CCL Products (India) Limited (519600) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the CCL Products India Limited Q4 FY '21 Earnings Conference Call, hosted by Nirmal Bang Equities Private Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhishek Navalgund from Nirmal Bang Equities. Thank you. And over to you, sir.

Thank you, Sanford. Good evening, everyone. On behalf of Nirmal Bang Institutional Equities, I welcome you all to 4Q FY '21 Earnings Call of CCL Products India Limited. From the management side, we have with us Mr. Challa Srishant, Managing Director; Mr. K. V. L. N. Sarma, Chief Operating Officer; Mr. Praveen Jaipuriar, CEO of Continental Coffee; Mr. V. Lakshmi Narayana and -- CFO; Mr. P.S. Rao, consultant, company secretary; and Ms. Sridevi Dasari, company Secretary, on the call today. So without further ado, I would like to hand over the call to Mr. Srishant for his opening comments. And then we'll open the floor for Q&A. Thank you. And over to you, sir.

Yes. Thank you for the introduction, Abhishek. I'd like to welcome everyone on the call to -- everyone to this call, and I hope everyone is keeping safe during these difficult times. As far as the company is concerned, despite COVID last year, we are pleased to declare the following results. The turnover for this full year was -- for the financial year 2020, '21 was INR 1,245 crores, as opposed to INR 1,143 crores for the previous year. The EBITDA was 301 crores, as opposed to 290 crores from the previous year. The profit before tax is INR 234 crores, as opposed to INR 225 crores from the previous year. The profit after tax is INR 182 crores, as opposed to INR 165 crores from the previous year. For the current year, the guidance that we are giving is in the range of 10% to 15%, which is again going to be subject to a lot of variable factors, especially COVID, how things pan out going forward, how strict the lockdowns are; and these variable factors which are not in our control, but we will endeavor to do our best to achieve growth trajectory like we've been doing in the previous years as well. We can open up the floor for questions.

[Operator Instructions] The first question is from the line of Jignesh Kamani from GMO & Co.

Srishant and entire team, congratulations for a good set of numbers. Srishant, I just want to know on the containers availability. Last -- in third quarter, we mentioned that -- close to 50 crore to 60 crore worth of products we couldn't displace because of the containers nonavailability -- so safe to assume that entire product got displaced in the fourth quarter and there's -- right now there's no issue on the containers nonavailability.

I think most of these questions is Sarma will answer.

Okay, right, yes. As I told in the last call itself, we have found out -- I mean we optimized our business operations by utilizing incoming containers and all that. So you will see in this quarter, last quarter, particularly our dispatches were high. And if you see our financials, you will see that the old inventory has more of -- there is no -- it is accretion to the inventory. That means we were able to dispatch substantial quantities [ further ], but on a continuous basis, we will remain -- we will have some kind of -- some inventory, for which the schedules [ may not have been there ]. And the pre-shipment samples most likely [ will not prove ] and all that, yes, but during March, we were able to substantially [ followed this issue ] and was able to dispatch major quantity [ and ship ].

And we had a accumulative arrear of close to 28 crore from the MEIS subsidiary. Anything we received in the fourth quarter? Or still we haven't received anything.

In the fourth quarter, we did not receive [ anything ]...

No, we did not receive anything.

Okay, okay, understood. And my last question is the Russian demand has been pretty weak because of the COVID lockdown. How is the current scenario, particularly for the high-margin freeze-dried coffee?

That has actually started recovering from last quarter itself. That's one of the reasons why there was an increase in sales and dispatches also. So the same thing is happening this year as well. A lot of things are coming back to normal over there. Now Russia also, I mean they've taken a lot of proactive measures and all that over there, so things are significantly improving there.

The next question is from the line of Mayur Patel from IIFL Asset Management.

Just one question. Overall, the performance I think was very good, but any reason behind the softness in Vietnam? And how do you see the recovery in Vietnam going forward?

Vietnam, we have -- we did have optimum utilization during the current year and it will continue. In fact, we are enhancing the capacity there, so we are expecting the -- a better performance in the coming year.

And also, on the margins front, do you think the Vietnam margins would improve going forward?

Vietnam margins will improve on various fronts. One is, of course, the superiority of the product itself. And then we are able to -- because we are in the heart of coffee land, the working capital requirements vis-à-vis working capital costs, et cetera, finance costs will be lesser. And in fact, one other thing to be noted is that the original plant is also getting depreciated in 2, 3 years. So the depreciation on account of the old plant might also come down, so there is an possibility for improvement of margins in Vietnam as such. Of course, we are in -- right now we are doing some line balancing and augmenting the capacity. We are seeing a better traction and we might be inclined to double the capacity very soon.

The next question is from the line of Rupin Shah from InCred Asset Management.

Srishant, I have a couple of questions. First one, gross margin. So we have shown a sharp sequential improvement in last quarter, and the Y-o-Y [ is same ]. So like -- so is there any seasonality in 4Q that the company will report the higher gross margin in 4Q every time? Or it's mainly because of the change in product mix towards the freeze-dried portion. And yes, is it sustainable or every quarter basis now?

[indiscernible]

[indiscernible], [ I must say ]. The -- during the last quarter, freeze dried dispatches were substantially -- and it depends on the product mix. If I am selling most of the small packs and all that during the quarter, it might vary. So it is better we always take it on an Y-o-Y basis because this cannot exactly replicate to be in the subsequent quarters, where during last quarter, et cetera, since people [indiscernible], but being a season, people wanted a packed product which can go into supermarkets directly. So maybe during summer season, they may not want the product in a packs. From where they will purchase in bulk, where these gross margins, et cetera will get changed. So on a Y-o-Y basis, there is a consistency, and it is sustainable as well.

Okay. And Srishant, can you specify the contribution from freeze dried currently in volume in 4Q and FY '21?

FY '21, we were able to operate our freeze dried capacity only to the extent of about [ 62% or also -- 62% ] only because of the compulsive lockdown that we went through and then because of [ duration in the orders deferment ] and all that, yes. This year, there should be an improvement on that.

Okay. And secondly, on volume guidance, you have given 10% to 15% volume growth for FY '22, so can we take like 2 similar -- like keeping in mind like 2 scenario? One is the same situation of logistics issue currently you are facing. So what kind of volume growth is possible considering the current situation? And if -- the second one is if there -- like you will see some good improvement in the space and the lower freight rate benefit, then what could be the volume growth for FY '22?

What was the second one that you mentioned?

Yes. So in 2 scenarios. First is the same scenario like...

[indiscernible] -- one is on the logistics piece. Second one?

Yes. So in second one, the improvement from here. Like the space availability and the lower freight rates. So what kind of volume growth one can see for FY '22?

See, we have taken -- the disruptions are there, and perhaps we must have made a smaller discount for these disruptions as well. The -- confidently we can say it will be, as stated, 10% or so for the [ present ]. So we will review at the end of first quarter, around second quarter, whereby the peak season commences. By that time, if there are no further disruptions and things [ ease out ], maybe we will revise it to a better figure later.

Okay, understood. And lastly, Srishant, in this [ tough phase ], like when you don't supply to your overseas line on timely basis because of some [ system ] [indiscernible] -- so what is your experience, in terms of -- like in terms of relationships, because of decline? Do they discontinue it completely? Or for short term, like, they arrange for somewhat -- somewhere else. Or they simply wait for the things to normalize.

Last year, disruptions were worldwide. It's not very specific to India as such, yes. So there was no alternative source for them also. In fact, in many cases, we have taken initiative to organize faster supplies wherever they are not able to manage containers or logistics from their end. We have managed them since then. There was no major complaints from the customers because all of them knew that this has been the case. And perhaps second thing that we are doing, what we have been doing is that -- we have a warehouse in U.S. and our own customs bonded warehouse in Switzerland, yes, where there are some stocks, so there was no desperate situation that have come to any of our [ customers' assets ]. Of course, the delays were there to the extent of reorder levels or minimum levels to be required, but there was no total out-of-shelf situation in any of our customers' places.

The next question is from the line of [ Himanshu Olyer from YES Securities ].

Congrats on a good set of numbers. So just wanted to understand the current quarter numbers, if you can give some more details as to what has happened in Vietnam, because if I do the calculations, the margins seem to have come off sharply from historical levels, while it's completely reversed in the India business. Margins seem to have made new all-time highs. I am talking on an EBITDA basis. And even on the top line front, the momentum that we were seeing for the last couple of quarters, sequentially, it looks as though the utilizations have come off. So is it a one-off issue where some shipments are stuck out there, or is there something else? If you can just explain the Vietnam performance for this quarter.

Vietnam current year is -- I mean we are speaking about the year that has passed, 2021. 2021, we are almost consistent in Vietnam, but see, for quarter-to-quarter there may be a few variations here or there. And [indiscernible] -- one of the customers may have asked for a small reschedule-ment and all that. Otherwise, there is no major large variations in Vietnam.

Understood, understood. And second thing, sir, the enhanced capacity, when is that now expected to come on stream? Because I believe it -- there have been some delays in that.

Yes. People are -- there are no travel facilities available. And even if one of our -- there is only one flight operating there, in which also only the deployments and others have a preference. Business has a large preference in that, yes. And even after going there, there is a 21-day quarantine. So for any technicians to go and work on the expansion part, it is taking -- the person has to plan at least 1 month in advance, yes, but still we are almost at the stage of completion stage. And the facility should be, most likely, available from the first quarter end. July 1 onwards, it should be available for production.

Understood. And sir, for the year as a whole, can you give the broad capacity utilization numbers separately for India and Vietnam?

For the previous year?

Yes, yes, for the previous year, the whole year FY '21, yes.

We have done about 60%, 61% on FD. And then Vietnam, we have [ always ] done an optimum. Our optimum [ limit is about ] 94%, 95%, yes. Duggirala, there have been disruptions. We have done about 65% or 70% there. And there is a large product mix within that. So we cannot exactly bring it to one single figure because of [indiscernible] small pack capacities and all that, but about 75%, we could do it [ last year ]...

But the Chittoor plant, which was running at -- expected to optimize that. You have run at only 60%, 61% for the year, right?

No, no, no. I have taken the total FD capacity. We do not differentiate because it is a second unit for the main plant, yes. We consider the total FD capacity [ in the business ].

So FD, you did 61%; and spray dried, you did 70%, 75%. That's what you're saying.

That's correct.

Understood. And sir, final question: If you can just update us on the India business performance for both the quarter as well as the year in terms of the top line and the loss that we would have seen.

That -- because [ the figures are good ], Praveen will explain better. Praveen?

[indiscernible] we touched a top line turnover of 150 crores, which is a substantial growth over last year wherein we were close to 90 crores. So we almost witnessed around 60%, 65% growth on the top line. As far as the bottom line is concerned, we were almost breakeven. There's little margin loss this year because of higher input costs that -- the bean prices went up. So there was a little -- a very marginal loss this year, which was approximately, let's say, minus 5 crores and roundabout. So that's where we were.

And any outlook would you want to share, sir, or for this year for the India business given we are seeing very strong traction?

Yes, yes. We did see a very strong traction, but we -- this -- currently the second wave are actually -- now that our [ bases ] are also reasonable. And the second wave has -- it hit quite badly in terms of -- and you must be reading all across. In fact, every current segment is more affected this year than last year. So we really don't know. We were looking at a growth of 30% to 40%, but probably if things normalize from July onwards, then still we can look at a 25%, 30% growth this year, but a lot will depend on how quickly things will settle down because, everywhere, we are seeing lockdown, which is hampering the logistics, and supply issues out there. And once again, our institutional segment, which was -- which started to pick up in the last quarter when slowly the hotels, the airlines, the offices have started opening where we started doing a decent amount of business in the last quarter, has again gone back to shutdown mode. And the business has come down to almost 0 there, so that's something to be worried about, but we're just hoping and praying that things settle down from quarter 2.

Sure, sure. And just one final question, if I may squeeze in, for Srishant maybe. I mean seeing the price trends that we are currently witnessing on coffee. So -- and given the 10% to 15% volume growth guidance we are giving, so finally can we see a year when we can see, say, much higher growth in revenue because of better realizations? Do we have that sort of visibility yet?

Actually it's whatever is the price increase that we are seeing right now is mainly because of Brazil. And in Brazil, the thing -- because of the water shortage and all that, the arabica prices are going up, but if you look at it, in Brazil [indiscernible] robustas, there's an excellent crop. There is no shortage. There's a higher crop than what was there in the previous years. All the other countries which are growing robusta, including Africa, Vietnam, Indonesia, the robusta crop has been really good. And more than 90% of what we buy is robusta. So there is not that much pressure on the robusta prices, but it too rarely go up. If arabica is going up, robusta may be moving as well, but then in differentials there will be a change. From positive differentials, you'll have negative differentials, which is why, though there is a slight increase, we are not sure how sustainable that is in the long run. So we are still going on the assumption that green coffee prices will be similar to what they were in the previous year. And as everyone is already aware, since anyway we work on a cost-plus basis, that impact is going to be quite minimal for us when it comes to margins and all that.

[Operator Instructions] The next question is from the line of Rahul Ranade from Goldman Sachs Business Management.

Congrats for the good set of results. Just if you can kind of remind me of our capacities existing: So is it right that India has around 25,000 of installed capacity, and Vietnam has 10,000? Is that the number?

Yes, that's correct. We are expanding in Vietnam now.

Currently...

Okay, okay. So currently it is 10,000. And then where will Vietnam capacity go to?

13,500 initially.

Yes...

13,500, so 3,500 additional, all right. And within India, for the 25,000, it is 15,000 and 10,000 between spray dried and freeze dried, right?

Yes.

Okay, okay, okay. And just one more question. So on the retail business. So India business top line, which you said was 150 crores, out of that, how much will be the continental brand of coffee? And how much of it will be institutional?

So almost 2/3 will be brand, and 1/3 will be institution. So you can say 100 crores almost will be brand. And 50 crores will be bulk and institutions and private labels.

Okay. And will this proportion be similar for last year also from 95-odd crores top line?

No. Last year, the brand [ saliency ] was lower. It was almost maybe 55% or so. So it has moved up to 66%. So we are constantly -- the brand is growing much faster than the bulk and the private label business.

Understood, understood. And just on our ability to maintain spreads: So like obviously you kind of mentioned just now that since it is a cost-plus kind of a model. But just wanted to understand in terms of timing leads and lags. Like how does repricing happen? Because when the prices are moving so fast, like could it kind of induce some volatility in the margins in the near term?

No. It depends on the -- contract to contract. So customer's requirement of the product. And we discuss every contract individually. So that contract will be based on the prices existing as on the date. Or within that vicinity will be the basing on which is -- because as a business model itself, we cover green coffee on a back-to-back basis immediately on concluding the contract. This, all customers also knows. So that price for that contract is valid until execution. There is no change on this. So if, 1 week later, the prices come down, the contracts that are made during that period will be based on the green coffee prices. Of course, it's a combination of green prices vis-à-vis material availability as well because, many a time, the quoted price, there may not be stocks available. So we take both of them into consideration [ and quote that ]. So every contract is independent and is concluded basing on the then raw material price.

Understood. Understood. And just one last question. So if you could kind of comment ballparks kind of a geographical spread of our end markets, how much of it will be somewhere in Europe versus Russia, Africa? And I think, U.S., we are not very well penetrated, if my understanding is correct.

U.S., we are [ entering ]. In fact, for the past 2 years, we are making an earnest effort to improve our presence in U.S. We were around 10% in U.S. earlier, which in the near future we should be improving and anywhere to approximately 15% or so. Generally our solid existing percentage of sale would be about 25% in Europe, 25% in Russia and CIS markets. And then the others are spread over Africa and there -- Africa, Asian countries [ and other places ].

The next question is from the line of Jignesh Kamani from GMO & Co.

Srishant, on the Vietnam, we are operating at optimum level. And even after July, the capacity of 3,000 probably will be fully utilized in, say, 6 months or 9 months. Any plan to double the capacity expansion at Vietnam because we already have all the infrastructures in place?

We are working on it actually. So maybe soon you will hear that we are doubling the capacities. And we are also evaluating the visibility of order books for that. We already have something concrete that is coming up. So maybe we will initiate, we will start the expansion in Vietnam by about September or so.

And it will take around 1 year to complete, right, once we initiate...

This may not take 1 year. Our supply time of equipment is one factor that is there during these COVID situations. [ Outer ] would be 1 year. Otherwise, we should be able to implement within 9 months time.

Sure. And second thing, on the small packs: How was the small pack volume growth rate in this year? And with -- considering capacity expansion, how is the small [ cap ] volume growth for the next year?

In fact, we were able to compensate some of the lower utilization of freeze dried with our small packs. The small packs, the packing plant [ direction ] was delayed because of this COVID situation and all that, but by that time, we have already procured the machinery for the packing plant, so we were able to put those into operation and enhanced our small pack capacity this year. Because of which, we were able to compensate the freeze drying -- reduction in freeze drying turnover. Going ahead, already we have spread the substantial visibility with our small packs in various markets. Not -- I do not wish to mention specifically, but various markets, they have already created a visibility for small packs. So we are expecting for at least from the second -- this year, by around August, September, we will be on full-scale small pack capacity. And we will utilize it for the full for the peak season, starting from October. Next year, we should be doing optimum utilization on small pack capacity as well.

The next question is from the line of Dhiral Shah from PhillipCapital.

Congratulations for the great set of numbers. And sir, if you can share the revenue and profit figure for Vietnam as well as Switzerland facility.

Come again. I could not hear -- [indiscernible], Narayana?

No, [ I didn't hear ] [indiscernible].

Am I audible?

Yes, now [indiscernible].

Can you just repeat?

Sir, if you can share the revenue as well as profit figure for Vietnam as well as Switzerland facility for FY '21.

Vietnam, I think we did about 375 crores turnover, with a profit of around 85 crores or so.

85 crores.

And sir, for Switzerland?

And then Switzerland -- anyway, Switzerland, it is trading [ as only now ]. We did a turnover of 180 crores. I think the profit was about...

7 crores.

6 -- 7 crores.

[ Sorry ]. Yes, 6 crores, 7 crores.

So this 180 crore includes sales from India, right? So I wanted to know the value addition part.

So net to net, I think the value addition was about 20 crores.

25 crores.

25 crores [ only ]?

Yes.

[ Yes ].

25 crores, of which 7 crores is profit.

Okay. And sir, what would be our [ ad spend ] target for current year for our domestic business?

Approximately 12.5 crores.

Okay, and how much, if parent company will be contributing?

This is what parent company has.

Okay. And sir, for the overall business, sir...

Overall [ ad spend ], is it?

Yes.

Somewhere around 15 to 20 crores...

[ Yes ].

Okay. And sir, what will be the CapEx for FY '22?

The FY '22. As of now, whatever we are online, we will be concluding them. The packing plant will be concluded and the line balancing of Vietnam will be concluded. Once we conclude our project costs and [ debating ] on the delivery schedules if we are going for Vietnam plant, then that would be there. If at all we spend anything, it should be in the shape of advances and initial amounts, which would be in the range of about [ 8 to 10 million this year ].

Okay. And sir, lastly, on the debt part, sir, we have seen the sharp price in short-term debt.

[ For this year ]...

Yes, sir.

Yes, there has been an increase. I mean, see, this is a twofold thing. We are a company where we cover our raw material, et cetera on a back-to-back basis irrespective of the delivery schedules of the product. So if you have seen our inventory, particularly our green coffee inventory has gone up substantially because we have concluded the contracts for the next year. So we have to cover those green coffees and not to get hit by any price fluctuations. So because we have to -- if you have seen, our inventory levels have gone up. So to get those inventory levels, the additional borrowing on a short term was taken.

Okay. And sir, any debt reduction plan for current year?

Anyway, there is a repayment schedule of approximately 84 lakhs repayment scheduled this year, so it will come down as such.

The next question is from the line of Akhil Parekh from Elara Capital.

Srishant and team, many congratulations on a good set of numbers. Just 2 questions from my one -- from my side. One is on the small pack. How much is the capacity right now? And how much we are expected to increase starting off first quarter of '22? And second is on the volume front, if we can guide in for the U.S. market. That's all from my side.

Last year, I think we have used about 5,500 tonnes with small packs. The capacity that we are installing is for 12,000 tonnes. It will be available for full-scale production somewhere around third quarter. I mean towards August, September of this year. So we should be utilizing almost the same capacity this year also. Year subsequent, it will be more. And the second is U.S. guidance. Srishant, [indiscernible]?

Yes, yes, just on -- sorry. Just small packs, you said from 5,500 tonnes we'll move 12,000 tonnes, [ right ]?

No, no. 12,000 tonnes is the initial capacity being created, wherein last year we have done approximately 5,500 tonnes on small packs. And this year also, we should be doing more or less the same figure or a little more. The optimum utilization will come from -- for next year. This year, we have to install those machines and all that is there. There will be some small disruption in small pack capacity this year.

[ Got it, got it ]. And sir, on U.S. front...

Yes. As far as U.S. is concerned, we've been -- as Sarma mentioned earlier, around 15% of our production is going to the U.S. market. So we are consistently growing that volume. There are a lot of new initiatives that we are taking over there. And till now, U.S. market has always been only a bulk market for us. Slowly that is transitioning. Last year, we were -- we've actually introduced our cold brew coffee in the U.S. We're the only company in the world that can actually make this particular product, and that became a really big hit. And we got an order of almost 20 containers, which was fully executed in small packs, to one of the larger supermarket chains. Seeing that, we've actually started getting inquiries from different other parts of the world, where they've seen these products in the U.S. and they've asked us to introduce in their respective countries as well. Similarly we are getting into more of small packs in the U.S. market itself. We are having tie-ups with several organizations to start introducing the small packs. So there's a change. This is a -- more long-term efforts that we are looking at. Bulk is being extremely competitive, so that's one of the reasons why we are going more towards specific qualities and specific [ brands ] in this particular market. So all these efforts will keep giving us better dividends in the long term.

Sure. So just to tie up the same: Basically as we go ahead then for next 2, 3 years, we'll see a higher contribution from small packs and which, hopefully, should help get us better realizations.

Yes.

Okay, okay, all right.

The next question is from the line of Rohan Gupta from Edelweiss.

Many congratulations for this fantastic set of numbers. Sir, just one clarification first on both these very solid margins in India business and the weak performance of the subsidiary, if you can just once again elaborate a little bit more on that for the current quarter. So...

Current the quarter -- current quarter. I mean the subsidiary business was in the normal [ course ]. Since we were focused on recouping whatever was lost in the first to third quarters and all that, we've run the -- as you know, we have been telling that the freeze-dried inventory has built up. And then we are having problems initially with suppliers' reschedule-ments and subsequently with logistic. So we made enormous effort and got these 2 things solved, yes. And also during this year, particularly, as I told you, towards the second half of the peak season, the customers would want to get the packed products so that they will -- not have time to get it repacked elsewhere. So we were doing -- packed the product also from here. Both these have contributed to higher gross margins. So vis-à-vis, you can see other expenses, there will be an additional packing cost also. So if we'll deduct that, it will look normal only. So in respect of small packs, the turnover looks higher, and there will be an increase in packing costs also...

So you are saying that the small packing has been done more in the India market rather than in Switzerland. And that is the...

So that does not have -- the entire small packs capacity is in India only. It is not there in Switzerland, nor -- it is not there in Vietnam. We are contemplating to establish small pack capacity in Vietnam in due course, but currently all the small packs are done from India only.

Okay, okay, okay. So this current trend which you have, sir, observed that customer is demanding ready packed and small pack [indiscernible]. That is more to do with the current pandemic scenario. Or it's more of that we have been able to take the higher market -- higher share in the...

[indiscernible] seasonality also. See, he will not have time to get a bulk product, get it repacked elsewhere and then get it to the supermarkets and all that. Instead we supply the direct product packed, in packed form which can directly go into supermarkets. It will be better for him. So he would be rather willing to pay a little more price there because he will be avoiding an intermediary there. This may not be a case with the first quarter or second quarter, which are lean periods where he would look for competitiveness and other things. So we have to take the overall thing on a year -- Y-o-Y basis, but on last quarter, we will have this small advantage. You will not deal with the spot prices kind of a thing. During the peak season, the spot prices will always be higher.

Okay, that's helpful. And sir, second question is on the green coffee prices which have been surging. You mentioned that it's robusta prices more or less are likely to remain flat, and it's basically arabica where one can expect the higher prices. So the inventory, sir, which you are right now sitting you have -- sitting on a huge inventory of green coffee. So do you think that we are not going to see any sort of price-led growth in FY '22 despite global green coffee prices are continuing to surge?

No. If -- you see, if for tomorrow I am concluding a contract, I will take tomorrow's price. And if tomorrow's price is an inflated price, obviously it will go into the pricing, but our experience has been that, when there is an inflationary trend in pricing, obviously customers would want to wait for a while to reduce the price and conclude the contract. Similarly it also happens that, during the times when the prices are in deflationary trend, they would want to conclude major contracts, but we will have to resist basing on the material availability at those prices. So these things will be going on, on a continuous basis. And in a period of 1 -- over a period of 1 year, all this will get neutralized. [ More or less, maybe ] at some point, we might see it will increase or decrease in turnover levels.

Sir, what I wanted to -- that generally in our business, as you rightly mentioned, that...

[Operator Instructions]

It was just only clarification on the same thing, if I may proceed.

Yes.

Okay, sir...

Sir, I was just saying that the green coffee prices -- you said that you are sitting on a huge inventory now. Just -- and you also mentioned that, as per your business model, you generally [ enjoy ] the per-kg margin. So the green coffee inventory which you are sitting, I expect it is not only speculation. It's basically driven by the increased order from the customer, right? So when your customer has already given you order, you are already sitting on a green coffee inventory, so even the green coffee prices have gone up, it will not get reflected in our revenues or the price-led growth.

So the green coffee that I have covered is in our -- physically available with us or available overseas. These, again, is the concluded contracts. So those contracts will have this green coffee price only. I will not have any additional advantage or disadvantage on the subsequent prices. The one thing that is an indicator is -- if I have a large stock of green coffee with me, that clearly indicates that, for the next year, my order book is -- can confirm the order book is substantially better.

Exactly, yes, correct.

So that is what we have to take into account.

The next question is from the line of Amit Zade from Antique Stock Broking.

Congrats on good set of numbers. Sir, most of the questions are answered, but lastly, on this clarification of MEIS scheme: So sir, [ there's been ] replacement scheme called RoDTEP. Is there any clarity on that field, sir? What could be the rates? Or any update on that side?

It continues to be like, Narayana, that the [indiscernible] are not eligible.

No, we are not eligible, but about the new scheme, they [ have to come out ] with a modality, yes.

Currently the revised scheme is not applicable to [indiscernible]. And they have to come -- they just mentioned that, but they did not come out with a detailed [ modalities, Amit ], so we are awaiting that. Having said that, we have an accumulated amount of about 27 crores or 28 crores towards the MEIS of where the exports are already made. We are expecting that substantial part of it can be realized during the current year.

Current year.

Got it, sir, got it. And one more question. Sir, volume guidance of 10% to 12% despite on a low base of FY '21, when we launched almost first quarter and the second quarter FDC volumes; and on the back of new capacities coming in, in Vietnam from second quarter onwards. So is that a conservative number? Or you believe that there will be pressure on FDC products globally because any trends emerging due to people consuming more of SDC products and instead of FDC. Any color on that, sir -- as well, sir?

Yes, I understand. I agree that the base number is lower. The denominator is lower, but the conditions have not improved as of now. Suddenly again during this year also these pandemic and lockdowns, et cetera are running, so we do not know what is going to happen. That is why initially on a minimum scale is we recoup whatever FDC, et cetera, we are last year. That will account for the [ 13%, 8% to 10% ] that we have been telling right now. If things are proving better and business can be done much better, then we will revise the numbers. We will review and revise the numbers in September, after second quarter.

Got it, sir. Because with easing of logistical concern and maybe lower customer deferrals, I think we can do much better is what I believe.

The next question is from the line of Sameer Deshpande from Fair Deal Investments.

Congratulations for the very good numbers. Actually I wanted to know regarding the MEIS. You mentioned that 28 crores are accrued and due, so have we accounted for that 28 crores in the current year's income?

No. Right from the beginning -- because [ this is a state given ] after realization has come, and then we get [ a strip accent ] from the DGFT. And currently [ we see that ]. Right from the beginning, we have taken a policy wherein we are accounting this on a cash basis. Only upon realization, we are accounting this. We are not really accounting them on accrual basis.

So in that...

Okay. So -- and that 28 crores, maybe accounted for India current year. That is '21, '22, whenever it is received.

No, no. Exports have gone in current year and last year. I mean last year and the last year before, but the MEIS has not been accounted on an accrual basis. And so we -- so right from the beginning, we have been accounting only upon -- on cash basis only upon realization of the [ state ].

So whenever it is received...

[indiscernible] it will be accounted during the current financial year.

Okay, okay. [ And you have ]...

It will be -- we are expecting that we will realize. And then other terminal benefit -- if the scheme is getting [ everyone in ], as a terminal basis, we will account [ for this year ].

Okay. And this new RoDTEP scheme may not be applicable to the company, you mentioned recently.

No. It's all the modalities are yet to be announced by the ministry of commerce. We are awaiting for the guidelines about the new scheme and its applicability and benefits that we derive out of it.

Right, sir. So it is not yet final also, okay. And sir, Europe was -- particularly Italy, Germany or France, all these were facing lockdowns, so restaurants, et cetera were closed for a long time. So with this reopening, do we see any better growth for Europe for us?

So we have -- in fact, last year also we did not face a major lockdown in our European exports, but definitely with life coming to normalcy, there would be an improvement in the growth.

Okay. And how much is the European contribution to our total sales?

Normally it will range between 22% to 25% in our total exports, yes.

The next question is from the line of Binoy Jariwala from Sunidhi Securities.

This is -- the question is on the branded business in India. So I just wanted to understand. What is the size of the market? What is our market share and our distribution reach?

So the total instant coffee market is around 2,000 crores. And as I told you a little while ago, our branded business was almost 100 crores, so we are close to a 5% market share. There are pockets where we are doing better than the overall averaged, wherein we have more than 5%. And every geography, we are witnessing a -- good growths in market share every quarter. So that's on the market size and market share for us.

Okay. And how about the distribution reach? And what will be the rate for distribution?

Yes. So we currently are directly reaching around 1 lakh outlets, 95,000 to be very precise. Of course, our distribution expansion did take a hit because, first 6 months, we could not do any distribution expansion. It's only in the second -- the third quarter and the fourth quarter we started. And considering the kind of situation, it was difficult to do distribution expansion because -- difficult to find the right set of distributors in this scenario. So that's the reach, direct reach that we are having right now. We are looking to substantially upscale this and probably end the next year at around 1.5 lakhs outlet at least.

Understood. So you say direct is about 95,000 outlets, but what would be the total reach?

Total reach. See, we don't get that detailed listing. And right now we are a very new brand. So generally -- the indirect reach for new brands and brands which have just started generally is not substantial. It's only at a later stage, when the brand gets started to do -- started to get that pull from wholesale market that your indirect reach will go up, but if I -- if you were to ask you to put a finger on a number, it won't be more than 10,000 to 15,000 currently.

Understood, understood. And how does -- sorry.

[indiscernible] -- yes, please go ahead.

No, no. Sorry. Please go ahead.

No, I was saying that generally one would look at a 1:2 kind of a ratio for an indirect reach, especially for very small packs like sachets, but as I'm telling you, as we go along, as we [ pick ] along, the indirect reach will start going up as well.

Got it, got it. So our reach of roughly about 1 lakh outlet... [Audio Gap]

Yes.

[Operator Instructions]

Sorry. I didn't -- I -- your voice was cut in-between, so I couldn't hear you. Can you repeat that?

Yes. I'm saying our range of about 95,000 outlets. How does that map against the 2 large players? Where would their reach be and...

Their reach will be -- direct reach will be anywhere between 5 to 7 lakh outlets, direct reach. And their indirect reach will be beyond 10 lakh outlets, 10 lakh to 12 lakh outlets maybe, yes.

The next question is from the line of Jignesh Kamani from GMO & Co.

Government recently announced a PLI scheme for [ the food ]. Sir, is there anything for the coffee sector and for the [ PLI ] scheme? And are you excluding anything on PLI scheme?

Well, PLI is not applicable to us. We are not falling into the scheme. And we may, based on the announcements that have been made, so far, we may likely to -- fall under the remission on duties and taxes scheme, but the scheme is yet to be finalized.

Okay. And on the Duggirala plant, we recently done upgradations. So anything -- any beneficial in terms of production volume growth or the reducing the manufacturing costs?

No. It will improve the -- of course, it will lighten the margin, anyway. It will improve the productivity, in fact, yield parameter and other things. It will not directly -- it's not a valued [indiscernible] quantity expansion. There won't be any additional quantity that will come, but there will be a cost reduction and perhaps a little more yield...

It is in range and products also.

It's basically, yes, optimization.

[indiscernible] products...

Next question is from the line of Manish Mahawar from Antique Stock Broking.

Sir, just my -- most of the questions have been answered. Just 2 questions actually. One, in terms of FY '22, you have given a guidance, volume guidance, of 10% to 15%. So basically your margins will be better off in FY '22 versus FY '21. Because what I believe, FY '20, when you restate it, was -- gone up because of the U.S. customer as well as Vietnam. And your freeze dried was lower because of reversion in demand. So it should improve in FY '22, right, sir?

Yes. Certainly, since we are able to improve -- last year, freeze-drying capacity was lower, so if we are able to improve that freeze-drying capacity, margin profile will also go up. And also, this year, we are adding small packs capacity. And if we are doing any incremental thing on that, it will also go up. So this is a continuous process of improving the margin along with the volumes. So we address this on both counts. One is increasing the volumes; second, margins -- improvement in margins as well, which will contribute by way of traditional freeze dried in the product mix and also the small pack [ capacity ].

Okay. And second question, in terms of the CapEx plan, you -- basically you said whatever [ spending ] plans we have [ which will be like ] excluding the next year, FY '22 -- what will be the cash outlay in the next year, FY '22?

[indiscernible] balance and [indiscernible].

No. It is likely to -- there is a balance to CapEx. It is likely to be around 50 crores to 60 crores.

50 crores to 60 crores; and capital WIP which is standing [ for around ] 148 crores, right, which [ will be the current ].

Right.

Okay, understood. And last question, sir, if I may. What is, -- if -- can we -- possible to share, the volume growth for this year and the 4Q? I'm not asking for absolute number but growth, volume growth.

Considering that the green coffee was more or less flat to -- it's around 10% was the volume growth.

For the overall for the year.

[ Yes, for the whole year ].

10% you said [indiscernible], okay. And for 4Q, any like [ things ] to share?

Pardon. For...

4Q, for the fourth quarter.

I wouldn't try to give the exact specific details. It will be, again, counterproductive for us.

The next question is from the line of Rahul Maheshwary from Ambit Asset Management.

I hope I am audible. Am I audible?

Yes, you are.

Yes. Sir, just 2 questions. First, on the, as you mentioned, that the inventory is high and there is a strong demand which has been booked for the next year also. Sir, can you highlight that, how many during the year? Not by naming it but in case any client which has got -- been canceled or is just a deferment that has taken place. And anything which you want to share or highlight or color on any number of clients which have been added or which are in the pipeline which can be added going forward in next 2 to 3 years? Because, once, you have mentioned that it takes an entire -- it's a long process to get a client onboarded because it's a long-end relationship which is -- so it will be very helpful to know as -- a qualitative statement on this part.

[ Srishant, sir ].

Yes. So during the last 1 year, most of our customers, what we have seen is they're not looking at making any drastic changes. Nobody wants to take too much of a risk during these COVID times. They want to work with people whom they know or already have an existing track record with, so we are not seeing too many changes from customers' side. And fortunately, in light of the fact that everyone has had 1 full year of experience with COVID, they are able to project a little better and give us the volumes as well. So we don't have any cancellations till now. There's no postponements that everyone has asked for. So hopefully, things will improve going forward.

Sir, just to ask a follow-up on this. As you mentioned, that there is a transition taking place from bulk to more small packs and value added. Can you give some kind of cross-sell that -- the existing client which is there on so many years, any rough wins? How much is base products? And how much is value-added products? So that it helps us to know the -- how the margin accretion journey is taking place for this year.

Sarma [indiscernible]?

In fact, [indiscernible] last year was the first year in which we have initiated the small pack capacity in a larger scale. Most of the small packs, currently we have marketed. Our new customers -- and this is customers who have been acquired for the past 4 to 5 years. Recently we have received inquiries from our existing customers like [ Stars ] and others, who are the long-term customers with us. [ Everything interest only ] is small packs as well. So the small packs actual customer base will only get evolved on a clear basis by next year, wherein we are expecting that we would be able to optimally utilize, [ I think ]. So currently we can say that we will be making an effort from -- going from around 6,000 tonnes of small packs capacity to 10,000 tonnes of small pack capacity in 1, 2 years to come.

Sir, just in -- while supplying to the small cap -- packs to the existing clients, the realization gains would be approximately at least more than 5%. Or it's...

Generally the normal -- I mean the -- it again is a complex thing because the [ SKs ] range from 0.8 gram to 1kg, 2kg purchase, all where it is a packing and all that, yes. Generally on a ballpark figure you can take approximately $1.5 to $2 as the value addition.

Okay, okay. Sir, just last, may I ask, sir, if you don't mind, so please, a question...

Go ahead.

Sir, as there will be addition into the Vietnam capacity which you are -- which will be soon getting commissioned in the July end, sir, structurally in next 5 years can we say that, in every 2 years, there can be of a capacity expansion that will be taking place irrespective of Vietnam and India? And apart from these 2 countries, any other country where -- Africa or something, which is there in limit? So just to get a sense that in periodic times what is the ballpark number which you think that from 35,000-tonne capacity you have a region to expand to 55,000, 60,000 capacity in a long period time. Any rough statement would be very helpful, sir, not...

[ In fact ], following days -- I've been telling for the past 1 year, 1.5 years also by around -- so now we are in '21. Around '24, we plan to reach about 50,000 tonnes sale capacity. Our production capacity will be slightly higher to that. Say 55,000 or 60,000. And we will still reach to have anywhere between INR 130 and INR 135 on the EBITDA margin. That is a goal on which we are working. How do we do it, whether in Vietnam or in India? Currently we have an infrastructure both in Vietnam and in India. If our spray-dried requirement will go up, it will be in Vietnam. If our freeze-dried requirement goes up, it will be in India. So we will be looking perhaps at the other locations after completing the expansion in these 2 places. Yes, there are several plans on Board which are being discussed, but on this business this is the broad picture for the next 2, 3 years.

The next question is from the line of Rupin Shah from InCred Asset Management.

Yes, I have a question for Praveen. For longer-term prospect to 2 to 3 years for India business, what kind of top line we are aiming. And any guidance on EBITDA margin like one can expect for 2 to 3 years to prospect to, say, FY '24 or FY '25?

We have become a little fluid as of now because a lot of things hangs in balance how things would pan out. Like, for example, we did well this year and we achieved top line of 150 crores. If things would have been normal, we would have expected current year definitely to touch 200 crores, but having seen the first -- or second wave of pandemic, things are a little dicey as of now. Going as far as long term, last time, I said that probably, last year -- so I said in a few years we are looking at a 250 crores top line turnover, which looks good. We are pretty much on course for that. And this year, we should be breaking even in terms of EBITDA. We had to break even last year itself, but we did -- had a little bit of adverse impact because of higher Indian coffee prices, but going forward -- yes. So this year, we should look to break even. [ I can match ] a number for EBITDA for next 3 years, but definitely in 2 years time we are looking to cross that milestone of the 250 crores top line.

The next question is from the line of Vivek Tulshyan from New Mark Capital.

Yes. And I think this question has been asked multiple times, but what I am trying to do is I'm trying to subscribe these stand-alone numbers from the consol numbers to get to the subsidiary performance. And in that, I think what we are seeing is the gross profit margin has come down and the overall EBITDA margin has also come down. And the growth is also much weaker than what it was in the first 9 months. So just wanted to understand what could be the reason behind this.

[ Do you want to try, Narayana ]

Yes. You can say that, because of the -- a low volume of the EBIT sales, there is a slight reduction in the stand-alone performance.

No, I'm talking about the subsidiary performance. So if you subscribe the stand-alone performance from the consol, you get to the subsidiary numbers. And in that, we have seen that, first 9 months, the business was growing well, which was the reason -- because our Vietnam facility was doing very well. And then suddenly, in this quarter, we see that the growth is not very strong. And the margins have also eroded substantially [Audio Gap]

Shall we take the next question?

[indiscernible], if you want to say something...

[indiscernible] actually a bit. Last [indiscernible] -- no, basically what happens is, in the first 9 months, because of the high volume of sales and orders from subsidiary companies, especially from Vietnam, we could notice a more -- a high volume of the value and volume of the sale. In the fourth quarter, we could witness a good amount of sales from Indian operations. Because of that, you could witness that there is less sales from the subsidiary side and more sales from the stand-alone side.

Understood. And our other expenses have also almost doubled in the subsidiary. Is that because of the India business where -- our India business has grown well, so does that increase our other expenses? And does that also impact the EBITDA margin?

Yes. Basically you've all witnessed that because of the high costs of the transportation, sea freight and all. We all witnessed that in the export market. The sea freight charges have gone up substantially. And also the second factor is due to the packing material. These are all the 2 components which we increased in the fourth quarter, expenditure.

[indiscernible].

Understood. And the packing material costs would be relevant for the Vietnam market. Or also that is because of the India B2C business packing [indiscernible].

Yes, it is on the B2C business in India, not from the Vietnam.

The next question is from the line of Lokesh Manik from Vallum Capital.

Yes. My question is for Srishant. If you can just -- you've given a brief update on cold brew coffee in U.S. If you can just elaborate a little more in detail in terms of this was also supposed to be a product where we could introduce in cafes. So any progress on that front?

Actually, yes. We've had some good progress for cafes also, especially cafes which are serving nitro cold brew. So of them, this product has been a huge favor. Earlier, the process they used to follow was to make the cold brew physically, and this used to take 16 hours and the shelf life [ also was very less ]. So with this version, they're able to give even the nitro cold brew at a much more economical cost to its -- to their customers. Unfortunately, because most of the cafes across the world are still under lockdown, there hasn't been that much [ of a point ]. So this is something that you consume in a cafe, not something that you would want to take as a takeaway. That's one reason why it still hasn't -- we still didn't get the volumes that we were expecting, but once things open up, we are hoping those volumes will start coming in. In the U.S., we've actually gotten -- or people have seen the product, who've -- who's tried the product. A couple of guys have actually approached us, asking us for exclusivity, saying that they'll give us at least 1,000 tonnes sale and all that, but we haven't accepted any of these offers because it means that we will be tied in with them and our margins will be limited [ such promptly ]. So we start. It doesn't matter. Let us grow slowly, but we will grow steadily. We have the ability to approach all these things [ in the -- to us ] with this product because it's a very neutral product. And because we're the only ones [ who have it ], we can easily [ scale that convenience ] and take things forward.

So you will be approaching the big chains as well...

Yes. We're actually already supplying to the big chains through some resellers or customers, people whom -- like our customers in the U.S., they are confectionery companies, liquid coffee companies that buy the powder from us. And they supply some McDonald's, Wendy's. You name it. All the major chains, they buy from these guys. So they keep -- we keep developing new blends and products for these chains all the time. So this is one project that we are undertaking as well to institute over there. Earlier, they were buying mainly in liquid format. Now we are trying to convince them to buy in solid format as well.

Okay. And any time line in mind where you would see this really scale up or pick up that -- from the response that you are seeing or you are seeing this new product acceptance?

As new product, the volume increase will -- this is gradually. This is not going to happen overnight. Because it's a new product, everyone wants to see what the other guy is doing. [indiscernible] that they also want to incorporate at their end, so this whole process will take time. Like once we've started in the U.S., we've got inquiries from U.K., Taiwan, Korea, Japan and China saying that they wanted to -- they want the exact same product, in fact. So [ I've said ] we even tried to market. We didn't even think that these other markets actually would accept the cold brew, but a lot of these countries, they try to ape what the U.S. is doing, so they've started floating inquiries for us and now we've started sending samples across all of them as well. So the real volumes, we'll start seeing only when the institutional segment really opens up and starts supporting us start operating normally.

The next question is from the line of Anuj Jain from ValueQuest Capital.

I have like a couple of small bookkeeping queries. Are we capitalizing any of the interest expense?

This year, whatever -- some of the equipment, we have put to use, wherein almost around [ 1.75 crores ] of the interest we can now capitalize this year.

Okay, okay, understood. And what is our cost of borrowing in India and in Vietnam? Am I audible?

Yes, you are, sir.

Yes...

[indiscernible]?

Can you just repeat the question?

Sure, sure. I was asking, what is the cost of borrowing in India and Vietnam for us?

Sorry. The line got disconnected. Now I connect it now.

Sure, sure. Am I audible now?

Now, yes. You're audible. And it was the same. The cost of funds in Vietnam, [ it is 1% to 2% ]. And in India, it's 1.5% working capital cost of funds.

The next question is from the line of [ Shah Wud ], an individual investor. As there's no response, we'll take the next question from the line of [ Ronit Nalfal ], an individual investor.

Just a couple of questions. [ Channel sales ] seem to indicate that you reduced a lot of your discounts, promotions, at least on the online platform. Would that have contributed to the lower losses in the domestic business? And do you see sales sustaining given that we have reached mid-May?

Yes. In fact, in most of our calls we have mentioned that, while we started with higher discounts to attract consumers and increase our size and we go along when the brand building happens, we will slowly start reducing the offers and discounts. And we haven't seen any sales drop, which primarily speaks for 2 things. One is the activity towards the brand is good with the consumer, and they have liked the product. So going forward also, we'll look forward to keep reducing the discounts and offers. And we don't see any there should be any impact on sales.

So given, as a consumer, I am complaining, but as an investor, I'm very happy.

[ Okay, okay ]...

How has the performance been in Switzerland vis-à-vis last year? And is the business expected to be, in the coming year, business as usual? Or are we looking at something substantial on the turnover side?

Switzerland. I think business -- they are able to get trading business returning to a substantial extent. This -- because we are having a customs bonded warehouse, it has become easy on the logistics and on the taxes, most of all, yes. So we can expect a little more betterment in the -- going ahead on a continuous basis, a betterment in the Switzerland business.

The next question is from the line of [ Jai Mora ], an individual investor.

Yes. Just a couple of questions. So I mean like when can we actually attain a good scale on the Indian branded business? And once we achieve that, is the margin profile will be -- I mean, same like as it is right now, like 25% to 30% or something like that?

Praveen?

Yes, we can hear you.

Yes. Am I audible?

Yes, yes. Praveen?

Yes, we can hear you...

Okay. So my question was that when can we achieve that scale in our branded business for the Indian market. And once we -- if we happen to achieve the scale, like what will be the margin profile that would look like? Will it be similar to our current margin profile?

Is Praveen on the call?

[indiscernible]...

Praveen, are you on the call?

[Operator Instructions]

Sorry, sorry. My mistake. Can you hear me now?

Yes.

Yes, yes, yes.

Yes. Sorry. So what I was saying is that, considering the fact that we have achieved 150 crores last year, out of which 100 crores was branded business, in 3 years time it's been a reasonable scale to achieve. I think very few brands achieve this kind of scale in such short period. So as I was telling in the earlier -- in one of the earlier questions as well, that in a couple of years, we are looking to get to around 250 crores or so. And we'll keep growing [indiscernible]. And there's no letting down our guard no matter what turnover we achieve. And as far as margin goes, definitely as the proportion of branded business keeps growing and the strength of the brand grows, we are able to offer lesser and lesser discounts in the markets. That will definitely improve our margins from, say, 25%, to go to 35% in couple of years. That's our target. And then we'll see how to take it forward, what kind of premium and what kind of pricing we can command in the market.

Right, right. And you also mentioned about the distribution network. It is currently 95,000, and you wish to scale it up to 1.5 lakh.

Right.

But when can we achieve -- I mean, is there any internal targets to achieve that 5 lakh or 7 lakh kind of mark which you alluded that many of the big or the major players do have? So any color on that?

[ These are ] we will be -- in this short period, we will not be in a position to achieve what a brand like some Unilever or a Nestlé would do because their field force is large. Their brand equity is huge. So all that [ trends ] in terms of how you're -- and what is your reach, considering that coffee is thankfully largely an urban phenomena -- and as I was telling you, most of our reach of 95,000 is direct. Now as a brand, we look forward to have a lot of indirect reach. So once sort of the brand equity starts building, we'll look forward towards the wholesale market to help us achieve a threshold volume of -- or let's say number of outlets of maybe 2 lakhs and 2 lakhs 50,000. Once we achieve 2 lakhs, 2 lakhs 50,000, our weighted distribution will go up to 70%. I think that should be a good internal benchmark for us. So what I'm looking at is weighted distribution rather than leverage distribution because, if we are there in the right outlets, I think we'll be pretty much in good space.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Abhishek Navalgund for closing comments.

Yes. Sir, just one last question from my side. If you could just tell us the e-commerce sales number for FY '21 from our B2C business.

So e-commerce at an overall level: From the retail side, the branded side, we were approximately 5% to 7%, yes, the -- of the coffee sales, which means it will be closer to 5 crores to 7 crores, but our exit numbers are very good. We are exiting at almost 8% to 10% of our retail sales are now coming from e-commerce. So there has been a substantial jump in the volumes from e-commerce B2C sales.

Sure, sure. So that's it from my side. So basically I would like to thank the management for addressing all the questions. And also thanks to the -- all the participants for joining. And now I request Srishant, sir, for his closing comments. And maybe we can close the call afterwards. Thank you. And over to you, sir.

Yes. Thank you all for joining us on this conference call. And I hope all of you and your families are keeping safe during these difficult times. And looking forward to reconnecting again during the next quarter conference call. Thank you.

Thank you very much. Ladies and gentlemen, on behalf of Nirmal Bang Equities, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.