Britannia Industries Ltd
NSE:BRITANNIA
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Britannia Industries Ltd
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Ladies and gentlemen, good day, and welcome to the Britannia Industries Limited Q4 FY '23 Earnings Conference Call. [Operator Instructions]
Please note that this conference is being recorded. I now hand the conference over to Mr. Mayank Mundra from Britannia Industries Limited. Thank you, and over to you, sir.
Thanks, Roman. Hello everyone. This is Mayank from the Investor Relations team. I welcome to all to the Britannia Earnings Call. This is the financial results of Q4 financial year 2023. So with me today, on the earnings call is our Vice Chairman and Managing Director; Mr. Varun Berry; Executive Director and CEO, Mr. Rajneet Kohli; Executive Director and CFO, Mr. N. Venkataraman; Chief Sales Officer, Mr. Vipin Kataria; Chief Marketing Officer, Mr. Amit Doshi; and Chief Procurement Officer, Mr. Manoj Balgi. The earnings deck is uploaded on our website. Before I pass it on to Mr. Varun Berry, I would like to draw your attention to the safe harbor statement in the presentation. Over to Mr. Varun Berry, with remarks on the performance.
Good evening. I am sorry to call you out so late in the evening. So let's get to the deck. So on Page #3, you will see our revenue profit as well as our market share trend. So for the quarter, we've grown 11% revenues, for the year has gone by, it's a 15% revenue growth. Operating profits for the quarter have grown by 47%. And for the year, it's at 30%.
Our market share gains continue and the gap with the second largest competitor has gone up in this quarter as well. Moving to the next slide, which is our regular slide, which gives the 5 strategic pillars, which we drive to get profitable growth. And I'll take each one of these as we go forward. So on the distribution front, we -- as you see, we've got the number of rural distributors has gone up from 26,000 in March '22 to 28,000 in March '23. So we've added 2,000 distributors and the rural market share is 1.4x what we have for all India. So we continue to gain more share in rural.
If you look at our direct reach, it's gone up by 2 lakh outlets. We've gone up from 25,000 to 27,000 approximately in terms of number of outlets reached directly by -- sorry 27 lakh outlets. So moving on to the next slide, which is -- on the marketing activities, this quarter, we relaunched Pure Magic, which is doing well. We also had the launch of aseptic PET bottle drinks and the aseptic PET bottles and that's doing only well for us.
On the other front, brands that were on the air, Marie, which is on its Season 4 of the start-up contest was on air. Good Day Chocochip, it was on air and is doing quite well. Maska Chaska where we use Ravi Shastri that has gained good market share this quarter. and Potazos and Rusk, they are all on air. So -- and digital activity also over there on most of these brands.
Moving on to the next slide. Innovation. We've got some good results there. So Golmaal, which was started off in the east, has now got extended to South and West. And we are seeing a 40% sequential shift quarter-on-quarter.
The NutriChoice Seeds & Herbs, we are seeing a 50% sequential shift quarter-on-quarter. Milk Bikis Classic, which is launched in Tamil Nadu is also seeing a very healthy sequential shift and Croissant will be launched an Orange variant and Croissant continues to do quite well for us. I've already spoken about the milk shakes. We had our milkshakes in Tetra Pak and now we launched it in aseptic PET. We've added to that Rich Milk Shakes, which was launched last quarter as well as Coconut Water, which has recently been launched. And one point that I wanted to make on our milk shakes is that, we are probably one of the few companies which are making the milk shakes from fresh milk, and hopefully, the quality will speak for itself. Winkin Cow is now INR 150 crore brand. We are sourcing all of our aseptic PET from our new factory [indiscernible]. Again, I would urge you, if you're interested in taking a tour of our factory, we would be very happy to take you there.
Our distribution reach is 2x shift over last year as far as milk shakes is concerned. And our overall innovation contribution is looking pretty good. On this, we've got the bakery adjacencies where that continues to do a profitable growth trajectory, which for many years, we've not seen, but now for the last 5, 6 years, we've been growing our bread business profitably. We've commercialized 3 new lines in Rusk. I don't know if you know, but we never had any rusk line decides one in Mundra. And now we are commercializing 3 new lines. This will ensure that we produce very good quality products and at the right price.
And cake, there was mushrooming of cake brands all across, and there were different types of cakes which were coming in, and we've now been able to bridge that portfolio gap and we've got a full contingent of cake products, which are there in most markets. Croissant, I've already spoken about, basically, we've joined the INR 100 crore club in this category. The base markets, which are Tamil Nadu and West Bengal where we were doing our test market, they continue to grow more than 50% year-on-year, and the new markets are coming to play. We've spoken about the new flavor.
Dairy, we have started to distribute. We are now transitioning to the Britannia Laughing Cow brand. As you know, that we've got a joint venture with Bel and that is scaling up. We've spoken about Winkin Cow, I won't repeat that. Total milk collection is directly from farmers is at 70,000 liters, but we do about 130,000 liters of bulk collection, which takes our total milk collection to 200,000 liters per day.
We are now supplying the entire [ SMP ] and SCM for our captive consumption to our bakery division from the dairy plant.
Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management.
Ladies and gentlemen, thank you for your patience. We have reconnected with the management. Over to you, sir.
[Technical Difficulty]
Sorry, guys, some technical glitch. So I was on Slide #9, and I was talking about the waste that we reduced in everything that we do, reducing the distance to market for the products that go to the consumer as well as reducing the distance of the supplies that we get to the plants. We've also got the renewable energy is -- has moved up and I'll come to the numbers as we talk about our ESG agenda.
We've also -- the journey on reverse auctions for our procurement is moving quite well and supply chain, the replenishment sales productivities are looking pretty good. So as a result of that, in '22, '23, we had a spectacular year from savings standpoint, and it's 9x what it used to be in '13, '14. And it's been a huge jump shift in this year. And it was necessitated through the inflation that we saw and the team really got together to make sure that we make the best of it.
Moving on to Slide #10, which is our ESG agenda. So there are 4 pillars: people, resources, growth and governance. So as far as people is concerned, we are now dealing with almost 3,000 farmers who are enrolled as our milk supplying farmers. We've also got a farmer extension program, where over 3,000 farmers have been supported, who are beneficiaries of all the support that we provide out of the medical camps that we've conducted this year. There are also approximately 2 lakh beneficiaries of our Britannia Nutrition Foundation. And we've got 75% female workmen in the new greenfield factories that we've commercialized this year. So all very strong points.
From a resources standpoint, as I was saying, renewable energy, we moved up from 30% to 36% during this year. Our CO2 emissions has reduced by 1.1% this year. We've reduced 51 tonnes of plastic in the products that we make. We've also got a 71% of the plastic that we use as recyclable plastic, which is basically BOPP and CPP, these are all recyclable laminate as well as the NI bags that we do for wholesale tax.
We've also reduced our water consumption by 33% versus '19, '20. And this is -- this 33% is per ton of product that we make. And we are in '22, '23 as well plastic neutral. We've collected and sent for recycling almost [ 43,000 ] tonnes of plastic. From a growth perspective, we had a reduction of sugar. We reduced it by 1% over '21, '22, and we reduced sodium by 5% over the same period. We've also done from a governance standpoint, we've got 81 critical suppliers who have contributed to more than 50% of the total volume sourced by us, and we assess them on ESG Parameters. The parameters that we assess them on are sustainability, social compliance, which is basically giving the right kind of labor, et cetera, diversity in the labor, water management, waste management systems that they use, plastic, how much plastic that they use and how much plastic do they collect and energy management.
So we've assessed them on these, and they are coming out good. So we are happy with the progress there as well. Moving on to Slide #12, which gives us the top line growth. So if you will see, in Q4, we've done INR 3,900 crores of revenue, which is 11% on a 12-month growth and 28% on a 24-month growth. So both ways, we've got very solid and very good numbers on growth. The year we've ended '22, '23 at a 15% growth.
Moving to cost and profitability. Slide #14. This is the country's food price index, which is showing that over the last year, there is a 10% inflation for the food that all of us consume, in Indian. You know about the U.S. dollar, it moved up, but it's now sort of stabilized the rupees.
Moving to the next slide, which shows what kind of inflation we've seen. So we've only got 4 commodities here. And these 4 commodities are about 60% of our total purchase. So flour, which is the largest -- is actually exhibiting a fair amount of inflation versus last quarter, the prices are up 4%. And over last year, they are up 21%. Our palm oil is a deflation, so it's down 6% versus last quarter and 14% versus last year.
Laminates again, deflationary minus 5% and minus 9% and corrugated boxes, similarly, minus 7% and minus 16%. The other commodities, which are showing some signs of inflation, dairy is very high inflation versus last quarter at 20% and versus last year at 54%. We are hoping that at some stage, we will see some respite here. But no, it's not in sight right now. Sugar, again, some signs of inflation while versus last year and last quarter, it's flattish, but we are seeing some signs of inflation there. So that's the roundup on commodities.
So the summary is that this year, we've taken pricing actions to make sure that we offset inflation. We were not clear what kind of inflation because for a prolonged period, we've seen a very large inflation. So we said that it's important that we take pricing and we make sure that we protect our bottom line. Then some softening of material prices in the second half of this year. We've also stepped up cost efficiencies, and we are also evaluating if there are some corrections in price that we need to make.
So outlook is that we will remain vigilant on competitive pricing actions, and we will closely monitor the stock -- the price of wheat and sugar and wherever necessary, we will make the right decision on -- if there is a price reduction required. There are certain brands and certain tax where we already initiated price reduction or promotions, and we will continue to watch this space and see what needs to be done as we move forward.
Now moving to Slide #17, which is on our operating profits. As you see from Q1 at 12.3%, Q2 was at 15.2%, Q3 was at 18.5%, and Q4 is at 18.9% operating profit. So if you were to look at Q4 12-month growth on profitability on operating profit, it's up 47% and 24-month growth is at 63%. So a very healthy numbers there.
Moving to the last slide, Slide #18. If you look at the quarter results, 11% net sales, 47% operating profit, 47% PBT and the same number as PAT. The year number, 15%, 30%, 46% and 52%. If you were to look at our ratios, profit from operations is in '22, '23, 16.3% versus '21, '22 at 14.3%. Profit before tax is at 19% versus 14.9% and profit after tax is at 14.5% versus 10.9%.
So those are the results. As I said earlier, we might have to moderate our pricing at some stage. But overall, the trends are looking very good. So with that, I will open the house for questions. Over to you, guys.
[Operator Instructions] The first question is from the line of Chirag Shah from CLSA.
I just had a couple of quick questions. When I look at the other operating income line, that has shot up very sharply in the last 2 quarters. This quarter, it is almost 17% of PBT. What is that function of? I know there are some incentives from the state government that are included here. But is there any lumpy revenue base that is sitting this quarter in the other operating income line?
Yes. It's the PLI that we got from the government. So as you know that there was the PLI scheme, which was initiated by the government. And we were one of the first applicants, and we've got the benefit of that. Venkat, do you want to take that?
Yes. So it's the PLI essentially. This is for the year '21, '22 and '22, '23 that we have one in the quarter 3 and quarter 4.
Sorry, PLI for FY '22 and '23, you've got it in the second half of this year. Is that understanding right?
For '21, '22, we realized some money in the current year. So '21, '22 and '22, '23 came in the second half of the current year. That's what's sitting there.
So can you just quantify the PLI amount number, please? And because this number is quite large and now as a percentage of PBT, how should we think of that number going forward?
So about INR 90-odd crores is what is appearing in quarter 4. Now we are expected to get about INR 15 crores to INR 20 crores per quarter moving forward. So this was the accumulation of many quarters. So this will be a onetime. And as we go forward, it will be about INR 15 crores to INR 20 crores per quarter.
Okay. INR 15 crore, INR 20 crore per quarter would sustain into the next year?
Yes.
Got it. Just secondly, how should we read the competitive intensity as of now? Is there a moderation? And how are we in terms of pricing action versus some of our key competition?
So see, it was a very, very uncertain period because the inflation. We've never seen this kind of sustained inflation for such a long time for many, many years now. So there was -- everyone was double guessing where this is going. So we have taken a decision that we will make sure that we cover the inflation through our price increase and we went about that. So there were areas where we were aware about the premium that we would like to have over other brands.
And as I was telling you, we made some corrections. We were hoping that the entire table would move up. Some places, it moved up, some places we've built. So competitive intensity is, I would say, maybe slightly higher than what it was earlier, but nothing extraordinary. It's just that the period was so uncertain that people were double guessing, and while we had the advantage of commodity buying last year, other people didn't. So it will pan out as we go forward, it will sort of, it will all come back to normal. But I think we are now in a phase where inflation is going to be moderate. I'm not going to be what we've seen in the last 2 years.
Right. And if I can just ask one last question. On the LUP side, without asking specific numbers, how has the share of LUPs for us really moved in the last couple of years? And how do you see that going forward?
See, LUPs people are thinking that we -- because the difference between our volume growth and our revenue growth is very high, LUPs are not moving. The fact is that the number of packs that we sell is still at a plus 12%, right? While the volume growth are very small, the number of packs are still 12%. So there's no major shift in LUP versus family packs. It's just that we've taken based out of our -- in LUPs. We've taken some grammage out of our LUPs and hence, volume is not growing, but number of packs are still growing very well.
Right. But the share of LUP pre-pandemic to now, would you say for us, it has been constant, falling or has increased?
I would think it will be reasonably constant.
[Operator Instructions] The next question is from the line of Vivek Maheshwari from Jefferies.
First, on the gross margins for this quarter, you reported, I think, probably the best ever, and you did mention about the pricing action. So to speak, there is a bit of a mismatch between, let's say, end of consumer pricing versus what the spot input prices are. Where do you think the gross margin should settle at in the coming quarters?
So it will hover around the same, maybe a percent here or a percent there, won't make a big difference.
Okay. You're talking about the exit rate?
I'm talking about the year rate.
Okay. The year, not the exit, right?
No.
Varun, why would -- so you are saying it will be closer to the full year average you are seeing. At the time when input prices are -- have gone down. In fact, the other question I had was, if you look at -- because, let's say, wheat flour has hardened, most of your key inputs would have gone down as an RM index, if you look at where fourth quarter inflation would be, let's say, quarter-on-quarter or year-on-year?
Can you repeat that?
I'm saying, Varun, you have mentioned about different raw material [ headwind ] which input prices are behaving. But if you make an aggregate index, my impression that it will still be down quite a bit, both quarter-on-quarter and year-on-year. Can you just quantify if you take the weighted average where the input index would be right now?
See, we are looking at -- in our plan, we've taken a 3% inflation, and that might be applicable only to us. Because, as I said, we've done some strategic buying last year, and we did get some good prices for our input commodities. So basis that our internal plan is looking like a low single-digit kind of inflation.
As we head into F '24.
Yes.
In that context, Varun, shouldn't there be at least 50, 100 basis point margin expansion in FY '24 at a gross level?
Well, if we keep it at the exit levels, but the point is that we might have to make a few changes to pricing in certain brands in certain packs. So we do not want to become only margin hungry and not continue our march on revenue growth, volume growth and market share growth. So it has to be a balanced way and that's what we are trying to do. And that's how we looked at getting to golden triangle every year, which is getting all 3 together. So that really is our [indiscernible]
The next question is from the line of Arnab Mitra from Goldman Sachs Asset Management.
Varun, my question is on volume growth. As the prices are now rising and also you are looking at some price on the...
Your voice is not clear. We can't hear you properly.
Is it better now?
Yes.
So my question was, as the pricing [indiscernible] and you also take some grammage increases, do you expect the volume growth to start picking up now? Or there could be a lag between the [indiscernible] of the price and the volume growth starting to pick up for your business?
I would certainly think so. See, but I don't worry too much about volume. I'm more worried about the number of packs that we sale. So I would want to see aggressive growth as far as number of packs that we sell. But yes, you're right, even volume growth will definitely pick up in this year.
Okay. Got it. And my last question, Varun, was on -- just an extension to what Vivek asked on the gross margin. So your exit EBITDA margins are almost 20% versus the average of the year, which is 17.5%. So would you look at that as the benchmark as what you could deliver given the changing dynamics of your input cost as well as price reductions in terms of FY '24?
Yes, I don't think so. I would say average of the year would be more of where we would sort of get to. Yes. And we don't give any forward-looking statements, but I would say that's the benchmark.
The next question is from the line of Richard Liu from JM Financial.
I just have a question regarding the difference in growth between standalone and consol. It's 14% in stand-alone and 11% at consol, what's that due to? And related to this, what I want to notice is that the COGS figure in rupees crore is exactly the same as standalone and consol. I mean why would that be so, despite the difference in revenue?
So there a couple of things which are impacting it. Out of dairy, the non-cheese portion of dairy has already moved into Britannia numbers during the year, starting in May '22. So that is one which is impacting the growth between standalone and consolidated. The second that is happening is that with the JV arrangement with Bel and holding the -- transitioning into a distribution arrangement from April this year, the fourth quarter cheese sale has been -- it's been accounted on a joint venture accordingly. And therefore, the revenue doesn't appear there, where is the share of profits of the Britannia appears. So these 2 are impacting the almost 1.7%. So the effective growth rate should be almost about 12 points some, 12%, 13%.
And the COGS being similar for both consol and standalone?
Same thing, same thing.
We have the next question from the line of Latika Chopra from JPMorgan.
My question was around now that we have full year FY '23, if you could share the revenues for the non-biscuit portfolio? And if possible, give some color on the main categories within this segment?
So the largest category are cake, Rusk and now dairy and bread. So they are all approximately the same size about INR 600 crores, INR 700 crores each, right? So these 4 categories are about INR 700 crores each. And then we have international, which is another INR 700 crores, INR 800 crores. So these 5 categories. And then we have got emerging categories like Croissant, which is now INR 100 crores. And then there are other small ones, [indiscernible] to be another INR 100 crores.
And the second and last question was, again, coming back to revenue growth. You pointed out that pricing is going to moderate. I believe maybe a lot of the pricing might be returned to consumer in form of grammage increases, but in a broader category growth level for biscuit. But do you -- are you looking at a high single-digit kind of a revenue growth for this year as pricing moderates? And also wanted to understand the scope of further distribution expansion, you have done a really good job on the distributors, but on directly general rural penetration perspective, is there more headroom to add more outlets with relevant throughput there?
So I'll let Vipin answer the distribution question.
I think, you're right. So distribution has been our strength. And even [indiscernible] outlets, right? So just to give you a perspective of the category has gone 92 lakh outlets. We need to reach about 67 lakh [indiscernible] and therefore, you can get that -- the head space is that much. This distribution initiative obviously spearhead by [indiscernible] because our entire portfolio is pretty relevant to rural as well as urban and Metro. So I think the distribution that we are talking about is Pan India and Pan geography. And what you will see is that even in this year, we will keep improving our distribution in rurals as well as urban areas.
And your first question, so it's very interesting, actually, what Vipin is bringing to the table. The gap between us and the category is 67 lakhs versus 92 lakhs, right? So still a good number. And the only good thing is that our weighted today is over 90%. So it's -- we are reaching 91% almost -- we are 91% weighted distribution and for the first time, we are joint #1 as far as weighted distribution is concerned. So yes, we would want to expand our distribution because we -- as we've gone direct and as we've gone to more and more outlets, share and those outlets have gone up. And we'll continue to do that. So there is headroom.
And volume, yes, see, the fact is that the volume growth has been stranded not because people are not interacting with our brands and our products. We are, a number of packs are still -- number of packs that we sell are still much higher than what they were last year. But yes, this year, because it's not just about the grammage that we are increasing in the packs. That's going to be very small. But this is what we did last year, volume growth are going to be certainly much better than what we saw this year.
[Operator Instructions] The next question is from the line of Sheela Rathi from Morgan Stanley.
My first question was with respect to the market share gains this year. I believe that we are doing something differently, and I would attribute it to distribution. But what has changed that is driving so much market share gains, especially when we are taking so much price high?
[indiscernible] One thing that we always put on a back burner in the strength of brands, and we truly own stable of very, very solid brands. So the combination of solid brand ably supported, plus distribution, plus the efficiency that we are bringing, the freshness of the product that we produce and outlets with all the factories that we've put up, the efficiency that we bring to the table, the quality of the products because these are new lines technically much better lines than what we were using in the past. I think all that adds up. So it's not one factor. But yes, I would say distribution would be still the #1 factor, followed by brands strength.
And in any way, is it changing the mix of our portfolio from being more premium to becoming more mass?
No, not at all. The mass brand have been doing as well as the others. So there's no change in the portfolio. If there anything, it's becoming more premium.
So is it fair to say it's 50-50?
What 50-50, what?
Premium portfolio will be 50% on the biscuit side?
I don't know how you define it, but the way we define it as the value products for us are very small. The Tiger brand is very, very small today compared to Parle-G or [indiscernible] or some of these brands. So we have a premium heavy portfolio compared to the others.
Understood. And my second and final question is to do with the milk inflation. And what we hear is that milk inflation will continue through the year. Does that lead to some recalibration of our dairy strategy?
Well, no recalibration, but we took it on our chin, we took the inflation on our chin and we did suffer some profit downside as far as dairy was concerned. It's a tough category, but I think we are managing quite well. We've been able to establish a very strong brand within Winkin Cow. Today, I would think that it's out of all the innovations that we've done, this definitely stands out. I don't know if you tried the products, they're just fantastic products. And they are premium products, we're selling it at INR 35 and INR 40. So I think we've taken a little bit of a brunt on profitability, but not on the top line, and we are hoping that we'll be able to establish solid brand portfolio in dairy as well.
The next question is from the line of Avi Mehta from Macquarie.
Could you give us a sense of the competitive intensity, especially because of your comment last time that you were seeing some enhanced competition in some pockets, which did not need pricing actions, so I just wanted to understand? And should we read anything in the market share gain in rural, basically moderating to 1.54x versus that 1.5x and 3Q and the gap reducing with what we saw in the graph last quarter?
It's not a variation, 1.5 to 1.4 is not a big deal. No, I don't see a substantial change in the competitive intensity. Yes, there are some categories where there is a heavier intensity. There are categories like cake, where the lots of small players even category like Rusk where there are lots of regional players. So what we are doing is, we are taking very stringent action in those categories to make sure that, one, we can produce the products at the right price. Second, we can compete even with the local players. Earlier, we used to not look at local players.
Just to give you an idea, Rusk has some 2,500 producers of Rusk across the country, right? And some of them are becoming big in their own small territory that they operate. So we've taken action. We are now looking at it regionally, North for us is a very small market share territory for Rusk. So we are looking at how we deal with that and how we take our Rusk market share up in the North. And similarly, in case where there are lots of INR 5 packs coming up, we are looking at how do we compete with those local players.
Biscuits in, I would say, not really, I would say, because when there is a price increase, the #2, #3, #4 player will always try and take a little bit of advantage of the price and try to push that product. But finally, it all evens out, and I don't think there is a very high intensity as far as competitiveness is concerned. There are some new products that we are doing where we've built an inherent barrier to entry of smaller players. So if you were to look at Croissant, I think it's just 2 players there. It's also [indiscernible]. And the reason for that is that it is a high CapEx model where a small player cannot come in with the INR 5 crores investment, it requires a very large investment, and it's going to be a very deliberate move that someone will make. And similarly, aseptic PET, again, very expensive line, but serious barrier to entry. And so those are the kind of entry barriers that we are creating in certain categories as we move forward.
Got it, sir. And sir, just a second bit, just pushing back on the margin bit. You clearly are -- there is a brand strength. There are barriers that have been created by these manufacturing lines. And this quarter did not have any material one-off. And we are already at the end of the steady-state guidance. Why is it that we are still arguing for margins to be relatively low, given the brands are actually driving the growth themselves? So what is it that I'm missing, which is moderating that our margin expectation, Sir?
We have to remain competitive. We don't want to lose -- we don't want to see it ground. As an analyst, you always look at, how do you get more margins. We are not looking at quarter-to-quarter. We are building a brand for the -- we are building a business for the next 100 years. So we have to moderate all 3 of these to make sure that the momentum continues on all 3.
The next question is from the line of Percy Panthaki from IIFL.
Congrats on a very good set of numbers. My question is on your distribution. So for any company, there will be at any given point of time an optimum level of direct distribution. Beyond that, the cost benefit sort of equation is not advantageous. So in your view, at the current point of time, where do you think that ceiling lies beyond which it really doesn't make sense for you? Of course, that's a moving target. I'm saying as of today, what is that number beyond which it doesn't make sense to go directly?
No. So Percy, the point is that we are already at about 90.7% weighted distribution. And we are joint #1 as far as weighted is concerned. So the question can be that how far do you want to go if you've already got to 90-plus percent then how far do you want to go. But the other side of the coin is that there is this huge territory, which is the Hindi belt, where the gap -- so let's say, the gap between us and the #2 player in share, but the #1 player in distribution. Today, we are still lower than them by about 5 lakh outlets, right?
Now if you were to look at the same gap in the Hindi belt, it will be huge, right? There will be probably 12 lakh, 13 lakhs more than us in the Hindi belt, which is obviously a small subset of the total country. So what we are doing, and that's why we've segregated the Hindi belt, and we are saying that we want to drive our share and distribution. That is where our surge on distribution is going to come. And that Hindi belt is more rural than urban. But I'm not saying that it's only going to be a rural search. We have to build urban as well in those states.
But I would say that we can easily add another 5, 6 lakh outlets without [indiscernible]. Vipin, what do you say?
I think possibly the other dimension to this, which is our direct distribution, right? So while I spoke about 67 lakhs, which is our direct plus indirect, [indiscernible] because that gives you direct access to the retailer, and that gives you access to exactly more and more brands, right? Which increases your market share, which increases your brand penetration. So therefore, we are going into a very planned manner in terms of which are the most relevant side of markets. And like Varun said, the Hindi belt, Metro's, urban and a lot of small markets, we drive our distribution through indirect group. Therefore, there is a good balance of direct distribution, which takes care of weighted and the indirect distribution which impacts each side of that.
Right. My next question is on the diversification of your portfolio. So can you give me some kind of flavor on what kind of diversification has happened, let's say, over the last 5 years in the sense that if you can just give me a ballpark CAGR of 5 years for the biscuit portfolio and for the non-biscuit portfolio separately? And if possible, do you have some targets in mind in terms of 5 years down the line, what percentage of your share will come from non-biscuits versus what it is today?
See, I think so if you consider this year, we have gone [indiscernible] in the non-biscuit portfolio. So to just give you a sense of next 5 years, I think the growth rate will only have a higher clip, so like Varun spoke about Croissant or wafers or the entire setup that we have done with [ Bel ] in the entire drinks portfolio. So we have a large distribution muscle. And what we are doing is we are leveraging our entire distribution to throughput in more and more brands, which are over and above the entire biscuit portfolio.
And last question on Timepass your snacks brand. Are you taking a pause there? Is there no sort of plan to ramp that up in the near term?
Well, we have done some launches and relaunches within the test market territory. We are testing them out. I don't know if you tried them, some really good products, but still only in the test market territory. So we want to be careful. We want to make sure that we -- when we spread it across the country, we have a winning combination. So we are going to be patient on this. We are not going to [indiscernible].
The next question is from the line of Shirish Pardeshi from Centrum Stock Broking.
One question to start with the volume growth. If we look at the full year growth at 15%, is it fair to assume that the volume growth would be in the range of about 2%, 3% for full year FY '23?
About that much, yes. It's very small, small single digit.
And similar number for quarter 4 also?
Yes.
The second question, you've always been guiding us that the new product contribution number, would you have in mind, what number we ended in FY '23 and what we should be expecting in FY '24?
With FY '23, we've done for [indiscernible] the way we qualify in products -- in new products which have been launched in the last 24 months. So the last 24 months products are approximately 3%, 3.5% of that total revenue. And we are trying to scale that up as we go forward to about 4% in '23, '24.
Okay. And last question on the manufacturing units. So 2 greenfield and 1 brownfield in Orissa. So what are the products we are manufacturing? Because what you have been guiding us that you are closer to the market and you be the largest glucose market? So what kind of throughput we are expecting? And I'm supposing that all these 3 are under PLI?
No. PLI is separate. We've also got GST. We have got a lot of GST benefits as well. So see, it's not that we are doing these factories because we are getting some benefits on it. These factories are required. If you think about it, we do 1.3 million tonnes of product every year, right? Even if we are growing 5%, that would mean 65,000 tonnes of extra product that we need to do every year, even at a 5% growth rate. That 65,000 means how many -- so we need 4 lines for that. And so one option will be to build the mega plants and keep adding lines. But that's very tough with our kind of product because it takes a lot of space, takes a lot of labor.
And if you're getting benefits in these states, then it's better to -- like in the north, we don't have any factories. So if the UP factory is going to be, we've only got Uttaranchal, which was done many, many years ago. And now UP is becoming a very large part of our business. So it's important to have a factory there so that we can have the best products and fresh product.
So these factories are not producing different from what we do in other factories. It is the same products which are being produced there. Yes, we are looking at Rusk coming in-house to an extent. We booked that already cake coming in-house. And we are looking at putting up some high-tech innovation lines in some of the factories based all of that in trackers, some high-tech tracker lines as well. But basically, if we look at bulk of the investment, it's going to be in the baseline of the base brands.
That's wonderful. Just one extension onto Venkat, how much CapEx we would require for this to complete these projects in FY '24?
'23, '24, we estimate it to be in the region of about INR 500 crores to INR 600 crores. These are largely going to be the dairy investment, the balance of dairy investments. So going to be some investments in [indiscernible] the facility that's coming up in Bihar.
And thereafter, it will moderate. So we've had 2 years of high intensity as far as CapEx is concerned. And thereafter, it will moderate because we will have capacity. We would have put up a dairy facility, which obviously was CapEx heavy. And thereafter, it will become business as usual.
Ladies and gentlemen, we will take the last question for today from the line of Kunal Vora from BNP Paribas.
You mentioned that there's a strategy to make in-house. Can you now talk more about this? What is the current mix of in-house? How will this change with new factories and whether the productivity would reflect in margins?
So it's not changing dramatically. It will probably go from in-house, it will go from 57% to about 65%. But certain product category, it will be a much larger change. So for example, Rusk, we have in-house only one line for domestic. We had one line for our international business. But for domestic, there was only one line in our Mundra factory. And now we are putting up 3 more lines. So that will grow up dramatically. Biscuit will -- overall will only move up from 57% to 60%.
And second is what is the rationale for launching Coconut water. And would you look for a larger play in the revenue category and would you invest aggressively in the [indiscernible]?
Yes, we are looking at it. Obviously, beverages is an important play for us, and that's why we've invested in aseptic PET. And Coconut Water is a third-party manufacturer, but it's a very, very good product. I don't know if you've tried it. And [indiscernible] will be a very important brand for us as we move forward. It will encompass different healthy products, generally very, very healthy products. And previously as you will see how do we build the concept for the brand that is going to be so credible for us.
Understood. Lastly on dairy from INR 700 crores this year, where do you look to go in FY '24 and maybe next 3 to 4 years?
So we do not give forward-looking statements, but we are looking at aggressive growth in that category.
Thank you very much. I would now like to hand the conference over to Mr. Mayank Mundra for closing comments. Over to you, sir.
Thank you, everyone, for spending time with us on this call today. We will look forward to interacting with you again.
Thank you, guys.
On behalf of Britannia Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.