Regaal Resources Limited (REGAAL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Regal Resources Ltd. Q1 FY27 Earnings Conference Call hosted by Arihan Capital Markets Ltd. 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-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Dipali Kumari from Aryan Capital Markets Limited. Thank you and over to you.

Thank you. Hello and good morning to everyone. On behalf of Aryan Capital Markets Limited, I thank you all for joining into the Q1 FY27 Earnings Conference Call of Regards Resources Limited. Today from the management, we have Mr. Anil Kishorepuriya, Chairman and Managing Director, Mr. Karam Kishorepuriya, World Time Director, and Mr. Saikot Chaturjee, Chief Financial Officer. So, without any further delay, I will hand over the call to the management for their opening remark. Over to you, Anil.

Thank you, Dipali, and good morning to all the participants. Before I hand over the call to Mr. Anil Kishopuriya for his opening remarks, I would like to draw your attention to the SAF Haber statement included in the earnings presentation. I request all the participants to kindly review the same and have a good look at it prior to the commencement of the Q&A session. Thank you, and over to you, Mr. Kishopuriya. Thank you.

The centerpiece of this phase was the commissioning on 26 May 2026 of a doubling of a crushing capacity from 825 metric ton per day to 1650 metric ton per day alongside a new liquid of 180 tons per day, a martyrexine powder facility of 50 metric tons per day, an expansion of a captive co-generation power plant from 7.1 megawatt to 15.8 megawatt. Together, these investments regal as the largest maize red milling facility in eastern in India. Importantly, this expansion represents far more than an increase in package. It strengthens our ability to capture value across the maize processing chain, broadens our product portfolio, and allows us to serve a wider range of applications and customers. Against this, we are pleased to report a strong start to FY27. Operating income from the quarter stood at $202,000. Value-added grew 30.3% year-on-year to 80.53 crores, with value-added margin expanded to 39.8% from 25.1% in quarter, driven by decisive shift towards higher margin, manufacturing-led revenue. We also continue to deepen our international footprint, contributions of exports more than doubled to 10.4% in quarter-1.27, from 4.9% in quarter-1.26, reflecting growing acceptance of our products across international markets. With our expanded capacity and enlarged products, we need to enter new geographies, deepen existing relationships, and build a more geographically diverse revenue base. Looking ahead, our focus is on further strengthening and diversifying our value as a product portfolio. During February 27, we plan to enter our new derivatives including dextrose and hydrose, dextrose monohydrate and hydrol, while expanding beyond our existing dextreme, edible starch range into specialized modified starches, such as catonic starch, carboxyl, phy starch, predial starch, and spirit starch. In parallel, we are building out the supporting infrastructure for this growth, with an additional 50,000 tons of growth across two new silos, a 50,000 square feet base go down, and a 1.6 million megawatt methane gas-based power plant. With the major investment cycle substantially behind us, our attention is firmly on translating this enhanced capacity into higher utilization, a richer product mix, stronger capital,

and sustainable long-term value for all our stakeholders. I would like to hand over the floor to Mr. Sehkar Chathaji,

our CFO, to take us through the financial performance for the quarter. Thank you, Ajit, sir.

And very good morning. The Q1FI27 was a quarter of transition. The operating income for the quarter stood at 202.15 crores, lower by 18% year-year on account of a deliberate reduction in low-margin trading activity. The contribution from trading fell to 3.3% in Q1 FI 27 from 19.5% in Q1 FI 26, which resulted in an improvement in our profitability with value-added growing 30.3% year-on-year to 80.53 crores and value-added margin expanding by 1,477 basis points to 39.8%. This improvement floats to profitability. The operating EBITDA goes 26.6% year-on-year to 30.98 crore, with EBITDA margin expanding 540 basis points to 15.3%. The profit after tax grew 47% year-on-year to 13.63 crore, and FAT margin improved 291 basis points to 6.6%. Operationally, May's cutting rose to 69,689 mt from 64,770 mt in Q1 FY26. The capacity utilization of 71.4% for the quarter should be viewed in the context of commissioning and integration of the doubled capacity. Integrating the expanded plan-required plan shutdown days during the quarter, which temporarily lowered utilization. With major commissioning and integration now complete, we expect utilization to improve progressively from Q2 FY27 as incremental volumes contribute more meaningfully to revenue. Our working capital position reflects the scale and timing of our expansion. The cash conversion cycle stood at 130 days, driven largely by higher inventory levels built to support the expanded 1650 metric 10 per day capacity. As the incremental capacity was commissioned only toward the later part of the quarter, the corresponding revenue contribution had not yet fully flowed through, leaving inventory elevated relative to the current revenue base. We expect inventory days to progressively normalize as utilization ramps up, and the higher capacity translate into incremental volumes and revenue in the coming quarters. It is also important to note that inventory days are seasonally higher during Q1 and Q2 as we procure maize in advance for future quarter requirements. This seasonal effect is more pronounced this year, given the significantly higher creshing capacity and the larger volumes that we expect to process in the coming quarters. On the government sheet, the debt gets to at 735.32 crore, reflecting the funding of our expansion program as well as seasonal procurement of raw material. Importantly, all debt raised towards the new CAPEX qualifies for interest intervention under Bihar Industrial Investment Promotion Policy, meaningfully containing our effective cost of borrowing and supporting the economics of the expansion. Of the total project outlay of approximately 664 crore, around 552 crore had been incurred as of 30 June 2006, with the major phase of CAPEX cycle now substantially behind us. As the expanded capacity enters their ramp-up phase, we expect free cash flow generation to strengthen, enabling greater reliance on internal accruals and supporting a progressive reduction in leverage. In essence, we are now transitioning from CapEx-led phase to a phase of tax generation and deleveraging, supporting our expanded capacity, stronger product widths, improving operating leverage, and disciplined capital allocation. This provides us with a strong foundation to scale the business while progressively strengthening the balance sheet. With that, I would like to open the floor for questions. Thank you.

The first question is from the line of Shivam Gupta, Femtonitra Asset Managers. Please go ahead.

Hi, sir. Thank you for the opportunity. I want to know if Kishan Guns' capacity is at 1,650 tons, what utilization are we running at right now, and by when we see us reaching a comfortable run rate on these new lines?

At the moment, we recorded, our plan started, the expanded plan started only in June 1st, we recorded on 26th May, but we started about 1st second of two operations. So, of course, we have already seen better the dapper and the utilization is on the increase, and in further days, we will go out quite expecting, because our earlier experience has been showing that we have done a very good utilization.

So, I am hopeful that within this year, we will be reaching maximum.

Can you give us a specific number?

Specific numbers are, we, last year we did about 2,65,700 some odd tons rushing for the entire year. This year, what our, what our, optimistic, like, realistic plan which we have done.

Your voice is breaking.

No, there is some noise which is coming, loud stop, but again it started coming, I don't know why it is coming.

Sir, I'll connect you again. Sir, please do that. Yes, sir, I'll connect you again. The management line has been connected.

Yes, the question was on something about the expansion, sorry, about the capacity. So, last year we did a crushing for 2,65,000 tonnes the entire year. This year, we're expecting that the crushing will go up above co-lactants in the entire year.

Okay, sir. On follow-up on this, like new capacity, how much is actually going towards the value-added, like liquid glucose and maltode exchange versus pain scale? Just trying to understand.

Last year, we had about 3% of our entire turnover as value-added products. This year, we are expecting it to go up to 20-22% of our entire turnover as value-added products,

including liquid glucose, is what you said.

And Q1 profit jumped around 47% year on year. How much it was because of raw material cost or it was due to operating leverages?

I would give this test. It was majorly towards operating leverages only. Operative cost is sometimes lower, sometimes higher, of course. But if you compare from the last year, I would say that it is basically because of operating leverages.

Okay. And Guja, Tambuja, and...

There's another point. Just hold on. If you compare to last year, last year there was about a trading activity of about 19% of the turnover of the first quarter. This year it has dropped to 3%. So the margins in trading activity, which everybody knows, is much, much more lower than the manufacturing margin. So that was one of the major reasons too.

Perfect. And one last, Guja, Tambuda and Santar also is adding specialty start capacity. Thank you. How are you thinking about pricing power over the years, over the next years?

Sir Gujarat and Buja is always on constant growth. And we also are there, we have also expanded our capacity from 180 tons to 80-25 tons. We have not never been, we have never faced a challenge for selling at all. And for this also, we have increased our export base, which is there in the financials, from 5% to 10%. And we are opening new markets all across South and West to sell our products. So that should not be a challenge.

Okay, sir. That's it for my sake. Thank you.

Thank you. The next question is in the line of Diwakar from Prudent Equity. Please go ahead.

Good morning. My question is on the EBITDA pattern. So, this quarter-hour EBITDA pattern was $44.50, and for FY26, we did around EBITDA pattern of $47.42. So, what is the sustainable EBITDA pattern you are looking for at FY27?

Sustainable at the moment, I cannot tell you, because we are at a time of transition, and that's a big, big transition from doubling our capacity, doubling our turnover and stuff. But of course, I know that it will be, and this basically EBITDA is basically on the economy, comes to economy of scale also. So I will not be in a very good position to give you guidance for.

And also, it is important to understand that this is a business where the prices influence the EBITDA significantly. So, I think it will be prudent to not guide on what can be the price tomorrow of the maize and the finished product, which is the combination which results in an EBITDA pattern. So, what we can definitely guide is that we are going to grow our production, and we will get operating leverage, and obviously, our EBITDA pattern relatively will improve, assuming that the prices which are standing today remain constant, and with the addition of value-added products also.

Yeah, because in the time of higher mid-pressure, you have always increased the EBITDA pattern, like from FY23, we say it was around 3,100, now it is around 47. So, I hope it is increased to, you know, 5,000 something for this year.

So, again, I want to reiterate so that the expectation is set right. EBITDA, per turn, is a function of the price prevailing in the market of the raw material and the finished product, which is not in our control. It is a function of our mix and our value added going up or going down, and it's a mix of the operating leverage. While the second and the third, we are very positively placed because our value add will increase and our operating leverage will come because of the size. But the first part, which is the prices of the Rommel and the finish wood, is not in anybody's control. Hence, we will refrain from giving a specific pertain EBITDA guidance.

Okay, no problem.

Next question is on the finance cost. So, sir, our debt has increased substantially, but our interest cost remains around 7.9% for this quarter. So, what is the normalized net interest cost for FY21 you are expecting, considering all the Bihar subvention interest?

One thing I'd like to bring to your notice that the term loan guest debt, whichever we are taking for expansion of the capacity and setting up the factory and plant, is all subsidized by the Bihar government, the industrial policy. And we have been continuously getting the subsidies on time. So, that is one of the reasons why the percentage, the term loan aspect, we will not be having too much, too substantial increase in the interest obligations.

Yeah, I know, sir, but what is the number? Can you give the number for FI 27? 27, FI 27. For interest cost, net interest cost.

Net interest cost will be...

Net of... Subvention?

The CFO is giving those numbers?

It should be around 39 to 40 quarts.

For 27 quarts?

First quarter it is 0. First quarter it is 0.

Sorry, but 25, 27, 40 quarts now.

So, if you see, it will remain more or less flat as compared to that of the FF26.

Okay. So, I would like to understand more on this subvention. So, you receive 100% subsidy of up to 20 crore of interest cashing, right? In our room, we can get up to 20 crore, not higher than that. So, sir, you must have exhausted this 20 crore, right, in the past also. So, yeah.

Sorry, sir. Please go ahead, sir. Please.

Yeah, so you get 20 crores. So my question is, are we drawing multiple loans for multiple capacity, let's say for, let's say for one second.

Yes.

Let's say for the, for, yeah, for the processing of 1650 that we did, we are drawing a different loan, and for the value added of liquid glucose, we get a different loan. So, you know, our subsidy increase, let's say 40, 50, 60 crores. Am I right, Yes, sir. Because that's the only way you can get these subsidies.

Yeah. You are bang on. You are bang on in this that we are deriving different, different loans for different, different projects and different capacities. But now this 20 crore rupees has been amended to 40 crores. But we will not be able to in five years. We have a speak for five years. So we will not be able to, you know, use the entire 20 crore or 22 crore maximum. So that 40 crores at the moment is not meaningful for us.

When did this happen, sir? This 40 crores, when did this happen?

40 crores happened last year, sometimes in, last year means 25, 25, by 25 only. Sometimes in December, November or December, that policy had, amended policy had come, and we are still awaiting for the final policy from the Bihar government.

Okay. So, sir, it's really good. You know, as soon as this happens, you can update your presentation and, you know, put out a package also.

Yeah, my last question. Our old project of 8 and 25 cents, the Quintuco's MDP, was registered under the old regime. It was done in 24. So, we took it as 25, as 20 crores only, but now when it has started, now the government has said, no, we will go up to 40 crores also in the projects approved earlier also, whose production had not started. So, we are waiting, but that is not yet cleared. So, we have not mentioned that in our presentation, because it is not cleared by the government yet.

Okay. One last question, sir. So you said you are expected to do around 4 lakh metric tons. So we will utilize most of the capacity this year, right? So what is the trigger for FY28? I mean, your team met with, you know, ministers, some ministers in Karnataka for some capacity, right? So are you planning to, you know, some capacity expansion in southern states or what is the plan, sir, for FY28 and going forward?

Yeah, it's too early for us to talk about another next expansion. You're just stabilizing this one, so we'll hold that on at this point.

Okay.

On the participants, please, let's stick to your questions to two, please.

Thank you. Ladies and gentlemen, in order to ensure the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request you to rejoin the queue. The next question is from the line of Rohit Sinha from Suniti Securities. Please go ahead.

Yeah, thank you for taking my question. So, just one clarification on the volume side. We did close to 5,000 additional volume in this quarter. So, what was the exact volume for the previous plant this quarter, and how much additional volume we did in this quarter? I mean, I'm just trying to understand whether the last year volume was remaining intact, or there was some low.

The quarter one, we have increased by about 5,500 tons. 5,500 tons, 8%. It was 64 and we have gone up to 65,000, 70,000 tons in quarter one. In quarter two, if all the things go well and there are no, again, we don't have any issues in stabilizing and integration and everything, so we will go at about 100,000, 110,000 tons in quarter two. And if we are talking about the entire quarter year, we have taken a very, very, very, I will say a very restrictive approach of about, not more than about 4 lakh tons, but testing it. That should be the minimum which we should be having.

Yeah, understood, understood. And, sir, this additional 5,500 roughly, as we were planning that the new capacity would be largely focused on the evaluated side. So, can we consider that this all new 5,500 was for the maltradexin or teftoside production or it was?

Yes. Yes, sir. This was basically the entire capacity was used in liquid glucose and very small part of maltodexin powder.

Okay. Okay. Got it. And sir, in terms of pricing for the starch side, could you help us to understand the trend from Q4, FY26 to Q1 and how right now it's spreading?

Q4, FY26 to Q4, FY27, the conversion, the net conversion rate between maize, what we call value addition, between maize to starch has become better compared to that.

But in terms of starch pricing, how has been the trend for that? I mean, any percentage we can indicate that how much percentage the price increase was there or how much we have seen in Q1?

I have to calculate that, sir. I have not, from this last starch to this

Mr. Rohit, I would request you to rejoin the queue for a follow-up question. Ladies and gentlemen, I request you to limit your questions to two per participant. The next question is from the line of Umkar Kadam, an individual investor. Please go ahead.

Hello, am I audible?

Yes, sir.

My first question is regarding what is the revenue mix going to be between domestic and export market going forward, and do we have any targets?

Sir, at the moment, the revenue mix is 10%, which was 5% in the last quarter, and of course, we are working on a lot of other opportunities of new markets for exports, which we are working, which we are doing. My team has already visited, and again, we are attending fairs now, which is It's scheduled to happen September. I am also going personally to all those fairs. So, I am very, very hopeful that it will increase. But a target and guidance will be difficult for me at this time. But I don't know how much will reflect if I have passed. Doubling has happened, so it should be more than that. But how much more to the time I don't get the orders and I'm not able to supply, I will not be knowing about it.

Okay. My next question is regarding, does management have any plans to turn co-products into higher market products, going up the value chain?

So, co-products, there is, with co-products, turning co-products into high value added products, there is a very small, thin possibility in which you can just go for a feed plant. But at this moment, this is completely different line for us in getting into animal feed. So, we have really not explored, okay, what is the situation, what is the margin, what is the valuation that you will be getting.

Okay.

Thanks. Please stay on the line.

The next question is from the line of Madhur Rathi from Counter-Cyclical Investments. Please go ahead.

So, thank you for the opportunity. Sir, firstly, I wanted to understand on our inventory. So, so, as Bihar is a single crop or single harvest season, do we, hello?

Yes, yes. Hello?

Please, please.

Yeah. So, so, as Bihar is a single crop region versus two crops for some other geography, so, so, do we carry higher inventory or do we procure maize from some other Sir, is it sufficient to operate at the 75-80% utilization that we are expecting for the 16-50 metric 10 over the next three quarters?

Sir, we, as a company policy, till 25-26, we were basically procuring maximum of the maximum, I mean, about 90% or 95% inventory we took to procure during the Rabi season of April, May, June, July. And this year also, we have procured at about, I would say, to about 80% of our inventory we have procured during the season of Rabi, during April, May, June, July. And this time, we are very small, about 10-15% we have kept to procure it from other states of Maharashtra, NPO, Karnataka, where maize is abundantly available. And we now, Bihar also grows Rabi Kharif crop in certain pockets, which we had never explored the past 6-7 years. Now we are exploring to buy those Kharif crop. It's not a big crop, it's about 6 lakh odd tons crop. So we are exploring that. Some parts, say about 10% of that or 5% of that, we will start exploring from the Kharif districts also.

Got it. Sir, also, if you would help us understand, is there any low-cost advantage that we have versus industrial either? And, sir, you mentioned that the means to start conversion rate is much better in FI27 versus FI26. So, why is that Bihar's crop superior to any other regions, if you could help us understand on that, sir?

No, sir. Bihar crop is the best crop in the country, Bihar and Karnataka, because the recovery of the finished products from that maize is very high, because Bihar ke basically jo danay hotay maize ke, that are very large, kaafi baday hotay. It's about 290 to 180 grams numbers per 100 gram, whereas of different states, which I mentioned, are 350, 400 grams. So recovery is much, much better. Quality is much better. And what I told you about, we are, as a model, we procure a lot of major, major quantity of our requirement directly from farmers, Which is of no logistics cost. These materials come to our doorstep, FOR, including freight. And because Bihar doesn't have a large, very large, inherent consumption of maize, so all this maize is sent outside Bihar to other states, other companies and other states.

So, we get at a much, much, much cheaper rate. Got it.

Sir, just a final question from mine. Sir, considering the value-added products mix increase in this year, sir, what kind of EBITDA margin can we expect? And, sir, this 80% inventory that we have procured, sir, what is the pricing per kg that we have procured this at?

Sir, the pricing of the inventory which we have procured, we have kept it in mind that when the honey crop comes During the November, December, January season, we will be competitive with our competitors, basically. We will compete well with them. And regarding the EBITDA margin between the, of course, the EBITDA margin, sir, will, of course, improve. That is what understood the improved hoga. But what will happen, what will be modified starch of catani or of carbo-lithyl or of dextrose, this is still the exploring. Because it's also seasonal sometimes, like liquid glucose is seasonal from September to March is the major time which we are able to sell. So that will only come out once we do the experience

that we have for one year, then we'll be able to tell you better.

Mr. Madhur, I would request you to rejoin the queue for a follow-up question. Ladies and gentlemen, I request you to limit your questions to two per participant. The next question is from the line of Harsh Saraswat from Srujan, Alpha Capital. Please go ahead.

Hello. Hi.

Good morning, sir.

Am I audible?

Yes, sir.

Sir, I wanted to ask on the crushing volumes you would do for the FI27. I think you mentioned it in the call. I missed it.

Yeah, it should be above 4 lakh ton, sir.

4 lakh ton, okay. And sir, on the maize prices, I wanted to ask, the last time when we had a con call, the prices of maize were around 20 rupees. Now, it has, I think, jumped to 24, and it is almost, you know, near the peak of 26, 27, which was it last year during the same period. So, what kind of impact those prices can have on us? I remember industry was struggling at those prices.

Sir, if the maize prices, which you are saying 24 rupees, I am still getting maize at my doorstep delivered at 22.5 or 23 at the most. A very, very good quality of maize, need quality at 23, first of all. And so, this May's prices, there always have seen a trend in Bihar that the May's prices, I don't know what is the reason, but the May's prices goes up from September, in September, which again starts softening down in October. So, this was last year also, and this was happening this year also, and this has happened at earlier occasions, at earlier years also. So, I don't see at all the May's prices going up very, very high. Though we are holding a substantial good stock for the entire year, we are holding very, very good stock. So, if it goes high also, we don't come into a question, it's not a concern for us. So, if it goes high, of course, the prices of starch will go high. So, we will be at a better situation for this year at least.

And sir, how are maize prices in India versus the world, are exports still viable, or is there any change in that scenario?

Sir, the maize prices, if you compare the maize prices to maize prices in the world, the maize prices are quite low compared to the Ukraine price, to the USA price and all, and the exports of starch worldwide is still very, very competitive. As per our calculation, the association's calculation, 24 rupees, 25 rupees to come in, still the Indian exports will be very, very competitive.

Got it. So then, in this year, what will be the peak date for the company, and will it come in H1 balance sheet, or it will be in H2?

Yeah, it is already peaking, and I think it will be in the H1 balance sheet, and H2 it was in particular. Our working capital requirement is highest in the H1, so that's why the debt is peaking, and definitely it is going to come down when the H2 comes, so it will go down by that.

Basically, our whole example has shown that our working capital requirement comes down to about 40%. Say, for example, we are 100 crore rupees working capital debt. So, it comes down to 40 crore rupees by quarter four, in quarter four.

Got it, sir. Sir, any CAPEX plans for FI27?

Sir, at the moment, we want to stabilize because this is a very, very big expansion which we have done. So we want to consolidate and stabilize this, come to our experience of 90-95% capacity utilization, come to those figures, get into the entire value added basket, market them at good prices, improve our results, decrease our debt, and then start thinking of, you know, Of course, plans are there, but they'll start thinking that we have to do it or not, but we need to think about it.

Got it. Thank you so much and all the best.

Thank you.

Thank you. The next question is from the line of Surya Narayan from Sunni V Security. Please go ahead.

Hello. May I be able?

Yes, sir.

So, thanks for the opportunity and Congress for good set of numbers. So, just to understand from your side that now what kind of, you know, production loss happened in the P1, that is number one. Number two is that now what kind of the evaluated products that has been introduced in the second century of the capacity expansion, whether those capacities have been stabilized, if yes, then obviously, then what is the kind of, you know, capacity utilization run rate?

Sir, first of all, for the shutdown days, This is why for the integration, we have lost at about 9 days for the integration of both the plants during April and May. So if we think about 800 tons a round of things, 9 days into 800 days, 7200 tons we have lost in this. Talking about the value-added products, liquid glucose 1 product, which we have started now doing at about 70-odd percent, We have reached of the entire capacity, and this is, again, on the increase only. Myrto-addiction powder, it is yet to, because, you know, myrto-addiction powder, all the samples and everything has to go to a lot of places, and the MNCs and all. So what customers we had, we are doing, we are catering to them, which we own customers. New customers are yet to, we are developing it. Well, they've already developed, few orders have come, but myrto-addiction should take about two to three months more To come to our target level. That is one thing. And what you spoke about, if the prices are, this is basically, I always tell everyone, this trade, this manufacturing and this trade of starch is not a trade which you will see percentage-wise. This is a trade of a whole number trade. Because if May's prices go up, starch prices will go up. If that comes down, starch prices come down. But your profit and your EBITDA, if everything goes okay, that's why we are not going to be fine. So, again, next year, if the, for example, the starch price will go up to Rs. 40, that doesn't mean your EBITDA will go up to 6,500 or 7,000 rupees. That's not the case.

So, regarding the valued products, which among the products are the most, you know, margin-accretive, be it dextrose-hanated or dextrose-manuated or hydrol? Which of the products have bigger potential so far as margin is concerned?

Sir, margin is concerned. Our dextrose will see the light of the day by fourth quarter, before March, in the fourth quarter, basically. The martodexin powder, of course, is a higher margin, higher margin as well as higher evaluation also. So, but the quantity is less, whereas liquid glucose is giving 180 or 200 tons, martodex and powder will be 50 tons. So, there, and the flurry of the, the flurry of entire basket of modified starch, which we have started, which we have already started trials, and which will be completely online within September. So, those products are very, very high, but again, every product is a small requirement.

So, at what level do you see the value-addition products standing in FY28? I believe FI-27 will be difficult for you to gauze, but FI-28, what kind of percentage you are envisaging?

Sir, our capacity and everything which we have built up for value added and stuff, capacity shows at about 50-50. Starts 50%, starts 50% value addition.

But from a guidance point of view, I think you can take a 35% kind of...

Hey, capacity. So, automatically, 35% will happen. So, turnover, automatically, 35% will happen. Total turnover.

So, this year, this year, it will be, you know, standing somewhere around 20%?

Sir, let me not give you a complete figure or a guidance, but of course, from 3% we have already converted us to, it's likely, sir.

It should be, sir. It's likely, it should be. Okay. Thank you. Thank you.

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

Yeah. Thank you for the opportunity. Go time. What are you doing?

So, a little bit, if you can just increase the volume.

Is it better now?

Yeah, it's better now.

Yeah.

So, my question is, our share of value-added products

is going to increase from 3 and previously we had gathered to 25 this year. And what is the go-to-market strategy for the same? And what kind of investments will it involve?

Sir, go-to-market strategy is, we are making those products immediately at the moment. Now, when we start with September, it will be the value-added add-ons. The same circle, most of them, I would not say 100%, about 80-90% of them, 80% of them, are going into the current channel only. The dealers and the institutions, if you're making catanic starch, We may take any starch for all the paper mills which we supply native starch to, or oxidized starch, again, to those customers which we supply to our same customers, paper mills. For example, pre-gel starch. Pre-gel starch, we have food industry we're supplying, so we will be supplying to food industry, but again, this pre-gel starch is also in the commercial starch industry. One usage is batteries, so that will be new for us, those things. So maximum of them, 70-80% are the old channel. Now, if we have 70% in our hand, developing another 20-30% will not be very difficult. For carboxymethyl starch, it's oil drilling. So that is only 20-30 tons of 1,000 tons of 1,100 tons of starch, which we'll be making in full capacity. So, it is pretty good, which we have. Or, we have new customers also, I just don't want to throw the names on this thing, but we have acquired big, big customers, big MNCs, India's biggest MNCs, whom now we are supplying directly. We are billing them to get them directly. We are not at all worried about that.

And so, it won't involve any additional investment. So, whatever the cost base, it won't increase from here.

The cost base towards manpower or marketing team. So, this entire capitalization happened together as one project. If you want the breakup, I will let my IR team know, and they will give you the breakup.

And we were talking about some white labeling of some products. Is that on?

Yes, sir. It's just completely on. White labeling base has increased. Few more customers have come in. Again, the India white brand has come in, and the customers which we are doing earlier, they have increased their products. Both things have happened.

Thank you.

The next question

is from the line of Prime, Sony, an individual investor. Please go ahead.

Hello.

Yes, sir, your audible. Yes, hello.

Hi, thanks for the opportunity. Sir, my question is on the EBITDA margins. Like, everyone has I will take that, Sanjeev here.

See, as we explained at length, the margins are a culmination of three variables which we must remember. The first variable is the market prices of the maize as well as the finished product, which is not in our control. The second is the extent of value addition that we do on our products. So as the percentages increase of value add, our margins are obviously bound to increase. And the third is the scale. As we scale up our production, we will get operating leverage. Now, while the second and the third is happening and we've already guided, you know that this year we will do about 4 lakh tons, And then we will do about 20% or whatever this year, as far as the value add is concerned. The first is not in our control, hence to give a firm guidance on the percent EBITDA or on the percentage of EBITDA margin is actually trying to, you know, get into something which is not in our control. Having said that, if you compare Apple to Apple from same price, same price level to the same price level, obviously we'll do better than this because of the operating leverage and the value add. This is the best that I can explain you as far as the margins are concerned.

All right, sir. All right. Sir, can you give me a break-up on your marketing teams and sales teams? Since your employee count is 7 under 9 teams, can you help me with the break-up of the marketing or sales teams?

So, that's the detailed thing which you are asking. We don't have this at the moment ready with us, but it will be available with you, with the IRT.

So, they will provide it if you want it. They will provide it with you with entire numbers.

Thank you. Due to time constraints, we take that as the last question. I would now like to hand the conference over to the management for the closing comments.

Thanks a lot, everybody, for joining me early in the morning. I really appreciate. Thank you so much.

Thanks a lot. Thanks a lot for your support.

And thank you, Arin Kapil, for hosting the call for us. I really appreciate that.

And for taking the time to join the call. And we sincerely appreciate your participation and continued interest in the company. Should you have any further questions or require any additional information, please feel free to get in touch with us.

Thank you once again. Thank you.

On behalf of Arihan Capital Markets Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.