Som Distilleries & Breweries Limited (SDBL) Q3 FY23 Earnings Concall Transcript

Som Distilleries & Breweries Limited (NSE:SDBL) Q3 FY23 Earnings Concall dated Jan. 27, 2023.

Corporate Participants:

Nakul Sethi — Director Finance & Strategy

Analysts:

Darshil Jhaveri — Ground Capital — Analyst

Nitin Awasthi — InCred Equities — Analyst

Kuber Chauhan — IDBI Capital — Analyst

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Manan Shah — Moneybee Investment Advisors — Analyst

Darshika Khemka — AV Fincorp — Analyst

Ayush Agarwal — MAPL Value Investing Fund — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to SOM Distilleries & Breweries Limited Q3 FY2023 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Mr. Nakul Sethi, Director, Finance and Strategy. Thank you and over to you sir.

Nakul Sethi — Director Finance & Strategy

Thank you. Good afternoon, ladies and gentlemen. We welcome you all to the SOM Distilleries & Breweries Limited quarter three FY2023 earnings call. During the quarter, we sold a total number of 26 lakh cases of beer and 3 lakh cases of IMFL resulting in an income of INR1,510 million. Our flagship brand Hunter, Black Fort and Power Cool saw strong sales volume. The expansion of the company’s customer base and overall volume was a result of both an increase in sales in market, where the company already had the presence, as well as the company’s success in increasing sales from new markets. This was achieved by leveraging the company’s existing strength and utilizing new strategies to reach new customers in the relatively untied market.

The key business highlights are as Hunter. Our company had shown significant growth in sales with over 100 lakh cases of beer being sold in the past nine months. This demonstrates a strong demand for our products and firmly establishes our position within the industry. We held 14% of Karnataka’s over beer market share in October ’22 demonstrating our resilience and popularity in a competitive market. IMFL volumes during the same quarter were over 3 lakh cases, as compared to 1.6 lakh cases in the previous quarter. The expansion project is planned to be completed by quarter one FY 2024.

Coming to our financial performance, for the quarter, we have reached to a sales revenue of INR1,510 million with a growth of 66.7% year-on-year. During the same period our EBITDA stood at INR195 million, and PAT stood at INR105 million, with a margin of 12.9% and 7%, respectively. The company’s strategies have led to a growth in important markets, resulting in an increase in market share.

During the nine months period ending FY’23, the company recorded a sales revenue of INR5,550 million, representing a growth of 152.8% compared to the same period, the previous year. Additionally, the company reported an EBITDA of INR740 million and a PAT of INR444 million. These results show a strong rebound from the previous two financial years where COVID had a major impact on the operations of the company. The company’s outstanding results are a testament to the confidence in the excellence of our products and proficiency of our teams in implementing the plant.

The favorable reception of our products by consumers is a clear indication of the company’s potential to expand the market share across all product lines. We would also take this opportunity to address concerns of the investor on the cancellation of the EGM for approval of INR65 lakh warrants to the promoters. It was felt that there was a lesser need for funds towards capex in the company and as such take essential issue was deferred. Instead, it was decided that we continue with the rights issue to give the existing minorities, investors the opportunity to be a part of the growth story of the company. The promoters are also willing to take up any undersized portion on the rights issue. This step will also lead to lesser dilution of equity, which was a causes concern for some investors.

Post-expansion, if there is a need for further capital, then we shall evaluate and if need to do another preferential issue. Going forward, we believe that our growth trajectory will continue to be positive and we anticipate delivering robust volume and revenue growth. This is based on our strong foundation, the effectiveness of our strategy, then our ability to adapt to the ever changing market conditions.

With this, we would like now to open the floor for Q&A. Thank you so much.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions]. The first question is from the line of Darshil Jhaveri from Ground Capital. Please go ahead.

Darshil Jhaveri — Ground Capital — Analyst

Hello, good evening, sir, and thank you so much for taking my call. I hope I’m audible.

Nakul Sethi — Director Finance & Strategy

Yeah. Hi, good evening.

Darshil Jhaveri — Ground Capital — Analyst

Yeah. Yeah, sir, hi. So I just wanted to congratulate on your good set of results, and now I would just like to ask, in terms of our region for next year now seeing everything is normalized. So what kind of revenue are we expecting for next year?

Nakul Sethi — Director Finance & Strategy

We are expecting — so I think we should be ideally placed to answer that question after we declare our quarter four results. But I expect that we should grow by about 20% to 25% in terms of revenue for next year.

Darshil Jhaveri — Ground Capital — Analyst

Okay, sir. Thank you so much. And sir, so on such a — on a higher base, on a higher revenue, so we would get some kind of operating leverage. So we could expect a similar increase in our profit margins like something that we did in Q1 or something around the 13%, 14% range. So will that be a fair assumption?

Nakul Sethi — Director Finance & Strategy

Yes. We could look at those kind of margin, because obviously, when you have economies of scale coming in, so obviously, we tend to have higher margins in quarter one.

Darshil Jhaveri — Ground Capital — Analyst

So we have more seasonality towards quarter one, right?

Nakul Sethi — Director Finance & Strategy

Yeah. Because that’s the peak consumption season for beer.

Darshil Jhaveri — Ground Capital — Analyst

Okay. Okay, sir. And if I can just ask — squeeze in one more question. What is our current capacity utilization level?

Nakul Sethi — Director Finance & Strategy

So I mean, the Woodpecker plant, the Hassan plant is running at above 100% currently. Bhopal for the whole year would be about — close to about 55% and the plant at Orissa would be close to 40%.

Darshil Jhaveri — Ground Capital — Analyst

Okay, sir. So with our existing facilities, so what kind of peak revenue could these facilities make us and further our new capex, what kind of additional revenue, would that come in, if that could — that could help me a lot? Thank you so much.

Nakul Sethi — Director Finance & Strategy

So the existing capacity can give us a turnover about INR1,100 crores in beer only I’m saying. And the additional capacity, which we are putting up, can give us another maybe INR150 crores to INR200 crores.

Darshil Jhaveri — Ground Capital — Analyst

Okay. Okay, yeah. I think that helps me a lot. Thank you so much for answering and all the best. Looking forward to the good numbers. Thank you.

Nakul Sethi — Director Finance & Strategy

Yeah.

Operator

Thank you. The next question is from the line of Nitin Awasthi from InCred Equities. Please go ahead.

Nitin Awasthi — InCred Equities — Analyst

Hello, sir. Few questions from my side. Firstly, you have mentioned in the presentation, you have a INR100 crore expansion plan between the two plants, one in Bhopal, one in the Karnataka plant — Hassan plant, sorry, in Karnataka. So could you divide this capex number, how much is going in for the Bhopal plant, how much is going in for the Hassan plant and by when will this work in progress can be competed?

Nakul Sethi — Director Finance & Strategy

So I think the Bhopal plant is about INR58 odd crores. And the Hassan plant would be more close to INR43 crores, INR44 crores.

Nitin Awasthi — InCred Equities — Analyst

Got it. And work on this expansion has started already?

Nakul Sethi — Director Finance & Strategy

Yeah. Yeah. So we have — I think done about — in terms of payment, we had done about close to about 65% to 70% of the payments.

Nitin Awasthi — InCred Equities — Analyst

Okay. So by when do you expect this to do the trial production and be up and running these two capacities expanded?

Nakul Sethi — Director Finance & Strategy

By quarter one.

Nitin Awasthi — InCred Equities — Analyst

Beginning of quarter one, or mid of quarter one. The reason I ask this question is, sir, because, you said, Karnataka, we are running at 100%. So unless and until we do an expansion, our revenue will be stagnant.

Nakul Sethi — Director Finance & Strategy

Yeah. Yeah. So we obviously will take advantage of the expanded capacity in Karnataka for the season.

Nitin Awasthi — InCred Equities — Analyst

Okay. So beginning of the season. That’s the hope right now.

Nakul Sethi — Director Finance & Strategy

Yes, yes.

Nitin Awasthi — InCred Equities — Analyst

Noted sir. And Odisha, if you could shed some light upon that Odisha facility, what percentage of utilization are we running at there?

Nakul Sethi — Director Finance & Strategy

So it’s currently about close to about 40% for the nine months.

Nitin Awasthi — InCred Equities — Analyst

Okay. And this is only beer or beer and IMFL combined?

Nakul Sethi — Director Finance & Strategy

No. No. This is only beer.

Nitin Awasthi — InCred Equities — Analyst

Okay. And how is the state shaping up sir, competition wise, another ways do you know of growth because both the other states that you are in, you are doing pretty well. And if Odisha starts to kick-in you’ll do even far more better that’s why I want to add this?

Nakul Sethi — Director Finance & Strategy

We are doing pretty well in Odisha. I was just looking at the market share numbers. We are close to about 12% in Odisha currently for the nine months. So we are doing pretty okay, I think. So I think going forward maybe next year, we will do even better in Odisha.

Nitin Awasthi — InCred Equities — Analyst

Understood. I understood, sir. And main competition in Odisha, coming from the usual guys you’re competing within the other states? Or there are some homegrown brands there?

Nakul Sethi — Director Finance & Strategy

No. So the main brand, who has got the main market share is UB there, its the biggest out there. So, yes.

Nitin Awasthi — InCred Equities — Analyst

Okay. Understood, sir. Thank you so much for answering the questions.

Nakul Sethi — Director Finance & Strategy

Thank you.

Operator

Thank you. The next question is from the line of Kuber Chauhan from IDBI Capital. Please go ahead.

Kuber Chauhan — IDBI Capital — Analyst

Yeah, thank you for taking my question and congratulations on the good set of numbers. Few questions are there. Just writing on that INR100 crore capacity which is going to be onstream from, I just heard from FY’24. So what would be the utilization for first year? And how much we are targeting for couple of — I mean for peak utilization, how much years it will be passed on for that?

Nakul Sethi — Director Finance & Strategy

So I mean, I just cannot answer that, what would be the utilization of that utility, but we are hopeful that — see the facility, which is setting up in — which is being put up in the Bhopal plant is canning line, right. So that will be within the overall ST of the Bhopal plant, but it will be sub-divided in to a canning facility. So obviously, there is a need for bigger canning facility, as we look at quarter one, and as we look at entering new states like UP, which we want to target next year. Woodpecker, we are already running short of capacity, we are still at 100% considering that we are in the lean season. So obviously, I think going forward, we will have good capacity utilization coming out of the Karnataka plant, also on a expanded capacity level.

Kuber Chauhan — IDBI Capital — Analyst

Okay. Okay, sir. And second question is on, why — I mean, what was the purpose for right issue and not raising — reducing debt more? So we could have done it easily, by raising few amount of debt and not to going for — what was the root for going for right issue?

Nakul Sethi — Director Finance & Strategy

We per se are little averse to raising more debt currently and because we still have got about I think about INR150 crores of net debt sitting on our books. So that was the reason for taking more of having going through the equity route. We might take some debt because as most of the state are moving towards a duty paid model. So we’ll take some working capital limits, maybe towards the end of this financial year or in the early part of the next financial year.

Kuber Chauhan — IDBI Capital — Analyst

So what would be the working capital days for this quarter?

Nakul Sethi — Director Finance & Strategy

Sorry?

Kuber Chauhan — IDBI Capital — Analyst

Working capital?

Nakul Sethi — Director Finance & Strategy

Working capital, yes.

Kuber Chauhan — IDBI Capital — Analyst

So the days which if you can just highlight on that?

Nakul Sethi — Director Finance & Strategy

So I think the deter on an average charge will be realized in writing about close to about 60, 65 days.

Kuber Chauhan — IDBI Capital — Analyst

Okay. Okay. And sir, I mean, from last three quarters, we are maintaining double-digit margins, EBITDA margin. So how we are looking at that in future and are we going to maintain it? And if we are maintaining it, then what could be the drivers for it?

Nakul Sethi — Director Finance & Strategy

I’m sorry, I’m not able to listen to you properly.

Kuber Chauhan — IDBI Capital — Analyst

Yeah. I was saying that from last consecutive three quarters, we are maintaining a double-digit margins, the EBITDA margins. So are we going to maintain it in future? And if we are going to maintain it, then what could be the drivers for that like from the cost per se or from the price hike per se?

Nakul Sethi — Director Finance & Strategy

See the cost pressures are still there. So it will be very difficult to predict or to give you a guidance about the kind of EBITDA margins we expect in the future, but it will be our endeavor to maximize the margins.

Kuber Chauhan — IDBI Capital — Analyst

Okay. And sir, last question, the Genius prestige brand, which is gaining current kind of a 46% share in Karnataka. So are we going to expand it in other states as well?

Nakul Sethi — Director Finance & Strategy

So yes, we expect that we’ll start operations in IMFL in Odisha also pretty soon. So let’s see how the response comes in Odisha going forward.

Kuber Chauhan — IDBI Capital — Analyst

Okay. Okay. Okay. That’s it from my side. Thank you.

Operator

Thank you. The next question is from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited. Please go ahead.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Yeah. Thanks for the opportunity. A couple of questions. Firstly, can you give some broad overview on how the UP and Delhi market are performing, where we are new into the business? And if you can give volume detail?

Nakul Sethi — Director Finance & Strategy

Sorry, please come again, I lost you.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

So I was asking about how the performance is in UP and Delhi market where we have entered last year and if you can mention about the volumes for UP, Delhi? It will be helpful.

Nakul Sethi — Director Finance & Strategy

See — I mean, Delhi and UP are new markets for us. So I think it will be the real indicator of the market share, which we have garnered or taken would be for the next financial year. This year, we — our main concentration has been on our home markets that is MP, Karnataka, Kerala and Odisha, for that matter.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. So in nine months FY’23, we have, let’s say, in terms of growth, we have got the two advantage. One is obviously the FY’22 had a low base, because of the COVID? And also because of the change in the MP — Madya Pradesh Excise Policy, but now we have a larger base in terms of volumes for FY’23. So now you are mentioning the 20% to 25% growth. So is it fair to understand that most of this growth will come from the new market like UP, Delhi or you feel that there is still high growth potential in Bhopal and Odisha and Karnataka market as well?

Nakul Sethi — Director Finance & Strategy

Yeah. Yeah. So we still, I mean, are very hopeful that we’ll grow further in our existing markets of MP, Odisha and Karnataka and Kerala. Though we are also looking at — like you rightly said, at Uttar Pradesh and Delhi to fuel our growth further.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. And in terms of this INR100 crore capex, so do we required any debt for that capex?

Nakul Sethi — Director Finance & Strategy

Hello.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Hello.

Nakul Sethi — Director Finance & Strategy

Yeah, l lost you.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Yeah. So I was asking that for this INR100 crore capex, will we required any debt?

Nakul Sethi — Director Finance & Strategy

No. As of now we do not anticipate that we’ll require any debt.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. So and how you are planning to use this INR50 crore of rights issue?

Nakul Sethi — Director Finance & Strategy

That will be mainly for our working capitals.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. Mainly for a working capital. Okay. And last question from my side. On this INR100 crore capex, will there be any capacity expansion or it’s just a canning capacity?

Nakul Sethi — Director Finance & Strategy

So we are actually doubling the capacity in Karnataka. So from 45 lakh cases going up to 90 lakh cases.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. And in Bhopal?

Nakul Sethi — Director Finance & Strategy

So Bhopal, these capacity will remain the same, except that we’ll have another canning facility coming up.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. And one just last question, you mentioned about the capacity utilization, say Bhopal was 55%, Odisha 40%. So this is for nine months, right?

Nakul Sethi — Director Finance & Strategy

Right.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

So since our business is seasonal, where Q1 would be having, let’s say 80%, 90% utilization, and then other three quarters would be having a lesser utilization. So in a annualized basis, what could be the peak utilization we can go?

Nakul Sethi — Director Finance & Strategy

It goes to about 80%, 85%.

Dixit Doshi — Whitestone Financial Advisors Private Limited — Analyst

Okay. 80%, 85%. Okay, thank you. That’s it from my side. Thanks.

Operator

Thank you. [Operator Instructions] The next question is from the line of Manan Shah from Moneybee Investment Advisors. Please go ahead. Mr. Shah, your line has been unmuted. Please proceed with your question. Manan Shah?

Manan Shah — Moneybee Investment Advisors — Analyst

Hello. Can you hear me?

Operator

Yes. Now we can hear you.

Manan Shah — Moneybee Investment Advisors — Analyst

Hello.

Operator

Yes. We can hear you now.

Manan Shah — Moneybee Investment Advisors — Analyst

Yeah, hi. Thank you for the opportunity. Sir, on the capex, the INR100 crore that — so have we ordered these lines? Or are we in the process or have we received the deliveries of these machinery?

Nakul Sethi — Director Finance & Strategy

Sorry, please come again.

Manan Shah — Moneybee Investment Advisors — Analyst

The capex for the INR100 crores. So you mentioned that we have ordered. So I mean, when do we expect the delivery of these machinery?

Nakul Sethi — Director Finance & Strategy

They are in the process of being delivered. So I think everything should be done by quarter one.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. Because we are just now two months away from — for this — for the quarter one. So to utilize these capacity for the new season, I believe there would be fair amount of time required to install these plants and machineries as well? So I mean —

Nakul Sethi — Director Finance & Strategy

No. No. Already we are working on it.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. Okay. And my second question was, if we look at the mix between our three brands, Hunter, Black Fort and Power Cool. So there has been a substantial increase in the mix. So Power Cool mix has gone up substantially to almost 64%. So if you can just throw some light why is this happening? Is it because we are entering new geographies and using this brand to enter those geographies? Or there is some other reason — there’s more pull for the Power Cool in our existing geographies, if you can just highlight over there?

Nakul Sethi — Director Finance & Strategy

So Power Cool, in fact, has been doing exceedingly well in Karnataka, where we are gaining market share. That is one of the reasons why the contribution of Power Cool is increasing.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. So this increase is not because of our entry into UP and Bihar market?

Nakul Sethi — Director Finance & Strategy

No. No. It’s doing very well in Karnataka as of now.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. Okay. But we are not seeing the traction towards our more premium brands of Hunter and Woodpecker that we had launched?

Nakul Sethi — Director Finance & Strategy

In which market?

Manan Shah — Moneybee Investment Advisors — Analyst

In Karnataka?

Nakul Sethi — Director Finance & Strategy

So the beer — so the natural traction, which happens is, between Black Fort and Power Cool, Hunter unfortunately its taking some time to pickup, but we expect that Hunter also would do well in the next financial year.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. And Woodpecker, I believe we had launched — we were planning to launch in a big way. So if you can just throw some light over there?

Nakul Sethi — Director Finance & Strategy

This summer we will launch Woodpecker in a big way and we are doing exceedingly well in the draught beer space through Woodpecker in Bangalore and around.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. So are we planning to launch this in other states as well or it will be currently in Karnataka only?

Nakul Sethi — Director Finance & Strategy

We’ll first start with Karnataka.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. And on the IMFL volumes as well now, there has been a decent growth over there as well. So can we expect this run rate to continue or to improve going forward or there was some impact of our contract manufacturing with Radico because of which is volume went up?

Nakul Sethi — Director Finance & Strategy

No. No. No. This sale is not comprise anything of Radico sales.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay?

Nakul Sethi — Director Finance & Strategy

Because we got a different arrangement with them. So this is all our sale [Technical Issue] and we are hopeful that, we will do well in IMFL also going forward in Karnataka.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. So I mean, these volumes, we can expect these to continue.

Nakul Sethi — Director Finance & Strategy

Yeah. Yeah. Very well.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. So as well I understand this would be due to our taxes over Genius brand?

Nakul Sethi — Director Finance & Strategy

Yes. And we also have now got a dedicated team, which is concentrating on IMFL sales.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay. Okay. Understood. Sir, earlier we were of the view that this press that we were doing those funds would be utilized for doing this capex of INR100 crores, but now since we’ve cancelled that, how will we manage to fund this capex?

Nakul Sethi — Director Finance & Strategy

So we have already out of say INR100 crores, we have already spent close to about INR70 crores.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay.

Nakul Sethi — Director Finance & Strategy

So there is not much gap left as such.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay, understood. And when are we expecting the deliveries of these machinery hang in as it in the next month. Should we expect the deliveries or it will be by March, when we — just see the delivery of the machineries?

Nakul Sethi — Director Finance & Strategy

It’s ongoing.

Manan Shah — Moneybee Investment Advisors — Analyst

Okay, thank you. I’ll come back in the queue.

Operator

Thank you. The next question is from the line of Darshika Khemka from AV Fincorp. Please go ahead.

Darshika Khemka — AV Fincorp — Analyst

Hi. Am I audible?

Nakul Sethi — Director Finance & Strategy

Yes, ma’am, you are.

Darshika Khemka — AV Fincorp — Analyst

Hi. So a couple of questions, sir. First of all congratulations on a good set of numbers. Firstly, I wanted to know the split between our own brand revenues and the contract manufacturing revenues, basically wanted to know what would Radico’s arrangement be contributing to our revenue currently? And the second question is that I actually sort of missed the opening remarks that you had on the rights issue, if you could please repeat that it will be very helpful.

Nakul Sethi — Director Finance & Strategy

So I think about the sales which we have posted is about 99.5% or 99% is our own sales.

Darshika Khemka — AV Fincorp — Analyst

Okay. So the contribution from Radico is maybe negligible?

Nakul Sethi — Director Finance & Strategy

Negligible. All from other brand is negligible. This is all our sales or you can say 99.5% of — I hope that answers your first question. Second question was?

Darshika Khemka — AV Fincorp — Analyst

Could you please repeat your opening remarks on the rights issue part, I actually sort of missed that.

Nakul Sethi — Director Finance & Strategy

The rights issue is being done for the working capital needs of the company. That’s it. So anything specific you wanted me address on that?

Darshika Khemka — AV Fincorp — Analyst

The amount if anything?

Nakul Sethi — Director Finance & Strategy

It will be up to INR50 crores.

Darshika Khemka — AV Fincorp — Analyst

Up to INR50 crores. All right. That is very helpful. Thank you so much.

Operator

Thank you. [Operator Instructions] The next question is from the line of Ayush Agarwal from MAPL Value Investing Fund. Please go ahead.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

Sir, hi. I hope I’m audible.

Nakul Sethi — Director Finance & Strategy

Yes, sir.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

Sir, congratulations on a good set of results. Two questions, sir. One is on the capex, you mentioned that Karnataka facility will almost doubled from 45 lakh cases to 90 lakh and but Bhopal capacity will not go up, so how will it add to our revenues than the canning facilities?

Nakul Sethi — Director Finance & Strategy

So the canning facility, the realization is — canning facility realization is much higher than a per case basis of a bottle. And there are certain markets which have got a higher saliency towards cans, that is one state is UP, which we want to target next year. So therefore, the need for a enhanced canning facility.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

So what would be the difference between bottles and cans if for per case.

Nakul Sethi — Director Finance & Strategy

About 20% increase.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

40%?

Nakul Sethi — Director Finance & Strategy

20%.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

20%. Okay. So this INR100 crore capex is supposed to be around INR150 crores, INR200 crores of additional revenues?

Nakul Sethi — Director Finance & Strategy

Yes.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

And you mentioned that the existing facility can do INR1,100 crores of revenue. So in total, after this capex, we will be in a state to do INR1,300 mid crores of annual sales.

Nakul Sethi — Director Finance & Strategy

Yes.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

So assuming that we can go grown 20%, 25% in FY’24, we’ll reach optimal levels very soon. So what are our future capex plans if we have thought about any?

Nakul Sethi — Director Finance & Strategy

Not right now, maybe in subsequent calls after three months, we can address that question again.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

All right. Also in the presentation I noticed that I see that our IMFL realization has fallen, what can be the reason for that.

Nakul Sethi — Director Finance & Strategy

Because we are selling more of that brand in Karnataka, which has got a lower realization.

Ayush Agarwal — MAPL Value Investing Fund — Analyst

Okay. Okay. Understood. All right. Thank you. Thank you for answering my questions.

Operator

Thank you. [Operator Instructions] Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference back to Mr. Nakul Sethi for closing comments.

Nakul Sethi — Director Finance & Strategy

I would like to thank you all for joining us on the quarter three FY’23 conference call. Trust all your queries have been adequately addressed. Should you require any further information, please reach out to our Investor Relations team. We will revert to you with all necessary details at the earliest. Thank you so much.

Operator

[Operator Closing Remarks]