GSP Crop Science Limited (GSPCROP) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the GSP CropScience Ltd. Q3 FY26 Orleans Conference Call hosted by Equator Securities Pvt Ltd. As a reminder, all participants will be in the lesson-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star bill 0 on a touch phone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Siddharth Gadhika from Equator Securities Private Limited. Thank you, and over to you, sir. Good afternoon, everyone, and thank you for joining us today. We at Equator Sub-Case to hold the management of GFP Cloud Science to discuss the 3QSI 26 results. We have with us today Mr. I would now like to invite Mr. Bhavish Shah to initiate the proceedings for the result call. Over to you, Shah.

Yeah, good morning, and good afternoon, everyone. See, basically, welcome to this first call, and see, about GSP. So, there are so many people who are joining first time. So, as a part of GSP, GSP is a company who...

A little interrupt, sir. There is some background noise coming from your hand.

Okay. Now it's okay. And am I open?

Yes, sir.

Yeah. See, basically, this DSP, which is started by my father in 1985, so company is more than 40 years old company, and our main strength is manufacturing, R&D, and efficient. So, in particular manufacturing, we have two technical plants, and one is called intermediate plant, where we are making many technical products, and among these products, 10 products in the last 15 years, we have started first time in India, which were imported by a magical company, so this is over 10. Second, last year we have started one intermediate company where we are now making few intermediate also to reduce our dependency on China. It is our part of strategy and also in future also it will continue. Same way, in R&D, we have two R&D. One is technical R&D, and second is formulation R&D. So in technical R&D, we are doing innovative process. So any new product, which is doing a patent in future also, we are planning before the fire to make this product viable and from basic government terms. So, our R&D is doing the all-necessary work, and as an example, one product called CTPR, which was product patent expired in 22, and process patent expired in December 25. So our IND team developed the innovative process, and we launched this product in October of 22, and today GSP is one of the largest technical industrial companies in India. Same way, we have in last few years, we made a few products from busy roboters. Second R&D is Formulation R&D, where we are making a new formulation also. Giving one example, SLR product, which is such a emerging product. In India, GSP has started first time this new formulation, and same way, there are a few other formations also, which is starting first time in India by GSP. Third is patent. So we have already received 102 patent in our basket. And 1-0-8 pattern is in our pipeline. So from 1-0-2 pattern, already we launched 12 products in last 3 years, and this success fully. And because of this success, our, this patented product business, from 3% in for 3 years, now it is 17%. And we, our presence is in that 23 states and also name all crops like paddy, sugar cane, now new upcoming corn, wheat, vegetables, rice in everywhere and every crop. We are present and we are very strong in particular paddy and pulsey. This is the future for India. So basically our main success, see, basically last year, because of Chishideh's complete drain, Sweden was very bad for agrochemicals, but as a strategy, we have three mechanisms. One is B2C, second is B2B, X4, and third is B2C. So, because of that, and innovative process, pretender product, and new product, our GCR also, our nine months, this are also showing very good, and this is the support of this, this all vertical and pretender thing. In the future also, one brood will be brood, and it will be sustainable brood. So, for solution, I will discuss in the future.

So, good afternoon, everyone. Thank you for joining this call. I'll further take you to the strategy and the thought process behind the company's growth and how do we see our company progressing. So, as Bhaveshvi said, we are an integrated agrochemical company, wherein we have technical manufacturing capabilities as well as formulation, and we have three research articles, that is, we have domestic B2B, which is wherein we deal with almost all agrochemicals in India, who are our customers, and we also have domestic B2C, which is through our distributor network. We have almost 5,000 distributors across India, and we supply them material through our 24-300 locations, which ultimately reaches the farmer. And we have export, which is also again a B2B business, wherein we are export to almost 37 countries. The split amongst our businesses is that domestic B2B constitutes almost 40% of our revenue. Domestic B2C is another 40%. That makes for domestic business at 80% and reasonable export is at 20%. Now, in terms of, you know, strategy, the way we have been trying to differentiate ourselves in the market is by introducing innovative products. So, as Bhavish Bhai said, we started our journey by introducing Line 3 technicals in 2011, being the first manufacturer in India after the Innovator Company, and then since then we have introduced such 10 technicals, which are in which we are the first manufacturer in India. Good morning, everyone. Then what we have developed as a differentiation factor is that once we launch this off-patter molecule, we try to partner that molecule with different existing molecules or newer molecules and try to identify a novel combination which is presentable and which also solves the purpose for a farmer in increasing its efficiency or to solving multiple problems by using one solution. So that is how we have come up with this patent strategy, wherein we have patented many of our such combinations, 102 patents we have already received, 1008 are in pipeline, and these combinations have been a success for us since last 3 years, that with increasing contribution in our total revenue, the margin profile has also increased. In continuation of the strategy of launching innovative combination products in the market for different solutions every year, we also give this patented molecules to our co-marketeers in B2B business. So the way we work is that we would launch a certain combination in our own brand, that is in our own B2C network, and then once the product is popular, we would try to give it to other co-marketers also for expanding the reach of this molecule. So that is how our strategy has been evolving around bringing in new... Technicals which are getting off patent, and once we bring those technicals, we try to combine those technicals with different partners so that at a further level there is better efficiency, there is multiple solutions available in one single crop, and we are able to patent those combinations and create a niche out of this. To give you one example, you know, just three years back we have launched a three-way combination product called PCT410. Now, this product is a seed treatment product which is used for coating of seeds before they are sold. Now, this product has been a blockbuster product for us, wherein we are seeing that in the span of two to three years, we have scaled up the volumes of this business to almost 50 to 70 crore rupees for this particular brand. Now, this product is solving a lot of problems for farmers in terms of the yield or germination of the seed once it is sold. The rate at which the germination happens is resulting into a better yield for farmers. So, by showing these advantages and by putting marketing demonstrations across fields using trail demonstrations at dealer levels, we have been able to popularize this product. And with the success of this product, we have also been able to give this product to co-marketing to other partners. So that is how we have been focusing on our business. In terms of financial, if you see, we have done in almost 9 months, that has ended December. So, in that 9 months, we have done revenue of almost 1150 crores. And in this revenue, if you see, 1114 crores to be precise. And this level as in 14 crores, we have done an EBITDA of 153 crores. This 153 crores EBITDA is an increase of 32% from last year. And this has resulted into a pack of 75 crores this year, which was 59.6 crores last year. This 75 crore of tax is also after an exceptional item of adjustment due to new labour wage quo effect, wherein we have done additional provisions under exceptional items for 4.5 crore rupees. So, that is how the financials have turned out in the last nine months. I think that is all from our side. If you could, we can open the floor for questions.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch phone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question.

Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants to ask a question, you may press star and 1. Ladies and gentlemen, anyone who wishes to ask a question may pay star and one on your touchtone phone.

Participant, if you wish to ask a question, please press star and 1 on your touchtone telephone. First question is from the line of Shivans Singh from Equator Securities. Please go ahead.

Hi. Hello, sir. So, my first question would be, how should you think on FY27, given that INDS forecasted a limo for the college season? Your comment, sir.

See, traditionally, uh... Yes, definitely focus is early novo. See, in my earlier speech, I told that we are more, our main strong area is paddy. And normally in paddy, see, 40 percent consumption is on paddy. And paddy is showing where the irrigation facility is there. So we are not seeing much challenges because of this early novo effect.

Okay, sir. So, also with the rising fertilizer prices, do

we see any impact on the farmer's profitability or their ability to spend on the crop protection products?

So, basically, because of this utilization shortage of fertilizer, and because of that, now we see that in a nutrition product, see, we have a few nutrition products also. So, this farmer is forced to buy this nutrition product, and this nutrition product will definitely have a good score, and it will increase.

Okay, sir. Also, any sourcing challenges due to the Middle East conflict?

Normally we are sourcing from China and no doubt because of this cool price it is impacted, but there is only parking to the customer, so from 1st April we have increased the price from 10 to 15% already to the market, and we are not exporting any product to the US, so we are not seeing any problems because of this.

Okay, sir. Understood. Thank you so much. Thank you.

Next question is from the line of Avneesh Burman from Vicaria Change LN. Please go ahead.

Hi, good afternoon. Thanks for taking my question. I just wanted to extend the last part of the question a little bit. Because of this conflict, can you just tell us in a little bit more detail about what is the impact of business and a little bit impact on the industry? So, one is fertilizer, but in terms of some of the other things, like in your manufacturing, what kind of energy source you are using, how has that changed, how much more you are paying for whatever energy source you are using, it could just give a little bit more detail on the impact of business, both on the supply side and on the pricing, costing side in your business.

Yes, definitely. See, because of Gilevish, one basic main concern is crude. Crude prices increase, and because of that, all raw metal prices increase, and there are few raw metal availability is a concern. So, price has increased. That's why we have already parked into our customer and we have increased our price from 10% to 15%. Number one. Number two, we have visited availability of raw materials. Number two, our strategy. We are, for imported raw materials, we are keeping 45 days in memory, so we are not facing much challenge, although there are some very rare raw materials are very critical, but overall we can't see much any difference. See, basically, logistic price has increased, because of, see, the availability of ships has decreased, so debt from China, it is already almost double, and debt, because of debt also, prices increased, and this is possible to the customers. Number three, basically, see fertilizer, if you are talking about fertilizer, fertilizer because of gas is price increased and even ammonia price is increased, so fertilizer cost has been very high and it is obviously is also very concerned. So normally in this case, so liquid fertilizer or nutrition product or there is a category which has come from the fertilizer act now, it is like seaweed products or so many amino acid products. So these products will definitely increase, and in our case, we have 3-4 products. So we see that it is good potential for particular GPL, and because farmer has to spray, and if the fertilizer is not available, so they will go for nutrition products like this. So, any questions?

Yeah, yeah. So, I have a couple of follow-ups. I just want to divide my questions into two buckets. One is on... Let's say the cost increase and one is on the supply constraint. So the cost increase, what I understand, you have taken a 10-15% price increase. Is it fair to say, like, the gross profit per kg that you were making, that will kind of sustain, because of this 10% or 15% price increase, there would be some decrease in your gross profit per ton or per kilo, whatever way you want to define it.

So, as you said, you know, the gross profit typically would probably be the same if we talk about policy, because whatever we are transferring as a cost will be added to our profit. So that is the case when it comes to costing. In B2B, the prices are very elastic, so it is easier to pass into the cost. In B2C, there is some lag which typically happens, so we have started increasing our pricing on giving signals from 1st April, wherein we are seeing the acceptance also coming from the market. In terms of supply, as you said, there is no supply disruption per se when, you know, our production is currently getting impacted. But there are certain delays due to this shipping and logistics issue. Also, if this gets further prolonged, say this gets further prolonged by another month or so, then there could be a possibility where the supply could be impacted. But as of now, we are fully covered in terms of our inventory and in terms of our overall production Thank you very much.

Okay, quickly two follow-up questions before I get back into you. The first is when you're transferring these kinds of prices on your B2B business, are you not facing any kind of backlash from the partner? Because, I mean, typically what happens is if the cost in the pricing goes up, everybody shares the pay. So, what you are indicating is that you have transferred all the cost increase to the partner, and you are not getting impacted by it. All the hits are taken by the partner. Is that the right assumption?

So, what happens is that, see, in certain chemicals or agrochemicals, while we are selling the final product, so, whatever cost increase is there, typically we try to pass that increase to our B2B partners, and as B2B partners are also working in the same environment, They are aware about the scenario, they are aware about the situation in the global as well as the domestic market, and sometimes it is also about demand and supply, where you know, anticipating the demand, you know, with the upcoming career season. Everybody would like to have their supplies assured. Assurance becomes an important point while, you know, we are discussing about such uncertainty. So, there, in certain cases, we are not able to pass, as I said, in B2C, where there is a lot of channel inventory, distributors are there, there is a lot of competition in the generic market. So, there passing on that cost in the B2C becomes difficult. Similarly, certain technicals which we procure, so there are certain technicals which we also procure. There also we have seen that the price increase has already been passed two months. So, it is a scenario where everybody would transfer that call, but at a B2B3 level, the price like this is there, wherein after 2-3 months, the price will increase.

Okay, and is it safe to assume that right now you are using your raw material inventory, and in terms of supply of raw materials, things have not normalized, and that is why if it extends for one more month, then we can start to see some problems.

Correct. Correct. And also we have inventories that are all changed, be it raw material or finished goods or worse. So this cost escalation which also happens as a company, it would happen in phased banner. So we are able to pass on accordingly in that way.

Thank you so much. I'll get back in the chat.

Thank you.

Thank you. Before we move to the next question, a reminder to the participants to ask a question, you may press star and one. Next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead.

Hello, Maudry.

Yes, good afternoon.

Good afternoon. A few questions. Firstly, on the patented products, you said you currently have 102 products at least patented. Close to how many have been commercialized?

So, we have commercialized 12 stations till now, and our plan is that, you know, we will be coming up with such launches, one or two launches on a yearly basis, wherein we will be adding products in our portfolio, based on the segments that we are targeting for particular crops.

So, our total money. A total of one to two launches annually is that what you are targeting?

Correct, correct.

Okay. And currently what percentage of sale comes from the 12 patented products? Because we are just selling it to the domestic market. So, percentage of domestic market sale, if you could say.

So, currently, if you see in the last financial year, if you see almost 20% of our revenues have come from patented product.

And this year, have we applied any products in FY26?

Yes, we have launched one product this year.

Okay, and how has been the acceptance of that product, and how are we marketing it? What sort of future do you see for that product going ahead?

Yes, so the launch product that we have, it is an insecticide and a fungicide mixture, which is into paddy crop. We are seeing good results, and we are seeing that, you know, this will take one season for it to ramp up, but it is a high potential product for us.

Okay. Going forward, maybe two to three years down the line, what sort of percentage of revenue are you targeting from your patent and products?

So, we are seeing that, you know, going forward in the upcoming three months, we see that almost the growth rate that we are having will continue with that growth rate that we are currently having. So, broadly, you know, on a very high basis, almost 40 to 50 percent, I don't know, will be coming from this kind of products.

Okay.

Yes.

Hello.

Yes.

Yeah, and FI-26, what sort of revenue you had from the patent, etc.?

FI-26.

So, five in the second half.

So, FI-26, you would have almost 20% from the patent.

Oh, similar range, okay. Also, these patented products might, I think, create a higher margin compared to your off-patent technicals. So, what is the margin differential you have in these products?

So typically in this guide that the patented products have higher margin profile, so typically the premium that we get over generics is almost 20 to 25 percent. So to give you an example, if say a generic product is having a margin of say 35 to 40 percent, we are talking about gross profit margins from what we consume, then the patented product will be having say around 55 to 60 percent margins.

Thank you. And that all of the products are currently being manufactured in our capacity, right?

Yes, yes.

If you could help me out with the utilisation of our facilities, maybe the utilisation of formulations and the utilisation of techniques?

Yes, so the utilization of formulations is typically considered as a lower size because formulations is used mostly from a seasonal perspective. It is a more simpler plant where no chemical reactions happen. It is more of mixing and grinding that happens. So there the utilization is in the range of 30 to 40 percent because of the physiology. The technical plans that we have, which is one of the biggest plans, which is at Nandesari, then the capacity utilizations are in the range of 70 to 75 percent.

And the peak utilization, like the technicals and formulations close to, we can, like, utilize close to, you have 90%?

Yes, yes, we can go around 90%.

Oh, you can go around 90%. At peak utilization, how much revenue do you expect from the total cost that we have if we are running at peak utilization? Not in the formulations, but on the technicals.

So, with the technicals and with the kind of mix that we have in revenues, which is, you know, we have almost 75% of our business, which is coming from formulation, and 25% which is technical, we see that with TQP validation, we will be almost reaching around 1900 to 2000 crores, but there is a plan, or, you know, typically what happens is that within the same facility, there is a scope for de-bottlemaking, and there is, you know, with the de-bottlemaking, we can increase the capacities further in the existing, Second, what is also happening is that all the newer chemistries that we are introducing are all low-volume, high-value products. So there also with minimum capacity, we are able to do good value of business. So, we see that the plant is sufficient to cover, you know, almost our three-year kind of strategy that we have in currently.

That is great. You have any three-year kind of revenue and margins you would like to...?

Currently, it will be difficult for us to share, but broadly, the growth rate that we have been experiencing since last three years, we are expecting that this or at least higher growth rate by around 5-7% is what we are targeting for the upcoming three years.

That is great. Secondly, on our exports, are we planning to export our patented products to the B2B businesses there, or this is solely a domestic business that we are targeting?

No, we have planned, so we have already opened a subsidiary in Brazil, and as a part of that we are also registering our patented products which are established in India to other geographies specifically in Brazil, Where we are also trying to create a differentiated product portfolio for us to look for our expand strategies in Brazil going forward. So, yes, we are in the process of resisting our patented products cultured in India also, and we are also exploring that whether in these geographies we can patent these products also.

Okay. Also, the raw material sourcing mostly happens from China, or are we also sourcing from any other countries like the Middle East? No, it is mostly from China.

It is from China.

I will speak to the technical from the panel.

It will be our intermediates that we import from China for manufacturing of our technicals.

Okay, and have you seen a price increase in that coming in due to the conflict right now?

Yes, we have seen certain products price have increased in intermediaries. There are certain price increase in intermediary products also like packing material which are plastic. These are derivatives of petrochemicals. So, there also we have seen certain price increase. But in our B2B business, we have been able to pass on a majority of our cost to the customer whatever price increase in there.

Oh, also to the B2B clients that we are exporting to, we've been passing on the price increase.

Yes, yes, even to the global B2B clients, because global B2B clients are also aware about the scenario, and even in China they are facing this issue. So from a competition standpoint, almost every player would have increased their prices.

Any reason why we are going so slow with the product launchers? Because we have close to 102 patents and also close to 108 pipelines. So do these launches take like six to eight months? How is the registration process?

Registration, yes. The registration for one single product takes almost 5 years because it is a long-grown process. So whenever we are introducing one product which is a patent and unique combination, it requires 5 years of trial and data generation before we register this product. Apart from registration, what is important is how do we manage this product once we launch. So, we have a team of almost 300 sales professionals who are there along with 30-35 marketing professionals. So, for a team of this size to do generate business and also to handle new products and do marketing activities, as per our business strategy, we feel that one or two launches in a year would justify the product's potential and we will be able to then give enough new importance for us to spend time.

And you also mentioned you are co-launching some products with other marketeers. Any marketing partners that you could give a name out who are we partnering with?

Sure. So we do co-market our presented products, and there are different companies for different products which we have co-marketed. To give you examples like Rallis has been one of the co-marketers, Sumitomo Chemicals, even Mankind, Pharma has a division of Mankin and BKB. We have Chambal Fertilizers who are also our co-marketing partners. So the arrangement here works is more of a white labeling, where it is manufactured by GSP and marketed by the marketing company.

That is great. Yeah, thank you so much for answering all the questions. Thank you. Thank you.

Thank you.

Participants, to ask a question, you may press star and 1. Ladies and gentlemen, anyone who wishes to ask a question may press star and button on the attached phone telephone. Participants, to join the question queue, you may best start and welcome. Anyone who wishes to ask a question may press star and 1 on their touch phone telephone. Thanks, there are no further questions from the participants.

I now hand the conference over to the management for the closing comments.

Yes, thank you so much for your participation. It was good answering your questions, and I hope you were able to address your questions. Thank you. Thank you for joining.

Thank you, sir. On behalf of Equira Securities Pvt Ltd, that concludes this conference. Thank you all for joining us and you may now disconnect your lines.