Ladies and gentlemen, good day, and Welcome to CCL Products (India) Limited Q3 FY 2026 Earnings Call, hosted by Nirmal Bang Institutional Equities. As a reminder, all participant clients 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 hand the conference over to Mr. Dipak Saha from Nirmal Bang Institutional Equities. Thank you, and over to you, sir.
Thank you, Ikra. Good morning, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to the 3Q FY 2026 Earnings Call of CCL Products. The management is represented by Mr. Challa Srishant, MD; Mr. Praveen Jaipuriar, CEO; Mr. B. Mohan Krishna, ED; Mr. Chaitanya Avasarala Raju, CFO; and Ms. Sridevi Dasar i, CS of the company. I'll now hand over to the management for the opening remarks, which will be followed by Q&A. I'll hand over the call to Praveen, sir.
Dipak, hello?
Yeah.
Dipak, even our chairman, Rajendra Prasad sir, is also on the call.
Okay, so we also have Mr. Rajendra Challa with us on the call, and I'll request Mr. Praveen, sir, to start the call and give his opening remarks. Thank you.
Yeah. Thank you, Dipak, and thank you, Nirmal Bang, for arranging this call. Good morning, everyone. I welcome you all to the third conference call of FY 25-26. Now I'll give you a brief overview of the company's performance of the third quarter and also the nine months period gone by. As far as the group performance is concerned, the group has achieved a turnover of INR 1,053 crores for the third quarter of 25-26, as compared to INR 761 crores for the corresponding quarter of the previous year, achieving a growth of 38%.
The EBITDA stands at INR 187.56 crores, as against INR 127.22 crores, which is a growth of 47%, while PBT is INR 116.27 crores, growing at 62%, and the net profit stands at INR 100.26 crores, with a growth of 59%. As far as the nine-month figures are concerned, the group has achieved a turnover of INR 3,239.41 crores for the nine-month period, as compared to INR 2,274.54 crores for the corresponding nine months period, achieving a growth of 42%.
The EBITDA stands at INR 547.6 crores, as against INR 396.46 crores, which is a growth of 38%, while PBT is INR 337.55 crores, growing at 37%, and the net profit stands at INR 273.57 crores with a growth of 31%. The domestic market continues its growth momentum, with gross sales of approximately INR 180 crores for the third quarter and approximately INR 480 crores for the nine months period. Out of this, the branded sales contribute close to INR 120 crores for the quarter and around INR 330 crores for the nine months period.
As far as the green, we have been speaking about this intermittently, but the green coffee prices, as far as we are concerned, they remain in the range of INR 3,600-INR 4,000 levels. We'll have to wait and watch, you know, told this before as well, how post Tet holidays, how things pan out, and that will determine the range of green coffee prices going forward. Additionally, the company has declared an interim dividend of INR 2.75 per equity share forFY 2025, 2026. That is a brief update from our side. I will now open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shirish Pardeshi from Motilal Oswal. Please go ahead.
Yeah. Hi, Praveen, Srishant, good morning. Thank you for the opportunity. Praveen, if you can give the outlook on the coffee prices, because the new crop has just come in. So I think, what are the pressure which we see at this time? And my related question is that in the quarter of 38.5% revenue growth, what is the volume momentum we would have, and maybe its number you can share?
Yeah. Thanks, Shirish, for the question. As I told you, you know, the green coffee prices, the outlook as of now, looks much better than what it was a year ago. If you remember, a year ago, this quarter was a more tough quarter in terms of prices where it had surged at the maximum levels. And, but however, this quarter, things are looking far more stable than the last year. But having said so, we were still in a little wait and watch period, considering that, you know, Vietnam goes for Tet holidays, and there is a little bit of, you know, selling off tendency before the Tet holidays, so prices are at, you know, a softer level. But the real, you know, test would be after Tet holidays.
If the, you know, farmers decide to hold on to the stocks, then we could see some more volatility coming in, some more price increases coming in. But as of now, things look, you know, the only guidance that I would give you is that it looks far more stable. The Brazil news is good as of now. The crop looks good, unless until there is some other bad news coming in. I think going forward, things are looking much, much better than what it was a year ago. So that's on the green coffee prices. As far as the volume trajectory is concerned, this reached the what, out of this 38%, the volume is close to, you know, 20% or so. There is another 18%-20% of value growth that we brought, got for this quarter, and therefore, the value growth was at 38%.
Sir, just to follow up, with the volume, which is, which is going to pick up, and that's my understanding. Will this price, stability will come down, and therefore, to follow, is the customer is now giving you a steady order or there is also a wait-and-watch mode? And second, how much price increase reduction, on the account of all this situation now panning out, we will have to take, or the price will remain elevated for some time?
So two things, Shirish. We have always maintained that it's actually not right to look at the price growth, because that is determined on the green coffee prices, considering we do cost-plus model. So the real, you know, marker would be to see at, see the volume growth and the EBITDA growth. And that, as we have always maintained, that the guidance has remained stable. There is no, fluctuation there. So really, we are not too bothered on the prices, that even if the prices drop, that's okay, because, that's not what, we are, you know, guiding the market or we are looking at as a, as a parameter. So that's the guidance, you know, stays from our side, that, keep looking at the volume growth and the EBITDA growth from our side.
Okay. Last question, with the stability in the U.S. tariff and other thing, does that customer which was holding the inventory, or maybe they were lower inventory, is that reflected in the month of January? So there is some spillover which would have happened in the quarter four. Is that the understanding correct?
Not really. You know, I don't think so. People have been holding finished goods inventory across the globe. Yes, in green coffee, there are speculative holdings that happen with the green coffee farmers and the aggregators, but I don't think so this tariff impact is going to impact so much of the trade, and especially for us, because we had the flexibility to supply from Vietnam, so it did not affect us. So even if the lowering of tariff also is not going to help us or, you know, adverse-- it did not adversely help us, you know, adversely affect us 2, 3 quarters ago, it's not going to, you know, give us an undue advantage now also. So our position remains stable as it was before, going forward as well.
Okay.
The customers are, you know, considering the green coffee prices are now, you know, the more stable they are, they are more, you know, assured they are. So the long-term contracts obviously start coming in, and this is evident in our volume growth also. If you see last year, when the prices were so choppy, our volume growths were in the range of 10%-15%, which goes to now 15%-20%, considering long-term contracts have started to seep in, the confidence has started to seep in on customer, that the prices are much more stable than what it used to be last year.
So I was just asking. Thank you, Praveen, but I was just asking, so the price stability, is there expectation that quarter four volumes will be much more than 20% what you've delivered this quarter?
No, no, not really. Not really. See, quarter four, we have already, you know, for the next subsequent quarters, our contracts are almost done. We are kind of, we know how it will be. So there won't be any, you know, undue advantage that we'll go get on in this quarter.
Okay.
Yeah.
Thank you, and all the best.
Shirish, Shirish, this is Rajendra Prasad speaking.
Yes, sir.
Most important, I always maintain, we maintain CCL. It's a year-on-year company. Don't look at quarter-to-quarter. The history, you know, 30 years history, sir. So there is nothing, you know, we have built the capacity. Slowly, it will come. And, you know, everything falls in place. You know-
Okay.
Nobody buys just like that and keep stock, especially in a volatile market like green coffee. What exactly is happening, nobody knows, nobody can predict. So what, as far as CCL is concerned, we always look for long-term, stable business. So there is no issue at all, okay?
Okay, okay.
Indeed, all of you should only look CCL on a year-to-year basis.
Okay, sir. Thank you.
Okay? Just like Praveen just now explained-
Yeah.
What we have done in the domestic also. Slowly, you know, it will take a little time, doesn't matter, but we are very much there.
Okay, sir. Thank you.
Okay, thank you.
Thank you. The next question is from the line of Vivek Ganguly from TCG AMC. Please go ahead.
Thank you. I just wanted, what would be the debt level, as of the quarter end? And if you can give the debt level for the corresponding period, and also the interest cost, rate of interest.
Yes, Vivek, we continue to channelize our efforts to deleverage the balance sheet. There is a subtle shift in our current strategy towards a more cash flow-oriented and working capital-oriented approach, which is actually helping us in terms of reducing the debt. The gross debt, which used to be around INR 2,000 crores a year ago, has come down to INR 1,448 crores as at 31 December 2025. This is the gross debt. Net debt would be around INR 1,248 crores.
Thank you. And the interest rate?
Interest rate would be around 7% on an average across the group.
Okay.
Our guidance was INR 2,250 crores for the end of, as at thirty-first March, 2026, we have given a guidance of INR 2,250 crores. We can see we are almost a quarter ahead of the guidance, but we'll stick to that guidance.
Great. Thank you. That's all from my end.
One small aspect is basically, in spite of the significant increase in the volumes, the debt has actually come down. With the increase in volumes, the working capital should have ideally gone up, but we have actually brought it in the opposite direction.
Right. Yeah.
Thanks.
Very incredible. Thank you.
Thank you. The next question is from the line of Kashyap Javeri , from Emkay Investment Managers . Please go ahead.
Yeah, hi. Thank you very much for the opportunity, and really heartening to see Mr. Rajendra Prasad also being on the call. Thank you so much, sir, for being there. I have a question on our volume number, and slightly longer term. Once we hit, let's say, the full capacity, which is to be about 77,000-78,000 tons, when we do the, you know, the peak utilization there, what would we be as a market share of the outsourced instant coffee, globally?
And once we hit that number, then should one assume that, you know, post that the growth will be in line with what the market would grow at? Because we would be fairly large market share. That's the question one. Second question is on our retail business in India, the branded coffee. If you can give some, you know, idea on how that business has progressed in third quarter this year. Thank you.
So hi, Keshav. So, on your first question, you know, when we are at peak capacity utilization, which is some time away from now, we probably will hit at 12%-13% global market share of the outsourced market, right? Now, that is, you know, there are two ways to look at it. One is to say that even 12% or 13% is there is still some way to grow, so we could be growing ahead of the market, even then-
Sorry, Praveen, just to interject here, when you say 12%-13%, this is the total market or the outsourced market?
Outsourced market.
Okay.
I'm just talking about the outsourced market-
Okay.
because we can't compete in the branded and the, you know, captive consumption market. So that is I am segregating that.
Yes.
This is only the outsourced market, will be 12%-13%, which means that we still have some headroom to grow.
Okay.
We'll continue to kind of strive for higher growth than the market. Even the market, you know, we have seen that the instant coffee market, considering that the growing economies are growing the way they are, and they are more likely to adopt to more instant coffee, we see a better growth of instant coffee than other coffees as well.
Okay.
I think both put together, the market growth and our ability to still gain market share, we should be growing at a little higher level.
Okay.
So that is, that is the long-term guidance. But it is really long-term, we'll see how things pan out going forward.
Right.
So that's from your answer to your first question. The second question, you ask, talked about the branded retail sales. As I told in my opening remark, that the branded retail sales continue to grow at a very good momentum. We are growing at almost 40%-50% this year. And this year we are likely to close at around INR 430-INR 440 crore of only branded sales.
Okay.
The India sales will be around INR 350 crore. We have been gaining constant, you know, market share and expanding our distribution. We are now directly distributed in 140,000 outlets. We are also expanding our networks beyond South, which is North, East, and West markets. On most of the e-commerce and the modern retail platforms, we are very strong, you know, number 3, and in some cases, even number 2 player. We are like kind of, you know, outgrown some of our more illustrious competitors. So that is, you know, little color on how the domestic market has fared, and we'll continue to grow aggressively in this market.
Just a clarification, when you say INR 430 crore?
Right
At MRP levels, this would be what? About INR 800-INR 1,000 crore?
No, no, no. We are not now at 50% discount, so you may add 30%. In any retail, you know, approximately-
Okay
considering the retail margin and the schemes you give-
Okay
30%-35%, you can add at MRP levels.
Okay. Last question, on the capex, on the Vietnam side, we have capitalized large blocks in this year. In fact, March last year, as well as mid of this year. But if I look at the sales, we are not seeing that kind of growth which we are seeing in the gross block there. What could be the reason there? So we are at about, you know, similar numbers for now, about, let's say, two or three quarters, but the new capitalization should have added a top-line growth in the third quarter also.
If you know, if I read your question right, you're asking that, are we getting commensurate growth in terms of volumes in NCL? I would say, yes, we are, because you know, a lot of, if you see even the margin profile improvement is because of the FD capacity utilization-
Okay
Which is now at much better levels than because last year there was no FD capacity in Vietnam.
Mm-hmm.
We are getting commensurate growth from Vietnam as well.
Utilization even today would be, in the new capitalization, would be less than 50%?
No, yeah, less than 50%. But this, you know-
Okay
Considering that this is the first year of operation-
Yes
Utilization of 25%-30% is in fact a very, very healthy utilization and that's what we had planned, and that's what we are completely on target on that.
Absolutely. And again, you know, Praveen and team, Mr. Seshadri, Mr. Rajendra Prasad, fantastic show. Thank you so much for these numbers.
Thank you. Thank you.
Thank you. The next question is from the line of Abhishek Mathur from Systematix Grou p. Please go ahead.
Yes, sir. Hi, sir. Thank you for the opportunity. My first question was on our EBITDA per kg, which is a key metric for us. If I'm not wrong, it would have been approaching about INR 140 for the quarter, and you can correct me if that's not accurate. But the question here is that, you know, now with coffee prices probably on a downtrend on a year-on-year basis at least, what should we expect in terms of the response on the EBITDA per kg, as we enter into a cycle of maybe declining coffee prices year-on-year? Would this metric respond negatively? Would it come down, or would it not be affected? Just trying to understand the dynamics between these two, the coffee price and the EBITDA per kg here.
So I'll answer your second question first. Absolutely, there will be no impact on EBITDA. Because, you know, a lot of people ask these questions. We don't, you know, speculate on coffee prices. It's a cost-plus model, very, sound in terms of how we build prices. So even if the coffee prices come down, our per kilo EBITDA will remain impact will remain intact. So there is no impact there. Now, coming to your first question, yes, you are right. We have now improved our EBITDA per kilo. It's now at INR 135-INR 140 levels, and we'll continue to maintain. try and continue to maintain at these levels. You know, as Mr. Prasad right now just said, that don't look at quarter-to-quarter, there will be some variations.
You know, a lot goes in EBITDA per kilo, what is the product mix, what is the type of SKU you are selling, large packs, small packs, a lot of things come into play, freeze-dried versus spray-dried. So, a long-term guidance has been that, you know, we'll keep improving, but 135, 140 levels we have achieved, and we'll try and maintain these levels going forward as well. And of course, there will be quarterly variations. Don't look at quarters, maintain the long-term view on our EBITDA per kilo.
Sure. Great, sir. Second question, sir, on just wanted to understand if there is any contribution or impact from the foreign exchange changes. So obviously, part of our business would be naturally hedged. But even so, if you can talk about whether we are seeing any impact of FX changes on our business, and if you can talk about any other kind of hedging that we follow.
Yeah, Abhishek, we are, we have a natural hedge sort of thing. Most of our imports, most of our raw material procurement happens only from, most of our imports, most of our procurement is only through imports. And, since you have exports and you have imports, it is supposed to get naturally hedged. Having said that, when rupee depreciates, you will have a little bit of exchange impact, because we are net exporter, and we have a little bit of impact in the sense that, there's an exchange gain which will be there in the business.
Right, sir. But this is not material to call out?
No, that's not material, no. Because the thing is that we are naturally hedged. We have imports, we have exports, which will automatically negate the exchange risk.
Understood, sir. Just one final quick one, if I can squeeze in. On the India branded business, our operating margins would be in the range of 5%-8%, or any other range that you want to specify?
Yeah, yeah, yeah, yeah, yeah. That is there, and we'll keep plowing back to the business so that we can grow this business. This business has just started to, you know, kind of having green shoots, and it is important for us to keep investing into the business, so which we'll keep doing for the long period. So and that is the guidance we have given, that we'll maintain at these levels.
Yeah. So is it if you can give a specific number between 5-8 or any specific number?
I think let's stay with this number because we don't, you know, kind of, granularly kind of publish numbers, so let us stay with that kind. It's not a very broad margin. 5%-8%, to my mind, is quite a, you know, decent, you know, spectrum that we are giving.
Sure, sir. Thank you for the responses, and all the best. Thanks.
Thank you. Thank you, Abhishek.
Thank you. The next question is from the line of Lokesh Manik from Vallum Capital. Please go ahead.
Yes. Hi, good morning to the team. Heartening to see the chairman, sir, on the call, on this call today.
Sorry to interrupt, Mr. Manik.
Yeah.
We are unable to hear you. Can you please speak a little louder?
Yeah. Is this better now?
Yeah, please go ahead.
Yes. Hi, good morning to the team. Heartening to see the chairman, sir, on the call today. Praveen, my question is more from a portfolio diversification perspective. So how am I looking at it is core coffee business, and then you have the B2C, which has grown fantastically, domestic market, and then you have also in the U.K. market acquired a couple of brands. And then the third piece is the new products that we keep, you know, experimenting with. We had cold brew coffee earlier. We are now doing plant-based protein snacks. So on these three areas, if you can give a sense how the portfolio is diversified, or contribution from these segments can help us, you know, just understand how the diversification is progressing.
Absolutely, Lokesh. Let me give you some color. You know that, and we have been speaking this for long, that the whole foundation of the company is based on innovation, which means that we constantly offer new products to our client, understanding the market needs, understanding what the client needs. And that's the reason, we have been showing these kind of performance over the period of so many years. That every time we have been a little ahead of the curve in terms of providing the products. We were the first ones to set up a freeze-dried plant in India, when nobody thought of it, which clearly, you know, demonstrates our penchant to do newer products for our customers. And that also helps us to diversify our portfolio and not be dependent on one product.
That's the reason we have been able to get a consistent growth over a period of time. We also diversified into, you know, creating our own brands, which also has done well for the, for a period of now last six, seven years, which is also part of our diversification process, because it helps us to kind of, you know, be a complete company in terms of our coffee, not only supplying good products and diversified products for our B2B consumers, but also to our B2C consumers. Even in B2C, if you see, our product range has been very, very vast. In fact, when we started, a lot of people had questioned us that, you know, as a start, a company which is only starting, why do you have so many ranges of coffee?
Our very simple answer was that we, you know, we understand the consumer palate, we understand what consumers want. For every region, we developed a new blend. For every type of consumers, we developed a new brand, and that's the reason we ended up creating a very good portfolio, even in the branded segment in the domestic market. The U.K. acquisition continues to grow. We are handsomely growing there. The business, you know, it is so tough to create and grow a brand in these kind of countries, which are very, very brand conscious, right?
Right.
So, there also, we have been doing extremely well. As far as the question of plant-based meat is concerned, Lokesh, that category itself, if you see around you, has kind of, you know, has not done well. In fact, the whole category is almost on a shutdown basis.
Mm.
We quickly took a call because we didn't want to, you know, further our losses in that category.
Mm.
So we quickly cut down on the losses, and we stopped that category because we didn't see the category, the way it was evolving, is going to evolve well in the future. So we are now rethinking that, is protein a good category, and how can we participate in that category? And while we are doing that, our thought of diversification doesn't end here.
Right.
We said that, "Can we, can we see beyond coffee?" And that's the reason we started experimenting with some traditional snacks under the brand name, Malgudi, which goes with traditional ethos of the country.
Mm.
We have started to launch, you know, micro-launch these products in some of the outlets in Hyderabad to see how the response is. If we get good responses and we get the product mix right, the pricing mix right, then we will expand this further. So that's, that's, you know, in all, with the base being innovation, a color on how diversification has been the key for the company in any segment that we operate. So that probably, you know, completes your answer to your question. If you have anything in more detail to ask, please.
Yeah, just, just one more on the success of two-in-one and three-in-ones. In Europe especially, they were quite, you know, well-known and famous. India also, we tried to introduce. So on both these fronts, how are we doing on those product portfolios?
Yeah. So Lokesh, just a small correction. It was not very popular in Europe. It was very popular in Southeast Asia.
Okay.
Yeah.
Okay.
It was very popular in markets like Vietnam, Singapore, Malaysia, Indonesia. And you know, the prime reason for this was that there was always a shortage of milk in these countries, yeah? So for them three-in-one and two-in-one became very popular choice, and they kind of, you know, grew up on, such kind of, coffee. And now coming to, you know, India and European markets, these categories are doing well because it's not as big as what Southeast Asia is. Because, you know, fundamentally, these countries are, you know, milk surplus countries.
They have enough of milk. 3-in-1, 2-in-1 will take its own time to develop. But in certain segments, like, let's say, the student segment, the, you know, single office-going segment, these, these segments, it is catching up and growing. Europe, I we are yet to see massive growth. Also, in Europe, supplying of three-in-one is a challenge because they don't allow dairy from any other country. So we have to look at other options. So as and when things evolve, we'll keep you updated, but that's the update on this segment.
Look, Praveen, just last one, just to add on this. If you see, the growth in the future coming for coffee, mainly for emerging markets and mainly Southeast Asia, then three-in-one and two-in-ones would be a good bet then? That should I, should I take this forward then? And I-
No, it's already a good bet.
Okay.
We are not
Okay
you know, saying that it's not a good bet.
Yeah.
You know, all these countries, Southeast Asian countries, they have very strong brands. In fact, a lot of brands we supply coffee to.
Okay.
So we are already, in a way, participating in that growth that is happening in two-in-one and three-in-one, because a lot, to lot of brands, we are the suppliers of coffee. Now, the only question that remains is that, do we participate in these markets with our own brands? That we'll check and see, that, is it, is it fruitful to, you know, operate in already crowded market, which is unless and until we have a product innovation, some differentiator. We would not like just to kind of, you know, go ahead and participate in the market. So we'll, we'll see how things pan out in these markets. Right now, our focus is in India, and we'll start seeding some of our brands in some of the other markets, but that's been the focus right now.
Great, great. That's it from my side. Thank you so much.
Thank you. The next question is from the line of Kushal from Asian Broking. Please go ahead. Kushal, your line is unmuted. Please, go ahead.
Hello?
Yes, you are audible. Please, go ahead.
Yeah, I just wanted to know new product segments the company is exploring, like, any new segments the company is planning to get into, apart from-
You are asking about. Sorry, just to interject, are you asking about new segments within coffee or new segments outside coffee?
Overall business.
Overall business. Yeah. So, okay, let me answer you in two phases. One is within coffee also. I just now spoke about the new, you know, types of coffee that we have been experimenting with. I told you about how we were the first ones to introduce or get into freeze-dried coffee in India. Then, you know, things like instant cold brew, which was like unheard-of phenomena. We developed it, and that is going handsomely for us. We are also now developing specialty coffee, which was only, you know, restricted to roast and ground and green beans. Sorry, roasted beans. We are now kind of, we are experimenting that can we bring these concepts into instant coffee? So these are some of the innovations that we are doing, the micrograms and things like that.
Various innovations we are doing, depending on which markets we want to operate in and which clients we are, you know, supplying to. Lots of innovation on B2B. On the B2C front, as I just explained, we are also seeding, or let's say, experimenting with, you know, some of the categories which are outside coffee. Can we look at things like snacks which go well with coffee and helps us with our distribution and kind of, you know, helps us penetrate the market better in the FMCG segment. These are some of the experiments. Already on the vending side, we are supplying tea to a lot of our clients because the vending business is not just about coffee, it is about coffee and tea as well. These are the segments that we will be experimenting, seeding the seeds.
You know, we are not, we have never been one company wherein, you know, we suddenly kind of, you know, do a market bombing. We seed the markets, we see how things are, you know, how responses are coming in, do some product changes as per the market, go step by step, and that's how we will grow the market. So that's, that's what we will continue to do in the future. So these are some of the categories that we will try and experiment with.
Thank you, sir.
Thank you. The next question is from the line of Deepak from Sundaram Mutual Fund. Please go ahead.
Yeah, thank you for the opportunity. Am I audible?
Yeah, yeah, Deepak, you're audible.
Yeah, hi, sir. So my first question is on small pack. Could you please highlight at what is the small pack capacity we have right now, and what is the utilization level, and is there any expansion plan, let's say, in the next 12 months for that?
So, the expansion plan, Deepak, will depend on how the future orders are. So let's say, for example, let me break it down into, you know, let's say, small packs. Within small packs also, you have different types of packaging, yeah, right, from sticks and sachets to pouches to, you know, jar, glass jars, tin. So all these kinds of packing are there. So let's take an example of small packs. So we have seen a lot of, you know, demand for the real small pouches, because these are unit price pouches, and especially in economies like the growing economies, the demand for this kind of small packs or LUPs, as you popularly call them, is very high and it is growing. So markets like Africa, India, they're responding very, very well to the small packs.
So definitely we are going to expand this capacity. Right now, if I aggregate all the small packs, our capacity is 12-14,000 metric tons of small packs we can do. Already we are running out of capacity in the small units like sticks and the sachets, so we are going to expand this in the near future. For glass jars and cans, we have enough of capacity as of now, but if you see that we are nearing full capacity, we'll expand that also.
Last time also we had briefed that the units, our units are constructed in such a manner that you know do modular expansion as well. So as of now, the small pack facility is such that by just adding machines, we can add the capacities for the small pack. So that's where it is. So, again, to reiterate, sticks and pouches, we are almost running at full capacity, and in glass jars and cans, we are at 50%-60% of capacity utilization, so there is some way to go, and this we are going to expand in near future.
Okay, thank you. And the second question is on volume front. So if I look at our nine months volume growth, we are almost doing 18%-20% volume growth. So in Q4, is this kind of volume growth sustainable for us? I'm asking because I guess relatively the base is higher versus last Q4, since that was a quarter where we also had double-digit volume growth. And to continue on this, you know, would it be fair to assume that in on a higher base of FY 2026, at least 11%-12% volume growth is possible for us, let's say, in 2027 and 2028?
Definitely, you know, this quarter, our volume growth should be, you know, as good as what we have seen in the first nine months. Yes, you are right. Last year, the same quarter was a very high quarter for us, so we had also expected that the, you know, growth at least, while we'll keep the momentum, the growth will be a little less. But, we are confident that on a yearly basis, we will be growing at a, you know, 18%-20% volume growth.
So that remains intact. Next year, we will see, because a lot of things are evolving. As I told in my opening call, post-state holidays, we'll see how the prices, kind of, you know, pan out. If they remain stable, we are likely to get more long-term contracts, and that will help us assess our volume growth better. So maybe by end of next quarter, we'll be able to give you a better guidance for next year.
Okay. Are there any particular areas where we are penetrating further? I just wanted to understand that since instant coffee market itself is growing at a lower single digit, and we are growing at a higher double digit, means where exactly we are gaining more volume share and how much, let's say, client additions are we factoring in that for those kind of volume growth?
So you know, client addition, I can't, you know, quantify it, but it's an ongoing process. See, every day we add clients, every day there'll be some clients who also go away from us. It's a leaking bucket. It's not that everybody stays with us, and nobody will come to us, so that's not the case. Every time we are adding new clients. Yes, our ability to add new clients because of the product portfolio, our servicing levels, our cost structures, is better, and that is the reason we have been growing a little ahead of the market, right? If the market- You are right, the market is low single digits, that's the growth. But we have been maintaining better growth. Now, where are these growths coming from? I think this growth is well planned out. We are getting growth from all geographies.
We are getting very good growth from, you know, Africa. We're getting good growth from the American markets, as well as the European markets. Asia is growing for us. Our brand is growing for us, very handsomely. So we are getting very all-rounded growth, and it is not skewed towards a geography or a client, that is there. Even our client base is, you know, very well spread out. We have already spoken about this. Our top 20% of the clients contribute only 40%-50%, which means that the diversification of our clients is also very good. So, yeah, so that's the bottom line, that the growths are coming from all quarters.
Very helpful. I may squeeze in one more. Just from the gross debt part. So earlier, sir highlighted that our gross debt has come down despite such a high volume growth. Just wanted to understand, sir, how we are able to manage this. Is it because of change in sourcing mix, or is it because of better inventory management? Just wanted to understand what is going right for us in terms of working capital management.
See, it's all about working capital management, bringing in operational efficiencies into the system. So if you bring down the DIO days, obviously, your working capital debt will get, will get freed up, right? So the same is the case with DSO. If your realizations are faster, right? So it obviously generates free cash flow, which in turn will be utilized to service the debt. So what we have been doing for the last few quarters is that we have been approaching the. We approached the customers and then renegotiated the contracts, saying that we'll reduce the credit periods. And that has helped us in terms of reducing the DSO days, which in turn helped us reduce the debt.
Also, just to add to this, you know, one wouldn't deny that the softening of coffee prices, our ability to hold less of green coffee, because in a higher rising coffee prices market, you tend to hold more inventories as well. So again, it's not a single factor that is helping us, it's a multiple of factors that is helping us to get to a better debt levels, as we see today.
Very helpful, sir, and all the best. Thank you.
Thank you. The next question is from the line of Dipak Saha from Nirmal Bang Institutional Equites. Please go ahead.
Hi. First of all, congratulations on this great execution, sir, and really pleasure to see Chairman, sir, on the call. So just one question, Praveen, sir. First of all, see, I mean, given the kind of a volume growth that we have seen and the working capital management that we have done. So earlier we had this sourcing issue, given the geographical proximity from, say, Brazil, and depending from Brazil and Vietnam. Now, given the coffee prices have started coming down, so what would be the sourcing mix, between, say, Brazil, as far as green coffee is concerned, on the Brazil side and Vietnam side?
So, Dipak, we never have a sourcing issue, because, see, we are an export-oriented unit. We have the flexibility to source from Brazil, Africa, Vietnam. Yes, the logistics time does increase when you import from Brazil. But having said so, if you do your planning well in advance, we have that flexibility to import wherever we can, from wherever we can. Now, coming to the question, where we will, you know, do more sourcing from going forward, it will all depend on how prices pan out. Let's say the prices, you know, stay very stable in Vietnam. Definitely, we would love to source from Vietnam, considering we have a factory there and its proximity to India as well. But let's say Brazil crop comes out good, and there the price is soften, we also have the ability to source from there.
So our sourcing will really. Also, a lot also depends on what are the kind of client profile you have, what is their demand, what kind of sourcing or type of product they want. So again, multiple factors will come into play. The only thing that we would like to say is because considering the way we are structured, we have a massive flexibility and which helps us, helps our business to grow. So that wouldn't be a challenge going forward to us, is the only point that I would like to say.
Sir, got it, sir. Sir, basically, what I was trying to highlight the fact that earlier when the prices were, say, on the elevated side, and dependence on Brazil would have, because of the geographic proximity, would have increased our average inventory holding period, right? Now, given prices have come down, we would not have that problem now, and which is also a reason we are seeing a better inventory management, because of the biggest.
That's what I added to Chaitanya's comment, that even the coffee prices has helped us. The price. The fact that if Vietnam softens, we don't have to kind of, you know, hold much of stocks from Brazil. The third thing is that we see in a, in a market, when it is growing no, there is always a tendency for small guys to falter also. Because today you contracted, let's say, at 100, tomorrow the price is at 120.
He may falter also, so we would want to secure that green coffee and put it our godown, which increases your inventory, yeah? So that also adds to the pressure of working capital. Now, in an inverted market, as you say, when it is going down, you know, it is more beneficial for that guy to hold the stock for me than me holding the stock. So definitely, all of these factors are helping us. And going forward, if things remain stable, it will further improve. So even our debt position will further improve, going forward.
Got it! That's really helpful. Sir, second question is, if I see nine-month this year, I mean, we have, we have done, as you know, earlier you mentioned, say, 18%-20% kind of a volume growth, and EBITDA per kg has also improved. I mean, earlier, our guidance was, say, 15%-20% kind of an EBITDA growth. We are at nine-month, 38% kind of an EBITDA growth, year-over-year, right? Now, looking at next year, even on decent volume growth of in alignment with what we did last year or the guidance that we gave, earlier, given our EBITDA per kg is materially improving trajectory, so will it be fair to assume that that 15%-20% year-over-year in EBITDA growth guidance that we had, that remains very much intact?
Not only intact, see, this year, again, as you have to see all years, we're already at 30%. So in fact, you can take it from our side that the guidance gets revised for this year at approximately, you know, 25% or so. So that we are very definite about. Now, going forward, next year, as I told you, give us a couple of months' time because a lot will depend on how the prices and coffee prices and all pan out, and how the contracts will evolve. If the contracts are going to be, you know, if the coffee prices remain soft, the contracts will be long-term, and our guidance of 15%-20% will remain intact. But we will wait and watch for one or two months before giving a guidance for next year.
Got it. Got it. Got it. So incrementally, we have that, you know, potential of, say, that 20% going to a little bit on the higher side, I mean, depending upon how things pan out, but that remains fundamentally intact. And that's really helpful.
Dipak, last year when the coffee prices were very choppy, that is the reason we had broadened our guidance to 10%-20%. But you know, things panned out well for us. We will continue to strive for it, but if you ask me a guidance, you know, I will wait for a month or two for the coffee prices to come in, then we will give a guidance for next year as well. Yeah.
No, fair enough. Fair enough. Sir, coming to on the B2C side, now as we're targeting, say, INR 430 crore kind of a number this year, and what would be the number for nine months so far that we have done?
So 330, we have already done. We're going to add another 110 in the last quarter. Of course, these are, you know, primary numbers. We'll see the last month, because during last month, we drive more of collection and less of, you know, pushing into the market. So that will determine. But yeah, 110 is definite. So that's not a problem at all.
Got it. So on this trade, just last two questions, sir. One is the kind of marketing measurements we have seen on the western side of the country is quite meaningful. And earlier, we had quite of a dominance in southern market, especially Andhra and Telangana. We, you know, increased our market share and almost replaced the number two player. So now what's the strategy? And more than that, what's the feedback or market response you're getting from western side or other parts of the country? Because southern market, we are already doing good. What do you think going ahead, what would be the growth levers for the, you know, other parts of the country, especially northern side and western side of the country? If you can slightly, you know, give some color on this.
So Dipak, in spite of, you know, doing well in south, we'll continue to aggressively drive in south as well, because some of the geographies we feel that we still can drive a lot of penetration, especially, especially in markets like Tamil Nadu and Karnataka. We have gained very handsome shares. We started our activity 8-9 months ago to drive more penetration in Tamil Nadu. That has reaped us very good benefits. We have gained good market shares. The growth momentum has come out very good in these markets. So we will continue to drive penetration in these markets. In the other markets, we have a very different strategy, where we are saying that we will cream the distribution there.
What it means is that we will continue to drive very aggressively on e-commerce platform, because that is not, you know, manpower heavy, and it now reaches to all and sundry in the northeast and west markets. Already in some of these platforms, we are double-digit market share, yeah, which is very good news for us. Some of the activities that we have taken in the northeast and west markets have already started to reap very good results. You know, in platforms like Blinkit and all that, which are very, very concentrated in the North Indian markets, we have already gained very, very handsome market shares. As I already told you, in most of these platforms, we are double digit market share, including Amazon.
So these are the kind of initiatives we will do in the non-South markets and continue to drive much more aggressively. Of course, because of the lower base, they will grow at higher levels. And we will also do cream distribution, which means that, let's say, in the top 5%-10% of the outlets. Thankfully, coffee is not so well penetrated in the rest of these markets. So what we'll do is, we'll say that, okay, direct distribution in 5%-10% of the outlets, which has a lot of heavy-weighted distribution, and continue to drive from through e-commerce and the other quick commerce.
Even in modern retail, we are doing extremely well. Reliance, we have crossed double-digit market share, which is very good news because, you know, Reliance again, is very strong in all the parts of the country. So there also we are getting. So these are markers of the fact that the brand has started gaining traction in some of these markets, and some of the initiatives that we have taken is giving us good results, and we'll continue to do that.
So really heartening to see that the kind of response is there. I mean, really great to see. Thank you. Last question to CFO, sir. On the cash flow from operations and free cash flow side, given debt has come down and, overall, you know, there's no meaningful CapEx going to happen, say, in FY 2027 and, subsequent year. So what kind of our working capital efficiencies have really kicked in, right? So congratulations on that part. So what kind of CFO and free cash flows that we are looking for, say, FY 2027 and FY 2028? Just some color on that. Yeah, thank you.
So probably it may be too premature for me to comment on that. For the current year, we have generated close to, on a TTM basis, we have generated close to INR 700 crore of free cash flows, right? So, so we continue the same momentum, and probably now that we have higher operating profit and working capital efficiencies, both will lead to higher free cash flows. So, so we continue that momentum, and probably it may be slightly ahead of INR 700 crore is what we expect.
Got it, sir. Thank you. That's helpful.
Thank you. The next question is from the line of Samay Sapni from Hillhouse Capital. Please go ahead.
Good morning. Thanks for the opportunity. So, in Q3, what would be the blended utilization levels?
So at an overall level, we are around 65%.
Sixty-five.
65%-70%. Yeah.
So we are at 65-70 right now in Q3. Now, could you just share some timeline? Could you share a timeline on how we are going to reach, like, full capacity levels? By what s o do we see 65% in the next, or maintain 65% in the next few quarters, and when shall we be seeing an uptake? Could you share some color on that?
So, you know, let's say at an annual level, next, by the end of two years from now, let's say, we are looking at an 85, 90 kind of a capacity utilization. And that's the time we'll see that going forward, how do we want to, you know, build capacity, which areas do we build it ourselves, get into strategic partnerships? So all that will start happening after two years. Yes, we'll put our thinking hats maybe after one and a half years to see, that, what directions we can, we'll, we'll look forward to go. But next year will be really critical.
If, let's say, the volume growths are maintained in a similar trajectory of 15%-20%, then, you know, we definitely will be very close to 80%-85% in two years, and that's the time we'll start thinking about adding fresh capacities.
Okay, thank you for that, and that was really helpful.
Thank you. Ladies and gentlemen, we'll take that as the last question for today. I now hand the conference over to the management for closing comments.
I thank you all to for attending this conference, and thank you, Nirmal Bang, for arranging this conference. We will look forward to meet all of you in the next quarter, earnings call . I would just like Chairman to, you know, give a closing remark on the on the call.
Thank you, everybody. Just have patience, that's all I can say. Everything will go as we had planned. Okay? Thank you, Nirmal Bang. Thank you, everybody. We are always open to any kind of question, so there's no issue at all. Thank you.
Thank you very much, sir. On behalf of Nirmal Bang Institutional Equities, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.