L adies and gentlemen, good day and welcome to the Dodla Dairy Limited Q2 FY26 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 on date of this call. These statements are not the guarantee of future performance and involve risk and uncertainties that are difficult to predict. 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 this conference call, please signal an operator by pressing stars, then zero on your touch-tone phone. I now hand the conference over to Mr. Dodla Sunil Reddy, Managing Director of Dodla Dairy Limited. Thank you, and over to you, sir. Thank you very much. Good morning and season's greetings to all the participants on behalf of Dodla Dairy Limited. I extend a warm welcome to everyone joining us on a call today. On this call, I'm joined by my CEO, Mr. BVK Reddy, CFO, Mr. Murali Mohan Raju, and SGA, our investor relations advisors. I hope everyone had an opportunity to go through the financial results and investor presentation. This has been uploaded on the stock exchanges and our company website. We are happy to share that the acquisition of Osam was successfully completed by the end of July. The performance for this quarter reflects two months of contribution from newly acquired business. In the Q2 financial year 2026, Dodla Dairy delivered a good consolidated performance with revenues reaching INR 1,019 crores, INR 1,019 crores, and an EBITDA margin of 9.1% and a PAT margin of 6.4%. This is the second consecutive quarter where we have crossed the INR 1,000 crore revenue mark despite a notable shift in the product mix as compared to Q2 FY 2025. In the previous year, bulk sales of SMP and butter amounted to INR 165 crores for the quarter, wherein Q2 FY 2026, this stood only at INR 28 crores. These bulk sales are strategic in nature in order to maintain a balance between demand and supply of liquid milk throughout the year and manage the seasonal fluctuations. On a like-to-like basis, our core business, excluding Osam Dairy as well as the bulk sales, delivered a revenue growth of 13% year-on-year basis in the quarter. During the quarter, we witnessed a robust volume growth in liquid milk sales, higher contribution of VAP products, excluding bulk sales, and INR 52.6 crore sales contribution from the newly acquired Osam for two months, that is, August and September. Collectively, all of these help offset the impact of reduction in bulk sales. As a result, we have achieved a healthy gross profit margin of 27.7% as against a 25.5% in Q2 FY25. This margin improvement is despite the fact that Osam business typically generates relatively low margins. Furthermore, EBITDA margins were impacted as we saw some uptakes in employee expenses, advertising and promotion, transport, and stores and spares, which Murali will talk about in a bit. I would like to emphasize that the brand is at the core of our business, and we continue to spend towards the same. Some of our recent brand-building initiatives, including sponsorship in Cooku with Jatinath Ralu in the Jio Hotstar, targeted OTT creative strategy, innovative weather reports in TV channels, and Ganesh festival sites. These are targeted initiatives to increase brand salience in our local markets. On the procurement front, due to the lean season and erratic rainfalls, overall supply of milk remained under pressure, resulting in an increase in procurement prices. During the quarter, we also took some price hikes in line with the increased procurement costs. In Africa, our revenue recorded a healthy year-on-year growth of 21.7% with an EBITDA margin of 7.4%, higher than the Q2 of last year. As mentioned in the earlier calls, we are currently focused on capturing the markets in Kenya and then strategically keeping our milk product price on the lower side. Over long term, we expect to see gradual improvement in the profitability in the Africa business. Coming to the Orga business, the business has delivered consistent high double-digit growth. The revenue for the quarter grew by 28.3% with an EBITDA margin of 13.7%. During the quarter, the raw material cost has increased as compared to Q1 FY26, resulting in a relatively low margin, but on a year-on-year basis, it is in line with the Q2 FY25. Going ahead to the GST benefits and festive demand, Dodla is well positioned to deliver consistent growth with further improvement in VAP contribution. We continue to work towards brand building, increasing procurement, expanding our product portfolio, and reaching newer markets. Before I hand over to BVK, I would like to take a moment to congratulate Murali and our finance team on winning the Best Digital Finance Team of the Year at the NextGen CFO Awards of 2025, and also the overall Dodla team and the Osam team of HR Foods for being able to integrate our process and systems in a short time of 60 days, which I think is a great job done by the team. At Dodla, we are focused on creating best-in-class systems and processes under our C-suite leadership to take the business to new heights. With this brief, I will now hand it over to the CEO of our company, Mr. BVK. Thank you very much. Over to you, BVK. Thank you, sir. During the quarter, our milk procurement stood at 19.5 LPD, which is an increase of 13.4% on a year-on-year basis. Due to efficiency improvement by Dodla as well as the addition of Osam volumes, the average consolidated procurement cost in Q2 FY2026 was INR 37.29 per liter, which was around INR 34.64 per liter in the same period of last year. Our liquid milk sales delivered a volume growth of 12.6% year-on-year and stood at 13.1 LPD. Average consolidated milk sales price in Q2 FY2026 was INR 57.07 per liter, and in Q2 FY2025 it was INR 54.82 per liter. The curd sales for the quarter stood at 360 metric tons per day with a year-on-year volume growth of 11.2%. Now, to give a clear picture of our performance, excluding Osam numbers, I would like to share the volume details excluding Osam. Milk procurement volume stood 18.8 L/Day on a year-on-year basis, growth is 9.4%. Milk sales volume stood at 12.4 L/Day on a year-on-year basis, growth is 6.3%. Current sales volume stood at 346 metric tons per day on a year-on-year basis, growth is 6.7%. These details are also available on slide number seven on the investor presentation. Speaking of value-added products, there is a decline in terms of total VAP sales, mainly due to lack of bulk sales during the quarter, as explained by Mr. Sunil Reddy in his opening remarks. However, there is an exceptional growth of 22% on a year-on-year in VAP sales, excluding the bulk sales, which is a positive sign to look at. Bulk sales of SMP and butter stood at INR 28 crores in the current quarter as at the next 167 crores of last year FY25. Hence, the VAP sales contribution, excluding the bulk sales, stood at 27% in Q2 FY26 as against 42% in Q2 FY25. VAP sales in Osam stood at INR 14.8 crores, showing an accelerated increase in the VAP sales as a result of our continuous efforts towards pushing the high-margin VAP products along with the regular brand-building activities. Additionally, we are progressing well with our Maharashtra expansion project. Once the facility starts getting operational, we plan to gradually increase our milk procurement from the state. In the initial few quarters, this milk will primarily be used for bulk sales until we strengthen our sales presence in the nearby regions and expand our geographic footprint for selling liquid milk and value-added products. Currently, in H1 FY26, we procured 2.4 LPD of milk from Maharashtra. Osam currently operates at approximately 23% EBITDA margin. Our focus is on enhancing operational efficiency and scaling volumes from the current 1.2 LPD to 2 LPD by FY27. We expect to bring Osam margins to Dodla consolidated level within two to three years through procurement optimization, increased VAP contribution, and operational improvement. We expect Osam to play a strategic role, boosting both revenue and profitability while supporting our expansion to the northeastern region of India. Additionally, we implemented SAP at Osam effective from November. In addition to these developments, Dodla exhibits direct farmer procurement strategies, growing presence in Africa, steadily expanding our business, remains confident of delivering accelerated growth while maintaining healthy profitability across all business segments in the long term. Now I would request our CFO, Mr. Murali Mohan Raju, to share the financial highlights of the quarter. Thank you. Thank you, sir, and a very good afternoon to all the participants on the call. Talking about quarterly performance in Q2 FY26, revenue from operations stood at INR 2,019 crores at 2.1% year-on-year growth compared to INR 998 crores in Q2 FY25. We delivered a gross profit of INR 282 crores, with gross profit margins reaching at 27.7%, as against 25.5% in the same period last year. Employee expenses for the quarter increased by 25.7% to INR 50 crores, primarily due to INR 3.8 crores addition from Osam Dairy, regular annual increments, and the addition of new manpower with higher skills and qualifications, along with the infra addition. Other expenses rose by 18% to INR 139 crores compared to INR 118 crores in Q2 FY25, mainly on account of advertisement and promotional expenses, as well as increase in price and overhead costs due to higher proportion of milk and VAP product sales instead of bulk sales of butter and SMP for bulk sale of butter and SMP. Advertisement and promotional spend is important for us in order to increase the brand salience for all Dodla products. Our EBITDA stood at INR 93 crores with an EBITDA margin of 9.1%. Depreciation expense came in at INR 21 crores as compared to INR 19 crores in Q2 FY25. Other income for the quarter increased by 18.9% to INR 11 crores compared to previous year. Net profit for the quarter stood at INR 66 crores with a margin of 6.4%. Now coming to H1 FY26 performance, revenue from operations grew by 6.1% year-on-year to INR 2,026 crores compared to INR 1,909 crores. Gross profit improved to INR 542 crores, a 4.2% increase on a year-on-year basis. EBITDA for half-year stood at INR 175 crores, and the company reported a profit after tax of INR 129 crores with a PAT margin of 6.3%. In this period, we incurred Capex of INR 77 crores, largely towards Maharashtra expansion. On the balance sheet front, we maintained a healthy cash and bank balances of INR 596 crores as of September 2025. Thank you. I'll hand over to operator. We are open for questions. Questions and answer session now? Hello. Yeah, go ahead. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 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 Lakshmi Narayan from Tunga Investments. Please go ahead. Yeah, thank you. I just want to understand your milk procurement across the four states. What is the mix of milk procurement you get from these four states? That's my first question. The second question is that there has been a volume growth in milk. I mean, if you exclude Osam, I just want to understand what has been the volume growth and whether the volume growth in milk is coming by expansion in distribution or how it has actually made possible because you have reported a very good growth in the liquid milk consumption. And the third question, I just want to understand what is the mix of pouch curd versus the non-pouch curd mix, if you can give that. These are my three questions. So I'll just answer the question on the milk growth and why it happens, sir, and Murali will give the specifics on procurement of the statewide and pouch curd versus this and the milk growth volume. Predominantly, what we have been spending on our advertisement and also improving our distribution stance, we are seeing an uptake a little bit coming from our existing markets where our market share is also improving in terms of other customers or penetrating deeper. Also, we are expanding areas consistently. We still have a lot of areas to expand in the areas of Tamil Nadu. Karnataka, we have blanketed most of the areas for sale. Telangana, we still have some more penetration to do. So on the front of both of these, deepening our existing operations is where I think our sales percentage would be on a 50-50 basis of the milk volume growth. Existing locations volume penetration is coming down to 50%. New areas are giving us 50% of our volume growth, and brand is helping the recall and customer presence. Murali, I will give you the procurement and pouch curd and details. Sir, this milk growth, do you think this can be sustained over what period of time? And also, how much of these milk sales come from the shops, the modern trade versus the regular dairy supplies? So modern trade is still very minimal, sir. It's only hardly contributed that way, especially liquid milk and all will be much lower. It's only products that we push more towards modern sales. So all this comes only through the sales of the local, let's say, the Kirana store/milk vendor who's coming and delivering it to you is the major area of growth still, sir. So that volume growth comes only from there. Yeah. So, coming to the state-wise procurement, overall the growth for the quarter is 8.21%. So in India, last year, this Q2, we have done 15.48 lakhs, as against current quarter, we have done 16.75 lakh liters. So basically, growth has come from AP 8.749%, Karnataka 12.8%, Tamil Nadu, we are more or less near, Telangana 19.86%, Maharashtra 26%. That is the quarter growth. When you talk about six-month growth, also 7.9% for AP, Karnataka 8.2%, Tamil Nadu more or less near, Telangana 3.7%, and Maharashtra 21%. This is with regard to the procurement. And with regard to the. What is the procurement mix? What is the procurement mix? Did you give that number, sir? What do you mean? Buffalo and cow? Yeah, both. Okay, statewide. Yes. Statewide mix, 32% comes from AP, Karnataka comes from 26%, Tamil Nadu 26%, Telangana 2%, and Maharashtra 14%. Got it. And how many percent? Coming to the sales of Dodla Dairy, excluding Osam, Africa, overall, we have grown in the volume 1.7%. But if you exclude the bulk in the Dodla Dairy, we have grown by 5.6% for the quarter. When you talk about for the year, overall, we have grown by 3.1% because in Q1, excluding bulk, there was a growth of only 1%, so which was our added out. And curd pouch, majority is the pouch only. Almost 80% is the pouch curd for us. Pouch milk. 20% is curd and 80% is milk. Okay, okay. Thank you, sir. I'll come back and give. Thank you. The next question is from the line of Abhishek Mathur from Systematix. Please go ahead. Yeah, hi sir. Thank you for the opportunity. Just wanted to check what is the milk procurement cost trend that we are seeing in October and what is it that we are expecting in the near term going forward? If you can give the number also that we saw for the previous quarter and what is it we are seeing for October and going forward expectation for November, December, and what was the price hike that we took also? See, actually, in third quarter, slightly the procurement cost is going up because of continuous rains, the procurement is not coming to the expected level. So because a lot of farmers have diverted towards agriculture, so the procurement, what we expected in the month of October and November, 19 and a half lakhs only standalone itself. So it is slightly behind the target level. So slightly, there is a pressure in the procurement. So prices have slightly gone up. So already INR 1, INR 1.50 price has already gone up. But I think we're trying to compensate that with better product mix and improvement in overall consolidated numbers. So it won't impact our numbers as much as much. Sir, in the VAP segment, ex of bulk sales, we seem to have recorded quite strong 20% plus growth as you indicated in your commentary. Which are the products in VAP which are driving this growth? Which are the ones which are growing faster for us? It's led by paneer and then by curd. Abhishek, the paneer, curd. Yeah, yeah. Got it, sir. And finally, sir, if we can give our outlook for the near term, what is our segment-wise growth outlook that we're expecting for the second half of this year? And do we think that we can do a margin of somewhere close to 10% in the second half given that we are out of this seasonally difficult period? So that's it from me. Abhishek, I think when you look at it from a growth point of view, we will improve compared to the last quarters. We will maintain standalone. India will continue to grow in the six, seven, or eight% ranges of revenue growth that will come in. Africa is doing well for us. Africa will also improve on profitability because the seasonal changes have already come in. Procurement prices there are coming down. Orgaf eed will also continue to do well, and we are looking at Osam's improvement happening much faster than what we anticipated, and we are confident that it will also do well for us. Outlook is that we will maintain that between that 8%-10% kind of margin outlook also. It won't drop significantly. It will be between that 8%-10%. It's very difficult to take a call right now because we're still not too sure about the weather scenario because the weather reports do state that La Nina is coming in. It is going to be a very bitter winter, so we are not sure about it. I think that is the reason. But otherwise, we will maintain between that 8%-10%. We will always be able to maintain margins there. Sure, sir. And just one last quick follow-up to my first question. If you can give the second quarter procurement cost, the consolidated procurement cost number, and I think you have indicated that it is going up by INR 1 in the third quarter. But if you can give the second quarter number, please. That's it. So consol number, Murali, I'll give the specifics. What will happen is in the third quarter, we will have an increase maybe marginally coming in from India, but it will also be compensated by reduction of prices in Africa. So that will be the consol impact. It will not be that much because Africa will improve for us. But Murali will give you the specifics on. Yeah, consolidated number for this quarter is 37.29. Abhishek. Got it, sir. That's it from me. Thank you. Thank you. The next question is from the line of Aditya from Securities Investment Management. Please go ahead. Yeah, hi sir. Thanks for the opportunity. So first of all, what was the quantum of price hikes which we had taken? And sir, I wanted to know the rationale of doing the same because I believe we would be one of the only few players who would have taken price hikes. So just wanted some understanding on that. No, no, sir. Price hikes on the sales side or on the procurement side, sir? Sales side. Sales side is not much of price hikes that we have taken, sir. Overall, because of the revenue mix that is there, the prices are looking at a higher in terms of the net realization that we've got more than in price hikes. There's been not much of price hikes. It is the product mix that is the reason that has changed, which has shown an improvement of 4%. 4%. 4%, sorry. 4% because of the change in the product mix. Answer is there. 4% has increased in the sales. Understood. And sir, when was the last price hike taken by us in India, and are we looking to take any price hike in the near future? Right now, there's no price hike, sir. Only internal slight corrections. No MRP price hikes. The last price hikes taken were more than six months ago. I think it's when the last price hikes were taken, sir. Sir, and recently, sir, GST waiver is necessary. That we have done it. Got it. Sir, next was what was the revenue, gross profit, and EBITDA for Osam in this quarter? Osam, it's only what we have taken as two months, I think, but we will be able to give you numbers specific to. Yeah, so revenue was INR 52.6 crores. EBITDA is INR 1.38 crores. That is 2.6% margin, and we have done a volume of 1.35 lakh LPD. But when you consolidate as average, it has come as 18,000, because two months operated, we are at 1.35 lakhs. Yeah. All right. Understood. Now, sir, you have been operating Osam now for almost two to three months. So any low-hanging fruits you think are present in the business which you could work on immediately to improve margins in the short term? And secondly, on a long-term basis, what kind of margins are you targeting over there? Over what time frame? And what would be the levers for doing the same? So broadly speaking, it is a good market that we're looking at. We are taking it from the population point of view, the penetration that has been available and there. The low-hanging fruits are, I think, we are trying to get the efficiencies of the operating systems like we are doing our what we are doing as our practices here to be implemented there like we are doing in costing and other areas. Improvement in the facilities of the plant for qualitative improvement. It's very early now to give you specific numbers of growth, but we are very confident that the improvement will show in the coming few quarters itself on the bottom line on the profitability front. Volume growth is already growing at 20% year on year as per the projections of what there last year was to what the current year is. Like I told you, system integration successfully. We have been able to do the SAP integration, which is basically showing the ability of both the teams, the team at Osam who has been able to adapt, as well as our team being able to integrate them with us very comfortably. Distributing and strengthening the network infrastructure is an ongoing process which will continue. Supply chain optimization is leveraging our existing networks by supplying condensed milk from Maharashtra when they have a shortage. It's one of the things that we are doing to increase it on our own butter and SMP that we have here as our stocks to be sent there. So all these things added together will start showing the improvement, and we are hoping that it will do well for us in the coming few quarters. Yes, sir. But sir, structurally, can Osam operate at India's stand-alone margins of 8%-9% considering the scale is lower over there? We are actually targeting for that, sir, but it might take us some time to get there because I think the immediate, there's very low margins of this 1%-2% that will improve dramatically. But to make it a little higher after a point of time, we have to consider local conditions there because with this number growth that we take, we'll be number two to the local cooperative with Sudha, which is the existing or Amul or whatever. I think based on the brand resilience and other things, we will be able to get it there, but it might take us three to four quarters or more to get there. Understood. Sir, just last one question. What was the curd sales amount in rupee terms this quarter? For India, including Osam or just stand-alone India, sir? Total, sir. Total, okay. Curd sales for India this quarter is INR 156 crores. 154 crores. 194 crores in total consolidated. 194. Yeah. Per quarter. Thank you, sir. Per quarter. Yeah. Okay. Thank you. The next question is from the line of Shivam Mittal from Care PMS. Please go ahead. Hello. Thank you, sir, for the opportunity. So sir, in terms of value-added products, if I exclude bulk sales, so non-bulk sales has grown sequentially. Bulk sales, not the VAP sales, have grown. Murali will give you the specifics of standalone India, the VAP sales growth. So overall, excluding bulk, the growth was around 5.6%. VAP sales. Only VAP sales. VAP sales was grown. Basically, VAP growth 7.7% is in the curd, and other products is almost 10%. Come in. So we'll just give you the exact VAP sales numbers that we are looking at. Okay. Sir, you can mention. Excluding bulk, we have 24.2%. We have grown. VAP sales 3.3% excluding bulk. Okay, sir. Sir, VAP sales excluding bulk sales. So Q1 versus Q2. Yes. No, Q2 of FY 2025 versus Q2 of FY 2026. Sir, you mentioned Osam. Okay, I'll tell you. We'll again answer it. We'll again answer it. So for example, Q2, we have done a turnover of INR 230 crores in the Q2 of VAP. Last year, we have done. That means Q2 of last year, we done INR 189 crores. That was resulting to 21.4% of the growth. Q2 to Q2, sir. Last year, Q2 to current year. Yeah. Because Q1, when you compare it, last Q1, excluding bulk, we had done INR 269 crores. But because that is a summer season, we have more VAP sales of curd, buttermilk, and lassi. So when you compare with that, there is a degrowth of 10%-10%. Yeah. And in the fat and fat product, because that we'll see separately, in the fat, current quarter, we have INR 31 crores. Last year, similar quarter, INR 22 crores. There is a growth of 44%. Correct, sir. Last Q2 to this year, Q2, and this year, Q1, when you compare, because this year, Q1, we done INR 240 million, so there was a degrowth of 10%. So overall, Q2 has improved, sir. Q1, damage of not having the weather on our side was the one the VAP came down. But Q2, it has improved and grown. Okay, sir. Understood. Sir, you mentioned Osam is a low-margin business so any particular reason for that? Osam is B2B. We'll answer the question. Basically, no. See, there are two reasons. One is operational efficiency. A lot of operational inefficiency is there that we are correcting. And see, systems and processes are not in place. So that's why within 60 days now, we implemented SAP. So in a couple of months, there will be some change in the margins. So basically, also what we mean by operational efficiency is there is such a business that on every end, we'll have to make sure that everything is up to the peak in terms of quality of product, logistics, efficiencies in terms of logistics, temperature controls, and all that. I think these basics, which are more, what do you say, touch and feel of the business that you need, has been what we are getting to Osam, and we hope to see that that will immediately give you results in the short-term. Growth will be there. All right, sir. Sir, for the quarter, EBITDA number, if you can specify? One minute, sir. Quarter advertisement, we have spent in the quarter, September 12th, INR 10 crores, sir. What was the last year, same quarter? Last year, similar quarter, we done only INR 7.2 crores. 7.2 crores. Okay, sir. And how, sir, this GST benefit? Thank you, Murali. I request you to rejoin the queue for follow-up as there are many participants left in the queue. Okay, sir. Thank you. I request each participant to ask two questions from now on. The next question is from the line of Manan Goyal from ICICI Securities. Please go ahead. Hi, sir. Good morning. Sir, I can see in the PPT that the bulk sales for SMP and butter is 283 million in Q2 FY 2026, but it is 1,666 in Q2 FY 2025. Could you specify the reason for the same, why there is too much declining? So basically, sir, this bulk, what we are trying to do, is basically a balancing between our procurement and sales. I think strategically, as we go forward, we want to, as the size of the company is growing, we cannot be precise about our procurement and sales volume, and therefore, we will have to build out more in terms of keeping this variation in how the seasonality will play. Keeping that in view, last year, when the procurement prices were a little lower and there was an abundance of milk, we started to continue with procurement, and we didn't want to cease procurement, and therefore, we had a buildup of inventory, which we did sell. That has already shown us strategically benefiting us now. When the procurement volumes have come down overall, we are still able to maintain our surplus in terms of the additional one lakh liters, which we need for our own balancing, and we're continuing to do it, is what will happen. So when there is a seasonality that comes in, we are not saying no to the farmers. We are continuing to increase our offtake and continuing to, if there is a surplus, we convert that into the inventory of powder and butter. So as we go, that is the reason why when the Maharashtra plant also comes into operation, we will start going and doing more aggressive procurement and also keeping costs into consideration of which plant for conversion and where it moves and maintaining inventory levels to see that it will benefit us if required, or we will have lower inventory, like how it is showing up between last year to the current year. So this is only a seasonal balancing that we are doing, and it will be there with us, sir. Understood, sir. Thank you. Thank you. The next question is from the line of Praveen Kumar from Aequitas Investment Consultancy. Please go ahead. Hi. Good morning. Thanks for the opportunity. I had a couple of questions. The first one was on, this year has been beset by volatility on the supply side in terms of high procurement prices, and they're refusing to come down due to weather-related volatility. So I wanted to ask a couple of questions around that. One is that how do you deal with this on an ongoing basis in terms of both the supply side and demand side volatility due to seasonal variations? And do we foresee? I mean, the last time we had a procurement and sales price kind of a mismatch, we ended up building some inventory and taking a hit on the cash flows in FY 2024. So do we see a repeat? I mean, are we likely to see a repeat of that? That's question number one. Question number two was, I wanted to understand the break-up of the employee expenses and other expenses. You have attributed it to a few factors, but I wanted to get a more detailed break-up of the expenses to understand where the increase has happened. Thank you. Yeah. So I think thank you, sir. I think Murali will give the specifics on the employee details. I will just take the thing on the bulk trade that you are looking at and saying, will it repeat current year? It will not repeat because of lack of low procurement and not having enough of milk coming in the system. But while going ahead for next year, again, we are now to maintain a variation between 20 days and 30 days of inventory to five or 10 days will be a variation that we will have to be prepared for. In terms of cash flow, it is not a significant increase. We have ample cash reserves, and we are a debt-free company. So that is not at all an issue. It is only done from our side for more of balancing of our procurement and sales. So for the current year, no. For the next year, we are still not sure. We have to wait and see how this happens. So this is the normal industry trend in the dairy sector. Last year was excessive procurement, overpriced procurement, which did show that inventory and what we sold. This year is less and is not showing. Now, Murali will be able to give you the breakup of the salary details, sir. Overall, sir, for this quarter, actually, we have total INR 10 crores of increase was there. In the salaries cost itself, around INR 10 crores, majorly is one of the Osam addition is there, and apart from that, 12% of increment is there. Apart from that, regular headcount increase because of we have geared up for the volume today around 19 lakhs of procurement volume and sales volume because of the erratic rainfalls, all those things, couldn't be able to do, so the buildup, whatever we have done for the headcount, that was one of the reasons. Second is in the transport cost, almost INR 7 crores was increased because of the B2B sales was converted more into B2C. Apart from that, yeah. So basically, I think increments were around 10%-12%, sir. And the additional 6%-7% has come because of Osam and our increase in procurement and manpower for Maharashtra project that we put together. So to understand that in more detail, you are saying that the headcount increase part of it is more towards the procurement and not necessarily towards pushing your value-added products, etc., right? Just to address that. Basically, we have a procurement and sales also a little bit is there, but we are trying to put this whole growth plan together for increment from our stand-alone in India to reach 20 lakh liters. And that cannot be done instantly. So we're building the team out for that in the future. Also advertisement expenses was extra. Yeah. Understood. Understood. Okay. Thank you. Thanks for the response. Thank you. The next question is from the line of Hitendra Pradhan from Maximal Capital. Please go ahead. Hi, sir. I hope I'm audible. My first question is regarding the supply side, the procurement trends. So sir, you highlighted that there has been supply pressure this year. So if you can just elaborate on how the procurement price growth was in, say, 2025, 2024, and how that situation has changed this year, and what are the factors contributing to it? And also, H1 versus H2 seasonality in terms of the supply and in terms of the flush that you are mentioning in one of your slides. What to expect? October hasn't been good, but from next month onwards, what are your expectations? And when do you see the supply situation improving? See, the procurement, you know, see, as expected, it has not come because of excessive rainfall, especially in Southern India. Not only Southern India, entire India. Even in Northern India, so far, normally, after Diwali, the procurement goes up. Prices will come down. But as of now, see, we are not seeing any impact. Now, see, the information what we are getting, the procurement level is not comparatively expected level as compared to last year. So because of that, slightly prices are slightly firming up. That is the main reason, and the trends also will be the same, sir, because also coming months look like it will be the same. Murali will give you the specific numbers of the previous years too. Yeah. Last year, basically, it is INR 34.86 for the price. Now we are at INR 37.47. Another per liter price. Per-liter prices for India. So but. As a consolidated, you see 34.47, 37.29. Sorry, sir. So what are the factors that have contributed to this? This year, what has changed? Only because of... The effect is more because we have unseasonal rains. The summer, anyhow, we don't get much of milk, and when the weather improves, the animals will be able to yield better. But when you say that there's excessive rain, there is more disease, malnutrition, and all that comes from the animal side. On the farmer side, when there is rainfall, which is more, the attention towards growing of his crop becomes more and less care towards the animal husbandry side because he likes to look at his revenue from saying that my animal husbandry side is doing better. Sorry, there's no revenue from my crop, and concentration there is more. When there is a little less of rainfall, also it's the same thing that you have to take care of the animals more than the agriculture because there's no agriculture and then the milking comes. So when there is abundant, also it is a problem which is there, which has come this year. So that is a basic reason. If it was optimal, then it would have been great. The animals would have been producing more as usual. So it is abundant of rain having the health impact on the animals and concentration more on the farming. Got it. Got it. Sir, the second question is related to the EBITDA contribution from your milk sales versus the VAP sales. So you do somewhere around 90-100 Cr per quarter. So how much EBITDA you generate from your milk sales and how much EBITDA you. Yes. Milk would normally be lower, sir, and DAP will be a little higher. I think Murali will give you the number. Milk average EBITDA contribution is around 9.23%, and PAT is around 11.91%. Consolidated. Consolidated. So 11.91. Maybe more of stand-alone. I still understand. So what is your mix, sir? Like paneer and curd are your highest selling products. Curd will normally be our highest selling product in the DRP, sir, followed by others. Murali will give you the specifics of how much is curd and how much is others. Curd contributed around sales of INR 155 crores in this quarter, and paneer is around INR 10 crores. So we have curd margins around 15%. Paneer is around 67% of what is picking up. Can you come again? Paneer was 60%. Paneer is actually lower margin of 67% because we are pushing it into modern trade and online. So we are doing a lot of promos which we attribute to that cause. Otherwise, that will also improve to the 10%-12% margins in the days to come. Got it. And the mix changes from H1 to H2 depending on the seasons or does it? Normally, H1 is always better performing, but this year, unfortunately, it was not there because in terms of rains and coming in, lassi, buttermilk, which are other high-volume products, don't sell. Murali will give you the difference between H1 and H2. H1 and H2 generally, H1 will be higher. H2 we don't have. H2 we are expecting that it will be the similar. Similar lines of last year. But the curd, both products get impacted due to this between H1 and H2? Curd and paneer or curd and paneer is more steadier and? Paneer will be on the growth trajectory because that is not that much weather-related. It's more a market push that we give. Curd is more weather-related in terms of the south of India. If it becomes too much of a winter, people might cut down the consumption or increase. H1 is summers are higher. We have more of curd and buttermilk consumption. H2 in winter, it maintains the status quo. It won't increase rapidly. But it also, as I said, it depends on weather. For us, surprisingly, right now, October to the past four or five days have been warm compared to what we were expecting. So I think, but it will maintain the same numbers of volumes. Marginal growth will be there because of more penetration. Instead of having a substantial growth. Okay. That's all from my side, sir. Thank you. Thank you. I request each participant to ask two questions only. The next question is from the line of Karthik Sundar from Spark Capital. Please go ahead. Hi, sir. Good afternoon. Just want to check on the Orga Feed business. I see there's a moderation in margins from 79%-39%. What contributed to that? Basically, Orga Feed will be predominantly driven by the commodity of maize and the prices of maize. I think that would have contributed the most. Murali will give you the. Basically, the quantity was increased. Earlier, we were doing 4,110. Now we are doing around 4,600. Per month? Per month, which was actually 37% growth in the volume, and revenue also increased by 28% because the margins increased because of the 6% price decrease. Increase in maize. Yeah. Correct. That is the reason. Mainly because of the volume, and the other reason is the changes in the price. Okay. Okay. Sure, sir. Thank you. I'll get back in. Thank you. Ma'am, next question, ma'am. Excuse me. Same concept. Thank you. Thank you. The next question is from the line of Mohit Duggal from Emkay Global. Please go ahead. Yeah. Hi, sir. Sorry, I joined a little late. Just wanted to ask one question that how these recent GST changes are likely to help our value-added portfolio? GST changes, basically, we have reduced the price, and looking at it, will the consumption uptake be significantly larger? I don't think so. It will be moderate improvement. The example I give is nobody is going to be consuming extra in terms of the major product of ghee because whatever is standard consumption at the household level will continue to be the same. But I think it improves because of other products like the flavored milk and which have more of a one-off kind of consumption products. Yes, there will be a little uptake because it will be more competitive with the other refreshments or beverages that are there. But unfortunately for us, I think we'll have to wait and see this impact coming more in the next summers and current winter seasons. Okay. So how much are we trying on formalization? The north market is informal. So are we trying to push products in that region? North for us is significantly only Bihar and Jharkhand where there is still a significant amount of informal and formal battle that goes on, which gives us a lot more scope to improve because the formalization won't be dramatic in nature. But like how it was in the rest of the country maybe a decade or decade and a half ago is where we will be looking at the formalization happening and improvement going further in the northern markets of Bihar and Jharkhand. It is also related to GDP and the overall infrastructure improvement. We are very confident that that will happen because looking at other sectors, they've been doing extremely well in these markets and growing very fast. And we also are confident that we will be able to do the same. Okay. Okay. Thank you. Thank you. The next question is from the line of Resha Mehta from Green Edge Wealth. Please go ahead. Yeah. Thank you for the opportunity. I just have a couple of data questions. So for FY 2025, what would be your revenues from B2B? B2B for us is a very small segment, ma'am. We hardly have. B2B is only the bulk trade that we did in terms of our bulk volume. So I just get you that number. Yeah. Bulk sales basically last year for the full year we have done total SMP value done INR 202 crores of butter and SMP of INR 110. So that's resulting into total value of yeah, that's it. INR 312 crores. For last year. For last year. So this is at a consolidated level, right? Okay. Yeah, consolidated. And current year, it is only INR 86 crores. For the half year, no? Half year. Because first quarter we done INR 57.7 crores. Q2 we done INR 28.3 crores. This is consol, ma'am. Bulk is only in consol. Other areas, we don't do bulk at all. It's all B2C. Right. And in terms of what is your revenue mix from different channels for FY 2025? How much would be through the traditional milkman slash Kirana route? How much through e-com, quick-com? Yeah. So for us, broadly, e-com, quick-com is lower. Murali will give you the specifics, ma'am. We have what we call as agents. We have our own retail parlors, distributors, and others. Murali will give you the specifics. Yeah. Distributor is 49%. Agents is 22%. DRPs, our own retail parlors is 17%. And another hybrid DRP where they will be 2%. Mainly institutional is 1.8%. Our modern trade is only 4.1%, including e-commerce. And Super Stockist is 2.6%. Sorry, can you go a little slow? Sorry. Yeah. Distribution? Distributors is 49 + 22, right? Our own retail parlors is 19 + somewhere around 2, as you said. Yeah. Right? And institutional is? 1.8. Modern trade is 4.8. And e-com is? 4.1. Superstockist. So it's a bigger distributor model, you can say that. Married to the distributor model, ma'am. Yeah. 2.6. Yes. Superstockist is 2.6, and then how about e-com, quick-com? E-com, quick-com is a part of 4.8. It will be very small. So it will hardly be 0.5%. What would be our revenues from different states in FY 2025? If you could just give the percentage terms. Also, what would be our procurement from different states for FY 2025 in% terms? So FY 2025 procurement, I think, will give you statewise. And where would it be? Statewide procurement, madam. AP is 32%. Karnataka is 26%. Tamil Nadu is 26%. Telangana 2%. Maharashtra 14%. And statewise. That's procurement, ma'am. That is procurement, madam. Sales-wise. That's FY 2025, right? Annualized number you're giving, right? Yeah. Yes. Annualized number. Right. And for the revenue? Sales, ma'am, 31% from AP. Karnataka 37%. Tamil Nadu 19%. Telangana 13%. It is for Q2. No, no. I want to ask. You are excluding by. FY 2025, full year, ma'am, or for Q2, ma'am? No, no. For full year. Full year. Yeah. Full year, it will be minor change will be there, madam. That's it. Almost the same proportion, ma'am. I'll get you the numbers later, but it will be almost the same proportion, ma'am. Got it. And the procurement numbers also that you mentioned were for full year FY 2025, right? Across states? Full year FY 2025. That was also for the quarter. Procurement, I give in full year? Full year, yes. Do you want specifics of only quarter also? Yeah, I think. No, no, no. That's for full year, and Maharashtra, we don't have any revenues? No. No sales there yet, ma'am. Okay. And just lastly, I think a clarification. You mentioned that the stand-alone India numbers are expected to grow at 5%-6%. Did I hear that right? Yes, ma'am. For H2? Milk and milk products because of go ahead, ma'am. Come again, ma'am. Why would it be such a low number that we are expecting? 5%-6% India stand-alone? The revenue volumes because, again, we are entering into the winter seasons where the value-added product numbers will come down normally, and that is what we are looking at now. All right. All right. Thank you and all the best. Thank you. Thank you. The next question is from the line of Kiran from Green Investors. Please go ahead. Please go ahead. Hello. Good morning. Thanks for the opportunity. I hope I'm audible. Yes, ma'am. Yes, please continue. Yeah. The first question I would like to ask is EBITDA margins for curd and paneer for Indian stand-alone operations. Yeah. Murali will just give you the EBITDA margins for curd. Curd, I think we just told you it is 15.29%. Paneer is around 6%-7%. But we are hoping that that will increase going forward because now we are in the stage of capturing the market, and more, we are penetrating into the modern trade and e-commerce. That is the reason the margins are a little lower. Coming to the next question I would like to ask, for procured milk, GST refund we had, I think, for FY 2021, FY 2022. Can you give a clarification regarding that? Yeah. The GST refund was basically [for] the industry as a whole. The flavored milk, there was a debate on which category GST should be classified under. So later, I think the industry and most of the independent dairies went to their respective courts. And the courts gave favorable orders that the department was classifying under the. 12% category earlier instead of 12%. 12% category and gave us the relief, and that's where the advantages came. So we have received the refund in this current quarter? Yeah. This quarter, we have not received it. We are yet to receive another. Only Karnataka is pending, which we are expecting around INR 1 crore will come in the subsequent quarters once we won the case. All other quarters are already captured. Yeah. We already got it was captured in the earlier quarters, not in the Q2. So it was captured in Q1? Yeah. Q1. So in P&L, where is it? Just to know. It is in the Rates and Taxes. Okay. In Rates and Taxes, P&L. Thanks for the information. I will back down that. Thank you. Sure. Thank you. The next question is from the line of Madhav from SKP Securities. Please go ahead. Yes. Hi. Thank you for the opportunity. So my question was more on industry standpoint. So I wanted to know what are the dynamics, demand-supply dynamics? I know you have answered that in the current quarter, you witnessed that there was a surge in procurement prices because of unfavorable weather and all these things. But fundamentally, what are your views? Is it that the demand for dairy products is rising? So the demand for milk is rising at a higher rate than supply or the supply increase is higher. So fundamentally, what is your take on this? And secondly, is there state-wise very big divergence? So yeah, on this. If you can say. No big divergence statewide, sir. And the basic broad picture is milk is what we call as B2C, which you can look at it as the consumer products like milk, curd, paneer, all the other products. Then there is a whole segment of what we call as ingredients space, which is basics are powder and fat that you look at. The ingredients can go into a host of industries. Right from you have variants like casein and such things, which can go from pharmaceutical to biscuit factories to other food products. So the balance of what we have is, like you said, rightly supply demand of what we produce locally. If there is a shortage in these production inventories of the other ingredients, sort of prices go up. And the ingredient business needs more volume than they increase the procurement prices. Once there is a surplus in procurement, when there is the ingredient under pressure because they're building up too much of stock, procurement prices then come down. We being majority B2C business, we are able to keep that status quo profitability and go forward. Sometimes we do have a lag where we're not too sure of how much the procurement prices will go up if there is a shortage. And by when will it be stabilizing? And the passing on prices will take that effort of time. And that year we'll see a slight dip. Whereas the procurement prices drop, then we don't normally reduce the selling prices. And that comes into our bottleneck quicker. That is broadly the way the scenario works. Not much of a divergence. Predominant growth is coming from Indian consumers consuming increasing what we call as the per capita consumption. As more people are becoming healthier and aware, being the new protein or looking at it as from a healthier point of view, consumption is increasing. I think we see 4%-5% growth in terms of basic market size increasing. And the procurement is also keeping up in tandem. Okay. So in a normal scenario, so can we assume at what rate you believe the milk procurement prices for you can be expected to increase or decrease or whatever or remain stable in a normal scenario for medium to long term? Let's say medium term. So, long term, sir, if you look at it as a 30-year long-term cycle since we have been in business, I think inflationary milk has been growing at around a 10% inflation on both procurement and sales over a 30-year period. I'm not looking at it as the short term of two to three years. Two to three years, you will have the 4%, 5% inflationary pressure, which comes both from procurement and sales. It's only the timing of when the companies pass on or how do you take it forward. So also the difference is coming as the multiple channels are changing. So that is also another reason we will see more, I think, inflationary pressures coming because for the convenience, customers are willing to pay more. So the costs are going to increase on the sales front. Okay. Understood. And just one last question. So on the e-commerce front, especially quick-commerce front, so there are several companies coming out with they are growing their presence in these modern channels. So what are your plans? As of now, there is no such any big strategy from your end or you are thinking on those fronts? One of the players, if I have to mention, Country Delight. So what are your views currently on this front? So we basically would like to look at quick-commerce and we keep track of them. So we are also on stores like Blinkit and BigBasket and all of them. Those are majority we try to do it with the long-term products. Dairy industry per se has been a sort of a home delivery, right? Majority of the consumer milk earlier was delivered to home. The different kind of a channel may be not very comfortable in terms of order placement. But I think right now the delivery costs are still high. The older channel of delivery costs are a little comparatively more cost-effective than the newer channel. So the subscription business largely is still with the older channel. We are keeping a close watch if the modern channels start coming down in terms of costs and they are becoming more competitive. All of us will also shift to a delivery channel. So we consider quick-commerce more of a delivery channel for milk because it's predominantly subscription and the non-requirement or the surplus requirements come in only very rarely, which can be catered by modern trade, Kirana, and quick-commerce. All right. Okay. Thank you. Thank you. We will take that as a last question for today. 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, please contact SGA, our investor relation advisor. Thank you very much, everyone. Thank you. On behalf of Dodla Dairy Limited as convening this conference, thank you for joining us, and you may now disconnect your line. Thank you.