UPL Limited (512070) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the UPL Limited Q1 FY 2027 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anurag Gupta. Thank you, and over to you, sir.

Thank you, [ Adira ]. Good afternoon, everyone. On behalf of the UPL management team, I thank you for joining us today for discussing the financial performance for the first quarter of FY '27. The investor presentation, press release and the financial statements have been made available on the exchanges and our website. And we take it that you have read the safe harbor statement. From the management team, we have with us today, Group Chief Financial Officer, Bikash Prasad; CEO of Global Crop Protection business, Mike Frank; CEO of India Crop Protection Platform, Ravi Cherukuri; CEO of Seeds business Advanta, Bhupen; CEO of Specialty Chemistries platform, Superform, Raj Tiwari, and other members of the leadership team. In this earnings call, Bikash will take us through the overall performance for UPL Limited for the first quarter FY '27. This will be followed by Mike, who will share his detailed remarks on UPL Corporation, followed by Bikash again. We will have a Q&A session post that. We would also like to share a brief update with you upon conclusion of the Q&A session, and would be grateful if you could stay connected for a few more minutes thereafter. With that, I now hand it over to Bikash. Bikash, over to you.

Thank you, Anurag. Good evening, everyone, and a very warm welcome to UPL's First Quarter FY '27 Earnings Call. Thank you for taking the time to join us today. I'm pleased to share that UPL has delivered on its quarterly guidance with a resilient performance despite a demanding macro environment. This marks our seventh consecutive quarter of revenue and EBITDA growth. Further, this is also our strongest and positive first quarter in terms of net income, that is PATMI, in the past 3 years. It was a quarter of disciplined, high-quality execution that extends our track record of profitable growth into FY '27 and does so with further improvement in our gearing ratios. As a team, we have stayed focused on the fundamentals, that is executing with discipline, maintaining robust governance and building momentum for sustainable value creation over the medium to long term. Over the past year, we have sharpened our focus on the quality of business, bottom line and on returns. That discipline is further evident in this quarter's results. In today's call, we'll take you through the key financial and strategic highlights of the quarter, offer some context on the drivers behind our performance and share our outlook for FY '27. Before I turn to the numbers, let me first touch upon the macro backdrop we navigated through during the quarter and a few important corporate updates. Coming first to the macroeconomic backdrop. The quarter played out against continued volatility and geopolitical uncertainties, including the ongoing conflict in West Asia. We navigated through the weather-led planting delays across India, U.S. and Europe and persistent farm income stress in several key geographies, yet the structural need for food security keeps feed and crop production firmly at the heart of agriculture. Encouragingly, demand for global crop protection remained resilient at the farm gate level as reflected in the continued stable grower consumption, while a stable sulfur eased our financing cost through the quarter. On the geopolitical front, the conflict in West Asia kept input costs and supply chain volatility elevated. We managed this proactively through diversified sourcing and index-linked contracts and saw no material impact on availability. On the weather, El Niño-led delays affected planting in parts of India and Europe, facing some demand into the latter quarters. My colleague, Mike, will speak on the Crop Protection impact in greater details. Moving on to a few important corporate updates for the quarter. I'm pleased to share the following: First, on the Advanta IPO, we received SEBI approval on the 3rd of June. This is a significant milestone in the value unlocking of our seeds and post-harvest business. As the process remains subject to regulatory time lines, we would like to restrict our comments on this matter. Second, on the reorganization of our Crop Protection business, I'm pleased to share that we received CCI approval on the 2nd of June, and no adverse observation letters from BSE and NSE on 29th of July. The reorganization process is formally on track towards a single focused global crop protection platform. This will leverage the synergies of our shared manufacturing, R&D and innovation capabilities. Third, on the ratings, CARE Edge upgraded UPL Limited long-term rating to CARE AA+ with a stable outlook from CARE AA. This is a strong endorsement of our strengthened credit profile, and it brings on the outlook upgrades we received from the 3 global rating agencies in FY '26. And finally, on sustainability, I'm excited to announce that we have retained our inclusion in the FTSE4Good index with an improved ESG score of 4.4. This reaffirms our standing amongst the leading sustainability performers in our sector. Coming now to our Q1 FY '27 performance overview. Revenue was INR 10,181 crores, up a robust 10%, led by 3% positive pricing and a favorable exchange impact, partially offset by a 3% decline in volumes. The volume softness was largely a function of severe weather-led delays and heat wave conditions in Europe, along with overall volume pressure in Latin America. This was, however, offset by a strong volume growth in our seeds and super specialty chemicals business. Overall, our growth was broad-based across all platforms and all regions. Contribution rose 15% to INR 4,607 crores, with margin expanding 100 bps to 45.2%. Our focus on profitable growth is evident in this expanding margins, underpinned by decisive pricing actions and a favorable portfolio mix. Our Q1 EBITDA grew by 15% to INR 1,500 crores, broad-based across all platforms, with EBITDA margin improving by 60 bps to 14.7%. Profit before tax improved by around INR 80 crores versus last year. PATMI turned positive at INR 10 crores, up from a negative INR 88 crores, and operational PATMI turned positive at INR 19 crores, up from a negative INR 78 crores. This turnaround is the first in 3 years. Key drivers for this improvement include a lower net finance cost and a favorable net exchange difference. These gains were partially offset by planned higher depreciation and higher losses in our joint ventures and associates this quarter. Importantly, as we have consistently demonstrated over the past year, this improvement is structural rather than one-off. It is anchored in sustainable contribution and EBITDA margin expansion and supported by focused financial discipline. Let me now walk you through the results summary. Overall, our growth was broad-based across all regions, wherein North America grew 18%, led by herbicide volumes such as [indiscernible], alongside fungicide volume, solid post-harvest growth and [indiscernible] business, a niche, but consistently well-performing asset for us in this region. India grew 15% as higher pricing offset delayed monsoon-related volume challenges in Crop Protection. This was complemented by strong volumes in seeds, notably, field corn and in super specialty chemicals. Latin America was up 8%, led by Brazil. Argentina witnessed crop protection challenges that were partially offset by sunflower seeds. Europe was up by 4%, with favorable currency and disciplined pricing cushioning, weather-led volume softness, most notably in herbicides. And finally, rest of the world grew 7%, led by a robust performance in Indonesia, across Crop Protection and field corn and supported by South Asia. Turning now to platform-wise performance. UPL Corp, our global Crop Protection business, grew revenue by 7% to INR 6,374 crores, EBITDA was up a strong 38% to INR 532 crores, and EBITDA margin expanded by 190 bps. This was led by an improved product and regional mix, lower ECL and favorable currency movement. My colleague, Mike, will cover this in detail shortly. UPL SAS, our India Crop Protection business, had slight revenue growth with a strong pricing offset by delayed monsoon-led lower volumes. I am, however, pleased with the significant improvement in the platform's profitability. EBITDA was up 34% and margin expanded by around 750 basis points, driven by improved product mix and a sharper focus on business quality, including a higher focus on our new brands such as Centurion EZ, Canora EZ, Brucia and Harmetry. Advanta, our seeds and post-harvest platform, delivered a strong start to FY '27, with 26% revenue growth in Q1 and 24% EBITDA growth, underpinned by disciplined commercial execution, early-season channel placement and our diversified global portfolio. Growth was led by corn in India, Latin America and Indonesia, supported by a rise in India and a strong start to the foam and potato in the U.S. postharvest business. We continue to gain market share in strategic geographies despite the challenging El Niño environment. And Superform, a 100% owned subsidiary of UPL Limited, and manufacturing and super specialty chemicals arm, grew 14% with our Specialty Chemicals business up a striking 51%, driven by 17% volume growth and 34% price growth. This was primarily led by the lubricant segment, among others. EBITDA was up by 7%, with the margin reflecting our planned future growth-related spending. In short, as you can see, our businesses remained resilient in this quarter despite multiple challenges, from West Asia conflict-led disruptions and inflated cost challenges impacting our Superform and specialty chemical business, to El Niño-related impact on seeds and part of global crop protection, to delayed and unfavorable weather conditions in India and Europe, we have overcome all. This was through our agile response, that is diversified sourcing and renegotiated supplier terms, backward integration capability and ability to push up pricing in key markets, leading to our delivering on our guidance in a strong manner. Coming now to the balance sheet and liquidity. On debt, I would like to provide you all with a comfort by sharing that a significant improvement in our gearing ratios from last year has continued into this quarter, and we remain firmly on track towards our medium-term target of less than 1.5x net debt to EBITDA. In Q1, we reduced our gross debt by over $100 million, from $3.1 billion to $3 billion, despite absorbing a large seasonal working capital buildup. This reduction is a direct outcome of our disciplined capital management and sustained focus on deleveraging. Net debt in U.S. dollar terms, however, was flat year-on-year due to our planned additional CapEx and strategic investments. The reported rupee increase in debt figures are entirely due to currency translation effects, with the rupee depreciating from around 86% to nearly 95% against the dollar. Q1 versus Q1, since exchange rates have not moved materially since March, we have not presented a separate dollar balance sheet this quarter. Net working capital stood at 110 days, up around 24 days versus last June. Within this, inventory rose around 13 days, reflecting lower Q1 volumes, higher replacement input costs and build up ahead of the Q2 season in seeds and [ agchem ]. Receivable days rose by around 12 days on lower Crop Protection sales in Europe and delayed India seed season. Our payable days were broadly flat. Our gearing ratios remained comfortably within our target range, with net debt-to-EBITDA improving to 2.4x from 2.6x, and net debt-to-equity broadly stable at 0.6x. Our deleveraging trajectory remains fully intact. With that, I hand over to Mike, who will take you through the details of UPL Corp. Mike, over to you.

Thank you, Bikash, and hello, everyone, and welcome to our FY '27 first quarter earnings call. Before we review the quarter, I'd like to start by providing my thoughts on the global crop protection market. Over the past several quarters, the agchem industry has faced a complex and rapidly changing landscape with heightened volatility across global agricultural markets, driven by shifting geopolitics, changing trade flows, weather-related uncertainty and ongoing pressure on farm economics. Although commodity prices have shown signs of stabilization and even some recovery lately, underlying grower profitability remains under pressure, with expenses continuing to rise relative to farm income. So we are operating cautiously and taking a disciplined and value-focused approach to all their purchasing decisions. Geopolitical developments and evolving trade dynamics continue to reshape global supply chains. As markets become more complex, supply chain resilience, sourcing flexibility and regulatory efficiency are becoming increasingly important drivers of sustainable long-term growth. And at the same time, changing crop patterns, growth in biofuel demand and continued innovation in crop protection, seeds and biologicals are creating new opportunities and reshaping the industry. While the current environment presents some near-term challenges, the market continues to reward innovation, sustainability and strong customer partnerships, areas where we believe UPL is well positioned. Our Q1 performance reflects these strengths, highlighting the resilience of our portfolio, the benefits of our diversified regional footprint and the value created through our continued focus on operational excellence. So turning to our Q1 performance for UPL Corp., our International Crop Protection business. Despite a challenging macroeconomic backdrop, in Q1, our revenue grew by 7% compared to the same quarter last year. While certain markets continue to face weather-related disruption, pricing pressure and softer demand, these headwinds were offset by growth in key markets and strong demand for our products. Our business model continues to help mitigate external volatility and positions us well to capture growth opportunities as market conditions improve. So looking at the performance of our portfolio, our herbicide portfolio was impacted by reduction in sugar beet area in Europe by approximately 7% as well as increased weather stress across Europe and parts of Southeast Asia during the quarter, which affected application timing and demand. Despite these headwinds, key molecules such as S-metolachlor and propenyl delivered stable performance, particularly in North America. Our fungicides business delivered a resilient and stable performance during the quarter, with strong growth in [ mancos ] across North America and Asia Pacific geographies, supported by [ teconizol ] in Europe. While dry weather conditions in Europe limited fungicide applications and impacted market demand, the strength of our core portfolio helped sustain overall performance. Our insecticides portfolio continued to perform strongly, led by our acetate-based brands for [ OCI ] and [ Pareto ] in Brazil's sucking pest segment. Together, these brands reinforce our leadership in this segment and support growers with a comprehensive portfolio throughout the crop cycle. We also saw strong demand in the chewing pest segment, where recent product launches of new technologies, brands such as Propose and Constel in Brazil, have achieved rapid adoption by growers outperforming our initial expectations. Their continued success supports our long-term growth strategy, strengthens our portfolio differentiation and reinforces our commitment to empowering growers with innovation and effective solutions. Our sustainable solutions portfolio delivered a mixed performance this quarter, with strong growth in several strategic segments and geographies that were partially offset by the record dry and hot conditions in Europe, which impacted our sales in that region. From a regional perspective, our natural plant protection business recorded growth in Latin America, Asia Pacific and the Africa regions. We continue to see growing adoption of biologicals and differentiated natural solutions among growers who are increasingly seeking sustainable and effective cost management tools. Our recent successful launches of NPP brands, [ Nutrio ] and [ Nuvita ], across most geographies gives us confidence that we will deliver on our commitment of generating approximately $700 million in revenue for the full year from our sustainable solutions portfolio. Overall, our contribution margins expanded to 38.2%, growing nearly 350 basis points compared to the same quarter last year. This was mainly driven by better mix, strategic pricing, lower input cost and higher capacity utilization. While most of the industry is reporting lower pricing, our proactive pricing approach in response to the Middle East conflict made us an outlier this quarter. Turning to SG&A. We continue to maintain a disciplined approach to our discretionary spend while investing in strategic initiatives. We are leveraging advanced technologies and digital tools to streamline operations and strengthen our operating model while advancing our enterprise-wide transformation. Finally, our EBITDA grew 38% in the quarter, with margins expanding nearly 200 basis points compared to the same period last year. This encouraging result that marks our seventh consecutive quarter of EBITDA growth, highlighting the resilience of our business model and our ability to drive growth despite a challenging market environment. Let us now review the performance of our regions. Our regional performance this quarter demonstrates the value of our diversified geographic footprint, enabling us to capture growth opportunities across markets while navigating regional headwinds. LATAM posted 5% higher revenue this quarter. This growth was primarily driven by strong performance in Brazil, particularly in herbicides and insecticides, and was partially offset by softer market conditions, specifically in Colombia and Argentina. Positive currency movements helped mitigate the impact of pricing pressure in this region. Our business in North America delivered a strong quarter with 11% revenue growth. This performance was driven by disciplined commercial execution and strong demand for our herbicide and fungicide portfolio. growth was led by products such as S-metolachlor, mancozeb and propenyl. Europe recorded a 2% growth in revenue. Our European business remained resilient despite challenging heat wave conditions that affected timing and demand in certain markets. Portfolio strength, pricing discipline and commercial excellence enabled us to maintain stable performance during the quarter. The region benefited from growth in key products such as [ clethodim, fazer, tebuconazole ], alongside capable currency impacts. Focused market engagement help mitigate weather-related disruptions, supporting overall stability. In Africa and Asia Pacific geographies, they continue to deliver solid growth across key markets such as Indonesia and South Africa, overall, posting 8% revenue growth in these regions. The strong performance in these geographies was primarily driven by our fungicide portfolio. Finally, for our working capital, we remain firmly committed to disciplined cash management and operational efficiency. We continue to actively optimize inventories, receivables and payables to maintain industry-leading working capital efficiency. Finally, turning to our full year outlook. Building on our Q1 momentum, we remain fully confident in delivering a strong second quarter and meeting our full year commitments. We expect a strong volume-led quarter, supported by in-season demand for our products in key markets and higher revenues from our new product launches. We will continue to drive our operational excellence agenda across the business. During the quarter, we made further progress on our advanced planning system initiative, which is focused on enhancing our demand planning capabilities and helping us deliver better service levels and responsiveness to our customers. On the marketing excellence front, we will continue to accelerate the commercialization of new products and innovation and growth opportunities. I'm pleased to report that we are on track to achieve our $115 million in revenue from new product launches this year. These priorities remain fully aligned with our FY '27 strategy and position us for both near-term performance and long-term value creation for our stakeholders. In closing, I'd like to thank our team for their commitment and our channel customers for their partnership. With this momentum, I'm confident we will deliver another strong year and create long-term value for all of our stakeholders. Thank you. And with that, I'll now hand over to Bikash, who will summarize the group's performance before we open for Q&A. Bikash?

Thank you, Mike. Before I close, let me summarize the quarter. UPL has delivered on its guidance with a strong performance despite challenging involvement. As I stated earlier, this is our seventh consecutive quarter of revenue and EBITDA growth and our strongest first quarter net income in past 3 years. Further, we also improved on gearing ratios on a year-on-year basis. Overall, this reflects the resilience of our integrated platforms, the discipline in our execution and improving quality of our earnings. This is the foundation that underpins our confidence for the rest of the year. We are, therefore, guiding for a full year revenue growth of 7% to 11% and EBITDA growth of 10% to 14% for FY 2027. With a proven track record of meeting and often beating our guidance targets, we fully expect this to continue in this year. However, given the continued uncertainties, driven by West Asia war and volatile weather conditions, including El Niño impact in key regions, we remain cautious on the outlook of the Agrochemicals segment, and we'll continue to closely monitor the same. We are confident of our resilient goal, led by our diversified geographical presence, backward integrated manufacturing facilities and focused innovation to help us navigate through the macro risks, including geopolitical uncertainties, weather trends, currency volatility and pricing pressure. Our priorities remain clear: accelerating profitable growth while continuing to deleverage. Finally, I would like to thank our team for their efforts, and our valuable stakeholders for their continued trust and support. I'm confident of delivering our commitments in FY 2027. Thank you, and I look forward to your questions. With this, we are now open for Q&A.

[Operator Instructions] The first question is from the line of Saurabh Jain from HSBC.

Congrats for a good set of performance in very challenging conditions. First question on the guidance. At the midpoint of your full year guidance, the implied 9-month revenue and EBITDA growth stands at 9% to 12%. And if I look at the 1Q, a large part of the delivery is because of the ForEx, which you gained about 10%. Now second half for FY '27. I would assume, if currency remains here where it is today, there would be limited opportunities from a ForEx view. So for the remaining -- remainder of the 9 months of FY '27, can you split out your guidance in terms of how you're looking at volumes and pricing in particular?

Yes. Thanks, Saurabh, for the question. You know that usually Q1 is our small quarter, almost 18%, 19% of revenue or full year revenue comes in Q1. This year, in Q1, despite all these macro challenges and -- volume growth has been decent in our seed spectral platform, our super specialty, with softness in India Crop Protection and the Global Crop Protection, although pricing brands was positive. Now when we share the outlook for the rest of the year, it's very difficult to predict FX. So for the rest of the quarters, we have considered like the constant currency. So whatever the currency rate is there for end of June, the same has been considered. We have not considered any appreciation or depreciation in the currency and basis that we have come up with the guidance. Now for the rest of the year, if you look at it, our seeds business will continue to grow. Our super specialty business, which has been growing not just for this quarter but for several quarters and will continue to grow for several years. We do not see a challenge in terms of the volume and the growth in its super specialty. The India business, obviously, the weather is uncertain. But if the rain is good, I think our Q2 will be strong, and the full year performance also for the India business will be strong. If not, if the weather is uncertain and we might not have a strong volume growth, but because of our focus on hyperscale brands, our innovation, our product mix, our margins will be much, much better in the India business. Our Global Crop Protection business, as Mike alluded to, for the rest of the year, our growth will be led by volume. So overall, I think we feel comfortable in giving this guidance of 7% to 11% for revenue and 10% to 14% for EBITDA. And you know that these are currently the uncertain times. We have been also been very, very cautious while giving this guidance.

Yes, that is helpful. But what is giving you the confidence in terms of volume recovery on the global CP business because I think that is the piece of your overall business, which is going to drive in a major way, your guidance. So 1Q was a bit of a disappointment in terms of volume for UPL. What is giving you the confidence in terms of volume recovery that you are forcing for the global CP business? And also, what would be your pricing assumptions for the full year?

Yes. Saurabh, I will just take the question first, and then I will hand it over to Mike. A few points I just want to tell you now, like say, the India business, we said that we don't want to compromise with our quality of the business. We want to remain focused on retaining and improving our margins. You have seen in the last 7 quarters, our contribution margins have improved. Our EBITDA margins have improved. And we don't want to -- we want to ensure that our margins are protected. So even in the India business, we have protected the margins by doing the necessary pricing action. The seeds and specialty is a similar trajectory. In the Crop Protection business, I think one of the things that we have done is that we don't want a repeat of FY '24 when the global prices reduced due to oversupply. And [ channel ] had a higher level of inventory. So we are also guiding our channel to be very, very cautious on building the inventory. So they should -- they are taking the inventory when needed in the farm. So that is the guidance that we have also been giving to the channel. So that's how we are seeing that the volume is lower, but I think it's also been very, very cautious. And overall, it will help us going forward. But with this, I will hand it over to Mike.

Yes. Thanks, Bikash, and Saurabh, thank you for the question. So as we talked about earlier, we've been quite proactive in our pricing approach. As we saw the conflict in the Middle East increased our cost of goods, especially on energy-intensive products, we were proactive in pricing that into the marketplace, which, of course, resulted in strong margin expansion in Q1. As Bikash mentioned, Q1 is a very small quarter for us in our Global Crop Protection business. It's about 15% of our revenues. So we ramp up as the year unfolds. And while we do see both the channel and growers buying really close to the use season, I think, again, because of the conflict in the Middle East, because of some potential concerns about weather and El Niño, we are seeing the channel by just in time. We do though fully expect, as the year unfolds, the growers are going to use the crop protection products they need to produce a crop, and so we will see the global demand for the crop protection products that we're in the business of, flat to slightly up on a year-over-year basis. And as you know, over the last 24 months, we've been gaining market share in this market. And so we are driving to beat the market. And once again, for the year, drive for market share growth, which is what gives us confidence we will see volume growth on the year. And on the pricing and margin side, we've already adjusted our prices. We're now seeing many of our competitors also adjust up as they get into their mid-season. And so again, I think we're very competitive going into the rest of the year, which gives us confidence that our momentum will continue.

Okay. Great. That was useful. My second question is on the India SAS business. The EBITDA margins have been at about 30%, which seems to be quite in contrast with how the other domestic players in India deliver in terms of their margin range for the quarter. So is 30% kind of a margin range? Do you think it's sustainable for rest of the year? Is it like a structural shift of margin that is happening? Or is it just like a temporary one-off kind of margins?

So I'll request Ravi, if he's there on the line, to kindly take this question. Ravi, are you there? No, in that case, I'll request Bikash to kindly respond.

Guys, can you hear me?

Yes, Mr. Ravi. You may go ahead.

Yes. So no, so it's a great question. 29% growth in EBITDA is not structural. A part of it is structural, a part of it is because the price increases we took were not immediately because the cost flows in over time, but the price increase we take only happens at the beginning of the quarter. You cannot take it mid-season once you place some product already. So I would say a part of that EBITDA growth is structural because of the group improvement in portfolio and the improvement in profitability. But maybe about 8% to 10% of it is something which will normalize over time.

No, my question was on EBITDA margin. So are you saying this 30% margin will normalize to about 21%, 22% kind of a margin range on a structural basis? The margins have been reported at 30%.

I was talking about the EBITDA growth, but even the margins will normalize, but may not be by as much as you said. I would ask, Bikash, if he has a calculation to share the normalization expected in the margin. My response was to the EBITDA growth percentage.

Sure.

Yes. So Saurabh, if you look at the India Crop Protection business, so we have a seasonality in this business. Almost 65% of the revenue comes in the first half and 35% comes in the second half. However, the period cost flows through uniformly. You will typically will see that on -- in H1 basis, you will have a higher EBITDA, you will have a higher profitability. And in the H2, you will see a lower EBITDA, lower profitability. On a portfolio basis to look at it. Last year, I think we had ended at around, say, 15% of EBITDA margin for the India business. This year will be much higher than the last year, but 30% is clearly -- is the seasonality. So 2 factors. One is the seasonality because in Q1, our highest revenue comes in. Second, the pricing action that we took, while the inventories were all sitting at an older cost for Q1 and the pricing business took the pricing action ahead of the market, that really helps us to improve our margin in Q1. But this will normalize in Q2 and rest of the year.

Got it. I'll just complete by asking one question that the -- again, on the EBITDA margins for India business, FY '26 was about 17%. Now would you expect a 7% to 8% delta of margin improvement for the full year FY '27? Coming to about 25-odd percent or can it be lower?

I think it will be better than the last year, but it's difficult to comment now. We'll get back to you. But definitely, it will be higher than the last year largely because of our excellent performance on the hyper steel brands and the branding initiatives that we have. So it will be higher than -- materially higher than the last year.

[Operator Instructions] The next question is from the line of Rohit Nagraj from 360 ONE Capital.

So first question is in terms of LATAM. So there are indications that because of the earlier low-cost inventory, there has been a good amount of channel filling which has happened. So what is your perspective for the upcoming planting season for the sale? And I'll just squeeze in a second one as well. We have increased the prices, but again, crude has alleviated, input costs have alleviated. So are there any indications that the price reversal may happen in the times to come?

Mike, I'll request you to take that question, please.

Yes. Very good. So yes, thank you for the question. Look, I think depending on what part of the LATAM you're talking about, right now in Brazil, there's not a lot of planting going on. They're finalizing the harvest of their second corn season. And of course, planting season will begin in September, October for the new soybean crop. So this is the time of the year where the channel is starting to load for this upcoming season. Again, that gives us a lot of confidence. We know exactly kind of where our customers are at in terms of loading up for the next season. They've been, I would say, later to load this year. Again, I think everyone was watching what was happening in the Middle East from a conflict on a pricing standpoint. We are well positioned from an order book standpoint. So we are taking orders with our channel. And we're confident, again, that in Brazil, we'll see strong volume in Q2, Q3 and Q4 for us. And so that market is looking strong. As we talked about a little bit, Colombia and Argentina were off. Part of the Argentina situation for us, we're also focused on making sure that we're improving the quality of our business, and so we've we slowed and stopped doing some low-margin business in Argentina. So that part was intentional. We think the Colombia business will come back as the year unfolds. And so from a LATAM perspective, again, I think a little bit of Q1 was a timing. But again, it's a very small quarter for us. And so we've got a lot of play for as year unfolds. From a pricing perspective, again, we're actually seeing now the rest of the industry kind of catch up to the pricing moves that we started in late March, early April. And so if anything, we think that the industry is pushing prices up a little bit, again, in anticipation of the cost that every company is now seen. And so I think there's a very low probability that prices are going to decline. Again, we're talking about minor low single to mid-single-digit price increases. And so these are quite modest price increases, something that we would normally see in this industry on an annual basis. And so we're seeing those prices rise at this point in time. I don't think they're going to pull back as the year unfolds.

The next question is from the line of Surya Narayan Patra from PhillipCapital India Private Limited.

My first question is on the -- on a macro aspect. If you can talk about the likely implication that you would be thinking for your business because of the escalating Russia, Ukraine was that is -- you addressed the other 2, but if you can address this one also, that would be helpful.

Mike, I request you to kindly answer this question.

Yes. Well, look, I think when the Russia, Ukraine were first started, there was a significant impact on supply chains, on commodity prices, which have now, I think, abated to kind of a normal situation. So I believe even if the war were to end sometime soon, I don't -- I wouldn't anticipate a significant impact on the global grain trade or commodity prices. And I think the more recent impact of the Middle East war is what we're now dealing with from a supply chain reliability standpoint, from a cost of goods standpoint. So the ripples of the Iran war are now going through the industry. I think the Ukraine-Russia impact has really stabilized. And however, unfolds or whenever it unfolds, I don't see a large impact on our business in the Global Crop Protection industry.

Sure. Just if I can ask one more on the Superform. Can you just give for the quarter, let's say, what is the split now between the captive and the other? And what is the growth that we would have seen for the non-captive Superform business?

Yes. Thank you for the question. So that -- I mean it's not captive, it's what we call it as ag and super specialty. So ag this quarter is 71% of the total revenue, whereas super specialty is 29%. And if you remember -- if you remember end of the last financial year, ag was 74% and super specialty was the rest, right? So that is further -- the super specialty has further strengthened because of hyper growth in our specialty business in this quarter.

And forward in the next 3 to 4 years, we expect this mix to further change and move towards, like, say, 55-45, 55 ag and 45 super specialty.

Okay. If you can just extend your thought process about the non-ag business, sir. What is likely to drive this kind of change?

So we have been investing in a very niche technology platform. And those platforms are the ones which are driving the growth because as we go upstream, more value-added product in those platforms. For example, [ dilation ] or [indiscernible] or also on some of the key applications, whether in paint or in lubricant space or in flame retardants with -- backed with contracts are the ones which are -- will keep on driving the revenues.