LT Foods Ltd (NSE: LTFOODS) Q1 2026 Earnings Call dated Jul. 28, 2025
Corporate Participants:
Unidentified Speaker
Monika Chawla Jaggia — Chief Corporate Development Officer & Company Secretary
Sachin Gupta — Chief Financial Officer
Ashwani Kumar Arora — Managing Director & Chief Executive Officer
Analysts:
Unidentified Participant
Meet Jain — Analyst
Joyson — Analyst
Foram — Analyst
Amit Doshi — Analyst
Pradyumna Choudhary — Analyst
Hitesh Goel — Analyst
Param Vora — Analyst
Rashin — Analyst
Ishant — Analyst
Vipulkumar — Analyst
Ketan Chheda — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the LT Foods Q1FY26 earnings conference call hosted by Motilal Oswal Financial Services Limited. 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 signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Meath Jain from Motilal Oswal Financial Services Limited. Thank you. And over to you sir.
Meet Jain — Analyst
Thank you. Good afternoon everyone. A very Warm welcome to LTPUR Limited 1 QFR 264 Results Earnings Call hosted by Motiya Local Financial Services Limited on the call today we have the management team being represented by Mr. Ashwin Kumar Arora, M.D. cEO Mr. Shatim Gustav CFO Ms. Monica Chawla Jalia Chief Corporate Development Officer. We will be leading the call with the management team. Thereafter we will open the floor for the Q and A session. I would now like to have President Management team to share their perspective on the performance of the company. Thank you. And over to you Ma’.
Am.
Monika Chawla Jaggia — Chief Corporate Development Officer & Company Secretary
Thank you. Meek Good evening everyone. On behalf of the management, I welcome you all to Q1 financial year 26 earnings conference call of Healthy Foods. Please note that any statement made or discussed during this call which reflects our outlook for the future or which could be construed as a forward looking statement must be reviewed in conjunction with the risks that the company faces. A detailed disclaimer in this regard has been included in the investor presentation that has been shared on both the stock exchanges I.e. nSE and BSE. The result documents are available on company’s website as well as the stock exchanges.
A transcript of this call will also be made available on the investor section of the company’s website. So Q1 update. During Q1 financial year 26, LP Foods reported highest ever quarterly revenue and EBITDA of Rs. 2,501 crore and rupees 302 crores respectively grew by 20% and 17% respectively versus Q1 financial year 25. The growth in revenue is supported by increasing consumer demand and preference toward our brands and entry into new countries, improved supply chain and availability of our brands and increased household penetration. The company reported a beta margin of 12.1% in Q1 financial year 26 versus 12.4% in Q1 financial year 25.
A minor 30bps dip in the margin is on account of increased investments on the brand Masturbating and other specialty rights Segments grew by 18% in this quarter, reinforcing the continued global love for our brands due to increasing consumer preference for healthier and sustainable food choices. Our organic business reported a remarkable 32% growth in this quarter. The major portion of the growth has been contributed by Soya meal. Normalized growth other than soya meal is around 18%. Our organic calm Nature Biofoods launched a new facility in Rotterdam to support our global ambitions in July 25. The strategically positioned facility and Europe Gateway port handles 15,000 metric tonnes annually, positioning us to capture more of the EU $45 billion organic market in India.
The household reach of Dawat has grown significantly from 45.56 lakh homes in March 2023 to 56.2 lakh homes in March 2025. This growth was possible due to our constant efforts on innovation, continuous investment on the brands and staying relevant to evolving consumer needs and ensuring that our products are easily accessible across the globe. The snacky segment under Kadikari has grown 40% versus last year. We have also acquired rest of 45% of the Golden Star which we have completed in May 2025. We now proudly lead as the number one Jasmine rice brand in US. During the quarter we reinforced Acid bill through the spectacular sport to our World Biryani Day celebration in Jaipur and Indore.
This celebration cements are positioned as the global thought bearer of Biryani. I would like to now give an update on the geographies. The European Continental currently contributes around 18% of our overall revenue. Our progress in this region has been robust achieving a 57% year on year growth. Notably we have recently secured partnerships with four leading UK retailers strengthening our footprint in this market. The spurt in the revenue is majorly attributed to the UK plant being fully operational in the past quarter. North America that accounts for 43% of our revenue and continues to be a key growth driver with a 32% year on year increase.
This includes the consolidation for the Jackson Rice business for the quarter as well. The normalized growth of this geography is around 18%. Our flagship brand Royal holds a dominant position commanding a 54% share in the Pasnipi rice imports in the region. India contributes to 31% of our revenue recording the 10% year on year growth. Our brand collectively holds 25% market share with category leadership in the Western regions. The Middle east and rest of the world constitutes the remaining 8% of our revenue. We remain optimistic about scaling our presence in this geography by further strengthening the consumer mind share and market penetration.
LT4’s well diversified geographical presence served as an effective de risking strategy, reducing dependency on any single market, enabling consistent performance across varying macroeconomic cycles. There is an update on the CVD side that is reference to the CBD notice that we received by our fellow subsidiary. The Company has filed a case brief on July 16, 2025 giving the past presidents wherein the AFA applied by the Department was not held right by the post of International Trade. And as for the process, US DOC had some questions on clarification they could have done as per process by asking for the supplement questionnaires.
Petitioners have also filed their case brief and EcoPure has also filed a referral brief on July 24 to contest the AFA. If the DOC final results maintain AFA EcoPure can file an appeal to the Court of International Trade as well. I will just update you on the industry side as well. India is the largest producer and exporter of Basmati rice, contributing approximately 90% of the global supply. The key production regions include Punjab, Haryana and Pradesh. Annual Pasmati rice production in India stands at 10 million metric ton of which 6 million metric ton is exported with the remaining consumed in India.
Within India, 70% of the rice consumption is still in the form of the loose rice and we see significant potential for the conversion from loose to branded and packaged rice driven by evolving consumer preferences, rising awareness and increasing demand for quality and hygiene products. Globally, the Basmati rice category is growing at a steady 7 to 8% CHR supported by expanding demand and increasing adoption of Indian cuisine across Geographies LP with a legacy of over seven decades in the Basmati rice industry, has successfully navigated various business cycles across both upturns and downturns, demonstrating consistent performance growth and profitability improvement.
As we expect, the category continues to grow. LT Foods is well positioned to capitalize with its strong ramps, global distribution network and strong supply chain on rising global and domestic demand and further strengthen its market share and drive sustainable profitable growth across the geographies. In line with our commitment to consumer relevance, LT Foods actively monitors market trends across geographies, deeply studies the consumer preferences and focused on launching innovative rice based food solutions tailored to diverse consumer needs. With this, I hand over the call to the moderator to open the floor for question and answer please.
Meet Jain — Analyst
Thank you Monica.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone 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. The first question is from the line of Joycen from Amira Gestion. Please go ahead.
Joyson
Thank you for giving me the opportunity to ask some questions. So maybe firstly can you comment on the SG and a trend this quarter because it seems to be running higher than you know what is expected. And separately could you quantify the impact of freight cost if quarter has been a concern, I suppose you shouldn’t last three quarters. Thank you.
Sachin Gupta
So yes, you are right. SGN expenditure in this quarter as a percentage to revenue has increased. As stated by Monica. The major increase in the revenue is on the brand investments which we are making. So this quarter itself, my SGN expenditure as a percentage to revenue increased by almost 1.2% this quarter itself. This is mainly on the brand investments.
Joyson
Okay, maybe specifically what percentage of revenue was spent on freight and what percentage of revenue was spent on marketing related cost this quarter. Thank you.
Sachin Gupta
So my logistic cost as a percentage to revenue has reduced by 90 basis points. Whereas my plan spend as a percentage to revenue has increased by 120 basis points year on year basis.
Joyson
Okay, great. Thank you so much and congratulations for the great results. Thank you.
Sachin Gupta
Thank you.
operator
Thank you. Sir, the next question is from the line of forum from Abacus. Please go ahead.
Foram
Yeah, hi sir, thanks for the opportunity. So basically Pakistan is experiencing severe water crisis because of obviously the suspension of the Indus Water Treaty. So this has led to an increase in the paddy prices. So as a company like we will at least sitting with a year’s inventory. So going forward do we expect any inventory gain and margin improvement because of this?
Ashwani Kumar Arora
Thank you. So first of all, you know, whatever the impact is, as you know said in the earlier call also we don’t see have much impact in the production of basmati rice. But having said that, you know, but India contribute roughly to the export 80% of the total. You know, whatever the international market we sell basmati, 80% is already contributed by India.
Foram
Okay.
Ashwani Kumar Arora
Yeah, yeah. India is getting, you know, stronger, stronger every year in basmati category across the globe. So Pakistan has really not bigger role to play in the international market as far as Indian basmati is concerned. This year India has exported 6 million tons roughly, you know, 15% growth over last year. So we are very positive on the category in India as well as international market. You know the total market size of rice consumption is 500 million ton globally. And basmati is just, you know, roughly 12 million tonight, which is roughly two and a half to 3%.
So we see good opportunity for this Indian export to grow. And as a LT food, we have a global footprint and very strong brand and very strong distribution across the world. So we have positive on the growth and with the time, you know, improving the ROC and all the margin metrics.
Foram
Right, sir. So again with the increase in the brand spends in the medium term, do we expect a little bit again like some pressure on the margins or can we expect an improvement in the margins going forward?
Sachin Gupta
Yes, as a brand spend, as a percentage to revenue, this will remain as such. But yes, we are expecting an improvement in our GP margins which we had in the last in this quarter as well. So we are expecting a better gpa, almost better than this quarter itself in the coming quarters.
Foram
Okay, sir. And so also like Middle east has seen some degrowth of 33% year on year. If you could throw some insight on what is happening in these markets. And Saudi has contributed around 16 crores in this quarter. So what would be that in the base quarter?
Ashwani Kumar Arora
Sachin, you can add into this. So basically, you know, Middle east include both, you know, our branded business and private label business. So overall what we have seen in Deeprow is that we have discontinued some part of the private label business which was not fitting into the whole strategy thing. But as far as our brands are concerned, they are growing. And as mentioned in Saudi Arabia this quarter, we have done 16 crore revenue.
Sachin Gupta
In this quarter itself. Yes, as Ashwiniji told previously we were this 16 crores is only in our brand initially. Last year we made a private label sales that was almost 3 crores in this territory. So that has been replaced with our brand in this quarter itself.
Foram
Okay, got it, sir.
Ashwani Kumar Arora
So overall Middle east is going as per plan. So we have positive one.
Foram
Thank you.
Sachin Gupta
Thank you.
operator
Thank you, ma’. Am. The next question is from the line of Amit Doshi from CARE Portfolio Managers Private Limited. Please go ahead.
Amit Doshi
Yeah, thank you. So congratulations on a great set of numbers. First thing is our expectations of North America and our performance. You know, both has been quite interesting. Like you know, 33% growth in a market where we are already leader and our future expectation is also 10 to 12%. So can you share some thoughts where. We are already a leader, how we expect to grow at double digit numbers? Or was there any one of in the 32%? Yeah.
Ashwani Kumar Arora
So in USA, as Monica just mentioned, the 32% is contributed. The Golden Star acquisition has completed. But if you normalize that Then the core category has grown by 18% on Apple to Apple. So we expect that the consumption will keep growing in America. And the bottom line, the pillars for the growth is the lever for the growth is this immigration and being the it is getting popular in restaurant also and love for Indian cuisine. So we expect as given we have in our forecast, we have given the double digit growth that we are positive on that.
Amit Doshi
Okay, okay, okay. So initially participant question the answer was that bank spend we incurred 1.2% of sales. Did I hear that correctly? Just wanted to confirm.
Sachin Gupta
No, no, no, no. That was incremental incremental spend of 1.2% incremental.
Amit Doshi
Okay, increment. So I mean what is. Because we also mentioned that you know we going to invest in brands. So. So as a sales what. What are we targeting and what we used to incur in say prior years. What thought process on brand investment is what I’m trying to understand.
Sachin Gupta
In this quarter. In fact, value.
Ashwani Kumar Arora
So broadly, you know, it can be quarter on quarter difference depends on, you know, the what kind of, you know, the plan is. But on an average 3 to 4% is the plan correct?
Amit Doshi
3 to 4. Okay, so that answers the question. Obviously there was huge nice growth of volumes and price has been stable going forward. What is the expectation considering that we will have now lower inventory padding which was acquired last season. So when that is likely to kick in in the sales and you know, do you expect corresponding fall in the sales prices? Because there is a comfortable fall in the paddy prices that we acquired last season.
Ashwani Kumar Arora
It depends, you know, country to country, you know, competitive landscape, you know, force you to keep your margin in that range only. So but we are more focused on growth and we are expecting as guidance is given, you know, 12.5 to 13%.
Sachin Gupta
EBITDA margin adding to it ROCE. So we are quite confident on the ROCE part to deliver robust ROCE of 21% plus which we had delivered in this quarter as well. So we are constantly focusing on increasing the ROCE percentage.
Ashwani Kumar Arora
Yeah. So the more focus is in delivering the ROCE improvement.
Amit Doshi
Understood, understood. Because in the presentation there’s one of. The strategy mentioned is inorganic acquisitions as well. So can you share your thoughts on which I mean you’re looking at newer geographies or existing geographies, but newer products. I mean your brand, anything that you can share on what is the thought process of acquisition? The ticket size that we are looking.
Ashwani Kumar Arora
At the strategy is in the space of three where we our businesses, which is Basmati and specialty rice Organic and rth foodier. So in these spaces we always look for an opportunity. And historically whatever acquisition has been done is mostly in basmati and other specialty rice. It has to have, you know, in this domain only. And of course, you know, it has to have synergic benefit also.
Amit Doshi
Okay. Okay. And last question. Any update on soya mill litigation that you would want to share?
Ashwani Kumar Arora
As Monica just mentioned, we have filed the rebuttal and we are expecting October and you know, the decision from the department.
Amit Doshi
Okay, okay. Okay. Okay. Thank you. And on the.
operator
Thank you, sir. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to two per participant. The next question is on the line of Raman from Sequent Investments. Please go ahead. Mr. Raman, your line has been unmuted. Please go ahead with your questions. As there is no response, we will move to next question. The next question is from the line of Pradyumna from Pradyumna Chaudhary from JM Financial Family office. Please go ahead.
Pradyumna Choudhary
Yeah, hi. Thanks for the opportunity. Just a couple of questions. First is if you can just give some sense on what the helica contribution is to our total US revenue and the same number for Europe. Revenue. I’m trying to understand. In these. Countries is more consumed in home or in Kolika.
Ashwani Kumar Arora
Yeah, so for us, you know, it’s in the range of. It depends on origin. But on an average 20% roughly goes into the restaurant and food service. What we call is Oreika and rest is all for home consumption.
Pradyumna Choudhary
So this is for us or totally.
Ashwani Kumar Arora
On an average as a global consolidated average, I’m saying 20 to 25% it goes for this Orica and the rest is the home consumption.
Pradyumna Choudhary
And when this number for us, if.
Ashwani Kumar Arora
You talk about, you know the category that where the category is being consumed, then I will say 40% Horeca and 60% home. This is, I’m telling on an average globally.
Pradyumna Choudhary
And for the US this 20 to 25% will be lower or higher. The Horika contribution for us from us.
Ashwani Kumar Arora
I think 20% will be fine.
Pradyumna Choudhary
All right. And second question would be what would be our normalized growth if you’re just for this Golden Star acquisition. So what would be that and why is why continental Europe has grown 57%. Is there some adjustments or a one off?
Sachin Gupta
So firstly answering your question regarding the European. So the European, as Monica stated now there has been a full functionality functioning of the UK facility. So we have started a UK facility last year itself. So that became fully operational and that gave me an incremental revenue of almost 80 crores in a quarter itself. So that had a one off effect on the increase in the revenue size. As regarding if we normalize the revenue of the Golden Star and have that what is the revenue size then it is almost 17% growth that we have. Witnessed.
Pradyumna Choudhary
Just a couple of follow ups. One is I believe like even if I use revenue has started coming in but it’s the same market you’re serving, right? So either our India revenue would have taken a hit because of that. Because not sorry, not India, the continental Europe. So when you would have taken a hit because earlier we were supplying from European region so why like it should not really happen, right? Because the market remains the same. So that’s one. And second if you can just give your comments on a couple of cost items. One is how is the paddy price trending currently? One of the previous participants spoke about rising paddy prices.
If you can just allude to that. And second freight cost in this quarter was 5.7% of revenue. So earlier in a normalized environment we used to see 5% of revenue. So is this going to come down further or is it now stabilized at a higher level? These are my questions
Sachin Gupta
answering your trade loss as a percentage to revenue it is 5.57%. This was same in the last quarter as well the images preceding quarter I’m talking about and we expect that the logistic cost to remain as such. In. This for the remaining part of the year as well. And as regarding the revenue sales which you stated of the European and the UK operation we have as Monica in the opening speech has told we have entered into new contract in the UK So they have the four chains which we have acquired in this quarter in the previous year but the sales was full in this quarter which was not there in the last quarter. So that gave me the incremental revenue in this quarter of 80 crores.
Ashwani Kumar Arora
So Continental Europe is stable and so I have got a new growth from the new customer.
Sachin Gupta
And as regarding the paddy prices. Yes the paddy prices as on in my books of accounts as on 30 June is 29 rupees. So Ashuji told so it is pricing or the things that there won’t be any kind of inventory gain or loss so that have been taken care because we the inventory which we have secured that is backed by our brand, brand. Brand sales so that we don’t speculate in having acquired more quantity as such.
Ashwani Kumar Arora
So we don’t.
Pradyumna Choudhary
Yeah sorry I was just asking how is the current advertising environment looking like?
Ashwani Kumar Arora
I think the market is stable. You know on an average I will say the tidy prices must be depends on variety. 34, 35 rupees.
Pradyumna Choudhary
So that’s higher than a book price. Right. Our books contain 29 rupees. So there’s been an increase. Is that the way to understand?
Ashwani Kumar Arora
Yes, yes. But you know the market doesn’t behave like on the present, you know so all the, the industry player, you know, they source in the procurement time then they average their price and do the pricing. So it’s not, doesn’t behave like, you know, like other commodity and as Sachin said, mainly branded business. The only, only benefit we get is when the prices go up is that you know the new competition doesn’t hurt you.
Pradyumna Choudhary
Yeah. In fact I was concerned whether we’ll be able to like next year when these come into our inventory, whether we’ll be able to pass on the increased paddy prices to our end customers. That’s why that’s where my concern was, you know.
Ashwani Kumar Arora
So the normally prices changes when the you know, the crop changes and the 25 prices will get an impact in the month of you know most probably June. So I think that’s too long to forecast anything on this. Paddy prices up and down.
Pradyumna Choudhary
Understood, Understood. Thank you. Thanks for all.
operator
Thank you. Sir, the next question is from the line of Hitesh Goel from Origin Capital. Please go ahead.
Hitesh Goel
Thanks for taking my question Sir. Sir, this US first question of US growth of normalized growth of 18%. Is this growth also higher than your usual growth? Largely because there was terror expectations. You know there was a deadline that after the 31st of July the tariff will go up. So in this quarter was there a lot of pre buying by the retailers, distributors and gigas?
Ashwani Kumar Arora
What is your tariff? What do you say?
Hitesh Goel
No, I’m saying the tariff was 10%. Right. But the trade negotiations are still going on. So is there expectations? Maybe there’s an expectation of increased tariffs on agriculture products because of which the distributors in U.S. would have in this quarter because 18% growth is very high growth. Right. Is 6, 7% in U.S. dollars.
Ashwani Kumar Arora
We don’t think that you know that has bigger impact on that. This we believe that you know it’s a normal thing. It’s nothing to do with this buying because of this duty in back end.
Hitesh Goel
So you think that this year actually.
Ashwani Kumar Arora
US you know, maybe 2, 3% if so but not beyond that.
Hitesh Goel
So we are expecting a double digit growth this year in US.
Ashwani Kumar Arora
That’S what you know in the plan we have given we are expecting roughly, you know, double digit which is in the range of 10%.
Sachin Gupta
So that’s the plan basically. Yes, there were certain questions you told there might be certain things but basically this is mainly on the account of the distribution, the distribution reach and which we were able to have in the US in this quarter itself that impact, that had a positive impact on our revenue in this.
Hitesh Goel
Okay. And sir, on India business, what was the volume growth yoy you have reported a very healthy 10% revenue growth despite paddy prices coming down. Right. So if you can give us the volume growth for this year.
Sachin Gupta
In this quarter itself on Y and Y basis there is a growth of almost a 13% growth on a buy.
Hitesh Goel
So basically there was only 3% decline in realization on a bio basis.
Sachin Gupta
Correct. So there is a 2% decline in the relationship.
Hitesh Goel
And sir, basically you have purchased a lot of inventory because of the due to the last crop being very, you know, you got prices on the last crop. But now even in this season actually the rice crop is pretty good, right? So the rice prices are. Procurement prices are going down further.
Sachin Gupta
Actually we didn’t secure much. We secured it as per our plan. So we just preponed it and preponed. It on the, on a season itself so that we did so. So generally we procure 60 to 70% in the season itself and the remaining in the later part of the year. But being there because of the favorable rate and certain Factors we secured 75% in the season itself. So that was also within our, within a plan itself. So that was fully backed with my brand and other sales constraining the current scenario what we have. So considering this it is, it would be too early to predict the next crop what will be there. Yes, the sewing is better as stated by the government data.
What we have so sowing is better as compared to last year. So it’s a 34 months journey that will finally decide what we will harvest, what kind of crop we have.
Hitesh Goel
Sir, and my final question is on gross margin. Actually if you look at Q on Q basis gross margin deteriorated by 200 basis points despite your export mixing green year on Q1Q basis. So what is the reason for that? Because you are animal. I’m talking more from a, I’m talking more from a Q and Q perspective. Bio wise there’s a 70 basis point improvement in gross margin. But if you look at Q1Q basis with a 200, 200 basis point decline and I thought it would be stable or declining. Right. Because it comes down
Sachin Gupta
so, so in. This, not the major contributor for the decline in this gross margin is my. One of my segments organic segment. In this organic segment, my GP margins have dropped. This is mainly because of my product mix that we sold out. In the. In the organic segment, there were certain lower GP products that were sold in this quarter itself that overall impacted my GP margins otherwise in the past.
Ashwani Kumar Arora
So I think the mix has affected this.
Hitesh Goel
Okay. Okay. So there is no impact on gross margin in Basmati business. On business we can implement that.
Ashwani Kumar Arora
So growth is led to organic growth that is led by.
Hitesh Goel
Great, sir, thank you. And all the best.
Ashwani Kumar Arora
Thank you.
operator
Thank you, sir. The next question is from the line of Neet Jain from Motilal Oswal Financial Services. Please go ahead.
Meet Jain
Thank you. Can you dwell down on this organic business that we have forwarded into the European B2C part and also on throw some light on the leave for the recognition that we have a call option of 21 as well. Can you put some light on that.
Ashwani Kumar Arora
Business organic that is majorly, you know, B2B and resupply as an ingredient to the industries to further, you know, the effort to improve margin, set up career that we will supply in a smaller pack to the supermarket. So now it will be another vertical which will be a value accretive.
Meet Jain
Okay. So currently we have on 30% stake in leave and we have an option to buy for the 21%. So with the new plant of B2C can we expect this to happen soon to leverage this segment?
Ashwani Kumar Arora
So we are, we are in process to, you know, acquire and definitely, you know, partly, I will not say fully, leave is more on, you know, ready to eat platform where they sell the rice cake, you know, the lentil cake and all this is a purely snacking and health. So partly it will help this plant, partly it will not. Yeah.
Meet Jain
Okay. My second question is on this Middle. East part, like as you mentioned that in the Saudi, we are mostly doing branded business now. So is it like we have entirely stopped the P2B business there or this quarter we have taken a call to focus more on branding. How is it.
Ashwani Kumar Arora
Mainly, you know, our own label. So we will pursue that strategy and we are pursuing that study. Yeah.
Meet Jain
Okay. Okay. Thank you so much.
Ashwani Kumar Arora
Thank you.
operator
Thank you, sir. The next question is from the line of Parambhora from Srinetra Asset Managers. Please go ahead.
Param Vora
Hello. Thank you for taking the question. So what I wanted to ask was. That despite solid numbers, the Inventory days. Remain 2, 277 days, which is considerably high. So could the management elaborate any specific Initiatives or strategies that have been implemented. To optimize these levels and you know, further enhance the working capital efficiency.
Sachin Gupta
One of the things major in the past you have to age. So aging is important to are inventory days. If you consider from the last quarter or the March quarter, yes, the inventory has reduced, but this is normal process. So their assignment days gets reduced after that and it builds up from September onwards.
Param Vora
Okay, so but still don’t you think. That 270 day, 277 days is high? Let’s not compare it with the previous year. But if you look on it on absolute terms.
Sachin Gupta
So normally PA requires an aging of.
Ashwani Kumar Arora
Six answer, you know, plus, minus. This is a normal, you know, you consider it normal.
Param Vora
Okay. Okay. Thank you.
Ashwani Kumar Arora
Thank you.
operator
Thank you. Sir, the next question is from the line of Rasin, an individual investor. Please go ahead.
Rashin
Hello. So I just wanted to inquire because in the last con call which was on January, you had mentioned that we would be getting a credit from the Supreme Court as the supreme Court had ruled in our favor. But I don’t think that amount of 190 crores or some credit is limited. Is there any guidance on when exactly would be received?
Ashwani Kumar Arora
We have got that now. We have got that money against banker.
Rashin
Okay. Last quarter that is there and we.
Sachin Gupta
Have a full amount that is sitting in my books. So it is. Yes, it is backed by Bangladesh. So we have taken a SDR.
Ashwani Kumar Arora
Now the it is in the High court for the final decision. So hopefully the money is there.
Rashin
Okay, got it, sir. Thank you. All the best.
operator
Thank you. Sir, the next question is from the line of Ishan.
Ashwani Kumar Arora
I hope you know you have got the answer. Hello.
Rashin
Yes. Hello.
operator
Yes. The next question is from the line of Ishant from Anshika Institutional Equities. Please go ahead.
Ishant
Hello. Am I audible?
operator
Yes sir. Please go ahead.
Ishant
So congratulations on a good set of numbers. Could you please share the current inventory level as of June 30th both the Paddy and rice so broken down by volumes as well as value.
operator
Yes sir. You’re audible.
Ishant
Hello and audible?
operator
Yes sir.
Ishant
So could you please share the current inventory level as of June 30 for both trading guys in volumes and value times. Hello? Hello. Hello.
operator
Yes sir, you are audible.
Ishant
Hello. Am I audible?
operator
Yes sir.
Ashwani Kumar Arora
Meet. Are you there?
Meet Jain
I’m there. I’m there.
Ishant
Hello? Hello. Am I audible?
operator
Yes sir. Please go ahead.
Ishant
So can you please share the current inventory? Hello.
operator
Ladies and gentlemen, the line for the management seems to have disconnected. Please hold while we reconnect. Ladies and gentlemen, the line for the management has been connected. Thank you. And over to you ma’. Am.
Ashwani Kumar Arora
So please continue with your question.
operator
Okay sir, the next question is from the line of Ishant. Please go ahead.
Ishant
Yeah. Hi. Congratulations.
Ashwani Kumar Arora
Thank you.
Ishant
So could you. Could you please share the current inventory level as a zone 30 for both paid and guide by volumes and revenue terms.
Sachin Gupta
So the revenue, the inventory in my books of pounds is 2 lakh 85 thousand tons of paddy at an average rate of 29 and 3 lakh tons of rice at an average rate of 51.
Ishant
Okay. And so with the monsoon progressing well, how do you see rice price trending in the second half of FY20?
Ashwani Kumar Arora
And we are expecting good crop and the expected opening price it depends on how the crop perform but we expect that Kishle Sal said oh it will be roughly higher by 8 to 10% average.
operator
Thank you sir. The next question is from the line of Vipul Kumar from Sumangal Investments. Please go ahead.
Vipulkumar
Hi. Thanks for the opportunity and congress for very good set of numbers. So my first question is why this RTH and RTC segment revenue has degrown although base is very small and at what level of annual sales this segment will break even at EBITDA level?
Sachin Gupta
Yes, this year what has happened in RTH and RTC segment there was discontinued. One of my. One of the products had discontinued in this category there was Dharma that we had launched two years back. So we discontinued this in the last quarter. Last year quarter so it had a revenue share so that would be lost. So otherwise everything is as per the plan and as per the target setup. And yes, this segment will break even in the EBITDA category once it crosses the 350crores mark and which we expect in three years two to three years.
Ashwani Kumar Arora
Time the ready to eat and ready to cook is growing in USA also we are done with the capacity. We are building new capacity. The plant will be operating in the next two, three months then that will start giving us next level of growth on this new product we have launched in India which is biryani rice. Now we have launched five curry rice cake so that we are getting promising result on that. Even on the rice cracker side, the snacking side, we are seeing good food initiative. So hopefully as to your question, in the next two years we will be on the break even in USA we are already making money on a beta level.
As far as RTH is concerned it is only the India where we are investing in rice cracker and you know this ready to cook or ready to eat segment we are trying to build up.
Vipulkumar
Okay, my second question. Why is our revenue from Middle east region is so low when the market size as per your presentation is so huge, 40,000 crores. So is there any culture issue or the product mix are different? So how should one look at this?
Ashwani Kumar Arora
I think that’s, that’s an opportunity for us. You know as explained earlier also we were focusing on the other market for the large three years. We have started focusing in India and our sorry Middle East. Although you know that’s a very mature market. Very, very high entry barrier. But we will deliver as per the guidance given in five years. The Saudi is also doing well. But very mature, very high entry barrier market.
Vipulkumar
So what are the entry barriers means? Can you elaborate please a little bit?
Ashwani Kumar Arora
Like any consumer business, the entry barriers are the brand and the distribution. That’s what you know, the entry barriers are as per the guidance given. We have strategies to grow our business but that will be a slow burn.
Vipulkumar
Yeah, okay. And sir, I would drop you a mail but I want quantity and value of all regions. I ask this in every call. Yeah, yeah. Okay sir, thank you and all the best.
Ashwani Kumar Arora
Thank you so much.
operator
Thank you sir. Ladies and gentlemen, to ask a question please press char and one now. Participants who wish to ask questions may please press char and one at this time. The next question is from the line of Ketan Cheddar and retail investor. Please go ahead.
Ketan Chheda
Hi. Thank you for the opportunity. My question is this 12124 crores of. The revenue that we have received in Basmati and specialty segment in this quarter. Could you break that into how much is basmati and how much is non basmati piece.
Ashwani Kumar Arora
Can you repeat question?
Ketan Chheda
Yeah, I’m saying 21, 24 crores of. Revenue that we have clocked in this quarter in Basmati and specialty. Specialty rice category. How much is basmati and how much is non basmati?
Ashwani Kumar Arora
First of all, you know, so let me tell you what specialty rice is. One is Basmati, other is Jasmine. And you know that’s, that’s mainly through variety.
Sachin Gupta
And, and 85% of my overall revenue. 85% revenue. And yes, there is certain regional prices that we sell in the India, India and as well as the exports. So overall revenue size in the Pasmati. In the Pasmati and specialty category 85% is Pasmati, 15% is the other.
Ketan Chheda
Sorry to interrupt. 85% of 2124 number, right?
Sachin Gupta
Yes. Yes.
Ketan Chheda
Okay. Okay. Yes sir, please go ahead. Sir, you’re saying something.
Ashwani Kumar Arora
I’m saying, you know, mainly basmati followed by jasmine and followed by Indian regional rice.
Ketan Chheda
Right. And one more clarification. So whatever basmati we sell, everything is sourced from India or do we source. It from some other geographies as well outside India, specifically for PAs.
Ashwani Kumar Arora
Mainly India, some sometime, you know, from Pakistan. But this, this is mainly. Okay. Our new operations, you know they source from Pakistan but that’s. It depends on year to year. But this year is only less than 10%.
Ketan Chheda
Sure, sure. Thank you. Thank you for that. And the other question I have is. In terms of the future growth plans that we have shared in the presentation, I see that, you know you mentioned. The EBITDA will grow at a CAGR of 16% whereas the pad will grow. At a CAGR of 21%. So could you help me understand what. Will change between EBITDA and PAD that. Will help us grow a PAD faster than the ebitda.
Sachin Gupta
So yes, it is normal. Whatever the beta grows, the PAD normally grows at a faster pace if any country, any kind of industry, anyone. So yes, there are the interest and the depreciation component which doesn’t grow in the same proportion as the growth in the EBITDA percentage. So our pad, what we are expecting is a growth then greater growth than what we are expecting in the. But more to add to it. But we are focusing more on the ROCE. The ROCE that we project to have a 23% plus in a going forward year. So from a 21 levels we expect this to grow to a 23 plus level.
Ketan Chheda
Okay, thank you so much. Those are my questions. Wish you all the best.
Ashwani Kumar Arora
Thank you.
operator
Thank you sir. The next question is from the line of Pradumna Chaudhary from JM Financial family office. Please go ahead.
Pradyumna Choudhary
Yeah, hi. Just a couple of follow ups. One is you said that the consolidated normalized growth adjusting for the Golden Star acquisition was 17. But if I just look at your numbers, I think Golden Star in this quarter would have been around 300 crores. Right.
Sachin Gupta
So but as Monica stated, it got consolidated in 31 May. So after that the revenue was getting consolidated before it. Yes, that one month, only one month phase was there.
Pradyumna Choudhary
Understood. And second, I’m still not able to. Wrap my head around this. Europe 57% growth. Right? Because Europe would be what almost must be around 400. 450 crores quarterly revenue rate. And even if 60 crores has come from UK facility, even then that 57% adjusted for the 60 crores also looks Like a very high number.
Sachin Gupta
So yes, the European sales in this quarter, if you include the Europe the UK as well, that was 376 crores in the rice and the specialty segment. Last year it was 239 crores. The incremental UK sales this year contributed almost 80 crores. So if we eliminate, if we normalize that Also there’s a 24% revenue growth that came in the European operations this year.
Pradyumna Choudhary
And what’s driving this growth?
Ashwani Kumar Arora
Both, you know, it’s a mix of which is growing. Secondly, we have done little bit, you know the B2B same and third is we call it, you know the label we pack for the stores. So all three level you know, has been led.
Pradyumna Choudhary
All right, all right. Like. But it’s not coming more from a private label. Right. It’s coming majorly from Brandit.
Ashwani Kumar Arora
All three revenue drivers brand the kind of B2B sale and which we do private label for the stores. So Tino May, you know, partly this growth is driven by.
Pradyumna Choudhary
Understood. And another question was on the organic site Vivat Save it discontinued.
Ashwani Kumar Arora
It is not on organic side. So it was under, you know, the value added thing. So we launched fortified rice in India which are not much appreciated by the consumer. Not responsible. We discontinued.
Pradyumna Choudhary
All right. Because it seems like it was contributing quite significantly.
Ashwani Kumar Arora
Yeah, we pushed it very strongly. We invested money, we put in our whole distribution. But it has not worked as per our expectation.
Pradyumna Choudhary
Understood. Thank you. Thank you. One all the best.
operator
Thank you sir. This was the last question for the day. I now hand the conference over to the Monica ma’ am for closing comments.
Monika Chawla Jaggia
Thank you on behalf of the management of Healthy Foods. Thank you all for joining us on our earnings conference call today. We hope we have been able to. Address majority of your queries. The nature of our business and the operating segments of the geographic market don’t. Generate highly dynamic partner variation. So making semiannual reporting cycle more aligned. With our operational rhythm and better position to deliver the meaningful comprehensive insight to our investors. So Thus starting from Q2 financial year. 26 we will conduct our earnings call semi annually. In the meanwhile, you may reach out to me or our investor relations partner EY for any further queries that you. May have and they would connect with you offline. We now close the call. Thank you all.
Ashwani Kumar Arora
Thank you.
operator
Thank you on behalf of Motilal OSWAL Financial Services Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.