Ladies and gentlemen, good day, and welcome to the Q3 FY23 earnings conference call of United Breweries Limited, hosted by Investec 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 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. Harit Kapoor from Investec Capital Services. Thank you, and over to you, sir. Yeah. Thank you, Michelle. On behalf of Investec Capital Services, we'd like to welcome the management of United Breweries and thank them for the opportunity to host this call for the Q3 FY23 results. We'd also like to, you know, thank all participants, you know, who are joining the call. From the management of United Breweries, we have the senior management team, Mr. Radovan Sikorsky, Director and CFO, and Mr. PA Poonacha from Finance and Investor Relations. I'll now hand the call to Mr. Sikorsky for his opening remarks, post which we can take a Q&A. Over to you, Radovan. Thank you. Good afternoon everyone on the call. Thank you for joining. Today we'll discuss the results of Q3. I'm here together with Mr. Poonacha, and after the opening comments as was mentioned, we're happy to take questions in terms of our financials. If you look at Q3, volume growth, as you saw, was up 4% in the quarter versus prior year, and it was, you know, primarily driven by Telangana, Rajasthan and Karnataka. Nice growth in the premium segment, you know, growing 13%, you know, versus the total portfolio of 4%. That's, that's nice to see that premium trend that we've been talking about continues. Difficult on the EBIT for the quarter, down 69%, you know, due to the changes in. you know, in the state mix, the impacts of the state mix. The, really, the inflationary pressure now really coming through as we thought it would come through, you know, in these quarters, and also some route to market impact as well. This was, you know, partially offset by the volume and of course the price increases coming through as well nicely. The inflationary pressure on the cost of sales, you know, like I mentioned, is impacting the gross profit margins and contributing to a decline, you know, on our GP to around 41.8%, 42% broadly. In terms of the region, no performance. If you look at the regional volume performance versus prior year, you can see there, you know, the split between north, west, east, south. The north in the quarter, you know, growing around 13%, west around 2%, the east 3%, and the south flat. Despite the growth in the volumes in Telangana, Karnataka and, you know, and Kerala as well in the south, we were impacted by declines in Tamil Nadu. You know, that's a little bit on the regional level. You know, we can still chat a bit more about it, you know, in the questions. In terms of the net sales on the next slide, sorry. Sales were up around 2% in the quarter. We did have some additional discounts booked in the last quarter, which were flowing through from previous quarters, which impacted us, our revenue growth by about 1%. Underlying, we're looking at around 3%. You know, within our, within our revenues, we also have an impact of, you know, we show the net income from our contract brewers in the revenues as net income. Of course, the margins on the contract brewers were also down due to the inflationary pressure on COGS as well. That also had an impact on the revenue growth. In terms of the pricing continues to be, you know, growing at around 5%-6%, what we're getting through in pricing. We continue to, you know, seek further opportunities on pricing also going into 2023. The state mix had an impact on us, right? Strong growth in certain of the key regions where pricing structures are different to our average, and that has had an impact on the mix in terms of the state mix. On the next slide where we show the year to date, so April to December results. You can see their great growth in volume. We're up 43% in terms of volumes. Pricing around 6%. We have the impact, you know, of the state mix. Overall, you know, we're looking at a strong revenue growth, net sales growth of around 39% on the year to date. Nice, really nice performance in that respect. Overall, our margins, you know, operating margins year to date are broadly flat. Not much growth coming through there, but really impacted by inflation and more so as you could see in our Q3 results. You know, volumes of course, the leveraging of the volumes, the growth in the volumes is helping us, even though the picks got up with the business reopening, operating profit margins are broadly flat. That is, that I think would cover my summary. I think on the outlook, we can also close after the questions. I can just give a little bit of an update on, you know, on the outlook. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. 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. We have the first question from the line of Alok Shah from Ambit Capital. Please go ahead. Hello. Thank you very much for this opportunity. The first question is, what was the operating model change in Tamil Nadu that you highlighted once again? Can you quantify the volume impact owing to the same? That's my first question. In Tamil Nadu, we have basically approached the market. We mentioned also in the results, you know, in the quarter one, quarter two, I think it was, that we changed the operating model there. Basically, we go direct, we are using now our own sales force in Tamil Nadu than operating, you know, through a third party. That was the main change. The volume we have seen coming through in Tamil Nadu, you know, in quarter three we had quite a significant impact in volumes. Of course, you know, we are looking at how we can restore the volumes in Tamil Nadu and what opportunities we have to restore that. We were working through that, you know, going forward. We need... You know, we look at different operating models that we have and, you know, we consider whether we can work with the model that we've chosen in Tamil Nadu. We will probably have to readjust certain things in sales, and we'll see. We will look at that as we go forward. Got it. Just to understand this little better. In Tamil Nadu, if the wholesale and the retail is controlled by TASMAC, how would, you know, private company go direct? If you can explain us. Does your salesperson goes directly to the retail counter and sources order and passes through TASMAC? Is that what you are doing? If you can explain that. Yeah. Well, we sell the through TASMAC, but previously we didn't have the sales force actually under, employed under us. Now we actually, the sales are actually part of our team and, you know, visiting the retail outlets and that was the change. Previously, we did it through an agent. Okay. Now employees are on your payroll. Okay. Okay. Got it. When you say you plan to restore volumes and no plan of restructuring, what does that mean? I mean, can you explain then this also? Look, we are working through it at the moment, you know. we're not planning on any restructuring at this point in time in terms of, you know, at the footprint there. we are working through it with management on how we can restore the volumes. You know, I think for now, I don't want to say more than that. I think it's an internal discussion and, you know, as we progress then we can give more information on that. Okay. My second question is with respect to this gross margin compression, and specifically the sequential gross margin compression of 500 basis points. Correct me if I'm wrong, but I think at the start of the year, you know, the strategy was not to procure barley for the full year. Would it have happened that, you know, this quarter on the spot basis, you would have procured barley, and that was the reason why the sequence gross margin compression was 500 basis points? you know, as you know, the barley crop comes in around April. Mm. in India. That's when we are procuring the barley, you know, for the, for the following season. That's what we're doing this year as well. There was a bit of shortage of barley as well for us actually going into 2022. We also had to import actually malt, right? Mm. Which was quite a significant cost for us as well. Barley prices have gone up significantly. I mean, we are looking at price increases of, you know, also barley converted into malt because conversion costs from barley to malt have also gone up because of energy prices. You know, we're looking at increases of around 45% and more in terms of that. That has been a significant impact for us, you know. The fact is that beginning of the year, we were still, you know, producing under the old crop, right? The impact wasn't as big in the beginning. Now it's fully on the crop of, you know, of April 2022, which was much higher, and then also the malt that was imported. Therefore, that had quite a, quite a big impact for, you know, going forward. I think it's gonna continue for now, you know, also going into quarter four, for sure. The good news about it all is, we can see is that the crop that's coming in now in April, which we will then start utilizing in sort of July this year, is looking very good in terms of quality and quantity at this point in time, right? Of course, it can still change, you know, once the harvest begins, et cetera, but it's looking very good. Therefore, we see that if that will be the case, then that will really ease the pressure on costs in a big way going into quarter two, quarter three, next year. Got it. Just a clarification. This 45% you said is the YTD barley price increase from April till date? Yes. Actually, it's over 50% if you compare quarter-over-quarter. Year to date, it's around 40% or so. In the quarter itself, it's aggravated because now we are really purely on, you know, on that crop and also the imports. Got it. Got it. Just a final, bit, more of a clarification. If there's an expectation that the volumes will come back, and specifically I'm going back to Tamil Nadu, was the impairment, necessary according to the management's assessment? Because if volumes are likely to come back, then it's a short-term impact, right? I said the management is trying to restore the volumes. You know, I cannot say if they are likely to come back or not. We will do what we can as a management team to get the volumes back. You know, I mean. Okay. Tamil Nadu is a state where we can see category growth. There is opportunity for the beer segment, and we will work what we can in that. you know, that's the way we look at it. we took an impairment on it based on the current you know, our positions at the end of December in terms of, you know, there was a decline in cash flows and EBITDA, which triggered an impairment review. therefore, we did an impairment review on the assets. Got it. Got it. I have a couple of more questions. I'll join back in the queue. Sure. lastly, just a request and, you know, a suggestion on behalf of clients also, if, you know, maybe Mr. Rishi too can join the call, you know, like many of the CEOs of other companies joined. This will help investors and us get a, you know, strategic perspective of the business as well. That was just a request. 100%. Thank you. For sure. What the plan would be for our sort of full year results, I've asked that the CEO will join us as well. We, you know, that we can have a discussion with the CEO and the CFO for the full year. Great. Thank you very much. Thank you. Thank you. The next question is from the line of Pratik Rangnekar from CS. Please go ahead. Yeah. Hi, thanks for the opportunity. Just to understand the Tamil Nadu issue a little bit more, just wanted to understand the change, the sales channel from going from indirect to direct. Is there anything that was necessitating this change as such? What is the benefit that we see in doing this change? You know, as we mentioned, you know, Heineken acquired the majority, you know, in 2021. You know, we reviewed the business models, where we can improve the business, where we can drive efficiencies. We look at commercial terms, et cetera. You know, it was decided that we would take this approach in this state. You know, that was the decision that was done, where we now use our own sales force and not through an agent. We have seen now declines in volumes, which, you know, which we need to address. That's our position at the moment. Got it then. Is it that we would then maybe suppose the decline does not, is not arrested, and in that case, would we look at reversing that decision in some time? Is it something that we will continue with? Well, like I said, we will try and restore those volumes. Whether we will manage that is another question, but it is our role as management and our sales team to try and do that. We will look at different options of how we can restore those volumes. Got it. Got it. Got it. Thank you so much. just one more question from my end was that now from the last couple of quarters, we've seen premium growing much faster than the portfolio. at the same time, in terms of advertising or marketing spend, we remain at, you know, at the 5% of sales kind of level, at least at an overall annual basis. is it that once the premium starts going up, there will be some sort of a uptick in the advertising spend as well here? Well, our plans for next year as well is to try and increase, you know, ATL, BTL spend in the market. You know, obviously there is the legislation around advertising can be quite restrictive in some areas. You know. Ladies and gentlemen, the line for the management has been disconnected. Kindly stay connected while we try to reconnect them. Ladies and gentlemen, thank you for your patience. The management line has been connected. Over to you, sir. Yes. Sorry, it looks like we were interrupted. I was talking about marketing spend. I think I don't know where I was cut off, but I said, you know, going forward, we wanna increase store ATL, BTL. As you know, that there are restrictions around how much advertising we can do and where and how. We will continue with that in terms of, you know, how much we put behind premium and also our mainstream. We monitor our return on investment, you know, that we are doing the right things. Thank you so much, sir. That's all from my side. Thank you. The next question is from the line of Umang Mehta from Kotak Securities. Please go ahead. Sir, thank you for the opportunity. I just had two questions. One was, again, on the change in distribution in AP and Tamil Nadu. We believe the volume contribution from these two states used to be 4% before the change. Would it be possible to share the contribution during the quarter? The second question was a bit more color on the negative state mix during the quarter. Thanks. No. The volumes were even a bit higher in terms of the state of Tamil Nadu. We should remember also with Andhra Pradesh, the volume decline has taken place earlier on, sort of in the back end of 2019, where we had a big impact, right? There we had a quite a big volume impact on Andhra Pradesh. Just to be clear on that one. That's why we also mentioned in the notes that inter alia, a combination of route to market, but also changes in policy. That was the case. In terms of this mix, state mix, I mean, we have very strong growth, I have to say, in some of these states, right? Like Telangana and Rajasthan, which is great to see, because, you know, there is a lot of opportunity there. Whereas in states where we have, you know, higher contribution, some of the states in the south, like the likes of Karnataka or Maharashtra, those growth haven't been to the same extent as those ones. That's just causing the mix impact, you know? That's the reasoning behind it. For us, it's important that in these states, You know, we have strong positions and the growth is there, that we also start extracting more value out of those states in terms of price increases. You know, we're already seeing some successes this year of getting more price in areas like Rajasthan, so that is nice to see. Understood, sir. again on the-. If I would add to it, if we compare Karnataka, for example, in the quarter, you know, we were up around 12% and versus 19 is 7%. It's nice to see that there is growth in those states as well, but the other states are growing that much quicker. Got it. Just on the first question, possible to share the mix of Tamil Nadu in this quarter in volumes? Yeah. I mean, Tamil Nadu was down, you know, considerably, in terms of the mix. You know, if we had an underlying volume performance of around 4% in the total portfolio, you know, we would be, you know, high single digits, excluding Tamil Nadu. Got it. Understood. That's helpful. Thank you, sir. Thank you. A reminder to all the participants, anyone who wishes to ask a question, they press star and one now. The next question is from the line of Krishnan Sambamoorthy from Motilal Oswal Institutional Equities. Please go ahead. Hi. For many discretionary companies during the quarter, it was a case of two halves. Did you see something similar that October or maybe early November was good and the second half of the quarter was weak from a demand perspective? Not really, no. No, actually it was. No. I can't really say that, no. I didn't see that. Okay. If you can comment on the market demand for the quarter. I'm not talking about your revenues. How been the demand for the quarter so far? You meaning total demand? I'm not sure what you mean. You mean, I mean. Yeah, I mean various discretionary categories are seeing slowdown in terms of consumption because the inflation is affecting the consumer wallets. Are you seeing something similar in this particular quarter? I don't think so. You know, even compared to 2019, we can see the category is growing. We don't see really a slowdown at this point in time. We are not changing, you know, our forecast of the category growing, you know, high single digits going forward at this stage in time. Got it. Couple of questions on raw materials. That one, did I hear you correctly stating that, the benefits of lower barley cost will be felt from 2Q onwards and not in 1Q, which is the, very crucial quarter, summer season quarter for UB? You know, let me just clarify that a little bit so we're not confused, because sometimes I mix calendar year with, you know, this financial year. Just to be clear. Like I said to you, the barley crop, the new barley crop we will start using in around June, July. Okay? That means the impact will be sort of more in, you know, Q2, the impact will be coming through that we'll start having benefits. Q4 will be a difficult Q4 for this still financial year. We will continue to see pressure on our margins. Q1, also Q2, we'll start seeing, you know, it coming through. You know, what I do see, however, is that the pricing that we have a lag in should start helping those margins as well, definitely, right? As we put the pricing through as well and where we can. It's gonna be a difficult quarter four and quarter one, going forward. That's clear. Just one final question on glass bottle cost. You may not have been affected for this particular quarter, which is seasonally weaker because of higher proportion of market bottles. Are you seeing significant inflation on that front as well, which could impact in Q4 and Q1? Yes. I mean, on bottles we're still seeing pressure on pricing, definitely. There is really a, you know, a sort of demand supply, happening there. That the supply is a bit restricted and there is quite a bit of demand, particularly from us as well. Those economics are playing out there. We see still some pressure going forward on glass prices. I think what we are working on quite strongly, and we have quite good plans in place for that, is to make sure that all bottles coming back, we can improve on that ratio. We believe there's quite a bit still to be done on that one. That is an important efficiency for us, you know, in terms of glass going forward. We, you know, we are really working as a team, and we set up a good project around that to get the old bottles coming back from the market, into the season. Okay. Just to clarify, what was the extent of sequential as well as YOY increase in glass bottle cost, new bottle cost? New bottles? Yeah. You know, sort of, High level, it was, you know, double-digit percentages, in a range of around 10%, anything between 8% and 15%. That's very useful. Thanks, Edwin. Thank you very much. Participants, to ask a question you may press star and one now. We have the next question from the line of Tejas Shah from Spark Capital. Please go ahead. mentioned in your press release that Delhi slowdown you attributed to frequent market change policy. Is this slowdown observed for the whole industry, or would we have lost market share? And just curious to know, in such scenarios, how does a consumer behave? They stop drinking beer or they source it from other state or they move on to some other liquor formats which are available more easily versus lesser beer? If you can throw some light on these two aspects. You was asking particularly about Delhi, I understood. Yes? Yes. Yes. Delhi. Yes. Delhi, our volumes have come down. We have lost some market share there. Yes. We have lost share. In terms of consumers, well, I think consumption is probably lower. Also consumption is going also to some of the local players. Sure. Basically in such disruptions, the market share actually goes back to local players versus the organized large players. Is that a fair understanding? In Delhi, I would see that happening, yes. Sure. On barley prices, earlier we have actually in the past we have entered into very long-term contracts to protect our margins. Considering the experience that we have had recently on barley, will we explore that option, as we move into buying season this period? Long-term contracts, we, you know, we do annual contracts with the barley producers on the next crop. You know, and the, and the barley is really much based on how good the crop will be at the end of the day. That, and that's the approach we are taking for barley going forward as well at this point in time. What we are doing, however, quite a bit now is that we are working with barley farmers, how we can increase acreage and how we can improve, you know, barley crops. At Heineken, you know, we draw a lot on Heineken's experience in that respect because, you know, they have exposure across the globe, with barley. We are, you know, trying to leverage on those experiences and work with local farmers on how we can improve that. I think that is very positive going forward, seeing as barley is such an important ingredient for us. You know, I'm very positive about that going forward. Sure. In past you have mentioned that imported barley is also an option. We have seen that there is a better malt yield that we have seen in imported barley. Any thoughts around that, if we are going on that route as well? No, I think it's again dependent on the crop. The 2022 crop was not of such good quality. The barley was a little bit moist. Okay? That's. The conversion ratios then are not as good as they should be into malt. Whereas what we're seeing for the next crop, this crop coming through now in 23, seems to be a very good quality crop. That should be very good for us as well in terms of, like I said, in terms of quality and quantity. We imported, you know, at the back end of 2022 as well, there were some shortages and also some quality issues, so we imported malt as well, yeah. Which, you know, which comes with quite a cost. That also of course impacted our margins like I mentioned earlier. For sure, our drive is to source locally. We wanna use Indian raw materials as much as we can, and we wanna try and improve going forward the barley crops here locally because that is the ideal situation. Sure. Last one. Have we taken any price hike in the recent months? In terms of pricing, you know, there is some that we've taken. We've taken some pricing across West Bengal, also in Kerala, we took a bit in Goa as well. Continuously we are looking at opportunities and going into 23 as well. We will take pricing. There is a pricing, like I said, lag with this inflation, you know, the big benefit we see, you know, if we're talking Q3 2023 and going forward, if we have, you know, the pressure of inflation coming down with a mix of our pricing coming through and with the cost of sales coming down, we can see that that will be a really nice reflection on our margins going forward. Sure. if you can share some number, what was the weighted average hike that we would have taken? What was the time period? Was it in the second of the quarter or was it during the quarter early period of the quarter? Sorry, I didn't understand that. It was very unclear. Mr. Shah. Sure. like to interrupt. Yeah. Is this better? Is this better? Sir, can you please use your handset to ask a question? It would be more clear. Hello. Thank you, sir. Yeah, I just wanted to know, what I asked was that if you can share the weighted average price hike that we would have taken in the last quarter. Was it at the far end of the quarter or at the beginning of the quarter we were carrying this? The pricing? Yes, sir. The price increases. You know, it's a range of like, you know, between 2% and 6% up to 8%. It was, you know, it's averaging out around 5% I think in that quarter. This of course carryovers coming through from previous quarters and yeah, it's actually still the same sort of average. Got it. That's all from my side. Thanks and all the best. Thank you. Before the next question, a reminder to all the participants. You may press star and one to ask a question at this time. The next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Yeah. Hi. Thanks for the opportunity. Apologies, I joined this call a little late. I'm not sure this was touched upon. Let me, you know, discuss with you the Tamil Nadu and Andhra, you know, issue. I wanted to understand, you know, at this point, what is your understanding of how much time it could take for, you know, business to get back to more normalized levels? You know, what is your best guess here? The second part is, you know, how have market share trends for your brands been in these states? If you could share some color here. Okay. We spoke quite a bit about Tamil Nadu probably before you came. In terms of best guess, you know, I cannot really give a guess on that. It's difficult. Like I said, we will be looking at restoring those, hopefully. We can pick, you know, we can have some growth coming in as there is more demand coming through in the season, in terms of the capacity availability in the state. It's really difficult for me to say that. You know, it's. We need the time to work through it. You know, we should remember that, you know, India is a huge country, right? With a lot of opportunities across a number of states. You know, we're not dependent on just one state or two states in terms of our business. We have excellent growth in the other states. We have opportunities to take pricing in other states as well. Of course, you know, we like to be present and strong in all the states. The beauty about our business is, you know, that we across the whole of India. If, you know, like I said, we will, we will take the necessary actions to try and restore the volumes, and then we'll see. We'll take it from there. Sure. Coming back to the other bit, which is, you know, gross margin profile. I heard that, you know, by June, July, you would expect the new barley crop to come through. Meanwhile, there could be some benefits of price increases. Is it fair to assume that this quarter saw the bottoming of gross margin? I was just wondering, you know, if we look out, you know, two, three years out, how confident are you that this business, you know, could reverse back to, you know, mid-teens kind of operating margin after, you know, we navigate this immediate raw material volatility and the whole Tamil Nadu one issue? I mean, in terms of the margins, the margin will continue to be in this sort of range and under pressure, like I've mentioned before, going into quarter four and into quarter one of 2023, right? That will continue and we see, if all things go well, in quarter two, improvement coming through. Combination of the pricing and then inflation, you know, the impact of the cost increase. I mean, it's a, it's a volatile world we are living in at the moment, so any type of forecast do not necessarily have to reflect actuals, right? Because things change. Based on what we know, and what I'm aware of at this moment, you know, the barley is looking as a positive indicator for us, which is quite a big cost component part for us, in terms of our production. That is good news. Longer term, again, like I said, the fundamentals of our business are strong, okay? We see also the category continuing to grow, like I've said before, you know, in the sort of high single digits. We see premiumization continuing. Those are all positives for the business. Again, like I said, you know, we're living in such volatile times, things could change. The fundamentals are there. Sure. Are there any other cost levers as a company that you feel could be something that you could look to, you know, mitigate these, you know, cost pressures on COGS side? Or? I mean, yes, we do look at that. Of course, you know, at our, at our cost base. I think I mentioned it at the last call in terms of production efficiencies we're doing now quite a bit, and hopefully some of these things will be kicking in. In terms of being more, you know, efficient in our production, we are looking at also our, you know, how efficient we are with our recipes, but without touching the quality of the brand. You must remember. We are very much focused on quality, right? In terms of quality, we, you know, we source very good barley, and those barley prices have gone up significantly, you know, in the 2022 crop. Actually that crop was not of the high quality that we would have expected. That had also an impact. 2023 crop is really looking good at this point in time. I have to mention at this point in time, in terms of quality and quantity, we'll know that once the harvest is done and once we do the necessary tests on that barley and it goes for conversion into malt. You know? What I know now or what we know now as a business, you know, we feel quite positive about it. Let's see what the reality brings on that. Sure. And Sure. And the last bit was on, you know, any color or any thoughts on capacity addition plans or CapEx plans for FY24? Well, I think I mentioned that, you know, for 2023 we're looking at around, you know, anywhere between INR 300 crores-INR 400 crores of investment of CapEx into the business. For sure we are continuing to invest, improve our lines. We are looking to, you know, expand some of the capacities. We are also working with contract brewers that to offer, you know, us capacity where we are short. Because we did run into some, you know, constraints, you know, during summer last year where there was more demand that we could actually supply. I think, yes, we are definitely looking into that. This is for, calendar year 2023 or FY 2024, right? Yes, for financial year in 2024. Yes. Perfect. Thank you so much, Radovan. Sure. Thank you. The next question is from the line of Vishal Punmiya from YES Securities. Please go ahead. Yeah, thank you. Just wanted to understand the demand environment for the Q3 FY23, and maybe also if you can help us with the month of January. If you can just highlight the growth trends between on-trade and off-trade for Q3 and for January. What was the mix of on-trade and off-trade for the quarter and for the base quarter, that would be it. I mean, I'm not gonna now start speaking about exactly what January was. I think that I think we'll leave for when we have the investor call in for quarter four. Generally, I can just say that the volumes came in within expectation and on our forecast. That's good news. Growth versus the previous year, growth versus 2022. That is, you know, that is on January. What was the other question in terms of... Basically wanted to understand the demand or the volume trends between on-premise and off-trade. I... There was no real difference between the two. We're not seeing that there's a decline in the on-trade volumes. You know, consumers keep going out despite that there's a lot of inflationary pressure on consumers. You know, the mix between on and off is still the same for us. I think it's around 80, 85, 80 to 85 in off-trade and 15 in on, or actually even less, around 10% in on. That would be 1,585 in the base quarter, or would it be similar? Similar. It's really sort of similar. Yeah. It hasn't changed much over the last one year? No, not really, no. Okay. I believe that with on-trade or footfalls in retail kind of going up, the mix would have changed in favor of on-trade, at least in terms of volume. it hasn't changed much. What? Is that what you're saying? Not really, no. I think on-trade is an area that we're focusing on more and more in, especially in terms of draft beer. You know, it's something that we wanna be looking at more and more. You know, to promote our brands, you know, through the on-trade as well, and offer draft opportunities. Yeah. Yeah. Actually my second question was on that. The gross margins are under pressure in the very near term. How do we then increase our promotions, on-premise as well as basically support, the relatively newer, brands in the portfolio? Or what would be the additional levers for that? Well, you know, we're not looking at increasing our promotional activities at this point in time. I mean, we'll be seeking pricing, and we will manage our promotion activities, you know, a little bit based on, you know, how we are faring also against competition in the market. I think, you know, we try and balance that in the right way. It's important us to gain value in the business and therefore, you know, have strict control over our BTL, and that's managed in a proper way. You know, depending on, you know, how the competitive environment is turning out. Okay. Understood. thank you and, best of luck, for the current quarters. Thank you. The next question is from the line of Harit Kapoor from Investec Capital. Please go ahead. Yeah. I just had two questions. You know, one was on the premium portfolio. If you can just give us a little bit of sense on, you know, while this is 13% growth, you know, how, you know, in terms of, you know, what brands have driven this and the rollout of the Kingfisher Ultra Witbier, as well as Heineken Silver, you know, at what stage it is, and how do you expect going forward? Sure. In terms of, in terms of the mix within our premium brands, Kingfisher Ultra is doing very well, I have to say, as a start. Let's first focus on, you know, the Kingfisher sort of portfolio. Ultra's doing very nicely. You know, it grew I think over 20%, in the quarter. Max is something we still need to work on as well, but we also very strong double-digit growth, close to Ultra, but we want more out of it. You know, Silver is of course performing nicely for us. We've now launched Silver in Karnataka, as you probably know, in Maharashtra, and also in Goa now as well it's available. It's doing very well in Karnataka, in Maharashtra, it's growing very nicely as well. We want to also push it more in Mumbai itself more. It's there, but we see a lot of opportunity there. In Goa, it's exceeding expectations. You know, we are positive about it, but, you know, it's a step-by-step approach. For us, it's important to see that we are, you know, beating premium in total, and I think that's. That is happening. You know, our ambition to have a fair share of premium is what we're striving for and, you know, and we're working towards that. In this ambition, you know, do you expect over the next, say, 12- 24 months, you know, more products to be launched? Do you believe the portfolio in terms of products is full and we can just focus on kind of driving distribution, you know, for our premium portfolio currently? You know, you mentioned Witbier. We, you know, we will focus on that as well. But at this point in time, we wanna focus on those, you know, winning horses. Heineken, the Ultra portfolio and Witbier as well, of course, we'll be focusing on and doing the right job with those, you know. There's focus on those brands. You know, if you have too many brands launched at the same time, then you start losing focus on it. It's all about the right focus to build those brands. Got it. Got it. Second question is on the regulatory environment. You've seen a few of the excise policies, you know, come out over the last, say, 30-45 days. You know, any kind of key positive or key negative kind of takeaway that you could share, you know, from the same? That was my second question. No, I think positive as well in some states, I have to say, so that is quite positive for us. Overall, you know, we're still assessing it, but we're not seeing any sort of negative impact on the business at this point in time. Great. Those were my two questions. Thank you. Thank you. We have the next follow-up question from the line of Alok Shah from Ambit Capital. Please go ahead. Hi. Thank you for giving me this opportunity. The first point was, any plans to initiate the operating model change in any other state where also there will be a scope to increase, say, the market share or accelerate the volume growth? That was my first question. You know, we review state by state our positions. At this point in time, you know, I don't see anything really, but, you know, I can't really go into more detail than that, but at this point in time, no. Okay. Second was, Any sense that you can give what would be the industry level growth of the premium segment in terms of volume or value, whatever, if at all there's any syndicated data available? In the quarter? in the quarter or nine months, whatever, you know, you can share. Preferably quarter. We grew share in premium, I know that. We grew around 75% in premium versus last year for, from April to December. It's significant growth. And we gained share. I don't recall exactly now how many percentage points, but we did gain share. Good. Just for bookkeeping, what would be your overall market share at overall company level now? It's about 50% still. You know, we're still maintaining that sort of share. As you know, the shares are up and down depending on movements by state by state, but it's about 50%. Got it. Thank you very much for the support. Thank you. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Harit Kapoor for closing comments. Over to you, sir. Yeah. Thanks, Michelle. On behalf of Investec, would like to thank, you know, the management of United Breweries for taking out time for this call, as well as thank all participants who joined the call. I'll now hand over the call to Radovan for his closing comments. Okay. To close, I would just like to say that, you know, inflationary pressure will, you know, remain in the near term. I've mentioned that quite a bit during the call. We will, you know, we will take the necessary actions to mitigate those impacts, whether it be through pricing, whether it be through, you know, better cost efficiencies in our supply chain footprint, also, you know, ensuring that our sourcing going forward through barley, through the other materials that we require, that we get good prices for that and good quality products, we see opportunity there as well, you know. I think it's important to add that, you know, we remain confident about this beer category. You know, we see younger consumers coming into the category. We see, you know, such high potential for India actually in terms of GDP per capita growth, going forward in the longer term, and also the premiumization part. You know, consumers are seeking premium products, looking for variety, and as a business we are able to offer that, so we remain positive, you know, for the longer term. I would like to end on that. Thank you, sir. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your line.