Manorama Industries Ltd (NSE: MANORAMA) Q4 2025 Earnings Call dated Apr. 28, 2025
Corporate Participants:
Ashish Saraf — Chairman & Managing Director
Ashok Jain — Whole Time Director & Chief Financial Officer
Ekta Soni — Associate Vice President – Investor Relations
Analysts:
Hiral Keniya — Call Moderator
Nitin Gosar — Analyst
Rohan Mehta — Analyst
Dikshi Jain — Analyst
Jainam Doshi — Analyst
Akhil Parekh — Analyst
Anmol Soni — Analyst
Pritesh Chheda — Analyst
Kushal Goenka — Analyst
Maitri Shah — Analyst
Jahnvi Shah — Analyst
Kaushik Mohan — Analyst
Mayur Parkeria — Analyst
Apoorv Singh — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Manorama Industries Limited Q4 & FY25 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 the conference call, please signal an operator by pressing the then 0 on your touch-tone phone. I now hand the conference over to Mr. Hiral Kenia from EY LLP. Thank you and over to you, sir.
Hiral Keniya — Call Moderator
Thank you, Steve. Good morning, everyone. On behalf of Manorama Industries Limited, I welcome you all to the company’s Q4 and FY25 conference call. To discuss the performance of the company and to answer your questions, we have with us the management team comprising of Mr. Ashish Saraf, Chairman and Managing Director, Mr. Ashok Jain, CFO, Ms. Ekta Soni, AVP Investor Relations and Mr. Deepak Sharma, Company Secretary.
Before we proceed with this call, I would like to draw your attention to the fact that today’s discussion may contain forward-looking statements that are subject to various risks, uncertainties and other factors which will be beyond management’s control. We kindly request you to bear in mind that there might be uncertainties when interpreting such statements. Please note that this conference is being recorded. We would now start the session with opening remarks from the management team. Afterwards, we will open the floor for an interactive Q&A session.
I would now hand over the conference over to Mr. Ashish Saraf for his opening remarks. Thank you and over to you sir.
Ashish Saraf — Chairman & Managing Director
Thanks, Hiralji. I heartily welcome everyone to Velan Visions Q4 and Financial Year 25 Earnings Concall. We continue to display robust growth momentum in the operational performance along with profitability during Q4 and Financial Year 25. We have achieved the financial guidance for FY25 by recording revenues of INR771 crores, thereby registering a strong growth of 69% year on year. This was led by strong market demand from a diverse range of specialty butters and fats and with economies of scale, coupled with higher volumes led by commercialization of a new fractionation facility.
As global awareness of environmental issues and responsible consumption rises, industries are pursuing sustainable alternatives to conventional practices. The specialty butter sector is vital for luxury chocolates, confectionery, and personal care and cosmetic industries worldwide. With an increasing societal focus on eco-friendly and ethically sourced products, the demand for sustainable solutions in this niche market is growing rapidly and significantly worldwide. We leverage our capabilities to meet the rising global demand by providing customized solutions for our esteemed partners in the food and personal care industry worldwide.
Our integrated production capacities backed by various domestic and international certifications ensures consistent high quality that meets the strictest quality and environmental industry standards. Our research and development team has made notable progress in extraction technology and broadened our product range. We have developed new products during Financial Year 25, which includes all-round filling fats, vegetable filling fats, water cream filling fats, frozen dessert applications and premium filling fats for new customers along with tapping new geographies. Additionally, pursuing industry leadership, we have established strategic global subsidiaries in West Africa, the UAE and Brazil for strengthening our global market presence. We continue to strengthen our leadership status in India with the commercialization of the 25,000 tons new fractionation capacity in the beginning of Q2, Financial at 25, taking the company’s overall fractionation capacity to 40,000 tons per annum.
Highlighting our fractionation capacity utilization during the year, the existing 15,000 tons fractionation facility capacity utilization stood approximately 800%, whereas the 25,000 tons new fractionation units capacity utilization for the full year stood around approximately 40 to 50%. Combined capacity utilization stood approximately 62.5% fulfilled for full year 25. Going ahead, the combined capacity utilization for financial year 26 is projected at nearly approximately 75 to 85%. We anticipate achieving greater operational efficiencies and cost optimization through improved utilization of a new fractionation capacity in financial year 26. We are eyeing to achieve INR1,050 crores top line in financial year 26. Our Capex plan, which includes several forward and backward integration projects, is under advanced. Drawing and planning stage.
We will share a comprehensive report on this project. Detailed financial plan with our esteemed shareholders through exchange filings once our Management Board approves going forward our capital expenditure plan. We prioritize ethical practices and environmental responsibility aligning with ESG goals while maintaining strict standards of sustainability and sustainability. Our continuous investment in research and development will foster innovation and address our customers’ changing needs. positioning us for long-term success and thus delivering value to our valued stakeholders.
I would now like to invite Mr. Ashok Jain, our Manorama CFO, for his comments on Q4 and Financial Year 25 performance. Thank you.
Ashok Jain — Whole Time Director & Chief Financial Officer
Thank you sir. Good morning and warm welcome to everyone to Manorama Industries 44th and Financial Year 24-25 Earnings Call. Highlighting the company’s financial performance for the financial year 2024-25. Manorama Industries revenue during financial year surged by 69% year on year to INR771 crore owing to higher demand of company product portfolio in both domestic and export markets.
The company’s export business contributed 73% of total revenue and balanced revenue share from the domestic market. The company’s EBITDA grew by 1.6 times year on year at INR191 crore in the financial year 2024-25, edgily despite of INR15.4 crore attributable to EBITDA margin expanded by 870 basis point year on year at 24.8% in the financial year 2024-25, which is attributed to efficient cost management and operating leverage. Profit after tax during the financial year 2024-25 surged by almost two times at 112 crore rupees. Profit after tax margin expanded by 576 basis point year on year and 14.5% for the financial year 2024-25.
The company’s board has announced a final dividend of 0.6 paisa per share that is a 30% of face value of INR2 rupees per share for its shareholders. Highlighting CAGR of our financial year from 2021 to 2025. Monorama Industries’ revenue, EBITDA and PAT has registered a CAGR of 40%, 53% and 66% respectively. CAGR rating has upgraded the company’s bank facility to A from minus A. The company’s balance sheet reflects robust strength with manageable net debt to equity ratio of 0.83 to 1. is to one.
The strong ratio that is RO is 24.3% and ROT is 33% for the financial year 24-25. Additionally we have trimmed out our working capital days from 180 days to 150 days for the financial year 24-25 with efficient working capital management. Our peak working capital requirement is behind and incrementally it will be keep improving from here. We are making all efforts towards inventory management which will help in positive outcomes going forward.
Going forward our endeavor is to reduce the net debt from here on, highlighting the net debt position in detail. The net debt stands rupees 380 crore on 31st March 25 mainly comprised of working capital loan. Our total inventory as on 31st March 25 stands rupees 549 crore which includes raw materials, finished goods and other by-products. Thank you for listening to us patiently.
We now open for the floor for question and answer session.
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 touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset 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 Nitin Goswami from Bank of India Mutual Funds. Please go ahead.
Nitin Gosar
Hi team. Congratulations for good set of numbers. Couple of question. Just wanted to understand if I were to take, you know, second half margin as a guiding principle, what our business or what our plant can you know, generate in terms of margins. Would it be fair to extrapolate it going forward? Because we, on the new plant, we are still running at 40-50% utilization. So going forward, if we keep improving on the utilization levels, then the second half FY25 margins that we saw are more or less sustainable and can improve from there on as well. That would be a fair understanding.
Ekta Soni
Hi, Nithin. Thanks for your question. So, related to your margin question, so this performance is a result of our continued focus on operational efficiencies, pre-authorization initiatives and disciplined execution. So, looking ahead, while we remain confident in the structural strength of our business model and our ability to sustain healthy margins, We prefer to stay focused on operational excellence and value creation for our shareholders. And our efforts will continue to be directed towards driving consistent profitable growth, which we believe will naturally reflect in strong margin performance over time going forward.
Nitin Gosar
Got it, got it. So there is nothing like one-off in our margins. And as you keep improving on the efficiencies, it will directionally either maintain or will improve. That should be my key takeaway, right?
Ekta Soni
Yes.
Nitin Gosar
Okay.
Ashish Saraf
Our efforts will continue to be directed towards consistent growth, sir. And we believe in that. We believe that we will work on this to try our best.
Nitin Gosar
Perfect, sir. Perfect, sir. And one last question is I noticed that there was a couple of commentary with regard to product related work that we are doing. But if I were to extrapolate it and were to only see on exports part. So exports business over last four years has gone up almost 4x. And if I were to incrementally think from year on, are we going to excel from year on by doing business with the same customer by improving the wallet share, or we are also trying to grab upon new customer, As I can see, we have opened new subsidiaries in UAE, Latin America, which can trigger that kind of opportunities. What should we keep in mind? How is Manorama shaping up over the next two, three years with regard to export opportunities?
Ashish Saraf
We have a very simple philosophy in this key. We have to maintain our all existing customers and continuously hunt for new customers, which we are working around the clock. all over the world, including India also.
Nitin Gosar
Right. But this new customer addition will not compromise our margin or ROC profile?
Ashish Saraf
Margin and ROC profile are business oriented plans because customer new acquisition is different ball game. and whether it is a new or old customer, the prices are almost approaching.
Nitin Gosar
Right, right. Yeah, yeah. So the call was more on or the question was more around we are not trying to get into new customer at a lower margin. It is not going to compromise our existing structure.
Ashish Saraf
See, these are business issues. We cannot say exactly. But generally as per Manorama’s policy, we don’t compromise like that. See, these are business issues we cannot say exactly, but generally as per Monorama’s policy we don’t compromise like that. Different specifications, terms and various ingredients in play when we supply to any customer.
Nitin Gosar
Perfect. Sorry, one last bookkeeping question. Ashokji, what should be the ESOP provision for the quarter? Or maybe if you can also talk for the full year?
Ashok Jain
For full year, the total provision was 15.31 CRs. And for the quarter four, we did the provision of 3.81 crore.
Nitin Gosar
Got it, got it. Thank you team, all the best on the FI-26 number as well.
Ekta Soni
Thank you.
Operator
Thank you. The next question is from the line of Rohan Mehta from FeeCom Family Office. Please go ahead.
Rohan Mehta
Hello sir, am I audible?
Ekta Soni
Yes, you are audible.
Rohan Mehta
Right, thank you so much for taking my question and congratulations on a great set of numbers. So firstly, I wanted to ask on your working capital. Your inventory stood at about 550 crore as of March 2025. So what inventory levels are you targeting by September 2025 and also by March 2026? And while we are on working capital, also on the trade receivables, so if you see your trade receivables have stood at 102 crores in March 2025, which is, you know, more than double on a YOY basis. So are we seeing any change in customer contracts or payment terms? Could you just clarify on that?
Ashok Jain
So, you know, the, our Peak working Capital requirement is guided and incrementally we are keep improving from here for all making all effort to our inventory management which will help to positive outcomes going forward. So currently it is around 150 days but we are looking forward to reduce around 120 days to 140 days because we procure the raw materials at the time of season. In terms of receivables, so export we receive around CAD basis and sometime advances. So we are looking for around 30 days receivables for financial year 25-26.
Rohan Mehta
Got it. And on your CBE prices, so I believe somewhere around March 2025, they were around about 5,500 tons per dollar. So have the prices moved since then? And are you seeing any contract repricing with clients?
Ekta Soni
So our average TBE price is around, you know, 5,000 to 6,000 US dollars because then it depends a lot of different thing on specifications and the kind of terms and contracts we have with our customers. So more or less our TBE prices contracts are in the range of 5,000 to 6,000 approx USD dollars per metric ton.
Rohan Mehta
Right, right. And on the receivables, I wanted to ask a follow-up question. So could you spend some time just explaining why has it increased? It’s right now about 13% of sales and inventory seems to be a bit of a concern because it’s about 70% of your revenue. So that seems quite large.
Ekta Soni
So see you have to see our inventory in two parts. So our inventory consists of finished goods inventory also like as we have reported our numbers 130-150 crores of inventories of finished goods and raw material inventory is of around 400 crores. So on a financial year 25 basically see it looks higher but if you look for FY 26 revenue target then one will understand why it’s higher. higher because the raw materials are seasonally mature so we need to have to stock it. Because since these raw materials are available only during specific harvesting seasons and we have to procure them in bulk for our foliar requirements. So that is why if you see our projections for the coming year, you know, turnover guidance, it won’t look that high. It will look high on FY25 basis.
Rohan Mehta
Okay. Okay. So I believe also on your last quarter capacity utilization versus this quarter, how much change has there been?
Ekta Soni
So on an utilization front we can see last Q3 because existing capacity of 15 000 tons is already running on 100 utilization and our sf2 solvent vaccination to capacity utilization stood at around 60% for quarter four approximately. So in a tonnage wise, if you see it’s a volume of 3750 metric tons from SF2 for quarter four.
Rohan Mehta
Okay. Okay. And on the receivables you haven’t clarified. Could you just provide as to like what sort of normalized these we are looking at.
Ekta Soni
Because at the balance sheet date, if you see our receivables look high, it is generally 50 days. But on an average, if you see it is 30 days for the company as a whole. So we are maintaining that and we are under well within our good terms with our customers. But on an average, if we are to consider, then you should consider 30 days instead of looking at the March FY25 numbers which coming to 50 days.
Rohan Mehta
Right, right. And my final question is on the employee expenses. So if you see the employee expenses, they’ve gone down, but we have also observed new names, you know, in the presentation. I believe this is mainly to do with, you know, focusing on the subsidiaries as well. So could you clarify employee expenses going forward? Are we going to see a massive jump over there?
Ashish Saraf
Then there is not going to massive jump, but there will definitely be a jump if we want to increase our market share and achieve higher sales and achieve. So we will need good people to be in the company. So we can expect around 5 to 10% or maybe more jump.
Rohan Mehta
Sure, sure. So yeah, that’s all from my side. So thank you so much patiently for answering my questions.
Ekta Soni
Thank you so much.
Operator
Thank you. The next question is from the line of Dikshie Gen from Invest Savvy Managers. Please go ahead.
Dikshi Jain
Hello?
Ekta Soni
Yeah, hi.
Dikshi Jain
Hi. Thank you for taking the question and congratulations on amazing numbers. So my first question was regarding the a few weeks ago there was this article from Bloomberg going around regarding the cocoa price oversupply of cocoa and cocoa prices have also corrected significantly from. So how do we see this affecting our business and CBE prices?
Ekta Soni
So see time and again we have, you know, clarified that our CBE prices of course are not directly linked or related to Fuku Patta, but of course, somehow it indirectly relates us. But if you see our customers or the consumers are structurally have really changed their demand, their usage to other conventional items like TB and other goods. So we have our own demand for TB products worldwide and it is going very well. So for us also, TV prices are volatile if it is going beyond a point or it is correcting for something. It is not hampering us for the recovery prices in that way because structurally the customers are changing this product not only because of the price volatility.
Dikshi Jain
Okay. So we don’t see any effect of Sukoopita coming down of TV prices.
Ekta Soni
So we are not investing in messaging that for our cocoa butter equivalent prices. See, cocoa butter is a commodity and that is volatile and we can, you know, tag that. And CV is a very niche product which we are customizing and, you know, making for our customers for their tire manufacturing. So it’s not that directly related.
Dikshi Jain
Okay. And for CD prices for all the new contracts that have expired and renewed, how much price hike have you got for the new contract? If there is any and how are the prices moving for CD?
Ekta Soni
As we have mentioned this earlier in the call also, so average CD prices is between 5,000 to $6,000 USD. It depends on a lot of factors on the specifications and tons approximately.
Dikshi Jain
But have they improved in the last few months? Last two, two, three quarters? How is the price moving?
Ekta Soni
So it’s like its contract is for mostly one year. So once we have booked the contract, for example last so the contract pricings are same for full year. So there
Dikshi Jain
Hello.
Ekta Soni
Yes. The contracts are generally for one year and the prices are fixed. So it is not like that, that in every quarter the prices are changing for CV for us.
Dikshi Jain
No. So what I’m asking was if any contract has renewed right now. So. The new price compared to the old price, how has it moved?
Ekta Soni
You can take this price only for CB 5,000 to 6,000 USD.
Dikshi Jain
In last one year, the prices haven’t moved much.
Ekta Soni
Yes, approximately yes.
Dikshi Jain
Okay. And right now CB as a percentage of sales is approximately how much?
Ekta Soni
CBE as a percentage to sell it is around 30%.
Dikshi Jain
Okay, are we expecting it to go up further?
Ekta Soni
Yes, yes, we are expecting to go beyond this also. Financially
Dikshi Jain
Okay, how much are you expecting it to reach?
Ekta Soni
We can expect with time we can update you maybe if the water comes by. So we can expect that.
Dikshi Jain
Okay, so one last question that I have is.
Operator
Could you please come back in the queue for further questions?
Dikshi Jain
Yes, sure. Thank you. Thank you. The next question is from the line of Jayanam Doshi from Chris portfolio. Please go ahead.
Jainam Doshi
Yeah. Congratulations on an excellent set of numbers. I just have two questions. One is like we have guided for a Revenue Target of around 1050 plus. Crores in FY 26. So if you could bifurcate the same as to how much would be volume. Led and how much would be value. Led that would help us here.
Ekta Soni
If you see the guidance which we have given on the top line shows the growth of around 35-40%, 36% something. So largely it 25-30% should come from the volume growth and the rest 5-10% should come from the price realization group approximately.
Jainam Doshi
Okay, okay, got it. And second is like we have incorporated. Subsidiaries in the MENA region as well as Brazil. So how big is the market opportunity there and for which product do we see attraction in such markets? And also like how is the competitive landscape shaping up in the American and the European markets? If you could throw some light that would be great.
Ashish Saraf
Health care. The Brazilian market is quite huge in terms of consumption of CBE and our steering is the value added products. And the market approximately is projected to be around 25 to 30,000 tons. And as such it is quite fragmented market with a huge landscape. So we see a big opportunity there. And it will take some time to build up our base there.
Jainam Doshi
Okay. And what? And the competitive landscape, which is like shaping up in American and European markets, if you could guide us upon that.
Ekta Soni
So see, in world also, there are very few players who are into this specialty Niche business. So as if you see competitive landscape, there is so much of demand, supply Gap for the products. So we see that particular thing in the regions like that. So there is a huge demand supply gap for the products.
Jainam Doshi
Okay, okay. Got it, got it. Thank you, thanks a lot.
Operator
Thank you. The next question is from the line of Akhil Pareek from B&K Securities. Please go ahead.
Akhil Parekh
Hi, thanks for the opportunity and congratulations. On a good set of numbers. In your previous comment you mentioned that the impact of cocoa prices volatility is not impacting CVE prices because of specific applications for CVE. If you can highlight what are the specific applications for CVE?
Ekta Soni
Specific application as a CVEs are used in food security and you know personal care industries because we generally link because in reality the pricing dynamics differ significantly and demands sustainable [Foreign Speech] irrespective of CB prices fluctuations because if you see the diversified raw material base for us is different for that of cocoa butter than cocoa butter equivalent.
Akhil Parekh
Okay. okay. Okay. Fair enough. And in past we have mentioned that FSS allows, I think, five percent of CV usage. Right. And you, you guys also had highlighted that we are kind of far off from that number in terms of usage. Would we have that number where, where as an industry we have reached there?
Ekta Soni
Five percent. They are markets.
Ashish Saraf
In FSS, we cannot. Currently the demand for 5% is all that is the rule if you mention chocolate on the wrapper. If they don’t mention chocolate on the wrapper then you can put 10-20-30%. So basically this depends on chocolate to chocolate. Whether it is dark chocolate then it is 5% and we currently cannot supply the whole demand because the demand is going day by day.
Akhil Parekh
Look, my question on what we had highlighted was we are still not using five percent of CVE in, in the required products in India as mandated by FSSAI. And hence the opportunity of demand is still going to be on a higher side in coming years. So I was asking where as a percentage, where, where that where have we reached basically?
Ashish Saraf
That is what I’m explaining. Five percent is only if you mention chocolate on the wrapper. The demand is much more than that. There are many chocolates. They don’t mention. They don’t mention chocolate on the wrapper. But it is a chocolate. So the demand is much more than five percent.
Akhil Parekh
Okay, fair enough. Got it. And lastly, bookkeeping question. Capex number, if you can highlight the guidance in terms of for next two years. And I don’t know if you very well so kind of mentioned the volume number for fourth quarter and fifth quarter. That’s the last two questions.
Ekta Soni
But also for the Capex, like we, of course, we share a comprehensive report on the project which we have, you know, announced last quarter. So because we are already on advanced toying and planning stage. And once our board approves our capital expenditures plan, we will share it with our shareholders on the capex front. So on the capacity utilization, we mentioned that 60% of the utilization was from our new plants in Suhail.
Akhil Parekh
Okay. Okay. And sorry, on capex for additional capex, the internal approval should be good enough or we may have to raise the debt or dilute the equity.
Ekta Soni
So we have healthy internal accruals with us but we can confirm they see only when are both approved on the financial capital expenditure plan. Of course the company is having healthy internal accruals with it.
Akhil Parekh
Sure, thanks a lot and best wishes for coming.
Ekta Soni
Thank you.
Operator
The next question is from the line of Anmol Sony. from Derby. I said, please go ahead.
Anmol Soni
Yeah, am I audible? Hello?
Operator
Oh, yes, sir. You audible. Please go ahead.
Anmol Soni
Yeah. First of all, good to see that. Solid growth in numbers. I have heard the guidance for FY 26 about 1050 crores. And also in the last con call, I’ve seen the guidance which is given is 23 to 25% for the EBITDA. Margin, which was almost achieved in this financial year. So my question is I wanted to know about the margin guidance for FY26 and beyond and how the operating leverage will kick off once we are expanding the capacity utilization in our new plants.
Ekta Soni
So, sir, as we have also explained this earlier, so whatever performance we have showing is a continued focus on operational efficiency, also premiumization initiatives and disciplined executions. Of course, we are looking ahead and while we remain confident in the structural strength of our business model and also our ability to sustain healthy margins, we prefer to stay focused on operational excellence and value creation for the shareholders. So our effort will more on to continue to be directed towards consistent profitable growth, which we believe will naturally reflect in the strong margin performance over time going forward.
Anmol Soni
So the guidance will remain same of. 23-25% of margins or are we expecting it to improve?
Ekta Soni
Sir, we believe it will naturally reflect in the performances over time. So. And we will, you know, keep you updated quarter on quarter basis.
Anmol Soni
Okay, sir. Thank you.
Ekta Soni
Thank you.
Operator
The next question is from the line of Prateesh Cheda from lucky Investments. Please go ahead.
Pritesh Chheda
Yeah, ma’am, a few clarification. So how much of the revenues or let’s say how much of the volume that the CV level because there is a value addition from siren which has to be done up to CV. So in our case, how much of the volume would be sold as a CV?
Ekta Soni
So you want to know the volume sales of CV for full year. That’s the question.
Pritesh Chheda
Yeah.
Ekta Soni
Okay. So the CV sales for full year at by 25 was 4500 metric tons and steering sales were 7 000 metric tons.
Pritesh Chheda
4500 and seven thousand. So. Okay. And your full year volume. So since you. So let’s say the quarter four volume, you mentioned that 60 is utilization in fraction two capacity and 100 utilization in fraction one. So when you do the math, the volume comes to about. 2,400 tons for the quarter four. This correct.
Ekta Soni
The four volume will come 7,500 megawatt. So if you are asking only for quarter, not for full year.
Pritesh Chheda
Quarter four is 7,000 tons.
Ekta Soni
7,500 capacity utilization.
Pritesh Chheda
Oh, sorry. I didn’t understand. Seven and a half. So your capacity is right. 6 000 fraction one and 6500 tons fraction two, right?
Ekta Soni
Yes. So our full year capacity of vaccination one is 15 000 ton and vaccination two is 25 000 tons for full year. It is 40 000 tons for full year.
Pritesh Chheda
Okay. Okay. And the other comment was on the British goods contract being fixed. So since you have bought the raw material for the year at the end of quarter four, that house was seniority, and you would have a finish good pricing, which is fixed. There should not be any volatility in your margin number incrementally, right? or if there is a risk to margin, what it is? I’ll put the other way. If there’s one question, yes. Since you have bought the inventory for for the full year now at the end of quarter four and your finished goods are on contractual pricing, what is the risk to the market?
Ashish Saraf
This is business and business always has risk, but as such we don’t see immediate any risk. perceived in the current. But business is business. We cannot guarantee anything.
Pritesh Chheda
No, I’m asking if there is any risk to our margin number where it can emanate from.
Ashish Saraf
That you have to tell us, sir. We don’t see any. These are natural products we are procuring from the forest based in Africa and India. and we are making a specialty products which are being used by the top companies in the world. So business always has risk, but as such immediate risk we don’t see anything substantial.
Pritesh Chheda
And the last question is between the F524 and F525 margin, is the scale of operations a key change in the margin number or is there any other drivers for margin?
Operator
Hello?
Pritesh Chheda
Hello?
Ekta Soni
Yes. Hello?
Pritesh Chheda
Yeah, ma’am, I asked a question. I said between the F524 and F525 margin. where I find 25 is way higher than 24. Is the scale of operations a key reason for the margin change or there are any other drivers as well?
Ekta Soni
So of course there are scale of operations which is giving, you know, attributing to the margins. But along with that there is the volume led growth also we has contributed. Also the product mix has changed for the company. and also there are the price roads. So there is a combined aspect if you see which is attributed to our margins. So it includes operational efficiency, economies of scale, leverage benefits, product mix and so on.
Pritesh Chheda
It will be a product exchange between the two years and what is the pricing change in the two years?
Ekta Soni
The product if you see the contribution to sales earlier was around 10%. so this year it is 30%. So that is how that the value added product has been contributed and our pricing range has been around between 5000 to 6000 USD approximately for TCV prices.
Pritesh Chheda
What was the corresponding sales pricing number last year?
Ekta Soni
Last to last year it was around. 5000 to 6000 USD approximately for TCV prices. So we have to see what was last to last year prizing contract. Maybe we can take this question offline and get back to you.
Pritesh Chheda
Thank you.
Operator
Thank you. The next question is from the line of Kushal Goenka from Mangal Keshia Financial Institution. Please go ahead.
Kushal Goenka
Hi, thank you and congratulations on good self numbers. My question was last quarter con call, we had this, the management had mentioned that we’ll come with a full plan in the Q4, that is this Q4. But since there was no update in the presentation also and in the starting comments, so I just wanted to know if there are any delays with the backward and forward integration and the final project which is going to come in.
Ekta Soni
See, we already have mentioned that we are already on an advanced drawing and planning stage for our products and of course the team has been given the mandate to work on the comprehensive report and submit to the board and that’s how the process works. So it will take a quarter more or two more to get the things approved from our board on our capital expenditure plan. and then only it will be, you know, feasible and will be good to share with you the outcomes of the board on going forward. So there are multiple projects we have announced in the last quarter. So we’ll share the report in the coming going forward.
Kushal Goenka
So can we expect in this quarter or by next quarter we will get the clarity on the same?
Ekta Soni
So as soon as we finalize it, so we will see, we are very hopeful to get it in the get this all these things quickly and.
Kushal Goenka
Okay. Thank you so much.
Ekta Soni
To start the construction also this year.
Kushal Goenka
Okay. Okay. Thank you so much. My next question would be actually i’m like little new to this company. I was just checking the financials of 2019-20 and that time our margins was around 28-23% but then it again dropped to 17-14% and again we have reached around 25% margin. So my question was can we sustain these kind of margins for like in the next three-four years or is there some volatility chances?
Ekta Soni
Okay sir, if you see our that performance of 2019 because whatever performance we have given in edge to related to our margin, it is a result of our continued focus on operational efficiencies, premiumization initiatives and disciplined execution. So looking ahead, we remain confident in the structural strength of our business model and our ability to sustain healthy margins. So again, we are saying that we believe it will naturally in the margin performances over time. Because in 2019 also, when that has happened, we have undergone a new Capex of 15,000, 20 additional 25,000 tons Capex, which has, you know, compressed the true EBITDA level margins. And now when we have started our new plants, the 25,000 plants, and the revenue is contributing to the growth and also to the bottom line. So that is how there is a difference of margin in 2019 and this year.
Kushal Goenka
Okay. Okay. And like doing 21-22-23, like if you can let me know what’s happened.
Ekta Soni
Setting up a new Capex. So this Capex, we nearly tripled our capacity from 15,000 tons to that capacity. financially, if you are looking at us and it was a COVID period also and accordingly that margin was there.
Kushal Goenka
Okay. Okay. So, but so like now again we are doing, you know, immense expansion forward and backward integration. So won’t that again hurt the margins going ahead?
Ekta Soni
So it’s too early to say that because the projects we have taken we are giving a payback period of less than three years. So it’s too early to say how it is going to impact our margins, but our efforts will continue to be directed towards driving consistent profitable growth for our stakeholders and we believe it should naturally come in our performances over time.
Kushal Goenka
Thank you so much.
Ekta Soni
Thank you.
Operator
Thank you. The next question is from the line of Maitreya Shah from Sapphire Capital. Please go ahead.
Maitri Shah
Hello?
Ekta Soni
Hello?
Maitri Shah
Yeah, I just had two questions. Firstly, you said that you are going to be reducing the debt going forward. Any guidance on what the debt net debt will be in FY26?
Ashok Jain
So. We are doing our best effort to reduce the debt net debt and in going forward the debt will be reduced. So our peak working capital requirement is behind and incrementally it will keep improving from here. We are making all efforts to our inventory management which will help in positive outcomes going forward. and the going forward our endeavor is to reduce the net debt from here. And then.
Maitri Shah
So the current amount of 350 crores is the peak amount we can see for now.
Ashok Jain
Currently net debt is around 380 crore rupees mainly comprised of working capital.
Maitri Shah
And that’s the peak you can see and from there around it was like go down.
Ashok Jain
Accordingly, the revenue will generate accordingly. It will be reflect the net return.
Maitri Shah
Okay. And the other income in fourth quarter is double what it was before. So any like one-offs in the other income.
Ashok Jain
Other includes. Other income includes foreign gain loss also. So we have earned around the total 600 rupees in this quarter. So other income includes foreign gain loss as well as the interest on FDR. Six deposit received. So we are around 104 rupees six deposit. So every quarter we around 2.5 CRV 2.2 CR is receiving the interest on these six deposits that also including other income.
Maitri Shah
Thank you.
Ashok Jain
Thank you.
Operator
The next question is from the line of Janvi Shah from Share India Securities. Please go ahead.
Jahnvi Shah
Hello, congratulations on the numbers. I just had one question. You mentioned that the margins improved because of scale of operation and product mix as well. So I just wanted, if you can spend some time explaining How has the product mix changed in the last year and which product gives us the higher margin? If you can explain.
Ekta Soni
All our products are value added. So most value added product for us is CDE and steering. And the contribution, the way it has gone up. So we with CDE sales were around 10% to sales last year. It has gone to 30% of sales to last year. So, this is how we have been growing.
Jahnvi Shah
Growth driver for you?
Ekta Soni
Every value added product is contributing to the margin. So we have steering and CV and other products for the automotive and metal. All of the products contributing to the margin.
Jahnvi Shah
Thank you so much.
Operator
Thank you. The next question is from the line of Kaushik Mohan from Ashika Group. Please go ahead.
Kaushik Mohan
Hi sir, congratulations for the great set of numbers. I just wanted to understand one thing like with the inventory of 550 crores what we have. what can be the revenue can be converted?
Ekta Soni
So we have given you the guidance for fi-26 it is around 1050 plus crores.
Kaushik Mohan
Yes. So that means that the raw material. Okay. In the inventory. How much is the raw material, ma’am?
Ekta Soni
Raw material inventory is around 400 crores.
Kaushik Mohan
400 crores. That means that we are having this raw material in the older cost, right?
Ashish Saraf
Average. Average cost of average positive on average cost
Kaushik Mohan
Perfect. And another thing I just wanted to understand. Ma’am, this year we can see that our return matrix has improved Roc and Rove like because of capacity utilization coming up and now 40 000 metric tons that is also coming with 65 percentage. Is what we are capacity utilizing that. Will improve and operating leverage will play. Out in our our game, right? So can we expect the margins to improve over here in the EBITDA level?
Ekta Soni
So, performance what we have given you in H2 is the result of our continued focus on operational excellence and of course our efforts will be, you know, continue to be directed towards driving sustainability and profitability for our stakeholders and we believe it will naturally reflect in our margin performances over time. We can update you quarter on quarter.
Kaushik Mohan
Last question from my end, I just wanted to understand currently we have 40,000 metric tons, do we have any plans. To put up new capacity?
Nitin Gosar
Yes sir, we already have announced five projects last quarter, so directionally we the company is moving towards those directions of project of forward integration and backward integration. Of course, the companies having plans for another three to five years roadmap which we have shared with our shareholders in our last phone call. We can prefer that and once we get approval from our board on the projects and we can then share you the timelines and comprehensive reports and how we are going forward with those things.
Kaushik Mohan
And in the total,
Ekta Soni
Construction to this year, hopefully.
Kaushik Mohan
Got, got it. Ma’am and in the total output of this year, what how much is PB and how much is starch or how much can you bifurcate in the value terms, volume terms?
Ekta Soni
PB and starch is 50% of our total value added product volume share. So see both the product theory and these value added products for us?
Kaushik Mohan
No, [Foreign Speech] in the percentage terms or in the number terms?
Ashok Jain
Okay, 7,000 ton.
Ekta Soni
So you are asking the volume wise?
Kaushik Mohan
Volume wise, volume wise, volume wise.
Ashok Jain
7,000 ton is the syrian and around 4,500 ton is a CV. Both are the value added products.
Kaushik Mohan
That is for the quarter, right?
Ashok Jain
For whole year.
Ekta Soni
For whole year. So we are giving the startup. Percentage wise 20% is CBE in the volume and 30% is clearing volume wise.
Kaushik Mohan
Perfect. Thanks. I’ll get back in a minute.
Ekta Soni
Thank you.
Operator
From the line of Mayur from Wealth Managers, please go ahead.
Mayur Parkeria
Good morning to the management and congratulations on a very good set of numbers.
Operator
I’m sorry to interrupt, Mr. Mayur, your voice is coming a little low. Can you speak a bit louder?
Mayur Parkeria
Yeah, congratulations to the entire team of management. Now is it okay?
Operator
Oh yes, far better.
Mayur Parkeria
And congratulations to Mr. Saraf and the senior management for driving the transformation of the company. That’s great to see the kind of transformation over the years. So hearty congratulations. I just couple of questions. So some clarification first. You said on an annualized basis, FY 25 not Q4 annualized. I’m saying overall capacity utilization on 40,000 tons was close to 60%, right? So our volumes were closer to 24,000 tons on an annual basis. Will it be right way to understand?
Ekta Soni
So it will be close to 22, 000 tons because the 22 because we started new capacity in July 2024.
Mayur Parkeria
Okay. And so CBE by volume was 20 and we say 30 by way of Revenue.
Ekta Soni
Yes. Right. Correct.
Mayur Parkeria
Okay. And similarly, overall value added products overall on this 22, 000 tons would be 50.
Ekta Soni
Yes, tonnage wise.
Mayur Parkeria
Tonnage wise, okay, okay. And by revenue will it be much higher?
Ekta Soni
It should be close to around 70%.
Mayur Parkeria
70% and 70%. Okay. Given that we are in a rising commodity, basic commodity prices means in terms of cocoa butter, the pricing is on the higher side, it’s rising trend. Will it be fair to say that there can be a tactical way to play the spot market as well as the contract market? I mean, how much of our currently is contract sales, long-term contracts in a sense one year contract and how much is sales? Can there be a, can this mix change? based on what we think is right currently in the market and how does it play for the next year?
Ashish Saraf
These are our super specialty niche products and they are used in the various chocolate industries all over the world. And they mostly are on yearly contracts. In case of some of our customers want immediate delivery, we may sell them on spot basis. But generally most of the contracts are on long term basis.
Mayur Parkeria
Okay.
Ashish Saraf
This is not a then these products are used in the various serious food applications, especially the chocolate industry. So these all are mostly on the planned basis so that their factories don’t stop, they continuously receive the materials. Maximum business is on the long term contracts.
Mayur Parkeria
Long term contracts. okay. Okay. So, sir, then in that case, given the significant rise in the prices, sometime in the next year, maybe H2 of next year or sometime closure, shouldn’t we see a decent rise in our contract pricing as we go ahead? I understand it will be gradual, but from a five thousand dollar, five thousand to six thousand dollars, not specific, I’m asking, but at a weighted average level, we should see a decent rise as we go as conceptually, right?
Ashish Saraf
It is cocoa butter is a commodity. It will go up, it will come down, it will then go down, it will go up. And that will keep happening. CB is a specialty and it is and we have these long-term relationships with all the chocolate majors of the world. So we have to be sustainable and be a dedicated supplier to them. So this is not based on any, this is not a commodity we start taking advantage or disadvantage. It is a joint business because there is no thereabout. There is a very, who will give this service of collecting from the forest and making those specialty products and then eventually they are being eaten by the most population of the world. So this is basically more sustainable stabilized business rather than a commodity business model.
Mayur Parkeria
That’s great to hear because it then tells the nature of competitive advantage or moat for us that it is more sustainable as we go ahead. That’s great. Sir, another aspect was as we go ahead, Manorama being an integrated player, We have ethical sourcing, we have strong relationships on the sourcing side in two of the largest, two of the markets where the raw material is there. What would be the positioning of Manorama globally for us currently in terms of overall global position and do we think that we can be among the top leaders as we go ahead in over.
Ashish Saraf
The next I think we are already in the top leaders because there are hardly three-four players in the world and we already are there and we are every day we are going from strength to strength and we are getting huge recognition, not only the awards but many strong recognitions, big companies are depending on us for the supplies. and this is a very, as you rightly said, this is a very niche business. This is not any easy business. You have to collect the raw materials, make them into the world’s finest products, which are written by the children of not only India, but of the Japan or America, America, Latin America, Europe, Russia, everywhere. So we are already, I think, there and we will be, we are the only company in the world who makes from mango, from sashia, from Sal, who has all these products in one basket.
Mayur Parkeria
All right.
Operator
And I’m sorry to interrupt. Mr. Mayur, I would request you to please come back in the queue. The next question is from the line of Afur Hussain from Panchiratan investors. Please go ahead.
Apoorv Singh
Hello, am I already?
Operator
Yes, sir, please go ahead.
Apoorv Singh
Thanks for taking this opportunity and doing this con calls. This really helps investors like us and all the best to all the congratulations for the numbers. The question I wanted to understand was, I wanted to understand the growth of the CV contractual prices. If that is not available, I would want to maybe get that later on that. Could you give some idea on how has that grown, the CV contract prices?
Ekta Soni
CV contract prices are ranging approximately between 5,000 to 6,000 USD. It depends on the specifications and terms with the customer.
Apoorv Singh
How has that grown in the last three years? They wanted to understand that pricing.
Ashish Saraf
The growing in a relative manner, as per the increasing demand and the usage of the eating of the chocolate by the human population in various geographies around the world.
Apoorv Singh
So we don’t have a current number on how that has gone in the last couple of years.
Ashish Saraf
They are going substantially year by year. It all, there are various factors and demands on the based on the demands in various geography they are growing as such we don’t have a specific number.
Apoorv Singh
Got it. Also second question is that what is the price sensitivity of cocoa versus CV prices? If you can give an example in terms of let’s say if cocoa is priced at 100 what would be the cocoa butter equivalent prices be?
Ekta Soni
Cocoa butter equivalent prices we just mentioned you. $5,000 to $6,000. And cocoa butter prices is volatile that we can track online. It’s around approximately around $20,000 as of now. And it’s a commodity we can track this also prices in the Google.
Apoorv Singh
Got it. But just wanted to understand is there any correlation between that, what is the price sensitivity if it is 100 then what is the kind of general industry standards of cocoa equivalent?
Ashish Saraf
It cocoa butter is around 20,000 or roughly around 14-15,000 dollars. So it is not directly correlated but of course in a way indirectly it is. But as such then the CV prices should also be in the same range. So basically there is a large difference. It is more CV is more used in the chocolates for the compatibility and for other reasons. It is not right to Assume, but there is a pricing that item is different significantly.
Apoorv Singh
Got it. Also, the last question is that just want to understand the contracts we have. What are the price renegotiation clauses, if any? Just if you can give some idea on that, because you say we have long-term contracts in terms of one year. so any special cases where these contract price negotiation can happen? Any clauses on that?
Ashish Saraf
In there, big contact. They are all can be. We have confidentiality contracts with our, uh, all the customers. So I cannot disclose all that here.
Apoorv Singh
You got it. Yeah. So I did not want to the confidentiality thing. I just wanted to understand what are the clauses which will lead to renegotiation so that those factors could be tracked as an investor. but thank you.
Ashish Saraf
No, but they are various. All the. All are. These are the bonds of the chocolate multinational companies of the world. And all the contacts have. It is as per the business terms. It is decided.
Apoorv Singh
Okay. Congratulations to the numbers. That’s it for my side.
Ashish Saraf
Thank you.
Operator
Thank you, ladies and gentlemen, due to time constraint, that was the last question for today’s conference. call, I would like to hand the conference over to the management for closing comments.
Ashish Saraf
I would like to extend my gratitude to all the participants for dedicating that precious time to join us for the Manorama Industries Q4 and Financial Year 25 Earnings Conference Call. the company continues to solidify its reputation as a Dependable and leading provider dedicated to fulfilling the increasing needs for sustainable cocoa butter equivalents, specialty fats, steerings, hand butters, and our various new product launches. With our focus on research and development, we maintain our status as the preferred supplier of specialty fats and butters both our global and domestic customers. Also, should you have any additional questions, kindly feel free to reach out to us via email or kindly contact Ernest and Young, our investor relations advisors. I sincerely thank you all for participating in this Q&A today and I hope you have a wonderful and happy a healthy day. Thank you.
Operator
Thank you. On behalf of Manorama Industries Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank.