Hindustan Foods Ltd (HNDFDS) Q3 FY23 Earnings Concall Transcript

Hindustan Foods Ltd (NSE:HNDFDS) Q3 FY23 Earnings Concall dated Feb. 10, 2023.

Corporate Participants:

Sameer R. Kothari — Managing Director

Mayank Samdani — Group Chief Financial Officer

Bankim Purohit — Company Secretary

Analysts:

Aakash Javeri — Perpetual Investment Advisors — Analyst

Analyst — — Analyst

Akhil Parekh — Centrum Broking — Analyst

Harit Kapoor — Investec — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to Hindustan Foods Limited Q3 and Nine-Months FY23 Earnings Conference Call. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. This statements are not the guarantees of future performance and involve risks and uncertainities that are difficult to predict.

[Operator Instructions]

And I’ll hand the conference over to Mr. Sameer Kothari, Managing Director, Hindustan Foods Limited. Thank you and over to you sir.

Sameer R. Kothari — Managing Director

Thank you, Rutuja. Good morning and welcome everybody for our Q3 and nine-month FY ’23 earnings conference call. I’m joined on the call by Mr. Mayank Samdani, who’s our group CFO; Bankim Purohit, who is our Company Secretary and he’s attending the investor call for the first time, welcome Bankim; and SGA, our Investor Relations Advisor; Ganesh Argekar, our Executive Director and Vimal Solanki, our Head of Corporate Communications couldn’t join today’s calls, as both decided to take a holiday just today and leave us to do their work.

I hope everyone has had a chance to go through their updated earnings presentation uploaded on the exchange and our company website. Coming to the quarter’s performance, I’m pleased with the overall performance of the company in the last nine months. And most specifically, I’m pleased with the ramp up of the ice cream facility and the beverage facility in the last quarter of this year should really help us close this year with record turnover.

This in spite of the tepid FMCG demand in the last few quarters is a testament to the resilience of our business model and gives us confidence that as and when volume growth returns to the FMCG industry, we should be able to leverage this and grow at a faster clip. While most of our factors are — most of our factories reported stable operations, we are looking forward to the ice cream and beverages factory ramping up in the coming season.

After the expansion of the ice cream product in Lucknow, which is slated to start commercial production in March 23, we will now be amongst the largest manufacturers of ice cream in the country and are excited in exploring other possibilities in the manufacturing of ice cream. On the back of all of this, I’m confident that our earlier goal of INR4000 crores turnover by FY ’25 Looks easily achievable and we will come back to you in terms of the further guidance.

The reason we are not able to give you a definitive guidance now is because in the last quarter, we made our largest acquisition ever and we are still working on the various regulatory requirements to close this transaction. Since it was the largest transaction ever for us, I would like to spend a couple of minutes explaining the rationale of this acquisition.

We recently executed a BTA, a business transfer agreement for the acquisition of a pharmaceutical, non-pharmaceutical and wellness product factory from Reckitt Benckiser further expanding our Healthcare and Wellness division. This manufacturing facility is in Baddi, Himachal Pradesh and it manufacturers a vast variety of pharma and non-pharma products like OTC medicines, ointments and creams, strips, liquids, syrup, tablet, liquid hand wash, plasters. At the state-of-the art facility with modern machineries and also have certifications of USFDA and MHRA.

We are reporting to acquire this undertaking at cash consideration of INR156 crores, which will be subject to certain closing adjustments in accordance with the conditions set in the BTA. We are acquiring this manufacturing facility on a going concern basis and we expect to enter into a long-term supply agreement for this site with our customer.

As per our terminology, this would make this site and anchor tenant’s side where the long-term production commitment from our customer will help secure a certain minimum capacity utilization for this site, while will be open and allow to leverage the free capacity for other customers. Presence of the global certifications that I mentioned earlier, allows the facility to manufacture multiple products for international use.

While we are very optimistic about this acquisition, we are also aware of the complexity and the nuances involved in integrating such a large operation and are working hard to ensure that this is a smooth intimation. In the meantime, I will hand over the call to Mayank Samdani, our Group CFO to take you through the financial results for the quarter-ending 31st December 2022.

Mayank Samdani — Group Chief Financial Officer

Hello, good morning, everybody. It has been a stable quarter as far as the financial performance is concerned. For Q3 FY ’23 revenues stood at INR679 crores, a growth over 29% over last year, while the EBITDA for the quarter has seen a growth of 50% year-on year and it stood at INR45 crores as against INR30 crores last year.

The PAT has also correspondingly grown by more than 45% to INR17 crores, as against INR11.7 crores. As far as the nine-month performance is concerned, our total revenues increased by 32.9% on Y-on-Y basis to INR1,941 crores, while PAT has grown 56% to INR51 crores. EPS for the nine months stood at INR4.51 versus INR2.90 last year.

Our quarter-on-quarter growth was muted as all the existing factories have been performing at the [Indecipherable] capacities while the ice-cream and the various facility has lean season. We expect these two facilities to start delivering from this quarter and are beginning to see some traction in these numbers.

As on Decembere 31 2022, our network is stands at INR55 crores, gross block as on 31st December is stood at INR754 crores on account of consolidation. In terms of capex, we closed the acquisition of [Indecipherable] paid the entire amount to the sellers and also a major part of expansion capex has been paid.

We also paid some advanced for the Baddi acquisition and also in the process of acquiring some land in Hyderabad close to our factory. We reinstate our near-term and long-term targets for revenue and profitability as we continue to focus our accelerating growth through exploring organic and inorganic opportunities. With this, we have also remain focused on strengthening our balance sheet and cash-flow to effective capital management, which would facilitate us for the Group.

With this I would like to open the floor for the questions.

Questions and Answers:

Operator

Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Aakash Javeri from Perpetual Investment Advisors. Please go-ahead.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Hi, Sameer. Thank you for the opportunity and congratulations on the quarter. My first question would be that, what would be the gross block of post capex and the current gross block given in the investor presentation. Does it include all the acquisitions?

Sameer R. Kothari — Managing Director

Hi, good morning, Aakash. Thank you for coming in. I’m going to ask Mayank to answer this question.

Mayank Samdani — Group Chief Financial Officer

The gross block given in the investor presentation is INR754 crores [Indecipherable] as on 31st December ’22, with all CWIP. The new acquisition, which we have talked — Sameer has talked about the Baddi, which is not included in here. We will include one that we closed the deal and we take over the facility.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Okay, got it. And the Reckitt Benckiser plant at Baddi, what is the current capacity utilization of the plant?

Sameer R. Kothari — Managing Director

With current capacity utilization, our cash will be close to around 60 odd percent.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Okay, and what kind of ROC and margin can we expect from the rest of the capacity?

Sameer R. Kothari — Managing Director

From the rest of the capacity, we basically evaluate the project on a similar basis like anchor tenant. So given that the guidance in terms of margins, as well as ROE is pretty much similar to our existing business, Aakash. I mean, it’s too early for us to get into the exact specifics because as you are aware, we balanced 40% as something that we will have to go out and get customer spot. Given that it is pharma and given that it is USFDA and MHRA approved site, we expect to have better margins, but frankly, I would be very very reluctant to give any guidance right now, because we have no idea of how quickly we’ll be able to sign the new customers and what kind of products will be able to get with them.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure. And how much land is available around the plant? So if you want to expand in the future and have you already taken control of the business yet?

Sameer R. Kothari — Managing Director

So the first question is in terms of the further expansion, I frankly, personally don’t see us building any new capacities in Baddi. As you are aware, Baddi is — was a tax free, excise free zone. I don’t see us expanding capacity there. We will utilize our existing capacity and the free capacity that we have. Though we do have excess of land there. I’m not sure that’s the play that we’re looking at. In terms of taking control, no, absolutely, we have not taken control and that’s the reason why we are reluctant to give any kind of guidance in terms of our turnovers, etc. As you are aware, in Himachal, there is a legal process where acquisition of industrial land state government permissions. We are in the process of getting those. Our past experience of running factories in Himachal is that it could take anywhere between six to eight months and that’s what we are looking at.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure. And from this business, would we expect to get — sorry from this factory do we expect to get business from regulated markets as well?

Sameer R. Kothari — Managing Director

That’s the idea, absolutely. I mean, considering that it’s an MHRA and USFDA approved site, it also already is supplying to regulated markets. So some of the product categories, which Reckitt Benckiser is manufacturing in this site are exported to the US, as well as to Europe.That business will obviously continue and we are hoping to be able to attract some additional business as well.

But all of these are OTC pharma products. So they are not. So this is similar to the Dr. Scholl range [Phonetic] that we are manufacturing in [Indecipherable] So these are products which are sold over the counter they are not ethical or prescription pharmaceuticals.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure. And how we scaling the Scholl plant?

Analyst — — Analyst

How are we scaling? We had no complaints as of now, things are working out fine, we have integrated the site, operations have continued. In fact, we’ve been able to successfully do the integration without disrupting any production for our customer. As you are aware, the customer themselves are in the process of transitioning from Reckitt to Scholl wellness company. They have also now recently started our partnership, a JV with an Indian company and they intend to launch those products in India as well. So long and short of that answer is we’re quite enthusiastic about how things are rolling out at IDK.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure, and if you could just on — tell us what the current debt situation?

Sameer R. Kothari — Managing Director

Mayank?

Mayank Samdani — Group Chief Financial Officer

Our current debt is around — our debt situation is comfortable Aakash. We are at 1.15 — between 1.15% to 1.2 debt-equity ratio. So right now, it is very comfortable. We have INR400 crores of debt in books right now. So right now, it is very comfortable and we are dealing with as this year in all those banks which is very good record.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Got it. And are we looking at any big opportunities like Coca-Cola recently said that they are looking to divest their botteling operations. So are we looking at those kind of opportunities?

Sameer R. Kothari — Managing Director

So Akash, without getting into the specifics of anything, of course, we are looking for opportunities. I mean if you — and I know if you have followed the company, that’s what we do for a living. We basically look out for manufacturing assets and we are extremely keen in looking at contract manufacturing capabilities across FMCG products. So we will continue to do that accurately.

Aakash Javeri — Perpetual Investment Advisors — Analyst

So and although with — you had mentioned in 2021 about opportunities in Pet Food. So any progress on this year?

Sameer R. Kothari — Managing Director

So on the pet food, we actually worked on a private-label brand. It’s very-very small, it’s a B2C company. We expect to start production for it, but frankly, it’s going to be a rounding off error in terms of the overall financial numbers. The category by itself did grow rapidly during COVID or post-COVID it’s other numbers and that’s true, like most of the FMCG market, the numbers have kind of cooled down since then while we were extremely bullish about the pet food category in, let’s say, a year-ago and the enthusiasm for that has definitely reduced. In the market and correspondingly the enthusiasm for that manufacturing capacity has reduced from our customers as well.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Got it and just one last question if I can squeeze in. Now that FMCG volumes while it seemed to have bottomed-out and with the trend around inflation coming down and everyone see rural is turning the corner, do we see a strong new pipeline and are we looking at any major greenfield capex.

Sameer R. Kothari — Managing Director

So we continue to look at it, your assessment about the FMCG market and the imminent turnaround of the FMCG market is what we all are banking on. Right now, I’m not sure we are actually seeing action on the ground to back that statement or to back that turnaround, but all of us are hoping that things will start improving in the next couple of months. If you’ve seen the commentary of most of our customers as well, rural frankly continues to be stressed. Most of our customers have voids in their investor calls, etc., seeing that rural demand continues to be stressed. And we are hoping that things will change sooner rather than later.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure, thank you so much, Sameer. Thank you so much for taking all the questions. Really appreciate it. All the best for the next quarter and rest of the year.

Sameer R. Kothari — Managing Director

Thank you, Aakash.

Operator

Thank you. [Operator Instructions] The next question is from the line of Akhil Parekh from Centrum Broking. Please go-ahead.

Akhil Parekh — Centrum Broking — Analyst

Hi, thanks for the opportunity. Many congratulations to the entire team for delivering good set of numbers. Sameer, the first question is to you in past, you had highlighted that going ahead as we scale-up we will try to specialize more-and-more than you had highlighted to examples of some cosmetic players in Italy and the kind of what we have been doing and probably Hindustan Foods also will kind of shape around in a similar line.

But now given this acquisition — recent acquisition of the Baddi facility, we are also going to start manufacturing pharma products. So if you can throw some light of — how do you see companies shaping up in next three to five years. Will we continue to manufacture anything and everything? Or will we take the specialization around doing it? That’s my first question.

Sameer R. Kothari — Managing Director

Akhil, hi, good morning. What I had mentioned and what I would like to reiterate is that — I think for the next couple of years, at least two to three years, we will continue to see this kind of disproportionate growth for us across product categories. And right now, given the growth and given the opportunities that we are getting, I really don’t see us being choosy about it. I did mention that maybe in the medium-term which is between three to five years, there will be a requirement, where contract manufacturers will have to start specializing in particular categories or in terms of profitable products. However, I don’t see that happening in the next few years. So to give you a short answer, in the next couple of years, we will continue to pursue opportunities, agnostic of any product categories, agnostic of location. So I did mentioned in my opening remarks, we are very aggressively trying to look at ice creams. We think that there is a huge opportunity for manufacturing ice creams in the country. This OTC pharma, we actually spoke about it I think more than a year-ago, we realize that OTC pharma products, especially cosmetics with the therapeutics lean is becoming a large category and that’s why we wanted to get into it. We managed to get couple of acquisitions lined-up, which we believe will serve us in good speed in the next couple of years. In addition to that we have spoken about beverages. While unfortunately the beverage experiment for us hasn’t worked out in the last couple of years. We are very confident that in the next couple of years, the beverage experiment will work out for us. So we will continue to look at various product categories. At some point of time, opportunities will start dwindling down and at that time, we will definitely look at specialization or even look at splitting the company into three-product categories or whatever is required.

Akhil Parekh — Centrum Broking — Analyst

Sure, sure, that is helpful. Sir, does that imply that the CRO might be at least three, five years far from now at this point in the time. — The custom research you had talked about, right in past.

Sameer R. Kothari — Managing Director

I mean, all I can say Akhil is that — like I was talking to Aakash earlier, we are hoping that the FMCG growth in terms of volumes will bounce-back sooner rather than later. And given the overall trend and shift towards contract manufacturing combined with a decent volume growth would allow us to be able to grow at similar rates for some more time yet.

Akhil Parekh — Centrum Broking — Analyst

Okay, fair enough. And second on the Baddi acquisition. Did I hear correctly, you said the margin profile in ROE, ROCEs are in-line to what we’re doing right now?

Sameer R. Kothari — Managing Director

So in case of the margin profile, given that their pharma products, especially for the excess capacity. So beyond the anchor tenants, we expect that the margins will be better, but that as you would appreciate, it’s true for any of our businesses, right. When you get into shared manufacturing or anchor tenant model the margins etc., tend to be better. This one is slightly more sweetened, because the complexity of the product, both in terms of regulations, as well as manufacturing processes, as well as GMP, hygiene, etc., the factory slightly more sophisticated than some of the other products that we make.

Akhil Parekh — Centrum Broking — Analyst

Okay, and hwo do you plan to increase the bandwidth for this product, because I’m assuming this is something new which will be doing. Although we are trying to increase the bandwidth in employee perspective.

Sameer R. Kothari — Managing Director

So from the top management perspective, as you’ll be aware, Sanjay and his team joined us nearly a year-ago. So in fact, we built-up the team maybe a little in advance, but we’ve been working on this for nearly a year and a half now. Sanjay, joined us, I forget the exact date, but I think it’s nearly a year-and-half and since then, he has built-up this team. But more importantly, both in case of IGK as well the agreement with the seller is that the existing team employees as well as the senior management team at the site does join us, and that’s one of the reasons why the integration of IGK has been so smooth for us. Because the same people who were there earlier, who are continuing to manage the operations.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Okay. This is helpful. And just last two questions. One, if you can highlight the asset turns on this unit — on the Baddi unit and whether the sales from this unit is part of our INR4000 crore target? Or does it exclude that?

Sameer R. Kothari — Managing Director

Akhil, can you repeat the question? Mr. Mayank Samdani was distracted.

Akhil Parekh — Centrum Broking — Analyst

No worries, I’m asking the asset turns on this new unit, the Baddi unit. And second is, whether this is a part of the — sales from this unit is part of our INR4,000 crores sales target that we have given?

Sameer R. Kothari — Managing Director

So. I feel that the asset terns will be same as we are doing, which is three to four. We tend to believe that. And as Sameer has mentioned in his opening speech that we are very confident of our INR4,000 crore target and also upwards head to it, because of this acquisition. So we will come back on the right momentum to guide further on this, because if this this acquisition will take another six to eight months-to complete. Because of the various regulatory processes involved in it.

Akhil Parekh — Centrum Broking — Analyst

Okay. Mayank, if you can highlight on the effective tax-rate in FY ’24, if you can?

Sameer R. Kothari — Managing Director

Before we move on to the tax-rate, I just want to shed some more light on Mayank’s question. I think Mayank and we as management are little reluctant to give out the guidance in view of the fact that we do believe that there is some stress in terms of the FMCG volume growth. I think all of our customers have gone on record saying that. It definitely will affect the plans for new capacity expansion, etc., while we and because of our business model, we’ve been relatively shielded from it. We’ve continued to grow, but we don’t want to be in a situation where we end-up over-committing to the market and then find out that just because of macroeconomic conditions or because of certain things which are completely out of our control, we end-up falling on our face. So if you if you if you recollect in a lot couple of investor calls, we have given that light part of where we were last year, which was around INR2000 crores we had projected that on the back of the ice cream facility we should end-up this year with around INR2,600 odd crores. I think we are very close to that number. We should stick to that guidance. I think for nine months, we have done of around INR1,950 crores. And we should be able to exceed this quarter performance in the next quarter. That’s what I said in my opening remarks as well. But which should get us to around INR2,600 crores, INR2,700 crores of turnover. The soap bar project in Hyderabad will start operations from the next quarter and which would effectively give us starting from Q1 or maybe late Q1 of next financial year, we should be at an annual run-rate of INR3000 crore plus. So we’ve given that guidance earlier and then we said that we have a bunch of things in the pipeline, which of course now includes Baddi, which was not there that time. So while we are reasonably confident that we should be able to meet the goals that we have mentioned we are a little reluctant to give you a tangible financial number for it.

Akhil Parekh — Centrum Broking — Analyst

Sure, sure, this is helpful. And lastly if you can please answer on the effective tax rate [Indecipherable]

Mayank Samdani — Group Chief Financial Officer

Yeah. So Akhil as you are aware that our current effective tax rate, we are at the maximum effective tax-rate currently in standalone, but our tax-rate is little lesser in the console, because of the ice-cream plant is in is in the new scheme and also the AeroCare is at max level. This year, we will utilize our all the max rate in the stand alone, and next year we will jump to the new effective tax– the lower tax-rate of 22% plus. So that was the effective tax-rate will come down from 32%, 33%, in console level to 28%, 29%.

Akhil Parekh — Centrum Broking — Analyst

Got it. This is very helpful and. I wish you all the best for coming quarters.

Sameer R. Kothari — Managing Director

Thank you, Akhil.

Operator

Thank you. [Operator Instructions] The next question is from the line of Harit from Investec. Please go-ahead.

Harit Kapoor — Investec — Analyst

Yeah, hi, good morning. So just had two questions. One was on the Baddi unit, you mentioned in the presentation, the opportunity to taking the clients are buying major products. If you could just give us some sense, obviously, naming what could be potential bad partnerships, but it could been a sense of what is the opportunity that sits there in the spare capacity that you can work on, yeah, that’s my first question.

Sameer R. Kothari — Managing Director

So the unit in terms of the product capabilities it manufacturers are large volume of topical ointments, etc. As you are aware, in our presentation we mentioned that it manufacturers products like Crack cream, Moov cream, etc., and we continue to leverage that capacity for other people. So we have some spare capacity in the ointment section. We also manufacture lozenges. We have some spare capacity in the lozenges. In fact, actually we don’t have spare capacity in the lozenges, the lozenges capacity is completely spoken for by our existing customer. We have some spare capacity in tablet as I mentioned, in ointment, and in liquid.

Harit Kapoor — Investec — Analyst

Got it. And on the second piece was on the ice-cream part Sameer. So if you look at —

Sameer R. Kothari — Managing Director

Sorry, Hrait. Just one second, Mayank is nudging me. I had mentioned this earlier that in terms of total capacity utilization in Baddi is around 60%. So we have a headroom of nearly 20%, 25% in terms of excess capacity.

Akhil Parekh — Centrum Broking — Analyst

I can’t break it up in terms of product categories, but on a weighted-average basis that’s the kind of idle capacity that we have in Baddi.

Harit Kapoor — Investec — Analyst

Got it. The second thing on the ice-cream unit. So you mean, you mentioned that the INR75 crore expansion will be commercialized by March 23. So I just wanted to give a better sense of — would you — would this entire INR200 crore be ready for the season. Completely or if you think it would be — the full utilization would be more next season. I just wanted to get that [Indecipherable]So, Harit, the first phase of ice-cream, actually got commercialized last year in April. Unfortunately, by the time the capacities ramped-up, we were at the fag end-of-the season, and we didn’t end-up utilizing the entire capacity. So the first phase is already up and about, we started production from something like the first week of February for the season. The second phase, which is the expansion of the INR75 crores that you’re talking about. We are expecting that we will start commercial production by March, it will take about a month or so to ramp-up. So technically, we’ll get a decent amount of output from the second phase is well, starting from let’s say, April and May and then depending on how the summer stands out, whether the season gets extended till June or not, we’ll find out how much of a contribution that new line is able to make. But the first phase will run at full blast, starting from February to whenever the season end. And last thing from my end was again we did mentioned I think INR2,200 crores plus the goal you close-out. But I think it will be fair to assume, right, that Q4 will definitely should ideally be better than Q3 in terms of that given that both Ice Cream and beverages, when they see a a significant ramp-up especially in towards fag end of Feb and March. So that would be the right understanding there.

Sameer R. Kothari — Managing Director

Sorry, I couldn’t make out what you were saying. Can you just repeat that?

Harit Kapoor — Investec — Analyst

Yeah, I said that you had mentioned that you will Q4 will be similar to slightly better than than Q3. In terms of revenues, but it would be fair to understand that the lift off on beverages and on ice-cream both probably towards end of Feb and entire March could — will be incremental to your Q3 performance. So we should see a materially better in kind of performance in Q4 as well.

Sameer R. Kothari — Managing Director

Yeah, you’re absolutely right, Harit. I mean, obviously, the only reason I mentioned that Q4 will be similar to Q3, is to ensure that the expectations are not beyond a particular level, but I’ve also mentioned that and which you have absolutely captured properly, which is beverages and ice-cream will ramp-up only in this quarter.

So we definitely hope that Q4 will be much better than Q3 again reluctant to give any specific numbers because of the overall. Let’s say, overall mix in volume base. But our expectation is that Q4 should be definitely much better. In fact, we’ve mentioned either in my press release are opening remarks I forget which that on the back of Q4, we expect it to be a record quarter for us.

Harit Kapoor — Investec — Analyst

Fantastic. Wish you all the best. Thank you.

Sameer R. Kothari — Managing Director

Thank you, Harit.

Operator

Thank you. [Operator Instructions] The next question is from the line of Akash Javeri from Perpetual Investment Advisors. Please go-ahead.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Hi, thank you. Thank you for the opportunity again. Just one question is in your disclosure, it’s mentioned that we have one subsidiary where the revenue is about INR24 crores. And on that we have a net loss of about INR12 lakhs. Could you just talk about which subsidiary is this?

Sameer R. Kothari — Managing Director

Okay, first let me tell you that interrupt you thanking me for the opportunity for giving you talk. I should be thanking you because you’re the only one who is asking a question now. In terms of this specific question, I’m going to have to ask you to repeat exactly what and where are you get this information from. We have three subsidiaries that you are aware. One is our subsidiary which we acquired, which is called RB Scholl, which Mayank is in the process of changing the name to HFF Healthcare. The second is our partnership firm that we acquired with is called AeroCare and that’s an LLP. And the Third is SFL Consumer, which is a new division that we set-up a new company that we set-up in order to leverage the new tax regime. And that’s the company which is manufacturing ice creams in Lucknow. If you are referring to SFL consumer that’s possible that that the one, which probably could have posted law maybe in last quarter — in the last financial year. But I really dont’t know what exactly and where exactly you got this number from.

Aakash Javeri — Perpetual Investment Advisors — Analyst

I’m actually getting this from point number eight of the consol from the audit.

Sameer R. Kothari — Managing Director

Okay, so just hang on. Mayank is reading it now. Aakash give us a few minutes.

Mayank Samdani — Group Chief Financial Officer

We’ll come back on this. [Indecipherable] and all those. We will come back.

Sameer R. Kothari — Managing Director

But technically the only subsidiary, which should or could have made a loss last year would have been that one. In case of RB Scholl, as well as AeroCare, we are doing pretty okay.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure, and how much of the capex for Hyderabad is already spent.

Sameer R. Kothari — Managing Director

For the soap and bar project?

Aakash Javeri — Perpetual Investment Advisors — Analyst

Yes.

Sameer R. Kothari — Managing Director

The CWIP is around INR40 crores is what Mayank confirms.

Aakash Javeri — Perpetual Investment Advisors — Analyst

Sure. Thank you so much. Thank you.

Sameer R. Kothari — Managing Director

Pleasure.

Operator

Thank you. [Operator Instructions] As there are no further questions from the participants, I now hand the conference over to Mr. Bankim Purohit for closing comments.

Bankim Purohit — Company Secretary

Hi, good morning to all. I take this opportunity to thank Sameer for introducing me and given the opportunity to be part of this call. We are pleased to has SFL has yet again delivered robust numbers as we cruise towards the target of INR4,000 crores revenue the originally planned. Our foray into wellness and healthcare will get further fortified with the forthcoming Baddi acquisition. We continue to focus on seizing more such opportunities to become the most desired contract manufacturer in the FMCG and wellness space. I again take this opportunity to thank everyone for joining on the call. I hope we have been able to address all your queries. For any further information kindly get into touch with us or Strategic Growth advisors, our Investor Relations Advisors. Thanks, have a good day.

Operator

[Operator Closing Remarks]