Vidhi Specialty Food Ingredients Ltd — Q4 FY26

Vidhi Specialty Food Ingredients Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LCHnhFH9Gn0 Published: 1 hour ago

0:02 2 seconds Ladies and gentlemen, good day and welcome to Vidi Specialty Food Ingredients 0:08 8 seconds Q4 and FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there 0:17 17 seconds will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please 0:24 24 seconds signal an operator by pressing start then zero on a touchstone phone. Please note that this conference is being recorded. I now hand the conference over 0:32 32 seconds to Miss Vidasa from MUFG in time. Thank you and over to you ma'am. 0:39 39 seconds Thank you Natesh. On behalf of MUFG Indi Specialtity Food Ingredients Limited Q4 0:46 46 seconds and FY26 earnings conference call. From the management side we have Mr. Bipin Manik chairman and the managing 0:53 53 seconds director. Mr. Mihir Maneik, joint managing director and Mr. Mesh Manik, Chief Financial Officer. I hope 1:00 1 minute everybody had an opportunity to go through our investor deck that we have uploaded on exchange and the company's website. A short disclaimer I would like 1:08 1 minute, 8 seconds to say before we begin the call. This call will contain some of the forward-looking statements which are completely based upon our beliefs, opinions, and expectations as of today. 1:18 1 minute, 18 seconds These statements are not a guarantee of our future performance and involve unfortunat 1:25 1 minute, 25 seconds now I hand over the call to Mr. Manik over to you sir. 1:30 1 minute, 30 seconds Thank you. Good afternoon everyone. It's my pleasure to welcome all our extent shareholders energies and partners to 1:39 1 minute, 39 seconds investor call of speciality food ingredients limited for the financial year ended 202526. 1:47 1 minute, 47 seconds The year gone by has been marked by significant global economics uncertainty, geopolitical tensions, 1:54 1 minute, 54 seconds tearing prices and a noticeable slowdown in demand across several international markets. 2:01 2 minutes, 1 second Industry across the chemical and speciality ingredient value chain have have witnessed pricing presses, posious 2:10 2 minutes, 10 seconds inventory management by customers and slower consumption trend in key export geographies. 2:18 2 minutes, 18 seconds Despite these challenging conditions, VIT has delivered an exceptional performance demonstrating the resilience 2:26 2 minutes, 26 seconds of our business model, the strength of our customer relationships, and the agility of our management team. 2:34 2 minutes, 34 seconds Our continued focus on operational excellence, discipline cost management, product mix optimization 2:42 2 minutes, 42 seconds and value added offerings has enabled us to maintain healthy margins and deliver sustainable growth even during a difficult market environment. 2:53 2 minutes, 53 seconds Over the last year, we have also accelerated our strategic transformation journey. 3:01 3 minutes, 1 second We continue to strengthen our position as a trusted global supplier of colors while simultaneously expanding our 3:09 3 minutes, 9 seconds presence into higher value added and applicationdriven segments. 3:16 3 minutes, 16 seconds One of the most exciting development for the company is the strong progress being made in our quote icon range of tablet coding systems. 3:26 3 minutes, 26 seconds The product range is currently is an aggressive sample and customer qualification stage with 3:34 3 minutes, 34 seconds several multi-armaceutical companies both in India and international markets. 3:40 3 minutes, 40 seconds The response received so far has been extremely encouraging and validates our long-term strategy of forward 3:48 3 minutes, 48 seconds integration into specialized application based solutions. 3:52 3 minutes, 52 seconds In addition, our R&D and innovation pipeline remains robust with multiple exciting product ranges currently under development and in pilot plant stages. 4:05 4 minutes, 5 seconds These initiatives are aligned with our vision of building and diversified specialty ingredients platform catering 4:13 4 minutes, 13 seconds to food, pharmaceutical, cosmetics and allied industries. 4:19 4 minutes, 19 seconds We believe these investments will create meaningful long-term growth opportunities and strengthen VI's 4:26 4 minutes, 26 seconds positioning as a comprehensive solution provider. 4:32 4 minutes, 32 seconds Our commitment towards innovation, sustainability, quality and customer centricity continues to remain at the core of everything that we do. 4:43 4 minutes, 43 seconds We are making strategic investments in technology, infrastructure, product development and human capital to ensure 4:51 4 minutes, 51 seconds that Viz remains future ready and well positioned to capitalize on emerging opportunities globally. 5:00 5 minutes Looking ahead, while the external environment may continue to remain uncertain in the near term, 5:07 5 minutes, 7 seconds we are optimistic about the future with a strong balance sheet, expanding product portfolio, improving application 5:15 5 minutes, 15 seconds capabilities and growing customer engagement across the new business verticals. 5:21 5 minutes, 21 seconds We believe the company is entering into an exciting new phase of growth and transformation. 5:29 5 minutes, 29 seconds Before I conclude, I would like to express my heartful gratitude to our employees for their dedication and hard 5:36 5 minutes, 36 seconds work, our customers for their continued trust, and our shareholders for their unwavering support and belief in VI's long-term vision. 5:46 5 minutes, 46 seconds With that, I now hand over to our CFO, Mr. Mites Manek, who will take you through the detailed operational and financial performance for the year. 5:58 5 minutes, 58 seconds Thank you once again for joining us today and for being a valued part of the growth story. Thank you. 6:08 6 minutes, 8 seconds Good afternoon everybody. 6:11 6 minutes, 11 seconds I am pleased to present the financial performance of Ridi Specialty Food Ingredients Limited for the financial 6:18 6 minutes, 18 seconds year ended 31st March 2026 and to share an overview of the company's operational and financial progress during the year. 6:28 6 minutes, 28 seconds Financial year 202526 was a year characterized by significant external challenges including tariff 6:37 6 minutes, 37 seconds pressure, geopolitical uncertainties, inflationary trends and volatile freight markets and a slowdown in the global 6:44 6 minutes, 44 seconds demand across several end user industries. And despite these headwinds, the company delivered a resilient and commendable performance through 6:53 6 minutes, 53 seconds disciplined educa execution, improved operational efficiencies and continued focus on value added business segments. 7:02 7 minutes, 2 seconds During the year in question, the company reported a revenue of 380 crores as against 382.30 crores in the financial year 2425. 7:15 7 minutes, 15 seconds While demand conditions remained relatively subdued in certain international markets for the first half 7:21 7 minutes, 21 seconds of the years, our focus on product mix optimization, customer diversification and operational discipline 7:30 7 minutes, 30 seconds enabled us to maintain strong profit profitability and healthy cash flows. The AITA for 7:37 7 minutes, 37 seconds year 202526 stood at rupees 78 crores compared to rups 68 crores in the previous financial 7:45 7 minutes, 45 seconds year. Accordingly, the AITA margins improved from 17.91 to 20.52% 7:54 7 minutes, 54 seconds supported by better realizations, increased contribution from specialtity and high margin products, improved 8:02 8 minutes, 2 seconds manufacturing efficiencies and tighter cost management initiatives across operations. 8:10 8 minutes, 10 seconds Profit before tax increased to rupees 65.97 crores as again 60.16 crores in 8:18 8 minutes, 18 seconds financial year 2425 while the net profit stood at 49.15 8:25 8 minutes, 25 seconds crores reflecting a yearon-year growth of 20.80%. 8:32 8 minutes, 32 seconds The net profit margins improved during the year, demonstrating the company's ability to protect profitability even in a challenging business environment. 8:43 8 minutes, 43 seconds On the balance sheet front, the company continues to remain financially robust with strong liquidity position and conservative leverage profile. 8:53 8 minutes, 53 seconds Our debt to equity ratio remained very low at 0.28% 28% highlighting prudent fiscal management and disciplined capital allocation. 9:06 9 minutes, 6 seconds The return ratios also continued to strengthen. Return on capital employed improved from to I'm sorry improved to 9:14 9 minutes, 14 seconds 20.90% from 20.17% in the previous year while 9:20 9 minutes, 20 seconds return on equity increased to 14.94% as against 14.92% in the previous year 9:28 9 minutes, 28 seconds reflecting efficient utilization of capital and sustainable profitability. 9:34 9 minutes, 34 seconds Overall, the performance of financial year 2526 reflects the resilience of Vid's business model, the strength of 9:42 9 minutes, 42 seconds our operational foundation and our ability to navigate difficult market conditions while continuing to invest in 9:50 9 minutes, 50 seconds the future. I would also like to take you all through a few other ratios which we have for you. The data's turnover 9:58 9 minutes, 58 seconds ratio improved from 2.91% in 2425 to 2.66% in 2526. 10:08 10 minutes, 8 seconds The inventory turnover ratio also improved from 4.99% to 4.70% in the year 2526. 10:19 10 minutes, 19 seconds current ratio that is the working capital ratio improved from 2.92% to 3.91%. 10:28 10 minutes, 28 seconds Accordingly, the interest coverage ratio of the company reduced from 2.87 10:35 10 minutes, 35 seconds 28.27% to 16.75% in the current year. Operating profit margins improved from 18.75 to 21.01%. 10:48 10 minutes, 48 seconds Profit after tax improved from 11.66 to 12.93% and profit before tax improved points 10:57 10 minutes, 57 seconds from 16.10 to 17.36%. 11:06 11 minutes, 6 seconds So this overall shows that the year 202526 has been an excellent year for the company. Thank you. 11:31 11 minutes, 31 seconds Thank you very much. We will now begin the question answer session. Anyone who wishes to ask a question may press star 11:38 11 minutes, 38 seconds N1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. 11:45 11 minutes, 45 seconds Participants are requested to use handsets for asking a question. Ladies and gentlemen, we will wait for a moment while the question assemble. 12:00 12 minutes We have first question from the line of Gokul Maheshwari from Aria Capital. Please go ahead. 12:09 12 minutes, 9 seconds Yeah, thank you for the opportunity. uh so while I you know it's fairly clear that FI26 was a fairly challenging year 12:17 12 minutes, 17 seconds on account of tariffs and also some geopolitical events um given part of the 12:24 12 minutes, 24 seconds tariff ratios settled how do you see the outlook for FI27 in terms of volumes and sales? 12:37 12 minutes, 37 seconds Any other questions you have for us or is this the only one? Okay. Okay. Then I'll just give all my questions. So one is second is on on your EIDA margins. So 12:47 12 minutes, 47 seconds over the last few years we have sort of given up on uh trading sales and the business model has moved towards manufacturing 12:56 12 minutes, 56 seconds uh uh sales where there was an expectation that the margins will improve um substantially but in the last 13:04 13 minutes, 4 seconds 3 four years the margins have been fairly rangebound. While there is some positive bias but it has not gone up as per that expectations especially also on a focus on higher realization projects. 13:16 13 minutes, 16 seconds So uh uh can you just give an outlook on the margins also uh that where do you see them settle down in the next one to 13:24 13 minutes, 24 seconds two years? Um third is on uh your comment on the fact that you've 13:30 13 minutes, 30 seconds cut the dividend and we as uh investors we um completely support the management 13:37 13 minutes, 37 seconds with respect to cutting dividend and investing the business cash flows back into the business for new projects. So 13:45 13 minutes, 45 seconds both these projects on pharma coating as well as uh uh the cosmetic the pigment range if you could just indicate what 13:54 13 minutes, 54 seconds kind of uh capex which you are expected to do for each of these products uh projects timelines 14:02 14 minutes, 2 seconds u when is this expected to come on stream uh and how do you see the scale up for these three and lastly was just a 14:11 14 minutes, 11 seconds clarification our capacity used to be 8,100 tons which was split into row 3900 14:18 14 minutes, 18 seconds and 4200 in the PPT you mentioned 7,500 is there a reclassification of the 14:24 14 minutes, 24 seconds capacity these were my four questions uh I look forward to your answers thank you 14:33 14 minutes, 33 seconds uh thank you so much I will take the opportunity to answer all your questions one by one with regards to the total 14:40 14 minutes, 40 seconds installed capacity uh the number is relevant to the kind of product mix that the company under chooses and undertakes 14:48 14 minutes, 48 seconds to manufacture. So you know depending on how we continue to improve and change 14:55 14 minutes, 55 seconds our product portfolio what we are manufacturing the capacity of the company would uh you know tend to differ a little bit here and there. 15:05 15 minutes, 5 seconds Now with regards to the uh you know to the outlook which you have asked for 2627 the the demand of the company 15:13 15 minutes, 13 seconds remains uh highly robust as far as uh you know 2627 is concerned and we expect 15:20 15 minutes, 20 seconds full utilization of both our dage and roa facilities in this financial year. 15:27 15 minutes, 27 seconds With regards to the EITA margins, I would like to point out uh you know that uh 15:35 15 minutes, 35 seconds out of the total revenue from operation which we have indicated that is 382 crores versus 380 crores in FY2526. 15:46 15 minutes, 46 seconds The manufacturing sales has been 330 crores from which most of this AITA 15:52 15 minutes, 52 seconds margin has evolved. So if you see the actual AITA margin on manufactured sales it would be close to 24 25%. 16:03 16 minutes, 3 seconds Which was what the target of the company was as far as synthetic food colors and a certain other value added products which we are now increasing the sales 16:12 16 minutes, 12 seconds from time to time. And as these value added products and certain specialized products used in certain industries 16:19 16 minutes, 19 seconds continue to you know in you know increase in quantity the AITA margins of the company are expected to rise even 16:27 16 minutes, 27 seconds further from the same manufacturing facilities. 16:33 16 minutes, 33 seconds Now with regards to the capex which is to be done on uh you know our pharma product line which is the port icon 16:42 16 minutes, 42 seconds which we have recently introduced and the other products which we wish to now introduce. I will give you the breakup 16:50 16 minutes, 50 seconds of what is you know the expected outflow 17:02 17 minutes, 2 seconds on the pharma on the on on on the quote icon range uh you know on the scale up of the manufacturing of that particular 17:09 17 minutes, 9 seconds product line our uh outflow is expected to be between 5 to 12 crores and with regards to our Other new 17:18 17 minutes, 18 seconds products which we wish to introduce the capeex outflow is expected to be between 75 to 85 crores in the first place. 17:31 17 minutes, 31 seconds This is going to be spent in FY27 only. 17:35 17 minutes, 35 seconds Um most of it yes most of which will be spent in FY27 17:43 17 minutes, 43 seconds and the commissioning would happen in the next in this current fiscal itself. No 18 months. 17:51 17 minutes, 51 seconds The commissioning happen would require 18 months. Yes. 17:56 17 minutes, 56 seconds Okay. So this should be in the uh middle of calendar year 27. 18:03 18 minutes, 3 seconds uh calendar year 27 financial year 2728. Yeah. 18:09 18 minutes, 9 seconds Middle of financial year 2728. 18:14 18 minutes, 14 seconds Okay. Great. Thank you uh for this. I'll come back in the queue for more questions. 18:20 18 minutes, 20 seconds Thank you. Thank you. Thank you. We have next question from the line of Deep Siti from Pana Finance. Please go ahead. 18:37 18 minutes, 37 seconds U Mr. Deep your line is unmuted. Please ask your question. 18:46 18 minutes, 46 seconds There is no response. Hello. Hello. Am I audible? Yes sir, you audible. 18:53 18 minutes, 53 seconds Yeah. uh just wanted to understand uh how how is the margin uh expectations uh uh in the coming future and if you can 19:03 19 minutes, 3 seconds even give the guidance for the roe will the roe be uh in the same 15% uh band or 19:09 19 minutes, 9 seconds are we expecting a better roe I think this question has been answered 19:15 19 minutes, 15 seconds in detail given by our CFO in the last question where he laid out in detail as 19:22 19 minutes, 22 seconds to how what have been the IITA margins so far from the manufacturing side of the business and what what will happen with them as we go ahead. So I think 19:31 19 minutes, 31 seconds that that fully covers your question if you that's okay. So I'll I've been listening I'll 19:39 19 minutes, 39 seconds yeah my second question was regarding uh when is the commercial production of both the capacities going to happen and 19:46 19 minutes, 46 seconds uh with that if you can give the uh if you can give the guidance for that also. You just answered all of this, my dear. 19:52 19 minutes, 52 seconds It seems you've not been listening to the call. 19:54 19 minutes, 54 seconds No, no. Point is I've joined in late, that's why. 20:00 20 minutes No problem. I'll uh go through the call details. Thank you. 20:09 20 minutes, 9 seconds We have next question from the line of Pushar Jam from Millie Capital. Please go ahead. 20:16 20 minutes, 16 seconds Yeah. Hi sir, congratulations on good set of numbers. Uh my question is regarding working capital. 20:22 20 minutes, 22 seconds So I was seeing that there has been a uh you know increment in working capital requirement in the last uh 6 months. So 20:30 20 minutes, 30 seconds can you give some reason uh why it is attributed 20:38 20 minutes, 38 seconds like I explained uh while I was going through the ratio analysis the data's turnover period has slightly 20:46 20 minutes, 46 seconds reduced from 2.91 to 2.6. 66% and the inventory turnover ratio is also reduced from 4.99 to 4.70. 20:55 20 minutes, 55 seconds Uh so there hasn't been any incremental working capital which has been introduced. 21:02 21 minutes, 2 seconds Just you might have seen the difference on the interest cost of the company which is due to the subvention on uh you 21:10 21 minutes, 10 seconds know export finance which has been withdrawn from by the Indian government as of uh December 2025. 21:21 21 minutes, 21 seconds Oh, so the impact of that would be the finance cost of the company has increased slightly due to the uh you 21:29 21 minutes, 29 seconds know withdrawal of subvention scheme on uh export finance. However, the interest coverage ratio has come down from 28.27 to 16.75. 21:42 21 minutes, 42 seconds Okay. Thanks a lot sir. My pleasure. Thank you. 21:48 21 minutes, 48 seconds Reminder to all the participants that you must press star to ask a question. 21:53 21 minutes, 53 seconds Reminder to all the participants that you must star to ask a question. The next question from the line of Ankit 22:00 22 minutes Kurkarnney from Kameha Wealth Management Private Limited. Please go ahead. 22:07 22 minutes, 7 seconds Hi uh thanks for the opportunity. Uh my first question is uh regarding the higher margin value added products. uh 22:15 22 minutes, 15 seconds around X1 we were at 15% 15 uh currently where are we in terms of the higher 22:23 22 minutes, 23 seconds value products and when do we intend to reach the 50% higher value products that 22:30 22 minutes, 30 seconds we had uh you know uh intended in H1 con this is my first question and my second 22:38 22 minutes, 38 seconds question is I wanted to understand better regarding the newer product lines that we are coming up with so what is like the uh you know the time that it 22:47 22 minutes, 47 seconds takes to uh get approvals. What sort of client base this is across the kind of uh the end user industries are given but 22:55 22 minutes, 55 seconds how did we actually come up with the opportunity and how do we expect to you know uh kind of materialize this in the 23:02 23 minutes, 2 seconds best way possible going forward these are just my two questions right 23:13 23 minutes, 13 seconds okay so to answer to your first question uh currently the contribution of the high margin in high value products in 23:21 23 minutes, 21 seconds our total product portfolio mix is around 5%. and increasing gradually in the coming year 2026 27 we expect it to 23:31 23 minutes, 31 seconds go to around uh you know uh in the range of 10 to 12% or it may be higher also 23:38 23 minutes, 38 seconds because uh there are a certain uh you know approvals and evaluations from customers awaited which we expect all to 23:47 23 minutes, 47 seconds be in the favor of the company because of the quality we maintain. So it might be higher also. 23:53 23 minutes, 53 seconds Now with regards to the the newer product lines which we uh one of them which we have launched and the other one 24:01 24 minutes, 1 second which we are going to launch the the the icon tablet cing system like you know we 24:08 24 minutes, 8 seconds said is in the aggressive phase of sampling and approval uh from several you know pharmaceutical companies uh in 24:17 24 minutes, 17 seconds India and across the globe and the general time cycle required by them is close to um 6 months time because uh our 24:26 24 minutes, 26 seconds products when incorporated in their final products also go through a certain stabilities tests etc which takes a bit 24:34 24 minutes, 34 seconds of time but you know the initial feedback which has come out from most of the companies is uh is very favorable 24:42 24 minutes, 42 seconds and uh we are excited about uh about the same with regards to the the other line of products which are on R&D stage. 24:53 24 minutes, 53 seconds Right now we would not like to disclose much more about them but what we can say is uh that you know the company has 25:01 25 minutes, 1 second dwelled upon you know rel related uh industries to 25:08 25 minutes, 8 seconds which we are already working with right now. So it is not uh it and and you know 25:15 25 minutes, 15 seconds we have also started sampling uh to you know to several customers and 25:22 25 minutes, 22 seconds uh it it is a line where most or some of the market is already you know within 25:29 25 minutes, 29 seconds our reach uh and through the current distribution channels which the company has world over. 25:40 25 minutes, 40 seconds Wonderful sir. Uh I just have one followup uh if I'm permitted. Uh what is the competitive scenario and margin profile for the new product? 25:56 25 minutes, 56 seconds Okay. 25:57 25 minutes, 57 seconds See, as far as you know, competition is concerned, it's relatively thin and the 26:05 26 minutes, 5 seconds margin profile is expected to be uh excellent because of that fact. Yeah. 26:15 26 minutes, 15 seconds Fair enough. Thanks a lot for the answer and all the best for the next. Thank you so much. Thank you. 26:23 26 minutes, 23 seconds The next question from the line of Zenal from AIA Capital Advisor. Please go ahead. 26:30 26 minutes, 30 seconds Uh good afternoon team. Uh am I audible? Yes sir you. 26:35 26 minutes, 35 seconds Oh great. Uh my first question is um is uh when you mentioned about the tariffs 26:42 26 minutes, 42 seconds that were there last year, how were the inventory levels during last year? Were they in a way below normal and how given 26:50 26 minutes, 50 seconds how geopolitically things are do we kind of expect our customers to increase inventory levels? So that's my first 26:57 26 minutes, 57 seconds question. Second question is on slide a you speak of a transformational journey starting for the company. Can you give a 27:06 27 minutes, 6 seconds perspective on what investments you've done in people R&D and obviously the new products which in a way you mentioned 27:15 27 minutes, 15 seconds for the next level of growth and my last question is that US sales have been roughly anywhere between 150 to 200 27:24 27 minutes, 24 seconds crores uh in that range for the last 3 to four years. How do you see that outlook in the next 12 to 24 months uh for the same? Thanks. 27:37 27 minutes, 37 seconds Okay. So I will take this question. Uh myself is here. 27:46 27 minutes, 46 seconds Hello. Yes. Yes. 27:49 27 minutes, 49 seconds Yeah. So number one uh I will start in the reverse order. So as far as your question with regards to 150 to 200 27:57 27 minutes, 57 seconds crores of annual sales to the US market is concerned. 28:02 28 minutes, 2 seconds uh look you are aware that uh since January 25 since when uh Mr. Trump has uh you know taken uh chair as the 28:11 28 minutes, 11 seconds president of USA his policies have been uh you know very volatile these tariff 28:18 28 minutes, 18 seconds issues that keep coming and going. So a lot of disturbances have been occurring because on account of this uh whole 28:26 28 minutes, 26 seconds tariff tantrum that has been uh you know taking place over the whole last uh a good period of last 12 months which 28:35 28 minutes, 35 seconds which has brought in a lot of instability. 28:38 28 minutes, 38 seconds So you know one cannot uh you know in the the fact that we were able to sustain ourselves in the US market in in 28:47 28 minutes, 47 seconds such a volatile business is you know a matter of uh uh great uh satisfaction 28:55 28 minutes, 55 seconds for us. But naturally as things settle down in the US market with regards to rent and all you will see that uh 29:04 29 minutes, 4 seconds overall the market will will definitely open up uh substantially as far as as 29:10 29 minutes, 10 seconds far as the R&D investments etc are concerned. We have outlined this in our previous calls also. I will again u you 29:19 29 minutes, 19 seconds know laid out uh for you that we have two R&D facilities in the outskirts of Mumbai. uh these these have in excess of 29:29 29 minutes, 29 seconds 60 uh dedicated chemists only working on R&D uh projects uh right from developing 29:39 29 minutes, 39 seconds uh in-house process protocols to pilot plant production and then passing it to the plant for commercialization of these 29:47 29 minutes, 47 seconds products. So they are all uh starting from BSC, MSC right up to PhD. We have 29:54 29 minutes, 54 seconds number of PhDs in our uh uh research facilities. Uh we have invested uh in excess of 4 and a half to 5 crores only 30:02 30 minutes, 2 seconds on uh the analytical equipments in these R&D facilities. So you know substantial amount of uh investments are going uh 30:11 30 minutes, 11 seconds profits are being uh poured back into R&D projects which is creating a robust uh product pipeline for uh capex 30:21 30 minutes, 21 seconds projects that can be taken up uh for the next 10 years. So we have a existing business plan on which we are working 30:29 30 minutes, 29 seconds commercializing these products which can be you know uh done every 18 24 months. 30:36 30 minutes, 36 seconds We have a new uh pipeline of products that that are being commercialized which you know leaves us with a very clear uh 30:45 30 minutes, 45 seconds u pathway of growth for a long longer you know period of time that is one 30:52 30 minutes, 52 seconds whole decade from now. So and and then this is this business plan is ever evolving also you know. So 31:01 31 minutes, 1 second this is what is being done at VI and uh I'm sorry any part of your question that I have not yet answered. 31:09 31 minutes, 9 seconds Yeah, I think thanks for the detailed answers for these two questions. I I didn't mention about the inventory levels what they were earlier in the sense were they lower dur uh during the 31:17 31 minutes, 17 seconds time of the tariffs and no this is this this is this is something that our CFO will answer better. 31:24 31 minutes, 24 seconds Oh thanks thank you Mr. 31:26 31 minutes, 26 seconds Uh see uh the point is that uh you know when the tariff scenario existed 31:33 31 minutes, 33 seconds the inventory levels had risen to some extent and uh you know in fact coming 31:41 31 minutes, 41 seconds into February 28 the slightly higher inventory levels which the company was maintaining came of great use because as 31:49 31 minutes, 49 seconds we all know that as soon as the disruptions in the Middle East you know territories started the pricing of all 31:57 31 minutes, 57 seconds the raw materials etc started moving upwards quite sharply and uh your company was very well positioned with 32:06 32 minutes, 6 seconds you know with regards to their inventory levels due to this reason you know sorry my I was referring to the 32:15 32 minutes, 15 seconds inventory levels at the customer end oh yes of course the c you know the inventory levels at the customer's end 32:23 32 minutes, 23 seconds was almost 50% sent reduced because you know because of the tariffs. 32:30 32 minutes, 30 seconds So what they were trying to do was to you know sell whatever they had from their own warehouses trying to buy some 32:37 32 minutes, 37 seconds time and you know uh see what happens with the tariff situation. So, 32:44 32 minutes, 44 seconds so when the 50% tariff was applicable in Indian products, suppose the inventory level at the customer end was on a much lower side than what they used to be. 32:54 32 minutes, 54 seconds You know, now they also also I sorry 33:03 33 minutes, 3 seconds I would also like to add a few points here. See apart apart from just discussing inventory levels 33:11 33 minutes, 11 seconds what is uh I will give you some additional information even though you may you may have not asked for it. Uh as far as the even the current scenario is 33:20 33 minutes, 20 seconds concerned of this middle eastern conflict. 33:25 33 minutes, 25 seconds What it has done is that a lot of the economies like for example even Iran itself 33:32 33 minutes, 32 seconds uh is a is a big market for colors which is which is completely out at this point of time. Sri Lank countries like 33:40 33 minutes, 40 seconds Bangladesh have also been for decades a good market which has again been disturbed since last two years. They 33:47 33 minutes, 47 seconds don't have any money to buy food or rice or diesel what they will buy color you know. So there are several such markets 33:55 33 minutes, 55 seconds wherein you know the economies are thickening right now. Philippines is a very strong market for us but right now you know if you see the condition of the 34:02 34 minutes, 2 seconds whole Philippine Philippine economy naturally there will be a slowdown in their color purchases also. So you know all these economies globally countries 34:11 34 minutes, 11 seconds which have been impacted by this crisis firstly they were impacted by they were facing slowdown because of the tariff 34:18 34 minutes, 18 seconds tantrums by Mr. Trump. And now to top it up now this whole Iran issue causing you know further strain on these economies 34:26 34 minutes, 26 seconds even even with all these you know impediments what we have been able to do is that we have been able to put up a very robust performance in terms of 34:34 34 minutes, 34 seconds sales which gives us a very good amount of confidence that as things improve geopolitically 34:42 34 minutes, 42 seconds all all these markets which are currently you know right now you can say 34:49 34 minutes, 49 seconds facing very challenging situation. Once they runs their geopolitical situation starts improving. You will see the 34:57 34 minutes, 57 seconds demand from for kalam also improving from these uh markets and and as such we 35:02 35 minutes, 2 seconds see good you know times uh we are very confident of better performance going ahead as as soon as the geopolitical starts improve. 35:14 35 minutes, 14 seconds Just one point point there nearby is that since US is a large market for us and obviously that was impacted because of tariffs. So what I'm trying to 35:22 35 minutes, 22 seconds understand is that because of that resolution there are we seeing inventory replenishment at the customer end in the US market 35:29 35 minutes, 29 seconds more than more than US US is now stabilized US is now stabilized but but more more growth will come from 35:37 35 minutes, 37 seconds the other markets which are right now severely impacted. See which is which is doing at this time only then you can be 35:45 35 minutes, 45 seconds more hopeful of improvement. You know this is this is law of nature you know even even in a bit market stocks which 35:54 35 minutes, 54 seconds are falling the most rise the fastest once the scenario turn. So same will be with these markets. You know the demands 36:01 36 minutes, 1 second from these markets will be much sharper once once the geopolitical situation starts easing out is what I'm pointing 36:10 36 minutes, 10 seconds out. So in in a way are you indicating that over the next uh 3 to 5 years US dependency will start reducing of toert 36:20 36 minutes, 20 seconds certainly yes certainly yes we see more more sales coming from em market is is 36:28 36 minutes, 28 seconds always something where where there is sales growth in percentage points. See because US is the biggest economy your 36:37 36 minutes, 37 seconds your sale even if you see the GDP of US if it grows by 2% they get excited but 36:43 36 minutes, 43 seconds even if the GDP of India goes by 6 to 7% it is not so exciting why because they are growing at a base of 38 trillion 2%. 36:53 36 minutes, 53 seconds You are growing at a base of 3.8 trillion by 67%. 36:59 36 minutes, 59 seconds absolute number terms you know it is always the US who growing much more than similar will be the case in terms of our 37:05 37 minutes, 5 seconds color sales you know in in percentage terms if you see the growth in percentage terms in the years will be 37:12 37 minutes, 12 seconds much more than the US but because of the absolute size of US numbers in US will look bigger 37:21 37 minutes, 21 seconds perfect thanks a lot thanks a lot yeah thank you we Next question from the line of Suri from Will with Capital. Please go ahead. 37:34 37 minutes, 34 seconds Yeah. Hi, thank you for the opportunity. 37:36 37 minutes, 36 seconds Sir, we uh spoke about changes in our product mix and moving more towards the value added products apart from our 37:43 37 minutes, 43 seconds normal food colors. Some of the products that you've mentioned in the PT include co- blended lakes, saltfree dyes, 37:51 37 minutes, 51 seconds chlorophyll dice. Wanted you to spend some time on these value added products. 37:56 37 minutes, 56 seconds uh how much of our business is coming from this? How does the realization and the margin require of these differ from a food color business and your outlook on the growth for these uh segments? 38:10 38 minutes, 10 seconds uh you know uh let's not get into the number specifics as far as margin profiles etc are concerned but like uh 38:19 38 minutes, 19 seconds you know I mentioned uh just a while ago the contribution of value added products 38:25 38 minutes, 25 seconds to our portfolio currently is at 5% and continuously growing as we as we make inroads into several 38:35 38 minutes, 35 seconds other markets and end user uh you know industries for these and 2026 27 we 38:43 38 minutes, 43 seconds expect the contribution to double from what it was in 2526 and of course uh you know uh they enjoy 38:53 38 minutes, 53 seconds a very very high margin profile needless to say without getting into specifics here from company average would you want to 39:01 39 minutes, 1 second uh state any ballpark difference say 2 3% above the company average anything that of that sort 39:09 39 minutes, 9 seconds All I would like to say is it is much above the company average. Yeah. 39:13 39 minutes, 13 seconds Sure sir. So my second question is on the other expenses. Uh the trajectory that we have had is around 16 17 crores per quarter. I see there's a sharp 39:22 39 minutes, 22 seconds increase in other expenses in this quarter. Wanted to understand is there a one-off there or are the expenses more related to frontloading of some of the 39:30 39 minutes, 30 seconds expenses for some of the new projects that you've highlighted. 39:34 39 minutes, 34 seconds No, it is a one of uh you know uh other uh expense partly on the R&D side and uh 39:42 39 minutes, 42 seconds a part of it is also gone towards the US FDA certification costs wherein we have we are paying $1 per kilo to US FDA and 39:52 39 minutes, 52 seconds then when we sell those products to our customers we are passing it on to them. 39:57 39 minutes, 57 seconds So this is not exactly an expense for the company. It will be passed on to the relevant customers once those products are sold from our end, you know. 40:06 40 minutes, 6 seconds But since that realization is going to come in the present year, we would have we've had to expense it out in uh March 26. Yeah. 40:17 40 minutes, 17 seconds Got it. Got it. Understood, sir. Thank you. My pleasure. 40:23 40 minutes, 23 seconds Thank you. We have next question from the line of Sai Ganesh from Square 64 Capital Advisor. Please go ahead. 40:31 40 minutes, 31 seconds Thank you sir. I'm audible. Yes sir. Are you able? 40:35 40 minutes, 35 seconds Yes, please go. Yes. Yes sir. With 44% of our export share coming from USA and the USA was planning to bank plus how 40:44 40 minutes, 44 seconds does a comp how does a company plan to tackle the situation? If this happens sir see let me let me explain you one thing. 40:53 40 minutes, 53 seconds The US was never planning to ban synthetic food colors. So that perception is completely false. 41:02 41 minutes, 2 seconds There was no no plan to ban synthetic food colors. 41:07 41 minutes, 7 seconds Uh you know and with regards to the percentage share of our uh exports into the US, the percentage is not 44%. Our 41:16 41 minutes, 16 seconds exports to the US are pegged at 19%. 41:21 41 minutes, 21 seconds And that includes uh that includes Canada also. 41:26 41 minutes, 26 seconds So the North American continent which we have highlighted consist of Mexico, Canada and USA. 41:34 41 minutes, 34 seconds Okay. Understood. You don't saw article regarding FDA bank. 41:42 41 minutes, 42 seconds No, there are there are several hundred hundreds of such articles which have come over the last last one decade but 41:49 41 minutes, 49 seconds but nothing happens. So unless until there is any investigation or directive by the US FBA which is not happening at 41:57 41 minutes, 57 seconds this moment of time there is no point in making any such speculative remarks. 42:03 42 minutes, 3 seconds Okay. And what happens is to further explain this the entire range of colors which we are exporting to the US FDA 42:11 42 minutes, 11 seconds have been approved by the US FDA itself and found fit and safe for use in human consumption. And even as of today each 42:20 42 minutes, 20 seconds and every batch is controlled by the US FDA wherein we have to send a sample to their Washington laboratory. They will 42:27 42 minutes, 27 seconds test the product and once they find it fit for human consumption only then it will be allowed for use in the US. 42:36 42 minutes, 36 seconds Okay sir understood. 42:38 42 minutes, 38 seconds What will be the realization difference between a synthetic and a natural food color like basis 42:46 42 minutes, 46 seconds that is that is some data which is not available because both the synthetic and natural color industries are very loosely regulated and covered. So you 42:55 42 minutes, 55 seconds know I mean uh they are not uh covered by any market reports or anything. So you know as far as the what margins the 43:03 43 minutes, 3 seconds natural color companies are making and there are no such listed entities in the Indian market also. So no such data is available to be captured and this 43:12 43 minutes, 12 seconds comparison is not possible at this point of time. I was asking regarding the realization 43:19 43 minutes, 19 seconds on a per basis of synthetic and because we don't know natural colors how can we tell you that what are the what 43:26 43 minutes, 26 seconds are the realizations on a natural color right okay okay understood sir thank you sir 43:43 43 minutes, 43 seconds uh the next question from the line Mr. 43:46 43 minutes, 46 seconds Shake from Kapoor Corporation, please go ahead. Uh, Namaskar sir, hope I'm audible. 43:53 43 minutes, 53 seconds Yes, go ahead. 43:55 43 minutes, 55 seconds Yes sir. Sir sir, I joined late so sorry for any repetitive question. Uh firstly sir with the uh with with with the 44:02 44 minutes, 2 seconds opening remark which is especially the in the in your investor presentation in your address to the shareholder you have 44:09 44 minutes, 9 seconds uh alluded to the uh to the aspect that there are going to be meaningful changes 44:15 44 minutes, 15 seconds in terms of what what our company uh was currently and how things are going to shape up. So if you could just allude to 44:24 44 minutes, 24 seconds us in terms of the margin profile and the incremental revenue that we are uh 44:31 44 minutes, 31 seconds expecting especially uh from the the two uh projects at first at Roa and the 44:37 44 minutes, 37 seconds other one uh I think so at the H uh and just give us some color by uh uh what 44:45 44 minutes, 45 seconds how is the current financial year shaping up? 44:52 44 minutes, 52 seconds See the current financial year as far as the existing product lines is shaping up well. Now as far as the new product 44:59 44 minutes, 59 seconds lines are concerned we have already informed that uh one part of it which is our quot icon tablet cing systems. 45:08 45 minutes, 8 seconds They are in a very aggressive phase of sampling world over to all the pharmaceutical companies and have a very 45:15 45 minutes, 15 seconds high uh margin profile. uh and uh once uh they are through with the stability 45:23 45 minutes, 23 seconds uh testing and approvals uh we can start um you know large scale operations on that on on on that line. And with 45:31 45 minutes, 31 seconds regards to the other product line which is currently in the R&B and the pilot uh plan stage uh without giving too much 45:41 45 minutes, 41 seconds information as of now as it is not uh you know it is not in the benefit of uh us all what I would still like to 45:50 45 minutes, 50 seconds reiterate is that again it's a very very high margin profile product line with the almost thin to negligible 45:57 45 minutes, 57 seconds competition and uh you the prospects for that line are extremely bright in the future. 46:06 46 minutes, 6 seconds No and and we can add one point here mi that uh please go ahead. We have already we have already we have already said 46:14 46 minutes, 14 seconds that uh you know uh we'll be investing around 75 to 85 crores for the uh uh 46:23 46 minutes, 23 seconds capex for this uh project which is which is going to be taking off at the age and uh uh in the first phase we will hope to 46:32 46 minutes, 32 seconds get about uh uh anywhere between 125 to 150 of sales at uh capex 46:43 46 minutes, 43 seconds Great. Thank you for now. Yeah. Thank you. Yeah. 46:48 46 minutes, 48 seconds Thank you participant. This this was the last question. I now hand hand over call to the management for closing comments. 46:57 46 minutes, 57 seconds Right. So we would like to thank everybody present for uh today's investor fall and uh you know while your 47:07 47 minutes, 7 seconds company strives uh to make uh the next year very fruitful we look 47:14 47 minutes, 14 seconds forward to everybody's support in our journey. 47:18 47 minutes, 18 seconds Thank you so much ladies and gentlemen on behalf of Vidi Specialty Food Eating Limited that 47:25 47 minutes, 25 seconds conclude this conference. Thank you for joining us and human statement.