Vintage Coffee and Beverages (NSE:VINCOFE) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Vintage Coffee And Beverages Q2 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions After the presentation concludes, should you need assistance during the conference call, please signal operator by pressing 0 or a registered telephone. Thank you. Over to you, Mr. Vintage. Thank you, and good evening, everyone. On behalf of Nuva Wealth, I welcome you all to today's call. I thank the management of Coffee And Beverages Limited for the opportunity to hold their q two FY twenty seven earnings call. From the management team, we have with us today mister Balakrishnan Jati, the chairman and MD, mister Hyatteja Jati, executive director, mister Kanti Kumar Yarkali, the CFO, and mister Jabahar Khanjivaram, the head of sales and marketing.

1:01 I will now hand over the call to Mr. Balakrishna Harti to take us through the quarter. Thank you and over to you sir. Thank you. Good evening everyone. Welcome to Q2 FY 'twenty seven earnings conference call of Vintage Coffee And Beverages Limited. With me is Aitaja, EDA Jawahar Head and Sales and Marketing, Gandhi Kumar, CFO, here. First of all, I would like to thank all our investors, analysts and stakeholders for joining us today for their continued trust and support. It gives me a great pleasure to express that another strong quarter with the company continued delivery, continuing to deliver healthy revenue growth supported by increasing operating scale and sustained business momentum.

1:48 Just to begin with a brief overview of our financial performance for the quarter two and the first half of FY twenty seven. Financial performance in Q2 FY twenty seven was another very strong quarter for the company with the revenue from operations increasing by 64.4% year on year and 38.5% sequentially to INR222.97 crores compared to INR135.61 crores in Q2 FY 'twenty six. Our gross margin stood at 27.6%, reflecting an improvement of two ninety three basis points over the corresponding quarter last year, although it moderated by 133 basis points on a sequential basis.

2:38 EBITDA increased by 88.8% year on year and 33.5% quarter on quarter to INR 42.16 crores compared to INR 22.33 crores in Q2 FY 'twenty six. EBITDA margins improved by two forty four basis points year on year to 18.9%, demonstrating improving operating profitability. Profit after tax grew by 57.3 year on year and 34.9% sequentially to INR28.06 crores compared to INR 17.83 crores in the corresponding quarter last year. That margin stood at 12.6%.

3:25 The effective tax rate for the quarter was 26.1%. H1 FY 'twenty seven performance. Looking at the first half of FY 'twenty seven, the company has maintained its strong growth trajectory. Revenue from operations increased by 61.9% year on year to INR383.97 crores. Gross margin improved by two sixty six basis points to 28.1, while EBITDA grew by 82.7% to INR 73.74 crores. EBITDA margin expanded by two nineteen basis points to 19.2%. Profit after tax increased by 52.3% to INR 48.85 crores compared to INR 32.07 crores in H1 FY 'twenty six. Tax margins stood at 12.7%.

4:14 The effective tax rate for the first half was 25.8% compared to 9.3% in the corresponding period last year. Overall, the first half performance shows good growth, which indicates the company's business moving with sustainability and improved gross profitability and strong EBITDA expansion. Business and strategic development. On the operational center, we continue to focus on optimizing our expanded manufacturing facility as well as by improving operational efficiency. As communicated earlier, the company has enhanced its installed production capacity to 11,000 metatons per annum following the commissioning of an additional 4,500 metatons of capacity during end of March twenty twenty six.

5:00 This expanded capacity provides us with a strong manufacturing base to factor to increasing customer requirements and support our future growth ambitions. With respect to our proposed free stream coffee expansion, so we are working hard to ensure to complete the 5,500 mg tons of MTC project well within the next year, and all required payments are being made for the major and critical equipment coming from Europe and other countries. Also, I would like to remind you all that once the empty seat collection is commenced, the total production capacity of the plant increases to 60,500 metric tons per annum from 11,000 metric tons and is significantly strengthening our position in the instant coffee segment.

5:47 We also continue to focus operational synergies following the amalgamation of our wholly owned subsidiaries, Vintage Coffee and Electric Food Service Limited with the parent company. The consolidation is likely to support better resources, utilization, strengthening operations and create better efficiencies across the business. The company commenced generating positive operating cash growth in FY 'twenty six and continued this positive momentum, generating INR 51.16 crores during H1 FY 'twenty seven, supported by enhanced capacity, sustained profit growth and improved working capital management. I'm also pleased to inform you that the promoter share of INR 1.3 crores with Punjab National Bank as security against the long term borrowings avail to processing a free factory were 50% of the total shares successfully released during Q2.

6:46 This is a significant positive development and reflected the company's improved financial position and the promoter's commitment to strengthening shareholder confidence. I also would like to give an outlook of the company and for the coffee industry. Going forward, our focus remains on leveraging the expanded manufacturing capacity, strengthening our customer relationship, improving operational efficiencies and executing our planned capacity expansion initiatives. We remain committed to disciplined capital allocation to maintaining healthy profitability and creating sustainable long term value for our shareholders. Before concluding, I would like to highlight that the comparative financial figures for the corresponding previous year period are not strictly like for like as the has been appointed from appointed date of 10/01/2025, whereas the corresponding prior year figures have not been restated.

7:44 Thank you once again for joining us today and for your continued confidence in Vintage Coffee And Beverages Limited. With that, I would like to open the floor for questions and answers. Thank you. Thank you. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Gaurav Shukla from FinVestors. Go ahead. Am I audible, sir?

8:30 Yes, please. Sir, congratulations for very good numbers, and thank you for giving me opportunity to ask question. Sir, my question... First question is during 02/2527 revenue increased significantly. How much of this growth came from volume growth versus higher realization per kilogram? Okay. Mainly the growth is for the higher growth realization, it is not on the volume growth. Volume growth? Yes. Okay. And sir, second question is what is the actual utilization of 11,000 metric ton spread rise and agglomerated coffee capacity?

9:16 Are you maintaining the target of 95% utilization? We are focused to utilize 100 capacity of the 11,000 metric tons, which we commenced on March 2026 and that continue to producing for a full capacity utilization. With regards to the spade and agglomeration, the percentage is almost, I can say, around 55 to 45 ratios. 55 to 45 ratio. Okay, sir. Any this 5,500 metric ton field dry plant progressing as per producer, How much CapEx has been incurred and how much remains to be spent? Yes. I just asked to Mike, we are able to give and Mr. Sandeep Kumar to give more detail about it.

10:06 CapEx is now we have incurred INR220 crores. Rest is in the pipeline. In pipeline. Thank you, sir. A1 question more, sir. You previously indicated that letters of intent has been received for a substantial portion of freeze dried capacity. How much of this capacity is now covered by firm purchase orders or long term contracts? We have received almost 100% of that capacity from that customer. Thank you, sir. All the best for future. Congratulations again, sir.

10:52 Thank you. Thank you. Next question comes from the line of Jatin Damania from Swan Investments. Please go ahead. Good evening, sir. Am I audible? Yes, please. Go ahead. So first of all, congressional is a good set of numbers with a new capacity coming in and operating at a rated capacity. So sir, if I want to look at probably FY '28, '29, because we are already operated at rated capacity and benefit will growing in '27. But in terms only go to '28, where our FDC will come probably in mid financial year or at the end of the next financial year. How shall one look at the growth prospect for the Vintage Coffee for FY 'twenty eight?

11:47 Okay. Can I go ahead? Yes, sir. See FY 'twenty eight, 'twenty nine, because we are assuming to start the free state coffee production during FY 'twenty seven. So 'twenty six, sorry, I mean 'twenty seven, 'twenty eight basically. So 'twenty eight, 'twenty nine, you will get a full capacity utilization of 5,500 metric tons of pre state coffee in addition to 11,000 metric tons of spray and aglow. So which means effectively, we'll have a 16,500 metric tons of the total capacity that will be under utilization. And for this, as I mentioned that it will the growth rate will be almost, I can say that it will be almost to I can say around 80%, 85% of the growth will be there in FY '8, 'twenty nine. Okay, I agree on that part because if you look this 5,500 tonnes of freeze dried coffee, is it expected to come on second of FY 'twenty eight or it will come in the last quarter of FY 'twenty eight?

12:56 Second half of FY 'twenty eight. And we need to spend another INR250 crores, right, because INR500 crores is the total estimated CapEx for this 5,500 tonnes? Yes, INR550 crores is the total CapEx also which are already spent to INR220 crores, as these revenue is going up. So what will be the total CapEx remaining that we'll be spending in second half and how much will be spending in FY 'twenty eight? During this quarter, we'll be spending maybe INR 100 crores. Balance will be that INR28 crores. INR200 crores. So that's what I want to say. Now since the cash capacity is coming in second half, probably we will get only a benefit of the one quarter in FY 'twenty eight. So ideally, one should assume that FY '28 when you compare with FY '27 more or less will be a largely a flat year when compared to the profitability, and the growth will come in FY '29 with FVC coming in.

13:54 FY 'twenty eight, 50% capacity will be utilizing for the second half especially, second half year. And FY 'twenty nine, full capacity will be utilizing. And sir, on this only, $5.50 crores of the CapEx that we are spending in f... FTC, what sort of a turnover one should assume in the targeted ROC on this business only on FTC? Is there for that, whatever the existing clients is there. And the the turnover would be the reason for 670 to 710 crores. Okay. $6,700 odd crores. One point And four ROC will be the similar to what our current business, right?

14:42 Yes. And just if you want to look from some longer perspective, probably three to five years down the line, probably beyond FY thirty or FY thirty onwards. How someone look Vintage as it is and probably will our focus more will be on b two b or once our RBC comes in, we'll be moving to a VINCOFEE, which is a retail chain, which also want to look at the entire business dynamics? Yes. That's a good question. See, going forward, down the line after three years, we have more focus not only on B2B, also the focus on B2C. Taking into consideration because right now, we have only two products with us, freighted coffee and agglomerated coffee.

15:27 So once the freezed coffee is that, then definitely, we look into the B2C options because that's going to in a bigger way and also that is the way actually we are focusing, companies focusing. As of now, that's all from my side. Have no questions. I'll come back in the queue. Thank you. All the best. And wish you and your team a happy Diwali and a prosperous New Year. Thank you, J. P. And G. Thank you. Thank you. The next question comes from the line of Omkar Gugardhari from Sri Investments. Congrats on a good set of numbers. My question was regarding the land capacity after INR 15,500 million. How far we are from that front?

16:17 And how much CapEx would be needed for that? And when can we commence that facility? Vintage, you are talking about the land, is it? Correct. From INR 16,500 crores, you will be adding going up to INR 21,000 crores, right? Last time you mentioned. Yes. Additional line of INR 5,500 crores, yes. Correct, correct. So I'm talking about that, like when can we expect like commercialization of that? That could be in FY 'thirty? Yes. It will be FY 'thirty. Yes, you're right. It will be commenced in FY 'thirty, right? Yes, you're right.

17:02 FY 'thirty. And like from how much CapEx is needed for that? And how much time it would require like from right now to commencement to like take the land and do the construction and get the facility ready for production? Yes. What we did is actually we have taken the land. We have land from government of the food processing part for a 22 hectares land that will take care of the entire 11,000 metric tons of freeze dried coffee plant requirements. Out of it, what I most of the equipment we are sourcing now for an additional 5,500 metric tons, which means for the next step of the 5,500 metric tons, it will be like a brownfield project, too. We need to bring the freeze drying plant and install it. I don't think so it will take more than one year time. If everything is good to the building and all in place, so I don't think so it will take more than twelve months now.

18:04 Okay. So it will commence in FY 'twenty nine, 'thirty, right? Next to next year? That's right. That's right. You're right. Okay. So the construction would like start from now or like in FY 'twenty eight, it would start? Most of the construction we have to make it now itself. Okay. So in FY 'twenty eight, 'twenty nine, it can be ready, right? That's what you mean. And it can start production from 2930, right? No. I'm saying that the building civil work and all, most of the civil works will complete by FY 'twenty nine, okay? And by FY 'thirteen, then we'll have the line in place, second line in place.

18:49 Okay. So for that, how much CapEx is needed? You have spent you will be spending around INR 500 crores, INR $5.50 crores for the first half first INR 5,500 crores. I'm asking how much would be needed for the next INR 5,500 crores? It should be in the region of around 350 crores. Okay. 350 crores. Yes. Your brownfield project, the cost will be lesser, right, for production? Yes. You're right. You're right. Okay. And, like, do you have any kind of visibility for the... Obviously, you will have the visibility. That's why you are targeting to add additional capacity. But, like, I mean, how confident are you, start like utilizing it in like full speed or like 100% capacity? That's what I'm asking.

19:36 Yes. Wangkandi, seeing 5,500 meters, we have clarity, and we already have seen some sort of commitment from the customers, especially the countries and the markets like Europe, U. S. And as well as some parts of Asia and Southeast Asia. But some markets, still, we are not happy. We have been receiving a lot of inquiries for this. Obviously, we have some sort of visibility for an additional 5,500 metric tons. This you are talking about for the capacity from 16,000 to correct, second line of the capacity, right? Yes. Yes, you're right. Correct. And for the first capacity, first half of the capacity, like orders ready for this? Or like you have the commitment from the buyer?

20:23 Yes. We have a commitment from the buyer. Yes, you're right. 5,500 customers, we already have a commitment from the customers. So this is like 100% you have received or like some part you have received? That's what I'm asking. No. We have received a commitment for 100% of the capacity. But it's up to us that whether we can supply to them 100% or not, but we already got the letter of intake from them for 100% of the planned capacity. Okay. The second question is on the margin front. Right now, I guess, are operating at around 19%. So with additional capacities of 5,500 to 11,000 and from 11,000 to sixteen and sixteen thousand to 21,000, like how big can margin go up? Because once the fixed costs will remain stable and then as your revenue increase, there should be good amount of growth in margins. So that's why I'm asked to how much it can go up eventually in the next two, three years, maybe till FY 'thirty?

21:25 Yes. FY 'twenty seven is more or less in the same range, maybe a different benefit will be there. And coming to the FY 'twenty nine, once the diesel drive is coming, so that margin is comparatively higher size. So it will be 2% to 3% is more than that existing thing for FY 2019. So this is so extra 2% to 3% will be there once the first half of the capacity is commenced, right? Correct. Correct. And what about the second part of the capacity? Like will there be any more scope for margins to go up? Another 1%. Another 1%, 5%, we initially will increase it.

22:11 Okay. So collectively, are talking about with the 21,000 metric ton capacity around at least 4% of margin improvement, right, with at 100% capacity utilization of 21,000. 3% to 4%. Yes, 3% to 4%, there is 3% to 4% comfortably, you will get an additional percentage on this thing. Correct. Actually, We'll add around 3% to 4% at 21,000 at 100% capacity. That's correct? That's right. It's 22,000 actually, not 21,000. No, no, I'm asking about the additional capacity, right?

23:06 Thousand thousand tonnes of three hundred and and twelve tonnes. The next question comes from the line of Ishan Modi, who is an Individual Investor. Am I audible? Yes, sir, Sandeep. Yes. So my question is around the forward raising that we have declared. So as far as I know that multiple times we have told that our expansion will be from the data and internal access. So this is very change in the plan. That's why we have have we are doing for raising now? Can you repeat your question?

23:54 So I think Hello? Yeah. Go ahead. Yeah. So as far as I know that you have declared declared the equity dilution plan, right, fundraising. Yeah. So my question is that I think past management has told that all the expansion will come from the internal accruals only in-depth only. So why we have changed our plans to do fundraising now? Okay. This I'll explain to you. We are planning actually to slightly dilute the equity, but that is subject to if we are not able to because the our I'll explain to you that 5,500 meters fixed rate coffee project, which is coming up, Out of which, we have got sanctioned of almost all the foreign currency loans from the European bank.

24:47 And there is a clause that one is a negative pledge clause is there. So therefore, we are finding a little difficult to avail the loan facility from the Indian bank. So obviously, we were looking for some sort of valuation because we don't want to alleviate to get stuck here. So but fortunately, we are also exploring other options, like in yes, the other institutions and all. If that is come through, then we will not we may not able to go for the dilution. Okay, okay. And this current revenue, what was the mix between the large paying and the small paying? Now it is going around 50 five:forty five ratio. 55 is small and 45 is bulk.

25:32 Okay, okay. Got it. And one more question that recently from another company, we came to know that because of the green coffee price has been corrected, there is a more demand of freeze dried coffee compared to agglomerated and the spread, right? So are we seeing any moderation in demand in the Q3 and Q4? Because I don't think we have freeze dried capacity, right? So can we see any moderation in the Q3 and Q4? Or are we good? Yes. Because the coffee prices have slightly dropped rate. And again, it is moving upward. But overall, it will remain same. This is what we have a forecast and predictions. But in any case, we do not have we don't have the finished coffee facility as of now, but we don't see any sort of higher increase in are dropping the prices at this point of time.

26:22 So our current portfolio, we are good and we will own 100% capacity utilization Q3 and Q4 as well, right? Yes. You're right. All right. And any formal guidance for the top line or EBITDA per ton you will like to give for FY 'twenty seven? It is actually absolute terms only we are doing it, but it will remain same. I think you can see it from the past few quarters so, then you will get better. All right. Therefore, my side, thank you very much and all the very best for the future quarter. Thank you very much. Thank you. Thank you. Thank you. The next question comes from the line of Deepali Bansal from Ventura Enterprise. Please go ahead.

27:10 Good evening, everyone. My first question is regarding what was the production and sales number during the quarter? And how was the revenue distributed among domestic and export sales, please? Yes. The production is that the purchase for quarter two is 2,737 metric tons and the sales is 2,581 metric tons. 2,731. And how is the revenue divided among domestic and export sales? Almost 858515%. 15% is the domestic and 85% is exports. All right. My next question is regarding Chicory, sir. You said there's a crop shortage and we would be getting incremental revenue in Chicory this year. How much incremental revenue did we do in Chicory due to the crop shortage?

28:04 And what was the percentage of EBITDA that we generated in this? So since that Chicory Chatterjee is fully utilizing, we had some five percentage sales upward sales because of the acute shortage of the jaggery crop and obviously the prices have moved upward. So obviously, there is an incremental growth of around 4% to 5% in sales price. 4% to 5%. That's it, sir. That's it from my end. Thank you. The next question comes from the line of from Alpha Optimus PMS. Please go ahead. Yes. Hi, sir. Many congratulations for fantastic set of results.

28:52 You have been doing flawless execution for last so many years. Many congratulations to the team. My question was on So question was on some clarification because you mentioned that strategy going forward is to get into B2C. So I just wanted to understand more on that, from which year you are thinking and from or which capacity? Because the current capacity up to twenty twenty two thousand, which includes 11,000 of free drive. I think the objective was to remain b to b. Or has it changed? Or from what what year or from what capacity you are thinking of moving to B2C? I can expect to 11,000. Now right now, payment is going to 11,000 metric tons and 5,500 metric tons, which is going to come in based on FY 'twenty eight, 'twenty nine. So what we have planned, our presence will be always there B2C and in the form of the e platform.

29:47 But going in a bigger way is an FY 'thirty only we plan to. Okay. So but that would mainly come in once you have done this expansion up to twenty two thousand, and this twenty two thousand mainly be for b to b. Right? And incrementally, from FY '30 onwards, you might think of putting additional capacity by keeping B2C in mind. Is that correct? No. No. 16,500 megatons, which is going to come up in FY 'twenty eight, FY 'twenty seven, 'twenty eight. So from this, we are not planning anything B2C. But when we'll go for the second phase of the 5,500 metric ton for free state coffee, which means that 11,000 tonnes of free state coffee and 11,000 tonnes of stay and aglow, then we will start looking for the exploring the option entering into the B2C.

30:43 With B2C, going to be domestic or international? We will explore both options. Okay. Because, I mean, I thought the DNA of the organization is more B2B because going B2C is like a different ballgame in terms of distribution, marketing. So if you could elaborate more that was it always the plan? Or is it something which you are thinking now that since the capacity is going up and you need to get into B2C? No. See, there is a business plan. Once our cash flows improve and then we stabilize the plans, both the plans, please get coffee industry and aglow. Because right now, whatever the please get coffee, which we plan to set up 5,500 next year, that is already fully tied up.

31:33 So there is no point of exploring the options to going into the B2C. But when we have additional 5,500 metric tons of second FDD line, so obviously, we will start looking into building our own brand, either in Indian market because India is growing very fast. As a matter of fact, all know that it's 12% to 14% growth rate is there in India for the instant soluble coffee. So obviously, then our presence is very, very important. Either we go in a direct, we do see or we will go through the franchising model, where we have a good distributor and then distributor will start selling in the market. So we will explore these options, but not now. And as I mentioned, once the second line come in, then we'll start looking at Right now, these products are already available in Indian market through the e platform like Amazon and Blinket. But we'll ask our distributor to strengthen more and focus more on that because most of the Indian local brand owners are buying in bulk from us and doing the branding there. So obviously, these deals are very good. So it is necessary for us to be present in Indian market as in the manufacturer. So we don't want to go beyond orders and like we want to be ahead of our competition.

32:46 Okay. The other question was on realization. So could you tell us how was the realization in Q2 versus Q1? Was it higher in Q2? And what is the trend which you are seeing from a Q3 perspective? It's a more than 50%, 50% betterment is there in the Q2. And Q3, what is your expectation? Is it stable, higher or lower? Stable only, we expect that increment is there. Because yes, back mix also little changes will happen. Okay. Okay. And incrementally, now that you are operating at 100% capacity, incremental, any growth in volume once this freeze dried come up, then only, so which is something from a Q3 of next year onwards, we should expect volume growth, right? Because right now, at around 2,500, 2,700, that would be our maximum production quarterly.

33:54 You're right. Q3 and also, we'll expect the voltage. Yes, you're right. Sorry, sir, when? Q3 onwards, we will expect more sales because Q3 and Q4, they come up season for the coffee sales, so you will coffee sales. So obviously, Q3, Q4, you'll have more sales, yes. The next question comes from the line of Bharat Chera from Purple One Vintage Ventures Yes. Good evening, sir. Good evening. Thank you for this opportunity and congratulations on a strong set of results. Sir, just one thing, your H1 operating cash flow has been positive INR 51 crore. Now do you expect this cash flow from operations to stay positive for the full year?

34:52 Yes. Now positive cash flows are same. Trend will continue. Same trend will continue. Okay. So the cash flow from operations will stay positive for full year basis also? Yes, yes, yes. Correct. Okay. And sir, on this freeze dried coffee project, initially, I guess it was projected to be commencing production from July 27 or so. Has that pushed forward a little bit? Yes. It is more or less adjust. So we are planning adjust to start the trial production. So if everything goes well, and then I think September onwards, we'll go for the commercial production. Okay. September onwards for the full project commercial production. So basically, second half of next year, we will have, I mean, full capacity available and whatever utilization we do on that?

35:48 You're right. And sir, what kind of utilization do you expect then in the second half of this new capacity? Maybe we have plans around 70% of the installed capacity. Okay. Will we put the EBITDA margin on this FVC project versus our current spread, right? I mean, versus our Yes. See, because we are going to have five to six months of the production of the featured coffee, which is coming in this FY 'twenty eight. So obviously, there will be an improvement in the EBITDA margin because restricted coffee EBITDA is slightly better than the Pay and Aglo. So obviously, that will be coming in, in FY 'twenty eight. So you will have an improvement in EBITDA percentage of margin.

36:38 Understood, sir. And just on the fundraising, said, just for the sake of clarity, this INR $3.25 crores has been approved by the Board. But what you from what I understood is that this is the company has yet to decide whether to go forward with this kind of fundraising. And therefore, you are exploring various other options as well? That's right. You're right. So we are exploring other multiple options. Once that is true, then we not go for the equity dilution now. Understood. Understood, sir. And what was the demand environment positive? Sorry, I didn't get you. Yes, demand is good. Demand is good for the tea side coffee.

37:25 Yes, certainly. That's why we are planning to go without any further delays, we are planning to go for second line. And we are also as I mentioned earlier call, then we are also building making a building sector and civil work and some of the equipment which we are buying that will take care of entire 11,000 hectares of pre shared coffee. Sir, sir, I think you mentioned the second phase of 5,500. When do you officially sort of take a final call on moving ahead with this? Of course, it will be CapEx and necessary to be ordered, etcetera. So when is that final decision to be expected? During the first quarter of FY 'twenty eight. Okay. So the moment broadly, this one comes online, the first phase, you'll more or less take a call on the second phase.

38:12 And we expect to think about twelve months or being a brownfield project to get it on stream. Yes. September 2029 potentially one could sorry, September 2028 is could assume this second phase could become operational come back. If April 29 is that definitely the commercial operation will start for that Phase two. Okay. 05:30 will be the full. Understood. Very much, sir. I think that's about it. Thank you so much, sir. You're welcome, please. Thank you. The next question comes from the line of Tanmay, who is an individual investor.

39:02 Please go ahead. Hello, sir. Am I audible? Yes, please. Go ahead. Yes. I just by the way, congratulations on a good set of results. Sir, I just wanted to confirm or understand on your other expenses part. So your other expenses have increased from crores from INR 7 crores to 14 crores in this quarter. So just wanted to understand, like, what is driving those expenses? I expect that in normal in line only. It will be the filling expenses is increased because of the ocean prices increases. Same thing is up to the customer. Okay. So are we expecting these expenses to sustain? Or are we expecting the expenses to wind down going forward? We see, but we have to see that political situations.

39:56 Okay. Also, have second question. I wanted to understand where your coffee inputs come from. So where are you basically sourcing your beans from? And are you expecting any increase in input costs on that front? Yes. We are mainly sourcing from India around I can say around sixty five percent to 70% from India and that is around 30%, 35% from Uganda and Indonesia. Okay. Okay. And are we expecting any increase in these input costs because of the weather conditions or the current supply the current water shortage situation? Like are we expecting any kind of increase in these costs? Because we're we're going to Sorry. Sorry. Really sorry. Just one more question following up with that. If, yes, are we expecting to, like, pass these costs forward to the customers?

40:50 Okay. See, as per the forecast, sir, the coffee beans in Indian coffee beans and all, more or less to flat compared to the last year. But with regard to Vietnam, it appears to be a slightly improvement increase in crop. But other countries, sir, I think if you see the reports, which says that Uganda is around 5% to 6% growth is there and Brazil more or less same compared to the previous year. But if you take everything into the average comes around to the same what the levels today it is. So if that level continues, I don't think so that there will be any incremental listing in a coffee bean. But maybe it remains same or slightly it will reduce it. Thank you. The next question comes from the line of Janav Shah, who is an individual investor.

41:43 Please go ahead. Hey, Can you hear me? Yes, please. Go ahead, Mr. Shah. In the last AGM, you said the fundraising was done for the 3,000 metric 3,500 metric per ton per annum for the agglomerated coffee. So is it still on like is it still on track and one more packaging and that you are going to add. So any update regarding that? Yes. Promotor is contributing to warrants for this agronomation unit and the packing line. That is on. So next ten, fifteen days, that 25% contribution also will be coming. With that, we'll be starting the activities. Okay. Okay. And how has been the growth in the roasted and ground coffee? And how much volume have been we have been so like done in this quarter?

42:33 We have received an order for a couple of containers, and we started exporting it. But this will come to know exactly the entire volumes and everything maybe next to another two months' time. But it will be a sizable order subject to if we see goes well. Okay. And regarding the 3,500 metric ton, which will the confirmation would come, till how much like how much time it would take them to like commercialize? Because it would be twenty two thousand plus 3,500 metric ton, the total capacity of the firm, right? No. 3,500 metric ton is not an additional capacity which is coming in. I think there is a misunderstanding. 3,500 metric tons of the existing capacity of 11,000 and aglow. So we have a limitation in agglomeration plant. So we are keeping one more agglomeration plant, where we can increase the agglomeration production in between the 11,000 metric tons, reducing slightly the sprayed rate because agglomeration features a higher margin. So we want to focus more on agglomeration that sells in a consumer pack. So that's the reason we are adding one more line of agglomeration so that we can reduce slightly spread right and focus on agglomeration. But with regards to the capacity of 11,000 metric tons, we'll remain safe. And with regards to the freeze dried coffee, as I mentioned, 5,500 is coming up now. Next year, it will start. Another 5,500

44:03 metric tons, we'll follow after that we can able to place an order for the next year, mid of the next year, I can able to place an order for one more line that will be a brownfield project. Okay. But is there any plan to increase the capacity in the spray and agglomerator? Because since we are working on, like, say, 95% capacity utilization? Yes. At this point, yes, Mr. Shah, you're right, absolutely. Because if the existing customers demand increases their sales, then obviously, then we need to focus on slightly increasing our capacity, which we will definitely on cards, we'll definitely look into that, but that is the internal things which we can do it ourselves only. Okay. And in this quarter, like in the first half, how many new customers have been added in the sprayed and agglomerated?

44:52 Mr. Jawahar will give an answer, Sasik. Good evening, everybody. We have added four to five customers, new customers for sprayed leg. And how many are in the pipeline? Like we are still currently talking with them and we hope we'll be converting them till the end of the year? Yes. This is a continuous process. We follow the funnel system. So we expect as they move, we'll be adding to new customers. Okay. Great. And is there any been delayed in the FDA project? Because I thought this would come live from March 27. Now you are seeing from the second half of the FY 'twenty eight. So like six months delay. So is there any problem going on? Is there some like something got stuck in between?

45:39 Yes. There is no delay as a matter of fact. We said that it will be in June, July FY 'twenty eight. So June, July, that is now secured to the September. The reason is that because we are availing the loan from European bank and our plant, the DG plant is fully compliant with the DG now. So obviously, it is taking slight time actually. It took a little more time because to comply the ESG formalities and everything. So that is the reason one or two months, there is a delay. Otherwise, but we are already they were saying that June, it will start there. So that is shifted to the other September. Okay. Okay, sir. Great set of results and congratulation once again, sir. Thank you so much. Thank you. The next question comes from the line of Prahlad Agarwal from FinVestors.

46:37 Please go ahead. Good evening, everyone. Congratulations for very good set of numbers. Sir, my question is, can you please throw some light on revenue from online platform as you have mentioned in the PPT and expected growth rate from that? Sorry, I didn't get to your question. If you don't mind, can you repeat? Yes. Sir, I want to know the revenue from online platform as you have shown in your PPT and expected growth we can assume in coming quarters? To be frank, because this is going in a franchisee model. So obviously, we are not focused on this. But now since we have now appointing a distributor and the distributor is not only taking the online and using the other platforms also, I'm sure that the growth rate will be much better. Now it is in a very negligible sales, which we are doing it.

47:49 The next question comes from the line of Onkar Gugaldaray from C Investments. My question was already how much margin difference is there in the accelerated and the freeze dried coffee? You're talking about the price levels or margins? Margins. Yes, around 2%. Yes, yes, yes. Okay. And for the price? Straight to agglomeration, right? No, no. I'm asking about agglomeration. Currently, you are setting up additional plans, right, for 5,500 for free trade, right? Okay. Okay. Okay. Okay.

48:37 Okay. No, that's what we have the difference in the margins. But the point is that what we are getting is that because now we are both we are now right now, it is the plan is around 40% to 55%, which we are selling in agglomeration and 45% is traded. This 45%, we want to bring it down further and focus more on agglomeration so that we can sell in a consumable bag. When we sell in a consumable bag, the realization will be 1% to 2% more than the pulp realization. Okay. And like currently, when you shift to the full capacity for free drive, around 11,000 of only free drive, I'm asking, how much additional margin that would give? This will be this easily give around 3% to 4% over the agglomeration side.

49:30 Okay. Okay. So at like 100% capacity utilization, you are saying, right? Yes, you're right. Okay. And the store which you had at, I guess, I mean, you have any plans to expand more stores? We haven't heard anything from that on that front. No. As I mentioned to you that we are now focusing more on the business, industry sales are setting up a pace and all. So but we have planned right now to go with the one only. But in case if the franchisee has more options to open the outlets, then we don't mind. Right now, we don't have any plans as a company. Okay. So the new 5,500 capacity, which just came up in March, So the full impact started from Q1 and more in Q2, right? So in that way, Q3 and Q4, we'll be also seeing 100% capacity utilization.

50:29 But like after Q4, like in Q1 or Q2 of next year, will there be a growth slowdown because of the like you won't be having additional capacity for the additional growth because already you will be utilizing 100%. So incremental growth would come from that? That's what I'm asking. No. FY 'twenty eight, the plan is that we will continue to go for the full capacity utilization of 11,000 metric tons. That will continue to grow. But if you see FY 'twenty nine, you will be getting additional maybe around 4030% to 40% of the free shade coffee capacity will add on that. So in that event, then the 11,000 metric tons plus maybe another 2,000 metric tons of free shade coffee will come in.

51:25 So obviously, there will be a growth in a value. And given Q1, Q2 of FY 'twenty eight also, 5% to 10% is the Y o A growth also will be there. Okay. But the recent capacity which you commenced in March, the impact started from Q1, Q2, Q3 and Q4, right? It's continuing from Q1 to Q4, right? So like the net capacity of 5,500 will be commenced from which quarter? And whatever the utilization unit we are keeping, that value of the 25% realization will be coming more, that benefit will be coming in the Q1 and Q2 of FY 'twenty eight.

52:18 Okay. So the additional benefit of incremental capacity will only come from Q2 of next year, right? Yes, yes. Q1, Q2 of next year. And from the September onwards, that we will start giving that realization. Sorry, I missed your comment. What did you say? Free fried coffee also, in fact, aberrations from the September 27. So Q1, it will also be come. Okay. So but Q1, you will be shipped the impact will be coming from the shift from like agglomerated coffee and most the second quarter will have the impact of the additional capacity of the freeze dried coffee, right? Yes, yes, yes, yes. Correct. You're right.

53:18 The next question comes from the line of Vinay Kumar Daghlu, who is an individual investor. Please go ahead. Thank you. My questions have been answered. Thank you. Thank you. The next question comes from the line of Abhishek Mathur from Systematics. Please go ahead. Yes. Hi. Good evening, sir, and thank you for the opportunity. Sorry, I joined the call a bit late. On the Phase two of the FDC expansion of 5,500 tonnes Phase two, have you indicated earlier on the call that the production will commence in FY 'thirty and not in FY 'twenty nine? Yes, FY 'thirty will be commercial operations will be started, correct.

54:05 Got it, sir. And on the Phase one of 5,500 tonnes of FDC, should have you indicated that the utilization for FY 'twenty eight will be about 70% and it will be utilized for about six to seven months for the financial year? Correct. Got it. Last clarification, sir. On the spray dried plus ad dominated SDC side with the 11,000 capacity that we have, on the earlier call, you had indicated that we could look at volume of about 10,500 tonnes for FY 'twenty seven. Is that guidance still intact? Yes, that is intact. You're right. Right now, we have visibility for 10,500. We have a commitment from the customers. That is intact.

54:53 Great, sir. Got it. That's it from me. Thank you. All the best and season's greetings. Thank you so much. Thank you. The next question comes from the line of Meet Mehta from Integrity Ventures. Congratulations on great set of results. Sir, just wanted to understand how does the value and volume works for our company. You know, we have done a volume of around 43%... A growth of 43% in terms of volume, and our revenue has grown around 54%. So what does this value growth indicate here? Because I was just comparing the coffee bean prices for this particular quarter last quarter.

55:41 So there has not been a huge sum that we have seen in our realization. So any color on this value term? Yes, I'll explain that one. In the value in the volume, we are seeing at least a both combination of the chicory and coffee. But the major growth in the volume is happening in the coffee only, which is the high value realization. So because of that, realization is that even though it's a total volume growth is showing is a 40%, but value growth is a 60%, 65% is there. Okay. And higher realization copies are agglomerated copies? Yes, yes, correct. Correct. Got it. And also on the EBITDA term, so our EBITDA should be growing with our volume growth, right? Because we would be having a fixed percentage kind of arrangement.

56:36 So our EBITDA should be growing with the volume. Correct. Correct. Absolutely. You're right. Okay. Sure. Thank you for the clarification and wishing you the very best for the coming quarters. Thanks. Thank you. Thank you. The next question comes from the line of Deepali Mansal from Venture Enterprises. Please go ahead. Sir, I would like to ask one thing. I'm an individual investor. I have been a part of... I've been a shareholder for maybe two years. What can go wrong? I mean, what should I be cautious about?

57:22 Like the whole scenario is really beautiful. You have a good vision for the next five years. But what should we be cautious about? The cautious thing, which is that the geopolitical situation because we are mainly depending whether this is an export oriented unit. So it all depends upon the international logistics. In case if the and sales availability has become a challenge. Of course, recently, the other government of India also has given a cadence to set up a container manufacturing unit in India. But the still so in case if there is a shortage of a few shortage of containers, so there may be a slight delay in shipments. That is the one we are anticipating the issue. Otherwise, I don't see because the coffees are available.

58:12 Fortunately, coffees are available within a full crop, which is coming in all over the region, all over the regions, especially like in Africa, Vietnam, Indonesia, Brazil and India, we are expecting a good crop. So obviously, the crop coffee availability is not an issue. And the price levels more or less will remain same and the consumption of coffee globally is growing year on year. I don't see any other major thing except to this geopolitical situation. So do you think in that kind of scenario, we would be able to sell our goods domestically rather than in the export market if something of that sort happens around the world? So that's the reason what we have is that we have already started our small presence in Indian market. Of course, we are also selling in Indian market to the some brand owners who are also building a brand on that. But going forward, as I mentioned in my earlier question, so we have plans to go into the Indian market on a B2C and FY 'thirty, but that is a long way to go. I'm saying because we don't have all the products right now available.

59:26 Reested coffee is the product which also required to so that is coming in next year. Once that comes in, then we may take a call on this one. But yes, you are right, certainly, Indian market is growing. And obviously, there's a huge potential for the soluble copper to sell in India. All right, sir. Thank you. Happy New Year to everyone. Thank you so much. Thank you. Thank you so much. Thank you. Ladies and gentlemen, due to time constraints, we have reached the end of question and answer session. I would like to hand over the call to management for closing comments. Yes. Thank you very much for all the participants, sir. And I'm very glad that you asked very nice questions and good questions, which I could able to give an answer. In case if we are not able to you have more questions about these things, you may please write to us either to me or to the CFO or to our sales director or ED. They will reply back to you immediately, any clarification, anytime 20 fourseven.

1:00:31 And also, I wish you all a happy week following in advance. Thank you very much. Thank you. On behalf of Vintage Coffee And Beverages, I conclude this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.