Vintage Coffee and Beverages (NSE:VINCOFE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Q1 FY twenty seven conference call to discuss operational and financial performance of Vintage Coffee And Beverages Limited hosted by Nwama Well. 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Palash Kavale from Nuwama Wealth. Thank you, and over to you, Mr. Kavale. Thank you. Good morning, everyone. I welcome you all on behalf of Nuama Wealth. I thank the management of Vintage Coffee And Beverages Limited for the opportunity to hold their q one f y twenty seven earnings call.

0:50 We have with us today mister Balakrishna Tati, Chairman and MD Mr. Sai Tejatati, Executive Director Mr. Kranti Kumar Yarkali, Chief Financial Officer and Mr. Jawahar Kunjivaram, Head of Sales and Marketing. I will now hand over the call to Mr. Balakrishna Thati to take us through the quarter. Thank you all, and over to you, Bala sir. Thank you, Balaj. Good morning, everyone. Welcome to Q1 FY 'twenty seven earnings conference call of Vintage Coffee And Beverages Limited. On behalf of the management, I would like to thank all investors, analysts and stakeholders for joining us today for your continued trust and support. Q1 FY 'twenty seven is an important quarter for us because this quarter, we have achieved a great milestone marked by strong financial performance, successful capacity expansion and disciplined execution.

1:55 Just I'll give you a small glance about the financial performance of Q1 FY 'twenty seven. Q1 was another strong quarter for the company, reflecting healthy demand for improved operating scale despite the seasonally lean period. Revenue for the quarter stood at INR 161 crores, registering a robust year on year growth of 58.4% compared to INR 101.6 crores in Q1 FY 'twenty six. EBITDA increased to INR 31.6 crores from INR 18 crores in the corresponding quarter of last year, representing a growth of 75.2%. Profit after tax stood at INR 20.8 crores compared to INR 14.2 crores in Q1 FY 'twenty six, reflecting a healthy growth of 46.1%.

2:49 Our PAT margin remained strong at 12.9% demonstrating our ability to sustain profitability while continuing to invest in future growth initiatives. Alongside our strong financial performance, the company also made significant progress in expanding its manufacturing capacity. As many of you may recall, we commissioned an additional 2,000 metric tons of production capacity last year, January, taking our total installed capacity to 6,500 metric tons. Further, we have increased the capacity FY 'twenty six by another 4,500 tons, making to 11,000 metric tons, representing an increase of approximately 69%.

3:47 The most important factor is that the entire expansion has carried out completely from the internal accruals of the company, revenues, cash generated and in a disciplined capital allocation approach. The expanded capacity became fully operational from Q1 FY 'twenty seven and position us well to support future demand while enhancing operating leverage. We are also pleased to inform our stakeholders of course, we have already communicated. We are pleased to inform the stakeholders that Nissan company large reviewer in CLT has approved amalgamation of our wholly owned subsidiaries, Vintage Coffee Private Limited and Delecto Foods Private Limited, Fit Vintage Coffee And Beverages Limited effective 07/21/2023.

4:39 This strategic consolidation brings all business under a single corporate entity, enabling us to optimize manufacturing facility, equipment and human resources. The merger is expected to improve operational efficiency, reduce administrative costs, strengthen the profitability, achieve greater economies of scale and create long term value for all stakeholders. With regards to the upcoming expansion of Freeze Jet Coffee, we continue to make a steady progress on our proposed expansion plan with the installed capacity of 5,500 metric tons per annum. The company has secured the land from Telangana government under the food processing zone and also paid substantial amount advances to the equipment suppliers and the construction operations are being started.

5:41 With this 5,500 meters of additional capacity of BZED Coffee, the company is going to have a significant growth in total capacity increase from 16,511 plus five thousand five hundred sixteen thousand five hundred metric per annum. With regards to the coffee market, prices are now more or less stable at a level around $3,500 to $3,800 per metric tons. Based on the current market outlook, we expect prices remain broadly within this range during the current year. Besi is expected to witness a healthy crop, which is a positive factor for supply. On the other hand, weather related risks, including the potential impact could affect production.

6:33 Considering these offsetting factors, we believe green coffee prices are likely to remain relatively stable over the next term. On the logistic front, geopolitical tensions in The Middle East and resulted in higher LPG and diesel prices led to modest increase in transit time during the disruption. However, the situation has stabilized to a considerable extent, and the overall impact on our business remain negligible as our exposure to the Middle East market is relatively limited. Our continued focus on strategic expansion customer centric innovation, operational excellence and disciplined execution continues to drive strong business performance. Thank you once again for joining us today.

7:19 We will now open the floor for questions. Thank you. Thank you very much, sir. Ladies and gentlemen, we will now begin with the question and answer session. Anyone who wishes to ask questions may please press star and one on the touch tone phone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use only handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue attempts. You may please press star and 1 to ask questions. The first question is from the line of Priyanshu Jain from GrowthX Infinity.

8:28 Congratulations on decent set of results. So my... I have few questions. First will be on the utilization side. So from the capacity which we have added recently, the 4,500 metric tons. So, like, from that capacity, we started the production in after Q1 or like we have some revenue we gathered from in Q1 itself? First, this question. Yes. 4,500 metatons capacity, have commenced in the month of March, end March. So the Q1 FY 'twenty seven, you have the full capacity utilization of this additional 4,500 metric tons.

9:16 Okay. So like we are running at 100% or 95% utilization from the 4,500 metric tons? It should be in the region of around 90%. Sir, on a sequential basis, if I have that is the question that if on a sequential level, like our revenue declined. So can you like brief up on that aspect, like on what levels like our margins sorry, our revenue declined? Yes, Jayant. If you see quarter one always, the revenues are slightly lower side only. If you see that traditionally in the history of the companies of the soluble coffee industry, I think so because this is in a lean period as in a summer, so April, May, June, there and also second quarter also slightly, there will be a better improvement than the first quarter. But then the third quarter and fourth quarter will be a full swing. And but however, we continue to produce the full capacity and to stock it and then we can this is a lean period. Basically, quarter one is a lean period, but then it will start improving from second quarter onwards.

10:25 Okay. Got it, sir. The second question will be on the margin side as we are seeing improvement in our margins. So like from here onwards as well, we should expect an increase in margins and till at what level, like at efficiency can be improved for margins? Yes. Since the capacity has increased, there will be a slight improvement in the margins. I can only say that in percentage wise, it should be in the region of around 1% it can increase in overall. So around 21% we can expect going forward, 20, 21%? No, not 20%, 21%. If you see the current levels of Q1, I think it is in yes, it is more or less same, but maybe a 0.51%, there will be incremental growth.

11:20 Okay. Okay. Got it. And sir, on the capacity expansion side, like when we are expecting our because I think you missed the initial remarks, so I'm sorry for that. But when we are expecting the freeze rate of coffee to be commercialized? No. We are planning to be in the mid of next year. By June, we should be able to complete the trials and then start from second quarter onwards. This is what we are anticipating as of today. And things are going in accordance with our expectations. If everything goes well, then we can able to do in a second quarter to start the production. Yeah. Okay. Thank you. Thanks.

12:09 We'll take the next question from the line of Vivi Vivishan... I'm sorry. Vibhanshi Jain from Beetroth Fund. Please go ahead. Am I audible? Yes. You are, ma'am. Go ahead. Oh, yeah. So despite one of your have relatively more premium product mix, your EBITDA per kg is around $1.60 to $1.70 per kg compared with roughly $1.37 per kg for the the peer company. So I want to understand, like, what specifically enable us to generate this higher EBITDA per kg? Or, like, is it a geographical presence or packaging mix or something raw material procurement?

12:54 Or, like, I want to get a brief on what enables us to have a higher EBITDA per kg. Vintage Coffee, the EBITDA per kg can be viewed in a different way. See, it is all depends upon the product mix, then tax mix and also the country which we are exporting. It all depends upon that. So it will be definitely vary from company to companies, obviously. So that is the only major things which I think can be made in the products mix and the pack mix. Like it's a product mix and a geographical presence in which we are, like, sending the coffee. No. Hello? Sorry?

13:41 Come again? Like, I want to understand, like, what is driving this EBITDA per kg? Like, is it a product mix or a country mix? Like, for example, like, your peer company has a premium product mix. Is why it is having a lower EBITDA per kg, but we are commanding higher. So is it because of the geography in which we are exporting something like that? Yeah. Vintage, you see, I'll tell you. It all depends, as I mentioned to you, product mix and the pack mix combined, it will make some change in the realization, obviously, and then EBITDA proportionately will change. But the point is that if it is in a product pack mix is on a slightly higher side, if we are doing a more consumer packs and all, obviously, then the EBITDA level will be better. And if we are doing more in bulk, then EBITDA level will be in a slightly lower side.

14:37 So that makes difference. Okay. So like if our packaging mix remains broadly similar, so it is like our 160 to 170 per kg EBITDA is a sustainable run rate, right? No. I can't give any comment on that, but the point I can only tell you that, as I mentioned that because it depends upon that bulk, obviously, if there is a bulk sales, bulk packaging and obviously, the realization will be slightly lower and the EBITDA will be slightly lower. But if it is in a PACS, obviously, then there will be a slightly higher side. But we never know that because it's very difficult for us to give an answer for this because tomorrow, when we grow to the bigger capacity levels, obviously, because it depends upon the mix factors.

15:32 Okay. Like in going forward, if we do a bulk packaging, then our EBITDA per kg may reduce. It depends upon the bulk and the consumer packaging, right? Yes. Vipatchi, I'll tell you, our cost plus margin. So obviously, we have a fixed profit on a per kg basis. So if the bulk sales increases, obviously, the realization of EBITDA, the profits will drop slightly. And if consumer tax increases, though it will higher realization on a price as well as that profit level is also slightly better. Thank you.

16:22 We'll take the next question from the line of Ganesh Rao from Punnarvi Capital. Before we take the next question, request to all the participants to kindly limit their questions to only two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from from. Please go ahead. Thank you. Am I audible? Yes,. Yes. Awesome. Thank you. Thank you. Sir, I have three questions, but I'll try to limit it through through, and I'll jump back to you. First is on the order visibility. Is it possible for you to quantify how much of our FY twenty seven volume are already backed by our annual contract or customer commitment? And additionally, like, how should investors think about the visibility for FY twenty eight also, sir, particularly with the free trade capacity coming in.

17:12 Right? How how does FY twenty eight also look for you from a commitment perspective? Okay, Dinesh. I'll just explain you the we always procure the coffee beans on a back to back basis. When we get an export orders, we place an order for coffee beans. And we have the commitment from the customer for the whole year, twenty two day requirements and all, but the prices are fixed on a quarterly basis. So with regards to the current year, we are more or less through with the arrangements with the customers, what the quantity they are going to buy from us and that projection is already with us. So with regards to the freeze dried coffee, which is coming up in the next year, we also have the visibility on that because we have taken a letter of interest from the few customers and which they are agreed to pick up around 70% to 80% of the total installed capacity of freeze dried coffee subject to the quality and price.

18:13 So that all depends upon the next when we start the production. But otherwise, we have the visibility and we have the focus and we know exactly which markets we are going to sell it. There is a business plan, we are going in accordance with the business plan. That is fantastic, sir. So just to rephrase, you think for FY 2028, when the fees rate capacity comes in, you have roughly 70% to 80% of commitments and or letter of intent, right? That's right. And for FY 2020, sir, are you completely booked out? Can you quantify the rough ballpark number? More or less, we have a volume commitment from the customers for the entire quantities. But then again, as I mentioned to you, it depends upon the prices, how the market price escalates and on because we fix the price on a quarterly basis. So otherwise, the volume commissions, we got it for the whole year.

19:07 That is great to hear. Is great to hear. And one follow-up question on the free side capacity. In this 70% to 80%, right, sir, how much of that is from existing customers versus any new customer relationship that you guys have built? Yes, we are adding the new customers also. In fact, last this Q1, we have not added any new customers because it's a lean period. So obviously, we'll keep adding the new customers. You're talking about the existing capacities or the freezed coffee? On freezed capacity, sir. No, freezed capacities, we have the existing and as with the new customers also. Because I was wondering if it was new customers and they're coming in for their freeze dried capacity, that will be like even more beneficial because we'll have a lot more tailwind and hence, I was trying to kind of double click on that. Okay. And and, sir, kind of piggybacking on the previous participant's question.

20:11 Right? I mean, I I just wanna understand broadly, right, what is the right to win? Right? What is the competitive advantage? Right? As we scale our capacity to, say, 16,500 metric tons in the near term, Can you shed some light on what is our company's right to win in the business, right, against the large players globally? I don't want to name peers over there. Is it our customization, customer relationship, or pricing? If you can just expand on that, that will be really helpful for all of us. It is a combined, Mr. Ganesh, what happens, it all depends upon the geography and the quality and the blend of what customer taking and also the fact what they buy it. So it depends upon.

20:56 If you see, if it is in a glass jar and if we use more of Arabica, then it depends the price will be quite different and the quality is completely different. This all depends upon the customer centric, they are looking in their geography and the sales, the brand, what they are doing it, absolutely, it all depends upon on that, their sales prospect. But our right to win is like we are able to make it according to the specifications, right? And as you have heard, our peers also say that they can make it according to the specification that they want. So like what is like really niche in our is Lars.

21:42 You speak little louder, if you don't mind? Little louder? Yes, yes, sure, sure, sure. I mean, like, for example, if I take like, products customization, like, you know, what blending do we want? What specific ratios of blending do you want? Right? Even our peers can do that in in some sense, right, as you kind of alluded to. Is there any kind of differentiating factor with us that basically kind of giving us guarantee or good visibility into what capacities we have? No, the blending ratios and other things and all is not given by the customer. See, it is in our internal R and D and quality development department, they do that one. So it is not recommended by the customer. So we don't get any information from the customers on with regards to that. And whatever the recipe which we have, that we don't normally share to the any customers.

22:32 So we develop a blend and do that blend, particular blend is marked for the customer exclusively, and we don't sell it to any other customers. Yes, it's possible that the customer may go to these our competitor or peers and try to get the product, but that is really not workable. Why? Because the same blend, exact blend, they may not able to do that. So obviously, they don't go normally because I have a customer retention is almost 98%. So for the last so many years, they are with us. I never saw the customer going to somebody for the same blend. Okay. Perfect. I think that's probably the relationship that you have built over the many years with them. Thank you, sir. I have a few more, but I'll I'll come join back in the queue. Appreciate it. Okay. Okay. Yes. Thank you.

23:21 Thank you. A request to all the participants to finally limit their questions to only two per participant. Should you have a follow-up question, please rejoin the queue. The next question is from the line of Ishan Modi from AMC Assets. Please go ahead. Yes. So I joined a later bit call. Can you let me know what was the volume this quarter within? What was the EBITDA for this quarter? Ishan, can you speak little louder, please? Yes, yes. Am I audible now properly? Yes. Yes. So I was saying like I joined the call later, but can you let me know what was the volume this quarter and what was the EBITDA per kg? Yes, EBITDA per kg for the Q1 is 157.

24:15 And what was the volume, sir, this quarter? Eighteen fifty six metric tons. Sorry, what? Eighteen fifty six metric tons. All right, all right. And sir, just one request here. So like when we give the press release during our results, can we also mention the volume and EBITDA per case in the press release because it gives more visibility earlier than we declared that in a con call. Not yet. Okay, not yet. I will ask my finance department to when they give it and then they will include that also. We'll note it, Tisha. Thank you. Thank you. That will be very helpful. That's all from my side. Thank you. We'll take the next question from the line of Unkar Gugardhari from Shree Investments. Please go ahead.

25:06 Yes. Good morning, sir. My question is regarding at 100% capacity capacity utilization, what would be the revenue you can block in the fully commissioned capacity? And because of the maintenance last quarter, how much revenue you would have lost? That's the first question. Ankur. Now this question, you're talking about the for 100% capacity FY 'twenty seven, is it? Yes. In the newly commissioned capacity of 4,500 metric tons. Yes. Out of Yes. Okay, fine. Understood. So the total 11,000 metric tons out of that total capacity utilization. So we may end up around 10,500. This is what we are planning now. So considering the and today's price and today's realization and all, so you can calculate on the basis of the capacities, you will get the figure.

25:59 But it all depends, again, as I mentioned that we are fixing the prices on a quarterly basis. It again keep varying. Maybe, for example, if I say for some INR 1,000 crores or INR 500 crores or 800 crores, but again, if the coffee prices moves upward, then this price, the revenues will increase disproportionately. So it's very difficult to say the revenue. But I think if you can if you have a quarter one figure, so then you can calculate, then you will know that. Correct. Okay. And the second part of the question, how much you would have lost because of maintenance? Maintenance, you're saying? No, no. This is an annual maintenance for fifteen days, what we took it every year. So this is we already taken. There is no production loss. This is well taken because this plant runs 20 fourseven.

26:52 So around the clock, we run the plant. So in a year, we take a fifteen days to annual maintenance. So that we have taken into consideration in the production capacity. After taking that only, it will come to 11,000 tonnes. Okay. The second question is on with all the initiatives like shifting to premium products like freeze dried coffee and selling more in consumer packets, like can we expect the consolidated margins to be at, say, 22%, 23% by in next two years by FY 'twenty eight or FY 'twenty nine? Yes. We have in our business plan, we have already mentioned it to the free trade coffee realization will be better than the traded coffee. And the consolidation should be in the region of around it should be in the region of around 23%, 24%, if I'm not mistaken.

27:40 That's the one. And the second is that we may not able to go in a full with the consumer packs for the free trade coffee. We may go with the bulk and as well as consumer packs. So obviously, then the EBITDA level will be not really as high as what we are expecting, but it is much better than the spade and agglomeration. But we can consider around 23%, 24% consolidated EBITDA margin, right, in the next That's two what we have considered in our business plan. Okay. I'm done with the question. Just a small suggestion, like can you... Earlier, two quarters back, used to provide a presentation, but now you have stopped giving the presentation. Because in that, you used to mention the capacity utilization and all that. So can you please start uploading presentations once once again?

28:31 And can... Is it possible to do the conference call, like, immediately after the results are declared? That... Those are the two suggestions, sir. Okay. Perfect. Okay. This... Normally, every quarter, we give a presentation. So I think now presentation also in pipeline, I think we are going to upload it any moment. And the con call with regards to con call, sure, we'll give it in the next day only. I think this time, there was an some holiday that I was traveling something, so we could not able to make it. But otherwise, we'll give it in the day only. Well noted, your point. The next question is from the line of Ankush Agarwal from Surge Capital. Yes. Thank you for taking my question. So just firstly, the volume number that you mentioned, I missed that number.

29:27 Quantities you're talking about, volumes? Yes. The volume for the Q1. Q1 was the volume. Q1. Q1. Q1, $18.56 is the sales. 2,402 is the production. 2,024? 2,402. 2,402. Okay. And sir, generally, with LDC, for example, currently, our EBITDA per Kc is roughly around 150. With MDC, what is the differential that one can expect between straight line and LTC in terms of EBITDA per kg? No. No. Sorry. Come again. This... What you are saying? Is it SGC and the POFE, you're saying? The percent amount? No.

30:16 Currently, within Spreadide, we are doing around 150 rupees EBITDA per kg. Excuse me. Mr. Agrawal, can you use your handset, please? There is some disturbance which is coming along with your voice. Okay. You're saying that Is it better now? Yes. No. Better. No. Better. You're saying Yeah. What I'm saying is currently with our entire capacity being sprayed, right, we are doing about $1.50 rupees per kg of EBITDA. So with NDC, what is the differential? Like, say, is is NDC 200 rupees per kg kind of EBITDA product or $2.22 rupees, if you can provide some relative guidance on that? As per the current price levels, because now I'm not doing any FTC, But as per the current market prices and if I take that into consideration, it is around 28% to 32% difference is there between SGC and FTC.

31:11 20% to 30%, yes. 32%, yes. Okay. And lastly, our packaging capacity, which was 5,000 metric tons, we were looking to increase that. So have we increased that? Yes. Now we are doing 5,000 metric tons of packing for the spray and agglomeration. For freeze dried coffee, freeze dried coffee, we are targeting maybe around 70% in bulk and the 30 in packaging, glass jar packaging. Right. No. Actually, last quarter, you said that the capacity for packaging has increased to 5,000 tons and that you're looking to add one more line. So have we added that line or that will come later? No, that we added the line. We added the line. Now Q1, we did around a 40 five-fifty five ratio, 45% bulk and 55% consumer tax.

31:59 That was all. Thank you. We'll take the next question from the line of Praneeth Chatterjee from Berman Capital Management. Please go ahead. Hi, thank you. Am I audible and clear? Yes, yes. Yes. Jataji audible. Please go ahead. Great. Sir, so I did some work on I was doing some work on vintage and the coffee industry in general. And my question is specifically on the demand visibility. I know you've answered this question already. So let me just tell you quickly the two observations I had. Firstly, so from what I understand, in spray dried, at least the largest exporter in India says that the spray dried, the customer only gives visibility for three months, whereas in freeze dried, the visibility is probably more than a year.

32:56 And secondly, if I were to think about the annual volume growth guidance given by you and the largest exporter, the incremental volumes they plan to add in FY 'twenty seven versus what you plan to add, the number for you is half of their number, which is... Which basically what I mean is your growth... The growth that you are planning for is not immaterial anymore. So it's a material number versus the largest player also. So if I combine these things, sir, where is the demand coming from? Because it's not that other players don't have capacity. They also have capacity. So if you can give some more color on which geography is your stronghold, if there is specific type of clients, you know, who are giving you longer than three months visibility, you know, because if I were to think about diversity of blends, then definitely you will keep improving, but it cannot be at the level of the largest player. If I think about economies of scale or the ability to offer a low price, that also fundamentally will improve over time as you scale. It can't be at the level of the largest player. So I'm just utterly confused as to where you're seeing such strong demand and with other players in India with capacity available are not able to capitalize.

34:24 I think Mr. Javagar, our sales director, will talk to you. He will explain more in detail. Am I audible? Yes. Yes, sir. Yes. See, with regard to what others are doing, we cannot comment. But we have a strategy for our growth and we are focused on that. We have a geographical mix which we are planning and going ahead on that. And we are also scaling up on the existing geographies, and we are entering new geographies. So that is our strategy on expanding our volume base. Okay.

35:09 But okay. So is it possible for you to be slightly more specific as to which geography is stronger than others for you? Because, sir, what you just said is applicable for any coffee producer, right? So is it possible it for both of them? Is applicable for everybody, but I'm talking specific to ours, and we have been doing it for the last several years. So we have been scaling up. If you look at our initial geographical mix, it was concentrated on two, three geographical areas. But now we have broad based it. So we are more or less, say, for example, we are about 30% in West Africa, Russia, CIS, we are about 22%, Southeast Asia, about 20% similarly. So we have more or less broad based it. Now we are looking at scaling up that volume in these geographies.

36:01 So we have also entered new geographies in the last couple of years. Got it, sir. So my second and last question is on effectively who are the type of customers you're selling to. Are you, like, selling directly to, you know, coffee brands or are you selling to aggregator or distributor? If you can just explain if 100 rupees is your total exports, how much rupees is directly to the brand, how much is to distributor or someone else, and what is the nature of contracts you have with these people? Because, sir, if someone else is saying it's three months only and you are saying you have visibility for the entire year, there is a gap somewhere, right?

36:47 So if you can just explain me these two points. See, branded we are selling to direct brands to 90% of the customers who are direct brand owners, about 10% would go to traders and up people, okay? Yes. So that's the mix. And what is the by contract, how much how many months of visibility do you get in the volumes? As our MD has already told you, we have the visibility on the volumes for customers and but we will be reviewing the prices every quarter. Thank you. The next question is from the line of Deepali Bansal from Ventura Enterprises.

37:34 Please go ahead. Hello, everyone. My first question is, how much of the CapEx of INR550 crores in FTC has already been spent as this figure was roughly INR150 crores in quarter four? Out of INR $5.50 crores, we almost spent INR 114 crores during lifting. Rest is that INR $5.50 crores, INR 114 crores we have paid till now. But we quoted INR 150 crores in quarter four on call. What is the current did we spend INR 114 crores in quarter one? Total is the one total till date is at INR150 crores, correct. You are correct.

38:26 Did we spend anything in quarter one for the FBC project? Quarter one is crores we spent. Okay. What was the product mix between import and export for quarter one? Product mix is that 20% is the 1080% is the domestic beans. Okay. Are we still in line with the INR400 crore debt for the year FY 2028? Or are there any deviations? No deviation, same thing. Okay. The input cost for aluminum was high last quarter. Is it still the same or is it affecting us in any other way?

39:16 Almost same inductor. Okay. My last question is regarding the geographical data. Could you give us the geographical bifurcation? Yes, geographical bifurcation as our sales director will use. Yes. So continuing on my previous explanation, we are about 30% we are getting from West Africa, about 22% from Russia and CIS, 20% from Southeast Asia and Europe about 10%, Central America about 15% and India about 5%. All right, sir. Thank you so much. That's it from my end. Thank you. We'll take the next question from the line of Paras Chedra from Purple One Vertex Ventures LLP.

40:07 Please go ahead. Yes. Thank you, sir, for this opportunity and congratulations on a strong set of results. Sir, my question first thing is, I mean, you guided, but basically, this is the current or Q1 average coffee prices and assuming that INR 10,500 volumes for FY 2027, right, sir, can we sort of ballpark the revenue number between INR $8.50 crores to INR 900 crores, would that be fair? Mean, of course, I know the copper prices will be volatile and keep fluctuating. But I'm just at the current level for Q1 basis, can we expect that kind of a revenue number ballpark for FY 'twenty seven? About INR $8.50 crores to INR 900 crores?

40:56 Yes, yes. If you take that Q1 average realization, then it should be the same. What you're saying is the same. It should be in the region of INR $8.50 crores to INR 900 crores. Understood, sir. And the margins in any case you said, okay. Sir, for FY 2028, now assuming end of June, the FDC capacity is now ready for commissioning. What capacity utilization do you expect in the second half of FY 'twenty eight, I mean, beginning Q2? We are targeting to around 60%, 65% of the installed capacity. Of the 505,500 that will come in? Yes. Yes. But as I mentioned that we are going to in a second quarter only of the FY 'twenty eight, we are going to start the production. So obviously, you can consider for almost eight nine months, out of which you will take a 60% to 65% capacity utilization, not on 5,500.

42:03 Sorry, mister Chida. Your voice broke, sir. Yeah. No. What I was saying is your exit of 79 capacity utilization will be about 100%? You're talking about the current year or next year? I was talking about FY 'twenty eight. We will see the heavy capacity utilization picking up from July 2025. So now you said 65% or whatever two is almost different to utilize. But at the exit, FY '29, should we have 90% audio? Understood. Understood. I just explained you, 5,500 megatons is the capacity, out of which I said that we are going to use it for only eight months or nine months of the production we may get it. So in that case, it is 3,600, 3,700 metric tons on that 0.65% capacity. It should be in the region of around 2,300 to 2,400 metric tons FDC will add in FY 'twenty eight.

43:12 About 2,800 odd? 400. 400, okay. Out of the 5,500 for the nine months that we Yes. Right. And, sir, just last query mind, and that you broadly guided for a positive operating cash flow in FY twenty seven as well and further improvement in working capital. So now after q one, are you still confident of delivering positive annual cash flow from operations? And what working capital days do you expect after 2020? Yes. Working capital days, think our CFO will be on. The working capital days is at... The working capital days is in between that one hundred twenty days, one hundred twenty, one hundred thirty days.

44:01 So we will maintain the same levels or we will little lesser level with that one hundred twenty five days kind of thing. And next question? Operating cash flow will be positive for FY 2027? Yes, operating cash flow is overall for FY 2027, it is the positive only. It's likely to be positive. Okay. Yes. First off, first first off, overall FY 'twenty seven is positive only, correct. Understood, sir. Fine. Thank you so much, Thank you. The next question is from the line of Utkarsh Channana from SNC Private Wealth. Please go ahead. Hello. Am I audible? Yes, you are.

44:48 Thank you. So I have a couple of questions on the supply side of our business. I wanted to understand which is the route our company is most most dependent on for exporting the products? No, I think your question is not clear. Can you again repeat? Sir, I wanted to understand sir, we export our products. So I just wanted to understand if we are dependent on a particular route for more volume of our export business? I understand your question. You are asking whether we are dependent on a particular route for our exports.

45:35 As I mentioned already, yes, we are our strategy has been in the last few years to broad base our sales. So we know where our growths are going to come from. So we are focusing on that. Thank you. Thank you, sir. The next question is from the line of Aditya Singh from Multibagger Stocks. Please go ahead. Good morning. I had just one question regarding the wholly owned subsidiary, original, the divestiture. Could you please share some more details about that? Again, your your voice... Your split, actually.

46:23 Sir, your voice is not clear, actually. Mister Singh, may I request you to kindly use your handset? Okay. I'll use handset. Is it clear now? Yes. Yes. Now it's okay. Okay. I was just asking more about the subsidiary, the Delecto. Can you shed a little more light on that? You're Chikuri? Yes. Delectro, we are doing the Chikari things. We have the capacity of 2,000 metric tons per annum. And it is And what is the revenue? Revenue is at per annum basis, it's $42.45 crores.

47:15 Is it profitable or not? It's profitable. Okay. Thank you. That was all from my side. Okay. Thank you. Thank you. The next question is from the line of Preet Shah from Bluestar Capital. Please go ahead. Am I audible, sir? Yes. Yes. Yes. So my question is, what was the utilization in Q1 of the full capacity? Q1, we have 100% and only fifteen days we took annual maintenance. Otherwise, we are utilizing to 100%. Okay. So the 4,500 metric ton, which we have added, it is also at 100% utilization. Is that understanding correct?

48:10 Yes. We are utilizing 100%, which is 2,402 metric tons produced. Okay. And sir, from Q2, we can expect good growth in numbers as twenty, twenty five days was what you can say maintenance period? And also, coffee prices are also going up. Volumes will grow definitely, further quarters. Yes. Got it. Thank you, sir. The next question is from the line of Ankur Gulati from Genuity Capital.

48:58 Thanks. Are you audible, sir? You are, but I will request you to kindly use your handset, please. Better now. Yes, sir. Please proceed. Okay. So quick question on freeze dried. There was some discussion in last call that eventually you will go from 5,500 MT to 11,000 MT in financial year 2019. So that plan is on, right? There's no change in that longer term view. 11,000 metric tons, the current capacity is going to adding 5,500, so it will be 16,500 metric tons. Yes, I understand. Another additional line, which is me likely to come soon after the completion in the first line of the 5,500 meters.

49:50 Perfect. And can you give us the volume sold again for this quarter, sir? This quarter, this quarter, 56 metric tons we sold. And the realized from INR 160 crores, INR 160.9 crores. Okay. Fine. Thanks. Thank you. Members of the management, I would request you kindly come closer to the device and speak, please. Your audio is low, sir. Thank you so much. We'll take the next question from the line of Mayank Agarwal from Scientific Investing. Please go ahead. Yeah. Hi. Thank you for the opportunity. I have few questions. The first question is regarding the CFO conversion.

50:36 Like as we go ahead with the FTC project commercialization and the working capital improvement, what should be the sustainable CFO to EBITDA conversion over the medium term? One second, my CFO will give an answer. Our EBITDA levels will be that sustainable will be 150 to 160 range with the current product mix. I'm talking about the conversion rate, like how much we will be able to convert to cash flow? We are converting 100%. And it should be sustainable going ahead, correct? Yes, yes, yes. Okay. And the second question is regarding the debt.

51:21 So like after the phase one of FDC project is commercialized, like earlier management had guided like debt should peak around INR 400 crores to INR $4.50 crores. And like since the past expansions were funded through a combination of equity valuation debt, so will the incremental operating cash flow will be used towards the debt reduction or it will be regarding the Phase II funding for the FDC project? Yes, Phase FDC project we'll be using whatever the incremental cash flow will be coming for FY 'twenty eight. So like going ahead, debt should not increase over 400 crores, like INR $4.50 crores once the Phase one is commercialized? Correct. We are at the same range, $4.50 crores maximum, that is with the maximum peak debt we are expecting.

52:09 Okay. And like just one follow-up question on this, like on the Phase II project, it seems like it will be the incremental cash flow will be used, so it won't be requiring any credit addition, which were the part of the past expansion Mani:] plan by the At this point of time, I cannot comment, but maximum we will not go further than other equity dilution. But this is a now it's not material question. We'll see in that FY 'twenty eight incremental cash flow basis, then we'll take a call. Thank you But as so of the plan, as of the plan not required. Okay. Okay. Thank you so much. That's it from my side. Thank you. The next question is from the line of Utkash next question is from the line of Utkash Sumaya from Eco Quantum Solutions. Please go ahead.

53:04 Thank you for the opportunity. So if I take your EBITDA of 32 crores and divide it by the sales volume of one eight five six, I get a EBITDA per kilo of 172. And I think you mentioned you did 157. So can you please explain this gap? Yes. In this coffee, chicory volumes also is there. It will reduce some INR 11 crores of that chicory sales, then it will be the same range. So if I remove INR 11 crores from this INR 32 crores? No, no, 11 crores from the sales. So otherwise, we can calculate like this. So out of INR 32 crores, you can reduce.

53:56 So INR161 crores minus INR11 crores, you can calculate it, then that will come. No, but how much of the INR 32 crores EBITDA comes from Shivkori? Yes, that will be around INR $2.2.1 crores. So let's say 2 crores, so out of INR 30 crores to INR 30 crores is right. So INR 30 crores is still like at INR 161 Correct. No, no, no. Exactly if you want the Chikori pink is at 2 0.2, if you minus it, then it will be coming the same number. So now for the whole year, FY 'twenty seven, how much Chikori sales and EBITDA should I assume? It is the 40 to 45 crores. The same EBITDA levels almost. And around 8 to 10 crore EBITDA. Right? And so the remaining sales volume, can I assume you'll do 9,000 out of the total 11,000 for the whole year?

54:50 Whole year, we are expecting that 95% of the capacity utilization. 95% would miss off the capacity. So it's fair to you will easily do Yes, 10,005 yes, correct. And INR 157 to INR 160 rupees EBITDA per kilo? Correct. INR $10,501,160. And sir, you said that next year you will do around 2,500 tonnes of the new FDC capacity, correct? 2,400 kind of thing. Yes. So basically, if I combine the two, it will be around 13,000 in FY 'twenty eight, your volume.

55:41 Am I right? Correct. And what's... And the EBITDA per kilo will be 20% higher for FDC? Yeah. 20% to 30%. Correct. So what will be the consolidated EBITDA per kilo for 05/28, given you'll do 2,400, 2,500 tons of volume? So we'll we'll be sharing that later stage. But if mathematically if I do that the 2,500 that takes 160 into 1.2, which is 192 EBITDA per ton and that 10,500 is 160. I'll get the number, right? Correct. Okay. Thank you, and best of luck. And one was the last question. I'm sorry to interrupt, sir. There are others who are waiting for their terms. Okay. No worries. No worries. Thank you. Thank you so much, ma'am. We'll take the next question from the line of Piyush Chen, an individual investor. Please go ahead.

56:40 Yes. Am I audible? Yes, yes. I have two questions. One thing, with this with this capacity incremental started, it was 4,500 odd. What could be the ballpark number revenue we can achieve in the 2027? How much it can add in the revenue in incremental? And second, these entities which we are merging, like a Delecto and Vintage Coffee, what is their capacity and revenue potential or revenue they are generating? Can we say Vintage Coffee business right now what we are doing and whatever the entities we are... Which we are merging, which will add to the incremental top line of the business when this overall process of NCLT and everything done through? And what is the type of revenue and margin they are doing it? So just want to understand once these entities merged at a consolidated basis, what will be the jump in our revenue from these entities which we are bringing in.

57:40 Am I clear with my questions? Piyush, I'll explain to you. I understand your question. I'll brief you. This Delekto Foods Private Limited is in a 100% subsidiary of Vintage Coffee And Beverages Limited. So whatever the consolidated figures to which we are taking into consideration now, we are already declaring that will remain more or less same because there is no additional revenue adding to the VCPLP and L, okay? Because this is 100% subsidiary. And with regard to the Director of Food Private Limited, this company is purely into manufacturing chikeri product, chikeri and chikeri mixed products. And it is already utilizing an optimum capacity levels. And the revenues are now around INR 40 between INR 42 crores to 46 crores in a year on year. And there won't be much growth on that unless we go for further expansion on this. At this point of time, we don't have any plans to expand the Shikari production capacity, but we'll continue to have this revenues of, say, 42 crores to INR 45 crores.

58:44 And this company is making a profit continuously for the last several years. And it will continue to make the profit because there is a good demand for the Chicari, and that is in a domestic market as well as the international market. So we continue to operate this company in these levels. In the event of any further demand coming up, then we will keep plans to expand the capacity, maybe after one or two years' time. Okay. And on first question? Yes. Go ahead. Yes, yes. First question I asked, with this incremental capacity coming in current year, what could be the revenue potential we can have? Because, see, last three quarters before this, we were doing INR 150 crores to INR 160 crores, and we were optimum utilized only. So now this new capacity coming in, what could be the additional revenue? And just second follow-up on this DELECTO, is the margin profile is similar to what Vintage is doing right now, 18% to 19%?

59:46 Or with this incremental revenue adding up, the margin blend will decrease? No. First question, I'll give an answer to you. INR 4,500 in metatons, which we are adding added now for this INR 6,500. So with that, the additional revenue, which we are going to get into this main is around INR $3.60 crores to INR $3.80 crores, which coming approximately around INR $8.90 crores to INR $90.05 crores total. So that is the revenues which we are anticipating. If we go with the full capacity, maybe around 95% of utilization. Current year, you're talking about current year FY 'twenty seven? Yes, yes. Because the electrofusion chikari plant, a chikari plant profitability more or less same as in a coffee, maybe slightly better than the coffee. But since the chicory demand, chicory crop is not there this year. There will be some incremental profitability will be there in chicory because the Chicory acute shortage and then the prices are short of like coffee earlier three years back. So obviously, there will be a higher realization in Chicory also this year.

1:00:57 Okay. Just to understand, I didn't hear properly what you said. You said this INR 4,500 capacity coming in this year, which can add around INR $3.50 crores to INR $3.60 crores of additional revenue. Am I saying correct? Am I understood correct? Yes, you are right. So ballpark, are INR saying 500 crores to INR 600 crores, which existing we are doing and INR 300 crores to INR $3.50 crores we can add in this current year, correct? My understanding is right? Yes, you are right. INR 80 crores INR $3.80 crores, we'll add on the existing turnover. Yes, you are right. Okay. Thank you for the patient answer, sir. Thank you and all the best for the future. Welcome, welcome, Pesh. Thank you. Ladies and gentlemen, we'll be taking two last questions for today. The next question is from the line of Kumar Saurabh from Scientific Investing.

1:01:47 Please go ahead. Hello, sir. Hope I'm audible. Yes. Little louder, please. Yes. So congratulations on good set of numbers, sir. My question is, sir, we have around one hundred thirty days of working capital days, which means on every INR 100 of sales, maybe we will need INR 35 crore of working capital, which should ideally give us good operating cash flow. But so far, we have not done that. The only reason I can think of is because we are in a very good growth phase, and hence, we need a lot of inventory for the growth. Is that the reason? Yes. That is the one reason and we keep expanding the opportunities and adding Okay.

1:02:36 So sir, my question is, let us yes sir, please go ahead sir. Yes, yes. Actually your point is correct actually. So now the future years definitely that benefit will be coming. So working capital cycle will be at the same level of one hundred twenty days, one hundred twenty to one hundred twenty five days. Okay, sir. So my question is, sir, let us assume if we didn't need this growth inventory, let us say we were growing at 234%, then the kind of EBITDA number which we have done, how much of operating cash flow we would have generated on that?

1:03:23 Whatever the profit plus the depreciation that will be generated. Profit in the last year is that 71 plus eight, almost INR79 crores is that we can generate if your growth is not there. Okay. Got it. Got it. And sir, we are in the B2B space and our working capital days is around one hundred thirty day. We have another listed company. Of course, it is of bigger size and they're listed for a long time, but they work around forty days of working capital days and also they have a B2C business. But my question is, as we grow in terms of revenue, first, why both of us being in b to b, why our working capital days is almost three times of the bigger player? But do you see a scope of improvement going forward, and what could reduce the working capital days if you can, you know, just give some kind of comparison of industry dynamics between these two companies?

1:04:11 So normally, working capital cycle in the entire industry is at two hundred to one hundred twenty days, one hundred thirty days. So this entire coffee instant coffee industry, we are also same line with that same thing. We are also one hundred twenty to one hundred twenty five days. Sir. Okay, sir. That's all I had. Wish you all the best, sir. Thank you. The next question is from the line of Nirvana Laha from Badrinath Holdings. Please go ahead. Hi. Am I audible? Yes. Yes. Great. So two quick questions, sir. The first one, you said Q1, you produced about 2,400 metric tons, and you have sold about 1,800 metric tons. So which means you've built inventory, and you have a quarterly price reset.

1:04:56 So I just want to understand, maybe coffee prices won't go down right now because of the cycle. But if coffee prices went down, you would have to book inventory losses, right, with this kind of higher production compared to sales? Yes. It is like this. And this first quarter normally because we can't go within a under capacity utilization since we have a capacity, we need to run the plant, and it is 20 fourseven running plant. So we have the commitment from the customer for the whole year. As I said, the volume commitments we take for the whole year. Obviously, the volumes what we have produced it, we have some sort of understanding with the customers that they're going to pick up this volume. So in a quarter two, so obviously, this whatever the quantities which we produce that will move in a quarter to Q2.

1:05:44 Understood, sir. Just to clarify, I understand the volume commitment bit and therefore you have to produce, but if coffee prices move against you, you have to book inventory losses, right? That is mechanical accounting process. No. As I mentioned to you that we always stock some around forty to forty five days coffee beans in our factory on our side. So when we replace this material with the new orders. So obviously, we take that there won't be any price advantage or price gain or loss on this. So we it is like a back to back basis. Okay. Okay. Understood, sir. The second one, sir, many participants have asked you about freeze dried coffee. On same lines, I want to understand little in-depth. If you can just patiently answer this, sir, because a lot of participants want to answer... Understand this.

1:06:32 Sir, in freeze dried, can you help us understand who are the largest suppliers globally? Like, which countries are the largest supplier? And your 5,500 metric ton capacity, right, what percentage market share is that of the global demand in in freeze dried coffee? That is one. Second, sir, we have heard that even your larger listed beer, right, in India, they have not been able to crack The USA freeze dried market because US customers really prefer the best blends and all that. So given this, if you can detail out whether US is a target geography or which geography specifically you're targeting. You haven't mentioned the countries. If you can mention that, it will be good. Also, whether under mister Jawahar, you've hired specialist salespeople who will... In in different geographies, who will help you sell this premium product.

1:07:24 Because if I understand correctly, freeze dried coffee is a very developed market product versus pre dried coffee, which goes to all all kinds of countries. So if you can tell... And you also mentioned that you have signed LOIs. Right? So on what basis were the LOIs signed? Because they have not tasted your product or have, you know, seen your product. So if you can help us understand all these aspects in a little more depth, sir, because everybody wants to know about the freeze dried coffee market and what your plan there is. Okay. The... As far as far the information is available, so I can say that it is around 250,000 metric tons of freezed coffee market, out of which our 5,500 metric tons is around 2.2%. It's a very negligible percentage, if you see.

1:08:09 And with regards to the market geographies, which we are now targeting for the freezed coffee and where we've got some sort of commitment by we have LOI and all is I can at this point, can generalize the way I can explain to you, it has come from Russia, Europe, I don't know, but I also got that from U. S. And as well as in Southeast Asia. So these are the commitments which we got it for the volume. And with regards to the quality and the price, that these are the commitments which we got it. LOI, we entered into them. The reason is that they want they don't want actually to resell it to somebody else and they don't get the material. So we have signed an agreement that in the letter that we will supply to them the freezed coffee as soon as we start subject to developing the blend as per their requirement and the prices we agree both. So these are the subject to quality and subject to price.

1:09:07 Understood, sir. And these are the same customers that you're supplying spray dried coffee to the brands coffee brands that you're supplying? Are they the same set of customers? Two are the new customers. Okay. And how many old customers, sir? Five customers. Five. Okay, sir. And one more question I had asked is, can you tell us about the internal sales force strengthening initiatives or business development initiatives that you've taken, if any, freeze dried coffee specifically? No. Freezed coffee, we have not initiated any sort of the new sales team. The existing team under the the sales head, mister Jabhakar, is there... He has three managers and one general manager and they are only handling it. And we are quite comfort on these people are capable of handling the things for freezed coffee also.

1:10:00 Okay, sir. Understood, sir. And one request, sir, some investors would like to visit your plant and interact with you in person if that's possible. So kindly facilitate something like that. We would all like to visit. Sure. Most welcome. We always we always invite the people to actually to see and to discuss in person also. Welcome. No problem. You can send a communication to us by email. So we'll give you the... Your time and all. So accordingly, we allocate our officer who will be taking to factory and show you. Thank you, sir. Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference over to the management for closing comments. Thank you, and over to you, sir. Thank you so much. Thank you for joining, and we really appreciate your concern. And we are very glad, and we are always available to give an answer 20 Any doubts, any clarification, please do contact us.

1:10:57 Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of Nuva Ama Wealth, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.