Thank you. Good afternoon, everyone.

I am pleased to host today's earning call of Dhanuka Agritech. We have the leadership team represented by Mr.

M. K.

Dhanuka, Chairman; Mr. Rahul Dhanuka, Managing Director; Mr.

Harsh Dhanuka, Executive Director; and Mr. V.

K. Bansal, CFO, on the call.

Without any delay, I would like to invite Mr. M.

K. Dhanuka to start with opening comments, post which we will open the floor for Q&A.

Thank you and over to you, sir.

Thank you, Riju. Good afternoon, ladies and gentlemen.

I am M. K.

Dhanuka, Chairman of Dhanuka Agritech Limited. Welcome you all to the Q3 FY26 earnings call.

I have with me Mr. Rahul Dhanuka, Managing Director; Mr.

Harsh Dhanuka, Executive Director; and Mr. V.

K. Bansal, CFO of the company.

As you are aware, Dhanuka Agritech is a leading Indian agrochemical company. Dhanuka is working with the vision of transforming India through agriculture.

We have a pan-India presence in all major states to reach out to more than 10 million farmers with our products and services. Dhanuka's key focus has been on introduction of novel chemistries and extensive product development distinguishing us from the rest of the industry.

Over last couple of years, we have set up two research and technology centers to enhance our focus on innovation and research. One of the centers is focused on applied chemistry and working for establishment of new products and new formulation development.

The second laboratory is focused on innovation in chemical synthesis for generic and late-stage patented products. To support our investment in innovation, we have significantly enhanced our regulatory team to speed up our Indian as well as international registration initiatives, providing us faster access to international markets and quicker introduction of new products.

Dhanuka has international collaboration with 10 leading global agrochemical companies from Japan, US, and Europe, which helps us to introduce the latest technology in India. With four manufacturing units and 41 warehouses across India, we cater to around 6,500 distributors and 80,000 retailers.

Dhanuka has a strong sales and marketing team to promote and develop new products. During this quarter, agrochemical demand remained weak due to stressed demand drivers: weather issues, low crop prices leading to industry-wide volume decline.

Farmer interest reduced in making investments in crop protection chemicals due to lower crop prices. South and West India saw sharp demand declines while East and North remained stable.

Indian farmers delayed purchases due to significantly extended rainfall and weaker commodity realizations. Lower farm incomes reduced spending on crop protection products impacting domestic sales.

Further, I am happy to share that we have commercialized the second product from Dahej plant in Q3 FY26. We are working for making Dahej operations EBITDA positive in FY27 and try to reach 80% capacity utilization on existing plant.

Also, we are in the final stages of working for the business plan for MPP 2 and will be concluding the same within this year. Now, moving on to the financial performance for the last quarter: our revenue from operations stood at ₹409.92 crores in Q3 FY25-26 versus ₹445.27 crores in Q3 FY24-25.

EBITDA stood at ₹58.66 crores in Q3 FY25-26 versus ₹75.56 crores in Q3 FY24-25. Profit after tax stood at ₹40 crores in Q3 FY25-26 versus ₹55.04 crores in Q3 of FY24-25.

FY25-26, with two straight negative quarters, has been a blemish on an otherwise decent performance from Dhanuka over the years. I can assure the stakeholders that the bad phase is over now and now in future it is going to be good only.

I would like to assure our shareholders and our stakeholders that our strategy is well laid out with continuous extension in rural market penetration, new product introduction, technical manufacturing, and international market expansion. We are confident on delivering our long-term objective of achieving double-digit CAGR.

Zone-wise percentage share of turnover for Q3 FY25-26: North India 25%, East India 11%, West India 30%, and South India 34%. Product category-wise percentage share of turnover for Q3 FY25-26: insecticides 28%, fungicides 21%, herbicides 37%, others 14%.

Dhanuka considers itself responsible towards securing the farmer's welfare and preserving food security of the nation. We continue to strengthen our association with the agriculture universities, Krishi Vigyan Kendra, and other critical institutions to impart knowledge and latest technology to the farmers.

Thank you very much for your kind attention, and now we would like to open the forum to take the questions. Thank you.

Thank you for the opportunity. Sir, how is the current demand scenario for agrochemicals?

We understand Q3 was weak, but how is Q4 doing, and what is your expectation from Kharif season?

Right. Q4 has really started well.

January has been well for us. South Indian paddy, East India paddy is looking really good.

Wheat crop has been good and the relevant consumption of wheat herbicide has happened extending from late Q3 to early Q4. All that is looking bright.

We are looking into a good harvest of Rabi and then getting into a good Kharif. Right now, it will be too early to kind of indicate anything for the upcoming Kharif.

We would still be waiting for weather forecast coming in late March and early April before we really form up our Kharif plans.

Right. Sir, out of the total top line, how much is the contribution from technical sales and revenue from the molecules of Bayer that we had bought, both in Q3 as well as 9 months?

You see, revenue from Bayer molecule in the balance sheet of Dhanuka is around 25 to 27 crore, right?

Right.

With regard to second part of your question, with regard to technical sales, is around 50 CR.

Sir, I presume this will be for 9 months. For the quarter, how much is it?

See, technical sale is not much in quarter three, is hardly around 3, 4 crore. With regard to this Bayer product, this was major in Q3.

Half of the, yeah.

Sir, this 25 to 27 crore is all top line or some of it is net economic benefit as well?

No, it is the top line. Net economic benefit is separate.

Okay. Which is around 6 CR in quarter three, and overall is around 19.5 CR in 9 months.

Sir, from here on, the net economic benefit will continue to flow or it will stop?

No, it will definitely stop the moment we'll take the entire control. The net economic benefit will definitely discontinue.

From the next financial year, which is FY27, some of the export sale will start appearing in our balance sheet. By the end of the financial year, I think we'll be controlling the overall revenue, which means in the year FY28 there should not be any net economic benefit.

Yes, in next financial year, net economic benefit would be there, but significantly lower than the current year.

Right. Sir, next year, what could be the contribution from technicals as well as these two molecules of Bayer?

In Dhanuka balance sheet?

Yes.

You see, that is under process. You see, the team is working with regard to the export sale.

It is little difficult to estimate. I think the progress is on.

We will be able to assess in a better way by the end of the March.

Even for technicals?

Technical sales would be sort of in line with this current year, maybe 10, 20% growth.

Sir, how much is the current cash on books?

Current? Cash on books.

Cash.

Cash and liquid investment. It's more than ₹250 crores.

Okay. Sir, just lastly, how much was the sales from biologicals in FY25, and how much was it for 9 months '26?

Biological almost negligible in '26 and in '25 it was less than 2 crore.

Okay. Sir.

Thank you so much for your time.

Thank you.

Thank you for the opportunity. Will it be possible to kind of indicate or quantify what could be the negative impact of sales returns for you in this quarter?

The same number say last year.

You see sales return this year is almost equal to the last year, but slightly lower than by 2 crore this in Q3 as compared to the Q3 of the previous year.

Okay. Sales returns have not really kind of increased for you in this quarter.

In this quarter, yes, that's right.

Okay. Understood.

Correct me, biologics you're saying there is no contribution for you in this quarter? I'm a bit confused on the biologics side.

I thought it's contributes almost 9 to 10% of your revenue.

Biologicals, no, one is the category PGR category. Biological is biostimulant or you're saying biological?

The products which are under regulatory challenges, what is that contribution?

Product under regulatory changes in this category, we were having a contribution of around 9, 10%. This year the impact in our Q3 is around 15 crore, and 9 months is a impact of 49 crore on account of the, you see, four product biostimulant stopped sale, basically.

Okay. You lost 50 to 50 of sales on a 9-month basis because of this regulatory challenges.

Yes, that's right. That's right.

How much of it is normalized now, and what should we expect on this side in the future on the regulatory issues?

The regulatory framework is in place, which is really good for the organized players like Dhanuka. Our products are under testing and approvals stage.

We are quite hopeful that we'll be receiving our approvals by end of this quarter, and we'll be up and running with fresh set of biological offerings, biostimulants offering, in the new regulated regime in Q1 of next year.

Are you confident that you will be able to get speedy approvals so that kind of kicks off for you in the first quarter? I'm trying to get a sense how much of business has already normalized, and what can be the expectations for FY27 on that side?

When you say how much of business is already normalized, I don't get that. Yes, we are tracking our approvals and we are hopeful of getting out of our at least three products approval in this quarter so that we can launch by Q1 endings.

Okay. Understood.

Expecting that almost three out of four molecules you will be expecting it to normalize in first quarter onwards, right?

Yes.

Okay. Understood.

Thanks. Also, I wanted to seek your comments around the recent changes in the China policy when they ending export rebates on some of the technicals of the generic molecules.

What would be your view on that side, does it make a problem for players like Dhanuka because some of our purchases are linked to China? How are you strategizing to kind of handle this issue in industry?

Good question. You see this is China's internal approach.

This will certainly increase the price of some of the commodities for which export rebates have been reduced. Since it is an industry-wide phenomenon, it will not significantly impact either our sourcing or our competitive edge in the market.

I don't see any material impact on our sourcing out here.

Okay. You would assume that industry will be able to pass on these hikes in India, because I thought becomes difficult and challenging to pass on the higher prices, and if it happens, it happens with a lag.

I will not comment about the industry here. At Dhanuka, we kind of significantly follow this practice of passing on the increased cost as much as possible downstream.

We have mostly done it almost all past years and quarters, and we're pretty hopeful we'll be able to do that.

Okay. Possible to also tell us what is the revenue exposure that you would be having which is linked to some of these products?

Actually, most of these products, glufosinate we are already buying from India, we are not sourcing from China. Glyphosate, the export benefit was already removed in the past year, there will be no impact.

The other products are not confirmed which will have an impact.

Sure. Thanks, I'll get back in the queue.

Hi sir. A few clarifications in terms of, when you said that Bayer income from the Bayer about 6 crore for this quarter, this is mainly the royalty income that you have mentioned, this 6 crores?

It is not royalty, it is net economic benefit. It's like royalty, not the royalty, actually.

Understood. The sales or the revenue that you have mentioned this year, maybe for the 9-month, 25, 27 crore, this is like earlier you indicated that the majority part of the revenue came from the domestic market, is it still the domestic market contributing this revenue from the Bayer product, 25, 27 crores, or some part of this revenue, came from the outside of India?

Yes. No, it is from India only.

Okay. The recent transfer for the overseas market, when we can expect that and how's the timelines that are moving?

It is in process for various countries and many of the applications are in process. In '27 sorry, in '26 we will see a lot of transfers happening.

Even without the registration transfers, the sales will begin once the distribution appointment gets completed and the sales moves to the distributors, Dhanuka distributors.

Understood. For the overseas business, we can expect the transfer or the revenue under Dhanuka's book might happen from the Q1 or Q2 of '27, right?

Q1 surely.

Understood. In terms of the guidance, if I look at your 9-month numbers and like you have mentioned in the PPT that we have maintained the guidance what we have earlier communicated, if you look at in terms of run rate, our margins in terms of EBITDA is roughly around 18% as of 9-month.

If I look at last year Q4 numbers, there were one one one-off impact of the benefit that we have got from our Japanese or some partners. Despite that, we are expecting that our margins to be 100 100 bps decline from the last year level.

How are you confident of making like 24, 25% kind of a EBITDA margin in 4Q?

You see, we are very much confident. In terms of the EBIT, our EBIT will be negative in line with the 9-month.

In 9-month, our EBIT negative by 113 basis point. In overall annual basis, we are expecting the similar decline, 100 to 110 basis point.

Understood. Sir, in terms of new product launches so far, how many products we have launched in 9-month period?

9-month period we've launched, one is DINKAR, one MYCORIO.

One is Valdor.

One is Valdor, three.

Three we have launched, right? Sir.

Okay. Thanks, sir.

Thanks for clarifying all the questions.

Hi sir. Just couple of questions.

First is on the biostimulant. Just to understand what is the key season time for those particular products?

The reason why I'm asking is that if for any reason, there's a delay in approval from the government for registration, if in case it doesn't come by Q1, is there still a possibility we can meet the sales or you think a good part of the season would be lost?

The peak consumption time coincides with our peak business opportunity, which almost starts by June end, say early July, and goes on through late November. Mostly July to November is the peak consumption.

Another round comes up in March with sugarcane.

Understood. Got it.

When you say biostimulant, the total number of products which you have in the portfolio would be four as of today?

Yes. The once regulated in the regulated environment were four, out of which three will be coming through and one, which is of animal origin and all that, so that may not be coming through easily or not in near future.

The three would be the larger part of the sales loss which we

Yes, the other three constituted more than 80% of our revenue, so that would be well-placed. In addition to that, you would recall we had already launched Mycoreiza 3 4 years back, and then we introduced Mycoreiza Super also couple of years back, which is a good replacement of biostimulants as far as farmers' crop growth opportunity is concerned.

Dhanuka's Mycore Super brand has taken a good position in the market, filling up the vacuum created by absence of biostimulants from Dhanuka's own portfolio and of the competition as well.

Understood. Second question was, sir, if you can give mix of in terms of EBITDA of B2B versus B2C?

You see B2B of course the EBITDA is significantly lower than B2C.

For the quarter gone by, what will be the EBITDA for the Dahej business?

Can you repeat your question?

For the quarter which has gone by, what would be the EBITDA for the Dahej B2B business?

Dahej, you see, EBITDA is still negative. In Q3 it is around 4 CR as against the 5 CR as against last year 4 CR.

Okay. Just question on Dahej.

I think last quarter we mentioned that we are commissioning second product difenoconazole for supply to domestic market and we're also having a good utilization for the first product. If I look at the revenue for the quarter, for the Dahej, it's hardly 4 CR as against ₹10 to ₹12 in the earlier quarters.

Generally the environment is quite positive in terms of price and volume both from export point of view as well of CPB exports. What is the reason why the sales are lower for Dahej?

Q3 in any case is off-season for both of these products, Q3 we were expecting lower sales. That is one.

Second, our difenoconazole production got extended and went into November and December, which we were expecting to close in October and November. That got delayed slightly.

Now it is completely online and so starting Q4, difenoconazole revenues will start coming in as per the plans. With respect to bifenthrin, in any case it was off-season.

Q1 we have started on a good note for bifenthrin technical sales from Dahej, we are expecting that to continue in the future as well.

Okay. Both these two products together going into next year, what kind of a sales utilization we are looking at?

What will be the capex for the MPP 2 plant?

Yeah. Next year FY27, we are looking at a capacity utilization of close to 80% for these two plus we'll be adding one more product in this plant, that is iprovalicarb.

Three products together, we are looking at 80% capacity utilization. The MPP 2, we are expecting a capex in the range of 60 to 70 crores.

Okay. Got it.

Last question. Sir, if I look at the B2C, if I adjust for the sales addition from the Bayer products in the quarter which has gone by, then the degrowth for us is even higher in B2C.

If I look at other players in the industry, we've not seen that kind of a degrowth. Just trying to understand what is driving low performance for us, in any color you can give?

One is, of course, the impact of the biostimulants in B2C segments, which has hit us hard in Q2 and Q3 business opportunity. Then also, last year we had some really powerful NPI, new product introduction, for chili segment.

Chili has taken a major beating in this season down South, the consumption has been significantly low, which is a very specialized segment where farmer consumes only high-value product, and that high-value consumption has been hit hard. Third is, I think, at Dhanuka we really optimize the channel inventory significantly faster than the industry standards.

We do not allow our channel partners to carry forward the inventory. We try and turn it around faster than what the industry averages would be.

That could probably, but this is an external factor which I don't have a complete hang of, be influencing how our sales get compared.

Understood. If I look at March 2025, we ended the year with around 230, 240 crores of cash, and if I look at December, I think based on the commentary, we are still around 250 crores of cash.

Would it be right to think that we're sitting on a sizable amount of inventory or receivables compared to a normal period?

You see, in terms of March, we were having a loan from the banker to the tune of 50 crore, which is paid in the current financial year, right? Now our debtor position is improved as compared to the last year December.

Inventory, of course, has increased because of the, you see, impact on the volumes, because there are many molecules which are imported and we sourced the inventory as per our sales plan, but somehow that misfired, because of which our inventory of few imported molecules have increased significantly this year.

Thanks for the opportunity. Sir, if we look at our gross margins from FY23 to FY25, there was an expansion of approximately 580 bps.

Our margins went from 34.4% to 40.2%. If you look at the backdrop, this was in an environment when technical prices were benign due to oversupply and inventory issues.

In one of the earlier concalls, I believe you had referred that you were expecting 100 to 150 bps of contraction in gross margins because you were expecting the prices to stabilize and then thereafter increase. If you look at the gross margin for the current period, it's still at 40%.

Two questions for you. Firstly, is the softness in technical raw material prices still there, and how long do we expect the softness to continue?

Second question is, once the cycle turns and prices stabilize and increase, what is our expectation of the sustainable gross margin that we can have?

You see the one impact of the gross margin is on account of this year we received around the NEB of ₹20 crore, ₹19.5 crore, which has no basically COGS. It's entirely impacting the gross margin to that extent.

Another is with regard to the technical prices, I think the softening is almost over now. Going forward, I'm of the opinion key 38% gross margin are sustainable in long term.

You're saying that now we're seeing technical prices picking up and stabilizing, and you expect about 200 bps impact on your margins and sustainable should be more 38% gross margins as opposed to 40-odd percent, which have been there for the last year, year and a half?

With 2% impact on account of not the raw material prices, it would be on account of the NEB.

Understood. What percent of our raw material is actually sourced from China?

Direct procurement would be in the range of 10 to 15%.

If you include indirect as well, then how much would that be?

Indirect is difficult to say because we buy a lot of material from Indian companies who are both manufacturers and importers, it is difficult to say what would be the indirect procurement from China.

Got it. Thank you, sir.

I'll come back in the question queue.

Hi sir. Thank you for taking my question.

Just wanted to know for the quarter what would have been the contribution from the volume and price?

You see, in this quarter it's almost flat. Similar, value and volume are almost similar.

Equal contribution from volume and value, right? Volume and price.

That's right.

Understood. Just wanted to ask in the previous quarter you've given a guidance cut and guided the full year to be ending with a flattish growth.

Would this still be achievable or do you think there could be some growth in Q4? Given that Q4 has a good start?

In case of Q4 definitely there would be a growth, but on yearly basis we are of the opinion this should be flattish year.

Okay. Got it.

Just one on the guidance of the two Bayer products, the guidance for the full year was around 40 crores, is that achievable? Will we be ending it 40 crores?

No, no, no, because of the grape season not behaved as per our expectation. It would not be 40 crore, it will be significantly lower than 40 CR.

Maybe around 30 30 crore.

Okay. Thank you.

Hi, good evening, sir, and thanks for the opportunity. I just have one question.

Sir, what would you make out of the current draft Pesticides Management Bill proposed by the government and what would the long-term impacts of be for organized players like us at Dhanuka Agritech? Your thoughts.

Thank you.

Right. Draft Pesticides Management Bill would be really good for the organized industry and organized players.

Dhanuka being a organized player and believing in building brand equity, building value for the customer, in this case our farmer, would significantly stand to benefit from the PMB. PMB, apart from various other things, brings in tough rules around misbranding, fake, spurious products.

It brings stiff punitive measures around fly-by-night operators, which will be a big deterrent and will open up more market space for organized players like ourselves. PMB, I think so, is long-awaited.

The government has asked for various inputs from all possible stakeholders, including farmer. We, as the industry and industry associations, have submitted our viewpoints, contributed for the same by 4th of February that was to be achieved.

We have provided our views where the government and the industry together can facilitate the desired growth of the Indian agriculture and prosperity of the Indian farmer.

Sir, upon its execution and obviously after taking the comments from all the stakeholders in the industry, would you have any expectations or have an understanding on how the government will try to maintain checks and balances about the most talked-of problem with respect to spurious products and the misbranding that you spoke of? Would you have any comments on that account which might help us, or rather as an organized industry, to gain more market share from the ones who are doing the malpractices?

Agriculture is a state subject, and to an extent the regulatory and the executive powers is also with the state, which is certainly not going to change with the law. Yet, the provisions will make it difficult for the hand-in-glove operators with the fly-by-night operators.

There are other agencies who could be hand-in-glove with these. It will become difficult for them to really play around.

Yet, the success of any law depends on how well it gets executed, where the center and the states will have to collaborate to ensure that the execution is in the spirit of the letter. That is something at Nuvama yourself and at Dhanuka and the entire industry would look forward to, that the execution is in the spirit with which the law is framed.

Sure, sir. Understood, and we'll definitely hope for the best.

Thank you, sir. That's it from me.

Thank you. All the best.

Thank you.

Opportunity. Sir, in terms of new product introductions for next year, FY27, how are we placed, and what could be the 9(3), 9(4) products for what categories that we are looking at?

Thank you.

Yeah. We have lined up three new launches for next year, out of which two would be fungicides, and both of them would be 9(3) first-time introductions.

Then we have also lined up a specialty offering for enhancing spray efficiency. These are the three products which we have lined up for introduction over next year.

From an application perspective, which crops these would be utilized primarily for?

Right. Both the fungicides will find their application significantly in grapes and then in potato.

They will also find application in tomato and chili. Grapes, tomato, chili, all three being high-value crops, will have a good opportunity.

The third spray enhancer also, as a premium product, we will be positioning largely in tomato markets.

Sure. Sir, second question in terms of the current environment, as of now there are talks that there will be probably El Niño this year.

Historically, since we've been through several cycles, whenever the El Niño has happened, has it impacted materially in terms of the performance for a particular Kharif season? Allied question to that, we have also experienced the farm income being lower, getting impacted the Q3 numbers.

If it continues to remain low, will it have its repercussion for the next Kharif season? Just your thoughts on this.

Thank you.

Right. First a take on El Niño.

The El Niño predictions which have come up recently are followed up by these being too early and the margin of error being significantly higher. The new predictions normally come in after mid-April.

We'll be waiting for that to really understand how intense El Niño forecast is. Yet, you would have also noticed that all El Niño years are not poor rainfall years.

That being said, we'll have to wait for IMD, Australian Meteorological Department, and few other meteorological department for us to kind of collate and understand how do we see the upcoming Kharif. Talking about the farm income, it is the farm income which not only Dhanuka Agritech, but almost the entire nation depends upon, agriculture contributing 14% of the GDP and more than 50% of the population being dependent on agriculture.

Not only agri inputs, but FMCG, FMCD, automobile industry depends on their success. Yes, we not only keep our fingers crossed, we genuinely pray and at Dhanuka we work closely with the farmer so that we can support in enhancing their income.

Got that. Sir, just one last clarification in terms of our Dahej manufacturing block, are there any talks going on with any of the multinational players or players outside India for an exclusive contract or arrangement which we have been seeking for a fairly long time?

Thank you.

There is one discussion which is going on, and last quarter two companies have visited us at Dahej. One Japanese and one European.

We are looking forward to progressing on these discussions further.

Sure. That is helpful.

Thanks a lot and all the best, sir.

Hi, thanks for the opportunity. Sir, just one question: the amount of sales return in this quarter?

Sales return in this quarter is similar to last year in Q3.

Sir. What is the number?

I was not able to find the number for last year.

This year is ₹72 crore as against ₹74 crore last year.

So ₹72 in this quarter, right?

In this quarter, that's right.

The 9-month number would then be closer to ₹220 crores, correct?

That's right, actually.

Okay. All right.

Thank you.

Hi sir, thank you for the opportunity. If we were to take a slightly medium to longer-term view

I can hear you. Hello?

Yeah. Hi.

Thank you for the opportunity. If we take a slightly longer-term view of, say, 3 to 5 years, what is the kind of growth opportunity for Dhanuka?

What sort of growth rate can we realistically grow at? It will be helpful if you can break that down into growth from existing products as well as new molecules and exports as well as getting into new crops.

Right. This is a very larger question, but let us look at the macroeconomics favoring the agriculture.

Yeah.

I see a echo in my voice. There's a sound system over there which is causing this echo.

Let me just mute it from my side.

I hope so there is no more echo. The macroeconomic factors certainly favor agriculture and so the agri input industry also.

While urea, DAP, other nutritional segment is what farmer invests in eagerly, crop protection industry has taken up a strong position with investments in the agriculture increasing and value-added crops gaining significant ground in the agriculture space. Within that domain, Dhanuka has constantly brought in new products, value-added products, specialty products, and niche products from our Japanese, European, and US-based partners, thereby offering to the farmer specialized solutions for their problem.

With this, we have a place in specialized crops like grapes, tomato, chili, some of them getting exported as well, while we also have a strong foothold in conventional crops like rice, paddy, soybean, cotton, and tea. Overall, with this kind of favorable macroeconomic situation, I believe we will continue to grow at Dhanuka with a healthy double-digit growth on a short to mid-term horizon of next 3 to 5 years.

The expansion opportunity is available due to multiple crop cycles. Farmer is trying to grow more than two crops now, which is almost three crops in many patches of the country, which is possible: a, because of the irrigation facility, and b, because of the increase in marketability of the produce.

India with the more than 600 grams per hectare agrochemical consumption is still one of the lowest as compared to the world average agrochemical consumption, with a significantly high arable land of 150 million hectares. The growth opportunity is only northwards.

It really depends upon how intensely we are able to reach to every nook and corner, every plot and field, where farmer is cultivating.

Understood. If I if I could, what do you see the risks?

Aside aside from say, weather patterns, what are the risks that could prevent you from achieving this double-digit growth?

Could you put that on mute again? I think so that should work.

Apart from the weather patterns, the commodity prices and sometimes the policies like G-RAM-G now could also have an impact on how the farmer move towards agri input. A lot also depends upon the marketability, storage, and transportation of the commodity.

Earlier India touched a milestone of almost 335 metric million metric tons of food grain production, and very soon horticulture production crossed that level and touched 340 million metric tons. Now horticulture production is a value-added production for the farmer and relatively higher on input consumption.

Increased in warehousing, increased in cold storage, increase in cold transportation, good roads, non-stoppage at chungi nakas because of the tax smoothing, all this will only facilitate the progress of agriculture as well as agri input industry. These infrastructural tailwinds being favorable, I think so other than seasonal vagaries, nothing should stop.

Thank you, sir. I had a clarification on my gross margin question earlier.

What is the total quantum of the net economic benefit that we've received which will now go away once we have it on our books? Secondly, what is the gross margin profile of these two brands which we had acquired from Bayer?

You see net economic benefit quantum in the 9-month is 19 and 1/2 crore, and in Q3 is around 6 CR.

What is the gross margin profile on these two brands?

Gross margin is in the range of our overall gross margin.

Broadly in line with 40-odd

percent? Absolutely.

Some 2, 3 200, 300 basis point here and there.

Understood. Thank you, sir.

Just two questions on the Bayer products. One is if one has to understand the contribution margins of the two products, would it be in line with our B2C business margin or would it be even higher, any color you can give, both contribution and operating margin?

It is in line with the overall gross margin of the company.

Okay. Got it.

Second question is, see, these two products, they have a well-established distribution system, right. In terms of our approach, I think somewhere in the call you talked about us looking to appoint new set of distributors.

Are they for the new markets or those are for existing regions as well? Any color you can give how we're approaching in terms of go-to-market and any risks you see in terms of execution?

Currently in most of the countries, Bayer has been selling the product through its distribution networks, as Bayer is present directly in most of the countries. Dhanuka is not planning to go direct distribution in these countries, we are appointing one national distributor in the various markets.

The new distributor appointment which I referred to earlier was in the countries where Dhanuka is not present. In case of India and Nepal, we are not appointing any new distribution channel.

Right. Going into '27, do you see any risk in terms of execution and since the products are transition from Bayer to Dhanuka, so?

The risk is in any business transaction it is there in terms of the setback in terms of supply chain, because for supply chain we are still dependent on Bayer to provide the product. While the regulatory changes happen with registration ownership being transferred from Bayer to Dhanuka and India's sourcing getting added, we may see some issues in supply chain, although we have done the planning, but it is always a risk.

Got it. Just last question if I can squeeze in, see Bayer, most of the manufacturing is centered in Europe, and the cost of manufacturing is quite elevated compared to Chinese.

In that sense, when we look to move one of the products from Germany to India, do you see any material change in the margin structure for the product or any color you can give?

Definitely there would be an improvement in the margin structure for the products once the manufacturing moves to India, absolutely.

Thank you very much.

Thank you, friends. Once again, I would like to thank all the investors and analysts for your support and confidence in Dhanuka.

We have already initiated our FY27 plannings and looking forward to a normal year. I reassure our stakeholders that we are committed to the task of transforming the landscape of agriculture and farmers in India.

I once again reassure the stakeholders that the bad phase for the last two quarters is over now, and now we have to look for a bright future only. Thank you.

India ka Pranam, Har Kisan Ke Naam. Thank you and looking forward to connecting with you in the next quarter.

Thank you once again.