Ladies and gentlemen, good day, and welcome to the Emami Limited Q4 FY2026 earnings conference call hosted by IIFL Capital Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Percy Panthaki from IIFL Capital. Thank you, and over to you, sir. Hi. Good afternoon, everyone. It is my pleasure to host the management of Emami for their Q4 FY 2026 results con call. I have with me from the management, Mr. Mohan Goenka, Whole-time Director and Vice Chairman; Vivek Dhir, CEO, International Business; Mr. Dhruv Aggarwal, Chief Growth Officer; Gul Raj Bhatia, President, Healthcare; Mr. Manish Gupta, President, Sales; and Mr. Rajesh Sharma, President, Finance and IR. I'll hand over the call to Mr. Goenka for his initial remarks, and later we will open up for Q&A. Over to you, sir. Yeah. Thank you, Percy. A very good afternoon, ladies and gentlemen. Thank you for joining us today for Emami Limited Q4 and FY 2026 earnings call. I am pleased to share our results for the quarter and full year ended 31st March 2026. I am extremely pleased to share that Mr. Dhruv Aggarwal has recently joined us as Chief Growth Officer and is joining the con call today. In this role, he will lead the growth agenda across our investee companies, while also driving new investments and partnership opportunities. Dhruv comes with over two decades of rich experience in growth strategy and transformation consulting, including 13 years at Bain & Company, where he was a partner in the consumer and retail practice. Let me begin by setting the context for the quarter. Q4 2026 presented a challenging operating environment. The onset of summer was significantly delayed, with inconsistent temperatures across some key markets. Unseasonal rainfall further impacted category demand. Added to this was a high base from the previous year and ongoing geopolitical headwinds in the Middle East affecting our international business. In spite of these headwinds, I am pleased to share that the underlying momentum in our business remains firm and we enter FY 2027 with confidence and clear strategic intent. Our domestic business ex of summer portfolio demonstrated healthy resilience, growing strongly in double digits at 11% in Q4 2026, reflecting the underlying strength of our core brand equity and our strategic efforts. The summer portfolio was the principal drag declining by 22%, with talcum powders alone declining by 40%. I would, however, like to highlight that we consciously reduced our receivables by over INR 100 crores during the year. A 10-day improvement in the working capital cycle as part of our ongoing focus on distributor hygiene and channel health. On a consolidated basis, revenues for Q4 stood at INR 925 crore, reflecting a decline of 4% over the previous year. This decline was primarily driven by weak summer rather than any structural or competitive weakness in our business. Rest of the portfolio like pain management grew by 11%. Kesh King grew by 14%, delivering its second consecutive quarter of double-digit growth. Healthcare range grew by 7%. Strategic investments grew by an impressive 34%. 7 Oils in One grew by 34%. BoroPlus other than talc grew by 4%. Male grooming range declined by 4%. Our channel strategy continues to evolve positively. Trade pipelines remained healthy throughout Q4. Organized channels remained strong momentum and further increased their salience to approximately 32% of our domestic business in this quarter. Wholesale channel dependency has reduced to 27% of total domestic sales, reflecting the structural improvement in our channel mix. Quick Com continued to be a standout performer, posting an outstanding 70% growth, while GT Marts also delivered a robust 25% growth. Our international business declined by 5% during the quarter, primarily due to geopolitical disruptions in the Middle East, which impacted shipping routes through the Strait of Hormuz, disrupted supply chains, increased freight costs, and affected operations across the GCC, Middle East, CIS, and South Asian markets. On the financial front, I am pleased to report that our gross margins expanded to 68.4%, an improvement of 250 basis points over the previous year, reflecting our rigorous cost discipline and judicious pricing actions. EBITDA for the quarter at INR 187 crores declined by 15% due to operating deleverage and despite which we invested behind advertising and promotional spends, which grew by 12% in this quarter. Profit after tax stood at INR 143 crores, a decline of 12%. For the full year FY 2026, revenues stood at INR 3,780 crores, a decline of 1%. Gross margins at 69.9%, expanded by 130 basis points. EBITDA came in at INR 964 crores, declined by 6%, and PAT stood at INR 775 crores, a decline of 4%. While these numbers reflect the impact of challenging macro and seasonal environment we navigated through the year, we believe the resilience of our portfolio and strategic investments made during the year have strengthened our competitive positions meaningfully. We remain focused on strengthening our core brands, deepening our omni-channel capabilities, and continuing to innovate for the evolving Indian consumers. With healthy margins and debt-free balance sheet and a portfolio that spans both across essential and premium growth categories, we are well-positioned to deliver sustained growth in FY 2027 and beyond. We look forward to sharing more with you as the year progresses. Before we open the floor for Q&A, I would request Dhruv, who has joined as Chief Growth Officer, to share some plans on the recent acquisitions and strategic investments. Post Dhruv, I would also request Vivek to share challenges in the international market and how we plan to mitigate some of those. Thank you so much. Over to you, Dhruv. Good afternoon, everyone. Very happy to be part of the group and excited about the growth opportunity for our strategic investments and portfolio companies with the support from the board. We're present in this portfolio in exciting high gross margin businesses, in high growth categories and demand spaces. This has given us an opportunity to invest in brand building over the last three years. We're also building in the right high growth channels like Quick Com, which I think are still under-penetrated. Our advantage is both strategic and structural. Quick overview on some of these companies. The Man Company is now witnessing healthy traction across the categories. We grew versus last year, and we've had strong growth in perfumes and non-perfume [deos]. I think the business has benefited from sustained momentum across digital-first channel business. The idea going forward across the portfolio is to sustain growth at 30% year-over-year, while improving the bottom line as well. Brillare, for instance, which does luxury haircare and skincare products, brands like that, we expect them to grow much faster, and I think they're on the right trajectory. Last year, we were also able to drive absolute EBITDA improvement in this portfolio. This year, the intent is to increase the absolute EBITDA by about INR 15 crores. That strengthens our positions and puts us in a clear path going forward. Dhruv, sorry to interrupt. Your voice is not very clear. Maybe the microphone is very close to your this thing. Okay. Okay, this should be better now. Yeah. Yeah, go ahead. That's what I wanted to cover. I've covered The Man Company and Brillare. Okay. Anything on the new strategic investments like Axiom and IncNut? Sure. Axiom, we are very excited about. I think it marks our foray into the fast-growing fruit juice category. I do want to point out to everyone that Axiom is already a profitable entity, unlike many of the new age startups. This is especially a value accretive addition to our portfolio, and we have significant plans for growth here itself. I think the headroom is extremely high. Lastly, we've acquired IncNut, which consists of two brands. There is Vedix and there is SkinKraft. As consumer preferences increasingly shift towards efficacy and customization, the company basically is viewing personalized beauty as a significant long-term growth opportunity in India and globally. With this acquisition, we have presence in both of these businesses. The idea is that extremely high gross margins, very modest EBITDA losses, and so this reflects really continued investments in growth and customer acquisition. We have a very high long-term aspiration for this business over the next five years. Okay. Thank you, Dhruv. Vivek, would you want to share anything on the international front? Yeah, sure, sir. Good evening, everyone. Regarding international, as you are all aware, we had gone through a lot of stress in the month of March, in fact, starting 20th February. Prior to that particular date, we were growing at a very decent pace, almost like double-digit growth in most of the markets for us. Starting 20th February, we got a big jolt in the month of March, where the entire world moves and supply chains were shut. Entire Middle East is dependent on supply chains from different parts of the world. It's more like a transnational supply chain. We produce 50% of our goods within UAE, which are also dependent on raw material and packaging material requirements from different parts of the world. 30% of the goods are imported from Europe, another 20% are imported from India and other parts of Asia. That got impacted very badly in the month of March. Come April, we have been able to streamline quite a bit of the disruption of supply chains, despite costs going up and other things. Come April, we have been able to resurrect, and we are almost like little 2% growth in the month of April. We are also expecting things to get stable in May and June as well. From second quarter, we should be able to deliver good double-digit growth. Quarter one should also remain close to single-digit growth types only. That is how the situation is. Okay. Thank you so much, Vivek. Thank you. Now we can open the floor for Q&A. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Abneesh Roy with Nuvama Wealth Management. Please go ahead. Thanks. Abneesh Roy this side. My first question is to Mohan Ji. Sir, you sounded quite confident on FY 2027. If you see Q4 commentary by every FMCG company, paint company, adhesive company, it has been quite positive. You are in sync with that. My specific question is, El Niño, generally summer categories do well, so how do you see Q1, Q2 for Navratna, Dermicool? Taking into account, there have been a few days of rains in many parts of the country, but currently Delhi is at 45 degree temperature, and most parts of North and East India are at very high temperature. What would be your realistic growth outlook in this part of the business? Second bit on legacy businesses. BoroPlus had a tough Q4, -8%, and a tough FY 2026, 2%. Generally, in El Niño year, which is FY 2027, winter can be weak. Given this unfavorable scenario, how do you see BoroPlus growth in FY 2026-2027? Yes. Abneesh, as far as the summer is concerned, we have seen delayed summers. You are right that some parts of the country, we are seeing amazing double-digit numbers. Overall, we are very confident in the first half. The summer brands are definitely growing at double digits, both Navratna and Dermicool. We are very confident. That’s what we see as of now. I can’t predict for BPSC for now. Of course, it is on a lower base, so that will help. But how the season pans out, it is impossible for me to say anything. But summer is going strong and you will see great numbers as far as summer is concerned. Understood. My second question is to Dhruv. Wanted to understand what made him join Emami. I’m sure he would have a good reason, so just want to understand that. Second is when I see Marico- What made him join Emami? No, it's not from a negative connotation. You can ask him separately. Maybe not on the call. I will ask that separately also. Yeah. I want to understand, if I see Marico, Tata Consumer, Pidilite, et cetera, Dhruv, they have almost 20%-30% of the portfolio growing at explosive rates, which makes the entire company start with a high single rate kind of a growth rate. In your case now, if I see new and mainstream portfolio is almost 21% of the business. Are you confident that at least this part of the business we can grow every year, say, at 25%-30%? Coming to IncNut, last few years, the sales has been stagnant. What is the reason and what can change that? I understand first year can be a bit easy, what was the reason for stagnation the last three years? I think the answer to the first and second question is pretty much the same. I think the portfolio, I'm pretty confident of growing this, like I said, 30%+ year-on-year. It is largely because of the demand spaces we are in. I see the difference in the Q4 performance. I think we see that in the materials as well. We've grown at a faster clip in Q4 compared to the rest of the year. The high gross margin basically gives us an opportunity to now still continue to invest in marketing while pull back in the form of efficiencies that we are delivering and deliver a higher margin as well. I feel I looked at the businesses in detail, and I feel now pretty confident that each of these businesses has a way to grow. Specifically on IncNut, with your question on slow growth over the last few years. I think from a margin perspective, they've actually turned the trend completely, and that gives us the confidence, because yes, they did sacrifice growth, but with a much higher, much better margin. We see some opportunities to immediately include efficiencies in the business. I think our portfolio, and the way we deal with our portfolio has also helped. The opportunity in specific spaces like international, like with Vedix, which is one of their four brands, I think there's a lot that can be done with the brand. That's why we are confident of this growth. Understood. One last follow-up and I'll end there. Mohan Ji, on Axiom, you have increased the stake, I understand that. If you see from your entry into the company and now, would you be happy with the performance? The space has become very crowded, so entry of Campa Cola has changed game of the entire space. Because ultimately everything customer sees as one type. I wanted to understand, is there a right to win for you in this part of the business, given you are still small and now the competition has changed dramatically? Abneesh, this is not like a cola drink. It is aloe vera-based fruit drink. We are extremely hopeful, as Dhruv said, that this is a very profitable business for us. We almost do INR 40 crores-INR 45 crores of EBITDA in this business. We have no reasons not to invest here more. Very few beverages company makes such kind of EBITDA. That will also change our completely, the investee company's outlook. We have some strong plans. We have a new CEO who has joined in from Dabur. Dhruv, right? Who is driving this. That's right. Yeah. Who is driving. What is his name? His name is Harsha. He's joined in, yeah. Yeah. He was the head of Nepal business for Dabur. He has joined as the CEO for the beverages company. We have some high talent who have just recently joined, Abneesh. Don't ask why he has joined. They see great future in Emami. That's why they have joined. Great future only. Right. We had always wanted to build a great team, and seeing these people around, we are very confident that the investee companies have great future. With great summer, I think, going forward, you will see some great numbers. That's what I feel. Sure. Understood. Thanks a lot. I'll connect again. Thank you. Yeah. Thank you. A reminder to all participants, you may press star and one to ask a question. The next question comes from the line of Shreyansh Jain with Swan Investments. Please go ahead. Hello, can you hear me? Yes, Shreyansh, please go ahead. Yes. Sir, I had one question. If I look at your hair oil portfolio, the two brands, Kesh King and 7 Oils in One, last two quarters, they've done really well, and whereas H1 was pretty weak for them. I'm just trying to understand, has something changed for the whole industry? When you look at companies dealing in the hair oil space, all of them have sort of reported good, strong numbers. I'm just trying to understand, could you spell out reasons for what has changed in the industry? You also have actually changed your portfolio slightly. I'm just trying to understand the reasons for the growth that we've seen in the last two quarters for yourself and the industry. Has something changed fundamentally, and we're seeing hair oil as a category come back into fashion or what is happening really, unorganized to organized, GST rate cuts? Could you just help us understand broadly what's happening in that space? Shreyansh, what we understand, at least as far as we are concerned, both these brands were relooked by the BCG. We have implemented that strategy. You are right, the overall portfolio has done well for most of the companies. One of the reasons what we get to understand from the market, that the unorganized trade, which because of these disruptions and costs going up, they have become unviable. That is one of the reasons why suddenly there is a spurt in organized hair oil businesses. Coupled with our strategic moves given by BCG, that has also helped. We also see that momentum going on for 7 Oils in One, even Navratna and Kesh King in this quarter as well. Okay. Unorganized has suffered quite a bit because of costs. Yeah. Now that we're seeing copra prices falling off, so do you see this trend kind of reversing or you think that this market share gains should continue and we all organized players should stand to benefit going forward as well? I don't track copra prices very honestly because we don't use that. Got it. My second last question is, sir, obviously, organized and new age channeling seem to grow really well for you. I'm just trying to understand in terms of profitability, where are we versus GT or our traditional businesses? Obviously, we're kind of growing there, but are we actually operating at a lower margin versus our base business or how should we look at this piece? Shreyansh, we have improved significantly as far as this new channels are concerned. We had focused on our margin front. Now we are quite close to our GT margins. Our total contribution from these channels are now almost 32%. Which is quite healthy, and even the margins are very healthy now. Any sort of category which tends to do well in the new age channel, if you can call that out, or all product categories and all segments. Most of the categories. 7 Oils has done exceedingly well. Kesh King, even skin creams. The large packs, we have introduced significantly large packs in these MT and e-com. Got it, sir. Thank you, and all the best. Thank you. The next question comes from the line of Percy Panthaki with IIFL Capital. Please go ahead. Hi, sir. Just wanted to understand a little more on the ad spends this quarter. They're at about 22%, 23% of sales. If you can give some idea as to how are these ad spends distributed across brands, how many are for the core four or five brands that we have, how many are for the growth initiatives? Given that some of these brands are fairly old and growing at sort of normal FMCG growth rates, if you look at BoroPlus, Navratna, et cetera. Those brands form a large part of our sales also, why is it that we need such high ad spends as a company compared to several other FMCG companies that we look at? Percy, this particular quarter, the significant increase has happened in Brillare. They launched rosemary oil shots and a significant amount of budgets went there. That's why you are seeing the disproportionate increase in advertising budgets. As far as our traditional companies are concerned, it is absolutely in line, rather it has come down a bit. It is purely on investment on Brillare. Got it. If I just look at the core brands, which is your Kesh King, Navratna, BoroPlus and so on, those four or five main brands that you have. Correct Smart and Handsome, et cetera. If I look at the ad spend only of those core five or so brands, as a percentage of sales, would it be, not for this quarter, I am just talking about generally for the year as a whole? Yeah. Would that be close to about a 10% and we are actually spending approximately half of our ad budget on some new initiatives, which right now are probably giving a single-digit or a low double-digit contribution to sales, but there is hope that they will actually grow much faster in future. Yeah. If you see our total yearly budget, it is almost 20%, right? 19.6%. From our existing portfolio, the budgets would be roughly, I think, should be about 14% or so. Yeah. Right? From the investing companies, it should be about 6%. Got it. Can you give some idea on your distribution initiatives? What is your direct reach currently? How much you have grown this year, and what are your targets for the next 12 and 24 months? Yeah. Percy, I'll hand over to Manish, who is the head of sales. He's just going to share. Yeah, hi. I think it's a continuation of a similar question in one of the previous quarters, where currently our network reaches out to, let's say about 500,000 odd stores across urban and rural India. We had completed, you will remember, a big project called Khoj for the expansion, and closed that two years back. Please, your voice is a little faint. Hello. Yeah. Can you hear me, Percy? Yeah. That's better. Okay. Just to repeat, you'll remember that the company had taken a large initiative on Project Khoj a couple of years back, which was closed. We are currently reaching about 500,000 odd outlets between urban and rural India. We have a very deep reach network reaching 100,000 odd towns, as per census. Currently with the space we are investing in big time is in urban India on the GT Marts and upgraded stores, premium stores and all that, because that's where the new focus is. Otherwise, we are working towards improving the current reach with more lines and efficiencies and stuff built in. Currently, as far as this is concerned, that remains our focus, and that's producing results because we are addressing the premium portfolio and the premium customer. How do we manage this growth in GT? If I just try and calculate the GT growth. If I take your overall growth and then in the last few years, the non-GT portion, which is the e-commerce, Quick Commerce, modern trade, et cetera has come up to 30% +. Which means that as a derivative, GT is probably sort of marginally declining. How do you win in this kind of a situation where your distributor is seeing that his sales is flat or maybe even marginally declining, et cetera? How do you keep the trade happy? Well, surely this is a fact of the country that the shopper behavior is changing. We have to honor that and play as per the channel needs. Yeah, you're right. What we are doing, it's a large portion of our business anyway, especially in the consumer business that I'm talking about from the domestic perspective. Our distributors, we are taking care, as Mohan Ji said in his opening remarks, that we have been consciously keeping the distributor hygiene and channel health clean, maintaining the stock hygiene, maintaining the credit hygiene, because the game is. One is about the growth, second is about taking care of your partners in a clean, hygienic way on the return of investment from their perspective. That's what we are working on, and that's what we continue to do. That's why these initiatives like mart stores and other things to grow their local businesses on the urban and rural perspective. We understand the growth part, but from a distributor stability perspective, I think we are in a very solid ground within the FMCG industry. Right. I think I'll come back. Alaric, can you just announce if anyone wants to be in the queue? Sure, sir. Participants, please press star and one to ask a question. The next question comes from the line of Harit Kapoor with Investec. Please go ahead. Hi, good evening to you. Just wanted to check on this talc impact for the year. If you could just highlight how much has been the impact for the year of the summer portfolio of the talc. What is the share of that business now in FY 2026? That's the first question. The second was that, can you see some abnormality in that number again if the summer drives up again this year, with almost two months done of the summer? Is that a likely outcome as well, that you see another spike in growth as you saw in FY 2025? Lastly on this is that, how is the margin structure for that category? Is it similar to what our average margins are? Harit, if I exclude the talc portfolio, then our growth is around 5%. If we exclude the summer, then it is -16%. Right? Definitely we are seeing some spurt in April and May for the summer brands. The margins, as far as the talc particularly is concerned, it is a slightly lower margin compared to some of our other products that we have. Got it. Talc now as a percentage of the business for FY 2026 is how large now? Talc for the total business should be. Yeah roughly at about 10%. Total revenue for talc would be what? About INR 400 crores? INR 300 crores. Okay. Yeah. Total, if the revenue is INR 3,700 crores, the talc business- Got it. is roughly INR 300 crores. Yeah. INR 300 crores in FY 2026, which is much lower than what it was in 2025. Yeah. We lost almost INR 100 crore of business in talc last year. INR 100 crores. Before last year it was INR 400 crores. Got it. The other thing, last thing was on profitability. Assume you have a normalish kind of a summer this year. Not saying talc grows by 30%-40% again, but just generally a normal kind of a summer this year. Obviously that some of your investments are generating positive EBITDA, especially on the B2C side. Do you see this profitability piece coming back to that 26%-27% range of consolidated EBITDA the same way as you saw in 2024 and 2025? Is that the way to think about it? As you are saying, the core portfolio ex summer has been doing okay. Yeah. Let's wait and see. Harit, still there is some pressure as far as the input costs are concerned, because you know how the crude is behaving. Okay? We will have to just wait and watch, but definitely you would see some improvement as far as our margins are concerned. One last thing, if I may, was the pricing that you put in in the last one and a half, two months. Any price increase, weighted average price increase or something you could help us with? Yeah. It is around 3%. Around 3%. Great. Thank you. Wish you all the best. Thank you. Thank you. The next question comes from the line of Abneesh Roy with Nuvama Wealth Management. Please go ahead. Abneesh, please go ahead with your question and kindly unmute your line in case if you are on mute. Ladies and gentlemen, as there are no further questions for today, I would now like to hand the conference over to the management for the closing remarks. Thank you all. Thank you all the participants for joining us today for our Q4 earnings call. Thank you IIFL for arranging this. Thank you, Percy. Have a good day. Thank you. Bye. Thank you, sir. Ladies and gentlemen, on behalf of IIFL Capital and Emami Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.