India Glycols Ltd (NSE: INDIAGLYCO) Q3 2025 Earnings Call dated Feb. 06, 2025
Corporate Participants:
Rupark Sarswat — Chief Executive Officer
Anand Singhal — Chief Financial Officer
Raju Vaziraney — Advising President IMFL
Unidentified Speaker
Analysts:
Pawan Bhatia — Analyst
Balasubramanian A. — Analyst
Rohit Nagraj — Analyst
Saket Kapoor — Analyst
Rohan Patel — Analyst
Vanshika Gupta — Analyst
Ram Mohan J Rao — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the India Glycols Limited Q3 and Nine Months FY ’25 Conference Call hosted by Nuvama Wealth Research. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Bhatia from Nuvama Wealth Research. Thank you, and over to you, sir.
Pawan Bhatia — Analyst
Thank you. Good evening, everyone. Thank you for joining us on India Glycol Limited Q3 and Nine-Month FY ’25 Results results conference call. So I would like to thank the management for giving us this opportunity to host the call and congratulate them on a good set of numbers.
We are joined on this call with India Glycol Management represented by Mr Rupak Saraswat, Chief Executive Officer; Mr Anand Singhal, the Chief Financial Officer; Mr Rajesh Marwaha, Head Sales and Marketing BSPC; Mr SK, Head of Liquor Business; and Mr Ankur Jain, Head, Legal and Company Secretary.
I would like to invite Mr Rupak to initiate this proceeding with his opening remarks, post which we will have a Q&A session. Thank you, and over to you, sir.
Rupark Sarswat — Chief Executive Officer
Yeah. So a very good afternoon to everybody, and thank you for joining us for this call. We have several topics on the agenda to talk about today. And of course, we will talk about the business performance and the Nine-Month highlights as well as highlights for the quarter. But equally importantly, we will also talk about the initiation of the scheme which proposes to restructure IGL into three demerged identities.
So what I will do to start-off is to give you a little bit of highlights in terms of the business and we will come to the details later on. And a very high-level view of the restructuring in terms of getting the gist of it. Then I will request my colleague, Mr Anand Singal to take you through the details about the scheme, the demerger and how it’s going to be implemented and the mechanisms that we will adopt to achieve that and so on. And then we will have some more commentary on various businesses. And after that, we will be happy to take your questions.
So let me, as usual start with how our performance has been. I recognize that what we share with you our EBIT numbers. So in order to explain the business sometimes, especially because there is some declassification of businesses involved, I will be referring to EBITDA or margin numbers as well, just to make sure that I’m talking about and setting the right context. So as you know, from a business performance perspective, we’ve had a good set of numbers to report. So if you look at the nine-month performance, our net turnover at INR2905 crores is up 22.7%. Gross turnover is up 16.45%. Our EBITDA for the nine months at INR376 crores is up 19.9% and we continue to clock decent margins of about 12.95%.
Now various segments have driven this growth, particularly biofuels has driven top-line growth. Similarly, we’ve had excellent growth in portable spirits. And we’ve had some top-line growth in Nature biopharma as well. And chemical business has been slow, but I will explain that because the core business where we sell chemicals has actually done reasonably well and I will explain that later on. In short, we have seen excellent growth, as I said in biofuels and the capacities that we’ve added have served a top-line growth as well as bottom-line growth and we’ve contributed to the blending program, which is on-track.
So in the portable spirit space, as I said, excellent growth both in IMFL and country liquor. We will talk about it in somewhat more detail subsequently. We’ve had a slightly weak quarter for chemicals. But for the operating business, if you exclude the JV and some business judge readjusted, we’ve actually had excellent margin growth. There has been strong sales growth in Biopharma. However, as we’ve spoken earlier, both for the nicotine and side business, our margins have been under pressure.
And we have been talking to you about new specialties. Of course, these kind of businesses have a gestation period. And I’m happy to state that whilst you do not see so much in numbers and I will talk about the businesses going-forward, we are quite happy with the progress that we’ve made in terms of projects. We are working with reputed companies. Many of our projects and projects have been approved and we are on-track to you know, generate significant commercial sales not only in this year, but also for the years ahead.
In addition to that, I think the joint-venture performance has also been very good where for the quarter itself, sales are up 12%, but the EBITDA for the joint-venture is up 75%. Now this is similar EBITDA margins for the JV were up as well. One of the key reasons, of course, is lowering of the feedstock price differential for them. We generally they compare with Reliance is U and also there has been a focus on improving the product mix as well as greater focus on exports. So that’s a high-level commentary on the business. We will talk about segments going-forward.
But let me go back to the restructuring scheme that has been announced. As I said, Mr will tell you more about the details of the scheme, but let me give you a macro view of what the proposed business structure is, what is the rationale behind it and so on. So essentially what we are trying to do is to restructure these businesses into three separate companies for the time-being within the IGL Group. And the whole idea behind this is to run these companies differently. They have different focuses to provide them much more focused and also to allow potential investments in different businesses because different investors tend to have a different focus for the investment. So in that sense, there is a potential to unlock value going-forward. So that is at a high-level in terms of what the — what the business restructuring is about.
So what you will see is right now we report bio-based specialties and Performance Chemicals, which is a business of — if you look at the existing structure for FY ’24, which is a top-line of close to INR1,626 crores. And then for FY ’24, biofuels was close to INR512 crores. IMFL at a gross level was INR574 crores and the net number for MFL for FY 2024 would be lesser, but that’s the gross number.
Now the plan is to have a chemicals business which focuses on green chemicals and specialty products, which includes glycols, bioglycols, new specialties, industrial gases and so on. This on a like-for-like basis will be a slightly lower turnover because some of the products will go with what will be the Nature Biopharma business. The second will be the ideal spirits business, which will have spirits, of course, IMFL and Country liquor, but it will also have the alcohol business or the biofuel business going with it.
And the third one will be Nature Biopharma, which will be Nature as it is right now and also taking the biopolymers business, which is small-business from chemicals and putting it into Nature Biopharma. So we believe that this allow us to run these businesses in a much more focused manner, they have slightly different priorities, different markets, different drivers and therefore, grow these businesses independently to create more value.
I will pause now and I will request Mr Singal to brief you on the details of the scheme.
Anand Singhal — Chief Financial Officer
Thank you, sir. So now the Board in its meeting on 4 February has largely approved two proposals. One is the merger of Ashipur Holding, which is a holding company for India Glyacol and demerger of the business into two separate entities. One is the IGLE Sprits, the other one is NHL Biopharma. So presentation is already with everybody. So now everybody can see, but I will largely give you the brief on what is the proposal, although CEO has already given main things.
So now for the new companies, the India Glycols, which is the chemical business largely, for nine months, they — this company had a turnover of INR1079 crores with an EBITDA margin of 13.6%. The IGL sprit, which is proposed to be the other company, which will be having the legal business and the Bio fuel business is having nine months turnover of 1628. This is on-net basis with 14.4% EBITDA margin. The NHR Biopharma, which has the biopharma means the division plus the biopolymer, which is the business is having the turnover of INR178 crores for the nine months with having an EBITDA margin of 14.9%. So this is what the proposal for demerging these three companies.
The merger of Holdings, holding company, based India Glycol is largely a keeping in mind that the promoters will have the direct shareholding of ICL in their names. The benefits for the main benefits I will say for the proposed scheme will demerger will enable independent growth for each businesses. Separating the business will reduce the risk of one business affecting the others. Will create a potential to unlock value for the shareholders by drawing focused investors. And each business will have a clear focus, leading to improved management and resource allocation. So this is what we think that will be the main proposed benefits for the proposed scheme. And rest of the presentation is already with you.
And I will pause here and will say — we’ll take-up if any questions during our question-and-answer session.
Operator
Thank you very much, sir. And we will now begin the question-and-answer session.
Rupark Sarswat — Chief Executive Officer
Hold-on for a long. We’ve not released. So there are two things. Anandhi, would you like to brief on the financial results first and I will give a little bit of sector commentary so that we can take that.
Anand Singhal — Chief Financial Officer
Okay. So on the way — on the financial performance for the Q3 ’25, in the current — in the current quarter, from October to December ’24, we have a gross revenue of INR242 crore crores, INR2,424 crores with a net revenue of INR975 crores. If we compare this with the last quarter — last quarter same-period last year, we have a growth of, say, about 8%. The EBITDA in this nine months is INR129 crores vis-a-vis INR107 crores in the last year same quarter with showing an growth of 21%. While the PAT and PAT margin is INR57 crores, vis-a-vis INR42 crores showing about 37% growth.
If we see the nine months results, so in nine months, the gross revenue is INR6,850 crores vis-a-vis INR5,882 crores, showing a growth of 17%. The net revenue is INR2,905 crores vis-a-vis INR2,368 crores, showing a growth of 23%. The EBITDA is INR378 crores in the nine months vis-a-vis IN 319 crores in the last year nine months, showing an increase of 19% and PAT is INR167 crores vis-a-vis INR131 crores in the last year, showing an increase of 28%. So basically, if we will see, the company has shown a very good result in all-round growth and what I can say and good results, I would say.
Rupark Sarswat — Chief Executive Officer
Okay. Thank you. What we will do is we will very, very briefly touch upon segmental commentary and then we can go to question-and-answers. So yeah, I had mentioned to you about nine months results while I had skipped the quarterly results, which you have already seen though. So the net turnover at INR975 crores is up 7.9%, but there is an excellent EBITDA growth for the quarter at 20.68% and a much better EBITDA margin of 13.3%.
So if I look at the nine months performance or the performance for different sectors and I’m — so for the chemicals business, for example, for the nine months, we see a top-line degrowth of 8% and for the quarter, it is apparent 30% decline. However, I may like to add here that in some senses, it is — it needs the right interpretation because we’ve had some declassification of products as we are preparing for the restructuring of the business where some of the byproducts and per in the earlier quarters reported along with chemicals. So that makes you see a bit of a degrowth, which is not exactly representative for these numbers.
And I will give you the commentary so that there is clarity. There is nothing wrong here. It is just a matter of interpretation. Similarly, our biofuels business at INR770 crores for nine months is up 135% for nine months and it is 79% up for the quarter. Our portable spirits business at INR858 crores for nine months is up 25% and at INR325 crores, it is up 37%. And our in nature biopharma business at INR169 crores for nine months is up 14% and for the quarter, it is up 4%.
So if you look at an EBITDA margin level, I know what the numbers that you have are EBIT numbers, so I’m not going to repeat them because those you already have. The chemicals business has seen a moderate decline of about 5%. Now again, this is for some of the readjustments that we spoke about. Biofuels up 135%, portable spirits, excellent growth at 42%, NHL Biopharma, the margins have declined mainly even though the topline has increased because of the cost pressures that we have spoken about.
I spoke about the joint-venture, another number that I will talk about. What has also happened that in some ways, some of the toughest times that we faced our past, you know, the price differential between crude-based ethan oxide and bio-based lithin oxide, which at one point in time had increased to in excess of 40%, which means bio-based ethanoxide was more expensive is now down to a much more manageable 15%, which has reflected in much better results for the joint-venture and also much better margins and profitability in some of our chemical businesses, which were under pressure. So we continue to, as you know, import ethanol for a significant part of our chemicals business. It is because it is a much more lower-cost option for us than procuring or even manufacturing ethanol using grain or molasses in-house. There are certain chemicals which demand molesses-based ethanol. Those of course we supply on that basis.
Now a very-high level commentary in terms of our sectors. So I mentioned to you about the biofuels program. Whilst you will be tracking this industry, I think the interesting thing is that from 1920 where the government targeted a 5% blending, they achieved 5% blending. And in 2021, they targeted 10%, but achieved 8% blending. In ’21, ’22, the target 10%, achieved 10%, ’22 ’23, our targeted 12%, achieved 12.1% in ’23, ’24, achieved — targeted 15%, achieved 4.6%, 24% 25%, targeted 18%, achieved 18%. So I have read these numbers out for a specific reason. I remember having been with you in discussions earlier where you all asked questions about how is the blending program going, how much will get blended.
And I kept on saying that whilst there will be ups and downs based on various factors, at a macro-level, given the strategy for the blending program, which was based on increasing farm sector incomes, utilizing grain that we have, reducing forex outflow, etc., this strategy is correct and which is also reflected that the blending program is on-track and it was in that sense, a good decision for us to participate in that. So — and we expect that the 20% target for next year would also therefore be would be on-track.
So amongst very few government-driven programs that you see for the last few years, every single year, more or less except 2021 because of other reasons and then we caught up has been completely as per target. So that’s a good thing. And we expect that for the — for — we’ve done about INR11.7 crores YTD in terms of liters, in terms of volume, INR770 crores in terms of top-line. We expect ’24 25 would be more or less in-line and we would more or less be doing possibly, hopefully close to INR50 crore liters of sales for biofuels.
If we do track several parameters that you several times asked questions for us. I think the government from time-to-time has been giving price increases based on cost increases. There are important factors, which is grain price and DDJS price, which are important from a margin perspective, the price, of course is determined by the government. There is also some bit of positive news on this front that the government has released significant quantity of more FCI rice at a cheaper price into the market, which means that the grain price, which had gone up to INR27 INR28 is expected to be lower in the quarters to follow and hopefully, of course, it is dependent on a few other factors. It will — it will lead to improved margins for the business. So not only would be the FCI rice be cheaper, but I think as you introduce and put that in the market, the market factors drive other private players selling their rice also lower.
Yeah. We talked about the chemicals business. You know, if I take-out what we sell to the joint-venture, of course, there is a separate dynamics here. We have — that’s a part of an agreement and the benefit of what we do with the joint-venture also comes to us in terms of course, profit-sharing because we own 49% of the joint-venture. But if you look at the core business and if I take-out ethanol and some of the other categories, I would like to for a little bit of reassurance about this business that for the nine months, you know, for these businesses, which includes glycols,, glycols, new specialties, biopolymers, gases and your sales, our top-line is actually up 13% and our margin — gross margin is actually up 58%. So I wanted to make this point because your obvious question about the numbers of chemicals therefore addressed.
Yeah. So that is broadly the commentary from my side and I would request Rajuji to give a little bit of commentary on portable, particularly IMFL. I think it is important for us for two reasons. One is that one of the significant rationales for us is to provide the focus on the IMFL business. So we — which you know is a very interesting business going-forward. There’s a lot of interest in the market and I was just going through some of the numbers. So the business — the portable space business in India, which is expected to be about $56 billion in 2025 is expected to grow at 7.2%, going up to about $112 billion in 2034 there are of course, various factors driving this right from premiumization to even health and wellness, therefore people investing in better spirits to change in demographic, digital, etc. And we’ve also had a partnership with, which is a good milestone that I’m sure Mr Raju will like to talk about. And then we can take questions.
Raju Vaziraney — Advising President IMFL
Hello, I’m Raju speaking. I am liquor man throughout. I served as CEO and President of Radibu for 13 years. I was with for 11 years. So for whatever reason, they have stayed with liquor.
Now I joined this organization just over four years ago. Once I joined, we realized that we have got hidden potential of our ENA quality, ENAs, extra neutral alcohol as you know. And also we co-pack for Bacadi, which is the third-largest liquor company in the world. So perhaps that was the reason I was hired. And we felt that while we have made our mark in-country liquor, we are leaders both in our — both the home states of Uttar Pradesh as well as Utra Khan wherever state-of-art distilleries are located. But the potential or we say the growth potential is in IMFL, particularly premium.
Like our CEO rightly mentioned, a premiumization story sells all over the world because India has captive consumption. And I don’t have to go into demographic details, but the demographic dividend as we say, is in favor of liquor because to put it in simple words, Australia is added every year in India as far as consumers are concerned to more than 20 million consumers. So there is huge potential. And while the industry — IMFL industry is growing at 7% to 8%, it also goes up to 8% to 9%. The premium industry is growing at more than 20%.
So we — the top management sat down and we said while we have got traditional brands like Blue, which is a millionaire brand, which has done more than 10 lakh cases last year, but we were very shy company. We would not talk much about liquor because IMFL was still small. But then we felt the need to do premiumization of our brands. And as we say in marketing, we felt the need gap. The need gap in the consumer’s mind was where — in vodka particularly. So just to mention that the top MNCs do not have a vodka brand.
Only Haitan, which is a prominent player and a leader brand has a successful vodka. So — and there was — there was always a room for our second player. So we — what we did very cleverly is, if I may use that word, we got the best — our Chairman always prophesizing quality, quality consciousness and consumer consumables, we must give the best quality. Perhaps that is why IGL is so entrenched and over a period of time, our glycols business has done so well.
So we went to Europe and we got the best of best flavors from Germany. And that made the mark and our amazing vodka in the first year of launch three years ago made its present presence felt and we got gold medal consecutively for two years in open competition, we have an annual event where all over the country people participate, industry participates and in a blind format, the jury judges the quality. And because of the excellent quality our brand got noticed.
Today, I take a lot of satisfaction in mentioning that amazing vodka and its flavors are among the top three flavor vodka brands in wherever we have launched it, namely UP, which is our home state,, Delhi and even Rajasthan and Chandigarh. So just within three years, largely because of the packaging and the quality. Then we quickly moved on to we felt the need that India being a tropical country, there was a very good need of refreshing drinks.
As our CEO rightly mentioned, these tastes and preferences have — have you know, steadily changed. There was a time when hard whiskeys would sell like Peter Scott or number-one. But today lighter whiskies, young consumers want lighter, refreshing, easy-to-drink brands. So we made a beautiful brand called Zumba. Zumba was named by us. And Zumba, as you know is a wellness program. It also talks about — it also gives a hint of that you have to drink responsibly. So we created a — we created a citrus — citrus white rum. And the leader brand, as you are aware, I don’t have to mention.
So I take satisfaction in mentioning that today, our Zumba Limon, we Call-IT is the second — is the Challenger brand and the second-largest in this segment. This segment is very small at the moment, but we will grow the category and our brand is doing very well in UP, Utrakhar and Delhi and now also I take satisfaction in mentioning that we have been — we have got approval in also. So then we felt that we — when we have got such excellent quality in ENA as also packaging standards for the last over a decade with our Bacadi International, then why can’t we also do inorganic growth and have double engine growth, if I may use that word. These days in election double engine is quite popular.
Now, so what we are — I’m quite familiar with and so we approach them and we convince them that while their bandwidth is — as you know, Amruth is a wonderful company and single malls are world-famous. So there — while they concentrate on malt whiskies, they have got certain very valuable millionaire case brands like Macintosh Whiskey, which is a 35 year-old company and Old Drum, which is the sixth largest brand in drum across category, I as as per data levels. So we said why not — we acquire — not acquire — we partner with Amrud for on royalty basis and make it in Kashipur. And the moment I said Kashipur, they were more than happy to tie-up.
Just for your knowledge, gentlemen and ladies, there Amrud has in 75 years history never done a partnership and this is the first time and it is all because of the IGL Kashipur brand-name, because of the brilliant quality the consumer sees the label when they see Bacardi being bottled right from to the top-end Blanca where our Chairman and the Board has invested a lot of money within the consumer feels doubly satisfied that this is a quality product. So was more than happy to join us — join with us.
And on 7th July ’24, we started the business and I — though it is early days, it is — I can’t make a statement that we have made our presence felt. But what we did was we got these brands in the premium segment. Premium when I say the MRP of — in Delhi MRP of 800 to 1,100. And we have — we have got one more variant of Macintosh, one is Macintosh black and one is Macintosh White in order to cater to both the segments. So MRP is 1,100 for black and 850 for white.
So the growth of premium segment is so fast because the income levels of the consumers are going up. The entry-level as premium segment, people have youngsters that make — make lots of software, engineers, retail opening up has got so much money in the hands of the young consumers that entry-level is, say, 800 plus. So we want to harness that potential. And though we have just rolled-out about three, four months back and it is not fair for me to say that we are successful, but I’m sure we are at the right direction because with just to mention that the entire liquid is transferred from Amrud headquarters from distillery in Bangalore to Kashipur.
In other words, there is 100% quality, consistency as far as Amrud’s liquid is concerned and 100% packaging consistency as far as IPL is concerned. So it’s a good — very good mix between the two natural partnership and I’m sure in the next quarters, you will see, if I may use the word because I’m basically a sales and marketing person, you will see a VTO, V2O. So vertical takeoff, which one has done in the past many a time, but I’m sure with the confidence that our Board has reposed in us, we have recruited certain very good professionals. And this is early days, but I’m sure in years or quarters to come, IGL will be known for best quality premium brands.
Rupark Sarswat — Chief Executive Officer
Thank you, Rajuji. As you can see from enthusiasm of Rajuji is we are very positive about — I’m fell, of course he is very knowledgeable. And I think that being said, you have already seen the detailed presentation and the numbers.
So we will now take questions from people who have.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press R&1 on the testphone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles just put the easy questions first. Let’s just okay. Thank you. The first question comes from the line of Bhara Subramanian with Arihant Capital. Please go-ahead.
Balasubramanian A.
Good evening, sir. Congratulations for a good set of numbers. Sir, my first question regarding post restructuring. More than 70% of business comes from IGL spread. Is there any plan to listen that entity?
Rupark Sarswat
First of all, there is some nice music also coming.
Balasubramanian A.
So maybe we request that you mute your line, sir, after you’ve asked your question. Thank you.
Rupark Sarswat
Okay. So yeah, thank you. So you see one-step at a time. Right now, whilst there are all these options which are on the card and also talked about and the fact that we will look at opportunities to unlock value. Right now, the focus over the next period, I think the timeframe of — I do not know, Anandee will say 12 months-to 15 months. The idea is to get these separately working as independent P&Ls. To get the focus in the businesses to drive growth. That is number-one.
Of course, these will be different companies. You know, the options after that are obviously listing them and also looking at potentially partners, etc., are all there.
Anand Singhal
Just to add what the CEO sir has told that all the companies will be listed because the demerger will happen through NCLT route. Okay. And the demerger will be effective from 1426. So say we will take about 12 to 15 months in getting all the formalities relating to demerger done, which includes the saving NOCs and of course, the lenders and other NOCs and the NCLT NOC, approval, you can see. So this demerger will be effective from April ’26 and all the three companies will be listed on the stock exchange.
Operator
MR. Bhara, you can go with your next question.
Balasubramanian A.
Yes, sir. Sir, my second question regarding like imported — what’s the price difference between imported ethanol and domestic ethanol and we are using for imported ethanol for chemical business. Is there any quality difference between imported ethanol and domestic ethanol? Because in domestic ethanol, we are using for biofuels and.
Rupark Sarswat
Okay. So Vara, you have — we have talked about it before, but I will nevertheless respond. Yes. See first of all the imported ethanol which is either imported from Brazil or US is either grain-based or sugarcane based and we can take both. This is industrial gad ethanol now you need to understand that for the purpose of blending and for the purpose of portable spirit the ethanol that we import cannot be used that is not allowed to be used. So therefore, first thing is that all the ethanol that we put into biofuels or in our portable spirits depending upon the need is manufactured in-house, be it from grain or molasses.
As far as chemicals are concerned, we can use both grain-based ethanol and molasses-based ethanol and grain-based ethanol from the US interchangeably in our plants. So effectively, there is no quality difference. Of course, these ethanols may come from different sources. There may be traces of slight ingredients which are different, which we may need to do some pre-treatment to make sure that our catalyst systems work well, which we do.
But as far as the decision of using them for our chemical product is concerned, from a quality perspective, there is no difference. Sometimes people, depending upon their strategies to — on carbon footprint, et-cetera, may prefer, for example, molasses-based ethanol. That is more from a sustainability carbon footprint perspective, but not from a quality perspective.
From a quality perspective, we can use both these or multiple grades of these ethanol that I spoke about to deliver the same quality of product to customers either domestically or internationally.
Balasubramanian A.
Got it, sir. Sir, my last question regarding biofuel side, last two or 3/4 back, we used to report more than 7% kind of margin. In this quarter only 3.3%. Is there any specific reason for that?
Rupark Sarswat
Yeah. See, I briefly touched upon it that there are multiple factors which impact the margins that we make on and the margins do go up-and-down. Now there are three factors and we monitor all of them closely. One factor is the price. Now the price for various sources of ethanol, which goes into biofuel blending, whether it is molasses, C-heavy molasses, B-heavy molasses, damaged food grain, FCI-based, FCI-based rice, etc., or corn-based is fixed by the government and it is based on the feedstock.
The second parameter which affect the margin is the price of grain. So price of grain, you know, if you remember at one point in time when we started this business in ’23, ’24 was even hovering around INR19 to INR20. Then as there was increased demand and also some slowdown by the government in terms of allowing FCI rice to be used, the prices of grain in the market had gone up. So if you look at August ’24, September ’24, July ’24, it saw reasonably high prices of grain, which were hovering around INR27 to INR28 rupees.
The other factor, which also affects the margin is the price of DDJS, which is the protein which comes out and the higher the price, the better the margin on ethanol because that’s a byproduct which gets sell. So the reason you saw somewhat lower-margin possibly is because grain prices are higher, DDJS prices had dipped. And as I had also mentioned, going-forward, the government has announced release of more FCI for grain-based ethanol. There is abundant stock with the government. And we expect that the grain prices will come down and this will positively impact the margins for On Biofuels.
Operator
Thank you. MR., may we request that you return to the question queue for follow-up questions. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference. Please limit your questions to one or two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question comes from the line of Rohit Nagraj from B&K Securities. Please go-ahead.
Rohit Nagraj
Thanks for the opportunity. Congrats on good set of numbers. And again, congratulations for the demerger scheme. It seems interesting. So first question is again on the demerger scheme. In terms of the individual three segments, how is the working capital for them? What could be the debt structure as of now based on the long-term debt sitting across individual businesses?
And lastly, in terms of ongoing projects, what are the individual projects which are going across all the three segments? Thank you.
Anand Singhal
Rohit, regarding the working capital allocation to each company and the term-loan allocation, we are talking to the term lenders, mainly the State Bank of India, who is the leader in our consortium banking. Although we have more or less finalized depending upon the NWC for the working capital and term-loan for the projects for which we have taken, but we have yet to get the confirmation from SBI. We are in-process that will take some time. We will come back to you on this once it is finalized.
Regarding the project completion, more or less all the projects, whatever we have undertaken is complete except one grain distillery, which is we are installing in Gorapur and hopefully that will also be completed by March ’25. So then all the projects whichever, whatever we have undertaken will be completed before they demerger.
Rohit Nagraj
Okay. That’s — sure, sure. That is helpful. Sir, second question again from the managing all the three business perspectives, how would the group structure evolve? Rupat sir will be a Group CEO and there’ll be individual CEOs across the business. The question I’m asking is primarily because if we were to have individual CEOs to head the businesses, we may have to groom someone from our own organization or may have to hire over the next maybe 12 15 months by the time the scheme is culminated. So just a broader perspective on this. Thank you.
Rupark Sarswat
So Rohit, thank you. First of all, thank you for making me feel a little insecure about my job. That was on a lighter note.
Well, look, it is too early to state what exactly would be the structure, but let me put it in terms of principles. The principle of demerger to start with is to continue to run the businesses under one umbrella, but differently, as in separately from a strategic perspective, but not unduly increasing the cost base. Okay. So that is what you will continue to see in the near-future. Depending upon how it spans out, of course, there will be need for individual resources, how those individual resources will be structured, built-in from the organization, got from the outside is something which is work-in progress. So it is very difficult for me to immediately tell you how that will span out. But you know, as I mentioned, for the time, there will be several resources, which will be common, like it happens in many group companies.
Otherwise, we’ll end-up increasing cost quite a lot, you know. So there will be corporate resources, which will be common and there will be a mechanism to allocate these costs going-forward. And after the companies are separately formed, the way they start growing, the way they have the individual projects, I think there would be an ongoing dynamic way of looking at the sourcing them.
Rohit Nagraj
Sure. That is helpful. Just one last clarification. As of today, we are a green chemistry company given that all the three segments are having based on bio or ethanol. Once the businesses are separated, will the chemical business may transform into a combination of green plus synthetic chemistry or will it continue to remain on the green chemistry lines? Thank you.
Rupark Sarswat
Okay. So look, we believe that sustainable chemistry is a significant strength of ours, but it is not the only box that we would like to operate in. Not to say that we will — you know, for example, when we talk about specialties or Performance Chemicals, we would not limit ourselves to saying that unless it is you know, completely green, we will not do that. No, we will look at those areas as well. But we would like to leverage our green strength, our green feedstocks to make our specialty chemicals green, greener and even more green.
To give you an example, we are looking at a mines. So we would be perhaps hopefully the first company to make biobased a mines using and ammonia. But subsequently, we may start to use ammonia, which comes from green hydrogen. So therefore, that is also completely a circular or offer much lower carbon footprint. So that journey will continue., in short, the answer is, we will continue to look at opportunities to grow based on ourselves. One of our key stands is sustainable chemistry, but our key stance also our process development, product development, application development and forming strong relationships with some customers in the B2B space to whom we can add significant value.
Rohit Nagraj
Sure. That’s really helpful. Thanks a lot and all the best, sir. Thank you.
Rupark Sarswat
Thank you.
Anand Singhal
Thank you.
Operator
Thank you. Thank you. The next question comes from the line of Saket Kapoor from Kapoor; Company. Please go-ahead. MR. Saket, your line has been unmuted. Please go-ahead with your question.
Saket Kapoor
Thank you. Yeah, Namaska, sir, and thank you for this opportunity. Congratulations firstly to the entire team for setting the timeline and meeting the timeline in giving investors the update and the proposals for a demerger. We hope for a smooth transition.
Sir not many questions and only sir of a couple of data points. Firstly sir the pain point in our vertical has been the biopharma and that has been on a slide for the last 3/4 in a row. So if you could spare a few minute and explain, although I firstly also congratulate the team for giving a very descriptive investor presentation. So questions are answered there very well. But if more color of broader note could be given on the MHA Biopharma going ahead, you will share.
Rupark Sarswat
So Saket, thank you and you are anyway quite aware of our business each time and are well-prepared. And so you also ask difficult questions. Anyway, so look, we have spoken about it for some time. So the strategy has been, first of all, all to continue to maintain market-share in this dynamic market, which we have done quite well as you can see. So our top-line has been growing. And our market-share, particularly in the domestic market has actually increased. Now there have been various factors, which have been policy changes in the international market and competition, which has put pressure on margins. However, we are confident that the business longer-term is the right business to be in, but needs the right strategy, which we are following. And the right strategy is this.
I think the first thing is to penetrate the developed markets. So we are working on several fronts over there. For example, it needs several regulatory approvals in those countries, which we have been working on. It needs improving our standard and certifications and compliances in-house. So we are we are — for example, we are working on upgrading our Nutra facility to USFDA audit compliance and the audit has been completed as and when that gets you know certified, we’ll be in a better position to-market our products into the developed markets. So that’s one part of the strategy.
The second part of the strategy is innovation to look at delivery formats which are much better. As you know, these, these products like or nicotine or can be converted into various delivery formats which the pharma companies or the food companies value for their therapeutic benefits. So that is the other thing.
And the third pillar of growing this business, which is also the right strategy, which is also somewhat more time-consuming is to push for branded nutraceuticals, which therefore establish ourselves as a brand in two-ways, either through our products or follow what we sometimes loosely link to the Intel Insight model, where our brand is a co-brand to important brands within India or abroad.
So whilst I completely recognize where you’re coming from and expressing your concern about the pressure on profitability, there are — there is a silver lining. Our top-line has been growing. We are working on the right strategy to improve our standard compliance certifications within India to get regulatory approvals or approvals by customers abroad to focus on branded nutraceuticals and innovation. So that’s what I have to say about the business.
Saket Kapoor
Right, sir. Actually, it is heartening sir that the revenue is growing, but it is — that is happening that on — even on improved top-line, the profitability has halved from the last nine months. That was the key reason. But you very well explained what steps we can take to improve the improve the same. Sir, coming to the presentation part, I think so we should also try to calculate the debt position, the net-debt position and the movement of debt also in one of the slides, so that covers that — that is the missing piece according to me in our presentation. So, Anandji, if you could just give me the net-debt number as on 31st December and the — and the current maturities depending heavy March payment.
Anand Singhal
I will — I will just tell you, although whatever you have suggested that we will take-up, generally in quarterly basis, we have a repayment of about INR60 crores. So on yearly basis, we have a INR240 crores repayment on the term-loan. And right now, the company is having an outstanding term-loan of about INR1,200 crores. This is the position. This time you can see that finance cost has gone up, that is only because of that the project has been completed and the finance cost has been charged through the interest because earlier till the project was not complete, has not been completed that was capitalized. And the interest-rate has slightly firm up because of the overall increase in the interest-rate by the banks. We are fighting, but let’s see how we can reduce the cost.
Saket Kapoor
Okay. And lastly, if I may, if the time permits. Sir, firstly, on the E&A dynamics, if you could just throw some more color how the pricing on E&A dynamics have been. And again, sir, for the valuation aspect for which Rajiv sir was elaborating about the IMFL part of the story. So we are clubbing the government regulated business of grain-based ethanol and the liquor part. So does that better for the getting the right valuation going ahead since other liquor companies may or may not be having this under the portfolio. So were in the margins looking — will in the near-future look subdued and get diluted because of these two business getting clubbed? This is the overall restructuring which we are doing. That was my query.
Rupark Sarswat
Saket, look, these decisions, there are two things. One is margin percentage, the other is absolute margin. So — and when you — on one-hand, you may look at margin percentage, but there are certain synergies as well. So if you have an alcohol business, you have the option of manufacturing your own alcohol, be it molasses-based, be it grain-based, control your own quality and you may sell it to others as well. So in that sense, it brings synergy in terms of backward integration. It brings synergy in terms of better control and quality. It brings synergy in terms of being able to leverage your ethanol business and get scale by supplying to biofuel as well as portable or maybe even selling to others.
Now your question is that what happens to percentage margin? Well, percentage margin is one factor, but the overall profitability and resilience of the business also improves. So there could be various ways of looking at it. And there are also ways of how the hardware and the plants can be segregated or how they cannot be segregated, what’s the best possible fit. So-far in the wisdom of people who sat together, this seems like the most optimal way going-forward.
Saket Kapoor
Right, sir. And for the E&A dynamics, sir, you can give some more color how the price?
Raju Vaziraney
Hello, gentlemen, I just wanted to highlight one point.
Saket Kapoor
Please, sir.
Raju Vaziraney
We — I can — can you hear me?
Saket Kapoor
Yes, sir, I can very well, sir.
Raju Vaziraney
If I may say largest ENA producer or among the largest DNA producers in the country, we have 100 — almost 100% captive consumption. As our CEO rightly said, there are three benefits for IMFL particularly because I specialize in IMFL and liquor. One is consistency of supply our ENA, just for your knowledge, goes to in Nanjangura, which is in Karnataka. Karnataka is abundant on ENA, but they only buy our ENA from pool, transported there because of the brilliant quality, number-one.
Number two, our captive consumption is increasing so much, particularly for IMFL and country liquor that we naturally get the benefit because it’s from one tank to the bottling line. So lot of headache of transportation, freight, GST, interstate movement expenses are all avoided. And third is best servicing. Because as our CEO said, consistency of supply. So we are in unique position [Foreign Speech].
Saket Kapoor
[Foreign Speech]
Raju Vaziraney
[Foreign Speech]
Rupark Sarswat
[Foreign Speech] Can you repeat?
Saket Kapoor
[Foreign Speech] whether the prices have moved up as per the demand-supply or how are E&A price currently prior quarter-on-quarter or year-on-year comparison can be given.
Unidentified Speaker
Saket, I would like to add over here is that the ENA business is looking pretty promising right now. And since in the new tax regime, when it has moved to the state to decide the taxation, the opportunities are opening up in the immediate and medium future.
Also, we are looking at export markets, but you see that our own consumption of ENA in the country, liquor and IMFL segment is increasing and we are becoming a strong player within the state. So obviously, the net sales in the state of IMFL and CL is being taken-up as a larger share of IGL. So the rest of the sales left in the distillery market are though right now available, but as our share increases will slightly be impacted because of our own consumption. But then there are other alternatives like we are supplying in the pharmaceutical segment as well as in the perfumery and deodorant segment. Plus we are looking at certain export markets in the Middle-East and in the East-Africa region. So pricing right now is pretty good. It’s moved up a bit, but over a longer-term period, we will have to look at what is the final tax structure and how the margins work-out over the next few months.
Operator
Thank you, sir. MR. Saket, may we request that you return to the question queue for follow-up questions, please. The next question comes from the line of Rohan Patel from Turtle Capital. Please go-ahead.
Rohan Patel
Hello. Thank you for the opportunity. My question is regarding our portable spirit business. We — like what we have understood is like we are the largest player in portable spirit in Pradesh and and leading the spot in that. But the second-largest player and other new players that are coming, they are making the margins as high as we do, like even the second-largest players in making debt margins, they are in somewhere near single EBITDA. Last year, they were in negative EBITDA and they are guiding for lower double-digit EBITDA next year and we seem to be making very-high level of EBIT margins. So can you explain us the difference in our margin profile at that? Maybe you can explain yours like why do we have such a high-margin?
Rupark Sarswat
See, I think we have a decent margin and we have — I’m sure there may be players who are playing in more niche volumes or niche markets. So we have a combination of a business, which is the country liquor business as well as an IMFL business. Now that gives us some resilience in the sense that the country liquor business is more steady, both in terms of volume as well as in terms of margin as well as in terms of assured feedstock, for example,.
And we believe that some of the things that Rajuji spoke about, I spoke about the fact that we have in-house in the ENA helps us reduce our costs, help us reduce our supply-chain costs,. We have our plants which are integrated. I told you that we make a lot of ethanol. So therefore our scale is much higher, which means our utility costs are lower. Mentioned about the fact that there is a tank we don’t need to take it in trucks to another place, we can just pipe it and use it. And then of course, there is also having said about cost, when you are in the consumer market, it is also about pricing and the pricing is about positioning, pricing is about strategy, pricing is about, you know, delivering a perceived value by the consumer. So there is a set of these factors. I’m — it is good to hear your observation that we are — we are making healthy margins, we would actually like to improve them.
Rohan Patel
Yeah, that’s right. Seeing that coming to your 2024 numbers like portable spirit was near to INR950 crores. Out of that, how much could be country liquor?
Rupark Sarswat
Yeah. So the country liquor ballpark, you know you’re talking about last year.
Rohan Patel
Maybe last year and as well as this year, ballpark, if you can share the percentage in percentage terms, what would be the —
Rupark Sarswat
I will let you know ballpark. Can you give me a second?
Rohan Patel
Yeah, sure.
Rupark Sarswat
In terms of top-line?
Rohan Patel
Yeah, top-line.
Rupark Sarswat
See our top — in terms of top-line, roughly 60% of our business is country liquor. Roughly. I don’t — maybe Anandhi can — you can get into more details with Anandi, but you wanted a ballpark, so that’s how it is.
Rohan Patel
Yeah. And we can — fairly assuming like 50%, 60% would be your country liquor out of whole portable spirits. So is country liquor with the same margin profile — profile as overall portable liquor, maybe IMFL might be having higher margins.
Rupark Sarswat
IMFL, look, IMFL also has higher-cost of marketing cost, packaging costs and so on. For us, it has been kind of similar. I don’t have the exact numbers with me in terms of country liquor and portable spirits, but yeah, they are kind of similar. There are times when some brands in IFL make higher margins, but we also need to that we are a relatively newer business and we are also investing in our — in our improving our channels, etc.,
Raju Vaziraney
See, the good point about, particularly in Utra car days, if you go into details and it is in public domain, we are — we have a very good market-share. Out of eight bottles sold country liquor in, seven to eight bottles are of. So that shows our dominant position, if I may use that word. And it was all properly done. We are — we are the only company which has got machine and which is a huge capacity, which competition does not have. And naturally, we have our own ENA, we have our own pack capacity. So we are able to quarter most of the business of. And though it is not fair for me to exactly give you the figure, but the country liquor margin is higher than the IMFL margin where we are leaders.
As opposed to UP, where the margin — because the UP is a very, very large state with lot of players. So naturally the margins are under pressure. But the good point about country liquor is it is all quota-based. Now what is — if you understand this, then you will get how sustainable our country liquor business is.
See, as opposed to IMFL, in the country liquor there is a quota. In other words, the wholesaler has to buy a certain volume every month, month-after month-to give certain revenue to resulting in a certain or assured income for-country liquor for us. And the consumer behaves in such a manner that you know, naturally certain regions are — have gone to certain brands. So we are — since we are leader, so we particularly in East and Central UP, we are in a very dominant position.
So to sum-up, country liquor is very consistent. Quota-based and assured income, the margins in UP are satisfactory, but the margin in Utra is very handsome. And it is in the foreseeable future, they are likely to remain as such. So this will become a very big revenue stream for us. Yes, of course, IMFL gives a multiple. But as our CEO said, it requires time, it requires marketing inputs. But on a long-term basis, IMFL any day will give us huge, huge value, both top and bottom-line to the organization.
So we work — we very — we work very closely on these segments on a the — on a day-to-day basis, the MIS control systems are so brilliant here that every day we get exactly what is happening into the — into the market. You know, this is not the forum to talk about, but the process is brilliant here and IT controlled very nicely. So everybody knows on SAP what is happening transparently and that is why perhaps the investors are quite happy with the work we do on.
Rohan Patel
Well, that was a satisfactory answer. If you allow me, I have couple of more questions for you? Yeah. I just wanted to dwell into the distribution you just talked about the quota base. So the quota that is out there, is it for like a segment of liquor like for-country liquor for IMFL or is it like a brand base, like a wholesaler or retailer has to buy certain brands of country liquor?
Raju Vaziraney
It’s not — naturally, it can’t be brand because brand is depending on the consumer choice. But it is the retail — retail college or the wholesaler has to buy a certain quota and because actually it’s related to revenue because we have to buy, for example, in the quota is say 4,000 cases per day. So they have to buy 1,000 cases per day. If they don’t buy, they have to pay cash into the. So they might well sell that 1,000 cases resulting in business to us, consistent business to us. This is the duty of.
Rohan Patel
Okay. So that might lead us there. Yeah. So considering that your dominant position, this quota base, this might give you a very close competitive advantage compared to somebody else who is coming into UP because you know the distribution way better, the retailers way better and can push your branch forward.
Rupark Sarswat
Yeah, just one point in addition, maybe you already meant it that by and large, all states or at least UP and, the country liquors that they supply in their state are sourced from country liquor which is manufactured within the state.
Rohan Patel
Okay. No, I’m talking about the IMFL initiatives that you are bringing, the more premium brands, the understanding of industry dynamics, the distribution being in this field might help you compare to somebody who’s — the other IMFL brands that are coming into the state.
Raju Vaziraney
Yes, by only, means.
Rohan Patel
Yes. Okay. Sorry enough. Yeah, if I have any more questions, I’ll get back-in queue. Best of luck for future.
Rupark Sarswat
Thank you.
Operator
Thank you. The next question comes from the line of Vanshika Gupta from GRK Stock Broking. Please go-ahead.
Vanshika Gupta
Yeah, hi. Am I audible?
Operator
Yes, ma’am. Please go-ahead.
Vanshika Gupta
Yeah. I had two questions. One, sir, you mentioned that our capex cycle is almost complete only our plant is remaining. So for ’26 and ’20 — like maybe the next two years, what do we look — how does the capex cycle look for the company or maybe one year because then we’ll have the demerger. So let’s just talk about the next one year.
And then I wanted to touch upon the black business that you spoke about in the introduction that the revenues have declined. There is some declassification of business compared to last year, which is why it’s not really comparable. So if you could elaborate on that and just let us know what is happening in that segment, some details on it?
Rupark Sarswat
Okay. So let me give you a qualitative answer on capex first, because I don’t have specific numbers for the years ahead on capex. And if Mr Anand wants to add, I would request him to do so.
So look, there are several opportunities that we continue to chase in various businesses, particularly the portable spirits business and the chemicals business because they are most significant compared to NHL Biopharma in terms of capex intensity.
So as we grow the IMFL business or the country liquor business, from time-to-time, there are two capacities which are important. One is the ethanol capacity. We have added significant ethanol capacity already. So as far as our captive concerns — consumption is concerned, we are more than covered. And supposing we have more need for captive consumption of ethanol into the portable spirits business, we can always, if required sell less to biofuels, divert more to a portable. So that we are more or less covered except that from time-to-time as this goes up, we may need to put up capacities to make ENA or extra-neutral alcohol, which need a higher-level of purification, which does not need too much capex, but based on needs, we have been increasing our capacity and if there is need going-forward, we will augment it.
The other capex in the liquor business is about putting up blending and packing lines. Where also most industry takes a modular approach. It is not something where you put up one big plant. You can continue to add lines which are — which are now — which are kind of largely it is about assembling them and putting them up. And many of these lines can be changed from doing one brand to another brand and so on based on how the market is. So we don’t expect a huge amount of capex, but we would be doing capex, which will be required to support the growth in the business, which may be in terms of E&A, which may be in terms of putting up lines.
As far as the chemicals business is concerned, we expect that we will probably have incremental — incremental, but not huge capex is going-forward to expand our value-added specialties portfolio. We don’t have a number fits for it. We are working on a large number of projects. As those projects fructify, we will add more capacities to add more capex. So that is based on business equipment.
The other question that you had was on chemicals rather than only glycols and I will comment on it a little bit and I will also comment on glycols. So if you look at only our glycols business, I mentioned to you and I will give you a little bit of a breakup in terms of how we’ve looked at our overall business. So our glyphol ethers and acetate business in nine months, sales have been more or less flat, but our gross margins have actually are up by 42%. Our glycols business are our sales are actually up by about 26% and our gross margin is up by about 83%. Now these are not as granular numbers that we report in the — on the stock exchange. But since you ask me a question from my internal management meetings what we review, I’m letting you know.
Our specialties business, which is small has again seen excellent growth about 300% and a contribution or gross margin growth of about 183%. Our biopolymers business has declined slightly. It’s a smaller business in terms of top-line, but the gross margins have been flat. Our gases business has seen a revenue growth of 16% and a gross margin growth of close to 38%. And we also have — we also sell a methane oxide. That business has seen some decline in revenue, but has seen a contribution increase of about 72%.
So I mentioned earlier that for nine months, the chemicals business other than extraneutral alcohol and I’m separating extra-neutral alcohol because going-forward extra neutral alcohol will become part of the alcohol business. And if I separate what is JV, which is based on an agreement and contract has seen a top-line growth of 13% approximately year-to-date and a gross margin growth of in excess of 50%. So to put these things in context, it is not a business which has been falling apart or not doing so well. I think it is — we’ve had challenges, but it is a business which has — for the — for the period so-far has done quite well.
And even the glycols business, I mentioned to you that our contribution is actually up close to 52%. In fact, we’ve added a large number of — just specifically the glycols business, we’ve added a large number of new customers. So we’ve had a very interesting slow in glycols where if you just go back five years ago, almost 95% of our business was with Coca-Cola and that business we complete — we have completely lost because of RPET related mandates in the US.
Now interestingly, whilst, you know our volumes declined to as low as close to 30% and I don’t know the exact numbers compared to when we were doing that business, we reclaimed 85% of our margin because of developing more niche, more people who pay a premium for greener products, etc. So I think the business has been growing steadily, the business is strong and I would like to assuit your concerns about the chemicals in the glycols business.
Operator
Thank you. Ladies and gentlemen, our last question for today comes from the line of Ram Mohan who is an investor. Please go-ahead.
Ram Mohan J Rao
Am I audible?
Operator
Yes, sir, please go-ahead.
Ram Mohan J Rao
Yeah. Okay. Congrats once again to the Board on a very good set of results. And also congratulations on the bold move, okay, for the demerger because this is this is much desired, especially in the context of portable liquor, okay. So my — just my one observation is that long-term value basically comes from investing in our own brand, okay. Vis-a-vis say also getting revenues from say, collaborations with Ambreth or with, okay. So I just want to understand how big are our own liquor brand, IMFL brands compared to the and.
Raju Vaziraney
So there are three types of arrangements we have got. One is co-packing for, which is like contract bottling. But since we have made investments into maturing the spirit and so many other CapEx, so the returns are there, but that is steady. But we have no control because Bacardi does all the selling, distribution, investment, everything.
And then the second one is the organic growth that we get from our brands. So in our mind, it is very clear that up to premium brands, it will be all organically done. In other words, amazing vodka and our whiskey — amazing whiskey. So because the consumer does not drink premium brands without a company legacy. That’s why you find only for top multinational companies are able to quarter most of the premiumization story in India. Indian companies do not have the legacy of quality or scotch. So people struggle, the fatality rate in premium segment of INR1,000 plus is very, very-high. So in order to insulate ourselves from that risk, we have tied-up with Amrud.
Now it is not a tie — it is not a partnership, it is a royalty on a very long-term basis. And we give a certain royalty, everything else comes to our bottom-line and top-line in terms of we make the investment, we do the marketing, we get the profits, everything we are doing because these are non-malt brands. Gambruth being a parent company doing malt whiskies are able to concentrate only — they have bandwidth to do only top-end malt whiskies, while all other brands, premium IMF brands we are doing.
To put it in simple words, once we give the royalty, which is — which is defined in the agreement, the entire monthly top and bottom-line comes to us. So it is like for 10 years — for so many years, the brands belong to us.
Rupark Sarswat
Yeah, can I so you mentioned this that value is created only if we have our own brands, well, I would like to believe that it is partly true. Remember, we didn’t start like a DIGU in this space. So we started because of our strength in, moved into ENA, moved into country liquid, then started to take baby steps in the IMFL space. So the logical right strategy for us to do is to, first of all, establish ourselves as a quality manufacturer and what better than being a very good partner of big brands like Bakhardi and.
Now first of all, this gives confidence to us to be like an Intel inside or to be like an important API supplier to a big pharma company is no less value-creating than only doing brand. It is differently value-creating. It may not give you the entire profit margin on the entire value chain, but it gives you a significant amount of profit, as Rajuji explained. And also it gives you much more resilience in terms of your business. Supposing you are important component of big brand, let us assume you are a very important component of what DIGO does, what Bakadi does, what Amrud does, it is a strong building block for you to also build-your-own brands.
So honestly, looking at where we started our journey and where we are going to be an important partner to report reported — to reputed firms who have strong, steady building market-share. In my opinion, I might like to make my case is a stronger case for sustainable value-creation than a weaker.
Ram Mohan J Rao
Okay, got it. Thank you very much. So I basically see this as there are significant learnings from being associated with such quality brand. And hopefully those learnings will go into building stronger brands for our spirits division in the future.
Rupark Sarswat
Thank you. Yes, you summarized it well.
Operator
Thank you, sir. Ladies and gentlemen, that brings us to the end-of-the question-and-answer session. I now hand the conference over to the management for closing comments.
Rupark Sarswat
No, nothing more from my side. Thank you for organizing it on behalf of IGL, and I think it was a good conference in many ways. There was no disruption, voice was clear and good, we could clear the queue in terms of questions. Thank you very much for sparing your time and going through the details of the organization and asking us questions, giving us the opportunity to explain our position and clarifying questions or doubts that you had. Thank you very much. Have a good evening, everybody. Thank you.
Operator
Thank you. On behalf of Nuvama Wealth Research, that concludes this conference. Thank you for joining us and you may now disconnect your lines.