Parag Milk Foods Ltd (NSE: PARAGMILK) Q1 2026 Earnings Call dated Jul. 22, 2025
Corporate Participants:
Bryan De Pena — Head of Investor Relations
Akshali Devendra Shah — Executive Director
Unidentified Speaker
Analysts:
Param Vora — Analyst
Kiran D — Analyst
Resha Mehta — Analyst
Bharat Gupta — Analyst
Ankush Agarwal — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Parag Milk Foods Limited Q1 and FY26 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 Star then zero on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Bryan De pena, Head of Investor Relations, Paragmil Foods Limited. Thank you. And over to you sir.
Bryan De Pena — Head of Investor Relations
Thank you. Good day and good evening to everyone who have joined this call from various geographies and all those who joined us from Mumbai. We have with us today from the management, Ms. Akshali Shah, our executive director, Mr. Raul Kumar Srivastava, our COO, Mr. Angit Jain who is head of. He was the Chief Strategy Officer and Head of Business Finance and myself, Brian Depana, Head of Investor Relations. I would now like to hand over the mic to Our Executive Director, Mr. Akshali Shah to take this forward.
Akshali Devendra Shah — Executive Director
Good evening everyone. It’s a pleasure to welcome you all to the Q1FY26 earnings call for Paragmh Fruit Limited. I hope you and your families are doing well. We’re delighted to share that Q1FY26 has set a strong and promising tone for the year ahead. We delivered our highest ever first quarter revenue of Rupees 852 crore reflecting a 12% YoY growth backed by consistent execution of our focused strategic priority. This growth was driven by robust volume expansion. Across our core categories I.e. cheese, ghee and paneer which grew by 9% in volume and 14% in value. These categories now contribute to 57% of our total revenue, affirming their strength in our portfolio. We continue to retain leadership position with Govars and Ghee commanding 22% market share in branded cowgi segment and goat cheese holds 35% market share in the cheese category. We have witnessed a strong operational execution despite of challenging macro factors. Average mid price increased by 18% YoY to rupees 37 rupees per liter. Yet we were able to sustain margins and deliver 6% growth EBITDA growth with a margin of 7.7%. Our average milk procurement has now reached to 16.5 lakh litres per day marking a 10% increase over the last quarter. This demonstrates the strength of our procurement network and our deep connect with the pharma community. Our gross profit margins improved sequentially from 25.1% in Q4FY25 to 27.4% in Q1FY26. This was aided by improved improvement in product mix and the ability of our premium branding to command uprising power. The standout of this quarter is contribution of our new age business so the quarter the new age business now contributes to around 9% of our total revenue over last year which was 6%. Both the brands Avatar and Pride of Cows have exhibited robust growth of 57% YoY reinforcing the consumer demands for good quality products. Paragmil food steadily evolved from a dairy led enterprise into a diverse FMCG company and now we are heading towards health and nutrition segment. This move was driven by our foresight into India’s shifting dietary patterns with protein becoming a key component in everyday nutrition. The Indian sports nutrition whey protein market is expanding. Currently it’s valued at 1600 crore and is growing by 30% CAGR. Despite being cluttered with international brands, the market still lacked transparency and localized innovation. This is where Aoudar India, our homegrown 100% vegetarian farm to shake away protein brand has carved its niche. The milk is directly sourced by us and processed at our state of art integrated facility. Avatar brings unmatched quality and traceability in just a few years. Avatar has scaled eight times over the last three Q1s establishing itself as one of the top players in the Indian sports nutrition space. With a robust 360 degree marketing engine and a modern multi channel distribution strategy. We are present across from our own website, Quick Commerce, e Commerce organized trades. Avatar is gaining a rapid consumer trust and innovations like Protein Wafer bar is expanding our footprint into functional snacking providing the brand’s adaptability. As pyragmal food continues to strengthen the presence in nutrition, Avatar stands as a shining example of how we can lead protein revolution and unlocking the significant future growth. Our second business in the new age business that is Pride of Cows has reported a 36% value growth driven by new product launches such as Greek yogurt with 8 grams of protein and low fat high protein Paneer and deeper penetration through Quick Commerce platform. Pride of Cows launched a disruptive brand campaign titled as what is the Source? To spark a critical conversation around the origin and authenticity of everyday products, especially milk. The campaign aims to educate consumers on the importance of choosing safe, clean and traceability source, highlighting our single origin farm owned model as a mark of purity and trust. To amplify the message, we adopted a 360 degree integrated marketing approach Print media where we took over the front page of Times of India, key city supplements such as Bombay Times, Delhi Times and Bangalore Times and even regional. Dailies like Sandesh and Gujarat Samachar. Digital campaigns engaging diverse and credible influencers across the industry like fashion, sports, journalism who resonate with the theme of what is the source? So when it comes to news and you check the source. So we got Faye d’ Souza who’s an award winning journalist, a popular cricket commenter, Jatin Sapru, founder of Curly Tales, Kamya Jani and influential podcaster and entrepreneur Raj Shamani. This campaign not only strengthened our brand recall and the trust but also reinforced Pride of Cow’s unique positioning as premium single origin dairy brand in highly common market. Our other brand building initiatives remain robust and sharply focused through a 360 degree marketing approach. We engaged with diverse consumer segments via traditional media or digital campaigns and influencer collaborations just to highlight a few, we were present on the CNIA Awards and we also did an integration with Maharashtra Hasya Jatra. As we approach the festive season we are well prepared with a diverse portfolio of value added products including ghee now folded into traditional sweets cheese to meet the seasonal demand. Our vision remains clear to transit from a dairy company into holistically led FMCG and now into health and nutrition. With a strong foundation in place, we are confident of sustained profitable growth while continuing to deliver value of our stakeholders and nourishing lives across India and beyond. Thank you so much for your continued trust and support. Over to Brian to take this forward.
Bryan De Pena — Head of Investor Relations
Thanks Akshali. We’ll just wait for a couple of few seconds for the question queue to line up.
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 then one their touchstone phone. If you wish to remove yourself from the question queue you may press Star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Param Vora from Trinetro asset managers. Please go ahead.
Param Vora
Hi, good evening. Thank you for the opportunity. What I would like to ask is can you elaborate on your whey protein and sports nutrition strategy? So are you planning any international partnerships or D2C brand expansions in this space?
Akshali Devendra Shah
Sorry, your voice was a little foggy. Can you repeat the question?
Param Vora
Okay. Am I audible right now?
Akshali Devendra Shah
It’s better.
Param Vora
Okay, so what I wanted to ask you is can you elaborate on your whey protein and sports nutrition strategy? So are you planning any international partnerships or, you know, D2C brand expansions in this space?
Akshali Devendra Shah
Hi Param. So if you know our whey protein is probably one of the fastest growing category that we have and we in fact have tailor made and created a whey protein which is did a lot of research for almost five to six years on developing a product and we did a collab with an international scientist to get us the right product formula going forward. We are now forayed into a protein snack functional category where we have launched whey protein bar and we’re soon going to expand into product which are similar to that. We have newer flavors and into a snacking category of protein.
So that’s the plan for whey protein moving forward. We’re already a B2C brand because 80%, 75 to 80% of our protein business comes from our website and Quickcom and ECOM websites and 20% of it comes from the traditional platform.
Param Vora
Okay, understood. And no, what I wanted to ask was are you planning any international partnerships with the brand so that you can, you know, maximize your reach and increase your exports.
Bryan De Pena
So as of now, this brand is catered to say hi, this is ankit here. I’m just adding this, this brand is catering to Indian market. Markets only we know India being a protein deficient. So we worked upon it. Ashali mentioned in our opening remarks we have worked consciously to solve the problem for the protein deficiency for the country and in India itself. The way protein is imported, most of it is an imported one. And that is where the problem lied. Where you didn’t know the source. There was a lot of adulteration in the market. And from all considering all this problem I think the solution came out was Avatar. And this is what you see as avatar.
Akshali Devendra Shah
Now just to add to that param that we are the pioneers and the only whey protein manufacturers of sports nutrition in India. So from scratch, you know from sourcing of milk to making cheese and drying of protein, everything is done at our facility and which we say that we do not need any international collaboration to take this forward because you know we have everything in house. Plus you are talking about exports. The Indian market is growing at almost 30%, 35% CAGR. And we see a great potential here in India. So we’ll continue to grow this. Grow this brand in India itself.
Param Vora
Okay. Okay. Understood. Thank you.
Operator
Thank you. Our next question comes from the line of Kiran D from Table 3 Capital. Please go ahead.
Kiran D
Hi. Thank you so much for the opportunity. I have two clarifying questions. K
Operator
Iran sir, sorry to interrupt. You’re sounding very low. If you can just increase the volume or if you can use.
Kiran D
Is this better? Is this better?
Akshali Devendra Shah
Yeah, it’s better.
Kiran D
Okay, perfect. Perfect. I had two clarifying questions. So just on core categories, right? We are at 487 crore this quarter. I don’t have an equivalent number of Q1FY25 because the company’s presentation didn’t have it. But if I look at Q3 onwards from where you started reporting core category liquid milk and all that stuff. So core categories was a 530 crore revenue business. Now in Q1 it is 487 crore. I’m sure. We have taken pricing actions. We have increased distribution, we’ve increased advertising. So what amount of seasonality should we kind of consider? Because this is actually de grown like 530 crore in Q3 to 487 in Q1.
Bryan De Pena
Yeah. I would like to clarify.
Akshali Devendra Shah
Can you see the slide number? I don’t know if you have the presentation open. We have this type number eight. Number eight where we’ve given you the previous year breakup as well of core categories. I would like to.
Unidentified Speaker
Clarify here. See, till last year we were reporting value added products which was addition of overall portfolio. So we have classified core categories as Ghee, cheese, paneer separately and we have given the breakup for all the last few ones for the past four quarter one and similarly for the last five years in the similar slide in the investor presentation itself. So overall 56% was the composition of the overall turnover four core categories last year Q1 which is up 14% and hence the turnover composition now is 57%. We have mentioned the growth as well. It’s 14% growth value growth over the previous year.
Kiran D
Got it. So there is immense amount of seasonality, sir. So that’s the point I wanted to Understand is it Q3 Q4 highest in core categories and Q1 Q2 is lower Q3 Q4.
Unidentified Speaker
See overall we cannot compare. You are looking at seasonal. Of course there is some season during festive during winters different. There is definitely a product mix which plays but core categories is something which has been at 57% for the year as a whole last year also. So the core remains core. It has remained at 57% of last year versus same as current year Q1FY26. Got it, got it, got it. That’s helpful sir. So my second clarifying question. You have had good growth on new age business.
Kiran D
My only request is at least if you could give us a percentage split between Avatar and non Avatar. Again, I’m not looking for Pride of Cows and other new age business products but just Avatar because there’s an immense focus on Avatar just like you gave it in the initial commentary and the last question as well. Focus on Avatar. What is the percentage? Should we assume a 5050 percentage split between Avatar and non Avatar within the new age business? Is that a fair assumption?
Unidentified Speaker
I’m sorry, I would like to differ over here. See the way we give our core categories where we combine ghee, cheese and paneer. Same way we have created a new age business which is right now Avatar in Pride of Cows and tomorrow there could be addition to this business stream. So we are focusing new age business. It is a premium, strong premium business. Both are on high gross margin, EBITDA margin and hence we have combined this category which we are focusing as a new age business which is more of a premium business. So we are not giving a split between the revenue for the both.
However we have given the growth numbers. Avatar has grown 8x over the past 3/4, past 3q ones if you look at and Pride of cows has grown 36%. Yoy.
Kiran D
Sure sir. Okay. Thank you so much.
Unidentified Speaker
Yeah. We just wanted to clarify. We are focusing on both, so there is an equal focus on both, and hence we do not.
Unidentified Speaker
Get into splitting the numbers and in fact there’ll be additional premium premium products which are going to come and which will get into this new age business as we move along.
Kiran D
Yeah, so the only reason, again just to clarify my question, the whey protein business or the protein business per se, there are many private players who are getting a lot of good valuations. So our business given the market cap and where it is, it would be really helpful again something for the management to think about if you could split Avatar and Non Avtar. Again I’m not asking for Pride of Cows and other premium category business splits, but Avatar and Non Avatar would give a very helpful insight to the investors as well in terms of where our, how our Avatar business is growing and what kind of valuation can be ascribed to this Avatar business.
Unidentified Speaker
See, we are not looking at, again as I mentioned, we are not looking at one brand. Avatar and Pride of Cows both are core to the heart, close to the heart. So both these brands are growing phenomenal and hence you see an overall evolution in the percentage contribution. However we have given to give you indication, we have given the growth numbers in terms of how both brands are performing and overall new age business has grown 57% YoY. Again, that combined number has also been provided. So I hope that suffices.
Kiran D
Got it. Okay. All the best. Thank you so much.
Unidentified Speaker
Thank you.
Operator
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit yourselves to two question each per participant. If you have any further questions, you can rejoin the queue. Our next question comes from the line of Resham Mehta from Green Edge Wealth. Please go ahead. Y
Resha Mehta
Yes, thank you for the opportunity. So the first question is, you know, if you could just talk about the unit economics of, you know, the cow from your Bhagya Lakshmi farm. Typically, you know, let’s say what would be the per cow cost, you know, at the time of purchase? What would be the lifetime value of the cow? Like how many? What would be the yield potential revenues over the lifetime of the cow? What is the typical lifetime of the cow? And then typically then what is the residual value of the cow? And a related question would be that you know, on your balance sheet there are biological assets. So how exactly is the accounting treatment for that?
Unidentified Speaker
Good evening. As far as cow is concerned, we know we don’t buy any cow. It’s our own generation since last 15 years. So we don’t have, we don’t have to buy any cows. We have about 4,500 cows and then with the natural, you know, birth and all, then we are adding up.
Unidentified Speaker
Our stocks. So just to clarify that there is no buying of the cows in our system as far as accounting is concerned. I think Ankit can elaborate. Y
Akshali Devendra Shah
Eah, so I think the question was on the yield and the cycle.
Unidentified Speaker
Yeah, yeah. So we have our own, you know, specific grid. So one is that very important for getting the yield and second is the feeding. So feeding for feeding we have our own crops which are converted into silage which gives a better quality of milk with the better yield per cow. So just to give you the indication that if you the same cow it is in with the farmers, they give about 8 to 10 liters of milk. But in our farm the average yield goes to 26 liters. So almost three times. So that is, that is one with a better protein and fat content. So this, this is also, you know, result of the better feed and management.
And as a, as a cycle the cow can give birth for, you know, eight to 10 times in the life cycle. It can go up to 14 also but average 8 to 10 times. So after that, you know, the cow becomes dry. So I’ll answer the question on the accounting treatment ratio. Right brand.
So hi Resham. Yeah. So the accounting is done as per India’s 41. So as per index 41, all the biological assets are measured at of course the initial recognition is done at a fair value, less cost to sell. So there is a separate accounting standard which applies to it. And as on the balance sheet date of March 25, the overall CoW valuation was 87.6 crores in the balance sheet.
Akshali Devendra Shah
So you know, just trying to understand that what would be, you know, like the potential revenue from the cow over its lifetime and what would be the cost that you know, you would kind of incur from a feed and you know, maintenance standpoint and also at the end of the life cycle you sell the cows and if yes, like typically what is the, you know, value that you know, one cow yields? Yeah. So on the life cycle, 10 to 12 times. So then 10,
Unidentified Speaker
Two times there is a, there is a cycle which runs for a cow. Typically what happens is we have the cows for five to seven cycles and then we sell the cow. So the cow is generally to our farmer connects because we have a strong farmer connect. So we sell it to the farmers.
Akshali Devendra Shah
So even the next generation for them and the yield that they achieved from that is far superior because you know, these are our farmers which we have from our connect and eventually.
Resha Mehta
What is the value that you know at the end of the cycle that the cow yields? Like one cow on an average.
Unidentified Speaker
See again, because the cow has a life cycle, the assets is valued considering the revenue potential, etc. But however, when we sell in the market because the all the cycle, all the milking cycles are not exhausted. So typically it ranges of course we can sell between 1 lakh to 1.5 lakhs after that five to seven cycles. And then what does that reflect in your other income? Yeah, so it is if there is a. If there is a profit on sale then it of course reflects in other income or if there is a loss on sale, it gets part of the other expense.
Resha Mehta
And typically your other income in the past few years has been in that range of 30, 40 crore. So that is in lieu of this sale of cows or is there some other element to it?
Unidentified Speaker
No, no, there will be other elements to it as well because typically the cow valuation, for example, I’ll take a last year example. Last year total cow valuation was about 13 odd crores for the year as a whole.
Resha Mehta
Okay, okay. And would it be possible to give some rough sense of your cheese revenue between B2B and B2C? See, cheese as a business, we have not given a specific split.
Unidentified Speaker
Our core categories comprises 57%. However, we have given a separate split in terms of the B2B and B2C business, of the overall business as a whole whereby 65% is the B2C business and almost 35% of the business is a B2B business. But would it be fair to say that B2B cheese would be like 70% or thereabouts or perhaps more or less? We would not like to share those specific details. No problem. And lastly, you know, on the
Operator
Risha. Ma’, am, may we request to return to the question queue for follow up question questions please as there are several other participants waiting for their turn.
Resha Mehta
Sure. Thank you.
Operator
Thank you. Our next question comes from the line of Bhat Gupta from Share Value Capital. Please go ahead.
Bharat Gupta
Hi, sorry to correct, it’s B. Gupta from Fair Value Capital. A couple of questions from my side. So first, can you provide some breakup of venues in terms of the regional split like what will be the contribution coming in from the north, south, east and west?
Akshali Devendra Shah
Yeah. Hi Ankush. So to give you a regional breakup, we’ll be very. Difficult because we have around five to six route to markets which are, you know, indifferent in nature. So to tell you specifically from how much of it is coming from which region would be very difficult to give this breakup. And plus it’s very different for each business category versus you know, if you check the new age business versus your fresh milk which is very south and west centric to Goazan and goat cheese which are very very different in nature. So we do not share breakup of region wise, but any market share which you can highlight with respect to any of the territories which you are catering to. We’ve already shared that we have around 22% market share in the branded cowgi segment and 35% market share in cheese that is I think on the Pan India basis.
Bharat Gupta
But with respect to western market or with respect to northern. So what will be the contribution from the core categories? I’m just asking with respect to the market share.
Unidentified Speaker
With respect to the market share,
Bharat Gupta
Right.
Unidentified Speaker
With respect to core category we have given of course we subscribe for the core categories market share only and thereby while we have a full dairy report from iMark but we report branded cow ghee segment separately for the flagship brand Govardhan for our ghee product and for cheese Also we report 35% market share based on the IMARK report. I think that report will be available. Maybe you can source it from iMark. Definitely.
Bharat Gupta
Secondly, with respect to the RM prices I think the milk prices have gone up by 80 odd percent as you mentioned in your press release. So what kind of a pricing hikes we have already taken? And going forward, how do you see the RM prices trend to play out in the foreseeable future given out a strong monsoon season this time?
Unidentified Speaker
See while as you rightly pointed out there is 18% yoy increase in the RM prices and so with this commodity push we have been able to maintain the gross margins which is almost at flat versus yoy. This only demonstrates of course there are two parameters about it. Of course, our ability to command pricing power in the market and pass on the price increase as well as the product mix which has improved and we have been able to balance with the gross margin. So I think both these parameters have worked together to help us maintain our gross margins versus sequentially while the milk prices are 2% up sequentially.
Unidentified Speaker
Were to increase as the product portfolio expands for the newer business. But there’s no direct comparison. That’s what I wanted to highlight.
Ankush Agarwal
No, I get it. I think the comparison was because our working capital cycle is very different from our peers which is understandable because we have a much higher value added share. But at the same time the gross margin is not compensated. In terms of higher gross margin then obviously the ROC either way is much lower. But I got your point. The second question was around debt and the interest cost. If I see last two years our debt is fairly stable at around 600 crores. But our interest cost on the P and L has gone up from say about 50 crores to almost 90 crores. I’m trying to understand why that is happening.
Unidentified Speaker
Sorry, sorry, your. Your question. I was. I could not follow your question. So your debt over last two years is broadly stable at around 600 odd crores. But the interest cost on the PNL has jumped from 55 crores in FY23 to 93 crores in FY25. So. So even though the debt is not increasing but the interest cost has almost doubled.
Ankush Agarwal
So you can explain why is it happening?
Unidentified Speaker
Yeah, I’ll explain that. But continuing to the previous question which is more about. See we are brand which is a national play and we are able to set up that distribution network Pan India. So that is where it is not direct comparable. Now coming turning to your question on the interest cost. See overall our net debt is 560 which is broadly flat across both the years and gross debt has marginally increased. If you look at. So that is why your interest cost sits in the interest line item and there is a other income on the fixed deposit or the investments goes in the other income part.
Having said that, there is an additional interest which is being seen because of the multiple assets on lease. And for as per ROU accounting the interest cost on the lease also resides in the interest cost which over the past two years we have invested and got into the operating lease aspects. So hence you can see as per the schedules also of the interest cost that largely it has increased in the ROU part. The rous are fairly small for us I think. I don’t have the FY25 schedule but FY24.
Ankush Agarwal
The increase in interest cost is primarily because of other interest expense which I want to understand what it is.
Unidentified Speaker
The other interest expenses are largely related to the bank charges. The lead bank charges any discounting which happens with respect to the receivable. These are all miscellaneous financing related transaction whereby for example, if your receivable is a 90 day, we can discount it and we can get it in advance. So these.
Unidentified Speaker
These are charges pertaining to that only.
Ankush Agarwal
Okay, fine. Thank you.
Operator
Thank you. Our next question comes from the line of Siddharth Vaid from Ved Spice. Please go ahead.
Unidentified Participant
Good evening. I hope I am audible and all of you just wanted to know on a yoy basis there was a marginal decline in the EBITDA percentage due to a higher advertisement and promotion spending. So how are you viewing the return on investment on these spends? See, first of all your observation is right.
Unidentified Speaker
There is a marginal decline and there is a higher Ad Pro which we’ve specifically called out as per our investor presentation. How do we look at is more of a see return on the Ad pro is more on the long term. So we continue to focus on brand building initiatives. That’s why we are present across and we are focusing on consumer cheese. We are focusing on Avatar for all the digital campaigns. There are several campaigns on Pride of Cows. All these get reflected in the of course the overall revenue growth and that’s where you see the portion on the skim milk powder or the ingredient business has declined.
But however the other core categories as well as the new age business has done phenomenally well and we are happy to invest behind the band and we will stay put on to the strategy for investing into the brand. However, we understand and we will be able to, we will manage it within a certain threshold. We are not here to go overboard on the ad spends and there is a certain plus or minus in particular quarters. That is what we overall manage. But besides the brand investments, if you look at the gross margins are flat mainly because of the product mix as well as because of the pricing which we have been able to pass on to the consumers.
Unidentified Participant
Makes sense. I hope you guys have a good day. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. Our next question comes from the line of Yash sir from MIPL Family office. Please go ahead.
Unidentified Participant
Hi, am I audible?
Operator
Yes sir, you’re audible.
Unidentified Speaker
Yes, yes, you are audible.
Unidentified Participant
I wanted to broadly understand the variation in gross margin between the core categories. So your core products, your new age products, Kim milk, etc. Just to kind of understand the movement quarter on quarter in your margins.
Unidentified Speaker
Yeah, I’m sure you will appreciate that the category wise gross margins are core part of the business to operate for the company and it is maintained.
Unidentified Speaker
At the company’s level, even if you were to look at the peers or benchmark, whether Nestle or Marico, you will not be able to get the gross margin at a category level because it is generally the price sensitive information and of course the company is confidential information and hence we would like to abstain from sharing.
Unidentified Participant
Okay, that’s fair. But would it be a fair assumption to make that given that your value added products have grown about 50% year on year, margins have either stagnated or declined marginally, that those entities are currently more of a drag on your margins and the profitability is yet to come. S
Unidentified Speaker
O there are two aspects I’ll help you understand. One, the core categories have not grown 50%, they have grown 14% year on year for the quarter one while new age business has grown 57% and hence that has of course contributed to the overall gross margin. But having said that, in core categories when there is a commodity push, you will be able to appreciate that whenever you pass on certain the cost push and whenever if you are trying to pass on the same quantity in the value terms on a per liter or a per kg basis on the same thing, then because of the fractions the overall percentage margin comes down always in an inflation cycle because you tend to pass on only the relative cost push protecting your absolutes.
So I think that is why you look at there is a the percentage margin drops but however with the improved profitable mix I think we have been able to maintain our overall profit margins and that’s why you see the PNL where it is
Unidentified Participant
Got it. And last question is across our categories, would you be able to share what volume we’ve been able to do through slightly newer age E commerce channels like Quick Commerce
Unidentified Speaker
While we have not given the volumes at a channel level, but just to highlight that our volume growth for the core categories was 9% for the quarter one and value growth was 14%. So the delta 5% is nothing but the inflation which is and hence we see overall 14% growth in the core category. Now coming to your question specifically on the channel, I think channel composition is something which has not been specifically shared. However we can update you that overall the total business comprises of B2C and B2B business whereby 65% is a B2C business and 35% is a B2B business. Of course Quickcom is a faster going channel etc etc. But we do not share particular number. See we have been able to ride on. I’ll update you on Quickcom I think thanks to Quickcom we have been able to ride onto that network. That’s where you see in Pride of Cows there is a stupendous growth with respect to.
Unidentified Speaker
The other portfolio other than the milk, which is Ghee, Paneer and Curd. Similarly we look at, we have launched a travel pack for Avatar and Avatar also listed in Quick Comp. Similarly you look at Paneer as a category which is growing significantly on Quickcom. So of course Quickcom has their own advantages whereby so we have to be on, we have to be agile enough to be able to ride onto that network and which is the proactive call. I think the company is there across the channels. So it’s not that we are not present in any of those channels.
Unidentified Participant
Got it. That’s helpful. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you. Our next question comes from the line of Debashish Niyogi from Aban Capital. Please go ahead.
Unidentified Participant
Hello, Am I audible?
Unidentified Speaker
Yes, hi.
Operator
You’re audible.
Unidentified Participant
Okay. First of all, congratulations to the team. Actually you’ll have created great brands. So which is evident now my question is, Allow me two minutes to, you know, give a context to the question. So on one hand we are seeing our B2C channel sales is more than 2 3rd our value added product we are our contribution to the total revenue again is more than 65, 70%. Now this compares to Hudson of only, only 30%. While I understand they are regional players and we are national pair. But in the previous con call I think Ankit mentioned that our new age business actually has more than double the margin of the business. So my question is if the new age business is growing and we have a double margin on those business, why it’s not reflected in the operating margin?
Because SMCV is all about brand. The brand is very, very strong. So why it’s not reflected in the numbers, is it because there are expenses for Pan India distribution which is significantly higher and which is not yielding that throughput which is supposed to or there are some strategic funding because of which the profit is coming down because you’re giving at the console level. Right. There could be strategy funding for the new age business. So what, what is it which is not reflecting in the number? Because FMC is about pricing power. So we don’t have pricing power in the rest of the geography.
Unidentified Speaker
Yeah. Hi. Hi Devashish. I would answer each of your questions. See, regarding your.
Unidentified Speaker
You started with competition. See competition is a regional play. Milk has traditionally been a regional play where it is not economical to transport water. So hence the dynamics on a regional pay with respect to EBITDA margins is absolutely different versus a national player and that too who spends heavily on the ad pro I think. And focusing on building the brand is something a different strategy. So we are onto maybe you can say a dairy FMCG who wants to create brand build brand with the focused efforts on brand building initiatives. As I would like to reaffirm what I mentioned in the last call versus this call. Yes, the gross margins are superlative in new age business and almost double of the average of the company’s gross margin. However, what when we look at the percentage increase is only from 6% to 3% which would ideally translate to a certain mathematical number.
But as I mentioned in the previous question, what happens is when we pass on a certain cost push, the cost push is passed when the percentage terms we are not able to pass on that in percentage terms it is always that the cost push is passed on to the consumers so that the consumers do not take that additional beat of the additional margin on the increase in the price. And hence we see the mix of Q1 is improved product margin offsetted by a marginal decrease in the pricing. It is not our ability to command pricing in the market. We are a premium brand when it comes to Ghee. Today also we are priced significantly higher than amulet, maybe 100 rupees a litre or maybe more than that and similarly with Patanjali.
So it is our ability to command pricing in the market which is evident that we have been able to grow the core categories at the 9% volume growth despite a significant price increase. Maybe just to give you example, Ghee which was priced at MRP of 700, now it is priced at 790 rupees a litre. So that is the kind of change in the pricing profile which market has been able to absorb and despite we have been able to grow. So again that builds our confidence that we are on the right track and we continue to stay focused with brand building initiatives.
Unidentified Participant
I hope that I understand what you’re saying Amjit. My question is not with respect to last quarter, I don’t look at quarter, I’m looking at say next three to five years. I’m saying as a business and if it is fmcg, we are severely, as per me, we have very strong brands and we are severely undervalued. Because if you see how the market is seeing, it is not an FMCG company because otherwise our.
Unidentified Participant
Market cap to sales is less than 1 severely undervalued. And we have been talking about, you know that we are professionalizing the company. We are moving from a commodity to fmcg. But the market doesn’t believe that because why it is not believing. Because it’s not reflected in the number. Why it is not reflected in the number? Because of two reason, you know, because Roe and ROC is lower than competition and it is lower because our is capital intensive. That is one of the reasons we have biological assets on our books and the profits are lower, you know, the margins are lower there. My question is we are dealing in brands. So if you are dealing in brands, okay, why I can understand that we will take some time lag in parcel the you know, price increase. I’m not talking quarter, I’m talking year, I’m talking three years. Why the margins are lower? Because it didn’t speak about brand power over the past three years.
Unidentified Speaker
Yeah, so. Hi, can you hear me?
Unidentified Participant
Yeah, I can hear. What I’m saying Ankit is that. Yeah, you’re audible. I’m saying, you know why with the value added products our our margin is so low with market share of 22 and 35%. Am I audible?
Unidentified Speaker
Yeah, very much. And let me answer. See there is a conscious effort. I’ll apprise you with the details. See overall if you look at the past three years and then coming three years will be separate. So in the past three years of course our EBITDA margins have improved from 5% to 7% to 8 and a half percent year on year. Largely because see of course we have been able to grow with 18% CAGR for the past three years. We already have a setup distribution network completely because the supply network over here is a three method supply chain for the wet transport, the coal transportation for cheese and the ambient transportation besides the Pan India distribution network.
Even on the sourcing front we are able to capitalize much because our yields for the procurements are improving per BMC etc. So of course the efficiency, the scale, as the scale improves, the efficiency is coming and which is reflecting in the overall EBITDA margin profile which is improving year on year. Our aspiration is also to grow it consistently move to a double digit and then of course slowly enter into the teams category. So this is what our conscious efforts and as a company we are all targeted towards that. So for the next couple of years definitely you will see us moving up the ladder from a single digit or a high.
Unidentified Speaker
Single digit to a, at least to a double digit levels in the over the next couple of years. I would say maybe in say 12 months, 18 months to 24 months. Not giving a specific time frame, but yes, that is what our aspiration is to be.
Unidentified Participant
No, fair enough, good answer. So I’m not looking at, you know, guidelines and I’m not looking at specific numbers. Something the internal aspiration in two years on a ROC point of view should be above 20%. That’s a fair internal aspiration.
Unidentified Speaker
Yes, yes. So with the improved margin profile of course the ROCE should significantly improve because we have taken again you will see the last investor presentation. Overall we have worked upon reducing the working capital cycle which is again one of the important part of the capital employed. So we have put in a conscious effort to reduce the overall working capital. So that’s where we see upliftment in the ROC also in the past three years. And same way as the margin profile improves with the same debt. See, as you know, even with the same credit lines we have been in the last five years we have been able to double our turnover with the same credit lines. So we have not added genuinely any additional credit lines. So besides that, if you’re able to jump shift it. So hopefully with the improved aspiration for the improved EBITDA margin we would be able to jump shift on ROCE as well. But again here we are not giving any particular guidance.
Unidentified Participant
Yeah, I can. I fully understand.
Operator
May we request to return to the question?
Unidentified Participant
Thank you. Thank you very much and all the best.
Unidentified Speaker
Thank you. Thank you so much. God bless you.
Operator
Thank you. Our next question comes from the line of Aditya from Securities Investment Management. Please go ahead.
Unidentified Participant
Yeah, hi, thanks for the opportunity. So I just wanted to understand how much of our milk procurement is through agents and how much is from our own distribution network.
Unidentified Speaker
So you know, whatever milk we collect, we procure 40% our own and 60% is through agents. And we are trying to increase our own milk procurement because of the, you know, we want to have sustainable milk procurement with the quality. So we are increasing our own milk procurement. Right now it is 40, 60, 40 our own or 60%. I’ll say just on a lighter note, both are. Both the milk are our own, only from our own network.
Unidentified Speaker
Farmers which only this method of channelizing.
Unidentified Participant
Any reason why we have such a higher share from agents? Because what we understand is other players, other listed players majorly procure from their own distribution network, which gives them an advantage in pricing and also in terms of supply availability. So why do we have, you know, 60% coming from agent,
Unidentified Speaker
Even if we have, you know, what you call it from the other sources, they are just like our own. They are, these parties are associated with us since last two, three decades and they are consistently supplying the milk with the quality what we need. So it’s not that, you know, they are on and off and they don’t. We keep adding the suppliers, they are our own supplier. And then also we are increasing our own milk procurement by putting the bulk milk cooler in the villages. But even the other sources also they are consistent suppliers to us with the quality what we want. So it’s just matter of how we can lye the mill. Okay. And so now just wanted to understand the economics, you know, of cheese and whey.
Unidentified Participant
So for producing one ton of cheese, how much whey do we get as a byproduct?
Unidentified Speaker
Yeah, so just to give you some figures that for baking 11 kilo of cheese, we need about 9 liters of milk. And when we make cheese, then 90% comes as a way. So that is, that gives you the equation of milk to cheese to whey. So for one liter you need one kilo, one kilo of ki, you need nine liter of milk. When you take nine liter of milk, 90% goes as a way and 10% is achieved.
Unidentified Participant
Understood. So now when we are producing our quantity of cheese, so the amount of whey which we are getting, is it now purely sold as Avatar or there is also some B2B sales of whey?
Unidentified Speaker
Yeah, it’s a very complicated filtration system which we have a very high technology, state of the art plant. So we keep extracting whey protein. Then out of whey protein we also have lactose. So lactose goes to the, you know, all the pharmaceutical companies as a, as a replacement of the sugar. So for the, for the baby food. And also basically it’s all whey derivative, what you call it, depending on the, what is the percentage of protein we have. So we can have protein from 28% to 60% to 80% to 90%. And some of that protein is used as a raw material for Avatar or it can be sold as B2B also. But right now, because Avatar.
Unidentified Speaker
Consumption is increasing so we consume more of our protein for our tar.
Unidentified Participant
And what would be the rough proportion of the total whey which you produce? Hello, am I audible?
Unidentified Speaker
Yeah, please please understand. See institution business is a separate business ingredient, business split. We have already shared and overall our B2B sales comprises 35%. So we do not get into specific in terms of how much whey do we sell or how much whey do we consume in house. I hope you appreciate.
Unidentified Participant
Sure, sir. Thanks for answering your question, sir.
Unidentified Speaker
Thank you.
Operator
Thank you. Our next question comes from the line of Darshil Javeri from Crown Capital. Please go ahead.
Unidentified Participant
Hello, good evening sir. Thank you so much for taking my question. Hopefully I’m audible. Hello, yes, are you audible? Please go. Yeah, yeah, yeah, hi. Yeah, yeah, yeah. So a lot of my questions have been answered so just wanted to, you know, just get back. I think in the last call we were thinking like, you know, we have a goal of reaching 10,000 crore revenue. So you know like I don’t want maybe like a short term guidance but over the long term we still maintain our guidance. Like you know, we can grow at 18%. Right. So. Hello. Yeah. Yes, sorry, you want the breakup of 10,000. So I was saying that we have an internal target of I think reaching 10,000 crore revenue. Right. So wanted to know is that still like in a play for the next four years or how do we see our, you know, revenue growth trajectory? Sir,
Unidentified Speaker
This is what we are targeting for next, I would say next five years, right. From whatever status what we have today. And that is possible because we have all the ingredients to do that. And that’s what you know, we have been telling you. The way we are expanding our distribution, the way we are building our brands, the way we are creating new categories and value added products. So all the, all these channels are already, you know, put into the system and now we have to just take the benefit of all the inputs what we have done to reach to those, those figures. Of course we need lot of mill for that also.
We have, we have done a lot of efforts in getting more mill from our own system. So this is possible now. Yeah, see I would like to add, sir, fundamentals have been taken care of. See I think we have all this while we have worked upon focusing on having the right fundamentals in place, right building blocks in place to ensure that we are geared up for.
Unidentified Speaker
For the 10,000 crore aspiration. It continues to be our aspiration and we are certain that we will be able to achieve it soon.
Unidentified Participant
Okay, okay, that’s great to hear sir. And I just wanted to know like I’m a bit new to the business so just want to know is that like a seasonality impact for us? Like because just wanted to see like you know, quarter on quarter, how does our, you know, flow go through or is it similar business? Just wanted to, you know, chew your brain on that a bit. Hello?
Unidentified Speaker
Yeah, there is a, there is a, there is a little, little bit pinch of seasonality as you know that you know, as a part of the consumer, you know, community, we know what kind of seasonality is there in our kind of business. Of course, you know, festive seasons have little bit more, you know, consumption. That also depends on kind of monsoon we have in India and that also drives the consumption post monsoon because of the farmers have better crops and income and all. So it all depends on the seasonality from the point of view the agriculture economy, how it’s growing or overall economy is going as well as the festival season is coming.
So in coming season we know that monsoon is very good in this year. Perhaps this will drive more consumption in coming festive seasons. Okay, okay, okay. Just to add to that. Yeah, just to add to that, if you see past three years trend, we’ve actually done far better in the Q2 Q3s, Q4 quarters and we see a lot of growth in numbers during the festive season and the winter because of the cheap consumption goes high.
Unidentified Participant
Yeah, correct. Correct. That’s what. Yeah, yeah. So in general a Q2 Q3 are better than what Q1 Q1 would be the slackest quarter for us is if that’s the fair inference, you enjoy pizza in December more than. Yeah, that’s a very fair thing. And, and I know a lot of people have asked about ebitda. I know and you’ve given a good explanation but just wanted to know like in general what would be our aspiration? Like where do we see as the business that our EBITDA can reach?
Unidentified Speaker
See again, thank you for noting on the previous questions about answering on the yoy changes in ebitda. But as I just mentioned in the previous question itself, we are looking at our aspiration is of course inching up ahead the way we have been inching up from five to seven to now eight and a half in the last year. So of course this year’s target is to of course inch up from the previous year having said that we look at in the medium term, we look at moving, inching up to.
Unidentified Speaker
Double digits and then getting into teams slowly. So that’s our aspiration. O
Unidentified Participant
Kay. Okay. That. That’s really grateful to you. That’s it. From my side. So all the best. Thank you.
Unidentified Speaker
Thank you.
Operator
Thank you, ladies and gentlemen. We’ll take that as a last question. I now hand the conference over to Mr. Rahul Kumar Srivastav, the CEO, for closing comments. No, sir, we are not able to hear you, so we are not getting your audio sa. So we still don’t have any audio from your line. Ladies and gentlemen, that concludes the conference call for Parag Milk Foods limited for today. On behalf of Parag Milk Foods, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.