Patanjali Foods Ltd

NSE:PATANJALI

Q4-2025 Earnings Call

[Operator]

Ladies and gentlemen, good day, and welcome to Patanjali Foods Limited Q4 and FY '25 Earnings Conference Call. [Operator Instructions]

This conference call may contain forward-looking statements about the company, which are based on beliefs, opinions and expectations of the company as on date of this call. These statements are not guarantees of future performance, and involve risks and uncertainties that are difficult to predict. Please note that this conference is being recorded.

I now hand the conference over to Mr. Sanjeev Asthana from Patanjali Foods Limited. Thank you, and over to you, sir.

[Sanjeev Asthana, executive]

Thank you very much, and good morning to all. Thank you for joining us today for Patanjali Foods Limited' call to discuss the results of Q4 '25. I'm joined by the company's CFO. Mr. Kumar Rajesh; along with Mr. Priyendu Jha from the Investor Relations team; and our IR strategic partners, Strategic Growth Advisers. We have uploaded the results collateral on the stock exchanges as well as the company's website for your reference.

Let me begin by giving a quick snapshot of our performance during the course of this call. We will be referring to stand-alone financials. For the March quarter, we reported the highest ever quarterly revenue from operations, the gross profits and the gross margins. Our revenue from operations stood at INR 9,692.21 crores, with 17.8% growth on a year-on-year basis. The gross profits were INR 1,656.39 crores with a margin of 17.09%. The total EBITDA came in at INR 568.88 crores, reflecting a margin of 5.87%. And while PAT was INR 358.54 crores with a margin of 3.68%.

For financial year '25, the revenue from operations and all profitability metrics exceeded the performance of all previous years. During the quarter, the FMCG sector witnessed the following broad trends and operating conditions. In the Q4 '25, we experienced an overall moderate operating environment. The FMCG sector reported 11% year-on-year value growth in this quarter, with volume contributing [ 5.11% ] and the prices contributing 5.6% of the growth. The volume growth was led by HPC categories, which grew at 5.7% due to a strong rural demand. The food volumes reduced Q-on-Q basis from 6% to 4.9% in Q4 '25, owing to decreased volumes in staples category.

While broader government initiatives accumulated rural consumption, some policies like distribution of free food grains under various welfare schemes dampened the demand for certain staples such as wheat flour. The urban markets witnessed relatively muted growth, weighed down by persistent food inflation, high interest rates and stagnating real wage growth. These factors collectively suppressed discretionary spending particularly in nonessential and premium FMCG categories, leading to cautious consumer behavior in urban areas. On the cost front, the key commodity prices, particularly palm oil, wheat, sugar and rice remained at elevated levels during the quarter, exerting significant cost pressures.

Now coming to Patanjali Foods Limited. FY 2025 marked a pivotal chapter in our journey, aligned with our strategic objective to diversify our product portfolio and drive sustainable profitability. Q4 '25 marked the first full quarter of integration of HPC business, which contributed 7.47% to the total top line and 20.03% to the total EBITDA. Just like the success that we built on after acquiring the foods and FMCG businesses, this acquisition too, is poised to drive innovation, enhance our product offering and strengthen our position in the market. We aspire for our foods and other FMCG and HPC verticals to account for approximately half of our total turnover in coming years.

During the quarter, we significantly strengthened our distribution capabilities and market presence in both urban and rural markets. We added 30,000 new retail outlets in Q4, expanding now to the total reach with the addition of HPC business to nearly 20 lakh retail outlets. The rural outreach was further enhanced through the expansion of the rural distribution network. We also aim to cover several villages under the Patanjali Direct initiative in FY '25/'26.

In Q4 '25, we spent 3.36% of the revenue from operations towards advertisement and promotion-related expenses. It included our campaigns like Nutrela's collaboration with Zee Bangla's Dance Bangla Dance, Nutrela's visibility during Maha Kumbh. Among multiple initiatives of boosting Nutrela, it was prominently promoted at Maha Kumbh.

In FY '25, we ramped up our ad spend from -- to INR 233 crores from INR 71 crores in FY '24, which included onboarding various brand ambassadors like MS Dhoni, Shahid Kapoor, Shilpa Shetty, Tiger Shroff and Tamannaah Bhatia. For the quarter, increase in expenses like employee costs and other expenses were partly due to integration of the HPC business and ESOP-related businesses.

As part of our CSR efforts, we partnered with Robin Hood Army to mark National Protein Day with special campaign in Kolkata and Delhi. The initiative garnered very strong engagement, both on the social media and the regular media channels.

Coming to our segmental performance during the quarter in the Food and FMCG segment. The revenue for the Food and other FMCG segment was INR 2,257.22 crores versus INR 2,704.65 crores in Q4 of '24. Similarly, to the previous 2 quarters, an elevated cost base has led to the contraction in margins.

Biscuits recorded a revenue of INR 426.25 crores in Q4 '25 and INR 1,677.38 crores in FY '25. Doodh Biscuit and Nariyal Biscuit continue to be among the best-performing biscuit brands for us, with annual sales of Doodh Biscuit INR 1,000 crores for the second consecutive year.

An increase in the cost of raw materials such as palm oil, sugar and milk does affect the margins. The shift in consumer preference also saw a major correction in ghee category due to rising prices. Despite this, we invested in the long-term brand building for ghee by activating 30,000 outlets during the quarter.

The early onset of summers led to a significant dip in sales of honey. The staples, which include rice, atta, spices, wheat products and a couple of other spices recorded a revenue of INR 1,034.65 crores. Nutraceuticals recorded a revenue of INR 19.42 crores in Q4 '25, with an expanded overall portfolio in FY '25. We launched new products like moringa, adult gummies and plant protein as well as new fitness SKUs, including creating 3 workout products. We expect the momentum in this segment to pick up in few quarters, supported by continued investment in products and brand development.

Textured soya proteins reported sales of INR 102.83 crores during Q4 '25. MyNutrela was honored with the Trendsetter Campaign of the Year 2025 Award for its impactful digital campaign: India Ko Strong Banate Hai, Nutrela Khate Hain.

The sales landscape for both mass and premium product categories was driven by modern trade with commerce, e-commerce. FY '25 saw 7% year-on-year growth in the modern retail sales and 28% rise in e-commerce.

As an update on the HPC business, the quarterly revenue for the HPC business segment amounted to INR 728.48 crores, and the EBITDA margin was 15.74%. Of the HPC segment, the dental care revenue was recorded at INR 398.14 crores, followed by skin care at INR 178.49 crores. Home care at INR 88 crores and the balance for hair care and other products.

Our oral care category remains the largest contributor within the HPC segment and has delivered good volume numbers, mainly driven by enhanced distribution across both urban and rural markets. Our flagship brand, Dant Kanti, continues to enjoy strong consumer trust. In Q4 '25, we introduced a new variant, Dant Kanti Fresh, which received very encouraging feedback. The toothbrush segment itself has maintained its steady growth trajectory, supported by new product launches, with a clear ambition to double the business over the next 3 years.

To strengthen our position in the HPC segment, we are focusing on premiumizing the category, while driving volume growth through increased penetration supported by competitively priced high-quality branded products.

Coming to the Edible Oils segment and oil palm plantation business. Our edible oil business posted revenues of INR 6,764.08 crores with an EBITDA margin of 4.66%. Within this, the palm plantation segment generated revenue of INR 229.32 crores with EBITDA margin of 5.27%.

The branded edible oil plant contributed to more than 75% of the total edible oils sales. while palm oil prices remained elevated throughout the quarter, the pricing environment for other key edible oils, namely soybean, sunflower and mustard was relatively favorable. The divergence in pricing trends helped balance overall input costs for blended oil products and provided some push into margins.

During Q4 '25, we saw upward and downward movements in cash markets for edible oils, which created favorable opportunities for both purchase and sales. There was no divergence between palm oil physical prices and the CPO futures. In soya oil, we observed an 8% divergence, mainly due to rising futures prices, while the basis prices declined.

Price volatility is an inherent part of the industry. Deep market experience enables us to navigate it effectively. We employ a prudent risk management approach. We consciously reduced our hedge ratio to under 2% during the quarter given the market volatility. We also optimized our physical purchases to manage procurement costs more effectively. Our hedge strategy allowed us to navigate price fluctuations fully and protect our margins.

As of March '25, our total cultivated land stood at 89,546 hectares, with 44.81% of our plantation falling within the prime age bracket of 7 to 25 years, known for their high yield potential.

As part of our ongoing commitment to advancing India's edible oil self-reliance, farmer prosperity. We recently signed an MOU with the government of Manipur under National Mission on Edible Oils – Oil Palm. We have said to cultivate, 2,700 hectares of oil palm plantation. The cultivation has begun from April 25. We also set up 2 new nurseries. 2 in Assam, 3 in Arunachal Pradesh and 1 in Andhra Pradesh. Additionally, we continue to hold farmer awareness seminars for the best practices in oil palm cultivation and test management, helping improve the overall farming process. The company is aggressively expanding its palm plantation portfolio and is working towards expanding its palm oil [ farm mill expertise ]. We reiterate our plan to take area under plantation to 0.5 million hectares over next 5 years, which will cover about 60% of our requirement.

Now I would like to summarize overall financial performance in FY '25. The total income stood at INR 34,289.40 crores. The total EBITDA of INR 2,079.06 crores, with year-on-year growth of 36.89%. PAT grew by 70.08% to reach INR 1,301.34 crores. We are optimistic about the demand revival in the Food, FMCG and HPC categories in both rural and the urban India. The falling cost basket of food inflation, along with lower taxes and other supportive government policies is likely to aid a recovery in mass market urban demand. This impact should be visible from the second half of the fiscal year.

Also, the stable prices of palm oil will prove to be a boon for us. Both summer and the wedding season are expected to boost the demand, and it is likely to gain market share from soybean and sunflower oils. Going forward, we will continue to invest in expanding to our distribution network, brand building to solidify our market position across a few of our core categories, such as edible oils, oral care, food and FMCG categories.

With this, I conclude our presentation and open the floor for Q&A session. Thank you.

[Operator]

[Operator Instructions] The first question is from the line of Vishal Gutka from ASK Investment Managers.

[Unknown Analyst]

Congrats on a good set of numbers. Sir, 2 questions from my side. I just wanted to understand your views on HPC home care and personal care business, approximately INR 730 crores revenue. So what are your ambitions from a 2-year or 3-year perspective? Can we expect INR 1,000 crores quarterly run rate from this kind of business when I look from a lens of 2- to 3-year kind of time frame? And second question is on the Food and FMCG business, where the revenues have declined in F '25. What is the strategy as a whole? What are we trying to do to revise the growth momentum in coming years?

[Sanjeev Asthana, executive]

So on the HPC business, we have already committed ourselves and we've repeatedly stated at the time of acquisition also and subsequently as well, that we will maintain a minimum growth rate target of 15% year-on-year growth. Now certain categories within that, we find quite attractive, especially in -- and there's a lot of focus that we have towards premium sort of launch of the skin care products. We are beefing up our portfolio on the home care side.

So our conviction on the 15% year-on-year growth is fairly strong. And the margin expansion that we had sort of planned, it will take maybe 4 quarters to 5 quarters before we achieve that 200 basis point margin expansion as well on account of the efficiencies in the distribution network expansion.

So we're reasonably confident that we're achieving this. And the target is that we should be double of where we currently are at this rate in about 4.5 years' time. And this will continue to grow because we find both the market is expanding, the space for premium product launches is looking very good. And likewise, the consumer traction with our offering on the newer launches that we've done in the last 18 months, first part of that was erstwhile -- in the company is we'll accelerate the process. We will have new products, new branding. We continue to sort of invest with the new brand ambassadors. And so there's a strong conviction that we should be able to achieve these growth numbers.

Coming to the decline in the Foods business, which was something that got -- so there are 2 twin factors which have impacted this. One is that we saw a very distinct slowdown in the urban sort of demand, especially for certain premium products in the -- for example, the Karvy category. Similarly in the -- some bit of seasonal impact that we saw in the Chyawanprash business. Likewise in certain other ethnic food categories like the medicated juices, et cetera, with the decline overall of the health risk perception that the consumers have had.

So now the work is clearly afoot, we expect 3 things to drive this growth now. One is the urban demand we are expecting with the announcement on the income tax relief and others that came in, in the last budget, that should start spurring the consumer demand. We believe that the distribution expansion that we've embarked on, we've moved almost in the last 6 months from 1.5 million to 2 million retail outlets with the addition of the HPC business. So a lot of strategies are being worked on. So a reasonable confidence is there that the ethnic foods category, which saw a distinct decline. We should not only be able to arrest it, but we continue to grow between 8% to 10% growth that we've set for ourselves. We should be able to recover that market share, and we should continue to get back on that growth trajectory.

[Operator]

The next question is from the line of [ Saloni Patil ] from [ ST Capital ].

[Unknown Analyst]

So I want to know -- I wanted to know about ESOP cost and CapEx cost this year and for the next couple of years.

[Sanjeev Asthana, executive]

So I will address the CapEx cost part of it and would request Kumar Rajesh ji to explain the ESOP cost. So I'll be quick. So as we have mentioned several times before, our -- large part of our CapEx -- the regular CapEx spend that we have is close to about INR 125 crores to INR 150 crores per year is our targeted CapEx, which is required for the routine sort of maintenance costs and addition of few machines here or there.

In year 3 and 4, we are expecting almost over 2 years' window. We will invest close to about INR 1,000 crores of spend we are anticipating in years 4 and 5 from today. And before that, in case any opportunity comes up, we might look at. But right now, there are no major CapEx plans that we have on cards to be spent over next 4 years. We don't need to spend on CapEx.

On the ESOP treatment of the expenses, I would request our CFO, Kumar Rajesh ji, to answer that.

[Kumar Rajesh, executive]

Sure, sir. So thank you very much. This year, we have debited near about INR 122 crores, INR 10 crores per month as the ESOP cost for the fair valuation adjustment of ESOPs into the cost. So this is the basic numbers.

[Operator]

[Operator Instructions] The next question is from the line of [ Akshay Raut ] from BSM Securities.

[Unknown Analyst]

So how sustainable are the margins in our Edible Oils segments?

[Sanjeev Asthana, executive]

So Edible Oils segment, Akshay, that we have said that we target, for example, in the Edible Oils segment, this year, we have done overall of 4.64%. And we have stated that the range of margins is 2% to 4%. We are very confident that -- and this is almost the fifth quarter in the run that we've been sustaining the margin.

So we are pretty much -- so the effort that we're doing towards the branded oil segment, the work that is happening on managing our supply chain more effectively, the distribution network expansion that we've done, the spend on the ad and marketing that has happened over the years. So we are reasonably confident of maintaining our margin and hopefully on the higher end of the chain. And this should not alter at all.

For example, you would notice barring exceptional in the 1.5 years before that 4 running quarters when the markets were in great turmoil, edible oil markets have stabilized. We don't anticipate any significant movement either way. So the consistency of the profit that we speak about, the quality of margin that we speak about and the predictability of margin, I think we should be able to meet all the objectives that we have set for ourselves.

[Operator]

The next question comes from the line of [ Yubi Modi ] from [ VT Capital ].

[Unknown Analyst]

I just had one question. Sir, the demand scenario still remains lukewarm despite a falling inflation. How are we looking at the demand from both rural and urban areas as we speak and also for the couple of next quarters?

[Sanjeev Asthana, executive]

So you're right. The demand profile -- the overall environment was fairly muted. Earlier it was led definitely by higher prices and stress, the cautious -- the consumer spend that we clearly witnessed in the urban areas. So there are 2 expectations, which are driving our conviction that we should see, certainly, a pickup in the demand sort of momentum. One is, clearly, we see on the side of the income tax release that has been given to the mid class of this year that should be spurring a growth in the urban consumption. Second is the softening of the inflation -- food inflation, especially to -- last quarter to 3.6% should be helpful.

Staples continue to be a challenge, the consumer staples overall, as we see that on the side of whether it's a price of the wheat flour, whether we see price on the partially still on the edible oils, if you see the prices in case of certain pulses, et cetera. So there will be some stress on the staple side. But overall, the consumer demand side looks healthy. And it will aid in the recovery of the growth target that we had planned for ourselves overall. And I believe that the overall sentiment looks certainly more positive than perhaps what it was in the last quarter.

[Operator]

The next question comes from the line of Kunal Shah from Jefferies India.

[Kunal Shah, analyst]

Yes. So my first question is on the oil business. So can you share the volume numbers for the quarter? And how much that is?

[Sanjeev Asthana, executive]

So basically, on the volume front, what we've had, there's overall we -- last year, we have done a number of 24.99 lakhs. This year, the volumes have declined by 5%. This was primarily due to the larger part of the palm oil -- overall decline in palm oil because for large part of the year, the palm oil prices started to trade at a much larger premium to the soya and sunflower oil prices. And palm is the largest segment that we have because of which we saw this decline.

So for example, in last quarter versus this quarter, if I were to look at, we had -- in the palm oil segment, we had 2.6 lakh ton. This quarter, we had 2.25 lakh tons is what we did. Similarly, on the soybean oil, we had a much larger pickup. We had 1.26 lakhs in the Q3 of previous year. In the Q4, we had 1.5 lakh tons. So there's a growth pickup. In the sunflower category, we moved it up by marginal about 3,000 tons.

So broadly, the decline has been palm oil, which is also an industry trend as well. But overall, if we see that -- on an overall basis, that the decline largely has been marginal between Q3 and Q4. But overall, on a yearly basis, the decline also has been slightly about 100,000 tons, is drop that we saw. But that will pick up because the palm oil prices have sort of tapered off. They have reached a level of equilibrium, which is trading at a slight discount to the overall oil prices, and we should be in a reasonably good position now.

[Kunal Shah, analyst]

Understood. Understood. That's very clear. Second bit is on the plantations business...

[Sanjeev Asthana, executive]

And Kunal, I just wanted to say one more thing that -- and palm oil also is the least generator of the profitability for us. So to that extent, the -- what we are much more focused always is on the premium oils like soya and sun. And palm is a big driver of volume growth for us. But in terms of profitability, a marginal dip. So that's why I repeatedly said -- have said that it is not the absolute margin pressure, but the quality of margin. So we are much more focused on soya and sun and mustard because they are the premium oil categories. So palm marginal decline in 1 quarter or 2 quarters really doesn't impact our overall profitability profile.

[Kunal Shah, analyst]

Understood. Understood. That's very clear. I think it is on the plantations business. So if you look at the acreage, that's gone up by around 15,000 hectares this year. So how -- I mean when you put out this target of 500,000 hectares in the next 5 years, would that be front ended in the next few years? Or would that be, let's say, a bit back ended [indiscernible]?

[Sanjeev Asthana, executive]

Sure. Sure. So there's a lag, as we explained, that palm plantation has a typically 15- to 18-month cycle on the ceilings sort of matured enough for small plants to be planted. And so there's always a lag, but the momentum is going to pick up. So for example, this year, we targeted that we should do 40,000 hectares. Next year, the pickup will be 125,000 hectares, and thereafter, it will continue on that same momentum trajectory. And so now the pickup at a scale and level is going to be significantly higher.

And in line with that, we are consistently ensuring that 3 steps, a, that the number of nurseries has gone up substantially in this period, the ceilings that we have are -- the imports that we've done, they are in a growth mode, and they are already to be planted now.

We picked up earlier what we used to have 5,000 and 6,000 hectares a year. I'm talking about 3 years back, has now started on to almost last 15,000 hectares. This year, 40,000. Next year, 125,000 hectares. So we are reasonably confident of achieving our target in 5 years of 0.5 million hectares. And progressively, that also as they come into the maturity phase of the fruiting, we also expect the margin profile to start picking up for the overall business itself.

[Kunal Shah, analyst]

Understood. Understood. That's clear. On that note, it's possible to share the margin profile for plantations this year?

[Sanjeev Asthana, executive]

Yes. Of course. Yes, of course. So this year, we had, for example -- in Q4, we had -- EBITDA was INR 12 crores. But overall for the year -- for this year in FY '25, our revenue from palm plantation business was INR 1,263 crores. The EBITDA was INR 203 crores, which is 16%, and this is in comparison to INR 951 crores FY '24 and INR 156 crores EBITDA.

[Kunal Shah, analyst]

Understood. Understood.

[Sanjeev Asthana, executive]

As we have maintained, that is always really a pretty consistent annuity business for us. And in general, we are able to maintain that -- the margin construct. And so we're pretty confident of this being in the ballpark range of 16% to 18% on a consistent basis.

[Kunal Shah, analyst]

Understood. Understood. That's clear. My second question was on the HPC business. So good, good numbers there, both on top line and margins. We heard from a lot of peers that there's a lot of competition in oral care, at least in the last few months, which is also your largest category. Can you share us how -- I mean what's helped your numbers? And what are the trends that you see in this category in the market and from your perspective?

[Sanjeev Asthana, executive]

So overall, 2 trends are driving this. So it's a hypercompetitive category. There's no question about it. So one is the core sort of consumer base that we have in Dant Kanti, that not only remains intact, that continues to establish itself with the growth -- in a growth mode. We typically have seen 6% to 7% growth in that space that we have achieved in the first quarter -- this year in the Q4 of '25.

Now the target going forward is what we believe is that the new range, Dant Kanti Fresh, the extra push that we are making in the oral care category. The new variants that we're launching -- market is also getting very deeply segmented now. And the different categorization as we are doing in the urban areas, we're looking at different sort of age groups, different deeper segmentation, and that is what is going to be the strategy of the company.

So the target is that if we can continue to grow higher than the market at somewhere around 10% as a ballpark number for dental care, continue to drive innovation with the new product launches. There is a confidence that we should be able to achieve 10% growth rate in the dental care category. And broadly, that is the plan.

Similarly, on the business of -- the opportunity is much larger than we see in the skin care and home care. And there are multiple different products that we are continuing to sort of bring to the market. There's a lot of strategy towards pushing it through the e-commerce and quick commerce route now. The modern trade as a distribution channel is emerging. So we are reasonably confident of 15% growth rate what we have set for ourselves this year. We should be able to see it comfortably but with a lot of effort, which has to go into in terms of distribution expansion and the product innovation.

[Kunal Shah, analyst]

Understood. Understood. Understood. And on the margin side, this guidance which you have given for next few quarters, I mean, like 4, 5 quarters, 200 bps gain from synergies and distribution improving. So this basically means that the 17% margin that this business was an acquisition, minus 3% royalty, which takes you to 14%. So you're looking back to let's say, 16%, 17% margin in the medium term. That would be a fair way to look at it, right?

[Sanjeev Asthana, executive]

Yes. So as we said that this additional 200 bps margin to kick in would take certainly a good 4 to 5 quarters before we -- the synergy starts to sort of kick in. And so the -- somewhere around the Q1 or Q2 of FY '26 is what we're estimating that we should start to see some results.

And so the idea is that somewhere around next fiscal that we should see in the first quarter or second quarter, I think we should start to see the impact of 200 basis points expansion in the margin. So we should head back towards somewhere around 16% to 17% the margin construct in the business, and that looks reasonably achievable.

[Kunal Shah, analyst]

Understood. Finally, I have a couple of bookkeeping questions. So this ESOP cost...

[Operator]

Sorry to interrupt, sir, but I may request you to rejoin the question queue for follow-up questions.

The next question comes from the line of Disha Giria from Ashika Institutional Equities.

[Unknown Analyst]

I just have one bookkeeping question. There seems to be some restatement within your revenue figures and your other income. So if you could just let us know what the reason for behind it?

[Sanjeev Asthana, executive]

Yes. Mr. Kumar Rajesh will answer that question.

[Kumar Rajesh, executive]

Yes, yes, yes. Thank you. So basically, we are incorporating the seedling income from palm plantation and some export subsidy into the other income earlier. So this year, we have changed the methodology. And this year, near about -- this year, we have transferred this revenue from other income to the oil segment -- income from operations. And that -- so this year, the amount is 47.50 cr, which have been transferred from other income to income from operations. And last year, it was near about 20 cr.

[Operator]

The next question comes from the line of Abhishek Mathur from Systematix Shares & Stocks.

[Abhishek Mathur, analyst]

[indiscernible]

[Operator]

Mr. Mathur, your voice is breaking, sir.

[Abhishek Mathur, analyst]

[indiscernible]

[Operator]

No, sir, it's still breaking. May I request you to rejoin the conference. The next question comes from the line of Ajay Thakur from Anand Rathi Securities.

[Ajay Thakur, analyst]

So I wanted to get some understanding on the edible oils margins actually. So you had kind of highlighted that the bulk of the margins actually -- or quite a bit of a part of the margin actually is coming from the sunflower or the non-palm oil kind of oil businesses. So I wanted to get a sense of what would be the average contribution -- generally, if you were to look at the EBITDA margin constitute, what would be the average constitution of the palm oil or what will be the contribution of edible oil to that segment overall?

[Sanjeev Asthana, executive]

So I'll just clarify, on the front of palm oil, what I said was that there was a volume decline of 100,000 tonnes. That does not mean that the palm oil does not make margins. It's among the lower margin products for us. So the drop in about 100,000 tons of the volume on the palm oil does not impact our margin to a large extent.

But having said that, oil palm is nearly 70% of the business that we do, it's highly profitable for us. We have the largest brand, the Ruchi gold in the country. It is one of the most recognized brands, which consistently earns a premium of more than INR 1,200 a ton. We make a very solid margin on our oil palm plantation business, and we do a very good job on the supply chain side.

So really that -- so my comment was in that slide, that a drop of -- but what we do a lot more margin is -- in our branded business, for example, on the soya and sunflower side, our margin profile typically is about INR 2,500 to INR 3,500 a ton, which gives us a lot more leg up to that extent. So if there's a significant drop in that, that also helps us. But in absolute terms, palm continues to be one of our mainstays of the margin profile that we do in the business.

[Ajay Thakur, analyst]

Understood. Sir, what I was trying to understand is that if palm oil is kind of constituting 70% of the Edible Oils business, will the contribution in terms of EBITDA would also be a similar quantum on an average basis, like 70-odd percent or would it be like -- more like around 50-odd percent to the Edible Oil margin?

[Sanjeev Asthana, executive]

So that typically is no reflection at all. So what happens is that since the movement between the interplay of the -- each of these oils is reasonably dynamic. So it typically would not be reflective of 70% as a -- it will not be -- percentages would not be matching at all. It would typically be at a variation. But I would say that 50% of the income that we derive would definitely -- in all years, would be from palm oil category for us.

The percentage may vary a bit in -- here or there. But overall, about 50% income, we would always derive from palm oil. And the balance part of the income accrues from the other oils. And so we don't many times talk about the mustard oil and sesame oil and other businesses, but there's a fairly robust portfolio that we have. So it's almost 50-50 between the 2. But volume-wise, oil palm would always be -- palm oil would be about 70% of what we do.

[Ajay Thakur, analyst]

Understood. Sir, I also wanted to understand, generally, doing a deflationary palm oil trend, would we be kind of having a better margin scenario in the palm oil business or generally doing the inflationary scenario if the margin's better for the palm oil business for us?

[Sanjeev Asthana, executive]

No. So the 2 -- palm oil margins gets driven for us by 2 factors. One is, of course, the supply chain capability that we built in. Second, which is very crucial, is that consistent brand equity that Ruchi Gold has built over the years, and I was mentioning that typically between about 1.5% margin that we generate consistently on account of the brand in the marketplace, and that is a very strong point that the company has.

And if we add the supply chain efficiency, the purchase efficiency that we bring in and add close to 1.5% or 2% to that, then the palm oil is a very big solid part of our portfolio, which is driving this growth. So it's a combination of the brand marketing as well as the supply chain efficiency, which is driving this growth.

So if there's a natural inflation in the palm oil prices at the purchase level in the international prices, it tends to benefit us. If there's a dramatic drop, it would not benefit us, but most of it gets neutralized on account of the premium that we draw from the marketplace on account of the brand marketing that we do -- the brand premium that we get.

[Ajay Thakur, analyst]

Understood. Sir, also I wanted to understand a bit more on our oral care market share. How has the trend been shaping in terms of the oral care share for the last quarter and for the year FY '25? Some light on that front could help.

[Sanjeev Asthana, executive]

Sure. So oral care, this was the first full quarter, of course, that we saw, but knowing the background of the overall oral care, I was just answering actually earlier also in the same part. The overall category that we are seeing, the typical growth is about 5% to 6% year-on-year.

We are pretty confident of achieving 10% growth in the oral care, largely driven on 2 levels. One is by the product innovation and a much deeper segmentation that we have to drive in the oral care categories. So that -- there is a reasonable confidence that we should be able to achieve it. So there's a core that we have and on the oral care that has been built over the brand equity that the company enjoys.

I think now riding on top of that in terms of bringing in new customers who can start to relate to Dant Kanti, the new variants, getting a completely entire segment of population, which would like to try different variation of Dant Kanti, I think that is where the big effort of the company is making. And we got in the brand ambassadors in the form of both tamannaah Bhatia and Tiger Shroff. We continue to sort of expand that distribution in different geographies.

So there are -- so part of the growth will be a secular growth that we have seen in the Dant Kanti category itself as in Dant Kanti Natural and the balance part of the growth will come through -- largely by the new launches and the segmentation that we're trying to drive with -- really position the products to a particular segment that should drive the growth for us.

[Operator]

The next question comes from the line of [ Naitik ] from NV Alpha Fund.

[Unknown Analyst]

Sir, can you please give me the breakup of sales for your full FMCG and for HPC for 2025? The breakup of sales in staples, ethnic, honey, ghee, and then in HPC.

[Sanjeev Asthana, executive]

Yes, I can. So in terms of the -- our breakup is that the consumer staples in the food for this year, we have done INR 3,756 crores. And in the ethnic foods, we did INR 2,451 crores.

[Ajay Thakur, analyst]

Right. And for honey and ghee? Specifically, for honey and ghee?

[Sanjeev Asthana, executive]

Ghee, I don't have that specific number right now. We did about INR 1,100 crores of revenue for the full year on the ghee side. And honey number, I can share that with you.

[Ajay Thakur, analyst]

Sure. And same for HPC, sir, the home and personal care categories?

[Sanjeev Asthana, executive]

So home and personal care revenues that we have right now, I can share that. Because I can just share with you only for one quarter. And so revenue that we -- for the 5 months, I'm sharing now. For dental care, we did about INR 625 crores; skin care, we did about INR 280 crores; for home care, we did about INR 145 crores; for hair care, we did about INR 95 crores; and the others from about INR 10 crores. So total, about INR 1,150 crores in 5 months.

[Ajay Thakur, analyst]

Right. INR 1,150 crores for 5 months. So sir, my question is last year when we merged -- when we spoke about acquiring this business, the top line was close to INR 2,700 crores, INR 2,800 crores, right? So compared to last year, is this top line lower now?

[Sanjeev Asthana, executive]

Yes. So I mentioned that this integration process is time consuming. I think from this quarter onwards, you will see more consistency in the revenues. We had stated that right in the beginning also, that the first couple of months are going to be time of integration. So for example, getting their full teams aligned, the distribution networks are done getting all the distribution structure in place, integrating them to go through on the SAP systems, et cetera, has taken its time.

But this quarter onward, we expect this operation to completely stabilize. Integration is now done. And we should get on to the growth path of 15% from the time of when we acquired the business, we should achieve that 15% growth. It will -- sequentially, it will start building up. But for the year, our conviction is that we should get the 15% growth rate that we have stated.

[Ajay Thakur, analyst]

Right, sir. Just one clarification. The 15% you're talking about would be on a base of INR 25,00 crores or on INR 2,800 crores?

[Sanjeev Asthana, executive]

INR 2,800 crores. INR 2,794 crores if I remember my number right [indiscernible]. Yes.

[Kumar Rajesh, executive]

Somebody wants to -- hello? Somebody wants to know the figure of ghee sale, I think?

[Ajay Thakur, analyst]

Ghee, I think they mentioned INR 1,100 crores or honey...

[Sanjeev Asthana, executive]

So we got the number, INR 1,286 crores for the ghee sales. Honey, I have the number now, it is INR 324 crores for the full year, yes.

[Operator]

The next question comes from the line of Vishal Gutka from ASK Investment Managers.

[Unknown Analyst]

I just want to understand your thoughts on palm oil business. You told like it is lower margin versus the other 2 businesses. Just wanted to understand your thoughts why it is so, why it is like that?

And second question is the Palm Oil Plantation business. You told you did around INR 12 crore EBITDA for the quarter. And for the full year, number was around INR 203 crores. So there seems to be a big variance in terms of quarterly and annual performance. Can you please explain the same?

[Sanjeev Asthana, executive]

No, no. It's just a regular seasonality part of it. So typically, what happens is a seasonal impact of palm this year. Now that it's a peak season, which is going on. So this quarter, the numbers will entirely change in the Q1 of this year. So it's just a seasonal variation, it is there. So that's why this number was there.

[Ajay Thakur, analyst]

First half is heavy? First half is heavy?

[Sanjeev Asthana, executive]

Yes. So when there is -- so how it works is that when the peak harvest going on, at that moment, what happens is that you're doing a lot more processing, there's a lot more operation going on, lot more business goes on. And then it tapers off towards the -- in the subsequent months, in the Q3 and Q4 typically. That's why you will see some bit of tapering on. And there's some cost allocations and otherwise, which is there. So that's why typically, this ration you'll see, but that evens out that part of the annual number, will pretty much stay stable at 16% to 18% EBITDA that will [indiscernible]

[Ajay Thakur, analyst]

Got it. And so on the palm oil business, why there's lower margin versus other 2 oils? Can you explain?

[Sanjeev Asthana, executive]

Yes. So typically, what happens is that palm oil is seen more as a commodity sort of a play. And the business is done largely to the institutional players. But there's a big segment in the palm oil, which also is in the branded farm, especially in South India, where there's a recognition of the brands. There is a -- the consumer is asking in a particular brand of palm oil because that is used in the household cooking in large way in South.

So that is why the palm oil typically tends to be much more the margins tend to drag a little in the consumer, especially if you look at the front end, the retail sales level, where we tend to see the lower margins in the palm oil compared to soya and sun, where the consumer's brand recall, the outlets from where it gets sold, the consumption pattern that has demonstrated, the SEC A and B class customers are much more aligned towards soya, sun, mustard, cold pressed oil, sesame, et cetera, compared to palm.

That's why typically, at the front end, you will see that the palm oil margins typically will tend to be lower at a sales level. But on the supply chain side, if the efficiencies, et cetera, are typically good, so the run rate that we've typically seen is that of the 70% volume, 50% margin -- some years, it could vary as well, but typically, 50% margins would accrue out of palm oil, which is a combination of the premium that we get on Ruchi Gold as well as the value that we derive on our supply chain efficiency?

[Ajay Thakur, analyst]

Got it, sir. Just a short question on this EBITDA per ton from palm oil, INR 1, 000, INR 1,500 kind of number, but before you were closing the range of INR 2,500 to INR 3,000 number...

[Sanjeev Asthana, executive]

Yes. So I'll explain that. So the -- what we do is a typical estimation that the brand premium that we derived is that number when I spoke about is typically about INR 1,000 to INR 1,500 a ton we derive on the palm oil. About INR 2,500 to INR 3,000 we get on soya oil and about INR 3,500 to INR 4,000 is typically what we target is for the sun oil. And for mustard and cold pressed oil, et cetera, were significantly higher. So typically, that's for the front-end margins.

Now at the back end, when we're talking of the building up supply chains, the origination margins, et cetera, they may vary because of the movement in the price of the [ sector ]. So the idea is that we evaluate ourselves on twin parameters. One is the efficiency of supply chain that we should be consistently better on bad days market prices on the bulk side because of the efficiencies that we derive on account of risk management, supply chain and the origination.

And on the market end, on the distribution side, we should be able to consistently on our brand premium and margin. So the 2 are totally distinct sort of strategies that we follow. And that is why I mentioned about the higher margins in other oils and the palm typically would consistent margin creator. And it's a very critical -- core products for the company.

[Operator]

The next question is from the line of [ Sirish ] from [ Motilal Oswal ].

[Unknown Analyst]

Sir, can you provide this 25 lakh ton -- what we have sold in edible oil, what is the broad volume breakup of each segment?

[Sanjeev Asthana, executive]

Yes, I can. The overall quantity that we have done is 23.64 lakh metric tons, 2.36 million tons. Out of this, 10.5 lakh tons is palm oil, 5.4 lakh tons is soya bean oil, 60,000 tons is mustard oil, 1.4 lakh tons is sunflower oil, and the balance would be the other oils.

[Unknown Analyst]

Okay. And on the front end, broad breakup of brand side, Mahakosh and other segment, if you have already?

[Sanjeev Asthana, executive]

So the -- so as I told you, 75% of the volume that I've told you, it gets sold pretty much across the categories. So sunflower, for example, 100% would be branded. There's no bulk sale. Soya bean, typically, our sales would be almost about 80% to 85% entirely in the branded category. Palm oil, as I mentioned, will be close to -- about 70% typically would be in the branded form, and the balance would be in the form of the bulk, institutional sales and otherwise that we do. And rest of the oils, like mustard and others, they are 100% branded form.

[Unknown Analyst]

Sir, because -- it's just understanding, what would be the total sales for FY '25 for Mahakosh? Because I think you've seen a lot of ad spend and a lot of activities around that brand.

[Sanjeev Asthana, executive]

So for soya bean oil, Mahakosh, as I mentioned, close to about 75% would be the branded. So it would be about 4 lakh tons plus is what we would have done in the branded form.

[Unknown Analyst]

Okay. Wonderful. My second question on OPP. 45% is the number which you have shared in terms of 7 to 25 years aged. So I was just more curious if this revenue is going to be a positive momentum in terms of margin and growth. What is the number which you are expecting in terms of -- maybe in terms of volume value contribution for FY '26?

[Sanjeev Asthana, executive]

Sorry, I didn't get your question right.

[Unknown Analyst]

So in the presentation, you said that 45% of our oil palm plantation is in the range -- in the age of 7 to 25 years. So I was just expecting what kind of output we can expect from this in FY '26? Maybe it's volume or value, whatever you can share.

[Sanjeev Asthana, executive]

Yes. So in the palm oil plantation business, I mentioned that we did a revenue this year of INR 1,263 crores, which itself was a growth over INR 951 crores that we've done the previous year. Part of that came through the volume growth and the balance came from the price inflation that we saw.

So each year, we are expecting that this revenue to grow close to about 10% year-on-year as the more plantations come in. And the momentum will pick up from -- in fiscal '26, '27, when we expect that the pickup in the plantation that we -- the driver that we took 2 years back, some of that should start coming on stream. In '27 '28 onwards, we should see minimum 25% growth year-on-year on the oil palm plantation side.

[Unknown Analyst]

That's really, really helpful. Last question on the distribution front. You mentioned about 2 million is the coverage, which we have. So when you look at this 2 million, is the total or it's direct distribution?

[Sanjeev Asthana, executive]

This is a direct distribution. And our estimation is that more than 100% of this. 1:1 or maybe even 1.25x of this should be in direct distribution. So all the sort of -- currently, we -- our products are available at more than 4 million retail outlets, 2 million directly, which is tracked by the company. And that with the HPC business and the expansion that we are seeing should continue to see a substantial uptick.

[Unknown Analyst]

Okay. Now the reason why I'm asking because there is a variation, which we have seen in terms of staples, foods and -- versus personal care and HPC business, which is around 15%. So I'm more curious, if distribution is the angle, which is driving HPC, which are the pockets where we are seeing the diversion for the food versus such FMCG or HPC in terms of quarter which is gone by? And some color on the demand situation at this point.

[Sanjeev Asthana, executive]

So 2 sites, which is -- for example, that in terms of reach on the food side, we typically see the strength profiling and in terms of where the brand equity is the highest with the distribution reach is way better, that our markets are northern part of the country, the central part of the country, Western India, are the leaders in terms of where we currently stand, and we do well.

In South, we are expanding our distribution reach to better levels. There are certain product categories, which typically tend to be less appealing in South, but that we are correcting the course, as I mentioned, about the segmentation and distribution that we are working towards. And similarly, in East and Northeast, we need to do some more work. So broadly, the idea is that progressively, we should take our direct distribution reach to 4 million.

And so growth will come from 2 areas. As you repeatedly mentioned. One is that expanding our distribution. Obviously, there's a lot of headroom to growth that we have. And second is, the markets are tending to divide themselves in a very -- a much sharper focus in terms of which segment is consuming what product categories. So that work is going on quite seriously that we want to drive much more customized, much more oriented, focused product launches to achieve this growth of 15% that we set for ourselves in the HPC.

[Unknown Analyst]

And in terms of demand, any reasonable....

[Operator]

Sir, may I request you to rejoin...

[Unknown Analyst]

No. I'm done. I mean I asked the question. I'm just expecting the answer.

[Sanjeev Asthana, executive]

Yes. So just a quick one. So on the demand side, what we're seeing, there is a reason variation clearly, and that's pretty significant actually. So both in terms of the -- so for example, in the oral care. So the natural toothpaste category, while very popular, we see that north, central and west is much more larger. And similarly, what we see in south is that it's lesser. So there, we are launching different kinds of products.

Likewise, in the HPC home care, we find that consumers have very different sort of choices when it comes to deciding as to what kind of products they're consuming and what brand. So that is being addressed. And we realize that one of the core things about complexity of India is very much that addressing the markets specifically will make a big difference. So that effort both through data analytics that we have in terms of the market research that we're doing, the new ad campaign that we followed and researching on that, I think we should be able to address -- wherever the gaps are there, we should be able to address it efficiently.

[Operator]

The next question is from the line of Abhijeet Kundu from Antique Stockbroking.

[Abhijeet Kundu, analyst]

Sir, congrats on a good set of numbers. So going ahead, I was just looking at the construct of margins. So say in edible oil, when I look between edible oil into food products, I mean would it be right to say that food products margins were impacted because edible oil margins were higher because there was inflation in edible oil, which helped edible oils margins? And on the other side, food margins were impacted. And so would there will be an interplay? And how do we see it? Because going up your food margins on an annual basis has actually halved. So I mean, not half, but gone down by about close to 489 bps.

So going ahead, if we have to look at improvement in margins. So what -- is there any interplay because vegetable oil prices have been higher and it has been impacting food margins across the board, not only your company. Other players have also got impacted by the higher vegetable oil prices. And also wheat prices have been higher. So there has been a -- from other companies, what we understand is there is a moderation -- expected moderation in wheat prices as well as there is a expected moderation in vegetable oil prices.

So how that -- what do you expect? How should that play out for you next year? And how can you come back to that better margin? Because food margins would absolute -- EBITDA is also very important. If this actually -- if they do well and you are able to sort of not retain, but at least be closer to your previous margins in edible oil, you should see a better margin profile and an earnings EBITDA growth profile.

[Sanjeev Asthana, executive]

So this year is, Abhijeet, pretty exceptional. I think a very good question because I was hoping that somebody is going to ask that. I think 3 things have largely been responsible for the change in the margin construct. One is very clearly, the high commodity prices. So palm oil, for example, this year was almost elevated between 30% and 40% almost through the year. The sugar prices were up between 2% to 5%, and the wheat prices were up 12% last year.

Similarly, we saw at the wholesale level, the commodity inflation. The paddy prices were up between 5% to 8% consistently. So -- and all these are very core products, which typically go as a raw material into manufacturing of the -- many of the FMCG food businesses. So they tended to impact quite a bit, which is where we saw this drop in the margins.

Likewise, so it impacts, for example, what, it directly impacts thing like atta and rice and the palm oil itself, the demand side, it impacts directly our biscuits business a lot. So all those have been part of the challenge here that we faced. And so this year, it's -- I'm expecting this to taper off. So this would have an interplay between the margin, as you rightly observed. And I believe that we should be mindful of this factor, which typically tends to have some play.

And my only suggestion would be that -- and the guidance that we have internally within the company, I'm seeing, a, that the food -- also the fast commodity prices, the government is working extra hard to ensure that the prices are stable. International prices, we have very little control over. So government has a duty sort of at its control to control that. So broadly, the interplay will remain.

Now coming to the point of that where it is going to less slightly impact and how we should be addressing this -- the price inflation, which has an impact on the margin. I think this is something which is -- which the company is very seized of. So we are tightening the areas where we need to control these prices. But this impact, we cannot deny that many of the food product companies will typically tend to face this problem on the food inflation side if suddenly we see a big spike on the commodity prices. So it does have an impact both on the sales as well as on the margins.

[Abhijeet Kundu, analyst]

Okay. So essentially, we have to just look at the blended margins between oil and food product sort of [indiscernible]

[Sanjeev Asthana, executive]

I would say, Abhijeet, just one correction, that don't look at oil alone. It's a basket of commodity prices, which has an impact on overall on the food portfolio. So besides, for example, it depends on sugar and fat, which is palm oil and wheat prices. And likewise, most of the products which are directly for wheat -- for example, directly linked to the wheat prices. And typically, the ability to pass on the product, the commodity inflation on to the consumers in all cases is not there.

So margins get squeezed in that. So it impacts both the demand as well as the -- so the consumer tends to move to a lower brands or cheaper prices or they would tend to sacrifice on the margin to continue focusing on the volumes. So that is the interplay which will always have an impact. But we are pretty confident that between 8% to 10% margin construct that we've always maintained in the food business overall, we'll do that. This year also, we did about 8.35% margin overall in the foods portfolio, FMCG. So we are pretty much in the range of what we projected. But yes, you're right, that has dropped from 13.18% last year to 8.35%. But this would be more a temporary phase. We are expecting this to be [ for us to tide over it ].

[Abhijeet Kundu, analyst]

Structurally during FY '26, giving -- I mean, looking at the moderation in inflation across prices, you should be -- you should benefit on the food product side. And edible oil, the margins may not be as high as for FY '25, but it still would not really see a substantial decline. And what is important there is what is the kind of volume growth that you expect in edible oil during -- I mean in FY '26?

[Sanjeev Asthana, executive]

So to answer it, it's very important that from a guidance perspective, we are reasonably certain that between edible oil, foods and HPC, we should meet all our objectives, what we have said. So between 2% and 4% margin on the edible oil, more at the higher end of the margin construct. Food margin, 8% to 10%, we should pretty much definitely meet. And likewise, for the HPC of 16% to 18% is where there, we should see construction growth that should come in.

So these are overall conviction that we should be able to do that. On edible oil, though, the growth that we see in the volumes is typically between 2% and 3%, and that we are pretty confident of getting it back this year. So palm oil was a very typical year that we saw that would -- that's pretty much -- the palm oil price has stabilized, so I'm not expecting any slippage on the volume numbers.

[Operator]

Ladies and gentlemen, we will take that as the last question. I would now like to hand the conference over to Mr. Sanjeev Asthana for closing comments. Mr. Asthana?

[Sanjeev Asthana, executive]

So with this, I thank everyone for having participated quite actively. I'd like to sort of conclude the call and -- with this and look forward to your continued support and guidance. Thank you so much.

[Kumar Rajesh, executive]

Thank you.

[Operator]

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