Nath Bio-Genes (India) Limited (NSE: NATHBIOGEN) Q4 2026 Earnings Call dated May. 05, 2026
Corporate Participants:
Deepika Sharma — Analyst
Satish Kagliwal — Managing Director
Amol Gupta — Chief Financial Offficer
Venkatesh Kulkarni — Head of Research and Development
Analysts:
Deepesh Sancheti — Analyst
Unidentified Participant
Majid Ahamed — Analyst
Presentation:
Operator
Good afternoon ladies and gentlemen. Hello everyone. I am Aakash, moderator for the conference call. Welcome to Nathbio Genes Limited Q4FY26 earnings conference call. As a reminder, all participants will be in listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touch tone telephone. Please note this conference is being recorded.
I would now like to hand over the floor to Ms. Deepika from going the advices. Thank you. And over to you ma’.
Deepika Sharma — Analyst
Am. Thank you, Akash. Good afternoon everyone and welcome to the Q4FY26 earning call of Smart Biogenes Ltd. We have on the call Mr. Satish Kaziwal, Managing Director, Dr. Devindra Khurana, Executive Vice President. Mr. Amol Gupta, Chief Financial Officer. Mr. Harish Pandey, Sales Lead. Dr. Venkatesh Kulkarni, Research Lead. We must remind you that today’s discussion may include certain forward looking statements and must be therefore viewed in conjunction with the risk that the company faces. May I now request the management to take us through the financial and business outlook subsequent to which we will open the floor for Q and A.
Thank you. And over to you sir.
Satish Kagliwal — Managing Director
Okay, thank you Deepika and a very good afternoon to everyone. Welcome to our Q4 and financial year 26 earnings conference call. Financial year 26 has been a year of purposeful growth. One where our strategies are translated to tangible business and where the trust that farmers, partners and investors place in assets has been well rewarded. Before I speak about our own performance, I would like to set the context of the broader industry landscape because I believe it reinforces why the Indian seed sector, and NAATH in particular presents such a compelling long term opportunity.
India is the world’s fifth largest feed market valued at approximately 4 to 4.5 billion US dollars and is expected to grow at a CAGR of 12 to 14% over the next five years. With over 140 million hectares under cultivation and the Government of India’s push towards agricultural modernization, seed replacement rates which are currently below 30% for several crops represent a significant structural growth opportunity for quality feed companies. The Union budget financial year 26 contributed to strong pro agricultural stance.
It enhanced allocation to PM Kisan natural farming missions and the Digital Agriculture mission. The government’s focus on increasing crop yields per hectare through the high quality hydrate sweeps is a direct tailwind for companies like naft. Additionally, with Indian government’s push to double farmer income and the growing acceptance of hybrid technology in paddy maize and vegetables, we believe the inflection point for free adoption is accelerating. Climate change remains the definite challenge for Indian agriculture.
Erratic monsoons, shifting press patterns and extreme weather events have made farmers acutely aware of the need for resilient disease resistant seeds. This is precisely where NHAQ’s decades of R&D investment and our DSIR recognized innovation centers create a durable competitive advantage. Our ability to develop aytherbeck products suited to diverse agroclimatic conditions is what makes NAATH a trusted partner for the farming community. Our strategic progress in financial year 26 at the heart of everything we do is a simple yet powerful mission to support farmers with feeds they can rely on, and it is our strong focus on research and innovation that makes this possible.
Our scientists continue to strengthen our germplasm and create hybrids that are not only high yielding but also offer better resistance against diseases and pests. Our green product basket continues to perform well. Our flagship carbon hybrids, Nag, Sanket and Jumbo once again led the charge with improved irrigation, reflecting strong farm acceptance and product superiority. Bt cotton volumes also grew significantly, reaffirming leadership in this key crop. Strategic focus on diversification is bearing meaningful fruits.
Paddy volumes rose 35% year on year and the cotton paddy combined portfolio marginally grows 58% of our revenue mix, up from 52% last year, a strong indicator of deepening penetration in our core crops. Within our non cotton non paddy segment, maize emerged as the star performer of financial authority. Six volumes surged 54% year on year its value rose of 78%. Maize now contributes more than 10% to our top line, making it the highest growth crop in the non cotton non paddy segment. This validates for deliberate investment in this category and we see significant headroom to scale further.
India’s maize demand, driven by poultry, starch and ethanol industries is growing rapidly and we are well positioned to capture this opportunity. Friends on the international front, financial opportunistics marks a historic based on pronouncement. Our joint venture in Uzbekistan contributed US$1.6 billion to our top line for the very first time, a landmark achievement in our global expansion journey. Marketing of seats is currently underway. Results are encouraging and depending on how this season plays out, we intend to replicate this model in neighboring geographies.
We remain cautiously optimistic about certain African markets as geopolitical conditions stabilize, our infrastructure backbone has been significantly strengthened with state of the art cold storage units, warehouses and conditioning go downs with a cumulative capacity of 25,000 metric tons. Combined with our scientific team’s expertise and the depth of urgent plasm, Naathi is well positioned for sustained deviation in the Indian seal industry. Now I’ll come to outlook for financial year 37. Looking ahead, we are excited about the opportunities that lie before us.
A pipeline of new varieties across cotton paddy, maize, vegetables and the non cotton non paddy segment is robust. We will continue to invest in R and D, expand our distribution network, deepen farmer engagement and pursue an international growth agenda with stronger focus and rigor. The Indian food industry is at an inflection point even by rising farmer awareness, government support for high data adoption and growing demand for food security. I want to express my deepest gratitude to all our stakeholders, our farmers, employees, general partners and investors for their continued trust and belief in naath.
We remain steadfast in our commitment to delivering consistent value, investing in innovation and building a business that creates enduring impact. Hence, with that, I would now like to invite Mr. Amalgupta, our CFO to share the financials and operational highlights for quarter four and financial year 26. Thank you. Thank
Amol Gupta — Chief Financial Offficer
Thank you Mr. Gagiwar and good afternoon everyone. Thank you for joining and taking some time to join us today. Our earnings presentation has been uploaded on the stock exchanges and I hope you have had The chance to go through it. Before we dive into the detailed financials, I would like to quickly walk you through some of the key operational highlights from FY26. We are making steady and accelerating progress on our strategy to strengthen and diversify our crop portfolio. BT Cotton we have sold 13.8 lakhs packets during FY26 registering 22.35% YoY volume growth and 28% value growth driven by strong demand for our flagship hybrids Sunket and Jumbo. Production stability is expected to continue over next two to three years.
Paddy a core crop for us Paddy volume grew 25% YoY to 75,619 winters with value growth of 37%. The cotton paddy combined portfolio now accounts for 58% of our revenue mix up from 20 to 52% in FY25, a testament to our strengthening market position in these critical crops. Maize NAS was the standout performer of FY26. Volume surged 54% YoY to 9639 quintels with value growth of 78%. Maize now contributes 10.72% to our top line making it the highest growth crop in the NCB segment. This reflects our deliberate focus on expanding in high potential categories.
Vegetable seeds while value were down by almost 11%. Average realization improves by 6% from 1178 rupees to 1244 rupees per kg reflecting a conscious sphere towards higher value premium products. We continue to invest in scaling high potential products in this segment. Plant Nutrition Segment the segment saw a decline of 18%. This is mainly due to China export defections which disturb supply dynamics. We expect this to normalize in the coming year as supply side pressure is uzbekistan international milestone FY26 marked the first year our Uzbekistan JV contributed almost rupees fifteen crores to our consolidated top line, a landmark achievement in our international expansion journey and a strong validation of our global growth strategy.
Now coming to financial performance for FY26 in FY26. The total revenue stood at Rupees 4316 million reflecting a strong 19% YoY growth, a clear testament to the momentum we are building across our core and diversified crop segments. Gross profit grew by 5% yoyo to rupees 2403 million maintaining a healthy gross margin of 56%. The year saw a measured normalization of gross margin from the elevated 63% in FY25 preliminary due to a richer product and market mix, our underlying pricing discipline remains intact.
EBITDA for the year stood to rupees 525 million with a 12% margin. Profit before tax after adjustment of exceptional Items grew by 11% YoY to Rupees 491 million for the year demonstrating consistent improvement in bottom line performance. PAT for the FY26 stood at rupees 384 million with a PAT margin of 9%. It is important to note that the prior year PAT benefited from a lower effective tax rate of 5% versus 11% this year. Adjusting for this normalization, the underlying PAT performance remain healthy.
EPS improved to 23 rupees 42 paisa a more than 2x increase from rupees 11.3 paisa in FY22 reflecting sustained and compounding value creation over the past five years. Total assets to Rs. 10,829 million. Cash and bank balance stood at 707 million. Inventory increased to 4,446 million of rupees in line with our plan scaled up for the upcoming season reflecting our confidence in FY27 demand. Trade payables also moved up to rupees 1,305 million as we ramped production ahead of the season. Finance costs increased to rupees 133 million from 96 million in FY25 reflecting our deliberate working capital investment to fuel the inventory build for FY27.
We remain focused on efficient working capital management as volume scales. Now I would like to take you to see our five years track record. It is worth stepping back and reflecting on the journey. Over the past five years revenue has grown from Rupees 2,783 million in FY22 to 4,316 million in FY26, a 55% cumulative increase. EBITDA has expanded from Rupees 373 million to Rupees 525 million. EPS has more than double from Rupees 11.3 to 23.42. This consistent compounding is a reflection of quality of our business model and the discipline of our exhibition.
All in all, FY26 has been a year of meaningful operation and there was a very good operational progress and strategic expansion. We delivered strong revenue growth of 19%, a landmark Uzbekistan milestone. Outstanding volume traction in maize and padding. Our infrastructure, R and D capability and distribution network position us strongly for sustained quality growth in FY27 and beyond. With our reboot product pipeline, deepening pharma relationship, growing global footprints and a committed team, we enter FY27 with confidence and purpose. With that, I will now open the floor for the questions. Thank you.
Questions and Answers:
Operator
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press Star and one on a telephone keypad and wait for your turn to ask the question. If you would like to withdraw your request, you may do so by pressing Star and one again. Ladies and gentlemen, if you have any questions, please press Star and one on a telephone keypad. The first question is from the line of Mr. D.P. Sanchetty from Manya Finance. Please go. HR
Deepesh Sancheti
Hi. Am I audible?
Operator
Yes, sir.
Deepesh Sancheti
Yeah. Congratulations. And the uzbekistan contributed about 15 crores to the top line for the first time. What crops are being sold and what is the JV structure? And what is the revenue target from Uzbekistan over the next two to three years?
Amol Gupta
Okay, I’m Dr. Khurana. Let me answer that question. Uzbekistan. We had gone as a special gesture for the government of Uzbekistan to set up cotton production in that particular area. Uzbekistan cotton production is still not BT type. They are still on the regular production. So we are trying to introduce our hybrids down the line for which Dr. Kulkarni is putting in some special effort. Now, we have been there for two years. This is our third year. And this is the first time we were able to sell whatever we had produced last year or we had exported from India last year.
So as of today, 15cr was only a beginning, if I can conclude that. And down the line, we have not yet put in any targets financially. Maybe by next year the acceptability of the products will be known because whatever is sold will be grown this year. And depending upon that, maybe we will actually set up a growth target. But let me assure you that this is a good opportunity for the international step of the company.
Deepesh Sancheti
I just wanted to know how big is the market of Uzbekistan and how much of it we can take it in the next two to three years if we must have done some working when we went. I mean, we sincere that in Uzbekistan for about two to three Years.
Venkatesh Kulkarni
Yes sir. Yeah, yeah. The we are now into sales of cotton seeds. There cotton market is about $100 million. And all together like cereals and other crops together it is about a $450 million market. It is one of the whole of Central Asia. This company is for whole of Central Asia. The whole of Central Asia together might reach about a billion dollar market size in the coming five to six years. Because of the government’s intervention for quality seeds and open market opening for new seed companies and new technologies.
Amol Gupta
Now your question of how much we can achieve in next two to three years. Boss, it is almost a 500 million market. Let us first get established and then we can talk of our targets.
Deepesh Sancheti
So similar on similar lines. Just wanted to understand what percentage of our revenues do we aspire to derive from the international operations over the next three to five years?
Amol Gupta
Not more than 10 to 15%.
Deepesh Sancheti
Not more than 10 to 15%?
Amol Gupta
No, not yet.
Deepesh Sancheti
Okay, so. So we don’t see that in the next five years we will not do more than 100 crores from the international business.
Amol Gupta
When. So you are expecting that my company top line will be thousand crores?
Deepesh Sancheti
Yes.
Amol Gupta
And in that case, yes, 100 to 150 crores. It is always better to under commit and over perform. So we are being conservative because we are just getting settled there.
Deepesh Sancheti
I’m asking, that’s why I’m asking for a long term perspective. Like you know, what will be our targets. I mean I’m sure you want to, you know, lower the. But I
Venkatesh Kulkarni
Would like to, I would like to, I would like to say something on this. Actually last year we had some field performances, demos and based on that we were able to sell this time very good quantity. And honestly speaking, this is the first year wherein our product has gone out to a very large scale in different provinces. Last year we did only two provinces of this. So with this, what has happened is that this year will give us a complete picture on how it goes. So I endorse Dr. Khurana’s statement on that.
Because it’s a new territory. New products and new innovations have been there. Probably. This question on Central Asia, we can answer in the next year’s meeting, I think.
Deepesh Sancheti
Okay. Okay, fine. So can you provide the revenue and ebitda guidance for FY27? I mean what will be the volume growth assuming, I mean assumptions across the key crops, Cotton, bt, paddy and maize.
Amol Gupta
We have maintained a conservative line on cotton. But I’ve always said that the cotton will be growing around 20%. It has proved what I Made the statement last year. It has grown to 22%. As far as Padi is concerned, Padi has also grown beyond 20, 25%. And maize has given us the biggest booster this year. So we expect the top line to be growing between 15% to 20% around that time. That time. And I’m again being conservative, but 15%, hopefully yes. And EBITDA margin would be maintained with the slightly upward trend in EBITDA as well as in the net profit margin.
Deepesh Sancheti
So this is in spite of this year being. I mean we, India might be affected by El Nino. The two things
Satish Kagliwal
I would like to speak on that, yeah, definitely has an impact on entire agriculture and it affects it differently in different crops, different geographies. But what growth we are talking about is a balanced growth that we are talking about. Despite of Aldeno, despite of Aldano. There could be crop shift, crop changes. There could be geographical shift, there could be delay in planting, there could be things of that kind. But when it comes to seed sale, we will maintain our. One can have a growth pattern overall in terms of all the crops put together in terms of volume growth.
Okay.
Deepesh Sancheti
Dr. Khurana, want to add on this, on the. Especially on the El Nino.
Amol Gupta
El Nino is an environmental thing. Yeah. We have faced certain conditions in the past of. So I have always maintained the statement that Nat Biogene tries to place itself all over where it can sell so that the monsoon effect can be contravened from place to place. It makes me spread thin. I need more territories and more debtors for that matter. But the end result is that our top line is always protected. I may take a bidding on the bottom line, but then once the top line gets maintained, the bottom line always follows.
That’s a principle of finance. So we are prepared like what Mr. Satish Kagaliwalji said that we try to balance our products. We try to balance our areas of sale. We try to balance our production also for that matter. And we hope to achieve what we commit to achieve.
Deepesh Sancheti
Right? Right, sir. And how are we placing? I mean, how are we preparing for El Nino, if there is any. Because that might affect our trade receivables or even the demand to some extent.
Amol Gupta
Actually we are dealing with people. I’ll ask Harishi also to intervene here. We are dealing with dealers, distributors, growers who are with us for many, many, many years. And there is hardly anything that we feel may go wrong. We only supply what is technically being sold. We trace the products right till the point of growing. So normally spreading the market is the Forte that is being done by Mr. Harish Pandey. I would like him to add something more to this please.
Satish Kagliwal
Yeah, I can also see. Yeah. See it’s not a first year where we are talking about again we are talking this
Amol Gupta
About a bit about Alani Law since two, three years. So all the times wherever we plan we plan at least one year before further productions. Whenever we plan we always see what can goes wrong. So this part is also being taken care since the preparation of production. Right. So we know what can goes wrong. So according to the preparation has been made and definitely if a thing comes we are in a position to do better than the industry. Whatever industry do we may do better than the industry.
Venkatesh Kulkarni
Can I have a small word?
Amol Gupta
Yeah,
Venkatesh Kulkarni
Yeah. El Nino impact the predicted yield is about 92% of the rainfall. That means to say wherever the insect crops are there the impact is more rainfall crops in India more are pulses and oil fields and part of the rice. So in all these three crops we are not there. Delayed swing might be one of the prediction. Whenever the swing gets delayed cotton becomes more predominant crop there. So in all the facets together we are in right position and our products are right position. They will not get impacted by any no impact.
Amol Gupta
We have a variety. We see we are not dealing with one kind of, you know this thing. Right. We are dealing with a lot duration, hybrid. We are dealing with the medium division. We are dealing with the short division. So whatever things goes as per the situation we change our strategy to overcome all these mishapenings.
Deepesh Sancheti
Great sir. Give a great understanding. Thank you so much sir and all the very best.
Satish Kagliwal
Okay,
Operator
Thank you so much sir. Ladies and gentlemen, if you have any questions please press star and one on a telephone keypad. I repeat if you have any questions please press Star N1 on your telephone keypad. The next question comes from the line of Mr. Ronak from Alpha Advices. Please go ahead sir.
Unidentified Participant
Thank you so much sir. Am I audible?
Amol Gupta
Yes please.
Unidentified Participant
So I have basically two questions. The first one is are there any planned capex investment for FY27 in processing capacity, cold storage or new geographies? And what is your total CAPEX budget?
Amol Gupta
I think we can answer both in one line only. As a matter of policy. As a matter of strategy, Nathan has not been investing much in in Capexes. If you go through my balance sheet so you will find that we have only land bank as Capex and we also have vehicles as Capex because which we need for ensuring sales, production and things like that. But investing monies in Processing plants and storages. We are averse to it. The reason is very simple. Because these are available across the country in various areas for rental, including processing. And we find it is more economically viable because the requirement of such infrastructure is very limited.
We need maze for about 15, 20 days. So why have a machinery for maze for the whole year? So capex budget for plants and such other things just minimal. And vehicles? Yes, that’s it. Hello.
Unidentified Participant
Yeah. Okay. The second question is it’s similar to the El Nino question but bit different. So how are erratic monsoons and climate change impacting the state demand patterns? And how are you adjusting your product development and distribution accordingly?
Amol Gupta
I will just give the basic. Then Panditji can add to that. Erratic monsoon. Have been here to stay for so many years and they will continue to give us nightmares. So we are used to it. Like what Mr. Harish Pandey said. We prepare in such a way that we prepare for conditions. We place our stock much before the monsoon. We are ready to shift the stock from place A to place B in case there is a rainfall there or scanty rainfall there or scarcity of rainfall there. We have products which are there for various types of climatic conditions.
Whether it is less rainfall or more rainfall. We have products which are there for, you know, which are suitable to a particular territory. So we try and place our production well in time in all the places that where we sell. And that helps us in partially upsetting the erratic monsoon trauma. And what happens is if something doesn’t sell somewhere, something else will sell somewhere. So as a result, we are always able to clock our sales. You want to add something, sir? No, nothing. Just to add this thing, we are not supplying 100% or 90% stocks to the retailer or farmer.
Right? We are supplying these stocks to our branches. So in case, if there is any, you know, rainfall changes somewhere, we get early rainfall somewhere else. So we can shift our stocks immediately. So this is, this is a kind of preparation. We did well in advance. So we have a plans for that. We have already told integrate.
Unidentified Participant
Okay, Makes sense, sir. Thank you so much, sir.
Operator
Thank you, sir. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question is from the line of Mishraya, an indigenous minister. Please go ahead, ma’.
Unidentified Participant
Am. Am I audible?
Satish Kagliwal
Yes, ma’. Am.
Unidentified Participant
Okay, thank you for the opportunity. I had a few questions. So basically the. The PAD declined 8% y o y to almost like 384 million despite, you know, we having a revenue growth of 19%. And also on the tax rate front, it increased from 5% to 11%. Could you just let us know exactly what drove this increase and what should we assume for the effective tax rate going forward?
Amol Gupta
Ma’, Am, profit after margin or after taxes has increased in value. As a percentage, it has taken a vote of 1% dip. We attribute it basically to more finance cost and more cost spent on the schemes and marketing expenses. Because to clock the kind of top line, you have to spend money on the expenses. But it would continue to be on an average in the same range, maybe one 1.5% basis points more than what we had this year. Because the things have stabilized otherwise the top line has grown. But the gross margin has also fallen.
Like I made a statement last year, the last year gross margin was or 64% which was like something unique which happened to our company. And at that time somebody had asked me sir, whether 64 is here to stay. And I said, sorry, no way. It will come down to 53, 54%. That is our gross margin. So the top growth line, some part of it has taken into the production cost also. But we are still maintaining healthy pipeline and we would continue to maintain. So.
Unidentified Participant
Okay, thank you. I had another question though. So cotton BT volume grew 22% year, year on year. How does this compare to the overall industry growth rate? Like are you gaining market share? And if you’re gaining so from whom and average realization, cotton BT also improved from 275 to 293. So do you see further headroom for price increase? Or is the market getting increasingly competitive on pricing?
Amol Gupta
I think. Let me and Harish handle that. We are sitting right in front of it. What she’s asking is whether our cotton volume has grown by 32%. That is ma’, am, because our products like Sanket and Jambo are very well accepted into the market. We have been facing production constraints over the last two years. And this year they have been set aside and we are to going. So next year it may be even better. Secondly, your question of whom have we dismissed now that is very difficult to predict. In the cotton market, everybody is selling cotton. Overall market is same. Overall area under cotton production is almost the same. So as a result we are all displacing each other.
The government is not yet putting in more effort for cotton production area enhancement. So somebody must have did. And if your product is good and if it is in demand, maybe next year will display somebody else also.
Satish Kagliwal
Yeah, and definitely then we are growing. We are taking the shares from someone.
Amol Gupta
So definitely the share will Be taken from the leaders, those who are already leading in the cotton market.
Unidentified Participant
Okay, thank you so much. Thanks for the opportunity.
Operator
You. Thank you, ma’. Am. Ladies and gentlemen, if you have any questions, please press star and one on your telephone keypad. The next question comes from the line of Mr. Majid Ahmed from Pinpoint X Capital. Please go ahead, sir.
Majid Ahamed
Yes, yes, thank you so much. Opportunity. So my first question is regarding. You have mentioned Sanket and Jumbo as flagship brand with a production stability over next two to three years. What is the product life cycle beyond that and what is in your next generation cotton pipeline?
Amol Gupta
Yeah, so see, yeah. Although Sankirt and Jumbo has been launched 3, 4 years back only. Right. But if you see the performance is outstanding. Now another thing is the kind of pipeline we have. We have a product 2020 which is either similar or better to Sanket and we have so many other products which we don’t want to disclose now. But yes, definitely we have better than Sunket and Jumbo. So now the competition is not with the industry. Now our competition is in house. We have to beat our own product products.
So life size we can’t say like Santiago is having four, five years life over there. We have so many other product better to sunk it.
Majid Ahamed
So the cotton paddy now contribute around 58% of our revenue. Is there a risk of over concentration in these two crops? So how are you balancing the portfolio diversification while protecting your questions?
Amol Gupta
If you can go through our earlier con calls that we had about three, four years back. I had introduced the concept of NCP crops that is non cotton, non paddy crops. Because any seed company which is reliant upon only one or two major crops has a fear of losing the sales down the line. So we were expecting NCP to grow. If you go through our system, you will find that NCP has still grown this year also although albed by only 4%. For the simple reason because cotton and paddy themselves have grown a little more than regular.
That does not mean that we are only relying on cotton and paddy run through by portfolio. You will find maize which has done exceptionally well this year. We have Bajra which had done exceptionally well last year and this year it has maintained line. We are concentrating on wheat and mustard. Both of them put together have also grown up and they have given us reasonably. Wheat and mustard have grown in 10% and 15% in value over last year. Maize has grown by almost over 78% over last year. Right in value and in volume by 54%.
We are also concentrating on vegetables and Nutrient supplements. So we have a very very well balanced product portfolio and we have a very very well balanced balanced of the selling areas. So we are not only accordance specific. Actually when I introduce this NCP concept in the system at that particular time one of the investors had asked sir, how can a seed company be a seed company without cotton being sold? So at that time I said boss, we are not going to let go of cotton. Our cotton products are getting lined up.
However, we are also trying to give tawajo to other products I.e. Field crop products. So we have a balanced portfolio. Please don’t be worried about that. We have a very balanced one. One.
Majid Ahamed
Okay, got it sir. So currently for this financial year we are seeing a negative cash flow. What is the main reason for it? Sir, I think immediately like how are we impro working capital going forward?
Amol Gupta
Two things in that the negative cash flow has an issue in calculation. For the simple reason because we have almost about 7080 crores of cash and bank balances which are lying in the bank at the end of March both years. Last year also and this year also last year was around 85. This is around 70. So that effect doesn’t come in cash flow. Actually that is reduction of liabilities for advanced booking or maybe you know, you can add it to the debtors. So if you calculate like that you will find that the cash flow is not negative.
However, as per the formula it is definitely showing negative by about 30cr which is not a very big issue because we have almost about 70 crores of almost bank deposits lying up. But this year the stock buildup has been a little more than earlier years. For the simple reason, because we were expecting the production of cotton to stabilize last two years we are feeling that if you give 100 we get only 20. This year when we gave 100 we got almost 70 80. So good production has taken place and cotton has a long life, very good long life in the shelf. So as a result we are keeping it lined up and we are stabilized for that. So minor cash flow negativity will not affect our working capital needs.
Majid Ahamed
Finally going forward like what’s our sales and marketing spend as percentage of sales for FY20? Sir,
Amol Gupta
Sorry, can you please repeat it?
Majid Ahamed
So going forward what would be our percentage of sales in. In sales and marketing? Sir, percentage overall sales going forward,
Amol Gupta
Your terms of expenses,
Majid Ahamed
The sales and marketing expenditures. How much are we looking?
Amol Gupta
Okay, so sales and marketing expenditure. Basically there are two components to that. One is expenditure made into the market and second is schemes which are Given to the trade this year the schemes have reduced from 32% of last year to 28%. Although as a volumetric or sorry, as a value they would have increased. Definitely. The other expenses into the market are commensurate to the demand of the market. So they increase at 5, 7, 10% which is normal inflation rate. There’s nothing much better is being done there.
Although we have to do a lot of show casing of our production to the market. The major expense in sales and marketing is our schemes and schemes are controlled based on the sales. So as a result if the schemes go up, the sales definitely go up multifold.
Majid Ahamed
When do we see the inflection points are going this year in terms of higher sales?
Amol Gupta
Sorry.
Majid Ahamed
So when do we see the benefit of these expenditures translating to much higher revenue growth?
Amol Gupta
As far as the selling expenses are concerned, they are not that high. And we don’t go overboard in making selling expenses. We make the selling expenses based on the products that are being sold into the market. And schemes are directly, you know, commensurate to the sales. So selling expenses do not have any intellectual growth of the sales. Sales grow because of the products that we introduce into the market and the research products which Dr. Kulkarni is kind enough to put it to the marketing team.
So it’s a. It’s a normal game. Okay, sir.
Majid Ahamed
Got it, sir. Thank you, sir.
Operator
Thank you, sir. Ladies and gentlemen, if you have any questions please press star and one on your telephone keypad. The next question comes from the line of Mr. Sandeep Kumar Verma, an indigenous. Please go ahead, sir.
Unidentified Participant
Hello, sir. Good afternoon. Yeah, I want to. I want to ask regarding cat flow statement. Cash flow statement, inventory. If you see inventory. Okay. Since March 2024 it was minus 22 crore. And in March 2025 it was minus 108 crore. And in March 2026 it was. It is minus 113 crore. So is it means that we are not able to sell the product in the market? Inventory is going up and up since March 2024.
Amol Gupta
That’s a good question. I. The only thing which I don’t tend to agree with the question is that if you are unable to sell the product into the market then how is the top line growing by 20%? Just. Just a matter. Just a matter to think, not to debate. Okay, now coming back to your question. Inventory being negative, in addition to inventory, like I said the last two years we are trying to stabilize the production for future. And in that particular case our products which are not giving us the kind of production are started giving us over production.
Now if I have production lying up into the market just because my inventory is going to increase I cannot leave that with the producer because they will sell it elsewhere. My product will become fabricated, it will get siphoned out. So we are bound to take back the production because it is my production being done on my behalf. So this can lead in adding to the inventory. Please remember that if my inventory goes up, the next year’s production goes on. That’s why Mr. Gupta said the stability of production over a period of two to three years.
So I know carrying inventory is a little costly affair but then it is not detrimental to the sale. And what my marketing people tell me is that whatever we have accumulated this year in cotton he should be able to liquidate over next two years. Cotton has a shelf life of five to seven years. No issues in that. So next year definitely the production will go down but the sales will increase. That’s what I think.
Unidentified Participant
Okay, so. So we can say in two years we will be able to sell our inventory.
Amol Gupta
Don’t worry. By that time next year again the inventory will come. Inventory. We. We get inventory to sell inventory. That is why the top line is going up. And don’t forget every pie gives me 56% margin.
Unidentified Participant
Okay. Okay. Thank you. Thank you sir.
Operator
Thank you so much. Sir. There are no further questions. Now I hand over the floor to the management for closing comments.
Amol Gupta
So in the end I would like to thank everybody, especially my investing community for showing their continued interest in the company. Year after year, quarter after quarter, half year after half year. We have been making very conservative commitments to the community as such investor community. And we have always tried to maintain. I can only make two lines that your company is well balanced in portfolio. Your company is well balanced in pan India presence of selling. Your company is trying to escalate or step up international footprint.
Also we have good human resources very well lined up and we hope to cross 500 crores of top line soon. No commitment. But with your enthusiasm, with your prayers and with your support this company is here to stay and do well. Thank you. Thank you very much.
Operator
Thank you sir. Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using Doorsabhas conference call services. You may disconnect your lines now. Thank you and have a pleasant evening.