Q1 2027 Parag Milk Foods Ltd Earnings Call

August 7, 2026

Speaker #1: Ladies and gentlemen, good day, and welcome to Parag Milk Foods Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in listen-only mode.

Operator: Ladies and gentlemen, good day and welcome to Parag Milk Foods Limited Q1 FY27 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Brian D'Penha, Head of Investor Relations at Parag Milk Foods Limited. Thank you, and over to you, sir.

Speaker #1: And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your touch-tone phone.

Speaker #1: Please note that this conference is being recorded. I now hand the conference over to Mr. Brian Depenna, Head of Investor Relations at Parag Milk Foods Limited.

Speaker #1: Thank you, and over to you, sir.

Speaker #2: Good day and good evening, everyone, and a warm welcome to the Q1 FY27 earnings call of Parag Milk Foods Limited. We are pleased to have you all join us for this virtual meeting.

Brian D'Penha: Good day. Good evening, everyone, and a warm welcome to the Q1 FY27 earnings call of Parag Milk Foods Limited. We are pleased to have you all join us for this virtual meeting. For the meeting today, we have with us our Executive Director, Ms. Akshali Shah, our Chief Operating Officer, Mr. Rahul Kumar Srivastava, our Chief Strategy Officer, Mr. Ankit Jain, and myself, Head of Investor Relations, Brian D'Penha. Today, it gives me great pleasure to introduce you all to Mr. Rakesh Kothari, who has been elevated as a Chief Financial Officer and key managerial personnel of Parag Milk Foods Limited, effective 6 August 2026. I would now like Rakesh to introduce himself and speak a few words.

Speaker #2: For the meeting today, we have with us our Executive Director, Ms. Akshali Shah; our Chief Operating Officer, Mr. Rahul Kumar Srivastav; our Chief Strategy Officer, Mr. Ankit Jain; and myself, Head of Investor Relations, Brian Depenna.

Speaker #2: Today, it gives me great pleasure to introduce you all to Mr. Rakesh Kothari, who has been elevated as Chief Financial Officer and Key Managerial Personnel of Parag Milk Foods Limited, effective August 6, 2026.

Speaker #2: I would now like Rakesh to introduce himself and say a few words.

Speaker #3: Yeah, thanks, Brian. Good evening, everyone. It's a privilege to join Parag Milk Foods as the Chief Financial Officer. I thank the Board and the management team for their confidence in me, and I'm excited to be a part of the company, which has strong brands and significant growth potential.

Rakesh Kothari: Yeah. Thanks, Brian. Good evening, everyone. It's a privilege to join Parag Milk Foods as the Chief Financial Officer. I thank the board and the management team for their confidence in me, and I'm excited to be a part of the company, which has strong brands and significant growth potential. With over 25 years of experience in banking and corporate finance, including more than 2 decades with Citibank, I look forward to leveraging my experience in financial strategy, fundraising, treasury, and business transformation to support Parag's next phase of profitable growth. Our focus will remain on disciplined capital allocation, stronger cash flows, sound governance, and creating long-term value for all stakeholders. I look forward to engaging with the investor community and appreciate your continued trust and support. Thank you. Over to you, Brian.

Speaker #3: With over 25 years of experience in banking and corporate finance, including more than two decades with Citibank, I look forward to leveraging my experience in financial strategy, fundraising, treasury, and business transformation to support Parag’s next phase of profitable growth.

Speaker #3: Our focus will remain on disciplined capital allocation, stronger cash flows, sound governance, and creating long-term value for all stakeholders. I look forward to engaging with the investor community and appreciate your continued trust and support.

Speaker #3: Thank you. Over to you, Brian.

Speaker #2: All the very best, Rakesh, and congratulations. Best wishes for continued excellence and impact. After the presentation concludes, we will commence with the Q&A session.

Brian D'Penha: All the very best, Rakesh, and congratulations. Best wishes for continued excellence and impact. After the presentation concludes, we will commence with the Q&A session. Just a couple of points to remember. While asking a question, we request you to announce your name and organization. We request you that you limit your participation to one question at a time, and rejoin the queue if you have additional questions. For the purpose of completeness, I do want to read out our safe harbor statement. Certain statements in this meeting with regard to our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. I now hand over to Ms. Akshali Shah for opening remarks. Over to you, Akshali.

Speaker #2: Just a couple of points to remember while asking a question: we request you to announce your name and organization. We also request that you limit your participation to one question at a time, and rejoin the queue if you have additional questions.

Speaker #2: For the purpose of completeness, I do want to read out our Safe Harbor statement. Certain statements in this meeting with regard to our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements.

Speaker #2: I now hand over to Ms. Akshali Shah for opening remarks. Over to you, Akshali.

Speaker #4: Thank you, guys. Okay. Good evening, everyone, and thank you for joining us today. Before I begin, I would like to welcome Mr. Rakesh Kothari, who has recently taken over as the Chief Finance Officer of the company.

Akshali Shah: Thank you, Brian. Good evening, everyone, and thank you for joining us today. Before I begin, I would like to welcome Mr. Rakesh Kothari, who has recently taken over as the Chief Financial Officer of the company. I am confident that he will add a significant strength to our finance function as we continue to build a stronger governance and financial framework, and will take Parag to a newer height. Let me begin with the quarter. Q1 FY27 has been a quarter of continued execution for Parag Milk Foods. We delivered our highest-ever Q1 revenue of INR 945 crore, representing 11% year-on-year value growth and 3% volume growth. EBITDA stood at INR 70 crore. Absolute EBITDA grew by 6% year-on-year, while the EBITDA margin was 7.4% compared to 7.7% last year.

Speaker #4: I'm confident that he will add significant strength to our finance function. As we continue to build a stronger governance and financial framework, we'll take Parag to new heights.

Speaker #4: Let me begin with the quarter. Q1 FY27 has been a quarter of continued execution for Parag Milk Foods. We delivered our highest-ever Q1 revenue of ₹945 crore, representing 11% year-on-year value growth and 3% volume growth.

Speaker #4: EBITDA stood at ₹70 crore. Absolute EBITDA grew by 6% year-on-year, while the EBITDA margin was 7.4% compared to 7.7% last year. The PBT remained broadly flat, while the PAT declined by 20%, primarily due to the current tax impact in this year.

Akshali Shah: The PBT remained broadly flat, while the PAT declined by 20%, primarily due to the current tax impact in this year. What is important to us is not just the headline revenue growth but how we have navigated the cost environment while continuing to build the business. The milk price is at INR 42 per liter during the quarter, 13% higher year-on-year, and flat sequentially. We responded to this through a combination of calibrated price increases, a better product mix, and targeted promotional optimization and acceleration. As a result, the gross profit increased by 11% to INR 258 crore, in line with the overall revenue growth, demonstrating that the cost push has been passed on, and as a result, gross margins remain stable. For us, this is an important aspect of the Parag model. We are not looking at pricing in isolation.

Speaker #4: What is important to us is not just the headline revenue growth, but how we have navigated the cost environment while continuing to build the business.

Speaker #4: Milk prices were at $42 per liter during the quarter, 13% higher year-on-year and flat sequentially. We responded to this through a combination of calibrated price increases, a better product mix, and targeted promotional optimization and acceleration.

Speaker #4: As a result, the gross profit increased by 11% to ₹258 crore in line with the overall revenue growth, demonstrating that the cost push has been passed on and, as a result, gross margins remain stable.

Speaker #4: For us, this is an important aspect of the Parag model. We are not looking at pricing in isolation. We are managing price, product mix, promotion, and category growth, while continuing to protect the health of our overall dairy ecosystem.

Akshali Shah: We are managing price, product mix, promotion, and category growth while continuing to protect the health of our overall dairy ecosystem. Our flagship categories, that is ghee, cheese, paneer, and dahi, continue to form the backbone of the business. They are contributing to 61% of our Q1 revenue. The flagship categories volume declined by 2% year-on-year, mainly due to a transient slowdown. In B2C, within the flagship categories, recorded a robust growth, while the B2B declined modestly. The overall value growth, however, stands at 10% year-on-year. Go Cheese has 35% market share, and we are number 2 in the cheese category in India. We are doubling our cheese production capacity from 60 metric ton per day to 120 metric ton per day over the next one and a half years.

Speaker #4: Our flagship categories—that is, ghee, cheese, paneer, and dahi—continue to form the backbone of the business, contributing to 61% of our Q1 revenue. The flagship categories' volume declined by 2% year-on-year, mainly due to a transient slowdown. But in B2C, within the flagship categories, we recorded a robust growth, while the B2B declined modestly.

Speaker #4: The overall value growth, however, stands at 10% year-on-year. Go Cheese has a 35% market share, and we are number two in the cheese category in India.

Speaker #4: We are doubling our cheese production capacity from 60 metric tons per day to 120 metric tons per day. Over the next one and a half years, with this capacity expansion, we will be able to drive a parallel expansion in our whey protein generation.

Akshali Shah: With this capacity expansion, we will be able to drive a parallel expansion in our whey protein generation. This will enable us to tap the opportunity of both the categories, which is cheese and whey, a step towards becoming a health and nutrition powerhouse. The New Age business, that is Pride of Cows and Avvatar, grew by 59% year-on-year in this quarter, and now contributes to around 13% of our overall revenue, versus 9% in the Q1 last year. This progress is in line with the roadmap that we have laid out for this business. Through these brands, we are building a differentiated presence across premium dairy, health and wellness, sports nutrition, and functional nutrition. Clearly defining and strengthening our right to win in this space. Avvatar is allowing us to build a much broader sports and nutrition functional and nutrition platform.

Speaker #4: This will enable us to tap the opportunity of both categories, which is cheese and whey—a step towards becoming a health and nutrition powerhouse.

Speaker #4: The new-age business—that is, tried-of-cause in Aadhaar—grew by 59% year-on-year in this quarter, and now contributes to around 13% of our overall revenue, versus 9% in Q1 last year.

Speaker #4: This progress is in line with the roadmap that we have laid out for this business. Through these brands, we are building a differentiated presence across premium dairy, health and wellness, sports nutrition, and functional nutrition.

Speaker #4: Clearly defining and strengthening our right to whey in this space. Aadhaar is allowing us to build a much broader sports and nutritional functional and nutrition platform.

Speaker #4: The portfolio has expanded well and beyond the whey protein powders to now a protein bar, to ready-to-drink products created, and other functional and nutrition products.

Akshali Shah: The portfolio has expanded well and beyond the whey protein powders to now protein bars, to ready-to-drink products created, and other functional and nutrition products. The newly launched ready-to-drink Avvatar coffee with 15 grams of protein per serving has received a very encouraging response. During the quarter, we have engaged with one of the most viral shows, which is India's Got Talent Season 2, hosted by Mr. Samay Raina, gave Avvatar a strong disruptive platform. This show has generated more than 80 million unique reach on YouTube and Netflix together. For us, the importance of this association was not the massive media reach, but giving Avvatar the right eyeballs to the relevant targeted audience. As we look ahead, we remain constructive in the upcoming quarters. Milk availability should benefit from the progress of monsoon, and the festive period should provide a supportive demand environment for the value-added categories.

Speaker #4: The newly launched ready-to-drink Aadhaar Coffee, with 15 grams of protein per serving, has received a very encouraging response. During the quarter, we have engaged with one of the most viral shows, which is India's Got Latent Season 2, hosted by Mr. Samay Raina. This gave Aadhaar a strong, disruptive platform.

Speaker #4: This show has generated more than 80 million unique reach on YouTube and Netflix together. For us, the importance of this association was not the massive media reach, but giving Aadhaar the right eyeballs to the relevant targeted audience.

Speaker #4: As we look ahead, we remain constructive in the upcoming quarters. Milk availability should benefit from the progress of monsoons, and the festive period should provide a supportive demand environment for the value-added categories.

Speaker #4: We will, however, continue to maintain our discipline on collaborative pricing in response to commodity costs and promotional investments. In a nutshell, our strategic direction remains very clear.

Akshali Shah: We will, however, continue to maintain our discipline on the collaborative pricing in response to commodity costs and promotional investments. In nutshell, our strategic direction remains very clear. We are strengthening the flagship categories, which is ghee, cheese, paneer, and dahi. We are building New Age through Pride of Cows and Avvatar. We are expanding our manufacturing capabilities well in advance. We are evolving our route-to-market strategy. We are investing behind innovation and brand building. We have the dairy legacy and the farmer connect. We have the dairy legacy, farmer connect, state-of-art facility, the power brands, and our distribution network. We look forward to continue nourishing traditional, delivering nutrition, and continue to build a strong space for us.

Speaker #4: We are strengthening the flagship categories, which are ghee, cheese, paneer, and dahi. We are building new age through Pride of Cows and Aadhaar, we are expanding our manufacturing capabilities well in advance, we are evolving our route to market strategy, and we are investing behind innovation and brand building.

Speaker #4: We have the dairy legacy and the farmer connect. We have the dairy legacy, farmer connect, state-of-the-art facility, the power brands, and our distribution network.

Speaker #4: We look forward to continuing a nourishing tradition, delivering nutrition, and continuing to build a strong space for Parag. With a clear definition, right to win, and a focused roadmap, we will remain aligned in our ambition to strengthen our leadership in the categories we operate in and create sustainable and long-term value for all our stakeholders.

Akshali Shah: With a clear definition right to win and a focused roadmap, we remain aligned in our ambition to strengthen our leadership in categories we operate in and create sustainable and long-term value for all our stakeholders. Thank you once again for the continued trust and confidence in Parag Milk Foods. Over to Brian. Thank you.

Speaker #4: Thank you once again for the continued trust and confidence in Parag Milk Foods. Over to Brian. Thank you.

Speaker #2: Thank you very much, Akshali. We will now begin the question-and-answer session. We will wait for a moment while the question queue assembles.

Rahul Kumar Srivastava: Thank you very much, Akshali. We will now begin with the question and answer session. We will wait for a moment while the question queue assembles.

Brian D'Penha: Thank you very much, Akshali. We will now begin with the question and answer session. We will wait for a moment while the question queue assembles.

Speaker #5: Thank you, Mayor, very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on the desktop telephone.

Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. I request all the participants kindly limit yourself to one question and rejoin the queue for a follow-up. First question is from the line of Kiran from Table Tree Capital. Please go ahead.

Speaker #5: If you wish to remove yourself from the question queue, you may press *2. Participants are requested to use handsets while asking a question.

Speaker #5: I request all the participants to kindly limit yourselves to one question and rejoin the queue for a follow-up. The first question is from the line of Kiran.

Speaker #5: From Table 3, capital—please go ahead.

[Analyst] (Table Tree Capital): Thank you so much, very commendable performance on maintaining our operating margin as well as gross margin. I have a couple of questions. The first question is probably more broader, not with respect to this particular quarter. From March 2023 onwards, over the past 3 years, we've grown by 10% in sales. INR 2,900, INR 3,100, INR 3,400, INR 3,800. Is this a year where Parag is going to break out of the 10% growth band in sales and really grow by 15%? Are we kind of given the slightly muted sales in Q1, do you think we're still going to be a 10% grower in FY27 as well?

Kiran Dhanwada: Thank you so much, very commendable performance on maintaining our operating margin as well as gross margin. I have a couple of questions. The first question is probably more broader, not with respect to this particular quarter. From March 2023 onwards, over the past 3 years, we've grown by 10% in sales. INR 2,900, INR 3,100, INR 3,400, INR 3,800. Is this a year where Parag is going to break out of the 10% growth band in sales and really grow by 15%? Are we kind of given the slightly muted sales in Q1, do you think we're still going to be a 10% grower in FY27 as well?

Speaker #4: Thank you so much, and a very commendable performance maintaining our operating margins as well as gross margins. I have a couple of questions. The first question is probably more broad, not with respect to this particular quarter.

Speaker #4: So from March '23 onwards, over the past three years, we've grown by 10% in sales, right? 2,900, 3,100, 3,400, 3,800. Is this a year where Parag is going to break out of the 10% growth band in sales?

Speaker #4: And really grow by 15%, or are we, given the slightly muted sales in Q1, do you think we're still going to be a 10% grower in the 527 as well?

Speaker #2: Yeah, really very relevant question, because your query is whether we are poised to do more than 10% growth this year. So I would say that certainly it will be more than 10%, because normally the quarter one is quite not that great.

Rahul Kumar Srivastava: Yeah. A very relevant question because your query is whether we are poised to do more than 10% growth this year. I would say that certainly it will be more than 10% because normally the Q1 is quite not that great any year, and as Akshali told that this is the best quarter we had in Q1, having 10% growth. Obviously the Q2 and Q3 with lot of festive season and demand, certainly we are going to grow more than 10%. Certainly this year we'll be breaking this 10% growth benchmark.

Speaker #2: Any year, and we are slightly told that this is the best quarter we had in Q1, having 10% growth. So, obviously, the second quarter and third quarter, with a lot of festive season and demand, certainly we are going to grow more than 10%.

Speaker #2: So, certainly, this year we will be breaking this 10% growth benchmark.

Speaker #4: And also.

[Analyst] (Table Tree Capital): Okay. Perfect.

Kiran Dhanwada: Okay. Perfect.

Speaker #2: Perfect.

Speaker #4: Just to add to what Audrey is speaking, just to add to what Audrey is saying, it is of course the product mix was also very different in FY 23 versus in FY 27.

Akshali Shah: Just to add to what Rajeev is saying, the product mix was also very different in FY23 versus in FY27. We are doing much more value-added products and health and nutrition, especially our New Age business in FY23 was less than 3%, 4%, and today as we speak, we are around 13%. It is about how do we make the most about every liter of milk that is coming in. Now we are selling whey protein, which is somewhere around INR 3,000 to 4,000 in MRP. The value of that is much, far superior, and the product portfolio has also changed from there. Moving forward from here, of course, we are just expecting a better growth in volume and in value.

Akshali Shah: Just to add to what Rahul is saying, the product mix was also very different in FY23 versus in FY27. We are doing much more value-added products and health and nutrition, especially our New Age business in FY23 was less than 3%, 4%, and today as we speak, we are around 13%. It is about how do we make the most about every liter of milk that is coming in. Now we are selling whey protein, which is somewhere around INR 3,000 to 4,000 in MRP. The value of that is much, far superior, and the product portfolio has also changed from there. Moving forward from here, of course, we are just expecting a better growth in volume and in value.

Speaker #4: We're doing much more value-added products and focusing on health and nutrition, especially in our new age business. In FY23, it was less than 3–4%, and today, as we speak, we're at 13%.

Speaker #4: Your sale is about how do we make the most out of every liter of milk that is coming in? Now we're selling whey protein, which is somewhere around 3,000 to 4,000 refills in MRP.

Speaker #4: So the value of that is much superior, and the product portfolio has also changed from there. So, moving forward from here, of course, we're just expecting better growth in volume and in value.

Speaker #4: Got it. Thank you so much for that. My second question, especially on Aadhaar—ma'am, we have grown 58% this quarter year-on-year.

[Analyst] (Table Tree Capital): Got it. Thank you so much for that. My second question on Avvatar especially. Ma'am, we have grown 58% this quarter, year-on-year. Just wanted to kind of get my head around this. Our retail prices of Avvatar and rest of our relevant competition have moved up by 100%, right? The iso concentrate chocolate was INR 2,200, now it is about INR 4,200, roughly there. Because of increased whey prices everywhere, and we wanted to increase to be relevant to the competition. If we have grown by 58%, but the prices have actually doubled in the last 3 to 6 months in terms of retail price that we sell, have we kind of stagnated on volumes, or I am just not able to figure out how that kind of math works.

Kiran Dhanwada: Got it. Thank you so much for that. My second question on Avvatar especially. Ma'am, we have grown 58% this quarter, year-on-year. Just wanted to kind of get my head around this. Our retail prices of Avvatar and rest of our relevant competition have moved up by 100%, right? The iso concentrate chocolate was INR 2,200, now it is about INR 4,200, roughly there. Because of increased whey prices everywhere, and we wanted to increase to be relevant to the competition. If we have grown by 58%, but the prices have actually doubled in the last 3 to 6 months in terms of retail price that we sell, have we kind of stagnated on volumes, or I am just not able to figure out how that kind of math works.

Speaker #4: Just wanted to kind of get my head around this. Our retail prices of Aadhaar and the rest of our relevant competition have moved up by 100%, right?

Speaker #4: So the ISO concentrate chocolate was 2,200, now it's about 4,200, roughly there. Because everywhere, and we wanted to increase to be relevant to the competition.

Speaker #4: So, if you have grown by 58%, but the prices have actually doubled in the last three to six months in terms of the retail price that we sell, have you kind of stagnated on volumes, or am I just not able to figure out how that math works?

Speaker #3: Yeah. Hi. So Kiran, Ankit Desai here. With respect to Aadhaar, while we have reported a new-age business growth of 59%, we also have very strong volume growth as well in the new categories.

Ankit Jain: Hi, Sultha. Kiran, Ankit Desai. With respect to Avvatar, while we have reported a new age business growth of 59%, we have a very strong volume growth as well on the new category. That is why you look at when there is a modest decline of 2% in overall flagship categories, we are able to deliver a 3% volume growth for the company overall. This is mainly coming, of course, from new age business. When you have seen from a consumer lens in terms of the change in the prices, there are various formats of whey protein. For example, there is iso pure, iso rich form of protein, which is more of whey protein isolate. Then there are whey blends, then there is a performance whey, there is fuel whey. There are various categories of protein.

Ankit Jain: Hi, Kiran, Ankit here. With respect to Avvatar, while we have reported a new age business growth of 59%, we have a very strong volume growth as well on the new category. That is why you look at when there is a modest decline of 2% in overall flagship categories, we are able to deliver a 3% volume growth for the company overall. This is mainly coming, of course, from new age business. When you have seen from a consumer lens in terms of the change in the prices, there are various formats of whey protein. For example, there is iso pure, iso rich form of protein, which is more of whey protein isolate. Then there are whey blends, then there is a performance whey, there is fuel whey. There are various categories of protein. When the protein prices switch, all in all, what I am saying is this is not just backed by a value growth.

Speaker #3: That's why, even when there is a modest decline of 2% in overall flagship categories, we are able to deliver a 3% volume growth for the company overall.

Speaker #3: So this is mainly coming of course, from new age business. See, while when you have seen a from a consumer lens in terms of the change in the prices, there are various formats of whey protein for example, there is a ISO pure, ISO rich form of protein, which is more of whey protein isolate.

Speaker #3: Then there are whey blends. Then there is performance whey, there is fuel whey. So there are various categories of protein. When the protein prices switch, we have seen a pattern where consumers also shift themselves to whichever format of protein they want to cater to.

Ankit Jain: When the protein prices switch, all in all, what I am saying is this is not just backed by a value growth.

Speaker #3: But all in all, what I'm saying is this is not just backed by value growth. This is strongly backed by very.

Speaker #4: Okay, so aligned volume growth as well. And as he mentioned, of course, there are newer categories that we've also added, like your ready-to-eat, ready-to-drink, and we also have some protein products which are for beginners, which are at a much lower cost.

Akshali Shah: Aligned volume growth as well. As he mentioned, there of course are newer categories that we've also added, like your ready to eat, ready to drink. We also have some protein, which is for beginners, which is of much lower cost. The prices have really not gone up by 100% for Avvatar. We've taken a very stagnated price increase over the last couple of quarters. The prices have not been that much of a change.

Speaker #4: Plus, the prices have really not gone up by 100% for Aadhaar. We've taken a very staggered price increase over the last couple of quarters.

Speaker #4: So, the prices have not been that much.

Speaker #5: Thank you. Kiran, may I, of course, come back for a follow-up question, please? Thank you. A kind request to all the participants: kindly limit yourself to one question and rejoin for a follow-up.

Operator: Thank you. Kiran, can I request to come back for a follow-up question, please?

Ankit Jain: Sure.

Kiran Dhanwada: Sure.

Operator: Thank you. A kind request to all the participants, kindly limit to one question, and rejoin for a follow-up. The next question is from the line of Kanishk Gupta from SS Family Office. Please go ahead.

Speaker #5: The next question is from the line of Kannish Gupta from SS Family Office. Please go ahead.

Speaker #3: Hello, very good afternoon. My question is on distribution. I have observed that while more of these are widely available, many of our higher-margin, new-age business products like goat cheese, Aadhaar protein bars, and coffee are either unavailable or only partially available in the same stores.

Kanishk Gupta: Hello, very good afternoon. My question is on distribution. I have observed that Govardhan Ghee is widely available, but many of our higher margin new age business products like Go Cheese and Avvatar protein bars and coffee are either unavailable or partially available in the same stores. Could you help us understand what is the primary bottleneck over there?

Speaker #3: So, could you help us understand what the primary bottleneck is over there?

Ankit Jain: What is name?

Speaker #2: What is the name? Kannish. Hi, Kannish. See, actually, if you see our new-age business, like we have Aadhaar protein bar, we have Aadhaar protein ready-to-drink.

Kanishk Gupta: Kanishk.

Ankit Jain: Kanishk. Hi, Kanishk. See, actually, if you see our new age business, like, we have Avvatar protein bar, we have Avvatar protein ready to drink. These are the very channel-specific and outlet-specific products. We know where these products have to be placed. Just to give you a few examples, because one of the largest throughput of these products are vending machines. We have already got into this kind of channel where all the airports or hostels or canteens, we have put these products. Apart from that, we were never present in the channel like pharmacy. There also, these products are quite readily available. We are present in the relevant outlets, which we know that these products are having very good throughput on those outlets, and we are working on those lines, rather than spreading kind of a guerrilla distribution there.

Speaker #2: These are the very channel-specific and outlet-specific products. Like we have and we know that where these products have to be placed. So just to give you two examples, like because one of the largest throughput of these products are vending machines.

Speaker #2: So, we have already gotten into this kind of channel, where all the airports, hostels, or canteens—we have put these products. Apart from that, we were never present in a channel like pharmacy.

Speaker #2: So where there also these products are quite readily available. So we are present in a relevant outlets which we know that these products are having very good throughput on those outlets and we are working on those lines.

Speaker #2: Rather than spreading kind of a guerrilla distribution there.

Speaker #4: That's the coffee category. Really newly launched in this quarter. So, of course, it will take us a good couple of months, a couple of quarters to reach the distribution.

Akshali Shah: As to coffee category-

Kanishk Gupta: Yeah.

Akshali Shah: Really new. Launched it this quarter. Of course, it will take us a good couple of months, a couple of quarters to reach the distribution that we want to achieve.

Speaker #4: That we want to achieve.

Speaker #5: Thank you.

Operator: Thank you.

Speaker #4: Bless U category, like protein, works really well on the quick commerce platform, so we're widely available there.

Akshali Shah: A category like protein works really well on the quick commerce platform, so we're widely available there.

Speaker #3: Yeah, definitely, you have your strategy of placing the products in your strategic stores, but the market leader still has their products available in the same stores when you go over them reselling, and people are still purchasing those products of the market leader.

Kanishk Gupta: Yeah, definitely, you have your strategy of placing the products in your strategic stores, the market leaders still have their products available in the same stores where Gowardhan Ghee is selling, people are still purchasing those products of the market leader for protein bars.

Speaker #3: Of protein bars.

Akshali Shah: We have the same distribution as a never-ending battle, we keep seeing in FMCG. Of course, the point is to revamp distribution as it comes, for not just the length of distribution, but also the depth. We've given a guideline saying that by in the next three years, we want to be available in more than 1.5 million outlets, and we are reaching towards that and just working towards that roadmap.

Speaker #4: We have the same distribution as a never-ending battle. We keep seeing in FMCG, so of course, the point is to revamp distribution as it comes—not just the length of distribution, but also the depth.

Speaker #4: And we've given a guideline saying that in the next three years, we want to be available in more than 1.5 million outlets, and we are reaching towards that.

Speaker #4: And we're working towards that roadmap.

Speaker #5: Thank you. A request to all the participants: please limit yourself to one question per participant. The next question is from the line of Priyanshu Jain from Growth X Infinity.

Operator: Thank you. A request to all the participants: please limit yourself to one question per participant. Next question is from line of Priyanshu Jain from GrowthX Infinity. Please go ahead.

Speaker #5: Please go ahead.

Speaker #6: Hi. Am I audible?

Priyanshu Jain: Hi. Am I audible?

Speaker #5: Yes.

Operator: Yes.

Speaker #6: Yeah. Hi. Hi team. I have a few questions, but mainly on the, as in the initial commentary, the management has said about the very viral show about India’s Got Talent.

Priyanshu Jain: Yeah. Hi team. I have a few questions, mainly, as in the initial commentary the management has said about the very viral show about India's Got Talent. Just wanted to know what is the timeline for this deal which we have done with Mr. Samay Raina, and can you share some data, like in the total sales from our value-added business, how much we are getting from that show, and what is the cash percentage which we are getting, and how much we are spending on this deal? Are we getting a good ROI on the sales which we are getting? These are the questions.

Speaker #6: So just wanted to know that what is the timeline for this deal which we have done with Mr. Samir Ella? And can you share some data like how much like in the total sales from our value-added business, how much we are getting from that show and like what is the cap percentage which we are getting and how much we are spending on this deal?

Speaker #6: We are getting a good ROI on the sales that we are achieving, so that is the question.

Speaker #3: See, brand promotion and brand building is one of the important pillars as we look forward. While we have done participation with KBC as well, all these are purely special commercial deals.

Ankit Jain: See, brand building is one of important pillar as we look forward. While we have done participation with KBC as well, all these are purely special commercial deals. We cannot share the specific nitty-gritties what you are asking about with respect to how much is the cost, how much is the timeline, and how is the ROI. See, overall, as Akshali has said in our opening remarks, that it is not just one of the media reach, but it is more about catching the right eyeballs for the brand so that we can create the brand awareness, and especially for the product categories where we have recently introduced, like Avvatar protein wafer bars and ready-to-drink.

Speaker #3: We cannot share the specific nitty-gritty that you are asking about, with respect to how much is the cost, how much is the timeline, and what is the ROI.

Speaker #3: See, overall, as Akshali has said in our opening remarks, that it is not just one of the media reach. But it is more about catching the right eyeballs for the brand so that we can create the brand awareness and especially for the product categories where we have recently introduced like Aadhaar protein wafer bars and ready-to-drink.

Speaker #3: So, I think the tie-up is more towards catching the right eyeballs, creating awareness, and, of course, as in the previous question, we answered about distribution—how do we increase or expand our distribution so that the product is available at the right time to the consumer.

Ankit Jain: I think the tie-up is more towards catching the right eyeballs, create awareness, and of course, as in the previous question we answered about distribution, how do we increase or expand our distribution so that the product is available at the right time to the consumer. This is all in strategy. We will appreciate that specific commercials will not be disclosed.

Speaker #3: So, this is all in strategy. We would appreciate that specific commercials will not be disclosed.

Speaker #4: Yes. But just to give you a little bit on the numbers aspect—a show like India's Got Talent works really well for awareness, but it will be very difficult to drive what is the sales.

Akshali Shah: Yeah. Just to give you a little bit on the number aspect and a show like India's Got Talent works really well on awareness and it'd be very difficult to drive what is the sales. One of the parameters which we really see is, of course, the traffic on our website and what are the searches on Google. Over the last two months, it's gone up by almost 200%. That's a good overall achievement that we have got here. Thank you.

Speaker #4: But one of the parameters that we really see is, of course, the traffic on our website and what are the searches on Google. And over the last two months, it's gone up by almost 200%.

Speaker #4: So that's a good overall achievement that we've got in. Thank you.

Speaker #5: Thank you. Next question is from the line of Kavina Desai from Sky Ridge Wealth Management. Please go ahead.

Operator: Thank you. Next question is from the line of Kavina Desai from Skyridge Wealth Management. Please go ahead.

Speaker #6: Hello. Am I audible?

Kavina Desai: Hello, am I audible?

Speaker #5: Yes, ma'am.

Operator: Yes, ma'am.

Speaker #6: Thank you for this opportunity, and congratulations on a good set of numbers. I just wanted to ask one question about the 'Other' category. This quarter, you saw a 46% decrease in this category.

Kavina Desai: Thank you for this opportunity, and congratulations on a good set of numbers. Just wanted to ask one question on the other category. This quarter, you have seen a 46% decrease in this category. Can you give some light on this? Because this quarter also was a strong summer, and IDV drinkables and all these sales should have at least been stable, if not higher. If you could throw some light here.

Speaker #6: Can you shed some light on this? Because this quarter was also a strong summer, and ideally, drinkables and all these sales should have at least been stable, if not higher.

Speaker #6: So, if you could throw some light here.

Speaker #3: See, 'Others' is a category whereby—so, I would say you would have noticed that we have renamed the core categories to now 'flagship categories,' which now includes the HE as well.

Ankit Jain: See, others is a category. I would say you would have noticed that we have renamed the core categories to now flagship categories, which now includes dahi as well. That's where a seasonal portion or a significant portion of dahi has moved to flagship categories. With respect to others, currently it comprises of beverages, UHT milk, and miscellaneous other items. You will also appreciate that all the other operating revenues are part of other categories. The other operating revenues primarily also include the income from cattle feed, job processing, as well as the state incentives, the PSI incentive, PLI incentives. These are items which are not on a volume trend, recurring. For example, post the GST changes in September 2025, the PSI income has substantially reduced because the GST rate has changed for GNC's products from 12% to 5%.

Speaker #3: So that's where the seasonal portion, or a significant portion of that, has moved to flagship categories. With respect to others, currently, it comprises beverages, UHT milk, and miscellaneous other items.

Speaker #3: You will also appreciate that all the other operating revenues are part of other categories. The other operating revenues primarily also include the income from cattle feed, job processing, as well as the state incentives—the PSI incentive, PLI—one-off items. These are items which are not on a volume trend, right, they are not recurring.

Speaker #3: For example, the GST is the GST post the GST changes in September 2025. The PSI income has substantially reduced because the GST rate has changed for G and G's products, like from 12% to 5%.

Speaker #3: The state incentive, which is backed by GST, the state GST, has considerably reduced. So, 'Others' is very much on a miscellaneous part. However, within the 'Others' category, we have zero products like UHT beverages, which have done reasonably well.

Ankit Jain: The state incentive, which is backed by the state GST, has considerably reduced. Others is very much on a miscellaneous part. However, within the others category, we have hero products like UHT beverages, which have done reasonably well.

Speaker #5: Thank you. Next question is from the line of Devashish from Ambit Capital. Please go ahead.

Operator: Thank you. Next question is from line of Debashish from Aban Dubai. Please go ahead.

Operator: Thank you. Next question is from line of Debashish from Abaan Dubai. Please go ahead.

Speaker #6: Yeah. My question is on the on the operating margin. You know, I'm giving two data points. So first is like Akshali said, that our contribution from US has moved from 3% to 12,000%.

[Analyst] (Aban Dubai): Yeah. My question is on the operating margin. I'm giving two data points. First is, like Akshali said, that our contribution from New Age has moved from 3% to 12% and 13%. There in the previous conf call, we heard that the margins here is double than the core category. My question is, this is one data point. Second data point is, in the previous conf call, we also said that we are premium to Amul. Also we said inflation sales are coming down. My question is that, we are in the business of brands, why are we not able to pass on the price increase because of inflation, even with the timeline? I'm talking two years. Why our operating margin is not increasing? We are the only one who are spending so much on media.

Debashish Neogi: Yeah. My question is on the operating margin. I'm giving two data points. First is, like Akshali said, that our contribution from New Age has moved from 3% to 12% and 13%. There in the previous conf call, we heard that the margins here is double than the core category. My question is, this is one data point. Second data point is, in the previous conf call, we also said that we are premium to Amul. Also we said inflation sales are coming down. My question is that, we are in the business of brands, why are we not able to pass on the price increase because of inflation, even with the timeline? I'm talking two years. Why our operating margin is not increasing? We are the only one who are spending so much on media. There's no equivalent anyone in the competition who is doing this. Why your operating margin is stagnant for so many quarters around the same range?

Speaker #6: And there, in the previous phone call, we heard that the margin here is double than the core category. So, my question is, this is one data point.

Speaker #6: Second data point is, in the previous phone call we also said that we are premium to Amul, and then also we said institution sales are coming down.

Speaker #6: So, my question is: why are we in the business of brands? Why are we not able to pass on the price increase because of inflation?

Speaker #6: Even with the timeline, you know, I'm talking two years. Why are operating margins not increasing? And we are the only ones who are spending so much on media.

Speaker #6: There's no equivalent—no one in the competition is doing this. So, why are operating margins stagnant for so many quarters, around the same range?

[Analyst] (Aban Dubai): There's no equivalent anyone in the competition who is doing this. Why your operating margin is stagnant for so many quarters around the same range?

Speaker #3: Hi Devashish. So, with respect to gross margin, if you were to look at it sequentially—from 28% to now 27.3%—we are almost 70 basis points down, approximately.

Ankit Jain: Hi, Debashish. With respect to gross margin, if you were to look at sequentially, which is from 28% to now 27.3%, we are almost 70 basis down approximately. If you would observe that milk prices increase, we are not in a business where we do not sell only the milk. We sell more of a value-added product. If you look at Q3, the milk prices was INR 40, while in Q4, the milk prices was INR 42. There is always a lag considering the kind of inventory, the weighted average cost of the inventory which we carry. However, in Q1 of current financial year, the full quarter had seen a INR 42 of milk price versus the previous quarter of INR 42. The increase goes for the full absorption of this quarter as well.

Speaker #3: If you would observe that, see, milk prices increase, but we are not in the milk price — in a business where we do not sell only the milk.

Speaker #3: So, we sell more of a value-added product. If you look at Q3, the milk price was ₹40, while in Q4, the milk price was ₹42.

Speaker #3: So there is always a lag, considering the kind of inventory and the weighted average cost of the inventory which we carry. However, in quarter one of the current financial year, the full quarter had seen a 42-rupee milk price versus the previous quarter of 42 rupees.

Speaker #3: So, the increase goes for the full absorption of this quarter as well. Now, while your observation is right, when the new product portfolio mix has—sorry—new age portfolio mix has improved, yes, it has improved, but it has correspondingly got offset with the increase in the impact on the milk prices.

Ankit Jain: Now while your observation is right, when the new product portfolio mix has, new age portfolio mix has improved. Yes, it has improved, but it has correspondingly got offset with the increase in the impact on the milk prices. Having said that, as she has actually rightly mentioned that even going ahead, we are looking at calibrated price increases. Even in Q1, towards the second half of the Q1, we have taken up prices again further in ghee. We have revisited prices recently for even new age business as well. This will be a continuous exercise whereby we try to keep the blended portfolio in a certain way, and we don't absolutely increase or pass on the cost push.

Speaker #3: Having said that, as she as Akshali rightly mentioned that even going ahead, we are looking at calibrated price increases. So even in quarter one, we have towards the frag end of the quarter one, we have taken up prices again further in ghee.

Speaker #3: And we have revisited prices recently for even new-age businesses as well. So, this will be a continuous exercise, whereby we try to keep the blended portfolio in a certain way, and we don't absolutely increase or pass on the cost push.

Speaker #3: On a weighted average portfolio level, if you look at year-over-year, if the sales growth is 11% and gross margin growth is 11%, this clearly demonstrates that the entire cost push has been passed on as a blended portfolio.

Ankit Jain: On a weighted average portfolio level, if you look at Y-o-Y, if the sales growth is 11%, gross margin growth is 11%, this clearly demonstrates that the entire cost push has been passed on as a blended portfolio. Having said that, the benefit of mix should arrive, what is your aspiration or even what is our aspiration. It is a combined effect. We cannot just look at one product in isolation. Cheese and whey go hand in hand, same as ghee or SMP or WMP. I hope this answers.

Speaker #3: Having said that, the benefit of mix should arrive—what is your aspiration, or even what is our aspiration? It is a combined effect. We cannot just look at one product in isolation.

Speaker #3: Cheese and whey go hand in hand, same as ghee or SMP or WMP. I hope this answers.

Speaker #5: Thank you. Next question is from the line of Viraj from Enigma Investment Partners. Please go ahead.

Operator: Thank you. Next question is from Nayana Viraaj, from Enigma Investment Partners. Please go ahead.

Operator: Thank you. Next question is from the line of Viraj, from Enigma Investment Partners. Please go ahead.

Speaker #6: Yeah, hi team. My question is for Rahul. Rahul, if you look at the distribution expansion that we have talked about post your joining, and the team that you have hired, and we have gone into newer cities in South India where we were not present, and going into some of the other markets where we were lacking, and in spite of that, our core categories have declined in volume.

Nayana Viraaj: Yeah. Hi, team. My question is for Rahul. Rahul, if you look at the distribution expansion that we have talked about post your joining, and the team that you have hired, and we have gone into newer cities in South India, where we were not present, and going into some of the other markets where we were lacking. In spite of that, our core categories have declined in volume, which is not the case for some of the other players. I just want to understand the dichotomy that in spite of increasing this reach, it's not kind of rectifying for our core category volume growth. What's your thinking? How do we catch up to grow at least 8%, 10% volume every year? What is it going to take for your team to get it done?

Viraj Mehta: Yeah. Hi, team. My question is for Rahul. Rahul, if you look at the distribution expansion that we have talked about post your joining, and the team that you have hired, and we have gone into newer cities in South India, where we were not present, and going into some of the other markets where we were lacking. In spite of that, our core categories have declined in volume, which is not the case for some of the other players. I just want to understand the dichotomy that in spite of increasing this reach, it's not kind of rectifying for our core category volume growth. What's your thinking? How do we catch up to grow at least 8%, 10% volume every year? What is it going to take for your team to get it done?

Speaker #6: Which is actually slightly, which is not the case for some of the other players. So, I just want to understand the dichotomy: in spite of increasing this reach, it's not really rectifying our core category volume growth.

Speaker #6: So, what's your thinking? How do we catch up to, you know, grow at least 8–10 percent volume every year? And what is it going to take for your team to get it done?

Speaker #3: Hi Viraj.

Ankit Jain: Hi, Viraaj.

Rahul Kumar Srivastava: Hi, Viraj.

Speaker #6: Hi.

Speaker #3: So just to just to yeah, just to answer your very specific question on the distribution and the, you know, core category growth. So just like to clarify that, you know, when you talk about core category, it is consists of both B2C and B2B.

Nayana Viraaj: Hi.

Viraj Mehta: Hi.

Ankit Jain: Just to answer your very specific question on the distribution and the core category growth. Just like to clarify that when you talk about core category, it consists of both B2C and B2B. Our main distribution expansion is basically created for more growth in B2C, which is already there. There we are not de-growing. Let's be correct on that. We are not de-growing on the B2C part of the total business. Though B2B, we have to maintain our profitability and all these things. Sometimes we forego some volumes from the few customers which are negotiating very hard, and we don't go to that kind of pricing to maintain our profitability. That is the only thing.

Rahul Kumar Srivastava: Just to answer your very specific question on the distribution and the core category growth. Just like to clarify that when you talk about core category, it consists of both B2C and B2B. Our main distribution expansion is basically created for more growth in B2C, which is already there. There we are not de-growing. Let's be correct on that. We are not de-growing on the B2C part of the total business. Though B2B, we have to maintain our profitability and all these things. Sometimes we forego some volumes from the few customers which are negotiating very hard, and we don't go to that kind of pricing to maintain our profitability. That is the only thing.

Speaker #3: So our main distribution expansion is basically created for more growth in B2C, which is already there, where we are not degrowing.

Speaker #3: Let's be correct on that. We are not degrowing on the B2C part of the total business. Though B2B, you know, we have to maintain our profitability and all these things.

Speaker #3: So, sometimes we forgo some volumes from the few customers who are negotiating very hard, and we don't go to that kind of pricing, to maintain our profitability.

Speaker #3: So that is the only thing. So, overall, there might be a degrowth of minus 2 percent, but we don't have any degrowth in the B2C category, which is basically arising from our better distribution in the existing market as well as new markets.

Ankit Jain: Overall, there might be a de-growth of -2%, we don't have any de-growth in B2C category, which is basically arising from our better distribution in the existing market as well as new markets.

Rahul Kumar Srivastava: Overall, there might be a de-growth of -2%, we don't have any de-growth in B2C category, which is basically arising from our better distribution in the existing market as well as new markets.

Speaker #6: Sure. Sure, Rahul. Thank you so much.

Nayana Viraaj: Sure, Rahul. Thank you so much.

Viraj Mehta: Sure, Rahul. Thank you so much.

Speaker #3: Thank you. Thank you, Viraj.

Ankit Jain: Thank you, Viraaj.

Rahul Kumar Srivastava: Thank you, Viraj.

Speaker #5: Thank you. Next question is from Nandanil Desai from Total Capital Investments. Please go ahead.

Operator: Thank you. Next question is from Dhanil Desai from Total Capital Investments. Please go ahead.

Operator: Thank you. Next question is from Dhwanil Desai from Turtle Capital Investments. Please go ahead.

Speaker #6: Oh, hi. Good afternoon, everyone. I'm kind of digging a bit deeper into the earlier participant's question. I think in the last two quarters, we have seen some softening of the volume growth in the core categories.

Dhanil Desai: Hi, good afternoon, everyone. I'm kind of digging a bit deeper on the earlier participant's question. I think last 2 quarters, we've seen a kind of softening of the volume growth in the core categories, and you said that largely it is coming from the B2B side of it. One, if you can help us understand how the B2C part is kind of growing in terms of volumes. Is it that we want to kind of cede some space in the B2B side because of the pricing pressure or not enough margin being there? Will this trend continue? Will we be back to the double-digit aspiration of volume growth?

Dhwanil Desai: Hi, good afternoon, everyone. I'm kind of digging a bit deeper on the earlier participant's question. I think last 2 quarters, we've seen a kind of softening of the volume growth in the core categories, and you said that largely it is coming from the B2B side of it. One, if you can help us understand how the B2C part is kind of growing in terms of volumes. Is it that we want to kind of cede some space in the B2B side because of the pricing pressure or not enough margin being there? Will this trend continue? Will we be back to the double-digit aspiration of volume growth? In the core category, if you can dwell into it more on that will be very helpful.

Speaker #6: And you said that, largely, it is coming from the B2B side of it. So, one, if you can help us understand how the B2C part is growing in terms of volumes, and is it that we want to kind of, you know, cede some space in the B2B side because of the pricing pressure or not enough margin being there?

Speaker #6: Will this trend continue? You know, will we be back to the double-digit aspiration of volume growth in the core category? If you can dwell more on that, that would be very helpful.

Rahul Kumar Srivastava: In the core category, if you can dwell into it more on that will be very helpful.

Speaker #3: See, when we look at business as a whole, both B2B and B2C are a reality, and one business. What Rahulji just mentioned with respect to B2C growth, his he's absolutely correct because the volume growth in B2C per se has grown significantly because there are one of we are not here to name certain customer specific profile or certain channel where we have taken certain stringent action.

Ankit Jain: When we look at business as a whole, both B2B and B2C are a reality and one business. What Rahul just mentioned with respect to B2C growth, he is absolutely correct because the volume growth in B2C per se has grown significantly because we are not here to name certain customer-specific profile or certain channel, where we have taken certain stringent action. That is where, if you look at, we have categorized this more as a transient slowdown in specific channel, so that we remain stuck to our, you can say, pricing, so that we do not get down to what is the requirement by the other channel or other specific chain. This is broadly the thing.

Speaker #3: So that's where, if you look at it, we have categorized this more as a transient slowdown in certain, in specific channels. So that we remain, we remain stuck to our, you can say, pricing so that we don't, we don't get down to what is the requirement by the other channel or other specific chain.

Speaker #3: So this is broadly the thing. I will not be able to share specifically the specific number, but, on a guidance, I can definitely share that the B2C category in core categories has grown towards high single digits or close to double digits.

Ankit Jain: I will not be able to share specifically the specific number, but on a guidance, I can definitely share that the B2C category in core categories has grown towards high single digit or close to double digits.

Speaker #5: Thank you. Next question is from the line of Ropali. From Arthur Spencer, please go ahead.

Operator: Thank you. Next question is from line of Rupal from RKSV. Please go ahead.

Operator: Thank you. Next question is from line of Rupal from [RKSV]. Please go ahead.

Speaker #4: Hello.

[Analyst] (RKSV): Hello.

[Analyst 1]: Hello.

Speaker #5: Yes. Sorry, go ahead. Yes.

Rahul Kumar Srivastava: Yes. Rupal, sorry, go ahead. Yes.

Speaker #4: Yeah, so actually I just wanted to check—am I audible? Hello?

[Analyst] (RKSV): Yeah. Actually, Am I audible? Hello.

[Analyst 1]: Yeah. Actually, Am I audible? Hello.

Speaker #5: Yes, Rupal, go ahead.

Rahul Kumar Srivastava: Yes, Rupal. Go ahead.

Speaker #4: Yeah, all right. So I just wanted to know, has the price increase recently happened, as we said—a 35% kind of increase in our New Age business, especially the Avata Reproducing site?

[Analyst] (RKSV): Yeah. All right. Just wanted to know, does the price increase has recently happened, as we said, 35% kind of increase in our new age business, especially out of our whey protein side. Will it directly hit our PBT levels because we are kind of backward integrated in our whey production? The price increase in the whey protein market, is it structural or is it temporary?

[Analyst 1]: Yeah. All right. Just wanted to know, does the price increase has recently happened, as we said, 35% kind of increase in our new age business, especially out of our whey protein side. Will it directly hit our PBT levels because we are kind of backward integrated in our whey production? The price increase in the whey protein market, is it structural or is it temporary?

Speaker #4: So, will it directly hit our PBT levels because we are kind of backward integrated in our whey production? And the price increase in the whey protein market, is it structural or is it temporary?

Speaker #3: So globally, the way protein demand has increased exponentially—you know the reasons, because of this fat reduction. You know, medicines are there, and after that, a lot of protein is recommended to eat.

Rahul Kumar Srivastava: Globally, the whey protein demand has increased exponentially. As you know the reasons, because of this fat reduction, medicines is there, and after that, lot of protein is recommended to eat. Across US and Europe, the demand has increased. Here also. I would say it's not a temporary, it will be a kind of a futuristic kind of demand-supply gap in our protein segment. Thank you. Next question is from line of Anubhav Goel from Cosma Ventures. Please go ahead.

Speaker #3: So, across the US and Europe, the demand has increased, so here also. So I would say it's not temporary; it will be a kind of, you know, a futuristic kind of demand-supply gap.

Speaker #3: In our protein segment.

Speaker #5: Thank you. Next question is from the line of Anubhav Goel from Cosma Ventures. Please go ahead.

Operator: Thank you. Next question is from line of Anubhav Goel from Cosma Ventures. Please go ahead.

Speaker #6: Yeah, I just want to congratulate the team on the good efforts on brand building for Pride of Cows. So, my question is, if I caught it right, you mentioned on the B2C side, we saw a high single-digit growth.

Anubhav Goel: Yeah. I just want to congratulate the team on good efforts on brand building for the Pride of Cows. My question is, if I got it right, you mentioned on the B2C side, we saw a high single-digit growth. Is that the growth rate we should expect for the flagship part of the portfolio? Because my understanding was these are categories growing double-digit in volume for organized players. Like I think paneer has been growing 15% to 20%. Is it also a reflection that a large part of the portfolio is ghee and then cheese, and paneer and dahi are very, very small?

Speaker #6: So is that the growth rate we should expect for the flagship part of the portfolio? Because my understanding was these are categories growing double-digit in volume for organized meals.

Speaker #6: Like, I think paneer has been growing 15–20 percent. So is it also a reflection that a large part of the portfolio is ghee, and then cheese and paneer and dahi are very, very small?

Ankit Jain: See, ghee, cheese, paneer, and dahi, I'm not giving you a breakup in terms of what is the composition within the flagship categories. All in B2C categories, all the portfolio is growing and growing very fast. As you rightly mentioned specifically on paneer, that yes, it is growing in double-digits. We are seeing that at an overall flagship categories, we have grown specifically in B2C category at a very high single-digit. The aspiration is to, of course, grow double-digit. We are working on it, and that's where you see we are taking conscious effort. It is not that B2B we will not entertain. See, we are here for being present across the spectrum. We will be there in B2B as well as B2C.

Speaker #3: See, ghee, cheese, paneer, dahi—I'm not giving you a breakup in terms of what is the composition within the flagship categories. But all in B2C categories, all the portfolio is growing.

Speaker #3: And growing very fast. As you rightly mentioned, specifically on paneer, yes, it is growing in double digits. So, we are seeing that across our overall flagship categories, we have grown, specifically in the B2C category, at a very high single digit.

Speaker #3: The aspiration is to, of course, grow double digit. We are working on it, and that's where you see we are taking conscious efforts. But it is not that B2B— we will not entertain B2B.

Speaker #3: See, we are here to be present across the spectrum. So, we will be there in B2B as well as B2C. The idea of updating specific numbers on the B2C category was that the primary focus is, of course, the consumer who is directly picking your brand.

Ankit Jain: The idea of updating specific numbers on B2C category was that the primary focus is, of course, the consumer who is directly picking your brand. With that perspective, I think when it is growing towards a very high single-digit or maybe towards the double-digit growth, that is a reasonable growth, which we had witnessed even last year. On overall basis, full year, we had an 8% volume growth on our core categories when we had reported last year. If you look at YTD December, it was almost as high as 12% volume growth. There are certain channels, there are certain specific chains which are more on pricing, which is make or break on a deal. We will like to hold ourselves instead of just pushing for volumes or just getting the revenue, we would not like to go for dilution in margin.

Speaker #3: So, with that perspective, I think when it is growing towards a very high single digit or maybe towards the double digit growth, that is a reasonable growth which we had witnessed even last year.

Speaker #3: On an overall basis, for the full year, we had an 8 percent volume growth in our core categories when we reported last year. If you look at year-to-date December, it was almost as high as 12 percent volume growth.

Speaker #3: There are certain channels, there are certain specific chains which are more, you know, more on pricing, which is make or break on a deal.

Speaker #3: So, we would like to hold ourselves instead of just pushing for volumes or just getting the revenue. We would not like to go for dilution in margin.

Speaker #3: So that will be our focus. Profitability remains our key focus.

Ankit Jain: That will be our focus. Profitability remains our key focus.

Speaker #5: Thank you. Next question is from line of Arya Shah. From Wealth Guardian Services, please go ahead.

Rahul Kumar Srivastava: Thank you. Next question is from line of Arya Shah from Wealth Guardian Services. Please go ahead.

Operator: Thank you. Next question is from line of [Arya Shah] from Wealth Guardian Services. Please go ahead.

Speaker #7: Thank you so much for the opportunity. We believe that our margins are lower than competitors due to two key reasons. One, on the procurement side, 60% of our milk procurement is from agents.

Arya Shah: Thank you so much for the opportunity. We believe that our margins are lower against competitors due to two key reasons. One on the procurement side, 60% of our milk procurement is from agents, and on the revenue side, 35% of our revenue is from B2B. How do you see both of these improving over the next three to five years? Also on the bookkeeping side, the other income has been spiking every alternate quarter. What is driving this, and what should we expect as a normalized base? Thank you.

[Analyst] (Wealth Guardian Services): Thank you so much for the opportunity. We believe that our margins are lower against competitors due to two key reasons. One on the procurement side, 60% of our milk procurement is from agents, and on the revenue side, 35% of our revenue is from B2B. How do you see both of these improving over the next three to five years? Also on the bookkeeping side, the other income has been spiking every alternate quarter. What is driving this, and what should we expect as a normalized base? Thank you.

Speaker #7: And on the revenue side, 35% of our revenue is from B2B. So, how do you see both of these improving over the next three to five years?

Speaker #7: And also, on the bookkeeping side, the other income has been spiking every alternate quarter. So, what is driving this, and what should we expect as the normalized pace?

Speaker #7: Thank you.

Speaker #3: So, Arya, to answer the first part of your question about the breakup of our own procurement as well as procurement from agents: for your information, the landing price to our dairy for both is the same.

Ankit Jain: Arya, to answer the first part of the question about this procurement breakup of our own procurement as well as from the agents. For your information, the landing price to our dairy for both are same. We don't have very much difference between what we procure ourselves and what we buy from the aggregators. At that level, we don't have much difference, just to be very clear on this. What was the second? The second question is, as compared to other listed players, they've observed that our EBITDA or gross margins are lower. See, gross margin is more from accounting perspective. I'm not commenting in terms of what kind of costs somebody is accounting. We can tell you from our perspective.

Ankit Jain: [Arya], to answer the first part of the question about this procurement breakup of our own procurement as well as from the agents. For your information, the landing price to our dairy for both are same. We don't have very much difference between what we procure ourselves and what we buy from the aggregators. At that level, we don't have much difference, just to be very clear on this. What was the second?

Speaker #3: So we don't have much difference between what we procure ourselves and what we buy from the aggregators. So, at that level, we don't have much difference.

Speaker #3: Just to be very clear on this, what was the second?

Speaker #6: The second question is, as compared to other listed players, we have observed that they have observed that our EBITDA or gross margins are lower.

Rahul Kumar Srivastava: The second question is, as compared to other listed players, they've observed that our EBITDA or gross margins are lower. See, gross margin is more from accounting perspective. I'm not commenting in terms of what kind of costs somebody is accounting. We can tell you from our perspective.

Speaker #6: See, gross margin is more from an accounting perspective. I'm not commenting in terms of what kind of costs somebody is accounting. We can tell you from our perspective, we have been accounting all the costs pertaining to procurement—which is the landed milk cost, landed at the factory gate—as a part of our cost of procurement.

Ankit Jain: We have been accounting all the costs pertaining to the procurement, which is the milk cost landed at the factory gate as a part of our cost of procurement. Thereby, the gross margins are there. It is always a like-to-like comparative, whether you look at last quarter or the sequential quarter, et cetera. That's our accounting framework. However, with respect to EBITDA margins, you will know that there are a couple of reasons, there are a couple of differences, which are quite evident that we spend very heavy on brand building. I'm again here not comparing what has happened to Q1 for many other players in terms of this YOY change in the gross margin profile or even the EBITDA profile. For us, we have been able to maintain it, sustain it, and we have held it.

Rahul Kumar Srivastava: We have been accounting all the costs pertaining to the procurement, which is the milk cost landed at the factory gate as a part of our cost of procurement. Thereby, the gross margins are there. It is always a like-to-like comparative, whether you look at last quarter or the sequential quarter, et cetera. That's our accounting framework. However, with respect to EBITDA margins, you will know that there are a couple of reasons, there are a couple of differences, which are quite evident that we spend very heavy on brand building. I'm again here not comparing what has happened to Q1 for many other players in terms of this YOY change in the gross margin profile or even the EBITDA profile. For us, we have been able to maintain it, sustain it, and we have held it.

Speaker #6: And thereby, the gross margins are there. So it is always a like-to-like comparison, whether you look at the last quarter or the sequential quarter, etc.

Speaker #6: That's our accounting framework. However, with respect to EBITDA margins, you will know that there are a couple of reasons there are a couple of differences which which are quite evident that we spend very heavy on brand building I'm again here not comparing what has happened to Q1 for many other players in terms of the why why change in the gross margin profile.

Speaker #6: But even the EBITDA profile—for us, we have been able to maintain it, sustain it, and we have held it. So, for example, on a consolidated basis, we have an EBITDA margin of 7.4 percent versus 7.7 percent, which is pretty stable, without commenting on how other companies have performed.

Ankit Jain: For example, on a consolidated basis, we have EBITDA margin of 7.2% versus 7.7%, which is pretty stable, without commenting upon how other companies have gone. Please appreciate that we continue to remain invested in terms of brand building. We have the presence pan-India. We have a distribution network pan-India. Based on that, all our supply chain costs, et cetera, is part of the same. Having said that, Q1 is always typically for us, is a little lower as compared to Q2 or Q3, primarily because of the festive. The absorption of the fixed overheads is relatively on a lower base. But that's reality. That will be there for even the last year's Q1 as well. On a like-to-like basis, I would like to only reserve my comment that our margins have remained pretty stable towards 7.4%, and that's all.

Rahul Kumar Srivastava: For example, on a consolidated basis, we have EBITDA margin of 7.2% versus 7.7%, which is pretty stable, without commenting upon how other companies have gone. Please appreciate that we continue to remain invested in terms of brand building. We have the presence pan-India. We have a distribution network pan-India. Based on that, all our supply chain costs, et cetera, is part of the same. Having said that, Q1 is always typically for us, is a little lower as compared to Q2 or Q3, primarily because of the festive. The absorption of the fixed overheads is relatively on a lower base. But that's reality. That will be there for even the last year's Q1 as well. On a like-to-like basis, I would like to only reserve my comment that our margins have remained pretty stable towards 7.4%, and that's all.

Speaker #6: So, please appreciate that we continue to remain invested in terms of brand building. We have a presence pan-India. We have a distribution network pan-India.

Speaker #6: So, based on that, all our supply chain costs, etc., are part of the same. And, having said that, quarter one is always typically a little lower for us as compared to quarter two or quarter three.

Speaker #6: Primarily because of the festive season. So, the absorption of the fixed overheads is relatively on a lower base. But that's the reality—that will be there even for the past last year, quarter one, as well.

Speaker #6: So, on a like-to-like basis, I would like to only reserve my comment that our margins have remained pretty stable at around 7.4%.

Speaker #6: And that's a that's all.

Speaker #5: Thank you. Next question is from the line of Vinod Krishna from Amendas Wealth. Please go ahead.

Operator: Thank you. Next question is from the line of Vinod Krishna from Amadeus Wealth. Please go ahead.

Operator: Thank you. Next question is from the line of Vinod Krishna from Avendus Wealth. Please go ahead.

Speaker #3: Am I audible? So, B2B—you said some channels we are losing because of pricing. Is it because some other players are getting in? Is it because of competitive pressures, or something else? And how confident are you that we can grow our B2B cheese business and maintain our market shares?

Vinod Krishna: Am I audible?

Operator: Yes.

Vinod Krishna: B2B, you said some channels we are losing because of pricing. Is it because some other players are getting in? Is it because of competitive pressures? How confident are you that we can grow our B2B cheese and maintain our market shares? If you can, because it's mostly a three, four-player market, right? Somebody is so particular on pricing, are they giving it to somebody else? Is competition price-cutting?

Speaker #3: And if you can, because mostly it's a three- or four-player market, right? So if somebody is so particular on pricing, are they giving it to somebody else?

Speaker #3: And is competition price-cutting? Like, is that happening?

Speaker #6: Yeah. Again, it is about detailing to a very high level. See, over the call, we have shared the details that yes, B2C has grown.

Ankit Jain: Yeah, again, it is about detailing to a very high detail. See, over the call, we have shared the details that, yes, B2C has grown decent for the flagship categories. Beyond this, we will not be able to share specific that which chain or which channel or what is this transient slowdown. Please appreciate the fact that while we can share the details, it will not be fair and appropriate, and hence we reserve our comment. But to just give you confidence with respect to the brand, the core categories are performing well when overall in B2C. B2B is more of dealings, which happens on a quarterly basis or on a monthly contract basis. These come and go. We are there to hold ourselves not to just get swayed with respect to too much heavy discounting, et cetera.

Speaker #6: We sent for the flagship categories. Beyond this, we will not be able to share specifics, such as which chain or which channel, or what is this transient slowdown.

Speaker #6: Please appreciate the fact that, while we can share the details, it would not be fair or appropriate; and hence, we reserve our comment. But, just to give you some confidence with respect to the brand, the core categories are performing well.

Speaker #6: When overall, in B2C, B2B is more about dealings that happen on a quarterly basis or on a monthly contract basis. So these come and go.

Speaker #6: We are there to hold ourselves, not to just get swayed by too much heavy discounting, etc. So, we will continue to ensure that overall profitability is not impacted for the organization.

Ankit Jain: We will continue to ensure that overall profitability is not impacted for the organization, and we uphold or rather improve upon our profitability. Consolidate to ensure that profitability is maintained.

Speaker #6: And we uphold, or rather improve upon, our profitability.

Speaker #3: The concierge called to ensure that profitability is maintained.

Speaker #5: Thank you. Next question is from the line of Ashish Kumar Singh from Arthos Finserv. Please go ahead.

Operator: Thank you. Next question is from the line of Ashish Kumar Singh from RKS Sensoft. Please go ahead.

Operator: Thank you. Next question is from the line of Ashish Kumar Singh from Arthos Finserv. Please go ahead.

Speaker #4: Hello, sir. We have noticed that your prices have increased from ₹2,500 per kg to around ₹3,400 per kg last month. So, my first question is: Will that increase directly impact your PBTs?

Ashish Kumar Singh: Hello, sir. We have noticed that your prices have increased from 2,500 per kg to 3,100 per kg last month. My first question would be if that increase would be directly hitting your PBTs because we are backward integrated. Also, can you tell us the total cost of production per kg?

Speaker #4: Because we are network integrated. Also, can you tell us the total cost of production for the week, by kilogram?

Speaker #3: So Ashish, we don't disclose the cost of production, as we know that we have some, you know, we have our own, this thing, you know, backward integration for the way raw material.

Rahul Kumar Srivastava: Ashish, we don't disclose the cost of production. As you know that we have our own backward integration for the raw material, normally we don't disclose the cost of production.

Speaker #3: But normally, we don't disclose the cost of production.

Speaker #4: Okay. So, the increasing price would directly be hitting the profit before tax? Would that, or can that, be disclosed?

Ashish Kumar Singh: Okay, the increase in price would directly be hitting the Profit Before Tax. Can that be disclosed?

Speaker #6: To be transparently disclosed, the milk prices at what rate we have purchased the milk, with respect to how much, what is the weighted average cost in the inventory for a specific product, etc.—these are quite a lot of details which are there as part of the financials or as part of the accounts.

Ankit Jain: We transparently disclose the milk prices, at what rate we have purchased the milk. With respect to what is the weighted average cost in the inventory for specific product, etc. These are quite a lot detailing, which is there as part of the financials or as part of the accounts, these are normally not disclosed. You need to look at instead of focusing on what is the cost, because each product will have different costs. Ghee and cheese are not comparable. Hence, I would like to, as Rahul ji said, we do not share cost of production for each product or each product category, etc. The dissection of the revenue we share to the greatest possible detail so that we give a transparent and fair disclosure on to the dissection of the revenue.

Ankit Jain: We transparently disclose the milk prices, at what rate we have purchased the milk. With respect to what is the weighted average cost in the inventory for specific product, etc. These are quite a lot detailing, which is there as part of the financials or as part of the accounts, these are normally not disclosed. You need to look at instead of focusing on what is the cost, because each product will have different costs. Ghee and cheese are not comparable. Hence, I would like to, as Rahul just said, we do not share cost of production for each product or each product category, etc. The dissection of the revenue we share to the greatest possible detail so that we give a transparent and fair disclosure on to the dissection of the revenue.

Speaker #6: But these are normally not disclosed. So you need to look at, instead of focusing on what is the cost, because each product will have a different cost.

Speaker #6: G or cheese are not comparable. So or so hence, I would like to as Raulji said, we do not share cost of production for each product or each product category, etc.

Speaker #6: So, the dissection of the revenue is shared in the greatest possible detail, so that we give a transparent and fair disclosure on the dissection of the revenue.

Speaker #6: But on the margin piece, it is more of a blended approach. And we should appreciate that with a blended portfolio, we have been able to deliver what we have delivered.

Ankit Jain: On the margin piece, it is more of a blended approach, and we should appreciate that a blended portfolio we are able to deliver what we have been able to give.

Speaker #5: Thank you. Next question is from the line of Ajay Chaudhary from AKC Capital. Please go ahead.

Operator: Thank you. Next question is from line of Ajay Chaudhary from AKC Capital. Please go ahead.

Operator: Thank you. Next question is from line of [Ajay Chaudhary from AKC Capital]. Please go ahead.

Speaker #3: Hello. Am I audible?

Ajay Chaudhary: Hello. Am I audible?

[Analyst 2]: Hello. Am I audible?

Speaker #5: Good, sir. Yes, sir.

Ashish Kumar Singh: Good, sir. Yes, sir.

Operator: Good, sir. Yes, sir.

Speaker #3: Actually, two years ago, you talked about your investment in renewable energy, like solar projects and other things. But then you never updated us on those things.

Ajay Chaudhary: Actually, two years ago, you talked about your investment in renewable energy like solar projects and other things. You never updated on those things like what is the cost savings because of those investments. Could you please update on that?

[Analyst 2]: Actually, two years ago, you talked about your investment in renewable energy like solar projects and other things. You never updated on those things like what is the cost savings because of those investments. Could you please update on that?

Speaker #3: Could you please update us on the cost savings achieved as a result of those investments?

Speaker #7: Your voice is coming through a little muffled. Can you please repeat your question?

Akshali Shah: Your voice is coming a little muffled. Can you please repeat your question?

Speaker #3: Sure. Just one second. Just a few years ago, you guys did some investments in renewable energy, for example, solar projects. Maybe the number was roughly ₹50 crore or something.

Ajay Chaudhary: Sure. Just one second. Just a few years ago, you guys did some investments in renewable energy, for example, solar projects. Maybe the number was roughly INR 50 crores or something. I haven't seen any update based on that, like what kind of cost savings you have had after those investments. What is the recurring savings because of those investments?

[Analyst 2]: Sure. Just one second. Just a few years ago, you guys did some investments in renewable energy, for example, solar projects. Maybe the number was roughly INR 50 crores or something. I haven't seen any update based on that, like what kind of cost savings you have had after those investments. What is the recurring savings because of those investments?

Speaker #3: But I haven't seen any update based on that. Like, you know, what happened after those investments? And what is the recurring, you know, savings because of those investments?

Speaker #3: Yeah, sure. Actually, for this renewable energy, we had a collaborative project with Tata Power, the Tata Solar power company. So there we have our renewable energy contribution with that collaboration.

Rahul Kumar Srivastava: Yeah. Actually for this renewable energy, we had a collaborative project with Tata Power Solar. There we have our renewable energy contribution with that collaboration. Apart from that, we are working on the solar power projects in our various sites. That is in future. This is what is present situation. We make some electricity out of the biogas also, which we have from the farm. We have around 4,500 cattles. Out of that, we generate some energy for the farm also from the biogas. There are three things. One is that we are going to have, because we have a lot of sites where we have shades and all for the cattle. On the top of the cattle shade, we can put the solar panels.

Speaker #3: Apart from that, we are working on solar power projects at our various sites. So that is for the future. This is the present situation.

Speaker #3: And we make some electricity out of the biogas also, which we have from the farm. We have our 4,500 cattle, so from that, we generate some energy for the farm as well.

Speaker #3: From the bio biogas, so there are three things. One is that we are going to have, because we have a lot of sites where, you know, we have sheds and all for the cattle.

Speaker #3: On the on the top of the cattle shed, we can put the solar panels. We have a collaboration with Tata Tata solar power where we have we have some contribution with the joint venture.

Rahul Kumar Srivastava: We have a collaboration with Tata Power Solar, where we have some contribution with a joint venture. We produce some biogas power for the users of farm.

Speaker #3: And then we produce some biogas power in our, for the uses of farm.

Speaker #6: Yeah. With respect to the number, I think what has been quoted is 50. That probably you would be referring to the previous report. Probably it could be 50 million, it would.

Ankit Jain: Yeah, with respect to the number, I think what has been quoted is 50. That probably you would be referring to the previous report. Probably it could be INR 50 million. If you refer to even last annual report, it is INR 4.6 crores is the investment value and not INR 50 crores.

Speaker #6: But if you refer to even the last annual report, it is ₹4.6 crores as the investment value, and not ₹50 crores.

Speaker #5: Thank you.

Ashish Kumar Singh: Thank you.

Operator: Thank you.

Speaker #7: Thank you.

Akshali Shah: Thank you.

[Analyst 2]: Thank you.

Speaker #5: Next question is from the line of Naman Maheshwari from Sanghvi Family Office. Please go ahead.

Operator: Next question is from line of Naman Maheshwari from Sanghvi Family Office. Please go ahead.

Operator: Next question is from line of Naman Maheshwari from Shanghvi Family Office. Please go ahead.

Speaker #3: Hi. Can you hear me?

Naman Maheshwari: Hi. Can you hear me?

Speaker #5: Naman, your voice is echoing very badly. Can you speak through the handset?

Ashish Kumar Singh: Naman, your voice is echoing very badly. Can you speak through the handset?

Operator: Naman, your voice is echoing very badly. Can you speak through the handset?

Speaker #3: Yeah. Am I audible now? Is it better?

Naman Maheshwari: Yeah. I think, am I audible now? Is it better?

Speaker #5: Yes. Yes.

Ashish Kumar Singh: Yes.

Operator: Yes.

Speaker #3: Great, no, just wanted one small clarification. Probably a little new to the company, so in that sense, what could be the peak, you know, margin profiles for our new emerging verticals, which are more focused towards the protein-protein offerings?

Naman Maheshwari: Great. Just wanted one small clarification. Probably little new to the company. In that sense, what could be the peak margin profiles for our new emerging verticals which are more focused towards the protein offerings? What is the management aspiration over three to five years, that what proportion, say from this 13%, can this new age emerging business go to? Just two quick clarification, three questions.

Speaker #3: And what is the management's aspiration over the next three to five years? You know, out of this 13%, what proportion can this new-age emerging business grow to?

Speaker #3: So, just a quick clarification—three questions. Hello.

Rahul Kumar Srivastava: Hello. While the margins are, of course, not disclosed at a category level, that's a standard practice. However, as a guidance, we have always provided, I think over multiple calls, that the new age business carries our premium offerings and more value-added offerings and carry superlative margin than the overall company's average. The margins are almost as I have double the company's average. This is more of indication just for your update, but we will like to reserve sharing any specific gross margin across each of the category or across each of the portfolio.

Speaker #6: See, while the margins are of course not disclosed at a category level, that's a standard practice. But however, as a guidance, we have always provided, I think, on over multiple calls, that the new age business carries are are are a premium offerings.

Speaker #6: And more value-added offerings, and carry superlative margins than the overall company’s average. The margins are almost, I would say, double the company’s average.

Speaker #6: But this is more of an indication, just for your update. However, we would like to refrain from sharing any specific gross margin across each of the categories or across each of the portfolio.

Speaker #5: Thank you. Next question is from the line of Amish Kanani from Novize Investment Managers. Please go ahead. Amish, may I request you to unmute your line and proceed with your question?

Operator: Thank you. Next question is from line of Amesh Kanani from Norwest Venture Partners. Please go ahead. Amesh, may I request to unmute your line and proceed with your question?

Operator: Thank you. Next question is from line of Amish Kanani from Knowise Investment Managers. Please go ahead. Amish, may I request to unmute your line and proceed with your question?

Speaker #8: Yeah, sorry. Yeah, I was on mute, sorry. Recently, the reports of this Maharashtra FDA, you know, being very active on so many, you know, restaurants and, you know, closing down on these things.

Amesh Kanani: Yeah, sorry. Yeah, I was on mute. Sorry. Recently, the reports of this Maharashtra FDA, being very active on so many restaurants and closing down on these things. There were also anecdotal reports about generally in Maharashtra and in general, paneer and proteins are many a times being found as adulterated or mixed up. Any sense of whether how is it affecting us on the ground, either positively or negatively? Considering that we are a more Western India player, I would like to know your thoughts on, is it positive or negative? Thanks.

Amish Kanani: Yeah, sorry. Yeah, I was on mute. Sorry. Recently, the reports of this Maharashtra FDA, being very active on so many restaurants and closing down on these things. There were also anecdotal reports about generally in Maharashtra and in general, paneer and proteins are many a times being found as adulterated or mixed up. Any sense of whether how is it affecting us on the ground, either positively or negatively? Considering that we are a more Western India player, I would like to know your thoughts on, is it positive or negative? Thanks.

Speaker #8: And there were also anecdotal reports about, you know, generally in Maharashtra and in general, you know, paneer and, you know, proteins are many a times being found as adulterated or mixed up.

Speaker #8: Any sense of whether this—how is it affecting us on the ground, either positively or negatively? Because considering that we are a more western India player, I would like to know your thoughts on, you know, is it a positive or negative thing?

Speaker #3: So, I'm seeing your question on the FDA, you know, on the paneer. So basically, they have, you know, restricted the sale of analog paneer.

Rahul Kumar Srivastava: Answering your question on the FDA, on the paneer. Basically, they have restricted the sale of analog paneer, which is basically a paneer which is not made out of milk fat, but a vegetable fat. A normal consumer, they don't know whether this contains milk fat or vegetable fat. Just to eliminate that confusion, they have banned any paneer which is basically not made out of the milk fat, which is not a case with us because we make 100% with milk fat. In that case, it's good for us to at least provide the good quality paneer to the consumer because then the bad quality is banned. Basically, this is good for us. This is only for the paneer which is made out of the vegetable fat, which FDA has banned.

Speaker #3: Which is basically you know, a paneer which is not made out of milk fat, but a vegetable fat. So normal consumer, they don't know whether you know, it's this contains milk fat or or vegetable fat.

Speaker #3: So just to, you know, eliminate that confusion, they have banned any paneer which is basically not made out of milk fat. Which is not the case with us, because we make it 100% with milk fat.

Speaker #3: So in that case, it's good for us to, you know, at least provide good quality paneer to the consumer, because then the bad quality is banned.

Speaker #3: So basically, this is good for us. But this is only for the paneer which is made out of vegetable fat, which the FDA has banned.

Speaker #3: Rest, I think FDA in general is going for all the food products and outlets. Yeah.

Rahul Kumar Srivastava: Rest, I think FDA in general is going for all the food products and outlets.

Operator: Yeah.

Amish Kanani: Yeah.

Speaker #6: Overall, this is a good move for the industry because everything is moving towards milk-based and dairy-based products. So, this will help us also.

Rahul Kumar Srivastava: Overall, this is a good move for the industry because then everything is moving towards milk-based and dairy-based products. This will help us also and the entire organized industry.

Speaker #6: And the entire organized industry.

Speaker #5: Thank you. Next question is from the line of Rahul Jain from Creedence Wealth Management. Please go ahead.

Operator: Thank you. The next question is from line of Rahul Jain from Credence Wealth Management. Please go ahead.

Speaker #4: Thanks for the opportunity, and congratulations to the entire team on a good set of operating performance in a tough environment. So, my question is regarding, one, the milk price inflation—somewhere now it is stable.

Rahul Jain: Thanks for the opportunity, congratulations to the entire team on a good set of operating performance in a tough environment. My question is regarding, one, the milk price inflation from where now it is stable. We don't expect milk prices to move further from here on. Accordingly, the prices of products which we have increased in the last quarter also. Are we done with price increases to take care of the milk inflation till INR 42? Thereby going ahead, can we see improving operating margins given that we have mentioned in previous participants' answers that we will improve on our sales performance? One more just question about the New Age business. New Age business has done extremely well for us in last three, four years, growing from about INR 115 crores to almost INR 365 crores in the FY26.

Speaker #4: We don't expect milk prices to move further from here on. And accordingly, the prices of products which we increased in, say, last quarter—also, are we done with price increases to take care of the milk inflation up to ₹42?

Speaker #4: So, going ahead, can we expect improving operating margins, given that we have mentioned in the previous part, on expenses, that we will improve our sales performance?

Speaker #4: And one more question about the new age business. The new age business has done extremely well for us in the last three or four years, growing from about ₹115 crore to almost ₹365 crore.

Speaker #4: In FY26, and the first quarter growth is also around 57%. Given that should also improve, can we say that this year we should be clocking around ₹620–650 crores of revenues in the new age business?

Rahul Jain: The Q1 growth is also around 57%. Given that should also improve, can we say this year we should be clocking around INR 620, INR 650 crores of revenues in the New Age business, given the Q2 and Q3 will be better? These are my two questions. Hello?

Speaker #4: Given that quarter two and quarter three will be better, these are my two questions. Hello.

Speaker #6: I mean, Rahul, coming to your first question on the milk prices, I would say that milk prices are almost on a stable platform.

Rahul Kumar Srivastava: Rahul, coming to your first question on the milk prices, I would say that milk prices are almost on the stable platform. There will very slight increase in coming months because of the onset of monsoon there, because of seasonality, milk production goes down little bit because of the humidity and some other factors, environmental factors. Secondly, the demand is more in terms of festivities, there might be some slight increase in the milk prices. I would not say that it won't increase. There will be slight, but much, because we are already on the good platform on the milk prices. Your question on the New Age business, I think you have to see the evolution. It is already from 8% to 13% now, which is almost 50% jump in terms of growth rate, growth and percentage in the total revenue.

Speaker #6: Maybe they'll be very slight increase in in coming months because of the you know, onset of monsoon. They are the because of seasonality milk production goes down a little bit because of the humidity and and some other other factors, environmental factors.

Speaker #6: Second is, the demand is more, you know, in terms of festivities. So there might be some slight increase in the milk prices. I would not say that it won't increase.

Speaker #6: So there will be slight, but not much, because we are already on a good platform for the milk prices. Your question on the new-age business, I think you have to see the evolution.

Speaker #6: It has already gone from 9% to 8%, to 13% now, which is almost a 50% jump in terms of growth rate and in the percentage of the total revenue.

Speaker #6: So perhaps even if we are able to maintain that, I think this is a very good, remarkable progression on the new-age business.

Rahul Kumar Srivastava: Perhaps even if we are able to maintain that, I think this is very good remarkable progression on the New Age business. 13% out of whatever we do this year, then last year it was only 8%. Thank you.

Speaker #6: So, 13% out of whatever we do this year, and then last year it was only 8%. Thank you.

Speaker #5: Thanks. Thank you. Next question is from the line of Subnil Gupta from White Pine Investments. Please go ahead.

Operator: Thank you. Next question is from line of Sapna Gupta from White Pine Investments. Please go ahead.

Operator: Thank you. Next question is from line of Swapnil Gupta from White Pine Investments. Please go ahead.

Speaker #4: Thank you for the opportunity. Could you please clarify whether the allowance increase in cheese production capacity from 60, which is now turned to 120, refers to finished cheese output metric per turn day, or the amount of milk processed for cheese production?

Sapna Gupta: Thank you for the opportunity. Could you please clarify whether the announced increase in cheese production capacity from 60 metric tons to 120 referred to finished cheese output metric per day or amount of milk processed for cheese production? Additionally, what is the current capacity utilization of the existing cheese plant?

Swapnil Gupta: Thank you for the opportunity. Could you please clarify whether the announced increase in cheese production capacity from 60 metric tons to 120 referred to finished cheese output metric per day or amount of milk processed for cheese production? Additionally, what is the current capacity utilization of the existing cheese plant?

Speaker #4: Additionally, what is the current capacity utilization of the existing cheese plant?

Speaker #3: So Subnil, we are increasing our cheese capacity to double it from 60 metric tons per day to 120 metric tons per day. And as Akshali said in her opening statement, it will be done in the next one and a half years.

Rahul Kumar Srivastava: Sapna, we are increasing our cheese capacity to double it from 60 metric tons per day to 120 metric tons per day. As Khali said in her opening statement that it will be done in next one and half years.

Rahul Kumar Srivastava: Swapnil, we are increasing our cheese capacity to double it from 60 metric tons per day to 120 metric tons per day. As Akshali said in her opening statement that it will be done in next one and half years.

Speaker #3: So maybe by March 28, we will be able to increase our capacity to 120 metric tons. Simultaneously, we have to increase milk procurement also, to catch up with the requirement needed by the cheese plant.

Rahul Kumar Srivastava: Maybe by March 2028, we'll be able to make our capacity to 120 metric tons. Simultaneously, we have to increase the milk procurement also to catch up the requirement, which will be needed by the cheese plant. That also, we are working on that. That will not be an issue because we have good strength to collect milk.

Speaker #3: So, we are also working on that. But that will not be an issue because we have good strength to collect milk.

Speaker #5: Thank you. Next follow-up question is from the line of Kebashish from Abandabai. Please go ahead.

Operator: Thank you. Next follow-up question is from line of Debashish from Aban Dubai. Please go ahead.

Operator: Thank you. Next follow-up question is from line of Debashish from Abaan Dubai. Please go ahead.

Speaker #2: Yeah, my question is: The channel of distribution for wheat protein and whey protein bars, I'm assuming, is more tilted towards e-commerce and quick commerce.

[Analyst] (Aban Dubai): Yeah. My question is, the channel of distribution for whey protein and whey protein bar, I'm assuming is more tilted towards e-commerce and quick commerce. My question is, what is the contribution of the category from e-commerce and quick commerce, and what is the market share for now? What's the market share of ON and MuscleBlaze? Hello?

Debashish Neogi: Yeah. My question is, the channel of distribution for whey protein and whey protein bar, I'm assuming is more tilted towards e-commerce and quick commerce. My question is, what is the contribution of the category from e-commerce and quick commerce, and what is the market share for now? What's the market share of ON and MuscleBlaze? Hello?

Speaker #2: So my question is: What is the contribution of the category from e-commerce and quick commerce, and what is the market share of it for now?

Speaker #2: And what's the market share of ON and MuscleBlaze? Hello.

Speaker #7: Hi Kebashish.

Akshali Shah: Hi, Debashish.

Speaker #2: Hi.

[Analyst] (Aban Dubai): Hi.

Debashish Neogi: Hi.

Speaker #5: So can you hear us?

Operator: Sir, can you hear us?

Speaker #2: Yeah, I can hear you.

[Analyst] (Aban Dubai): Yeah, I can hear you.

Debashish Neogi: Yeah, I can hear you.

Speaker #7: Just a second. Our speaker got disconnected. Just give us a minute. Can you hear me?

Akshali Shah: Just a sec. Our speaker got disconnected. Just give us a minute here. Can you hear us now?

Speaker #5: Yes, we can hear you.

Operator: Yes, we can hear you.

Speaker #2: Yeah, yeah.

[Analyst] (Aban Dubai): Yeah, yeah.

Debashish Neogi: Yeah, yeah.

Speaker #5: Sir, go ahead. We can hear you.

Operator: Sir, go ahead. We can hear you.

Speaker #7: Yeah. So just to give you—and you know, you can also refer to the investor PPT, page number 28—our revenues from quick commerce, e-commerce, and our website is 75%, and 25% is coming from the traditional retail or specialized protein outlets.

Akshali Shah: Yeah. Just to give you and you can also refer to the investor PPT page number 28. Our revenues from quick com, e-com, and our website is 75%, and 25% is coming from the traditional retail or specialized protein outlets. This is the mix of distribution for Avvatar.

Speaker #7: So, this is a mix of distribution. For up that.

Speaker #5: Thank you. Next follow-up is from the line of Kiran from Table Tree Capital. Please go ahead.

Operator: Thank you. Next follow-up is from the line of Kiran from Table Tree Capital. Please go ahead.

Operator: Thank you. Next follow-up is from the line of Kiran from TableTree Capital. Please go ahead.

Speaker #2: Yeah, thank you so much. I wanted to understand about the raw material—raw milk prices. I heard you mentioning just now that milk prices might go up slightly due to the festive season.

[Analyst] (Table Tree Capital): Yeah, thank you so much. Wanted to understand around the raw milk prices. I heard you just now saying milk price might go up slightly due to festive season. Just wanted to understand, we generally have the flush season in the next, whatever, three to six months, right? Till October, November. Milk price generally goes down in the flush season. Are we saying that we don't have the flush that usually happens this year because of intermittent monsoons or the flush is going to happen, but the demand for milk by everybody, not just us, but by so much competition is so high that the milk prices are not going to come down?

Kiran Dhanwada: Yeah, thank you so much. Wanted to understand around the raw milk prices. I heard you just now saying milk price might go up slightly due to festive season. Just wanted to understand, we generally have the flush season in the next, whatever, three to six months, right? Till October, November. Milk price generally goes down in the flush season. Are we saying that we don't have the flush that usually happens this year because of intermittent monsoons or the flush is going to happen, but the demand for milk by everybody, not just us, but by so much competition is so high that the milk prices are not going to come down?

Speaker #2: Just wanted to understand, we generally have the flush season in the next, whatever, three to six months, right? Till October–November. And milk prices generally go down in the flush season.

Speaker #2: So are we saying that we don't have the flush that usually happens this year because of intermittent monsoons or the flush is going to happen but the demand for milk by the by everybody not just us but by so much so much competition is so high that the milk price are not going to come down.

Speaker #7: So Kiran, just to, you know, correct what I said. I actually said that because of the monsoon, you know, we're expecting a milk flush.

Akshali Shah: Kiran, just to correct what I said. I actually said that because of the monsoon, we're expecting a milk flush, and because of the festive season, we're expecting the demands to go up in the value-added categories. Milk prices, as we speak, are stable, but we are in a dynamic environment, and commodity prices can fluctuate. You never know in the future how the milk prices are going to pan out. As we speak, we are seeing the milk prices being stable at current.

Speaker #7: And because of the festive season, we're expecting the demand to go up in the value-added categories. Milk prices, as we speak, are stable, but you know, we are in a dynamic environment—prices can fluctuate.

Speaker #7: So you never know in the future how the milk prices are going to pan out. But as we speak, we are seeing the milk prices being stable at current.

Speaker #5: Thank you very much. The next follow-up question is from Arya Shah from Well Guardian Services. Please go ahead.

Operator: Thank you very much. Next follow-up question is from line of Arya Shah from Wealth Guardian Services. Please go ahead.

Arya Shah: My question on the bookkeeping side, the other income has been spiking every alternate quarter. It's been fluctuating. What is driving this, and what should we expect at a normalized pace?

[Analyst] (Wealth Guardian Services): My question on the bookkeeping side, the other income has been spiking every alternate quarter. It's been fluctuating. What is driving this, and what should we expect at a normalized pace?

Speaker #8: On the bookkeeping side, the other income has been spiking every alternate quarter. It's been fluctuating. So, what is driving this and what should we expect as a normalized pace?

Speaker #2: Yeah. So, the other income in this current quarter is very, very low—largely, primarily from the interest on bank deposits. However, as you mentioned, it fluctuates.

Ankit Jain: Yeah. The other income in this current quarter is very, very low, largely, primarily from the interest on bank deposits. However, as you've mentioned, it fluctuates. See, typically, there are two reasons to it. One is the fair valuation on the biological assets, which is a exercise which we do on an annual basis and based on the change in number of cows. That's where always March numbers will have a higher share on fair value changes in the livestock based on the overall valuation. This is just like an actuarial valuation the way we do for other employee benefit expense. If you look at the previous year, which is the YOY Q1 last year. During Q1 last year, we had one one-off item with respect to sale of one of the assets.

Speaker #2: See, typically there are two reasons for it. One is the fair valuation of the biological assets, which is an exercise we do on an annual basis.

Speaker #2: And based on the change in number of cows. So that's why the March numbers will always have a higher share of fair value changes in the livestock.

Speaker #2: Based on the overall valuation, this is just like an actuarial valuation, the way we do for other employee benefit expenses. If you look at the previous year, which is the year-over-year Q1 last year—during Q1 last year, we had one one-off item with respect to the sale of one of the assets. Specifically, as was mentioned last year, it was the sale of our SoniPath plant, which was lying idle.

Ankit Jain: Specifically, we'd mentioned last year it was sale of our Sonipat plant which was lying idle. We sold off that plant, and the entire capital gain or the gain on sale of fixed assets is part of the other income. I hope this answers.

Speaker #2: So we had sold off that plant, and the entire capital gain, or the gain on sale of fixed assets, is part of the other income.

Speaker #2: I hope this answers.

Speaker #5: Thank you very much. Ladies and gentlemen, we'll take that as the last question. I would now like to hand the conference over to Mr. Brian Depena for closing comments.

Operator: Thank you very much. Ladies and gentlemen, we will take that as a last question. I would now like to hand the conference over to Mr. Brian D'Penha for closing comments.

Speaker #2: On behalf of Parag Milk Foods Limited, thank you all for joining us today. Have a wonderful evening.

Brian D'Penha: On behalf of Parag Milk Foods Limited, thank you all for joining us today. Have a wonderful evening.

Speaker #5: Thank you very much.

Operator: Thank you very much.

Speaker #2: Thank you. Thank you. Thank you.

Brian D'Penha: Thank you.

[Analyst] (Aban Dubai): Thank you.

Rahul Kumar Srivastava: Thank you.

Speaker #5: Thank you. On behalf of Parag Milk Foods Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Operator: Thank you. On behalf of Parag Milk Foods Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.

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Q1 2027 Parag Milk Foods Ltd Earnings Call

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