Ladies and gentlemen, good day and welcome to Q2 and H1 FY 2026 earnings conference call of Manorama Industries. 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 and zero on your touch-tone phone. I now hand the conference over to Mr. Hiral Keniya from EY. Thank you and over to you, sir.
Thank you, Danish. Good evening, everyone. On behalf of Manorama Industries Limited, I welcome you all to the company's Q2 and H1 FY 2026 conference call to discuss the performance of the company and to answer your questions. We have with us the management team comprising of Mr. Ashish Saraf, Chairman and Managing Director, Mr. Ashok Jain, CFO, Mrs. Ekta Soni, AVP Investor Relations, and Mr. Deepak Sharma, Company Secretary. Before we proceed with this call, I would like to draw your attention to the fact that today's discussion may contain forward-looking statements that are subject to various risks, uncertainties and other factors which will be beyond management's control. We kindly request you to bear in mind that there might be uncertainties when interpreting such statements. Please note that this conference is being recorded.
We will now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session. I would now hand over the conference to Mr. Ashish Saraf for his opening remarks. Thank you, and over to you, sir.
Thank you, Hiral. Good evening, everyone, and a warm welcome to the Manorama Industries Limited earnings conference call for Q2 H1 FY 2026. I am accompanied today on this call by our Director and Chief Financial Officer, Shri Ashok Jain, and other members of our senior management team. I would like to thank all our dear investors, analysts, and stakeholders for joining the call today and for your continued confidence on Manorama. The first half of financial year 2026 has been another period of strong performance for Manorama Industries, reaffirming our position as a global leader in specialty fats and butters. Our growth during this period was driven by a superior mix of value-added products, optimized utilization of our expanded fractionation facilities, and consistent demand from leading international clients in the chocolate, confectionery, and cosmetic industrial sectors.
We continue to see encouraging traction across our global customer base, supported by our robust sourcing network, strong research and development capabilities, and focus on customized high-quality solutions. Our emphasis on innovation, sustainability, and value-added products offerings has helped us maintain healthy margins and strengthen our growth trajectory. Based on the strong performance and business momentum, the company has revised its annual guidance for financial year 2026 upwards from INR 1,050 crores to INR 1,150 crores +, reflecting our confidence in the demand outlook and operational scalability. This period also marked notable strategic progress for Manorama. We are now under the process in the next months to upgrade our fractionation facilities, expand our production footprint, and strengthen our presence across key global markets.
Our waste to wealth sourcing model continues to empower millions of rural and tribal women, ensuring inclusive growth while reinforcing our environmental social governance commitments. This model not only ensures a reliable and sustainable supply chain, but also aligns with our long-term vision of responsible and traceable sourcing. We have also acquired land adjacent to our existing Birkoni facility to support our upcoming capacity expansion, and we are progressing well with new ventures in West Africa and Latin America to deepen our global footprint. These initiatives collectively position us for our next phase of growth, both in terms of scale and market reach.
As part of our operational planning, we have scheduled a plant maintenance and upgradation shutdown in quarter three, financial 2025 to enhance efficiency and facilitate expansion in our current fractionation capacity from 40,000 metric tons annually to 50,000 metric tons annually approximately. This has been carefully planned and will have no impact on our annual revenue guidance. Instead, it will help us achieve higher productivity and better throughput in the coming quarters. Looking ahead, we remain deeply focused on cementing our leadership position in specialty fats and butters through continuous innovation, capacity expansion, and deeper customer engagements. Backed by a fundamentally strong balance sheet, disciplined execution, and a sustainability-driven growth model, we are confident of delivering long-term value to all our stakeholders.
With that, I will now hand over the call to our Chief Financial Officer and Director, Shri Ashok Jain, to take you through the financial and operational highlights for the quarter and the first half of the year. Thank you everyone. Ashok?
Thank you, Ashish, sir, and good evening, everyone. Let me take you through the financial performance for the second quarter and half year ended 30 September 2025. For H1 FY 2026, Manorama Industries reported consolidated revenue of INR 612.9 crore, demonstrating a strong 86.4% year-on-year growth. EBITDA for the period stood at INR 156.6 crore with margin of 27.2%, while profit after tax was INR 105.5 crore, translating into a margin of 17.2%. The improvement in profitability reflects our focus on product mix optimization, improved capitalization, and disciplined cost control measures. For Q2 FY 2026, revenue stood at INR 323.3 crore, while EBITDA came at INR 87.7 crore with a margin of 27.1%.
Profit after tax for the quarter was INR 454.9 crores, reflecting a margin of 17%. These results demonstrate our ability to sustain strong operating performance despite ongoing capacity expansion and seasonality in the business. On the balance sheet front, our financial position remained robust and well capitalized. As of 30 September 2025, ROCE and ROE stood at 49.9% and 36.9% respectively, with a comfortable net debt to equity ratio of 0.57 to 1. Working capital management has remained efficient with reduction in working capital days to 97 days. Additionally, net operating cash flow of INR 189.07 crores during first half FY 2025-2026, ensuring a strong liquidity to fund growth and expansion initiatives. We continue to maintain a disciplined approach to capital allocation.
The upcoming capacity expansion of 52,000 metric tons per annum, along with our investment in new geographies such as West Africa and Latin America, are fully aligned with our long-term strategy to diversify and strengthen our global presence. These initiatives will enable us to capture growing demand for cocoa butter equivalent and other specialty fats and butters worldwide. With strong business fundamentals, growing customer relationships, and ongoing operational improvements, we are confident of sustaining our growth momentum and delivering on our revenue guidance for FY 2025, 2026. That concludes my remarks. We would now be happy to take our questions. Thank you.
Thank you, sir. Ladies and gentlemen, we'll begin with 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 headset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question is from the line of Akhil Parekh from B&K Securities. Please go ahead.
Hi, thanks for the opportunity and many congratulations on such a stellar performance. My first question was, if you can please highlight what has been the contribution of specialty products in the second quarter and first half of this year.
The contribution from our value-added products is around 70-75% of sales. The utilization has been around 80-85% for our numbers for H1 FY 2026.
Sorry, can you please repeat? I think your voice was cracking up. I don't know if it's on my side, but I couldn't hear clearly.
Our value-added product contribution to our sales is around 70%-75%, which includes cocoa butter equivalent, stearin, and some value-added product out of volumes.
Okay.
The plant utilization level for H1 is around 80%-85% combined.
80%-85% on the 40,000 tons, right?
On the 40,000 tons for half year, six months. Yes.
Okay. Okay.
Yeah.
Second, sir, you alluded to, you know, for the year, you know, revised the guidance upward from INR 1,050 crore to INR 1,150 crore. In terms of margins, are we confident that we'll maintain what we have achieved in first half?
Yes, of course. The performance you have seen is a result of our continued focus on operational efficiency, premiumization initiatives and disciplined executions. Looking ahead also for the coming quarters, we remain very confident in the structural strength of the business, of the products, and of course the model and our ability to sustain the healthy margins. Our efforts will continue to be directed towards driving consistent healthy margins for the company and our shareholders.
Sure. Also, if you can highlight, or give more details in terms of what are the new ventures, what's described or mentioned in West Africa and Latin America. Anything specific you can-
Yes.
Yeah.
Yeah. Firstly we have established subsidiaries in West Africa to streamline and strengthen the procurement of our raw materials like sheanut, which are a key raw material for our operation. In addition, we also have signed an MoU, the Memorandum of Understanding, with the Government of Burkina Faso for setting up a processing facility in the country. This will enhance local value addition and improve the supply chain efficiency for the raw materials. If you talk about Latin America, in Latin America, we have entered into an agreement with Deovale Brazil to utilize their processing facilities for manufacturing of specialty fats intended for that regional market. This will allow us to scale up very quickly without immediate CapEx and address local demand more efficiently.
Additionally, also we have signed a memorandum of understanding with the Government of Chhattisgarh for potential investment in our future planned CapEx projects.
The Africa plant, is it more of a backward integration? Is that understanding correct?
Yes, that understanding is correct. It is more a backward integration project where we are going to set up a processing extraction facility there.
Oh, okay. For the Latin America, it's more of a product extension.
Yeah, it's for the market penetration. Yes. For our sales.
Okay.
We see a huge opportunity there.
Okay. Any CapEx guidance for this year and for the next year?
CapEx, as we have talked about, we already have made meaningful progress, including the acquisition of around 20 acres of land, and we are still negotiating further. We are also upgrading our facilities for the existing capacity, which will result in a 30% increase in the current capacity. That capacity will take from 40,000-52,000 tons. Additionally, for the other projects which we had announced earlier. The total capital expenditure is estimated at approximately INR 450 crores. Basically all these projects are aimed at expanding our current capacity and enhancing our control over the supply chain and entering a new market and also upgrading the technology for the company.
Just an extension to this and my last question, the INR 450 crore will be funded through the internal accruals, and what is the timeframe we are looking at basically to expend INR 450 crore?
Yes. For the funding, we are actually in a very advanced discussion, and we expect to finalize the structure shortly. We will share the updates on the mode of financing for the projects, but we are of course looking to evaluate the options for internal accruals, debt and also fundraise through equity. We are evaluating all these three options for our funding this project for INR 450 crore.
The timeframe for this project?
In the timeframes, we hope to see our project getting on stream in the next two years.
Okay, great. This was helpful. Best luck for coming quarters and wishing happy Diwali to the entire team. Bye.
Thank you. Wish you same.
Thank you, sir. Our next question is from the line of Nikhil Rungta from LIC Mutual Fund. Please go ahead.
Hi. Can you hear me?
Yes.
Hello. Am I audible? Hi. Hi. Hi.
Yes.
Hi, ma'am. Hi, sir. Congratulations on a very good set of numbers. Yet another good show there. I just needed one number, Ekta, was from the export point of view. What would be our export contribution from on our top line?
58% was the export contribution.
Okay.
42 is the domestic.
Got it. Just the plant upgradation timing. Will this be a Q3 or will it be during Q4 scenario?
It will be around Q3, December onwards.
Got it. Rest of my questions have already been answered. Thanks. Yeah, thanks. Thanks. I'll get back to you.
Thank you so much.
Thank you.
Thank you, sir. Our next question is from the line of Jeevan Patwa from Sahasrar Capital. Please go ahead.
Firstly, congratulations to entire team for a wonderful set of numbers. What is striking is basically the improvement in the balance sheet. Our ROCE and ROE has moved up pretty smartly. I think this will continue even in the next half and next year. The only one question I have on the balance sheet side. Just want to understand what is this non-current other assets and other financial assets, the two line items. One is non-current other assets and other financial assets. If you can explain, Ashok, for this.
In other financial assets are covered, FDR, which is around INR 126 crore.
Okay.
The other non-current assets, this is the advances which we have paid for our upcoming upgradation of the equipment and
Okay.
Packing area which we are going to upgrade. This is the advances paid. We have this non-financial assets covered INR 79 crore. The second line of item, bank balance that are equivalent, and it's in total around INR 126 crore FDR as on date. Cash FDR.
Perfect. Very good. Perfect. No, that's it. That's it. Congratulations once again, and happy Diwali to everybody. Thanks a lot.
Happy Diwali.
Happy Diwali, sir.
Thank you. Yeah.
Thank you, sir. Ladies and gentlemen, please restrict your questions to two questions per participant. Thank you. Next question is from the line of Binay Shukla from PhillipCapital. Please go ahead.
Thanks for the opportunity. Just one quick question on the top line front. What kind of growth should we expect for 2027 and 2028, and similarly on EBITDA margin front?
Hi. Thank you, Binay, for the question. For the guidance for our next year, we would, you know, like to reaffirm the numbers in the March quarter, so that during that time we get the better visibility for the year. Of course we see a tremendous growth given the capacity we are coming up and the utilization still is, you know, it is there to optimize. We see a good growth, but in numbers, please, we request you to kindly wait for March quarter to revise our guidance for FY 2027 or 2028.
Just a last question on your top three customer in India and export market? What will be the revenue contribution?
Sir, top three customers include Mondelez, Ferrero, Nestlé, Hershey. These are our top customers.
What will be the revenue contribution from these four clients?
We have many customers in our portfolio.
We can share the figures for top 10 customers, which is around 40%. Top three customers are Mondelez, Nestlé and Hershey.
Okay. Thank you so much.
Thank you.
Thank you. Our next question is from the line of Amit Agarwal from Kotak Securities. Please go ahead, sir.
Yeah.
Good evening, Sir Jay, and good evening, Ekta. Congratulations for a fantastic set of numbers. See, my investors have only one concern.
Your voice is little, Hello, sir. Your voice is little low, sir. Hello?
See, my question is on the cocoa side. I know we are into cocoa butter equivalent. My investors have one concern, that prices of cocoa have corrected significantly. Does it impact our business in any way?
They think cocoa butter, there is of course, because of these, equivalent where people see that it is the same. If you see the cocoa butter equivalent, the functional properties and the structural properties of cocoa butter equivalents are very different. This is why because these customers like they want, because it provides stability, good texture, good finishing lines to the confectionery and chocolate. That way we see our demand and prices of our products very sustainable, in no relation to cocoa butters.
Okay.
Of course it is indirectly related because it is the same alternatives of cocoa butter. It is like cocoa butter, cocoa butter equivalent. But if you see the pricing, and the demand perspective, it is bit different from cocoa butters.
Perfect. Perfect. Another question is on the working capital days. We have seen significant improvement in working capital days. Is there any further room for improvement in working capital days from here?
All improvement over 97 days working.
Yes, sir. We are definitely trying to maximize our working capital cycles as well as the inventory management. We see, going forward, better working capital management.
Perfect. Perfect, sir. The third question is on the margin side. Like for the last 2-3 quarters, your margins have been hovering at around 27%. With improvement in operations, improvement in increase in revenues and operating leverage playing out, we see this margins improving further from here. Sir, as we see, we also already have developed good numbers on the margin. Looking ahead also we remain very confident in the structural strength of our business model and our ability to sustain healthy margins. We are very confident that we will be continue to be directed towards consistent profitable growth, which we believe will naturally reflect in the strong margins performance over the time.
The company has been, you know, performing well in terms of top line, the margin in the product mix, and we remain confident, and we will continue to performing like this. We will, you know, keep on updating our investor and shareholders if there are any changes to that.
Perfect. Lastly, like, have we added new clients in this quarter?
That is an ongoing process, sir. We are tapping new markets, entering into new geographies, having new clients for our different types of specialty fats and butters. Yes, we are tapping new customers and entering new geographies. It's a continuous process for the company.
Perfect. Perfect. 2027 guidance you will be sharing only by March, right?
That's right, sir. Yes.
Thank you.
For this year we have revised our guidance for INR 1,150+. For next year we will be guiding you in the March quarter.
Perfect. Perfect. Thank you so much and all the best, and wish you all a very happy Diwali.
To you also, Happy Diwali.
Thank you, sir.
Thank you. Bye.
Thank you.
Thank you. Our next question is from the line of Shrenik Mehta from Indelz Wealth. Please go ahead.
Hi. Thank you for the opportunity. This has been an amazing result, so congratulations to the entire team. I just wanted to understand a little more about your vision for the next couple of years. How do you see the key growth drivers evolving? What are your major opportunities for capturing the market? Just a little bit of color on the long-term vision.
Of course, sir, our growth is being driven, you know, by a combination of strategic initiatives and favorable industry trends. The key growth drivers we can see for the coming years could be our integration projects, which is like backward and forward integration projects, which we are coming up. The global expansions and the subsidiary footprint. If you see, we have established 8 subsidiaries globally, in the regions like West Africa, Latin America, Brazil. Of course we are going ahead with the continuous capacity expansions. Those projects are also in terms of that line. We have certain strategic partnerships and memorandums of understanding, like with the government of Burkina Faso, with the government of Chhattisgarh, for setting up our projects, on a priority basis. Of course we are looking for a product and market diversification.
We are expanding our product portfolios and penetrating new geographies, which will help us reduce and open up new revenue streams. These are the growth drivers which we see for our coming years. We are expecting to expand our capacity. Next year, this year also we are expanding our capacity by 30% more, including the backward and forward integration projects.
Excellent. Thank you so much.
Thank you.
Thank you. Our next question is from the line of Rohan Mehta from Fimcom Family Office. Thank you.
Hi. Am I audible?
Yes, sir, you are.
Great. Thank you for taking my question. You know, as per my channel checks, the cocoa butter prices, they currently stand at less than EUR 10,000 per ton. There has been quite a steep fall over the last 3 months, about 25% fall. I wanted to understand, are you seeing any margin impact on contract repricing with customers starting next quarter and thereafter? In the meanwhile, has there been any changes to the CBE prices in the same region?
Sir, to answer your questions, if you see our our contracts are usually for 9-12 months, and we are very firm with our contracts and order books, and we don't see any price dip in our cocoa butter equivalent, so stearin or any other of our specialty value-added specialty fats and butter products. We don't see any price dip for our products. Hence we don't see that kind of a margin reduction because of the price change in the products for the next 2 quarters coming up.
Right. Just to sort of clarify, the cocoa butter prices are still in the range of $5,500-$6,000 per ton. Is that correct?
Sir, cocoa butter equivalent prices or cocoa butter prices?
Yes, cocoa butter equivalent prices. Sorry.
Yeah, that is in the range of that.
When cocoa butter
When cocoa butter was trading at higher, $25,000-$30,000 kind of a dollar, our price was still the same. Now maybe it is fluctuating, as you're saying, it is down, through your channel check. Still we are, our prices are around that price only, $5,500-$6,000.
Second question is on your working capital days. Purely on an aspirational basis, what sort of number you're targeting currently on the working capital days?
We, from 151 days, we have come to 97 days now, and we target to 75 kind of days for our working capital cycle, given the model of the business.
Right. This is for the next 2 years, 3 years?
Yes, next 2 years.
Lastly, on the inventory, how much inventory are you looking to procure by March 2027?
March 27 or 6?
March 26.
You want to understand what would be our inventory level during the Q4?
Yes. Correct.
Maybe we can share that at a later stage because we are at an ongoing thing. We can share with you our half-year's numbers, what we have reported currently.
Okay. Thank you.
Thank you.
Thank you. Our next question is from the line of Pritesh from Lucky. Thank you.
Ma'am, from this INR 450 crore CapEx, if you could give out the detail, how much you're spending in backward integration and how much in forward integration? In forward integration, what capacity will get added from this current 40,000 ton?
We're planning, ma'am. We'll share it right.
We can, you know, provide you a detailed breakup, maybe at a later stage. We have the firm numbers with us. To share with you, we need certain approvals to, you know, disclose all those process-wise figures with you. That is also of course under consideration. We can share with you at a later stage for that INR 450 crore breakup.
Okay. What you guys are sharing right now is the capacity expansion from 40,000 to whatever, 52,000, right?
Yes, 52,000 ton.
Is that a part of this INR 450 crore, or INR 450 crore is over and above whatever you're doing?
INR 450 crores is over and above what we are doing.
Okay.
This upgradation of facility we have done through internal approvals.
Okay.
We have already spent on the lands and this upgradation through internal approvals actually.
Can you quantify at least the backward integration CapEx which you are planning to do in these African countries?
Yes.
What is the amount to be spent there for the processing setup?
Sir,
Okay.
We will get back to you on that, capacities amounts and process-wise. Maybe we can
No problem.
Send some more chart at a good stage.
Okay. Thank you very much.
Thank you.
Thank you. Our next question is from the line of Nilaj Datta from Ashmore Group. Please go ahead.
First of all, congratulations on your very superb numbers. I just want to understand one particular thing, because you are clearly telling that your cocoa butter equivalent prices, because I am following you for quite a number of calls. You have earlier also mentioned that they have very little correlation with the cocoa prices. Even the cocoa prices go up and down. Your CB prices more or less, there is no such relationship.
Direct.
I just want to know, the customers, when the cocoa prices go down or go up, is it something that customers, as part of their entire process, certain percentage of their raw material, they mandatorily use this CB to bring the overall raw material cost of the company down. Just like to know that how customer treats that CB and the cocoa. Just like, can you just explain? Because this is always a very confusion, and as an investor it creates lots of, obviously we are clear in our mind that prices are going up, prices coming down 50%. Can you just explain how your customers are using CB and cocoa?
Nothing direct.
See, if you see the demand for this cocoa butter equivalent, this has been growing very fast over the years. If you see the product, the cocoa butter equivalent, it provides a structural and functional importance to the chocolate and confectionery manufacturers irrespective of the cost. Our cocoa butter equivalent, we are selling this specialty fat butters since last two, three decades now. The importance of this fat is more on the manufacturing and producing of this chocolate and confectionery rather than the, you know, price fluctuations of cocoa butter or cocoa butter equivalent. If you see, it provides some better texture, taste, and stability in the chocolate and confectionery manufacturing. There is, however, demand, and there is sustainable pricing for our cocoa butter equivalent.
That means all your customers will mandatorily use it or customers have the flexibility not to use CBE in their production of Cadbury's also? Just asking. I just wanted to understand. Sorry, I'm taking a little more time from you.
No, no, that is very well. Okay, sir, that is not an issue. That recipe differs from customer to customer. Mondelez recipe will differ, maybe Primus from the other customers. It can differ recipe to recipe. The importance of the cocoa butter equivalent is there, but how they are going to put it, use it depends on their formulation. They want it.
Okay.
There is a demand for this product, not only in chocolates but also in confectionery, in other HORECA markets. There are a lot of other markets where these fats and butters are getting used. It is a zero trans fat. It is a very healthy fat.
Okay, great. Last question is that if the price fluctuations are very minimal in terms of your CBE or even if the cocoa, that means when you as per your organizations, obviously then your margin comes from more and more backward integration, volume, and your production efficiency. Am I right? Because your prices are more or less not in line with the cocoa CBE price internationally, the $5,600 you are telling, that even though when the cocoa price going to $30,000, it remains $5,000-$6,000 range.
That means, the, your aim to the, I mean the, your price, your MRP or whatever, that price does not fluctuate but that much, but more your, margin comes from more from the volume production efficiency and your backward integration, how much you can do or what price you are procuring your raw materials. Tanu, is that the assumption?
We will reaffirm our, you know, guidance on the margin that we have been, you know.
Okay.
Continuously focused on our operational efficiencies. Premiumization and diversification initiative and disciplined execution.
Okay.
We will reaffirm our margin guide.
Okay. Thank you.
Thank you.
No issue. Thank you and thanks for your patience, and wish you all the best.
Thank you, sir.
Thank you. Our next question is from the line of Jay Chauhan from Trident Asset Management. Please go ahead.
Hello. Good evening.
You're little low. Your voice is little low.
Hello. Hello. Ma'am, is it clearer now?
Yes.
Yeah, better. Little better.
Okay. Yeah. Ma'am, I just have one question. You had earlier mentioned a combination of a new fractionation plant expansion capacity. Could you update the status of that capacity and current utilization of that?
The current utilization is around 80%-85% for our combined capacity of 40,000 tons.
Okay. The earlier number that you mentioned of is the combined capacity only, right?
Yeah, it's the combined because we are now, you know, sharing the figures for combined capacities only.
Got it. Okay. I just wanted to understand, like, how is the competitive landscape there for CBE?
If you can little elaborate your question, maybe to answer us specifically to your question.
Right. Basically, by competitive landscape, I mean, like, I heard in the market that you are the sole suppliers for CBE and there are some strong competitive moats around it. I just wanted more information on the same.
Yes, means globally, if you see there are very few companies who are into manufacturing of cocoa butter equivalents and this kind of specialty fats and butters because what we are producing this cocoa butter equivalents are from the waste seeds. If you see sal seeds, mango kernel or shea nut seeds we are importing from West African countries. All these seeds, if you see, are waste seeds. To procure these seeds to have a sustainable supply chain network to deal with millions of tribal people, including women having thousands of collection centers and to get your product approval with this top giant MNCs of chocolate, confectionery and cosmetic industries. Of course, given that the technology is there, the fractionation is a key capacity.
This could be the you know competitive landscape maybe for anybody to come in and do this. This what we see it could be the entry barrier for any new comer to build the-
Solid foundation.
Solid foundation.
Understood, ma'am. Ma'am, there are no competitors in the Indian space? There are only, like there are-
We are not seeing anybody at this scale, as we say, we are the largest and leading supplier of this fats and butters to the world. Being sal and mangoes and we are the largest and leading supplier in the world.
Sure, I've got it. Thank you. That's it from my side. Thank you.
Thank you.
Thank you. Our next question is from the line of Bhavya. Hi. Am I audible?
Yes.
Congratulations on good set of numbers. Basically, I just had a couple of questions, Ekta, regarding the backward integration plans in Africa. The facilities that we are trying to set up, what kind of volumes can it handle?
What kind of volume Birkoni facility can handle?
In terms of tonnage.
It is still a, you know, approximate figure, but it should be around 70,000 tons.
Okay. Basically we will be doing the processing and we will be doing some bit of fractionation also over there or no?
As of now, the plan is to set up the extraction and the expeller plant, not the key processes like fractionation and refining there. That we are going to do in our Indian plants which is in Raipur, Chhattisgarh. There we are going to put only the extraction and the prepress facility.
Okay.
As of now.
Okay. Perfect. Still, I mean, there will be an improvement in terms of inventory days, right? Because we will be-
Yeah, yeah. Definitely.
Removing the raw seeds and everything. Yeah.
Of course there will be a lot of improvements, which is related to our backward integration in Burkina Faso. Lot of the cost will be reduced as we are going to import the butters now also, instead of the seeds. There are lots of savings we are going to do with this project, and it will be a better management of inventory, and it will be a better working capital cycle also will be improved and our inventory days are also going to be improved with this project. It is a very good project to consider for as from from company's point of view. It will also help in the good cash flows.
Perfect. That's it. Thanks a lot. Thank you. Congratulations, Ashok Jain, and congratulations, Ashish Saraf. Happy Diwali. Thank you, sir. Wish you also Happy Diwali.
Happy Diwali.
Thank you. Bye-bye.
Bye.
Thank you, sir. Our next question is from the line of Priyanshu Jain from Groww with Xfinity . Please go ahead. Sir, you may proceed with the question. Mr. Priyanshu Jain, please proceed with the question. Since there is no response from your end, we'll move forward to the next speaker shareholder, Mr. Omkar Gogaldare from Shree Investment. Please go ahead.
Congrats on a good set of numbers. I have couple of questions. Just to get the perspective right, that this 40,000-52,000 metric ton expansion, when can we see the commencing of that?
We will be taking this in December 2023, and maybe from 2024 we can see it.
From Q4 it will be live, right? The additional 12,000-
Live. Yes.
Metric ton capacity.
Yes.
At the full capacity, that is 52,000 metric ton, I mean, what could be the ballpark revenue at 100% capacity you can achieve?
Of course, the potential are very huge and good with the company. To share the figure, please wait for our further guidance, you know, to all the shareholders, maybe in the March quarter for FY 2027.
Ma'am, I'm not looking for the revenue growth. I'm just trying to gauge the full, what 100% capacity, what could be the potential of this additional 12,000 metric ton capacity?
So-
If you achieve 100%, whenever you achieve 100% capacity utilization on that additional capacity.
See, it's a very, you know, ballpark number we can share with you on a, you know, full optimum level utilization. The 100% utilization we can see around INR 1,800-2,000 crores kind of top line on 100. Everything going online. It's this just a ballpark, you know, number of potential what we have shared with you. It's we have not given any guidance or so.
Correct. At 100% utilization on that additional 12,000 metric ton capacity, you can do INR 1,800-INR 2,000 crore of revenue if you achieve 100% capacity utilization. Whenever you achieve.
On 52,000 tons, 100% capacity utilization.
That's.
We see a revenue potential of around INR 1,800-2,000 crores.
Ma'am
Plus of course, provided everything goes well.
Okay, at 52,000, that is the total capacity you are mentioning, right? At 100%.
Yeah.
You will be achieving 1800-2000.
I mentioned refining, sir.
Yes, sir.
Okay. I just wanted to know another thing that, I mean, what could be the downside risk to your margin? You have said that because of the higher revenue growth with better, operating leverage, you have achieved good margins from last couple of quarters, so and you plan to maintain it or little bit improve it as well. I'm just wanting to know that what could be the downside risk to your margin?
Sir, business is business, and business always has risks. There could be many risks which can come from many sources. As such, we don't see any known risk to us, but there could be management failure. There can be multiple types of mistakes. As such, there is no visible risk. You should always, we should always keep in mind this.
Okay. Just another question is on the additional land which you have purchased, of around whatever figure you just mentioned in the presentation. I mean, that is for the additional capacity beyond 52,000 metric ton, or it is what?
It is, yes. It is beyond 52,000 metric ton capacity. There are these projects we already have mentioned earlier. For all those projects we have bought those lands.
Okay. For just to know, whenever you start construction of a particular greenfield capacity, that will be a greenfield capacity, right?
Yes.
Okay. Sorry.
Connected. Adjacent.
Yeah, it is like a greenfield, but it is like adjacent, connected to our current facility.
Whenever you start to construct a particular facility, like, how much time it takes to start and do running at 100, do the stuff at 100%? Like, commencing the capacity facility, I'm asking, sir.
It can be, like, 9 months to 16-18 months, depending on the process whether it's a refinery. There are multiple processes, not just the fractionation, it's refining, extraction. You know, there are other processes as well. It depends between 9 to 16 months, sir.
Basically in one and a half year you can.
I'm sorry to interrupt. I'm really sorry to interrupt you, sir. Please come back again in the queue for the more question.
Okay, thanks.
Thank you. Our next question is from the line of Abhishek from AB Capital. Please go ahead.
Hello, am I audible?
Yes, sir, you are audible.
Just wanted to know what is our market share in the global CBE market, and at what rate is the global CBE market growing? Do we have any such data?
Yeah, we don't have any such data with us that, because there is no market data is there to, you know, to have a look and reassess and reconfirm you this thing. There are very few players globally who are into this kinds of niche specialty fats and butters business.
We are a significant portion in the global market.
Yes, sir, we have a very significant portion in the global specialty fats and butters market.
The CBE market is growing every year?
Yes, it is growing exponentially.
Okay. Another thing is, what percent-
Including countries like India and Brazil.
Yes.
Like, including countries like India and Brazil, the demands,
Yeah.
Of these products are growing exponentially.
Okay. What percent of our sales come from U.S. companies? I was just wanting to know because do Trump's tariffs have any material impact on our business?
Our export sales to U.S. are around 2%-3%. It have no real impact on our top line and bottom line.
Abhi bhi mahanga hai.
Okay.
Even then.
Okay. Only 2%-3%.
Even then we are trying to call. Yeah, only 2%-3% is our export sales to U.S.
Okay.
This has been your target.
Thanks. Okay, thanks.
Thank you, sir. Our next question is from the line of Sunil Bhojwani from VK Family Office. Please go ahead.
Good evening. Am I audible?
Yes, sir, you are audible.
Okay. Congratulations on the great set of numbers that have been delivered. Ma'am, I have a question on volume, if you can help me out. What is the volume growth last quarter and current quarter? What kind of capacity we were at last quarter and this quarter? Also H1 to H2 volume growth.
Right.
Sir, we will later on update this volume growth quarter- to- quarter.
In terms of only H2, H1 right now, do we have it handy, the volume growth? Only for H1.
No, as such, we don't have currently, but we will share.
Okay.
We actually shared the full year's volume data. Full year.
Okay. What kind of volume growth are we expecting, ma'am, only for the full year, if we see?
If you see the capacity utilization was around 63% last year.
Mm-hmm.
We expect 85% this year. It is a growth of volume. It's around 25-30%, I guess.
Okay.
Appro-approx.
25%-30% will be volume growth approximately?
Yes.
Right.
From the last year.
From the last year. Okay. Ma'am, what about the realization, our current realization and last year realization, do we have that detail?
The realizations, we already have shared for cocoa butter equivalent, which is $5,500-$6,000. For rest of the products, we don't share the pricing details.
Okay. Current realization was INR 5,500-INR 5,600, right?
$5,500-$6,000, because it depends on the specifications of the batch, so that's why we say it in a range.
Okay. Ma'am, just to follow up, our price realization, our price contracts normally are for how long they are valid for?
It's generally for 9-12 months.
Okay.
It depends on customer.
Okay. Ma'am, do they get affected by the spread of cocoa butter prices in terms of suppose the spread becomes, just hypothetically, ma'am, if the cocoa butter prices and cocoa butter equivalent prices spread become very, very narrow, so do their price gets revised towards the lower end?
No, sir. Once we have finalized the contract and the volume and the prices are fixed, so there is no further. It’s not a commodity with that cocoa butter prices are $50,000, for example, we will get that price or that way. The contract, once we have fixed it, the volume and pricing are fixed for that period.
Okay.
Thank you so much. Sir, please come back again for the further question. Thank you.
Thank you.
Ladies and gentlemen, that was the last question. In the interest of the time, I'll now hand over the call to the management for the closing remarks.
I would like to express my gratitude to all participants for taking the time to join us for the Manorama Industries Q2 and H1 financial earnings conference call today. Thank you again. The company is reinforcing its reputation as a reliable and leading provider, committed to meeting the growing demand for sustainable cocoa butter equivalents, specialty fats, stearin butters, and many more value-added products. We aim to remain the preferred supplier of butters for the world, both for our global and domestic customers, through focusing on strong R&D, expanding our global presence, enhancing our capacity, well supported by our robust balance sheet positions. We look forward to your continued support and blessings, and we sincerely from all of us wish you a very happy and prosperous Diwali.
Thank you.
Thank you.
Thank you.
Thank you, sir. On behalf of Manorama Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.
Thank you.