Ladies and gentlemen, good day, and welcome to CCL Products (India) Limited Q2 FY 2024 earnings conference call, hosted by Antique Stock Broking. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manish Mahawar from Antique Stock Broking Limited. Thank you, and over to you, sir. Thank you, Yusuf. On behalf of Antique Stock Broking, I welcome all the participants to the Q2 FY 2024 earnings call of CCL Products. From the management, we have Mr. Challa Srishant, Managing Director; Mr. B. Mohan Krishna, Executive Director; Mr. Praveen Jaipuriar, CEO; Mr. V. Lakshmi Narayana, CFO; and Mrs.- Miss Sridevi Dasari, Company Secretary on the call. Without any delay, I would like to hand over the call to Mr. Jaipuriar for opening remark, post which we will open the floor for Q&A. Thank you, and over to you, Mr. Jaipuriar. Yeah. Thank you, Manish, for the introduction, and I welcome you all to this call. I'll just go through the brief summary of the operational performance for the last quarter and the half year, and then you can ask your questions. So as far as quarter two performance is concerned, the group has achieved a turnover of INR 607.56 crores for the second quarter as compared to INR 506.56 crores for the corresponding quarter of the previous year, which is almost a 20% growth. And the net profit stands at INR 60.86 crores, as against INR 57.79 crores for the corresponding quarter of the previous year, which is approximately 5% growth over the corresponding quarter. The EBITDA is at INR 110.64 crores, which is a 13% increase over the corresponding quarter. Profit before tax is INR 69.7 crores, which is a 5% decline with respect to the corresponding quarter. As against the half yearly, as far as half yearly figures are concerned, the group has achieved a turnover of INR 1,262.50 crores for the second half, sorry, for the first half of. As far as the growths are concerned, it is 24.3% growth. As far as net profit is concerned, it stands at INR 121.57 crores, as against INR 110.53 crores for the corresponding half of the previous year. The EBITDA is at INR 217.32 crore, and profit before tax is INR 113.13 crore. As far as EBITDA is concerned for the first half, it is 16% growth over corresponding half for the last year. And yeah, so, and as, as I told the profit before tax for the half year is INR 139.13 crore. So that is a brief summary. I open the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question is from the line of Rakesh Wadhwani from Monarch AIF. Please proceed. Hi, team. Thank you, thank you for the opportunity. So just there was a few days, months back, there was an update regarding the breakage of equipment in the Vietnam subsidiary. Can you please talk about the loss, or the business loss due because of the breakage of the equipment? So yeah, there was a breakage in the equipment in the last quarter, and for which we had given an intimation. As far as the update is concerned, the equipment and the plant is back in running, and everything is fine now. Now, as far as losses are concerned, exact losses, we will not be able to comment exactly what is the loss right now, because the losses are being assessed and because we are speaking to the insurance company, so all that survey and everything is taking place. So once that is done, then we'll be able to intimate about the exact losses for that breakdown. But yes, go ahead. Our production losses we experienced. So for the expanded capacity, almost half of that, the total capacity, we were not able to operate for one full month. So that is the kind of, you know, production loss we had, which led to top line as well as bottom line loss. But exact number we'll be able to share with you, once we have assessed the exact amount of losses. Okay. Okay. Sir, can you talk about the, coffee prices, coffee prices for the quarter, like, average coffee prices for the quarter? Average coffee prices for the quarter is a very difficult thing to say because, you know, we, as you know, our business model is such that we keep buying for our contracts. So there are a lot of these coffee prices that we may have, which have already been bought quite some time ago. For some spot contracts, we would be buying coffee on the spot. So that's not a very probably the right measure for one to see. But, as far as the coffee prices globally are concerned, we all know that coffee prices are still at very high level. We are expecting that once the Vietnam crops crop comes in, which is approximately the same time next month, we will be able to get an idea that how the world coffee prices are or which direction they are moving in. And that will give us some sense that how the coffee prices are going to pan out for the next one year. Okay. Sir, one last question from my side. Sir, there were articles a couple of weeks back that there's a crop loss, coffee crop loss in the Brazil market. So just wanted your thoughts on that. Are we witnessing any clients shifting from Brazil to us, or we are getting new queries because of that? So I think the news that you're referring to was probably, you know, one year old news. That's the time when Brazil crops were affected and the Brazil coffee prices had gone up. But this year, the Brazil crop has been good, and in fact, there because prices have softened a bit. So, so it's not. So that phenomenon of people moving out from Brazil is not there. And, we will, as I view, a lot will depend on how things move, once the Vietnam prices come out in the open, which will happen after their crop comes in next month. Okay, sir. Thank you and all the best. Thank you. Thank you. Thank you. Before we move to the next question, reminder to the participants, anyone who wishes to ask a question, may press star and one. Next question is from the line of Venkat from Three Sigma Financial. Please proceed. Thanks for the opportunity. So, in the last quarter, you mentioned that, you know, the green coffee price actually determines the liability of the borrowings rather the working capital. So can you give a breakup of the working capital versus the long-term borrowing? Long-term borrowings, this is Laxman here. Long-term borrowings remain intact because we are availing the borrowings for the new projects only at Vietnam and in India. As far as the working capital, borrowings are concerned, as I stated in the previous call, the limits are assessed based on the peak level of the GC prices, that remains intact. And, any moment a change that can be witnessed once the Vietnam crop keep coming in, that is likely to come from December. Sir, there is a INR 400 crore increase in the borrowing. So, so is this due to the price or is there anything else that has contributed to this increase in borrowing? Increase in borrowing is literally as we said, the new project is coming up. That is 16,000 tons capacity in the facility, where we are taking around INR 320 crore is the term loan. And some of the balancing regarding the GC prices impact, there is another INR 80 crores-INR 100 crores. That's what it will reflect in that INR 400 crore. Sir, there was a, you had a shutdown, right, in Vietnam. So what is the capacity utilization in light of this? The total capacity utilization. As far as, let's say, the Vietnam capacity was concerned, we were looking to utilize 50% of the enhanced capacity and almost 100% of the, you know, the previous capacity. But considering the breakdown and, you know, situation that arose in Vietnam, probably that number would be lower for the last quarter. But on an annualized basis, we will try and maintain that kind of a guidance of utilizing 50% capacity for the new line for the full-year. So, at the company level, what is the capacity utilization, sir? The capacity, as I told you, the capacity utilization per se, if I were to take the India capacity utilization, it is at 100%. Vietnam, the previous line or let's say, the old line capacity utilization is also almost 100%. Quarter one in Vietnam, we had utilized the new capacity also 50%, but quarter two, as I was telling you, we are still assessing the losses, the exact, you know, exact production loss that we had. But if I were to take a, you know, an informed guess, it won't be 50% of the new capacity, but probably will be at around 25-30% of the new capacity. But that will actually, you know, we'll be able to give a clearer picture once we have done our surveys and assessments, and the insurance companies also done the surveys and assessment. But going forward, as I told you, at an aggregate level for the full-year, we will we are trying our best to make sure that for the full-year, for the enhanced capacity, we will be able to achieve 50%, because we are looking to secure more contracts in quarter three and quarter four, so that we can make, make up for the losses that we had incurred. Sir, how do you see the next quarter and, the entire year? So the next, as I told you, you know, exactly the same way, as we were mentioning, the next quarter and the entire year, we, you know, we already had the, the order books pulled as far as the guidance was concerned, which was about 18%-20% growth on top line and EBITDA. That will remain for the thing. The only thing is that for the losses that we incurred last quarter, we probably have to book a little more orders so that we make up for that, top line and bottom line losses. So the entire year, the guidance still remains the same. We will probably end up at, 18%-20%, volume growth and the similar levels of operational profit growth, which is EBITDA growth. Great. Thank you very much. I don't have any further questions. Thank you. Ladies and gentlemen, in order to ensure that management is able to address questions from all the participants in the conference, I request you to please restrict your questions to two per participant. Next question is from the line of Richa from Equitymaster. Please proceed. Thank you for the opportunity, sir. Sir, my question was, you know, if you could share an update on the domestic and branded business performance for the first half. The second question is on margin trajectory. I know that you don't share the absolute margins, but do you see any kind of, you know, improvement or inching up? I think you had guided for that in over two to three years, you would be looking forward to INR 135 crore-140 per kg kind of margins. Are we on track to achieve that? Okay. So, first of all, the first question that you asked was about the market performance. So if I were to see the total number, we probably were around INR 135-140 crores of total domestic market business, out of which approximately 85-90% was, sorry, INR 85-90 crores was pure play brand. So we are on track for the brand to, you know, close at almost INR 200 crores this year. And the total business would be around INR 325 crores, round about that number, for the entire year. So we are growing, you know, growing at a quite a healthy pace. But yes, going forward, we also want to kind of, you know, drive some more growth drivers into business and then making plans for getting into more aggressive growth in the next, not only just the second half, but also subsequent, couple of years. That is, a little brief on the, domestic and the branded business. Now, the second question that you asked is about margin improvement. So see, we have given a guidance and we have been very clear for last, many quarters, that there are many things that lead to, or that will determine our margins. For example, you know, we are pushing hard for more smaller packs that will help us improve our margins. We'll drive more, you know, specialty coffee sales, so that will help us drive margins. But, you know, there are also other factors which probably at an aggregate level also pulls it down. For example, let's say the new capacity that we are putting, the first capacity that we put in Vietnam was the spray drying. Spray dry, we all know that the margin profile is lower than the capacity. So our mix will change. Sorry to interrupt, sir. Your voice is breaking. Hello, can you hear? Yeah, your voice sounds a little low now. Better now? Yes, this is better. Hello? Hello. Okay, fine. So yeah, I'll just try, I'll just repeat a little bit of things what I said because the voice was breaking. So I was on the margin question that was asked that will the margin profiles improve? So what I was telling is that, yes, there are certain segments where it will, where it will improve. For example, we are driving more small packs that will help to improve the margins. We are trying to sell more specialty coffee. That will help, improve the margins. But having said so, we'll also see some mix change because we have put, you know, the Vietnam capacity, the 16,000 metric tons is spray dried capacity, where we earn lesser margins. So what will happen is that this year, suppose if we were to utilize 50% of my capacity, where the growth will come from, will largely come from spray dried. So that growth will be driven at lower margins because spray dried will have lower margins. So there will be factors which will be pulling up the margin. There are factors which will pull down the margin. So when we had commented that, you know, some of, some of the margins will improve, probably it was for some of the sectional business and not really at an overall group level. Overall group level, we have been the guidance for last few quarters. We have been always saying that for next couple of years, we don't see in any improvement or any deterioration in margin. We will maintain the 18%-20% volume growth and 18%-20% EBITDA growth as of now. Okay. Thank you for the answer. Sir, my second question is, that, you know, now that you're putting up India capacities and Vietnam capacities are also planned, so how much time? Yeah. Do you expect for these capacities to be utilized at an optimum level of, you know, fully utilization level? How much time does that take? So, you know, as a thumb rule, we have, if you have tracked our, you know, capacity enhancement, and tracked our empirical data and history, you'll see that generally what we do or what we have been able to do is in the first year, we tend to utilize 30%-35% of the capacity. Second year is 50%-60%, and third year we get to 80%-85%, which is very close to the maximum capacity, because you actually don't get the maximum rated capacity because of the different blends and things that you make in the coffee plant. So, therefore, that is the broad guidance we maintain. But, you know, if you were to see the Vietnam business, Vietnam capacity expansion. So instead of 30%-35% in the first year, in the first year, first year itself, we are able to utilize 50%. So that we are kind of, you know, that we are performing much, much better. But as far as now the next India capacity is concerned, that's a thumb rule. We will see how things go forward, but we know that there is a lot of, you know, capacity which we already know that will be utilized. Because, for example, the India capacity will be used a lot for domestic market. Domestic market itself is growing at, as of now, 20%-25%. We are looking to even kind of, you know, push the pedal harder and grow at a higher rate. So we know that that capacity will be required, so there will be some capacity utilization. But as a thumb rule, as I told you, this is how we have, you know, kind of progressed in the past, and this is how we are looking forward to progress for, you know, all the new capacities that we are looking forward to install. Okay, thank you for the detailed answers. Sir, Sir, last, one last question, if I may. What would be the effective tax rate over the next three years? Are they likely to be in the same range or some kind of changes? At the group level, it is likely to be around 12%. Okay. Okay, that's for the, that's the guidance for next three years, like until FY 2025, 2026? The next three years, it holds good. Okay. Okay, Okay, thank you so much. Yeah, that's all from me. Thank you. Next question is from the line of Senthil Manikandan from iThought PMS. Please go ahead. Good morning, sir. Thanks for the opportunity. So first, in terms of the breakage of equipment at Vietnam, so, is it if you can share some insights into it, it has already happened in the past, or is it because of a new supplier that has happened in the expanded capacity? Some insights on what is that. No, I don't think it is because of the new supplier. It has happened once in the past. And, you know, these are things which are part and parcel of any manufacturing processes, that there will be breakdowns. These are not new to us, and yes, of course, it was unexpected, but not really new to us. Having said so, the reason that we had, you know, informed the market, because, as, you know, to comply to the regulations that have been put up by SEBI and other government authorities, that if there is a material impact that the organization feels that will take place because of these breakdowns, one needs to inform. So we were overcautious, and we wanted to be very transparent, and that's the reason we informed the market. But it is neither, you know, new or it is neither because of any new supplier or anything. Oh, great. Thanks, sir. Second question is with respect to the domestic B2C segment. So in terms of branding, I think we are seeing, I think the brands in the local Chennai metros. So, what is the broad strategy for the branding part of the B2C segment? So basically, you know, the strategy is twofold. What we are doing is we are trying to aggressively gain shares from the existing players and the existing categories where we are trying to grow big. We started our operations from South India, which is a big big coffee market, and we are now expanding to other cities across the country. So in almost all 10 lakh plus population town, we now have our distribution set up, and we are slowly trying to capture the not capture, let's say, but at least gain some market share in those areas as well. So that's one part of the strategy. The other part is that how do we increase the coffee consumption, for which we are trying to introduce newer formats like premixed coffee, which is because India largely, you see, is a tea-drinking nation, and slowly people are adopting coffee. So we wanted to make sure that we are able to offer the consumers a lot more choices and, you know, a lot more ways to drink coffee. And that is why we are very, you know, gung ho about this category of premixes, because it helps, you know, drive that consumption that much more easily. So that's one segment which we are focusing a lot, which is a very new segment. And here we are doing a lot of category driving, you know, exercises. Here it's a new category. There is, there aren't many players who are playing in the category. So here we are promoting amongst, you know, youth, the college-going guys, the bachelors, who probably are looking to, and not only experiment, but with coffee, but also try various varieties of coffee, and that is what we are trying to, you know, offer to them. Again, coffee, it's a food product, and, you know, food products really have to be driven very differently. You have to drive newer habits. So what we do is we engage in a lot of sampling exercise, interaction of the category with the with the consumer. So wherever we get a chance, we do a lot of product sampling so that people, you know, interact with the product, they get the taste of the product. So that's the second part of the strategy that we are taking forward. And yeah, so largely these are the two buckets, you know, in which we are operating. Great, sir. Thanks. That's it from my side. Thank you. Next question is from the line of Rohan Gupta from Nuvama Institutional Equities. Please go ahead. Hi, sir. Good morning, and thanks for the opportunity. Sir, a few questions from my side. So first, if you can give some sense in the current quarter, the kind of volume growth and the, pricing, either degrowth or the, increase on a YMY basis. So current quarter, if you see the volume growth was around 10%-12%, and, we got, a value growth of 20%. So current quarter, as in I'm talking about the quarter gone by, which is quarter two. So, on 10%-12% volume growth, we got a value growth of 20%. This was largely because of the pricing, advantage we got, largely 5%-3.1% because of small, small tax, which we got from pricing. Okay. Volume growth was slightly muted, mainly because of the shutdown at Vietnam Yesor the breakdown in Vietnam. Absolutely. Absolutely, absolutely. Muted as far as our guidance are concerned, but 10%-12% volume growth in this era itself is quite. No, sir, that is fair enough, but we had been guiding for the. Yeah, against our guidance, we got muted because of the breakdown at the Ngon plant. Do we see, sir, that I mean, with the excess capacity which we have right now, over next six months, I mean, we will be able to still achieve 18%+ kind of volume growth guidance or it will be, Yes, yeah. So we are trying very hard, because of the excess capacity, we have a chance to make up. So we are aggressively pitching and making sure that we make up for the losses. So only time will tell whatever losses that is lost now in the last quarter. We try and make up two additional volumes, but, yeah, that time will tell, because right now we are in the process of you know, pitching and seeing what else, what can we make up. And, sir, how has been the green coffee prices right now? You said that they have started softening, and in next couple of months, that Vietnam will be setting up the prices, right? So when I said softening, it was mostly there was a question asked that if the Brazil prices still very high, and are we getting newer customers from Brazil? To which I said, Brazil crops, prices have softened because they had a good crop this year. As far as Vietnam prices and Indian prices are concerned, we will get to know next month, because that's when the crop for both these markets come, and that's when you start seeing that what kind of trends will evolve after the new crop comes. So as of now, they tend to be on the higher side, it's safe. So you're saying that, I mean, India and Vietnam will see a price upward revision, I mean No, we don't. I I didn't say upward revision. I said that we will see the trend once the new crop comes from. So it could be upward, it could be downward. But now, suppose you know, if the market believes that the supply of crops has been terribly low, there could be an upward trend, but if the other trend happens, then there could be a downward trend as well. But as of now, I mean, as of now, we don't have much clue about it, whether it will be No, we don't. You know, because all the clues anybody had in this world about coffee prices have got broken in the last two years, so all predictions have gone haywire. It's really difficult to predict as of now what's happening, because you know, as you know, a lot of foreign guys also are playing into it. Farmers are holding stock. So there are a lot of things that get played into this whole commodity. So it's better to wait and watch and see the trend before rather commenting it speculatively. Sir, another trend which you just mentioned, that domestic market coffee consumption is increasing by roughly 20%-22% and even upward. Yeah. So that's a very, very, very, I mean, positive, I mean, numbers. I mean, if the industry is growing with that number, I mean, that's surprising to see, because I don't see that the coffee retailers in India, they are growing with that pace. So from where we are getting this, I mean, confidence that the growth in the coffee industry is up to 22%, and- Okay, okay. -now we are Okay. I'll correct a little bit of this thing. When I, when I was talking about domestic market growth, it was our growth of 20%-25%. If you see the domestic market, there are two segments that operate like any other market. There is an in-home segment and there is an out-of-home segment. Now, the in-home segment, which is the segment, which is a retail segment, that you buy coffee and take home and drink coffee, that is in growing at a very high pace. That is still very low, at around 10% or so, yeah. So that is not growing very high. The growth that is coming is in the out-of-home segment. So what is happening is that there is a lot of coffee consumption that is happening out of home, whether it is cafes or at places of work, because what has also happened is now that, after COVID, everybody is back to their places, where a lot of out-of-home consumption has happened. That's the segment that is growing very fast, yeah? So, but if you see our play, either internationally or in domestic market, as of now is largely in in-home segment. So the in-home segment category growth isn't very high, but what we believe is that for us, because we are aggressively trying to gain market share, we will probably be able to grow at a much, much higher pace than what the category or the market is growing. Okay. So you are saying that 20%-22% in your context, not the industry? Our context. Yeah, yeah. Okay. And, and sir, in retail brands, you, you're targeting roughly INR 200 crore kind of sales for the FY 2024, over next, I mean, at your brand sale only. So what is this number you are looking over next, three to four years? Also, you are proposing the restructuring with the demerger of the retail business, with that context. And, I mean, if you can throw some more light that how you see the retail business going forward in next three to four years. And then one more thing, that last year, last con call, you mentioned that you have global ambitions as well to grow your coffee retailing business globally. So any strategy formed up there, that how much spending we are planning to in, in terms of our retailing, into global, markets? How much spend we are planning to over next two to three years? So that's a, that's a long one. But yeah, I'll just try and keep it, crisp and simple. In the domestic market, in the next three to four years, we are looking to drive aggressive growth anywhere between 25%-35%, which means that probably in every three years, at least for the first three years, we would like to double it from where we are. So that's the kind of ambition we have, and that is what we are aiming for and doing whatever it takes to get to that level. So that is what is about the domestic market. As far as international goes, we have ambition to launch our brand, especially considering that, you know, now that the brand has got some equity in India, we are already getting a lot of queries from markets where Indian diaspora is residing, that can we have Continental Coffee here also? In fact, you know, even if we haven't started anything right now, we see lots of instances where our coffee has been, you know, imported by some local traders and they started selling in the local markets. So that phenomena has started, so we felt that it is better that we take it up in a more organized fashion. So that's one segment, and of course, the other segment is segment like UK market, where we bought a brand from Löfbergs, which is Turpol and Rocket Fuel. So we also want to, you know, take that forward and create these, these segments where you could start seeing INR 50 crores-INR 100 crores of sales in three, four pockets across the globe. Now, as far as what is that we are going to spend, we like, just like domestic market, where we have built it step by step and stone by stone, that is how we are trying to do in other markets, also. So our strategy won't be to kind of blast a lot of money in the market and create a lot of hype and then try to get sales, but it will be a step-by-step sales, which means that probably in any market that we operate, in the first couple of years, or let's say by the third year, we would like to break even. Even in the first couple of years, we would not like to lose more than INR 2 crores in trying to build the brand. That is our philosophy, and that is how we will take it forward in each of these markets. That is just last bit from my side, and I'll come back. Sorry to interrupt, Mr. Gupta. May we please request you to rejoin the queue, as several participants are waiting for their turn? Okay. No problem. Thank you. Thank you. Next question is from the line of Jinesh Karia from Antique Stock Broking. Please go ahead. Yes. Thank you for the opportunity. So first question is with regards to the CapEx that we are doing. So, any update on both India and Vietnam CapEx, and how much of it is funded through debt to date? India, Vietnam CapEx. As we stated earlier, the Vietnam expansion is taking place, $50 million. Out of that, the $15 million is our contribution, $30 million is the debt component. Okay, and for India CapEx, 16,000 capacity- Yeah. - that is coming. India, it was, the facility which we were taking up on the CCL Food and Beverage, will be one facility. It's a project outlay of INR 400 crore. Out of that, INR 320 crore is the debt component, INR 80 crore is our component. Which means that there and here it is around, INR 600 crore is the debt component, and the balance amount, it is our internal contribution. How much of cash also has been built in it? We have spent almost around INR 200 crore. Combined India and Vietnam, both? Yes. So we have. Okay, great. So secondly, if you can just throw some color on how the small pack mix has improved in this quarter compared to the previous few quarters. How is the trend been? So the trend is improving, and in fact, if you see the standalone numbers, you'll see that the efficiencies have improved, and that is largely because of small pack deliveries. So it is in the positive direction. If I were to give you percentages in the export business, almost, you know, in the India business, we were actually, if you remember, a couple of quarters ago, post-COVID, we had the small packs contribution had come down to 17-18%. It has now inched back to, you know, slightly above 20%. And as we are going forward, we are kind of constantly pushing more and more small packs, and we are likely to get, you know, similar kind of trends going forward as well. Okay, great. And sir, on the geographical mix, so how much of our export would be to the Middle East market, and how has our US geographical mix improved over a period of time? Okay, let's say US currently is at around 12%-14% of our sales. Middle East is not very much. It will be less than 10%. Middle East and Africa, if I were to combine, so it's less than 10%, close to maybe 5% or so. That is there. Europe is almost again 15%. Russia and CIS will be around 20-25%, and the balance is Asian markets, including the domestic market. Just one last question. On the debt that we were guiding last quarter about the peak debt of around INR 1,800-2,000 crores, so, the coffee price is still remaining at an elevated level, although we are expecting Vietnam price, price announcement next month. So any change in outlook on that front? So just a small correction, that INR 1,800 crore was not the utilization. It was only an approval that we had taken from the board, so that we keep our outer limits intact. Utilization, if you see, for the full-year, won't go, will be close to around INR 1,300 crore-INR 1,400 crore. Yeah? That should be the peak for the next- Yeah. Once we get to know the coffee prices trends, it could change a little bit. If the coffee prices go down, then I think we'll see a reduction in that as well. Okay, that's helpful. I call back in the queue for more questions. Thank you, ma'am. Thank you. Thank you. Thank you. Next question is from the line of Abhilasha Satale from Quantum AMC. Please go ahead. Yeah, thank you for giving the opportunity. So, sir, just, you know, the breakup of the CapEx, like, how much exactly we'll be incurring in this year, in 2025 and 2026, if you could just give those numbers? And secondly, in terms of peak debt, because this year we will be at INR 1,300 crore. But by the time we complete Indian-India capacity, how much will our peak debt stand at? Like, what is our target to reach there, and what is your de-leveraging roadmap post that? Indian operations, so the CapEx, it is somewhere around INR 400 crore to complete the project, which we are going to incur before March, whereby we are going to start the operations as well. This is the main operation. So coming, getting into the Vietnam side, this, the project is going to be completed, as we stated earlier, with the mid of next financial year. And against the project outlay of around $50 million, we are going to invest around $30 million during this year till March, and balance $20 million we are going to invest into the next financial year. So it means the total CapEx, it is somewhere around INR 650 crore is going to be at the group level. INR 650 crore-INR 700 crore, we are going to invest into the capital, CapEx at both the facilities. Right. Right. Okay, fine. And, the peak debt level, like, what would it be like by the time we complete our CapEx? Because this year we'll reach around INR 1,300 crore and in 2025, 2026? The 2024-2025, as we stated, is around INR 1,800 crore. And 2025-2026 onwards, we keep reducing it further because the repayments are going to start, and from 2025-2026 onwards, you can see the reduction in the overall debt. So by March 2025, we are likely to be somewhere around INR 1,800 crore, as we stated in our previous call as well. Sure, sure. Okay, thank you. And, sir, just last one on the Continental Coffee. Like, how do we see this business as a percentage of revenue or in terms of absolute, this? How do we see this, segment of ours, you know, over, say, next three years, five years? What is the outlook? How much do we want to scale there? And, how do we see the profitability for this business as it, as we scale up? So I just, you know, in one of the previous queries I answered that. You know, this business probably this year will end at around INR 200 crore, pure brand business, yeah. And we are looking to aggressively grow this over the next 3 years, which is almost at a rate of 30%-35%. So that is what our aim and objective is. And as far as margins are concerned, we currently have given a guidance of whatever 18%-20% for the group at top line and bottom line. Keeping that guidance in mind, we are going to take decisions at what is the kind of investments that we want to do. But broadly speaking, see, the brand is still at a very nascent stage. We are building the brand. There's a long way to go, a lot of new geographies to be expanded in. So we will not shy away from, you know, kind of building it further, because brand building is something which is a continuous effort. It's not that, you know, you do it for four years and then you stop it. So that is going to happen. And especially in the initial years, probably one would want to put, you know, more resources now that the brand is got established, you know, that putting that resource will help us in the long run. So in the next couple of years, at an EBITDA level, we aren't looking at a lot of growth at EBITDA level. We are trying to drive more and more of top line. So that's the broad guidance from our side. My guess is that from the third year from now on, we'll start seeing a lot of, you know, a lot of contribution at EBITDA level from this business. But as of now, we want to continue plowing back whatever the brand earns into building the brand itself. Sure. Thank you. Thank you. Next question is from the line of Abhishek Navalgund from Nirmal Bang Equities. Please go ahead. Yeah. Hi, sir. So just one question that we have restated our numbers for FY 2023 also. So particularly on the tax front, in FY 2023, there has been a downward revision in terms of effective tax rate. So the question is basically, even if we deliver on the EBITDA side in terms of 20% growth this year, because of the below EBITDA items like depreciation and interest, our earnings growth will be more or less muted this year. So just wanted some clarity on what we did in the FY 2023 effective tax rate after the restatement. When restating the financials, the carry forward losses of our DMIC, FNC division, which is amounting to another INR 45 crore that has been set off against the parent company's profitability. The one thing is that we are already under the MAT, and due to this restating of the financials, our MAT credits have gone up by almost around INR 17 crore. Resulting in even 2023, 2024, as well, and the 2024, 2025 also, we are likely to be under the MAT. Sure, sir. And you said, the effective tax rate going forward will be somewhere close to 12% on blended basis, right? On consolidated level. Yes, sir. Confirmed, that is it remains at 4%. Sure. Sure. And now my next question is on CapEx. So I think you have already mentioned this. So while we have spent only INR 2.6 billion so far in 1H, we are on track to, you know, incur the remaining part, right? The 660 number, which you mentioned. So we will see acceleration in the second half, there, right? That's right, because, as far as Indian implementation of the policy is concerned, we are at the receiving end of all the equipment and they're likely to be completed by March 2024. So as far as both the projects are concerned, we are on track, and we are, we are definitely will reach as per the schedule to complete the projects. Sure, sure. And one last one from my side. I mean, what sort of outsourcing that you did in this quarter, particularly since you had this equipment breakdown. So did we outsource any quantity in the second quarter? No, no, Vishal. You know, very little amount here or there, just to listing, just of some small listing, but not nothing substantial, nothing like what we did last year. Great. Thank you. That's it from my side. Thank you. Thank you. Ladies and gentlemen, anyone who wishes to ask a question may press star and one. Next question is from the line of Jinesh Karia from Antique Stock Broking. Please go ahead. Yes, thank you so much for the follow-up. Around plant situation, when we announced India CapEx in first quarter FY 2023, we had guided for a total outflow of INR 320 crores, which will be funded by around INR 200 crores of debt. Now we are saying that the CapEx is around INR 400 crores, funded INR 320 crores level. So firstly, why the CapEx amount has gone up? What has contributed to it? And why have we increased our debt mix in the CapEx funding? So these would be the two questions. No, if you look at it, there is no increase in our original estimation. Initially we stated it is around INR 50 million at Indian operations and INR 50 million at Vietnam operations. And the schedule of implementation that we have, planned for Indian operations are to be completed by March 2024, and, Vietnam operations are to be completed by mid of, next financial year. Those, Indian submissions are very moderate. Because I was going through your transcripts, so there is INR 320 crore, but I'll take it offline if there is some disconnect from my end. Yeah. Thank you so much. Thank you. Next question is from the line of Richard D'Souza from SBI Mutual Fund. Please go ahead. Thank you. Just wanted to ask about China. Last time we believe that you were thinking of sending some consignments or having a tie-up with the local partner there. So any developments on that front? Yeah. So we are, you know, we have had lots of development, none on the business end as of now, because it does take, you know, it does take time to see the market and get to the clients. There'll be a lot of process of, you know, getting the samples right, matching the product expectations, and then of course, the pricing, etcetera. So yes, a lot of inroads have been made. We have got connected with our local partner there. They have started work on their part. So a lot of work from the background is happening. But yeah, it will take a little bit of a time to, for us to see the results. Okay. So are we tying up with a local partner who has a brand there, or, how is it? Or will be- No, no, no, no, no, no, no, no. They are into... You know, they earlier were into coffee business. They are right now doing a lot of other things, like, you know, oat milk and all that. But, but yeah, we'll, we, but they have a lot of connect in the coffee industry, so that's what they will be pushing for us. Okay. Okay. The second part is that, you know, worldwide, there is a lot of demand for specialty coffee, and I just wanted to understand how are we placed there and specialty coffee as a percentage of our total volumes, what would it be? So we are placed very well. You know, we last time when we spoke, we had spoken about the mini plant and the pilot plant, which was set up. So the whole purpose of developing specialty coffee is we have connected to a lot of clients across the globe. A lot of them have liked, liked our samples, and we are in the process. Very interestingly, not only, so I can't reveal the names right now, but even in India we have got, you know, some—we did some pitches for specialty coffee, especially to the high-end, coffee shops and chains. So, so all that work is happening. As far as the volumes are concerned, see, the volumes will be very low. As of now, it is less than maybe 1% or 2%. But yeah, the good thing about this segment is that once we get the first mover advantage to be the preferred supplier of specialty coffee, it helps us in the long run, and that is what has happened for us in all segments of coffee, be it freeze-dried coffee or a microground coffee or whatever, or let's say, the cold brew. So all that there has been, you know, we were the ones to start it, and then, you know, over a period of time, if the market develops, you get the advantage. So a lot of work is happening. A lot of clients are being, you know, contacted. A lot of positive feedbacks have happened. But yes, the volumes are still very low, but that's, we are okay with that because it's more of a building phase. We all know that even at smaller volumes, it will be very high profitability. I mean, in terms of profit, it will be high profitability. Okay. By when, I mean, do you have a game plan to take it to about 4%-5% of your volumes or? Yes, sir, absolutely. Absolutely. We are kind of wanting to hit those numbers. And, yeah, over a period of time, we will see that we will get to that numbers because a lot of background, we've contacted a lot, many people and they all have liked the product, and they're all excited about it. And, the good part is it's, it's, it's, you know, it, it's not just concentrated to one geography, but also, you know, it's kind of spread out, and we are getting inquiries from across. So we are very hopeful that this will do well for us. Okay. Okay. Just a question on this, I mean, on the innovation front. The last time we heard was about cold brew, and after that, you know, has there been any further innovation which you could talk about then? Yeah. So specialty coffee, as we are talking about it, that's an innovation that is happening because, you know, to deliver that profile of specialty coffee in instant coffee itself was challenging because most of the specialty coffee was supposed to be coming from either R&G or roasted beans. But the fact that we have been able to create a product profile which gives the, is very clear, you know, almost identical to a freshly brewed coffee, is itself a pretty big innovation. And that's the reason why clients across have been very excited about it. And the best part is the coffee chain clients being excited tells you that we have been able to come very close to what all of them wanted. I think that's an innovation that we are very keenly looking forward to. Okay. Okay. One more question from me. On the brands which we acquired in U.K., could you share any quarterly numbers for that? No. So I think you know what happened, we acquired it in the month of, you know, first quarter actually, and since then, last quarter was a lot about transitioning. You know how complicated things are when you are transitioning things from one company to other, and especially the kind of complexity that it involved in the sense of supplier and then all the chains to be transitioned. So a lot of groundwork has happened, so not much to share when it comes to numbers, but at an annual level, we probably will reach around INR 12-15 crores of sales. But that is okay. We actually are looking to relaunch the product with new product formulations, with new packaging, with new positioning. So a lot of that work is happening. And probably this year is not the year when we will be talking a lot of numbers, but more on, you know, the new strategy and how do we want to take it forward. And it's only from the next year we'll start to kind of, you know, drive this aggressively. Once our whole, whole strategy is clear, our whole go-to market, components are, you know, in place, and that's when we will try and start driving. Okay, okay. Sorry, one last question. Reverting back to the China angle. By when do you think you will have some good news to report there, or you would have formalized your plan? We are hoping... Yeah, yeah, we're also eagerly hoping to start listening to good news from that segment. But, you know, as and when we start getting some firm commitments from that side, we'll keep all of you informed. Okay. Thank you. Thank you, sir, and all the best. Yeah. Thank you. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for the closing comments. So, thank you everyone for joining us. Wishing all of you a very, you know, happy festivity, and we look forward to meet you again next quarter. And thank you, Antique, for arranging this call. Thank you very much. On behalf of Antique Stock Broking, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.