Ladies and gentlemen, good day and welcome to the CCL Products India Limited Q4 FY 2021 earnings conference call, hosted by Nirmal Bang Equities Private Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Navalgund from Nirmal Bang Equities. Thank you, and over to you, sir.
Thank you, Sanford. Good evening, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to Q4 FY 2021 earnings call of CCL Products India Limited. From the management side, we have with us Mr. Challa Srishant, Managing Director, Mr. K.V.L.N. Sarma, Chief Operating Officer, Mr. Praveen Jaipuriar, CEO of Continental Coffee, Mr. V. Lakshmi Narayana, CFO, Mr. PS Rao, Consultant Company Secretary, and Ms. Sridevi Dasari, Company Secretary on the call today. Without further ado, I would like to hand over the call to Mr. Srishant for his opening comments, and then we'll open the floor for Q&A. Thank you, and over to you, sir.
Yeah. Thank you for the introduction, Abhishek. I'd like to welcome everyone to this call, and I hope everyone is keeping safe during these difficult times. As far as the company is concerned, despite COVID last year, we are pleased to declare the following results. The turnover for the financial year 2020-2021 was INR 1,245 crore as opposed to INR 1,143 crore of the previous year. The EBITDA was INR 301 crore as opposed to INR 290 crore from the previous year. The profit before tax is INR 234 crore as opposed to INR 225 crore from the previous year. The profit after tax is INR 182 crore as opposed to INR 165 crore from the previous year.
For the current year, the guidance that we are giving is in the range of 10%-15%, which is again going to be subject to a lot of variable factors, especially COVID, how things pan out going forward, how strict the lockdowns are, and these variable factors which are not in our control. We will endeavor to do our best to achieve growth trajectory like we've been doing in the previous years as well. We can open up the floor for questions.
Thank you very much, sir. Ladies and gentlemen we will now begin question-and-answer session. Anyone who wish to ask a question may press star then one on their touchtone telephone. If you wish to remove yourself from the question queue you may press star then two. Participants are requested to use handset while asking for questions. Ladies and gentlemen we will wait for a moment while the question queue assemble. To ask a question please press star then one. The first question is from the line of Jignesh Kamani from GMO and Company. Please go ahead.
Hi, Srishant and entire team. Congratulations for a good set of numbers. Srishant, I just want to know on the container availability. Last quarter and third quarter, we mentioned that close to INR 50 crore-INR 60 crore of quarter product we couldn't dispatch because of the container availability. Safe to assume that entire product got dispatched in the fourth quarter and right now there's no issue on the container availability?
I think most of these questions, Mr. Sarma will answer.
Okay.
Right. As I told in the last call itself, we optimized our business operations by utilizing incoming containers and all that. You would see in this quarter, last quarter particularly, our dispatches were high. If you see our financials, you will see that the whole inventory has moved up. There is no accretion to the inventory. That means we were able to dispatch substantial quantities. On a continuous basis, we will have some inventory for which the schedules may not have been there and the pre-shipment samples must not have been approved and all that. During March, we were able to substantially solve this issue and was able to dispatch major quantity.
Understood. We had accumulated arrear of close to INR 28 crore from the MEIS subsidiary. Anything we received in the fourth quarter or still we haven't received anything?
In the fourth quarter, we did not receive anything.
Okay.
No, we did not receive anything.
Okay. Understood. My last question on the Russian demand has been pretty weak because of the COVID lockdown. How is the current scenario, particularly for the high margin freeze-dried coffee?
That has actually started recovering from last quarter itself. That's one of the reasons why there was an increase in sales and dispatches also. The same thing is happening this year as well. A lot of things are coming back to normal over there. Russia also, they've taken a lot of proactive measures and all that over there, so things are significantly improving there.
Understood, sir. Thanks a lot. I will come in queue for a follow-up question.
Yeah.
Thank you. The next question is from the line of Mayur Patel from IIFL Asset Management. Please go ahead.
Just one question. Overall, the performance I think was very good. Any reason behind the softness in Vietnam? How do you see the recovery in Vietnam going forward?
Vietnam, we did optimum utilization during the current year, and will continue. In fact, we are enhancing the capacity there, so we are expecting a better performance in the coming years.
Also on the margin front, do you think that Vietnam margins will improve going forward?
Vietnam margins will improve on various fronts. One is, of course, the superiority of the product itself. Because we are in the heart of coffee land, the working capital requirements vis-a-vis working capital cost, et c, finance cost will be lesser. In fact, one other thing to be noted is that the original plant is also getting depreciated in two, three years. The depreciation on account of the old plant might also come down. There is a possibility for improvement of margins in Vietnam as such. Of course, right now we are doing some line balancing and augmenting the capacity. We are seeing a better traction, and we might be inclined to double the capacity very soon.
Sure, sir. Thanks a lot.
Thank you. The next question is from the line of Rupin Shah from InCred Asset Management. Please go ahead.
Hi, Srishant. I have a couple of questions. First on gross margin. We have shown a sharp sequential improvement in last quarter. YoY same. Is there any seasonality in 4Q that the company will report the higher gross margin in 4Q every time, or it's mainly because of the change in product mix towards the freeze-dried portion? Is it sustainable every quarter basis now?
I will answer it myself, I must say. During the last quarter, freeze-dried dispatches were substantially high. It depends on the product mix. If I'm selling most of the small packs and all that during the quarter it might vary. It is better we always take it on a YoY basis because this cannot exactly replicate in the subsequent quarters.
During last quarter, et c, since that being a season, people wanted a packed product which can go into supermarket directly. Maybe during summer season, they may not want the product in a packed form where they will purchase in bulk, where these gross margins, et c, will get changed. On a YoY basis, there is a consistency. It is sustainable as well.
Okay. Srishant, can you specify the contribution from Freeze Dried currently in volume in 4Q and FY 2021?
FY 2021, we were able to operate our freeze-dried capacity only to the extent of about 62% only because of the compulsory lockdown that we went through, because of the Russian orders deferment and all that. This year there should be an improvement on that.
Okay. Secondly, on volume guidance, you have given 10%- 15% volume growth for FY 2022. Can we take two scenario, keeping in mind two scenario. One is the same situation of logistic issue currently you are facing. What kind of volume growth is possible considering the current situation? The second one is, we will see some good improvement in the space and the lower freight rate benefits, then what could be the volume growth for FY 2022?
What was the second one that you mentioned?
Yeah. In two scenarios. First is the same scenario.
One is on the logistic thing. Second one?
Yeah. In second one, the improvement from here, like the space availability and the lower freight rates. What kind of volume growth one can see for FY 2022?
The disruptions are there, and perhaps we must have made a small discount for these disruptions as well. Confidently we can say it will be, as I stated, 10% or so at present. We will review at the end of first quarter or around second quarter, whereby the peak season commences. By that time, if there are no further disruptions and things ease out, maybe we will revise it to a better figure later.
Okay, understood. Lastly, Srishant, in this tough phase, when you don't supply to your overseas clients on timely basis because of some system risk, what is your experience in terms of relationship with the client? Do they discontinue it completely or for short term, they arrange for somewhere else, or they simply wait for the things to normalize?
Last year disruptions were worldwide. It is not very specific to India as such. There was no alternative source for them also. In fact, in many cases, we have taken initiative to organize faster supplies wherever they are not able to manage containers or logistics from their end. We have managed and sent them. There were no major complaints from the customers because all of them knew that this has been the case.
Perhaps, second thing that we are doing, what we have been doing is that we have a warehouse in U.S. and our own custom bonded warehouse in Switzerland where there are some stocks. There was no desperate situation that has come to any of our customers as such. Of course, the delays were there to the extent of reorder levels or minimum levels to be required, but there was no total out of shelf situation in any of our customers' places.
Okay, great. Thank you.
Okay.
Thank you. The next question is from the line of Hemanshu Iyer from YES Securities. Please go ahead.
Yeah. Hi, good afternoon, team, and congrats on a good set of numbers. Just wanted to understand the current quarter numbers. If you can give some more details as to what has happened in Vietnam, because if I do the calculations, the margins seem to have come off sharply from historical levels. While it's completely reverse in the India business, margins seem to have made new all-time highs.
I'm talking on an EBITDA basis. Even on the top-line front, the momentum that we were seeing for the last couple of quarters, sequentially it looks as though the utilizations have come off. Is it a one-off issue where some shipments are stuck out there or is it something else? If you can just explain the Vietnam performance for this quarter.
Vietnam current year I mean, we are speaking about the year that has passed, 2021. 2021, we are almost consistent in Vietnam. See, quarter- to- quarter, there may be a few variations here or there. One of the customers may have asked for a small rescheduling and all that. Otherwise, there is no major large variations in Vietnam.
Understood. Second thing, sir, the enhanced capacity, when is that now expected to come on stream? Because I believe there have been some delays in that.
Yeah. There are no travel facilities available, and even if one of our people-- There is only one flight operating there, in which also only the diplomats and others have a preference. Business has the last preference in that. Even after going there is a 21-day quarantine. For any technicians to go and work on the expansion part, the person has to plan at least one month in advance. Still, we are almost at the stage of completion phase, and the facility should be most likely available from the first quarter end. July 1st onwards, it should be available for production.
Understood. Sir, for the year as a whole, can you give the broad capacity utilization numbers separately for India and Vietnam?
For the previous year?
Yeah. For the previous year, the whole year, FY 2021. Yeah.
We have done about 60%, 61% on FD, and then Vietnam, we have done an optimum utilization of about 94%, 95%. Duggirala, there have been disruptions. We have done about 65% or 70% there. There is a large product mix within that, so we cannot exactly bring it to one single figure because of the enhanced small packs capacities and all that. About 75%, we could do it last year.
The Chittoor plant, which was expected to optimize, that you have run at only 60%, 61% for the year, right?
No. I have taken the total FD capacity. We do not differentiate because it is a second unit for the main plant.
Okay.
We have considered the total FD capacity and did it.
FD, you did 61% and spray-dry you did 70%, 75%. That's what you're saying?
That is correct.
Understood. Sir, final question, if you can just update us on the India business performance for both the quarter as well as the year in terms of the top line and the loss that we would have seen?
The figures are good, Praveen will explain better.
Sure.
Praveen?
We touched a top-line turnover of INR 150 crore, which is a substantial growth over last year, where we were close to INR 90 crore. We almost witnessed around 60%-65% growth on the top line. As far as the bottom line is concerned, we were almost breaking even with a little marginal loss this year because of higher input costs that the bean prices went up. There was a very marginal loss this year, which was approximately INR -5 crore and round about. That’s where we are.
Any outlook would you want to share, sir, for this year for the India business, given we are seeing very strong traction?
Yeah, we did see a very strong traction. Currently, the second wave has actually, now that our bases are also reasonable, and the second wave has hit quite badly in terms of, and you must be reading all across, in fact, every sector and segment is more affected this year than last year. We really don't know. We were looking at a growth of 30%-40%, but probably if things normalize from July onwards, then still we can look at a 25%-30% growth this year. A lot will depend on how quickly things settle down, because everywhere we are seeing lockdown, which is hampering the logistics and supply issues are there.
Once again, our institutional segment, which started to pick up in the last quarter when slowly the hotels, the airlines, the offices had started opening, where we started doing a decent amount of business in the last quarter, has again gone back to shutdown mode and the business has come down to almost zero there. That’s something to be worried about, but we’re just hoping and praying that things settle down from quarter two.
Sure. Just one final question, if I may squeeze in for Srishant, maybe. I mean, seeing the price trends that we are currently witnessing on coffee, and given the 10%-15% volume growth guidance we are giving. Finally, can we see a year when we can see, say, a much higher growth in revenue because of better realization? Do we have that sort of visibility yet?
Actually, whatever is the price increase that we are seeing right now is mainly because of Brazil. In Brazil, they’re saying because of the water shortage and all that, the Arabica prices are going up. If you look at it in Brazil itself, the Robustas, there’s an excellent crop. There is no shortage. There’s a higher crop than what was there in the previous years. All the other countries which are growing Robusta, including Africa, Vietnam, Indonesia, the Robusta crop has been really good. More than 90% of what we buy is Robusta.
There is not that much pressure on the Robusta prices for it to really go up. If Arabica is going up, Robusta may be moving as well. In differentials, there will be a change from positive differentials, you’ll have negative differentials, which is why though there is a slight increase, we’re not sure how sustainable that is in the long run. We are still going on the assumption that the green coffee prices will be similar to what they were in the previous year. As everyone’s already aware, since anyway we work on a cost-plus basis, that impact is going to be quite minimal for us when it comes to margins and all that.
Understood. All righty. That’s it from my side and all the best to you.
Thanks.
Yeah, thank you.
Thank you.
Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference call, please limit your questions to two per participant. For any further questions, you may come back for a follow-up. The next question is from the line of Rahul Ranade from Goldman Sachs Asset Management. Please go ahead.
Thanks for the opportunity and congrats for the good set of results. Just if you can kind of remind me of our capacities existing. Is it right that India has around 25,000 of installed capacity and Vietnam has 10? Is that the number?
Yes, that's correct.
Currently.
We are expanding in Vietnam now.
Okay. Currently it is 10, and then where would Vietnam capacity go to?
13,500 initially.
Yeah, 13,500. 3,500 additional. All right. Within India for the 25,000, it is 15 and 10 between sprayed-dried
Yeah.
Okay. Just one more question. On the retail business, India business top line, which you said was INR 150 crore. Out of that, how much would be the Continental brand of coffee and how much of it would be institutional?
Almost 2/3 will be brand and one-third will be institutional. You can say INR 100 crore almost will be brand and INR 50 crore will be bulk and institutions and private labels.
Okay. Would this proportion be similar for last year also, for 95% odd growth?
No, last year, the brand saliency was lower. It was almost maybe 55% or so. It has moved up to 66%. We are constantly, the brand is growing much faster than the bulk and the private label business.
Understood. Just on our ability to maintain spreads. Obviously you kind of mentioned just now that since it is a cost-plus kind of a model, just wanted to understand in terms of timing leads and lags, how does the repricing happen? When the prices are moving so fast, could it kind of induce some volatility in the margins in the near term?
It depends on the contract to contract. Customer's requirement of the product and we discuss every contract individually. That contract will be based on the prices existing as on that date or within that vicinity basing on which. As a business model itself, we cover green coffee on a back-to-back basis immediately on concluding the contract. This all customers also knows. That price for that contract is valid until execution.
There is no change on it. If one week later the prices come down, the contracts that are made during that period will be based on the green coffee prices. Of course, it's a combination of green prices vis-a-vis material availability as well. Many a time the quoted price, there may not be stocks available. We take both of them into consideration and quote that. Every contract is independent and is concluded basing on the then raw material price.
Understood. Just one last question. If you could kind of comment, ballpark kind of a geographical spread of our end markets, how much of it would be somewhere in Europe versus Russia, some Africa. I think U.S., we are not very well penetrated if my understanding is correct.
U.S., we are in fact for the past two years, we are making an earnest effort to improve our presence in U.S. We were around 10% in U.S. earlier, which in the near future we should be improving anywhere to approximately 15% or so. Generally, our solid existing percentage of sale would be about 25% in Europe, 25% in Russia and CIS markets, and then the others are spread over Africa, Asian countries and other places.
Understood. I'll follow up.
Excuse me, this is the operator. Mr. Rahul, you may be requested to come back in the queue.
Yeah. Thanks.
Sure. Thank you. The next question is from the line of Jignesh Kamani from GMO and Company. Please go ahead.
Hi, Srishant. On the Vietnam, we are operating at optimum level and even after July, the capacity of 3,000 probably will be fully utilized in say six months or nine months. Any plan to double the capacity expansion at Vietnam because we already have all the infrastructure in place?
We are working on it actually. Maybe soon you will hear that we are doubling the capacity soon. We are also evaluating the visibility of order book for that. We already have something concrete that is coming up. Maybe we will initiate, we will start the expansion in Vietnam by about September or so.
It will take around one year to complete, right, once we initiate.
This may not take one year. Our supply time of equipment is one factor that is there during these COVID situations. Outer would be one year. Otherwise, we should be able to implement within nine months time.
Sure. Second thing on the small pack, how will the small pack volume growth rate in this year end with considering capacity expansion? How will the small pack volume growth for the next year?
In fact, we were able to compensate some of the lower utilization of freeze-dried with our small packs. The small packs, the packing plant erection was delayed because of this COVID situation and all that, but by that time we have already procured the machinery for the packing plant. We were able to put those into operation and enhanced our small pack capacity this year. Because of which we were able to compensate the reduction in freeze-drying turnover.
Going ahead, already we have spread substantial visibility for our small packs in various markets. I do not wish to mention specifically, but various markets, we have already created a visibility for small packs. We are expecting for at least from this year by around August, September, we will be on full scale small pack capacity. We will utilize it for the full peak season starting from October. Next year, we should be doing optimum utilization on small pack capacity as well.
Thank you.
Thank you. The next question is from the line of Dhiral Shah from PhillipCapital. Please go ahead.
Good afternoon, sir, and congratulations for the great set of numbers. Sir, if you can share the revenue and profit figure for Vietnam as well as Switzerland facility?
Come again. I could not hear. Lakshimi , did you hear?
No, I didn't hear.
Hello, am I audible?
Yeah, now.
Can you just repeat?
Sir, if you can share the revenue as well as profit figure for Vietnam as well as Switzerland facility for FY 2021.
Vietnam, I think we did about INR 375 crore turnover with a profit of around INR 85 crore.
INR 85 crore. Sir for Switzerland?
Anyway, Switzerland, it is a trading house only. We did a turnover of INR 180 crore. I think the profit was about.
INR 7 crore.
INR 7 crore, sorry. Yeah, INR 37.
Sir, this INR 180 crore includes sales from India. I wanted to know the value addition part.
Net-net, I think, the value addition was about INR 20 crore.
INR 25.
INR 25.
Yeah.
INR 25 crore, of which INR 7 crore is the profit.
Okay. Sir, what would be our ad spend target for current year for our domestic business?
Approximately INR 12.5 crore.
Okay. How much parent company would be contributing?
This is what parent company has done.
Okay. Sir for the overall business, sir?
Overall ad spend, is it?
Yes.
Somewhere around INR 15 crore-INR 20 crore.
Okay. Sir, what would be the CapEx for FY 2022?
FY 2022, as of now, whatever we are online, we will be concluding them. The packing plant will be concluded. The line balancing of Vietnam will be concluded. Once we conclude our project cost and based on the delivery schedules, if we are going for Vietnam plant, that would be there. If at all we spend anything, it should be in the shape of advances and any initial amounts, which could be in the range of about INR 8 billion-INR 10 billion this year.
Okay. Sir, lastly on the debt part, sir, we have seen the sharp rise in short-term debt.
This year?
Yes, sir.
There has been an increase. This is a twofold thing. We are a company where we cover our raw material, et cetera, on a back-to-back basis irrespective of the delivery schedules of the product. If you have seen our inventory, particularly our green coffee inventory has gone up substantially because we have concluded contracts for the next year. We had to cover those green coffees not to get hit by any price fluctuations. If you have seen our inventory levels have gone up. To get those inventory levels, the additional borrowing on short-term was taken.
Okay. Sir, any debt reduction plan for current year?
Anyway, there is a repayment scheduled of approximately INR 84 lakhs repayment is scheduled this year, so it will come down as such.
Okay. Thank you so much, sir. That's it from my side.
Yeah.
Thank you. The next question is from the line of Akhil Parekh from Elara Capital. Please go ahead.
Hi, Srishant team. Many congratulations on a good set of numbers. Just two questions from my side. One is on the small pack. How much is the capacity right now and how much we are expected to increase starting first quarter 2022? Second is on the volume front, if you can guide for the U.S. market. That's all from my side. Thank you.
Last year, I think we have used about 5,500 tons small packs. The capacity that we are installing is for 12,000 tons. It will be available for full-scale production somewhere around third quarter, towards August, September of this year. We should be utilizing almost the same capacity this year also. Year subsequent, it will be more. The second is U.S. guidance. Srishant, can you tell?
Yeah, just small pack you said from 5,500 tons will move to 12,000 tons, right?
12,000 tons is the initial capacity being created.
Okay.
Last year we have done approximately 5,500 tons on small packs. This year also, we should be doing more or less the same figure or a little more. The optimum utilization will come for next year. This year we have to install those machines and all that is there. There will be some small disruption in small pack capacity this year.
Got it. Sir, on U.S. front?
Yeah. As far as the U.S. is concerned, as Sarma mentioned earlier, around 15% of our production is going to the U.S. market. We are consistently growing that volume. There are a lot of new initiatives that we are taking over there. Till now, U.S. market has always been only a bulk market for us. Slowly, that is transitioning. Last year, we've actually introduced our cold brew coffee in the U.S. We're the only company in the world that can actually make this particular product. That became a really big hit, and we got an order for almost 20 containers, which was fully executed in small packs to one of the large supermarket chains.
Seeing that, we've actually started getting inquiries from different other parts of the world, where they've seen these products in the U.S., and they've asked us to introduce in their respective countries as well. Similarly, we are getting into more of small packs in the U.S. market itself. We are having tie-ups with several organizations to start introducing small packs. There's a change. This is a more long-term effort that we are looking at. Bulk is being extremely competitive, that's one of the reasons why we are going more towards specific qualities and specific brands in this particular market. All these efforts will keep giving us better dividends in the long term.
Sure. Just to tie up this thing, basically, as we go ahead for next two, three years, we'll see a higher contribution from small packs, and which hopefully should help get us better realizations.
Yes.
Okay. All right. Thanks a lot best wishes for coming quarters.
Thank you. The next question is from the line of Rohan Gupta from Edelweiss. Please go ahead.
Yeah. Hi, sir. Good evening and many congratulations for this fantastic set of numbers. Sir, just one clarification first on both this very solid margins in India business and the weak performance of the subsidiary. If you can just once again elaborate a little bit more on that for the current quarter, sir.
Current quarter, the subsidiary business was in the normal course. We were focused on recouping whatever was lost in the first two quarters and all that. As you know, we have been telling that the freeze-dried inventory has built up, and then we are having problems initially with suppliers' reschedulement and subsequently with logistics.
We made an enormous effort and got these two things solved. Also during this year, particularly as I told you, towards the second half of the peak season, the customers would want to get the packed products so that they will not have time to get it repacked elsewhere. We were doing a packed product also from here. Both these have contributed to higher gross margins-
In each other.
...the other expenses, there will be an additional packing cost also. If you deduct that, it will look normal only. In respect of small packs, the turnover looks higher, and there will be an increase in packing costs also.
You are seeing that the small packing has been done more in the India market rather than in Switzerland, and that has led to.
The entire small pack capacity is in India only. It is not there in Switzerland. It is not there in Vietnam. We are contemplating to establish small pack capacity in Vietnam in due course. Currently, all the small packs are done from India only.
Okay. This current trend, which you have observed that customers demanding in a ready pack than a small pack, that is more to do with the current pandemic scenario, or it's more of that we have been able to take the higher share?
Seasonality also. See, he will not have time to get a bulk product, get it repacked elsewhere, and then get it to the supermarkets and all that. Instead, we supply the direct product in a packed form, which can directly go into supermarkets. It will be better for him. He would be rather willing to pay a little more price there because he will be avoiding an intermediary there.
This may not be a case with the first quarter or second quarter, which are lean periods, where he would look for competitiveness and other things. We have to take the overall thing on a year YoY basis. On last quarter, we will have the small advantage. You will know, these are spot prices kind of a thing. During the peak season, the spot prices will always be higher, no?
Okay. That's helpful. Sir, second question is on the green coffee prices, which has been surging. You mentioned that Robusta prices are more or less likely to remain flat, and it's basically Arabica where one can expect the higher prices. The inventories, sir, which you are right now sitting on a huge inventory of green coffee. Do you think that we are not going to see any sort of price-led growth in FY 2022 despite global green coffee prices are continuing to surge?
No, see, if tomorrow I am concluding a contract, I will take tomorrow's price. Tomorrow's price is an inflated price, obviously it will go into the pricing. Our experience has been that when there is an inflationary trend in pricing, obviously customers would want to wait for a while to reduce the price and conclude the contract.
Similarly, it also happens that during the times when the prices are in deflationary trend, they would want to conclude major contracts, but we will have to resist basing on the material availability at those prices. These things will be going on a continuous basis, and over a period of one year, all this will get neutralized. More or less neutralized. Maybe at some point you might see a little increase or decrease in the turnover levels.
No, sir. What I wanted, that generally in our business, as you rightly mentioned.
Mr. Gupta, we may request you to come back in the queue, please.
It was just only clarification on the same thing, if I may proceed.
Yes.
Okay, sir.
Yeah, go on, sir.
Sir, I was just saying that the green coffee prices, you said that you are sitting on a huge inventory now. As you also mentioned that as per your business model, you generally enjoy the per kg margin. The green coffee inventory which you are sitting, I expect it is not on a speculation, it is basically driven by the increased order from the customer, right? When your customer has already given you order, you are already sitting on a green coffee inventory. Even the green coffee prices have gone up, it will not get reflected in our revenues or the price-led growth.
The green coffee that I have covered is in our physically available with us or available overseas, is against concluded contracts. Those contracts will have this green coffee price only. I will not have any additional advantage or disadvantage on the subsequent prices, no. The one thing that is an indicator is if I have a large stock of green coffee with me, that clearly indicates that for the next year, my confirmed order book is substantially better.
Exactly. Yeah. Correct.
That is what we have to take into account.
Right, sir. Right. That's what I just wanted to conclude. Thank you, sir. Thank you so much. I'll come back in queue for any follow-up question. Thank you.
Thank you. The next question is from the line of Amit Zade from Antique Stock Broking. Please go ahead.
Good evening, sir, and congrats on good set of numbers. Sir, most of the questions are answered. Lastly, on this clarification of MEIS scheme. Sir, there is a replacement scheme called RoDTEP. Any clarity on that scheme, sir? What could be the rates or any update on that side?
It continues, Lakshmi Narayana, that the EOUs are not eligible?
You are not eligible. About the new scheme, they had to come out with the modality.
Yeah. Currently, the revised scheme is not applicable to EOUs and SEZs.
Okay.
They just mentioned that, but they did not come out with the detailed modalities on that. We are awaiting that. Having said that, we have an accumulated amount of about INR 27 crore or INR 28 crore towards the MEIS for the exports already made. We are expecting that substantial part of it can be realized during the current year.
Got it, sir. One more question. Sir, the volume guidance of 10%-12% on a low base of FY 2021, wherein we lost almost first quarter and even second quarter FDC volumes, and on the back of our new capacities coming in Vietnam from second quarter onwards. Is that a conservative number or you believe that there would be pressure on FDC products globally because any trend emerging due to people consuming more of NPC products and instead of FDC? Any color on that side as well, sir?
Yeah, I understand. I agree that the base number is lower, the denominator is lower, but the conditions have not improved as of now. Suddenly, again, during this year also, this pandemic and lockdowns, et c, are running. We do not know what is going to happen. That is why initially, on a minimum scale, if we recoup whatever FDC, et c, we have lost last year, that will account for that 8%-10% that we have been telling right now. If things are proving better and business can be done much better, we will revise the numbers. We will review and revise the numbers in September after second quarter.
Got it, sir. With easing of logistical concern and maybe lower customer deferrals, and I think we can do much better, in what I believe. That's it from my side, sir. Thank you and good luck.
Good. Thanks.
Thank you. The next question is from the line of Sameer Deshpande from Fairdeal Investments. Please go ahead.
Hello. Good afternoon. Congratulations for the very good numbers. Actually, I wanted to know regarding the MEIS, you mentioned that INR 28 crore are accrued and due. Have we accounted for that INR 28 crore in the current year's income?
No, right from the beginning, because this is a scrip given after realization has come, and then we get a scrip sanction from the DGFT. Right from the beginning, we have taken a policy wherein we are accounting this on cash basis. Only upon realization, we are accounting this. We are not accounting them on accrual basis.
Okay. That INR 28 crore may be accounted for in the current year, that is 2021-2022, whenever it is received.
No, no. Exports have gone in current year and last year. I mean, last year and the last year before. The MEIS has not been accounted on an accrual basis.
Oh, okay.
Right from the beginning, we have been accounting only upon cash basis, only upon realization of the scrip.
Sure.
As you rightly said, it will be accounted during the current financial year.
Okay.
We are expecting that we will realize, and then as a terminal benefit, if the scheme is getting abandoned, as a terminal basis, we will account for this year.
Okay. This new RoDTEP scheme may not be applicable to the company, you mentioned, no, recently?
No. The modalities are yet to be announced by the Ministry of Commerce. We are awaiting for the guidelines about the new scheme and its applicability and the benefits that we derive out of it.
It is not yet final also.
No.
Okay. Europe was, particularly Italy, Germany or France, all these were facing lockdowns, so the restaurants et cetera, were closed for a long time. With this reopening, do we see any better growth for Europe for us?
I think we have. In fact, last year also, we did not face a major drop down in our European exports, but definitely with life coming to normalcy, there would be an improvement in the growth.
Okay. How much is the European contribution to our total sales?
Normally, it will range between 22%-25% in our total exposure.
Okay. Thank you, and all the best.
Yeah.
Thank you. The next question is from the line of Binal Jariwala from Sunidhi Securities. Please go ahead.
Yes, sir. Thank you for the opportunity. The question is on the branded business in India. I just wanted to understand what is the size of the market, what is our market share and our distribution reach.
The total instant coffee market is around INR 2,000 crore and as I told you a little while ago, our branded business was almost INR 100 crore, so we are close to a 5% market share. There are pockets where we are doing better than the overall average, wherein we are more than 5%. Every geography we are witnessing good growth in market shares every quarter. That's on the market size and market share for us.
Okay. How about our distribution reach and what would be the total distribution?
Yeah. We currently are directly reaching around 1 lakh outlet, 95,000 to be very precise. Of course, our distribution expansion did take a hit because first six months we could not do any distribution expansion. It's only in the second, the third quarter and the fourth quarter we started and considering the kind of situation, it was difficult to do distribution expansion because, difficult to find the right set of distributors in this scenario. That's the direct reach that we are having right now. We are looking to substantially upscale this, and probably end the next year at around 1.5 lakh outlet reach.
Understood. You said direct is about 95,000 outlets, but what would be the total reach?
Total reach, we don't get that detailed this thing. Right now we are a very new brand. Generally the indirect reach for new brands and brands which have just started their journey is not substantial. It's only at a later stage when the brands get started to get that pull from wholesale market that your indirect reach will go up. If you were to ask me to put a finger on a number, it won't be more than 10,000-15,000 currently.
Understood. How does-? Sorry.
Yeah, sorry.
Yeah.
Please go on.
No, sorry. Please go on. You were
I was saying that, generally one would look at a 1: 2 kind of a ratio for an indirect reach, especially for very small packs like sachet. As I'm telling you, as we go along, as we pick along, the indirect reach will start going up as well.
Correct. Our reach of roughly about 1 lakh outlet?
Yeah.
The two large-
Excuse me. This is the operator. Mr. Jariwala, maybe I need to come back to you.
Your voice got cut in between, so I couldn't hear you. Can you repeat that?
Yeah. I'm saying our reach of about 95,000 outlets, how does that map against the two large players? Where would their reach be?
Their direct reach will be anywhere between 5 lakh-7 lakh outlets.
5 lakh-7lakh .
Their indirect reach would be beyond 10 lakh outlets, 10 lakh-12 lakh outlets maybe. Yeah.
Understood. I'll come back and talk to you. Thank you so much.
Thank you.
Thank you. The next question is from the line of Jignesh Kamani from GMO and Company. Please go ahead.
Hi. Government recently announced a PLI scheme for the food. Is there anything for the coffee sector in that PLI scheme, and are you exploring anything on PLI scheme?
PLI is not applicable to us. We are not falling into the scheme. Based on the announcements that have been made so far, we may likely to fall under the Remission of Duties and Taxes scheme, but the scheme is yet to be finalized.
Okay. On the Duggirala plant, we recently done the upgradation. Any beneficial in terms of production volume growth or the reducing the manufacturing cost?
No, of course, it will add to the margin anyway. It will improve the productivity, in fact, yield parameter and other things. It is not a quantity expansion. There will not be any additional quantity that will come, but there will be a cost reduction and perhaps a little more yield.
It's a range in products also.
It's basically optimization.
Understood. Sure. Thanks a lot.
Thank you. Next question is from the line of Manish Mahawar from Antique Stock Broking. Please go ahead.
Yeah. Hi, sir. Just most of the question has been answered. Just two questions. One, in terms of FY 2022, you have given a volume guidance of 10%-15%. Basically, your margins will be better off in FY 2022 versus FY 2021 because what I believe FY 2021, your SP guide was gone up because of the U.S. customer as well as Vietnam, and your freeze-dried was lower because of recession demand. It should improve in FY 2022, right, sir?
Surely, if we are able to improve. Last year, freeze-drying capacity was lower. If we are able to improve that freeze-drying capacity, margin profile will also go up. Also this year, we are anyway adding small pack capacity. If we are doing any incremental thing on that, it will also go up. This is a continuous process of improving the margin along with the volumes. We address this on both counts. One is increasing the volumes, second, improvement in margins as well, which will contribute by way of additional freeze-dried in the product mix, as also the small pack capacity.
Okay. Second question, in terms of the CapEx plan, basically you said whatever pending plans we have, which we will execute in the next year, FY 2022. What will be the cash outlay in the next year, sir, FY 2022?
Lakshmi Narayana [Non-English content ]?
There is a balance CapEx, it is likely to be around INR 50 crore-INR 60 crore.
INR 50-INR 60 crore. Capital WIP, which is standing at around INR 148 crore, right? Which will be deployed.
Right.
Okay. Understood. Last question, sir, if I may. Is it possible to share the volume growth for this year and the Q4? I'm not asking for an absolute number, but volume growth.
Considering that the green coffee was more or less flat, around 10% was the volume growth.
For the whole or for the year?
Yes, for the whole year.
Okay. For Q4, any chunks to share?
Pardon, for?
Q4, for the fourth quarter.
I mean, can't give the exact specific details, no? It'll be again counterproductive for us.
Okay. No issue, Srishant. All the best, and maybe I'll discuss with you on our plan. Thank you.
Thank you. The next question is from the line of Rahul Maheshwary from Ambit Asset Management. Please go ahead.
Good evening. Hope I am audible. Am I audible?
Yes, you are.
Yeah. Good evening. Hope all is well at your end. Sir, just two questions. First, as you mentioned that the inventory is high and there is a strong demand which has been booked for the next year also, sir, can you highlight that how many during the year, not by naming it, but in case any client which has got been canceled or is just a deferment that has taken place, and anything which you want to share or highlight or color on any number of clients which has been added or which are in the pipeline which can be added going forward in next two to three years?
Once you had mentioned that it takes an entire long process to get a client on to onboarded because it's a long-end relationship which is there. It would be very helpful to know a qualitative statement on this part.
Praveen sir?
Yeah. During the last one year, most of our customers, what we have seen is they're not looking at making any drastic changes. Nobody wants to take too much of a risk during this COVID times. They want to work with people whom they know, or already have an existing track record with. We're not seeing too many changes from customer side. Fortunately, in light of the fact that everyone has had one full year of experience with COVID, they're able to project a little better and give us the volumes as well. We don't have any cancellations till now. There's no postponements that anyone has asked for. Hopefully things will improve going forward.
Sir, just to ask a follow-up on this. As you mentioned that there is a transition taking place from bulk to more small packs and value added, can you give some kind of cross-sell that the existing client, which is there from so many years, any rough range, how much is base product and how much is a value added product, so that it helps us to know how the margin accretion journey is taking place for CCL?
Sarma, can you take this?
In fact, [Karan], last year was the first year in which we have initiated the small pack capacity on a larger scale. Most of the small packs currently we have marketed are our new customers. New customers in the sense customers who have been acquired for the past four to five years. Recently, we have received inquiries from our existing customers like Starbucks and other who are the long-term customers with us, are evincing interest on the small packs as well. The small packs actual customer base will only get evolved on a clear basis by next year, wherein we are expecting that we would be able to optimally utilize the same.
Just in-
For the current, we can say that we would be making an effort from going from around 6,000 tons of small pack capacity to 10,000 tons of small pack capacity in one, two years to come.
Sir, just while supplying to the small packs to the existing client, the realization gains would be approximately at least more than 5% or it's?
Generally, the normal, I mean, it again is a complex thing because the SKUs range from 0.8 g- 1 kg, 2 kg pouches, all varieties of packing and all that.
Right.
Generally, on a ballpark figure, you can take approximately $1.5- $2 as the value addition.
Okay. Sir, just last, may I ask, sir, if you don't mind, sir, please, question?
Go ahead.
Hello. Sir, as there would be an addition into the Vietnam capacity which would be soon getting commissioned in the July end. Sir, structurally, in next five years, can we say that in every two years there can be a capacity expansion that would be taking place irrespective of Vietnam and India, and apart from these two countries, any other country where Africa or something which is there in limelight. Sir, just to get a sense that, in periodic times, what is the ballpark number which you think that from 35,000 tons capacity, you have a vision to expand to 55,000, 60,000 capacity in a long period tenure. Any rough statement would be very helpful, sir.
Following this, I've been telling for the past one year, one and a half year also. Now we are in 2021, around 2024, we plan to reach about 50,000 tons sale capacity. Our production capacity would be slightly higher to that, say 55,000 or 60,000. And we wish to reach to anywhere between INR 130-INR 135 on the EBITDA margin. That is the goal on which we are working. How do we do it whether in Vietnam or in India? Currently, we have an infrastructure both in Vietnam and in India.
Right.
If our Spray Dried requirement will go up, it will be in Vietnam. If a Freeze Dried requirement goes up, it will be in India. We will be looking perhaps at the other locations after completing expansions in these two places. Yes, there are several plans on board which are being discussed. On this business, this is the broad picture for the next two, three years.
Thank you so much, sir, and all the best wishes to the entire team.
Thank you.
Thank you. The next question is from the line of Rupin Shah from InCred Asset Management. Please go ahead.
Yeah. I have a question for Praveen. For longer term perspective, two to three years, for India business, what kind of top line we are aiming? Any guidance on EBITDA margin, like one can expect for two to three years perspective, say FY 2024 or FY 2025?
Things have become a little fluid as of now because a lot of things hang in balance how things would pan out. For example, we did well this year and we achieved a top line of INR 150 crore. If things would have been normal, we would have expected current year definitely to touch INR 200 crore. Having seen the first or second wave of pandemic, things are a little dicey as of now. Going as far as long-term, last time I had said that probably last year, I said that three years we are looking at a INR 250 crore top line turnover, which looks we are pretty much on course for that.
This year we should be breaking even in terms of EBITDA. We had to break even last year itself, we did have a little bit of adverse impact because of higher Indian coffee prices. Going forward, this year we should look to break even. I cannot put a number for EBITDA for next three years. Definitely in two years' time, we are looking to cross that milestone of INR 250 crore top line.
Very much, sir. Thank you.
Thank you. The next question is from the line of Vivek Tulshyan from New Mark Capital. Please go ahead.
Sir, thanks for the opportunity. I think this question has been asked multiple times, but what I'm trying to do is I'm trying to subtract the standalone numbers from the control numbers to get to the subsidiary performance. In that, I think what we are seeing is the gross profit margin has come down and the overall EBITDA margin has also come down. The growth is also much weaker than what it was in the first nine months. Just wanted to understand what could be the reason behind this.
Lakshmi Narayana?
Yeah, you could say that because of the low volume of the FD sales, there is a price reduction in the standalone performance.
No, I'm talking about the subsidiary performance. If you subtract the standalone performance from the console, you get to the subsidiary numbers. In that, we are seeing that first nine months the business was growing well, which was the reason because our Vietnam facility was doing very well. Then suddenly in this quarter we see that the growth is not very strong and the margins have also eroded substantially.
Okay. Sir, we take the next question?
Sarma Garu, did you want to say something?
I didn't notice, actually. Last three, four months.
Basically, what happens is in the first nine months, because of the high volume of sales and all from subsidiary companies, especially from Vietnam, you could notice the more high volume of the value and volume of the sale. The fourth quarter, we could witness the good amount of sales from Indian operations. Because of that, you could witness that there is less sales from the subsidiary side and more sales from the standalone side.
Understood. Our other expenses have also almost doubled in the subsidiary. Is that because of the India business where our India business has grown well? Does that increase our other expenses and does that also impact the EBITDA margin?
Yeah. Basically, you all witnessed that because of the high cost of the transportation, sea freight and all, we all witnessed that in the export market, the sea freight charges have gone up substantially. Also the second factor is due to the packing material. These are all the two components which we increased in the fourth quarter, expenditure.
Understood. The packing material cost would be relevant for the Vietnam market also, or that is because of the India B2C business packing material cost?
Yeah, it is from the B2C business in India, not from Vietnam.
Understood. Perfect. Thank you so much.
Thank you. The next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Yes, good evening. Thank you. My question is for Srishant, sir. You've given a brief update on cold brew coffee in U.S. If you can just elaborate a little more in detail in terms of this was also supposed to be a product where we could introduce in cafes. Any progress on that front?
Actually, yes. We've had some good progress for cafes also, especially cafes which are serving nitro cold brew. For them, this product has been a huge favor. Earlier, the process they used to follow was to make the cold brew physically, and it used to take 16 hours. The shelf life also was very less.
Right.
With this version, they're able to give even the nitro cold brew at a much more economical cost to their customers. Unfortunately, because most of the cafes across the world are still under lockdown-
Right.
...there hasn't been that much of a volume. This is something that you consume in a cafe, not something that you would want to take as a takeaway.
Right.
That's one reason why we still didn't get the volumes that we were expecting. Once things open up, we are hoping those volumes will start coming in. In the U.S., we've actually gotten people who've seen the product, who've tried the product. A couple of guys who've actually approached us asking us for exclusivity, saying that they'll give us at least a 1,000-ton sale and all that.
We haven't accepted any of these offers because it means that we will be tied in with them, and our margins will be limited subsequently. We thought, it doesn't matter. Let us grow slowly, we'll grow steadily. We have the ability to approach all these chains in the U.S. with this product, because it's a very neutral product, and because we're the only ones who have it, we can easily create that convenience and take things forward.
You would be approaching the big chains as well?
Yes. We're actually already supplying to the big chains-
Okay.
...through some resellers, our customers. Our customers in the U.S., they are confectionery companies, liquid coffee companies. They buy the powder from us, they supply from McDonald's, Wendy's, you name it. All the major chains, they buy from these guys. They keep developing new blends and products for these chains all the time.
Okay.
This is one project that we are undertaking as well to institute over there. Earlier, they were buying mainly in liquid format. We are trying to convince them to buy in solid format as well.
Okay. Any timeline in mind, sir, where you would see this scale-up of the concept from the response that you're seeing or you're expecting with this new product acceptance?
The new product, the volume increase will take place gradually. It's not going to happen overnight because it's a new product. Everyone wants to see what the other guy is doing.
Right.
If the other guy is successful, then they also want to incorporate at their end. This whole process will take time. Once we started in the U.S., we've got inquiries from U.K., Taiwan, Korea, Japan, and China saying that they want the exact same product, in fact.
Okay.
It's not that we even tried to market. We didn't even think that these other markets actually would accept a cold brew.
Okay.
A lot of these countries, they try to ape what the U.S. is doing. They've started floating inquiries for us, and now we started sending samples across to all of them as well. The real volumes we'll start seeing only when the institutional segment really opens up and coffee shops start operating normally.
Okay. Understood. Thank you so much. That's it from my end.
Thank you. The next question is on the line of Anuj Jain from Value Quest Capital. Please go ahead.
Hi, thanks for the opportunity. I have a couple of small bookkeeping queries. Are we capitalizing any of the interest expense?
This year, whatever sum of the equipment we have put to use, wherein almost around INR 1.75 crore of the interest we have capitalized this year.
Okay. Understood. What is our cost of borrowing in India and in Vietnam?
Hello, am I audible?
Yes, you are, sir.
Can you hear me better?
Hello, can you just repeat the question?
Sure. I was asking, what is the cost for borrowing in India and Vietnam for us?
Hello. Sorry, the line got disconnected. I connected now.
Sure. Am I audible now?
Now, yeah. You are audible.
Yeah.
Your question, the cost of funds in Vietnam, it is at 1.2%.
Okay.
In India, it is at 1.5%, working capital cost of funds.
Okay. Understood. Okay. Thanks. Thank you and all the best.
Thank you. The next question is from the line of Shawar, an individual investor. Please go ahead. Shawar, your line is unmuted. Please go ahead with the question. Shawar, an investor, your line is unmuted. Please go ahead with the question. As there is no response, we take the next question from the line of Romit Nagpal, an Individual Investor. Please go ahead.
Hi, good evening. Just a couple of questions. Channel checks seem to indicate that you reduced a lot of your discounts, promotions, at least on the online platform. Would that have contributed to the lower losses in the domestic business? Do you see sales sustaining given that we've reached mid-May?
Yes. In fact, in most of our calls, we have mentioned that while we started with higher discounts to attract consumers and increase our trials, as we go along and the brand building happens, we'll slowly start reducing the offers and discounts. We haven't seen any sales drop, which primarily speaks for two things. One is the affinity towards the brand is good with the consumers, and they have liked the product. Going forward also, we look forward to keep reducing the discounts and offers, and we don't see there should be any impact on sales.
Given as a consumer, I am complaining, but as an investor, I'm very happy.
Okay.
How has the performance been in Switzerland vis-a-vis last year, and is the business expected to be the coming year business as usual, or are we looking at something substantial on the turnover side?
Switzerland, I think, business, they are able to get trading business to a substantial extent. We are having a custom-bonded warehouse, it has become easier on the logistics and on the taxation aspect also. We can expect a little more betterment Going ahead on a continuous basis, a betterment in the Switzerland business.
Okay. That's it from my side. Thanks a lot, and congratulations on the good set of results.
Thank you.
The next question is on the line of Jay Mora, an Individual Investor. Please go ahead.
Yeah. Just a couple of questions. When can we actually attain a good scale on the Indian branded business? Once we achieve that, is the margin profile will be same like as it is right now, like 25%-30% or something like that?
Hello?
Hello? Hello?
Yes. Can you hear me?
Yeah. Am I audible? Hello?
Yeah. We can hear you.
Mr. Praveen-
Okay. My question was that when can we achieve that scale in our branded business for the Indian market? Once we happen to achieve the scale, what would be the margin profile that would look like? Will it be similar to our current margin profile?
Praveen, are you on the call?
Mr. Praveen, please unmute your line from your side.
Sorry. My mistake. Can you hear me now?
Yeah.
Yeah, sorry. What I was saying is that considering the fact that we have achieved INR 150 crore last year, out of which INR 100 crore was branded business. In three years' time, it's been a reasonable scale to achieve. I think very few brands achieve this kind of scale in a short period. As I was telling in one of the earlier questions as well, that in a couple of years, we are looking to get to around INR 250 crore or so, and we keep going, much of that, and there's no letting down our guards no matter what turnover we achieve.
As far as margins go, definitely as the proportion of branded business keeps growing and the strength of the brand grows, we are able to offer lesser and lesser discounts in the market. That will definitely improve our margins from, say, 25% to go to 35% in couple of years. That's our target. Then we'll see how to take it forward, what kind of premium and what kind of pricing we can command in the market.
Right. You also mentioned about the distribution network. It is currently 95,000, and you wish to scale it up to 1.5%.
Right.
When can we achieve? Is there any internal targets to achieve that INR 5 lakh or INR 7 lakh kind of mark, which you alluded that many of the big or the major players do have? Any color on that?
In the short period, we'll not be in a position to achieve what a brand like from Unilever or Nestlé would do because their footprint is large, their brand equity is huge. All that drives in terms of what is your reach. Considering that coffee is thankfully largely an urban phenomena, and as I was telling you, most of our reach of 95,000 is direct. As the brand grows-
Right.
...we look forward to have a lot of indirect reach. Once the brand equity starts building, we look forward towards the wholesale market to help us achieve a threshold volume of just a number of outlets of maybe 200,000, 250,000. Once we achieve 200,000, 250,000, our weighted distribution will go up to 70%. I think that should be a good internal benchmark for us. What I am looking at is weighted distribution rather than numeric distribution, because if there are the right outlets, I think we'll be pretty much in good space.
Okay. Thanks a lot and all the best.
Thank you.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Abhishek Navalgund for closing comments.
Yeah. Just one last question from my side. If you could just tell us the e-commerce sales number for FY 2021 from our B2C business.
E-commerce at an overall level from the retail side, the branded side, we were approximately 5%-7% of the total sales, which means it'll be closer to INR 5 crore-INR 7 crore. Our exit numbers are very good. We are exiting at almost 8%-10% of our retail sales are now coming from e-commerce. There has been a substantial jump in the volumes from e-commerce B2C sales.
Sure. Thank you so much. That's it from my side. Basically, I would like to thank the management for addressing all the questions and also thanks to all the participants for joining in. Now I request Mr. Srishant for his closing comments, and maybe we can close that call afterward. Thank you, and over to you, sir.
Yes. Thank you all for joining us on this conference call, and I hope all of you and your families are keeping safe during these difficult times and looking forward to reconnecting again during the next quarter conference call. Thank you.
Thank you very much. Ladies and gentlemen, on behalf of Nirmal Bang Equities, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.