Dodla Dairy Limited — Q4 FY26

Dodla Dairy Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=BcviWY0KVgI Published: 3 hours ago

0:01 1 second Ladies and gentlemen, good day and welcome to Dodla Daily Limited Q4 FI26 earnings conference call. This 0:09 9 seconds conference call may contain forwardlooking statements about the company which are based on the beliefs, opinions and expectations of the company 0:17 17 seconds as on the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. 0:27 27 seconds As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation 0:34 34 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing star then 0:42 42 seconds zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Dodla Silradi, managing director of Dodla. Thank you and over to you sir. 0:55 55 seconds Uh thank you very much. Good morning to all the participants. On behalf of GLAD Limited, I extend a very warm welcome to everyone joining us on our call today. 1:05 1 minute, 5 seconds On this call, I'm joined by our CEO Mr. 1:07 1 minute, 7 seconds BK Rei, CFO Mr. Muri Moan Raju and SGA, our investor relations advisor. I hope 1:14 1 minute, 14 seconds everyone has had an opportunity to go through the financial results and investor presentation which have been uploaded on the stock exchanges and our 1:22 1 minute, 22 seconds company's website. Financial. Now coming to the business uh financial year 26 was a year that tested the dairy industry. 1:31 1 minute, 31 seconds Milk supplies remained constraint for most of the year. Procurement cost inflation were sharp and erratic rainfall affected demand for certain value added products in some regions. 1:42 1 minute, 42 seconds Against that backdrop, Gerla dies delivered resilient performance. Revenue growth was 11% yearon year. Abitar 1:49 1 minute, 49 seconds margin stood at 7.5% and a pat margin of 6.5%. 1:54 1 minute, 54 seconds Notably the performance is overall on the healthy base of FY25 which was which delivered an exceptional growth of almost 20 years over the previous year. 2:04 2 minutes, 4 seconds Uh to better understand the trends of the dairy industry one should look at the 3 to four year cycle. On that basis our fouryear kar stands at a healthy level of 16%. 2:14 2 minutes, 14 seconds Based on our growth and expansion plans for the next 3 to four years, we are confident to maintain or even surpass 2:21 2 minutes, 21 seconds this KGA number in the long run. The pressures we faced were industry-wide in such tough times. The diversifications 2:28 2 minutes, 28 seconds which we have built via Africa and Orga feed played a critical role. Now coming to the quarter performance. During the 2:36 2 minutes, 36 seconds quarter, we recorded our highest ever revenue growth for the fourth time in a row with a top line of rupees 1,074 2:44 2 minutes, 44 seconds crores, reflecting a year-on-year growth of 18%. Primarily driven by volume expansion. The EITA for the quarter 2:53 2 minutes, 53 seconds stood at 5 5% and PAT margin stood at 6.5%. 2:57 2 minutes, 57 seconds Margins remained under pressure due to elevated milk procurement costs and a calibrated pricing strategy. An increase in procurement price was not fully 3:06 3 minutes, 6 seconds passed on to the selling price to maintain the market share. A pricing strategy is in line with the overall industry. Going forward, the situation 3:14 3 minutes, 14 seconds is turning positive. Milk supply is improving which would result in a normalization of procurement costs. So milk sales some price hikes will also be 3:23 3 minutes, 23 seconds considered. Some trends are already visible where a few of the northern players have already increased their milk prices. Our value added product 3:31 3 minutes, 31 seconds segment witnessed steady performance during the quarter. Due to operational variability, the overall VAP portfolio could not grow to its full potential. 3:40 3 minutes, 40 seconds Once our plant expansion fully stabilizes our plant expansion d plant expansion directionally, we are confident that the VAP mix will improve 3:48 3 minutes, 48 seconds further. This growth will be delivered by curd, paneer and ice cream. Broadly we are targeting closer to 22 to 32 to 3:56 3 minutes, 56 seconds 34% in terms of web contribution. Africa business recorded a revenue of rupees 4:03 4 minutes, 3 seconds 151 cr reflecting a robust growth of 48% year on year driven by more than 60% 4:10 4 minutes, 10 seconds growth of in liquid milk sales. As a result of continuous increase in the scaling of business along with better 4:17 4 minutes, 17 seconds operational efficiency, we have achieved our highest ever EITA number of rupees 18 crores in Africa and this is for the 4:25 4 minutes, 25 seconds quarter the work quarter. The decision that we took 12 years ago to extend our footprint in Africa has now become an 4:33 4 minutes, 33 seconds important engine for long-term growth of the company. We see Africa scaling towards 15 to 18% of consolidated revenue by FY28 supported by a phase 2 4:42 4 minutes, 42 seconds expansion in Uganda which will include pasturized milk and milk products that will be sold in Uganda. Oraga meat 4:50 4 minutes, 50 seconds business delivered a strong revenue growth of 23.2% yearonear with a slight dip in margin as a factor of higher raw 4:57 4 minutes, 57 seconds material cost and expansion of our footprint of distribution. Uh this business complements our core dairy operation with the strategic angle. It 5:06 5 minutes, 6 seconds helps in strengthening farmer relationships through assured feed supply and creating an important loyalty loop in our procurement network. OSAM 5:14 5 minutes, 14 seconds business reported a steady progress with our focus remaining impact on enhancing operational efficiency in this business to improve profitability. I also would 5:23 5 minutes, 23 seconds like to welcome Mr. Dr. Silpa who got appointed by the board as a senior management personnel for strategy and transformation. Sila has spent 5:32 5 minutes, 32 seconds considerable time understanding the business across verticals and now she's increasingly taking responsibility in the strategic and operational areas. Now 5:40 5 minutes, 40 seconds speaking about the operation expansion project our Maharashtra project is progressing as per the schedule 5:47 5 minutes, 47 seconds timelines and is expected to start commercial operations by the end of FY 27. The work is under progress and 5:55 5 minutes, 55 seconds rupees 106 crores worth of capex has already been deployed cumulatively across 25 and 26. We have also made decent progress towards improving our 6:04 6 minutes, 4 seconds operational efficiencies of the Osan business, improved its product quality and upgraded the infrastructure. 6:10 6 minutes, 10 seconds We will we should continue in this direction till margins are at par with the overall company level margin. We were also allocated a 7 acre land parcel 6:18 6 minutes, 18 seconds by the BR industrial area development authority for a D project which will call for additional investment of around 4.4 crores towards the land. The project 6:27 6 minutes, 27 seconds is presently under consideration and further detail shall be disclosed after board approves. On the Uganda expansion plan, we acquired 70 acres of land parcel for a green field expansion. 6:37 6 minutes, 37 seconds Total capex budgeted for this project is currently around 60 crores including land as well as the plant. It will be 6:45 6 minutes, 45 seconds executed in a phased manner and will be completed by year end of 29. Uh before I hand over to BK, let me share a directional news for FY27. 6:55 6 minutes, 55 seconds We expect revenue growth to be in the low to mid supported by Osam's fular contribution. Africa continuing on its 7:02 7 minutes, 2 seconds current trajectory and an 8 to 9% organic growth in our India business. We are expecting a gradual gross margin 7:10 7 minutes, 10 seconds recovery of 50 to 100 basis points over FY26 level. As procurement normalizes and apprising actions take effect, 7:18 7 minutes, 18 seconds effective tax rate will return to the normal 25 to 27 range post completion of the favorable tax orders we received in FY26. 7:26 7 minutes, 26 seconds On capital allocation, let me articulate the firm clearly. Our priority order is first is first fund growth capex where 7:35 7 minutes, 35 seconds Maharashtra, Uganda and our current regular capex are both covered from our internal acral. Second regular 7:42 7 minutes, 42 seconds dividends. Third, selective bolt-on acquisitions where we see procurement or distribution synergy. The combination of strong company fundamentals, a clean 7:51 7 minutes, 51 seconds balance sheet, healthy cash flows and all of these growth initiatives underpins the commitment towards the disciplined capital allocation and 7:58 7 minutes, 58 seconds long-term sustainable growth of the company. With this brief, I will now hand over to our CEO of the company, Mr. 8:05 8 minutes, 5 seconds DV. Thank you very much. 8:08 8 minutes, 8 seconds Uh, thank you Mr. Simi. I will now walk you through the consolidated performance highlights of our business. During the 8:16 8 minutes, 16 seconds quarter, despite a shortage of milk in overall industry, our milk procurement level remained stable at 18.5 lakh 8:24 8 minutes, 24 seconds liters per day, which is an increase of 13.4% on year basis. 8:29 8 minutes, 29 seconds Underscoring the strength of our procurement network longstanding farmer relationship the average procurement cost in Q4 FI26 8:39 8 minutes, 39 seconds to 31 rupees per liter as a 38.7 per liter in the previous quarter and 37.4 liter Q4 FI25. 8:50 8 minutes, 50 seconds However, we did not entirely pass on this increase in cost to the consumers. 8:57 8 minutes, 57 seconds Our average milk sales price for the quarters stood 58.4 per liter which was 57.7 per liter in the previous quarter. 9:08 9 minutes, 8 seconds This was prim primary reason for our margin being under pressure during the quarter. 9:13 9 minutes, 13 seconds To give some context our standalone India IITA margin for the quarter reflected surface quarter of the 9:21 9 minutes, 21 seconds procurement cost inflation in this cycle. The consolidated AITA margin of 5% was supported meaningfully by Africa 9:31 9 minutes, 31 seconds and AR which together delivered around 22 course in Q4 9:38 9 minutes, 38 seconds on 9 months basis our standalone India AITA margin was approximately 6 to 7%. 9:46 9 minutes, 46 seconds in Q4 represented cyclical throw. We expect this begin to recover in Q1 FY27. 9:55 9 minutes, 55 seconds We also witness some cost pressure in packing and logistic cost among other things due to the shift of bulk sales in 10:04 10 minutes, 4 seconds higher liquid milk and milk product sales. 10:08 10 minutes, 8 seconds Speaking of Africa, we continue with our growth momentum in the Kenya market. The business is now seeing the benefits of 10:17 10 minutes, 17 seconds scale with profitability improving steadily. We continue to price our products competitively to strengthen 10:26 10 minutes, 26 seconds market presence and remain confident of gradual improvement in markets. Now 10:32 10 minutes, 32 seconds coming to our product sales mix. Dougla recorded its highest ever milk sales of 14 lakh liters per day driven by the 10:41 10 minutes, 41 seconds continuous efforts to our team towards expanding the geographic reach across India and Africa. 10:48 10 minutes, 48 seconds Total value added products stood rups 2969 million as against 2841 million in Q4 FI25. 10:59 10 minutes, 59 seconds Excluding bulk sales, VAP delivered growth of 21% on year-on-year basis. 11:05 11 minutes, 5 seconds Current sales volume reported a healthy growth of 15.4% on year and stood at 442 11:14 11 minutes, 14 seconds metric tons in terms of value. Cur sales grew by 19.1% on year basis. 11:22 11 minutes, 22 seconds Products like curds, paneer, buttermilk, flavor, lassi, etc. delivered a recent 11:29 11 minutes, 29 seconds growth whereas other products remained neutral due to seasonal variance within the orop business. The revenue 11:37 11 minutes, 37 seconds growth is healthy and utilization levels also are scaling up in a good way. 11:43 11 minutes, 43 seconds However, rising the raw material input costs have not been fully passed on to the farmers. In order to sustain 11:50 11 minutes, 50 seconds long-term duration aimed to low milk supply environment heightened competitively intensity some 11:57 11 minutes, 57 seconds modernization in the input cost is expected in the upcoming quarter which would improve the profitability of this business. 12:06 12 minutes, 6 seconds our pricing strategy in line with the overall industry and we also see an opportunity to increase milk price in 12:14 12 minutes, 14 seconds the near terms to pass on some part of elevated procurement cost. We are also witnessing some modernization in 12:22 12 minutes, 22 seconds procurement cost as the milk supply in the industry is coming back. Hence we expect a gradual improvement in the 12:29 12 minutes, 29 seconds margin going ahead with the strong underlining fundamentals and expansion plans in place. We remain focused on 12:37 12 minutes, 37 seconds effective execution and achieving long-term objectives while delivering profitability growth. Now I would 12:44 12 minutes, 44 seconds request our CEO Mr. Muran Raji to share the financial highlights for the quarter. Thank you. 12:53 12 minutes, 53 seconds Uh thank you Mr. Vik and a very good morning to all the participants on the call. Talking about consolidated 13:00 13 minutes financial performance in Q4 FI26 revenue from operation per Q4 FI26 to74 13:10 13 minutes, 10 seconds cr making its highest ever quarterly revenue growing 18.1 1% on a yearon-year 13:17 13 minutes, 17 seconds basis from 910 cr in Q4 FI25 gross profit to date 247 cr with a 13:25 13 minutes, 25 seconds margin of 23%. Employee expenses for the quarter stood at 52 crores of 13:31 13 minutes, 31 seconds approximately 27% from FI25 primarily reflecting of inclusion Maharashtra 13:39 13 minutes, 39 seconds green field expansion and the Kenya plant ramp up. Other expenses stood at 141 cr compared to 123 cr in the 13:47 13 minutes, 47 seconds corresponding quarter last year. While other expenses remained broadly in line with the revenue as a percentage of 13:55 13 minutes, 55 seconds sales, the increase in absolute terms was primarily driven by increase in infrastructure related expenses 14:02 14 minutes, 2 seconds including rent, employee travel and the conveyance cost due to an increase in the headcount of the employees. Higher 14:10 14 minutes, 10 seconds transport costs going to shift in product mix from bulk towards liquid milk and vap. We reported a bid of 54 14:19 14 minutes, 19 seconds crores for the quarter with an aida margin of 5%. 14:24 14 minutes, 24 seconds Depreciation expense increased to 22 cr during the quarter has again 18 cr in 14:32 14 minutes, 32 seconds the same period last year. Other income for the quarter should at 20 cr including 10 cr of interest income tax 14:41 14 minutes, 41 seconds refund pertaining to interest on a tax refund following a favorable ITA order. 14:49 14 minutes, 49 seconds In Q4, we recorded an exceptional item that is 3 crores worth of reversal on the one-time labor core expenses which 14:57 14 minutes, 57 seconds was recorded in Q3 FI26. An exceptional expense of 5.7 cr was recognized in the 15:05 15 minutes, 5 seconds previous quarter pursuant to the reviled labor code guidelines. However, the actual impact was lower than initially 15:13 15 minutes, 13 seconds estimated due to the restructuring of salary component. Additionally, the company recorded a tax reversal of 29.2 15:23 15 minutes, 23 seconds crores for the quarter relating to earlier years following favorable order received from the ITAT. This tax credit 15:32 15 minutes, 32 seconds represents the final portion and accordingly no further impact shall be reflected from the next quarter onwards. 15:40 15 minutes, 40 seconds Net profit for the quarter Q today 70 cr with net profit margin of 6.5%. 15:48 15 minutes, 48 seconds I want to call out the oneoff report to Q4 part explicitly. 15:54 15 minutes, 54 seconds The 70 cr reported Q4 part includes 29 critical tax credit which I just 16:00 16 minutes mentioned and 10 cr of interest income and the related tax refund. Excluding these two one-off items, our Q4 16:10 16 minutes, 10 seconds underlying part is approximately 40 cr for the full year FI26 reported part of 16:17 16 minutes, 17 seconds 267 cr includes total one-off benefits of approximately 70 cr that is 58.7 cr 16:25 16 minutes, 25 seconds of earlier tax credit through the year and 10 cr of related interest income adjusted FI26 party therefore 16:34 16 minutes, 34 seconds approximately 250 to tinker with an adjusted part margin of around 5.2%. 16:41 16 minutes, 41 seconds This is the clean baseline against a speed FI27 should be evaluated. 16:47 16 minutes, 47 seconds Now coming to FI26 performance revenue from operations grew by 10.9% yearonear 16:54 16 minutes, 54 seconds to the highest level 4,125 cr compared to 3,720 cr in the previous year. Rem 17:03 17 minutes, 3 seconds revenue remained over 11,000 crores for all the quarters of FI26. Gross profit 17:11 17 minutes, 11 seconds increased by 3.3% year on year to,55 cr. A bit for the 17:19 17 minutes, 19 seconds year stood 3 cr 9 cr with a bit of margin at 7.5%. 17:25 17 minutes, 25 seconds The company reported a tax after reported a profit after tax of 267 17:32 17 minutes, 32 seconds crores translating into a fat margin of 6.5%. 17:37 17 minutes, 37 seconds The company generated healthy cash flow from operations of 295 cr during the year while total cash and cash 17:45 17 minutes, 45 seconds equivalent to date 649 cr as of 31st March 2026. 17:52 17 minutes, 52 seconds This includes cash and bank balance over uh cash in bank plus our current as well 17:59 17 minutes, 59 seconds as non-current investment as all of those are liquid in nature. 18:05 18 minutes, 5 seconds Our debt to equity remains under control at 0.03 level. The capital investment 18:13 18 minutes, 13 seconds done in FI26 is about 430 cr. This includes around 271 cr of expansion 18:22 18 minutes, 22 seconds capex in HRU 86 crores in Maharashtra during FI26 taking accumulated 18:28 18 minutes, 28 seconds Maharashtra spend across FI25 and FI26 to 196 cr against a total project 18:36 18 minutes, 36 seconds envelope of 280 cr and the balance 73 cr of maintenance capex for FI26. The board 18:45 18 minutes, 45 seconds has recommended a final dividend of 5 rupees per equity share. With this we conclude this presentation and open the floor for further discussion. 18:58 18 minutes, 58 seconds Thank you very much. We will now begin the question and answer session. 19:04 19 minutes, 4 seconds Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove 19:11 19 minutes, 11 seconds yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 19:19 19 minutes, 19 seconds question. Ladies and gentlemen, we will wait for a moment while the question Q assembles. 19:44 19 minutes, 44 seconds The first question is from the line of Pravin Kumar from Equitas Capital Advisers. Please go ahead. 19:51 19 minutes, 51 seconds Hello. Yeah. Hi. Uh thanks for the opportunity. Uh I had a few questions. 19:55 19 minutes, 55 seconds The first one was uh uh can you give us a sense of what is the steady state margin that we can expect in this current environment because earlier in 20:03 20 minutes, 3 seconds the call you had specified 50 to 100 basis point improvement uh margin improvement from fi 26 levels which 20:10 20 minutes, 10 seconds would still take you to about 8% at ana level uh eight or eight and a half which is at the lower end of the earlier 20:17 20 minutes, 17 seconds margin band which you were uh referring to. So are you recognizing a structural uh lowering of the steady state margin 20:24 20 minutes, 24 seconds that you can uh uh you know achieve or is it like uh are you saying that FI27 is a year in transition and then you know then onwards there are factors 20:33 20 minutes, 33 seconds which can take it upwards. Yeah that's my first question. 20:35 20 minutes, 35 seconds So so thank you very much for the question. It's I think it's more in terms of being cautious with this whole uncertain environment that we are in 20:44 20 minutes, 44 seconds because none of us are able to take sure of what is going to be pricing of fuel, pricing of plastics, uh the whole you 20:51 20 minutes, 51 seconds know agriculture under impact with URA production. None of this is very clear for us. So that is what it's leaving. We rather be on the cautious side of taking 20:58 20 minutes, 58 seconds what can be know what we can achieve even by considering all the uncertaintities that are there. So this 21:05 21 minutes, 5 seconds is more a 27year kind of year where you know taking into consideration uncertaintities what's what is going on 21:12 21 minutes, 12 seconds but we are trying to give this kind of a guidance. 21:17 21 minutes, 17 seconds Um so so just as aside to that do you see for example when you're talking about the ura issues etc. On one hand, 21:25 21 minutes, 25 seconds it can indirectly impact your your feed business, but on the other hand, you know, if if farmers are constrained on the agricultural side of things, they 21:33 21 minutes, 33 seconds might focus more on on the livestock part and, you know, might improve uh on on the dairy uh procurement side, right? 21:41 21 minutes, 41 seconds So, could you throw some light? You're exactly right. Right. If there is drought and less of agriculture, then animalry steps in to become acts as a 21:48 21 minutes, 48 seconds buffer for the farmers to grow. But like I said, we're not too sure where that's going to head, right? is Elino actually going to play out and more procurement 21:56 21 minutes, 56 seconds pricing coming in. So that is the reason we are being more cautious because a you have a weather which is normally there as an uncertainty but added to that the 22:04 22 minutes, 4 seconds uncertaintity of the war and the pricing that is coming. So keeping that into consideration we are being more cautious. 22:11 22 minutes, 11 seconds So to understand you you are saying that post FI27 assuming some of these things normalize you can get back to your more normal kind of 22:19 22 minutes, 19 seconds it'll come back to the normal. Yeah. And also one more thing is like in these uncertain times right you know we have to be very careful of taking care of 22:26 22 minutes, 26 seconds both the ends of the chain that is the farmer and the customer. If we go and unreasonably try to kill the customer then we'll lose not only consumption 22:35 22 minutes, 35 seconds will start taking a dip. If we are unreasonable with the farmer long-term impact in terms of productivity also will get hit. So keeping both into 22:42 22 minutes, 42 seconds consideration is why we are being more cautious than being aggressive. 22:46 22 minutes, 46 seconds Understood. And on the VAP mix, can you throw some light on how are you trying what are the steps that you're taking to reduce the seasonality on that? And I 22:54 22 minutes, 54 seconds think you had already indicated some kind of a mix stable mix you want to get to but what if you can throw some light on how do you you know plan to reduce 23:02 23 minutes, 2 seconds the seasonality part of it to the extent because a lot of your existing products in the web are somewhat seasonal in nature. So yeah basically seasonality impacts three 23:10 23 minutes, 10 seconds major products for us. One is ice cream which does not move the needle significantly because it's a smaller portion as the overall buttermilk luffy 23:17 23 minutes, 17 seconds and curd are the ones which majorly go affected with the seasonality that I think will be very it's a southern consumption habit that if there is more 23:25 23 minutes, 25 seconds summer people shift more towards the fermented products we are trying to see that if it becomes a throughout the year product what was exclusively a two to 23:33 23 minutes, 33 seconds three months we are trying to extend that to a 6 months period to see that people start using it as a as a refreshment rather than worrying 23:41 23 minutes, 41 seconds promote it as a summer product. On the other hand, products like uh paneer have improved for us. Paneer has seen a significant growth that has come in in 23:49 23 minutes, 49 seconds the local consumption once placements are in place and also that we're looking at things like our flavored milk which is also expanding and growing at a a bit 23:56 23 minutes, 56 seconds of a steady state growth that we're looking at growing those products. I think in the days to come uh depending on customer habits and health grounds we 24:04 24 minutes, 4 seconds will think that even buttermilk and such will become a regular product. Other than that I think the shift will not be we will not be able to change customer habits dramatically. 24:15 24 minutes, 15 seconds Understood. And the last question was on the O on OSAM. What what operational changes incrementally are you driving to you know converse OSAM margins with 24:23 24 minutes, 23 seconds overall company margin and uh explain in detail. 24:27 24 minutes, 27 seconds Yeah. The operational margins that we're looking at OSAM. See basically broadly it's on all fronts right. It is on production it's on market and it's on 24:35 24 minutes, 35 seconds procurement. I think the operational efficiencies that you're saying I'll ask BBK to give you more in detail what all are the operational efficiencies in OSAM 24:43 24 minutes, 43 seconds that we have undertaken which will help us improve our yeah yeah seeam you know when we uh see we have implemented SAP you know lot of 24:52 24 minutes, 52 seconds infra correction we have done lot of stresses being towards quality and lot of logistics cost you know so everything 24:59 24 minutes, 59 seconds you know was streamlined so since you know afterward you know in a couple of months it took you Maybe in the coming year you know you will see further uh 25:08 25 minutes, 8 seconds refining and a lot of operational efficiencies you know some so what kind of time will it take for it to converge and how does this you know 25:17 25 minutes, 17 seconds you're talking about now new land allocation and spending on that for expansion further in Bihar uh so how do you how does that uh affect the margin 25:25 25 minutes, 25 seconds convergence trajectory so presently what we're looking at it is the land because the government is operating that's only for a future project which will not be immediate but 25:33 25 minutes, 33 seconds more like we said we'll have to go through the board approvals and get it. 25:37 25 minutes, 37 seconds But existing operations improvement is still what we're looking at. We look at between 6 to 12 months will be that you'll see the all the improvements 25:44 25 minutes, 44 seconds getting into effectively and then on it'll come back to the regular margins as the overall company structure. Thank you. Thanks. I'll fall back with you. 25:56 25 minutes, 56 seconds Thank you. Next question is from the line of Yashena from Capital. Please go ahead. 26:04 26 minutes, 4 seconds Uh hi thank you for taking my question. 26:06 26 minutes, 6 seconds My question is on the cycle do you see anything different about this current d cycle. 26:12 26 minutes, 12 seconds Uh hi Ash yes what we have seen is there's a significant like know as usual when the summers come in we have seen a significant uptake in volumes increasing 26:20 26 minutes, 20 seconds in the first quarter that is one on the sales side where we see the significant improvement happening in the product mix giving a better realization over the 26:27 26 minutes, 27 seconds previous last year the same period but on the other end procurement was still under stress we are seeing improvement time and we hope that no maybe in 26:34 26 minutes, 34 seconds another month or so that will also start to improve I think Maharashtra and Karnataka have improved a bit in terms of productivity we are waiting to to see 26:41 26 minutes, 41 seconds how the productivity in the Tamil Nadu Andra and Telang Telangana and other places will come into place. So the shift has happened in the proper manner 26:49 26 minutes, 49 seconds comp the sales side procurement is also on track. We hope to see better results coming in in the next months. 26:56 26 minutes, 56 seconds Okay. Secondly, uh are corporate raising their prices in all the all the regions you are operating in the southern states? 27:05 27 minutes, 5 seconds See we have they have increased the selling prices. Amul and mother are just increased the two rupee selling prices. 27:12 27 minutes, 12 seconds We have already taken the price increase in the month of March itself mid-March itself we have taken the increase. So the cooperators are just following the 27:20 27 minutes, 20 seconds increase that we have taken to compensate the cost. 27:25 27 minutes, 25 seconds Uh and over the next two to three months would you be further taking price hikes and what would that range be in? uh we won't be taking price hikes per se but 27:34 27 minutes, 34 seconds we will be trying to correct certain things that are there right like if our for example if the packaging material it'll be only minor corrections that we will take not a major uh price 27:42 27 minutes, 42 seconds correction because already we have a significant headroom over the cooperatives that are there we will only correct more on the procurement side 27:50 27 minutes, 50 seconds okay lastly uh just to confirm you said that margins will be reverting to mean by FI28 right yes okay thank Thank you. 28:03 28 minutes, 3 seconds Thank you. Next question is from the line of Abishek Mahar from Systematics Group. Please go ahead. 28:10 28 minutes, 10 seconds Yes. Hi sir. Thank you for the opportunity. I just wanted to check uh what is uh the what is the mid procurement cost uh that you're seeing 28:18 28 minutes, 18 seconds currently as of today? What is that level? and also with the pricing that you have taken so far as of today what is what part of the cost inflation is is 28:27 28 minutes, 27 seconds currently covered already as of uh as of miday that's what I wanted to check first so mi will answer that but you what 28:35 28 minutes, 35 seconds you're saying is what is the price increase in procurement and what is the price increase in sales to have compensated the price increase correct 28:43 28 minutes, 43 seconds yeah broadly yes I just wanted to check what so you gave the number for the procurement cost for the fourth quarter but what is it today and the pricing that we taken so far since we've 28:51 28 minutes, 51 seconds indicated we are not planning any further major hikes what part of inflation is covered as of now yeah majority the procurement price in 28:59 28 minutes, 59 seconds line with whatever the March prices there is no major increase okay whatever we provided as a consolidated 37.36 to 29:07 29 minutes, 7 seconds 40.97 that is a 9.7 of growth or there year on year the same thing is continuing at a standalone it is a 9.3% 29:16 29 minutes, 16 seconds okay so we have passed on around to answer your question I think we have passed around one rupee of the inflation in the 29:23 29 minutes, 23 seconds sales recovery that we have already done currently that we are doing. We're anticipating the procurement improves we should get down another rupee or so will be coming down in the procurement price. 29:35 29 minutes, 35 seconds Great. So, so if I'm hearing correctly as of midmay there is no sequential increase from the number that you gave out on the procurement cost front. Is that the right understanding to take? 29:43 29 minutes, 43 seconds Yes, that's the right understanding. No price reduction but we're anticipating certain areas of price reduction become effective in end May. 29:51 29 minutes, 51 seconds All right sir. And second question is uh for FI27 if you can indicate what is the capex that we are planning and what will be its breakup. I think you have given 30:00 30 minutes the the FI26 to FI28 capex uh number but for what will be that number for FI27 30:07 30 minutes, 7 seconds and also just some bookkeeping numbers if you can share the um the console overall realizations and the VAP realizations for the fourth quarter. 30:15 30 minutes, 15 seconds Yeah that's it. 30:16 30 minutes, 16 seconds Yeah. So basically regarding the I will give Modi will give you the number specifically about uh the capex up to 30:24 30 minutes, 24 seconds the current year and in the future capex that we're looking at broadly it will be the highest number which will keep coming from Maharashtra Osam and Africa 30:32 30 minutes, 32 seconds business I think Mi will give you the specifics in terms of uh what we're looking at our capex and also the uh you wanted the fourth quarter numbers right? 30:42 30 minutes, 42 seconds Correct. Yes. Yes sir. Yes. 30:45 30 minutes, 45 seconds Yeah. Both of them. FY26. Fourth quarter numbers. We shall fourth quarter. Uh what are the youth 30:55 30 minutes, 55 seconds quarter? You want the capex numbers or no sir I was asking I was asking for the capex number for fi27 and for the fourth 31:03 31 minutes, 3 seconds quarter I just needed the console overall realization and the web realization. Yeah one minute. 31:10 31 minutes, 10 seconds So the court water consult realiz sorry you want to realiz 31:18 31 minutes, 18 seconds okay budget for the 27 water consider uh 31:27 31 minutes, 27 seconds one minute we're just pulling up the number so what yeah sure sure so 65 for the regular what we consider 31:36 31 minutes, 36 seconds around 33 We have confirmed service and hardware run around 7 cr and overall 31:43 31 minutes, 43 seconds standalone we are expecting around 120 cr of capex Q4 31:53 31 minutes, 53 seconds yeah that's what we projecting object without considering the Maharashtra project which Maharasha out of 280 cr 20 crores we 32:01 32 minutes, 1 second have spent in FI25 uh 85 86 crores we spend in FI26 and balance 100 crores 180 crores are planned to spend in FI27. 32:13 32 minutes, 13 seconds Those will be the broad areas of expend capex that will be spending right sir and the realization sir 32:22 32 minutes, 22 seconds the fourth quarter realization for consolidated I'll just consolidated realization 61.19 32:30 32 minutes, 30 seconds okay that is the overall sales of including the product name that if you exclude the 32:38 32 minutes, 38 seconds and you want also the procurement price for four fourth quarter No, so just needed the console realization and the VA realization for the fourth quarter. 32:48 32 minutes, 48 seconds Okay. So for the milk procurement we have talked about when you liquidate consolidated sales only sales only. So 32:55 32 minutes, 55 seconds it is 55.16 of last year Q42 we said it is 56.16 but when you talk about 33:02 33 minutes, 2 seconds specifically of India 56.05 to 56 sorry 56.15 to 58.25 that is 2.10 10 increase 33:11 33 minutes, 11 seconds in the risk sales realization especially without the concern in the val 33:20 33 minutes, 20 seconds is a blended so I could tell you the blended price especally at a standalone 33:26 33 minutes, 26 seconds uh standalone it is 60.72 sorry 60.892 8 92 it is reduced to 60.54 33:34 33 minutes, 34 seconds because the product bit was changed because of bul we are exited so that way there is a reduction it shows in the 33:40 33 minutes, 40 seconds when you say a consolidated number sorry the web consol realization was what sir 33:49 33 minutes, 49 seconds 60.54 great that's it from me thanks and all the best sir 33:57 33 minutes, 57 seconds thank you next question is from the line of adita from Securities investment management please go ahead. 34:04 34 minutes, 4 seconds Uh yeah I thanks for the opportunity. Uh so I just wanted to understand what kind of price inflation we are seeing in our packaging and trade cost. Uh so is it 34:13 34 minutes, 13 seconds manageable now or it's going through the and how are you looking to uh mitigate the sales. 34:20 34 minutes, 20 seconds So I think packaging material as a number has gone up by 30%. Most of the plastics that are there and we use a lot of the plastic has gone up by 30%. that 34:27 34 minutes, 27 seconds small corrections is what we have passed on to the consumers in terms of the price corrections that they have taken. So we are anticipating that the plastic prices 34:36 34 minutes, 36 seconds will remain at the current elevated levels only because there was been some government support that came in in the middle in terms of excise duty reduction 34:43 34 minutes, 43 seconds and such. So unless something dramatic happens we're thinking that it'll hold at the current 30% increase of the previous year. 34:52 34 minutes, 52 seconds And so now with increase in cyclone cost how are you looking at at the sales force going forward? 34:59 34 minutes, 59 seconds Uh so the current three rupees I think temporarily for a month or so we will have to look at it and we will absorb because a portion of it will be passed on to the transporters itself because we 35:07 35 minutes, 7 seconds take price corrections only periodically and we normally try to keep it for that period and if it remains at three so that's the whole reason which are saying 35:15 35 minutes, 15 seconds certain uncertainty of times we don't know whether it's going to remain at three is it going to go up to six or seven. So that is the reason we'll wait and watch I think for another at least 35:23 35 minutes, 23 seconds fortnite or a month before we decide how to take it forward in terms of price. 35:29 35 minutes, 29 seconds And that's and now sir in such an inflationary scenario is price increase the only solution for us or there is an 35:36 35 minutes, 36 seconds option for grammage reduction also in our kind of industry. 35:40 35 minutes, 40 seconds So gramage reduction which we normally used to do we will not do much this time because this is not helping in terms of the consumers are also able to realize 35:48 35 minutes, 48 seconds what is happening as gramage reduction towards price. I think it is going to be a blend today that we are going to do in terms of putting up uh 35:57 35 minutes, 57 seconds uh what do you say procurement operational efficiency and marginal increase in pricing it will be a blend of all the three. For us the way I look 36:05 36 minutes, 5 seconds at it is we need to cover cost and to improve margins maybe you need to increase the rupee or so more in terms of pricing if you're able to manage 30 36:13 36 minutes, 13 seconds 40 overall in procurement 2035 operationally and 2035 in terms of the front end we should be able to improve 36:21 36 minutes, 21 seconds our margin and also because overall our volume growth is there percentage might be a little on the lower side but the 36:28 36 minutes, 28 seconds absolute number will be higher because there the volumes in the first quarter are seeming to be uh pretty reasonable in terms of the size of the sales that 36:36 36 minutes, 36 seconds grades and sense you know there is expectation of intim 36:45 36 minutes, 45 seconds uh now in such a scenario while we would be positively benefited because of higher vaccines but on the flip side uh 36:52 36 minutes, 52 seconds you know the milk would might also take a hit which would uh impact the procurement costs also and with the milk 37:00 37 minutes inventory in the system pretty low uh How do you see both of these things uh intermingling with each other and are 37:07 37 minutes, 7 seconds impact on margins going forward and what would be the factors you know things you would look at going forward which will give you the confidence of improvement 37:16 37 minutes, 16 seconds margin outlets for the company broadly like we said the fluctuations will not be dramatic if there is a severe drought this is a two-way sword 37:24 37 minutes, 24 seconds for us that in areas where there is a drought animalry improves because there is no other income for the farmers they concentrate more on animal husbandry and 37:32 37 minutes, 32 seconds therefore production normally improves and also the sale sales mix if it continues to be high on the value added product side because of higher summers 37:40 37 minutes, 40 seconds and more buttermil and lucky that goes up our average realization increases because of the product mix. So it sort 37:48 37 minutes, 48 seconds of helps us in a manner of speaking to keep our cost going. So that is what we said but we are more worried about the other costs that are going to shoot up 37:55 37 minutes, 55 seconds dramatically more than the the price of milk itself. Right? We are not too none of us are certain about where will this price of fuel 38:05 38 minutes, 5 seconds will be stopped because if you look at it and people and this is my view and please correct me if I'm wrong $60 to $120 in my simple mathematics per barrel 38:13 38 minutes, 13 seconds means 100% price increase which should translate even to a 25 or 30% increase for us on fuel which is not yet shown I 38:21 38 minutes, 21 seconds we're not sure whether it is going to go up at 20% of fuel or only going to remain at the current levels so I think once we get more of a uh clarity on this 38:30 38 minutes, 30 seconds we can think of where on we're going to pass on how much is the customer how much from the farmer and how much in terms of operation efficiency 38:37 38 minutes, 37 seconds underscid sales volume excluding uh so we have 38:44 38 minutes, 44 seconds been growing at more than 9%. uh so just wanted to understand uh what would be the growth in India specifically because 38:52 38 minutes, 52 seconds Africa would be the major part driving just wanted to understand what is the liquid milk selling growth in India for the last two three quarters 38:59 38 minutes, 59 seconds so we will continue to grow with that uh uh volume terms uh five five to 6% in 39:07 39 minutes, 7 seconds terms of liquid milk although the current year we did excluding bulk we did including value added we did 9.4% 4% of growth. We think that we will 39:16 39 minutes, 16 seconds continue to maintain an average growth in terms of including value added to the 10% of volume growth. 39:23 39 minutes, 23 seconds So what I wanted to understand was uh we did not uh increase the milk prices because in the presentation you mentioned that you wanted to gain market 39:31 39 minutes, 31 seconds share. So in the last two three quarters uh has our liquid milk sales volume growth seen an uptick? 39:39 39 minutes, 39 seconds Uh liquid milk volume have seen an uptick? Yes and all but value added we are pushing more. that has been that has seen a significant uptake. Liquid milk 39:46 39 minutes, 46 seconds has seen an uptake of around 5% to 6% whereas value added has grown up by 16%. 39:52 39 minutes, 52 seconds Understood. Understood. And now sir, what is the usam revenue and EIDA for this quarter? 39:59 39 minutes, 59 seconds uh for the fourth quarter of uh this year is basically 40:06 40 minutes, 6 seconds 2.7 cr and overall no we talking about okay I'll talk about even revenue also 40:13 40 minutes, 13 seconds for the Q4 the revenue is 81.9 cr a bit of 2.7 cr and uh full year it is a 214.7 40:23 40 minutes, 23 seconds cr and uh aid 4.8 Very good. 40:29 40 minutes, 29 seconds Okay. And and what kind of gross margins does usam make? 40:34 40 minutes, 34 seconds Gross margins of Osam would be around uh 21%. 21 point. 40:42 40 minutes, 42 seconds Okay. Okay. And just a last one question 25% soon. 40:49 40 minutes, 49 seconds Sorry. Can you repeat sir? It will move up to the 25% soon. 40:56 40 minutes, 56 seconds And this will be majorly due to price hikes and improvement in VA mix. 41:00 41 minutes Yeah. Uh you know price hikes, improvement in Vapmix and also the efficiencies that we were talking about increasing our own procurement uh 41:08 41 minutes, 8 seconds bringing down freight cost uh you know cutting down on losses and all that will help us. 41:14 41 minutes, 14 seconds Understood. Understood. And so just last one question. Now in orga fee we have seen a drop in margins but what I 41:21 41 minutes, 21 seconds understand that uh there has been a reduction in maze prices and margins should actually have improved. Uh so what is the reason for this drop in margins in order please? 41:32 41 minutes, 32 seconds So basically although maze prices I say that have reduced now it will only be what we buy now will be used later but I 41:39 41 minutes, 39 seconds think the maze prices overall did go up and not come down that is number one and number two earlier days like know we say when you're operating in a closer 41:48 41 minutes, 48 seconds proximity of our area we had the advantage of other operating costs like freight now since we're expanding our volume and expanding into other areas we 41:55 41 minutes, 55 seconds have impact on freight and we have to be also competitive with the local good users for example if I'm sending my cattle feed to sell in Maharashtra. The 42:03 42 minutes, 3 seconds transport cost from selling from Kopam to Maharashtra will add on the margin pressure and the pricing in Maharashtra in terms of the local competition will 42:11 42 minutes, 11 seconds be there. But we're still maintaining that 11% margins that we are and we think we'll continue to maintain that kind of margin. 42:20 42 minutes, 20 seconds Thanks for answering your questions. I'll jump back in with you. Fantastic. 42:26 42 minutes, 26 seconds Thank you ladies and gentlemen. In order to ensure that the management will be able to address questions from all the 42:34 42 minutes, 34 seconds participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We 42:42 42 minutes, 42 seconds will take our next question from the line of Pradu Chadri from Boehead India. Please go ahead. 42:49 42 minutes, 49 seconds Yeah. Hi. Uh am I audible? Yes sir. Yes sir. 42:54 42 minutes, 54 seconds So my first question was on the butter prices. uh uh last few quarters due to elevated butter prices is one of the 43:02 43 minutes, 2 seconds reasons why we saw milk procurement price being higher. So what is the latest on the global butter prices and 43:11 43 minutes, 11 seconds global S&P prices and uh why were they elevated previously? 43:18 43 minutes, 18 seconds So butter prices and powder prices are elevated because like we said last year was a low productivity in terms of milk availability coming down and therefore 43:27 43 minutes, 27 seconds the stocks have been depleted and now only now in terms of this volume stocks will be built up. uh that is the reason why we have removed our bulk sales and 43:34 43 minutes, 34 seconds not done bulk sales because we don't have the extra butter that we could use but we have sort of compensated it by increasing that milk procurement that we 43:42 43 minutes, 42 seconds have and I think we did turn out to be a small amount of a net buyer and that is the reason why the whole market 43:49 43 minutes, 49 seconds surprises are elevated uh you know so my question was more on the global better and S&P not India 43:58 43 minutes, 58 seconds because we saw a lot of better ch Yeah. So global prices also in the similar manner. What happened was uh you 44:06 44 minutes, 6 seconds know they actually I think coming now they're looking at it as an over supply and India's export of butter is not much. It's mostly ghee that we export in 44:13 44 minutes, 13 seconds terms of fat for the Indian diaspora which is there that is what consumes more of the fat exports that India has. 44:21 44 minutes, 21 seconds Uh so right now we have seen these prices coming down the export prices for BA and 44:29 44 minutes, 29 seconds uh no not coming down they're maintaining the same same state as what they were earlier. We are not much into exports I don't have the specific 44:37 44 minutes, 37 seconds numbers but I don't think they're coming down but that's not a risk to us that uh the 44:44 44 minutes, 44 seconds procurement prices uh would start coming down. uh we do not expect that elevated global data and S&P prices would be at a 44:53 44 minutes, 53 seconds uh risk to the uh not much because I think the number of exports that we see out of the country is not that significant to change pricing patterns as much as also 45:02 45 minutes, 2 seconds an imports are very restricted because we have duty structure so that we don't get the flood of imports coming in it'll broadly be dependent on domestic uh 45:12 45 minutes, 12 seconds consumption and production not much of variation due to exports understood and the last question is on the cogs mix. uh if I were to look at a 45:22 45 minutes, 22 seconds cost of goods sold uh for India business uh specially so how much would be what would be the mix of that like how much 45:30 45 minutes, 30 seconds would be uh milk as a percentage of your costs how much would be packaging materials uh what about logistics if you 45:37 45 minutes, 37 seconds can give that and uh the second question would be on the Maharashtra side I think we areing close to 2.5 LPD uh uh already 45:47 45 minutes, 47 seconds from Maharashtra but we don't have any bulk fields as of this quarter. So where is it really going in terms of 46:03 46 minutes, 3 seconds I'm sorry sir we are not able to hear you if you're speaking. Uh can you hear me now? Hello. 46:11 46 minutes, 11 seconds Yes, you're audible. I'm I'm asking this to management. 46:20 46 minutes, 20 seconds Management team, are you able to hear us? 46:25 46 minutes, 25 seconds Ladies and gentlemen, the line for the management has been disconnected. Please hold while we get them back. 47:12 47 minutes, 12 seconds You're right. 47:28 47 minutes, 28 seconds What? 48:09 48 minutes, 9 seconds Ladies and gentlemen, thank you for holding. We have management connected now. Over to you, sir. Uh sorry everyone for the disconnection. 48:17 48 minutes, 17 seconds I just know will give the break up of the cost that you had asked for earlier in the last comp 48:27 48 minutes, 27 seconds 4% include the packing material and employment expenses is around uh 4.9% 48:35 48 minutes, 35 seconds and transport cost is 7.3 forum is around 1.5 is 1% and balance all of 48:44 48 minutes, 44 seconds the work and traveling always overall the average 13.2 48:52 48 minutes, 52 seconds employment expenses that is 18.1 49:03 49 minutes, 3 seconds mater.4% 4% 3.5% is a packing material. 49:12 49 minutes, 12 seconds Sorry, how much? 3.5%. 49:16 49 minutes, 16 seconds It's a packing expense. And what about uh logistics expense in this? Logistic expense is 7.3%. 49:26 49 minutes, 26 seconds And remaining else is all milk. 49:30 49 minutes, 30 seconds uh you know 74% out of that only packing material is three and a half out of the 74 plus 7.3% transport 49:37 49 minutes, 37 seconds and uh 64 around 64 would be like yes nor 49:44 49 minutes, 44 seconds transport is not exclud excluded 74.4 plus transport 1.3 you have to add for the transport input and output. 49:55 49 minutes, 55 seconds Yeah. So transport includes for a transport includes the four legs that is a village to the chilling centering 50:03 50 minutes, 3 seconds center to the plant to the sales office sales office to the customer. All the transports are included apart from the 50:10 50 minutes, 10 seconds the loading unloading car the freight carry forward this thing and the contract level works under the transport 50:18 50 minutes, 18 seconds of that all that comes to 7.3%. 50:22 50 minutes, 22 seconds It doesn't come in the 74 of raw material. 74 of raw material includes 3.5% of fat 50:30 50 minutes, 30 seconds and remaining is all milk right 74 - 325. Yeah. 50:35 50 minutes, 35 seconds And and Mr. Chadri, you may please rejoin the queue for more questions. 50:42 50 minutes, 42 seconds Thank you. We will take a next question from the line of Ashair from DT portfolio managers. Please go ahead. 50:50 50 minutes, 50 seconds Um hello. Hi Suni. Hi Murray. Uh hi. Hi Sunni. Hi Muri. Uh just wanted to know 50:58 50 minutes, 58 seconds um uh how are you thinking of the risk of El Nino on your gross margins? I think earlier in the call you uh 51:06 51 minutes, 6 seconds referred to like a 50 to 100 basis points improvement in your gross margins. So uh how are you thinking of that? 51:15 51 minutes, 15 seconds Basically we we are very confident that reprocurement should come back normal. 51:19 51 minutes, 19 seconds cannot be there and the prices will drop and meet procurement and that itself should give us that uh difference in our 51:25 51 minutes, 25 seconds uh uh margins because if you look at it as what we're saying as 1% uh or 100 bits of price 51:35 51 minutes, 35 seconds margin as you see average realizations are around 60 rupees we're looking at a 65 correction that we 51:44 51 minutes, 44 seconds Yeah that's fair thank you and uh So uh my second question is a little more broad. Uh your Africa business seems to 51:53 51 minutes, 53 seconds be growing strong and like growing a lot. What is going right there and how do you see that continuing into the future? 52:02 52 minutes, 2 seconds So I think what is growing right is basically Uganda we have become a significantly large player and in Kenya we're just beginning to see that and 52:08 52 minutes, 8 seconds Kenya is a a much larger market than Uganda. Earlier we used to cater from Uganda to Kenya and due to the border disputes we were not able to cater to it 52:17 52 minutes, 17 seconds properly because there would be restrictions on how much we could send. 52:21 52 minutes, 21 seconds Once we have now entered in Kenya with our own operations and our own plant and having the stability of the product we are able to do better and I think in 52:28 52 minutes, 28 seconds terms of comparison like we said it's more keeping your quality and the improved quality making sure that operational efficiencies are maintained 52:36 52 minutes, 36 seconds and we are still a smaller market share in Kenya that gives us growth and like you said in Uganda we are expanding earlier we were into long life 52:45 52 minutes, 45 seconds products only now we're entering into the pasturized and other milk products Okay, perfect. Thank you. 52:58 52 minutes, 58 seconds Thank you. Next question is from the line of Dash from Assyria Institutional Equities. Please go ahead. 53:07 53 minutes, 7 seconds Yeah. Hello. Um, your may proceed. 53:14 53 minutes, 14 seconds Yeah. Yeah. Uh thanks for the opportunity and uh I actually uh personally just wanted card sales in rupee terms for this quarter Q4. 53:23 53 minutes, 23 seconds Card sales Q4 in rupee terms right Dan? Yes. 53:29 53 minutes, 29 seconds Confirmated card sales Q4 terms rupee 230 cr and for the year it is 845.7 cr. 53:42 53 minutes, 42 seconds All right. And uh second we just wanted to understand uh is there any considerable difference between 53:48 53 minutes, 48 seconds procurement and realization uh you know costs and uh realizations between domestic overall business and 53:57 53 minutes, 57 seconds OSAN and if we were to like you know just uh see a broader trend do they move in tandem or are there certain uh gaps 54:06 54 minutes, 6 seconds between the the trends? Okay. So I I was not able to get the question clearly about but what you're saying is the difference between Osan prize 54:13 54 minutes, 13 seconds realization and the rest of India prize realization. Am I correct? Yes question. 54:19 54 minutes, 19 seconds So actually has a better realization than the VA portion than in here will give you the specific number. So with regard 54:27 54 minutes, 27 seconds to India so basically the milk relation is around 58.1 and whereas HR that is it is 50.7 54:38 54 minutes, 38 seconds and uh excluding the product it is 64.2 for the regular whereas good it is 98.8 54:48 54 minutes, 48 seconds Okay, got it. All right. Yeah, I'll I'll get back to the view. Thank you. Thank you. 54:57 54 minutes, 57 seconds Next question is from the line of Deepak from Unifi Capital. Please go ahead. 55:03 55 minutes, 3 seconds Hello sir, thank you for the opportunity. Uh, congrats on good topline growth but my questions were on the margin profile of the company. uh 55:11 55 minutes, 11 seconds sir if you can explain as to how you will get to the 100 to 50 bits margin expansion that you're talking about in 55:19 55 minutes, 19 seconds aa for 27 given that procurement costs are still elevated uh at the march 55:26 55 minutes, 26 seconds levels uh freight costs are up employee and other expenses are also uh the costs are up by by anywhere around 15 to 20%. 55:36 55 minutes, 36 seconds So if you can explain firstly the gross margin trajectory that we should start looking at from Q1 uh and then the below 55:45 55 minutes, 45 seconds gross margin line items that is under your control uh employee and other expenses uh as well. So yeah I would 55:52 55 minutes, 52 seconds like to your strategy on that. So you're right Deepak basically the employment expenses this year we actually bought it down in terms of the existing 56:00 56 minutes operational by only a 5% 6% increase but the overall impact is still at 11%. 56:06 56 minutes, 6 seconds Because of the new wage code impact that is there all these costs including packaging that you're looking at and all that would have taken up our cost by 56:14 56 minutes, 14 seconds maybe a rupee rupee and a half. We are expecting that the procurement prices should come down to that to rupee and a half to two and because of the product 56:22 56 minutes, 22 seconds mix improvement our realization is is on the higher side as a combination of these two that like I explained earlier 56:29 56 minutes, 29 seconds our 100% 1% increase represents roughly at 1 rupee 1 and a half rupee of price overall efficiency that we need to build 56:36 56 minutes, 36 seconds up which we think will come know once the you know in the following quarters because normally price will come down it will not come down for one and a half 56:44 56 minutes, 44 seconds year it will come as productivity increase. 56:50 56 minutes, 50 seconds Okay. So if I hear you right, so are there any uh structural uh uh circumstances which which occur in the 56:59 56 minutes, 59 seconds March uh sorry the May month or the June month which which would lead to this price reduction and I I don't understand 57:06 57 minutes, 6 seconds as to why the procurement and Karnataka have got a significant upward growth in the meat procurement. 57:13 57 minutes, 13 seconds So you will start seeing you know Maharashtra prices sort of correcting a little bit to you know because of the growth that is coming in and similarly when the seasons of the rest of the operations come in you will see a drop. 57:24 57 minutes, 24 seconds Sure. So uh next thing I wanted to understand on the price hikes uh you know your strategy on not taking more 57:32 57 minutes, 32 seconds price hikes uh when you have the opportunity as the corporator is also taking. So I just wanted to understand your mindset on uh taking more price 57:40 57 minutes, 40 seconds hikes. Uh maybe you're uh not taking it right now. Will you take it later in the future? I just wanted to understand on 57:48 57 minutes, 48 seconds the pricing action from the company because we have basically taken a price hike in March which the cooperatives have only followed later now in May. So 57:56 57 minutes, 56 seconds we will again take you know the next round will be as I said the uncertainty of the fuel prices packing material and all that has to settle down and once we 58:04 58 minutes, 4 seconds see what the impact of that is going to be in terms of sort of a stable state then the price hikes will again come in 58:11 58 minutes, 11 seconds from all of us it's only now that the difference in terms of us and the cooperators are significantly higher we don't want to keep expanding that more 58:19 58 minutes, 19 seconds and more okay and lastly on the volume growth for both the liquid milk and VAP. You 58:28 58 minutes, 28 seconds mentioned that VAP had some operational challenge. So if you can allude to what operational challenge and uh secondly 58:34 58 minutes, 34 seconds what kind of growth have you seen uh to the seasonal uh to the season which has started in April. So if you can call out 58:41 58 minutes, 41 seconds that and any improvement that you've seen in the growth rates for milk sir. 58:47 58 minutes, 47 seconds Yes, our milk growth rates have maintained around that four and a half 5% even in the current uh uh the scenario but we have seen significant 58:56 58 minutes, 56 seconds increase in the VA uh growth like we normally say that our summers of uh VA will be higher. So our 59:05 59 minutes, 5 seconds VA rates have been VA growth rates have been uh significantly higher we are around 16 17% V growth. 59:15 59 minutes, 15 seconds Sure. Okay. I'm sir if you can I'm sorry to interrupt Deepak uh I'm really sorry you may please for more questions thank you 59:24 59 minutes, 24 seconds next question is from the line of Vhan Bakuri from Omaya advisers please go ahead yeah hi I'm audible 59:32 59 minutes, 32 seconds yes sir yeah so my first question is uh regarding the impact of an increase in fuel price by 1 rupees on the logistic 59:41 59 minutes, 41 seconds cost so basically when you look at fuel prices the rupee increase currently will 59:47 59 minutes, 47 seconds have a impact of us and maybe no not as that much in terms of 0.5% is 59:54 59 minutes, 54 seconds what the impact would be but that as I said if we delay giving it to our transporters normally they take a hit for a 15-day process and then we go in 1:00:02 1 hour, 2 seconds so currently it only be a small hit of 025% that we look at but if once we are sure of what the fuel prices are going 1:00:09 1 hour, 9 seconds to be stable at then we can make a call of how to pass it on okay and my Second question is regarding 1:00:16 1 hour, 16 seconds the Africa business and what can be the sustainable growth number to look for there. 1:00:22 1 hour, 22 seconds The sustainable growth numbers in terms of volume we are confident of maintaining the 20% kind of growth numbers in the current year. 1:00:30 1 hour, 30 seconds Okay. Uh Vhan does that answer your question? 1:00:39 1 hour, 39 seconds Yeah actually I wanted to uh know the value as well in terms of the sustainable growth 1:00:46 1 hour, 46 seconds in terms of value you mean sir basically last year we went around 500 crores on that what are you talking about 20% 1:00:53 1 hour, 53 seconds 600 crores that is the number got yeah okay that answers my question thank you 1:01:01 1 hour, 1 minute, 1 second thank you next question is from the line of anchority investment please go ahead Thank you for taking my question. 1:01:13 1 hour, 1 minute, 13 seconds Uh sir, uh regarding the Africa sales, can you split it between uh Uganda and Kenya for F25 and F26, please? 1:01:23 1 hour, 1 minute, 23 seconds Uganda and Kenya break up for 25 and 26. One minute. 1:01:28 1 hour, 1 minute, 28 seconds Uganda is almost stable 1.45 to 1.5 lakh. 1:01:33 1 hour, 1 minute, 33 seconds So uh see now you see last year we have done you know. FI 25 180 1 lakh 80,000 1:01:40 1 hour, 1 minute, 40 seconds out of that you know one lakh 45,000 from Uganda and balance you know 30,000 from 35,000 from Kenya and FI26 you know 1:01:51 1 hour, 1 minute, 51 seconds the similar number you know from Uganda we have done 145 150 and total number what we have done average is 227 2K 27 1:02:00 1 hour, 2 minutes so 227 so 1 lakh 50,000 minus balance 87 90,000 lit average we have done in Kenya 1:02:09 1 hour, 2 minutes, 9 seconds So the Yes. So F26 volume growth has largely come from the Kenya. Yes. 1:02:17 1 hour, 2 minutes, 17 seconds Okay. Yes. and and sir uh if you can give the Africa uh Aida numbers we have the revenue 1:02:23 1 hour, 2 minutes, 23 seconds numbers but F25 26 and 24 F25 number 1:02:31 1 hour, 2 minutes, 31 seconds you know in 25 it was 11% AIA and 26 is 11.3% 1:02:41 1 hour, 2 minutes, 41 seconds okay thanks sir uh the last question I have is on the Maharashtra uh plant so uh where are we on the procurement uh in 1:02:49 1 hour, 2 minutes, 49 seconds Maharashtra in terms of litters per day and uh do we see it going to five lakhs till end of 27? 1:02:58 1 hour, 2 minutes, 58 seconds So right now you know the average procurement malas what we are procuring is three lakhs average right now last couple of months almost so on season 1:03:07 1 hour, 3 minutes, 7 seconds comes you know by end of this year we are targeting you know minimum five lakhs okay thank you for taking the question 1:03:15 1 hour, 3 minutes, 15 seconds thank you thank you that was the last question for today I would now like to hand the 1:03:22 1 hour, 3 minutes, 22 seconds conference back to the management for closing comments uh thank you everyone for joining us today on this earnings call. We appreciate your interest in the blood 1:03:30 1 hour, 3 minutes, 30 seconds area. If you have any further queries, please contact SGA or investor relation. Thank you very much. 1:03:39 1 hour, 3 minutes, 39 seconds Thank you. On behalf of light limited, that concludes this conference. Thank you all for joining us today and you may now disconnect your lines. 1:03:48 1 hour, 3 minutes, 48 seconds Thank you all.