PI Industries Ltd — Q3 FY26

PI Industries Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LS8T34AK4q4 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good morning and welcome to the PI Industries Limited Q3 FI26 earnings conference call. As a 0:09 9 seconds reminder, all participant lines will remain in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:18 18 seconds Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. 0:26 26 seconds Please note that this conference is being recorded. 0:29 29 seconds I will now hand the conference over to Mr. Sedat Ragnar from CDR India for opening remarks. Thank you and over to you Sedat. 0:38 38 seconds Thank you. Good morning everyone and thank you for joining us on PI Industries quarter 3 FI26 on conference call. Today we are joined by senior 0:46 46 seconds members of the management team including Mr. Mayan Singhal executive vice chairperson and managing director, Mr. 0:51 51 seconds Rajni Sarna, joint managing director, Mr. Sanjay Garwal Group Chief Financial Officer Dr. Ratul Guptar CEO CSM ACM Mr. 1:01 1 minute, 1 second Jag Rana global CEO PI act sciences and Dr. Romesh Sublan global CEO PI health sciences we shall begin the call with 1:10 1 minute, 10 seconds key perspectives from Mr. Singal following that Mr. Sagarwal will share his views on the company's financial performance. Thereafter the forum will 1:17 1 minute, 17 seconds be opened for question and answer session. Before we begin, I would like to underline that certain statements made on today's conference call could be 1:24 1 minute, 24 seconds forwardlooking in nature. A disclaimer to this effect has been included in the investor presentation that is available on the stock exchange websites and which 1:33 1 minute, 33 seconds has been shared with you earlier. I would now like to request Mr. Singal to share his perspectives with you. Thank you and over to you. 1:41 1 minute, 41 seconds Yeah, thank you and thank you and good morning and again a little apology for a little sore throat but I shall try and make my best effort. So I shall commence 1:49 1 minute, 49 seconds today's brief perspectives on the global ACT CAM industry environment and touch upon the PI's performance and the strategic progress. The global crop 1:56 1 minute, 56 seconds protection market is approaching a lack of phase of prolonged down cycle driven by the distribution bey conditions in certain regions. 2:07 2 minutes, 7 seconds Subcommodity prices and elevated interest rates channel inventories are gradually normalizing and inseason 2:14 2 minutes, 14 seconds buying has begun to improve. Although product pricing continues to remain soft part particularly for the general category, 2:23 2 minutes, 23 seconds the farmer of buying behavior is expected to remain cautious and sensitive to the commodity realization and the liquidity conditions. 2:31 2 minutes, 31 seconds At the same time, global innovators continue to optimize supply chains and recalibrate inventory levels. We are seeing early signs of stabilization and 2:39 2 minutes, 39 seconds gradual print expected to come over the borders. 2:43 2 minutes, 43 seconds Coming to India. In India, the rub is showing progress and is ahead of last late last year supported by healthy soil 2:51 2 minutes, 51 seconds moisture, high reservoir storage levels above long-term average. However, the demand for key agrochemicals during the 2:58 2 minutes, 58 seconds quarter remain muted due to elevated channel inventories, adverse weather conditions, lowered crop prices, price state under pressure and volumes have 3:06 3 minutes, 6 seconds been primary driven driven of revenue performance. 3:12 3 minutes, 12 seconds Looking ahead of the structural dement remains intact. Sustained innovation in advanced crop protection, crop enhancement solutions are central to the global agricultural productivity. 3:21 3 minutes, 21 seconds Structured economic challenges, environmental conditions and considerations and economic realities are shaping the farmer's expectation. 3:30 3 minutes, 30 seconds Growers are increasingly seeing solutions that are safer for the ecosystem, effective against evolving pest and diseases resistance and capable 3:38 3 minutes, 38 seconds of delivering high productivity to meet rising demands of food, fiber and bio energy. Now moving to our business 3:45 3 minutes, 45 seconds highlights 2326 reports moderate in line with the overall demand soft inventory levels of 3:51 3 minutes, 51 seconds many key products based on the already higher base of PI's extraordinary performance over the last couple of 3:58 3 minutes, 58 seconds years. result in customer supply shoulduling. We are however on track to commercialize 8 to 10 new molecules with five molecules already commercialized in 4:07 4 minutes, 7 seconds the yard. The strategic initiatives to a technology enhancement portfolio diversification strengthening the reality pipeline and adding new clients 4:15 4 minutes, 15 seconds progressing well. Our domestic business are mainly impacted by lower farmer demand of high value products. Now 4:22 4 minutes, 22 seconds coming to pharma we have delivered a 50% yearon-year growth during the period. We add value new clients to our portfolio and continue to expand the office into 4:29 4 minutes, 29 seconds final support by dedicated business development building capabilities operations in the US to Europe and expanding to the east markets. Near-term 4:38 4 minutes, 38 seconds momentum however has been moderate due to global biotech funding going on uncertainties while in the early stage 4:46 4 minutes, 46 seconds of development it has cycle time and a slow conversion of selected opportunities. In biologicals, we are 4:53 4 minutes, 53 seconds very excited as we progressing steadily towards building a scalable global franchise, a peptide based unique platforms enabling differentiated 5:01 5 minutes, 1 second solutions across a couple of geographies regulatory milestones uh which is the approval of half an alpha beta in India 5:08 5 minutes, 8 seconds and ongoing filing the US and Latin America on a long-term ambition. We continue to allocate capital towards product innovation, market development 5:16 5 minutes, 16 seconds and strategic partnerships in the region including the US, Brazil and Europe, Mexico and India to support the 5:23 5 minutes, 23 seconds long-term scalable growth. PI boosts it S&P global corporate sustainability ranking at 98% 5:32 5 minutes, 32 seconds uh percentile. I'm pleased to share PI featured in the S&P global sustainable yearbook. This is again marking ranking 5:39 5 minutes, 39 seconds among the top ESG rated companies globally. 5:42 5 minutes, 42 seconds Despite the near time softing, our underlying fundamentals remain strong. 5:46 5 minutes, 46 seconds Development at scale of ladies and gentlemen we have lost the 5:55 5 minutes, 55 seconds line of the management. Please stay connected while I reconnect the management. Thank you. 6:01 6 minutes, 1 second [music] 6:06 6 minutes, 6 seconds [music] 6:11 6 minutes, 11 seconds [music] 6:16 6 minutes, 16 seconds [music] 6:21 6 minutes, 21 seconds [music] 6:21 6 minutes, 21 seconds Downtown. 6:27 6 minutes, 27 seconds [music] 6:34 6 minutes, 34 seconds [music] 6:40 6 minutes, 40 seconds [music] 6:45 6 minutes, 45 seconds [music] 6:52 6 minutes, 52 seconds [music] 7:01 7 minutes, 1 second Ladies and gentlemen, we have the management line reconnected. Sir, please proceed. 7:06 7 minutes, 6 seconds Yes. Hi. Sorry. So, despite the mere shockness of our underlying fundamentals remain strong, development and scale up platforms are progressing as per 7:14 7 minutes, 14 seconds planned. A robust glass balance sheet and innovative pipeline remains healthy. 7:20 7 minutes, 20 seconds We are continuous drive a fully integrated research setup one of its kind out of a sensitive label critical to our growth aspirations of 7:27 7 minutes, 27 seconds differentiation. Our teams are developing technology platforms that are giving opportunities across new verticals such as biologicals, special and electronic chemicals. 7:38 7 minutes, 38 seconds Now the the the first NC from India Bioxinary pro is under registration India. The extensive onpre 7:45 7 minutes, 45 seconds demonstrations have been launched. We have seen and we are very excited about the performance of the product. 7:52 7 minutes, 52 seconds On the other hand, our peptide technology, unique peptide technology platform for biologicals, another equally exciting opportunity 8:00 8 minutes which is reflecting globally and we respond of this expansion has been seen by huge demand by expanding channels and efforts and creating a new play in the 8:08 8 minutes, 8 seconds industry. The pace of commercialized advanced molecules are increased in the line with our investments in research and differentiated technologies from from flow to vapor to biotechnology. 8:19 8 minutes, 19 seconds [clears throat] 8:20 8 minutes, 20 seconds Our long-term growth outlook remains intact with a focus of margin discipline, high quality of growth and 8:27 8 minutes, 27 seconds scaling platforms. With this now, I would like to hand the discussion over to our group CFO Sanjay. And thank you 8:34 8 minutes, 34 seconds everyone and over to you Sanjay. Go ahead please. 8:39 8 minutes, 39 seconds Thank you Mr. Single. Good morning everyone. So guys, I'll summarize the finan company's financial highlights for the quarter ended December 31st, 2025. 8:49 8 minutes, 49 seconds uh Q3 performance reflects the continued impact of global industry headwinds that we have been discussing with you in our 8:56 8 minutes, 56 seconds previous calls. However, we believe the sector is nearing stabilization now and expect sequential improvement beginning quarter 4. 9:05 9 minutes, 5 seconds For quarter 3 FI26, we reported revenue of 13,757 million, which comes on a back of a high base of the same period last year. 9:16 9 minutes, 16 seconds Despite the global challenges, we know we have still delivered a growth of over a three-year CAGGR for the 9 months period. 9:26 9 minutes, 26 seconds The moderation in EAM export is primarily volume led driven by slow demand and customer delivery schedules. 9:34 9 minutes, 34 seconds Also to note uh that the 9mon period FI24 for the EMA export business we grew 9:41 9 minutes, 41 seconds by 22%. Similarly, we grew in FI25 9 months period by 9%. So going forward, we remain fully confident of the future 9:49 9 minutes, 49 seconds of our ECM export business. We have commercialized nine five new molecules in ECM exports and four in domestic agri 9:58 9 minutes, 58 seconds brands. The 10% growth in new products in EAM export demonstrates our G-riskin strategy and focus approach to gaining new business in this tough environment. 10:10 10 minutes, 10 seconds Domestic agrochemical demand remains subdued due to high channel inventory, low commodity prices, delay in normalization of biological portfolio 10:19 10 minutes, 19 seconds postregulatory headwind and specific impact from lower demand in a few target crops for PI. 10:26 10 minutes, 26 seconds Our domestic business is supported by strong product portfolio and new product launches which have offset the challenges faced on the ground. We have 10:35 10 minutes, 35 seconds launched three new herbicides, Alcoor, Comet, Fix It, and one insecticide, Uranus, this year with two more expected to be launched by close of FI26. 10:46 10 minutes, 46 seconds We expect the domestic growth to be back on track from FI27 onwards. We've also launched our direct to farmer mobile 10:53 10 minutes, 53 seconds app, PM Mitra Kasan, a one-stop farmer engagement solution offering crop advisory, product guidance, and loyalty benefits. 11:01 11 minutes, 1 second This digital platform strengthens our connection with growers and drives scalable tech enabled growth. 11:08 11 minutes, 8 seconds Moving on to our farmer platform, uh it has been on a very strong foundation uh increased revenue by 50% over 9 months 11:17 11 minutes, 17 seconds of the previous year driven by deepening relationship with the biotech and the big farmer innovators. 11:23 11 minutes, 23 seconds We have onboarded uh several new customers over the last 12 months including several strategic accounts and big farmer 11:31 11 minutes, 31 seconds global biologicals continue to progress in line with a long-term road map with ongoing investments in registrations, product development and global market expansion. 11:42 11 minutes, 42 seconds On other financial metrices, our gross margin expanded to 59% during the quarter supported by a favorable product mix and cost discipline. Uh further at 11:51 11 minutes, 51 seconds EITA level we've delivered a margin of 27% for a 9-month period which remains resilient despite industry headwinds. 12:00 12 minutes Uh during the quarter net profit includes an exceptional income in a farmer business on account of a right back of contingent consideration of 12:09 12 minutes, 9 seconds INR1260 million which has been partly offset by additional provisioning of retirement benefits as per new labor code to the 12:17 12 minutes, 17 seconds tune of INR 209 million. Our trade working capital in terms of days of sales has increased to 139 days and 12:26 12 minutes, 26 seconds reflects current market conditions. We expect to improve this as market scenario normalizes in the coming quarters. 12:34 12 minutes, 34 seconds A debt-free balance sheet position supported with net cash of rupees 35 billion provides strong resilience and flexibility for strategic investments. 12:45 12 minutes, 45 seconds While the operating environment remains cautious, we expect gradual recovery beginning quarter 4 FI26. With growth 12:54 12 minutes, 54 seconds momentum building into FI27 as industry conditions stabilize and our new products ramp up. With this, I conclude 13:02 13 minutes, 2 seconds my opening remarks. I will now request the moderator to open the forum for Q&A. Thank you. 13:09 13 minutes, 9 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 13:18 13 minutes, 18 seconds touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants 13:26 13 minutes, 26 seconds are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question give assembles. 13:36 13 minutes, 36 seconds We take the first question from the line of Sor Jen from HSBC. Please go ahead. 13:43 13 minutes, 43 seconds Hi uh thank you for the opportunity. Uh first question is on the guidance when you say that sorry I do apologize to interrupt you there but your audio is not coming in 13:51 13 minutes, 51 seconds clear. Could you please use your handset better now? 13:59 13 minutes, 59 seconds Yes, please go ahead. 14:00 14 minutes Okay. Yeah. Thank you. So first question is on the guidance. When you say growth resumeuming in fourth quarter, is it only a sequential growth that you're 14:08 14 minutes, 8 seconds talking about or you even expect a Y growth and uh you know what this growth is really? Is it like a volume growth that you are alluding to or you even 14:16 14 minutes, 16 seconds expect a revenue growth or a value growth in the fourth quarter? 14:21 14 minutes, 21 seconds So yes uh there will be a volume growth from beginning quarter 4 FI26 and yes there will be a sequential growth in quarter 4 over what we have seen in 14:30 14 minutes, 30 seconds quarter 3 and as we build in into FI27 uh we believe uh with all the efforts we have been put in uh we should be on a growth momentum picking up. 14:40 14 minutes, 40 seconds So volume growth in 4Q is it also a y volume growth? 14:46 14 minutes, 46 seconds See where well we are sitting now we would target to have a volume growth but as I said the momentum will start 14:54 14 minutes, 54 seconds picking up from FI27 onwards. Yeah, but just to clarify, we already see the great new we see a good momentum of uptick started in the quarter four and 15:03 15 minutes, 3 seconds clearly as we get into the year the momentum is the positive part is there's a positive moment already seen and witnessed [clears throat] and I think we 15:11 15 minutes, 11 seconds should be in a good shape coming in the quarter understood and then when you say FI27 you are expecting the revenue growth 15:19 15 minutes, 19 seconds returning to the company in that year and if possible can you also give more contrast to it whether you expect a grad agile recovery in growth or you expect the growth to open up in a big way. 15:30 15 minutes, 30 seconds Yeah. So I think we see the positivity of growth and as I mentioned in my talk earlier that you know the industry is still having an extended cycle of growth 15:38 15 minutes, 38 seconds uh but given the scenarios and as you must have seen in this year there have been many headwinds the geopolitical uncertainties commodity prices also 15:48 15 minutes, 48 seconds given the challenge of India's regulatory framework and biologicals and some of these areas have have created certain challenges including the weather 15:56 15 minutes, 56 seconds conditions but I think what we see that given that the botney coming from the bit and the positive shoots are already there. So we are positive to say yes we will start seeing this in 201. 16:08 16 minutes, 8 seconds H okay. Uh so you know just to kind of continue on that point because the kind of robust business that we have right we 16:17 16 minutes, 17 seconds have visibility a lot more visibility compared to the other kinds of businesses you know in the sector. So are you noticing already a great deal of 16:26 16 minutes, 26 seconds visibility from your customer side that you are getting optimistic in terms of a recovery in FI27 or is it mainly coming from some optimism that you have in 16:34 16 minutes, 34 seconds mind? No, no. I think as you know some part of the business is more about what we have from the customer set but at the same time is there are adverse headwinds 16:42 16 minutes, 42 seconds life shift and you know the PI philosophy of partnership that goes strong and even while we have what we've committed to with them but we have to 16:50 16 minutes, 50 seconds sit and optimize to handle the market situation because you know you have to partner up to create value. So we see the uptick in demand but clearly as I 16:58 16 minutes, 58 seconds said there's been a reset in the way the customers are thinking the way they're looking at agile and supply chains given the challenges of this prolonged 17:06 17 minutes, 6 seconds challenges that they've been seeing but clearly given where we are looking at what they feel the operational aspects 17:13 17 minutes, 13 seconds of these issues in the industry are getting cleaned up but the external factors still will have a role to play and we don't know how reactions happen 17:21 17 minutes, 21 seconds the geopolitical scenarios which could change but clearly there's a positivity from all quarters in terms of how will they see going forward. 17:30 17 minutes, 30 seconds Understood. Thank you. That is helpful. 17:32 17 minutes, 32 seconds The second question is we noticed that the gross margins continue to improve every quarter for you and I think we delivered a 59% kind of a gross margins. 17:41 17 minutes, 41 seconds Would you also give out a guidance on what kind of gross margin do you expect on a sustainable basis? 17:48 17 minutes, 48 seconds So as you said as always we guide I think we continue to manage the margin on a quartertoquarter basis. It would be difficult to put that out as Europe very 17:56 17 minutes, 56 seconds clearly would understand that there are product mixes there's value mixes which come together but as we given the guidance between 50 to 50 odd plus 50 to 18:05 18 minutes, 5 seconds 52 or 53% we continue to keep that and we continue to move with that. 18:10 18 minutes, 10 seconds Sure. So um we have been delivering quite good kind of a gross margins for last few quarters. What is this gap between what is your expectations on a 18:18 18 minutes, 18 seconds sustainable basis of what we're delivering? What is this gap attributed to? I really don't understand that gap over the gap gross margin. 18:28 18 minutes, 28 seconds Yeah. So gross margin. Sorry. 18:31 18 minutes, 31 seconds Yeah. Understood your question. See the thing is um first of all while we will aim to deliver more but it is better to 18:39 18 minutes, 39 seconds be because there will be a product mix gap between quarter on quarter. So on a yearly basis is when we can talk more uh with clarity with you and at the end of 18:48 18 minutes, 48 seconds the day whatever gross margin benefits we get it helps us in investing the planned investment what we have in the new businesses and therefore it is 18:56 18 minutes, 56 seconds better to track the EITA margin. uh again for the 9 months we are at a healthy 26 27% and we would still hold 19:04 19 minutes, 4 seconds ourselves for the year what we have started the year with with 25 to 26% and we believe uh that is where we should exit uh target to exit in this financial 19:13 19 minutes, 13 seconds year and most you know these things once we have our budgeting exercise completed for FI27 we can give you more guidance for the next year thereafter 19:22 19 minutes, 22 seconds sure thank you so much and all the best I'll get back in the queue thank you thank Thank you. Ladies and gentlemen, 19:30 19 minutes, 30 seconds in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue. 19:39 19 minutes, 39 seconds We take the next question from the line of Vive Rajamani from Morgan Stanley. Please go ahead. 19:47 19 minutes, 47 seconds Um, hi sir. Uh, thank you for the opportunity. Uh, the first question I had was an extension to the earlier guidance question. Uh, just going to 19:55 19 minutes, 55 seconds fiscal 27. uh I know it's a bit early but would it be possible to give some sense of you know you're expecting more like mid-s single digit or you know high 20:03 20 minutes, 3 seconds single digit any uh you know range if that's possible and also whether it would be broad-based across the portfolio or you expect certain parts of 20:11 20 minutes, 11 seconds the portfolio contributing more towards that fiscal 27 recovery that's the first question so let me put it as we said there is 20:19 20 minutes, 19 seconds still the softness I think we definitely seeing recovery now different pockets different plays clearly be too early to give a guidance which what numbers is 20:27 20 minutes, 27 seconds tax receipt but I think coming in the next quarter as we always do over the decades is where we give a guidance for the next financial year post the end of 20:35 20 minutes, 35 seconds the year yeah um sure sir understood uh the second question with with respect to the uh the 20:43 20 minutes, 43 seconds new products that you've been disclosing um I think for the 9 months you've mentioned that the new products have grown at about 10%. 20:50 20 minutes, 50 seconds uh which given the first two quarters of the year which saw a very very strong growth uh it seems to suggest that 3Q that growth of the new portfolio seems 20:59 20 minutes, 59 seconds to have slowed down. I just just wanted to get some color with respect to you know were there any specific reasons around that and you know if if there was some impact of the US tariffs and how 21:08 21 minutes, 8 seconds how should we think about that going forward into fiscal 27. Thank you. So at a fundamental level as I highlighted in my speech that the key challenge is the 21:17 21 minutes, 17 seconds commodity prices and the demand cycle which is creating challenges and the headwinds of weather. Obviously uh the 21:25 21 minutes, 25 seconds US policies have impacted the growers which in turn has a consumption differentiation. It is not the trade policies per se. So I think that's creating one of the key key challenges. 21:36 21 minutes, 36 seconds But going forward I definitely see that could move into the positive direction. 21:40 21 minutes, 40 seconds That is one. The second important issue as we see for the new products, it takes a little time for development. As you can understand from the ad business and 21:49 21 minutes, 49 seconds I'm sure you know that well, it takes typically a decade plus to keep products. And the beauty about a is products continue to grow for life and I 21:57 21 minutes, 57 seconds think that's that's what the time cycle is. But the positivity is the mix of the new product portfolio, the percentage growth coming from that. uh with time if 22:07 22 minutes, 7 seconds the industry stretches this could accelerate the growth rates of these products. 22:14 22 minutes, 14 seconds Um sure sir that's helpful. I'll rejoin the queue and all the very best. 22:19 22 minutes, 19 seconds Thank you. We take the next question from the line of Aijit Kala from Kota Institutional Equities. Please go ahead. 22:28 22 minutes, 28 seconds Yeah, good morning. Thank you so much. 22:30 22 minutes, 30 seconds Um could you please just uh update us on the contract assets number on the balance sheet at the end of December please? 22:38 22 minutes, 38 seconds Yeah Vij uh this particular quarter the contract assets are in the range of around 1065 crores and uh yeah 22:49 22 minutes, 49 seconds okay got it. So compared to uh basically about a little under 900 crores last quarter uh correct and uh in terms of 22:57 22 minutes, 57 seconds the liquidation timeline for uh this line uh I think we've said in the past that we expected to come down towards the end of this financial year. So uh 23:06 23 minutes, 6 seconds any sense you could help us with regarding how we should expect the trajectory to shape up over here. 23:11 23 minutes, 11 seconds Yes, as you know, yes, that's what we've given a guidance. As you know, if you look at the past history, this is a typical cyclical approach and no 23:19 23 minutes, 19 seconds inventory beyond 3 to 6 months. So, but clearly yes, at the end of the year, this will be coming down and I think over the next couple of quarters, it may 23:26 23 minutes, 26 seconds further go lower because it's a mix of how asset utilization, capacity utilization, 23:34 23 minutes, 34 seconds customer contracts and [clears throat] mechanisms work. 23:38 23 minutes, 38 seconds So by year end where should we uh expect this uh number to be sir? U well I can only give you guidance to say 23:45 23 minutes, 45 seconds it will be reduced and it will get there but to give a specific number will depend on how we shape these up in terms of customers shipments times asset mixes 23:54 23 minutes, 54 seconds which are going up. So because that's really how it is. So it's not a specific number that I can come to today. 24:01 24 minutes, 1 second All right. Um and then just on the gross margin guidance uh you know the uh so just you know trying to understand I 24:10 24 minutes, 10 seconds mean in terms of this 50 to 52% trajectory that we expect is that something we should expect in the uh relatively near future itself say in 24:18 24 minutes, 18 seconds fiscal 27 or uh for fiscal 27 what's the line of sight we have can we maintain the gross margins around these levels of 58 59%. 24:27 24 minutes, 27 seconds So as we mentioned we've given that guidance we the intention is to continue to obviously manage and maintain the gross margin and clearly as we will give 24:34 24 minutes, 34 seconds a better guidance at the post to the year end 24:48 24 minutes, 48 seconds yeah I think I'm done thank you so much all the best thank you we take the next question from 24:56 24 minutes, 56 seconds the line of Rohit Nagaraj from 3601 Capital. Please go ahead. 25:02 25 minutes, 2 seconds Uh thanks for the opportunity. Uh sir, any update on the plant healthcare? Uh when we had acquired this almost one and 25:09 25 minutes, 9 seconds a half years back, we were expecting some cross-selling of products from India, our own products to the other 25:16 25 minutes, 16 seconds geographies like where PHC has its presence in US, Brazil, Mexico. So where are we in that process and where can we 25:24 25 minutes, 24 seconds see some tangible benefits from the same? Thank you. 25:27 25 minutes, 27 seconds So maybe Jesh you can take this as go ahead please. 25:30 25 minutes, 30 seconds Yes. No absolutely and and thank you for asking. So on plant healthcare part of the business we have made tremendous progress this year. Uh we are expanding 25:38 25 minutes, 38 seconds our business in uh Brazil, US, Mexico and European countries. In Brazil this year we have gone from last year two 25:46 25 minutes, 46 seconds distributors to 33 distributors. We have more than 400 farmers who are right now uh using our product in their own field 25:55 25 minutes, 55 seconds testing the product. Uh in case of uh uh similarly in Mexico we have more than 28 distributors right now who are working 26:03 26 minutes, 3 seconds with us. In US we are setting up a distribution network for the entire Midwest and uh some of the world largest 26:11 26 minutes, 11 seconds farmers from uh Brazil and Mexico they are basically right now testing our product. They have been working with us. 26:18 26 minutes, 18 seconds We have also got some new product under registration. We launched two new products in Brazil, two in Mexico. Uh we've just got our disease control 26:26 26 minutes, 26 seconds product approval in California that makes the entire US and California is the largest market for that product. We are awaiting an approval for one of our 26:33 26 minutes, 33 seconds neode management product in US which is expected sometime this month and uh all [clears throat] the trials which we are 26:40 26 minutes, 40 seconds doing in uh in the farmers field in Brazil. it the harvesting is just getting started and what we are seeing is almost more than 80% win rate. So we 26:49 26 minutes, 49 seconds are basically making good pro progress in India. We got that product plant healthcare product got approved and we are looking at launching this product in this uh you know next quarter. 27:00 27 minutes Sure. Uh that's helpful. Uh second question on Poxan Apollo. uh now that we have filed for the registration in Indian market what are the timelines 27:09 27 minutes, 9 seconds that we are looking at from commercialization in Indian market and any progress on uh you know probably 27:16 27 minutes, 16 seconds having registrations in the global market. Thank you. 27:20 27 minutes, 20 seconds For sure. Thank you. I think the progress is within this financial year we should be achieving the registration. 27:25 27 minutes, 25 seconds So that be the landmark in the Indian history of new innovation of referral in this fin in the next coming financial year. On the other hand, yes, there are 27:33 27 minutes, 33 seconds works of regulatory works which are going in other couple of geographies. 27:36 27 minutes, 36 seconds So, we'll be filing for regulatory registrations in the coming year and hoping as soon as we get regulatory approvals to launch this, launch the product at the global platform. 27:46 27 minutes, 46 seconds Sure. Uh thanks a lot for answering all the questions and all the best sir. 27:52 27 minutes, 52 seconds Thank you. We take the next question from the line of Sedat Karikar from Aquarius Securities. Please go ahead. 27:59 27 minutes, 59 seconds Uh so just on the pharma and the biologic business. Uh now if you look at the numbers we are heavily investing in 28:07 28 minutes, 7 seconds these businesses and we are roughly at a 75 80 cr quart quarterly aa loss in these segments. Uh so how should we 28:15 28 minutes, 15 seconds think about these investments from a medium to longer term and uh are we at the peak of the investments in these businesses and going ahead the 28:24 28 minutes, 24 seconds investment should move in line with our overall OPEC. 28:29 28 minutes, 29 seconds It's a very good question. See look first we need to understand uh why we are doing it. If we understand that these are good cost you know the 28:37 28 minutes, 37 seconds investments what we are doing is going to be a long-term value creation for the organization. That is where we are at now. Initially we have bought I mean 28:44 28 minutes, 44 seconds we've got these businesses we have incubated them we've got the people now and we have to make the right investments and unfortunately all of it 28:52 28 minutes, 52 seconds get charged off to the P&LN uh so yes uh it will take some time like pharma is now getting onto a right I mean strong 29:00 29 minutes foundation biologicals uh Jag just spoke uh so yes currently they are having P&L charge and we'll have to bear it for 29:08 29 minutes, 8 seconds some few quarters uh but thereafter we think as an organization this will be future growth engines for us. Uh yeah, that's it. 29:16 29 minutes, 16 seconds So they were put in one line. Look at these as investments of the future not as losses of present. 29:23 29 minutes, 23 seconds Got it. Uh so secondly uh just on the capeex uh side we were working on two multi-purpose plants and now we have 29:30 29 minutes, 30 seconds expanded that to three multi-purpose plants and we have also spoken about a non GMP plant in India on the farmer. So 29:38 29 minutes, 38 seconds the third plant is largely for the farmer business. Is that a fair understanding? 29:43 29 minutes, 43 seconds No, as you know, we're looking at certain other verticals as you as I mentioned earlier. So, the third plant would be servicing those verticals uh 29:51 29 minutes, 51 seconds with the special and electronic chemicals. So, that's really where we are putting a footprint. 29:57 29 minutes, 57 seconds Uh so any pharma intermediate plant that we are setting up in India? 30:03 30 minutes, 3 seconds Yes, we will coming up with the plans and announcing that in the next quarter. 30:07 30 minutes, 7 seconds Oh, okay sir. Got it. Thank you so much. 30:13 30 minutes, 13 seconds Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. 30:20 30 minutes, 20 seconds We take the next question from the line of pages Pradan from Cityroup. Please go ahead. 30:26 30 minutes, 26 seconds Yeah. Hi sir. Uh I know it's early but um could you provide any guidance on the capeex plan for FI27? 30:34 30 minutes, 34 seconds So broadly let me give it in line is around 5 600 crores. I mean and obviously once we get through the whole process procedures after board approval we give proper guidance next quarter. 30:45 30 minutes, 45 seconds Okay. You mentioned 500 to 600 crores right? Yeah I think that's where we are today. 30:51 30 minutes, 51 seconds Okay. Okay. Understood. And on the domestic biologicals uh registration process any update where we are uh what 30:59 30 minutes, 59 seconds percentage of portfolio would be already registered? So if you look at the domestic and biological portfolio as we know in the beginning of the year we've 31:07 31 minutes, 7 seconds had certain turmoil in the industry so those are getting sorted I believe in this quarter those should be in the past clearly uh certain other new products as 31:15 31 minutes, 15 seconds we already mentioned that products like a new type of the high is already registered and we are looking and 31:23 31 minutes, 23 seconds evaluating about two to three new products in this segment and I think today we have a very robust large scale 31:30 31 minutes, 30 seconds portfolio in biologicals we're making those investments to scale them out. 31:36 31 minutes, 36 seconds Okay. Okay. And just lastly, um any sort of thought process on the use of cash on balance sheet if there are any 31:43 31 minutes, 43 seconds opportunities uh domestically or elsewhere? What how how are you thinking about it? 31:49 31 minutes, 49 seconds So if you look at the cash in the balance sheet, there will be address there will be investments. We're also looking as we mentioned on the new entities and technology platforms that 31:58 31 minutes, 58 seconds we investing. Clearly the company has a resource and a team which is always on the lookout to look at what could be the synergistic in aligning to our 32:06 32 minutes, 6 seconds strategies which are knowledge capabilities of building a differentiated play. So that's really where we are focusing and we'll continue to do so. 32:16 32 minutes, 16 seconds Okay. And just to if I can add I mean would this largely be in atm or largely looking at outside of ATM? 32:26 32 minutes, 26 seconds So in a lighter way let me put it if you have three children we have to decide which suits the best opportunity which school fits what kid right so when you look at the opportunity we're looking to 32:34 32 minutes, 34 seconds grow in every sector that you're playing in so whichever opportunity comes and fits in wells we're going to put it there 32:40 32 minutes, 40 seconds sure understood thank thanks a lot sir thank you we take the next question from 32:48 32 minutes, 48 seconds the line of Vive Rajamani from Morgan Stanley please go ahead Um, hi sir. Uh, thank you so much for 32:57 32 minutes, 57 seconds the followup. Uh, this just an extension of the previous participants question. 33:01 33 minutes, 1 second Uh, on the biological side, did you mention that the regulatory issues are now behind and Q4 will potentially be a normal quarter? 33:10 33 minutes, 10 seconds No. Yes. In the Indian market, if you remember, they're now getting into approval systems. So that's why I'm saying behind. So maybe next year we'll 33:17 33 minutes, 17 seconds see those pieces come up. Q4 when we expect industry has taken a front and the government has taken initiatives to resolve that. 33:27 33 minutes, 27 seconds Uh sure sir understood and would it just be possible to share uh you know what is the biological's contribution in fiscal 26 so far we should be around 21%. 33:39 33 minutes, 39 seconds Okay sir. Thank you. Thank you very much. 33:45 33 minutes, 45 seconds Thank you. We take the next question from the line of Ranjit Sumala from IFL Capital. Please go ahead. 33:54 33 minutes, 54 seconds Yeah. Hi sir. Thank you for taking my question. My question is on the right back of the contingent consideration that we have taken of uh the PI health 34:02 34 minutes, 2 seconds science. How should one view this? Uh uh is it uh does the original performance thesis of this particular acquisition 34:11 34 minutes, 11 seconds remains intact or there is going to be any change in the expectations? 34:16 34 minutes, 16 seconds No, absolutely there is no uh no change in the strategy. There is no impact of it and that's why we uh renegotiated uh 34:23 34 minutes, 23 seconds contingent consideration which was lying in our books. Uh so uh the business is on a strong footing. We have our now experience in our uh global business 34:32 34 minutes, 32 seconds development team. Uh so we look we're looking forward uh for our farmer business to scale up and build one of the best uh uh uh global CRDMO platform. 34:46 34 minutes, 46 seconds Sure. Thank you sir. 34:50 34 minutes, 50 seconds Thank you. We take the next question from the line of Sedat Kadikar from Aquarius Securities. Please go ahead. 34:57 34 minutes, 57 seconds Hi, my question is on the plant healthcare business. Uh can you just share some broader thoughts on how should one think about the overall opportunity and the trajectory of this 35:06 35 minutes, 6 seconds segment specifically on Senori and Eco given that we have been looking to ramp up these products? Any indicative 35:14 35 minutes, 14 seconds timelines and critique sales number that we could look at from these products? 35:20 35 minutes, 20 seconds Yeah. No absolutely. So see you have to look at it overall in the industry biological business globally has been growing in double digits. So globally 35:28 35 minutes, 28 seconds the biological business is in the range of around $10 billion today and this has been continuously growing over 10%. And that's the segment basically we are 35:36 35 minutes, 36 seconds participating we are bringing in some of our key product. The difference what we see is overall biological business globally is a fairly crowded space but 35:45 35 minutes, 45 seconds we have some unique product and these technologies no one has. We are the first company in the world who has commercialized peptides in agriculture. 35:54 35 minutes, 54 seconds Peptides have been used in pharma etc. 35:56 35 minutes, 56 seconds in the in the past but we are the first company who has commercialized in agriculture and we see this differentiation driving sign significant 36:03 36 minutes, 3 seconds growth product like sour take these are the plant production products within biologicals the fastest growing segment 36:12 36 minutes, 12 seconds today's the biocrol segment because of the challenges you know which are coming in like society is looking at you know how can they basically bring in the 36:19 36 minutes, 19 seconds products which have a lesser impact overall and that's what is driving the growth also farmers are looking at those kind of options which can help their 36:27 36 minutes, 27 seconds crop to grow better. So we actually see a significant growth opportunities as we expand this portfolio. 36:34 36 minutes, 34 seconds Okay. Uh uh secondly is we have made a comment in the presentation that we aim at becoming among the top five CRM on 36:43 36 minutes, 43 seconds the farmer side. Any timeline or how should one think about the investment in the segment going ahead? 36:49 36 minutes, 49 seconds As you know this is a longest stationation based business capable of building and I can just give you a pal example it took about a decade to build 36:58 36 minutes, 58 seconds PI contract manufacturing and then you have what the hockey stick effect so I think we are right now the phase of the hockey uh and we expect yes the scale 37:07 37 minutes, 7 seconds will take time if you want to differentiate and have sustainability so I think we should look at the next couple of years let the right basis and the numbers will start ticking. 37:17 37 minutes, 17 seconds Oh, thank you so much. 37:21 37 minutes, 21 seconds Thank you ladies and gentlemen. If you wish to ask a question, please press star and one. 37:30 37 minutes, 30 seconds We take the next question from the line of Christian Pwani from JM Financial. Please go ahead. 37:36 37 minutes, 36 seconds Yeah. Hi sir. Uh thank you for taking my question. Uh just firstly wanted to understand um the CSM business that has 37:45 37 minutes, 45 seconds struggled this quarter. So uh you know when do you expect uh the CSM business to kind of show uh a Y growth? Uh maybe 37:54 37 minutes, 54 seconds it is 6 months down the line or 9 months down the line. When do you expect it? 37:59 37 minutes, 59 seconds So let me first calibrate we're not struggling number one it is line and expectation of what we see but clearly as I we have indicated that coming the 38:08 38 minutes, 8 seconds quarter we already seeing the the positive rate come out and the fourth quarter itself will start 38:16 38 minutes, 16 seconds showing certain reaches so we're pretty confident that will work well so did you mention that the fourth quarter onwards will uh you will have uh a CSM growth again is that what Yeah. 38:30 38 minutes, 30 seconds Okay. Okay. Okay. Okay. And uh uh you know with um uh when do we expect uh 38:36 38 minutes, 36 seconds this uh pharma contributions uh to be fairly positive uh for the company 38:43 38 minutes, 43 seconds because I think uh our our targets to go a bit positive have been pushed out. Uh I know you've been uh you know uh trying 38:52 38 minutes, 52 seconds a lot but uh was the sense there? So let me put it we not we we definitely be we putting all the efforts the idea is impa 39:00 39 minutes positivity is something dependent on the market and the opportunity and clearly we don't want to lose the focus on what the strategic differentiator will be 39:09 39 minutes, 9 seconds just because the markets are twiddling but I think we are holding in the building capability so we're taking more aggressive calls in investing hence you 39:16 39 minutes, 16 seconds may see the bit challenges but I do believe that now when the foundations are set it takes a long longer gestation 39:23 39 minutes, 23 seconds to turn this business up and clearly I see in the next couple of years it should start moving once we hit the top four 500 C top lines. 39:33 39 minutes, 33 seconds Understood. And uh lastly if I may u you know uh it's been quite uh it's been 39:40 39 minutes, 40 seconds some quarter since we have stopped uh uh giving out our order book number. So uh has it has the order book uh declined or or what is it? What's the status of it? 39:51 39 minutes, 51 seconds Can you just uh help us with that? No, no, we have been sharing order book. 39:55 39 minutes, 55 seconds I think last time also we did mention that and as of this quarter the way we look at it, we are in the range of 1.2 uh billion dollars of order book. 40:05 40 minutes, 5 seconds Understood. U thank you for patiently answering my question. Wish you all the best sir. Thank you so much. Thank you. 40:11 40 minutes, 11 seconds Thank you. We take the next question from the line of Nosh Chri from Aditya Bila Mutual Fund. Please go ahead. 40:20 40 minutes, 20 seconds Yeah. Hi. Um just one question sir. Um if you can you know touch upon on the u uh electronics chemical um what exactly 40:29 40 minutes, 29 seconds are we doing here from a end user point of view and how big this platform can be for you in next 5 years and beyond. 40:39 40 minutes, 39 seconds Yeah. So in terms of electronic chemicals I think there is a good traction new customers have been added and the couple of products have gone 40:48 40 minutes, 48 seconds into the commercialization and we expect that four to five molecules will be going for commercialization this year. So there is 40:55 40 minutes, 55 seconds a good amount of you know the projects with the new customers getting required and I see a good amount of going forward in the coming years in electronic chemical space. 41:05 41 minutes, 5 seconds Can you uh touch upon the end user which specific area space uh this these molecules are targeting? 41:14 41 minutes, 14 seconds the semiconductor then the more the semiconductor and the uh high-end application of electronics to keep that 41:25 41 minutes, 25 seconds okay are these only for domestic market or for export as well they only work in a global innovator market 41:35 41 minutes, 35 seconds thank you so much all the well thank you we take the next question from 41:43 41 minutes, 43 seconds the line of AIT Kada from Canada Roberco Mutual fund please go ahead. 41:49 41 minutes, 49 seconds Yeah. Hi sir good morning and thanks for giving this opportunity. So my first question is uh have you seen some kind 41:56 41 minutes, 56 seconds of a price uh realization impact in some of our key product. I just wanted to understand how the pricing or the 42:04 42 minutes, 4 seconds realization is also behaving uh when you are anticipating revival in the group. 42:12 42 minutes, 12 seconds Well, let me put it this way. Price realization has overall in the industry shrunk as you can see and clearly because also the costs of raw material 42:21 42 minutes, 21 seconds come down. The company strategic focus is to continue to manage his gross margins and while we continue to look at 42:28 42 minutes, 28 seconds optimizing to be competitive on the price front to capture value and volume both at a balance at a balanced level. 42:35 42 minutes, 35 seconds So that would be the approach and that's a part of the cyclical industry like egg. 42:43 42 minutes, 43 seconds So is is it fair to assume that uh what the p some kind of impact is also seen in our portfolio in terms of some 42:52 42 minutes, 52 seconds compression in the price realization portfolio mixes always have a challenge very clearly and that's a cycle life 43:01 43 minutes, 1 second cycle different product different phases but the point is the management focus of the companies to see how they continue to manage across margins so portfolio is 43:09 43 minutes, 9 seconds one strategy technology is the That's a bit of strategy. The third is the market to create value and create. Those are the three strategies and that's what creates margins. 43:19 43 minutes, 19 seconds And uh just to extend this particular thing, the [clears throat] uh 43:26 43 minutes, 26 seconds the things what we like when we uh when there is a prize compression uh the thing what we can disc uh we often 43:33 43 minutes, 33 seconds discuss with the marriage uh client is like uh some past or some uh uh 43:43 43 minutes, 43 seconds you Hello am I audible now? So I am saying that what are I'm not so hear you. 43:51 43 minutes, 51 seconds Am I audible? Sorry. Yeah. Hello. 43:55 43 minutes, 55 seconds Yes. So, uh my extension to the question was like uh what's the recourse in this particular thing is that only recourse 44:02 44 minutes, 2 seconds is that we try to do lot some backward integration and uh and [clears throat] that's how I try to be better in that 44:10 44 minutes, 10 seconds particular product uh when there is a price compression happening for that particular product or is there a way of finding out Yeah, your backward noise is too much. 44:20 44 minutes, 20 seconds Secondly, I didn't get your question. So, I don't know how we can we get that. 44:24 44 minutes, 24 seconds Maybe maybe I'll just come back. I'll just uh fix something and I'll come back with my second question. 44:34 44 minutes, 34 seconds Thank you. We take the next question from the line of Adita Jawer from Invest. Please go ahead. 44:41 44 minutes, 41 seconds Yeah. Hi. Uh thanks for the opportunity. 44:44 44 minutes, 44 seconds Um so my first question is I hope you guys can hear me. Yeah, we can hear you. Yeah. 44:50 44 minutes, 50 seconds Yeah. Yes. Yeah. Yeah. Yeah. Uh sir you know if you can give me some sense that how has been our penetration in some of 44:59 44 minutes, 59 seconds the new clients. So clearly over the last four five years we would have added multiple client in different geographies. So is there a line of sight 45:08 45 minutes, 8 seconds where we can see that in the next couple of years we should see a meaningful ramp up in some of the new relationship we have you know uh we have you know started. 45:18 45 minutes, 18 seconds So which business area are we talking this about? 45:21 45 minutes, 21 seconds So CSM this is you know the I think the elephant in the room. 45:26 45 minutes, 26 seconds So in the ad business we cover all the players already. So it's expanding new businesses. But if you're talking about the electronic and the new verticals, 45:35 45 minutes, 35 seconds that's where we are basically focusing in companies. We got five new customers in the areas of electronic chemicals primary Japan and in certain European 45:44 45 minutes, 44 seconds customers for highend specialtity technology development products. 45:49 45 minutes, 49 seconds Yeah. Yeah. So you know continuing with this Mayanki you know in the Akam business um as we you know had a strong relationship with Japanese innovators uh 45:58 45 minutes, 58 seconds is there a line of sight where we can say that we are having meaningful contribution coming from say European American innovators in the next couple 46:07 46 minutes, 7 seconds of years based on our existing business you know discussions with them so one I'm not sure because we working 46:15 46 minutes, 15 seconds with the European customers the three big boys for the at least last 20 years And we have been also the pioneering partners. So those have continued our 46:23 46 minutes, 23 seconds dialogue. New pipelines come in, new valuations happen and we developing them. So and also the American companies which you would know of. 46:32 46 minutes, 32 seconds Sure. Sure. Uh fair enough. Fair enough. 46:34 46 minutes, 34 seconds So uh my second question you know Sanjay if you can you know throw some light there has been a uh increase in the working capital quite sharply almost 46:43 46 minutes, 43 seconds from 68 days to 139 days. Uh why? So could you please explain and how we should expect you know the intensity of the working capital coming down. 46:55 46 minutes, 55 seconds So uh you know this is a reflection of you know the global scenario we had one of the lowest working capital uh uh days 47:03 47 minutes, 3 seconds across the industry. Now uh we have to accommodate the needs of our partners and in those lines is where our uh 47:10 47 minutes, 10 seconds networking capital days have gone up much still much better than the industry benchmark or norms. But having said that 47:18 47 minutes, 18 seconds we would not uh we would definitely want uh these I will not be able to give you exact numbers Adita right now but we 47:25 47 minutes, 25 seconds expect to improve this uh as the market scenarios normalize in the coming quarters. 47:32 47 minutes, 32 seconds So uh that's it from my side. I'll just call back into you. Thank you. Hi. 47:39 47 minutes, 39 seconds Thank you. We take the next question from the line of Arch Jooshi from Noama Institutional Equities. Please go ahead. 47:48 47 minutes, 48 seconds Uh thank you. Good morning and uh thanks for the opportunity. Uh so I have only one question. I would like to understand your thoughts uh on the evolving landscape amongst global agree majors. 47:59 47 minutes, 59 seconds uh we have seen some bit of corporate actions happening uh in some some of the uh large uh MNC agro innovators. uh uh 48:08 48 minutes, 8 seconds given this scenario, how do you see the uh development on uh new technologies and patented products coming up uh 48:15 48 minutes, 15 seconds especially regards to their R&D spends and uh what would be our stance and uh capability to have a first mover 48:22 48 minutes, 22 seconds advantage uh uh uh within these patented technologies uh uh going ahead uh so that we can garner uh a good good amount 48:30 48 minutes, 30 seconds of uh uh uh product portfolio and scalabilities going ahead. uh so if you would have a 3 to five years view uh on 48:38 48 minutes, 38 seconds this developing and evolving scenario I'd like to hear more from from you sir thank you thanks I think that's a very good 48:45 48 minutes, 45 seconds question and let me pull this across very well every every challenge has an opportunity and I think PI is the only company which is geared with this 48:54 48 minutes, 54 seconds philosophy of partnership and technology as an innovator which creates an opportunity just not in manufacturing but also in building new entities 49:03 49 minutes, 3 seconds together and I think that's the value proposition. If you look at the history of PI started as partners with licensing, domestic business and scaling 49:11 49 minutes, 11 seconds that up as partnership for innovation the PI way. The next was partnership for innovation manufacturing. Now we will the company will lead the path in the AC 49:19 49 minutes, 19 seconds camp sector for partnering for innovation for new product development not only product development but we opened a few more engines. We've taken the engines of biologicals where we 49:28 49 minutes, 28 seconds creating innovative platforms and partnerships. So the partnership platform and PI innovation are going to be the drivers of which the opportunity 49:36 49 minutes, 36 seconds in challenging environments gives us a differentiator to partner even deeper in the relationship from markets to research. 49:46 49 minutes, 46 seconds Yes sir. Thank you. Thanks. Thanks and all the best. 49:51 49 minutes, 51 seconds Thank you ladies and gentlemen. That was the last question and we conclude the question and answer session. I now hand the conference over to the management for their closing comments. 50:03 50 minutes, 3 seconds So, thank you everybody for joining us on this call and also I would like to highlight today which is to celebrate a founder day an exciting time and day for all of us. So, thank you for being here. 50:14 50 minutes, 14 seconds Bye. 50:16 50 minutes, 16 seconds Thank you on behalf of PI Industries Limited that concludes this conference call. Thank you for joining us.