What I wanted to share with you in terms of, our journey, where we've come from, where we want to go, and how we're looking at shaping the future, for this business. We will open it up for Q&A now, where I'll be joined by, Ram and Amit. I also have here the visual of our sustainability box. The sustainability box has our sustainable tubes, they're also filled with product, by the way, not just air, huh. There are real products inside, and, you know, hope your hair won't fall off when you use some of the products. Good quality products. In a box with a copy of our sustainability report. This has been sent to our key customers, right? Everywhere, right? Just to make the statement that's our commitment to sustainability. We have a box for each of you as you exit the room, right? If you're happy to carry it's not too light. If you're happy to carry it, we'd be delighted for you to take one. I think somewhere as we exit it will be available to you. All right. Folks, that's it. We'll just now open it up for Q&A. All right. Questions have started. Let me settle down and you know just be with you in a second. Do you have a mic, huh? I just keep this mic on? Normally people tell me I don't need a mic because you know people hear me anyway. Anyway. Okay. Please. Yeah. Please go. First one, number of tubes, no? I have been seeing that 8 billion tubes now for five years. I hope it has increased because we talked about a double-digit growth while that 8 billion number has been stagnant. Can you help us understand in the same period, so we get a more sense on the real underlying growth, what has been the premiumization benefit we have seen, and what kind of premiumization benefit are we anticipating from here on? Number two, what has been the volume growth? Because when we say margin, there is an optical dip, so there is an optical increase in revenue also. Yeah. Because of the cost inflation. It works both ways. I want to understand what is really underlying volume growth, premiumization benefits, and whether Platina is adding to any of these. I can understand volume, but is it adding to the premiumization benefit one? Yeah. Overall, if you look at each of your customers, they are promising a zero carbon, and a lot of emphasis is laid on the recycling of the plastic. If you look at Unilever or anybody, a lot of this is achieved by the recycling of the plastic, and we are one of the largest suppliers there. How are we participating in that? When they say recycling, where are we with them in this cycle? And what does it mean for overall business from now to, say, 10 years when all our customers will be thinking closer to that zero? That's one part of the question. The second is competition. You know, my earlier discussion with Amit, he said that we are at INR 8 billion. My next nearest competition is less than INR 1 billion, right? We are massively big, right? What is stopping us from, you know, taking the price increases? Just the relationship we are bothered about, or it is a competition which is looking for an opportunity to grow. What it is stopping today from taking the price increase, which is an accord. We have a contracted pricing with a quarter lag, right? We don't see that fully playing out for us. What is it? Competition or what? Are we seeing any benefit of consolidation? We can go for more acquisitions. That's all. On the product side, again, growth. We are talking of extruded now. Earlier, we used to say that laminate is a big thing. Now we are adding extruded to it. We bought Creative Stylo Packs, which also gives us an indication that we are looking at the PBL category along with laminate. How do we see this extruder adding to the growth? This aluminum tube laminate, you know, is what we have been offering for many years. Now are we really seeing it now that aluminum price is going up? Has it really pushed many of our customers to work with us on it? What does the R&D pipeline look like? What does it all mean in terms of growth? That's my question. Okay. There are lots of questions and, you know, I'll start and, Ram, Amit, please add, as appropriate. First, as far as premiumization is concerned, okay? See, we have refrained, and I believe for good reason, from talking volume growth in this business, right? 8 billion is a big rounded number in billions, right? I've not even put a decimal there, right? We have refrained because volume is not a measurement of the strategy that we have had or the strategy that we want to pursue. Okay? Just to give you an example, right? Travel tubes are reducing because the small fellows, right, and big diameter tubes are increasing significantly, and one tube is not equal to one tube. All I will say is this, that of course there has been some pricing to your point, right? I mean, it goes without saying. Otherwise, you know, the margins wouldn't have been what they are. Absolutely is there. There is significant volume and mix, right? Volume mix are seen as one thing, right? Because there is just no other way of measuring it in terms of, the progress against that. Okay? Now, premiumization just tells you that, listen, I mean, we are getting the kicker, because very simply, if you go to Beauty & Cosmetics and Pharma. That's richer than oral tubes. Within oral tubes, a lot of our innovation, right, at a premium to the core business of oral. There's a premiumization happening through category shift and through upscaling within the category that you're in. Okay? Recyclable. What is your question on recyclable? All the customers are talking about having a target to reach carbon neutral. Yeah, yeah. Most of the emphasis to reach that carbon neutral is via recycling the plastics. Yeah. We are one of the largest plastic suppliers for them. How does it benefit or is a negative impact on other business? First and foremost, every one of our major customers is gradually converting to recyclable tubes. Right? Many have started the journey. They started their smaller brands, and I think you will see a leap in adoption of recyclable tubes as you go. Right? I don't have a metric of how much is actually recycled, right? That's what I spoke about PCR, which is post-consumer recycling, right? Over time, the percentage of PCR in our tubes will keep increasing, right? Currently, there's availability of PCR, there's a cost issue on PCR, et cetera, et cetera, right? That's how you'll get more tubes coming back into the system as recycled products. Correct? Every one of our customers is embracing recycled tubes, and you will see this happening. They will be able to say two things. One, what percentage of their tubes are recyclable, right? Second is, as the gauge starts going down, which it will, there's a certain amount of absolute plastic saved. These are I think the two things that people will hear. I'm not sure if any of them is going to claim that 100% of their plastic is recycled, because that will mean that, it has to be 100% PCR, right? I don't think anybody has committed anything like that, right? At this stage. I think that's the point on this. The Platina is the premium product or it's- I'll explain that. Platina is at a slight premium, but I think the thing is this. First of all, I think it's a big source of competitive advantage and ability to grow market share, right? With that slight premium, and that's what we want to do. Secondly, I think we've got to reduce barriers to conversion for customers as well in this whole game, because customers will embrace what you have, right? Provided there isn't too much of a penalty to pay. What we're trying to do is to make sure that the barriers to conversion is kept modest. That's what we're doing. Just one thing on the recyclables. The extruders are much better recyclable than the laminates. We were earlier of the belief that extruder will convert to the laminate because of the benefit which laminate offers in terms of, you know, the barrier properties and the printing properties and so on and so forth. Do you think this recyclability has stopped that process? People are okay using the extruder because these are much more easier to recycle than the laminates. Is this happening and is that the reason why we are also exploring extruder as a category? I'm gonna let Ram comment on that because he's like far more knowledgeable on this, and then I'll add to it if necessary. There are different processes. Yeah. Extruded tube has limitations in terms of what kind of a combinations that we can have. A laminated tube has endless possibilities of combining various type of materials to get the final barrier properties. Now, when we started originally with a laminated tube, that all the laminated tube has one layer of aluminum which was giving the highest barrier, if I call it that. There are two reasons. We all traditionally used to aluminum tubes. When you collapse an aluminum tube, it remains collapsed. Okay. Now, that means the product formulation inside the tube was not capable of taking air from inside. It was reacting. The collapsibility is one of the criteria in the tube concept. Over a period of time, formulations have undergone lot of changes. Now, the formulations are more excusable, that is it can take little amount of air, it doesn't react with the air. Similarly, we have reduced the foil thicknesses from a 30 micron to, you know, come down as much lower as possible to roll down. Now we are using even 9 micron, 10 micron. Over a period of time, polymer sciences have improved. That 9-micron barrier of an aluminum, what barriers it could give, there are polymers which can give the similar kind of it. Now we are using eliminating barrier. Now, having said that you have got the all-plastic laminated tube versus now all-plastic extruded tube. The process of extrusion is extremely slower. Process of lamination is faster and cheaper. So most of the mass brands will convert into laminate. It's the fact that we started concentrating on that. But there are. Positioning of the product in the sense. There are a lot of small players who come in, have to be looking for niche. When we compete with the mass product, it's not on the product quality. There are certain attributes in terms of attracting customer's eyes they would like to play. Extruded will continue to exist, okay? Our growth. Now, we have, say, INR 100. We wanted to put in a faster growing marketplace. That's what we did in the laminated tube and so far. Now we are coming to a stable stage that there are products and categories which are coming in with more entrants coming in. There are brands valuing something different. Everything is not a mass brand today. Those brands to create a differentiation in the shelf space are looking for products which will look slightly different than the mass product. We are seeing an opportunity. Wherever that niche exists, we will continue to also start focusing on extrusion. There's no difference in terms of material, right? It's in terms of positioning in the shelf the customer group wants to have. Now, coming back to the still. Laminated tube, all plastic laminated tube will dominate the market. You ask another question, what happens to the laminated tube that is the premium? Platina is our all recyclable. Now, the brand comes out of two factors. One is material, second is processability of the material. Like any rigid material, like for example, when you use an aluminum, it is easy to process. When you remove the aluminum, it is difficult to process. Now, this is where companies like us play a technological game. Now we have an equally easily processable plastic combination of material. That's the R&D that goes behind the science, right? Okay. Now, customers are also working to improve their formulations to a 100% plastic product. Like what you are seeing in the market, all the toothpastes used to be only in aluminum-based package. Today, you will see on the shelf there are brands which have come without aluminum, right? Product needs to improve. Our processes needs to improve. That's how we get it. Till everything stabilizes, we will have a margin of extra profit. Okay? That's not the game. The game is that if you are able to make more cost competitive barrier products, your market share will increase. That's what you were mentioning, that we are using sustainability as a good thing to do for the society. At the same time, it has good business gain potential. That's our view. Are Platina and this plastic tube same or they are different? Okay. See, plastic is a very general word that we use. Platina is our own brand name of recyclable. All plastic tubes may not be fully recyclable, but all Platina will be fully recyclable. Both are plastic tubes because you remove the aluminum layer basically. I just want to finish this and then take other picks. Sorry. Go Go ahead. No, no. Plastic laminate. PBL. Plastic Barrier Laminate. Yeah. I think you were talking about is aluminum conversion happening, right? It is happening. Which is the brand now that is going from aluminum into laminate this year? Glenmark Candid, right? Now, you know, the thing is that the barriers to conversion, I'm not a technical expert, but, you know, it requires changes in the filling lines. Right. There is an on-cost versus aluminum, right? What happens is hardcore Pharma takes much longer, particularly if you're on the category with price control and so on and so forth, right? More consumer facing Pharma brands tend to move. Last year, Soframycin moved, right? Now, Candid has moved. It's happening, right? You have to keep chipping away and bit by bit by bit it will convert because consumers prefer it, right? Now, the ultimate test for a laminated tube or an extruded tube is can you deliver the gold standard barrier properties of aluminum, right? Aluminum is still the best in terms of barrier properties, right? Everything else is approaching gold, not gold standard, aluminum standard, right? As far as that is concerned. Many hair dyes in the world, right, remain aluminum tubes because they're highly active products. That is the same true with Pharma. It takes more R&D, more effort. I can tell you that whenever we put our mind to it, we have cracked it, right? I think bit by bit that conversion is happening. Competition, I don't know which competitor you spoke about with 1 billion tubes. Who is that? There's no competitor like that. No, but our biggest global competitor is Albéa, French company. Then there are lots of other, regional, local competitors, right? In the whole tube space. See, I'll tell you on pricing. I think the pricing, if I'm honest with you know, it's like that, frog in hot water situation. With hindsight, I can tell you exactly what we should have done, okay? Nobody knew that the commodity market will move the way it moved month to month over the last 18 months. Nobody could predict this, right? If anyone could, then, you know, I'm willing to have a drink with that person. Now the question is this. I think I will say this, first of all, there was huge resistance from customers on pricing. I think we have refrained from telling customers who we worked with for 20, 30 years that you don't do the price increase, I walk away. I think we shouldn't miss the woods for the trees here. I think there were huge reasons for caution. If I'm brutally honest, there was hesitation that, yes, it is a competitive environment. I'll tell you, forget Albéa. There are local tube makers in India also. This is the time they are sitting to say, "Let me undercut and try and take some business." It's a proper competitive environment as it happens in any industry, right? I think therefore, there was a hesitation of how hard we should push. I'm just telling you practically how the whole thing evolved. I think sitting where we're sitting today, I think both our determination and customer acceptance for pricing increases is higher. Like 3 voltage 100%. Okay? It is much higher propensity to get pricing, right? Our effort and conviction to get it. That's the situation, right? It is a competitive environment. You are fighting for share. I've spoken so much about share, and at the end of the day, we have only 10% share of B&C and Pharma globally, right? There's a long way to go. There is a battle for share, right? Always there. Remember one more thing, this is a sticky business. It's not easy for a customer to drop you and walk away to somebody else tomorrow. However, if they do, then it takes longer to get it back, right? It's not like, you know, changing from one brand of soap to the next. It's much more sticky because it's a B2B business. I would just say that, you know, bit of it is from the customer side, bit of it is from our own conviction and, you know, confidence that, you know, we have to go and get it. Just look at the history. The history, how many years have we had to take more than 2% pricing historically? Almost never. If you think about and suddenly you're going to take 10%, 20%, 30%, you know, whatever be that number. You know, that's all newer data. This is an exceptional situation which requires some behavior change on the customer side also and on our side also. I just think we're getting better at it, with each passing day. I don't think we've lived it, right? I will tell what happens if the recent little bit of tempering of input costs over the last few weeks, if it stays, I think life will be a little better. The pain on the margin side that it should reflect somewhere, right? It should reflect at least in the balance sheet. We are the largest one. We are taking all the pain. Are these customers talking of rewarding us? I will give a classic example. Yeah. Of tube business, okay? I track chemicals, specialty chemicals. 16-18 agrochemical cycle was very bad. There was a take or pay contract for two large specialty chemicals. There was no pay. They were guaranteed that when the things will improve, we will be given a disproportionate business. 18-22, we have seen that disproportionate business coming up. One of them has grown at 85% CAGR. Are we being promised something like that? Not 85%. Are we promised of a long-term better balance sheet for this pain? What is the gain we are looking for? I think first of all, the margin is invested, so to speak, right? It's not unique to us. We have not invested relatively more margin loss than other players have. If anything, we've lost less margin than others have. It's not as if we have suddenly lowered pricing to become competitive and take share. That's one part of it, right? That has not been our strategy. To lose margin to gain share is not the strategy. I don't believe in that kind of strategy. I think absolutely. Now, there are no very precise measures of this winning share. I can tell you in each of our regions, based on the business wins we are having and some leakages that. It's a dynamic world. You will win some new brands, some new SKUs every year, and you'll lose something, right? You might lose because some of the brands you invested in disappear, right? Or they are losing share or whatever, right? I can tell you, across regions, our assessment is that we're growing share, right? That's our assessment. There's no hard external data like you'll have, I don't know, Nielsen or retail audit and stuff like that. Our assessment is growing share based on the discussions that we're having and based on the granular details of business wins and losses that we are seeing, right? We are absolutely winning more than we are losing everywhere, in all regions. That's how it is. That's just my question. Thank you. Okay. Not at all. Let's go to somebody else. Yes, please. Hi. If the board or key shareholders say we need to double our growth rate and really accelerate things, what are the implications of that and is that really possible? If the board says that we should double our growth rate. Let's say if the. 10 goes to 20. Yeah. You know, how do you achieve that and at what cost? See, I think that we've not done the mathematics, so I can't tell you how we'll do it at what cost. Having said that, I believe this strategy, right, can deliver more, right? We have to just fuckin' see, right? I mean, you know, as we develop and execute that strategy completely, right? I do believe it can deliver more, right? Because to put it simply, and sticking to value growth numbers, we believe Oral Care, our business can grow high single digits for sure in values. I believe that Beauty & Cosmetics and Pharma can grow in strong double digits, right? Both through the way the category is growing, through premiumization of the category, and through the share gains that we can make because our shares are much lower in Beauty & Cosmetics and Pharmaceuticals. Therefore, on a blended basis, right, I still think, you know, we can grow strongly. If we were to just dial this up a bit more, right, I think the numbers can be better. I'm loath to talk about it, right, because we have not planned it like that. You know, the way these things happen is that I think we need to just, you know, honestly, right now we need to maneuver the current situation we are in, right, by growing out of the situation that we're in, like I said. I think once we are in little bit more of peacetime, right, I think your provocation is absolutely a valid one, right? We should absolutely be ambitious, right, and go for much more. Right? Right now I am loath to even talk about it. Let me put it another way. That are there large pockets of the market where you won't participate either for price or for other reasons? Yeah. Is there a way to get in there and double your growth rate? No. See, there are virgin markets around the world, and virgin means within quotes because where we are very low in terms of share, like Brazil. Now there'll be a step change in our overall market share as our Brazil plant starts delivering. Okay? We are looking at opportunities, and like I said, across different countries in the world where we are under indexed on share. There's an opportunity for us to choose a few of those and really go after it. Right? Then the strategy tactically, right, of how you will get share in the short term may require to do certain different tactics in those markets to, you know, unsettle somebody else, right, and you make progress over there. I think, you know, there's. See, first of all, we have 10% share of Beauty & Cosmetics and Pharmaceuticals, which means there'll be many countries in the world where we may be 1%-3% share. There are lots of opportunities. I just want to, you know, underscore the fact that the headroom we have, right? Oral Care is one-third of the market. Oral Care we will gain only by making, you know, a disruptive entry into markets where we are very, very small, like Brazil. Okay? In Beauty & Cosmetics, I think we have an opportunity to grow in many parts of the world. It requires slightly different strategy in terms of selling, the size of customers, the nature of the solutions in terms of, you know, design and capability. Wherever possible, we'll convert them from extruded tubes to laminated tubes. Where not, we will give them extruded tubes. Right? That's how we are seeing this whole piece. I think there is enormous opportunity. The question is, do we have the right capabilities in-house to exploit those, and do you have the investment power, investment capability to do that? I think that's where Blackstone comes in, too, because Blackstone is ambitious and aggressive and willing to support a robust plan. You know, I don't think we will be wanting of investment if we have a clear strategy and a clear plan of how to go about it. I'm with you. I think there is opportunity to raise the ambition for the business, right? I'm just wary of doing it in time like this. Just wary. I think we need to see a few quarters where the sun shines and, you know, business is okay, does well, and then say, "All right. Now how can we dial this up? Hello, sir. Yeah. Thanks for taking the question. Two questions I have. One is just on history and one is on the future. This 34 billion tubes that we mentioned in laminated and extruded, can we give a split how much is laminated tube and how much is extruded? And if that's possible like how was this number or mix 10 years back? That is number one. The second question is, sir, we also mentioned that we want to be only into the tube, as a packaging solution and we want to position ourselves on sustainability. Now my question is, that when we are giving sustainable solutions why restrict ourselves to tubes or is it too early to say that, you know, tomorrow we can give a complete suite of sustainable packaging solutions? Whatever you need in a form of a tube or a vegetable packaging or a single-use plastic, whatever. Just your thoughts on that. I don't think we really have the split between extruded and laminated. 2/3 will be laminated roughly. 1/3. 1/3. Trend over 10 years I don't think we have. Right? You see data is not available, of this, right? It's based on some internal estimates that we put together. See on sustainability and if you are. Just to confirm that. Sorry. Any trend which is giving us this confidence that this shift is happening. Shift from? Extruded to laminated. It would be helpful. All the mass brands. See, we don't know the exact number. All the mass brands like hair conditioners is what we are seeing, has already transferred into a plastic tube line. That's happening. Or rigid tube line. That's happening. Brands now in the last two years, slight change in the plastic tubes because of more internet selling in more countries. There are only people are not traveling, people are not going to the stores, people are ordering this and this. There are lots of opportunity for a newer brand to emerge, emerging brands, right? May not be doing it a long time well, but there are many brands are coming. Those brands are coming in extruded tubes. One is volume is lower. They are willing to pay a little higher price. When MOQ in a plastic tube, an extruded tube could be lower. In a laminated tube, its situation is slightly higher because of the process involved. They are emerging as well. Over a period of time that we could say that laminated tube has grown faster than extruded tube. Extruded tube has not gone away. It is still remaining in the same, 1/3 it is remaining. The other question you had was? We also mentioned during the course of this presentation that we would want to be a tube company. You know, the best definition of strategy I've heard is being clear about what you will not do. Okay? I can tell you one thing in business and in life, less is more and more is less. Now, the day I feel or we feel that there's not enough growth potential in tubes, right? Then absolutely. Right? What is sustainable in tubes may not be exactly the same specification that is sustainable in, I don't know, some other form of packaging. Okay? I think the headroom on tubes is enormous. I think there's something called power of focus, right? You know, the most important thing about strategy and focus is being clear what the management team should focus on, right? If we diffuse how they spend their time, then we'll diffuse the efforts behind something. I think we're quite clear that till we believe we have squeezed the lemon dry in tubes, which I think is a long way away, right? I think there's a pride in being the best tube company in the world, right? Big fish, smaller pond is okay. All right. Others? Yeah, please. You mentioned something about sustainability. One classical example of sustainability which creates a win-win situation is something like what Novelis has done in Hindalco. It basically you buy back all the cans from the market. You convert, you press it, you convert it into aluminum again, and you reconvert it into cans. Is that something that we are looking to do? Is that possible from a cost-benefit perspective? Because we are talking about plastics here and not aluminum. One is, technologically, is it possible. Second is cost-benefit. Technically, theoretically possible. Practically, you know, even in a developed country, segregating tubes as a separate item to collect and recycle is not easy because it's not such a mass item that you can collect in a week, say, once or maybe. I think tubes is more mass than something like a PepsiCo can, right? PepsiCo can wouldn't be in each house. Uh- Tube surely is in every house. Oh, okay. See, what happens is it's easily segregatable by people who is collecting it. That is a tube in a eco-industry, right? For example, let's say you leave India, collection mechanisms are still mixed. Yeah. In a developed country like Europe, the collection mechanisms are far better. Even in a city, how many tubes in a day will come there? Exact reusable for the same application could be a question mark. As a group, over a period of time could happen. What we are trying to do is every tube you make, you make it as reusable, whether it is in the same application or in a different application. That statement every company has made, everybody could meet. Now, then there are challenges in terms of reusing it. You know, you have to clean because most of this toothpaste has its own substances. How do you clean that? Those mechanisms are now coming up. It's getting developed. Now what's happening is if it is a portion of that waste stream, if say 5% or 10% is largely recyclable other materials, it is easy to do. If it is 100%, collection in my sense is a little challenging in today's terms. Over a period of time, that will come up. We have to secure two things. One is all material you make has to be recyclable. It's recyclable today. Usage is increasing. Maybe in the next three to four years, you'll see everything is recyclable. That's a Platina range that we have. Many competitors also have a different range. That's one we will achieve. We will reduce plastic content. See, we used to have 300 micron, 315 micron. Today, we have far lower thicknesses giving the same property. A reduction is happening. Reuse for the same application needs to develop, but reuse for another application are possible. This is one side. There are statutory requirements because it goes into mouth. Now, this needs an FDA approval. The material which is used for a toothpaste or a cosmetic is little lower, food is little higher, Pharma is little higher. It has an FDA approval. Now, the recycled material for this particular application to get an FDA is another process. Okay. It makes that entire availability for the same usage becomes little more difficult, and it needs develop over a period of time. Today it is reusable. If reusable is a bigger proposition than recyclable because of the practical difficulties, then is reusable a threat for EPL? Because then we are not making new tubes, right? We are just reusing those tubes. No, no. Maybe Colgate can do it by themselves. No, no. The regulations are very, very clear. See, the preference will be to use it in the same product, but it is not that you have to use it on the same product. Regulations cannot come like that. Over a period of time, see, it's a pride of a manufacturer. I say I use today, whatever is recyclable, whatever is re-used into my product that I said PCR content, that's what. It's not PCR content of only a tube portion. The PCR content of any product which is equally mixable with my product. I say I can go up to 40%, whatever. That's a statement people make. Nobody makes it that recycled content in my product is my own product. That is very small applications like a refill, you know, bottles. Which are not- I'm saying if I'm able to collect all those tubes from the market, if Colgate is able to collect and just clean it through some process and refill it with Colgate and then sell it back, is that possible? Theoretically, yes, possibly. Practically, collection mechanism doesn't work like that. What is the purpose of sustainability? Because then basically you are not collecting the plastic, you are just throwing it in some garbage. If you see every one of the tube, that's for individual testing, then you'll see there is a symbol called recyclable. It's recyclable in which code? 2, code means it's polyethylene material. 4 means it's PP material. It goes into PP stream. Mm-hmm. Now, what we are trying to do is our tube goes into code two stream, HDPE stream. When it goes there, it's not only tube material, it's any other HDPE material which is recyclable into tube goes there. Yes. That is how it gets recycled. Can EPL collect all this and recycle and make tubes out of it? Of course. Is there cost benefit there? Cost, no. Okay. See, it's all over a period of time you are working. Today, collection, PCR is premium. You pay two times because over a period of time that they need to develop this technology. Now, I pay, I use 40% PCR in some of my products. We We call product called. We sell at premium because it costs more. PCR, FDA-approved PCR is certainly two times. You got my point? It's not cheaper. It will become cheaper over a period of time. Today, recycled materials are not cheaper. Recycled commodity plastics are cheaper in India, not otherwise. Okay. It goes for a budget. It goes for a common application which doesn't have a product. Those products are cheaper. Something like aluminum cannot be replicated easily, at least in the foreseeable future. That is the right way of, you know. Yeah, where you are coming, I understand. Aluminum products, sir, you are saying it's easily recyclable, but it has other disadvantages in terms of, let's say, product to product comparison. An aluminum tube versus an. No, not a tube. Now, for example, what Novelis does. Yeah. It basically collects all the PepsiCo cans, it crushes them together, converts it into aluminum liquid again, and then aluminum solid, then the sheet, and then they have made cans out of it. Yeah. Instead of converting bauxite into aluminum, you are just converting the aluminum that is there in this world. Yeah. -again into aluminum. Yeah. Which is reusable. Is this possible here? Yeah, PCR, that's the concept. With tube? That's a concept. In aluminum and paper, traditionally, we have done better. Basically, all paper which are recycled goes into the paper recycling stream for a very long time. Likewise, aluminum goes into that. That's a single material. a single material. This is combination of materials. You need to segregate it and start using it. Okay. Aluminum goes to smelter. Many impurities in the aluminum or any contamination in the aluminum can just burned away because they melt. In this process, you don't melt. Got you. Slight difference in terms of processing, but possible. Over a period of time, this will become. Even in India, probably you will see lot of startups in terms of recyclable plastics that come up. Mm-hmm. Which application it goes, but they are able to segregate like code 2, code 4, code 6, they are able to segregate and reuse. Lot of NGOs collection start happening. In the course of time, I think it is possible. Right. Okay. Others? Yeah, please. Yeah. Good evening. This is Harish from Investec. Just two questions. You mentioned in your presentation about the wallet share for new markets, you know, starting with business, which you already mentioned a while back, and then, I think there was a picture of Sub-Saharan Africa and Southeast Asia as well. If you could just give us a sense of, you know, how you're thinking about this from a longer-term perspective, you know, any timeline from a three to five-year perspective in terms of market entry. Also, fundamentally, are these, you know, when you look at any of these market entries, do you know for how long do these businesses be, you know, are ROE or ROC diluted for you? Is it, you know, a three or four-year cycle before you kind of, you know, start to make, you know, company-level ROCs and scale up? That's my first question on new categories, new market entry. I'll talk about that when I request Amit to talk about ROC and what happens and what has happened actually with the plants that we have set up in the past and, you know, what is likely to happen with our Brazil investment. See, as far as wallet share is concerned, yes, I showed certain visuals. What we're trying to do is to make sure we do segmentation by country, select major countries, choose them one or two that we believe we want to go after, and then go and try and improve our wallet share in those countries, right? Brazil is a case in point, which happened probably not with all that science, but because it was the back of a customer commitment that was made, and we knew that it's a virgin market for us pretty much, right? It was a relatively no-brainer, right? Now, we do very little business in Sub-Saharan Africa. We are big in Philippines, right? In Indonesia, we have a minority stake in a JV, and Philippines is a billion-plus market, right? Philippines. Sorry, Indonesia I'm saying. Philippines, we do most of the tube there. Indonesia is a billion-plus market. We have a minority stake. In terms of wallet share, we don't add that, right? We have a 30% stake in that investment. If you do 51%, our wallet share would be much higher, okay, in Indonesia, right? It's a big market there. We actually don't have much of a presence in Thailand, where there's a big local manufacturer in Thailand. These are the big markets, Thailand, Indonesia, Philippines, and then there's Vietnam again, where we have relatively, I think. Do we export into Vietnam at all from China? Very little. Very little. All right. Now, these are all opportunities in the future. Each of them will have a business case, and you will decide what you want to do. Brazil was relatively, I would say, more straightforward because that's the model that EPL has used in the past to set up greenfield sites, right? Go in partnership with a customer, right? Go and make that happen. What this will throw up is the segmentation, the map that I showed, that we will choose a few markets around the system and say, how do you unlock that market and get wallet share? Right. In Indonesia, it maybe is, you know, can we get a 51% stake and this is the wallet share, right? In Thailand or Vietnam, it could be something else, it could be M&A, right? You know, setting up a greenfield or saying, "No, we don't have a right to win in those markets," but there are enough other places in the world that we will go after. I think this is part of our sales growth strategy that, I mean, we already have done, I would say, reasonably well. We are giving more of a focus through more detailed segmentation to identify opportunities. That's how we are approaching the whole thing. The idea is to go for growth. It's to hunt down opportunities. I said that, right? Both sales and marketing to hunt down opportunities. You know, we want to go and look for it, right? We also want to hunt down M&A targets, by the way, right? We are hungry in terms of our quest to pick up a few companies, right? We are constantly evaluating. Obviously, the strategic fit and the price has to be right. Obviously, we're doing that. ROC, Amit? Yeah. It all depends on the category which we are in. Assuming that if you are going into Oral Care, initially for the ramp-up period and all those acceptance will be lower. When we enter into any market with an anchor customer, what we explore is the other categories, which is Beauty & Cosmetics, Pharma. As we improve those compositions, we try to bring those ROC better compared to when we entered. That's how we look into, and it depends on project to project and, what's the purpose of doing that. Purpose also comes into play. That's all. The second question was on new customers and customer wins. Prior to, you know, the significant inflation about 12-14 months back, you know, management had mentioned that, you know, we've seen significant customer wins and we continue to see that. Is there a way that, you know, you can map that in your communication to investors and analysts on an annual basis? For example, you know, you're from the FMCG world and we talk about percentage contribution from new products, et cetera. Is there a way that maybe on an annual or, you know, basis you can map, say, percentage contribution from say to new customers or stuff like that? I'm sure you have all that data, and you can help us with that because, you know, I think incrementally, you know, getting market share from the same customers, it's still possible, but I think the greater, you know, opportunity is new customers, new markets. That's a good input. We'll look at that. You know, the thing is that, see, you can get more business from an existing customer or you could get completely new customers. The reality is you also have some leakage. Yes. Right? In any business, right? Even FMCG, you're winning new customers, you're also losing some, old ones, right? I think how do we create a metric that is relevant, to give you as a symbol for how the business is progressing. Right. Right? That you're actually gaining more than you're losing. Any direction, because if you look at core Oral Care growth globally or core BPC growth, Beauty & C osmetics, Pharma growth globally, you know, we will typically wanna map our growth ahead of that growth led by market share gains and new customer wins and getting new market entries. Yeah. Obviously not on a quarterly basis, but on an annual basis, if you can just map that, I think that'd be good input for us to follow. That's a good one. We'll look at it, see if the data makes sense. You know, and yeah, and when it's helpful, then yes, we'll look at it. Because I mean, it is core. I can tell you every month, every region, what we are discussing is the business development pipeline. Because recognize that in this business it takes 18 months of work before you crack a new brand or a new customer, right? You talk to them, then they'll, you know, look at all options, then they'll put your product in storage, see if it works. It may not work perfectly, then you'll tweak the laminate, then you'll again go and put it back in storage. So before you crack, it is not a, you know, flick of a switch, right? It takes time, right? This is something that's core to how we think about growth in the company, which is to constantly look at our business development pipeline and what's happening and what is going to happen next month and what's gonna happen 18 months later, right? This is core to how we think. We don't have a simple metric of contribution to growth. Right. That's what you mean. Yeah. I mean, just any kind of flavor, right? Because so for example, I think 12 or 15 or 18 months back, I don't remember, but you opened a West Coast office in America, right? Yeah. The context was to tap those customers. Yeah. Get a larger share. You know, anything which kind of gives us a sense of, you know, how that progressed in terms of what contribution. Not particularly in the West Coast, in the U.S., but just in overall context. You know, some of these investments which are front-ended in people, especially in markets like the U.S. where, you know, there's salaries and Great Resignation. Oh, yeah. All those things are happening. If we can get a metric to kind of look at that in any way, that would be interesting. We'll look at that. Anyway, the West Coast initiative is going well. Okay. It's all I can tell you. We were just looking at the numbers recently. I think, and the plans for this year also are very, very strong. I think just putting a couple of people there, and tapping into brands and customers who we were not tapping into, right? You know, I think it's positive. Right? We are moving in the right direction. Yeah. Great. That's it. Wish all the best. Thank you so much. Others? Yeah. We'll just come back to you. I think somebody else was there? No. No one else. There. Sorry, Sorry, just right behind you. I mean, we have. I don't want to keep you guys late because it's raining and so on, and we started late, but we would like to close at seven, right? Yeah. Just two questions on the cost and margin side. The first is, you know, your wage cost is almost 19%-20% of revenue. Is this something structural because of your location of your plant? Because it seems quite high overall. The second on margins. You know, assuming raw material costs stabilize at these levels, how long would it take you to get back to 20% margins? Or do you think the optics no longer make it that you'll ever hit 20% over a shorter period of time? What was the? On the wage cost, particularly this year, 2021, 2022, if you see, there were like western geographies, absenteeism, overtime, and everything was there. That's one because you are seeing that cost higher. Second is ESOP cost is also sitting in that cost. That's also. Otherwise, if you ask me, if you do a blend of geographies, that's the normal for any of the company which is globally present. Because in the western geographies, you have a higher cost. In emerging countries, you have a lower cost. On a blended basis, I think it's normal as far as the wage cost is concerned. Sorry, the other question was on. On the margin. Can it get back to 20%, do you think? Can it get back to 20%? You know, the thing is this. First of all, obviously we can't give you any kind of sensible guidance on that. There is some amount of the translation loss that is there at these prices, right? I would say we talked of last year 300 basis points margin reduction, right? 19.9% down to 16.8%, right? Roughly, half of it is the translation loss, half of it is the real margin loss. I would say that if input costs are stabilizing, right, with the efforts that we put in, we will start the journey of recovery. That I feel confident about. That we'll start the journey of recovery, that, you know, we would have bottomed out with no further input cost increases. Unfortunately, last year in September, we thought that costs have mellowed and softened, and again it started going up again in October, November, right? You know, it's a situation of never say never kind of right now. I would say that, you know, if we can continue our momentum on growth, if we continue all the efforts that we put in on costs, right? It's controllable costs, right? Not costs that are out of control. If the input costs, right, start tempering, I think we will start the journey of recovery, right? Now, how fast it will take to go back to what it was and will it ever go back to the numbers it is, I don't want to comment on that because I think that's giving too much of information on an unknown. Okay? I don't think that makes sense. Absolutely, I think. I just want to say this, right? I mean, we are also as focused, right, on starting the journey of margin recovery. Right? You must know that. I mean, it's the one thing that you know gives us sleepless nights, right? How are we gonna start the journey of recovery? How are we going to get more volume growth? How will you get more pricing? How will you cut costs fast? Right? That's exactly the three verticals that I shared right in the end. That is what is keeping us awake today. Right? I mean, suffice that you all know that, we are also consumed by it. But I have to say it isn't as simple as it is on the slide. I just have to say this. You know, I can say that we started the journey late, but in the last few months and so on, it has not been for lack of trying, I can tell you that. Not for lack of focus within the management team, not for lack of effort and so on. It's just a tricky situation, right? We're learning some of this stuff also. Right? We never knew this kind of situations could happen and how you would have to deal with it, right? Every crisis has its own lessons. I mean, that's the honest situation. We are absolutely focused on getting this bottoming out, right, as quickly as we can. I can't say exactly when, but bottoming out and starting the journey of recovery. We want to do it now. Okay. Okay. Probably that's the last one, folks. No one else? You have a question. Would you mind if I go there because we gave you some airtime in the beginning? Okay. Right. Hello. Hi, sir. Hi. Sir, my question is that how much is the share of Beauty and Pharma in each and every region so that I can just get an idea of how much EBITDA growth is possible. Like if you can share some numbers on that. Yeah. It will give some traction. Yeah. Do you want us to share? Do we share that data? We can give a flavor maybe. Yeah. Sir, like. We'll give you a flavor, we can't give precise numbers. If you see America is around 50/50. Europe is 60/40. In favor of? In favor of non-Oral Care in Europe. As far as EAP is concerned, it is around 65/35. 65 oral and 35 non-oral. Americas is around 75/25. 75 oral and 25 non-oral. 75 oral. Sir, like in the span of five to seven years, how much do you actually anticipate the growth of the non-oral? Like, if you can get some idea in the CAGR terms, like in each region or some idea. That- Is it possible? Like if you have the data. That's like an outlook by category, right? I wouldn't want to hazard that. What I did say is that, you know, we believe that our Oral Care business should continue to grow at kind of high single digits. Our Beauty & Cosmetics, Pharma should grow at strong double digits, right? strong double digits because the categories are growing faster and our shares are much lower for both those reasons, right? The size is also much higher. The size is higher, no. Size of the market is much greater. Sorry? Size of the market is much greater in case of Beauty & Cosmetics as compared to the Oral Care, right? In terms of number of tubes? Yeah, sure. Yeah. No, I said the number of tubes, right, on the slide. No, no. That's not true. Value could be. I have not looked at that. Right? You know, Oral is larger, by the way. Okay. Mm-hmm. Both put together, what did I share with you? It was either somewhere around 42 billion tubes, I guess. Yeah. Yeah. Yeah. Out of 42 billion, Oral is 17 billion. Yeah. 22 billion is Beauty & Cosmetics and Pharma. Okay. Yeah. It is larger, right? Value will be even more, right? Food and others is small. Okay. Like, sir. That's including Pharma. Yeah. B&C and Pharma together is bigger than Oral. Okay. Yeah. Sir, like just one last question. How much like is the difference of the EBITDA margins if you compare the Oral and the non-Oral? Like how much non-Oral EBITDA margin is significant as compared to the Oral Care, if you can give some idea. As we actually talk on ASPs, if Oral Care is X times, the Pharma and Beauty & Cosmetics can be 2x to 3x on the ASPs. That's it. The margin is little better in the non-Oral Care. That's what I can share right now on the margins. Okay. That was it. Thank you. Yeah. Thank you. Hello. You might have sold tubes which can hold 50 kg of toothpaste for oral. Because as you said, there are toothpaste tubes which are this small, and then there are maybe something as well. Yeah. You know, the diameters keep changing. The tonnage is not a correlation to volume. It just isn't. Because we've been through choppy periods, there's been far more choppiness in consumer behavior as well. Right? I mean, I can tell you from my previous company in alcohol, right? Large pack sales, quart 750 ml exploded and small pack went down because people couldn't shop at the retail store and buy the pack in the evening. They were buying big bottles and taking them home. There's been so much of change in consumer behavior in the recent past because of, you know, all these kinds of external impacts that happen. Yeah. Yeah. The total alcohol consumed may remain same, right? The volume. The total volume. Yeah. Yeah. Yeah. Similarly, total amount of toothpaste used will remain same, right? Could be. It's only the packaging that is changing. It's only the packaging. You're saying why don't you look at tonnage of the product inside. Yes. Tonnage of the product inside. That your tubes are holding. Maybe in this quarter your tubes will have like. Well, look at it, you know. I don't think we've ever tried to correlate tonnage of product inside with number of tubes. No. For Oral Care, I think the weightage would remain more or less same. Colgate is not going to be heavier than Pepsodent, I'm sure. No, not sure. No. See, what happens is product is made by injection in this case. That means your processes are set by how many number of tubes you will make, what is the capital investment there. Therefore, your pricing is based on pieces. Mm-hmm. You make a small one or a big one, you do some adjustment to get a ratio. It is not, you said bigger one costs two times, small one will not cost you half a time. No, that I understand. This is more from a perspective of growth. Growth. He's saying if. Yeah, I mean. Will tonnage growth of toothpaste be closely correlated to volume growth of tube? Yes. Irrespective of whether it's a single-use travel tube. Yes. a large dia 250 g tube. Yes. That's his question. Don't know. I don't know it. Have you ever looked at it? Have we tried this? No. I'll find out. First of all, I have to get tonnage of toothpaste. Tubes we'll be able to count. Tonnage of toothpaste. It is there. I'm sure Unilever and people like that or the big bottle guys report it, so we can see. You'll also need it by geography because the mixes are very different in different geographies. That's an input. We'll make a note and see if we can make some sense out of that. Yeah. I understand. Yeah. I understand. If that helps in some ways to be a lead indicator for category growth. Yes. You know, the bigger thing is not just volume. The bigger thing is value, and that's why we keep saying volume is a poor indicator. Because what's happening even in Oral Care, right? Even in India, if you talk to Colgate or you follow Colgate, their strategy in Oral Care is all about premiumization, right? Their volume growths are subdued, but their value growths are coming with all about premiumization. All the new variants that they're doing have all the bells and whistles. Mm-hmm. Right? They also have better tube. Good for us. Yeah. Okay? That's how it is. That's why, you know, we just, you know, wary of getting caught in the volume discussion or correlation because this is about value growth and premiumization. I spoke about it as one of the five key trends. Mm-hmm. Premiumization is really significant. Okay. We are seeing that in all categories we operate in. Yeah. Sorry, last one. Capital allocation. The daughter will be afraid. Capital allocation strategy. How do we see for next five years, the cash flow we generate, what is towards the CapEx, what is towards the dividend, what is towards the M&A? Ooh. If there is something else beyond that. Yeah. Sorry. First and foremost, the priority is growth. Yeah. Okay? CapEx, you know, we discussed earlier also, the CapEx discipline remains the same. Depreciation amount, not every year matching, but in a four to five year average term, the depreciation will be invested as a CapEx. That will be more or less sufficient to deliver this double-digit growth which we are comfortable. I have a question. Uh. How can a replacement CapEx give you a double-digit growth? No, these are all growth CapExes, as far as the CapEx is concerned, because you know that the additions are modular between printing, tubing lines and other things. These are all majorly growth CapExes. That's the investment as far as the CapEx is concerned. First priority is growth, and then if there are extra cash flows, that's the dividend. If we are giving depreciation into CapEx, then PAT is free cash flow. Yeah. PAT is the cash flow. You have opportunities like strategic CapEx now. Brazil is there. Laminated. This CapEx doesn't include the Brazil. This CapEx, which is the normal CapEx, doesn't include the strategic greenfield CapEx. M&A. Brazil or M&A or projects like laminator, which we talked about. Those are the strategic CapEx. What is the dividend we envisage out of this growth? Are we saying 30%-35% dividend payout will sustain and 70%-75% will be a growth focused, strategic, investment we will do over five years? Is that what we said? No, I can't be specific on the number on the dividend, but yes, we will maintain consistent dividend policy. What is the dividend policy now? Is there any policy for dividend? Policy means we'll be consistent on the dividend payouts. Okay. Which we are, which is historically, and that's how we will continue. We are confident that. First priority will be the growth. Yes. We are confident that the remaining capital, because if we are consistent, it means we are left with a lot more cash, and we are already very comfortable on the balance sheet side. Are we willing to go ahead and say that, "No, we want to invest aggressively. There are enough opportunities." We are not averse in terms of larger M&A. Is that clear? Can we buy a company with a billion tubes out of sales? Yes, we can do that because, as far as balance sheet is concerned, it's a strong balance sheet. We can leverage it further. If we need a bigger investment, like you are saying that bigger M&As, yes, the current balance sheet and the backing of Blackstone, yes, definitely we can go for that. Right. Based on the size of the M&A and other things. For the right opportunity, I think we will be brave. At the right opportunity is the question. Well, that's a million-dollar question, right? We are constantly evaluating, right? I feel last year we evaluated three or four, apart from CSPL which we did, but we didn't progress on it. Finally strategic fit and price have to all work in your favor, right? There are things that we are evaluating even today. What is more of a barrier? It's a valuation which is more of a barrier or you think- Absolutely. What other matters more than the valuation for us? What made those three, four deals fall apart? You've looked at them, right? The three, four deals of last year. They were largely in Europe. Yeah. One is valuation, definitely. That is, one. Second is the synergies which you can get out of it. That is another thing which is, there. There are filters on the customers. Whether we are getting new set of customers or, what kind of, categories we are getting in, whether it is Beauty & Cosmetics dominated or a Pharma dominated. These are the filters which we normally apply on this. I can't be very specific on those four deals that- No, no. I just wanted to understand. Whether it was. What was the dominant reason? Or was it really the valuation? Yeah, I can't share those reasons, but yes. Principally it was those. I think, you know, our acquisitions are. We would love to do some acquisitions in Beauty & Cosmetics. Because for all the reasons that I've already talked about in the presentation, right? If we can get the right valuation in the right geographies, right? We'd love to do it. I think Europe we said we are dominant, so I don't think. No, we are not. We are looking at Beauty & Cosmetics. No, we're not dominant. Probably 60%. No, that's 60% of our business. Yeah. We are a small share of the total market. There's a headroom we have to look at to grow. Our business is 60% Beauty & Cosmetics, but our market share in Europe is single digit of the total market, of the total tubed market. In Europe particularly, M&A could be a good way. The way I look at it, Europe, I don't feel comfortable because our margins are so low. Competition will be the same. An acquisition in Europe will be a significantly ROCE dilutive versus an acquisition, say, in AMESA or EAP or U.S. Why would we do a capital allocation in Europe? Yeah. Which is ROCE dilutive? I'm just- We will not do it if it's dilutive, no. Part of it therefore comes back to valuation, right? What you're getting. I think the idea is if it is margin dilutive, ROCE dilutive, then why the hell are we doing it? You have to look at the right opportunities. I can tell you there are opportunities. Right. Are these big opportunities? I mean, not massive, but big enough to fulfill some of the gaps we've spoken about in terms of our country opportunity. Right. Our smaller customer segment opportunity. Right? We're a bigger company, bigger customer player. There are people who may be smaller than us in terms of size and so on, but they are big with small customers. That helps you to then, you know, take a strategic position in a segment where you want to grow. Right? And finally, at the right price. Right? Now, we talked about your margins will go down and your competitor, all that stuff, right? The reality is, why would you pay multiples today that you were willing to pay one year ago in packaging? You shouldn't, right? Right. I mean, the multiples globally have come down on packaging companies around the world. You have to get it at the right price. Today is the time for that, right? You will get it at cheaper price because. Provided the seller is willing to sell. Valuations are lower. Provided the right opportunity, the seller is willing to sell at a lower valuation. These are exactly the conversations we are having. I can just tell you, we are hungry for opportunities, right? If anybody has any ideas in the room or leads, please send us a mail. We will absolutely evaluate it, right? Because that's what we're trying to do. Anyway, listen, I want to thank every one of you for being here, having an engaging conversation as well, and with all the rain and everything else, just making it possible to come here physically. I think it is different from doing it in Zoom, I have to say, right? Whether we like it or not, it's a little bit of extra commute, but I think it's more engaging than a Zoom call. Thank you, everyone. All right.