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Ladies and gentlemen, good day, and welcome to S Chand and Company Limited Q1 FY '24 Earnings Conference Call hosted by Prabhudas Lilladher Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. Jinesh Joshi from Prabhudas Lilladher. Thank you, and over to you, Mr. Joshi.
Yes. Thanks, Nirab. Good day, everyone. On behalf of Prabhudas Lilladher, I welcome you all to the 1Q FY '24 earnings call of S Chand Limited. We have with us management represented by Mr. Saurabh Mittal, CFO; and Mr. Atul Soni, Head of Investor Relations department. Due to some unforeseen circumstances Mr. Himanshu Gupta is not there on the call today. I would now like to hand over to my management for opening remarks. And after that, we can open the floor. Thank you, and over to you, sir.
Thank you, Jinesh. Good afternoon, everyone, and thank you for your time. I'm Saurabh Mittal, CFO at S Chand. I would like to welcome all of you for the first quarter results conference call for FY '24. And thank you all for taking out the time and joining us here today. I'm extremely happy to share that Q1 FY '24 has been an exceptional quarter for S Chand. We had the following landmarks during the quarter. S Chand Group has turned net debt free with quarter ending net cash balance of INR 546 million. We have the best working capital metrics for receivables and net working capital in Q1 in the company's history. Our highest ever Q1 sales, highest ever Q1 gross margin as of Q1 EBITDA. On the cash flow front, we have maintained strong operating cash flows versus last year. As we have now firmly entered FY '24, we see that schools and colleges are back to the [ 3 cover ] schedules with regard to [ missions ], school openings, [Indiscernible] et cetera, which has reduced the uncertainty in business, it has increased the cash flow cycle of the school [ fund ] partners and distributors, which has effectively improved the variation from the channel during Q4 FY '23 and Q1 FY '24. On the National Curriculum Framework our [Indiscernible] the amount of NCF covering the foundation stage, classes kindergarten to Class 2 last year in October '22. We'll get further to more such announcements for the other classes coming through over the next couple of months. The NCF opens up a large opportunity to provide engaging and innovative content to students, teachers to make the learning more experiential. The NCF focuses on activity-based learning and provides such flexibility to students to choose between subjects. This will help the company gain market share with its brand and strength with our portfolio. We expect to launch over 500 new [ SKUs ] in the segment this year. On the higher education front, the last few years for academic cycle and various universities was disrupted during COVID [Indiscernible] with semester starting in [ late ] November. This year, we have seen the results being announced after pre-COVID timelines and [Indiscernible] also are completed on time. This ensures that the new semester will begin in July, August, and [ normal curriculum ] will return from this year onwards. [ NEP ] has been implemented in a few states where we have seen strong traction for our products, which are based on the NEP. On the tech investment front, we have invested INR 30 million for a partnership with the minority stake in ixamBee in April 23. We believe ixamBee is well suited to benefit from the rise in the competition segment in the future by helping graduates and undergraduates prepare effectively for government examinations like banks, insurance companies, railways, et cetera. S Chand is already partnering with ixamBee in other [Indiscernible] examination-oriented products. Our other investments [ maturity labs ] saw strong results as well. On the asset side, S Chand Academy continues to [Indiscernible]. We have now launched over 1,500 videos focused on high education topics covering science and [Indiscernible] so far and its channel launched of 15 million views and approximately 120,000 subscribers. It further need the promotion of our content. Further for demand in segments was [Indiscernible] offer. This channel enables students to learn critical areas with top-notch education, which may not be available in Tier 2 and Tier 3 colleges. We expect to add another 600 videos of both the school and [Indiscernible]. [Indiscernible] to cover over 50 plus government vacancy tests which is a huge market. We are adding future apart from [ doctors ], there will be concert video about fashion, et cetera. We expect increase in environment vacancy now once things are normalized post-COVID and with elections due in 2024, which is further demand. Lastly, our new curricula, which is activity-based [Indiscernible] the NCF continues to gain traction across schools in India. [Indiscernible] solutions also continue to provide holistic learning, which [Indiscernible]. Now coming to the numbers for the quarter. Our consolidated operating revenue came at INR 1,911 million versus INR 1,073 million during the same time last year. We have proved our gross margin to 69% of 67% in spite of a sharp increase in paper prices as we did better planning of [Indiscernible]. With the IS Q1 growth driven revenue and gross margin in the company industry. EBITDA profit of $136 million versus EUR 119 million in the first [Indiscernible] year is the IQ EBITDA in the company interest. As it shows that this quarter, we continued with tax profitability in Q1 with profits of $1 million versus $62 million in the same period last year. There was profitability driven by other income, which we have a onetime gain on a counter fair valuation of our investment exactly of $105 million in the same period last year. I would like to bring your attention to Slide #6. To Slide 6, Page Slide #9, which showcases the result as such set during the past few years...
Sir, we lost your audio when you were going to the slide discussion. Can I ask you to come closer towards the speaker on the phone.
Yes. I would like to bring your attention to Slide #6 to Slide #9, which shows you the result of the steps taken during the past 3 years towards building a cost-effective and lower working capital organization with focus on positive cash flows. Trade receivables reduced to INR 1,732 million during Q1 FY '24 versus INR 2,109 during Q1 FY '23. This is a INR 35 million decrease in receivables year-on-year. In terms of [ refining base ], it should stay at 3 days versus 139 days, a reduction of revised base over the previous period. The lot Q1 repeat in the company's history. Inventory recused slightly to INR 1336 million versus INR 1362 million on the back of higher level of raw material inventory. This increase in inventory is due to the uncertain rise in paper in the year. The inventory level includes the raw material trade inventory of INR 371 million versus INR 301 million last year. In terms of inventory days, we improved our last -- [Indiscernible] a reduction of 9 days in FY '23. Net working capital reduced to 143 days versus 15 days, which is a reduction of 90 days over the previous year. This is the lowest net working capital days in Q1 in the company's history. In terms of debt, we ended the quarter with net cash balance of INR 546 million versus a net debt of INR 279 million in the previous year of first quarter and gross debt of INR 906 million versus INR135 million. In terms of cash flow, our strategy of focusing on cash flow has ever with where we ended the quarter with OCF of INR 691 million in the current quarter versus INR 63 million in the same and last year. As we continue into FY '22, I would like to reiterate for this year. Firstly, we are looking at the annual revenue between [Indiscernible] is transferred into 18% to 20% growth for the year. Definitely, we'll be taking a similar price across our product portfolio. For gross margin can include paper prices stabilize or decline during the year. Hopefully, we are targeting EBITDA margins of 16% to 18%. Firstly, we look forward to the announcement of the some [Indiscernible] in the calendar year '23, which helps in volume expansion. This should lead to strong volume, revenue and profitability growth for the next 2, 3-year period. With this, I would like to open the call for questions.
Thank you. We now begin the question and answer questions. [Operator Instructions]. Ladies and gentlemen, we will wait for a moment on the question queue assembles. First question is from the line of Mr. Niteen Dharmawat from Aurum Capital.
I just wanted to know how the trend of paper prices now, if you can throw some light based on the current price movements, especially the printing paper that we are using? And secondly about how much inventory we are maintaining, has the -- compiled the entire inventory? Or are we going to build the inventory in case the prices are going up again?
Yes. So paper prices are down about 8% to 10% from what we bought last year. So as at this point of time. And just to reiterate that we have already contracted almost 60% of our supplies for import from Indonesia. So the prices are fixed for that period and that supply would be between September to December. In terms of holding inventory, of course, we cannot hold a long period inventory maximum inventory is 25 to 60 days. So that should have a lot of space. So we will struggle supplies and don't see a change as of now this year in terms of building inventories as and when required. We're not holding to much of inventory, but we've already replaced orders for most more imports and for the domestic market are required in October already.
My next question is about the impact of the NCF, which is coming up. So we had given some revenue production number. So do we maintain the same? Or are we having any change on it?
No, we are maintaining our number. And in fact, as and when the NCF comes this year that for this per demand. Having said that, we are well prepared in terms of the content already because the draft NCF is already available and largely, it's around the [ MAP ] and NCF. What is already known, what is already in progress for that? And once the NCF is launched, our products will be out in the market shortly after that.
Got it. Final question is about how is the current quarter going on this quarter the second and third quarter, especially are not very strong in terms of revenue for our kind of business. We have seasonality build towards the end of the year -- but this year, I wanted to understand, is there any change or are they in line with the sale of last year?
Yes. So we are largely focused around higher education. So with colleges opening up, we see that higher education on the [ textbook ] segment should have a strong Q2 and Q3 is largely around the motion of your products to schools. And so that's -- and of course, settlement of your accounts with the channel partners. So we don't see a challenge in any both of these. And of course, revenue numbers don't -- are not very high for both of these quarters. We do see the other metrics that largely will be well in line.
[Operator Instructions] Next question is from the line of Riya Mehta from Aequitas Investments.
My question is in regards to how is there an option [Indiscernible]?
So last year, it came around October since it had come in very late, the promotion season already starts around September to December. So while there was some traction, but of course, it is not that substantial. But what happened is to do it largely want to take the plans together for most of the classes. So I would say last year impact was 20% to 25%. Part of that impact would be seen in the current period. And of course, with the balance classes coming in the current year as a entrance, we should see the large impact across the next 3 years.
You said that every year we would see some 20% to 25% impact, so we see that kind of traction from the cost where they is acquiring [Indiscernible]?
See, we will be in a better situation to understand this probably more like October, November. I think the Q2 call, we will get a better sense [Indiscernible] is out by then. And so the commission season would start on September, we would have a lot feedback in terms of how schools are looking forward to the NCF. Our preliminary discussion that we've had along with the feedback of the school based upon the last year's interaction with schools is that we are all looking forward to the changes in the NCF and there is preparation in place. And there's a lot of strain that is happening across from CBS and for the schools in terms of an option of the education policy in the NCF. So the [Indiscernible] is there, and we will see the transaction happening over the next 3 years.
My second question is your price simply taking on or significant tie. Have you seen any impact on the volumes or any color drop because I heard some competition that is seeing similar kind of traction that the customers are not very [Indiscernible] because of the current scenario?
In terms of price [Indiscernible] do see much of an impact in terms -- I mean, in some pockets, I would say, which is about 4%, 5%, 10%, there will be some intent there are some schools which have in prices still. But since the [ CBFI ] segment is the most of the publishing take a price hike where in between 15% to 30%. So we will see much of a challenge in terms of volumes there. And we at had higher volumes in the last year as compared to the previous year. And again, that could also be a function of school reopening after COVID. So -- and to be honest, we got some feedback, but that was not a large feedback that price hike is investing the volume also.
And to the station a single-digit dry high. So you -- are you pursuing any cutback comments on schools or something where they would go to our competitors in live?
So it's a single digit around 6%, 7%, that is what we are looking at. And again, very selectively across products that's heated average that we have seen. But in March in the IB, we don't see an impact because in some years, of course, we did not increase prices also, but then that is per volumes to that extent. So in terms of our products, which goes, it's a lot of adoption product, which a school adopts and when the students have to buy the books. So we don't see much of an impact in terms of that kind of a [Indiscernible]
Are you adding any new tools recently?
So this is this year on activity where we continue to engage with through workshops through various interactions with them throughout the year. And the adoption, of course, do increase as we [Indiscernible] of course, current period of a second quarter, there will not be any adoption. The adoption will start from the end of the third quarter and then finally add up in the fourth quarter. So for the current period of last year, we did have a lot of school adoptions.
Got it. And in terms of raw material is almost 60% of our importers already being contracted for to lower prices to the 8% to 10% and the lower paper prices, we wouldn't get any benefit in the current year. Is it better again?
No, we will be benefit because, again, the contract has been at a lower -- a further reduce, of course, we may not. But currently, a few time, we don't see a substantial reduction in paper pricing if the reduction had to happen, it would have happened by July, August. Beyond this, the paper purchase will begin for the production industry, and we would see paper prices will be going up. That is what we understand. _
No, we will answer your question, we will get the positive impact of this lower price in this sales season itself.
So we would get some kind of positive impact in this season?
Obviously, now, Currently, we have only INR 100 crores of inventory. And if you look at our guidance, it is at around INR 720 crores to INR 750 crores, right? So there is a huge gap at the paper, which we bought over the next 3, 4, 5 months will be used in the sales of the sales season. which is in Jan till March.
Okay. But the contract typically work on the prices that have been decided as of today, right, or even when the contracts have been signed.
No, the prices of -- or the import the prices are already fixed for the supplies up to December. And for the others, we'll continue to negotiate the grade -- of course, we get 60% fixed, 40% available interest it goes down, it will definitely deliver...
And my last question, are you seeing any returns from the Jan to March season, currently?
So we look at about our average returns have been reducing in the last 2 years. We hit a peak of 25% to 26% in 2 years of COVID. Last year, we were down to about 15.8% ,this year, we're estimating on about 13%, 13.5%. So that will be very careful in time in terms of the quality of sales that we are doing. Returns are coming in, but they are largely in line with our expectations.
So majority of the returns come in from August till October, let's say.
Next question is from the line of [ Manan Paul ] from Mirawa Capital.
Congratulations for all on very good performance. Sir, first question is regarding the gross margin. So when you say like you will take a price hike and the paper prices have reduced, at least the 50% of your inventory. So your gross margin should improve. So when your EBITDA margin guidance of 16% to 18%, does that bake in the gross margin improvement or we can see further improvement if the gross margins are better?
So see, this year, actually, we have given an EBITDA margin guidance because in case the NCF comes through, there will be some extra spending in, let's say, marketing activities. So we are not trying to pin down the number for the gross margins there, and that's why we have kind of given a guidance of the EBITDA range. Obviously, there can be upside, but these are a couple of moving variables. So we need to kind of see how it stands alone.
Understood. Sir, the second question is on the NPL itself. So by what time does NPF needs to be announced for you to have the benefit in this year itself?
So the [Indiscernible] better for us and for the industry. But having said that, I would say [Indiscernible] looking at the change in the products -- product portfolio. So hypothetically if it doesn't come this year, there will be a lot of products going out in the market, which will be aligned to the draft NCF. So I think a formal announcement probably state demand. But even if it doesn't come in, it should not impact us too materially because, again, a lot of schools are looking at changing the list of books that they one products are coming up for us. Obviously, we're looking about 500 plus [ SKUs ] across subjects. So that will definitely get a [Indiscernible].
Understood. So sir, your guidance of INR 720 crores to INR 750 crores of sales, does it factor in NCF and if NCF doesn't come, how does that pan out?
So INR 720 crores is the base. I think it is business coming in '25 definitely will be done. And the answer last comment, you can look at number it will go beyond INR 750 crores.
And sir, you mentioned about adding new schools. So I just wanted to understand like how competitive is the market and how difficult is to add new schools? And when you add your schools, are they completely new schools open for pools are moving from other vendors this is a competitive scenario in [Indiscernible]
So it is a competitive scenario. I think there are a large number of companies that provide quality content to schools. Some international positions and some good domestic drive also there in the market. So competition is definitely there. We try to engage the schools more with multiple interactions, including a large number of shops with them helping their teachers teach better, subject [Indiscernible] a lot of other interactions that we do with them. So in terms of increasing number of schools, of course, we look at multiple things. One is when there is a new school, which is not a user school, that comes on board? Or is there an existing school which is using only 1 or 3 subjects, we can increase that to mantras or there some schools, which will move to a complete book list, which is that they will adopt all the books from the company. Plus, of course, we do have recurrent products, which is different to where the school does take on the full curriculum from us. So we have [Indiscernible] product lines and which are very strong with crops and that is what we tend to expand. And so that promotion will happen this year.
And sir, I sorry to harp on this. But as you mentioned, there is a good and strong competition in the market, but they would also be -- is taking a similar tight. So just wanted to understand what is our competitive advantage? Is there an unorganized market which you can take to can you explain that a bit more?
Yes. So there is an organized market, which will not be able to ramp up to [Indiscernible] so that's one advantage. Second, in terms of financially, we are very strong over the last couple of years, we've built our own watches to go on and to be able to promote the schools freely rather than the kind of restriction that we had a couple of years back. [Indiscernible] we know what we want to do at this point of time. There was a lot of clarity in the kind of product portfolio that we have, we plan a launch in terms of products, in terms of promotion, in terms of engagement. So we're very well focused. There are some players who are having their own challenges in terms of funding, having their own can some international publications have sold out, which are having own internal issues. So we have taken advantage of that in the previous year, and we'll continue to gain market share in account of that.
So [Indiscernible] I want to give you a flavor of the landscape, there will be thousands of publishers, okay? But in this year, when the NBA comes, only a handful will be willing to elect in including the new kind of content which is there. Every publisher is not going to do it, right? So I mean, as it is with the market -- I mean other competition becomes from thousands of publishers to a handful. So that is where the differentiation comes to for the customer also to see. So the customer is also seeing which companies are kind of giving information or workshops or training around what is going to come this year. So that, I think, will be a bit differentiator when it comes to choosing your content partners in the new NPAs. So I think that's the way to kind of look at it in terms of competition.
That's very helpful, sir. And then the last question on the capital allocation side. So now that we are a net cash company. I understand that you have seasonality in terms of investments in working capital. given the cash flows that you are generated and you started with dividend proves -- so can we expect any organic good for your company apart from the small investments that you've made, can we -- do you look forward to inorganic investment in your own business?
Yes. So we are looking at it right now also. We've taken approval from the Board to the kind of set transaction share details unusual something. I think not too significant. But again, we look at any strategic investments where we have gaps in our own portfolio, we still been up, and we will continue to look at that. But we will do whatever we do with investing cash flow that comes from tens you want could you any investments. So we are looking at transaction once these finalize, we will definitely announce it.
[Operator Instructions] Next question is from the line of Raj from Arja Partners.
Sir, I just did the part of the EBITDA front. How much of EBITDA we have... Guided for FY '24?
It's a math of 16% to 18%.
16% to 18% of EBITDA and on the sale of INR 120 crores to INR 750 crores, am I right?
Yes, that's correct.
And also, how many SKUs are we planning to launch?
Around 500 plus.
Around 500 plus. All right. All right.
[Operator Instructions] Next question is from the line of Niteen Dharmawat from Auram Capital.
I was not very clear about -- you mentioned about the acquisition possibilities, right? So whatever size we are looking for, if it is acquisition in...
This is very small. I mean it's not a really large one that you're looking at. It's a very huge kind of I can't share the details because, again, we are in NDA right now and in a hit yet, but it's not a very large and location with approval. And we've taken a border of paleo about up to INR 200 crores. So in our cash.
So this is also documented in the exchange release. We have taken a Board approval of INR 220 crores.
[Operator Instructions] Next question is from Riya Mehta from Aequitas Investments.
So gross margin as a current gross margin during quarters are derived for the next half year.
Fourth quarter is slightly normally higher by a couple of percentage mix, second quarter, third quarter, the volumes are lower. So we come down, but tie overall on the filler level.
So we have to see. I mean, it depends on how the paper price is moving.
Yes, since 60% prices have been contracted. So I think we would have a fair sense of growth.
Still... See, the thing is that with regard to paper prices, very fluid. So 60% is contracted. That's for sure. I think that's why we have tried to give an EBITDA margin band, and we are working with that.
most to talk on that area, I mean, again... The quarter-to-quarter EBITDA guidance don't really well was the product portfolio across the quarter cans. Q1 was around plus 9% to 12% looks at a slightly higher price timelier and more reference looks. So there you would have a slightly higher margin as compared to the quarter to quarter 3 where high-education comes in that the margin is growing slightly lower. So the product portfolio across quarters, which goes to the market, there might be a 4%, 5% cap shares. But overall, for the full year, I think we should be slightly higher than what we were last year. And -- but litigation quarter-to-quarter basis, it was a bit saint.
And in terms of report and holistic, what would be our breakout from paper prices?
I said that before, 60% and 30% optimistic.
Okay. And the holistic is [Indiscernible]
The domestic, we haven't contracted. We are just giving orders and order to order base. So we're not contracting yet.
Next question is from the line of [ Punit Mittal ] from Global Core Capital.
I just had one question regarding -- again, on the capital allocation. I reckon the numbers that we suggested you are looking at more than INR 100 crores plus of free cash flow. Now unfortunately, the reinvestment opportunities that you have is very low, as you had mentioned. And our return on capital employed and return on equity is low because naturally, we have large capital employed, and we can't change the numerator much because that growth does not seem to be very high and the investment opportunity doesn't seem to be very high. So the only way for you to improve the ROCE and ROE is to reduce the denominator through capital -- sorry, share buyback or or return of capital. So what is your thought around that to improve the ROCE and ROE?
Yes. So thank you. That is a very, very, very relevant question, and that is something that we have been also talking about but the last 2, 3 years, especially the 2 years of cohort, we had major major issues in terms of cash flow. So we are a bit conservative in terms of our capital allocation, we would like to have a minimum test for these kind of uncertainties that have happened. However, having said that, we started the dividend payment, which is the high that we are paying in the last [Indiscernible] and your suggestion of buyback is well taken. It is something that we would definitely consider to extend once we are through this current year. And since we -- if we don't have any large buyback opportunities available to -- I'm sorry, large acquisition opportunities available, we would definitely like to look at that as a definite option for the next financial year. Would like to give it one more year for that, but that is definitely on the table for the question.
[Operator Instructions] Next question is from the line of [Indiscernible].
I wanted to ask some of the investments which we have done nations like [Indiscernible] and all, I think we invested since 2015 and the organization seems to be doing well because I use your production. So I want to ask, do we have plans to increase our stake out there. As of now, I understood it's around 16-odd percent. So some of these relationships are doing well. Do we intend to increase our take and maybe take forward some of the other engagements also or stick to it as an investment option?
Sir, in terms of margin, you continue to be large enough investor and considering that they are not [Indiscernible] for the capital at the moment. So I don't see a way of increasing our stakes except for being a secondary buyer from some existing investors. But since we already have a large -- we are a market investors on board, a couple of them updating [Indiscernible] apart from us. So I don't see our centers large enough. In a couple of years, we've probably been looking at expecting because strategically, we are not even longer involved in the day-to-day operations and management of that entity. We continue to support them wherever possible. But we will be looking at the exit maybe1 or 2 years down the line.
[Operator Instructions] Next question is from the line of Jinesh Joshi from Pablos.
Yes. So my question is surrounding the gross margins. I think in the [Indiscernible] mentioned that our gross margin was higher at [ 9% ] due to better planning and new bistate if you can just [Indiscernible]. And specially if I look at our finished good inventory usage at about 100-odd [ crude ] -- and given the contact is not very high in terms of top line and all. And even we have a decent quantum of finished good delivery, do you think that the sustainability in gross margin [Indiscernible] could be surrounding the level which we reported currently given the fact that there will be minimal impact of price hike and the period inventories already per with that?
Yes. Just in terms of our gross margin, the impact has been because of better production planning during the first quarter. versus last year schools were reopening. There are a lot of follow-up orders where the patrons are very small. So -- and plus, there were most of or supply going in terms of [Indiscernible] costs are higher during that period. So better planning has resulted in higher -- better gross margins for the first quarter. And of course, remember number of supply that have gone out also lower in terms of the quantum of supplies, the number of shipments. So that will definitely help us better growth. Planning is the only driven why our gross margins are better in the first quarter. In terms of finishing inventory, when you talk about INR 100 crores of finished inventory that you're talking about, please be aware that out of this INR 100 crores, about INR 30 crores is something that is already lying with channel partners. This is just on account of the provision [Indiscernible] accounted for the stock in my books, but is actually the amount that will get returned to me during the next 3, 4 months. That's just a provision. So actually, inventory would be INR 70-odd crores. So that differentiation on 20 over when that comes back to sort it may be part of my inventory. And after that, of course, what -- how it will help in some of the gross margin, of course, whenever we sell a new [Indiscernible] on the existing inventory also, the price of the product change and and sold. So of course, since we're doing a single catalog. So of course, we can't sell books in 2 different prices. So the existing inventory also gets repriced.
Got that. Sir, then my second question is with respect to the count. I think you mentioned we are planning to launch about 500 [Indiscernible] can you -- which all product categories are you referencing? And is this a completely new and different way you would not present earlier? Or is this just basically your [Indiscernible] products with a new coverage and you see that would be complied in [Indiscernible]. So how is it completely normal or uplift to test?
So I would say a mix of auto. I would say after the 300, about 100 to 150 new products, both in the school and higher education segment. We continue to bring up new products for the year. Last year, we bought out series in artificial intelligence, which have done decently well last year, that was a new category completely. This year, in terms of higher education, we do a lot of products with tiers in terms of the government and market. So there, we're also getting good traction. Plus, of course, the inventory in higher education come out in the order state. So a lot of regional products are coming out in that segment. Second category, of course, is upgrading the existing best sellers that are there in the system. So those also come on. Of course, and then they are transformations that are happening in the [Indiscernible], which are also existing content, which is getting translated into new languages. So I would say of 50% is the abolition of the existing contract. 25% is completely new content 25% is substantially revised content. And that's just a broader, it may vary about 51% year-over-year.
I got that. Just one last question. On an average, annually how much the tones of paper will be continuing in FY '24 because you have mentioned that you have contracted 50% of our supplies. If you can just give me a rough indication then I can do the math myself.
It's about 18,000 to 20,000 tonnes.
As there are no further questions, I will now hand the conference over to the management for closing comments.
So thank you, everyone, for taking out time and joining us for this quarter 1 conference call. And we look forward to another year ahead and [Indiscernible] working capital management, in total cash flows and bringing our content for schools and colleges during the current year. And of course, the announcement of the NCF such a major event that we are waiting for. So thank you, and we look forward for the next quarter.
Thank you so much. Thank you very much. On behalf of Prabhudas Lilladher, that concludes this conference. Thank you for joining us. You may now disconnect your lands. Thank you.