KRBL Limited (NSE: KRBL) Q3 2025 Earnings Call dated Feb. 07, 2025
Corporate Participants:
Ashish Jain — Chief Financial Officer
Anil Kumar Mittal — Executive Chairman
Ayush Gupta — HEAD OF DOMESTIC DIVISION
Analysts:
Amit Agarwal — Analyst
Himanshu Upadhyay — Analyst
Unidentified Participant
Yash Dantewadia — Analyst
Kaushal Sharma — Analyst
Naitik — Analyst
V. P. Rajesh — Analyst
Rohan Patel — Analyst
Manoj Dua — Analyst
Shubham Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to KRBL Limited Q3 FY ’25 Earnings Conference Call. 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 this conference call, please operator by pressing 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Ashri Chain, Chief Financial Officer, KRBL Limited. Thank you, and over to you, Mr Jain.
Ashish Jain — Chief Financial Officer
Good afternoon, all participants. Welcome to the earnings call of KRBL Limited. I have with me four sets of speakers today. First, Mr Anand Mittal, our Chairman and Managing Director will give you an update on the industry trend, our strategy and the export segment. After that, Ayush, Rayush our Business Head for the Domestic Business will give you an update on the domestic business and I will present an update on the financials of the company. We also have Mr Anu Gupta, Joint Managing Director on the call with us. I would now hand over to our Chairman, Mr Anir Mittal, for his comments.
Anil Kumar Mittal — Executive Chairman
Good afternoon, everyone. Wishing you all a belated, happy and prosperous new year. Thank you for joining us today for KRBLs Limited Q3 FY 2025 investors Call. I’m pleased to provide an update on our recent performance and share insights into our future outlook. To begin, let’s review the global rice market landscape. The USDL’s latest forecast for the ’24-’25 marketing year projects global rice production at 534 million metric tons, a considerable increase of 522 metric ton — million metric tons in the preceding year. Subsequently, global rise consumption is also expected to rise to 530 million metric tons in ’24 ’25 compared to 522 million metric tons in ’23-’24.
This year, again, global rice production will exceed consumption. The working that observed in ’21, ’22 and ’22 ’23, this is a positive sign for global supply stability and trade. Turning to India’s rice outlook, rice production is estimated to reach a record 145 million metric tons in ’24 ’25, up from 138 million metric tons last year.
Bhasmati rice production has also hit an all-time high exceeding 16 million tonnes of Paddy harvested across the GI region and all varieties. This is a 10% increase over last year’s production data on the back of expansion in cultivated area. Strong yields and introduction of new seats and varieties. These varieties have shown higher resistance to pestin diseases, improving productivity and reducing dependence on chemical pesticides.
The crop size of these new varieties is still small, but they are expected to be significant in the coming years as adoption by farmer increase year-over-year. This season, Basmati Paddy prices have seen a 20% decline compared to last year. Driven by strong production and a stable supply-demand balance, KRBL has procured paddy as per our requirement for the year and still continuing to procure since we were slow due to the quantum jump-in production as compared to last year.
The company has been proactively purchasing paddy at competitive prices to maintain quality and ensure cost-efficiency. We expect arrival to continue until the end of February, ensuring a steady supply for processing and exports. Now focusing on India’s exports, India continues to maintain its position as the world’s largest size exporter in 2025 with export projected between 2021 20 million to 21 million tons, including Basmati rice, this growth is supported by a robust harvest, ample stocks and government’s open policy stands for all non-basmati rice exports for 100% broken rice, which remains restricted.
Basmati rice export for the first eight months of FY ’25 stood at 3.6 million metric tons, making a 22% decrease from 3 million metric tons in the same-period last year. This growth is notable as it comes on the back of a record Basmati exports of 5.2 million metric tons in FY ’24. However, Basmati export realizations have declined by 7%, reflecting price pressure in the international market. In September 2024, the Government of India removed the minimum export price of $1.950 per metric tonne for rice exports.
This move has boosted export volumes as Indian rice is now more competitively priced in global markets. However, India lost some market-share to Pakistan during the period of export curves. We are confident that lost market-share will be recovered through strong brand positioning and competitive pricing. Rice prices in export market have remained stable to slightly lower making India rice highly competitive. Indian rice highly competitive.
As per APIDA data, demand for the Middle-East, European and the US remains strong and we expect steady volume growth in exports in the coming months. But in terms of realizations, we have seen a continuous pressure on price realization since February 2023 from the peak of INR93,000 per metric ton in February 2023, the average price realization has come down to INR79,500 per metric ton in November 2024, which is nearly a 15% decline over a period of 18 to 20 months.
This pricing pressure is mainly due to increased supply outlook, trade policy and geopolitical factors. Now moving to KRBL’s performance, I’m happy to share that the company recorded the highest-ever quality revenue. In export segment, KRBL’s export revenue in Q3 FY 2025 stood at INR567 crore compared to INR275 crore in Q3 FY ’24, reflecting 104% growth year-over-year. The company’s total revenue for Q3 FY 2025 was INR1,682 crores, primarily driven by the strong export performance.We expect that company is going to improve the export performance further in Q4. The company reported an EBITDA of INR203 crores and a PAT of INR133 crores. I know that our investors are more interested to know about Saudi. In particular, we have started exporting in Saudi and we hope to reach a good level of business in coming quarters, including Q4. Looking ahead to 2025, we remain confident in our ability to accelerate growth in our export business while sustaining our positive momentum in the domestic market. If anybody has any further questions, I would be happy to answer them during the Q&A session. I hereby now pass-on to Ayush for the domestic update. Thank you, everybody.
Ayush Gupta — HEAD OF DOMESTIC DIVISION
Thank you, and good afternoon, ladies and gentlemen. It is an honor to address you today and share the key highlights of the 3rd-quarter of fiscal year 2024-’25 for our India business. At the outset, I want to reaffirm KRBL’s unwavering commitment to its long-term growth strategy in the India market. This quarter marked the launch of several strategic initiatives that align with our vision of transforming KRBL into a multi-brand, multi-category FMCG player.
For the first-nine months of FY ’24-’25, our revenue in the India market stands at INR3,009 crores, reflecting a 3% value growth compared to the same-period last year. However, order times a challenging marketing environment — market environment resulting in a 4% decline in revenue to INR1,100 crores. The decline in revenue is primarily driven by two factors: first, regional rice portfolio optimization. The regional rice segment saw a Decline in value this quarter. Over the past two years, KRBL has tested the market with multiple regional rice varieties. After a thorough evaluation of market potential, value addition capabilities, competitive intensity and gross margin viability, we have strategically consolidated our portfolio to focus on select high-potential varieties. While we continue our growth journey in these chosen varieties, we remain committed to exploring and scaling new varieties selectively. Our goal remains to achieve 1 lakh metric ton in regional sales within the next three years, while ensuring this segment delivers equal or better gross margin compared to our Basmati business. Moving on to the second factor, branded Basmati performance. Our branded segment demonstrated resilience in a dynamic market environment. While we saw a modest 6% decline, this was largely driven by a temporary softness in bulk pack realizations. Importantly, our consumer pack realization continued to rise, reflecting sustained consumer trust in our premium offerings. The broader commodity market has faced significant headwinds with bas material ice prices seeing a 15% to 20% correction over the past crop year from November ’23 to October ’24. This trend has extended into the post-harvest period with prices adjusting by another 7% between November ’24 to January ’25. Despite these industry-wide pressures, KRVL has outperformed the market with our branded realization holding strong. This reinforces our strategic pricing approach, brand equity and strength of our consumer loyalty. While internal KPIs reflect stability, KRBL has outperformed expectations in terms of market-share growth across all key channels. In general trade, we have gained 360 basis-points to reach a 38.2% market-share. In modern trade, our market-share grew by 140 basis-points to reach 42.3% levels. And in e-commerce, we gained a dominant 470 basis-points to achieve a 42.8%. Additionally, our household penetration in India has increased by 400 basis-points compared to the same quarter last year, further cementing our leadership in the market. Progressing on our four-pillar growth strategy. The first pillar democratizing our distribution network. Our retail reach has now expanded to an all-time high of 4.15 lakh outlets, reflecting a net increase of 40,000 stores over last year. Our distribution expansion, coupled with the 15% increase in-direct reach has resulted in a 570 basis-points improvement in weighted distribution, a key driver behind our strong market-share gains. In e-commerce, our focus on enhancing share of voice, driving meaningful brand presence and forging deeper partnerships with platforms continues to yield results. We have gained 280 basis-points in-market share even on a sequential quarter-on-quarter basis. The second pillar, remodeling our supply-chain. Our supply-chain transformation is progressing well as we move closer to key markets to enhance service levels and sales velocity. We are also investing in a technology-enabled ecosystem, paving the way for improved service quality and cost efficiencies. Our third growth pillar is investing in the brand. This quarter marked a historic milestone for IndiaGate as we unveiled its new packaging, the first revamp in nearly two decades. This transformation developed over two years in collaboration with LandOr is not just a design change, but a game-changer in how consumers interact with the category. The new packaging simplifies the buying experience and redefines Basmati rice category codes in India. However, this is not just a one-time event, but the beginning of an exciting new journey for India Gate. In our relentless drive-to accelerate the shift from loose to package rice, we have onboarded the legendary Mr Amita as a brand ambassador. His values deeply resonate with India Gate’s legacy and trust and we believe his association will play a pivotal role in strengthening consumer loyalty and driving category conversation. Finally, our fourth pillar following into new products and categories. Our read-to-cook Biryani masala launch has been met with overwhelming consumer appreciation. Following its success in modern trade and e-commerce platforms, we are expanding distribution and general trade while developing new innovations within the spices category. A landmark development this quarter has been the launch of our new health focus brand, UpLife. UpLife embodies the philosophy of live life unbound and serves as an entry into the rapidly-growing health and wellness space. Our first foray is into the healthy edible oils category launched in two variants: Applife Light for weight management and UpLife Gut Pro for gut health. These products have a shared brand architecture with India Gate, reinforcing their credibility in the market. Healthy edible oil market size is around INR1,800 crore per annum and is growing at more than 20% year-over-year. We are targeting a INR300 crore revenue milestone in this segment, while simultaneously working on expanding uplife into a comprehensive health and wellness platform over the next three to five years. While this quarter post challenges, our performance underscores resilience, adaptability and unwavering focus on long-term value-creation. The steps we are taking today, optimizing our portfolio, strengthening distribution, investing in our brand, transforming our supply-chain and expanding into new categories will serve as the foundation for sustainable growth in years to come. As we look-ahead, our focus remains on deepening our consumer connections, driving innovation and setting new benchmarks in the industry. I’m confident that with our strategic clarity, execution excellence and strong leadership, KRBL will emerge as the future leader of Food in India. Thank you. I’ll now hand over to Ashish for comments on the financial segment.
Ashish Jain — Chief Financial Officer
Thank you, Ayush. I will now take you through the performance for the quarter and nine months ended 31st December ’24. All figures mentioned by me will refer to consolidated financials of KRB Limited. First, we are pleased to report our highest-ever quarterly revenue from operations, a testament to our brand strength and market leadership. Coming to the quarter quarter’s numbers, total income for the quarter stood at INR1,690 crores, higher by 15% over the corresponding quarter last year.
Export revenue grew by 104% on account of growth in branded and private-label business, while domestic revenue declined by 4% against the corresponding quarter due to the factors mentioned by Ayush. Despite the short-term headwinds highlighted by and Ayush, our strong operational efficiency and disciplined cost management have enabled us to maintain stable margins.
Our gross margin for the quarter stood at 24% compared to 24.8% in Q3 FY ’24, while with the decline primarily attributed to lower other income. Excluding other income, our core gross margin actually improved, rising to 23.6% from 23.3% in Q3 FY ’24. This demonstrates our ability to sustain profitability despite external pressures. EBITDA margin for the quarter was 12% versus 14.1% in the same-period last year, impacted primarily by the gross margin trend and a higher proportion of freight on-sales, which had a 2% EBITDA margin impact. Freight on-sale was higher on account of higher export volume, higher freight rates and higher share of CIF sale on the domestic side.
That said, we continue to optimize cost structures and enhance operational efficiencies to strengthen margins moving forward. Finance cost for the quarter was lower at INR1.2 crore as against INR7.5 crores due to lower borrowings. PAT for the quarter was at INR133 crores or 7.8% as against INR134 crores or 9.1% in the corresponding quarter. Let me now share a comparative analysis of Q3 versus Q2, we delivered a strong sequential performance with revenue from operations rising 32% quarter-on-quarter, driven by 12% increase in domestic sales and 125% increase in export sales.
The growth in domestic revenue was fueled by higher branded rice volumes, while exports saw robust expansion in both branded and private-label categories. Importantly, when excluding other income, our core gross and EBITDA margins improved by around 200 basis-points quarter-on-quarter, highlighting our disciplined approach even amid market fluctuations.
Turning to nine-month FY ’25 performance, we delivered a steady growth trajectory with total income reaching INR4,218 crores, up 2% year-on-year. This was driven by a 3% growth in domestic revenue and 1% growth in export revenue, reflecting sustained demand and market resilience. Our gross margin stood at 24%, while EBITDA and PAT margins were at 12% and 8% respectively. Margin moderation was primarily due to higher input costs, lower other income and increased freight and employee costs. Moving on to balance sheet highlights. Our total inventory as of December 31 December 2024 stood at INR4,278 crores, reflecting an optimization of stock levels. This included INR1,241 crores of Paddy inventory, which was at INR2,156 crores in December ’23 and INR2,877 crores in rice inventory, which was at INR2,554 crores in December ’23. On a volume basis, as of December 31 December 2024, and rice inventory stood at 3,341,000 tonnes and 458,000 tonnes, respectively compared to 4,491,000 tonnes of paddy and 395 tonnes of rice in December ’23. Lower inventory is primarily due to lower per unit cost, reflecting the industry-wide price trend that mentioned by Anal and Ayush. One of the standard highlights in the in the quarter is a sharp reduction in net-debt, which now stands at INR92 crores as of December 31, ’24, down from INR901 crores last year. As we look-ahead, we remain focused on driving sustainable growth, enhancing operational efficiencies and delivering long-term value-creation. With that, I come to an end on my prepared remarks. I would now like to hand over to the moderator for opening the Q&A session. I will just like to mention that the ED matter is subdued, so we will not be in a position to respond to queries on that matter. So over to the moderator now.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press R&1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press R&2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press RN1 to ask a question ladies and gentlemen, we’ll wait for a moment while the question here. The first question is from the line of Amit Agarwal from Leva Investments. Please go-ahead.
Amit Agarwal
Good afternoon, sir. My question is regarding Saudi Arabia market. Sir, it’s good that we have started exports to Saudi Arabia, but just wanted to know whether it’s through our own channel or we are doing it through distributor or wholesaler and what is the situation of our our own office being opened there in Saudi Arabia?
Anil Kumar Mittal
See it will take as far as our own office is concerned, it will take little more time, maybe another month or two months because certain permissions are awaited and we are waiting for their positive answers so that we proceed. As far as our exports are concerned, it is through distributing channels and we are doing good in those channels which we have recently signed and started making our export.
Amit Agarwal
Just wanted to be more clear about it. Is this consignment temporary or just consignment are supposed to grow and will be still there in the next quarters — coming quarters?
Anil Kumar Mittal
Yes, yes, it will come in the coming quarters also. It is not a one-time business. It will be coming and it will be continuing also but it is mostly to the wholesalers and are we not in the position to still appoint distributors exclusively or something like that? So distributor will take little more time as far as the modern trade distributors are concerned, but as far as wholesale is concerned, we are doing exceptionally very good.
Amit Agarwal
Okay. And my last question is regarding the gross margins. Though our gross margin increased compared to last quarter, but if you see four, five years in the — then our gross margin is still very low. Any particular reason is because the prices are low worldwide or is there some other reason? And what — how do you expect our gross margins to do in next one year?
Anil Kumar Mittal
Yes. See, the gross margins are low due to the paddy prices were low this year in the opening during October — during the month of October and that has reflected in the price. That is why the gross margins are low, but they are going to improve in the first-quarter of ’25, ’26.
Amit Agarwal
Sir, my last question is regarding the turnover. So if the prices are low, sir, do you expect the turnover to be flat in the coming quarters or the turnover will be higher?
Ashish Jain
I think we are expecting the revenue to be slight growth over the previous year. That’s the view as of now.
Amit Agarwal
Okay, thank you. That’s my last question.
Operator
Thank you very much. I request to all the participants kindly restrict to two questions per participant and join the queue for a follow-up question. Next question is from the line of Himanshu from PMS. Please go-ahead.
Himanshu Upadhyay
Yeah. Hi, Ayush. The question is to Ayush. Ayush, we had — had — we were investing in regional rice as a growth area, okay, in last few years, okay. Can you update on that? And secondly, why not one venture what we have started, let us make it a sizable business beyond INR500 crores and then go into other businesses like oils and all that things. Any thoughts on that will be helpful, please
Ayush Gupta
Can you please repeat your second question? I did not get that properly.
Himanshu Upadhyay
So we entered oil business, okay, edible oil business, okay now. So my question is, why not first let the regional rice become a large part of business and focus on that particular business where large opportunity was there or we still believe is there and we have invested to make it right large and then we enter other businesses. Just some thoughts on that.
Ayush Gupta
Yeah. Yeah. Thank you for the question. See, the regional rice business came about to us as an opportunity because the South and East markets, which are primarily the rice growing and eating regions of India, our market shares were extremely high in the basmati space. We are enjoying market shares of upwards of 65% at aggregate level in the South and East.
And given that strong equity that India Gate enjoyed in the market and given the households were primarily heating, Basmati obviously has a restriction because it’s a Biryani kind of a consumption, right? The regional rice is where we thought it was an untapped opportunity for KRBL because the brand India Gate was synonymous to quality and trust. We thought it will be a good opportunity for us to enter. In the two years since we’ve entered 2.5 years now that we’ve entered, we’ve gained significant ground.
We’ve done, I would say, a revenue of about INR200 crores in the last financial year and we are close to about INR250 crores in this financial year. What we’ve evaluated and realized regional rice is vastly an unorganized market with lot of regional and branded players and very, very lot of varieties are available in the market.
Yeah. So what we’ve realized as we’ve entered that a lot of the varieties that are available in the market, the margin potential for the company is very less. We’ve experimented, we tested a lot of varieties in the past two years. And now we’ve consolidated our focus on two, three varieties where we’ve seen that margin potential and value-creation for the brand is possible.
So Govin from region, also called Jira Rice or Kyma Rice in the South, and Sona Mosuri in the area are few of the varieties that we’ve seen good traction and we’ve seen a healthy gross margin profile as well. So these are some varieties that we’ve consolidated our efforts to right now and we are expanding its presence in regions and putting more focus here.
While we continue to grow this segment, we’re also evaluating more regionalized varieties along the way because it’s a huge diverse market and understanding many of these varieties takes a lot of insights from the field and from the — from the ground. So it takes — it’s a journey. So we’re doing that. But as I mentioned in my comments as well that we are committed to delivering a 1 lakh metric ton kind of a business in the next three years with this.
But our main objective is that any business that we deliver in regional rights, we don’t want to want it to dilute our gross margins. We want to have at least the equal gross margin of Basmati rice, if not better. So with that cautious consideration, we are expanding this business of regional rice. On the front of launching edible oils, you know, it’s not just a launch of edible oils, but it’s a creation of a health platform that India Gates for — sees as an opportunity in the Indian market.
The health and wellness platform in India is at a rapidly-growing pace. And with quick commerce and modern trade increasing in saliency at least in urban and metro towns, we see that as a brand India gate, we are missing that a segment Of consumers. India Gate, because it doesn’t stand for health, so we plan to launch another brand Applife, which will resonate to the health and wellness segment. So healthy edible oils because of its penetration, because of its you know, our association with commodity as well as health and wellness seemed like the first probable option for us. As we — as we’ve entered OEs, our focus is to enter many other categories in the health and wellness space — the other banking and the health and wellness space along with edible oil in the coming years. Also, healthy edible oil or rice brine oil came as a natural fitment for us because we were making it as a byproduct in our facility already. So our know-how with the product and the pricing and commodity, you know trends were a little bit — we were more comfortable with this launch and it hence made a very suitable extension for us
Himanshu Upadhyay
Okay. Okay. And second question was on the inventory and you said that the price of has come down this year versus last year. But what do you expect? So Jan, Feb we have been buying and we expect to continue to buy further in this year. So are the prices still low at the low-level of what were there in November, December or price is for has started increasing. Some thoughts on that would be helpful.
Ashish Jain
So prices — prices have come down drastically from November also, the prices in the season have come down by at least 10% to 12%. So we have to buying now the crop, 19% 95% as of the crop has already come, but the remaining 5% crop will come till February end, but we are buying in the market at the current prices, which is lesser by 10% to 12% of the fees.
Himanshu Upadhyay
So you are saying that what the price of the product is in the market or the remaining which is coming is lower by 10% from November what the price was for the. That would be the —
Ashish Jain
Yes.
Himanshu Upadhyay
Okay. Okay. Thank you. I’ll join back-in the queue for further questions.
Operator
Thank you very much. Next question is from the line of Desai from Capital. Please go-ahead.
Unidentified Participant
Hi, good afternoon, sir. Sir, my first question is on export. I think you mentioned that in Q4 and going beyond, we will continue this run-rate and build-on to that. So should we assume this INR500 crore as a base run-rate from here on, that is one. And especially on export, you know, on the — you said that a large part of Saudi Arabia market that we are currently tapping is on the wholesale side of it. So how should we think about the margin profile because I think retail was yielding much better margin for us.
So how should we think about that
Anil Kumar Mittal
See, as far as Saudi is concerned, we are satisfied looking to our results on the Q3 turnover and the margins. As far as exports is concerned and even in domestic also, KRB — India Gate brand, we have been aging the rise for more than one year and certain varieties for two years. So up to July or June, this old crow will be — will be supplied in the export market to Saudi and elsewhere also and the margins of profits are intact, they are not gone because old rice is hardly seldom available in the market. They are with one or two players, only those who are in export market, but primarily it is with KRBL Limited.
So therefore, the demand — if you ask for the demand, the demand is for rice, not for the current crop. So we are getting a premium prices as far as exports are concerned. As far as our turnovers are concerned, I’m quite sure that as far as Saudi is concerned, we are going to further improve what we have done in-quarter three.
And overall also we expect now our thrust will be to ensure that our revenues doesn’t go down. They are improved on quarter-over-quarter basis. This is our expectation.
Unidentified Participant
Got it, sir. And sir, second question on margin. I think, Ashish, you mentioned that a couple of percentage point impact because of the freight part of it. And currently we are at 12% plus sir, say back-in the Q1 we expect some improvement in gross margin. So going into FY ’26, are we looking at kind of mid-teens, 14%, 15% kind of a margin, you know, is this the expectation with which we should work with?
Ashish Jain
Definitely, definitely, you are right, we will be having a better margins?
Unidentified Participant
Got it. Got it. And other one question on the domestic side of it. You know we are entering into this edible oil category. Now one thing that we have observed is that whenever any company wants to create a new category, it requires a long gestation periods, a lot of money needs to be invested upfront in terms of building distribution brand, et-cetera. We already have the distribution channel open, but how do you see the amount of money that you need to invest before we start making profit in some of the new categories? Do you see that registration period of two, three years?
And is there a number that we are looking at, which we are willing to put in terms of investment or loss you know for all those new categories?
Ashish Jain
See, as I mentioned that we are looking at a INR300 crore top-line by the end of three years. And as per our current plans of investments to build this category for us, we see that we will start making profit by end of year two. On exactly how much we plan to spend, I would not like to disclose that on the call here.
But given that the competition on this category is quite fierce and it’s also it’s a health kind of a platform as a product, we will be investing significantly in advertising and communication because that will become the foundation and bedrock for creating this brand. So significant money will go in creating brand value and communicating with our targeted consumers.
And by year two, we start looking at positive P&L on this product.
Unidentified Participant
But I have one question. Thank you.
Operator
Thank you. Next question is from the line of Yash from Dante Equity. Please go-ahead.
Yash Dantewadia
Yeah, hi. So I think you posted a great set of numbers, but I just wanted clarity on the domestic volumes year-on-year. Have your domestic volumes degrown year-on-year.
Anil Kumar Mittal
Yeah. So I think I should invest on it. But from a branded business point-of-view, our Basmati volume was lower by 1% on a year-on-year basis. Volume was lower by a larger number.
Yash Dantewadia
Right. And you just said that the margins are going to kind of trend upwards, right? One thing I just want some clarity on is year-on-year your exports went up by almost 100% and your domestic business was a little lower year-on-year. So — but your margins were almost flat year-on-year, right? So going-forward, I — what I’m able to understand the number is exports are not as profitable as they were. Is that trend a short-term trend and is that going to change?
Anil Kumar Mittal
No, I think so. It’s a misconception exports have got higher profit or margin compared to domestic and there is a good difference between the pricing between exports and the domestic market. It’s a big difference.
Ayush Gupta
Yeah. And just to add to what said, I think two, three things will play-out. See, I think had mentioned and also that we should see our old inventory, which has been purchased in earlier years are coming to a reasonable level by July. So that’s the time our average cost will start reflecting the cost declines that have been mentioned. That’s number-one.
Number two, also the domestic — the whole price decline, I think that should also settle down hopefully over the next one or two quarters. So both these things combined along with improving export revenue should lead to margin improvement, which is why we had said that next year should be far better from a margin point-of-view.
Yash Dantewadia
But whatever you said, I’m not sure if that is going to play-out of next monsoon is again very good, right? If we have a very good monsoon next year also and if the prices fall further, then this year inventory will again become more expensive than next year, right? So I mean, we are playing the inventory game, right? And it will mostly depend on the monsoon next year, if I’m not mistaken. Is that a great — is that a good assumption or not?
Anil Kumar Mittal
Yeah . Let me add something. First of all, this year the carryforward stocks will be too much because the crop size is bigger and the production of rice will be also — we are expecting to be not more by about 1 million tons over last year. So the carryforward stock would be there. The farmers are not getting the right price what they are supposed to get. So next year, the production would be according to our estimate would be lesser by 10% over this year. So this is the right price. We feel that this price in will not come again. This is our feeling, but we say always the man proposes, got disposes, we can’t say it.
Yash Dantewadia
But does the price depend on the farmer’s inventory or does it depend on the monsoon? Because I think it depends — I assume it depended on the monsoon. So next year if the monsoon is again great like how it was this year, right, then the prices should not come down substantially because like you said, they’re already sitting on inventory that they’re not able to sell, right? So could you just make the market?
Anil Kumar Mittal
Yeah, yeah, please finish.
Yash Dantewadia
No. So could you just tell me, see, he said the previous person said that by June or July, your inventory should narrow down quite a bit, right, last year’s high-cost inventory. But — but then your next monsoon starts playing in, right? So let’s assume even if your inventory is — high-cost inventory is rundown by June, July and then if next year, basically this calendar year’s monsoon is great, again, like last year and the production again is high, then what do we see with the sort of inventory that you’re sitting on? Will your margins be able to go up as you’re sort of commenting or will they sort of stay right here?
Anil Kumar Mittal
And see if the monsoon is good, then the farmer is going to grow more of thermal rice than the Basmati rice. He has to look ultimately what are the returns on his farming. That is the main object. And this year, the total rice production will be around 9 million tonnes and we do not seek at these 9 million tons, we will be — the exporters or the millers would be able to consume. That is not the demand. If we look at the demand, the total demand today is around 8 million tonnes, five in exports and 3 million tonne domestically.
So there is a surplus of 1 million tonne and that is why the prices are coming down. Next year, if you say the is good, definitely then the farmer is going to grow PR106, PR12, PR14, which is permol because government MEP is also and not MEP, MSP is also increasing year-over-year. So he has to see that whether I’ll make more money in cultivating permal or in ice.
Operator
Thank you very much. Yash, I’ll request to come back for a follow-up question. I request all the participants kindly restrict to two questions per participant and join the queue again for a follow-up question. Next question is from the line of Kaushal Sharma from Equinox Capital. Please go-ahead.
Kaushal Sharma
Hi, sir. Very good afternoon. Am I audible?
Anil Kumar Mittal
Yes, we can hear you.
Kaushal Sharma
Yeah, sir, as you said that we are sitting a very good inventory like INR4,000 to INR7 crores and INR1,000 crores for paddy and the paddy price has significantly dropped. So are we expecting any inventory loss in Q4 or going-forward?
Ashish Jain
No, there is no inventory loss. We are regularly buying. So it is — there is no question 95% of has already come. And we are selling on the basis of our inventory valuation only. There is no question of any inventory loss.
Kaushal Sharma
Okay. Okay, sir. Thank you.
Operator
Thank you. Next question is from the line of from NV Alpha Fund. Please go-ahead.
Naitik
Hi, sir. Thanks for the opportunity. Sir, my first question is, I wanted to know if you could give the breakup of the export sales, how much of it has come from private-label or bulk sales and how much is branded? And also what has led to this increase year-over-year, which region has led to this increase?
Anil Kumar Mittal
Yeah, see, bulk, as far as export figures are concerned, I think so, bulk and we have got a — that we can let you can later on talk to my CFO and he will let you know-how much is bulk and how much is branded.
Naitik
Okay, sir, can you share the region which has led to this growth?
Anil Kumar Mittal
The return of growth is that we have started opening many as Saudi Arabia is one of them, then other destinations showed a promising demand. And third is that even our private-label also we got a good business out-of-the private-label. So all three together gave us this growth.
Naitik
Okay, sir, got it. Also, next question is, what was the impact of freight rate exactly? And what percentage of a margin reflected?
Ashish Jain
Yeah. Total of 2 percentage point impact on the EBITDA margin. So which I had explained is for two reasons. Three reasons actually. One is higher export volume. Second is higher freight rates. And on the domestic side, we’ve shifted some quantum of the sale on CI basis, which is why there is a higher freight on the domestic side also.
Naitik
Okay. All right. And sir, my last question is, in terms of our domestic sales, if you could call-out how much was regional and how much was Basmati branded rice
Anil Kumar Mittal
Generally don’t give this breakup separately, but it is predominantly Basmati at this point.
Naitik
Okay, sir. Got it. That’s it. Thank you.
Operator
Thank you. Next question is from the line of Parik from PMS. Please go-ahead.
Himanshu Upadhyay
Yeah, hi. So my question is that for the domestic business, do we have a differentiation in the gross margins across channels, the modern trade, the e-commerce and the general trade? And if yes, then how are we planning to optimize the sales?
Anil Kumar Mittal
No, definitely we have a split of different channels of. E-commerce, modern trade operate at a higher gross margins compared to traditional trade. But overall investments in e-commerce, modern trade are also demanding because it’s a consumer first platform and there it’s brand agnostic from that perspective.
So a lot of investment goes. Net-net, traditional trade tends to be a couple of percentage points more profitable compared to MT e-com from a P&L perspective. However, as I mentioned, there are various projects that we are implementing in terms of supply-chain and in terms of packaging cost optimizations that we are doing to enhance our gross margin profiles.
Also, we are looking at portfolio optimization, certain premium portfolios tend to be under-leveraged in certain markets in certain channels. So that effort is also on. And I think that’s more of a journey. Quarter-on-quarter, we keep on evaluating and enhancing this work on how we can improve our gross margin profiles in the India market?
Himanshu Upadhyay
Okay, got it. My second question is that we have about 4 lakh plus touch points right now on the retail side. How — how are we — I mean, what is our target over the next three to four years that how much we want to penetrate within this particular channel?
Ashish Jain
Yeah. So packaged basmati rice as a category is currently sold-in about 6.5 to about 6.75 lakh outlets in India. And we are available in about 4.15 lakh outlets. Our objective is to reach at least a 70% numeric distribution, which will yield at least 85% 90% coverage in terms of weighted distribution. So there will be about lakh, lakh 1.2 lakh outlets more coverage that we’ll be aiming.
Himanshu Upadhyay
But this will be over how many years?
Ashish Jain
Our plan is to — I mean, I mean it’s very difficult to put down timeline for it. We would love to do it in year, but these are highly cost draining activities. So basis market and competition intensity and landscape and distribution. There are lot of things that goes into expanding our — but I would say it’s a journey. We’ve been doing it for the past three years. I would say an 18 to 24 months would be an ideal timeline to achieve the balance.
Himanshu Upadhyay
Okay. Thank you. I’ll join back-in the queue.
Operator
Thank you. Thank you very much. Next question is from the line of E.P. Rajesh from Banyan Capital Advisors. Please go-ahead.
V. P. Rajesh
Yeah, hi. Thanks for the opportunity. Most of my questions have been answered, but just wanted one clarification around the Saudi business. Are we doing it in our own India gate label or is it more in the segment Where it is bulb pack, etc?
Anil Kumar Mittal
100% in our own brand, India.
V. P. Rajesh
Okay, wonderful. Congratulations. That’s a great way to start going back into that business. And then Ashish on the EBITDA margin, just one clarification. So some of that 2 percentage point delta is because of the gross margin also because we had the older inventory, which is probably coming out, which was at a higher price. Is that understanding correct? And second, this freight cost that you’re talking about, is it going to start coming down now or is this more structural in nature?
Ashish Jain
Yeah. So first, you are right. Part of it is flowing from gross margin, but there it is more an other income impact rather than the price movements, number-one. Number two, on the freight cost, I think the rate side, we do see that correction happening over the next quarter or so. So overall freight cost should also come down.
V. P. Rajesh
Okay. Thank you and all the best.
Operator
Thank you. Next question is from the line of Rohan Patel from Turtle Capital. Please go-ahead.
Rohan Patel
Yeah. Thanks for the opportunity. Just like previous participants.
Operator
Can you speak little louder, please?
Rohan Patel
Sure. Am I audible now?
Ashish Jain
Yeah, go-ahead.
Rohan Patel
Yeah. You just mentioned the volume growth numbers. So I just wanted to clarify, like can you give us again for the nine months, what was the volume growth in Basmati as well as non-basmati?
Anil Kumar Mittal
You’re talking about overall for the company?
Rohan Patel
Yeah, for the company, for nine months for Bathmati and.
Anil Kumar Mittal
Yeah, sure. I’ll just give you the numbers. So the volume growth overall was around in the nine-month period was around 4% for Basmati, and there is a decline on the non-Basmati side.
Rohan Patel
Okay. Okay, yeah. Second question is regarding what we have personally observed is your confidence for the Saudi market has like you are being more confident than previous calls that we have participated. And looking at the efforts you are making on the wholesale side, so are seeing what you are guys doing, can we reach back to the INR500 crores to INR700 crore level that we used to do before pre issues that we are facing? Like in a year or two?
Anil Kumar Mittal
No, no, I think so. In FY ’26, we will reach INR500 crore to Saudi alone, no problem.
Ashish Jain
Rather why 500, it would be INR500 plus.
Rohan Patel
Okay. Oh, that’s great. That’s great. And looking into this INR500 plus crores that you are going to do, how much that will be coming from, say, general trade, moderate trade and if you just give us a broad explanation like how you’re pushing the trade to different distributions
Anil Kumar Mittal
To tell you that I can’t give you, but I can give you the broad idea of the Saudi market, Saudi market, 55% to 60% is wholesale, 20% is and 20% is modern rated.
Rohan Patel
Okay. So right now, our efforts are going through wholesale. So we will be capturing the largest market in that.
Anil Kumar Mittal
Yeah, yeah. No, we have given to the — some of the stores also directly because we didn’t had any distributor. So we have given to 3 three, four, I don’t want to name them, but we have given full, full two, two containers, three, three containers to them directly.
Rohan Patel
Okay. That’s great. That’s great. That’s very clear, right. And second question.
Operator
Can I request to come back please for a follow-up?
Rohan Patel
Okay, sure. Thank you.
Operator
Requesting participants to kindly restrict to two questions per participant. Next question is from the line of Manosh from Geometric Securities. Please go-ahead
Manoj Dua
I am audible?
Ashish Jain
Manoj, your voice is breaking.
Manoj Dua
Am I audible?
Ashish Jain
We can hear you, but your voice is breaking, Manoj.
Manoj Dua
Okay, let me change the location am I audible better now?
Ashish Jain
Please ahead.
Anil Kumar Mittal
It’s better please go-ahead.
Manoj Dua
Okay. So we are major share in domestic and we are trying new things in domestic also. How much year we can take if 12% growth in sales levels in six years. So how much we can take-in growth assumption, how many domestically, how many years? Just take ballpark idea.
Anil Kumar Mittal
Manoj, your voice is breaking. I mean, is your question around the growth potential on the domestic side?
Manoj Dua
Yes, sir. Yes.
Anil Kumar Mittal
Yes, okay. If I talk about some general trends of what we’ve seen in the past two, three years, you know, we are currently at about 38% 39% market-share. We are at 38%, 39% market-share and we see healthy tailwinds in the category because we are seeing good growth rates in the packaged ice category. You know, consumers are moving from loose to packaged. That’s one transition that we’re seeing. Saliency of e-commerce, modern trade are fueling that trend of move from loose to packaged.
So overall, you know packaged vasmati rice from a consumer pack segment seems to be a positive trend for us. In the next two to three years, we also plan to expand market-share like we’ve done in the past 450 basis-points in this financial year. We try — we want to maintain that trajectory and our objective is to reach a 50% 55% market-share in years to come. So with that kind of a aspiration, I would say healthy double-digit growth in consumer PAC is to be seen.
In the bulk pack business, we have been posting good 10% to 12% growth year-over-year and we continue to see that trends continue going on. There are certain white spaces that we’ve identified for bulk pack segments and we continue to tap them. So overall, a healthy growth rate in the Basmati segment is to be seen in the future years.
Manoj Dua
Yeah. Thank you. Thank you. Thank you. Best of luck.
Operator
Thank you very much. Next question is from Lanu Shabham Jain from NV Alpha Fund. Please go-ahead.
Shubham Jain
Thank you so much for taking my question. My question was again on the domestic front. If you look at the last Nine-Month number, our growth seems to be in single-digit. I believe some of this is due to pricing pressure. But what’s our volume growth in the first-nine months in the domestic business?
Anil Kumar Mittal
Yeah. On the Basmatip branded side, the volume growth is at 6%.
Shubham Jain
Okay. Got it. So following-up on the previous question, right, we’ve seen in the last, say, five years, we’ve grown this — we’ve doubled this business. So we’re growing at about 15% 17%. You know-how much more penetration do we see at a distribution level that we can increase? That can help us get to like a 15% growth going-forward?
And my second question on the domestic business was, do we need to do a similar amount of aging that we do across our international business or it’s relatively lower? And is this like a better ROCE business that way?
Ashish Jain
Yeah. So in terms of how much growth we can see, as I told you, we are at about 4 lakh outlets, you know, close to about 35% of the outlets in the packaged basmati rice continue to be untapped for the brand. So that’s a huge ocean of opportunity in terms of growth. Second, we see positive wins in terms of the packaged rice as a category growing because consumers are moving from loose to packaged.
And a lot of this trend is happening in the Tier-2, Tier-3 towns of India. So Basmuti was primarily centered across metro and Tier-1 towns, but in the last four, five years, the saliency of the category has moved to Tier-2, Tier-3 towns. So overall size of the category is increasing. So those are the two real, I would say, tailwinds which give us promising of the future where we remain promising for the future that growth rates will come. Also e-commerce and modern trade platforms are increasing salency, which are more consumer brand-centric and consumer forward.
So that’s again a good news for a brand like us to grow. In terms of your other question and you know, is aging an important factor, that continues to remain a differentiating factor for the brand in a cluttered category like this. While we have certain products which are two years aged, there are certain products in the India market which are one year aged. So that kind of a bifurcation between export and domestic remains and — but aging is a, is, I would say a core competency and a core advantage that KRBL enjoys and we would always be known for that.
Shubham Jain
Okay. So if in India, we We still are the better product because we are doing say one year aging. Does this swap in our pricing? Do we get to charge a premium to the customer or we’re still at par with the other players?
Anil Kumar Mittal
Yeah. No, we definitely charge a premium to the customers. Today would easily charge a 10% to 12% premium over unbranded and regional brands available in the market.
Shubham Jain
Okay. Okay. And on the distribution front, where you mentioned that we have 4 lakh outlets or touch points versus 7 lakh opportunity. Is this more geographic penetration in Tier-2, Tier-3 or is it just that areas in terms of say are we more prominent hypothetically in the north than South we’ve not at. Is this more to do with different regions or just like a different tier of cities that we need to keep going down?
Anil Kumar Mittal
No, it’s actually more geography. I would not segregate it to a particular tier you know in certain parts of the country, especially — specifically West, we tend to be under-penetrated. So that’s an opportunity for us. The underpenetration in West spreads across metro, Tier-1, Tier-2. And both North and West are highly penetrated for Basmati Rice and there are a lot of regional, local brands that are prevalent in the market. It’s also kind of a gross margin dilution when we fight those brands, but we are working up a strategy which will — where penetration of the brand trumps pricing.
So as we enter more-and-more outlets, as our GTM becomes stronger, we feel because of sheer availability in the outlets, we will gain market-share. So that’s — that remains the fundamental of our strategy as we move forward.
Shubham Jain
Got it. So the reason West was say relatively underpenetrated is because there’s like more competition and more margin pressure that is potentially happening over there.
Anil Kumar Mittal
Right? West is also more economy segment dominated and there are lot of local regional brands and very price-sensitive market. But we are still working our way in there. If we want to gain market shares up to 50%, 55%, West has to be on our charts in terms of giving penetration.
Shubham Jain
Got it. And just one follow-up on the ROCE. So you mentioned that we do say relatively lesser aging in the — in a basket of products in India. So at an ROC level, do we hit the 18% 20% ROC despite doing lower margins in India?
Anil Kumar Mittal
See, we don’t compute it separately for each business, but overall the return would be slightly lower. I mean largely because of you know, the margin profile is totally different from exports.
Shubham Jain
Okay, understood. Thank you so much.
Operator
Thank you very much. Ladies and gentlemen, we’ll take that as a last question. Thank you very much to the members of the management team. On behalf of KRBL Limited, that concludes this conference call. Thank you all for joining us and you may now disconnect your lines. Thank you