Thanks, Ali. Good morning, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to 4Q and Financial Year FY 2022 Earnings Call of CCL Products (India) Limited. From the management side, we have with us Mr. Challa Srishant, Managing Director, Mr. B. Mohan Krishna, Executive Director, Mr. Praveen Jaipuriar, CEO of the company, and Mr. V. Lakshmi Narayana, CFO, and Ms. Sridevi Dasari, Company Secretary on this call. Without further ado, I request Challa Srishant, sir to start with his opening comments. After which we can open the floor for Q&A. Thank you and over to you, sir. Thank you for the introduction, Abhishek. I think opening comments will be given by Praveen this time. Praveen, you can start. Yeah. Good morning, everyone. Thanks, Abhishek for arranging the call. The group has achieved a turnover of INR 379.47 crore for the fourth quarter of 2021-22, as compared to INR 334.55 crore for the corresponding quarter of the previous year. The net profit is INR 52.70 crore as against INR 49.20 crore for the corresponding quarter of the previous year. The EBITDA is INR 87.53 crore, and profit before tax is INR 68.14 crore. For the financial year 2021-2022, the group has achieved a turnover of INR 1,466.12 crore as compared to INR 1,245.87 crore for the corresponding period of the previous year. The net profit is INR 204.35 crore as against INR 182.26 crore for the corresponding period of the previous year. The EBITDA is INR 335.16 crore, and the profit before tax is INR 261.33 crore. That is it from my side. Please, we are open for questions from your side. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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 Lokesh Maru from Nippon India Asset Management. Please go ahead. Hi, Srishant sir. Hi, Praveen sir. Thanks for this opportunity, and congratulations on the amazing set of results. Given our exposure to Russia, one would have expected some kind of degrowth, but we have only grown, and that shows a lot of resilience as well. Another, my first question, quite obvious one, is the dip in our gross margins and within the subsidiaries, and another is on the increase in staff costs, which is quite stark. Any insights on the gross margin and staff cost front within the subsidiary business? Yeah. Okay. Gross margin, you know, there are a couple of reasons why gross margins got impacted, and some of these are very obvious and being witnessed across across the board. One of the brass tacks reasons that we witnessed was, you know, because of the Russia-Ukraine war, some of our FD supplies got delayed. That, you know, and FD of course gives us better margins. That led to little, you know, shrinkage there. You have seen that last few months there has been quite a bit of increase in the other input costs as well, be it energy costs and other costs. That also put some pressure. The third reason was that, some of the logistics costs, cost also was under pressure because of very high inflationary pressure. If you combine all of these three, that led to, little shrinkage in margin. Thankfully, because of our model, I think we have been able to, you know, kind of, perform, pretty well in spite of all these, pressures. Sir, the transport costs and everything that you have mentioned would be below the line or should be other expenses, right? Anything that we have witnessed on the raw material front, any spike or anything. My point being, are spreads of processing the same or have they weakened a bit within the subsidiary part, majorly? Standalone remains resilient, the subsidiary front which could be Vietnam and the branded sales, anything different on that front this time? No, not really. You know, only these factors have led because, you know, coffee prices we generally are better covered because of our cost-plus model. Processing costs and all that which are part of COGS, they have got impacted everywhere across the board. That has only led to certain shrinkage in the margins. Sure. On the staff cost front, the spike that we're seeing there, both within India operations and subsidiaries. I don't think so. There is, you know, beyond the top line growth increment there. That's also almost in line with our growth percentages. That hasn't- Staff cost has gone up by maybe 70% within subsidiary from INR 7.5 crore to INR 13.5 crore, something like that. I am guessing, is there any addition of manpower for the branded sales or something like that? Subsidiary. Just a second. I'll just check. Because, you know, at the consolidated level, it's very, you know, in fact, much lower than the top-line growth. I'll just check for the subsidiary that why it has increased. I'm just asking Lakshmi Narayana to just check once. Sure, sir. Until then. If you have anything else, you can please go ahead. Yeah. Yeah. Another question is, the 15%-17% growth guided, so that is on volume front or real EBITDA front? It is on volume, and obviously because of our model, it'll be on EBITDA front as well. Right. Okay. Understood. Yeah. The value may grow even higher than that, but yeah, volume and the EBITDA growth will remain in that range. Sure, sir. That's all from me. Thanks. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Jignesh Kamani from GMO. Please go ahead. Hi, Srishant. Just want to know about how is the volume growth for the full year, you can say, and any color on the how much volume we lost because of the, you can say, logistics issue or Russia-Ukraine issue in the fourth quarter? Sorry, can you just come again? I just missed your first part. For the full year, what is the volume growth of, you can say, total and some color on India and Vietnam utilization level. Second thing, on the fourth quarter, because of the logistics issue and the Russia-Ukraine issue, how much volume we lost or deferred to, you can say, the following quarter? You know, first is volume growth. Approximately, 15% volume growth we got. Yeah. Okay. As far as the fourth quarter thing is that, see, in terms of percentages of cost that got impacted was close to around 2%. If I were to talk about volumes, approximately 500-700 tons of, you know, FD got deferred. If that gives you an idea of, you know, the impact that we got in the fourth quarter. Understood. Second thing, our small pack capacity was supposed to commence in the fourth quarter, 12,000 tons. Any update on that? Is that commissioned or when it is expected to commission? Yeah, it's already commissioned. Now, all the small pack is being done at our new unit. Next year, what kind of utilization we can expect from this 12,000-ton small pack? You know, because of all these new things that have kind of impacted everything, a lot of our small packs used to go to the emerging markets. That has got impacted because of the coffee price increases and all that. Right now, we are ourselves gauging that what could be our capacity utilization. A large part of that capacity utilization is coming from the domestic market, which is our own branded sales. Right. Approximately, you know, we know that out of that 12,000 tons, almost 50% will get utilized by the domestic market itself. That is what we are very sure of. If you get, you know, more small pack orders from outside, we could be looking at a, you know, 60%-70% kind of a utilization. Sure. If I want to understand right now, because of the dynamics, small pack demand, emerging market might be weak, but two quarters down the line, demand might stabilize and then our profitability will improve because of the higher contribution from the small pack, right? Absolutely. Thanks, sir. Thank you. The next question is from the line of Vivek Ganguly from Nine Rivers Capital. Please go ahead. Thank you for the opportunity. I had one question on volumes. What would have been the volume that we have done in FD and SD? You know, we will not diverge with exact volume figures. Right. you know, our FD contribution this year would be approximately 25%. Right. Yeah. It could have been a little more had this 600-700 tons not got deferred. But yeah. Right. Barring that, approximately 25%. Okay. Just a couple of other questions. One, can you give us how your, you know, the Continental coffee, the domestic coffee business is doing? What is the revenue that you'll have done? Yeah. Second is on your new initiative in the plant-based protein segment. Okay. You know, the domestic market last year we had, on a total level, which is like domestic consists of various segments, which is both branded and bulk and private label. We had achieved INR 150 crores last year, and this year we touched a figure of INR 200 crores. Out of which, almost 65% will be 65%-70%, in fact 70% will be brand, pure brand sales. Yeah? That is the turnover that we achieved. The brand sales and the top line, the total sales grew by 35% approximately, and the branded sales grew by 40%. Okay. Yeah. Got it. The protein-based snacks, we just, in fact, a couple of days ago, we've just started to launch in the market. We have only chosen three cities, which is Chandigarh, Pune and Hyderabad to seed our product. It will be a very, you know, a launch which is not like a big bang, but more of a seeding launch because it's a new product category and it's a new initiative for us as well. It's just, you know, a couple of days since the product has gone to the market, and we'll keep you updated as we go along. Thank you. That's all from my side. Thank you. The next question is from the line of Ritu Modi from IIFL Asset Management. Please go ahead. Yeah. Thanks a lot for taking my question. My first question is basically in terms of volume growth, which you indicated of 15%. I'm assuming that is for the year, right? Yeah. Could you just help us understand the volume growth for the quarter? It's because for nine months, I think you had indicated it was around 18.5%. Yeah. For the quarter, how much, sort of volume growth did we do? For the quarter, it will be very, you know, not very high. It would be in the range of, you know, 5%-7%. That is primarily, as I was mentioning earlier, is because of the deferment of one big consignment to, Russia and Ukraine that got little delayed. That happened in the month of April. The fourth quarter numbers therefore look a little, you know, muted. Understood. In terms of the spreads that we would be making because, like if I just look at EBITDA per kg, what would that number be for say, for FY 2022, and how are we looking at it going for over the next two, three years? You know, but because we are not indicating the exact volumes, it's a little, you know, sensitive to share this data in terms of what will be our EBITDA per kg. You know, if you were to because and otherwise also segment-wise, we get different EBITDA between spray dried, agglomerated, FD, and things like that. You know, just one thing which I would like to mention is that there would be very marginal differences in the EBITDA per kg that we'll witness quarter-on-quarter or year-on-year because of our cost-plus model. Of course, there has been a shrinkage in margins because of things which were beyond our control, like processing costs and freight costs and all that. There has been a little bit of a shrinkage in the EBITDA per kg, but that's very marginal and we will look forward to regain that in the coming months. Okay. Basically, I was just trying to understand because we will have the spray dried, we'll have the small pack capacity also operational now, plus, FD, also being a high margin, high spread business. I mean, we had indicated earlier as well from that INR 100, approximately INR 120. Yeah. Is it fair to assume that we will be seeing a gradual increase because of all these factors which are high margin and high spread businesses like the small package as well as rigs, right? Of course, we will be looking at a margin improvement. You know, considering the situation which has become so volatile and dynamic, it's very hard for us to, you know, give a very definitive kind of an answer on that. The reasons being, you know, since the coffee prices have gone up so significantly, there is also a down-trading in consumers at consumer level from FD to SD. We are seeing a pent-up demand in the SD. That's one dynamic that is playing. The other dynamic, as you rightly said, that we will increase our small pack volumes. That should help us improve. There could be softening of prices on the other fronts. Could be. There will be multiple, you know, dynamics that will come in play in, going forward. While we will expect to improve, definitive answer may not be yes at this moment. Sure. Not an issue. Secondly, in terms of your capacity addition in Vietnam, we already have plans for around 16,500 coming up in Vietnam. That is likely to be commissioned by the second half. Are we on track for that? Yes, we are on track for that. The utilization levels which would be fair to assume for Vietnam as well as India, if you could give us a sense on that? You know, currently in India itself, so currently at a group level, we are approximately at 85% utilization today. Okay. Which is almost, you know, a maxed kind of an utilization. We are hoping that we get the new plant capacity added for at least the last three months of the year. That will add up to the capacity. Next year, if you look at the total capacity, we still could be doing around 80% of the full capacity. That will be our utilization. We are looking at, you know, very quickly filling up even the new capacity as well in Vietnam. Sure. Understood. The guidance of 15%-17% volume growth which we have given that, we are maintaining that for FY 2023 as well? Yes. Okay. Okay, sure. I'll come back in queue for more questions. Sure. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Kashyap Javeri from Emkay Investment Managers. Please go ahead. Thank you very much, and congratulations for good numbers in difficult times. Three questions from my side. One, when you highlight that, you know, the volume growth could be about 15% for FY 2023, you know, two things to, you know, probably clarify over here. One, you know, Russia and Ukraine, which are one of the, you know, sort of large markets in CIS, you know, category for us, probably might not grow. On the other side, we have been talking about one large US retailer, I guess besides, you know, JDE Peet's, which is already a client to come into our fold. If let's say Russia-Ukraine, you know, the pressures subside, then we could do more than 15% growth also, including this new US client? It could be, you know. Right now to say that we'll grow more than that could be a bit of a speculation. We will not kind of commit on that. As you rightly said, if the things ease up and there is more demand because we believe that because of this war, there is also a drying up of the pipelines and things like that. There could be, you know, a more demand this year, and that may help us to grow more than 15%-17%. As I told you, we're already maxed out on our capacities, and it's only in the later part of the year that we'll get additional capacities from Vietnam. Keeping all that in mind, I've given you a figure of 15%-17% volume growth. You know, your 15% volume guidance takes both these into account, right? I think there's a lot of disturbance. I cannot hear you. Kashyap, there's background disturbance from your line, if you can just mute. Sorry. What I'm asking is that your 15% volume growth guidance takes both the things into account. Again, I'm not able to. This thing. Can you just repeat? My 15% volume. I'm asking your 15% volume growth guidance is taking into account both the things that, you know, pressures could continue from Russia, but there is new client which is lined up in U.S. You know, if the client comes on board then of course, things could change. You know, one client coming on board, there could be some other clients dropping off the board. Net, yes, 15% is taking everything into account. Okay. Second question is on our, you know, balance sheet. You know, if I look at our inventory days now, you know, have reached almost up to about 130 days. Just about four years ago, that number would have been, you know, half of what it is today. And that's putting a lot of pressure on, you know, the cash conversion, as well as consequently, if I look at our debt, you know, despite strong EBITDA growth, and cash conversion, we have not been able to reduce our debt also. So, you know, what should one take in terms of, you know, inventory days as we go forward? And, is this like a quarter end phenomenon or, you know, on an average quarter to quarter it would have been like this? We have taken a call to store more green coffee, keeping the logistics issues in view, number one, and keeping in view of the price movements that we are witnessing from quarter to quarter. These two issues made us to take a call to have the more inventories on our books. If you look at it on annual comparison basis, normally we used to hold around two and a half months stocks, but due to these said reasons, it has gone up to four months stock. This will, I think hopefully by end of this current financial year, we'll end up somewhere around 2-3 months stock level. Let's say, by the year end of FY 2023, could we expect that to come back to less than, let's say, three months? Is that possible? Yeah. If all the issues are getting normalized, maybe in terms of the GC prices movements and the logistics issues and all, obviously we may fall back to two issues. Last question from my side. In terms of geography, U.S., Europe and CIS, for the full year, can you give some highlight as to what's the volume growth in geography wise? Volume growth? Come again. U.S., Europe and CIS, you know, what would be the growth in volumes separately, geography wise? They're on 15%. You know, when our volume grows to 15%, Mm. This one was sub-10%, the Russian markets because of the Okay. turmoil and all. Yeah. Our Right. U.S. market grew pretty handsomely, more than 20%. Okay. Europe market was more or less, you know, Europe minus CIS was more or less around 15%. Our growth in U.S. market kind of, you know, helped us to do, you know, good numbers despite Russia-Ukraine issues. Right. Just one last nitpicking question. In your cash flow statement, I can see, you know, there is this exchange rate difference which is adjusted in the adjustment, which is about INR 19 crores. Could you help us understand as to, you know, would have it impacted our margins also meaningfully? And why this kind of 19, 18, 19 crore kind of, you know, exchange rate loss? No, there is no exchange loss. In fact, the conversions that we have accounted based on the shipping bill and RBI rate, and at the end of the year, we take them based on the forwards position, and overall, we have the currency gain. Hello? Yeah. Hope you are there. What I'm saying is that you, in the cash flow statement, it's added to the PBT, which means that it's a non-cash expenditure which is there as a part of, your P&L. In the part of the P&L, there is a currency gain of almost around INR 8.95 crores due to the conversion. Okay. Due to the currency variation. The values that we have accounted for as on 31st March, the rate that is prevailing. Oh. There is 9% growth is there, which has been a part of the P&L. Let me take this offline because in the cash flow statement it's slightly different numbers. Let me get, you know, come back with on in compliance with all this. Thanks. Thank you very much. That's all from my side. Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead. Yeah. Hi, sir. Good morning. Just wanted to have some more clarity about this Russian market in terms of our revenue contribution from this market. Despite challenges there, you mentioned that Russian market still grew this year. Even volume growth for the current quarter was positive of almost 5%-7%. Just wanted to understand that, are we able to meet the supplies there, the demand environment is not impacted? How do you see that the current scenario will pan out going forward, primarily from the Russian markets? To answer your question, the first leg of the war, which almost lasted for approximately 30 days, that was the time when everything got impacted. Everything stopped. That led to some stress in the system. However, as the days have gone by, and as you would also be reading in the newspapers, things have started to, let's say, not normalize on the war front, but normalize in the logistics fronts, etc., because ultimately the consumption has to take place. Therefore, what happened is that slowly the liners started taking the containers and things started to normalize. Although it's not 100% normalized, but yes, things have come back to, let's say, 75% or 80% of normalization. That is the situation currently. Going forward, we really do not know is the war going to end soon or how much time will it take. But what we know is that there is quite a bit of normalization and therefore our supplies are now okay. It's not as bad as when the war started. That is the situation. There is no, you know, drop in the demand for coffee at least that we have witnessed in these markets. In terms of, sir, revenue contribution from Russian markets, can you just quantify that? Revenue contribution from Russian markets. About 20%. Approximately 20% is our revenue contribution from Russian markets. Okay. Sir, second is on this Brazilian market, and that is also a pretty large supplier globally in terms of coffee procurement. You're seeing that the currency appreciation and some impact on fertilizers that what we are hearing that the yield may be impacted. Do you also see that the Brazilian coffee market, green coffee, can be impacted? And what impact you see on the global market on the appreciation of the Brazilian currency, and how you see that this scenario is going to impact you? As far as Brazil is concerned, Brazil is actually the market leader and the largest volume of green coffee is grown in Brazil. Naturally, if there is any impact in the production in Brazil, it impacts the world terminal market prices as well. Last year we've seen a little bit of frost impact. There are multiple things that have gone wrong in Brazil, which is why this price increase also has come about in the market in the last year. Going forward, as of now, the predictions that are coming out in the market is that things are really not going to ease up for next year. Maybe after another one and a half years or so, things might ease up. The upcoming crop and next year's crop also might get impacted, is what they're saying. Okay. Just last one. How do you see that our CapEx plans, what is the CapEx plan for the current year? Also if you can, just mention that, in our retail business, what kind of infusion we are planning to do for the current year? CapEx for the current financial year, at Indian operations, we are expecting a normal level of around INR 30-40 crores this year. For maybe based on the second half year, based on the new plans that we may come out, what would be the additional requirement. Getting into the Ngon operation side, Vietnam operations, we have taken a call expansion with $30 million is the total CapEx. For enhancing the capacity from 13,500 to 30,000 tons. $13 million you're seeing in Vietnam. 13, right? INR 30.13 million. Okay, $30 million. $30 million for Vietnam operation. Mm-hmm. That will be all spent this year? Yes. Okay. 30-40 for India. Yes. Roughly INR 250 crore around CapEx. Yeah. Out of INR 13 million, INR 10 million we are going to contribute, and the INR 20 million we are going to borrow. Sorry, I didn't get that. INR 20 million going to? We are going to borrow. Okay. from different sources. Okay. Yeah. Total spend will be INR 250 crore for the current year. That's right. At a good level. $30 million, Vietnam, will give us addition 10,000 tons of capacity? 16,500 tons additional capacity. 15,500. INR 16,500. 160 From 10,500, it will enhance to 30,000. Okay. Got it. Sir, in terms of capacities will be available by end of this year and commercialization we can expect from FY 2024? Yeah, in third quarter we are expecting the trial to begin, and the fourth quarter onwards, the commercialization will come into. Okay. Sir, in terms of your growth guidance, you mentioned roughly 15%. That I understand is primarily driven by volume. That means that in a world, and we have been pretty handsomely growing with a similar rate in last two years, definitely we are continuously gaining market share because it's quite evident that world markets are not growing at that rate. Sir, can you give some more sense that earlier you have mentioned that, you know, some of the Brazilian smaller players probably have lost market and, that had given you edge in terms of gaining market share globally and also giving more access to the US market. Is this trend still going on and that's what you're giving you confident of, confidence of growing 15% in terms of volume growth? You have got some couple of customers who are giving you confidence that you will be able to achieve this kind of growth? For us, if you look at it, in a more holistic perspective, we have our factories present in India and in Vietnam. Both locations, we have green coffee available. We can also import raw materials and then re-export. We have multiple advantages which are there in our favor. If you are in Brazil, for instance, you are dependent only on the local crop. It becomes very difficult for anyone to actually try to import it. The local duties, taxes and everything, the system is also quite complicated. In a competitive market, every cent matters end of the day. Our biggest strength is we have that economies of scale advantage. The volumes that we procure is also quite high. We usually get that first preference from suppliers as well. Our customers also know that if they need whatever volumes with a shorter lead time, we can actually cater to their requirements. All these factors is giving us that confidence that we can keep growing further. Earlier, the expansion plans, what we've mentioned, is only up to Vietnam as of now. I've already mentioned earlier also, we are making plans to add another 16,000 tons of production capacity. The location is something that we still haven't finalized yet. Whether it's going to be in India or outside India, that's a call that we will take in the next couple of months' time once we complete our feasibility studies. Okay. Sir, you are saying that apart from this Vietnam CapEx, you still are contemplating 16,000 tons of additional capacity. For that- Yeah. The location has yet to be finalized? Yes. Are you looking for cross-border? I mean, new territories apart from India and Vietnam, or it will be any of these two? Yes, we are. We are looking at new territories beyond. I mean, we're looking at India as an option and also outside India because there is, I mean, there are certain continents that we can actually capture more aggressively if you are physically present there. Things are a little complicated with any country that we go to, we have to look at local situation, political, geopolitical situation, multiple things we have to look at, stability, currencies. Keeping all these things and raw material, most importantly. Once we evaluate all these aspects, that's when we'll take a call where to proceed with the expansion. Since it will be completely greenfield, what kind of total investment outlay it can have, sir? It's too early for us to comment on that right now, but yes, it will be totally greenfield. Got it, sir. Sir, this Vietnam, the going from increasing by 16,500 up to become 30,000, what will be the breakup there, FD and traditional? Where? In Vietnam. In Vietnam is 100% spray dried. All is spray dried. Okay. In 16,500 there is no FD? No FD at all. Okay. Sir, we heard earlier that realizations were getting in favor of spray dried and FD was seeing some additional capacities coming and was seeing the pressure in the realization. That was a scenario almost a year back. How you see that now? I mean, is this, have this started reversing that you are seeing a further better margins in FD and lower in spray dried? That has always been the case. Or is spray dried still giving you higher margin than FD? Right now there's not much of a change because normally when the green coffee prices go up, then all the product costs for SD as well as FD too increase. Most customers, if they want to look for alternatives, they'll start looking at transitioning from FD to SD. Considering the huge price increase that we've seen in coffee for the last one year, we could clearly anticipate that SD is where the volumes are increasing. As I mentioned earlier also, going forward, at least for the next year or so, we're definitely even if there's a price correction, if market consensus is clear that it will not be more than, say, $100 down. There's still a potential upside of $100+ or $200+ also. We're not looking at a steep correction or anything anytime in the near future, which means that the SD demand will continuously keep growing until this gets reversed. You are not expecting that green coffee prices will fall beyond $100 something, and that will keep the spray-dried demand intact? Yes. Just last, I have still few more. What will be the margin difference right now between freeze-dried and spray dried in terms of average $ per kg? We'll have at least around 10%-15% variation between the two. Actually, more than 15%. Yeah. 15% is still higher in freeze-dried? Yes. Would it be possible to share in a dollar, I mean, like, we earlier used to have, I think $1 average in spray dried and $1.5 in, Maybe around $0.80 or something like that. Between $0.80-$1. Depends on the customer that we're selling to. Okay. SD still will be $0.80-$1, and freeze-dried will be 15%-20% higher than that? No, no. I'm talking about FD being $0.80-$1 more than SD. Okay. This small packaging size that we are continuously focusing on that, I believe that our Australian capacities, I mean, that are completely used. Are you planning to put more small packaging capacities and going to invest some more there? How this, or what kind of our total turnover you see is coming from the small packages, the small pouches and the small packaging units? Small packs, we've already made an investment of about INR 140 crore to set up this packing facility in India. The infrastructure has been built to expand up to 20,000 tons-25,000 tons. That is the ability. As in when we add equipment, we can go up to that extent. Right now, the equipment that we have is in the range of about 10,000 tons or so, 10,000 tons-12,000 tons. I mean, based on the response we see from the market, if we have customers who have specific requirements, we have the ability to keep expanding that capacity within the same premises. Currently, we have 10,000 tons of, kind of capacities, and what is the utilization level of the small pack? About 60% or so. 60% utilization. 60%. To go from 10 to 20 to 25,000, not much investment in plants and all will be required. Yeah. It's only the equipment cost that we'll have to look at. If we have a specific customer saying they want automated packing, then the investment will be totally different. We don't want to make an investment unless we're sure that there is a customer who wants a particular specific product. Right. It's still here also. Sorry to interrupt you. May we request you to come back in queue for follow-up questions? Thank you. The next question is from the line of Jignesh Kamani from GMO. Please go ahead. Hi, Challa Srishant. On the FD capacity of 11,000 tons, we are running optimally this year, last year? No, we still had about 20%, about 10%-20%. Yes. 15%-7% kind of volume growth you mentioned for the next year. FD volume also will be in line or probably because of the capacity constraint, FD may be single-digit volume growth? If you actually look at sales and dispatches, the large portion of what was supposed to be dispatched in March was dispatched in. Yes. It was really much. Yes. Yeah. That also is a factor in, no? Understood. Yeah, it will be as an FD should be a little more than last year. Understood. Second thing on the, now since FD is probably will be running it optimally, by end of FY 2023, any plan to expand our FD capacity? Because as of now, Vietnam don't have FD and India we will be utilizing fully. Not at this point in time. As I was mentioning earlier, looking at how the coffee prices are. Mm-hmm. We are really not foreseeing that, sudden sharp increase in, FD, demand, anytime in the near future. There are other companies who've already started investing in FD two years ago, which will start coming online and become operational by next year. We don't think it's the right time for us to go for FD expansion at this point in time. Okay. If the situation evolves or changes over a period of time, then we may take a call to go in for that expansion. As of now, at least for the next six months to a year or so, we're not looking at FD expansion. In FY 24 and probably initial of FY 25, our FD volume growth will be flattish because of the capacity constraint, right? Pardon? Yes, the FD, yeah. FD will be constrained because of the capacity, yes. Sure. Second thing on the Vietnam, I'm rechecking on $30 million CapEx, will that also entail the zero income tax or we were to pay income tax on the newer CapEx? Zero tax. Understood. How is the current U.S. demand and some color on how working capital is shaping up in U.S., because earlier it used to be high credit market. U.S. is still the same. The terms and conditions are the same. Volumes are growing. The credit terms are always the same for any U.S. customer. It is. If volumes increase, automatically that credit days also will remain the same. Understood. It is a small pick, high margin business for us, right? Small packs we are increasing now in the US. We have slowly started introducing in the last 2-3 years, and that is also growing. Our bulk is also growing in the US. Both categories are growing actually. Understood. My last question to Praveen, on the branded. Praveen, last year, how much profit or loss we made in the branded business, of close to INR 200 crore and some color on the retail touch point where we are right now and some color on the next year revenue and the touch point guidance. As I've always maintained, you know, what we are doing is we are investing back into the business. For the last couple of years, we have been breaking even. Mm-hmm. Last year also we broke even. We invested back and therefore, I think. I'll just answer one more question which was asked very initially, that how the manpower costs for subsidiaries have gone up. These are manpower costs which have gone up for the subsidiaries and largely for CCL, the domestic market. These are the investments we are doing largely to make sure that we keep the growth momentum going. That's the answer on the profit front. Second, as far as the growth and our standing in the market is concerned, as I told you, the brand grew by 40%. That's a good rate of growth that we witnessed last year also. This year also, we are looking to grow in the same range. We're looking to grow the business at 40%. One of the differences that we'll see this year is our distribution expansion. Last two years, because of COVID and all, our distribution was pretty, you know, we were not able to scale up our distribution. But this year, we are looking to scale up, grow a little more, you know, do a little more penetration in the South and expand to other North markets, which we have not been able to do in the last two years. Understood. From the profitability point of view, when we expect a significant profit generation from this retail venture? You know that's a very tough one to answer. Significant is a key word that you have used. We're not looking to, you know, kind of, significantly drive profits on the branded business because the whole idea is to keep expanding. As I had mentioned in the last call as well, it's not only now India that we are looking to expand. We are also looking to expand in the other parts of the globe as well. We are looking to keep investing in brand building as we keep going along. I don't think so in the midterm future, we'll be looking to, you know, start expecting a lot of profit from this business. Understood. Just to add to that, end of the day, core business is profitable and is still growing at a healthy pace. Right. There's no real need or pressure to ask the domestic team to start focusing on profits rather than top line. Understood. The mandate given is that you just focus on top line growth as much as possible in a self-sustaining manner. We don't want to bleed, but at the same time, we want to grow to the maximum extent possible in a sustainable way. Understood. Last year when 40%+ on the branded revenue growth rate, so repeat purchase will be double-digit growth rate, excluding the penetration? Yes. Repeat purchase will be high. In fact, for the last, you know, year or let's say the year before also, because of the COVID, the expansion growth was not much. In fact, a lot of our growth is coming from repeat purchaser itself. We now, you know, even if we do, because if we do a soft feedback from the market, what we get to hear is that people who have tried our brand have kind of stuck onto our brand. There's a lot of, you know, repeat purchases. Our large packs sell more than the small packs. That itself is a testimony to the fact that we have got very loyal set of consumers. Understood. That's encouraging. Thanks a lot. Thank you. The next question is from the line of Manish Mahawar from Antique Stock Broking. Please go ahead. Yeah, good morning, Shashank and Praveen. I hope my voice is audible. Yeah, yeah. Yeah. Just in terms of Russia, I need just some qualitative comment from your side on how the demand we are seeing from Russia, particularly for India as a geography or CCL as a company, because what we understand globally, a lot of geographies are restricting shipment to Russia, right? How India or Vietnam as a country are benefiting and we as a company, that is one. Secondly, in terms of receivables, right, as we've already seen maybe 300-500 metric ton of shipment postponement. How do you see the receivables and collections from Russia? As far as Russia is concerned, whatever contracts that we have in place, from before, we are executing those contracts without any problem, we are not defaulting like some other manufacturers have actually started defaulting from other countries. There's an additional demand that has gotten created over there in Russia. As far as payments are concerned also, we're not seeing any problems. In some instances, we are actually receiving advanced payments also from customers, and then they're asking us to ship the product. Okay. The situation is better for India or Vietnam or as a company for us, right? Yes. In a- Both India and Vietnam, because they've taken a more neutral stand, I think that business is continuing with Russia. Yeah, we're not foreseeing any, I mean, too much of a change in that. In fact, forget India and Vietnam, even a lot of European countries are doing a lot more business with Russia now. Okay. Understood. In terms of small pack and bulk pack, what is the contribution in terms of volume or if you can share, Shashank, in the FY 2022? Right now, small packs is quite small for us because our overall volumes have been increasing a lot in the bulk space. Earlier at one point in time, we were almost at around 25% for the small packs, which has now come down to around 18%-20%. Okay. Going forward, how do you see? Because we have done a CapEx in this, in this part. How is the contribution going forward? The contribution, our endeavor is to go to the 25% again, going forward, 25%-30%. Okay, understood. In terms of EBITDA per kg. Shashank, the, you know, the percentages may remain small, but the small pack itself will grow because what is happening is the large packs are growing equally well. Right. That is why the percentages may look to be same, but the small packs will also grow. Thanks to the domestic growth, which will be at around 30%-40%. Okay. The small pack growth will be there. Right now our capacity utilization is around 60%. It will go up by 20%, sorry, 30%-40% definitely. Okay. Understood. In terms of EBITDA per kg, as we are not giving guidance numbers in terms of EBITDA per kg. Going forward, you know, talking about 2023, 2024, the EBITDA per kg ideally should improve, right? For us, basically because small pack is going well, FD should contribute much better. Yeah, it should improve, as I was telling earlier also because this year probably we're looking at better FD volumes also because of these things. We should improve. You know, very difficult to now comment at this stage, you know. Because there's been a lot of pressure. One should keep in mind that there are a lot of input cost increases, packing materials have increased, fuel has increased. There is not a single industry that I can think of that has not been impacted by this war, by COVID. Some impact or the other is there. In a situation like that, really focusing on improving margins is not the real key. The idea is that during this difficult time, we need to support customers to increase the volumes, keeping our costs to the minimum. Once things stabilize, that is when we can focus on increasing the margins. Okay. No, because, Shashank, the way I'm asking about, because in a B2B business, right, whether it's FD or SD, right, usually it is more of a cost or pass through in terms of a contract, and more pressure on a margin should come on a branded business, right? So just any dynamics has changed or we are just sharing with the customer on a cost whatever increase is happening? No, the dynamics have not really changed. See, right from the beginning, the idea of creating this domestic entity also was to focus on converting CCL from a B2B player to a B2C player. For that to happen, we knew it's going to take some time. Fortunately, things are going as per our plan right now. The only variation that we've seen now in the last year or so is the parent company also is now expanding at a much more aggressive rate. It will take a little longer for the domestic entity to catch up. If you look at it purely on a percentage basis. Okay. Understood. queue booking. Srishant sorry to interrupt, but may we request you to come back in queue for follow-up questions? Thank you. The next question is from the line of Dhiral Shah from Phillip Capital. Please go ahead. Yeah. Good afternoon, sir. Thanks for the opportunity. My question is that what was the contribution of branded product in the INR 200 crore revenue pie? Sorry. We have some disturbance please. Dhiral, there's a lot of background disturbance from your end. What is the contribution of the Continental branded products in the overall INR 200 crore pie? Almost 65%-77% I must say. Yeah. Okay. Sir, lastly, when you are looking to expand, you know, further by 15,000 tons, so what, you know, gives you confidence? Because instant coffee market itself is growing just 3%-4%, right? Yes, you know, What gives you confidence? Actually, if you would have heard Srishant in one of the questions that he answered a few minutes ago, he said that, you know, because of our economies of scale, both in terms of, you know, processing and in terms of buying, is giving us the edge in terms of, you know, our ability to capture more and more market share. Because we have been able to, you know, capitalize on this kind of economies of scale, it has also helped our clients, some of our clients who are our, you know, loyal clients, to expand their business internally. Most of our clients are able to expand their market share and which has led to this kind of growth. Because of our economies of scale and because we are growing bigger and bigger, it is helping us, you know, gain these kind of market shares and therefore that confidence comes that we'll be able to grow at such a rapid pace. There are a lot of markets that we feel are still nascent, when it comes to our presence, and we are very confident that we'll be able to build our presence in those markets like we did it in U.S. market and gain market share. Okay. Got your point, sir. Thank you so much, sir. Thank you. The next question is from the line of Anuj Jain from ValueQuest Capital. Please go ahead. Hi, Challa Srishant. Hi, Praveen Jaipuriar. Just for clarification, can you provide the current capacity breakup between India and Vietnam and further in SD and FD? India, we have 25,000 tons and Vietnam, we have 30,000 tons by the end of this year. Okay. What is the split between SD and FD? 11,000 tons of FD, rest is all SD. Understood. Thank you. Thanks a lot. Thank you. The next question is from the line of Hiten Boricha from Sequent Investments. Please go ahead. Hello. Thanks for the opportunity, sir. Sir, most of my questions have been answered. I have only two questions left. The first question is how much does Russia contribute to our overall revenue? 20%. Sorry? 20%. 20%. Okay, sir. Okay. Sir, my second question is just wanted to understand on the prices, how are the prices of coffee shaping or like what was it last year and how is the prices currently going on? Or you can give some directional view on that. Coffee prices last year in January were in the range of about $1,300 per ton. Today it's at about $2,100 per ton for the Robusta. $2,100 Yeah. 90% of what we use is Robusta. Yes. Yes. For Robusta I'm referring. For Arabica the prices from 1,300 have gone to around 3,000. Okay. $1,300-$3,000. Yeah, 3,300, in that range actually. Arabica. Okay. Okay. The Arabica coffee, this coffee was much impacted by the Brazil drought, right, sir? Yes, exactly. Okay. The Brazil drought won't impact much on our business? Yeah. Okay. Okay. Thank you so much, sir. Yeah. Thank you. The next question is from the line of Rishabh Sisodia from Concept Investwell. Please go ahead. Yeah, hi. Opportunity. Thank you. Sir, I'm sorry, you're not audible. Hello. Now is this better? Yeah, it's better. Thank you. Yeah. Thank you, sir, for the opportunity. Most of the questions have been answered. My one question is, one of the guidance, you know, this company provided from now from maybe a year, two years back, you know, where they talked about getting into pod segment and the capsule segment. If you could give me any color on that, like how are we looking at those segments going ahead? This is a segment unless we have a specific customer who is interested in that particular product, we usually don't supply that product. Now, pods is something which is roasted ground coffee. The shelf life of roasted ground coffee is significantly lesser than that of instant. Now considering if your shelf life is six months to nine months, and due to the logistics issues, if there are delays by two, three months, then the shelf life of the product comes down drastically. Which is why most of the people, they buy pods and all in the consuming country itself from local roasters at a higher price point. Right, sir. If I'm not wrong, obviously now COVID has happened and there is a lot of restriction, but at that time the management was positive about entering these segments because it also has a very high customer base and high margin business. Are we again looking to enter into that segment again and we see a very good demand over there or it's just going to be instant coffee for us? No, we've not been in this segment of pods before. We have explored it. We have, I mean, the equipment, all that is also there, but it's not something that we aggressively push for because it's, there's no entry barrier for you to get into this segment at all. Anybody can do it, so you'd have more competition. Now after the first patent ran out, now there's another new patent which is currently being used. It depends on what category that you're looking for. There's a lot of negativity that is there towards pods because of the landfills. People are looking for more sustainable packaging. Especially in Europe, they don't like the fact that there's so much waste that is getting created because of pods. Okay. Right, sir. Just my next question. Given, should we expect the EBITDA for 2024 to at least be in line with the inflation that we are seeing in the country? Not able to hear you at all. Rishabh, I'm sorry, we are unable to hear you. Okay. We'll move to the next question then from the line of Manish Mahawar from Antique Stock Broking. Please go ahead. Yeah, thanks for follow-up. Just, is it possible to share revenue, EBITDA and PAT for Vietnam as a subsidiary for FY 2022? Yeah. Just a second. We have recorded a revenue of INR 450 crores, and with profit before tax of INR 104 crores. Could you repeat the number? Your voice is not clear. INR 450 crore is the revenue that we have recorded at Vietnam operation. Okay. EBIT before interest and depreciation, it was INR 130 crores. Profit- Okay. Before tax and after tax, it was INR 104 crores. INR 104 crores. Okay. In terms of Continental, like, a brand, what is your EBITDA and PAT you made in FY 2022? If possible, can you share the ad spend also for the subsidiary? I will not share the detailed numbers on that, but what we can share is the top line, as I was telling you, for the domestic business was INR 200 crore, out of which 70% was branded sales. We broke even, you know, on this business last year. Broke even in terms of EBITDA or PAT? In terms of PAT. Okay. Last one, in terms of export incentive, how much of the export incentive you have booked in the FY 2022, and how much of the remaining is still pending with the due receipts? We have accounted for INR 16.5 crore we have received during the 2022 financial year, and around INR 7 crore is the balance eligible to receive. Okay. 16.5 you said, right? Yes. FY 2022. Yeah. Okay. Thank you. Thank you. That's from myself. All the best. Thank you. Thank you. In the interest of time, participants are requested to limit their questions to two per participant. The next question is from the line of Dhiral Shah from PhillipCapital. Please go ahead. Sir, thanks for the opportunity. What was the utilization of Vietnam plant in FY 2022? By the year-end. By the current calendar year-end, it will be implemented. No, no, sir. Utilization of Vietnam plant in FY 2022. It was 80, it was 85%. For the incremental capacity of 3,500 tons? which includes incremental capacity, total capacity 13,500, and we are operating at 85%. Okay. Sir, if you can share the Switzerland revenue and PAT? Revenue INR 450 crore is the revenue that we have achieved at Vietnam operation. Sir, Switzerland. Switzerland operation, sir. Switzerland operations. It was INR 220 crore is the revenue that we have recorded at Swiss operation. Sir, PAT? The profit, it was INR 7.05 crore. How much, sir? INR 75, 7.5 crores? Yeah. Okay. Okay. Thank you so much. Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Yeah. Hi, sir. Thank you for taking my question. Firstly, on this plant-based protein business, so this would be a domestic B2C business model, right? Right. Yeah. Sir, in the larger scheme of things, what I wanted to understand is that, you know, for the whole transition from a B2B business model to a B2C, you know, because our B2B business, you know, is a extremely good business wherein we have extremely high, you know, sustainability in terms of, you know, getting fixed margins and our margins itself are quite high, like 25% EBITDA and 15% PAT. I would wanted to understand with this transition to B2C, do you think, we'll be able to achieve those kind of, you know, that kind of sustainable business and profitability in the B2C business? Given that, you know, these businesses require a lot of incubation in terms of marketing spend to create a brand and then, you know, at most maybe we'll be able to get around 10%-15% kind of PAT margins. I think just to, you know, answer your question, transition is probably not the right term because that sets very wrong expectation. It's not that we are transitioning from. Yeah. I mean, additional business also. Additional business. Yeah. Now, of course, additional B2C business is not an easy one. It won't give you returns in a jiffy. It takes time to build brands. If you're looking at very long-term perspective that we are, we're not looking here only for a 3-year, 5-year or 10-year perspective, but we are looking at a 20-year, 30-year and a 40-year perspective. In that perspective, if you see, obviously the brand business will give you better returns than a B2B business. It's always more, you know, value gets added more if you build brands, isn't it? That's the whole, you know, thought behind adding a B2C segment as well to CCL. Isn't there some kind of consideration, you know, like looking at the B2B model in adjacent space, like even, like in case of plant-based protein snacks, right? Even in that case, you know, we probably might would have looked to expand on the B2B model to start with before getting into B2C. You know, because, you know, what is happening is nowadays, you know, in all this segment, be it coffee and the snacks, there are a lot of B2C brands, right? Rather than competing with them on the front end, you know, being the back end of a partner manufacturing for all these guys, wouldn't that be a great business to be in? You know, the only difference here is that, unlike a segment like coffee or other snacks, where there is already a huge consumer segment available where B2B players could play, here, the category itself is very nascent. It wouldn't have made sense to become a B2B player in this category. Considering that we are looking to expand our B2C segment, we were looking at certain categories where we could start playing. As you rightly said, there are certain categories that are very cluttered. This category, although it comes in the snacking category, is actually different and very nascent and evolving category. Our thinking process here was completely opposite, that we will seed the market with our own brand. Let's see how things evolve. Probably in the future we could backward integrate, and that's the time we could actually become a supplier to our own brand as well as to somebody else as well. Here our thinking process has been a little different on this. Right. To start with, we won't be manufacturing these products alone? No, we are not manufacturing. We are sourcing it from a third party. Domestically? Yeah, domestic. Right now we are launching in the domestic market, that too in very limited areas in three cities, and we'll see how this category shapes up and how we do in this category. Again, even in the B2C segment, as you would have noticed, we don't really go the big bang way, whether it was coffee, whether it is this, so that the margins don't get depleted. All we want to do is to make it self-sustainable in you know, three to five years time, so that the brand gets to feed itself and you know, does not kind of have a stress on the parent company. Right. In the very long term, would it be a right understanding that CCL as a company would be more focused on, you know, venturing into additional B2C areas rather than, you know, figuring out any other B2B market wherein it could expand in terms of category? In the B2B space right now, coffee, we have that strength, we have that economies of scale advantage. Yeah, coffee was obviously a natural extension. Yeah. That's why international expansion also, that is the area that we are going to keep focusing on. Now, if any of the other categories that we are venturing into, if our volumes increase, and at that point in time, based on the situation, we might take a call to get into manufacturing of those products, and we might consider B2B in that segment as well. This is all a lot of speculation. As of now, our focus is actually quite clear. Our focus is that on the B2B space, there is still a lot that we can do, and there is a lot of new areas, new territories that we can explore. Right. which is what we're focusing on now. While doing that, in order to have more sustainable growth in the future, we're also focusing on our own branded presence in India and maybe a little bit outside India as well. Okay. These are the primary areas of growth. Things like these, plant-based, foods and all these other things, these are all very, very small categories. By virtue of being a public company, we have to announce it, which is why we announced it. Right. Right now, to be very frank, we're just seeding the market to see how the response is going to be. We are just experimenting. Future also, we will keep experimenting with products, but our primary focus is still going to be on these two areas, one brand, our own Continental brand for coffee and the B2B for coffee. Right. Yeah. That was great. Thank you. That's all. Thank you. Due to time constraints, that was the last question. I now hand the conference over to Mr. Abhishek Navalgund for closing comments. Yeah. Thanks, Ali. I would like to thank CCL management for giving us the opportunity to host this earnings call. Also, thanks to all the participants for joining in. Over to you, Challa Srishant sir for your closing comments. Challa Srishant sir as well as Praveen Jaipuriar. Thank you, Abhishek. I just wanted to thank you and the entire Nirmal Bang team for organizing this. Looking forward to talking to all of you again next quarter. Thank you very much. Ladies and gentlemen, on behalf of Nirmal Bang Equities Private Limited, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your.