Nath Bio-Genes Ltd — Q4 FY26

Nath Bio-Genes (I) Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=iQa1c2v3Cfg Published: 8 days ago

0:03 3 seconds Good afternoon ladies and gentlemen. I am Akash moderator for the conference call. Welcome to Nad by your jeans Limited Q4 FI26 earnings conference 0:12 12 seconds call. As a reminder, all participants will be in listen only mode and there'll be an opportunity for you to ask questions after the presentation 0:20 20 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchtone telephone. Please note this conference is being recorded. 0:31 31 seconds I would now like to hand over the floor to Miss Deepika from Go India Advisor. Thank you and over to you ma'am. 0:38 38 seconds Thank you Akash. Good afternoon everyone and welcome to the Q4 FY26 earning call of smart biogenate. 0:46 46 seconds We have on the call Mr. Satish Kagiwal managing director, Dr. Dinda Kurana, executive vice president, Mr. Amul Gupta, chief financial officer, Mr. 0:56 56 seconds Drish Pande sales lead Dr. Vantitesh Kulkani research lead. We must remind you that the today's discussion may 1:04 1 minute, 4 seconds include certain forward-looking statements and must be therefore viewed in conjunction with the risk that the company faces. May I now request the 1:11 1 minute, 11 seconds management to take us through the financial and business outlook subsequent to which we will open the floor for Q&A. Thank you and over to you sir. 1:27 1 minute, 27 seconds Okay, thank you Deepika and a very good afternoon to everyone. 1:34 1 minute, 34 seconds Welcome to our Q4 and financial year 26 earning responses call. 1:39 1 minute, 39 seconds Financial year 26 has been the year of purposeful growth. 1:43 1 minute, 43 seconds one where our strategies are translated into tangible results and where the trust that farmers partners and investors place in us has been well rewarded. 1:56 1 minute, 56 seconds Before I speak about our own performance, I would like to set the context to the broader industry landscape because I believe it 2:03 2 minutes, 3 seconds reinforces why the Indian seed sector and NA in particular presents such a compelling long-term opportunity. 2:14 2 minutes, 14 seconds India is the world's fifth largest feed market valued at approximately 4 to 4.5 2:22 2 minutes, 22 seconds billion US and is expected to grow at a caggr of 12 to 14% for the next 5 years 2:30 2 minutes, 30 seconds with over 140 million hectares under cultivation and the government of India's push towards agriculture 2:37 2 minutes, 37 seconds modernization sement rates which are currently below 30% for several crops represent a significant structural 2:46 2 minutes, 46 seconds growth opportunity for quality feed countries. 2:51 2 minutes, 51 seconds The union budget financial year 26 contribute to strong pro agricultural staff with enhanced allocation to PMIAN 3:00 3 minutes natural farming missions and the digital agriculture mission. The government's focus on increasing crop fields per 3:07 3 minutes, 7 seconds hectar through the high quality hybrid feeds is a direct tailwind for companies 3:13 3 minutes, 13 seconds like smart. Additionally with Indian government's push to double farm income and the growing acceptance of hybrid 3:21 3 minutes, 21 seconds technology patty maze and vegetables we believe the inflection point for free adoption is accelerating. 3:31 3 minutes, 31 seconds Climate change remains the definite challenge for Indian agriculture. 3:37 3 minutes, 37 seconds Iratic monsoons, shifting place patterns and extreme weather events have made farmers acutely aware of the need for resilient disease resistant fields. 3:50 3 minutes, 50 seconds This is precisely where's decades of R&D investment and our DSI recognized 3:57 3 minutes, 57 seconds innovation centers create a durable competitive advantage. 4:03 4 minutes, 3 seconds Our ability to developic products suited to diverse climatic conditions is what makes NA a trusted partner for the farming community. 4:15 4 minutes, 15 seconds our strategic progress in financial year 26. At the heart of everything we do is a simple yet powerful mission to support farmers with fields they can rely on. 4:27 4 minutes, 27 seconds And it is our strong focus on research and innovation that makes this possible. 4:32 4 minutes, 32 seconds Our scientists continue to strengthen our platform and create habits that are not only high yielding but also offer 4:40 4 minutes, 40 seconds better resistance against diseases and pests. Our green product basket continues to perform well. Our flagship 4:49 4 minutes, 49 seconds problems Nat and Jumbo once again led the charge with the with improved 4:56 4 minutes, 56 seconds realization reflecting strong farm acceptance and product superiority. 5:02 5 minutes, 2 seconds PT volumes also grew significantly reaffirming uh leadership in this key. 5:10 5 minutes, 10 seconds uh strategic focus on diversification is uh meaningful foods. Patty volumes rose 35% yearonear and the cotton patt 5:19 5 minutes, 19 seconds combined portfolio now contributes 58% of our revenue mix up from 52% last year 5:26 5 minutes, 26 seconds a strong indicator of deepening penetration in our core crops within our non-cotton nonpar segment 5:34 5 minutes, 34 seconds maze emerged as the star performer of financial 36 volume surged 54% yearon year with value rose of 78%. 5:44 5 minutes, 44 seconds Maze now contributes more than 10% to our top line making it the highest growth crop in the non-c nonpar segment. 5:52 5 minutes, 52 seconds This validates our deliberate investment in this category and we see significant headroom to scale further. India's maze 6:00 6 minutes demand driven by poultry stars and ethanol industries is growing rapidly and we are well positioned to capture this opportunity. 6:10 6 minutes, 10 seconds Friends, on the international front, financial statistics marks a historic milestone for N. A joint venture in 6:18 6 minutes, 18 seconds Bakistan contributed 1.6 billion US to our top line for the very first time, a 6:25 6 minutes, 25 seconds landmark achievement in our global expansion journey. Marketing of SE is currently underway. 6:32 6 minutes, 32 seconds results are encouraging and depending on how decision plays out, we intend to replicate this model in neighboring geographies. 6:41 6 minutes, 41 seconds We remain cautiously optimistic about certain African markets as geopolitical conditions stabilize. Our infrastructure 6:49 6 minutes, 49 seconds backbone has been significantly strengthened with state-of-the-art cold storage units, warehouses and 6:57 6 minutes, 57 seconds conditioning godowns with accumulative capacity of 25,000 metric tons combined with our scientific team's 7:05 7 minutes, 5 seconds expertise and the depth of our plasma ni is well positioned for sustained leadership in the Indian field industry. 7:14 7 minutes, 14 seconds Now I'll come to outlook for financial year 37. Looking ahead, we are excited about the opportunities that lie before 7:20 7 minutes, 20 seconds us. A pipeline of new priorities across cotton, patty, maze, vegetables, and the non-cotton, non-patty segment is robust. 7:30 7 minutes, 30 seconds We will continue to invest in R&D, expand our distribution network, deepen farmer engagement and pursue 7:38 7 minutes, 38 seconds international growth agenda with stronger focus and rigor. 7:43 7 minutes, 43 seconds The Indian seal industry at a is at an inflection point even by rising farmer awareness, government support for hybrid 7:52 7 minutes, 52 seconds adoption and growing demand for food security. I want to express my deepest gratitude to all our stakeholders, our 8:01 8 minutes, 1 second farmers, employees, channel partners and investors for their continued trust and belief in North. We remain steadfast in 8:09 8 minutes, 9 seconds our commitment to delivering consistent value, investing in innovation and building a business that creates enduring impact. 8:20 8 minutes, 20 seconds Friends, with that, I would now like to invite Mr. Abula, our CFO, to share the financials and operational highlights for quarter 4 and financial year 26. 8:31 8 minutes, 31 seconds Thank you. 8:36 8 minutes, 36 seconds Thank you, Mr. viewers and good afternoon everyone. 8:40 8 minutes, 40 seconds Thank you for joining and taking some time to join us today. Our earnings presentation has been uploaded on the 8:49 8 minutes, 49 seconds stock exchanges and I hope you have had the chance to go through it. 8:56 8 minutes, 56 seconds Before we dive into the detailed credentials, I would like to quickly walk you through some of the key operational highlights from FY26. 9:07 9 minutes, 7 seconds We are making steady and accelerating progress on our strategy to strengthen and diversify our crop portfolio. 9:18 9 minutes, 18 seconds BD bottom we have sold 13.8 eight lakhs packets during FI26 9:26 9 minutes, 26 seconds registering a 22.35% bio volume growth and 28% value growth 9:34 9 minutes, 34 seconds driven by strong demand for our flagship hybrids sank and jumbo production stability is expected to 9:43 9 minutes, 43 seconds continue over next two to three years 9:48 9 minutes, 48 seconds a crop for us patt volume grew 25% y to 75,619 9:57 9 minutes, 57 seconds filters with value growth of 37%. 10:02 10 minutes, 2 seconds The cotton patty combined portfolio now accounts for 58% of our revenue mix up 10:11 10 minutes, 11 seconds from 22 52% in FY25. 10:16 10 minutes, 16 seconds a testament to our strengthening market position in these critical crops. 10:22 10 minutes, 22 seconds Maze Mae was the standout performer of FY26 10:30 10 minutes, 30 seconds volume surged 54% YI to 9,639 quals with value growth of 78%. 10:41 10 minutes, 41 seconds Maze now contributes 10.72% to our top line making it the highest growth crop in the NCB segment. 10:52 10 minutes, 52 seconds This reflects our deliberate focus on expanding in high potential categories. 10:59 10 minutes, 59 seconds vegetable seeds while value were down by almost 11%. 11:05 11 minutes, 5 seconds Average realization improves by 6% from 1,178 11:12 11 minutes, 12 seconds rupees to 1,244 rupees per kg reflecting a conscious pure toward 11:21 11 minutes, 21 seconds higher value remain products. We continue to invest in scaling high 11:27 11 minutes, 27 seconds potential products in this segment plant nutrition segment. 11:34 11 minutes, 34 seconds The segment saw a decline of 18%. 11:38 11 minutes, 38 seconds This is mainly due to China export restrictions which disturb supply dynamics. We expect this to normalize in 11:47 11 minutes, 47 seconds the coming year as supply side pressure is Usbakistan 11:54 11 minutes, 54 seconds international milestone. FY26 marks the first year our Usbakistan JB contributed 12:02 12 minutes, 2 seconds almost rupes 15 crores to our consolidated topline. a landmark achievement in our international 12:10 12 minutes, 10 seconds expansion journey and a strong validation of our global growth strategy. 12:17 12 minutes, 17 seconds Now coming to financial performance for FYI 26 12:24 12 minutes, 24 seconds in FI26 the total revenue stood at rupes 4316 12:30 12 minutes, 30 seconds millions reflecting a strong 19% Y growth a clear testament to the momentum 12:39 12 minutes, 39 seconds we are building across our core and diversified crop segments gross profit 12:46 12 minutes, 46 seconds grew by 5% Y to rupees 2,43 million maintaining a healthy gross margin of 56%. 12:56 12 minutes, 56 seconds The year saw a measured normalization of gross margin from the elevated 63% in 13:04 13 minutes, 4 seconds FY25 preliminary due to a richer product and market mix. Our underlying pricing discipline remain intact. 13:16 13 minutes, 16 seconds ITA for the year stood to rupees 525 million with a 12% margin. 13:25 13 minutes, 25 seconds Profit before tax after adjustment of exceptional items grew by 11% YI to 13:33 13 minutes, 33 seconds rupees 491 million for the year demonstrating consistent improvement in bottom line performance. 13:43 13 minutes, 43 seconds PAT for the FY26 stood at rupees 384 million with a PAT margin of 9%. 13:52 13 minutes, 52 seconds It is important to note that the prior year P benefited from a lower effective tax rate of 5% versus 11% this year. 14:04 14 minutes, 4 seconds Adjusting for this normalization, the underlying PAT performance remain healthy. 14:12 14 minutes, 12 seconds EPS improved to 23 rupees 42 pesa a more than 2x increase from rupees 11.3 pesa 14:20 14 minutes, 20 seconds in FY22 reflecting substain and compounding value creation over the past 5 years 14:31 14 minutes, 31 seconds total asset grows to rupees 10,829 million 14:37 14 minutes, 37 seconds cash and bank balance stood at 77 7 million inventory increased to 4,446 14:47 14 minutes, 47 seconds million of rupees in line with our planned scaled up for the upcoming season 14:54 14 minutes, 54 seconds reflecting our confidence in FY27 demand. 14:58 14 minutes, 58 seconds Trade payables also moved up to rupees 1,35 million as we ran production ahead of the season. 15:09 15 minutes, 9 seconds Finance cost increased to rupes 133 million from 96 million in FY25 reflecting our deliberate working 15:18 15 minutes, 18 seconds capital investment to fuel the inventory build for FY27. 15:24 15 minutes, 24 seconds We remain focused on efficient working capital management as volume scales. 15:32 15 minutes, 32 seconds Now I would like to take you to see our five years track record. 15:39 15 minutes, 39 seconds It is worth stepping back and reflecting on the journey over the past five years. 15:45 15 minutes, 45 seconds Revenue has grown from rupes 2783 million 15:52 15 minutes, 52 seconds in FY22 to 4,316 million in FY26. 16:00 16 minutes A 55% cumulative increase. 16:03 16 minutes, 3 seconds IA has expanded from rupes 373 million to rupees 525 millions. 16:12 16 minutes, 12 seconds EPS has more than doubled from rups 11.3 to 23.42. 16:18 16 minutes, 18 seconds This consistent compounding is a reflection of quality of our business model and the discipline of our execution. 16:29 16 minutes, 29 seconds All in all, FY26 has been a year of meaningful operation and there there was a very good 16:37 16 minutes, 37 seconds operational progress and strategic expansion. 16:42 16 minutes, 42 seconds We delivered strong revenue growth of 19% a landmark 16:49 16 minutes, 49 seconds milestone outstanding volume traction in maze and padding our infrastructure R&D capability and 16:58 16 minutes, 58 seconds distribution network position are strongly for sustained quality growth in FY27 and beyond 17:05 17 minutes, 5 seconds with our robust product pipeline deepening farmer relationships growing global footprint Friends and a committed 17:13 17 minutes, 13 seconds team, we enter FI27 with confidence and purpose. 17:19 17 minutes, 19 seconds With that, I will now open the floor for the questions. Thank you. Thank you, sir. 17:28 17 minutes, 28 seconds Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star and one on your telephone keypad and wait 17:36 17 minutes, 36 seconds for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing star and one again. 17:46 17 minutes, 46 seconds Ladies and gentlemen, if you have any questions, please press star and one on a telephone keypad. 17:56 17 minutes, 56 seconds The first question is from the line of Mr. Deepish Saniti from Mana Finance. Please go ahead. Hi, am I audible? 18:04 18 minutes, 4 seconds Yes sir. 18:06 18 minutes, 6 seconds Yeah. uh congratulations and uh the Usuzbekistan Usbakistan uh contributed about 15 crores to the top line for the 18:15 18 minutes, 15 seconds first time. What crops are being sold and what is the JV structure and what is the revenue target from Usbakistan over the next two to three years? 18:26 18 minutes, 26 seconds Okay, I'm Dr. Kurana. Let me answer that question. 18:30 18 minutes, 30 seconds Usbakistan. We had gone as a special gesture for the government of Usbakistan 18:36 18 minutes, 36 seconds to set up cotton production in that particular area. 18:42 18 minutes, 42 seconds Usbakistan cotton production is still not uh BT type. They are still on the regular uh production. So we are trying 18:50 18 minutes, 50 seconds to introduce our hybrids down the line for which Dr. Kularn is putting in some special effort. 18:58 18 minutes, 58 seconds Now we have been there for 2 years. This is our third year and uh this is the first time we were able to sell whatever 19:05 19 minutes, 5 seconds we had produced last year or we had exported from India last year. So as of today 15 cr was only a beginning if I 19:14 19 minutes, 14 seconds can conclude that and uh down the line we have not yet put in any targets financially. Maybe by next year the 19:23 19 minutes, 23 seconds acceptability of the products will be known because whatever is sold will be grown this year and depending upon that 19:31 19 minutes, 31 seconds maybe we will actually set up a growth target. But let me assure you that this is a good opportunity for the international step of the company. 19:42 19 minutes, 42 seconds No but how big I just wanted to know how big is the market uh of Usbakistan and how much of it we can take it in the next two to three years. We must have 19:51 19 minutes, 51 seconds done some working when we went I mean we since we are there inistan for about two to three years 20:00 20 minutes sorry doctor yes sir uh yeah yeah yeah uh the we are now uh 20:09 20 minutes, 9 seconds into sales of cotton seeds there uh uh cotton market is about $und00 million 20:16 20 minutes, 16 seconds worth and alltogether uh like uh cereals and other uh crops together. It is about 20:24 20 minutes, 24 seconds uh a $450 million market. It is one of the uh whole of Central Asia. This company is for whole of Central Asia. uh 20:33 20 minutes, 33 seconds uh the the whole of Central Asia together might uh reach about a billion dollar market size in the coming five to 20:41 20 minutes, 41 seconds six years because of the government's intervention for quality seeds and uh open market opening for new seed companies and new technologies. 20:53 20 minutes, 53 seconds Great. 20:55 20 minutes, 55 seconds So, so your question now your question of how much we can achieve in next two to three years was it is almost a 500 21:04 21 minutes, 4 seconds million market. Let us first get established and then we can talk of our targets. 21:11 21 minutes, 11 seconds So similar on similar lines just wanted to understand what percentage of our revenues do we aspire to derive from the 21:18 21 minutes, 18 seconds international operations over the next 3 to 5 years not more than 10 to 15%. 21:26 21 minutes, 26 seconds Not more than 10 to 15%. No not yet. 21:30 21 minutes, 30 seconds Okay. So uh so we don't see that in the next uh 5 years we will not do more than 21:37 21 minutes, 37 seconds 100 crores from uh uh the international business 21:44 21 minutes, 44 seconds when so you are expecting that my company top will be 1,000 crores. 21:51 21 minutes, 51 seconds Yes. 21:54 21 minutes, 54 seconds And in that case uh yes 100 to 150 cr 10 to 15. 22:06 22 minutes, 6 seconds It is always better to undercommit and overperform. So we are being conservative because we are just getting settled there. 22:15 22 minutes, 15 seconds I'm ask that's why I'm asking for a long-term perspective like you know what will be our targets? I mean I'm sure you want to uh you know lower the but 22:25 22 minutes, 25 seconds I would like to I would like to I would like to say something on this. 22:29 22 minutes, 29 seconds Uh actually last year we had some field performances demos and uh based on that uh we were able to sell this time very 22:37 22 minutes, 37 seconds good quantity and honestly speaking this is the first year wherein our product has gone out to a very large scale in 22:45 22 minutes, 45 seconds different provinces. Last year we did only in two provinces of this. So with this what has happened is that this year 22:52 22 minutes, 52 seconds will give us a complete picture on how it goes. So I endorse Dr. Kurana's statement on that. Uh because it's a new 23:02 23 minutes, 2 seconds territory, new products and or new innovations are being there. Uh uh probably this question uh on Central 23:09 23 minutes, 9 seconds Asia we can answer in the next year's meeting I think. 23:14 23 minutes, 14 seconds Okay. Okay. Uh fine the so can you provide the revenue and eida guidance for fi27 I mean what will be the volume 23:23 23 minutes, 23 seconds growth assump assuming I mean assumptions across the key crops cotton be patty and maze 23:31 23 minutes, 31 seconds we have maintained a conservative line on cotton but I have always said that the cotton will be growing around 20%. 23:39 23 minutes, 39 seconds It has proved uh what I made the statement last year it has grown to 22%. 23:45 23 minutes, 45 seconds As far as Patty is concerned, Patty has also grown beyond 20 25%. 23:53 23 minutes, 53 seconds And um May has given us the biggest booster uh this year. So we expect the 24:01 24 minutes, 1 second top line to be growing between 15% to 20% around that time that time and I'm again being conservative 24:09 24 minutes, 9 seconds but 15% hopefully yes and a bit margin would be maintained with the slightly upward trend in uh uh AIA as well as in the net profit margin. 24:22 24 minutes, 22 seconds Uh sir this is in spite of this year being uh I mean uh we India might be affected by El Nino 24:33 24 minutes, 33 seconds uh El Nino say two things I what I would like I would like to speak on that 24:41 24 minutes, 41 seconds yeah no yeah Elno definitely has an impact on entire agriculture 24:48 24 minutes, 48 seconds and uh it affects differently in different uh crops, different geographies but uh what growth we are 24:56 24 minutes, 56 seconds talking about is a balanced growth that we are talking about despite of alo despite of uh there could be crop shift 25:05 25 minutes, 5 seconds crop changes there could be geographical shift there could be delay in planting there could be things of that kind but when it comes to seed sales we'll 25:13 25 minutes, 13 seconds maintain our uh maintain our growth pattern overall uh in in terms of all the crops put together in terms of 25:21 25 minutes, 21 seconds volume growth is that okay does Dr. Kurana want to add on this on the especially on the elino. 25:31 25 minutes, 31 seconds Uh El Nino is an environmental thing. Yeah, we have 25:38 25 minutes, 38 seconds faced certain conditions in the past also. 25:41 25 minutes, 41 seconds So I have always maintained the statement that N biogen tries to place itself 25:48 25 minutes, 48 seconds all over where it can sell so that the monsoon effect can be contravened from place to place. 25:58 25 minutes, 58 seconds It makes me spread thin. 26:01 26 minutes, 1 second I need more territories and more data for that matter. But the end result is that our top line is always protected. I 26:10 26 minutes, 10 seconds may take a beating on the bottom line but then once the top line gets maintained the bottom line always follows that's the principle of pin. So 26:19 26 minutes, 19 seconds we are prepared like was Mr. Satish Kagali said that we try to balance our products. We try to balance our areas of 26:28 26 minutes, 28 seconds sales. We try to balance our production also for that matter and we hope to achieve what we commit to achieve. 26:40 26 minutes, 40 seconds Right. Right sir. uh and uh how how how are we placing I mean how are we preparing for El Nino if there is any 26:47 26 minutes, 47 seconds because uh that might affect our trade receivables or even uh the demand to 26:54 26 minutes, 54 seconds some extent we actually we are we are dealing with 27:01 27 minutes, 1 second people uh I'll ask Harishi also to intervene here we are dealing with uh dealers distributors growers who are 27:10 27 minutes, 10 seconds with us for many many many years and uh there is hardly anything that we feel 27:17 27 minutes, 17 seconds may go wrong. We only supply what is technically being sold. We uh trace the 27:25 27 minutes, 25 seconds products right till the point of uh growing. So normally spreading the market is uh the forte that is being 27:34 27 minutes, 34 seconds done by Mr. Harish Pande. I would like him to add something more to this please. 27:38 27 minutes, 38 seconds Yeah good. uh I can also see yeah see see it's not a first year where we are talking about alen no and others 27:46 27 minutes, 46 seconds right we are talking with about with about elen low since 2 3 years right so all the times wherever we plan we plan 27:55 27 minutes, 55 seconds at least one year before further production whenever we plan we always see what can goes wrong so this part is 28:02 28 minutes, 2 seconds also been taken care since the preparation of production right so we know what can goes wrong So accordingly the preparation has been made and 28:11 28 minutes, 11 seconds definitely if such a thing comes we are in a position to do better than the industry. Whatever industry do we may do better than the industry. 28:21 28 minutes, 21 seconds Uh uh can I have a small word? Yeah. 28:26 28 minutes, 26 seconds Yeah. Uh Lo impact predicted is about 90 92% of the rainfall. 28:32 28 minutes, 32 seconds uh that mean to say uh wherever the infest crops are there the impact is more rainfed crops in India more are 28:39 28 minutes, 39 seconds pulses and oil seeds and part of the rice so in all these three crops we are not there 28:46 28 minutes, 46 seconds uh delayed sewing might be one of the uh uh prediction whenever the so uh uh sewing gets delayed cotton becomes most 28:55 28 minutes, 55 seconds predominant crop there so in all these uh facets together uh we are in right positioned and our products 29:03 29 minutes, 3 seconds are right positioned they will not get impacted by uh ill you know impact 29:10 29 minutes, 10 seconds we have a variety we see we are not dealing with one kind of you know this thing right we are dealing with the long duration hybrid we are dealing with the 29:18 29 minutes, 18 seconds medium duration we are dealing with the short duration so whatever uh things goes as per the situation we change our 29:27 29 minutes, 27 seconds strategy to overcome all these mishapings Great sir. Uh give a great 29:36 29 minutes, 36 seconds understanding. Thank you so much sir and all the very best. Okay. Thank you so much sir. 29:45 29 minutes, 45 seconds Ladies and gentlemen, if you have any questions please press star N1 on a telephone keypad. 29:53 29 minutes, 53 seconds I repeat if you have any questions please press star N1 on a telephone keypad. 30:01 30 minutes, 1 second The next question comes from the line of Mr. Ronak from Alpha Advisor. Please go ahead sir. Uh thank you so much sir. Uh am I audible? 30:10 30 minutes, 10 seconds Yes please. Yeah. So I have basically two questions. 30:13 30 minutes, 13 seconds The first one is are there any planned capex investment for FI27 in processing capacity cold storage or new geographies and what is the total capex budget? 30:26 30 minutes, 26 seconds Uh I think we can answer both in one line only. Okay. 30:30 30 minutes, 30 seconds As a matter of policy, as a matter of strategy, NAR has not been investing much in capexes. 30:37 30 minutes, 37 seconds If you go through my balance sheet, so you would find that we have only land bank as capex and we also have vehicles as capex because which we need for 30:46 30 minutes, 46 seconds ensuring sales, production and things like that. But investing monies in processing plants and stoages we are 30:54 30 minutes, 54 seconds averse to it. The reason is very simple because these are available across the country in various areas for rentals 31:02 31 minutes, 2 seconds including processing and we find it is more economically viable because the requirement of such infrastructure is 31:10 31 minutes, 10 seconds very limited. We need maze for about 15 20 days. So why have a machinery for maze for the whole year? So capex budget 31:18 31 minutes, 18 seconds for plants and such other things just minimal and uh vehicles. Yes, that's it. 31:32 31 minutes, 32 seconds Hello. Oh yeah. 31:36 31 minutes, 36 seconds Okay. Uh uh the second question is uh it's similar to the Almino question but different. So how are erratic monsoons 31:45 31 minutes, 45 seconds and climate change impacting the state demand patterns and how are you adjusting your product development and distribution accordingly. 31:56 31 minutes, 56 seconds Uh I will just give the basic then uh pandratic 32:04 32 minutes, 4 seconds monsoons have been here to stay for so many years and they will continue to give us nightmares. So we are used to it 32:12 32 minutes, 12 seconds like what Mr. Harish Pand said we prepare in such a way that we prepare for contingencies. We place our stocks much before the monsoon. We are ready to 32:21 32 minutes, 21 seconds shift the stock from place A to place B in case there is a rainfall there or scanty rainfall there or scarcity of rainfall there. We have products which 32:30 32 minutes, 30 seconds are there for various types of climatic conditions whether it is less rainfall or uh more rainfall. We have products 32:37 32 minutes, 37 seconds which are there for uh you know which are suitable to a particular territory. 32:42 32 minutes, 42 seconds So we try and place our products well in time in all the places that where we 32:48 32 minutes, 48 seconds sell and that helps us in partially upsetting the erratic monsoon trauma and 32:56 32 minutes, 56 seconds what happens is if something doesn't sell somewhere something else will sell somewhere. So as a result we are always able to clock our sales. You want to add 33:05 33 minutes, 5 seconds something sir? No nothing just uh to add uh this thing we are not supplying 100% 33:12 33 minutes, 12 seconds or 90% stocks to the retailer right we are supplying these stocks to our branches so in case if there is any uh 33:21 33 minutes, 21 seconds you know rainfall changes somewhere we get early rainfall somewhere else so we can sift our stocks immediately so this 33:28 33 minutes, 28 seconds is this is a kind of preparation we well in advance so we have a plans for that we have already told 33:37 33 minutes, 37 seconds Okay, makes sense, sir. Thank you so much, sir. 33:41 33 minutes, 41 seconds Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. 33:49 33 minutes, 49 seconds The next question is from the line of Ma and indigent minister. Please go ahead, ma'am. No. Uh, am I audible? 33:57 33 minutes, 57 seconds Yes, ma'am. Okay. Uh, thank you for the opportunity. 34:01 34 minutes, 1 second Uh, I had a few questions. Uh so basically the PAD declined 8% Y uh to 34:09 34 minutes, 9 seconds almost like 384 million despite you know we having a revenue growth of 19%. And also on the tax rate front it increased 34:18 34 minutes, 18 seconds from 5% to 11. Could you just uh uh let us know exactly what drove this increase and what should we assume for the effective tax rate going forward? 34:31 34 minutes, 31 seconds Uh ma'am profit after margin or after taxes has increased in value as a percentage it has taken about a 1% dip. 34:44 34 minutes, 44 seconds We attribute it basically to a more finance cost and more uh cost spent on 34:52 34 minutes, 52 seconds the the schemes and marketing expenses because to clock the kind of top line you have to spend money on the expenses. 35:01 35 minutes, 1 second But it would continue to be on an average in the same range maybe 1 1.5% 35:08 35 minutes, 8 seconds basis points more than what we had this year because the things have stabilized. 35:15 35 minutes, 15 seconds Otherwise the top line has grown but the gross margin has also fallen like I made a 35:22 35 minutes, 22 seconds statement last year that last year gross margins were 64% which was like something unique which happened to our company and at that time somebody had 35:30 35 minutes, 30 seconds asked me sir whether 64 is here to stay and I said sorry no way it will come down to 53 54% that is our gross margin 35:39 35 minutes, 39 seconds so the top growth line some part of it has taken into uh production cost also but uh we are still maintaining a 35:46 35 minutes, 46 seconds healthy uh patine and we would continue to maintain so okay thank okay uh I had another 35:56 35 minutes, 56 seconds question though uh so cotton BT volume grew 22% year year on year how does this compared to the overall industry growth 36:05 36 minutes, 5 seconds rate like are you gaining market share and if you're gaining so from whom and average realization in cotton BT also 36:13 36 minutes, 13 seconds improved from 275 to 293. So do you see further headroom for price increase or 36:20 36 minutes, 20 seconds is the market getting increasingly competitive on pricing? 36:24 36 minutes, 24 seconds Uh I think uh let us let me me and Harish handle that we are right sitting right in front of it. What she's asking 36:31 36 minutes, 31 seconds is whether our cotton volume has grown by 32%. That is ma'am because our products like sankit and jamu are very 36:38 36 minutes, 38 seconds well accepted into the market. We have been facing production constraints over last two years and this year they have been set aside and we are good. So next 36:46 36 minutes, 46 seconds year it may be even better. Secondly, your question of whom have we displaced? 36:52 36 minutes, 52 seconds Now that is very difficult to predict in the cotton market. Everybody is selling cotton. Overall market is same overall area under cotton production is almost 37:00 37 minutes the same. So as a result we are all displacing each other. Uh the government is not yet putting in more effort for 37:07 37 minutes, 7 seconds cotton production area enhancement. So somebody must have did and if your product is good and if it is in demand 37:15 37 minutes, 15 seconds maybe next year we'll display somebody else also. 37:19 37 minutes, 19 seconds Yeah. And definitely then we are growing we are taking the shares from someone. 37:25 37 minutes, 25 seconds So definitely the shares will be taken from the leaders those who are already leading in the quarter market. 37:33 37 minutes, 33 seconds Okay. Got it. Okay. Thank you so much. Thanks for the opportunity. Thank you ma'am. 37:42 37 minutes, 42 seconds Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. 37:50 37 minutes, 50 seconds The next question comes from the line of Mr. Majid Ahmed from Pinpoint X Capital. Please go ahead sir. 38:02 38 minutes, 2 seconds Yes sir. Yes sir. 38:04 38 minutes, 4 seconds Yes sir. Uh thank you sir for the opportunity. So my first question is regarding you have mentioned Sankit and Jumbo as flagship brand that's a 38:12 38 minutes, 12 seconds production stability over next two to three years what is the product life cycle beyond that and what is in your next generation cotton pipeline. 38:22 38 minutes, 22 seconds Yeah. So see yeah although Sanit jumbo has been launched three four years back only right but if you see the 38:29 38 minutes, 29 seconds performance is outstanding the another thing is the kind of pipeline we have we have a product 2020 which is uh either 38:39 38 minutes, 39 seconds similar or better to sankit and we have so many other product which we don't want to disclose now but yes definitely 38:45 38 minutes, 45 seconds we have better than sankit and jumbo so now the competition is not with the industry now our competition is in house 38:53 38 minutes, 53 seconds right we have to eat our own products so lifestyle you can't say like is having four five years life over that we have 39:02 39 minutes, 2 seconds so many other product better to sit uh so the cotton patty now contribute 39:12 39 minutes, 12 seconds around 58% of our revenue is there a risk of over concentration in these two crops so how are you balancing the portfolio diversification while 39:21 39 minutes, 21 seconds protecting your core strengths uh if you can go through our earlier con 39:28 39 minutes, 28 seconds calls that we had about 3 four years back I had introduced the concept of NCP crops that is non-cotton non-patty crops 39:37 39 minutes, 37 seconds because any seed company which is reliant upon only one or two major crops 39:43 39 minutes, 43 seconds has a fear of losing the sales down the line. So 39:51 39 minutes, 51 seconds we were expecting NCP to grow. If you go through our system, you will find that NCP has still grown this year also. 39:59 39 minutes, 59 seconds Although Albed by only 4%. For the simple reason because cotton and patty themselves have grown a little more than regular. 40:09 40 minutes, 9 seconds That does not mean that we are only relying on cotton and patty. You run through my portfolio, you'll find maze which has done exceptionally well this 40:16 40 minutes, 16 seconds year. We have Bajra which had done exceptionally well last year and this year it has maintained line. We are concentrating on wheat and mustard. Both 40:26 40 minutes, 26 seconds of them put together have also grown up and uh they have given us a reasonably wheat and mustard have grown in 10% and 40:34 40 minutes, 34 seconds 15% in value over last year. Maze has grown by almost about 78% over last year right in value and in volume by 54%. 40:44 40 minutes, 44 seconds We are also concentrating on vegetables and nutrient supplements. So we have a very very well balanced product 40:53 40 minutes, 53 seconds portfolio and we have a very very well balanced balanced pan of the selling areas. So we are not only 41:02 41 minutes, 2 seconds accordance specific actually when I introduced this NCP concept in the system at that particular 41:09 41 minutes, 9 seconds time one of the investor had asked how can a seed company be a seed company without cotton being sold. 41:15 41 minutes, 15 seconds So at that time I said boss we are not going to let go of cotton. Our cotton products are getting lined up. However 41:22 41 minutes, 22 seconds we are also trying to give to other products that is uh field crop products. 41:28 41 minutes, 28 seconds So we have a balanced portfolio. Please don't be uh worried about that. We have a very balanced one. 41:36 41 minutes, 36 seconds Okay. Got it sir. Uh so currently for this financial year we are seeing a negative cash flow. What is the main reason for it sir? immediately like how 41:44 41 minutes, 44 seconds we improve our working capital going forward. 41:47 41 minutes, 47 seconds Uh two things in that the negative cash flow has an issue in calculation for the 41:55 41 minutes, 55 seconds simple reason because we have almost about 70 80 crores of cash and bank balances which are lying in the bank at 42:03 42 minutes, 3 seconds the end of March both years last year also and this year also last year was around 85 this year was around 70. So that effect doesn't come in cash flow 42:12 42 minutes, 12 seconds actually that is reduction of liabilities for advanced booking or maybe you know you can add it to the datas. So if you calculate like that you 42:21 42 minutes, 21 seconds will find that the cash flow is not negative. However as per the formula it is definitely showing negative by about 30 cr which is not a very uh big issue 42:30 42 minutes, 30 seconds because we have almost about 70 cr of uh 70 crores of almost bank deposits lying 42:36 42 minutes, 36 seconds up. But this year the stock beta has been a little more than earlier years for the simple reason because we were 42:45 42 minutes, 45 seconds expecting the production of cotton to stabilize. Last two years we are feeling that if you give 100 we get only 20. 42:51 42 minutes, 51 seconds This year when we gave 100 we got almost 70 80. So good production has taken place and cotton has a long life very 42:59 42 minutes, 59 seconds good long life in the shelf. So as a result we are keeping it lined up and we are uh stabilized uh for that. So uh 43:07 43 minutes, 7 seconds minor cash flow negativity will not affect our working capital needs. 43:12 43 minutes, 12 seconds Okay. So got it s finally going forward like what's the sales and marketing spend this percentage of sales for FI20 sir? 43:20 43 minutes, 20 seconds Sorry can you please repeat it? Uh so going forward what would be our percentage of sales in uh in sales and 43:28 43 minutes, 28 seconds marketing sir percentage of overall sales going forward in terms of expenses the uh sales and marketing expenditure 43:37 43 minutes, 37 seconds sir how much are we looking sales and marketing expenditure okay so sales and marketing expenditure basically there are two components that 43:45 43 minutes, 45 seconds one is expenditure made into the market and second is schemes which are given to the trader Okay, 43:52 43 minutes, 52 seconds this year the schemes have reduced from 32% of last year to 28%. 43:59 43 minutes, 59 seconds Although as a volutric or sorry as a value they would have increased definitely the other expenses into the market are 44:06 44 minutes, 6 seconds commensurate to the demand of the market. So they increase at 5 7 10% which is normal inflation rate. There's nothing much that is being done there 44:14 44 minutes, 14 seconds although we have to do a lot of uh show casing of our products into the market. 44:20 44 minutes, 20 seconds The major expense in sales and marketing is our schemes and schemes are controlled based 44:27 44 minutes, 27 seconds on the sales. So as a result if the schemes go up the sales definitely go up multiple times. 44:35 44 minutes, 35 seconds Uh when do we see the inflection point going this year in terms of higher sales growth? Sorry. 44:43 44 minutes, 43 seconds So when do we see uh the benefit of these expenditure translating into much higher revenue growth going forward? 44:51 44 minutes, 51 seconds Because uh as far as the selling expenses are concerned, they are not that high and we don't go overboard in 44:59 44 minutes, 59 seconds making selling expenses. We make the selling expenses based on the products that are being sold into the market and schemes are directly uh you know 45:08 45 minutes, 8 seconds commensurate to the sales. So selling expenses do not have any 45:16 45 minutes, 16 seconds intellectual growth of the sales. Sales grow because of the products that we introduce into the market and the 45:23 45 minutes, 23 seconds research products which Dr. Kulkarnney is kind enough to put it uh to the marketing team. So it's a it's a normal game. 45:33 45 minutes, 33 seconds Okay sir. Uh got it sir. Thank you sir. All the views. Thank you sir. 45:40 45 minutes, 40 seconds Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. 45:46 45 minutes, 46 seconds The next question comes from the line of Mr. Sepkumar Bharma, an indigentor. Please go ahead. 45:52 45 minutes, 52 seconds Hello sir. Uh good afternoon. Uh actually I want to ask I I want to ask regarding cash flow statement. Uh cash 46:01 46 minutes, 1 second flow statement. Uh inventory if you see inventory. Okay. Since March 2024 uh it 46:08 46 minutes, 8 seconds was -22 crores and in March 2025 it was - 108 cr and in March 2026 it it is - 46:18 46 minutes, 18 seconds 113 cr. So is it means that we are not able to sell the product uh in the 46:25 46 minutes, 25 seconds market inventory is going uh uh up and up since March 2024. 46:33 46 minutes, 33 seconds That's a good question. 46:35 46 minutes, 35 seconds I the only thing which I don't tend to agree with the question is that if you are unable to sell the product into the market then how is the top line growing by 20%. 46:45 46 minutes, 45 seconds somewhere something just just a matter just a matter to think not to debate it. 46:49 46 minutes, 49 seconds Okay. Now coming back to your question inventory being negative in addition to inventory like I said the last two years 46:58 46 minutes, 58 seconds we are trying to stabilize the production for future and in that particular case our products which are not giving us the kind of production have started giving us over production. 47:07 47 minutes, 7 seconds Now if I have production lying up into the market just because my inventory is going to increase I cannot leave that with the 47:15 47 minutes, 15 seconds producer because they will sell it elsewhere. My product will become fabricated it will get siphoned out. So we are bound to take back the production 47:23 47 minutes, 23 seconds because it is my production being done on my behalf. So this can lead in adding to the inventory. Please remember that 47:31 47 minutes, 31 seconds if my inventory goes up the next year's production goes down. That's why Mr. 47:37 47 minutes, 37 seconds Gupta said the stability of production over a period of two to three years. So I know carrying inventory is a little 47:45 47 minutes, 45 seconds costly affair but then it is not detrimental to the sale. And what my marketing people tell me is that whatever we have accumulated this year 47:52 47 minutes, 52 seconds in cotton he should be able to liquidate over next two years. Cotton has a shelf life of five to seven years. No use in that. So next year definitely the 48:00 48 minutes production will go down but the sales will increase. That's what I think. 48:05 48 minutes, 5 seconds Okay. So, so we can say uh in two years we we will be able to sell our inventory. 48:13 48 minutes, 13 seconds Don't worry by that time next year again the inventory will come in we get inventory to sell inventory that is why 48:21 48 minutes, 21 seconds the top line is going up and don't forget every pie gives me 56% margin. 48:28 48 minutes, 28 seconds Okay. Okay. Thank you. Thank you sir. 48:32 48 minutes, 32 seconds Thank you so much sir. There are no further questions. Now I hand over the floor to the management for closing comments. 48:41 48 minutes, 41 seconds So in the end I would like to thank everybody especially my investing 48:49 48 minutes, 49 seconds community for showing their continued interest in the company year after year quarter after quarter half year after 48:57 48 minutes, 57 seconds half year. We have been making very conservative commitments to the community as such investor community and 49:05 49 minutes, 5 seconds we have always tried to maintain. I can only make two lines that your company is well balanced in portfolio. 49:15 49 minutes, 15 seconds Your company is well balanced in pan India presence of selling. Your company 49:21 49 minutes, 21 seconds is trying to escalate or step up international footprint. Also, 49:28 49 minutes, 28 seconds we have good human resources very well lined up and we hope to cross 500 crores 49:36 49 minutes, 36 seconds of top line soon. No commitment but with your enthusiasm, with your prayers and with your support, this company is here 49:45 49 minutes, 45 seconds to stay and do well. Thank you. Thank you very much. Thank you sir. 49:51 49 minutes, 51 seconds Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Dur Saba's conference call services. You may 49:59 49 minutes, 59 seconds disconnect your lines now. Thank you and have a pleasant evening.