Varun Beverages Ltd — Q4 FY26

Varun Beverages Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=5VeaQb-RE0I Published: 2 weeks ago

0:00 Ladies and gentlemen, good day and welcome to Baron Beverages Limited earnings conference call. As a reminder, 0:08 8 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 0:16 16 seconds conference call, please signal an operator by pressing star then zero in the touchstone. Please note that this conference is being recorded. I now hand 0:25 25 seconds the conference over to Mr. Anjari from CDR India. Thank you and over to you Mr. Chair. 0:33 33 seconds Thank you. 0:35 35 seconds Good afternoon everyone and thank you for joining us on Vun Beverages Q1 CY 2026 earnings conference call. We have 0:44 44 seconds with us Mr. Ravi Japurya chairman of the company Mr. Varun Japurya executive vice chairman and wholetime director and Mr. 0:52 52 seconds Raj Gandhi president and wholetime director of the company. 0:57 57 seconds We will initiate the call with opening remarks from the management following which we'll have the forum open for a question and answer session. 1:05 1 minute, 5 seconds Before we begin, I would like to point out that some statements made in today's call may be forwardlooking in nature and a disclaimer to this effect has been 1:13 1 minute, 13 seconds included in the results presentation shared with you all earlier. I will now request Mr. Ravi Jakura to make his open remarks. 1:24 1 minute, 24 seconds Good afternoon everyone and thank you for joining us on our earnings conference call. 1:30 1 minute, 30 seconds I hope you've had a chance to review our results presentation for the first quarter ended 31st March 2026. 1:40 1 minute, 40 seconds We are pleased to report a strong performance in the first quarter of CY 2026 1:46 1 minute, 46 seconds supported by healthy demand, disciplined execution and continued progress across our markets. 1:55 1 minute, 55 seconds Consolidated sales volume grew by 16.3% in quarter 1 CY 2026 driven by volume 2:03 2 minutes, 3 seconds growth of 14.4% in India and 21.4% 4% in international territories. 2:11 2 minutes, 11 seconds Revenue increased by 18.1% yearonear to rupees 65,742 2:18 2 minutes, 18 seconds million and ibida improved by 21% yearonear to 15,289 million. 2:29 2 minutes, 29 seconds In India, demand remained encouraging during the quarter, supported by our wide distribution reach, strengthened 2:38 2 minutes, 38 seconds execution and continued investments in manufacturing capability and chilling infrastructure. We 2:46 2 minutes, 46 seconds undertook targeted initiatives to drive volumes and strengthen our domestic portfolio, including pack upsizing, 2:55 2 minutes, 55 seconds selective price point launches in identified markets to onboard new consumers, 3:04 3 minutes, 4 seconds and new launches in the energy and juice based drink segments. The facilities commissioned over the last year have 3:12 3 minutes, 12 seconds stabilized well and are expected to support growth and enhance operating efficiencies going forward. Our 3:20 3 minutes, 20 seconds international business continued to make steady progress during the quarter. We consummated the 3:29 3 minutes, 29 seconds acquisition of Twea in South Africa through Beco, strengthening our manufacturing footprint and route 3:37 3 minutes, 37 seconds tomarket capabilities in Africa's largest soft drink market. The acquisition is expected to generate 3:44 3 minutes, 44 seconds meaningful operational and commercial synergies over time. 3:49 3 minutes, 49 seconds We have also entered into an agreement to acquire critically dairy through beco which will further strengthen our 3:57 3 minutes, 57 seconds presence in South Africa subject to regulatory and other approvals. 4:05 4 minutes, 5 seconds across Africa. We continue to build scale in snacks and deepen our presence in high potential markets in line with 4:14 4 minutes, 14 seconds our strategy of broadening the portfolio and strengthening consumer relevance. 4:21 4 minutes, 21 seconds In accordance with our dividend policy, the board of directors has approved an interim dividend of 25% of face value 4:31 4 minutes, 31 seconds rupees 050 per share resulting in a total cash 4:36 4 minutes, 36 seconds outflow of approximately 169 1,691 million. 4:45 4 minutes, 45 seconds Looking ahead, we remain confident in the long-term opportunity across our market supported by favorable 4:53 4 minutes, 53 seconds demographies, rising income, growing urbanization, and increasing 5:00 5 minutes beverage consumption. With adequate capacities, a diversified portfolio, and a strong distribution network, we are 5:08 5 minutes, 8 seconds all well positioned to deliver sustained growth and create long-term value for our for [clears throat] all our stakeholders. 5:18 5 minutes, 18 seconds I would like I would like to invite Mr. 5:21 5 minutes, 21 seconds Gandhi to share his the key highlights of our operational and financial performances. Thank you very much. Uh 5:30 5 minutes, 30 seconds thank you Mr. Chairman. Good afternoon and a warm welcome to everyone joining us today. Let me provide an overview of 5:38 5 minutes, 38 seconds the financial performance for the first quarter ended 31st March 2026. 5:44 5 minutes, 44 seconds Revenue from operations net of excise and GST increased [clears throat] by 18.1% yearonear to the level of 65,741 5:54 5 minutes, 54 seconds million in qyc 2026. 5:58 5 minutes, 58 seconds Consolidated sales volume grew by 16.3% yearonear to the level of 363.4 million 6:05 6 minutes, 5 seconds cases as compared to 312.4 million cases in Q1 cy 2025. 6:13 6 minutes, 13 seconds This growth was supported by strong volume growth of 14.4% in India and 21.4% in international territory. 6:22 6 minutes, 22 seconds At the consolidated level, net realization per case improved by 1.6% yearonear supported by improved 6:30 6 minutes, 30 seconds realizations in international directories primarily due to favorable currency movement. In India, realization 6:38 6 minutes, 38 seconds per case declined by marginal 1.5% primarily due to volume growth initiatives such as upsizing of packs 6:45 6 minutes, 45 seconds and sector price point launches in targeting markets to onboard new consumers. 6:55 6 minutes, 55 seconds CSG constituted 73.6% 6% of total volumes while non-carbonated beverages and packaged drinking water contributed 7:03 7 minutes, 3 seconds 7.5% and 18.9% respectively. In line with our focus on 7:10 7 minutes, 10 seconds healthier offerings, the mix of low sugar and no sugar products increased to the level of 63% approximately of 7:18 7 minutes, 18 seconds consolidated sales volume during the quarter. 7:22 7 minutes, 22 seconds Gross margins improved by 62 basis points to 55.2% supported by early stocking of key raw 7:30 7 minutes, 30 seconds materials despite an inflationary input environment. 7:35 7 minutes, 35 seconds EBIA increased by 21% yearonear to the level of 15,289.3 million with Eida margins improving by 7:45 7 minutes, 45 seconds 55 basis points to 23.3% in India. EBIDA margins improved by 112 7:54 7 minutes, 54 seconds basis points supported by operational efficiencies from strong volume growth 7:59 7 minutes, 59 seconds and improved gross margins that increased by 20.1% yearonear to the 8:08 8 minutes, 8 seconds level of 8,787 million driven by strong volume growth across both India and international markets. 8:18 8 minutes, 18 seconds Depreciation increased by 30.9% on about on account of commissioning of four new plants last year in Buxer, Priyaga, Damtal and Megalia. 8:29 8 minutes, 29 seconds Finance cost increased by 18% primarily on account of the acquisition of Pisa in South Africa while income on surplus 8:38 8 minutes, 38 seconds cash in India has been accounted for under other incomes. 8:44 8 minutes, 44 seconds During the quarter we completed the acquisition of Twisa in South Africa Beco at an enterprise value of uh ZAR 8:54 8 minutes, 54 seconds 253 million. In addition, Beco entered into a share purchase agreement for the acquisition of Critley Daily Proprietary 9:02 9 minutes, 2 seconds Limited at an enterprise value of approximately ZAR 234 million 9:09 9 minutes, 9 seconds including new work networking capital subject to regulatory approvals. 9:15 9 minutes, 15 seconds These transactions further strengthen our presence in the region and support our portfolio expansion in adjacent categories. 9:23 9 minutes, 23 seconds Overall, we continue to maintain a strong financial position supported by disciplined capital allocation, efficient working capital management and 9:32 9 minutes, 32 seconds a robust balance sheet with the capacities commissioned over the past year integration initiatives and a 9:40 9 minutes, 40 seconds strengthened distribution infrastructure. We are well positioned to support growth and drive profitability 9:47 9 minutes, 47 seconds profitability through improved operating leverage across markets. Despite the inflationary environment arising from 9:55 9 minutes, 55 seconds the prevailing geopolitical situation, we remain confident in our ability to near-term 10:01 10 minutes, 1 second [clears throat] 10:02 10 minutes, 2 seconds challenges through focused execution and supply chain agility while sustaining growth and 10:09 10 minutes, 9 seconds profitability. On that note, I have come to an end of our opening remarks and would like to now ask the moderator to 10:17 10 minutes, 17 seconds open the forum for any questions or suggestions that you may have. Thank you. 10:24 10 minutes, 24 seconds Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question, they press star and one on the touchstone 10:31 10 minutes, 31 seconds telephone. If you wish to remove yourself from the question, you may press star and click. Participants are requested to use handsets while asking a 10:39 10 minutes, 39 seconds question. Ladies and gentlemen, we will wait for a moment while the question. 10:49 10 minutes, 49 seconds The first question comes from the line of Pik Jeff. Please go ahead. 10:57 10 minutes, 57 seconds Hi, good afternoon team. uh a few questions first on uh you know Mr. Randi where you ended on the geopolitical bit 11:05 11 minutes, 5 seconds can you just uh you know talk about uh the impact that you expect from a near-term perspective especially on the packaging material and anything else 11:13 11 minutes, 13 seconds that we should bear in mind uh uh across different markets [clears throat] because of you know higher oil prices. 11:21 11 minutes, 21 seconds Well, I'll answer this uh debate. Uh first of all, in in our international 11:28 11 minutes, 28 seconds markets, our effect will be in the raw material practically 11:35 11 minutes, 35 seconds zero to couple of points maybe because we are well stocked till even not this quarter but the next quarter also. So we 11:44 11 minutes, 44 seconds normally carry six months inventory in international uh so our impact will be practically 11:51 11 minutes, 51 seconds very low and which actually gives us a edge over our competition because I don't think competition carries anywhere 11:59 11 minutes, 59 seconds close to 6 months as far as India is concerned we will have minor effect because again we were 12:08 12 minutes, 8 seconds reasonably covered for this quarter but for the next quarter we will have some effect which is uh but we are covering 12:17 12 minutes, 17 seconds that by reducing our discounts and becoming more efficient which is already starting to show and cutting our costs 12:25 12 minutes, 25 seconds where it is wherever we can and which is already showing in the first quarter results and and as long as the volumes 12:32 12 minutes, 32 seconds continue then I don't think there will be any effect on the on the bottom line. 12:41 12 minutes, 41 seconds Thank you Mr. 12:44 12 minutes, 44 seconds It does beyond beyond packaging material. Anything else that we should be uh aware of any u the only thing which can affect slightly 12:52 12 minutes, 52 seconds which you can't stop is you know the transportation cost and that there will be some effect but that we'll be more 13:00 13 minutes than half able to absorb it and it won't show any major issue on our P&L. 13:07 13 minutes, 7 seconds Got it. And Mr. Mr. Japurya if you uh you know I know you have a very you know strong season upcoming but do you also 13:15 13 minutes, 15 seconds let's say worry about from a consumption perspective if uh if the higher oil prices feeds into uh in the form of higher inflation uh does it imply some 13:24 13 minutes, 24 seconds you know push back uh from the consumers on the consumption of the products in general not just your category 13:31 13 minutes, 31 seconds I don't see it vive because consumption is very strong our and we are uh going 13:37 13 minutes, 37 seconds going through a season which is was terrible last year with all the rains and and with this weather I don't see 13:44 13 minutes, 44 seconds any we are very happy with what what is happening right now what the sales growths are and uh this quarter should 13:52 13 minutes, 52 seconds be rather much better than what we've already had more than that I can't answer on the rain god so 14:01 14 minutes, 1 second it's looking [clears throat] very positive sure and one another question on the uh point on the you response that you just 14:08 14 minutes, 8 seconds gave when I look at your uh you know inventory build uh buildup in the P&L it doesn't look like to be very high compared to let's say what you have had 14:17 14 minutes, 17 seconds two years back for example it is certainly higher than what it is last year uh so just wanted to be sure you 14:23 14 minutes, 23 seconds know the uh for India business are you covered for most part of the season uh for this quarter or uh there will be 14:32 14 minutes, 32 seconds this quarter com we are completely covered for this quarter and we are partly covered for the next quarter also in India business also Mr. Japur. 14:42 14 minutes, 42 seconds Yes. 14:43 14 minutes, 43 seconds Okay. Nice. Okay. Uh lastly uh you know on the realization bit I know there has been a lot of you know concern in the 14:50 14 minutes, 50 seconds last quarter. So I just wanted to uh you know I just wanted to uh speak about the or discuss this point. Uh last quarter 14:58 14 minutes, 58 seconds the realization in India was down about 4%. Uh this time around it is 1 and a half%. I know the seasons are very 15:05 15 minutes, 5 seconds different. the the quarter context is very different. Can you just still elaborate on uh uh because I was just thinking in the context of like you know 15:12 15 minutes, 12 seconds new launches that you have had done uh 10 rupees higher volumes this number has actually uh gotten better. So can you just elaborate a bit on this? 15:21 15 minutes, 21 seconds Well 10 rupees is a very small part. We only use it where we feel it is necessary. So it will be less than 5% of 15:30 15 minutes, 30 seconds our total volume or maybe even less than 2%. So practically would not show we are using it only to make sure our 15:37 15 minutes, 37 seconds distributors remain with us and where there is a huge stress then only we use it. So we are not really using 10 15:45 15 minutes, 45 seconds rupees. We have the products ready. If ever we need it we can use it but we are not using it. So 10 rupees is not affect 15:53 15 minutes, 53 seconds uh is not going to affect us. And and also as I said to you once the season is reasonable we we have 16:02 16 minutes, 2 seconds consolidated and cut some costs and all our new plants have also come into effect which further cuts our cost as 16:10 16 minutes, 10 seconds all the new plants which are coming up are much more cost effective and large plants where our production levels are much higher. 16:19 16 minutes, 19 seconds That's interesting sir because I always thought that you were already very efficient. So new plant angle I get but my point is that will still not show up on the realization side right 16:27 16 minutes, 27 seconds realization last quarter minus 4 this quarter minus one and a half. So uh in fact there were worries that you know this number could actually be worse than what it was in the December quarter. 16:37 16 minutes, 37 seconds What explains this delta then? 16:40 16 minutes, 40 seconds uh vic in fact uh we have premiumized lots of lot of products you know 16:47 16 minutes, 47 seconds or uh growth of something like 60% in our daily realization is 3x then the normal so focus is everywhere to 16:55 16 minutes, 55 seconds compensate from the system itself a major part secondly uh you know the tax 17:01 17 minutes, 1 second cut in the uh 22nd September on the GST also is going to help us and [snorts] uh 17:09 17 minutes, 9 seconds uh although So we had to reduce the prices but with the cost going up you know it will not be felt by the consumers. So I don't think end of the 17:17 17 minutes, 17 seconds day they will be that much affected by this and also as I said we we are running it 17:25 17 minutes, 25 seconds more efficiently and making sure this counting is reduced little bit. 17:32 17 minutes, 32 seconds Got it. Thank you and wishing you all the very best. Thank you. 17:38 17 minutes, 38 seconds Thank you. Next question comes from the line of Aishroy with NUMA. Please go ahead. 17:44 17 minutes, 44 seconds Yeah, congrats on very good set of numbers. Uh my first question is on aluminium cans. Uh so you have tied up 17:51 17 minutes, 51 seconds your inventory for PET and most of the packaging quite well and I do understand that your salience to aluminium cans is 17:58 17 minutes, 58 seconds much lower than the other large national player. if you could tell us uh how is there any shortage which you are facing 18:06 18 minutes, 6 seconds and here uh what will be your salient in terms of percentage aluminium can well I think first of all our aluminium 18:14 18 minutes, 14 seconds can sales is less than 2% for us so it's very very small secondly we have tied up 18:21 18 minutes, 21 seconds a reasonable quantity to more than cover our 2% volumes and maybe little higher so we will be able to get cans they are 18:30 18 minutes, 30 seconds slightly more expensive but that again as I said wherever we are finding a a large cost up we are cutting discounts 18:39 18 minutes, 39 seconds and uh giving less uh uh giving less discounts in the market because there's shortage of uh for everyone and the 18:48 18 minutes, 48 seconds costs are going up for everyone. So if the demand is there then we are making sure that overall our bottom line is not getting affected. 18:58 18 minutes, 58 seconds Yeah. And customers must be shifting right if there is a can shortage there is a section of customers will not sacrifice their consumption right they will switch to 19:07 19 minutes, 7 seconds absolutely absolutely absolutely so if you can't get a can then you go and go for PET or you go for 19:14 19 minutes, 14 seconds glass mostly PET right uh my second question is on water so if I see the Reliance presentation 19:22 19 minutes, 22 seconds which has come up uh they are saying that they are now India's third largest branded water player if you could comment in terms of your standing within 19:30 19 minutes, 30 seconds the top uh players you are you have always been there wanted to understand is the market share changing second is the volume growth initiatives in 19:38 19 minutes, 38 seconds carbonated have done quite well which is visible in last two quarters double date volume growth in water at some stage would you need volume growth uh 19:46 19 minutes, 46 seconds initiative there also no we don't over push water we we try 19:54 19 minutes, 54 seconds and make sure our basic margins remain and We may want to make sure our monopoly customers and our busy coolers 20:03 20 minutes, 3 seconds which we are which is close to a million plus in the market on those on those outlets. We make sure our water is 20:11 20 minutes, 11 seconds serviced properly. But water is some it's like a commodity. You can increase your sales as much as you want. You just have to give discount which we are not 20:19 20 minutes, 19 seconds in the game of and that's why we can sustain our margins. 20:25 20 minutes, 25 seconds So last question. So in terms of energy drink portfolio how has uh sting done and you had also mentioned in the previous quarter in terms of expansion 20:33 20 minutes, 33 seconds of that portfolio including the scaling up of mid-pric adrush. If you could tell us how has king can done how has ping overall portfolio done and how has adrush done. Thank you. 20:43 20 minutes, 43 seconds So adrush has done phenomenally well. 20:47 20 minutes, 47 seconds Adrush we are feeling some pinch of get the shortage of cans because we had not expected ad rush to do as well as it is doing. So there is slight uh pain there. 20:59 20 minutes, 59 seconds And also we've got energy drink sting in cans with our new uh classic uh sting 21:08 21 minutes, 8 seconds what we call which has been launched and it's doing extremely well and again uh the demand is much higher than what cans 21:16 21 minutes, 16 seconds we can get but it's much better than what we had planned. So we'll be doing better than what we had planned but uh 21:23 21 minutes, 23 seconds still there will be some crunch on that but we have put the uh sting classic in pet bottles also which is doing 21:31 21 minutes, 31 seconds extremely well but it has gone only in this uh uh in April only in the market. 21:38 21 minutes, 38 seconds So you will see a big response of that in this quarter. 21:42 21 minutes, 42 seconds And the one last followup essentially if I see this quarter results all the SMCG results have been ahead of expectation 21:50 21 minutes, 50 seconds obviously yours Nestle Bajach consumer and then BST industries so overall consumption at least March quarter are 21:58 21 minutes, 58 seconds you picking up that overall trend have accelerated now we have to take quarter uh to quarter but uh based on your uh 22:05 22 minutes, 5 seconds understanding and what you are seeing in the results would you say that there is an uptick? 22:11 22 minutes, 11 seconds There is definitely an uptick. I mean unless until the market is growing there's because there is campa in the market and they are very aggressive and 22:19 22 minutes, 19 seconds they are uh growing the volumes in the market and even coke is growing. So 22:26 22 minutes, 26 seconds there is overall industry is growing I don't know if we are growing faster but kappa is definitely as they are adding 22:34 22 minutes, 34 seconds capacity they are uh growing in the market. So definitely market is growing uh at a huge pace and I think as there 22:42 22 minutes, 42 seconds is enough competition everybody is more in the market putting more chilling equipments more outlets are being opened so I am very bullish on the Indian 22:51 22 minutes, 51 seconds market and I believe this should continue in double digits for the next 5 10 years at least. 22:59 22 minutes, 59 seconds So thanks that's all for my thank you. 23:05 23 minutes, 5 seconds Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Adia Sman with CLSA. 23:15 23 minutes, 15 seconds Please please go ahead. 23:17 23 minutes, 17 seconds Yeah. Hi. Uh good afternoon and thanks for the opportunity. So two questions. 23:21 23 minutes, 21 seconds Uh firstly in terms of new products uh can you get give us a sense of uh what new launches how the new launches have 23:29 23 minutes, 29 seconds done particularly around me? You mentioned that fruit trains have done well. Uh as well as the milk based beverages if you can give us some sense 23:37 23 minutes, 37 seconds of what the contribution is and how the growth has been. And uh uh secondly uh uh in terms of summer now now you've 23:45 23 minutes, 45 seconds indicated that obviously we've had a strong start uh and and and is there any uh sort of risk uh uh to 23:55 23 minutes, 55 seconds this in terms of uh unseasonal uh weather at at any uh specific part of the country or or do you expect uh summer this year to be uh very strong? 24:05 24 minutes, 5 seconds Thanks. 24:07 24 minutes, 7 seconds Well, what we are hearing summer looks to be very good. Uh, now it's a fear of rain coming. I can't answer you. But if 24:16 24 minutes, 16 seconds the weather gods are not as with us, which they were not last year, but overall it's already a month has passed. 24:23 24 minutes, 23 seconds So the trends are looking very good. If the weather remains like this, there's no reason why we shouldn't do extremely 24:29 24 minutes, 29 seconds well. And uh, our products are doing extremely well. Uh Derry is growing at 24:36 24 minutes, 36 seconds 60 to 70%. Uh Nimbus is growing at 50 60%. Uh Tropicana PET is growing at I think more than 100%. 24:47 24 minutes, 47 seconds So all and the new energy drink which we launched at mid price which is at 60 rupees. Adrillin rush is doing extremely 24:56 24 minutes, 56 seconds well. Even our energy drink in the cans is doing extremely well. And the new launch of sting classic 25:05 25 minutes, 5 seconds uh which is the golden black is started only about few weeks back but the 25:13 25 minutes, 13 seconds initial response is fabulous and we feel it will become another sting hopefully and at the moment it's looking very positive. 25:28 25 minutes, 28 seconds Anything else? Thank you. 25:32 25 minutes, 32 seconds Across the line of the participant will promote the next in line that is uh Tan Shuans from MK Global. 25:40 25 minutes, 40 seconds Yes sir. Hi many congratulations on a strong set of numbers. Uh sir first question uh I wanted to check uh in the 25:49 25 minutes, 49 seconds base quarter uh the rain disruption was across all the three months last year or it was more towards the second half of 25:57 25 minutes, 57 seconds the quarter. uh if you could provide some. 26:01 26 minutes, 1 second Well, it was mainly end of April to end of June for sure and [clears throat] even continuing to the the third quarter 26:10 26 minutes, 10 seconds but uh for this quarter I think it was mainly May and June was really disaster and and April end was not great. 26:21 26 minutes, 21 seconds Got it. Fundamentally May and June. 26:24 26 minutes, 24 seconds Okay. Okay. And u there are some uh supply chain issues right so which might have impacted uh opening of new plants 26:32 26 minutes, 32 seconds for competition u uh on the other side we have uh sufficient capacities. Uh so wanted to 26:39 26 minutes, 39 seconds check can we benefit from this or the competitive intensity u that you were anticipating uh is on uh those lines itself. 26:50 26 minutes, 50 seconds I think competition is there but I think there is enough market for everybody to take as I have I have said that every 26:57 26 minutes, 57 seconds time and as I said there we are adding about close to half a million and maybe 27:04 27 minutes, 4 seconds more uh chilling equipments which is between uh campire poke and ourselves and plus the the uh individual outlets 27:14 27 minutes, 14 seconds are buying 4 500,000 so there's a million uh chilling equipment refugees going in the market on a year-to-year 27:22 27 minutes, 22 seconds basis that is expanding the market drastically and I think it's only going to be who 27:29 27 minutes, 29 seconds whoever does a good go-to market and whoever can expand his distribution will win the game. 27:37 27 minutes, 37 seconds We are trying to do that. We are expanding at about 3 to 400,000 outlets every year and we are doing the same. 27:45 27 minutes, 45 seconds Hopefully this year we might expand half a million outlets and uh I think that's what is giving us the growth. 27:53 27 minutes, 53 seconds Uh you mean half a million busy coolers or about new outlets? We don't give coolers to everyone. 28:02 28 minutes, 2 seconds Okay. Understood. Understood. Sir, uh last couple of uh bookkeeping questions. 28:07 28 minutes, 7 seconds uh for Twisa and Critley Derry uh what is the revenue and margin run rate that can be baked in for TY26 if you could 28:15 28 minutes, 15 seconds provide some color and second one what is the expected KEX well I think what we have told the capex 28:24 28 minutes, 24 seconds what we have bought it at which is what TWA 800 we have bought at 800 crores revenue 28:32 28 minutes, 32 seconds revenue for 1140 and bought at and We have paid 1140 crores. 28:42 28 minutes, 42 seconds Uh sorry I was checking for the consolidated capex for the company sir and the revenue and margin run rate for visa and ply and py. 28:50 28 minutes, 50 seconds Well our capex is not going to be very large this year because we have enough capacity. We are most probably going to 28:57 28 minutes, 57 seconds only have one plant and it will be less than what is no. Yeah. So our capex will be less than 5 600 crores this year. 29:07 29 minutes, 7 seconds It'll be very low this year. We have enough capacity except the new plant which we have bought. 29:19 29 minutes, 19 seconds Does that answer the question? Uh yeah uh sir just the revenue and margin generate also for quiza and quickly 29:26 29 minutes, 26 seconds daily. Well uh revenue was 800 crores for Twisa and okay 29:34 29 minutes, 34 seconds and about 160 crores for criti so about consolidated maybe close to a,000 crores 29:41 29 minutes, 41 seconds between the two okay and margins I think it's a bit too early let us take it over properly it's been 29:48 29 minutes, 48 seconds 10 15 days only or a month so we are going to correct the margins I mean obviously he was doing all right but 29:56 29 minutes, 56 seconds with with the consolidation of both Bevco and uh Pisa we we have enough room and 30:04 30 minutes, 4 seconds they've got enough production capability which we were struggling in beco so which will help us give growth going 30:12 30 minutes, 12 seconds forward without putting too much capex and uh thank you so much for answering 30:20 30 minutes, 20 seconds your questions and all the best to thank you thank Thank you. Next question comes 30:27 30 minutes, 27 seconds from the line of Anand Sha with Access Capital. Please go ahead. 30:32 30 minutes, 32 seconds Yeah. Hi sir. Congratulations local numbers. Just a few questions. Uh so firstly Ken you have some granular details on how the international has 30:40 30 minutes, 40 seconds grown. I mean you've grown almost 21% which is quite strong. So it means uh um your your South Africa business would 30:48 30 minutes, 48 seconds have driven bulk of this growth. But if you can give some granular color there. 30:54 30 minutes, 54 seconds No, it's uh it's not only South Africa actually all our international businesses have grown. So 31:04 31 minutes, 4 seconds uh to your Zimbabwe and all which were I mean X of South Africa was growing in let's say mid single digit to high 31:11 31 minutes, 11 seconds single is that also now come back to double digit and all no no absolutely South Africa is growing at close to 31:22 31 minutes, 22 seconds average is 21% international South Africa is very close to what the international market is growing 31:29 31 minutes, 29 seconds okay and and and X of South Africa also would it be double digit? 31:34 31 minutes, 34 seconds Yeah. Yeah. All international market otherwise we wouldn't be able to average 21.4%. 31:40 31 minutes, 40 seconds I think was the only one which was weak uh last quarter and that was because of Ramzan being preponed. 31:49 31 minutes, 49 seconds Okay. Okay. Got it. Got it. And so on the food distribution if I do the math between console and standalone it seems 31:57 31 minutes, 57 seconds branded has moved from uh I mean Q1 last year was of course the start move from 40 50 crores to 120 crores. I mean last year you highlighted 350 odd crores for 32:06 32 minutes, 6 seconds cy25 for food distribution in Africa. So how do you see that scaling up this year? 32:17 32 minutes, 17 seconds Anand the foods in the first snack foods in the first quarter this year is 112 crores which was last year 52 crores in the first quarter. 32:27 32 minutes, 27 seconds Okay. Okay. So is you will consistently see further ramp up as well right? I mean in this interate as well. 32:34 32 minutes, 34 seconds Absolutely. Because uh Zimbabwe plant has just come up last year end of last year. 32:40 32 minutes, 40 seconds So got it. 32:41 32 minutes, 41 seconds There is consolidation and growth coming. 32:46 32 minutes, 46 seconds Got it. Got it. Okay. Oh, thanks a lot sir. Those those are the two questions. Thank you. Thank you. 32:54 32 minutes, 54 seconds Thank you. Next question comes from the line of Kap. Please go ahead. 33:00 33 minutes Good afternoon. Most of my questions are answered. Just just wanted to get your sense on market shares. 33:06 33 minutes, 6 seconds uh you know uh on a on a very high base you know you've done an exceptionally good number also uh given the availability issues which you are able 33:14 33 minutes, 14 seconds to tide upon just wanted to get your sense about do you see opportunities in the market where maybe some of the other players have not been able to do as well 33:22 33 minutes, 22 seconds as you uh in in the in the current situation and that could play out in terms of at least near-term market share gains. How do you see the situation on ground right now? 33:33 33 minutes, 33 seconds I can't answer for other people. The only thing I can say we are fully prepared and we have enough uh capacity 33:40 33 minutes, 40 seconds that even if we get a 50% growth we can comfortably do it without adding any capacity. 33:47 33 minutes, 47 seconds So we are fully prepared. We have the raw material. We have the back end covered. So we only hope to God to give 33:54 33 minutes, 54 seconds us the good weather and then we should get a good set of results. 34:01 34 minutes, 1 second Got it. And the second question is on distribution. So you do mention a certain number that you would like to do every every year in terms of growth. Uh 34:09 34 minutes, 9 seconds uh so this year uh calendar year you know you know that 8 to 10% type of uh you know addition number is uh you know 34:17 34 minutes, 17 seconds is you know is the year uh we are panning out consistently that yeah that's what I had just said that I 34:25 34 minutes, 25 seconds practically this year we have added more than 10% outlets. So that's why we are hoping to add close to half a million outlets with a base of about 4 million. 34:36 34 minutes, 36 seconds So great question. Thank you. 34:42 34 minutes, 42 seconds Aggressively increasing our go to market and that is what is actually giving us the results. 34:52 34 minutes, 52 seconds Great issue. Thank you. 34:56 34 minutes, 56 seconds Next question comes from the line of Latika Chopra with JP Martin. Please go ahead. 35:02 35 minutes, 2 seconds Yeah. Hi. Uh uh you know two follow-up questions uh to your earlier comments. 35:06 35 minutes, 6 seconds Uh one was on uh you know availability of raw material particularly PET. Uh you know you mentioned your reduced sales of 35:14 35 minutes, 14 seconds packing materials. So we're just wondering uh you know have you started to see any visible signs of challenge for the smaller unorganized players in 35:23 35 minutes, 23 seconds the market? And uh the second bit was uh you know in your assessment with this kind of inflation which is going to come 35:31 35 minutes, 31 seconds up not necessarily for you but for for the industry do you see potential scope for price increases ahead as uh the 35:40 35 minutes, 40 seconds broader industry tries to offset the inflation impact? 35:44 35 minutes, 44 seconds Well, I see the B brands and the uh other players selling water. They are already they've not increased the price 35:53 35 minutes, 53 seconds but they have reduced the discounts. So that we are already seeing in the market because the costs are going up and I 36:00 36 minutes feel that will further happen once I think the gasoline prices go up. So 36:08 36 minutes, 8 seconds I mean there will be some pain but I think we are hopefully reasonably covered. I can't say fully covered because I don't know what the prices 36:16 36 minutes, 16 seconds will be but at the moment for this quarter we are you know covered with our raw material now gasoline price I don't 36:24 36 minutes, 24 seconds know so that is the only vulnerable part and that is not such a large part in our scheme of the whole thing and if it 36:31 36 minutes, 31 seconds happens it is higher then we will further reduce our dispounting to some level and make sure manage and if our 36:39 36 minutes, 39 seconds volumes are good I we are mainly concerned about our volumes. If the weather remains like this and the we can 36:48 36 minutes, 48 seconds grow at the same pace or better than this then I not worried about few few rupees 36:57 36 minutes, 57 seconds understood and uh you know initially uh you had explained the difference of realization for India business at 1.5% 37:05 37 minutes, 5 seconds decline from 4% in the pri quarter this was an account of product mix and also lowering of discount sequentially 37:13 37 minutes, 13 seconds you know assuming uh uh you know uh status quo and other things but is one and a half% more like what we should 37:21 37 minutes, 21 seconds build for rest of the year assuming the current levels of discounts are maintained or because of seasonality you 37:29 37 minutes, 29 seconds know this number could fluctuate it might even become lower because it depends how strong the season is or it 37:36 37 minutes, 36 seconds could remain that but that gets more than covered as I said if the numbers start happening our cost start reducing 37:43 37 minutes, 43 seconds drastically, our efficiencies go up. So this 1 or 2% we can cover easily 37:50 37 minutes, 50 seconds if the numbers are right and we feel the numbers are going to be good this quarter. Understood. Thank you so much. 37:59 37 minutes, 59 seconds You're welcome. 38:02 38 minutes, 2 seconds Thank you. Next question comes from the line of Percy Pantaki with Securities. Please work. 38:09 38 minutes, 9 seconds Uh hi team. Uh good afternoon and congrats on a great set of numbers. Uh I'm looking at the uh standalone uh P&L 38:17 38 minutes, 17 seconds and uh you've done a 11% uh sales growth here on a fairly high base of close to 18% in uh the same quarter last year 38:26 38 minutes, 26 seconds which is like a 14% uh 2-year keer growth. Now if I look at uh the uh uh uh 38:34 38 minutes, 34 seconds 2-year keer growth for the previous quarter it was 8% even for the last four quarter average the 2-year keer growth 38:41 38 minutes, 41 seconds was 8%. I'm using two-year keer so as to sort of offset any sort of high base low base in seasonality and so on and get 38:49 38 minutes, 49 seconds the underlying uh growth trends. So, what do you think is the reason that the 2-year keer has accelerated so sharply 38:57 38 minutes, 57 seconds from about a 6 to 8% to a 14% this quarter? Is it just the uh summer season 39:04 39 minutes, 4 seconds being better? Is that the main part of it? Or do you think that the uh uh uh 39:10 39 minutes, 10 seconds rate of uh uh market share gained by the new incumbent has uh uh probably slowed 39:16 39 minutes, 16 seconds down and uh that is why uh uh the growth is more visible now or is there a third reason I'm not getting? 39:28 39 minutes, 28 seconds But I think we have never had [clears throat] 6 to 8% growth except last year when the weather was really 39:36 39 minutes, 36 seconds bad in India did not grow. We've been average growing at a cagar of 23%. So I don't know where you are getting 6 to 8% growth. 39:48 39 minutes, 48 seconds Sir like for example Q4 CY 25 was a 6% on a base of 9%. So that gives me a 2-year kar of about 8%. 39:58 39 minutes, 58 seconds Last year was the one exceptional year. 40:01 40 minutes, 1 second That's what I'm trying to say. Otherwise on an average we've been always growing in double digits 40:08 40 minutes, 8 seconds and with some uh new acquisitions we have grown at more than 20%. But more 40:15 40 minutes, 15 seconds double digit growths have been there. If you look at last five years 10 years it's only last year India because of the weather we our growth was lower. That's 40:24 40 minutes, 24 seconds the only reason. So we still believe and are still we would say we definitely would grow in double digits going 40:32 40 minutes, 32 seconds forward for the next 5 10 years I don't see any challenges but of course our uh 40:39 40 minutes, 39 seconds business is partly seasonal so in case there's some abnormal rains or something happens that I can't answer you but 40:46 40 minutes, 46 seconds overall Kagar will definitely be more than that. 40:50 40 minutes, 50 seconds Understood sir I was not talking only of last year I was looking at two year ker but anyways I'll take this offline and uh similarly just wanted to ask on 40:58 40 minutes, 58 seconds international business also uh this quarter there has been a significant uh acceleration in growth versus what we have seen in the past few quarters. Uh 41:07 41 minutes, 7 seconds just wanted to understand uh the reason for that as well. 41:12 41 minutes, 12 seconds Again everywhere we are you know when we take a new territory it takes us a little bit of time to stabilize that 41:19 41 minutes, 19 seconds territory. Last year actually we had just taken South Africa and DRC had just started for us. So some challenges and 41:28 41 minutes, 28 seconds then you know with the Gaza war we had some other challenges. So all those things put together last year was a 41:35 41 minutes, 35 seconds tough year for us but if we don't have uh external issues we are growth we 41:43 41 minutes, 43 seconds would still believe should not be less than uh double digits comfortably outside or in the country. 41:53 41 minutes, 53 seconds Understood sir. And my last question is on uh uh the input cost. While it has been discussed in detail and we know you have covers uh for one or two quarters 42:02 42 minutes, 2 seconds but if crude remains at 100 for several more quarters at some point of time you will either have to increase your prices 42:10 42 minutes, 10 seconds or reduce your discounts or take the hit on the P&L. So my question was a little bit longer term a few quarters down the 42:19 42 minutes, 19 seconds line if the input cost scenario remains where it is. Do you think you would be able to hold your margins or uh it is a fair assumption to say that maybe 42:27 42 minutes, 27 seconds margins might take a hit a few quarters down the line? 42:31 42 minutes, 31 seconds You know it's very difficult to answer but only thing I can tell you we might be the only company which is holding 6 42:37 42 minutes, 37 seconds months inventory. So I think other people will blink before I blink. So I think we have to wait and see. Either 42:45 42 minutes, 45 seconds everybody will take the prices slightly up to cover the cost or take a hit. I 42:52 42 minutes, 52 seconds can't answer you that but I don't see us taking a hit because I think other people have much bigger issues than I have. 43:00 43 minutes Got it. Very helpful. Thanks and all the best. That's it from me. 43:08 43 minutes, 8 seconds Thank you. Next question comes from the line of Jay Doshi K. Please go ahead. 43:14 43 minutes, 14 seconds Yeah. Uh hi. Uh congratulations and good numbers and thanks for the opportunity. 43:19 43 minutes, 19 seconds Uh my question is you know with with upsizing of packs from 250 ml to 400 ml are you seeing more consumption uh and 43:28 43 minutes, 28 seconds maybe hence you do you expect industry volumes to be you know growing faster by a few percent points versus the earlier 43:35 43 minutes, 35 seconds growth rate or are you seeing you know the consumers who are earlier buying uh you know uh larger pack 40 rupee 35 43:45 43 minutes, 45 seconds 40 rupee packs are now buying two units of uh you 20 rupee SKUs basically are is 43:52 43 minutes, 52 seconds consumption going up in liters uh you know versus uh you know because of this upsighting of packs for yourself and 43:58 43 minutes, 58 seconds industry. So that's question number one the consumption is going up in liters as 44:05 44 minutes, 5 seconds well as in numbers both ways just if it goes up in liters is not good enough for us. We need the numbers to go up also 44:14 44 minutes, 14 seconds and liters to go up also. So both are happening and that is why we are seeing such large growths coming. 44:21 44 minutes, 21 seconds By any chance as a one-off would you be able to give us some color in terms of what's the broad uh uh growth at a unit 44:29 44 minutes, 29 seconds level in terms of number of PT bottles or whatever versus 15% volume growth which is you know in liters. So we are giving in 8 o and that's what we quote 44:38 44 minutes, 38 seconds otherwise each size we have to start measuring some are much smaller some are much larger so it becomes very difficult that's why we give in 8 o which is the 44:47 44 minutes, 47 seconds best way to second is with you know we have to start by 44:54 44 minutes, 54 seconds got it uh second question is with uh you know uh you know uh upsizing of 250 ml to 400 ml across the country across 45:03 45 minutes, 3 seconds portfolio uh do expect any more sort of changes in your pack price architecture? 45:09 45 minutes, 9 seconds I heard you comment earlier that there is no need for you to actually uh you know step up focus on 1050 price point 45:17 45 minutes, 17 seconds but is there any pack price architecture change if there is left uh in your view? 45:23 45 minutes, 23 seconds Well, well, I I I don't want to say something, but only thing is we will see what the market requires and we will 45:32 45 minutes, 32 seconds play with that and I really if I had something in mind I would not be able to diverge it anyway because that's not good for us. 45:41 45 minutes, 41 seconds Understood. And last thing is on profitability uh you know should we expect that you know PT inflation aside uh you know for 45:50 45 minutes, 50 seconds the crude inflationary thing aside should we expect that you broadly be able to maintain your margins in India 45:57 45 minutes, 57 seconds business uh you know so that 50 to 400 ml upsizing has actually not really had 46:04 46 minutes, 4 seconds any meaningful any impact at all on your uh India business margins that is what we see in March quarter Is that is this 46:12 46 minutes, 12 seconds something that we can extrapolate for at a fullear level? P inflation I can understand that we can 46:21 46 minutes, 21 seconds No no but full quarter we had the upsizing. So whatever effect had to come has already come and so costs have been absorbed by the 46:30 46 minutes, 30 seconds cost. Yeah. Yeah. So we our volumes and our efficiencies have absorbed all that 46:36 46 minutes, 36 seconds and I as I larger plants are much more cost efficient and our cost of production is considerably half of what we were doing in our smaller plants. 46:50 46 minutes, 50 seconds So scale is what is giving us the strength and cost reduction and which is what is playing with us. So we are able 46:57 46 minutes, 57 seconds to consume some minor uh cost upsides which we can easily absorb. 47:05 47 minutes, 5 seconds Uh thank you very much. Perfect sir. Thanks. 47:13 47 minutes, 13 seconds Thank you. Next question comes on the line of Robert Marshall Lee with Kusana Capital. Please go ahead. 47:20 47 minutes, 20 seconds [clears throat] 47:20 47 minutes, 20 seconds Hello. Um just a couple of simple questions. Um firstly just in terms of the impact in uh the new plants uh is there any kind of material impact from 47:29 47 minutes, 29 seconds utilization rates uh you know where are you running the new plants uh and do you have any fixed cost leverage there um 47:36 47 minutes, 36 seconds and secondly just in terms of uh global sugar prices have been falling uh is any impact on the Indian market at all 47:44 47 minutes, 44 seconds there is some sugar prices are reasonably consistent here fortunately they have not gone up which is the 47:51 47 minutes, 51 seconds positive side of uh international prices and in the international market definitely we've had a gain of uh uh 48:00 48 minutes sugar costs. So wherever we are uh international prices have come down uh significantly but in India it's been 48:08 48 minutes, 8 seconds reasonably constant fortunately it's not gone up. 48:15 48 minutes, 15 seconds Thank you. And in terms of utilization of new plants um just is there any kind of the real impact? Utilization is definitely helping as our uh volumes are 48:25 48 minutes, 25 seconds going up. The plants are getting more utilized and the bigger plants are we are using more and we have shut down 48:31 48 minutes, 31 seconds couple of our real uh high cost plants which were very small and which were very old. So overall efficiencies are 48:41 48 minutes, 41 seconds helping cost cutting is helping and uh looking at the situation looking at the costs which are going to go up. We have 48:49 48 minutes, 49 seconds tried to curtail our costs and make sure run it a bit more efficiently than we would have I guess. 48:59 48 minutes, 59 seconds Thank you. That's great. Thank you. 49:05 49 minutes, 5 seconds Thank you. Next question comes from the line of Arj systematics groups. 49:12 49 minutes, 12 seconds Hello. Yes. 49:17 49 minutes, 17 seconds Yeah. So I just have a quick question on the sales thing of the new product as well as 49:25 49 minutes, 25 seconds Mr. Ch. There's a lot of disturbance in the background. Can you come to a place where there's less uh background noise? Thank you. 49:35 49 minutes, 35 seconds Um I was just asking the sales mix currently as well as the sales mix which is like expected in a few years down the 49:42 49 minutes, 42 seconds line especially with the traditional coke and the new uh alternative suggesting or gatorade. 49:52 49 minutes, 52 seconds I'm not getting your question properly. 49:56 49 minutes, 56 seconds I mean a mix is you know this keeps changing on a year-to-year basis. Energy is definitely becoming a big part uh of 50:03 50 minutes, 3 seconds the portfolio. Dairy is becoming a big part. Hydration is becoming a big part. 50:09 50 minutes, 9 seconds But this will keep changing year on year. Very difficult to say. The new Gen Z keeps on asking for something new all 50:15 50 minutes, 15 seconds the time and we have everything to support whatever is required. So because it's the same machines who produce it. 50:24 50 minutes, 24 seconds So it's just uh changing the flavors or changing the packaging. 50:30 50 minutes, 30 seconds Um and also like uh you said that you are opening new plants and they are much more efficient than the previous one. So 50:38 50 minutes, 38 seconds like what is the expected payback period for these payback period for what uh of these plants? 50:49 50 minutes, 49 seconds I mean we need capacity. So one it's a different I mean we have to open plants otherwise I can't keep on uh increasing 50:57 50 minutes, 57 seconds my uh sales if my sales are going up they have to be backed up by the only thing we are saying is now we are not 51:05 51 minutes, 5 seconds opening smaller plants and our plant efficiency being larger plants is much better than what it used to be in the older plants. 51:15 51 minutes, 15 seconds Just to give you an example, if we had a 200 bottles per minute line, now we've got a,000 bottles per minute line. And the manpower is the same. So it's five 51:25 51 minutes, 25 seconds times more production, but uh using the same manpower. 51:32 51 minutes, 32 seconds So those are the efficiencies I'm talking about. 51:36 51 minutes, 36 seconds Okay. I was asking for the payback period. 51:42 51 minutes, 42 seconds It depends on uh you know it's very difficult to answer for each plant. 51:49 51 minutes, 49 seconds Normally we work on a 3 to four year payback 30%. 52:04 52 minutes, 4 seconds Mr. Jen, are you done with the question? 52:09 52 minutes, 9 seconds Thank you ladies and gentlemen. That was the last question for today. We have reached the end of question and answer session. I 52:18 52 minutes, 18 seconds now hand the conference over to the management for closing comments. 52:22 52 minutes, 22 seconds Thank you. I hope we have been able to answer all your questions satisfactory. 52:28 52 minutes, 28 seconds Uh should you need any further clarifications or would like to know more about our company, please feel free to contact our investor relations team. 52:37 52 minutes, 37 seconds Thank you once again for your interest and support and for taking the time out to join us on this call. Look forward to 52:44 52 minutes, 44 seconds interacting with you soon. Thank you very much. 52:49 52 minutes, 49 seconds Thank you on behalf of Farun Biologist Limited. That concludes this conference. 52:54 52 minutes, 54 seconds Thank you for joining us. You may now