Parag Milk Foods Ltd (NSE: PARAGMILK) Q4 2025 Earnings Call dated May. 05, 2025
Corporate Participants:
Akshali Shah — Executive Director
Ankit Jain — Chief Strategy Officer
Rahul Kumar Srivastava — Chief Operating Officer
Analysts:
Unidentified Participant
Unidentified Participant
Sanjay Natwarlal Shah — Analyst
Vikram Shukla — Analyst
Pallavi Deshpande — Analyst
Raman KV — Analyst
Vansh Totlani — Analyst
Naitik Mutha — Analyst
Chandresh Malpani — Analyst
Rishabh Gang — Analyst
Sanika Khemani — Analyst
Riya Agarwal — Analyst
Aditya Khandelwal — Analyst
Amit Mehta — Analyst
Mihir Dhami — Analyst
Prasun Vijay — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Parag Milk Foods Limited Q4 and FY ’25 Earnings Conference Call. [Operator Instructions]
We have with us today the management team of Parag Milk Foods Limited represented by Ms. Akshali Shah, Executive Director; Mr. Ankit Jain, Chief Strategy Officer; and Mr. Rahul Kumar Srivastava, Chief Operating Officer.
I now hand over the call to Ms. Akshali Shah, the Executive Director of the Company. Thank you, and over to you.
Akshali Shah — Executive Director
Good evening, everyone. Thank you for your time today. It’s a pleasure to welcome you all to Parag Milk Foods Q4 and FY ’25 earnings call. I have Mr. Rahul Kumar Srivastava with me, who is the Chief Operating Officer at Parag Milk Foods. He’s worked in dairy industry for 32 years, 22 years with Amul as — and he was the MD for 11 years out of that, 10 years with Lactalis India. Lactalis is one of the largest dairy companies globally, and he’s joined Parag one and a half years back. I also have Mr. Ankit Jain with me, who is the Chief Strategy Officer. He’s joined Parag a year ago. He’s worked in Marico for 15 years and Arvind SmartSpaces as CFO for four years.
Ankit Jain — Chief Strategy Officer
Hi, good evening, everyone.
Akshali Shah — Executive Director
I’m delighted to share that FY ’25 has been a milestone year for Parag Milk Foods, one that showcased the strength of our business fundamentals, the strength of our brands, the impact of the strategic choices that we have made over the past few years. It’s been a year of strong growth, disciplined execution and meaningful progress across the board. India is the largest producer and consumer of milk, contributing over 23% of global milk production. As per the IMARC report, the Indian dairy size is estimated at INR10 lakh crores and is expected to grow at a CAGR of 14% over the next eight years. Indian dairy industry has seen a remarkable transformation over the past — over the recent past.
While milk production continues to thrive at 7% year-on-year, the sector is now witnessing a strong growth in organized retail value-added products, considering a shift in consumer preferences towards quality, convenience and health. During Q4 FY ’25, the milk prices have increased by 12% year-on-year and 9% sequentially. As we step into the next phase of our journey, we are not just thinking in terms of dairy, we are evolving ourselves into a nutrition-enriched protein-led business, which is positioned to meet the evolving needs of modern India and beyond. With robust infrastructure, strong brands, deep consumer connect and visionary leadership, we aspire to be India’s leading dairy FMCG and emerge as a global player in providing high-quality nutritional products.
Let me take you through our financial highlights. It gives me an immense pride to announce that we have recorded our highest ever revenue in the year FY ’25 and for this quarter as well. In Q4 FY ’25, we have recorded a quarterly revenue of INR918 crores, registering a 16% year-on-year growth, driven by a healthy 13% volume growth. For a full year, our revenue stood at INR3,432 crores, up by 9% year-on-year with volume growth of 10%, overall with our core categories growing by 17% in volume and maintaining leadership position. Besides our top line growth, we have focused on improving our profitability. Our EBITDA for FY ’25 stood at INR293 crores, a 30% increase over the previous year with margins expanding by 130 basis points to 8.5% of revenue.
On the bottom line, Q4 profit before tax stood at INR33 crores, up by 141% and our PAT was INR26 crores, a growth of 167% Y-o-Y. For the full year, PAT stood at INR119 crores, a solid 31% growth over the last year. Importantly, we have focused on strengthening our balance sheet across all parameters. Our debt net to equity stands at 0.5 versus 0.6 last year. Further to our debt to equity has improved from 2.4x to 1.9x. Our net cash from operating for FY ’25 was INR212 crores, giving us greater financial flexibility and resilience for future growth.
We delivered a broad-based volume growth led by our core categories, that is ghee, cheese and paneer, collectively grew by 17% in volume during FY ’25. These core categories are fundamental pillars of our growth, reflecting the power of our brand and strong consumer trust. According to the IMARC report, 2024 report, Gowardhan Ghee was commanding a 22% market share in branded cow ghee categories, reinforcing its position as the trusted stable in the Indian kitchen. It stands at number one position at 22% market share. Go Cheese continues to hold the fort maintaining its market share at 35%, a very close neck to neck with its number one. Despite volatility in milk procurement cost, in Q4, average prices rising by 12% year-on-year to INR37 per liter. We navigated this challenge effectively through timely pricing promotion actions, thereby maintaining the Y-o-Y gross margins.
We procured approximately 15 lakh liters of milk daily. At the heart of the system lies our deep stand-holding relationship with over 5 lakh farmers. Our direct procurement model ensures transparency, fair pricing, consistency and quality, which not only secures our supply chain, but also uplift the rural livelihood. This model has enabled us to build a sustainable, mutually respectful ecosystem with our farmers, farmers who are not just our suppliers, but they’re also our growth partners.
Talking about the quality of our products, we believe that good quality commands a premium and our consistent focus on quality, purity and innovation is what sets us apart in the market. We control our entire value chain, ensuring traceability, freshness and product integrity. Our brands, whether it’s Gowardhan, Go, Avvatar and Pride of Cows resonates with our consumers who seek — who are trustworthy nutrition and superior products. This belief in quality is what allows us to not only grow but also command a premium in highly competitive categories. Our relationship with our consumer is built on authenticity and consistency, and we are proud to see growing brand loyalty across urban and emerging markets. Our premium and new age business, which is Avvatar and Pride of Cows also continues to build strong traction.
Avvatar, our whey protein brand, has grown by 41% year-on-year and approximately six times in the past three years. Almost 60% of our turnover comes from e-comm. It’s only — it’s not only captured in the Sports Nutrition segment, but we are also very relevant in everyday health-conscious consumers, thanks to our expanding portfolio and digital marketing strategies. Pride of Cows, our niche premium farm-to-home dairy brand with single origin milk expanded both its reach and product offering. We are now present in seven cities with Pride of Cows, that is Mumbai, Delhi, Pune, Bangalore, Surat and Vadodara. With increased presence across quick commerce and e-retail platform, we are tapping into a fast-moving premium consumer segment.
Coming to our distribution network, we have continued to invest in building a robust future-ready distribution ecosystem, one that serves both traditional and consumption channels. In general trade, we have deep presence, geographic reach and strong distributor relationships, enabling better shelf presence and replenishment. In modern trade, we have built strategic partnerships with key players, improving brand visibility and in-store execution. E-comm and quick commerce have also become a strong driver in our growth story. Apart from these networks, we have our own network where we reach to our consumers directly through our website and mobile applications, reflecting our strong execution and technology for superior delivery services.
Speaking of marketing, it’s been a key driver of brand building and consumer engagement. We have adopted impact-led strategy with integrated in-content branding, partnering with cultural relevant high-reach properties like Kaun Banega Crorepati for Gowardhan and Go Cheese; Bigg Boss for Go Cheese; Maharashtrachi Hasyajatra for Gowardhan; MTV Roadies for Avvatar; and celebrity influencers like Malaika Arora for Pride of Cows. The choice of each of these associations was with a clear intent to engage diverse consumer associates, create salience of our brand and drive trials and repeat purchase. These campaigns were amplified across digital, social, in-store touchpoints to build 360-degree engagement in an omnichannel world. More than visibility, our marketing investment have delivered outcomes, stronger brand recalls, increased modern trade offtakes and higher digital conversions. Innovation is at the heart of Parag Milk Foods. In FY ’25 was a strong year in terms of new product development. The best synergy and forward integration for Gowardhan Ghee was entering into branded mithai market with the brand Gowardhan Khushiyan Mithai. We have also recently launched chikki, which is made out of Gowardhan Ghee in three flavors that is sesame, peanut and dry fruit.
With Go, we have launched flavored yogurt in different flavors. In Pride of Cows, we have launched high-protein, low-fat paneer with new emerging categories in cheese and fresher cheese. In Pride of Cows, we’ve launched bocconcini. In Pride of Cows, we’ve also launched Greek Yogurt with eight grams of protein. And lastly, Avvatar protein bars in chocolate and coffee flavors, which have whey protein isolate and each bar has 10 grams of protein. These launches reflect our sharp consumer focus, deep consumer — deep market understanding and strong in-house R&D. They are helping us drive both vertical within the existing categories and horizontal expanding into newer consumption occasions. Our innovation engine is designed to be agile from concept to shelf.
It’s backed with advanced infrastructure, consumer highlights and rigorous quality standards. In a noteworthy development, we have recently announced a capital raise of INR161 crores through convertible warrants on a preferential basis. We are proud to have marquee investor, Mr. Utpal Sheth, a distinguished investor and a financial strategist. Also, our Chief Strategy Officer, Mr. Ankit, who has also participated in this round. The proceedings will be used for debt reduction, capital — working capital enhancement and accelerating our strategy growth. Their backing is a strong endorsement of our vision, governance and a [Technical Issues]
As we look forward to the future, our strategic priorities remain very clear, trending and accelerating our core categories, brand building and innovation, strengthening our new age business Avvatar and Pride of Cows, evolving route to market and driving financial growth.
We shall now open the forum for Q&A.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] We’ll take a first question from the line of Charisha Shyam Sukha [Phonetic] from Vendure [Phonetic] Growth Partner LLP. Please go ahead.
Unidentified Participant
Hi, good evening. My question was on the lines of operations. So I see that you have delivered 13% growth in quarter four FY ’25, whereas our core categories like ghee, cheese, paneer has grown only by 18%. So I mean — so overall, you’re growing at 13%, but these have grown by 18%. So what are the categories which are growing slower than the Company level growth rate? And what is the strategy on them? Hello, am I audible?
Akshali Shah
Hello? Yeah. So to answer your question, our ingredient business that we supply to a lot of these institutions has degrown, which is majorly SMP that’s degrown by almost 9%.
Unidentified Participant
Okay. And what is the strategy to increase the growth here?
Akshali Shah
Sorry, we can’t hear you clearly. There’s a lot of disturbance on your line. Don’t you please use your handset mode?
Unidentified Participant
So I was asking like — am I audible now?
Akshali Shah
Little better, but not very clear.
Unidentified Participant
Okay. So I was just asking like since SMP has degrown by 9%, so what is the strategy on helping this grow further?
Ankit Jain
See, overall, this ingredient business, largely SMP, skim milk powder is more of a commodity. We have consciously taken this call of — because it is a very low-margin business. So hence, we have consciously chosen this strategy of growing the other segments and more focusing on the core and the new age.
Unidentified Participant
Got it. Okay. On the milk procurement front, for the milk that you’re procuring from outside the farmers, how much is the direct procurement like without any middleman or agent?
Ankit Jain
So overall, you would have noticed that we procure around 15 lakh liters of milk daily on a daily average basis. Almost two-third of the same is procured through aggregators and almost one-third is through our direct own network, through our BMCs, which is bulk milk coolers and CC, which is chilling centers. They are more than 300 in numbers.
Operator
Thank you. [Operator Instructions] We’ll take our next question from the line of Sanjay Natwarlal Shah from Kanishka. Please go ahead.
Sanjay Natwarlal Shah
Hi, thank you. Can you hear me properly?
Akshali Shah
Yes, please go ahead.
Ankit Jain
Yes, pretty much.
Sanjay Natwarlal Shah
Okay. Perfect. Perfect. Thank you. Congratulations on the results and the presentation, which is quite informative. If I may just ask you to kind of gauge ahead over the next 12 months to probably two years, three years, what’s the kind of plan that you have or the expression that you have from a growth perspective, distribution point perspective and the return ratios, ROCE, ROE? How should we think about the Company? Just in terms of how you are kind of aspiring to grow?
Ankit Jain
See, while we don’t give a specific yearly guidance, you are seeking for a next 12 months of growth strategy. But I think the way we have been growing at a CAGR of around 18% for the past three years, we can assume that we, of course, aspire to grow a little higher on the same. And we continue to grow on that CAGR with a focus on — clear focus on, again, the four categories, the new age business and new products which we are likely to introduce and which we have already recently introduced along with that.
Sanjay Natwarlal Shah
Sorry, maybe I didn’t place my question properly. We should, of course, ignore the next six months, eight months, 12 months. But if you talk about a two-year, three-year kind of a journey, where should we — or how should we expect the Company to evolve?
Ankit Jain
See, over — in the last year, of course, there was a visionary statement given by our Chairman for INR10,000 crore mark. We — I’ll ask Akshali to…
Akshali Shah
Yes. So we have actually given a guidance saying that we’ll reach INR10,000 crores in the next four years. And yeah, that’s the guidance that we’ve given. And if you see our past trends, we have grown by almost 18% to 20% CAGR, hoping that should continue.
Sanjay Natwarlal Shah
And then what could be the implication for the return ratios just given the kind of growth?
Ankit Jain
You mean to say return on equity or capital employed?
Sanjay Natwarlal Shah
That’s correct.
Ankit Jain
See, of course, this is a resultant coming from improvement in EBITDA margins. So as we move along, and you would have observed that in the past three years, our EBITDA margins have moved up from 5.7% to 8.5% in last year. We continue to thrive on that, and we aspire to take it to a higher level. But genuinely, we do not give any specific number-wise guidance.
Sanjay Natwarlal Shah
Okay, thank you.
Operator
Thank you. We’ll take our next question from the line of Vikram Shukla, an individual investor. Please go ahead.
Vikram Shukla
Hi, everyone and thanks for this opportunity to ask question to the management. This is one of the Company which I own since last 10 years, but practically, I have lost money despite of being a consumer company. So I just have a few questions for management to ponder, right? So when you came with the IPO, you look like not a probably milk company, but more of a value-added product. But when I look at your number like from FY ’16, which was your listing days actually, the sales has grown 9%, while your EBITDA has grown almost like 7%.
And you know the reason for what it is. Basically, you used to make in FY ’16, 9% EBITDA margin and now it is 7.6%, where your salience of value-added product has moved up quite substantially, 40% from maybe 60%, 70% almost. So I don’t understand that which way management themselves are looking to this business that the sales has grown 9% and the EBITDA has grown 7%. I do agree that there are a lot of disruption happening.
Second, I have a lot of question mark as far as the accounting policy is concerned. So if you go on a very, very long period of time that your other income, if you go in other income, which has grown almost like 39%. But if I go a little bit detail on other income, 60% to 70% other incomes are basically live stock revaluation. And if other income has not grown this much, I think your profitability is lower than the EBITDA growth, but obviously, that will be reflected in your return on capital and ROCE. So my first question is that no other company, whether you look at your peers, which is Heritage and Hatsun, they do not have that much of other income, but you have a very specifically high other income. And very specifically, the other income, 60% to 70% is driven by the revaluation of livestock. So this is my first question. I will probably take — I will ask, say, my second question after this answer. So why you have so much of other income? Because if I exclude the other income, probably your profitability has not even matched the GDP growth in the last 10 years. Over to management.
Ankit Jain
Sure. I’d like to answer your question with respect to other income for the year, for the year FY…
Vikram Shukla
No, I’m not asking for this year. I’m looking at your numbers since last four years, five years. In fact, I have looked at your numbers since last 10 years. So if I exclude the revaluation of livestock, probably your profitability has not grown in line with what even EBITDA growth is, which is lower than the sales growth is?
Ankit Jain
I would like to disagree because our other income rather this year with respect to change in fair valuation for bio assets has reduced Y-o-Y. So in that sense, our EBITDA growth, if you were to exclude other income, our EBITDA growth is much higher, excluding…
Vikram Shukla
Sir, my question is for five years, five years, four years, five years, right? And this is very consistent in your P&L, right? So let me give you — I do understand a lot of dairy business as well, right? So generally, what happened that I know unlisted businesses where if certain livestock is giving more turnaround, then obviously, you revalue because you can sell it at higher valuation. But here, I think the key business is selling the milk, not the livestock.
Ankit Jain
Yeah, I would like to — no, no, it is not the livestock. It is as per the Ind AS, we have to do a fair valuation of the cow, which is growing on an exponential basis and which is our core assets and hence, this other income, which is flowing to P&L on account of accounting standard. And if you were to look at the year FY ’25, out of the total PAT, I’m saying, of the total PAT of INR119 crores, only 11% is other income, which you are mentioning with respect to the biological stock valuation. So it is not material to…
Vikram Shukla
Your other income is still 30% of your business, sir. So anyway, this is my first question, but still, I’m not…
Ankit Jain
So other income has multiple parts. I want to clarify. The other income has multiple parts. When you get through the annual report, you will have all the schedules. But just to update you over call, it constitutes only 11% of the overall PAT, which is the biological revaluation. There are other incomes, which are — which you will definitely see in the annual report schedule.
Vikram Shukla
Fair, sir. Second is my — related to — yeah.
Operator
Sir, I request you to join back the queue, please as we have a lot of other participants waiting.
Vikram Shukla
I have asked only one question madam.
Operator
We have a long queue, sir. If you can join back the queue, please.
Vikram Shukla
Actually one question.
Operator
Okay. Please go ahead.
Vikram Shukla
So second is basically, if I look at your operating cash flow, it has again remained very inconsistent. Whenever you have hold back to the payable, you have reported a pretty good operating cash flow, right? And whenever there is a payable has not been held back, you suddenly reported a very bad operating cash flow. So last two years is good. So is there any specific things which you have done, therefore, your operating cash flow is looking very good? And how it will look like maybe two-year, three-year perspective? Second, is it sustainable?
Ankit Jain
Yeah, I would like to answer. See, for our operating cash flows, there are multiple reasons. One is, of course, the improved profitability, which is evident in EBITDA margins. Number two, it is mainly on account of reduction in the inventory, which we have shown the trend that from 72 days, it has gone down to 61 days. And there has been a conscious effort by the management, by the Company to take care of the operating cycle and operating cash flows, which is part of net working capital. So we believe that we are continuously thriving on to it. And with respect to your observation on trade payables are considering, these are relating largely mainly to milk vendors.
Vikram Shukla
Fair. I will be in queue in case I have the same question. Thank you.
Operator
Thank you. We’ll take our next question from the line of Pallavi Deshpande from Sameeksha Capital. Please go ahead.
Pallavi Deshpande
Yes, sir. Thank you for taking my question. My question was on this expansion in Bhagyalaxmi. So what is the status there? And which breed are we looking for the cows? Because last time with Holstein cows, there was a lot of negative publicity regarding the type one milk. And I think also overall, as a percentage of revenues, it’s not grown. It was in FY ’18, 3% of revenue, similar right now. So just want your thoughts on that. How are we looking at the breed and what are we planning?
Rahul Kumar Srivastava
Yeah. So we have a very specific policy about the breed. We have Holstein Friesian breed, which is basically gives 90% of the global breed production. So it’s a well-established breed. And we only take that breed as our herd. And today, we have about 4,500 such cows in our Bhagyalaxmi farm. And the way the breed is we have our self frozening. So in coming five years, we are going to touch about 20,000 cows with the same breed of Holstein Friesian, which is very productive and very rugged breed in Indian condition. And now we are having a second phase of our farm, which is we have named as the Swarnabhoomi farm, where we have about 5,000 land, which is about 45 kilometers from the Bhagyalaxmi farm.
So that also is under process, and we have already completed a lot of shares there and cows have been transferred there. So maybe within five years, we will be having more than 20,000 cows of Holstein Friesian breed, which is, as I told you, it gives about 90% of the total global milk production of cow milk. And we have — yeah. And we have more than 2,000 acres of our silage production. So we control the nutrition diet to these cows so that we get the best yield and the best quality. So this is also additional arrangements we have done to feed these cows properly so to get the best productivity out of these cows.
Pallavi Deshpande
That supplies to Bhagyalaxmi only, that this 2,000 acres supplies to Pride of Cows only then?
Rahul Kumar Srivastava
Yes. Yes, yes, yes.
Pallavi Deshpande
Our Pride of Cows is only the Bhagyalaxmi milk?
Akshali Shah
Yes. So whatever milk is used in Pride of Cows all comes from Bhagyalaxmi.
Pallavi Deshpande
So not — it doesn’t include anything from this 2,000 acres controlled this thing? My second question…
Rahul Kumar Srivastava
It is 2,000 acre control. Actually, I would like to clarify. We have two farms under Bhagyalaxmi. One is the original farm, which is approximately 25 acres. And the new farm, which is a larger farm is 500-acre farm, which — and both put together have 5,000-plus cows. I hope that clarifies. Because when the number of cows are increasing, we have to set up new farms with a better technology. That’s what the new farm is coming. Yeah.
Akshali Shah
And the cows are also naturally growing. So we’re adding approximately around 500 cows every year and has a multiplier effect. Every year, it keeps increasing.
Pallavi Deshpande
Right. My second question would be what would be the capex for the next two years? And what’s the current utilization for the cheese plant?
Ankit Jain
Capital expenditure for next year?
Pallavi Deshpande
Yes, next two years. And what’s the current utilization for the cheese plant?
Ankit Jain
Hello? Can you hear me?
Pallavi Deshpande
Yes.
Ankit Jain
So probably I was answering on the mute. If you were to segregate our capital expenditure, we can segregate the expenditure into two formats. One is the routine hygiene capital expenditure, which we need to incur on an ongoing basis for routine capacity expansion. Plus the other format could be a large greenfield projects if we were to undertake. As of now, if you look at, we would be restricting it ourselves right now to limiting this answer to the routine hygiene capex. If you look at Bhagyalaxmi farm as well, the majority of the capex is also completed. Most of the cows sheds are completed, etc. The farm is almost ready.
So from that perspective, as we look ahead for the next two years, I think the routine capital expenditure which was likely in the past, like around INR40 crores to INR50-odd crores, we can foresee annually INR40 crores to INR50 crores of capital outlay. With respect to the question on the plant, the cheese plant investment was already completed. It is fully operational. And now we are almost using our capacity. There will be an adjacency which we will bring in. So we are almost doing 98%, 99% capacity utilization. With respect to further capacity expansion, there will be only adjacencies which will be required with marginal capex and not like a full-blown capex for the entire new setup of plant, which we are evaluating.
Pallavi Deshpande
And what would be the tax rate for the next two years?
Operator
Thank you. We’ll take our next question from the line of Raman KV from Sequent Investments. Please go ahead.
Raman KV
Hello? Can you hear me?
Operator
Yes. Please go ahead.
Raman KV
Yes, sir. Sir, my question is with respect to the preferential issue. Out of the INR161 crores you raised..
Operator
I’m sorry to interrupt. Raman, I’m sorry to interrupting you, it is not clear. Could you use your handset mode, please?
Raman KV
Can you hear me now?
Operator
A little better. Please go ahead.
Ankit Jain
Yes, we can hear you.
Raman KV
So yeah. My question is — I have only two questions. One is with respect to the preferential issue. Out of the INR161 crores which we raised, how much will be utilized to repaying debt and how much will be utilized for working capital?
Ankit Jain
So I’ll answer this. Out of the INR160 crores, we — as per the explanatory statement provided, we have mentioned INR70 crores will be utilized towards debt reduction, almost INR40 crores will be used towards the working capital, almost INR20 crores will be used towards the capital expenditure and the remaining as a corporate general purpose.
Raman KV
Okay. And my second question is, sir, I have seen the presentation as well as the results. So I basically understood that there are three different, the main areas. One is like the core, which is the core business. And then second is the new age business, which you are keen on focusing on. And the other one is milk and intermediate. So can I get margin of the core business and new age business?
Ankit Jain
Practically, this is a confidential information. Hence, we would like to not choose not to answer on the margin front with respect to category-wise margin.
Raman KV
Okay. I just wanted to understand because you said you’re focusing on core and new age businesses, can you just give us the rough estimate about — rough estimation or guidance with respect to two years, three years, how do you see the core business turning out? And how do you see the new age business turning out? Because now I can see that 50% of the revenue is from core business and only 10% to 15% is from the new age. So can we see the new age business going up from 15% to 20% or 25%? And will the margins improve?
Ankit Jain
See, with respect to overall growth aspirations, specifically for new age, of course, it remains core to our heart, and we will continue to remain focused on new age business. But in terms of numbers, we do not give a breakup of how we are estimating our revenues. But we are looking at — as we have told to you overall that we are looking at tripling our revenues in the next four years from INR3,400 crores to almost INR10,000 crores in the next four years. So of course, we will be riding on this product portfolio. And maybe just to answer your question on the margin front, maybe indicatively, I can share that the new age business margins are relatively almost two times of the Company’s average gross margins.
Raman KV
Okay, sir, thank you.
Operator
Raman, thank you. We’ll take our next question from the line of Vansh [Phonetic] from Renaissance Investment. Please go ahead.
Vansh Totlani
Yeah. Am I audible?
Operator
There’s an echo coming from your line. Can you use your handset mode, please?
Vansh Totlani
Am I audible now?
Operator
A little better. Please go ahead.
Vansh Totlani
First of all, congratulations to the team and for the great set of numbers. I need to ask just two, three questions from my end. First is that I need to understand the category-wise metrics, what are the top line, EBITDA and PBT metrics for each category? I mean there is no segment-wise classification that we are currently reporting in any of our presentations. Because you also need to understand what are the drivers behind this inventory days decline, which category is currently performing well? Where is our focus? What’s our core category? Please, if you throw some color on this, it would be great of it.
Ankit Jain
Sure. Thank you. Let me answer you. If you look at our investor presentation, we have given the entire composition of business, whereby it says that almost 57% of the business comes from the core categories, 17% of the business comes from [Technical Issues], liquid milk is around 10%, new age business is 6% and others are 10%. With respect to operating profitability category-wise, we do not share any numbers with respect to operating margins category-wise. However, if you were to look at the trend, we can very well see that over the years, the EBITDA margins have improved from almost 5%, 6% to 8.5% this year in the last three years. And overall, yeah, that’s…
Vansh Totlani
I mean, I’m asking is my major concern here is, you are reporting numbers, but you aren’t reporting exact classifications in the lower end. I mean, no EBITDA-wise clarity and no PAT-wise clarity. I mean, that’s one of the major — I mean, from our end also from the investors’ point of view, that’s one of our major concern, I mean, which category is currently performing well and where we are lacking. And if it is something that you are showing so like I mean why even the…
Ankit Jain
I would like to answer. See, if you look at the note with respect to financial statement, we have already mentioned that we do not fall under the segment reporting, and hence, we do not report the segment results accordingly. However, with respect to your question on the overall product portfolio, I think we have been consistent in our communication in categorically highlighting what is the composition of the turnover.
Vansh Totlani
From a corporate governance point of view also, sir. I mean, if someone wants to know, I mean, shouldn’t it be your obligation also to — see, if you don’t fall under segment reporting and all. But as a company, when we are projecting that we are a value-added business, and we want to claim such valuation in the market. So if we want to say that we are only in the milk business, we will continuously carrying that valuation, which the commodity business carries. If we are to value add it, we need to know as an investor, what are the top line which is coming from different categories, what are the margins in all these categories. So if you want to say that we are into premium category and we want to hold, so then how do we do that? Because with these numbers, there is no clarity which is coming on. And then how do we — on the call, if you can mention at least, if it is not on the PPT or on from the accounting perspective.
Ankit Jain
Yeah. Firstly, I would like to update you that there is no obligation to report the numbers segment-wise, whether you benchmark any other company, if you were to even benchmark the Nestle…
Vansh Totlani
No, sir, I’m not asking for the segment-wise, I want to understand the categories. If you are saying that cheese business is growing at this percentage, so what is the margin it is generating? What is your ghee business margins look like? Otherwise it looks like a commodity business.
Ankit Jain
What I’m saying — see, if you were to continue a Q&A like this, it will continue. However, please try to listen me and let me complete first. What I was trying to give you an example is if you were to benchmark with other companies, no companies report the margins category-wise because it is a confidential information for the company. I just gave you a random example from Nestle because we will never know a margin, what margin Maggi makes or what margin KitKat makes. So let’s not hold to the information.
However, I would like to clarify very clearly that as a part of good governance, in spite of we not being obligated to report the breakup, we have been presenting our breakup of our composition of the turnover for the past few years. If you look at — if you pick any investor presentation, you will get that information, which gives a good insight in terms of how — what is the core categories, what is the composition of the core categories and how are the core categories performing.
Vansh Totlani
I think the investors will continue to qualify you or classify you as a milk dairy, where you’re buying at INR60, selling at INR62. How do we know where the value will come from? If as an investor, I have to ask something by investing, I need to know where the value comes from, which business you are targeting and where is the growth coming from actually?
Ankit Jain
We have given you the guiding parameters and all the requisite information. We would not like to answer this beyond this further.
Vansh Totlani
Okay, sir, then there is no point.
Operator
Thank you. We’ll take our next question from the line of Naitik from NV Alpha Fund. Please go ahead.
Naitik Mutha
Hi, sir. Thanks for taking my question. Sir, my first question is we generated highest ever cash flow from operations this year, almost INR200 crores. But when I look at your balance sheet, we have not repaid any of it, used any of this INR200 crores to repay debt. So why is that so, sir?
Ankit Jain
Yeah. If you look at the overall cash flow, I think, on a consolidated basis, there has been a good amount of capital expenditures. So entire proceeds, if you were to look at — if you were to dissect in two parts, one part is usage of the capital expenditure in the capital expenditure item, which is both for Bhagyalaxmi farm as well as for Parag Milk Foods largely. I think that completes all the capital expenditure obligations, which were there in terms of whatever were the routine hygiene capex which were required. So it is almost close to INR120-odd crores. Besides that, there is an interest outflow of almost close to around INR80-odd crores, which takes care — which takes out this cash flow from operating activities. So these are the two major usage of the funds.
Naitik Mutha
Right, sir. Got it. And sir, another question is again on the balance sheet, sir. When I look at your other current assets and other financial assets, if I add them up, for the past three years, they’ve consistently been INR400 crores, INR450 crores. And two major items within them is advances and one of the other items is other current assets. So what is this, sir, and why it keeps on at INR400 crore mark?
Ankit Jain
Sure. I think a good question. See, over the period, if you would look at the number has been broadly consistent, mainly because while even though turnover has increased, so this number has not increased, which essentially means as a number of days of capital, it is certainly coming down. So overall advances has come down as you have noticed rightfully. With respect to the other part of the asset, it is largely the receivable from the government, which is on account of the PSI and PLI incentives, which government provides.
So of course, that cash flow is dependent on the overall larger cash flows from the state government or central government. So we cannot comment on that. But overall, I would like to highlight that NWC has come down over a period of time from 74 days to almost 62 days when we talk of NWC, which is largely in form of inventory receivables and the trade payables part.
Naitik Mutha
No, sir. Sir, my question is, so the advances that we pay this also essentially becomes a part of our working capital. Is it? Or what is this advances that we pay for? I don’t understand what advances we are paying for here. Is it for some capital expenditure purchases or is it for our business or what is it for?
Ankit Jain
Sure. I’ll clarify. But before that, I would like to update you that we fall under the highest category when it comes to the PSI benefits and the PLI benefits, which is provided by the government. Having — now coming to your question on the advances, typically, this is part of the customary practice more so with respect to procurement in the state of Maharashtra, whereby we supply these — we make these advances to our milk aggregators who in turn set up their own network and infrastructure and create their own network infrastructure to procure milk from the farmers. And we, in turn, leave these advances as part of our normal — in the ordinary course of business, which continuously have a rotation in terms of the milk supplies as well as the fresh advances.
Naitik Mutha
Right. So it is essentially a part of normal business and would probably be part of working capital. Okay. Got it, sir. That’s it from my side. Thank you.
Operator
Thank you. We’ll take our next question from the line of Chandresh Malpani from Niveshaay Investment Advisors. Please go ahead.
Chandresh Malpani
Hello? Am I audible?
Operator
Chandresh? Yes, please go ahead. Yes.
Chandresh Malpani
Yeah, thank you for the opportunity. My question is with respect to core category growth rate. Like we have been growing at 17%, 18% volume growth year-on-year basis. So how confident are we on this rate of growth? And what underlying factors can the management provide us like for this rate of growth? Hello?
Rahul Kumar Srivastava
So basically, first of all, this branded dairy category is growing with a good healthy rate and the people, they want unadulterated and pure products. So that’s also creating a lot of growth. You must have seen something on the branded ghee as well as branded paneer. So this is one of the pillar of growth. Second is that we — strategically, we are expanding our distribution network. So about three years, four years back, we were having only 15 warehouses. Now right now, we have around 29 warehouses almost present in all the states. So basically, it is a natural demand for the branded good quality products as well as our distribution network expansion, along with the brand equity, what we command and because of that, we have more demand for these dairy products. So these are the three pillars, I would say, will lead to this kind of growth.
Chandresh Malpani
Okay, thank you, sir. And second question is with respect to the new age business. I understand like providing EBITDA numbers is not mandatory, but can you give some sense on the profitability of it because like it has started to contribute to the EBITDA? Or has it reached the breakeven point or not? And just a sense on that.
Rahul Kumar Srivastava
Yeah, yeah. I think Ankit has already given an answer on this question. He said that our — all the new age business, the margins are double than the Company’s average margin. So this is what…
Chandresh Malpani
That was on the gross level or…
Rahul Kumar Srivastava
Yes, gross level, yeah.
Chandresh Malpani
Yeah, that’s what I’m asking because of the amount of marketing and advertisement expenditure we must be doing on the Avvatar brand and Pride of Cows. So like has it reached that breakeven point? Or has it started to contribute to the EBITDA levels?
Ankit Jain
See, while Pride — I will answer this question. While Pride of Cows is a part of our subsidiary, which is Bhagyalaxmi Dairy Private Limited, the financials definitely will be available to you — for you separately. You can go through it. The EBITDA, it is almost at a breakeven EBITDA definitely. We do not report EBITDA again at a category level. Having said that, brand promotion expenditure is a pool of expenditure, which is rightfully allocated in terms of what is the need of the brand and what is the agenda, basically, what is the intent and what is the season. So there has to be a certain format of consistency. The way you look at our participation in KBC, it’s been three years that we have — consecutively for three years, we have been participating.
But this year for Go Cheese, we entered into the House of Bigg Boss. So that was again a strategic call to enter from — so last year, we did IPL. This year, we did a Bigg Boss. So again, for the brand, it needed a different level of advertising. So it has gone in different segments. These brands like Avvatar and Pride of Cows, which are new age business are more digital brands. So the TV itself needs a lot of influencers and digital marketing campaigns. So we continue to drive accordingly. So we have to look at overall pool of funds and how Company is managing the operating aspects.
Chandresh Malpani
Okay, sir, thank you.
Operator
Thank you. [Operator Instructions] Next question is from the line of Rishabh Gang from Sancheti Family Office. Please go ahead.
Rishabh Gang
Yeah. Thank you for the opportunity. Really appreciate you conducting the con call. A lot of people have asked that before. So on the milk procurement side, for the milk that we are procuring from outside farmers, how much of that is direct procurement without any agent or middleman? Yeah, first question.
Rahul Kumar Srivastava
Yeah, sure. We’ve answered this. But in a summary way, broadly two-third of the milk is procured through milk aggregators and one-third of the milk is direct procurement through our own set of BMCs and chilling centers.
Rishabh Gang
Sorry. Yeah. Also on the Pride of Cows front…
Operator
Rishabh, I request you to join back the queue, please as we have — Rishabh, I’m sorry to interrupt. We have a long queue of participants, I request you to join back the queue, please. Thank you. We’ll take our next question from the line of Sanika from Sapphire Capital. Please go ahead.
Sanika Khemani
Hi. Am I audible?
Operator
Yes, Sanika.
Ankit Jain
Yes, please.
Sanika Khemani
Yeah. I just have one basic question. So is it fair enough to say that due to seasonality in the business, we should look at your business on a Y-on-Y basis? And can you explain why there’s so much variation in the EBITDA margin?
Ankit Jain
Okay. With respect to seasonality, you will be looking at while we are looking at growing our turnover. But partially, your observation is there that with respect to there is some seasonal impact. For example, during festive demand, the consumption of ghee will be very high. And similarly, the cheese will be very high in winters as compared to April, May, June. But April, May, June, again, will be heavy on beverages and other product portfolio. So I think we have a group of good product portfolio, which — and that’s why we are able to balance out our revenues. And you will look at almost our revenues have been hovering around broadly between INR850 crores to INR900 crores across the quarter. And this quarter, we have exceeded INR900 crores for the first time with INR918 crores marking this quarter as the highest ever quarterly revenues.
Operator
Thank you. Sanika, I request you to join back the queue, please. We’ll take our next question from the line of Riya Agarwal from Bandhan AMC. Please go ahead.
Riya Agarwal
Hi. Am I audible?
Operator
Yes, Riya.
Ankit Jain
Yes, please.
Riya Agarwal
Hi. Thanks for the opportunity. I just wanted to understand that our margins on core categories, which is ghee and cheese would definitely be higher than the Gowardhan milk products. I just want to understand that as you mentioned that your new business margins are two times gross — two times the Company’s gross margin. So in that terms, if you can indicate what are the margins on ghee and cheese as compared to the milk?
Ankit Jain
I’m sorry, but we have just given an indication and we have not given a clear number in terms of what is the gross margin on the new age business. And that is too small a business of around 6% at this point of time. We have consolidated ghee and cheese to give you a number of 57% of the overall business as core categories to maintain — of course, to maintain an equilibrium between the transparency and protecting the competitive — competition sensitive information. So from that perspective, we will not be able to share again product-wise or category-wise margins.
Riya Agarwal
Okay. But just can you validate that the margins in ghee and cheese are much better than the milk margins?
Ankit Jain
We will like to not to answer to that because overall, we have to look at the overall margin management for the business. We are broadly around 25%, 26% gross margin business at this point of time, and we continue to strive to improve our gross margins as we look forward.
Riya Agarwal
Okay, thank you, sir.
Operator
Thank you. We’ll take our next question from the line of Aditya from Securities Investment Management. Please go ahead.
Aditya Khandelwal
Yeah, hi, sir. Thanks for the opportunity. Sir, I had a question on your procurement prices. So they have increased by INR3 on a Q-o-Q basis. So do you expect it to stabilize at current levels? Or do you expect it to increase further going forward? And if you could just provide some perspective regarding is this increase a general inflationary increase or there is a milk supply crunch in the country?
Ankit Jain
I would answer you on the overall operating margins. I think operating margins for the year has been hovering around 8.5%. Of course, plus/minus a few basis here and there. We will continue to strive to achieve similar margins quarter-on-quarter as we move along. While there will be an inflationary impact, whereby during inflation, the impact on margins as a percentage versus the absolute profitability is a little different, which applies to all consumer companies. So I’m not explaining on that aspect. Rahul ji, if I request you to answer on the milk procurement.
Rahul Kumar Srivastava
See, milk procurement, what we anticipate is to be more or less stabilized now onwards because you know that milk is a seasonal commodity, and we have a supply/demand gap in the summers where milk production naturally goes down. So this year also because of early summer, there was an increase of the procurement price from the farmer. So we have taken the call to increase the milk price, selling price. But what we see as stable for next six months.
Operator
Thank you. We’ll take our next question from the line of Amit Mehta Classic Financial Services. Please go ahead.
Amit Mehta
Am I audible?
Operator
Yes, please go ahead.
Amit Mehta
Yeah, thank you. Thank you. Hello?
Ankit Jain
Yeah, Amit, we can hear you.
Amit Mehta
Yeah, yeah, thank you. See, I have a few questions. While the performance of the Company has improved, I want to understand why the inventory is so huge and in which category these inventories are being built up? Because since we are in this perishable business, how can the inventories be at these levels? And the second question, what I want to understand is the fair valuation that we are doing on the biological asset side. So I need to understand because for last three years, four years, five years, which I have been looking at on your cash flow, the biological assets have been revalued and they have only been revalued on the higher side. And then they are going and sitting in your other income. So is the management trying to bloat the balance sheet or P&L to overall match the profitability as per their expectations?
Ankit Jain
Sure. I’ll answer the two parts. The first part is on the inventory side. See, we are into more into value-added products unlike a pure dairy company, which is more into liquid milk because liquid milk has a different working capital cycle. So we have to convert the milk into the value-added form and cheese needs an aging process. So hence, typically, our inventory is largely in the form of — see, the major portion of the business is ghee, cheese, paneer. So hence, largely the inventory is in form of cheese, which needs an aging of six months to 12 months, depending on the type of the cheese. And the other form of inventory is more for — in form of butter and the milk powder because it is required and generated as we make ghee. Now coming to your question on the biological assets. This year, you would see that biological assets valuation has gone down versus last year. Over the years as we see…
Amit Mehta
Please go ahead. Sorry.
Ankit Jain
Yeah. So over the years, when you look at the revaluation of biological assets have been increasing year-on-year, mainly because it is backed by the increase in the number of cows and hence, this kind of valuation. But for the year-end…
Amit Mehta
There you must be having dry cows also, right? You must be having dry cows also, right? There is a seasonality where the cows go dry. So what are you doing on that front? Because all this revaluation that you’re doing is going — sitting in your other income. And then it is…
Ankit Jain
We understand that.
Amit Mehta
It seems it is artificial increasing the balance sheet size.
Ankit Jain
See, as far as your question of dry cows are there, it is a natural cycle that cow will be dry for a few months, a couple of months. And again, it will be under the reproductive cycle. So it’s not that cow is dry.
Amit Mehta
So we haven’t seen any devaluation on that front. And there is no disclosure in the notes to accounts. And we are in the business of selling milk and value-added products. Parag is not in the business of selling cows, right? Every year, we keep on increasing the fair value of business assets and biological assets.
Operator
Amit, I request you to join back the queue, please.
Ankit Jain
Yeah. I’ll finish this in just one answer. We are — there is no disclosure.
Amit Mehta
At least answer this. Hello?
Ankit Jain
I’m answering this. I’m answering this. I’m answering this question. Please allow me to answer. Yeah. So we are giving a fair disclosure in terms of notes to accounts. It is — the valuation is done by an independent certified valuer. It is not a management estimate on which it is made as an income. And just to apprise you, the overall increase has been backed up with the increase in the number of cows and increase in the actual milk, which has been produced at the farm, which has increased over the period. And now it is almost close to 50,000 liters per day.
So there is, of course, a science behind this valuation, and it is done under the Ind AS accounting standards only. However, just to apprise you again that this year, the income has decreased on a year-on-year basis, and it is not growing that every year, this income is growing. We have been into our expansion phase of our Bhagyalaxmi project, which also entails, yes, I missed to — because now the farm is ready operational. So there has been a constant increase in the number of cows.
Operator
Thank you. [Operator Instructions] I’m sorry. Go ahead, ma’am.
Akshali Shah
You can go on.
Operator
[Operator Instructions] We’ll take our next question from the line of Mihir Dhami from Sharekhan. Please go ahead.
Mihir Dhami
Hi, sir. Thanks for the opportunity. My question was on the Avvatar brand. I think what is our strategy to grow that brand? And how do you see the industry competition and pricing? As in pricing-wise, I observed that you have increased the pricing almost twice in the last one year. So just wanted to get your strategy on how you are planning to grow it.
Akshali Shah
So basically, if you know that around 76% of India is protein deficient. Avvatar, we started as a sports nutrition brand, and now we are also getting into and pouring into and it’s becoming really popular with people who are fitness conscious. If you see, we’ve also launched protein bar, which is to be consumed not just by the sports nutrition, but also by common people who are a little more health conscious. If you see the brand has grown almost six times in the last three years. And we’ll continue to do and give marketing support for the brand. And we’ll soon get into newer formats of protein as well instead of just being a sport nutrition or a powder format. You will see newer formats of the protein coming in.
Operator
We’ll take our next question from the line of Prasun Vijay [Phonetic] from Vijay Investment. Please go ahead.
Prasun Vijay
Hello? Am I audible? Hello?
Ankit Jain
We can hear you.
Prasun Vijay
So what is the level of debt that the Company has on the balance sheet? And what are the off-balance sheet items on the borrowing side?
Ankit Jain
On the borrowing side, of course, the net debt of the Company is INR561 crores. It is a gross debt less of all the fixed deposits and the cash balances.
Operator
Thank you. Ladies and gentlemen, we take that as the last question for today. I now hand the conference over to Ms. Akshali Shah, Executive Director, for closing comments. Over to you.
Akshali Shah
To summarize, in Parag Milk Foods, our past has been challenging. We’ve overcome this past by corrective actions like building a strong team. We’ve recently hired almost 10-plus CXO in every department in the last 24 months. Deloitte was appointed for internal audits. We’ve also become cash positive from operating revenue in the last two years. We also hired a top consultant for cost optimization. If you see our new product development that we are doing have a gross margin, which is double of Company’s average gross margin.
And if you see the list of investors, we have marquee investors like Sixth Sense, IFC and now Mr. Utpal Sheth. At Parag Milk Foods, we are not just in dairy business, we are an integrated ecosystem trusted by millions of lives every day, whether it is farmers who start their morning with us, the consumer who chooses our products for their families’ nourishment, to our partners and investors who share our vision, each stakeholder is a central to our journey.
We truly believe that Parag is rooted in tradition and now leading the nutrition. Backed by a strong infrastructure, innovation-led brands, deep market insights and a forward-looking leadership team, we are confident in our ability to not just lead India’s dairy and FMCG space, but to emerge as a global force in nutrition excellence. Thank you once again for the time, your trust and being able to be a part of our exciting journey. Thank you.
Operator
[Operator Closing Remarks]