Radico Khaitan Limited (NSE: RADICO) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Abhishek Khaitan — Managing Director
Dilip K Banthiya — Chief Financial Officer
Amar Sinha — Chief Operating Officer
Analysts:
Himanshu Shah — Analyst
Abneesh Roy — Analyst
Harit Kapoor — Analyst
Dhiraj Mistry — Analyst
Rohit Kumar — Analyst
Pankaj Kumar — Analyst
Rohan Patel — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Radico Q3 FY ’25 Earnings Conference Call hosted by Dolat Capital Markets Private Limited. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call? Please signal an operator by pressing star than zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Himanshu Shah from Dolat Capital Markets Private Limited. Thank you, and over to you, sir.
Himanshu Shah — Analyst
Thank you. Thank you,. Good afternoon, everyone. At this moment, we would like to thank management for providing Dolat Capital with the opportunity to host the Q3 FY ’25 earnings call. We have with us the senior leadership team from Redico, represented by Mr Abhishek, MD and CEO; Mr Amansh Amar Sinha, Chief Operating Officer; Mr Bantia, Chief Financial Officer; and Mr Sanjiv Banga, President, International Business.
I will now hand over the call to Mr Abhishek Khatan, MD and CEO for his opening remarks. Over to you, sir.
Abhishek Khaitan — Managing Director
Thank you. Good afternoon, ladies and gentlemen. Thank you for joining us on our Q3 FY ’25 results conference call. Building on the strong momentum from the first-half, achieved industry-leading RMSL volume growth of 15.3% year-on-year in Q3 FY ’25. We anticipate this strong growth momentum to continue in the near-term. The prestige and above category volumes saw a 17.7% increase. Our luxury portfolio, including Rampur Indian Single malt whiskey, Tangam World Mault and Indian Craft Gen continues to deliver strong growth as we focus on increasing distribution both off-trade and on-trade.
After the launch of Rampur Indian Single Asawa, Sangam World Mault and Gold Gin. Earlier this year, we continue to expand the rollout in more states. Is now available in 10 states, Sangam in eight states and Gold in six states. However, we have seen luxury and semi-luxury brands cross net sales value of INR100 crores in Q3 FY ’25 and INR250 crores in the nine months FY ’25. Given the exceptional demand in the domestic as well as international markets, we expect this to cross INR500 crores net sales mark in FY ’26. Royal whiskey recorded a strong 55% growth during Q3.
We recently launched a celebrity campaign with Bollywood star Ali Khan, which resonated well with the brand, it thoughts and connected with the consumers. Royal Rantham Board has been — has seen unprecedented success in civil markets and the volume run-rate is increasing month-on-month across geographies. We are very happy to report that in Q4 FY ’25, it will be introduced to the channel, which is a very large market. We believe it will drive further growth. All other core brands continue to report strong momentum such as Magic Moments Vodka, After Dark Blue Whiskey and 1965 Spirit of premium Round. Magic Moments Vodka recorded 1.8 million cases sales during the quarter. We launched a limited edition celebration path for Magic Vodka, blending premium quality with festive vibrance.
During the nine months of FY ’25, Vodka industry has grown more than 15%, where we have a strong 60% market-share. With our continued innovation, we remain confident of driving the industry growth. During quarter three, Whiskey became the eighth brand to join the Millionaires Club. Launched in 2011, this brand story took an exciting turn-in 2022 with the launch of AfterDark Blue whiskey, designed to captivate the younger generation. In the first-nine months of FY ’25, AfterDark achieved 1.34 million cases sales volume with representing over 100% growth compared to nine months FY ’24. It is positioned very strongly in the largest segment of the premium whiskey industry.
Going-forward, I remain optimistic about the growth prospect in the Indian alcoholic beverage sector. We are progressing well on our strategic roadmap and are confident in delivering results in-line with our goals. Our new product development pipeline remains robust and we are committed to delivering superior performance across our portfolio. Our strategic priorities remain focused on-brand building, sustained profitable growth and long-term value-creation for our stakeholders.
I would now like to hand over the call to our CFO for a detailed operational and financial review. Thank you, and over to you.
Dilip K Banthiya — Chief Financial Officer
Thank you, Abhishek. Thank you everyone for joining us on this call today. During quarter three of FY ’25, we reported a total volume of 8.4 million cases, representing a growth of 15.3% on year-on-year basis. The prestige and above category volume grew by 18%. In value terms, the Prestige and above category registered 24.7% growth. IFR realization increased by 5.5% on year-on-year basis. History and above category account for 51% of the IMFL volume compared to 50% in-quarter three of last year.
Regular category volume, which were impacted due to certain state-specific industry-related issues and ongoing strategic rationalization of portfolio have now returned to the sharp growth trajectory. This was due to the lower base coupled with the normalization of state-specific industry issues. The change in the route-to-market in Pradesh contributed 800 basis-point to our overall volume growth. As regard the P&A segment, the excluding Andhra Pradesh, the growth has been higher. The recent RTM change in Andhra Pradesh has progressed well, promoting stability, predictability in regulatory environment. As a result, we have seen strong growth traction for our brand portfolio and gained market-share from 10% in the first-half to over 15% in-quarter three. We quickly adapted to the changing environment and created capacities to capitalize on industry opportunity.
Gross margin during the quarter was 43% as compared to 41.8% in-quarter three of FY ’24 and 43.6% in sequential-quarter two. Gross margin impacted on a year-on-year basis due to the ongoing premiumization in the business, coupled with relatively stable raw-material scenario. Gross margin declined by 60 basis-points on quarter-on-quarter basis due to food grain inflation. While we are optimistic about the inflationary scenario for ENA and grain to improve going-forward, we continue to cautiously monitor the trends.
Employee benefit expenses expenditure were higher sequentially due to the annual appraisal and some incentive payment during the quarter. Interest cost increased sequentially due to higher working capital utilization during the quarter, primarily led by cyclical building of the grain inventory and higher receivable in certain states. This is temporary phenomena and inventory will be liquidated by the year end. Going-forward, our focus will be driving profitable growth along with cash-flow generation and more efficient working capital management, resulting into debt reduction.
With this, we now open the lines for Q&A. Thank you.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question may please press star in one on your touchstone telephone if you wish to remove yourself in 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. Participants, if you wish to ask a question, you may please press star in one.
The first question is from the line of Abdish Roy from Nuvama. Please go-ahead.
Abneesh Roy
Yeah, thanks. My first question is on Andhra market. So you have done well and you have gained market-share. Even the national player has gained market-share. So if you could tell us are the local players now or largely out-of-the market? And second is, in the previous cycle, when the similar regime, similar government was there. Then what was your market-share and as a percentage of pan-India, when do you see a full normalization and what was — what will be that number in terms of Andhra’s contribution to your sales?
Abhishek Khaitan
So as far as the Andhra market is concerned, it’s a 30 lakh cases market right now. It’s a growing market as the regulatory environment stabilizes and the policies become more stable. The market is continuing to show buoyancy. We have a 15% to 17% market-share as Radico in that state. We are very buoyant about the future. Most of our brands that we have introduced are showing traction. The route-to-market change in October — on 16th of October 2024. Since then, there is a balance between secondary and tertiary sales.
So as far as Radico is concerned, the movement for all our brands introduced in Andhra is sound and showing good signs. As far as the local players are concerned, they still exist and they are largely operating in the lower-price segments, which I think will continue for some time till the national brands gain a traction. This has also started to happen. Most national companies are now getting good volumes and it will benefit organized players like us.
Abneesh Roy
So my second and last question is on the demand-side, you also sounded positive and the pan-Indian national there is also positive. So my question is in terms of the marriage demand, how much is the benefit coming from there? And exam Andhra, what will be your expectation of growth because Andhra clearly is helping. And would you see Q4 Andhra contribution being a bit lower because first-quarter generally the inventory pile-up is there, which helps in a larger number. So would you say that Q4 the contribution to sales from Andra, that could be a bit lower and then it starts going up again.
Abhishek Khaitan
So I think as I told you that there is a balance between secondary and sales for all our brands. So as far as we are concerned, we see that the momentum will continue and we will continue to perform equally well in-quarter four and year-after.
Abneesh Roy
And in terms of the pan-India demand, what is driving the optimism because almost every other form of consumption there clearly saying there is a slowdown in urban. I do understand some of the base is a bit favorable for the industry, may not be for you, but marriage demand clearly is there for the next two quarters also. So would you say marriage demand is what is helping in terms of optimism versus say other forms of, say, FMCG consumption or say any other discretionary consumption also QSRs, everything is weak. In terms of apparel also it is weak. So what is different for the liquor industry versus other forms of consumption in the urban currently?
Amar Sinha
So let me explain this to you. I think.
Operator
Sorry to interrupt. Sir, your audience. Sorry to interrupt. Hello, sir, are you able to hear me?
Abneesh Roy
Yes.
Operator
Your audience not coming across clear.
Amar Sinha
So let me say first that as you see in Q3 the growth has been across segments and categories. The segments have also recovered and the premium and other segments have also shown great traction, strong double-digit growth. Radico, as far as it goes, we have seen traction across our brands and that’s why you see this number of DNA growing by 17% in volume. And as far as overall volume is concerned, it stretches across premium and brands and that’s how you get 15%. This is clearly in the liquor industry and it is not purely because of weddings and festivities. The industry itself is buoyant and that’s why we see that we feel that the next quarter and thereafter demand will be encouraging. One more point that we want to stress here is that three years back the entire market segments for brands above regular segment was only 25% of the IMFL industry.
Today, it has reached a whopping 42%, which means that the brands in the premium segment are gaining traction and is driving this growth as well as part of an industry player. That’s why you see good traction for all the brands that we have launched. Today have market leadership positions in, rum, brandy and vodka and now we are growing steadily in the whiskey segments as well. All brands that we have launched in the past two years have done exceedingly well and are selling pretty well in all the market across geographies.
Abneesh Roy
Sure. Thanks, sir. I’m done, sir. Thanks a lot. All the best.
Operator
Thank you. A reminder to the participants, anyone wishing to ask a question may please press star in one. The next question is from the line of Harit Kapoor from Investec. Please go-ahead.
Harit Kapoor
Yeah, hi, good evening. So I just had two questions. One was on you mentioned that you expect your luxury and semi-luxury portfolio to cross INR500 crores. If you could just give us a sense of what’s — what will drive growth next year? Do you think it’s more getting into markets where you weren’t present or it’s just strong market-share gain or just throughput growth that that you’re seeing? And within this, if you could just give up even a qualitative flavor of, you know what’s growing faster and et-cetera? I know the portfolio, but if you could just give a sense of what’s growing faster, what’s driving this growth. So just little bit more comments on this on this portfolio, which will be INR500 crore business for you next year.
Amar Sinha
First, let me explain. And Mr Rabhishek also mentioned in his opening remarks that our luxury and semi luxury sales was approximately INR100 crores and showed a growth in value terms of 45%. As far as volume is concerned, we have shown equally strong volume by growing at 54%. As far as ratio sales of luxury and semi-luxury brands are concerned, we have grown to a level of 12% in Q3 as against 9% in previous year. Now having said that, I must tell you that all the brands that we have launched today have shown great traction and acceptance at the consumer level and has always pioneered the price positioning of all brands in different categories and segments.
Our prices are well-accepted and people feel by virtue of a higher price position that we not only offer its stature, but we are also giving them equal quality commensurate to the price that we offer. Now today these brands despite the traction and sales growth, we feel are still at a nascent stage and there is a good way to go in terms of creating market shares. And that’s the reason we feel that the coming years will show a much better result. Not only that, we will also expand across geographies. See, Radico has a national presence. We are one of the strongest distribution companies in the country today. We are the largest player in the segment from India. And we are in the process of expanding our distribution of and products and that will also give us expansion in volumes and profitability both.
Harit Kapoor
Got it. Very, very clear. So just on this, what — how large would — I mean, would this be — would a significant portion of this, say, INR500 crore next year or whatever of the INR250 crores for the nine months be export or maybe it could be — what would that ratio look like?
Amar Sinha
So today exports is about — in volume terms, export is only about —
Abhishek Khaitan
Yeah, as export are in the volume terms approximately 5.5% in the domestic market, the luxury and growth rate is much better than export.
Amar Sinha
And it will continue to be so at least for the next three years because the market is huge, it is growing very fast. So we need to exploit that situation. Also, if you see in the single molds industry in the domestic market has overtaken the international also. So I think with the investments of what we have done in our mold capacity about four, five years back, in the next three years, we expect a. Right now that demand is more than what we can stabilize. So next three years, we feel even a — want availability should double in the next three years. So that will fuel the growth. Royal, as I said, has entered into the armed forces or the is one of the largest markets. So I think overall, the entire space is quite buoyant.
Harit Kapoor
Got it, got it, sir. Very clear. The second part was on the cost side. So you’ve seen on one-side, you have the — the possibility of some increase likely in ethanol at some point in terms of government pricing. But on the other side, you also have the grain prices, which seem to now be coming into a more favorable trajectory over the next one or two quarters and going-forward. So if you could just help us understand how do you see this kind of confluence of factors playing out in ENA pricing over the next, say, three, three, six, nine months if one had to hazard a guess. Yeah, that’s my question. Thanks.
Amar Sinha
Actually, if you see the industry like the kind of headwinds we have faced is the grain prices from 17,000 touched about INR28,000. The primary reason was the ethanol supply and the stoppage of the FCIs, which happened about 1.5 years back. And only now the government for the first time, which we were expecting long back because huge pile of about 65 lakh tons of grain flying in the SCI down. So they have just announced where ethanol can be produced from SCI. So that at 2250. So I think it all depends on the government policy, but if it continues, surely there will be easing of the raw-material.
Harit Kapoor
Got it. So that’s all from me. Thanks and all the best.
Operator
Thank you. Okay. The next question is from the line of from Antique Stock Broking. Please go-ahead.
Dhiraj Mistry
Yeah. Hi, sir. Thank you for the opportunity and congratulations for the good set of numbers. Sir, my question is first on-demand, where one of the companies said that there is a slowdown in the premium and luxury end-of-the segment, whereas you have been saying that your growth has been very much far superior. What’s give you confidence that this kind of mid-teens kind of a volume growth can be continued in P&A segment? And also the regular segment after, let’s say, 12 to 13 quarters afterward, we are seeing positive territ — positive volume growth in regular segment. And what can we expect in terms of volume growth in regular segment going ahead?
Amar Sinha
So let me answer the regular segment first. See, it’s true that it is quite some time — some later that the market has started responding as far as the regular segment is concerned, there are a couple of reasons for it. But we have in our earlier conferences also stated that we have normally rationalized our regular volumes because of escalation in costs, raw-material pressures and contribution loss. So wherever we thought it was economical, where it — and profitable, we used to sell regular and where it was not these two rationalize our volumes.
Having said that, as far as the current growth rate in the regular segment that we have seen of 13.4% and a value growth of 15%, that’s primarily because of two reasons. One, Andhra has offered an opportunity to sell brands below the P&A segment at a lucrative price and the contributions are healthy. That’s what we are doing. And going-forward, we also feel this trend could continue because Kerala, which is a huge market of more than 20 lakh cases a month has given a 6% to 7% price increase and therefore, we see that this will also benefit the industry, including Laco in month. So we are optimistic about the regular segment recovery in the months ahead.
Dhiraj Mistry
Yeah. So just on regular segment…
Amar Sinha
It will also be contain in the mid-single digit rate.
Dhiraj Mistry
Okay. But if I want to strip out Andhar Pradesh from the regular segment, what could — what would have been growth excluding Andhar Pradesh then in this quarter.
Abhishek Khaitan
See, as I said in my opening remarks, at Sandra, our overall growth is 7%, 7.5% as a percentage. And in the PLA category, it is almost higher or better as natural average. So the point is that excluding, as Amar said, that there are certain improvement in the state regulatory environment, the defense has given the guidance last year, which got us back the volume, the export also, there is some improvement in the volumes of the segment and is one of that also. So I think that as we said that mid-single digit after rationalization of that for next year, we can very well achieve that.
Dhiraj Mistry
Got it. And sir, your comments on P&L segment volume growth.
Amar Sinha
Okay. As far as P&L segment is concerned, I mentioned a little while back that see, brands above the regular segment today are 129 million cases, approximately out-of-the 304 million cases which has been the market in Q3, which is roughly 42%. Now this is a huge market and growing at double-digits across categories and segments. So as far as we don’t want to comment on what others feel about the slowdown or the large space. But as far as-is concerned, all our brands are buoyant, they are responding very well. We have great plans, marketing plans ahead and our growth momentum of getting a P&A growth of 15% plus in the times ahead will continue.
Dhiraj Mistry
Got it. Got it. And sir, second question is related to our debt where after our capex, we have not seen any decline or let’s say, reduction in debt a part of this is also attributed to Telangana government not being the dues. Where are we standing in terms of due from Telangana government and when we can expect or let’s say, say by what year we can become a debt-free company.
Abhishek Khaitan
So these are certain — as you said that couple of months issue which will get sorted-out soon, the interaction industry is on. Secondly, we build a second grade inventory in the season, that will also be partly liquidated by the year-end. And from Q4 onwards, you will see a demanding trend in our debt scenario. And as we guided by ’26 ’27 million or so, our debt will be negligible. Those kind of accrual will be coming from internal accrual. We are very confident of achieving the kind of situation by ’26-’27.
Amar Sinha
I want to add one very important point that unlike other players, Radico’s old are not as high and subsequently now Radico is being paid with other companies in 45 days as for the policy. So that’s not so much of a determin. But yes, the news whatever our overdue will get cleared in Q4.
Dhiraj Mistry
Got it. Got it. And sir, lastly on margin front, you clearly highlighted that luxury segment has been growing very fast. So sir, can you comment a bit on in terms of profitability of luxury segment versus other P&A segment versus regular segment for us.
Abhishek Khaitan
Where we — when we talk about our margin and actually in the last four we’ve been writing about that we will improve on our margin by 100 basis-points to 150 basis-points year-on-year this year. Over the last year, we have improved it by 140 basis-points in nine months and we’ll continue to do that. With the kind of product and portfolio and the leverage growing much faster, we expect our margin to grow 100 to 125 basis-point every year next year, thereby growing on 13% kind of margin in next year. So we expect this business model that should be achievable.
Dhiraj Mistry
Okay. That’s helpful. Thank you very much. Thank you.
Operator
Thank you. The next question is from the line of Rohit Kumar from Niveshaya. Please go-ahead.
Rohit Kumar
Hello. Am I audible?
Operator
Yes, sir.
Rohit Kumar
So my question is from my question is for the team.
Abhishek Khaitan
Speak loudly please.
Rohit Kumar
Yeah. Hello.
Operator
Hello?
Rohit Kumar
Hello.
Operator
Sir, can you speak a bit louder?
Rohit Kumar
Yeah, is my voice audible?
Operator
Sir, can you speak a bit louder?
Rohit Kumar
Hello, is my voice audible now?
Operator
Yes, sir. Please proceed.
Abhishek Khaitan
Okay.
Rohit Kumar
So sir, how much margin do you make in per ML pack? So for example, from 90 ML pack to 750 ML pack, how much margin do you make? In EBITDA wise, in terms of EBITDA wise?
Amar Sinha
Again, can you repeat your question?
Rohit Kumar
So how much margins do you make from 90 ML pack to 750 ML pack? The margin similar in terms of EBITDA wise.
Abhishek Khaitan
So the question actually it is the margins are of the price point and basically whether it is 9cml or 180 ml or else KML depending on the price point of that segment, the margin — EBITDA because it needs.
Rohit Kumar
Yeah. So each segment has different margin side. So can you give — give us the margins on the blended wise, how much blended margin do you make in the NTML pack or one ATML pack or 750 ML pack?
Abhishek Khaitan
So as I said, Rohit, it is actually not 9,180 ML. We pay in the SKUs. When we launch any product or we market any product, we price. There we are offering this all the segments 75. There is a composite basket of margin we see on the contribution level. So we can’t distinguish between 90% margin versus 750 margin.
Rohit Kumar
Okay, sir. Okay, sir. Okay, sir. Thank you, sir. That’s from my side, sir. Thank you.
Operator
Thank you. The next question is from the line of Pankaj Kumar from Kotak Securities. Please go-ahead.
Pankaj Kumar
Thanks for taking my question. Most of the questions are answered. Just wanted to have one clarification that ex-AP and the P&A category, what was the growth in the quarter?
Abhishek Khaitan
And in P&A category
Pankaj Kumar
Ex Andhra Pradesh.
Abhishek Khaitan
See, our P&A category has grown by 17.7% of the in the quarter and the AP volumes contribute about 700 basis-points. And as far as PA category goes, excluding also, our growth has been higher than 17.7%. So because our growth is on broad-based across geographies.
Pankaj Kumar
And sir, you have guide for INR500 crore sales from semi-luxury and luxury segment. So what kind of margins that this category can generate? Any sense you can get.
Amar Sinha
We do not quantify what margins is in the segments, but definitely in the luxury and spend semi luxury segment that is all and above, the margins is much, much higher than the categories.
Pankaj Kumar
So other way to just know, like you’re saying to 125 bps margin improvement that you are looking at every year. So what portion would be driven by your mix changes versus your raw-material advantage change.
Amar Sinha
See, raw-material advantage, the grain prices had gone up in October-December quarter, I think it was the highest. So profitability will be at a disadvantage. So this all margin is contributed because of the product mix and the premiumization.
Pankaj Kumar
And sir, in terms of capex, what kind of capex that we are looking this year and the next year?
Amar Sinha
Last risk capex we have done with all our major capex sales and our capex run-rate will be INR100 crores to INR125 crores every year for next two to three years. This is after our large projects are over. Some payment of the large projects are made in this year, but the new capex is running basis.
Pankaj Kumar
Okay, sir. Thank you.
Operator
Thank you. A reminder to the participants, anyone wishing to ask a question may please press star in one. The next question is from the line of Rohan Patel from Turtle Capital. Please go-ahead.
Rohan Patel
Hello. Am I audible?
Abhishek Khaitan
Yeah, yeah.
Rohan Patel
Yeah. Thanks for this opportunity. I have question regarding our country liquor business and non-IMFL business. Seeing your financials for FY ’24, we did somewhere around INR1,300 crore in non-IMFL segment and roughly 50% of that comes from country liquor. But when we look at our margins in non-IMFL segment, they are near to mid-term single-digit, mid-single digit. And when we see some of our peers in-country in UP market, they are fairly doing a healthy double-digit margin of 14% to 17%. So can you explain the difference in this, like why are margin so low? And in ’23, we were negative EBITDA.
Amar Sinha
So the question is that our country liquor business is only in one state. It is in the utra Pradesh. Rest of the player might be doing in three more states. So we are talking about only UP, where the margins in the country liquor are in the mid-single digit. And as you say the rest of the non-IFL business is the alcohol sales where also the margin has been squeezed because of the high inflation in grain prices. There also the margin has squeezed to mid-single-digit kind of numbers. So seeing what we see that FCI open up and all that, it’s all question of how the market behaves and declining trend basically, then we can see some in that segment also.
Rohan Patel
Okay. But seeing your close competitor who operates country liquor in one state and that to in say UP who is a — who is having a market-share of, say, 25% to 27% and does 200 million liter in-country liquor in UP. So they have fairly healthy EBITDA compared to mostly twice than ours. So is it due to geographies that you cater to in — within a state district wise? Or the —
Amar Sinha
I think we’re talking about Uttar Pradesh and somebody doing it for we have a mix of the country liquor as well as the country liquor. I’m giving you the mid-single-digit margin mix of the mix of the both of being sold.
Rohan Patel
So if you get so let me —
Amar Sinha
Let me explain this to you. There are two large players in UP including us. The margins for-country recur remain more or less the same. There is no difference because the SKUs that both the companies sell are the same, the strength that the other said is also the same. So the margins cannot be — the EBITDA margins cannot be different unless you include some other businesses.
Rohan Patel
Okay. Okay. And what we have seen is that there are lot — this is towards the IMFL business and in PNA segment. What we have observed is that lot of competition is coming in, lot of brands are coming in, but we have seen that millionaire portfolio of companies that are doing over 1 million cases are being coming from well-established legacy brands like Radico, USL or. So what advantage does a company like Radico has over a new entrant or a new brands that are coming up, celebrities brands which are coming up lately.
Abhishek Khaitan
They in. There is a complete that black blackout of the brand being positioned or being showed and this and that. So definitely income bank as a better listing down. No Amar will speak up.
Amar Sinha
Let me let me explain this bit. National players like have a — have the benefit of distribution and marketing strength. And with the scale of operation, there is a definite advantage for new brands produced by national companies as against smaller players. It’s very difficult for new entrants to sustain today because cost of entry and the cost of sustenance is very, very-high.
Rohan Patel
Okay, that fairly answers my questions. Thank you for this opportunity.
Operator
Thank you. A reminder to the participants, anyone wishing to ask a question please press star in one. Participants if you wish to ask a question you may please press star in one. As there are no further questions, I now hand the conference over to the management for the closing comments.
Abhishek Khaitan
Yeah. So moving forward, we will continue to deliver a strong about volume growth driven by our diverse brand portfolio. Secondly, we will further develop our brand — luxury brand portfolio. We will see a major contributor to our profitability. Furthermore, we are focused on ensuring that our investment operate efficiently as possible. This will enable us to generate cash, prepay debt and return cash to the shareholders. We look-forward to interacting with you in all our next earnings call. In the meanwhile, if you have any queries or please to write to us.
Thanks a lot.
Operator
Thank you, members of the management team.
Abhishek Khaitan
Thank you.
Operator
Ladies and gentlemen, on behalf of Dolat Capital Markets Private Limited, that concludes this conference call. We thank you for joining us and you may now disconnect your lines. Thank you.