Ladies and gentlemen, good day and welcome to the Q4 and FY 2025 Conference Call of Best Agrolife Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance of the company, and it may involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will remain in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star, then zero on your touchstone telephone. Please note that this conference is being recorded. Today, from the management side, we have with us Mr. Vimal Kumar, Managing Director; Mr.
Surendra Sai, Head of Strategy and Overseas, and Mr. Vikas Jain, Chief Financial Officer. I would now like to hand the call over to Mr. Vimal Kumar for his opening remarks. Thank you, and over to you, sir.
Thank you. I welcome all to the Q4 and financial year 2025 earning call. Thank you all for joining today's call. Agrochemical industry in India is in need of transformation. Unseasonal rains, sudden climate changes, and unusually hot weather are impacting the crops in a way they are unexpected. Farmers in India continue to be dependent on rainfall irrigation. A farmer first spends on agriculture inputs using credit, but how much the farmer can earn from the crop is not predictable. This unpredictability impacts the complete ecosystem associated with agriculture. These are the facts. In this challenging environment, we are working to achieve business predictability by introducing farmer-oriented products. Our aim is to release three to four patented products every year, products that are farmer-oriented and well-earned the trust by farmers. Our research and development is working with the mission of creating the best brand.
Best Agrolife will continue to focus on product innovation for brand business. This quarter, we have reduced our costs, changed our credit and return policies, and improved the operational efficiency in our brand business. We have reduced our Q4 loss as compared with Q4 of last year, 2024. Our loss has been reduced from INR 92 crore in Q4 financial year 2024 to INR 20 crore in the Q4 of financial year 2025. We are on a turnaround path in our financial and operational performance. We expect to see benefits of our operational and business improvements. We hope to see good results in the coming year with the new challenges in forecasting sales demand, our inventory management, and new sales policies. In the full year, we have improved our gross margin from 24.7% to 29.5%. This is a reflection of our commitment to sustainable growth with focus on inventory management.
We have reduced our inventory position by INR 185 crore and improvement of 19% year-on-year, and reduced our working capital by INR 146 crore, which is a 54% year-on-year improvement. This year, we improved our operating cash flow position to INR 192 crore, which is a 40% improvement from last year. We have also reduced our total borrowing by INR 161 crore, which is a 25% reduction from last year, which is a significant amount our borrowing had reduced. Sales return has always been a major concern in the agrochemical industry. For the FY 2025-2026, we have introduced strategic sales policy designed to drive demand of our specialty products. We expect to see a reduction in our sales return as the same time we are actively monitoring the demand and supply. We expect to drive profitability and accountability across the sales channel with our new changes.
Field trial of our patented product Shot Down has earned very good feedback from farmers across India, and we have officially launched this product Shot Down. It is a combination of haloxyfop and anilofos, and is a powerful herbicide for use in crops like groundnuts and soybean. We have aligned our backward integration by producing the technical haloxyfop in our Gardaula plant. Building on this momentum, we will be launching two more patent products. One is an advanced insecticide brand name BEST MAN , which is a combination of fipronil, acetamiprid, and chlorpyrifos. It is an SC formulation. This product controls aphid, thrips, and fruit borer. This is a single-shot solution for important crops such as chili. We will also be launching another powerful insecticide, FETAGEN, which is a combination of cartap, imidacloprid, and fipronil in a GR formulation.
For this formulation, I mentioned in the last two earning calls also that we are going to launch, so this time we have launched this product also. This product is for sucking pests and borer in crops such as paddy and vegetables. Like this, we have many more in the pipeline with the CTPR combination, as I said many times in the call. This is one of that. Moreover, we will be launching an exciting range of organic fertilizer and biostimulants. These products represent the next wave of our research-driven approach and are designed to support farmers in achieving higher yield and support sustainable farming practices. Our dealers, distributors, and farmers are requesting us for new products that can solve their multiple problems with one shot for which Best Agrolife is famous in the farming community.
We will keep up with our commitment to delivering three to four cutting-edge patented crop protection solutions every year. Our technical research and development team has taken up the challenge of fully backward manufacturing of new herbicides. We were the first in India to develop fully backward production of diphentarone, which was a core technical in our brand RONFEN, our first patented which we launched in 2021, 2022. We will soon be the first to make fully backward topramizone herbicide also. This year, we are planning to brownfield extension of our technical plant with a CapEx investment for the project that will be tuned to INR 90 crore. We will strategically expand our R&D capabilities with new product releases. We will be committed to developing safe products for the benefit of the farmer and the environment.
In summary, at Best Agrolife Limited, we are well positioned to expand our combining innovative products, regulatory momentum, and strategic partnerships. Our commitment to never-commissioned patents and brand business will lead us forward. As we look ahead, we are fully aware of the short-term headwinds that we are facing, but we are equally confident in our ability to weather these challenges. Despite the fluctuation in financial performance, we continue to focus on our long-term sustainable growth. Our commitment to innovation, strategic investment, and customer-centric approach remains stronger than ever. We are confident that the foundations we are laying today will enable us to achieve sustained profitability and create value for our shareholders, customers, and employees in the years to come. In our slogan, we always say, "Farmer first, always invest." Thank you once again for your attention, and we look forward to addressing your questions. Thank you very much.
Now I hand over to Mr. Vikas. Thank you very much.
Good afternoon, everyone. Thank you for joining us with us today. Let me start by sharing the financial performance for the fourth quarter of FY 2025. Revenue from operations for Q4 stood at INR 274 crore as compared to INR 135 crore in Q4 FY 2024, reflecting a year-on-year increase of 103%. This increase was due to the fact that in the previous year, which is Q4 FY 2024, due to unfavorable seasonal conditions, the rabi season was a total failure. However, this quarter has been a mixed bag. We saw that market conditions were more challenging than what we had anticipated, particularly in terms of demand in certain key segments such as cotton, where the acreages were lower, and also there were issues with the chili produce price that impacted the company's performance.
However, as Vimal G in his speech mentioned, despite the numerous challenges faced throughout the year, we have delivered an improvement in our financial and operational performance for Q4 FY 2025. Our focus initiatives on cost optimization, strategic restructuring, and enhancing operational efficiency have yielded encouraging results, leading to a significant reduction in losses. From a negative EBITDA of INR 670 million in Q4 FY 2024 to a positive EBITDA of INR 40 million in this current quarter, we improved the results of Q4 performance. Previously, our Q4 FY 2024 PAT was negative at INR 725 million, has again reduced loss of INR 216 million in this current quarter. Despite these challenges, we remain optimistic about our strategic direction. The direction is to invest in building a stronger brand presence in a long-term priority for the company, and we believe it will position us for sustainable growth in the future.
While these investments have contributed to short-term cost results, they are essential to our brand focus model. Looking at the full year performance of FY 2025, revenue from operations was INR 1,814 crore, which is INR 1,814 crore, as compared to INR 1,873 crore in FY 2024. We saw revenue growth coming from a strong performance in the branded sales. The volume growth in branded sales was 14%, but due to the price decline in various non-patented portfolios, the overall revenue from branded sales was flat at INR 1,190 crore. Branded sales was the primary revenue generator when compared to the institutional sales segment, contributing in a ratio of 66-34. Marginal gain from the previous year, which was 64 and 36%. This shift towards branded products reflects our strategy to focus on premium value-driven offerings that cater to ever-evolving market needs. For FY 2024, EBITDA stood at INR 200 crore as compared to INR 225 crore in FY 2024.
The contraction in EBITDA is mainly attributed to the increased cost associated with the strategic pivot to branded products. This transition involved higher employee cost, particularly as we expanded our marketing sales and especially the geographical expansion in south and the support team to manage the growing brand portfolio. In addition to this, other operating expenses also rose due to the incremental travel and marketing costs as we scaled our market presence and engaged more actively with our customer base across various regions. The focus on the branded sales has led to improvement in margins from 24.7% to 29.5%, and this is likely to improve further in coming years. Cash flow from operations saw a drastic improvement from INR 35 crore in 2024 to INR 228 crore in 2025. This led to a reduction of our short-term borrowing from INR 670 crore to INR 453 crore.
Based on our learnings from the years that have gone by, we have done various changes to the policies to improve the performance for 2025-2026. We will continue to concentrate on the branded business and improve our gross profits. We have a strong patented product portfolio as of today, and as has been discussed, we will be launching another three to four products this year. In addition, we will also be launching a range of biostimulants. We are on the course of cost optimization drive for financial year 2025-2026. Our investment last year in brand focus helped us to create a brand pool. We would now be spending much lesser this year. Also, we are restructuring and merging various regions to reduce our OPEX. Additionally, we have made several changes in our policies for the majority of our products to reduce the sales returns.
Our key focus would also be to reduce the working capital cycle and especially with better inventory management. Once again, thank you for being with us today. We look forward to your continued support as we move ahead with our transformation. I now hand over to Mr. Sai for updates and concluding remarks.
Good afternoon, everyone. Thank you for joining us today. I'm pleased to give you an update on the progress in our international efforts and the strides we are making to build our presence overseas. We have made progress in expanding our portfolio across countries such as Vietnam, Sudan, Australia, EU region, Guyana, Bolivia, Thailand, Cambodia, Mexico, Taiwan, Mauritius, and Sri Lanka. We have started our exports to Africa, showcasing early traction in the MENA region. International customers in countries such as Sri Lanka, Vietnam, Thailand, and Bolivia are interested in our patented products, and they are interested in going ahead with the registration of these specialized products. Also, we see a significant amount of interest in our own nano urea formulation. This year, we were granted an international patent in the OAPL group of nations for RONFEN. Additionally, collaborations will play a key part in our international expansion.
This year, as we had already previously stated, we had signed an MOU with Shanghai Yitong Chemical Company Limited based out of China, and this was aimed at exploring joint registration opportunities, potential partnerships, and an exchange of technical know-how. I'm pleased to give an update that early work on intermediate collaboration is in progress for the technical manufacturing. Likewise, our R&D in the fully backward technical manufacturing is progressing well with pilot production of newer chemistry-based herbicides and fungicides. Based on the good progress in the technical manufacturing and R&D efforts, we are now going ahead with our INR 90 crore groundfield expansion at the Gujarat plant. This primarily will lead to us having three functionally separate blocks for the production of insecticides, fungicides, and herbicides.
After the success of our fully backward manufacturing of diphentarone, the plant is now on plan to develop a fully backward process for the manufacturing of high-value herbicides, the first of which, as Mr. Vimal G already mentioned, will be topramisone. Meanwhile, while we focus on our area operations in the short term, we believe overseas markets are an important lever for us in the medium to long term. Specialty formulations, newer chemistry-based fungicides and herbicides will be our product for the overseas market. Thank you again, once again, for your attention, and we all look forward to addressing your questions. I now hand over to the event moderator.
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 touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Hemant, an investor. Please go ahead.
Hi sir, good afternoon. Yeah, my first question is regarding this patent which we received for RONFEN in Africa. So what kind of revenue are we expecting in FY 2026 for this product?
Exactly. While we have got the patent for RONFEN in Africa, I would like to advise that this will take time for registration. As you know, there are two types of registration. One is an equivalent of what is called as a MeToo registration, and another is what is called as a newer chemistry registration or a newer formulation registration. Patented products and formulations like RONFEN fall into the category of newer chemistries and which have a longer duration of time frame for regulatory approval. Hence, this will take at least a couple of years before we see the revenue stream from products like RONFEN in Africa.
Okay. Regarding the sales return that we had in FY 2024 and 2025, the number is too big. What kind of policies do we have this year so that we can decrease those sales returns?
We have made a couple of changes. As you know, we have grown pretty fast in the last two years and increased our branded sales tremendously. Whatever we have understood in these two to three years, we have changed a little bit of policies. For example, there are close to 50-60 specialty products where we had, based on whatever seasonal condition in the last two years, might have taken a little higher sales return. This year, we have put certain restrictions that we are not going to take more than 5%, and accordingly, have planned our numbers with the sales team to say that, okay, the demand planning would be much better so that our sales return would be much lower. This is one.
Secondly, a few of the key products also we have put under CAST sales, which were having certain issues with respect to undercutting the market. This also will help in reducing the sales return. These policies we have done for the current year.
Okay. Are we planning for any additional incentives for dealers to reduce these numbers?
It does not depend upon the incentives to dealers. Rather, it will depend upon the work which we put along with the farmer. We have close to a huge number of field staff or the demand generation executives, what we call. Their primary task is to go and educate the farmers. Once the farmer is educated and there is a demand which is created, the sales team will accordingly do the sales. This combined effort will help in much reduced sales return.
Okay. Sir, one number was surprising to me when I saw today's presentation. The patented revenue for this year is only INR 367 crore. So is that number correct?
Yes. Our patented products are close to that number. Correct.
If I'm not wrong, we were expecting around INR 300 crore of revenue from RONFEN itself. So then why this kind of less revenue is there for patented products?
RONFEN, as I mentioned in the previous year, there were certain pockets. One is that the cotton acreages itself had gone down by 30-40%. There was a huge reduction in the cotton acreages in the last year. That was the main reason because of which the RONFEN sales were lesser as compared to what we thought. This year, we see that the acreages are increasing compared to last year. We are hopeful that this year we should be coming back to much higher numbers for the patented products.
Okay. Sir, one last question from my side. In Q1 and Q2 last year, we had high cost inventory. Is that fully completed now?
Last year, when we started, there was a big issue with the China dumping in India market, and there were many products where the cost had gone down by 30-40%. This year, when we begin, there is hardly any such dumping what we see. There might be some small reduction here and there.
I was thinking about that dumping. In the Q1 and Q2 last year, we had high cost inventory in our books, which was sent to the dealers. Few sales returns were there, right, in Q3 and Q4. Did we get those high cost inventories back to our books? That's the question.
Okay. Whatever returns we had, mostly it is from the patented products, and those patented products were always at our lowest cost only. We did not have, the correction was mostly from the specialty or the generic products when prices are corrected. We do not face that problem because mostly the returns were from the patented products, and it is not at high cost.
Okay. And what kind of numbers we are looking for FY 2026?
We are not giving any prediction with respect to what % increase we want. Rather, our main focus this year would be with respect to the profitability, improving the gross margins, and reducing our cost and improving our cash flow. The concentration is more on the bottom line.
Okay. Okay, sir. Thank you so much.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. The next question comes from the line of Vansh, an investor. Please go ahead.
Yes.
Yes, Mr. Vansh.
Yes. Yes. Thank you for the opportunity. My question is on what sort of revenue contribution do we expect from our additional launches, the new two products that we are launching, plus the day-to-pro patent targets that we have? What sort of additional contribution and profit do we see in the future?
Yes, Mr. Vansh. Thank you for the question. In fact, which we are launching this year, more three products, which is our patent. Any product which we start in the first year, revenue did not come like in three digits. It will come on two digits only. But we are trying, and our target is to achieve with these three products.
Hello?
Yes, please continue.
Yeah, yeah, yeah. These three products will give us near about INR 150 crore additional revenue for the first year that we are expecting. In general, any product like we launched the first year, our product RONFEN was also like less than INR 50 crore. The next year, it was INR 100 crore. This year, you can see near about INR 150 crore. Each year, it grows according to the market potential. These three products can be very big products for the next three years, after three years. Right now, only we can say this year we are expecting for three combined products, INR 150 crore of revenue.
Yeah. Thank you. That's it from my side. Thank you.
Thank you. Thank you.
Thank you. The next question comes from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Namaskar, Vimal G, Vikas G, and Shailendra. Thank you for hosting the call and addressing the question. And addressing that with the input. Sir, firstly, if we take the Q1Q performance, we see in the P&L line item, the other expenses line item showing a significant decrease. If you could just give what kind of comparison should we draw Q1Q basis because the revenue has been flat, but December versus March quarter, I'm just alluding to the comparative financial results. Firstly, if you could just explain to us how comparable are these numbers?
So you're talking about Q1, Q2, or Q3 and Q4?
Q3, Q4.
Q3, Q4, right? Q3, Q4, even though revenue is flat, the majority number which is included in other expenses is the marketing expenses. In that marketing expenses, also there are major expenses because of the demand generation executives, the off-shore employees. What happens is since it is a seasonal business, there is higher demand of these executives during the season. Based on the requirements, these people are reduced as and when the season is not there. The majority expenses go higher and lower based on that. Since January to March is the most lean season, the number of employees for the executives will be much lesser. Also, as we mentioned that based on whatever learnings we had, we are trying to restructure our regions and the areas. We had restructured various regions wherein which, based on our expectations, were not performing.
We had merged those regions and reduced our headcount as well. That is the reason you see much lower other expenses in Q4 as compared to Q3.
Sir, when we take this number for a year as a whole, although our top line has remained flat or reduced, this line item has moved up significantly from INR 151 crore to INR 224 crore. With the type of cost optimization you have spoken, what should we look into this going ahead? If you could just show some light. Also, one point was about the forex impact. How has forex impacted the P&L for this quarter and year as a whole? If you could just allude how it might be to that aspect.
For this, coming to the increase in other expenses compared to last year, as we mentioned that because we had launched four patented products, there is obviously initial higher marketing cost and the branding expenses because you need to launch these products across India. That was the reason that our cost was higher. Also, we were setting base in various regions which we were not present earlier, and we had hired a lot of people last year. This is also one of the reasons that our expenses were higher. With respect to forex, yes, because of volatility from November till just about February, there was a lot of volatility in forex. We had incurred for almost about INR 10 crore-INR 12 crore for annual, which also is included in other expenses.
Right. Sir, when investors look at companies or sectors, there are sectors which we investors also need to understand wherein we can model out how the working of the sector and the company in specific will be. Taking into account the type of lumpiness in the numbers, the nature, the aggregation of the industry wherein we operate, and if you refer to the previous calls also, we have fallen short in various aspects for whatever good or bad reason. What should exactly investors be looking forward for from the management in terms of the operational and financial performance for the current year if you would have definitely budgeted and worked out? Which is achievable taking into account the exigencies of the businesses? For the exigencies, yeah, please.
Yeah. So there are a few points. One is with respect to the projections and our actual results. One is because we have put ourselves a very high expectation that we want to grow pretty fast, and obviously, we are on that course, there might be chances that, okay, we might miss the number because our number or the position itself are very high. Many companies which would have taken close to five to seven years to achieve similar kind of numbers, we are trying to achieve those in two to three years. Now that we have found that base in the last two to three years wherein we are able to put our brands and we are able to put the entire setup, we are confident that going forward, our numbers would be as a year-on-year or quarter-on-quarter will be much better.
The last two years, obviously, as you have seen, our branded business has grown from almost INR 400 crore to INR 1,000 crore. You might see certain hiccups wherein our projections are still pretty high, and there might be some shortage here and there. With respect to agri business, again, a few points is the whole USP for us is we are launching with various patented products. As and when the company grows, and if you are only stuck with only specialty or generic products, it becomes difficult to grow in this business. Since we are growing, since we are launching various patented products, we are actually capturing market share of various MNCs.
This will help us grow and also to avoid these seasonal factors because once we have more patented products, the acceptability of the brand by the farmers, once it is established, it becomes easier to grow for next year, which is not the case with generic or the specialty products. Yes, we are in the seasonal business, but the answer is that the patented products, these are main strategies wherein we want to grow pretty fast and also not to deviate from these, not to have issues with these seasonal conditions.
Sir, a small point, and then I'll join the queue. Sir, we are already two-thirds into the first quarter of the current financial year. Also, we have seen that monsoon advent has been a week or 10 days earlier when it hit the shore for Kerala and the southern region. Taking these factors into the premises, are we in line with what we have anticipated for the Q1, at least in terms of what we have planned? Are things in the right direction, or here also how are we positioned in terms of things? We have almost done two-thirds of the quarter.
See, this is the time May, or rather I would say end of May is the time where the big flow of placements and sales will start. Yes, we are geared up, and almost the entire factory is working full-time. The warehouses have been sent all the materials. The good part is that the season is good. Once the season is good, you can assume that the sales also will happen. There is no specific number which we can give because, as we mentioned, we have done some changes to our policies wherein we do not want to come to a situation where we push too much and then take back later on.
There might be a situation wherein, okay, we are selling, but suppose some sales which we are supposed to do in June might come in July, or based on seasonal conditions, might happen in June as well. We are tracking it on a daily basis. Since the season is good, rest assured that the numbers also will be good.
Right, sir. And sir, can I take just one more question about the finance cost? That has also moved up for this financial year on a controlled basis. It is up to INR 107 crore from INR 82 crore. As of now, sir, what is, I think, to be what should be our net debt and the cost of fund, I think, which is only the working capital requirement that we have, that is in foreign currency?
Last two years, because of various reasons, especially the seasonal conditions, we have been having pretty high working capital, especially the inventory. As you saw that just about in the March end, our inventories were lower by INR 185 crore, and even our borrowings were lower. The present borrowings, what you see, will mostly remain. The lower number, what you see, will mostly remain because we will need that for our growth. Our loan borrowings have gone down by more than INR 1 billion. The present borrowing will remain for this year, and accordingly, the finance cost also will go down.
Sorry, sir, I mentioned the number incorrectly.
Our cost of, just to add, our cost of capital is between 9.5%-10%.
Okay. Sir, I had mistaken in mentioning the finance cost at INR 176 crore. It is similar to the last year level for me. It was the employee cost, I think. I just mistaken the number.
Yes.
This will remain flat only, sir, because quarterly run rate is INR 17 crore.
Yes, yes, it will remain flat.
Correct, sir. Sir, lastly, about the brownfield expansion and the money which we have put in INR 90 crore, Shailendra was mentioning about it. What will we be achieving through this INR 90 crore investment in terms of the top line? If you could just allude to this brownfield expansion, and what is the cost effect that we have outlined for the current year?
The overall project cost is INR 90 crore, and this will mostly start within a month or so. It will take close to one year or so to complete. The effective generation or revenue or on the profit will start only from 2026 to 2027.
Okay. What is the next step, sir?
Saket, I would request that you join back the queue.
Yeah, yeah. Sir is answering. I'm just listening, sir.
Yeah. With respect to top line, what I can mention is the products, what we are planning to manufacture there, the revenue and the EBITDA will be much higher than the average what we have presently. This obviously will be increasing our EBITDA percentage overall.
Right. I'll join the queue, sir, for the follow-up.
Thank you. Ladies and gentlemen, in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue. The next question comes from the line of Sanjay, an investor. Please go ahead.
Hello. Hello everyone.
Yes, Sanjay.
Yes, Sanjay. Please go ahead.
Hello. Yeah, yeah. First of all, look, congratulations on a good operational numbers compared to last Q4. The numbers have been better. My question is about in Q4, what were the contributions from the export revenue? And how are we seeing export doing in Q1 and Q2 of this FY 2026?
Yes, please. I'm happy to say that we started our exports. Currently, we have had a few smaller orders. The range of exports currently, the order value that we are seeing is in the range of around $250,000. We have completed the two consignments. We are expecting another consignment in the order range of around $150,000. These are initial and starting steps. Over a period of time, we will obviously see a good amount of retraction based on the fact that the quality of the products that we have sent has been accepted and been appreciated. There will be a larger amount of exports which will kick in when we are able to send across more of our specialized products.
For that, and the work for that in terms of getting the registration is the ongoing process which we had mentioned that over a range of countries, the registration work for our specialized products is what we are looking for. I might take a special mention for a couple of countries where we have seen a good amount of attraction. The first is Vietnam, and the second is Sri Lanka. In both these countries, our partners have shown a significant amount of interest in registering our patented formulations to be able to take across in these countries. They are willing to be able to fund the complete registration process as well, which, if I may say so, is significant when these are not of the MeToo variety.
That said, when it comes to the actual numbers and what we sort of expect in this year and in the next year, that will slowly grow over a period of time while we take the low-hanging fruits of using the existing registration for export. The higher value registration of the patented and specialty products will kick in over a period of time.
Okay. This time, I think you are not planning to give any guidance. That is what I am hearing from your call. Considering now almost two months are over and the monsoon has started early, are we seeing that Q1 and Q2 is going to be better than last financial year, Q1 and Q2?
Yes, Q1 and Q2, based on seasonal conditions, we see as of now looks to be good. As we mentioned, based on whatever we have had in our previous years, we are concentrating more with respect to quality sales, especially with respect to our patented products to avoid sales returns and to reduce our costs. Yes, our team is geared up, and already all the infrastructure with respect to inventory and warehouses and the sales which are already started happening. We see a good Q1, Q2 numbers.
Yeah. My last question is about we have launched Shot Down recently. Was there any PR done or it was just launched? PR, whether any PR was done? New products that we are going to launch, are we going to launch any products in Q1 and Q2, or it will be in Q3 and Q4?
As we speak, Shot Down must be sold from our warehouses as of now. Shot Down was one herbicide which we were not having in our portfolio, and it was a pretty big market. Shot Down is being presently sold from our warehouses. The other two products, BEST MAN , will also come by Q2, and FETAGEN will take a little more time, possibly Q3 or Q4.
All right. Thank you very much, and all the best for the FY 2026. I'll be back in the queue.
Thank you.
Thank you. The next question comes from the line of Ankur Agarwal from R.C. Business House Private Limited. Please go ahead.
Morning, sir. In financial year 2022-2023, we are on 18% margin in our balance sheet. Today, we are on 11%. Is there any possibility in this year 2025-2026, can we go to 18%?
Are you talking about EBITDA margin?
Yeah, yeah, EBITDA margin.
Yeah. As I've been clearly saying, our target for 2025-2026 is clear to improve the profitability. You will certainly see a drastic improvement in our EBITDA percentages this year. The key would be the profitability, to improve our profitability this year.
Better than 15%?
Sorry?
Better than 15%?
I would not want to give any specific number, but yes.
From where?
Sorry?
In the range of 15%-18% or maybe 11%-12% or 13%?
Yes. It should be clear in that range of 15-18%.
Okay. In the volume increase, top line will be from there 20% improvement growth in top line?
Top line, clearly, we are not giving any numbers to say what we would want to achieve because we have done certain changes. We would want to see how it happens this year. We are pretty hopeful to say that we should not be having much sales return. Also, based on the new products which we are launching, plus the biostimulants, we should see growth in our business this year.
Okay. Main focus is bottom line to improve the bottom line.
Yes.
Okay. Thank you. That's all from my side.
Thank you.
Thank you. The next question comes from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Yes, sir. Thank you, sir. Sir, INR 90 crore which you have mentioned for the cassette, we have last year in the plant machinery, we have spent INR 21 crore, and the previous year was INR 45 crore. And our property plant and equipment is closing balance is INR 177 crore. So can you give where this INR 90 crore figure has been subsumed? How much has been spent, and when will the entire amount be spent?
We have just about spent close to INR 7 crore-INR 10 crore. This will be extension in our existing plant in Gardaula, which is in Uttar Pradesh. We have a technical plant there. These three four products, the setup which we are going to do. The base of INR 7 crore-INR 10 crore is just an initial expense which we have recently spent. The actual full-fledged will start only from, I can say, in the month of June, possibly mid of June or end of June. We have not started it full-fledged. We got it sanctioned from a financing company and start in June.
How much will we be spending this year on this INR 90 crore project wherein we have spent INR 7 crore? So balance INR 83 crore, [Foreign language] ?
If I go by the target, mostly we should be closing this completion by March or April. It will take between 10-12 months.
Okay. And sir, when you look at this line item of right of use assets, these are any towing services that we do, or what does this amount signify, a closing balance of INR 660 million?
Sorry, I missed your question.
Sir, in the non-current assets, we see closing balance of right of use assets. So are these any towing activities that we do? What is the significance of this amount lying in the non-current assets?
This is mostly during the acquisition what we had done for various entities last year in March 2024 and before. Those have come along with those acquisitions.
Lastly, sir, for investors, what should we look at the peer comparison? In the space where we operate, where we compete with other listed players, who are our key competitors wherein a like-to-like comparison in terms of product profile can be made true? Also, sir, in terms of the raw material basket, what kind of integration do we have, backwards integration currently, or are we in the process going ahead? How are the raw material prices currently shaping, and the key ingredients of that?
I'll answer the first question. With respect to the kind of portfolio we have, most of it, we are gaining our market share from the MNCs because those are the players who were having specialized products, and a market was there. We are getting from there. This would include various MNCs. Plus, if you see various Indian companies, almost it's not that it's a one-to-one comparison of just one or two companies because each state, there are different crops, and within that different crops, there are different companies who are selling higher or lower. We compete in each state differently with different companies. Almost if you take all the listed peers, there are competitors in one or the other way in one or the other state. That's the clear comparison. For second question, Saiji will answer. Yes, Saiji.
Your second point was, if I'm right, was regarding the cost of raw materials and its impact on us. If I may say so, one of the key raw material providers was China, and it continues to be China in terms of the intermediate. Over the period, what we had seen was we had seen a significant amount of crash in the prices of both the technicals as well as the intermediates. This year, I would say somewhere between Q4 till now, what we are seeing is we have seen prices stabilizing, at least on the upward trend, but we do not see much of a crash continuing which we had seen previously. That said, what we have been doing over the past couple of years has been to try and reduce our dependence on the China intermediate market. This is an ongoing process.
When we had talked about a fully backward integrated technical manufacturing, which Mr. Vimalji and I had mentioned previously, we are 100% using raw materials and intermediates which are based out of India. Certain processes, we will try to be able to see how much we can be completely independent of intermediates market from abroad. At this particular point of time, what we will be doing is we will be working on producing these technicals primarily to be able to drive our brand business in terms of the patented and specialty products. Over a period of time, technical manufacturing unit will be able to produce more amounts of our technicals for global markets, which is essentially aligned with our complete strategy of specialized materials for India market as well as for global overseas markets.
Sir, what is the percentage of integrated?
[cosstsalk]
So only.
No. Only.
Thank you.
Okay.
Thank you. The next question comes from the line of Abhijit Mithra from Aionios Alpha Investment Management. Please go ahead.
Yeah. Thanks for taking my question. My question is more on the cash flows. Because I see Q4 September, that is in the second half, it is almost INR 400 crore release in receivables and INR 100 crore release of inventory. Just wanted to understand what kind of measures you have taken to see this kind of significant release in cash flows in the second half? How much of that do you feel can carry over? How many of those measures can you carry over in the next year as well? Just your thoughts on them.
I have to give since I think beginning of the year, we had been discussing that we were beginning in terms of the previous test level, especially the inventory also was at highest level and including the receivables. As the year went by, we had improved on and we had clearly given the guidance that the working capital will improve going forward. That is what you saw that throughout the years, almost we had more than improvement by cash flow by INR 200 crore as compared to last year. Even presently, what you see still, we feel there is a lot of scope, a good 20% or so reduction what we feel should happen throughout this year. This will unlock the cash flow further for this year as well.
With respect to receivables, yes, there might be certain times where we are a little higher or lower because when we have a business based on the conditions, there might be certain receivables which might take time to recover also. It is pretty clear that with respect to inventory from this present number, also we will see a lot of improvement going forward. With the new policies which we are bringing for this year, we will certainly help.
Got it. Got it. And just to confirm our sort of keeping questions, what was the final sales return number for the full year? What was the discount and rebates number for the full year if you have those handy?
See, overall, the sales return for this year was anywhere between 17-18%. And with respect to discounts and all, generally for this industry, it is between 12-14%. So that remains here.
Understood. Understood. Great. We can see a substantial reduction in this percentage of at least the returns over next year, right? Sorry. I mean, in terms of.
Yes, yes. We are able to have a substantial reduction this year, which is written.
Okay. Okay. Any percentage that you have thought of? If 70.5% can go down to, say, 10% or 5% or any numbers that you have sort of.
See, just at the start of this year, we don't know how the market will perceive and what will happen. We want to be pretty advised to say what might happen, but we feel that the election should come and because election should happen. That is the goal of this country, that we want to come to a place where our returns are much lesser because it creates a lot of issues with respect to inventory in terms of cash flow. Election will happen. Now, what percentage, what thing we have to see this year?
Got it. Got it. Understood. Appreciate it. Thanks a lot, and wish you all the best.
Thank you.
Thank you. We take the last question from the line of Sanjay, an investor. Please go ahead.
Hello. So this last, I think, December, I think Q3, there were multiple warrants that were issued, about INR 3,125,000. And it was mentioned in the last release that about 25% of the warrant money was not received due to some technical issues. Is the money received completely? What is the probability now we are seeing that remaining 75% of the payment will happen in which financial year considering the market condition and the drastic reduction in share price?
Yeah. So we have got a commitment for INR 1.5 billion for the overall QIC, and the 25% of which is INR 37 crore we received it fully. There was some technical issue at that time from one or two of the investors which we got after a week or so. We got 25%. Now, as you rightly mentioned, there are certain challenges in the market wherein we cannot go and take the balance 75%. As and when we feel there's improvement in the market, we'll certainly go back to our investors to take the balance 75% as well.
Do you have a full closing of this and getting the money raised in this financial year?
Yeah. We should be hopeful to raise it this year.
All right. Thank you very much. All the best.
Thank you. Ladies and gentlemen, with that, we conclude the question and answer session. I now hand the conference over to Mr. Surendra Sai for his closing comments.
Thank you. Thank you very much for the questions. We hope that we were able to address the questions in completeness. Feel free to be able to reach out to us on our investor relationship channel for any follow-up and further questions. We will always be open to these. Q4 may be called as a cut as we continue to focus on financial, brand, and sales discipline. Work on profitability, cash flows, inventory, and returns is what our direction will be for Q1, Q2, Q3, and Q4 of this year. If I may say so, today, we are very positive on FY 2025-2026 as we are affirmative on our disciplined approach, and yet we will continue to have an aggressive R&D and a product approach. Our products, we believe, are still valued by our customers, and they see a certain strength in the brand bet.
I will conclude that our commitment to our stakeholders is our primary goal, and we look forward to a very positive 2025-2026. Thank you very much. With this, we conclude.
Thank you. On behalf of Best Agrolife Limited, that concludes this conference. Thank you for joining us, and we may now disconnect your line.