CCL Products (India) (NSE:CCL) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to CCL Products (India) Limited q one f y twenty seven earnings conference call. 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 in the conference call, please signal an operator by pressing star then 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to mister Deepak Sa from Ashika Institutional Equities. Thank you, and over to you, mister Sa. Thank you. Good morning, everyone. On behalf of Ashika Institutional Equities, it's indeed a great pleasure to host the Q1 FY twenty seven earnings call of CCL Products Limited.

0:45 Joining us today to discuss the earnings call for the quarter ended 06/30/2026 are Mr. Challa Swishan, Managing Director Mr. Praveen Jayapurriar, Chief Executive Officer Mr. B. Mohan Vesheera, Executive Director Mr. Jashini Yadhashe Raji, Chief Financial Officer Mr. Sri Devi Desari, Company Secretary and Compliance Officer. We thank the management for giving us the opportunity to host the call. I would now like to hand over the call to Mr. Praveen sir for his opening remarks, post which we'll open the floor for Q and A. Thank you and over to you Pravin sir. Yes. Thank you, Shikha's activities for holding the call. Good morning, everyone. I welcome you all to the first conference call of FY twenty six-twenty seven. Let me begin by giving you a brief overview of company's performance in the first quarter.

1:35 The group has achieved a turnover of INR1203.59 crores for the first quarter as compared to INR1058 crores for the corresponding quarter of the previous year, achieving a growth of 13.76%. This was on the back of almost 20% volume growth. However, since our top line is a function of green coffee prices, the revenue growth stands at 13.76%. Our business model is such that the EBITDA growth follows the volume growth, and this was reflected with a growth of 21.84% in EBITDA. In actual terms, the EBITDA stands at INR196.69 crores as against INR161.42 crores. The profit before tax is INR129.02 crores growing at 36.98% And the net profit stands at INR116.87 crores with a growth of 61.31%.

2:31 As far as the green coffee prices are concerned, they are right now range amount between INR3300 to INR3800. But there is, you know, a certain amount of volatility that still exists, owing to, you know, simultaneously, is some bullish factors playing. The various factors are the fact that the Brazil supplies were good, but there has been some bullish factors as well with the news of El Nino setting in. There are certain reports saying that this could hamper the Vietnam crop that is likely to come in that is going to come in November, December. So therefore, we still see certain volatility. But long term, we believe that the prices will be at these levels.

3:19 And we don't see much of an increase from these levels. The domestic business continues to grow well and has achieved a gross turnover of Rs. 180 crores, out of which approximately Rs. 125 crores is the branded business. There is consistent market share gains across geographies and platforms, and we will continue to drive aggressive distribution in the South and increase our presence in the rest of the South markets. I'll just now hand over the call to our CFO, who will give a bit of a color on the, balance sheet situations and then we'll open the floor for question and answers. Good morning everyone.

4:07 We are beginning the financial year on a very strong note, sales at $12.10 crores, represents 14% year on year growth compared to $10.58 crores a year ago. EBITDA at INR 197 crores compared to INR 161 crores representing a growth of 22%. But before we get into the financial year, FY21 quarter one results, it is appropriate that we refresh or revisit what exactly transpired in FY26 because what transpired in FY '26 is what gets translated into FY '27. FY '26 is actually an year of inflection point for us, the year in which we have grown and we have grown profitably. Top line has grown to INR 4,457 crores in FY twenty six, representing a 43.5% year on year growth. PAT at three eighty eight crores represents 25% year on year growth. EBITDA was at seven forty one.

5:01 While these are the numbers that attract the attention, the most of the major improvement actually happened in the balance sheet. We have significantly derisked the balance sheet in FY twenty six by by deleveraging. From the peak date of close to thousand 950 crores in December 24, that has come down to thousand $2.68 crores by March 26. Net debt was even lower at thousand 73 crores. We identified that there was an overhang of debt in our financials. We devised a strategy. We communicated it to you. We talked about the debt reduction stat... Debt reduction plan that we had and the subtle shift in our finance strategy towards a more working capital and cash flow centric approach.

5:48 And, we executed this strategy religiously and delivered the results, which are measurable and which are significantly derisked our balance sheet. All this happened without dilution of equity, without sale of any non core assets or without causing the growth. In fact, in the last financial year, we have grown significantly and at the same time, we delivered the balance sheet. The deleveraging happened by focusing exclusively on operational efficiencies. The cash flows have actually surged in the last financial year to $8.58 crores from $2.90 crores a year ago and 55 crores a year before that. Work tax days have actually come down by eighty days to one hundred and sixty six days. Now all these improvements give us strength to support the growth and the ability to withstand the green coffee fluctuations.

6:41 These measures, the working capital efficiencies, the cash flow centric approach, and the focus on deleveraging that helped us transform the balance sheet and financials in FY '26. We continue to focus on that and channelize our efforts to further improve that in FY '27. So, the net debt after June 30 has further come down to $9.63 crores. This is sub thousand levels. So, so it is up close to 100 crores from the last quarter. With that, I hand over to the, Ashita team for question and answer session. Hello?

7:34 Speakers Hello? Yeah. We are open for question and answers. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on a touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 comes from the line of Avnish Roy from NewAMA. Please go ahead. Yeah. Thank you. I have two questions. First is I wanted to understand given very high volatility in coffee prices, and currently, that it is down only last few months. I wanted to understand if you can continue to have a 15% kind of volume growth.

8:23 How do you see EBITDA growth going ahead because clearly rupee has depreciated. So in your contracts, do you get benefit of rupee depreciation or generally on a fairly, live basis, it gets factored in. So if rupee gets depreciated, your margins don't increase. Could you clarify on that? So, Ramesh, two things. The first is the growth aspect that you said. We work on a cost plus model, and our focus always is on the volume growth. And volume growth, we factor in any green coffee fluctuations when we give guidance. So we stand by this guidance of 15% volume growth. And in the first quarter, we have achieved 20%. So we're very confident that we'll be able to stick to this guidance of 15% volume growth.

9:10 As far as rupee depreciation or appreciation is concerned, see fundamentally, we are a naturally held company because we import large amount of our requirements of coffee and then export. So, there isn't much of a yes, there will be an impact owing to the difference in the import and the export prices, which is the margin that you earn upon. So, on that, we do get impacted. But we have our ForEx policies in place so that if at all there is any, you know, appreciation also, we are covered for that and we don't lose on account of that. And, therefore, what we maintain is that, we keep driving the volume growth and our EBITDA growth will be in line with our volume growth.

9:57 Sure. So you're not upgrading your volume guidance. Right? Because you you you got growth higher than, the guidance in terms of volume. You're not upgrading that. Right? No, we are not operating, you know, again, considering that we just spoke, the while the coffee prices at lower levels, but still remains to be volatile. And therefore, when it is volatile, there is a sense of, you know, and watch kind of a situation in the market as well from the client side. So we just want to keep, you know, the guidance intact of 15%. We're not upgrading that right now. So last question on the specific comment you made on the El Nino impact on Vietnam also. So I wanted to understand from sourcing if the crop is actually quite bad. Can there be some sourcing kind of a challenge also you don't get the enough raw material? Is that something you have faced in any of the years and El Nino impact has been there? Yeah. You know what? Generally, even if the El Nino impact is there, what happens in the coffee market and Vietnam is largely a robusta market, which is a far sturdier coffee type.

11:03 So, yes, there will be some impact. It is not so much that it will impact the flow of coffee. So, that we haven't seen even in very bad years, even in years when there was a lot of frost and this thing at Brazil also, we didn't see that kind of a drop. But what happens is that considering that it's a very largely traded commodity second only to oil, there's a lot of speculative interest that goes into the market, and that makes the prices very volatile. So while the prices become volatile, we generally haven't seen any issue on the supply side. Sure. Thank you. That's all from me. Thank you. Thank you. Next question comes from the line of Shereesh Padresi with Motilal Oswal Financial Services Limited. Please go ahead.

11:50 Hi, Shreshand. Praveen, good morning. Thank you for the opportunity. Praveen, starting with can you give me the total volume we have sold in India this quarter? And maybe if you can give me some split between spray dried and freeze dried? So, Siris, you know that we have interacted so many times. We will not detail out the volume number. Give me give me capacity utilization. So capacity utilization stands at around between 65 to 70%. So that is at an aggregate level. Yeah. So there is a higher utilization for the freeze dried because we are seeing a higher demand for freeze dried. So there is a higher demand... Higher utilization of freeze dried within this 65%, 70%.

12:37 Okay. And Vietnam, we are at 36,000? As far as the rated capacity is concerned. Right. Yeah. And Vietnam utilization? Similar levels. Similar levels. We haven't seen much of a difference in the utilization at at both levels. So both India and Vietnam are almost operate at similar utilization levels. Okay. And one follow-up on the 20% volume growth, which is outstanding. But Mhmm. Is is it... This mix is tilted toward freeze or spray? Yeah. Yeah. It's... It is... So I... Spray is still the larger volumes, so I can't say the mix is at an absolute level tilted towards freeze. But in terms of the proportions, freeze, as I told you that the freeze dried utilization is better. So the proportions of freeze dried have been better than the previous quarter last year. Yes, but if you see the utilization of between freeze dried and spade dried, when you compare it to the last quarter, you'll see a huge amount of similarity. In fact, and that's the reason if you see, almost item by item, the results are very similar to the last quarter. So we are carrying forward forward the momentum of the last quarter into this year as well.

13:53 Okay. On the demand side, we have seen a significant drop in the coffee prices. But you understand that Brazil is up, and we found that it's in some volatility. But what kind of discussion you are having with the customers? Because I see if I'm tying up our inventory levels, it come down significantly. So does that mean that if inflation subsides, we will get benefit in terms of margin story? So margin story doesn't change, Sirish, because it is a cost plus model. So margin story doesn't change. What changes is that at lower levels of prices, there is a sense of calm amongst the buyer. And I can see I can hear a lot of voices.

14:39 So I don't know where this is coming from. But anyways, just to continue on this, so our margin profile doesn't change. But what changes is that, yes, your cost of holding inventory will change. There is a calm amongst the buyer in terms of giving longer contracts because now they feel that prices are settled. So, benefits do come in, which also helps us in our supply chain management. So, all of these ancillary benefits come in, but our margin profile of coffee doesn't change. As far as consumption is concerned, Sirish, we have seen very high coffee prices also. But even in those times, we did not see any drop in consumption. So, we always have seen that the coffee consumption has been pretty inelastic to the price changes.

15:27 But yes, there could be internal movements, maybe there would be shifts from freeze dried to spray dried coffee, but otherwise haven't seen much of a change in consumption. So consumption remains intact and our margin profile fundamentally doesn't change. Yeah. I I got that. That's helpful. What I was trying to derive, the quarter one trend, if we build the EBITDA per kg for full year, is this trend in cyclosan or will will have some, volatility in the second half? No, no. I think this will be cyclosigned throughout the year. The EBITDA per kilo will remain same throughout the year. Okay. And last question on the branded business. Though we are our run rate is significantly higher, But in terms of whatever learnings last two, three years, what are the your experiences that your markets were viewing? I mean, is the product is really getting shelf life? Or is it that consumers are doing I mean, I think broadly what number we should be building in FY 2027?

16:28 So, you know, we did INR125 crores, INR130 crores. I multiplied by four, it is INR500 crores. And in India, season does place an impact. So we are looking at anything between INR550 crores, INR600 crores of only branded play. And as I was mentioning, I think we have had very good learnings. And the good thing is that we have been entering markets one by one. And each of the markets have responded very well, both in terms of our product response. So, far as the product response is concerned, it's been pretty good. Our large pack sales are quite good, which implies that there is a lot of stickiness and loyalty to the brand. So, the metrics have been pretty good. We have been doing well on MT and e com platforms as well.

17:14 So, overall, good response from all the markets. Now, we are concentrating a lot on the North and U. Markets. So hopefully, that will also yield results this year going forward. Thank you. It's really helpful, Praveen, and thank you a lot. Thank you. You. Next question comes from the line of Abhishek Mathu with Systematics. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. So just wanted to check firstly on capacity expansion. Are we starting to have any initial thoughts on this maybe in the second half of FY '27 or in FY '28? Have you started to think about expansion, especially on the freeze dried side, if not the straight dried?

17:59 What is our CapEx plan for this year and the next year? And are we build... Starting to build any CapEx numbers around this expansion? Just wanted to hear your thoughts on these. So, Abhijit, couple of years to be around building any CapEx expansion. I think we are good for next two, three years. Yes, on the freeze dried side, there could be certain, you know, demand listing, but you know, dried is also a thing where we one has to be very careful and essentially, we are very, very confident of the demand persisting because it's a high CapEx and a plant needs to run for twenty fourseven. So, we have to be very, very sure before we do it. Yes, discussions are there amongst us. We keep, you know, we are keeping a tab how the demand is, you know, panning out. But I don't think so in the books we are building any CapEx money on...

18:50 In the next two years or so. Right, sir. So in the light of that, sir, what what is our current CapEx spend plan for this year, FY '27? Will be anything between 25 to 54. These are these are generally a little bit of an upgradation, some, you know, additions in the current listing only. So these are very small numbers. Right. And so secondly, wanted to understand, typically, is the inventory, that we store... That we keep, with us, in terms of days or in terms of amount in typical times, if you can specify? And also, you indicated the net debt at the end of June, but what was the working capital number also, if you can help with that? That's it from me. So in the inventory, we generally will keep around three months of, inventory between two two and a half to three months of green coffee inventory.

19:38 Yeah. And I'll just hand over to CFO to let you know about the working capital cycles and things like that. So the net debt has come down to $9.63 crores from $10.73 crores in March 26. If you want a breakup of the, debt, the gross debt is at $12.68. So, the classification would be term, term loan would be $5.17 and working capital would be $7.51 crores. Got it, sir. Thanks a lot, and and all the best. Thanks. Thank you. Thank you. Next question comes from the line of Akhil Parekh with three sixty one Capital. Please go ahead. Yeah. Thanks for the opportunity, and many congratulations as well as for your consistent execution.

20:31 Pravinci, my first question is on the domestic business. We already guided that we should be doing around INR 500 to 600 crore of sales. Would you be able to throw more light in terms of what has been our market share gains? Because in opening remarks, we will highlight that. So probably what kind of market share we have in South India and, probably across some of the, channels including modern trade. Okay. So, Akhil, I think there is a lot of disturbances, but what I understood is you are probably wanting some color on the market share gains in the different geographies and platforms. So basically now if I were to take urban market share because largely our distribution is concentrated in the urban areas, we have crossed 6% market share in South Of India. And as far as, you know, platforms are concerned, both the large two chains, which is Reliance and D Mart, which are like the most prominent modern retail chains in India. We are into now double digit market shares in both of these chains. So, these are the numbers. And as far as quick commerce platform without going into, you know, each platform details, but if I were to aggregate, we are in very high single digits and very inching closer to the, double digit, market share.

21:52 So, all around there has been a very good increase. These used to be, let's say, you know, quarter on quarter one may see, marginal increases. But let's say just one and a half, two years ago, these used to be low single digits. So now we are pretty, pretty much strong on all of these platforms. That's great to hear. Second, in past we have maintained that we reach a certain scale and then we'll kind of business will become PAT positive. If you can throw some color on what is the scale of the domestic or branded business we are looking at after which you know, then business will start contributing at that level to the consolidated basis. So, you know, because it's not a separate entity, we, we're not coming down to the PAT level, but if you look at EBITDA levels, it's already positive. The only thing we maintained is that we will not kind of start milking it as of now, because we are looking at aggressive growth.

22:51 You see, the category is, you know, probably, not growing as much as much as we are growing. So, are driving a lot of aggressive growth, we are taking market share. So, what we said is that the 5%, 6% EBITDA margins that we are running on this business, we will keep it at those levels, instead of focusing on, you know, making it right now, because we foresee that, there is still a lot of growth that can be, achieved. So, this year also, you know, even volume wise, we are looking at 20 to 25% aggressive growth. So, these, will only come back, come at the back of investments. And therefore, all the monies that are getting generated out of the growth, we are plowing back to the business. Sure. And last year, the EBITDA per kg front, right, you mean... Mentioned that the EBITDA levels will be kind of maintained in subsequent quarters.

23:41 Last year, we had already seen that EBITDA per kg had sort of to probably around $1.40 odd rupees. So is it fair to assume that at least, this year will be on par and maybe even do better as compared to FY twenty six at EBITDA per kg level given that FBC contribution is expected to move up, given that the demand is strong for FBC. No, so, you know, FDC already last year, if you see the last three quarters, the FDC demand or the FDC sales have, had increased proportionately higher. So, what happened is that it is already building the base. And therefore, we don't see any further improvement in EBITDA because of any proportion change towards, towards FDC. In fact, you know, my belief is that we'll add more of FDC going forward in terms of proportion when I say so. So, therefore, it may have a tendency to even come down. But, as I've been telling that there are certain other measures that we keep taking, we have been talking more to, you know, trying to reach direct clients, trying to improve the mix between small and big. So, all that will also kind of help us do better. So, all of these will kind of balance it out.

24:50 And therefore, we are guiding that the EBITDA per kilo will sustain at these levels only for this year. Hello? Mister Parekh, please go ahead. Yeah. I said, thank you thank you. That's all from my side, and congratulations, mister Parekh. Thank you. Thank you. You. Next question comes from the line of Naveen with iThought PMS. Please go ahead. Mister Navin, please go ahead with the question. Mister Navin, please unmute yourself and go ahead with the question. Since there's no reply from the line of mister Navin, we'll move to the next participant.

25:39 That is with. Please go ahead. Hello. Thanks for the opportunity. Congrats on a good set of numbers. I have a couple of questions. The first one is on volumes. So if we were to assume that we sustain to 15% volume growth over the next two years, we would end up with 95% plus in terms of utilization. Now where would this leave us beyond FY twenty eight is question number one. Because if you haven't had any plan in terms of addition of capacity, will our growth be handicapped in '29 because of capacity not being available? This is question number one, sir. Okay. So, you know, you have seen our history of the company.

26:25 We will never let capacity hinder our growth. And that's the reason we have always made sure that, you know, as and when the time comes, we will be able to add capacity. In fact, you know, we also, you had seen that in the year 2021, because of COVID when we were not able to, know, add capacity or let's say construct our new capacity, we also went ahead and bought capacity from outside, yes. So capacity will never be or never be a hindrance to our growth plans. I have told this before also, keep a tab of this. We have been discussing internally. We believe that yes, next two years, it may not be required. But if at all we feel that the growth are going ahead or things like that, we will definitely make sure that we end up either, you know, putting the capacity ourselves or doing some strategic tie ups, which helps us to augment our capacity.

27:24 Typically, at what percentage of utilization do we really look at new additions? So, you know, when we cross 75%, you probably will start, you know, kind of working it out. And, mostly 85 to 90% is the time when you probably will need new capacities. Right? And gestation period would be approximately a year? Around, yeah, nine months to a year. Perfect. But the good thing is the good thing is that, you know, for both our... At both our places in India and Vietnam, we have the ability to add because both will be brownfield. So we have the ability to add the capacity faster owing to the fact that a lot of, you know, the land is there, a lot of other civil works and all that are in place. So that also is not a big hindrance in terms of, you know, it's not like a greenfield that one has to do. So the brownfield, our ability to do it quickly is also there.

28:20 Perfect. That's to come. So just one additional point with regards to this is that at 77,000 capacity, know we've discussed earlier that you would be close at about 10% of the contract market as far as coffee is concerned. So what do you think is the potential that we can get to a lakh or lakh and 20,000 tons? Is there any change You in the process to know, basically, at 77 we probably are at 10% to 11%. Probably there's another 3% to 4% that one could add, which means that around a lakh is pretty much lakh, lakh 20 is pretty much possible. And we keep seeing how the competitive environments also evolve. And that will help us guide our growth momentum. But fundamentally, as we have been discussing that the next three, four years, we look at this kind of a 15% growth. And also what is happening and that's exactly how we had planned that, you know, even our B2C 4A and all, they are now significantly starting to contribute to this growth momentum.

29:20 So, our whole thought process of, you know, shifting to a B2C, which also helps us drive the momentum getting into newer categories. So, as a company, we are kind of, you know, taking it into phases. Long term goal is intact that how do we keep driving the growth over a long period of time. Very clear, sir. Thank you. And the next one here is that if I were to go by the numbers that you had given earlier in terms of volume growth, over the last five years, when I look at the numbers, I see that 1Q EBITDA per kg has always been a tad lower than what we do in the second quarter or the third quarter. This has been a historical trend that we see. Is that a seasonality that we're missing out? What exactly leads to 1Q EBITDA per kg being weaker than the rest of the quarters? And is that the trend that is expected to play out going into this year also?

30:08 No. I don't think so. That's a design trend or is it fair? There is any forces that are leading to it. And seasonality, we don't see much of a seasonality now. We used to, a few years ago, we used to see higher demand. But these days, even the guys across the globe, they are also doing the supply chain management, which means that they are making sure that the goods are at their place at the right time. So overall, we haven't seen much of a yes, in India, there is a seasonality, having, but we haven't seen seasonality in the rest of the globe, largely in The U. S. And in Europe, where coffee consumption is pretty much, you know, it's not driven by season. So, I haven't seen, you know, seasonality there. And I don't think so there is this pattern, maybe there is a pattern that has emerged, but it is not due to any forces or something. Probably it's a coincidence that Q1 is a little lower.

31:01 Maybe the mix and all we'll have to check is there any pattern that has emerged. But I last year's quarter one, I think it was pretty high. So, I don't see that it is always there that the quarter one is lower than the rest of the quarter. Right, sir. Thank you. My last question here is that is there any impact of higher coffee prices having a saving in terms of operational cost that is leading to better EBITDA per kg? So I'm just trying to correlate is that does our EBITDA per kg tend to perform better when coffee prices are higher? Not really, not really. It doesn't really make an impact when the coffee prices are higher. Fair enough, sir. Thank you, sir. All the best. Thank you. Thank you. Next question comes from the line of with iThought PMS. Please go ahead.

31:54 Yeah. Hello? Hello, Naveen. Hello? Yeah. Yeah. Congratulations on on a good set of numbers. So just a couple of things that I want to understand. Mister Naveen, sorry for interrupting. You speak a little louder? We cannot hear you. Is it better now? Yes. Please go ahead. Yeah. Sorry. I I think I just missed the EBITDA per kg number. Will it be, like, $1.40 this quarter? Or Yeah. Yeah. Yeah. Round about that. Yes. Around one forty. Got it. And just, like, as an extension to this question, right, so when we look at EBITDA for KG as, like, an output even now, so where we, like, you know, maybe seek business that is accurate to this number or is it more of, like, you know, we service the demand that we get and then this is, an output metric.

32:44 So, like, should we... So, no. We look at... We constantly look at this number because we work on a cost plus model. We always build, you know, the costs on top of the green coffee and build our margins also. So we have a close eye. Yes, it goes without saying that it's not that every customer you get the same or every product you get the same EBITDA per kilo, it's the blended EBITDA per kilo, but with the kind of proportions that we have the kind of customers we have the kind of prices and all. This is the blended EBITDA that is there and it is just not an outcome. It's also a deliberate attempt to make sure that you are on these kind of margins because you are doing a costless pricing. A quick follow-up to that would be, so do we have targets internally set? Would you be able to share any target that you have? So, know, our internal and what we guide you are pretty much on the same lines. We have guided that this year on a full year basis, we will grow the volumes by 15%, which means that the EBITDA is also likely to follow the same, growth, specifically.

33:47 I was wondering would be much longer than the five year, kind of outlook, three year five year outlook. So, yeah, basically, you know, the last question, to answer, when I was answering the last question as well, we are saying that, you know, next three, four years, we are guiding as of now, as we stand today, we driving towards these kind of a growth 15% or so volume growth. And in the long term, yes, we would like to maintain the momentum and that's the reason we have been adding, you know, newer dimensions to our business. And the first and foremost thing was to add the B2C verticals, which has done reasonably well till now, we are now looking to expand into, you know, fewer, categories that should help us keep the, you know, growth momentum up for the next five, ten years. So, that's been the long term plan and we'll keep updating you how things are shaping up. But as of now, we are good to go with this kind of, you know, growth momentum plus next three to five years.

34:48 Got it. Got it. One small thing on the India FMCG, sorry, the B2C FMCG business on the whole day. So how is the international part of that doing? You have like call in UK and all that, so just wondering. Yes, yes. So, the international funding is coming up very well. For call UK has turned around, last year we closed at around INR26 crores, crores of top line. And, we are likely to kind of, you know, keep growing on that front. And also, brings us good news because once the brand gets established, in one market, it gives a lot of strength to the brand to, you know, travel to other markets. So, with Percol, we are talking to quite a few bit of chains who are now kind of, you know, have showed interest in kind of listing Percol.

35:44 We are talking to a lot of people and a lot of distributors in The US to not only launch Percol, but also launch the Indian brand for the Indian diaspora. We're talking to distributors in Middle East. So, lot of and some of these are likely to just, you know, kind of culminate in a couple of months. So, a lot of action you will see going forward in terms of launching our b two c in in in markets beyond India as well. Oh, got it. Got it. So... And just one small thing on the India branded business. So I think previously, you know, couple of quarters started in detail that we try to maintain mid single digit margins or, like, maybe four to 5% EBITDA margin till we reach a certain scale.

36:32 Is there any change in that number? No. No. No. We are maintaining the growth levels. We are aggressively growing the volume and, expanding the brand as much as we can. We believe that there is a lot of headroom still to grow, and we'll keep driving with the same aggression going forward. Got it. Got it. Yeah. Thanks a lot for answering the questions here. Have a nice day. Thank you. Thank you. Next question comes from the line of Shubi Gupta with Asset Managers. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. So, sir, I wanted to understand that we got quite a good feedback for our Malgudi snacks. So I wanted to understand you wanted to launch this, you know, sort of in a broader rollout.

37:22 So I wanna understand how much of this will contribute to our revenues, and how do we see that progressing for us? So we we haven't built a lot of revenues for this. Like last time, we discussed that we we were evaluating feedback and kind of, you know, readjusting our strategy in terms of product and price and all that. And now we have just, you know, as we speak, it's been, you know, five, six days when we have started broadening our base of launch for the snacks. We have now got and we've added some of the couple of new products as well. So, we added banana chips and all to the already existing portfolio of South Indian snacks like chigori and murkus. So that has just been rolled out.

38:10 Our sales are, you know, eagerly waiting to see how the feedback is from the broader market and we'll keep you updated as things go along. So, know, maybe a couple of crores is what we are looking to right now build this year. We are still keeping it focused into some areas. And let's see if we believe that the next phase also is giving us very good results, then probably next year onwards, we'll start, you know, pressing the pedal for much, much higher volumes. But we'll keep you updated probably next quarter, we'll have some more insights into how brand has done with the expanded portfolio and the expanded geographies as well. Okay. Thank you so much.

38:59 Thank you. Next question comes from the line of Richa Agarwal with Equity Master. Please There's a disturbance from the line of miss Agarwal. Can you please make sure that there is no disturbance? Please go ahead. There's still disturbance from the line of miss Agarwal. We'll move to the next participant. That is with Samasa Capital. Please go ahead. Hi. Am I audible? Yeah. Yeah. Yeah. Yeah. You're good. Yeah. Yeah. Yeah. Just one question. I think... I just wanted to understand, are we seeing any opportunities like how we have had Focal? And you spoke about entering The US market with for call, are we looking at some opportunities and willing to look at some acquisitions in terms of brand in B2C plays in different countries?

39:56 They're not very actively because we believe that we have per call to build upon. And we are not actively looking at any acquisitions across the border. So, we want to build both our Indian portfolio for the Indian diaspora and Percol. And we also have a couple of other brands that we had acquired when we had acquired Percol. So, we'll look to build upon those brands rather than at this stage, you know, go for an acquisition. Oh, understood. That was just one question. Thank you. Thank you. Thank you. Next question comes from the line of with. Please go ahead.

40:42 Am I audible? Yeah. Yeah. You're audible. Yeah. You are audible. Thank you. Yeah. Thank you for the opportunity. So you have not previously invited that EBITDA per kg should remain broadly stable, like, around one thirty five to one forty per kg. So Right. But, however, one of your listed peers continues to report EBITDA of around one sixty to one seventy per kg despite low volumes and less share of the dried coffee, while CCL is closer to $1.37 per. So despite operating the same industry, could you help us understand the key factors behind this gap? So, you know, you will have to ask that company about their EBITDA profile.

41:30 You have been tracking our company for last so many years. And you have seen that how we have performed and what is our margin profile, what is our customer profile, how broad based we are, there are, you know, and what is the kind of quality we give. So there are a lot of things that is unfair for me to comment on somebody else's EBITDA per kilo. I can explain you my EBITDA per kilo. That research will have to do with that company. So, can you give about that structural factor behind this gap? Like, what can I don't? I I I just told you, ma'am. So you'll have to ask that company about the structure and factor. How could I kind of comment on somebody else's EBITDA per kilo? You have seen our EBITDA per kilo, you know, both in terms of growth of top line, both in terms of our margin profile, growth of margin, CCL has always worked on a very sustainable growth, long term growth, we have made sure that we are compliant when we grow. So, these factors that are there, which guides our, top line as well as, you know, bottom line. And you have seen our results over a period of so many years and decades.

42:41 So, that's how our philosophies are. Probably, you know, I won't have any insight on somebody else earning more EBITDA per kilo. Okay. So, also, like, broadly, our EBITDA per kg is over around $1.35 to $1.40 even after we increase the share of these trials. So is it like that? Yeah. So in fact, if you were to see last, maybe one and a half years ago, it... Our per kilo used to hover around one twenty five, one thirty kind of a thing. There is an increase. And this increase actually has come because there has been a higher proportion of, you know, freeze dried, there is a bit of higher proportion of small packs that we are doing. So, all of these are contributing to the better margin profile. And we had indicated that thing also that we are constantly making efforts to improve our margin profile. Some of it got, you know, realized little earlier than what we had in this last year, got and that's the reason you saw very good growth of EBITDA last year.

43:48 And, this year, therefore, we are saying that we will continue to maintain that kind of a margin profile or let's say EBITDA per flow, as far as this year margins are concerned. Okay, sir. Thank you. Miss, are you done with your question? No, sir. Thank you. Miss, are you done with the question? Hello? Hello? Yeah. We'll move to the next participant. That is Deepak Ajumira with IGE and T. F. Please go ahead. Yeah. Hi. Thank you for the opportunity. Just one question from my side. Can we provide separate EBITDA per kilo for freeze dried and spread rate?

44:37 We don't kind of get into very detailed numbers, but what we can tell you is that, generally, you know, freeze dried would earn you anywhere between 30 to, 40% more EBITDA than a spray dried as a thumb rule. Got it. So got it. Okay. Thank you. So... But there are a lot of factors, you know, you you... There is a small pack, which also... Because any value addition you do that tends to earn you more margins. Right? So, what kind of product you are doing, what kind of packing you are doing, what kind of customer you are serving. So, are a lot of things that go into play when we are talking of, as I told you before also, it's not a mathematical rule that you earn EBITDA per kilo, exactly same for all customers, all products, all type of packing.

45:27 So all of these tend to play, but yet as a thumb rule, if I were to see on a broader level, freeze dried would earn 30 to 40% higher margin than a spray dried. Okay. Alright. Secondly, I listened to your guidance of 15% volume growth. And what could be the guidance towards b two c consumer business? So b two c will be around 25% growth that we are looking at, 25 to 30%. Got it. Thank you. Thank you. Next question comes from the line of Deepak Saha with Ashita Institutional Equity. Please go ahead. Hi. Thank you. Congratulations, Praveen, and the entire team for this wonderful show. Just a couple of questions on the logistics side, sir. So last few quarters, since the beginning of the world, we have seen logistic pressure... Logistic costs have been kind of going up. What is the situation right now?

46:22 Are we seeing any costs getting softer or any moderation? Just a few thoughts on that. So, you know, there again, just like coffee prices, even the logistics has been a little wibbly wobbly. There has been phases of a week where things started to settle down. So, example, when the ceasefire got announced, then we saw some stability coming. Again, in the last week, ten days has been again certain instabilities. So, that position continues right now. So, there isn't any, you know, clear picture emerging. But the good thing is that our exposure to Middle East at least is not much. So, even with these fluctuations, are able to manage that show. Yes, there are certain cost impacts that are there this quarter, we did face certain cost impacts, not only with the logistics, but also because of, you know, the packing prices and all that, they have been kind of, you know, going up and down. So that pressure is also there. But yes, we have been able to tie it with most of these challenges that have come our way.

47:30 Got it. That's helpful, sir. And secondly, on the... Given the cash that we have built, it's a very, you know, significant level cash that we would have at the end of the year and cumulatively, 05/26 and 05/27. Now in terms of deployment or capital deployment of the cash, are we looking into any kind of potential acquisition, So yes, we are we have started to kind of, you know, open our eyes towards any good, acquisition opportunities. But, you know, as we have discussed in the past also, we will probably not look at a very expensive acquisitions, probably we are looking if at all, we would go for an acquisition, it will be, you know, for a company wherein we are very confident that we'll be able to leverage our spend either, you know, marketing or distribution.

48:35 So and we because I have omni channel distribution, we would love to kind of, you know, look at companies that which probably where we can leverage some of our omni channel distribution network that we have set. So, we are looking at these. Now, as far as the balance cash, I'll just ask CFO to give you a color in terms of some deployment, what are his plans in terms of free cash flow deployment. Deepak, we need to look at that $8.58 crores of operational cash flows that we generated last year. The $8.58 cash $8.58 crores of operational cash flows that we had last year is on account of multi year correction in the sense that there were a lot of working capital inefficiencies that have got in built into the balance sheet, which have been corrected.

49:26 Therefore, you got a disproportionate increase in your, operational cash flows. Going forward, will I be able to deliver $8.58 crores of cash flows every year? It looks highly unlikely because at the end of the day, we do not have negative working capital cycle. We have to procure the inventory, convert it into coffee and then we have to sell it. Right? So we are not into a negative working capital cycle. Therefore, we cannot have a cash flow which is more than my profit. Right? So so so if we can convert a portion of my profit or the path into cash flow, that itself will be a significant achievement given the line of business, even the working capital cycle we have. At the current levels, we are not yet come to be leveraged as we have around 1,200 crores of debt. We will continue to focus on deleveraging and probably reduce our gross debt by additional 100 crores to bring it down to 1,000 crores of gross debt and probably around 800 crores. So since we are taking the surplus treasury, we are still in a, not taking the surplus treasury, but if there are any opportunities, the balance sheet will give us the flexibility to, evaluate that opportunity and, take it forward.

50:45 Got it. That's really helpful. So, basically, the way to look at is our first priority would be, say, debt reduction, then probably the remaining amount is left. We would look for suitable acquisitions. Is that the right interpretation, sir? Yeah. You can take it that way. The the... See, it's... We are not forced to have in debt in the balance sheet, but it should be at optimal levels. Oh, that's fair enough. Yeah. Yeah. That's fair enough. So that's clear. Sir, probably, sir, one one last question on the b two c side. We we discussed last time also, but just taking an update we saw in some of the mature markets where we are gaining market share, the potential for upgrading our take rate also improves, right? So how is that particular part panning out for markets like Bangalore, I mean, Hyderabad, Telangana and even Andhra, right, where we have been kind of gaining market share and we have been a mature player. So are we negotiating on the take rate side that currently we had Earlier, we had versus currently or or in the near term that we're, you know, looking for.

51:45 Take rate as in... This is what you... See. After discount, after the kind of discount and commissions we used to provide after that, the... At MRP level, after factoring in discounts and commissions, the the the end end money that we use in terms of revenues to keep. So are we negotiating in terms of what discounts or better terms for us is to, you know, make the take repetitively better for So, fact, you know, on the supply chain margin front, we are almost now at par with these large companies, large FMCG companies. So, even most of them have a, you know, 10% retailer margin, 8% to 10%, we are also at 10%. Even at the distributor margin, we are at now, you know, 5% to 6% and even the large companies, the Unilevers of the world are at 4% to 5%. So, are pretty much now in line, which is a very, very, very strong sign, of a brand which has gained equity.

52:41 The next biggest sign of any brand that has power in the market, apart from price is the ability to do cash and carry business. Today in the brand side, 70% of our business is cash and carry. This also speaks and we are maintaining this high kind of a growth momentum. This is quite a heartening sign for a brand which has gained equity because cash and carry business in FMCG is done only by brands which have their full power in the market, right. And third thing in the pricing, you know, we have now got huge impact yesterday, my team had, you know, come pick up this thing that their pricing is higher than now than the leaders in the market in a few of the platforms and few of the retail counters.

53:26 So we have started gaining a lot of, you know, power in terms of this thing, which has been, which has been there. So that's really heartening to know and more power to continental brands, really heartening to know. So one last housekeeping question, if you can just tell the growth rate for b two c business, the domestic branded business, Y o Y? So quarter one was around 26% to be precise. That's really helpful, and all the best for upcoming quarters. Thank you. Thank you. Thank you. You. Next question comes from the line of Palak Jain with Passion Research. Please go ahead. Hello. Yeah. Please go ahead. Good morning, sir, and congratulations for a great set of numbers. Sir, my question was if you can guide us for debt repayment for the financial year '27?

54:21 We have around $5.17 crores of term loan outstanding as of now, out of that 140 we get paid in the next three quarters, which means we are left with close to $3.60 crores of debt, which will be out of 360,200 will be in FY '28, and after that 160 whatever is left within '28. So we're talking about 200 crores this year, 200 crores next year, and the balance in the 2028. Okay, sir. Thank you. That helps. And congrats. And hoping for such good numbers for coming quarter. Thank you, sir. Thank you.

55:08 Thank you. Next question comes from the line of Hiren Desai, an individual investor. Please go ahead. Yeah. I have two questions. One is that you talk about maintaining EBITDA per kg at some level. Do you take into account that because of inflation and depreciation, etcetera, you need to keep improving that to generate the same kind of value? So, you know, both, all the costs, be it inflationary costs or be it, you know, other costs, because we do, you know, build up, into our cost plus model, it is naturally taken care, you know, going forward. So, we make sure that all of these are in some way or the other taken care so that this EBITDA per kilo remains intact at least in our constant value terms going forward as well.

56:13 Yeah. So so I have been with the company for three, four years. So earlier earlier days, it used to be like you used to say 110,115. Now we are around $1.35, $1.40. Mhmm. So part of it may be because of product mix, also, other optimizations like packaging, etcetera. Correct. But So, Adil... Yes. Please go ahead. Sorry. I mean I mean, the value of a 100 rupees cannot be as good five years down the line. Yes. So the EBITDA per kg that you work on, shouldn't it, like, grow at three, 4%?

56:58 I'm not saying every year consistently, but over a period of time. Shouldn't you be thinking in that terms? Absolutely. And that's the thought process which probably when you probably you said you're there for three, four years, that's the thought process which has led to these kind of, you know, improvement in the last three, four years. So we definitely are aware of that. And that's the reason, I think, in some of our previous call, mentioned that we are doing three, four things, which will help us kind of keep improving upon that. The fact that we are trying to engage more and more with end customer, the fact that we are engaging with a lot of small pack customers because that helps us earn better EBITDA per kilo, selling, more premium coffees in the market. We constantly do a lot of product innovations with this thing in mind, not only to capture the evolving market trends, but any premiumization also helps you to earn better margins as well. So a lot of work we do kind of, you know, keep doing on a constant continuous basis to make sure that we keep on improving upon this.

58:06 Okay. And my second question is, I noticed a significant difference in stand alone and, consolidated. I don't know. I probably missed first few minutes. So consolidated looks very good, but, stand alone growth as well as margins look, muted. Am I correct in my observation? Yeah. So when you see the numbers discussed Yeah. Yeah. Can you throw some light on what happened? Correct. So, you know, there are two, three things. One is that when we are doing quarter to quarter, and that's the reason we always say that probably see it in a look at the numbers with a larger horizon perspective because there are quarter to quarter differences that do creep in, in terms of when you look at the business at smaller business units, right? So for example, when you're seeing standalone, this year and just before your question, I was answering Deepak's question, wherein we saw a lot of impact of logistics, small packs, which is only done from India, had the biggest impact in terms of packaging price increase and things like that. So that made the India business to bear the brunt of these price fluctuations.

59:27 And when you compare it with the last quarter, same last year, the same quarter, you will see a reduction. But that reduction is only because the last year basis were also high for the standalone business. If you compare the performance with the last quarter, which is the quarter four of last year, you will see that the performance is completely or exactly in line with that performance. So there is no cause of any worry. It is more of a baseline effect, more of a, you know, short term effect of logistics and, small pack, packaging price fluctuations that we saw this year going to the, you know, Middle East crisis. But otherwise, the business fundamental remains very, very strong. Okay. If there is structurally no issue, yes, I'm happy. And congrats, I yes.

1:00:20 Want to add one more point to this. Addition to what Praveen just mentioned, whatever expansions we have done till now, we've always done it in subsidiary entities for multiple reasons. So our capacity in the parent company has been constant for the last more than ten years now. So that's why there won't be any volume growth that comes in from the parent company. So going forward also, majority of the growth will start coming in from the subsidy company Salliem. Okay. Okay. Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to management for closing comments.

1:01:11 Yeah. Thank you, Deepak. Thank you, Ashita Securities, for holding the call. It was a pleasure interacting with all of you. We look forward to meet once again in the next quarter. Thank you so much. Thank you. On behalf of CCL Products (India) Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.