Ladies and gentlemen, good day, and welcome to Zydus Wellness Q1 FY 2025 results conference call, hosted by ICICI Securities. 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 the 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. Manoj Menon. Thank you, and over to you, sir. Hi, everyone. It's a wonderful good morning, good afternoon, or good evening, depending on the part of the world you are joining this call from. Representing ICICI Securities, it's our absolute pleasure to host the management of Zydus Wellness once again for the results conference call, this time the Q1 FY 2025 results. The company is represented today by Dr. Sharvil Patel, Chairman, Mr. Tarun Arora, CEO, Mr. Ganesh Nayak, Director, Mr. Umesh Parikh, CFO. Over to the management for the opening remarks and the detailing, post which we'll open the floor for Q&A. Thank you. Over to you, sir. Thanks, Manoj, for the opening remark and opening and sharing the introductions of the people joining. Good evening, everyone, and welcome to the post-results conference for Zydus Wellness Limited for quarter one, financial year 2024-2025. As Manoj has already introduced, we have the management from the management, Dr. Sharvil Patel, Mr. Ganesh Nayak and Umesh Parikh here with me. During the quarter, demand continued the positive momentum with growth across various categories. Rural demand outpaced urban growth, narrowing the consumption gap. The country also witnessed harsh and prolonged summer, which helped boost the consumption of seasonal products like Glucon-D and Nycil. As a result, the company registered exceptional growth, recording its highest ever sales with a consolidated net sales growth of 20% on a year-on-year basis, of which 17.1% is due to volume. The personal care segment registered a whopping double-digit growth of 41.8%, thereby continuing its double-digit growth trajectory over the last few quarters. Growth was driven by strong consumer preference for the brands, further boosted by a favorable summer season. At the same time, the food and nutrition segment also registered a good double-digit growth of 15% for the quarter, riding on the back of brand Glucon-D, while Complan and Sweetener's portfolio continued to hold the fort. Nutralite brand showed a single-digit volume growth; however, value growth trailed volume due to market-driven prices. The company's research and development capabilities continue to be at the forefront, helping the company to launch new products and extensions, namely, Complan's foray into immunity space with a new launch of Complan Immuno-Gro product in select states. Everyuth Pink Clay & Charcoal-infused anti-pollution face wash, scrub and face pack. Nutralite Professional Mayonnaise with Tandoori range. Nutralite Retail Mayonnaise with Carrot and Cucumber Sandwich Spread. The company launched Nycil Soap in International Market, introducing four distinct variants, which include aqua, mint, neem and aloe, lime and sandal. Beyond these five launches, the company plans to launch four more innovations in the coming quarters. Amidst the headwind of inflation and commodity prices, the gross margin further continues to be resilient, showing its upward move to 114 basis points on sequential basis and 314 basis points on a year-on-year basis, driven by strong performance of product portfolio, favorable product mix, calibrated price increase taken earlier and an efficient hedging strategy for key commodities. During the quarter, the company repaid its debt in full, thus de-leveraging its balance sheet and yet retaining its strong cash position as at the quarter end. Let me take you through some other highlights of the consolidated financial performance of quarter one of financial year 2024-2025. Our net sales grew by 20% to INR 8,391 million. We reinvested some part of our gross margins expansion to into brand building, as a result of which advertisement expenses grew by 19.1% year-on-year on a lower base of brand investment last financial year. Other expenses grew by 27.7% year-on-year basis, driven up by the cost of strategic consultant to co-create a long-term growth plans. Excluding this cost, other expenses grew by 6%. EBITDA grew by 33.3% year-on-year to INR 1,553 million. Other income, net of finance cost, has turned positive. Net profit after tax grew by 33.8% to INR 1,477 million. Adjusted PAT grew by 39.6% on a year-on-year basis after eliminating exceptional items and one-time deferred tax effects from the comparable quarter of previous year. With that, let me share some of the highlights of the operations for the year gone by, of the quarter gone by, which will also cover category growth, market share numbers as per the MAT June 2024 report of Nielsen and IQVIA. We maintained a strong focus on marketing initiatives aimed at expanding our categories and enhancing the market share for our brands. On the personal care front, Everyuth brand continues to outpace category growth and has registered a strong growth. The face scrub category has grown by 14.3% at MAT level. Everyuth Scrub has maintained its leadership position with a market share of 46.2% in the facial scrub category, which is an increase of 373 basis points over the same period last year. The peel-off category has grown by 21.1% at MAT level. Everyuth peel-off maintained its position, its number one position, with a market share of 78.2% in peel-off, which is an increase of 200 basis points over the same period last year. Amul brand holds the fifth position with a 6.6% market share in the overall facial cleansing segment level. Nycil brand has witnessed robust growth, favorable summer season, and consistent media visibility. The prickly heat powder category has grown by 20.2% at MAT level. Nycil has maintained its number one position with a market share of 34.9% in the prickly heat powder category. Nycil has recorded a consistent increase in household penetration in line with our strategy of recruiting new consumers. On the Glucon-D front, the brand has achieved strong growth, propelled by sustained marketing efforts and favorable summer conditions. To amplify market penetration in strategic states, the brand implemented additional micro marketing initiatives. On the digital front, innovative campaigns included launching four new digital films targeting specific cohorts. Brand penetration has increased by 160 basis points versus last year, as per the MAT May 2024 report of Kantar panel. The glucose powder category has grown by 21.3% at MAT level. Glucon-D continues to maintain its leadership position in glucose powder category with a market value market share of 59.7% at MAT level. On the Complan front, the nutrition drink category has continued showing signs of revival across key metrics. Brand penetration has grown by 23 basis points versus last year, as per MAT May 2024 report of Kantar panel. The brand is sustained by a TV campaign featuring two popular celebrities, Madhuri and Sneha, highlighting the criticality of protein for growing kids, supported by a comprehensive 360-degree campaign across all media. The category has grown by 4.3% at MAT level. Complan market share stood at 4.3% at MAT level. On the sweeteners front, sugar substitute category has grown by 5.8% at MAT level. The Sugar Free brand maintained its dominant position in the sugar substitute market, with a commanding market share of 95.9%. Sugar Free Green continues to experience strong double-digit growth, driven by increasing volume uptake. We recently upgraded Sugar Free Gold to Sugar Free Gold Plus with a new formulation, sucralose plus chromium. Chromium contributes to the maintenance of normal blood glucose level, while removing aspartame helps clarify any doubt in consumers' mind. A unique formulation of sugar blended with stevia to offer consumers 50% less calories than regular sugar has gained a positive response in the market in the quarter immediately following its launch. On the Nutralite front, the brand showed up single-digit volume growth. However, value growth trailed volume growth due to market-driven prices, which is largely a food service phenomenon. The brand has support, was supported by several marketing initiatives, including awareness-led digital campaigns and summer digital campaign. Baccho Ka Khel with Nutralite, aimed at enhancing engagement for a professional range through a social media. Considering the expected normal monsoon in most parts of the country, we anticipate stable demand going forward. We intend to support this momentum through brand-led marketing initiatives and strengthen our supply chain capabilities, including the recent implementation of hub-and-spoke model for the supplies. The company remains committed to ongoing innovations to align with evolving consumer preferences. Better macroeconomic indicators, combined with company's robust operational foundations, are poised to support favorable growth prospects for our brands in the upcoming periods. Thank you, and we'll now start the Q&A. Over to the coordinator. Thank you very much. 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 headsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rishi Kothari from PI Square Investments. Please go ahead. Hello. Yeah, thank you so much for the opportunity, and congratulations on good set of numbers. However, I would like to know future prospects of the current brand that you are into. So what's the future outlook for us from here on? What type of growth rate we are looking at? And is there any margin expansion that we look at? Because right now, since the margins over the years have gradually decreased for the company, so is this bottoming out of margins, or are we looking at an expansion of margin from here on? Thanks for the question. I think our revenue growth expectations are, like we've said in the past, we continue to focus on a double-digit growth trajectory, and that's what we will, when we, is what we emphasize going forward. From a margin, we do believe that we should be looking at expansion of our EBITDA margins. Like we've also said in our last investor call, we are looking at over next couple of years, going back to our 17%-18% kind of EBITDA margins, through the journey. Largely supported by gross margin improvement, which you've already seen, and some operating leverage with growth. Thank you. Okay. This expansion of OPM margin, by what time period are we looking at? Because right now we are running at 13%-14%. So the 17%-18% will achieve in what? Two to three years time period, or is there any timeline for that? Exactly. I think last couple, next couple of years is what we've talked about. Okay. Okay. My next question is in terms of the CapEx. What CapEx are we planning for FY 2025? Yeah. Generally, the CapEx is the maintenance led CapEx, and what we have under depreciation, except the few balancing equipment that we might have to procure. Sorry, I was not able to get the amount that you said. Any amount? So in the range of INR 30 crore-INR 35 crore. Okay, INR 30 crore-INR 35 crore. This will be purely where it will be deployed? So it's largely a maintenance CapEx and some capacity expansion equipment that we may need. No large CapEx that we in itself [audio distortion]. Okay, and this, are we planning to deploy to source it from the current cash flows that we have? Or is it through, we are planning for debt increase? Yeah. I mean, we plan to have the CapEx for the equipment required only through the current cash flow that we have. We are also planning for the borrowings reduction eventually to go and achieve the debt-free company status? Yeah, of course, unless there is some acquisition opportunity in the future. Okay, great. Yeah. Thank you. Thank you so much for the answers. Thank you. Ladies and gentlemen, just a reminder, anyone who wishes to ask a question may press star and one on the touchtone telephone. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Hi, team. Thanks for the opportunity and, congrats on a good summer, good season, and then good overall numbers. Just, if you can help, to slice and dice the number in terms of summer portfolio and non-summer portfolio, and then, overall volume and value growth to start with. Hi, Tejas. Thanks for this. We don't break it down with summer, non-summer. We, as we've started over last five quarters, we share it with food and nutrition on one side, and personal care, personal care, which you've shared. So that's really what it is. But other things, volume, volume, we've had a 17.1% growth, so out of 20% overall growth, so remaining will be value. No specific price increases right now taken, but it's all price, which has already been taken earlier. Sure. Sir, the reason to why I asked on summer is we all know that there was a huge tailwind for demand in general for, because of the heat wave. So just wanted to know, let's say, hypothetically, if next year we don't get this tailwind, how should we think about that? Is there a genuine demand uptick, or you believe that irrespective of that, or, or so irrespective of the heat wave, we would have done this well or slightly, let's say, in ballpark around this number only? So Tejas, let me explain. I think clearly, this summer is a very important part of our portfolio, and this does contribute to the numbers. And the numbers won't be the same if the season is not as it was. But over any 3-4-year period of time, we do expect a consistent 3-4, sorry, double-digit growth for across the portfolio. Now, if a bad season happens like last year, that can happen, but that doesn't put us down too substantially. But we believe a double-digit growth for the entire portfolio is, on a consistent basis, how we continue to look at from our outlook. Perfect, sir. Very clear. Sir, we also kind of witnessed tailwinds on margin, gross margin front. So was it largely led by commodity deflation or there was a premiumization also which played a role here? So everything helps. You're right, there is a bit of commodity support, but there is also, in recent months, some of the commodity has seen substantial increase, but we are well equipped for that. So we have taken timely price increases and premiumization action across our portfolio, where we've acted on some premiumization. Sure. And sir, you also highlighted in your opening remarks that we reinvested some of these benefits in ANP and other expenses, which also has sort of one-off item in terms of some consultancy charges. But employee cost also jumped substantially, so any one-off there, or this was just a regular uptick which happens every year? Hi, Tejas. Employee cost has gone up largely because of two reasons. One is that, you know, there is an occupancy increase, so it's about 1.5% occupancy rise. And secondly, you know, the reason is a one-off, that we are transitioning from the private PF to government-based trust, government-based PF, and therefore, we have to make good some shortfall there. And therefore, you see as a high hike of 25%, which is not a normal hike. So, Umesh, why should I annualize this number or this is, this quarter run rate is abnormally high to kind of bridge for the deficit that we have? It is an abnormally high number, and we should not graduate to this. Okay. Okay. And last one, sir. So just wanted to know what percentage of our revenue now comes from e-com, quick commerce, and how much, what kind of trajectory of growth or relevance we are seeing in that channel? So, just one second. Typically, the organized trade is 1/5 of our business, which includes modern trade and e-commerce. E-commerce, like we have explained in our presentation also, is e-commerce is overall about 9%-10%, kind of range, 9.5% range. It is growing at a much faster pace than other channels. But of course, last quarter, we've seen a good growth across all channels. Quick commerce is growing portion of the overall e-commerce space, which is how the category is. Fortunately for us, our market shares across e-commerce platforms that we track are also ahead of our general market share, so we are in a good shape to embrace this quick commerce. Sure. Sure. Very clear, sir. So I'll come back in queue if I have any more questions. Thanks, and all the best. Thank you. Ladies and gentlemen, just a reminder, anyone who wishes to ask a question may press star and 1 on their touchtone telephone now. The next question is from the line of Karan Bhuwania from ICICI Securities. Please go ahead. Thank you, sir, for taking my question. Firstly, congratulations on good set of numbers. I have two questions. Firstly, on Sugar Free, the change in formulation. Of course, it's good in the medium term, given that there's a change in formulation, removing aspartame. But do you envisage any short-term impact in terms of consumption because of the change in formulation of Sugar Free Gold? We've done enough consumer tests, and it'll have to finally play out whatever happens. But we expect actually to support consumer recruitment because one of the things, there was a perception issue with aspartame, and that's why we've shifted to sucralose plus chromium, which chromium is known to help maintain blood glucose levels. So we do envisage some improvement in, at least for, to overcome the negative perceptions that may happen. So we don't expect any disruption in any short or medium term on this. Got it. So Sugar Free should ideally revert back to double-digit growth trajectory post this launch. Is that right in your view? Yes. Sweeteners, we are clearly expecting to remain on a double-digit growth trajectory over next week. Got it. Got Got it. Secondly, sir, I see that we have done a few launches over last few quarters. And then you also mentioned opening your mind that four new product launches are expected over the coming quarters. So if you could just highlight what is the share of revenue from new product launches and currently, and how do you see that over the next couple of years? So the share of new products will be much smaller because they are at early stage. Typically we look at share of products over 36 months rather than the same year, because they start very small. One of the things we've started doing in last one or two years is also we launch in limited channels first or limited geographies, pilot it, learn it, and then scale it up, which is what we've done in Complan Immuno-Gro, which we've just launched last end of last quarter. Some of these launches will also go like that. So, I'm not seeing in our, over next three to four quarters, the numbers jumping up, but they, if they go right, we could really build up a much larger scale, and our businesses to go up to 6%-8% of our revenue could come in products, from products launched in 36 months. But that's really what will really help us. So it's important to build them right, rather than look at only short-term share of business on them. Got it, sir. Got it. Thank you. I'll come back in a queue. Thank you. Thank you. The next question is from the line of Mayur Parkeria from Wealth Managers. Please go ahead. Good evening, sir, and thank you for taking my questions. Congratulations on delivering a good set of numbers. After a long time, we are seeing such kind of growth. As you alluded to, that while summer is an important element and there is a seasonality, over the longer period of three to four years, we are in a position for a double-digit growth and hope that continues. With that said, sir, just wanted to understand a few specific thing on the recent change in trend in terms of quick commerce. If we look at our products, we'll call them as mass premium. Will that be right in terms of our Everyuth and other products? With that, do you see quick commerce to be a big tailwind for us, in terms of where we are, you know, in terms of growth and the changing trend which is happening? So quick commerce fits our products very well. They are regular essential use products, so quick commerce works. But I think it's also being relevant to the consumers, as consumers are shifting their purchase behavior across channels, and there is an omni-channel world. A lot of consumers who are buying probably from the neighborhood stores or calling for deliveries, are shifting to e-commerce, who find good traction with this. So our products are fairly well, and we are engaging across quick commerce channels to be relevant and partner better with these channels. So you're not seeing any additional tailwind in that sense of, it is more like just an expansion on the, at the margin in terms of another channel adding up? This tailwind really works, but it's also available to everyone. So finally, it's the consumer consumption habits which will drive and where they buy from. Because we are well-placed with quick commerce, we definitely think we are better placed, and we will gain from it. But eventually it will be a function of your engagement with them and how this works, because finally, consumers' consumption habits will drive the larger change at a category level, we being the leader in most of the categories we operate. Right. Sir, one question on Nycil. You know, at a overall, or from a little longish perspective and at an overall category level, talcum powder is, you know, a slow or diminishing category in terms of consumer preferences as we see the newer generation and, you know, what is happening. So while we are doing all that is required in terms of positioning, repositioning and the brand innovations and freshness, but at a very broad level, in terms of where the young generation is and when we see talcum powder, it is, a ny thoughts on that from a longish perspective, where is it positioned, and how do you see this? So yes, if you look at our overall talc level, which includes sensorial as well as functional talcs, there is obviously some loss in consumers over a long period of time in the past, where a lot of people have shifted out of sensorial talcs to our newer formats like the deodorants, perfumes, and sprays. But functional talcs have seen a more consistent performance because this is being consumed not just for the fragrancing, but for actual product performance against prickly heat, cooling. It's also, talc is one of the best ways to absorb sweat. Any sweat absorption sprays have not worked in the country. So from a consumer perspective, I think there is still enough opportunity to build on talcs, especially the prickly heat and cooling talcs, and at least over the next three to five years, I'm not seeing a big challenge. Having said this, we've also piloted the product with the spray format. The, what is it called? The, mist, spray, which has not got, I would say, a great, you know, acceptance with the consumer. We're still at it. We'll keep experimenting and learning with the consumers. But talc as a format works very well in the, you know, tropical climate of India, where the extreme summer and the perspiration is best absorbed by talcs, and with the prickly heat proposition, it's a great match to consumers' needs. All right, sir. Oh, sir, last question on my side is, you know, on the margin front, you have been saying that we'll move to 17%-18%, you know, over a two to three years period. Last two quarters have been put together shows that we are on track. How do we see the near term? I am not looking for a number, but, you know, what the question is, are there going to be any negative surprises in terms of margins. As we go ahead on the FY 2025, because the summer has helped us, the strong tailwind has helped us, are we positioned to continue to deliver in the, you know, in the next two, three quarters alone? It's from a little near-term perspective. A re we going to see any, do you see any headwind or any risk on that side? Typically, quarter two and quarter three are our smaller quarters. From a revenue point of view, typically only 1/3 of our revenue comes from these quarters. And because of the fixed cost impact, there's a deleverage which happens. So obviously, you will find the bottom line, the EBITDA numbers or operating margins, much lower than quarter four, quarter one. Therefore, our near term, if you look at the same level of margin, for sure it will not play out. But we think at a annualized level, we are on the right path, where we see this trend to be secular. Unless some big, large disruption happens, which is out of control, we do see that this trend will continue in terms of improving our margin levels, and that's why we are planning for this or hoping to deliver the numbers that we are talking about from EBITDA margins in the next two years. Thank you, sir, and wish you all the best. Thank you. The next question is from the line of Devang Shah from D.D Enterprise. Please go ahead. Yeah. Hi, thank you for taking my question. I was just, quarter one is a very pretty good quarter, and we got a EBITDA level margins of around 18%. So, recently only I heard on the con call that quarter two and quarter three, that cannot be achievable, like, they are the sluggish quarters, correct? I think, I won't call them sluggish quarters. I typically, because we, the summer brands have a quarter four, quarter one, the Jan-June, bias, because that's how seasons play out, and therefore, our revenue has that bias. But I won't call them sluggish quarters. They will typically be lower, and that has a deleverage, impact on the overall team. Okay. And, sir, the set was, like, last quarter, like, in the last con call also, we heard that, like, the price also has been, like, price hike was there in some of the products. So, is it like, they got it good, appreciated by the market? We have seen that on the basis of the prices, the demand has came down or something, or the price has been acceptable? What accepted, sorry? Simply put, we are leaders in across categories, and we have the pricing power across our brands. Typically, we won't lead with the pricing, especially in a hyperinflationary scenario, which happened over the last couple of years, which can lead to also demand drop. But now that that extreme high inflation is out of the way, I think we are well equipped to, A, manage with the pricing, and given our brand building and constant leadership, we are able to also get across to the consumer. And that's how we think it'll be over the coming quarters as well. Okay. Just a small question. Like this, like this quarter two and quarter three is every year, this is like that only going on, if I'm not wrong, like, I've seen that from the last three, four years, right? And after taking over the Heinz also. So quarter two and quarter three is not our products, like, our products have basically majorly been accepted in the quarter four and quarter one, if the demand hike is there. Quarter two and quarter three, does company has got any of the thing for out-of-the-box, like some of the products or some of the things to add some product, to add something, in which quarter two and three, like also, like some of the products or anything like after taking over Heinz, like, is there any plan for the company to just catch up the consistency? So there is, the seasonality has a long legacy to it. We're cognizant of quarter two, quarter three opportunity, where we can do a lot more, but they, they are not built overnight. We do have launched several products like body lotion and Everyuth, which has a bias towards the quarter two, quarter three, but they are still very small. And given the scale of Glucon-D and Nycil, it cannot be overcome by just doing that. W e are working across to even out, but this is a reality of the business. I think we are acting to do better in the off-season, as somebody would call it, in a, for against the summer's products, but these take a longer period of time. And as long as we know how to manage it, it's fine. We are managing it. Oh, oh, that's fine. Thank you very much. Thank you very, thank you very much. Thank you. The next question is from the line of Kritika from Sharekhan by BNP Paribas. Please go ahead. Thank you, sir, for giving me the opportunity, and, congratulations on good set of numbers. My first question would be on the demand outlook. So we are discussing that Q2 and Q3 are generally not favorable for the company, but how do you see the demand going ahead in Q3 and Q4 specifically? Are there any specific headwinds that are likely to impact the performance? Or, how is the overall demand scenario in your term? So overall demand scenario, we are only expecting it to get better. Now, those you know, the tailwinds on, summer is out, but that's a separate issue. At an overall demand level, we do expect things to only get better, as we have seen over the last couple of quarters, it's only got better. Good monsoon should help us improve the demand scenario. The product mix may change the overall output of the company, but we are still on, I would say, optimistic of, how it will play out over the next couple of, the next two to three quarters. Okay. Okay. [audio distortion] r evenue growth that. Okay, continue. Go ahead. Okay. So, next, would be the, revenue growth for the current year. So we are eyeing a, double-digit growth for the year. So any specific like in, mid-teens or, you know, high double digits, any, any specific guidance regarding that, if you can provide, please? No, we're not gonna be able to do that. Okay. All right. All right. And my last question would be on the effective tax rate for 2025 and 2026. So what are we expecting likely? So, 2024 and 2025 and 2025, 2026, there won't be any cash outflow as such that we are expecting. Though there could be a deferred liability because we'll be utilizing the accumulated losses, so there could be a deferred liability, but no actual tax outflow on that front, cash payment. Okay, so the effective tax rate would be around the same as last year? Yeah. Okay. Okay. All right. Thank you. The next question is from the line of Malhar Sanghavi from Bodhi Capital. Please go ahead. Yeah. Can you hear me? Yes. Congratulations on the good set. In the presentation, in the first slide, you mentioned that rural demand is now outpacing urban demand. Till when do you see this trend sustaining? What products of our portfolio basically cater to rural demand, per se? [audio distortion] Rural matters to most part of the portfolio. It's obviously differential numbers across brands. So, Glucon-D and Nycil are more than 30% coming from rural, and the regular products like Complan, Sugar Free, and Everyuth have, are in the range of 18%-25% as a part of rural. Nutralite has much more rural component, though. So overall, I think rural matters. And rural plays not just the role of direct consumption, it also plays out at the channel impact also, because wholesale and all parts of other channels also get that much more vibrant when the rural demand is good. So, for us, while we may be a little lower than the typical average industry levels of rural, but it does play a valuable role in building up our business. Right. Okay, and what's the outlook for like, when do you see rural demand outpacing urban demand? If you can provide some insights. I don't have any specific number, but we are quite hopeful, given the fact that monsoons have been good, and inflation is in better control, given what we went through. We do expect that rural incomes will help, will get better and rural demand will continue to build up, because that's really impacted the overall consumption industry. Right. Okay, and lastly, thank you. Yeah, lastly, I may have missed this, but are there, have there been any new product launches in the last quarter? Is there anything launching in the next, in the next coming quarters, which, which is something of materiality? So maybe you missed it. We've launched several new products in the last quarter, which we talked about, Complan Immuno-Gro, Everyuth Pink Clay & Charcoal. A couple of products of Nutralite and Nycil soap in the international market. We have four more products like I explained in my opening remarks; we have four more products planned over the next few quarters. So we are quite, you know, positive on the new product launches. While some of them are specific to channels or markets, but we are building on those as we go forward. Okay, great. Thank you. Thank you so much. Thank you. Ladies and gentlemen, just a reminder, anyone who wishes to ask a question may press star and one on their touchtone telephone now. The next question is from the line of Tejas Shah from Avendus Spark Institutional Equities. Please go ahead. Yeah, hi, just a couple of follow-ups from my side. So this quarter was slightly tricky to understand the actual underlying consumer sentiment because it got muffled with the heatwave tailwind also. So but if you remove those noise from the numbers, how do you see the consumer sentiment? Is it, are we better placed than we were, let's say, two quarters back? Yeah, that's what I think we're better placed than earlier quarters from a consumer sentiment. And some of our products, we thought consumption is looking more positive, but we'll have to see how it plays out. Okay. And just second, you spoke about some consultant engagement that we are doing. If you can elaborate, what problem statement are we working on? So we've got a strategy consultant who can work, co-create with us to build strength. And And because we believe we are on the right path, we're focusing on the brand building, category building. But given the task we have, and we've discussed this earlier also, we are market leaders in five of our brands, which means that we are not just fighting for market share, but category building. And therefore, to add bandwidth and focus even more strongly on international market, if I add to that, we believe we're adding bandwidth and you know, more strength to our actions. And that's why we've got them for to work and co-create with us this time over the next few quarters. Just, all the costs pertaining to this has been booked in this quarter, or there will be some follow-up costs also? No, no, this is a continued engagement. It's not just one-time engagement. So it's not just put a strategy, but, work with us on strategy, co-create and, co-own with us with linkages to, performance outcomes also. Sure. So, should we [crosstalk]. Continued, and therefore, if we do well, it helps them also. So it works for everyone. It's a win-win that we try to work with them. And then, this is performance based, or there is a large fixed component also? Performance based, like I said. Okay. Okay. And last one for Umesh. Umesh, any guidance on tax rate and if you can call out the one-off that you spoke about in employee cost, how should we kind of build in coming quarters and further year? Sure thing. So, on the tax rate, I have just, you know, spread out that we will not be having any tax cash outflow in 2024-2025 and 2025-2026. After that, we'll be, in a new tax regime, so that we'll be paying 25+ as per the Act. As far as the employee cost is concerned, I think, I, you know, alluded earlier also, that's a one-off on account of the PF transition to government PF that we are doing. And we also, the occupancy that has been factored in now. Umesh, how should we build rest of, i f you can call out the number that was one-off in this quarter, that will help to normalize the number. Tejas, I don't have it handy, but I'll, maybe, you know, we can circle back on this. Perfect. Thanks. Thanks, and all the best. Thank you. Thank you. The next question is on the line of Lokesh from BOB Capital Markets. Please go ahead. Hi, thank you for taking my question. I just had a couple of questions. First one is on the, on your, on your hedging policy, like, how much, like, what's your typical hedging period? And, how much are you covered for. We are not able to hear clearly. I think there is [audio distortion] we're not able to make out clearly. Lokesh, we are not able to hear you clearly. Hi, is it, is it any better now? Yeah, yeah. Yes, certainly. All right. So just a couple of questions. First one is on your margins. What's your typical hedging period, and how much are you covered for FY 2025 for your commodities? And what percentage of your costs do you actually hedge? Just to understand, like, how much of the inflationary impact is going to have on your margins in the current financial year. That's the first one. The second one is obviously you, like the FMCG industry is relying on the rural recovery for an acceleration in the sales growth as we progress through FY 2025. I wanted to understand, your margin profile between rural and urban, whether that's going to have, like once your sales start becoming more skewed towards rural through the year, then is that gonna have an impact on your margins? If you could clarify it by growth level as well as EBITDA level, that'd be helpful. Let me just first address your first question, which was on the hedging and, you know, buying of commodities. First of all, we don't do long-term hedge. We take low to medium risk only on this. Where we have a straight line of sight on certain products which also allow for a certain taking cost, we do that. Otherwise, we don't take risk assets because our business is actually on brands. We just try to manage and balance our costs. So our hedging is only to be more, should I say. Medium term. More short- to medium-term and defensive, rather than being very aggressive in hedging. So the overall direction of the commodities has been helpful, and with a little bit of smarter buying, better reading, understanding those better and wherever possible to hedge, it's helped us, and we continue to remain focused on that. But we don't lose sight of the fact that our bigger value sits in building the brands, and that's where we are doing, and that's what is helping us improve our gross margins evenly. If that answers your question or if there's something more to this margin, commodity. No, that's, that's actually helpful. So you're saying it's actually the mix that, that you're trying to improve that's impacting your gross margins. That's what you're trying to imply? Correct. Correct, sir. Yes. Yes. So, just clarifying, I'm sorry, but so you said you don't hedge for long term, so is three months like a good period to think of for? Yes. Or it's too much? That's right. Okay. That's right, two to three months. Yeah. Got it. And then. [Crosstalk] question on the rural. Should I? Yeah. So, rural, like I explained in the earlier question also, it ranges between 20%-30% across most of the brands from a consumption point of view. But, from a distribution, general trade distribution point of view, you know, the rural and urban splits are almost 50/50. Out of 2.9 million or 3 million outlets that we are available, our products are available in, it's 50/50 between urban and rural. Obviously rural plays an important role, but we are also seeing, and we are hopeful that it will continue to build, but we are also seeing a good traction within the urban, which is beyond the general trade, in e-commerce and non-trade. We are not like only dependent upon rural, but we hope that we build up right and help the overall mix. From a margin point of view, I think we are balanced across channels. We ensure, because there are risks of channel conflicts, consumer conflicts, so we try to avoid any margin differences across geographies or channels. Got it. Do you have any products that are, like, specifically meant for rural areas, like smaller packs or anything like that? So they, I guess the price realization might be a bit better over there than the gross margin as well. Sure. Thank you. The next question is on the line of Akshat Hariya from Multi-Act PMS. Please go ahead. Yeah, hi. Thank you for the opportunity, and congratulations on good numbers. So, my question was more on the consultant that we've appointed. So if I look at this year, this quarter's number, it works out to be around INR 20 crore-INR 21 crore, which is around 2.5% of sales. And, you know, as you clarified with Tejas, this is more on a proportionate basis, and it's more recurring in nature. So just wanted to understand overall, you know, whether there is any fixed element also involved to the consultant cost, and what could be this cost on an annual basis? Hello? Ladies and gentlemen, the line for the chairperson seems to have disconnected. Please hold while we reconnect. Ladies and gentlemen, the line for the chairperson has connected. We will begin the question and answer. Yes, Akshat, please go ahead. Yeah. So I'll just repeat my question. So my question is around the consultant that we've appointed. So, for this quarter, if we'll work out some rough numbers, the amount comes to around INR 20 crore, which is around 2.5% of current quarter sales. So just wanted to understand a few things, in terms of the nature of this agreement, as you confirmed with Tejas, that this is more recurring in nature. So wanted to understand if there is also some fixed element which is involved, and, you know, for the full quarter or full year, what could be the cost overall involved on the consultant side? And what also, what is the total periodicity for which we've appointed the consultant? Can you hear us? Yes, sir. Now we are connected. Yeah. So I'll close Lokesh's question, which was, you know, cut in between, which was, largely regarding. [audio distortion] Lokesh is on the line, so you can ask the question. We can address it. Or you want to take Akshat's question first? Hello, Akshat. Please go ahead for your question. The management has disconnected, now it's connected again. Yeah. So, on the consultant cost, for this quarter, it comes to around INR 20 crore, which is around 2.5% of the quarter sales. So, wanted to understand on a full year basis, what this cost could be, and also whether there is any fixed element involved, in this agreement with our consultant, and the overall periodicity for which we've appointed this, particular consultant. There is a longer period engagement with the consultant. We can't, we're not sharing the exact numbers which, at this stage, and there is clearly a performance linked engagement, where there is a smaller portion for the fixed element, and there is a larger portion for the performance-linked element on consultant cost. Right. So this quarter, because we've called out the cost specifically, is it that it has been, you know, slightly on the higher side for this particular quarter, and going ahead, it would be, you know, more streamlined with our, you know, overall other expenses, or, this run rate, we should expect it to continue for. No, no, it's not just run rate, it is also linked to the business performance, and that's why we've accrued it accordingly. Understood. Understood. So, we should link it more to sales? Sales and bottom line, both. So there is a multiple metrics that we are using on this. Okay, understood. And, as you already explained, this is for all the brands. So, any particular brand-focused brand for which this consultant is going to, you know, focus more of their effort, or it is across brands for domestic as well as international, it is equal focus? So, this is the fact that, as I've explained earlier, we are looking at a growth across. I mean, we are the leaders at least in five of the categories. Our task is not just market share or growth, but also growing the categories. We are looking at partnerships or co-creation, where we can help build the categories ahead, and provide additional bandwidth to the team, which is already focused and doing a reasonably good job. But we could ensure that our sustainable models are built around these growths, which could include both domestic and international, and wherever the opportunities are. So it is pan business approach. Right. Right. Understood. And as you explained, it is not just based on a single metric, but it involves multiple metrics, which involves profitability as well. It's more so important because the profitability is really higher in the first and fourth quarter, while it is more on the tepid side in the second and third quarter. Correct. Yeah. Okay, okay, understood. Thank you. Thank you. The next question is from the line of Lokesh from BOB Capital Markets. Please go ahead. Yeah, hi. Thanks for letting me come back on the queue. So yeah, I was just saying that, do you have a different kind of product profile for your rural areas? Like, I imagine if those are like small packs, and they're more popular in the rural areas, then they might be slightly higher margin compared to the urban areas. So, what we're doing is, and I think it's a, you know, what consumers are today buying from multiple channels and bases of where they're located and how they are buying, and therefore, the regular channel is now getting fragmented. And there is rural consumer, urban consumers. There are also multiple subchannels or retail environments, which could be chemists, cosmetics, grocers. There are, of course, e-commerce and Modern Trade. So there are multiple subchannels and large channels within e-commerce, quick commerce, and things, and marketplaces. So, we are constantly revisiting and improving our pack price architecture to meet different consumer expectation or need states across channels. Typically, yes, it's a reality that rural consumers, as is expected, do buy a lot of lower unit price packs, but that's not the only way they're buying. So we have specific products which are targeted at rural consumers. We have targeted specific packs which are targeted at e-commerce or Modern Trade consumers. And within that, we also prioritize sometimes based on the opportunity between food or chemist, where we focus or drive certain packs because the consumption is more driven from these subchannels. Largely, you know, there are opportunities of increasing margin at each and every level, but it's not that there is one size fits all. We balance overall margins and any of the specific packs which are going by channel, if there is opportunity, we will obviously look at it. But I can't have a very simple answer for this. And we are doing whatever it takes to meet the consumer needs, given the way they buy across channels and subchannels and geographies. Understood. All right, thanks. Thanks for clarifying. Appreciate it. Thank you. As this was the last question, I will now like to hand the conference over to the management for the closing remarks. Thank you, everyone, for the time and attention. We've had a good quarter. We are hoping to build on this momentum for the remaining three quarters. We have set of launches and executions planned. Thank you very much, and we'll see you in the next quarter results. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.