Ladies and gentlemen, good day and welcome to the Dodla Dairy Limited Q2 FY25 Earnings Conference Call. This Conference Call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sunil Reddy, Managing Director. Thank you, and over to you, sir. Thank you very much. Good morning and seasonal greetings to everyone on the call. On behalf of Dodla Dairy Limited, I extend a warm welcome to everyone joining us on our Call today. I hope everyone had an opportunity to go through the financial results and investor presentation, which has been uploaded on the stock exchanges and on our company's website. In continuation of our exceptional start for the financial year 2025, we are pleased to announce that Dodla has once again delivered a healthy performance, achieving its highest-ever revenue of INR 998 crore for the Q2 of financial year 2025. We have also witnessed benchmark performance in value-added products, which accounts for 39% of our total revenues during the quarter. The company has declared an interim dividend of INR 3 per equity share. This is our first-ever dividend since listing. Talking about opportunities, Q2 marks the end of the flush season, and we have built up sufficient inventory to be able to deliver milk throughout the year with consistent quality throughout the rest of the year. The Dodla brand is synonymous with consistent quality and purity and has a very high recall value in South India. Our brand presence is not limited to tier-one cities. It also extends to tier-two and tier-three cities. We continue to invest in various brand-building activities to maintain our brand recall. Now, I would like to take a minute to update you on our recent land acquisition in Maharashtra. On the back of favorable raw material prices, we entered the state about three years ago and established a strong procurement footprint. Today, we procure approximately 2 lakh liters of milk per day from this region. Our target is to take this procurement to around 7 lakh liters per day in the next three years. With such a large procurement, we foresee a requirement of an integrated manufacturing setup. Towards this, we have acquired 35 acres of land in Maharashtra. We are in the process of finalizing our project plans for an integrated plant. Once these are crystallized, we will communicate it to you. The Indian industry is undergoing a structural shift and buoyancy that we have seen in recent times, and we will continue to buck the trend. Seasonality is inherent in our business, but broadly, we intend to maintain a healthy mix of VAP and line for the current performance on an annual basis. We expect margins to stay in the same ballpark, and if things improve, we might be able to pass the savings on to our farmers and consumers. With this brief, I will now hand it over to the Chief Executive Officer of our company, Mr. B.V.K. Reddy. Thank you very much. Thank you, sir. As Mr. Sunil Reddy stated in the opening remarks, we witnessed a healthy performance in Q2 '25 on an overall basis. We achieved the highest-ever quarterly and half-yearly revenue, along with stable margins. Due to significant butter and SMP sales in the quarter, we also recorded our highest-ever quarterly VAP sales. Ghee continues to perform well. During the quarter, we were able to procure 17.2 lakh liters of milk average. This was around 16.9 lakh liters of the same period last year. Average milk sales were 11.6 lakh liters per day and increased by 7.2% on a year-on-year basis. Curd sales stood to grow by 14.7% on a year-on-year basis to 328.8 metric tons, while VAP sales registered growth of 93.5% on a year-on-year basis to reach INR 378 crore. Sharing a few statistics on the procurement price for India business, our average selling price stood INR 68.2 per liter during the quarter. This was INR 57.6 per liter for the same period of last year. The increase was mainly due to bulk sale of butter and SMP. Our average procurement price was INR 34.9 per liter during the quarter, and INR 39.1 per liter for the same period of last year. Since we made a price cut in the previous quarter, this time around, we have kept our milk prices unchanged and are confident to sustain our robust volume throughout the year. Further, our efficiency in the milk procurement from the farmers continues to help us manage our raw material cost. During the quarter, our Africa business delivered a top line of INR 94 crore, comprising 9.5% of total sales. Due to the delayed monsoon, the procurement prices in the geographies increased significantly. Recently, some pressure on the margins with the onset of monsoon. This has already begun to reverse in this quarter. The EBITDA margin in Africa for the quarter was 5.5%. On the other hand, Orgafeed, which is our animal feed business, reported revenue of INR 32 cror, representing 3.2% of our total sales. In the upcoming quarter, we expect a strong festive demand for the ghee as well as sweets. Further, we will continue to pursue butter and SMP sales as a part of our VAP portfolio. Now, I would request our CFO, Mr. Murali, to share the financial highlights of this quarter. Thank you. Thank you, Mr. B.V.K. Reddy, sir, and Sunil sir. A very good morning to all the participants on the call. Talking about our quarterly performance in Q2 FY25, the revenue from operations came in at INR 998 crore versus INR 768 crore in Q2 FY24. In the quarter, our gross margin stood at 25.5%. There is a compression in GP margin on account of higher procurement costs in Africa. Employee expenses increased by 17% on a year-on-year basis. On an absolute basis, this is in line with Q1 FY25. Other expenses, which are semi-variable in nature, increased by 16.1% on a year-on-year basis. We reported an EBITDA of INR 96 crore as against INR 70 crore during Q2 FY24, with a margin expansion of 50 basis points. The net profit for the quarter stood at INR 63 crore and a margin of 6.4%, with an improvement of 67 basis points. Coming to our performance in H1 FY25, the revenue from operations came in at ₹1,990 crore versus INR 1,591 crore in H1 FY24. We reported an EBITDA of INR 201 crore as against INR 131 crore during H1 FY24. The net profit for the year stood at INR 128 crore and a margin of 6.7%. With strong performance in H1 FY25, the company generated INR 342 crore in cash from operations, solidifying our overall balance sheet position. With this, we conclude the presentation and open the floor for further discussion. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Nandita Rajhansa from Marcellus Investment Managers. Please go ahead. Hello. Yes, ma'am. Yeah. Just congratulations on an exceptional quarter. I mean, it's commendable, the kind of operational performance that you achieved on yours. So my question was largely on the inventory side. So we saw that there was a INR 150 crore drop in the inventory level. Is this seasonal or is it structural? Can we see further inventory in the future going forward in FY25, or is it going to rise? Basically, it is structural, ma'am. Whatever we had built up as inventory in the previous year is what we are liquidating in the current year, and once I think we are now entering into more of the lean season, which comes in, I think we will see a further dip in inventory as we keep going forward. Okay, so further dip in inventory is expected? Yes. Understood. Thank you, sir. Thank you. The next question is from the line of Aniruddha Joshi from ICICI Securities. Please go ahead. Yeah. Sir, congrats for a really excellent set of quarters this time. Just two to three questions from my side. One, how do you see the milk procurement prices moving in, let's say, H2 for this year? And again, what is the outlook on the milk prices in FY26? That is question one. Secondly, also, how do you see the, in a way, cattle feed prices shaping up? So, in a way, because it is the raw material for the farmers, so how do we see that moving forward? And in terms of the, in a way, profitability, is the sector near the peak of the profitability? So how should we think about the profitability going forward? Yeah, yeah, that's it from my side. Okay. Thank you very much, Aniruddha. I think regarding cattle feed, I'll ask B.V.K. Reddy to answer whether the prices will go up or not. Broadly speaking, when we look at the procurement prices of the current year of 2025, there will only be marginal increases, and we don't think that it will go up substantially, and status quo will be maintained. Regarding financial year 2026, we will have to wait till the summer of April, May, June comes into play to see if this trend will continue or whether it will not continue. But bringing it in relationship to Dodla, we will continue to be aggressive on our procurement and try to maintain a higher procurement. Regarding profitability, although I would say that we can maintain the status quo very comfortably, we will try to pass on any other benefit for the sake of growth. Broadly speaking, we will be able to maintain this absolute number and growth in the form of the absolute number, whether it is the trade-off between the larger quantities of commodity that we have got, or if it is going to be the price increases or the increase that we get from our milk and milk products. Like we have been saying, we will be concentrating on an absolute profitability number increasing in tandem with our historical growth rate. But we will use our reaction to see whether we can manage with our own internal profitability. Regarding cattle feed prices, I'll ask B.V.K. Reddy to give an answer whether it is. Yeah, Aniruddha. See, adding to Mr. Sunil Reddy's comments on the procurement also, see, the Q3 is already one month in. Now, we are very close to the first month of the Q3. And still, prices are very stable. Slightly, maybe after Diwali, the milk procurement is going to go up for November, December. I don't foresee any challenge in the procurement. And maybe the prices may go up in the Q4, not in the Q3, March. Number one, that is. Number two, our feed is very stable, and raw material prices are very stable. Now, maize and other prices also now, see, last one month, I've seen yesterday also reviewed. The prices are very stable. We are expecting the similar growth and the same profitability margin in the Orgafeed also. Okay, okay. Sure, sir. Understood. Now, in terms of last question from my side, there is a good amount of cash on the balance sheet. Now, I understand that the company has been evaluating, in a way, inorganic opportunities, and as and when you are doing acquisitions also. We have seen that. But any immediate plan with the excess cash on the balance sheet? One is, as I've already announced in my talk earlier, we are giving an interim dividend, and we'll try to see INR 3 per share. We will also be looking at, by the end of the year, to see if it will be a little more of the dividend which will come in. We will start deploying a bit of the cash now on expansion in Maharashtra that we are doing now, and we will be looking forward for acquisitions as always. I think immediate horizon, I don't think there is anything we were looking at some which is not panning out, but we will be looking forward for acquisitions too. Okay, okay. Sure, sir. Understood. This is very helpful. Yeah. Thank you. Thank you. The next question is from the line of Abneesh Roy from Nuvama Wealth Management Limited. Please go ahead. Yeah, thanks. Congrats on the good set of numbers. My first question is on the entire controversy of Tirupati ghee and the analog paneer which came in Zomato in Delhi. So how widespread is this issue of all this mixing of fats, animal fats in ghee by the other smaller players, for example? And similarly, in terms of paneer, etc., if you could comment, how widespread is the analog paneer consumption? I'm sure in the branded space, it will not be there. But is there an opportunity for you to really seize this and do branding exercise and gain market share from some of the local and unorganized players in some of your markets? Basically, regarding Tirupati, it is very controversial. But from the industry point of view, it is mostly the adulteration we normally foresee comes from oil, not from lard as such. That is what I personally believe. I think even the test reports will work with that. And regarding analog paneer and other such products, they've always been in the market. It is predominantly between the price versus value. Like we were alluding to, I think as more and more awareness does come in, I think labeling requirements are becoming stringent. Necessary norms are becoming even more stringent. We will be actively trying to make customers more aware of what they require. For example, now even there was a bit of a ruckus about A2 milk where there was a notification given whether it should not be labeled or should be labeled because there was no testing. And again, it was brought back saying there's labeling. But I think all of us are going to be doing our bit in terms of customer awareness, and we are confident that it will help us as we go forward. Because I think with the GDP of India growing and per capita consumption also increasing, people will want better quality products. And we think all this is good and favorable in our terms because we will be able to educate the customers more. Sure. And one follow-up. So in terms of mixing of oil with ghee, again, in terms of the local players, is that a very widespread issue? Because when I see pricing of ghee, the range is quite wide. So we have very premium ghee also, and then we have got all the branded players in a tight range of, say, 10% pricing in terms of range. So how come there is so much differentiation in pricing and how widespread is the oil mixing in terms of ghee? I think I can categorize it as broadly three categories. One should be the super premium ones, which people try to say it is done by the Bilona method. I've done this. And those are insignificantly small volumes compared to the overall price. Although the per unit price, you will find ghee at INR 1,000, INR 1,500 a kg. That volume is very small, and it's a very niche kind of a market. The much lower prices where I think what you're alluding to will be mostly taken into the B2B scenario where people really don't care and they're looking at price. But the larger companies like all of us who are now fighting the battle of B2C and trying to be there invariably will be along the same lines. It depends on the distances where we are. Some might come out a slight bit more premium in terms of because of the brand that they've established. But broadly speaking, the more organized will be in a similar range when it comes to B2C. You will have the niche players with the very small volume on the top, and the bottom of B2B might be catered to a wide range of people. Sir, my second question is on the overall category FMCG in terms of consumption. So this time, if you see the results of Nestlé, HUL, Dabur, and others also, and D-Mart also, there is a slowdown which everyone is pointing towards in terms of the big cities. So if you could tell us in your markets how the big city consumption compares with the rural areas in your market for you? So, our market, we have been seeing growth, sir, because whatever we are selling, the same names like D-Mart and whatever where we are retailing also, we have seen reasonable uptake and uptake coming in. So, we are seeing no slowdown, but the growth should be maintaining the growth trajectories even in the big cities. So you are not worried because of the very high food inflation, vegetable inflation, you are not seeing any kind of an impact for you in the big cities? Yeah, because this year, I don't think we have taken much of price increases. In fact, because of the back of good procurement prices, we have further made it more comfortable for the customers and passed on a bit of the margin profile to the customers. So we don't see much of a pressure on our growth. Understood. That's all from my side. Thanks a lot. Thank you. The next question is from the line of Vinamra Hirawat from JM Financial Limited. Please go ahead. Hi, sir. So a few questions. Firstly, will there be any impact from the excess rainfall in South India in October in our Q3 numbers? Basically, it's a seasonal variant depending on how much of impact it will be with the cyclones. Maybe we lose a couple of days of sales or revenue. But the difference will be very small. It won't be significantly impacting compared on quarter on quarter. It will maintain a good quarter and continue to grow. As a seasonal impact of what we had previous, you will find a little bit of a difference, but nothing major. Because now we are spread across all the four or five states, so we don't get impacted with rainfall in one particular area being that much or one being lesser. Okay, okay. Makes sense. So regarding the VAP, should we expect similar growth in the sale of butter and skim milk powder? And I want to know what the margins for these two products are. So basically, sir, like we said earlier, skim milk powder will not have much of a margin because we will look at it from a seasonality point of view and how we sell it. Regarding ghee, we are again pushing a lot of it going through B2C rather than bulk butter. So between bulk butter and SMP powder that we are selling, we might have a very small margin, which is the reason why you might see a little comparison happening between Africa prices and butter and butter in terms of gross margin. But like we always keep saying, we keep in mind the absolute number of growth. And keeping that in mind, we keep offloading our butter and ghee and keeping making sure our absolute profitability number increases. Okay. And just finally, can you divide the sales volumes of liquid milk between India and Africa? I think we have the sales volume numbers, but just wanted it for India and Africa. And can you give it for FY24 as a whole and Q1 and Q2 of FY25? So basically, you're saying you want milk procurement of Africa and milk procurement of India for the whole year of FY24 and half year of FY24, correct? Yeah, so the sales volumes, just divided that in India and Africa. Yeah. So give it to us. I will answer, sir. Last year, see, India was 13.47 lakhs FY24 last year. And Africa was 111,000 FY24. And the H1 of 25. So India is 14.13, and whereas in Africa is 1.78. Sorry, this is procurement or this is sales? This is only sales. Sales volumes, right? Liquid Milk? Yes. Yes. Okay. You want procurement number also though? No. The sales is fine. Thank you. Okay. Thank you. Thank you. The next question is from the line of Mythili Balakrishnan from Alchemy Capital Management. Please go ahead. Hi. I hope I'm audible. Yes, ma'am. Congrats, sir, on a good set of numbers. Just had a couple of questions. One, could you quantify how much of the value-added products were bulk products this time around? Yes, ma'am. So basically, it is only SMP that is there. Murali will give you the specific number of how much the bulk number was. Out of the INR 378 crore, just wanted to get a sense of how much is bulk kind of products. Yeah. So bulk, madam, for the full year, we are saying that butter is around INR 153 crore, and SMP is around INR 48 crore, we are saying. The full year, madam. For the quarter? Overall, in the Q1, the breakup is like INR 35 crore in Q1 and INR 166 crore in Q2. That was the breakup. Got it. Just wanted to get a sense, right? If we look at the gap between the procurement and the sales, it's still a healthy gap that we have. So we will continue to see these kind of sales as far as the SMP and bulk butter is concerned, right? Yes, ma'am. We'll continue to see these kind of sales. Got it. Got it. And in terms of the milk, right, we are seeing now an uptake as far as the volumes are also concerned and coming now at 6%. Is that the trend that you are seeing should continue into the festive and beyond that as well? Basically, October, November, December, we would see a little bit of muting of milk and milk products because of the weather being colder, products like curd and things do come down a bit, which will be offset a little by the ghee sales that we are doing. It is more because now we are aggressively pushing brand marketing, and we are pushing it a lot more that we are seeing this uptake. I think we will maintain maybe not similar growth, but we will maintain growth. We'll maintain some kind of growth in the coming quarters too. Got it. Got it. And my last question was on CapEx. We have not had a very high CapEx so far this year. Just wanted to get a sense if there is something that we can expect in the second half, especially with the land acquisition done for the Maharashtra plant. We will be having a little bit of CapEx going forward. I think because the Maharashtra plant acquisition land is just begun, we will start doing work. We'll commence now. And the other CapExes which we are doing, I think we are on target with whatever we have budgeted for the CapEx, which is to the extent of. Regular CapEx, madam, we have spent around INR 43 crore in the full FY24, which is in line with our normal trend. And only Maharashtra, we are now to come up with the proper plan. Maharashtra, we have acquired 35 acres land, and further some more land also we are going to acquire. And by end of this November, we will start civil operations. So the clear picture, the crystal clear total project cost will give you in the next quarter. So some CapEx will happen in the third and Q4. Got it. But the CapEx will happen just in FY25 only, or will it spread over to FY26 as well? It will spread over 2026 also. Maximum CapEx will happen in 2026. Maximum in 2026. 2026 financially, yeah. Got it. And if you could just give us some points on the Africa business, how is it seen in terms of volume growth, in terms of what are your plans there as far as value-add, etc., is concerned? Africa has actually done well in terms of volume. BVK will give you the specific numbers. Also profitability on an absolute number basis has maintained growth. Although on a percentage basis, it's taken a slight beating because of low milk, high milk prices in Kenya when there's a shortage of milk. We are very confident in the coming remaining six months Africa will do well for us. It will be doing in terms of good numbers. We would also say that the dividend that we are declaring now is actually coming from our proceeds from Africa, which was in Singapore, which are getting back to India in terms of that. That is what we are dividending out to our shareholders. BVK will give you more specifics about the growth that we have seen in terms of volume and where we are now. Yeah. Last year, we have done only 111,000 L, but now we see H1, we have done almost 178,000. So roughly about 58,000L, 60,000 L growth from Africa. Because since we have seen new operations from Kenya that have started only in the month of March this financial year, so that has given around 30,000L additional volume. And also existing plant from Uganda, also there's a volume uptake high. So put together, 55,000L-58,000L, the more volume has come from Africa. Also, the product range and milk have been maintaining the same proportion between the curd that we are one of the largest sellers of curd and the milk that we sell in UHT form, farm-fresh milk. Got it. But as of now, we are still ramping up Kenya, and the focus is on that. So there is no much more investment which is going to happen in Africa. No, no more investment. Not in the near future. Till we stabilize both Uganda and Kenya, there will not be more investment there. Yes. Okay. Thanks a lot, and congratulations on a very good set of numbers. Thank you, Madam. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address the questions from all the participants, please limit your questions to two per participant. I repeat, please limit your questions to two per participant. Thank you. The next question is from the line of Ganashyam from Spark PWM Private Limited. Please go ahead. Good morning, sir, and congrats on the good set of numbers. A couple of questions from my side. First is that in Q2 FY25, gross margins on a QOQ basis as well as on YOY basis have come down. Of course, you mentioned that Africa was one of the factors, but I suppose Africa contributes roughly 10% of the total revenue, while 90% is still from India. So any particular reason why you didn't pass on the price changes to customers in the current quarter? Africa is one thing, sir, because Africa normally it's seasonal, and it is in tandem with the season. This year, the season was a little bit lower, and then again, October itself, it recovered and back to normal. So that is a normal trend that we do, and we don't do it immediately as a pass-on because it's not permanent in nature, and it's only that one-two month differential which is going as per season. The other reason is also the butter and SMP that we have sold, the volume of sale in those is higher, although the margin might be a little smaller in that. Combination of these two is the reason why you see a gross margin drop marginally. But on an absolute number basis, we'll keep growing. Exactly. So that's all. If you can, going forward, if it's possible for you to share a segmental breakup in terms of margins as well, in terms of VAP and milk, that will give us a bit more clarity in terms of where the things are moving forward. So that's one reason for. We'll do that and give you the segmental numbers. We'll put it up on the websites also. And second question to do is where will we peak in terms of our share of value-added products in total revenue at what percentage? Because it has been going up significantly higher in the last three quarters. So where do we see it being stabilized in terms of percentage share of total revenue? So I think it will be the same current trend what we are maintaining. We'll be in the same trend of what we are seeing as value-added products. I think now this year we're showing it as 39%. We will continue to keep it in those ranges of 39%-40% is what we think it is. Right. So in terms of steady-state margins, we can assume it's somewhere ±100 basis points on the current levels? Yes, sir. Okay. Thank you so much. That's all my side. I'll join the queue. Thank you. The next question is from the line of Tanish Mehta from iThought PMS. Please go ahead. My first question is regarding your Africa business. For the quarter, EBITDA margins in Africa business were one of the lowest, which is at 9%. If you could just give the reason for that. Okay. My second question was regarding the inventory levels also. We have gone up in Africa, and I was wondering whether it is a seasonal thing or do we anticipate a rise in procurement prices, and that's why we're building up inventory? No, sir. It's basically that, as we said, the seasonality when it came in is why Africa inventory went up a little bit because it's between Uganda and Kenya. And when we do cross-border sales, sometimes when we get permission, we try to move more milk from Uganda, and if it is not there, we sell it in Kenya only. So that will be a smaller difference. In terms of profitability, although the prices went up a little steeply because of a major shortage, that is why you see the difference. But I think it's corrected instantly once the rains have come, and you'll see that in the current quarter where the movement upward will happen rapidly. Regarding inventory levels of India, I think we will continue to keep bringing them down. Yeah, yeah. It was reduced already. If you see, last March, we were at around INR 390 crore. Now we are at INR 231 crore. There is a INR 147 crore of reduction in inventory. And whatever we built up in the current six months, that also we sold out. So we'll continue like a very aggressive net buyer only, okay? And yeah, that's the level. Okay. Thank you. And my second question was regarding the Orgafeed registered at 13% margins in H1. So are these margins sustainable, or is it because of higher wheat prices which may fall down in the future? No, it will be sustainable. So plus or minus 100 basis points this way, that way, depending on the commodity. But otherwise, because we basically are doing it more efficiently now as bigger plants are coming into operation, I think we can maintain these. Okay. Okay. Yeah. Thank you so much. Thank you, sir. Thank you. The next question is from the line of Rishabh Gang from Sacheti Family Office. Please go ahead. Hello, sir. Thank you for the opportunity. Am I audible? Yes, Rishabh. You're audible, Rishabh. Yeah. So with respect to the expansion plan in Maharashtra, if you can just share some information on what are the current operations on the distribution front in Maharashtra, as well as any broad game plan for Maharashtra that you have, and by when can we start expecting the distribution to increase? And how do you look while assessing where to enter, and what are your return requirements or payback period in mind while doing this kind of keeping? BVK will give you more definitive answers about the Maharashtra when we start to do and what is our penetration. Regarding returns, we normally plan returns between five to the eight-year period is what we look at as getting a return on investment back, whether it is an acquisition, whether we do our own greenfield. That is regarding the return. I think BVK will give you the specifics of when we will start the operation and what we look at as distribution. Maharashtra, we are already procuring two lakh liters of milk every day. We have been in operations since three years. Now, recently, we acquired land. By 26 April, we are planning to start commencing our operations in Maharashtra. Maybe it will take 15-16 months to complete the project. It is an integrated project. There we'll make milk, curd, and also SMP, butter and whey. What is the land cost? So for now, see, 35 acres land we have taken for 10 cror. And because it's a converted land, registration cost, everything, it has added one crore. So it has become 11 crore-12 crore so far now. So further, some more land also we are going to acquire because now since we are planning to set up a bigger plant, 10 lakh liters capacity plant. So some adjoining lands also we may acquire. It is also going to be done in a staged manner. We'll start at stage one, stage two. We are looking at it as a significantly large plant for us. Also, is there any guidance that you give regarding the revenue and the margins for next one or two years? We will maintain the status quo of what we are doing currently. So the 10% by volume and 15% by value is what we keep targeting, and maintaining the profitability also at current levels is what we will be pushing forward for. Also, on the inventory side, how much inventory of milk powder do you actually carry at the moment? Milk powder inventory we are carrying now, I think exact number will be given by. September 24, sir, SMP we have around 4,200 tons. We have. What a value to know. In terms of value? Value? In terms of value, that would be around. SMP and butter put together, INR 240 crore is the inventory value. Around INR 111 crore. SMP, only SMP. Only SMP. Just a last question. What is any distribution strategy for the value-added products that you have in states where we don't have any procurement function, right? Where we are just selling these VAP like ice cream and all. Do we have? On ice cream, sir, we are doing ghee as an add-on push, which we are now selling across Pan-India, which we do a bit in the northern Indian states also. But we will be doing more of the ice cream because it will be in areas where we operate and we concentrate because we have the advantage of having our own cold chain across these states where we operate. We're also pushing more of branding and pushing to the market. So we'll see a little bit of uptake in our paneer, our ghee consumer sales, which will add to our growth in value-added products. All right. Thank you so much, sir, for the insights. Thank you, sir. Thank you. The next question is from the line of Abhishek Mathur from Systematix Group. Please go ahead. Yes, hi, sir. Thank you for the opportunity. Just coming back to the gross margin decline that we saw in the quarter, you shared that one reason was the higher amount of butter and SMP that we sold, where their margin is smaller and volume is higher. So if possible, if you can share the proportion of butter and SMP in the total VAP sales that we have, and also the indicative margins for these two segments. And also, secondly, if you can share the consolidated procurement, milk procurement costs, and consolidated sales realizations for the quarter. That's it. Thanks. So if I can get the question right, you want to know the consolidated sales volume and price for liquid milk, and you want the breakup of the quantum of fat and SMP that we have sold. The total VAP sales is around INR 401 crore. Out of that, INR 200 crore is the bulk sale, plus INR 23 crore is VAP products. So total out of INR 4030 crore, INR 200 crore is this one. Okay. And secondly, the question is another. The quantity of milk and the consolidated volume of procurement and sale of milk. Okay. Milk procurement consolidated is for this quarter 17.2 for booking procurement, and overall, last year, it is 16.8. Just needed the consolidated milk procurement cost and the realizations per liter. Oh, okay. Procurement consolidated cost for this quarter is INR 34.64 crore. And revenue realization is INR 66.86 crore for this quarter, including SMP and butter. Thank you, sir. And if possible, if you can share the indicative margins for the butter and SMP segments within VAP. Yes, we'll try to send it to you after the call, sir. Because again, we'll have to bifurcate bulk and consumer and retail, and we'll send that to you. Sure. Thank you, sir. That's all from me. Thanks. Thank you. The next question is from the line of Nikhil from SiMPL. Please go ahead. Yeah. Hi. Good morning and congratulations on good set of numbers. I had two questions. One is on the there was a question that someone asked on next two years, and you said, "We will try to maintain our profitability at this level." And even during the beginning of the call, you said, "We will focus more on absolute earnings growth." While if I go back to our previous calls, we used to say that our EBITDA margin should remain in that 9%-10% range. So is there a change in how you are thinking, or do you also believe that this kind of profitability of 9%-10% may not sustain in future, and that's why focus is more on absolute growth versus maintaining the margins? How are you looking at it? Yeah. So basically, what we are saying is we will maintain this 9%-10% margin growth. So for expansion of margin, maybe there might be a little corrections here and there in terms of because the top line might increase even more dramatically if we go into more of a commodity in one year of a season. So we will try to maintain the same EBITDA margins, and therefore the absolute number will also continue to grow. Even if there is a slight correction in terms of the EBITDA margin in terms of percentages, the absolute number will continue to be healthy and grow stronger because overall revenue might increase. If the other way around, if it is a little bit of a lesser revenue, you might see the EBITDA percentage increase. So that EBITDA percentage, not to consider that as a final number, but more the absolute numbers is where, as a business, we take a call in terms of when we have opportunities to grow more rapidly, and when we see that the growth is coming in, we rather push more growth and take maybe a slight correction in terms of EBITDA, and if the other way around happens, we push the EBITDA and keep the absolute number the same or improve the absolute number. and the second question was on the inventory. Sunil said that you had mentioned in previous meetings and calls that we would now focus on building inventories. Now, if I look at our inventory level today, we are back to like two years back, so over the next six months, we would continue to follow the strategy which we started last year of building inventories during the flush season to move over the lean season and then probably liquidating, or is there a change in that thought process? Oh, that's the same thought process. We will be continuing to aggressively keep pushing our procurement and going forward and improving our procurement and keeping the inventory levels. So we might use it to our own a little bit of more to our manufacturing facilities available with us in terms of conversion to the season. We might be doing a month or two of corrections here and there, but we will overall maintain better inventory position. Not only that, normally in the Q4, there will be no butter movement. Normally, no butter movement, no sales will not happen in the month of January, February, March, April, that particular month. That's why we will see inventory levels are slightly high. But as you know, in the Q2, when festive season starts, the prices also will be better and the movement also better. That's why you have seen a lot of uptake in the Q2. Okay. But over the next six months, there again will be a larger inventory. We'll be building up, yes. Okay. And last question, you were also looking at entering the eastern markets. So any developments over there? That will be, that's the reason we'll be pushing Maharashtra. The eastern market, I think, will be postponing for a while because we are trying to enter and we're not finding suitable opportunities. As and when they come up, we'll go forward to the eastern markets. Okay. Thanks. I'll come back. Thank you. The next question is from the line of Jayvansh Mehta from Care PMS. Please go ahead. Yeah. Good morning, sir. Thank you so much for the opportunity and congratulations on a good set of numbers. So most of my questions have been answered. So sir, basically, you declared a dividend of INR 3 interim for in the recent quarter. So will it be like will we be maintaining the 15% payout in the future, or are we looking at some other investments of cash? No, we will be trying to maintain this, sir, as a dividend policy going forward. We will keep declaring dividend is what we are looking as our regular feature. Okay. And sir, can you say if we like remove the butter and skimmed milk powder sales, then what has not really grown so much? Are we seeing a slowdown in the value-added sales? No. So the VAP in terms of absolute number has grown because overall price is looking bigger. The percentage might seem smaller, but VAP has also grown for us in terms of the number that it is there in terms of curd has grown. If you compare last year from INR 378 crore to almost INR 400 crore in the current year in terms of what curd has grown. Okay. And sir, last question was, like you said, we will be acquiring more land for the Maharashtra capex. So what are the total capex have been looking at Maharashtra? If you can just give a rough number, if you have it. The rough number right now, sir, because between INR 200 crore-INR 250 crore is what we are looking at as an overall capex, which will be done in stages. We will have more specific numbers by the end of December when we start to move forward. Sir, lastly, to confirm, we are expecting it to commence from April 26, right? We're targeting April 26, sir. Maybe a little earlier, a little later, one or two months this way, that way can be the range. Okay. Thank you so much. That's good from our side, and thank you. All the best, sir. Thank you so much, sir. Thank you. The next question is from the line of Naitik from NV Alpha Fund. Please go ahead. Hi, sir, congrats on a good set of numbers. My question is, can you give us the mix of SMP plus butter in the VAP? Can you give the mix between, say, SMP plus butter and rest of the VAP? SMP plus butter will be one, and then we will not be including lean to that because that is basically what we have. I think Murali can give you the specifics. SMP, we have done around 21,000L. Basically, it's around INR 210 crore. The value-added 40 crore we have said, and butter we have around INR 126 crore. So if you remove these overall VAPs, we have done around INR 189 crore in the VAP, and fat products around 22. That is almost INR 211 crore we have done in the products other than SMP and bulk. How do you see this going forward? I mean, is the mix going to remain? We have done well. Our paneer, for example, is almost doubled from what we were selling previously. There's a slight moderation because of ice cream, because of too much of rains and monsoon. Otherwise, it would have been far better. But we are doing well with our curd, consumer, ghee, and paneer. All have grown for us. And ghee also, like, fat consumption. Last year, we done around INR 11 crore. Now we have done around INR 21 crore. There is a substantial increase in the ghee consumer sale. Thank God. That's a change. Thank you. Thank you. The next question is from the line of Resha Mehta from GreenEdge Wealth Services. Please go ahead. Yeah. Thank you. So one, just wanted to understand with such sharp spikes in your butter SMP sales. So would it be fair to assume that with this new inventory policy that we have, it would be very normal to see such spikes in butter SMP sales going forward? You won't see such spikes because this current year is where we have actually moved out from being a net buyer to a net seller. So the years going forward, we will enhance to be as a proportionate of our growth or whatever we do as overall B2C. Maybe this will contribute the same levels of what we are now. So you won't see spikes, but we will be maintaining more equivalent in terms of profitability because this will help us in maintaining the price stability. Like I've been explaining earlier, if there is a reduction in price of milk, the selling of butter and the powder might seem to be a little overvalued. But milk compensates for that in terms of profitability. And the other way around, when there is a shortage of milk and milk prices go up, these will give us more profitability. This will be evening out our sales. In terms of growth, the spikes will not be there, but as an overall growth, this will also fuel the growth in terms of the percentages because we are adding a whole new segment of growth for us. Right. And a related question. So since we don't have the numbers handy for margins of each of these products, SMP, butter, and the rest of value-added products handy, if you could just share that and just a clarification here. So you mentioned in the previous quarter that almost half of the INR 380 crore of VAP sales came from butter and SMP in this quarter. And also, were there any bad provisions for this quarter that we took? No provisions made for this quarter. No provisions made. Basically, margins is whatever we had done as our March NRV, and that's what we are looking at and selling. There is no provisions that we are making, and the status quo maintains on profitability. We are reversing the provisions, whatever we made it in the earlier periods. Based on the sales, we are reversing it. So we always mark-to-market. So there is no change in the mark-to-market prices over the last five, six months. So we are following that conservative approach. We are in line with whatever we have estimated. No provisions and also zero provisions for this quarter and also out of INR 378 crore of VAP revenues for this quarter, how much of that comes from SMP and butter? And again, SMP and butter would essentially be all bulk sales, or would there also be some B2C element there? Yeah. What we call as butter and powder is what Skimmed Milk Powder and butter. Murali will give you the specific details. We also sell a portion of the ghee in terms of our consumer retail, which has increased, so specific numbers we will give. Total, madam, for this quarter, we have done around INR 378 crore of turnover. Out of that, S&P is around 40, and butter is around 126 if you remove it. So we have done around INR 211 crore of other than bulk sales, B2C. Which is including ghee, INR 22 crore? Yes. Includes ghee. SMP and butter is all bulk sales, and ghee is all B2C that we do, right? Yes. Yes. So So last year, the same quarter, after removing the B2B sale, it is around 195. There is a growth we have seen it. Right. And lastly, just on the Africa business, so Kenya specifically, so since you've just started operations in Kenya, just wanted to understand the seasonality. So would it be around, let's say, Q2, would it be normal for there to be milk shortage there? And so on an annual basis, would it be fair to assume that Africa margins will dip in Q2? And so if you could just explain the seasonality in terms of milk in Kenya. And second, since you've guided for a value growth of 15%, and if we look at this financial year, H1, we've already done a 20% top-line growth. So would you want to revise your top-line growth guidance at least for the current financial year? Regarding the Africa, B.V.K. will give you more specifics. What we look at as 20% that we have already done and 15% of what we have been committing. So in the dairy industry, the seasonality does play a role of 2-3%, which will be up in one year, which will be lower in one year. Our guidance that we normally give on 15% growth is saying that on an average CAGR growth, this is what will be maintained. So I think this year will be a good year. Maybe next year might be a little lower year, but we will maintain in the range of the 15% as we grow forward. Regarding Africa, B.V.K., we'll explain about the seasonality in Kenya and how we are doing it. Yeah. Kenya especially, Q1 normally the prices, gross margin will be very high. If you see from Q1 to Q2 this year, especially from 40%-25%, it has dropped because of that. Gross margin is impacting that. Normally in Q2, see, gross margin is less. The last couple of years also we have seen and this year also, this year slightly higher side because of delayed monsoon. So that is the variation. Otherwise, Q3 again, it will come back. Okay. And Q2, what was the gross margin you mentioned? Sorry. This financial year, first quarter it was 43%, and Q2 is only 25%. Got it. Got it. All right. Thank you. That's it from my side. Thank you. Thank you. A reminder to all the participants, please limit your questions to two per participant. I repeat, please limit your questions to two per participant. Thank you. The next question is from the line of Deepak Pawar from Vasuki India Fund. Please go ahead. Hi. Am I audible? Yes, sir. Deepak. Congratulations on the good set of numbers. I have two questions. First is, do we procure milk from cooperatives? You were breaking up, Deepak, sir. Hello. Am I audible? Yes, sir. So do we procure milk from cooperatives? No, we don't procure milk from cooperatives. In India, we don't procure milk from cooperatives. In Africa, we procure at a village level, what is called an association of people, not a cooperative. Okay. And second question would be, sir, that White Revolution 2.0, would there be any benefits to us? White Revolution 2.0 is more in terms of the whole industry trying to get better and talking about a larger play that India will be in the global scale. So that is what our Honorable Home Minister has announced, saying that we will try to get organized cooperative to be larger, productivity to increase. So all these are the right signs for the overall business to grow from India as a country, sir. Like they wanted to do foot-and-mouth free, which will give us a larger global scale in the future as we go forward. So no direct or indirect benefits to us? No, sir. No benefits, sir. All right. Thank you. Thank you. The next question is from the line of Praful Siddharth from Shravas Capital. Please go ahead. Hello, sir. Congrats on good set of numbers. I just wanted to know what's the sales realization during the quarter, the consol sales realization? Yeah. The consol number realized. 66.86 is the consol for this quarter. Standalone, 68.16. That's the milk? That's the liquid milk? What's the sales realization? No, it is not the milk. It's a combined number. Only milk price you want stand alone is basically 55.60. Only milk. Yeah. Sorry. 55.1. Got it. So sales realization is 67 on consol level and procurement is INR 35 crore, correct? Yes. Yes. Yeah. Thank you. Thank you, Thank you. Ladies and gentlemen, due to time concern, we'll take this as a last question. I now hand the conference over to the management for closing comments. Thank you, everyone, for joining us today on this earnings call. We appreciate your interest in Dodla Dairy. If you have any further queries, you can please contact SGA, our investor relations advisor, and we'll get back to you as soon as possible with all your queries. Thank you. Thank you. Thank you. On behalf of Dodla Dairy Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.