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Edited Transcript of PIIND.NSE earnings conference call or presentation 13-Feb-20 7:00am GMT

Q3 2020 PI Industries Ltd Earnings Call

Feb 14, 2020 (Thomson StreetEvents) -- Edited Transcript of PI Industries Ltd earnings conference call or presentation Thursday, February 13, 2020 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Mayank Singhal

PI Industries Limited - Executive Vice-Chairman & MD

* Rajnish Sarna

PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director

* Subhash Chnad Anand

PI Industries Limited - CFO

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Conference Call Participants

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* Aashish Upganlawar

* Aditya Jhawar

Investec Bank plc, Research Division - Analyst

* Amar Mourya

* Deepak A. Kolhe

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Deepak Chitroda

* Madhav Marda

Fidelity Investments - Equity Research Associate

* Prashant Biyani

Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst

* Resham Jain

DSP Investment Managers Pvt. Ltd. - Assistant VP

* Rishab Bothra

Sharekhan Limited, Research Division - Equity Research Analyst

* Ritesh Gupta

AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals

* Rohan Gupta

Edelweiss Securities Ltd., Research Division - Research Analyst

* Rohit R. Nagraj

Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst

* Saurabh Kapadia

Asian Markets Securities Private Limited, Research Division - Research Analyst

* Saurabh Jain

HSBC, Research Division - Analyst

* Sumant Kumar

Motilal Oswal Securities Limited, Research Division - Research Analyst

* Varshit Shah

Emkay Global Financial Services Ltd., Research Division - Research Analyst

* Vishnu Kumar A.S.

Spark Capital Advisors (India) Private Limited, Research Division - VP

* Nishid Solanki

CDR India - IR Manager

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to the Q3 FY '20 Earnings Conference Call of PI Industries Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Nishid Solanki from CDR India. Thank you, and over to you, sir.

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Nishid Solanki, CDR India - IR Manager [2]

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Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q3 and 9 Months FY '20 Earnings Conference Call. Joining us today are senior members of the management team, including Dr. Raman Ramachandran, Managing Director and CEO; Mr. Mayank Singhal, Executive Vice Chairman and Managing Director; Mr. Rajnish Sarna, Executive Director; and Mr. Subhash Anand, Chief Financial Officer. We will begin the call with key thoughts from Mr. Singhal; thereafter, we will have Mr. Subhash sharing his views on the financial performance of the company. After the opening remarks from the management, the forum will be open for question-and-answer session.

A cautionary note. Certain statements made on the conference call today may be forward looking in nature, and the disclaimer to this effect has been included in the press release shared with you earlier.

I would now like to request Mr. Singhal to share his perspectives with you. Thank you, and over to you, sir.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [3]

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Yes. Thank you, Nishid. So thank you once again for joining us on the call today. And again, it gives me great pleasure to be addressing an audience that has been with us through a growth journey.

As you're well aware that in this quarter, we've had an unfortunate accident in our entity in Jambusar, which resulted in fatalities. I would like to start by saying, paying our sincere condolences to the families of the affected employees. The present update is that we are working dedicatedly towards reoperationalizing this unit, and our efforts will be to resume normalization, functioning expeditiously post all regulatory approvals.

Now I'd like to share some of my quick highlights for Q3. We have reported 20% growth in blended revenue. Our profit after tax has improved by 12%. We delivered 20% year-on-year growth across the businesses, combined with the PAT that showed a 21% increase year-on-year.

Following the environment to date, Kharif and Rabi conditions are optimal. In the light of the performance of the agri-input industry has been moderate, especially given the first half. PI have mitigated these trends to a certain extent, and we have continued to deliver on expectations.

Our wheat herbicide, Awkira, launched during this Rabi has shown a positive outcome in line with our expectations. We are focused on introducing an advanced lineup of innovative products that will complement our existing sales. Several high potential products are already in the pipeline, and we are intent to develop new brands.

Our distribution and crop reach stands to be strengthening, post the integration of Isagro. Our export business is scaling well, and commercialized molecules and further new molecules are getting added.

Backed by a strong order book position, we continue to invest in new assets, and we plan to commence one of the multiple-product plants last quarter for this [position] and this would be followed by another multiple-product plant in the coming year.

Additionally, I'm pleased to underline that the entire transaction concerning Isagro has been completed within the fiscal year as planned. Whereas the benefits of the domestic operation will be apparent more immediately, we expect the export business to progressively scale up that full-scale utilization in the coming later part of the quarters. We are repurposing the -- to acquire Isagro plants to meet requirements of our innovative customers, further augmenting volume and expect to fully leverage this in the coming -- in the next year, '21.

We are poised to extend our leading presence in AgChem CSM to other verticals. Our global R&D facility and its initiatives with multiple fields of scientists engaged in discovery stabilization processing now advanced chemical processes that will give to PI the grounding with new segments for growth.

In order to support our strategic growth initiatives, PI Board of Directors have yesterday passed enabling resolution to authorize the company to raise an additional fund of INR 20 billion. This will give us the financial flexibility to comprehensively develop new capabilities, augment the already robust growth agenda with the current operations continuing to cash innovations, this resolution will support our initiative to prudently invest in existing future growth-driven, derisk current operation, diversify the niche high-tech segments to sustain current growth momentum.

Our performance outlook for '20 is maintained, and we expect to benefit from the sustained good performance of our branded lines of domestic and [ancillary] exports. By the time we report to our annual performance, we will be in a position to talk about the Kharif scenario and this potential benefit to the industry will rise.

That brings me to the end of my remarks. And now I'll hand over to our CFO, Subhash Anand, to carry forward this discussion. Subhash, over to you. Thank you.

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Subhash Chnad Anand, PI Industries Limited - CFO [4]

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Thanks, Mayank, and good afternoon, everyone. I will take you through the financial highlights for the quarter and 9 months ended 31 December. In the quarter under review, we demonstrated healthy revenue growth of 20% to INR 850 crore as compared to INR 708 crore in Q3 of FY '19, supported by a 24% gain in domestic operations and 19% improvement export. Domestic and export revenue during the quarter stood at INR 206 crore and INR 644 crore, respectively.

EBITDA in Q3 stood at INR 186 crore over INR 149 crore in Q3 of last year, representing a growth of 25% with steady margin of 22%.

Profit after tax came in at INR 120 crore, a growth of 12% Y-o-Y basis. For 9-month FY '20, our revenue growth was at 23% to INR 2,511 crore, while EBITDA expanded by 32% to INR 529 crore.

EBITDA margin was at 21%, in line with our stated guidance. Profit after tax stood at INR 344 crore, higher by 21% Y-o-Y basis. Effective tax rate was at 27% due to this change in SEZ contributions to the overall business mix.

Healthy underlying trend in our performance resulted in robust operating cash generation and enhanced balance sheet. During the year, company has deployed surplus cash in acquisition of Isagro Asia and capacity expansion at Jambusar. Total debt net of cash on consolidated basis as of 31 December stood at INR 252 crore.

The road ahead appears encouraging, and we are confident of maintaining the growth momentum, with 20% annual growth for next couple of years.

That concludes my initial remarks. I will now request the moderator to open the forum for Q&A. Thank you.

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Questions and Answers

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Operator [1]

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(Operator Instructions) The first question is from the line of Aditya Jhawar from Investec.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [2]

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Congrats on a great set of numbers. My first question is on the QIP. If you can throw some light on what are the new target industries that we are targeting and any new chemistry clusters we plan to add or is there a ramp-up of existing molecules as well as some backward integration. So if you can throw some -- a little bit more color on the proposed QIP?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [3]

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Rajnish?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [4]

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Yes. So this would be -- the objective of this QIP is mainly into 3 areas that we are evaluating. One is, of course, our current organic business growth and opportunities there to further expansion and scale up. The second area is scale-up of newer and niche technologies that we have been working for last couple of years. And the third area would be diversifying into adjacent verticals, which could be CDMOs or CSMs in different verticals, like pharma or other specialty chemicals, or other applications areas, high-tech application areas, like nutraceuticals and [carbonizing] chemicals and all.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [5]

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Okay. So Sarnaji, do we have some line of sight of any of the businesses in the new vertical? Or is it preparation we are doing for bidding new business in these verticals?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [6]

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Yes. So we are currently evaluating certain options, but as of today, we have not yet finalized or kind of clearly identified that this is the target or the area that we have kind of finalizing.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [7]

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And what would be the timeline of QIP in the execution of this CapEx?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [8]

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QIP, we are valuating anytime in the next 1, 1.5 month.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [9]

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Okay. And this CapEx of about INR 2,000 crore, over what period will it be executed?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [10]

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So it's not certain as of today's net CapEx will be INR 2,000 crore or what. But yes, and we have taken an enabling resolution. And as I said earlier that we will be evaluating several options in these 3 areas, and then we will be deciding.

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Subhash Chnad Anand, PI Industries Limited - CFO [11]

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Yes. In fact, Aditya, we -- our intent is to build a war chest. There are opportunities available. So we are -- we will evaluate. And whenever we find the right opportunity, that time deployment of this cash will happen. But yes, we are making ourselves ready, so whenever opportunity comes, we should be able to add that.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [12]

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Okay. That's quite helpful. Secondly, on the raw material side, considering the current situation in China, do you see some kind of production disruption in Q4? And what percentage of our direct and indirect material is sourced from China? And any current interaction with suppliers on the ground, are you sensing a situation easing? If you can throw some light on this.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [13]

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So if you look at the Q4, we're well covered as such for the Q4. So we don't see any challenges coming from that. Looking further to Q4, the company is putting the strategy and resources. And as you know from the past, the company has strategically, over the last week, we are looking at the challenges that have been a force in the Chinese geography in this key supply chain. So we -- there, we don't see any strategic challenge for the company as we have the ability and the opportunity to work around that.

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Aditya Jhawar, Investec Bank plc, Research Division - Analyst [14]

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Okay. My final question is on gross margin. So your commentary indicated there was some softness in raw material prices, but the gross margin was flat on a Y-o-Y basis. And the business mix is also kind of flattish on a Y-o-Y basis. So were there certain factors which negatively impact of raw material price benefit?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [15]

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So as you know that we do not have -- we don't have a model of a benefit [of raw material]. We have -- as we've said in the past, most of our businesses has been on a basis of pass-throughs. That will reduce that risk. So hence, this doesn't get integrated to reflect into the numbers, so but we expect the market to raw material to perform.

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Operator [16]

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The next question is from the line of Saurabh Jain from HSBC.

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Saurabh Jain, HSBC, Research Division - Analyst [17]

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Congrats for good set of numbers, again. I mean there'll be more onto the QIP side? I mean I know that's still work in progress, but do you have something in mind out of this INR 2,000 crore? How much of allocation you believe or see going towards your own organic growth or scale-up of the technology that you are developing? And how much would be probably allocated towards adding up new verticals through acquisitions or other measures?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [18]

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Not really. We have not reached to a point as of today to clearly allocate that how much of this is going into other verticals and how much in the existing organic area. And these are the things that we are currently evaluating.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [19]

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As you would appreciate that we have taken this call for a [liquidity] addition with the maturity of understanding which way you want to go ahead. Clearly, some of these plans will depend on certain drivers of the outcome that we are working. And obviously, on the basis of the opportunity and speed at which the markets would be able to digest that, we would go out and invest and take this call in that opportune moment. But as I can say, at a [limited] level, there is enough things in the pot which are boiling, and now we need to see how we've [expected] it out.

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Saurabh Jain, HSBC, Research Division - Analyst [20]

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Yes, because why I'm asking is that one thing is that Board has passed the resolution, and you have your reserves in place. But you're also mentioning that you are definitely going to raise this money of INR 2,000-odd crore over the next 1.5 months, so I thought you must be having something already in mind or other plans.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [21]

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I mentioned that many things are boiling in the pot, but I would not like to publicly put out (inaudible)

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Saurabh Jain, HSBC, Research Division - Analyst [22]

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Sure. No problem.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [23]

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I clarified earlier that this INR 2,000 crore -- up to INR 2,000 crore, it is in our enabling provision. It's not that we have decided on this amount of this site as of today.

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Saurabh Jain, HSBC, Research Division - Analyst [24]

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Okay. Great. Fair point. And secondly, well, you're well covered from -- for a Q4 point of view, but what is your sense on how the raw materials that you source from China, how the pricing is already behaving in that country? And probably, there is a backlog, of say, a couple of months of more shutdown. Then can that impact your suppliers for, say, Q1 or for coming quarters?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [25]

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So supplies -- raw material supplies from China is not a very significant portion of our total raw material. It is actually single digit.

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Subhash Chnad Anand, PI Industries Limited - CFO [26]

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Yes. Our revenue dependence on China is in single digits.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [27]

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In single digit. Now over the last several years, we have been able to build alternative suppliers or even for the raw materials that we are sourcing from China. So as explained earlier, we are right now fully covered until April, May for most of these raw materials. But at the same time, we are keeping a close watch. And yes, of course, if this problem continues for several months, then there could be some challenge, but we are well aware of these implications, and we are also regularly working on these alternatives as well.

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Saurabh Jain, HSBC, Research Division - Analyst [28]

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Okay. So -- and this is sourcing mainly for your CSM business, right? Not the -- not what you said in the...

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [29]

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Yes, for CSM business.

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Operator [30]

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The next question is from the line of Vishnu Kumar from Spark Capital.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [31]

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So if you could just update us on the new plants that are likely to start up, which is supposed to start last quarter? And -- I mean, 2 or 3 plants that, if you could just give guidance on that.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [32]

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So one new multiproduct plant is starting in this quarter, more probably in this month and one more multiproduct plant is expected to get commissioned sometime in quarter one, end of quarter one next financial year.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [33]

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Got it, sir. And for the FY '21, 2 plants were supposed to be slated to be starting, right? For next year, third quarter and fourth quarter.

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Subhash Chnad Anand, PI Industries Limited - CFO [34]

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No. In fact, the -- we are -- we communicated earlier also, yes, there will be one more plant, which will be commissioning next year, but the timing while it could be Q3 or Q4, but that we do expect one more plant coming up next year.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [35]

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But we have one coming up this first quarter, second coming up in quarter 2 of next year and one more may come into quarter 4 of last year or the next quarter also, that's the plan for now, to be clear.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [36]

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Got it, sir. And just wanted to understand, typically, the third and fourth quarter revenues -- I mean you are second half heavy, your revenues are, and I wanted to understand what are your customers, especially in the agrochemical side in U.S., Europe, telling? Is there any delay that we are seeing? Or are the schedules are on track? Or just wanted to get some sense on the agrochemical market in those places.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [37]

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No. We are not seeing any change in this pattern. This is like this, and depending on the geographic these products are going, the demand pattern is like this, that the second half is a little heavy than the first half. But we are not getting any feedback of any change in the demand or delays in the demand as of today.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [38]

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Got it, sir. And just on the CapEx numbers for this year and FY '21, your organic?

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Subhash Chnad Anand, PI Industries Limited - CFO [39]

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We have spent, until December, INR 550 crore.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [40]

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For full year, how much will we be doing, sir?

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Subhash Chnad Anand, PI Industries Limited - CFO [41]

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We will be -- our full year CapEx will be around INR 600 crore.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [42]

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This is including Isagro or...

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Subhash Chnad Anand, PI Industries Limited - CFO [43]

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No, this is without Isagro.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [44]

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Right. And for next year, if you could just give an indicator number?

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Subhash Chnad Anand, PI Industries Limited - CFO [45]

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Okay. We are actually at this point of time working on the next year numbers. But our estimate this point of time will be around INR 300 crore -- INR 250 crore to INR 300 crore.

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Operator [46]

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The next question is from the line of Aashish Upganlawar from InvesQ Invest Advisors.

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Aashish Upganlawar, [47]

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Sir, just one question. On the fund raise that you talked about, debt position is pretty much under control. So apart from whatever you might raise from the QIP, would you be taking up your debt equity to a higher level because then the capital needed will be higher, basically, I mean, put together equity in debt?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [48]

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Not really, but a lot will also depend on the final target that we decide any evaluation of them. But as of today, we have no such objective or idea of raising the debt.

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Aashish Upganlawar, [49]

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Okay. But sir, I mean, just from common sense perspective, why would one raise equity when you can raise a lot of debt considering the current debt equity position? I mean just trying to understand the process behind that.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [50]

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Well, good question. The idea is that, as I had explained earlier, that we will be diversifying, we'll be also investing in scaling up of niche and new technologies, and we believe internally that it is better to invest through equity route in these new models. And then, of course, at an appropriate time, we can also take it all on debt as well.

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Aashish Upganlawar, [51]

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Okay. Sir, just one more, on the demand side, how is the traction? I mean the other -- earlier participant also asked you on the demand. But are you seeing increased traction on the inquiries or orders? Or is it similar to what you have been witnessing for the last quarter?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [52]

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No. There is certainly an increase in demand of existing products as well as there is a flow of new inquiries, a significant increase in new inquiries. So the pipeline in our R&D is only increasing. A number of new projects that we are evaluating in our R&D pipeline are constantly increasing.

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Aashish Upganlawar, [53]

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So would you attribute that to the -- I mean, what is happening in China? And is that one of the reasons why you would be having much more inquiries coming in early or...

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [54]

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Yes, this is certainly one of the reasons, yes.

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Subhash Chnad Anand, PI Industries Limited - CFO [55]

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Not the only reason, yes. But one of the reasons, definitely, China contributes in that.

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Operator [56]

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Next question is from the line of Ritesh Gupta from AMBIT Capital.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [57]

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Sir, just on the new chemistry thing that you talked about, so you are going to put up capacities which are dedicated there? I mean -- or is it that you probably may look at building a catalog of products also there? I mean is it the intention? Or is it -- I mean I'm just asking that because you mentioned it separately, and ideally, it's the same business under the CSM umbrella that you have. So you mentioned both of them spread, either the organic CapEx and then the investments in the [CSM] side. So just wanted to check, are you also looking at catalog products in some (inaudible)?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [58]

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The only difference is that in our CSM area, we work on technologies shared by our customers, okay? (inaudible) some manufacturing business. And we say that we'll be scaling up our own technologies and all, then these are the technologies that we have been working. I mean these are the technologies that we are developing our IP, and then we'll be scaling up when these technologies that can be used in different verticals, not limited to AgChem.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [59]

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Got it, sir. And sir, just on the CapEx bit, how do you -- how should we look at the Isagro capacity that you have? I mean is it -- can you give us some sort of [equivalence] in terms of what kind of CapEx it would have translated into? What kind of revenue potential, let's say, the plant can translate into had, let's say, you had to build it organically by yourself? And when do you expect this plant to get fully utilized? I mean I would assume that this plant would be utilized in the same way that any of your Jambusar or a [Panoli] plant would get utilized for CSM business. So if you could just throw light on, like, what is the future potential of this particular plant, and until what time can this get commissioned and hopefully utilized?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [60]

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Yes. So we are working on this, as Subhash also explained earlier. We are working on aligning these capacities. So there is currently significant opportunity of increasing the capacity utilization, that was one of the key drivers for us for this acquisition. So right now, we are aligning these capacities, available capacities with our export products, and we'll be gradually putting these products in available capacity, repurposing the capacity. So maybe in next financial year, next 6 to 9 months, we'll be able to kind of fully align these capacities with our demand pipeline and the orders that we have, and we'll be trying to maximize the capacity in next financial year.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [61]

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Got it, sir. So, basically, you're doing 3, let's say, this quarter, one plant comes then another one next quarter and then another one probably FY '21 and despite that, you believe that these -- this plant would equally be useful in doing a capacity expansion, plus you are looking at the QIP to further expand your capacities organically. So if I understand correctly, you're seeing a very different shift in demand momentum versus what you have seen, let's say, in the last 3 to 5 years. Is it the right understanding to have?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [62]

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Partly, yes. So there is certainly demand upsurge, no doubt about it. But yes, I mean, we can't add this whole of QIP to what's there. But as I explained the -- I mean, QIP will have multiple...

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [63]

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(inaudible) One of the start would be organic expansion, so...

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [64]

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Yes, yes. Hope you are right.

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Subhash Chnad Anand, PI Industries Limited - CFO [65]

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Yes, actually, as we earlier said, our AgChem business continue to show promise, and we -- yes, we do see growth continue for the next couple of years. So that's what all this thing, what we are doing is just to sustain that statement that we have made earlier.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [66]

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Got it. And just could it be in 2 parts? Or is it like in one stretch, you're looking to raise that entire 2,000-odd or [INR 20 billion]?

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Subhash Chnad Anand, PI Industries Limited - CFO [67]

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We will -- yes, we will. In fact, it's up to [INR 2,000 crore] based on what size there, so let's wait for maybe the appropriate time.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [68]

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Sure. Sir, just the last question. Nominee Gold and Osheen, so, like, Nominee Gold has seen a meaningful price erosion in the last few years. When does Osheen get generic? And how do you expect, let's say, the domestic growth trajectory to pan out, let's say, if Osheen also goes through somewhat of a price erosion?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [69]

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It's already generic. So I'm not very sure (inaudible) generic. It's already a generic molecule -- Osheen is already a generic molecule in the global scenario.

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Ritesh Gupta, AMBIT Capital Private Limited, Research Division - Analyst of Agro Chemicals [70]

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No. I mean in India, I mean, let's say, if [9 crores] come in or effectively gets more entrants, when does that happen? Or that is already happened? Pardon me, I thought that I think you and probably another player are only there in 9 crores in India as of now. So is there 9 crores coming into Osheen's [share] at any point in time soon? Or that's still -- or that has already happened?

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Unidentified Company Representative, [71]

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So let me answer that question. So I -- we don't expect anything to happen in the next. Of course, as all of you are aware, these are always under pressure. But we do believe that there is opportunities for continued growth by expanding into newer crops. And also as newer molecules are coming in, we are also looking at how to reposition it through combinations and also through proper pricing strategies.

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [72]

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And further, I think, we can all disclose that if we see, we have a path of (inaudible) normally, we will work (inaudible) So we don't see that as a uphill task. And frankly, when does the next product, who will come, that's not in our hands. That's the regulatory committees and we don't get to make that call.

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Operator [73]

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The next question is from the line of Deepak Kolhe from B&K Securities.

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Deepak A. Kolhe, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [74]

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Congratulations for good set of numbers. Sir, what is the order book proposition currently?

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Subhash Chnad Anand, PI Industries Limited - CFO [75]

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The order book, currently, is the same level, INR 1.4 billion.

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Deepak A. Kolhe, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [76]

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Okay. And sir, recently, there was a talk about management -- Pesticide Management Bill, so what is your view on that?

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Subhash Chnad Anand, PI Industries Limited - CFO [77]

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Sorry, come again?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [78]

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Yes, the Pesticide Management Bill has -- as of -- it's only happened yesterday. So before we express a view, we would like to fully understand what has been given in because that's something that's not very clear what has gone in. It's a bit too early to comment on that. And it would also take some time before it has any impact on the industry, positive or negative, as following these, the rules will have to be enacted, and that's when the real impact will start. And we believe that's going to take a few quarters at least, if not more.

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Deepak A. Kolhe, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [79]

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Okay. And sir, how the Awkira is doing in India? So are you also expanding it into different crops?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [80]

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So Awkira, we have launched in wheat this Rabi season, and our objective was to ensure that each user who uses it has a good experience, and we are able to follow

(technical difficulty)

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Operator [81]

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Ladies and gentlemen, the lines of the management has got disconnected. Please stay connected while we reconnect the management.

Ladies and gentlemen, thank you for patiently holding, we now have the lines of the speaker reconnected. Over to you, sir.

We'll move on to our next question that is from the line of Amar Mourya from AlfAccurate Advisors.

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Amar Mourya, [82]

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Sir, this -- in -- 3 plants are going to commission, right? So in fourth quarter, we'll be commissioning one multipurpose. So what was the -- what would be the CapEx for that? And what would be the CapEx for Q1 and then Q3, if you can?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [83]

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Can you please repeat your question?

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Amar Mourya, [84]

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Sir, I mean, the 4 -- in the Q4, the multipurpose plant which is going to come, that is one is in Q4 and one is in Q1 and probably one is going to come in Q3. So what would be the CapEx for these plants?

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Subhash Chnad Anand, PI Industries Limited - CFO [85]

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It's ranging anywhere between around INR 175 crores to INR 200 crores kind of range.

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Operator [86]

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The next question is from the line of Varshit Shah from Emkay Global.

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Varshit Shah, Emkay Global Financial Services Ltd., Research Division - Research Analyst [87]

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Firstly, congratulations for a great show. Sir, I wanted to drill down a bit more on the QIP side. So I think there will be multiple production development in R&D pipeline and I'm sure, the inorganic -- I mean, the expansion in the nonagrochemical segments would be an outcome of our capabilities which have been developed in the R&D team. So just wanted to double check that. So the potential options which you are looking in nonagrochemical CSM, so do we have the technology already built in our R&D pipeline? Or that will also be acquired with the acquisition itself?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [88]

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Of course, that would also be acquired with the target. So obviously, there will be certain synergies and leveraging opportunities that we will see with our existing capabilities, but we would certainly look for some interesting technologies, interesting market, customer segment, everything.

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Varshit Shah, Emkay Global Financial Services Ltd., Research Division - Research Analyst [89]

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Right. And one more thing on the domestic business. So Y-o-Y, was there any -- because our blended gross margins are same Y-o-Y. So in the domestic business, did the gross margins decline marginally Y-o-Y? Or is it flat?

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Subhash Chnad Anand, PI Industries Limited - CFO [90]

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[Flat]

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Operator [91]

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The next question is from the line of Rishab Bothra from Sharekhan.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [92]

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Sir, I just wanted to understand the growth prospect or expansion plan slightly better. We have the Isagro plant as well. Close the expansion or the plants which are coming up in Q4, Q1, Q2 and probably Q3, Q4, these are excluding the Isagro plant ramp-up? Or these are including that?

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Subhash Chnad Anand, PI Industries Limited - CFO [93]

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These are excluding. Isagro ramp-up is -- those are not new plants. Those are a desegregation, so that will continue. This new plant what we are talking is exclusive.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [94]

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Okay. So these are just -- and further expansion will be there post the QIP? You will announce further expansion plans?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [95]

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We will look at our strategy as we mentioned earlier.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [96]

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Okay. So the demand buoyancy remains quite robust and hence, we are doing such plants. So what would be the asset turnover from these new capacities which we are building in?

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Subhash Chnad Anand, PI Industries Limited - CFO [97]

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So in fact, we have earlier communicated, and we maintained that our asset turnover, what we are looking will be around 1.5.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [98]

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Okay. At full capacity utilization. And then will take around...

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Subhash Chnad Anand, PI Industries Limited - CFO [99]

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It's a gradual ramp-up. But once they reach to that level, it will be 1.5.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [100]

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So gradual ramp-up, we can reach around 18 months or so? Or it will take less than that?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [101]

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Yes, it could be anywhere between 12 to 18 months.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [102]

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12 to 18 months. And is there any margin differential what we are currently fetching and what are these new plants will derive products -- in niche products.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [103]

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No. We expect to maintain our existing margin profile.

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Operator [104]

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The next question is from the line of [Pradeep Tulya] from Elara Capital.

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Unidentified Analyst, [105]

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Congratulations on good set of numbers. So just clarification in QIP, you said that the enabling resolution gives you -- you have taken this off for INR 2,000 crores, but you may or may not go for that. But does this also mean that you have several tranches of QIPs that you will go for? Or it's basically just one QIP of fixed amount and that's really about it?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [106]

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No. There are multiple opportunities that we are evaluating, not one.

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Unidentified Analyst, [107]

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No. In terms of fundraising, that will be just one QIP through which you'll raise the entire amount? Or it will be -- we'll have a few more rounds of QIP?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [108]

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Yes. So this is what I said that we are currently in the evaluation phase, and we will decide once all these options, targets and timelines, everything, is finalized.

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Unidentified Analyst, [109]

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Okay. And sir, this resolution -- or this lending resolution that has been is that also has a deadline, as in it is valid for only 1 year? Or it is extendable?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [110]

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Well, this is generally for 1 year.

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Subhash Chnad Anand, PI Industries Limited - CFO [111]

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Basically, we need to go to shareholders after this. So we are -- we will be going for shareholders' approval of this resolution. And that approval, if I'm right, is valid for 6 months.

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Operator [112]

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We'll move on to the next question that is from the line of Sumant Kumar from Motilal Oswal Securities.

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [113]

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So with the [commercializing] of 3 molecule in CSM, what is the total number of molecule we have as on date?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [114]

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We have close to, I think, 21, 22 products.

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [115]

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Okay, okay. And talking about the 24% growth in domestic market, can you bifurcate in the volume and value?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [116]

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Sorry, (inaudible)

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Unidentified Company Representative, [117]

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Sorry, Sumant. (inaudible)

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [118]

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Yes. Domestic growth is 24%. So what is the volume growth in domestic market?

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Subhash Chnad Anand, PI Industries Limited - CFO [119]

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This is mainly coming from volume growth.

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Operator [120]

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The next question is from the line of Rohit Nagraj from Sunidhi Securities.

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Rohit R. Nagraj, Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst [121]

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Congrats. Sir, due to the unfortunate incident at Jambusar, will it have an impact on Q4 revenues and any orders from our [innovator] and partner company?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [122]

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Can you -- your voice is not clear. Can you please repeat your question?

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Rohit R. Nagraj, Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst [123]

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Yes. Sir, due to the Jambusar -- hello? Is it better now?

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Mayank Singhal, PI Industries Limited - Executive Vice-Chairman & MD [124]

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Yes.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [125]

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Yes.

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Rohit R. Nagraj, Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst [126]

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Sir, due to Jambusar unfortunate incident, will there be any impact on revenues in Q4? And will there be any impact on incremental orders from the innovators or so?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [127]

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Yes. So since this plant is currently shut down, and we need for repair and necessary approvals and all, so there will certainly be impact on revenues of Q4 to the tune of, I think, INR 40 crore to INR 50 crore for Q4, but this has no impact as far as orders are concerned. Mid- to long-term business, there's no impact.

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Rohit R. Nagraj, Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst [128]

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Okay. And just another question on the QIP. So you said part of those funds will be used for organic business growth. So do we have the necessary environmental approvals for the same if we were to deploy that money?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [129]

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Yes, certainly. I mean we have necessary environment approvals, both EC and [EPCD] approvals for a basket of products that we're currently doing and currently evaluating in R&D. So depending on how things progress, we will be able to invest in the certain products where we already have approvals.

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Rohit R. Nagraj, Sunidhi Securities & Finance Ltd., Research Division - Senior Research Analyst [130]

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Yes. That's helpful. If I just -- last clarification on the R&D activities. So if you could just give us a broader understanding of what is the deal size? What are the areas that we are looking? And what is the pipeline for R&D?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [131]

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Yes. So currently, we have more than 300, 350-plus scientists that are working in the R&D area. And the -- mainly in R&D, so as I said, there are 2 broad categories, one is the CSM area where we are working with our customers on their technologies. This is basically a process research kind of area. And the other set of scientists are working on our own technologies, niche technologies, which we are developing both in chemistry area as well as in process area, new technologies and new engineering technologies also that we are working on. So these are broad categories and the kind of resources that currently we are working.

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Operator [132]

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The next question is from the line of [Vikram Subramanian] from [Samson Asset Management.]

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Unidentified Analyst, [133]

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Sir, my question is mainly on the domestic business. I think last few quarters, your commentary had been pretty muted because of the whole industry position as such. So just wanted to get a sense on the numbers that we're seeing this quarter, is this a function of an underlying change in the whole industry? Or do you think this is just some sort of a temporary relief and that the industry continues to still be in pain?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [134]

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Well, industry is, I would say, in general, it still remains in difficult situation. Yes, this particular quarter, as I explained earlier, is looking better because the Rabi -- overall Rabi scenario is positive. Kharif was not at all good. So there was also some impact of that. And because it will be because of water reservoir situation, acreages are looking better. So all that is looking positive. But there are some challenges on the produce side, the pricing side and all. So it's a mix, that situation, to summarize it.

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Unidentified Analyst, [135]

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Okay. So basically, I mean like going ahead, like the macro things, like water levels and acreages are good, but you are still seeing stress in terms of, like, working capital and pricing pressure from competition, et cetera. Is that like the right understanding?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [136]

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Yes, yes. That's right.

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Unidentified Analyst, [137]

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Sir, and just anything this pesticide bill, which was passed a couple of days back, is there anything sort of which you think we should know about for our business, like any impact?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [138]

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No. So we discussed -- as we discussed with your earlier participant that it was announced only yesterday, so we'll now kind of studies this, and a lot of rules, regulations are yet to be notified. So we will evaluate, and then we'll be in a position to assess what kind of impact it may have on the industry.

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Unidentified Analyst, [139]

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Right. Sir, basically, but within our product portfolio, like given that we operate into more like patented, proprietary products, do you think there would be like some products, which will be having, like, very high margin, and some would be, like, very low margins. Is that the case?

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Subhash Chnad Anand, PI Industries Limited - CFO [140]

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We don't talk specifically on product line, but we yet to understand what this bill will have an impact and how this will impact us. Too early to say what impact this will have on our portfolio. So let's wait for the -- once we understand, I think we'll be in the right position to comment.

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Operator [141]

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The next question is from the line of Madhav Marda Fidelity Investments.

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Madhav Marda, Fidelity Investments - Equity Research Associate [142]

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Just one question from my side. Any potential CapEx or M&A that we are targeting? Is there a benchmark ROIC or benchmark IRR that we have in mind that you consider before we deploy the capital?

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Subhash Chnad Anand, PI Industries Limited - CFO [143]

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In fact, our, I'll say, intent or the -- we always have some threshold. And when we evaluate things, we always evaluate those things based on growth potential. So we are definitely -- whatever target we explore will go through those rigorous check and shortlisting. So I'd say definitely, we -- what those numbers are, I mean, we'll keep it at this point of time, not disclosed. But yes, we do have certain pressure, and we'll work on that.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [144]

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And most of it, on top of it, one key objective always is that these investments should be EPS accretive for the organization. There should be arbitraged benefit to the company and its valuation.

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Subhash Chnad Anand, PI Industries Limited - CFO [145]

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Yes. We do consider EPS accretive. ROC, ROE, these are the important factors which becomes part and parcel of all evaluations.

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Madhav Marda, Fidelity Investments - Equity Research Associate [146]

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Okay. Just a follow-up. I don't know if it's too early to ask that, but will these -- any of the potential targets be immediately EPS accretive or over a period of time? How should we think about it? Because if you are entering into a niche new space, it could take some time to ramp up the business, I would imagine.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [147]

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It is, I think, a little too early to head into this discussion. But yes, I mean, we are sensitive to these evaluations.

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Operator [148]

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The next question is from the line of Saurabh Kapadia from Asian Markets Securities.

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Saurabh Kapadia, Asian Markets Securities Private Limited, Research Division - Research Analyst [149]

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Sir, your guidance of 20% growth over the next 2 years, so that includes the Isagro acquisition or excluding that acquisition?

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Subhash Chnad Anand, PI Industries Limited - CFO [150]

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No. That excludes Isagro at this point of time.

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Saurabh Kapadia, Asian Markets Securities Private Limited, Research Division - Research Analyst [151]

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Okay. And sir, if we look at your Isagro acquisition, so you mentioned you're planning to reorganize the business, so any rationale behind doing the -- separating the 2 part of the business?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [152]

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Sorry?

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Saurabh Kapadia, Asian Markets Securities Private Limited, Research Division - Research Analyst [153]

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The reorganization of Isagro business, so what was the rationale behind doing this thing?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [154]

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The rationale is that we want to align the manufacturing piece of this business with our own capacity, manufacturing capacities, so that in our export business, we can fully utilize and integrate them with our product line all. And that's the reason that this manufacturing piece will get matched with PI so that we can align that with our export business. The domestic, we have certain product portfolio and certain market segments that there's where we currently focus. And Isagro's portfolio and these market segments that where they are currently focusing is complementing, and therefore, we would want to keep it separate from -- so that we can focus on both these areas. And by merging, it shouldn't get diluted, the focus and the areas that Isagro is currently focusing. So that's the reason that we would want to keep that separate from PI. So that's the rationale that we are keeping the distribution business separate. And we are merging, eventually merging its manufacturing assets into PI.

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Saurabh Kapadia, Asian Markets Securities Private Limited, Research Division - Research Analyst [155]

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Okay. And sir, lastly, on the income tax part. So this quarter also, we had about 29% tax rate, and in last call, we mentioned that about 24% tax rate guidance for FY '20. So where do we see the tax rate for FY '20? And like, are we planning to shift to the new tax rate by next year?

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Subhash Chnad Anand, PI Industries Limited - CFO [156]

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For this year, we do expect our tax rate to be 25% to 26%, effective tax rate. Next year, we will evaluate and see what is more beneficial for us, and we'll adopt as per that.

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Saurabh Kapadia, Asian Markets Securities Private Limited, Research Division - Research Analyst [157]

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Okay. And sir, last thing, the new plants which are coming up, so are we going to take that 15% tax rate benefit on that plant? Is that possible for us? Or it should be a completely new plant and a new...

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Subhash Chnad Anand, PI Industries Limited - CFO [158]

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That's not possible for us. That has to be accepted independent entity and everything should be completely independent. So that's not available for us. And our new plants are in SEZ, so they are, in any case, with the 0 tax.

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Operator [159]

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(Operator Instructions) The next question is from the line of the Deepak Chitroda from PhillipCapital.

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Deepak Chitroda, [160]

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So sir, my question is basically any guidance for the next year in terms of the growth? And basically, on the domestic side, if I talk about, so what are -- basically, we are planning for the product launches in India in the domestic side?

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Subhash Chnad Anand, PI Industries Limited - CFO [161]

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For the (inaudible) we'll wait (inaudible) that's the right time (inaudible).

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Deepak Chitroda, [162]

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Okay, okay. And any -- in terms of the product launches, ideas? I mean probably, any target for that?

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Subhash Chnad Anand, PI Industries Limited - CFO [163]

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We do have, in fact, a plan and every year, we are launching 2 to 3 new plants. So we go with the similar numbers (inaudible) what we are doing in the past also.

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Operator [164]

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The next question is from the line of Rohan Gupta from Edelweiss.

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Rohan Gupta, Edelweiss Securities Ltd., Research Division - Research Analyst [165]

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Sir, on this strategy of the company on -- especially on coming from the QIP, so with the current run rate of almost INR 2,500 crore CSM business, I think that even without any leveraging, we are going to see another PI industry type company getting created in the next 3 to 4 years with a INR 2,000 crore of investment, between [INR 2,000 crore] to INR 2,500 crore of revenues. We haven't seen this kind of aggression in the industry, specialty chemical industry. Self-sufficient, was in the cash flow generation and reinvesting in that. But in last 1 year, we have seen multiple companies are coming with the aggressive investment and even through QIP route also. Do you see, sir -- I mean, to understand there may be opportunities, but do you see that are there risks involved in these businesses, large CapEx overcapacities also taking a bet on the China and their strategy? And is there any risk involved in terms of overinvestment, in which sector, in which domain, which we unfold in next 3 to 5 years?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [166]

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Good. Thanks, Rohan, for asking this question. Very, very relevant question. But as you know, PI has been very conservative in planning, investing, targeting all our investments over the last several years, over the last several 3 years and quarters. So that is the same approach that we have for today. Yes, there are opportunities, but we'll always remain very cautious in the areas that we are investing and many of these areas, as I explained earlier, that rather than over investment in a particular area, we are now gradually diversifying our technologies and on verticals that we are currently working. That is one. Secondly, we have always maintained that we are investing in specialty areas and not the demand area or volume or bulk area where you will always have risk that if the market demand goes haywire, then yes, you end up with excessive investment and all. Whether Chinese situation tomorrow improves, what would be the impact on those bulk chemicals and generic chemicals. And also, that is not the area that we are, frankly, investing or rather evaluating also. And -- but we'll -- in nutshell, we'll always remain cautious before making any such investments.

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Rohan Gupta, Edelweiss Securities Ltd., Research Division - Research Analyst [167]

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So with this kind of investment, we see that over the next 3 to 4 years, the company's top line potentially is doubling and without any compromising on margins and ROC, right?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [168]

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Yes, exactly.

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Operator [169]

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The next question is from the line of Resham Jain from DSP Investment.

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Resham Jain, DSP Investment Managers Pvt. Ltd. - Assistant VP [170]

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Sir, just one question. This QIP money which you are raising, just to clarify, are we -- on the acquisition side, are we thinking of acquiring anything from the global platform, in the sense, outside India acquisition kind of thing?

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [171]

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Yes. So we'll be open -- I mean, we'll be open to look at those opportunities as well. So all this is not India-centric. But we are looking at opportunities, options which are in India and outside India. And we are open to look at that as well.

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Operator [172]

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The next question is from the line of Prashant Biyani from Prabhudas Lilladher.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [173]

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Sir, with Isagro now coming in, do you expect Q4 and FY '21 margins to take some kind of hit because this is a lower margin business? Or we can absorb the cost pressures?

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Subhash Chnad Anand, PI Industries Limited - CFO [174]

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We will -- in fact, our intent is to maintain margin profile, but we'll work out what overall numbers look like and maybe when we come for guidance for next year, we'll be able to share with you a better perspective.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [175]

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Okay. And regarding the potential acquisition that we may be zeroing in on, are these referral from the client side or this we have been pursuing on our own? If some indication can be given...

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [176]

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No. We are pursuing on our own. There is no referral that we are currently working.

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Operator [177]

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Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments.

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Rajnish Sarna, PI Industries Limited - Chief IR Officer, President of IT & Finance & Whole-Time Director [178]

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Thank you. Thank you, gentlemen, for your participation and continued interest in PI's growth story. We will expect your continued interest and support. Thank you very much.

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Subhash Chnad Anand, PI Industries Limited - CFO [179]

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Thank you.

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Operator [180]

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Thank you. Ladies and gentlemen, on behalf of PI Industries, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines. Thank you.