Sharda Cropchem Limited (SHARDACROP) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Sharda Cropchem Q1 FY '22 Post Results Conference Call hosted by Antique Stockbroking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stockbroking Limited. Thank you, and over to you, sir.

Thank you, Malika. On behalf of Antique Stockbroking, I would like to welcome all the participants on the call of Sharda Cropchem. From the management, we have Mr. R.V. Bubna, Chairman and Managing Director; Mr. Ashok Vashisht, CFO; and Mr. Dinesh Nahar, GM Finance on the call. Without further ado, I would like to hand over the call to Mr. Bubna for opening remarks. Thank you. And over to you, Bubna ji.

Thank you, Mr. Manish. Good day, ladies and gentlemen. A very warm welcome to everyone present here for the earnings call of Sharda Cropchem Limited for Q1 FY '22. Sharda Cropchem is represented by myself, Ramprakash Bubna, Chairman and Managing Director; our Chief Financial Officer, Mr. Ashok Vashisht; and Mr. Dinesh Nahar, General Manager, Finance. Taking briefly -- talking briefly about our Q1 FY '22 results. Revenues grew by 60% year-on-year from INR 389 crores in Q1 FY '21 to INR 623 crores in Q1 FY '22, led by strong volume growth across the geographies. Europe grew by 47% year-on-year, NAFTA grew 75%, and LATAM grew about 107%. Rest of the world grew by about 20%. During Q1 FY '22, our agrochemicals and non-agrochemical mix stood at 86:14. The agrochemical business grew by 74% year-on-year. Europe grew by 60% year-on-year, NAFTA grew by 99%, LATAM grew by 110%. Rest of the world grew by 7.5%. The formulation to AI mix stood at 89 as to 11 in Q1 FY '22. The non-agrochemical business grew by 8% during quarter 1 FY '22. NAFTA grew by 13.5%. LATAM grew by 69%. Rest of the world grew by 38% year-on-year. On the other hand, Europe degrew by 19% during this quarter. The company continues to strengthen its product portfolio by prudently investing in new product registrations. Sharda Cropchem's total product registrations stood at 2,570 in Q1 FY '22. Additionally, 1,026 applications for the product registrations globally are at different stages of approval. The CapEx stood at INR 64 crores in Q1 FY '22 vis-à-vis INR 71 crores in Q1 FY '21. With this brief overview, I would like -- I would now like to hand over the call to our CFO, Mr. Ashok Vashisht, for discussing our financial performances. Thank you very much. Now to Mr. Ashok.

Thank you, sir. Ladies and gentlemen, a very good evening to all of you. I will give you a brief about the company's financial performance for June quarter. During the June quarter, our revenue grew by 60.1% on a quarter-on-quarter basis. And this was mainly driven by strong volume growth across geographies, so -- at 42% and price impact was favorable to the tune of 8.2% and coupled with exchange gain of nearly 3.7% during June quarter. In terms of gross profit, we grew by 57% on a quarter-on-quarter basis from INR 116 crores in quarter 1 last year, we grew to INR 183 crores in quarter 1 FY '22. Gross margin, in terms of gross margin percentage, we were at 29.3% for quarter 1 FY '22, which is the slight dilution in the margin is mainly because of the product mix impact. In terms of geographical mix, Europe region was the highest contributor followed by NAFTA and Latin America. In terms of EBITDA, there was exponential growth by 119% wherein INR 49 crores in quarter 1 last year, we grew to INR 107 crores in quarter 1 this year. So even in terms of EBITDA percentage, we expanded the margin by 463 bps to 17.1% in quarter 1 FY '22. In terms of profit after tax, we grew by 36.4% on a quarter-on-quarter basis from INR 28 crores last year same quarter to INR 38 crores in quarter 1 FY '22. In terms of cash profits, we were at INR 92 crores for quarter 1 FY '22 in comparison to INR 63 crores of quarter 1 last year. So we -- with this strong performance, we further strengthened our cash position. The net cash position as on 30th June 2021 is INR 361 crores. In terms of working capital, the -- in terms of days, we were at 88 days in quarter 1 this year against 89 days quarter 1 of last year. So with this brief, so we open the floor now for questions. And again, I would like to thank each one of you for your time and participation. Thank you.

[Operator Instructions] The first question is from the line of Bharat Gupta from Edelweiss Securities.

Congratulations for a good set of results. My question pertains to the -- like can you bifurcate the growth in terms of pricing and the realization -- pricing and the volume gains, which we have done over the quarter?

Yes, just one minute. The growth based on volume was 48.2%. And what was the other? Foreign exchange, it was 3.7%; price variation, 8.2%; sales variation, 60.1%.

So basically, what Mr. Bubna is trying to say is volume -- in terms of volume growth, the impact is 48%, price impact 8% and ForEx 4%.

And sir, can you just throw some light, like we have done a reasonable amount of volumetric growth. So what can be the key growth drivers? Like Europe, we have done nearly 60% odd growth. So ultimately, can you throw some light like what has been the key growth drivers for us during the quarter?

I would say, better penetration into the markets, which we're already presenting, more acceptability with the customers.

And sir, can we like -- like in terms of our volumetric growth, so can it be due to the incremental registrations, which we have done over the quarter? And the remunerative crop prices globally?

You see you cannot link directly with the number of registrations because there's a big time lag between the time we get the registration and the time when we start reaping the benefits of it. As we have stated, we have added -- our total registrations are 2,570. And in March, the figure was -- one minute, it was 2,543. So we've added 27 registrations during this quarter. But I would say that the addition of these 27 registrations in this quarter would not have a direct impact in the growth of business. This growth has come up from the registrations which were received maybe 1 -- 12 months back or 9 months back or 15 months back.

Right, sir. And sir, we are seeing an 8% kind of a pricing increase, which has been baking. So like earlier when we used to like organize con calls, so you highlighted a couple of points that there have been cases like in terms of MNCs not hiking out the prices. So how are we seeing that trend? Like have we started increasing the prices for the molecules, which we are also dealing with?

See, whenever there are sometimes a shortage and MNCs are not able to meet the requirements of a particular market, particular zone, we do have a spurt in the demand. And then we take advantage of situation and also hike our prices marginally so that -- and the customers are always in need of the product.

Right, sir. And sir, my last question pertains to the gross margin side. So we have seen that the gross margins remained under pressure during this quarter. So is it primarily because we haven't taken the requisite price hikes or we have fully -- we haven't fully passed on the price hike to the end customers? And there is still room for further improvement? Or like is it a new norm where the gross margins are likely to continue below 30% range?

No, there is a possibility of gross margins touching 30% or even crossing 30%.

So that is likely to witness in the subsequent quarters, right?

Yes.

So earlier guidance, which used to be 31% to 33% range, so that is sustainable going ahead?

It is sustainable.

Right, sir. And sir, can you -- just for a bookkeeping question. So can you give a gross margin breakup across different geographies?

Yes. See, gross margins in Europe were in the range of 39%; NAFTA, it was 23%; LATAM, 17%; and rest of the world, 28%. Overall, 29.3%.

In North America, it is how much, sir?

22.8% to be precise.

Okay. And sir, can you also throw some light on the volumetric growth, which we have done over -- in the region?

Yes, please. Volumetric growth was 31% in Europe, 73% in NAFTA, 103% in LATAM, and it degrew by 13% in rest of the world.

The next question is from the line of Tarang from Old Bridge Capital.

Two questions from my side. One, sir, I mean, looking at your P&L, it seems like logistic cost inflation is -- it's not impacted you materially. While on the ground, we hear different things. So just wanted your thoughts on that. And second, if you could give us some sense on the 1,026 odd applications, what proportion of them would be pending in Europe? And would you have some visibility in terms of how many registrations -- how many of these applications should get registered say, over the span of next 2, 3 years?

Your name is Mr. Dharam?

Tarang, Tarang, Tarang Agrawal.

Tarang?

Yes, sir.

Mr. Tarang, if you have been exposed to our business model, we have said repeatedly year after year that the process of registrations is very unpredictable. It is highly time consuming, and it has to go through various levels of bureaucratic processes. So predictability as to how many registrations are we going to get in the next quarter or next 3 quarters is very difficult to say.

Sir, I meant 3 years.

Yes. All I can say is that the number of registrations in the pipeline in different geographies. Would you be interested in that?

Yes, sir.

So the figure is about 648 registrations in Europe, which are in pipeline; 137 registrations in NAFTA or North American countries; 154 in Latin American countries; and 87 in rest of the world.

Okay. Sir, and on logistics?

Yes, logistics. You see logistics have increased considerably. In our case, the logistics have increased by about 38% from Q1 '21 to Q2 -- Q1 '22. But since the freight cost forms a very small percentage of our total cost, the impact is not so much felt in the total -- totality. On the other hand, in case of non-agrochemical business, the logistics form a very significant part of the cost. So there, we have been able to pass on more than 50% of the price increase on our consumers. Nowadays, when we go to the consumers, we tell them this is our FOB price. And this we said maybe $4,000 per container is the freight, sea freight from port of shipment to port of discharge. But sometimes this $4,000 goes up to $16,000. When we tell them we can save 50%, so out of this $12,000 increase, $6,000 will be borne by us and $6,000 will be borne by you. And customers are fully aware of the situation. And without much of a grudge, they are willing to pay the 50%, sometimes we also ask more than 50%. And since it is a universal phenomena nowadays, everywhere is the same situation. So we don't have much of a difficulty in passing on the logistics costs to our consumers.

[Operator Instructions] The next question is from the line of Somaiah from Spark Capital.

Sir, my first question is with respect to the top line growth. Can you just share some color in terms of the broad macro trends that you are seeing in Europe and NAFTA? And the broad macro environment there, both in Europe and NAFTA?

See, there has been an increase in the demand and growth. As you are all aware, agriculture assumes the highest priority among all the countries and all the governments in the countries. So there is no drop or no stillness in the demand. The demand is growing. The world population is growing, and food products are in demand. So there is a good increase in the demand. This demand has not been impacted adversely because of corona.

Sir, with respect to our previous comment on having a better penetration in the last quarter being one of the drivers, what has actually led to us in terms of relatively higher penetration last quarter? What has aided in better penetration last quarter?

Sir, wider product mix and longer presence in the market, good quality and good service.

Got it, sir. Sir, in terms of raw material cost price trajectory, so how are you seeing things from Chinese raw material cost angle? So how has it been last quarter? How are you seeing things currently?

I have been proved wrong in the last 2 quarters. I was thinking that Chinese prices are subduing and they did that for some time. Now they have started again increasing. And the trend is mixed. For some products, the availability is comfortable. For some products, the current price is maybe 40% or 50% of our price about a year back. In other products, the prices came down to 30%, 40%, and now they have gone up to 60%. So it's a dynamic and continuously changing situation. It varies from product to product. Overall, there is a small increase, but it is affordable and it is manageable.

Got it. And now that we have a very strong 60% growth in this quarter. So what would be our thought of in terms of outlook for this year, both in terms of top line and margin front? What is the route?

I would say around 15%, plus or minus 3%, 4%.

Okay. And sir, what would be the reason -- one last question, sir. What will be the reason for the tax rate higher this year? And I mean, we expect this to kind of normalize, get back to normal in subsequent quarters?

I will ask Mr. Ashok to comment on that. One minute.

Certainly. Can you repeat your name, please? It is Somaiah, right?

Yes, sir. Somaiah.

Yes. So actually, last year, we got MAT credits, some benefits in MAT credit. And this year, in India business, in Sharda Cropchem Limited, we have got dividend income where there is a tax implication. And when you consolidate the accounts, it gets eliminated. So actually, your tax rate would be in the range of 30% to 32%. So it is actually this quarter looking higher. But when we close the year, so it will be in the same range, around 30% to 32%.

Got it, sir. Sir, you had mentioned about the volume growth for this year. And so you have given Europe, NAFTA volume growth on a Y-o-Y basis. If you can give the volume number as well, it should be helpful, sir, the number that we used to generally give on a quarterly basis?

Sure. You want the numbers for the quarter ended June 2022?

Yes.

In Europe, the quantity is 36,95,700. In NAFTA, it is 26,66,000. In Latin America, it is 16 lakhs. Rest of the World, it is 4,35,000. Total, around 84 lakhs.

The next question is from the line of Dhruv from HDFC Mutual Funds.

Sir, a question again on the top line. Solid 60% growth, although I mean, we see the last year was a bit weak. Last year base was a bit weak. So even on a 2-year basis, it is about 50% growth, which is very strong. And if I look at some of the global majors, they are talking about strong demand, but not as strong as what we are doing. And also, if I see the trend for the last 2, 3 quarters, we have been doing 30% kind of growth. So sir, what is changing? Is there something which has changed? If you can help us understand what is driving this growth? And what can continue to drive healthy growth for us? So 15% looks conservative based on what you have been delivering for the last 3, 4 quarters for the full year that you have given.

Sir, I have answered this question in part in -- to one of the previous participants. I would say it is greater penetration in the market and more acceptancy -- acceptability among the customers. When you enter a market as a generic company, for the first 2 years, many people don't know you, and they keep their fingers crossed whether we will be able to perform and deliver. Slowly, they are gaining confidence in our capability to perform and deliver the goods and deliver it on time to their requirement. So -- and our prices are always better than the multinationals. So they say why not? I think these are some of the factors which have helped us.

Got it. Got it. So sir, basically, that would -- because you are growing -- of course, our size is relatively smaller to the others, but I mean to these global majors, but I would understand you are gaining market share from some of these guys. I mean the generic players are gaining market share from these guys. Is this the trend which is happening? The innovators are not cutting prices and that allows you to penetrate or push your product even better more? And I believe this trend has started now. It seems as if it only started recently -- I mean the acceleration in trend. So why do you think that the growth will only be 15%? Why not higher than that?

So yes, we are playing on a very tough terrain. Multinationals are still controlling about 75% of the market or even more. And we are a very small fry. So we are not big enough to force them to cut down on the prices. Our presence is not impacting them so much. For us, of course, in terms of relatively or percentage-wise, we are growing, but we are very small fry compared to them. And of course, they don't like us, but then this is the rule of the nature. So they're tolerating us.

Yes. But sir, since -- I mean, given the growth that you are doing...

Our 30% growth may impact them by 1% or 0.5%.

Yes. True, sir, it's relatively small for them, but I'm just wondering, on a very incremental basis, you're taking a decent market, it seems. So -- and this seems a developing trend. So I'm just trying to understand why this cannot continue for a very long time? Given that advantage that you have, the cost advantage that you have, probably the innovators are not cutting prices, this trend should ideally keep continuing. They will -- I mean more and more of this shift will happen because this is your speed right now. I mean, as it gains scale, others will also look at you for sourcing, isn't it?

See, these are the factors which are giving us the confidence to survive and sustain and, of course, grow. But the path is very difficult. The challenges are very much there. And every day, we come across some challenges. And things are not so easy, sir, as it appears on paper. In reality, there are a lot of challenges.

That's true. Sure. And sir, just to better -- also better understand on this growth. Is there any select set of products which are driving this? Or is it also probably because the last few quarters have also been coincided with a lot of these shipping issues and all these things, sourcing issues? And because we have been able to better manage probably our sourcing, that is why we are also getting larger volumes, probably others are not able to do that. Is that also a factor which is helping us or that's -- I mean that's not a big thing that you see?

No, no. I think these are the factors which are helping us. These are the factors really helping us.

Okay. So probably...

And our ability to take quick on-the-spot decisions. If the shipping company says the prices are increased by 20%, we don't try to bargain. We accept it because we know after 2 days, it may become 30%. And this is what we are facing and experiencing every day. Our customers in the non-agro business keep on complaining that 1 week back you said this is the freight, now you say this much. And we are very polite and tell them, please check up from any other sources that you have. Here, we are not making any extra money and check up from -- and they do check out. Everybody is very intelligent and smart. And our ability to adapt to the situation is helping us.

Got it. Got it. So -- okay. Sir, what I was trying to also understand then is say, for example, the shipping issues get resolved in, say, a year or 2, say, probably a year given what the market forecast is generally. So would this growth normalize because then the other players will also start entering the market and try to take your share. Is that the thing?

See if those things improve, we'll be very happy. But I don't think it's going to cost us in terms of volume and growth. We will also take advantage of that situation, and as everybody else.

[Operator Instructions] The next question from the line of Rohan Gupta from Edelweiss.

Rohan Ji, I always get confused, so there are 2 Guptas in Edelweiss. One is Mr. Bharat Gupta and one is yourself. Am I right?

Yes, sir. Bharat is my colleague and sir...

Good. Good. Good. Good to know and clarify. [Foreign Language]

Sir, first of all, congratulations on such a strong set of numbers, driven by volume growth almost 50% in the current quarter. But sir, you also just mentioned that the times are very challenging. And you mentioned that for full year, you are looking close to 15% growth. I understand that it's coming from the conservative approach, sir, which you have. But sir, given such a solid growth in the first quarter itself -- I'm just slightly elaborating from the previous participant question. Sir, we have already achieved such a solid growth. It means that even for the rest of the year, we do only the 5% to 6% growth, we will achieve 15% growth for the full year. You mentioned that the times are challenging and we don't know how the competition will act in the market. Sir, can you elaborate a little bit more what are the challenges you are seeing while you also mentioned that the global agri in the current scenario has benefited, pandemic actually has helped the global agrichemical industries evolve. So all these things and the volume-led growth which we have seen in the current few quarters, it is mainly driven by -- you mentioned that you have increased further penetration in the main market. So sir, what are the concerns and what are the challenges which you are seeing in the market which can deter you in the rest part of the year from growing at the same pace?

Rohan ji, the biggest fear today is a sense of uncertainty. This corona pandemic was totally unthought of about 15, 16 months back. And when our Prime Minister declared the lockdown for the first time for about 3 weeks, if I recollect, we were thinking after 3 weeks, things will come down to normalcy. So then it got extended by another 2 weeks. Now the whole thing is getting extended for about 16 months. So there are a lot of uncertainties which nobody can be confident of what is going to happen next. Now people are talking about Delta and Gamma and all kinds of various viruses. So we cannot -- no, we do not know. It is going to impact the whole world, whole universe. And we will be a part of it. So that overconfidence we do not want to have and we should not have. Now shipping or freight costs, nobody could imagine that a container which we used to pay $1,500, we'll have to pay $15,000 and still shipping companies are surviving and the businesses are surviving. There are a lot of such things. They can be any climate change. Now we have some glaciers melting, many things. Sea water level rising. These are the acts of nature, such a heavy rain in the city of Bombay and this part of India was not imaginable. Some of these factors are affecting some people very badly. And if some section of people get affected badly, the indirect impact will come on everybody. I cannot name any specific factors, Rohan Ji, but the things are uncertain.

Sir, I fairly understand that we are living in a dynamic world, more so after the pandemic but many risks related to agri, sir, have always remained there in agri input industry because that is the nature of the industry, especially monsoon, unpredictable nature of rainfall and the climatic condition. So that definitely, we have always been like. But yes, I understand from last 1 year, we are living with the pandemic environment that is quite uncertain for everybody. Sir, I mean, apart from that, if things remain like this, do you see that this kind of growth in the current quarter which we have seen, mainly driven by that -- I believe mainly driven by our further penetration in other markets and the people's probable increasing acceptance of generic products, that was business we had primarily. So I'm not getting into, once again, the uncertainty of the nature of the pandemic. I'm just saying if the current scenario continues and the kind of work which you have done, your company had done in the last 1.5 years which has helped you gain more penetration in the main market, can we have this kind of 30%, 40% kind of volume growth for this year?

I would say in totality, I would place it around 15% to 20% or 12% to 18%. We may grow.

Volume growth, okay.

But today, I'll be very afraid to go into a very big figure because I have to face you after 6 months again. I have to be very practical. I have to be very practical.

So 15% to 18% of the growth you're talking about, it's mainly volume-led growth, correct, sir?

And volume plus also in the profitability also. EBITDA and all those related ratios.

Because sir, we are in a -- we are living in a pricing increasing scenario. You said that the prices across the products are constantly rising. So the current quarter, 8% was mainly price led growth. So I just was looking more of the volume growth, can we have a 15% to 20% volume-led business for this year?

[Foreign Language] I thought you're making a statement. What is the question, Rohan Ji?

Sir, you are saying that given the conservative scenario, you want to give a 15% growth. That you're talking about mainly volume, sir? Or is it total revenue growth, which includes both price increase as well as volume?

It is total revenue, sir.

Okay. While sir, prices are continuously rising, right? So commodity prices or input prices are constantly rising. You just mentioned that though definitely sometimes that China was showing some cooling off in the prices, but it has once again started hardening. So sir, it means that we will continue to be in the price rising scenario. Correct, sir?

Both ways. Both ways. See, some kinds of prices are -- sometimes we get quotations from our regular suppliers, which is surprisingly at a low price and some other time, the same supplier for some other products the prices are higher. So it's totally a question of supply and demand. For a person like us -- I mean, a company like Sharda, it is very difficult to make a precise prediction. We will say that this is our hunch feeling, and this is our intuition that we should be able to withstand and all that. And thirdly, I'm very confident of our team. Our team is very committed and dedicated. Every crisis, they find some way out and solution and come out as a winner. We have not faced any failure situation anywhere. I think I've spoken enough.

Right, sir. Sir, just another question is on our LATAM market. We have seen a very solid growth. You mentioned almost 100% growth in LATAM market...

Sir, would request you to rejoin the queue for follow-up questions. The next question is from the line of Dhruv from HDFC Mutual Fund.

Sir, one question, just one clarification again. Sir, do you see a trend of prebuying, which is also aiding growth, there is a lot of supply issues and all those things, so people are trying to stack up to just avoid any future uncertainty. Is that also a trend that you see and which is also aiding growth?

Mr. Rohan, I mean, Mr. Dhruv, you are a very intelligent person. You know many things. This is also the case. A lot of people are doing some prebuying and they want to be more sure and certain because agriculture is one activity where the time doesn't -- I mean the nature doesn't give you time. If there is rain, it comes all of a sudden, you have to be prepared for it and any kind of eventuality. So there is a trend. Those who can afford and who are more certain and confident, they are trending to do some prebuying.

Okay. Okay. But sir, I'm not sure, but is there -- from an overall inventory level, have they -- in the system, I'm saying about the system, not our inventory level. Have they increased significantly? Or the inventory levels are normal, so prebuying is largely getting even absorbed at the final consumer level also?

They are getting consumed at the final consumer level. People are preparing, say, for example, if the spring is in the month of October or -- sorry, April or May, people used to start stacking the goods sometimes in the month of February, March. Now the same people are thinking or planning to have the goods in their warehouses in December. They don't want to take chances. I don't know what makes them so uncertain. So a lot of people are trying to buy and have the goods in their warehouses, even in the month of December. It does not mean that they are increasing the quantities in a very big way, but they are making themselves secure.

Yes. Got it. And sir, one thing is just to understand how the business works, for example, you sell to then the distributor and distributor finally sells to the final consumer. So for example, the distributor was earlier associated with an innovator that he was buying the innovative product and selling the branded products. Now you come in and probably because he is buying from you because you have that product available, he comes to you, he buys from you, he probably has an advantage now. So have you in your past experience seen that the distributor goes back to the innovator after getting the benefit from you, he realizes how much benefit that you provide. Does he still go back to the innovator and start procuring for him when the situation normalizes? Or you get a sticky customer that way?

This is not a general trend. Once the customer is accustomed to buying from us, he is intelligent enough not to spend unnecessarily extra higher prices and buy from the innovators.

Yes. Yes. Sir, that is what I was thinking because anyways you mark-to-market your pricing to the innovators, you don't keep a differential.

Unless we run into a situation when we -- our supplies have dried up, and to replace the supplies if we need 4 to 6 weeks or 8 weeks, then, of course, he'll go to the multinationals. But as long as our goods are available, he will not go to them and pay higher prices.

Got it. So once you get a customer, it is largely -- on a very broader sense, one should assume it is largely sticky. He will continue to give you volumes.

And there are many customers who want to play safe. If they have a requirement of, say, 100 gallons, he will buy 80 gallons from the multinational and 20-odd gallons from me. After 2 years, he will reduce the multinational share to 75 gallons and buy 25 gallons from me. So in this way, they are also securing themselves, but they are not let down by our in capacities in any way.

Got it, sir. Perfect, sir. [Foreign Language] On the FX item. So why do we have this FX fluctuation? What does it -- I mean, I understand we have global trading. So -- but what this FX item relates to? [Foreign Language]

FX items, this foreign exchange?

[Foreign Language], foreign exchange.

Sir, this is mainly the cross currency exchange rates. Like euro-dollar or Canadian dollar to the U.S. dollar, all the different currencies and U.S. dollar.

The next question is from the line of Rohit Nagraj from Emkay Global Financial.

Sir, my question pertains to a broader strategy level. As I understand about 20, 22 products, which are going off patent during this decade. So how -- I mean do we have any positive, negative impact from the same? And if there is any, how are we going to take maybe advantage? Or how will we be scaling through the situation?

Sorry to interpret, Mr. Nagraj. There is a disturbance coming from your line, sir. [Operator Instructions].

Hello, Mr. Rohit.

Yes. Can you hear me now, sir?

Yes, we can hear you, but our respective lady was not able to hear you. So can you repeat your question for her benefit?

Yes. Sir, basically, we are expecting about 20 products going off patent during this decade. So will it have a positive or negative impact on our business? And how are we assessing this situation?

Mr. Rohit, this will be having a positive impact on our business. And the biggest advantage we have today in this business is that we are not manufacturers. These kind of changes affect the manufacturers when the product gets banned and they're sitting with a big capacity to produce it and that becomes idle, and that leaves a vacuum there. Because we have a very wide range of portfolio, if glyphosate goes off the market, we are not impacted. There's a big glut of glyphosate in the market. We have less interest. We stop buying them. But the person who is manufacturing, he can't help it. He has to dump the product because he can't keep you sitting on the stocks. So we are very nimble footed and very flexible, and this business model of flexibility helps us in these kind of situations.

The last question is from the line of Himanshu Binani from Antique Stockbroking.

So sir, ideal last few questions. So firstly, on the intangible write-off side. I just wanted to understand what would be the quantum basically. How should one actually look for the FY '22 numbers for the intangible write-offs for this year?

You are Mr. Binani?

Yes, sir.

Mr. Binani, this is a factor, which is, again, not very predictable with certainty. This kind of write-off is driven by many factors and a combined effect of all those factors. But I would say that we will not have any significant write-offs. We do not foresee any significant write-off in this year.

And sir, any sense on the margin profile for the current year, for the next 3 quarters basically? So given the inflationary RM situation. So how does one look into the margins profile overall?

Margins?

Yes, sir.

We are very positive. We are hopeful of improving our margins as the time passes.

Okay. And sir, one last book keeping question from my end. So can you please help us with the registration break up geography wise?

I think we have given that. But this information is available with me. Registration geography wise is: 1,347 registrations in Europe, 237 registrations in NAFTA countries or North American, 748 registrations in LATAM and 238 in rest of the world. Total 2,570.

Thank you. I would now like to hand the conference over to Mr. Manish Mahawar for closing comments.

Thanks, Malika. On behalf of Antique Stockbroking, I would like to thank the team of Sharda Cropchem for providing us an opportunity to host the call. Bubna, would you like to make a closing comment, sir?

Yes, sir. I'm very grateful to all the participants who have taken their time, very valuable time for this conference. And we have tried to answer their questions to the best of our capability. And I want to repeat that we learn a lot from all these investors who are putting questions. This helps us to guide our business and manage our business better. We understand what is expected by an investor and what is expected by the financial expert out of any company. So it's very helpful and learning, sir. Thank you so much.

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

Thank you, everybody. Thank you so much.