Ladies and gentlemen, good day, and welcome to United Breweries Q3 FY 2024 Earnings Conference Call, hosted by Investec Capital Services. As a reminder, all participants' line 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, Manuja. Welcome everybody on behalf of Investec Capital Services. We'd like to welcome the management of United Breweries for their Q3 FY 2024 call. From the team in United Breweries, we have Vivek Gupta, MD and CEO, Radovan Sikorsky, Director and CFO, and Robin Achten, Business Controller and Investor Relations. I now hand over the call to Vivek for his opening remarks, post which we'll open it up for Q&A. Just a quick request is to limit your questions to two per participant, as the management has a hard stop on time. Thanks, and over to you, Vivek. Thank you, Harit, and good afternoon, everyone, and thank you for joining the call. I'm here with Radovan, and we are pleased to discuss the developments of quarter three and performance up to date. I would say, you know, we are very happy with the progress we have made this quarter, both around our strategic pillars and the continuing momentum we are seeing on the company. In terms of our results for quarter three, our volume reflects a 8% increase, but our price mix was even positive, and our net sales grew by 13%. And the sales is quite broad-based because volume growth from Tamil Nadu, Telangana, Odisha, Maharashtra, Rajasthan, and there were some tailwinds like in Delhi and Kerala and in some of the other markets as well. Our gross margins for the quarter were 44%. They were 250 basis point up versus prior year. I would say that, you know, this is something, you know, this was slightly below our expectation, but we understood during the quarter that why is it down, and, you know, we made some corrective actions, which we are very happy on the progress on those actions as well. But we are not overly worried about, the drop in the margins for the quarter, as we know that structurally we are doing the right thing there. And our premium volume continues to be strong. It showed a 14% surge. We saw double-digit growth on, and strong double-digit growth in some of our key, premium brands like Ultra and Ultra Max. We had a bit of supply challenge in Heineken in Karnataka, but despite that, we were able to deliver good growth. And what we know that our shares are up for the December quarter, even on premium. To highlight year to date, you know, because of the strong recovery in the last 2 quarters, our volumes are now almost flat, down 1%. Our net sales is up 2%. Our gross margins are still lagging behind, but it's catching up at 42.9%. Our EBIT is +2% and profit after tax 12%, but the momentum is there in the right direction. Our volume growth was broadly very broad-based. East grew 22% for us, driven by strong growth in Odisha and Jharkhand. South, the big markets of Tamil Nadu, Karnataka, Telangana, AP, Kerala, grew 10% for us. West grew 9% for us, and North, we had a decline because primarily led by Delhi, where we continue to wait for the structural things to solve at a local level. And, you know, we continue to cautiously trade in Delhi on our business. Our volume recovery is showing a momentum. In quarter one, we were down almost 12%. Quarter two, when we talked to you last time, we were up 7%. Quarter three, we were up, we are up 8%. And even better part is the price mix is good. So some of the actions we took, in, in the first half and the later the second half, early second half of the year, we are seeing better. So our price mix is improved from, you know, 3% to almost 5%, based on the, the work that is happening on the right, on the premiumization and the right pricing. So, so we feel overall quite, strong about the results. I'll hand over to Radovan to talk about, margins and, and some of the other improvements, and then we can open up for questions. Okay. Vivek touched on the margins, but maybe I'll just give a little bit more flavor. So like Vivek said, you know, compared to last year, we see nice improvement in our margins, you know, driven by some of the softening of the raw and pack materials coming through, but then also the pricing helped us, yes? So some healthy pricing, and also, you know, doing some revenue management activities around BTL spend, etc., which has helped as well. If you look at from quarter to quarter, then, you know, there can be a little bit of questioning around the growth there. But, you know, we are fully aware what is happening, and there we see that the bottle returns were not at the expected levels, right? And of course, that means we had to do more injection of bottles, particularly also when you see the bottle growth, I mean, the sales growth, right? So that combination had an impact on our margins. But like Vivek said, you know, we are taking the necessary actions for that going forward, and we believe that we can set that right. There was also a little bit of a state mix impact. On the EBIT margins, I have to add that actually, in the quarter, we did quite a bit of investments behind the brand, quite a bit more than in the previous quarter, and also versus last year. You know, and that you could probably see that also in the market where we were also involved in the World Cup, etc. So that was nice to see that we are building the brand power. I think we can end it with that and go to Q&A. 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 touch-tone 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. Participants are requested to limit their questions, two per participant, in order to ensure management is able to address questions from all the participants in the conference. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Latika Chopra from JP Morgan. Please go ahead. Yeah. Hi, can you hear me? Yes. Okay, thank you for the opportunity. Two questions. The first one was on, you know, volume growth. You've been delivering 7%-8% kind of volume growth, but clearly the base was also, you know, in at least in the prior quarters, affected by route- to- market changes, and now that's sitting in the base. Given that some of the states, like Karnataka and Tamil Nadu recently, you know, announced some tax increases, how do you see volume growth really playing out? Are you comfortable with this high single- digit volume growth momentum and mid-single digit price mix momentum to continue, you know, for the upcoming fiscal? And the second question was on your comments on gross margin and the interventions, you know, that you've undertaken. If you could elaborate a bit on that, and should we now assume that 44% that you delivered in this quarter is kind of a bottom and progressively margins should move up? Thank you. Well, thanks for asking the question. I think on the first one, look, I think the first thing is, yes, we have a RTM. The previous quarter or past year, there was a lower base, you can call it. But I would say that, you know, our growth is very broad-based. So as I gave the numbers, like for example, in most of India, where we had no RTM change, we grew almost 22%. In South India, it was around 10%. You know, in the West, we grew 9% where there was no RTM change previous year. So I would say that the growth has been quite broad-based for us. And I think, yes, the recent announcement that Karnataka government is a setback, because we don't want beer to increase. But the actual impact of the price to the consumer, we have to still watch. It is around 3% increase to the consumer. So we think it may not be that significant increase to the consumer that it can impact the volume momentum, but we have to see on the announcement. On the Tamil Nadu, we are still awaiting the, the whole impact of the MRP increase and what are the means for us from our, from our profitability, how much of pricing we are going to get benefited. There's no clarity. We think we are going to get clarity next month, you know, in next couple of weeks from that. I think having said that, I think what we are doing is a lot of fundamental work. As Rado said, we are going to continue to invest in brands. We are filling our portfolio. We have a lot of innovation. So, so we are pretty confident that this trend of 7%-8%, mid to high single- digit growth we can deliver in the near future. I think on the second question on the margins, I'll ask Rado to be more specific on what kind of things are there and how we are looking at it. Yeah. So, like I said a little bit before, the two main drivers are for a slight, you know, muted, I wouldn't say muted performance, I would say that slightly below the previous quarter, is actually the bottle returns, right? And, you know, I've spoken in the past about that, the importance of bottle returns vis-à-vis also the price of new bottles. So of course, it's a combination on working on both of them. But, you know, we have had some more difficulties in getting bottles back in the market, and we've had the necessary conversations with our stakeholders and suppliers, and, we put forward some plans going forward on that, which we are hoping will have a positive outcome on that. And then there was a little bit of a state mix impact as well. So that's, that's on the margins. All right, so it's fair to assume, you know, at least gross margins, you know, stick at these levels, and probably don't come below this. I don't know how to think about that. I know state mix is a little tricky to call out, but from a cost, mix of new bottles versus old bottles, is it gonna worsen or, you know, stabilize at these levels in your view? So like I said, let's see how these, you know, these action plans pan out. You know, if they go well, then I think we can have a bit more underlying growth in margins. But, you know, it, let's see how the market moves on our plans. Understood. Thank you so much. Thank you very much. The next question is from the line of Abneesh Roy from Nuvama. Please go ahead. Yeah, thanks, and, congrats on, good volume growth. My first question is on the premium market share and premium volume growth. So it's a good performance. I wanted to understand, in FY 2025, what will be your expectation in terms of premium, volume growth, given you are under-indexed, versus your pan-India market share? In premium, you are under-indexed. And related question in terms of premium only is, how many times can the bottle be reused in premium? I understand Heineken, you use, mostly new bottles, but in rest of the, say, Ultra and Ultra Max, how many times can the bottle be reused versus, your economy bottles? Some color if you can give, that will be useful. Yeah. Thanks, Abneesh. I would say that I think the premium is a definite part of our strategy. And as I mentioned, I think for us, using the total portfolio is going to be very critical. So we are going to do a lot of work on Kingfisher, as Rado said, on World Cup, Sunburn, and UB we actually invested significantly. But absolutely, premium is going to be there. We do share some premium in last quarter. We will continue to have a significant share those, this year. Our plan is to expand our innovations, like Heineken Silver innovation, Heineken Draught innovation. Some of these other innovations which we have in pipeline, which will, we'll deploy in next quarter or so. I think we have a very strong plan on premium, both in terms of innovation and supply towards that. I think on the bottle return, of course, when you build a premium brand, you have to increase a lot many bottles, but the return percentages on premium are very similar right now. Because one of the issues with the bottle is the whole issue of, you know, the broken bottle collection, which is happening, which we are working with glass manufacturers and even regulators, because there is a lot of illegal trade of this, collecting the bottles and breaking them and selling it to recycling for the industry which is impacting us. So we are working with government, we are working with glass manufacturers, we are working with our own vendors to improve their capabilities on this. I think it will be just the new infusion as we go premium will impact, but overall, we don't see a significant difference in premium return versus the mainstream return. Sure, that's helpful. One follow-up on the premium strategy itself. Your competitors in premium are unlisted, and that gives them an advantage of propping up ad spends without looking at the quarterly results too much. So I wanted to understand this constraint of yours that will continue. In that light, what are you doing different versus earlier in terms of, I understand the Draught beer which has been launched, etc., but what is the different strategy you are now employing versus, say, in the past? Because your market share is much more under-indexed here. So given the constraint of being listed entity, anything you can do different on a strategic level? Yeah, I would say, I think there are three things. I think one is just fundamentals, very basics, because then we need to get our supply chain network ready for premium. You know, because one of the issue we face is export, interstate exports from the states, because we produce premium in the state X, and they don't allow for whatever reasons, and then it becomes very difficult. So the consumer don't get consistency of supply. So we are working very hard on fundamentals to improve our local supply of premium in the key states, and you will continue to see our footprint increasing there. We've actually added couple of places that we recently started extra production of premium Ultra in Odisha, in can. So we are doing some of the local sourcing, which will absolutely improve the performance of premium. The second is our, the whole investment in marketing is not only more, more money, but it's also quality of the marketing. So there is a lot of work happening, and we are very pleased on our brand power score. We got recent score, we actually improved on Kingfisher brand. We also improved on Ultra and, you know, some of our brands are even scoring better than the competition. So we are feeling very good on the quality and the content of that part. And I think the third one is, you know, there is the execution, the sheer execution, which we are working on. And I think it may sound very, very basic, but on our premium, some of our premium brands, the distribution has doubled in Maharashtra. So, it's very basic, but you know, we are doing, lot of those work. The fourth is very consumer meaningful innovation, which is, you know, quite deep rooted on the insights. As a company, we are also sustaining our ability on understanding consumer insights, designing for the consumer, and you will see that over the next few weeks when some of these programs are on the way. Sure. My second and last question is on the state-level mix which you have given. So good volume growth in South, but when I see multinational spirits company, they don't have much of a presence in Tamil Nadu and Kerala, given too much of a government control, etc. So what would be your experience and response to that medium long term? And second is, when does North volume growth recover? Because now at some stage, base will also start to benefit. So any color you can give on recovery in North India? Yeah, I think we should see recovery more start in next couple of quarters, because I think we're still going through the cycle of Delhi and Haryana, some of these parts. We are actively working with the government in both these states to open up few of these things. So, I think it will take another quarter or so to see the full recovery there. I think on the Tamil Nadu and Kerala, as you said, you know, we had the RTM changes in Tamil Nadu last year. We are going through that. We are looking at how the overall performance comes in. We are also strengthening the portfolio there. Kerala, again, the same thing. You know, we have good shares in Kerala, and we continue to see good consumer response on the demand. So we actually don't face any government resistance, which I'm aware of in Kerala and Tamil Nadu to do business. So of course, you know, some of the calls we have taken to increase the MRP of beer, that can be a dampener, but we need to understand fully once the notification comes in. But right now, our progress on Tamil Nadu and Kerala is strong. Sure. Thanks, that's all from my side. Thank you. Thank you very much. The next question is from the line of Ajay Thakur from Anand Rathi Securities. Please go ahead. Ajay, sir, your voice is not clear. Hello. Am I audible now? Yes, sir. Yeah. So I had two questions. One was, to do with the strategy. So last quarter, you had mentioned about, you know, you will give bit more color on the strategy during the quarter for, you know, what is, you know, future roadmap. If you can share some light on that, that will be helpful. Yeah, sure, Ajay. I think, you know, we actually will do a proper session on that, as because we are actually linking up with the overall global company and the timelines, but I can give you an overall view on the key pillars we are working on it. I think the first pillar is, of course, we are working on ramping up our supply chain for future. And as you know, in India, every state is very different, and beer is a lot about scale business. And we have one of the biggest brewery network in India. So one of the things we are reviewing is, you know, what is our future network looks like? Where we need to expand, where we need to add, where we need to consolidate. So there's a lot of work happening on that, that part. You know, and, and that is about, you know, making sure that we have capacity for the future to at least deliver high single digit to double digit growth for next 5 years with, you know, to work on that. I think the second one is we are leveraging a lot of, really consumer-first mindset, really consumer-first mindset, really investing in both in our organization and our capabilities to understand why the beer penetration in India is low. Why only 85 million-90 million people consume beer versus 200,000... 200 million people who consume any liquor? So the clear objective is to drive category growth. For me, the big, big part is the people who are already drinking liquor, why can't they drink a moderate liquor like beer, and what are the barriers to do that? So we have some understanding, but we need to go very deeper into it, and we are already seeing some experiments which are giving us success around category growth. I think, and linking to it is, third is to have a very winning portfolio in India. The unique thing about UBL Heineken is that we have the best domestic portfolio in India with Kingfisher, Ultra, Ultra Max, and some of our local brands. But we also have access to the one of the biggest global beer, Heineken and the portfolio. And we just need to bring the right portfolio so that we can offer various price points. So you would have seen some of that in Karnataka, where we are now playing in all the tiers what consumers are looking at, so that it gives us, t here are some gaps in the super premium, but we still have working and meeting all the premium needs. So that's the second big area, is to really focus on consumer and give them what they want. I think the third important area is the use of technology. I think, as you know, that the stores are limited. There are 100,000 stores, but we also have high manufacturing and large business. How do we leverage technology to get more efficiency, effectiveness, and also increase the speed of execution? There's a lot of work happening on as a company to be more digital, like, you know, something like, you know, we're working in our breweries, working in our go-to-market, working in our internal working to really do that. And I think the fourth key pillar for us is absolutely, you know, to really grow this category by working very closely with the government and really impact the policy framework. Because if you ask me, that is the biggest barrier to growth of beer in India. And we are closely working with the government, really trying to educate. And recently, a World Health Organization has given a study which actually talks about something called as harm per liter. They're saying, you know, the world should move towards moderate drinking, versus the high-spirit drinking and all. Unfortunately, in many states, the taxation is very different. I think those are four key priorities other than just making sure that the organization is a winning organization and capable organization. These four areas, we are doing a lot of work, but we'll talk more when we do a little bit more detailed session on the exact details of what we are trying to do here. Thanks. Thanks, Vivek, for that. My second question would be more on the Karnataka, which you were alluding to. Want to just understand bit more in terms of, you know, the market share trends, how it is moving, because of late we had seen that, you know, the Karnataka, it has been, it's been one of the, you know, the, area of concern in terms of, you know, market share, losses. So I just wanted to understand how is it tracking now? Have you seen, you know, some kind of a stability turning on that front? A nd if you could throw some light about that. Right. I would say our organic shares, and when I say organic shares, is, you know, if you take away some of the disruptions which happened in Karnataka, where we moved from three shifts to two shifts and back to three shifts, and this is for the industry, right? You know, the government are changing their minds up and down in the thing, and we went through that. I would say, you know, we are seeing a positive share progress in Karnataka. So our shares in Karnataka, you know, we at least gained almost 200-300 basis points in December versus the previous thing. Our strategy is definitely working. It's a very competitive market, but our strategy is definitely working. We also have further plans in Karnataka, which are getting into the execution in the market, which will only strengthen it. So I think on your question, I think, you know, if keeping everything, you know, as if there's no disruption because of elections or something like now in Bangalore, there is going to be three days closed because of a local election and all. As long as these disruptions are not there, I think we are growing the shares in Karnataka. Thanks. Thanks, Vivek, for that. I will come from a question back in the queue. Thank you. Thank you very much. The next question is from the line of Jay Doshi from Kotak AMC. Please go ahead. Sure. Hi. Hi, thanks for the opportunity. I have a few questions on your profitability. Now, you know, we believe that barley prices, the low-cost barley would be already in the, you know, cost structure of this quarter, and yet your gross margin is at 44%, which is nearly 10 percentage points lower than what it used to be in FY 2019. It's not an apple- to- apple comparison, but when I look at the other listed player, United Spirits, you know, their gross margins are about 300 basis points lower versus that period. So I'm just curious and want to understand, is it some structural change for the beer industry or a change in your state mix that is resulting in, you know, such sharp gap versus what it used to be four years back? And if you could, you know, address. I understand that, you know, glass bottle prices would be hurting you more than spirits players, but broadly, taxation, price increases should not be very different between spirits and beer over the last four years, right? So this is first part of the question. Second is, if you can give a roadmap in terms of what is necessary or what is required for you to get to 15%-16% EBITDA margin, or essentially 50%+ gross margin, and is there a visibility on that? That's it. Sure. So let me take that one. So, you know, 2019 feels like so far away already, and so many things have happened since then, first, through COVID, through the extreme volatility of commodity prices, and we're in quite a different world we're living in now in terms of volatility, right? So, you know, our ambition is always that we need to improve the, you know, the gross margins and the margins, for our Indian business. But it will take some time through the various activities that we are doing in terms of premiumization, you know, the category growth, getting the economies of scale, etc., getting the efficiencies in the breweries that I've been talking about in the past, and also in the material part. So it's a combination of those things. But the big impact for us, and I, you know, I'm not gonna go down into comparing us with spirits in terms of margins, because it is a different product, yes? We use different raw materials. Barley prices had a significant impact on us, and the spirits weren't as exposed on that raw material as we are, because they use different raw materials. The bottle impact on us was high as well, as you might know, and we've been under pressure with the bottles, as Vivek has mentioned, with cullets and prices in the market, and we have to manage that properly. We've seen softening of that, and that's reflected in our margins. Our margins are improving. Are they improving at the pace that we, you know, we want? Of course, we would want them to be improving more, but I think we have the right plans in place, and we're working through to grow those margins. You know, but for our business, you know, it's a combination of a number of things. And of course, the state mix, you actually mentioned it correctly, and that's true. The state mix has impacted us as well. But we wanna grow the category, we wanna grow the quantity of earnings, first and foremost, but of course, the quality of the earnings should come with that as well, you know, and that's the balance that you're talking about. But quantity of earnings is important for us as well in, you know, in India, where we want the category growth. So I think that could summarize your question. Understand. Thank you so much. Thank you very much. The next question is from the line of Krishnan Sambamoorthy from Nirmal Bang Institutional Equities. Please go ahead. Yeah. Hi, can you hear me? Yes, sir. Okay. Okay, Q3 is seasonally a weak quarter, and you also, but you also had the Cricket World Cup during this particular quarter. And anything to call out, was there a significant positive impact that you can call out as a result of the World Cup during the quarter? Sorry, I didn't get the question. The business impact of World Cup? Yeah, the Cricket World Cup. Was there any positive impact in what is usually a seasonally weak quarter? Yeah, I think, look, it's very difficult to isolate the impact of an event. I can only say that, you know, at present, we only measure brand power scores. And I would say that we were able to reach a significant large number of consumers during that World Cup because of the viewership, and we were running the campaign. And then, our brand power scores have gone up. Now, how much that impacts the business and results is very, very difficult to really actually come together because, you know, you know, somebody was telling me that up to final it was great, and after final we stopped drinking. So I think it's very difficult to actually, count it, but I think what really gave us the confidence that our brand power scores, we reached the consumers, and we got good results. And that's why in December, during Christmas time and New Year, we actually, were very strong in the event. You know, we were part of Sunburn Festival. We got even good recall on our activity. In fact, we got the data that in Sunburn Festival, 87% of the consumers who walked in, they knew our brand, the first brand came. So I think our execution was also very strong, which gives us confidence as we get into this quarter, that we'll continue to see that momentum from the sun. But very difficult. Sorry, I can't answer the question. It was a difficult World Cup impact on our sales. Understood. Understood. And on the cost side, was it any unusually high marketing spend during the World Cup season or the Sunburn and the end of the year period? Yes. Our total, we spent almost 300 basis points more on advertising and promotion in this quarter than the previous quarter. So absolutely, we invested more on some of, some of this, spend. But I think that will continue because as we get into the season to really do that, and, I would say, you know, if you look at on overall, our advertising and sales spend is still much lower than the global standards, what is needed to grow beer category. So one of our goal is going to be on, linking to the previous question on when will we get a very strong EBIT margins and all. I think I see India as somewhere where category is underpenetrated. There's a lot of scope to do that, and it will need bit of investment. It's a balanced growth, so we'll grow top line and, you know, expand the category, but it will need investment, and we'll continue to invest. Understood. Thanks a lot. Thank you very much. The next question is from the line of Arkop ratim Pal from Sanjay Agarwal Broking. Please go ahead. Hello, everyone. Am I audible? Yes, sir. My first question is, based on your latest results, what is the corresponding volume growth rate? Additionally, how much does the price decrease or increase in that quarter? I think your question is price mix. The price mix is up 5%, so our volume grew by 8% and revenue by 13%. So the net impact is + 5%. Okay. And my question is, is there any price decrease or increase in your product in this quarter? We did rationalize, you know, price on economy in one of the brand in Karnataka, but that has a very small impact on our results. And we did cycle some of the price. We are still got the impact of some of the pricing, which happened in some of the states, but net impact is + 5%. Okay. And, one more thing, and that is, could you please elaborate on any potential changes in operating profit margin that might be anticipated for this current quarter? Sorry, I didn't get the question over the line. You asked the profit margin? Yeah. I'm asking that your operating profit margin might be anticipated for this coming current quarter. Is there any changes with your OPM or something decrease or increase? Yeah, I think the guidance for- Guidance for the next quarter, is that what, if I understand correctly? Sorry? Guidance. You know, we don't give guidance going forward on OP margins, going into the next quarter, quarter four. All I can say is that, as I mentioned, you know, we continue working through the plans to work on our margins, like I said, on the bottles, and on our revenue management activities. You know, we are hoping for a good volume growth into quarter four. Okay. And what is your expectation about the demand scenario in this current coming quarter compared to last quarter? Sorry, I didn't understand. The line is bad. Am I audible? Hello? Yes. Yeah. But my question, my question is: What is your expectation about the demand scenario of this current coming quarter, I mean, as compared to last quarter? As we said, you know, look, you know, we are, we continue to, you know, see high single- digit growth. And on the margins, as Rado said, we don't give the guidance, but we are taking all the initiatives to be in the right direction. Okay, so you hope that, the incoming quarter, it will be a positive growth, right? We hope so. We will ask to ensure that it will be positive growth. Okay. Okay. Thank you, sir. Thank you very much. The next question is from the line of Karan Taurani from Elara Capital. Please go ahead. Hi. Thanks for taking my question. My first question is on the investment plan, right? So I think a beer category, Kingfisher, has been the market leader since so many years. So what exactly has happened in terms of strategically or in terms of your thought process that has led to more investments, you know, in terms of growing this category? Because UBL is the market leader, right? So is this investment more panning out to, you know, growing the premium beer category, or is it gonna be equally split between Kingfisher and Heineken as such? I think, you know, this year we have already invested almost INR 140 crore of capital behind supply chain initiatives to do that. I think when we say category growth, I think the investment is in the four key buckets. I think the first bucket is to really make sure we are supplying for both Kingfisher and premium, which is going to be available as the market continues to grow. And I think that's the number one important one, investment on the supply chain. And of course, it's this is in two parts. One is just ensuring there is more supply, and second is where we have supply, ensuring there's supply of more portfolio, both premium and other, which needs investment. Like we made an investment in Karnataka, where we are waiting for an approval over the next 3-4 weeks, where we have put a significant investment on the Heineken line, so we can start producing local manufacturing, but we are waiting for some label approvals there, and we're waiting on that. I think the second big investment in category growth is with consumer. Because as we invest, we need to invest in superior packaging, superior products, also communication. As we said, you know, our advertising and promotion spend are increased, and we need to continue to do that, because there are more brands in the category now, and we need to tell why better beer, why our beer is better. I think that's the second area. And you know that we can't do too much above the line in this category, so you have to rely a lot on on-ground execution, outlet- by- outlet, bar- by- bar, to actually get that experience. So the third investment because of that is in execution, in terms of our ability to execute both the events as well as in-store execution in an outlet- to- outlet level. So there is an investment which is required there as well. And I think the fourth is, of course, as we are doing this, we are talking about technology and digitization, because that will need investment because as we start working on it. I would say that we will continue to invest on both core and premium, and in some cases also on economy. But it will be quite because Kingfisher is a large part of our business, so it will be very difficult to give a percentage split. But I would say, you know, we will be. W e'll try to be sufficient in a plan across three years. And that is typical to be sufficient on what is needed to get those brand power results and get those goals on category growth and penetration. Right. But in that case, you know, your volume growth should also see acceleration given the kind of investments that you are planning, because your volume growth of mid to high, you know, high single digit, doesn't, you know, kind of match up with the kind of investments you are doing. So, are you trying- I mean, when, when is the visibility that you'll see that you'll probably, you know, beat markets, market outlook in terms of broader beer volume growth or any kind of visibility over there because of these initiatives? Yeah, I think, you know, you are right. You know, if you, if you add up everything I will say, you will have a very explosive growth. I think the reason we are also being very cautiously optimistic is some of the regulatory changes which happened in this category, which gives you a surprise. You know, we talked about how the only beer taxation went up in Karnataka. We talked about there's elections ahead, which we don't know, we know that there will be disruptions. There'll be days which will be dry days. In some markets, there'll be issues around having a second shift of beer or third shift of beer to do that. So I think we are cautiously optimistic, so the way we are working on is just work on what is in our control and do that. You know, as we continue to improve, we will continue to change our outlook. Got it. Just one last bit on the investment front again. Gross margins, you know, might see a cool off going ahead because of, you know, commodity prices cooling off going ahead. If that were to be the case, you think the entire benefit will be passed on to EBITDA margin or there'll be further investments? The point I'm trying to make here is that, are investments kind of now at a plateau level or to increase further, if at all there's more benefit from gross margin? Sorry, apologies. We are very clear in getting only two questions per person, so we've just got two minutes left for the last question over the line. Thanks. Thank you very much. The last question is from the line of Harit Kapoor from Investec. Please go ahead. Yeah, hi, good afternoon. I'll limit mine to one. Just wanted to get your sense on two states. One is Tamil Nadu and the second is Haryana. So in Tamil Nadu, you know, what is the extent of kind of recovery that we've seen, you know, visually, you know, when we did our, you know, change in the route- to-m arket? We're obviously seeing growth from the low bases, but in terms of, you know, recovery to prior, you know, to original levels, you know, where are we? And the second one was on Haryana. If you could just give us some sense on, you know, why that market is under some pressure. So those are my questions. Thanks. So, Harit, I'll touch on Tamil Nadu. I mean, we've spoken about this market for quite a few months now at the moment. And like we said, we did some changes there. We are cautiously optimistic about the volumes. We've seen recovery, which is nice to see. And we will see how it progresses, you know, over the coming months. And so there is a potential price increase on MRP. We'll see how that pans out. And that's where we are in the market, you know? I think, you know, we are operating in, I don't know, 25, 28 markets. And there's, you know, we have attention on the various markets, but often we always go back to the Tamil Nadu discussion. Like I said, cautiously optimistic on it, and we will, we'll see how we progress on it. On the Haryana market, yes, we took some decisions there in terms of our profitability. We reviewed some of our commercial terms, and there was some volume impact, but we see some nice recovery coming through there again. So again, you know, we see some dips, and then we see opportunities coming through again. Yeah, let's see how that goes forward. Great. Thank you, Rado. That's it for me. Thank you very much. As there are no further questions, I would now like to hand the conference over to Mr. Harit Kapoor for closing comments. Yeah, thanks, Manuja. On behalf of Investec Capital, we'd like to thank all the participants who joined on this call, as well as like to thank the senior management of United Breweries for giving us this opportunity. I'd now hand the call for to Vivek for his closing remarks. Hey, thanks, Harit, and thank you everyone for asking questions. I know we could not take all of it. To do that, I really appreciate, as I said, that as a company, as a leadership team, we feel very good about the progress which we are making. We are making some structural calls. You know, none of the results, I would say, are too surprised to us, but I would like to be better. I think we'll keep you posted on the progress of the company. Thank you very much. Thank you. On behalf of Investec Capital Services, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.