E I D-Parry Ltd — Q3 FY26

E I D-Parry (India) Ltd Q3 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=fCqE4F1zGeA Published: 3 months ago

0:01 1 second Ladies and gentlemen, good day and welcome to EID Par India Q3 FI26 earnings conference call. As a reminder, 0:09 9 seconds all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 0:17 17 seconds conference call, please signal an operator by pressing star then zero on your touchdown phone. Please note that this conference is being recorded. I now 0:26 26 seconds hand the conference over to Miss Pile Sha from Dam Capital. Thank you and over to you Misha. 0:33 33 seconds Hello everyone and a warm welcome on behalf of DAM capital advisers to the Q3 FI26 earnings call of eid parry. We 0:41 41 seconds thank Eid Par's management for giving us the opportunity to host this call. On the call today we have Mr. Mutaya 0:48 48 seconds Murapan, full-time director and CEO along with the senior management team of eid Barry. I hand over the call to the management for opening remarks followed 0:57 57 seconds by a Q&A session. Thank you and over to you sir. 1:01 1 minute, 1 second Yeah, thanks uh B and very good morning to everyone. Gives me a great pleasure to be a part of the call uh to share our 1:09 1 minute, 9 seconds uh QT performance. Uh but prior to that I will start with a brief update on the global scenario, the global sugar 1:16 1 minute, 16 seconds scenario and then also come to the Indian scenario after that. So the global sugar market is expected to remain in a mild surplus right through the sugar year 2526. 1:27 1 minute, 27 seconds Um S&P plat projects a global surplus of 3.5 million metric tons for 2526. 1:35 1 minute, 35 seconds This is despite you know some reduction of output from India, EU and Thailand. 1:40 1 minute, 40 seconds Brazil for 2526 is estimated at about 40 million metric tons. However, some lower yields and a fat price trading below 1:49 1 minute, 49 seconds production cost may impact the mix for the subsequent year. The raw sugar prices have been trading lower. Lower hedge exposure by Brazil and Brazilian 1:57 1 minute, 57 seconds and Thai millers and a short position buildup by hedge funds is keeping a lid on the price rally. All demand from 2:06 2 minutes, 6 seconds Indonesia has been revised downwards for the second consecutive year. White premium values continue trading in the 2:13 2 minutes, 13 seconds range of USD 90 to 105 per metric ton due to estimates of surplus trade flows. 2:19 2 minutes, 19 seconds Large Indian export surplus and higher supplies from Brazil. Weak oil prices are keeping ethanol parities at lower 2:27 2 minutes, 27 seconds levels. However, geopolitical risks persist and the rally and any rally in oil oil prices can impact sugar as well. 2:35 2 minutes, 35 seconds So coming to the Indian scenario, last year in 2425 sugar year, India's net sugar production is 26.1 million metric 2:42 2 minutes, 42 seconds tons. The gross was 29.6 million metric tons. Last year's diversion to ethanol was just around 3 12 million metric 2:49 2 minutes, 49 seconds tons. Domestic consumption is 28.1 million metric tons and exports was under a million metric tons. We had 2:57 2 minutes, 57 seconds closing stocks of about 5 million metric tons. Sugar 2526 estimates are as follows. This is aspir gross production 3:06 3 minutes, 6 seconds is 34.3 million metric tonses. Diversion to ethanol considered is about 3.4 million metric tons. Domestic 3:13 3 minutes, 13 seconds consumption at 28.5 million metric tonses and the export kota which has been given is 1.5 million metric tons. 3:21 3 minutes, 21 seconds This puts closing stock levels at about 6 million metric tons. For sugar year 2526 so far the key states have seen some mild increase in crushing output. 3:33 3 minutes, 33 seconds uh Maharashtra, Karnataka and UP all have together reported about a 25% 3:40 3 minutes, 40 seconds increase at an amalgamated level as compared to the previous period of last year. However, production in some states 3:48 3 minutes, 48 seconds at the CN continues to lag behind last year's levels. In terms of the monsoons, u IMD has warned that there are some uh 3:57 3 minutes, 57 seconds El Nino signs from August to September and this may impact some of the rainfall distribution and reservoir levels later 4:04 4 minutes, 4 seconds on in the years. I'll now hand the call over to my colleague Ward to take you through the operating and financial performance. 4:13 4 minutes, 13 seconds So thank you Mu and good morning to all participants. It is a great pleasure to be part of the call and to share the key information of the operational and 4:21 4 minutes, 21 seconds financial performance of the company. I would like to share with you the key operating parameters of each each of the 4:29 4 minutes, 29 seconds crushing season uh the crushing operations across all the states has been uh uh operated in the during the quarter. So namely the Karnataka, Tamil 4:37 4 minutes, 37 seconds Nadu and AP. So we crushed average crushing was about 54 days uh during the quarter against the 45 days of the 4:45 4 minutes, 45 seconds corresponding quarter of the previous uh previous year. I would like to share the quantitative details as ender. So as far as the crushing is concerned we crushed 4:53 4 minutes, 53 seconds about 15 15.31 lakhs metric tons as against the 12.7 lakhs metric tons of the uh corresponding quarter of the previous year. As far as the recoveries 5:01 5 minutes, 1 second is concerned 11.19 against the 7.78% of the corresponding quarter of the previous year. As far as the sugar 5:09 5 minutes, 9 seconds production is concerned, we produced about the 1.39 lakhs metric tons during last quarter against 1.07 lakhs metric tons of the corresponding quarter of the 5:18 5 minutes, 18 seconds previous year. Can cost can landed cost is at 4,122 rupees. This is due to impact of the FRP as a 3,899 5:27 5 minutes, 27 seconds per metric t of the corresponding quarter of the previous year. As far as the sugar is is concerned, sales volume 5:34 5 minutes, 34 seconds is about 94 94,000 metric tons as well as the 1 lakh 3,000 metric tons of the corresponding previous uh quarter. Uh 5:42 5 minutes, 42 seconds selling price average selling price is about 40 rupees 40 around 40 rupees against the 37 rupees 69 of the corresponding previous years uh quarter. 5:52 5 minutes, 52 seconds As far as we maintain the closing stock at 1 lakh 14,000 metric tons we valued at 37 rupees also. As far as the revenue 5:59 5 minutes, 59 seconds is concerned for the current quarter is the 389 crores um against the corresponding quarter of the previous 6:06 6 minutes, 6 seconds year was 391 crores. All FRPS were paid as per the timeline. 6:12 6 minutes, 12 seconds As far as the consumer product group is concerned uh the consumer product group has achieved a turnover of 143 crores during the Q3 uh during the current 6:19 6 minutes, 19 seconds quarter as 236 crores for the for the corresponding quarter of the previous year. The reason for reduction mainly on account of the restructuring of the 6:27 6 minutes, 27 seconds distribution channel and lower release quarter for the seat. Further uh the focus more on the retail back and profitable product mix in non-fitness 6:35 6 minutes, 35 seconds segment. As far as the coin is concerned um we we produced about 1,18 lakhs units 6:42 6 minutes, 42 seconds as against 954 lakhs units in the corresponding period of the previous year. We exported about 6.5 lakhs units 6:50 6 minutes, 50 seconds as against 53 lakhs units in the corresponding period of the previous year. The average tariff realized is a 4.4 per unit as a 3.98 per unit in the 6:59 6 minutes, 59 seconds corresponding period of the previous year. Revenues for the quarter is about 37 crores as against 41 crores in the corresponding period of the previous year. 7:09 7 minutes, 9 seconds As far as the dist is concerned, we sold about 4 lakhs liters as against 422 lakhs liters of the corresponding 7:17 7 minutes, 17 seconds previous previous year of which about ENA was about 215 lakhs lit and ethanol 7:25 7 minutes, 25 seconds was 192 lakhs lit. The price released is about 67 91 as against the previous year 7:31 7 minutes, 31 seconds is 61.83 per liter. Revenues more or less at stand 289 crores as against 290 crores during the corresponding period 7:39 7 minutes, 39 seconds of the previous year. As far as the neutra is concerned turnover from Indian operations is about 6 crores as against 7:48 7 minutes, 48 seconds 12 crores in the previous year. At the consolidate level the neutra business turnover 62 crores uh current quarter against the corresponding previous period which was about 43 crores. 8:01 8 minutes, 1 second As far as the refinery operation is concerned, the operational revenues for the current quarter is 714 crores. 8:07 8 minutes, 7 seconds Against the uh Q3 of 20 Dece December 24 about 915 crores. The last for the quarter is about 4.53 crores versus Q3 8:17 8 minutes, 17 seconds of 2425 about 17.53 crores. The refined sugar production Q3 is 2.23 lakhs metric 8:24 8 minutes, 24 seconds tons as Q3 December 24 of 2.09 lakhs metrics. Refined sugar sales for the quarter is a 1.57 lakhs markings done 8:33 8 minutes, 33 seconds versus 1.87 lakhs metric. There is no ICD ICD as on 31st December it has been repaid. External borrowings is about 78 8:41 8 minutes, 41 seconds crores as on 31st December as against the 31st December 24 it was about 532 crores. 8:48 8 minutes, 48 seconds Uh this is financial and operation performance of the quarter. Uh the floor is open for the question. 8:57 8 minutes, 57 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on a touchstone telephone. If 9:05 9 minutes, 5 seconds you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies 9:13 9 minutes, 13 seconds and gentlemen, we'll wait for a moment while the question Q assembles. 9:20 9 minutes, 20 seconds The first question comes from the line of wary Kurung craving alpha wealth fund. Please go ahead. 9:28 9 minutes, 28 seconds Hi, good morning sir. Thank you for taking my question. Uh my first question sorry for interrupting. Your voice is not audible. Can you come in the range and talk? 9:38 9 minutes, 38 seconds Hello. Is it better? 9:41 9 minutes, 41 seconds No. Can you speak a little louder please? Yeah. Is it better? Yes. Please come in. 9:50 9 minutes, 50 seconds Yeah. So my first question is on uh sugar and distillery business which is apparently facing challenges plus our consumer products has not been growing. 10:00 10 minutes So just wanted to understand and take a future outlook from the management. How are we planning to like overcome this and which segment you think will lead the revenue growth? 10:12 10 minutes, 12 seconds Yeah. So um Vi thanks for your question. 10:16 10 minutes, 16 seconds Um let me just start with the u the sugar and uh distillery business. Now if you look at the numbers um on the sugar 10:24 10 minutes, 24 seconds business uh we've had you know some better pricing from a sugar perspective when you compare to the uh same quarter 10:31 10 minutes, 31 seconds last year. Um you know whilst we've had better pricing of course costs have gone up because um the FRP sort of goes up 10:38 10 minutes, 38 seconds every year. Uh there's still really uh no clarity on any u upward revision of of the MSP. Um so this you know 10:46 10 minutes, 46 seconds continues to put a strain uh from a sugar perspective. U if you look at the distillery segment you know volumes have 10:55 10 minutes, 55 seconds sort of largely hovered around last year's volumes. The challenge here is the ethanol uptake prices have also not 11:02 11 minutes, 2 seconds gone up and this has been now almost 3 years at the same ethanol opt. There's also been you know increased salency 11:10 11 minutes, 10 seconds towards grain ethanol as compared to sugar cane. um you know this apart operations in TN and uh in um uh AP as 11:20 11 minutes, 20 seconds well um are subscale there's been lesser cane planting in these two regions uh and this again impacts you know 11:27 11 minutes, 27 seconds throughputs it also causes for us to insource a lot of molasses to run our distillaries uh particularly in the 11:34 11 minutes, 34 seconds state of TN so there is a lot of u uh you know cost pressure on the business in the case of the sugar and bofuel 11:42 11 minutes, 42 seconds operations however I will say that I think the team has done an excellent job on managing cost and improving efficiency which is why you see uh 11:50 11 minutes, 50 seconds better bottom lines um on this uh segment. Uh in terms of the consumer product group um I think the the sweetener segment continues to farewell. 12:01 12 minutes, 1 second Um we of course launched in uh two years ago to into the uh staple segment. Here we've consciously taken a bit of a 12:09 12 minutes, 9 seconds correction. uh we just want to correct the business model to better manage um working capital and to have a sort of a 12:17 12 minutes, 17 seconds stronger distribution model. Uh this is a conscious correction which will last two quarters. Uh which is one reason why you have seen volumes drop. U the other 12:26 12 minutes, 26 seconds reason is that market pricing itself for pulses particularly lentils etc has been lower. Uh and this will uh you know uh 12:34 12 minutes, 34 seconds naturally bring revenues down as well because your realizations in the market uh are lower. um this uh correction which we've taken and the strengthening 12:42 12 minutes, 42 seconds of the uh incumbent business model should conclude in Q4 uh and I think we should be back uh and a better clip in 12:50 12 minutes, 50 seconds Q1 with a more efficient operating model uh from the staples perspective. So this is just to give you a sense of where uh things are. 13:00 13 minutes Uh thank you sir and just wanted to understand what is our future outlook in these sectors. 13:07 13 minutes, 7 seconds So uh in terms of the sugar and bofuel segment I think we will continue to you know run efficiently. Um we will really 13:16 13 minutes, 16 seconds need to look towards the policy makers for some respite on upward revision of MSP and perhaps ethanol price as well. 13:23 13 minutes, 23 seconds We haven't really seen any positive changes uh from that front. So I think we'll just continue to focus on efficiency uh focus on driving planting 13:33 13 minutes, 33 seconds u and you know running um running our operations better. Uh but I think really to move the needle we'll need support 13:40 13 minutes, 40 seconds from policy uh on that front. Uh in terms of the CPD segment I think the uh growth story will continue. It is a key 13:49 13 minutes, 49 seconds uh segment for the business. Um while we've taken you know two quarters to really strengthen our operating and our 13:56 13 minutes, 56 seconds economic model uh what you will see uh in Q1 um is a stronger operating model. 14:03 14 minutes, 3 seconds We will also announce in Q1 you know the newer categories we wish to enter in the food FMCG space. This is a body of work 14:11 14 minutes, 11 seconds which you know uh is being done currently with some industry experts and when we when we meet in May uh we will 14:18 14 minutes, 18 seconds give you a clear picture as to um which uh categories you know beyond staples and sweeteners we will enter in the uh food FMDG space. 14:30 14 minutes, 30 seconds Okay. So I'll note this uh just uh two more questions on consumer end. one is I wanted to understand what are our 14:37 14 minutes, 37 seconds competitive advantages in this segment and what is the total anticipated um amount or impact for the channel 14:46 14 minutes, 46 seconds correction we are taking so um we we have taken some impairments on account of this uh channel correction 14:55 14 minutes, 55 seconds and that's reflected in the numbers this year we've already taken in Q3 a 10 crore impairment um so that's from an impact perspective can you just go over your first question again. 15:06 15 minutes, 6 seconds Yeah. I wanted to understand the competitive advantages. 15:10 15 minutes, 10 seconds Sure. So I'll just take you back to when we launched into this segment about 7 8 years ago. I think um obviously we had 15:17 15 minutes, 17 seconds the the brand Parry uh which uh which is with us and you know it's a known brand from before. I think we have reinvigorated the brand and launched it 15:26 15 minutes, 26 seconds into the sweetener space where it already has a lot of brand equity. I think we've enhanced that uh significantly. uh so I think that's the 15:33 15 minutes, 33 seconds bedrock upon which we started further building the platform uh you know given we are a sugar manufacturer I think we 15:40 15 minutes, 40 seconds do understand the back end and the supply chain um we also now make brown sugar and jagury in our plants so this 15:47 15 minutes, 47 seconds again is a competitive advantage we don't see you know too much competition in this segment we are in the southern 15:55 15 minutes, 55 seconds region a 55% market shareholder uh now I think as we expand into other categories if If you look at the staples category, 16:03 16 minutes, 3 seconds we have done some vertical integration particularly on DAS. I think this will, you know, give us better quality control and also improve margin capture going 16:12 16 minutes, 12 seconds forwards. Um, so I think we're building our competitive advantage further as we go along. um when it comes to the u 16:21 16 minutes, 21 seconds newer categories which we'll talk about in the subsequent quarter he will also give you guys some kind of an overview 16:27 16 minutes, 27 seconds on you know how we wish to uh expand the business into these categories. 16:34 16 minutes, 34 seconds Uh so sir in longterm do we plan to shift from trading to manufacturing inhouse of these uh products? 16:42 16 minutes, 42 seconds So um you know we uh make uh a lot of our sweetener products are made inhouse. 16:48 16 minutes, 48 seconds We do have uh third party manufacturing partnerships as well. Um similarly for 16:55 16 minutes, 55 seconds staples uh it will be a hybrid going forward. 16:59 16 minutes, 59 seconds Okay. This is this last question on channel correction. You mentioned the impact will be impact for quarter 3 10 kur. I wanted to know the total impact we're anticipating. 17:12 17 minutes, 12 seconds So we um we will review uh at the end of quarter 4 whether there's any uh further 17:19 17 minutes, 19 seconds impact. We're not foreseeing such a high impact u if if at all. 17:26 17 minutes, 26 seconds Okay. So thank you for taking the questions. I'll join back with you. 17:32 17 minutes, 32 seconds Thank you. A reminder to all the participants that you may press star and one to ask a question. 17:46 17 minutes, 46 seconds Once again, a reminder to all the participants that you may press star and one to ask a question. 18:09 18 minutes, 9 seconds Once again a reminder to all the participants that you may press star and one to ask a question. Next question comes from the line of Prashant and individual investor. Please go ahead. 18:24 18 minutes, 24 seconds Uh Mr. Prashant we cannot hear you. Can you come in the range and talk? Is my voice audible? 18:32 18 minutes, 32 seconds Yes, now it's audible. Please go ahead. 18:34 18 minutes, 34 seconds Yeah. Uh just one uh uh uh accounting question. What is the number for inventory receivable and payable as on 31st December? 18:49 18 minutes, 49 seconds You are looking at that. 19:00 19 minutes Yeah. Prashan, can you hear us? What? Pashant. 19:08 19 minutes, 8 seconds Mr. Pashant, can you hear the speaker? 19:15 19 minutes, 15 seconds Yeah, we cannot hear you. I think your voice is breaking. Can you come in the range and talk? Is it better now? 19:24 19 minutes, 24 seconds Yes, please. 19:26 19 minutes, 26 seconds Yeah. So, what is the number for inventory, receivable and payables as on 31st December? 19:34 19 minutes, 34 seconds Okay. So as far as the receivable fix is concerned about 170 crores or soant as far as the payables is concerned about 19:42 19 minutes, 42 seconds the 250 crores or something will be there. So as far as the inventory is concerned about 800 crores will be there. 19:49 19 minutes, 49 seconds Okay. So is it uh uh am I right in interpreting that uh the cash generated had been used to pay off the borrowings? 19:59 19 minutes, 59 seconds Uh no because there will be short-term borrowings also will be there to fund the working capital. 20:05 20 minutes, 5 seconds Okay. So what will be the borrowing number be like just we have already mentioned in the investor presentation um Prashant is a 20:14 20 minutes, 14 seconds short time will be about 8 uh 750 crores as well. 20:18 20 minutes, 18 seconds Okay and just one and the sugar I mean what is the recovery rate till 31st December and how do you see going it see 20:26 20 minutes, 26 seconds that going forward uh recovery is as of 31st December it is about 11.19%. 20:33 20 minutes, 33 seconds Okay. So, so going forward maybe the like January, February if you look at it this slightly it may increase. 20:40 20 minutes, 40 seconds Okay. Uh that's come from my thank you and wish you all the best. Thank you. Thank you. 20:48 20 minutes, 48 seconds Thank you. A reminder to all the participants that you must press star and one to ask a question. Next question 20:54 20 minutes, 54 seconds comes from the line of vehicle fund. Please go ahead. 21:00 21 minutes Yeah, thanks for taking my question again sir. uh you mentioned 55% market share in consumer products. Just wanted 21:08 21 minutes, 8 seconds to know is this uh with respect to a particular product or segment? Yeah, this is the sweetener segment. 21:18 21 minutes, 18 seconds Thank you. That's it from my side. 21:23 21 minutes, 23 seconds Thank you. A reminder to all the participants that you may star and want to ask a question. Next question comes 21:30 21 minutes, 30 seconds from the line of Somat Saha with 361 Capital PNK. Please go ahead. 21:36 21 minutes, 36 seconds Hello sir, thank you for the opportunity. So my question is already uh you have mentioned that you will sell around 15 lakh shares of four months. 21:44 21 minutes, 44 seconds Can I give some idea about the outlook going forward and when is the timeline for the sales? 21:51 21 minutes, 51 seconds Sorry can I didn't get the last part of your question Mr. Saha. So basically basically I'm asking about the you mentioned that you are going to sell 15 21:59 21 minutes, 59 seconds lakh shares of model around 51% of your total stake what is the uh 22:07 22 minutes, 7 seconds timeline for that deal and going forward uh what is the outlook of that investment in kuramand 22:15 22 minutes, 15 seconds so uh Mr. Saha the uh it's an enabling resolution uh which the the board has taken um so we will determine at the 22:24 22 minutes, 24 seconds right time you know basis any appropriate use of funds which we may have uh we will determine at that point in time it's an enabling resolution for 22:32 22 minutes, 32 seconds now okay so no in timeline that by that you will include that deal 22:40 22 minutes, 40 seconds no as I said it's an enabling resolution for now we will determine you know basis appropriate requirements what is to be done further. 22:49 22 minutes, 49 seconds Okay. So secondly sir can you give some idea of the current number of store count on your CPG segment and how much growth we can expect in next couple of years. 23:00 23 minutes Yeah. Uh so this is Balaji here and I head the CPG business. So uh if you look at our current coverage it will be in the range of about 1 to 1.2 lakh outlets 23:09 23 minutes, 9 seconds and there are about 70,000 outlets which buy from us on a quarterly basis. This will be growing uh as per our requirements of the business in the next few quarters. 23:22 23 minutes, 22 seconds Okay. Fair enough sir. And so on the on the dist front uh can you give an uh can you give the break up of the your grain 23:30 23 minutes, 30 seconds root is and all how much is coming from maze and how much is coming from your FCI and any idea of the current DNA pricing. 23:40 23 minutes, 40 seconds Um on the grain route uh uh we have only one facility in Andra uh roughly about 23:49 23 minutes, 49 seconds uh 120 120 KPD. The balance of 400 odd kpd is 23:55 23 minutes, 55 seconds in the uh molasses route. Uh the current uh pricing on ENA has been under 24:03 24 minutes, 3 seconds pressure due to underallocation of ethanol in Karnataka resulting in most players trying to sell ENA. It's hovering in Karnataka around 58 to 60. 24:14 24 minutes, 14 seconds Uh we have a better ENA pricing in Karnataka around 72 24:21 24 minutes, 21 seconds sorry in Tamil Nadu of around 72. Um we expect the pressure on ANA to continue for another uh month or so after which 24:29 24 minutes, 29 seconds we'll see an upward division once a crushing comes to a close in Kalaka markets. 24:38 24 minutes, 38 seconds Okay. And then lastly if I see the sugar division performance despite this strong your realization in the market we made 24:47 24 minutes, 47 seconds loss this time also. This is only for the lower quarter or anything that we are missing out sir. 24:54 24 minutes, 54 seconds Uh if you look at it this is a seasonal business. If you see the better results in a Q4 because normally all the sugar 25:01 25 minutes, 1 second companies like you will have only the two months operations during the quarter. when it comes to the next quarter the operation results will be 25:08 25 minutes, 8 seconds you can look at it all the sugar industries uh so usually Q3 we will report a loss 25:16 25 minutes, 16 seconds that's just the way I mean our Tamil Nadu season start very late Q3 um Karnaka kind of starts early November 25:26 25 minutes, 26 seconds u so you know the plants are technically not running um Jan Feb December Jan Feb 25:33 25 minutes, 33 seconds is when plants are generally running uh all together. So these are the more profitable months. So you will as an said you will see you will see that in 25:42 25 minutes, 42 seconds Q4. This has been the trend for us kind of every year. Okay. 25:49 25 minutes, 49 seconds But I mean maybe what what you really want to compare is the level of um losses versus the same quarter last year 25:58 25 minutes, 58 seconds where in which we fared better. Um so certainly from an AITA delivery we have fared better. This is obviously despite 26:05 26 minutes, 5 seconds uh you know FRP increases and uh increases in other input costs. Uh and this has really been driven by um uh 26:13 26 minutes, 13 seconds efficiency and cost work um which the business has done um over the last year. 26:22 26 minutes, 22 seconds Okay. Thank you sir. 26:28 26 minutes, 28 seconds Thank you. Next question comes from the line of Atul Rastoi an individual Mr. Please go ahead. 26:35 26 minutes, 35 seconds Yeah, good morning sir. Thanks for taking my question. My question was on the refinery business. So I think uh your costs have come down significantly 26:43 26 minutes, 43 seconds over the last 9 months or so. So you think that uh cost of $41 per metric ton is sustainable? Uh how do you see that? 26:55 26 minutes, 55 seconds Yeah. Uh thank you for the question. 26:57 26 minutes, 57 seconds This is Sur Khan. Uh you're right. the costs have come down during the current um year mainly on account of uh energy 27:06 27 minutes, 6 seconds efficiency projects that have implemented over end of last year giving results. So we expect uh we should be able to sustain these cost levels going 27:14 27 minutes, 14 seconds forward and uh I think uh if I see correctly the 27:21 27 minutes, 21 seconds uh the spread this quarter has come down significantly. What is your view on that and why the spreads have come down? 27:29 27 minutes, 29 seconds Yeah, as Mutu explained as part of his opening remarks, the world is turning into a sugar surplus scenario and uh we 27:38 27 minutes, 38 seconds also have higher white sugar stocks that are sitting in origin such as Brazine, Thailand as well as India waiting for 27:47 27 minutes, 47 seconds the world market to capture them as far as the right opportunity is concerned. 27:51 27 minutes, 51 seconds So the white premiums which is uh the indication of spread availability has been under pressure over the last 6 27:58 27 minutes, 58 seconds months. So uh this is basically a reflection of the surplus uh refined sugar and white sugar availability 28:06 28 minutes, 6 seconds globally. So we expect this tightness or the lower white premium environment to continue east for the next two quarters going forward. 28:17 28 minutes, 17 seconds Uh so just one more question on this. I noticed that the net working capital in this business is hugely negative like 28:24 28 minutes, 24 seconds $55 million as of December 25 and it has jumped from $25 million as of Deep 24. 28:32 28 minutes, 32 seconds So what is the main reason for this and do you think this will continue because negative working? 28:41 28 minutes, 41 seconds Sorry. Yes, please go ahead. 28:42 28 minutes, 42 seconds Sorry. Yeah. No, and a related question is uh I mean if working capital is this negative then it should uh throw up a lot of cash if I'm not wrong. 28:55 28 minutes, 55 seconds Okay. As far as the uh networking capital is concerned, you must see it in conjunction with the borrowings, external borrowings that are there. 29:03 29 minutes, 3 seconds While the external have come down, the net negative working capital has increased. So this is on account of basically a higher inventory turnover 29:11 29 minutes, 11 seconds that we are able to get as well as the long credit period that we have from the suppliers. 29:19 29 minutes, 19 seconds So if you look at our investor presentation our investor position 28 is 28 there you can see yes sir IPL we have given the note 29:28 29 minutes, 28 seconds because if you look at December it's a 532 where December 25th has come 78. We also given the note that why there is an 29:35 29 minutes, 35 seconds reduction because the non-f fund based limits has increased. So thereby you can see the upside in the negative working capital increase coincide with the reduction in the short-term borrow. 29:48 29 minutes, 48 seconds You know just from an operational perspective uh do you have huge I mean uh your payables are much much more than 29:57 29 minutes, 57 seconds inventory and receivables. Is that correct? 30:03 30 minutes, 3 seconds Yeah, that is the situation at the moment based on the sale and the inventory numbers that what we have. 30:11 30 minutes, 11 seconds Okay. So that's not every time. It's like this is a peculiar situation this quarter, right? 30:16 30 minutes, 16 seconds This quarter may not be reflective of the normal state of the class. Okay. 30:22 30 minutes, 22 seconds Okay. Okay. Fine. Thank you. 30:27 30 minutes, 27 seconds Thank you. A reminder to all the participants that you may press star and one to ask a question. 30:40 30 minutes, 40 seconds Once again, a reminder to all the participants that you may press star and one to ask a question. 30:54 30 minutes, 54 seconds Next question comes from the line of Ajit from Nisar. Please go ahead. Hello. Am I audible sir? 31:02 31 minutes, 2 seconds Yeah sir. Uh sorry I joined little late. I just wanted to understand uh you know uh 31:09 31 minutes, 9 seconds why did our uh non-s sugar branded business uh you know degrow and what is 31:16 31 minutes, 16 seconds uh the I mean your expectations going ahead. 31:22 31 minutes, 22 seconds Yeah. So I think uh on uh value value terms um on value terms you know the 31:29 31 minutes, 29 seconds price of uh pulses itself was about 35 to 40% lower in the market compared to the previous year. So if you look at value turnovers for the quarter for 31:38 31 minutes, 38 seconds non-sweetener business we would have degrone uh from 221 crores to about 155 crores and that is uh for dtd and that's 31:46 31 minutes, 46 seconds largely because of the uh reduction in the price of dal which which deg uh the other uh reason is that uh we are 31:54 31 minutes, 54 seconds focusing on we are taking some corrective actions in terms of channel corrections uh in order to revise uh the way in which we are doing our business 32:03 32 minutes, 3 seconds uh in terms of volume Our focus is also shifting more towards the uh profitable uh SKUs and we've uh we've we've done 32:11 32 minutes, 11 seconds backward integration of dals. So we've got our own dal processing plant. So our focus is more on dals. Uh because the 32:18 32 minutes, 18 seconds product mix moved more towards dals and the price of dal in the market was significantly lower than last year. You see us deg growth in the value turnover of the nonsweetener business. 32:30 32 minutes, 30 seconds And sir uh how do you see it going forward? I mean uh volume growth and probably in uh are we trying to enter 32:38 32 minutes, 38 seconds into some other state except probably Tamil Nadu and Karnataka. 32:44 32 minutes, 44 seconds So I think uh going forward the business will be uh consolidated and we will stay focused on ensuring that we sell more of 32:52 32 minutes, 52 seconds the profitable SKUs. Our focus on backward integration will remain and we will continue to run our plants at max 32:59 32 minutes, 59 seconds capacity. uh expansion into non- south markets for nonsweetener uh we will consider it only at the relevant point 33:06 33 minutes, 6 seconds of time as of now there are no plans to go beyond south for nonsweeteners 33:12 33 minutes, 12 seconds okay understood sir thank you so much thank you a reminder to all the 33:21 33 minutes, 21 seconds participants that you may press star and one to ask a 33:30 33 minutes, 30 seconds Once again, a reminder to all the participants that you may press star and one to ask a question. 33:50 33 minutes, 50 seconds Once again a reminder to all the participants that you may press star and one to ask a question. 34:05 34 minutes, 5 seconds Next question comes from the line of Rushab with RBSA Investment Managers LLP. Please go ahead. 34:12 34 minutes, 12 seconds Just to understand the the consumer product business on the nonsw category since the we have you know initiated the 34:19 34 minutes, 19 seconds you know foray into this what have been the learnings and what is the strategy how we change the strategy you know and we'll just share the thoughts going forward from two to three year 34:27 34 minutes, 27 seconds perspective and uh how what is you know I understand south market will be we have a good right to win there so how 34:34 34 minutes, 34 seconds are you planning to scale it up um so um rush I think uh some of the We've had some of the learnings. This 34:42 34 minutes, 42 seconds business also follows a certain amount of cyclicality and seasonality. So there are periods of the year when the price goes up and down and depending upon the 34:51 34 minutes, 51 seconds export import policies of the government uh the raw material prices of imported t and domestic t will vary accordingly. So 34:59 34 minutes, 59 seconds we've got our share of learnings. We've also done this year uh we have we had bought lentil uh in the raw form and we had take we had bought our own plant and 35:08 35 minutes, 8 seconds we have processed it. So we've done a full scale backward integration of this entire exercise and our learnings in that area are significant in terms of 35:17 35 minutes, 17 seconds the cost of conversion as well as how do we play out on the uh pricing. So there has been significant learnings in that aspect. There is also a significant 35:26 35 minutes, 26 seconds learning in terms of the channel and how the channel responds to a new brand which comes into this business and this category. So there are significant 35:34 35 minutes, 34 seconds learnings and our attempt is to try and build all of them into a more robust strategy for the next financial year as we go forward into it. And can you 35:42 35 minutes, 42 seconds please repeat the second part of your question that was not very clear to me? 35:47 35 minutes, 47 seconds I'm just asking in the south market at least I think we have a reasonable right to win. So how are you planning to scale it up since I think you know the learning curve has been has been 35:54 35 minutes, 54 seconds achieved or you think you think there's still more to go in terms of you know new product launches and the learning curve in the existing products. See I think uh the learning curve will never 36:03 36 minutes, 3 seconds stop because there will always be something more that we will be learning on this business. So I won't say that we are experts in this business as of now. 36:10 36 minutes, 10 seconds Uh but we have got significant learning and the right to win is very very clear in the south markets because of the Barry brand and the share that we have 36:18 36 minutes, 18 seconds in the sweetener business is is a very dominant share. So I think we'll be focusing more on the south markets in order to stay focused on the business. 36:27 36 minutes, 27 seconds And what about the new product launches that we were planning earlier? I think so there is a lot of work in progress on some of those new products and I think 36:35 36 minutes, 35 seconds we will come back to you maybe by the end of next quarter in terms of what the plans are we'll probably be able to outline some of the plans to you when 36:43 36 minutes, 43 seconds the time is more relevant for it please yeah so Rishab just to overlay what Baladi said and I think I sort of covered it earlier in the call as well 36:51 36 minutes, 51 seconds um where of course in the staples and in the sweetener segment for now we do aspire to go deeper into both these 36:58 36 minutes, 58 seconds segments Um as the uh as the build of the business progresses uh and particularly in the staples 37:06 37 minutes, 6 seconds segment we will you know you know aspire to build a more profitable model certainly on sweeteners we will be doing 37:13 37 minutes, 13 seconds this as well. We will also give you guys an overview as to the newer categories we wish to enter and we will do this in 37:20 37 minutes, 20 seconds the May call. Um as I said there's a body of work which we are just about concluding with some industry experts uh 37:27 37 minutes, 27 seconds to help us really uh you know put that narrative together on what new categories uh we want to enter are. 37:37 37 minutes, 37 seconds Okay. And are you looking at inorgive opportunity in this consumer nonsweetener business or Yes we are. 37:44 37 minutes, 44 seconds Okay. Okay. Thank you. 37:49 37 minutes, 49 seconds Thank you. A reminder to all the participants that you may best start and want to ask a question. Next question comes on the line of Ajit with Nisar. 37:58 37 minutes, 58 seconds Please go ahead. Uh yes sir. Just a follow up on the previous participants question. Uh you said that you know you are discussing 38:06 38 minutes, 6 seconds with some industry experts to expand your product portfolio. So have you appointed any you know external uh 38:13 38 minutes, 13 seconds consultant or is it internal team only or uh what is it exactly? 38:18 38 minutes, 18 seconds Yeah. Uh so the industry expert is external. 38:24 38 minutes, 24 seconds Okay. Okay. Understood. And uh we are expecting the report by probably this year, right? 38:30 38 minutes, 30 seconds Yes. It should be done in the next 6 weeks. As I said, we'll cover uh you know uh elements of that in May. We'll give you a clear picture of uh which 38:39 38 minutes, 39 seconds categories we're going to be going after. Uh by that time we will you know get into the next phase of of implementation. 38:47 38 minutes, 47 seconds Understood. conducted. Thank you sir. 38:49 38 minutes, 49 seconds Yeah, thank you. A reminder to all the participants that you may press star and one to ask a question. 39:08 39 minutes, 8 seconds Once again a reminder to all the participants that you may press star and one to ask a question. 39:23 39 minutes, 23 seconds Next question comes from the line of Gotham with Nalenda Securities. Please go ahead. 39:28 39 minutes, 28 seconds Yeah. Hi, just a followup. Did you mention that you're open to inorganic opportunities in the consumer segment 39:36 39 minutes, 36 seconds and if so, what would be like a typical product category or size of business that you would be looking at? 39:44 39 minutes, 44 seconds So, hi Goautam. Um yes we are open to inorganic opportunities. I think it would be the uh would be a nice optimal 39:52 39 minutes, 52 seconds way to grow. Uh I think as I mentioned earlier we'll come back clearly um with the categories we're looking to expand 40:00 40 minutes into. Um we don't see you know you know on sweeteners there won't be any need for inorganic you know it's a segment 40:08 40 minutes, 8 seconds which we uh have built over the last couple of years and will continue to build. Um so too on the on the staples 40:16 40 minutes, 16 seconds um there are other segments in the realm of food FMCG u wherein we certainly consider inorganic uh inorganic growth 40:24 40 minutes, 24 seconds and maybe we'll give you guys a an overview or some color of that in the may call. 40:31 40 minutes, 31 seconds Okay. Thank you. 40:38 40 minutes, 38 seconds Thank you. A reminder to all the participants that you may press star and want to ask a question. 40:52 40 minutes, 52 seconds Once again, a reminder to all the participants that you may press star and one to ask a question. 41:13 41 minutes, 13 seconds Once again, a reminder to all the participants that you may press star and one to ask a question. 41:37 41 minutes, 37 seconds Once again, a reminder to all the participants that you may press star and want to ask a question. 41:49 41 minutes, 49 seconds Ladies and gentlemen, as there are no further questions, we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments. 42:00 42 minutes Thank you all for logging into our uh Q earnings call. We look forward to meeting you all again uh at the end of the next quarter. Thank you and wish you a good day. 42:12 42 minutes, 12 seconds Thank you on behalf of EI Par India. 42:14 42 minutes, 14 seconds That concludes this conference. Thank you for joining us. You may now disconnect your lines.