Best Agrolife Limited ($539660)

Ladies and gentlemen, good day, and welcome to the Best Agrolife Limited Q4 and FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantee of future performance of the company and it may involve risks and uncertainties that are difficult to predict. Today, from the management side, we have with us Mr. Surendra Sai, Executive Director; and Mr. Vikash Jain, Chief Financial Officer. I will now hand the conference over to Mr. Surendra Sai for opening remarks. Thank you, and over to you, sir.

Thank you -- conference call of Best Agrolife limited. As a business year for the Indian agrochemical sector, FY '26 was an average year with some unexpected and adverse weather conditions. The weather was unseasonal throughout the year and we had some areas experiencing lower-than-expected rainfalls, while other areas is seeing [indiscernible]Due to this, there were some impact in [indiscernible]. Certain [indiscernible] segment did not perform as well as expected like [indiscernible] in addition to an average season, there was a buildup in the trade inventory, which also led to [ depressed ] sale. Our focus throughout the year remains on strengthening the long-term fundamentals of the business. We continue to strengthen our basis in terms of quality, pricing, inventory and expenses control. Our strategy remains focused on building a stronger [indiscernible] portfolio for a positive impact on the farmers' income. Our [indiscernible] service has shown positive feedback for our specialty products with overwhelming positivity and acceptance from the farmers. Farmers in [indiscernible] Maharashtra, Rajasthan, have been appreciative of our products like [indiscernible] we have also observed that in the branding at the farmer level, and we are addressing these with social media and WhatsApp campaign. We have acted on the farmers' needs for biostimulant and introduce 5 new products in this category. The new segment of bioproducts includes [indiscernible]. We are confident of strengthening farmer loyalty and enhancing our brand recognition. During FY '26, we launched 3 patented products, namely [indiscernible] has received encouraging acceptance in key [indiscernible] markets giving a strong efficacy against [indiscernible] and border in crops. [indiscernible] are also gaining strong market traction. FY '27 will see us launch [indiscernible]. These patented products are expected to further strengthen our positioning in the specialized crop protection market. Our focus continues to be on strengthening the IP portfolio. We received 7 combination patent, 1 [indiscernible] patent and 1 process patent this year. The Synthesis R&D centers successfully commercialized the [indiscernible] manufacturing process. FY '26 for the synthesis development and manufacturing process for new molecule, at least 4 new generation molecules will be produced this year at the [indiscernible]. This reflects our continued investments in research and development and reinforces our commitment towards an innovation-led growth and partner network manufacturing. To improve the balance sheet health and maintain better market discipline, our key levers will be operational discipline, capital efficiency, inventory control, return policy and expenses control. Looking ahead, while the external environment continues to require close monitoring, [ focus level ] with respect to the monsoon progression and, of course, the ongoing -- we believe -- in FY '27. The impact of [indiscernible] this year has been carefully analyzed, and we are taking action to mitigate its impact on the sales. In our brand segment, we are implementing calibrated pricing policies. We are introducing new buyer products and our patented product portfolio will continue and this will support our improvement in profitability and the overall brand business performance for the continued quarters. We are experiencing a [ scourge ] in [indiscernible], especially for our popular products such as [indiscernible] we are introducing high security [indiscernible] on our key products to help our customers differentiate between genuine and [indiscernible]. Another problem we are addressing is that effect [indiscernible] in any product which does not work, the farmers generally use an alternative method of having another product which is having the same [indiscernible] results. Globally, [indiscernible] is displayed on label and is [indiscernible] information for preventing development of [indiscernible]. Our new label will display [indiscernible] based on [indiscernible]. We believe this transparency will help the farmers choose the right products. We are positive about ramping up the production from our technical manufacturers, converting the R&D successes into commercial successes. Our registrations abroad are ongoing with two registrations in Mexico in the final series of approvals [indiscernible] the registration of our [indiscernible] molecules is in progress on a fast track, while we successfully received our first registration in Thailand. In Vietnam, we are expanding the registration portfolio with our local partners. Regarding orders. We continue to shift consignment [indiscernible] to the -- where our products are being well accepted. We are in the final stages of starting a subsidiary in Brazil. We are also continuing to see interest in our patented nano urea formulation [indiscernible]. We remain committed to creating long-term value for all our stakeholders through innovation, disciplined execution and sustainable growth. With that, I would like to conclude my remarks and hand over to Mr. Vikash, who will walk you through this year's financials.

Thank you, [indiscernible], and good afternoon, everyone. I will begin by taking you through the company's financial and operational performance for the quarter and financial year ended March 31, 2026. FY '26 was an exceptional -- in the industry -- elevated channel inventory levels with dealer liquidity and volatility in raw material prices. Despite these headwinds, the company remains focused on operational discipline, working capital optimization and strengthening long-term business fundamentals. For FY '26, consolidated revenue from operations stood at INR 257 crores as compared to [ INR 1,814 ] crores in FY '25 reflecting a decline of 31% year-on-year. Gross margin for the year to date is INR 380 crores as against INR 531 crores in FY '25. However, gross margin percentage improved to 30% compared to 29% in the previous year. This was supported by product mix improvement and celebrated pricing actions. EBITDA for FY '26 stood at INR 100 crores as compared to INR 200 crores in FY '25, while EBITDA margin stood at 8% versus 11% in the previous year. Profit after tax from FY '26 stood at INR 9 crores as against INR 70 crores reported in FY '25 with PAT margins at 1% compared to 4% last year. Within the branded sales, even though the sales had dipped by 31%, within the branded sales, supporting the patented portfolio went down by only 7%, and the generics were lower by 40%, indicating we were able to maintain our portfolio or rather improve it. Patent products now contribute up to 40% of our total branded sales, which until last year was about 30%. Coming to the quarterly performance, revenue from operations for Q4 FY '26 stood at INR 156 crores as against INR 274 crores during Q4 FY '25, representing a decline of 43% year-on-year. Gross margin for the quarter stood at INR 35 crores compared to INR 63 crores in corresponding quarter last year while gross margin percentage stood at 23% this quarter as well as Q4 '25. EBITDA for Q4 FY '26 stood at negative INR 27 crores compared to negative INR 4 crores in Q4 FY '25. EBITDA margin for the quarter stood at negative 17% as against 2% in the corresponding period last year. EBITDA [ for this quarter ] stood at negative INR 37 crores compared to negative INR 22 crores in Q4 FY '25, while PAT margin stood at negative 24% versus negative 8% in the same quarter last year. The fourth quarter was particularly impacted by weaker seasonal demand, lower channel liquidation, elevated inventory at the distributor level and sharp increase in raw material prices during March following geopolitical developments in the Middle East. In response to the sudden increase in input cost, we consciously calibrated during March -- that less B2B segment. While this current decision impacted near-term revenue by approximately INR 50 crores to INR 70 crores, we believe it was necessary to protect medium-term profitability and maintain channel discipline. Significant revenue input costs, the company implemented two rounds of price increases, one during April and another during [ May 20, 2026 ]. We expect these pricing interventions to progressively support profitability beginning in Q1 FY '27 onwards. One of our key operational priorities over the last two years has been working capital optimization and inventory reduction. We are pleased to say that inventory levels have reduced significantly from approximately INR 958 crores in FY '24 to INR 773 crores in FY '25 and further [ to INR 651 ] crores as of March 31, 2026. This reduction reflects tighter procurement planning, calibrated production [ series ], rationalization of slow moving inventory and sharper channel management practices. As we move into FY '27, our focus remains firmly on improving cash flow generation, standing balance sheet quality, enhancing product mix and driving sustainable profitability rather than purely volume growth. While the external environment continues to remain dynamic, we believe improving inventory alignment, pricing actions already undertaken and increased contribution from differentiated products should support gradual recovery and profitability over the coming quarters. With that, now we are open for question and answers.

[Operator Instructions] We take the first question from the line of [indiscernible] Private Limited.

I have two questions. My first question is for Surendra. What type of strategic levers are we prioritizing in FY '26-'27 to expand the company's crop protection for [ full year revenue ] distribution network of India and manage it from regulatory changes and raw material price volatility? That's my first question. [indiscernible] after this.

So [indiscernible] let me try to answer this [indiscernible]. For FY '26-'27, we would like to know what our strategy [indiscernible] our crop protection portfolio. In terms of our portfolio, there are two things that -- two actions that we are taking and which are important. The first one is that the overall [indiscernible] feedback from the farmers from the field. There is an interest in bioproducts. [indiscernible] biostimulant and these are [indiscernible] growth enhancers and improved [indiscernible]. These products have been introduced. So currently, we have introduced 5 new products for FY '26. And these products, we hope will get good traction and will meet a farmer's need. While we introduced -- while we had not introduced a new segment for quite some time, we felt this was the right time to introduce biostimulants into the market as these are important. The second point [indiscernible] would be increasing our product portfolio is on the introduction of new patented products. So we will be continuing to -- a couple of new products in terms of [indiscernible]. Now the third area that we do see that there would be a certain requirement and demand is in the area for nano urea. I think this [ wealth contract ] will significantly impact the volatility and pricing of urea. As a part of this particulate [indiscernible] we have already got [indiscernible] we are progressing into the final phases of the consulting of the registration on the nano urea segment. Now -- you had -- the second part of this question was on the distribution network. Now we did grow our distribution network to around 10,000, 10,000 plus [indiscernible] somewhere around 10,800 dealers [indiscernible]. What we have seen that is that while the distribution network is large, there are a lot of good distributors there are a lot of not so good distributors who delay in terms of both payments as well as who are not able to effectively manage our sales and [indiscernible] distribution of our -- and kept our customers happy. So we are taking some conscious decisions to be able to identify [indiscernible] nonperforming dealers. And you will see our dealership network strengthening over a period of time. Your third question was on the management of [indiscernible]. Now the -- two key risks, which are going to impact not just the agricultural sector, agrochemical and agricultural sectors are the [indiscernible], which is still [indiscernible] on after approximately 88, 89 days. And this is leading to an increase in a lot of prices primarily for [indiscernible] and formulation prices. We are actively working on trying to see how we can actually adjust our pricing, which is very agile. And if we see the prices dropping, we will be fully in a position to pass on the benefits to the farmers. But otherwise, at this point of time, we see there is [indiscernible] in prices. The second aspect, which is a major risk that we see in this particular year is [indiscernible] effect of the El Nino. So potentially, while a lot of worry is there on the El Nino. Our understanding is that this El Nino will kick in somewhere between September and October of this year. We are hopeful that the primary monsoon or the [indiscernible] monsoon for the current season will hopefully be not -- becoming significant in October where potentially there would be a [ 2 to 3-plus ] increase in the El Nino, and this would impact the [indiscernible] season. So we are appropriately trying to be able to adjust our business to be able to take this into account. I hope I was able to answer all your points.

My second part of the question is for Mr. Jain. Whatever asset allocation and [indiscernible] management frameworks have been applied in '26-'27.

Hello? I think we lost you.

Sorry?

Yes. We'll need you to repeat your question.

Yes. Second question is addressed to Mr. Jain. Just want to understand of our guidance on what type of capital allocation and risk management frameworks have been applied in '26-'27 to balance working capital requirements with funding for R&D in new hydrochemical formulation? Any [indiscernible] against ForEx and raw materials for utilities? And any liquidity [ buffers ] being put in place to curtail the seasonal demand cycle?

Yes. Yes, just to go one by one with respect to our earlier CapEx. So we had guided to say that we will do some sort of CapEx, but that as was previously mentioned in our Board meeting that we are postponing the newer CapEx, which we are supposed to do in our existing plant. So that we are keeping it on hold. The other parties aren't any different to bring these patented products, obviously, our R&D keep on continuing its work. So the general percentage, what we spend on our R&D and the patent will continue, which is for our industry, the percentage doesn't look very high, but we continue to do it between -- around 1% or so. So we have already filed close to 100 plus patents, and we are hopeful to see at least 2 to 3 new patents coming at least for the next 5 years. So for '26-'27, also, we are going to launch 3 new patents, and this will continue for the next 3 to 5 years. So with respect to [indiscernible] volatility, as we mentioned in our peak, the prime reason that the Q4 was not as per our expectation because we thought in our earlier guidance that Q4 will have pretty minimal losses. This was hitting on the higher side because we had stopped our [ sales ] for the branded as well as B2B sales, which we generate within March as a [ replacement ] to previous year. So we wanted to capitalize on the situation within our existing inventories, which we already had rather than selling at lower prices in March, where we don't have the clear picture of the prices. We thought we'll wait and say closer to the season. So post that, from immediately from first week of April, we increased the prices of most of the material, wherever the cost has gone up and later on, for a few of the other products, we all have also increased in May. So we have been through two rounds of price increase. Since we are aware that the prices are pretty volatile, each and every purchase order or each and every raw material what we procure. We have been properly [indiscernible] to see whether the same can be passed on to the market by way of increasing the price. If we are able to do that, then we are preparing as we are not going too aggressive on products where we feel that we might end up buying high-cost inventory and then -- and not doing and not focusing because now we are just [ tired ] of this season for 3, 4 months, we want to complete it or not sales. So for the liquidity, even the government is helping with respect to 20% additional funding. So we might take some portion of it. We already applied to the banks. For this portion of the season, we'll be taking those funding from the banks, which will take care of the coming season.

[indiscernible] does that answer all your questions?

Yes. I'll just connect back. I think we had a -- the connection was going in and out. But what is -- it's all right. I appreciate and thank you and best wishes.

We take the next question from the line of [indiscernible] Capital.

Sir, I just wanted to [ add basic ] questions. Firstly, how much of sales are coming from the own manufacturing out of 100%, how much is owned manufacturing sales?

Yes. So most part of it is coming from our own manufacturing because as we said, the more we are going into patented products, the portfolio of patent product is going. So presently, our patent product portfolio has gone up from 30% to 40% of our [indiscernible] which almost -- entire formulation, everything is done in our own factory. So as of today, almost between 60% to 65% of our sales are being produced in our own factories.

So 60% to 65% is total sales is coming from owned manufacturing, right?

Yes.

But then you say institutional sales is 40% of our revenue. So that is B2B, right?

Yes.

So that is [ trading ]. Okay.

B2B, just to clarify, B2B is not [indiscernible] because we have a technical manufacturing plant and information manufacturing plant. We do import and do value addition before selling to other B2B players. So those are not necessarily pure trading, but pure trading would be less than 10% of our dealers.

Okay. Thanks for clarify. So currently, I just wanted to understand the manufacturing capacity we have. So how much capital would be required to set up that whatever the manufacturing capabilities we have currently at this stage? What is that value? It is [ 200 ]. What is that value?

Yes -- own manufacturing setup mostly in the [indiscernible] we are in a seasonal business, we see our capacity utilization going up to 80%, 90% during the season and off season, we had around 50%, 60%. So just to answer if [indiscernible] manufacturing capacity sufficing that's the question, yes, we are more than able to manufacture some of our own...

My question was if anybody wants to set up this manufacturing capacity, how much capital would be required as of today?

[indiscernible] you're talking about -- there are a little bit more nuances and details. So for the first few years that manufacturing facility is in terms of a formulation, where we are 100% doing our own formulation facility. So the final packing in the formulation is all ours. The second part about [indiscernible] technical. Now the technical part, the active ingredient part of it requires a significantly large technical facility. Our technical facility was built up over a period of time and over the last at least 6 to 7 years, and it has gone through multiple roundup expansion. Now coming up to the point about if I look at the end product, which is sold to the consumer, and we try to figure out what percentage of the -- that end product is actually manufactured or require certain inputs, which come from outset. The inputs that come from outset are in form of either you might call it as a bottle for labor or you might call it as the solvent or you might even call it as the raw materials which are used in the manufacturing purpose. Some of the [indiscernible] are certainly imported from China because India's chemical industry is not yet geared up to be able to supply all raw materials. And that's where, to a certain extent, our imports come in the future. Now to be able to understand that what we have been doing consciously over the period of years is that we have been able to try and bring in the manufacturing capability in-house. And that is where Vikash was mentioning that our patented products will be using newer molecule which we will be manufactured in-house in our technical manufacturing facility so that we have a much better control over both in terms of quality, our ability to be not dependent upon supply chain and insulate [indiscernible] completely impossible to manage situations like the [indiscernible].

Understood. Another question is currently the branded whatever we are doing right what are the margins and working capital cycle there compared to institutional? Can you break up those also? Margins and working capital cycle [indiscernible]?

Yes. So between branded and institutional. For example, if I take with respect to the larger part, which is inventory and receivables, so inventory base for the branded is a little higher. It's anywhere between 120 to 150 days. And for the B2B business, it is 90 to 120. With respect to receivables, again, on the receivables side, it is around 120 days and B2B side, it is 90 days. So we have a gap of almost around 50, 60 days, if I combine both the inventory as well as receivables. On the margin front, there's a huge difference. -- margin trend, if I take branded, the margin, especially -- in place. And on B2B, we are, on average, at around 15% to 20%.

Sorry, [indiscernible], your voice was cut. How much for branded?

For branded, depending upon products, but since our portfolio of patent is going up, we are on an average at around 40% whereas on the B2B, we are at around 15% to 20%.

So this 40%, gross margin you're talking about?

Yes, gross margin.

What is the EBITDA margin from these two business?

EBITDA margins, again, so it depends upon the kind of sales we are doing. For example, this year, our sales were a little lower. But if I have to tell you on the ideal situation, that next year if we are going to perform well. And based on that sales number, the EBITDA margins for the branded should be anywhere from 18% to 20% and on the B2B, it should be around 8% or so.

Okay. Sir, if I understand your business, right, branded you want to do more because the margins are good. But it is literally working capital heavy when compared to institutional sales. Now I see your balance sheet, we have receivables worth of INR 500 crores. And the sales are roughly INR 1,000 crores, I mean, 50% are into your receivables. I mean you are in a deep trouble, sir, I would say, because the banks won't lend you more and to grow and service the working capital, we need more cash. So I think -- and the receivables also, if I deeply check, right, over 6 months, more than INR 200 crores are above 6 months. And the possibility of write-offs are also heavy. I mean you have to structure your balance sheet in order to save your company. That's what I can read about the balance sheet, whatever you have. Any thoughts on those?

So just to clarify on this business wherein if we are going in the B2C segment, especially on the retail -- so within B2C also, there are different channels. You can go up to big wholesalers and wholesalers and distributors or you go into retailers. Now the retailers, the behavior pattern is the outstanding comes at the lowest in the month of June and July. So they have a habit of paying this at the time of the season. And if you see March, obviously, you might look that it is getting elevated but most of the payments come by June because we need to buy again for the next season. So this is not only for us. And even doing a dealer -- lowest-level dealer kind of business, they will face the same thing. The margin will look higher it will look -- in my last 3 years, my overall doubtful debts are just about less than 0.7%. We are not even 1% in my doubtful debts. So that logic to say that [indiscernible] will certainly become doubtful doesn't work because we [indiscernible] collect most of it by the end of June. With respect to -- you asked one more point, right, on the bank side. So banks do understand because they don't just see one single number during March because we are in constant in touch with them, and we are giving them the stock statements every month. So we see the movements throughout the year. So once they submit for June, July, they'll see that my outstanding, specially the old outstanding will be much lower. And the outstanding more than [ 180 months ] have anyway not considered by them for this calculation. So based on that, already, we have enough liquidity in our system to manage this. So this happens at a cycle in our business every year.

Okay. So how much of this you would think that you have to write off, you don't -- how much of the numbers currently are in balance share? How much of the percentage you see as a write-off that might happen according to your base case estimate?

So last -- if I take, we have just about put legal cases on around INR 22 crores worth of business. So that is -- and this is consolidated for 3 years. So if you take these 3 years number and [indiscernible] the overall top line, this is less than 1% of the business. So this cycle will continue that every time after 1 year, we put a legal case. But previous year also I had more than INR 200 crores, which was more than 6 months was rather INR 270 crores, INR 280 crores, which was fully collected this year and just about say, [ INR 70 lakhs ] or INR 1 crores, which actually goes into legal post July that is what we evaluate and we go for legal cases is required.

So you see [indiscernible] over 6 months are here, which will come to work with June, July. And in the [indiscernible] balance sheet, we should see that number going down?

[indiscernible]

Okay. And I mean, you have to make sure that your balance sheet is strong for that, you need more capital. Are we looking for any fundraise or rights issue so that we just get enough capital to survive? Because I think if anybody gives an answer, they are just doubtful that the company is going to survive or there might be a [ Blackstone ] event going forward. So just from the investor perspective, I wanted to understand how management thinks about [indiscernible] capital. Yes.

Yes, in a full fledged production time. So our capital requirement is higher. So even at the present time, if you see our utilization of the bank facilities, it is at around 85%, 90%. That means still 10% facilities we have, which we can avail and we can utilize plus this additional help, which has come from the central government, those also we will take. And as and when we also start collecting advances from this May, June, July from the customers. So you will see that the requirement goes up for the initial 6 months to September. And once the collection starts coming from September, October, the loan balance is also goes down. If you see my last 3 years loan balances, we have been constantly reusing it. So we have been -- and if you see my cash flow for the year FY '25-'26, even though we have made a profit of INR 8 crores after tax, my cash flow from operations is INR 90 crores. So I had a positive cash flow last year as well.

But sir, in the cash flow also, I see you have not paid INR 260-odd crores. That's why we are positive. If you leave out that, I mean, that's not in a healthy state. So cash flow-wise, it is doubtful, but I just wanted to make sure that the management is grounded and make sure that we are very capital funded and maybe if it is required to do [ whether ] price issue or any fundraising also that would be you confidence to investors, I would say, otherwise, looking at the balance sheet growth and investor confidence is very low right now. So yes, that's it from my end.

Yes, yes, Mr. [indiscernible] so let me just conclude this discussion. So let's be fair enough to say that [indiscernible] we have been putting -- definitely putting sets to be able to ensure that our balance sheet becomes better and better and to be able to ensure that we have a path forward for growth. One of the points that you mentioned is, I think that is a relevant point is the fact that when you are doing on the B2C, the payment types are just very long. And the reason is [indiscernible] we start from a raw material and then you make a technical and then you take a formulation and then you take it to the market and then you wait for the part of the data. B2C cycles are quite long. Previously, our B2B segment was a little bit on the higher side, and we were able to get money on a much more shorter cycle than compared to the B2C cycle. And in an essence, it certainly helps us a lot. Now which is the reason why this particular year, you will see -- to do that is that we will be manufacturing certain active ingredients in technical, which will be available for B2B market. So this is one change in our strategy where we are looking at where we are trying to focus more on the manufacturing, which is not just for captive consumption, but for the B2B segment. And I am sure that without putting additional working capital stress, we will be able to improve both our top line as well as our bottom line.

We take the next question from the line of [ Varun Sharma ], an Individual Investor.

Sir, you have repeatedly with the guidance each and every time. Even in last quarter, you mentioned we are trying Q4 to be [indiscernible], but you have even doubled the losses compared to year-on-year. And if you look at other listed companies like [indiscernible] et cetera, they have met the guidance as well as exceeded them. So what would be your guidance like for the next financial year?

So Mr. Varun, again, for next year, we are not giving any specific number on the guidance part. But whatever has happened in the last two years, we're obviously difficult situation wherein not only price crashes earlier in China or seasonal factors. So we are like a startup wherein it's been this 3, 4 years in the branded business where we are bringing newer products and trying to put our foothold in the market. So obviously, we are spending a little higher on the marketing and numbers sometimes might not describe what the efforts we are doing. But yes, what we feel is the difficult phase should be over this year and next year should be obviously a better number. And for the month of this quarter where we have given a guidance that we'll have a little lesser loss because we had already indicated Q4 in a [ similar year ], softer quarters. So it's not that some big business would have come and we would have got higher profitability. We have guided that this is a traditionally a softer quarter, which we might have small profit a little loss, but the loss was higher because it is a [indiscernible] which is not to sell our inventory. So I think the prices were going up, and we wanted to take because earlier we lost because we had higher inventory and the price had crashed. So we wanted to take benefit as well this year to keep our inventory and better to sell at higher price closer to the season rather than to show top line and to put higher numbers in Q4. And if with respect to [ comparing ] with other companies, what you mentioned right to that extent that we have shown better numbers. So really, I see there two reasons. One is, obviously, they are much established players with more than 10, 15, 20 years of presence in the market, and we are just about 4 years in the branded business. The next part is many of them have capacity for exports as well. So if you see Q4 is a seasoned -- what happened -- commentary, most of [indiscernible] will say that, okay, the local market is obviously a little softer and taking seasonal issues. But yes, they would have benefited on the export part. And many of them obviously would also grab a little better in local market because of the presence since long.

Sure, sir. But like I would recommend one thing, like every time you are doing on call like a half a quarter or if you see now all you are doing after 3 months. So [ will better ] some discipline from the management and I have been investors in this company for 3 years, so on a lighter note, do you think I will get an exit?

Surely, next year would be a better year that's all I can say. Yes. So I think it has been a tough couple of years and we agree to that and while we do not make a comment on the market situation and other things, be rest assured that one of the fundamental things that -- in terms of an IP portfolio, in terms of your [ technical ], in terms of the effort which is going on the ground, that is tremendous. Yes, it has been a little tough sign that [indiscernible] are not reflected into our overall balance sheet or overall into the share market sizing and other thing. But I would say that there is a kind of [indiscernible] that we have internally and that [indiscernible] and this company will be something which will be a company to look out for.

We take the next question from the line of Saket Kapoor from [indiscernible] Company.

Sir, I think so your answers have been inaudible to many of us throughout the call in bits and pieces. And have been repeatedly mentioned about by the speakers also, and I just spoke to the operator also mentioning that there has been very inaudible part of your -- in our conversation, which you will see in the recording itself. So many parts of the questions are not -- answers are not very clear to us. Mr. Sai, you were mentioning about, I think, so some B2B business part of the aspect which would be wherein we will be garnering better margins going ahead for this year. So if you could just explain what how will this year be a different year in terms of the...

Saket, I missed your -- on the B2B. You are mentioning that -- Yes, about B2B. What was your question on the B2B?

Sir, my question is that how will this year different in terms of -- you have mentioned that this will be a different year in terms of we will be doing more of B2B work in terms of, I think, so the technical part. And thereby, we will be having a better top line and bottom line. So if you could just explain to us how will that work out?

Sure, Saket. So one other -- so we have been trying to mold our manufacturing facilities and our complete production line to be able to meet the requirements of the brand business to be able to [indiscernible] fundamentally certain strategies whether in terms of reducing our dependence on China, reducing our dependence on raw materials. And one of the strategies that the whole last year that we did which was under R&D and for [indiscernible] extremely great molecule, the great pricing, which started off at somewhere around [ $250 per kg ]. But the price crashed like anything for that particular molecule. So this sort of a strategy of being a feeder channel for the brand business and for the patented portfolio was one way to look at it. This year, we are diversifying a little bit from being only the figure for the [ business ] and being a provider to other companies also in terms of certain important and key technicals. And we hope to be able to get some [ book ] business in this particular front. And so that's a little different in our strategy. I had mentioned also that there were around 4 new off-patent molecules that we had been working on for the goal of last year and R&D was able to succeed in the synthesis matters of these 4 molecules. These 4 molecules will be in production. In fact, in fact, they're already getting produced in this sort of Q1, we hope to accelerate the production of these new molecules into Q2 and going forward into Q3. These new molecules will open up B2B segment and B2B opportunities for us. We will try to capitalize on that and B2B generally has a very fixed payment schedule, and that should help us help the business in all aspects. I hope I was able to answer your question.

[ Yes, sir ] But as my earlier participant friend has also mentioned, and for investors like us, there has been only disappointment all throughout the last two years in understanding and modeling out what can a company like Best Agro delivered in terms of financial results. So even this time also, we were not expecting these numbers. But anyway sir, two points from [indiscernible]. Number one, you mentioned that we hold on to our sales for the last -- some part of March, which has resulted in our sales not happening to the tune of INR 50 crores to INR 70 crores. So that is what is getting deferred to the next quarter? Or that -- how will that work out?

Yes. Saket, I just missed your last 10 seconds because, again, there's network issue going on.

Sir, I was just asking you, sir, [indiscernible] you mentioned that for the month of March, some period, we stopped our sales because of, I think, so higher pricing price revisions, which we were expecting for the month of April onwards. So taking that into factor, that sales have been deferred to the first quarter. So first quarter would see a better top line in that sense? Or how will that sales deferment will translate into ordinary sales?

So yes, with respect to top line as well as bottom line, you'll better numbers because [indiscernible] prices have been increased and the placements which have started our newer prices. So you see a better both in terms of turnover as well as profitability.

Okay. And in terms of our sales [indiscernible], how have that factored in? I think so, [indiscernible], when we spoke earlier third quarter, you said that rather you mentioned to us that we have done the majority of the provision, sales provision. And now we won't be expecting any more of the same for the fourth quarter or some bit of -- in that sense on me. So how have sales driven worked out for the fourth quarter?

Yes. So sales returned as compared to -- because we faced a huge challenge in '24-'25 we didn't wanted to face same issues in '25-'26. So we had [ changed ] our policies a little bit. So that's also one of the reasons you saw that our generic portfolio went down a little bit as compared to our patent portfolio because we were not making [indiscernible] and taking it back. So the sales return as a percentage came down by 10%. So earlier, we were close to 20% to 30% of sales return. Presently, we are at around 20%, 21% of sales return. And we are pretty comfortable at this and continuing, we will try to go down less than 20% for the next year. So sales return we have been able to achieve our objectives. Also other two, which we have planned was the OpEx reduction, they will also be reduced close to 15% of our overlays.

Okay. Sir, on the [indiscernible] if we have even factored that INR 50 crores sale number, our losses would not have trimmed to a larger extent means I want to only understand the quality -- qualitative aspect of this INR 48 crore loss. If I take the depreciation out of it, it is still a INR 38 crore number. So how should one explain -- Yes, please.

Yes. So this INR 50 crores, INR 70 crores would have clearly bought us -- considering both branded as well as our B2B segment, we have brought anyways around INR 20 crores to INR 23 crores of profit. So anyway...

Now I cannot hear you, sir. It is going -- Come again sir.

[indiscernible] would have been less than 15 crores or so, it would have sold at least high INR 50 crores to INR 70 crores of sales.

Ladies and gentlemen, we take that as the last question. I now hand the conference over to Mr. Surendra Sai for his closing comments.

Thank you all for taking part in the FY '26 earnings call. Thank you for the valuable questions and continued support. Let me be very frank. Despite the challenging FY '26, we remain focused on improving profitability and strengthening our operational efficiency. We are scaling up on the differentiated product portfolio. And we remain confident that the strategic and tactical actions that we are undertaking during the year will definitely lead us to a stronger and a more sustainable performance going [indiscernible]. Thank you all for joining us today. Thank you.

Thank you. On behalf of Best Agrolife Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.