Mrs. Bectors Food Specialities Ltd
NSE:BECTORFOOD
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Mrs. Bectors Food Specialities Ltd
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Ladies and gentlemen, good day, and welcome to the Q4 FY '24 Earnings Conference Call of Mrs. Bectors Food Specialities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Anoop Bector, Promoter and Managing Director. Thank you, and over to you, sir.
Good afternoon, everyone. On behalf of Mrs. Bectors Food Specialties Limited, I extend a very warm welcome to all participants on Q4 FY '24 Financial Results Discussion Call. Today on this call, I have with me Mr. Manu Talwar, our Chief Executive Officer; Mr. Arnav Jain, Chief Financial Officer; Mr. Ishaan Bector, Whole-Time Director; Mr. Suvir Bector, Whole-Time Director; Mr. Praveen Kumar Goel, Whole Time Director. We also have Orient Capital with us on the call who are our Investor Relations adviser. I hope everyone had an opportunity to go through our investor deck and the press release that we have uploaded on the exchanges and on the company's website.
Company reported a strong fourth quarter with revenues from operations increasing by 17.4% and PAT by 21.6% on Y-o-Y basis, reflecting on our annual performance for our year FY '24, company stands at the highest ever revenues as well as PAT with both our business segments registering growth in high teens. Indian economy continues to demonstrate resilience amidst global slowdowns, India story continues to be domestic consumption-driven and now we are increasingly becoming a sourcing hub for the world as well. I'm glad to tell you that your company is well placed to make the most of both the opportunities. Our journey of driving multipronged business strategy continues with focus on spending both in domestic and international business with continuous investments in developing our brand, brand portfolio and building future ready supply chain with state-of-art manufacturing setup.
We all understand technology is key to any business success. The company has focused on selling and distribution side through SFA and DMS implementation in the past 2 years and now has taken an agenda of technology intervention in manufacturing and supply chain over the next 24 months. On the domestic front, I'm glad to inform you that we have achieved our stated objective of doubling direct coverage to 3 lakh plus outlets in 2 years. On the export side, I'm happy to share with you that Cremica brand now has a footprint in over 65 countries. We will continue to follow our stated strategy of calibrated expansion in both domestic and international markets. On the brand portfolio, we continue to invest behind our brands, Cremica and English Oven. Campaign with Kareena Kapoor Khan, Apna Apna Cremica, Bun Great toh Burger Great and goodness of fiber aimed at driving awareness on the range of Cremica and English Oven products was received well and continued in Q4 '24.
While we continue to expand our portfolio of offering the launch of preservative pre cake, cashew delight cookies, atta Kulcha and a 12 piece pav amongst others. I would like to share with you, in particular, our foray into frozen bakery we have invested ahead of the curve and developed the capability on frozen premium bakery products like filled puffs, desserts and artisan cookies. We believe as the disposable incomes rise need for high-quality premium bakery products will increase and provide for an opportunity of future growth. Updating on the CapEx plan on the biscuits front, we have commissioned 2 biscuit lines in Rajpura in FY '24 with 2 more additional lines to be added and estimated to be commissioned by H1 '24-'25. Commissioning of the MP Dhar plant is also expected in the current financial year.
On the bakery front, we have commissioned Bhiwadi plant in FY '24 we have started construction of building for our Khopoli bakery in Maharashtra, and we are putting another bakery unit in Calcutta, both with -- both will be commissioned by Q4 '25. We have initiated Project impact 10, a journey towards cost transformation throughout the organization. It is an initiative across multiple fronts, which includes procurement, packaging, optimizing manufacturing process, reducing wastages, streamlining logistics, the preliminary assessment work has started across these functions. We believe this will lay a strong foundation for a sustainable growth moving forward. Also, I'm pleased to share that we have declared interim dividend of INR 1.25 per share and declared final dividend of INR 2 per share.
Now I will discuss the financial performance. Starting with biscuits. Our biscuit segment reported a revenue growth of 18%, which stood at INR 240 crores in Q4 FY '24 as compared to INR 203 crores in Q4 FY '23. This segment has grown by 68% over Q4 FY '22. Our biscuit segment witnessed high teen growth in Q4 '24 as compared to Q4 FY '23. Bakery. Our bakery segment revenue for Q4 stood at INR INR 151 crores against INR 128 crores in Q4 FY '23, thus registering a growth of 18% Y-o-Y basis, including retail bakery and institutional segment. This segment has grown by 59% over Q4 FY '22. The consolidated revenues for the current quarter stood at INR 406 crores versus INR 346 crores in Q4 FY '23 thus registering a growth of 17% on a year-on-year basis. EBITDA stood at INR 15 crores in Q4 FY '24 resulting in growth of 22% from the corresponding quarter on year-on-year basis.
EBITDA margin for the quarter stood at 14.4% a growth of 49 bps on a year-on-year basis. PAT stood at INR 34 crores in Q4 FY '24 and saw a growth of 22% on a year-on-year basis. Our PAT margin for Q4 '24 were 8.3%, registering a growth of 28 bps year-on-year. Moving to FY '24 financial performance. The consolidated revenues for FY '24 stood at INR 1,624 crores versus INR 1,362 crores in FY '23 thus registering a growth of 19%. EBITDA for the financial year '24 stood at INR 242 crores versus INR INR 175 crores in FY '23 with growth of 38%, resulting in improvement of EBITDA margin of 207 bps year-on-year basis. PAT for FY '24 stood at INR 140 crores, versus INR 90 crores in FY '23 with a growth of 56%, resulting in improvement of PAT margin to the tune of 203 bps year-on-year. The company has reported highest ever PAT margin of 8.6% in FY '24. With this, I would request to open the floor for question and answers. Thank you so much.
[Operator Instructions] The first question is on the line of [ Subh Labh that is from Arun Kumar ].
Yes. Am I audible?
Yes, sir.
Yes. Congratulations for the good set of numbers. Sir, I want to about the current acquisition which we did for the Mrs. Bectors Cremica enterprises that we said that it was in the manufacturing of the ice creams. So would like to know your views on it.
So this -- I mean this company was originally making bread. So we have acquired the bakery business from this company. So it's not ice cream. Although they also make ice creams, but we have acquired the Cremica brand with their manufacturing capabilities, whatever they have and the brand got all the bakery products. So we have acquired that. So this is a transaction, which should happen in the coming quarter or sometime the time lines are being worked out. So it is more about the bakery operations.
Okay. And sir, the amount of CapEx...
Punajb having the Cremica brand being very strong in the upper north. So we will have in the future when the deal happens there could be a possibility of a clinical brand also getting launched in the bakery side of the business.
Okay. Okay. And just a follow-up on the same what what amount of CapEx we need to do for the upgradation of the plant? Or is it available to production?
So currently we have not worked on this. We will work on it once the deal happens. So currently, we are not working on it. It's more about getting the brand in hand and then evaluating what we should be doing in the North Indian market when they have Haryana.
The next question is from the line of Janhavi Jain from Axia Asset Management Private Limited.
Am I Audible?
Yes, please.
Yes, so I have a few questions first one being largely on the working capital...
Sorry to interpret Ms. Jain, you're sounding too low can you speak a bit louder please?
Hello, is it better now?
Yes, yes. Please continue.
Yes, I have a few questions. The first one being largely on the working capital. We see the receivables to be quite inflated for FY '24. Any specific reason any change in credit cycle or anything to ready for the future? That's the first one.
So would you like to tell us all the questions, then we can answer them.
Sure. Sure. Sure. The second one largely on the contract manufacturing front. If I just calculate that backwards the contract manufacturing revenue has been declined like is there any reason for that. Third one being take like you've launched cakes right now. So what are the plans to actually grow this? Do you have any plans to launch more variants in that? And any strategy or any number to further breach that segment because that's a very big market as well. So these are the 3 large questions.
Okay. So Manu this side, let me answer first 2 and then Ishaan will take up the bakery side, cake side. On the working capital side, our contribution of exports a, has been high. And because of the Red Sea disturbances, the receivables are high has been taking more in transit time to reach to the destination. So that's actually one of the large reasons of that, that higher export contribution in this quarter and the Red Sea issue, which had led to the higher bids. Second is we also had bought and booked a sugar for a long 8-month period. So that has also led to some increase in the working capital. So these are the 2 prime reasons largely being exports and the red sea issue, which has led to a temporary increase in working capital. Coming to the the contract manufacturing. Just because of the demand cycle, there has been a bit of a contraction in the quarter on the contract manufacturing side. But as for the company for which we are doing the contract manufacturing, this is more about temporary trend stage, and it should come back in 1 or 2 quarters. So over to Ishaan for the cake part.
Yes. So on the cake part, what we are doing is we are building some capability for cakes both in the Delhi market and the Mumbai market. So the idea is to leverage our ability to do both B2B and B2C via cakes, would largely be in the frozen front in which we are already operating the idea is to become more competitive and reach a lot more customers. On the B2C side, we have already launched a stake in the Delhi market, which is a small INR 10 cake. We have seen a good success in that cake, and the idea would be to get a range of competitive products on the B2C side, primarily right now via English Oven, which is short shelf life products, the current life of our cake is about 1 month as we progress and get more confidence, we can also look at higher share life products on the cake side. So I think it's going to be a journey. But it will definitely add a revenue stream for the business in the future.
Okay. Just follow up if I could squeeze in, on the CapEx front, if you could just stratify the CapEx for the next 2 years.
So as of now, we -- at the last time also we gave the CapEx visibility for the year 2023, '24 and '24, '25 then over the 2-year period, we will be doing the CapEx of around INR 550 crores, and that's the current projection look like. In terms of our CapEx going forward beyond that is still on the planning cycle in the next Board meeting -- the next investor call, we should be able to give you a visibility on a CapEx beyond this. So as of now, around INR 550 crore, INR 560 crores is the CapEx between the last financial year and this financial year, last financial year, what we have CapEx which we have spent in the rest in the book is around INR 170 crores, and the balance would happen in this financial year.
One last question on the export contribution to the total biscuit is to just verify.
Export contribution to our overall business?
Yes.
So as of now, we normally don't share the contribution business-wise and we share on an overall basis as you are aware. But it is close to it and say 30-odd percent is our exports.
The next question is from the line of Amit Purohit from Elara.
Sir, just if you could...
Amit, can you be a bit louder?
Am I audible now, sir?
Yes, yes, better.
Yes. So I'm saying -- I just wanted to understand in terms of demand trends, how are you seeing the demand, one on the biscuit side, specifically from a competitive intensity perspective and otherwise, also in terms of growth trends.
Okay. So let me start first with the demand trend. The demand trend post Diwali as you are aware has been a little low. There has been a pressure on OpEx, and that's what is even reflecting in all the reports of all the companies than the so there's definitely a slowdown in offtake versus what it was in the first half of the '23, '24 financial year, right? So that's the case there. In terms of competitive index also starting, I think the quarter 3 of last financial year, there has been more competition from all the companies, especially the leader in the category, has rolled out a lot of consumer offers kind of dropping the consumer price of the product. And we have also taken a respective action in quarter 3, quarter 4 in terms of being competitive in the market. So -- but we're very hopeful we all know the good monsoons are projected for this year and the inflation is also coming in control. So we are also very confident that starting quarter 2 of this financial year. We should see the demand coming back and definitely, for Diwali it should be a run. So that's our kind of outlook that good monsoons as well as inflation, which has been under control for our last 2 quarters and going forward also to remain in control should swing it back to a good demand and a better growth should be back starting from quarter 2, quarter 3 of this financial year.
And sir, of the FMCG companies have indicated that they have seen some uptake from April May. Have you also witnessed similar kind of a growth offtake improving...
We are also witnessing a slight improvement in demand trends, right? But it's still not back to the significant level what it was pre-Diwali, I would say, in the last financial year. So yes, the trends have started looking minorly better now, and we hope post monsoons, they should start improving it in a much better way.
And on the biscuit side, you don't share the breakup within biscuits on domestic and exports. But just to get a sense for the full year, the 23% kind of growth in the biscuit category. Are -- is it safe to assume that biscuit growth would be very close to mid-teens or high teens? How do you think?
Yes. So we are targeting it to be mid teens, right? For the annualized growth, right and last year also -- pardon?
FY '24 was also similar mid teens.
Yes, FY '24, that is coming to that was also mid teens growth in FY '24 also. And FY '25 also, we are targeting that on an annualized basis for the full year, we should be able to achieve a mid-teens kind of growth.
And sir, just continuing on the overall growth plan you've been indicating growth rate around mid-teens. But I mean, when I look at the overall -- that is for the overall company as well? Or you're just referring to branded biscuit, domestic business?
No, I have answered as of now mid-teens for the for the domestic business. I think your question was specific to domestic biscuits, and that's what I've indicated.
So effectively, the overall company growth could be higher, right, because one, we have a bakery capacity which is coming and...
So we have been consistently saying that we want to maintain at a company level mid- to high teens kind of growth, right? And that's what we have achieved this year also. So that's what we are striving for to achieve on a consistent basis on an annualized basis, mid- to high-teens kind of growth.
Okay. And sir, on the margin side, 2 things you have indicated 14% to 15% margin, but you also have initiated a cost-cutting initiative any estimated saving benefits that would probably come and which can able to have at least stable or increase margins from here on?
So that program has just started, and it's more on a study and scoping stage. So in terms of benefits to start coming in from this program, it would start reflecting in some manner in quarter 4 of this financial year and then in the subsequent quarters of the next financial year.
[Operator Instructions] The next question is from the line of Rushabh Doshi from Nirmiti Investment Advisors.
Congrats on a great set of numbers. So my first question was related related to the acquisition, like could you just tell where the and what capacity does it have.
Sorry, we are not able to hear you properly. I think voice a little echoing.
Am I audible now?
Better. Better, yes.
Yes. So my first question was related to the acquisition, like what is the capacity and where is the stand located?
So the capacity is -- actually, this is an old plant. And so once we take over. So this has been an agreement with the company that we will take over this brand, Mrs. Bectors Cremica for the bakery purposes because this brand enjoys a lot of equity in the North Indian market, especially Punjab and Haryana. So on the investment side, they are holding old plants. Our teams will be evaluating what is going to be the status of these lines how can we use these lines. And the location of this plant is right next to our biscuit plant in Sillore. So it is at an adjacent wall to the biscuit plant.
Okay, and like, have we thought like how we would be operating 2 brands in the bakery division, right? Because we've built English Oven and it's presently...
As you understand that we've always looked at premiumization. So it's also about -- we will look at the strategy, but Cremica as a name enjoys a lot of equity, right? We hold a 15% to 16% market share in the biscuit side, and our coverage in the outlets is extremely high. So when we are doing we do under the brand English Oven. So when we are getting into the market, which are Delhi, Bombay, people understand what is English Oven. But when you move out of these markets, then you have to create presence, you have to make people know what is English Oven now? So being also in the urban and rural segment, so I think Cremica with its coverage of 320,000 outlets will have a better acceptability. So the RASK or our other products, which were coming under the English Oven brand could also have the possibility to come under Cremica brand.
Okay, and also, like this quarter, can you just break up the revenue growth between volume and value?
Which quarter you're talking of current quarter?
Yes, by 18% growth.
In the quarter 4, you said.
Yes.
In the quarter 4 growth, we had a mid-teens kind of growth in volume on overall and our revenue growth, you're aware, it was around 17%.
Yes. And then my last question is in FY '25, like what do we expect like a price growth of around 2%, 3% that would -- are we expecting that? Or it would be mostly flattish.
In terms of price growth?
Yes.
See, I think what are the levers of revenue growth management in our company, right? And in our is the very key factor of revenue growth management is the premiumization, base company focuses a lot. And we have considerable journey of premiumization over the last 2 years, right? And our premiumization percentage even starting from a part of this year, to quarter 4, we have reached 37%. So there is a 20% jump in the premiumization percent. And if I take a 2-year period, it does it ever considerable so that is one of the large levers of revenue growth. Second, on overall basis, the second lever of revenue growth is always our business mix. And third is definitely price so we are in a very competitive industry world. It is entirely -- and we are not the market leaders in especially biscuits in India. So it will be more about keeping high on the competition and how the leaders are taking it forward. And then accordingly, we will act at that point of time. So that's all months.
The next question is from the line of [ Harsh Shah from Bandhan Mutual Fund ].
First 1 is on the employee cost for the quarter now I think you mentioned in one of the footnotes that we have an ESOP trust, which we kind of set up in October 2023. Is there an element of one-off in these employee costs because of any ESOP...
Let me just come again are employee cost in the quarter 4 of last financial is 14.2%. The percentage you referred was very high. So 14.2, right?
So that's what 14.2% of sales and strategic question Y-o-Y growth.
Okay. That is Yes. So the reason of this higher growth, there are 2 particular reasons. A, because we are also starting new lines in Rajpura and new plant in Bhiwadi, so we had to -- we have to pre-hire some of the SaaS and where as line doesn't become suddenly fully productive. So as you know, we have made operational or Bhiwadi plant and we also made our 2 long operational in Rajpura, so that entire line manning has to be put in place. And this challenge will remain for a while, while we are investing in new plants and new lines. Second, we kind of also did our leadership hiring, the 2 specific senior leaders who joined us was on the project head and the HR head, but yes, there were some other leadership hiring done. So this -- in terms of -- these are the 2 prime reasons of increase. Third reason of increases, there's a reclassification of some bit of employee cost from other expenses to the employee cost. That was being reflected last year into the other expenses and now it's being reflected in others. That itself is about 0.75%. So out of 14.2%, the 0.75% is on account of the reclassification of employee costs from other expenses to the employee cost.
What is the nature of that reclassification what is the nature of that expenditure, as you reclassified, sir?
So those were some employees which were classified in the other expenses for last many, many quarters. And then on the advice of the auditor, they have been reclassified rightfully into the employee cost side.
Okay. So basically, this employee cost will remain elevated. That is what we get is right within the.
Yes. So because if you look at other expenses, so other expenses, I'll tell you on an annualized basis, if you add other expenses and employee expenses, then for the fourth financial year, it is 31.7%. So a bit of a reclassification and definitely employee expense has gone up for the reasons I told you to. But for the full year basis, our employee expense and other expenses if you add both these they are both at 31.7% for year '23, '24 and '22 '23.
The reason why I was asking is because we had a good quarter in terms of top line growth we've had very good gross margins. I think in fact a multi-quarter high. And despite that, we could not see any benefit of going through. So that is the reason why I wanted to understand this.
Yes. Yes, definitely, in this particular quarter, I would agree that our employee plus other expenses, which last year was around 31%, they are 33%. So there is a 2% increase there. And the 2 reasons I told you is on account of employee expenses and then a bit of a higher marketing spend, as I was reading in one of the previous questions, that competition on the biscuit side, the intensity of competition has really gone up from quarter 3 of the last year. There's a -- by the biggest player in the market, all kind of consumer offers have been rolled out and we had to match it to protect our sales in the market. And that's more of a temporary may last for another 1 more quarter. But that's the bigger reason that we had to spend more on the marketing side in this particular quarter.
Okay. And gross margin primarily being higher because of higher contribution from exports and bakeries, that -- would that be the right understanding?
One is the business mix. We export has a much higher mix in this quarter. That's 1 reason. Second reason is definitely, as I said, premiumization right? That is definitely kind of a major difference to the higher realization, higher margin. And our commodity costs compared to the last year same quarter, were better, which is our material and packing material costs. So these are the 3 reasons, which have led to the better margins.
Okay. But will it sustain on this level, I mean, going into, let's say, the first is near term going into first half? Or do you expect it to kind of taper down a bit?
So yes. It may remain around the same level, right, at this point of time. But yes, the higher contribution of export we don't expect to continue at the same pace. So there could be some moderation on account of that. But our own endeavor is to always endeavor is to try and maintain our margins, if we have improved, we should try and maintain around the same level. There could be slight moderation on that in the first quarter or the coming quarters.
Got it. And sir, 1 on exports just wanted to understand, letter FY '23 to FY '24 has the growth come more from adding new customers or it's come more from increasing the value of sales to an existing customer?
So we have added more customers. We have added more countries. So both has happened. So as you would have heard in our Managing Director fees also that in terms of expansion, both domestic and export, we continue to do that journey. So we have definitely added more countries and as well as we added more customers.
Got it.
And also 1 more thing, which is a specific -- Suvir would you like to take this?
Yes, sure. This is Suvir. So like Manu-ji was saying that we've added couple of customers as well. We've started opening new territories. Recently, the last time you would have also heard that we partnered up with Walmart to supply some of their private label white label to them. And we've continuously growing our focus in North America and the Middle East and more developed economy. I'm trying to tie up with retailers to supply them with our brand and also tie up with a couple of retailers to supply them their own brand. So the strategy is that keep acquiring new customers and also keep expanding our current customers by offering them our existing product portfolio. and also developing new innovative ideas to pitch to them.
Got it. Got it. And then 1 last question on cash flows, right? And in last quarter, if I remember correctly, our target CapEx for F '24 and F '25 put together was INR 500 crores. And I think this quarter, I think we've revised that to INR 550 crores, I'm not -- right?
Yes. So these are large CapExes. And where I said it will be the word I used in the last area which would be over INR 500 crores. And so as we are getting closer to more elastic numbers on the CapEx. So yes, it should be around INR 550 crores to INR 570 crores kind of amount. That's what it looks like as of now.
Correct. So INR 215 crores, if I look at your cash flows, is something which you spent in FY '24. So balance basically INR 250-odd crores or, let's say, I think -- I mean the balance will be spent in FY '25. So in terms of cash generation and payment of debt, we'll not be able to repay any part of debt this year. Will -- is there a possibility of us that you might have to take some more in debt to kind of fund our CapEx?
So the first thing is that I'll let Arnav answer you this question.
So basically, there will be a humming which is there and the you get as part of the investment. So it will never come to a situation where we are kind of taking funds to kind of a refinancing is something that is not there on the brand. That's question that you have asked.
Basically, if you look at the current year's cash flow, probably our operating cash flows were not enough to meet our CapEx requirement, right? So -- and then that's the reason why we also see increase in debt, right? So my question was that, similarly, I mean, compared to F '24, INR 215 crores CapEx, our F '25 number, if you were to compute INR 551 to 15. It is basically on the higher side compared to FY '24, right? So will our operating cash will be enough to sustain that? Or do we need to kind of incrementally take some more debt in FY '25 as well?
So there will be more debt so the whole idea is to keep it in the range of 13 kind of a scenario, will come for borrowings and 1/3 will be coming from our own resources. And additionally, if you look at this year, our working capital has also kind of gone up because of certain strategic calls that was taken and pack and stuff. So we expect a certain amount of reviews coming in from that as well.
Okay. And what -- by when do you -- when do we expect to be debt free? Or do we have a target in mind for net debt to EBITDA or something of that sort, which we want to be in?
0.3. So the once the debt will come on go, it will be for a certain amount of time for a few years. And if you look at it from an overall perspective, our debt-equity ratio is at 0.34 so if we kind of go of certain demand places, but it will not be kind of coming to an alarming level or anything of that sort.
The next question is from the line of Rajit Aggarwal from Atharva Investment Managers.
Congratulations for a good set of results. Would you be able to throw some light on Bakebest I think in the third quarter, we had committed close to INR 30 crores of investments for Bakebest how much has already been invested and what's the plan of investing the rest? And if you could just help us with certain business details of that venture?
Arnav?
So Bakebest is our company which is kind of operating the West market for the bakery business. And this investment is part of the total outlay of the investment that the company is kind of planning, which we have been discussing about like INR 500 crores, INR 550 crores over the period of 24 35. So it's a subset of that. And so of the INR 30 crores then has been kind of invested at this point in time and balance as a CapEx take shape with the investment will come in.
Sorry, I couldn't -- so INR 20 crores will be invested in FY '24, '25?
Right.
And anything on the business side, how many outlets have been opened? Or what's the plan of opening outlets in this quarter or next quarter, something? I mean, just a little color on how it is shaping up. INR 30 crores is not exactly a small amount, whether you will be now or maybe a quarter down the line?
Yes. And the not understanding the question.
No, I just want to understand something on the business side as in by when can we see the revenues.
Bakebest I mean I'm a Anoop Bector here. It is an investment which we are doing in putting up a state-of-art online and breading, and that investments are happening right now. and they will only the line will come up in the end of this quarter this year, '24, '25. So you will only see sales after that. you understand. So what probably you are seeing is a part investment of the total project cost.
Right, sir. So got it. I was under the question.
There will be bakeries set up under that venture.
My bad.
Let me give -- that's -- so in the best Bombay market, our bakery is already growing at a very good, high double-digit percentage, right? We had started facing challenges in terms of capacity, and that's why we plan and we see the Bombay and the West market to be a very high potential market. And we are confident that we will be able to kind of grow there. just like our NCR and North business, right? And so this growth engine will further get stronger once this plant comes up as a Managing Director Anoop has said, in the quarter 4 of this financial year, right? So we have today taken help of a contract manufacturer to strengthen our supply chain to feed in markets for our work in terms of expanding distribution, adding more outlets and adding more feet on street in terms of expanding business that continues, right? So that's not on a kind of old. But yes, with the state-of-the-art facility coming, we will be more stronger on our supply chain, and we'll be able to offer the best product quality product, the state of the plant to the market and expand the market much faster and cover the entire Bombay probably in the coming year, which will be the year '25, '26 financial year.
The next question is from the line of Amit Purohit from Elara.
Yes, sir, on the working capital, you indicated, 1 was the debtor days which had gone up and second, basically, is towards some advanced payment, right, you indicated for buying sugar. Is that what was.
Yes. Yes.
Yes. Okay. So that would -- so because the other current assets have gone up significantly. So how do we think about this? I mean, this is a kind of onetime which gets reversed or this is -- there is a change in the way we are doing business.
Obviously, as far as sugar stocking is concerned, it will obviously come down because we'll keep consuming it. But the red sea impact is something which can take another 1 or 2 quarters to come down because this is a Force majeure kind of situation for us or for anybody. So hopefully, it should also kind of come down over the next 2 quarters.
Okay. And sir, the , the acquisition that you've done for the bakery in the for that? And last call, you indicated that you are looking to now expand the bread business in the Punjab and strong markets where already Cremica is there. So is that the thought process that the premia brand would be more in these markets of north whereas English oven could be investor that's not to think?
As Anoop briefed earlier also that Cremica in Punjab is a very, very strong brand, and we have very high market share on Cremica biscuits. We have a very high distribution of a Cremica biscuits in the Punjab and the upper side of the north. With this acquisition, we also will have Cremica brand available for the bakery side. And so that's once this acquisition gets completed, that's a go-forward business strategy and the brand strategy we would finalize and definitely, that will further strengthen our foray into the upper north on the bakery side.
The next question is from the line of [ Mahendra Munda from Simba Investments ].
Are you able to hear me?
Yes, sir, but could you speak a bit louder there?
Okay. Actually, I just want to know, you mentioned there is a dedicated subsidiary in U.A.E. in the Slide #21. So can you just throw more light on that, more details on that? Hello.
Okay. This is regarding our subsidiary, which is out of Dubai. And this was to focus on the GCC region, and I would request Suvir who is heading the international and export business can brief you about the entire GCC region opportunity and strategy with which we are going forward.
Yes. So basically, the Dubai subsidiary has -- we are going to start dispatching our containers and building it through the Dubai route from the coming quarter. And this time, the subsidiary will be fully active. The purpose of this subsidiary is that we want to start routing the containers into different countries through the subsidiary and also start building locally to fuel our expansion into the Middle East. The Middle East for us is going to be for the export department, our next foray into trying to build a distribution network with our importers on the ground. We have 2 people located out of Dubai itself and 1% out of Ghana. So their Visa allocation has been done from the subsidiary, and they are the people who are going to be helping us build our Cremica brand into the market and start supplying our products locally and build a very good presence over there. Also, in addition to this, what I would like to say is that those are the current individuals who are working to find importers in different countries altogether supply are products in the market and also what we're trying to do is that we are working alongside our importers to build a branding presence by leveraging our brand ambassador Mrs. Kareena. So we are utilizing the same strategy, what we are employing in India as well as in the Middle East. So the purpose of the Dubai office, the subsidiary is for that purpose.
Okay. I appreciate that. One more thing, have you entered any agreement with Lulu supermarket in Middle East because recently I saw Cremica brand with Lulu cover on that. So it was not a Cremica cover. It was Lulu cover, which we mentioned manufactured or better foods. So that's what I got notice.
So we have been partners to do in the Middle East for quite some time now. It has been a couple of years since we've been associated with them. So we are manufacturing not just a single product but a couple of their we are manufacturing them from India and supplying to them in all the 6 GCC countries and also to their stores locally in India. And what we are also planning to do is from this year, we are already present in Lulu in India with our Cremica brand. Also, this year, we will start being present in Dubai, Lulu with our own brand, and that should be happening from Q3 or Q4. The negotiations are currently ongoing and we will be bearing the listing costs and investing in the market.
Okay. Appreciate that. And 1 more feedback is our comparison of Good Day cookies are really very good and value-wise also in wafers also. So that's what I want to mention, you a feedback on that.
The next question is from the line of Abhishek Kumar from Sanctum Wealth.
Congratulation for set of numbers. Just wanted to touch upon just wanted to know your view on the bakery segment, especially the a bit. So how exactly the demand trends over there are as we have seen over the past year now that demand has been somewhat subdued. So what is the picture you guys are getting to for then.
So Ishaan this side. Yes, on -- there is a demand pressure on the QSR definitely. But as you have seen, we are continuing to build capacity because this is a very solid business model. We feel it's a very short-term thing. We do have visibility into new stores opening, which is definitely going to drive growth. there are newer enterprises, which are also entering the market, which are also potential customers for us. If you have seen have posted mid- to high teens growth, even in the bakery segment, also including the institutional, the QSR business, and I would say that is a reflection towards our plan and our strategy to grow this business as we are adding more customers, we are adding newer products and I've always been saying the opportunity for us is not only on both the months, right? The opportunity for us is definitely on beans but also expanding into the frozen side where we are getting into the desert. It is also on other value-added products. So without naming a customer, even we have started now working on a very major project with a very large QSR chain for new products, which are noncore to. So definitely, value addition will keep happening in terms of other products, new customers. But also, we remain very bullish on the on the bus market, where we will add capacities as India still has a very long runway in terms of number of those growth.
Okay. Got it. And just the last bit on the QSR thing. So I just wanted to understand. So you is are exclusive partners for, say, ABC an your native guys become exclusive partners for sub months across been? Or is it you guys also take cotton from, say, or near or maybe some.
There no See, it's not exclusive. There's no exclusivity here. Yes, we do hold a large share of business for most of our partners. So some of them is exclusive for some of them, it's a large care. I think it's more about the value that we are giving to our customers. So there is no exclusivity here. It is a very competitive and dynamic business environment, but we do hold a very strong market share, and we are further strengthening it by adding new products.
And the contract agreement with the main franchises of the parent or the franchise operators are.
No, there are no agreements.
In the interest of time, this would be your last question. And I now hand the conference over to Mr. Anoop Bector for closing remarks.
Thank you, everyone, for joining us. I hope we have been able to answer all your queries. In case you require any further details, you may please contact us or Orient Capital, our Investor Relations partners. Thank you. Thank you so much.
Thank you. On behalf of Mrs. Bectors Food Specialties Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.