Q1 21/22

Jul 29, 2021

Quarterly report

Ladies and gentlemen, good day, and welcome to CCL Products India Limited Q1 FY 'twenty two Earnings Conference Call hosted by Antique Stockbroker. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Manish Mahwar from Antique Stock Broking. Thank you, and over to you, sir. Thank you, Janice. On behalf of Antique Stock Broking, I would like to welcome all the Depends on the call of CECL Products. I hope everyone is safe and healthy. From the management, we have Mr. Shailesh Sushant, Managing Director Mr. V. Mohan Krishna, ASK Director Mr. Kedaland Sharma, Chief Operating Officer Mr. V. Lakshmi Narayan, CFO, Mr. P. S. Rao, consultant, company secretary Ms. Shigarish Dasari, company secretary and Mr. Praveen Jayapulya, CEO, Continence Coffee Private Limited on the call. Without further ado, I would like to hand over the call to Sisanth for opening comments, post which we will open the floor for Q and A. Thank you. And over to you, Sisanth. Yes. Thank you, Manish. Good evening, everyone. The group has achieved a turnover of INR326 crores for the Q1 of 'twenty one, 'twenty two Our comparative INR289 crores for the corresponding quarter of the previous year, And the net profit is INR 43.84 crores as against INR 38 point crores for the corresponding quarter of the previous year. The EBITDA is INR 72 point INR 9 crores and profit before tax is INR 53.74 crores. You can go ahead with all the questions. Sir, can we open the call for Q and A session now? Yes, please. Thank you very much. Ladies and gentlemen, we will now begin the question We take the first question from the line of Kaushal Shah from Dhanke Securities. Please go ahead. Yes. Thank you very much sir for the opportunity. Sir, if you can share the Q1 capacity utilization of our FTE, the Dibirala and the Vietnam. Correct. In India, we have the capacity of medicine was to extend up about 70%. So this is FD or this is for Dibirala also? Dibirala and our SCs are put together. We take a big capacity as a combined capacity only. Right. And there is no big capacity in Vietnam. Sir, you can take the cross to me, sir. Right. And in Vietnam, sir, what was the number? Vietnam, there is no freeze drying, no? No, no, not freeze drying. Just freeze drying. Vietnam, Vietnam is operating at 80% utilization. Sorry? 80% utilization. Vietnam is operating at 80%. Right. Right. Right. Sir, in India, the spray ride division, what was the utilization there? In India also, in the Q1, it is about 65% to 70%. All right. Sir, some thoughts on your Possible guidance or you had I think in the last call indicated that you could possibly be between 10% 15% volume Growth in the current year. So now that about 4 months have passed, would you like to make some comments on that number, maybe revise it So how do you see the volumes for the current year? We can give a broadly better figure after the second quarter. Perhaps by the current, we will retain different payments. And one last question. On the CapEx front of me, how much have we done? Have we started work already on Vietnam, the expansion and also on the Small packs. Small pack capacity is Coming closer, perhaps we would be going into commercial production somewhere 2nd, brought up for August onwards. And Vietnam, the line balance in part is Completely, it is to be commercialized. We are working on the matching the projects that are there So commercialization has not yet taken place, but the trial runs have been started. And on the Extension for doubling the capacity. In fact, it is still in paperwork, but as next Manipalza will start by issuing purchase orders and initiate the actual implementation process. Sure. That's it for now. I'll come back and take the form. Thank you. Yes. Thank you, sir. Thank you. The next question is from the line of Sameet Deshpande from Fair Deal Investment. Please go ahead. Good afternoon, sir. Congratulations for good results. See, I wanted to know, this BRAV, we are getting lot of news about this BRAVIL prop and the frost there. So and I think We consume over 90% robot coffee as our raw material. So When the prices of this Robustar other copies go up, what will be the effect on our operations and our profitability? Hello. Hello. Yes. So as the first Grasim mainly grows Arabica, and it's 70% Arabica and 30% of Robartsa. This is the robust I'm sorry, the America growing region. So what is happening is One second. One second. Yes. So This, Arunica is what has been majorly impacted by this So, robusta prices have not gone up in the same line as the arabica prices. Now the gap between Iberica and Robusta is a little higher right now. Okay. And we consume maximum robust Yes, we consume maximum robusta. Less than 10% of what we do is with That's right. So 90% degree, when we are using a robust time. So there may not be a bigger check on Whatever. We can pass it on, hello. Yes. You see, our nature of business also, as you are already aware, we do on a back to back basis. So Whatever we sell, we cover the coffee immediately. So it will get delivered on a staggered basis accordingly. Gotcha. Okay. So that will help us. And for the gross margin, this Quarter were around 50% compared to the March quarter of about 58.7. So is it the seasonal effect? Because last year it was 45. This year it is 50. Yes. Now it was around 59. Yes. So this coffee is a seasonal business. Normally, quarter 3 quarter 4 We'll be significantly better than 12. Okay. Yes. And on the export front, we Earlier, the problems of this container, etcetera, having some logistics issues, etcetera. But have they been resolved or they continue to be? No. Actually, the problems are still there. It hasn't been fully resolved. The freight rates are very high. So all those issues are still there. But in spite of those issues, we are still managing to push through. We take the next question from the line of shanti Patel from shanti Patel Investment. Please go ahead. Good evening, sir. My question is, taking into consideration all the factors, what will be the return on capital employed and return on equity as on 31st March 2022 2023. It is a rough idea. I don't insist on it. There is question, a good one. Could I go ahead or will you answer and then I ask the question? I'll take one question. Yes. Listen on CAFD implied, it is 14.70. Yes, on April 18, 15.12%. As on 31st March? 30th June, Current quarter ending. Oh, okay. Current ending. Do you think it will go up as on 31st March 22? It is likely to have slight improvement. Gotcha. And second question is what is the difference in the price The moment of robusta in the last 2 months has been steep. It was about 100 to 1400, 2 months ago, which has increased to plus or minus 1900 as of now. And your robust car? This is robust car. And Radhika is, I mean, the moment has been slightly lesser. It is, it Started from around 2,300 earlier. 2,300 now on the It was about R1500. No. But then the damage is in respect of Rebecca, right? Yes, yes. The Brazil problem is in Arabic only, I'm thinking. Correct. So it's likely to price will go up as far as that particular item is concerned, Correct. The profitability going up is very high. Whatever contracts we'll be doing, we'll be doing at this price right now. Okay. Thank you, sir. Thank you. The next question is from the line of Manoj Kouri from Equinor Securities. Please go ahead. Yes. Thanks for the opportunity, sir. Yes. So if you look at, you will be having better visibility over next 3 to 6 months in terms of order execution. And you have already secured this order at a lower price. So if you look at now going forward, whatever new orders you would be taking, that would be at Hi, hi. So can you just give some flavor like when the exact impact of anything copy prices would be visible to P and L? Broadly, you see one thing is when there is an increase in inflationary trend in crisis, There will not be too many orders that will be coming in. So but for us, there will be a visibility of 6 months clearly. And if you are doing orders right now with these prices, the visibility should come somewhere in Last quarter, 2nd month or last quarter part of the year this year. Right. So is this understanding correct, Normally, yes, but we should adjust it to some requirements of the customers who may want immediate supplies for replenishment. So generally, that is so, but it will not exactly match. There may be some variations because of the immediate requirements of the customers. Right, right, right. So this is just for the sake of our like from a investor point of view that See, broadly, if you see, the price increase should not greatly affect our operations either time. So we will be covering our margins despite increase in prices. So That should be somewhere from Q4 onwards. Your voice is not clear. So I actually meant for few of the So most of the volumes appear on margin basis? Broadly, it will be percillary basis only on a broader perspective. Margin anyway will not Because of these variations in the profit prices, we do not exactly go by the margins. We try to cover our So, optically, because when we say the margin might Come on optically, but there won't be any change in profit splitting on the volume front? Correct. If you are comparing on a percentage basis, then it looks only. Yes, yes, yes. So, got it, sir. Thanks a lot, sir, and wish you all the best. Thank you. Thank you. The next question is from the line of Harish Prasath from HSBC Securities. Please go ahead. As there's no response from the current participant, we take the next question from the line of Abhijit Adele from IIS Securities. Yes. Good afternoon, everyone. Thanks so much for taking my question. Just one clarification first on the gross margin shift that we've seen quarter on quarter from March to June. Should we understand that it's largely because of shift in product mix? Or is there some other factor? It will be the higher raw material costs which have been passed through. Therefore, on a percentage margin, the gross margin looks lower. No, you are right. It is only a variation in the product mix only. Okay. And is it Freeze dried coming down, sir, mostly or any other alternatives also like shifting around? No, last year, last quarter, There was a mix up of lease rates and most of it was on a small patch. Small tax requirement will come only towards the 3rd and 4th quarters. So in the Q1, when there is a reduction in small tax, obviously, The top line would be lower and gross margin looks like they haven't come down. Okay, understood. And on the volume performance in the quarter, was it partly in line with our expectations? Or were there any sort of hurdles we hit? No. Quarter 1 was very much in line with the expectations. Okay. Okay. Great. Just one last thing, sir. Is it possible to broadly give us a sense of year on year out of the revenue growth? How much would be roughly price change, if at all? And how much would be volume change? This is too premature to give it. We will compare this aspect somewhere around the end of Q3 last quarter. The next question is from the line of Himanshu from Yes Securities. Please go ahead. Yes. Hi, team. Good afternoon and thanks for the opportunity. So first question would be on the India Branded Business. If you can have some more details as to how we are doing there, And especially with respect to the entry of a new player in that market, how do we see that business and the growth out there Going ahead. Okay. So Praveen, this is Sai. On the domestic front, In the Q1, we grew by almost 50%, 48% to be precise. So the growth is on track. And We are ourselves a new player in the market. So really it doesn't we are not big enough that any new entry or any other new player will affect us Because we are our clients, we are not trying to grow. So it's more like how when we are doing up against the bigger players. So new entries are generally not a threat to us at this stage at least. And what sort of growth would we be targeting for the year? So we were targeting similar growth. Now very difficult to assess in the Q1 because Q1 8% growth is a good enough growth. We could have got more or less. But considering the fact that this quarter was very deeply impacted because of the second wave, I think this is a commendable performance, and we will continue this is on track with our expectations wherever we want it to reach. Understood. Second question for the team would be on the MEIS, the subsidy overviews. I think there was some amount overdue. So when are we I think to realize that. And secondly, any update you can give on the RockTeb I mean, whether we know now how much of benefits we can get or nothing at all? So any color on this would be appreciated. There is no indication on the news team being applicable to us and that we will be able to get any benefit out of that. On the MAS, in the current quarter, we received about INR 6 crores out of the accumulated figure of those INR 28 crores. When we will realize, we do not know what we are making an application. We are making application And the license is out to be clear. Okay. Understood, sir. And my final question, Maybe Sishan could address this. I mean, if you can talk about some of the performance of some of our new premium products that we had We were trying in the developed market, especially U. S. So any further updates you can give or How our new premium or value added products are doing especially in our key focus Market and any new client breakthroughs, if we've been able to get any? As far as products are concerned, the new introductions are actually doing quite well. Your has been good and consistent and the volumes are growing there. Thanks to the track record that we have already built up, now there is a lot of Interest that is getting generated in other countries as well. Most of the countries across the world, they just try to copy whatever is being done in the U. S. So that interest has started generated and started getting generated in Europe as well as in the Asian markets also. So we'll be slowly introducing these products in these markets as well. Any new client additions that you can talk about? Any significant ones, Cigdem? We keep adding new clients all the time. Just asking if there is another major volume client that has been added. Not yet. Right now, we are in the process of Transitioning one particular customer, that will take some time. Understood. Sorry, just one final clarification on this quarter's performance. I mean, I believe last few quarters, we were running at a very high, almost full utilization of Now while this has fallen to 80% this time, so just wanted to understand, I mean, anyone in India, the utilization is at 65, 70. So just wanted to understand whether this is on account of demand issue where the clients have sort of postponed a few orders? Or are we facing I mean, this is on account of logistics issues where some shipments were stuck? Or how do we sort of explain this dip in overall utilization levels? Gupti, I mean, 80%, 85% is considered to be the optimum utilization figure. So in Vietnam, the plant is running to the optimal utilization model only. Then coming to India, It depends on the product mix. There are some premium products. There are some other products which will have A lower productivity, but better realization. So when we are producing these products On a volume basis, the number might come down, but on a financial parameter, it will be equivalent. So, there is no reckonable reduction in utilizations during this quarter. Okay. The next question is from the line of Harsh Saeed from HSBC Securities. Please go ahead. Yes. Good afternoon. Thanks for the opportunity. Just a couple of questions Specifically on our U. S. Business. So on U. S. Front, with widening gap between Eredica and robust uprisers, coupled with Brazilian suppliers likely to be affected at times, do you sense an opportunity to make quick market share gains over our Brazilian counterparts Yes, we are. In fact, because of the situation which is there in Brazil, the there is an opportunity for us to grow further volumes in the U. S, and we are capitalizing on that. This year, we are seeing almost a 20% to 25% increase in our volumes in the U. S. Market alone. All right. So if I'm not wrong, U. S. Is 10% of our top line. So how do we expect our geographical mix To change going forward, any comment on that? More or less, it's going to be the same the way it used to be. Little bit percentage changes here and there will be there. As you rightly said, 10% is what we would do in the U. S. That may go up by a few First base points, but that hardly matters. All right. And so if Possible, could you please share the break up between bulk and packaged products for U. S. Specifically? I think bulk would be more. Is that right? Yes, around 95% is bulk in the U. S. And around 5% is small packs of what we do. Going forward, we are looking at increasing more of smallpox in the U. S. But that's a more long term plan that we have So include the SmartBuy for the U. S. And with economy opening up, how is the institutional business in U. S. Sir, are we seeing a good bit of traction in new order bookings? Actually, U. S, Sir, they really didn't follow the lockdowns like some other countries. The market was open for most of the duration, in fact. So institution sales, all that is more or less the same. Right now, we're just taking advantage of the fact that Brazil, The green coffee prices are going up significantly. There is a demand from customers to transition to alternate options. So that's what we are capitalizing on right now. All right. All right. And just one last question. So in last one, or more so specifically last fortnight, have you ever seen a Slow down in our order booking. Or do we expect a slight bit of delay going forward given the super inflation that debt is missing? And also from your past experience, sir, if you could help me understand how do we expect broader industry to stay up, given the calamity of this fall? So, okay, firstly, you have to understand that, when the crisis started going up, We've in fact seen the opposite. We've seen panic buying taking place, customers giving us confirmation 3, 4 months before they would normally give Because nobody wanted to take a look because they saw in the last 2 months, the prices were going up and they were not coming down. The news was quite Yes, that with the past issue, the prices will remain high and there's going to be a deeper impact in the crop for the next 2 years. So I think more of it, the industry people are not expecting the prices to go back to the levels that were there last year and the year before that. So that's one reason. During this transition time when the prices are going up, we've seen a phenomenal amount of order confirmations In the last couple of months itself. So that's also one of the reasons why we were very confident with our guidance for the year as well. All right. So that was really helpful. That's it for now. I'll join Martin QA. Thank you. Thank you. We take the next question from the line of Amit Jari from Antique Stock Broking. Please go ahead. Good evening, team, and thanks for the opportunity. Sir, in the earlier comments, we had alluded that we would be starting this Vietnam CapEx of doubling the capacity. So, sir, how much what would be the time line if at all if it starts in a couple of months? And what is the time line if we would be completing that, number 1? And the tickets involved in that. And also a second question, sir, we have seen some you see handset mode while speaking? Better now? Yes, sir. Thank you. Yes, I'm sorry for that, sir. So my first question was on our CapEx guidance of Doubling the capacity in Vietnam. So I think we had said that we could start in couple of months. So what could be the timeline of the sales? And by when could we complete the doubling of the capacity in DSM and the CapEx it would incur? Number 1. And second question is, is there any risk coming from COVID third wave in Vietnam because There was some surge in Southeast Asian countries. So is there a risk to wear formats or our operations in wear forms? Yes. First thing is, we will be starting the implementation of the expansion from around September, October this year. And it should take at least a year henceforth. So next September, October, We can expect that we can complete the expansion part. And secondly, talking about the COVID impact. In fact, as we are speaking, there is an impact in COVID in Vietnam, particularly The city which we are in, Gomattu city and then even cooking districts in which our factory is there. But we are taking special permission and trying to run the show. If things get worse, then we do not know that We are making a risk assessment and trying to work out alternatives. But even as we are speaking right now also, there are I'll mark down the section in the area in which we are operating. We are trying to maintain the operations as of now. Okay. Got it. And would it be possible for us to suppose to source the orders from India in case if If the case wasn't in Vietnam or in Vietnam, in Vietnam, we are in a backward area and the Government also is very keen on running the factories and other establishments. They are giving all kinds cooperation to enable running the factories. In fact, they have given special permission for transport of our goods and Our incoming material and outgoing material has also they have permitted specifically our staff With, of course, due restrictions and due precautions being taken, so there is an impact More encouragement from the government itself to run the package. So with that kind of a support, we are expecting that we should be able to run the package. Of course, there are a few products which we can interchange between India and Vietnam. But in India, we have not gone in for any expansion in the last 3, 4 years, and we are almost at optimum utilization in Indian spray dried So we will make an effort to run the factory at Vietnam with the government support. Okay, sir. That was really helpful, sir. Thank you. Thanks a lot. Thank you. The next question is from the line of Rit Pulsyan from Newmarket Capital. Please go ahead. Yes. Just wanted to understand the absolute revenue in the domestic branded business and how much Distribution reached have increased in the last 3 months. So The first answer and the answer to your first question, what is the business, we almost used INR 30 crores of business in the first quarter. And distribution fee, we did not nothing changed between March June, As you know, because whole logistics was disrupted during the second wave, so we haven't added any distribution as of now. Going forward, We're expecting in the second wave hadn't come that we would expand a lot in this quarter, but that couldn't happen. And we are now Expecting that I'm hoping that no further big time wave comes so that we can continue our expansion program. On the MEIS next quarter, we received about 6,000,000,000. So what was the comparable number Last year came perfect. I think we made the 7 close. Understood. Comparable, bigger for Q1 last year. Yes. And just on the revenue growth number, How much of this would have come from volume growth? And was there any realization growth that we saw during the quarter? That in fact we have not yet clearly demarcated them. The prices are almost on the same line. So there's no major variation on it. Got it. Thank you so much. Thank you. The next question is from the line of Divanshu Sampat from Yes Securities. Please go ahead. Yes. Hello, sir. Good afternoon. This is your question. So what is the typical mix between the business volume that you do for the advanced orders and the last thing in the spot orders In a typical year? There will be approximately 65%, 35%. Okay. And would it be right in saying that the majority of your advance orders are I mean, you get in towards the end of the calendar year? Pardon me? Your orders that you get in advance, do they usually get confirmed around the end of the calendar year? Yes. By the calendar year, we would know. Yes. Okay. Okay. And given that robust prices have gone up by as much as 40 So just wanted to get a sense of, so if somebody places an order with you right now, How much of a margin on a per kg basis do you typically work with or can work with the price being right now there? We try to maintain our existing margins only. We will it's on the way price realization will be on account of Drink off a book cost only. No, I understand that. But I think the long term vision is to touch 1.30, 1.30 per 1.35 perks, if I'm not mistaken. Yes, that is over 3.5 years, PBR. What was the figure that we'll average in FY 'twenty one? That was about RMB112 rupees or so. RMB112 rupees. See, it cannot be, like an MRP, it cannot be loaded for every customer. Every customer is a different part of the process of price negotiation with reference to The nature of customer, whether he is a non factory customer or a data customer, also he is a volume customer or a small group customer and a Small pack customer. So depending on this, we have a small matrix based on which depending on the Customers' profile, we will load these. But on an overall perspective, we will try to cover our margin in absolute terms. So just to clarify, with prices being the way they are right now, you're still targeting something In the range of 100 and plus to 100 and 15,000,000,000,000 or will it be a little bit higher? No, we should Target. No, meaning an inflationary trend already there is a price increase for the absolute price increase for the customer. So I cannot say I will also load extra and take it from him. So it may not be possible in that fashion. Okay. Okay. And so I'll just last question, if I may. Just to get a broader sense on the coffee processors globally. So with the world going through whatever it has in the last one, one, half year, can you give me a sense of How the supply side dynamics have changed or have they not? Like have there been supplies or flows down or can you give me a sense of what is happening But for the logistics issue, we did not experience any disruptions in Supplies for the past 1 and the peers. Of course, I'm asking about coffee processors globally. Coffee processors globally also, I don't think anybody has gone bankrupt during this period. So all over the world, the coffees, including Vietnam, The coffee is graded as essential commodity and so exempted from any of the disruptions due to lockdowns and other Okay. We got that. Thank you so much. Thank you. All good. Thank you. The next question is from the line of Netik from Anvil Shares and Broking. Please go ahead. Hi. I just wanted to ask your strategy for your domestic retail business. And if you could just tell me Any internal targets that you are having for the year and the year? So our strategy as we have Spent out many times before is just like any other Think PC product, we have launched various Products, various brands into various categories, instant R and D and financials. So that's those are the 3 segments we We have entered and we are distributing it largely in the coffee stronghold, which is the southern part of India. That's where our distribution has first given me. So that's been brief our retail strategy. And as far as numbers are concerned, we domestic everything put together, which is done privately to land our blended business. We had achieved the turnover of approximately INR 150 crores. We were looking at a 25%, 30% growth this year. But it will all depend on how things go forward because the Q1 was a little tough. And we'll wait and watch how things pan out in the next Another question is, are you planning for the other regions like you just mentioned that Yes, of course. So as we speak, we had already started distributing at least in the key towns of other regions, Which is North, East and West. So we are expanding our distribution. What I said earlier, as I said earlier, The speed of expansion became a little slower because of the second wave. But Hopefully, and we are just hoping that things don't go bad from here. We'll be there in almost all key towns we are crossing there very soon. Yes. So last year, we had a marginal loss of around 3.4%. We are looking to breakeven. But as we had said and told in many of the calls before, whatever even if we go Breakeven and we can make profits. We'll plow back into the business so that we can expand because there is a huge room of expansion Going forward. So next 2, 3 years, we are not even looking at generating significant profit. Right. That's it. Thank you. Thank you. The next question is from the line Semanju from YS Securities. Please go ahead. Yes. And for the follow-up, just one question. I mean, on the doubling of Vietnam capacity, what is the amount of spend that we are looking at? And also in terms of the ongoing cases from small pack and the Vietnam Ma'am, Braunsil, I think that is more or less done, but any other CapEx? So overall, what would be our CapEx guidance for this year and the next? Yes, this year, packing capacity, we are almost done with the CapEx right now barring about, say, INR 15, INR 20 crores per Vietnam CapEx for doubling the capacity will be in the range of about 17,000,000 to 20,000,000 Spread over this year and next year. There is no nothing on board right now in addition to these 2 expenditures. So as of now for next 2 years, 20,000,000 on Vietnam and about INR 15, INR 20 crores on the small tank. That's about it. Yes. Now there is some regular technology update expenses that we do. They are all small things, small amount, but any reckonable CapEx would be on account of these two items only. Understood, sir. That's all what I wanted to know. Thanks. Thank you. The next question is from the line of Tahamurchin from Slightly big picture question. We're seeing extreme weather events due to climate change And temperatures are increasing faster than anticipated. With the big impact that climate change has on coffee growing, How much of a risk is this to our business model over the longer term? Actually, that is a very interesting question because As the climate change is taking place, there are lots of new areas that are also coming under coffee cultivation. Even in developing countries across the world, there are there is a larger acreage that is coming under coffee conservation. So in countries like Brazil, the plants, there are several areas, farms where the plants are more than 50 to 60 years old. So, every year, there is a small percentage of farms that you'd replace the crops as well. When that replacement time is coming, people are doing that replacement at a different altitude so that this impact So weather is minimums. So across the world, everyone is adapting to this climate change. As far as actual demand and supply is concerned, that demand is for coffee is consistent Around 2.5% to 3% year on year, it is still growing. In developed countries, it's So, peaked or it's reducing by a small percentage, but in developing countries and several places, there's a double digit growth as well. So going forward, maybe we can expect the prices to be a little higher to balance out this Demand and supply. Okay. But so essentially with increasing temperatures, the Plantation acreage doesn't necessarily go down. It can also go up. It can go up. Yes, exactly. Okay. The next question from the line of Sameer Deshpande from Fairdeal Investment. Please go ahead. Good afternoon, sir. I would like to know, what is the mid date of the company as of today? 1st, mid date Of our company, in the March, I think we had some working capital lower due to higher inventory. So what is your late date now At the end of this call. The price on working capital is about INR 250 crores and on long term debt is about INR 178 crores. That amount was from INR 120 crores in March. Consolidated net debt is INR250 crores and Long term debt is about INR178 crores. So around INR 3.75 crores we have debt. And what is the effective tax rate in this quarter? I think the tax rate has gone down to 18% only. And overall, for the last year, it was around 22%. So it remains in the range of around 18 20%. Obviously, with Vietnam operations going strong, the net rate will come down because the entire Vietnam Profitability is our tax free. Okay. So our tax rate will be around 20% overall. Net rates will gradually come down by about 15%. Okay. Thank you and all the best. Thank you. The next question is from the line of Parat Gupta from B. Riley Securities. Please go ahead. My question pertains to the utilization level. So during the quarter past price, we have So can you throw some light in order to what has been the reasons behind? Because earlier, Finally, we were able to do our optimal utilization across our immune facilities. So why there has been a drop in the overall utilization level? And do you believe it is timely because of the COVID phenomenon which is going on or there is some sort of a weakness across the demand? No, but there is no reduction in capacity utilization. Normally, Being a seasonal product, the capacity utilization of 80% to 83% is considered to be the optimum utilization. And only in some cases, particularly in our Diwala plant, since we are producing some Specific products which have a lower productivity, the absolute numbers will come down compared to our capacity. But If you take the revenue from that and profitability, we will be running at optimum utilization. All our plants that we adjusted to the productivity, all our plants in quarter 1 have run at optimum utilizations. Thanks for the clarification, sir. Secondly, just a hypothetical question on in terms of the coffee prices that we have seen. So if the volume in the drop price is good, Pateen, so as you have said that the order inflow in regard to the So if this trend continues and the crop prices or the coffee prices remains on the higher side, Are you seeing that there can be some deferment in terms of the order inflows we should be getting throughout the year? Perhaps it might slow down, but in an inflationary trend, every point is a point of concern. So When it has gone up from 1300 to 1500, people were expecting a decrease and waited for there was a small resistance for Taking orders. But when it started going from the 1700, they were desperate to close. So at every step, there will be They'll be covering the orders and anyway we will be covered to the extent of at least 6 to 7 months operations. We will not have a problem in continuing our capacity regulations. Right, sir. And so in terms of our demand, like earlier during the last quarter call, you had mentioned that Russians, The orders which we called from this year, so that has started to normalize. So is that trend generally like normalcy has returned to the developed market as of now? Yes. Broadly, the indications are that it has come to normalization. We are seeing Of course, the last year was an aberration, but we are saying that the things are becoming coming back to normal. Right, sir. Thank you so much. That's it from management. Thank you. The next question is from the line of Kulveet Kanwal from ASK Investment. Please go ahead. Just one question. If the sum tax rate will remain 0 for how long a period? I do believe it will be a finite period assumption, right? No. As things stand today, it is for lifetime because we Comply with all conditions stipulated for being a zero tax company for lifetime. Unless Yes, some rules are changed at a later date. Right now, it is for lifetime. So 15%, which you are Same on the blended basis, it become like a base case tax rate for you in medium term, right? So when we are expanding the capacity, See, the profit generation from India and Vietnam would almost be on the fifty-fifty basis, Where at one point we are 0 tax and at one point at a maximum of 25%, so we will be averaging out at 15% overall. Yes, yes. So that's the context. Consolidated basis, 15% tax rate should be the base case assumption, right? Yes, right. Okay, sorry. And secondly, like when the freight rates are moving very fast, so who will be at the cost of Additional freight extension of freight cost. It depends on the contract that we conclude. If we are concluding an SOB contract, The buyer will and if we are concluding the clear contract, we have to wait. Okay. Sure. Thanks. Thanks a lot. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference back to Mr. Mandeesh Mawar for his closing comments. All with you, sir. Yes. Thanks, James. Yes, Shishab, I have one question. In terms of the U. S. Market particularly, what could be the size of U. S. Instant coffee market and how the India has spoke in terms of volume I'm talking about and our volume particularly in the entire digital geography? The full of U. S. Basket will be around maybe around 80,000 tons. Okay. And what is the India contribution, will it be 30,000 to 80,000 tonnes? India's contribution in the U. S. Will be the largest. And everyone put together maybe around 7,000 or 8,000 tons maximum. Okay. And what are you out of that? I say that We're targeting around maybe between 5000 to 6000 tonnes in this year. Okay, this year. And possibly, because as we understand, right, because of Solvay Coffee and the new customer win the last year, I think that we are getting the traction in this market, Right. So how do you decide to fix for the new ticket of evolving in the U. S. Will be over the next 3 years, particularly? That's a bit Two signatures for me to comment on at this point in time because there are lots of variable factors that are there. But the way things are looking up right now because of the issues which are there in Brazil and all, we should hopefully be able to add some customers So in the next year or 2, it's early. Okay. I understood. Okay. Sir, but in terms of a new customer, I think we're not again a new customer in terms of in our Q1 from U. S, right? No, we didn't add any we've added several new customers. But if you're referring to a Large volume customer like what we added last year. We haven't added any new large volume customers like that. Lot of smaller guys. Yes, we keep adding on a very regular basis. Okay. Understood. Okay. Sure. And Shishan, thanks. Thanks, guys. That's on my part. Shishan, would you like to make any closing comments? No, nothing specific. I guess we are just sticking to our guidance of 10% to 15% for this year. And yes, hoping for the best. Thank you. Thank you very much. On behalf of Antique's job program, that concludes this conference. Thank you all for joining. You may now disconnect your lines.