LT Foods Ltd (NSE: LTFOODS) Q3 2025 Earnings Call dated Jan. 28, 2025
Corporate Participants:
Monika Chawla Jaggia — Chief Corporate Development Officer
Ashwani Kumar Arora — Managing Director and Chief Executive Officer
Sachin Gupta — Chief Financial Officer
Analysts:
Meet Jain — Analyst
Joy Lin — Analyst
Nandita Rajhansa — Analyst
Damodaran Kutty — Analyst
Hitesh Goel — Analyst
Sakshi Chhabra — Analyst
Shloka Kapadia — Analyst
Tom Kadavil — Analyst
Yash Mehta — Analyst
Vipul Kumar Anupchand Shah — Analyst
Anshul Jain — Analyst
Resham Jain — Analyst
Prushti Patel — Analyst
Arjun Balakrishnan — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to LD Foods Q3FY25 earnings conference call hosted by Motilal Othwaral Financial Services Ltd. [Operator Instructions]
I now hand the conference over to Mr. Meet Jain from Motilal Oswal Financial Services Ltd. Thank you. And over to you sir.
Meet Jain — Analyst
Thank you. Good evening everyone and a Warm welcome to LT Foods 3 QFY25 post results earning call hosted by Motila Loswal Financial Services Ltd. On the call today we have management team being represented by Mr. Ashwani Kumar Arora, M.D. and CEO Mr. Sachin Gupta, CFO and Ms. Monika Chawla Jaggia Chief Corporate Development Officer. We’ll begin the call with key thoughts from the management team. Thereafter we will open the floor for Q and A session. I would now like to request the management 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
Good evening everyone and thank you for joining us on our Q3 and 9 months financial year 25 earnings conference call. Before we start with the key highlights of the quarter and the nine months ended 31 December 2024, I would like to highlight that certain statements made or discussed on the conference call today are forward looking. Disclaimer to this effect has been included in the results presentation shared with you earlier. Result documents are available on the company’s website and have also been uploaded on the Stock Exchange. A transcript of this call will also be made available on the Investors section of the Company’s website.
I would like to begin by taking you through the Key Highlights of Quarter 3 Financial Year 25Our consolidated revenue for Quarter 3 is up by 17% to Rupees 2,288 crore versus Rupees 1,950 crores last year on account of increased sales from all our segments. Gross profit grew by 22% and gross profit margin is 125bps higher from 32.6% to 33.9% attributable to favorable input prices. EBITDA for quarter three was up by 7% year on year basis at Rupees 263 crores and EBITDA margin stood at 11.5%. PBT is up by 3% from Rupees 211 crore last year to INR217 crores in quarter three. PAC for the quarter decreased by 4.7% to 145 crores compared to 153 crores in the previous year. EPS decreased by 5% to 4.13 versus 4.35 in the quarter three. Cash profit for the quarter was higher by 1% to Rupees 196 crore.
Now coming to nine months performance. Our consolidated revenue for the nine months increased by 14% to 6510 crores versus 5730 crores in the nine months financial year 24. This is on account of the increased sales from the Basmati and other specialty rise segment as price segment as well as an increase in the organic segment. Gross profit stood at rupees 2202 crores and the gross profit margin expanded by 145bps from 32.4% to 33.8%. EBITDA increased by 7% to 777 crores compared to 726 crores last year. EBITDA margin was 80bps lower at 11.9%. The profit after tax is higher by 1% to rupees 451 crores versus 447 crores last year. The earnings per share was flat year on year that is to rupees 12.81. Cash profit increased by 5% to 584 crores versus 554 crores last year. Moving on to the key ratios of our balance sheet, the return on the capital employed stood at 19.5% in nine months financial year 25 compared to 20.3% in nine months financial year 24. Return on equity stood at 16.9% for nine months financial year 25 compared to 18.7% in the nine months financial year 20.
The debt to equity ratio maintained at 0.3 and the debt to EBITDA ratio at 1.2 in the nine months financial year 25 compared to 1.3 in nine months financial year 24. Current ratio remains steady year on year at 1.9. And our net working capital days stands at 227 days versus 225 days in nine months financial year 24.
I now hand over to Mr. Ashmi Era for his comments and we can open the floor for the question answer. Thank you.
Ashwani Kumar Arora — Managing Director and Chief Executive Officer
Yeah, good evening everyone. So we can, you know, open the floor for questions.
Operator
So shall we open up for questions?
Ashwani Kumar Arora — Managing Director and Chief Executive Officer
Yes, please.
Questions and Answers:
Operator
Thank you. [Operator Instructions] The first question is from the line of Joy Lin [Phonetic] from Amiral Gestion. Please go ahead.
Joy Lin
Hello. Am I audible?
Operator
Yes, sir. Please go ahead.
Joy Lin
Yes, okay. Hi, I have a few questions. First one, would you quantify the impact of higher freight on this quarter? Because I think when I just glancing through the SGA, it seems to be 550 basis points higher. Q on Q. And I understand that we are still facing elevated freight prices that we have yet to pass on to our customers. So maybe just on that one first, please.
Ashwani Kumar Arora
So as regarding the freight cost, the logistic cost as a percentage to revenue in this quarter itself, if we compare on the year, on year basis, this has increased by 2.3%. And if we compare it with the immediate preceding quarter, it is increased by 0.5%. And the current logistic cost for this quarter is 7.1%.
Joy Lin
Okay, so any views on that? Is it coming down in the quarter? 4. Are we going to pass it on to our customers all together on the fear research charges?
Ashwani Kumar Arora
Yeah. So next year we are expecting the freight rate to come down. So we are in conversation with the freight companies, the Ocean Freight company. And we are positive that next year, in the next quarter, you know, will not have kind of, you know, positive impact on this. So the freight cost will remain same but next year we are seeing it softer.
Joy Lin
Okay, sure, sure. Because I think the previous understanding was that quarter four is when the freight prices will normalize as we’re expecting it to come down.
Ashwani Kumar Arora
Yeah. Because we already have inventory in the system with the higher freight cost. So even if it changes now, it will have impact in the next financial year. First quarter.
Joy Lin
Okay. No, that’s very clear. I guess. Next question is on the associates earnings. So I think this probably relates mostly to Golden Star. I think it came in at around 40 million 4 crores this quarter which obviously has declined quite significantly from last year’s 117 and also last quarter’s 88 million rupee. So any colors on this? You know what’s happening to Golden Star.
Ashwani Kumar Arora
So again you know the profit has come down because of the, you know, higher the steamer freight from Thailand to west coast. So that’s the main impact. So there is a no decrease in price or in the raw material cost has not increased. So purely impact of freight cost.
Joy Lin
Okay, got it. I will go back to the queue and for later on if there’s more time. Thank you so much.
Operator
Thank you. We’ll move on to the next question that is on the line of Nandita from Marcellus Investment Managers. Please go ahead.
Nandita Rajhansa
Hi Seniorora sir. Thank you so much for the opportunity. So actually I had a couple of questions. The first one is that it says on the website that of the exchange that Agro Private limited in that which is a wholly owned subsidy you have gained taken up 4% stake. So can you please clarify how is this done and why is the 4% state taken in a wholly owned subsidiary. And secondly in the other expenses which rose to 17% of revenues from 14.5% of the revenues last year, it was just generally freight which contributed largely to this. Or was there any other cost item which also led to the rise in other expenses.
Ashwani Kumar Arora
Sachin will take up this question.
Sachin Gupta
So as regarding the other expenses, last year it was 14%. This year it is 16.3 on a 909 basis. And this increase in the expense is mainly attributed to the logistic cost. The logistic cost has increased on the nine year basis by 2%. So this is the major increase in the other expenses. As regarding the Ragnath Agro industries. Ragnath Agro Industries Initially company had 96% holding. So the 4% holding was with one of its subsidiary Tawat Foods. Now Ragnar, now LT Foods is requiring that 4% share also. Now it will be hundred percent subsidiary of LT hope I have answered your question.
Nandita Rajhansa
Yes. Thank you so much.
Ashwani Kumar Arora
And. And we are in the process of, you know, merging this also. So Ragnath Agro will get merged in LT Food.
Nandita Rajhansa
Okay. So it won’t be a volume subsidiary then.
Ashwani Kumar Arora
We are in the process of doing that. Yeah. So it will be, you know, get merged with LT Food.
Sachin Gupta
Yes. So we are in the process of fast track. Those are fast track merger scheme.
Nandita Rajhansa
Understood. Thank you so much.
Operator
Thank you. A reminder to the participants. Anyone wishing to ask a question may please press star in one. The next question is from the line of Damodaran Kutty from Acuitas Capital. Please go ahead.
Damodaran Kutty
Yeah. Thank you for the opportunity and congratulations on a decent set of numbers. So thank you. Yeah. So my question was on strategy on pricing. So given that Basmati prices have dropped this year what will be our strategy on pricing? Will we be focusing on holding prices and improving margins or will we pass on the benefit of the lower prices to customers and focus on improving our market share and what implications does it have for FY26 margin? So yeah, just some color on that will be helpful. That’s question number one. Thank you.
Ashwani Kumar Arora
Dumod. So we are evaluating definitely the prices of input cost or raw material cost has come down as compared to last year. So we are evaluating our pricing strategy and seeing the competitive landscape. Hopefully we will be ready with our complete pricing strategy by the, you know, end of February. But definitely I think some somehow, you know, we had to take some price decrease. Yeah. How much you know, we are evaluating.
Damodaran Kutty
Sure, sir. And given that I mean you expect this impact of freight cost to go away next year you can expect that that will improve your margins by around 100 basis points. I mean because you did around 12% margins and current year margins have come to around 11.3% or.
Ashwani Kumar Arora
So definitely in the second quarter of next year we are expecting the margin to improve by the September result.
Damodaran Kutty
Yeah sure. Okay that will.
Ashwani Kumar Arora
Yeah, yeah yeah that will have you know positive impact of the raw material and the freight cost.
Damodaran Kutty
Okay, got it. And just one more question on CapEx. So I mean if I’m correct you are guided for around 200 crores of capex this year that included your UK subsidiary and the RPH facility in. So any update on I mean what’s the number for FY? Any update on the FY25 number and any plans of Capex for the next year.
Ashwani Kumar Arora
On the Capex side You know next year will be almost in the range of you know 150 to 200 but as far as this year Capex is concerned our UK facilities up, you know we are doing the sales on the USA the facility will be up in the. In the month of May next year. Yeah.
Damodaran Kutty
Okay so the Capex for that has already been. I mean that’s already being incurred or will that also mean come in FY26.
Ashwani Kumar Arora
So roughly Sachin can give you the number 160.
Sachin Gupta
So it’s the current year in the 69 months we have incurred a 164 crores of capex. Okay until now till now we have incurred and as soon as you told the remaining will be done and the next year US.
Ashwani Kumar Arora
US Capex is little bit you know in the process so will be spent.
Damodaran Kutty
Sure. Okay. During the this quarter. Okay. Okay thanks. That’s it from my side.
Operator
Thank you. The next question is from the line of Hitesh Goel from Riddhish Advisors. Please go ahead.
Hitesh Goel
Thanks for taking my question sir couple of questions. First is on the can you give us the revenue growth in third quarter for India and in exports across US Europe and Middle east. Just for the third quarter because you generally get nine month it if you can give it for this quarter please
Ashwani Kumar Arora
We will get back to you but on nine month I think we have done in the presentation Essay India is 8% growth and US is 17% growth. Yeah. We will get back to on this number.
Sachin Gupta
You know so if, if you the India and international total one the the value growth is India is 12% and in international it is 11% on the quarter on quarter basis.
Hitesh Goel
And in international how much is US has grown faster than Middle East? Because Middle east growth seems to be quite low.
Ashwani Kumar Arora
No, Middle east has grown by 37% on nine month basis. Although the base is small. But that’s the fastest growing territory for us.
Hitesh Goel
Okay. And sir, my second question is on you know, RM purchase. Right. So basically we are seeing that benefit of the lower prices of input cost. Have we started see because your gross margins are improving that is because of procurement cost or we’ll see that benefit only next year. Full benefit of that. And secondly on freight costs are most of the companies are already saying that freight cost is started to come down in third quarter itself and they’re expecting a benefit on fourth quarter. So why are we saying that the benefit will only start coming in second quarter of FY26.
Ashwani Kumar Arora
So you know, as far as you know, Europe and America these are the two sector which has got impacted. So America we have not seen you know, coming down even you know in this quarter. Europe has come down but there is always inventory in transit, you know. So that’s why we are saying that you know the. There will be a little bit impact in quarter four but the bigger impact will we will see in the first quarter of next financial year.
Hitesh Goel
So going back current times, how much do you think you know this freight rate as a percent of sales will come down. If you can give some guidance on that. Will we revert back to that 2% increase that we have seen? We will see that full benefit coming through. Only half of that will get realized in FY26. How should we see it?
Ashwani Kumar Arora
I will say half, half will come in.
Hitesh Goel
And procurement cost benefits some you will. You didn’t answer that. Procurement cost benefits will come through next year only or will start coming in fourth quarter itself.
Ashwani Kumar Arora
We sell you know the age product. So it will come, it will start coming in the, you know, second quarter of next year.
Hitesh Goel
And sir, just a final question. So in procurement cost in India, I believe that this will be passed on, right. Because it’s a fairly competitive space in export like us and all. Can you retain that benefit?
Ashwani Kumar Arora
We are living in a competitive landscape. So India for sure in the food service we have to immediately pass on that benefit. But in consumer space, you can have a better margin. I cannot disclose everything here but as I said, you know, in the second quarter we are expecting, you know, the better margin.
Hitesh Goel
Okay, sir, no problem. Thank you.
Operator
Thank you. The next question is in the line of meet Jain from ey. Please go ahead.
Meet Jain
Hi. So my question is regarding the organic food segment. We saw 26% kind of growth this quarter as compared to earlier in the higher 30, 40%. So just want to get some flavor on the growth trajectory of the organic segment.
Ashwani Kumar Arora
Yeah, organic this year we have grown around 37%. But next coming year we are expecting that the growth will be in the range of 10% double digit growth.
Meet Jain
So any update on the Uganda facility on this one?
Ashwani Kumar Arora
Yeah, Uganda is a small part of our business. So basically, you know, the soya business, you know, so we do both from India as well as from Uganda. That is doing good, you know.
Meet Jain
Okay, okay. And lastly on the domestic growth rate, so just want to get some flavor on the domestic demand environment and the pricing environment for basmati rise. And apart from that, in terms of international, as you highlighted key Middle east has been growing at a very strong pace on a low base and international also is growing overall by 11%. So can you show some light on the domestic business like the how has the growth has been and what challenges are we facing in this business right now?
Ashwani Kumar Arora
So domestic business you are asking about, you know the specialty rice Basmatina.
Meet Jain
Yes, and the Basmati rice.
Ashwani Kumar Arora
So on, on the nine months we have grown by 8%. But now, you know the, you know, in India especially, you know, the demand looks, you know, slow but international we are, you know, doing the double digit growth in specialty rice.
Meet Jain
Thank you sir. I’ll get back in the next one.
Operator
Thank you. The next question is on the line of Sakshi Chhabra from Swan Investments. Please go ahead.
Sakshi Chhabra
Yeah, hello. So my question was regarding UK and Saudi Arabia. So what sort of revenue would you be expecting in FY26 from these two facilities.
Ashwani Kumar Arora
Will be next year you are asking?
Sakshi Chhabra
Yes, sir, next year.
Ashwani Kumar Arora
145 million euros we are expecting for in the FY20, 25, 26.
Sakshi Chhabra
Sorry.
Ashwani Kumar Arora
145 million euros.
Sakshi Chhabra
Okay. That is from the UK as well as. Okay. And from Saudi Arabia.
Ashwani Kumar Arora
Saudi, you know, we will be doing roughly, you know, so we have for the next five year we have made a plan of towing Saudi ARIYAL, you know, 435 million. So you know, we are, we are what do you call as, you know, setting the whole thing in Saudi Arabia. So next year we are 20,000 ton. We have a plan to do that here.
Sakshi Chhabra
Okay, all right. And the capex that is being done in Saudi Arabia. So what exactly is that going towards?
Ashwani Kumar Arora
So we have not done any capex till now. So the plan is in the future, in the next five year to do the capex which will be, you know, in the kind of convenience and convenience platform, basically.
Sakshi Chhabra
Okay, all right, thank you.
Ashwani Kumar Arora
Yeah, yeah. And some packaging facility.
Sakshi Chhabra
Okay.
Operator
Thank you. The next question is from the line Shloka Kapadia from Carnelian Capital. Please go ahead.
Shloka Kapadia
Hi, thank you for the opportunity. I wanted to ask why is the other income come down QoQ?
Sachin Gupta
The income basically has come down because of the exchange. Exchange that has been booked in the income from operation. That is basically on accounting. Accounting. In the accounting treatment it has been reclassified. Otherwise the other things have remained intact.
Shloka Kapadia
Okay, and can you also give me the geographical mix for the revenue for this quarter?
Ashwani Kumar Arora
So in the Basmati and the specialty segment, India contributed 34% and the America contributed 39%. Europe UK 15% and the rest of the world it was 12%. Can.
Shloka Kapadia
In terms of total sales.
Ashwani Kumar Arora
In terms of Sunich you are talking about.
Shloka Kapadia
In terms of total revenue, can you give me a mix of how much is Europe, India, North America and rest of the world contributed?
Ashwani Kumar Arora
In terms of total revenue then India is contributing 30%. America 40%. The rest of the world it is same 12%. And the remaining is UK Europe, that is 15, 18%.
Shloka Kapadia
Okay, thank you.
Operator
Thank you. The next question is from the line of Tom Kadavil from Geojit Financial Services. Please go ahead.
Tom Kadavil
Hello. Am I audible?
Ashwani Kumar Arora
Yes. Yeah.
Tom Kadavil
Yeah. I would like to know the Basmati rice volume and average realization.
Ashwani Kumar Arora
So this nine months we have made a revenue sales of 5 lakh 25 thousand tons with an average realization of 103 rupees.
Tom Kadavil
Okay. And for the quarter?
Sachin Gupta
For the quarter that is 1 lakh 85 thousand tons and average rate of 105.
Tom Kadavil
Okay. And the international and India volumes, do we have a separate allocation.
Sachin Gupta
That you can raise to our IR team and they will provide.
Tom Kadavil
Okay. Okay. Okay. And what about the procurement cost of rise average?
Sachin Gupta
So the average procurement rate this year, as Ashwiniji has told it, has reduced by 10 to 15%. And an average procurement rate of the padi is. It is attitude based.
Tom Kadavil
Okay. Okay. Okay. Thank you. Thank you.
Operator
Thank you. A reminder to the participants. Anyone wishing to ask a question may please press star in one. The next question is in the line of Yash Mehta from Art Ventures. Please go ahead.
Yash Mehta
Yeah. Am I audible?
Ashwani Kumar Arora
Yes. Yes.
Yash Mehta
Yeah. Sir, I just wanted to know what is the kind of volume growth do you expect in Q4 and in FY26?
Sachin Gupta
We will be, you know, the overall growth for full year we are expecting around 12%. 12% year. Yeah.
Yash Mehta
For FY26, right?
Sachin Gupta
Yeah, yeah, yeah, yeah. Full year basis.
Yash Mehta
Okay. And for Q4, FY25.
Ashwani Kumar Arora
So. So we are. We will be maintaining that growth rate. What we have achieved during this and the overall year growth will be in the range of 12 to 13%.
Yash Mehta
Okay, thank you very much.
Operator
Thank you. The next question is in the line of Vipul Kumar Anupchand Shah from Sumangal Investments. Please go ahead.
Vipul Kumar Anupchand Shah
Thanks for the opportunity. Sir, can you give the market share in India what was our market share in Basmati segment last quarter and what was the same last year? Same quarter.
Ashwani Kumar Arora
So we are holding now 28% market share in India and last year it was 30%.
Vipul Kumar Anupchand Shah
So we have lost 2% market share. Right?
Ashwani Kumar Arora
Yeah. Because you know we have some segment we have left because of the non profitability and but you know overall the growth is 8%.
Vipul Kumar Anupchand Shah
So we have deliberately vacated the market share.
Sachin Gupta
Yeah, yeah, maybe. You know we were having some challenges in terms of margin and all these things so that we have left.
Vipul Kumar Anupchand Shah
And sir, my second question relates to organic food. So once we reach Revenue of 1000 crores what type of margin we can expect from that business? Because that business should naturally have much higher margin.
Ashwani Kumar Arora
Yes. So you know the major business of food business will come from USA this year we have done 100 crore rupees of business there and we have set up you know, the new facility. So the demand is more than 15%. You know, year on year we are growing. So this we are thinking both organic and inorganic. So organically we will build this business in the next five year around you know, 500 crore. The next 500 crore. You know we are. If it is 1000 crores what will be the profit? Oh I’m sorry, I misunderstood the question. You know, no problem sir.
Vipul Kumar Anupchand Shah
So yeah, so my question was what type of margin improvement we can expect once we reach thousand crore revenue in the organic segment.
Sachin Gupta
So our target in the organic segment is to have this, the EBITDA margin in the range of 14 plus. So that’s what we are targeting at. With the growth in the, in the revenue at a 10 to 12% in the revenue growth. So that’s our target and currently it is, we have increased our margin so it is 11% plus this year.
Vipul Kumar Anupchand Shah
And can you give the revenue and tonnage for geography wise for this quarter and for nine months please so that you can.
Ashwani Kumar Arora
You can ask the question to IRP and they will revert.
Vipul Kumar Anupchand Shah
So previously this was always a part of our presentation but somehow it has been discontinued. So I would suggest that if it is not competitively harmful then you should make it part of your presentation. That is my suggestion.
Ashwani Kumar Arora
Thank you. We will consult internally and.
Vipul Kumar Anupchand Shah
Yeah, yeah. So whom should I contact for this?
Monika Chawla Jaggia
You can reach out to us. Monica, you can send an email to either to IR or to myself like Monica, JT Group.
Vipul Kumar Anupchand Shah
And so last question. Have you received any insurance claim or still no.
Ashwani Kumar Arora
You know, I think the last. The Supreme Court has given it the final verdict. So by 10th of March we are expecting the money should come.
Vipul Kumar Anupchand Shah
Okay sir, thank you and all the best.
Ashwani Kumar Arora
Thank you sir. Thank you so much.
Operator
Thank you. The next question is in the line of Anshul Jain [Phonetic] from Taigha Consultant Private Limited. Please go ahead.
Anshul Jain
Thank you for taking my question. I actually have three questions. One is on the margin front, can you give some broad sense on the EBITDA margin for the domestic business of basmati rice and the export business?
Sachin Gupta
So our India business, the total EBITDA of my basmati ratio specialty is 12.3%. So internationally we are at a higher margin by 2%.
Anshul Jain
Got it. And my second question is actually interlinked that what would be the realization of the domestic and the export market?
Sachin Gupta
My domestic realization is at 64 rupees and my international is 144.
Anshul Jain
Got it. And lastly, can you give some ballpark sense on the tonnage in terms of very broad sense in terms of the distribution between how domestic tonnage is and the export tonnage is.
Ashwani Kumar Arora
So half, half. So we do around 600,000 ton. So half we sell in India and half we export here.
Anshul Jain
Okay. And the 600, 600,000 ton would be all basmati that you are referring to, right?
Ashwani Kumar Arora
And this is from India, but we import from Pakistan also and you know, we import from Jasmine from I also. So I am tech only telling you what we do from India.
Anshul Jain
Got it, Got it. Okay. And lastly, could you explain why there was some market share that you mentioned previously in one of your questions, some market share sense that you gave on decline or intentional decline?
Ashwani Kumar Arora
I said, you know, we, you know, there is a price point which, you know, price to consumer is 50 rupees. So that is very, very competitive. So we as a strategy we thought that, you know, on that price point we will make money and not the market share. But as far as our premium segment is concerned, you know, we have improved our market share and we are growing also.
Anshul Jain
Understood. Okay, thank you. That’s all I have. Thank you.
Operator
Thank you. The next question is from the line of Joy Lin from Amiral Gestion. Please go ahead.
Joy Lin
Okay. Hi. Thank you so much for the follow up opportunity. So. So I think last quarter there was a comment on working capital where we are actually stocking our inventory on anticipation of higher demand, especially in the US and India. So maybe on that has it panned out according to our expectations? So that’s the first part of the question. And the second part is, you know, are we expecting a working capital to normalize in the coming quarters? Because as I’m looking at the presentation it says that capital days at 227. So is it going to go down maybe in the next one or two quarters as this demand opportunity kind of play out? Thank you.
Sachin Gupta
Excuse me, let me understand the question from my colleague.
Ashwani Kumar Arora
Let me answer. Yeah, yeah. So basically as you know, this is the peak season, the peak, this is the procurement season and the procurement happens in the month of October to December. So our working capital, if you compare it with the March itself, the March will be much lower. The last year December, the working capital days were 225. This year it is 227. So more or less they have remained stable. So we are eyeing that. And we will maintain our working capital days as we are in the march. They won’t be getting increased though. Yes, we have additional procured because of our. Our demand what we anticipate in the next year still we will be maintaining that working capital days and we’ll be maintaining our return on capital.
Joy Lin
Okay, no, no, maybe more specifically eventually days are 268 for the nine months of 2025, whereas it was 248 last year. So obviously there’s be jump off 20 days. Are we expecting inventory days to be structurally higher going forward? So yes, but we will still be maintaining that working capital day.
Sachin Gupta
So yes, the inventory days have moved by 20 days, but the working capital days we will be maintaining and that inventory which we are holding, that is basically because of the which we are getting the increased demand, expected demand in the globally which we are having.
Joy Lin
Okay, thank you so much.
Operator
Joylyn, are you done with the question?
Joy Lin
I’m done. Thank you so much.
Operator
Thank you. Thank you. The next question is on the line of Resham Jain from DSP Asset Managers. Please go ahead.
Resham Jain
Yeah. Hi, good evening team. So I have few questions. So first one is in the last two calls we mentioned that the freight cost has been little elevated. So is there any update there? How is the freight cost moving now and how are you booked? Because typically I think you book in advance typically for some portion of your shipments. So any update on the freight costs?
Sachin Gupta
So reshum, you know, we do a contract but the contract apply in the next financial year. As far as US sector is concerned, you know, the freight rate has not, you know, came down to the last level which was the bo bottom one on Europe sector. You know, the freight has started, you know, softening and as I said just now that the impact will come in the first quarter of next financial year. But definitely, you know, Europe has started softening freight.
Resham Jain
So what is that quantum out of the total kind of freight cost you have how much reduction can happen because of this Europe fall?
Ashwani Kumar Arora
So the last year, you know the 5% was the logistic cost and this year is 7.2. We are expecting it to come down to 6%.
Resham Jain
Okay. Okay. So the second question is on rupee depreciation. We have seen a very kind of steep movement in the currency in the last two, three months. I don’t know whether you’ve already commented in your initial remarks but we have a very large export business. So how are you seeing this export movement impacting us in any way positively negatively.
Ashwani Kumar Arora
Rupee depreciation is good for export and therefore nothing negative impact for us. So we are only covered to our policy and we are positive on that, you know. Okay, understood. So next year overall with freight cost coming down and currency also positive kind of movement. The margin which you did in FY24, close to 12.1% which has soften in this year, you expect this margin should normalize in 26. Yes, for sure. You know, that’s what we are expecting that financial year 26 will be better. So it will start reflecting in the quarter two of the next financial year.
Resham Jain
Understood. So last one is with respect to the profit from associate. Can you confirm if most of the profit from associate is coming from Golden Star?
Ashwani Kumar Arora
Yes, you’re right. Yeah.
Resham Jain
Because sir, what. What I’ve seen is that the profit from associate has been gradually coming down from last five, six quarters. It was close to 11 odd crores last year. We touched almost 50 crores which was just 4 crore in this quarter. So is there any one off there or any other kind of pressure in that business?
Sachin Gupta
So actually you know that business is growing 20%. The Golden Star business. And the only impact, you know was the steamer freight. And the highest impact, you know has happened from Thai to you know, the west coast. So but you know, the business is doing extremely very well. Growing more than 20%. What you call it the GP and you know all things is intact. So it’s only the freight has impacted.
Resham Jain
And similar to the India freight.
Ashwani Kumar Arora
You have asked the question. The Golden Star when we bought that business was third, third largest brand of Jasmine. Now this year it has become the number one selling Jasmine price brand in America.
Resham Jain
Yeah, congratulations on that. Just to complete this margin part in Golden Star, the freight cost similar to what you mentioned from Q1 onwards one should see reduction in freight cost. Is this true for Golden Star also or there the freight movement is going to behave differently than the India business?
Sachin Gupta
Risham, you know, the impact, you know we are, we are in the process of, you know, doing our freight contract. Hopefully you know, that will be, you know, I will say also be at the same level as India. Okay. So basically we will.
Resham Jain
We should see an improvement in Golden Star next year.
Ashwani Kumar Arora
That’s what we expect.
Resham Jain
Yeah. Okay. Sir, thank you so much and all the best.
Ashwani Kumar Arora
Thank you.
Operator
Thank you. Thank you. The next question is from the line of Prushti Patel [Phonetic] from Avantis Capital. Please go ahead.
Prushti Patel
Hello sir. Good evening. Thank you for this opportunity. So my question was. So as per your press release earlier, you can see that certain joint ventures and subsidiaries have dented our path. So can you shed some light on which ones are affected the same and why?
Sachin Gupta
So on the press release, one of the press release was relating to acquisition seven. So you’re saying we have opened the subsidiaries. That’s the question, right. We have opened up the subsidiaries. That you’re not that you’re asking.
Prushti Patel
No, I mean to ask. So which subsidiaries and joint ventures that are already existing which have dented up at this quarter. That is the Golden Star.
Sachin Gupta
The Golden Star jv, that is. That has dented our PAT number. So Golden Star in the US.
Prushti Patel
Okay. May I ask why.
Ashwani Kumar Arora
The freight.
Prushti Patel
Sorry.
Ashwani Kumar Arora
Freight part, the ocean freight has increased.
Prushti Patel
Okay, I had another question. So regarding the ready to heat and ready to cook segment. What according to you is going to drive our margin expansion? Given that we want to pivot into higher margin products rather than volume like growth. And since we also expect our revenue mix to be 10% from this segment by FY29.
Ashwani Kumar Arora
So you know, in the ready to eat business, the bigger business is coming from USA around 100 crores. So already, you know, the beta is positive, is around 7%. It’s the India which is, you know, not profitable at the moment, you know, but we are optimistic that you know, with the scale, you know, it will come on the break even in the next three, four years. But as far as us is concerned, you know, is a positive. It’s a 26% growing and we are setting up the new facility also.
Prushti Patel
Okay, sir. So by when do we expect it to be profitable in India in year 27?
Ashwani Kumar Arora
That’s what we have mentioned in the presentation also.
Prushti Patel
Okay, sir. Thank you. Thank you.
Operator
Thank you. Reminder to the participants, anyone wishing to ask a question may please press star in one. The next question is in the line of Arjun Balakrishnan [Phonetic], an individual investor. Please go ahead.
Arjun Balakrishnan
Hi. Thanks for the opportunity. Can you hear me well?
Ashwani Kumar Arora
Yes sir, very well.
Arjun Balakrishnan
Yeah, hi. Yeah, I’ve been following your company quite a long time. I mean I’ve been invested for the last five years. One question I have is that the margins have never expanded. So five years back in 2019, we’re still doing a bit of about 11% and now we are okay, you know, off and on we are about 12.5 and then we are back to the 11. Can we ever get to 14? I mean we’ve been promising 14% before years. I don’t see the roadmap and I’m quite worried about that. There’s significant volume growth. Agreed. Our revenues have doubled in the last five years. But you would expect any business to have operating leverage to kick in. But our business seems to be honestly struggling to have operating leverage kicking in. Any thoughts on that?
Ashwani Kumar Arora
So Arjun, actually the business is doing very well. I wanted to give you the exact number. So you know, in a four year time if you have seen, you know we have grown 17% that’s you know, very great and you know the profit has grown by 32% but you know, in the last four, five years because our business comes 60, 65% from international market. And you know the lot of disruption was coming, you know, in Covid time, you know, in the Red Sea. But the focus was to make sure that you know we, we have a great service level and you know we should capture the growth most and that’s what you know, we have opted the strategy and we are very successful in that. That’s why, you know we have grown 17%. Our profit has gone by 32%.
In terms of percentage, you know, we are positive that you know, hopefully, you know, there is nothing disruption comes, we will be there. In terms of the margin expectation on the EBITDA side also we have improved on the rupees 18%. So you know, as you know the raw material prices have come down and we are hopeful that you know, the EBITDA margin in terms of percentage will improve. But important is we are focusing on ROC and we have done extremely, very well on that. In terms of growth. In terms of improvement in Rossi. In terms of pat growth.
Arjun Balakrishnan
No, I think, I think I would totally agree that you have done quite well in the last four, five years. I’m just seeing the next line of growth I hope is on margin expansion, volume growth is.
Ashwani Kumar Arora
You were saying you’re sad.
Arjun Balakrishnan
I thought, you know, let me. Yeah, no, no. From a stock market perspective we have gained a lot here. I mean five years has been great returns. But I’m just from an investing point of view, I’m just looking at the numbers.
Ashwani Kumar Arora
We are very positive that you know, in terms of percentage also the EBITDA margin should improve and the focus is on the ROCE as you know, given advisory that you know we are targeting to improve to you know, above then 20%. We are already there but the internal target is to take it to and the range of 25 years. And last year.
Arjun Balakrishnan
Thanks for that. Fine. Yes, sorry, gone.
Sachin Gupta
So last year if you compare our different segments, the Baspathi in the specialty segment delivered a beta margin of 1339. And a half percent. It is basically the investments which we are making in the other segments, be it the RTC and rth. That is the dragging. Yes. This year the freight cost had impacted. Yes, that’s pulling me. Otherwise we are on the target of achieving that a beta margin. What we have given the guidance.
Ashwani Kumar Arora
Yeah, you’re right. I agree. I agree. That’s pulling it down. My final question is on the insurance claim. So if it kicks in, do you think that that will be recorded in the subsequent quarter because you had taken a hit? I mean then the claim. I remember when it was long back. Right. You had taken a portion of the claim as a hit on your bottom line. Will that get added on in the next quarter? You know, we are. We are quite hopeful that by the 10th of March the money will be received but the profit as recording or the profit now because still the case heard in the High court. So the money will be received. The recording of the profit. The profit because we have taken a hit. That will be recorded once the we have received the verdict from the High court.
Arjun Balakrishnan
Okay, thank you. That’s it from my side.
Ashwani Kumar Arora
Thank you. Thank you.
Operator
Thank you ladies and gentlemen. That was the last question. I now hand the conference over to the management for the closing comments.
Ashwani Kumar Arora
Thank you so much. If any question is answered or you have more question, you can reach us on investor relations desk. We will be happy to answer that and looking forward to hear you soon. Thank you.
Operator
[Operator Closing Remarks]