Please note that this conference is being recorded. I now hand the conference over to Mr. Anoop Poojari from CDR India. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and thank you for joining us on Varun Beverages Q1 CY 2024 earnings conference call. We have with us Mr. Ravi Jaipuria, Chairman of the company, Mr. Varun Jaipuria, Executive Vice Chairman and Whole Time Director, and Mr. Raj Gandhi, Group CFO and Whole Time Director of the company. We'll initiate the call with opening remarks from the management, following which we'll have the forum open for a question and answer session. Before we begin, I would like to point out that some statements made in today's call may be forward-looking in nature, and a disclaimer to this effect has been included in the results presentation shared with you earlier. I will now request Mr. Ravi Jaipuria to make his opening remarks. Good afternoon, everyone, and thank you for joining us on our earnings conference call. I hope all of you had the opportunity to go through our results presentation that provides details of our operations and financial performance for the first quarter, ended 31 March 2024. In spite of the delay in Holi festival by 17 days, resulted in delayed seasonality cycle, we are pleased to report a reasonably strong overall operational and financial performance in the first quarter of the year. We achieved a consolidated sales revenue growth of 10.9%, with a breakup of volume growth of 7.2% and net realization per case growth of 3.5% in Q1, reflecting an improved product mix in India and higher contribution from international markets overall. EBITDA increased by 23.9% year-on-year, and PAT increased by 24.9%. Further, our sustainability efforts, including the focus on reducing sugar content, removal of corrugated pads in packaging, and lightweighting of packaging materials, have started showing results in increase in gross margins. During last quarter, we also established our sustainability report in accordance with the GRI reporting standards. We are committed to transparency and accountability in our sustainability reporting practices. We believe that using the GRI standards allows us to provide comprehensive and comparative information to our stakeholders. To fulfill our growth commitment in our core market in India, we commenced three greenfield facilities located in Supa, Gorakhpur, Uttar Pradesh, and Khordha, Odisha. This expansion is designed to meet the rising demand for beverages in India and support our long-term growth trajectory. Our greenfield plant in DRC is expected to start by the next quarter. A significant highlight of the quarter was successful completion of strategic acquisition of the beverage company, BevCo, in South Africa. This move has notably expanded our footprint and fortified our presence across several dynamic markets in the African region. Furthermore, Varun Beverages Morocco, our wholly owned subsidiary, has entered into an exclusive snacks manufacturing agreement to manufacture and market and package Cheetos in Morocco by May 2025. This agreement complements our existing distribution of PepsiCo snack portfolio, making another step forward in our strong, symbolic partnership. In a nutshell, we have additionally fueled three growth engines, which will gradually and consistently contribute to revenue and profitability growth in the company. First growth engine is South Africa's combined territory with Lesotho, Eswatini, Namibia, Botswana, Mozambique and Madagascar. Second growth engine is entry into new territory of DRC, where PepsiCo is not present at all as of now. The commercial production here from our new state-of-the-art greenfield plant is expected to start from the next quarter. The third growth engine is entry into snack foods production by March-May 2025 in Morocco. I would now like now invite Mr. Gandhi to provide the highlights of the operational and financial performance. Thank you. Thank you, Mr. Chairman. Good afternoon, and a warm welcome to everyone joining us today. Let me provide an overview of the financial performance for the quarter ended 31 March 2024. Revenue from operations adjusted for excise, GST, saw a healthy 10.9% year-on-year increase to the level of INR 43,173 million in Q1 of calendar year 2024. Consolidated sales revenue reported a growth of 7.2%, reaching 240.2 million cases in Q1 of 2024. This increases with increases of 4.4% and 21.9% in India and international markets respectively. During Q1 of the calendar year 2024, the consolidated net realization per case rose by 3.5% to the level of INR 179.7, supported by an improved product mix in India and a higher contribution from international markets, which command higher realization per case. CSD constituted 71%, juice 7%, and packaged drinking water 22% of the total sales volume in the quarter one of FY 2024. Our gross margins improved significantly, rising by 385 basis points to the level of 56.3% from the earlier level of 52.4%. This increase was largely driven by our focus on reducing sugar content and the light weighting packaging material, incidentally, also meeting our sustainability initiatives, along with the benefits from reduced PET prices, which contributed to this improvement. Approximately 46% of our consolidated sales volumes come from low sugar or no sugar products, reflecting our commitment to meeting the evolving preferences of all consumers. This strategic focus now only aligns with the consumer trends, but also optimizes our cost structure by reducing sugar costs and enhancing overall efficiency. These efforts have had a tangible impact on our financial performance, with EBITDA increasing by 23.9% to the level of INR 9,887.6 million year-on-year, and the EBITDA margin improving by 240 basis points to the level of 22.9% in quarter one of 2024. The above improvement of 240 basis points is in spite of rise in fixed costs associated with acquisition of the new territories and commissioning of new greenfield plants for the season. As these new capacities begin to contribute to our performance, we expect these costs to be better absorbed, enhancing our financial efficiency moving forward. Depreciation increased by 8.9% in Q1 of calendar year 2024, on account of capitalization of assets and the establishment of new production facilities. That is, for reference purposes, Kota and Jabalpur, which were capitalized during the last year, and Supa, which is capitalized during this quarter. Finance costs increased by 49.7%, primarily due to higher debt for acquisition and CapEx, as well as increased borrowing costs. The CapEx for these three plants is already done, barring a bit for DRC, which is pending. On the other side, the cost is gone up. Last year, same quarter, the average cost of borrowing was 7.7%, which this year is 8%. On the debt front, we expect to amortize the majority of the incremental debt taken during the year for BevCo acquisition, as well as for CapEx in the next couple of months. Debt grew by 24.9% to the level of INR 5,479.8 million in Q1 of calendar year 2024, from the level of INR 4,385 million in Q1 of calendar year 2023, driven by volume growth and enhanced profit margins. Coming to an update on our growth initiatives, we have successfully commissioned three new greenfield production facilities in India, significantly enhancing our production capacities. In Supa, Maharashtra, on 25th January 2024, with an investment of INR 10,000 million. In Gorakhpur, UP, on 13th April 2024, with an investment of INR 11,000 million. And in Khordha, Odisha, on 30th April 2024, with an outlay of INR 7,000 million. We also have set up backward integration facilities at all the three above-mentioned greenfield plants, taking the total number of integrated plants to 13. That is the plants with the backward integration facilities. These investments are poised to support our long-term growth objectives as well as profitability. Additionally, a forthcoming CapEx of INR 4,000 million for our DRC unit will enhance our capacity expansion strategy in African region. Furthermore, we finalized the strategic acquisition of BevCo, expanding our footprint into new and dynamic markets. We also secured an agreement to produce and package Cheetos in Morocco. As we move into peak season, the growth outlook stays no way different from the past few years, and the performance, given the strong heat waves prevailing across India during the summer quarter, where we are. Our strategic investments in enhancing production capabilities and making new acquisitions have significantly strengthened our global presence. These initiatives have established a solid platform for sustained growth in the foreseeable future. On that note, I come to an end of the opening remarks and would like to now ask the moderator to open the forum for any questions or suggestions that you may have. Thank you. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone phone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use only 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 Institutional Equities. Please go ahead. Yeah, thanks, and congrats on strong margin. My first question is on the outlook. So June quarter, clearly your base is quite favorable. It was soft. Plus, we also have the heat wave, and is there any benefit also from the election-related rallies, etcetera? So I wanted to get a sense on how you see June quarter. I understand guidance will be difficult, but do you think that much stronger double-digit growth should come back in the Indian business, volume growth? Well, we can't tell you exactly what growth will come back because half the quarter is already over. So as you see, the heats are strong and soft drink sells when it's stronger heat. And we have the advantage this quarter of Ramadan being moving towards March, which hurt us little bit in the March quarter last year. So it looks very positive, and I think we should have a good quarter. One related question was on the overall market also. So, Campa Cola in FY 2024 has done around INR 400 crore sales. So if you could tell us any market, any kind of impact or, it's mostly the market has expanded. And second, to your own business, if you could tell us quick commerce, e-commerce and modern trade in March quarter, how was it this year versus same quarter last year? Yeah, see, the each business in our category is very small, so we, to that extent, do not track. But yes, the growth is there, and I read your report on Reliance also, we have done a good work. But what we are saying about our numbers, we definitely are looking very healthy, and the reasons you explained, heat wave, elections and low base of the last year, and also the capacity which we have already increased by adding these three plants and to make use of this. And you know, we are amidst actually making all the time arrangements how to meet the requirement, and we don't go out of stock, actually. Thanks. That's all from my side. Thank you. Thank you. Thank you. The next question is from the line of Percy Panthaki from IIFL Securities. Please go ahead. Hi, sir. I was just looking at your subsidiary sales, that is the consolidated minus the standalone. That has grown for this quarter roughly by about 30% year-over-year. So what is leading the growth in the international? And secondly, in the international, on a overall basis, what is the volume growth? Volume growth internationally, as stated earlier, is 21%. The impact in India, you know, is actually would not have any way different. Why it is lower is because Holi started late. The calendar actually doesn't coincide, you know, the festival or the summer calendar- Ramadan was earlier. The Ramadan. These do not coincide with the, you know, the calendar or the quarter which we follow for our reporting purposes. Everything is intact. This 21% growth, any flavor on which geographies are higher than the average, lower than the average? Morocco always leads, Zimbabwe leads, and they have already become too large, and good percentage increase in the larger territories make same time. Understood. Understood, sir. Also, could you give us an idea what is the CapEx on a cash flow basis that you are estimating for calendar 2024? See, as 3,600 CapEx, which was already, you know, we had informed everyone, 2,400 out of which was already done in the last financial year itself. Out of 1,200, broadly it's done. There's only a small portion, maybe INR 200 crore in DRC is left and maybe small amount in India, most of which is already done. Okay, so- Now, uh- For this calendar, around INR 300 crore? Our effort is to amortize the money which we have borrowed. The CapEx is done. Now we are going to the next phase. Right. Right. Understood. So, most of your CapEx is done, and would I be right in assuming that, let's say, next calendar, that is calendar 2025 also, our CapEx would not be more than like INR 1,000-INR 1,500 crore? Would that be a reasonable assumption? Let's wait till June, because the kind of growth, you know, we expect, if we get it, it has to be more. Okay. Okay. Understood, sir. Yeah, that's all. Thanks, thanks and all the best. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Jay Doshi from Kotak. Please go ahead. Hi, good afternoon, and thanks for the opportunity. Now, if I were to look at, you know, other than June quarter last year, for the remaining three quarters, your volume growth in India business of about 20%, whereas last year, June quarter, it was barely about 2%. So when we look at this June, should we think about, you know, at 17%-18% volume potential volume growth that you lost last June and about 10%-20% over and above that? So is the demand environment conducive, and is your supply side capacity expansions were commissioned on time for you to be able to capture what, you know, the math indicates, which is, like, close to 30% volume growth in June quarter? Hey, I appreciate the parameters which you have defined. I in no way differ from you, but let's keep the fingers crossed. It's ongoing quarter, and. Our capacity is enhanced, and the plants were in time, so we are okay capacity-wise. That's very helpful. Second is, now that you've made some progress on the foods business, would it be possible to give us some color in terms of, you know, you know, at the right scale, what would be the profitability and, you know, return ratios? How would it compare versus the beverages business, you know, on the foods side? I think it's a bit too early. We are only going to start the first plant next year, but food business is as good or better than the beverage business. I'm assuming this is return on capital, right? Given that CapEx would be much lower than the business. Yeah, yeah. Thank you so much. I'll get back in touch with you. Thank you. Thank you. The next question is from the line of Anand Shah from Axis Capital. Please go ahead. Yeah, I guess, couple of questions mainly from me. The first one on, I mean, you've done great work on the gross margin expansion through multiple initiatives. So I just wanted to understand the sustainability of this, and would you at all help to sort of revise your margin guidance? The guidance stays the same, Anand, as we have given earlier. We have specified the reasons. You know, one-off, we keep on getting these and, which always help us. But in the long run, the margin, you know, guidance we should take just the same, because, we do not know the weather conditions, we do not know sometimes, the competitive scenario, et cetera. So I think, the margin guidance which we have given in the past, for the long run, we should stay with that only. Okay. Okay, thank you. Just one last one, on the balance sheet side, I mean, can you share the debt numbers there, for the current quarter, given that you expanded on the BevCo payment and all, so that we know as to what is the repayment and all go down? We have made a payment of INR 1,260 for BevCo, and out of 1,200 CapEx, which was to be done in this quarter, out of that, about 1,000 or 950 is already done, and minus the profit of last quarter and 45 days. Exact numbers for the quarter, we will not be able to give. So, look, I mean, we- Got it. We'll be reaching, and we also have given a guidance that, in a couple of months, these two additional debts will be amortized, and we will be doing all the endeavor to reach at the thirty-first December debt position. Got it. Got it. And, I mean, you had indicated during the acquisition you may explore some structure sort of to work out in South Africa in terms of the payment and all. Is that something which is ongoing? See, structure was that on the CapEx, which, you know, you know, we have gone solo, which we have already announced. Yeah. 100% equity is with us, - ESOPs, which to the staff we had to give, we have announced that 100%, is with the company only. So that, first structure is very clear, already announced. However, we made, some state borrowing, you know, remitting money from here versus borrowing something at locally, because, the cost difference between, India and borrowing in local currency in South Africa was not much, 150 basis point difference only, which gives us a big insurance on the, you know, the exchange fluctuation in managing our balance sheet. So some money was borrowed there. We have done only debt equity or structure or location only to this exchange. Got it. And one last one, if I may. I mean, we're starting to see. Sorry, are we starting to see Rockstar in your presentation in the drinks, so should we expect the launch this year? See, Anand, this is what we got, you know, in South Africa, because they were doing a small portion of Yeah. Rockstar there. So it was good when we are making a consolidated brand presentation to include that. Okay. India, we'll have to wait for some time. Okay, perfect. Thanks. Thank you. Thank you. Thank you. The next question is from the line of Devanshu Bansal from Emkay Global. Please go ahead. Yes, sir, thanks for the opportunity, and, congratulations on, good margin execution in the, past quarter. Sir, you indicated that, summer season has started off well. Wanted to check if you can, call out, the utilization levels of your plants, for the month of April, as in, how are we trending on that front? You want me one word? About 100%. Okay. Okay, that's really encouraging to hear, sir. Depreciation perspective, Mr. Gandhi, as some of the plants were commissioned during the quarter, what is the expected run rate for depreciation going into the coming quarters? If you can help us. Basically, you know, how we measure is as a percentage of revenue. If you see the percentage year after year on the, you know, full utilization basis is coming down, then we seem to maintain the same trend. The depreciation as a part of revenue, I don't think will change this year also. Got it, sir. And lastly, from my end, what is the expected contribution from South African market, in terms of revenue, EBITDA, for this year? Is it like broadly similar to the metrics shared during acquisition, or we are seeing some improvement there? It's too early for improvement. I think we've just taken over, and it's off-season now in South Africa, already started. So I think give us a couple of quarters before we start really giving you numbers for South Africa, but it's a great acquisition. I think we'll do well, and just give us a little bit of time. Thank you so much, sir. Thank you for taking my question, sir. Thank you. The next question is from the line of Aditya Soman from CLSA. Please go ahead. Hi, good afternoon. Two questions. Firstly, can you tell us a little bit more about the increased capacity and your plans for Gatorade and Creamb ell? And, secondly, again, in terms of South Africa, any sort of color in terms of the numbers for the next year will be super useful. Thank you. Okay. So three questions. One is on Gatorade, second is on Creamb ell, and third is on BevCo. So, yes, Gatorade, the focus from PepsiCo has come, you know, by way of price correction, the pack size correction, and allowing us to produce from more than one plants. So the efforts are on, but it's still at a very initial stage. And, at this moment, a small change will not make a difference, but it is a product which is little futuristic. And also one more thing, they have also launched with a formulation, with the zero cal Gatorade. So it's a very promising product, but we'll have to wait for this. Same is true for Creamb ell. Creamb ell, actually, the capacity announcement which, you know, was delayed, and it did not happen on the very first day, like other lines at these plants. So there, of course, is again, a promising, this thing and. But it's doing well, and we are seeing huge growth, and whatever capacity we are able to produce, we are able to sell, even with the enhanced capacity. Thank you. Aditya, coming back on the BevCo thing. BevCo, you know, there are five plants which are, you know, already operational and working, and by September, October, when the season starts, we had to make certain improvements to enhance the capacity, one side. In the meantime, the share of PepsiCo, it's a better contributor of top line and bottom line to interchange the share from our own brands to the Pepsi, enhance the profitability. Then, you know, once we are ready, then, assess where increasing capacity by adding lines or by adding plants and, take, you know, action those things and go ahead on that. That's very clear. Thank you. Thank you. Thank you. The next question is from the line of Omkar Ghugare from Shree Investments. Please go ahead. Yeah. Am I audible, sir? Yes. Yes, sir. Yeah. My question was regarding, I know it's been only few months you have taken over BevCo, but, could you share some vision on that, where you want to take it? What kind of size it can become in terms of overall portfolio for Varun Beverages and what stages you want to... Yeah, sure. See, in BevCo. Yeah. Okay. South Africa is a huge market. Per capita is one of the highest, anything between 170-180 or 200, and, matured- 250+. Oh, I'm corrected here, 250+ per capita consumption in that country. And PepsiCo is very, very meager. If you see in the industry, the share of Pepsi is as low as 1.8%. If we, even if we say, see it between, Pepsi and Coke, that's the global brands, the share is 2.7% only. So huge upside, and we, we have in the past, you know, our track had been good. Zimbabwe, where we acted on, PepsiCo's share to zero last year, as we have mentioned in past calls, achieved 71%. Zambia, we did the same. Morocco, we have repeated this performance. And, hopefully, we will be doing it. You have to give us some time to, you know, correct our act and put the act in order, and definitely make it twofold at least. Okay. So, like, volume, volume-wise, it is lesser than India, but the realization would be much higher, right? Our inaudible is much higher, yes. No, I think, you know, we are still too early for South Africa answers, you know? I think give us a little bit of time to understand the full market. Give us a quarter or two quarter, let us then give you the right, but it's a huge market with a huge scope, and we are working on it. Okay. In terms of Indian growth this season, you said that Holi festival was delayed by 17 days, resulting in- Yeah, you are not audible clearly, please. Sir, may I request you to kindly use your handset, please? Yeah, I am using handset. Is it audible now? Yes, sir. Please proceed. It's better. It's better, yes. Yeah. You were saying that it was delayed, Holi festival was delayed by 17 days, so that's why there was some loss of sales. So like, 17 days the delay was for India Holi. See, what I think- That was for the first quarter, because Holi was late this year and Ramadan was earlier, so affected the season partly. So that benefit we will get in this quarter. There will be a lot of sales, right? Because of in the current quarter. Yeah, basically, when we are saying the, you know, the model stays the same, and the calendar doesn't coincide, summer calendar versus the reporting quarter. So yes, there will be some shifting, overlapping from last quarter to this quarter, because summer is shifted towards April. Okay, just one—wanted one clarification, that all the three plants which you just told, all of them were working, operating, in the last quarter? They're all operative in April, from April onwards. Okay, and what was the utilization in the last quarter, January to March, for all three of them? There's two of them have started operating only in April. Yeah. Okay, and the one remaining, which started in January, I think, right? The one which was started last quarter, January, February, are not the full season months. Those are part of the off-season, but as we are heading towards the season, every plant is being utilized more or less around 100%. All right. Thank you. Thank you. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. So, in this quarter, the gross margin expansion, the two factors you were talking about, lightweight packaging. So can you talk about how much percentage of total sales volume you have on lightweight packaging, and there is further room of growth? And also talking about reducing sugar content, and you talked about 46% of our consolidated sales is coming from low sugar content. Sir, can you speak little slowly and just repeat? I couldn't hear you properly. There's something not very clear on the line. Mr. Kumar, I would request you to use your handset, sir. Your voice is muffled. Yeah. So the first question is, when you talk about the low, or lightweight packaging, so can you talk about how much percentage of total portfolio is lightweight packaging currently, and how much, how much it is going to increase from current level? And the second question is for the low sugar content, we are talking about 46% of the total, consolidated sales volume is from, low sugar content. So can you talk about from here, can we increase this percentage? Well, you know, it's difficult to give the number for futuristic, but, for the past, if you are interested, we have worked in detailed and compared it, you know, from, from 2010 to 2023, in page number 15 of our quarterly results presentation put on website. And we have also given this, for various preform for 600 ml, 750 ml, 1 liter, 1.25 liter and 2.25 liter, as well as reduction in the grammage for the, closures. So these two things are already is provided in much detail in page number 15. And the scope for future, basically will depend upon the technology changes, et cetera, which will support, the, weight reduction. So as of now, the position is given. Okay. What about the sugar content, the 46% portfolio? As I have in my opening remarks stated, as of now, 46% of our total portfolio is either zero sugar or low sugar. And actually, South Africa has helped us a lot because they are in that country, they, we have already reached about 90% of the portfolio, 89% precisely, which is less sugar or no sugar. And the another country which is following the same is Morocco. And in India also we are doing a lot of efforts and we have now our, in our launches, Mirinda, 7UP, other than in PepsiCo, PepsiCo's Pepsi Max, and low sugar in that stream. So we are developing, you know, more and more, Gatorade, we mentioned, you know, new launch which PepsiCo has given us formulation with zero sugar. Effort is there, and constant effort is there to, you know, reduce the sugar content. And this will help our gross margin going ahead? Any profit they're sharing, you know, then between Pepsi and us, and yes, to some extent it is helping us also in the gross margin. Okay, thank you so much. Thank you. Before we go ahead, we will request all the participants to use their handsets for optimum audio quality in the conference. Thank you. The next question is from the line of Karan Gupta from Weave Capital. Please go ahead. Good afternoon. I'm sorry, your audio is not clear. There is a static on the line. Mr. Gupta? Yeah. Hi. Yes, sir. Please proceed. Now it's audible? Yes, sir, it's much better. Thank you. Yeah. So, my question is regarding the capital structure, how we are looking forward for the next 3-4 years, right? How much debt we are including and how much equity we are putting up. So, over the years, you know, our, our debt is increasing. If you just see the last 2-3 years, the debt is increasing significantly, right? And I understand the thing that we are entering into the market, where the opportunity is very huge, so the expansion part is, you know, a must. But, over the next 2-3 years, how we are looking forward to raise the debt, as we are also putting up, you know, expanding our capacities, so how much the cash flow we are generating? Just estimation that we, we will not add much debt in our capital structure. Uh, yes. Is there any benchmark, any structure you have, you know, prepared for the next 2-3 years that, let's say, 30%, 40% will include from all internal approvals, and then the rest will be from debt? That's something, kind of question I have. Sure. See, in the past year, we had enough, you know, debate on this. And, any time for the last 2-3 years, you must have noticed, 4 years, that our debt EBITDA is around 1-1.25, and the debt equity is 0.5, 0.6, 0.7. And, after 1 or 2 months, once, you know, the season is over, because, the, this, ratio will be at the same level. You know, when I made this statement, in couple of months we'll be amortizing debt, which we have taken for these three plants, in the current year of INR 1,200+ we have taken for South Africa, will be at the same level of December. So ratio automatically takes care. How in return we get is perpetual EBITDA increase with the company and, increase in the equity portion, retained earnings. However, through this, debt in the interim, yes, we have to take, and, that always has helped us in enhancing the return for our, stakeholders with, very healthy, ROI. And, we are conscious of the fact that it should not go beyond acceptable levels. And, thanks for your suggestion, and we are within that. Okay. And, you know, with this 3 greenfield expansion, what's the estimation of your cash flow generation from this? We are looking forward around INR 5,000 crore cash flow in terms of cash flow from operations, because we are currently around hardly INR 2,500 crore. Well, So that, you know, the cost reduction will be there. Well, it's a little difficult to, you know, calculate that way. Some are, you know, these are integrated plants, so the backward integration, some on the profitability side, and certain maybe with the, two out of these are with the aseptic packaging line, which are capable of producing Tropicana as well as, Creamb ell. You know, in one there is no, royalty payment. So all these are slightly difficult, but at, you know, that granular level, on the phone, it becomes difficult. But however, I can only say that, debt levels are, well within the norms and much better position than our stated position on our website. Okay. Okay. So further for expansion, as you said, for calendar year 2025, sorry, calendar year 2025, you said June will be the time you will announce some CapEx for the CY 2025. So what's the plan for that again? Same question for the debt structure. If you are raising again or that will be internal approval? Well, you know, all this debt amortization or all expansion in the from 2019 to 2024, in last five years, had been only from internal approvals. All ratios of debt to equity and debt to EBITDA remained more or less at the same level, or sometimes these have shown improvement only. Will be from internal approvals only, but however, sometimes in the short term, there may be borrowing. These may be quoted through the borrowing because you have to incur the CapEx first, and then from the very first year itself, from April, May, June, you start realizing and brings it to a comfortable level. We study our balance sheet in two parts, actually. One is when we incur the CapEx, the assets are put to use, that's December. June is when we are actually put to use and amortize part of debt. Therefore, we recommend that let's wait till June. Okay. Thanks. Thanks for the explanation. Thank you. Thank you. The next question is from the line of Sanjaya Satpathy from Ampersand Capital. Please go ahead. Yeah, hi, sir. Thanks a lot for the opportunity. So my question is that the greenfield, you were giving some color that there was some delay in starting the factory. Can you just complete that part? No, it's there. The delay was because of the Red Sea and all that. Instead of starting in January, it started in March, so but it is before the season, and it's running very well, and we are practically doubling our capacity. Understood. So, the South Africa plant, which will be completely merged, and the full impact of it will come from the June quarter, have you kind of given any idea about how much your depreciation, amortization cost and other costs will go up by? South Africa basically is the, you know, the franchise rights acquisition cost, the balance, the assets value is not that large, so depreciation there will not go up. But, depreciation actually ideally has to be same on the consolidated level, wherein, the last five years balance sheet you will see. As a percentage to our revenue, the percentage is coming down. Last year, it has come as low as 4.2%, of our, as a percentage to our top line, which, you know, earlier years it used to be 7, 8% or 9%. So this improvement is very healthy and, it's a good percentage. I mean, we have on this parameter really delivered in the past. Understood. So, sir, will the amortization go up a lot? Or, I mean, I just wanted to understand the impact, cost impact of South Africa, if at all it is there? No, it will not have, because it will contribute maybe anything INR 1,600 crore to INR 1,800 crore or INR 2,000 crore top line. So, I mean, it will have its own EBITDA. It's a positive profit-making operation with a huge top line, so it will not increase as a percentage. Okay. And last thing, if I can ask, that you mentioned that you have no plan to immediately use brands like Rockstar that is there in South Africa in India. Just trying to understand what all synergy benefit that you can... you are really looking at. I believe that you are saying that it'll give us two quarters, but just understanding the thought process. The Rockstar brand belongs to PepsiCo. We so we have to align with them to, you know, with their strategy to launch the same in India. Basically, this is a brand energy drink category to address the premium category, which is very niche, and they have to be convinced that that much market exists in India. Understood. Thank you a lot, sir, and, thanks a lot for all the details. Thank you. Thank you. The next question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead. Yeah, hi. Hi, Mr. Gandhi, and. Good afternoon. Yeah, very, very good afternoon. Just wanted to ask one question. 2025, barring in the calendar year of 2025, barring any acquisition, really speaking, that year should mark the beginning of a very favorable operating and financial leverage for us. Is that right? You are saying the acquisition for the next year, 2025, you're saying? No, no. I'm saying assuming no significant acquisition occurs in 2025, and we will be digesting the current acquisition of BevCo that we made. Assuming no further acquisition in 2025, then 2025 onwards should offer a period of once again very favorable operating and financial leverage to us as our acquisitions will get digested and we'll scale them. Very rightly put it up by you. In fact, very true, and this resonates with my earlier answer, that in couple of months, the CapEx made by the company in this calendar year, plus BevCo, this thing will be amortized already. And after that, any addition in the debt is going to be for the CapEx of 2025 only. Very correct. Or maybe, after a couple of months, the residual year, maybe four, five months, or which will be left of the current year, part of that will be met out of the cash retention from those four, five months operations. And if the CapEx we advance, then maybe slightly it goes up. Otherwise, you know, without any new M&A for 2025, the debt should not substantially change from 2023 end by the 2024 end. However, my EBITDA coming from these three plants and coming from five plants of South Africa should start contributing a lot, and DRC should start contributing a lot. Yes. So in a way, a kind of flow-through model, very favorable virtuous cycle that we witnessed earlier, where top line to operating profit to the, after the financial leverage, into the cash profit due to depreciation, a kind of a favorable virtuous cycle, what we witnessed for preceding period of 2-3 years. Something like that, hopefully should begin in next year onwards. In fact, this is what we are demonstrating for the last several years, and this is what we always plan. But in the short run, little bit here and there, it's always possible. See, what happens is, if there is a demand growth in the market, so we must prepare and make every endeavor that we don't lose our share by advancing the CapEx. And the same way, if internationally some opportunity comes up, we should not delay it, the M&A, and temporarily support the cash flow through the borrowing. But of course, we have to be very cognizant of the fact, one, that we do not spoil our strict ratios. Secondly, we are confident in a period of 12-18 months, we are going to come back to the original strict levels. Without doubt. I think what has been achieved so far has been really commendable on each acquisition, in each move. But always is, the heart is greedy. So it is only from that point of view. Jaipuria is smiling. He's a new fan and adopting our baseline. Thank you very much. Jaipuria Ji, namaskar. Hope you are fine. Namaskar, Ji. Namaskar, Ji. Thank you so much. Thank you. Thank you. The next question is from the line of Ruchita Katgi from IIFL Wealth. Please go ahead. Good afternoon. So my question was mainly in the line of DRC. So just wanted to understand, what kind of volumes can we potentially do in that region, and how big is that market? That market is quite large, but unfortunately, it's not a very... the numbers are not very clear in that market, but it's more than 100 million population and warm climate. We have put two large lines, and our capacity is about 35 million-40 million cases is what we can produce. So we hope to do well, and as soon as our plant starts by the end of this quarter, we will really see how well we do and how fast we can grow that market. Okay, sure. And sir, similarly with South Africa, sorry if I've missed it, but how big is that market, and how much volume can we do there potentially? South Africa is close to a 1 billion case market. It's a huge market, and our Pepsi share is only 2.2%, practically. So there is huge room there. Although we have our own brands, where we are doing well, and another 12% market share is that. But as a market, it's a very big market, and we have huge scope to grow, and we have 5 plants. Okay. Sir, can you give me the capacity of these plants all together? Well, you know, there is enough capacity, but they, they were not maintained very well, so we are correcting them, and by September, before the season starts, we will have enough capacity to grow the market. Whatever corrections are needed, we will grow it, do it before the season starts. Okay. Okay. Understood. Understood. Thank you so much. Thank you. Thank you. Ladies and gentlemen, we will take this as the last question for today, which is from the line of Saket Mehrotra from Tusk Investments. Please go ahead. Yeah, hi. Am I audible? Yes. Yes, sir. Sir, could you give us any sense on how much contribution in our sales is right now coming from quick commerce? If you could just, like, give us some understanding about how that channel is evolving. In fact, the quick commerce or the e-commerce is still, you know, not very prominent in our segment. It's very little, and we have not tracked here that minutely because it's not that important. But as and when, you know, some more data on this is available, we'll share e-commerce. Okay. Any sense in terms of growth? While I understand maybe the contribution right now is insignificant, but if you can give us a sense on what kind of growth is coming from this channel? Yeah. Once we get the, you know, more data at that level, we will definitely be sharing. Okay, thank you. Thank you. Thank you. Thank you, sir. As that was the last question, I would now hand the conference over to the management for closing comments. Over to you, sir. Thank you. I hope we have been able to answer all your questions satisfactorily. Should you need any further clarifications or would you like to know more about the company, please feel free to contact our investor relations team. Thank you once again for your interest and support, and for taking the time out to join us on this call. Look forward to interacting with you soon. Thank you very much. Thank you, members of the management. Ladies and gentlemen, on behalf of Varun Beverages Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.