Dodla Dairy Ltd. (DODLA) Q4 FY22 Earnings Concall Transcript

Dodla Dairy Ltd. (NSE: DODLA) Q4 FY22 Earnings Concall dated May 20, 2022

Corporate Participants:

Aniruddha Joshi — ICICI Securities — Analyst

Dodla Sunil Reddy — Managing Director

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Anjaneyulu Ganji — Chief Financial Officer

Analysts:

Sameer Gupta — IIFL Securities — Analyst

Gaurav Jogani — Axis Capital — Analyst

Bharat Gianani — Moneycontrol Pro — Analyst

Pranjal Garg — ICICI Securities — Analyst 

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the Dodla Dairy Limited Earnings Conference Call hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Aniruddha Joshi. Thank you, and over to you.

Aniruddha Joshi — ICICI Securities — Analyst

Yeah. Thanks, Mike. On behalf of ICICI Securities, we welcome you all to Q4 FY22 results conference call of Dodla Dairy Limited. We have with us today senior management represented by Mr. Sunil Reddy, Managing Director, Mr. BVK Reddy, CEO and Mr. Anjaneyulu Ganji, CFO.

Now, I hand over the call to Mr. Sunil Reddy for his initial comments on the quarterly performance as well as FY22 performance and then we will open the floor for question and answers. Thanks and over to you, sir.

Dodla Sunil Reddy — Managing Director

Thank you very much, Aniruddha. Hello everybody. I welcome you all to the Q4 financial year 2022 earnings conference call. And I hope all of you are doing well today.

I’m glad to announce that we have delivered a strong year of 15% year-on-your revenue growth on back of strong volumes and VAP sales numbers. Our milk volumes in the financial year 2022 are around 12,20,000 liters per day, which is around a growth of 12% year-on-year. Our average milk procurement now stands at 12.5 lakh liters per day, which is also a growth of around 16% year-on-year.

Moving onto our quarterly numbers. We have delivered yet another quarter where in our milk volume growth and VAP numbers provide us to achieve a 11% year-on-year and 3% quarter-on-quarter revenue growth in the Q4 of 2022. Our average milk procurement in Q4 2022 was around 12.3 lakh liters per day as compared to 10.8 lakh liters in the same quarter last year. Geographical expansions of our operations and inroads in new markets are visible through the growth in numbers of our facility and direct and indirect distribution channels. We also saw healthy numbers in our VAP sales despite the seasonality this quarter, but normally it is observed in the months of winter months like January, February, sales of chilled products like curd, lassi, butter milk, flavored milk and ice cream as such are subdued as compared with the summer, which in the following years of April, May and June as people prefer to have hot beverages during these times of the year. Despite that, we have done well there.

Now, we aim to speed up this growth further and enter into new unexplored territories to consolidate our traditional products and our VAP sales. On this front, you all must be knowing that we have successfully acquired Sri Krishna Milk Private Limited. This acquisition is in line within our strategy of growing through organic and inorganic means. Because of acquiring Sri Krishna, apart from penetrating in Northern Karnataka and Goa markets, this acquisition will also enhance our product offerings and production capabilities. A small background on Sri Krishna Milk; it is a well known milk and milk products brand in Uttar Karnataka and Goa. Currently, Sri Krishna has like most of — milk, curd, lassi, butter milk, ghee, butter, khoa, sweets, paneer, flavored milk and shrikhand. All these products are suited to the Indian palette. This is the philosophy, which we also believe in. The acquisition, apart from the benefits of geographical penetration also gives us access to established brand with healthy products mix, established distribution network in area with huge margin potential. We also have synergistic procurement network and last but not the least, high quality manufacturing infrastructure. With this, we will be carrying on our journey of growth. Such acquisitions will always help us reach new places and share synergies with our business model.

Now, I’d also like to take a note of this opportunity to thank all our stakeholders for supporting us through this journey wherein we closed our first financial year as a listed entity. This has been a special one for us and we hope to add value to all of you through our strategy and execution.

With this small brief, I will now hand over to BVK Reddy, our CEO of the company. Thank you very much.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Thank you so much, Sunil sir. Very good morning to all the participants. As mentioned by our MD sir, we have delivered a healthy quarter, showing a growth in revenue and other parameters. Our constant push towards expanding our footprint across India is shaping up well and the acquisition of Sri Krishna Dairy is a good example of the same.

Today, we procure milk from around 1.2 lakh dairy farmers daily and providing a regular direct payment to the bank accounts. Our direct procurement model has further strengthened wherein we are buying almost all the milk directly from the farmers across more than 8,000 villages as compared to last year 7,000 villages, resulting cost saving, establishment of deep-rooted relationship with them and our OrgaFeed operations, wherein we provide high quality feed to the dairy farmers, help us to strengthen these relationships with them and also ensures that both the parties get benefited. Our OrgaFeed revenues are almost double this year. The details of which will be shared by CFO, Mr. Anjan later on this call.

In terms of our presence, we continue to have third highest market presence across all states in India, supported by third largest procurement network, 14 processing plants with 20 lakh liter capacity per day capacity. We currently have a 110 chilling plans as against 104 in the previous quarter. Today, we have around 563 Dodla retail partners as agonist 393 in March 2021 and we also have strong 1,799 milk and milk distributor channel, which was 1,718 in the last quarter. We have around 3,000 distribution agents, networks, but are all well established in many areas of the country.

We continue to strive for enhancing our footprints and brand visibility with every passing year when we are making a constant efforts to expand our geographical footprint, distribution, network, strengthening brand recognition and improve our margins to our unmatchable growth in the industry.

With that said, I would request our CFO, Mr. Anjan to give a financial overview of this quarter.

Anjaneyulu Ganji — Chief Financial Officer

Thank you, BVK sir. Good morning everyone. I would like to briefly touch upon the key performance parameters for the full year and fourth quarter of financial year 2022. We have also submitted a detailed presentation of our financial performance on stock exchanges and we have also uploaded to the same on our website.

Now taking a quick glance at the financial highlights for the year ended 31st March, 2022. Operating revenues were at INR22,434 million in financial year 2022 compared to INR19,440 million in financial year 2021, registering a growth of 15%. Profit after tax was at INR1,328 million in financial year 2022 compared to INR1,260 million in financial year 2021, showing a growth of 5%. Earnings per share for financial year 2022 was INR22.43. This is in line with what we had in financial year 2021. Our Africa revenues stood at INR1,467 million in financial year 2022 versus INR1,069 million in financial year 2021, witnessing a growth of 37%.

Financial highlights for the quarter ended 31st March, 2022 are, the operating revenues are at INR5,897 million in Q4 financial year 2022 compared to INR5,305 million in Q4 of the previous year, registering a growth of 11% year-over-year. Profit after tax was at INR405 million in Q4 of financial year 2022 as compared to INR96 million in the last year same quarter, showing a growth of 322% year-on-year basis. Earnings per share for this quarter financial year 2022 was INR6.8 as compared to INR1.7 in Q4 of financial year 2021 which is again a growth of around more than 300% on a year-on-year basis.

Now talking about the operational highlights for the quarter ended 31st March 2022, the average milk procurement during Q4 financial year 2022 was 12.3 lakh liters per day compared to 10.8 lakh liters per day in Q4 FY 2021 and 12.4 lakh liters per day in Q3 financial year 2022. Average milk sales during Q4 FY 2022 were at 9.7 lakh liters per day compared to 9.2 lakh liters per day in the same quarter last year and 9.9 lakh liters per day in the previous quarter. Curd sales during Q4 financial year 2022 was at 288 metric tons per day compared to 266 metric tons per day in Q4 of financial year 2022 and in the previous quarter, it is 245 metric tonnes per day. Revenue from value-added products excluding fat and fat based products was at INR1,406 million, contributing 24% to the overall dairy revenue during quarter four of financial year 2022 compared to INR1,192 million, contributing to 21% to the overall dairy revenue in Q3 of financial year 2022.

Discussing briefly about our margins this quarter. Our margins were impacted due to the increase in raw material and freight prices. Having said that, I would also like to mention that we are confident that this will be offset partially by price increases going forward. With our increasing footprint across India, good [Phonetic] numbers in Africa each successive quarter and resilient value-added product sales and pricing power, we are confident of achieving our year-end margin targets and as Mr. Sunil mentioned, becoming a formidable player in the dairy industry. And this year we also shifted from new tax regime from the old tax regime. So we shifted from a 30% tax bracket to a 22% tax bracket for the dairy industry. So with that, we no more can claim ATIB [Phonetic] directions. So we’ll be getting that effective tax rate decrease from this year onwards.

That concludes our update on the financial strategy, which we believe has been positive in all aspects.

With that being said, we’d now like to open the floor for questions. Thank you, everyone.

Questions and Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Sameer Gupta from IIFL. Please go ahead.

Sameer Gupta — IIFL Securities — Analyst

Hi, good morning, sir and thanks for taking my question. I just have one question, sir.

Operator

Mr. Gupta, I would request you to kindly come a little closer to the mic or go off the speaker phone. Your voice is not very clear.

Sameer Gupta — IIFL Securities — Analyst

Is it clear now?

Operator

Yes, it is good now. Thank you.

Sameer Gupta — IIFL Securities — Analyst

Thank you. Good morning everyone. Thanks for taking my question. I just have one actually. So we are seeing inflation across the board. But when it comes to Dodla, we are hardly seeing any. So in fact, I was just doing a back calculation where your milk procurement is up some 13%, 14% Y-o-Y, but your RM costs are only up 11%, also other expenses up 3%. My sense was that freight is a large cost for us and we all know what is happening with the fuel prices. So how are we managing this? Are we taking more price hikes? Even with the price hikes, there is hardly any RM inflation. So milk procurement not increasing in line or tandem with other agri commodities. Just a sense on what is actually going on in the ground, sir.

Anjaneyulu Ganji — Chief Financial Officer

Yeah. So this is Anjan, CFO. As you rightly said, we started taking the price hikes for the fuel price increase and also these milk prices are seasonal. So we are waiting for the price hikes for this month and they started already coming down. So for the fuel prices increase, we already take the price increase in Q4 of the last year. That’s where there is a margin improvement compared to the previous quarters and we’ll wait and watch and see. Mr. BVK sir will give an update on the sales price if he want to take it, because it is a seasonal thing for the raw material procurement.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. See, I want to add something to this. Actually price hike started, fourth quarter is very high, actually slightly it started from third quarter itself. And in the fourth quarter, it has further gone up, but we have done simultaneously price correction also in the fourth quarter. Slightly we have taken more than INR1 sales correction in the fourth quarter and also slightly, see, our transport cost has gone up and packing material cost has gone up. So that’s why, there is an impact in fourth quarter, but slightly we were able to manage surge in sales realization.

Sameer Gupta — IIFL Securities — Analyst

Got it sir. Just one follow-up here. Milk procurement price, what is currently the average price that you have paid in 4Q and how was this in the base quarter?

Anjaneyulu Ganji — Chief Financial Officer

Yeah. See, in third quarter, it was INR32.40 and fourth quarter it has become INR34. And sales realization INR49.40 in third quarter and fourth quarter, it has become to INR50.70.

Sameer Gupta — IIFL Securities — Analyst

Got it sir. Thank you.

Anjaneyulu Ganji — Chief Financial Officer

Thank you.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Shirish Pardeshi from Centrum Capital. Please go ahead. Mr. Pardeshi, we are unable to hear you. Kindly check if you have muted your line. Mr Pardeshi, we are unable to hear you. We will move onto the next question. We have the next question from the line of Gaurav Jogani from Axis Capital. Please go ahead.

Gaurav Jogani — Axis Capital — Analyst

Thank you for taking my question, sir and congratulations on a resilient performance in the tough environment. Sir, my first question is with regards to the margins. Even if you see for the full year, the EBITDA margins are trending above the historical levels of around 6%, 7% odd and is now at around 9%, 9.5%. So one, I would like to take your perspective on the same on how the margins can trend forward going ahead considering the inflation and our growth plans.

Anjaneyulu Ganji — Chief Financial Officer

Yeah. See, earlier also, we have said couple of times that we’ll be looking our margins between 10% plus or minus 1%. So we see it as you see, we have done already 9.4% average EBITDA. And in the similar lines, we are expecting that even this coming financial year also in spite of diesel price hike and all that.

Gaurav Jogani — Axis Capital — Analyst

Sure. So if you can help me, what is the current procurement price for you that you are seeing and how much of the inflation you’re seeing on a Y-o-Y basis in Q1 FY23 for now.

Anjaneyulu Ganji — Chief Financial Officer

Q1 FY21, see, our procurement price was only INR31. Now Q4 it is INR34. And in fact on Q1 of 2022, it has gone up further INR1, so it is now INR36. But slightly now it is already we have started correction.

Gaurav Jogani — Axis Capital — Analyst

Okay. So you’re seeing them correction only raw material prices. Is that —

Anjaneyulu Ganji — Chief Financial Officer

Yeah. We have already started taking correction in the raw materials. We have already done in Maharashtra. We have already done in Karnataka and we are in the process of doing in Tamil Nadu in coming weeks. So we have already started doing correction in the raw material price because raw material prices have skyrocketed really. In Maharashtra, it went up to INR36 farmer price.

Gaurav Jogani — Axis Capital — Analyst

Sorry. How much [Speech Overlap]

Anjaneyulu Ganji — Chief Financial Officer

Maharashtra, went up to INR36.

Gaurav Jogani — Axis Capital — Analyst

Okay.

Anjaneyulu Ganji — Chief Financial Officer

I’m talking about only farmer price plus [Indecipherable] cost of tanker transport all put together it is landing at INR41. Now we have already corrected INR2 and this coming 21st also again, we are doing one more round. Not only Dodla, whole the industry is doing. Because of shortage they have taken up very quickly, very peak rise.

Gaurav Jogani — Axis Capital — Analyst

Okay. And so how is the visibility in terms of the procurement in that case. Is the procurement impacted because of this, I mean some corrections that you’re taking?

Venkat Krishna Reddy Busireddy — Chief Executive Officer

No. See, procurement won’t impact because timely it is raining here and there are showers now. It has already probably started in Tamil Nadu, Karnataka and parts of Maharashtra. So it is not going to impact us.

Gaurav Jogani — Axis Capital — Analyst

Okay. Sure. And sir, my next question is with regards to the Sri Krishna Milks that you have acquired. If you can give some sense on it. What are the plans there. Some sense of the profitability in the revenue part there would be helpful.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. So Sri Krishna, it is closer to Hubli. It covers north Karnataka especially but is South Karnataka, North Karnataka, up to Goa. So see, already we have a plant in Indragi, place called Indragi, closer to Koppal. See, we have a plant. Dodla earlier five years back, we’ve set up a plant and we are doing good numbers there, northern Karnataka and this is adjoining area. So we can cover South Karnataka, North Karnataka plus Goa, and see, doing around prior to COVID they used to do around [Indecipherable] and during COVID times they have come down, INR60 crores, INR70 crores. And this year, see, maybe it will take one quarter to correct it. So maybe in second quarter onwards, we will able to turn it around.

Gaurav Jogani — Axis Capital — Analyst

What kind of annual revenues you are possibly looking there in the next three, four years. I mean not talking about the short-term but a longer term, how much you see their profitability-wise. Do you expect it to take to the company level, any clarity on that front.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. The turnover, Anjan will give you year-on-year what is the turnover we are forecasting from Sri Krishna. But as far as you know, EBITDA is concerned, we will make it on par after second quarter onwards. So Anjan will just give the, what is the top line we’re expecting in Sri Krishna.

Anjaneyulu Ganji — Chief Financial Officer

So as of now, the turnover-wise we are doing around 50,000 liters per day from Sri Krishna currently. So the plant has a capacity to produce almost 1.2 lakh liters per day. And in the next four years, we are planning to increase the sales, the capacity utilization to take it to almost 80% in the next four years. So we’ll sell around 1 lakh liters per day from Sri Krishna, that is our target.

Gaurav Jogani — Axis Capital — Analyst

Okay. And so that will be gradual scale-up what you are seeing like from 50,000 liters to 1.2 lakh liters. So you’re expecting it to increase by 20,000 liters per year. Would that be a fair assumption.

Anjaneyulu Ganji — Chief Financial Officer

Yeah.

Gaurav Jogani — Axis Capital — Analyst

Okay. And sir, because of this Sri Krishna acquisition, how do you see the overall margins for the company improving. I mean so taking the base case of 9.5% for FY22 for now. So would there been incremental benefit to the margins because of this, the Sri Krishna acquisition in terms of the procurement or any other thing that you can see benefit from?

Anjaneyulu Ganji — Chief Financial Officer

From margin point of view, there won’t be — whatever now we have said will be done plus or minus 1%. Including Sri Krishna also we are targeting the same number.

Gaurav Jogani — Axis Capital — Analyst

Okay, got it. That’s all from me, sir. Thank you.

Anjaneyulu Ganji — Chief Financial Officer

Thank you.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Thank you, Gaurav.

Operator

Thank you. [Operator Instructions] We have the next question from the line of Bharat Gianani from Moneycontrol Pro. Please go ahead.

Bharat Gianani — Moneycontrol Pro — Analyst

Yes sir. Good morning and thanks for the opportunity. So the numbers have been brilliant in times of —

Operator

Mr. Bharat, I would request you to kindly go off the speaker phone. Your voice is not very clear.

Bharat Gianani — Moneycontrol Pro — Analyst

Yeah. Is it clear now?

Operator

Yes, we can hear you better now.

Bharat Gianani — Moneycontrol Pro — Analyst

Yeah. So sir, congrats for decent performance in challenging scenario. Sir, my question was regarding the value-added products that we do. So currently, curd is a bigger contributor in this. And I want to just know like how are we planning to take the VAP sales going forward and any product addition after the Sri Krishna acquisition, especially on the VAP side, if the company is able to do and kind of scale-up. So just trying to understand from that point of view.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. Sri Krishna also, similar kind of VAP they have, what Dodla has got, same buttermilk, lassi, curd, sweets and all. So percentage-wise, there is a same percentage, slightly. See earlier also we said, so overall, including all VAP put together, we had 28%, 29%. So we are projecting 30%, 31% VAP in coming days. So our focus is to increase continuously on value-added products sales. So last year we have achieved around 27% for the financial year 2022 and going forward for the next year, our projection is to reach 29% and 2% year-over increase and the next year forward we want to achieve around 31% is what is our target we are taking by ourselves of overall revenue.

Bharat Gianani — Moneycontrol Pro — Analyst

And sir, any new product addition from Sri Krishna Milks on the VAP side which we kind of plan to leverage. Is there any product as such?

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Our focus majorly is on milk and milk-based products. So though Sri Krishna has some sweet base, which is very miniscule. So we don’t want to concentrate on that segment rather than where we are strong around, we are concentrating on our strong areas and take it to the next level. So that is what our major focus as of now is. Whenever there is — as our management, says in in all the calls previously also, when we are ready for all the products and whenever the market increases, we are ready and we will lead it.

Bharat Gianani — Moneycontrol Pro — Analyst

Okay, sir. Thanks, and all the best.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Okay. Thank you, Bharat.

Operator

Thank you. We have the next question from the line of Pranjal Garg from ICICI Securities, please go ahead.

Pranjal Garg — ICICI Securities — Analyst

Yeah. Good morning, sir. Thanks for the opportunity. Sir, as you have highlighted in one of the previous questions that Sri Krishna Milks did INR60 crores of annual revenues for the past two years and you plan to take it back a little bit, about INR100 crores. So what are the low-hanging fruits, which the company would like to take advantage initially. That would be my first question.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Pranjal, can you repeat the question?

Pranjal Garg — ICICI Securities — Analyst

As you highlighted, Sri Krishna Milks did INR60 crores of annual revenue for the past two years. But before COVID it was doing somewhere around in the range of INR100 crores and you plan to take it back to that scale. So I wanted to ask, what are the low-hanging fruits which the company would like to take advantage initially to [Speech Overlap] the scale back.

Anjaneyulu Ganji — Chief Financial Officer

Yeah. So the low-hanging fruits are majorly the direct procurement, which we are strong at. So as of now, we are 100% direct procurement. So we will implement our procurement model over there. And also, we will utilize the current synergies, which are available to our sales force and the procurement network. Those are the immediate low-hanging fruit that are there and also utilization or the — our efficient team from Koppal will go there and handle the plants from there. So those are some increase in efficiencies, which will give us some certain cost savings in the long-term. So those are the low-hanging fruit that we are concentrating on as of now. And going forward through price corrections and our brand visibility, we’ll bring that profitability to our profitability levels.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. Just to add on to that, that the biggest problem was, they were not having their own procurement. So because in Karnataka we have a strong hold in procurement very closer to this plant also, Sri Krishna also. So the major advantage we have our own procurement rather than depending on third-party. So that will help us. And as Mr. Anjan said, because being an adjoining area, so our brand visibility already is there closer by areas. So we will naturally will have an added advantage to capture the market with better utilization.

Pranjal Garg — ICICI Securities — Analyst

Okay, that’s helpful sir. Sir, my next question is regarding the competition intensity in the dairy business environment right now in relation to the price hikes. You highlighted that you have taken some price hikes in Q4. First of all, can you please quantify if I have missed them and secondly, how is the industry — industry has moved to take the price. Is it like easy like old players want to take price hikes or how is it working right now.

Anjaneyulu Ganji — Chief Financial Officer

Yeah. Last year if you see first quarter, second quarter, third quarter, fourth quarter, so first quarter is only INR31 procurement price. Second quarter it became INR30.70 and third quarter become INR32.40 and fourth quarter, it became INR34 rupees. So now sales realization what we have done, see sales realization first quarter it was INR48.50, second quarter it became INR49.40. Even third quarter also, INR49.40 and fourth quarter it became INR50.70. So overall, we have taken almost from last year FY21 April to FY22 31st March, we have taken INR1.30 in the sales side and slightly procurement side is now INR1.60 is up. So there is a variation of only INR0.20, INR0.30 in the procurement side. Procurement still higher side by INR0.30 comparatively on a year-on-basis you will see sales versus procurement.

Have I answered your question, sir?

Pranjal Garg — ICICI Securities — Analyst

Yeah. Sir, and where are the milk procurement prices headed in future in your belief.

Anjaneyulu Ganji — Chief Financial Officer

So already procurement prices started falling now. Only in the month of April it is very high and on May 11 onwards we started correcting and weather also now see helping here and there, sporadic rains. So we have already started correcting procurement prices and in the first quarter maybe slightly if you see first quarter, slightly it will have very tight, but it will be corrected in the second quarter very well.

Pranjal Garg — ICICI Securities — Analyst

Okay. Thanks sir. Sir, my next question is regarding power distribution strength. You are continuously adding milk distributors and retail partners every quarter. So how should we see it. Is it more of addition of geographical footprint or more of increased penetration?

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Both we see sir. See, suppose now we acquired Sri Krishna in the new geographic area and also now in exiting areas also we keep on strengthening. For example, if you see DRP is now, we used to have DRPs of only year beginning, we used to have only 393. Now we have almost 563. So like that even the agents also and distributors also we have keep on increasing. Suppose in the year beginning and all we used to have only 1,500 distributors. Right now we have 1,800 distributors. So mostly, this has come from the existing area only. So both we are doing. In the existing area also. And now since now we acquired Sri Krishna Dairy, the new geographic area also we’ll get more new distributors and new agents also.

Pranjal Garg — ICICI Securities — Analyst

Okay sir. Sir, can you also comment on the HoReCa channel performance as majorly all lockdowns have entered in India and economies opening up.

Anjaneyulu Ganji — Chief Financial Officer

HoReCa not much actually. So HoReCa we have hardly 2% of our sales or less than that comes from HoReCa sales. As of now our focus is the direct consumer. So as Mr. BVK mentioned, focus is direct retail partner. So last year we had 393 retail partners. Now we have increased that to 563 by end of this year and also on the distributor network directly 1,484 to 1,800 by the end of this year. So major focus is on the retail dairy to consumer down on HoReCa. So 99% of our sales comes from the retail segment and only 1% contributes from HoReCa here and there.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. I am adding to this. We have taken a separate person for this modern trades year back now is putting all efforts, especially in Hyderabad, Bangalore, Chennai, and now we are contemplating to see are there our product in the modern trade. So that also we are concentrating, but it is not more sizable number so far. It is not a very lucrative number, but we have a separate vertical hit now. We have taken only for modern trade. So now we are focusing on the modern trade also, HoReCa and modern trade.

Pranjal Garg — ICICI Securities — Analyst

Okay. So now that we have a separate head for the HoReCa —

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. We have taken separate, it is less than 2% what we are now doing. Maybe it will take one more year, because last year, because of COVID and all, last year also first quarter got peaked. And last year beginning only we have taken a separate person for this HoReCa and modern trade. So maybe this financial year, we will see some numbers.

Pranjal Garg — ICICI Securities — Analyst

Okay, that’s very helpful sir. And sir, my last question is regarding the performance of Africa business and what is your outlook for that business.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Can you repeat. Which business you are talking?

Operator

Sorry Pranjal, can you repeat that. Which business. We didn’t got you.

Pranjal Garg — ICICI Securities — Analyst

Sir, Africa business.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. Africa, we are doing very well. And so comparatively, last year to this year volumes have gone up by almost 33%. So FY20-’21 we have done only 56,000 liters whereas in FY21-’22, we have done 74,000 liters. So revenue also 106 close to now FY22 now we ended with INR146 crores top line, and gross margin —

Anjaneyulu Ganji — Chief Financial Officer

I will take that.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. So on financials, gross margin and EBITDA, Anjan, please clarify.

Anjaneyulu Ganji — Chief Financial Officer

So this is Anjan. So as of for the financial year ended, so we have achieved the volume on an year average 74,000 liters per day compared 56,000 liters per day previous year with 33%. But as of Q4, so as the COVID impact was not there, so we have achieved a volume of 95,000 liters per day, which is month-on-month increase in gradually in Africa and the revenue from operations for the financial year 2022 is around INR147 crores, which is 37% increase over last year and 15% growth quarter-on-quarter. The EBITDA percentage for the full year from Africa business is coming to around 13% in quarter four. And for the full year, we have ended up at 13.1% EBITDA margins for the Africa region. And we started receiving the money back. So we have declared dividend and we received the money back in India before 31st March.

Pranjal Garg — ICICI Securities — Analyst

Okay. Thank you so much sir. So that’s very helpful. That’s all from me.

Anjaneyulu Ganji — Chief Financial Officer

Okay.

Operator

Thank you. [Operator Instructions] [Technical Issues] We have the next question from the line of Aniruddha Joshi. Please go ahead.

Aniruddha Joshi — ICICI Securities — Analyst

Yeah. Thanks. Sir, just two questions from my side. Now the company also has got good cash on the balance sheet. So what would be the strategy with that. We have done one acquisition, Sri Krishna, but can we see more acquisitions in the pipeline. And if the company is going to have an acquisition strategy over next one to two years, what will be the type of companies that you are looking at and whether you are looking at acquiring brands or manufacturing or milk procurement and in which regions whether it will be AP, Telangana or it will be closer to Maharashtra or Orissa.

And second question is on how does the company see itself moving from a relatively South plus Maharashtra and Orissa presence to a Pan-India presence over next three to five years. Yeah. That is it from my side.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. The first point is that this year, we have already started one new field plan. So new field plan, they will be spending around INR45 crores and that is 12,000 ton metric tons capacity because the existing field plan now we have 100% capacity utilization. So now already see that land has been identified and everything is settled and now already work started. So it will take another 10 to 11 months to commence a new field plan. Basically, that new field plan is going around the INR45 crores, number one. Number two, now see we are in the — we have identified a land in Kenya to put up a plant in Africa, because between Uganda and Kenya, because of the permits issue, see, we were not able to take a full advantage of the Ugandan plan. So that’s why now we have a plan to set-up a plant in Kenya. So just we have identified land, that is in the process. So still it is not materialized. Once it is materialized, then we will inform you about that.

And number two question what you have asked, that any acquisitions, any brands. So we are in the process. So we are looking — if you see the Maharashtra or Orissa, we see one or two in pipeline, we will be standing out. So it will take some more time to come to a conclusion.

Anjaneyulu Ganji — Chief Financial Officer

So this is Anjan here, the CFO. What BVK sir mentioned was we are continuously scouting for the acquisition opportunities, but our main motto as it has been reiterated continuously, we don’t go by brand valuation or PE multiple or revenue multiple. We always see what is the synergies that the companies bring to us. And based upon that we will see, okay, what will be my pay back, how much is the revenue or EBITDA contribution that [Technical Issues] to us. How many years I will get back my money. So that’s what we look at financial viability of the company rather than going and based upon the PE multiple or the revenue multiple. So in that way we — but the focus is every month we continuously we are in touch with whenever the acquisition opportunities comes we are focusing on it and deliberately looking into the same.

Aniruddha Joshi — ICICI Securities — Analyst

Okay, that’s helpful. And in terms of becoming a Pan-India operations, is the company first of all have that aspiration and do you see how it is progressing towards that in next three to five years or what is the strategy on that.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. Now, we are looking beyond south India now. Here you can say it is Pan-India. So now we have a plant, there are one or two pipelines, see, now we are scouting. Definitely it will begin a Pan-India in coming two, three years.

Anjaneyulu Ganji — Chief Financial Officer

In procurement network, we have already entered Maharashtra and we are continuously continuing now with Sri Krishna Milks who have entered Goa. So that’s how we focus on continuous opportunities and continuous opportunities, but if the opportunity comes, we are now open to see the opportunities outside of India and we are [Speech Overlap] so definitely in the five years —

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Yeah. Definitely we will see that we will become Pan-India.

Aniruddha Joshi — ICICI Securities — Analyst

Okay. Sure sir. That is very helpful. Thank you.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Thank you, sir.

Operator

Thank you. [Operator Instructions] As we have no further questions, I would now like to hand it over to the management for closing comments.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Thank you, Mike. Thank you, everyone. So this year with everybody’s support, all the employees and everyone, we have done really well and we are continuously working on as we have reiterated good opportunities and continuously grow. And thank you for all your support and advises. Sunil sir, you want to give vote of thanks. Sunil sir, you are there?

Anjaneyulu Ganji — Chief Financial Officer

I think he is not there.

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Okay. Thank you. Thank you everyone. So please write to us in case of any queries. So we would be glad to answer that.

Operator

[Operator Closing Remarks]

Venkat Krishna Reddy Busireddy — Chief Executive Officer

Thank you.