PI Industries Limited (523642) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the PI Industries Limited Q3 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is recorded. I will now hand the conference over to Mr. Siddharth Rangnekar from CDR India for opening remarks. Thank you, and over to you, Siddharth.

Good morning, everyone, and thank you for joining us on PI Industries Quarter 3 FY '26 Earnings Conference Call. Today, we are joined by senior members of the management team, including Mr. Mayank Singhal. Executive Vice Chairperson and Managing Director; Mr. Rajnish Sarna, Joint Managing Director; Mr. Sanjay Agarwal, Group Chief Financial Officer; Dr. Atul Gupta, CEO, CSM AgChem, Mr. Jagresh Rana, Global CEO of PI AgSciences; and Dr. Ramesh Subramanian, Global CEO of PI Health Sciences. We shall begin the call with key perspectives from Mr. Singhal, 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 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 website and which has been shared with you earlier. I would now like to request Mr. Singhal to share his perspectives with you. Thank you, and over to you.

Yes. Thank you, and thank you, and again, a little apology for this sore throat, but I shall try and make my best effort. So I shall comment to this brief perspectives on the global AgChem industry environment and touch upon the PI performance and the strategic progress. The global crop protection market is approaching a latter phase a prolonged down cycle, driven by the distribution. Adverse weather conditions in certain regions, sub-commodity prices and elevated interest rates. Channel inventories are gradually normalizing and in-season buying has begun to improve. All the product pricing continues to remain soft, particularly for the generic category. The pharma buying behavour is expected to remain cautious and sensitive to the commodity realization and the liquidity conditions. At the same time, Global Innovators continue to optimize supply chains and recalibrate inventory levels. We have seen early signs of stabilization and revenue equipment expected to come over the quarters. Coming to India. In India, there are showing progress and is ahead of late last year. So [indiscernible] much higher of our storage levels above long-term average. However, the demand for key agrochemicals during the quarter remained muted due to elevated channel inventories, adverse weather conditions, lower crop prices, prices under pressure and volumes have been primarily driven of revenue performance. Looking ahead of the structure remains intact. sustained innovation and advanced crop protection, crop enhancement solutions are sent to the global agriculture productivity, structural economic challenges environmental conditions and considerations and economic realities are shaping the farmers' expectation. Growth are incredibly seeing solutions that are safe for the ecosystem, effective against evolving pest and diseases and capable of delivering high productivity to meet rising demand for food, fiber and bioenergy. Now moving to our business highlights. Q3 '26. I can mention moderate in line with the overall demand softening inventory levels of many key products. based on the already higher base of PIs extraordinary perform over the last couple of years, is a in customer supply scheduling. We are now on track to commercialize 8 to 10 new molecules with 5 molecules already commercialized in the strategic initiative to a technology announcement, portfolio diversification, strengthening the revenue pipeline and adding new clients progressing well. Our domestic business are mainly impacted by lower farm demand of high-bar. Now coming to pharma, we have delivered a 50% year-on-year growth. During the period, we've added new clients to our portfolio to expand the obviously to partner support by dedicated business development, building capabilities, operations in the U.S. to Europe and expand into the East markets. Near term momentum, however, has been market due to global biotech funding, going monitor uncertainties, while in the early stage of development it has in cycle time and a slow conversion of selected opportunities. In biologicals, we are very excited as we progress and scaling towards building a scalable global franchise, our peptide-based any platforms and in differentiated solutions across the corporate geographies, regulatory milestones, which is the approval of 0.5 meter in India and ongoing filing in the U.S. and Latin America on a long-term ambition. We continue to allocate capital towards product innovation, market development and strategic partnerships in the region, including the U.S., Brazil and Europe, Mexico and India to support the long-term scalable growth. we are in bocertainty global corporate sustainability ranking at 98% percentile. And PI featured the S&P Global Sustainability yearbook. This is again a ranking among the top ESG rating companies globally. Despite the near term softening, our underlying fundamentals remain strong. development at scale...[Technical Difficulty]

Ladies and gentlemen, we have lost the line of the management. Please stay connected while I reconnect the management. Thank you. Ladies and gentlemen, we have the management line reconnected. Sir, please proceed.

So despite the near shortness of underlying fundamentals remain strong. development scale up the strategic growth platforms are progressing as per plan. A robust balance sheet and innovative pipeline remains healthy. The company is driving a fully integrated research set up one of its kind out of a tender critical to a growth aspiration of the cotization, teams and developing technology platforms that are giving opportunities across new vertical cases, biologicals, specials in electronic chemicals. Now the first is from India, Biocare Pro is under registration in India, the expenses on demonstration have been launched. We have seen and we are very excited about the performance of the product. On the other hand, I take unique peptide no platform for biologicals, another equally exciting opportunity, which is reflecting globally, and we respond of this expansion has been seen by huge demand by expanding channels and efforts and creating a new play in the industry. The place to commercialize advanced molecules are increased in line with our investments in research and differentiated technologies from flow to biotechnology. Our long-term growth outgrowth remains intact with a focus on margin discipline, high quality of growth and platforms. With this, now I would like to hand the discussion over to our Group CFO, Sanjay, and thank you, everyone, and over to you, Sanjay. Go ahead, please.

Thank you, Mr. Singhal. Good morning, everyone. So guys, I'll summarize the company's financial highlights for the quarter ended December 31, 2025. Our Q3 performance reflects the continued impact of global industry headwinds that we have been discussing with you in our previous calls. However, we believe the study is nearing stabilization now and expect sequential improvement beginning quarter 4. For quarter 3 FY '26, we reported revenue of INR 13,757 million, which comes on the back of a high base obviously period last year. Despite global challenges, we know we have still delivered a growth of over a 3-year CAGR for the 9-month period. The moderation in AgChem export is primarily volume-led, driven by slow demand and customer delivery schedules. Also to note that the 9-month period FY '24 for the AgChem export business, we grew by 22%. Similarly, we grew in FY '25, 9 months period by 9%. So going forward, we remain fully confident of the future of our AgChem export business. We have commercialized 5 new molecules in AgChem exports and 4 in domestic agri branch. The 10% growth in new products in AgChem export demonstrates our derisking strategy and focused approach to gaining new business in this tough environment. Domestic agrochemical demand remains subdued due to high channel inventory, low commodity prices, delay in normalization of biological portfolio post regulatory headwind and specific impact from lower demand in a few target crops for PI. Our domestic business is supported by strong product portfolio and new product launches, which have offset the challenges faced on the ground. We have launched 3 new herbicides, Alcor, Comet, Fixit and 1 insecticide Uranus this year with 2 more expected to be launched by close of FY '26. We expect the domestic growth to be back on track from FY '27 onwards. We've also launched our direct to pharma mobile lab, PI Mitra Kisan, a one-stop farmer engagement solution offering crop advisory product guidance and loyalty benefits. This digital platform strengthens our connection with growers and drive scalable tech-enabled growth. . Moving on to our pharma platform. It has been on a very strong foundation, increased revenue by 50% over 9 months of the previous year. driven by deepening relationship with the biotech and the big pharma innovators. We have onboarded several new customers over the last 12 months, including several strategic accounts and big pharma. Global biologicals continue to progress in line with the long-term road map with ongoing investments in registrations, product development and global market expansion. On other financial matrices, our gross margin expanded to 59% during the quarter, supported by a favorable product mix and cost discipline. Further EBITDA level, we've delivered a margin of 27% for a 9-month period, which remains resilient despite industry headwinds. During the quarter, net profit includes an exceptional income in our pharma business on account for a write-back of contingent consideration of INR 1,260 million which has been partly offset by additional provisioning of retirement benefits as per new labor code to the tune of INR 209 million. Our trade working capital in terms of days of sales has increased to 139 days and reflects current market conditions, we expect to improve this as market salio normalizes in the coming quarters. Our debt-free balance sheet position supported with net cash of INR 35 billion provides strong resilience and flexibility for strategic investments. While the operating environment remains cautious, we expect gradual recovery beginning quarter 4 FY '26, with growth momentum building to FY '27 as industry conditions stabilize and our new product stamp up. With this, I conclude my opening marks. I will now revert to the moderator to open the forum for Q&A. Thank you.

[Operator Instructions] We take the first question from the line of Saurabh Jain from HSBC.

First question is on the guidance. When you say...

Saurabh, I do apologize to interrupt you there, but your audio is not coming in clear. Could you please use your handset.

Okay. So first question is on the guidance. When you say growth resuming in fourth quarter, is it only a sequential growth that you're talking about or you even expect a Y-o-Y growth and what this growth is really? Is it like a volume growth that you're alluding to? Or do you even expect a revenue growth or a value growth in the fourth quarter?

So yes, there will be a volume growth from beginning quarter 4 FY '26. And yes, there will be a sequential growth in quarter 4 over what we have seen in quarter 3. And as we build in into FY '27, we believe with all the efforts we have been put in, we should be on a growth momentum picking up there.

So volume growth in 4Q, is it also a Y-o-Y volume growth?

See, well, sitting now, we would target to have volume growth. But as I said, the momentum will start picking up from FY '27 onwards.

Yes. But just to clarify, we already see a great -- we see good momentum of uptick started in the quarter 4. And clearly, as we get into the year, the momentum is so -- the positive part is a positive moment already seen and witnessed. And I think we should be in a good shape in the quarter.

Understood. And then when you say FY '27, you are expecting the revenue growth returning to the company in that year? And if possible, can you also give more contours to it, whether you expect a gradual recovery in growth? Or do you expect to get the growth to an in a big way?

Yes. So I think we see the positivity of growth. And as I mentioned in my talk earlier that the industry is still having an extended cycle of growth. But given the scenarios and as you must have seen in this year, there have been many headwinds, the geopolitical uncertainties, commodity prices, also given the challenge of India's regulator framework and biologicals. And some of these areas have created certain challenges including the weather conditions. But I think what we see and given that the burdening of the bits and the positive shoots are already there. So we are positive to say, yes, we will start seeing this in '27.

Okay. So just to kind of continue on that point because the kind of robust business that we have, right? We have visibility, a lot more visibility compared to the other kinds of businesses in the sector. So are you noticing already a great enough visibility from your customer side that you are getting optimistic in terms of a recovery in FY '27? Or is it mainly coming from some optimism that you have in mind?

No, no. I think, as you know, some part of the business is more about what we have from the customer set. But at the same time, if there are adverse headwinds like ship depending on the PI partnership that goes strong. And even while we have what we've committed to, with that, but we have to sit and optimize to handle the market situation because you have to partner up to create value. So we see the uptick in demand. But clearly, as I said, there has been a reset in the way the customers are thinking the way they look at a supply chains given the challenges of this prolong challenges that they've been seeing. But clearly, given where we are looking at what they feel the operational aspect of the issues in the industry are getting cleaned up, but the external factors still will have a role to play, and we will know how actions happen, the geopolitical scenarios which could change. But clearly, there's a positivity from all quarters in terms of how we may see going forward.

Understood. That is helpful. The second question is, we noticed that the gross margins continue to improve every quarter for you. And I think we delivered a 59% kind of gross margins. Would you also give out a guidance on what kind of gross margin do you expect on a sustainable basis?

So as you see, as always we guide, I think we continue to manage the good margin on a quarter-to-quarter basis, it will be difficult to put that out as you clearly would understand that there are product mixes are value mixes, which come together. But as we give the guidance between 50% to 50-odd-plus, 50% to 52% or 53%, we continue to keep that, and we continue to move with that. .

So we have been delivering quite good kind of gross margins for last few quarters. What is the gap between what is your expectations on a sustainable basis? And what we're delevering? What is this gap attributed to? I really don't understand that side. .

Gap for what? Gap for gross margin?

I understood your question. See, the thing is, first of all, while we will we aim to deliver more, but it is better to be -- because there will be a product mix gap between quarter-on-quarter. So on a yearly basis is when we can talk more with clarity with you. And at the end of the day, whatever gross margin benefits we get, it helps us in investing the planned investment that we have in our new businesses. And therefore, it is better to track the EBITDA margin. Again, for the 9 months, we are at a healthy 26%, 27%. And we would still hold ourselves for the year what we have started the year with 25% to 26%, and we believe that is where we exit -- target to exit in this financial year. And more these things where we have our budgeting exercise completed for FY '27, we can give you more guidance for the next year thereafter.

[Operator Instructions] We take the next question from the line of Vivek Rajamani from Morgan Stanley.

The first question I had was an extension to the earlier guidance question. That is going to fiscal '27, I know it's a bit early, but would it be possible to give some sense if you're expecting more like mid-single digit or high single digit? Any range, if that's possible? And also whether it will be broad-based across the portfolio? Or you expect certain parts of the portfolio contributing more towards the fiscal '27 recovery? That's the first question.

So let me put it, as we said, there is still the softness I think we're definitely seeing recovery. Now different buckets, different plays. Clearly, it would be too early to give a guidance, which -- what number is tax received. But I think coming in the next quarter, as we always do, over the decades, is where we give a guidance for the next financial year post the end of the year, yes.

Sure, sir. Understood. The second question with respect to the new products that you've been disclosing. I think for the 9 months, you've mentioned that the new products have grown at about 10% which given the first 2 quarters of the year, which saw a very, very strong growth, it seems to suggest that 3Q that growth of the new portfolio seems to have slowed down. I just wanted to get some color with respect to were there any specific reasons around that? And if there was some impact of the U.S. tariffs, and how should we think about that going forward into fiscal '27?

So at a fundamental level, as I highlighted in my speech, that the key challenge is the commodity prices and the demand cycle. -- which is creating challenges and the headwinds of other. Obviously, the U.S. policies have impacted the growers, which in turn has a consumption differentiation. It is not the trade policy per se. . So I think that's clearly one of the key challenges. But going forward, I definitely see that could move into the positive direction. That is one. The second important issue as we see for the new products it takes a little time for development, as you can understand from the ad business, and I'm sure you know that well. It takes literally a decade plus to keep products and the beauty about Ag products continue to grow for life. And that's what the time cycle is. But the positivity is the mix of the new product portfolio, the percentage growth coming from that with drive, if the industry switches, this could accelerate the growth rates of these new products.

We take the next question from the line of Abhijit Akella from Kotak Institutional Equities.

Could you please just update us on the contract assets number on the balance sheet at the end of December, please?

Yes, Abhijit. So this particular quarter, the contract assets are in the range of around INR 1,065 crores and yes.

Okay. Got it. So compared to basically about a little under INR 900 crores last quarter. And in terms of the liquidation time line for this line, I think we've said in the past that we expect it to come down towards the end of this financial year. So any sense you could regarding how we should expect the trajectory to shape up over here?

Yes. So as you know, yes, that is given the guidance, as you know, as we look at the past history, this is a typical cyclical approach and no inventory beyond 3 to 6 months. So clearly, yes, at the end of the year, this will be coming down. And I think over the next couple of quarters we may further go lower. This is a mix of how asset utilization, capacity utilization, customer contracts mechanisms work. .

So by year-end, where should we expect this number to be, sir?

Well, I can only give you guidance to say it will be reduced, and it will get there, but to give a specific number will depend how we shape up in terms of customer shipments, stands, asset mixes, which are going up, so that's really out there. So it's not a specific number that I can come to today. .

All right. And then just on the gross margin guidance. The -- so -- just trying to understand, I mean, in terms of this 50% to 52% trajectory that we expect, is that something we should expect in the relatively near future itself, say, in fiscal '27? Or -- for fiscal '27, what's the line of sight we have. Can we maintain the gross margins around these levels of 58%, 59%?

So as we mentioned, we've given that guidance, we intention is to continue to obviously manage and maintain the gross margin. And clearly, as we will give a better guidance as oppose to the year-end.

We take the next question from the line of Rohit Nagraj from 361 Capital.

Sir, any update on the plant Healthcare when we had acquired this almost 1.5 years back, we were expecting some cross-selling of products from India, our own products to the other geographies where has its presence in U.S., Brazil and Mexico so where are we in that process? And where can we see some tangible benefits from the same ?

So maybe, Jagresh, you can take this, please.

Yes. No, absolutely. And thank you for asking. So on plant health care part of the business, we have made tremendous progress this year. We are expanding our business in Brazil, U.S., Mexico and European countries. -- in Brazil this year, we have gone from last year to distributors to 33 distributors. We have more than 400 farmers who are right now using our product in their own field testing the product. In case of -- similarly in Mexico, we have more than 28 distributors right now who are working with us. . In U.S., we are setting up a distribution network for the entire Midwest and some of the world's largest farmers from Brazil and Mexico, they are basically right now testing our products. They have been working with us. We have also got some new product under registration. We launched 2 new products in Brazil, 2 in Mexico. We've just got our disease control product approval in California that makes the entire U.S. and California is the largest market for this product. we are awaiting an approval for one of our management product in U.S., which is expected sometime this month. And all the trials which we are doing in the farmers field in Brazil, the harvesting is just getting started and what we are seeing is almost more than 80% win rate. So we are basically making good progress. In India, we've got this product -- plant health care product got approved. And we are looking at launching this product in this -- between our next quarter.

That's helpful. Second question on pioxaniliprole. Now that we have filed for the registration in the Indian market, what are the time lines that we are looking at from commercialization in Indian market? And any progress on probably having registrations in the global market?

I think the progress is within this financial year, we should be achieving the registration. So that means the landmark in the Indian history and have got new innovation of pioxaniliprole product in the next coming financial year. On the other hand, yes, there are works of regulatory works, which are going in a couple of geographies. We'll be filing for regulatory registrations in the coming year and hoping as soon as the regulatory approval, we launch the product at the global platform.

We take the next question from the line of Siddharth Gadekar from Equirius Securities.

Sir, just on the pharma and the biologics business. Now if you look at the numbers, we are heavily investing in these businesses, and we are roughly at a INR 75 crore, INR 80 crore quarterly EBITDA loss in these segments . So how should we think about the investments from our medium to longer term? And are we at the peak of the response in these businesses? And going ahead, the investment should move in line with our overall OpEx?

That's a very good question. See, look first, we need to understand why we are doing it. If we understand that these are good costs, the investments that we're doing is going to be a long-term recreation for the organization. that is where we are at. Now initially, we have bought -- I mean, we've got the businesses, we have incubated them. We've got the people now. And we have to make the right investments. And upon all of it gets charged off to the -- so yes, it will take some time like pharma is now getting on to a right pub strong foundation biological again just spoke. So yes, currently, they are having a P&L charge and we'll have to bear it for some few quarters. But thereafter, we think as an organization, this will be future growth engines for us. Yes, that's it.

So they were put in 1 line, look at these as investments for the future and not as losses of presence. .

Sir, secondly, just on the CapEx side, we were working on 2 multipurpose plants, and now we have expanded that to 3 multipurpose plants and we have also spoken about a non-GMP plant in India and the third plant is largely for the pharma business. Is that a fair understanding?

No. As you know, we look at certain other verticals, as I mentioned earlier. So the third plant will be servicing those verticals, which in special and electronic chemicals. So that's really where we are putting our footprint.

So any CapEx on the pharma intermediate plant that we are setting up in India?

Yes, we will be coming up with the plans and announcing that in the next quarter. .

We take the next question from the line of Tejas Pradhan from Citigroup.

I know it's early, but could you provide any guidance on the CapEx plan for FY '27?

So broadly, let me give it in line, it's about INR 500 crores, INR 600 crores. I mean -- and obviously, once you get through the whole process procedures after board approval, made your proper guidance next quarter. .

Okay. You mentioned INR 500 crores to INR 600 crores, right?

I think that's where we are today. .

Okay. Okay. Understood. And on the domestic biologicals registration process, any update where we are, what percentage of portfolio would be already registered?

So if you look at the domestic biological portfolio, as you know, at the beginning of the year, we've had certain turmoil in the industry. So those are getting sorted. I believe, in this quarter, those should be in the past. Clearly, certain other new products, as we already mentioned, that products like a new peptide of our, Harpin is registered. And we are looking and evaluating about 2 to 3 new products in this segment. And I think today, we have a very robust large portfolio in biologicals. We are making those investments to scale them up. .

Okay. Okay. And just lastly, any sort of thought process on the use of cash on balance sheet, if there are any opportunities, domestically or elsewhere? What -- how are you thinking about it?

So if you look at the cash on the balance sheet, there's been a risk, there will be investments. We're also looking, as we mentioned, on the new entities and technology platforms that we are investing Clearly, the company has a resource in the team, which is all on the lookout to look at what could be the synergistic and align to our strategies, which are knowledge led capabilities. So we're building a differentiated play. So that's really where we are focusing, and we'll continue to do so. .

Okay. And just to -- if I can add. I mean would this largely be in AgChem or largely looking at outside of AgChem?

So in a lighter way, let me put it, if you have 3 children, we have to decide which fits the best opportunity, which school fits what scale, right? So when you look at the opportunity, we're looking to grow in every sector that we are playing in. So whichever opportunity comes and fits in well, we're going to put it there. .

We take the next question from the line of Vivek Rajamani from Morgan Stanley.

This is an extension of the previous participant's question. On the biological, sir, you mentioned that the regulatory issues are now behind in Q4 will potentially be a normal quarter?

Now yes, in the Indian market, if you remember, they are now going to approve systems. So that's why I'm saying behind. So maybe next year, we'll see those leases come up, Q4 when we expect industry has taken up until the government has taken initiatives to all that.

Sure, sir. Understood. And would it just be possible to share what Biologicals contribution in fiscal '26 so far?

We ship around 20-odd percent. .

We take the next question from the line of Ranjit Cirumalla IIFL Capital.

My question is on the write-back of the contingent consideration that we have taken off the PI Health Science. How should one view this? Is it -- does the original performance thesis of this particular equation remains intact? Or there is going to be any change in the expectations? .

No, absolutely. There is no change in the strategy. There is no impact of and that's why we renegotiated continuing consideration, which was lying in our books. So the business is on a strong footing. We have now experienced in our global business development team. So we're looking forward for our Pharma business to scale up and build one of the best global CRD of our platform.

We take the next question from the line of Siddharth Gadekar from Equirus Securities.

My question is on the plant health care business. Can you just share some broader thoughts on how should 1 think about the overall opportunity and the trajectory of the segment, specifically on Sanovi and PECO given that we have been looking to ramp up these products, any indicative time lines and could peak sales number that we could look at from these products? .

Yes. No, absolutely. So see you to look at it. Overall, in the industry, biological business globally has been growing in double digits. So globally, the biological business is in the range of around $10 billion today. This has been continuously growing over 10%. And that's the segment, basically, we are participating. We are bringing in some of our key products. The difference what we see is overall biological business globally is a fairly crowded space. But we have some unique product and these technologies no one has. We are the first company in the world who has commercialized, peptide in agriculture, peptides have been used in pharma, et cetera, in the past. But we are the first company who has commercialized in agriculture and we see this differentiation driving significant growth. Products like SAORI, Peco, these are the plant production products. Within biologicals, the fastest-growing segment today is the biocontrol segment because of the challenges which are coming in like society is looking at how can they basically bring in the products which have a lesser impact overall. And that's what is driving the growth. Also farmers are looking at those kind of options which can help their crop to grow better. So we actually see a significant growth opportunities as we expand this portfolio.

Okay. Sir, secondly, we have made a comment in the presentation that we aim is becoming among the top 5 -- can on the pharma side. So any time lines or how should 1 think about the investment in this segment going ahead?

As you know, this is a long gestation based business, capable of building and I can just give you a example, it took about a decade to put PI contract manufacturing, and then you have about the hockey stick effect. So I think we are right now state hockey -- and we expect, yes, the scale will take time if you want to differentiate and have sustainability. So I think we should live in the next couple of years, whether it's put the right basis and the numbers is practical. .

[Operator Instructions] We take the next question from the line of Krishan Parwani from JM Financial.

Just firstly, I wanted to understand the CSM business that has struggled this quarter. So when do you expect the CSM business line of show a Y-o-Y growth, maybe the 6 months down the line or 9 months down the line, when do you expect it?

So let me first calibrate we're not studying number one. It is we land expectation what we see. But clearly, it we have indicated that coming to quarter, we're already seeing the positive rate come and the fourth quarter itself statures. -- we're very confident that we will work out.

Sir, did you mention that the fourth quarter onwards will -- you will have a CSM growth again? Is that what you said?

Yes.

Okay. Okay. Okay. Okay. And with when do we expect this pharma contributions to be fairly positive for the company? Because I think our targets to go EBITDA positive have been pushed out? I know you've been trying a lot, but what's the sense there?

So let me put it -- we -- definitely we put in all the efforts. The idea is EBITDA positivity is something dependent on the market and the opportunity. And clearly, we don't want to lose the focus on what the strategy differentiator will be just because the markets are winding -- but I think we are holding in the building capability. So we're taking progressive called and investing hence you may see EBITDA challenges. But I do believe that now when the foundations are set, it takes a longer gestation to turn this business up. And clearly, I see in the next couple of years, if you start moving once we hit the top of 100 core top lines. .

Understood. And lastly, if I may, it's been quite -- it's been some quarters since we have stopped giving out our order book number. So has the order book declined or what is it versus status of it? Can you just help us with that?

No, no. We have been sharing order book. I think last time also, we did mention that. And as of this quarter, the way we look at it, we are in the range of $1.21 billion of order book.

We take the next question from the line of Naushad Chaudhary from Aditya Birla Mutual Fund.

Just 1 question, sir. If you can touch upon on the Electronics chemical, what exit are we doing here from an end user point of view, -- and how big this platform can be for you in the next 5 years and beyond? .

Yes. So in terms of Electronic Chemicals, I think there is a good traction. New customers have badged and the couple of products have gone into the commercialization and we expect that 4 to 5 molecules should be going for commercialization this year. So there is a good amount of the projects with the new customers getting with Quad, and I see a good amount of regoing forward in the coming years in the electronic chemical space.

Can you touch upon the end user, which specific area space of these molecules are you targeting? .

They're more on the semiconductor and the high-end application of electronics.

Okay. Are these only for domestic market or for export as well?

The only work at it global innovator market.

We take the next question from the line of Amit Kada from Canara Robeco. .

So my first question is, have you seen some kind of a price realization impacting from 1 product, I just wanted to understand how the pricing or the realization is also behaving when you are anticipating revival in the crop.

While everybody is price realization has overall in the industry shrunk as you can see, and clearly because also the costs of raw materials come down. The company's strategic focus is to continue to manage its gross margins. And while we continue to look at optimizing to be competitive on the price front to capture value and volume both at the balance level. So that's been the approach. And that's a bulk of the cyclical industry like ag.

So is it fair to assume that some kind of impact is also seen in our portfolio in terms of compression in the price realization .

[indiscernible] is always have a challenge very clearly. And that's a cycle by cycle different or different places at the point of the management focus for the company to see how we tend to manage the gross margins. So portfolio is one strategy. Technology is the arbiter strategy. The third is the market to create value and to get the states, and that's what creates gross margins.

And just to expand this particular thing, like when we -- when there is a price compression, the thing what we can we often discuss with the client is very some pass-through or some...

[indiscernible]

Am I audible .

Yes.

My extension to the question was like, what's the report in this particular thing? Is that only report is that we try to do some backward integration. And that's how I try to be better in that particular product when there is a price compression happening for that particular portion or is there any...

Your background noise is too much. Secondly, I didn't get your question. So I don't know how we get that.

Maybe I'll just come back. I'll just fix something, and I'll come back with my second question, sir. .

We take the next question from the line of Aditya Jhawar from Investec.

Sir, my first question is -- I hope you guys can hear me?

Yes, we can hear you as Aditya.

Sir, if you can give me some sense that how has been our penetration in some of the new clients. So clearly, over the last 4, 5 years, we would have had multiple clients in different geographies. So is there a line of sight where we can see that in the next couple of years, we should be a meaningful ramp up in some of the new relationships we have started.

So which business area are we talking this about?

CSM. This is I think the elephant in the room...

So in the ag business, we cover all the players already. So they're expanding new businesses. But if you're talking about the electronic and the new verticals, that's where we are basically focusing companies, we've got 5 new customers in the areas of electronic chemicals from in Japan, and in certain customers for high-end specialty technology develop products.

Yes. Yes. So continuing with this, Mayank, in the ag chem business, as we had a strong relationship with Japanese and innovators, -- is there a line of sight where we can say that we are having meaningful contribution coming from say European, American innovators in the next couple of years based on our existing business discussions with them.

So I'm not sure because we are working with the European customers with 3 big boys for the at least the last 20 years. And we know also the pioneering partners. So those have continued to have dialogue, new pipelines come in, new valuation happen and we're developing them. and also the American companies, which you would know of. .

Sure, sure. Fair enough, fair enough. So my second question, Sanjay, if you can throw some light, there has been a increase in the working capital quite sharply, almost from 68 days to 39 days Y-o-Y. So could you please explain and how we should expect the intensity of working capital coming down? .

So Aditya, this is a reflection of the global scenario. We had 1 of the lowest working capital days across the industry. Now we have to accommodate the needs of our partners. And in those lines is where our net working capital days have gone up much -- still much better than the industry benchmark norms. But having said that, we would not -- we would definitely want these -- I will not able to give you an exact number that they can right now, but we expect to improve this as the market scenarios normalize in the coming quarters.

We take the next question from the line of Archit Joshi from Nova Institutional Equities. .

I have only 1 question. I would like to understand your thoughts on the evolving landscape amongst global agri major, we have seen some bit of corporate actions happening in some of the large MMC agro innovators. Given this scenario, how do you see the development on new technologies and patented products coming up, especially in regards to their R&D spend. And what would be our stance and capability to have a person or advantage within these patented technologies going ahead? -- so that we can garner a good amount of product road seabilities going ahead. So if you would have a 3- to 5-year view on this developing and evolving scenario I would like to hear it more from us. .

I think that's a very good question, and let me put this approach very well. every challenge as an opportunity. And I think PI is the only company which is geared with this philosophy of partnership and technology. as an innovator, which creates an open just not in manufacturing, but also in building new entities together. That's the value proposition. If you look at the , we started as partners with licensing, domestic business and scaling that up. as partnership for innovation, the BI way. The next was partnership innovation manufacturing. Now we will the company will lead the path in that cap sector for partnering for innovation for new product open not only product development, but we opened a few more engines. We've taken the engines of biologicals, where we're creating innovative platform in partnerships. So the partnership platform and innovation are on the drivers, of which the opportunity in the challenging environments make us a differentiator to partner even deeper in the relationship from markets to research.

Thank you. Ladies and gentlemen, that was the last question, and we conclude the question-and-answer session. I now hand the conference over to the management for their closing comments.

So thank you, everybody, for joining us on this call. And also I would like to highlight to [indiscernible] upon at an exciting time and day for all of us. So thank you for being here. .

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