Bikaji Foods International Ltd (NSE: BIKAJI) Q1 2026 Earnings Call dated Jul. 24, 2025
Corporate Participants:
Unidentified Speaker
Rishabh Jain — Chief Financial Officer
Manoj Verma — Chief Operating Officer
Analysts:
Unidentified Participant
Hazel Rathod — Analyst
Percy Panthaki — Analyst
Abneesh Roy — Analyst
Nitin Gupta — Analyst
Vishal Dudhwala — Analyst
Darshit Vora — Analyst
Shirish Pardeshi — Analyst
Hatim Broachwala — Analyst
Dharmil Shah — Analyst
Presentation:
operator
The conference. The conference is now being recorded. J. It. It. It. Sam. Ram it. Ram. It. Ladies and gentlemen, good day and welcome to the Bikaji Foods International Q1FY26 earnings conference call. As a reminder, all participant lines will be in listen only mode 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 touchstone phone. Please note that this call is being recorded with this. I now hand the conference over to to Ms. Hazel Rathar. Thank you. And over to you, ma’. Am.
Hazel Rathod — Analyst
Thank you. Good afternoon everyone. Thank you for joining us for Bikajit Foods International Q1FY26 earnings conference call.
From the management, we have with us. Mr. Rishabh Jain, CSO and Mr. Manoj Verma, COO. I now request Mr. Rishabh jain to take us through the key opening remarks. After which we can open the floor. For the question and answer session. Thank you. And over to you sir.
Rishabh Jain — Chief Financial Officer
Thank you very much for joining the call. So from Vikazi lens me Manoji has joined the call. We have seen a strong quarter performance with strong 15% growth on consolidated basis and 11% growth on standalone basis from last six, seven months we’ve seen good demand improvement across each month on month. So if you see a third quarter of last year we have been at 5, 6, 6% growth but versus last quarter was good and this quarter on month on month basis we’ve seen good demand recovery across each rural as well as also we entered into a festivity and festivity is always big for us.
Big suites play an important role and we enter we just closed in July and this we’re seeing good demand from each from suite as well as all ethnic snacks perspective. So we’re seeing good demand and see good sign of good second quarter going on. From bottom line perspective this quarter we have seen one of the best quarters in last many quarters where overall strong consolidated length we have touched a 35% gross margin with PLI and without PLI also it’s closed 33.7% on standalone basis. Also 33.6% gross margin launched on without PLI with PLI and 32.3% gross margin without PLI.
So from gross margin length also we’re seeing good strong performance in last 4, 5, 6 quarters. So basically also from third quarter from third if you see it from third quarter last year we’re seeing we have gone far ahead and we’re seeing good gross margin EBITDA Improvement also this year we have seen a good rain, good crop and raw material is supported as being all beat all. Key purchase and key purses edible has also softened so this is also playing instrumental role in improving gross margin on timely basis. Also we increase the prices of KG ethnic snacks as well as vegetable snacks.
So in last two two and a half quarters we have increased prices between 2.5%. That has also helped us in regaining our margin back from EBITDA length overall from console basis we had touched ebitda close to 14.8% and without PLI 13% so close to 15% EBITDA with PLI and from standalone basis also we are just close to 15.8% EBITDA with PLI and close 7.5% EBITDA close to without PLI so from standalone length also we are touching close to 314% EBITDA EBITDA this quarter marks the incremental achievement like where we also done JV with initiated and taken approval from board for JV with one of the biggest group in Nepal Nepal that strong partnership building capability and talent.
So basically Nepal CB Group is one of the biggest biggest company in Nepal. They have one of the best distribution and we see because you being there with partners partnering with them will become they will take a great market share in Nepal in coming years and we see good business coming on in next three to five years.
Manoj Verma — Chief Operating Officer
Yeah besides this as we said that now we would be in our distribution game so we have added further about 15,000 outlets in last three months taking our direct coverage to 3.26 lakh outlets. In terms of our marketing initiatives, I mean as we have committed and budgeted 2% so in line quarter one is relatively a low spend quarter and quarter two becomes a very high spend quarter for our marketing spend. So that continues our investment on digital marketing which is social media that’s on and we were there all across. Also this has been a quarter where we’ve initiated certain NPDs which are there in the pipeline and have very recently got launched.
People talk about the healthier stack so the Millet Bhujia so just a brand extension of our P Canary Millet is what we have launched this quarter talking about our growth. So overall Volume growth is 7.5% for the quarter. Revenue growth 14.2. Ethnic snacks which is our core category has grown at 11.2%. Package suite which looks pretty low at this point in time at 3.1. But this is a seasonality business so therefore which is going to get recovered in quarter two and so is Wasteland Snacks at 44.2% revenue growth Papara small category and we pick slow only so it is at 5.8% growth.
The way we look at our business which is core focused in other markets so core has grown at 8.5%, focused markets at 11.5% and other markets is at 26.5% growth. Export has done extremely well with a 60.3% market revenue growth. In the last quarter our family pack have grown by far higher than the impulse pack which is 5 and 10 rupees pack. So the family pack has delivered a 15.8% growth whereas impulse PACS are at 8.2%.
Rishabh Jain — Chief Financial Officer
So from top line length so we have touched top line of close to 653 crore rupees at growing at 14.2% compared to last year and overall from quarter to quarter which is also we’re growing at 6 point close to 7% versus EBITDA from if you see it from last quarter we’re growing around 30% from EBITDA and touching 96 crore rupees EBITDA in this quarter. So that’s all from the presentation. We are happy to take all the answers.
Questions and Answers:
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 Touchstone 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 the question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question comes from the line of Avnish Roy from Nuvama. Please go ahead.
Abneesh Roy
Congrats and the good recovery in both volumes and margins. My first question is on the family. Pack versus impulse pack. So family packs are growing 2x of the impulse. Generally we see in FMCG that currently although there is some recovery in terms of the urban demand initial signs generally downsizing is happening and smaller packs are going faster. So is this a conscious effort from your side that you’re offering more value to customer at family pack? Because impulse tax are very important for recruitment purpose and for an overall market share purpose. So if you could clarify any one offs here and how have you seen the market leader? Have they also seen family packs grow faster than the intel stack?
Rishabh Jain
Thanks Avnish to the question. If you look at the small pack or the impulse pack, it’s not that they have grown slow in terms of category it is what we have. We could have done better on the impulse. So that’s one straight to your question. Now the reason for that has been that there has been what we have witnessed from the market that lots of small and local players, so huge discounting and all that stuff has happened in this five rupee pack primarily and which is what has helped the category grow. But from our other in terms of our conscious call, we didn’t get into that those price wars and all that stuff, which is also on the back of if you look at relatively low growth on our western side.
But how we look see is that come this quarter, quarter two onward, this should get back to normal. So not that we have done differentially high on our large pack. It is by virtue of our brand strength, our distribution and our availability across channels that the momentum continues. On this
Abneesh Roy
one clarification here it’s mostly regional plants which are more aggressive in the in the western snacks or even the Pepsis of the World or ITC. And second is Western Snacks is around 10% of your business, broadly 9.2%. So is that Western Snacks is mostly in the 5 and 10 to be packed for you?
Rishabh Jain
Yeah. So Western facts is just primarily 5 and 10 and we also do have large packs for modern trade and all that stuff. But then that’s a limited space in that stuff. So 5 and 10 is certainly break into it. And in terms of to your question that the large players which is in likes of Pepsi and itc. So if you put together these two companies, their market share in say western stacks would not be more than 50%. Even less. Right. So there is a huge room and that’s where the regional and local players play pretty strong.
Abneesh Roy
My second question is on the two, three laggard categories. In your core business, which is 76% of your business, ethnic snacks, you have done quite well in the three smaller categories, which is a bit counterintuitive. Your growth is below 6%. You did explain the western snacks and you said it will come back on track in package suites and papa in the new states. Is this a focus area? For example in poker states, are you also driving package suite and papa? Generally what we are seeing these two categories are a bit volatile in number. I understand package suites is linked to the festivals and marriage seasons.
But is there a drive to take this to new geographies or in the existing geographies only where most of the business continues to remain for these two segments?
Rishabh Jain
No. So Papar goes everywhere and so other suites we’ve been calling and we take pride in saying that we are the second largest papa manufacturer in the country. Handmade papa after legit papa. So this is not just in the core states, this is across the country and even in the exports market. Right. But it so happens that papar again during seasons and the wedding season. So the demand of sweets and papad was obnoxiously high during these wedding seasons. In fact in the times we have witnessed that we run short of capacity for papa. Most importantly this time what has happened is that the number of wedding dates or the weddings were less than what it was in the last or previous year.
So therefore it’s reflecting in papa suite is a matter of time. And as Rishabh just spoke, I mean you’ll see surprising number coming in in quarter two Salesforce suite. So immediate recovery will be seen.
Abneesh Roy
Last question. So Nepal why do a jv? Almost every Indian FNCP company is present in Nepal. We don’t see too many JVs. Why not go 100% on your own? Second is this 5 crore loan which you have given to Bikazi Bakes. Could you clarify on that? What exactly is this business? And lastly on the two store addition which you have done from 13 stores quarter on quarter it is becoming 15. So if you could discuss is this basically your acquisition Hazelnut where you have added and any insights if you can share of your own store how they are doing and Hazelnut are you happy now because few quarters have gone because generally most retail companies in the QSR says are not seeing good times at all except maybe Domino’s won one exception.
But broadly this space is extremely challenging currently and if you see the software job addition also TCS has delayed and overall job addition in IT sector is low in that context would you slow down your store edition in Hazelnut and in terms of your own store.
Manoj Verma
Yeah abdish. So we’ll take your question one by one. So starting from your first question which is on the JV in Nepal. So Bikaji as a brand is pretty old and pretty strong in the Nepal market. But the challenges what we were facing was that there’s huge custom duty or the import duty which was there and which was making our product non competitive. So that was the reason that we thought of having a JV and eventually start producing there selling there. So that will make our products much more competitive and will leverage the brand strength.
What we have talking about the JV company which is Fiji Chaudhary Group who owns YY brand and which is the highest distributed Beggi or CG brand in the country. So that’s what we are riding along with this CG Group and we see a huge growth potential initially just by making our products in available in length and breadth of the country and second by their cloud and their strong presence in the store. So that’s the sole objective of having this JV exclusively for Nepal market. Now talking about this, the loan and the other cost I would hand over to Rishabh.
Rishabh Jain
So from PH in this quarter we added two stores in PHF as a factory. So basically PHF is doing extremely well for us and and we are largely satisfied with the performance what they are doing. And we see they will open close to eight, nine stores more in next nine months. So they will open a store in a month pipeline. So by end of this year they will be having close to 1920 stores and largely in UP and NCR area. So we are then the number on in last six months they opened store and we are seeing good results coming in each quarter each retail outlet.
So we are seeing good numbers for this end popularity at overall level in retail also in THF and we are largely satisfied with the investment work we have done. And from the length we opened one store in Rajasthan this year we’ll open three, four stores more in pipeline and we are seeing, we also see good results coming in from that. So from retail length we are not pure proper qsr. We are into a major focus in each retail chain is into package monkeying, package sweets gifting. That’s contribute big numbers in our overall QSR like you see in Dhikari.
Also like we are outlining Bombay where close to 55 60% sales come from gifting sweets and our package where we display complete range of Bikaji products. So that’s a major focus for us in our retail CSR outlet. So that’s one number one and number two from the bakes lens. It’s a 100% subsidiary of BigAji Foods focusing on doing. Focusing on making some bakery items. We are already into biscuits in a small portion of us are into biscuits. But yeah bakery is coming. Bakery is doing good in in India and we see good potential. So that’s a small investment what we’ll do and we’ll focus on doing Crozo and everything.
Small bakery, bakery investment. That’s what we are doing.
Abneesh Roy
What brand and mostly E commerce for B. Mostly E commerce.
Rishabh Jain
Yeah, mostly.
Abneesh Roy
What brand? Bikaji brand.
Rishabh Jain
Yeah it’s early to say sorry.
Abneesh Roy
Yeah you are saying something. You’ll come back.
Rishabh Jain
Of course it’s in currently it’s in B brand.
Abneesh Roy
One last follow up and I’ll end there in terms of CG Foods. They do have a reasonable presence in some states through YY Noodles through a non equity. I’m not asking on equity partnership in India to a distribution synergy in terms of IY Noodles and getting distributed in some of the Northeast etc is that a possibility?
Rishabh Jain
Because they do have some reasonable income.
Manoj Verma
So we are having very strong presence in Northeast is a. We are holding plus 65% market share in Atam. Right. So we hold a very strong position and we don’t see any collaboration in India as of now. It’s just a Nepal journey.
Abneesh Roy
So thanks. That’s also my thing.
Manoj Verma
Thank you.
operator
Thank you. The next question comes from the line of Nitin from mk. Please go ahead.
Nitin Gupta
Thanks for the opportunity. I basically wanted to have more insights around month on non demand recoveries. Can you throw some light and additionally like you have answer to the previous question around some of the markets that discounted players have emerged. If you can call out any specific market and you are hopeful that in Q2 things will be back so how that those scenarios are emerging, can you. Please help on that?
Manoj Verma
So we have seen good demand recovery in last six, seven months like you see in quarter three, October, November, this quarter was tough for us and for the industry also. But from Feb onwards we’ve seen good recovery. Like April was little dull because we were in good. So March was good but May, June, July we’re seeing good month on recovery in demand and being we are entering to festivity, we see good demand recovery across each state, each core as well as focused state in our overall city.
Nitin Gupta
Okay, thank you. And in terms of this discounting which is going on in part of your portfolio recovery in Q2, how you are confident that the discounting will go down or are we taking some action here?
Rishabh Jain
Can you please. I mean I’m not. We’re not clear on terms of discounting. What is the exact question there?
Nitin Gupta
No, so you were highlighting that like particularly western snacks there have been huge discounting.
Rishabh Jain
Yeah. Okay. I think so. It’s not about discounting, it’s about their selling price. So they offer lots of, you know, offers and all this stuff up. Right. So what happens is that these are the mushrooming kind of stuff. This that’s not sustainable and which is what. So I will upgrade our rupees 10 and all that stuff. But yes, we certainly will not go the discounting way or trying to, you know, match prices and all. That’s what we.
Nitin Gupta
Okay, okay. Thank you. And my second question is around your gross margin Recovery adjusted for PLI, it is at around 34% which is a healthy level. There is a sequential recovery of 225bps. So can you help me understand the factors which have aided gross margin recovery? And also a comment around sustainability of the margin ahead would be helpful.
Manoj Verma
So basically it worked both way like we also increased price in last two quarters and also raw material has supported us. So both ways it has worked us in our favor and also we’ve done some. We run some saving program in the organization which is running for last nine months. And so that’s where we are majorly focusing on focusing on Q produce and high end gross margin. So multiple things are going on to improve the gross margin. Currently we are at close to 35% gross margin at console level but overall at standard level also we are at highest gross margin and we see that in next nine months also we’ll be at the same, we’ll be maintaining the same gross margin.
What we see unless we see any major disruption in oil or but we will in next three, four months. We’ve seen good crop, good rain in our core shade like Rajasthan. We have got major raw material and we’ve seen good rain this year. So we don’t see any major changes in raw material prices what we are buying currently.
Nitin Gupta
Yeah this is helpful. And one last thing in terms of your presentation when you highlight raw material prices. So this is the spot prices you highlight or is it like consumption price the indexing. Okay so that way like palm oil prices was in as for my calculation was around 131 rupees Q4 that has seen a moderate correction to 128. So whatever the duty decreases and the eating informal prices has not benefited us.
Manoj Verma
So it will be so we’ll see imported to something because we we had some stocking has been done. So we’ll see in quarter two. But yeah edible price will remain at the same level. We don’t see any major changes because. The shooting demand is good this year. So we don’t see any major Correction, in in ag it will be the same largely same as what we see in quarter one.
Nitin Gupta
Okay so you don’t think that whatever the reduction have happened that will flow into the numbers. So palm oil price basically will stay. Here
Manoj Verma
and came down. But we we use multiple oil like palm cotton rice and okay palm is reduced but other oil is not reduced.
Nitin Gupta
Okay, got it. This is really helpful. Thank you.
Manoj Verma
Thank you.
operator
Thank you. The next question comes from the line of run Mai Joglikar from assetsi Mehta Investment Intermediaries. Please go ahead
Unidentified Participant
Hi sir, thank you for the opportunity.
operator
The line said the participant has disconnected. We’ll move to the next question. The next question comes from the line of Vishal Dudwala from Trinitra Asset Managers. Please go ahead.
Vishal Dudhwala
Hi sir, am I audible to you? I just have one question about your. Second half of this year. As with Diwali and the festival season. Like rural port harvest demand and anticipated. Easing in commodity cost, what are your key volume and margin assumption for H2?
Rishabh Jain
So if we look at Diwali and when you talk about this, so this primarily gets covered broadly in quarter two and then the leftover would be in quarter three. So gross margins the way we look at, I mean the guidance what we have given we will stay within those numbers.
Vishal Dudhwala
Like any new festive SKU launches are you are piling up in your. Plan or
Rishabh Jain
nothing is such. It’s about a gift boxes. So every year we come up with some new designs. It’s assortment different packs and all that stuff. But otherwise if you talk about any new category, no the packs you will see some better design, some little bit change tweaking in that stuff. I mean that’s what we certainly do to keep up the excitement and engagement of the customers.
Vishal Dudhwala
Okay, that’s it from my side as of now. I will wait it up to you.
Rishabh Jain
Thank you.
operator
Thank you. The next question comes from the line of Darshit Vora from Asit C Mehta Investment intermediaries. Please go ahead.
Darshit Vora
Hello. Hello.
Rishabh Jain
Hi.
Darshit Vora
Am I audible? Yeah, you are. All right. Thank you for the opportunity. I have a couple of questions. So first thing being that we what, what is the timeline of what kind of a internal target are we expecting for the volume to come up to double digit levels? We’ve seen about three quarters of single digit increase. So any, any, any visibility over that.
Manoj Verma
So, so we’ve seen good demand recovery across month on month. So for the rest of the year we see at least 9, 10% volume growth. That’s a plan and that’s numbers. We are, we are looking at at least.
Darshit Vora
9, 10% and that would be. More towards the second hal f,
Manoj Verma
more toward from quarter two.
Darshit Vora
From quarter two onwards. All right. And about this Nepal JV that we have done, can you give some kind of details with respect to say capital outlay or some kind of timeline for the ramp up of distribution or some kind of revenue potential that we have in mind?
Manoj Verma
Yeah. So basically from Nepal perspective, so we’ll jointly jointly open a plant in Nepal. Nepal. In Nepal where we’ll Invest close to 30 crore rupees currently 15 crore rupees will be outlayed from the kazi and balance will be from there and currently our top line is under 20 crore rupees and we see good potential as brand is very strong there. But overall due to custom duty and all we’re not able to supply in Nepal market good potential coming up and using and driving distribution of CP Group by and we see at least 50 crore rupees top line in the next two years.
That’s the target what we’re seeing
Darshit Vora
50. Crore top line in the next two years.
Manoj Verma
Yeah.
Darshit Vora
All right. And finally just from my side in. The previous quarter you had mentioned that our margins were gross margins were expectations of around 30, 31% this time around we’ve come at 33 plus and we hope to maintain that sustainably in a way. So how do we plan on doing this given the already taken initiatives.
Manoj Verma
So. On full year basis what we see that on standalone basis. Standalone basis GCFS gross margin of 32% plus. That’s the target what we’re taking on standalone basis without real. I’m. We are on track of doing the same.
Darshit Vora
All right, that’s it from my side. Thank you.
operator
Thank you. The next question comes from the line of Shirish Pardesi from Motilal Oswal. Please go ahead.
Shirish Pardeshi
Hi M. Thank you and good afternoon. Just quick question on the Nepal. The per capita consumption in Nepal for which is about 7kg. Do you have any data what is the. Because I. I do understand why it’s practically about 100% distribution so and it’s a very strong noodle market in that context you might say that you have the right to win. But then I was more curious what. Is the Nankeen or maybe non western snack kind of consumption if you have any data to support.
Manoj Verma
So. Hi Suresh. So Nepal as such, I mean we don’t subscribe to Nielsen data so would not be able to answer in the straight one number. But thirdly what we can still is that looking at the markets and visiting these stubs and all so this seems to be clearly about 600, 700 crore market kind of a stuff. Right? That’s the. That’s what we look at it and when we look at competition and primarily from the Indian manufacturers such as Haldiram Bikano they’re pretty much strong there and there’s a consumption base as well. So that’s what we see.
And when we look at internally simply put so currently our distribution was lacking. We were more towards India border side. That’s what Was it? And now if we were to go up Nepal that one is the transport cost which makes things expensive. And second thing is someone is to build a route to market. So the objective of this JV is to leverage on their route to market and brand which is already established brand push that brand there. So that’s what it is. And as Rishabh said in terms of our business opportunity we can more than double in next two to three years time.
Shirish Pardeshi
That I understand. I was just more curious because maybe. Press release you have said that you will manufacture trade and do the market expense. So obviously you should give some number that there is an investment of 30 crore. But then is manufacturing is going to solve the distribution problem. Because if the market is very large and if there is already established players which are there and you have been selling some quantity from India. So I was more curious what is. The number which you. I mean the 50 crore number on the looks very conservative. But then if you can tell me what is the export business we have done in FY25 to Nepal.
Manoj Verma
Yeah. So that’s what I’m your question again Shirish. Let me bring to the table. The Import duty is 55% which makes you less competitive in those markets. So this would help us ease down on those numbers. And therefore ability to invest behind building a business goes as much. That’s one second is if you look at Aldiram has also done gone the same way. They have also done a JV partnership there. And so is what Bikan also top three players from India are these three. So they already are already they’ve started or about to start. That’s what is the status.
Shirish Pardeshi
Okay. Coming back to India business. Just quick question on the pni what kind of PNI you you have factored in for FY26.
Rishabh Jain
So for FY26 we have sector close to 50 crore rupees PLI in our book. So it will divide it equally in each quarter.
Darshit Vora
Okay. And this last question on Hazelnut. What kind of revenue momentum we can expect exiting quarter four in this year? Because obviously there is a lot of. Learning curve
Rishabh Jain
type of 100 crore ARR. That’s what we’ll see.
Darshit Vora
Okay. And any, any color because now you’re settling down. So margin exit when you do 100 crore what kind of gross margin you would achieve.
Rishabh Jain
So this year will be a lot of expansion. So major focus will be driving growth and driving open stores this year. So maybe next year will be 8 to 10% EBITDA. This year will be largely 4 to 5% 4 to 6% type of EBITDA.
Shirish Pardeshi
All right, thank you Rishabh and all the best.
operator
Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Hatim Brochwala from JM Mutual Fund. Please go ahead.
Vishal Dudhwala
Yeah. Hello sir. Thank you for the opportunity. Sir, my question is that currently all the input commodities are now correcting. So whether there is scope for us to cut down, cut on the product prices to drive volume growth.
Manoj Verma
Yeah, of course. When we look at how competition is moving, if we were to drive volume growth. So those are the measures as a business and as the steering committee in our company, how we look at it. So we certainly evaluate and we keep doing these things as the commodity price increases.
Hatim Broachwala
But is there an opportunity without impacting margin? 7 of course.
Manoj Verma
See this will only do if we have that ability to invest. It is not at cost of margin. So there is a target of improving bottom line as well. So it is not by eroding margins and we give some extra offers that not so as you started that. As we see the ease in commodity prices, that’s what we will pass to the consumer and we have done it in the past.
Hatim Broachwala
Okay. Thank you sir.
operator
Thank you. The next question comes from the line of Twisha from Rare Enterprises.
Unidentified Participant
Thank you for taking my question. Am I audible?
Manoj Verma
Yeah, you are.
operator
Yes, ma’.
Unidentified Participant
Am. So my question is regarding your new product launches. In particular the Milad Gujarat. If you can please share any kind of commentary on how the market response has been and what you think the opportunity could be for this healthy snack segment and if you have any more healthy snack launches in the coming quarters that you’ve planned. Thanks.
Rishabh Jain
Yeah, so I think it’s too early to comment on this Millet Boulea because it has just come out. And so we will be doing some pilot stuff and we’ll be riding on these QCON channels and all that stuff. Distribution would get built over a period of time. And with the primary data, what we can say is that when we launch. So there’s a huge product testing what we do and it has come out very well. And that’s what was the panel. What? And that’s how the panel gave clearance to launch it up. Talking about the healthy food. So one is there’s nothing called healthy food. You may say healthy fat, you may say less unhealthy. That’s a better way to put that stuff. So we also have a range of products which are roasted Namkeems and all healthier. But the market still is very, very niche. So as much voice what we hear about healthy snacks. If we go down the consumer that in India Indian market at least it is not as much there. I think it’ll take about five, seven more years.
That’s when people will be talking even more about the LDs. Banks and companies would then start focusing on that stuff. But to be future ready, we have a range of products which are amongst the healthier ones.
Unidentified Participant
Okay sir. Thanks. Thanks. That help.
operator
Thank you. The next question comes from the line of Aditya Tambi from have Rock Capital. Please go ahead.
Unidentified Participant
Thank you for the opportunity. So I just wanted to get some. Updates on like the frozen food segment that you are planning to export from India. And there is currently the market leader which already does it. So any color on how it is happening if we are able to get into stores or gain some market share.
Manoj Verma
Yeah. So on the frozen food we do not sell in Indian domestic market. This is primarily for our exports business. And this frozen part has a huge share of business in our exports business to the upwards of 35%. That’s where it is. And that also would have been better if we had our capacities earlier because we were also outsourcing it. So that’s where it is. But the way we have built our capacities and this again we call it being future ready. So as in when the country or the channels are matured enough to maintain and sell these frozen products which is in which means end to end cold chain that when we shall be launching it in Indian market but not.
In. Next couple of years is what this would be export business product. Right.
Unidentified Participant
So just to follow up on that, how can you explain how the market has changed? Like if someone is already storing a competitor product then how do you convince them to go for Bkalji instead of them or to keep both of them in their stores.
Manoj Verma
So today if you look at any category, the categories are highly fragmented and you will see a lot of players playing around and within the store itself. So their exclusivity no more exists. That’s one. Now how we’ll do it is one in terms of. Of course we have to be consumer preference. Therefore if your product doesn’t taste well or the quality not up to the mark, we will never get a repeat. What we also do is that we do some branding activation in these stores which is the stimulus for a retailer to keep and place our product give visibility of our product.
Third is that the cloud what we have. So in the stores where we already are selling bikaji products, this Becomes an addendum to the list what they have. So this is how we go about it. And also what we realized was that many a times we ran out of stock. I mean we did not have was not having ability to supply the orders because we were also outsourcing during the season time. If you look at that’s where the demand is highest. And in the yesterday we were struggling. Now if you see a number speak louder than what I would say.
If you look at our quarter 1 exports business growth is outstanding and this is what has helped us.
Unidentified Participant
Thank you for answering. Also sir, on the phases of factory acquisition, like you already admitted that we are adding one outlet per month. That is what we see. But how do you see this over 2, 3 years of 5 years phenomena? Do you see this as only as a tier one opportunity? Or like do you plan to scale this up faster? Or like after this year we might go lower on these store editions. How do you think about this?
Rishabh Jain
So store edition would continue to drive on our direct coverage. What happens is that may not translate into indirect coverage because it will be a diminishing return beyond the point. But when you cover directly your cloud on the store or ability to sell rich is always high. So what we’re looking at it is that currently we are at 3.25 lakh outlets. The target what we have is to exceed 3.5 lakh outlets by end of the year. But year on year is what we shall be adding 50,000 outlets. That’s what is the target what we have for ourselves and should reach to 500,000 outlets in our direct coverage.
That’s the target. What we have next three years.
Unidentified Participant
We did. So what about that? So redemption.
Rishabh Jain
So from hazelnut length what we see that this year is a major expansion. What we done what we’ll do this year. But next year, from next year onwards they will open Python Python exports every year. That’s the target.
Unidentified Participant
Okay. Okay, thank you. And also we were focusing on our focal states. So like do we have any updates? Like if there were any market share gains like if we could see some wins in these focus states. Like any market shaking that happened over last one two quarters.
Manoj Verma
So across all six focus states there’s a movement upwards of market share gain across states. What happens is that and so is the numeric distribution as well. So both these matrix has moved up. There are certain states which are now close to 6% market share as well. So 5.8% for example Chhattisgarh if you look at which is one of our focus Karnataka If I speak about is upwards of 3% market share. So there are certain movements and so nowhere have we seen that it has not flowed simply.
Unidentified Participant
Okay, so thank you for answering. I’ll get back in with you.
operator
Thank you. The next question comes from the line of Priyan from Bellam Capital. Please go ahead.
Unidentified Participant
Yeah, hi sir, I’m sorry if I missed out.
Manoj Verma
Sorry, the voice is not audible.
Unidentified Participant
Hi sir, Is it audible now? Hello?
operator
Yes, yes. Yes sir, it’s audible now.
Unidentified Participant
Cool sir, sorry, I would have missed out. What would have been the volume growth excluding the acquisitions in the standalone business, would it be five, five and a half?
Rishabh Jain
Close to 6%. Close to six and a half, sure.
Unidentified Participant
So the recent, I think the extra offerings that we had even last year would ease out in the base by September quarter. Right. So till that time the volume growth would undershoot whatever aspirations we always had about 12, 13%.
Rishabh Jain
Right, right. So last year also quarter four of 25 we have seen full volume growth of 10% extra that were in. In quarter one we started slowing down. So from quarter two onwards we’ll see good volume growth. Because in quarter two there will be no extra drainage. In last year number.
Unidentified Participant
Understood. No, because till September quarter we had a 15% volume growth and I was assuming that there would have been.
Rishabh Jain
Yes, you are. For the full year, for the first half we would have a single mid single digit volume growth and for the second half the aspiration continues to be double digits. Is that what.
Unidentified Participant
Yes, yes, yes, got it. And the question on the operating cost, when we look the total operating cost in terms of per kilo, how should we model it out for next few years? What should be the trajectory? Given the distribution reach that we are expanding, given the size that we are reaching, what should be the operating cost per kilo? Trending, going ahead.
Rishabh Jain
So basically we don’t see business as an operating cost per kilo year on year or month, on month basis. We see as a key cost, we measure key costs like logistic cost is big for us, employee cost is big for us and manufacturing cost. So we see each cost is a big five, six point are there which are big for us from cost perspective. And we are majorly focusing on bringing more efficiency in each course, each cost length. So currently we are into expansion phase, so be it. In employee we had a lot of expansion, a lot of addition in employees as well as front liners in sales in last two years and result they have started coming in last two quarters and we’ll see a lot of improvement in employee employee cost as well, number two, so manufacturing cost, we are doing lot of lot of energy.
We are moving to solar and everything. So we’ll see efficiency in each cost per each cost measure. But also we are currently close to 50% utilization. So running planted lower, lower shift or lower utility is always a costly reference. And then we have fixed every fixed employee costs, all costs are fixed. So once we start raising this capacity and take this to 70, 75%, we’ll see at least 0.3 to 0.5 or 5 to 50 basis point improvement in margin every year for next two, three years. Sure.
Unidentified Participant
So I mean I understand we just have, if I have to, you have multiple cost line items. But if I have to look forward for a total other expenses excluding employee cost is somewhere around 14, 15% of your sales.
Rishabh Jain
So what we see at least so it will be improving 0.50 basis point each year. So from other expense lengths we will see there are like a few costs which are sitting in the consultancies or many other third party costs and third party manufacturing costs which we’ll see improving in incoming two, three years.
Unidentified Participant
And for this year, should we consider 50bps or starting 27 only?
Rishabh Jain
We should consider 50 bits starting 27.
Unidentified Participant
Starting 27. Oh yeah, yeah, sure, sure. Thank you.
operator
Thank you. Thank you. The next question comes from the line of Dharmil Shah from Delmis Capital Management. Please go ahead.
Dharmil Shah
Hi, thank you for taking my question. The first is on the competition. You mentioned that whenever the robot is largely from the local person. Just wanted to understand are these the unbranded players which compete in such situations or these are the regional brands, that.
Rishabh Jain
These are primarily local and regional brands. So it will not be a national. Player role in that stuff.
Dharmil Shah
But not the unbranded one, right?
Rishabh Jain
No, it’s unbranded also. So. But unbranded is what you cannot measure. But the data what you get is for the local and regional place. So you see their presence, they’re discounting much higher than what it used to be.
Dharmil Shah
Coming to other steps, I mean, I know it’s a very small part of the overall business which states specifically are moving at fast rate and what is the growth driven by primary.
Rishabh Jain
Sorry, can you please repeat the question.
Dharmil Shah
For the other states part of the business? It’s a very small, small business right now. But what states specifically are growing, taking all the other states.
Rishabh Jain
So in fact when you see the kind of growth that we’ve delivered in other states, it’s a, it’s a game of all states doing well. But yes to your question it’s like Bengal, like Maharashtra, Gujarat. These states have done very, very well.
Dharmil Shah
Understand this is primarily because of increased direct outlet coverage, right?
Rishabh Jain
Or is there something in the, in the other states? Our strategy is that we are riding on modern trade, we are riding on ecom. That’s what it is. And then we are riding on, we make stockage distributors and they drive the distribution there.
Dharmil Shah
Understood. Lastly, very, I mean very broad question, but you know, there is a lot of buzz around obesity Dragon in India as well. These are very pricey drugs right now. But once these are made accessible to the mass population, sniping companies will have any long term risk in terms of maybe over next five to six years.
Rishabh Jain
So we will take it as it comes. But for now, if you look at as we export to several countries and countries like us where these laws are on, the statute requirements are even more stringent and we abide by all of them. So we are actually ahead of times. But I mean if it comes, it will be true for us also and we live up to whatever is expected. In that case,
Dharmil Shah
thank you.
operator
Thank you. Thank you ladies and gentlemen. We’ll take this as the last question for today. I would now like to hand the conference over to the management for closing comments.
Manoj Verma
Thanks. Thank you friends for taking time out. Hopefully we answered the questions to your expectation. Just in case if you feel any of the question was not well explained or does not bring in the clarification you were looking for, please reach out to us. We’ll be glad to take the questions separately as well. Thank you once again. Bye.
operator
Thank you on behalf of BK Food International. That concludes this conference. Thank you all for joining us. And you may now disconnect your lines. It.