Chaman Lal Setia Exports Ltd. (530307) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Chaman Lal Setia Exports Ltd. Q1 FY '21 Earnings Conference Call, hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Shirish Pardeshi from Centrum Broking. Thank you, and over to you, sir.

Yes. Good evening, my friends. And on behalf of Centrum Broking Limited, I invite you all for this excellent performance by Chaman Lal Setia Group. We -- I'm happy to announce that we have present Mr. Rajeev Setia. He's Director and CFO in the company. And he's joined by Mr. Sankesh Setia, who's Director. So to start with, I will hand over to Mr. Setia to give the opening remarks. And after that, we will run the Q&A. So over to you, Rajeev ji.

Yes. Good evening, everybody, all my members and friends. This year, which ended at the pandemic period, happened to be very good for the company for overall performance of revenue around INR 800 crore, profitability before taxes INR 76.83 crore and net profit, INR 52.47 crore. The next quarter -- first quarter of the current year has been, again, excellent particularly through this tough time, which we all know, INR 243 crore turnover sales. And EBITDA is 34 crore 78 lakhs, and net profit is INR 25 crores. These are the figures. And I believe it's considerable improvement if we compare with the -- this corresponding quarter and corresponding year, too. I will a little bit explain more. This quarter, in particular, was really a tough time for all of us. And luckily, like -- I would say, luckily, the banks around the world were open, even in India. And so the inward remittances and the banking with limited stock continued. And the second part was shipments. It was held for 12 to 15 days, the beginning of the lockdown. Thereafter, being the essential commodity, everything was resumed. Transportation was resumed. Shipments were happening. And the best part is though the bill of lading, which is negotiable instrument, and we have to send documents to the foreign buyers directly or through bank, either as open delivery or through bank, couriers were closed. It was a big problem certainly for banks and as well as us. But the shipping lines came to our rescue. They -- even the -- it was difficult to receive BLs from them because summer issues in port area of Mundra or in Bombay. And how could they be sent to our offices in the North? So on the basis of copies, stamping cancellation, crossing or putting the accomplishment of the document, they released the cargo at destination. And the buyers were -- because of the company's goodwill, they were trusting us, remitting us a payment. And we were finishing the delivery job here in India, and they were getting their cargo. Despite the tough period, company has been able to work in this quarter of tough time of pandemic and achieved good sales and excellent profitability here. So I think this is how we could -- because it's -- some of you must be wondering how the company worked so good in such a tough time. So these are the 2 reasons. Had the bank been closed, had the shipping lines not been delivering, it would have collapsed the quarter and collapsed for the company. So by this beginning note, I welcome anyone who has any question or query in their mind, they are welcome.

[Operator Instructions] Our first question is from the line of Shirish Pardeshi from Centrum Broking.

Yes. Rajeev ji, I'll just try and fill in. There is some queue up, which is happening for question and answer. Could you give some color -- because the competition, we heard saying that there was a jam at the logistics issues at the port and the export was delayed drastically. While during the lockdown also, there was not much transportation available in -- within India, and that has also delayed some shipments. So would you say how it is now panning? Maybe give some color how June and July look like?

Your question is valid and absolutely true. The initial first day of the lockdown, it was too quickly closed. We were locked down in our homes. Our workers were locked down in their homes. Moving out of the house was not permitted, particularly in our factory area, Haryana. But keeping in mind a need to maintain the delivery of essentials, after 14 or 15 days, the ban for essential was lifted. So the moment we opened the factory after 14, 15 days, and of course, with all arrangements for COVID sanitization, we made a tunnel for sanitization for every entry and exit from the factory. Social distancing was maintained and everybody was supposed to be in mask. And above all, you must have seen a lot of laborers moving back to their villages, walking all the way, 1000 kilometer, 500 kilometer, like that. And in our case, we were giving food, shelter and medicines as when -- for normal diseases, I mean any kind of -- we cared for our labor. They stick to us. Nobody moved out of the factory and -- or wherever they were residing, close premises. So when it opened, we could start. And the transportation was also started simultaneously. And yes, containers we were getting. That's why we could export in this quarter. In April, we did a reasonable good business. Yes.

Yes. Okay, sir. [ Enba, ] you can take the question.

We'll take our next question from the line of Rajeev Agrawal from DoorDarshi Advisers.

I have a few questions. The first one is on your gross margin number. If I look at the gross margin, it used to be around the 22% in the last few years. And this year, as in financial '20, we saw it jump to 25%. So the question is, is this something that is sustainable? And also, what is driving this higher gross margin going for us?

Can you little repeat the question? End part I could not hear. There was some sound in my office, yes.

Sure. So I was saying the gross margin has gone up. And so what I wanted to understand is what is driving this higher gross margin. And are these gross margins sustainable? Or can they continue to go up?

Can be sustained or can go up in the future?

Yes.

Look, it's a commodity business, first thing first. So commodity are volatile by nature. You know what happened in this particular year, whenever the prices at the point of our procurement are lower, and because we are spreading to around now 90 countries around the world and more -- about 400 buyers around the world. So smaller buyers. The effect, all our sales did not come through, but our purchase were at considerable low price. Either we sell at a high price or we buy at a lower price, and this is how the profit comes. So because in the last conferences, I talked about Iran a lot and I stressed that I took a decision to far sell my rice, even at breakeven, my quarter was not good in those days. And that fallout, which I visualized Iran is going to be on the dead end of the business, and that has -- that is reality of the day now. So when Iran is not there, the prices are coming down, I have -- I am buying at a very attractive prices and I have market around the world. My brand is moving all around. Private label is moving. Everything is happening. The profits have had to come. Now the question arises, this is how the profits came, higher profits. Now the question is of sustainability. First part of the sustainability is the spread risk all around the world. The first part is of sustainability. The buyer is hard to get, but once they come to you, you give them good service, good quality, good supply. And above all, in this particular period of the COVID, they were not scared to remit me total payment advance. That is the biggest honor or goodwill or respect my company got, and I had been delivering them. These things, which are hardened of the life, will continue with us. Now market forces are not in my hand. The prices can go up. My profitability can a little bit come down. My profitability can go up, if I am stronger and stronger with my buyer to fetch better prices, if my procurements are at higher rates. And if the procurements are favorable, because it's a wholesale market, immediately comes down. And the pass-on of the benefit is not too essential for me. So my buyers are happy at a price, I'm making money. Hopefully, you got the answer?

Yes. No, that was very comprehensive. My next question is, I mean, this is some sort of a pattern I have seen, and I want to see how you think about it. But whenever the paddy prices goes down, I have noticed that the company does tend to do much better in terms of profitability. When the paddy price goes up, our profitability comes down. So it seems like we are not able to increase our prices when the paddy prices goes up. But we don't have to decrease it when the paddy prices goes down. Is that a fair observation?

Yes. But there is one fact, which I'll re-explain here. When the prices go down -- for example, I have 2, 3 buyers around the world, big, big buyers. Even there are buyers in this world, those who can buy the entire production of mine in one stroke. There are such a big buyer. If I sell to 5, 6, 7 selected buyer, good buyer, good paymaster around the world, they will not let me earn anything. They have information of everyday pricing internationally. So I cannot make money from these people. The funda of the company, the model of the company is smaller consignments, multiple buyers, multiple countries. And if the prices come down, I am a wholesaler buyer. I can immediately buy at the lower price. And I don't need to reduce the prices. And sometimes the prices go up, I am unable to increase immediately, but gradually, I start increasing my prices. Also, buyers understand and they pay. Sometimes I have to accommodate them. Sometimes, they have. But the rapid fall and up is here. And when it falls, it helps me. And for your information, yesterday, I was reading the Punjab has highest area of cultivation in this year. And there is 4% increase in the area of cultivation in this year. And this is around 6.7 lakh hectares. 7 lakh hectare is the maximum, which we always perceive can go under production. But the highest so far had gone 6.50 lakh, and it is 5% to 7% increase. So this year, area under production will be higher. Iran, as usual, is the dead country, we'll get at very good prices. Haryana report, I don't have, it's not published, but Punjab report has come.

Sir, and so you are implying that, therefore, the paddy prices should go down because the area...

Yes. Should remain very attractive for manufacturer. And secondly, there is another one country, one market, which law has been promulgated by President of India, notification has come. They have removed market fees. We can directly buy from farmers, 4% will no longer be charged. This is the law. Let's see what practically happens on the ground because states are reluctant. They will have to fall in line. They cannot disregard central government ordinance. Haryana, we are in Haryana. Haryana will follow. It's the same government. Punjab, we'll see what happens.

Got it. Now do you have any insight, especially in Punjab, where you mentioned that there is a higher cultivation area? I think one of your competitors mentioned that their survey is saying that maybe it will be not the 1121 variety but the 1509, I believe, is the variety, which is being sold more. And so maybe one variety prices will fall, but others will rise. Do you have any view on that?

I don't agree truly. Admittedly, 1509 crop has increased, and it is -- it may be -- it's not double. But because data are not as yet available, but it's a considerable rise in the production of 1509. And 1121, of course, is the prime good quality. But when -- it depends again. The 1121 can go up also. But when the equivalent quality, parallel quality is too low, then it's difficult to raise the price of upper quality also. Now we will have to be exactly seeing how much 1121 comes, how much it is in Haryana, how much it is in UP, MP and other states. It will have to be seen.

Now one additional...

It may sustain its price defense. It cannot go up. I mean when the substitute basmati variety is selling at a very low price, possibility is not there.

Got it. Yes. One additional question is on the inventory, right? So when I look at your financial year 2020 inventory, again, and if I look at the trend over the last multiple years, we earlier used to have very low inventory. And over time, the inventory has jumped from financial '17 to '20, almost 2x, right? So is there a change in the business model in terms of whether are you storing more inventory or are you just keeping inventory, which is to be sold over the next few quarters? Can you talk about the inventory management now?

Actually, we procure according to our orders, according to demand. If I calculate today, we have orders of 25,069 tonnes, 357 contracts and value is about INR 193 crore, so I'll have to procure. I have to reasonably good rice. But again, it depends on gradually buying. Some of the contracts are a little open-ended. They might be lifted in 100 days, 120 days, new are coming. So it's a revolving process. So I've to maintain stock also.

There is no change? In the past, you have not kept inventory for very long, and that continues to be the case, right?

Yes. Yes. Companies have [ friends ] also, company have finance also. It's better to put money on the -- our own product. Where to put money then? We don't want to diversify here and there, [ that we have our sector. ]

[Operator Instructions] Our next question is from the line of [ Ankur Shah ], an individual investor.

Sir, I very appreciate with the result of our company in this pandemic time and a hearty congratulation to the management team, who is doing the good job. Sir, my question is, what is the book order value for this coming quarter?

Book order value, I just told Mr. Agrawal also. And -- but I would like you to talk to Sankesh Setia because he is handling exports. He's next generation, and he will explain the best way possible to you. Yes, please. Over to you, Sankesh.

And the second is -- sir, just wanted to know the book order value for this coming quarter.

The total order value?

Yes.

It's about INR 193 crores at the moment.

At the moment. And sir, all of our plants are working with 100% capacity right now?

Sorry?

All our plants are working on 100% capacity?

Yes. All our plants are working on 100% capacity? We are working for almost 18 hours a day.

We take our next question from the line of [ Ayush Jalan ], an individual investor.

Congratulations on a great set of numbers. I just want to know, do you have any plans to expand your footprint in the domestic market? Or are you mainly looking at the export market only?

See, no doubt that we do focus on exports more. And you can say out of the total sales, 91% is exports and almost 9% is the domestic market. 9% to 10% is domestic. And domestic has a good -- it has a very good future as I see it. So yes, we do have plans to exceed on the domestic market but not in a very short period. Maybe it's about 4 or 5 years long process. It won't be very immediate. You won't see anything in next year. But surely, next 3 years, you will see, yes, we have increased our domestic sales by at least double of it. So that would be about 20% of the total revenue within the next 3 years.

Okay. But do you find the margin profile being different on the domestic than the export sector? Or it's more or less the same?

See, if you look at the company's model, we are into our own brand, and we also do private label for other people. So anybody sitting in any part of the world wants to have their private label, it can be done by us. And then on the other side, we also sell our own brand in the same market. So if I talk about the domestic market, it is completely 100%. It takes a little bit of time. And we have to do it very gradually because there's a lot of competition in the market, and we have to do it very gradually, right? In the beginning, we won't be able to make good profits out of it. But later on, yes, the margins are good. Of course, see, if I sell my brand, automatically, the margin has to be better. But in the beginning, there might be something that's going out of your pocket because you're launching a brand. And that, too, a commodity because we are not selling a product. If you look at any rice brand in India, what they are doing is they are just simply having a commodity in a beautiful packaging. That's it. End of the day, a commodity will remain a commodity. It won't become a product. Like for example, if I talk about Maggi, Maggi is a product. It can't be achieved by me or ITC tried it so many times. Other companies tried it to make the same taste, and they did so much on -- they invested a lot of R&D, but [Audio Gap] end of the day.

Understood. If I could just squeeze in one more question. During the COVID time, have you all been able to get new clients from new geographies? Or is the customer base more or less the same?

In terms of the COVID times?

Yes. Have you got new inquiries from new geographies? Have you made new clients during this time? Or is it more or less the same?

We did have a few queries, a few new queries. So what happens, there's a team of people. So we have data for complete around the world. I have a data that what's happening in what country. If you ask me today, let's say, example, U.K., so I know who are the top 20 importers of U.K. I know each and everything about the top 50 importers. So I have a set of team who's targeting them frequently every week or 15 days. So there are always some queries coming in. So in terms of -- at the time of COVID also, we did -- we were able to achieve about 9 or 10 new customers around the world. And in terms of sales, the more of sales were on my B2C buyers instead of B2B buyers. For example, there's a customer in New York. His sales are in supermarkets. He's not into the catering business. So his sales were very high compared to the person who sells into B2B, a wholesaler in New York. He wasn't giving me too many orders. So there was too much pressure from the B2C companies who do B2C business. And B2B, the sales have fallen. But it didn't affect us at all because that -- the B2C customers covered that completely.

Okay. So the 9 or 10 new clients also, you all reached out to them for business. They did not approach you directly?

So we are always in talking terms with a lot of companies. So a conversion can happen today. A conversion can happen tomorrow. So we are already in touch with so many companies that they know us, we know them. And when -- there can be a time they can place us an order.

Our next question is from the line of Deepak Lalwani from Unifi Capital.

Sir, what is the sales volume this quarter?

Sales margin?

Sales volume.

Sales volume. So what I have in hand in future?

What you executed in Q1?

What I executed in Q1. So the total sales -- Mr. Rajeev will answer you.

Repeat your question, please.

Sir, in the current quarter, what was the sales volume?

Sales volume, quantitative and amount, both I'll tell you. The quantitative volume in this quarter was 3,28,952 quintals. And from the corresponding period of '19, '20, it is up. That was 2,34,253. So increase is about 30% increase in volume, quantitative.

Which geography contributed to this increase, sir, in volumes?

Geography, we are in a multiple...

Sir, we're just trying to understand how you were able to ramp up so successfully between domestic and exports. So if you could just help us understand that.

Mainly in this quarter is exports. Mainly in this quarter. Let me see, 1 second, 1 second. Yes, in this quarter, it is around 95% is exports. I have just taken the percentage. And the volume, basically, we are into all continent of the world. And it's Far East, it is Africa, it is Europe, U.S.A., Canada, Australia, Russia, Central Asia, all Gulf, all areas.

Okay. Sir, what's the average cost of your inventory that you're holding in your books right now? What's your average cost?

Average cost is approximately -- no, no, no. I have correct figure, just a minute. Give me the paper, 1 second, 1 second. The average cost of paddy is -- with me is 2-3-7-1, INR 2,371 a quintal for paddy, whatever I have in stock. And my rice has average price of INR 5,300. And sorry, it's average of annual. And this quarter is INR 5,236, price.

Okay. So rice is INR 5,236...

Yes, yes, the quarter -- first quarter.

No, sir, I was actually asking, what is the volume of paddy and volume of rice you're holding in inventory?

Quantity?

Yes, quantity.

Yes. Yes, 1 second. First quarter quantity. Value-wise, I do have -- 1 second.

Or if you have the value, if you can share the value in the...

Yes. I can share with you later. Maybe I have missed one paper of stocks.

So -- but it looks like, sir, in Q1 of this year, your average realization has come down from about INR 23 to about INR 32. Is that right? Because that was the number [Technical Difficulty]

It looks like there's some disturbance from the management line. Ladies and gentlemen, we request you to please remain connected while we disconnect and call them back. [Operator Instructions] Ladies and gentlemen, thank you for your patience. We have the line for management connected.

Yes. Can you hear me?

Yes, yes, yes. Yes, I can.

Sir, we were just trying to understand that on a Y-o-Y basis, your realization seems to have fallen. So I mean can you just talk through the basis of that? I mean why is it that with what's happening in the marketplace, are you seeing increased dumping in foreign markets by aggressive players or by, say, Pakistani players? What's happening?

Actually, I'm not understanding your question correctly. What I have understood is you said fall in my average price. That's not there. My average price is somewhere around INR 71, INR 72, average.

Sir, but then last year, it was INR 88.

Last year -- yes, yes. Yes, you're absolutely right. It has to be INR 88. I'll give you the, just 1 second, prices. In this year, the main quality is in our export steam, basmati 1121 variety. And this year, the price is INR 60 to INR 63 in wholesale market. If you want to buy 5,000 tonne now, I can buy in INR 60 to INR 63 for my factory. And the prices of the same rice in the wholesale market, loose, unpacked, was INR 72, INR 73 in the last year. Even the paddy price last year was INR 2,600 average. For basmati varieties was average INR 2,600. And this year, it is INR 2,200, without expenses. The INR 4 (sic) [ INR 400 ] in the paddy prices. But paddy, we have seen most often has not true relevancy with the export prices -- I mean rice prices. So the rice was higher-priced last year. And the steam 1121 during the month of April, last year had gone as high as INR 80. Even Sella Iran-bound rice was selling INR 70. So the difference is there. Your question is absolutely right. Difference was there. Last year, it was higher price. This year, it's a lower price. And I explained in the beginning, this lower cost of my procurement is reason for my higher profits. My sales are in different parts of world, smaller consignment, and I'm, by and large, getting the same price.

Okay. I understand, sir. Also, can you give me a ballpark of how much inventory you're holding in tonnes? I mean just a ballpark would do. Because I understand you track this very, very closely. So just a ballpark of how much tonnes of rice in paddy you're holding.

Right now?

[Foreign Language]

[Foreign Language] But we have figures. I did not take the stock figures. I can get it in -- during this Sankesh, [Foreign Language], value of stock quantity. In 5 minutes, I'll give you. Let's skip this question. Skip this information. It's very important, but let's skip. You'll get it. It's just a call away. We'll get it.

Sir, once you get the answer, please do share it. We'll be waiting in the queue.

Yes, yes. Sure, sure. Sure, go ahead.

We'll take our next question from the line of Ayush Mittal from Mittal Analytics.

Sir, I've been a shareholder in the company for last several years, and it's really good to see the good performance by the company after challenging last year. Congratulations on that, sir. So sir, last year, we had faced a lot of margin pressure and this -- in the last 2 quarters, in March and June, we have seen very good margins, in fact, since December. So sir, broadly, can you guide us how this thing has changed? And what can be broad sustainable thing? Because earlier, we also -- we used to do operating margin of 12%, 13%. But in FY '20, in several quarters, they have fallen to 6%, 7%, 8%, which was a big fall. And now we are again doing very good margins of 12%, 13%, 15%. So what have we done? Any changes or something that we have done? Maybe Sankesh can help us guide on this for something as at the company level, which has...

I will explain. I will explain. There are...

How will you make it sustainable going forward?

Yes, sustainability also. As regard export side is concerned, there are -- regularly, we are getting new buyer. We are pruning -- the good buyer, we are selecting. And there is -- I mean loyalty to us is paying. One part is on the sales. And the other part, it's a commodity business. I explained in my introduction also today. Then the prices at the point of our procurement are lower. We are bound to make more profit. It gives us profit. And I also explained to some -- earlier, somebody question. I explained myself. Let's assume I have 4, 5 big buyers, then I cannot make money. Some people have that. My model is multiple buyer, multiple countries...

No, I appreciate that part. We are just...

Yes. So whenever my procurement -- my first profit is my purchase -- I always say the first profit is purchase profit. Second profit is production profit if your quality is good. And the third profit is your expenses controlled, rationality of expenses. And the biggest and most important profit is your sales profit. And sales profit you see is not totally in your hands. It's the buyer also who will negotiate for every single business. Somewhere you have to compromise. Somewhere, you have to reduce the prices to sustain. You have to face the competition. And we have changed the model of our company. I was today counting. We have 394 buyers around the world now. It's a very big thing. So this is how we try to sustain our profit. Though it comes down when the prices go up sharply in Indian market, but at least, we can make reasonably good profit. But yes, these windfall gains come when the prices go down.

So sir, in earlier years, we used to see good volume growth happening while I see last year we [Technical Difficulty]

We request you to please remain connected. Sorry to keep you waiting. Ladies and gentlemen, we have the management line now connected.

Yes, sir. Sir, we were discussing about the margins. And you were telling that when the price is low, the margins will be good. Otherwise, they will be in a range, I believe.

Yes. It depends. It depends how could we sell.

Yes. So sir, one thing which I have noticed in the company in earlier years was that we used to do very good volume growth. And last year, like you gave the numbers, the volume growth was poor. We had degrown, it seems. Again, we have done very good volume growth. So can you share what kind of volume growth do we target and what are we doing? Because price is not in our hands, so volume is what we can look forward to.

One second. Volume...

Quantitative growth going forward.

Yes. Quantitative growth?

Yes.

Quantitative, one second. Your name is Ayush?

Yes. Yes, sir.

Hello?

Yes, sir. Ayush Mittal.

Good, good, good.

Sir, I'm saying that in earlier years, we used to have good volume growth. And then last year, we -- it seems that our volumes had degrown. Now again, in this quarter, you have done very good growth. What are you expecting going forward? And what are we doing to increase the volume?

Increase the volume? It is continued pursuit to increase business. That's all. No other choice. We have to participate in exhibitions. We have to travel a lot. And now everything is stuck up, our -- sustain our existing buyers because this point was discussed between me, Vijay, Ankit, Sankesh, everybody, when this COVID happened, when suddenly this breakdown came. And when this was resumed, resumed business and it was made a strong conviction between us. This is a tough time. It's the grief for the world. If we supplied and lived up to the expectation of buyers, they will never leave us. This is the time to service the people around the world. And that is what we achieved. That was one of our aim. [Foreign Language] If we lost this -- I mean it was opportunity as well. So it's a tough time for our buyers. It's, of course, a tough time for us. But if we live this time, if we performed in this time, we'll keep on performing. This is what we very seriously discussed with each other that somehow keep yourself healthy, keep your mask on, but keep on working. So our staff also...

If we have done so well in this challenging time, should we assume that the company can maintain such good performance in coming times?

Why not? Why not? We people will continue. And one thing more I would like to share with you. In fact, it's the prerogative of Sankesh to speak because it's better if he explains about the brand international marketing. Sankesh, this is Ayush Mittal, brand [Foreign Language]

Sankesh, congratulations on a good performance. What we were trying to understand is that as we have done so well in this challenging time, what is the outlook going forward? And what are we doing to keep our volume growth intact?

So see, the volumes will be good only in future. Of course, we have passed through very tough times. So first, we have to understand that what has happened actually. So when the pandemic happened, when the news came and even India got locked down. So we have to understand how did we sustain, how did we keep our sales at a good pace. Everything went so well. How did it happen? So I did a back-end calculation. So what I saw -- so we have so many customers around the world, almost 394 customers. So out of all these customers, there are a lot of customers who buy from us, and then they are into kitchen catering and B2B business, you can say. For example, I have a very big customer in Bahrain, and he has another sister concern company in Saudi. So I'm giving you one example. So this company is into kitchens and a B2B business. So a lot of weddings. So they're into supplier of caterers. They're into supplier of wholesale market. So what they do is -- they are into B2B business. So their sales, he used to pick up a lot of quantity from me. But unfortunately, he said, "I don't have any business." So he had one contract with me. So he said, "Can you just hold it for the moment and don't ship it right now?" So his sales went down drastically. So he had no business, we had no sale. So automatically, it gave me an effect, a negative point over there, that I lost his sale. So similarly, there were a lot of companies whose order didn't come to me. They said, "Okay. Hold on our orders" or the fresh orders were not there. Now on the other side, looking at the B2C, the people who have their own established brands in the supermarkets and who are into supermarket business. So those companies said, "My order was 10 containers. Make it 20 containers." And they were very bullish at that time that, "Please send us the shipments as fast as possible." I was running on a very low capacity of laborer also at the same time. Not very low, but I had a decent amount of labor. So the cost of labor also went up. But end of the day, I was able to achieve any kind of price, what I offered them. So I had -- of course, we can't go out of the way, but the companies were able to give a decent amount of margins, a decent amount of profit at this time. So somewhere, the sales went down, somewhere the sales went up on the other side. So it made a good balance and the things went in a good way. Now on the other side, if I look at the future now. So what -- I have been in talking terms with a lot of my B2B buyers who do B2B business who have supply to restaurants, who don't sell in the supermarkets, who supply in the restaurants, to the catering companies. So these things were shut in the time of pandemic everywhere in the world. So now they see -- so a lot of weddings. A lot of people didn't go out. So they see a very big potential upcoming order, they say, when there'll be a vaccine, when the things get open, when the things get normal in the world. So we expect, for example, somebody was supposed to get married. Let's say, in India, somebody was supposed to get married in April. So he didn't get married. That doesn't mean he'll never get married. So let's say he'll get married in, let's say, November or December or maybe after the vaccine comes. So they are very much prepared that we have very good sales in the future in terms of those buyers whose sales went down. So there will be opposite reaction, which will be seen in the market in the upcoming future. But in that day, we have -- so this is -- the best part of this about our company, what I see competitive to other companies, that our eggs are not in one basket. See, we are around the world. We are into multiple countries. We have a number of buyers. So if I had only -- there are buyers who do only B2B business, and their sales, I can achieve from one buyer INR 100 crores of sale also. But we don't want to have such kind of buyers who can be left or right any moment. I don't want to stand on a thin stick. So I have multiple buyers. So if I -- if any kind of pandemic comes, I'm losing somewhere but I'll gain somewhere else.

Sir, broadly, do we believe that we can maintain these kind of volumes that we have done or improve upon them going forward?

Yes, yes, yes. In fact, you'll see improvements. You'll see -- we'll be able to achieve better sales, and a lot of them -- a lot of new buyers will be added to the portfolio. So automatically, see, I'm present in, let's say, for example, any country. So automatically, if I'm selling my brand, first of all, okay, I'm selling my brand in about 38 countries at the moment.

And how much would be the total value of our brand in total turnover?

So our brand total is INR 199 crores in the export. This is domestic and export?

Yes, yes, it is export.

Okay, so INR 200 crores of export in -- INR 199 crores of export, and the domestic market is INR 72 crores.

Yes. And how much of the export is in our brand and in domestic?

In domestic, it's completely our brand. In domestic, it's 100% our brand. But this is total INR 72 crores of domestic sales, and that is completely under the umbrella of Maharani brand.

And then export, how much would be your own brand?

In exports, we have INR 200 crores of -- INR 199 crores. INR 199 crores of sale under the brand name Maharani. So total is 33% of the sales. So the total sales is 33% our own brand and the balance is...

Got it. Sir, earlier, we used to do the con-call and provided quantitative details, which was stopped in between. I hope this thing can be continued and done more in a better way so that these things are not bothered during the call. We can put out investor presentation or something. This will be a more transparent and professional way of doing the thing.

I didn't understand the point.

Going forward, like earlier, we used to do the investor call and provide the quantitative details of all these data, which people ask. Going forward, if you can do a press release or investor presentation, that will help everyone and save the time in going through all that numbers. And I hope this con-call can be done on a continued basis. And other suggestion I had was...

Do you suggest it should be quarterly or it should be monthly?

No. It should be quarterly, at least.

Quarterly. Okay. Yes, we'll do 100%. We used to do the con-call.

Yes, but then we had stopped in between. And along with that, a press release can be given in which all these details are there. So people won't be bothered with all these numeric things.

I got it. I got it.

Yes. And one more suggestion I had. When I look at the dividend payout ratio, it has fallen over the years. The dividend that we pay out as a percentage of profit has been falling. And that is important. I would suggest that promoters, rather than rewarding themselves by way of dividend -- by way of salary, if they can reward more by way of dividend, it will be helpful for promoters and shareholders and everyone and will lead to more value creation. So that's a suggestion from my side.

Yes. So actually, looking at the financial part, Mr. Rajeev can answer the question better than me. I'll explain him the question, and I hand it over to him.

I think 25% is recommended.

Sir, the payout ratio basically [Foreign Language]. So what I'm suggesting is that promoters should reward themselves more by way of dividend, so it will be beneficial for everyone, rather than increasing salaries. And this will lead to more value for the company in the longer term.

Salaries, we are not increasing. Salaries are almost constant or quite average. [Foreign Language]

As there are no further questions from the participants, I now hand the floor back to Mr. Shirish Pardeshi for closing comments. Over to you, sir.

Yes. Rajeev ji, there are no more participants who are asking questions.

Somebody asked -- in fact, I left a sheet on my bedside. And a question was asked about stocks. So it's INR 118 crore for rice and INR 15 crores stock is for paddy and about INR 9 crore for bags, stock in hand. This question was raised by someone, but...

Yes, Baidik Sarkar from Unifi Capital.

Yes. You can convey it to him. The gentleman, if he's on the line, he can hear it.

Yes. I'll do that. Sir, I have just last 2 questions from my side, and then we will close the call. So I think we have heard the competition talking about a big surprise which is coming from Iran. And I think what people are trying to do is that now Dubai has become a hotspot and people have transshipment happening from Dubai to Iran. So is there -- I mean I just wanted to draw your comments that what is the reality? And whether this is going to be a next game-changer for the industry?

Yes, yes, yes. First thing first, if the transshipment from Dubai to Iran happens, I will be the first to jump into it because about 10 years back, about -- before this INR system of UCO Bank was started, prior to that, I was doing a very large business for Iran through Dubai and -- but this is not happening now. In February, of course, during Gulfood I was there, and nobody could travel after that. And I did not see -- I inquired if the rice is going in the launches, they said it's not going. Maybe very limited quantity if somebody -- because now it depends because Dubai, UAE and this Israel, they have joined hands and America has laid a bridge for them. So let's see which way the wind blows in the Gulf and Iran sanctions, if Trump says -- if Trump just looks at Dubai, that rice, you cannot export. You cannot deal with Iran. They cannot dare to do anything. That's the issue. If it starts happening, then sky is the limit for them.

So you mean to say right now, the entire export to Iran is completely standstill now?

Almost standstill. And after, I think, 15, 20 days, I don't have exactly date, then it is going to be stopped and will be resumed in November. And August or September, from one date, it is being shut because every single year when their own crop starts coming, they stop it. And this year, their crop is 40% or 45% higher. This is what -- because not any official data is available, it's hearsay or whatever you can call it, but their crop is too high. They won't be dependent too much on India, but in the case of prices, they will be buying. They will -- they have to buy. I don't know a country buying 1.4 million tonnes, how they can go without this rice. They will -- there -- some solution will come. It will go from -- it happened. Otherwise, other food products like dry fruit is coming from Iran to Dubai. Even now it is coming. If other product can come, why not the rice can go back? Yes, it should go back, but it is not happening of late. And if it started, then I have a good opportunity in Dubai.

Okay. And sir, last question on -- you mentioned that you have about 394 customers across the world. Can you share the top 10 customers or maybe top 10 countries? What is the contribution and which are top 2, 3 countries?

So this question, I was expecting. But truly speaking, we will not answer this question. It's very confidential because some of the countries, nobody can even think of we are exporting and there, large quantities are buying. Today -- because I knew somebody will ask and any way, it's from you. I can talk about the common country. U.S.A., we are doing a very large business. We have around 30, 35 buyers [Foreign Language] We are doing good in Israel. We are doing good in Canada. UAE also we are doing.

Sir, at least, can you share how many customers you have who are B2C and how many are B2B out of 394?

There is no proper segregation because it's their business. We cannot put nose -- we cannot put nose in their business of our buyers, of course. But there are 2 kinds -- 3 kinds of sale, which Sankesh explained only -- 2 only. One is the distributor or customer who buys from ourselves to supermarket and one who sells to the super -- there are a few that only sell to the supermarkets. And most of them, they have one supermarket also and they sell to mom-and-pop stores or small, small shops. But all the oriental companies, if they are of Irani origin, Afghani origin, Middle East origin, they sell to [ DC ] side and they have restaurant sales also. And their sale, of course, came to a halt or -- for these home supplies, whatever they are selling very limited. That part was affected. But in all that's essential, there was panic buying also and it went good.

Sir, basically, what I was trying to understand, what is the margin difference? Because if you have large contracts with B2B and if you have large contracts with B2C, I think how the pricing takes place, that's what I wanted to understand.

The margins are same for us. The buyer is a buyer for us. And margin does increase, and it has started increasing considerably because about 2, 3 years back, we had limited -- it was 15%, about 10% to 15% branded export. Now it has gone up, our branded export. And the brand, the quality and the main that have started paying dividend. We are getting more better prices from countries, wherever the brands are different. Some of them are new, brand is -- on way of establishment, but it is there in many countries now. I can proudly say, you name any country in the world, I will tell you we are there.

Okay. Okay. Got it. So I think there are no more further questions, so I think we should close the call. So thank you, Rajeev ji and Sankesh ji, for helping us to get how the growth is going to pan out. And again, thanks for the wonderful opportunity for Centrum selecting to run this conference call. Maybe, Rajeev ji, if you have any closing comments you can tell and then we'll close the call.

The closing comments are, you see there are wonderland of figures also. There are so many figures, questions are made. But we as a businessman, I always speak on the model of my business, vision of my business, how I can make money, where I can lose money. This is how I have been coming back. This is how I have been speaking always. That is more important for the member-investor to understand. Figures everybody can check. Figures don't help. What helps is the model of the business. Because sometimes people say prices have gone up. If the prices go up, I may be losing also. It matters. It's very subjective. Business is very subjective. You still have -- you can make a profit when you're buying. You can make profit when you're selling, if somebody has very competitive buying, low price. And one thing more, this -- nobody raised the question about aging of the rice. Otherwise, it used to have been first or second or third question in the past. Yes, companies have surplus funds. Now we are investing on the raw 1121 rice, holding it. And we'll come with the qualities of the most famous brand like that. That's our plan. Age price will be coming for the future sales. Company have spare parts, well, it's no problem if I hold, 4,000, 5,000, 7,000 tonnes, 5,000 tonnes, 3,000 tonnes to begin with.

Thank you very much, sir.

Thank you.

Ladies and gentlemen, on behalf of Centrum Broking, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.