Chaman Lal Setia Exports Ltd (NSE: CHAMANSEQ) Q2 2025 Earnings Call dated Nov. 05, 2024
Corporate Participants:
Rajeev Setia — Joint Managing Director & Chief Financial Officer
Unidentified Speaker
Ankit Setia — Executive Director
Analysts:
Gaurav Singh — Analyst
Piyush — Analyst
Purav Patel — Analyst
Rajiv — Analyst
Prashant Shah — Analyst
VP Rajesh — Analyst
Palash Agarwal — Analyst
Presentation:
Operator
Ladies and gentlemen, I welcome you all to the Q2 and H1 FY25 Post-Earnings Conference Call of Chaman Lal Setia Exports Limited. Today on the call from the management, we have with us Mr. Rajeev Setia, Joint Managing Director. As a disclaimer, I would like to inform all of you that this call may contain forward-looking statements, which may involve risks and uncertainties. Also, a reminder that this call is being recorded.
I would now request the management to brief us about the business and performance highlights for the quarter, the growth plans and visions for the coming year, post which we will open the floor for Q&A. Over to you, sir.
Rajeev Setia — Joint Managing Director & Chief Financial Officer
Good afternoon and I wish you Happy Diwali. It has just gone. You all may have enjoyed your Deepavali. I’m visible, yeah?
Operator
Yes, sir, you’re visible.
Rajeev Setia — Joint Managing Director & Chief Financial Officer
Okay, all right. Complete face because here the meeting is being recorded is coming over right?
Operator
No, it’s perfectly visible.
Rajeev Setia — Joint Managing Director & Chief Financial Officer
Okay. So the results of the company are with you. The company has grown its revenue, which went up to INR732 crore for six month of the current year. And our plans are to go up to INR1,600 crores, INR1,500 crore — INR1,500 crores is my positive target that I conveyed in one of the NDTV coverage. Actually, you see the — in our industry, a lot of small units have come new. Actually, Indian people work with the herd mentality if somebody is earning, then one-by-one new people start coming.
So we have an advantage of these people, they manufacture and they sell to us because our companies apart from manufacturing, we are mainly into traded business. We buy the rice as per our own satisfaction and specification which we require for our exports and then we reprocess it through air cleaning, stone cleaning, metal detection and Sortex cleaning and then we pack in our label as well as private label of the customer, which is our main business stay.
So these people — I mean, suddenly we feel the capacity has increased for us. These people, all — most of them are approaching us because our company makes payment in three to four days for every single purchase and deduct 2% cash discount. And when you make payment timely and you do get cheaper also. So this is how the company model is going on multiple buying without any — buying paddy and pay on the due date not to pay any interest and buying rice with the cash discounts and better prices. And as regards sale is concerned, it’s totally diversified sale with the smaller consignment, smaller means 5, 10, 20 containers, not like 5,000, 10,000, 20,000 ton.
We don’t do larger sales and the model is multiple customer in multiple countries, our outreach is now above 90 countries. And even in the single country, we have 20 buyers, 30 buyers. In US, we have 35 buyers plus. Canada have more than 20 buyers. And this is how I have buyers in all countries wherever I’m selling, because I give my brand, one company like distributor, we already — Maharani is in around 40 countries and rest we do private-label in all kind of packing, 1 KG, 5 KG pouch, jute, non-woven, whatever the customer likes, we do as per his desire or requirement and place the cargo. We housed up [Phonetic] every consignment in our factory with a very meticulous quality controls and it is opened at the gate of the customer outside India. He opens and downloads — unloads the cargo and start selling. So once now the question will arise, it’s different brand, it’s our brand or the buyer brand. Buyer also you see there most of the people are Indian, Pakistanis, Irani, Iraqis and now even the — these Spanish and these Britishers, these kind of people have also started entering into the rice people in US also and when they start their brand, their label, they have let’s say 500 smaller customers or household supply also. Once they start their brand and it goes well, they don’t take chance of going to another person. They — once the reliability has to come, then it continues. I have customers doing business for 20 years, 25, 30 years with me and new people also after the test of one or two consignments, they stick to us. They have only one word, keep up the quality. Quality should be fine and this brand becomes their baby and they promote that. This is how our sales goes on. You see there is volatility also in the rice business. I should be very candid with you that last year the prices of rice had come down by INR15 to INR20 a KG, per kg, that’s very huge amount for any business.
We have been buying and selling simultaneous, but still when such huge falls come, the possibility of losing money or selling at the breakeven that does come and it happened also because the sales have gone up and the profitability has not gone up in that way. But I’m very happy we have found new customers, new placements, new sale outlets and future — this year, in particular, the prices are very good, very reasonable. And we have already made sales customers and we’ll be able to sell at a very good prices profitably. This is — I have explained the model. We are manufacturing also. We have packing units. We have packing unit in Gandhidham also at the port. New unit is coming up in Mundra, which will be workable in two, three months and in Karnal factory, we are putting up three more units of Sortex cleaning. So demand and supply will be matching because right now demand is more.
With that, I close and request your question and answer.
Questions and Answers:
Unidentified Speaker
Sure, thank you, sir. [Operator Instructions] We’ll take the first question from Gaurav Singh [Phonetic]. Gaurav, you can go ahead.
Gaurav Singh
Sorry, hello, can you hear me?
Rajeev Setia
Yeah, absolutely right. Gaurav.
Gaurav Singh
Yes, sir. Sir, can you give us an update on the new packaging unit? Has it been commercialized?
Rajeev Setia
The three units are coming. Already machinery has come, installation is being taking place. And it will take two, three months, one or two months, one-by-one, they will start.
Gaurav Singh
Okay. So the first one will be coming in the next two to three months, right?
Rajeev Setia
Should be in a month maximum.
Gaurav Singh
Okay. And the other two?
Rajeev Setia
I mean, simultaneously work is going on, something we are [Phonetic] purchase, let’s assume 15 days or one month earlier, then next and next.
Gaurav Singh
Yeah. Okay. So sir, can we assume that all the three units will be coming in next three months?
Rajeev Setia
Definitely, all of them. And they will be working also, not only coming.
Gaurav Singh
Okay. And sir, what is the total Capex amount that we are investing in these units?
Rajeev Setia
Not very high. It is INR1,50,00,000 to INR2 crores per unit.
Gaurav Singh
Okay. Thank you, sir. That was all from my side.
Rajeev Setia
Yeah.
Unidentified Speaker
Thank you. We’ll take the next question from Sakshi Chhabra. Sakshi, you can go ahead. Sakshi, we are unable to hear you. Anybody else who wishes to ask a question may please use the option of raise hand or put your question on the chat box. We’ll take the next question from Piyush. Piyush, you can go ahead, please.
Piyush
Hello sir, what is your plan on focusing on domestic B2C and premiumization?
Rajeev Setia
B2C and B2B?
Piyush
B2B?
Rajeev Setia
B2C is only through this online sales that is going on gradually growing also wherever repeat orders are coming, so it will increase in the time to come and luckily recently I was in exhibition in Paris and on way back I met some guy. He lives close to me in Gurgaon and he heads — his job is to how to promote online sales. I’m holding a meeting with him next week and he’s suggesting how to improve your business, so he’s come across. He’s in touch with all big houses like Amazon, Flipkart, Blinkit, everybody. They will help us.
Piyush
No, my next question is can you explain the phenomenon of inventory move and the cash debt — cash-and-cash equivalents and this net debt move with actual…
Rajeev Setia
You are not clearly audible. Can you repeat your question slowly?
Piyush
Yeah. Inventory movements, like your inventory increase in 6% to 9% [Phonetic]. I think, I’m just trying to understand in H1 and H2, what we have shown in the working capital slide, how does the phenomenon of inventory and debt move?
Rajeev Setia
If you take into account the quarterly sales and you can make out how much inventory moves.
Piyush
Okay. Thank you sir.
Unidentified Speaker
So we’ll take the next question from the chat window. The question is from Mr. Gaurav Singh. I think he’s already asked this question. We’ll move to the next question, Mr. Veer. How much additional capacity is coming from the three new units?
Ankit Setia
Hello, Chacha.
Rajeev Setia
Ankit, you are in?
Ankit Setia
Yes, I’m in.
Rajeev Setia
Ankit, you answer the question, three new three new unit, which will be coming in one to three months next?
Ankit Setia
Yes. So last quarter, yes, I’m going to answer it. Okay. So last meeting, we shared about setting up three new units. And I think by February or January, all three units will be operational. So by January end the — all three units will be operational and we will be sharing a complete video of all the three units in action.
Rajeev Setia
And Ankit, you have forgot one unit is coming up in Gandhidham also.
Ankit Setia
Yes, of course.
Rajeev Setia
Yeah, they will be four and…
Ankit Setia
So they will — that will be an additional unit coming up in Gandhidham.
Rajeev Setia
Mundra.
Ankit Setia
Absolutely sophisticated unit coming up in Gandhidham also.
Unidentified Speaker
Ankit, his other part of the question is what additional capacity will be coming with these three new units?
Ankit Setia
Okay. So you can expect, see, if you look at our quarters, we are doing roughly about INR400 crores, INR450 crores per quarter. So with these three units in-place, you can expect additional at least a revenue of INR100 crore every quarter to start with.
Unidentified Speaker
And what is the total investment in the three mentioned units?
Ankit Setia
It is — see, as far as land is concerned, land is already present with the company. The warehousing also is ready. If strictly talking about the machinery, I think one unit will not cost more than INR2 crore, would be less than INR2 crores. So we’re not talking much money. It’s absolutely nothing with the kind of revenues which will be generated.
Unidentified Speaker
Sure. We’ll take the next question from Purav. Purav, you can go ahead. Purav Patel [Phonetic].
Purav Patel
Yes. I have three questions. The first question is that I was reviewing the export data for FY23 and FY24 and significant portion of our sales comes from Malaysia and Israel. So could you comment on the geographic concentration risk associated with these territories and a significant portion of sales coming from these two territories only?
Ankit Setia
Okay. Chacha, go ahead.
Rajeev Setia
Yeah. I’ll talk about Israel. I’m wondering because we — from the distance, we also feel very depressed looking at the fight going on between Israel and Iran and other Lebanon, all parts. But when I talk to my Israeli customers, they say we are habitual. These things keep on happening. Here the life is absolutely normal. And now for getting that side, let’s come to our own part. We are regularly exporting and instantly getting payments full. If it is $300,000 shipment or $400,000 shipment. On the arrival, next year we get our money. So and we are one of the largest exporter to Israel.
Purav Patel
Correct. So that was the assurance I was looking for since we had a significant exposure to those territories.
Ankit Setia
Also, Purav, I would like to add. Where the things are risky, you make more money over there and there is demand also more over there. As far as Israel is concerned, it’s absolutely safe to export rice. And because of the — rather because of disturbance, I would say, we have benefited because demand is much more what we are supplying right now. Regarding Malaysia, I would say the port of Malaysia is used. That is why you’re getting confused that rice is going to Malaysia. It is going all over the places from Malaysia. Rice is ending up in Indonesia, it is ending up in Japan, it is going to Australia. Only we use the port because we save on the freights.
Purav Patel
Got it. Got it. Okay. So the second question is, I’m tracking a metric, which is the director’s remuneration as a percentage of net profit, which was 8.81% for FY24 and compared to our competitors, this number looks quite high. Now the competitor’s numbers are 3.38 percentage and 1.82 percentage. We had a similar high ratio in FY23 and FY22 as well. So could you clarify the rationale behind the sustained high compensation levels? And wouldn’t a better dividend distribution policy serve better for all the shareholders rather than concentrating benefits among just the promoters?
Rajeev Setia
Ankit, I will explain. As regard dividend is concerned, we have given around 10% of the profitability in this — in the last one year and that recently disbursed a dividend. And your question regarding this remuneration, it is well within the rules, but I don’t know how come 2%, 3% others are taking, I don’t know how the siphoning of the money so whatever is happening, I just can’t comment. We are taking limited money. We have families, we have everything, we need our security also.
Purav Patel
Got it. That’s all from my end.
Rajeev Setia
Company has — so maybe we trust in the company also we have deposited money.
Ankit Setia
Maybe Purav in the future, this percentage will come down.
Purav Patel
Yes. Perfect.
Ankit Setia
That is possible. It will be reduced. Yes.
Rajeev Setia
This question was raised by one of the investor in the past. So we have already decided wherever it is extra, just tail down.
Ankit Setia
See, our core thinking is that the company should become strong, the company should become financially strong. This is the main idea. That is why we are increasing our sales. We are increasing our productivity so that the revenues go up, more profitability comes in. And your question, I think with time this percentage will go down on its own.
Purav Patel
Perfect. I also find the management team of your company as a very positive thinkers and are trying to grow the business very well. I congratulate you for the results and all the best for the future. Thank you.
Rajeev Setia
Thank you very much, Mr. Patel.
Unidentified Speaker
Thank you. We’ll take the next question from Rajiv [Phonetic]. Rajiv, you can go ahead, please.
Rajiv
Karan sir, am I audible?
Unidentified Speaker
Yes.
Rajiv
Yes. So my question is, how should we look at the growth in last three years? We have seen revenue growing from — revenue growing at 20% to 30%. This year you are indicating around INR1,500 crores. What do you envisage for the next three years?
Rajeev Setia
Ankit. [Foreign Speech].
Ankit Setia
[Foreign Speech].
Rajeev Setia
[Foreign Speech].
Ankit Setia
Okay. Looking at the past, you can see from the past the sales are growing up. So same can be expected in the future also. As of now, I can speak that we have more orders than what we are packing monthly. So there is lot of future, there is a lot of scope to grow. But having said that, I would always say, look at the past, look at the history of Chaman Lal Setia in the past. I think same is going to follow in the future.
Rajiv
Okay, thank you, sir.
Unidentified Speaker
We’ll take one question from the chat. This question is from Mr. Manish Kela. What is the logistics cost in Q1 and Q2 in rupee terms and how is it compared to whole of last year and Q1 of last year? Asking this since margin/profits have been impacted since the logistic cost has been on — has been high on account of Red Sea crisis.
Rajeev Setia
I will answer Ankit. With the Red Sea crisis last year, the ocean freights had gone up and now from $5,000, they have already come down to $2,000. They are coming down, every single day they are coming down. So in many cases, we have already sold CIF and our ocean waste [Phonetic] have been factored at the high price, but we are getting more profitability on these things.
Unidentified Speaker
Yeah. We’ll leave the next question from Prashant. Prashant Shah [Phonetic], you can go ahead.
Prashant Shah
Hello. Am I audible?
Rajeev Setia
Absolutely yes.
Prashant Shah
Yeah. First of all, congratulations to the team for the excellent results. I have two questions. One is on the inventory. As you mentioned, Rajeev ji that last year — I mean in the previous quarter you had to — I mean the price had raw-material — rice price had gone up and so you had to at times sell on a cost basis. This year, what is your outlook on the rice crop, the pricing and with the coming production — additional production capacity, do you think our inventory level will go up to the same proportionate level?
Rajeev Setia
In this particular year, the crop size is around 15% to 20% higher and some parts are not evaluated by APEDA because they are out of GI area like this MP and Rajasthan and some parts of UP. Our own surveys and from fellow business people the area under crop has grown up, so the prices are very, very reasonable as compared to last year. If I — in the Diwali, we have a system of writing the prices of products. I just saw INR97 I wrote for 1121 steam rice last year and this year the same rice old is INR80, INR81.
So the new rice is likely to be lower than that or close to that. So when our purchases are at lower prices, reasonable prices, our sales price are more or less fixed all-around the world. So there is a limited chance of coming down. Yes, I can say with the Saudi and Dubai market because their closure, [Phonetic] they are more competitive, maybe little prices will have to reduce, but most of the part where brands are going, our as well as our private-label, we don’t think we need to reduce the prices, maybe little we do, but the profitability should be very good and sales should be very good at this year.
Ankit Setia
I’d like to add a point.
Rajeev Setia
Ankit add.
Ankit Setia
I’d like to add a point that the model, the way we do our business with the model, it suits us where the prices of paddy and rice remain low. It really helps us. This is our model.
Rajeev Setia
Yeah. Okay, so…
Ankit Setia
Because we don’t — see, we don’t like to speculate. We are not that we buy something at INR30 by the God, it becomes INR40 and we are making money. We don’t work like that. We would rather buy something at INR20 and have strength to sell it at INR35 or INR33. This is the model.
Prashant Shah
Okay. So aligned to that, I mean, since our capacities are going to go up, we have more orders than we can process. Are we thinking of taking advantage of the lower prices by procuring more rice at the current favorable rates and locking our profitability?
Rajeev Setia
Yes, we are very aggressive in buying these, yes [Phonetic].
Ankit Setia
See, as of now, we are not even covered with what we have sold. So we are basically covering every day because there is a limit of how much rice you can unload, how much paddy you can unload, right? So we are in the process of covering all that. So moment we are able to cover what is sold, then this what you’re asking will start, then we will see what is cheaper available. We’ll of course like to take a position on that also.
Rajeev Setia
And company has immense funds at this time of time. We are not borrower as yet with the bank. We still have our own cash flow. First, we’ll buy with that and then we’ll start with the bank.
Prashant Shah
Okay. Yeah. My next question is, I mean on the profit and loss, I mean the earnings statement. Quarter-on-quarter, our sales are more or less the same, but other expenses have gone up from INR32 crores to INR41 crores, which is around a 25% jump. If you can throw some more light or give some more details on why this line-item of expense has gone up, that would be helpful.
Rajeev Setia
Look, this — this administration cost gradually goes up with the market forces the way the prices are going up. And there is another contribution of ocean freights going high. These are two-parts which I have seen.
Prashant Shah
Okay. Thank you, Rajeev ji, Ankit ji, and wish you all the best for the coming quarters.
Rajeev Setia
Thank you very much.
Unidentified Speaker
Thank you. We’ll take the next question from Gaurav Singh [Phonetic]. Gaurav, you can go ahead.
Gaurav Singh
Yeah. Sir — sorry. Ankit sir just said, the three units will generate around INR100 crore. So this INR100 crore is combined from all three units or per unit will generate INR100 crore revenue per quarter?
Ankit Setia
What I said was to start with every quarter INR100 crore more revenue will come to start with, this is what I said. Is that — does it — I mean it clarifies your question?
Gaurav Singh
Sorry, sir, I won’t be — I wasn’t able to hear you sir, can you repeat?
Ankit Setia
Okay. So what I’m saying is by adding these three units, let’s say they start by January end, every quarter, at least there will be an additional of INR100 crore as revenue because of these three units to start.
Gaurav Singh
And what is the PI value [Phonetic] sir?
Rajeev Setia
Eventually, they will go up.
Gaurav Singh
What is the PI value?
Rajeev Setia
It will go up to INR150 crore positively.
Ankit Setia
Let us see because we are putting three plants. Two plants are dedicated for 5 kilogram packing and one plant is dedicated for 50 kilogram packing. So moment, the two plants kick in and these are sophisticated big automatic plants for 5 kilo. So when they come into full action, the force on the old plants will come, it will get less and then we will put the older plants on other packing — packaging sizes. Right now what is happening is a plant which is not fit for 5 kg, even we are putting pressure on that to pack 5 kg. So let us see what happens. Let the plant start first. This is what I would say.
Gaurav Singh
Okay. And sir, one last question. Iran has put an ban on Indian rice for two months. So will this impact our company?
Ankit Setia
So 22nd November, this ban is going to get lifted. There is absolutely no impact. We don’t work with Iran.
Rajeev Setia
We don’t.
Gaurav Singh
Okay. And will it put any pressure on the rice price in the Middle East area?
Ankit Setia
No, there’ll be more consumption because once Iran opens up on 22nd November, there will be bigger quantity of imports to — I mean exports to Iran.
Gaurav Singh
Okay. That was all from my side. Thank you.
Unidentified Speaker
Okay. Prashant, do you have a follow-up question, you’re unmuted.
Prashant Shah
No, I’m through. You can take the next question.
Unidentified Speaker
Yeah. There’s a question in the chat from Anurag Jain. Could you share the company’s vision for the next five to 10 years and how does the company see itself in the long-term?
Ankit Setia
If you go in the past [Foreign Speech] and our model is small, small profitable customers all over the world. [Foreign Speech] This is my vision for the company. We have a very strong new bio development team. We travel extensive to all major food shows all over the world, [Foreign Speech] all over the world [Foreign Speech].
Unidentified Speaker
Okay. The next question is from Guneet Singh [Phonetic]. You are free to answer or not answer this question. Can you share some guidance for FY26 in terms of revenue?
Ankit Setia
I would again say it is difficult to comment or predict anything. You should look at the history of Chaman Lal Setia. The way it has grown in the past, similar will be the future also. But I assure my — I mean, I assure all our investors that we are working extremely hard on the model we are that only the revenue goes up. That is why we’ve added three new packing units, one packing unit is coming up in Gandhidham. So with all packaging units in place, all shipments going even more on time and the quality is perfect, I’m sure the revenues will even go higher in the next year.
Unidentified Speaker
Sure. We’ll take the next question from Mr. VP Rajesh [Phonetic]. VP, you can go ahead.
VP Rajesh
Thanks, Vinay. So congratulations on good set of numbers guys. First question is on the — you said you are putting up capacity in Mundra as well. So what is the revenue potential for that and what is the Capex associated with it?
Rajeev Setia
Capex is less than — it will be around INR1,50,00,000 Capex. I mean.
VP Rajesh
Okay.
Rajeev Setia
Yeah. Machinery, complete machinery Sortex, electric, all is likely to be because the budget is INR1,50,00,000 approximate, maybe INR10 lakh, INR15 lakh left and right.
VP Rajesh
So you don’t have to buy land or any other construction?
Rajeev Setia
No, no, only machinery part, I’m running. The construction land is already there.
VP Rajesh
I see.
Rajeev Setia
Yeah, yeah. There’s no investment on that. And capacity-wise, because over there, I plan to do bigger size work, not 1 kg, 5 kg that happens at Karnal only pouch packing. I will be going for the bigger pack and I think that will give more than INR100 crore annual one [Phonetic], more than, INR100 crore to INR150 crore, INR30 crore, INR40 crore we can — INR25 crore, INR30 crores we can do monthly there.
VP Rajesh
I see. So this is in addition to the three — sorry, go ahead.
Rajeev Setia
Addition to these three, that’s a different place.
VP Rajesh
Right. So three are coming up in Karnal and one in Mundra.
Rajeev Setia
One, yeah, one in — new one in Gandhidham. There is already one working in Gandhidham, but it is in one leased place. We have limitations to grow business there. So we are going to our own site.
VP Rajesh
I see. So total of basically five units are coming up, right, in the next three months.
Rajeev Setia
Four are coming up. One is there, four are coming up. Three in Karnal.
VP Rajesh
Yeah. Three Karnal and one in Mundra, right?
Rajeev Setia
Correct.
VP Rajesh
Okay. And then last year in Fiscal ’24, our debt outstanding is or was INR175 crores. And given your commentary just now that you have not borrowed, any idea as to what you’re planning to borrow by March with the banks?
Rajeev Setia
Normally our — this borrowing starts in the month of November and November and it should start. Yeah, because we still have a lot of funds with us, which will FD our shape [Phonetic] in the bank and which will utilize in the coming period. And from — normally it starts from November and our borrowing every year. And by March, by April and then that is exhausted also finished payback.
Ankit Setia
So maybe the raw-material and rice paddy cost is less this year. So maybe the borrowing starts by end of November, maybe this year.
VP Rajesh
Yeah. And what are your total limits with the bank?
Rajeev Setia
INR300 crore via HDFC Bank and INR50 crore with PNB.
VP Rajesh
I see. So potentially you can buy up to INR350 crores, right? You won’t go that far.
Ankit Setia
We can buy, but we have no intention of using these loans and we use them extremely for short-terms.
VP Rajesh
I see.
Rajeev Setia
Company has no term-loan or nothing. We don’t owe a penny to the bank today.
VP Rajesh
Right, right.
Ankit Setia
So one thing I assure you like you guys ask what will be the future of the company in 2026, 2027? I’d like to assure first thing will be not using any bank money to work all the business of Chaman Lal Setia with our own money. This is a very correct vision.
VP Rajesh
No, but you will definitely take seasonal financing to buy…
Rajeev Setia
We do take every year.
Ankit Setia
You are right, but I’m saying, when you ask vision, this will be my vision not to borrow anything from the bank, work with my own money. I know it is difficult. When it is season, sometimes the raw material comes at such a low price, you have buyers, they are placing such big orders. So you need to take money. And that too, the money we are taking from the bank, the rate of interest is extremely low. I think we are paying about 4% is not more than that.
Rajeev Setia
This is after subvention.
Ankit Setia
Yes. So final is only 4%, so it’s very low. It’s on very low side.
VP Rajesh
Understood. And then in terms of the margin, right, so given your raw material — cost of raw material will be lower this year. So can we expect like low-teens kind of margin next year or maybe at least double-digit plus like 11, 12? Next year, that is fiscal ’26?
Rajeev Setia
It is too far.
Ankit Setia
Yeah, it’s too far. We can talk about this particular year, the prices of raw materials are on the lower side and that really helps our model.
Rajeev Setia
The quality of rice is very good this year because of good rains. So we expect — I think we’ll be buying maximum possible, even utilizing, I think utilizing at least 80% of our payments [Phonetic]. I personally feel that let’s see what happens.
VP Rajesh
Okay. All the best. Thank you.
Rajeev Setia
Thank you.
Unidentified Speaker
We’ll take the next question from Rajiv. Rajiv, you can go ahead.
Rajiv
I have a follow-up question. Can you talk about growing brand business in India and what’s the strategy there? And do you plan to expand your retail and distribution business in India?
Rajeev Setia
[Foreign Speech]
Ankit Setia
[Foreign Speech]
Rajeev Setia
Brand Maharani is already in 40 countries. We — because it’s our endeavor to promote our brand, it should be for every company, not us. If I talk about brand, my first consignment which went to Singapore in 1982 was also in my brand. And second in Dubai was also in Maharani brand. This is our endeavor. But you see we are getting one distributor in — try to get distributor in every single country. We already have in 39 to 40 countries. But we sell to — sell in private label also that’s essential to run the show. And as regard the local market is concerned, we are presently — if I am candid with you, we are stressing more on the foreign markets because new markets are coming up and the Basmati business and Indian food is getting promotion all over the world because even Chinese food is coming down. Indian restaurants are coming up and the local people are eating Indian food.
And we are trying to utilize that part. India is with us with a growing population. No problem. We don’t want to burn money unnecessarily to get into the market. But when this conducive state will come, we’ll definitely enter. We are trying to grow our online business. I’m going to have a big consultant on this issue also online sale.
Rajiv
Okay. Thank you for your answers.
Unidentified Speaker
Thank you. We’ll take the next question from PA. PA, could you announce your name since your abbreviation is entered?
Palash Agarwal
Hello sir, my name is Palash Agarwal. And thank you for taking my question and wish you a very warm good afternoon. I want to ask you sir that your trailing 12 months revenue is already more than INR1500 crores. And with new capacities coming up in about one month’s time, do you think that there is an upside risk to your revenue guidance?
Rajeev Setia
No, no, no, repeat your question, I could not understand please.
Palash Agarwal
Sir my question is that in the trailing 12 months your revenue is already INR1500 crores. In the last four quarters, your revenue is already north of INR1500 crores, the total sales. And since — yeah in the last four quarters and new capacities will be coming up in about one month’s time. So will there be an upside risk to your revenue guidance for FY25?
Rajeev Setia
Yeah, because the last year it was little less than INR1400 crore. Firm projection is INR1500 crore. It may be INR1600 also. So let’s see. We are working hard on that.
Palash Agarwal
Okay. And what about FY26? The revenue should be — your previous guidance was around INR1800 crores and or maybe more than that. So are we staying on that guidance?
Rajeev Setia
The way the business is growing and moving, the way we are getting orders, the way we — the company is getting international goodwill also, international presence also we feel it should — we should be able to achieve all what we said or what we project. And company is participating in exhibition all on next exhibitions and we are participating in Chicago Private Label packing. Private Label it is called exhibition. So we are one of the largest private label player from India. And we — it will be the first time we’ll be participating there. And it also happens in Netherlands. Maybe the next we will take that. Gulf Food is coming which is one of the biggest. We are in the concourse. Every business person crosses that area.
So we are likely to get good customers. And then thereafter a new goal [Phonetic]. So we are participating in Germany. The more we work hard, more we run, the more we expose. Business will definitely come. It has to come.
Palash Agarwal
Great. Just one more question sir. And please confirm if my understanding is correct. I understand that what — whatever rice you will be procuring right now on Basmati rice, we’ll be aging that for next six to 12 months and then be selling it over the next financial year. So should we expect the margins to really expand in next financial year?
Rajeev Setia
Look this first thing first. We have no this mindset to age the rice. We buy, sell, make money and we’ll keep — we keep on getting rice whole year. And whenever we feel like the prices are stooped on very low we go for buying and then stock also. This is the business you know.
Palash Agarwal
Okay. Thank you so much. Thanks. That’s all from my side.
Unidentified Speaker
Thank you. We’ll take the next question from the chat window. The question is from Mr. Manish Kela. Is the company planning to get into Jasmine rice? One of your competitors had mentioned that Jasmine rice as a category is growing and getting bigger than Basmati rice, especially in countries like USA. Your views on that, sir?
Rajeev Setia
Jasmine rice is not Indian product. It’s from Thailand. So if the — our peer is buying from Thailand and selling in USA, he must be doing that is permitted under the law also if we buy and sell to third countries, he can. He must be doing. If the customers ask, we can also start those things. That’s not difficult. We know the Thai people also. They are in touch with us. But Jasmine in India, selling in India is not heard of.
Unidentified Speaker
Okay. So Gaurav has just requested if you could again share what is the revenue potential from the Gandhidham unit that is coming and what is the timeline for commercialization of this unit?
Rajeev Setia
Gandhidham around INR70 crore, INR75 crore is annual with the existing unit. That’s a small one. The one which is coming up new is with the larger capacity. So that is from the different company. With that model we are not using in Karnal so far. This is a different company. Let’s see what kind of production comes. He claims you will get very large production. Secondly, the packings are not small. Production depends upon the packing which you do. So the packings are bigger.
Let’s see what we get good chance there.
Unidentified Speaker
There’s a question. There’s a question in the chat from Shivam Davey. What is the demand scenario for Basmati rice? And is there any slowdown seen in overall demand?
Rajeev Setia
No, no. With us we have more demand than our own supply. That’s why we are rushing for the Capex increase.
Unidentified Speaker
Sure. Anybody else who has a question, please raise your hand. So since there are no further questions, would you like to give your closing comments so we can end the call?
Rajeev Setia
Ankit, go for the closing comments. Ankit? Ankit has left?
Unidentified Speaker
Ankit has logged off, I think so.
Rajeev Setia
Yeah okay. All right. I thank all the people who joined this con call and we’ll continue with every quarter and we’ll try to live up to your expectations also. That’s what I can say. That’s all. Thank you very much for joining.
Unidentified Speaker
Thank you, sir. Thank you to all the participants for joining us on this call and thank you to the management team for giving us their valuable time. This brings us to the end of today’s conference call. You may all disconnect now. Thank you.
Rajeev Setia
Thank you.