Bikaji Foods International Ltd (NSE: BIKAJI) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Hazel Rathod — Investor Relations
Rishabh Jain — Chief Financial Officer
Manoj Verma — Chief Operating Officer
Analysts:
Abneesh Roy — Analyst
Percy Panthaki — Analyst
Darshit Vora — Analyst
Disha Giria — Analyst
Mehul Desai — Analyst
Harsh Jain — Analyst
Naitik Mutha — Analyst
Nitin — Analyst
Abhishek Kumar — Analyst
Varun Singh — Analyst
Aditya Tambi — Analyst
Dharmil Shah — Analyst
Manish Poddar — Analyst
Ashish — Analyst
Shirish Pardeshi — Analyst
Sunil Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Bikaji Foods International Limited Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will remain in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal the operator by pressing star then zero on your touchstone telephone. Please note that this conference is being recorded. I now hand the conference over to Ms Hazil. Thank you, and over to you, ma’am.
Hazel Rathod — Investor Relations
Thank you. Thank you. Good afternoon, everyone. Thank you for joining us for Bikaji Foods International Quarter Three and Nine Months FY ’25 earnings conference call. From the management, we have with us Mr Rishabh Jain, CFO; and Mr Manoj Varma, COO. I now request Mr Dishabh 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 hello, hello to all investors. Thank you for joining the investor call. So overall, it’s a very challenging quarter for all FMCG. However, we’ve seen consumption trend are moving up in the 4th-quarter January. Also, we’ve seen some positive sign in whether for middle-class in reducing income tax and other factors, which will also have some positive sign for economy in next year. So from — so this year this quarter we grown close 12% in sales and overall revenue from operation growth of 14.5% compared to last year. From, of course, operating margin was at pressure in 4th-quarter — in 3rd-quarter. And from onwards, we’ve seen oil price has started moving up and sudden increase in farmers in taxes from government has impacted — has impacted overall pricing of par mile.
And overall all the edible oil large impacted overall gross margin in 4th-quarter. Gross margin pressure was — we try to pass-on the power prices of prices to consumers and we have taken some price hike in 3rd-quarter as far as we also evaluating price hike in 4th-quarter. Also there was a key pressure of, like you will see that our Russian snack sales has grown at a subdued percent at 0% largely. This was a conscious call which we as a management has taken largely because prices increased substantially in investment snack ships like there is poetry and oil, that’s a two gig commodity. And both the prices have increased substantially.
So we have largely — we have subdued the production in 3rd-quarter, which has also impacted revenue from 2% to close to 1.5%. It’s good to see your YTD numbers as because sweet — sweet which was sweet is largely. This year Diwali was in end of — end of October versus last year Diwali was in 10th of November. So there was some pre-sale — pre-suite sales in second-quarter this year. So overall, our revenue growth in YCT numbers is close to 17% and overall revenue remove AI, it’s close to 15% versus 11% volume growth.
Our EBITDA margin stands at close to 11.1%, a gross margin 32%. From manufacturing lens, it’s the same we have not increase any major capacy capacity in trying to utilize the capacity as soon as possible to add close to 65%, 70% so that operational efficiency comes in overall — at overall level. So from expanding the distribution level, so largely that’s the core of distribution. We have always started to increase the direct reach and we have further gained our distribution and have reached close to 11.5 Indian outlets in total. And as direct reach perspective, where we are close to 3 lakh outlet, close to 2.8 lakh outlet this year, which is a fundamental for any and that’s what we are targeting. So marketing lens, Manoji, you can.
Manoj Verma — Chief Operating Officer
Yeah. So marketing camp in what we did and which was a big one, we can I learned the job, which ended on 31st of December, did pretty well for us and that was a savior. Because if you look at when you go through the presentation, you would raise — you would see that volume growth is just 3%. But actually speaking, if we look at revenue, volume growth is 8%, that’s the right number. It is because on the back of last year quarter three, within 10% extra was going — so 10% was non-revenue volume, but then that sits in the way. So therefore, it looks fee. 2% otherwise revenue volume growth is 8% for us. So this promo now indeed help us do better. We got very good penetration, now able to increase our weighted distribution with these kind of this campaign what we did. We used all communication vehicles, we use few celebrities like Gujan and all and this expanded across countries.
So all the states and about 3,600 cities. The winners know who benefited of this promo is to the tune of 634,000 winners who got something or the other out of this promotion. The festive campaign we did saw gift packs did very well. However, quarter three and this I’m talking overall, so the right way to look at gifting and sweets is some total of quarter three and quarter two because of Diwali being little here and there kind of stuff. But overall it was a good business on gifting for per se.
Talking about volume growth and as we look at quarter three, so the reported growth is 3%, but if we look at revenue volume growth, it’s 8% for this quarter, ethnic grown at 10.5%, package said 11.2% revenue growth. Western snacks where the growth is flat is just 0.8%, but that was the conscious call which we took and as Vishab just spoke about, because there it was bottom-line erosion as we sell more, both potato and oil, which are the key ingredients for this product were on the peak of it and it was not practically possible to pass as much prices. And this is one reason that if you see the results of any other listed company in this category would have certainly bleeded for that stuff.
Again now at a 9.6% growth in this quarter. But it’s more relevant to see look at the continuity that YTDs over last nine months, volume growth is 11%. But here again, if I just look at revenue volume, so it’s a 13.3%, which is in-line with what we have been talking. Our revenue overall of revenue from operations is 17.1%. Ethnic snack sitting at 12.2% growth, package, as I said that it’s the right way to look at quarter three and quarter two together. So at a YBD basis, package feet is 17.5% growth, ves snack, which if you look at just quarter three is at a zero book. However, at a YPD number, it’s a 16.5% growth. So which speaks about the kind of demand which exists across the call, we took and we did not do that. But H1, if I look at it’s a 28% plus growth kind of answer.
So which is what now with softening of prices of in potato and also the oil, you will see that in the coming quarter this will all be made-up copper up 15.3% growth on a basis. So has a strong momentum going-forward. In terms of if we look at our product mix, so it is broadly in-line with what it was last year to 62.9% it was last year quarter-four Nanke and put together, which is now at 62.1%. So only thing if I — if you refer to this sheet of us is the Western snacks contribution. So last year, if we look at it orderly, it was 7.5%, which has come down to 6.8% and this is the — what I spoke about that, that was a conscious call. Rest, all categories are in-line.
And in terms of — as we talk about that, our four focus in other markets plus exports, if we look at in this quarter-four states, revenue growth is 11%, 10.8% focus states growing at 40.7%, other states 8.7% and exports has done good now is at 32.6% growth at a YTD basis, core sales have grown at 11.9%, focus is 17.1% and others is 23.7%, exports sitting at close to 21% growth. Our flagship of the community on the large pack continues. So we are because the mix of product between impulse and the large pack is 61% from large pack and 35% coming from impulse pack. Both the family pack and impulse pack has done well in the quarter. So family pack growing at 11.6%, impulse slightly higher at 12.9% growth.,
Rishabh Jain — Chief Financial Officer
So overall, from revenue lens we’ve done it close to 14.5% quarter-on-quarter it’s largely flat as we see last quarter from EBITDA lens, our EBITDA is close to 8%. So from raw-material lens, of course edible has substantially hit us all the SMCB brand and close to the price has been increased from 100 to 140 level and currently it’s close to 130, but the overall is peak — it’s at the peak currently. But yeah, from this quarter what we see, it’s a good drop, this is a good drop this year.
We’ve seen good drop-in all the commodity and we have seen that will support overall in 4th-quarter and we’ve seen good pricing, we’ve done a good pricing, providing support, taken a good long-term PO for all that we commodity what we already started doing and that will support the margin in coming quarters. The be it vegetables in everything. So seeing good primity probably in each and every community.
So that’s all from presentation. We’re happy to answer all the questions you and take all the questions you. Thank you.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Abneesh Roy from Nuvama Wealth Management Limited. Please go-ahead.
Abneesh Roy
Yeah, thanks. My first question is on the segment-wise growth numbers. So I see a big divergence between, say, Q3 and nine months when I see that data, the bigger divergence is between Street where there is a 17% growth in nine months, which drops to 11% in Q3, which means first-half, obviously, you already given that number. It’s almost 20%. So 20% dropped to 11% and similarly Western snacks from 16% become zero. So here specific question is, I understand Western snacks, you did call-out that conscious call was there because of very low-margin. But what happened in sweets? So sweets essentially marit season always there is a big benefit because of the gifting. And Q3 we have seen whichever category has a high marriage demand, those have done really well. So in your case, if you could discuss in sweets, what is the issue here? And would you expect sweets and Western snacks even in Q4 to underperform the other two categories for you.
Manoj Verma
Yeah, hi, Abneesh. See, package suites, the role of the wedding season of course is there, but the quantum of gifting in Diwali is by far high. So it’s a very small percentage vis-a-vis the Diwali gifting kind of a numbers what we do. Now what happens is that last year Diwali was on around 23rd of November, 10 — yeah. So later part wherein this year it was on 1st of November itself. So this got preponed in-quarter two itself because modern trade, which is the very big account for us, our other states and also where suites is very big.
So all these stuff goes — the pre-loading starts happening. So this is what is always the case that quarter two and quarter three put together is the right number. A wedding season, also if you look at some wedding season number of wedding dates are more in-quarter one — quarter-four vis-a-vis quarter three if we compare over last year. But again, I’m reiterating on the fact that, yes, wedding season plays a role, but it is nowhere close to what the gifting in and Diwali means for — for this category for us.
Rishabh Jain
Also, Abneesh, so your last question was, so for 4th-quarter like snacks again on-track and so the fresh crop is creaming in and so it’s on-track and we have again started full peak production in snacks. And suites will be also in the same range what’s in 4th-quarter. But yeah, 4th-quarter sweets will be in a very low because major suites for the swee production is happening in second and 3rd-quarter.
Abneesh Roy
Understood. My second question is on the demand-side. So again, here 3% volume growth versus the first-half early teens growth, it’s a dramatic slowdown. So — and when I see even in Q3, India’s largest biscuit company is seeing 6%, 6%, 6.5% volume growth and you are seeing 3% volume growth. So could you tell us, is there some market-share loss? And here I’m not referring to the official market-share data, it may or may not be relevant. My question here is what really happened? How much is the impact of the cut, for example, at INR50 price point, if you could take us through that, because there you can’t take a pricing growth. And when you compare your 3% growth to India’s largest company at 6.5% in the same quarter, we are living in the same quarter, same India, why there is so much of a divergence here? Both are in the snacks category. So if you could tell us how you see near-term volume growth coming back?
Manoj Verma
Sure,. So one is that 3% is not a right number to look at if we speak about our revenue volume growth, so it’s 8%, you know — and this somehow connects with your cut. So last year in this quarter, all our large pads had 10% extra, which was not the case because of the prices in any which way that was a lot time-bound promo what we had done. So if I look at revenue volume growth, it is 8%, that is one. Second is that Western snacks, the category which contributes about 8% to our business and is at zero growth, right? That’s the second reason. So therefore, other than this, if you look at the ethnic snacks, the other category are well on-track. So there’s nothing to — no, which really is concerning or worrying for that stuff. So this is where we are. So this number looks low because last year it was 10% extra, which was going, which has not gone this year
Abneesh Roy
And 10% extra is there in Q4 also in terms of base.
Rishabh Jain
Last year, yes, it was — so this was there till — this was there till Q4. So that’s when we ran this program last year for six months.
Abneesh Roy
Okay. Understood. So last follow-up here, so essentially at INR50, what has happened in terms of grammage cut there? And Q4, you expect some recovery because you have said that Western snacks there is a recovery. So in terms of volume growth
Manoj Verma
So Amneesh, largely we had taken some pi rupeat and rupee in last week of December. That’s what we’ve done. And Q4 also we’ve seen — we’ve seen good growth coming in, good pricing support from raw-material sides. So we see again a good recovery in margins from that plan.
Abneesh Roy
One follow-up, where have you seen softness? Because other companies any big softness in until now? It may have corrected.
Rishabh Jain
We have not seen in power, but we are seeing softness in a key commodity or key commodity, all key commodities.
Abneesh Roy
Okay. Thanks. That’s all from me. Thank you.
Rishabh Jain
Thank you.
Operator
Thank you. The next question comes from the line of Percy from IIFL Securities. Please go-ahead.
Percy Panthaki
Hi, sir. So this quarter, if I look at your ASP, it is around 9% Y-o-Y. If the volume is 3% and the price is — sorry, sales is 12%, it means that the average selling price either because of reduction of promotion or the price increase itself, whatever be the route or path, but effectively the average selling price has increased by 9%. So given the actions that you already put in the market, including some changes in December, et-cetera, how much Y-o-Y growth in the ASP you expect in Q4?
Rishabh Jain
So Y-o-Y we look at it would be around say 3%, 3% kind of. So 1.5% we have already done. And now, 3.5% kind of a growth you will see ASP growth.
Percy Panthaki
No, no, sir, 9% is already there in 3rd-quarter. So 4th-quarter has to be more than 9%, right?
Manoj Verma
No, no. So again, Percy, let me explain it to you. While it looks 3% — actually it is 8% growth, revenue volume growth.
Percy Panthaki
Sir, I understand that. I am saying reduction of promotion is also pricing in a way, right? So the average selling price per kilo has gone up by 9% Y-o-Y this quarter. I’m saying that some initiatives have happened probably in December and January, which have not fully affected the 3Q. So what would be the ASP growth for Q4 given whatever actions already taken? That is my question.
Rishabh Jain
So more than 1.5% in Q4, what will do?
Percy Panthaki
Okay. So around 10% to 11%. And given the inflation that you have seen, would that be enough for you to recover the hit on the margins that have happened this quarter or there would still be some sort of partial hit which would still come in Q4 and maybe can be recovered only in Q1 or Q2.
Rishabh Jain
So largely that’s what we’ll do. We’ll do 1.5% price — price increase in Feb and March perspect. That’s what we’ll do, number-one. Number two, we are hopeful that we’ll again come at gross margin of close to 30% plus or 31% and that’s what we have. And in next three to four months, again, we will be planning to — we are working on to come at gross margin of volume of gross margin. That’s what we plan. But yeah, in this quarter, what are our gross margin? This plus.
Percy Panthaki
Got it. My second question is on the costs under the gross margin, which is the employee cost and the other expenses. So the employee cost is up around 30% and other expenses is also up like 21% or so on a sales of 12% growth. So what are the reasons that the growth here is higher than the sales growth in both these line items? And when do we see this normalizing and coming in-line with the sales growth by which quarter that will happen.
Rishabh Jain
So two things basically, in this quarter, 3rd-quarter, the ad cost and other expense, which is which is largely compared to second-quarter and that’s what increasing — that’s what major spend was in ad because it’s already booked, there was big suite in festivity. So we need to do that. That’s what our business is. So that’s what one cost which has increased in this quarter number from employee lens, there is ESOP cost and there is other factories which is — which is getting underutilized and people cost will speak. So that’s what any factor which has started in last 12 months, the people cost is high increased. But yeah, when once we see utilization up, this will again come at a normal level. But for what — to the point, from next year, first-quarter, we’ll see again normalized growth in employee cost.
Percy Panthaki
That’s what we see. Okay. So by Q1 next year, both other expenses as well as employee cost should grow more or less in-line with sales, right?
Rishabh Jain
Right.
Percy Panthaki
Right. Okay, okay, sir. Thank you so much. That’s all from me. All the best.
Rishabh Jain
Thank you.
Operator
Thank you. Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. The next question comes from the line of Darshit Vora from Asset C Meta Investments. Please go-ahead.
Darshit Vora
Yeah. Hi, am I audible?
Rishabh Jain
Yeah, please go-ahead.
Darshit Vora
Yeah. Thank you for the opportunity. So my first question was that we are having this roadmap of ramping-up our capacity to 70% utilization, right? So could you give me some kind of a roadmap or some internal target wherein how and by what timeline would you be able to achieve this kind of utilization level?
Rishabh Jain
See, so largely your target is to grow volume by around 17%, 14%. That’s what target is. This quarter was an exception, but the overall target is to grow volume in 18% at least and that’s what we have built the capacity in last three, four years and that’s what our target is for next week.
Darshit Vora
Okay. Next, how much time did you say?
Rishabh Jain
So next we use the target, at least we want to grow capacity volume
Darshit Vora
All right. Okay. And with respect to margins, so this time we’ve seen quite a fall. How do you see the raw-material prices move from here and also by when do you think the margins will be back to our usual numbers.
Rishabh Jain
So the 4th-quarter will eventually improve from here because this was an exception, oil prices has increased readily and in a month’s time. So it’s a — so that’s how we are passing the prices substantially in a turning time. But yeah, overall, we see in the next two quarters, we’ll again at decimal target.
Darshit Vora
All right. Okay. And finally, just like to close. Would it be — like would it be possible to either give a range or relatively speak about gross margins across product categories?
Rishabh Jain
Yeah, it’s difficult. We can speak on one-on-one on this.
Darshit Vora
All right. All right. Yeah. Thank you so much.
Operator
Thank you. The next question comes from the line of Disha from Ashika Institutional Equity. Please go-ahead.
Disha Giria
Hello.
Operator
Yes, Disha, please go-ahead.
Disha Giria
Yeah, hi. So if I see your 3rd-quarter FY ’25 presentation in terms of core and focused market mix, it clearly states that the that the focus market has gained year-on-year in terms of revenue contribution. So can you specify any such particular market where you have gained market-share?
Manoj Verma
So we have gained market-share across focus states if you look at, right, be it the smaller one like Garn of the Karnataka or you look at the large states like UP also for that stuff. This is where it is. So there is a positive movement across these focus states.
Disha Giria
Okay. So can you specify any quantum of market-share increase?
Rishabh Jain
So quantum, see, it’s for a large set like say UP, it’s a 30 basis-point — 60 basis-point increase over last year, whereas if I speak about smaller state like, there is a 300 basis-point movement which has happened, but it’s a small-size of price is not as big kind of. So it’s a very.
Disha Giria
Okay. And then your other states contribution has slightly declined. So what is the reason behind that?
Rishabh Jain
So two things. One is that other states, if you look at now in terms of nine months, you will not see this now stop this question would not come up or rather the reverse question would come. But anything other states our contribution of suite and gifting is very-high because there we play on the back of model trade. That’s our largest business there, right? And quarter three and quarter two when I — as I was talking about that there is a shift from quarter three to quarter two, which has happened on this stuff. So other space, if you look at on a nine months YTD basis stuff, they’ve grown at 23.7%.
Disha Giria
Okay. My next question is, I just wanted a clarification. In your presentation, the volume growth is around 3% and you have mentioned it over the call that the revenue volume growth grew by 8%. So I’m assuming the difference is only — I mean in terms of the changes in your package rescues, is my understanding correct?
Rishabh Jain
Yes, that’s correct. Yeah.
Disha Giria
All right. Okay. Yeah, that is it from my end.
Operator
Thank you. The next question comes from the line of Mehul Desai from JM Financial. Please go-ahead, sir.
Mehul Desai
Yeah. Hi, sir. My first question is on the recently-acquired Hazelnut company. How do you see sales growth panning out for this entity in FY ’26, ’27? And what is the kind of capex that you would look at in FY ’26, ’27.
Manoj Verma
Yeah. So this has currently is a very small and it’s just added in end of last quarter, we don’t. So largely we see that in next year, it will be close to INR90 — between INR200 crores top-line that can — that brand can give growing very good. And number two, from capex plans from overall lens, we — we see close to INR40 crore INR50 crore of capex largely to utilize — to do some — to build efficiency in the system. That’s what we will do next year.
Mehul Desai
INR45 crores to INR50 crores.
Rishabh Jain
Yeah.
Mehul Desai
And will Hazelnut require capex?
Rishabh Jain
No, no. So that will not fund from Bigaji because we already funded largely. So that will be very minimal capex because they already have good — good facility, they just open outlets. That’s what they need to do and not major capex in that plan.
Mehul Desai
Understood. And broadly, this, this acquisition, I mean it won’t be a — the margins are better than our current company-level margin.
Rishabh Jain
Margins are better than current company. Yeah.
Mehul Desai
Understood. And lastly, in your core markets, the growth are also — I mean the ethnic snack growth would have been in double-digits or is the trend different in terms of segmental growth within core and focus?.
Manoj Verma
No, no. So it’s in-line with this gap. So core is relatively even better in this case. So ethnic has done even better there.
Mehul Desai
Got it. Thank you so much. That’s all from my side.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and one. The next question comes from the line of Harsh Jain, an Individual Investor. Please go-ahead.
Harsh Jain
Yeah. Hello and thank you for the opportunity today. So my question was regarding Delhi. Being a Delhi resident, I can say you were quite there in Diwali season, you know. But I think you kind of trailed off after that. So I want to hear your stories,, sir. And also I believe Bikaji’s quick commerce and department of stores presence have been quite low. So I want to hear your commentary. Thank you.
Manoj Verma
No, no, certainly, yes, I think your observation and what you have — what you’re talking is in-line exactly where we stand. So Delhi, if you look at all modern trade stores or which is, say, be it any Reliance, be it demand or the large disting stuff, you will see our good presence in — during Diwali gifting and all. But yes, in terms of traditional trade coverage, it is by far low and that’s where we are working on. So very soon — when I say very soon in say couple of quarters from now, you will see a changing trend in Delhi as well.
Harsh Jain
Yeah. Sir, one more question if I please mat. So can we see further acquisition in Delhi area?
Rishabh Jain
So it’s a long — we don’t see any major acquisition in coming year. That’s what our plan is to grow organically and to use utilize the capacity what we’ve already built. And Delhi is very near to began and logistic not so big in Delhi. So we’re majorly focus in next year in growing organically. That’s what we’ll do
Harsh Jain
One more question please wouldn’t it better to you know open QSRs in Delhi you know, for more customer engagement and all?
Rishabh Jain
Yeah, you are right, but the major focus is currently in Rajasthan. We will be opening in Rajasthan, two QSR outlets, that’s what we’ll do. Delhi is maybe next one and a half, two years post and half-two years, not immediately.
Harsh Jain
Yeah, yeah. Yeah, sure. Thank you.
Rishabh Jain
Thank you.
Operator
Thank you. The next question comes from the line of from NV Alpha Fund. Please go-ahead. Hi, sir.
Naitik Mutha
Thanks for taking my question. Sir, my question is, can you call-out any PLI incentive that we have received in this quarter and what was it in the last quarter?
Rishabh Jain
Okay. So basically, currently we are booking PLI income of close to — this year will book PLI close to INR14 crores per quarter and we will receive PLI from — from govern from government maybe in this quarter — 3rd-quarter by March, I mean government is very proactive to do all the audits and to release the fund. So by March, we will receive PLI of last year, FY ’24, that’s normally a one-year lag, filing of claims, audits and everything. So normally that’s a one-year lag. So we’ll receive PLI for last year and for this year we’ll receive next year. That’s what that’s the process.
Naitik Mutha
So during this quarter, we have not booked any KLI income in the 900 million.
Rishabh Jain
We have booked income.
Naitik Mutha
We booked INR40 crores, right?
Rishabh Jain
Yeah, yes.
Naitik Mutha
And what was this last year same quarter?
Rishabh Jain
Same
Naitik Mutha
INR14 crores, okay.
Rishabh Jain
Yeah,
Naitik Mutha
Got it. Also, if you could talk about — you mentioned that we have seen some softness in the raw materials. So if you could give a little more color on the same, which raw-material exactly have you seen softness that wouldn’t help, sir.
Rishabh Jain
So all key commodities, be it — be it our key commodity-like Modal or poretto or Peanut,, all key commodities have seen softening of prices because the fresh drop time normally December is the time that fresh drop comes in and we see a good softening of price
Naitik Mutha
In this, go-ahead. That’s it from my side. Thank you.
Rishabh Jain
Thank you.
Operator
Thank you. The next question comes from the line of Nitin from Emkay Global. Please go-ahead.
Nitin
Yeah, thanks for the opportunity. Just wanted to check on the QSR initiatives. So have you rolled-out stores for the pilot which we were planning to do?
Rishabh Jain
Yeah, so this first first QSR coming in next week by next week mostly so in Rajasthan
Nitin
Can you help me like where exactly that this would be
Manoj Verma
Seeker
Nitin
Okay, okay. Okay. And the second question is respect to moved down. So we were hopeful of some benefit coming in here. So any sense you can provide what is the deflation we see with the new arrival of?
Rishabh Jain
So normally we see it close to 14%, 15% reduction in prices of Motal compared to last year?
Nitin
And what is the contribution of Motal?
Rishabh Jain
Motal contribution is close to 10%, 9%, but I’ll come back with the number.
Nitin
Sure, sure. Thank you. And lastly, do we — are we looking for any commodity covers in terms of the volatile raw-material funding?
Rishabh Jain
Other than oil, we do major cover of most of the commodity, key commodity.
Nitin
Okay, sir. Thank you. Thanks so much. Appreciate.
Operator
Thank you. The next question comes from the line of Abhishek Kumar from Scantam Wealth. Please go-ahead
Abhishek Kumar
Hello. Hello, good afternoon. So my question is partly in continuation with the previous participant’s question. So as a policy, so do you guys have any mitigating present policies with respect to such wild swings in the raw-material prices, especially our key materials like palm oil, potatoes and dolls. So do we have a stated policy wherein if we do keep our such raw-material inventories for a few months or anything on those lines, it would be great if you could share.
Rishabh Jain
So normally we do like for key commodity other than edible oil, we do long-term contracts with the vendors to hedge the price and that’s what we started one and a half years, 1.5 years, two years back largely. And this has helped us in protect the margin. But yeah, edible oil, we normally do for a very, very shorter time and normally industry also do the same. So other than edible oil, we normally protect the margin and hedge all the raw materials.
Abhishek Kumar
Okay, okay, okay. Thanks. And can you give a rough — with the split of our raw-material basket as in how much oil or dal potatoes that would constitute as a percentage of totally? Any rough figure?
Rishabh Jain
I can come back with the numbers for each commodity.
Abhishek Kumar
Okay, cool. Thank you. Thank you.
Operator
Thank you. The next question comes from the line of Valun Singh from Alf Accurate Advisors. Please go-ahead.
Varun Singh
Yeah, thank you for the opportunity. Sir, sorry, I missed your commentary on raw-material costs, on the palm oil prices. So what is the expectation and outlook over here? And palm oil is what percentage of our total raw-material cost basket, if you can help us understand that.
Rishabh Jain
So palm oil currently is also at peak. It’s not — it’s — its peak was INR140 currently, sir, close to INR132. It’s at the peak at level at now. We see some reduction in import taxes from government, of course, budget, it has not came. But yeah, all the — that’s what we are hoping. But yeah, overall palm oil we see next two quarters at the same level, and it’s a big — overall its contribution is big in our overall purchase.
Varun Singh
So of our total raw-material basket, palm oil would be what, almost 50%, 60% of the total cost,
Rishabh Jain
Not 50%, but overall close between 20% to 27%.
Varun Singh
Okay, understood. And what is the quantum of price hike that we need to maybe take from here onwards to offset the impact? And can we expect maybe by next quarter you know kind of or when can we expect the margins to be reflecting our — I mean, given that we have the ability and power to take such kind of price hikes, if you can give some understanding on that, sir.
Rishabh Jain
So largely in next two quarters, that’s what we are working on that we come on the — on the margin what we are working last two quarters. That’s what we are working on
Varun Singh
Okay. So in October, you already took 2% to 2.5% price hike and more price hikes expected. You want to call-out anything on that part?
Rishabh Jain
Yeah, largely one price hike is expected and that’s what we will do look at all the business scenario, sales scenario, but one price hike is expected in the quarter.
Varun Singh
Okay, sure, sure. Understood. And sir, last question is, on volume growth, overall recovery, you highlighted 13% to 15% is the aspiration. So that is — that number is very much on the track. I mean looking at the January month, how the business has gone for us.
Manoj Verma
Yeah, that’s right. So this is well on-track and I mean should be in-line with what we have said.
Varun Singh
Okay, sir, sure. Thank you very much. Thank you.
Operator
Thank you. The next question comes from the line of Aditya Tambi from Capital. Please go-ahead.
Aditya Tambi
Hi, thank you for taking my question. Could you please provide me a split of how much of our sales are coming through general trade versus modern trade?
Manoj Verma
Sorry to say again
Aditya Tambi
So can you please provide us perspective of how much of the trade is coming from general trade versus modern trade.
Manoj Verma
So general trade is the largest contribution for us, which is about 84% — 84% 85% coming the general trade, modern trade is about 8% percent.
Aditya Tambi
Okay, got it. And can you also tell us that how is the price hikes being taken-up by the customer, like do you see them going for an inferior product, a slightly cheaper product or they are embracing the price increase or the grammage decrease that is being done.
Manoj Verma
See, I think this is what we spoke about that we have taken a price increase and in this coming quarter — on this running quarter, there is a likelihood or there is a plan to take one more price hike, which would offset now the price increase what we have witnessed on the commodity stuff.
Aditya Tambi
So right. I’m meant to ask that how is the customer reacting to it? Do you see that maybe they are switching to a slightly inferior or slightly cheaper product that is available in the market.
Manoj Verma
Yeah. So inflation is, I think very well spoken and very well imbiked by all the quality consumers, right? And even if you look at anyone using edible oils in their houses, they also know the kind of prices what they’re doing. So yes, quality customer does not look at it as much. But yes, I think the aspirants or the SECT or D certainly consumption at that standpoint would have definitely impacted, but not as much because when you sell a brand you owe the price and that couple of percentage price there and that does not matter as much as long as it’s competitive with the peer?
Aditya Tambi
Right. Thank you. And could you also like give us some flavor on there are any new products which are being planned on launching like in sweets or in snacks or maybe something in slightly healthier segment like many customers are talking about maybe not going with the farm oil and food.
Manoj Verma
So that’s the game in this category, you keep launching, so let’s say — and again, market-specific. So for Northeast, we launched a variant called, right, doing extremely well. But I think till such time it sustains for say, six, eight months. I mean it doesn’t have as much merit to talk about. But yes yet. These kind of NPDs across states, we keep doing and that’s what energize the category and keep the monotony out of it.
Aditya Tambi
Right, okay. And like so just some extra commentary if you can give about how is the growth in quick commerce because I think last quarter you mentioned it’s around 160% growth. So how is it looking like this quarter?
Manoj Verma
Yes. So yeah, e-com because of a small basis what we have. So yes, this quarter, again, it has grown about 86% growth.
Aditya Tambi
Right. Thank you. I think these are all the questions I have. Thank you.
Operator
Thank you. The next question comes from the line of Dharmil Shah from Dalmus Capital Management. Please go-ahead.
Dharmil Shah
Hi, thank you for taking my question. Just a follow-up on the previous participant questions. Whenever there is a sudden price hikes in raw materials, what is usually the policy that company follows? I mean, is it immediately increasing the prices for all the products for the family facts or is it like taking a short-term loss, but maybe gain some market-share? What is the broad policy that company follows?
Manoj Verma
So see the first and foremost and which is that one should not lose market-share, right? So to protect market-share is the biggest one because if you lose share, regaining shares is even a more expensive proposition to do. That’s one. But the approach what we follow is that as we see commodity prices going up. So first is that if there are any kind of schemes running trade schemes, incentives, all that stuff, so we try and knock it off. That’s the first one. Then as we look at that how further we can improve our efficiency so as the consumer hit is the last one to take. But trying everything when it comes and then if we are not able to make-up the threshold, we pass this prices to the consumer. This is how it happens. But this process takes about a month and a half. And also you know as my colleague just spoke about that we do — we have some advanced booking with us. So we can foresee that these price increases are coming and that leaves us with as much time to prepare. Unless and until the price increase like what we witnessed in the oil that — which is much, much beyond what one would have expected?
Dharmil Shah
Understood. Okay. So suppose when there is a price increase or a decrease in the underlying these raw-material prices, the prices — the price changes that you do in your products, be it price increase or decrease, is it based on the competitors prices or it is more based on the raw-material prices?
Rishabh Jain
So both basically, of course, we look at prices, but normally it takes 30 to 45 days to pass-on the prices. That’s what we in as a policy. We see the prices we — and then we eventually pass-on the prices. But we also see the competitors because that’s important for us to leave it.
Dharmil Shah
Is there a policy to be offer better prices than competition or at par or some? Any sense there?
Rishabh Jain
So largely at par with the cooperators?
Dharmil Shah
Understood. And lastly, what — I mean, some of the previous participants — participants also asked, but what would be the raw-material mix? How much would be pharma, you mentioned 2025, what would be the other key raw operative materials and the mix?
Rishabh Jain
So like overall total process is close to 20% at 25%, 30% overall. So all the combined. Yeah, but I can get back to you with the exact with numbers. But yeah, that’s overall se, 30% and there are lot of material because we are into multi-category. That’s overall the benefit that any one like edible oil is exception, but yeah, if any one cover increase, that doesn’t impact much on gross margin, like we are into sweets or milk is a big product, sugar is a big production snacks. To complete, 566 category.
Dharmil Shah
Understood. Thank you so much.
Rishabh Jain
Thank you.
Operator
Thank you. The next question comes from the line of Manish from Invesco Asset Management. Please go-ahead.
Manish Poddar
Yeah, hi. Thanks for giving me the opportunity. So just two questions. First is, let’s say, if I take this impulse packs, which are roughly, let’s say, give or take 38% to 40% of sales salience, would it be right, they are largely at, let’s say, INR10? And if that is so, you know, what is the sort of — how much is the average grammage, let’s because there will be multiple categories. What is the average grammage which is now available in a particular product at, let’s say, INR5 or INR10 pack.
Manoj Verma
Yeah. So first is the small pack of the impulse, what we speak about is INR5 and INR10, right? That’s what it is. And the average ramage, if you look at in a INR5 PAT, it would be about, 16% 18% average if we look at and for INR10, it would be 2x of that. So that’s how it works.
Manish Poddar
And how does it stack versus the other categories in that same lens because I’m not sure how inflation is impacting because there is a basket of products. But let’s say at this price point or just if you — because you are in the market and so you’ll have much better understanding. So in terms of consumption per occasion is 15 grams, 18 grams a good number versus the other categories in terms of this inflation context?
Manoj Verma
Yeah. So I think it’s sort of like-to-like comparison. When you look at say wapers, right, so would be even a lower-volume for that stuff, not grammage if we look at. But then again, the numkes cannot replace the western sands of or kind of stuff and vice-versa. So it is more when you look at that, is it a one-serving kind of stuff or not? So what we believe is that 15 beyond — going below, say, 13 14 grams in a pack will not survise even one-time serving. So that’s — that’s where we look at and we compare within our category space itself. So not with different categories in this space.
Manish Poddar
Okay. So you’re at 16 to 18 grams. That is what you’re trying to say.
Manoj Verma
Okay.
Manish Poddar
Okay. And the second one is second one is, let’s say, in terms of this direct reach, so let’s say the last trailing-12 months, you’ve added roughly 60,000 outlets. How much of this would be, let’s say, in the state of, let’s say, Rajasthan and how much of it will be ballpark in the state of Uttar Pradesh? That would be helpful. These two data points.
Manoj Verma
Okay. So I think Uttar Pradesh would be in-line of about 15,000, 15,000 and Rajasthan would be about 6,000 kind of a number. Well, I can get back to you statewise.
Manish Poddar
So often will not be, but this is useful. This is. Thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Ashish, an Individual Investor. Please go-ahead. You. Ashish, can please unmute your line and ask your question.
Ashish
You. Yes, hi. Thank you for the opportunity. I have one question. Your qualitative comments on the shift from unorganized to organized sector, especially in light of the inflationary scenario, which is happening right now. So does the shift slow-down or how do you think this movement going-forward?
Manoj Verma
So see, this would be purely anecdotal out of our — what we observe in the marketplace because you don’t have any authentic data on the size of unorganized players and all. But we will. Of course, what has happened is that yes, this shift would continue as the consumer and brand awareness goes up. However, you know, what we also realize sometimes that when these oil pressures goes up, so a branded company cannot compromise on quality of products. So the right oil, you know, not used oil beyond the point. However, when we see the local players and organized stuff, so they do not get as impacted as well on this. So that’s the only and would vary from state-to-state. But yes, now if you look at on a trajectory of shifting from unorganized to organized, yes, that is also helping this category to deliver these kind of numbers.
Ashish
Sure, sir. Thanks.
Operator
Thank you. The next question comes from the line of Dharmal Shah from Dalmus Capital Management. Please go-ahead.
Dharmil Shah
Hi, sorry, follow-up question on the price increase again. When you are taking price increase or decrease, is it at Pan-India level or is it based on the regions where maybe a region where you have a better front, you can take more price increase, how is it decided.
Rishabh Jain
So normally based on regions, so normally we see which region is having much impacted because product mix will depend in every region. So we see reason wise and eventually we take the price right. Like MRP increase in family bank is nationally, that’s what we do.
Dharmil Shah
Okay. And would it be fair to assume that core would have maybe slightly higher price increase than the four questions.
Manoj Verma
No, it will not be that SE we get governed with UECP, which is universal in consumer price if let’s say a is INR100 MRP, it would be for consumer both run air and anywhere in that stuff, right? However, what we do, as I was talking about that price increase is also controlled by that if I was running 5% trade scheme, right, and which is, so it’s a kind of realization goes up by as much percentage. And which is what varies from state-to-state looking at competitive pressure, looking at our ambition and the strategic objective of why are we giving it? Is it a tactical or a strategic investment? So those differs from state-to-state. Rest price to consumer continues since there is a MRP increase, it will not be the case that it goes up in one state and does not happen in the other state.
Dharmil Shah
Understood. Thank you. Thank you so much.
Operator
Thank you. The next question comes from the line of Abhishek Kumar from Scantum Wealth. Please go-ahead.
Abhishek Kumar
Hi, I have a question. So we basically categorize markets into core focus and others. So I have a question, how — when does the shift from others to focus happen? So do we have a revenue threshold or a market-share threshold when that — when we start maybe counting other state into a focus state? And once we start doing that, what all changes?
Manoj Verma
Yeah. So I think that’s a very good question. And we have spoken about it earlier also, but let me explain again. See, what we see is it’s not about our internal stuff, it is purely external and from a consumer standpoint, from a shopper standpoint, right? So what we believe is that wherever — when we are in a high single-digit market-share is what we can call that can move upwards in the core state and say somewhere around 3 to 5, 3 to 7 will be the focus state kind of our stuff. Now the logic of cutting these geographies into three parts that there in the states where our brand equity is strong market-share is relatively better, we do different kind of marketing initiatives there. In the states where we hardly are present or we have very poor presence, which is what’s currently parked in our other states.
There is less of marketing, it’s more of route-to-market that you make your products available in the stores kind of musta. So these changes would not happen very random or very fast, but yes, it’s a journey of three to five years. That’s where you see that states would be moving up. So what we believe is that in next couple of years is what a few states from focus, we would shift it to core and we’ll take few states from others who are doing better or where we have our plans to invest that. We’ll shift to focus. To your question, what will we do differently is what we will start deploying people investment on brands and all this stuff would start happening in those states?
Abhishek Kumar
Okay, got it. Thank you. All the best for future.
Operator
Thank you. The next question comes from the line of Shirish Pardeshi from Motilal Oswal Financial Services. Please go-ahead.
Shirish Pardeshi
Hi, Maloj,, thank you for the opportunity. Just two quick question. Fundamentally, in the times where the inflation — food inflation is high, consumer generally do — does the downtrading. I’m just looking at Slide 22, where you have been able to maintain your speaking with have put your call on-hold. Please stay on the line. Hello.
Operator
Yes, please.
Manoj Verma
Sorry,, we lost you. So you. Yeah. Yeah.
Shirish Pardeshi
So on Slide 22, I’m referring, you have been able to maintain the family pack contribution around 59% 60%. The sense, most of the consumer companies are saying there is a downtrading, there is a pack grammage which will come down. Just tell me how you’ve been able to manage because there is a competition angle also because the competition scale has been going up and up in the snacking. And generally, my reference point is that in the snacking business, the small pack contribution would be about 45% to 50%, but you have been able to manage between 35%, 36%. So tell me what’s happening with particularly about your company.
Manoj Verma
Yeah. So, one is that when we say and here that the — it’s a downtrading kind of stuff happening. For our products, if you look at any consumer who has been buying 1 kg pack or say for that reason 400 gram pack will not move to a 13 gram or 30 gram pack kind of our stuff. Also the impulse packs what we speak is more on-the-go kind of stuff, family pack is in-home consumption. So that’s what we have not seen those kind of shift. Of course, another thing what we attribute when we were doing this analysis as we did one campaign because we call London. So maybe but to a certain extent that has also helped protecting our family care and this is where we are..
Shirish Pardeshi
Okay. My second question is that in the context where e-commerce, quick commerce, these cat — these channels are penetrating faster. In the current context, snacking is a big segment and wholesale does give a lot of in terms of distribution and scale. Now in your assessment, does wholesale channel is still relevant to you? And how does it help and what are the activities are doing to scale-up the distribution?
Manoj Verma
Yeah. So certainly, certainly wholesale would always be very, very integral part of our route-to-market structure. Because if you look at this category is available in about 9.2 million outlets, right, and the source to reach to these outlets, the media is wholesale or only. No company can afford to make their direct reach to — anywhere close to these numbers. So that’s where the role of wholesalers is. Now kind of activations, what we do, we do some wholesale be some extra discounting to wholesale now in certain cases where the throughput of wholesale is very-high. So there is alternate replenishment to the whole wholesale. So those are the things we do in that separate wholesale wheat. So yes, wholesalers get this proportion focus in this.
Shirish Pardeshi
And what would be our wholesale contribution to net sales?
Manoj Verma
So to — our wholesale contribution would be upwards of about 50%, 50% 55%.
Shirish Pardeshi
Okay. But for the industry is very-high, about 70%.
Manoj Verma
So our you — which is spoke about that our contribution of large pack is by far high. So yes, the companies who are purely into INR5 and INR10 there, this would be even higher in that stuff. And our coverage, if you look at our reach is also not as high. I mean, I think once we reach, say, about 20 lakh countlets, so perhaps that’s where the wholesale contribution will also go up and will also drive our reach in that space.
Shirish Pardeshi
Okay. And last question, when I look-back, say, sometime September, October and then compare November, December, the promotion intensity discounting, which has gone up because the sales was not happening. In fact, Diwali has not met the expectation of most of the companies. Now is that promotion intensity and discounting which you have seen in the market some places say maybe in the wholesale dominant places. Is that intensity has come down because apparelly the commodity inflation is also inching up or things are status quo in the month of Jan, Feb?
Manoj Verma
No, no, it has certainly come down, not stuff. So the companies are looking at increasing prices and all that stuff. So that’s where it is.
Shirish Pardeshi
Okay. Thank you and all the best.
Manoj Verma
Yeah. Thank you.
Operator
Thank you. The next question comes from the line of Sunil Shah from SRE PMS. Please go-ahead.
Sunil Shah
Yeah. Sir, just to hear the numbers of — and the 4th-quarter of last year has been one of the best-ever for us and we are stepping into this 4th-quarter right now. So clearly, we have burden of our own overachievement of last year’s 4th-quarter FY ’25 will degrew over FY ’24 in terms of the numbers. Sir, my point here is to understand from you, is there any strategic thought process which you are revisiting or re relooking, we have targets of rolling out about 3,50,000 outlets by next year or so. So are we revisiting any of the fundamental structural things that we have thought of at the start of the year and because this year has been tough and challenging specifically the 3rd-quarter. So is there any revisit on the broader thoughts that you have in the company or is it like a cyclical factor and then in the next three, six months will be back on-track. So just wanted to understand, is there any change in thought process broadly terms from the company’s point-of-view?
Rishabh Jain
No, no, there is no change in its thought. Largely, our focus is to drive reach. That’s what our focus is this year also target — from day-one, we started talking that this year will add close to 50,000 new outlets and we are on-track like we have added close to 38,000 outlets and the quarter — in this quarter also, our target is on-track. So that’s what our drive is to have close to 3 lakh outlets this year. And that’s what our target was in this year.
Sunil Shah
So on the product side, Smax or something which is perhaps not doing well, are we revisiting any of those as well?
Rishabh Jain
So no, it’s not like it’s not doing well. Till quarter two, you will see that progression sites are doing very good. 3rd-quarter, as I mentioned earlier also, so largely 3rd-quarter due to Power price increase and revenue also for a few times — few days. So we have stopped the manufacturing of — reduced manufacturing of specifically and that’s what has resulted in 0% — zero growth, but yeah, overall quarter in end of December, again, potato prices came in at normal level and we started the production at peak. So this quarter we again see the Western snacks growing at the same level what we are going.
Sunil Shah
So this challenging environment, do we see any kind of elimination of competition from smaller players or anything or hello
Manoj Verma
. May I request you to repeat the question please?
Sunil Shah
Sure. So this challenging environment, do we see elimination of competition of some small organized players or you know, this is too small a period in which we can see elimination of competition?
Manoj Verma
So competition in small players, if you look at so that’s the cycle, these small — these will — few will come, few will go, that will always be happening kind of stuff because certain the companies not able to sustain, not able to even survive in the kind of environment of inflation and all this stuff. So that always will be the story. If you look at the Nielsen report, any of the state would have at least 200 reported companies who existed and now a few of them have weeded off. So this ongoing cycle.
Sunil Shah
Okay, sir. All the best. Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for their closing comments.
Rishabh Jain
Thank you, everyone. Thank you all the investors for taking time-out. Hopefully, we met your expectations in terms of answering the questions, whatever came up. We’ll be happy to reach-out to you or you guys can reach-out to us for any clarification you wish to wish to see. Thank you organizers for being patient and organizing for this call. Thanks again on behalf of Vikaji.
Operator
Thank you. On behalf of Bikaji Foods International Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.