CCL PRODUCTS (INDIA) LTD (NSE: CCL) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Jaipuriar Praveen — Chief Executive Officer
Analysts:
Manish Mahawar — Analyst
Unidentified Participant
Abneesh Roy — Analyst
Parth Agrawal — Analyst
Chaitanya Sharma — Analyst
Prolin Nandu — Analyst
Shirish Pardeshi — Analyst
Nataraj Shankar — Analyst
Kashyap Javeri — Analyst
Sumit Sarda — Analyst
Senthil Manikandan K — Analyst
Richa Agarwal — Analyst
Aashish Upganlawar — Analyst
Rakesh Wadhwani — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Q3 FY ’25 Conference Call of CCL Products India hosted by Antique Stock Broking Limited. [Operator Instructions] I now hand the conference over to Mr Manish Mahawar from Antique Stock Broking Limited. Thank you, and over to you, sir.
Manish Mahawar — Analyst
Thank you. On behalf of Antique Stock Broking, warm welcome to all the participants on 3Q FY ’25 earnings call of CCL Products. From the management, we have Mr Shala, Managing Director; Mr D. Mohan Krishna, Execute Director; Mr, CEO; Mr V. Narayan, CFO; and Ms Sri Devi, Company Secretary on the call. Without further ado, I would like to hand over the call to Mr Jaipuria for opening remarks, post which we will open the floor for Q&A. Thank you. Thank you. And over to Mr Japuria.
Jaipuriar Praveen — Chief Executive Officer
Okay. Yeah. Thank you, Manish. I welcome you all to the earnings call for the October-December quarter. The supply-chain headwinds continue to pose challenge on the business front. You all know green coffee prices has remained volatile and has been rising. Despite the challenging environment, CCL Group has been able to perform well, achieving a turnover of INR758.4 crores for the 3rd-quarter as compared to INR664.48 crores for the corresponding quarter of the previous year, thereby registering a 14.13% growth. The EBITDA stands at INR127.22 crores, registering a 13.53% increase with respect to corresponding quarter and the profit before-tax is INR71.87 crores, registering a 7.77% growth with respect to corresponding quarter.
The net profit-after-tax remains flat at INR63 crores as against INR63.2 crores for the corresponding quarter of previous year, largely owing to our sales operation, 50% of the profit of which has now come under tax bracket and a higher deferred tax. As far as the YTD figures are concerned, the Group has achieved a turnover of INR2269.9 crores as compared to INR1926.98 crores for the corresponding nine months period for the previous year, registering a growth of 17.8%. The EBITDA is at INR396.46 crores, registering a 20.37% increase with respect to the corresponding nine months period. And profit before-tax is INR246.37 crores, registering a 19.7% increase with respect to the corresponding nine months period.
And the net profit-after-tax stands at INR208.47 crores as against INR184.85 crores for the corresponding nine months period for the previous year, thereby registering a 12.77% growth over last year. The domestic business performance continues to be robust and has achieved a gross turnover of INR330 crores till now YTD and out of which the brand contribution is nearly INR220 crores. For the quarter, the domestic business did a business of INR130 crores, out of which brand was approximately INR90 crores. So this was in brief the performance review. I now open the floor for questions.
Questions and Answers:
Operator
Thank you, sir. [Operator Instructions] The first question comes from the line of from Venture Growth Partner NLP. Please go-ahead.
Unidentified Participant
Yeah. Hello. I wanted to ask one thing like because we see that the coffee growth is in single-digits for the future. So where do we see as a company in five to six years down the line for both B2C and B2B segment.
Jaipuriar Praveen
Can you just repeat? There’s a lot of background noise that is coming. You were not really very clear. Actually you’re audible, but there is some background noise. I don’t know where this is coming from.
Unidentified Participant
Is it? Okay. I was saying like because the coffee growth is in single-digits in India and across the globe. So how do we see as a company in five to six years down the line, where do we stand for both B2B and B2C segments.
Jaipuriar Praveen
Okay. So let me just tell you while the coffee growth has been low-single digit, but what-if you see our strategy, it has been both for B2B and both B2C, our market shares are really low-single digits. For B2B, we probably globally are at 7% to 8% market-share and in domestic market, the B2C is 3% to 4% market-share, all-India, which means that we have very many good ample room for growth by taking market-share. So we as of now are really not bothered about the segment growing or not. Having said so, we — so the next four, five years, we’ll be aggressively driving market-share growth, which will mean that we will attain a much larger growth than what the category is growing at. So that’s for the next four, five years.
And even beyond that, we have a belief that economies like China and India, which have been largely tea drinking economies are now converting to coffee and we know that these are the two economies, not just for coffee, but for many other segments will be driving the growth for the next couple of decades. So we have — we are seeing that even the coffee growth will be driven by these two economies and that’s the time we’ll probably write the category growth once we have attained sizable market-share in both the segments.
Unidentified Participant
Got it, sir. I also wanted to ask like because in B2B segment, we have a cost-plus pricing model, so we do not have so much of effect is the volatility of coffee prices. But in B2C segment, can we have very good margins, I mean, more than what we have usually? Because the coffee price of growing.
Jaipuriar Praveen
Yeah, yeah. So absolutely that’s the that’s the whole idea in the long-run that the B2C should help us earn more margins. Of course, these coffee prices, if you see, if you track for last two, three decades, there are cycles when the coffee prices go up, but definitely they also come down. In B2C also, there is a — you know, we do take price increases, although with a lag effect, not like B2B wherein kind of you can do immediately, but we do have an option of taking price increases there as well. But having said so, we are confident that over a long period of time, definitely the B2C segment, the branded segment will help us gain more margins than the B2B setup.
Unidentified Participant
Got it. And by when — by which your financial year?
Operator
Sure. Sure. I would request you to rejoin the queue if you have any further questions. So we can get more participants in. Thank you. [Operator Instructions] The next the next question comes from the line of Abneesh Roy from Nuvama. Please go-ahead.
Abneesh Roy
Yeah. Thanks for the opportunity. My first question is on the B2C comment which you made. So wanted to understand how much price hike has happened and how much more is needed. We do understand you are a marginal player there. So ultimately, the top two national players have to take hike. But if you could comment on how much inflation is still left yet to be covered.
Jaipuriar Praveen
So yeah,, you’re right, we probably are not the leaders and therefore, as a pricing policy, we tend to follow the increases that the leaders are taking. And that too, you know the category because the large part of the category also comes from LUPs, which means that you know the price increase is a little difficult there, especially in the sachet segment and all. Having said so, in the larger packs, we already have taken almost 30% to 40% price increases in the last 1, 1.5 years. And I think another 10% to 15% lag is still left, but we will wait-and-watch for the leaders that how do they take this forward and accordingly, we will — we will formulate our price increases as strategy.
Abneesh Roy
So thanks. Two follow-ups there. One is till when the new crop, we’ll have to wait and so then we can expect deflation. Second is, for you, how much is Sachet? And have you taken any grammage cut there? I do understand garmage cut is very difficult because overall experience for the customer gets impacted. But if you could tell us any garmage cut you have taken and how much is the percentage of the total mix in the LUPs.
Jaipuriar Praveen
Okay. So let me take the first question first, which is like when is the crop expected? So at least in India, the crop has started pouring in. But you know, this year, we don’t see that the prices will drop because Indian coffee prices will also follow global trends globally even after Vietnam crop has started to pour in and has started to come, we haven’t seen any price reduction this time. So probably we’ll have to wait for other crops to come in, which is Brazilian crop in May, June. That’s the time we will see how the trend goes. But as of now, the prices are not softening. And now that’s — that’s the answer to the first question. The second question is as far as LUPs are concerned, almost today our 30% to 35% of our sales come from LUPs, which is still reasonable considering that you know some of the leaders sales are almost 50% to 60% of their sales are LUPs. There have been grammages cut-over a period of time, not very much because there is a certain cup of coffee that you have to deliver with one LUP. So we don’t have a lot of leeway to cut grammages, but yes, there has been 10% to 15% grammage cut that has — that has happened in LUPs in the last 1, 1.5 years.
Abneesh Roy
Understood. That’s all from my side. Thank you.
Operator
Thank you. The next question comes from the line of Parth Agrawal from Bastion Research. Please go-ahead.
Parth Agrawal
Hi, thank you for the opportunity. Can you help me with the volume growth for the quarter on a Y-o-Y basis?
Jaipuriar Praveen
So volume growth, if you see this quarter has been marginal around 3% to 4% or so. And YTD, if you see the first-quarter, we were around, 13% 14%, the second-quarter was around 9%, 10%. So we are on a YTD basis, close to close to 10% of volume growth? Yeah.
Parth Agrawal
Got it. And secondly, sir, if I look at your margin sequential basis compared to Q2 FY ’25, gross margins have been pretty stable or rather have increased. But when it comes to EBITDA margin, they have slightly declined. So any reason for that? Is it because you ramped-up the new facility or some other reason?
Jaipuriar Praveen
So if you see the standalone figures, there has been a little bit of a decline from quarter two, but probably would increase from last year. Now that this decline from quarter two is largely because of some of the variations that have happened, we also have started the new factory wherein some products were made-for inter — intercompany transfers and all that. So that led to a little bit of a strain there, but these are not substantial in nature. As far as you know, the margins are concerned, in fact, if you were to look at a broader level, there has been improvement in margin. In-spite of the volume growth being closer to 10% at a YTD basis, you’ll see the EBITDA margins of — EBITDA growth has been largely 20%, yeah. Also, margins are really we — when we tell people, we tell the margin should be looked at from a volume perspective, not at a value perspective because value is — because of our cost-plus model, whenever the green prices coffee is increasing, the margins optically will look that they are coming down, but actually they are not on a per kg basis, in fact, we have improved our margins.
Parth Agrawal
Yes. Got it. And sir, is that the new facility went live now? I think it was expected by December.
Jaipuriar Praveen
Now which facility you’re talking about?
Parth Agrawal
The 7,000 metric ton that was expected capacity.
Jaipuriar Praveen
This quarter we will — we will commission that capacity.
Parth Agrawal
Okay. Got it.
Jaipuriar Praveen
So doing the trials, there are some adjustments and balancing and stabilization that needs to be done. So instead of December, probably this quarter we will be stabilizing that and starting the operations.
Parth Agrawal
Got it. Sir, last question from my side. Sir, the B2C brand.
Operator
Obviously we are good to rejoin the queue, please. Yeah, those were your two questions. Thank you.
Parth Agrawal
Thank you. Thank you so much.
Operator
The next question comes from the line of Achatanya Sharma from Tradewalk Research LLP. Please go-ahead.
Chaitanya Sharma
Hi, am I audible?
Jaipuriar Praveen
Yes.
Chaitanya Sharma
My question is, how will rising prices impact the demand of coffee and chickory blends in India, especially if you see in the sector and among consumers. And if you could also shed some light on what’s your sales percentage in North India as compared to South India and which are your dominating markets?
Jaipuriar Praveen
Okay. So the price increase actually affects all of the segments because the coffee component is pretty large, even if there is a chickory mix there. In the institutional and the segment, they are a little more aggressive because none of the — none of the buyers would like to increase their end costing to the — to the customer or the consumer. So pressures are there on the pricing front and nobody likes higher prices. But having said so, it’s been a challenge and this is a challenge for any category if you see when the commodity prices rise, taking up price increases do pose a pose a challenge, but one has to — one has to live with it.
We are also very carefully class and calibrating our price increases, making sure that we strike a right balance between, you know, generating enough volumes not to lose volumes because of prices. But yeah, pressures are always there when prices are higher. Coming to your next question, which is about how is our B2C divided in terms of zones and all that. So you know, as of now, almost 65% to 70% of our sales still come from South, but that’s how the category is also constructed. Probably we are a little ahead of the category by 5% to 10% when it comes to contributions, but that is because in the initial four, five years, we were very focused in the Southern markets.
We are very keen to make sure that we are able to have a strong foothold there and then you know, spread our wings. As we say so, our contribution from the other markets, which is beyond South has been now constantly increasing. Just to give you a picture, two years ago, our contribution used to be 80%, 85% from the South, which is now at 70%, which means that the other zones are also growing. We are also expanding distribution. Selectively, we don’t want to be all over the place, but yeah, selectively or in other zones also. And we are very fast picking on spaces like quick commerce and e-commerce, which we feel is a very efficient delivery and distribution model in non-South markets where we may not have a very expansive distribution.
Chaitanya Sharma
Thank you, Mr. Sir, just one more follow-up question, if I can ask. Yeah, please. Yeah. So what’s the kind of trend you’re seeing in the experimentary coffee that you have, be that flavored coffee or decaf coffee? What kind of trends are you seeing there?
Jaipuriar Praveen
So we are seeing quite exciting trends. You know, generally, if you see in any food category, a lot of these trends get built-up, you know out-of-home and what is happening is that you can see the amount of cafes that are coming around all of us and these are serving a lot of experiential and experimental coffees and that’s how when people get used to these kind of coffees, then they start consuming at-home also. We have seen a fair bit of pickup in segments like flavored coffee and some of the higher-end coffees even in-home and that’s the trend we are observing and these are good trends because for any food category to expand, you need a lot of experimental trends to emerge so that the lot more usage of the category can be driven. So yeah, that’s our view. I think it will grow — grow further from here.
Chaitanya Sharma
Yes. And does it in some way also act as an entry product for people to get into the coffee — coffee consuming category?
Jaipuriar Praveen
Absolutely, because you know people who are, let’s say, if you talk about people who are largely tree drinker, for them to enter a regular coffee category may be a little difficult because they are not used to the palette, but if you were to serve them flavored coffee or some more you know different coffee, probably those become a lot more affable and more palatable for them to drink. So I think, yeah, these do help in expanding the category and getting more people inside the category.
Chaitanya Sharma
Right. Thank you very much. I’ll join the queue for follow-up questions. Thank you.
Operator
Thank you. The next question comes from the line of Nandu from Public Alternatives. Please go-ahead.
Prolin Nandu
Yeah. Hi, sir. Thank you for taking my question. A couple of questions from my side. First is, while you talked about you have a very low market-share in global as well as in domestic market and you want to increase your focus on gaining market-share. But what has been your historical experience as to when do you gain market-share? Do you gain market-share in a rising coffee environment market where there is a temptation to always downtrade, right? Or do you gain more market-share in a stable to a declining coffee price trend kind of a market. So can you give some color as to whether is this the right time where you know what we have seen is that new crop coming in is also not leading to coffee price decline. So is this the right time to probably gain market-share and also what are the efforts that you are going to do differently versus what you have done in the past to gain this market-share?
Jaipuriar Praveen
So yeah, I think a pretty relevant question. Let me let me tell you that we haven’t experienced market-share gains either in a rising price scenario or in a in a falling price scenario. If you see our efforts for the last 30 years, most of our market-share gains have come because of the innovation that we probably bring to the table. And if you remember 2006, we put up our plant, which was first-in India that time we had envisaged that as a category, will do well and we kind of entered that category helping our customers to launch those products in their relevant market.
Similarly, many other products like you know fresh coffee infused soluble coffee or whether it is a specialty coffee or a different blend. So I would say a lot of our market-share gains have been because of the innovation because mostly we look-forward to partner with our clients and help them grow in their respective markets and it’s just not a transactional relationship. So that has been our strategy to gain market-share.
Now coming to the question that what are we going to do more to gain more market-share from here, it’s like this that we are trying to do a matrix of growth wherein we are also looking at some of the geographies where we have not been very strong in geographies like you know, South America or let’s say, Far East Asia. These are some of the — some of the geographies we are now wanting to enter with you know with a different strategy altogether. So that’s something that we will — we will focus on. We’re also focusing on a lot of you know product innovations in the current setup, we are looking to heighten our game in specialty coffee segments. We are seeing these trends coming up in the market.
So as I told you earlier that we are very focused on making sure that how do we come up with new innovations helping us to grow our market-share. So that will be is the strategy. Going-forward, we’ll continue with our strategy because rising prices and falling prices are something which are not in our hand. And therefore, we don’t see much of an advantage because sometimes you know, you may probably play a rate game, but that doesn’t serve you well in the long-run. So that’s how we will — we will keep — we’ll keep growing.
Prolin Nandu
Sure, that’s clear. Thank you for that. Second question would be on your domestic B2C, right, branded business, where — correct me if I’m wrong, you had a target of, let’s say, INR300 crores in B2C and then INR100 crore in HDA, so total INR400 crores. So can you help us understand where are we on our targets? And again, what are the kind of market-share gains that we are witnessing, some color on, you know, some qualitative color on how you’re doing in offline and online. So just wanted to understand your branded B2C and B2B India piece?
Jaipuriar Praveen
Yeah. So in India piece, it continues to grow at a very healthy space of around 40%, out of which B2C is growing at 50%. You are right, we had guided that this year we will end the total domestic business of about INR400 crores. We are likely to be there INR430 crores INR40 crores, out of which the B2C will be INR300 crores. So we are well on-track to achieve that. Nine months, we already have done the B2C at INR220 crores. So that is pretty much in there.
So we are growing well and we are growing all across. We are gaining market shares in every quarter. And like I was telling earlier that in South, now going-forward, our strategy will be to penetrate market. Our share among handlers are almost twice as much as — or twice as much as my market-share. So which tells us that distribution expansion will be the key to grow growth in the Southern markets. In the Northeast and West, we are looking to do selective distribution coffee anyways as of now is very urban phenomena and concentrated in large towns. So we will — we have already set-up our distribution network there and we are fast expanding there. And we are looking-forward to, you know, drive a lot of quick commerce and e-commerce sales in these regions.
Today, we are — we are doing very well on most of the quick commerce, very strong — much stronger number three players than we are what we are in general trade. So that’s a very, very encouraging sign. In all the modern trade, we are very, very good on our shares and much, much above than our national average. So again, these things have been — we have been doing really well. Recently, Reliance came up to award us and reward us with one of the best growing categories in their whole FMCG portfolio. So these are signs and signals that we are achieving the brand is seeing these days, which is a very remarkable journey for us as far as the branded businesses come. So we’ll keep growing at the same momentum and try and push as much as possible and as much as we can.
Prolin Nandu
Great. Thank you so much. I’ll come back-in the queue. Thank you for this.
Jaipuriar Praveen
Yeah. Thank you.
Operator
The next question comes from the line of Shirish Pardeshi from Motilal Oswal. Please go-ahead.
Shirish Pardeshi
Hey, hi, Praveen, Srishan. Good morning. Thanks for the opportunity. Just two quick questions. In the international B2B and domestic B2B, what kind of conversation is happening at this point of time? And I’m asking this question primarily because the coffee prices will remain elevated for some time. So in terms of demand, in terms of offtake, in terms of their visibility on the ordering. Maybe if you can add some color on this.
Jaipuriar Praveen
So I this — the conversation still remains very anxious. Nobody is wanting to commit long-term. But you know, we had told this last-time as well that we are also keeping a very close eye on-the-ground at what is happening and we did predict last-time that things are not looking to soften up much. And that’s the narrative we are discussing with our clients, we are telling them that it is better for each one of them to commit to a long-term contract because things are not looking to kind of erratically or suddenly come down. So — and that’s the reason if you see some of our client portfolios and our mix have been towards long-term. So that’s the kind of conversations we are trying to drive with the clients, but still the market still remains short-sighted as of now. People are still a little wary to commit long-term, especially the transaction clients because these are probably traders and all that who are doing business very opportunistically. So these people are always-on a wait-and-watch mode.
And therefore, our narrative has been with the long-term players, the brand brand owners, the private-label guys with whom we are also giving them a guidance that it looks like in the short-run, it’s not going to kind of soften. So therefore trying to get into more long-term contracts. So that’s been narrative from our side. But having said so, the overall environment still remains, you know, shortsighted and full of anxiety.
Shirish Pardeshi
Okay. That’s helpful. And my second question is, in terms of domestic INR330 crore or INR220 crore what you have done, specifically, if you can share what is the channel mix in terms of big commerce, retail, general trade, modern trade and what are the growth rates you would have achieved probably in nine months?
Jaipuriar Praveen
So in nine months,, we are almost 40 plus growth at the overall level. Out of which the brand piece is growing at 50%, yeah. So if you remember, last year, we had done INR200 crores and this year we have given guidance and which we are well on-track to achieve INR300 crores on just the branded side. So that means that we will get to a — we would have achieved a 50% growth. As far as the mix is concerned, almost 50% to 60% of our sales still coming from the general and the regular trade. We are getting a very good listing from quick commerce and e-commerce, which is now almost 20%, 25% is from modern trade. So that’s been the mix for us, right? And as we expand more-and-more in Northeast and West, I have a feeling that our contribution of modern trade and big commerce and e-commerce will probably increase from here.
Shirish Pardeshi
And growth rates and maybe follow-up here, what is the distribution as of December you are holding?
Jaipuriar Praveen
So growth I told you, we are growing at 50%. As far as the distribution is concerned, we probably channel-wise — it’s channel-wise. So channel-wise, I think I’ll not — I don’t have the ready numbers right now. I will share it separately on the channel-wise growth. But just to give you a flavor, my growth rates in quick commerce will be the best, followed by modern trade and followed by general trade, yeah. That is because general trade bases are high. We are already a little more entrenched in South markets. And in the Northeast and West, we are probably driving modern trade and e-commerce and e-commerce much aggressively than the — than the general trade. So that the growth rates in general trade and general trade would be lower than e-commerce and commerce and model rates. So that’s on the growth front. The next one you asked was about.
Shirish Pardeshi
Distribution.
Jaipuriar Praveen
Distribution, yeah. So we are probably now at around 1,20,000 direct distributed outlets and around — which is general trade and we are around 3,500 outlets. So we are covered in modern trade. So that’s our total distribution. And of course, in quick commerce and quick commerce, we are at almost 90% of the — we are present in their 90% of their of their dark stores. So that’s pretty good in terms of our distribution because obviously that’s an easier distribution matrix to achieve. But that’s the figure on the distribution front.
Shirish Pardeshi
Thank you, Praveen and all the best. Thank you.
Jaipuriar Praveen
Thank you.
Operator
The next question comes from the line of Natraj Shankar from DSP Mutual Funds. Please go-ahead.
Nataraj Shankar
Hi, good morning. Just a couple of questions. One is on the earlier — sorry to interrupt Nak on that Raj. Could you please be a little louder? Thank you. Is it better? Yes. Yeah. I just wanted to ask with respect to working capital and the conversations around working capital with your B2B business, has it improved given the fact that the working capital remains very-high on behalf of clients, are they willing to change the terms a little bit given the circumstances of coffee prices and that’s one. And two, can I have a debt number at the end of December?
Jaipuriar Praveen
So working capital, yes, it remains high because of — so almost INR1,200 crores as we speak. And it remains high because of the high coffee prices. Now as far as terms and condition is concerned, I don’t think so. Probably anyone is in the position to pass-on these because at high prices, you know, there is pressure on each point in the value chain. So there’s pressure on consumer who is the end-consumer of coffee to the brands, to the suppliers, to the packers, to the manufacturers. So there is pressure all-around. It’s not easy to pass-on everything because then you become really non-competitive in the market. And that’s one of the reasons we have not been so aggressive on the volumes is because, because you know, while we are able to pass-on something, the market is probably not ready to take on everything that we want to pass-on. So we are — the things haven’t changed because pricing pressures are there all across. It’s just not us who is facing the pricing pressures. We just spoke in the B2C segment how difficult it is to increase prices because consumers then start dropping off the category. So I think there is a balance that has to be maintained, which is what we are trying to do. And I told you the debt number is INR1,200 crores of working capital, long-term debt is around INR790 crores to INR800 crores. As of now, total is around INR2,000 crores of debt.
Nataraj Shankar
And what are the guardrails here as we — let’s say, if this remains elevated for the next year? Yes. What kind of guardrails that you would have to ensure that the balance sheet doesn’t go beyond a certain point or cash flows doesn’t impact while you continue to grow, not taking the eye on that.
Jaipuriar Praveen
So we are working on a lot of things. We are working to see that how can we kind of keep the interest rates as low as possible. If you see our interest rates for the global for the group is almost 5.25%, which is much lower than what the — you know what the environment is offering you, we are making sure that we — we finance it, we have operations in India, Switzerland and Vietnam, which means that we are also trying to juggle in a way so that our financing rates remain as low as possible.
So these are the things that we are doing and it’s like an everyday exercise for us to see that how can we keep this in control. As far as managing it, as I told you, we are also trying to do two things. One is that on the procurement front, we are — I told you that we have been kind of making sure that we have our presence at the ground so that we could procure at the most efficient and rates and so that the working capital requirements are in check. And secondly, also, you know, we are making — as I told you, we’re making sure that we are in the requirement in such a way that our outflow or the percentage of financing cost remains as low as possible. So these are the things we are doing to keep a check on the on the balance sheet and we should hopefully be on-track because even in this year, we had guided a higher interest outflow, but we probably will end-up maybe INR5 crores to INR10 crores lower than what we had guided.
Nataraj Shankar
And how does it repeat depreciation impact? Positive? Sorry, with you.
Jaipuriar Praveen
We import and export in dollars. So it — for 60% to 70% of our value, it doesn’t impact much for 30%, yes, there are certain advantages we get at certain times. But yeah, that those are not substantial in nature and therefore, we don’t kind of bet on that to give us any advantage or disadvantage.
Nataraj Shankar
Thanks all the best.
Jaipuriar Praveen
Thank you.
Operator
The next question comes from the line of Kashab Jawari from Emkay Investment Managers. Please go-ahead.
Kashyap Javeri
Just one clarification. You mentioned that working capital at the end of this quarter was about INR1,200 crores and you said the gross debt was about INR2,000 crores.
Jaipuriar Praveen
Right.
Kashyap Javeri
Does that mean that versus September and March last year, we have seen at least a decent about 10, 20 days improvement in working capital number strong last year. Even from September, if I look at, let’s say, September 2024 number, your working capital at the end of September ’24 was roughly about INR1,300 and something crores, which now is about INR1,200 crores. If I look at March, even in fact, March was almost about INR1,200 crores, so which is like a flattish number.
Jaipuriar Praveen
Yeah. So it was mostly flat. I think INR40 crores INR50 crores of variation was there, not much. I don’t think so these are substantially strategic — strategically, there is anything that has changed more because of a little bit of a variation from quarter-to-quarter. Sometimes what happens is that when you’re procuring coffee from far offshores, our logistics time and all that could tilt the numbers a little bit here and there, but there is no strategic shifts in the numbers between the quarters. That is what I see.
Kashyap Javeri
Okay. Okay. Yeah. Thank you so much. The rest of the questions have been answered. Thank you.
Jaipuriar Praveen
Thank you so much.
Operator
The next question comes from the line of Sumit Sarda from Compound Everyday Capital. Please go-ahead.
Sumit Sarda
Yeah, hi,. I’m audible. I have just one question around the domestic branded business. The leader has indicated that they have taken price increases and plan to take more price raise and you also guided that you also taken 30%, 40% price hikes in last one year. But this is also a period when domestic incomes and demands under pressure. So maybe customers of maybe leader brands might be open — most open to try reasonably utilized alternatives like us. So how are we planning to play this? Get aggressive, you know, maintain or maybe increase the discount versus leaders and aggress get aggressive on distribution to garner market-share aggressively or stay focused on maintaining that spread versus.
Jaipuriar Praveen
Yeah. So I think again, as I told the — in my previous comments is that we also will try and strike a balance. Now again, if you see the category concept, it’s pretty complicated. So there is a category of single serves that are there. Their price increases are, you can’t take price increases for a INR2 or a INR5. And maybe you can take a little bit of a grammage reduction, but not beyond a point. So those are — those are places where we will — and we are also growing, our distribution is growing. If you see the first leg of our distribution was probably the outlets were more of large pack sales. Now once we are trying to increase the penetration to B&C, we probably will have to be aggressive on some of the small packs where price challenges will be there.
And now coming to the rest of the category, which is the large bottles and the large pouches and the large bags and the rest of India market, there we will also take price increases because we also have to balance the margins. One thing is good about the category as of now, let’s say, it’s good and bad. So the good part is that it’s still in the rest of the country beyond South, it is still concentrated to the upper of the of the income class, which means that you have a — you have a better price elasticity there, wherein, you know some of the other categories where commodity prices and they go up, you fairly have a lot of price in elasticity. So that’s the — that’s the thing which will help us balance it out. We are also looking to enter some of the premium segments. Probably this quarter, we will be entering into a couple of other higher-end segments, which will also help us maintain that balance between penetration and being aggressive and also at the same time, maintain the margins.
Sumit Sarda
Understood. Just if I can squeeze in one more, can you share update on your kiosk? I think you had started a few kioks, any new additions? How has been the response?
Jaipuriar Praveen
Maybe we had guided last-time also that we have started three kiosks — three kiosks in not kiosk. These are three quick-service outlets by the name in Hyderabad. We are still building it up. These are very initial days. You know-how retail is — retail is a little — it’s not so easy to kind of scale it up very quickly because first we want to be very sure of the proof-of-concept. So we’re working on that. We are seeing how this thing grows. As of now, we are in — we are not looking to add anything. As and when we have established the proof-of-concept and that’s the time we will see that how do we want to expand it and what is the model that we would want to follow-on this.
Sumit Sarda
Thank you and all the best.
Jaipuriar Praveen
Thank you.
Operator
The next question comes from the line of Deepak from Sundaram Mutual Funds. Please go-ahead.
Unidentified Participant
Thanks. Am I audible?
Jaipuriar Praveen
Yeah. Yeah, Deepak.
Unidentified Participant
Yes, sir. So sir, I heard that this quarter our Y-o-Y growth rate in volumes was 3%, right?
Jaipuriar Praveen
3% to 4%.
Unidentified Participant
Yeah. Just want to understand in the past, several times we have guided that 15% on an average is what we want to do and this is around 3%. So where-is the negative surprise coming from? Is it from the Indian operations or is it from the Vietnam operation? If you could please provide a split between volume growth between India and Vietnam’s operation?
Jaipuriar Praveen
Okay. So I think I will not be able to provide you the exact split in terms of volumes because that’s not — we share openly. However, I’ll give you a color that you asked about that we had given a guidance of 15% or so. Is this quarter 3%, 4%, is it an aberration or are we seeing a long-term trend here? So if you see why for last three, four years, we have been guiding a 15% or so plus volume growth, at the start of the year, considering the volatility in the market, the high prices, we had indicated that this time our guidance will be between 10% to 20%. If you see the first two quarters, we were, you know, pretty much in-line with our guidance.
This quarter has been a little aberration and the aberration comes from the fact that at both places, India and Vietnam, there has been some volume — not growth reduction, not volume reduction, growth reduction. And that has come largely because as I was telling you, we have not been so aggressive in the in the 20% or 25% of our volume comes from transactional business, the opportunistic business, the low-margin volume builder business, that’s something that we probably could not be as aggressive at this point of time considering the market scenario, you all know that the world has a lot of excess capacity and there in these times, there will be people who will be will be probably racing to the bottom as far as rate is concerned, that’s not what we want to do.
As philosophically you know the company, we have always concentrated on long-term contracts, building partnership long-term, going to the end-customers, building more value-based contracts and which are you know a margin plus for us. And that’s the reason even with 3%, 4% volume growth, you’ll see that the EBITDA growth are pretty much in-line, 13%, 14%. So that’s — that’s the guidance we will — we will maintain in the long-run, we are looking for 15% kind of a growth. Yes, there’ll be a quarter here or there where there could be some aberrations. But as of now, we are only seeing these as aberrations rather than a long-term trend.
Unidentified Participant
Okay, so I was not a thank you for an elaborate answer. I was not asking for the volume number, I was asking for the growth number Y-o-Y between Indian and Vietnam operations.
Jaipuriar Praveen
Yeah. So India growth was a little flattish where because the new capacity has just come in-line. So India growth was just capacity flattish. There was a — sorry, so India growth was around 5%, 6%, the Vietnam growth were quite flat. So — and Vietnam, we do a lot of these low-margin customers and opportunistic sales and all that. So that was a little flattish this quarter.
Unidentified Participant
Okay. And sir, one final question. So as we have discussed that in several past calls also that 15% volume growth that we aim for. Let’s assume that we don’t deliver those volumes in FY ’26 and FY ’27, next two to three years. So at current beans prices, what could be our peak debt level?
Jaipuriar Praveen
Suppose we don’t increase the prices at least at these levels, we had indicated that this year end the peak debt could be around INR2,200. But going-forward, I think now all the capacities are in-place, all our capexes are in-place, there won’t be any addition as far as long-term debts are concerned and every year probably INR150 crore to INR200 crores, we will start repaying as well. So I don’t see the peak debt levels going beyond INR2,200 crores in the next year or the year-after that also. In fact, it should start reducing, but because we’ll be repaying it.
Unidentified Participant
And this is despite you’re saying, let’s say, 10% to 15% volume growth and coffee.
Jaipuriar Praveen
I said, you said that if there is no volume growth, there will be reduction. Even if there is a 15% volume growth, probably it may remain at the same level. Okay. Thank you. But we’ll have to take it up every quarter, we probably will have to reguide you on this depending on how prices are panning out. But I don’t see in the long-term more stress is coming up or addition in the peak debt levels.
Unidentified Participant
Okay. Thank you so much, sir.
Jaipuriar Praveen
Thank you.
Operator
The next question comes from the line of Sentil Manikandan from PMS. Please go-ahead.
Senthil Manikandan K
Good morning, sir. Thanks for the opportunity. Sir, first question is on the sales side. So I understand that we follow the cost-plus model. But this time, we have sort of 14% revenue growth with a 3% to 4% volume growth. But year-over-year coffee prices gone up like upwards of 50% to 60%. So how to look at this number, sir?
Jaipuriar Praveen
No. So you know, if you see a lot — a large portion of our contracts are also long-term. So while the coffee prices would have gone up, we probably are buying coffee when I would have been done six months, 12 months prior also, yeah. So therefore, it gets averaged out. So there are quarters you would have seen there are 20%, 30% growth there quarter you will see a lesser growth in terms of price. So that really is a combination of how far away did we do the contract and what contract we now do. That also explains because much of the opportunistic buyings are very short-term, yeah. And if you see that’s the volume we have not kind of bought, which has also explained that these are — a lot of these volumes are coming from long-term contracts. So you may not see such price spikes in the portfolio.
Senthil Manikandan K
Got it, sir. So in that sense, it makes us more competitive in the market in terms of pricing.
Jaipuriar Praveen
Yeah, it has to be competitive now at these prices. Whenever the prices are high, you will see that there will be more desperation in-market, people would be out to fill volumes. There were people who will sell it even in negative margins because they need to run the plant. So I think it’s been a very, very tough scenario for — for the whole industry globally. And that’s the reason why when I started my commentary, I did say that despite these challenging environment, the performance has been pretty good.
Senthil Manikandan K
Okay, sir, got it, sir. Thanks, sir.
Jaipuriar Praveen
Thank you, sir.
Operator
Thank you. The next question comes from the line of Richard from Equity Master. Please go-ahead.
Richa Agarwal
Thank you for the opportunity, sir. Sir, my question is, let’s assume the coffee prices do not come down. And my understanding is that for FDC, the demand is a bit elastic and maybe the customers will also get used to-high coffee price environment. For FY ’26, considering the new capacity also coming in, what would be a conservative growth or volume growth estimate that you would could share? Because 10% to 20% is quite broad, but with the new capacity coming in, do you think you could do 15% at least?
Jaipuriar Praveen
Yeah. So we could actually, but really will depend in the couple of next quarters, we are trying our best to kind of — but while we are being aggressive in the market, what we are focusing more is on the long-term contracts, building better clients. And that is why if you see even if the guidance of 10% to 20%, you could see it as a broad. The other way to see it is that I would say that it’s pretty specific because considering the kind of productivity that is present in the market, this is quite a quite a, quite a specific guidance that we have given.
Second thing is that the guidance, if you see ultimately what we have always maintained that our volume growth and our EBITDA, the operational profit growth will be in-line. In-spite of getting a 10% of sales volume growth YTD, our EBITDA growth is 20%, which means that we concentrated more on a better margin contract, which has helped us to deliver these kind of good operational profit numbers. Going-forward, I think we’ll have to wait-and-see that how do we drive the business forward. Having said so, I’m not wanting to say that there is any let-up in our aggressiveness in the market to get a volume growth of 15%. You’re right. We have got new capacities added. We would also like to fill it as quickly as possible.
So depending on how see what is happening, the Vietnam crop is now coming. Every day we are seeing fluctuations. We have to wait-and-watch that where does it settle down to. What is the concerning point is that does it put pressure on the consumption? As long as the consumption is intact, I think things should settle down and probably should not impact our long-term growth guidance of 15%. So that we are committed. And as the market has become short-sighted, so have we. So therefore, giving very long-term product predictions that we used to, let’s say, two years ago has become a little challenging for all of us as well.
Richa Agarwal
Okay. And sir, as the new plant comes in, do you expect your employee and other expenses to shoot up as well? Or is this with the trial production? Is this already factored in the cost of higher staff to extent this.
Jaipuriar Praveen
In the consol for this quarter that is already factored in India, there could be a little increase in Vietnam, but Vietnam was, as we had told you, it wasn’t a greenfield project, it was a brownfield project, which meant that a lot of utility manpower and other common space manpower will be same. It’s only be the variable manpower. And these are pretty much automated factories, automated lines, these don’t require very heavy manpower. So I don’t see significant variations from the current numbers.
Richa Agarwal
And sir, what would be the effective tax-rate for the — okay thank you.
Operator
The next question comes from the line of Ashish from InvesQ PMS. Please go-ahead.
Aashish Upganlawar
Yes, thank you for this. Sir, so from the commentary so-far in the call, what I could understand is that supply maybe which was constrained with the crop coming in, it could be a bit better. At the same time, the customer demand is not at all hampered despite the prices and the industry is willing to take whatever it takes to fill-up the capacities despite the stress on the balance sheet and the profitability. So for this now to break, do you not think that the demand has to drop for — the prices to react and then things get sorted or some players have to — I mean, take a call that profitability can’t be sacrificed on the bottom-line because in our case also the volume and EBITDA growth has been fine, but the problem has been the interest cost because of the working capital and the capex that we have done. So how do you read the situation? Will it be sorted by supply or the demand crashing?
Jaipuriar Praveen
So I have a feeling that it will be sorted by supply, not the demand crash because you know a lot of lot of economies are the upcoming economies who are consuming more coffee. So I have a feeling that there — and let’s say, good part or bad part, a lot of coffee consumption is happening in the in the affluent economies like America and the Europe. So I don’t see them dropping a lot of consumption. So I don’t think so this price drop will happen because of demand drop. It will happen due to supply increases. Now let me give you a color for last year also, the Brazil supply was good.
This year also, the crop has been good. That is the report we are getting from the ground. And we’re also seeing that during last-time also came, it was a — there was a little bit of a singing at that point of time. So back-to-back good crops will lead to more softening. That’s the common knowledge. Also if you — I mean, you know if you see the coffee crop, unlike most of the commodities, most of the commodities, what happens is that the supply-and-demand they get corrected because either the demand will come down or the supply because the crop cycles are low. If you see most of the commodities, the crop cycles are six to nine months, yeah. But unfortunately for coffee, the crop cycle is 3.5 years.
So after the first — after the crop has been sown, after 3.5 years, it starts flowering and giving the cherry. Yeah. So the prices have started to increase 1.5 years, two years ago and we have a feeling and not only feeling, but a lot of ground report says that there has been an increase in acreage. So it looks like that all this acreage will come into flowering and harvesting one and a half years from now. So a good crop of Brazil coming in June, July and the next year oversupply happening due to the new crop giving new flowering and new, I think that’s the time when we’ll start coming down. So yeah, frankly speaking, it has to be the supply flow that will soften the prices, not really the demand crash.
Aashish Upganlawar
Okay. And lastly, given the scenario, then till now our growth on the EBITDA has been driven by largely volume growth because margins have been understood. So now you are saying that volumes also you are taking tactical calls because of the pressures — industry-wide pressures. So what is the rate of growth that one should expect because then that was the only driver of EBITDA growth probably for us?
Jaipuriar Praveen
Yeah. So I — while it was the driver for EBITDA, if you see — if you see in the last three, four years trajectory, you’re absolutely right, the EBITDA did grow exactly as far as much as volume grew. Now this year, while we are, you know, while there are challenges on the price front and therefore, the volumes have been a little tighter to drive. What we have made sure is that the EBITDA still grows in that 50% to 20% range. Yeah. And that is because we have been focusing a lot more on the long-term contracts, the private-label contracts, the higher-margin contracts. So even while we have been — we have to take a tactical call or we have taken a tactical call to not be so aggressive on the volume because of the price. We have successfully maintained the EBITDA growth at 15% to 20%. So we are very confident of maintaining this EBITDA growth of 15% to 20% till we are back into the volume growth of 15% to 20%, which then will again drive EBITDA at the same level. So I don’t see any clock in our performances as far as our EBITDAs are concerned.
Aashish Upganlawar
So just to confirm this, EBITDA growth will be around 15-odd percent. And yes, just taking confirmation, 15-odd percent EBITDA growth and since volumes are not increasing and we don’t want to inflate our balance sheet further on working capital. Our bottom-line can grow at a better rate probably if interest costs remain the same.
Jaipuriar Praveen
Absolutely. Absolutely.
Aashish Upganlawar
Thank you so much. Thanks.
Operator
The next question comes from the line of Vikesh IR from Sequent Investments. Please go-ahead. Vigesh, please go-ahead and please unmute your line in case if muted.
Unidentified Participant
Hello. Am I audible now?
Jaipuriar Praveen
Yes, please go-ahead.
Unidentified Participant
Yeah. Thank you for the opportunity. Sir, my first question is on understanding our mix of modern trade and gentle trade. The idea being since the coffee prices have been increasing and there is pressure as we cannot increase the prices very much, how are we seeing this mix of modern trade versus general trade considering on the modern trade side, you experienced a comparatively lesser margin versus general trade? Or is it a different scenario for us when it comes to commerce, e-commerce for that?
Jaipuriar Praveen
Yeah. So it’s a little different than industry-standard. You are absolutely right. The industry — for industry, the modern trade and the e-commerce, the margin has been — is quite lower than the general trade. But for us, it has been quite a — not quite, but at least a significantly different story than what the industry practices are. And I’ll tell you why. It is basically because even if you see the modern trade and the quick commerce and the e-commerce that we have developed, we have — we have created — actually our demand creation has not been only focused on the quick commerce and the modern trade and the e-commerce, yeah.
So a lot of our demand-generation happened offline, which is the traditional methods of demand-generation, which has helped us a lot in e-commerce, big-commerce and modern trade. Now what has happened is that most of the growth in modern trade, commerce and e-commerce are led by this and therefore, you know, things like my, let’s say, spend to sales ratio is almost one-third of the industry standards, yeah. And therefore, we earn equally good margins in modern trade and quick commerce. In fact, to give you this thing, when we began our journey six years ago, the modern trade teams were not ready to keep us because they were not sure of our optics and all that.
But what we didn’t do, which most of the other people do is that our post listing through higher payouts and higher amounts being spent on displays and things like that. What we started doing is we started building the brand offline and through general trade and we took it step-by-step. So for example, in 2019, we had to, you know when we started with Reliance, it was just 10 stores in Hyderabad, yeah. That is what they said that they said they are not very confident and they will only do 10 stores. But we didn’t want to kind of overspread ourselves and overspread by paying money.
So we took it from 10 to 20 to 30. And 1.5 years ago is the same Reliance who came back to us and said that we want to expand to all stores of our network across the country, yeah. And therefore, what happened is that the buying power, the purchasing this thing or the driving thing was not with Reliance, but was with us. And that was pretty much possible because of the traditional ways of marketing and sales that we started within general trade. So therefore, our general trade model actually has helped us to earn equally good margins. So even going-forward, as we expand more in modern trade and e-com and Quick-com, I don’t see our margins coming down.
Unidentified Participant
Okay. So if I just could understand it — did I understand right? I mean, on a deep discounting model, are the e-commerce or e-commerce taking hit on their side for our product.
Jaipuriar Praveen
So when we, a lot of it, they do it for themselves as well. So there is a certain partnership model that we enter into. We also have been pretty listing that beyond a point, we don’t deep discount. There are days and times when they kind of push it harder by putting in money from their side. So — but we have made a model wherein we kind of beyond a point don’t keep discount. And a lot of our demand is being generated because of the work that we are doing outside. So they also have no-option but to keep us. Even like a platform like Blinkit, which is very strong in North actually has or is wanting to take our products so much so that they told us that since we want to grow our network in South, we would want to — and considering coffee is doing well in South, we would want to use quantity coffee to drive our network. So actually, it’s been a — it’s been a very fair play between us and the e-commerce and the modern trade platforms. Yes, it is difficult. I won’t say that it’s been easy. Still the pricing talks and all that are pretty aggressive from both sides. But at least we have been not, you know, been made to kind of succumb to all their demands. We have been able to hold our foot ourselves also, making sure that our margins don’t get affected.
Unidentified Participant
Okay. Sir, just one question on my side is on the gross — total gross block side of INR800 crores at consolidated level, has the entire block been capitalized now.
Jaipuriar Praveen
No, partly it has been captured. We have two projects. One is in India, another one is in Vietnam. The Indian part is capitalized and around INR400 crores and the Vietnam project is likely to be commercialized during this quarter and next end-of-the quarter it is going to be capitalized.
Unidentified Participant
Okay, sir. Got it, got it, sir. Thank you for the detailed explanation and all the best, sir.
Jaipuriar Praveen
Thank you.
Operator
The next question comes from the line of Rakesh from Nine Rivers Capital. Please go-ahead.
Rakesh Wadhwani
Hello. Thank you for the opportunity. Am I audible? Yeah, yeah, you are audible. Just be a little louder. Little disturbances there. Okay. Okay, sure. Thank you very much. Sir, one question with respect to the coffee prices. We have seen this industry that coffee manufacturing industry is very — very fragmented industry. There are few players like CCL, which is the top — top manufacturing players. But I want to understand because the coffee prices are higher from the last 15 months, have you witnessed the customer which are buying from the small peers? Have they come to — they come to us that they want to do business with you rather than going with the smaller players which are struggling with high coffee prices? Please?
Jaipuriar Praveen
Yes, we have actually — I may not directly correlate with some of these new players which are coming, are they were buying from small players and they have come to us because as I told you, we also have been concentrating with the larger buyers, more brand owners and long-term buyers. And generally people who buy from small-time players are the transactional ones. So I cannot really for sure to say that I’ve got from smaller players. But there has been another trend that we have been noticing that we generally, you know over a quarter, we will get a couple of two, three proposals for taking over manufacturing units of smaller players, which probably has an indication that the smaller players would be finding it even more difficult to manage the working capital and the operations of their plant. So that is a sense that we are getting. But if you ask me, have you got more new people or buyers from smaller players? I don’t think so. I can definitely say and yes to that.
Rakesh Wadhwani
Okay. Okay. Sir, second question with respect to the capex — capex for the F ’26 and F-27, if you can talk.
Jaipuriar Praveen
About the capex?
Rakesh Wadhwani
Yes.
Jaipuriar Praveen
I don’t think so we’ll have any capex in next year. We are done with our capex for the next three, three years of so, because most of our capacity building is over now, we are good to grow for the next three years. So I don’t think so, we’ll have any more capexes.
Rakesh Wadhwani
So continuing on that part, if there is low capex or very mental maintenance capex, only maintenance capex and the coffee prices remain same. We can do a larger chunk of payment towards debt. Is that understanding correct?
Jaipuriar Praveen
Yes, it’s absolutely. So I think that’s the sweetest spot that we can get into because going-forward every year, as I told you, INR150 crores to INR200 crores of debt retirement will happen. And if the coffee prices will come down, this is a double benefit that we’ll get. So then things will probably get vastly rosy for all of us.
Rakesh Wadhwani
So just one last clarification on the tax part in the — Rakesh, okay. Okay. Sure, sure. Thank you. Thank you.
Operator
Ladies and gentlemen, I would now like to hand the conference over to the management for the final comments.
Jaipuriar Praveen
Yeah. Thank you. Thank you team for arranging the call. Thank you, Manish, and I thank all the participants. Wishing you all a very Happy New Year and we look-forward to meet you in the next quarter.
Operator
[Operator Closing Remarks]