Prospect Consumer Products Limited ($543814)

Ladies and gentlemen, good evening, and welcome to Prospect Consumer Products Limited H2 and FY '26 Conference Call hosted by ConfideLeap Partners. [Operator Instructions] Please note that this conference is being recorded. Before we begin, I would like to point out that this conference may contain forward-looking statements about the company, which are based upon the beliefs, opinion and expectation of the company as of the date of the call. These statements do not guarantee the future performance of the company, and it may involve risks and uncertainties that are difficult to predict. We represent the Investor Relations for Prospect Consumer Products Limited. The company is represented by Mr. Vimal Mishra, who is the Managing Director. I would now like to hand over the call to Mr. Vimal Mishra for his opening remarks. Thank you, and over to you, Vimal, sir.

Thank you, Abhinav. Good afternoon, everyone, and a warm welcome to the H2 and financial year '26 earnings conference call for Prospect Consumer Products Limited. I am Vimal Mishra, Promoter and Managing Director. Thank you for taking time to join us today to discuss our financials and operation performance for the fiscal year ended 2026. FY '26 has been a defining year for our company, characterized by robust financial scaling and significantly enhanced operational execution. Our financial results reflect our ability to scale efficiently, while improving our operating leverage across all business verticals. We recorded an exceptional total income of INR 57.62 crores in financial year '26, representing a substantial year-on-year growth of 85%. Our operating profitability also improved with EBITDA witnessing a strong year-on-year increase of 48.34%, reaching to INR 6.31 crores. Furthermore, our profit after tax grew by 14.76% year-on-year to stand at INR 2.46 crores. These financial achievements are firmly backed by substantial operation advancement on the ground. A key highlight for financial year '26 was the modernization and expansions of our state-of-the-art manufacturing facility in Changodar, Ahmedabad. We successfully increased our total installed capacity to 4,800 metric tons per annum. More importantly, we rapidly scaled our capacity utilization to 2,500 to 3,000 metric tons per annum range during this period. By integrating advanced automation system at this facility, we have reduced manual processing requirements and achieved approximately 80% automation. This operational efficiency directly supports a leaner cost structure, consistent product quality and long-term business scalability. On the market expansion front, we are aggressively capitalizing on the premium & health-conscious snacking segment. We successfully accelerated our direct-to-consumer market expansion by launching new products category, including dried berries, seeds and innovative flavored cashew variant under the flagship brand of DriFrutz. To deepen our multichannel market penetration, we officially listed on the digital B2B procurement platform like Hyperpure and aggressively enhanced our premium brand visibility by receiving contracts for sponsoring and curating customized gift hampers for prominent golf tournaments and major corporate events. As we look forward, we remain firmly committed to a disciplined capital allocation strategy and continued supply chain optimization. We plan to scale our capital -- capacity utilization to 3,500 to 4,000 metric ton per annum by this financial year. We are structurally positioning ourselves to target 40% to 45% CAGR over the next 3 years while delivering sustainable high-margin growth. Thank you for your continuous trust and support. I would now like to open the floor for questions.

[Operator Instructions] First question comes from Mr. Abhishek Shah.

Hi, am I audible?

Yes.

Okay.

Yes, Mr. Abhishek. You are audible.

Yes. Congratulations on good set of numbers. So, my main question was on the operating margin like especially on the H2 side, why have they decreased with respect to H1?

Alright. So there are multiple reasons why the PAT has been reduced actually in H2 especially for '26. First, we have a depreciation effect of roughly around INR 1.5 crores coming. Secondly, mainly because we are mostly dependent on the import material. So when exchange rate -- last year when we started, the exchange rate was -- stood somewhere around INR 84, INR 85 and by the year -- by the March 2026 it -- it reached somewhere around INR 93, INR 94 something. And our accounting mainly runs on the average. It's not a FIFO, it's average based actually accounting, actually where whatever the imports has come after second half, what we have received, the exchange rate fluctuation, that has actually -- that has pushed the average down. Where the cost has been -- cost of the goods, it got -- in first half, we didn't have that much debt available, the actual working capital, which we have raised through bank last year. It was not there, but in second half we got that fund and we utilized it fully. So that's where the interest cost has also been -- also came there. And third is the aggressive spending of the marketing for D2C branding or the retail subsidiaries as well, through other corporate events as well. We have developed so many SKUs in -- compared to last year because last -- till last year we had only 3 SKUs. Now we have total 24 SKUs which we have developed in second half. We have spent for that. All those products are already listed on the Amazon platform, Flipkart platform and on DriFrutz subsidiaries as well. So we want to increase our portfolio in D2C segment as we want to establish ourselves as a FMCG player rather just to being in the [ commodity products ]. We want to expand more products in our category as per whatever the dry fruits we can cater in that and making all these points actually together, that has actually pushed our PAT margin a little bit on lesser side what we have delivered in first half.

Okay. So understood on the margin, but then ideally your H2 should be stronger than H1 on the revenue side also, but that has also not happened?

Because the Diwali festival was actually just at the end of the first -- H1 at that time. So if you see major -- majority sale has already been done that time. Now secondly, from February onwards the market has started going down. So there was a pressure on the sales side as well, on margins as well. We complete our selling just prior to Diwali. Just 10 days before the Diwali, not after the Diwali.

Actually your voice is breaking in between. Is it just me or everyone is facing the issue?

It seems okay at my end, but still if anyone is facing the issue, please raise it. Abhinav, can you hear clearly or we have some issues here?

Yes, sir. It is fine now.

Yes, it seems to be fine now. So, basically you are saying that the Diwali period was in H1, that is why all the sales were much more in H1, correct?

Yes. And after Diwali it took 10-15 days to start the plant and everything because -- So that's okay, that's a routine actually, year-on-year basis thing. So that is okay. But main -- fairly because for Cashew, our premium snacking, so Diwali is the main period for us as a selling scale -- for a scaling sale. So before Diwali -- you can consider 10 days before Diwali, the -- most of the sales are getting done and it is closed actually. So that's why first half was quite good. Second half, it was little bit less.

Okay. And going forward, so what are we expecting, like going forward, what type of EBITDA margins are we expecting? And what is the impact of...?

So EBITDA, we are targeting roughly between 20 -- sorry?

Yes. I was asking what is the impact of the war since we have -- our raw materials are kind of imported. So, what is the impact of the war on the business?

The effect is there because the exchange rate, it has jumped like anything. So still market is in middle of accepting those increase because it's not a festival season right now. So maybe another months something it will take to absorb that cost. Secondly, the fuel prices have gone up. So definitely transport cost will also get increased. So overall the cost has to get increased. That is for sure. This is the question that when the demand will start in the market in a big way actually, in a flow, that time the acceptance will be there. Till that time, the war will be continue like the -- to get more margin out of those same sales. So it is going on right now, that is there. Impact will be there, but still we are trying to increase our EBITDA margin from -- that's what we are targeting right now. We will have a retail spending actually just to increase our retail portfolio, where we can have some support from the sales as well and the PAT level with increased sales of B2C segment and -- in the B2C segment. So that may help us, but again that spend will be there as far as the retail is concerned. So EBITDA will be somewhere around 12% to 15%, you can consider that.

Okay. So, you are saying the EBITDA will be 12% to 15%?

Yes.

And on the capacity side, so it is like currently we are utilizing around 2,500 to 3,000 metric ton, correct?

Correct. So when we started this new facility, prior to that we had a capacity of 1,200 tons. So rather going straight away to plant new facility, so we were knowing we will have so many challenges once we start the production. So we absorb everything, we learn what we need to improve. We have done few -- lot of correction actually in the process as well. Now we have gone through everything. So this year we are targeting 3,500 to 4,000 tons something. And next year it will be somewhere around 4,500 to 5,000 tons. That's what we are going to utilize.

[Operator Instructions] Next, we have Mr. Ajay Pandit.

Am I audible? Hello? Am I audible?

Yes. Yes.

Firstly, I would like to congratulate the management for achieving such a good set of numbers. Even I had questions relating to the capacity utilization. So the Changodar facility which has been recently modernized to handle around 4,800 metric tons per annum, which is currently operating at approximately 80% automation of around 3,000 metric tons. How much of the specific stages of the 7-step cashew processing cycle like de-shelling, moisture control or sorting have benefited from this automation? And earlier you mentioned that this financial year would be expected to scale the utilization up to 3,500 metric tons. Could you also let me know what month are you aiming for this operational timeline?

See, as far as the utilization is concerned, the setup what we have done in Changodar, it's a completely new setup. So we have done the automization (sic) [ automation ] in all the 7 areas. Whether it is de-shelling, whether it is cleaning machine, the new color sorter, everything we have done actually. So the utilization has improved, automation has been done in all the segments for that. Secondly, the utilization what you have mentioned, so 3,500 to 4,000 metric tons, that will be get divided in 12 months period. So we try to maximize the production in first 6 months of the year. Like from this month the production has started packing (sic) [ picking ] up a lot actually, so we will try to utilize this capacity as much as we can. And going forward after Diwali, we may see at least 15-20 days break in that just because of the Diwali holidays and everything, and after that to again start the production on a full-scale capacity, it will take another 10 days or something. So we want to have at least 300 to 400 -- between 300 to 400 tonnes per month production cutting facility, de-shelling at our plant for first 6 months at least. So whatever we can increase, that will help us in H2 as well.

I think even I have faced some interruption. If I am not wrong, you said you are expecting it after 6 months, right?

No, no, no. we have already started in -- utilizing it.

Okay. Okay. Okay, sure. The second question was relating to the DriFrutz...

So what I was trying to say, because this facility -- yes, sorry, please complete.

Yes. The second question was relating to the DriFrutz brand. Your entry into the B2C and D2C segment has introduced value added cashew variants like the peri peri, cheese or that chocolate one, which are targeting the premium market. I wanted to ask like are you planning or testing any additional flavors currently or maybe have you received any early feedback from the listings on Hyperpure and quick commerce platforms? Any color on that would be helpful.

So far we have not received any feedback from e-commerce platform, so far actually. But yes, in the retail market here we have distributors in gifting as well. So far the feedback what we have received is quite positive and that has pushed us actually to go for a particular, this, flavored cashew on the e-commerce platform. So we tried it for last 1 year actually, we can say that, we have tried it in the retail market here. We have offered this in our gifting as well. We got some positive reply -- positive feedback. We have sponsored few golf tournaments as well where we have the -- offered this product to the golfers so that we can get the feedback from those premium segment as well. So far, it's quite a positive feedback what we have with [indiscernible] right now.

And lastly if I am allowed, I would like to understand the competitive landscape in the B2C segment, like which brands do you consider your key competitors? Is it Farmley and Jabsons? And moving forward, what is your strategy to compete and increase your market share?

See, we don't see, or probably I should not say that anyone is in competition. The market is quite huge. It's a buying pattern which is getting shifted now, we have seen this trend. So if you see, even in my home, daily basis actually, 2 or 3 times we are ordering from Blinkit. So it's a shift in buying pattern where going forward we feel that on day-to-day basis people will prefer to shop and buy the material online. So that shift is there. And we feel that going forward, that is the future where the most of the sales may get done, and that's why we want to emphasize our sale on online platform. As far as the big brands are concerned, like you are saying actually, who are already established in the market from last 4-5 years or more than that, so it's too early for us to say that we are in competition. We are just trying to [Technical Difficulty] snacking products with the quality because we are directly processor. We are not buying from any third party. We are directly processing in our plant and we are selling in the market. There is a big difference in quality. What we can see right now -- as of now what we have understood, we have got very positive feedback on our packaging as well. In fact, we had a meeting with Blinkit as well where they also appreciated the packing what we are using and the quality what we are delivering right now. Though it is yet to scale on that level where the competition level will come. Actually that's on later on stage. Right now, our priority is just to position ourselves in a D2C segment.

Okay. Do you -- Just the last question, do you plan any healthier alternatives, like 0 cholesterol or maybe new flavors? Just any information on that?

So in H1 call of 2027, you may get some update about the new products as well. So we are working on something. So let's see how we get the result. So you may see something coming there as well.

[Operator Instructions] Next, we have Mr. Raghav Srivastava.

Hello, sir. Am I audible?

Yes.

Sir, first of all, congratulations on the amazing set of results. Yeah, so my first question was, your total income has grown up to INR 57.62 crores, that it has grown by 85.14%. So, could you just give a break-up of it, like was it due to volume expansion or price validation or product mix changes? Could you just throw some light here?

So, Raghav ji, I couldn't hear you clearly, but what I understood, you are asking about the bifurcation of sales for the INR 57 crores, whether it is B2B or B2C something like that, or if you can just repeat the question because I couldn't hear you clearly?

No, no. So I wanted to understand what is the break-up of the, I mean, your revenue? So what -- your revenue is increased due to volume expansion or due to price hike or specific product mix changes?

So this is the production expansion actually what we have done because we have utilized this capacity this year, 2,500 to 3,000 tons. This is actually more than double what we have utilized last year and this is mainly because of that. It's not the same volume what we have traded this year actually.

Okay. So it was purely due to volume increase?

Yeah, absolutely.

Yeah. So there were some questions on EBITDA margin, but you have already answered it. So my last question was, so you have recently entered into the D2C segment, retail segment. So what was the mix between B2B and D2C? What was the share of revenue from B2C and what was from D2C? And what can we expect in the next financial year? Could you just give some information on it, if possible?

See right now D2C segment is very less if you actually combine the gifting as well because we are actually pushing really hard for gifting as well because that is one of the areas where we can increase our profitability as well. So we have started working for gifting from last 4 months. We are already on it. So we are already in discussion with few of the buyers as well who required a corporate gifting as well. We are in a discussion with Blinkit as well, if we can get our product listed on their platform. Amazon, we are already there, Flipkart is there. So, so far the sales what we have done is very less, to be honest. It's not even -- you can say, roughly it's around INR 50 lakh, INR 60 lakh in terms of value for that. But we are targeting -- as a first threshold what we are targeting is somewhere around 10% of our revenue. That's what we want to achieve in a B2C or D2C sale and including the gifting as well.

[Operator Instructions] Next, we have Ms. Riya Shah.

My name is Riya Shah. So first of all, congratulations on your result. And I wanted to know about the specific steps that you're taking for your sourcing networks in like Africa, South Asia and India? Like what percentage are being sourced and from where? Can you throw some light on that?

Madam, right now, most of the material is coming from Africa only. Because cost wise what we are processing right now, if you look at the other market right now, even including the local crop, there also the costing is getting little bit on a higher side. That's where on the last financial year, the entire material, it came from the West African and East African countries. So in the first 6 months, it was mainly West Africa. After that, from December, January, February, so we had material from Tanzania, and after that from Ghana as well.

Okay. Okay, sir. And one question I had about cashew by-products, like there are cashew husk pellets and cashew nut shell liquid, CNSL. So currently like what they contribute in your revenue mix and any growth outlook in these specific industrial segments you are hoping?

So generally when we process raw cashew, approximately 70% is cashew shell what we get out of it. So we are selling it to the CNSL processor directly. We are not processing in our plant for CNSL oil. We are directly selling it right now. And the same ratio proportionate will continue going forward. No matter we increase our production to 4,000 tons or 5,000 tons. Roughly around 75% --70% material, it will be cashew shell, which we are directly selling. Same goes with the husk as well, when we are processing we are peeling the cashew, so somewhere around 2% of the raw cashew, 2%-2.5% around that cashew husk is coming out of that and that's what we are selling in the market as well. So that ratio is confirmed, it depends on how much production we increase on the raw cashew side. Basis on that we will have the output of cashew shell and husk.

[Operator Instructions] Next, we have Mr. Jayesh Shah.

Congratulations on a good set of numbers. Just a few questions. First one is, given the recent introduction of DriFrutz brand and new products like dried berries and seeds, what is the expected revenue by the end of this financial year?

So, we just mentioned, retail B2C segment overall we are targeting to reach 10% of our actual sales. Whatever the revenue we generate, that is our first target. It may take 6 months, 1 year or couple of years, we don't know. We are really pushing hard to get -- position ourselves in the retail segment for D2C branding as well. So that is our core priority right now because we want to establish ourselves in FMCG market rather than being a commodity player.

Okay. Next sir, you recently listed on the digital B2B procurement platform HyperPure and earlier partnered with Amazon, Jio Mart and ONDC. What is the initial traction and what is the CAC, that is customer acquisition cost looking like across these channels? if you can throw some light on this?

So we already listed on HyperPure. Amazon, we are already there. We are even trying with the Blinkit as well, though on the Blinkit, we are actually in discussion so far. So it is yet to get close. So right now, we are just trying to get into that, we have not figured out any customer acquisition cost so far, to be honest. Because right now our priority is to get onto those platforms and increase our sales. So HyperPure is just a couple of months when we got listed on that platform, we have started selling them as well. So right now, they are taking somewhere of 15% to 20% percent margin to get listed on their platform and selling. So our cost has not significantly increased on those platforms as of now because the sales, it is yet to reach on certain level where we can do some analysis on that. So we will wait for that -- for some more time period actually for this just to get the accurate numbers. Right now, our priority is just to start selling on those platforms. We are taking this from our marketing budget as of now and we are pushing ourselves to get available in the market under the brand name of DriFrutz.

Okay. And this is regards to the quick commerce logistics. With your plans to expand into quick commerce apps, how is the company managing supply chain logistics to ensure shelf life and quality of premium products?

So, in quick commerce platform, we have tie up with those players, like Blinkit if you are saying or probably Amazon you saying. So, we have tie up with those players. So, whenever we get the order, so we always ensure that whatever material we are supplying, that is within those shelf-life of the product. Because usually we mention 6 months shelf life for the particular product and everything is managed in our own warehouse right now. So whenever we are shipping to their warehouse, we ensure on a monthly basis. We take a track -- we keep a track on it, we take a reports on a monthly basis whatever material is lying there, whatever is not sold. So we don't prefer to keep those materials there for more than 2 months. So that's where we are -- Right now we are managing this in maximum period of 2 months, 2 and 3 months between, because the shelf life is 6 months right now. So we prefer to keep a low stock with those quick commerce warehouses and yet we are mostly dispatching from our own facility only.

One last question regarding the corporate events and golf tournaments. What level of marketing and brand building expenditure is forecasted for FY '27? Will this impact near-term profitability?

Yes, sure. Because see, whoever is coming to play golf, those are -- mainly those are the decision makers in their respective roles, whether they are working as a professional or they are actually owning the company or running any firm or something. So when this product get highlights there, so definitely it gives an advantage that they see the product, they see the branding there, they have appreciated as well actually. So this is not the first time we have done, actually we are doing this from last 1, 1.5 years for golf event because Mercedes, BMW, Audi, these all people they are doing actually branding in golf tournaments. So yes, we are not spending that much. To be honest, not even 10% of them, what they are selling -- they are spending to these golf tournaments. But we are trying to maximize the output where everyone will have the product of DriFrutz and the name of DriFrutz with them. Maybe it's a 25 gram pouch what we are delivering to them or the gifting hampers who are the winners, who are winning the tournaments. So our branding will be there. They get the products right now actually in last 2-3 months. People started calling us "DriFrutz [Foreign Language].". So they started getting the name in their mouth. So we are spending very less on that. It will continue for sure. But near future, we feel that we will have some really good response in terms of sales in actual numbers from golf tournaments.

[Operator Instructions] Next, we have Mr. Rahul Singhania.

Rahul this side. I am calling from a family office in Chhattisgarh. First, I wanted to understand about the inventory build-up. So, inventory values have nearly doubled from the last year. Now it's around INR 18 crores. So, is this strategic or as you mentioned because of the expanded product portfolio? So, what is it?

So, because we have expanded our facility, so the production got increased. In cashew, generally we have one big challenge that almost 30% of our inventory which required manual intervention, because there are few cashews where the [ texture ], the husk material basically, it will remain on it even though you try to get into -- clear in the cleaning machine for twice or thrice. So those sort of materials, the value of that material in terms of volume is somewhere around 25% to 30%, that remain in the stock with you. So we have to send this material to labor at their home, it's on a contractual mode. They process that material. One labor can maximum, they can do around 5 kg to 7 kg in a day. So when we have a stock pile up, actually when other material is running in the market, so again this material will be there. So this material is creating a dead stock, as I mentioned actually, right, the stockpile up in our books actually. This is mainly because of this 30% material which is going there in the labor's house. So to sort this out, because we face this issue after Diwali or nearby Diwali, because of material started getting up -- wrapping up stock like anything. So we started increase the manpower what we used to have. Earlier we had 30 odd employees, laborers who used to do this. Now we are trained further. Right now we have somewhere around 80 something employees actually who are working on this. So on a daily basis, we try to complete this material as much as we can. We are sending them on per kg basis. We are taking the material on per kg basis from them as well. So, this is mainly because of that and we are actually desperately pushing this thing to reduce this stock in our books inventory.

All right. Also the debt profile, so our borrowings also have jumped from nearly INR 5 crores last year to over INR 10 crores now. So, this is also pushing our debt-to-equity ratio. So, what is the peak debt level that you anticipate as we scale up this D2C operations in the future?

See we raised the fund because of the working capital. Because in cashew, generally couple of years back, the raw material price was somewhere around INR 110, INR 120. Last year it went to INR 140, INR 150. This year it's around INR 170, INR 175 right now. So every year the raw material price is going up. Secondly, we are increasing our production. Till couple of years back it was 1,200. Last year it was 2,500 to 3,000 tons. This year 3500 to 4,000 tons. So definitely that gap will be there, plus this 30% material which is lying in the stock. So the cycle get increased, it got stretched. So that's where we have to go for the debt. We have gone for the working capital from the bank which we raised actually last year and that will be there going ahead this year as well. And break-even if you really ask me, when we'll see? So probably, I think -- by this year end, I think we should be at par with that.

At peak debt level?

Sorry?

At peak debt level, as a debt-to-equity ratio, you see, at year end we will be at the maximum and then will reduce?

So maximum, I think it should not be more than 0.6%. It won't cross 1:1 for sure. Maximum it may reach to 0.6% something.

Yes, that's okay. All right. Understood. And lastly, there are lot of government initiatives. So there was one program in Feb, if I'm not wrong, to enhance the raw cashew nut production. So how do we see this as our industry tailwind and how does this affect us as a company?

It's a good initiative by the Government of India because the cashew which we process in India is roughly around 2.4 million tonnes. That's what we process in a year. And opposite of it, the harvested cashew what we get in India is somewhere around 800,000 tonnes. So rest of all the material is being imported from West African countries or from the Asian countries. So we are importing. Same goes for the Vietnam as well. So if we have a more cultivation of raw cashew in India, so that will help us to fill this gap because year-on-year basis the demand is going to get increased. People, they are trying to find out the ways to use -- maximum utilize -- They want to utilize maximum dry fruits in other snacking products as well. Right now we have seen in the bakery product as well they have started using cashew, almonds, it is already there. So we have seen so many people, they are trying to take maximum use of this product in their routine life. So the usage, the consumption is going to get increased. It's roughly 3.8% CAGR for cashew industry till 2029. That's what we have seen. That is what it is estimated. And against that, if the raw cultivation, if it get increased even by 10% year-on-year basis,, so that will definitely help as an industry and same time it will help to the farmers as well, in India. Because as a cashew processor, our payment cycle gets stuck because when we import from West Africa, it takes around 40-45 days in the transit time, another 5-7 days for custom clearance and when they start preparing for loading, they take another 10-15 days. So for roughly around 60-70 days that is gone actually before we get the material. But if we have that material ready available in India, it may take 3 or 4 days just to reach our factory. So that is definitely very good initiative, that will -- that is going to get help. We -- as an industry we are going to get help from that.

Yeah, yeah, I agree, that is a boost to us.

We believe there are no further questions from every -- anyone. We'll now take questions from the Q&A box. So, the first question is from Mr. Jatin Navlani. What is our PAT margin guidance for next year considering we are expanding into B2C? And what will be the proposition of B2B and B2C in FY '27?

So Jatin ji, as I mentioned, we are trying to expand in B2C segment. Our first target is to achieve 10% of the revenue what we are delivering on a year-on-year basis. We are not sure actually how far we will reach that, but we will continue spending on the FMCG side, D2C side actually just to get the -- our footprint in this category. Because that is -- we feel going forward that will be very important. Going after next like 2-3 years or 5 down the line, 5 years, the D2C or quick commerce business will be much more compared to the B2B side. So we want to spend as much as to get our entry in this particular segment. Same time that will help us to increase our profitability as well. But right now we are targeting on the volume side. So that's what we are targeting, 10% of the volume what we are generating or the revenue we are generating, that's what we are targeting for this year, for the financial year '27, for the B2C side. Rest everything will be on the B2B side. And on the PAT margin side, so just because of this pending and the global situation, it may have a little bit impact, but we are right now focusing more on EBITDA side rather actually looking directly on a PAT margins. So EBITDA we are focusing 12% to 15% at this stage. So around -- roughly PAT will be somewhere around 5% to 7%, that's what we may -- we will be there. But as I mentioned, we are focusing more and more on the EBITDA side at the moment.

Okay. Next two questions are from Ashish Thakur. First question is, finance costs have increased significantly from INR 0.48 crores in FY '25 to INR 1.3 crores in FY '26. What is the average cost of debt currently and how does the management plan to optimize interest expenses in the coming quarters? And second question is, under the DriFrutz brand, what is the upcoming offerings looking like for new flavor variants planned in future?

So as far as the finance cost is concerned, as I just, answered just now, the debt-to-equity ratio still looks quite good. We are targeting not to increase it more than 0.6%. So the finance cost has increased just because of that interest portion, which is there actually as a working capital what we took to run the business, to fill the gap and because we have increased the capacity, so this year also it will be there. We are trying to reach on the particular breakthrough level actually by this year-end, where we may not required to raise further debt from the market just to reach on the maximum capacity because our plant will still have 1,800 tonnes capacity as unutilized in our factory. So we are trying to utilize it fully. So whatever profit margins we are generating and whatever the gap we have, so we are trying to fill those gaps with the debt instrument as of now rather just going for the -- going to raise funds through equity at this stage. So that's why the finance cost will be there. As far as the DriFrutz brand name coming offers, so we are open for the offers actually. We are -- the Diwali season will come or the gifting will come. So whenever [Technical Difficulty] we are discussing with the customers. So one is the market offer is there, we are providing some discounts on that as well. And when we have some bulk deals actually under the brand name of DriFrutz, we are definitely open for discussion and we are offering them very good discounts as well. So if you have anything you can directly reach to us, we can definitely work out here.

Okay. As there are no further questions, we would now like the management to give the closing remarks.

Well, thank you all for your time and insightful questions today. As we move into the next fiscal year, we remain focused on our strategic expansion in D2C segment and maximizing the operational efficiency of our modernized automated facility. By prioritizing our product quality, supply chain efficiency and strong partnership, we are committed to maintaining our unique brand identity and remaining the preferred choice for reliable cashew offshore solutions. Thank you once again for your continued trust in our journey. Thank you, everyone.

Thank you for joining Prospect Consumer Products Limited H2 FY '26 conference call hosted by ConfideLeap Partners. Participants may kindly sign-off.