Q1 21/22

Jul 30, 2021

Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahabal from Antiques Stock Broking. Thank you, and over to you, sir. Thank you, Inbar. On behalf of NPL Grouping, I would like to welcome all the participants on the call of Danuka Agilitis. From the management, we have Mr. NPL Danuka, Managing Director Mr. Rahul Danuka, Chief Operating Officer Mr. VK Bansal, CFO on the call. Without further delay, I would like to hand over the call to Mr. NK Danuka for opening comments. Post date, we will open the floor for Q and A. Thank you, and over to Mr. Danuka. Thank you, Manishdi. Good evening, ladies and gentlemen. Michael Dante Danuka, Managing Director of Danuka Adequate Limited. I hope all of you are doing well and keeping safe. Thank you for joining us for the Q1 FY 'twenty one 'twenty two results conference call. I have with me Mr. Rahul Danuka, COO Mr. Harsh Danuka, Executive Director and Mr. Ritra Bansal, CFO of the company. Banuka Ipathe is a leading agrochemical company in India focusing on branded sales in the market. The company's strength lies in the manufacturing and marketing of formulated products. The product portfolio is spread across insecticides, fungicides, fungicides and plant growth promoters. Insecticides contribute a significant portion of the overall revenue. Danube Agitech is working towards a vision of transforming India through agriculture by working with farmers closely to improve their productivity and quality and in turn enhancing their income. We work in all major crops in India and have implemented the best in class technology to ensure a smooth and efficient supply chain. To service the diversity of Indian plants and meat of the farmers, the company has a wide range of products in its portfolio with over 80 brands in size sizes ranging from 2 grams to 30 kilobytes These products are in various forms like liquids, powder and genuine. Tanuka has a pan India presence through our marketing team and warehouses in all major states across India. With 3 manufacturing units, 40 warehouses and 14 branch offices across the India, Danube fetters about 6,500 distributors and dealers and around 80,000 retailers. Through this extensive network, Danube reaches out to approximately 10,000,000 Indian farmers with its products and services. Danube has more than 1,000 techno commercial staff supported by a strong marketing team to promote and develop new products. Danube's strong R and D division has worked hard in apland accredited laboratory as well as an excellent team for new products in registration and development. Danube has international collaboration with 9 leading global agrochemical companies from the U. S, Japan and Europe, which has helped us to introduce the latest technology in Indian process. Some of the ambitious steps taken by the government of India to revise the role of advertisers in the growth of Indian economy such as increasing minimum door price, Enam portal and direct benefit transfer via PM, Kritan Samman, will be have helped create a robust foundation to enhance farmers' income and create wider adoption of high quality feeds and judicious use of fertilizers and pesticides. These initiatives will transform India's agriculture and make its competitive globally. The opening month of Mansoon performed quite well in overall outlook with 110% of the long period average. However, there was a slowdown in the rainfall activity from 15th June to 15th July. This has resulted in slowdown in herbicide consumption during this period. During the last fortnight, there is a recovery in the rainfall activity across India with almost all regions receiving good rainfall and this makes us positive about the prospects of the 2nd quarter. Coming to the financial performance for the quarter 1 of FY twenty twenty one-twenty two, revenue from operations stood at INR 363.7 IN crores in Q1 of FY twenty twenty one-twenty two versus INR 373.834 crores in Q1 of FY twenty twenty one. EBITDA is stood at INR 68.86 crores in Q1 FY2021 2022 versus INR 72.65 crores in Q1 FY2021. Profit after tax charge has to be INR 48.60 crores in Q1 of FY twenty twenty one-twenty two versus INR 51.79 crores in Q1 of FY twenty twenty one. There is a slight decline in the performance of the company due to the pressure on pricing and supply of raw materials. Apart from this, the May months, there was a huge impact of COVID at unit level due to which the shops of pesticides were closed down and no sales were happening. Apart from this, the last year, the Q1 was exceptionally well. In June 2019, the revenues of the company was only INR 220 crores, against which last year we achieved 70% growth, which are abnormally high. So to meet that level was a half trillion task, but still I will say that the performance of the company is reasonably strong. Coming to zone wise, share of turnover for Q1 FY 'twenty one 'twenty two. Gulf zone has contributed 28%, East zone has contributed 10%, West zone has contributed highest 44% and South zone has contributed 18%. Project category wise share of turnover in Texas has contributed 29%, 20 5 has contributed 12%, 35 highest contribution 48% and others 11%. The Board of Directors has recommended 100% dividend that is rupees 2 per equity share, which was approved by the shareholders in the 36th Annual General Meeting held on July 9, 2021. The company has launched a co marketing product under brand name Tornado containing cuzilopochiclium plus a megacrya to control broadleaf as well as narrowleaf weeds in soybean and other crops. The company has also received registration of new 9b molecule, 1 kill, which is a combination herbicide for the control of all types of beef in onion sauce. I hope with the introduction of these 2 molecules, we will be able to get a visible market share for these products. As discussed last time, the company has also started working on its greenfield project at the Haywood Lodge. Nanooka regularly organized various seminars to check those fields summaries to educate our farmers about new innovative techniques of farming. Being India's leading agrochemical company, we are at the forefront of introducing digital solutions and innovation. In the same endeavor, we have tried to boost our reach through online and virtual pharma interactions and aggressive use of TV advertisement for our key products such as Sentra, Zaza Super Point, Micro and others. We are focused on expanding our market coverage through our network of distributors and our digital platforms, including social media presence, where we engage with the end customers. We consider ourselves responsible towards securing the farmers' welfare and preserving good security of the nation. We continue to strengthen our association with the farmer producer organization, Krishi, Vijayan Claims and other important institutions to increase our business expertise and boost our market presence. On this note, I would like to hand over to operator to enable us to take question and answer session. Thank you very much. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Our first question is from the line of Rohit Nagraj from MK Global. Please go ahead. Yes. Thanks for the opportunity and congrats on decent set of performance despite a challenging environment. So the first question is on our ITI. So we've seen in the last 3 years, it has consistently come down. On the contrary, we have been able to introduce newer products. So any specific reason for those we are facing challenges in terms of pricing of the new product or the penetration of the same any specific region or why it has been coming down? Thank you. Right. Thank you, Mr. Rohit. This is Harsh. So ICA index here, correct, has gone down over the last 3 years. And the reason for that is in last 3 years, the molecules which we have introduced has not achieved the volume as per our plan. And we are making all the efforts to ensure they achieve the volumes as we move forward. Especially in the last one and a half years, movement in the market has been restricted in different geographies due to the pandemic, which has restricted our ability to develop and generate demand for the new molecule. So that is the major reason for the reduction in high clearance, especially in the last one in the half year. Understood. The second question is on the Greenfield project. So given that again we have faced challenges due to second wave, have there been any delays in terms of commissioning of the project? As I understand, earlier, we had indicated Phase 1 will be coming up by March 2022. And how much revenue potential will have for a flight to a decline? Thank you. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Definitely, some impact comes when such kind of pandemic takes place because during that period, the labor moves to the delays and the availability of labor becomes a challenge, which is required for the construction work. So some delays there, but since we have just started the project, I hope that the time line which we have given March 2023, we will be able to meet out that time line. And after Phase 1 commissioning the any revenues that we envisage in FY 'twenty three? No, no. We are expecting revenue in FY 'twenty three, 'twenty two. All right. Thank you so much, investor Fluxin. Thank you. Our next question is from the line of Prashant Piyani from Prapodak, Iladhar. Please go ahead. Yes. Thanks for the opportunity. Sir, in your EBITDA and top line growth guidance, you have mentioned that EBITDA may be impacted due to carryover of high cost inventory. So we are already in a inflationary environment and everyone has been taking price hikes. So what makes you believe that Dhankar will not be able to take price hike and it may impact our EBITDA growth? [SPEAKER SRINIVASAN VENKATAKRISHNAN:] So July month, as we know, has been a slow traction month, especially month, especially. And similar was the situation in the month of June. So what we have seen is that these delays in pause has impacted the passing on of these increased COGS to the consumer. And that is what is going to impact the pass on, the cost pass on to the consumer. Now with recent rains, the situation is looking really positive and upbeat and the market will be more receptive of both the consumption as a result of the price increase. So I think we will be able to pass on the price hike post this month, post harvest. B. Balaji:] Is it that most of this high cost material is relating to herbicides? [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] It is spread across the entire portfolio. In fact, the early movement is herbicides. So herbicides are initially impacted, but it is spread across the entire portfolio. And sir, due to this delayed rainfall, how much of the herbicide consumption do you think has been lost for the industry and how much can be recouped back due to the recent rains? How much herbicide has been lost for the industry? So as you can say, something between 7% to 10% consumption of our inside goods is lost. Okay. Thank you. That's it from my side. Thank you. Our next question is from the line of Prabhu Singh from Centrum Broking. Please go ahead. Thank you for the opportunity, sir. This is a follow-up to the question asked by the previous participant on the monsoons. When you say herbicide consumption lost, essentially it implies that because of the delay in monsoon, some element of sowing just cannot be made up, at least for Carib. And therefore, in second half, whatever happens to Rabi, this consumption cannot be recouped even in the second half of the sowing season. Is that a correct way to look at it, sir? It could be a possibility, but not necessarily. See, what has happened is that some of the sowing is delayed, but some of the soybeans will be replaced by other crops. For example, in some pockets, soybean will be replaced by onion or a Puer, which means there will be a gap of 1 month where farmer will not be putting in any crop. Increased acreage of onion and pork has been increased consumption of herbicides. So what has been lost so far is the loss of this period. There's a possibility that depending upon the grain intensity and of crop choice, there is higher consumption of fungicides. What is the difference between due to labor shortage, overall farmers' inclination towards fungicide consumption across all crops has increased significantly. We are seeing huge uptake of herbicides even in relatively backward states like Eastern BP, Bihar, Harkon and Bengal. So the demand is consistent, the rainfall and costs are breaking. Got it, sir. So the 7% to 10% number is as of now. As and when recovery happens, this deficit can be narrowed significantly is what I'm hearing. P. Vijay Kumar:] Depending upon the crop shift, the gap can be narrowed, yes. P. Vijay Kumar:] Sure. And then the second question was with respect to the guidance of revenue and EBITDA. Is it fair to assume that because of whatever delay or some disruption that happened in June or rather June through to August, the impact is more in terms of margin? Volumes may not still be affected as much for the full year for us? We have to wait and ask here how the adjusted September stands out. Because July, just in September, we are seeing crucial months for the consumption of specified industry. So unfortunately, because of the deficit will fall in the month of July at the initial stage after the year for July, it has impacted that July consumption. But if August and September, monsoon remains good, then we hope that we will be able to recover. But some sales which has already low, they have that has gone. So that cannot be recovered. So we are aiming for double digit growth by March 2022. And some impact will be there because of the net offtake, we could not pass on 100% price increase to the ultimate customer. Got it, sir. Right. So last question, if I may, with respect to the new project, how much of CapEx are we looking to spend in this year, FY 2022 and 2023? 2023, of course, is the final completion, but 2022, how much of investment will be done? Around INR 80 crores. Sorry, sir. That was INR 80 crores? Yes. Okay. All right, sir. Thank you so much. That's all from me. I'll come back if I notice. Thank you. Thank you. Our next question is from the line of Vishnu Kumar from Spark Capital. Please go ahead. Good evening, sir, and thanks for your time. So firstly, I wanted to understand the current rainfall that has fixed up. Is it sufficient? Or you still think certain regions are still facing some issues? Rainfall, As a farmer, as a greenfield company, I really want recycling my recycling of land. So it is never sufficient and it is never complete, so to say. It has been really well in the judgment areas of Western Maharashtra. It has been really well in the judgment areas of Western Karnataka. It means we have no water available for a large in Maharashtra, in Gujarat even otherwise. East India, we have seen some pockets in floods. There will be dry patches. There will be areas which have not received sufficient rainfall, and we have such focus largely in Gujarat, in Rajan, in U. B. And in Riyadh. Okay. So particularly, would you say that at least 60%, 70% are at least okay at this point and probably 30%, 40% you still need to use more growth? More than 80% is okay. 80% is okay. Got it. And second question of mine would be that Chinese technical prices are again going up. Now if you were to draw the parallels between couple of years ago also we had the problem, things seems to be getting okay and again things are getting a bit off. So what are you seeing this time around, are you thinking this is again going to be a bit more structured and price continues to go up for if you want to just say between a couple of years ago now, are you seeing different or this time also you're seeing we're going to see the price continue driving? Your question is not clear to me. Could you repeat that? I I'm asking on the tightening, the import of technicals from China, where raw material prices have gone up. Couple of years ago, I think it was continued to rise and then we saw some reduction last year and probably I think from second half of 2019, it was slightly coming down. But now again, the trend is picking up. So would you say that this is more temporary or you're seeing that the prices again are going to structurally remain high? I think the prices are going to structurally remain high because of in general price increase in the raw material and globally, including China. So the fees which has held up the prices, the demand side, at the backend, the costs have gone up certainly. Am I able to answer you? I mean, is it are you seeing this is just about in the near term? Or are you seeing more supplies coming in China next year? Do you see any of your key products which you're buying from them, more supply coming or that is not happening between supply price could remain high from that angle as well? I think the prices in general will remain on an upward trend. But there could be many products which have kind of touched our peak and they will be seeing a reverse. For example, if liposase has seen its peak, that should see a reverse. And there could be other such products, which would see a downward trend soon. But the global supply chain, the increase in crude prices, the non availability of containers and logistics issues, these things are adding to the elasticity and keeping the prices on stage. Got it, sir. So you don't see it coming off at least the next 6 months. It's going to remain more or less here, maybe barring a few moments here and there. In fact, these names, they will pump up the demand, so the prices should stabilize before going up. Got it, sir. And so some other listed names have seen strong domestic growth, whereas we've not seen that kind of a growth. Generally, I wanted to understand the view that how some companies are able to report better. Maybe a broad thought would be better if you could just give us some idea of how the industry is slightly different or probably what other companies would have done or what we have probably not done. No, I don't think that there is almost anything which is happening a bit differently here. The only thing is we were able to service the extraordinary demand of the Q1 last year extraordinarily. So what we did in last year Q1 was really above the industry benchmark, above the industry averages and above the industry standards. So just to keep up the back sales in our relatively lower sentiment, in our relatively poor cash flow has not happened. Otherwise, I think so we will be done overall. I'm sure we will be delivering good performance in the coming quarters. Got it. Just one last question. So are you seeing the unorganic market directionally going lower over the next couple of years? Are there any evidence to suggest that, that is already playing out and you see that, that is one area where you can go ahead and capture additional market share? R and D is becoming more and more quality conscious and brand conscious. That is one point. 2nd is the Department of Agriculture and the regulatory mechanism is becoming sharper and stricter. So that vision would help. And the overall productivity in the ecosystem makes it difficult for the unorganized sector to cope up and catch up. So that is where the organized sector and branded organizations and marketing driven organizations like Namco will follow benefits. Okay. Got it, sir. Just one point on the fungicide market share that has grown 12%, is it in line with Indian consumption? Are we lower or higher as a market share, sir? Because it represented probably a very low number on the fungicide market share of Afin. I think so. P. Vijay Kumar:] Recently, I think so, the most important fungicide market of grapes with our offering Japanese offering of Kirali, Nestorium, Konica. We were hardly represented in grapes market. We launched the product last year in September 2020. So there is a long way for us to catch up on the fungicide segment of great for sure. So there is a lot of hope for us to grow. Our next question is from the line of Rohit Nagaraj from MK Global. Please go ahead. Thanks for the follow-up. So the first question is in terms of the input cost pressure. So you have told that generally the pricing of inputs will go up and we will be passing it on through price increases. But how is the ability of the farmer to absorb these prices and if they continuously go up, then will there be any impact on the demand side itself? I mean, your thoughts on this? Thank you. Pharma's ability to absorb the price depends upon largely the commodity prices. And commodity prices are on a significantly upswing most of them. So cotton prices, soybean prices, oilseed prices, most of the fruits and vegetables, their prices realization is favorable for the farmer. So that is what largely would decide the ability to absorb the cost. Pharma is impacted on the other side by the uncertainty caused by absence of earnings. So irrigated pockets like Gudhavri, v. Krishna Belt of Amparathilangana, Punjab, Haryana, irrigated Belt of Mandiparish, they will see a quick and fast uptake once these rains have happened. Overall widespread rains also means that the uncertainty is removed and pharma will be more inclined to go for quick uptake even if the costs are high. So the demand side is appearing only favorable going forward. From the supply side, various products, I took an example of glyphosate, but various products, they are either being unavailable due to the logistics issues or the global supply chains being impacted or they have kind of reached a peak. So for example, Imiga Flowgrade, Pender Matching, 24D Hyatt, MencoreWeb, LIFO Freight. These products have been unavailable low availability or high prices. So if pharma is facing a dilemma, then the options to switch over from one generic to another is easily and readily available. And Banukar is absolutely well positioned to offer alternatives to farmers in case farmers make a different choice. That's right. That is very helpful. So the second question is in terms of the spurious pesticides. So we have seen that last year, I think there was relatively lower ingress of the same because of the pandemic issues and imports code. How are the situation now? And will it have again an impact in terms of the domestic markets, market share partially being taken by these spurious petulants? Thank you. This unregulated market is difficult to observe and predict. So the pandemic situation really put them on a back foot. Now that the pandemic has slowed down, they could be probably back in action. I was earlier answering the question where I say that the regulator has become pretty active. Biosimilents have come under FCO regulation. And there are other initiatives by the industry associations like Croc Life India, like ACFI, whereby the experienced players are being challenged directly and aggressively. So that would be a fight and Nanooka and some industry bodies we are willing to take up aggressively and actively. Thank you. Just one last bit. In terms of our imports of technical from Japan or China, are we facing any challenges in terms of availability or delays of shipments? And are you protected to that extent from inventories and how is the receivable situations currently? Thank you. Okay. So the container unavailability and the logistical issue are certainly causing some delays in supply. And as of now, we are really well placed with our inventory because of relatively lesser offtake in June. So we are really well placed with the inventories currently. And our pipeline is also robust in terms of the shipments happening from Japan. Shipments from China are a bit impacted overall for the industry. In terms of receivables, I think so we are largely as far as per last year. And sooner the cash flows in the market for Pharma will improve and we are already seeing a turnaround in South India happening. I think our cash flows and receivables will be much better off. Got it. Thanks a lot and best of luck, sir. Thank you. Our next question is from the line of Dhruvam from HDFC Fund. Please go ahead. Yes, sir. Thank you so much. Sir, as you mentioned earlier, on a 2 year Asia, if I look, your growth has been superb about 40% plus, if I'm not wrong, which seems quite strong. But in context of your commentary that the market is weak, I mean, because of lower range of gap in range, I'm not able to reconcile what's driving this strong growth and then your commentary that the market is weak. So I'm not saying Y o Y growth. I'm looking at 2 years ago because the last year was a bit abnormal. Could you repeat your question? I didn't get it. So I'm saying on a 2 year basis, you have grown exceptionally well, which is about what, 66%, which is about 30% on a 2 year basis for the quarter. But then in the commentary, you're mentioning that the market is weak because of gap in monsoon. So I'm not able to understand if the demand is strong, then why the commentary is a bit weak? So the demand is expected to be strong in Q2. Q1, we faced a break because of delayed monsoons. So you failed the break, but despite that you have grown at about 2 years about on a 2 year basis, you have grown at about 66%. So this was when the demand was weak, is it? So and before it has had the demand been normal, the growth would have been even harder. Oh, absolutely. So that's what I'm saying. The question was what is it that we have missed. I don't think that we have missed anything. We have not missed anything and we are absolutely on track in terms of catching up. Okay. So is it something that you place it this quarter and there are some returns in the next quarter which can impact you? That is why the sales in 1 quarter will look higher and probably there could be some reversals in the other quarter. And that's the only reason we don't do that. We don't front load the channel. We don't do that. And yes, we do support if there is any break in the season and the channel faces any backlash, then that is our partnership we engage with them. But we don't front load the channel. So we do not have huge inventories in the channel pipeline. Okay. Okay. So because okay, got it. I think from your base, you're speaking about it. So the next question was in the operating cost. Now over the last 2, 3 years, your operating cost as a percentage of sales have improved significantly from about 14% 2 years back to about 10% less than 10% in FY21. Last year, you mentioned this was because of COVID and there could be some reversal and the cost could catch up. So how will we trend now? Even in 1Q, it seems low. So I'm just trying to understand how is the trend now? How do you see it, the pace of growth in the expenses? You see, other expenses are lower in Q1 because of the impact of COOL because the operating in the main and virtually CV impact. Okay. Can you probably throw some give some number around, say, about 11% is it? Or that can be even higher than that? Yes. 15% plus. Sorry, so how much? 15% plus. 15% plus, whatever growth in other expenses? Yes. Got it. Got it. Sure, sir. Thank you so much, sir. Thank you. Our next question is from the line of Chintan Modi from Haitong. Please go ahead. Yes. Thank you, sir. So again, my question is on this revenue growth. So on the base of 1Q after 'twenty, you have grown by almost 66%, which is a very strong rate. So I just wanted to understand in comparison to this, how would have the industry growth grown? Do you have any number? I see between 40% to 45% size. Industry growth grown by 40%? Yes, 40% or 45%, yes. Yes, if I look at the results of some of the peer companies in domestic, I mean, the results were not this kind of an encouraging. I mean, they were good, but not such high number. So what I'm trying to understand is whether this growth rate is coming from new markets we are exploring Or what is changing in terms of are you gaining market share from other players? Or my other possibility could be that our inventory in the channel could be high and which can impact the 2nd quarter. So any specific trend apart from that you think which has led to such a robust growth rate? I mean, if you could just elaborate on that, like any specific product is doing well or any specific geography is doing well for you? There is a significant increase in the distribution network, which is leading to this kind of improvement. So there are 3 major initiatives on the back end, which are playing. And just the last year's pandemic situation multiplied the effect of our efforts. 1 is the branding, marketing visibility efforts to reach out to the farmers, reach out to the influencers and the channel aggressively. So we were able to do that in the midst of the pandemic also even in Q1 last year. So that was one initiative. 2nd initiative is the aggressive supplies and support that we offer to our primary channel as well as the secondary channel. Again, in the middle of the pandemic, we were able to activate our production unit in 1st week of April. We were able to activate our deposit supply chain. We were able to coordinate with the local authorities, district collectors and district magistrate, agriculture, commodity being an essential commodity to reach the channel aggressively. This will be supply chain versus second aspect, which gave us this benefit. 3rd is powerful new products, which we introduced over previous years, had not seen traction. However, labor migration resulted in lot of movement in the business. Overall, attention towards product development and educating the partners resulted in new products moving aggressively even during that period. So these 3 initiatives collectively focus on a sharper curve as compared to the industry. Okay. So you believe that next year, if the monsoon still turns out to be good, then we will be able to sustain this kind of a growth rate? I mean, from a percentage perspective, but at least we'll be able to sustain these numbers, absolute numbers. Absolutely. Absolutely. Okay. And sorry if I've missed, have you given the guidance for full year in terms of revenue growth rate? Yes. For the full year, we are targeting for double digit growth. And as I told that August in September will decide, so we will be able to give you more specific number after the Q3. Okay. Okay. Sure, sir. Thanks a lot. Thank you. Thank you. Our next question is from the line of Archit Joshi from Dollop Capital. Please go ahead. Hi, sir. Thanks for the opportunity. So my question is relating to the new product launches where we have done a significant bit of work. And whilst doing that, we have maintained that some of our flagship products like Taza Super or Sempra and Sakura have. Products like Taza Super or Sempra and Sakura have been very resilient in terms of demand and where there's been a decent bit of volume growth. So my question is despite the product launches that we have done and we have seen our ITI to be going down sequentially, what is it that as a company like you are facing on that front in terms of reaching out to farmers? And probably in same old times pre COVID, had we done the same kind of product launches, our volume growth could have been a little higher. So any thoughts on why this the farmers are sort of resenting from adopting to the new products that we have launched? Pharma is adopting the new products. The new issue on that one, Pharma has aggressively lapped up the channel has aggressively lapped up the generics also. So the generic growth rate has been relatively higher, I can say. In terms of Q1, what happened was unprecedented, unimaginable. In Q1, the channel was lapping up, the farmer was lapping up the generic portfolio across BD side, across insecticide very, very sharply. So there was a disproportionate uptake when it came to generic insecticide and BD side and 1 fungicide. And we are able to service that demand. So that is one key. 2nd piece is you are seeing our flagship products, Antarga, also done really well last year. Also done really well last year. And also offering again a Harvey price in sugarcane and milk received wonderful response last year. Largo insecticide introduced with Corteva has been accepted extremely well and performed really well in this year, especially Q1 in various particulate crops and maize. The Reversator has done really well. We scaled down some of the products relatively faster, and we slowed down our introduction in FY 2019 and FY 2020. So slowed introductions in FY 2019 and FY 2020 means we have a lower IPI in FY 2021 and FY 2022. But you will see that IPI gain traction very fast and will turn around in the next fiscal next financial year. Right, sir. Sir, I was trying to understand if these product launches would have been during the pre COVID time, say, where we used to have a lot of on ground activation sort of activities like the NOCOR Doctors, etcetera. Would that have influenced the buying behavior of farmers much more than what we can see right now. Is that something that could have had a negative bearing? Any comments on that? Yes. Something we do, yes. That is something Danica loves to do, reach out to the farmers, touch the farmer, touch the field, touch the crop, educate the farmer on the spot, demonstrate the results. That is something we have really missed over the last 15 months. And I think so our farmers are missing that, our channel is missing that. We are trying to catch up and compensate through Zoom meetings with pharma, through Facebook Live with pharma. We are emerging scientists from universities, from TVK experts and consultants, bringing an introduction. But thank you for bringing that up. We really miss that. It is painful that we are missing it and our pharma servicing it. Because of which the ICI, the pharma education has been slow, will be slow if the lockdowns remain in action. Sure, sir. Thanks. That's it from my side. Thank you, sir. Thank you. Our next question is from the line of A. Ananda from PGIM India. Please go ahead. Thank you for taking my question. Sir, could you throw some more color on your revenue group guidance? Because you answered the question, you said that you're expecting a double digit revenue growth for this year, which is in line with the guidance that you have given at the end of Q4. And in the presentation, you have put a line stating that you're expecting muted revenue growth in FY 2022 due to delayed bounce. So could you just reconcile these statements? Actually, earlier we were expecting better double digit growth. But now considering the mid single rainfall, we are also looking mid single digit growth in this FY 21, 22. So that's why we have mentioned that because of the not very good rainfall and the impact on the Q1 July 1, we are looking for muted growth in this FY 'twenty one, 'twenty two. So, Yvonne, for double digit growth for FY 'twenty two, for the remaining three quarters, as a whole, you would need to grow at low to mid teens kind of growth to have to end up with a double digit growth. That's the way to look at it? [SPEAKER SRINIVASAN VENKATAKRISHNAN:] Yes, you are right. That way we have to do much higher growth in the remaining period to touch the double digit growth by March 22. And then this would be assuming that the rainfall picks up from this month onwards and that sustains from the remaining 3 months and you have a normal release in season. That's the base assumption that you have taken into account. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] Because if the season is not favorable, then it will be difficult, But we are hopeful that the recent rainfall, which has come, which is giving positive sign. And we do hope that in times to come, as per the forecast, as I said, Stember will be having very good rainfall. So let us close our finger and hope for the best. And for EBITDA margin guidance, so if I assume mid teens kind of revenue growth for the rest of the year, gross margins could remain under pressure. There is some scope for some operating leverage before mid teens kind of revenue growth. That's why one should look at it? Yes. There can be some impact on EBITDA margins also because in the Q1, because of the muted growth or you can say mid teens growth, we were not able to pass on the 100% price increase in the prices of raw materials. Some price increase has been passed on to the consumer, but 100% we have not been able to pass. And since the demand in the Q1 was not that great as of last year, when demand is less, then it becomes difficult to pass on the price increase in the market because of the competition. So that's where we expect that there will be some impact on the EBITDA margin. Okay. Thank you, sir. That's all from my side. Thank you. Our next question is from the line of Rohan Gupta from Edelweiss. Sir, there are a couple of questions from my side. Sir, one is definitely on a very high base of last year. Our Q1 growth was muted. But just wanted to understand, sir, can you give some sense on the industry growth for the Q1 and also the likely growth for the entire FY 'twenty two? So the industry would have probably grown in Q1 this year by about 10% 10% to 12%. Why sir, because last year was good for everybody, I mean not only for our company, but on a heavy basis of last year, you see the industry still has grown by almost 10% in Q1. I think so the industry would have grown by 10%. What is your likely expectation for the full year? The full year expectation, I would have around 10% to 10% again for the industry Because what has been changed in Q1 last year and the growth was that is something which has averaged out. And then going forward, it was normal. Rest of the 3 quarters is comparable for everyone. The leverage that we had in Q1 in last year was a very different leverage we had because of our visibility, our supply chain. So rest of the 3 quarters are going to be on an average about 10% to 12% growth for the financial year. Right. So second question is on the margin pressure, which we have already witnessed in Q1. I understand that our growth was slightly muted and that's why there may be some pressure on margin. But Dankaj, you also mentioned that there has been cost increase in some products, that is across the industry. But sir, you also mentioned already that this time the agri commodity prices are on a higher side almost across all the agri commodities. So is there any farmers' resistance in the market that we are not able to pass on the price increase or it is just on the competitive pressure in the market? You also mentioned that the generic market is completely flooded in the Q1. So because of high competition, we were not able to pass on this cost. [SPEAKER UNIDENTIFIED COMPANY REPRESENTATIVE:] So June July, it was high competition and inventory pressure because of which the cost could not be passed on. Lower consumption, higher inventory pressure, higher competition because of which the cost could not be passed on. As the consumption picks up, then Nanooka will be probably the first one to pass on the cost. As far as we have already entered into high consumption period now. So we are already we have already seen that July is over and getting into investments now, which is a, I mean, a heavy consumption period. You will be getting trends in the market. So as far as your understanding is concerned, do you see that margins should be improving in Q2? Actually, we just look into that. Not in Q2. Okay. So there may be constant pressure on the margin in Q2 as well because the Q2 is the highest quarter for our company as well for the entire industry. That's right. It is for the entire industry, yes. Okay. Okay, sir. That's it from my side. Thank you so much. Thank you. Thank you. Our next question is from the line of Uday Gupta from Kotak. Please go ahead. Hi, this is Ritesh from Kotak. Sir, just two questions from my side. One is that, kind of understanding from the same questions that I've been asking asked earlier. So, of course, the high base, I mean, marginal decline despite the high base. And while your sales growth has been great, last year, there was some shift from Q4 as well and some preponderance of demand from 2Q as well. So large shift in quarter was a fairly strong quarter, right? And on that, you have seen only a 2%, 3% decline. And you have also said that liquidation in the ground and the consumption on the ground probably hasn't been great because, of course, sewing itself has been running behind schedule. So what I'm not able to understand what I kind of not able to understand is that I mean, where does where like if you have seen such a strong YY growth on a 2 year basis, where did the material got liquidated? Because I mean, otherwise, there would be material in the channel. And then secondly, on the presentation, you have said that you have been sitting on high price inventory and that will drive the margin decline. While so I just want to I mean, and I think the commentary suggests that the margin decline is largely due to the raw material inflation, which we are not able to pass on. So could you just connect could you like just give me a sense on both revenue and raw material costs? Yes. You see, because of the very muted demand, it's given a lot of pressure in the market. Now the prices of many verticals are softening. I'm giving a point. Right, right, right. Right? So that was a real innovation. Okay, okay, okay. And that's what I answered on the top line, though, because let's say when I look at your last year, of course, there was a lot of shift from to Q1. And there was some preponement of demand also because of COVID related reasons. There was some preponement of demand also last year. I mean, some book to material actually is in the Q1 itself. So on that base, you've done reasonably well. You've probably hardly declined by 2%, so I'm just asking that if the liquidation is not happening, sewing has been behind schedule. So I mean, like is it that your channel inventory at YY basis is much higher this time than last time? You see, channel inventory normally we see quarter 1, tail is normal momentum in most of the companies. We are not pushing very big inventory, but however, we see the launch will start from 1st with a tune. So people are keeping the material and we see sending to a rigor and load. So this time, again, the material was lying to be disused and the consumption was accepted starting in the first year of July, which is what happened this year. Got it. Okay. Got it. Thank you so much. Thank you. Ladies and gentlemen, that was the last question. I now hand over the floor to Mr. Manish Mahawar for closing comments. Over to you, sir. Yes. Thank you, Inbar. On behalf of Santander Grouping, I would like to thank the team of Dharmika Editex for providing us an opportunity to host the call. Dharmika, would you like to make a closing comment, sir? Yes. Just one comment to summarize at last. Dharmika continues to demonstrate our ability to overcome challenges and emerge stronger despite the uncertain business environment. We are announcing our marketing efforts to capture market share. The basic fundamentals for agriculture and agricultural inputs in India are very strong, and we are bullish on the prospects in the coming quarters and the coming years. So we hope that this rainfall, which has started now, will continue because Sawan has just started. According to Hindu months, Sawan and Bato, these are 2 main months of rainfall. So we hope that this rainfall will continue and the Indian farming community will get the advantage so that Anika will get the advantage in the coming quarters. Thank you very much. Thank you, members