a product level, product mix, we will try and maintain with the optimization what the company is trying to do is to manage and look at meeting the targeted gross margins.

There could be challenges from a contraction that could become a challenge, but company is seeing how we optimize those areas. Not necessary product mix is something the only answer to that solution.

Again, opportunities may change with margins and structures. To answer very precisely, our objective is to keep and sustain our gross margins at the best possible levels by optimizing and being agile, given the best situation to be managed for the industry scenario in the volatile world that we are in today.

Sure. Just lastly, could you share the contract asset number for June '26?

It's around 750-odd crores.

Sorry, come again, sir.

For the year, you're looking for the contract assets for the year or the order book position?

June '26.

I don't have that number exactly here. As we basically disclose, about $1.2 billion order book position is standard which are running around, yeah.

Sure.

Thanks for the opportunity. Sir, first question is on Pyoxaniliprole.

You mentioned that in domestic market, we are currently in advanced stages. When do we expect a commercial launch in domestic market, and what are the timelines that we are looking at in the other geographies given that we have started the process of registering the product?

Thank you.

Hopefully, depending on the regulatory framework, we expect to have early start this year. If the season, it's more positive; if not, it's a different challenge.

We're hoping within the year, we should get the launch for India. On the other geographies, we will be finding with the local regulatory data coming in from the geographies, one coming up for one geography next year and the one for the year after.

That's the plan for now.

Sure. Thank you.

Second question is on the contribution of the new products in our CSM segment during Q1. What was the percentage contribution from that?

16%

to 18%. 16% to 18%.

Hello?

Yes.

Sure. Thanks a lot and all the best.

Thank you.

Thank you.

Thanks for the opportunity, sir. My first question is on the new launch peptide product that we are talked about, biological one, in the US.

Is it relating to the pharma or agri?

A lot of the products launched were more in the CRDMO play. Just to clarify, this is more in the agri, as you would see in the investor deck in my communication.

Sure. It is agri-related.

Sir, am I audible?

Yes.

Yeah. If you can also talk something about the new molecules, three molecules that is being launched for the export market and any visibility commercial success about those and the lineup, the product anything on that you can add on that?

These are for agri application. They're new generation products which we're working with global innovators.

That's the only level of information I can really disclose for today because they're still under development phases and confidential in nature.

Okay. My next question is on the capex side.

See, in fact, in spite of the industry challenges and all that, our capex momentum is very, very steady and consistent on that front. This quarter also, it looks like more than 250 to 60-odd-crore kind of a number that we are looking at.

What is driving this capex investment, sir, and what would be the full-year capex guidance that you can talk about for current year?

I think we have given a guidance of 700 to 800 crores, which is a standard capex, as you rightly said. Our present investment is 250.

They are going into three verticals: the existing manufacturing asset leaning investment, and investments going to our new verticals and our innovation-led approaches, key geographies, and products.

Okay. Just one clarification about the export growth number that we have indicated in the presentation.

We have mentioned that there is a volume decline of 8% while value decline is 12%. If I see the rupee depreciation benefit, that itself on a YoY basis is around 13-odd percentage.

If I just consider 8% volume decline, that would have been easily covered up by the kind of rupee depreciation benefit that we should have seen in this quarter. What is the disconnect that I am finding here, sir?

Glad that you're asking this question at the time in the early days. I remember when the rupee was appreciating, people were asking, "Oh, why is that?"

I think our business manufacturing approach has been a pass-through model of value propositioning, right? Certain areas currency benefits and certainly non-currency benefits, optimization is about managing margins at the optimum level.

That is really the way we have looked at the currency benefits. That's how it gets through.

It's a complex model for PI, as we discussed in the past, because currency benefits along value benefits are shared, and also we have a currency risk management which is also put into play. Given that our business is not of currency, but our business is more about the products and margins that we want to sustain.

Sure, sir. Just one last point from my side.

Regarding domestic growth, we have seen volume decline of 12% in the current quarter. Obviously, this is because of the delayed sowing and

We are the only few who have grown at 12% volume.

Yeah. 12% volume

It's not declined. It's a growth in the volumes.

Oh, okay. Sorry.

That is where my mistake. Thank you, sir.

Thank you for answering my query.

Hi. Thanks for the opportunity.

We seem to have 550 crores of expenses in pharma, and we're doing more capex in Narke. Has this acquisition not worked out?

Also, can you give the list of molecules we are working on in pharma? Of these, how many are in late stage, say phase 3 and commercial?

I think I just want to clarify to you the strategy. We are not in the business of molecules.

We are in the business of services, where we do contract manufacturing for products and drugs which are under development or at early stage development. That's just called CRDMO.

That's really where we are focusing. We cannot be disclosing patented or to-be patented molecules at all, because they're not our products, till they become products and they were globally known.

On the other hand, just to answer, yes, as you would understand, the contract manufacturing business has a long gestation period because you're starting to work in the pharma sector, as you're all efficient and you know better than me, that you need to start with the customer the early stage of development, then through the development stage you support, and then when it gets to commercialize, scale, then goes to volume growth. Investments in the regulatory framework, because the regulatory requirements need to be made upfront, so that you are a part of that value chain as product progress, we're able to optimize.

This usually the CRDMO in pharma is a long gestation J-curve. That's how I would answer that.

No, I understand, because other CRDMO companies give that list. Anyway, second question on Pyoxaniliprole's efficacy.

It's a diamide belonging to the same class as CTPR. I tried to look up data as to what is the efficacy against many of these pests.

How do you compare it with CTPR? Is this a flow chemistry-based manufacturing process, and what is the out-licensing potential?

We are not benchmarking it to CTPR. Diamide doesn't mean it is only CTPR as a diamide.

There are many diamides which are working in different segments, different pests, at different stages. When we have a different value proposition for our product, right, but yes, it is in a diamide class and in that segment, but with a differentiated approach.

That's one clarity. Clearly, we see good potential for the certain amount of crops where we see the advantage of this product compared to competing landscape, and that is also taking initiative in dialogues to look at partnerships with global footprint.

Last question. On our largest molecule today, I believe we have developed flow chemistry process capabilities.

Does this help in our EBITDA margins, and what is our relationship with our partner? Is there a possibility of the partner shifting to lower-cost suppliers?

I do not want to dwell into the commercial negotiation and contracting with our partners, because that's, again, tied under NDA and CV, as you would appreciate. Clearly, we have a very long-term strategic partnership, which is aligned together for over five decades, and we believe we will co-create and co-compete to take on the competition as things come through technology, through innovative dialoguing and discussions to look at the market.

We don't see a challenge from that perspective with our partner.

Got it. Thank you, sir.

I'll come back in the queue.

Hi. Good afternoon.

Can you hear me?

Thank you. Just a couple of clarifications, if I may.

One is the order book number. I just wanted to clarify.

I think you cited a number of $1.2 billion previously, a little earlier on the call. Is that the correct number?

Did I catch it correctly?

The order book you're asking, right?

That's right.

Correct.

Okay. That is stable sequentially, basically.

Yes.

Okay. On the contract assets side, Sanjay, I think in response to a previous question, you mentioned the number of 750 crores.

Did I catch that correctly as well, or some correction there?

No, that's also right.

Okay. All right.

Then just one final thing. On the domestic business, when we look at PI's peers that have reported so far, they've generally talked about soft volume growth, but a lot of price-driven increase in revenues, given just the pricing inflation post the Iran war.

In our case, it seems to be the exact opposite. Pricing under pressure, but volumes growing double digits.

Any color or any comments on just what the disconnect might be? Look, just

on a lighter note, yes, our approach has been to push and take market share with our products which were moving in that market share and not look at price softening. Price escalation is purely happened in the generic, high generic product ranges because that's where the commodities impact more, the basic eating commodities, yeah.

Understood. Thank you so much.

Yeah. Hi, sir.

A few bookkeeping questions. If I look at your subsidiary financials data, the EBIT comes roughly at 120 cr loss, but the pharma EBIT is roughly around 60 cr loss.

What's the disconnect, or where we are spending our money in the subsidiaries? If you could explain that.

In the business, there are several other new initiatives which we've built up over last few years, and the losses or the ramp-up of investments is what you're capturing between standalone to consolidated.

Let me take that example to be very specific. We are right now in our global biological business investing heavily in market development activities, as Sanjay stated earlier, 1,000 farmer interactions, 500 demonstrations in global geographies, and to bring satisfaction over a couple of seasons, and that is expected to earn revenue at a later stage.

These require human resources, because this business is more of soft investments. Those soft investments come in the P&L as a part of expenses.

That's really the challenge. You may call it good losses, which is equated to investments in our view, because you're building investments to create business for the future.

Whereas, from a financial angle, you're right, it looks like losses. Sir,

to summarize this, if I can look at in terms of numbers perspective, overall you are spending the money in terms of building biological business across the other geographies. These investment that you are doing at the Plant Health Care, is that correct understanding?

Sorry, I didn't get your question clearly. Hello?

Riju,

can you repeat the question?

Your

voice is not

coming clear. May you repeat, please?

Yeah. My question was regarding the additional loss at the EBIT level for the subsidiary.

That you are saying that this is mainly towards the biological business development apart from the pharma one. Biological business development and the related to the PHC's subsidiaries that we have acquired earlier.

Is that correct understanding?

I think part of what could gather completely. These are new businesses, whether it is pharma business or the global biological business, which is where we are front-loading the investment so that we get the growth in the next few years.

Understood. These kind of expenses will go maybe for next few quarters, is that correct assumption?

Yes. See, understand here we are building new technologies, right, new capabilities.

They need investments upfront to demonstrate benefit to the end consumer. Once they're well-established and the capabilities in the areas are well-established, the revenues and the business starts taking off.

Without this investment, you cannot achieve growth in scale, which we wish to. Yeah.

I hope that answers.

Understood, sir. Thank you.

Thanks for the clarification. One last question regarding the pharma business.

This time we have mentioned that few of our order book got delayed to the next and then the delivery schedule delayed. If you quantify that number in the pharma business, and are we still maintaining our pharma business guidance that we have given earlier?

Yeah. Let me answer.

As the CRDMO business is working with new innovators, new products, and new technologies. Clearly, sometimes there are sequential delays, but eventually they come if you're locked in with the customer.

These delays have driven from that. We look at the guidance, unless some shifts which could take place based on moving some products from one quarter to the other, or the demand shifting from that one quarter to the other based on launches or based on product demands, primarily the revenues that you can expect.

That's how this business is reflected with CRDMO. We are in the early stages, and we have more volatility, to be very honest and frank, because our portfolio levels are very small.

The minute we scale and more customers and portfolio is expand, the volatility standard deviation reduces, and that's the strategy that we took time to build. Yeah?

Understood, sir. Thanks for clarifying all my questions.

Hi, sir. If you look at the last 3-4 years, we have seen our R&D expenses almost increasing from 100 crores to 400 crores, plus our subsidiary losses last year was around 300 crores.

How should we look at these losses going ahead? Because even this quarter, we have seen almost 100 crores EBITDA loss in our subsidiaries, which was largely pertaining to the biological business.

Is there any timeline where these businesses break even and how these expenses should be looked at over the medium term?

I just want to clarify one thing, my friend. R&D to us is never a loss.

It's a value creation that we're doing. I think if you look at global benchmarking, and this is one of the things when we're pushing India into the innovation bucket globally in any business, people ask, "Why do companies spend, and how much money do they spend in research?"

Research is creating value for sustainable mobility going for organizations into the future. Yes, this is a strategy direction.

PI is passionate about R&D, and now not only passionate, PI is now a performing company for R&D in the areas of which also feeds. This expense is going up.

Yes, it creates EBITDA margin constraints in the operating day-to-day, but in the long term, it is sustainable and is a growth accretive approach by investing in R&D to create scale and impact at a larger level. That's the way we are seeing.

Yes, that's the investments, and I think we remain at that level of a certain percentage, at 3% to 4% investments of our revenues into research.

Sir, secondly, on the biological business, last year we had EBITDA loss of 120 crores in the global biological business. Can we share these numbers on a quarterly basis and how is this business shaping up?

Because till the annual report is out, we don't get any color on how this business is going about, and suddenly we see a 120 crores EBITDA loss in that business where you have never highlighted that these are the kind of investments we have made in that business.

Yes, because these are different phases and different developments. We will try and figure that out and put that across to you.

Yes, these are investments, as I don't know whether you were up in the earlier question which came from the earlier participant, where we expressed that these are investments for development to scale up revenue and establish credibility of the product, because product innovation is one, product development is the other, then is the revenue. These are the development, which is also treated a part of taking the product to the market or selling the technology to the consumer by demonstrating the performance of the product, right?

Sir, lastly, then how should we look at the peak sales of these products? Can you give some guidance on that, like the nematicide that we are launching?

What kind of peak sales do we expect from these products over the next 3 to 5 years? In

the demonstration trials to estimate, and I think when you take any technology, you look at the performance, I think where I would like to highlight, which I did in my speech, our technology outcome performance of the product is extremely successful. Now we are looking to see how it works in the field, which we are getting positive trajectory, and space and the satisfaction of that, we'll be soon coming out to look at what is the potential we can look.

Clearly, you would appreciate with our capability and understanding, we would not be chasing something which is not less than three digits in millions of dollars, and that's really what we are chasing when we look at innovation.

Thank you, sir. Thank you.

Thanks for the opportunity. My question is on biologicals.

We have these product registrations in Brazil and US now, Tillecur/Saneman, and it's a very exciting nematicide product in biologicals. Very clearly, the advantage, as you have mentioned in the presentation, is because of the foliar application versus root application of the competition, which clearly gives us a right to win is how I think.

If you could give us the market size of this product across various markets like Brazil, India, USA, that would be very helpful in assessing as how big this product could be. I remember in the Q4 call, it was said that Brazil market from biologicals point of view will grow by 300%.

What was our size there, and with India and US launch happening this year, what kind of growth can we expect in the biologicals? That's my first question.

I have more, if you could answer this.

Sure. No, absolutely.

First piece is I think let's understand the overall biological business, right? Globally, biological business is something around $10 billion, growing in a double digit.

This is the only segment if you look at in the crop input market which has been growing. Now our nematicide product, biological nematicide, which is very unique and which we said is the only product in the industry which has foliar application, can also be applied with seed, it can be applied in the soil, with the seed, foliar application, it has all the flexibility for the farmers.

This product is registered in Brazil, Mexico, and US. US is basically just getting launched.

In Brazil, if you look at it, of the total market, roughly around $750 million is the nematicide market. That's the market we are participating right now.

Farmers, basically who plant roughly around 5 million hectare of the crop, they tested this product last season. Farmers will start planting in roughly around a month's time in Brazil.

We have very positive feedback. In Mexico, we are primarily focusing on the fruit and vegetable market, which is a very high-value market.

Then US, as we have launched, we are looking at both the field crops like corn, soybean, as well as the fruit and vegetable market. These are three, and then we are bringing it to other market as well.

The other fact maybe I just want to share is nematicide or nematode management is a relatively newer concept. Nematodes are present everywhere, but farmers don't realize it, and we see a significant opportunity even in India and other markets as well in the future business.

Only one line of caution that I would put, please appreciate that whether usage is there when we do it for foliar application, we're also trying to send a new concept to the farmer of changing his habit.

Yeah.

Which is better for him, but as you would appreciate, any habit change, any concept change, takes some time and investments to deliver that value.

Is it a fair understanding that this particular product, because of the foliar application, need not be used at the time of planting the crop, but can be used later when the nematode issues appear? Is that a fair understanding?

Because the competitive products actually require you to use right at the time the crop is planted. A

competitive product are typically used either in the soil or at the seed treatment. This product can be used as a seed treatment, in furrow, which we call it in furrow, as well as foliar.

See, just think of it this way: there are farmers who may have missed the first application, they could not do it, these farmers have the ability to catch up again basically in the foliar, which you don't have with chemicals. Another piece, think of the permanent crops, typically the fruit crops which are there, or long duration crops like sugarcane, cotton.

In these crops, normally when you do the early application with seed or soil, it doesn't take you all the way through. Here farmer has an option to come back again and apply, right?

It's the flexibility as well which this product is offering, which is very unique effectively. No one has in the industry this kind of product.

Thanks for that, sir. My next question is on Pyoxaniliprole, and I think this was asked by an earlier participant as well.

Now we don't want to compare this with CTPR, which is another diamide, but what I wanted to understand is if you can give us some kind of efficacy data. There are two things which matter most.

One is efficacy against various pests/crops, and then the days between repeat application. Because what we have seen is that the most commonly used diamide, which is CTPR today, the efficacy has just gone down significantly, and farmers are kind of using it after every week.

If you could give us anything around that, because the data is totally absent for us to judge it in terms of what kind of molecule it is.

I think once in the launch, you will get a better sense of the product, and that's typically when a product goes to the market to get a better sense of that. Clearly, we have got the product.

It has a better efficacy. Again, I want to highlight this.

Doesn't mean every diamide will be replaced by this product, and this product will replace every diamide. Every product has its own opportunity.

Whether it's in crops, and sometimes in crops, there are multiple applications which are done on a similar chemistry. One of the key areas, it has better efficacy than some of the competing products.

Doesn't mean that those products will still not have a place, and our approach to sustainable agriculture is to reduce this efficacy and to improve efficiency is by staying and educating the farmer in the same segment by using different products, hence enhancing resistance management. In a nutshell, we see bio-efficacy in certain I would not say CTPR is the only benchmark.

It includes the efficacy CTPR has its own space, this product will have its own space, the other products have its own space, is how we take the products from the efficacy in the segment of the pest. It reacts good, the value proposition to the farmer, and a sustainable approach, and in different crops, different diamides work differently.

As you would know, since you are well aware, certain diamides don't work in certain crops, and certain diamides work very well in certain crops. That's also the other differentiator.

Yeah.

Last question is on electronics and performance chemicals, just this last question. I actually been tracking our company for quite some time.

I remember that in 2011 was when we first started our electronic chemical journey, and it's exactly 5 years before that we said that we have commercialized something in electronic chemicals. Over the period of last 5 years, we have said multiple times that multiple molecules have been commercialized.

What exactly do you mean when you say commercialized? Because we haven't seen anything significant or substantial come out of that bucket.

That's the fact, the electronic chemicals is not substantial. It takes a longer gestation, yes, but we had entered that space.

Your understanding, it is too nascent. At that time, it was not a big thrust, the whole trajectory that industry is changing now, okay, but let me be clear.

We have put a commercial plant which has got into operations, and commercial supplies in that area have started with the new technology.

Oh, that's great to hear. Commercial supplies would mean significant in terms of revenue is what I would assume for certain molecules.

These are things, be honest to you, because you see a learning a billion-dollar play, but significant from our perspective to have entered that space. In the meantime, to ensure the requirements to meet the next generation of technologies, we are in the process, as I've said earlier, investing in a very high-tech manufacturing asset to support the business development, to look at a differentiated approach, because the whole sector is far more dynamic than any other sectors, and the evolution, the requirement, the technology and products is constantly changing.

That's how we try to address, rather than go on the lower end of the value chain in a commoditized approach. That's the game that we're playing there, as the PI formula in other businesses.

Great, sir. Thank you, and all the best.

just a couple of follow-ups. First, on the Brazil nematicide market, you said $750 million is the market size.

Given our product is performing at par, what kind of market share can we aim for in Brazil?

Development and what I can say, want to keep up with smart competitive intelligence, double-digit market share is not a challenge for that product, and that's where I would park that answer. You can do your own anticipation on that basis.

How long would it take, the double-digit market share?

Industry I show, it takes 5 to 10 years to develop a product, but we are trying to accelerate it with our technology. The market will also grow, I believe.

As Jagresh mentioned earlier, the potential is there.

Got it. Second, I believe we have registered for a product called dichloromezotiaz for diamondback moth.

When can we launch this product, and will we also do CSM2 for this innovator, which has generally been our model? Can this be as big as our current large molecule?

Because diamondback moth, I believe, is one of the worst things to affecting the farmers.

We are getting into that product. It's a new-generation product.

That's why a part of the launch that you mentioned, the 3 to 4 products, that's the product which is on the launch this coming seasons.

What could be the revenue potential of this product, sir?

It's first commercial launch, but I think, again, for the Indian context, I do believe it'll be a three-digit product in times to come. It takes 5, 7 years in that segment to build a product, as you would appreciate.

Got it. This last question.

We've signed up as an exclusive partner for integrated drug discovery with a biotech. Can you talk more about this?

What will be the services we'll be providing, and can we sign such deals with more other biotechs as well?

Yes, we are. That's one of the key other offerings through the value chain to CRDMO.

It's about IDD, integrated drug discovery programs, which is supporting through our chemistry process capabilities, biological evaluation capabilities. We have right now been able to lock in with one partner.

We're working with more other partners, and that builds a knowledge capability, which tomorrow translates into the product capability and which leads from a CRO to CRDMO play. That's really the capability that we put at the front end, which ensure the pipe of attracting the customer towards the manufacturing, which is the revenue driver.

We believe we are very happy with what we've been able to build and show and demonstrate, creating attraction, and we are right now having a two to three different opportunities which we're evaluating. Over time, we should be able to lock this in, which gives us confidence for the longer term.

Thank you very much for joining the call today, and I'm happy to say that PI is in its stage moving to the next dimension of next orbit with sustainable solutions, biological at the top of the agenda, initial shoots being shown in the domestic market, the global market showing positive trajectory, and the chemical industry expansions that we grow to the dynamics of the agrochemical industry. Look forward to your support, and all the very best.

Thank you.