S H Kelkar and (NSE:SHK) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the S H Kelkar and Company Limited earnings conference call. As a reminder, all participant lines will remain in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I will now hand the conference over to mister from CDL India for opening remarks. Thank you, and over to you. Thank you, Ryan. Good afternoon, everyone, and thank you for joining us on S H Kelkar and Company Limited's q one FY twenty twenty seven earnings conference call.

0:46 We have with us mister, full time director and group CEO mister, CEO, Pregnancy's Asia and USA and mister, group chief financial officer of the company. We will begin the call with a brief opening remarks from the management, following which we will open the forum for a q and a session. Before we begin, I'd like to point out that certain statements made in today's call could be forward looking in nature, and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I'd like to invite mister to give his opening remarks. Thank you, and over to you, sir. Good afternoon, everyone, and thank you for joining us for the SHK Kelkar and Company earnings call for the first quarter financial year twenty twenty seven.

1:34 We are pleased to have begun the year with a sustained solid performance and an encouraging revenue growth accompanied by improvement in the operating profitability. However, the operating environment continues to warrant caution. Geopolitical developments continue in West Asia have kept energy, freight and generally trade volatility remains high. At this time, the fundamental demand drivers of our industry in the consumers' preferences for fragrance and taste across personal care, home care and food categories have remained intact and continued to grow, but we are cautious on the overall environment. We therefore are not looking to predict the environment and the macroeconomic growth, but to be prepared for rapid changes.

2:28 Our long term priorities are unchanged, deepening customer intimacy, expanding the opportunity pipeline and we've invested ahead of demand in the R and D and creative development centers and manufacturing capabilities. These investments carry near term costs, but they are what position us to win larger briefs, anticipate evolving consumer preferences and build durable differentiated positions across categories and new markets, especially in European and American markets. We are making these investments with discipline and with a clear line of sight to the revenue opportunities they are designed to unlock. We remain equally focused on supply continuity and service levels to our existing clients, areas where our proactive planning has allowed us to support customers without any interruption despite the fluid global supply environment.

3:22 With that, let me hand over to Jagdish to take you through the financial performance in greater detail. Over to you, Jagdish. Thank you, Kedash. Good afternoon, everyone, and thank you for joining us. The consolidated revenue from operations grew 14% Y o Y to INR $6.62 crore. Our segment delivered healthy growth led by Europe and select international market. Our performance we are particularly pleased with given the subdued consumer backdrop in part of the developed world. The flavor segment recorded strong broad based growth across geographies and other key contributor to the quarter. I would note that the portion of this growth reflects the timing of certain customer orders and the pace of the growth should therefore be read on an annualized basis rather than extrapolated from a single quarter.

4:16 Gross margins were stable year on year, supported by a favorable product mix and attractive raw material planning. An outcome we consider satisfactory given the volatility in select input prices. Consolidated EBITDA was 21% to INR 89 crore with the EBITDA margin improving to 30.4% from 12.6% in the corresponding quarter last year, aided by operating leverage on the higher revenue base. Within the segment, reported profitability absorbed higher operating expenses linked to the continued strengthening of our R and D capabilities and global CDC network. These are delivered growth oriented investments and while they will be on segment quality until the corresponding revenue scale up. That is central to the quality and reliability of our future growth.

5:07 The global ingredient business saw a softer quarter on lower demand in select export market, market, and we are watching this closely. On the balance sheet, net debt increased by INR 65 crores during the quarter to INR 80 crores as of June 2026. This reflects two constant decisions, our strategic inventory buildup to ensure supply security for customers in uncertain geopolitical environment and continued capital deployment towards capacity expansion and growth initiatives. While we continue to navigate near the headwinds, we remain firmly committed to deleveraging our medium to long term. In the quarter, we recognized exceptional income of approximately INR 30 crores towards the insurance claim relating to the final dividend.

5:56 The claim process is progressing well and we expect full settlement within the current financial year. Looking ahead through FY '27, the pace of revenue growth may vary across quarters depending on the timing demand and orders and the geopolitical situation. Notwithstanding this quarterly variation, the trend business momentum keeps us on track to deliver double digit revenue growth and improve margins for the full year. We remain focused on balancing growth with financial discipline through appropriate pricing and cost management initiatives, improved cash conversion and prudent capital allocation. With that, I would request our moderator to open the call for questions. Thank you. Thank you. Ladies and gentlemen, we will now begin the question and answer session.

6:51 If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Abhijit Akhla from Kotak Institutional Equity. Congratulations on an improvement in this quarter's numbers. Was just hoping to dig deeper into a couple of areas. One was on the revenue growth front. First of all, flavors, as you pointed out, has grown extremely strongly, maybe some lumpy orders this quarter. Would it be possible to share some outlook for the full year in terms of what your budgets are for that business just in terms of revenue growth for the full year, just so we get some perspective of how the rest of the year might be?

7:46 And then on the Fragrances side, the India piece seems to be a little bit soft, flat revenues year on year. But is that mainly because of a high base from last year's 1Q? And if so, how are you seeing trends the India fragrance business? And finally, just on the foreign exchange contribution, just given the sharp depreciation in the rupee, could you just spell out how much that might have contributed to revenue growth this quarter? Thanks. So I think on the revenue side, while the overall revenue, the quarter is in line with the budget, the internal dynamics or the product mix is skewed more towards flavors being higher than the budget and the ingredient business being lower than the budget.

8:33 But the overall revenue is in line with our expectation. For the future remaining quarters, we expect AID to catch up as the year goes through and the flavors to normalize, I would say, I think we did INR 112 crore revenue for flavors this quarter. And ballpark INR 95 crores would be on a normal basis. We expect that one odd month or two or three weeks of prepointment of orders by clients, given that the lead times and shipping times were not normal. So we have seen uptick in the orders from some of our clients.

9:18 However, in July, we don't see any decline in this momentum. So there is continued demand. But I would look at is something like INR 95 crores, 96 crores of flavor sales of quarter one and guesstimate about INR 15 crores of preponement through the kind of extra stock buildup in the distribution. Yes. Then you had a question on foreign exchange. The 9% is the like for like growth and then net net 5% is our additional FX sales due to exchange rate.

10:07 You had a third point, which I agree with in there. So, Q1 last year was quite a strong quarter in comparison, and we have taken conscious decision as we pointed out in quarter four to exit from some low margin businesses, and we have kind of held back on over sales to clients and only given what they actually regularly consume and not taken any additional advance orders as the pricing movement has been happening in the quarter. So as we increase prices, we have rationalized the margins. We have made sure that we are selling the right products to the right people at the right pricing in a much more disciplined manner and less or more focused on the overall business, given that we are not confident of having raw material to service all clients in the first quarter. I think subsequently with our inventory buildup and the current scenario, we are servicing almost all the clients.

11:28 Thank you. No, that's really helpful color. Thanks for that. The other point I just had was on the margins. So one thing is, you know, you've mentioned the possibility of some margin expansion this year along with double digit revenue growth. Given these reported, you know, 13 odd percent margins this quarter, any broad range that we might be comfortable sort of offering in... For the... From a full year perspective? I mean, will it be, say, 10 12 or maybe slightly higher than that? Anything you might be comfortable talking about? I also just wanted to check, should we expect gross margins to remain around these levels, current levels given all the volatility in the marketplace? And finally, just on flavors.

12:14 Flavors have been reporting extremely strong margins. So what is a reasonable number, sustainable number to work with going forward? So on the flavors front, I think the margins are obviously fast growth has resulted in a very healthy bottom line. We continue to see the growth. So at the moment, we are quite bullish on how the flavor business is evolving. Quarter one is, I would say, very strong. We may not see the same sort of momentum in the remaining quarters, but it is doing exceedingly well. There is repeat demand and new product adoption last year has been good. We are seeing that momentum continuing into this year. So flavors will outperform as the current year vis a vis the previous year's trend. So it is in line.

13:09 To your question on the bottom line, so I think this quarter is not unusual quarter in any way. So we would if there are no big changes, we should look at similar sort of margin and growth. We just remain cautious. I think the demand and the overall geopolitical situation, if it affects different parts of the world and it affects some parts of our business, then that will affect the overall results. At the moment, we see strong double digit growth across the board. And with that double digit growth is sustained and remains there, we should be in similar margin EBITDA level or at least in terms of absolute numbers.

14:00 Probably percentages can vary up 1% year over year based on the pricing and the sales momentum. But we are in no way this is a kind of exceptional quarter. This is the baseline normal quarter. Thank you so much. And just one last thing for me before I return in the queue, if you'll permit me. So what... Just the timeline for your factory rebuild, you know, and the other expansion that you could please just give us an update on that. Number two, on the debt front, should we expect some further increases during the course of this year? And finally, on your tax rate, it seems a bit on the higher side. What's the full year rate we should work with? Thanks a lot. Yes. Okay.

14:48 Abhijit, when you talk about the factory, I think we are looking announcing in the third quarter. Most likely, we'll move into the new third quarter. If positions more or are going to remain same what we have in June, slightly may go up probably in September, but otherwise, when we talk about a long term or midterm, we are fully deleveraging and there'll be a path to reduce it. So I don't see that that's going to be a same situation as what we have on that. You talk about effective tax rate, which is... So definitely, you know, when we had March 26, ETI was at very high. And it's going to get more dated as we start making the growth into all of the subsidiaries and then we look into the overall profitability. So even the total when we look at June quarter, we are around 31.5% to 32% kind of each year. Our target is that should be less than 30%. That's why we are working on that.

15:45 Okay. Great. Understood. Thank you so much and the best. Thank you. Participants, in the interest of time and fairness to others, we request you to restrict to two questions per participant and rejoin the question queue. We take the next question from the line of Pranav Chandalkar from Rare Enterprises. Please go ahead. Hi. Can you hear me? Yes. Yes. Sir, so I I understand that you're not giving quarter on quarter similar growth in fragrances. But what is the opportunity set here? Like, in, say, two years, three years down the line, whatever investments we are doing, whatever relationships we have, and this industry is relatively unexplored.

16:38 So what is the opportunity set here? Can you just spend some time on evaluating that or explaining that? So if you look at the fragrance business market size in, let's say, just UK and USA, which are our latest new initiatives, this market is roughly 35 to 36% of the global demand vis a vis India, which is 5%. So we are talking about a market size, which is six to seven times bigger than the India fragrance market. It's a different magnitude of size and scale of business. So we are putting our first, let's say, efforts in that market. We have seen some traction. We will continue to grow that over the next two, three years. So the market opportunity is very large. It's basically $10,000,000,000 of opportunity or market size.

17:36 But we are new. It will take us some time to keep building the relationships and start to build this. But the overall market size is quite large compared to the Indian market, the Asian market. And and this market size is actually addressable with the skill sets that we have? Mean, effectively in the longer term, I think we are targeting the 100,000,000 or market in these markets, which is sort of low hanging or easily addressable buyers as we continue to build our R and D capability and customer engagement. So we have more than adequate, let's say, market opportunity for the next two, three years. On the longer term, we have built the platform around innovation, around patents and processes, which we are able to market. So it's a sustainable advantage we want to build in the market and continue to grow. So yes, entire 10,000,000,000 is an opportunity for us. It will take ten years to reach that kind of opportunity space. But the capability to reach all 10,000,000,000 is already sort of built in with the patents, with the back back end systems and IP generation.

18:56 Understood. Thanks so much, sir. Thank you. We take the next question from the line of Shivam Gupta from Asset Manager. Please go ahead. Hi, sir. Thank you for the opportunity. My question is, as customer factors continue to evolve, are you seeing faster growth in premium fragrances compared to mass market product? And how do you expect this trend to influence your product mix over the next few years? So I think generally speaking, as customers have higher disposable income, there is a move to premiumization. This is a normal phenomenon year on year across the globe.

19:42 I think in years of high inflation, which we expect this year to be a bit muted on the premiumization because of inflation. But in general, this trend is a normal trend where people go in for a more premium product or up marketing. The brands also bring in better versions and higher spend products. And this is a normal abnormal trend. So it's not disrupting in any way for us. The benefit of having working in Europe markets for the last few years is that we have already product developed for the next wave of products that will come in Asia. We are cross selling previous sort of previous versions in Europe, which are still in trend in Asia.

20:36 Okay sir. And my second question is, like, what percentage of your revenue today come from the product launch in the last three to five years? About 10 to 11%. And it, it's okay, sir. That's it. Thank you, sir. Thank you. We take the next question from the line of from RTL Investments. Please go ahead. Yes. Hi. Good evening, and thanks for the opportunity. My first question is that we've seen a lot of raw material volatility. And given that we have kept some strategic inventory, Are we seeing some benefit of that in the gross margin? And going forward, can there be some negative impact on the gross margins once this inventory that we have starts depleting?

21:35 So we have prepared in a manner that we have six months visibility on the inventory and our contracts are pricing to the clients. So we have increased the inventory to ensure that for the next four to five months, we don't I mean six months from July effectively, we don't have any additional cost pressure on the raw materials. So all the prices are fixed with stock in hand or contracts in place. So we don't see any big changes in the profile of selling price or cost structure in the next six months on the part of the raw material. We will obviously keep updating what is happening on the raw material month on month. And we have got in a way extra forty five days of inventory in the system to allow us to pass on any big shops or any big changes to the clients in proper time and not take a hit on the gross margin at our end.

22:44 So we have additional inventory to allow us to go back to the clients well in time and ask for and push for the recalibration of the selling prices if required. Got it. Got it. A related question to that is that, you know, if you are confident that our gross margins can be maintained, then shouldn't our EBITDA margins go up as the revenue scales up because your CTC investments are largely done now so that cost of absorption should improve going forward? Yes. Your comment is absolutely right. We are just not in sort of position to anticipate or predict the demand structure or demand situation for the full year. As of now, things look quite in normal range. And as we grow double digit plus, our margins will improve.

23:42 But for the full year, we are not confident to predict beyond two, three months' time. So it's a bit early. It's too uncertain what is happening. So we don't want to put out a number which we really don't know. And if the growth remains as it is, yes, your comment is absolutely right. We do double digit growth, our margins will be better than the first quarter in the full year. But if we at some point with the currency, with exchange rates and or growth faltering in any part of the world, then it has a significant effect on the overall number, then we will have a little bit muted result as a basis.

24:32 Okay. My second question is on the capacity expansion. So the CapEx plan for this full year, how much was done in one q? And if you could kind of split it between Europe and India, that would be useful. So about 25 crores was done in Europe in the quarter one. European CapEx is now completed. The plant is operational since May. Our quarter two CapEx will continue on the Manute and Vasily India fragrance projects. We expect bulk of this investment CapEx to happen in basically before end of quarter two and the Vanuaty factory to be operational in quarter three. And then we have opportunity based on how things are running and demand scenario to either put out the last INR 25 crores of CapEx in the quarter four or defer it to quarter one next year for the one should be plant upgradation.

25:37 And in 2Q in the in environment, how much do you plan to spend? In q two in one unit is about 25 crores. Okay. So 25 crores was spent in one q, 25 crores in two q, and remaining 25 crores, you will decide whether to do it this year or next year? No. Remaining around 50 crores, we will put. This is the three plants in India. Got it. Got it. Thanks. Thanks a lot. I'll come back to the queue. Thank you. We take the next question from the line of Tanish Jaweri Boring AMC. Please go ahead. Oh, hi. Yeah. Can you hear me? Yeah. Yeah. So I just wanted to ask more on the CDC front.

26:26 By when can we expect a ramp up in the European subsidiary, and what kind of a revenue stream can we expect from it? And an incremental ROIC, what are you expecting the return ratios for our investment in Europe to be? So on the longer term, we see ROC around 17% to 18% in the European business. We have just invested in a large center in Germany and with the new factory in Almeray. So we are at the sort of full CapEx cycle. It will take three to four years of growth to come back to the normal trend line. Opportunity space, so we are investing roughly $3,000,000 a year additionally in R and D. And as I said earlier, the markets which we are addressing are quite large.

27:21 We have more than $4,000,000,000 to $5,000,000,000 of new areas where we are operating in Europe. It's not that 4,000,000,005 billion dollars will happen tomorrow morning, but effectively opportunity space for us is quite large. So we are confident of growing extremely fast in these markets and because we have very small base. Okay. Thank you. And on a group level, what kind of a ROA... RO... ROE and ROC do we have in mind, like, the longer term? Like, two, three or down the line? So I think we should have excess of 15% ROC as our target. Our long term target is 20%. But at the moment, we will see three to five years of slow traction towards the 15%.

28:10 And then as the sales ramp up in the new initiative areas, post breakeven and EBITDA plus, and then we will reach that 20% ROCE level. We take the next question from the line of Advaith Chalkar from Equipoice Capital Management. Please go ahead. Yeah. Thank you for the opportunity. I have one question about the recent heavy rainfall and flooding in the parts of Gujarat, including the Wafi region. Have any of our manufacturing facility or supplies and operations been impacted because of this? No. There is no impact on... There is no shutdown we are expecting from this.

29:01 So far, we had no impact. I Okay. Okay. Thank you. Thank you. That's it from my side. Thank you. We take the next question from the line of Ashwin Patil from Intelligent Prosperity Solution. Please go ahead. Thank you for the opportunity. My question is your CapEx cycle will only be completed. If so, what depreciation expense should we we expect in FY twenty seven? Right now, we are on 39 per quarter. And once we do one of the capitalizations, we'll move into that. We are expecting somewhere 38, 39 per quarter kind of a run rate.

29:52 Okay, sir. Thank you. Thank you. Thank you. We take the next question from the line of Sachel Kapur from Antifacial Thinking. Please go ahead. Yeah. Hi. Thank you for the opportunity. Hi,. A couple of questions from my side. First is, what has to be true three years from now for you to say the investments that you have been making in the operating system improvement of Kva and that you have made over the past decade were all kind of successful. So you mentioned we can probably look at 17 to 20% ROCE over the long run. But what will give you an early indication of that... The fact that we are trending in that direction?

30:44 So, we have three large large new market bets, which is Germany, USA and UK. In the last two years, little bit more than two years, we have invested quite heavily in these three development centers with sales, marketing and the whole teams. We see traction in each of these. And what we are looking at is each of these investments to breakeven on a year on year basis in the year three. This is our milestone. So Germany, which has come first, we should look at somewhere between this year and next year to have a breakeven position that we have generated in our business that covers the cost.

31:30 A year later for USA and a year later for UK. So if we track in three years on this line where we have a EBITDA breakeven on the investments, then we will grow from there in our longer term basis. No. Helpful. Helpful. Thank you. And today, if you could remove just one constraint to double Kewa's earnings over the next, say, five years, what would that constraint be? Just one. Say, revenue doubling in five years, you're talking about? Yes. Yes. Yes, sir. Yeah. What is that one constraint, you know, that if you take care of that bottleneck or limitation, you could double the I think the main main sort of concern for us is major disruptions on the global macro.

32:32 Our business and nature of business is quite annual repeat, basis. So once we have a business, it grows, it sustains. A moment we have a macro like we had the pandemic or something like this, then it is affecting not only the year in which the pandemic happens, but also the pipeline or product launches in the subsequent couple of years. So what we have underestimated is the effect of subsequent year growth is also dependent on the previous year product adoptions. So this is as long as we have a consistent macroeconomic situation. Even whatever is the conditions today, they remain as it is for the next five years.

33:20 We will be in a very good position to double our revenue and go on the track that we have outlined. So major changes affect our business. It takes us much longer than it's a very complex business. The kind of momentum building and we don't sort of are not able to cut down R and D and put it back in, in time. So if there are quick fluctuations, we lose out on that area. This is the main concern or constraints. If there's a stable environment, even if it is, I mean, right now, it is not a very positive global environment for growth.

34:06 But if it remains like this, stable, we have more than adequate opportunities and spaces where we can continue to grow and double the revenue and go on our path. Wonderful. Thank you. Thank you so much, Kedar. All the very best. Thanks. Thank you. We take the next question from the line of from RK Business Health Private Limited. Please go ahead. Hello. How much promoter holding place at present? I think 50 lakhs shares. Something like this. 50 lakhs shares. Value of the borrowing against the shares. I think it's 50 like shares.

34:56 Okay. And what is the planning to reduce the debt for next month to year? So as as mentioned, we have the debt level will remain high for the next quarter at the similar levels as we continue our CapEx this quarter and next quarter. I think from the third quarter, it will start to reduce. And our expectation is that every quarter, we will continue to reduce by approximately 25 crores quarter on quarter thereafter. Okay. Okay. Thank you. That's all from my side. Thank you. Participants, if you wish to ask a question, please press star as well.

35:46 We take the next question from the line of Amit Kumar from Jetta Mine Investments. Please go ahead. Yeah. Thank you so much for the opportunity. Can you hear me? Yes. We can. Yeah. Thank you. Sir, my understanding, you know, of the business, typically, you know, you, you know, fix your pricing with customers, you know, at the beginning of the year. Now, you know, given the, you know, disruption that we have seen on the raw material side, I mean, certainly, pricing, you are sort of, you know, talking a little bit about availability also. Definitely a fair bit of pricing disruption between March to July. So I just wanted to get a sense given the kind of, you know, disrupted, you know, raw material environment.

36:37 Have you sort of taken, you know, any sort of pricing actions, you know, during this time between March to till now? And, you know, how much of that... I feel that it's a b two b business, and how much of this has been accepted, you know, by our customers? So we have corrected the pricing to our customers based on the cost inflation that we have ourselves received as a result of the geopolitical effect. We have passed it on, I think almost 95% plus of the clients, we were able to get reasonable price corrections. And we have implemented that across the board with certain clients were reluctant. We have not supplied till the negotiations were completed. And if you see that's part of the reason, the domestic fragrance sales is a bit lower than same quarter last year.

37:41 But we have been successfully able to pass on the costs and we have also increased our inventory. So we are not exposed to future shocks. We are basically committing to the clients' delivery quality and supply certainty with the inventory in hand. Alright. Understood. That's it from my end. Thank you so much. Thank you. We take the next question from the line of Bharat Gupta from Fair Value Capital. Please go ahead. Hi,. Thanks for the opportunity. A couple of questions. So one is on the Google and video business. So you mentioned that it's been under watch, but do you see turnaround which we anticipate over the next two years in this segment?

38:36 We didn't hear quite which business you're talking about. Among the global ingredient business. Right. Global ingredient business. So the global ingredient business obviously is much more directly affected by supply chain disruptions in the recent situation. So we have muted growth for the first quarter. We will resume the growth And we have taken steps, as we mentioned a few years ago, on backward integration and complete away from China supply chain. So those are in place. Unfortunately, the disruptions have created a supply gap in this period. So we are not in a strong position to push the global ingredient growth.

39:25 But it is a stable business, and we continue to see a recovery in the second half of the year. Sure. With respect to the insurance team, so I think we have received some way close to 30 odd close within the quarter. What's the estimate with respect to, like, how much we have processed for the rest of the year? Like I think 50 to 55 crores, 60 crores is the claim amount pending. So we will continue to chase the insurers to fulfill the claim in this year. Sure. That's it from my side, sir. Thank you so much. Thank you.

40:13 We take the next question from the line of Bharat from Quest Investment Management Limited. Please go ahead. Hi, and congratulations on good. So, Kelkar, my question is related to for one. First is on this Unilever business that we have. So how that is ramping up is happening, and are we getting more RFPI from same client or into... I mean, introducing new clients. Are we getting a kind of RFP from new clients? That is one part. And second, on The USA and UK, you say we are seeing some corrections. So if you can give some color because last year, in q one... Q four, we had also started supplying to USA.

41:01 Yeah. So like I mentioned, let me answer your two parts. So Unilever and global accounts, are continuing to engage, not only Unilever but others. There is a continuous stream of projects and developments which are happening at the moment. We don't have any large breakthrough significant additions to the existing portfolio in that scenario. But work is happening and things are a bit changing at their end as they are also facing pricing pressures on their commodity and their sort of new product development or launches are not in the full swing, especially in India.

41:49 Then we have talked about the new initiatives with Europe, Germany, then USA and UK. And Germany is now kind of truly on its way. We have seen regular traction on the developments that are happening there and the sales out of that. USA, we have just started traction in the fourth quarter last year. We expect to do about 1,500,000 to $2,000,000 minimum revenue for the year in The U. S. So that is a good development. And UK is early days. We have just started this year, so we need to wait at least twelve to fifteen months before substantial businesses are materialized. Okay. Great. And second question, I mean, is like, if we were. So that that side also you were talking to answer global account.

42:45 So any update on that? How that is out? And secondly, you said this... So business are 95 per all kind of a run rate that we should expect from q two or what. Is that fair understanding? I think q two maybe even stronger than 95. My guesstimate, nobody has the exact number because client purchases have happened. We've done 112 crores in the first quarter. My guesstimate is that about INR 10 crores to INR 15 crores out of this would be sales, which is extra stock, not actual final consumption. So we may not get that INR 15 crores quarter on quarter, every quarter. So it is higher inventory buildup in this, particularly in the export markets and also in domestic because of the disruption in the supply and the price increases, people would have stocked up their inventory levels with the old price benefit.

43:46 So there is additional estimated INR 15 crores in the INR 112 crores, so INR 97 crores, 95 crores is the actual regular business if there was no big disruption. This is our guesstimate. So base is 95, 96. Quarter two will be better than 95, 96 and quarter three will be better than that and so on and so forth. We don't expect 112 plus growth in the quarter two. Right. That's not our expectation. And second, I mean, any global account that we were working on it. So any update on that? Nothing large. I think businesses have started with some global nutrition companies and things like this, but nothing is substantial, significant at this moment.

44:39 Typically, flavors, products are normally new introductions. It takes three to four years for significant value to come in. Right. And that's in q one, apart from this 15 crores, which business side, like, India, personal care, beauty, and food and beverage. So which business has been driving a large part? No. So I think across the board, it's pretty much business as usual. Global ingredient business has been lower than expected. We have curtailed the suppliers. We have no certainty in this period on the raw material side. So we have sort of controlled and make sure that we service all our existing clients.

45:26 And on the flavor side, we have higher than budgeted or higher than expected sales, which I believe will kind of normalize in the quarter two onwards. So there is no segment, new segment and nothing out of the normal. It's very much a normal quarter with kind of... If I would summarize a normal normal business, double digit growth, flavors outperforming AID, global ingredients below budget, but overall on budget. Okay. Thank you and all the best. Thank you. Ladies and gentlemen, we take that as the last question and conclude the question and answer session.

46:14 I now have the conference over to the management for their closing comments. Thank you. I hope we have been able to answer your questions. Should you need any further clarifications or would like to know more about the company, please feel free to contact our team or CDR India. Thank you once again for taking the time to join us on this call. Thank you. On behalf of S H Kelkar and Company Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.