Thank you very much. We will now begin the question -and-answer session. First question is from the time of Abneesh Roy from the Department of Atomic Energy. Please go ahead.

So, two, three questions. First is the foods and FMCG, this quarter volume growth of 9% and value growth of 16%. Are you happy with this? And if you could give more color on how rice has done? Because there you have done that acquisition. How has that scaled up? Because clearly this is having much more potential, but 9% growth of volume is lower than your even edible oil volume growth where you are already very strong number one.

Yes, see 9% of volume growth is an overall volume growth in food and FMCG. But when you look at the domestic business, we have seen 39% growth. In exports, we got impacted because of the non-Basmati rice, that is the white rice that we had exported Q4 last year. That was around 50,000 tons, which was practically nothing this quarter because it is banned, both broken and white rice. So, there we got impacted. Otherwise, the domestic business, where we have more concentration, we have done 39%. Going forward, this impact will not come because the impact has already been felt this year. Next year onwards, the export volumes are standardized. So, that should not be a problem. And going by your statement that food and FMCG should grow faster than oil, surely, we agree. Oil will grow at around 10%, but food and FMCG quarter-on-quarter, we have been growing at 30%. On Kohinoor, when we bought this brand, the highest that McCormick had done earlier was 38,000 tons. And we have done 50,000 tons. We have crossed that limit in the second year itself. May '22 we took over and we took 6-8 months to understand the structure and all that. And after that, '23-'24 this year, we have done more than that. So, we have crossed what McCormick did at the highest level. And going forward, you are right, Kohinoor should do better. And we are confident about the brand strength.

One or two follow up. So, one, in Q1, the white rice and broken rice exports won't be an issue?

White rice, we are not going to do because you are not supposed to do. The G2G business has now started. So, possibly some business is happening where we are supposed to buy and sell to the cooperatives, NCEL or Kribhco and they are exporting. So , we have started getting some business on that and this quarter possibly we will do some business. But that will not be counted as an export because we are not an exporter. We will only be domestic procurement and selling to the Kribhco or NCEL.

To understand correctly, even in Q1, the foods and FMCG could get some impact because of the white rice, broken rice exports, right?

No, no, no, because last year, only one quarter we might have Q1 because the ban came in August. So, April, May, June, whatever little bit of rice that we had exported , that might get impacted. To mitigate the G2G business, what we are doing, we will bring that volume, but instead of export, it will now become domestic.

Right. Now related question on Kohinoor, you mentioned you have gone beyond the earlier owner's performance from 38,000 tons to 50,000. I understand your own presence is also there in this segment. So, on a combined basis, what's happening? Is there any kind of cannibalization because your own brand is also there? So, combined market share, if you could comment where is it now and where do you see in three years?

See, combined market share has dropped by around 0.2%. It was 7.9%. It has come down to 7.7%. The major impact has come not in Kohinoor, but in fortune now that was because one or two festive seasons we had pushed a good quantity through the modern trade. That business did not happen, and hence that quantity was not available during this year, but going forw ard we have plans to enlarge our retail base . The retail base of rice today is around 65 -70,000, which we want to take to at least 1 ,25,000, and we are confident that retail base will give us lot of benefit. Second is that our Gohana unit, which is from the IPO investment we did , will be ready . Hopefully, the rice part should be ready by November as the season starts. Once that starts, we will get lot of advantage of having in -house capacity, better, more efficient milling and better cost optimization. So, all that will add value to us going forward in the next Basmati season.

My second and last question is on the hedging losses, which has plagued lot of your quarters in the last around one year. Q3 was a positive aberration, but Q4 again there is hedging losses. So, two questions here. One is, why it is again recurring because what I understand is now last six months at least the commodities have been in fairly range bound . It has been in a tight band . Given that scenario in some of your key raw material, why should there be hedging loss? Second is FY‘25, what can be different in terms of hedging loss ? Because this has been really taking down your profitability in a significant manner.

So, Abneesh while on a hedging losses, what I would like to comment is that, I don't think we should look at hedging loss only as a standalone because the second leg of the hedging loss always sits in a gain at the side of either in inventory or the sales which we have in that. So, we have to look at overall. Having said that, this quarter, we have not suffered any loss due to the commodity volatility. In fact, we do have some bit of gain sitting in the inventory and some bit of mark -to-market gain sitting in the contracts, which will get settled only when these deliveries happen in next quarter. So, those, to that extent, in fact, the gains sitting in the inventory and contacts have been carried forward to the next quarter. And therefore, this quarter looks a little bit subdued. And therefore, I always say, when you look at our numbers, qu arter may not be really right judge, because what happens is, sometime one leg of your hedging gets delivered in one quarter, the other leg gets delivered in the next quarter. And therefore, when you look at the elongated time period, maybe half or maybe a t a full year, you get a better picture of the things. And therefore, I can confirm this quarter has got no impact on hedging losses per se. I think, and whatever happened to us in terms of hedging losses , in terms of disalignment of hedges or inventory, high price inventory happened only in Q1 and Q2.

That's fine. But on a full-year basis, what is your expectation on margins, both EBITDA margin and profit margins? I am asking on both because I understand some reclassification has happened. Ultimately, on a full-year basis, you need to target that margins which were happening earlier before all this commodity, sharp inflation and then sharp deflation. Now we are in normal times. I hope so. Taking a normal scenario kind of assumption, where do you see your EBITDA and PAT margins for FY‘25, given it's a full year number?

Yes, so, Abneesh, good question. I think Q1, Q2, Q3 and Q4 has shown that we have now gone back to our original run rate on EBITDA as well as the PAT which we were delivering in FY‘22 and FY‘23. One is this. Second, the prices have been stabilized and we don't see much of volatility coming up in near future. And whenever prices are stabilized, the brand makes better money. Number three, food and FMCG proportion in the overall scheme of the things is improving. Today, it is at 17% of volume. Two years back, it was 12-13%. And next year maybe, we are hopeful that it should touch 30% of our volume. And food, as we saw in the presentation also has started giving a good EBITDA. So, I would not quote a number per se, but I can certainly confirm that we are on track to deliver the kind of EBITDA and the kind of net margins which we had shown in FY‘22 and FY‘23, which should happen in FY‘25, in line with the volume growth.

Thank you. The next question is from Aniket Kulkarni from BMSPL Capital. Please go ahead.

So, my question is specific to mustard oil production. So, can you tell me what are the current spreads and what are the demands of the factors that are currently in the spread and how do we see the spread improving from here on?

See, mustard oil production is estimated at, this year the crop is very good and the harvest is going on. We see a very good crop and the crop is estimated at 112 lakh tons. 12 million means 120 lakh tons. That is almost around 10% higher than last year. That is one. Two is that the government also has a lot of, I would say, strategy of increasing the mustard oil production because it is part of the Atmanirbhar Oilseed mission that the PMO has driven to make country self-sufficient. So, mustard oil will be a focused oil for the government and we as the largest player in mustard, we understand this how we can also increase our volumes and also the margins. Let me tell you mustard oil gives us very good and stable margin as Fortune Kachi Ghani Mustard Oil. Number one mustard oil. We have an overall 15% market share, and this market is very fragmented because there are so many brands and so many small manufacturers. So, 2%, 3%, 4%, these are the type of things you have and in that we have 15%. Margins are very good, and we have started expanding in milling capacity. This year amongst the IPO project, one 600 ton crushing per day has been commissioned. So, that is now ready for operation in this season. In Gohana, we are coming up with another 600 ton plant, which will be ready by, say, another one month or so, and at least we can do crushing there. So, 1,200 ton of crushing should give you an additional around 35% of Kachi Ghani. So, that is the type of oil that we will get, pure Kachi Ghani oil and which will add to our volume. Now mustard oil we have been growing at around 19-20% per annum and that is a very healthy growth rate. It is more than refined oil. So, consumers are looking at mustard oil and that has happened after the COVID. We are seeing that consumers have remained more loyal with unrefined oil or what you call as a cold fresh oil because Kolu is a cold-pressed oil. Looking forward, we have made good profits in mustard and we will continue to do that because of the brand strength.

So, you are saying that the production will be substantial this year. So, will it have any effect on your pricing or does it matter in terms of pricing your products? I mean, if the supply is low, do you charge higher pricing or is it maintained, and you take a hit on your numbers?

See, higher production is good. The markets remain stable and when it remains stable, the brands get a lot of strength because volatility in prices brings a lot of fluctuation in MRP. So, for us, the lower prices give us higher margins and we would always like higher production because that is better for the country as well as for the brand.

And just one last question. Is the current production which happen sufficient for the demand or is it higher or lesser or is the demand in line with the supply or how is that balanced in the market?

No, it is I think very good production going on. Earlier, three years back, it was only 80 lakh tons and from there it has gone to 120 lakh tons. A lot of area where in Rajasthan, we have seen people have shifted from, farmers have shifted from wheat to oil seed because last year they got good money in mustard oil seed. So, that is good in one way . It is encouraging, Haryana and Punjab has also started producing more mustard because it gives them a good margin.

Just had two or three question on the food and FMCG business. The first one was on the export side. So, how long more do we expect that there will be this impact? And when does the export restriction impact come into the base? Would that be from Q3 onwards?

See, first is that last year, August, the ban was there on white rice and 20% duty on Parmal rice was put in August. So, till August things were normal. So, I think for us Q3 onwards, our export of rice will show much better performance . That is one. But in spite of that , our basmati rice exports will grow this year because we have built good inventory and April to September we look forward to a good business season for basmati rice. Other than that, our branded basmati rice has increased from, say, we were doing roughly around 7,000 tons. This year we expect to do at least 15,000 tons or 20,000 tons. So, branded basmati, particularly Fortune brand and Jubilee brand, we are exporting to more than 30 countries, and there we are getting consistent growth.

And the second thing was on the branded food side . You just mentioned about rice. You did mention in the presentation that you have seen 30% plus kind of Y-o-Y growth for the past 10 quarters. Just wanted to get your sense about what that number is branded as a percentage of the overall food and FMCG business today? And how do you see that kind of moving forward ? I know you don't kind of track it that way, but just a sense of where that number, what the number is?

In food and FMCG, more than 80% is branded. It is packed. Now, when I say packed, it can be 25 kilo bags also, Fortune bags which goes to our hotels, which also goes to our out-of-home consumption plus in-home consumption. So, these are all packed and branded. So, more than 80%.

And the last thing was on the profitability. So, if you look at profitability of the food and FMCG segment, you have seen it continuously improve compared to last year to this year also. EBIT margin trends are moving up. I understand you had mentioned in the past that it's also a function of scale. It's a function of premiumization that you are going to slowly and steadily drive new innovations, etc. But I just wanted to get your sense about what is that trajectory? Is there a two, three-year trajectory in mind in terms of where we are looking to see this scale up from an EBIT or EBITDA margin perspective for the food and FMCG business?

See, on food business, of course, as we demonstrated that it is growing not only in the volume, but also in the terms of margins. For us, we do have a plan that it should start delivering a very respectable EBITDA margins, which can be compared to the competition . And therefore, we have said this earlier also, that food has got a more prospects of delivering better gross margin and EBITDA margins as compared to the edible oil. Edible oil margins can be ranged between 3.5% to 4%, but food can give double than this, and therefore we are moving on this trajectory . And I think we have no reasons to believe that in next two years of time, by the time when we will cross the volume of more than 1.5 million tons in food, we should have that pricing power in hand, which can give us a better margin than the edible oil.

Thank you. Next question is from Karan Bhuwania from ICICI Securities. Please go ahead.

Firstly, I just wanted to ask your outlook on the edible oil segment now that prices have stabilized, what kind of volume growth that you are expecting next year or more in terms of the medium term? And I think last quarter you had mentioned that there was some inventory buildup in terms of imports of edible oil which could have some impact on you as well . If you could provide some update on that as well.

On the prices front, surely the edible oil prices are much more stable and it has come off till February, we were seeing continuously coming down but then after February we saw little uptrend, but still nevertheless it is still much better than what it was last year, number one. Number two, as far as growth is concerned, we are banking more on the rural growth because we are looking at, India's per capita consumption is 17.5 kilo, but when you look at neighboring countries, they are all at 18-19. China is at 27-28 kilo per head. So, going forward, India, average Indian should consume more edible oil. That will happen and with prices coming down, we have seen this year, branded edible oil grow at 15%. Now, next year, we hope to have at least a double-digit figure somewhere in the range of 9-10%. If that happens, that should be good because our volumes are quite large . We did around 2.7 million ton in packed oil. So, another 10% more growth should be a good growth. That is one. Two, we are banking in rural market because in rural, there are many states which still consume less than average India, whether it is Bihar, UP, Orissa, parts of Bengal, parts of Rajasthan, Parts of Madha Pradesh where we have seen that consumption, per capita consumption much lower. And we see a good opportunity to improve our sales there. So, that is why the rural focus will be more. And on inventory, unlike last year, we have learnt certain things, and we have done corrective measures. We have changed our, tweaked our risk management policy to ensure that we remain tight on inventory and we have ensured that we are just in time managing, and hence we will not be saddled with any great inventory. This is a normal inventory that we need to run day to-day operation.

Also, if you could just highlight that now that the branded segmenting is growing faster than the unbranded segmenting within edible oils, what kind of profit improve ment we can see in that segment because of branded growing faster? And lastly, my question will be on , if you could explain what has happened in the industry essentials segment which has led to such a steep decline in volume. What specifically has happened?

On industry essentials, I will say that there are three components. One is oleochemical. Another is castor and third is the oil mill. Now oleochemical business have been doing very well and we have been growing over 20% year -on-year and which we hope to continue. So, there is no problem there. Castor oil, you know, we are world's largest exporter and processors and plants are running at almost 95%. So , we are up at the thing unless we add more capacities, but we are adding capacities and derivatives, which is value-added products and not the base, making just castor oil, but we want to get into derivatives and specialty castor products. There we are investing. So, in castor business, we will grow at 5% or so. What impacted our volumes were the oil meal export. Oil meal, we are big exporters of oil meal. That in the last quarter did not happen because mustard arrivals got delayed and there was rain. So, the oil meal was not available on time for exports, and we missed on that, and the prices also went up and globally consumers were not willing to buy at higher prices. So, the oil meal export, particularly rapeseed oil meal was impacted. I hope in Q1 this year, we will recover substantially. So, on your first question, the oil mix between the overall oil basket, I think yes, of course, the branded portion will go up more because the loose is not the priority for us. Of course, brand remains priority for us and brand, if it keeps growing at 8-9% as Mr. Mallick said, which is in line with the industry growth, I think in the overall scheme of the thing, branded should improve.

Just wanted to understand what kind of profitability improvement because you mentioned that branded has much better profitability than the unbranded, right? So, what kind of profitability improvement can we expect with branded growing faster in terms of the gross profit per ton or EBITDA per ton?

See, on edible oil, so for us the standard run rate for gross profit is anywhere between 11,500 to 12,000 per ton and the EBITDA margins of close to 3,500 metric tons per ton. So, this is what we feel that our brand should be able to deliver. Food, of course, is something which is growing, and which is still yet to come to its full potential of giving the margin, but that's how the margin profile should move in next financial year . Given that now the things have been settled, no volatility, none, no kind of the event which we had in Q1, Q2 are going to be there, so we are quite hopeful that we will have a good FY‘25.

No, there is no one-off as such. Basically, management keep doing the exercise of revisiting the useful life of the asset and what has happened is given the technological advances and the better technology coming in the play as far as the edible oil and the food business is concerned, a lot of plants which we have commissioned in last five years, we realize that they have got a better life than what we have estimated at the time of the commissioning. So, we have revisited the useful life of such assets which we had put in last couple of years, and that has actually resulted into a depreciation gain. Otherwise, there is no one-off as such.

Also, if you could speak about your Bangladesh joint venture, how is the economic environment and you expect some recovery going forward on that?

See, Bangladesh, of course, was one of the reason why our profitability got dragged in FY‘24. We had two issues in Bangladesh. One was the acute crunch of foreign exchange availability in the country. In spite of spending money, we were not able to get the money and given the fact that our business clearly depends on the dollarized borrowing because everything is imported in the country. So, we had to face a lot of issues on this and we had to spend a lot of cost which have impacted the profitability. Second was, given the crisis in the country and a post COVID impact through which country was going through, the government in Bangladesh was actually trying to control the prices and we are not allowing the operators or business players to increase the prices in line with the international oil prices. So, we got stuck on both the sides. One, prices, international prices were high, but we were not being able to increase our price in Bangladesh. Second, we also got a beating on the Fx that in spite of this, we had to spend a lot of money on getting Fx. So, both this problem as we stand today, as we speak today are more or less got resolved. Bangladesh went into elections in January with a now fresh government coming in place. Most of the macros have been improving in Bangladesh. Availability of Fx is now there. Prices have cooled down. Government has also allowed us some free hand on the pricing and the business is now giving a good numbers in Bangladesh at least which we saw in the month of March as well as month of April. So, FY‘25, we do not see any drag on the profitability due to the Bangladesh operations.

Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments.

I would like to extend our sincere thanks to everyone who had j oined the meeting, taking out their time to listen our story, listen our numbers. Do keep tracking our Company. In case of any issues, do keep in touch with our IR team and we would be happy to respond to your questions. Thank you very much.

Thank you from our side and thank you for attending.

Thank you very much. On behalf of ICICI Securities, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.