UPL Limited (UPL.NS) Earnings Call Transcript & Summary

Good evening everyone. I'm Radhika Arora, the head of Investor Relations at UPL. On behalf of the management team and all the other people who have worked tirelessly to make this event possible, it is my great pleasure to welcome you all to our FY 2023 Capital Markets Day. Whether you are in the room or joining us via the webcast, I do believe the hours spent with us today will be very valuable in understanding the strategic direction of the company. You'll get the chance to hear from and interact with a deep bench of business leaders, the ones who build the systems and engaged in working towards our ambition to change the game. A few of the examples you would have already seen at the Experience Center created outside. So with that in mind, I will get off the stage in just a bit. But before that, a few logistical pointers. First, on Q&A, there's a lot of information in today's presentation. And we want to make sure that you hear it all before we open for questions. The session will start with a presentation by our Chairman and Group CEO, Jai Shroff; followed by Global CFO, Anand Vora; CEO of UPL Corporation, our International Crop Protection platform, Mike Frank. India head, Ashish Dobhal for UPL SAS, our India Crop Protection platform; Bhupen Dubey, CEO of Advanta, our global seeds platform; Raj Tiwari, Chief Supply Chain Officer for our manufacturing and specialty chemicals. Lastly, please make sure to check out the safe harbor statement about the forward-looking statements. So with that, let me welcome on stage now, Jai.

Thank you, Radhika. Thank you, and welcome, everyone, to our investor conference, our annual meeting of shareholders. So in challenging times, UPL, once again has performed very well. I'm very pleased to share that all the divisions of the business are agile. And to be honest, probably some of the best performing businesses in each of its business units. This year, the consolidated revenue for the group cost INR 50,000 crores, and we had an EBITDA of almost INR 11,000 crores -- INR 11,200 crores. And we had a net debt now of just a little over $2 billion. With this, we've already paid out $250 million to shareholders. We've restructured our businesses. We've also had a debt reduction of almost $440 million and invested almost INR 350 million in CapEx for future growth of the business. UPL continues to perform well and in very, very challenging times as we are going through a post-COVID resurgence of production capacities in China. So UPL has -- to unlock shareholder value and to unlock the true potential of our different business lines, UPL has built within the group, some of the leading businesses within -- in the space of food systems. And today, we have a leading crop protection business. We have the India sustainable -- UPL Sustainable, UPL SaaS, we call it, which is the leading company in India, in Crop Protection, we have the global seed platform, which is Advanta, and we have the specialty and manufacturing platform, which is also in India. In all these spaces, we are #1 in our space in the world in the sectors. We also were able to get marquee shareholders to invest in these companies and also to demonstrate the true value of these separate business units. So we have also been able to get a proper governance setup with different Board members in each of these business units. We have a huge -- I mean beyond compliance, we have a huge amount of experience with Board members who add tremendous value in -- at the management level of the companies. UPL has been focusing on really improving its market share globally. We are today leaders in agriculture transition. We believe the future of agriculture and food security is being sustainable. The whole world has talked about energy transition. The whole world is talking about mobility transition. And I believe the future is about agriculture transition. And with our whole platform of technologies, we are moving towards a more sustainable agriculture future. But not to lose focus on ROC and strengthening our cash flows, as I said, this year, we have paid -- generated more than $800 million of net cash, invested some money, bought back shares, paid out dividends. And we believe that just shows the confidence in our business. Food security is also one of the key challenges for the world. With our initiatives with the Gigaton Challenge with partnership with FIFA Foundation, with our partnership with Zero Summit and so many other initiatives with the World Bank and the UN organizations, we are completely -- we are the leaders in developing technologies towards sustainable agriculture systems. And we believe that agriculture transition is the only way. We cannot leave the whole agriculture community, the food systems out of this transition towards more sustainable outcomes. And we believe that almost 30%, anywhere from 25% to 30% of greenhouse gases are generated by agriculture, and that can definitely be reduced by more than 10% with the right incentive structure, the right technologies and the right support from the governments as they are doing towards the other industries. And UPL has a huge portfolio of what we call Climate Smart Technologies, which can reduce CO2 emissions, which can reduce heat and water stress on agriculture, and I'm sure that you have had or you should take some time to see our small exhibition here to demonstrate some of the things which we are doing across the world in various platform and not to say the least, but to really create a pharma hero concept where we are recognizing farmers who are willing to transition, from traditional practices to more sustainable practices. Some of the initiatives in the sugar industry in India or the avocado industry in Mexico or towards -- in the soybean markets in Brazil and vegetable farmings and our projects in Africa. All these are amazing pilot projects, which we believe our leading platforms to really transition agriculture, which I believe will help UPL to increase our market share in these markets, but also promise farmers a more resilient future and better outputs. UPL is also committed to various, as I mentioned briefly, we've committed to a science-based targets for our CO2 emissions. We are also 1 of the 3 companies -- global companies to sign up to the water partnership at WBCSD. We have part of the UN compact CEO Water Mandate and so many other initiatives, which are creating more than action, creating commitments, and creating a consensus among industry to move towards a more sustainable future. And at UPL, we have invested hundreds of millions of dollars over the last 10 years to develop technologies, to really be able to mitigate some of these things. And we are very fortunate that the world has become so much more aware about that. And I believe that our company will benefit with all these initiatives or requirements or standards by food companies. As food security becomes a bigger and bigger issue around the world and in all my travels in almost every country, the #1 or #2 issue for all the presidents of these many countries and governments -- all the governments at large is food security. And in the face of climate change and such erratic weather patterns, there is a lot of anxiety about that. And we believe that the tailwinds for the industry are huge in the future just because fuel security is going to be one of the critical factors which decides how -- whether governments get reelected or not. So we are very well placed with the platform to deliver a product to almost every farmer. Today, I believe, statistically that almost every farmer uses some of UPL products, 1 or 2 of UPL products, and we believe that, that platform gives us the ability to transition -- help transition agriculture to a more sustainable future. I will hand over to Anand. Thank you very much.

Thanks, Jai. A warm welcome to all of you for joining us today at this Capital Market Day. Before I get into the slides, I just will share with you some highlights and lowlights for the financial performance of the company. At the outset, I want to start with an admission that our performance for Q4 is well below the market expectations. And indeed, it is below our own expectations. However, it's worth pointing out that this was a very unusual quarter for us. And in fact, in the last 10 years that I have been here, this is the first quarter wherein our EBITDA has declined for that of the preceding year same quarter. So while back in January, when we shared our performance and for the first 9 months and gave the guidance, we were very confident of delivering on our guidance. But the drop in profitability due to challenging market conditions in quarter 4 led us to miss out on EBITDA and ROCE guidance for the year. There were several factors which resulted in strong headwinds in quarter 4. Particularly in the latter half of the quarter, which had an impact on our profitability. Some of these factors were decline in prices in the post-patent products with post-COVID search in volumes from China, leading to distributors adapting a wait-and-watch approach. This impacted the sales in some of our key markets. Further, the contribution margins were impacted due to idle capacity costs as we took a conscious decision to curb our production in light of the falling raw material prices. The above 2 factors, combined with liquidating the high-cost inventory led to the decline in contribution margin in Q4, and that flowed down to the EBITDA for quarter 4. Despite a subdued quarter, we successfully achieved our revenue guidance for the full year as we delivered a 16% growth versus our guidance of 12% to 15%. Further, we improved our working capital cycle by 5 days to 64 days, which combined with a double-digit growth in EBITDA helped us to generate significantly higher cash flows from the business. This helped us to reduce our gross debt by $617 million and our net debt by $440 million. Now let me get into the details of the financial results. I'll start with the quarter 4 numbers. In quarter 4, our revenue stood at INR 6,569 crores, reflecting a growth of 4%. The contribution margin declined by 490 basis points due to the reasons mentioned earlier, leading to a 16% drop in EBITDA despite the fixed overheads remaining largely flat. The net finance cost of INR 840 crores showed an increase of 45% over that of the previous year. This increase was primarily on account of rise in the base interest costs. The tax rate for the quarter was higher at 24% and versus 13% last year on account of the timing difference. However, for the full year, the tax rate was 14%, which was close to the guidance that we had given of 15% to 18%. The consolidated results for Q4 include the performance of our 2 platforms, which Jai alluded upon. That is the UPL SAS platform, which is the domestic crop protection platform and it also includes the performance of our AgTech Nurture platform and the seeds platform, which is Advanta enterprises. In fact, in quarter 4, the UPL SAS Crop Protection platform delivered a 16% growth in revenue and a 31% growth in EBITDA on the back of strong traction in key herbicides and insecticide portfolio and the Biosolution portfolio. Our global seeds platform, Advanta Enterprises reported a revenue of INR 849 crores, 12% higher than last year. However, EBITDA was marginally lower due to higher overheads and R&D spend. Moving on to full year performance. At full year, as you see, it gives a good reflection of the resilient operating performance of the company. The full year revenues stood at INR 53,576 crores in showing a 16% growth over that of the previous year. Contribution margin at 40.3% and EBITDA at 20.9% showed a decline of 79 basis points and 112 basis points, respectively. Net profit and earnings per share were largely flat year-on-year as net finance costs increased by 56%. Again, 65% of this increase in finance costs coming from the increase in base rates in most of the geographies. The rest was largely on account of FX. The UPL SAS delivered INR 4,326 crores in revenues a 10% increase over that of the previous year and EBITDA at INR 736 crores, showing a 13% increase over that of the previous year. Our seed platform, Advanta Enterprises for the full year performed extremely well and delivered a revenue growth of 26% over that of the previous year and the revenue for the year were INR 3,558 crores and the EBITDA grew by 29% over that of the previous year. The EBITDA for the year for the Advanta seeds was INR 921 crores. Going forward, we would also be reporting the performance of our manufacturing and specialty chemicals business as a separate platform. As regards to working capital, the overall working capital saw a reduction of 5 days and it stood at 64 days as against 69 days in the previous year. We saw a reduction in receivable days by 12 days on account of robust collection. As for inventory and payables, inventory days were down by 9 days and on the back of better inventory planning and reduced procurement especially in the quarter 4 considering the rapid drop in the raw material prices. This is reflected in the reduction in payable days by 16 days. Moving on to cash flow. As I mentioned earlier, higher EBITDA coupled with leaner working capital helped us to generate cash flow of close to INR 4,000 crores, an increase of 131% over that of the last year. And this helped us to reduce our net debt by $440 million and gross debt by $617 million. During the year, with the realignment of India crop protection business, into UPL SAS and the India and international seed business into Advanta enterprises saw a net capital infusion of about $250 million. Further, we also returned close to $260 million worth of cash to the shareholders through the buyback of shares and dividend payouts. I particularly wanted to share this slide, which talks about the shareholder value creation over the last 4 years. The reason for selecting last 4 years is, as you know, in 2018 in June, we announced the acquisition of Arysta LifeScience and which was almost a similar size company, which we bought for $4.2 billion. As you would see, over the last 4 years since the acquisition, the company has maintained growth momentum, both in terms of revenue and EBITDA, with revenues growing at a compounded annual growth rate of 14% over the last 4 years and EBITDA growing at a compounded annual growth rate of 15% for that of the last 4 years. But what is more heartening to know, still state here is that we were able to reduce the debt in terms of dollar terms by $1.8 billion over this period of 4 years after returning USD 550 million to shareholders, either through buyback or by way of dividend. Further, our net debt to EBITDA has come down from 4.2x at the time of acquisition to 1.5x as of 31st March 2023. Just to share about the debt profile of the company, again, it just is a reflection of the low risk that we have despite having the debt which we have on our books. The long tenure, most of our debt are long tenure debt. The low cost of our debt, average cost is roughly about 6%. And most of the debt is unsecured and aligned to our earnings, which, as you know, is largely in U.S. dollars, is a clear reflection, the profile clearly reflects the low risk which we carry on our balance sheet. With this I'll hand over to the business heads to make the -- to share with you the update -- give a detailed update on the business. I would invite Mike to take over for you.

Thank you, Anand, and great to be here. Great to see everyone again this year. So over the next 20 minutes or so, I'll hit on 4 topics. Firstly, I'll cover the FY '23 performance, both Q4 and full year, followed by our outlook and strategy for FY '24. Then I'll talk about our mid- to long-term plan. Last year, we introduced the path and a plan to FY '27. So I'll give an update on where we're at against our FY '27 plan with a real in-depth look at our pipeline -- our R&D pipeline in a way that we haven't shown before. And then finally, we'll conclude with guidance for FY '24 for the UPL Global Crop Protection business. As highlighted by Jai and Anand, we demonstrated resilience and agility in FY '23 and we made several advancements on our overall UPL strategic objectives. So starting with Q4, our revenue grew by 4% despite the rapid decline, as Anand talked about, of key post-patent products in what I would call a very unusual quarter. This rapid decline was precipitated by the sudden increase in China post-patent AI production following the COVID policy changes in China that really occurred mid-quarter in Q4. This rapid price decline and post-patent pricing really froze distribution and their buying decisions as they waited to see where prices were going to land. And they didn't want to take inventory positions in a market that had uncertain pricing. Additionally, we were impacted in the U.S. specifically as the spring season was delayed and field work really didn't begin until after the Q4. Thus, distribution there also took a wait-and-watch approach on their inventory position. So as this situation evolved, we made the necessary adjustments on post-patent product pricing, which did lead, as Anand said, to a compression in contribution margins. We also made a conscious decision to clear off high-cost inventory and idle some plant capacity to ensure that we didn't blew up inventory and working capital. These actions while compressing margins in Q4 have also set us up to compete aggressively in the new year as we are in a much improved inventory position relative to our industry peers. So moving over to the quarterly regional performance, except for North America, all of our regions posted moderate to strong growth in the quarter. North America, as you could see, was down 13% due to the rapid decline, specifically in glufosinate prices, which is one of our leading products in that market. And as I mentioned, just the overall low on ground movement of product, that I talked about earlier. Among other regions, Latin America posted a strong growth of 13% driven by volumes of key insecticides such as Perito and Feroce as well as from our new 3-way fungicide mixture Evolution. Europe, as you can see, had moderate growth of 7% despite macroeconomic challenges, unfavorable weather in Southern Europe specifically, and bans on key products such as Mancozeb, Propanil and Bifenazate. The rest of the world, comprising of Asia and Africa grew by 8%, driven primarily by herbicides, but partially offset by insecticides. So on the full year for FY '23, our revenue has grown by a strong 16% versus last year, driven primarily by herbicide performance. Contribution margins were 31.5%, which comprised of strong expansion in the first 9 months and then impacted, of course, as we talked about with the Q4 situation. Overall, the EBITDA had a growth of 9%, driven by lower contribution margins from investments to strengthen customer relationships and capability building for our differentiated and sustainable product portfolio. All regions, except for Europe grew in double digits, with Latin America growth leading the way at 22%. This last year was also a very strong year of new product launches, including what we believe will be future blockbuster products for us. Over 2% of our revenue came from new launches and around 2/3 of these products and the revenue came from our differentiated and sustainable portfolio. And as we've talked about in the past, our path on these sustainable portfolio to get to 50% by FY '27 was really demonstrated with the growth of these products and these new products that we launched in FY '23. In differentiated and sustainable solutions, our growth was lower in the first 9 months as compared to post-patent segment, as you can see on the left side of this chart. This was really due to the positive pricing actions on the latter during this period. However, as you can see from the chart, in Q4, the rate of growth for differentiated and sustainable products was higher and this trend is expected to continue in FY '24. I'd also like to mention here that the differentiated and sustainable growth was driven by volumes, indicating strong demand at the grower level for these products. So to summarize on FY '23, while our revenue growth was impressive at 16%, we did have moderate EBITDA growth versus our expectations, as Anand mentioned earlier. However, despite these adverse conditions, our agile business model supported us in rapidly adapting to the challenging market conditions. In the first half of the year, we quickly leveraged on the pricing opportunity to improve our business quality and margins, along with higher cash generation. While in the second half, our focus was on securing shelf space for our products, improving working capital through faster collections and clearance of higher cost inventory, along with improved receivables and inventory days. Further, we had a strong year in terms of new product launches which are expected to ramp up in the near future. I'd like to congratulate our regional teams, some of them who are here with us today for this performance and driving traction across markets, and I'm confident that we will maintain this agility in capturing volume-driven growth and improving our working capital going forward. So let me switch to our outlook and our strategy for FY '24. Fundamentally, we see continued strong farm gate demand for our products. Farm margins are generally very strong globally in most crops, fertilizer prices have come down, giving farmers the opportunity to maximize yields, maximize their sustainability outcomes and drive margins for them. And that's really where UPL sits and how we add value to our grower customers. So when considering this backdrop, we will continue to see new product revenue from additional new products that we're going to be launching in FY '24. Last year, we generated about $140 million of new product -- of new revenue from new product launches. This year, we expect to generate, again, over $120 million from new product launches. We'll also accelerate growth in our differentiated and sustainable product portfolio through targeted promotion and margin accretion replacements with superior blockbuster offerings such Feroce. We're going to continue to focus on gaining shelf space for our key post-patent products in targeted markets, specifically in soybean and corn crops by leveraging our strong supply chain and manufacturing base here in India. And finally, we'll continue to improve our profitability through a focus on optimization in overheads, higher productivity in our plants, focusing on working capital and both receivables and inventory management. So to support our medium-term growth, our 3 pillars are: firstly, smart R&D. Smart R&D for us is our robust capability of an infrastructure of over 30 facilities globally over 1,000 employees that are developing new innovations, protecting those innovations with intellectual property and ultimately launching these products to create value for our grower customers. The potential in our new product introductions just as we shared last year, between FY '22 and FY '27 is valued at $2.5 billion. We'll also accelerate our growth in key emerging markets where UPL is well positioned to outperform and ramp up our differentiated and sustainable products, and we'll leverage our reliable, sustainable and low-cost manufacturing capability here in India and our footprint around the world. Looking at our Crop Protection and NPP biosolutions through the lens of grower pain points, our efforts are to introduce newer solutions, either through new mixtures of conventional crop production products, Pronutiva, which is when you combine NPP products along with conventional crop protection products in a unique way to help growers both maximize productivity, but also create other attributes, whether they be 0 residues or carbon outcomes. And of course, directly through our NPP offerings as stand-alone products. So on a risk-adjusted basis, our current pipeline is estimated to be north of $8.5 billion per annum, with $2.5 billion of that coming within FY '27. We currently have 25 molecules in the development pipeline and 16 new solution platforms that are under development. Additionally, we also see that nearly 80% of this pipeline is in the category of differentiated and sustainable products, which is clearly our focus area. And lastly, with several products going off patent in the next 5 years, we see a strong growth opportunity in the post-patent segment as well. So over the next 2 slides, I'll take you through our robust R&D pipeline. This is a level of detail that has not been shared with you earlier, so I'm really pleased to share this with you today. Looking at this table, it's evident that we have a strong pipeline under each major portfolio at various stages of development and spanning across every region and virtually every crop combination. On this page, you can see our new products in weed management, disease control and insect management. All of these products have been either just launched or will be launched within the medium term. We also have several new products and technologies that we're developing in the carbon and bionutrient segment. As you can see, these are also to be launched in the near to midterm time frame. And we'll also show some of our new AIs and new technologies at the bottom of this chart that we believe will bring significant value to growers in the more mid- to long term. I'd also like to add that several of these offerings were excited about the potential peak revenue, and we're confident of converting some of these into blockbusters over the next few years. So to summarize, we'll continue to have leadership positions in post-patent AIs, and we'll continue to expand our offerings in the sustainable and differentiated segment. Basis on the pipeline that I just showed you, I'm confident of increasing our innovation rate from 14% today to 24% by FY '27. Along with our commitment to increase differentiated and sustainable revenue to 50% within the same period. For our go-to-market strategy, we'll continue to really leverage on these 4 areas. Firstly, we'll expand geographically our reach to growers and distribution. This is how we go to market in every region through distributors, retailers and in many markets, direct to growers. And we're going to increase our proximity to the growers on branding initiatives and in unique go-to-market strategies, where we really have an opportunity to manage the demand for our products and really pull through distribution, the products that we're placing into retail. In addition, we'll increase product mix and portfolio expansion through cross-selling and ProNutiva expansion. And the final element of our go-to-market strategy is to focus on strategic alliances and partnerships all to tap new markets and increased technology access through our OpenAg collaboration. All with the support of digital tools and technologies across regions and operational effectiveness, we'll continue to build and grow our B2B partnerships for increased volume sales and improved working capital management as well as increase our B2C sales, for improved margin mix and even greater access to growers for better demand generation and wider offerings of our complete solutions. So finally, biologicals, biocontrols and biostimulants will continue to remain the fastest-growing segment, we believe over the next decade and therefore, will continue to be a key focus for us. While the industry segment is pegged to grow at 11% CAGR over the next 5 years, we are confident and well placed to exceed this growth. And we are among the leading players in this segment globally, which is still largely fragmented and hence will continue to drive our organic growth strategy. Last year, we achieved a revenue of $409 million in this segment and have made significant investments, including in technology, with feet on the ground to create demand and to make sure that growers understand the benefits that accrue to them and to the environment. Going forward, we'll continue to expand our portfolio of hero products, which are NPP big products such as Thiopron, Microthiol and Yukon amongst others, through geographical expansion, innovation, licensing and promoting through our Pronutiva approach. So as we look at our FY '24 outlook, we see a 4% to 8% revenue growth opportunity with the midpoint being at 6%, while EBITDA is expected to grow in the range of 6% to 10%. We're confident of this growth despite the specific headwinds that we discussed earlier. We are well placed to take advantage of strong farm gate demand, higher expected growth of Biosolutions offerings and the ramp-up of our innovative products. So the key takeaways, I just want to emphasize that we have a strong growth path not just through FY '24, but really through FY '27 and beyond, as I shared with you the R&D pipeline. We are on a path to achieve 50% of our revenues from the differentiated and sustainable portfolio, which is also margin accretive and has less risk overall. And we really believe that UPL global crop protection will become the fastest growing and remain the fastest-growing global crop protection company in the industry. With that, let me invite Ashish to talk about India SAS. Thank you.

Thank you so much, Mike. A very warm welcome and good afternoon to everybody. I'm Ashish Dobhal, and I'll be introducing UPL SAS -- UPL SAS also it's called. Before I start, many times people ask me what exactly is UPL SAS. So SAS actually stands for UPL sustainable agro solutions. And the reason why we've kept this name UPL SAS, so that every time we take our name, we are reminded of our core purpose, to make farming sustainable and profitable and also resilient for almost 100 million farmers, which are there in India. And we'll be -- what we are trying to do is transform Indian agriculture by a very unique outcome-driven approach. And there are 4 main pillars to it. The first main pillar, of course, to drive such a big transformation, you will need somebody very credible. And I think there's no bigger name credible in the Indian market like UPL. We have a 13% market share, which makes us one of the biggest company in the Indian market. Whatever we do is supposed to be very, very trustworthy. I think it's very easy for the local farmers to buy into whatever we are doing. The second piece, of course, the crop protection, we have some of the biggest brands in the Indian market. We've added biosolutions to it. And we have added now crop establishment products to it. We are one of the biggest in the post-harvest space also. And all these have to be delivered through a very wide network of distribution across India. So we have a very highly penetrated pan-India market presence. Add to that, the digital leverage for millions of farmers and the distributors and the retailers to empower them, we have also launched an AgTech platform. How this story unfolds, we'll see in next few slides. The first thing is our broad portfolio, everybody knows about it, that we usually used to have insecticide as our major segment. But what we've seen is because of the labor shortage and some of the amazing innovative introductions that we've done in the last 3 to 4 years, Herbicide segment has gone on to become our biggest segment with 36% of our overall portfolio. We also have still insecticide segment as our primary portfolio with over 26% of our total portfolio. Add to that, the fungicide portfolio, which has been rock steady for so many years, which is 20% of our total portfolio. What is really moving the needle for us and something which is very exciting, we are already excited about is the climate smart solutions. These are the products which are so, so important in these times when there's a huge talk and huge disruption in terms of climate change. So while insecticides, herbicides and fungicides are managing the biotech problems for the abiotic stress, we have the buyer solution, which we also call sustainable solutions. You add to that the post-harvest solutions, not many people would know, but most of the grains in India, the potatoes in India, we have a huge market share, dominant position of 90% plus in storage of these crops. We also have fruit coatings. We also have coatings for apples and oranges. This whole thing sort of then combines into a universe which we call Pronutiva. Pronutiva is protection plus nutrition. These are packages which are designed for specific crops and which are designed for specific areas. India is such a big country, you need to have specific packages for specific areas. And if you dice it in a different way, we also have -- if you see our portfolio, we have about 65% of our portfolio as post-patent, but make no mistake. I think even in these post-patent, we have some of the biggest brands in the local market. And 35% of our portfolio is sustainable and differentiated. What we mean by differentiated is we have proprietary position. For example, we have proprietary position in some of the leading cotton insecticide, soybean products like Clethodim, which we just introduced last year, we have proprietary position in some of the wheat herbicide. Add to that, the sustainable portfolio, which I just discussed, the Climate Smart portfolio, now what exactly is this portfolio -- this portfolio goes right from the drought mitigation technology like Zeba, which holds water and which holds nutrient for a crop. We also have a range of biofertilizer. We have biostimulants, we have silica-based products. We also have insects and disease resistance growing products in this segment. So all in all, these 2 -- this is how it dice and I think this is where we feel this segment of sustainable and differentiated keeps on growing for us year-on-year. So we can have all the fancy solutions. But if you don't have the reach -- India has 28 states, and I think each state is like a different country. So if you want to have -- so if you have to reach each and every nook and corner, you really need a strong presence, which we have over the years. We have a very unique approach to how to reach the entire Indian market. We have 2 brands, one by the name of UPL, the other by the name of SWAL, which are selling the branded products into the local market. We have about 72 depots or the warehouses as we call them. In addition to that, we have 5,000 people. Agriculture is applied science. You need people in the field to demonstrate it to the farmers and explain it to the farmers. And these essentially then cater to 25,000 big wholesalers. These are the guys who literally control the Indian market who are then, in turn, giving the products to almost 3 lakh plus small retailers. To add to this, we have 2 very interesting approaches. One is called Unimart. Unimart is our experience centers. Our analogy would be an Apple store where people come, go in the villages, see the product, experience different technologies and then they take a call. They can buy the product from there or they can buy from anywhere else. What we've seen is wherever we put Unimarts -- we have 600 of them, we have seen the business grow in that entire area. These are physical stores just selling UPL, SWAL and Advanta products. To add to that, we also have about 340 business partners, these are the B2B players. We supply the product to them. They also, at the end of the day, are serving 100 million plus farmers in India. And the most fantastic thing is that we -- with this network, we are covering 90% of the agriculture districts in India and 90% of the crops, which are grown in India. But that's not enough. I think India is a country with 100 million plus farmers and almost 3 lakh plus retailers. In order to be present with them and give real-time solutions, you have to take -- go to tech. So we have 2 AgTech solutions. One of them is nurture.farm. This is a solution which has -- this is an app with almost 3 million farmers transacting on the app. This gives real-time information, 24/7 UPL is with these farmers, and this gives them farm advisory, if they want to book services like spring services on the app or harvesting services on the app if they want to get harvesters, it's available on the app. If they want to do soil testing, it is there on the app. The most interesting feature, of course, is counterfeit is a big problem. The farmers can just take the app and scan the product, 100% of our products are with QR codes and bar codes and then you would immediately know whether the product is a counterfeit or an original product. So that's with nurture.farm app. We also have nurture.retail app, in nurture.retail app, what we are trying to do is foster the local entrepreneurs. The small time entrepreneur, anybody who's got a license can come on to our marketplace. He'll not just get the crop protection chemicals, but he'll also get -- he'll also get seeds, he'll also get feed, he'll also get machinery and other equipment. And we have about 85,000 retailers on the platform, which makes it one of the biggest platform, perhaps not just in India, but globally. We also have about 9,000 SKUs, which are being on the platform. And I think this gives an amazing choice to the local retailer to select the product, it gives complete price transparency and so many other things. All this put together, this is my favorite slide. All this put together, what we've been doing in the last 3, 4 years has given us tremendous benefits in the field. We have been growing by 18% in CAGR to reach to INR 4,326 crores of sales this year. This is the first year where we crossed INR 4,000 crores of sales. We also -- the more interesting piece is that in terms of EBITDA, we've been growing by 25%. So this is the first year we cross INR 700 crores of EBITDA. And this is primarily led by a growth in sustainable and the differentiated products. Coming to the current quarter, fourth quarter normally is a strong quarter for the India team. We have grown by 16%, 31% growth in terms of revenue. This is 31% growth in EBITDA. This is primarily driven by increase in differentiated and sustainable products that we sold in Q4 because we are -- India is the first country to get into season. So I think that becomes a very natural quarter for us to place the products for kharif. And this sustainable and differentiated solutions for us in the quarter 4 went up from 18% to 24%. For the full year, I think it was a tough year. I think like Mike said, I think everybody knows about it. We started with the whole Ukraine war and the whole disruption in the food grains. And then there was a COVID in China last year starting. And unfortunately, we got stuck -- the India business which is the first business to get into a season got stuck into the upward movement of the prices. However, we do have some of the strongest brand in the market and the entire 10% growth almost has come from the price increase. We are able to push prices in the market. And then, of course, we had a very, very tough season in terms of first it didn't rain and then when it rained it just didn't stop. We still manage a 17% contribution growth. However, this was slightly offset because of our -- some of our very ambitious plans of opening up the UP market and the Andhra market. I think we wanted to go deep in the market. We have made some investments. We also invested into some new products, for example, Flupyrimin in paddy and we also had another product in soybean called Clethodim, both of them are doing very well. I think we had , 4 big massive launches. For nurture, I think this was a year where we had almost INR 72 crores worth of revenue and EBITDA of minus INR 284 crores. In the entire nurture platform in the last 3 years, we have invested almost INR 800 crores of money to scale up and build the platform, and we've done the most difficult job, which is there in tech, which is of customer acquisition. Guidance. Approximately -- this is how the year looks like. We're looking at 12% to 16% of growth and 14% to 16% of EBITDA growth, primarily driven by launch of new products such Sperto, Sperto is one of the biggest selling products in Brazil. I think it makes an entry into India market this year. We have products like Fascinate flash, Larviron is supposed to be one of the best larvicide, which we are going to launch this year, Spruce sort of complements that portfolio in the wheat segment. We continue to increase our portfolio in differentiated and sustainable this year. That's going to be our major thrust. We also will -- this year we should benefit from some of the launches that we did last year, but we didn't get a full year for example, Tridium, which is a 3-way fungicide, Apache, which is a mixture insecticide for cotton and Viola, which is the insect side in paddy. Unimart have -- we started them as experienced stores, but we realized that they're also making us a good revenue. So I think Unimart goes from 600 to 800. We want to do it carefully because we don't want to forget our core purpose of making Unimart as the experience stores and the technology dissemination stores. For nurture, the plan is to reduce EBITDA loss by about 50% this year and in 24 months breakeven at the EBITDA level. And increase the farmer reach to about 5 million and retailers onboards to about 120,000 retailers, so add about 70 to -- 50,000 to 60,000 retailers. And this is how the story unfolds. I think we are very confident that we are able to do it. I think we will take our next big step on transforming the Indian agriculture from a very product-driven approach to a very outcome-driven approach.

Thank you, Ashish. Agrochemical part is over now. We are coming to the seed actually reverse order. Without planting the seed, you can't start with the agrochemical business. So welcome to Advanta. -- very pleased to walk you through a couple of slides updating you where we are on Advanta front. I mean there are key 4 points here from Advanta perspective. We have a superior product portfolio backed by the proprietary technology in terms of -- I mean, you are aware that the seed industry is basically based on innovation. That is how the sustainable results can come in. There's nothing like a me too by and large. I mean me too in seeds means trading business. So fundamentally, our core is an R&D engine and then that's really doing very well. And superior innovation capability at time, you have a great product. But in terms of GTM, et cetera, if you are not really aligned with that, we are unable to capture the values. Our team has been able to do that very well. A couple of examples I would share with you in a couple of minutes. We have a strong presence, production and distribution capabilities. Probably last 12 months, we added highest production and processing capabilities, our own as well as tolling arrangement. -- compared to past few years. In fact, the way growth is happening in Advanta, possibly that also we will be adjusting that capacity, and we may have to go for additional capability development in CapEx part next 12 to 24 months. Robust financial performance is just a byproduct of all the things, which we are doing right for a number of years and in past. In terms of the key crop distribution of our revenue, #1 crop is field corn. As you know, seed industry is about $50 billion, $55 billion and that number 1 is corn. Corn has broadly 2 categories, temperate corn and the topical -- subtropical corn. Advanta is predominant in a tropical corn. We are a leader, #1, 2, 3 in variety of geographies, and that is contributing about 45% of our revenue so far. #2 crop is grains and forage sorghum. Now this is a very interesting crop. Globally, corn is covering about 200 million-hectare while sorghum is about 45 million to 50 million hectares. We talked about the climate change, sustainability all those -- these big words ultimately boils down to what does it mean in terms of, let's say, input consumption. How can we get more output using less input in terms of water, fertilizer, agrochemical, et cetera. In that category, sorghum is one of the best crop, which require, let's say, 60% less water to produce the same -- an output compared to the corn or any other crop. There are certain challenges, very interesting challenges our R&D team is working on. We believe that this 45 million-hectare sorghum which we have right now, the way things are evolving, I think this area will go up $45 million to maybe $75 million, $80 million going forward. And that also shows a lot of opportunity in terms of business expansion, business development, new countries are opening up. At the same time, also some of the challenges it throws up for our R&D team. For example, sorghum require more, let's say, digestibility. So we have R&D projects, which are -- we are funding in to increase the digestibility for various applications. Human consumption is very common in Africa and Asia. Is not very common in Americas, for example, right? So how do we identify the features of this crop, which can really enhance the adoption in the human consumption in Americas, one example. Second example is predominantly we are very high on the carbohydrate side, low on the protein side, maybe 9% to 10% -- can we have a sorghum, which can have 15% to 20% protein, et cetera. So these are the fascinating, exciting R&D projects we are working on. And these are the innovations, which are going to take us forward in this crop. We have one of the widest variability in terms of germplasm in sorghum in the world, be it the green sorghum, forage sorghum, sorghum for the biofuel, et cetera, et cetera. And that Gene bank, which we have is a very, very precious asset Advanta has it, and our team is highly excited to work on those projects. Going forward, contribution from this crop is likely to go up more and more. Third domain is vegetables and fresh corn, is another area which we started with a small acquisition into 6, 7 years ago, golden seed, unicorn seed, et cetera. and those genetics, we are spreading beyond India to some of the Asian countries and African countries, also fastest-growing segment for us historically speaking. Sunflower and canola. I think this is an oil seed category. -- volatility is very high. As you are aware, because of the European war sunflower -- I mean, Ukraine supplies to globe about 50% of the sunflower edible oil, India is one of the biggest importer for this country. Because of the war, the supply chain was disrupted. And therefore, many other countries picked up acreages, for example, Argentina, southern part of Brazil, India. Some of the countries which had lost the acreages from sorghum to other crops, they started gaining back and that is reflected in our numbers. So these are primarily 4 crop segments we are operating in, and this is the revenue distribution coming out of it. Differentiation comes with the technology. So what are the technology which we have. Igrowth, for example, in sunflower, like in corn, some of you must be aware about GM corn and non-GM corn, Americas is about 95% GM corn. Sorghum so far did not have this trait. No company invested in the technologies. We decided to invest in this technology for herbicide tolerance via non-GM route, which is expensive and long duration. Our team started in 2007, this project. After 10 years, 2017, we got first product called Igrowth. And that we launched in Argentina. And in the last 4 years' time, I think Argentina's sorghum market, Advanta captured from about 14%, 15% market share to nearly 65% market share. It's one example. Now this is something we want to replicate in country after country after country. And current scenario is -- I mean, the market is preferring non-GM. So we are the only one in this segment where herbicide tolerance trait coming via non-GM. So adoption is very, very fast. We are unable to really ramp up the capabilities in terms of parent seed production, et cetera. And these are the areas of investment we are planning to really ramp up this activity. While we talk about -- and again, GM or the trait is not a single trait game, what next? And therefore, our team started working on another projects. Igrowth gives resistance to herbicide of 1 category of product. Another category of product resistance, we started working on, and there are promising results coming in. We believe that in the next 4 or 5 years' time, we will have another way of trait we will be releasing it. In other words, Sorghum is something we are technifying it, right, and adding more and more features from multiple angle from a consumer angle, as well as from the grower angle. As a result of that, this crop is becoming more and more attractive. And of course, from a climate point of view, requires 60%, 70% less water than corn. And therefore, we believe that it is a future smart crop, sustainable crop. And your company Advanta is very well positioned in this area and via this technology also. Likewise, a couple of other tech traits, we have Vertix, Aphix and all the traits which we have, unless and until we have an on ground technology transfer center, we will not succeed. And therefore, we have Advanta Innovation Center in a key market. We demonstrate these technologies whereby the key stakeholders can come and have a feel of it. So these are the kind of in nutshell, the spread, which we have -- strategy which we are adopting in Advanta. Superior product portfolio backed by the proprietary technology, as I indicated earlier, the key crops are topical corn, conventional primarily. We are into GM in Americas in a very small area, but by and large, we are into the non-GM crop. Sorghum and sunflower. All the key crops and key country, we have either #1, #2 or #3 position at this point in time. Vegetable part, okra, we are globally #1. In fact, we are transforming this okra landscape. It's tropical vegetable, but the way it's adoption is very, very high. Hot chillies, Sweet corn, sweet corn is another interesting crop. Center of excellence for tropical sweet corn in the world, in the industry is Thailand, and we are very well positioned there. And that genetics has a demand in entire Asia, Africa and Central America. And then there is really -- that portfolio is expanding very, very well. As I indicated earlier, our R&D capabilities coming from world-class research and development team. We have nearly 45 years of experience in plant genetics. We have 32 R&D facilities across 11 countries. And this is something we are augmenting. Our research is happening -- our investment is happening in these areas more and more. We have more than 70 plant scientists with a very rich experience, qualifications, and we are upgrading the skill on and off all the time. So innovation pipeline, we have nearly 60,000 hybrids per year. We do nearly 0.5 million testing plot per year. Now any plant science company, this is a key indicator, this 500,000 testing plot per year. How many plots we are able to increase more and more. So that innovation funnel. While we have -- earlier days used to be like this, whereby you have a less number of cross your plant and then you have 7, 8, 9 years. We are increasing the base now. As a result of that, in stage 1 and 2 itself, we are trying to maximize that. So the funnel can be shrunk and number of advancement of the year for any product, which is about 8 to 10 years, we can shrink it to about 5 to 6 years' time. Company which is able to do that will be really a leader in this market going forward. So these are the -- some of the data points on the R&D side of it. Strong presence, production and distribution capability. We are augmenting here all the dots, which you can see green color, are the areas of own production center. Right now, we have 24. And I see in next 3 or 4 years' time, we will be adding about 10 to 15 production center in this area going forward. In a couple of earlier meetings also, I indicated maybe $0.5 billion revenue seed company. There are N number of companies, that kind of business coming in 1 or 2 countries, all right? But here, actually, we are a company whereby we have presence in, of course, nearly 84 countries. Key countries are about 15% to 20%, but you have capability to ramp up as and when we want to be aggressive in terms of our market position, et cetera. So that is a very, very good thing. But at the same time, it throws a challenge for the leadership to manage multi-crop and multi-country. So there is a challenge. We need to master that game. It's not easy all the time. A couple of changes we are making. For example, we have a market-facing brands like Advanta, Pacific Seeds, Pacific Seeds Thailand and Australia and [ Atlas ] Seeds. There are a lot of legacy reasons for maintaining these kind of brands. One prime reason is that farmers are associated with this kind of brand so much, we don't want to change it. And therefore, we are continuing with that. One important point in distribution, we are making changes. Some of the countries we used to B2B, we have national distributors. And then they will distribute down the line. We realize that model has mixed out and becoming obstacle in terms of further growth, for example, Indonesia. Our entire business was -- we were doing in B2B, we realized we are not growing for the last couple of years. We -- of course, another area, as you are aware, in a market where the small holding is very high, distribution is fragmented. Credit risk is very high. So we were just contemplating whether we should open or not. We decided to open finally in Indonesia and decided to go from a B2B, a single distributor to multiple distributor B2C model. Last 2 years, we have been working on it. And very happy to report to you here that we've huge successful -- big success we got from Indonesia. You are aware, Indonesia is likely to be 1 of 5 top fastest growing economy in the world and agriculture base is quite strong, and we are building our position there very, very strongly. In terms of historical numbers, how it is looking like, revenue, your company Advanta grew at the rate of 21% CAGR every year, year-on-year. And at the same time, EBITDA level, CAGR is about 31%, very impressive results. And I would like to take this opportunity to thank growers of the world, farmers of the world, and the same time, our distribution partner dealers, our own employees who are very dedicated. And last not the least, the trust of the investors in this organization. As a result of that, we have been able to continue in order to deliver these kind of results. And we do hope that we have a platform whereby this performance is going to accelerate further going forward. Quarter 4 results, I think, while numbers are good compared to previous year, but definitely lower than what we had budgeted because external market dynamics, which are changing, not changing only for the agrochemical, but as such for the agriculture, ecosystem, everybody is impacted or likely to be impacted. The degree may vary based on the portfolio, et cetera, et cetera, but -- so that is impacted -- you see the impact here. Our revenue growth is 12%, and EBITDA actually degrew by 5%. Here, there is another element also important to highlight. One of the important crop, which cuts the financial year, let's say, canola in Australia,very strong brands, which we have, and markets start asking for the inventory sometime in Jan and February, but they start -- continue to buy in March and April and May. And therefore, this year, we also had a just-in-time kind of situation. The seed was coming from the market, being processed, and unless until quality department clears it, we can't sell it. So if you see the calendarized number, these numbers are very impressive, but it's only -- this will be reflected in the first quarter in coming financial year. So in terms of total complete picture for the financial year, revenue for the year grew by 26%, contribution profit 28%, EBITDA grew by 29%. In terms of regions, we have divided business into 4. One is Asia and Africa, Middle East Australia, America and Europe. For each region, I'll make a couple of comments. Very proud to share with you that Australia, we had the highest ever revenue. We crossed $50 million for the first time. A new product which are launching in Sorghum as well as in canola are clearly reflected there. Of course, the historical commodity price, canola price in Aussie market was about -- Aussie dollar, about $800 to $850, $900 per tonne never ever this kind of price farmer got it that also reflected in this -- our performance. Coming to Asia and Africa Middle East. India is doing very well. India, we have divided into 3 domains, field crop dominated by sorghum and the corn, et cetera. Another domain is forages and third domain is vegetable. The field crop domain is doing very well. In about 3 or 4 states, we are #1 -- #2 and I think this next 12 to 24 months' time, there's a good chance that one of the 3 or 4 states also, we will be in that kind of position. Product range is performing very well, and the results are very impressive. Our forages are muted less than our expectation. We are into the super premium category. I think in marketing, we need to really pay a little more attention, positioning has to be right. And by and large, the forage segment is dominated by the commodities. In a commodity dominant market, converting that market into the brand and the super specialty is taking more time than what we expected. But we are -- our team is working rightly. And I think in a couple of years' time, we should have a turn around that. We are the leader there in it by a big margin. Vegetable, I think is also very muted. Segment is not doing well, last 2 years' time. I think COVID impacted big way, vegetable segment around the world, not only in India -- because of this COVID scenario, a lot of seasonal migration of the agricultural laborer used to take place, is not happening. Multiple reasons in different countries, different regions, but this segment require high amount of labor for plucking and planting and transplanting et cetera, et cetera. So mechanization is happening, but the pace is slow coupled with this, the field crop, like corn, et cetera, they got the highest commodity price. So it was easy for farmers to switch from vegetable to soybean or corn or any other crops. We do believe that the acreages should come back in a year time or so. And I think next 6 months' time are crucial for us to see how really it works out. Africa is a 50-year project. Africa is a marathon -- super marathon, whereby you take 3 steps forward, 2 step backwards because of a variety of reasons in terms of political stability, exchange rate, et cetera. We believe in that market because of the macro issues, a number of people growing there, young population growing there. At a macro level, next 5 years, 10 years' time, we believe is going to really give us a reward. If you continue to invest, we believe in that market, we'll continue to invest in that market. Middle East, for example, we were hardly there, but Middle East countries are realizing that, they import maybe 50%, 60%, 70% of the food from outside. They have a lot of money, and they are now serious about investing back into R&D. And that is where they are inviting us and we are in -- we are partnering with them because the very adverse condition when the agriculture grows like a dessert areas, those areas -- that mastery, we will develop, we'll be definitely helpful in other countries, which are likely to face that kind of adverse situation going forward. And therefore, that is how we are looking at the markets. Americas, I think our team in Argentina are doing great. We are -- a segment we are operating in. We are top of the segment. Brazil, we have a turnaround this year. Brazil, we reviewed our portfolio, 5, 6 years' time, we realized that soybean is not paying off and we decided to mute our plan on the soybean part of it. We will be there. We are there, but our presence, we are trying to mute it. But high growth we are launching there, and the reception is very, very high. 40,000 bag, we sold -- I think 40,000, 45,000 bags, results are very good, probably 3x to 4x acreages we will be gaining in the next 12 months' time. So there is an upside. U.S., we have been suffering a lot in terms of our operation there. Not very happy with the way results are coming in, but we have put our house in order in terms of -- I mean, we are dependent on tolling arrangement the last 2 years' time. We believe that, that should really help us, but we were wrong. That arrangement did not help us. And as a result of that, we could not service the market with the speed we wanted. And therefore, last year, we decided to invest about $12 million. We upgraded our plant there. And now the plant is now ramping up and then the production we have debottleneck. I do believe that we will have recorded growth going forward in the next 12 months' time. Europe, small base, Eastern part of Europe, our focus is Eastern part of Europe and the sunflower. We invested our money in R&D in '16 onward. For the first time, we process the EBITDA breakeven. And going forward, we will have accelerated growth coming from this region. So broadly, I think overall geography-wise, growth-wise, a very balanced growth is happening right now. Revenue growth by region, Asia is -- Africa is about 23%, Americas 27%. Australia 36% I indicated, and Europe, 13%. So all geographies are firing with a good robust growth. Coming to outlook part. We do believe that this momentum in Advanta will continue based on what we see as outlook for the overall market scenario. Of course, there will be -- I mean, we see that commodity prices are coming down. But that downward trend also is good enough for the farmers to continue to buy the good products, premium product. We believe that. And as a result of that, revenue growth likely to be 11% to 15%, EBITDA growth will exceed that 14% to 18%. That is how broadly looks like. Tropical yellow corn growth expansion is driven by market share gain in India and Indonesia. In canola, we see Australia, South Africa accelerating it further going forward. Growth in sunflower portfolio in Argentina, led by renewed portfolio in couple of other geography like Ukraine and a couple of -- part of Romania, et cetera. Grain, sorghum growth driven by Brazil and North America. We do believe that we have de-bottlenecked our supply chain and therefore, market demand is very good and therefore, we will be able to service them. Vegetable, fresh corn, as I indicated, last 2 years were muted. We are hopeful that it's really pick up the demand this year. And B2C business, we are going to expand. One example, I gave it to you, about Indonesia. Few other countries we will open up now, converting B2B to B2C. We will have investment. Some risk will be there. But at the same time, the margin we are likely to gain because of the B2C transformation that will offset our risk in this area. With this, I would like to thank you for your hearing, as well as your support. Thank you so much.

Thank you, Bhupen. I'll be covering the specialty chemical manufacturing platform, wherein I'll be throwing some color on the current specialty chemicals market in India and how UPL is uniquely positioned to capture on those opportunities. Then I'll cover on how have we performed on last few years on this platform and the performance for this year. The guidance for FY '24. And then, of course, I'll be covering the performance of UPL as a group on safety and environmental sustainability for FY '23. So if you look at Indian specialty chemicals market, it has actually tripled in last 10 years. So from INR 53 billion to now almost INR 150 billion. And if we see the growth going forward, we anticipate that Indian specialty chemical market will grow at double digit at around 11% as compared to China of about 7% and then the other geography in lower single digit. This puts an immense opportunity in India. One is that, of course, also coming out of China plus 1 policy framework, which many companies are looking at India as 1 additional source in addition to China. This whole Make in India policy of Government of India, has given a boost to the spec chem market, which includes pharma and pharma intermediate as well, which our business also serves in. And going forward, more than 20% of the incremental demand or incremental chemical consumption worldwide will come from India. And that actually is a big number, which will catapult into investments in India in spec chem. And of course, changing consumer preferences, now consumer would -- is preferring bio and therefore, the bio-related chemistries and the investment would also be good in India. So how are we uniquely positioned to capitalize on these opportunities? Today, we are the #1 spec chem company in India with revenue of over INR 15,000 crores. We are -- I think very few are deeply and vertically integrated spec chem manufacturing company in India, which gives us cost competitiveness. We have a legacy of 50-plus years of manufacturing, handling hazardous chemicals and complicated chemistries with the best-in-class ESG metrics. What I also see is that we have immense opportunity on B2B side going forward. Now if you have China plus 1, we have new -- newer chemistries. We have the vertical integration, the history, which will give us immense opportunity in B2B segment. And of course, we have the UPL group companies, which -- the whole ag chem business will grow in double digit, which will also grow -- give us the opportunity to cater to those requirements. So this is how we have performed in last 3 years. Today, our -- in FY '23, our revenue has been more than INR 17,000 crores and our EBITDA has been more than INR 1,800 crores, which is around 10%. And our compounded annual growth rate for revenue has been 33% and EBITDA has been more than 40%. So basically, this platform serves to our global crop production business. And of course, UPL SAS. It also serves to more than 600 B2B customers, not only in India but across the globe, right, from pharma to paints, intermediate and other sectors and of course, ag chem. We -- last 50 years shows that we have been handling complex chemistry. We recently also commissioned our new phosgene plant. So phosgenation, we were always there for the last 25 years. But now we have our own phosgene plant and therefore, we have entered that chemistry as well. We have more than 15 plants in India, which makes not only ag tech but also intermediates and basic chemicals and specialty chemicals. And as I said, highly vertically integrated and a great legacy of last 50 years. So the outlook for FY '24, we expect that our revenue would grow in the range of 10% to 14% and our EBITDA will grow 12% to 16%. Of course, we are entering new chemistry, our B2B business, we are looking to expand. We will keep on [ sweating ] our current assets, keep on expanding them but also expand our new off-patented molecules, which our Global Crop Protection business would enter as part of a GTM. And that will also will get served. And lastly, I'll cover the safety and the sustainability performance for the company. So you can see that our process safety incidents over last few years have come down dramatically. And this year, our TRFR has been 0.29 as compared to last year of 0.21. Three major areas where we have focused last year, on our people and our process safety. What we did is that we identified key critical process safety operations, and we mitigated those with a layer of production analysis. And also with the [indiscernible] we used digital as a tool for not only people safety but also asset. For example, we used artificial intelligence and robotics to a great level to be able to mitigate some of the risk emanating out of PPEs and also man machine interfaces. And we onboarded external consultant for the safety transformation journey, which I spoke last year, which commenced last year. On hazardous chemical transportation management, which we focused last year, now all our hazardous chemical transportation is managed through a central control room, which is out of Baroda and all our trucks and tankers are GPS controlled and their speeds and where they stop, everything gets monitored. And lastly, on the -- we also focused last year on the -- on our warehouse management, from a safety point of view. And we completed the baseline audit for our all global warehouses. We have onboarded external consultant to help us on the safety process management on our warehousing assessments. And we have also rolled out the crisis management plan for India and we are at an advanced stage for rolling out the crisis management plan for North America and LatAm. On environmental piece, which is on the environmental sustainability, this is the performance over the last 4 years, our CO2 emissions have gone down by 22%. Our freshwater consumption has gone down by 41% and our wastewater discharge has gone down by almost 60%. We have -- our science-based targets has been approved and we have targeted to reduce 63% of CO2 by 2035. We have commenced tracking the Scope 3 emissions and we target to reduce them by 42% by 2035. We have partnered with CleanMax and we have invested on green energy. And this year, we should be able to take our green energy share or green power share from 8% in your company to more than 30%. And one of the significant number is that we have been able to recycle more than 1 million meter cube of wastewater into -- back into our process which is almost equivalent to 90% of our total freshwater requirement in our operations. So thank you from my side. Anand.

Thanks, everyone, for your patience. And I think I will come to the last slide, which is the guidance for the company. Before I go there, I think I would like to thank the business heads, Mike, Ashish, Bhupen and Raj for providing us excellent insight into the business, their performance -- financial performance for the year and at the same time, the financial outlook for the following year. And of course, thanks to Jai, for giving us a good view -- overview of where the industry is headed and his vision of where he sees UPL. Giving the guidance for the full year, based on what we have seen guidance given by each of the platform, we believe that for this year FY '24, we should be having a revenue growth of about 6% to 10%. EBITDA growth of about 8% to 12%, and we see improving ROCE by about 125 to 175 bps to about 16.5% to 17%. However, I would also like to state here that some of the headwinds, which Mike talked about and Ashish also spoke about, in terms of post-patent products, we do see some challenges in the initial first 2 quarters but we remain confident of delivering our guidance for the full year. With this, I would like -- and of course, as Jai mentioned, we'll also look at generating higher cash flows, as we see that, that's the key in -- especially when we are seeing very volatile environment, both in terms of markets and at the same time in terms of geopolitical situations. With this, thank you very much once again for joining us today. And please join us for high tea -- sorry, we have the Q&A session and then join us for the high tea. [Break]

So thank you very much. We're happy to...

Hi. Good evening. Am I audible? Name is Tarang Agrawal, I'm from Old Bridge Capital. A couple of questions from me. One, if I look at Q4, it seems like there's some sort of -- I mean, for the lack of a better word, probably a blood bath out there because seeing 52%, 53%, [ GC ] is going down to about 40%, gives a sense that almost a 20% to 25% hit on realizations. So if you could give us some instances and while you've mentioned that in H1 [Technical Difficulty]

Yes. So if we -- I'll just repeat the question that I think we heard just in terms of what created the margin compression in a bit more details in Q4, in particular.

Yes. And how do [Technical Difficulty]

Yes. And how do we see it going forward? So look, I'll start from a Global Crop Protection standpoint. When you look at the margins, there were several factors that went into the margin compression in Q4. Firstly, we did overall sell at a lower average selling price. Price was down about 3% in the quarter. So there was some compression due to selling price. Now on a go-forward basis, we also expect our cost of goods to also get adjusted. And so while we'll see price compression in the post-patent segment, we shouldn't necessarily, other than in glufosinate, see very much margin compression. Now compounding the impact in Q4 was the fact that we did idle capacity to manage working capital. So there was some costs that we took through the income statement as a result of lowering our production and managing down our inventory. And then finally, we also liquidated some high-priced or high-cost inventory. So we really looked at the year -- the end of the year to make sure that we could take all of those actions to set up for FY '24, so that we could really compete going forward. So a lot of those actions won't repeat. We're going to run our plants. We're going to compete very hard in the post-patent segment. We will see some price compression but we won't see some of the other onetime costs that we took in margins in Q4.

Can you sort out that? Any other questions?

Yes, there's a couple back.

I am Ramesh from Nirmal Bang, institutional equities. So following up on the question he asked, typically in commodities, you have this problem in the top -- the revenue falls and your [indiscernible] margin falls and you have a problem. So can you break it into how much of inventory loss you have taken and what is the reduction in production, which you referred to in terms of having to incur fixed costs because of the operating rate coming from commodity manufacturers. And then, if you look at the next 6 months, what is the inventory you're still carrying? And a related thought would be, now if you say China has come back vociferously in the second half of the fourth quarter and if you see the kind of numbers we see on terms of Chinese capacity addition, do we see the issue of Chinese competition genuinely awaiting sometime in FY '24 because you're saying that in the second half, you'll see improvement. So if you can just give your thoughts on these 3 aspects, will be great.

All right. I -- we got some of that. Sorry, for the audio problems. Let's see if we can get that fixed. There's a number of mics up here. So if we want to use some of these mics up here for the audience, let's try that. So one of the questions was, what was the specific cost of idling capacity. That cost was in the range of INR 200 crores to INR 250 crores. And again, we wouldn't expect that to repeat going forward. The Chinese production, look, I would say on certain active ingredients, including glufosinate, which is 1 of our top 5 active ingredients, today, there's -- they're running capacity and there's probably over overcapacity for that active ingredient. And so they're liquidating, we believe they're liquidating at less than their fully loaded cost of goods. So that won't persist into the mid- to long term, but we could see this take, I would say, a quarter or 2 to flush out till we get to a more normal operating margin. So it's hard for us to predict exactly the margins that are going to come out of China but the current prices won't persist into the mid or long term because they're not even covering their fully loaded cost at this point.

What about [Technical Difficulty] and the excess inventory, can you [Technical Difficulty]

Yes. So again, from a idling standpoint, the cost was INR 250 crores. I would say the variance based on selling out the high-cost inventory and other variances in the quarter was probably about half of that total. So in the range of, say, INR 300 to INR 350 crores in total.

[indiscernible]

No, I think in the industry, we are in a good position and the reason was the raw material prices were coming down a lot -- all the raw material prices have come down substantially. Just the natural gas prices are down 60%, 70% in India. So a lot of the raw material prices have come down. So we are in a good position now because we are probably the same level of inventory as last year. So this is probably the lowest we can get to. So it could be something but not a major impact.

This is Vishnu from Spark Capital. I have a few questions. On the guidance slide, we probably thought there's one more line item we probably was anticipating. Any thoughts on the debt reduction that if we can get?

Can you repeat this? Can you fix this system, please?

Yes, Vishnu, thanks. Vishnu, we -- as you know, we're at this stage with the net debt-to-EBITDA of 1.5x, which we have brought it down from almost 4x. I think we feel fairly comfortable. Hello? Yes. However, we would -- whatever cash we generate during the year, if we -- we will use that to repay the debt, besides, of course, investing in working capital as well as the CapExes. Our CapEx guidance is roughly about [ $350 million ] for this year. And the rest, whatever cash we generate, we will use it to repay the debt.

In general, over the next 3 years, I mean, if there's a number that you want to kind of get on the debt side, beyond which probably you look at again investing back into the business, what is the number that we feel that, okay, we have kind of reached a very good number, so we start investing back a lot into the business again. Where would that number be?

No. As I said, at this levels also, we are comfortable. Our 1 -- net debt-to-EBITDA 1:1 is something which we will strive to reach towards. But we will continue to invest. As you know, we grow at much faster pace and for that, we continue to invest. Of course, we focus on profitability and which we will continue to do it. So I mean, if you want -- I mean, want a specific number net debt-to-EBITDA 1x, would be a comfortable position to do to do with -- to be in. But at 1.5x also we -- because our cost of debt is fairly low. As you see, most of our debt is unsecured. The risk profile is extremely low and most of that is tenured with a complete flexibility of prepaying whenever we wish to because the bonds, of course, are fixed tenured but the bank loans are all -- we can repay them by giving a 1-month notice.

Understood. In one of the slides we mentioned, $8.5 billion of an opportunity where by FY '27, we think we can address $2.5 billion worth of opportunity. How much of this is something that we can capture? Is it like a 10%, 15% of this $2.5 billion is something that we can capture? What percentage that we can realistically achieve? And also, what is it that we are doing differently to get this opportunity versus the other players who are also competing for this?

Yes. So as we mentioned in the presentation, through '27, we would anticipate $2.5 billion of new product revenue and based on the pipeline over $8 billion. Those numbers are risk-adjusted for, I'd say, technical risk but not necessarily for market risk. Now 80% of our pipeline, both in the near term and long term are in the differentiated and post-patent segment which traditionally has margins north of 40%. So that should be the value capture on the differentiated and sustainable products within that portfolio. So -- that's how we would think about the value piece on a go-forward basis through our new product pipeline. What are we doing different? Look, today, about 85% of all of the active ingredients that are sold globally are post patent. And what growers have realized is if they only use a single mode of action, whether it's for weeds or disease or insects, it doesn't take long for resistance to build up. And so what we're doing uniquely through our Thane R&D center, where we're, I think, the world leaders in developing new formulations of double or triple mix products, we are innovating with high-quality formulations. We're using our IP team to ensure that we've got patents on new mixtures that we can bring into the marketplace. And we're doing that at scale and speed and we're testing it through our global testing network so that when we launch those products, like we did this year and we saw $140 million of new revenue from our new products is because we've prepared the market. We worked closely with farmers. We've tested the formulations. And so when we get full approvals, we can ramp up quickly. So that's our strategy and I would say we're executing it very well.

So if I get it right, by '27 and if everything goes right for you, then $2.5 billion will be the incremental revenue for us. It is not as an opportunity, it is actual revenue, we think we'll get.

Yes. So not a 100% of that will be incremental. Some of that will be mixtures with glufosinate, with [indiscernible] with Clethodim, with some of our other products today, Mancozeb and so some of it will be truly incremental but some of it will cannibalize our current portfolio of [ straight ] goods as well.

This is Rohit Nagraj from Centrum Broking. Yes. So 2 questions. One is in terms of retrospective. So what did China do in the last 4 months after opening up that we being the largest post-patent player, we're also not able to anticipate it. And there was a serious issue for the global market. And why do we think that it will not recur in future?

No, I think there are 2, 3 things. One, particularly in the U.S., the season was a bit late. So there is a delay in the season. It was a very cold, long winter. Planting is delayed. So that's one. The end of December, a lot of the companies stocked because that's their year-end, they stocked up the market. So the channels are quite fully loaded. In the meantime, all the raw material prices started coming down. So there is -- everybody is delaying buying decisions. This is not unusual. This happens every now and then that they delay buying decisions. So when they see -- before the prices reduction, they postpone it. So a little bit all that and then they see the price going on. So this can happen. This is not unusual. Commodity prices are strong. We have good market reach. We don't think we'll lose market share as a company. So it should not be -- this can happen when some of these things are off track. But there is -- we believe some of the products are below cost. And so how long will that last is anybody's guess. It shouldn't last too long.

Sure. Second question is on the manufacturing platform. So this is right now only catering to the Global Crop Protection manufacturing and the UPL SAS? Or is it also catering to any external customers? And given that it is a specialty chemical company, what we have said, why the margins are so low at, say, 9% or 10%.

Yes. So of course, we cater to everyone. So we manufacture for UPL, the crop protection side of the business and India, that's majority of the business. We also cater to the other global players. We have a contract to supply at cost plus basis. And so it's at a fixed margin, it's a fixed business. The other industrial business is at normal 20%, 25% EBITDA margin, that as it is growing, you will see the impact of that. It's a small business, still probably at 15% or so or maybe 10%, 12% of the current revenue. But as it grows, the margin will change.

Just one clarification. So 100% of manufacturing for our group is housed in the manufacturing or specialty chemicals platform?

Not 100% but all the -- whatever we make is sold globally through that platform, if it's a crop protection product.

This is Krishan from JM Financial. So I have like a couple of clarifications. So first is on the growth guidance that you have given for the UPL Group is around 8% to 12% EBITDA growth. But if I look at the UPL Corp EBITDA growth guidance, it's around 6% to 10%. So we understand that UPL Corp is about 80%, 85% of that UPL Group EBITDA, right? So what am I missing? So that's question #1.

Well, we have done the maths and that's why we've given the range. So we are quite confident of delivering. If you do on the EBITDA side, we would hover around 13% based on what the guidances you saw. But when we give a range that -- we have given a range of 12% to 14% in EBITDA -- 8% to 12% in EBITDA. So we are pretty much there. And in case of revenues, we have given a range of 6% to 10%. So we do believe that, that should be delivered.

Okay. And so I think Rohit asked about the spec chem margins. But I just want to understand like how are you trying to reduce that 85% kind of a concentration, which you have supplying the spec chem to UPL SAS and UPL Corp. So what's the strategy there?

Can you repeat the question? I think...

Sure. So what I'm highlighting is that on the spec chem platform, specialty chemical platform that you mentioned, 85% is to the UPL group, right, UPL Corp and UPL SAS. So how are you trying to reduce that concentration from 85%? And what is the kind of concentration that you'd be comfortable with?

Yes. So I mean, that business was nonexistent 3 years ago and it's about 15%. It's growing much faster than usual, the regular business. So -- and all the investments we have made in the last 24 months, which will start giving results. So that segment over the next 5 years will be much bigger than it is probably 35%, 40% of the business with whatever growth comes.

Understood. And one clarification. On the inventory days or rather the inventory number that I look in the press release and that I look in the PPT, so there is some difference. So what is that? I mean, I just want to understand that.

Inventory days, sorry, your question is.

Or rather the tread receivables, if I just can give you the number, trade receivables in the press release is about INR 182 billion and in the presentation, it is INR 149 billion, with a note that receivables sold were INR 115 billion. So just want to understand what is the difference, where is the difference coming from?

We can take it offline, if you don't mind because it's a concern, we can give it to you.

No worries, no worries. Thank you so much for the opportunity and best of luck.

Hi, Anand. This side, sir. Sir, Rahul Veera from Abacus. Just trying to understand in terms of the hierarchy of ROCEs between UPL Corp, UPL SAS, Advanta and specialty manufacturing, who will be the leading segments within your view? Sir, wanted to understand the hierarchy of ROCE-wise, segment-wise for each UPL Corp, UPL SAS, Advanta and specialty chemicals.

I mean, I can -- I'm not 100% sure of the numbers. ballpark, I think primarily because of the long payment cycles in Brazil, the crop protection global business has probably the lowest one. Advanta and UPL SAS and the specialty chemicals is much higher in the late 20s or 30%.

Sure. And also the net debt of $2 billion, largely due to sitting in UPL Corp?

All of it is there, yes.

[indiscernible]. Can you hear me? Yes. I just have 2, 3 specific questions. First is, so we have kind of realigned the structure and now we have 4 different platforms. And each seems to be doing quite good in terms of the momentum in the business, our positioning in each of that. If we have to look at the next 3 to 4 years, how should we look at -- I mean, how are you looking at in terms of monetization or the structure there of for each of those businesses? And in that the overall.

I think the original idea, there are 2 main purposes of separating them out. All the businesses are leaders in its own sector. So if you look at Advanta, the specialty chemicals or the India, SAS business, all of them are #1 in its own ways and all have very good opportunities to grow. And the idea was to really test the hypothesis through value discovery. And so we talked to some of the private equity leading brands to come in and there was a lot of interest. So we brought the first level of investment, primarily to bring value discovery. These businesses will continue to outpace growth of the -- their sectors. And the opportunities, as you know, are about 5 or 6 things we can do with it. And right now, we are just concentrating on focusing on growing those businesses at the best possible rate. And then when the time comes, obviously, we will figure out what to do. But the obvious opportunities will be there.