Not necessarily, they might actually be over-reporting their total expenses because of this, depending on how the price of paddy moves.
Scenario 1
If paddy price today is 100, but 6 months later it goes to 200, their stated COGS will be 150 (assuming equal volume purchased at both prices) however actual COGS will be 100, at least for the aged rice.
Scenario 2
If paddy price falls from 100 to 50, their stated COGS will be 75 however actual COGS will be 100, at least for the aged variety.
Looking at the movement in margins along with price of paddy at time of procurement will shed more light. Can someone share a source where procurement prices can be obtained? The company has only intermittently shared their procurement prices in concalls
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