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Edited Transcript of UPL.NSE earnings conference call or presentation 7-Nov-19 10:30am GMT

Q2 2020 UPL Ltd Earnings Call

Mumbai,Maharashtra Dec 14, 2019 (Thomson StreetEvents) -- Edited Transcript of UPL Ltd earnings conference call or presentation Thursday, November 7, 2019 at 10:30:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Anand Kantilal Vora

UPL Corporation Limited - Global CFO of UPL Limited

* Diego Lopez Casanello

UPL Limited - Global COO of Crop Protection Business

* Jaidev Rajnikant Shroff

UPL Limited - Global CEO & Non-Executive Director

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Conference Call Participants

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* Abhijit R. Akella

IIFL Research - VP

* Neha Manpuria

JP Morgan Chase & Co, Research Division - Analyst

* Nitin Agarwal

IDFC Securities Limited, Research Division - Analyst

* Prashant Biyani

Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst

* Rishab Bothra

Sharekhan Limited, Research Division - Equity Research Analyst

* Rohan Gupta

Edelweiss Securities Ltd., Research Division - Research Analyst

* S. Ramesh;Nirmal Bang;Analyst

* Saurabh Jain

HSBC, Research Division - Analyst

* Sonali Salgaonkar

Jefferies LLC, Research Division - Equity Analyst

* Sumant Kumar

Motilal Oswal Securities Limited, Research Division - Research Analyst

* Surya Narayan Patra

PhillipCapital (India) Pvt. Ltd., Research Division - VP & Pharma Analyst

* Tarun Lakhotia

Kotak Securities (Institutional Equities) - Senior 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

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Presentation

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Operator [1]

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Ladies and gentlemen, good day, and welcome to the UPL Limited earnings conference call hosted by IDFC Securities Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Nitin Agarwal. Thank you, and over to you, sir.

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Nitin Agarwal, IDFC Securities Limited, Research Division - Analyst [2]

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Thanks, Aman. Good afternoon, everyone, and a very warm welcome to UPL Limited's Q2 FY '20 Earnings Call hosted by IDFC Securities. On the call today, we have representing UPL management Mr. Jai Shroff, Global CEO; Mr. Diego Casanello, COO, Crop Protection; Mr. Rajendra Darak, Group CFO; Mr. Anand Vora, Global CFO; and Mr. Ashish Narkar, Senior General Manager, Finance. I hand over the call to the UPL team to make -- management team to make some opening comments, and then we'll open the floor for question and answers. So please go ahead, sir.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [3]

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Thank you, Nitin. Good afternoon, everyone, and thanks for joining us on today's results conference call. Today, we'll start off with a brief update on the market by Diego, and thereafter, I will share the financial results.

Over to you, Diego.

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [4]

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Thank you, Anand. Good afternoon, everyone. In the second quarter, we're pleased to have reported a strong year-over-year growth of 11% in revenue and 11% on EBITDA on a pro forma basis. Despite the difficult market environment, this is our second consecutive quarter of strong growth since the closing of the transaction. In the first half of the year, total revenue has increased by 9% with EBITDA growth of 11%. These results places UPL, once again, among the fastest-growing companies in the industry. We are very satisfied with how our teams have come together in this first 6 months after closing of the Arysta acquisition back in February. We could announce the large part of our new organization in April, and clarify our new strategy and our new commercial policy to most of our customers back in the first quarter. We have worked hard to ensure that more than 80% of our business is now running through a single SAP system, giving us excellent visibility and improved stability.

Today, our teams are fully focused on execution and on capturing the top line and cost synergies we have committed. In this regard, we continue to be ahead of plan. The integration is also giving us a stronger leverage in key raw and specialty crops. In these crops, the new UPL can offer broader portfolios and more attractive loyalty programs to distributors and farmers. Our larger presence on the ground with our expanded sales, marketing and technical service team has allowed us to cross-sell both legacy portfolios to more customers. We're also progressively moving our business from selling products to selling complete crop solutions from the beginning to the end of a season.

In addition, our teams are trained to sell conventional crop protection products as well as biologicals. UPL is a leader in this attractive segment that grows faster than the rest of the market. Let me give you an overview of our regional performance. Our business in Lat Am showed very strong performance across large parts of the portfolio, driven in particular by Brazil.

Revenues grew 24% in Q2. Brazilian farmers continue to benefit from the increased soybean demand out of China and the competitive exchange rates. With a stronger portfolio in key crops, UPL has managed to grow market share in this region. Dry conditions in Andean countries and political uncertainty in Chile and Argentina have muted market demand in these countries during the quarter.

UPL market share is also increasing in Europe. Our business grew slightly in a declining market in Q2. Dry weather has affected the large part of Northern Europe, reducing herbicide and fungicide applications. Our growing business in Southern Europe in specialty crops and our continuous growth with biosolutions across Europe helped offset the impact of the soft demand. The market in North America is expected to decline in the mid- to high single digits in the first half of this year. This is the result of the impact of floods in the Midwest earlier in the year as well as the early snowfall in the Dakotas in October. Both events have affected yields of corn and soy. Trade tensions between China and the U.S. have promoted additional uncertainty among farmers. Our business declined only slightly in Q2, and we could grow 3% in the first half, gaining market share in most key accounts. This has been possible, thanks to our broader product portfolio and the opportunity to be an alternative to customers that were sourcing from China.

In India, after a delayed arrival of the monsoon in Q1 that led to a poor Kharif season, rains came and soil moisture conditions for the Rabi season are good. Our business in Q2 increased 6%, leading to almost flat revenues in the first half compared to the same period last year. Wheat and pulses area is expected to increase supporting sales of some of our key brands. Finally, our business in Africa and Asia declined 4% in Q2, affected by drought conditions in South Africa, Southeast Asia and Eastern Australia. Growth in the first half amounted to 2% compared to last year. Let me spend some time discussing the progress we are making on integration. We remain ahead of target to deliver our P&L benefits from synergies this year with notable savings in procurement, plant and office consolidation, the internalization of outsourced field trials and operational excellence programs across the entire organization.

We are very pleased with our positive trajectory these first months, we have achieved top-tier performance compared to industry peers in this first half, while at the same time, integrating the business of Arysta. I want to thank our teams for this extraordinary outcome as well as our partners and customers who are placing the trust in this new UPL. Q3 and Q4 are traditionally larger quarters, and we believe we are well positioned to deliver our plan. We expect good agronomic conditions in Brazil and improving conditions in the northern hemisphere. We, therefore, confirm our guidance for the full year.

After we unveiled our new open OpenAg vision and proposed to the world in April this year, we have continued to make progress on engaging employees, customers and partners to join us. I believe that everyone understands the importance of our ambition to make every single food product, more sustainable, make farmers more resilient as well as the fact that no 1 single company can solve the challenges that agriculture will face in this century. And opening agricultural network that invites farmers, consumers, add input suppliers and innovators to work together and create the best possible solutions is the key to solving this challenge. That is what OpenAg stands for, and we are very, very looking forward to continuing to implement this vision in the coming years. Thank you very much.

And I will hand over now to Anand.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [5]

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Thanks, Diego. Thank you very much. Before I take you through the key numbers for the second quarter, I take as having read the safe harbor statement. I would also like to highlight the financial results for the quarter and half year are being compared with pro forma financials of the previous quarter and half year in order to make them comparable. The pro forma financial means the UPL plus Arysta combined financial results for the previous year.

Coming to quarter 1 results. The gross revenue for quarter ending September 2019 are INR 7,817 crores as compared to INR 7,066 crores for the quarter ending September 2018, a growth of 11%. Within the sales growth of 11%, volumes grew by 15%. There was a negative price variance of 1%, leading to a constant currency growth of 14%. The exchange impact was unfavorable by 3%, translating into a net increase in sales of 11%. The gross margins for quarter 2 increased to INR 3,271 crores from INR 3,150 crores in the previous year, an increase of 4%. This small increase is largely because there has been a drop in gross margins on account of: A, a revenue mix with lower growth of revenues in Europe and U.S.; and B, on account of the rupee depreciation; and third being the product mix. EBITDA, however, for the year, stands at INR 1,541 crores as compared to INR 1,384 crores, a growth of 11%. EBITDA as a percentage of revenues was 19.7%, showing an improvement of 12 basis points over the same period last year. When comparing the financial results for Q2, with Q2 of 2019 on an as-reported basis, the Q2 2020 figures are excluding the PPA adjustment of INR 2 crores in variable costs relating to foreign currency translation impact, INR 152 crores relating to depreciation and amortization and INR 46 crores related to deferred tax.

The Q2 2019 figures are as reported in the previous year, which essentially are UPL numbers, excluding Arysta financial results. Revenue grew by 84% from INR 4,257 crores to INR 7,817 crores. EBITDA grew by 84% from INR 839 crores to INR 1,541 crores and profit after tax associate income and minority interest was at INR 502 crores, a growth of 54% over that of the previous year. Exceptional costs in Q2 were INR 305 crores. Of this, INR 217 crores pertain to provisions made towards a verdict announced by the jury in AgroFresh litigation. The balance of INR 88 crores were towards redundancy and other integration costs associated with Arysta integration.

The pro forma revenue breakdown in terms of geography is as follows. Latin America had a growth of 24% from INR 3,031 crores to INR 3,767 crores. Europe has grown by 1% from INR 898 crores to INR 907 crores. Rest of the world has de-grown by 4% from INR 1,381 crores to INR 1,328 crores. North America had a marginal de-growth of 1% from INR 630 crores to INR 621 crores. Revenues in India grew by 6% from INR 1,125 crores to INR 1,195 crores.

Moving on to net working capital. The net working capital performance for September 2019 versus September 2018 is as follows.

Net working capital decreased by 4 days to 116 days. Inventories decreased by 2 days to 109 days. Receivables decreased by 20 days to 121 days, and payables decreased by 18 days to 114 days. The working capital days for both periods are based on trailing 12-month sales. As working capital movement has strong linkage with the borrowings and related debt position, it is important to mention that we are seeing a good improvement in the net working capital days of 4 days as of September '19. The net working capital as of end September '19 was 116 days versus 120 days as of September '18. It is also important to highlight here that considering the seasonality in the business, net working capital during the financial year increases quarter-on-quarter and peaks in the third quarter ending December and thereafter, sees a significant drop in quarter 4.

I would also like to share the debt and cash levels as on end of September 2019. The debt position was INR 30,858 crores versus -- as of 30 September versus INR 29,287 crores as of March 2019. Cash level was at INR 1,977 crores versus -- as of 30 September versus INR 2,518 crores as of March 31, 2019. The net debt, therefore, was INR 2,881 crores, showing an increase of INR 2,445 crores. Of this INR 2,445 crores, INR 750 crores increase is on account of exchange rate fluctuation, thereby, a net increase in debt is INR 1,695 crores.

Cash flows for the operation for first half were at INR 2,353 crores and net of working capital were at INR 1,644 crores. Total one-off payments were to the tune of INR 964 crores. Of this INR 964 crores, INR 625 crores towards working capital adjustment for Arysta acquisition, INR 160 crores -- INR 162 crores towards acquisition of Bioquim a company which we acquired in Costa Rica and INR 128 crores was towards integration costs. The CapEx spend for the quarter stood at about INR 850 crores. As mentioned in the past, we remain committed to reduce our debt by USD 0.5 billion or USD 500 million.

Synergy update. We continue to make good progress on cost synergies, which for the quarter has been INR 190 crores or roughly USD 27 million, and for the first half has been INR 320 crores. That's USD 45.9 million. Revenue synergies are tracking as per plan.

Moving on to numbers for the first half. On a pro forma basis, gross revenues for the first half stood at INR 15,723 crores compared to INR 14,471 crores, a growth of 9%. Gross margins in the first half after excluding PPA adjustments of INR 414 crores went up to INR 6,669 crores from INR 6,315 crores in the same period last year, an increase of 6%. Some of the reasons for a lower gross margins were explained when I mentioned the Q2 numbers for the gross margin.

EBITDA increased to INR 3,199 crores from INR 2,875 crores in the previous year. EBITDA as a percentage of revenue was 20.4%, an improvement of 48 basis points over that of the previous year. The overall sales growth was 9%, comprising of 11% coming out of volume, and 1% has been the decline in prices, thereby, on a constant currency, we have seen a 10% growth. When comparing the financial results of H1 versus that of the previous year on as-reported basis, wherein H1 figures are excluding PPA adjustment of INR 414 crores in variable costs, INR 303 crores relating to depreciation and amortization, and INR 215 crores related to deferred tax. The H1 figures are as reported in the previous year. That's just UPL numbers. So we saw a revenue growth of 87% from INR 8,391 crores to INR 15,723 crores. EBITDA grew by 90% from INR 1,686 crores to INR 3,199 crores, and profit after tax associated income and minority interest was at INR 1,145 crores, a growth of 36% over that of the previous year.

As mentioned, the exceptional cost of INR 376 crores for the half year, includes the INR 217 crores pertaining to provision for the AgroFresh litigation verdict and the balance cost largely relates to the redundancy cost and other associated integration costs. The pro forma H1 revenues broken down in terms of geography are: Latin America revenue stood at INR 6,167 crores, amounting to 39% of our total revenues and representing 25% growth over that of the previous year. Europe de-grew by 2% to INR 2,539 crores. It represented 16% of the total revenues. Rest of the world grew by 2% to INR 2,814 crores. It is representing 18% of the total revenues, and North America revenue grew by 3% to INR 1,816 crores, representing 12% of the total revenues.

India region for the first half, de-grew marginally by 1% to INR 2,386 crores and represents 15% of our total revenue for the first half. With this, the financial results summary has been given to you, and we now are -- will be taking question and answers.

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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 Prashant Biyani from Prabhudas Lilladher.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [2]

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Sir, due to higher share of revenue from Lat Am, do you expect structural drift in gross margin, at least for this year and next 2, 3 years going forward?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [3]

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Yes. I think overall, as you know, the margins of Latin America compared to that of some of the other geographies are slightly lower. But the introduction of fair amount of new products, we are seeing an improvement in the Latin American margins. Diego, maybe you want to add something more?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [4]

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Yes. No, I mean, obviously, weather did not help in the northern hemisphere this year. But these are patterns that change year-over-year. And so you -- I think you can take from the fact that -- or if you do the mix, you will see that our margins overall are actually very solid. And as soon as these markets come back, we will gain momentum on our margins.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [5]

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By when do you expect the North American and European market to come back?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [6]

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Well, we are now preparing for the next season, right? So the next season is going to start, let's say, I mean, a preseason in December, but then going through Q1. And obviously, what happened this year in North America has been very, very unusual, right? Not that it cannot happen again, but I would say it's not something we should be assuming for next year.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [7]

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And the other global companies were also a bit skeptical about the North American market going forward as well. So do you also carry that skepticism going into next year, given that we have also seen some high competition in some molecules?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [8]

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No, I think the impact in North America has been on the soybean acreage, in particular, because of the U.S.-China trade tensions and the weather patterns. Soybean just moves from North America to Lat Am or to Brazil and Argentina. We have a very good position, actually, relatively better position in Lat Am in soybeans. So it's not a negative for us. And in North America, demand in other crops remain very healthy, and we're not worried about North America moving forward.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [9]

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Mr. Vora, what will be the CapEx number for this year and any indicative CapEx figure for FY '21?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [10]

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For this year, we have guided for $300 million, which is split, as you know, between tangible and intangible. And as of now, as of 30th September, we are clocking about INR 850 crores of CapEx spend. And typically, indication for 2021 would largely -- we give it during the Annual Capital Market Day, which is at the beginning of the year.

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Prashant Biyani, Prabhudas Lilladher Pvt Ltd., Research Division - Research Analyst [11]

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And sir, for this year any split between this tangible and intangible?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [12]

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Yes, sure. I'll just provide you the split between the tangible and the intangible CapEx. The total CapEx for tangible is about INR 1,250 crores and the rest is towards intangible CapEx.

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Operator [13]

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The next question is from the line of Tarun Lakhotia from Kotak Securities.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [14]

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I have 2 of them. If you -- if I just go to Slide 17, there you have shown the numbers adjusted for PPA integration, right? So I just want to clarify 1 thing, the incremental PAT of INR 502 crores, right, which you show if you were not to adjust the variable cost and the amortization and depreciation differences. Shouldn't there be a corresponding 22% minority interest adjusted for that? Because if your profit would have been higher than INR 500 crores, there will be INR 110 crores minority, which will go in the UPL Corp entity. Is that a correct understanding?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [15]

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Yes, that's right.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [16]

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And also the same corresponding 22% adjustment also needs to be done for the exceptional costs -- the INR 376 crores, which you have. Had you earned that profit, which is what you are showing in that INR 1,145 crores number, you had to pay 22% minority for that as well, right?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [17]

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So that's after the minority interest, right, we have taken.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [18]

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So the [special] item is net of minorities, is that what you're saying?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [19]

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Sorry, there is 52...

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Unidentified Company Representative, [20]

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No, no. The special item is not net of...

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [21]

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The special item INR 376 crores is not, that's an exception, yes. You're right, INR 769 crores there, which is there, the INR 376 crores, there will be a minority adjustment for 22% there.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [22]

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So it's like, generally like if I add these 2 numbers, INR 876 crores, and then remove a 22% minority from that, your INR 1,145 crores PAT should have been lower by roughly around INR 190 crores, INR 200 crores, right? Or in simple maths, just going by whatever clarity (inaudible) yes. And this INR 300 crores amortization that is also something which is a recurring number, right? Because this is like intangible, which you have accounted in your books, and this is something which you continue to account for going forward as well, right?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [23]

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So -- but we have kept it separate just now because once we have the final PPA adjustment numbers, that's when we should be able to give the final numbers. So that's why we have kept it aside.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [24]

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I understood. The second question which I have is, if I look at your 1H EBITDA of about maybe INR 3,200 crores. In this year, you have already accrued INR 320 crores of synergy benefits, right? Now of course, as a company, getting that benefit has allowed you to earn a 20% margin. But if I were to assume that the INR 320 crores was not there. Your underlying margins on a like-for-like basis has come off versus last year's number up to 20%. This year, it is somewhere around 18%. So is that reflective of the current market environment? Or I mean, how much will you attribute to the change in product mix or geography mix? And how much is because of, say, input cost challenges?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [25]

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It comes back to the situation we've described before, which is basically the geographic mix. So as the market comes back in the northern hemisphere, you will see margins, let's say, coming back to the level that we had before. And again, obviously, revenue synergies will come on top. We were just talking about North America. We have the broadest portfolio of herbicides in North America, excellent fungicides portfolio. So that's where also we're expecting a significant amount of revenue synergies. So you should not read the situation in Q1, Q2 with the weather patterns as a normal situation moving forward.

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Tarun Lakhotia, Kotak Securities (Institutional Equities) - Senior Analyst [26]

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So in a normal environment, we can say that your margins maybe next year can very well move towards 23%, 24% bracket assuming the synergy benefits are going to flow in, assuming like normal macro conditions?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [27]

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We will let you the modeling to you. But I mean, I think it's fair to say that there is a potential for margin expansion.

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Unidentified Company Representative, [28]

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It is also a very tough year where in an environment where market slows down, everybody gets a little more aggressive than normal.

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Operator [29]

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The next question is from the line of Sonali Salgaonkar from Jefferies India.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [30]

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So my first question is our debt increase. Our debt has increased by about -- net debt has increased by about INR 2,100 crores, but we are maintaining our FY '20 guidance of deleveraging of about $31 billion to $35 billion uptake. Sir, could you please help us understand how we could go about doing the same?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [31]

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Sure, Sonali. Thanks. As I mentioned in my commentary earlier, that clearly, with the quarter-on-quarter because of the seasonality of the nature of our business. We see that the debt -- working capital keeps going up every quarter until -- and it peaks at in Q3, that is December quarter. And thereafter, you see a significant drop in the working capital. So that's one thing, which will help us to reduce the -- or repay our debt. Second is, as you would see, I put that in the slide, the penultimate slide where we have clearly highlighted that as a combined entity. The penultimate slide is Slide #11, if you see, where we have highlighted that we are doing better as a combined entity on working capital as compared to 123 days in Q1. As on a pro forma basis, we have delivered 115 days of net working capital. And similarly, in Q2, against 120 days we have delivered 116 days. So these -- and some of the other initiatives both in terms of improvement in EBITDA through synergy cost savings and other inflows and some of these one-off items are like, for instance, the $31 million, which you are seeing, the AgroFresh litigation. Those payments will not happen in this year. It's going to, maybe take another 18 to 24 months before the actual payment happen. So considering these factors, we clearly believe that we should be in a position to reduce our debt by $0.5 billion, at least as of now, as we see the numbers, we are quite confident of delivering that.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [32]

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Got it. Sir, and do we also maintain our working capital guidance for the full year that we set out at this step?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [33]

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That's right.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [34]

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That's about 100 to 110 days on a net working capital?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [35]

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Absolutely. That's what we have. You see, in Q4 as a combined entity, if you look at on a pro forma for the last year, it was 110. And as I mentioned, in Q1, Q2, we are clocking an improvement over that. So we are quite confident that at the end of the year between the band, which we have shared between 100 and 110 days, we expect to be more towards the lower end of the band. At least that's based on what we are seeing in Q1, Q2, where we have seen significant improvement over that of the previous year.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [36]

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Got it, sir. Sir, my second question is regarding the global demand supply in agrochemicals. Sir, with the past 2 quarters, specifically, we have been seeing weakening of pricing. The split that you gave between volume and pricing and exchange. Sir, could you please help us understand whether this is transitionary? Or this is probably the start of a supply gap again?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [37]

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Well, that's a correct observation. We see prices, export prices out of China for some active ingredients as well as some raw materials pricing coming down. This was expected because what we have seen at the end of last year was the result of several shutdowns that at certain point, we were expecting to normalize. I mean, still the delivery situation out of China is constrained, but you will see prices normalizing. Now this is -- this has a negative and a positive impact. We are sourcing also raw materials and that is helping our margins. And we have the cost competitiveness to be also able to compete in the marketplace and continue to increase our volumes, so that this scenario is a factor in our forecasting our plans moving forward.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [38]

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Got it. So that -- what about the global channel inventories. Are we seeing them bottoming out?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [39]

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So talking -- I mean, we are very satisfied with our level of inventory, especially now after this first half and we have our inventories under control in, let's say, vast majority of places. Industry channel inventories now, obviously, in some areas where there have been some drop situations like in Southeast Asia or these herbicides. In the case of the U.S., for example, with the floods. There are industry channel inventories that's going to also increase the pressure on some of our competitors. But we have been managing our working capital very consciously in these regions.

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Sonali Salgaonkar, Jefferies LLC, Research Division - Equity Analyst [40]

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Sure. Sir, and lastly, on the outlook for sales and EBITDA growth, do we maintain our outlook of 8% to 10% sales growth and EBITDA growth of 16% to 20%?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [41]

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We are maintaining that, yes.

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Operator [42]

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The next question is from the line of Surya Patra from PhillipCapital.

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Surya Narayan Patra, PhillipCapital (India) Pvt. Ltd., Research Division - VP & Pharma Analyst [43]

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Sir, this quarter you have a sense on the growth outlook that we are having for our overall operation. Because what I am seeing that in the first half, the most part of the growth is -- or the entire growth has been led by Lat Am. And that being seen as the largest contributor. And with the trade war situation easing out, so do you see some slowdown moderation in the Lat Am and other regions remaining weaker that will impact the growth outlook for us in the near future and next year?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [44]

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So the answer for the first question is no. We see Lat Am still with a lot of momentum going into the next 6 months. And we will capitalize on that. We expect to capitalize on that. Also, in Q3, you will see North America -- business in North America, in particular, and in Q4, Europe, again, right? So we are expecting -- we are assuming more normal conditions, let's say, in the northern hemisphere and so you will those regions also growing.

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Surya Narayan Patra, PhillipCapital (India) Pvt. Ltd., Research Division - VP & Pharma Analyst [45]

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Okay. And anything that on the European side that you can provide some outlook? What is the growth outlook there that you are having? We really see the demand pattern shifting towards the biosolutions side and also since you are one of the leading biosolutions players, grossly, so what is the current share of revenue from the biosolutions that UPL should be generating?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [46]

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Europe is going to continue to be a key region for UPL. And we have now with the combined business presence in all countries and good part of also revenue synergies are expected in Europe. There's a lot of cross-selling activity happening. And crop protection business, we are well positioned with respect to our portfolio looking at also some active ingredients leading the European Union. So we have the opportunity to take some of that market share. But very interesting is the growth with biosolutions because we are working more and more in expanding our presence with biosolutions across the Western European countries. We are doing a significant part of our business in France, for example, today, already with biosolutions. We don't disclose the exact value of the business that we are doing, but it significantly play for us in UPL already and is growing double-digit in the last 5 years for the combined company. And even this year, we're expecting double-digit growth.

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Operator [47]

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(Operator Instructions)

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 [48]

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I want to understand the Brazilian market, how do you start the season and obviously, this 20%-plus growth has been across the industry. So does it mean that we -- more or less the stocking is going to get over with -- towards -- I mean, should it come down in terms of the growth rate in the second half?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [49]

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Well, what you have seen in Brazil is the impact of increased soybean acreage because that's soybean that is not being planted in the U.S. is now being planted in Brazil. And at the same time, if you follow farmer margins with the very competitive exchange rate and the premium price that farmers are able to achieve for soybeans compared to the Chicago price. That gives farmers a very good profitability that allows them to make the same -- it increased level of technology that they utilize in the soybeans today. So that is driving this increase in the market. And because we are very well positioned with our portfolio. We have a complete portfolio in soybeans on herbicides, insecticides and fungicides, and that allow us to capitalize on that trend, particularly. We expect this to continue in the next -- for the next season. So obviously, it's too early to say but we are very confident that we'll capitalize on that.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [50]

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Okay. Was the market under -- I mean, in terms of inventory, was it very less now that the inventory has gone up, should the growth rate kind of slowdown? Or you think this 20% plus is achievable over the next, let's say, in another 6, 9 months also?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [51]

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So I don't want to give you guidance on sales. But what I can tell you is that our inventory level in Brazil is actually very favorable. It's lower than average in the last years. So what you're seeing is real demand increase.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [52]

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Got it and season has been good from the start in terms of rain?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [53]

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It has been good so far. We have September, October, a bit of a dryness in some areas where corn is being planted. But it's in the context of everything, not relevant.

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Vishnu Kumar A.S., Spark Capital Advisors (India) Private Limited, Research Division - VP [54]

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Got it. And just 1 question on the U.S. part, you had highlighted some risks on, I mean, some issues on the Lifeline and glufosinate with competition. How do we see the -- I mean, our portfolio going forward there? Or what are the strategies? Are you indicating also that you will have to take higher aggressive price cut stance? And any impact on margins there?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [55]

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I mean, we are very cost-competitive in glufosinate. And we are ready to make sure that we secure that market share and increase our market share in North America. Prices have come down. But we also were expecting this to happen. I mean, we believe that this is a market that is growing, continues to grow. So volumes are going to go up for glufosinate globally. And we believe that this is a very interesting, very attractive business for us moving forward. So nothing that was not being planned, let's say, for this season.

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Unidentified Company Representative, [56]

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Glufosinate tolerant seed availability is increasing manifold this season. So compared to last year, this year, we believe that there should be a good growth in the market. So there is price pressure, but we intend to grow our market share.

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Operator [57]

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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 [58]

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2 questions, sir. First, on the Brazil. So I think it's a follow-up. So I think you mentioned that inventory levels are lower than last year. So -- and of course, the season looks good ahead. Based on some of the results of other competitors, I believe that the competition is going to rise in the coming, let's say, a couple of years in Brazil. So how do you see your position from a cost competitive and also on the broad portfolio in the Brazil market? That's my first question. And secondly, sir, on the debt side. So I think your intermittent guidance of reduction of $500 million of debt. Let's say, if I assume that you have 15 days of working capital improvement, when you close at Q4 that's still transferred into roughly around $200 million of release on working capital. So I think -- and your in first -- in H1, your net debt has actually increased. So I just wanted to understand how the balance part is going to get paid from a cash flow perspective? That's it.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [59]

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Sure. Why don't you answer the first, and I'll take the second.

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [60]

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Yes. With respect to the market in Brazil. I mean, Brazil has been always been very competitive market. So the market continues to grow. I think what you can observe is that with the combined business now, we are able to dilute even more our overheads in the region. So that makes us more competitive in terms of our cost to reach our distributors in the farm. We have a broader portfolio so that we have revenue synergies of combining that portfolio, as I was saying before, complete portfolios in soybean and corn and other key crops. And then you also have to see that China is normalizing, but also cost for Chinese suppliers to Brazil has been increasing through the enforcement of environmental protection law, and that is leveling the playing field and it's putting us in a relative, more competitive position against these competitors, too. So overall, we have, today, a much better position to grow in Brazil, compared to the 2 legacies, let's say, a year ago.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [61]

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Coming to the working capital. I think as we have shared earlier to some of the answers as well as in the commentary, which I gave earlier. We are clocking better than the previous year as a combined entity. And we are confident that probably in Q4 where you see the substantial reduction in working capital as collections come through largely from geographies like Europe, U.S. as well as Latin America. We believe that there's an opportunity to probably not 10 days, what you're assuming, but maybe it could be a higher number of reduction. So that's what we are working towards. And that's one area where you would see the improvement in cash flows. Second is, as you know, 55%, 60% of our business is in the second half. And these are from profitable geographies. So considering that, we expect much better EBITDA margins during this period, which should further help us to reduce that debt. So as we said today and based on what are -- what we are seeing in our forecast, we believe that we should be on course to reduce the debt to the extent what we have guided for, which is about $500 million.

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Operator [62]

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

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Saurabh Jain, HSBC, Research Division - Analyst [63]

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Sir, would you like to give us a number of how much was your synergies on the revenue side in this quarter?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [64]

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We're not communicating revenue synergy targets. You can imagine that we have significant revenue synergies. This is gradually ramping up, but we don't give a number specifically with respect to that.

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Saurabh Jain, HSBC, Research Division - Analyst [65]

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Just asking because in the previous quarter, we had given out this number at $20 million. So I was wondering if that will be shared with us over the next few quarters.

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Unidentified Company Representative, [66]

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As we move on, it becomes more and more difficult to exactly define if I'm telling to customers. So it's very, very difficult to quantify exactly what is happening in cross-selling to the customers and it's not something which, as long as we are regionally and by market and by product gaining market share we -- difficult to define that number ongoing because the businesses are getting completely integrated into each other.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [67]

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The cost part is easier, but this gets a bit fuzzy. And that's where we're having some difficulty in coming up to the exact number.

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Saurabh Jain, HSBC, Research Division - Analyst [68]

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Okay, no problem. So just on the same question, you must be having in mind different synergy targets across different geographies. So I'd like to highlight that this revenue synergies are tracking as per plan. So all the geographies are going as per what you have envisaged or some of the geographies you are able to deliver better than what you have been expecting and some geographies might still be lagging. Is that a kind of scenario? Or it's more of all geographies you are able to deliver on your expectations?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [69]

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I think overall, we are tracking well with our synergy targets or actually even ahead of our synergy target. But obviously, the mix, by region, is different because of the demand situation in each of the regions. So for example, in the case of Brazil, we're able to accelerate some of these revenue synergies. But in the case of Europe, for example, we are seeing also a bit of a slowdown in the capturing. But that's normal, that's something we are expecting.

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Unidentified Company Representative, [70]

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Also when you look at in a such difficult market that we've gained market share in almost all the markets. That's considered revenue synergies, right? We are able to, against a very difficult situation where the market is quite competitive, and all the companies are after a big integration focusing on trying to maximize revenues, we are gaining market share almost every market. So that happens. That's only possible because the teams are working together and they are capturing synergies. Otherwise, that's not possible.

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Saurabh Jain, HSBC, Research Division - Analyst [71]

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Yes. Yes, that's right. And secondly, on the synergies on the cost side, we had plans that we will be getting better raw material buying terms in the supplier base. So how would we -- these contracts will be structured for Arysta not from the vendors. Are there -- is still mix of short and long-term contracts or it's more the long-term contracts, which has a higher share of these raw material supply?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [72]

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So legacy Arysta contracts were usually not long term, and we're talking either quarter-by-quarter contracts, so our ability to adjust pricing has been actually very good. And you see this -- I mean, the good profit of overperformance in cost synergies has been our ability to purchase better. And now obviously, putting the 2 companies together, the volume in some raw materials, some active ingredients have significantly increased, and that has increased our bargaining power. So that, so far, is a success story in integration.

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Saurabh Jain, HSBC, Research Division - Analyst [73]

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Okay, that's helpful. Last question...

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Operator [74]

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Sorry, Mr. Saurabh. May I request you to join the question queue for any follow up, sir.

We move to the next question. That is from the line of Rishab Bothra from Sharekhan.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [75]

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Can you once again elaborate the debt to gross, gross debt and price and net debt today?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [76]

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Sure. So the gross debt is INR 30,858 crores. And net debt is INR 28,898 crores.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [77]

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Okay. And compared to last year, INR 29,287 crores?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [78]

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INR 29,287 crores and INR 26,436 crores.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [79]

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INR 26,436 crores, okay. And sir can you have the profitability figure from geography-wise, if possible? And how does it stand out compared to last year?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [80]

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We generally don't share the profitability numbers, geography-wise. Yes.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [81]

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But any sense on which margin the profitability has improved and otherwise. And...

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [82]

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Yes. I think margins have been maintained. As we said, there are 2, 3 reasons, which we cited for slight reduction in margins is because of the geographical mix, as we shared that Latin America has been higher and relative to some other markets like Europe and U.S. margins are slightly lower there. And yes, other is because of the rupee depreciation.

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Rishab Bothra, Sharekhan Limited, Research Division - Equity Research Analyst [83]

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Okay. And I think overall company level we have volume growth and realization has been on a moderate side. Is it Q4, all geographies as well?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [84]

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Not necessarily. Not necessarily. There have been 1 or 2 products. Otherwise, we are generally seeing a good improvement in the pricing. But there are a few products. And as we said, 1 or 2 geographies where we have slightly lower margins.

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Operator [85]

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We have the next question. That is from line of Sumant Kumar from Motilal Oswal.

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [86]

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My question is regarding Mancozeb. So how is the performance of Mancozeb-based product and the new product you have launched Tridium. So how is response of it?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [87]

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Very good so far. And obviously, in Brazil, with the current conditions, this is helping us traction the businesses, but also the introduction of the new mixtures. Our franchise side sales in Brazil, overall has increased in Q2.

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [88]

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Okay. And how is the response of this -- the new product of Tridium?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [89]

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Very positive. Very positive. I mean, it's a product we are promoting, and now we have a larger organization. So that means, we can reach more acres, do more demo trials. Combined in the program, so we're not selling just 1 product, we're selling the entire program. And our teams are doing a great job in promoting those value-added mixtures.

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [90]

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And can you just go over the integration cost till date and how it is going to be?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [91]

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Sorry, Sumant, can you repeat the question?

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Sumant Kumar, Motilal Oswal Securities Limited, Research Division - Research Analyst [92]

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Yes, integration costs.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [93]

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That we said, the integration costs you are referring to, not the synergy savings. The cost we had mentioned about $40 million to $50 million -- $60 million to $80 million for this year.

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Operator [94]

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The next question is from the line of Neha Manpuria from JPMorgan.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [95]

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My first question, in your notes to accounts in the (inaudible) there is some mention of Lat Am restructuring. Could you give some color on that? Was that a big shift that we've seen in Lat Am? What exactly was that?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [96]

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No, I think -- I mean -- oh yes, that's what because we generally -- there are 2 things on the exceptional things. One is regarding the 217 million -- INR 217 crores, which is coming out of Agrofresh and the other is largely related to redundancy and integration cost. That's been the main cost factor.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [97]

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Okay. So there's no big restructuring that has happened in Lat Am?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [98]

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Nothing as of now.

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Neha Manpuria, JP Morgan Chase & Co, Research Division - Analyst [99]

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Okay. My second question is assuming that Europe has been weak, North America has been weak. You've talked about pricing pressure because of competition getting aggressive. As we go into the next season, is there a chance that pricing could remain under pressure, we get more aggressive, and therefore, pricing remains weak even through next year across markets?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [100]

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So when I talk about pricing pressure is on selective products, right? Overall, if you look at our margin situation by region it's quite stable. And this is because you have margin pressure on some active ingredients, I'm sorry, price pressure on some of active ingredients, but we also have relief from raw material standpoint. So that margin-wise, we are quite confident to say that we can maintain our margin power right now.

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Operator [101]

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Next question is from the line of Abhijit Akella from IIFL.

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Abhijit R. Akella, IIFL Research - VP [102]

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Just a couple of quick ones. One is, there's been a slight decline in finance costs this quarter on a quarter-on-quarter basis. And a slight increase in the D&A. So just if you could talk about the reasons for these and whether this is the right run rate to trend off of now, going forward?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [103]

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I think we'll work towards even further reduction in interest costs as we are talking about generating cash and repaying some of the debt. So you should see some, although it will happen towards the fag end of the year, but we still believe that as an opportunity to reduce the cost -- interest cost. On deprecation, yes, it's a function of capitalization. As we shared with you, we spent about INR 850 crores in the first half towards capital assets. So obviously, there will be some impact of that of increased depreciation.

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Abhijit R. Akella, IIFL Research - VP [104]

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Okay, that's helpful. And last quick clarification. Are there any specific debt-to-EBITDA kind of covenant targets that you committed to the banks by the end of this year, that you need to assess?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [105]

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No, we haven't -- we have no commitments. That's -- all terms are very easy.

Maybe this should be the last question or maybe one more. That's it.

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Operator [106]

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Sure, sir. We'll take the next question as the last question from the line of Ramesh from Nirmal Bang.

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S. Ramesh;Nirmal Bang;Analyst, [107]

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Yes, I just wanted to understand the run rate you have given on the slide on the synergies. So you're talking about INR 1,100 crores this year and going up INR 1,500 crores in year 3. So if you're looking at the ballpark $350 million plus $200 million, that's about INR 3,750 crores. So you are saying that by the end of the third year you'll achieve both the revenue and the cost synergies combined? Is it the way we should understand that?

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [108]

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By the end of 30, yes, we should be achieving both, you're right.

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S. Ramesh;Nirmal Bang;Analyst, [109]

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Okay. Secondly, in terms of your business going forward, now you've achieved volume growth of 11%, pricing is under pressure. So if I were to ask you in terms of where you see the variables moving over the next 3 years, and what is the lever you have? So if you were to improve margins, assuming that the kind of volumes sustained, should it -- should you expect some pricing power going forward based on the new products you're introducing? Or do we have to see the raw material prices easing from the current levels and thereby, gross margins improving over a period of time? Now where do you see the more, shall we say it, manageable lever in terms of your business going forward?

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Diego Lopez Casanello, UPL Limited - Global COO of Crop Protection Business [110]

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We can say that now with the combined company we have, obviously, much bigger footprint. A part of the synergies that we have been reporting as a target you will see that we are presenting segments that are growing faster than the rest of the market. Biosolutions is one, seed treatment is another one, replacing glyphosate with other herbicides is another one. But we are also present relatively stronger in emerging countries, which are growing faster than the rest of -- the average of the crop protection market. So that is also going to bring us momentum. We also have a pipeline, an R&D pipeline that we're executing on, significant value in the $1 billion -- billions of dollars range. And overall, we believe that with our very cost-competitive position in relative to our peers, we can continue to gain market share. And whenever there is a need to play harder, right, in terms of pushing for volumes, we can also do that, right? So we're very, very well positioned, both in more competitive segments as well as more higher value-added segments.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [111]

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Just to add to what Diego said, we also will get the benefit of operating leverage as we significantly improve the volumes.

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S. Ramesh;Nirmal Bang;Analyst, [112]

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Okay. So you think it's a combination of both -- some modest increase in pricing power as well as some savings on the input costs and based on...

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Unidentified Company Representative, [113]

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It's a particular difficulty. We don't think that every year will be the same and where so many geographies at the same time have had trouble. It can still happen again, but it's unlikely. And our product mix and all the innovation, all the synergies, which will be accrued going forward will really help us to be more competitive.

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Operator [114]

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Next question from the line of Bharat Gupta from Edelweiss Securities.

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Rohan Gupta, Edelweiss Securities Ltd., Research Division - Research Analyst [115]

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Rohan here. I just want to have a bit more clarification on the case, which we have lost in the U.S. So -- I mean, what are the particular reasons for that and though you had mentioned that you'll be fighting again. But just wanted to little bit understand more about it. Again, the AgroFresh.

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Jaidev Rajnikant Shroff, UPL Limited - Global CEO & Non-Executive Director [116]

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Okay. Yes, it was the case, basically, that we have got the technology from a professor who had invented the molecule who happened to be a consultant also to AgroFresh. And it was not -- nothing to do with UPL, but really that -- it so happens under the U.S. law that we got tagged along with the professor and being in the deep pockets we got at the receiving end of that whole case. And the litigation was really by about we misusing the trade secrets of the company. And actually, the award which was -- which came against the request from the company of AgroFresh of more than $300 million but we actually gave them only an award of $1 million. It was actually the punitive damages, which is the $24 million out of the $31 million. So as you see, actually, the damages, which was really came -- has not been really upheld by the jury, but being a jury trial they had an opportunity. And so obviously, we're going to fight this case going forward.

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Unidentified Company Representative, [117]

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Yes. And also, the first he had a patent in his own name and when we signed an agreement with him for distributing these products. So -- and that was through a litigation with him and AgroFresh, that was -- that ended up on our head, which was not originally on our head. So we feel quite confident that in an appeal there is a very good chance that we will at least prevail because logically, UPL has done nothing wrong. And in fact, since then -- since the original litigation, we have also invalidated the patent, which they are fighting over, and therefore, they did not file on a patent basis, but on a trade secret basis. And the lawyers of the opposition were not able to prove any trade secret misappropriation because they have no trade secrets. We believe they have no trade secrets. It's a technology, which went off-patent in 2014. And it's something, which has been used for 20 years or so, at least, it's been available. And there are other people in the market, but in a jury trial you sometimes do not get a fair judgment.

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Rohan Gupta, Edelweiss Securities Ltd., Research Division - Research Analyst [118]

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This was only for the single product or patent use, which we have done? Or there is still some more products which we are using?

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Unidentified Company Representative, [119]

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There's is no patent deed. The patent has been invalidated. So that's why they went on a trade secret. It's not a patent...

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Rohan Gupta, Edelweiss Securities Ltd., Research Division - Research Analyst [120]

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So the case is now on the trade secret, not on the patent?

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Unidentified Company Representative, [121]

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Case is over. We are fighting -- there is no more case. We are going to appeal.

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Operator [122]

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

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [123]

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Ladies and gentlemen, thank you very much for joining us for this call, and we appreciate. In case you have any further questions, you can reach out to Ashish Narkar or myself, and we'll be happy to answer that. Thank you very much.

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Operator [124]

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Thank you very much.

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Anand Kantilal Vora, UPL Corporation Limited - Global CFO of UPL Limited [125]

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Thanks, Nitin, and thanks IDBI team. Bye-bye.

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Operator [126]

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