CCL Products Ltd — Q4 FY26

CCL Products (India) Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=UAmpu6Lbdgg Published: 5 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to CCL Products India Limited Q4 FI26 earnings conference call hosted by 0:10 10 seconds Ashika Institutional Equity. As a reminder, all buyin lines will be in the listen only mode and there will be an 0:17 17 seconds opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an 0:25 25 seconds operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. 0:32 32 seconds I now hand the conference over to Mr. 0:35 35 seconds Deepak Saha from Ashika Institutional Equities. Thank you and over to you Mr. Saha. 0:42 42 seconds Thank you Michelle. Good morning everyone. On behalf of Shika Institution Equities, it's indeed a great pleasure to host the 4Q AI26 and full year 26 earnings call of CCL products limited. 0:53 53 seconds Joining us today to discuss the earnings for the fourth quarter and full year ended 31st March 2026 are Mr. Chalas Sishant managing director, Mr. Pervvin Jayaury, chief executive officer, Mr. B. 1:03 1 minute, 3 seconds Mo Krishna, executive director, Mr. 1:06 1 minute, 6 seconds Chhattani Aat Raju Chief Financial Officer and Miss Sri Dev David Assari Company Secretary and compliance officer. We thank the management for 1:14 1 minute, 14 seconds giving us the opportunity to host this call. I would now like to hand over the call to Pravin for his opening remarks post which we'll open the floor for Q&A. 1:22 1 minute, 22 seconds Thank you. Over to you Promeita. 1:24 1 minute, 24 seconds Yeah, thank you Deepak and thank you team Mashika Institutional Securities 1:31 1 minute, 31 seconds for hosting this call. Uh good morning everyone. I welcome you all to the fourth conference call of FI2526. 1:40 1 minute, 40 seconds And now let me give a brief overview of the company's performance for the fourth quarter and the year gone by. The group 1:47 1 minute, 47 seconds has achieved a turnover of 1226.39 crores for the fourth quarter and which is as compared to 839.65 1:56 1 minute, 56 seconds crores for the corresponding quarter of the previous year achieving a growth of 46%. The AITA stands at rupees 193.76 2:05 2 minutes, 5 seconds crores as against rupees 167.1 crores which is a growth of 16% while the profit before tax is rupees 123.1 crores 2:14 2 minutes, 14 seconds growing at 16% and the net profit stands at 114.53 crores with a growth of 12%. 2:22 2 minutes, 22 seconds Uh as far as the full year is concerned the group has achieved a turnover of 4,465.80 2:28 2 minutes, 28 seconds 80 crores as compared to rups 3,114.2 crores for the corresponding previous 2:35 2 minutes, 35 seconds year achieving a growth of 43%. The ADITA stands at rupes 741.38 crores as against 563.54 2:44 2 minutes, 44 seconds crores which is a growth of 32% while the profit before tax is rupees 460.74 crores growing at 31% and the net profit 2:53 2 minutes, 53 seconds stands at 388.11 crores with a growth of 25%. 2:59 2 minutes, 59 seconds The domestic business has achieved a gross turnover of uh 650 crores approximately out of which the brand 3:06 3 minutes, 6 seconds sales were around about of 440 crores and now continental as a brand is well 3:14 3 minutes, 14 seconds established as the number three player in the country and in some regions and platforms. So we are also the number two player and we will look to further uh 3:22 3 minutes, 22 seconds strengthen this uh position in the coming months and years. As far as green coffee prices are concerned, they are they remain to be stable as of now, 3:30 3 minutes, 30 seconds which is a good sign, uh the Brazilian crop is around the corner and with the positive news of good supplies. Uh we 3:38 3 minutes, 38 seconds have a belief that the prices could further soften in the coming months. Uh the Middle East Middle East crisis does pose a challenge with a bit of supply 3:46 3 minutes, 46 seconds disruptions and energy price increase, but we have managed the situation well and do not see much of disruption going 3:52 3 minutes, 52 seconds forward. Uh I will just ask Chetanya our CFO to give a little bit of a color on the uh balance sheet performance post 4:01 4 minutes, 1 second which we will open the floor for questions. Thank you. 4:09 4 minutes, 9 seconds Good morning. Adding to what is highlighted by CO uh we are closing the financial year on a very strong note with revenue and profit both growing for 4:16 4 minutes, 16 seconds the uh growing significantly for the quarter and for the full financial year. 4:21 4 minutes, 21 seconds A key area of focus for us this year has been strengthening of the balance sheet. 4:25 4 minutes, 25 seconds We have always been delivering very good operational results with the CG of close to 20%. What we have done this year is to ensure that the operational results 4:34 4 minutes, 34 seconds get translated into a real balance sheet strength. The balance sheet right now is much leaner, cleaner and lot healthier 4:42 4 minutes, 42 seconds with healthy cash flows and debt coming down significantly. The net debt as 31st March is around,73 crores. a reduction 4:50 4 minutes, 50 seconds of more than 750 crores from last year. Debt to equity is at 0.5 compared to 0.92 an year ago. 5:01 5 minutes, 1 second Our net debt to AITA is at 1.45 right now compared to 3.1 5:09 5 minutes, 9 seconds year ago. With that I hand over to Deepak for uh questions. 5:16 5 minutes, 16 seconds Thank you very much. Ladies and gentlemen, we will now begin with the question and answer session. 5:22 5 minutes, 22 seconds Anyone who wishes to ask questions may please press star and one on the touchstone. If you wish to withdraw yourself from the question key, you may 5:30 5 minutes, 30 seconds press star and two. Participants are requested to use only handset while asking a question. Ladies and gentlemen, we will wait for a moment while the 5:39 5 minutes, 39 seconds question to as 5:58 5 minutes, 58 seconds the first question is from the line of Abhishek Matur from systematics. Please go ahead. 6:06 6 minutes, 6 seconds Yes. Hi sir, thank you for the opportunity. U so uh just wanted to check what what would be our volume growth for the quarter also. Uh has the 6:15 6 minutes, 15 seconds AIDA per kg which is a key metric you track has it uh come down to a level of about 130 uh which is a bit down 6:23 6 minutes, 23 seconds sequentially from maybe the 140 that we saw in the previous quarter. 6:27 6 minutes, 27 seconds And what is driving the strong realizations on the top line for us to have clocked this kind of a uh growth? Thanks. 6:35 6 minutes, 35 seconds Yeah. Uh hi Vishek just u uh to clarify sorry the first thing that you asked was on uh this thing uh if you 6:44 6 minutes, 44 seconds on the volume growth sir on the volume growth for the quarter. 6:47 6 minutes, 47 seconds So our volume growth you know has been uh and I'm speaking on a little uh larger uh four quarter perspective has been in the range of 18 20%. Uh this 6:56 6 minutes, 56 seconds year and the quarter was also uh very similar. So volume growth stands at uh that level and you know AITA per kilo 7:05 7 minutes, 5 seconds again probably this quarter was a little bit of a down considering the uh you know the proportion of uh coffee that 7:12 7 minutes, 12 seconds you sell because if you if you would have seen last quarter were much higher uh uh high margin coffees were sold but 7:19 7 minutes, 19 seconds on an annual basis in fact the AITA per kilos has improved from previous year. 7:23 7 minutes, 23 seconds So that's uh that's uh that's an improvement and uh you know as we have been guiding most of the time some of these key matrixes on a quarter level 7:32 7 minutes, 32 seconds may not give the right picture. So while one sees a sequential drop a bit but I don't think so that's there's much to 7:39 7 minutes, 39 seconds read into that on an annual basis in fact the per kiloba has improved. 7:47 7 minutes, 47 seconds Great sir just a followup second question sir what uh so we have we have earlier given the guidance for 10 to 20% 7:55 7 minutes, 55 seconds volume growth and maybe a 15 to 20% eida growth anything changing for fi27 how is our guidance looking now 8:03 8 minutes, 3 seconds so the guidance is very similar probably we are giving a guidance of both uh volume at around 15% and even a 15% so 8:12 8 minutes, 12 seconds that's uh that will be the thing uh while things have stabilized quite a few things have stabilized uh uh since the 8:19 8 minutes, 19 seconds last year but you know keeping the other uh volatility in mind we we are sticking to the volume growth guidance of 15% and 8:28 8 minutes, 28 seconds the resultant EITA growth will also be in the same region great sir and finally uh the guidance on the India business and also any capex 8:36 8 minutes, 36 seconds thoughts that we have capacity expansion thoughts that you have right now that's it for me so you know while there have been uh u 8:45 8 minutes, 45 seconds discussions we looking at things related to capacity but you know as far as next two years are concerned we are generally 8:52 8 minutes, 52 seconds you know good for our growth aspirations our capacities are good but you know there could be certain areas where we 8:59 8 minutes, 59 seconds would we would like to kind of see if the growths are more for example we have seen better utilization for freeze dried 9:06 9 minutes, 6 seconds so if that is happening much f at a much faster rate the utilization we could look at you know uh not necessarily a 9:14 9 minutes, 14 seconds capacity expansion but maybe a strategic tie up or things like that. But these are things we will be able to comment on when we come closer to a decision on 9:22 9 minutes, 22 seconds date. Obviously, there are discussions that keep happening on a uh on a regular basis. But on a largely on a you know on a long-term basis for the next two 9:31 9 minutes, 31 seconds years, we are good as far as capacity is concerned. uh as far as domestic business is concerned as I told in the 9:38 9 minutes, 38 seconds uh in the narrative that uh out of the 650 crores that we did in the India business uh 440 crores or odd were uh 9:45 9 minutes, 45 seconds you know that the retail business the branded business and we'll continue to drive uh you know uh similar growths uh 9:52 9 minutes, 52 seconds in the coming years also we are seeing very good traction in uh in in a lot of areas and it is important at this stage 10:00 10 minutes that we keep driving those uh growth tractions so that uh that will uh that will automatically you know come through. So we will keep up the momentum on the uh branded business as well. 10:11 10 minutes, 11 seconds Great sir. Thanks and all the best. 10:15 10 minutes, 15 seconds Thank you. The next question is from the line of Abhai from Carelian Capital. Please go ahead. 10:22 10 minutes, 22 seconds Hello. Can you hear me? Yeah, we can hear you. 10:26 10 minutes, 26 seconds Hi. Uh so I just wanted your outlook on the D2C business admin. Firstly uh secondly is the exp the margin 10:34 10 minutes, 34 seconds contraction can that entirely be attributed to the coffee prices and in general also what's your outlook on coffee prices in the coming quarters 10:43 10 minutes, 43 seconds so I'll answer your second question first and then come to the first one the second question there actually is no margin contraction so you know the margin contraction that you see is 10:52 10 minutes, 52 seconds basically because we are seeing as aa as a percentage to top line and therefore it is only optical in nature uh as we 10:59 10 minutes, 59 seconds have always maintained that Our business works on you know per kilo vita where there is no contraction but because the prices coffee prices increase and we who 11:08 11 minutes, 8 seconds are modeling as a cost plus model therefore what it seems that the top line kind of you know in in in times of 11:15 11 minutes, 15 seconds rising coffee prices uh looks uh the growth looks more inflated. So let's say if we take the 46% growth top line it is 11:22 11 minutes, 22 seconds a combination of 18 20% volume growth and another 20 25% of uh coffee prices increases that gets built into the uh 11:30 11 minutes, 30 seconds top line and therefore AITA as a top percentage top line looks uh you know contracted but it is not because what will happen the opposite will happen you 11:38 11 minutes, 38 seconds know probably going forward when in the base you have higher green coffee prices and going forward the green coffee prices could soften and therefore you 11:46 11 minutes, 46 seconds may see instead in spite of 15% volume growth You may see lower value growth but uh what we always say that how uh 11:53 11 minutes, 53 seconds the basic metrics to be looked upon is uh the volume growth the AITA growth and are they growing in line with each other 12:00 12 minutes or not and that's the guidance also we are giving for the future that in line with the volume growth of 15% around about that number we also look to drive 12:09 12 minutes, 9 seconds AITA also in the same uh same region so that's uh that's the answer to your second question uh when and therefore 12:16 12 minutes, 16 seconds what it means is that the uh volatility in coffee prices does not affect our margins because the moment we do contract we you know do backto-back 12:25 12 minutes, 25 seconds buying of green coffee which means that we are guarded against any fluctuations uh if at all it happens in the coffee prices. So that's uh the answer to the 12:33 12 minutes, 33 seconds second question. The first question as far as D2C is concerned. We are doing extremely well on D2C. In most of the platforms we are we are very strong uh 12:42 12 minutes, 42 seconds with uh doubledigit market share and in a few of the platforms we are also the number two player in the in the category. So we are doing extremely 12:50 12 minutes, 50 seconds good. approximately you know uh 25% 20 to 25% of our sales come from uh the 12:57 12 minutes, 57 seconds online channel uh which is a very good uh very good uh marker for the uh for the business that we are doing. 13:06 13 minutes, 6 seconds Got it sir. Uh another question was just like apex front but I think that's been answered already. Thank you. Yeah thank you. 13:14 13 minutes, 14 seconds Thank you. The next question is from the line of Raj from Feden AMC. Please go ahead. 13:23 13 minutes, 23 seconds Uh yeah, hi thank you for the opportunity. Uh a couple of questions firstly on inventory days. So now I was just looking I mean uh because of the 13:31 13 minutes, 31 seconds softening of coffee prices the inventory days are almost for us are at historical lows. So do you see any further improvement in inventory days over the 13:38 13 minutes, 38 seconds next two years assuming that uh the coffee prices stay at these levels or even move down further from here and 13:45 13 minutes, 45 seconds secondly I think uh we are because we don't have any major capex for the next two years our operating cash flow is 13:54 13 minutes, 54 seconds actually going to be very strong. So uh what is the management thinking about u going forward for utilizing these funds 14:02 14 minutes, 2 seconds whether it will be increasing dividend payouts or any acquisitions or any other thing? 14:08 14 minutes, 8 seconds So um uh okay so two things uh first um was about uh the inventory cycle uh of course yes you are right lowering of 14:17 14 minutes, 17 seconds coffee prices and better visibility uh has helped us tighten the inventory uh cycles uh and it's just not the 14:26 14 minutes, 26 seconds inventory cycles there are other efficiencies that we have been able to bring in in most of our operations so that's an ongoing process uh do we think 14:34 14 minutes, 34 seconds that as a guidance we would like to lower it from the place that that it is I don't think so we're giving in guidance to uh of lowering of inventory 14:43 14 minutes, 43 seconds cycles from here on we would love to kind of maintain it better it of course we'll try do our best uh but as a guidance I would not like to kind of 14:50 14 minutes, 50 seconds give a guidance of lowering it further from here because we we'll take it as things uh come along so that's uh on 14:58 14 minutes, 58 seconds this thing of course yes you have pointed it right uh we will have uh you know cash flows coming in now as far as how do we utilize it uh there is no 15:06 15 minutes, 6 seconds commitment as of now but uh the things that you spoke about most of the things we are thinking about and we are thinking yes if there's an opportunity 15:15 15 minutes, 15 seconds in the areas of any good acquisition that comes our way would definitely uh love to evaluate those and we'll make 15:23 15 minutes, 23 seconds sure that we are we are using these uh you know flows to uh to maximize uh the returns for the stakeholders in whatever 15:30 15 minutes, 30 seconds way we can understood so I mean uh and just uh whether it will also be used for reduction in debt from here on I mean we 15:38 15 minutes, 38 seconds are at a uh it is actually yes yes yes so yeah of course makub you know it won't come to zero but definitely there is a certain 15:46 15 minutes, 46 seconds reduction that has already happened and a significant reduction in fact we were not if last year if you would have heard 15:54 15 minutes, 54 seconds us our guidance was at around 1 1400500 crores but we have reduced it to80 I think uh possibly uh around about that 16:02 16 minutes, 2 seconds number uh maybe there could be a certain more reduction but again All will depend on because even our growth numbers are there. We are at 15% volume growth is 16:11 16 minutes, 11 seconds what we are we are thinking. So which means that you require 15% more working capital to uh fund this growth. So uh uh but you know how much of this gets 16:19 16 minutes, 19 seconds offseted by lower coffee prices and all that. So we will we will take things as uh as it comes along but uh definitely 16:26 16 minutes, 26 seconds the uh idea would be to and you know the long-term debts will anyways get uh get paid. So there will be reduction in the long-term debt. working capital will 16:35 16 minutes, 35 seconds take it up as things uh come along but definitely all the efficiency uh measures are being put in place to improve the ratios and the parameters as 16:44 16 minutes, 44 seconds much as possible and so maybe yeah the CFO is saying that probably with a 15% growth probably 1100 1200 is the level 16:53 16 minutes, 53 seconds that we probably could be seeing in the next year understood uh just lastly on uh just uh 17:00 17 minutes on KEX again uh so I mean currently what is our capac capacity utilization on a console basis globally and assuming 17:09 17 minutes, 9 seconds and uh I mean you said that we'll be good for next two years but uh for a new plant would it be green field or brownfield and I mean uh will it what 17:19 17 minutes, 19 seconds what time will it take for a new capeex to come on board once we start executing it so okay first and foremost our annual 17:27 17 minutes, 27 seconds utilization would be around 65 uh% of soaps uh couple of percentage here or there last quarter was a better at maybe 17:34 17 minutes, 34 seconds 70%. So that's why I said we are good for another uh another two years. Uh it does take uh you know uh one and a half 17:43 17 minutes, 43 seconds to two years to uh to materialize a capeex. But you know the thing is that uh whether it will be green field, 17:50 17 minutes, 50 seconds brownfield, we go into a strategic uh tie up it will all depend uh on how things uh shape up. There could be a 17:58 17 minutes, 58 seconds scenario that we don't put our own capeex but we end up doing some sort of a you know capacity uh strategic uh tie up or we end up buying capacity 18:06 18 minutes, 6 seconds underwriting capacity of somebody else or we may ourselves think uh that we want to put a a brownfield uh that also 18:14 18 minutes, 14 seconds is on the uh on the cards but all of this it is a little too pre premature to talk to. uh we'll definitely keep you 18:21 18 minutes, 21 seconds posted if there is uh any development on this uh front because a lot could change as we go along depends on you know what 18:28 18 minutes, 28 seconds kind of product the utilization is better but at at an aggregate level we are good for two years but it could happen that maybe on a atypical uh a 18:36 18 minutes, 36 seconds type of product we could be seeing uh you know better utilization uh uh than two years so so all it'll all depend how 18:44 18 minutes, 44 seconds things go from here on a broad basis yes we are good for two years uh what do we put next we are all evaluating and 18:52 18 minutes, 52 seconds watching the situation very closely how growths are panning on which areas which geographies and accordingly we'll take a decision going forward 19:01 19 minutes, 1 second understood understood I was I mean I was only asking from that point of view because you're hearing that Indian players are I mean gaining significant 19:08 19 minutes, 8 seconds market share globally plus our peers are also talking about strong volume growth I was just trying to understand that 19:15 19 minutes, 15 seconds whether of our volume growth what we are guiding if we achieve materically higher and that so we should not be caught in the wrong foot in terms of having the absolutely not having enough capacity. Yes. 19:25 19 minutes, 25 seconds Yeah. Yeah. So that uh that is an assurance we are giving that we will not let capacity come in way of growth. So we will make sure that we we do kind of 19:34 19 minutes, 34 seconds you know uh get the capacity required to fulfill our ambitions. Understood. Thank you so much. 19:42 19 minutes, 42 seconds Thank you. We'll take the next question from the line of Kashab Zeri from MK Investment Managers. Please go ahead. 19:50 19 minutes, 50 seconds Um thank you so much and congratulations uh team for great numbers. Uh just one question. Um I missed out on the number 19:58 19 minutes, 58 seconds of capex for FI27 if that was discussed. Uh if you can repeat that number. 20:05 20 minutes, 5 seconds So Kashab there's no capeex for 27. uh we didn't uh say there would be any capeex as we have been maintaining next two years there'll be some maintenance 20:13 20 minutes, 13 seconds capeex of maybe uh 25 to 30 35 crores but these are very small capeexes there is no planned big cex uh uh planned as 20:23 20 minutes, 23 seconds of now uh for the next two years so yeah so just trying to reconcile you know sort of reconcile this number um I think 20:32 20 minutes, 32 seconds uh what chatanya mentioned was that um our debt next year closing could be roughly about 1,100 crores. 20:40 20 minutes, 40 seconds Now if let's say our sales grow by about 15% that's additional about 700 crores of um sales at about 120 days that would 20:49 20 minutes, 49 seconds need just about 200 crores worth of cash. You add about 50 crores uh which will come from the maintenance capex uh 20:57 20 minutes, 57 seconds that should still leave a significant number uh in terms of uh you know free cash uh to repay the debt. So then does 21:05 21 minutes, 5 seconds that mean that we would retain cash on the book? Is that is that assumption correct? 21:10 21 minutes, 10 seconds Not really. You know so is a little bit conservative considering the volatility that has been there in the market. So uh 21:17 21 minutes, 17 seconds so so you know uh we would like to kind of on the on the right side than on the wrong side. Uh definitely uh as for your 21:25 21 minutes, 25 seconds calculation there will be cash in the books but as I said that you know there are multiple ways to figure out things right now while we are doing a lot of 21:33 21 minutes, 33 seconds you know evaluation not wanting to commit on any one aspect or the other right but uh given a chance obviously we would like to retire debt rather than keep it 21:40 21 minutes, 40 seconds on the uh on the books for long periods of time. So so that uh that goes without saying yeah but you know we we don't 21:48 21 minutes, 48 seconds know. Yeah understood. So if coffee prices remain where they are uh this uh setter is paribus the calculation is uh in the 21:57 21 minutes, 57 seconds right direction like you said you know there could be you know if there is any plus minus in either of these assumptions then obviously what 22:06 22 minutes, 6 seconds could be understood. Thanks thank you so much and congratulations again for a great set of numbers. Thank you. Thank you Pash. 22:13 22 minutes, 13 seconds Yes. Thank you. 22:17 22 minutes, 17 seconds The next question is from the line of Pritesh Kirk from Nwama Wealth. Please go ahead. 22:23 22 minutes, 23 seconds Hi. Uh I would like to bring uh attention to you a little bit about the business side of things. As we have seen 22:31 22 minutes, 31 seconds the coffee marketer in India uh shift from uh sprayed coffee to freeze-dried 22:39 22 minutes, 39 seconds coffee and even to roasted blends. So what do you believe uh would be your plan to shift that demand uh in the 22:47 22 minutes, 47 seconds company as well and uh since we're also talking about uh BTC uh demand that has grown to 20% this year. So what is your 22:56 22 minutes, 56 seconds plans on brand visibility? As we uh again mentioned that freeze-dried, coffee and roasted blends are majorly 23:03 23 minutes, 3 seconds focused uh the buying is focused on brand visibility like due to kayan everything those brands have majorly 23:11 23 minutes, 11 seconds acquired that share by creating the taste of coffee and uh focused towards personalization. 23:20 23 minutes, 20 seconds Yeah. Okay. So I there was a little bit of a disturbance in your voice but what what I heard you I'll try and uh answer that and probably a couple of answers 23:29 23 minutes, 29 seconds lie in your question as well. So the first thing is there sorry there's a lot of Mr. G please mute your line sir. Mr. G please mute your line. 23:42 23 minutes, 42 seconds Sir you may proceed. 23:43 23 minutes, 43 seconds Yeah. So what I was telling is that you know it happens in any category that there will be premarimization. So there 23:50 23 minutes, 50 seconds is not a shift from a spray dried to uh freeze-dried. There is a large chunk of consumers who are still drinking a spray dried and will continue to drink spray 23:59 23 minutes, 59 seconds dried. But yes, as it happens in any category, there is always a uh premiumization that happens. people are always you know upgrading to uh better 24:07 24 minutes, 7 seconds coffee and that leads to some of these shifts that where consumers are adopting free black coffee and that's the reason we are pretty well equipped to cater to 24:16 24 minutes, 16 seconds that demand and uh that's the reason and this in fact we had predicted a couple of years ago and that's how we uh you 24:24 24 minutes, 24 seconds know initiated capacity enhancement uh in freeze died as well so uh so that is that is always there uh as far as you 24:33 24 minutes, 33 seconds know The shift towards beans is concerned. If you see largely the consumption of beans is for out of home consumption and in growing market the 24:41 24 minutes, 41 seconds out of home consumption is growing and therefore you know the uh usage of beans is growing at a at a much uh faster 24:49 24 minutes, 49 seconds pace. Uh we largely are not into you know beans because that is something that we very localized. There is not much of value addition. So we don't see that market as a very big market for us. 25:00 25 minutes But yes in the Indian context uh we do supply to a lot of cafes and a lot of cafe chains the beans the roasted beans 25:08 25 minutes, 8 seconds as well. So that is also something that we are uh we are seeing as growth drivers at least in the local Indian market. Uh as far as consu uh your brand 25:17 25 minutes, 17 seconds building activities uh uh question is concerned. Yes we are building the brand uh we we have developed certain 25:24 25 minutes, 24 seconds strengths in certain categories and in some areas. So we are taking things forward. H it's not necessary that all the categories we will be driving the 25:33 25 minutes, 33 seconds growth. Uh what we think that will give us the maximum impact are the categories that we are building. So like we started 25:41 25 minutes, 41 seconds in south of India we are strengthening our brand presence a lot there and now we have started building uh traction in rest of south also. So we're getting 25:50 25 minutes, 50 seconds good track uh you know returns from markets like north and west where our next growth momentum will come from. So 25:57 25 minutes, 57 seconds all of that is part of our you know strategic initiatives uh going forward. 26:02 26 minutes, 2 seconds But yeah there will be certain categories where we will not uh you know knowingly participate because we want to deploy the resources uh you know uh at 26:11 26 minutes, 11 seconds the places where we think we'll get the maximum impact. So I don't know whether I have answered all your questions because there was some disturbance from your side but uh this is our thought process. 26:22 26 minutes, 22 seconds Thank you sir for answering those questions. Uh sir the participant has left the queue. We will move on to the next question from the line of Vive Ganguli from TCG AMC. Please go ahead. 26:35 26 minutes, 35 seconds Uh thank you sir. Uh I had one quick question. Your balance debt in the balance sheet has come off very 26:41 26 minutes, 41 seconds significantly by out of 700 out cross but we do not see a corresponding reduction in uh the interest the finance 26:50 26 minutes, 50 seconds cost. Uh can you shed some light on that? 26:53 26 minutes, 53 seconds Sure. uh like last year we had lot of interest capitalized because uh our Vietnam facility was not at up and 27:00 27 minutes running last year right so the interest was getting capitalized so if we take that interest there is a significant reduction in the interest as well 27:08 27 minutes, 8 seconds okay and uh what would that number have been and secondly what was your cost of uh uh borrowing as we speak today 27:18 27 minutes, 18 seconds uh so I may not be in a position to give you exact number that has got capitalized that should be somewhere around uh 25 to 30 crores could be 27:26 27 minutes, 26 seconds probably last year what got capitalized uh the cost of borrowing right now between 7.2 to 7 to 7.5 depending on where the borrowing happens. 27:37 27 minutes, 37 seconds Okay, got it. Great. Now that's all from my side. Thank you. Thank you. 27:45 27 minutes, 45 seconds Thank you. The next question is from the line of Bhavya Sonana from Samasa Cassidy. Please go ahead. 27:53 27 minutes, 53 seconds Yeah. Thank you for the opportunity. Am I audible? Yeah. Yeah. You are audi. 27:59 27 minutes, 59 seconds Yeah. Uh first of all, congratulations sir on a good set of numbers. I think last few years have been uh really good. 28:04 28 minutes, 4 seconds Uh just a couple of questions. Uh first question is I think you guided 15% capital growth and volume growth uh for 28:11 28 minutes, 11 seconds the next uh full year. So is this uh with respect to contract still being short-term or because it's such a 28:18 28 minutes, 18 seconds specific guidance are the customers giving a long-term guidance. So uh can you throw some light on that? 28:26 28 minutes, 26 seconds So yeah so you know uh uh a lot is changing now we are sorry there's some some noise that I can hear. I don't know 28:34 28 minutes, 34 seconds where it's coming from but yeah so uh so things are changing as the coffee prices are stable. Uh we are seeing a lot of 28:41 28 minutes, 41 seconds long-term contracts. In fact, uh some of our freeze diet capacity is quite long-term now. So that's uh that that is 28:48 28 minutes, 48 seconds giving a very long-term picture. So there is a there is a there is a movement towards long-term contract and therefore we can be fairly assured of uh the guidance that we are giving. 29:00 29 minutes Uh okay. So so just with respect to uh the guidance again I think this year uh we ended up at 30% growth in AIA and the 29:09 29 minutes, 9 seconds next year we adding 15. So is that considering some conservatism and you know keeping in mind copy price and other probably issues that might happen 29:18 29 minutes, 18 seconds or uh anyway is there some change because uh you know we were getting 20 and then we obviously revised it upwards to 25 in this year. So 29:27 29 minutes, 27 seconds right right just so there are you know a couple of things that you know went our way this year and probably uh you know 29:34 29 minutes, 34 seconds once it get uh get gets into their base there may not be further improvement there. So for example, you know, this year our proportion of freeze-dried was 29:43 29 minutes, 43 seconds much higher, right? Uh so uh that that proportion may not get even higher next year. So therefore, uh that benefit we 29:50 29 minutes, 50 seconds may not get. There are certain efficiencies that we had spoken about that may get build over a period of time and some of them you know got preped a 29:58 29 minutes, 58 seconds little bit because we were able to fasten some of these efficiencies. So that get built into the uh into the base as well. some of these small packs where 30:06 30 minutes, 6 seconds we were able to you know uh fasten the proportions there. So you know some of these things are already there in the base and therefore may not come as an 30:15 30 minutes, 15 seconds additional thing going forward. So therefore and we [snorts] have always guided that our volume a bit growth will be in line of volume growth. So since we 30:23 30 minutes, 23 seconds have guided a volume growth of 15% and we already have built the efficiencies into the bases uh and proportions into the bases I don't see this you know 30:31 30 minutes, 31 seconds adding on to anything that we have already built and therefore we are giving a guidance that EITA also will grow in line with the uh volume growth which is around 4 15%. 30:42 30 minutes, 42 seconds Okay, got it. Just a last question if I may squeeze in on the on the branded business. Uh uh what kind of growth uh 30:49 30 minutes, 49 seconds do you think we'll be able to garner in the next few years or at least the next year? 30:55 30 minutes, 55 seconds So you know uh again uh uh branded business also this year we got very very handsome growth which was on the back of 31:02 31 minutes, 2 seconds volume as well as value. So volume was around 25 30% and then we added another 15 20% of value growth this year 31:09 31 minutes, 9 seconds probably because you know post GST and post uh coffee prices uh softening uh I don't see that advantage of value coming 31:19 31 minutes, 19 seconds in but we are still committed to driving 25% uh you know uh kind of a volume growth which means that the value growth 31:27 31 minutes, 27 seconds also will be in the same lines so we are looking to drive that sort of a growth going forward as well. 31:34 31 minutes, 34 seconds Okay, got it sir. Thank you so much uh for Thank you. 31:38 31 minutes, 38 seconds Thank you. The next question is from the line of Rich from Equity Master. Please go ahead. Uh sir, thank you for the opportunity. 31:46 31 minutes, 46 seconds My question is uh related to utilization at FDC capacity at Vietnam and uh you know the the capacity enhancement that 31:54 31 minutes, 54 seconds you had done at India. So what is the annual utilization? What is the run rate currently? 31:59 31 minutes, 59 seconds So I'll give you a broad picture. you know we don't kind of get into too much of details on capacity utilization it works against us sometimes but you know 32:07 32 minutes, 7 seconds at a broad level annually uh we have uh you know with everything put together new old everything put together we at 32:13 32 minutes, 13 seconds approximately 65% capacity utilization and uh you know I cannot kind of you know go into details of Vietnam India 32:22 32 minutes, 22 seconds but freeze-dried was a was a little higher utilization as I told earlier also the proportion of freeze-dried was better so freeze-dried was uh higher 32:31 32 minutes, 31 seconds than the average utilization but average utilization remained at 65%, last quarter was a little better at around 70%. So that's uh where it is. 32:41 32 minutes, 41 seconds Okay. uh and so this year uh you know normally you guide for that our volumes in eida grow in tandem but this year our 32:49 32 minutes, 49 seconds eida growth absolute was more than well above 30% while volume growth was what it was 18 to 20 right 32:56 32 minutes, 56 seconds so so I mean I understand that there is a mix of FDC and small packs coming in here but going forward there is there 33:05 33 minutes, 5 seconds also a possibility that our eida per kg could moderate given the product mix and the fact that when coffee prices soften a lot of you know non-premium customers 33:14 33 minutes, 14 seconds or traders also come in uh to get that volume. So would that be a fair assumption? 33:20 33 minutes, 20 seconds I I think I think you asked a very precise question. Yes, there could be a possibility where it could soften but as I have always mentioned last time also 33:28 33 minutes, 28 seconds we were saying that we will try and you know kind of uh negate the pluses and minuses and keep it at the levels that 33:35 33 minutes, 35 seconds they are in. Right. So uh although technically you are bang on when you say that there could be you know a situation 33:43 33 minutes, 43 seconds where my proportion of SDC could increase and as you rightly said if the coffee prices are down a lot of low margin customers also come into the 33:51 33 minutes, 51 seconds picture so that could lead but as I have told that we are continuously trying to build efficiency small packs uh you know trying to go to end consu consu 34:00 34 minutes customers so all that will also help us and we are very confident that we'll be able to if at all there is any negative impact negate through some of these 34:08 34 minutes, 8 seconds actions. So hopefully we will try and maintain the arapy law going forward. 34:13 34 minutes, 13 seconds Okay. Okay. Sure. And also you know from a two to three year perspective what kind of guidance would you give for your you know domestic and domestic sales and 34:21 34 minutes, 21 seconds branded business especially uh where could it be as a proportion of the total business and will that will that end up 34:28 34 minutes, 28 seconds becoming a better growth driver let's say 3 to 5 years from now as well. Uh so you know uh again there are uh two 34:36 34 minutes, 36 seconds aspects to it. Uh one is that uh yes we are growing the business aggressively. 34:41 34 minutes, 41 seconds What percentage to uh the total business will it become? I think that's not the right way to look at it because the other part of the business also we are 34:49 34 minutes, 49 seconds growing it aggressively. Yeah. So uh so that matrix becomes uh you know irrelevant. What is relevant that uh are 34:56 34 minutes, 56 seconds we growing uh the B2C business much faster than the category? Are we gaining shares from our lead competitors or not? 35:05 35 minutes, 5 seconds And are we making this business sizable enough for it to kind of you know uh give it back to the uh business and we 35:12 35 minutes, 12 seconds are well on line to this and not only in India we are now looking to expand our B2C business in some of the other geographies as well and hopefully we 35:20 35 minutes, 20 seconds will keep uh building on this uh on this vertical as fast as possible. Now going forward let's say now the India business 35:28 35 minutes, 28 seconds has become quite quite sizable you know at 400 odd crores it is no longer a very small business it is quite sizable uh 35:38 35 minutes, 38 seconds when you look at from a very absolute uh on an absolute term basis now we are looking to kind of you know uh every 3 35:45 35 minutes, 45 seconds years we would love to kind of double this and uh say that okay how where do we go from there but and you know in the 35:53 35 minutes, 53 seconds previous calls we were also saying that we are also trying to see if there are some other categy we can kind of grow our business into. So a lot of our 36:00 36 minutes growth momentum will be dependent on how some of these things shape up. Uh but yeah, that's the intent that I would 36:08 36 minutes, 8 seconds like to tell you that we are driving things very aggressively not only in India but trying to see if 36:15 36 minutes, 15 seconds we can scale up outside India as well and in India can we get into some other categories as well. So all of them uh is being worked upon and yes as a 36:24 36 minutes, 24 seconds proportion we'll try and keep increasing the proportion as much as possible. 36:29 36 minutes, 29 seconds Yeah. So so also we'll keep uh investing back in the business you know as we grow at least for the next three to four years. Right. 36:36 36 minutes, 36 seconds Absolutely. Our intent is that um you know we don't want to make this business as of now. We'll keep investing back into the business going forward. 36:44 36 minutes, 44 seconds Okay. Okay. And so my last question is if you could just guidance on the tax rate. 36:49 36 minutes, 49 seconds I'm sorry to interrupt you ma'am. I would request you to reach. Thank you so much. 36:54 36 minutes, 54 seconds We'll take the next question from Naim Patil from Bastian Research. Please go ahead. 37:00 37 minutes Yeah. Hi, thank you for this opportunity and congratulations on good set of numbers. So I would just like to follow up on the last uh questioner's question 37:09 37 minutes, 9 seconds that uh what uh the tax rate what are we looking forward for that going next two to three years considering we have a 37:17 37 minutes, 17 seconds capacity set up in Vietnam. So that's my first question and secondly on the B2C side you know we have international 37:25 37 minutes, 25 seconds brands as well so what sort of initiatives are we taking in on that account as well so those are the two questions from my side. 37:34 37 minutes, 34 seconds So regarding the first question uh the average tax rate at a consolidated level is a combination of different different uh multiple things in the sense that we 37:42 37 minutes, 42 seconds have entities which are at full tax then we have an SZ which operates at 50% tax then we have 115 VA entity then again we 37:51 37 minutes, 51 seconds have an entity which is completely not taxable so uh when we take an average tax rate at a consolidated level you may 37:58 37 minutes, 58 seconds have a bit of deviation year on year having said that the average tax rate should be somewhere closer to 17%. 38:06 38 minutes, 6 seconds Okay. 38:07 38 minutes, 7 seconds And international, you know, yeah, we were talking about the international brand. So yes, you know, per call now 38:14 38 minutes, 14 seconds this year in UK alone is approximately um anything between 25 to 30 crores and uh there is a bit of India business as 38:22 38 minutes, 22 seconds well. So we are looking to expand not penetrate not only in the UK market with per call but we are now actively looking to take this brand in some of the other 38:30 38 minutes, 30 seconds geographies as well. So we're talking to a lot of uh you know our partners across uh countries that how could we take this 38:37 38 minutes, 37 seconds brand in some of the other countries now that we are seeing this getting established in the uh UK market. 38:45 38 minutes, 45 seconds Understood. And just one last question on the cost of goods sold side. So is it this uh spike in this quarter on year? 38:54 38 minutes, 54 seconds This was largely due to the cost costless model uh nature of the business and there's no inventory loss or anything. Is that correct in the way you look at it? 39:04 39 minutes, 4 seconds Yeah. Yeah. Actually it's not um not really about anything else because we work on cost plus. So the cost of goods sold higher could be dependent on the uh 39:13 39 minutes, 13 seconds type of contract one is doing. So this quarter we did a little bit of not the proportion of lower margin contracts were higher. So the cost of good 39:20 39 minutes, 20 seconds proportion is a little higher this quarter. 39:23 39 minutes, 23 seconds Understood. That's all from my side. Uh congratulations again for the numbers and pluck. Thank you. Thank you. Thank you. 39:30 39 minutes, 30 seconds Thank you. 39:32 39 minutes, 32 seconds We'll take the next question from Deepak Saha from Ashika Institutional Equities. Please go ahead. 39:40 39 minutes, 40 seconds Hey. Hi. Uh so, so first of all, congratulations on great setup number. 39:44 39 minutes, 44 seconds My question is on the B2C side. So, it's very heartening to know that on the uh quick commerce side we are doing 100 cr kind of a number portfolio. So what I 39:52 39 minutes, 52 seconds wanted to understand since there would be many markets where we'll be uh you know mature in terms of uh compared to other uh micro markets that we have gone 40:01 40 minutes, 1 second uh what broad understanding currently we have that say we are giving 30 35% discount uh and after considering commissions and all uh at MRP now uh are 40:10 40 minutes, 10 seconds there levers to grow that particular number or or uh improve our stake rate uh on some of the mature markets and 40:18 40 minutes, 18 seconds which can eventually you know impact our overall revenue. venue and profitability. 40:23 40 minutes, 23 seconds Yeah. Yeah, definitely. So, you know, Deepak, it's actually directly linked to the equity that you are building. Brands with higher equity will command better 40:31 40 minutes, 31 seconds pricing uh lesser discounts, right? Uh also discount is this thing of how uh the competition is uh this thing. So, 40:39 40 minutes, 39 seconds what has happened is that because of the aggressive growth that we have been seeing, there is also a very heightened you know level of competitive activity. 40:47 40 minutes, 47 seconds So we have to keep maintaining you know pace so that we don't lose grounds that we have gained till now. So uh having said so on a you know thumb basis as the 40:57 40 minutes, 57 seconds markets mature as the brands get you know uh stronger in terms of its equity your margin profiles keep improving because then you are able to command a 41:05 41 minutes, 5 seconds better pricing right so your discounts could be lesser and things like that. So that pattern will continue and more and more strength that we get the more and 41:13 41 minutes, 13 seconds more uh you know pricing power also we will get. 41:17 41 minutes, 17 seconds Got it sir. And so what's the feedback on the Malguri brand that we launched for snacks uh uh in our you know vision 41:25 41 minutes, 25 seconds to create multiple pillars in the consumer business. So what's the response? 41:28 41 minutes, 28 seconds Absolutely. So the the response is quite good there. We had done as I told you very small uh you know 100 store 150 41:36 41 minutes, 36 seconds stores kind of a pilot. Uh there was a lot of response on various aspects. 41:40 41 minutes, 40 seconds People have liked the product. There are certain variants where you know we are doing some product tweaking as well because there was certain feedback and 41:48 41 minutes, 48 seconds hopefully in a months or couple couple of months time uh you should be seeing a more you know broader uh launch at least 41:56 41 minutes, 56 seconds with some of the product categories. So yes we are going to scale that up uh pretty soon. 42:04 42 minutes, 4 seconds Got it sir. So uh last two questions very quickly. we have 60% capac 65% capacity utilization say and probably we 42:11 42 minutes, 11 seconds are at the 50,000 kind of a number I know you guided for 15% kind of a volume growth but let's assume if at all we get 42:18 42 minutes, 18 seconds an opportunity 20% then uh and next year next two years 20% kind of an opportunity that would be still under 72,000 ton you know kind of a volume at 42:27 42 minutes, 27 seconds aggregate so overall level even if this kind of opportunity arises that would not be constrained to our capacity utilization right we would be able to deliver that kind kind of grow. 42:37 42 minutes, 37 seconds Absolutely. Absolutely Viva we'll be able to deliver that kind of growth. We have that capacity and as I've told earlier also we are also we are always 42:45 42 minutes, 45 seconds on our tours. We are making sure that any growth opportunity is not lost because of any capacity even if it means 42:52 42 minutes, 52 seconds that we have to do some strategic uh tie-ups buy capacity from outside and you have seen four five years four years ago uh when we were you know uh we were 43:02 43 minutes, 2 seconds at 100% utilization we did take that step to buy capacity from outside and not let the growth the growth rates come down so that goes without saying we'll 43:10 43 minutes, 10 seconds not let the growth momentum suffer at all got it last question sir on the interest cost side to CFO Sir um we have seen 130 43:18 43 minutes, 18 seconds cr interest against uh you know AI26 now given our debt is gross level 1280 90 cr 43:25 43 minutes, 25 seconds right so at least on interest cost side against 130 cr probably 110 cr 11 uh you know around that number would be easily 43:34 43 minutes, 34 seconds we can pull off and we can save uh 18 20 cr around for the year. 43:39 43 minutes, 39 seconds uh so uh so we have a growth set of probably around 1,000 to,200 levels next 43:47 43 minutes, 47 seconds year as well as indicated by CEO in the in one of the questions. So if you take 1,200 at an average rate of 7.5% it 43:55 43 minutes, 55 seconds translates to close to 9095 crores. So somewhere around 100 crores would be an appropriate number is what I feel. 44:02 44 minutes, 2 seconds Got it. Very heartening to know. Thank you sir and all the best for 527. Thank you. 44:09 44 minutes, 9 seconds Thank you. The next question is from the line of Sanjay Satpati from Amperson. 44:14 44 minutes, 14 seconds Please go ahead. Uh yeah sir [clears throat] congratulations on executing so well. Uh so my question is that uh uh there is a 44:23 44 minutes, 23 seconds huge difference uh and volatility in your subsidiary performance that you report. uh and this quarter for instance 44:30 44 minutes, 30 seconds uh the subsidiaries made hardly any profit which is why the consolidated and standalone there is not much of a difference in profit uh and and this 44:39 44 minutes, 39 seconds keeps fluctuating a lot. Can you explain that? Uh that is one and the second thing is that it looks like there was a decisive shift 44:47 44 minutes, 47 seconds in your revenue mix towards fro freeze-dried uh coffee. Uh and uh and that also you said that as a lower 44:54 44 minutes, 54 seconds margin contract. uh was it some kind of a entry strategy which is why uh it is normally better profit uh should be 45:03 45 minutes, 3 seconds expected out of this frozen free trade but it didn't materialize and it will reverse going forward. 45:09 45 minutes, 9 seconds So you know first and foremost I think the looking at subsidiaries and trying to add up at the consolidated level is 45:16 45 minutes, 16 seconds not the uh right way because you know uh the the business is uh sort of centralized wherein you know the production planning will have uh this 45:24 45 minutes, 24 seconds thing to say that where does what gets produced which customer gets serviced from which this thing the business development teams at uh subsidiary 45:33 45 minutes, 33 seconds levels could be you know uh uh doing a higher margin business in some quarter lower margin business in some third quarter. So all of these play a role and 45:41 45 minutes, 41 seconds therefore you know the consolidated level is a better picture to uh to see uh and I I won't read much into you know 45:49 45 minutes, 49 seconds subsidiary performance and therefore you see sometimes the volatility in subsidiary performance and the second part is the freeze-dried uh thing that 45:56 45 minutes, 56 seconds you you have asked. Yes, there was a higher proportion of freeze-dried and uh this also depends on how the markets are shaping up. You know there are times 46:04 46 minutes, 4 seconds when the uh when the demand for freeze-dried goes up. There are times when demands fall you know and I actually two three years ago if you look 46:11 46 minutes, 11 seconds at long-term patterns when the coffee prices are high you will see that there is a little bit of a downtrading when the coffee prices starts to soften the 46:19 46 minutes, 19 seconds uptrading happens. So all these factors play a role in deciding what would be the proportion and we keep tracking some 46:27 46 minutes, 27 seconds of these trends that are evolving and accordingly not only do our business but also build our capacities uh uh you know 46:34 46 minutes, 34 seconds so that's that's how we uh we kind of play on this a lot of this is not driven by us but it is dependent on the market forces 46:42 46 minutes, 42 seconds understood and and what typically is it better to assume that uh the the profit of uh freeze dry is generally going will be higher. 46:51 46 minutes, 51 seconds Yeah. Yeah. Profit of feed light is always higher than uh spray. Okay. Okay. More premium product. Yeah. 46:59 46 minutes, 59 seconds There was some contract issue in this particular quarter. 47:02 47 minutes, 2 seconds Not contract issue. It's more of a you know phasing issue. So there are quarters when you will do you know uh because it is all dependent on when 47:10 47 minutes, 10 seconds which customer at what point of time wants their uh goods and all that. So quarterly there could be variations in these proportions. Some quarters you 47:18 47 minutes, 18 seconds will see higher proportions of spray dried some quarters lower proportion. So yeah quarter wise these variations come and uh therefore we always maintained 47:27 47 minutes, 27 seconds that it is best to see us on a slightly long-term uh perspective because quarters could give you a little you know uh varied picture. 47:37 47 minutes, 37 seconds Last question if you can sati I'm sorry to interrupt you sir I would request you to kindly rejoin the queue for follow-ups please. There are others who are waiting. Thank you. 47:48 47 minutes, 48 seconds We'll take the next question from Deepak from Sundaram Mutual Fund. Please go ahead. 47:54 47 minutes, 54 seconds Yeah. Thank you for the opportunity. Am I audible? Yeah. Yeah. Yes. 47:59 47 minutes, 59 seconds Yeah. Hi sir. So my first question is uh with respect to our exports. So could you please highlight like out of our total exports how much would be FOB based? 48:10 48 minutes, 10 seconds most of it almost if I take exports uh 70% of our sales would be FOB based right 48:19 48 minutes, 19 seconds okay and in the CIF based contracts are we facing any backlash from our customer to pass on the increased let's say 48:26 48 minutes, 26 seconds insurance or freight cost since you know since this middle crisis has started and we do export to US and Europe as well so 48:34 48 minutes, 34 seconds any any contract negotiation in terms of rate or are we able to fully pass on uh logistics cost increase to them. 48:42 48 minutes, 42 seconds No. So you know if you have done the contract earlier on earlier terms and conditions you will have to take on that right. So any increase or any this thing 48:50 48 minutes, 50 seconds in cost in CI contracts is not a backlash. It is actually a a stress on us. So in fact we go back to them asking 48:57 48 minutes, 57 seconds for increases but it may not happen all the time. So not all the costs uh can get uh passed through especially in PIF context. Yeah. 49:08 49 minutes, 8 seconds Okay. And sir any uh deception are we seeing let's say either in terms of uh any fuel availability or let's say 49:16 49 minutes, 16 seconds shipping routes uh towards this western exports or mean how are we managing it or is it like as of now there is no such 49:23 49 minutes, 23 seconds disruption that we have observed uh a little bit of a supply disruptions to the client that we were servicing in the Middle East for some time but we 49:32 49 minutes, 32 seconds haven't seen any root disruption because uh it was only the straight of Hormuz which was closed which is only for 49:38 49 minutes, 38 seconds mostly for oil not for goods and all and uh yes there has been certain increases in the logistics cost there has been 49:46 49 minutes, 46 seconds certain increases in the energy cost so that is there availability wise we haven't seen any challenge but there are challenges in terms of cost pressures on 49:54 49 minutes, 54 seconds certain accounts okay helpful sir all the best thank you the next question is from the 50:03 50 minutes, 3 seconds line of sness from Helio's capital please go ahead Um yeah hi thanks for the opportunity. 50:11 50 minutes, 11 seconds So when you're guiding for the volume because of 15% next year so then what is the blended utilization level that we target to achieve in apply 27. 50:22 50 minutes, 22 seconds So when you're saying blended utilize you're saying utilization of the capacity yes so you know we probably from here 15% on 50:31 50 minutes, 31 seconds the basis that you can do a bad calculation we are looking at a 7 to 10,000 additional tons of uh you know 50:39 50 minutes, 39 seconds sales that could happen so like you said it's 65% right 50:46 50 minutes, 46 seconds 65 will go to around 72 73 if I were to be very specific Okay. And then that becomes to what 50:54 50 minutes, 54 seconds level in FY28 which is when you look for a couple 78. So that will become to around 80 82 85 maybe. 51:02 51 minutes, 2 seconds Okay. Understood. Yeah. Thank you. That was my question. 51:06 51 minutes, 6 seconds Thank you. Thank you. The next question is from the line of yogics. Please go ahead. 51:15 51 minutes, 15 seconds Hi. Thanks for the opportunity and congratulations on a good set of uh numbers. So most of the questions have been answered. Just one followup on your 51:23 51 minutes, 23 seconds branded uh D2C business. Uh so like it has been scing really well. Uh last quarter you mentioned about an AITA uh 51:30 51 minutes, 30 seconds positive uh it has done. So going forward what is your expectation? Uh can we expect the AITA to increase or would 51:37 51 minutes, 37 seconds you like to still maintain it and uh you know pull back the money to grow the business further? 51:42 51 minutes, 42 seconds Yeah. So we'll keep maintaining the same percentage levels which means that a large portion of it will be pulled back. 51:48 51 minutes, 48 seconds uh as I was mentioning that we are looking at new regions, new categories. 51:53 51 minutes, 53 seconds So we'll try to kind of develop that also. So it will be in an investment mode uh uh in the next 3 four years. 52:01 52 minutes, 1 second Got it. And sir uh broadly can you also quantify what was the proportion of small packs in our overall business? 52:08 52 minutes, 8 seconds So largely it is around uh you know 20% or so it used to be and I'm talking about broad this thing because uh on a 52:16 52 minutes, 16 seconds on a very small uh quarterly basis becomes difficult to assess but largely it is in that zone if you remember uh 52:24 52 minutes, 24 seconds two three quarters or let's say last year we were talking about a number around 15% or so. So it has increased and that has also helped us improve our 52:31 52 minutes, 31 seconds profitability. And going forward we are also and we have last time we had spoken that we are trying to see if we could 52:38 52 minutes, 38 seconds you know go up the value chain as much as possible for a lot of more of our clients so that uh that endeavor will 52:45 52 minutes, 45 seconds continue and we'll try and see if we can improve upon this going forward. 52:51 52 minutes, 51 seconds Fair enough sir. And just last one if I can squeeze in the new markets that you want to enter for your branded uh business by when can we expect that and 53:00 53 minutes uh what kind of scale uh should we uh think about those businesses. 53:06 53 minutes, 6 seconds So this one is a little tough to answer but you know just to give you a little color that where what are we trying so of course there is one market which is 53:14 53 minutes, 14 seconds the US market which we are uh actively evaluating that what are the ways and means to enter that market. uh uh 53:21 53 minutes, 21 seconds Vietnam is one more market which we are evaluating that because we have our setup there so it makes a lot of sense to uh see if we can build something 53:29 53 minutes, 29 seconds there. Now what is the scale that we want to build that's a little tough to answer but you know if I were to say UK per call let's say if it's already a 30 53:38 53 minutes, 38 seconds cr or 25 30 cr kind of a revenue we probably are looking to kind of get to 100 cr within maybe two years 53:47 53 minutes, 47 seconds or 3 years or so. So that's uh that's the kind of scaling up we are we will try and do uh there. Uh as far as the 53:54 53 minutes, 54 seconds other markets like US and Vietnam, it's a little premature to comment on the kind of scaling because let us feed them first and see how what is the kind of 54:02 54 minutes, 2 seconds traction we are getting. I'm sure there are certain markets where we will go wrong as well. So it's not that everywhere or everything that we do will 54:10 54 minutes, 10 seconds be uh will be bang on. So, so a lot will evolve and closer to our evolution and our understanding that what is going 54:18 54 minutes, 18 seconds right what is not going right we probably will be able to give you a sense of scale but whatever I can I've given you a scale that how we are looking to build up uh some of these 54:27 54 minutes, 27 seconds markets sir that's really helpful uh thank you and all the very best to you and your 54:34 54 minutes, 34 seconds team sir thank you thank you we'll take the next question from the line of Kenneth Mendons from TCGNC. Please go ahead. 54:45 54 minutes, 45 seconds Uh hi sir. Uh I just wanted some color about for a B2C business about how the nonSouth uh growth has been and uh 54:53 54 minutes, 53 seconds secondly uh while you have mentioned briefly about reinvesting profits generally what is the medium-term 55:01 55 minutes, 1 second profitability trend for the business of the B2C business? 55:06 55 minutes, 6 seconds Yes. So okay yeah so the of course the non-s south uh business is growing at a 55:12 55 minutes, 12 seconds faster pace now uh yes the bases are still very very small but uh we are you know putting a lot more effort into 55:21 55 minutes, 21 seconds these markets to make sure that we build a sizable base here as well uh as we speak our market shares have also seen positive movements in some of the key 55:29 55 minutes, 29 seconds cities like uh Delhi Bombay so uh so probably our our efforts are also bearing fruits in these markets 55:37 55 minutes, 37 seconds So we are we are we are actively uh you know uh seeking to grow at a much higher clip in these markets than the south 55:45 55 minutes, 45 seconds markets. So that is there as far as the profitability I I had already mentioned that we probably are at around four 55:52 55 minutes, 52 seconds five% AITA levels. We'll keep the AIA levels there so that all the additional profits are plowed back into you know building the brand and growing the 56:00 56 minutes business. So that's that will be our model. So next 2 three years I don't think so we will uh look to milk it. So 56:08 56 minutes, 8 seconds we'll keep the the EITA levels at the same percentage levels. 56:13 56 minutes, 13 seconds Sure sir. Thank you. And and my last question is just uh uh given that you mentioned that we are seeing um 56:20 56 minutes, 20 seconds heightened costs due to freight insurance uh and given that largely we are an export business. Do we expect any sort 56:29 56 minutes, 29 seconds of impact uh on margins uh despite the guidance you've given? 56:35 56 minutes, 35 seconds So uh of course last quarter there was a bit of an impact little impact that uh that we saw. Uh but what I see as we 56:43 56 minutes, 43 seconds speak I'm seeing much more stability and hopefully we'll keep our fingers crossed that things only improve uh from here. 56:49 56 minutes, 49 seconds So uh we don't see much of because you know uh since uh 7 100% of our business 56:56 56 minutes, 56 seconds is on cost plus and 70% is on FOB a lot of our you know these kind of fluctuations are we are we are we are 57:04 57 minutes, 4 seconds insulated against so therefore there won't be much of an impact but I'm I'm hoping and we all are that uh the 57:10 57 minutes, 10 seconds situation improves from here so we don't see much of an impact uh on the guidance that we have given. 57:18 57 minutes, 18 seconds Thank you sir. Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to Mr. Pravin Japur for 57:26 57 minutes, 26 seconds closing comments. Thank you and over to you sir. 57:29 57 minutes, 29 seconds Uh so thank you everyone for uh joining the call. Uh I appreciate Shika Institutional Securities for holding 57:37 57 minutes, 37 seconds this call and uh we'll all meet uh in the next quarter. Thank you everyone. 57:43 57 minutes, 43 seconds Thank you members of the management. On behalf of Ashika Institutional Equities, that concludes this conference. We thank you for joining us and you may now disconnect your lines.