Dhanuka Agritech Limited (DHANUKA) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Danuka Acretype Limit X21-FI27-4 Results Conference Calls. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after the presentation comes through. Should you need assistance during this conference call, please signal an operator by pressing star, then zero or a touch-door phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Manish Mahabhar from Antics Talk Broking. Thank you and over to you sir.

Thank you, Sumit. On behalf of Antics Talk Broking, warm welcome to all the participants on the 1Q FY27 Arlis Call of Dhanuka I.J. Today, we have leadership team represented by Mr. N.K. Dhanuka, chairman, Mr. Raul Dhanuka, Managing Director, and Mr. H.K. Bansal, C.F. on the call. Without further ado, I would like to hand over the call to Mr. M.K. Dhanuka for open remark. Thank you. Over to you, Mr. Dhanuka.

Thank you, Manishji. Good afternoon, ladies and gentlemen. Myself, M.K. Dhanuka, Chairman of Dhanuka Exeter Limited, and I welcome you all to the Q1 FY 2627 earning conference call. I have with me Mr. Rahul Danuka, Managing Director, and Mr. V. K. Bansal, CFO of the company. As you are aware, Danuka Agritech is among India's leading agrochemical companies with a long-standing commitment towards advancing Indian agriculture through technology-led crop solutions. Over the years, we have built a strong 10 India franchise. With deep farmer engagement and a differentiated product portfolio and a robust distribution network. Today, we reach more than 10 million farmers across India through approximately 6,500 distributors and over 80,000 retailers. Supported by four manifesting facilities and 41 warehouses, we continue to strengthen our ability to deliver products. efficiently across key agricultural markets. A key differentiator for Dhanuka has been our consistent focus on introduction of innovative and globally relevant chemistries in the Indian market. Our partnership with 10 leading multinational agrochemical innovators from Japan, Europe, and the United States continue to provide us access to advanced technologies in differentiated solutions for Indian farmers. Our two R&D centers, supported by NABL accredited laboratories and a strong regulatory and product development team. Remain focused on product registration, formulation development, and strengthening our future growth pipeline. The agrochemical industry witnessed a significantly challenging first quarter of FY2627. Across the sector, revenue growth remained under pressure due to delayed monsoon onset in several key agricultural regions which postponed sowing activities and led to reduction in product demand from first quarter to the subsequent month. Industry estimates indicated modest revenue growth while profitability remains under pressure going to weaker domestic demand and price competition. You are well aware that in the month of June, we had 40% shortfall in the rain, and by the end of July, it came down to 15% shortfall. So, even 1% shortfall in the rainfall impacts the sowing areas and the overall growth of the crops. In addition, the sector continued to face challenges arising from elevated raw materials and logistics costs during the quarter. Several companies attempted price increases during the initial months of the season to offset higher costs linked to geopolitical tensions in West Asia. However, weak market demand limited the sustainability of such heights. Against this backdrop, I would like to share that Hanukkah delivered a subdued operational and financial performance during the quarter. The venue from operations... For Q1, FY2627, stood at Rs. 461.93 crores as compared to Rs. 528.290 in Q1 of FY2526, registering a degrowth of approximately 12.556%. EBITDA for the cost stood at Rs. 55.01 crores and profit after tax stood at Rs. 36.530 crores. Our balance sheet and cash generation continue to remain strong, providing us the flexibility to invest for future growth while overcoming the short-term headwind and turbulence. The zone-wide contribution to turnover for Q1FY2627 was north contributed 36%, east contributed lowest 9%, west contributed 37%, and south contributed 18%. Product category-wise, Share was, insecticides contributed 25%, fungicides contributed 14%, herbicides contributed 42%, and others contributed 19%. While the first quarter was impacted by delayed seasonal demand, pricing crashes, and external uncertainties, we believe these are largely cyclical challenges. The long-term growth drivers of the Indian agrochemical industry remain intact, and we remain optimistic about stronger momentum in the coming quarters. The shareholders of the company in the 41st annual general meeting held today at 11 a.m. Consider the final dividend of 100%, i.e. Rs. 2 per equity share, having face value of Rs. 2 per share, and the result for the dividend will be declared within due course. The company has already divided the shareholders with a buyback of 5 lakh equity shares at the rate of Rs. 1,400 per equity share, absorbing Rs. 70 crores. Further, it is to inform you that the company has acquired land at Nagpur, Maharashtra, for setting up a new manufacturing plant. This is in the Bhutibori zone of Nagpur, the industrial area. The total estimated outlet for the project is expected to be up to rupees 200 crores. The proposed capacity of the plant will be 23,000 metric tons per annum. It is expected that the plant will be operational by April 2028. We are pleased to inform you that in the upcoming months, we are planning to launch five new products consisting of one liquid fertilizer, three fungicides, and one herbicide. At Dhanuka, we continue to believe that sustainable business growth must go hand-in-hand with farmer prosperity and national food security. Our continued engagement with agricultural universities, Prishi Vityan Games, and other scientific institutions remains an important part of our farmer education and technology dissemination efforts. Thank you very much for your kind attention. We would now like to open the floor for questions. Thank you.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and work on the test of telephone. If you wish to remove yourself from the question queue, you may press star and talk. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Lion of Rooshab Shaft from Bugal Rock PMS. Please go ahead.

Hi, sir. My question is about the products which we had acquired from buyers. Have we expanded our distribution reach in other countries? And we had appointed some customers also in five countries and we were planning for more expansion. And you had also mentioned that these are some real challenges which we are facing. So just wanted an update on this one.

So, we have acquired Iprovelicarb and its variants and Tritaminol and its variants from Bayer for global markets. And as we speak, we have already established some customers in various markets and already business started with them. Whereas in some markets, we have yet to establish our distribution setup, which is ongoing as we speak. Also, as we speak, the executive director of international business, Harsh, is traveling to these markets in U.S. and Brazil, meeting with customers, existing as well as prospective.

Okay, and so in terms of 7U, could you please tell us how much would these products contribute to the top line in FY27?

As of now, we are not sharing the number of how much Tridaminol and Nitrovelica will be sharing in FY27, but yes, we will address this query separately.

Okay. So, the next question is the products we introduced in the last years like Microsuper and Ferdor. So, how much do the new product launches contribute towards the top line, and has that ratio increased over the years? And also I wanted to know the thought process when you introduce new products, what are the management's internal target for the returns issues and margins which they would like to command and does it differ from segment to segment?

So, what we track our performance on new product production is through Innovation Turnover Index. And we have maintained a healthy Innovation Turnover Index. Last year, it was about 13.89%. And Verdor, which is a biological calcium. Sorry, not calcium. It's a biological, bio-nutrition for various crops. We introduced late last year, sometime in September, and we have seen good traction for verdor in the first quarter this year. There was no significant movement last year. Microsuper was introduced the year before, that was in FY25. Microsuper was introduced in Q1 F525. It did really well in F525. It has done extremely well in F526 also. And this year, Q1 also, Microsuper has received good traction across the geographies and across cereal crops, pulses, sugarcane and even horticulture crops.

Okay and so that's like the second part of my question what is the thought process when you include when you introduce a new product and from internal management that the targets for the return ratios or the margins which you would like to command and would it differ from segment to segment?

Yes, it differs from segment to segment. Since at Nanuka, we introduced new patented products also, new chemistries from various J-makers, Japanese partners, and their premixes. They fall in a premium category, and we command a different margin on those products. Nutrition products also mostly have a differentiated and a premium margin. Microsuper and Verdor both would fall in same category. We introduced various Me2 products and co-marketing products also time to time, which would normally fall in a lower margin category as compared to 9-3 products or nutrition. We benchmark a healthy 20% margin minimum for any new introduction, but mostly 9-3 and nutrition would have significantly higher, more than double sometimes.

Okay.

Sorry to interrupt, Mr. Rushabh. Please rejoin the queue for more questions. Ladies and gentlemen, you are requested to restrict your question to two per participant. The next question is from the line of Umang Shah from Banyan Free Advisors P&S. Please go ahead. Hello, Monksha. Please go ahead.

Hi, am I audible?

Yes.

Hello. Yeah, yeah. Thank you for taking my questions. Sir, my first question was, what is the update on the GST notice that we had received a couple of months back?

Yeah, you see, the... We have already appointed our Lakshmi Kumaran as a consultant. So, abhi iska date padega, so that is under consideration. It will take a little more time.

And are we confident that the order will be in our favor?

Sure, sure, sure. Now these molecules are categorized under that category of fertilizer. So currently, as per the fertilizer is at 5%. So we are sure we will run the test, absolutely. There is no doubt about it.

Thank you. Okay, great. That's a relief to hear. And the second question was two parts. One was, are we looking to sign more deals in the international market like we did with buyers? And will it also help feed our Jahesh land capacity?

Right, thanks for that question. As you are aware, Nanooka is a debt-free company. We have a strong balance sheet and has been like that for many years. So yes, we are scouting out for good inorganic growth opportunities, including product portfolio. Leveraging our capabilities in Daesh plant is always an expanded option. Yet our strength in Indian market, market access, as well as capabilities to manufacture synthesized products in Daesh. All together are various dimensions across which we explore acquisition.

Okay, okay. And sir, this Nagpur plant, is it going to be a formulation plant or is it going to be a technical plant like Rahish?

This is going to be a formulation unit.

All right, all right. Thank you so much. I will get back in the queue.

Thank you. The next question is from the line of Tarishita Shah from DSPS Red Managers. Please go ahead.

My first question was regarding the guidance cut that we have done in the PPT for FY27. I just wanted your thoughts on why such a steep cut, especially on the top-line growth front.

So, as you can obviously see, the movement of monsoon and its impact from various angles, I think so, this is where we estimate our best position to be. We are still, you know, pretty hopeful of the growth that will come in Q2 and Q3, and yet it is absolutely appropriate that we project a clear picture to our investors.

Got it. But, so, I mean, it's safe to assume that second quarter so far has also not seen a larger growth, given that we had some benefit of the pace as well last year's end quarter.

That's right.

All right. Okay. Secondly, on the new facility, the 23,000 tons facility, 200 crore capex for a formulation unit seems a little high, isn't it?

Like, how do you arrive at which is high?

I can't say. No, no, because in an awesome way, because for the technical plant, we had set up, we had extended roughly about 250, 300 odd crores. Usually, the thought is that formulation plant, about 60, 70 odd crores is something that we do, and we expect a 78 times asset turns on a formulation plant. That's why I just wanted your thoughts on the same.

We are imagining this plant to be a significantly automated plant, cutting down on labor dependencies, making this plant a global standard in terms of both safety and efficiency. So, with that automation in mind, we are expecting initially a relatively higher capex.

Okay. But I'm guessing given that it's a new plant, some part of the 200 crore would go for setting up the utilities and everything.

Yes, it will be.

Got it, got it. And yeah, if it turns, we should think about it at like seven, eight times.

I think so. This is probably not the right time for me to come on the acceptance part, but I think so we'll be able to come back and address this towards once the, you know, project details and everything are deeply finalized, which is probably late last, June 4th.

Got it. Okay. Ranjali, if you could just give us the split for the Daesh side revenue EBITDA and Bayer product revenue and royalty for first quarter.

You see, in terms of Daesh, the turnover, last year it was around 16 crore, this year it was around 26 crore. In terms of EBITDA, last year EBITDA was negative 3 crore, this year it was less than 1 crore.

Okay, sir, Vali, could you repeat the revenue number again?

Revenue is 26 versus 60.

Okay, okay, okay, got it. And for bear product?

Bear product revenue is not actually coming in our books in the quadraman.

Okay. And the royalty?

Royalty is significantly lower as compared to... Last year, it is around...

Sir, just your thoughts and just one last question on your thoughts on do we have any threshold on how much do we plan on expanding on these bear products to set up a distribution network in the export market?

As of now, not on that front.

All right. Okay. Thank you. Thank you for the opportunity. Thanks. That's all.

Thank you. The next question is from the line of Tisha Chamarya from Trinity Transhead Manager. Please go ahead.

Thank you so much for the opportunity. Most of my questions are already answered, but there are a few questions for myself. After this current program began, how would you categorize inventory level of distributors and retailers? Are inventories broadly aligned with the primary fields, or do you see any stocking or recogging trends emerging?

And, this you are seeking for which window?

Sir, this is quarter 1, quarter 2.

Quarter 1, quarter 2. So, okay. Now, as you are aware that... Last financial year ended with significant increase in prices and a fear of non-availability, so there was probably some front-loading in the market in the beginning of the year. As the season is progressing, we don't see either way stocking or de-stocking happening. Business is progressing on the go as per the market demand, and inventory rotation is happening normally. So, I don't foresee any stocking or de-stocking by end of quarter two. Either way.

Okay, and recently we have launched many new products, and upcoming also we have many products, so could you please share how many of the C1 revenue came from products which were launched over the last two years, or last three years, and what contribution do you expect from these products over the next two to three years?

I've really not pulled out this part of the data.

But as far as ITI is concerned, it's around 11 months, which is the conclusion of the last year's introduction.

Got it, sir. Thank you.

Thank you. The next question is from the line of Prashant. Prashant from Elara Securities. Please go ahead.

Thank you for your opportunity. Rahul, Q1 was supposed to be a decent quarter, I think, in general because of price increase and... The industry might have got benefit of some low-cost inventory that we would have carried for the Kharib season from Q4, but it does not seem to be so. So, some more details from you on how Q1 panned out, actually, and how is the situation in Q2 on ground would be very helpful.

Yeah, so Q1 for us and I believe industry in general is herbicide heavy for soya bean, cotton, various other crops across large parts of the geography, including special... These were some of the states which were like worst impacted in one.

Sorry to interrupt, sir. Sorry to interrupt, sir. Your voice is not audible. The voice is cracking a little bit.

I'm sorry. Tell me, Sumit, is it better now?

Yes, sir. Please go ahead.

Thanks. I'll take that part. So, Rajasthan, Gujarat, Madhya Pradesh, Maharashtra import cotton and soybean markets. They took a major teaching in terms of rainfall, especially in the month of June. And in some pockets, farmer had to even go for e-swing. That is where herbicides for dhanukaya have taken a hit. And that's how our, you know, that's reflected in our Q1 performance. In terms of south also, the sentiments have not been good. The rainfall has not been good in June as well as in July. Going to Q2 July. While various districts and some pockets have seen excessive rainfall, a large part of the country remains deficit in rainfall, and that's how July is moving. Of course, July is done better than June, yet what we see is a difficult quarter.

Okay. Seeing your revenue breakdown, segment-wise, herbicide declining by around 25% is understandable, but in a season of herbicide-heavy consumption-wise, fungicide sales of 11%.

In fact, here is 40% or 12%.

No, YUI growth.

I didn't get your question.

So, fungicide sales was up 11% year-on-year in Q1. Generally, Q1 is a herbicide placement season, and insecticide, fungicide takes a backseat for Q2 because the sales are generally higher in Q2. But why is fungicide sales also up 11% this quarter?

This is very interesting. Some, in a very specific fungicide, a very special Japanese fungicide has a special traction in dry season in horticulture crops. Now, high horticulture prices, for example, tomato, cocker bits, etc. gave traction for these two products, and that's why fungicide has grown in Q1. Whereas, you are conventionally right, Q2 is a fungicide quarter.

Which molecules would these be, or which brands would these be?

Lysodium, Lysodium, Conica, and Conica.

Okay, and just last question from Mr. Bansal. Sir, generally in a weak quarter, you have, in general, you have very tight control on cost, and, but this time, against a 12% revenue decline, your other expenses are flat. So, is there any one-off in this quarter, or, I mean, we are not able to control it this time?

We are able to control, generally, we are flat. You see, it's very difficult to do. You see, we maintain the expenses at the same level, because, you see, all the expenses, many expenses are officially incurred in anticipation of the season. Their planning is done significantly ahead of the season, right? So, expenses are, you see, because of trade control are flat in terms of percentage or more, but in absolute value almost same, similar.

Okay, sir, I'll go back to the team.

Thank you. The next question is from the line of Riju from Antics of Broking. Please go ahead.

Yeah, hi, sir. So, my question is regarding if you could break up the revenue growth in terms of volume, value.

Yeah, you see, in terms of value, volume growth is almost similar. Value is negative by 12.36 and volume is around 12.75.

Okay. So, the value growth was personally led by the increase in the input cost, right?

It's almost same, similar. Value or volume, there's hardly any difference.

No, no, sir. So, sir, my question was that the price growth that we have seen in this quarter, so that was driven by the price height and that is led by the input cost inflation. Is that correct?

You see, price hike happened in the month of June. It could not succeed. From the May, it started declining, and June, significant decline in many molecules. In July, it further declined. That was artificial, you see, increase, sort of, artificial, artificial rotis, in view of war. So that was only in April. From May, the things were reversed.

Understood. But still, you know, books that it is showing that the price growth of over 12%. So, that's for you to understand if the price growth of over 12%, then why we haven't got the benefit in terms of the low cost inventory and whether it is gross margin improvement. So, that's the one that you want to understand.

Since the price growth is 12%, no growth in price.

Okay. I'm saying that, yeah. Understood. And so, in terms of, you know, their revenue, I think last time you had mentioned that the India business, their product registration got transferred to Danuka's name. So, just want to understand, if we have booked any revenue for that product in India market or like that revenue was nailed in this quarter?

In India market, the revenue was built in the previous year itself. It was started on the last year.

Okay. So, in this, this, yeah.

So, you see, the business is coming quarter two. Quarter one is very nominal figure.

It's a product for grave. So grave season starts in the second quarter. So major turnover will come from bioproduct in the month of September.

Understood. Understood. That's all combined.

Thank you. The next question is from the line of Archit Joshi from Novama IE. Please go ahead.

Hi, very good evening, sir. Thanks a lot for the opportunity. Sir, I have two questions. First thing, the expansion that we are considering in Mahpur is despite having enough land in Dahej, I would assume, we have given out the reasons for, you know, considering Mahpur as a geography for the new expansion, and while having enough land in Dahej. Any plans for having certain assets coming in place or anything of that sort on the land piece? Because I think there are just two plans, I believe, that they're running. And also, the land parcel that we've bought in Mastur, does it have enough room for expansions other than this 23,000 tons of capacity that we are adding? That would be my first one. Thank you.

Right, so the H we are setting has been set up as a chemical synthesis facility in a notified chemical zone. And this space is committed towards chemical synthesis. Chemical synthesis, as you are already aware, is completely different technologically, utilization of facilities and utilities, requirement of technical human resource. Capabilities is very different. We do not wish to overlap the two in terms of formulation facility overlapping with the chemical synthesis facility. That's why this is being set up outside of the Daesh land in a separate. As you are also aware that formulation facilities are relatively easily scalable. As we set up this facility with automation, this would have further expansion opportunities. At Hanuka, we have in recent past introduced more and more low-dose environment-friendly products. So I feel that setting up, providing the farmer with Smaller pack size of really potent and efficient products will take a major leap with this facility.

So, does it have more space for accommodating other assets also?

Yes, it has opportunity for scaling up.

Got it. So second one, on one of the media interactions, I think Hanukaji mentioned that this year we will probably have more biological products which were pretty much absent in the last year. And I think that number was indicated to the extent of around 130 odd growth. And now if I just do the math, the single digit top line growth that you're talking about, we're facing around 100 to 150 odd per hour swing on the overall revenues. And it seems to be offsetting the incremental revenue coming in from Biological. So is it safe to assume that we'll basically be looking at a slattish year on crop protection volumes for FY27? Is that the right reading?

We are looking at a small single-digit growth, I would say. Yes.

Okay. No reason. Thank you. That's it, Tommy. All the best for the next one. Thank you.

Thank you. The next question is from the line of Rohit Nagar from 361 Capital. Please go ahead.

Thanks for the opportunity. So just carrying on the question on biological, how has been the progress during the current quarter, given that last year base quarter, there was a ban and so no sales were observed. So how has been the progress during the month of July for Q2? Thank you.

So, out of three products, we have already introduced two, and one more is in the pipeline to be introduced pretty soon. So, probably by August end, we'll be launching the third one also. We have already received all the regulatory approvals, and most of these days, we have received the sale permission also. So we'll be going ahead with that. In addition to that, we'll introduce two more nutrition biological category products in this financial year.

So, the second question is on the Nakhur project. Now, given that this is going to be a formulation facility, I'm sorry, I missed the earlier part in terms of what is the timeline for the project, and are there any specific benefits from the Maharashtra government to put up this project in Nakhur region? Thank you.

We are looking at this plan getting commissioned in Q4 FY28. And we have certain CGST benefits from the Maharashtra government also.

That is from my time. Thank you and all the rest, sir.

Thank you. Thank you. The next question is from the line of Himanshu from Anantra T. Please go ahead.

Thank you, sir, for taking my question. So, again, sir, helping on the KPEX, the no-KPEX basically, so maybe if you can, like, have some sort of, like, quantification in terms of the benefits which you are going to get from that project number one, and secondly, how should one think about the KPEX numbers for 27, 28, and 29?

EPICS plan for 27-28 is...

Hello, sir.

You see, in terms of this, Laakpur, the capex would be around 100 crore plus, and the haze will communicate later.

Okay, and this we are going to incur in? F by 28 or 29?

20, 26, 27, 28.

27, 28, 100 crore. Hello.

Yeah.

Got it. And so second question is largely if you can like again give a break up of the revenue decline between volume and price for this quarter as well as for the last quarter if that is available with you.

That is not available with me, but this quarter is almost similar. The top line negative in terms of value is 12.56, volume which is around 12.7.

Okay, correct that. Sorry, sir?

There is hardly any difference between value and volume.

Okay. Okay. You got it, sir. You got it. Thank you, sir.

Thank you. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press down and one on the touchroom telephone. Reminder, anyone who wishes to ask a question may press down and one on the touchroom telephone. The next question is from the line of Swarov Jane from FSBC. Please go ahead.

Thank you for the opportunity. Again, on the biostimulant side, when all of this problem started, there were some expectations that the smaller or the organized players would kind of lose market share to the bigger players who do business in a more organized way. So now that you are mentioning that most of the products, I mean, all of the products will be back into the game over the next. One or two months, and two are already introduced. Would you notice, are you noticing any trends in terms of the smaller players kind of going away from the market, and is it more, you know, possibility for the organized players to catch on market share?

Right. The design of the regulation is absolutely in track with our forecast that the smaller players and the unorganized players would probably not have enough. Since the government started approving products late last year and many new introductions have happened over time, what is important to see is how it is implemented, how it is executed on ground, both by the central and the state governments. So various state governments are taking a very stringent view of which products and which players they approve to introduce. Which kind of strengthens the point that the smaller and the unorganized share will have relatively lesser room to operate. So I think so, it will go in the right direction and favorable direction for us.

So already in the 2Q, would you expect that the market shares that you or the other organization, they have a larger market share? And, uh, what is... Okay, and what were your expectations in terms of, you know, what kind of revenue you are expecting from the biostimulant category for this financial year?

Yeah, so since, you know, we are almost reworking the biostimulant category as almost a fallback option also in terms of how we can leverage that, and in the stress conditions, how can farmer take benefit of these products, we are kind of reworking that and probably give you more details later.

Okay, sure. Second question is on the Daesh plant. You mentioned that the revenue in this quarter was 26 crores. Is that right?

Yeah, absolutely.

So, I think last year we did all was about 50 crores, right, in FY26. And now that we have done 25 crores, what would be your guidance on the revenue for FY27?

One of the eight?

Yes.

Redence is around 65 crores.

For full year.

For the full year.

Despite you having done already 25 crores in one queue itself.

Yeah, because that is the start of the season, so initially you get the basically demand from the market, so later on in the later part of the year, demand is not there. So in the third or fourth quarter, the demand will be less.

Okay. And are you expecting to be breakeven at the EBITDA level in this year? On the best plan?

Yeah, EBITDA, their breakeven appears to be difficult. They are trying hard, but I think it is difficult. That will be around in the range of negative 4-5 CR. Difficult to get.

Okay. And possible to also share the guidance on the bare products for FY27?

We are put up, you see, in India business, we are already aware in the part of balance sheet, in terms of the other, you see, work is going on, we are only, you see, incorporating two companies, one in Brazil and one in Europe, and some distributor appointed, the access to that is now difficult to share, but not a very significant portion will come in our balance sheet this year. Not significant amount of money will appear in this year.

Okay, understood. One last question. You mentioned that the sowing trend was weaker for 1Q. But now that we notice in the sowing progress, the sowing for soybean and cotton have improved meaningfully, right? So, soybean, I think you have a very successful product by the brand name Purge two years back, which suffered last year. But then, with the recovery in the soybean sowing and also on the cotton side, can some of the products that you have in portfolio benefit in 2Q and some of the loss that you faced once you put to reverse?

So, these products have a particular segment, which is mostly in first fortnight of July, but preferably in second fortnight of June. So, no, I don't think so. Purge and these, you decide, would have a play of opportunity for now. Okay, understood. Thank you and all the rest. Thank you.

Thank you. The next question is from the line of Umang Shah from Banyu Tree Advisors BMS. Please go ahead.

Hi, sir. Thanks for the opportunity again. I just had one question. Because of this monsoon deficit, one thing that we see is that the sowing is lower compared to last year. Just wanted to also understand, do you observe some stress at farmer level, and would you think that they would not want to spend so much money on crop protection this year?

Well, we kind of thought this, you know, even when prices were going up significantly towards March end. But as things would turn out, on one side, March, vegetable prices went down for a while, but then April, May, and early June also saw significant uptick in vegetable prices and thus significantly increased consumption of horticulture products also. I think so it is both ways. If the acreages would be slightly lower, then the farmers who are left with more acreages would have more opportunity to invest because commodity prices would be ranging higher. So the demand-supply balance, how that appears, is something we are also watching. What will certainly be impacted is where irrigation is available versus where irrigation is not available. So where irrigation is available, which is almost 60% of the Indian agriculture, would certainly have higher consumption as well as higher investment in crop protection as compared to where irrigation is not available. There, farmer will go for low cost or no spray options.

Got it, got it. Very useful, very useful. And second was that although montoon is in deficit, there have been reports that the reservoir levels have been quite healthy. Despite this, when we see that this sowing has been lower, you mean that it has been delayed, right? It is not as if the acreage has reduced.

I'll respond to that in two parts. First of all, please do share with me the list of those reservoirs which are healthy. So that I can talk to my team also. In my understanding, the reservoir health is significantly depleted and, you know, we are still praying for more rains. Yes, sowing has caught up in certain pockets where it has rained well in July and, you know, the acreages, sown acreages have become healthier to that extent.

Got it, got it. Thank you so much. Wish you all the best.

Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the contents over to the management for closing comments.

Once again, I would like to thank all our investors, analysts, business partners, and stakeholders for their continued trust and confidence in Dhanuka Agrita Limited. We remain committed to building a resilient, innovation-driven, chemistry-forward and farmer-focused organization that creates sustainable, long-term value for all stakeholders. India ka pranaam, Harkistan ke naam. Thank you and goodbye. Until next time.