LT Foods Limited (LTFOODS) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the L.T. Foods Q4FY26 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 this conference call, please signal an operator by pressing star, then zero on your touch-down phone. Please note that this call is being recorded. I now hand the conference call over to Mr. Mead Jain from Motila Loswal Financial Services. Thank you, and over to you.

Thank you, Steve. Good afternoon. Thank you, everyone, and a very warm welcome to LTE Fords 4QF 526, Post Research Earnings Call, hosted by Motila Loswal Financial Services Inter. On the call today, we have the management team being represented by Mr. Ashwini Kumararoda, MDN CEO, Mr. Sachin Gupta, CFO, Ms. Monica Chawla-Chagia, Chief Corporate Development Officer. We will begin the call with three thoughts from the management team. Thereafter, we will open the floor for Q&A session. I would now like to request the management to share their perspective on the performance of the company this quarter. Thank you, and over to you, man.

Thank you, Meeth, for the introduction. So along with other team members, we have Mr. Ritesh Arora today also on the call. He is the CEO for the India and Paris business. So good afternoon, everyone, and thank you for joining us today. On behalf of the management team, I welcome all our investors and valued shareholders to discuss the performance of LP Foods Limited for the fourth quarter and full year ended March 31st, 2026. Please note that any statement made or discussed during this call which reflects our outlook for the future or which could be construed as a forward statement must be reviewed in conjunction with the risk that the company faces. A detailed disclaimer in this regard has been included in the investor presentation that has been shared on both stock exchanges, that is NSE and BSE. The result documents are available on our company's website as well as stock exchanges. A transcript of this call will also be made available on the investor section of the company's website. Financial Year 26 has been a year of strong execution, resilient growth, and continued transformation into a global branded FMCG company. Despite a dynamic external environment, we have delivered solid financial performance while continuing to invest aggressively in the brand, innovation, and global expansion. I just covered industry tailwinds and headwinds in the financial year 26. Before I dwell into our performance in detail, let me briefly touch upon the broader industry context. The global rice and the specialty food industry continues to benefit from structural tailwinds. The Indian FNCG market is expected to grow at 11% CAGR, driven by increasing consumption and improving retail penetration. The global Basmati and speciality rice market is witnessing steady growth of 7% to 12% across geography. We see rising premiumization trends, along with increasing global demand for the ethnic cuisine, especially in North America and Europe. We have experienced expansion of South Asian diaspora, which is driving sustained international demand. In addition, consumer preferences are evolving towards health and organic products. Categories such as ready to heat and ready to cook. Long-term strategy, but there were a few headwinds as well, such as geopolitical issues, U.S. tariff, increased rate, and increased input cost. Now, I'll cover the financial performance of the company. Coming from financial performance, the revenue, including other income, grew to 11,023 crores, which is up by 36% on a year-on-year basis. Gross profit increased to Rs 3,692 crores. The nominal gross profit was around 35.3%, excluding U.S. tariff and change in the shipment term. Abita rose to Rs 1,236 crores. Profit after tax stood at Rs 625 crores. It is important to note that the normalized revenue growth was 19% and Abita margin moderated to 11.8%, excluding U.S. tariff, reflecting higher brand investments and strategic spending. We continue to strengthen our financial discipline with our working capital days improved to 176 days versus 196 days last year. Net debt remains controlled with net debt EBITDA at 0.66 and net debt equity at 0.16 in financial year 26. For the fourth quarter, the revenue grew to 2938 crores, EBITDA stood at 300 crores and FAT was around 136 crores. Coated margins for financial year 26 and Q426 have been affected because of the U.S. status pass-through, brand and marketing investment, LTPOOS UK being an investment phase, and organic segment under remodeling. Our core business, now I cover the segment and geography performance, so our core business continues to perform strongly with Bhattmati in the specialty rise, contributed 88% of the revenue, delivered a 29% revenue growth in financial year 26. Normalized growth 21%, excluding the U.S. tariffs, with revenue in tune of Rs. 9,742, reflecting the enduring strength of our strong brand equity and deepening trust-consumer place in our products across the world. The segment maintained a heavier beta margin of 12.3%. Good morning, everyone. With a strong growth across India, North America, and Europe, we continued and gained our leadership position as number one brand, Bhaskuti brand, in North America, with a strong share in the U.S. imports and Canada market. Our organic foods and ingredients segment grew by 9% and crossed Rs. 1,016 crores in the revenue in financial year 26. Building on over 30 years of pioneering Indian organic exports, with over 1,10,000 hectares of certified organic farmland, 80,000 farming family associations, and a global partner base spanning 25 countries, this business represents both a significant commercial opportunity and a profound expression of our commitment to responsible sourcing. We are glad to share that we hold 12% share in India's export of organic food. However, this business segment is under stress, and we have strategically remodeled it for the next phase of the growth, in which we have built the capacity, which will take time to helpfully utilize, and also enter into the CPG business. Further, the EBITDA is also currently in distress due to currency fluctuation and commodity price pressure, are ready to heat and ready to cook. 5 years, reaching 187 crores in financial year 26, as consumers increasingly seek convenient and healthy meal solutions at home. Innovations like Vianne Kid, Kappa Rise, Royal Ready to Heat, Rains are resonating strongly with time-pressed, flavor-forward consumers in India and internationally. The demand momentum across key markets remains strong. However, certain growth opportunities could not be fully serviced due to capacity constraints in RTH platform. The enhanced capacities are expected to become operational from quarter two of financial year 27. Our India business continued its strong trajectory, ending the year with 10% value and 12% value growth. A testament to the resonance continues to build with Indian consumers. What's particularly encouraging is the quality of this growth. Our quick commerce and e-commerce channel grew in excess of 45%, firmly cementing our leadership on key digital platforms. The premium segment grew at 2x the pace of the overall consumer portfolio, reflecting the power of the premiumization trend that is reshaping India's food landscape. Our premiumization grew a significant increase in gross margin, which was reinvested in the further strengthening of our strong brand equity, enabling us to scale our marketing budget by 2x versus last year. Our household reach in India rose to 64.4 lakhs, as per the Kantar, a 22.8% expansion over the last 15 months. Our market share in India stands at 23.7%, as per the Nielsen report. Besides, the new innovative offerings like Dawat and Organic Ranch, the limited edition of Dawat Sepran Basmati, and Dawat Thai green curry rice kits are gaining strong traction with our consumers. Our investment in the new facility in Rai Chor, Karnataka further strengthens our value chain from farm to fork as we deepen our regional rice play. Also, the North America. It remains our largest market, contributing 48% of our revenue mix in financial equalities and delivering 53% growth. 9% is the normalized one, excluding the impact of the U.S. tariffs. Our flagship brand, Royal, commands over 60% market share, and Golden Star continues to be number one Jasmine Rice brand in USA. Europe continued its growth journey, delivering 34% revenue growth in financial year 26 and advancing meaningfully towards our five-year target of £100 million in UK revenue. LPP Joram was conferred with the New Entret Award for its expansion to the UK market at the 15th Annual Department of Business and Trade Investment Awards. Separately, extra-long Basmati recognized as the product of the year, Tawad extra-long Basmati recognized as product of the year in UK and honor driven entirely by the UK consumers. We are building the foundation for a sustainably large European business and we remain focused on brand building, distribution expansion, and portfolio diversification across the region. In the Middle East, we continue to further strengthen our position. We would like to highlight that despite the ongoing geopolitical conflict in the Middle East, including the heightened tensions arising from the Iran situation, LTE4 has demonstrated business resilience with no material disruption to our supply chains. During the year, we expanded our presence in Saudi Arabia with Lopez 53 crores in revenue in financial year 26 and successfully launched Madha Basmati rise in Saudi Arabia. Apart from this, we are witnessing some near-term pressure arising from U.S. imports to Arab-related developments. While the input cost has increased, we have to see how it's going to impact us in the near future. Going ahead, premiumization, category expansion, route to market excellence will continue to be the engines of our growth in India, while brand investment distribution, expansion, and innovation will drive our international performance. Our strategy going forward remains very clear and focused. Stensing our core business by expanding our global market share in Basmati and the speciality rise and drive premiumization and pricing far. Accelerating new categories by scaling RTH, RTC, and other such products. We should remain focused on margin improvement by focusing on operational efficiencies, cost optimization, and build economies of scale, improve their mix towards premium and the branded offerings. Technology and digital transformation remain at the core of our capability building agenda. As we scale towards our next phase of the growth, we are committed to building a smarter, more agile, and future-ready organization that leverages technology as a competitive advantage. We expect, for the future, we expect continued double-digit growth supported by global demand and new product launches, distribution expansion. Margins are expected to gradually improve as brand investments normalize, scale benefit come through. RTH, RTC, and organic segments will continue to outpace overall growth. Now, we would like to open the floor for question-answers, please.

Thank you, ma'am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchdown telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question.

Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from Abhishek Mathur, which is Thematics.

Please go ahead.

Yes, thank you for the opportunity. Just wanted to check for FY26, what was our volume growth in the U.S. and also for the U.S. geography and also for the Basmati and Speciality Rise segment, volume growth for FY26? And what do you think was the extent of impact on this due to the U.S. tariffs?

That's my first question.

Yes, so the volume in the overall Basmati and the speciality segment in this year-on-year basis grew by almost 19% this year. As regarding in the U.S. as such, the U.S. volume increased by. The golden star revenue that will also increase by 30 percent, 35 percent.

And, sir, what do you think was the impact on this volume growth, if any, from the U.S. tariffs?

So, you know, this was an opportunity for us, being, you know, the company which has on-ground operations. And with a better service level, we have been able to acquire more consumers, more customers by giving them, you know, the... Service level. So the idea was to, in this whole disruption, which was a big disruption for us, the idea was to keep the service level robust. And that has really helped us to grow our customer and consumer base. Although, you know, it has impacted on our margin, because partly we have consumed and partly we have passed on. But broadly, you know, acquiring consumers, acquiring customers was a big achievement for us.

Right. And secondly, you have indicated a higher stepped-up investment in your UK business, where we have a five-year target of scaling up. So just wanted to check today, how much is UK salience for Europe as a percentage of revenue? And on the domestic side, just wanted to check what is our distribution reach now? I believe it was about 170k in December, but what is that number now?

Sachin can add into this, you know, this year, UK is roughly 45 million pound revenue, and the goal is in, by 2030, we will scale it to 100 million. Distribution?

So, India distribution is... Flat at 172, so flattish, hasn't grown much in the last quarter, but we've seen an improvement in our market share compared to last year's semi-quarter.

All right. And lastly, just a bookkeeping question, if I may. When I look at our revenue growth for FY26 for India and U.K., sorry, India and U.S., which are together about 80% of the business, it's at 10% for India and about 8% to 9% for the U.S. But our FY26 revenue growth for the Basmati rice segment, which is about 90% of the business, is at 21%, both normalized. These don't seem to be adding up. Is there something I'm missing here?

So, you need to, there are two kinds of accounting treatment that we did this year. So, one was, if you normalize that, one was the tariff, the custom tariff, and the second was the Golden Star, because last year, the Golden Star, we had a JV. This year, we have acquired that 49%. Now, it is a fully owned subsidiary. So, both the numbers, if you tie it up, because there in the US one, we had normalized the golden star as well as the tariff, whereas in the Basmuthi segment, the tariff was there. So, once you...

Thanks, and all the best.

Thank you. The next question comes from Saurabh Bheria with Samiksha Capital. Please go ahead.

Hi, Mr. Pond. Congratulations for the great set of numbers. I wanted to just have guidance on the margins part. So, say, going forward in F527, what are the gross margins we expect, considering the rise in the input cost and also the vitality margin?

If you talk about the gross margins, the gross margins will be more or less in the lines what we have done in the 25-26 because the gross margins, the movement of CIF to CNI, that will remain in this year as well. So that will be there. Yes, somewhat the tariff and other things, because now the tariff has normalized from 50 percent, it has gone to 10 percent. So we expect the cross purchase to be within the range of what was there in the now.

But last, when I checked, your F506 cross margins remains different from F505. So, on an absolute basis, if you can give me a number of the range, that would be more helpful.

So if you look at my gross margins at 24-25, it was almost at 24.6%. It reduced on the 100 basis point. And this reduction in the 100 basis point was mainly because of the U.S. tariff and the movement from C&F to C&I. So this margin range of 33.5 or 33% will remain in the next financial year as well.

Okay, perfect. Okay.

And that become all these?

Abita margins, because this year there were certain tariff was there and there was certain passing of the timing and other things were there. The tariff had an effect on the Abita margins. Likewise, there was the organic range, one of the organic, the inventory built up, and the other spends were there. So if these things, because there are certain kind of dynamic environment and dynamic situations that might, if these situations relatively are not there and things remain such, we will surely improve on the beta margins by almost on that level. We were at 12% in the previous year, so we are eyeing that level.

Whatever the disruption has come, we have counted for till time. As such is said, we are confident that we will be in the range of 12%. But as we are living in a very disrupting world, we are confident that we will be in this range.

And another question lies around the growth guidance. If you can guide a number for different geography wise and your overall Basmati segment wise. And also market share for say going forward if the Basmati industry grows by say X percent. So what up to total geography, what percentage of market share does AE sees?

So, that we have tried to put all the information on the presentation. So, if you go through the presentation, you will find these numbers.

And the guidance for the growth, that we maintain that guidance for the growth. So, we are eyeing at 10 to 12% of growth on the long-term basis that we are eyeing and we remain to that growth level. Organically, we should grow in that level.

Okay, perfect. Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question, please press star and mod. The next question comes from Pooja Sangvi with incorrect. Please go ahead.

Congratulations on a good set of supplies. I want to ask that, what is current with your inventory by age, and how much of your inventory today is aged like 12 months or more versus a relatively fresh one?

Invent.

So inventory aging also, it depends upon the different products which we sell and all my premium products, if you talk about premium and certain other range that we have. So my average inventory levels, if you talk about the average inventory is around 190 days to 200 days of inventory which we hold. So there are certain premiums where we age more than 18 months or two years of inventory aging that is required. So there are, on the various products, we age accordingly.

Right, sir. So, I just wanted to come on clarity on how much of the volume is aging beyond 2 years, if you can tell me that.

Yeah, Puja, can you be specific on your question? So, may not be we have the answer right now, but you can mail it to, you know, the investor relations. Sure, sure. Thank you. Thank you.

Thank you. The next question comes from the line of Krish, Lula, an individual investor. Please go ahead.

Hi, thank you for the opportunity. My question is on payable days.

I'm seeing from FY21, we had trade payable days at 45 days. Now it is touching almost around 100 days. I wanted to know what's the reason for it and is the 100 trade payable days now the normal payable days for the future or is it going to reduce like it reduced to 101 in FY26?

So, these payable days of 100 or 100 days, which is there in the financial numbers, so these will remain as such. So, we have made certain arrangements because our practice of buying is 60 to 70 percent we buy in the season and 30 to 40 percent we buy apart on the other seasons. So, the payment days, when we buy in 30 to 40 percent in the other part of the season, that differs. So, having said so, this painful days of 100 days will remain in the future as well.

Okay.

Thank you.

Thank you.

The next question comes from Amit Doshi with Care PMS. Please go ahead.

Yeah, thank you. Sir, this is a ready-to-heat health and convenience segment. So, while, of course, Dawat, we have discontinuation has impacted the sales growth. But overall, looking at the number, the size, our growth number, do you think is fairly low? Or what is our internal target? That's one. And second, on the same RTH and RTC segment, our gross margins are in the line of 32-33%, which is similar to Basmati and specialty rice. So, considering that it's a convenient segment, you know, should it have a higher gross margin, or if there's anything on that, if you can add?

So, basically, RTH segment is led by our U.S. geography, which is very big in this category. The rest of, like, India is very small for ready-to-heat and bigger and ready-to-cook, where we are. You know, putting all our efforts, which is Tawad Biryani, and, you know, so that's, we are getting good response. So, as far as RTH is concerned, you know, our plant got delayed, and that's how, you know, the growth is a little disruptive, but we are confident that by July, the production will start, we will be. Back on the track of growth, and as far as margins are concerned, you are right, we are in the range of 35.

That too is basically on basis of accounting treatment, because in the initial period, you do more of sampling and sales promotion. There is more spend on that, and that needs to be netted off, and you need to have the net sales. If we remove that, our overall GP margins in this segment on the basis of what we are making the sales, it is almost 40% plus in this segment if we remove the sales promotion and other sampling expenditure.

So the filter is, whichever, you know, RTH or RTC segment we should get into, the filter is, it depends on the size of opportunity. It will be in the range of 30 to 40 percent.

And what's our internal growth target of this segment, and when do we have a break-even target?

So as far as, you know, the internal aspiration we have set for this business, so RTH is very big in USA, and this year, you know, we have done 15 million. So another plant has been set up, which is late. So in the next two years, we will be 30 million, which is 300 crore. And on the ready-to-cook, which is India, that, you know, on the size of what we are expecting by 2030, we have set up 120

crores of revenue by 2030. So, in India, we are already the category leaders when it comes to Biryani Kit. We have more than 60 to 65% market share on different platforms. And so, over here, the investments are going on for category creation. So, we are therefore very bullish on building this category up.

Okay, okay.

So, any breakeven target that you would want to add?

Sachin, can you add?

It will be in the next two years. So, as Ashishniz told, in the whole of the category, our breakeven target, that remains the same. Achieving a 400 crores in this segment will make us breakeven in this segment. So, that's our target, yes. One year, because of the capacity constraint, our target has moved. But otherwise, we are online with achieving that target.

Okay, okay, okay. Overall, our inventory days are down. So, have we purchased less this year as far as our inventory is concerned?

Not really. Not really. We have not reduced our inventory. Yes, as we compare with the inventory days, it has reduced by 28 days. So, somewhat, this represents the tariff aspect because the tariff impact and other things were there. But overall, the inventory, we have maintained that inventory levels of almost 250 days of inventory, which I am sitting at as on March 31st.

Okay, okay, okay. And any general comment on El Nino and outlook of Basmati rice production for the upcoming season, anything on that, you know, paddy prices for next year, anything, any comment on that would be helpful.

Yeah, so as far as, you know, farmers' economics point of view, last year the fatty prices were very high. So we expect that, you know, the farmers will grow more. As far as, you know, the impact of Lino, you know, let's say, you know, we are watching, but historically, you know, Basmati is mainly grown in the region where, you know, there is other way of irrigation also. So, in the last 40-50 years, we have not seen any impact of the rainfall shortage on the basmati. Rather, farmers prefer them to basmati because it consumes lesser water. And so, we are positive that the production of basmati will grow this year. But I think we will be more clearer in... In one and a half months.

Okay, okay, okay. And on the Middle East front, while, of course, Saudi has contributed to around 50 crore revenue this year, new markets, other than that, our Middle East is not going. Is that correct, understanding?

No, that's correct, you know. That's a very tough market, very strong entry barriers. And we have chosen our route to market where, you know. We should not lose money, or I will say not invest money much on that. But we are finding other ways of growing Middle East. Hopefully, you know, that should work.

Okay, okay, okay. Thank you. Thank you, Anishu. All the best.

Thank you, sir. Thank you.

Thank you. Participants, if you wish to ask a question, please press star and one. The next question comes from the line of Unni with GeoJit Investment Limited. Please go ahead.

Hi, am I audible? Yes, sir. Yes.

Hi, sir. I would like to know about what is the revenue contribution of Golden Star specifically and their margins.

So, as regarding the revenue contribution, it is almost contributing my 10% of the overall revenue in this segment. So, currently, we are not tracking its EBITDA margins as such because it has been merged with my financials. But the margins of this year is, as we compare, is relatively 1% or 2% lower than that of the last year.

So, like, in Q4, what will be the

revenue of, like, what, for golden stuff?

It's very, you know, proportionately divided. So, 25 million, which is 250 crore.

Okay, okay. One more question, sir. Like, what will be, what is the current situation of raw material prices?

So, for the coming crop?

Yeah, yes, yes.

So, it's very early because in one and a half months we will be clear, you know, what is the kind of production being forecasted and what will be the impact on this disruption which is happening in the Middle East. So, I think one and a half month, we will be more clear, but broadly, if you ask me, the prices will not come down much.

Okay, sir. So, for what was the situation?

In terms of prices? Prices have gone up very high, you know, from the base level, if I talk about whatever was the opening price, roughly 25 to 30 percent prices have gone up.

Okay, okay, okay, sir, thank you.

Thank you. The next question comes from the line of Dhamudharan with AcuTask Capital. Please go ahead.

Yeah, thank you for the opportunity. Just one question from my side. On CAPEX, I see that you spend around $13.60. Can you just give me a breakup of this CAPEX? Yeah, that's from my side.

The capex spent in the last year is almost 350 crores. And in that, the major capex that has went is basically in the lines of the U.S. We have purchased the land and we have invested in the RTS facility. So in the U.S., that's the major capex that has went up in the last year.

Land we are building, you know, big warehouse in Houston.

Okay. So, the 350 crores is entirely for that?

So, a major one is this, in that rest is in the UK one, the packaging facility, because we are in the growth phase, and we are installing that additional packaging facility in that. And rest are certainly in India. In India, we have purchased certain portion of land to build new warehouses in the Indian region. So, that has gone in that capex.

It's a mix of all territory, but major is, which is such as explained on the Houston land purchase and RTH.

Sure, got it. And what's the outlook for FY27 or the JPEX plan that's going to come through?

We'll be in the similar lines. We are investing to create certain more capacity in India. And then, you know, the land has been purchased and warehousing and some, you know, asset we are building in Europe on packaging and all this. But major is in India and USA.

Sure. Okay. And just one question on that green acquisition, which kind of fell through. Will we be looking at it now, considering the changes and circumstances?

As a strategy, we always look for opportunity, which has a, you know, strategic in nature as far as LTFOOS framework is concerned.

So we keep on looking that kind of opportunity.

Okay, sure. And just one question on the consumption side, specifically on the U.S., are you seeing any impact in terms of consumption at the retail level or of the war and inflation, anything like that?

As far as demand side is concerned, we have not seen any impact and historically also because being the food. And U.S., you know, whatever the income is, that's the last thing to get impacted.

Sure, that's hardening to know. Thanks. Thanks and all the best.

Thank you.

Thank you.

Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. The next question comes from the line of Eklavya, an individual investor. Please go ahead.

Hi, guys. Congratulations for the good set of numbers. So, my question is that in respect to the top-line growth, what is the top-line growth for this year in USA as well as the sales growth for this year?

Eklavya, sorry. Can you repeat your question, please?

I just wanted to understand the sales growth in USA for this year, financial year 26, as well as the volume growth in the USA.

So, otherwise, it is stated in my investor's tech uploaded one. The USA in the value terms is grown by almost 53%, but that includes the tariff as well as the golden star in this. And in the volume terms, as I stated, it is a 38% growth in the U.S. That was there, in the volume. And if I reduce the golden start, there is a growth of volume terms 8%.

Okay, so there's a discrepancy in the volume and the sales growth. Does the sales group also include the forest gains as we have seen that the dollar depreciated a lot in the last one year? So, does the sales fund include that also or the contract used to take place at the very initiation of the year? How do you used to take this?

No, no. So, yes, it has a dollar impact, dollar depreciating because we are reporting in the Indian rupees and Indian rupee has almost depreciated last year. So, it has an impact in the rupee terms.

Okay, so you are importing in the U.S., in the INR, not in the U.S. Yes, so we are importing in the rupee terms in India.

So it is a listed entity.

So the contract needs to take place in the U.S., right? In the U.S. dollar, whatever you are selling in the U.S.

We do a yearly transfer pricing with U.S.A. And as a policy, we hedge ourselves by 50 to 60%, you know, every time. So there is a little bit gain, which was, you know, unhedged. And we have, you know, we have the gain in this of Forex.

Okay, just the follow-up question, if that application of the dollar hasn't been happened that much, so what could be the... The impact in the sales volume growth, as well as the sales value.

Normally, what happens, you know, as a strategy, international strategy, we cover the raw material also roughly 70-80%. What we have seen, you know, if rupee depreciates, then the local cost also. You know, goes up. So, inflation also covers that. So, more or less, you know, if you see, you know, if your question is around that, you know, if this rupee has not depreciated, then the profit remains the same. So, the answer is then inflation in the commodity also has not come.

Okay. Fair enough. Thank you for answering. Thank you.

The next question comes from the line of Yogesh, an individual investor. Please go ahead.

Hi, good afternoon, everyone. Thanks for giving me the opportunity. So, I was trying to find a mention about the freight cost, the recent impact in the last bottle. So, my question specifically is, by how much percentage has the price increased for the freight from Q4FY25 to Q4FY26? Has there been any disruptions in shipping through the conflicted zone?

Mainly the disruption, Sachin, you can add into, the Europe has been the most disrupted. The prices have gone up. In U.S. and other markets, at the moment, you know, there's not much disruption in freight as compared to last year. But Middle East, which is not our big business, the prices have gone by 10-15 times.

10-15 times.

Yeah, like, you know, Dubai was $200, now $2,200. Jadda was $700, $800, now $2,600. So, it depends, you know, and there is a big disruption in the delivery also in the Middle East.

Understood, sir. Another question, if I may, please. Yes, sure, sure. In percentage terms, how much is the change in the realization per kilogram of our main brand, Darvath, in India, and then the royal brand separately in the U.S.? I am asking this in context of pricing power.

Sir, Ritesh can tell that, you know, what is the quantitative growth and what is the value growth?

So, last year, both the quantitative and the value growth is almost at par, but we've seen improvement in our product mix, our most premium SQ, so 2x growth. Compared to, you know, the whole consumer bag business. So from that perspective, we are working on improving our product mix, which drives better gross margins.

Okay, thank you. That's all from my side and my good wishes and very best luck to the company.

Thank you. A reminder to all participants that you may press star and 1 to ask a question. The next question comes from the line of Anubha Mukherjee with Persistent Capital. Please go ahead.

Thanks for the opportunity.

Sorry I was slightly late in joining the call and this might have been discussed.

Sir, can you share what is the trend of like pricing or realisation in the international market?

Like, is there a like price increase you have seen for Basmati? As far as, you know, domestic price are concerned, that has gone high from season 20 to 25%. But as far as international price is concerned, that the deal is, all are done 85% in the season only. So, whatever the 10-15% left, you know, trading is left. That has seen, you know, 15 to 20% higher prices than the season price. I hope that answers your question.

Yes, sir, very much. Answer, the domestic price, like you mentioned, has seen a frequent increase, 25%. So, will that be like, like, will that only suffice to like, We will take it from maybe higher procurement size this year or we will be able to improve our cost margin because of that.

If I should correct me correctly, prices of paddy has gone up, that's the point?

Yes, of course has gone up, so there will be further improvement in the gross margins in the coming years.

In absolute terms, the gross margin will be more, yeah.

Okay, okay. Thanks, that's all.

Thank you. The next question comes from the line of Yogesh, an individual investor. Please go ahead.

Hi, everyone again. I recued myself to ask another question which I forgot earlier. Regarding the insurance case that was going on, in simple terms, because I'm an individual investor, I don't understand the nuances of the legal terms, but in simple terms, if rupees 100 was expected to be received, including the interest over the years. For the Bhopal case, how much is it already on the books and how much more is expected and likely when?

Okay, I will tell you. So the lower court and as well as high court and supreme court has asked insurance company to give us money against bank guarantee. So that we have got, we have given the bank guarantee. But in accounting, you know, no accounting has been done, whatever the gain is, you know, like our books. 136 is outstanding with the insurance company, where we have got 250. But we can't do the accounting till, you know, the final verdict will happen, which is in the June. I hope that you do. Yes, sir.

It greatly does answer my question. So, you mean to say that, sir, is the amount in an escrow account?

So, it is, in fact, not in an escrow account. We have that money. So, it is the court that has asked for the bank guarantee against that amount. So, we have that amount. Because the bank guarantee was to be given, we have deposited an FD amount equivalent to the bank guarantee amount. So, that is basically an FD account. Very well understood, sir.

Yeah, very well understood. Thank you so much.

Thank you. The next question comes from the line of Saurabh area in Samikshar Capital.

Sir, thanks for the opportunity. I just wanted to ask some guidance on the going forward CAPEX. So, if you can guide me, net asset term figure or say KPIX as a percentage of sales figure, because as we keep on growing at a rate of say 14-15%, so we'll have to have more KPIX. So, going forward, can you give me a KPIX guidance?

Yeah, so this year we have spent 330 odd crores. And the next year also will be in the same range. So, this is the broader guidance from the CapEx. So, we don't calculate on the percentage of revenue. We calculate on the, you know, the production tennage.

So, if you can guide me a net asset 10 or a gross asset 10 number.

Basically, what we are telling this year or the coming forward year, because there was certain one-off built-up of the spend. So, on a year-on-year basis, you can't tie up with that number, because CapEx for this year might service for the next two, three years. So, that way, it goes like that. On a conservative or a basis, you can tie up with the amount of depreciation, what we have, that will be invested in the CapEx. So, almost on a long-term trajectory itself, 250 crores of CapEx each year, that will be done. So, this year or the previous year, we invested because we are building a capacity for next two, five, three, four years. So, that will be there.

Okay, perfect. Thank you.

What happens is that every year we grow by 60,000 tons, and there is a formula that you can buy 3 crore per ton. What did you see? Every year we grow 50 to 60,000 tons of rice, so if we build bad rice capacity, So, the thumb rule is, you know, it's a 3 crore per ton ka paisa lagta hai.

Okay, and currently what is the total capacity ton rice which we have?

Okay, so we have, in terms of milling paddy to rice, we have... We have 8,000,000 capacity in India. I'm talking about Indian specifically. Okay. And we have roughly 8,000,000 capacity.

Okay. Okay. Thank you, Darius.

Thank you.

Thank you. The next question comes from Abhishek Mathur with Systematics. Please go ahead.

Yes, I thank you for the follow-up opportunity. Just wanted to check in the domestic market, this regional rise is an opportunity that we have talked about in the past. Can you give an update on that? You know, what is now the sales level that we have from this segment? How is it going? That would be helpful. Thanks.

So, it continues to grow in the last financial year at a higher double-digit growth. So, it's approximately now around 170 odd crores in revenue which comes out of our regional rice portfolio. And it will continue to remain our focus and we'll continue to grow this.

All right. And lastly, just a clarification. The normalized margins that you have presented for the full year, they don't incorporate the impact of your higher spending on ANP, brand building, or the higher level of UK investments, right? They are only adjusting for the US tariffs and the accounting adjustment. Is that correct?

Correct. You are absolutely right. That accounts for only for the tariff and the US.

So, sir, therefore, the slight 40 basis point reduction in the operating margin that we see from FY25 to FY26, that would be on account of the higher ANP and the UK investment?

And partly because of the tariff as well. The tariff, if I talk about the passing of tariff to the end consumer and building up of the inventory and UK and organics, that is the reasons for lower margins. or party basis change in the margins.

Got it, sir. Thanks and all the best. Thank you.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

On behalf of the management, thank you. On behalf of the management of MPCs Limited, we sincerely appreciate your participation in our post-learnings calls. We hope we have been able to introduce your queries and provide clarity on the performance and outlook. For any further questions of folks, please please reach out to me or our investor relations partner, Ernst & Young. The team will be happy to connect with you offline and assist with you any additional information you may require.

On behalf of Motira Natural Financial Services and LD Foods, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.