PI Industries Limited (PIIND) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to PI Industries Limited earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an option for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star than zero on your touch-tone phone. Please note that this conference is being recorded. And now in the conference, welcome to Mr. Nishit Solanki from CDR India. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining us on PI Industries Q4 FY26 earnings conference call. Today, we are joined by senior members of the management team, including Mr. Mayank Singhal, Executive Vice Chairman and Managing Director, Mr. Sanjay Agarwal, Group Chief Financial Officer, Dr. Atul Gupta, CEO, CSM AgCAM, Mr. Jagresh Rana, Global CEO of PI Ag Sciences, and Dr. Ramesh Subramaniam, Global CEO of PI Health Sciences. We shall begin the call with key perspectives from Mr. Singel. Following that, Mr. Agarwal will share his views on the company's financial performance. Thereafter, the forum will be open for question and answer session. Before we begin, I would like to underline that certain statements made on today's conference call could be forward-looking in nature. A disclaimer to this effect has been included in the investor presentation that is available on the stock exchange websites. I would now request Mr. Singal to share his perspectives. Thank you, and over to him, sir.

Yes, thank you. So, thank you and good afternoon to everyone for joining the call today. I want to begin with a brief view on the global agrochemical landscape. Follow that, the domestic, agri-environment, and then walk you through PIA operational and strategic progresses. The global crop protection market has been continuing the multi-year down cycle. Recovery remains uneven from complicated by the global events during the caught-up, which has led to a clear shift towards just-in-time for chasing. The conflict in the Middle East is... That the industry was not anticipating. While the pressures are difficult, they also reinforces the strategic value for geography. The drop is generally encouraging from the fundamental reason that the near-term industry demand has been muted due to the elevated channel rents, low crop prices, and incidence of rains. The rally season was good with increase in acres. Thank you. Thank you very much. Good morning, everyone. And our most recent S&P DOC has improved to 98%, placing us firmly in the top-rated general companies in the world. I want to now focus on defining platform PI over the coming decades. I'm in-house chemical entity. the market soon. Maybe I will... Now cross the value chain and turn ourselves into a life science company. We expect in 2017 to deliver growth with exports and global biological sections packed by customer momentum as well as domestic business is expected to gain from the new brand launches. Today, we have chance to move into the next orbit, into a more innovative mindset. Thank you. Thank you. We will continue to be associated, while we will continue to be associated with B.I. as non-engine director of the board. I would love to also take this opportunity to thank you from the B.I. management of the board and all the family of B.I. for this great commitment, dedication. I am always there. So, Sanjay, over to you, and thank you once again, all of you, and to Rajneesh for being an excellent part of supporting the company.

Thank you, Mayank, and good afternoon, everyone. I'll summarize the company's financial performance for the quarter ending March 21st, 2026, and for the full year, FY26. FY26, as Mayank mentioned, it has not been easy for the ACM sector. However, we have been backed by our strong business model and hence navigated this near-term industry cycle. We have also taken several initiatives proactively to work with our global AQM customers, and we believe the sector is transitioning out of down cycle. For quarter 4, FI26, we reported a revenue of $15,652 million, delivering sequential growth as per our guidance last quarter. On a full year basis, the revenue is $67,137 million, delivering our growth on a three-year CAGR. Decline in AQM exports is primarily driven by lower volumes, reflecting the broader global industry contraction and customer delivery schedules. We have commercialized five new molecules in AQM exports and launched four new products in domestic agribrands. New brands now contribute around 80% of AQM exports, highlighting a focused de-risking strategy and innovation-led approach. Domestic agrochemical demand remained. Being impacted due to channel inventory, pricing pressure, delay in the regulatory transitions of biological portfolio, and lower crop acreages impacting key crops for PI. However, we expect this growth momentum to now pick up with a stronger current season. Our domestic business is supported by a strong product portfolio, new product launches, and focus on several on-ground initiatives led by technology and farmer engagements. This year, we launched four new products, three in the herbicides, one in the insecticide. On a pharma platform, we delivered 40% growth in revenue for the full year, driven by building strategic customers and our relentless effort to continue building capability to build a differentiated CRDM work model. Global biologicals also continue to progress with ongoing investments in market and product development, focus on innovation and strengthening R&D capabilities in US and in India. Our gross margins for the full year as well as for the quarter stood at 58%, supported by a favorable product mix and strong operational efficiencies. Further, at the EBITDA level, we delivered what we committed at the start of the year, a resilient margin of 25% for the full year. While the ETR for the quarter is risen due to higher non-SEZ sales, on a full year basis the ETR for Fi26 remains at around 22%. We expect FY27 and thereafter ETR to be in the range of around 23 to 24%. We have sustained our trade working capital in terms of days of sales at 139 days, despite the volatility in the overall market. Our strong debt-free balance sheet, supported with net cash of Rs. 34 billion, provides strong resilience and flexibility for strategic investments. In addition, we have successfully implemented SAP Esporana, which marks a key milestone in our digital transformation journey, strengthening our operational backbone, enhancing data visibility, and enabling future scalable growth with improved governance. As we see opportunities in FI27, we expect a positive growth in FI27, supported by new product launches. Especially our first homegrown NC in the domestic business, and our pharma and biologicals continue to scale up. With this, I conclude my opening remarks. I will now request the moderator to open the forum for Q&A. Thank you.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to answer question. The first question is from the line of Sarabh Jain from HSBC. Please go ahead.

Hi, thank you so much for the opportunity. My question is on the capex that you have incurred over the last three years, which translates to almost like a 2600 crore of capex, but we are not seeing a conversion of this capex into the revenues for the last two years. And for that reason, the asset turns, which used to be almost like 2.5x, they have dropped down to almost like 1.5 now. So, I want you to understand where this CapEx is being directed to and, you know, some sense in terms of how much of it is being focused towards the legacy project and the new projects, and when do you expect this CapEx to be translating into the revenues.

So, I think that's why the question is valid. The point is that if you look at these asset investments are done for a multi-year ramp-up, both in capacity and scale of manufacturing, some of these investments have been in the software arenas of technology, NCEs, and new business arenas, which have belonged to the station, and some of them are coming of color in the coming year and the next couple of years. So, that's really where I would answer that from a contextual point of view.

But generally, I thought the gestation period used to be pretty short, right? We used to set up a plant in eight to nine months, and then it used to start to flow into the revenues. Now, this gestation period seems to be kind of winding. And 2600 crore, how much of that would be spent on to the R&D and technology development, and how much on actual steel on the ground?

Yes, but the ramp up doesn't happen over one year, as you would appreciate, you know, if the eventual new molecule capacities are at X, which are to a maturity, five years you build the plant, the ramp up typically takes four to five years to do that, yeah? And plus the distribution in the newer arenas of innovation, which have been over the last, so if you were to take an example, I don't know the exact number, but I think Jay can get that back later. The arena, and we've been doing the regulatory investments to take the new molecules into the markets. That comes as a price tag, and those are also investments. We're building the new pharma capabilities and assets to create offering for tomorrow. So that's really been split today. So obviously, in the present moment, you see that, but also the industry cycle of these demands have been lower, as you would say, but fundamentally, the new products are in at some point, but maybe a delayed gestation would shape up.

Thank you.

The question is from the line of Tejal Pradhan. Sorry, Tejas Pradhan from Citigroup. Please go ahead.

Yeah, hi. Am I audible?

Yes, go ahead.

Yeah, hi, sir. So, for full year F526, could you give a sense on what the growth would be for excluding your largest product in agro CSM business?

So, if I get your question right, so last year, besides... The new molecules, the new product growth rate.

Yeah. So, as you know, with all the new molecules we've been launching, they contribute around 80 to 20% of our total portfolio. And they also have been growing at a faster clip in the overall portfolio. So, while there, the revenues are declined because of the overall challenges, we know. But the new molecules, they have been shaping well and contributing incrementally to a margin profile. Okay, okay.

So, just apart from the new molecules, even the existing molecules which you would have launched prior to that, right? So, if we just strip out the impact of the largest product, paroxysulfone, excluding that, would there have been growth in FY26 in CSM exports or that would have been a YOI decline?

Well, if you look at the other lines, the biological and pneumonic growth, yes, there's growth, but expected growth is sure to be there, given the external environmental situation and the educational scenario. They have not kept pace, but, I mean, eventually, they're going to come up to shape. That's what you see from a global partner's communication.

Okay. Okay. Understood. And secondly, on the contract assets, now we have seen a reduction from 1,000 crores as of December 25 to 700 crores as of March 26. Now, while that has reduced, on a YOY basis, it is still higher. I think in March 25, it was around 400 crores, right? So... Would we expect further reduction over here to, like, FY25 year-ending levels, and how should we look at this number on a steady-state basis, what sort of level do you target over here?

Well, I would say that if there's a margin, huge reduction, about 30-35%, as you would have seen in this year, for the last quarter, this is subject to asset utilization, to value of product in the pipeline, long-stream of products. So I won't say this will remain over and around the same level, given where the business model and structures are today.

Okay, okay, thanks. And just one more, if I could squeeze in. Would you have a sense on, would you be able to share what the capacity utilization would be at a company level for FY26?

Yeah, the FY26 is about, around, below, a bit below 80.

A bit below 80, okay. Thanks, thanks.

Thank you very much. Next question is from the line of Vivek Rajamani from Morgan Stanley. Please go ahead.

Hi, sir.

Thank you so much for the opportunity. Just one question on the margins. I can see over the last couple of quarters, and for much of fiscal 26, you've been able to maintain your cross margins at a very healthy level of, you know, 58 to 59 odd percent. But for the last couple of quarters, at least on the EBITDA side, we've seen a bit of compression going back to the 22 percent mark, whereas we started the year with a 27, 28 percent margin profile. Just going into Fiscal 27, if you could just give us some sense of, you know, how should we think about margin profiles, both on the gross margin level and the EBITDA margin level?

So if I look going forward, we'll continue to focus on maintaining the gross margins, right? But obviously, you know, the volatility quarter to quarter could be different, but the average gross margin, I think, is that that's what's really focused.

Sir, sorry to interrupt, but we were not able to hear you. Can you repeat the last one second, please?

I'll tell you, we are not, the quarter-to-quarter volatility as it continues, but if you look at the average gross margins for last year, we continue to focus to maintain the gross margin at that level, as indicated earlier.

I'm sure, sir. And the EBITDA margin would be a similar comment?

You see, given the present environment, given the present mind, the volatility of the various, multiple factors, whether it's input costs, whether it's other costs. I would say our target is always to say that how we can continue to manage them and beat them better, but it would be very difficult to give a specific answer today to say where would they be, but yeah, as a company continues to manage and manage that, because why are we making sure that we don't compromise on our long-term trajectory and continue that?

Sure, sir. That's clear. And if we could just squeeze in one more classification. In the opening remarks, when you mentioned you're looking at positive growth in fiscal 27, would that be positive revenue growth or positive earnings growth?

Well, clearly, we're looking at revenue growth as one of the key drivers for this positive growth.

I'll rejoin with you. Thank you so much.

Thank you. Next question is from the land of Huroved, Nagaraj, from 361 Capital. Please go ahead.

Thanks for the opportunity. So, in our PPD, we have indicated that we have received regulatory approval for a launch of a nanator in the U.S. So, what is the kind of scale-up that we are expecting over the next maybe three to five years, and is it a biological or a synthetic one? Thank you.

I didn't get your question. What was your question, sir? It was not very clear. Can you repeat, please?

Yeah, so we have received regulatory approval for the launch of a nematoid in US. That's what we have indicated in our PPT. Is it a biological? And what is the kind of market size that we are tapping or in terms of this particular product? What is the kind of potential revenues that we can generate over the next maybe three to five years?

So I think I will take this as well, and maybe Jarish can fit me in there. Yes, it is a launch of a new biological nematode, and it's the first time a new biological nematode is coming to market at a scale. I think the growth rates, at least you can look at what you're doing to evaluate, and maybe you can do a better fit in.

Yeah, yeah, no, absolutely. And hey, thank you for asking this. So this is, you know, based on the performance we have seen, this is kind of a very unique biological nematode product. Most of the nematode products which are there in the world today, they are mainly applied in the soil. Today, there is hardly any nematode product which can be a foliar application. So first of all, this is the first time that we have introduced a product in the market which is a foliar application based. Second part, basically, in this is that this product, the nematode market overall globally, especially in Brazil, U.S., in these markets, has been growing very rapidly. And more and more farmers are realizing the problems of nematode. We are expecting a significant growth from this product. We have, U.S. is a third market. We have already launched it in Brazil and Mexico. U.S. is a third market. Where we have launched in Brazil, we are basically seeing this year that we should be almost more than tripling our sales for this particular product. It's a product which competes very well with the synthetic chemistry products, and we are seeing some very positive results and good performance from the farmer's side.

Only one caveat I will put, we are still in the early stage of developing a product, farmer acceptance to biologicals. But what we, I think what Jeffers is saying, they are very positive about what we see. I think it will take a couple of years to establish a product, but the results are very encouraging and gives us a huge capability to say, yes, we need to invest to build the markets, and the investments will be an aggressive approach to build this product.

Sure, that's helpful. The second question in terms of ESM business. So last year, we had indicated FY25, the contributions from new products was about 15 to 18%. And this year, we have said FY26, the contribution is about 18 to 20%. If I do the math, it seems that on a year-on-year basis, the new product, absolute revenue seems to be slightly negative. So, how do we look at it from the FY27 perspective?

You're right. You see, as you can very well understand, the global agriculture market scenario itself is challenging, and you can see that in the performance of the large companies trying to put new products, custom expectations, acceptance due to commodity prices. Clearly, as the situation is very volatile, but we do see this becoming a bit better, right? And I think fundamentally the whole agriculture cycle has to pick back, and innovation could get adopted much faster. So we see that to be looking a little bit more positive, and as you would have seen our commentary over last year, there were challenges in the market, and what was expected to turn around, and our companies were looking second quarter, half second half, but still not come around. But hopefully if things shape up in the right direction, we will see a better number coming from here. That's really where I would put that.

Sir, just last one, I'm teasing him. On our novel MC molecule, PSO niliprol, we plan to launch in the Indian market. What about the global launch? Are we expecting any kind of auto-licensing for the sale? And what could be the timeline for the sale? Thank you.

Yes, so right now, for the global markets, we're working in a couple of global geographies where we will be looking to file regulatory. Each geography has different requirements, regulatory requirements, local and global. So we'll be looking to put in application for filing probably at the end of this year or next year. And then we'll be going to the regulatory framework, and we'll be looking at strategic partnerships and we'll announce them at the right level when we come to the right point of decision for them. The first point today is to the global level and the regulatory framework.

Thank you so much and all the best.

Thank you. Next question is from the land of Rahul Jain from Credence Wealth Management. Please go ahead.

In my audio book?

Yes, I got your answer.

Hello. Thanks for the opportunity. Sir, my questions are centered around the electronic chemical market. So, typically, we have mentioned in the previous call about, you know, commercializing about four to five molecules. So, if you could share some details in terms of the molecules, what kind of revenue contribution? What kind of end application each of these molecules are supposed to serve, and what kind of customer sets we have been talking about, both between Japanese and the non-Japanese. That is my first question.

We are working on some new innovative ideas with companies, and as you would say, they are right now at the ramp of state, the electronic chemicals, they are not a significant portion of the company's top line, but what is an indicator that we are very strongly working in that area, and once we scale up, we'll have the right answers, but to give it to specific, their niche applications.

And, sir, if you could share some kind of, you know, typically what can be the size of this segment of our electronic chemicals, say, in the next two, three years? Can this be a thousand crore business in the next three years?

Well, I don't know about three years, but yes, certainly with time, we will definitely look at that. That is our target. We would love to do that. As you stated earlier last year, we have looked at saying, yes, we are looking to target about 100 million in the next four to five years in this segment.

Last bit. So when do we expect the pharma to turn EBITDA positive?

The farmer revenues are, as you can say today, as you've seen the global situation, the CRTMO play is a really, what you call, swing-in and swing-out play. We are right now very confident that we're looking at such an interesting opportunity in some part of the value chains, which should fruitify with time. Obviously, these investment mindsets are shifting. As we see these things move, and as we've stated earlier, achieving a 5,600 sort of top line is when you would see these things move into a positive phase. This could be a couple of years, if not a little bit more than that, to get to that space. But right now, the company is more focused in building capabilities, offerings, and building customer confidence to look at their value data. That's really where we are.

Thank you so much.

Next question is from the line of Ankur from Access Capital. Please go ahead.

Yeah, hi, sir. Thanks for the opportunity. First question on the overall pricing environment, given the volatility in normal prices of late and, you know, the pressure from, you know, Chinese-led, you know, the global pressure there on the income cycle as a whole. Is there any significant pricing correction or pressure that we are seeing across, you know, our portfolio? And second bit, one clarification there, the 5 odd percent realization decline in our exports that we are, you know, seeing, is it more a product mix issue or it's a RM depletion or some pricing?

So, as I was to answer, there are pricing corrections, there is currency deviation, as you know, we have passed through models. Yes, we have seen, we have seen volatility in the romance real crisis, and they have had some impact, but there is a balancing act with the companies playing in this volatile market, while supporting customers, looking at end customer challenges, to ensure that we have a sustainable growth, and planning to put high utilization of our delivery plans, while focusing on managing our smarts. So... Yes, and I can't give you a straight answer because nobody seems to have a straight answer in this very one-time market. Oil is swinging like a yo-yo. Roam oil is swinging like a yo-yo tomorrow, yes, tomorrow, no. But the outcome today is, yes, there's an impact. We are focusing on those impacts. We are looking at how to create a value extraction in the company, and the company has a very strong focus to say how we can optimize and maximize.

Our focus here will remain on volume growth for our existing as well as newer products, or we will prefer to have a balanced approach in terms of margin as well?

Well, our focus today would be to continue to hold the market share big volume because the margin could always return back when the market swings. That's typically our business focus, right, given the volatility that we see. And that does not mean that the margin will not come. But they are more volatile in nature right now, as you would understand.

Sure, that's helpful. And just one clarification, if I may ask. The electronic chemicals or the newer areas where we are expanding into, the CAPEX for them, these will be largely MPP-based, or there will be some dedicated capacity coming in, which is already there in our works?

So, again, these are niche chemicals, they have to be multi-purpose assets, and some may be specialized assets, right? Because we're not in the commodity end of the electronic chemical, we're more focused on niche and complex areas of operation.

I'm sure, Mike. That's helpful. Thank you and all the best.

Thank you. Next question is from the line of Siddharth from Equator Securities. Please go ahead.

Hi, sir. So on the pharma business, could you just share your thoughts in terms of growth and profitability over the next two, three years? How should we see this business scaling up?

As I think I mentioned to the earlier question, was exactly that we are looking right now to build those capabilities in the next two, three years. As I said, if we would be able to look at 1,600 core top lines, we should be able to move to that phase. And as you would very well understand, being the CDMA play, you know, it takes a long time to build the foundation, but then you start seeing an accelerated curve, which moves fast, because the entry barriers and the regulatory frame was followed with early-stage products. You start targeting, and when the cycle picks up, it takes a J-curve, that's the approach that we're seeing. So I see that in the next two, three years, to start showing some early shifts. Yeah?

Secondly, on the global biology, we will know. Given that now we have started getting sort of registrations and also building a distribution model across geographies, how should one think about the effects of this business and when do we achieve a scale where we break even in this business?

Again, I would say the way to answer this, what we have seen, as I think Jareesh mentioned earlier, we see the project positive trajectory. And you would see the markets itself are depressed. Today, the agri sector, we are clearly seeing a great acceptance of our technology and product performance, and I would say we are very much positive. We've got to do a heat-breaking. Opportunities of no more innovations, we will be investing, and we will not do that without a value add. So we are definitely very excited to what we see, but a couple of years from now, it doesn't look too far from us to be playing that game.

And lastly, for FI27, in terms of any, we would have any higher OPEX in terms of any large registrations or any other one-time costs that would be coming in our P&L, given that we are looking at commercializing a few products?

Yeah, so this is an ongoing thing which we have been, since we've been investing into R&D, and we're looking at these new NCs. So this has been continued in the last few years, and the same trend will continue of 50-200 crores of additional spends, which go…

I think his question was next year.

Yeah, next year, FI27 as well. We'll have similar expenses for the R&D, and also for the launch. Since we're looking at the Pyotonic Pro launch this year, we'll have some additional cost in the next few quarters on that.

And for the global products also, we would have an additional cost coming in?

Yes, clearly. I think the question is going to be very precise, your answer. Next year is going to be heavy investments in building out months. So those costs will be that. Okay.

Thank you. Next question is from the land of Surya. From Philip Capital, please go ahead.

Yeah, thanks for the opportunity. My first question is on the investment priorities going ahead. And what is the kind of a capex? In terms of the investment priorities, I just wanted to understand any specific investment that we are talking about, the new business opportunities.

So, these would be the CAPEX we've tried in the past also, so we should have 700 to 800 crores of CAPEX this year as well. Again, to fill in, build in new CAPEX capabilities, both at the manufacturing level, some of the new launches which we are going to be having, R&D spends which we are going to have, and across both pharma and our agrochemical business.

Okay. And also to have better understanding about the kind of incremental contribution that we should be seeing from the newer business area, is it possible to discuss what is the kind of a construct of your order book position currently in terms of the areas, whether it is agrochem, pharma, and whichever newer area that we are talking about?

Well, we don't have a specific area for new areas, but I think somewhere around 11.2 billion, which is already the order of the position, which continues to hold on, yeah? But we won't have a specific break-up of those right now. Because typically the other businesses are...

So, sir, then next question would be on the supply chain constraint. See, you have mentioned about maintaining the gross margin situation for the full year, the 527, but if you can say something, what is the kind of availability situation and what is the kind of impact that possibly in the near term that we can see because of the availability of the raw materials, whether that's a big challenge at this juncture?

And you have got me exactly, so I think it's one of the most simple questions with the most difficult answer, maybe, or difficult answer with a simple question. Yes, you know very well, as you all, we know, we are all challenged with that availability, and that's not something in our hand. But so far, we've been able to manage, and we'll continue to manage, but we never know when the situation changes the way the world is today, right? And I'm sure that's applicable to most of us in the sector.

Thank you, sir. Thank you for the call.

Thank you.

Next question is from Ruanus Kumar from Murtilal Oswal. Please go ahead.

Yeah, sir. My question regarding pharma segment, and you have mentioned in the PPT a significant increase in CDMO inquiries. So, how is the conversion is going to happen, considering all the inquiries you have? Number one. Number two, we have seen in the PPT, your services business has increased significantly. So, what is leading this business? And also, you are adding new customers in the last 12 months. So, considering all these factors, next two to three years, how much growth you are expecting in the segment?

I think we just answered that earlier, yes, as you know, we are trying to have CDMO, the success rate is moving to two years, new customers, new avenues have been opened. Andy had mentioned we are looking at 500 to 600.

Sir, sorry to interrupt you, your audio is not clear.

As you mentioned earlier, right, and that there is all these initiatives which have been taken, we are looking to target to get this next two to three years, yeah, for 500 to 600 crore business. Which would then become the J-Cubb approach to look at how we can look at more expected growth going forward.

Okay. And from the outlook perspective, you have written, we remain positive for the growth in FY27. So any number, can we talk on double-digit, lower double-digit, mid-teens kind of growth you are expecting in FY27?

I would say, yes, growth for sure. Double or late single will all be subjected to how the world reacts. Yes.

Normal case scenario? Normal case scenario?

I can't look at the normal case scenario right now because the quarter is once. It's too close to the quarter to answer that. But yes, I can say we can definitely look at growth, my friend, at a later stage or nearly late stage single digit or early stage double digit at the worst case scenario. And the things take time.

Worst case scenario?

Yeah, the worst case, we will definitely have some growth, I hope, because if there's no oil and there's no fuel and there's no food, then we can't do much, right? So today's world to answer that is challenging, but we have plans for growth in a better place compared to the competition.

Thank you. Next question is from the line of Abhijee Takella from Kodak Mandra. Please go ahead.

Good afternoon. Thank you so much, sir, for taking my questions. The 1100 crore capex that we incurred for FY26, sir, will it be possible to just break down the specific key projects in which this investment has gone?

Yeah, so across both the agrochemical, pharma, and the R&D spends which we have done, so we were about to commercialize Akilola facility in Lodi plant, so that has taken substantial sum, plus the MPP, one of the MPP in the flow which we have commercialized during this year, so the spends have been there on the agrochemical side, and then the last is on the R&D investments which we have been doing.

Okay, but just to clarify, the presentation says Pharma CapEx was about 91 crores for the year. Correct, 100 crores. Yeah, so then should we understand that the remaining, you know, say 1000 crores or so is all agrochemicals or how is it?

Agrochemical and the R&D space. And the fine chemical area that we are talking about.

That will include all the electronic chemicals, agrochemicals, the R&D, fine chemicals.

Right. Okay, R&D is a, sorry, yeah, sorry, just to clarify, fine chemicals, any specific plant that's been put up or it's part of the MPP, sir?

Yeah, it's one of the MPPs which is getting commercialized, as you mentioned earlier, if you would not. Okay, all right.

Thank you. Second one, for plant healthcare, would it be possible to just quantify the revenues for FY26?

So, they have been in the range around 12-30 million dollars.

Understood. And, yeah, sorry, I might have missed this earlier, so please excuse me if I did, but on contract assets of 700 crores, what's the kind of trajectory we are expecting in the year ahead? I mean, will it decrease further or by how much?

Well, I think that's the range we've always been in in the last few quarters, given the business model and scenario, balance capacity, inventory and customer needs, and also look at the volatility of supply chains.

All right. Thank you so much. All the best.

Thank you. Next question is from Zainab Rupesh. From Long Equity Partners, please go ahead.

Hello, sir. Thank you. Thank you for the opportunity. First, I have one request. I mean, one of your largest product in the CSM segment, I mean, there are patent rates. It's nothing new. Most of the CDMOs or CSM companies have to deal with it. What would be really nice is if you can address that question in your press release in some way. That I think would be really appreciated because there are so many layers to that molecule. So that is my request. The first question, sir, is on that molecule. Do you see sort of like a gradual decline over the next two-three years and then bottoming out? Or do you expect like a cliff that we will see only in that molecule? I'm not asking about the rest of the business.

Well, I don't know how to answer that. Number one, you need to appreciate that this is not our molecule as a partnership. Revealing strategies would be a challenging scenario in today's context. We are in a highly competitive world, and I would like to look and model this to the approaches that you've seen for any other product that would be generalization in the sector.

Okay, okay. The second question, sir, is for electronic chemical business, what is our current gross block, and what kind of gross block do you expect in next two, three years?

We will be making another few hundred crore investments in that area, and that's a new avenue of growth. So new assets and plants will be built up. As we continue to see that we want to scale business up, we have got four to five products in the pipe which are working well. We are looking to develop more strategic areas into this. So investments of the gross block will be going up in this area, and then over the next five years, we'll start seeing terms of the volumes and revenues that we plan to achieve.

But, sir, is there numbers like 200 crores, 500 crores, 1,000 crores, what kind of asset, asset turn, any range would be helpful?

Anything substantial of that area, 500 crores is the number which we have already looked at. 100, 200 is not a significant investment as we would appreciate in the plan today.

And asset turn would be high or low? Some idea around that.

I think it's easier to answer today because you're right to invest in to build the business. The asset terms that you would see in the CSM business, the early stages have lower asset terms.

Okay, okay. And then the final question is on the NCE molecule. In the NCE molecule, I mean, for the life of a patent, right, let's say 15 years sort of. I mean, what kind of potential? I mean, I know it's a very dynamic world. There's so much hard work you have to do, find partners and all that. But what kind of potential can it be for the company of our size? I mean, today, we are at, let's say, 8,000 crore revenue scale. Would it be significant for our scale or it would be, you know, 10% kind of? I mean, from some range, there would be very helpful in terms of potential over the life of the patent.

It's a significant amount. I think we are pretty calm. We are pretty nervous now. I think the year of launch and the first season of launch will give us the... The most important significance that needs to be noted is taking an innovation, commercializing. I don't think a single company from India has done that, and it's probably the first company in the sector to do that. So that's the benchmark of putting our capability to take from... The capability will look for more new things. Thank you.

At some point of time, you give some preview into the upcoming NCE molecules, sir. I do hope that, and all the rest.

Thank you. Next question from the line of Aram Arvind from iPod PMS. Please go ahead. Hi. Am I ordered?

Yes, sir.

Go ahead.

Yeah, thank you for the opportunity. So, my question has to do a bit with the client that we are serving for our biggest molecule. So, since they have come up with guidance of their formulation in which they use our molecule, they have come up with the guidance of beating their conservative guidance of a full year of last year. And so I'm just trying to understand if our shipments to this client of ours is going to get better in the upcoming quarters. So basically what I'm trying to understand is if we will have growth on our ad-com export sector, which is dominated by one single molecule, do we see traction in that molecule going forward? Do we see volumes picking up in that molecule specifically for the next couple of quarters?

Well, I will look at the way you look at that customer and follow that guidance. From our perspective, when contract manufacturing, so what we are building in is already what we have contracted. I would appreciate the supply chains along. Clearly, it will be too early for us to answer until then.

Just to follow up on that, since I know we've addressed about the contract assets already on the call, but we've seen a reduction of contract assets going from Q3 of FY26 to Q4 of FY26. So does this mean that our clients are actually, so we're basically billing our clients, and they're actually trying up on the results of our contract assets? So would we see this trend moving forward, let's say, by Q127, Q2?

There's a bad level of inventory, which is always kept. There will be a high level, given the volatility, as you could appreciate in the world, we are looking to keep and build and make optimized capacity so there's no point in runouts. So that's how we're looking at it. The City of the Valley Chain of Production.

And probably close on the contract assets for 27.

As I mentioned, we'll be remaining within this range for what we estimate for today.

Another question just on the electronic chemical side. So what is the approximate revenue figure that you can give us for the electronic chemicals for FR26 and any guidance for 27 and 28 as well? Because some of your clients have been talking about the end market dribbling by FY30. So I think there's a lot of traction in these molecules that PI is entering into, and I'm just trying to understand the whole market for these electronic chemicals and the numbers from your side.

To be honest, to tell you, we are right now in the early stage. The numbers are not significant for the PR top line with the development stage of some of these products. We're building capacities and understanding and capabilities for the customer. In two to three years, we will be in a better position to understand the scale and size. As you would understand, these are very serious. Even the facts, the areas that we are operating are in the niche space. We have mentioned four to five products, which we are evaluating and developing. Thank you.

Right, so for it to have, let's say, a significant contribution, like, let's say, how pharma is having in our business side, those kind of numbers,

we've estimated about somewhere about $800,000 of revenues in the space.

Right, right. Yeah, thank you for that. And any commentary on gross margin guidance for 2017?

So I think as you have earlier questioned by a couple of others, we said we're continuing to manage them.

Yeah, thank you so much.

Thank you. Next question is from the line of Sajal Kapoor, from Anti-Fragile Thinking. Please go ahead.

Yes, hi. Thank you for the opportunity. Two questions. PI has spent more than a decade discussing adjacencies like pharma, electronic chemicals, life sciences, yet agrochemicals still remain the dominant economic engine of the company, and we have been discussing why so. So, as on today, from management's perspective, was the original assumption that PIs, process chemistry, and customer trust advantages would automatically transfer more easily across domains than they actually did? And what has been the single biggest unexpected challenge in building meaningful non-agro skills?

That's my first question. Thank you.

Sir, I'm not very sure. Thank you. The rest of the message...

Sure, sure. That's helpful. I was actually alluding to the 2012 annual report, but anyway, I mean, what has PI learned so far about the difference between scaling ActChem CDMO versus scaling Pharma CRDMO and what capabilities still need to be built before PI can genuinely compete with established pharma synthesis leaders on innovation depth, not just chemistry execution? Thank you.

If you see the investment there, we have looked at the biological offering capabilities which have been invested. We started working in that. We are looking for the investment with the KSM materials in the past. We have a GMP facility. We need to be further prepared for CDMO. Our kero labs are going to be fired up in this year, which is going to pay five points for the future. So I believe in the next year or two, number one, you can't get all the capabilities of the offerings. So we are looking at capabilities which we need to have, which we can depreciate. Two, areas where we want to partner, so we can become a full integrated partner for a pharma biotech startup to a company with strong manufacturing in a regulated and unregulated environment. So I believe in the next couple of years, we'll be in a pretty good, unique company.

Wish you all the very best, man, and team. Thank you.

Thank you. Next question is from the line of Archit Joshi. From Goama, please go ahead.

I just had one question. Would it be fair to assume that the current ACM market is taking more towards generics than that of patented products? And if you could also allude as to why would this be happening? Would there be some stress on the farm economics level or is it the farm demand that is going to erupt fast? So any thoughts on that would be quite helpful.

Yes, I think that's a good analogy. If you were to pick it up, if you look at it, to be very honest, the commodity prices are not moving further than the prices on the other side are high. The input cost to the farmer is going. Agrochemicals are becoming a necessity, so he's looking at cheap solutions right now. But there are positions and openings for the opportunities in certain sectors where he doesn't have any... It is just a cyclical nature, and as the aggression would come up in the commodity cycle and the agriculture sector, to the bottom of the pit when the markets hit back, whereas innovation will still consider setting pace, so not an average gaggle. Short term of windows of cycles, if you cut and paste, yes, you could see the cycles and trends that you're talking about, which is what you call external dynamics.

Right. Thanks. Thanks. That helps, and all the best.

Thank you very much. With this, we turn to today's conference call. Now in the conference, over to the management for closing comments.

Thank you, everybody, for joining the call, and thank you, as always, for your support, and look forward to catching up with you over the next quarter. Thanks once again.

Thank you very much. On behalf of PI Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.