Best Agrolife Limited (539660) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q3 and 9 Months FY '26 Conference Call of Best Agrolife Limited. [Operator Instructions] Please note that this conference is being recorded. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. The statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. Today, from the management side, we have with us Mr. Vimal Kumar, Managing Director; Mr. Surendra Sai, Executive Director; and Mr. Vikas Jain, Chief Financial Officer. I would now like to hand the call over to Mr. Vimal Kumar for his opening remarks. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and thank you for joining us today. I will start by sharing an overview of our performance for quarter 3 FY '26, followed by our outlook for the coming quarters. During Q3 FY '26, our sales performance was lower on a year-on-year basis. This was mostly due to a combination of climate and market-related factors. Q3 was significantly impacted by unusual weather conditions. October 2025 witnessed exceptionally high rainfall across the country. India recorded rainfall that was nearly 49% higher than the long period average, making it the second highest October rainfall since 2001. Rainfall was also erratic and uneven across many regions. North, West and Central India saw heavy rains with parts of Punjab and Haryana heavy flooding -- having floods. This condition disrupted sowing schedule and overall cropping cycles. At the same time, pest pressure in paddy crops remain very low. While this is positive for a crop health perspective, it reduced the need for crop protection products. As a result, demand in some of our important markets were affected during the quarter. In West India and Central India, excess rainfall impacted soya business spray programs. Important regions such as Madhya Pradesh and South Rajasthan were affected. Because of this, inventory from Q2 got carried forward into quarter 3. Fresh product placement and field activity could not take place as originally planned. Official data has indicated that during October to December 2025, all kharif crops, except paddy, traded [ at ] discount 9% to 30% of the MSP. That impacted purchases by the farmer. For Rabi, the weather conditions remained favorable with stable temperatures across many growing regions, but we saw less disease and pest in crop like wheat, cumin, potato and onion. These crops usually contribute to our quarter 3 revenues and this softness has an impact on our Q3 performance. On the market side, industry faced challenges related to high inventory of generic at the trade level. This leads to higher price competition across the industry. Despite these near-term challenges, we remain confident in the long-term fundamentals of our business. We are taking active actions for improving productivity, better predictability and increasing -- increased profitability. Steps we are taking include data-based inventory control, ERP analytics for tracking sales and collections, comprehensive app for the sales team operations, connecting dealer and farmer through digital campaigns and introducing chatbots for the dealers. These steps have begun to show results, and we hope to leverage data analytics and AI to take the company forward to increase productivity, lower cost and improve profitability. Our patent product portfolio continue to perform and our distribution reach remains strong. I am particularly encouraged by the performance of our 2 newly launched patent combination, Best Man and Fetagen. Both products have received strong acceptance from the farming community. In this very first year, even we got the registration at the end of the season. In the last -- we can say, July and August, in the 2 months, we got very good response for these 2 products. So we are confident that coming year, '26-'27, we will get very good for this Best Man and Fetagen. Each product has crossed more than 4 lakh treated acres, which is a strong validation of our innovation efforts. Alongside growth initiatives, we have remained focused on improving operational efficiency. Our continued emphasis on cost optimization, inventory reduction and disciplined receivables management has helped our balance sheet. Looking ahead, seasonal activity is progressing well across Central, Western, Eastern and Northern India. Field conditions are improving and farmer sentiment are stable. With a strong pipeline, better cost discipline and improving market conditions, we are positioned for growth in the coming quarters. We remain committed to delivering sustainable value to our farmer partners and stakeholders. With that, I would like to hand over the call to Mr. Vikas Jain, who will walk you through the detailed financial performance for Q3 and 9 months FY '26. Thank you.

Thank you, Vimalji, and good afternoon, everyone. I'll take you through the financial performance for the quarter and 9 months ended December 31, 2025. Starting with Q3 FY '26, revenue from operations stood at INR 202.9 crores compared to INR 274.1 crores in Q3 FY '25. This was largely due to unseasonal rainfall affecting crop patterns. Gross margin for the quarter was INR 65 crores, down from INR 89 crores in Q3 FY '25. Despite the unfavorable seasonal conditions, we were able to maintain gross margins of 32% EBITDA for the quarter was a profit of INR 3.8 crores, an improvement over a loss of INR 5.8 crores in Q3 FY '25, with the EBITDA margin improving to 1.9% from a negative 2.1% in the same period last year. Operationally, we focused on cost optimization with OpEx, excluding the finance and depreciation, reduced by 36% in Q3 and 20% over 9 months, helping maintain financial discipline despite lower revenue. On the profit after tax front, we reported a loss of INR 12.7 crores, improving on a loss of INR 24.2 crores in Q3 FY '25. Looking at the 9 months performance, revenue from operations was INR 1,101 crores compared to INR 1,540 crores in 9 months FY '25. Gross margin stood at INR 345 crores, down from INR 468 crores in the same period last year. EBITDA for 9 months FY '26 was INR 127 crores with an EBITDA margin of 11.5%, while PAT for the period was INR 46.1 crores compared to INR 91.8 crores in 9 months FY '25. 9-month year-on-year sales declined by 28% with 23% attributable to volume decline and 5% due to price variation. Despite the overall decline, the patented portfolio remained relatively stable with only a 5% reduction, whereas the non-patent portfolio declined by 48%. Sales return were also much lower than last year, largely due to implementation of the stringent sales written policies. This concludes my overview of the financials. I now hand over to Mr. Sai, who will walk you through other business highlights.

Good afternoon, everyone. I will quickly take you through what's happening on the international business front, mainly around exports, registration and IP. Starting with our exports markets, things are moving steadily across regions. Across key markets, progress remains steady. Our registration for our patented products in Sri Lanka are moving well. The dossier preparation is underway for finalized products in Vietnam. And in Morocco, we continued discussion around pesticides and our patented nano urea. On the execution front, we finalized our third export shipment to Sudan. We continue to do these exports on a cash basis. The IP side has been particularly strong. We secured 3 patents for novel combination formulation. In addition, we were awarded a process patent for an intermediate with export potential. This patent improves the yield and purity of the product. Beyond this, we have filed 4 international patent applications, which continue to strengthen our global IP position. We also received our first grant in a nano formulation. Our nano particulate fertilizer is aimed at improving nutrient efficiency across crop yields. Overall, we are seeing a steady progress both in expanding our international footprint and in building a strong innovation and IP-led pipeline. That's a quick -- just from my side. Thank you. We can now open the floor for questions. Thank you.

[Operator Instructions] Our first question comes from the line of Hemant Gupta, an individual investor.

Sir, in the previous con call, we were discussing mostly about the sales return and the H2 numbers, and you were very, very confident that you will achieve INR 600 crores in H2 with positive PAT in both the quarters. What happened, sir, suddenly?

It's not about the sale return. What we are talking about, sale return, there is not -- that is under -- in the provision only. Sale return we call, that is under the provision only.

So Hemant, mostly in the sense -- if you are aware, most part of September -- August and September and including October, there was continuous rainfalls. Especially in the north, most of the flooding has also happened. So this impacted a little bit of sales. So we were very confident that we'll be in positive. Yes, can you hear me?

Yes, yes. But we had this call in mid of November, sir, not October.

Yes, you're right. What I'm saying is that the liquidation and all, the impact of sales, we come to know only at the end of December and at the end of the quarter. So even though we were hopeful that we might do a good placement for rabi, but even rabi is a little softer. So the placements also for Rabi has not happened up to the March. So that was the reason that some sales was missed. But still, as was committed, that we'll not have major losses like last year. Our key improvement was that we had reduced our inventory drastically along with the reduction in OpEx, even though we missed out a little bit on the profit front.

Sir, even in one of the calls which you had in end of December with one of the news channels, you were clearly mentioning that you are trying to have profitability in both the quarters. And it is just a week before the quarter ending and I'm not understanding why this -- suddenly how this loss has come.

Yes. Mr. Hemant, as I mentioned, mostly the rabi happens from the -- the placement happens from end of December, and most of the liquidation will happen during now. So presently, liquidation is going on. So yes, we were confident with respect to our profitability, but we had missed a little bit on the placement front because of the soft rabi season. So still, as you see, our losses are still pretty limiting to INR 12 crores, which we could have done based on the placements, what we were expecting, but that didn't happen. So again, our expectation is that Q3, Q4, we should be not having losses. So we had little losses this year. Again, we are trying for Q4 not to have any losses.

Okay. And in terms of this warrants issue, sir, do you have any communication now with the shareholders? Are they willing to pay before May of this year?

So still based on the market prices, we have to wait for a few more months before we can take any call as to what will happen.

And if they don't pay before May, what will happen, sir?

So as per the terms, the amount will get forfeited. So we don't want that situation to happen. But yes, based on the market situation, we will take a call and discuss with the investors.

The next question comes from the line of Gunit Singh from Counter Cyclical PMS.

So I would like to understand if we have been losing market share if we compare from FY '24 to currently. So the revenues went down from INR 1,800 crores to about INR 1,400 crores trailing 12 months. So I want to understand what were the sales volumes for 9 months of FY '25 versus the 9 months currently to understand if we're losing any market share or not? Because if you see, one of our competitors, Dhanuka Agritech, they have been maintaining their revenues as well as improving their EBITDA margins. So for example, our EBITDA margins in FY '23 were about 18%, and theirs were also the same then. But now theirs have gone up to about 20%, but ours has come down to 10%. So can you please help me understand what's going on?

So with respect to the market share -- so obviously, Dhanuka and we are obviously in a different growth phase because ours is mostly recently that we have gone into B2C in recent 3, 4 years. But yes, compared to the volumes, our endeavor at the beginning of the year itself was that we want to increase our sales of patented product, which we were able to do. So our patent portfolio compared to last 9 months and this 9 months was just about minus 4%. That was also because of the prices. Otherwise, our volumes are up. But for the nonpatent, because last 2 year, we had suffered a little higher on the sales return front, wherein we had to take a little bit of inventory, that also affected our working capital. Our sales of the non-patent was lower. So that we said was lower by 35% to 40%. Yes, we might have lost a little bit, but not on the patent portfolio, but on the non-patent sales a little bit. And with respect to Dhanuka, yes, only for Q3 -- if you see, most of the companies who were able to show better results was because of the exports. But if you see other peer players, what we have, most of them had a reduction of 10% to 20% reduction in the sales as well as in the profitability.

Sir, so, overall, our volumes have fallen by about 30%, 35% if you compare year-on-year, whereas the competitors, their volumes have not fallen this much. So can you, I mean, help me understand why are we losing market share? What are we not doing right? And what is going forward for us?

Yes, Mr. Gunit. Yes. In fact, we cannot say we are losing our market share. It depends on the products. Like last some years, we were doing mix of some generics and our patent portfolio, and now, we are mainly focusing our patent product. Definitely, if I say when our patent products are selling more and our generics are -- we are not selling that way, so definitely our profitability should be high, our EBITDA margin should be high. That is correct. Your question is very correct. And our concern is the same. But at the same time, when we are pushing -- when we are developing this kind of our patented molecule, which in India if you see any other company, you say the name, no company has that much of own patent molecules they are doing in India. But this is the period where the last year and this year we are totally changing toward -- from generic to patent. And when we are developing this kind of patent products like our one product you know, because some depth also -- so the Ronfen you know. So that itself one Ronfen product, we are selling more than INR 200 crores. And it was -- we have started in 2022 mainly. So you can see in 3 years, 4 years -- '21 we had started, but '22 was the main year. So in 3 years, one product we are getting INR 200 crores. But definitely what about the others. So we are in the phase where we are doing marketing more, where we are doing sales force more, where our expenses are more. So the main reason is our expenses is more. And sometimes this kind of condition, climating things, and to develop the new molecule is a little bit harder. So that is the only thing. If we talk about next year -- and 1 year it is enough for us if it will go well, I can say like this way. And we are in some of the products, like I've said you 2 products, Fetagen and this, our Best Man. These 2 products are fantastically doing. That can be bigger than Ronfen in coming years, that we are -- we can see. So it depends. So of course. But result is real, where we are now standing up near 10%, 11% of EBITDA and we have to reach 20%. We are not far away. But definitely, the results are results, and I hope next year will be very good.

So, sir, in my understanding, it is because of the R&D spends this year that the margins are falling down. Is that correct? So how much is the R&D spend for 9 months? And what are the EBITDA margins for the patented products?

I'm not talking about R&D. I'm talking about the expenses on the sales and marketing. Sales and marketing as well as R&D. But not R&D. It's not that big part. But major part is sales and marketing for the new products.

Sir, so R&D expenses...

If you talk about...

Sir, please go ahead.

If you talk about our gross margin, so our gross margin already is around 32%. So gross margin is good. But when we come into the EBITDA, EBITDA less just because of the new product. It is taking some time. And if any climatic things or anything comes, that will hit us more than others because we are in a new product and development stage. So definitely, nobody will try if there is very less demand or already market is hitting in that way. So -- but the way we are doing -- the way we are doing our new products, so I think 1 year is enough to change all the scenario because we are on the same path. And I think we are on the right path. Because last 2, 3 years, we have seen generics slowly, slowly it is decreasing and the exclusive molecule which we have is increasing year-by-year. But definitely, we are ready with the products. So whenever a chance we get. And 1 year is enough to come back.

Sir, so based on the current demand scenario and outlook, I mean, what do you feel like what should be our top line and EBITDA margins for FY '27?

Yes, please, Vikas.

So FY '27, still pretty early to say. For this year, for FY '26, already for 9 months, our sales are around INR 1,100 crores. So we expect to close the year between INR 1,300 crores to INR 1,400 crores. So this is for the current year, which will close by March '26. For '26-'27, still we are in the process to have our number, but we should see our growth coming back and we should be coming back to our earlier numbers which we had since our earlier 2 years.

All right, sir. And we did an acquisition of about INR 140 crores in March 2024. But if we look at the numbers for FY '25, I mean, it does not reflect either in the revenues nor in the bottom line. So can you throw some light on how the operations are going there? And I mean, why the numbers do not reflect in our revenues?

See, this year, we -- already at the beginning of the year itself, we had given to say that this year we will stabilize because what happens is when the sales team since last 2 years we were in a mode to do a lot of placements and do higher sales. But because of sales didn't -- we were getting affected on our inventory and working capital front. So this 1 year -- it takes time for the sales team to come to newer policies, and we had already informed at the beginning that this year we will stabilize. And once we are in good shape with respect to our balance sheet, next year we can think of growing our sales. So it was not that -- it was a surprise to some extent because of the continuous rainfall that we missed around INR 70 crores to INR 100 crores of sales. But otherwise, this year was expected as we had thought at the beginning of the year with respect to, as I said, inventory front, reduction in the inventory, reduction in sales return and reduction in OpEx. Now all these 3 are mostly achieved and there is already awareness in the market with respect to dealers and sales team that we are more concentrating on our patented products. And we will not accept such huge sales return, which is stabilized this year. So next year, again, we are talking about the present numbers, what we are taking from sales team. We are pretty confident of having our growth back, especially that we are -- our 3 products which we introduced last year, it was a little late. But next year, we will see the full results, and also 3 new products which are going to come. So our growth will be back from next year after whatever we have done in this year with respect to stabilizing the inventory and working capital.

Okay. Sir, my last question would be what is the revenue potential from our existing capacity? And in your judgment and opinion, do you think that the worst is behind us? And I mean, our revenues and EBITDA margins cannot go below the current levels and there's only upside going forward?

So our capacity -- so earlier at INR 1,800 crores also, we had sufficient capacity. So based on our existing capacity, we can do INR 2,000-plus crores. So capacity is not a constraint. So that thing more or less we can easily achieve from our existing capacity without actually adding anything. So it was only because that our B2C business was pretty much happened or we pushed a lot in the last 2, 3 years. So whatever we had gained from around INR 400 crores to today INR 1,000 crores in our branded business happened in the last 2 to 3 years. So we took a year to stabilize that operation, and we'll see that next year, our numbers will go up. So our capacity is more than enough for us. And even our OpEx, which we have reduced drastically, have stabilized. We had done a lot of restructuring on our locations on the territories. That also has happened and have stabilized this year.

The next question comes from the line of [ Chintan Mehta ], an individual investor.

So my name is -- so thank you for numbers. I just want to understand what is the projection for the international expansion for Best Agro going forward like, because the margins will be much better. So where we are looking in terms of numbers or in terms of potential in the international expansion?

Yes, please. So in terms of any new revenue stream, exports and international markets will definitely be one big area. And in that front, one of the key challenges in case of international business is the number of registrations. So currently, we are progressing on our patented portfolio registrations, which are expensive, and there, we have found very good partners who are doing that. So in addition to this particular registration process which is going on there is a parallel R&D which is going on in terms of identifying certain intermediates which can also be sold abroad where the registration cost or the registration challenges do not exist. The third thing that has been working on is in the area of nano urea, where we are seeing a good amount of potential abroad. So as a result of these multiple initiatives that we have taken on the export front, we opened up our China subsidiary. And China subsidiary currently is doing -- at least it is doing some degree of revenue. Although it is okay on the gross margin, there is a slight amount of a loss in terms of the net profitability. That is because of the initial expenses. This China subsidiary is currently doing some degree of trading practices for buying and selling in China itself. Overall, there is a potential upside that we see in terms of our export revenues. It would be a little bit difficult to be able to give a hard number because that would be a projection. But we do expect our export revenues to be a good percentage of our total top line. And as you mentioned correctly, yes, India has been doing a significant amount of exports. We are one of the largest exporters of pesticides in the whole world. Given the challenges in China and other things, I do expect -- and the options and the advantages in India, I do expect this export market to grow. We are a little slow on this particular front because initially we have not been able to leverage and catch this. But yes, this will be one big area for us going ahead.

Yes, the follow-up question is that, like, let's say, for example, the patent is granted. So how much time it takes from registration? Because I'm not like -- I do not have an understanding of how that registration works. But if I want to understand, if registration is completed, what is the time frame or a time period from which the revenue gets started generating after the patent is granted? Because in the recent discussion, you mentioned one of the patent is granted, right? So that does mean that a product can be developed on that? Or like what is a time frame or a time duration that it takes from a patent grant to convert into the real numbers? Like what the journey looks like?

Yes, that's a good question. Because in case of the agrochemical industry, what happens is getting a patent is a little different from being -- registering that particular agrochemical in that country and being allowed to export and sell. The 2 are different. Now what happens is, while we are getting a patent portfolio, as far as the export is concerned, that country's registration time takes anywhere between 2 to 6 years. In case of Brazil, it may take even more longer than that. So the reason for that is very simple. This is a patented product, and hence, it is a new formulation or a new technical sort of combination in that particular country, and hence, the amount of a regulatory oversight is more. So we have started multiple products registration in multiple countries. These will come up anywhere between the next -- I would say, certain things will be available for -- will be registered in the next year, especially in Vietnam and Sri Lanka. And from the year, that is '27 onwards, you should be able to see a good amount of our revenue. Once it is registered, the sale of that particular product can happen.

Okay. Okay. So this is similar to the Sharda Cropchem doing the export. So basically, if we are -- and any kind of a European agreement that -- recently we completed a deal to European Union. So is there going to be any beneficial for Best Agro, a trade deal?

So as of this -- yes, yes. As of this minute, if we had, had multiple active registration for registered products, we could have immediately been able to utilize the opening up of the -- both the U.S. trade market, European market, as well as certain parts of the Australian market. But right now, we don't have that. So once our products get registered, yes, obviously, the open trade regime which is happening, that will help us a lot. In fact, it will help us more because -- yes, yes, it will help us more because what we are registering is all high-value, high-margin products.

The next question comes from the line of [ Kailash Chander ], an individual investor.

My question is basically regarding receivables. So it has been observed that receivables below 6 months are continuously, I mean, being increasing ratio-wise than the receivables more than 6 months. So can you please elaborate in this front?

Yes. So receivables, more or less it's in line with what we had previous year. So this year, because of the continuous rainfall and there was a delay in the produce, and the same being repaid by the government, so there was a delay by say just about a month or so. But most of the receivables are under control, and there's not a big surprise there.

Actually, ratio-wise -- if we see ratio-wise, I mean, initially in the financial year -- previous financial year, if we see -- so ratio was lower side till -- particularly if we see 3 months below, it was somewhere around -- so I'll just open that and -- so if we look at the balance sheet, so in -- it was -- I'm taking little please -- so sorry for that. For the time being, I'll ask second question. So as you mentioned that you are not focusing on the patented products. So what is the TAM for these products, total addressable market?

We are focusing on the patented products. We are not focusing on non-patented, the generic ones. So -- and with respect to TAM, it's not overall market for the agri industry. In that, we define which are the highest selling crops, and within that crops, which are the solutions we want to provide. So for each of the crops, it would be different. But yes, we are still -- as others are playing, we are playing in the overall market, which is around INR 3.5 billion or so.

Okay. Okay. So that receivable part in the March 2022 -- so receivable 6 months was INR 38 crores as compared to receivables under 6 months were INR 223 crores. Now it has increased drastically for year 2025, if we see. So it is INR 182 crores over 6 months, and under 6 months, it is INR 400 crores. So ratio-wise, it is very -- at the higher side. So that part, I was talking about.

So as I said, in our business, the collection period is defined based on how we produce sales and the money flows from the government to the farmers, dealers and to us. So this year, mostly it has been delayed by a month or so. But we don't see any major surprises, as I said. So most of our collections will happen now between December to April. So each month, we are getting collections and each month we see that there is a reduction in the 6 months. So March once you see, you'll see an improvement in our more than 6 months from what you would have seen in September or March numbers.

Okay. Great. So my last question is, as you mentioned that the company will try to achieve somewhere between INR 1,300 crores to INR 1,400 crores of revenue in this particular financial year. So can you please let us know about the EBITDA margin?

So EBITDA -- with respect to EBITDA, we will be -- similarly, our endeavor would be to possibly not to have losses, but we'll have minimum profit. So our EBITDA would be a little higher than what we have in Q3 because Q3 and Q4 are softer seasons compared to main Q1 and Q2. So again, like how we had planned for Q3, our plan is not to have losses. So EBITDA would be in similar lines like current quarter, but it would be a little better. And we will try not to have losses in Q4.

Actually, I was talking about annualized basis for financial year '26.

Annualized basis, we will be in the range of around -- we'll be at around 12% or so. So that would be our EBITDA targets.

The next question comes from the line of [ Vivek Rautela ], an individual investor.

So basically, I have a question regarding the outstanding warrants. So the current -- the exercise price for them is INR 64 per share, okay, while the current market price is around INR 18.94, and it may face further downside because of the recent results as it is in lower circuit today also. So in this context, I just wanted to know what is the management view on this warrant conversion? And how like should shareholders think about the potential impact of this?

So our price was INR 640. That was pre-split and pre-bonus. So if I consider the...

Now it is INR 64 -- yes.

Split and bonus, it becomes -- after considering the split and bonus, it is supposed to be at INR 42. So INR 640 is equivalent to INR 42. So instead of INR 42, yes, we are at around between -- close to 20 or so. But as I said, we are hopeful that we are improving. So we are not having the losses like what we had last year. So we hope that the prices would come to a level where investors would feel that, okay, they will pay that balance amount. So we are still -- wait for our March numbers, and then we'll take a decision.

Yes. But during -- like I'm following it since 2 years, okay? So during this period, the company's revenues have been like continuing to decline. I understand that the business model has undergone changes, like you are focusing more on patented products. But in several earnings -- because mostly I hear all the earnings. So the management has indicated that the worst phase is behind. But the financial performance like whether it is revenue or profitability -- like something happens. Like sometimes the weather issue, sometimes something. So can you like tell us like when we can expect the revenue growth to be back, at least like when it -- to our peak numbers? I think it was around 2021 or 2022. So can we expect the same revenue from ...

So for this year, it was not that in 1 or 2 quarters we could have come back to a normal term. So for the entire year, our guidance was that our revenue would be lower, but we would still go on to improve our profitability percentages and reduction in our OpEx because we had spent heavily on the 9 patents what we had launched. So most of it, we are able to achieve in terms of what we had given the guidance. But it's not that this year was like a big surprise. Yes, surprise was -- as I said, was only to the extent of INR 50 crores, INR 100 crores which we missed. Otherwise, our results would have been better. So this year -- this year would be the worst, what we say, and the worst would be behind for us. And from next June onwards -- already we have our plans and we have our policies which are in place, which till last year was -- we were about -- we were changing those policies. So now we are more stable with respect to our -- the number of people, the policies what we have and the products which we want to sell and also on the supply chain front as well. So the growth will come and it will come from the next year immediately. From June onwards, you'll see the growth, which will be back.

Okay. So just wanted to know one thing. Suppose if we want to do INR 1,800 crores or INR 2,000 crores of revenue and -- so when can we expect that? And -- like within 1, 2 years or it will take more time? And what should be the PAT at that time? Like profit before tax and profit after tax -- what can be the operating profit? If you can tell like a little bit, if you can guide it.

Yes, your question is right. In fact, next 2 years, we are, of course, changing that number. And next year, we will come around INR 1,600 crores, INR 1,700 crores or maybe INR 1,800 crores also. Because just I told in the Mr. Gunit question also that we are already in the same path where we are developing our new products, and each product will give us good revenue in coming year, in FY '27. And I firmly believe FY '28 will be, again, a very good year because each of our products which is patented, each of our products will have 2-year, 3-year, 4-year, 5-year history. And when there is a history of 3 year or 4 year, there will be a big revenue we can expect from these products. And that the profitability will be again very high. So again, I want to say, earlier, we were doing in a different way, and then we change our way because that was also important, because our inventory level now is very drastically down, which we -- which is required by our -- which was required to our balance sheet, good balance sheet. And also our debtors have reduced. So that was our agenda for this current year. But definitely, coming year, because of our patented molecule, definitely, we will do better. And the revenue almost I can say in next 2 years, again, we will touch to more than whatever we have did in the past.

So what can be the OPM percent? Can you tell me like -- you told around 20% we can expect, right?

After 2 years, yes, you can say.

So this year, it won't be 20%, like if we talk about this year -- like the next financial year that is coming, yes.

Not 20% -- definitely, our target is there, but I cannot say 20%. But definitely, it will be -- 16% to 17% will be minimum.

Okay. So like you are sure like the worst is over. Like it can't be like worse than this, right? Like just wanted to confirm that thing?

Yes, we can say. We can say because -- I told you everything why it is hit, because we want to create a discipline and we have -- in my commentary also, I said we have done very well many things, data-based inventory control, ERP and our comprehensive apps. And also, we are now directly looking at the liquidation at the farmer level. So definitely, when we are tightening this and making something like chatbot for the dealer. So so many things we have did in the 1 year. It was a developing year for us for the new product, again, I would say. And definitely, I can say -- according to the performance of balance sheet, definitely, you can say -- I can say we have seen the worst and now it will be better only.

The next question comes from the line of Saket Kapoor from Kapoor Company.

Yes, Vimalji, just taking into consideration -- [Foreign Language].

[Foreign Language] And definitely, your concern is correct. And as you said, I have a major shareholding. So definitely, my concern are the same always with the company, within the company. But definitely, what I can control and what I can change here as a small shareholder you cannot do. But definitely, I'm doing my job, and our team is extremely doing very well. And in other part, if I will say, because we all are -- because you are our shareholder, stakeholder, so I can frankly tell you -- if in other way, I would say I'm very happy with the team work, which groundwork they are doing. If anybody on the call who knows the farmers and every -- who is related to the dealers, if you check in some of the market like Maharashtra or if you check some of the Maharashtra -- like Gujarat, maybe Haryana or some of the states, there our brand is -- they don't know about balance sheet, they don't know about share price, they don't know about anything, but they know about the new company, which is the new company, who is growing very fast in the brand image of the company, like Ronfen or Best Agro. So it is very popular in the farmer community, I would say. [Foreign Language] I feel sometimes very happy. But definitely, we are doing business. So profitability is equally important and revenue is also equally important. And I can say from next year, it will be definitely better. And again, I would say [Foreign Language]. So I cannot say worse, but definitely we have done much corrections. And I don't think so there is any surprise on the downward side you will get. Of course, I'm hoping you should get surprised on the upward side, and we are doing our best for that thing.

And sir, sales returns whatever course correction was needed, I think so Vikasji would be answering that better. That provision and all, if you could just give us some color for the quarter, how much have been our sales return and -- [Foreign Language].

So if I tell you overall, [Foreign Language] but what we got was around INR 90 crores. So we thought we will end up with INR 40 crores, INR 50 crores of sales return, but [Foreign Language] across different crops. And still the deviation -- overall [Foreign Language]. And the specific question of Q3, [Foreign Language].

[Foreign Language]?

[Foreign Language] so we will do a little bit of sales. But with respect to sales return, [Foreign Language]. But we will do reasonably okay and try to ensure [Foreign Language].

And lastly sir, CapEx [Foreign Language], if I remember correctly. [Foreign Language]?

It is still on hold. [Foreign Language].

[Foreign Language] that is, give us gains that we are anticipating. And we hope for -- we will be participating in this journey with best efforts.

The next question comes from the line of [ Vijay Jhawar ], an individual investor.

Want to understand whether we have utilized the proceeds which we have got from the preferential amount?

Whether we what?

The amount which we received during the preferential, have we used it or not?

Yes, yes. So the 25% amount what we got, those as part of our utilization, this thing, we have already utilized it for the working capital purpose.

But we need to -- like we have actually planned for a CapEx, right, some new plant. So I thought that we are using that particular amount to fund that CapEx. Am I wrong?

So the CapEx was only from the second tranche, from that 75% which we had thought. So that we'll see only -- once we get that balance 75%, we'll think of the CapEx.

So are we looking for any fund raise because we are already at a lifetime low in our share prices? So are we looking for any fund raise from promoters or some institutions?

So for CapEx, we are not doing anything as of now.

Okay. Sir, but we have a due around June, right? So as the earlier participant asked that the price is like 50%, 60% down from what they have actually subscribed. So it looks like impossible to receive the balance 75% amount. So is there any plan B?

So see, we don't want to commit as of now that, okay, we are not going to get that 75% and we'll do something else. So the CapEx plan can hold because we have enough capacities to go for our target for next 2 years. So we will see. If the situation will improve, if we feel that we are in a better position, then we'll think of taking the funding from outside. But yes, presently, we are not thinking about that.

And sir, we have reports from weather agencies. So there is a possible of El Nino in current -- in next financial year. So do you have any plans because you have -- now your -- if promoter starts giving a guidance of INR 1,700 crores, INR 1,800 crores, and if at all there is a possibility of El Nino, then do you feel that there is a risk even to the current revenue levels?

So INR 1,700 crores, INR 1,800 crores for next 2 years in the sense -- so next year, our plan would be to achieve at least at around higher than INR 1,500 crores -- INR 1,500 crores, INR 1,600 crores and then going up to INR 1,700 crores, 1,800 crores. So El Nino -- obviously, there are presently some articles going on to say that there are El Nino effects, which might be there. But our nature of industry is that we cannot be waiting to see that how it pans out. We have to work on our supply chain much before. So we will work with a caution. But because we have already put good policies to ensure that we'll not place too much and then later on take it, that will help us. So yes, El Nino effect might be there, but it will show only in July, August. But before that, we have to prepare ourselves with the inventory, which we will do, but we'll go with a caution.

I think, sir, there is a person called Raj Kumar in our shareholding pattern. So is there like any connection to him with the promoter?

No, no, no, not yet, not yet. I'm not aware of Raj Kumar.

No, no. There is a person called Raj Kumar who is holding 7% to 8% equity in Best Agrolife. So is there any connection with the promoter group?

No, no, I don't think so.

Because he's a huge equity person in Best Agro, and he has sold quite a large chunk during the split and bonus time. So I felt that he's an insider or something because...

There's no relation as such. Yes, possibly, he might have higher holding, but then we don't know about it with respect to relation with promoters.

He's no relationship with promoters? Okay. Sir, so...

There is no relation, yes.

Yes. So what's your expectation from Q4 because we are already at a INR 12 crore loss in Q3? So do you think that it will continue or we'll have a better quarter?

Our expectation is not to have losses. So in Q4 last year, we had very high losses. So based on -- already we had worked on the OpEx part, which we are reducing drastically. So sales -- obviously, as I said, the demand is a little softer. So we don't expect very high sales. But we expect not to go into losses and have even the small profit. But our plan is not to have losses.

Sir, because we are already paying INR 50 crores to INR 55 crores interest to the bank and our profitability is below since last few years. So how do you think that the business is sustainable because our interest cost is more than our net profit?

See, there is a huge potential because based on the market situation, we see that many of the companies doesn't have this kind of portfolio what we have. Now obviously, company is going through a situation wherein we had gone heavily into the market and faced certain situation, which we are trying to improve. And this year, we already knew that the steps if we'll take, there might be some reduction in the sales. So yes, sales are down, profitability is not so heavily lower. So we are still profitable for full year, and we'll remain profitable. It's only that after going through these policies, now we are in a much comfortable position with respect to our inventory. Even our dealers are more comfortable with respect to the policies what we are doing. And even our sales team is more stable now because last year, they -- because of restructuring of territories, there might be a situation where people are moving from one place to another. But now everything is pretty stable, and we are in a much better position to grow because of our portfolio strength. So that way, we are going to do this year. And we are hopeful that if everything goes well, we will see much, much better numbers this year.

And sir, why has the interest cost gone up in Q3?

So interest cost obviously would be based on the loan, what we would have utilized. So if there was a delay by a month or so, maybe if dealers have paid late, generally, we charge dealers with a little bit of interest for delayed payments. So that we do based on -- after they do the payment. So even though on one side, there will be interest, so this quarter or next quarter, you will see that we might -- we will be charging some amount as recovery of that interest. So it's not that we are paying higher. We would be recovering this from the dealer who are paying a little later to us.

Ladies and gentlemen, due to time constraints, we would take that as the last question for today. I would now like to hand the conference over to Mr. Surendra Rai for the closing remarks.

Thank you, everyone, for your time today. We appreciate your interest, feedback and confidence in the company. Your engagement will help us sharpen our focus and stay aligned with long-term value creation. I would also like to thank our employees, partners, customers and investors for their support and commitment. We look forward to staying engaged with you and updating you on the progress in the coming quarters. Thank you very much, and have a good afternoon.

Thank you, sir. Ladies and gentlemen, on behalf of Best Agro Life Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.