AWL Agri Business Limited (AWL) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Adani Wilmar Q2 FY '24 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Karan Bhuwania from ICICI Securities. Thank you, and over to you, sir.

Thank you, Naval. Hi. Good afternoon, everyone. It's our pleasure at ICICI to host Q2 FY '24 results conference call for Adani Wilmar. From the management today, we have Mr. Angshu Mallick, Chief Executive Officer and Managing Director; Mr. Shrikant Kanhere, Chief Financial Officer; and Mr. Saumin Sheth, Chief Operating Officer. Now I hand over the call to the management for their opening remarks, post which we can open for Q&A. Thank you.

Yes. Thank you very much, Karan, and very good afternoon to all the participants who have joined this call, Q2 conference call for Adani Wilmar. As a ritual, what we will do is we'll take you through a very brief presentation to talk about how the quarter 2 went, what are the problems our company faced and what is the outlook for next 2 quarters. Post the presentation, of course, we'll open the floor for question and answers. We'll be happy to answer the questions. To start with the outlook to the business context for the Q2, I think from where we left in Q1, more or less, the situation continued in Q2 as well. All the issues [Audio Gap] the hedges disalignment continued till August this year -- this quarter. But however, having said that, I think that issue is now over. Price disparity was in soyabean as high as we were the disparity of $80 a ton. But now the things have been improved. In the -- in this year between April to September, India imported record soyabean oil in anticipation that prices have already cooled down and in anticipation of demand picking up. So overall, imports in India went up by more than 20%. And that also led to the inventory levels going up at most of the players, including Adani Wilmar. That also acted a little bit not in our favor because once you are up with the inventory levels, if prices goes down from there, then you have an issue of higher price inventory sitting in your portfolio. TRQ finally got discontinued. So it was something which company had to suffer from the competition because the company's TRQ was over in the month of November '22, whereas competition continued with the import of edible oil without paying duty. So that issue has been over in this quarter. One of the subsidiary of company, which is in Bangladesh, unfortunately, the crisis in Bangladesh continues. The country is going through a lot of issues in terms of currency crisis, in terms of inflation, in terms of interest rates. While we are keeping a very close eye on the situation in Bangladesh, and we have curtailed our operations in Bangladesh only to the branded level. So we are only selling brand there so that our brand doesn't get impacted because we are #1 player in Bangladesh also as far as the edible oil is concerned. The geopolitical conflicts, now it has become something which is very usual for us now because earlier it was Russia and Ukraine which was going through, and now we have a new conflict of Israel and Hamas going on. But fortunately, either of the geopolitical conflicts didn't have much of issue on the supply chain of edible oil as well as any food grain. Till now, we've not been impacted by either of these geopolitical conflicts. In terms of the business aspect, for any company, there are 2 aspects for business performance: one, of course, is the margin performance, how have you performed on profitability. And other, of course, is the business growing, yes or no. I think on a growth prospect, we are quite good. The business grew double digit. So for the quarter, overall volume grew by 11%, with Edible Oil growing by 4%. Food & FMCG continued its growth trajectory at 19%, which is majorly led by wheat flour, pulses and besan. Industry Essentials grew by 25%. So on a growth perspective, yes, we are growing quite strong. If you look at for the half year, our growth -- overall volume growths are at 18%, where Edible Oil grew by 15%, Food & FMCG by 20% and Industry Essentials by 23%. And within Edible Oil, the branded segment is going faster than overall Edible Oil as a segment. Now with this, the food is now almost contributing 18% of volumes to our overall scheme of the things. Two years back, we started this with 10%, 11% of the volumes coming in from the food, steadily growing quarter-by-quarter. And now we have 18% of weightage of food sitting in as far as the volumes are concerned. Of course, our target is to take it to 30% in coming years and thereby derisking the Edible Oil business. So this is on a good trajectory and we are going quite strong on this. In terms of distribution, our direct reach has now 650,000 outlets. Earlier, we were sitting -- last year same time, we were sitting on close to 580,000 outlets, now are close to 650,000-odd outlets. So it's growing -- present in more than 26,000 rural towns, which is because as we go forward, most of the demand, I think, will be coming up from the rural towns, and we are slowly expanding our footprint in rural town. Rural saliency in overall scheme of the things is steady at 30%. I think last quarter also it was more or less 30%. But having said that, in the overall scheme, the rural is growing more than urban, slightly growing more than urban. And our expectation is that for the second half, from October to March, rural will even grow better than the urban. In terms of direct reach from where we were in FY '20 to now, we have grown 2.2x. In terms of rural town coverage, the growth has gone up to 8.2x as compared to FY '20. So on the distribution front, we are working quite hard, and we are hopeful that we will increase this distribution because it's directly linked to your market share. On a market share, the company remained #1 edible oil player of India with market share of 19.6%. This includes the market share contribution by our joint venture in South, K.T.V. Health Food. ROCP market on a MAT September basis, our market share is at 19.6%. We are #1 player in edible -- in soyabean, #2 player in palm. We remain #1 player in the mustard. And mustard oil is something which is we are going very fast. This oil has shown a growth of 38% year-on-year for us in the quarter. Similarly, soyabean oil is growing. So the whole entire oil basket grew by 15% when we look at H1. This is primarily led by sunflower and mustard oil. In terms of market share for food, we remain #2 player in the country, although we are distant #2. #1 player, of course, is ITC Aashirvaad, quite ahead of us. But good part is that we are slowly and steadily growing our market share, today sitting at 5.15% of market share. In basmati rice, we did see a dip in a market share from 9.4% going down to 7.4%. This was also there when we spoke for the quarter 1 performance. Our take is that this is basically a onetime adjustment, which we are seeing in the market share because of some of the retail schemes that we had last year, which got delayed this year. So our expectation is that by the time we end this financial year in March '24, this anomaly should get normalized and we should be able to see our basmati market share more or less equal to what we had left last year. On channel performance, we are quite aggressively focusing on the HoReCa channel, which has been a new channel, which we have added. This HoReCa earlier was actually supplied through wholesale channel. So we have slowly getting the dependence on wholesale channel reduced by having our own HoReCa channel. This has shown a double-digit growth quarter after quarter. Branded exports has doubled in Q2 '24 on a year-on-year basis. So we have been now able to export to more than 50 countries now. And we are slowly increasing the branded portion of exports, which includes wheat flour, rice, pulses, besan, nuggets and other soya products. Alternate channels, e-com and modern trade is growing very, very strong, grew by 30% year-on-year when it comes to Q2 '24 on similar kind of growth when we look at H1. There are a few marketing activities, which we did, which includes a lot of stuff on the social media in terms of talking about rice, talking about nuggets and talking about all our food products. We also did print and digital media by -- on various platforms, which includes the stations, which includes -- including a metro branding in Delhi where we have branded 3 metro trains for the 3 months and it has come up really very well. On the new product launches, keeping in mind the health basket and the health areas which consumers is always looking at when they try to buy the products, we launched the Kohinoor brand brown rice in 2 brands: one is Kohinoor and other is Charminar. We also launched the Fortune Biryani kit for the export markets. We already have a Kohinoor Biryani kit, which is there for the domestic market. But Kohinoor -- we don't have overseas rights for Kohinoor. We have Kohinoor rights only for the domestic and, therefore, for the export markets, we launched Fortune Biryani kit. We have already exported close to 20,000 kits to various markets. Another 35,000 kits order is in hand, which is getting fulfilled maybe in this quarter. We also launched export range of premium oil, specifically for the U.S. market. So the whole crux of telling all you is this is that we do have quite a high focus now on branded exports rather than only looking at export in terms of castor and oleochemicals. Coming back to the financial performance. After Q1, not so very good Q2 quarter as well. As I said earlier, the issues that we faced in Q1 also continued in Q2. The disalignment of hedges continued till August where actually we settled most of our positions, which are there on the CBOT and that we have moved forward. So having said that, I think the issues are behind us now, and we are quite hopeful that quarter 3 and quarter 4 should be better than quarter 1 and quarter 2. For the quarter 1, on stand-alone, we registered a net loss, profit after tax of INR 87 crores which includes onetime tax settlement hit of net of tax close to INR 40 crores. So business loss on stand-alone is actually on INR 47 crores, which basically came from 3 basic reasons: one is, of course, the commodity hedging loss. Another is, of course, the interest rates, which have gone up substantially in last 1 year because our -- most of our borrowing is a dollarized borrowing. And third, of course, is this tax hit which we have taken for as a onetime hit. Similarly, when you look at the H1 '24 number, the profit after tax is basically a loss of INR 125 crores against a profit of INR 232 crores for the same period last year. So practically, a delta of close to INR 450 crores of delta which is, as I said earlier, coming from the hedging losses and partly because of the interest rate hikes and the onetime tax settlement, which we did this quarter. On consolidated basis, the things are not different. They are more or less similar. In fact, a little bit -- little gone adverse as compared to stand-alone because, unfortunately, for us, we are suffering losses in Bangladesh as well. But as I said, we are watching the situation in Bangladesh very, very closely and have curtailed down our business so that we doesn't -- don't lose any more there. We are hopeful that once the country goes to the election sometime early next year, the things should start falling in place there, and we should have operations giving us better results. So on a consolidated basis, the quarter loss is close to INR 131 crores, which again includes tax INR 40 crores of tax settlement and the rest is coming from the commodity and interest price. On segment basis, revenues dropped by 13%, majorly led by Edible Oil because Edible Oil prices corrected big time in last 2 quarters, quarter 1 and quarter 2. However, the very good part is that the Food & FMCG continues to grow strongly on revenue as well as on the volumes. So revenue grew by 26% when we look at quarter, and revenue grew by 27% when we look at H1. And Food & FMCG and Industry Essential also gave us a good segment result. If you look at H1 number for Food & FMCG, we are now -- we can say that we are good EBITDA positive and has delivered a good number as far as the Food & FMCG is concerned, quite early than what we had expected earlier. Edible Oil is the only segment which registered loss from segment perspective, which is more of coming from the hedging losses that we suffered. I think in Edible Oil business, one quarter here and there can be exception, but I don't think as we go forward in quarter 3 and quarter 4, this problem will continue. Just to give you more flavor on how the things have been panning out for us. If you look at our quarterly trend of gross profit or gross margin, rather I would say, it is steadily there for last more than 7, 8 quarters, except for these last 2 quarters where we had suffered because of the commodity losses, which is evident for last 14 quarters. Similarly, EBITDA is also in a range of anywhere between INR 450 crores to INR 500 crores for every quarter, but suffered in these 2 quarters. And this is also reflective when you look at the per ton analysis of the margins. So our gross margins, as we have been saying earlier also, a steady-state gross margins of close to 11,500 is something which is normal for our business, except for these 2 quarters. Otherwise, in the last 14 quarters, we have been consistently giving this and EBITDA per ton as well. So this is all from my side in terms of a short and a very brief presentation for the quarter 2 and what has happened. We tried to explain what are the things we didn't go well with us and what are the things where we feel that quarter 3 and quarter 4 should be good for us. Having said that, I end my presentation here. And I request moderator to open the lines for question-and-answer, we would be happy to take that.

[Operator Instructions] The first question is from the line of Abneesh Roy from Nuvama Institutional Equities.

My first question is on the overall performance. So 2 back-to-back quarters, your EBITDA has been quite weak. So wanted to understand what are the learnings here. And second is in spite of being a strong market leader in edible oils with 19% market share, 1% EBITDA margin or near that in the first half, both Q1, Q2, why do you see this performance? And when you say that Q3, Q4, the performance would be better, how much better will it be? Because commodity has been now stable for many months. In that context, 1% margin for 19% market share and #1 player, what does this reflect on the total industry? What are the issues? What is the down trading, downgrading happening given we are seeing that in many other FMCG, if you could discuss that also.

Yes, Abneesh, so to answer your question, see, quarter 1 and quarter 2, the only issue which, not Adani Wilmar but I think entire industry faced is the disalignment of the hedges and which is something which is very, very unique, very, very exceptional thing to happen, that you go and hedge your risk and it works against you. So what happened was all our hedges were not in money. Instead of protecting our base, actually, we lost money there. And this is only a onetime phenomena which happened for the quarter 1 and quarter 2. So it's something which I don't think should continue as we go forward. And therefore, from a learning point of view because your question was what were the learnings, I think there is no major learning as such. I think it's something which we feel that something which has happened once in a while and should not be happening again. And therefore, we are quite hopeful for quarter 2 and quarter 3. Similarly, on an EBITDA margin per se, our steady-state EBITDA margins are anywhere between INR 3,000 to INR 3,500 a ton. And if the market continues like this, and I think -- I don't think now there would be any further disalignment of hedges will be there, so we should be able to deliver that for quarter 2 and quarter 3. Having said that, it's not about Adani Wilmar, I think entire industry did suffer on this. And I would request Mr. Mallick also to add to this.

Abneesh, your question is very right that what is our learning. One of the learnings that we have is that possibly inventory management can be relooked at the way, the markets, if they don't work in tandem, then one thing sure is that you can reduce your inventory. But then the country is consuming more. If you see our full H1 growth in Edible Oil, the branded packed edible oil has grown at 23%. Now honestly, we have not seen this kind of growth in last 8, 10 quarters or even more before COVID also. So this type of consumption happened because after a long time, the edible oil prices came down and consumption was, I would say, fierce. Out-of-home consumption was very good. Otherwise, branded packed edible oil growing at 23% is unheard of. So that we were worried to reduce the inventory, then we lose it. And if we had inventory, so we had to buy. So when you buy, obviously, your hedges were not in tandem. So that is one learning we have. But going forward, as you said, it is now a steady state. Yes, last 2 months, little steady. August and September was okay, okay. October was even better, I would say. So our pain has now gone. So going forward, we should perform the way we were performing, possibly better. And as you rightly said, if the #1 brand is not earning, then how can the industry earn? Obviously, we have been earning in Edible Oil, and we see that coming back in action from Q3 onwards. Bigger issues -- bigger good thing that is food business, that the Food & FMCG business grew at 19% this quarter. But domestic, we have grown at 52%. What we lost on is the export of rice. That was a big chunk of the business that we lost. So that reduced our growth overall. Otherwise, if you see the domestic growth because of Kohinoor and Fortune. Basmati rice, we have grown at 50%. Branded atta -- Fortune Atta has grown at 50%. So that is a very good sign of: one, consumption; second, brand strength; and third, distribution strength. So going forward, we are very optimistic about our performance from Q3 onwards.

Two very quick follow-ups. So one is in terms of the hedging impact, can you quantify both in Q1, Q2? And second, would you be changing your hedging policy? I understand the inventory levels can be very dynamic. So I'm not questioning that. But in terms of the overall hedging process, do you see some change which is needed? And third is whenever deflation happens in Edible Oil, the margins, in fact, go up because your cost -- your profit is mostly on -- in terms of the tonnage. So will that be again happening in H2 and FY '25 when things are stable and you get benefit of the current RM? Would you expect that actually the EBITDA margin should be ahead of what was seen in the stable periods of last 2 years?

See, Abneesh, if you look at the profitability for H1, I will talk on H1 rather than only talking on Q2. So last year, we had a net profit of INR 242 crores against -- this year, it is INR 210 crores. Of this INR 210 crores, you can take out that onetime tax hit. So there is a delta of close to INR 350 crores between the profitability, which we registered last year and this year. And now this majority of this basically is due to the hedging losses. Now these hedging losses, as we earlier said, it's not because we kept positions open. It is because we hedged. And therefore, it turned counterproductive for us. Usually, it doesn't, never, but it's onetime only. Having said that, there is no need to change in our risk management policy. In fact, because of the risk management policy, we could restrict the losses to the extent of only 15% to 20% of our full year EBITDA. Having said that, there is no change in our hedging policy, except for the fact that one corrective action that company may think of taking is that we can distribute the hedges between various mechanisms. For example, we can reduce the hedges on the CBOT rather than we can take it on the OTC. So that is something the company is certainly looking at, and we will take that corrective action, one is that. And therefore, when we go into the quarter 3 and quarter 4 since this disalignment has more or less now been over, we should be looking at a steady-state run rate which we were giving in past some quarters and, therefore, the things should look better for the half 2.

And your margins will improve?

Yes, of course. They should improve on 2 counts: one is your per ton margin has to improve because we don't foresee now more hedging losses coming in next 2 quarters. Number two, though we don't look at margins as a percentage of the revenue, but those will also improve given the fact that the prices have already corrected and the prices are at a very low level. So in terms of percentage to the revenue as well as per ton, in both metrics, you should see the improvement in the margins.

Sure. My last question is on the basmati rice. As per your presentation, you lost around 100 bps market share. I wanted to understand there is there any one-off? Second is in terms of the exports. Would you need to set up new distribution teams, new distribution tie-ups because the 2 other listed basmati rice players are doing really well. Of course, a lot of regulation changes are happening. So in terms of exports, what kind of a scale up in team and distribution you would be needing?

On this market share loss of around 200 points, one is that basmati rice, 50% of the business comes from modern trade and e-com. Now in modern trade, normally, we have tie-ups for big days and big schemes. Last year, April, May, we had a big scheme with Reliance and our volumes were very high for 2 months of June. But this year, we shifted that to Kohinoor. And this year, we did with Kohinoor and oil -- our oil and Kohinoor Basmati rice. Obviously, the Fortune was not taken. Now you see in October, November, Fortune and our rice bran oil is the combi pack for Reliance. And I can tell you, these are big events where more than 0.5 million packs are sold, minimum 0.5 million. It can be even 700,000 tons to 1 million packs in 2 months. So that is the kind of volume that comes together. So the market share jumps and then again comes down. That is what it is. But nonetheless, we have noted it, and we are working on how to increase our presence in general trade and all that. That is part one. Part two is that export. Yes, export is a bigger market for basmati rice. So we have started increasing our presence and distribution of Fortune brand. We have started Jubilee brand as a second brand and we are now looking at different markets for Jubilee. But other than that, we have tied up with a few good parties in Saudi and other countries where we have started negotiating for big volumes coming October -- November onwards because they start buying only from November, new crop comes in. So November onwards, we have done it. Domestic market also, our HoReCa department has started working very well. And as you know, HoReCa market is going to be very big with the new marriage season coming in. There also, we have started contracting the caterers and hotels and all that for banquet and all that. So big volumes are expected in H2 in both basmati rice, edible oil and other food products.

[Operator Instructions] Next question is from the line of Karan Bhuwania from ICICI Securities.

So firstly, sir, on the drop in profitability, so I see there's a drop in profitability in gross margin and EBITDA level as well, however, the drop at EBITDA level is much higher. So how -- what can we expect? How can we see this profitability going forward in, say, second half? And if you could also provide some guidance on overall growth numbers for the second half?

See, on the EBITDA level, whatever drop we are looking at is basically due to the commodity loss, which, as I explained, we booked for this quarter. Having said that, this commodity loss is, I think, something is now far behind us. I don't think that we will have this situation as we go forward in the next quarter. We should continue to grow on double digit as we have been able to do in H1. H2 also, and since the demand forecast is more in H2, so we should be able to grow. And our steady-state run rate per ton on EBITDA as well as gross margin and other business parameters, we should be able to deliver that what we have been able to deliver for last more than 10 quarters. So it should be a normal quarter 3 and quarter 4. Quarter 1, quarter 2, of course, remain an exceptional only because of something which we never actually expected on hedging front.

Got it. Just a follow-up on that, sir. When will the pricing correction will we have taken in the Edible Oil business, when will that base get over? Because the revenue growth is still negative, right? So I know that the volume growth is in double digits. But when does the price cycle comes into our base...

Sir, sorry, you're not audible.

Can you hear me now?

Yes, sir.

Yes. Just asking about the pricing. Are we taking any further pricing actions on Edible Oil portfolio? Or it's just a correction that we've taken earlier?

See, on Edible Oil, the prices have actually come down steadily over the last 3 quarters. April -- this July, August, September also, the prices corrected by almost INR 5,000 to INR 6,000 a ton. But somewhere, we see the bottom out is happening and the markets are now getting back into the steadiness or a little positive side. Now we generally don't follow so much on the prices. Our pricings are based on the market prices and basis that we are doing it. I cannot comment like that, but it looks like the bottom is over. The markets may not fall, so that is how it will remain steady. But even if it falls, it doesn't matter. For us, the brand takes that much amount of cushion. Price-wise, these are all very acceptable price to the consumers.

Got it. Also sir, you highlighted that the rural is growing slightly better than the urban markets. Would you attribute that to a better demand environment and improving demand environment in the rural markets? Or would you attribute that to your distribution expansion that you're currently carrying?

See, rural contributes roughly 30% of edible oil business and around 31%, 32% of the food business. Now the growth, if you see both Q2 as well as of first half, the growth of rural has been slightly higher than urban. There can be 2, 3 reasons. One, the edible oil prices have actually now been shifted into and consumers feel these are good prices. So they are comfortable with it, one. Two, the food business has done well because, wheat, we are seeing there is a very good growth in branded wheat flour business that is because the government PDS reduction and free-open market sales reduction has ensured that the availability of cheaper wheat is not there so much. So people are buying flour and then people obviously would prefer a branded flour. So that we are seeing branded flour is increasing. Even local rice is increasing. Sugar, we do around 25%, 26% of the branded sugar sales comes from rural market. You won't believe, but 45% of my besan business comes from rural market, half kilo besan, I can tell you. So branded besan is doing so well. So all these products shows that rural markets are slowly gearing up, but H2 will be better than H1. Normally, we have seen rural does better in H2.

Got it. So if you could give some broad breakup of the food business in terms of branded consumer business, the HoReCa business and the exports business?

On food, if you take total food basket, our domestic business is bigger, out of which the branded business, total food branded business will be roughly around 80%, 85%. Rest of that is traded product. That is one. Two, exports of food is less because basmati -- non-basmati rice got impacted, and that is why our rice exports reduced. But overall, we do roughly around -- we had around 200,000 tons of exports food business on a good year. Now that has reduced a little bit because of the export restriction of rice. Third is HoReCa. HoReCa business, we started around 8 quarters back as HoReCa. Otherwise distributors were supplying to hotels, but now we have a separate division, separate team, separate distributor, separate mechanism to monitor it, which is now growing at almost 50% quarter-on-quarter. And we today do roughly around 100,000 tons of food and oil only to HoReCa -- branded sales to HoReCa.

Got it. I have a few more questions. I'll come back in the queue.

[Operator Instructions] Next question is from the line of Nitin Gupta from Emkay Global.

I basically wanted to get a sense on like since we are operating in the food part of the business. So we have been getting out regional competition getting aggressive. So just wanted to have a sense from you, which part of the business you are seeing more competition from the regional players.

See, in oil and food, both we have seen competition from regional players. In Edible Oil, it is mainly non-refined, like mustard oil, groundnut oil, cottonseed oil, you will get, which are local oil, rice bran oil. You will get local competition that is stronger than national brands. And in refined oil, it is the national brands. Now for us -- and in food, atta, we have several small players, but they are all in a state or within a state also, they are in one location. Besan, I have seen 8, 10 such local players. And sugar also, you have seen such kind of players. So for us, our strength is our distribution model that is the integrated distribution model. So when we start in a factory, we have more than one product. So it would be food and oil in each of the factories. So we have common manufacturing facilities. After that, we have common distribution facilities. So obviously, our distributors are common, salespeople are common and then the retailer is common. So this entire common chain helps in reducing cost per ton. And in commodity business, you will agree that ability to reduce your cost and pass on that benefit to the consumers will be most important. So if you have to fight, we fight against quality, one, consistency of quality, brand power and distribution strength. So we can take all our product to the retailer and give him the option to buy anything or everything, that gives us strength at the ground level. So overall, overall, for us, yes, competition is there from the local players, but we are able to grow faster than that.

And just wanted to get a sense on like this time around, it is more of raw material prices coming down and sort of this surge in competition. So do you consider this competition is like say, pre-COVID levels and the raw material prices are stable. Is it that level? Or do you still expect the normalcy to resume in the next couple of quarters?

I think we are back at pre-COVID levels in terms of consumption. And with this new wedding season coming up, we will see very big wedding season. Why big? Number of people restriction is not there. People are going out and spending and they're going out and eating. So out-of-home consumption is going to be very big. And I have seen good brands have advantage. People like us have advantage because I'm giving a plate of products which -- a basket of products. So that helps the hotel to pick from us any and everything. So we give them a basket and we give them better service. So our distributors are more aligned for it. So there we have advantage.

But my question was more from the perspective of regional competition. So from the competition what we see from the regional players, so this has gone up at the back of easing in raw material prices. They have reemerged in the market and sort of giving us a competition. So from competitive lens, how do you think pre-COVID and post COVID?

See, regional competition was there earlier also, pre-COVID. It is now there also. But over the time, I am seeing regional competition is reducing in basic staples because, one, ability to buy and store is reducing. Second, ability to distribute cost effectively is they are losing on it. And second, consumers are becoming quality conscious. So end of the day, good brands will win. Even if it's a regional player, but he's giving consistently good quality will also win. So -- but slowly, the regional players are losing out on these fronts. But not that they will not exist. Regional players will always exist.

Sure. And my last question is with respect to this cold-pressed oil on sort of a super-premium single commodity oil where like players like Dabur have emerged and you have Tata Consumer launching products -- the traditional company, while there are multiple players operating in that segment. So how big is that segment? And what is our thought to participate in that segment?

See, these are very small segment and very niche segment of cold press. Yes, it is visible, but they don't sell so much. And volume-wise, surely very, very small. We are also introducing our own cold-press oil, which we are now ready and possibly in a couple of months, we will introduce first with the mustard oil because there, we have a lot of strengths as #1 brand of mustard oil. So we can do that. So we are working on it. But these are niche products, still today in India, but we will surely be there.

[Operator Instructions] Next question is from the line of [ Jasmine Surana ] from VT Capital Markets.

I wanted to understand the trend of the new...

Sorry to interrupt you, can you speak through the handset.

I wanted to understand the contribution from the new products, which we have launched recently. And another question would be on the mix in terms of our Edible Oil, our FMCG and the Industrial portfolio. So we can see that the historic trend was around 80% of Edible Oil, around 5% of FMCG, which has now changed a little bit. So where do we see these numbers stabilizing?

See, I will answer your second question first, which is about the contribution of various product lines. See, we don't look at the contribution of the product from a revenue perspective because the edible oil prices keep moving up and down and, therefore, you don't get real structure of the contribution. So what we look at is volume contribution. So as we speak today, close to 58% now comes from Edible Oil, which earlier used to be 65% two years back. So it's slowly coming down from 65% to 58%. And what is going up is basically Food & FMCG segment from 11% to 18% in the last 2 years. So 58% contributed by Edible Oil, 18% by Food & FMCG and rest is coming from the Industry Essentials. So this is how the construct of this -- our product lines. Having said that, as we go forward, the Food & FMCG will keep going up because Food & FMCG today is growing at a CAGR of plus of 30% year-on-year whereas Edible Oil will keep growing at a -- with a single-digit kind of growth, but that is how the industry is. And therefore, as we go forward, the food will significantly improve. Edible Oil will slowly come down and that's good because to that extent, you are derisking your entire business model because Edible Oil certainly has got its own risk profile due to the commodity hedging -- commodity volatility. And coming back to your first question, can you just repeat that first question again?

My question is on the NPD and on the mix.

Okay. So NPD, basically, we have today -- we have -- so last year, we launched poha, which is the flattened rice. Then we had khichdi, then we had chunkies. And then we have lined a couple of -- like we have a Biryani kit. It's a very -- at a very nascent stage and does have a very, very small volume to cater in the entire scheme of the things. But having said that, it is growing steadily. These are all niche products and, therefore, will never be able to showcase a very huge kind of volume, but these are good value and margin accretive products. And we are hopeful that we would keep growing on this year-on-year.

Just a last question in terms of the premiumized products that we're selling. Would it be able to get a ratio of how much of the products are selling in the premium end and how much are at the mass end?

See, I can give you one breakup. I wouldn't be able to give you how much is premium and how much is not premium. But for us, the Fortune brand itself is a premium brand in the country. So therefore, when we look at Edible Oil portfolio and when we look at Food & FMCG portfolio, close to 65% of our branded sale comes from the Fortune, which according to us is a premium brand for us. And then rest of the 35% is from all our masstige brand or fighter brands which are there in the market to protect the Fortune.

[Operator Instructions] As there are no further questions, I now hand the conference over to the management for closing comments.

Yes. Thank you, everyone, for attending this call. We request everyone to keep attending our quarterly earnings call to know business more, to know company more. Thank you again, and we look forward to see you again in the next quarterly call. Thanks.

Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.