Ladies and gentlemen, good day, and welcome to LT Foods Limited Q1 FY2025 Earnings Conference Call, hosted by Systematix Institutional Equities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Himanshu Nayyar from Systematix Institutional Equities. Please go ahead, sir. Yeah, thanks, Liba, and good afternoon, everyone. Welcome to LT Foods Q1 FY2025 Call. Would like to welcome the management on the call today. We have with us Mr. Ashwani Arora, MD & CEO, Mr. Sachin Gupta, CFO, and Ms. Monika Chawla Jaggia, VP, Financial Strategy. We start with opening comments on the quarter gone by and the outlook ahead by the management, followed up with the Q&A session post that. So, without further ado, I would like to hand over the call to Monika ma'am. Over to you, ma'am. Thank you, Himanshu. Good evening, everyone, and thank you for joining us on our Q1 Financial Year 2025 Earnings Conference Call. Before we start with the key highlights of the quarter ended 30th June 2024, I would like to highlight that certain statements made or discussed on the conference call today are forward-looking, and a disclaimer to this effect has been included in the results presentation shared with you earlier. Results documents are available on the company's website and have also been uploaded on the stock exchange. A transcript of this call will also be made available on the investors section of the company's website. I would like to begin by taking you through the key highlights of the Quarter One. Our consolidated revenue for Quarter One was up by 17% at INR 2,088 Cr, versus INR 1,789 Cr last year. That is on account of the increased sales from all the segments. Gross profit grew by 16%, and gross profit margin was 30 basis points lower from 33.8% to 33.5% on account of increase in input cost. EBITDA for the quarter one was higher by 15% on year-on-year basis at INR 258 Cr compared to INR 224 Cr last year, and the EBITDA margin stood at around 12.4%. PBT increased by 18% to INR 198 Cr from INR 167 Cr last year. Tax for the quarter increased by 13% to INR 155 Cr compared to INR 137 Cr in the previous year. EPS increased by 11% to INR 4.41 versus INR 3.96 in the quarter one financial year 2024. Cash profit increased by 14% to INR 197 Cr compared to INR 173 Cr in the previous year. Moving on to the key ratios of our balance sheet, the return on capital employed improved to 20.8% from 19.4% in quarter one financial year 2024. Return on equity stood at 17.8%. The debt-to-equity ratio declined from 0.4 times to 0.2 times, and the debt-to-EBITDA ratio for quarter one financial year 2025 is 0.8 versus 1.2 in the previous corresponding quarter. Current ratio has also improved from 2 to 2.3 in this quarter. Because of our continued focus on the working capital optimization, our net, net working capital days have also reduced by 8 days to 202 days, versus 210 days in the last quarter, in the last quarter one FY 2024. So now, we will open the floor for the Q&A. So, this is the financial highlights. Now, you all, you can raise the questions, and we'll be happy to answer the same. Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 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 Abneesh Roy from Nuvama. Please go ahead, sir. Yeah, my first question is on the market share in India. Are you seeing any movement there, given the number three player had acquired a company in the Basmati? So, any impact of that going ahead, you see, and how is the market share versus the other large players in India? So, hi, Abneesh. You know, our market share, you know, this report has yet to come, but, you know, the last report we have got is 30% market share we have in India. Okay. And in terms of your international business, how do you see growth this year? You have taken a lot of proactive steps in those countries, U.S., Europe, et cetera. Could you talk about growth expectation for the balance part of the year, FY 2025? So, you know, as far as this quarter, I'm sure you have gone through the presentation. As a company, we have grown by 15%, and international business has grown roughly 17%. Going forward, we see the positive trend in terms of consumption. Demand side looks solid, and we see, you know, good in terms of demand side. ... Last question more on the cost side. In terms of the Red Sea crisis on shipping and container, how was the impact, and would you say that the worst is behind on that? No, the worst is not yet behind, you know. You know, we have you know seen the Red Sea impact little bit on that, how you know the growth in the margin has impacted. You know, but you know, we are positive that you know this is only a quarter or two quarter thing. The 2025, 2026 is looks very you know positive to us, as you know, the commodity price going to be you know down in crop 2024. So, we see you know improvement of margin in 2025, 2026. Okay, understood. That's all from my side. Thank you. Thank you. Thank you, sir. Next question is from the line of Amarnath Bhakat from Ministry of Finance of Oman. Please, please go ahead, sir. Yeah, hi. Am I audible? Yes, Aman, yes. Good evening. Yeah, good evening. Just two set of questions. First of all, this recent announcement or potential announcement from the government relating to this lifting of the export ban on the rice, how that will have an impact on your business? As far as you know, the lowering down the MEP, the industry will definitely gain. As far as LT is concerned, LT, you know, has not much impact from this because, you know, we are exporting on a higher value. The market will open up with the lower MEP, definitely, partly LT will also get benefited. No, I'm trying to say, I'm saying, for example, when there was a ban on export of Non-Basmati rice, I'm sure part of that demand is being made through the Basmati rice, because Non-Basmati rice was not available at the exported country. Now, say if that export ban open up, will it have or impact your selling of Basmati rice in the exported country? So, you know, if you see the Basmati market, you know, they don't cannibalize with Non-Basmati to Basmati. Non-Basmati is more Africa and, you know, the country with a lower, you know, income. But as far as, you know, Basmati is concerned, that's mainly consumed in Middle East, Europe and America, and that don't cannibalize with the Non-Basmati, and therefore, you know, will not have any impact on the Basmati growth. I hope you know. Okay. Yeah. But no, that was, that was a clarification required. Yeah. So, you are saying these two are not related, so if there is known availability of Non-Basmati rice, that doesn't going to impact on your Basmati rice consumption on the same country? Yeah, yeah, yeah, yeah. And on the top of that, you know, India is not supplying, but someone else is supplying, so the demand is being met. Okay. The second is, one of your competitor is struggling, as you know, in the Saudi market, which is one of the biggest Basmati exporting market for from the India. Now, during, especially in the last 1-2 years, so how you as an LT Foods is ensuring your presence in that big market, especially in the last 2 years, under the challenging situation, or you are leaving that country? So as far as LT is concerned, LT has a very strong market in India, U.S.A., Europe and Far East. At least, contribute roughly 8. But as far as Saudi is concerned, we have appointed, you know, our partner there, distributor, and stick for that market. Yeah, just... Sorry, I'm going a little deeper on this particular. As we all know that Saudi is a very big market. Yeah. There's an issue happened last two years, that the local players with their branded Basmati, of course, I don't know from where they're getting it, but they've taken away many of our exported volume, which was used to go from India, and one of your nearest competitor was major player, and they lost a big market share there. So, I'm just trying to understand, is there a potential market for you there now? Because somebody else has vacated that place and the demand for the Basmati rice in that particular area is anyway very strong. Yeah. So, Aman, you know, Saudi is a 1.2- million- ton market that import Basmati, and there are three, four, you know, very strong players there. Three are companies, which are Saudi-based companies, and the fourth, you know, of course, you know, you said the our nearest competitor. So, you know, I don't want to comment more, but, you know, I will say, you know, there must be cannibalization happening, and the market is growing. As far as LT is concerned, LT has appointed a distributor, so it will take time to, you know, strengthen our footprint there in Saudi Arabia. But that means you are looking to that market as well, right? Oh, definitely. That's, that's our focus. That's our focus. The Middle East is our focus, and that's a 3- million- ton market. As I said, you know, we have 8% of our revenue comes from Middle East, and that's our focus, and we are going to focus on that market, and we are focusing on that market. Okay. Can I ask one more? I don't know. What with respect to the strategy for the domestic part of it, you know, especially the value-added items which you are now producing, and also going strength to strength with respect to that. If you can really tell us how you are thinking strategically to improve that part domestically within India? Not really the rice, but the value-added product of the rice. How you see the potential of that market within India for you? Because your brand is quite recognized well-known brand, but somehow the revenue growth is not really reflecting the real potential of that food in the Indian market. Thank you. So, first of all, you know, you know, you asked about our strategy. So, we have a strategy for the core business, which is Basmati, and the strategy for the value-added product, you know. So as far as you know, on the core business is concerned, you know, we are very optimistic about India demand story. And, you know, we have grown 14%, in this quarter, and, we see that, you know, this demand will continue. And we have a very clear strategy, strong strategy of, acquiring consumer and, you know, our distribution, strengthening our distribution. That part, you know, doing well. On the value-added thing, you know, we have launched a Biryani Kit, that's doing very well. Cuppa has not picked up well, but we are pretty optimistic on the you know the portfolio we have defined for you know India market for value-added. And we see you know in the coming times optimistic. As far as our food business is concerned, that in America, that is doing very well. You know RTE, we have filled up with our capacity, and we are doubling our capacity in this year. Thank you, sir. Thank you very much. I will come back to the queue. Thank you. Thank you very much. The next question is from the line of Ankur Arora from Magma Ventures. Please go ahead, sir. Hi. I joined a little late, so if you have answered the question already, sorry about that. Wanted to check on the rice prices. How much cost increase would have happened this quarter because of, on account of freight charges? In terms of freight charges, how much is the impact, you said, you asked? Yes. Yes. So, this quarter, there is an impact of almost 1.5%, if you compare it with the Q1 of the last year. So last year, cost as a percentage to revenue has increased by 1.5%. What is the number quarter-on-quarter? It was 5.1. Currently, it is 6.6. What is the impact quarter-over-quarter compared to fourth quarter? Compared to the immediate preceding quarter, you are talking about? Yeah. Yeah, yeah. 4.8. 5- it was 5%, so it is 1.6%, from the immediate preceding quarter after. Okay. Okay. Do you believe that this price impact will continue for at least 1, 2 more quarter? Yeah, that's what we are thinking, is that will have. So, the guidance we are getting from shipping line is that, you know, it will have an impact for 1 or 2 quarters more. How easy or difficult it has been to pass on some bit of that impact to end customer? You know, because this is temporary and, as strategically, we don't want to pass it on to the, to the customer. Okay. In some part we have done it, in some part we have not done it. All right. Thank you. The current average, the cost which we have incurred in the current quarter, that is the first quarter, and the current rates are also similar to that, or it has gone up even higher than that? Can you repeat that, please? I said the cost which we incurred in the first quarter, 5-point whatever%, and the current rate in July, are they similar to what we in the last quarter, or it has gone up even higher? July will be little higher. July will be little higher. A little higher. Okay. All right. Thank you. Thank you so much. Thank you. The next question is from Hitesh Goel, from Riddhish Avid Advisors. Please go ahead, sir. Thanks for taking my question, sir. First question is on, basically, the Ready-to-Eat business. So basically, I know, you are talking about a 35%-40% growth there. Can you detail us in terms of new product that you tried to, you know, launch in that segment? You know, there was talk about spices that you'll get into. So, you can, you know, tell us something about, the new launches there? ... Yeah, so in, you know, the biggest revenue comes from America, and we have a microwave rice there. As I just said that, you know, we are doubling our capacity there. We have more demand than the capacity we have. In India, because this is, you know, not evolving as a, you know, Ready-to-Eat market on the shelf. So we are, you know, we have introduced Biryani Kit. That's small, but, you know, getting good traction. And we have some, you know, other product in the pipeline, which is more on Ready-to-Cook, so that will be rolled out in a, you know, coming time. As far as our this rice snacks, the roasted rice snacks, Kari Kari, that has also, you know, picked up. So, we have almost doubled the sale in this quarter than, you know, last quarter. Yeah. So, any plans to get into... You talked about ready to eat. Any plans to get into, like, MDH kind of domain, like, rajma, pulao rice and all that? So, no, as I said, you know, Ready-to-Eat market is more the western world. There we are going. We are introducing, you know, different flavor. As far as India is concerned, that is more we are focusing on Ready-to-Cook. Okay. Okay. My second question is on the U.K. facility. So, you talked about, you know, investment you made, that is because of duty benefit that you'll get. Can you talk, talk us about what is the investment, because the rice will be procured here, it's only a storage facility? Or, you know, can you talk about that, and the additional revenue that is coming in, that will add to the Europe revenue, or this is just a substitution of the revenue? So, you know, first, you know, let me talk about U.K. U.K. is a $1- billion market, both, you know, the dry rice and Ready-to-Eat market. And, we have set up this facility, which is, you know, all processing and packaging facility. So, we are expecting, in this year, $40 million revenue. So, we have got, you know, good account with that. And, as far as revenue is concerned, can you Sachin? For CapEx, there is this, we have invested in the CapEx of, that is around GBP 65 million. That is the capital investments which we have made, in this facility. And this will create a revenue, as Ashwiniji has, creating a revenue of... Question is distribution of revenue. It will be merged with your..? Actually, yes, it is a separate entity, so it won't be merged. So, we have a European facility, that is separate. We have a London facility, that is separate. So, there are two separate entities, and this is a holding company that is in the U.S. So, the U.S. will be doing the consolidation. No, no, that's why I'm not talking about accounting. I'm saying that your Europe revenue was INR 1,500 Cr last year in FY 2024. So, will- This will add up. This will be the new revenue. So, this will help you gain market share. That's what I want to ask. Yeah, yeah. Yeah. Okay. Thank you, sir. Thank you very much. The next question is from the line of Damodaran from Acuitas Capital. Please go ahead, sir. Hello? Yes, Damodaran. Yeah. Thank you for the opportunity and congratulations on a good set of numbers. So, I have two questions. One is on the long-term EBITDA margins. So, if you look at, if I look at your long-term EBITDA margins for Basmati rice segment specifically, that's always ranged between 12%-13%. Now, if I compare that with your competition, that has been much more volatile, and a few players have actually faced losses and gone bankrupt as well. So, can you give a reason as to why your margins are much more, I mean, much less volatile, or you have managed it much better versus your competition? So yeah, that is the first question. And I'll ask the second question later. Okay. Thank you, Damodaran. So first of all, you know, it's a business model. So as far as LT is concerned, this is an asset-light activity led by our very strong brand. So that's why, you know, the stable margins we have. We have a global footprint. Right, sir, but if I'm correct, I mean, and again, I think even your competition has similar kind of global footprint, and as their share of branded sales is also around what we have. So, what is our competitive advantage there? That's what I'm saying. I will repeat, you know, so, so I, I don't want to comment on the competition. But, as far as LT is concerned, you know, we have a global footprint, very strong in U.S.A., Europe, and of course, in India, and, very diverse, you know, business, in terms of geography. And all is led by brand. That's all the stability in the market is concerned. That's the power of the brand, I would say. Okay. So, I mean, I would be right in assuming that, your... I mean, the kind of geographical mix that you have, it must, I mean, it's much more diverse and different versus your competition, and that allows you to, you know, price your product better and manage margins better. Yes. Is that correct? ... Yeah, that's it. I will say that, that is bringing the stability in the margin and improving along, along with that. Sure. Thanks. Just one question on the recently announced distributor tie-up in Saudi Arabia. I know it's early days, but, can you give some qualitative color as to what kind of coverage does this allow us in terms of retail stores in Saudi Arabia, and, what plans do you have there? Excuse me for a minute. Good. Yeah, sorry, I was not understood your question. Yeah. So the question was on the- We are a billion-dollar company, you know, very good distribution across all the, like, two structures, general trade, very good distribution, strong distribution. The listed companies. Okay. Okay. Sure, sir. That's, that's all from my side, and thanks for the opportunity. Thank you very much. The next question is from the line of Vipul Kumar Anupchand Shah from Sumangal Investment. Please go ahead, sir. Hello? Hello. Hello? Vipul Kumar Anupchand Shah. Hello, am I audible? Yes, yes, very much. So, sir, can you give me volume and revenue for domestic Indian business, U.S. business and Europe separate, means volume in tonnage and revenue? Yeah, we can. That is in the presentation. If you see the breakup and otherwise, you know, we can get back to you. Sir, I think it is not part of the presentation, so I think last quarter also, I pointed out. So, it will be better, I request you to make this as a part of your presentation, if it is possible, please. Okay, sure. Sir, my second question is, have we received insurance money? Means have we given the bank guarantee? So what is the status now? That's good news. You know, we have it. You know, we have the High Court has given a judgment that, you know, we should get our money against, you know, half bank guarantee and half without bank guarantee. And then the insurance company went to Supreme Court, and Supreme Court also rejected their appeal. So Supreme Court has said that, you know, within four weeks, we should get our money with, you know, bank guarantee. So that's good news. And we will get our money in four weeks' time. So we should be getting around INR 160 Cr, right, sir? Plus interest. Okay. And sir, when do we expect our, this Ready-to-Eat and Ready-to-Cook business? You know, you know, this is the, you know, on this, the order, we are still waiting, but the verbal order, based on verbal order, you know, I am telling you, but still we have to, you know, file in the stock exchange, then we will get the, written order from the Supreme Court, but that's what has been verbalized. Sir, why our market share in Saudi Arabia is so low when it's such a huge market of INR 30,000 Cr? Means why we previously, means it was a deliberate decision not to enter that market previously, means what is the thinking behind this? Right. Previously, you know, we had chosen our, you know, the business area, where we thought, you know, we are strong, and we have chosen India and Europe, we have done, sorry, U.S.A., we have done acquisitions. In Europe, we have set up that is, to our mind, has better stability in the business and margin. But having said that, you know, now our next focus is Middle East, and, we are focusing on that, and we are optimistic that, you know, the next, growth will come from there. That the next, you know, valuation and the growth will come from there. We'll be putting up any plant there, or it will be supplied from India only? No, it will be supplied from India, as 80% Basmati coating, and that will be supplied from India, but that's a consumption market and we are focusing on that. And sir, lastly, on your U.K. investment, so that will cater only to U.K. market or it will cater to the entire Europe? So we have, you know, we have divided the continental Europe and U.K., which is after Brexit. And the U.K. will be serviced from U.K. facility, and rest of the, we call it continental Europe, that will be serviced from... Rotterdam. Rotterdam facility. And sir, my last question: When do you expect this Ready-to-Eat and Ready-to-Cook business in India to break even? So how much time will it take? ... So next year we are 2025th, 2026. What do you say, Sachin? It will be breaking in in 2026-2027. So, on a revenue base of INR 400 Cr, it will be, and we are projecting this revenue to be in 2026-2027. Mm-hmm. Okay, sir. Thank you very much, and all the best for the future. Thank you. Thank you. Thank you very much. The next question is from the line of Resham Jain from DSP Asset Managers. Please go ahead, sir. Yeah, hi. Good afternoon, sir. Sir, I have two, three questions. So, first one is, if I look at the profit from associates, that is largely Golden Star, if I am correct. Yes. And if I look at last few quarters, 1Q last year was very good. We had INR 14 odd Cr of profit, but last three, four quarters, it is now steady at close to INR 11-INR 12 Cr. This quarter is just INR 10.6. So, how are you thinking about the this Golden Star, the Jasmine rice business? So, afternoon, Resham. You know, that was, you know, that quarter was little exceptional, and we are confident whatever, INR 11 Cr per quarter, that is kind of we see it growing from there. Okay. Understood, sir. Hello? Yeah, yeah. Hello, am I audible? There's a disturbance in your background. Okay. Is it audible now? Yes, yes, Resham, you can, you can continue, please. Okay. Sorry. So, the other related question is, sir, the Jasmine rice business, like, is a good business other than U.S. as well. So, is this company planning to take this Jasmine rice to other parts because it already has a good distribution network, let's say, in other parts of the country, like in Europe and India and all? Yes, that's the plan. You know, we have already started one or two country. Like Israel, we have started Daawat Jasmine there, and now we are rolling it to the other part of the world. That's it. That's the next, you know, in the rice category, that's the next new variety. We are taking it to the rest of the world, in Middle East also. Okay. Understood. Okay. So, the second question is, with respect to the CapEx plan. Resham. Sorry, hello? Next month we are launching Daawat Jasmine rice in India also. Oh, okay. Great news. Yeah. So, the second question is, with respect to the CapEx plans, is there any CapEx this year, other than the U.K., which you have, I think, already commissioned, so no more CapEx in U.K., but anywhere else? So, the two, the CapEx is, one is we are doubling our capacity in U.S.A. for our, you know, this, retort business, ready to eat business. So, that will be roughly INR 87 Cr, $10 million we are investing there to capacity. And the second is U.K. So, India is more of, kind of maintenance and little bit growth, you know. Okay. So, sir, just the kind of deleveraging which we have done over the last few years, four years, this year also, given that you don't have material CapEx, should one assume that the debt, whatever we have, can further come down in FY 2025? That's what we are trying to target. Next year, you know, like throughout 2024, we are expecting also the commodity prices to come down. And, you know, that will also add into, you know, releasing the working capital. So, we are positive on that. Okay. So, sir, given that, the profit trend rate, which we have currently, plus the inventory valuation prices, which will come down, so working capital release also will happen. So, do you expect that next year, there is a possibility that we can become a net cash company? Yeah, Resham, yes. But, as you know, there is a payment of the Golden Star that we have to make. So, in the next June 2025, so there will be a outflow for the Golden Star. Considering this is the year on the basis of which the valuation will be decided, so there will be outflow. Apart from that, yes, on... If, that if we not taking it through, then, of course, that will be there. Yeah. Okay, because you will get insurance payment also on the other side. I was just thinking, overall, there is a possibility of becoming the net cash company next year. Yes. Okay. Wish you all the best, sir. Thank you. Thank you. [Foreign language] Thank you very much. The next question is from the line of Amit Doshi from Care PMS. Please go ahead, sir. Thank you. So, regarding this, appointment of distributor in Saudi Arabia, so I believe, I'm assuming this is different from what the arrangement that we have with SALIC. And, in terms of, it, will it be distributed under our own brand? And considering that, Basmati market is a very, you know, premium market, or the realizations are considered to be quite high, so would you believe this can have the potential to improve your overall margin as well? You know, SALIC is a— First of all, let me start from there. SALIC is a, you know, investing arm of, PIF. So, you know, this is a distributor we have appointed. As far as price points are concerned, you know, so globally, every part of the market has all premium price point, mid-price point, and, you know, the bottom price point. So we will be, you know, launching in all price points. And, as far as, you know, the margin expansion is concerned, with the scale, with the revenue growth, definitely, you know, overall, it should help, in improving margin. In a medium term, first year, one and a half year will be kind of investment in that market also, in terms of acquiring consumer and setting up distribution. Okay. Okay, okay. Also, I read your comment in the press release regarding this premiumization. So, can you give slightly more color in terms of what kind of premiumization that we did do? And, of course, I understand that this quarter got impacted because of the higher freight cost, but had that not been the case, how would this premiumization would have helped us in terms of our margin? So, you know, we have given the guidance also that, you know, where our margin expansion will come. So, we said, you know, 0.5-0.7 will come from premiumization. And when I say premiumization means selling, you know, the higher gross margin product and, you know, that is year-on-year getting strengthened. And we are optimistic that, you know, that the investment behind that is working and will keep on working in a medium to medium term- Mm-hmm. for the market to grow. Okay, okay. And, and the freight charges, if I'm... I, I'm not sure if I heard it correctly, the impact was 1.6% of the sales, right? Higher compared to year-on-year. Yes, you are right. That was 1.5% from the last year. Okay. Okay, okay. This EU thing, you know, sorry, the U.K. investments that we've done, you know, how... I mean, you know, in Europe also, we have the facility from quite some long time. How much bullish you believe that, you know, UK has more potential? Because EU, EU has not been a very strong contributor considering the time that we have, and I am sure there also we have a lot of ties with a lot of retailers in the Europe. So, so how do you see these two markets different and the future potential of it? As far as Basmati is concerned, of course, you know, U.K. is a bigger market than EU. And, you know, after Brexit, you know, you can't service your business from the Rotterdam facility. That's how, you know, we have opened up this new facility. And this is adding up to, you know, the new businesses for us also. We have got a very good new accounts. Okay. And I just noticed in the presentation that you've launched Jasmine rice even under the Royal brand. So, being in the U.S., Golden Star as well as Royal, so I'm presuming, you know, just trying to understand the strategy in terms of are we planning to kind of phase out the Golden Star brand? Or, I mean, you know, probably increase more of weight towards the Royal brand, or just to understand the U.S. strategy. No, no. You know, Golden Star is the second largest brand. And if you've seen dry rice, you know, we are not selling Royal Jasmine, so that is in the Golden Star or, you know, 817 we are selling. But what you are seeing in the presentation is the Ready-to-Eat rice, you know, the retort rice. So that's a cooked rice where, you know, the Royal brand strategy is to, you know, give every variety of rice in a cooked form, you know. That's a microwave rice. Okay. Okay, okay. Yeah, RTH. Okay. Thank you. Thank you. Yeah. Thank you very much. The next question is from the line of Abhyuday Jhunjhunwala from JBS Securities. Please go ahead, sir. Good evening, Mr. Arora. Thank you for taking my question. I have two quick questions for you. Firstly, I just wanted to understand how much manufacturing capacity is devoted to Basmati rice and Jasmine rice, respectively. And secondly, if you could please provide the margins that you get internationally and domestically for Jasmine and Basmati. You know, your voice is not getting clear. I'm so sorry about that, Mr. Arora. Is it better now? Yeah, it's better now, but sometimes, you know, it gets breaks and, yeah. Okay, I'll speak, I'll speak a little slowly. Hopefully it'll be clear. I had two quick questions. Firstly, I wanted to know what part of the manufacturing capacity displayed on your annual report for 2023 is devoted to Basmati and Jasmine rice respectively? And secondly, I wanted to understand what the margins for Basmati and Jasmine rice separately would be, internationally and domestically. ... So I will double check, but mostly an annual report is Basmati capacity. Jasmine rice is- I see. you know, almost all outsourced. Mm-hmm. Yeah. Okay. As far as margin is concerned, let me come back. So, the margins are more or less the same similar margins in the Basmati as well as in the Jasmine rice category. So we are- I see. 30% EBITDA margin. Okay, thank you. This would be domestically and internationally for Basmati? Yes, yes. So this is for the, I'm talking about the total EBITDA margin. Okay, got it. And the manufacturing capacity you mentioned for Basmati, it's mentioned on the annual report, but for Jasmine rice, if you could please fill me in on your, on how much would your sales capacity be, if not manufacturing? So sales capacity, we sell roughly, you know, 70,000 tons. Mm-hmm. As far as, you know, the manufacturing, that is all outsourced and... Mm-hmm. You know, we buy from the Thailand millers. Okay. Got it. They manufacture and pack for us. Mm-hmm. Okay, got it. Thank you so much for your time, Mr. Arora. Thank you. Thank you. Thank you very much. The next question is from the line of Esha Shah from Nizar Enterprise. Please go ahead. Hello, am I audible? Yes, Esha, yes. Thank you for the opportunity. I have two questions. First one being, sir, in the investor presentation, I see that we have mentioned about regional specialty rice. So, I would like to know, how big is the market over there, and how are we doing in that segment? So regional specialty, you know, is a, I would say, five times bigger than Basmati rice in India. So every region- Sorry, sir, how many? How many times? 5 times bigger than Basmati. Okay. And, you know, every region has their own specialty, like south has Sona Masoori, you know, and east has and western has. So, we are seeing good, you know, entry into that market. You know, we are selling roughly, you know, 20 tons-25,000 tons. And now we are strengthening our supply chain for this regional rice, and we are optimistic, you know, that will be a good add-on in our portfolio. Okay. So, sir, how much margin approx. would be on this? Would it be similar to the Basmati rice? So, in terms of EBITDA overall percentage margin, it will be much lower, like it will be, you know, 6, 6% EBITDA margin. But in terms of ROIC, you know, it has a, you know... Similarly, the formula we have set for ourselves that, you know, anything less than 20% ROIC, we will not contribute here. But, when it gets scaled, you know, that will further overall improve the margin. Okay, sir. Sir, second question being, in organic segment, how well are we placed, when it comes to non-rice products like, pulses, lentils, oils? How are we doing over there? So, we are not neither into oil or pulses. Our focus is to, you know, grow our add-on rice, like regional rice, as, you know, the category has a good potential growth, and now we are adding the value added of rice. So that's the plan. Not any oil or... No, in the organic segment? In the organic segment, we have a complete portfolio, Okay. -pepper, and that- Yeah. We are soon launching in India market. Okay, you will... So, how good of a market size do you see over here? The Nielsen doesn't cover that, but estimate is roughly, you know, INR 700 Cr-INR 800 Cr organic to the complete portfolio as a market. Okay. So, INR 700 Cr-INR 800 Cr of revenue, we look over here. That's a good estimate. We don't have any data, as Nielsen doesn't cover that. Understood. Understood. Sir, in Ready-to-Eat and Ready-to-Cook, do we plan to enter into products other than rice? We, other than rice, at the moment, as I said, you know, you know, we have Basmati, we are adding, In the ready- -regionals. Huh? In the ready, in the food space. Okay. In the food space, we would, for the time being, we'd like to maintain, stay in the rice segment only. Yeah. So, rice- And only around that- Yeah. You know, because as an equity has a rice equity. Okay. The first extension is we wanted to have, and LT Foods is around rice, you know? You know. Understood. Yeah. In future, do we plan to enter into the millet segment? Not yet thought, but we are, you know, for the last two months we are evaluating that, you know. Okay. Okay. Thank you so much, sir. That's all from my side. Thank you very much. The next question is from the line of Deepak Mandhana from Avighna Investments. Please go ahead. Hello? Hi, [Deepak]. Am I audible? Yes, Deepak. ... Yeah, just two questions from one side, my side. One, on the international side, the facility that you guys are opening up in U.K., that would be taking care of all the categories of rice, Basmati, Brown Rice and Parboiled Rice. Is it? Yes. Yes. What would be the EBITDA margin percentage that you would have set as a minimum benchmark from that unit? So, you know, you know, standalone of that company will be around 7%, 6%-7% EBITDA margin. But, you know, when if it is sourcing from India, from our own company, then end-to-end will be, you know. Will be in the similar range as that of, you know, 12%-13%. Okay. Just, just as a follow-up on that, if India and U.K. are contemplating a treaty, so what would be the impact of it? Because considering rice is also a part of that discussion. So, if there is-- I think currently there's an export duty, with... There's import duty which U.K. puts upon on the export of rice from India. So, would that unit be treated completely as a U.K. entity by itself and it would not have any repercussions, or would there be any repercussions on that entity? So, that will be if that comes. That's also we are hearing a speculation, you know, the rice duty may go. If that comes, you know, that's a positive to us, you know? No, but my point is, then your investment that you have made in U.K., because it would- We are factored in, that, you know, thing in our, you know, business. So that's a positive, and that's what I'm saying. Okay. And, just on the domestic side, what would be your current market share in the domestic market today? The last report we got is 30% market share, you know, we have. Okay. So, in terms of competition, are we, what do you think? Are we second or third today in the domestic market? And how do we- In India, you know, if you talk about the consolidated India, yes, we are second place, but you know, as a region-wise, in the western part, Daawat is a number one leading brand. But in some parts we are weak, in some part we are leading. Yeah. Can you also share some sort of strategy in terms of marketing ploy that you're using to gain a further share in the domestic market? That's a, you know, like, 360-degree. Our marketing is doing, first acquiring the consumer with a, with a below the line, be it, you know, the mainline media. So, you know, you know, last quarter we have done and that we are very proud of, that, you know, Daawat has created an asset of Biryani Day. And we're very proud that last 7 July, we have, you know, the, the property is getting much attraction, and everyone is joining to, you know, do that. And, yeah. Okay. And just a suggestion, sir. I think it would be prudent that if you could report geographical segments in your financial results, that would be very easy for us to get the numbers in relation to export and domestic. So, we can look into it. In fact, on the yearly basis, the numbers are there because every geography, the financial numbers are there. So, each of, each separate entity, so the numbers are being given on the yearly basis in the annual report. Okay. Okay. Just last thing, I think you were saying that, because of treaty, it would be lucrative for you to export to U.K., right? No. I said, you know, if it happens, FTA, that is beneficial to us. No, in a sense now I am asking because once the company is incorporated in U.K., that would become a domestic company in terms of, domicile. Yeah. Yeah. So the advantage would remain with the countries which are outside that country. No, no, no. The benefit will be to the, you know, if India, you know, export Basmati rice to, you know, U.K., so that will be... That the speculation is going on, is that, you know, that will have duty advantage, you know, against, the other part of the world, maybe Pakistan. Yeah. No, my only point was in that case, the investment that we are considering, wouldn't it be, it would actually be nullified in terms of our margin that we are- No, no, no. thinking of getting from that country. No, I cannot get you in detail, but, you know, I said, you know, this is for the last two years, and we have factored in, if, you know, the U.K. give relief in the import duty, it will not have impact on our business. That is already factored in. Okay. Yeah. Thank you. Thank you very much. The next question is from the line of Shivam Saxena from ICICI Bank. Please go ahead, sir. Yeah, thanks for the opportunity. Just wanted to understand, as there's a lot of stocks in, at this time, rice, growth has been good, crop has been good, so how this will impact the company? So there will be price, can decline. So how can this impact the company? ... It will not have a, you know, this is the, you know, already the impact has come. The prices of commodity have came down. And, you know, the new crop is coming in September, October. So, we are having some impact, but that has been, you know, came in the first quarter, whatever, you know, the time. Understood. Do you take price cuts? What happens if such a situation is happening, so do you pass on this to customer service? Like the price decrease or increase? Yeah, yeah, yeah. In some, like in food service, we have to pass on, so, we have passed on. So overall it is negative or positive? I mean, how should... Or neutral. How should we see it if the crop yield is good or our crop prices are going down, the crop, crops have done well? How is it? You mean to say crop 2023, the prices have come down, is it a negative for us or positive for us? That's what your question is? Yeah, right. Right. So I, I will say neutral, you know, because, you know, we were not fully covered and, you know, we have hedged 30% later on, so it is balanced. And in some part, you know, like in India, we have to pass on the, in the food service, the price decrease. So overall, I will say, you know, it, it may have impacted our margin by, you know, 0.5% or 0.75% down in this quarter. Okay, thank you. Thank you very much. The next question is from the line of Abhishek Maheshwari from Skyridge Wealth Management. Please go ahead, sir. Yes, thank you for taking my question. So, just wanted to know, you know, the procurement cost. I know you have already mentioned about this, but, are we going to see some more margin impact in coming quarters? Because, even if freight cost increase in, procurement cost is coming down, right? So there should be a, you know, compensatory impact, no? So should margins be stable, or are we expecting some downfall still? You know, we have already covered now, you know, almost, you know, the full crop, like 90% of the crop is hedged. So any Red Sea impact from here on will have an impact on the margin, you know? Yeah. Okay, because I think July, August, freight cost is a little bigger. I mean, sorry, June, July is a little bigger. So, we are still seeing some actual impact on freight, yeah, see? So July, which part of like, you know, some part of the world we have taken a price increase, some part of the world we have not taken. So we are optimistic that second quarter will be very similar to quarter first. If, you know, have that impact, that will be little bit in quarter third. But having said that, you know, we are very optimistic on year 2025, 2026, as you know, the prices of commodity will also come down and there will be a stability in the freight cost also. Great. Good to hear that. One last thing, any view on the upcoming Kharif season? So, you know, whatever the forecast we are getting, the crop is, sowing is more, 10%-15% against last year. And, the monsoon is good, so, everything so far is looking good, and, we are expecting more crop, lesser price. Great. Very good to hear that. So, thank you and all the best. Thank you. Thank you very much. Ladies and gentlemen, due to time constraint, that was the last question for today's call. Thanks to everyone, and, looking to see, to hear from you in the next quarter. Thank you. On behalf of Systematix Institutional Equities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.