Thank you, Michelle. Good morning, everyone.

On behalf of Ashika Institutional Equities, it's indeed a great pleasure to host the 4Q FY26 and full-year 26 earnings call of CCL Products Limited. Joining us today to discuss the earnings for the fourth quarter and full-year ended 31st March 2026 are Mr.

Challa Srishant, Managing Director; Mr. Praveen Jaipuriar, Chief Executive Officer; Mr.

B. Mohan Krishna, Executive Director; Mr.

Chaithanya Agasthyaraju?] , Chief Financial Officer; and Ms.

Sridevi Dasari, Company Secretary and Compliance Officer. We thank the management for giving us the opportunity to host this call.

I would now like to hand over the call to Praveen sir for his opening remarks, post which we'll open the floor for Q&A. Thank you.

Over to you, Praveen sir. Yeah.

Thank you, Dipak. Thank you team Ashika Institutional Equities for hosting this call.

Good morning, everyone. I welcome you all to the fourth conference call of FY 25-26.

Now let me give a brief overview of the company's performance for the fourth quarter and the year gone by. The group has achieved a turnover of 1226.39 crores for the fourth quarter, which is as compared to 839.65 crores for the corresponding quarter of the previous year, achieving a growth of 46%.

The EBITDA stands at ₹193.76 crores as against ₹167.1 crores, which is a growth of 16%, while the profit before tax is ₹123.1 crores growing at 16%, and the net profit stands at 114.53 crores with a growth of 12%. As far as the full year is concerned, the group has achieved a turnover of 4465.80 crores as compared to ₹3114.2 crores for the corresponding previous year, achieving a growth of 43%.

The EBITDA stands at ₹741.38 crores as against 563.54 crores, which is a growth of 32%, while the profit before tax is ₹460.74 crores growing at 31%, and the net profit stands at 388.11 crores with a growth of 25%. The domestic business has achieved a gross turnover of 650 crores approximately, out of which the brand sales were roundabouts of 440 crores.

Now Continental as a brand is well established as the number-three player in the country, and in some regions and platforms we are also the number-two player. We will look to further strengthen this position in the coming months and years.

As far as green coffee prices are concerned, they remain to be stable as of now, which is a good sign. The Brazilian crop is round the corner, and with the positive news of good supplies, we have a belief that the prices would further soften in the coming months.

The Middle East crisis does pose a challenge with a bit of supply disruptions and energy price increase, but we have managed the situation well and do not see much of disruption going forward. I will just ask Chaithanya, our CFO, to give a little bit of a color on the balance sheet performance, post which we will open the floor for questions.

Thank you.

Good morning, everyone. Adding to what is highlighted by CEO, we're closing the financial year on a very strong note with revenue and profit both growing significantly for the quarter and for the full financial year.

A key area of focus for us this year has been strengthening of the balance sheet. We've always been delivering very good operational results with a CAGR of close to 20%.

What we have done this year is to ensure that the operational results get translated into a real balance sheet strength. The balance sheet right now is much leaner, cleaner, and a lot healthier with healthy cash flows and debt coming down significantly.

The net debt as of 31st March is around 1,073 crores, a reduction of more than 750 crores from last year. Debt to equity is at 0.5 compared to 0.92 an year ago.

Net debt to EBITDA is at 1.45 right now compared to 3.1 an year ago. With that, I hand over to Dipak for questions.

Yes, hi sir. Thank you for the opportunity.

Just wanted to check what would be our volume growth for the quarter? Also, has the EBITDA per kg, which is a key metric we track, has it come down to a level of about 130, which is a bit down sequentially from maybe the 140 that we saw in the previous quarter?

What is driving the strong realizations on the top line for us to have clocked this kind of a growth? Thanks.

Hi Abhishek. Just to clarify, the first thing that you asked was on this thing?

If you could On the volume growth, sir.

Yeah. Our volume growth has been, and I'm speaking on a little larger four quarter perspective, has been in the range of 18-20% this year.

The quarter was also very similar. Volume growth stands at that level.

EBITDA per kilo again, probably this quarter was a little bit of a down considering the proportion of coffee that you sell because if you would have seen last quarter, much higher, high-margin coffees were sold. On an annual basis, in fact, the EBITDA per kilos has improved from previous year.

That's an improvement. As we have been guiding most of the times, some of these key metrics is on a quarter level may not give the right picture.

While one sees a sequential drop a bit, but I don't think so there's much to read into that. On an annual basis, in fact, the per kilo EBITDA has improved.

Great, sir. Just a follow-up second question, sir.

We have earlier given the guidance for 10% to 20% volume growth and maybe a 15% to 20% EBITDA growth. Anything changing for FY27?

How is our guidance looking now?

The guidance is very similar. Probably, we are giving a guidance of both volume at around 15% and even EBITDA at around 15%.

That will be the thing. While things have stabilized, quite a few things have stabilized since the last year, but keeping the other volatility in mind, we are sticking to the volume growth guidance of 15%, and the resultant EBITDA growth will also be in the same region.

Great, sir. Finally, the guidance on the India business and also any capacity expansion thoughts that you have right now?

That's it for me.

While there have been discussions, we are looking at things related to capacity. As far as next 2 years are concerned, we are generally good for our growth aspirations, our capacities are good.

There could be certain areas where we would like to kind of see if the growths are more. For example, we have seen better utilization for freeze-dried, if that is happening at a much faster rate the utilization, we could look at not necessarily a capacity expansion, but maybe a strategic tie-up or things like that.

These are things we will be able to comment on when we come closer to a decision or date. Obviously, there are discussions that keep happening on a regular basis.

Largely on a long-term basis for the next 2 years, we are good as far as capacities concerned. As far as domestic business is concerned, as I told in the narrative, that out of the 650 crores that we did in the India business, 440 crores odd were the retail business, the branded business.

We'll continue to drive similar growths in the coming years also. We are seeing very good traction in a lot of areas, and it is important at this stage that we keep driving those growth tractions, so that will automatically come through.

We will keep up the momentum on the branded business as well.

Great, sir. Thanks, and all the best.

Hello. Can you hear me?

We can hear you.

Hi. I just wanted your outlook on the D2C business happening firstly.

Secondly, the margin contraction, can that entirely be attributed to the coffee prices and, in general, also what's your outlook on coffee prices in the coming quarters?

I'll answer your second question first and then come to the first one. The second question, there actually is no margin contraction.

The margin contraction that you see is basically because we are seeing as EBITDA as a percentage to top line, and therefore it is only optical in nature. As we have always maintained that our business works on per kilo EBITDA where there is no contraction.

Because coffee prices increase and we who are modeling as a cost-plus model, and therefore what it seems that the top line kind of, in times of rising coffee prices the growth looks more inflated. Let's say if we take the 46% growth top line, it is a combination of 18-20% volume growth and another 20-25% of coffee prices increases that gets built into the top line.

Therefore, EBITDA as a percentage top line looks contracted, but it is not. Because the opposite will happen, probably going forward when in the base you have higher green coffee prices and going forward the green coffee prices could soften, and therefore you may see in spite of 15% volume growth, you may see lower value growth.

What we always say that how the basic metrics is to be looked upon is the volume growth, the EBITDA growth, and are they growing in line with each other or not. That's the guidance also we are giving for the future, that in line with the volume growth of 15% round about that number, we also look to drive EBITDA also in the same region.

That's the answer to your second question. Therefore, what it means is that volatility in coffee prices does not affect our margins, because the moment we do contract, we do back-to-back buying of green coffee, which means that we are guarded against any fluctuations if at all it happens in the coffee prices.

That's the answer to your second question. The first question, as far as D2C is concerned, we are doing extremely well on D2C.

In most of the platforms, we are very strong with double-digit market shares, and in a few of the platforms we are also the number-two player in the category. We are doing extremely good.

Approximately, 25% 20 to 25% of our sales come from the online channel, which is very good marker for the business that we are doing.

Got it, sir. Another question was just the capex plan, but I think that's been answered already.

Thank you.

Thank you.

Hi. Thank you for the opportunity.

Couple of questions. Firstly, on inventory days.

I was just looking, because of the softening of coffee prices, the inventory days for us are at historical low. Do you see any further improvement in inventory days for the next 2 years assuming that the coffee prices stay at these levels or even move down further from here?

Secondly, I think because we don't have any major capex for the next 2 years, our operating cash flow is actually going to be very strong. What is the management thinking about going forward for utilizing these funds, whether it will be increasing dividend payouts or any acquisitions or any other thing?

Two things. First was about the inventory cycle.

Of course, yes, you're right, lowering of coffee prices and better visibility has helped us tighten the inventory cycles. It's just not the inventory cycles, there are hosts of other efficiencies that we have been able to bring in in most of our operations.

That's an ongoing process. Do we think that as a guidance we would like to lower it from the place that it is?

I don't think so we are giving in guidance to of lowering of inventory cycles from here on. We would love to kind of maintain it, better it, of course, we'll try do our best.

As a guidance, I would not like to kind of give a guidance of lowering it further from here because we will take it as things come along. That's on this thing.

Of course, yes, you have pointed it right, we will have cash flows coming in. Now as far as how do we utilize it, there is no commitment as of now, but things that you spoke about, most of the things we are thinking about.

We are thinking, yes, if there's an opportunity in the areas of any good acquisition that comes our way, would definitely love to evaluate those. We'll make sure that we are using these flows to maximize the returns for the stakeholders in whatever way we can.

Understood. Sir, and just whether it will also be used for reduction in debt from here on,

It is actually Yes, yes, yes, yes. Of course, matlab, it won't come to zero, but definitely there is a certain reduction that has already happened and significant reduction.

In fact, we were not if last year if you would have heard us, our guidance was at around 1400-1500 crores, but we have reduced it to 1080 I think possibly round about that number. Maybe there could be a certain more reduction, but again all will depend on because even our growth numbers are there, we are at 15% volume growth is what we are we are thinking, which means that you require 15% more working capital to fund this growth.

How much of this gets offsetted by lower coffee prices and all that. We will we will take things as as it comes along, but definitely the idea would be to and, the long-term debts will anyways get get paid, there will be reduction in the long-term debt.

Working capital will take it up as things come along, but definitely all the efficiency measures are being put in place to improve the ratios and the parameters as much as possible. Maybe, yeah, CFO is saying that probably with a 15% growth, probably 1100-1200 is the level that we probably could be seeing in the next year.

Understood. Understood.

Just lastly on capex again. Currently what is our capacity utilization on a consol basis globally?

You said that we'll be good for next 2 years, but for a new plant, would it be greenfield or brownfield, and what time will it take for a new capex to come on board once we start executing it?

First and foremost, our annual utilization would be around 65% or so, couple of percentage here or there. Last quarter was a little better at maybe 70%.

That's why I said we are good for another 2 years. It does take 1.5 to 2 years to materialize a capex.

The thing is that whether it will be greenfield, brownfield, we go into a strategic tie-up, it will all depend on how things shape up. There could be a scenario that we don't put our own capex, but we end up doing some sort of a capacity strategic tie-up, or we end up buying capacity, underwriting capacity of somebody else, or we may ourselves think that we want to put a brownfield, that also is on the cards.

All of this, it is a little too premature to talk to. We'll definitely keep you posted if there is any development on this front, because a lot could change as we go along, depends on what kind of product the utilization is better.

At an aggregate level, we are good for 2 years. It could happen that maybe on a typical type of product, we could be seeing better utilization than 2 years.

It'll all depend how things go from here. On a broad basis, yes, we're good for 2 years.

What do we put next, we're all evaluating and watching the situation very closely, how growths are panning on, which areas, which geographies, and accordingly we'll take a decision going forward.

Understood. Understood.

I was only asking from that point of view because we are hearing that Indian players are gaining significant market share globally, plus our peers are also talking about strong volume growth. I was just trying to understand that whether for our volume growth what we're guiding, if we achieve materially higher than that, we should not be caught in the wrong foot in terms of not having enough capacity, that's Absolutely, yeah.

Yeah. That is an assurance we are giving that we will not let capacity come in way of growth.

We will make sure that we do kind of get the capacity required to fulfill our ambitions.

Understood. Thank you so much.

Thank you so much, and congratulations team for great numbers. Just one question.

I missed out on the number of capex for FY27, if that was discussed. If you can repeat that number?

Kashyap, there's no capex for '27. We didn't say there would be any capex.

As we have been maintaining, next 2 years there will be some maintenance capex of maybe 25 to 30, 35 crores, but these are very small capexes. There's no planned big capex planned as of now for the next 2 years, yeah.

Just trying to sort of reconcile this number, I think what Chaithanya mentioned was that our debt next year closing could be roughly about 1100 crores. Now, if let's say our sales grow by about 15%, that's additional about 700 crores of sales.

At about 120 days, that would need just about 200 crores worth of cash. You add about 50 crores which will come from the maintenance capex.

That should still leave a significant number in terms of free cash to repay the debt. Does that mean that we would retain cash on the book?

Is that assumption correct?

Not really. Chaithanya is a little bit conservative considering the volatility that has been there in the market.

We would like to kind of on the right side than on the wrong side. Definitely, as per your calculation, there will be cash in the book.

As we said

that

there are multiple ways to figure out things. Right now, while we are doing a lot of evaluation, not wanting to commit on any one aspect or the other,

but

given a chance, obviously, we would like to retire debt rather than keep it on the books for long periods of time. That goes without saying, yeah.

We don't know, yeah.

Understood. If coffee prices remain where they are, ceteris paribus, the calculation is in the right direction.

Like you said, if there is any plus minus in either of this assumptions, then obviously what

Fair, could be. Yes.

Yeah. you are saying could be Understood.

Thank you. Thank you so much.

Congratulations again for a great set of numbers.

Yes. Thank you.

Thank you, Kashyap.

Yes.

Hi. I would like to bring attention to a little bit about the business side of things.

As we have seen the coffee market in India shift from spray-dried coffee to freeze-dried coffee and even to roasted blends. What do you believe would be your plan to shift that demand in the company as well?

Since we're also talking about D2C demand that has grown to 20% this year. What is your plan then brand visibility as we again mentioned that freeze-dried coffee and roasted blends are buying is focused on brand visibility like [indiscernible] and everything.

Those brands have majorly acquired that share by creating the taste of coffee and focused towards premiumization.

Okay. There was a little bit of disturbance in your voice, but what I heard you, I'll try and answer that.

Probably, a couple of answers lie in your question as well. The first thing, is there a shift

Yeah. What I was telling is that it happens in any category that there will be premiumization.

There is not a shift from spray-dried to freeze-dried. There is a large chunk of consumers who are still drinking spray-dried and will continue to drink spray-dried.

Yes, as it happens in any category, there is always a premiumization that happens. People are always upgrading to better coffee.

That leads to some of these shifts where consumers are adopting freeze-dried coffee, and that's the reason we are pretty well equipped to cater to that demand. This, in fact, we had predicted a couple of years ago, and that's how we initiated capacity enhancement in freeze-dried as well.

That is always there. As far as the shift towards beans is concerned, if you see, largely the consumption of beans is for out-of-home consumption, and in growing markets the out-of-home consumption is growing, and therefore the usage of beans is growing at a much faster pace.

We largely are not into beans because that is something that we very localized, there is not much of value addition. We don't see that market as a very big market for us.

Yes, in the Indian context, we do supply to a lot of cafes and a lot of cafe chains, the beans, the roasted beans as well. That is also something that we are seeing as growth drivers, at least in the local Indian market.

As far as your brand building activities question is concerned, yes, we are building the brand. We have developed certain strengths in certain categories and in some areas.

We are taking things forward. It's not necessary that all the categories we will be driving the growth.

What we think that where we get the maximum impact are the categories that we are building. Like we started in South of India, we are strengthening our brand presence a lot there.

Now we have started building traction in rest of South also. We're getting good returns from markets like North and West where our next growth momentum will come from.

All of that is part of our strategic initiatives going forward. There will be certain categories where we will not knowingly participate, because we want to deploy the resources at the places where we think we'll get the maximum impact.

I don't know whether I have answered all your questions because there was some disturbance from your side, but this is our thought process.

Thank you, sir. I had one quick question.

Your debt in the balance sheet has come off very significantly by about 700-odd crores. We do not see a corresponding reduction in the interest, the finance cost.

Can you shed some light on that?

Vivek, last year we had a lot of interest capitalized, because our Vietnam facility was not up and running last year, right? The interest was getting capitalized.

If you take that interest, there is a significant reduction in the interest as well.

Okay. What would that number have been?

Secondly, what was your cost of borrowing as we speak today?

I may not be in a position to give you an exact number that has got capitalized. That should be somewhere around 25 to 30 crores could be probably last year what got capitalized.

The cost of borrowing right now hovers between 7.2 to 7 to 7.5 depending on where the borrowing happens.

Okay. Got it.

Right. That's all from my side.

Thank you.

Thank you.

Thank you for the opportunity. Am I audible?

Bhavya. You're audible.

Yeah. Congratulations sir on a good set of numbers.

I think last few years have been very good. Just a couple of questions.

First question is, I think you've guided 15% EBITDA growth and volume growth for the next full year. Is this with respect to contracts still being short-term or because it's such a specialized business, are the customers giving a long-term guidance?

Can you throw some light on that?

Yeah. A lot is changing now.

There's some noise that I can hear, I don't know where it's coming from. Yeah.

Things are changing. As the coffee prices are stable, we are seeing a lot of long-term contracts.

In fact, some of our freeze-dried capacities quite long term now. That is giving a very long-term picture.

There is a movement towards long-term contract, and therefore we can be fairly assured of the guidance that we are giving.

Okay. Understood.

Just with respect to the guidance, again, I think this year we ended up at 30% growth in EBITDA and the next year we are guiding 15%. Is that considering some conservatism and keeping in mind coffee prices and other probably issues that might happen?

Or is there some change because we were guiding 20% and then we obviously revised it upwards to 25% in this year? Just want to understand.

Right.

There are a couple of things that went our way this year, and probably once it gets into the base, there may not be further improvement there. For example, this year our proportion of freeze-dried was much higher, right?

That proportion may not get even higher next year, therefore that benefit we may not get. There are certain efficiencies that we had spoken about that may get built over a period of time, and some of them got preponed a little bit because we were able to fasten some of these efficiencies.

That got built into the base as well. Some of the small packs where we were able to fasten the proportions there.

Some of these things are already there in the base and therefore may not come as an additional thing going forward. Therefore, and we have always guided that our EBITDA growth will be in line of volume growth.

Since we have guided a volume growth of 15% and we already have built the efficiencies into the bases and proportions into the bases, I don't see this adding on to anything that we have already built, and therefore we are giving a guidance that EBITDA also will grow in line with the volume growth, which is around 15%.

Got it, sir. Just a last question, if I may squeeze in.

On the branded business, what kind of growth do you think we'll be able to garner in the next few years or at least the next year?

Again branded business also this year we got very, very handsome growth, which was on the back of volume as well as value. Volume was around 25-30% and then we added another 15-20% of value growth.

This year, probably because post GST and post coffee prices softening, I don't see that advantage of value coming in. We are still committed to driving 25% kind of a volume growth, which means that the value growth also will be in the same lines.

We are looking to drive that sort of a growth going forward as well.

Got it, sir. Thank you so much for that, and thank you.

Sir, thank you for the opportunity. My question is related to utilization at FDC capacity at Vietnam and the capacity enhancement that you have done at India.

What is the annual utilization? What is the run rate currently?

I'll give you a broad picture, we don't kind of get into too much of details on capacity utilization. It works against us sometimes.

At a broad level annually, we have with everything put together, new, old, everything put together, we are at approximately 65% capacity utilization. I cannot kind of go into details of Vietnam, India.

Freeze-dried was a little higher utilization. As I told earlier also, the proportion of freeze-dried was better.

Freeze-dried was higher than the average utilization, but average utilization remained at 65%. Last quarter was a little better at around 70%.

That's where it is.

Okay. Sir, this year normally you guide for that our volumes and EBITDA grow in tandem, but this year our EBITDA growth absolute was more than well about 30%, while volume growth was what it was, 18% to 20%.

Right.

I understand that there is a mix of FDC and small packs coming in here. Going forward, is there also a possibility that our EBITDA per kg could moderate given the product mix and the fact that when coffee prices soften, a lot of non-premium customers or traders also come in to get that volume?

Would that be a fair assumption?

I think you have asked a very precise question. Yes, there could be a possibility where it could soften.

As I have always maintained, last time also we were saying that we will try and kind of negate the pluses and minuses and keep it at the levels that they are in, right? Although, technically you're bang on when you say that there could be a situation where my proportion of SDC could increase.

As you rightly said, if the coffee prices are down, a lot of low-margin customers also come in to the picture. That could lead.

As I've told that we are continuously trying to build efficiencies, small packs, trying to go to end customers. All that will also help us, and we are very confident that we'll be able to, if at all there is any negative impact, negate through some of these actions.

Hopefully we will try and maintain the EBITDA per kilo going forward.

Sure. Sir, also from a 2 to 3-year perspective, what kind of guidance would you give for your domestic sales and branded business specially?

Where could it be as a proportion of the total business, and will that end up becoming a better growth driver, let's say, 3 to 5 years from now as well?

Again there are two aspects to it. One is that, yes, we are growing the business aggressively.

What percentage to the total business will it become, I think that's not the right way to look at it, because the other part of the business also we are growing it aggressively, yeah? That metric becomes irrelevant.

What is relevant that are we growing the B2C business much faster than the category? Are we gaining shares from our lead competitors or not?

Are we making this business sizeable enough for it to kind of give it back to the business? We are well on line to this.

Not only in India, we're now looking to expand our B2C business in some of the other geographies as well. Hopefully, we will keep building on this vertical as fast as possible.

Now going forward, let's say, now the India business has become quite sizable at 400-odd crores. It is no longer a very small business, it is quite sizable when you look at from an absolute term basis.

Now we're looking to kind of every 3 years, we would love to kind of double this and say that, okay, where do we go from there? In the previous calls we were also saying that we are also trying to see if there are some other categories we can kind of grow our business into.

A lot of our growth momentum will be dependent on how some of these things shape up. That's the intent that I would like to tell you that we are driving things very aggressively not only in India, but trying to see if we can scale up outside India as well.

In India, can we get into some other categories as well. All of them is being worked upon.

Yes, as a proportion, we'll try and keep increasing the proportion as much as possible.

Yeah. Also we'll keep investing back in the business as we grow at least for the next 3 to 4 years, right?

Absolutely. Our intent is that we don't want to milk this business as of now.

We'll keep investing back into the business going forward.

Okay. Sir, my last question is if you could just guide us on the tax rate for 2 to 3 years Ms.

Richa, I'm

Hi. Thank you for this opportunity and congratulations on good set of numbers.

I would just like to follow up on the last questioner's question that what are we looking forward for that in next 2 to 3 years considering we have capacity set up in Vietnam? That's my first question.

Secondly, on the B2C side, we have international brands as well, what sort of initiatives are we taking in on that account as well? Those are the two questions from my side.

Regarding the first question, the average tax rate at a consolidated level is a combination of different multiple things. In the sense that we have entities which are at full tax, then we have SEZ which operates at 50% tax, then we have 115BAA entity, then again we have an entity which is completely not taxable.

When we take an average tax rate at a consolidated level, you may have a bit of deviation year-on-year. Having said that, the average tax rate should be somewhere closer to 17%.

Okay. On

the international On the international, yeah, you are talking about the international brand. Yes, Percol now this year in UK alone is approximately anything between 25 to 30 crores.

There's a bit of India business as well. We are looking to penetrate not only in the UK market with Percol, but we are now actively looking to take this brand in some of the other geographies as well.

We're talking to a lot of our partners across countries that how could we take this brand in some of the other countries now seeing this getting established in the UK market.

Understood. Just one last question on the cost of goods sold side.

Is it fair to assume this spike in this quarter on year-on-year, this was largely due to the cost-plus model nature of the business and there is no inventory loss or anything? Is that correct way to look at it?

Absolutely. It's not really about anything else, because we work on cost-plus.

The cost of goods sold higher could be dependent on the type of contract one is doing. This quarter the proportion of lower margin contracts were higher.

The cost of good proportion is a little higher this quarter.

Understood. That's all from my side.

Congratulations again for the numbers and best of luck. Thank you.

Thank you. Thank you.

hi. Congratulations on great set of number.

My question is on the B2C side. It's very heartening to know that on the quick commerce side, say, we are doing 100 crore kind of a number for full year.

What I wanted to understand, since there will be many markets where we would be mature in terms of compared to other micro markets that we have gone, what broad understanding currently we have that, say, we are giving 30-35% discount and after considering commissions and all at MRP. Now, are there levers to grow that particular number or improve our take rate on some of the mature markets and which can eventually impact our overall revenue and profitability?

Definitely. Dipak, it's actually directly linked to the equity that you are building.

Brands with higher equity will command better pricing, lesser discounts, right? Also, discount is a this thing of how the competition is this thing.

What has happened is that because of the aggressive growths that we have been seeing, there's also a very heightened level of competitive activities. We have to keep maintaining pace so that we don't lose grounds that we have gained now.

Having said so, on a thumb rule basis, as the markets mature, as the brands get stronger in terms of its equity, your margin profiles keep improving because then you are able to command a better pricing, right? Your discounts could be lesser and things like that.

That pattern will continue. More and more strength that we get, the more and more pricing power also we will get.

Got it, sir. Sir, what's the feedback on the Malgudi brand that we launched for snacks in our vision to create multiple pillars in the consumer business?

What's the response?

Absolutely. The response is quite good there.

We had done, as I told you, very small, 100-store, 150-stores kind of a pilot. There was a lot of response on various aspects.

People have liked the product. There are certain variants where we are doing some product tweaking as well because there was a certain feedback.

Hopefully, in a month's or couple of months' time, you should be seeing a more broader launch at least with some of the product categories. Yes, we are going to scale that up pretty soon.

Got it, sir. Sir, last two questions very quickly.

We have 60% 65% capacity utilization, say, and probably we are at the 50,000 kind of a number. I know you guided for 15% kind of a volume growth, but let's assume if at all we get an opportunity 20% then and next year next 2 years 20% kind of an opportunity, that would be still under 72,000 ton kind of a volume as aggregate.

Overall level, even if this kind of opportunity arises, that would not be constrained to our capacity utilization, right? We'll be able to deliver that kind of a growth.

Absolutely. Absolutely, Dipak.

We'll be able to deliver that kind of growth. We have that capacity.

As I have told earlier also, we are always on our toes. We're making sure that any growth opportunity is not lost because of any capacity, even if it means that we are to do some strategic tie-ups, buy capacity from outside.

You have seen 4-5 years 4 years ago when we were at 100% utilization, we did take that step to buy capacity from outside and not let the growth rates come down. That goes without saying we'll not let the growth momentum suffer at all.

Got it. Last question, sir, on the interest cost side to CFO sir.

We have seen 130 crore interest against FY26. Now given our debt is gross level 1280-90 crore, right?

At least on interest cost side against 130 crore, probably 110 crore 100 around that number would be easily we can pull off and we can save 18-20 crore around for the year?

We have a gross debt of probably around 1,000 to 1,200 levels next year as well, as indicated by CEO in one of the questions. If you take 1,200 at an average rate of 7.5%, it translates to close to 90-95 crores.

Somewhere around 100 crores would be an appropriate number is what I feel.

Got it. Very heartening to know.

Thanks, sir, and all the best for FY27. Thank you.

Yeah. Sir, congratulations on executing so well.

Sir, my question is that there is a huge difference and volatility in your subsidiary performance that you report, and this quarter, for instance, the subsidiaries made hardly any profit, which is why the consolidated and standalone there is not much of a difference in profit. This keeps fluctuating a lot.

Can you explain that? That is one.

The second thing is that it looks like there is a decisive shift in your revenue mix towards freeze-dried coffee. That also you said that as a lower-margin contract, was it some kind of a entry strategy, which is why it is normally higher profit should be expected out of these freeze-dried, but it didn't materialize, and it will reverse going forward?

First and foremost, I think looking at subsidiaries and trying to add up at the consolidated level is not the right way, because the business is sort of centralized wherein the production planning will have this thing to say that where does what gets produced, which customers gets serviced from which this thing. The business development teams at subsidiary levels could be doing a higher-margin business in some quarter, lower-margin business in some other quarter.

All of these play a role, and therefore the consolidated level is a better picture to see. I won't read much into subsidiary performance, and therefore you see sometimes the volatility in subsidiary performance.

The second part is the freeze-dried thing that you have asked. Yes, there was a higher proportion of freeze-dried.

This also depends on how the markets are shaping up. There are times when the demand for freeze-dried goes up, and actually 2-3 years ago, if you look at long-term patterns, when the coffee prices are high, you will see that there is a little bit of a down trading.

When the coffee prices starts to soften, the up trading happens. All these factors play a role in deciding what would be the proportion.

We keep tracking some of these trends that are evolving, and accordingly, not only do our business, but also build our capacities. That's how we kind of play on this.

A lot of this is not driven by us, but it is dependent on the market forces.

Understood. Typically, is it correct to assume that the profit of freeze-dried is generally going to be higher?

Yeah. Profit of freeze-dried is always higher than spray-dried.

Okay. Okay.

It's a more premium product, yeah.

There was some contract issue in this particular quarter.

Not contract issue, it's more of a phasing issue. There are quarters because it is all dependent on when which customer at what point of time wants their goods and all that.

Quarterly there could be variations in these proportions. Some quarters you will see higher proportions of spray-dried, some quarters lower proportion.

Quarter wise these variations come, and therefore we always maintain that it is best to see us on a slightly long-term perspective, because quarters could give you a little varied picture.

Last question, if I can.

Thank you for the opportunity. Am I audible?

Yeah.

Hi sir. Sir, my first question is with respect to our export.

Could you please highlight out of our total exports, how much would be FOB based?

Most of it. Almost if I take exports, 70% of our sales would be FOB based, right?

Okay. In the CIF-based contracts, are we facing any backlash from our customer to pass on the increased, let's say, insurance or freight costs since this Middle East crisis has started, and we do export to US and Europe as well?

Any contract negotiation in terms of rate or are we able to fully pass on the logistics cost increase to them?

No, if you have done the contract earlier on earlier terms and condition, you will have to take on that, right? Any increase or any this thing in cost in CIF contracts is not a backlash, it is actually a stress on us.

In fact we go back to them asking for increases, but it may not happen all the time. Not all the costs can get passed through, specially in CIF contracts, yeah.

Okay. Sir, any disruption are we seeing, let's say, either in terms of any fuel availability or, let's say, shipping routes towards this Western exports or means how are we managing it?

Or is it as of now there is no such disruption that we have observed?

A little bit of a supply disruptions to the clients that we were servicing in the Middle East for some time, but we haven't seen any route disruption because it was only the Strait of Hormuz which was closed, which is mostly for oil, not for goods and all. Yes, there has been certain increases in the logistics cost, there has been certain increases in the energy cost, so that is there.

Availability wise, we haven't seen any challenge, but there are challenges in terms of cost pressures on certain accounts.

Okay. Helpful, sir.

All the best.

Hi. Thanks for the opportunity.

When you're guiding for a volume growth of 15% next year, then what is the blended utilization level that you target to achieve in FY27?

When you're saying blended utilization, you're saying utilization of the capacity? Correct.

Yes.

We probably from here 15% on the basis that you can do a back calculation. We are looking at a 7 to 10,000 additional tons of sales that would happen.

Like you said 65%, right, for FY26?

Yeah, 65 will go to around 72-73. Matlab, if I were to be very specific.

Okay. Then that becomes to what level in FY28, which is when you'll look for a capacity

Yeah, then another 7-8, so that will become around 80, 82, 85 maybe.

Understood. Thank you.

That was my one question.

Hi, thanks for the opportunity and congratulations on a good set of numbers. Sir, most of the questions have been answered.

Just one follow-up on your branded D2C business. It has been scaling really well.

Last quarter you mentioned about an EBITDA positive it has turned. Going forward, what is your expectation?

Can we expect the EBITDA to increase or would you like to still maintain it and pull back the money to grow the business further?

We'll keep maintaining the same percentage levels, which means that a large portion of it will be pulled back. As I was mentioning that we are looking at new regions, new categories.

We'll try to kind of develop that also. It will be in an investment mode in the next 3-4 years.

Got it. Sir, broadly can you also quantify what was the proportion of small packs in our overall business?

Largely, it is around 20% or so it used to be. I'm talking about broad this thing because on a very small quarterly basis, it becomes difficult to assess.

Largely, it is in that zone. If you remember 2-3 quarters or let's say last year we were talking about a number around 15% or so.

It has increased and that has also helped us improve our profitability. Going forward, last time we had spoken that we are trying to see if we could go up the value chain as much as possible for a lot of more of our clients.

That endeavor will continue, and we'll try and see if we can improve upon this going forward.

Fair enough, sir. Just last one, if I can squeeze in.

The new markets that you want to enter for your branded business, by when can we expect that, and what kind of scale should we think about those businesses?

This one is a little tough to answer. Just to give you a little color that what are we trying, of course, there is one market which is the US market which we are actively evaluating that what are the ways and means to enter that market.

Vietnam is one more market which we are evaluating that because we have our setup there, it makes a lot of sense to see if we can build something there. Now what is the scale that we want to build, that's a little tough to answer, but if I were to say UK Percol, let's say if it's already a 30 crore or 25-30 crore kind of a revenue, we probably are looking to kind of get to a 100 crore within maybe 2 years or 3 years or so.

That's the kind of scaling up we will try and do there. As far as the other markets like US and Vietnam, it's a little premature to comment on the kind of scaling, because let us seed them first and see what is the kind of traction we are getting.

I am sure there are certain markets where we'll go wrong as well, it's not that everywhere or everything that we do will be bang on. A lot will evolve and closer to our evolution and our understanding that what is going right, what is not going right, we probably will be able to give you a sense of scale.

Whatever I can, I have given you a scale that how we are looking to build up some of these markets.

Fair enough, sir. That's really helpful.

Thank you, and all the very best to you and your team, sir.

Thank you.

Hi, sir. I just wanted some color for our B2C business about how the non-South growth has been.

Secondly, while you have mentioned briefly about reinvesting profits, generally, what is the medium-term profitability trend for the business?

For the B2C business?

Yes.

Yeah. Of course, the non-South business is growing at a faster pace now.

Yes, the bases are still very, very small, but we are putting a lot more effort into these markets to make sure that we build a sizable base here as well. As we speak, our market shares have also seen positive movements in some of the key cities like Delhi, Bombay.

Probably our efforts are also bearing fruits in these markets. We are actively seeking to grow at a much higher clip in these markets than the South markets.

That is there. As far as the profitability, as I had already mentioned that we probably are at around 4-5% EBITDA levels.

We'll keep the EBITDA levels there so that all the additional profits are plowed back into building the brand and growing the business. That will be our model.

Next 2-3 years, I don't think so we will look to milk it, we'll keep the EBITDA levels at the same percentage levels.

Sure, sir. Thank you.

My last question is just given that you mentioned that we are seeing heightened cost due to freight, insurance, and given that largely we are an export business, do we expect any sort of impact on margins despite the guidance you've given?

Of course, last quarter there was a bit of an impact, a little impact that we saw. What I see, as we speak, I'm seeing much more stability, and hopefully we'll keep our fingers crossed that things only improve from here.

Since 100% of our business is on cost-plus and 70% is on FOB, a lot of our these kind of fluctuations we are insulated against. Therefore there won't be much of an impact, but I'm hoping, and we all are, that the situation improves from here.

We don't see much of an impact on the guidance that we have given.

Thank you, everyone, for joining the call. I appreciate Ashika Institutional Equities for holding this call, and we'll all meet in the next quarter.

Thank you, everyone.