Q4 24/25

Apr 28, 2025

Ladies and gentlemen, good day and welcome to the Manorama Industries Limited Q4 and FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing the star then zero on your touchtone phone. I now hand the conference over to Mr. Hiral Keniya from EY LLP. Thank you, and over to you, sir. Thank you, Steve. Good morning, everyone. On behalf of Manorama Industries Limited, I welcome you all to the company's Q4 and FY 2025 conference call. To discuss the performance of the company and to answer your questions, we have with us the management team comprising Mr. Ashish Saraf, Chairman and Managing Director, Mr. Ashok Jain, CFO, Ms. 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 would 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. Thanks, Hirak. I heartily welcome everyone to Manorama Industries' Q4 and financial year 2025 earnings conference call. We continue to display robust growth momentum in the operational performance along with profitability during Q4 and financial year 2025. We have achieved the financial guidance for financial year 2025 by recording revenues of INR 771 crores, thereby registering a strong growth of 69% year-over-year. This was led by strong market demand for our diverse range of specialty butters and fats, and with economies of scale coupled with higher volumes led by commercialization of our new fractionation facility. As global awareness of environmental issues and responsible consumption rises, industries are pursuing sustainable alternatives to conventional practices. The specialty butter sector is vital for luxury chocolates, confectionery, and personal care and cosmetic industries worldwide. With an increasing societal focus on eco-friendly and ethically sourced products, the demand for sustainable solutions in this niche market is growing rapidly and significantly worldwide. We leverage our capabilities to meet the rising global demand by providing customized solutions for our esteemed partners in the food and personal care industry worldwide. Our integrated production capacities, backed by various domestic and international certifications, ensure consistent high quality that meets the strictest quality and environmental industry standards. Our research and development team has made notable progress in extraction technology and broadened our product range. We have developed new products during FY 2025, which includes all-round filling fats, bake stable filling fats, water cream filling fats, frozen dessert applications, and premium filling fats for new customers, along with tapping new geographies. Additionally, pursuing industry leadership, we have established strategic global subsidiaries in West Africa, the UAE, and Brazil for centering our global market presence. We continue to strengthen our leadership status in India with the commercialization of the 25,000-ton new fractionation capacity in the beginning of Q2 FY 2025, taking the company's overall fractionation capacity to 40,000 tons per annum. Highlighting our fractionation capacity utilization during the year, the existing 15,000-ton fractionation facility's capacity utilization stood approximately at 100%, whereas the 25,000-ton new fractionation unit capacity utilization for the full year stood at around approximately 40%-50%. Combined capacity utilization stood at approximately 62.5% for FY 2025. Going ahead, the combined capacity utilization for FY 2026 is projected at nearly approximately 75%-85%. We anticipate achieving greater operational efficiencies and cost optimization through improved utilization of our new fractionation capacity in financial year 2026. We are eyeing to achieve INR 1,050 crores top line in financial year 2026. Our CapEx plan, which includes several forward and backward integration projects, is under advanced drawing and planning stage. We will share a comprehensive report on this project, detailed financial plan with our esteemed shareholders through exchange filings once our management board approves going forward our capital expenditure plan. We prioritize ethical practices and environmental responsibility, aligning with ESG goals while maintaining strict standards of traceability and sustainability. Our continuous investment in research and development will foster innovation and address our customers' changing needs, positioning us for long-term success and thus delivering value to our valued stakeholders. I would now like to invite Mr. Ashok Jain, our Manorama CFO, for his comments on Q4 and financial year 2025 performance. Thank you. Thank you, sir. Good morning and warm welcome to everyone to Manorama Industries' quarter four and financial year 2024-25 earnings call. Highlighting the company's financial performance for the financial year 2024-25, Manorama Industries' revenue during financial year surged by 69% year-on-year to INR 771 crore owing to higher demand of the company's product portfolio in both domestic and export markets. The company's export business contributed 73% of total revenue and balance revenue shares from the domestic market. The company's EBITDA grew by 1.6 times year-on-year at INR 191 crore in the financial year 2024-25. Additionally, despite INR 15.4 crore attributable to provision for ESOP, Manorama Industries' EBITDA margin expanded by 870 basis points year-on-year at 24.8% in the financial year 2024-25, which is attributable to efficient cost management and operating leverage. Profit after tax during the financial year 2024-25 surged by almost 2 times at INR 112 crore. Profit after tax margin expanded by 576 basis points year-on-year and 14.5% for the financial year 2024-25. The company's board has announced a final dividend of INR 0.006 per share that is 30% of face value of INR 2 per share for its shareholder. Highlighting CAGR of our financial year from 2021 to 2025. Manorama Industries' revenue, EBITDA and PAT has registered a CAGR of 40%, 53% and 66% respectively. CARE Ratings has upgraded the company's bank facility to A from A-. The company's balance sheet reflects robust strength with manageable net debt to equity ratio of 0.83:1. The strong ratio that is ROE is 24.3% and ROC is 33% for the financial year 2024-25. Additionally, we have trimmed down our working capital days from 180 days to 150 days for the financial year 2024-25 with efficient working capital management. Our peak working capital requirement is behind and incrementally it will keep improving from here. We are making all efforts for inventory management which will help in positive outcomes going forward. Going forward, our agenda is to reduce the net debt from here on. Highlighting the net debt position in detail. The net debt stands INR 380 crore on 31st March 2025, mainly comprised of working capital loans. Our total inventory as on 31st March 2025, stands INR 549 crore, which includes raw materials, finished goods and other by-products. Thank you for listening to us patiently. We now open the floor for question and answer session. 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 withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset 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 Nitin Gosar from Bank of India Mutual Fund. Please go ahead. Hi, team. Congratulations for good set of numbers. A couple of questions. Just wanted to understand, if I were to take second half margin as a guiding principle, what our business or what our plant can generate in terms of margins, would it be fair to extrapolate it going forward? Because on the new plant, we are still running at 40%-50% utilization. Going forward, if we keep improving on the utilization levels, then the second half FY 2025 margins that we saw are more or less sustainable and can improve from there on as well. That would be a fair understanding? Hi, Nitin. Thanks for your question. Related to your margin question. This performance is a result of our continued focus on operational efficiencies, premiumization initiatives, and disciplined execution. Looking ahead, while we remain confident in the structural strength of our business model and our ability to sustain healthy margins, we prefer to stay focused on operational excellence and value creation for our shareholders. Our efforts will continue to be directed towards driving consistent profitable growth, which we believe will naturally reflect in strong margin performance over time going forward. Got it. There is nothing like one-off in our margins, and as you keep improving on the efficiencies, it will directionally either maintain or will improve. That should be my key takeout, right? Yes. Okay. Our efforts will continue to be directed towards consistent growth, sir, and we believe that we will work on this to try our best. Perfect, sir. One last question is, I noticed that there was a couple of commentary with regard to product-related work that we are doing, if I were to extrapolate it and were to only see on exports part. Exports business over last four years has gone up by almost 4X. If I were to incrementally think from here on, are we going to excel from here on by doing business with the same customer, by improving the wallet share? We are also trying to grab upon new customer, as I can see, we have opened new subsidiaries in UAE, Latin America, which can trigger that kind of opportunities. What should we keep in mind? How is Manorama shaping up over the next two, three years with regard to export opportunities? We have a very simple philosophy in this. We have to maintain our all existing customers and continuously hunt for new customers, which we are working around the clock all over the world, including India also. Right. This new customer addition will not compromise our margin or ROC profile, right? Margin and ROC profile are business-oriented plans. Because customer new acquisition is a different ball game, whether it is a new or old customer, the prices are almost approximately- Right. The call was more on or the question was more around, we are not trying to get into new customer at a lower margin. It is not going to compromise our existing structure. See, these are business issues. We cannot say exactly, but generally as per Manorama's policy, we don't compromise like that. Okay. This is all after all the different specifications, terms, and various ingredients in play when we supply to any customer. Perfect. Sorry, one last bookkeeping question. Ashokji, what should be the ESOP provision for the quarter? Or maybe if you can also talk for the full year. For full year, sir, total provision was INR 15.31 crore. For the quarter four, we did the provision of INR 3.81 crore rupees. Got it. Thank you, team. All the best on the FY 2026 number as well. Thank you. Thank you. The next question is from the line of Rohan Mehta from PKON Family Office. Please go ahead. Hello, sir. Am I audible? Yes, you are audible. Right. Thank you so much for taking my question, and congratulations on a great set of numbers. Firstly, I wanted to ask on your working capital. Your inventory stood at about INR 550 crore as of March 2025. What inventory levels are you targeting by September 2025 and also by March 2026? While we are on working capital, also on the trade receivables. If you see your trade receivables have stood at INR 102 crore in March 2025, which is more than double on a year-over-year basis. Are we seeing any change in customer contracts or payment terms? Could you just clarify on that? Rohan. You know that our peak working capital requirement is behind, and incrementally we keep improving from here, we're all making efforts in our inventory management, which will help in positive outcomes going forward. Currently it is around 1-2 days, but we are looking forward to reduce around 120-140 days because we procure the raw material at the time of season. In terms of receivables, for exports, we receive around COD basis and sometimes advances. We are looking for around 30 days receivables for financial year 2025. Got it. On your CBE prices, so I believe, somewhere around March 2025, they were around about $5,500 per ton. Have the prices moved since then? Are you seeing any contract repricing with clients? Our average CBE price is around $5,000-$6,000, because then it depends a lot on specifications and the kind of terms and contracts we have with our customers. More or less, our CBE prices contracts are in the range of $5,000-$6,000 approx. USD per metric ton. Right. On the receivables, I wanted to ask a follow-up question. Could you spend some time just explaining why has it increased? It's right now about 13% of sales, and inventory seems to be a bit of a concern because it's about 70% of your revenue, so that seems quite large. You have to see our inventory in two parts. Our inventory consists of finished goods inventory, also like as we have reported our number INR 130-150 crores of inventories of finished goods and raw material inventory is of around INR 400 crores. On a financial year 2025 basis, you see it looks higher. If you look for FY 2026 revenue targets, then one will understand why it's higher. Because our raw materials are seasonally needed, so we need to have to stock it. Because since these raw materials are available only during specific harvesting seasons, and we have to procure them in bulk for our whole year requirements. That is why if you see our projections for the coming year, turnover guidance, it won't look that high. It will look high on FY 2025, 2026. Okay. I believe, also on your last quarter capacity utilization versus this quarter, how much change has there been? On a utilization front, we can see last Q3, because existing capacity of 15,000 tons is already running on 100% utilization. Our SF2 fractionation two capacity utilization stood at around 60% for quarter four, approximately. In a tonnage-wise, if you see it's a volume of 3,750 metric tons from SF2 for quarter four. Okay. On the receivables, you haven't clarified. Could you just provide as to what sort of normalized days we are looking at? At the balance sheet date, if you see our receivables look high, it is generally 50 days, but on an average, if you see it is 30 days for the company as a whole. We are maintaining that, and we are well within our good terms with our customers. On an average, if we are to consider, then you should consider 30 days instead of looking at the March FY 2025 numbers, which is coming 50 days. Right. My final question is on the employee expenses. If you see the employee expenses, they have gone down, but we have also observed new names in the presentation. I believe this is mainly to do with focusing on the subsidiaries as well. Could you clarify employee expenses going forward? Are we going to see a massive jump over there? Sir, not going to massive jump, but there will definitely be a jump if you want to increase our market share and achieve higher sales. We will need good people to be in the company. We can expect around 5%-10% or maybe more jump. Sure. Yeah. That's all from my side, sir. Thank you so much patiently for answering my questions. Thank you so much. Thank you. The next question is from the line of Dikshit Jain from Invest Savvy Managers. Please go ahead. Hello. Yeah. Hi. Hi. Thank you for taking the question and congratulations on the amazing numbers. My first question was regarding a few weeks ago there was this article from Bloomberg going around regarding the oversupply of cocoa, and cocoa prices have also corrected significantly. How do we see this affecting our business and CBE prices? See, time and again, we have clarified that our CBE prices, of course, are not directly linked or related to cocoa butter, but of course, somehow it's indirectly related. If you see our customers or the consumers have structurally changed their demand, their usage to other conventional items like CBE and other goods. We have our own demand for CBE products worldwide, and it is doing very well. For us also, if CBE prices are volatile, if it is going beyond the point or it is correcting for some things, it is not hampering our cocoa butter equivalent prices in that way. Because structurally, the customers are changing these products, not only because of the price volatility. Okay. You don't see any effect of cocoa prices coming down on CBE prices then? We are not embarking and budgeting that for our cocoa butter equivalent prices. See, cocoa butter is a commodity and that is volatile and we can- Mm-hmm Add that. CBE is different. CBE is a very niche product which we are customizing and making for our customers for their telemedicine. It's not that directly related. Okay. For CBE prices, for all the new contracts that have expired and renewed, how much price hike have you gotten for the new contracts, if there is any? How are the prices moving for CBE? As we have mentioned this earlier in the call also, so average CBE prices, it's between $5,000-$6,000. It depends on a lot of factors on the specifications and tons, approximately. Have they improved in the last few months, last 2, 3 quarters? How is the price moving? Its contract is for mostly one year. Once we have booked the contract, for example, last year, so the contract pricing are same for full year. There- Hello? Yes. Contracts are generally for 1 year, and the prices are fixed, so it is not like that every quarter the prices are changing for CBE for us. No. What I'm asking was if any contract has renewed right now, so the new price compared to the old price, how has it moved? You can take base price only for CBE, $5,000-$6,000. In the last one year, the prices haven't moved much? Yes. Approximately, yes. Okay. Right now, CBE, as a percentage of sales, is approximately how much? CBE, as a percentage of sales, it is around 30%. Okay. Are we expecting it to go up further? Yes, we are expecting to go beyond this also. I can answer it here. Okay. How much are you expecting it to reach? We can expect. That will reflect soon. With time, we can update you maybe, if the quarter comes by. We can expect that. Okay. One last question that I have is, Could you please come back in the queue for further questions? Yes, sure. Thank you. Thank you. The next question is from the line of Jainam Doshi from Chris Portfolio. Please go ahead. Yeah. Congratulations on an excellent set of numbers. I just have two questions. One is, we have guided for a revenue target of around INR 1,050+ crores in FY 2026. If you could bifurcate the same as to how much would be volume-led and how much would be value-led, that would help us. Yeah. If you see the guidance which we have given on a top line, shows the growth of around 35-40%, 36% something. Largely, 25-30% should come from the volume growth and the rest, 5-10% should come from the price realization growth, approximately. Okay. Got it. Second is, we have incorporated subsidiaries in the MENA region as well as Brazil. How big is the market opportunity there, and for which products do we see traction in such markets? Also, how is the competitive landscape shaping up in the American and the European markets? If you could throw some light, that would be helpful. Brazil, the Latin American market is quite huge in terms of consumption of CBE and other value-added products. The market approximately is projected to be around 25,000-30,000 tons. As such, it is quite fragmented market with a huge landscape. We see a big opportunity there. It will take some time to build up our base there. Okay. The competitive landscape which is shaping up in American and European markets, if you could guide us upon that? See, in the world also, there are very few players who are into this specialty niche business. As you see the competitive landscape, there is so much of a demand-supply gap for the products, so we don't see that particular thing in the regions like that. There is a huge demand-supply gap for the products. Okay. Got it. Thank you. Thanks a lot. Yeah. Thank you. Thank you. The next question is from the line of Akhil Parekh from B&K Securities. Please go ahead. Hi. Thanks for the opportunity, and congratulations on a good set of numbers. In your previous comment, you mentioned that the impact of cocoa price volatility is not impacting CBE prices because of specific applications for CBE. If you can highlight what are the specific applications for CBE? The specific applications of CBEs are used in food, care and personal care industries. Because in reality, the pricing dynamics differ significantly and remain sustainable, but are irrespective of CBE price fluctuations. Because if you see the diversified raw material base for us is different from that of cocoa butter and cocoa butter equivalent. Okay. Very good. In the past you have mentioned that FSSAI allows, I think 5% of CBE usage, right? You guys also had highlighted that we are kind of far off from that number in terms of usage. Would we have that number, whereas as an industry we have reached there? 5% still we are not reached. In recipe we cannot reach. See, currently the demand for 5%, that is the rule if you mention chocolate on the wrapper. If they don't mention chocolate on the wrapper, then you can put 10%, 20%, 30%. Basically, it depends on chocolate to chocolate. Okay. Whether it is plain chocolate, then it is 5%. We currently cannot supply the whole demand because the demand is growing day by day. My question on what we had highlighted was, we are still not using 5% of CBE in the required as mandated by FSSAI. Hence the opportunity of demand is still going to be on a higher side in coming years. I was asking like as a percentage, where have we reached basically? The demand is much more than that. There are many chocolates, they don't mention chocolate on the wrapper, but it is a chocolate. The demand is much more than 5%. Okay, fair. Got it. Lastly, bookkeeping question, CapEx number, if you can highlight the guidance in terms of for next two years and, I don't know if you guys also kind of mention the volume number of the fourth quarter FY 2026. That's the last two question from my side. For the CapEx, of course we'll share a comprehensive report on the project which we have announced last quarter. Because we are already on an advanced drawing and planning stage, and once our board approves our capital expenditures plan, we will share it with our shareholders on the CapEx front. On the capacity utilization, we mentioned that 60% of the utilization was from our new plant in Birkoni. Okay. Sorry on CapEx, for additional CapEx, the internal accrual should be good enough or we may have to raise the debt or dilute the equity. Healthy accruals are there. We have healthy internal accruals with us, but we can confirm basically only when our board approves on the financial capital expenditure plan release. Of course, the company is having healthy internal accruals with us. Okay, sure. Thanks a lot and best wishes for coming quarters. Thank you. The next question is from the line of Anmol Soni from Derby Asset. Please go ahead. Yeah. Am I audible? Hello. Oh, yes, sir. You're audible. Please go ahead. Yeah. First of all, good to see the solid growth in numbers. I heard the guidance for FY 2026 about INR 1,050 crores, and also in the last con call, I've seen the guidance which is given as 23%-25% for the EBITDA margin, which was almost achieved in this financial year. My question is, I wanted to know about the margin guidance for FY 2026 and beyond, and how the operating leverage will kick off once we are expanding the capacity utilization in our new plants. Sir, as we have also explained this earlier, so whatever performance we have showing is a continuous focus on operational efficiency, also premiumization initiatives and disciplined executions. Of course, we are looking ahead and while we remain confident in the structural strength of our business model and also our ability to sustain healthy margins, we prefer to stay focused on operational excellence and value creation for the shareholders. Our efforts will move on to continue to be directed towards consistent profitable growth, which we believe will naturally reflect in the strong margin performance over time going forward. The guidance will remain same of 23%-25% of margins, or are we expecting it to improve? Sir, we believe it will naturally reflect in the performances over time. We will give you an update quarter-on-quarter basis. Okay, sure. Thank you. Thank you. The next question is from the line of Pritesh Chheda from Lucky Investment Managers. Please go ahead. Yeah, ma'am, a few clarifications. How much of the revenues or let's say how much of the volume at the CBE level, because there is a value addition from stearin which has to be done up to CBE. In our case, how much of the volume do we sell as a CBE? You want to know the volume sales of CBE for full year? Yeah. That's the question? Yeah. The CBE sales for full year FY 2025 was 4,500 metric tons and stearin sales were 7,000 metric tons. 4,500 and 7,000. Oh, okay. Your full year volume, since you collected a quarter four volume, you mentioned that 60% is utilization in fraction two capacity and 100% utilization in fraction one. When you do the math, the volume comes to about 2,400 tons for the quarter four. Is this correct? Quarter four volume will come 7,500 metric tons. If you are asking only for quarter, not for full year. Quarter four is 7,000 tons. 7,500 capacity utilization. Oh, sorry. I didn't understand. 7.5. Your capacity is right 6,000 fraction one and 6,500 tons fraction two, right? Yes. Our full year capacity of fractionation one is 15,000 ton and fractionation two is 25,000 tons for full year. It is 40,000 tons for full year. Okay. Understood. The other comment was, on the finished goods contract being fixed. Since you have bought the raw material for the year, at the end of quarter four, that how the seasonality is there in your RF and you would have a finished goods pricing which is fixed. There should not be any volatility in your margin number, incrementally, right? If there is a risk to margin, what it is? I'll put the other way around. Can you repeat the question once? Yes. Since you have bought the inventory for the full year now, at the end of quarter four, and your finished goods are on contractual pricing, what is the risk to the margin? Sir, this is business, and business always has risk. As such, we don't see immediate any risk perceived in the current. Business is business, sir, we cannot guarantee anything. No, I'm asking if there is any risk to our margin number, where it can emanate from. That you have to tell us, sir. We don't as such see any. No. These are natural products we are procuring from the forest-based in Africa and India. We are making a specialty products which are being used by the top companies in the world. Business always has risk, but as such, immediate risk, we don't see anything substantial. Okay. My last question is between the FY 2024 and FY 2025 margin, is the scale of operations a key change in the margin number or is there any other drivers for margin? Hello? Hello? Yes. Hello. Yeah, ma'am, I asked a question. I said between the FY 2024 and FY 2025 margin, where FY 2025 is higher than 24%. Is the scale of operations a key reason for the margin change or there are any other drivers as well? Scale of operations. Of course, there are scale of operations which is giving additivity to the margins. Along with that, there is the volume-led growth also which has contributed. Also the product mix has changed for the company and also there are the price growth. There is a combined aspect if you see, which has attributed to our margins. It includes operational efficiency, economies of scale, leverage benefits, product mix and so on. Will there be a product mix change between the two years, and what is the pricing change within the two years? The product if you see, the value-added contribution to sales a year was around 10%. This year it is 30%. That is how the value-added product has been contributed. Our pricing range has been around between $5,000-$6,000 approximately for TPT prices. What was the corresponding sales pricing number last year? Last to last year it was around. We have to see what was last to last year pricing contract. Maybe we can take this question offline and get back to you. Okay. For the last to last year contract. Thank you. Yes. Thank you. Thank you, and all the best. Bye. Thanks. Thank you. The next question is from the line of Kushal Goenka from Mangal Keshav Financial Services. Please go ahead. Hi. Thank you and congratulations on a good set of numbers. My question was, last quarter con call, the management had mentioned that, we'll come with a full plan, in the Q4, that is this Q4. Since there was no update in the presentation also and, in the starting comments, so I just wanted to know if there are any delays with the backward and forward integration and the final project which is going to come in? See, we already have mentioned that we are already on an advanced drawing and planning stage for our products. Of course, the team has been given the mandate to work on the comprehensive report and submit to the board, and that's how the process works. It will take a quarter more or two more to get these things approved from our board on our capital expenditures plan. Then only it will be feasible and will be good to share with you the outcomes of the board on this going forward now. There are multiple projects we have announced in the last quarter. We'll share the report in the coming year, going forward. Can we expect in this quarter or by next quarter we will get the clarity on the same? As soon as we finalize it, we will see. We are very hopeful to get all these things quickly and- Okay. Thank you so much. Hope to start the construction also this year. Okay. Thank you so much. My next question would be, actually, I'm a little new to this company. I was just checking the financials of 2019, 2020, and that time our margin shows around 28%, 23%, but then it again dropped to 17%, 14%. Again, we have reached around 25% margin. My question was, can we sustain these kind of margins for the next 3-4 years, or is there some volatility chances? Yes, sir. If you see our past performance of 2019- Yeah. Whatever performance we have given in H2 related to our margin, it is a result of our continuing focus on operational efficiencies, premiumization initiatives, and disciplined execution. Looking ahead, we remain confident in the structural strength of our business model and our ability to sustain healthy margins. Again, we are saying that we believe it will naturally reflect in these margin performances over time, because in 2019 also, when that had happened, we have undergone a new CapEx of 15,000, additional 25,000 tons CapEx, which has compressed to the EBITDA level margins. Now when we have started our new plant, the 25,000-ton plant, and the revenue is contributing to the growth and also to the bottom line. That is how there is a difference of margin in 2019 and this year. Okay. During 2021, 2022, 2023, if you can let me know what's happening and- Setting up a new CapEx. This CapEx, we nearly tripled our capacity from 15,000 tons. That's the financial, if you are looking at us, and it was a COVID period also. Okay. Accordingly that margin was there. Okay. Now again, we are doing immense expansion forward and backward integration. Won't that again hurt the margins going ahead? It's too early to say that because the projects we have taken, we have prioritized those projects. We are giving a payback period of less than three years. It's too early to say how it is going to impact our margins, but our efforts will continue to be directed towards driving consistent profitable growth for our stakeholders, and we believe it should naturally come in our performances over time. Okay. Thank you so much. Best wishes. Thank you. Thank you. The next question is from the line of Maitri Shah from Sapphire Capital. Please go ahead. Hello. Hello. Yeah. I just had two questions. Firstly, you said that you are going to be reducing the debt going forward. Any guidance on what the net debt will be in FY 2026? We are doing our best efforts to reduce the net debt. Going forward, the debt will be reduced. Our peak working capital requirement is behind, and incrementally it will keep improving from here. We are making all efforts to our inventory management, which will help in positive outcomes going forward. Going forward, our endeavor is to reduce the net debt from here as of now. The debt is typically decreasing. Done. The current amount of INR 350 crore is the peak amount we can see for now? Currently, net debt is around INR 380 crore, mainly comprised of working capital. That's the peak we can see, and from here on, it will go down. Accordingly, the revenue we'll generate, accordingly it will reflect the net debt. Okay. The other income in fourth quarter is double what it was before. Any big one-offs in the other income? Other income includes foreign gain loss also. We have earned around a total of INR 6 crore in this quarter. Other income includes foreign gain loss as well as the interest on FDR. Fixed deposit. Fixed deposit. We are around INR 102 crore fixed deposit. Every quarter, we are around INR 2.5 crore, INR 2.2 crore is receiving the interest on these fixed deposits. That also including other income. Thank you. Thank you. The next question is from the line of Janvi Shah from Share India Securities. Please go ahead. Hello. Congratulations on the numbers. I just had one question. You mentioned that the margins improved due to the scale of operations and product mix as well. I just wondered if you can spend some time explaining. How has the product mix changed in the last year, and which product gives us the higher margins? If you can explain. All our products are value-added. Most value-added product for us is CBE and stearin. The contribution, the way it has gone up, so the CBE sales were around 10% of sales last year. It has gone to 30% of sales last year. Okay. This is how. Which is the main growth driver for you? Value-added products. Every value-added product is contributing to the margin. We have stearin and CBE and other products for like butters. All of the products contributing to the margin. Okay. Thank you so much. Welcome. Thank you. The next question is from the line of Koushik Mohan from Ashika Group. Please go ahead. Hi, sir. Congratulations for the great set of numbers. I just wanted to understand one thing, like with the inventory of INR 550 crore what we have, what can be the revenue can be converted? We have given you the guidance, for FY 2026, it is around INR 1,050+ crores. Yes. That means that the raw material, in the inventory, how much is the raw material, ma'am? Raw material inventory is around INR 400 crore. INR 400 crore. That means that we are having this raw material in the lower cost, right? Average cost, yes. On average cost. Perfect. Another thing I just wanted to understand, ma'am, this year we can see that our return metrics has improved, ROC and ROE. Because of capacity utilization coming up and now 40,000 metric tons, that is also coming with 60% is what we are capacity utilizing. That will improve, and operating leverage will play out in our game, right? Can we expect the margins to improve here in the EBITDA level? The performance that we have given you is the result of our continued focus on operational excellence and discipline. Of course, our efforts will continue to be directed towards driving sustainable and profitable growth for our stakeholders, and we believe it will naturally reflect in our margin performances over time. Okay. We can update you quarter on quarter. Got it, ma'am. Last question from my end, ma'am. I just wanted to understand, currently we have 40,000 metric tons. Do we have any plans to put up new capacity? Yes, sir. We already have announced 5 projects last quarter. Directionally, the company is moving toward those directions of project of forward integration and backward integration. Yes. Of course, the company is having plans for another 3-5-year roadmap, which we have shared with our shareholders in our last con call. You can refer that, and once we get approval from our board on the projects, we can then share you the timelines and comprehensive reports on how we are going forward with those things. Okay. Got it. Ma'am, in the total- Construction this year, hopefully. Got it. Ma'am, in the total output of this year, how much is CBE and how much is tons? Or how much can you bifurcate in the value terms, volume terms? CBE and stearin is 50% of our total value-added product volume share. Both the products, stearin and CBE, is value-added products for us. No, in the percentage terms or in the number terms? 7,000 in CBE. You're asking me volume-wise? Percentage? Volume-wise. Seven thousand- 7,000 tons is the stearin, and around 4,500 tons is the CBE. Both are the value-added products. It is like. That is for the quarter, right? For whole year. For whole year. We are giving the startup. Okay. Got it. Percentage-wise, 20% is CBE, in the volume, and 30% is stearin, volume-wise. Perfect. Okay. Thanks, ma'am. I'll get back to you. Thank you, Kaushik. From the line of Mayur from Wealth Managers. Please go ahead. Good morning to the management, and congratulations on a very good set of numbers. I'm sorry to interrupt. Mr. Mayur, your voice is coming a little low. Can you speak a bit louder? Yeah. Congratulations to the entire team of management. Now is it okay? Oh, yes, sir. Far better. Congratulations to Mr. Saraf and the senior management for driving the transformation of the company. That's great to see the kind of transformation over the years. Hearty congratulations. I had just couple of questions. Some clarification first. You said on an annualized basis, annualized means FY 2025, not Q4 annualized. I'm saying overall capacity utilization on 40,000 tonnes was close to 60%, right? Our volumes were closer to 24,000 tonnes on an annual basis. Will it be right way to understand? No, it will be close to 22,000 tonnes because we started new capacity in July 2024. Okay. CBE by volume was 20% and we say 30% by way of revenue. Yes. Right. Correct. Okay. Similarly, overall value-added products on this 22,000 tons would be 50%. Yes. Tonnage wise. Tonnage-wise. Okay. By revenue, will it be much higher? It should be close to around 70%. 70%. Okay. 70%. Okay. Given that we are in a rising commodity base commodity prices mean in terms of cocoa butter, the pricing is on the higher side, it's a rising trend. Will it be fair to say that there can be a tactical way to play the spot market as well as the contract market? How much of our current sales is contract sales, long-term contracts, in the sense, one-year contract, and how much is sales? Can this mix change based on what we think is right currently in the market, and how does it play for the next year? These are our super specialty niche products, and they are used in the various chocolate industries all over the world. They mostly are on yearly contracts. In case of some of our customers want immediate delivery, we may sell them on spot basis. Generally, most of the contracts are long-term basis. Okay. These products are used in the various serious food applications, especially the chocolate industry. These all are mostly on planned basis so that their factories don't stop, they continuously receive the materials. Maximum business is on the long-term contracts. Long-term contracts. Okay. Sir, then in that case, given the significant rise in the prices, sometime in the next year, maybe H2 of next year or sometime closer, shouldn't we see a decent rise in our contract pricing as we go ahead? I understand it will be gradual, but from a $5,000-$6,000, not specific I'm asking, but at a weighted average level, we should see a decent rise as we go ahead conceptually, right? Cocoa butter is a commodity. It will go up, it will come down, it will then go down, it will go up, and that will keep on happening. CBE is a specialty and we have these long-term relationships with all the chocolate majors of the world. We have to be sustainable and be a dedicated supplier to them. This is not a commodity ki we start taking advantage or disadvantage. It is a joint business because who will give the service of this collecting from the forest and making those specialty products, and then eventually they are being eaten by the most population of the world. This is basically more the sustainable stabilized business rather than a commodity business model. That's great to hear because it then tells the nature of competitive advantage or moat for us that it is more sustainable as we go ahead. That's great. Sir, another aspect was, as we go ahead, Manorama being an integrated player, we have ethical sourcing, we have strong relationships on the sourcing side in two of the markets where the raw material is there. What would be the positioning of Manorama globally for us currently in terms of overall global position, and do we think that we can be among the top leaders as we go ahead over the next couple of years? I think we are already in the top leaders because there are hardly three, four players in the world, and we already are there. Every day we are going from strength to strength. We are getting huge recognition, not only the awards, but many strong recognitions. Big companies are depending on us for the supplies. As you rightly said, this is a very niche business. This is not any easy business. You have to collect the raw materials, make them into the world's finest products, which are eaten by the children of not only India, but of the Japan or America, Latin America, Europe, Russia, everywhere. We are already, I think there, and we are the only company in the world who makes from mango, from shea, from sal- Exactly. Who has all these products in one basket? All right. I'm sorry to interrupt, Mr. Mayur. I would request you to please come back in the queue. The next question is from the line of Apurva Singh from Pancharatnam and Rastogis. Please go ahead. Hello, am I audible? Yes, sir. Please go ahead. Yeah. Thanks for giving this opportunity and doing this con call. This really helps investors like us. All the best. Congratulations for the numbers. The question I wanted to understand was, I wanted to understand the growth of the CBE contractual basis. If that is not available, I would want to maybe get back later on that. Could you give some idea on how has that grown, the CBE contractual prices? CBE contractual prices are ranging approximately between $5,000-$6,000. It depends on the specifications and terms with the customer. How has that grown, ma'am, in the last three years? I just wanted to understand that price. They are growing in a relative manner as per the increasing demand and the usage of the eating of the chocolate by the human population in various geographies around the world. We don't have a current number on how that has grown in the last couple of years? They are growing substantially year by year. There are various factors and demands. Based on the demands in various geographies, they are growing. As such, we don't have a specific number. Got it. Also, second question is that what is the price sensitivity of cocoa versus CBE prices? If you can give an example in terms of, let's say, if cocoa is priced at 100, what would be a cocoa butter equivalent prices be? Cocoa Butter Equivalent prices, we just mentioned give $5,000-$6,000, and cocoa butter prices is volatile that we can track online. $20,000. It's approximately around $20,000 as of now. It's a commodity we can track. This also prices in Google. Got it. I just want to understand if is there any correlation between that? What is the price sensitivity? If it is 100, then what is the kind of, in general, industry standard of Cocoa Butter Equivalent? If cocoa butter is around INR 20,000 or roughly around $14,000-$15,000. It is not directly correlated, but of course, in a way, indirectly it is. As such, then the CBE prices should also be in the same range. Basically, there is a vast difference. More CBE is more used in the chocolates for the compatibility and for other reasons. It is not right to assume, but there is a pricing that will differ significantly. Got it. Also, the last question is that just wanted to understand the contracts we have. What are the price renegotiation clauses, if any? Just if you can give some idea on that because you say we have long-term contracts in terms of one year. Any special cases where these contract price renegotiation can happen? Any clauses on that? In the big contracts, they are all confidentiality contracts with all the customers, so I cannot disclose all that here. Got it. I just don't want the confidentiality thing. I just wanted to understand what are the clauses which will lead to re-negotiation so that those factors could be tracked as an investor. Thank you. No, there are various. All of these are the wants of the chocolate multinational companies of the world, and all the contracts are. It is as per the business terms. It is decided. Thank you. Okay. You cannot disclose the numbers. That's it from my side. Thank you. Thank you. Ladies and gentlemen, due to time constraint, that was the last question for today's conference call. I would like to hand the conference over to the management for closing comments. I would like to extend my gratitude to all the participants for dedicating their precious time to join us for the Manorama Industries Q4 and FY 2025 earnings conference call. The company continues to solidify its reputation as a dependable and leading provider, dedicated to fulfilling the increasing needs for sustainable cocoa butter equivalents, specialty fats, stearins, and butters, and our various new product launches. With our focus on research and development, we maintain our status as the preferred supplier of specialty fats and butters to both our global and domestic customers. Should you have any additional questions, kindly feel free to reach out to us via email or kindly contact Ernst & Young, our investor relations advisors. I sincerely thank you all for participating in this conference call today, and I hope you have a wonderful and healthy day. Thank you. Thank you. On behalf of Manorama Industries Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.