UPL Capital Markets Day 2024

May 13, 2024

Radhika Arora :
Good evening, everyone. I am Radhika Arora, the Head of Investor Relations at UPL. On
behalf of the management team at UPL, I would like to welcome you all to the FY24 Capital
Markets Day.

Whether you are in the room or joining us through the webcast, I do believe the hours spent
with us today will be very valuable in understanding the strategic direction of the company.
You will get a chance to hear from and interact with the business leaders of the platforms.
So, with that in mind, I will get off the stage in just a bit, but just before that, a few logistical
pointers.

Firstly, there is a lot of information in today's presentation, and we want to make sure that
you hear it all before opening it up for the questions. The session will start with a
presentation by –

• Jai Shroff, Chairman and Group CEO

• Anand Vora, Group CFO
• Mike Frank, CEO of UPL Corporation, our International Crop Protection Platform
• Ashish Dobhal, CEO of UPL SAS, our India Crop Protection Platform
• Benjamin Marolda, Global CEO of Advanta Enterprises, our Global Seeds Platform
• Raj Tiwari, CEO of UPL Specialty Chemicals Limited.

Lastly, please make sure to check out the Safe Harbor Statement about the forward-looking
statements. So, with that, please silence your phones, sit back, and we start the
presentation. Let's welcome on stage our Chairman and Group CEO, Jai Shroff.

Jai Shroff :
Thank you, Radhika. Welcome, everyone. Pleasure to be here.

For UPL, this has been a very difficult year. And for the industry, it's been a very difficult
year, too. Particularly in the last 30 years or so of my very active involvement in the
business, I haven't seen two major markets which have had a big slowdown like we had this
time.

And in the past, we've been able to anticipate them better and react better. We have had
some setbacks in the past also. But anyway, hopefully this is behind us, and what doesn't kill
you makes you stronger. And we look forward to that.
Just running through the numbers for the last year, we had revenues of around INR 43,000
crore, which is lower by 20%; INR 5,500 crores of EBITDA, which is down 51%. Debt is up by
$600 million and working capital up by 22 days.

So, focus for the coming year and coming years is really to focus on profitable business,
which is focused on improving working capital. And I think the whole industry, as I talk to my
colleagues around the world, is focused on that. And I believe that we will see a dramatic
improvement.

At UPL, we will focus on growing our platforms, whether it's Advanta, Specialty Chemicals,
India Crop Protection, or the UPL Corporation as a global crop protection leader. Improving
cash flows and deleveraging the business and unlocking as much value as we can over the
next two or three years from the various platforms, which each individually are leaders in its
own space.

Looking at UPL Corporation, our global crop protection platform, we expect the Brazilian
market and the U.S. market to recover. And we will see some benefits there.

At SAS, the team is completely focused on launching so many new technologies and really
focusing on improving brand presence and cash flows.

On the seed business, Advanta is leading its way on the corn seed platforms in India. Today
there is a huge interest in different aspects of the seed business, which is biofuels, and we
see Advanta continue to gain market share there.

On Specialty Chemicals, we have the internal manufacturing platform and also the non-
captive business. UPL plans to invest and continue to grow and retain its position as one of
the largest Specialty Chemical companies in India.

Reimagining sustainability, it is the theme of the future and UPL is actively involved in
various platforms, whether it was COP28, or our NPP platform for agriculture, which is
growing, doing better, and part of so many value chains, whether it's sugarcane in India,
cocoa, sustainable rice in UP, and there's a lot of interest from the food companies to
transition to buying traceable food, which is more sustainable.

So, when we talk about sustainability, we are talking about our Zeba platform, which is to
reduce water, our Pronutiva platform, which is to really focus on soil health and crop
productivity. On the sugarcane project, which we can talk a little bit about, is already
engaged with a number of sugar mills in India to really improve the productivity of
sugarcane production and reduce water and fertilizer usage. And we believe that the impact
of this on the environment will be huge, but not only that, it will improve profitability for the
farmers.

And you can see the impact of that on a real-world basis in various places. Transitioning to
green impact, today we have 62 megawatts of green power, and we intend to, in the next
year, increase that significantly. We've already started production of green hydrogen, and
we continue to expand, growing our whole green chemistry platform. There is a huge
transition in Europe and in the US towards companies demanding green chemistry.
And we believe that UPL will lead the way in the specialty chemical sector. Thank you very
much, and I hand over to Anand.

Anand Vora :
Thanks, Jai.

Good afternoon to you all, and a warm welcome for joining us today. All of you know that
it's been a challenging year. Probably the most challenging year in recent times.

But to the credit of the leadership team, we look at it as an opportunity to restructure the
business and adapt to the market realities by right-sizing the organization and making it
future-ready through innovation, improving share of differentiated and sustainable
products, and moving our focus towards improving margins and operational cash flows.

With that, I'll start with the results for Q4. Talking about the Q4 results, we saw a sequential
improvement in performance versus Q3 led by recovery in volumes as well as in margins.

Our revenue for the quarter stood at Rs 14,078 crores, reflecting a decline of 15% versus
that of the last year. The decline was primarily due to lower prices, which fell by 15% year
on year. Of the 15% decline in prices, approximately 5% was on account of one-time
transitory impact of higher rates, excluding which the decline in price and revenue was
about 10%.

Having said that, volumes were in line with last year, which is quite positive and indicates
that demand is gradually improving. Recovery in volumes was largely led by continued
growth in our differentiated and sustainable portfolio, the share of which expanded by 7%
from 29% last year to 36% this year. Contribution margins continued to be impacted by the
transitory impact of higher rebates to support the channel partners and liquidation of high-
cost inventory.

Adjusted for these impacts, both our contribution and EBITDA margins were in line with
those of last year, as impact of lower realization was offset by improved product mix, lower
cost of goods and rationalization of overheads. This is quite encouraging and lends
confidence that our margin profile should improve in the coming financial year. The cost
optimization initiatives which we undertook in the first half of the year has paid off as we
were able to reduce our fixed overheads by 17% year on year in Q4.

This helped us to improve our EBITDA margins to be in line with last year, adjusted for the
twin transitory impact that we spoke about earlier. Our net finance costs declined by 4%
versus that of last year on account of reduced factoring. While overall tax charge was lower,
the effective tax rate looked significantly higher as we continued to pay taxes in some
geographies and at our manufacturing plants and seed platforms as we continued to
generate profits there.

The PBT was lower in line with the drop in contribution margins. Exceptional costs for the
quarter were higher at INR 106 crores versus INR 29 crores last year, mainly due to the one-
time severance cost as we restructured our business. Overall, we are pleased to say that the
quarter ended in profits.

Before moving on to the full year's performance, I would like to touch upon the continued
strong performance by our global seed platform, Advanta Enterprises, which reported a
robust 34% growth in revenue and 38% growth in EBITDA for Q4.

Now for the full year's financial results. As Jai highlighted earlier, this has been very
challenging and an unusual year for the industry as a whole.

The full year's revenue stood at Rs 43,098 crores, showing a 20% decline over that of the
previous year, impacted by industry-wide channel destocking and excessive pricing pressure
in the post-patent space, which was aggravated by the transitory high rebates extended in
Brazil, US and India to support our channel partners. Excluding these transitory rebates, the
decline in revenue was 15%, as against the reported 20%. While the destocking had a stark
impact in North America and Brazil, the rest of the world region bucked the trend and grew
9% in FY24, which is quite noteworthy amidst the ongoing industry downturn.

Adjusted for the transitory impact, our contribution margins were in line with last year. An
improved product mix in the form of a higher share of differentiated and sustainable
products, which stood at 35% this year versus 28% last year, coupled with higher
contribution from our seeds platform and a lower cost of goods offset the impact of lower
realization on an adjusted basis. Furthermore, through focused cost optimization measures,
we were able to reduce our fixed overheads by $150 million versus last year. Most of the
reduction in overheads, about $100 million, was structural in nature, and we should see the
benefit of that come by in this financial year also.

The balanced $50 million was on account of lower bonus payout this year due to the
business underperformance, which we are confident will be normalized in the current
financial year. As a result, the EBITDA margins adjusted for the transitory impact is lower by
2% in FY24 as against the reported 8% margin decline.

Moving on to the items below the EBITDA, our net finance costs increased by 10% year-on-
year, mainly due to the rise in benchmark interest rates on borrowings and an increase in
quantum of debt. Overall, the average cost of debt for the year stood at around 7% per
annum.

The exchange loss for the year stood at INR 1,290 crores versus INR 777 crores last year.
This increase was due to devaluation in currency in certain markets, such as Argentina,
Russia and Turkey, where hedging is either not possible or is economically unviable.

The steep devaluation in Argentine peso by almost 300% had an impact of about INR 471
crores, of which INR 256 crores was just an impact on a single day when the currency was
devalued around 100%. Overall, we reported a net loss of INR 1,200 crores for the year. This
was pretty much in line with what we had guided for at the end of Q3.
Moving on to working capital, we saw an increase by 22 days for the year, from 64 days to
86 days. This was due to higher receivable days, which were up by 22 days, from 102 to 124
days. Of these 22 days increase, 7 days was attributed to reduced factoring.

As far as our inventory and our payables are concerned, more or less that increase of about
13 days in inventory is offset by increase in payables by the same number of days. Moving
on to our debt position, the net debt increased by $600 million to $2.66 billion. Looking
ahead in FY25, as Jai mentioned, deleveraging is foremost priority for all of us.

In line with this, we expect to bring down our debt next year through improved operational
cash flows. Additionally, we are in the process of completing necessary formalities for the
rights issue and pursuing capital raise opportunity at our other platforms. With that, I would
like to invite Mike on stage, who will take us through a detailed performance of
international crop protection business.

Thank you.

Mike Frank :

Thank you, Anand, and great to see everyone here again this year. Over the next 15 or 20
minutes, I'd like to do four things. Firstly, I'll cover our business results, both from a Q4 and
a full year standpoint for FY24, look ahead towards FY25, talk about our very exciting
pipeline, and then I'll finish talking about a couple of the key markets that were extremely
challenging this year and what our path to recovery is in those specific markets.

So as both Jai and Anand mentioned, FY24 was an unprecedented year with the business
impacted really on multiple fronts. We'll go through the performance in detail along with
the steps taken during the year to lay the foundation for our future growth over the coming
years.

So overall, on the positive side, grower demand for our products and technologies continues
to be extremely robust. And in most markets and most crops, farm gate price for
commodities is still high on a historical level and farmer margins are strong, again, in most
crops and in most geographies where we operate. However, the gap between sell-in and
sell-out within the channel persisted throughout last year and we expect the channel
demand to normalize, in particular, in the second half of FY25. So, moving to the financial
results, our fourth quarter revenue was down versus last year, driven primarily from pricing
and we experienced margin compression largely due to the transitory impact of higher-
than-normal rebates and selling through higher cost inventory.

This quarter, adverse weather conditions occurred in Brazil and Europe, further impacting
our volumes and affecting the top line. However, we're beginning to see the signs of green
shoots in our performance. Our margins in Q4 improved sequentially and was on par with
last year on a normalized basis.

Additionally, the relative share of our differentiated and sustainable segment was up, driven
by volumes, indicating a wide adoption for these offerings. We remain on track with our
overhead optimization plan and have rationalized our spend significantly through a change
in our operating model. In the quarter, we also reduced our receivables significantly.

So, turning to our regional performance, our major markets continue to face destocking and
pricing challenges. In Brazil, as I mentioned, adverse weather and higher returns aggravated
the situation. Other parts, though, of Latin America, in particular Mexico and Argentina,
continue to perform very well, significantly outpacing the industry growth.

In North America, we continue to face pricing challenges in herbicides such as glufosinate,

clethodim, and S-metolachlor, and rebate-related support impacted our revenue in this
region by approximately 10%, with a direct impact, of course, on our margins. In Europe,
volumes declined due to excess rains and floods in the western and northern parts of the
region, and destocking and the ban of high margin Bifenazate also impacted regional
performance. In the rest-of-world region, which comprises primarily of Asia and Africa, our
performance was outstanding in that region, and we greatly outpaced the broader market.

This is, of course, a fragmented market, but our broad product offerings and proximity to
the farmer gives us the leading position in many countries to work with the dealers and the
channel to create superior agronomic and service solutions. Speed, service, reliability, and
cost-effectiveness are all aspects of our strategy in this region.

So, looking at the full year, as I said, FY24 was definitely an unusual year.

We experienced rapid price decline in most post-patent products, aggravated by a steep

increase in China AI capacity, creating pricing pressure within the channel, and this really
happened as we started Q1 of last year. And because of this pricing pressure, an inventory
that had built up in the channel the preceding few years resulted in a near-freeze of
purchases right as we started the year from a sell-in standpoint, and distributors started to
postpone their purchases and also began renegotiating on the current inventory that was
still existing in their warehouses. The same situation happened with farmers, not from a
destocking standpoint, because normally farmers don't stock a lot of inventory, but farmers
also, as they saw prices decline, they also froze their purchases as long as they could, right
up until the time they needed to procure so that they could apply it on the field, just to
make sure that they were buying at the lowest possible price as they saw prices come off
their highs. So, our volumes declined in the year by 7%, which seems like a lot, but that was
really top-tier performance when you look at the industry's performance overall. However,
we had many of our top post-patent products impacted by the overall price reduction and
hit again with channel rebate pressure, thereby resulting in 22% price decline across our
portfolio over the year.

So, while addressing these challenges, we took a conscious decision of clearing out our high-
cost inventory, and we slowed production of new material to manage working capital,
causing some negative impact from unabsorbed overheads in our P&L. So, while some
spillover is still expected in the first half of FY25, most of these impacts are now largely
behind us. Moving to regional performance, again North America and Brazil face significant
pricing challenges in the herbicide segment in particular with high rebates and destocking.
.
And while contribution margin was down, it was still on par with last year when we adjusted
for the transitory issues and looked at those one-time issues We can see that margins on a
year-over-year basis are really relatively flat, which gives us a lot of optimism as we go into
FY25. Among key regions, as I mentioned, LATAM faced significant price decline, mainly in
Brazil.

Brazil revenue is affected by excess returns apart from higher-than-normal rebates, and
together these had a significant impact on our contribution margins. As I mentioned,
performance in other parts of Latin America were very strong. In North America, as you can
see, it was impacted mostly by post-patent herbicides such as glufosinate, clethodim, and S-
metolachlor.

These three products resulted in the vast majority of our revenue decline and margin
compression in the region. On the positive side, we have increased our NPP sales in North
America. In Europe, the decline was led by destocking and product bans, which impacted
volumes.

And in the rest of the world region, the revenue for the year was nearly flat. UPL, as I said,
greatly outperformed the industry average. China, in particular, had strong volume growth
in herbicides and insecticides, while our Africa business also had strong performance.

Our differentiated and sustainable segment continues its strong trajectory. During the year,
we grew our volumes in this area by approximately 10%, enabled by a ramp-up of products
such as Evolution, Feroce, both in Brazil, and other new product launches. Additionally,
input cost tailwinds in Sperto and Evolution also helped maintain our segmental margin at
greater than 40% in this differentiated and sustainable segment.

Through this volume growth, we have improved our overall mix of differentiated and
sustainable to 35% of our sales versus 27% in FY23, and we're on path to achieving
approximately a 50% share of our mix by FY27, which has been our target for the last few
years. Our focus on innovation and solving farmer pain points is demonstrated with strong
revenue growth from new products. Further, a majority of our launches were from
differentiated and sustainable segment. Each of these recent launches, as you can see on
this page, have met with noticeable success and are on path to becoming real strong and
near blockbusters or blockbusters in our portfolio.

A major action taken this year has been to make the organization what we would call
future-ready, and we've taken several steps to lay the foundation for our medium to long-
term growth. These include simplifying our operating model to drive efficiencies and
reducing our discretionary spend. The first two enabled a lower cost base for the future
through regional and sub-regional realignment and to build an agile organization.

Further, we have moved some work to our global business centers to drive efficiency and
excellence while de-layering the overall organization. This has helped us reduce our net
headcount by 11% while improving our overall agility, our customer focus, and our
operational excellence. While we continue investing in strategic growth projects such as
NPP and sustainable solutions, including launch excellence, implementing tighter spending
controls, all of that led to savings in our overheads.
Overall, I see this initiative with two-fold benefit. First, it has helped us in a conscious
strategic reset of our costs, bringing an efficient operating model with a lower cost base.
Second, it has helped us identify growth opportunities in key markets and segments where
we are now focusing our resources more precisely.

Looking at FY25, this year we see strong farm gate demand for our products. While
challenges persist, it is evident that growers are shifting towards effective and sustainable
outcomes, which is the base of our business model and our focus for FY25 and beyond.

First, focusing on margins over volumes is one of our key priorities. By improving our
product mix, skew rationalization, and by leveraging our FY25 launches, further we expect
input tailwinds this year, and we have also negotiated better commercial terms with
virtually all of our externally sourced AI suppliers. Second, by generating additional cash
through working capital improvement in markets such as Brazil, where receivable days are
traditionally longer, we will move our sales closer to the use period, allowing us to reduce
DSOs. We'll also prioritize reducing our inventory through use of data and analytics and
using our AI modeling in our demand planning processes.

Finally, by driving innovation and leveraging our differentiated and sustainable solutions, we
expect a strong pipeline this year with over $85 million of new product revenue expected,
and we also anticipate further ramping of our recent launches from the past few years.
Looking specifically at our sustainability solutions segment, which we often call Natural
Plant Protection, or NPP, this comprises biologicals, biocontrols, and biostimulants. This will
continue to be our driver for future growth of UPL. This segment is estimated to grow
globally approximate 10% over the next five years, and with our current portfolio and our
exciting new pipeline, we have ambitions to outpace the market with a CAGR of
approximately 14% over the next three years, and I'll show you some of the products in our
pipeline here in a few slides.

So, to achieve these objectives, in our portfolio, we aim to expand our focused, what we call
hero products, our real big hitters through higher penetration and geographical expansion.
For instance, ., we have a product that's branded as Yukon, it's a biofungicide, and it has
excellent control on downy mildew. This is a technology that we launched in Europe with
great success, and in FY25 we're now launching it over many parts of Latin America.

Our focus on biocontrols is also enhanced by our OpenAg collaboration with ecosystem
partners like Novonesis. For example, our new biological soil health solutions for controlling
Nematodes, branded as Nimaxxa, was successfully launched in Brazil this past year, again
with outstanding and industry-leading results, and we're now awaiting registration in the US
for launch of this brand in the coming season. So, with such innovation ongoing, we have 10
new active ingredients in our NPP pipeline, and we're well-placed to deliver around $700
million dollar pipeline in this by FY27. We want to also be closer to the grower to better
understand their pain points, so for this we're empowering our sales team through what we
call our NPP Academy.

It's an online digital training program covering 28 of our hero products with cross-pollination
sessions across the globe and creating incentives for our entire sales organization. In Brazil
and Europe, we have also created over 100 NPP field promoters across 20 countries to
generate demand covering the unique nuances in each of the markets. Further, we are
leveraging our Pronutiva program to solve grower pain points through spray programs
combined with conventional crop protection and low residue programs that are NPP
products for disease control. Two such examples are for bananas in Central America and
pomegranates in Europe.

On the crop protection and sustainable solution side of our pipeline, it's also very robust as
you can see here, and it's really built around customer centricity with a strong focus on
resistance management, be it insects, plants, disease, or weed control. Our new products
are therefore a healthy mix of traditional crop protection products as well bio solutions. On
a risk adjusted basis, current pipeline is approx. $5 billion peak revenue per annum, of which
around $1.5 billion annual sales is expected by FY27, with approximately 75% of that new
revenue being incremental. I would like to emphasize that we have 26 molecules in our
entire development pipeline and 17 new solution platforms, both up by one versus what we
reported at our Capital Markets Day event last year.

Additionally, 80% of our pipeline is in the differentiated or sustainable segment, again up

two points from our presentation last year, which really demonstrates our focus and our
priority, including our R&D in this area. So, over the next three slides, I want to take you
through our recent launches and our more detailed review of our robust R&D pipeline. This
is in line with what we presented last year and I'm happy to share on this slide that we have
delivered several innovative products across categories and many of the projects have
advanced to the next phase.

We have a strong pipeline for the near and future growth. There are some names that you
are already familiar with, such as Evolution, Feroce, Shenzi, Preview. Each of these offerings
address specific pain points for the grower and all of them play an important role from a
resistance management standpoint.

So here in this slide and the next slide, I'll show you our pipeline products, including the
current status. This spans across crops and regions as you can see, as well as various stages
of product development, ranging from validated efficacy, which is our stage two, all the way
to launch readiness in stage four, just prior to expecting regulatory approval. On this first
page you can see our robust pipeline for weed and disease technologies.

All of these products, along with those on the next page, constitute our peak pipeline
revenue of $5 billion, which has been risk adjusted according to the development phase.
Each of these technologies have passed our screen for being an important tool, helping
farmers with both resistance management and further farm sustainability. On this slide, our
pipeline for NPP seed applied technologies and insecticides you can see is very strong.

We also have some interesting new technologies advancing through various stage gates in
our R&D process. I would also like to add that for several of these offerings, we are very
excited about their peak revenue, as I said, over $5 billion in total from our pipeline.

In FY24, post-patent products for row crops were significantly impacted in North America
and Brazil.
For us, this has led to significant value erosion and consequent impact on overall
performances we have shared. With this, our immediate priority is to once again show
profitable growth and improve cash generation in these markets. Our strategy to get back is
two-fold.

One, we are working closely with our channel partners to focus on sell-out and to align our
supply chain with their demand forecast. Additionally, we are leveraging on B2B sales and
pushing for private labels where there is an opportunity. Further, we are also targeting large
growers and leveraging on our retail collaboration specifically in Brazil and South Africa.

Our strong pipeline in FY25 is expected to drive margin accretive volumes. Ramp-up of our
recent launches in Brazil and herbicide offerings for row crops such as our new Intrava DX in
the Midwest are expected to drive revenue growth in these key regions. We also see
potential in expanding our bulk business in the U.S. specifically for herbicides in the
Midwest. In Brazil, we will continue to maintain our leadership in insecticides with our
sucking pest platform, namely Perito, Sperto, and Feroce. And generating cash in these
regions is critical given their overall size within our business. Our primary focus will be to
ensure inventory optimization and liquidation as well as positioning the sales closer to use,
specifically in Brazil, to manage working capital more efficiently.

Another key step is aligning credit terms with the product margins. This will be achieved
through a more detailed mapping of timing of sales with the product margin, skew
rationalization, and reducing lower margin sales as well as through quarterly working capital
improvement targets. Impact of these initiatives are expected to be amplified by leveraging
our internal capabilities including supply chain excellence, R&D, marketing, as well as our
data and analytics tool set.

So, before I hand it over to Ashish to review the India UPL SAS business, I'd like just to
reiterate that in FY25 we will bring the business back on track through profitable growth,
prioritizing margins over volumes, cash generation, and driving innovation for value
creation. We remain on track for 50% of our sales from differentiated and sustainable
products by FY27, driven by new launches, and with an innovation rate in FY27 expected to
be in the mid-20s. I am confident in the resulting positive impact through our operating
model upgrade to drive organizational efficiency and excellence.

I'll now hand it over to Ashish to review our business UPL SAS. Thank you.

Ashish Dobhal:
Thank you so much, Mike. A warm welcome to all of you. Good afternoon.

It's great to see all of you in person after almost a year. I'll be talking about UPL SAS.
UPL SAS, as we all know, is the crop protection business for India. But it's not just crop
protection. We also are pushing the boundaries here to bring solutions for drought
mitigation technologies, we are looking at climate smart technologies, precision farming.
We are looking at DECO, post-harvest services, and we are also looking at pure play ag tech
with the whole aim, like we talked last year, to make sure that the farming becomes
profitable and also farming becomes sustainable.

This is a company which we formed last year, and, you know, last year was our first
introduction. Since then, I think we've, like Mike discussed, we've had one of our very, very
challenging years.

In a sense, it's good for us because it has helped us to make sure that we are recalibrating
our business, refining our business model, to make sure that we are growing, but also
growing very, very efficiently, which is something I'll be discussing in my next few slides. As I
said, there's a little bit of a course correct. We made sure that the focus in Q4, was all about
sales.

We made sure that the focus goes back on cash generation and overhead optimization.
We've pushed the sales from Q4, and we are selling now closer to the season because we've
seen that in the last two years, there has been a lot of ambiguity in first and second quarter,
which are the two main quarters for the India business. Either it's the Ukraine war or it's the
China meltdown.

We've seen a lot of volatility in the first two quarters, and hence, we've, you know, we
decided that we'll place closer to the season, just to make sure that we are giving ourselves
and also our channel partners that safety net. We also have prioritized collections, and we
rationalized credit terms. This overall led us to a 60% decrease in revenue in Q4.

We also had a contraction in contribution margin by about 1,750 basis points, which
essentially was because of a product mix change, we placed a lot of profitable products for
cotton in the Q4, which shifted to Q1 now because we are placing it closer to the season.
The second piece, of course, is we had an INR 40 crore unabsorbed factory cost where we
have prioritized cash flow over higher plant utilization. The good news, of course, in Q4 is
that we've achieved a significant reduction in SG&A to the tune of about 36%.

And the best thing is that we've realized the cash of INR 500 crore from working capital in
Q4. We've had quite historic cash collections of about INR 1,100 crores in Q4, despite lower
sales. We restricted further working capital build-up and further tightened credit.

A little bit of an update on our digital business, the revenues were flat, but we managed to
reduce the EBITDA to INR 10 crore loss from about INR 52 crore loss. We've had cost
reduction across the platform.

How the year panned out for us, so people would know that we are a leading company in
cotton. We have a huge market here in cotton, and cotton, we all know, went down in
terms of acreages by about 10%, and then later on, very, very erratic weather for cotton,
whether it was North India, Central or South India, which impacted us more than it would
impact anybody else. Summer pulses was a segment that we had made on our own. This
segment also was down substantially last year, purely due to weather.

The India story is more on the erratic weather that we had last year than any external
influences. And to add to that, the Rabi itself, we all know, were some of the driest months
that we faced in September, October, November, which meant that the southern Rabi
season also didn't take off. And when it's a dry, overall dry season in Kharif or Rabi, one of
our blockbuster products Glufosinate, we have two brands in the market, where you need
intermittent rains for this product to sort of work well, didn't work well at all. So, I think we
did have some generic pressure, but I think it was mainly the season which impacted this
business. And of course, we delayed the entire product placement, or we took it closer to
the season to rationalize the channel inventory and improve working capital, which meant
that all in all, with INR 2,845 crores of revenue, we were down by about 34% in top line.

You know, once again, as some of our most profitable products are in cotton and summer
pulses, the moment these two crops get affected, our product mix gets impacted and that
puts a huge pressure on the contribution margin. And of course, we had an unabsorbed
factory cost that I just discussed in Q4, which drove EBITDA down despite improvement in
SG&A. SG&A, on an annual basis, was down by 15%.

Having said that on the positive side, we generated a cash of about INR 1,000 crores in FY24.
And more important than that, which we had not done in some time, was to improve the
receivable days by about 55 days through realignment of sales closer to the season. Digital
business, the revenue is about INR 53 crores as compared to last year, it was 72 crores, but
there was a significant reduction in the loss to about INR 99 crores against INR 283 crores of
last year. Nurture.retail turned positive at CM1 level. We are positive in most of our
platforms. We have about 95,000 retailers.

We are improving the number of retailers who are working on the platform. In terms of our
engagement on the app, the numbers have almost doubled in terms of how much time a
person is spending on the app. And we have a lot of exclusive brands, not just from UPL, but
from some of the other companies also who are coming on the platform on a regular basis
now.

Some brighter things, for the year FY25, we are having six major launches. We know that we
have a leadership position in cotton, but that also becomes a problem when the season
goes a bit off on cotton. So, we are focusing very, very aggressively on rice, vegetable, maize
and sugarcane.

So, in that we are launching six new products, two key products on paddy, BPH and stem
borer, we all know, are two key products. We are having two insecticides on this. We are
having one insecticide on vegetables.

We are having one fungicide, a multi-set fungicide, which will go in multiple crops, and we
are having two non-selective herbicides, one for plantation and the other for non-crop area.
The peak revenue for these two insecticides would be, INR 250 crores, and for one
insecticide in vegetables about INR 80 crores, a fungicide of about INR 40 crores and two
herbicides of about INR 40 crores.

In terms of our innovation rate, we have a very healthy innovation rate of about 25%, which
we see continuing in the coming year also. Strategy going forward, like I said, we are
realigning our business priorities for future. It's good that we got a challenging year this
year.
The first thing, of course, is profitable growth. So, we want to regain our volumes in our
flagship products, which is Flonicamide and Glufosinate, with the weather production being
somewhat favorable till now.

We already have launched a few products in last year. The contribution was not so high
because in the first year you always tend to invest more. So, we are expecting higher
contribution from our recent launches. We also are expecting volume growth from some of
the new launches that I discussed.

Our differentiated and sustainable share will increase from 25% to 35%. I think that's going
to be key on how we're going to grow business this year. And there's a continuous push on
SG&A rationalization.

I think it's a continuous activity we're trying to see wherever we can improve the efficiencies
in the business. Lowering working capital, of course, is our second pillar. The realignment of
sales closer to the season is not just a Q4 phenomenon. We will keep doing it as we go
forward. Additionally, rationalization of credit terms and, of course, scale up of channel
financing is something that we are working very aggressively on. The key to our success we
also feel in terms of cash generation would be tighter demand planning and inventory
controls.

The third thing, of course, is to address the white spaces. Like we discussed, we have a
decent share in Paddy. We have a decent share in Maize, but the idea is to make the shares
bigger. 2x increase in market share is what we are targeting in Maize and Sugarcane, and
1.5x market share in Rice by FY29. In terms of areas, we are present across India, but two
areas we have sort of identified where we need to get stronger are east and some of the
southern markets. Last thing, of course, is identifying the right channel partners, selling
them a better mix of products, and of course, putting up improved market share with them,
and leveraging all of this through digital analytics to drive operational excellence.

I think that's going to be a key that this whole transformation is going to be data driven.
With this we are pretty confident that next year we'll be standing here, with a much better
performance with much improved numbers. And with that, in terms of improved numbers, I
would like to call my colleague from Advanta, Benja, who will talk a little bit about their
improved performance. Thank you.

Benjamin Marolda :

Thank you, Ashish. Good afternoon, everyone. We're shifting a little bit on the markets,
moving out of chemicals, moving into seeds.

And I understand there's a pretty well-known audience on chemicals, so I was advised to

give a little bit of a background of what are the differences and similarities between the
seeds business and the chemical business. So, of course, we are operating in the same Ag
sector, but I would like to share three main topics in order for us to understand why we saw
the kind of performance that we were able to deliver, and how this compares with the
situation that the chemical sector is going through. The first, of course, as I mentioned, we
are serving, yes, the same market segment or the same sector.

We are serving farmers. But, actually, not every farmer is purchasing seeds. In fact, a lot of
the chemicals that are being sold are being sold on crops that are perennial.

The dynamics are different, while the final use is the same. The dynamics that are being
pushed or generate changes in the markets are similar, driven by fuel, by commodities, by
weather. I guess COVID taught us logistics too.

But the second point that I wanted to highlight are the differences. So, the first and most
important difference between chemicals and seeds is on the supply side. While chemicals
might have global supply facilities, that they can impact global markets; in the seed
business, supply is mostly driven by local production.

So, the kind of challenges that we have seen in the chemicals are very unlikely to happen in
the seed business.

The second would be the products and portfolios. In chemicals, we are dealing with
molecules that are more than 40 years old.

In the seed business, a given product should have or might have a life span of five to seven
years. Every five to seven years, we are changing that product. The industry is changing that
product.

That means that product is dead and most probably will not come back. Of course, we have
longstanding products, but there's a natural balance to come up with new products in order
to be able to provide better performance to the farmers, to keep our market share and to
continue providing more value to farmers.

And the last point on the differences is the growth drivers. There's been little additional land
for the seed markets to expand, so value of the seed market is driven by innovation mainly.
Pulling in new products and new technologies that will add more value to farmers, out of
which we will be able to share some of it and capture that as a price. The second one would
be hybridization.

You might be aware that in many regions, farmers are still open or using open pollinated
varieties compared to hybrid seeds that are delivering higher performance.

And the one last difference, of course, would be the crop or portfolio mix. When a more
viable crop takes over a lesser valuable crop, then the market will be growing.

The last point I wanted to share before I jump into the numbers is regarding how we create
value as an organization. And that is mainly driven by IP intellectual property and value
generation. And that happens through the development of different products, what we call
genomics.
And that is unique, and that is by region. There are very few examples of products that can
move around the globe. And that is why you will see that most of the seed companies have
a lot of R&D facilities for the same given crop across different countries.

Because every country has a particularity where that particular crop needs to receive
products that have been developed for that particular region. The second one would be the
level of investments that the company do, the germplasm diversity and the access in order
to be able to generate different products and new and better performing products.

And then another factor that sometimes gets undermined is time.

Time is extremely important because you might be wondering why aren't there a lot of
start-ups selling seeds. That’s because for developing seeds, it takes decades. It takes
decades for you to be able to develop a product and for that product to be reliable enough
for a farmer to walk away from a performing product into your own product.

And those are some of the traits that we at Advanta have. We have more than 60 years of
history and that brand helps us when we come with a new product for farmers to believe
that that product will perform better than our own existing portfolio and better than
competition.

And of course, last but not the least, the people. Our sales team plays a big role to help
position our portfolio in the ground for farmers to actually believe and see with their own
eyes what we say on our brochures, on our field days.

With this being said, I'll go into the numbers. We had a fantastic quarter 4 where we were
able to deliver, as Anand mentioned, a 34% revenue growth from INR 835 crores to INR
1,119 crores.

Most of that revenue growth came from volume, accounting for 27%, where FX was 0.5%
and price 6%. The growth was driven by through improved realizations in canola, in corn, in
sorghum and vegetables, and we had a very healthy traction in volume in vegetables in
India.

When we go to the EBITDA, which is where we were able to grow 38%, the first line item
would be contribution, where we dropped from 54.7% to 48%. Large part of that drop
happened because we had higher production costs, and that was basically driven by
weather, in seeds, whether we like it or not, we deal with Mother Nature, and we produce
our inputs on open fields, so we have to deal with that. So, we had lower recoveries in India,
in Australia, in Thailand, and Indonesia, and further we also had some change in the crop
mix which impacted the contribution margins too.

When we look into the expenditure side, on the fixed overheads and the R&D expenditures,
we spent higher than last year, in line with what we were expecting, but of course they got
diluted on a very high revenue, and that helped us to deliver the 38% growth in the EBITDA
side, moving from 15.2% of EBITDA margin to 15.6%.
When we look into how the regions performed, we can see in the quarter 4, we had a lower
growth in Asia and Americas, while Australia and Europe saw improved growth .

When we go to the full year, we were able to deliver a growth of 17% in the top line. Now
the growth participation is more balanced between volume and value, where volume is
participating with 9% and price is 6%, and we had a benefit of 2% in FX.

We had a strong traction on all four of our pillars, be it field corn, sunflower, canola and
sorghum. Advanta has been performing well in recent years, and when we look into the
CAGR on the top line from fiscal year 2022 to 2024, we have been able to deliver 21%
growth.

The gross margin, for the full year, improved from 56% to 57%, overheads were in line with
the growth in contribution.

The R&D expenditures is mainly driven by project wise, so we delivered what we were
expecting to deliver, and that allowed us also to deliver a 19% EBITDA growth moving from
INR 898 crores to INR 1,068 crores. Our EBITDA margins also improved from 25.2% to 25.7%.
When we look now into the regional pie, we can see that both our major regions, Africa and
Asia, together with America, retain their positioning. We see a slight decline in Australia,
mainly driven by naturalization of the grain soil acreage down there, and a good growth in
Europe leading to increase in share from that region. When we look into the working capital,
we had a slight increase from 85 to 91 working days, basically due to higher inventory days.

Going a little bit more into the details of the crops, the share of these crops in our revenue
mix remained pretty stable, so that means that we have been able to grow in all these four
verticals in a similar way for the past year.

Of course, our biggest contributor is corn, and we continue to gain market share. We have
very strong and established portfolios. We are also launching new products, and we keep
renewing our portfolio, that will give us sustainability and further growth in different
markets, and we consistently strengthen our youngest B2C endeavors in the field corn.

Going to grain and forage sorghum, and you might remember that this is where we have
been driving significant additional value for farmers, driven by the 'igrowth’ technology, and
even by the ‘Aphix’ technology.

I believe Bhupen shared about those in the past, but particularly in Brazil, it has been a
major growth driver for us, the ‘igrowth’ technology, and the agility to overcome some
shortages, that we had at the beginning of the year in Argentina, that is a very important
region for us in grains and forages, and also in Australia, in order to capture every single
opportunity that we were able to.

When we go to vegetables and fresh corn, two other very strong crops in our portfolio, we
bounced back in Okra by renewing our portfolio and delivering value to farmers, being able
to capture that market share and value share back. We continue to expand our portfolio in
other vegetable crops and expanding also geographically out of India. That is our center of
excellence.

And we continue also to build up the strength in our verticals for our go-to-market in
vegetables. When we talk about seeds, when we are talking about the go-to-market
between vegetables and what we call field crops, it's totally different domain knowledge
that the people on the ground need to have in order to build the demand and generate the
traction.

And finally, sunflower and canola are our main oil crops. We have been able to grow. This
percentage share last year was around 14%, so the share of this portfolio has increased by
2% to 16% in FY24. And this was mainly driven by a very strong Argentinian portfolio
renewal. We have what we call a new generation of products that they are delivering higher
dry matter, higher oil content, and we have been growing market share like nobody's
business in Argentina. And also, we are strengthening very much our go-to-market and our
portfolio in Central and Eastern Europe, the region that has not been heavily impacted by
the Black Sea conflict, while it also was impacted. And finally, Australia growing significantly
and very aggressively, particularly in Quarter 4, you might have seen that, on canola. We are
renewing our portfolio of canola and we are, again, also growing market share there pretty
aggressively.

So, this was a little bit of what I wanted to share on the Advanta side. So, with this being
said, Raj, you can take over. Thank you.

Raj Tiwari :

Thank you, Benja. I'll be covering a lot of group’s performance on safety and especially on
environmental sustainability. And also, I'll be covering the performance of the specialty
chemical platform this year.

Yeah. So, on safety, as a company, this year, we didn't have any process safety incident. And
also, our TRFR, which is the Total Recordable Frequency Rate, has been 0.24 as compared to
0.29 last year. And basically, three themes. One is, you know, we continued our safety
cultural transformation, which entailed working at the grass root level, and also on the
occupational health and safety capability building piece.

And the last is on the warehouse management, where we did the safety assessment, the
gap assessment piece of all our warehouses globally. And we have been able to, bridge 75%
of those gaps and 25% will be bridged this year. So, our safety performance overall has been
good last year.

When it comes to the environmental sustainability piece, in FY24 we reduced our CO2
emissions by about 17% and our freshwater consumption by about 12%. This is, despite our
production volumes being flat.
So, this has primarily been because of the use of greener energy and also by a lot of
recirculation of fresh water and water discharges. And last is on waste generation, which
was up by 17%. That is on account of product mix.

We continue to be number one on Dow Jones Sustainability Index. UPL has been included in
the CDP supplier engagement leaderboard.

And as Jai alluded in the beginning, we have a 62 megawatt of hybrid green energy capacity,
which we intend to double this year. And we are much ahead, and on track to achieve our
five years commitment in terms of environmental sustainability, what we promised four
years back.

On the specialty chemicals, our revenue for the year de-grew by 26%, which is in line with
our captive business de-growth, whereas on the non-captive business, our volumes, except
for the key accounts, we were able to grow our volumes by 7%.

Especially on pharma, on mining, on chemical intermediates front, we have been able to

gain market share in our volumes. Our sodium cyanide volumes grew double this year, and
this product for us has been doing extremely well.

And on EBITDA, there has been a de-growth of 17% which is lower as compared to revenue
de-growth of 26%.We have been able to achieve that largely on the back of better
manufacturing efficiencies, and fixed cost management. Our EBITDA margins were 130 basis
points better as compared to last year.

So, basically what we want to do is that we want to leverage on our scale. We have
expertise in hazardous and complex chemistries, for example, cyanide, phosgenation,
acrolein, CS2 chemistry, and H2S, which we can leverage at scale.

And, as you know, we are very much vertically integrated, right from energy to feedstock,
and which will give us differentiation in terms of our downstream applications. And,
therefore, we would be able to grow our non-captive business aggressively over the next
few years.

I now hand over Anand to, to continue with the further presentation.

Thanks.

Anand Vora :

So, we are almost at the end of our presentation. Discussing about, discussing about the
outlook for the UPL group as a whole for FY25, we expect to return back to growth, largely
driven by normalization of our crop protection business, and we expect that to largely from
come in H2 of FY25.
We are expecting a turnaround in our crop protection business in our larger markets of
North America, Brazil, and India. And, of course, the continued strong performance of the
seeds business should aid overall growth. However, as you would have heard from all the
four vertical heads, our focus is going to be on improving margins, bringing operational
efficiency, and cash generation. That's going to be the top priority for this financial year.

So, our revenue guidance, we are guiding for a 4-8% revenue growth in FY25.

On the EBITDA side, as I mentioned earlier, focus is going to be on significant improvement

in margins, and we are expecting at least 50% growth in EBITDA margins for FY25.

As mentioned earlier, again on the debt reduction, we expect to generate operating cash of
about $300-$400 million, which will almost entirely be used to reduce the debt. Further, as
we mentioned earlier, through the rights issue, which is expected sometime by the end of
Q2 or beginning of Q3, and pursuing capital raise in our other verticals, we expect to end the
year with a net debt to EBITDA of below 2. So that's broadly our guidance for this financial
year.

With this, I would like to invite Jai and all the four vertical heads, and we can start the Q&A
session.

Q & A Session

Attendee :
Hi, this is Prashant from Elara Capital.

Sir, how do we monitor liquidation globally? Is there any data-driven thing?

Mike Frank :
Yeah, so I think the question was how do we monitor liquidation from the channel? Yeah, so
there are some markets where we do have access to panel data, which the industry shares,
and we participate in that, so there's a few markets where we get near real-time
information in terms of liquidation. I would say the more common method is through our
sales reps, as they call on our distributors and retail dealers, that they talk about inventory
levels, they walk the warehouses, and we consolidate data that way too.

So, it depends on the market. Sometimes it's based on, you know, broad market data, and
sometimes it's more based on internal market research.
Attendee :
Is it possible to do something like one of our innovator competitors does, like your code-
driven liquidation for better monitoring of liquidation?

Ashish Dobhal :
Yeah, no, I think that's right.

Like Mike said, I think it was primarily driven by the data from our sales reps and our field
people. But what we've done is exactly what you're saying, is that we've launched a whole
new digital ecosystem, where each and every product of ours is now QR-coded in India.
We've implemented it recently.

That should give us a very good idea of the secondary-level liquidation, which was a big
pain.

Mike Frank :
Yeah, maybe just one last point. You know, so we have done some trials in certain markets
where we pay the channel rebates. We talk a lot about rebates.

Often in the past we would pay a rebate based on getting access to the shelf, and so, you
know, the more they would buy, the more rebates they could earn. What we've realized is
that, you know, a smarter balance is applying some of the rebate to the sell-out, and so now
across the board in all of our markets, at least 50% of our rebates are on a sell-out basis.
Again, this doesn't necessarily give us access in real-time to inventory levels, but at least by
the end of each season, we do get reports on the sell-out and the current inventory level,
which then allows us to apply a rebate to them.

So that would be the other change that we're making to our market practice.

Attendee :
Lastly, is it possible to incorporate that in our PPT going forward quarterly?

Jai Shroff :
Probably not.

Attendee :

Hi. This is Saurabh Jain from HSBC.

So, I wanted to know whether the rebates and discounts, pricing adjustments, it's already
been passed largely, or we still expect some to be coming in the next year? And also your
views on the high-cost inventory?

Mike Frank :
Yeah. Hi, Saurabh. Good question.

So, as we said in our remarks, I think both for the Global Crop Protection business and also
in India, much of the pain that we took last year is behind us. I would say in high-cost
inventory, over 80% of it got liquidated last year, and so there is a little bit that still is yet to
be liquidated in FY25. Most of that should clear in the first half of the year.

We're expecting that rebates and returns are going to normalize throughout the year. And
so, we would expect the incremental hit that we had last year from higher rebates and
revals and returns, that that is behind us, and FY25 will be a normalized year on that front.

Attendee :
So just breaking it down, in the first half of FY25, can there still be losses at PAT level, and do
you expect the EBITDA margins to be somewhere closer to 15-16%? Last year, first half, we
had about 16-17% EBITDA margins.

Mike Frank :
Yeah, so what we would expect, again, in the international crop protection market, and
others can make their own comments, is that there will be probably some volume growth,
and so we would expect the volume increase of 4-8% to probably happen quite evenly
across the year, maybe a little bit loaded into the second and third quarter. The pricing
comparable in Q1 will be a challenge for us, specifically in the post-patent segment. So, if
you think back to Q1 of last year, the prices were coming down, so in the post-patent
segment, there will be some pricing headwinds on a comparable basis, and so we would
expect in the first half of the year that there will still be a little bit of margin compression,
especially at the contribution level.

That will normalize in the second half of the year, and EBITDA will have a similar impact.
Obviously, we've got significant SG&A savings that are going to apply on a full-year basis this
year, so that will be helpful to EBITDA margins, but we're not going to guide on a quarter-
by-quarter basis, but I think in the international crop protection business, you'll see EBITDA
margins and contribution margins increase as the year plays out.

Attendee :
So at least there won't be any losses at the PAT level? Can that be a safe assumption?

Anand Vora :
So, Saurabh, I think at least in Q1, the EBITDA margins will be lower compared to Q1 of last
year. But as Mike said H2 is where you will start seeing the growth.

Attendee :
Okay, one last question, if I may. So, fourth quarter, we reported about INR 900 crores of
EBITDA in UPL Corp, about INR 175 crores at the Seed business, and EBITDA loss in UPL SAS.
So probably somewhere INR 1,100 crores of EBITDA from these three businesses.

The number that we have reported is about INR 1,933 crores. So, where that balance part of
EBITDA is being captured, in which business and how?

Anand Vora :
It's captured at the group level in the formulation business, tolling business and our post-
harvest business called Decco, our animal health business and the health and nutrition
business.

Attendee :
Okay. So, a large part of the margin is kept in the manufacturing entity, then you start to
understand.

Anand Vora :
Yeah At least for this year, that has been the case.

Attendee :
Okay. Thank you so much. All the best.

Attendee :
Hi. This is Vishnu from Avendus Spark here.

Just wanted to understand, the last 12-18 months has been very difficult for the industry.
Going forward, is the industry going to structurally change, let's say, as a cumulative
industry? The big ones, do we see the approach of all the companies going to be very
different?

Maybe the medium ones and the smaller ones, if you can talk about how the last 12-18
months is changing the view of the industry as a cumulative going forward.

Jai Shroff :
I think the industry came off a period during COVID of extending very long credit due to very
low interest rates regime and, you know, great demand for agriculture chemicals, little bit of
instability of supplies from China, so there was anxiety and nervousness, so everybody was
carrying a little bit of extra inventory. I think that swung completely the other way in this
last one year, and I think everybody lost price discipline. I think going forward, all of the
companies have had similar impact to what we've had, so I expect there to be a lot more
discipline across the board.

We have seen stabilization of prices out of China fluctuating a lot less than they were in the
rest of last year. I think whatever numbers we see, everybody is stabilized, so the industry
will start to normalize a lot more. I think all the companies are trimming their growth
forecast, so we were also expecting a much higher growth rate in the next few years, so
that's been trimmed, so everybody is adjusting their operating costs also.

So, I expect there to be a normalization, kind of a new normal, but normalization and much
better discipline in the industry.

Attendee :
On the working capital, do you expect the industry to structurally think differently given the
high inventory and the debtor days? Will that change this time or maybe after a couple of
years it will go back to being a high working capital industry?

Jai Shroff :
Yeah, I don't know what will happen a couple of years down the line, but at least right now I
see all the companies restructuring. Most of the companies in our peer group, the bigger
companies, are reorganizing their global setups, cutting costs, cutting down offices, shutting
down offices, cutting down countries where they operate. So, I don't see that at least for the
next few years.

And there is not enough margin in the business to give higher than usual credit. So, I think
the discipline will be there.

Attendee :
And one last question, if you could discuss a little bit on your thoughts on the generics
pricing from China. I mean, do they make money at these prices or if they were to return to
profitability, when do you expect the situation to normalize or come to a level where the
generics business would probably make money for a manufacturer?

Jai Shroff :
So, I think we have seen the numbers from all the public companies in China. I don't think
they are in a happy situation either. I mean, they have a little more patience than other
people.
But there is obviously pressure on everybody to improve margins and you will see that there
too I expect.

Attendee :
Hi.

This is Abhijit from Kotak here. Thanks for taking my questions. First on the results, the
Europe region and the rest of the world seem to have done particularly well this quarter.

So, if you could please just help us understand what happened there. Just with regard to the
recent floods in Brazil, is that a concern for our business there?

Mike Frank :
Yeah, so I would say if you take each market separately, Europe through much of last year
was de-stocking. So, coming into the spring season, the channel was beginning to anticipate
grower demand, so they were stocking up. So even though rains were excessive and there
was flooding in the western northern parts of Europe, we still saw the channel ordering
product, getting it in the warehouse and getting ready for the spring season.

So, I think the growth in Europe is a natural growth based on the de-stocking impact leading
into our Q4. I would say in the rest of the world there wasn't an impact on de-stocking. It's a
market where there's still a huge opportunity for us to grow our business based on our
current share position.

I think a lot of our competition is de-emphasizing some of those markets because they're
very fragmented. I think our ability to go to market and serve small holder farmers is second
to none. Which is a lot of the rest of the world market.

So, our performance across much of Asia and China and across African continent was really
strong last year including in the fourth quarter. And maybe just a comment on the flooding
we're seeing in the southern parts of Brazil, obviously that's very concerning.

Thankfully none of our employees were directly impacted. Our partners in the channel also
none of their assets were greatly impacted. So, we're paying attention to it.

I think it's more of a humanitarian issue at this point in time and likely won't have a
significant impact on crop production. There is some minor crops that have been grown in
the region, but this is not major season for row crops. So, we are not expecting an impact on
the overall crop row production in Brazil next year.

Attendee :
Second thing on the over-capacity issue in some of your major molecules. You specifically
mentioned glyphosate, clethodim, and S-metolachlor. Any recent developments in terms of
rationalization in China or are there still capacities being added there?
How do you see those molecules going forward and what percentage of your revenues do
those contribute?

Raj Tiwari :

You know that S-metolachlor and glyphosate, these are very large molecules for us. We
have large capacity, but we are also a significant player.

Our captive volumes itself is large. Going forward, I mean, I really don't know what will
happen in China, there has to be some consolidation of volumes or some shutdown of the
volume because the world doesn't need that much of capacity, especially on glyphosate.

On S-metolachlor, there doesn’t seem too much overcapacity. It is, largely in line with
market needs. Yeah, so I think someone raised a point on the cost position of China and
whether generics are making money or not.

Now, whether somebody is making money or not, but, you know, out of our top 15
molecules, that we make, we are very, very cost competitive as compared to China. This is
based on the data, which is the export data from China. Vis-à-vis that, we are very, very
competitive.

And, therefore, going forward on a normalized basis, margin should not be a concern.

Attendee :
Thank you.

One last thing from my side, just any further rebates or inventory write-downs that we
should expect in fiscal 25, and also the overhead reduction plan, has that completely played
out in the 4Q numbers, or is there more to come in coming quarters?

Mike Frank :

Yeah, so on rebates and high-cost inventory, as we discussed earlier, there will still be some
liquidation of high-cost inventory coming into FY25. We believe most of that, or all of that,
should really clear in the first half. And, again, I think from an overhead standpoint, you
know, we made a commitment during FY24 that on a comparable basis, we would reduce
our cost in FY25 by $100 million across the group, and we're on path to do that.

Attendee :
Yeah. Hi, sir. Rohan here from Nuvama Institutional Equities here tonight.
Sir, first question is on the debt reduction, which you mentioned, with a roughly 50 percent
kind of EBITDA growth, which you are looking for this year, almost at INR 8,000 crore kind of
number. We are talking about almost INR 3,000 to INR 4,000 crore rupees kind of debt
reduction. Are you assuming any further capital raise here, because only from the
operations, probably this number doesn't justify that we can reduce the debt up to that
extent, or it's only primarily coming from the working capital?

Anand Vora :

So, it's a mix of both working capital and through the EBITDA, but this $300 to $400 million
does not include any proceeds from rights issue or any other capital raise.

Attendee :
Sorry, to raise this question on this forum, but in terms of capital allocation, we have seen
that two years back, almost we came with a buyback offering to the investors while we were
still quite a leveraged company. Now, we have seen that last one and a half years have been
troubled for the industry, and we are again here probably looking for the fundraising
opportunity, contrary to what we have done two years back.

Do we learn something from here that probably a strong balance sheet is always the need of
the hour, and does it change the strategy of the company, or the mindset of the board that
we have been always looking for the acquisitions on the cost of the leveraging balance sheet
and also, do we expect that going forward maybe over the next two to three years we can
have a stronger balance sheet with less leverage going forward, or we still will have a focus
on growth rather than balance sheet.

Anand Vora :
So, Rohan, I think we saw the presentation by all the four verticals, and you see all of them
spoke about focus on improving the margins and reducing the working capital or generating
free cash flow. So clearly this year the focus is going to be on generating free cash flow and
the $300-$400 million of free cash flow which we expect to generate in FY25 will be used to
reduce the debt. Also, as far as the rights issue proceeds are concerned, the objective is to
repay the debt.

So clearly the focus is on debt reduction. I think I would just only say that while with
whatever we did, the buyback and other things, nobody anticipated the markets to, you
know, sort of drop so rapidly and because as Mike, Jai mentioned, that this was an
extremely unusual situation. We have not seen in the last 30 years such a scenario.

So, I think clearly the entire management is now focused on improving the margins and
reducing the working capital and generating free cash flow to repay the debt.
Jai Shroff :

I think just to add to that, the focus is to, as you alluded in your question, is to make a strong
balance sheet and really focus on our portfolio of companies, if you look at the whole
portfolio, there are a lot of businesses, our differentiated product business, our Advanta
seeds, even specialty chemical side, these businesses are generating high ROCEs. The idea is
to really focus on growing those businesses.

Attendee :

Also, is there any asset monetization because we have now made some structural changes
with the four companies in our vertical, so is there any asset monetization opportunity
along with the rights issues that you are also evaluating?

Jai Shroff :

Yeah, so I think the idea of creating the platforms is to give the management teams very
clear opportunity to grow their business and the idea is also to look at monetization
opportunities for each of the platforms.

Attendee :
Thank you.

Attendee :
Rohit Nagaraj from Centrum Brooking. So, first question is on the collections. So, we have
focused on collection.

How is the industry reacting to it? Whether other people are offering more credit period
and if so, particularly from Chinese players, will it have impact on our volumes maybe next
year? Thank you.

Ashish Dobhal :

You are right. That's a good question.

We are focusing on collections. That's a very important piece for us. So, in the industry you
would see there are three, four types of players.

There are some players who had started focusing on collection two years back. There are
some players who are working on it now. There are some players who had done it three to
four years back.

But we are very clear this is the path that we have taken. And we have very strong brands in
India. Having said that focusing on collections would not mean a reduction in volumes.

Attendee :
Anything on the global level?

Mike Frank :

The way I think about it is the whole supply chain went through a challenging 12 to 18
months here. It has really reset everything. If you think about working backwards from the
grower, they typically want their inputs when they need them.

They may procure the products two to four weeks in advance, but they don't really want it
until a week or 10 days at the most depending on the region. In the past when interest rates
were low, the suppliers, we were trying to get access to the shelf early so we were
competing against our competitors to get access to the distribution shelf. We would be
negotiating with the dealers up to six months in advance of when they needed to have it
ready to sell to the grower.

The retail channel also had a lot of challenges working through their high-cost inventory
over the last 12 to 18 months. The whole retail channel and distributors also wants to buy
their product as close as they can to when the grower is going to need it. That's bringing a
lot of discipline.

We also want to supply it close to when the channel wants it and when the grower wants it.
For us to manage our supply chain we want to manufacture it as close as we can to when
we need to ship it. When we think about improving our working capital, everything is
coming together. I think Jai talked about discipline that is coming in channel because the
channel wants to order it close to when they need it. Suppliers are managing their working
capital. It’s always going to be bumpy as this is a big transition. We have been very clear
with our channel partners in terms of how we want to serve them close to when the market
is.

We're lining up our supply chain to support that. That's one of the opportunities for us to
release working capital through our international crop protection business.

Attendee :
Second question is last year Q4 we had a setback because there was a sudden spurt of
supplies from China. What has been the situation in the last four months of this year? Have
we seen a similar kind of situation or is it better in terms of large quantities supplies from
China?

Thank you.

Mike Frank :
Yeah, so look, I would say it's not better in the sense that even since Q4 of last year the
average selling price out of China has come down. Now, as Jai mentioned in the past really
five or six months the price has been very stable.

But it's stable at a very low level. So, from a planning process we're anticipating that those
prices will persist through our next fiscal year. So that's kind of our base assumption.

As Jai said at some point in time, we may see price increases out of China because at least
based on current feedstock prices there's not a lot of room for prices to go down. But we're
not in the business of predicting China. So, we're anticipating that this is the new normal
and we're pricing accordingly and if in the future if there's some consolidation or prices go
up then we'll be able to participate in that but again that's not baked into our guidance for
next year.

Attendee :
Thanks.

Attendee :
Yeah, Nathan here. In seeds business was Q4 a bit exceptional because contribution margin
has gone down to 48% as compared to normal 55%. And the second thing is related to R&D,
what's the long-term thought process whether that 15% spend remains and what's the lead-
leg relationship for coming out with products over growth?

Benjamin Marolda :
So, regarding portfolio gross margin on the Q4, it has been impacted compared to what we
were looking for. There's a natural low gross margin happening as we expand in lower value
regions. There was some extraordinary sales that helped us on the top line, but impacted on
the percentage wise, but we should be getting back on track on the volume.

It's also important to understand what are the regions that we are serving in Q4. Mainly
regions where we are having lower gross margins serving in Q1 or Q2. That would be on the
gross margins. On the R&D, definitely, we are spending project wise.
There's important aspects on the R&D that once you commit to a given operating there's no
way back to create savings because operation will be done. So, we have been operating
extremely consciously on what we are deploying, but definitely R&D is the core of our
business and we will continue investing. I mentioned the importance of time, but time is
nothing unless there's investment in improving our genetics.

So, R&D will always be an area where we will, continue investing because that will create
the pipeline for us to continue going in the future.,

Attendee :
So sustainable margins will remain 55% plus for this FY25.

Benjamin Marolda :
Yes.

Jai Shroff :

Thank you very much. No more questions, then we can meet outside. Thank you.

Anand Vora :

Thanks for joining us. Please join us High Tea.