AWL Agri Business Limited — Q3 FY26

AWL Agri Business Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=jaUxK3T39S8 Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to the AWL Agri Business Limited Q3 FY26 earnings conference call hosted by ICIC Commodities Limited. 0:12 12 seconds As a reminder, all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start and zero on the touchstone phone. I now hand 0:28 28 seconds the conference over to Mr. Ash Joda from ICA securities limited. Thank you and over to you sir. 0:36 36 seconds Thank you Ratuja. Uh hello and good afternoon everyone present on the call. 0:41 41 seconds I on behalf of ICIC securities welcome you on AWL Agri business limited Q3 FY26 0:48 48 seconds earnings call. I would like to thank the management to give this opportunity of hosting the call. On the management we 0:57 57 seconds have Mr. Anu Malik executive deputy chairman Mr. Shriant Kher MD and CEO Mr. 1:05 1 minute, 5 seconds Shaman Sait Executive Director and Chief Operating Officer and Mr. Pankage Goyel 1:12 1 minute, 12 seconds the entry CFO now hand the call over to the management for any opening remarks. 1:18 1 minute, 18 seconds Thank you. Thank you and good evening everyone. 1:25 1 minute, 25 seconds uh and thank you again for uh joining this call. I will begin with a brief overview on the operating environment 1:34 1 minute, 34 seconds followed by our Q3 performance and the key business updates 1:42 1 minute, 42 seconds during the quarter. Operating environment remained mixed uh with a heightened heightened volatility in sunflower oil following intensification 1:51 1 minute, 51 seconds of Ukraine conflict. Even as Russia emerged as the largest supplier to India, edible oil prices more or less 2:00 2 minutes remained largely rangebound with a gram uh value offerings continuing across the industry. 2:08 2 minutes, 8 seconds We also saw uh of late Indonesia delaying the B50 mandate and a continued 2:16 2 minutes, 16 seconds uh availability of cheaper soya imports under the SAFTA route into the India shaping uh overall market dynamics. 2:28 2 minutes, 28 seconds Edible oil imports uh have remained uh broadly flattish over past two oil years now close to 16 million tons in both the 2:38 2 minutes, 38 seconds years. During the current year import across all three major oils palm, soya and sunflower were lower compared to the 2:45 2 minutes, 45 seconds last year indicating measured consumption and the inventory discipline. 2:53 2 minutes, 53 seconds Sunflower continued uh to trade at a premium over soya and palm during the quarter and at the same time the price 3:02 3 minutes, 2 seconds gap between the soya and palm widen meaningfully influencing customers choice and a portfolio mix across the categories. So 3:10 3 minutes, 10 seconds finally we are seeing the chart which usually we used to see a couple of years back where Sunflower sitting on the top 3:20 3 minutes, 20 seconds of the table followed by soya and finally pal. 3:26 3 minutes, 26 seconds On wheat side the this year the wheat prices more or less remained rangebound 3:33 3 minutes, 33 seconds between the range of 27 27 and a half to 28 and a half 29 rupees a kg flattish kind of uh price trend that we have observed. 3:43 3 minutes, 43 seconds This uh essentially puts uh players like us into a disadvantageous position who procure significant amount of wheat 3:52 3 minutes, 52 seconds during the harvest. And of course uh it puts into advantageous position to all the smaller and reters 4:00 4 minutes who normally work on uh replacement bases 4:10 4 minutes, 10 seconds on the results snapshot uh for the Q3 FY26 against uh this backdrop uh Q3 FY26 4:19 4 minutes, 19 seconds overall overall volume grew by 3% yearonear while revenue revenue increased by 10%. 4:26 4 minutes, 26 seconds Profitability during the quarter was in line with the management estimates reflecting disciplined execution in the in a stable pricing environment. 4:38 4 minutes, 38 seconds Our core brands continued uh to perform well with Fortune oils, Fortune brand 4:44 4 minutes, 44 seconds rather I would say and food delivering a very healthy growth of 13% yearon year. 4:52 4 minutes, 52 seconds Cohen which we acquired in May 2022 registered a strong growth of 32% while Kinks which is now second largest brand 5:01 5 minutes, 1 second in India. Uh oil and food together grew by close to 7% year on year. 5:09 5 minutes, 9 seconds Growth was broad-based across the channels, but the alternate channel and Horea plus the branded exports delivering even 5:17 5 minutes, 17 seconds stronger momentum on the P&L. Uh our standard on a 5:24 5 minutes, 24 seconds standalone basis volume grew by 2% during the quarter with a revenue growth of 8%. 5:31 5 minutes, 31 seconds on per turn basis. That is what we always uh suggest to look at our profitability metrics. Both the gross 5:39 5 minutes, 39 seconds profit as well as the epitita remained in line with our stated management estimates 5:47 5 minutes, 47 seconds on consolidated basis. Uh volumes grew by 3% uh year on year with a revenue growth of 10%. The difference between 5:55 5 minutes, 55 seconds standalone and consolidated profitability reflects improving performance of our Bangladesh subsidiary 6:02 6 minutes, 2 seconds and a consolidation of GD foods and Omar chemicals both of which are scaling up well 6:12 6 minutes, 12 seconds on a quarterly gross profit trends and EITA trends. We are delivering strong improvement in the gross profit and EITA 6:20 6 minutes, 20 seconds port as compared to the previous quarters. This reflects better operating leverage, product mix and a sustained cost in the template. 6:34 6 minutes, 34 seconds On business updates, uh at a company level, uh volumes grew by 3% led by oils with food remained broadly flat 6:43 6 minutes, 43 seconds excluding G2G sales that we had last year. Industry essential declined due to challenging macros in caster while olio 6:50 6 minutes, 50 seconds continued to scale steadily. Our last 12 month AITA now is close to 2,200 KES and 6:59 6 minutes, 59 seconds the Q3A stood at 637 K. Consistently we are delivering a bit of plus of 600 K 7:08 7 minutes, 8 seconds quarter after quarter. Alternate channels for us uh continued to scale very rapidly with the last 12 month 7:16 7 minutes, 16 seconds revenue from this only channel uh close to 4,800 cr. Now 7:23 7 minutes, 23 seconds the demand environment remained moderately challenging uh though the offtake improved in the second half of the 7:32 7 minutes, 32 seconds quarter. Edible oil volumes grew by 8% with broad-based growth gross growth across categories and double digit growth in mustard. 7:42 7 minutes, 42 seconds Market share improved sequentially on a quarterly basis supported by high marketing intensity and continued 7:51 7 minutes, 51 seconds grammage play uh that we saw across the industry 8:00 8 minutes on a food on a on a food volumes were impacted uh by u 8:09 8 minutes, 9 seconds by u by pricing action. in the wheat and a flat G2G sales. However, our domestic 8:16 8 minutes, 16 seconds branded rice business delivered robust and sequentially improving growth. 8:22 8 minutes, 22 seconds We maintained market share in wheat flour and saw meaningful improvement in the basmati rice market share. Now basmati rice market share is 8:31 8 minutes, 31 seconds now uh on a mad basis has actually crossed uh 11.9%. 8:39 8 minutes, 39 seconds products uh other than rice and wheat continued to grow in a strong double digit and now contribute to the 30% of 8:48 8 minutes, 48 seconds the food or FMCG volume and these products are basically sugar nuggets kohasuji raa and uh other products which 8:58 8 minutes, 58 seconds constitute now 30% and growing in a double digit on industry essential front volumes were 9:06 9 minutes, 6 seconds impacted by macro challenges in caster while olio volumes are fattish. Olio 9:13 9 minutes, 13 seconds contributes about 30% of the segment and continues to deliver high singledigit margin. We are steadily diversifying 9:21 9 minutes, 21 seconds into speciality chemicals which now contributes close to 78% of our polio volumes and offer higher margin 9:30 9 minutes, 30 seconds potentials on GD foods which we acquired uh this year in April 2025. 9:42 9 minutes, 42 seconds Uh the business delivered a growth of uh revenue growth of 15% with underlying volume growth of 18%. Material margin 9:51 9 minutes, 51 seconds stood at healthy 54% and distribution expenses remained the key focus. 9:57 9 minutes, 57 seconds Alternate channels grew sharply for this particular business as the GD is increasingly leveraging 10:06 10 minutes, 6 seconds AWS distribution and infrastructure plus bundling bundled offer along with the AW products. 10:14 10 minutes, 14 seconds Our priorities for GD foods includes accelerating distribution expansion, leveraging AWL's 10:24 10 minutes, 24 seconds infrastructure and scaling channels beyond general trade. 10:28 10 minutes, 28 seconds We are also focused on driving growth in tail end products to broaden the 10:34 10 minutes, 34 seconds portfolio and improve overall throughput 10:42 10 minutes, 42 seconds on brand investment. We are consistently investing in this. We stepped up brand investment during the quarter with 10:50 10 minutes, 50 seconds multiple new advertising campaigns launched across the region. 10:56 10 minutes, 56 seconds These investments are aimed at strengthening brand salience and supporting medium-term growth across the categories. 11:07 11 minutes, 7 seconds As far as the distribution is concerned, now we reach uh close to 9 lakh 50,000 outlets across the country directly. 11:17 11 minutes, 17 seconds Rural distribution has scaled up to over 60,000 towns now and we are now focused 11:24 11 minutes, 24 seconds on improving throughput and distribution efficiency. 11:32 11 minutes, 32 seconds Alternate channel remains uh one of the core focus area for us as this is the 11:39 11 minutes, 39 seconds channel of the future and growing very fast. 11:43 11 minutes, 43 seconds Alternate channels continue the strong momentum this quarter also with the volume growing by 42% 11:50 11 minutes, 50 seconds year on year. Quickcommerce now accounts for close to 30% of our overall 11:57 11 minutes, 57 seconds alternate channel volumes and we continue to invest behind this channel given its growth potential. 12:09 12 minutes, 9 seconds Big commerce volume grew by robust 65% yearon year during the quarter. Our 12:16 12 minutes, 16 seconds brand strength is clearly reflected in the market leadership across the categories with strong shares in oil, soya nuggets, basin, sugar and mega. 12:31 12 minutes, 31 seconds We continue to invest in expanding a meaningful portfolio and therefore in that 12:38 12 minutes, 38 seconds direction in the health and convenience portfolio we 12:45 12 minutes, 45 seconds uh launched Fortune Multigrain ATA during this quarter and the initial feedback is quite 12:54 12 minutes, 54 seconds positive on the product. Our value added and convenience offering across oils and 13:00 13 minutes food are also steadily scaling as we plan to expand this portfolio further in the coming quarters. 13:13 13 minutes, 13 seconds With this uh I think I am done with uh the initial uh uh thoughts about the performance of the 13:21 13 minutes, 21 seconds company for the quarter and now I hand over call to the to the chorus team to 13:28 13 minutes, 28 seconds you know open the lines for Q&A and me along with Mr. Malit and Swami and Tank are here and happy to take questions 13:37 13 minutes, 37 seconds from the participants. Over to you very much. We will now begin the question and answer session. Anyone who 13:46 13 minutes, 46 seconds wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 13:54 13 minutes, 54 seconds two. Participants are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 14:08 14 minutes, 8 seconds The first question is from the line of Sandra Sha from KSA Securities Private Limited. Please go ahead. Yeah, good evening gentlemen and thanks for 14:17 14 minutes, 17 seconds opportunity. Sir, your guidance regarding uh uh you guided for 3,500 to 3,000 14:25 14 minutes, 25 seconds beta per turn as a sustainable. So now in stress commodity cycle, what are the biggest levers where you can use to protect these mar these numbers? 14:38 14 minutes, 38 seconds See actually u the levers are basically it's like more to do with a proper risk management 14:46 14 minutes, 46 seconds that we follow. I mean in a sense the guidance that we give of 3,500 to 3,600 14:53 14 minutes, 53 seconds is basis all the risk management that we have put in and uh this is generally we 15:00 15 minutes have been able to deliver and given the fact that our uh 15:08 15 minutes, 8 seconds our positions are not speculative in nature and therefore we and that is the that is the basis at which we are giving 15:16 15 minutes, 16 seconds this uh this uh estimate of 3,500 to 3,600 15:22 15 minutes, 22 seconds and generally uh we have not seen the this portal margins going down below this even in very strong bearish or a volatile trends. 15:34 15 minutes, 34 seconds That's great. So in food business we have become now ITA positive. So what margin B should we expect when the scale 15:44 15 minutes, 44 seconds and and when when this business grows meaningfully this business to actually deliver 15:52 15 minutes, 52 seconds meaningful AITA I think we will still have to allow some more time to this business. Uh as we have said earlier 16:00 16 minutes that we have we took some pricing correction this uh year and therefore we are positive. 16:08 16 minutes, 8 seconds uh but however having said that uh this business will still remain in a investment phase or a growth phase as we 16:16 16 minutes, 16 seconds go forward for a meaningful AITA margins I think we will have to wait for another 16:23 16 minutes, 23 seconds uh two to three years where it will start delivering and as as we have been saying earlier also uh the food has got 16:31 16 minutes, 31 seconds better margin profile than edible oil and uh what we have seen In in our competition 16:40 16 minutes, 40 seconds the adita margins anywhere between 5 to 6% or little over 6 to 7% are something which we can look at for the food. 16:49 16 minutes, 49 seconds However, having said that as I said earlier this business for at least sometime for next 2 to 3 years will still remain into 16:58 16 minutes, 58 seconds a investment phase. And my last question is regarding GD foods u as uh as we have 17:06 17 minutes, 6 seconds done 54% uh material margin how much of these margins 17:13 17 minutes, 13 seconds advantage can be retained as volume scale using AWL distribution channel. 17:20 17 minutes, 20 seconds No. So uh I think we have already retained these margins. In fact when we took over GB foods the material margins 17:28 17 minutes, 28 seconds were actually in the range of uh 50% kind of margins we have actually while scaling up the business we have been 17:36 17 minutes, 36 seconds able to retain this margin so it's not a so we we don't want to grow by being a 17:44 17 minutes, 44 seconds aggressive on the pricing in the market rather we want to leverage the AWL distribution that is what we are doing 17:51 17 minutes, 51 seconds so to answer your question state I think we will maintain maintain these margin levels but uh we'll be able to showcase 17:59 17 minutes, 59 seconds growth just by leveraging the AWL distribution. That's great. So thank you very much and very helpful to 18:06 18 minutes, 6 seconds understand. Thank you. [clears throat] Thank you. Participants who wishes to ask a question please press star and one 18:14 18 minutes, 14 seconds now. The next question is from the line of Harit Kapoor from Invest. Please go ahead. 18:21 18 minutes, 21 seconds Yeah. Hi good evening. I had a few questions. So uh the first was you know on on this soya palm some kind of 18:28 18 minutes, 28 seconds pricing uh situation uh it seems like you know uh things have little bit normalized you know your volume growth 18:34 18 minutes, 34 seconds is also back just wanted to get a sense you know uh uh of how you are kind of thinking about the macro context on the 18:42 18 minutes, 42 seconds edible oil prices you know you have a strong team who kind of works around this so uh and uh and how in turn could 18:49 18 minutes, 49 seconds that kind of affect the overall volume growth u maybe a near medium term would be as soon as your understanding. 19:01 19 minutes, 1 second See um um one is that uh we have been in all the category of oil that we work. So 19:08 19 minutes, 8 seconds as a brand or as a company we are present in all the oils. So whenever 19:14 19 minutes, 14 seconds there is a uh escalation in price of one particular oil say sunflower oil then soya bean oil is there in ter of mustard oil or palm oil to back up the volumes. 19:25 19 minutes, 25 seconds So if you see the growth that is happening is an all round growth uh which we are doing in all the oils. The growth has come from mustard oil, it has 19:34 19 minutes, 34 seconds come from soybean oil, it has come from um sun oil also. 19:40 19 minutes, 40 seconds Overall price wise there has been some escalation in prices of particularly sun oil because of the tightness in the 19:48 19 minutes, 48 seconds market in supply chain but otherwise palm oil and soya has been rainformed. So it has helped us to grow the volume. 19:56 19 minutes, 56 seconds Going forward the um we are confident that with the brand and with the type of 20:03 20 minutes, 3 seconds distribution that we are expanding um it's possible for us to continue with the volume growth 20:12 20 minutes, 12 seconds and and you know your mention about the smaller gamage market moving to 750 grams. So uh uh uh you know what what's 20:21 20 minutes, 21 seconds happening here? Why the movement downwards? Is it a price thing? Is it affordability driving up affordability? Is it 20:28 20 minutes, 28 seconds competitive intensity? If you give some color on what's happening in the market as you're moving down SQ 20:35 20 minutes, 35 seconds amongst all the food products, if you see uh last year versus this year, edible oil prices are almost 20% higher. 20:42 20 minutes, 42 seconds So what happened is with the inflation pressure um at least uh 3 four months back or a year back the pressure on 20:51 20 minutes, 51 seconds prices were huge. So what happened was when the packaging order law changed that you can have any grammage as long 20:59 20 minutes, 59 seconds as you mention the same. So competition started reducing the weight so as to 21:05 21 minutes, 5 seconds reduce the price and it started from g to say 900 and then 850 then 800 then 21:15 21 minutes, 15 seconds 750. Now at 750 it is almost stable at 750 and all the competitors are at 750 level. This is only to reduce the price 21:24 21 minutes, 24 seconds and create affordability. Um and I'm sure if the edible oil prices remain 21:30 21 minutes, 30 seconds stable or come uh the gramage might go up and um it is possible but in case of mustard oil we have seen there is no 21:39 21 minutes, 39 seconds gramage cut. This is mainly in palm oil and soybean oil we have seen that even in sunflower oil we have seen gramage cut. 21:49 21 minutes, 49 seconds Got it. Got it. And and you know if you look at EIA per term this quarter for edible oil actually very healthy uh uh 21:56 21 minutes, 56 seconds you know if you add add back the uh the uh uh uh you know the the the the derivative gain uh so uh is there 22:05 22 minutes, 5 seconds something you know where we can you know apart from the other what what's sitting in the other income which is the derivative gain uh uh uh can we also 22:13 22 minutes, 13 seconds assume that because of the way the price did move up there would have been some kind of markettom market positive 22:20 22 minutes, 20 seconds uh gains on commodity as well in this quarter on edible oil x the x the derivative x forex yeah 22:29 22 minutes, 29 seconds yeah no that's fine I think very perfect I mean right question to ask you know when you look at our um numbers I think 22:36 22 minutes, 36 seconds and this is we have been saying this for quite some time is u looking at a quarter number uh is not the actually 22:45 22 minutes, 45 seconds the right way of looking at it in our scheme of the things since We plan everything for 90 days. Given the fact that we are quite a big uh operator 22:53 22 minutes, 53 seconds dealing in some more than three three and a half million tons of oil. Our planning cycle goes beyond 90 days. And therefore when you plan it in such a way 23:02 23 minutes, 2 seconds you always have a overlap uh of some M2M between the quarters and 23:10 23 minutes, 10 seconds therefore if you really look at a six month level or a yearly level is the something which gives you a right 23:18 23 minutes, 18 seconds number. So always you have either some overlapping shifting from previous quarter to this quarter or something getting shifting from this quarter to 23:26 23 minutes, 26 seconds that to the next quarter and that's the only reason and therefore we say that on a guidance level you should be working 23:34 23 minutes, 34 seconds on anywhere between 3,600 to 4,000 rupees a ton and that we should be able to deliver. 23:42 23 minutes, 42 seconds Got it. Right. Yeah. Last question was on SMC. So you know you've seen this kind of muted situation on the volume side but now we are actually seeing your 23:51 23 minutes, 51 seconds your your sequential market share is also kind of improving uh in in in the higher growth categories in the branded 23:59 23 minutes, 59 seconds categories. uh just wanted to get your sense on when do we start to see a uh uh XG2G which is now pretty much not in the 24:07 24 minutes, 7 seconds base also uh when do we start to see an acceleration in volume growth uh in food 24:15 24 minutes, 15 seconds and FMCG I mean what what is your kind of thought process outlook there yeah on on food and FMCG when you see 24:24 24 minutes, 24 seconds and you break down all these products you will find that except for non-basmati rice 24:31 24 minutes, 31 seconds and chaki ata all our food products have shown a very healthy growth in some of the products is 20% plus whether it is 24:40 24 minutes, 40 seconds sugar or poa or maida suji raa dal b m bas even basmati rice as you see basmati 24:47 24 minutes, 47 seconds rice also market share has improved uh substantially now what has happened in non-basmati rice is that we have done 24:54 24 minutes, 54 seconds some consolidation internally uh last year we expanded rapidly but then we found that non-basmati rice needs to be 25:03 25 minutes, 3 seconds understood well at each geography and so we consolidated it and then again we are now getting back into the action after 25:12 25 minutes, 12 seconds our learnings how to get the business well structured uh that is one and um 25:20 25 minutes, 20 seconds you will see going forward that our non-basmoti business is giving us volumes uh that is one and two is that 25:28 25 minutes, 28 seconds uh Chakiata as uh said in the presentation that we uh did not prices did not increase as a result we did not 25:37 25 minutes, 37 seconds get the carry cost as every year uh we would get if we store the wheat and we generally store the wheat for uh 6 8 25:46 25 minutes, 46 seconds months only to ensure that the quality remains consistent throughout the year. 25:50 25 minutes, 50 seconds Now local players have the advantage that they work on hand-to-mouth inventory. Obviously they could buy the wheat at a cheaper price and be much 25:59 25 minutes, 59 seconds more competitive and that is why we did not grow much in both nonbasot rice and 26:07 26 minutes, 7 seconds chakiata. These are two big portfolios in the food. Had we had grown there even 10% the overall food basket could have 26:14 26 minutes, 14 seconds grown by 15% or so. So we are confident that going forward uh things would be better as we see now uh January also we 26:24 26 minutes, 24 seconds have seen uh both nonbasmati rice and chakiata started showing better results and new crop is awaited anytime from 26:33 26 minutes, 33 seconds March we will get the new crop of wheat and nonbasmati rice also new crop has started coming from November onwards so 26:40 26 minutes, 40 seconds things are little better last question if I may your outlook look on the prices for uh ata and uh for for 26:50 26 minutes, 50 seconds wheat and uh and rice given that the new crop is uh likely to come in soon. Uh prices haven't moved up much as you as 26:58 26 minutes, 58 seconds you rightly mentioned. Uh uh is is this is there I if one could guess for the next 6 12 months is there a stable price 27:05 27 minutes, 5 seconds outlook right now? Is that how you're thinking about it for both these commodities? 27:10 27 minutes, 10 seconds I think the uh nonbasi growth has been very good this year and I think it is one of the highest uh production of 27:17 27 minutes, 17 seconds patty out facing even China to become number one. Um the prices are very 27:25 27 minutes, 25 seconds affordable stable anything at 3840 rupees you get today sona masuri at the 27:31 27 minutes, 31 seconds um middle level x mill level is a very good price affordable price. uh wheat also if you see the production is going 27:40 27 minutes, 40 seconds to be very good better than last year and uh that is because very good monsoon and uh couple with so far the weather 27:48 27 minutes, 48 seconds conditions are very good. So wheat production also will be higher than last year which makes uh both the commodities 27:56 27 minutes, 56 seconds as very very stable prices and uh when there is stable prices obviously the brands have advantage 28:06 28 minutes, 6 seconds I'll come back for more thank you the next question is from the 28:13 28 minutes, 13 seconds line of mistri from ICE please go ahead yeah hi sir good evening sir 28:20 28 minutes, 20 seconds Uh sir first question uh is regarding uh edible oil. So last quarter you highlighted that there is a soya uh oil 28:29 28 minutes, 29 seconds import uh from Nepal which is particularly impacting our business in north part of the region. uh what's the status on that now? 28:39 28 minutes, 39 seconds Hey, Nepal uh exports only soybean oil and that also in consumer pack uh that what is 28:47 28 minutes, 47 seconds the under septa they can do that and most of the market they penetrate are 28:54 28 minutes, 54 seconds Bengal Bihar UP char these are four big markets where 29:00 29 minutes AWL has over 50% market share in so it has surely impacted earlier but slowly 29:07 29 minutes, 7 seconds what we are finding that um with uh competitive prices and pomoline becoming 29:14 29 minutes, 14 seconds cheaper so uh that is fighting against the imported soybean oil from Nepal. So Nepal influx has reduced by almost 30 29:24 29 minutes, 24 seconds 40%. At its high it was almost 200,000 uh tons per quarter. Now it has come 29:31 29 minutes, 31 seconds down to roughly around 125 1 lakh 25,000 tons per quarter. So uh it has reduced not that it has become zero 29:39 29 minutes, 39 seconds but the impact has surely uh come down and that is why you see a market share also seen improving in Q3. 29:50 29 minutes, 50 seconds Okay. Okay. And uh sir uh second is on food's business. So our aspiration of 10,000 cr which was there earlier for FI27. 30:01 30 minutes, 1 second uh where are we in terms of uh you would expect any delay in terms of achieving that 10,000 cr of top line. 30:12 30 minutes, 12 seconds Yeah, I think see uh so this 10,000 cr of U estimate that we 30:19 30 minutes, 19 seconds gave of course this is uh the kind of growth that we saw on the food side in 30:25 30 minutes, 25 seconds FY23 24 and 25 26 was uh flattish for us and I think we spelled out the reasons 30:34 30 minutes, 34 seconds why it was a flattish uh as we go forward in 27 I don't think uh we will have any such of reasons which we had uh 30:43 30 minutes, 43 seconds this year will be there. Having said that uh I think if meaningfully GD foods also contributes to it along with couple 30:50 30 minutes, 50 seconds of more uh interventions that we are going to take uh I think we if not 30:57 30 minutes, 57 seconds 10,000 I think we would be in a striking distance that uh we are trying to work 31:04 31 minutes, 4 seconds out. uh yes but FYI 27 10,000 seems to be now kind of number which we may not 31:10 31 minutes, 10 seconds be able to uh achieve maybe it may go up to FI28 but we would certainly be into a 31:17 31 minutes, 17 seconds striking distance of this number okay and uh in food uh foods business we 31:25 31 minutes, 25 seconds have seen lot of innovation where uh there's a uh there's a new product launches has been quite aggressive in a 31:32 31 minutes, 32 seconds way uh what would be the contribution of NPD to the overall growth of uh FMCG and foods in our portfolio. 31:42 31 minutes, 42 seconds See in our portfolio we have um not been very aggressive in um ready to eat because only ready to cook we have gone 31:50 31 minutes, 50 seconds into in which we have this uh biryani kits of different varieties. We have um 31:58 31 minutes, 58 seconds double roasted sushi that we have cooked. um we are also put expert uh 32:05 32 minutes, 5 seconds functional oils uh which has started doing well. So these are some of the NPD products which have done well but as a 32:13 32 minutes, 13 seconds percentage it may not sound very big because our general status business is quite large. Uh in edible oil obviously 32:21 32 minutes, 21 seconds if you look at our total volume it's very large. So these all put together NPD will be roughly around 500 crores or something in that range. 32:32 32 minutes, 32 seconds No. Got it. I was uh uh I was asking that NPD contribution to the foods and 32:39 32 minutes, 39 seconds FMCG. Yeah. But find it's I can reverse calculate it. Uh and it it would be safe to assume that all this NPD would be 32:47 32 minutes, 47 seconds more of a margin accative for you compared to the existing portfolio of SMCDN goods. 32:53 32 minutes, 53 seconds Yes, surely the margins are higher. Only thing is that in the beginning you need to invest in uh some Amodi brand 33:03 33 minutes, 3 seconds building or promotion or creating some uh consumer connect that cost if you 33:09 33 minutes, 9 seconds take it out then surely it has much much higher margin. If you take our expert oil say immunity oil, this oil gives us 33:18 33 minutes, 18 seconds at least three times more margin than the normal. But then these are new oil which you need to advertise or you need 33:26 33 minutes, 26 seconds to inform consumers in any way. We have now uh we have cold press oil. We have just launched 33:34 33 minutes, 34 seconds cold press oil. We have penny dart as the first press but uh now I have introduced cold press mustard oil. We 33:42 33 minutes, 42 seconds are working on cold press onto we have multigrain ata. We have just launched multigrain ata. We are working on high 33:50 33 minutes, 50 seconds protein ata. Uh there are few more products on which uh we are closing very fast. 33:58 33 minutes, 58 seconds Got it. Got it. And sorry if I missed uh missed but if I look at only foods and FMCG business what would be the 34:06 34 minutes, 6 seconds contribution of this alternate channel and uh in light of and at what rate it has been growing at the same time uh 34:15 34 minutes, 15 seconds what would be the profitability of uh this alternate channel compared to let's say general trade channel for us. Okay. 34:24 34 minutes, 24 seconds See first at all India level let's look at at all India level food and FMCG staples business 25% business comes from 34:33 34 minutes, 33 seconds alternate channel 75% comes from um your general trade at all Indian now 34:42 34 minutes, 42 seconds when you go to um different towns say rural there isn't any alternate channel everything is 34:50 34 minutes, 50 seconds general trade but rest in towns when you go you have uh different alternate channel doing that. Now uh modern trade 34:59 34 minutes, 59 seconds has been growing at around 15 20% but um quick commerce is the fastest growing at around 65%. 35:08 35 minutes, 8 seconds And e-commerce is growing at around 45%. 35:11 35 minutes, 11 seconds Overall overall the um alternate channel has been doing much better. uh and you 35:18 35 minutes, 18 seconds can say around 35 40% is average growth rate of alternate channel versus uh 5 7% 35:24 35 minutes, 24 seconds 8% in general trade and in some of the towns when you go further break up whether you take Bangalore, Pune, 35:32 35 minutes, 32 seconds Mumbai, NCR you will find food and staple business 50% comes from China. 35:41 35 minutes, 41 seconds Got it. And sir on profitability and market share can you comment on uh for this ultimate challenge e-commerce e-commerce gives us slightly 35:50 35 minutes, 50 seconds more modern trade also gives us more than general trade uh for the simple reason that we don't employ or deploy 35:57 35 minutes, 57 seconds lot of people in the trade in the dist thing distributors are not there most of it is direct uh dealing with the uh 36:06 36 minutes, 6 seconds clients so we supply directly to Reliance or Walmart or anybody so that saves us one cost as well as the 36:13 36 minutes, 13 seconds manpower cost is less delivery at one point. So that these are all some of the savings that you get 36:22 36 minutes, 22 seconds overall um alternate channel gives us better margin than general. 36:28 36 minutes, 28 seconds Okay. And uh so last question from my end can you give some color in terms of demand uh let's say what on ground 36:37 36 minutes, 37 seconds demand environment do you see uh be it in terms of geography rise north east west south or in terms of rubber versus 36:46 36 minutes, 46 seconds and is there any pickup you have been seeing or what your analysis has been that how the FI27 would pan out in that terms. Thank you. 36:55 36 minutes, 55 seconds Okay. Uh good question. Uh see first is that first half was very dull. 37:04 37 minutes, 4 seconds Uh both rural and urban was dull. Q3 onwards October onwards we started 37:11 37 minutes, 11 seconds seeing some uptake in consumption both rural and urban. Now, OMD normally is a 37:19 37 minutes, 19 seconds good consumption month because all festivals the sa Diwali and then marriage season and then overall up to 37:27 37 minutes, 27 seconds Christmas and new year the market is always good. So, OMD is good for all. 37:32 37 minutes, 32 seconds But 15th November onwards, we found that uh rural markets started uh giving us 37:39 37 minutes, 39 seconds much more consumption and uh there was um a demand that we can we could see uh 37:47 37 minutes, 47 seconds clearly and this demand continues even till today. uh urban markets I would say 37:54 37 minutes, 54 seconds uh tier 2 and tier three towns showed very good results and very good demand uh which also continues to today only 38:02 38 minutes, 2 seconds the pressure remains in the metro cities where possibly the stress is still there and alternate 38:11 38 minutes, 11 seconds channel is taking some business away from the general trade that is the possible thing otherwise the demand is 38:17 38 minutes, 17 seconds up going forward what we feel is that with the prices stable uh market uh mood 38:26 38 minutes, 26 seconds sentiments are positive and production is increasing overall. Overall the um 38:33 38 minutes, 33 seconds consumption mood is much better and staples normally uh people come little 38:40 38 minutes, 40 seconds later on buying bigger quantity. They first buy other products but once they now see that rice, wheat, flour, sugar 38:48 38 minutes, 48 seconds and all these prices are stable, consumption starts growing. We are looking at at least um single digit growth in edible oils and double digit 38:57 38 minutes, 57 seconds in food going forward. That is what indicates uh gives indications are like that from the market. 39:07 39 minutes, 7 seconds Thank you. Thank you very much. That's it from my side. 39:12 39 minutes, 12 seconds Thank you. Participants who wishes to ask a question, please press star and one. 39:20 39 minutes, 20 seconds The next question is from the line of Ash Ja from IC securities. Please go ahead. 39:28 39 minutes, 28 seconds Uh yeah, thank you for the opportunity sir. So uh my question is on the force. 39:33 39 minutes, 33 seconds So given the aggression uh that you have on the code is the company looking for any 39:41 39 minutes, 41 seconds opportunities like maybe I'm sorry to interrupt you Ashosh but we are unable to hear you so clearly your voice is breaking can you please check 39:50 39 minutes, 50 seconds hello am I audible yes please go ahead yeah so my question was on the food witness so given the aggression which 39:59 39 minutes, 59 seconds you have uh are you looking for any inorganic opportunity uh as well in the uh particular foods segment. Uh and also 40:07 40 minutes, 7 seconds like if you can if you could just uh know elaborate uh more on the initiatives that uh you are taking to uh grow the overall food business. 40:18 40 minutes, 18 seconds Yeah. As far as the inorganic opportunity or inorganic uh route to grow the business, I would only say that 40:25 40 minutes, 25 seconds as a company we keep evaluating lot of proposals which comes on our table and that's a continuous process that keeps 40:32 40 minutes, 32 seconds going on. I would not comment anything whether the opportunity is there today yes or no but I think yes as a process 40:39 40 minutes, 39 seconds we continue to look out for such kind of any opportunity that comes into and if it fits into our valuation and it fits 40:47 40 minutes, 47 seconds into our bill uh we certainly do it as we did in past like we acquired kinure and then GD foods and of course in 40:55 40 minutes, 55 seconds oliochemical we acquired kar chemical so that's always will be there as far as the various initiatives are concern 41:03 41 minutes, 3 seconds concern to expand the food business. Of course, uh uh we would be little bit aggressive as we go forward on uh some 41:12 41 minutes, 12 seconds of the uh product lines like uh wheat flour and rice uh and and of course the 41:18 41 minutes, 18 seconds big uh work that needs to be done of courseing on the distribution side. So while we say that we are leveraging oil 41:26 41 minutes, 26 seconds distribution but uh answer is are we there in terms of fully leveraging oil oil distribution yes or no I think the 41:35 41 minutes, 35 seconds work is still in process. So the big initiative that we would be taking is on the distribution side number one and number two given the encouraging results 41:44 41 minutes, 44 seconds on the quickcom and alternate channel we would be spending uh quite a big uh focus and big uh uh efforts on this 41:53 41 minutes, 53 seconds particular channel because this has given us quite a significant growth along with a good market share. So these are the two things we'll continue to do particularly for the food. 42:04 42 minutes, 4 seconds Okay. Okay. Sure. Sure. And uh so you have highlighted this now uh to the earlier participant that uh Q3 uh the 42:12 42 minutes, 12 seconds demand has been good but like in general uh is there any downtrading uh kind of trend which you've seen like 42:20 42 minutes, 20 seconds particularly in the oil port any like movement from Fortune to maybe or players something like that? 42:28 42 minutes, 28 seconds No, no. In fact, we are finding um people are coming back to Fortune. Uh growth of Fortune is higher than our 42:37 42 minutes, 37 seconds second brand and uh that can be very clearly seen because Nissan is also catching the same thing and we have seen 42:44 42 minutes, 44 seconds our brand Fortune doing better. So if you see our all India fortune share has increased and that's an indication that 42:52 42 minutes, 52 seconds uh consumers are one getting back into consumption two they are getting back into their preferred brands. 43:00 43 minutes So that is possibly because weight reduction was done to ensure that the affordability remains of the brand and 43:08 43 minutes, 8 seconds that is why uh consumption of fortune is higher than our second brand kinks. 43:14 43 minutes, 14 seconds Okay. Okay. And one last thing sir uh so uh on this US tariff so uh would the company see any know better opportunity 43:22 43 minutes, 22 seconds for expansion for this oliochemical exports uh anything on that see I think the deal has just been 43:31 43 minutes, 31 seconds announced not been even 24 hours I think I think details will be uh soon out uh 43:38 43 minutes, 38 seconds we have not yet seen exactly what and how part of the deal but yes Okay, certainly on a branded export side we 43:47 43 minutes, 47 seconds will be certainly get benefited because till now the branded exports were uh attracting more than 50% of tariff which 43:55 43 minutes, 55 seconds now come down to 18%. And the olio and other things and the bean oil and there are a lot of u discussions going around 44:03 44 minutes, 3 seconds what will happen whether India will import bean oil from US yes or no. I think once the details are out only then anyone can be able to comment on it. 44:15 44 minutes, 15 seconds Okay. Okay. Sure sir. That's all from my side. Thank you sir. 44:19 44 minutes, 19 seconds Thank you ladies and gentlemen. This was the last question for today. I now hand the conference over to management for closing comments. 44:29 44 minutes, 29 seconds Yeah. Thank you once again for all the participants for joining the call. And if you wish to ask any further questions, any queries, you can 44:36 44 minutes, 36 seconds certainly reach out to our investor relation team through an email and we will certainly see to it that we your queries get answered. Thank you very much. 44:45 44 minutes, 45 seconds Thank you everyone. 44:49 44 minutes, 49 seconds Thank you ladies and gentlemen on behalf of ICI Securities Limited that concludes this conference. Thank you for joining us and you may now disconnect your lines.