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Patanjali Foods Ltd
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Ladies and gentlemen, good day, and welcome to Patanjali Foods Limited Q4 FY '24 Earnings Conference Call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call.
These statements are not the guarantees of future performance and involve takes and uncertainties that are difficult to predict.
[Operator Instructions] Please note that this conference is same recorded. I now hand the conference over to Mr. Sanjeev Asthana, CEO from Patanjali Foods Limited. Thank you, and over to you, sir.
Thank you very much, and good morning, and welcome. Thank you for joining us today for Patanjali Foods Limited's call to discuss the results of Q4 and financial year '24. I'm accompanied by the company's CFO, Mr. Kumar Rajesh, as well as Mr. Priyendu Jha and Mr. Chintan Kotak from the IR team, along with our Investor Relations advisers, Strategic Growth Advisers team. For your convenience, we have uploaded the result collateral on both the stock exchanges and the company's website. Our initiatives in every area have set a solid foundation for FY '24 and are keeping us on track for an even stronger performance in FY '25. I'm pleased to announce that we have achieved strong results across multiple financial metrics in the fiscal year '24. Our revenue from operations reached INR 31,721 crores while our EBITDA stood at INR 1,518 crores, maintaining a healthy EBITDA margin of 4.75% to total income. Our strategic adjustment in our business mix led to a fourfold increase in the contribution of food and FMCG segment between FY '22 and '24.
During the year, we achieved a PAT of INR 765 crores with a margin of 2.39%. As part of our strategic approach, we conduct pilot launches for new products to gauge market viability. Upon receiving positive results and encouraging feedback from the pilot launches we proceed to introduce the products to broader markets. Notable pilot launches throughout the year have included millet-based digestive biscuits and the Nutrela Maxx Millets cereal range. Branded dry fruits under Nutrela MaxxNuts range and Looking ahead, we have a strong pipeline of diverse products ready to meet the evolving demand of consumers in the upcoming year. The impact of our advertising expenditures are evident, reflected in an increase in volumes. The company is dedicated to further strengthening its brand building efforts. The company's growth is fueled by ongoing product innovation and premiumization across various categories and price points. This allows us to keep pace with consumers constantly evolving preferences.
The recovery of demand in rural India has commenced, and it is steadily gaining momentum. With our extensive reach in Winterland, we are actively working to further stimulate this demand. Transitioning to our strategic updates. We are in the process of shifting our focus to high-margin FMCG business. As part of this strategy, we are evaluating the acquisition of Patanjali Ayurved Limited HPC portfolio, encompassing hair, skin, dental and home care products, which includes renowned brands like Dant Kanti the dental care, saundarya in the skin care, Kesh Kanti in the hair care and super dishwash and herbal mosquito-repellent.
Our committee has been formed to meticulously examine the initial proposal. We are assessing this proposal for its strategic synergy across various lab tests with the aim of creating long-term value. However, it's premature to comment on the specifics of the deal at this stage.
Additionally, we have recently founded 2 wholly owned subsidiary companies in India, Contemporary Agro Private Limited and Rishi Krishi Farming Private Limited. These subsidiaries are committed to providing extensive training programs for farmers with the goal of improving agricultural practices and promoting sustainable growth.
Coming to our quarterly performance in the edible oil business. In Q4, the edible oil segment recorded INR 5,588 crores in revenue, making a 1.9% Q-on-Q growth out of this INR 124 crores represents revenue generated from the palm oil plantation business. In Q4 FY '24, the volumes increased by 5% to 6 lakh tons, 6.04 lakh metric tons compared to 6.34 lakh metric ton in Q4 financial year '23. For FY '24, overall, the volumes rose to 24.99 lakh tons, nearly 23 lakh tons, reflecting a growth of 13.1% over financial year '23. This growth in volume was attained through expanded distribution reach and enhanced consumer offerings that we continue to offer.
The premium oil segment, including the Nutrela oil is flourishing, witnessing a significant annual growth of 26.2%, reaching 21,275 metric tons with an additional 20.6% year-on-year growth over Q4, totaling to 5,588 metric tons. This underscores robust consumer demand and Nutrela's expansion market presence. Ruchi Gold received the prestigious Best Brand Award in palm oil from the seminar and central organization for our industry entry, highlighting its excellent wins in the palm oil category.
During the fourth quarter, the cash market prices experienced a significant rebound, making a notable recovery from low levels observed in the previous quarters. The edible oil prices demonstrated a sharp upturn in Q4 with palm oil, soya oil and sun oil prices increasing by 17%, 10% and 6%, respectively quarter-over-quarter. The prices change between futures and physical prices indicated a close alignment for palm oil with both markets moving in tandem, minimizing their standards. However, soya oil exhibited an 11% divergence, primarily attributed to an increase in cash prices.
In the oil pump plantation business, the company is advancing its oil palm plantation on a fast-track basis with over 74,376 hectares in cultivation, involving collaboration with numerous farmers across 12 states in India. As of March 31, 2024, the share of palm plantation, which is under 3 years, stood at approximately 33%, marking a significant increase from around 19% recorded in March '23.
Furthermore, the company has established 14 new nurseries during the year, bringing the total nursery count to 40 to support the future expansion of the cultivation area. For this quarter, the oil palm plantation has generated a revenue of INR 124 crores. Our oil extraction rate was 18.65%, reflecting the efficiency in the FAB processing, continues to rank among the best in the industry aligned with global standards.
The oil palm plantation business represents a key avenue for long-term growth for Patanjali Foods, serving as a vital element in national development. It forms an integral part of our national endeavor, and we are committing to nurturing this business to contribute meaningfully to the nation's progress and prosperity.
Talking about the food and FMCG side. In this quarter, the Food and FMCG segment achieved revenues of INR 2,704 crores with an EBITDA margin of 9.6%. During the quarter, the food and FMCG segment accounted for approximately 32.57% of total revenues, maintaining consistency with quarter 3 performance at 31.27%. Similarly, on a full year basis, the food and FMCG segment contributed approximately 30% to total revenues, demonstrating an impressive growth of 55%.
The company's dedicated focus on expanding the biscuits portfolio has yielded significant results with new premium biscuit launches, our direct retail reach extended to over 1 million retail outlets and distribution to various standards. This segment achieved a remarkable growth rate of 22%, surpassed the industry growth of 80% CAGR. The biscuit volumes in substantial increase reaching 39,787 metric tons in Q4 compared to 34,614 metric tons in Q4 last year and 1.64 lakh metric tons in financial year '24 as opposed to 1.31 lakh metric tons. Our flagship biscuit brand both has crossed the INR 1,000 crore milestone in this financial leader. We expressed our gratitude for the widespread acceptance of our product. Similarly, nariel and crunchy coconut biscuits have received tremendous consumer response and registered double-digit during the quarter on a year-on-year basis.
Additionally, the recently launched premium biscuit range continued to garner positive traction among consumers. The direct retail reach has expanded to over 1 million outlets showcasing extensive market penetration. Nutrela soya chunks experienced a notable 7.7% increase in annual sales while reaching 37,710 metric tons. Nutrela range sales remained consistent with the previous quarter, standing at about INR 10 crores compared to INR 14 crores in Q3 of last year.
We closely monitor market trends and consumer preferences and ensure our offerings aligned with the evolving consumer demands. We recently relaunched Sports Nutrition on Nutrela Sports, establishing separate teams and distribution infrastructure. There has been a significant surge in e-commerce sales of Nutrela. In FY '24, the company's honored as a company of the rate by India Food Safety & Nutrition Summit. Overall, the nutraceutical segment remains an integral part of the business, and we maintain a positive outlook on its future performance. Patanjali maintains its employee-centric approach and continues to invest in its workforce. During the year, we introduced the PFL employee of stock option plan of 2023.
Additionally, for the third consecutive year, the company has been recognized as a great place to work. Offering a glimpse into the industrial landscape, the rural demand has surpassed urban demand for the first time in the last 5 quarters, with rural sales growth at 7.6%, surpassing urban growth at 5.7%. This research is in consumer activity and contributed to robust revenue, number target, increased government initiatives such as higher NSP and greater spending on The upcoming months show promise for the rural segment, supported by factors such as promising monsoon forecast, potential increase in new wages and farm incomes and broader macroeconomic conditions conducive to growth.
The extent of margin enhancement depends on the trajectory of price growth and further easing of input costs for more raw materials. With a favorable outlook as the global inflation is directed to ease. However, the volatility of crude prices remains a factor requiring close monitoring.
Taking a closer look at our financial performance during the quarter. Our revenue from operations in Q4 reached INR 8,221 crores, making a Y-o-Y growth of 4.43%. The total income recorded stands at INR 8,348 crores. Our EBITDA stood at INR 496 crores, experiencing a significant Q-on-Q growth of 27.23% and a year-on-year growth of 19.37%. This growth can be attributed mainly to the change in our product mix.
Our PAT stood at INR 206 crores with a margin of 2.47% vis-a-vis 2.72% in Q3 of FY '24. For FY '24, the numbers stack up as follows for the full financial year. Our revenue from operations stood at INR 31,721 crores, making a stable performance with a modest increase of 0.62% year-on-year. The total income booked at INR 31,961 crores. Our EBITDA was recorded at INR 1,518 crores at a margin of 4.75%.
Our tax recorded at INR 765 crores with a margin of 2.39%. We continue to support -- to export to over 25 countries with a value amounting to INR 323 crores. Our annual performance reflects the -- excuse me, the culmination of past strategic initiatives reshaping our company's revenue mix and profile. This evolution enhances the quality of our profits and introduces higher margin opportunities, ultimately delivering superior returns to our. The floor is now open for Q&A, and we are very happy to answer any of your questions that you may have.
[Operator Instructions] The first question is from the line of Bharat Shah from ASK Investment Managers. .
On the food portfolio.
Sorry to interrupt, sir. your voice is not audible. Your voice is breaking.
Bharat bhai, sir, your voice is slightly unclear. So I would request that maybe if you could repeat that question, please?
[Technical Difficulty]
It's still breaking.
The next question is from the line of Abneesh Roy from Nuvama Wealth.
My first question is on biscuits category. We have seen the market leaders see good revival in volume growth. And at some stage, it expects in FY '25, double-digit volume growth also to come or take. So I wanted to understand, are you seeing broad-based recovery in biscuits industry? And on the raw material of biscuits on wheat, you did allude briefly. So I wanted to understand last year's for wheat profit has been challenging. So this year, what is your understanding because still we are in the midst of the crop collection. But how do you see -- do you see that some level of deflation in wheat crop can happen y-o-y.
Yes. So no, very good question. So two parts. One is that our biscuit performance is actually generally an outlier overall because the volume increase and the revenue increase that we are seeing is both, of course, adding to the bottom line significantly. So for example, our margin from 9.3% last year, margins have moved to 14%. And as a threshold of the distribution that we have seen. So we're clearly seeing that the distribution base that we continue to expand, it is giving us a huge leg up in terms of building up the sales.
And we continue to target aggressively. And while the specific numbers annually, it is difficult to give. But broadly, we expect that we will continue to maintain between 16% to 20% growth on the biscuit front or the revenue side. There, we are trying to now go in for a better superior mix now. So good already plus INR 1,000 crores. The other biscuits are about INR 600 crores. We are expecting that goodwill will time to maintain its trajectory. And the premium biscuits will continue to grow. So we are hoping that our bottom line EBITDA margin at 14%, we continue to improve because to be on a certain point, EBITDA continues to kick up way better with the cost structure being same.
Coming back to the industry. I think largely growth has been fairly subdued for most companies. And you said the industry average was about 8%. But broadly, I'm expecting that the recovery should happen because the rural demand continues to show some positivity. And so that growth is there. And second is on the other side, the premium of the market, basically in digestive and cookies and cream crackers and others, there is an uptick. So I would be positively sort of oriented toward the biscuits as a range for most players. On the part of the commodity prices, I think oil prices have been extremely supportive through the year barring this last quarter when we saw an uptick that broadly supportive. The wheat prices, the crop has been good. The government both for the purposes of upcoming elections that we had and full consumer nitration has taken a very strong grip over the market in terms of controlling in multiple different based on the stock control orders on the private trade is not allowed to sort of speculate much making sure that the actual users using the buffer stocks to sort of continue to maintain in the marketplace.
But I'm expecting a reasonably benign sort of price outlook for wheat prices this year. And likewise, for sugar as well, both the global prices and the domestic prices are being soft. So overall, the biscuits industry with a 3-time ingredients, the oil, the flower and the sugar being supported. So overall, I think this year should be positive for most biscuit companies. And certainly, as I mentioned already, that we are targeting aggressive growth plans. We continue to expand distribution. And virtually every month, we're adding between 12,000 to 15,000 retail outlets to our expansion.
So we are pretty much on course to have an expanded reach or the best with that.
Sure. My second question is on the demand side. So we are seeing in Q4 the commentary of FMCG is turning positive. And we are seeing also in a few categories like oral care, good volume growth coming back, especially in South India. So wanted to understand your sense on the demand trends in FY '25, if I clearly rural was seen behind. But given you are also across many categories, how you see rural versus urban? And is South India in the recovery currently?
So clearly, two trends are quite visible that one is that rural from this Q4 onwards looks reasonably stable. I think after a difficult sort of a couple of quarters when the demand was subdued. I think Q4 onwards, it looks very positive overall. So in general, we are bullish. And if you see rural and the growth pattern and rural is sort of the uptick is way better. In terms of the regional wise uptake is -- we are not per se witnessing anything in particular that Southern India are doing better or otherwise. I think the broad-based recovery that we're seeing in the markets and which is reflection of the stronger sort of the rural incomes on account of the boot straps, the better MSP administration that is happening. So overall the trend is good. I mean South is, of course, has a sort of a little ahead of when the demand upsurge happens typically, South tends to demonstrate better uptick sooner. So that is there. But I don't see any major difference per se between the respective regions.
Sir, and last quick question. So recently, last 1 or 2 months, the group overall has been there in terms of news flow, Supreme Court and be one of the modern states, et cetera. So how does this impact the brand given consumer is also reading all those news flow on a daily basis? And second related question is ESOP policy is there. So if you could comment how that's helping? How has the attrition in terms of the middle level management and senior level management in terms of professionalization? How is the journey?
So Abneesh, broadly two parts. One is that to the sense of being in the news, yes, it happens with from Patanjali Foods perspective, the impact has been minimal. So both we continue to sort of grow the business both and across the board on all the food and FMCG segments that I speak about. So for example, if I were to look at from last year's Q4 of last year versus this year, I mean, our sales have probably actually gone up substantially, have been up almost 14% there.
And likewise, overall, I feel that the impact is minimal. Having seen that, I think at the individual level that is being dealt with, and there's a positivity there. Broadly, I think, it should sooner than later beyond the and also, broadly, it has been started largely clear. In terms of the one particular state that you mentioned, even that is getting addressed and the matter is under consultation. We're hoping that all that will be behind us. So on the side of the ESOP that you mentioned, so attrition rate in terms of the level, I think it is a big one. So given the top industry level, there are dedications. At mid level, we have pretty much on course. They are not the percentage of resignations and all that are nothing to sort of even worth mentioning that there's any attrition at all. But at junior level, that attrition rate continues, which is that absolutely the down level sort of feet on the street. So there, it's a pretty much standard part where the people tend to sort of rotate. And we keep addressing that we currently improve on the various programs, et cetera, to keep the training the workflows to work closely with them. And so that there's nothing adverse at all. In fact, I would say it's compared to the industry, we are more positive on the side of manpower retention.
The next question is from the line of Bharat Shah from ASK Investment Management.
I hope now my voice is clear.
Loud and clear, Bharat bhai.
Two questions, starting with the food or [Technical Difficulty] based is the [Technical Difficulty]
Bhrat bhai, I'm really sorry, your voice is breaking. You were asking about -- I think I just heard biscuits part in the overall food portfolio.
Hello.
Yes, bhrat bhai.
Is my voice coming through? Or should I rejoin?
No. Right now, it is coming through, but I just wish hope it just maintains the same. So please speak Bhrat bhai, I'll just answer that.
Yes. So I would think on the biscuits part, what you have done is truly commendable in a relatively short period the buoyancy of the turnover, the salience to the customers, number of [Technical Difficulty]
Bharat bhai, we lost you.
Hello.
Yes, Bharat bhai now it is better. We lost you in the middle. On the biscuit part, the biscuits, you've said it. Yes, please. Yes, please.
The next question is from the line of Dhiraj Mistry from Antique Stockbroking.
Yes. Congrats on a very good set of number for the FMCG business. So Sanjeev sir, can you split this food and FMCG turnover between foods, Nutrela and nutraceutical and which And which segment particularly has led to this 50% growth during the quarter?
Yes, sure. So the quarterly revenues, I will just split that for you. It is needed in the Nutrela soya products, we did INR 125 crores. In the biscuits business, we did INR 423 crores. In the food business, we did INR 2,148 crores. And we did INR 10 crores in nutraceuticals.
Okay. So what is driving our EBITDA. So we are long time away. So we have been always guiding that this food and FMCG turnover business will be contributing somewhere around 15% to 17% kind of EBITDA margin, whereas our current blocking rate of 9.5%, 9.6% is be below the expectation.
How do we look forward like what kind of EBITDA margin is kind of a sustainable EBITDA margin for this segment? And within force category is also like 62% growth, which particular segment has led to the 62% growth in foods category?
No, it's a valid question, and I would like to just explain the mix of food business. So food, we have two parts. One is the staples part, which is a lower margin category, which comprises of rice and pulses and even partially the wheat flour, partially some of the other product categories typically, which would fall in the staples category. And the rest of it is the higher-margin categories like our Chyawanprash, honey, medicated juices, et cetera, which is a fairly large category and even spices, et cetera, which is a large category that we work in. So if I were to give you a split of -- compared to last year, we had revenue in the food business overall of INR 3,791 crores, which was 9 months only.
But I just, as a percentage part we should look at. And this comprised of about INR 811 crores in staples and about INR 2,980 crores in others. What has happened is that this INR 298 crores -- INR 2,980 crores has jumped to INR 4,052 crores on a full year basis and INR 811 crores of staples jumped to INR 3,234 crores.
So there was a large scale sort of push towards a lot of staple tended to move faster. There the margin is about 7.5% broadly, and we can go to categories also each of these categories. So if I were to look at the margin construct, so INR 2,890 crores, we moved to INR 4,052 crores, okay, the high-margin business.
There, last year, we made about 24.2% margin. We made this year, 17.1% margin, owing to some of the input cost challenges that we had on the supply chain front in certain products because all of them are largely agriculture products. So there was higher prices at the input level. So that we saw a decline of about 7% on those products.
On the Staples side, our margin typically pretty much remained around in the range of 7%, 7%, 8%. So on the INR 3,234 crores, we made INR 243 crores margin. So in absolute terms, the margin has moved up from INR 781 crores to INR 937 crores. But on a percentage basis, which is showing a lower reflection versus 20.6% on a consolidated basis on the food, we are seeing 12.8%.
I think the mix of our product portfolio because of the higher sort of staples that move to the system that has brought down the percentage of margin. But in absolute terms, we have done better. So the plan going forward -- and this year, we are saying it was basically largely the year, as I mentioned in my brief remarks earlier and to one of the questions, that there is certain subdued demand, which was there seasonality impact, certain other sort of factors had an impact.
But broadly, this run rate of 17% to 18%, which we've always said should remain. We got a benefit last year in currently on the premium products was also the onetime inventory gain, et cetera, which came in when the food was transferred in the second quarter of last year. But broadly, the target longer term is that we should maintain a trajectory of 16% to 18% margin on the food overall portfolio, which is including the staples as well. It is just that the configuration of the portfolio because there is a higher demand for certain products, many times this mess switch, but broadly, the target is pretty much clear that 16% to 20% is the growth that we want to maintain in the food business overall
Got it. Got it. And second, on nutraceutical that we have been relaunching this product. But on a full year basis, it's still below what we have been guiding for. How do we look this category going forward nutraceutical?
I'll explain that to you. So we -- and this we have gone over this question a few times. We started the year -- we've actually taken a complete resort of orientation towards the branding of the business entirely. So for example, this year, our margin on the business as good as a percentage terms, but in absolute terms, it's low.
So we have done about INR 100 crores this year. And we've made about INR 22 crores of EBITDA down that about 22% margin, which is our expectation in line with between 25% and 30%, we should make the margin.
The problem which we encountered, which has taken a little longer than what we anticipated is that on the nutraceutical side, completely rebrand, for example, a post nutrition we rebranded. Our -- we launched this VMS, vitamins, minerals and supplements, we have relaunched. So there's a lot of adjustment to the marketing contours in the way we have gone about it.
We are positive. So this year, we have done INR 100 crores last year in FY '24. This year, we should grow definitely the target is we should grow upwards the 50% growth rate we want to sort of have a nutraceuticals and thereafter continue to stabilize with a margin profile of 25% to 30% and have a business which is growing quite rapidly. So I would not be at all negative towards nutraceuticals, if at all. I'm now much more positive that from this fiscal onwards, you will see a positive run on the nutraceutical business for us.
Got it. Got it. And sir, second question on palm oil plantation, what will be the annualized turnover and EBITDA margin, what we did on the palm oil plantation?
So palm oil plantation last year, we did INR 950 crores. And I'll just take a minute more and the peers before that, we did INR 1,151 crores. So the absolute margin, what we had in FY '23 was INR 215 crores, which has actually come down to INR 156 crores. So the reason -- and the EBITDA margin was about 17% this year and compared to about 18.45% last year. So I'll explain the reason for this. So our yields are going up constantly because the drop in overall palm oil prices of 10%. So the margin, the way this business is structured is that the oil FFB prices that we pay for as a raw material are entirely linked to the international prices.
And the end prices are also linked to the domestic oil prices. So if the price of the -- if these prices were to double up, let's say, it goes up by 100%, our margin would go up to almost INR 350 crores, INR 320 crores. If the margin, if it goes like if the price were to go still further down, we would lose margin on that.
So it is dependent entirely on the oil prices, which are rolling internationally. But the progress on palm oil is very good. And next year, we are quite -- with all the work that has happened in the last 18 months, we are quite hopeful that next year, we will have a plantation, which will add additional anywhere between 40,000 to 50,000 hectares to the plantation. 0 to 3 years plantation, which is about 1/3 of the portfolio now should start yielding the initial sort of revenue should start kicking in from end of next year. So we are very optimistic that this business range of 16% to 18% as an EBITDA margin business. It's like an annuity business. It will consistently give to the company, and it is going to increase.
So sir, regarding this question on the extension...
I'm sorry to interrupt, sir. Please, can you just return to the question queue. [Operator Instructions] The next question is from the line of Shirish Pardeshi from Centrum Broking.
I am on Slide 7. So I'm just basically looking at INR 2,384 crores what we did for edible oil. Broadly, if you can give the split between obviously, is doing better, and we have now have M.S. Dhoni also on the brand. So maybe if you can specifically give the split of various edible oil segments?
So the standard split that we have between palm, soya and sun is that 70% of our product mix is typically a palm oil, about 25% is soya and about the balance would be comprising of the sun flower. So typically, in the split of 25 lakh tons what we did in the last year, we would have done close to 16 lakh tons is palm oil, close to about 4.5 lakh tons would be soya oil, and the balance would be sun and the other oils we should because we do other oils also, mustard is quite a large portfolio for us. So that is how this split would be there.
And specifically, what is the growth we would have had on...
So Marcos, as I mentioned in my call also, it's the largest selling palm oil brand in the country. So the growth we have seen -- so this year -- so pal oil has 2 sides to it. One is what we do institutional business and second is what we do on the branded side. To your question of Markus, our growth rates are typically between 7% to 8%.
But that is on the branded side, I'm asking...
On the branded side, I'm saying.
Okay. Okay. And typically, you mentioned that the prices in quarter 4 has firmed up for palm about 17%, so we're on 10% and sun is 6%. What's your -- this quarter or maybe if you can give medium-term outlook, is this prices will remain steady or move upward?
So broadly, see, the two things, the trends -- I mean, global prices are obviously a little volatile because we are getting into now the weather markets in the U.S. But the expectation is the palm oil longer-term view is that palm oil prices should tend to firm up.
But short-term view is that now the peak harvest time is coming in both Malaysia and Indonesia, the peak harvest starting in India. So we, in general, our view is that market should be more easy. The prices should be benign and sort of markets would tend to head lower. They've already declined partially compared to the soya prices. While on a stand-alone basis, they went up, but I think broadly, we're expecting a softer sort of market going forward for the next 2 months.
Okay. The reason why I'm asking because generally, you give the volume growth for edible oil. So what is the quarter 4 and full year growth we would have?
So I mentioned that, that we've done 13.1% has been the volume growth in edible oils, and we've grown to 25 lakh tons in volume terms. And I mean we have, overall, our absolute volumes are at 25 lakh tons in the edible oil segment overall.
Okay. And just last question. When you say your gross margins are higher on overall biscuit portfolio. Will -- do will have a better margin as the company average overall in biscuits or will be similar?
No, doodh will tend to have a lower margin, but doodh because of the absolute size of the scale of the business. So biscuits typically run on the basic equation that beyond a particular point, the gross margins is -- I mean, the overall EBITDA margins tend to sort of get better. So doodh is contributing overall because of the size of the portfolio that we have contributes to the positive margin. But the -- if I were to look at the comparison between doodh and the non like INR 1,000 crores versus INR 600 crores, the margin would be equally split.
Okay. My last question on the international part. Can you share what are the plans for FY '25 and which category, which countries?
So this is 1 part. There's a very heightened focus on the international exports, and these are not just the commodity exports. Commodity exports are declining actually. So both our earlier sort of business of soya mill exports and others has continued to tender. Our big focus right now on the branded business, also the food additive business, so like food nutrition businesses. So I'll start with the food additive side, and then I'll go to the branded side. So working quite aggressively on things like lecithin the soya flower, soya sort of grades, et cetera, which have got multiple different food applications in different industries where the value sort of realization is better, the application, the more we make it superior, better the realization and better the profit margin for us.
On the branded side, the broad businesses that we're working on both in terms of expanding our reach in the Foods portfolio as well as while that is not our right now. But at some point of time, when we're able to go towards the nonfood side, we would be expanding it quite rapidly because there's a large sort of demand base which is there. So we've got our 4 distributors in the U.S. will expand. So North American markets are a large part of our target. We were building up bases in Europe, Australia, we've got a dedicated distribution base that has been set up now.
And likewise, in the Middle East. So for the specific regions where the demand side is high. So overall, broadly, this -- the number of countries, the target is that we should go in fullness of time to 60 countries this portfolio of INR 323-odd crores that we did should continue to expand at 20% year-on-year, and we continue to drive exports in a more aggressive way. Because there is a big demand pool that we see and which is today under service and which is getting service to great channels.
So if you were to look at the Patanjali products reaching the shelves, a lot of them would be reaching through market channels other than what we're directly putting in. So that has been put in place. There's a team which has come on board, there's an aggressive push in the way it is being driven. So we are pretty positive that this will do well in this year also. We should achieve 15% to 20% growth on the export side.
The next question is from the line of Bharat Shah from Ask Investment Managers.
Is the voice clear now? Or should I give you?
Bharat bhai, just clear now. Sorry about this.
No, Nobody. Two or three questions on the food part first. As I was saying, what we have done on biscuits is truly remarkable in my opinion. The rate of growth, number of products, gaining the market share and the quality of products, all scored very well in each aspect. But on the other part of the foods portfolio, how do we see the growth if we break it up into those staples, the low-margin business and higher-margin gains in the business. How do we visualize or see success of what has happened on biscuits on these other parts, mainly not staple, but higher-margin food business. What kind of land are afoot? And what kind of growth do we visualize there?
So Bharat bhai to answer your question in simple terms, there is two parts, sort of in percentage terms, brought the margin down from 24% to 17%. We had a sort of -- there is some change that we are seeing it happen in the medicated juices, where the prices -- I mean, the sales this year declined and part of that impact we saw on honey. So these were 2 products where we saw a decline. But overall, in terms of the key, for example, that -- which is more than INR 1,500 crores, which has grown consistently and continues to occupy very premium end position.
If we were to look at the Chyawanprash, which is continuing to grow at a healthy rate, the medicated juices, we are bringing back to the floor, spices have grown quite a bit. So broadly, I would say that the margins are now coming back to very -- on the premium products I'm talking now is margins are coming back to more steady state, which we've already always said that they will be between 16% and 18%. This year, we did about 17.1% on a full year basis.
So EBITDA margins. And this, we expect that once the revenue growth is there, we are seeing typically between 8% to 10% of growth. The margin we will project that should remain between 16% to 18%. The issue is, as staples as rightly what we are seeing is that the more it gets pushed through the food system. On a percentage basis, it tends to show a lower margin.
Even though absolute terms, we've actually gone up because this time, we had the benefit of the full year numbers compared to 9 months last year on the food side, so INR 937 crores that we got. I would say that we're pushing and innovating. We launched the new campaigns on Chyawanprash like this. We launched on the -- so we're trying to sort of including , you will see that we are exploring that more brand ambassadors. We're exploring more ways of reaching the consumer to maintain that growth rate of 10% plus 8% to 10% typically in the food -- premium food portfolio.
And I'm reasonably hopeful that we will be able to obtain that momentum and the margin profile also. Now to the question whether the staple should be shows less on and not do that. I think missing sales does not make sense because we do make positive margins. We do have a real sort of positive view towards pushing our staple products, which have done very well for us.
So I think the effort going forward is going to be that wherever the opportunity on staple side is we continue to sort of build that business. And on the premium end of the portfolio, we continue to focus a lot more and make that -- and we are quite hopeful that both on the sales increase and 16% to 18% margin, I think will be the steady state we should objectively sort of keep as an objective, and we should go towards that.
Maybe it will be useful if you segue the food business details on the lines of premium portfolio and the staples portfolio so that we can see granularity in the business and margins more clearly because of inclusion of these staples, the ability to understand the overall food business is somewhat getting confused.
I've got the numbers right now. Actually, I repeat it to one of the previous questions, if you wish, I can read that.
You don't need to repeat the numbers right now. I mentioned people in joining and rejoining I picked up. I'm saying going ahead, in general, rather than showing food portfolio in its entirety, we can split it into staples part separately in the premium part separately.
We can do that. I think in our commentary, I think what we put on the exchange, we can split that number between the staples and the premium end products. Yes, we can do that.
There is a better understand of how the business is moving and how overall margins have behaved. In absence of the separation, an initial glance, it leads to a lot of confusion.
We'll do that. I think that's a good input. We'll definitely work towards it.
On the, why juices and honey have degrown, maybe anecdotal, but I personally in a consumer of it is 3 juices on a daily basis. And I find them to be remarkably good products. These are really distinguished products in the market because there are not too many competitive standard products available in this category. Given all of that and given our focus in scale, why these juices businesses would have degrown is something confusing to me.
So Bharat bhai, just sort of put that in a perspective so that I'm more clear in what I said just now. One is that a lot of these juices, we had a huge bump up last year at the time of the acquisition. It is more -- showing a more steady state growth right now. So net-net, technically it has not degrown in that sense. Number one. Number two is that -- so we will remain -- we retain the leadership in the medicated juices. We -- if we were to look at the longer-term run rate, I don't have the numbers specifically for medicated juices of the year before. I can share that with you. So it is just a onetime sort of change that occurred in the business -- in the medicated juices. But overall, we have not seen any significant decline, yes, compared to 9 months period annualized basis that we saw a certain sort of lower sales revenue.
And on the honey side, we saw some again, we had a onetime sort of benefit that we got on account of the -- in the initial sort of in the business, what transferred on the inventory, a lot of aggressive selling which happened basis that it happened. I don't -- these are not areas of any particular alarm. I think we'll get back to the steady state and we'll build up the business.
So broad idea being that sequential growth of -- in the revenues of anywhere between 8% to 10% of the premium category food business will contribute. The margin profile of 16% to 18% will continue and that we're pretty confident about that we'll be able to.
Okay. if I'm permitted two more questions since I've joined an being joined again. if I'm permitted. One on the edible oil. I mean when I look back in '21-'22, it was a golden performance period for edible oil, where our margins were robust, growth was robust. Growth in the volume still continues to be very healthy. But that was a year when we made almost about INR 1,300 crore profit in edible oil, which is remarkably large. In the last 2 years, a couple of quarters in each year have been really, really terrible and where it has produced losses. And the other 2 quarters in each year have been kind of below average. And therefore, last 2 years, edible oil performance in profitability terms has been nothing much to talk about. Can we say that slowly, but steadily, will climb base to where we got in 2021-'22 because that was the year we made about a reasonable 5% plus kind of margins and almost about INR 1,300 crore profit. So maybe it will be a client and somewhat a measured one. But do we believe that -- we are out of the hump, out of the trouble in the last 2 years of the edible oil, and we should get back into steady accent in that business.
But thank you, Bharat bhai. You asked a very important question. I was hoping somebody will ask that 5 quarters for the industry have been the worst ever in maybe in a 30-year sort of time frame. The second quarter of last year to stretching to the second quarter of this year. So nearly 5 quarters, we have seen consistently barring 1 or 2 exceptions that we got. Typically, they have generally been bad.
Now coming back to the state of what we've always maintained at between 2% and 4% margin in the edible oil portfolio that we feel pretty confident. This year is 1 year of change. So while this year on the overall EBITDA, we have made INR 117 crores. But if we were -- I were to split this between palm and oil palm plantation and the edible oil as an overall portfolio. So we made INR 156 crores on the palm plantation business, lower compared to last year because of the average prices are being lower.
So broadly, I think we are getting away from all this. And I would be pretty confident that on INR 22,000 crores of revenue or thereabout. If we were to do a steady state on the lower band of 2%, we should be about INR 450 crores, we should add definitely compared to a negative INR 39 crores on the edible oil side, we should be up by INR 450 crores. If we were to take 3%, it obviously is better. So one sort of with a lot of conviction and with a lot of effort, our target is that this INR 117 crores should be closer to anywhere between INR 500 crores to INR 600 crores this year. and that is the path we're working towards.
Now why am I saying this? I've seen that the first month in the people has gone by. We're seeing the second middle of this month, we have seen. It's been very positive. So I'm reasonably comfortable that we will not go back to perhaps INR 1,300 crores, which was an outlier because that really those 2 years were very positive for the industry.
But between 2% and 4% range, and I'm saying on the lower band, we should add INR 400 crores. On the midsized band, we should add INR 600 crores to the bottom line and that I feel pretty comfortable with that the edible oil should be a turnaround story with all the effort that is going on, both on the brand side, on the risk management side, on seeking supply security, the oil palm plantation increase that we are seeing year-on-year. I think broadly, I feel reasonably comfortable that we should get substantially to the bottom line to the EBITDA margin in this year.
And one last short question. Interest and depreciation in fourth quarter has shot up very sharply, I...
Yes. Can I answer this, sir?
Yes, please.
Sir, basically, interest, which you are seeing for this quarter is INR 115.90 crores. It includes interest actually apportionment of reasonable preference here, near about INR 93.65 crores. It includes. That's why it increased. Depreciation in '23-'24, we had made an alignment of life of all the assets, which was not done earlier in the pre CIRP period. That's why the depreciation has been increased by near about INR 75 crores. That is still depreciation. Going forward, our depreciation for the whole year will be near about INR 240 crores to INR 245 crores.
And correspondingly, I would like to clarify one more thing. Other income also includes other income, which you are
just see the quarterly figures. Last quarter, it was INR 46.59 crores. And this quarter, EBITDA has increased to INR 126.36 crores. This also includes the treatment as per IndAS of reasonable preference are to the tune of INR 78.65 crores.
The next question is from the line of Jaidev Balaji from Motilal Oswal.
So one request I have is that I think this should be the last question because we've got some media interactions starting in 5 to 7 minutes. So yes, let's say, if we can -- it's the last question, please.
Am I audible?
You are audible. Yes.
Okay. So I just wanted to ask this question is not related to numbers, anything. Just wanted to ask any new product launches or any integration processes you're thinking about in the future or any new developments that you want to launch in the new field, just to say, 3 to 5 years? Any plans for the growth of the company in terms of new product launches?
SPEAKER01 So one is that the big work that is going on, which we were not able to discuss on this call is that the valuation of the nonfood HPC portfolio of Patanjali Ayurved that we are evaluating right now. And we are hoping that this will -- very quickly, we should be able to go through the diligence in the numbers. And very soon, we will sort of hear from us post our diligence and once we have got a bit of clarity. And so that's going to be -- if at all that happens, we are going to have a very major addition to both the revenue and the bottom line even in the business.
The second is that very clearly from the FMCG perspective, our premiumization drive across verticals, across portfolios will continue at the rapid clip, both on the food side or the biscuit side, nutraceutical side as well as the Nutrela side. There are multiple initiatives which are underway. And the last initiative, which I wanted to speak about was our oil pump plantation, which while on the P&L, yet as yet, we are not seeing a big growth kicker, but the next 2 years' time that the growth momentum is going to pick up very substantially. And you will see that I think from end of next year, we'll see the planting that has been -- the growth momentum has picking up. I think we'll get towards a much larger sort of growth path, both in terms of revenue and the profitability.
As that was the last question for today, I now hand the conference over to Mr. Sanjeev Asthana for closing comments.
So thank you very much and for all the wonderful questions and patiently listening to us. With this, I conclude the call. Thanks again for all the patients. If you have any further queries, please contact SG&A -- SGA, our Investor Relations adviser. And everyone, please have a good day and wish you all the best. Thank you so much.
Thank you. Thank you very much.
Thank you. On behalf of Patanjali Foods Limited, we conclude this conference. Thank you for joining us. You may now disconnect your lines. Thank you.