Best Agrolife Limited — Q4 FY26

Best Agrolife Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=TzQrV4ak6jU Published: 3 weeks ago

0:01 1 second Ladies and gentlemen, good day and welcome to the Best Agro Life Limited Q4 and FI26 earnings conference call. 0:10 10 seconds As a reminder, all participant lines will remain in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:18 18 seconds concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. 0:27 27 seconds Please note that this conference is being recorded. Before we begin, a brief disclaimer. 0:34 34 seconds This conference call may contain forward-looking statements about the company which are based on the belief, opinions and expectation of the company 0:41 41 seconds has on date of this call. These statements are not the guarantee of future performance of the company and it may involve risk and uncertaintities that are difficult to predict. 0:53 53 seconds Today from the management side we have with us Mr. Mr. Surendra Sai, Executive Director and Mr. Vikas Chen, Chief Financial Officer. 1:02 1 minute, 2 seconds I will now hand the conference over to Mr. Surendra Sai for opening remarks. Thank you and over to you sir. 1:10 1 minute, 10 seconds Thank you conference call of best life 1:20 1 minute, 20 seconds as a business year for the Indian agrochemical sector. FY26 was an average year with some unexpected and adverse 1:27 1 minute, 27 seconds weather conditions. The weather was unseasonal throughout the year and we had some areas experiencing lower than 1:34 1 minute, 34 seconds expected rainfall while other areas experienced floods. Uh due to this there were some impact on the sales in some 1:41 1 minute, 41 seconds key areas such as Arana and Pa. uh certain crop segments did not perform as well as expected like chili pulses, rabies, patties uh and fruit crops. 1:54 1 minute, 54 seconds In addition to an an average season, there was a buildup in the trade inventory which also led to depressed sales. 2:01 2 minutes, 1 second Our focus throughout the year remained on strengthening the long-term fundamentals of the business. We continue to strengthen our basics in 2:10 2 minutes, 10 seconds terms of policies, pricing, inventory and expenses control. 2:16 2 minutes, 16 seconds Our strategy remains focused on building a stronger patented portfolio for a positive impact on the farmer's income. 2:23 2 minutes, 23 seconds Our district service has shown positive feedback for our speciality products with overwhelming positivity and 2:30 2 minutes, 30 seconds acceptance from the farmers. Farmers in Madhya Pradesh, Maharashtra, Rajasthan have been appreciative of our products 2:38 2 minutes, 38 seconds like Ronen, Tricolor, Warden extra and we have also observed gaps in the branding at the farmer level and we are 2:46 2 minutes, 46 seconds addressing these with social media and WhatsApp campaigns. 2:51 2 minutes, 51 seconds We have acted on the farmer's need for bio stimulants and introduced five new products in this category. The new 2:58 2 minutes, 58 seconds segment of bior products include prink rich group gold emperor to net and punctua. 3:06 3 minutes, 6 seconds We are confident of strengthening former loyalty and enhancing our brand recognition. 3:13 3 minutes, 13 seconds During FI26 we launched three patented products namely bestman, fetagen and shot down. Bestman has received 3:21 3 minutes, 21 seconds encouraging acceptance in key horicultural markets due to it strong efficacy against pest and borer in 3:28 3 minutes, 28 seconds crops. Twitter and shortdown are also gaining strong market traction. 3:35 3 minutes, 35 seconds FY27 will see us launch fluan bitcoin cubit power extra and the shampoo. These 3:43 3 minutes, 43 seconds patiented products are expected to further strengthen our positioning in the specialized crop protection market. 3:52 3 minutes, 52 seconds Our focus continues to be on strengthening the IP portfolio. We received seven combination patent, one nanoua patent and one process patent. 4:03 4 minutes, 3 seconds This year the synthesis R&D center successfully commercialized the 18 stage manufacturing process. 4:13 4 minutes, 13 seconds FY26 saw the synthesis development and manufacturing process for new molecules. 4:20 4 minutes, 20 seconds At least four new generation molecules will be produced this year at the Gerola facility. 4:29 4 minutes, 29 seconds This reflects our continued investment in research and development and reinforces our commitment towards an 4:36 4 minutes, 36 seconds innovation growth and atma manufacturing to improve the balance sheet health and 4:44 4 minutes, 44 seconds maintain better market discipline. Our key levers will be [music] operational discipline, capital efficiency, 4:52 4 minutes, 52 seconds inventory control, return policies and expenses control. 4:57 4 minutes, 57 seconds Looking ahead, while the external environment continues to require close monitoring particularly with respect to 5:05 5 minutes, 5 seconds the monsoon progression and of course the ongoing weure 5:14 5 minutes, 14 seconds better FY27 the impact of Elino this year has been carefully analyzed and we are taking 5:23 5 minutes, 23 seconds action to mitigate its impact on the sales. 5:28 5 minutes, 28 seconds In our brand segment, we are implementing calibrated pricing policies. We are introducing new bio 5:35 5 minutes, 35 seconds products and our patented portfolio products portfolio will continue and this will support our improvement in 5:44 5 minutes, 44 seconds profitability and the overall brand business performance over the continuing quarters. 5:50 5 minutes, 50 seconds We are experiencing a surge in contrast especially for our popular products such as Bron. To tackle this we are 5:57 5 minutes, 57 seconds introducing high security holograph on our key products to help our customers differentiate between genuine and concrete. 6:06 6 minutes, 6 seconds Another problem we are addressing is that of text resistance. 6:11 6 minutes, 11 seconds Then any product which does not work the farmers generally use an alternative method of having the you know having 6:19 6 minutes, 19 seconds another product which is having the same mode of actions and they hope for results. Globally mode of action is 6:26 6 minutes, 26 seconds displayed on label and is an important information for preventing development of crop resistance or pest resistance. 6:35 6 minutes, 35 seconds Our new label will display the mode of action based on IRA, HRC and FRA. We believe this transparency will help the 6:44 6 minutes, 44 seconds farmers choose the right products. We are positive about ramping up the production from our technical manufacturing. 6:50 6 minutes, 50 seconds Converting the R&D successes into commercial successes. 6:56 6 minutes, 56 seconds Our registrations abroad are ongoing with two registrations in Mexico in the final stages of approval in Sri Lanka. 7:04 7 minutes, 4 seconds The registration of our patented molecules is in progress on a fast track while we successfully received our first 7:11 7 minutes, 11 seconds registration in Thailand. In Vietnam, we are expanding the registration portfolio with our local partners. Regarding 7:18 7 minutes, 18 seconds orders, we continue to ship consignments to Sudan where our products are being well accepted. 7:25 7 minutes, 25 seconds We are in the final stages of starting a subsidiary in Brazil. We are also continuing to see interest in our patented nanoua formulations across. 7:34 7 minutes, 34 seconds We remain committed to creating long-term value for all our stakeholders through innovation, disciplined 7:41 7 minutes, 41 seconds execution and sustainable growth. With that, I would like to conclude my remarks and hand over to Mr. Var who 7:50 7 minutes, 50 seconds will walk you through this year's financial. 7:54 7 minutes, 54 seconds Thank you Shai and uh good afternoon everyone. 7:58 7 minutes, 58 seconds I will begin by taking you through the company's financial and operational performance for the quarter and financial year ended March 31st 2026. 8:07 8 minutes, 7 seconds FI26 was an exceptionally industry uneven 8:16 8 minutes, 16 seconds elevated channel inventory levels weak dealer liquidity and volatility in geometry prices. Despite these 8:24 8 minutes, 24 seconds headwinds, the company remained focused on operational discipline, working capital optimization, and strengthening long-term business fundamentals. For 8:32 8 minutes, 32 seconds FI26, consolidated revenue from operations stood at 1257 crores as compared to 1814 crores in FI25, reflecting a decline of 31% yearonear. 8:45 8 minutes, 45 seconds Gross margin for the year 380 crores as against 531 crores in FI25. 8:51 8 minutes, 51 seconds However, gross margin percentage improved to 30% compared to 29% in the previous year. This was supported by 8:58 8 minutes, 58 seconds product mix improvement and calibrated pricing actions. AITA for FI26 stood at 100 crores as compared to 200 cr in FI25 9:08 9 minutes, 8 seconds while AITA margin stood at 8% versus 11% in the previous year. profit after tax for FI26 today 9 crores average in 70 9:17 9 minutes, 17 seconds crores reported in FI25 with pack margins at 1% compared to 4% last year 9:25 9 minutes, 25 seconds within the branded sales the even though the sales had tipped by 31% within the branded sales reporting the preented 9:33 9 minutes, 33 seconds portfolio went down by only 7% and the generics were lower by 40%. indicating 9:40 9 minutes, 40 seconds we were able to maintain our portfolio or rather improve it. Patent products now contribute up to 40% of our total 9:48 9 minutes, 48 seconds branded sales which till last year was about 30%. 9:53 9 minutes, 53 seconds Coming to the quarterly performance revenue from operations for Q4 FI26 to 156 crores as against 274 crores in Q4 10:03 10 minutes, 3 seconds FI25 representing a decline of 43% yearonear. 10:08 10 minutes, 8 seconds Gross margin for the quarter stood at 35 crores compared to 63 crores in corresponding quarter last year while 10:14 10 minutes, 14 seconds gross margin percentage stood at 23% in this quarter as well as Q4 25. AITA 10:21 10 minutes, 21 seconds for Q4 FI26 stood at negative 27 crores compared to negative4 crores in Q4 FI25. 10:28 10 minutes, 28 seconds AITA margin for the quarter stood at negative 17% as against 2% in the corresponding period last year. 10:35 10 minutes, 35 seconds Profit quarters stood at 37 crores compared to -22 crores in Q4 FI25 while 10:44 10 minutes, 44 seconds pack margin stood at -4% versus8% in the same quarter last year. The fourth quarter was particularly impacted by 10:52 10 minutes, 52 seconds weaker seasonal demand, slower channel liquidation, elevated inventory at the distributor level and sharp increase in raw material prices during March 11:01 11 minutes, 1 second following geopolitical developments in the Middle East. In response to the sudden increase in input cost, we 11:07 11 minutes, 7 seconds consciously calibrated this using Mars 11:16 11 minutes, 16 seconds B2B segment. While this current decision impacted near-term revenue by approximately 50 to 70 crores, we 11:25 11 minutes, 25 seconds believe it was necessary to protect medium-term profitability and maintain channel discipline. To mitigate rising input cost, the company implemented two 11:33 11 minutes, 33 seconds rounds of price increases, one during April and another during May 2026. We expect these pricing interventions to 11:41 11 minutes, 41 seconds progressively support profitability beginning in Q1 FI27 onwards. One of our key operational priorities over the last 11:48 11 minutes, 48 seconds two years has been working capital optimization and inventory reduction. 11:53 11 minutes, 53 seconds We're pleased to share that inventory levels have reduced significantly from approximately 958 crores in FI24 to 773 12:01 12 minutes, 1 second crores in FI25 and further to 651 crores as of March 31st 2026. 12:07 12 minutes, 7 seconds This reduction reflect tighter procurement planning, calibrated production schedules, rationalization of slow moving inventory and sharper 12:15 12 minutes, 15 seconds channel management practices. As we move into FI27, our focus remains firmly on improving cash flow generation, 12:23 12 minutes, 23 seconds strengthening balance sheet quality, enhancing product mix and driving sustainable profitability rather than purely volume growth. While the external 12:32 12 minutes, 32 seconds environment continues to remain dynamic, we believe improving inventory alignment, pricing actions already undertaken and increased contribution 12:39 12 minutes, 39 seconds from differentiated products should support gradual recovery in profitability over the coming quarters. 12:45 12 minutes, 45 seconds Uh with that now we are open for uh question and answers. 12:53 12 minutes, 53 seconds Thank you ladies and gentlemen. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 13:02 13 minutes, 2 seconds touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants 13:10 13 minutes, 10 seconds are requested to use their handsets while asking a question. 13:14 13 minutes, 14 seconds Ladies and gentlemen, we will wait for a moment while the question queue assembles. 13:20 13 minutes, 20 seconds We take the first question from the line of Sukrit Dartil from Eyesight Frade Private Limited. Please go ahead. 13:28 13 minutes, 28 seconds Good afternoon to the team. I have two questions. My first question is to Mr. 13:31 13 minutes, 31 seconds Surendra. What type of strategic levers are you prioritizing in FY2627 to expand uh the company's crop 13:39 13 minutes, 39 seconds protection crop protection portfolio strengthen distribution network across India and uh manage risk from regulatory 13:47 13 minutes, 47 seconds changes and raw material price volatility. That's my first question. I'll let my second question after this. Thank you. 13:54 13 minutes, 54 seconds All right. Uh so let me try to answer questions piece by uh for FI 2627 you 14:01 14 minutes, 1 second would like to know what our strategy would be to increase three crop protection portfolio. Uh in terms of a portfolio uh there are two things that 14:10 14 minutes, 10 seconds two actions that we are taking and which are important. Uh the first one is that over the overall while we have been taking the dipstick and feedback from 14:19 14 minutes, 19 seconds the farmers on the field uh there is a interest in bioroducts primarily bio stimulants and these are sort of growth 14:28 14 minutes, 28 seconds enhancers and improve the yield. Uh these products have been introduced. So currently we have introduced five new 14:36 14 minutes, 36 seconds products uh for FY 2627 and uh these products we hope will get good traction and will meet a farmer 14:45 14 minutes, 45 seconds needs. Uh while we introduced while we had not introduced a new segment for quite some time we felt this was the 14:53 14 minutes, 53 seconds right time to introduce bio stimulants into the market as these are important. 15:00 15 minutes The second point uh where we thought we would be increasing our product portfolio is on the introduction of new patented products. Uh so we will be 15:08 15 minutes, 8 seconds continuing to product we 15:16 15 minutes, 16 seconds are having a couple of new products in terms of and midcontent midcontent and midcontent. 15:25 15 minutes, 25 seconds Now the third area that we do see that there would be certain certain requirement and demand is in the area of 15:34 15 minutes, 34 seconds nanoua. Uh I think this gulf conflict will significantly impact the volatility 15:41 15 minutes, 41 seconds and pricing of ura. Uh as a part of this particular thing we have already got a patent. uh we are progressing into the 15:48 15 minutes, 48 seconds final stages of the completing of the registration on the on the URA on the URA nanura segment. 15:57 15 minutes, 57 seconds Now you had the second part of this question was on the distribution network. Now we 16:05 16 minutes, 5 seconds did grow our distribution network to around 10,000 10,000 plus we were hitting somewhere around 10,800 dealers 16:12 16 minutes, 12 seconds and distributors. Uh what we are seeing that is that while the distribution network is large, there are a lot of good distributors and there are a lot of 16:21 16 minutes, 21 seconds not so great distributors who delay in terms of both payments as well as who are not able to uh effectively manage 16:30 16 minutes, 30 seconds our sales and do proper distribution of our and keep our customers happy. So we are taking some conscious decision to be 16:39 16 minutes, 39 seconds able to identify and beat out non-performing dealers and you'll see our dealership network strengthening over a period of time. 16:50 16 minutes, 50 seconds Your third question was on the management of risk. Now the the two key risks which are going to impact not just 16:58 16 minutes, 58 seconds the agricultural sector, agrochemical and agricultural sectors are the gul conflict which is still dragging on 17:05 17 minutes, 5 seconds after approximately 88 89 days and this is leading to an increase in a 17:13 17 minutes, 13 seconds lot of prices primarily for solvents and formulation prices. 17:18 17 minutes, 18 seconds We are actively working on trying to see how we can actually uh adjust our 17:25 17 minutes, 25 seconds pricing which is which is very agile and uh if we see the prices dropping we will 17:32 17 minutes, 32 seconds be we will be equally uh in a position to pass on the benefits to the farmers but otherwise at this particular point of time we see there is an increase in 17:41 17 minutes, 41 seconds the prices. The second aspect which is major major risk that we see in this particular year is the effect of the 17:48 17 minutes, 48 seconds elino. So potentially while a lot of uh worry is there on the El Nino our understanding is that the El Nino will 17:56 17 minutes, 56 seconds quickly kick in somewhere between September and October of this year. Uh we are hopeful that the primary monsoon 18:04 18 minutes, 4 seconds or the sust monsoon for the current season will hopefully be not long. 18:12 18 minutes, 12 seconds We do probably becoming significant is post October 18:20 18 minutes, 20 seconds where potentially there would be a 2° plus increase in the healthy nose and this would impact the rubbish seasons. 18:27 18 minutes, 27 seconds So we are appropriately trying to be able to adjust our business to be able to take this this into account. Uh I 18:36 18 minutes, 36 seconds hope I was able to answer all your points. 18:39 18 minutes, 39 seconds Thank you. My second uh part of the question is to Mr. 18:44 18 minutes, 44 seconds uh what type of capital allocation and risk management frameworks have been applied in 26 27 I think we lost. 18:53 18 minutes, 53 seconds Sorry I need you to repeat the question. 18:57 18 minutes, 57 seconds Yeah. Yeah. My second question is addressed to Mr. Jin. Uh just want to understand a forward guidance on what type of capital allocation and risk 19:06 19 minutes, 6 seconds management framework have been applied in 27 to balance working capital requirement with funding for uh R&D in 19:14 19 minutes, 14 seconds new hyrochemical formulations. uh any hedge against forex and uh raw material 19:20 19 minutes, 20 seconds volatility and uh any uh liquidity buffers been put into place to uh sustain the seasonal demand cycles. 19:29 19 minutes, 29 seconds Thank you. 19:32 19 minutes, 32 seconds Yeah. Yes. Just to go one by one with respect to uh our earlier KEX. So we had 19:42 19 minutes, 42 seconds guided to say that we will do some sort of capeex but that as was previously mentioned in our board meeting that we 19:50 19 minutes, 50 seconds are postponing the newer capeex which we are supposed to do in our existing plant. So that we are keeping it on 19:58 19 minutes, 58 seconds hold. The other part is on the R&D front uh to bring this patented products obviously our R&D is uh keep on 20:07 20 minutes, 7 seconds continuing its work. So the general percentage what we spend on our R&D and the patents will continue which is for 20:15 20 minutes, 15 seconds our industry the percentage doesn't look very high but we continue to do it between around 1% or so. So we have 20:23 20 minutes, 23 seconds already filed close to 100 plus patents and we are hopeful to see at least two to three new patents coming at least for 20:31 20 minutes, 31 seconds the next 5 years. So for 2627 also we are going to launch three new patents uh and this will continue for next three to 20:39 20 minutes, 39 seconds five years. So with respect to RM volatility as uh we mentioned in our 20:45 20 minutes, 45 seconds speech the prime reason that the Q4 what was not as per our expectation because we thought in our earlier guidance that 20:53 20 minutes, 53 seconds Q4 will have pretty minimal losses. This was little on the higher side because we had stopped our sales uh for the branded 21:01 21 minutes, 1 second as well as B2B sales which we generally do it in March as a replacement uh uh till previous year. So we wanted to 21:10 21 minutes, 10 seconds capitalize on the situation wherein our existing inventories which we already had rather than selling at lower prices 21:17 21 minutes, 17 seconds in March where we don't have the clear picture of the prices we we thought we'll wait and sell closer to the 21:24 21 minutes, 24 seconds season. So we uh post that from immediately from first week of April we increase the prices of of most of the 21:33 21 minutes, 33 seconds material wherever the cost has gone up and later on uh for few of the other products we also increased in May. So we 21:42 21 minutes, 42 seconds have done two rands of price increase since we are aware that the uh prices are pretty volatile. Each and every 21:49 21 minutes, 49 seconds purchase order or each and every raw material what we procure is been properly scrutinized to see whether the same can be passed on into the market by 21:57 21 minutes, 57 seconds way of increasing the price. If we are able to do that then we are procuring else we are not going too aggressive on 22:04 22 minutes, 4 seconds products where we feel that you might end up buying high cost inventory and then 22:14 22 minutes, 14 seconds as not doing and not focusing because now we are just ahead of the season so 3 four months we would want to concentrate 22:21 22 minutes, 21 seconds on our sales so for the liquidity even the government is helping with respect 22:28 22 minutes, 28 seconds to 20% additional funding. So we might take some portion of it. We have already applied to the banks. For this portion 22:35 22 minutes, 35 seconds of the season, we'll be taking those uh uh funding from the banks which will take care of uh the coming season. 22:52 22 minutes, 52 seconds So does that answer all your questions? 22:55 22 minutes, 55 seconds Uh yes, I'll uh just connect back. I think uh we had a the connection was going in and out but but it's it's all 23:02 23 minutes, 2 seconds right. I appreciate and thank you and best best wishes. All right. Thank you. Thank you Mr. Thank you. 23:11 23 minutes, 11 seconds We take the next question from the line of KL from Gojun Capital. Please go ahead. 23:16 23 minutes, 16 seconds Yeah, thanks for the opportunity. Uh sir, I just wanted to I have basic questions. First thing how much of sales 23:23 23 minutes, 23 seconds are coming from the own manufacturing out of 100% how much is own manufacturing sales? 23:33 23 minutes, 33 seconds Yeah. So uh most part of it is coming from our own manufacturing because uh as we said the more we are going into 23:41 23 minutes, 41 seconds patented products the portfolio of patent product is growing. So presently our patent product portfolio has gone up 23:49 23 minutes, 49 seconds from 30% to 40% of our branded which almost uh entire formulation everything is done in our own factory. So as of 23:58 23 minutes, 58 seconds today almost between uh 60 to 65% of our sales are being produced in our own factories. 24:07 24 minutes, 7 seconds So 60 to 65% is total sales is coming from manufacturing right? Yes. 24:15 24 minutes, 15 seconds But then you say institutional sales is 40% of our revenue. So that is B2B right? 24:22 24 minutes, 22 seconds Yes. Yes. 24:23 24 minutes, 23 seconds So that is trading. Okay. And uh not no B2B. Just to clarify B2B is not entirely 24:32 24 minutes, 32 seconds trading because we have a technical manufacturing plant and information manufacturing plant. We do import and do 24:40 24 minutes, 40 seconds value addition before selling to other B2B players. So those are not necessarily pure trading but pure 24:47 24 minutes, 47 seconds trading would be less than 10% of our business. 24:51 24 minutes, 51 seconds Okay, that clarifies. So currently I just wanted to understand the manufacturing capacity we have. So how 24:58 24 minutes, 58 seconds much capital would we require to set up that whatever the manufacturing capabilities we have currently at this stage? What is that uh value? It is 200. 25:08 25 minutes, 8 seconds What is that value? Yeah. 25:16 25 minutes, 16 seconds own manufacturing setup mostly in the sense since we are in a seasonal business we see our capacity utilization 25:23 25 minutes, 23 seconds going up to 80 90% during the season and offseason we at around 50 60%. So just to answer if if it is our existing 25:32 25 minutes, 32 seconds manufacturing capacity suffising that's the question yes we are more than able to manufacture from our own 25:40 25 minutes, 40 seconds my question was if anybody wants to set up this manufacturing capacity how much capital would be required as of today 25:48 25 minutes, 48 seconds so if it is similar manufacturing capacity then it has to be at least 80 to 100 crores to set up uh uh similar 25:55 25 minutes, 55 seconds manufacturing facility okay I I just clarify I'll just clarify. Uh so when we talking about manufacturing 26:02 26 minutes, 2 seconds facility there are a little bit more nuances and details. So the first thing is that manufacturing facility is in 26:09 26 minutes, 9 seconds terms of a formulation where we are 100% doing our own formulation facility. So the final packing and the formulation is 26:17 26 minutes, 17 seconds all ours. Now the second part about is the the technicals. Now the technicals or the active ingredient part of it 26:25 26 minutes, 25 seconds requires a significantly large technical facility. Uh our uh technical facility was built up over a period of time and 26:33 26 minutes, 33 seconds you know the last at least six to seven years and it has gone through multiple rounds of expansion. 26:40 26 minutes, 40 seconds Now coming back to the point about you know if if I look at the end product which is which is sold to the consumer 26:47 26 minutes, 47 seconds and we try to figure out what percentage of the that end product is actually manufactured or require certain inputs 26:56 26 minutes, 56 seconds which come from outside. The inputs which come from outside are in form of either you might call it as a bottles or labels or you might call it as the 27:04 27 minutes, 4 seconds solvents or you might even call it as the raw materials which are used in the manufacturing process. some of the raw materials are suddenly imported from 27:13 27 minutes, 13 seconds China because India's chemical industry is not yet geared up to be able to supply all raw materials and that that's 27:21 27 minutes, 21 seconds where to a certain extent our imports come into the picture. Now no to be able to to be able to understand that you 27:29 27 minutes, 29 seconds know that we what we have been doing consciously over the period of years is that we have been able to try and bring in the manufacturing capability inhouse 27:38 27 minutes, 38 seconds and that is where Viki was mentioning that you know our patented products will be using newer molecules which we will 27:46 27 minutes, 46 seconds be manufactured inhouse in our technical manufacturing facility so that we have a much better control over both in terms 27:54 27 minutes, 54 seconds of quality our ability ility to be not dependent upon supply chains and insulate ourselves from completely you 28:01 28 minutes, 1 second know impossible to manage situations like the Gulf. 28:05 28 minutes, 5 seconds Understood. My another question is uh the currently the branded whatever we are doing right what are the margins and 28:12 28 minutes, 12 seconds working capital cycle there compared to institutional can you break up those also margins and working capital cycle for so between 28:22 28 minutes, 22 seconds Yeah. Yeah. So between uh branded and institutional for example if I take uh with respect to the the larger part 28:30 28 minutes, 30 seconds which is inventory and receivables. So inventory days for the branded is little higher it's anywhere between uh 120 to 28:39 28 minutes, 39 seconds 150 days and for the B2B business it is 90 to 120. With respect to receivables 28:46 28 minutes, 46 seconds again uh on the receivable side it is around 120 days and B2B side it is 90 days. So we have a gap of almost around 28:54 28 minutes, 54 seconds 50 60 days. If I com combine both the inventory as well as receivable days on the margin front there's a huge 29:03 29 minutes, 3 seconds difference. uh margin friend if I take branded the margin especially 29:10 29 minutes, 10 seconds portfolio now is uh so plus and on B2B we are on average at around 15 to 20%. 29:22 29 minutes, 22 seconds So sorry branded your voice was cut how much for branded on branded depending upon products but since our uh portfolio 29:30 29 minutes, 30 seconds of patent is going up we are on an average at around 40%. 29:35 29 minutes, 35 seconds Whereas on the B2B we at around 15 to 20%. 29:40 29 minutes, 40 seconds So this 40 gross margin you're talking about. 29:44 29 minutes, 44 seconds Yes. Yes. Gross margin. What is the VA margin in these two business? 29:48 29 minutes, 48 seconds [clears throat] 29:50 29 minutes, 50 seconds The VA margins uh again so it depends upon the kind of sales we are doing. For example, this year our sales were little 29:58 29 minutes, 58 seconds lower. If I have to tell you on the ideal situation that next year if we will perform if we are going to perform well and based on that sales number the 30:08 30 minutes, 8 seconds margins for the brand should be anywhere from 80 to 20% and on the B2B it should be around uh uh 8% or so. 30:19 30 minutes, 19 seconds Okay. Okay sir. If I understand your business right uh branded you want to do more because the margins are good but it 30:26 30 minutes, 26 seconds is little working capital heavy when compared to institutional sales. Now I see your balance sheet you have 30:34 30 minutes, 34 seconds receivables worth of 500 crores and the sales are roughly 1,000 crores. I mean 50% are into your receivables. 30:43 30 minutes, 43 seconds I mean you are in a deep trouble sir I would say because uh the banks won't lend you more and uh 30:52 30 minutes, 52 seconds for to grow and service the working capital you need more cash so I think and the receivables also if I deeply 31:01 31 minutes, 1 second check right over 6 months more than 200 crores are above 6 months and uh the possibility of write offs are also heavy 31:10 31 minutes, 10 seconds I mean you have to structure your balance sheet in order to save the company that's what I can read about the balance sheet whatever you have 31:18 31 minutes, 18 seconds uh any thoughts on those I mean so just to clarify on this business wherein if you are going in the B2C 31:27 31 minutes, 27 seconds segment especially on the retail so within B2C also there are different channels you can go up to big wholesalers and wholesaler and 31:34 31 minutes, 34 seconds distributors or you go into retailers now the retailers the behavior pattern is the the outstanding 31:43 31 minutes, 43 seconds comes at the lowest in the month of June and July. So they have an habit of paying just at the time of the season 31:50 31 minutes, 50 seconds and if you see March obviously you might look that it is little elevated but most of the payments comes by June because 31:58 31 minutes, 58 seconds they need to buy again for the next season. So this is not only for us anyone doing a dealer lowest level dealer kind of business they will face 32:06 32 minutes, 6 seconds the same thing the march will look higher it will look six 32:14 32 minutes, 14 seconds but you see my last three years my overall doubtful debts are just about 32:21 32 minutes, 21 seconds less than 7%. We not even 1% in my doubtful debts. So, so that logic to say 32:28 32 minutes, 28 seconds that 200 will suddenly become doubtful doesn't work because we generally collect most of it by the end of June 32:34 32 minutes, 34 seconds with respect to uh you asked one more point right uh on the bank side. So banks do understand because they don't 32:42 32 minutes, 42 seconds just see one single number during March because we are in constant touch with them and we are giving them the stock statements every month. So they see the 32:51 32 minutes, 51 seconds movements throughout the year. So once I submit for my June July they'll see that my outstanding especially the old 32:58 32 minutes, 58 seconds outstanding will be much lower and uh the the outstanding more than 180 months are anyway not considered by them 33:06 33 minutes, 6 seconds for the calculation. So based on that already we have uh enough liquidity uh in our system to to manage this. So this 33:15 33 minutes, 15 seconds happens as at a cycle in our business every year. 33:20 33 minutes, 20 seconds Okay. So you how much of this you would think that you have to write off you don't how much of the numbers currently 33:27 33 minutes, 27 seconds are in balance sheet uh you don't see how how much of the percentage you see as a write off that might happen 33:35 33 minutes, 35 seconds according to your base case estimate so last three years business if I take 33:42 33 minutes, 42 seconds we have just about put legal cases on around 22 crores worth of uh business 33:50 33 minutes, 50 seconds right so that is the and this is consolidated for three years so if you take these three years number and on the overall top line this is less than 1% of the 33:59 33 minutes, 59 seconds business so this cycle we continue that every time after one year we put a legal case but uh the previous year also I had 34:08 34 minutes, 8 seconds more than 200 crores which was more than 6 months it was rather 270 280 crores which was fully collected this year and 34:15 34 minutes, 15 seconds just about uh say 70 lakhs or 1 crores which actually goes into legal post July 34:22 34 minutes, 22 seconds that is what we evaluate and we go for legal cases if required. 34:27 34 minutes, 27 seconds So you see this receivables whatever over 6 months are there which will come towards this June July and in the 34:35 34 minutes, 35 seconds month's balance sheet we should see that number going down or again okay okay okay and I mean you have to 34:44 34 minutes, 44 seconds make sure that your balance sheet is strong for that you need more capital are we looking for any fund raise or rights issue so that we just get enough 34:52 34 minutes, 52 seconds capital to survive because the I mean if anybody leaves the they are just doubtful that is company going to 35:00 35 minutes survive or uh there might be black swan event in the going forward. So just from the investor perspective I wanted to 35:08 35 minutes, 8 seconds understand how management thinks about capital. Yeah 35:16 35 minutes, 16 seconds we are in a full-fledged production times. So our capital requirement is higher. So even at this present time if you see our utilization of the bank facilities it is it is at around 85 90%. 35:27 35 minutes, 27 seconds That means still 10% uh facilities we have which we can avail and we can uh utilize plus this 35:36 35 minutes, 36 seconds additional help which has come from the central government those also we will take and as and when we also start collecting advances from this May June 35:44 35 minutes, 44 seconds July from the customers. So you will see that the requirement goes up for the initial 6 months till September and once 35:52 35 minutes, 52 seconds the collection starts coming from September October the the loan balances also goes down. If you see my last three 35:59 35 minutes, 59 seconds years loan balances we have been constantly reducing it. So we have been uh and if you see my cash flow uh for 36:08 36 minutes, 8 seconds the year FI 20 FI 2526 even though we have made a profit of 8 crores after tax my cash flow from 36:17 36 minutes, 17 seconds operations is 90 crores so I had a cash flow I have a positive cash flow last year as well 36:25 36 minutes, 25 seconds but sir in the cash flows also I see you have not paid 260 odd crores that's why we are positive if you leave out that I 36:33 36 minutes, 33 seconds and that's not an healthy state. So cash flows wise it is doubtful but I just wanted to make sure that the management 36:39 36 minutes, 39 seconds is grounded and uh make sure that uh we are well capital funded and maybe if it 36:46 36 minutes, 46 seconds is required to do any rights issue or any fundraising also that would be give confidence to investors I would say 36:55 36 minutes, 55 seconds otherwise looking at the balance sheet the growth and uh investor confidence is very low right now. So yeah that's all 37:03 37 minutes, 3 seconds for my yeah yeah yeah Mr. So let let me just yeah conclude this discussion. So let 37:10 37 minutes, 10 seconds let us be you know fair enough to say that there you know we have been putting definitely putting uh steps to be able 37:17 37 minutes, 17 seconds to ensure that our balance sheet becomes better and better and uh to be able to ensure that you know we have a a path forward for growth. One of the points 37:26 37 minutes, 26 seconds that you mentioned and I think that is a relevant point is the fact that you know when you're doing on the B2C the payment cycles are very long and the reason is 37:34 37 minutes, 34 seconds very simple that you start from a raw material and then you make a technical and then you make a formulation and then you take it to the market and then you 37:41 37 minutes, 41 seconds wait for the power to the B2B cycles B2C cycles are quite long right previously the B2B B2B our B2B segment 37:50 37 minutes, 50 seconds was a little bit on the higher side and we were able to get money on a much more shorter cycle when compared to the B2C 37:59 37 minutes, 59 seconds cycle and and in essence it certainly helped us a lot. Now which is the reason 38:06 38 minutes, 6 seconds why this particular year you will see affect your 38:16 38 minutes, 16 seconds to do that is that we will be manufacturing certain active ingredients and technicals which will be available for B2B markets. 38:30 38 minutes, 30 seconds So this is this is one change in our strategy where we will be are looking at where we are trying to focus more on the manufacturing which is not just for capy 38:39 38 minutes, 39 seconds consumption but for a B2B segment and uh I am sure that you know without putting additional working capital stress we'll 38:47 38 minutes, 47 seconds be able to improve both our top line as well as our bottom line. 38:52 38 minutes, 52 seconds Okay. Okay sir. We we wish that we try and wish you all the best. 38:59 38 minutes, 59 seconds I mean, yeah, thanks for that. Yeah, thank you. Thank you. 39:05 39 minutes, 5 seconds Thank you. We take the next question from the line of Wun Sharma, an individual investor. Please go ahead. 39:14 39 minutes, 14 seconds Uh hello, I'm audible. Yes, Mr. 39:19 39 minutes, 19 seconds Uh so you have uh repeatedly missed the guidance each and every time. Uh even in 39:27 39 minutes, 27 seconds last quarter uh you mentioned we are trying Q4 to be uh without losses but 39:35 39 minutes, 35 seconds you have even doubled the losses compared to year onear and if you look at other listed uh 39:43 39 minutes, 43 seconds companies like Danuka, Dharaj etc. uh they have uh uh met the guidance as well as exceeded them. 39:52 39 minutes, 52 seconds So what would be your guidance like for the next financial year? 40:01 40 minutes, 1 second So uh Mr. Vun uh again for next year we are not giving any specific number uh on 40:08 40 minutes, 8 seconds the guidance part but whatever has happened in last two years where obviously difficult situation wherein 40:16 40 minutes, 16 seconds not only it was price crashes earlier in China or seasonal factors so we are like a startup wherein it's been just three 40:25 40 minutes, 25 seconds four years in the branded business where we are bringing newer products and trying to put our foothold in the 40:32 40 minutes, 32 seconds market. So obviously we are spending a little higher on the marketing and the numbers sometimes might not describe 40:39 40 minutes, 39 seconds what the efforts we are doing but yes uh what we feel is the the difficult phase should be over this year and next year 40:48 40 minutes, 48 seconds should be obviously a better number and for month of for this quarter where we had given a guidance that we'll have a little lesser loss because we had 40:57 40 minutes, 57 seconds already indicated Q4 is generally a softer quarter so it's not that some business would have come and uh and we 41:04 41 minutes, 4 seconds would have got higher profitability. We had guided that okay this is a softer quarter which we might have small profit or little loss but loss was higher 41:12 41 minutes, 12 seconds because it took a conscious decision not to sell our inventory. So since the prices were going up and we wanted to 41:20 41 minutes, 20 seconds take because earlier we lost because we had higher inventory and the price had crashed. So we wanted to take benefit as well this year to keep our inventory and 41:29 41 minutes, 29 seconds better to sell at higher price closer to the season rather than to show topline and to put higher numbers in Q4 41:39 41 minutes, 39 seconds and yes with respect to comparing with other companies what you have mentioned you're right to that extent that they have shown better numbers so generally I 41:48 41 minutes, 48 seconds feel that two reasons one is obviously they are much established players with more than 10 15 20 years of presence in 41:55 41 minutes, 55 seconds the market and we are just about four years in the branded business. The next part is many of them have capacities for 42:03 42 minutes, 3 seconds exports as well. So if you see Q4 is a season season for 42:12 42 minutes, 12 seconds India what happened commentary most of will will say that okay the local markets 42:20 42 minutes, 20 seconds obviously little softer and facing seasonal issues but yes they would have benefited on the export part and many of 42:28 42 minutes, 28 seconds them obviously would also would have done little better in local market because of their presence since 42:38 42 minutes, 38 seconds Uh sure sir but yeah like uh I would recommend one thing like uh every time 42:45 42 minutes, 45 seconds you are doing call like uh after half a quarter or if you see now you are doing 42:51 42 minutes, 51 seconds after 2 months. So it would better some discipline and uh 42:58 42 minutes, 58 seconds from the management and uh I have been investor in this company some 3 years. 43:05 43 minutes, 5 seconds So uh on a lighter note do you think I will get an exit? 43:17 43 minutes, 17 seconds Surely next year would be a better year that's what we can say. Yeah. Yeah. 43:21 43 minutes, 21 seconds Yeah. So I I I I think I think it has been a tough couple of years and you know we agree to that we agree to that and why we do not make a comment on the 43:30 43 minutes, 30 seconds market situation and other things. Uh be rest assured that one of the fundamental things is that you know in terms of an 43:37 43 minutes, 37 seconds IP portfolio in terms of your technicals in terms of the effort which is going on on the ground that is tremendous. Uh yes 43:45 43 minutes, 45 seconds it has been a little tough time that you know those numbers are not reflecting into our you know overall balance sheet or overall into the you know share 43:53 43 minutes, 53 seconds market sizing and other things but I I would I would say that you know there you know confidence that we have internally and that you know there are 44:02 44 minutes, 2 seconds better times which are coming and uh you know this this company will be something which will be a company to look out for. 44:09 44 minutes, 9 seconds Uh thank you sir. Wish you all the best. Thank you. Thank you. 44:16 44 minutes, 16 seconds Thank you. We take the next question from the line of Sakit Kapoor from Kapoor and Company. Please go ahead. 44:23 44 minutes, 23 seconds Yes, sir. Uh, namaskar sir. Hope I'm audible. Hello. Yeah. Yeah, Mr. S. Yeah. Yes. Yes, Mr. S. 44:31 44 minutes, 31 seconds Yes, sir. Thank you for the opportunity firstly and sir, I think so. uh you your answers uh have been inaudible to many 44:40 44 minutes, 40 seconds of us throughout the call in bits and pieces and have been repeatedly mentioned about by the speakers also and I just spoke to the operator also 44:49 44 minutes, 49 seconds mentioning that uh there has been uh various inaudible part of your in our conversation which you will see in the 44:56 44 minutes, 56 seconds recording itself. So many parts of the questions are not answers are not very clear to us. Uh Mr. I you were 45:04 45 minutes, 4 seconds mentioning about I think so some B2B business part of the aspect where which will be wherein we will be garnering uh 45:12 45 minutes, 12 seconds better margins uh going ahead for this year. So if you could just explain what how will this year be a different year 45:20 45 minutes, 20 seconds in terms of uh the the Mr. I missed your on the B2B. You are 45:28 45 minutes, 28 seconds mentioning that yes about B2B. What was your question on the B2B? 45:31 45 minutes, 31 seconds Sir, my my question is that how will be this year different uh in terms of you have mentioned that this will be a different year in terms of we we be 45:39 45 minutes, 39 seconds doing more of B2B work in terms of I think so the technical part uh and thereby we will be having a better uh 45:47 45 minutes, 47 seconds top line and bottom line. So if you could just explain to us uh how will that work out? 45:54 45 minutes, 54 seconds Sure. Sure. Sure. So, so, so one of the so we have uh been trying to uh you know mold our manufacturing facilities and 46:03 46 minutes, 3 seconds our complete production line to be able to meet the requirements of the brand 46:11 46 minutes, 11 seconds business uh to be able to so fundamentally certain strategies were there in terms of reducing our 46:18 46 minutes, 18 seconds dependence on China reducing our dependence on raw materials and one of the strategies is that the whole last appear that we did which was 46:27 46 minutes, 27 seconds on the R&D end for to chromosone um extremely great molecule with great pricing which started off at somewhere 46:35 46 minutes, 35 seconds around $150 per kg uh but but price crash like anything for that particular molecule. So this particular strategy of 46:44 46 minutes, 44 seconds being a feeder channel for the brand business and for the patented portfolio was one way to look at it. This year we 46:53 46 minutes, 53 seconds are diversifying a little bit from being only the figure for the business and being a provider to other companies also 47:02 47 minutes, 2 seconds in terms of certain important and key technicals and we hope to be able to get some uh good business in this particular 47:09 47 minutes, 9 seconds front and uh that is some that's a little difference in our strategy. uh I had mentioned also that you know there 47:16 47 minutes, 16 seconds were around four new offetented molecules that we had been working on for the whole of last year and R&D was 47:24 47 minutes, 24 seconds able to succeed in the synthesis methods of these four molecules. Uh these four molecules will be in production in fact 47:31 47 minutes, 31 seconds in fact they're already getting produced in this particular Q1. We hope to accelerate the production of these new molecules into Q2 and going forward into 47:40 47 minutes, 40 seconds Q3. uh this new molecules will open up B2B segmented B2B opportunities for us. 47:47 47 minutes, 47 seconds Uh we we will try to capitalize on that and uh B2B generally has a very fixed uh 47:55 47 minutes, 55 seconds payment schedule and uh that should help us uh the help the business in all aspects. 48:03 48 minutes, 3 seconds Right? 48:04 48 minutes, 4 seconds I hope I was able to answer your question. 48:07 48 minutes, 7 seconds Thank you sir. But uh as my earlier participant friend has also mentioned 48:13 48 minutes, 13 seconds and for for investors like us uh there there has been only disappointment all throughout the last two years in in 48:21 48 minutes, 21 seconds understanding and modeling out what can a company like best agro delivered in terms of uh financial results. So uh 48:30 48 minutes, 30 seconds even even this time also we were not expecting uh uh uh these numbers but anyway sir uh two points from Janta. 48:38 48 minutes, 38 seconds Number one, you mentioned that we hold on to our sales uh for for the last some part of March which has resulted in our 48:46 48 minutes, 46 seconds sales uh uh not happening to to the tune of 50 to 70 K. So that is what is getting uh uh deferred to the next 48:55 48 minutes, 55 seconds quarter or that how will that work out and secondly uh yes of course you answer. 49:03 49 minutes, 3 seconds Yeah sak I just missed your last 10 seconds because again there's network issue going on. 49:09 49 minutes, 9 seconds Ah so I was just asking you sir that you mentioned that for the month of March some period we we stopped our sales 49:16 49 minutes, 16 seconds because of I think so higher pricing price revisions which we were expecting for the month of April onwards. So 49:23 49 minutes, 23 seconds taking that into factor that sales have been deferred to the first quarter. So first quarter would see a better uh uh 49:31 49 minutes, 31 seconds uh uh top line in in that sense or how will that sales deferment will translate into or 49:38 49 minutes, 38 seconds so yes both with respect to top line as well as bottom line we'll see better numbers because only the prices have 49:46 49 minutes, 46 seconds been increased and the placements which have started are at newer prices. So you'll see a better uh both in terms of turnover as well as profitability. 49:58 49 minutes, 58 seconds Okay. And in terms of third sales return, how have that factored in? I think so when when we spoke earlier 50:05 50 minutes, 5 seconds third quarter, you said that uh rather you mentioned to us that we have done majority of the 50:12 50 minutes, 12 seconds uh provision sales provision and now we won't be expecting any any more of the same for the fourth quarter or some some 50:19 50 minutes, 19 seconds bit of in that sense only. So how have worked out for the fourth quarter? 50:27 50 minutes, 27 seconds Yes. So sales return as compared to because we faced huge challenge in 2425. 50:33 50 minutes, 33 seconds We didn't wanted to face same issues in 2526. So we had singened our policies a little bit. So that's also one of the 50:41 50 minutes, 41 seconds reason you saw that our generic portfolio went down a little bit uh as compared to our patent portfolio because we were not placing heavily and taking 50:48 50 minutes, 48 seconds it back. So the sales return uh as a percentage uh came down by uh 10%. So earlier we were close to 20 and 30% of 50:57 50 minutes, 57 seconds sales return. Presently we are at around 20 21% of sales return and uh we are pretty comfortable at this and 51:06 51 minutes, 6 seconds continuing we will try to uh go down less than 20% for the next year. So sales return we have been able to 51:14 51 minutes, 14 seconds achieve our objectives also. Other two which we have planned was the opex reduction. they also we reduced close to 15% of our office. 51:24 51 minutes, 24 seconds Okay sir only hypothesity if we have even factored that 50 cr sale number our losses would not have trimmed uh to a 51:33 51 minutes, 33 seconds larger extent means I want to only understand the quality qualitative aspect of this 48 cr rupees uh loss if I 51:41 51 minutes, 41 seconds if I take the depreciation out of it it's it is still a 38 cr number 51:46 51 minutes, 46 seconds so how should one explain yeah please yes so this 507 70 crores would have 51:54 51 minutes, 54 seconds clearly bought us uh considering both branded as well as our uh B2B segment 52:03 52 minutes, 3 seconds would have brought anyways around uh 20 to 23 crores of profit. 52:09 52 minutes, 9 seconds So anywhere uh now now I cannot hear you sir it is 52:15 52 minutes, 15 seconds going in for 37 get done 37 would have been less than 15 crores 52:25 52 minutes, 25 seconds or so it should have sold this 50 to 70 crores of sales. 52:34 52 minutes, 34 seconds Thank you ladies and gentlemen. We take that as the last questions. I now have the conference over to Mr. Sarendra Sai for his closing comments. 52:50 52 minutes, 50 seconds Uh thank you all for uh taking part in the FY26 uh earnings call. 52:57 52 minutes, 57 seconds Uh thank you for the valuable questions and continued support. Uh let me let me be very frank. uh despite the 53:04 53 minutes, 4 seconds challenging FI26 uh we remain focused on improving profitability and uh strengthening our operational efficiency 53:13 53 minutes, 13 seconds uh we are scaling upon the differentiated product portfolio and uh we remain confident that the strategic 53:22 53 minutes, 22 seconds and tactical actions that we are undertaking during the year will definitely lead us to a stronger and more sustainable performance. Uh thank 53:30 53 minutes, 30 seconds you all for joining us today. Thank you. 53:36 53 minutes, 36 seconds Thank you on behalf of Best Agro Life Limited. That concludes this conference call. Thank you for joining us.