Q1 concall notes
- Increase in margin due to increased efficiencies, softening in rm & freight costs
- New product launches like frozen curries like palak paneer for food service in restaurants, chole, dal lakhn ii, ghee : 500g, 1 kg, 2 kg
- Large cold storage capacity in New Jersey, faster fulfillment
- Ashoka growing at 40% in q1. 33% cagr. 200 cr
- Received listing nods from 3 discounters, 15 cues spread across uk, usa
- Standalone 17% growth
- Capacity utilisation in us warehouse: up & running last week. At Max cap we can do 10 containers. Full capacity utilisation right now.
- Margins : Q3, q4 have higher margins. Q1 low demand : people travel. Consol 18-22% type margins
- Capex : 50 cr stage 1, 30 cr stage 2 in fy24 & fy25. Greenfield project in Surat. 250 cr revenue. 3x asset turn.
- Aksa capital : demand is robust. Can maintain 20% growth rate at consol level
- Supplying to Walmart Canada since few years. Supplying to other large retailers too.
- Costco relationship trying to develop
- Got 2 large retailers in uk. 350 stores
- Talks going on with large retailers in usa. Ready by Q3 of this year
- 1.5 cr pli benefits in this Q
- Freight is 7-8% cost in standalone. 7% can remain for the year. Bottoming out already
- Other expenses include many heads. Some are fixed costs. Lot of focus on launch we are doing. Certain expenses we incurred for testing , presentation. Investment for future sales growth
- Sales mix : aata, rice were there in last year in distribution. Margins were high. Product mix is reason for low margin in distribution biz. 9-10% is steady state ebit margins in distribution biz. Unilever biz is negligible now
- Consol & india & adf food usa losses are in the subsidiary
- Kanav garg : garg advisors. B2B fell. All our brands grew from fy21 to fy23. B2B can also come.back next year. They were sitting on lot of inventory
- Distribution: really helped grow our own brands. Utilizing distribution to grow own brand. We are in investment phase. Fixed costs high. Margins can increase after the sales increases in distribution biz
- Pasta paste & sauces are also in same range as other products
- Promoter pledged share holding. 8-10%. This was pledged last year. 5% of total shareholding. Raising funds for prescription of preferential share warrants. Soul brand doing well in Ahmedabad. Market karna chahiye
- It’s present on big basket, Amazon
- 50 cr spent in fy24 & fy25. Phase 2 after we start selling products from phase 1
- 1 more capex. Adjoining plot we have bought. Freezer capacity. State of art cold storage
- Brownfield is faster to ramp. 12-18 m to set up Greenfield project
- 30% debt. 70% from equity.
- Teleric foods markets soul brand
- Accotera , patanjali contract is for 5 years
- Process in research: sales team in all markets. They go to market.daily. Get feedback from distributor
- Middle East brands camil, aeroplane growing at 20% every year
- Looking at acquisitions and have evaluated middle East too
- 700 store , 400 store in uk for large retailers. Launch in 450 stores, 170 stores
- Standalone 25% cagr, 15% cagr in distribution, consol 20% cagr
Disclaimer: Studying, have a tracking position
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