Bikaji Foods International Ltd (NSE: BIKAJI) Q4 2025 Earnings Call dated May. 16, 2025
Corporate Participants:
Rishabh Jain — Bikaji Foods International Limited
Manoj Verma — Bikaji Foods International Limited
Analysts:
Hazel Rathod — Investor Relations
Nitin Gupta — Analyst
Percy Panthaki — Analyst
Anand Shah — Analyst
Darshit Vora — Analyyst
Abneesh Roy — Analyst
Amit Agicha — Analyst
Manish Poddar — Analyst
Sunil Shah — Analyst
Niril Parikh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Bikaji Foods International Q4 and FY ’25 Earnings Conference Call. As a reminder, all participant lines will be 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Ms Rathod. Thank you, and over to you, ma’am.
Hazel Rathod — Investor Relations
Thank you. Good afternoon, everyone. Thank you for joining us for Foods International Quarter Four and FY ’25 earnings conference. From the management, we have with us Mr Rishabh Jain, CFO; and Mr Manoj Varma, 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 — Bikaji Foods International Limited
Thank you,, and thank you all the investors to join the quarter-four and yearly conference call. So this year FY ’25 has been — has been a year of lot of challenges and lot of corrections internally. So major focus in FY ’25 was to set a maintenance house right, be it setting up right process on the card, bringing right people on our bus for a growth journey, setting and all the manufacturing facilities, doing lot of correction in distribution as well as settling sales organization in a right manner like proper SMC company. Also, we done a lot of investment in technology like we have started working — started implementation of SAP and Darwin box for the future organization. Also, we’ve done a lot of experiment with few acquisitions and adding two additional categories. So quarter three — quarter three when discussed last-time, quarter three was a quarter where there were lot of challenges, be it inflationary pressure across all key raw materials and especially edible oil. Western snacks like crop has been dealing in prices in very-high so we production last year, early Diwali. So quarter three was a quarter of challenge. And when we take quarter-four. So there’s a lot of significant improvement be it in top-line as well as in bottom-line. So gross when we see gross margin, there was a significant uptick in gross margin when you see compared to quarter three. So our quarter three gross margin on a standalone basis is close to 30.2% where quarter three was close to 26% and at a consol level, our GM was GM 31.8% quarter-four. And at the full-year, we’ve done at a consol level gross margin 30.7%. This year the company has delivered close to 10.3% volume growth at the at 14.8% value growth, driven by strong demand across our four product lines. So from so from basically market length, so basically overall revenues or revenue will grown 14.8% on a Y-o-Y and 14.6% year-on-year. So volume growth quarter-four was close to 8.9% and full-year was 10.3%. I will hand it over to on business. Yeah, good afternoon, everyone. So the volume growth for the quarter has been 8.9%. Revenue growth for quarter, if we look at is 14.8%, but when we say — and this is net of PLI, when we add PLI to it, so it was in last year, quarter-four, we added PLI for three — three years and that’s what is the reason that when we add PLI, it looks flat. Otherwise it’s a 14.8% revenue growth for quarter-four. Ethnic snacks category, our core category has delivered a value growth of 11.4% in-quarter four. Package suites on the back of the less number of wedding days because this is highly dependent on the season wedding season, it’s a negative growth of 1.4%. However, it will be wise to look at our full-year number, which I’ll talk later. Western snacks, after quarter three, where we witnessed a negative growth and this is what we explained to you all that, that was a deliberate call-in terms of holding our production, holding sales, not a demand issue. And as we had said numbers talk about it that in-quarter four, we came back at a 21.5% growth. 5% growth for the quarter, but then this is on our peak capacities. So a relevant data point would be even more if we look at on a full-year basis. So full-year volume growth of 10.5%, revenue growth of 12.6%, this is including PLI. Net of PLI is 14.6% growth. Ethnic snacks has grown on — at 12%. Packaged sweets overall full-year is a 13.2% growth, Western snacks on the back of a huge negative growth in-quarter three, but at a full-year level is a 17.7% growth, PAPA at close to 12% growth on a full-year basis. So talking about how we look at our markets, so the core markets have on a quarter basis, have grown at 10.1%, focus states grown at 38.6%, other states 12.5% and the exports growth has been 29.4% in this quarter. However, at an annual level, when we talk about the core states growth is 11.6%, focus at 26.2%, other states 15% plus and the exports is at 22.5% growth. We have been reading and hearing that the growth is high on the impulse pack. But for us, by investing behind our marketing plans and marketing campaign, which we also spoke in the last quarter, that was about Bikaji, how London Jao focused more on the large packs help us deliver a higher-growth in the family packs, which has grown at 13.8%, whereas the impulse pack is at 9.3% growth in the quarter. At a full-year level, family packs has grown at close to 16% and impulse PAC at 10.5%. In terms of our reach, if we speak about, so as we got into this financial year, we spoke about that we will — the target what we took was to cross 3 lakh mark in our direct coverage. So glad to inform that we have bypassed our numbers. The team has done a good job in terms of and a consistent improvement in our directory and we have ended the year at 3.11 lakh outlets. When we speak about indirect reach, that has — so this reflects or translates into indirect reach, which is now upwards of 12 lakh outlets. That’s where Bikaji has been present in this year. So from revenue perspective, so we’ve grown at 14.8% when revenue from operation looks flat, but yeah, this is in PLI, it’s 14.8%. From EBITDA perspective, basically quarter three was quarter three was an exception. So quarter-four again, we came at close to 11.2% EBITDA on standalone basis and got consoled it’s close to 10% EBITDA. So from raw-material lens, what we’re seeing and what we explained last-time that this year, all the been set-in a good favor and in good favor like, all the key crops what we purchase are at a very lowest price, which has supported us to improve our gross margin. And also we’ve taken few price hike back-to-back in-quarter three and quarter-four, which has helped us in getting a gross margin back to close to 31%. So that’s start from the presentation. We are happy to take all the answers — questions. Thank you.
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 their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama. Please go-ahead we seem to have lost Mr Abneesh’s line. The next question is from the line of Nitin. Please go-ahead.
Nitin Gupta
Yeah, thanks for the opportunity. My first question is on our reported volume growth at 8.9%. And if we take around 10% organic business growth, we get to 1% realization growth. In Q3, we had 3% volume and 8% sort of organic value growth. So there is a 5% realization growth in Q3. So that growth has come down to 1% in Q4. So can you help me explain this
Rishabh Jain
Can you again repeat, please?
Nitin Gupta
No, I’m referring to your Q3 and Q4 performance. So for the organic business. So as for my calculation, this quarter we have done around 8.9% volume growth and around 10% organic business growth. So there is a gap of 1%, which is largely a realization growth. Same, if I compare with Q3, it was around 3% volume growth and around 8% organic value growth. So there was a gap of 5%. So this 5% coming down to 1%, I’m unable to sort of figure out what led to this.
Rishabh Jain
Our consol growth is close to 14.6% where and volume growth is also in control level is 8.9%, right? So if you look at 14.8%, it’s close to 4% of 5%.
Nitin Gupta
I basically wanted to take-away the M&A part of and the from the financial and wanted to analyze.
Rishabh Jain
So basically volume growth without a standalone is close to 7%, 7.5%. And also one thing, sir, so last year, sir, in this quarter we not added that in the quarter three, quarter-four of last year and quarter — quarter-four of last year-plus quarter three was full of promo — promo pack versus last year there is no promo pack. So also changed this year and product mix also changed. But overall then realization improvement, so it’s close to 3.5%, 34.5% realization, yeah.
Manoj Verma
So this is what we had explained on the last call as well that while it’s looking at 3% growth, but if you look at revenue growth was in-line of 8%. Now this quarter, there is no — there was very little impact of a consumer of a 10% extra, which was there in the year.
Nitin Gupta
Okay. So the bulk of the promotion was in Q3 in the base quarter and Q4 had the less effect of that. Okay.
Manoj Verma
Yeah.
Nitin Gupta
Okay, okay. Thank you. Second question is concerning gross margin ahead. So with palm oil prices now below September sort of have seen a correction of say like the gap from September ’24 is around 17%. I wonder Y-o-Y Malaysian bring it and the duty hike was 22%. So like we seems to be getting in a favorable zone, like we have effective price hikes also. So how do you see the margin outlook ahead in FY ’26 gross margin outlook
Rishabh Jain
Only and farm oil basically. So the peak of farm oil was close to lot of. Of course it’s from peak, it’s reduced certain rupees, but largely it’s 125,, we see that there is little softening in coming quarters. It will be at, but we don’t see it will go beyond this. So 120 will be a new normal, that’s what as an industry we expect from any — from pharma perspective. But overall, this year crop has been very supporting and this year crop is range, monsoon is good. So what we see that overall business gross margin and EBITDA lens basically FY ’25-’26 lens, we want to met our original gross margin by quarter two. That’s what we have told last quarter and we are on-track that this year at standalone level, we are at close to 31.8% GM in-quarter two and that’s — and our target was 32.5%. So we are on-track to achieve that.
Nitin Gupta
Okay. Thank you. And lastly, can you please help me update like what is the cumulative price hike we have affected in Q3 and Q4?
Rishabh Jain
So in Q3 and Q4 price hike was because it was a mix of product mix and also there are lot of changes in impulse spec. So overall at the average level, the price hike is close to 2% to 2.5%. We have taken one price hike in April. So in-quarter three, quarter-four, it’s close to 2.5%.
Nitin Gupta
2.5% you are saying. And this includes the price hikes has we have affected the post-duty increases, but it’s excluding that
Rishabh Jain
This was — we saw in-quarter three, right? So quarter three and quarter-four terms combined we have taken price at the average of 2% to 1.5%. That’s average. In Q1. Okay.
Nitin Gupta
I didn’t get you for Q and your voice dropped.
Rishabh Jain
So in Q1 are busy be taking some prices.
Nitin Gupta
Okay, okay. Thank you. Thanks for the update.
Operator
Thank you. The next question is from the line of Percy Panthaki from IIFL Securities. Please go-ahead.
Percy Panthaki
Hi, sir. Just some confusion on this topic. So if you can just tell us on a consolidated basis, what is the organic sales growth this quarter?
Rishabh Jain
Yeah. So at consol level, the organic sales to 14.8% in this quarter at consolidated level.
Percy Panthaki
So there is no inorganic element at all, is it because that is the growth that you have reported anyways.
Rishabh Jain
So at standalone level, our is grew 11.3% in this quarter and consol level, is grew
Percy Panthaki
And the difference between standalone and consol, what are the businesses which come between the two?
Rishabh Jain
So basically one is PHF, resident factory which we acquired, which we had taken actually in end of last quarter, quarter three, then another one is.
Percy Panthaki
And whatever. Factory is an associate, right? So you would not be consolidating the sales, right?
Rishabh Jain
We have right to merge that and we right to merge that and we need to merge into overall of sir.
Percy Panthaki
Okay. So you are — the consolidated sales does include the sales of Hazelnut factory.
Manoj Verma
It’s very small currently. The top-line of overall.
Percy Panthaki
I can’t hear you.
Manoj Verma
It’s very small as of now. The yearly top-line of in close to INR60 crore, INR55 cro crores at the yearly level we acquired in last quarter three last year.
Percy Panthaki
Okay. Okay. So if I look at organic sales at 11.3, it is lower than the usual 16% 17% growth that we used to clock at a few quarters ago. So what is the reason for this lower-growth? Is it just a general sort of industry slowdown or is there some other reason behind it?
Manoj Verma
Because I think it’s mix of both. So now when we look cut the year in two-parts, say, quarter in first-half and second-half. So first-half was well on-track, close to 16% growth. Quarter three was the year — was the quarter which has actually slowed down both from the external factor and the internal consumption factors as well. So one was inflation, all that stuff, so overall demand. And the second was that we could not supply because of those like what I was talking about that we witnessed almost about, about 15% 20% negative growth on our waste and snack, which was 8% contribution to our overall business kind of first-half. So those were the factors which brought it down. If we look at the upwards movement in-quarter four is by far up and it’s on an upward movement. So to your answer, yes, the 11.5% is little muted growth vis-a-vis the growth what we have been doing, but that also reflects the overall category growth also in that changed.
Percy Panthaki
So is there any visibility on the category growth improving in the near-term or that we will have to wait for that?
Manoj Verma
See, this is a dynamic stuff, but what we really, see and witness in the market both from demand standpoint and also when talking to these people so objectively and subjectively. So we’re seeing that this quarter-four onwards there is a positive movement of urban in-quarter three and till first-half of quarter-four was pretty stressed. And urban also when I say 33% of urban is the metro towns, which actually was flat or have degrown in terms of consumption. This is overall food industry I’m talking about. Whereas Tier-1 and Tier-2 town were doing better, but now there is upward movement across. So going-forward, what we see looking at crop, looking at lot of corrective action, looking at the infusion, what government has done, I think this should only look up. So the worst is behind us, that’s how we look at it.
Percy Panthaki
Okay. So this upward movement, is it already visible on-the-ground to you right now or it’s sort of something that you are expecting will come in the near-future?
Manoj Verma
No, so that’s what I’m saying. So if we compare over quarter three, so all metrics are up and far ahead of what it was in-quarter three. So which is an indication of that stuff. Also, see, one is that you depend only on external factors. Secondly, what we can do, so circle of influence what we call is — so there’s a lot of readiness about preparedness in terms of the marketing campaign in terms of the product mix, the pricing and all. So as we’ll take on — so our end objective is to grow ahead of the category and meet these external factors as well. So both with from macro factors, we see that there is a positivity and should be upward movement. And internally also, so how to fight against this, that readiness also gives this confidence and that’s what we are doing.
Percy Panthaki
Just a clarification on this, sir. You mentioned that Q4 you have seen better momentum versus Q3. But on organic basis, the sales growth is roughly the same, which is 12% in Q3 and 11.5% in Q4.
Rishabh Jain
So 12% in Q3. So if you see standalone basis was close to 6%
Percy Panthaki
Okay, okay, got it. Got it. Second question is on the focus state. Sorry.
Manoj Verma
So it is 6% to 11.5% quarter three.
Percy Panthaki
Got it. Got it. Got it, got it. And just on the focus states, this 36% growth that we have seen. Is there an inorganic component to that as well? And if you can break that out if so?
Manoj Verma
Yeah. So like what Krishab spoke about that the PH factory, which primarily is in this UP state. So that is — otherwise it would be say upwards of 20% — 22% kind of passed up
Percy Panthaki
22%. Okay. Okay, sir. That’s all from me. Thanks and all the best.
Manoj Verma
Thanks.
Percy Panthaki
Thank you. The next question is from the line of Anand Shah from Axis Capital. Please go-ahead.
Anand Shah
Yeah, hi, team. Thanks for the opportunity. I mean, can you call-out how much has and done, let’s say, in the second-half and for FY ’25, it is on an annualized basis, what run-rate is it clocking and what is sort of the ambition for FY ’26?
Rishabh Jain
So THF and Ariba, so THF basically has given close to INR112 crores in-quarter 4 and Ariba is close to INR7.5 crores. So that’s a mix overall from THF and Ariba in-quarter four. Our up from outlook lens, what we see that THF can do close to INR90 crore of business in this FY ’26 — FY ’26 and Ariba can do close to INR50 crores. So that’s — that’s a target what this both brand has taken in this FY ’26.
Anand Shah
Okay. Got it. I mean, Q4, INR18 crores came from these two brands and okay, got it. Yeah. Got it. And on the margin side, would this be at similar margins to the business or how does that stack-up?
Rishabh Jain
So from THS lends, so it’s a retail and retail for retail quarter three is the highest profitable business. Yeah annualized is largely same offer THS. Rebai is not making money as of now because it’s running at low utilization, but it’s very small. Okay.
Anand Shah
And Ariba will largely be for the back-end and the frozen part, right?
Rishabh Jain
I mean, frozen part, right? That’s addition of category for us.
Anand Shah
Got it. Got it. So that will — so that eventually is not more revenue generated, but that will more feed into your QSR ambition effectively scale.
Rishabh Jain
Right, right, right. Got it. QSR as well as export? Because an export frozen part is very big.
Anand Shah
Yeah. Okay. Okay. Okay. Got it. And on distribution expansion, I mean, you’ve been clocking steady growth. So what is the target there? I mean for ’26, ’27, let’s say, will you continue to add 20% plus outlet?
Manoj Verma
Okay. So yeah, so our expansion would be a continued initiative because today we look at we are at about 11%, 12% numeric distribution at a pan-India level. So there is a huge room of growth, but it’s our — the approach what we are saying is that we will do a quality distribution increase, which eventually should reflect in the Nielsen or say the REIT stuff as well. So this year, the target what we had taken last year was to cross 3 lakh direct coverage mark, whereas we ended it at 3.11 lakh outlets, that’s the final number, which it is. Our plan is to add 50,000 year-on-year outlets. That’s the target for next three years. So we would be reaching around 4.5 lakh outlets directly in next three years
Anand Shah
Of 15 mission compounding at least on the distribution side and most of this would be focused markets.
Manoj Verma
So primarily focus market, but yes, there is little room in the focus — in the core markets as well. So that would be a defense strategy so as how to uproot or how to take head-on with the local and the regional players as well. So in the rural of core market is what our focus would be, whereas in the focus market, it will be primarily urban, followed by rural.
Anand Shah
Got it. Very clear. And lastly, I mean 2 to 2.5 is the pricing you have taken in Q3, Q4 and you took one in April, right? I mean, what was the quantum of in April?
Rishabh Jain
In-quarter one?
Anand Shah
Yes, in Q1, yes.
Rishabh Jain
So quarter one is close to 0.5%, 0.5%.
Anand Shah
Point only small one. And so right now, now no plans. I mean you are largely covered with
Rishabh Jain
Right now, we don’t — right now, I think we are done with the — with all the increase in price. And we are hopeful that by this we will be — and there will be lot of product mix and corporation cost-saving program running on. So we’ll be hopeful that with this, we’ll be back on-track with the original margin in GM and EBITDA.
Anand Shah
And that you are saying second-half FY ’26 is broadly well.
Rishabh Jain
Yes, yes. Yes.
Anand Shah
Perfect. Thanks. Thanks a lot.
Rishabh Jain
Thank you.
Operator
Thank you. The next question is from the line of Darshit Vora from Meta Investment. Please go-ahead.
Darshit Vora
Yeah, hello. Am I audible?
Rishabh Jain
Yes. Yes, you’re audible.
Darshit Vora
Yeah. So thank you for giving me the opportunity. My question was on focus state. So we’ve been seeing good growth in focus states when compared to co-states. And we’re also seeing a increase in Family Pack salience of about 100 basis-points year-on-year. So what is it that we’re doing that is driving this increase in salience and also that we expect it to sustain going-forward, especially in the focus markets?.
Manoj Verma
Yeah. So I’ll take your last question first. So yes, we would continue to grow focus states faster than the core states for two reasons. One is that their bases are not as big as what we are in core states. So that’s one reason. Second thing is the kind of the efforts what we are making, the investments what we are making, they have to give us a disproportionate results. So that’s the reason that these focus states would continue to grow faster. That’s one. On the — on the large pack and small pack, for us, large pack is equally important and that’s what is one of our forte or the brand strength that in-home consumption, modern trade, now equity we enjoy more. However, what we see is that the small pack is an opportunity for us. So therefore, the focus would be on driving both these packs, the large pack and the small pack.
Darshit Vora
Yeah. So my question actually was towards understanding that despite increase in focus states, higher than cost states, we are seeing more salience in family packs. So what kind of is driving that thing?
Manoj Verma
So two, three things. One is that when we say today also, if you look at in focus states, our market-share when we look at just for the large pack is by far high. So in the stores where we are selling, so it is more so the distribution is an area of improvement, whereas the store where we are selling large packs, what they are selling is doing good. So therefore, there is a same-store growth also happening, which is basis the large pack, that’s one. Second is modern trade and New edge of new edges, the QCOM growth is on the back of large pack. That’s the factor which is doing good. Lastly, the promotional campaign, what we do and mostly what you can really address is on the large pack, like last year six four months, we did a mega campaign, which is Bikajika, London Yao. This was all on the large pack itself. So those are the factors which is helping these large pack grow in focus states and overall also. Like other states, if you look at the major contribution is the large pack. It’s lack — less of distribution, it is more on leveraging the modern trade stores across states.
Darshit Vora
All right. All right. Okay. That’s great.
Manoj Verma
And but going-forward to — sorry, I mean, but going-forward, you will see that when — as we get distribution high, so small pack will also be growing faster. So that’s where — so we are not taking eyes off from the small pack. They have a role to play,
Darshit Vora
Right? All right. So we expect the overall breakup to remain largely the way it is right now with both growing equally.
Manoj Verma
Yeah. So now going-forward, you will see that the small pack will grow a little faster. That’s what the strategies and the initiatives which are rolling out are the ones because that’s how we will gain new outlets indirect which will not be on account of large pack, it will be — small packs will be playing the role.
Darshit Vora
All right. Okay. But then because of that, would it bring some kind of volatility in terms of volume growth that we see or in margins as well?
Manoj Verma
No, no, not really. Yeah.
Darshit Vora
All right. All right. Thanks. That’s great. And secondly, we’ve been seeing slight decline in packaged suites and you alluded to the fact that there was weakness in the wedding season the last quarter and before that. So apart from this, any other reason that is playing into this decline in package field growth?
Manoj Verma
No, no. I think, see, the right way to look it is at a full-year number, that’s one right number to look at. Secondly, see, sweets, if you look at is a key about, say, 75% of our business happens between Raki to Diwali. So that is four months contribute to about 70%, 75% of sweets business, which is really, really big. And that’s where if you look at our capacity utilization is upwards of 100% kind of on the sweet stuff, right? The quarter-four and the rest, so quarter one and quarter-four are the weak quarters on that sub. And then they are highly dependent on the sweet season. So, sorry, the wedding season because that’s when we sell bulk sweets as well. Now if we look at the number of salag or what we say the wedding days this year were by far less than what it was in the last year quarter-four. So that’s the reason that this quarter-four looks good or looks small, but small-business to our overall pie. Hence — hence, I don’t think that that’s a cause of concern, point-to-point.
Darshit Vora
All right. All right. Thank you so much and all the best for the future.
Manoj Verma
Thank you.
Operator
Thank you. Before we take the next question, we would like to remind the participants to press star and one to ask a question. The next question is from the line of Abneesh Roy from Nuvama. Please go-ahead.
Abneesh Roy
Yeah. Thanks. Am I audible this time?
Rishabh Jain
Yes, yes. You’re audible.
Abneesh Roy
Sure. Thanks. So you had a plan for house of brand strategy over a longer timeframe, could you update us on what’s the thought process there? Are you going a bit slow on that so that you can first understand on these acquisitions, what is the way forward? And on your own restaurant foray, if you could update FY ’26, what is the expansion plan there? Are you happy with the FY ’25 performance of the restaurant business?
Manoj Verma
So restaurant business, Abneesh, as we spoke about that we will get into that stuff. So yes, we opened one store in Rajasthan, that’s a so-called QSR stuff in seeker last quarter we did one. And this year also, we’ll add about four to five outlets, that’s the — and this is what we had called out. So therefore, in our growth plans, QSR is not really adding up. We are not taking any large numbers on that — on that account. Certainly for next year hereafter is what we’ll call-out on our QSR strategy. So that’s how — that’s how the plans are. Other than this, on the House of Brands, if you look at THF, yes, it’s doing good which is a retail brand, the aggressive plants they have falling well in-place. That’s where it is. Bujaljee, which was a small acquisition and that was clearly to play on the modern trade and on the e-com platforms as a brand B strategy that has also now is falling on place. But going-forward, what our plans are that we will not add, we’ll try and build BC even a larger brand. That’s the strategy.
Abneesh Roy
Sure. My second question is on the demand-side. Most FMCG companies in Q4 call have said a strong outlook, better outlook in FY ’26 versus FY ’25. You have delivered around 10% kind of volume growth in FY ’25. Of course, there is a aid of the 10% extra grammage which you’re giving, especially in the first-half. So if you marry the extra grammage which you are giving you, which is there in the base and softer food inflation and some of the other macro wood monsoon, lower interest rates, then how do you see your volume growth, would you target a high single-digit kind of volume growth in FY ’26?
Manoj Verma
No. So what we are looking at it is 12% to 13% kind of a volume growth in ’26. And I think our strong plans in-place, so what we say should happen. I mean, that’s how we look at it. But what has changed?
Abneesh Roy
Because I remember in Q3, most of the FMCG companies, including you are saying the overall demand situation is quite challenging and Q3 call was having lot of questions on the real volume growth ex of the 10% grammage and all that kind of question. And now within 1/4, you have seen a good performance improvement, Q4 11% like-to-like standalone growth versus 6.5% previous. So it’s a good performance. And now you’re talking about 12% to 13% volume growth. So one, how confident are you? And second, is this more of a sector change or is this something you have really cracked away gaining market-share, which is giving you the confidence level.
Rishabh Jain
So Abneesh, two things. Like as you started-off with quarter three, let me answer that. Quarter three, we witnessed that about 20% negative growth on Western snacks, volume growth I’m talking about, right? Now Western snacks contribute to 8% to our business with a 20% negative growth and we called it out that that’s not a demand issue. That’s purely a supply issue and a conscious call which we took, right? This quarter, again, we have bounced back with upwards of 20% growth in the Western category. That in itself, that’s one. Second is that last quarter, the denominator or the earlier, the 10% extra scheme was also impacting our volume growth, which we tried and clarify that net of — if we look at revenue volume growth, it’s upwards of 8.5% kind of so that’s one on — I mean, or quarter-four over, quarter three. Going-forward, what we are saying is that this overnight these growth will not come up the kind of the positive momentum what we are seeing the way the company, Nielsen is projecting kind of a growth. So this would be an upward trajectory quarter-on-quarter two and thereafter. That’s what it is at the holistic level, we are optimistic on a, 13% volume growth.
Abneesh Roy
Okay. To your last big question on capacity expansion, you did say growth was slightly constrained because of capacity being full. In FY ’26, any plans to add capacity in any of your verticals, either through third-party or in-house or
Rishabh Jain
So in, we doesn’t need a major capex. It’s largely a fuel fully manual process. So yeah, there is small plan to increase the capex, but it will not involve a major investment. But yeah, in, we also taken a growth of close to 10%, 11% in this year.
Abneesh Roy
And other verticals, anything you want to call-out on capex?
Rishabh Jain
On capex perspective, so that we are investing in one big warehouse in, so that in will be close to INR65 crores and it will be part of CVIP what we have filed in March — the numbers of March ’25. So that this mega — big warehouse will come up in next 3.5 months. So this will solve logistical issue. Currently, we don’t — we don’t have space to keep stock more than two, 2.5 days. So that’s lot of production issue coming — keeping up. So that will solve this production issue and it will help in improving our fill rate and fill rate and sales. So these are big investment coming up in this year and there is no any other major — major capex addition. That’s what we — it will be regular maintenance capex that will be coming up in this year.
Abneesh Roy
Okay. So thanks. That’s it from my side. Thank you.
Rishabh Jain
Thank you.
Operator
Thank you. The next question is from the line of Amit from H.G. Hawa. Please go-ahead.
Amit Agicha
Good afternoon, sir. Thank you for the opportunity. Am I audible, sir?
Rishabh Jain
Yeah.
Amit Agicha
Yeah. Thank you for the opportunity. Sir, my question was with respect to like the — what is the ad spend as a percentage of revenue and how do you evaluate the ROI across campaigns?
Rishabh Jain
Yeah. So our ad spends as we call well within budgets, what we say is close to 2% is our ad budget. And this is what we park aside for the years — the year to come as well. So that’s the kind of number we are budgeting or maybe a little ahead of that. So the moot point is that yes, we believe in marketing investment and would continue to do that. ROI, when we speak about, so it’s see, it’s not as easy because there are lots of overall umbrella branding umbrella activity what we do to help our entire business grow. So in the name of Bikaji, not brand-specific. But yes, whatever we do, say, for example, if you — if you — the mega campaign, what we did was on the BKLG, so which is Bikaji, London. So we saw a huge upward increase in this — in this large pack. And that’s what has helped large packs grow by far ahead of what the industry or the category growth or other players have seen. That’s one. Second is that our gifting, so which is season, which is gift packs and also the suites. This is a huge number. Now while selling in is one part, you also have to ensure that offtakes happen or complement the sell-in part. And to support that, there is again a huge media investment what we do across communication vehicles and this is where we spin. And the proof of pudding is that — and how we look at it is that if we could generate offtakes, so there is least of leftover or nil leftover at our retail outlets is — speaks about the success of the marketing investment and this is how we look at it.
Amit Agicha
Okay. And the second question was to like the model trading e-commerce, like what share of our revenue comes from these channels? And do you plan to expand them further?
Rishabh Jain
Certainly, yes. So if you look at the last three, four years, modern trade has been — or both these channels have been growing by far than the overall business or general trade to compare with. We would continue to invest in both these platform and would be growing. So modern trade is almost 2.5 times, 2x of the overall company growth. This e-com channel is even higher. So this is at about has grown at almost about 50% last year. That’s the kind of growth. And we see this continued momentum.
Amit Agicha
So can you give a number like what percentage of revenue comes from these channels?
Rishabh Jain
So about 8% comes from our modern trade channel contributes about 8% and 2% is this Q-com e-com business.
Amit Agicha
But any plans to enter any adjacent FMCG categories like beverages or something like snacks?
Rishabh Jain
Not for now.
Amit Agicha
Thank you, sir and all the best for the future.
Rishabh Jain
Thank you very much.
Operator
Thank you. The next question comes from the line of Manish Poddar from Invesco Asset Management. Please go-ahead.
Manish Poddar
Yeah. Hi, thanks for doing the call and I hope things are good because you had on event scheme of things. So just two questions. One is, in this pricing which you’ve taken, how would we stack against competition, let’s say, both unorganized and organized, would they have followed a similar pattern? Just if you could give us some sense on that?
Rishabh Jain
Okay. So see, if we compare against organized players, so we are now — so this is one when we say 4P stuff, so pricing is one of it. We cannot be a very over-indexed or under-indexed. So this is almost hand in end. But of course, when we speak about the local, regional or say the unorganized small players, we never look at it and they are always cheaper. So they are at about what 0.85 index to what we are. That’s the kind of differential. And we are very mindful. So when we take any price increase, so it’s not a random call or it’s not in isolation. We do quite a study in terms of brand-wise, in terms of company-wise, geography-wise and that’s how we take price increases.
Manish Poddar
So would it be right that these — let’s say you’re saying was a price index, but let’s say the unorganized players would have also taken a price increase alongside or the cost. Yes, the quantum which taking in that ratio.
Rishabh Jain
So with the commodity price increase like if palm oil has moved up from 85 to say 140 or 125, so they also cannot survive. So they have also taken price increase. I’m saying the differential would continue.
Manish Poddar
Okay. And, if you can call-out, let’s say, how — the second one is what is the growth in Rajasthan for the full-year, if you can help me with that?
Rishabh Jain
And Rajasthan for full-year is about 12% — close to 12% is the Rajasthan’s growth
Manish Poddar
In volume terms.
Rishabh Jain
Volume terms would be about 8.5% kind of volume growth, 8% or 8.5% kind of. I can get back to you on this stuff, but yes.
Manish Poddar
Okay. No, thank you so much.
Operator
Thank you. The next question comes from the line of Sunil Shah from SRE PMS. Please go-ahead.
Sunil Shah
Yeah. Thanks for the opportunity. Sir, my question is slightly on the long-term basis. Say if we want to have a thought process for the next three to five years and as a company, if we intend to grow at a 15% CAGR kind of a number, sir, A, the driver would be that we are increasing our distribution network, that 3 lakh 11,000 will scale-up to about 4.5 lakh over the next three years or so, 50,000 every year. So that is one thing that we are increasing the presence. The second is once our presence is established, then we can keep on introducing new products over there. At the same time, we can increase the same-store sales. How are we looking at this situation over a long-term point-of-view in terms of distribution, in terms of new products, in terms of same per store, specifically in the context of competition, which is a — which is really there for us and also the ability to have price rise in a scenario of increased raw-material prices. So if you could give us some indication strategically from a three-year point-of-view or a slightly longer period is also good. Thanks, sir.
Rishabh Jain
Sure. Sure. So see, when we say 15% growth kind of a number, so the assumption is that about high single-digit number would the category growth. So that would be organic growth. We’ll have to hold to that. And then we have to do a differential growth so as to gain market-share. As we speak, we are less than 9% or say 8.5% market-share. So there is a huge headroom where we don’t aspire to be say to be say healthy ramps. But clearly, if we say that our aspiration is in next three to five years’ time, we should be at about 11.5% to 12% market-share, that’s the ambition. And this would — we can achieve if we differentially grow to the category growth. Now the growth drivers would of course be the distribution, so that’s reach. And the second is the throughput increase. So in the core states where our market shares or our penetration is already high. There the task is to grow same-store growth throughput. And in the — so here, if you look at, say, let’s say if core states or say Rajasthan has grown by 12%. So here the same-store growth is 8% and four% is the new-store growth kind of a number, whereas when we get into focus states, this is reverse. So it is more led by new-store growth and not as much as the — as the throughput growth. Now to complement our distribution or the route-to-market initiatives is the role of marketing so as to create brand awareness and which is what will help generating offtake, same-store growth and all. That’s what we are — that’s the strategic call is. On — in terms of new product introduction, new categories, that’s what we are keeping out of scope when we speak about these the growth plans going ahead?
Sunil Shah
Right. Okay. Sir, in FY ’25, yeah, it’s not been a year which has been really great that we can boast about it. Anything which was structurally important for us, which will kind of deviate us from the three-year thought process?
Rishabh Jain
Yeah. Sorry, I missed on one of your earlier question wherein you spoke about the pricing part as well, that also what happens now. So what happens is that, of course, last year this was the second-half wherein the inflation challenges came in. So this quarter three was a derailer, right? And this hit not only us, the overall FMCG industry or overall industry per se kind of worked up. I think the resilience what we as an organization showed is that still did best-in the worst and bounced back-in quarter-four. We going-forward, however, this category is highly dependent on the commodity prices. But I think the departure what we have already made is that we are not solely dependent on the on the commodity prices, the ability to react and ability to make predictions of what is coming our way is what I think we are much better prepared than what we were before. So that’s the structural change, what change what we have done and built-in the organization. However, these are dynamic numbers that sometime these commodity prices are by far beyond expectation and that impacts us, but then I think that’s the way this will move.
Sunil Shah
Sure. Fair. Fair enough, sir. Thank you so much and all the best for the future. Thanks.
Operator
Thank you. Participants may press star and one at this time to ask a question. Participants who wish to ask a question may press star and one now. The next question is from the line of Niril Parik from Avriga Capital Advisors. Please go-ahead.
Niril Parikh
Hi, sir. I had a basic question since I move the company. Pardon me for my influence. Given that the PLI income papers over after three to five years, what —
Rishabh Jain
Your voice is — your voice is not clear. Your voice is not clear.
Niril Parikh
Am I audible now?
Rishabh Jain
Yeah. Yeah.
Niril Parikh
Okay. So after the PLI intern goes away and the manufacturing plants ramp-up completely, from a perspective, what are the steady-state margins that we should think about this company?
Rishabh Jain
So this year talking of after five years, right?
Niril Parikh
Five-Year,
Rishabh Jain
So basically we got we got, are you there?
Operator
Yes. Sorry.
Rishabh Jain
Yeah. So we got PLI till FY ’27. And currently, so we invested in all the plant where we are giving minimum guarantee there is big costs running plant at lower — lower capacity and all the outside plant — new plant are running at low capacity. So of course, PLI will phase-in next two years, but our capacity utilization will increase significantly in next three, four years. And this will offset PLI income and what we think that our steady EBITDA after four, five years should be around 15%.
Niril Parikh
Okay. Okay. And is that driven by any product mix which be improved.
Rishabh Jain
Of course, so base will be — it will be driven by multiple things, be it investing in branding, so it will help in commanding price from consumer — from consumer number-one. Number two, of course, product mix is an important thing because we are already focusing on flu print, which are high in gross margin, currently contributing close to, 15% 16% target is to take this to 19% in next two, three years. Investing in cost-saving program within the organization at each level, be it production, logistics or building strong trade scheme system, so getting proper ROI of each investment what we do, it in sales or everywhere. So there are multiple things going on as an organization, which would help us in — help us in driving this 15% target.
Niril Parikh
Got it. Thanks a lot, sir. That’s from my thank you.
Rishabh Jain
Thank you.
Operator
Thank you. The next question is from the line of Nitin from Emkay Global. Please go-ahead.
Nitin Gupta
Yeah, thanks for the follow-up opportunity. I just wanted to check like the Rajasthan market has grown 12%. So how has been the growth in other core market like Bihar and Assam hello, hello, yes, sir. Yes, sir. Am I audible?
Manoj Verma
Yes, sir, you are.
Operator
Yeah, please go-ahead.
Manoj Verma
Yeah, so it’s you know Rajasthan followed by Assam and then Bihar. So that how is the the growth stuff?
Nitin Gupta
Okay. Thank you. And second question is with respect to at the start of the call, Risher jee has highlighted lots of correction internally. So can you please help us like the key initiatives we have taken internally, like apart from he has deliberated on SAP implementation and box and all and M&As.
Manoj Verma
So I would rephrase that correction. I mean, I think the right way to put it is that keep the improvement. So it would be a consistent improvement or improving over our what we’re doing. So let’s say, for example, ERP. So we were at Microsoft 365 is the ERP, which we have been using. What we felt and studied that now having SAP would help our increase our efficiencies, link all functions better and all. So that’s the improvement or investment we decided to do. That’s one. Right now, the distributor, so this would always be a dynamic stuff that how do you upgrade and the distributors. So as you grow business, the certain distributors, you find that their ability to invest in business, financial or maybe in terms of their bandwidth of the increased business not. So then you have to take certain tough calls and say that now we’ll have to pathways with few of them. So those are the kind of improvement in our distribution network, talking about people, right? So doing P-by-pe, so performance to potential metrics. So there is always a tail which you’ll have to cut and see that how do you improve overall capability standards in that stuff. So those are the stuff. So now talking on HR and he also touched upon the Darwin box, right, got deployed. So earlier the PMS what we were using, we felt that now this would be as the size of organization is growing as the people number is going, we need to have it even a better version of it and that’s where the investment on Darwin Box. So that’s how — no, the improvements over years is what’s happening.
Nitin Gupta
Thank you. And the last bookkeeping question on this employee cost increase for this quarter. Is any specific reason for this?
Rishabh Jain
So if you see it standalone level, standal level, there are some grouping — grouping of — which was not — which was passed last year in other expense, which has been in employee cost. So it was corrected it was done in this year. And overall, the employee cost, if we exclude this is close to 16% increase in employee cost.
Nitin Gupta
Okay, thanks. Thanks for answering all the questions. Just last sort of a suggestion or sort of a help we need in terms of going ahead with the M&As in the business, so it’s getting bit complicated. If you can sort of help us provide a disclosure separating the organic business and the M&As, that would be really helpful. Thank you.
Rishabh Jain
Sure. Thanks for thanks for. Thank you
Operator
Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Thank you.
Manoj Verma
Thank you once again for being on the call. Hopefully, we could answer your questions and we would appreciate to take any question which is left out and one of you or any of you can reach-out to Prateek for these questions and we’ll get back to you on that. Thanks. Thanks once again.
Operator
[Operator Closing Remarks]