Ladies and gentlemen, good day and welcome to Q3 and nine months FY26 conference call of Manorama Industries. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Hiral Keniya from EY.

Thank you and over to you, sir.

Thank you, Rudra. Good evening, everyone.

On behalf of Manorama Industries Limited, I welcome you all to the company's Q3 and nine months FY26 conference call. To discuss the performance of the company and to answer your questions, we have with us the management team comprising of Mr.

Ashish Saraf, Chairman and Managing Director; Mr. Deep Saraf, Deputy Chief Executive Officer, Chief Coordinator; Dr.

Krishnad Bagvan, Deputy Chief Executive Officer, Business Development, Vice President, R&D; Mr. Ashok Jain, Director and Chief Financial Officer; Mrs.

Ekta Soni, AVP Investor Relations; and Mr. Deepak Sharma, Company Secretary and Compliance Officer.

Before we proceed this call, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties, and other factors which will be beyond management's control. We kindly request to bear in mind that there might be uncertainties when interpreting such statements.

Please note that this conference is being recorded. We would now start the session with opening remarks from the management team.

Afterwards, we will open the floor for an interactive Q&A session. I would now hand over the conference call to Mr.

Ashish Saraf for his opening remarks. Thank you and over to you, sir.

Thank you, Hiral. Good evening, everyone, and a warm welcome to the Manorama Industries Limited's earnings conference call for Q3, nine months of 26.

I am accompanied today on this call by our Director and Chief Financial Officer Mr. Ashok Jain, our Deputy CEO and Vice President Mr.

Deep Saraf, our Deputy CEO and Vice President Mr. Krish Bagvan, our Chief Compliance Officer Mr.

Deepak Sharma, and our Vice President Ekta Soni, and other members of our senior management team. On the company's behalf, I want to express my gratitude to all our investors, analysts, and stakeholders for participating in today's call.

We are thankful for your ongoing trust and continued faith in our long-term vision for the company. I am extraordinarily pleased to share that we continue to sustain our growth momentum in the third quarter and for the first nine months of financial year 26.

We have reported revenues of INR 363 crores, which reflects a remarkable year-on-year growth of 73.3%. This strong performance can be attributed to several key factors, including an enhanced mix of value-added products, the optimized utilization of our newly upgraded fractionation facility, and our commitment to operational excellence.

Additionally, we have experienced steady demand from our key customers in the chocolate, confectionery, and cosmetic industrial sectors worldwide. In light of these positive developments, we are excited to announce that we have upwardly revised our financial year 26 revenue guidance from INR 1,150 crores to INR 1,300 crores.

This revision underscores our confidence in our growth trajectory and the strength of our business model. Our backward integrated model, high-tech R&D, research and development, and with cutting-edge technology and deep sourcing network, and the confidence of our hundreds of customers create a defensible competitive moat for Manorama.

As many of we operate in a structurally undersupplied and high-growth exotic niche specialty fats and butters market. To address the increasing demand for specialty fats and butters, we have plans to boost our existing capacity by 30%.

This expansion will increase our capacity to 52,000 metric tonnes of fractionation per annum through debottlenecking the existing plants, which we expect to complete by financial year F4. Furthermore, I'm pleased to report that we have acquired 19.40 acres of new land adjacent to our existing facility, and simultaneously, we have successfully commissioned a new packing plant with the new laboratory building and other infrastructure, all funded through our internal accruals.

This strategic investment will enhance our operational capabilities and support our growth initiatives. Looking ahead, to facilitate that next phase of growth, we are strategically planning to enhance the company's capacities in both India and West Africa.

We are committing a capital expenditure of INR 460 crores over the next 2-3 years for the below projects: forward integration through setting up of manufacturing facility for cocoa butter alternatives with 75 metric 75,000 metric tonnes per annum capacity; setting up a new fractionation manufacturing facility for shea, palm, mango, and other exotic seeds with 25,000 metric tonnes per annum capacity, including E-SOS; setting up of new refinery manufacturing facility with 90,000 metric tonnes per annum capacity; backward integration through processing factory in Burkina Faso, West Africa with 90,000 metric tonnes per annum capacity. These investments will enable us to expand our production capabilities and meet the growing demand of our markets.

At Manorama Industries, we leverage our integrated value chain to ensure margin stability and foster long-term customer loyalty. Our backward integration from procurement to research and development to supercritical fractionation provides us with unparalleled control over quality, cost, supply stability, and the confidence of our worldwide customers.

This strategic approach positions us as a trusted partner for our customers in the chocolate, confectionery, and cosmetic industries who highly value us, regard us, and honour us. With prudently planned capex, we aim to strengthen our leadership in specialty fats and butters with pricing power, robust growth visibility, and high structural advantages, all well positioned to deliver sustainable growth for our esteemed stakeholders.

With that, I now hand over the call to our Chief Financial Officer and Director Mr. Ashok Jain to take you through the financial and operational highlights for the quarter and the first half of the year.

Thank you.

Thank you, Ashish sir, and good evening, everyone. Let me through the financial performance for the third quarter and nine months ended December 31st, 2025.

For nine months financial year 25-26, Manorama Industries reported revenue of INR 975 crore, delivering strong 81.3% year-on-year growth. EBITDA for the period stood at INR 265 crore rupees with margin of 27.2%, while profit after tax was INR 174 crore rupees, translating into a margin of 17.8%.

This improvement in profitability reflects our commitment to optimizing our product mix, enhancing capacity utilization, and implementing disciplined cost control measures. For the quarter third FY26, revenue stood at rupees 363 crore, while EBITDA came at INR 98 crore with a margin of 27.1%.

Profit after tax for the quarter was INR 68 crore, reflecting a margin of 18.8%. These results highlight our ability to maintain strong operational performance despite ongoing capacity expansion and seasonal fluctuation in the business.

With robust business fundamentals, expanding customer relationships, and continuous operational improvements, we are very confident in our ability to sustain our growth momentum and achieve our revenue guidance for the financial year 25-26. That concludes my remarks.

We would now too happy to take your questions.

Thank you very much. We will now begin the question and answer session.

Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two.

Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question is from the line of Jeevan P from Sahasrar Capital. Please go ahead.

Congratulations, sir. Congratulations to entire Manorama team for wonderful set of numbers.

I just want to understand one thing about the capex. We have announced 460 crore capex.

I have seen the capacity 75,000 tonnes for CBA and 75,000 tonnes capacity for fractionation. Just wanted to understand if you can just explain how is it, current capacity is 40,000 tonne, which is going to increase by 52,000 tonnes by end of this March.

This fractionation capacity will be enhanced by further 75,000 tonnes or how is it?

Yes, sir. The question is with related to the capex.

The capex plan what we have announced, it's related to the fractionation capacity, which is more related to our product which is called E-SOS and our other exotic seeds in the line. That particular capacity of fractionation will be used for making E-SOS product and also the HPMF which we going to use and blend it with our existing stearin component and going forward E-SOS component to make a better and value-enhanced product.

That particular fractionation capacity of 75,000 tonnes is with respect to the project of E-SOS which we have announced for 75,000 tonnes. Those both capacities are related to each other.

Okay. What is E-SOS?

Sir,

E-SOS is a process where we are going to convert our soft fractions like olein and other soft oils into a hard fraction, which is called E-SOS, enzymatic stearin oleic stearic, that will be further used as a different application in the food sectors, and will be further blended with HPMF, which is called hard palm mid fraction, and it will become a CBE component thereafter, which has a wider application and usage in the food industry. That enhanced capacity will be of around 75,000 metric tonne.

Overall, we are going to increase our CBE output capacity with this E-SOS and SF3 fractionation.

Understood. The pricing will be similar to CBE pricing for this?

Yes, the pricing are somewhere similar to the cocoa butter and the existing fats and butters prices of our product, existing model.

Okay.

Only the raw material will be different. The raw material will be the soft fractions, like the existing olein we manufacture, and some other commodities oil that we can use in the process of making E-SOS.

Got it. Perfect.

Thanks a lot.

Thank you, sir.

Thank you. Our next question is from the line of Shrenik Mehta from Indo Alps Wealth.

Please go ahead.

Hi. Just some very quick questions.

I see that you have a much higher growth in the cost of goods sold, which is raw material, versus the growth in sales. That is leading to a significant shrinkage of the gross margins, almost 8% down versus the previous quarter.

Is this some one-time kind of a cost? Are you seeing some increase in the raw material cost?

What's really happening here?

Sir, with respect to the GP margin, we have always been shared that remains in the range of 45% to 50% owing to the freight cost and there are some other byproduct realization. It happens to be in the range of 45% to 50%.

You can consider that range in the model in your assumptions and calculations.

Okay. This quarter it is down to 44.3% and the last quarter it was 52.8%.

Range bound [unclear].

It is a range bound because there are a lot of situations with respect to freight cost and our byproduct realization. It doesn't impact our EBITDA margin or PAT margin that way, but the gross margins are in the range bound of 45% to 50%.

Okay. This doesn't trigger any changes in the price?

This is just a normal raw material fluctuation in the cost?

Right, yes, sir.

Okay. You have a major plan right now for an increase in the capacities.

This capacity increase would possibly take care of the revolutionary growth that you're getting for next at least two more years, or how do you see this planning? Sir,

this capital expenditure, whatever the plan we have for this capex, it happens to happen in a phased manner. All our investments are going to be deployed over next 2-3 years.

Yeah. What growth we are targeting is for the next 4-5 years because our existing capacities will give you the growth for the next one odd years, and this capacity will give you a growth for next 2-3 years.

Overall, we have a plan and visibility with this capex for the next 4-5 years of growth.

Excellent. Okay.

Most of this funding for the capex is through internal accruals, I assume? Yeah.

We are primarily relying on our internal cash accruals, which are very strong and sufficient enough to support our planned projects over the next 2-3 years. We already have begun deploying these funds.

We already have spent 52-odd crores towards this capex plan, and we intend to continue doing so. Any external kind of financing could be considered selectively if necessary.

We intend to do all through our internal accruals.

[unclear] Okay. Thank you for excellent performance from Manorama Industries.

Thank you, the whole team.

Thank you so much, sir.

Thank you. Our next question is from the line of Kumar Saumya from Ambit Capital.

Please go ahead.

Hi, sir. Good afternoon.

Sir, I have a couple of questions. Firstly, on the revenue growth side, we are seeing 80 81% growth on the nine month year-on-year.

If you could help break out in terms of

Sorry to interrupt, sir, but your audio is not clear.

Is it audible now?

Can you use a handset?

I'm using the handset. Hello?

It's not clear. We are not able to hear you.

Okay. I'll come back in the queue.

All right. Our next question is from the line of Rohan Mehta from Veecome Family Office.

Please go ahead.

Hi, am I audible?

Yes, you are.

Great. Thank you so much for the opportunity, and congratulations on a great set of numbers.

Firstly, I wanted to clarify in your press release, the forward integration project that you have mentioned for cocoa butter alternatives, this is essentially the fractionation capacity we're talking about. Is it so?

Yeah.

If you see the projects, there are four projects which we have mentioned. Out of four projects, one is which is related to Burkina Faso project, which is going to come in Africa, that is a backward integration project.

The rest of the three projects, which is related to solvent fractionation capacity of 75,000 tonnes, and also the E-SOS CBE capacity of 75,000 tonnes, and refinery of 90,000 tonnes, are in a similar line of production, which is related to a forward integration plan of the company.

Okay. In terms of the pricing for cocoa butter alternatives compared to stearin and CBE, how does that compare?

Is this margin-dilutive? Can you give some thoughts on that?

The products which we are going to come, of course they are not going to be a margin-dilutive thing because we are looking for the same sustainable margins level what we have currently in our business. Even we are looking for a better levels, but the margins are going to be maintained with the new projects coming with those products also.

Okay. Purely just isolating for the fractionation capacity of 75,000 tonnes, what would be roughly a broad range of cost that you're looking at right now and the asset turns that you're looking to generate from this?

If I want to bifurcate out of our capex plan of 450 crores, approximately 300 to 330 crores would be attributed to this forward integration projects, which we targeting an asset turnover of more than five with our investments.

Okay. My final question is on the working capital needs.

Incrementally, after taking into account even the backward integration projects, what sort of working capital needs will you require going forward?

Sorry, can you repeat the question?

Yes. My question is on working capital requirement.

After conducting the backward integration projects and once the forward integration project of cocoa butter alternatives, that comes online, how much incremental working capital requirement do you foresee?

For those projects which we are coming up, the working capitals would be around one or the two months of the cycle for forward integration, because those raw materials are very different which is not related to current raw material of the products. Those raw materials could be the captive consumption of our olein, and maybe some other soft oil which we can have imported from some other sources.

Those working capital cycle will be much much lesser compared to our existing business model, which is around 5-6 months. That will be around 1-3 months of working capital which will be required for that business, that project.

1-2 months?

Yeah, 1-2 months. Two months.

Got it. Thank you so much.

Thank you.

Thank you. Our next question is from the line of Sanjay Manyal from DAM Capital.

Please go ahead.

Hello, sir. Congratulations on a good set of numbers.

My two questions, one is 73% kind of a revenue growth. What would be the volume growth over here, and what would be the pricing growth?

That's my first question.

You are talking 73% for Y-o-Y basis, right?

Yeah, 73% Y-o-Y basis, yes.

In the nine months, the growth would be around 65-odd percent should be approximately from the volume growth, and the rest could be the inflation adding growth with respect to the pricing product. We have utilized our capacity which we have commenced last year of 25,000 tonnes.

That attributes mainly to our growth in this number.

Also give me at what price we are doing incremental volumes, at what price we are locking our cocoa butter equivalent for the future contracts?

That is one product, sir, which is there in the portfolio and we are locking in the same prices what we have been locking in the past.

Okay. One last on the employee expense front.

I think during the quarter, it seems the employee expense has been down by 23%. What could be the reason for that?

23%?

23%?

That seems what I could see. Earlier

it was the ESOP provision. We have granted the ESOP to the employees, and now it is not required to make a provision for the ESOP.

Okay. Fine.

That's all from it. Thanks.

Thank you. Our next question is from the line of Koushik Mohan from Ashika Group.

Please go ahead.

Congrats on the good set of numbers, sir. I just wanted to understand for 460 crores of capacity that we are putting up, right, in that, how much currently from this year balance sheet that we can do an internal accrual?

We already have invested around 50-odd crores towards capex, buying the lands and upgrading packing and other supporting infrastructure. We plan to invest approximately 70-80 crores in this financial year towards capex.

In the next financial year, we are planning to spend around 100-150 crores rupees towards our capex plan of the project. Okay.

With this capex, ma'am, in the previous question you told us we can do five times on asset turns. Can we assume safely 2,000 crores on the top line can be added with this capex over next three years?

Yes, sir. In terms of the asset turn, we expect it to be more than 5x.

The calculation comes exactly what you have said right now.

Okay. Currently, what is our capacity utilization for 40,000 metric tonnes that we have?

It is around 85% capacity utilization for our plant.

Combined.

Combined. Okay.

One year more growth is left out in sense. Are we also considering the recent 12,500 metric tonnes addition, that is 52,000 metric tonnes 52,000 for next year's growth?

We are already increasing our throughput approximately by 30% through debottlenecking, so that will cater to the growth for the next odd years and the next two years, you can say. We have good room for the growth for the next two years.

With the capex coming in, we see a very good growth overall for the next 4-5 years.

Okay. Ma'am, a lot of people in the industry will be saying that cocoa prices are going down from the last two years and all.

How are we differentiating ourselves from the cocoa prices? Can you just explain that because our margins are maintained, our numbers are maintained, and we are on the growth phase and we are doing fantastic numbers.

Can you just give that bifurcation that why are we not related to cocoa prices?

Sir, our performance should answer that, as you have rightly said that we are doing good performance despite cocoa butter prices volatility. I can explain you the technicality and how our product is not related to cocoa butter per se, the cycling, moving, and everything.

These fats and butters are developed through specialized fat blending and fractionation. It has a advanced formulation and R&D expertise which is there to make functional fats based on our customer applications.

Hence, our prices are not directly related to any commodity cycles. We are a manufacturer of cocoa butter equivalents, which is a more technology and formulation driven business, not a commodity business.

Hence, we are more application-oriented rather than a commodity-linked business. Our customer relations are more application-specific and technical.

Once we have developed the product with our clients for their formulation, we happens to be there for a longer term. Overnight changes in any of the commodity cycle will not hamper our demand or pricing model for our business because our raw material base is very different than cocoa butter raw material base.

Cocoa butter will continue. That will be volatile because that is a commodity and our raw material prices are sustained because we are not a commodity business.

We are manufacturing a very niche technical product for our customers.

Great, ma'am. What is the average volume prices that we are selling now?

Is it around the range of 550 or something around? Is my right?

It is in the same range what we have been selling to our customers. We are doing cost plus margin basis business model, our raw product prices are similar.

[unclear] Until

Thank you. Our next question is from the line of Ninad Sarpotdar from Aditya Birla Money.

Please go ahead.

Hello, am I audible?

Yes, sir, you are. Yeah.

Congratulations on the good set of numbers. Just two, three questions.

First that did we do any volumes from the upgraded facility and any volumes from the Deel Group in these quarters?

You needed volume numbers for what?

I just wanted to understand that has the new upgraded facility of 12,000 metric tonnes and the JV with the Deel Group has any contributions to the top line in current quarter?

That upgraded 12,000 it's currently in the process. That facility, expanded capacity will be available from the Q1 onwards to the company.

Yes, we have also started our batches with Deel, and we are in the process of doing that.

During current quarter, no contribution from that as such, right?

Yes, Deel we are doing. We have started the revenue from

We have minor contributions which is there from the Deel, as we have just started our ramp-up with them. Okay.

My second question is so you have planned a lot of new capex and backward integration projects. On the margins front, you have been guiding on a very conservative basis of around 25%, but can we see these margins stabilizing or becoming the new normal or any more accretion from new product lines that you are launching, maybe the cocoa butter alternatives and the PMF backward integration and the Burkina Faso project?

See, sir, we believe that the current margin, which is around 25% to 27%, which we always share and guide in the range, happens to be on a sustainable mode. Of course, we are in the trajectory to improve over the medium term and longer term because there are multiple levers strategy.

We are coming up with projects which is related to forward and backward, that should really help in improving the margins, and we are working for that. You can take the current margins, for example, as a more sustainable level.

Of course, we are doing everything for that.

Got it. Just one last question, just needed some clarity on my understanding that the new 70,000 MTPA of CBA facility is the new product that you were talking about with a lower working capital cycle.

The 75,000 MTPA of solvent fractionation is in line with the existing 52,000, the similar technology and similar kind of output facility, right?

That 75,000 is related to the new product of CBA, which is E-SOS and the other product what we have mentioned in the project details. Both the capacities

are each other.

It's not related to the existing project.

Okay. Both are a new

Those will be the new products coming out of both assets, the new solvent fractionation capacity and the E-SOS one. Those both the projects are related to each other in terms of capacity and output.

Okay.

Just to get clarity, it's not fungible. It's a completely different line, right?

No, it is fungible, of course. We can run any exotic seed in that new solvent fractionation capacity.

That will be more used for the new 75,000 CBA capacity which we have announced.

Okay. Got it.

Yeah. Thanks, ma'am.

Thank you.

Thank you. Our next question is from the line of Rehan Saiyyed from Trinetra Asset Managers.

Please go ahead.

Good evening to team and thank you for giving me the opportunity. My first question is around I want to have understanding regarding your cocoa butter alternative facility.

A significant portion of the new capex is dedicated towards forward integration

Sorry to interrupt, sir, but you are not clear. Sorry to interrupt.

Okay. May I repeat my question again?

I request you to be a little more clear.

Okay. I want to get understanding regarding your CBA facility that you have put in now.

You have done forward integration through 75,000 metric tonnes per annum cocoa butter alternative facility. How does the margin profile and competitive landscape for CBA differ from your CBE business?

Do you intend to target the same Fortune 500 client base with this product?

Yes, sir. The clients in the market for CBA product are also same.

It is only going to be used in the food sectors. It could be in chocolate, it could be in confectionery, it could be in other HoReCa kind of a market.

The applications of both the products are similar only into the food sector, and we will have good margins in that product line also as we are doing in the current business model. Oh,

okay. My second question is around your Deel partnership in Brazil that you have done.

Your first commercial production batch at the Deel partner facility in Brazil was accomplished in Q3 FY26. Could you provide a roadmap for the expected revenue contribution from this partnership in FY27?

What are the logistical advantages of manufacturing in Brazil versus exporting from your Raipur plant?

The advantage is more related that we will have a geographical presence in that region because LatAm being the huge market and is the biggest consumption for these fats. The advantage is more for being the local presence there and cater to the all customers, not just the top five, top six customers in the world.

The idea is that to be there, and it will help in a lot of facilities and figures everything. Also the idea of getting into the projects like CBA or solvent fractionation three is to increase the output product of stearin or the hard fat which we already make.

Overall if you see the capacity or the projects which we are coming up with, it's all related to the hard fat only. We are going to have a very diversified raw material based in those projects.

We can also use our olein as a captive consumption to make the stearin and the cocoa butter equivalent. The overall idea to have that project is to make more and more production of the stearin-based fats and more cocoa butter equivalent, which has a wider application and different usage in the industry as well.

That is going to increase the output of our production capacity of stearin and CBE.

Oh, okay. Thanks a lot.

That's from my side and good luck for upcoming quarters.

Thank you. Our next question is from the line of Akhil Parekh from BNK Securities.

Please go ahead.

Thanks for the opportunity and many congratulations on a good set of numbers. My first question is just a clarity, right, on the margins front.

Gross profit per kg is the right metric or margin is the right metric to evaluate our business? I believe that in one of the questions when you replied, you said we work on a cost-plus basis model.

GP per kg would be the right number to look at, right, rather than gross margin?

EBITDA level.

EBITDA level.

EBITDA per kg?

We see the overall as a whole business EBITDA. You can take the EBITDA basis sustainable margin.

No, that I got it, but is it a per kg which is the number which we should look at because margins may fluctuate, right? I believe because we are in a processing business and because of the fluctuations in the raw material, GP margins can fluctuate and EBITDA margins can accordingly fluctuate, and hence per kg is the right metric.

That's my understanding. Please clarify if I'm wrong.

At EBITDA level, we have actually maintained our margin, so that fluctuation is not on the EBITDA part. You can take EBITDA margin percent basis.

Okay. Yeah.

Per tonne wise, how does vary on a Y-o-Y basis, EBITDA per tonne?

Because we deal with different raw materials and there are different yield and parity of individual seeds, there is no that calculation we see because we see on a blended level basis. For you to take that on assumption will not get you on the right calculation because there are different raw materials we deal with, and there are different yields and different products and different parity also for all those seeds we do.

On a blending level, you can see that particular margin on the business level.

Sure. Second question on the capex front of 460 crore, of which almost everything will be on internal accrual basis or we'll need to raise some capital?

Sir,

there are no immediate plans to look for external financing, be it debt or be it equity. We are more relying on our internal accruals because we have good cash accruals and we are going to be have one.

The options we will look when the time is going to be right, but as of now, there are no immediate plans for external funding.

Sure. Last two more questions.

One is on the other income part, right? There is a sharp jump in other income in 3Q.

Any specific reasons for that?

This was the forex gain/loss on the import side, which we have imported the shea nuts and the other butters in the last quarter, and this is a difference of what we have paid and what we have goods when reached India. There is a forex gain/loss on the import side majorly.

It's more of a inventory gains. Is that understanding correct?

You can say, but it is a part of forex. It is not to what we have paid and what we have booked for as a purchase.

There is a difference of the [procure?] .

On the forex side you say. Sorry, I lost

Yes, forex side, sir.

Got it. Lastly on the value-added product contribution, if you can give that number for the third quarter?

Value-added portion to sales is around 75%, which includes our value-added products like the stearin and the cocoa butter equivalents.

Okay, 75%.

75% to sales approximately.

Got it. That's all from my side and best wishes for coming quarters.

Thank you, sir.

Thank you. Our next question is from the line of Kumar Saumya from Ambit Capital.

Please go ahead.

Hi sir. Am I audible?

Yes, you are.

Yes. Ekta, my first question is on the capacity expansion side.

When you say ki refinery capacity for expansion of 90,000 tonnes, does it mean the existing 45,000 tonnes of refinery goes up by 90,000 tonnes?

No, that will be the additional 90,000 capacity, Kumar, beyond 55,000 capacity, we are going to add 300 metric tonne per day capacity in the refinery plant, which we will link to our new capacity expansion of 75,000 tonnes of fractionation and E-SOS.

Got it. This refinery is to feed the 75,000 expansion that you have.

Other specialty products, so that will help in that way.

Should one look at this 75, 75 separately or is it fungible? If I am looking at 52,000 fractionation today or by the end of this year, so that will add another 75,000 tonne over it or 150,000 tonnes over it?

See,

you need to understand that 75,000 of both CBE and SF3 is a one plant, means you can say.

That's

the capacity and the production of stearin of course is going to increase accordingly. It will be beyond 52,000 tonnes, we are adding 75,000 capacity.

That will only help in production of the stearin and the CBEs accordingly. The production is for the same product through different process.

We should look at as a way 75,000 additional is coming, either you can make CBA or CBE?

That is right. That is right, the way to say, output.

Yes. Yield is same?

Either we make CBA or CBE, the yield will be same?

It would be slightly better in that process.

Got it. Ekta, in your initial question, you said ki 81% growth in the nine months is driven by 65% growth in volume and 15-16% on value.

Did I get it right?

No, sir. I guess the 73% is the Y-o-Y growth, if I am not wrong.

Okay. No, I was looking from a nine-month perspective.

Nine-month is 73%.

73%.

Out of the 73%, 90% is the volume growth, rest is inflation and other [identities?] .

Okay. Got it.

Fair enough. Sir, on the working capital side, where are we currently?

Currently working capital cycle is 120 days, sir.

120 days on sales or COGS?

On sales.

Okay. This was compared to H1 levels of roughly 200 days, right?

H1 was around 150, 160 days. 120

days. Working capital days was 97.

Currently working capital cycle is 120 days. The H1 was the 90 days.

H1 was 90 days, got it. Lastly, sir, on the Mexico plant, what would be the volume that you're looking for this year?

More than 2,000 tonnes we hope that this year will be delivered approximately.

More than 2,000 tonnes from there.

Sir,

lastly on the nine-month number, what would be the CBE contribution?

CBE contribution to sales is around 30%.

30%, got it.

Together

around approximate 75% value added total approximate.

75 is value-added, CBE is 30%.

CBE and others, CBE is a 30%.

Got it. Thank you, sir.

Thank you. Thank you.

Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit the questions to two per participant. Our next question is from the line of Aashish Upganlawar from InvestQ PMS.

Please go ahead.

Thank you so much for this opportunity. Ma'am, I'm looking at a company maybe for the first time in so much detail.

Just wanted to understand from you on the working capital side, because in the last year published balance sheet, I could see that cash conversion cycle or the core working capital, which is debtors, inventory, and payables, was around 500-odd days of sales. What is the other part which you're saying has come down to 125 days on the working capital net basis now?

That is what I wanted to understand.

Sir, which year balance sheet or financial year you're referring?

This is March 25 on Screener, I could see that the core working capital is around

You are taking as on balance sheet date, but you should take as a average inventory days because we procure the raw material for 20 days for the whole year. At the end of the balance sheet, it seems high, but the average it is around 150-160 days, 190 days.

Because once we bought the inventory, it is gradually monthly reduced the inventory level. We keep around 150 days inventory, means you can take it.

Okay. On a regular basis, you're saying 150 days of inventory is there always?

[unclear]

Okay. On net basis, it comes to around 125 days, as you said, right?

Right now 120, because the inventory which is at the end of balance sheet date comes to the revenue next year.

Okay. You mentioned something that the working capital cycle would further improve because of the new product, is it?

New product that you are

Yes, yes. Captive consumption.

How is it likely to move maybe over the next couple of years?

Means you can take the 90 to 100 days working capital cycle going forward. After this new capacity, it will be reduced around 10-20 days more.

Two to three months we require the inventory approximately.

Okay. Lastly, since it's a quick call, your margins, if I look at history, it's gone from 25%, 28%, again it came down to 14%, and now it's again, over years, it's come down to again 25%, 27%.

Is there a cycle like that or because you mentioned that these margins are sustainable. What is the change that has happened on these?

Because we have come up with our new capex line in the last year 2024 July, and the utilization has come up well from the plant and that's why we can see the better margins. Also, we have improved the product mix.

We have improved the share of value-added product, and because of the operational excellences and the economic leverage, we can report a very good margin. Those margins which was related to a couple of years back, which was around 15-17%, so that was on a low utilization basis which was there and we were coming up with a new project.

The margins which we are reporting now are sustainable on that level of 25% to 27%.

Thank you so much. I'll take it in detail maybe on a one-on-one meeting maybe sometime.

Thank you so much.

Thank you, sir.

Thank you. Our next question is from the line of Jainam Doshi from CRIS PMS.

Please go ahead.

Congratulations on an excellent set of numbers. I just wanted to understand the price of cocoa has corrected by 60% in a year, and I'm aware that we are not directly related to the commodity, but if the price of cocoa has come down, is it necessary for the price of cocoa butter itself as a commodity per se to come down in the same proportion, or does the metrics work other way?

You are asking for cocoa butter or cocoa butter equivalent?

For the cocoa butter per se.

That is a commodity, that is linked to cocoa beans and it will act accordingly. We can tell you for cocoa butter equivalent.

If you could throw some light on the cocoa butter equivalents also, then that would be helpful,

yeah. Though we are maintaining our prices because it was raised, it gone to $25, $30,000 of cocoa butter price at one point during the last two years, but our prices were still sustainable because we were doing a cost-plus margin basis model.

Today also, it is the same. We are doing that particular model only for our products, and also for cocoa butter equivalent.

There is that way no impact on our pricing model whether the commodity prices are getting increasing or reducing.

Got it. Next would be the EU Deforestation rules that have been postponed till December 2026.

Does it have any impact on our sourcing of raw materials, or is it only pertaining to the cocoa?

That is only related to I guess cocoa because that regulation applies for cocoa beans, I guess. There's nothing which is there for our raw material base.

We are buying from the forest. It is not a palm product or a crop product which we are buying.

We are not cutting trees and buying our seeds. It's a forest-based products what we are buying from the deepest forest of India and West Africa.

Hence, there is no impact of that regulation in our business.

Right, got it. The current mix of value-added products, as you mentioned, is around 75%.

How do we see this mix inching up in next one or two years going ahead?

We intend to do approximately 85-90% of our sales with respect to value-added going forward. Our co-product, the soft fats, which is olein, are also going to be converted into a value-added product.

The idea and the intent approximately to do 90-95% of the business towards value-added product.

Okay. With the total capacities coming on stream in next 3-4 years, do we see clocking a revenue of around 4,500-5,000 crores based on the capex and the tonnes which we have mentioned?

The asset turn what we have said is right for the project which we have announced, forward-related integration projects, and we can see a very good growth going forward for the next five years. This capex will suffice our growth for the next five years.

You can have that calculation accordingly.

Got it. Thank you.

Thanks a lot. All the very best.

Thank you, sir.

Thank you. Our next question is from the line of Darshil Jhaveri from Crown Capital.

Please go ahead.

Hello. Good evening.

Thank you so much for taking my question. Firstly, congratulations on a great set of results.

Hopefully, I'm audible. Hello?

Hi sir. Just wanted to ask in regards to our capex.

Our capex is going to come in phased manner online. Will it come in FY28 or how will it come online

in

the first phase?

Yes, there are four projects which will be commencing in a phased manner. We intend to commence all our production capacity approximately by financial year 28.

Over the next two-odd years, three years, all the capacity will be commenced. As and when the capacity starts getting commercialized, we are going to update you on that particular capacity.

Okay.

Ma'am, in FY27, that is the next year, whatever revenue growth we can have is from the debottlenecking, right? Any kind of guidance that we can give for what FY27 can be in terms of revenue, because there'll be a 30% increase in capacity, right?

Can we assume a commensurate increase in revenue?

We of course are having the good growth, we have ample of room 30% in the new capacity, 15% still available in the existing capacity. Almost 40-45 40-50% growth is still there to be done in the next one or two years.

We are looking for again a good numbers for the coming year as well, for a good [growth?] .

Okay. Can we quantify it in a percentage range?

Tom also, that would also be okay.

You can take approximately range on and above of 30%, that should come.

We will update on [unclear].

Fair enough, ma'am. As you said, FY28, so that'll be first phase, second phase, or how would it be?

Full might be get complete by FY28-29, right? If we could have some more detail in that, how much would phase one be kind of?

Phase one manner would be, we have started doing our projects in West Africa, and we have bought land here in India, we have identified land in Burkina Faso, and we are already in the verge of ordering all the equipments and related things for all the capacities. All will go simultaneously, parallelly with each other.

We can have their capacities coming and rolling maybe in next one, one and a half year, we can have one, two capacities ready, and maybe in the next two or three years, we can have all our capacities ready.

Okay. Fair enough.

Thank you so much, and that's it from my side. All the best.

Thank you.

Thank you. Our next question is from the line of Jahnvi Shah from Share India.

Please go ahead.

Hello. By the way, congratulations on the good set of numbers.

I had a bit of technical questions on the capex that you have announced. I didn't understand as to exactly where does this solvent fractionation plant sit and same with the CBA one.

Is it helpful for the existing plant? I understand this is an entirely a new product that we're launching, and for that we need this.

Is either of these useful in the stearin plant that we already have?

It is a total new capacity. We actually have sufficient capacity for existing facility of 40-52,000 tonnes.

All this new capacities or the projects which we have announced is for the new product and production of our stearin fats and cocoa butter equivalents, specialty fats and butters. That will suffice that kind of production.

Thank you. Now, is CBA different from CBE, first?

Second, for these two plants, our raw materials are going to be different, you mentioned that. How are they different?

We are converting soft fat to hard fat, we'll use the olein that we're already producing, and maybe we'll get some more from elsewhere. At the same time,

what That is right. We are going to do a captive consumption of our olein product as well as along with our olein product, we can also have some soft fraction being imported through other sources.

The idea of that CBA is to have a diversified raw material based and the products which can be offered to all our clients because it has got the same applications and acceptability of the product in the food market, and it has also got a huge demand. That is why we have diversified our raw material based, and the working capital also will be reduced significantly in that particular business because we are going to use the captive consumption of our olein and as well as some other soft fractions from some other sources.

Okay. For this, we wouldn't need the refinery or the first two, three stages.

We just require the solvent fractionation. We'll get the olein, we'll put that in, and we'll get the hard fat out.

Yeah. We will need the CBA facility, we will need the fractionation, and we will need the refinery.

We will not be needing the expelling and the extraction facility in this.

That's why the cycle is lower.

Yes, that's why the cycle is lower. Yes.

Okay. Right now, we are at a capacity of 52,000 at the end of the year.

We are looking at a capacity for CBA at 75,000, which will come online, I think, next 2-3 years. Do we have that demand from the market?

Yes, of course, we have that demand visibility for the products because there is a huge demand-supply gap in the current industry for the products which we are manufacturing, because all these products are very niche and the applications are very formulated and solution-based based on the customer applications. Of course, we have been expanding, more than 10 times we have expanded in the past, and because of the demand only and because of the visibility only, we have been expanding.

This project we have taken keeping that in the sense. Also, that will help us diversify the raw material based and have a better product portfolio in the basket of Manorama.

Okay. Thank you so much.

Sorry, just one last question. Any of these products will have margin implications for us?

It'll improve our margins?

Of course, that is the reason we are taking all these steps towards increasing our margin trajectory.

Any guidance for the same?

You should take current as a sustainable margin, any improvement we are going to guide you further. We'll be there every quarter, we'll be communicating to you quarter-wise.

Okay. Thank you so much.

Thank you.

Thank you. Ladies and gentlemen, due to time constraint, we take that as a last question.

I would now like to hand the conference over to the management for closing comments.

I sincerely thank all the participants for joining us for the Manorama Industries Q3 and nine months financial year 26 earnings conference call. Our company is strengthening its reputation as a trustworthy and leading provider dedicated to addressing the increasing demand for sustainable cocoa butter equivalents, cocoa butter alternatives, specialty fats, stearin, and butters for the whole world.

Business is business. Business always has risks, and we are trying with a sustainable way to overcome all the challenges being thrown at us.

We strive to be the preferred supplier of specialty fats and butters for both our global and domestic customers by focusing on research and development, cutting-edge technology, and expanding our international presence and national presence, but enhancing our capacity, backed by a strong balance sheet. I thank all our stakeholders and everybody for reposing their faith on us and giving us their trust and considering us for their presence.

Thank you. Thank you very much.

Thank you. On behalf of Manorama Industries Limited, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.