Thank you. Good morning, everyone, for joining us today for Rallis India Limited Q2 and H1 fiscal year '27 earnings call.

As mentioned, I have alongside with me our CFO, Mr. Bhaskar Swaminathan.

Good morning.

Let me begin the discussion by pitching into the industry landscape initially, post which I'll discuss Rallis-specific developments. Domestic market, India's agri-input sector faced significant headwind during the '26—I mean, this ongoing kharif season is just getting concluded amid deficient and erratic rainfall, a lot of crop mix changes, subdued farm economics, and heightened competitive intensity.

Moisture stress across key agricultural states like Maharashtra, Andhra, Karnataka, Telangana, parts of Punjab and Haryana, affected crop prospects for paddy, soybean, maize, cotton, and pulses, weighing on demands for herbicide, fungicide, and insecticides, and seed treatment products. Softer product prices, higher trade discounts, and channel inventory pressure further constrained fresh purchases.

Consequently, domestic demand recovery is likely to remain uneven, contingent on the crop condition, irrigation availability, and revival of farmer profitability. On global markets, commodity prices and industry margin, since April 2026, global agriculture market have experienced firmer commodity prices amid weather-related supply risk and geopolitical disruptions.

In September, the FAO Food Price Index rose 1.5% month-on-month, while its Cereal Price Index has increased by 5.1%, driven by higher wheat and maize prices amid Black Sea logistical disruptions and adverse weather conditions. Vegetable oil and sugar prices also strengthened on the back of import demand, weather concerns, and production uncertainties across key producing regions.

Although global cereal production is forecasted to decline in 2026, the projected harvest remains the second largest on record, indicating tighter supply condition rather than a widespread shortage. The Middle East crisis has heightened energy and freight costs, increasing pressure on agrochemical manufacturers' input costs and margins.

The firmer crop prices could support farm economics and agrochemical demand. The benefits may be offset by affordability constraints, competitive pricing, and cautious channel replenishment, keeping the sector's recovery uneven.

The global agriculture sector is expected to expand over the medium term, supported by rising food demand, productivity improvements, and agriculture intensification. OECD-FAO projects global agriculture production value to increase by 13% by 2035, with Asia, sub-Saharan Africa, and Latin America emerging as key growth regions.

Latin America remains strategically important given its substantial soybean, maize, and cotton acres. While North America and Europe are mature input-intensive markets, the global crop protection market is estimated at US$70 billion in 2026, although growth will remain sensitive to farm economics, weather, regulation, and product affordability.

For Indian exporters, favorable currency movements may support rupee realizations, but sustained volume recovery remains critical. International sales may also face pressure from subdued channel demand, distributor resistance, weather-related disruptions, and heatwaves in Europe, which have affected crop conditions and input application patterns.

For Indian companies, the key indicator to monitor are active ingredients and intermediate prices, freight rate, rupee movements, export order volumes, channel inventories, and farmer affordability. Recent UN and international agency assessment also warned that prolonged shipping disruptions could affect crop yield and food prices into 2027.

For the agrochemical industry, broader, firmer crop prices can improve farm economics and support demand for herbicide, insecticide, and fungicide, particularly in export-oriented agricultural regions. However, higher crude oil, energy, and freight, and input costs may put pressure on manufacturers' margin, while elevated fertilizer costs could constrain farmers' overall input spending.

The outlook is therefore cautiously constructive. Companies with strong distribution network, differentiated products, efficient manufacturing, and disciplined cost management are in better position to benefit.

A sustained recovery in agrochemical demand will ultimately depend on the persistence of higher crop prices, improved farm economics, and recovery in channel inventory and purchasing activity. As far as rabi outlook is concerned, the outlook remains sensitive to winter rainfall, soil moisture, and irrigation availability.

IMD's northeast monsoon forecast of 88% to 112% of the long-term period average is relevant to southern peninsular India, but does not guarantee adequate rainfall across the country. Major reservoirs held approximately 70% of the capacity, below 10-year average of 76%, with the southern region facing relatively greater irrigation concerns.

These conditions could influence rabi acreage, crop yield, and farmer spending, particularly in water-stressed areas. The government's rabi MSP increases for 2027-2028 range from 0.97% for wheat to 10.3% for safflower, with mustard rising 6.6% and lentil 5.5%.

While higher MSPs provide a measure of price support, actual farm return will depend on yield, market prices, and procurement. Moving to Rallis-specific developments, we had a muted Q2 performance on the back of insufficient rainfall in the key agrochemical-consuming states like Punjab, Haryana, Maharashtra, Andhra, Karnataka, Telangana, etc.

Our quarterly revenue stood at ₹858 crore versus ₹861 crore of Q2 of previous year. Overall EBITDA for Q2 fiscal year '27 stood at ₹126 crore, lower by 18% compared to Q2 of the previous year.

Profit after tax at ₹85 crore versus ₹102 crore of quarter two of fiscal year '26, which is 17% lower. Approximately 43% of India received 19% deficient rain in comparison to the long period average this monsoon season, which delayed the kharif sowing.

It resulted in slower liquidation and high carry-forward inventory. Due to prolonged geopolitical situation, channel farmers prioritized stocking for fertilizer rather than agrochemical.

Fertilizer's availability had been a concern due to logistical challenge. I will talk about new initiatives and launches.

During the quarter, we launched four new crop care products, namely Cilentran, which is an insecticide; Marcelus, a fungicide; Blitox Super, a fungicide; Trinej, a herbicide. We have all together launched nine new products during fiscal year '27 across categories.

In seed business, we have launched six new products across vegetable, cotton, maize in the quarter two of fiscal year '27, which takes the overall tally to 15 new products in fiscal year '27, which includes cotton hybrids for North India, herbicide-tolerant seed rice introduced under Dhanya brand. Digital marketing interventions continue to promote products through Anubandh, Edge scheme, farmer QR code reward schemes, enhancement in Sampark Plus and SeedSure application.

Anubandh initiative is a retailer-level digital platform to support retailer engagement and benefit schemes and enabling tighter integration between dealer and retailers. Retailer registration as of September '26 ended has crossed 60,000, including seed and common retailers.

Farmer QR codes project helps in better product knowledge sharing with farmers. This helps in strengthening retail farmer loyalty program, sale traceability, and return tracking.

On our initiative, Sampark Plus continues to capture farmer-level demand signal to generate actionable insight and improve sales conversion. We have reached 4.23 lakh farmers in Sampark Plus through regular engagement and social media post.

We had launched Idea to Impact innovation platform in Q4 of fiscal year '26 to establish an open innovation ecosystem to secure, validate, and commercialize agri-innovations. Till now, we have received encouraging participation of 42 applications, out of which two are in pilot stage and 28 are under review.

SeedSure application enhances visibility and traceability of farm-level operations and improves data availability for decision-making. We are developing SeedSure 2 version, which will be high-performing, future-ready, and more cost-effective.

We are also coming with new R&D center in Navi Mumbai, for which onboarding of various consultants on project, as well as government liaisoning has been completed. The project is running as per the plan and likely to be commissioned by April 2027.

We are accelerating the launch pipeline for proprietary research-led varieties and high-yield potential. Our long-term priorities include strengthening customer centricity, sharpening portfolio choices, accelerating new product launches, expanding strategic alliances and farmer reach, and leveraging digitalization to enhance operational efficiency and drive sustainable growth.

That includes my opening remark. I will now hand over to Mr.

Bhaskar, our CFO, for a detailed analysis of financial situation. Over to you, Bhaskar.

Thank you, Dr. Gyanendra.

Good morning, everyone, and thank you for joining us today for our Q2 and H1 FY '27 earnings call. I'll walk you through financial performance for the quarter and half year, post which we shall commence the Q&A session.

Starting with the top line for the quarter, our Q2 FY '27 revenue stood at ₹858 crore as against ₹861 crore for the same period last year, resulting in an overall flat growth kind of. Pricing growth of 5% was offset by similar volume degrowth.

Overall EBITDA for Q2 FY '27 stood at ₹126 crore, lower by 18% compared to ₹154 crore in Q2 of the previous year. Profit after tax stood at ₹85 crore versus ₹102 crore of Q2 FY '26, which is 17% lower than the same quarter of previous year.

Crop care revenue grew by 4% to ₹788 crore in Q2 FY '27 from ₹760 crore in Q2 FY '26 due to 6% price growth. EBITDA decreased by 2% to ₹126 crore in Q2 FY '27 from ₹129 crore in Q2 FY '26.

PAT increased by 1% to ₹88 crore. Crop protection degrew by 3% and registered Q2 FY '27 revenue of ₹457 crore vis-à-vis ₹474 crore in Q2 FY '26, which was dragged by volume degrowth of 7%.

Soil, plant, and health grew by 22% to ₹72 crore in Q2 FY '27 from ₹61 crore in Q2 FY '26, driven by price growth of 15% and volume growth of 7%. Demand for inorganic manure increased due to short availability of traditional fertilizers and import-dependent raw materials.

Going to institutional category, total B2B revenue stood at ₹232 crore vis-à-vis ₹198 crore in Q2 FY '26, a growth of 17%, primarily due to 8% volume growth and 9% price growth. Exports grew by 2.5% to ₹165 crore.

There was lower demand for pendimethalin AI in Europe, coupled with pricing challenges from China market. We also witnessed constrained availability of raw materials, partly due to supply chain disruption and prioritized allocation to India B2C crop protection business, which impacted volumes of select products, example acephate, hexaconazole.

There are also delays and uncertainty in shipping timelines due to port congestion and logistical challenges. CSM Q2 revenue displayed promising growth by lodging 12 times growth compared to the last year, clocking revenue of ₹27 crore this time, driven by rebound in PEKK sales volumes.

Domestic B2B grew by 11% to ₹39 crore in Q2 FY '27 on a base of ₹35 crore of Q2 of previous year. Moving to seeds, seeds revenue degrew by 31% to ₹70 crore in Q2 compared to ₹101 crore of last year, Q2 FY '26.

This was mainly due to 26% volume decline. EBITDA decreased almost to zero in Q2 '27 from ₹25 crore of last year.

PAT decreased to negative ₹4 crore from ₹16 crore of last year in the same quarter. Placement of millet, mustard, maize, and vegetable seeds were as per plan, but the acreages of paddy and cotton declined due to lack of water, leading to lower placement.

On a positive note, North cotton farmers reported higher productivity, coupled with healthy prices, strengthening confidence for future seed adoption and cotton cultivation. For the rabi seed production cycle, active planning and organizer engagements are underway for pearl millet, paddy, maize, and sunflower.

Coming to H1 performance, total H1 FY '27 revenue stood at ₹1,880 crore versus ₹1,818 crore of H1 FY '26 last year, resulting in growth of 3%. Crop care H1 '27 revenue clocked ₹1,485 crore versus ₹1,412 crore of H1 last year, resulting in growth of 5%, primarily led by price growth.

Seed H1 revenue stood at ₹395 crore versus ₹406 crore of last year, resulting in a degrowth of 3%, occurring due to volume decline of 6%. H1 '27 EBITDA stood at ₹311 crore versus ₹304 crore of H1 last year, resulting in growth of 2%, and H1 PAT of FY '27 stood at ₹210 crore versus ₹197 crore of H1 of last year, resulting in growth of 6%.

We are focused on accelerating priority brand growth through sharper market execution, targeted product promotion, and enhanced phygital, physical and digital engagement with farmers and channel partners. In crop care, key priorities include strengthening the go-to-market strategy, expanding customer reach, optimizing the product portfolio, and improving sales productivity through territory rationalization and cost efficiency.

Digital engagement, customer feedback, and data-led market development will further strengthen channel effectiveness, deepen market penetration, and drive sustainable revenue growth and profitability. In seeds, our primary focus will be on five strategic crops, as mentioned earlier: cotton, maize, millet, mustard, and rice.

A selective and concentrated approach in these crops is expected to drive operational scale and efficiency. Overall, we remain disciplined in improving capital efficiency across both fixed capital and working capital.

At quarter end, our inventory level will remain elevated in comparison to the same quarter of last year. We expect capacity utilization to remain broadly stable, with growth driven by improved product mix, operational efficiencies, and higher-value product offerings.

We have cash liquid balance of about ₹211 crore as of 30th September '26. That concludes our opening remarks.

We can now commence Q&A session. Thank you.

Good morning and thanks for the opportunity. First question is in terms of the sales returns.

Have we accounted for the entire sales returns during the quarter or will there be some sales returns will be coming in Q3? An allied question in terms of your perspective on how the channel inventories are currently, and will that have any repercussions on the rabi as well?

Thank you.

As far as sales return are concerned, all the kharif-related sales return for majority of the market are completed. There might be instances in certain crops where kharif crop does not terminate by September based on the numbers we follow.

For example, crops like cotton or in South where rice planting was delayed even to August. Barring those areas, wherever kharif season is over, it is over for us, and we have accounted for the returns, and we have taken provisions for remainder of the market as well.

Right, and any thoughts on channel inventory, sir?

We're not flooding the channel. We have taken a very conscious effort this year because this year, given there was a highly uneven rainfall distribution, we have gone with the more market-based approach, only place the product in the markets where there's a demand, water situation is certain.

It's not a uniform placement everywhere. I think channel inventory is only there to the extent it is needed to either conclude kharif season or beginning of the rabi season.

There's no extra channel inventory.

Perfect. Second question is on the seeds part.

Given that monsoon has been lower, how are we placed for seeds availability for the 2027 kharif season, and will there be any possibility of pricing improvement for next year on the seeds part? Thank you.

Seed, I think, last year, if some of you remember, last year, there was a very good production of the seed because rains had terminated on time, and seed production season starts from October all the way to March. Because this year seed season has been soft, I think we have decent amount of inventory to carry forward and cater to the oncoming season.

Now, ability to increase prices will depend on how the monsoon forecast and sentiments build up for the next year. I think based on what I see today, India has never seen two consecutive monsoon failure, I wish and I hope that monsoon will be returning to the normal.

Of course, there's a subdued, what do you call, rainfall forecast for January, February month, which means in the areas where water scarcity is there and rainfall was expected, that area will continue to suffer. Wherever there's an opportunity and commodity prices are high and product competitiveness there from our side, we'll certainly try to see price increases can happen.

The only crop price increases are not possible is cotton because it is capped by the government.

Right. Thanks and all the best, sir.

Thank you.

Thank you.

Thank you for the opportunity. Sir, what explains the inflated inventory this time versus at the end of H1 last year?

If you can explain that. Is it more relating to raw material or finished products?

It is a combination of things. I think one thing is that when war begin, everybody was trying to get the inventory so that if season turns out to be normal, we're in the position to supply.

It need not necessarily be volume. It could be the higher price at which we would have procured the inventory.

It is a combination of an inventory of seed as well as crop protection. I think seed inventory this year is more elevated compared to crop protection.

I think all the seed which we have in our inventory is fresh seed, which was harvested in the March, April of 2026, is all good inventory. Yes, because season did not turn out the way, for example, cotton.

Cotton North India did not get planted. Other thing happened is that cotton areas shrank.

On the top of that, there's a lot of illegal seed which proliferated. Other crop, I think inventory is normal.

Sir, a portion of higher inventory would also be leading to higher price of raw material. Is that so?

On chemical side, yes, some of the inventory we are procuring comes at a higher price. Now, this year in the beginning of the season, we did try to pass on some of the cost increases to the customer, but season did not take off as expected.

In fact, demand went down. As a result, it became unrealistic to hold on to the cost increase which we were trying to pass on.

Sir, how is your initial estimate of demand patterns for Q3?

Q3, I think if you say North and East, if you go Indo-Gangetic belt all the way to the East, potato, there's a challenge right now because, see, earlier we were able to export a lot of potatoes and all to Bangladesh. That has stopped.

Mm. As a result, potato prices are low.

Wheat is going to be normal given that commodity prices are high. Rice, I think certain areas in South, probably in Telangana and all, where water is not available, rice may go down.

Maize area is expected to be normal. There's a lot of maize area in the central part of India where it used to be dependent on water storage.

I think that is going to be challenging. I think the silver line I would say is that while area will remain challenging, but because commodity prices are higher, wherever crop is there, farmers will try to use input to protect and maximize their income and return.

What has not turned out well this year is chili crop, because chili prices are very high, but unfortunately in the chili growing areas, water situation, particularly in Andhra, is not that good.

Sir, for North in particular, how is the herbicide demand pre-emergent, and how do you anticipate fungicide demand to be?

Fungicide, we will come to know later. Maybe it's a story for December, January, February, quarter four.

At this point of time, herbicide demand is strong, but there is a pressure on prices.

Okay. Sir, just lastly, what kind of liquidation growth or decline would you say you saw for your portfolio in kharif, and how much would be the same for the industry?

Difficult to say as a unit for the industry, but all I can tell you, we had a very strong growth in insecticide. We also had a good growth in herbicide.

Fungicide segment, which suffered because when there's low moisture, fungal diseases are low. We had a good margin uptake in soil and plant health business.

We have been able to improve our margin on the seed business while volumes are lower. Overall, I think it depends on the company and portfolio.

The products we launched as new product this year, they have contributed well. New product launches have gone quite well, both particularly on insecticide, fungicide, and herbicides.

Okay.

From a strategy perspective, what we are saying, our strategy seems to be working and on track. Obviously, we are in agriculture, and when this war and it's kind of double event happening in a very short period.

The war is started, and within three months, we had a bad news on the rain, and that turned out to be actually worse than what people expected.

Right. Sir.

Thank you so much.

Hi, sir. Sir, first just on the cotton market, can you give a sense of what is the kind of illegal seeds that have come into the market this year, and how much was the overall market size for this year?

We do a very simple math. I think cotton, at a peak, had reached to almost 13 million hectare, 12.8.

It has come down to about 10, 10 and a half million hectare. In progressively, cotton area has come down by 20%, 25%.

On the top of that, on the area which is getting planted and industry estimate is that roughly 25% to 30% of the seed. If you say 10 million hectare is where seed gets planted, and on an average, farmers were using two packets equivalent, that amounts roughly 5 crore packets.

Out of 5 crore, if you take 25% to 30% out as a illegal, then you are left with roughly 3 and a half crore packets. That's a big shrinkage where legal packages used to be sold on 5.25 crore packets is down to 3.5.

Now, two things will happen. I think what we have to see how illegal will perform and whether that area will continue to grow this year or it will shrink, and then again will be recovery of the legal product, and the cotton acreages.

I think cotton acreages in my view will rebound because cotton prices are very attractive. Again, at the time of planting, farmer makes decision based on the relative pricing of soybean, cotton, and maize.

That is very too early to forecast. Yes, cotton has been one of the most challenging crop from a seed perspective.

First challenge came from North. North India planting had actually significantly reduced, and it was very very difficult to say why it happened, but later on it turned out that it was because farmers were not able to get good harvest because of pink bollworm control, and on the top of that, government was not able to release water on time for the cotton planting, because all the North Indian cotton is dependent on release of canal water by the government.

Cotton, I think if you say from a peak illegal packets, it is down to almost 30%,

35%. What would be our market share in cotton currently versus maybe last two, three years?

Have we lost any market share because of illegal seeds?

I would say we have actually held on because our volumes are marginally down compared to last year, and market has shrunk so much. Even in North India, while our number of packets sold would have got reduced, but we have gained market share in North particularly.

Okay.

Got it. Sir, secondly, in terms of the seed sowing, this year we would be going for a crop holiday given that we have inventory or we will build up some more further inventory?

Some production will need to take place because, if you see last two, three years, I was saying I didn't have enough seed, because when planting happens, by the time harvest happens, planting demand already starts in the planting area, we were not able to supply. This year last year when we went for production, we had deliberately planned for some surplus inventory to bring it to a level where at least when you start the season, you're not waiting for the fresh crop harvest.

You you are producing about 30% to 50% of inventory of the following year in advance,

right? We are

we are back to normal inventory cycle, I think, while it looks elevated, but it it's not an it's not the right comparison because last two years we had a bad inventory situation, right? We would be I think going forward, our aim would be to carry forward, particularly in crops like maize, rice, bajra, and all, 150% of the requirement, because then you when you start the following season, you you have a opening inventory.

Now I think in some crops, we might have more than 150% because production also was very high. As a result, we will slow down.

Doesn't mean—but new launches, for example, you'd have to produce. Some of the new product launches we made last year where we did not produce a lot of inventory because you want to see the initial farmer response.

At a gross level, we will still produce something, but it may not be same product, but it will not be same as previous years.

Got it. Thank you so much.

Significantly reduced area.

Yeah.

Hi, sir. Thanks for the opportunity, sir.

Just wanted to get a sense that how much of our revenue is coming from the southern states like Maharashtra, Karnataka, and Telangana?

I will not be able to give you a state-by breakup right away, but we will get back to you. I think we have divided the country into something called India 1 and India 2.

We will get back to you with a detailed breakup.

Sir. No problem.

In terms of the exports revenue, if we exclude the CSM segment and if you look at our export business purely in the B2B segment of the CP, in the H1 number versus the last one H last year H1, the growth has been in the negative side. What explained that apart from the issues that are facing in the Europe market and the Latin market, if you could explain that?

Two things happen and it's very very complicated because when you're running the business, you're always trying to see what is right for the company and for the customer. When war is started, nobody was sure of whether any company will be able to provide enough product to domestic market, because by then, this El Niño situation was not clear that how bad or good it did to be.

When it came to making a decision export versus domestic, I think we were trying to balance between making sure enough product is available of domestic market, at the same time optimizing margins and keeping customers outside also very happy. Part of the degrowth in the export market was deliberate, and we use that as an opportunity to improve the margin.

As a result, our margins have not shrunk as much in export market as much as volume. It was more trying to manage the situation then.

I don't think we have lost significant customers. In fact, we have added customers and we have added new products also in the export market.

Understood, sir. Sir, my follow-up question related to this exports only.

How do you see the H2 is spanning given the higher freight cost and the challenging environment in the Europe specifically? How do you see the growth there in the export market?

I think a lot will depend on how this war plays out, because I can tell you, all of us compete with China, and China supply chain to America is much closer and much more straightforward than us supplying from India, because our products cannot now pass through Red Sea and all, they have to go around. As a result, our cost of freight, cost of insurance, time taken, availability of container, everything is a challenge.

I think to your question, how do we see going forward, I think the dedicated customers, we will continue to serve them. We're also trying to follow up with them more aggressively to get orders early so that we can bridge some of the extra lead time we need.

Having said that, it's a very dynamic environment, not only for export, even importing raw material, container availability, delayed shipment. A lot of things are linked.

For some certain export product, I also need a critical raw material which might be coming from import. I think overall, I would say there's a two to three weeks, sometimes four weeks cumulative delay in the supply chain.

Understood, sir. One last thing I think in the Q4 and yeah, Q4 concall you had mentioned that we had deliberately procured some of the RM at the lower cost in the month of Feb and March.

If we look at in terms of H1 number, the numbers is not reflecting the low-cost inventory benefits. If you could explain that, and along with that, I can understand that there was a issue in terms of the domestic demand, which impacted the pricing of the domestic CP business.

If you could explain these things, and if we didn't have the low-cost inventory benefit, and in that case, how our margin would have been impacted?

Yeah. If I may just take this question, see, the low-cost inventory benefit was already taken in Q1, because that's where the mix of inventory of last year versus this year was big.

As we proceed to Q2, then that weighted average benefit is already lost.

Okay.

This is the period when the Q2 was much more challenging than Q1, because market had already realized by that time that rain is going to come late, and it was a reality by that time. That's where you have to compete with everyone in terms of price.

Everyone was No,

understood. If I can look at your Q1 gross margin, the margins were roughly at around 30 38%, while the last year Q1 margins, that were roughly around 36%.

This year, we had a higher growth in terms of the PEKK in terms of CSM business and the seeds business. I'm not being able to understand this equation, if you could explain.

See, when you see margin at a total level, the mix of products also make a lot of difference actually, and each of them have a different margin profile. Depending on which of this material has gone in excess, that's how it's going to decide.

It applies for

both export

as well as domestic, both the cases. The mix of product is always different.

In our case, if you see, fungicides is supposed to be the best of products for us, and that's taken a beating.

Understood. Sir, if you could break down your seeds revenue by the key crops, that will be very much helpful.

What breakup you want?

Seeds revenue by the key crops.

Seed, I think now, I would say corn is as big as cotton. Cotton is still the largest, but corn is pretty close to that, followed by, obviously, rice and millet.

Okay. Thank you, sir.

Thanks for clarifying all the questions.

Thank you for the opportunity, sir. Sir, my question was regarding the in your earlier comments in the starting comments, you told that the exports have increased.

Can you give the volume break-up? Which countries have we increased our exports?

Despite [unclear], how is the demand in the export market?

Your line wasn't very clear. Bhaskar, did you follow?

Yeah. I follow.

See,

if you are specifically asking about Q2, we have done well on the CSM side of it, that's an export actually. The PEKK is an export item.

Yeah.

On export, CSM has done well, and that also helped us protect our margins.

No, sir, basically which continents we have done? Okay.

Majority of our exports are basically to Americas, and now we are trying to, in fact, we have added resources in ASEAN as well as Africa, and we have started signing new contracts. We expect, besides Americas also some volume and revenue to start coming from other world areas.

Right now, I would say it is bulk of it is to US, Brazil, and those countries.

Sir, despite El Niño, have the acreages gone up?

In India? No, they have significantly reduced, now.

No, in the exports market.

In exports market, yes, many countries have suffered. US probably had one of the driest planting season this year.

Now Latin America season is just beginning. They're in South.

There have been challenges many markets, and that's why commodity prices are trending up.

The acreages have gone up, sir?

Nowhere in the world I have seen acreages going up. Acreages have generally reduced, and crop have suffered from moisture stress in many part of the world, including Europe had one of the hottest summer.

Compared to the quarter one, quarter two is better or worst?

In India or globally?

Globally, sir.

Globally, if you say in Northern Hemisphere, quarter two is the time when crop is standing in the field. Quarter one is the time when it gets planted.

India planting starts towards end of quarter one, middle of quarter one, and then goes up to quarter two. Globally, I'm saying you look at from a season perspective, don't see from a quarter perspective.

Northern Hemisphere season from a planting perspective as well as crop growing condition has been very challenging, and that has led to overall reduction in use of inputs, including fertilizers. In fact, fertilizers have been worse sufferer relative to other categories.

Sir, we don't have any export in the seeds, right?

We don't have any export in the seed. Seed is all domestic.

Sir. Best of luck, sir.

Thank you.

Hi. Thanks for the opportunity.

Sir, you mentioned, I think perhaps in fungicides, you are seeing good demand, but there is price pressure. Pressure on pricing.

Wondering even in a inflationary raw material scenario and with good demand, why are we not able to pass on the prices?

Because of excessive supply. As I said, our insecticide business did well.

Herbicide did well. Fungicide, A, there was a low disease pressure.

When low disease pressure happens, demand goes down, and supply is excess in the market. As a result, it became very difficult.

Not only consumption reduced, and when consumption goes down, obviously it has a impact on the prices in the market.

This excess supply is just from domestic players or there is Chinese dumping as

well? If you see direct participation in India is only by Indian players.

Many of them they import from China, and China continues to remain very aggressive by being a very competitive supplier. Sometimes it is very puzzling.

Sometimes you think you cost of production doesn't seem to justify, and people sell at that price. Yes, China is a supplier, but they're not direct participation from brand in Indian market.

Got it. Sir, this El Niño's impact on the next upcoming crop season as well as the next full year, do you see that playing out on the next upcoming crop season as well,

or I would say this will impact rabi season, which gets concluded by February, early March. Then kharif season starts in the May.

At this point of time, there's no adverse weather forecast. I don't think global climatologists have the ability to forecast even that far.

Majority of the time, it's almost like tossing a coin. Even I can say weather is going to be good or bad, no?

It's like that. I think we would only know by March and April how the next season is likely to be there.

What I know historically, if you look at the data trend, there has not been two consecutive failures, right?

Got it. Also, the impact of El Niño in this season, could it be so worse that it ends up affecting next year despite next year being a good monsoon year?

Could that be a case as well?

I think it's a very interesting question you ask. Last year, same time when we were discussing the number, insecticide consumption has gone down, and we were saying because there was too much of rain, farmers could not get inside the field and spray the insecticide.

Now, this year we're talking differently. This year, in spite of dry weather, insecticide uses have gone up.

I think a lot of what happens during that period of active field operations also matters. To me, it's not the quantum of rain.

It is always the distribution of rain and timeliness matters more than actual quantum of rain. This year, quantum has been less, as well as distribution has been very erratic, right?

I would expect that normal season to return next year with the elevated commodity prices. I would expect next season to be significantly better than what we are just concluding.

Got it, sir. Thank you, sir.

Wish you all the best.

Thank you.

Hi. Good day, sir.

My first question was regarding the comment that you made that the next season is expected to be much better due to elevated prices. Usually, does that result in higher consumption of agrochemicals or does that result in a better consumption or a higher consumption of the specialty chemicals or specialty molecules?

How does that impact pan out, both in India as well as any comments on global countries, how would that pan out?

There's always what we call when we put the farmers hierarchy in our mind, we say there are always innovator farmers, and they're always a very small single-digit percentage where they want to try and experiment new things, which could be coming from innovators. The bulk of the farmers will be follower category, where they tend to follow what new farmers have done, and then there's a laggard.

I don't think there's a clear-cut to say if there's a good season, only innovators will sell. Farmers are very smart about their economics.

They still tend to use products which will work for their farm, and that's where opportunity lies for company like ours to keep educating them. It is what works is more important rather than what is most expensive and most new in the marketplace.

I don't think they follow economics. There are only 5% farmer, maybe slightly less than that.

They will try new product irrespective of even if they don't know what the benefit is going to be. Bulk of them will follow standard crop economics.

Got it. When we say that the next season will be better would largely be just because we're assuming normal rainfall and better farm economics?

Just the normalcy finally playing through after two years of downcycle? Having better food grain inflation doesn't necessarily mean into anything?

No, it does mean if there's enough moisture available, crop acreages go up, right? As a result, when overall crop acreages go up, overall consumption also grows.

It does mean something. As acreages shrink, it means something.

When acreages grow, that also means positive.

Got it. Secondly, given the current landscape of import being difficult, freight container costs being high, and overall demand being poor, maybe second year of agchem demand being poor, are you seeing any difference in the competition?

Has that come down? A lot of these smaller players that had come up, are they shutting down their shops?

Any change in the intensity whatsoever, competition intensity?

Haven't seen many people shutting their shop, but I have seen a lot of people facing stress on their working capital for sure.

What's your sense on it? Would that result in them having to

In a normal situation, that should help companies which are very well-capitalized. That would be a common thinking.

I have seen sometimes these people in smaller player in spite of working capital constraints, they are able to thrive. They somehow figure out.

Got it. Okay.

That's all from my side. Thank you.

I think what it does though, put pressure on them, their ability to grow, they probably contain their ambition because they have working capital constraint.

Correct. Okay.

Not a very major change in maybe competition coming down or consolidation happening of any

All I can tell you, and this is something I'm sure you would hear from the market, there are a lot of players who would like to get out of the business and maybe exit, but at this point of time, nobody is willing to relook at their valuations. I think it's a question of valuation.

If right valuations come between buyer and seller, I think consolidation can begin. That has not triggered yet, I think.

What would that trigger be, you think? Just better environment?

That is something I don't wish, right? I always wish farmers well.

I think farmers should continue to do well. I guess what has to be seen is that look, this industry has seen post-COVID, in between there was a good year, and constant challenges.

It's more structural now than season-driven. I think this is something for this industry to structurally change, obviously, companies have to do different things.

Well-capitalized companies will continue to thrive and gain market share, companies with new products and good R&D setup. For a smaller player, it's going to remain a challenging place.

Government can do a lot of things, which we keep talking to government about it.

Got it. Great.

Okay. Thank you, sir.

Good morning. Thanks for the opportunity.

Sir, my question is on the maize crop. Given that the government has banned sugar ethanol, just want to know what is the prospect for the maize, the grain for ethanol and also the crop prospects, because it's a multi-season crop,

right? I think maize to me the tailwind still exist because of the animal and poultry feed story continues.

Now, when government is saying don't divert sugar to ethanol, will it give a boost to maize? I think prices are very high.

I think they have caveated that with something, and they said, look, they're trying to cap the price of ethanol made through maize, so that on one side they're saying, I'm not telling maize farmer not to plant, but I'm going to tell oil marketing companies you cannot buy maize-based ethanol for more than that price. Is that a dampener?

I don't think it's a dampener, but it is not that suddenly all sugarcane-based ethanol capacity will shift to maize, because maize suddenly then will start competing with poultry feed and all. I think the way announcement has come, we have to see how it'll play out.

More important factor is the water or reservoir availability is low, the prospect for maize are only good in two areas: one is Bihar, where irrigation is there, and coastal Andhra, where it rains well. Other areas crop acres will remain challenging, availability will remain a constraint.

If prices shoot up too much, the current policy will restrict maize being diverted to ethanol. I think it'll be a normal season for maize.

Then there's a spring season that happens after harvest of potato. That's a later discussion.

I think the way things are so dynamic right now, for me to say something what will happen in February, March is also becoming very difficult.

Okay. The second question is on the sugar.

How much of contribution we get from sugar as a crop, and also what is your outlook?

Sugarcane, I think we are a decent player. We can actually have a separate discussion on which crops contribute to us mostly.

For us, rice, some plantation crops, some rabi season crop, all of them contribute. One of the thing we were expecting this year chili to play out well, but looks like chili prices are very high, but the area where chili gets planted, primarily in South, water situation is not that good.

If it rains couple of times in the areas, chili is planted, I think fortune might come back. At this point of time, I think water is the biggest worry for rabi.

Sir. Thank you so much.

Good afternoon. Thank you so much, sir, for taking my questions.

First one was just to clarify for myself. You mentioned early on that whatever sales returns had to be taken, as well as whatever rebating might have had to be done with the channel partners, that's already done in 1H, right?

For 2H, we don't really expect any lingering impact from the kharif season?

I think is different for different crop. Now, if you say rabi, rabi is primarily a wheat herbicide, a big crop, right?

Now, wheat crop, you can already see pressure on the prices of herbicides. Now, obviously, we're not a large player, it may not impact me as that's why I said.

In every season, every crop, it depends on what your portfolio is, but there's a significant pressure on the prices of herbicides in Northern India already when season has not even begun. Farmers are just about to start planting a wheat crop in Patiala region, and the prices have already started crashing.

Is it too much of trading going on? I don't know.

Looks like this industry continues to suffer from excess supply, right, of every key ingredient when it comes to the real market operations, particularly on key crops and key segments.

Having said that, as per our present view, whatever provisions have to be made for returns and rebate, they've already been made, and that's our hope that there won't be any lingering effect.

Okay. At least from your company's standpoint, you feel you're relatively safe heading into 2H?

I think we're that way we have been very disciplined, even on returns and all also, what we tell you what we have.

Got it. No, that's helpful, sir.

Then just a couple of data points I wanted to clarify. One is the capex amount for 1H seems really low again, not even ₹20 crore for the first half.

What should we work with for full year standpoint? Second thing is this networking capital, which has elongated in 1H.

Should we expect that we'll be able to collect all of this by the end of the year, we do generate cash as usual for the full year?

I think I don't see that as a challenge, because if you see say, for example, we have seed inventory, which we never used to have in last two, three years because of shortage of the seed. Now, this year we have a production, which is good news, because then I am able to supply on time in the next season.

From a business perspective, that's a good thing. On the top of that, now I'll be producing less in the coming season.

When you come to March, I would not be paying for the fresh inventory as much as we would have paid in the past. I think some of it will start normalizing as we move March, because kharif supplies will also start by then.

Now, receivables, I think at this point of time, we don't see any red flag. I think it's all under control.

All the networking capital is a combination of seed inventory, which we should have even build in the past, and combination of obviously delayed season also means delayed recovery from the market, and some of the elevated inventory of raw material of the crop protection. It's combination of that.

What happened is that we'll probably moderate purchase now, and as a result, I think end of the year, we would still continue to generate free cash flow.

Sorry.

Yeah. I think capex part, yes, we have been going a bit slow on capex, just being prudent, from the time we have all this bad news.

H1, we may have a little bit higher number than that to prioritize some of the growth initiatives as well as some of the important sustainability such as capex initiatives. I can say that broadly H2 will be more than H1 that way.

Okay. About say ₹50 crore more full year standpoint is fair?

A

little bit more than that you can say.

Got it. Just two last quick ones for me.

One is the other expenses are up about 12%, 13%, both for this quarter and from a 1H standpoint also. Is that primarily freight or is there something else over there?

The other one was just despite a very challenging 1H, we seem to have done fairly well by holding revenues and earnings as well from a full 1H perspective. Which seems to suggest we might have actually done a little bit better than the overall industry.

What would you attribute this to, especially on the B2C side of things? Is it more prudence or what are the key aspects that drive this?

Couple of things. I think we said, look, we want to complement our portfolio.

When we did analysis two years ago, we said, look, we don't participate in 50% of the market, right? Our participation in the segments we were absent, we have started significantly increasing by launching new products in those categories, right?

That is helping. For example, this year of the what do you call launches which I made in '27 in the kharif season, they have already significantly contributed to the extent of 67 60 about ₹100 crore.

The products which got launched this year, they have given us additional revenue of ₹100 crore. Now, this is happening in spite of the fact that we have also in a systematic manner in last three years taken out products which we used to sell three, four years ago.

They were contributing to the revenue, but they were not making much sense from a profit perspective. For example, if you say last four years, we have dropped roughly ₹100 crore of revenue of old product, that probably 28, 30 products.

Then we have added about ₹300 crore of revenue. So, ₹200 crore plus, if you take ₹100 out, incremental ₹200 crore has been added by adding some 58 products.

A lot of product churn is taking place. A lot of that is combination of being very focused in what we do in the marketplace and also launching new products.

Just the other expense question, if you could clarify.

Other expense, Bhaskar.

Okay. On the other expenses, of course, we can separately give you details, but one call-out which I can say is that we do keep looking at, right, M&A opportunities, there would be fees related to those, actually.

That also comes in.

Thank you so much. Thank you.

All the best.

Thank you.

Thank you very much. Thanks, everybody.

Thank you.