Ladies and gentlemen, good day, and welcome to United Breweries Limited Q4 FY 2024 earnings conference call, hosted by Investec Capital Services Private Limited. 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. Thank you, and over to you, sir. Yeah, thank you, Mustan. Good afternoon, everybody, and we'd like to welcome you all to the United Breweries Q4 earnings call hosted by Investec. On the call today from the senior management team of United Breweries, we have Mr. Vivek Gupta, MD CEO, Mr. Radovan Sikorsky, Director and CFO, and Mr. Robin Ashton, Business Controller, Investor Relations. I now hand over the call to Mr. Radovan Sikorsky for his opening comments. Over to you, Rado. Thank you, and yes, good afternoon, everyone, and thank you for joining the call. I'll start off with highlights of Q4. I'll give bits and pieces also then on year to date, and then we will open up for questions. So as you could see, our volume reflects an 11% increase in the quarter, driven by strong underlying demand, so it was nice to see such a strong quarter in terms of volume growth. This was also supported by nice growth in premium volumes, which continued to be strong at 21%. This, you know, really driven by Kingfisher Ultra, Ultra Max, and of course, Heineken brands are there as well. Net sales rose by 21%, driven across a number of states, including Tamil Nadu, Telangana, Andhra Pradesh, Orissa, Rajasthan, and, you know, slightly offsetting some markets like Haryana, and Pakistan as well. There was also some pricing coming through in the, you know, the pre-cycling from last year. So you can see that in our bridge overview in the slides, that, you know, the pricing that we had taken in 2023, we are cycling that, and that is nicely coming through our mix part. Our gross margins during the quarter were at 312 basis points compared to the prior year. You know, really driven by those revenue management initiatives, primarily pricing, but also other initiatives that we are doing, and some of the cost initiatives as well. If you look at the year-to-date results or the full year, let me call it, volumes were up close to 2%, with net sales up 8%, driven by the pricing and the mix. So, you know, it's really a... It was a year of two halves, where it was a difficult, if you recall, beginning of the year. But we started getting some nice momentum, you know, going into the two, three quarters at the end. In the quarter four, as we mentioned, the 11% strong underlying demand was mostly observed in the south, driven by the performance of, you know, Telangana and Tamil Nadu and some in Andhra Pradesh. East was around 10%, driven by, mainly by Orissa. Over the past, you know, two quarters, I've, as I've mentioned, we have demonstrated a gradual recovery signaling, you know, a real positive momentum in the business. And it's also very nice to see the premium volumes continue to accelerate, you know, with a 21% growth in the quarter. What you've also probably seen in the media, you know, and it's, and it's nice to see the Kingfisher, Queenfisher, launch, you know, in terms of celebration of, of International Women's Day. We've had a great response from the market to that. And also, we launched London Pilsner in, in Karnataka, and of course, we also mentioned in the past, Heineken Silver Draft in, in Maharashtra, which, which is really doing very well and is really being appreciated. Thank you very much. We will now begin the question and answer session. Yeah, just, just before that, can I add a couple of things? Yes. Yeah, you know, I think Rado already talked about the results. I just wanted to take this opportunity to thank Rado. As you know, that we have announced that Rado is going to move to a regional CFO role for the APAC region. And we also announced yesterday that Jan, who is currently CFO for Heineken Ethiopia, is going to be our CFO from August 1. So I also wanted to take this opportunity to thank Rado, you know, I appreciate the result as well. Thank you, Vivek. Yeah. Over to you, yeah. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touchtone telephone. If you wish to remove yourself from 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 the moment while the question queue assembles. First question is from the line of Abneesh Roy from Nuvama. Please go ahead. Sorry, this is Abneesh Roy. Thanks and congrats on good volume growth. My first question is on that only. South and East India have been doing a lot of heavy lifting for you in terms of volume growth. How is the base now in FY 2025, given in most quarters, these two geographies have done well? Specific on the other side, North and South India, some of the states have been quite challenging. If you could discuss in Haryana and Goa when do you see recovery happening? Vivek, you take that one. Yeah, sure. You know, thanks, Abneesh, for asking the question. See, as you know, this business is state-by-state business. There are many factors who, which are impacting the business, right from the regulatory environment, go-to-market, our propositions there. I would say we had a very good growth in Maharashtra, Goa last quarter. And what we understand is in Goa, it has been a weak category trend in the first quarter itself, because there was a lot of stock up by the retail in the last quarter during the Christmas, and it was not as good that season. So fundamentally, we feel very, very good about Goa. Our shares are growing, our proposition is strong, so I see that a recovery is going to happen even in this quarter. In case we do have challenges in couple of other markets, like in Haryana, we actually last year rationalized our investments in that model, and I think we are still cycling through that change, which had an impact on our margins in a positive manner, but we are also working through that. So I think, And, and we also had impact in couple of other states in North, because, you know, in Punjab, they stopped shipping after fifteenth of March because of their registration and labor changes. Which is also a learning that there are a lot of processes which actually are need changes in regulation, where the category actually gets impacted significantly during the transition. So I don't think any major structural issues are in most of these markets, but it is. Haryana is quite intentional, and I think Goa is just a matter of time. Right. Understood. So if I see, the premium volume growth that has been accelerating very strongly last three quarters from 10% became 14 and 21 now, that's a very strong growth. So if you could tell us what's working here, is it, broad-based across all the top key cities, this growth is there, or, some cities are standing out? And any change needed, it's strong growth, I understand, but any change needed in FY 2025 to maintain the momentum? Yeah, I think there are three factors which are driving premium growth. I think the first is very, very sharp understanding on consumers. I think I, I know we talk about it, but I must say that in the last few months, we have actually really sharpened our understanding on each of the consumer cohorts, and we have actually built our premium propositions accordingly. So we are seeing that positive momentum on that. Like, Kingfisher is a good example, what Dado shared earlier, and we saw the similar in Heineken Silver Draft in Mumbai, where the repeat rates are very high. The second big one is we also are able to, you know, really plan well from an execution perspective with the on-trade, on-premise customers, because we go with full portfolio approach versus a brand approach now. So we have a portfolio in mainstream with Kingfisher, we have a portfolio with premium, we have a domestic premium with Ultra, Ultra Max, we have an international premium with Heineken, wherever it is available. On your question, will this momentum continue? I think we are doing a lot of work to ensure that we have a supply chain footprint to serve premium. One of the challenge has been that we have been doing lot of interstate exports, and that has been challenging in the regulatory environment. It can, it can actually lead to unreliability in many cases, and especially in elections, we know that, you know, there's lot of bans and all, which does not give consistency to consumers. So one of our focus area is to expand our footprint of premium manufacturing in our own breweries and, with, with some of the partners. We have already taken some actions. We are hoping that in Karnataka, for example, we will get the approval after the elections to start manufacturing Heineken, where we already have facilities, which will also give us success. So it is primarily increasing our manufacturing footprint and playing the portfolio game. Sure, that's helpful. Vivek, last question. Q1, the summer is very harsh. What we are picking up is ice creams, talcum powder, and cola plus, and other beverages are seeing very strong numbers currently. In your case, base is extremely favorable. You had a 12% dip in Q1 last year, in overall, and 21% dip in the premium. So I know the base is quite soft, but I also wanted to understand if you could give a holistic picture, because Q1 elections are also there, and we know in elections, Alcobev faces a lot of different kind of challenges in terms of the number of shifts and dry days, et cetera. Overall, how are you seeing the... I'm not asking for guidance, it's still very early days for the Q1. Overall, if you could give us some sense on hot summer related benefit and then the challenges of the elections. Yeah, I think hot summer is in front of all of us. I think it is very hot. I'm in Chennai right now; it's very hot also. I would say that, you know, like, there are two learnings I have, and I think as a company, we have. I think the first is, as a market leader, you get most impacted by the positive or the negative change. So election impact, while it is very broad, but I think the impact on us is slightly higher, because we need actually three shifts, for example, in some of these states to just meet the demand, because we are 50%, 60%, 70% market share in various states. And for a smaller player or a local player, they can still manage their demand within one or two shifts. I have seen that in some of these states, the impact on us, because of restrictions, is much higher. The second thing is, as I mentioned, for us, the compliance journey is super, super, super critical. So we are actually going and making sure that we are, meeting very high standard of compliance during this whole part. The third thing is, I do think that there is, there is an increase in, demand, and in some places, you know, like, government corporations are not able to live, you know, manage the inventory situations. Like, the number of days of inventory, for example, in Karnataka is very, very low, but the consumption is high, what you see in the papers and all. So I think it's a combination of various things. It's very, very, volatile right now. The states where elections are over, we are seeing some recovery. The states where elections are in seven phases, we continue to see disruption. So I think right now we are waiting for this thing to get over, and I'm hoping that, you know, this will be an extended summer, and, we'll try to recover whatever we can. Just one clarification there. For example, UP, I think, has got elections in seven stages. So does the state get impacted in all seven stages, or is it state-wise, geography-wise? How does it work? If you could clarify on that. Yeah, it gets impacted in various forms, because, you know, the UP elections are happening from west to east. So if the central UP gets closed, then the movement of trucks gets impacted to east UP and all. So it's... And also there is manpower and availability. So there is an impact, not to that extent, the massive extent where we say that, but there is definitely more impact in phase-wise election versus a state which is going in one phase and over. Sure. Understood. Thanks a lot, Vivek. All the best. Thank you. Ladies and gentlemen, in order to mention that management is able to address questions from all the participants in the conference, please limit your questions to two questions per participant. Should you have a follow-up question, we request you to rejoin the queue. The next question is from the line of Krishnan Sambamoorthy from Nirmal Bang Institutional Equities. Please go ahead. Yeah. Hi. My question is regarding gross margins. In your presentation, you have indicated that there is a positive mix of about 5% on price and about 4% on state mix. In addition to that, the Q1 last year had the thrust from a gross margin perspective to the worst percent in 20 years that I have data for. Yet despite that, despite the fact that barley prices have also come up significantly, and despite positive price, significant positive price in state mix, why is the gross margin improvement been only about 300 basis points? Is it the fact that a positive price realization mix can also be negative from a margin perspective in those states? And also whether there was higher proportion of from a bottling perspective, new bottles versus last year? Dato, maybe you can answer this a little. Yeah. Look, there's obviously a number of factors that impacts our gross margins. I mean, we are happy that our gross margins have improved, and we can see that's a nice trend, compared to the previous quarter four, right? So that's clear there. And like you said, it's a combination of pricing and mix. With the strong growth in our volumes, right, that we had, and you know, you've seen that in the quarter four does imply a higher injection of new bottles also into, you know, into the market. So on the positive side, it's fantastic for our top line, but it does have some negative impacts in total gross margins. Therefore, you know, I would, I would also like to mention this: comparing sequentially, quarter to quarter, is not always the right way to go, because, you know, you can't really compare the quarters. In certain quarters, once we move into summer and there starts to be growth in the volumes, it has an impact on the margins, and there's some leveraging of scale as well in those perspectives. Therefore, I prefer when we compare, you know, quarter four to quarter four. So, so, you know, there's a number of these factors. So gross margins are growing nicely. Do we want them to grow even quicker? Yes, we would. But like I said in the past, you know, there's a lot of things that we are working on, which are starting to bear fruit, also on variable costs, that I believe will ensure that over time our margins grow nicely, into the future. Could you... So we are not looking at comparing quarter on a sequential basis, but even on a Y-over-Y basis, could you just clarify what you said? Is the proportion of new bottles significantly higher in Q4 this year versus Q4 last year because of the strong demand? Is that what you're indicating? Yeah. Versus last quarter, yes, the new bottle injection was a bit higher because of the volume growth as well. So when we had... If you remember last quarter, it was quite a bad quarter. We had a decline, so effectively we're not pushing so much MBI into the market. Yeah. ... Given that your response to the previous question was also indicating that you are hopeful of strong volume growth for Q1, are you better prepared from this quarter perspective, from a Q1 perspective, as to the proportion of old returnable bottles that you have in the system? So, you know, we've put a lot of things in place, in terms of, bottle returns. You know, at the beginning of the year, we've introduced a new scheme. We've also increased the pricing of old bottles in the market. We've standardized pricing in the market as well, and we've also run some incentive schemes. So we feel that, you know, new bottle injection should be much better managed this year to the issues that we had last year. So we are hopeful that some of these initiatives will be coming through. And of course, again, like I mentioned, you know, with strong volume growth, the bottle injection does go higher, but, that's fine. I mean, it's great to see the volume growth coming through. So, you know, that growth in revenue and pricing will compensate for some of that new bottle injection. Got it. Thanks. Thank you. The next question is from the line of Jay Doshi from Kotak. Please go ahead. Hi, thanks for the opportunity. My question is for Vivek. Vivek, could you give us some kind of guidance of how we should think about the roadmap or, you know, on margin improvement? And internally, do you have a target of EBITDA margin, you know, in next 1 year or 2 year, or do you think of it on EBITDA per case basis? You know, the challenge that we are facing is that, you know, you probably would have done 50 million cases in this quarter. If someone would have asked me 2 years back or even a 1 year back that, you know, when United Breweries does 50 million cases, what should be the margin? I wouldn't have expected it to be in single digits or, like, 6%, 7%. So we are struggling to understand. I think it is a broader sort of struggle that I think most of us face, is that, is there a structural problem in profitability or, you know, this is a temporary issue that we are not able to appreciate better? So if you could give us some guidance, a band, a margin band, it will be of great help. Yeah, so thanks, Jay, for asking question. Look, I first of all, I don't think your expectations are wrong. I would say a few things. I think, first of all, I would really say that we have to be a little bit more patient on margin, because we are performing but also transforming as a company. I think we were mostly a single brand company, you know, a few years back. We are trying to be a multi-brand portfolio company, bringing innovation, bringing the right thing from the consumer perspective. We are in a very competitive environment as well. We have very good international competitors who are there. We have local players in many states, you know, who are expanding their capacities and doing the brewery part of it. Third is we are investing in organization and our capabilities, both in terms of... You know, I would say we have a largest brewery network, but many of our breweries are also old brewery, very practically, and they need repair, maintenance, so that we can maintain higher standard of quality. We are revisiting our recipes in some of the cases to make it even better for consumer experience, because, you know, at times, the thing we need to improve the quality of malt we use, the quality of ingredients we are using in the part of it. So we are absolutely focused on sequential margin improvement, but we are not, I'm not going to shy away to invest in actually growing the category and growing the revenue growth. So our focus, as Rado said, that we, we are looking for high single digit, you know, closer to double-digit revenue growth. Also, at the same time, please understand that this year has been difficult in the beginning, because of the quarter four of the last year, the quarter one of this year, most of the states did not give the pricing due to elections. So, you know, usually where we used to get a pricing and, you know, there is all delayed post-election. So there is a lot of volatility and uncertainty based on the regulatory environment, which is there right now. There are a few issues, for example, you know, and which are important, I'm sorry, I'm giving this commentary. For example, Telangana, for example, the government has not paid at least up almost, you know, INR 700 crore-INR 800 crore for last five months, and there is a big issue there. And, you know, so there are other issues also we are dealing with. Having said that, I think, the, there is a, there is a plan to sequentially improve margins, but our focus is on to guide categories, to fix our portfolio, to get us, you know, in the next one or two years, ready for, let's say, 2028, 2029, 2030, both in terms of having real good access to supply chain, you know, supplies of our portfolio from our breweries, investing in repair and maintenance in the breweries, ensuring that if we have to drive the category growth and in, you know, insert new bottles, we will do it, and also working with the suppliers on better negotiation. So I think we have a comprehensive plan. I would say that there will be a sequential improvement in margins, and structural improvement. But sitting here today, I don't see a structural issue if we have to deliver more margins, but I definitely see an issue that how do we grow if we don't invest in the right portfolio, if we don't prepare ourselves for future? I think that is our priority right now. I don't know, Rado, if you want to add any perspective with the... You know, because I gave a very general answer. I'm sure this is what you are not looking for. So if you have any- No, no. Thank you so much, for, you know, overall overview. Just if I may ask a follow-up question here. Is there anything, you know, that, you know, short term in nature that's hurting your profitability at gross margin? And, you know, when I ask this question, it's largely pertaining to the mix of glass bottles and, you know, the cost of glass bottles. So is there something that will change meaningfully in the next 3-6 months which, or should we expect any meaningful improvement there, or that is also something which is different? Yeah, I think one thing which is definitely having an impact is on the state mix, on the margins. I think you guys, you know that there are some states which are more profitable than the others. I think we are trying to win more broadly and, you know, going through, making sure that we are fully compliant and we are going through, a journey which is there. I think in some cases, you know, we continue to work with regulatory to ensure we, we give them a broader picture. For example, you know, in, you see recently Assam took a massive duty hike on, on beer. You know, and, and the prices have also gone up in the summers to do that. I just picked up one of the examples. So I think that, that is one area. I think the second is, of course, we really need to do a better job of, procurement and our processes, where we are, investing a lot to prepare ourself for, the volatility, which is, which we saw, you know, couple of years back. Sure. Thank you. Thank you. The next question is from the line of Chirag Jain from Yogya Capital. Please go ahead. Thanks for the opportunity, sir. My questions majorly have been answered. I have just one bookkeeping question. On the previous CEO remuneration, so that seems to be on the higher side for one month. So what... Can you give us some light on that? Rado, I don't know. I didn't understand the question. Rishi Pardal was paid INR 14 crore when he left the company for FY 2024. The current CEO's remuneration is not for the full year as well. No. So I was commenting on the previous CEO. What about it? Who, whose name is Rishi Pardal. Yes. He was paid INR 14 crore for working only one month for FY 2024, for the April month. That's mentioned in the related-party transaction of yours. So that was paid previously for the whole year of FY 2023, so that's why I was asking. I need to look into that. I can get back to you on that one. I'm not with that right now. Okay, no issues. Thanks. I will get back in with you. Thank you. The next question is from the line of Karan Taurani from Elara Capital. Please go ahead. Hi, thanks for taking my question. You know, the question was basically in terms of, you know, the brand, you know, in terms of Heineken and the overall portfolio that you have. So currently, as you are sort of talking of transformation, you're talking of volume growth, and there's been a margin squeeze and lot of investments would have also gone in terms of marketing and branding and, you know, PTL kind of spends. So how do you see the situation turning around over the next, you know, 4-6 quarters? Can we move, from a push brand, to a pull brand situation? If that does come in, I mean, you know, do we have a situation wherein if the investments kind of taper down or come down, the volume growth still will remain to be strong? What's your take on that? Yeah. See, I would say that, you know, if you really look at global benchmarking, you know, where the categories have grown steadily and significantly, actually, advertising and promotion spends are much higher than what we spend, at least in UBL, in, in India. So I think, And it becomes even more complicated because, you know, we are a, we are a dark category. It is a state by state, to really bring together. I would say, but despite that, the focus, exactly as you said, is to really understand the consumer insights, the barriers, demand spaces, and really, really be very focused so that we are meeting, you know, different consumer needs. So I think also the way the category today is structured, it is a combination of pull and push. The push in terms of availability, because if you know, many of the business is done by corporations, and if state corporations are not pushing the stock, you know, whatever consumer say is not going to help to do that. I give you an example of Telangana, where you know, there is a reduction in the shifts due to election. So whatever gets produced is getting sold in the market. Whoever produces it is getting sold in the market right now. Having said that, our focus is on having a very strong portfolio, which is very meaningful for consumers. We are seeing significant positive response when we do those things. So, for example, Heineken Silver Draft in Mumbai, significant repeat rates, very, very good equity. We measure our brand power score for each of the brands, and we actually make interventions. So for example, this year you guys would have seen that we have again come back on IPL, which is a big property for Kingfisher. And we are, we are seeing, you know, very, very good response in the market where we are able to activate. So I think, you know, we will continuously do that, but hopefully, as we make these investments, our mix will go up, our, our, our top line should compensate for some of these investments. And then also there is a, you know, there is also an element of once the capabilities get built up, you know, you get the leverage of scale, in, in certain markets. So, so I think it is going to be a longer term journey. I don't think it's two or three years. I think the way the beer category needs, the biggest driver of the change of the category is going to be regulations. You know, let's be honest about it, because beer is not affordable today. You know, the taxation in many markets is much higher. It is not available beyond 95,000 stores, unlike other countries where it is need to be available. In some cases, you know, it is actually very, very, very controlled on pricing as well, which limits actually the premiumization opportunity to do that. So I think a lot of success in the, on your question, will depend on how we are able to work with the associations and our influence the regulators to actually, you know, bring some meaningful change for the category, which actually help us in a better environment. I think it's a combination of our effort, but also regulatory changes. Right. Obviously, that was the category part. Now, specifically to UB, right? I mean, the kind of growth we've seen in the premium portfolio is unheard of. I don't think we've seen this kind of growth over the last, I think, 3, 4 years, or maybe it's historical nature in terms of volume growth. So on that question, so currently you are spending aggressively, you know, you are kind of, you know, going there and you're trying to grow above market average, gain market share. So tomorrow, if at all, say, you know, 2 years down the line, you pull back your spends, and, you know, try to be more in terms of, you know, focus on efficiency and profitability, would you be able to sustain that market share? I mean, it's a question like, you know, in the case of Bira, I mean, obviously Bira is not comparable, but for... We saw that in the case of Bira, there was aggressive push, they gained market share, but the moment they pulled back, they've seen, you know, concerns on volume. So not a comparable case, but just, something you can draw over here in terms of UB. Yeah, I you know, I think it's a great question. Thank you for asking. I would say there are two variables which will change in years. One is the local production of many of these premium lines. As I mentioned that today, we don't have a full footprint of our premium brands everywhere in every brewery. If I have to give a number, it is actually less than 30%-35% where we have a, you know, state brand footprint. So we actually do a lot of interstate transfers to do that. Our at, our focus is on to get that number up significantly over the next 2-3 years, which definitely will improve in our margins as well, because that will give us an ability to invest locally versus spending a lot of money on paying import duties and, you know, transportation. So that is one big, big area of focus. Second is any expansion we are doing, we are, we are very focused on fundamentals. We are not rushing through it. So we are not in a, in a mode where we are saying, "Okay, let's just put this product in a state and forget about it." We are actually incubating many of these innovations, like Heineken Silver Draft is a great example. Even getting great response, we have not expanded it beyond Mumbai, Maharashtra, yet. And the, and the reason is because we really are learning, you know, what is working, what investment we can actually optimize. There's a lot of work happening on, you know, defining the key business drivers. So, as I said, our, our goal is to grow the, the top line, but also sequentially increase margins. So we are working our internal plan to offset, you know, some of the expenses which are increasing with some structural changes, being more clear. And then scale also gives me benefit, both in terms of production as well as, marketing spend, from a throughput per store perspective. So... And we have this model, being a part of global company, I think there are a lot of good models, you know, from other markets like Brazil, China, where we know, where Heineken is doing extremely well. And we know that, you know, what works from a long-term sustainable growth, and I think we are on that journey. So absolutely, I think, that is our focus area. Thank you. That's been my time. Thank you. The next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi, thanks for the opportunity. Vik, if I compare our numbers versus FY 2019, which was in between, we had 2-3 years of COVID impact and poor summer. For 5% additional growth on volume for FY 2024, we have lost roughly 40% of EBITDA that we had posted in FY 2019. So, and then you called out that many growth factors we are underinvested. Perhaps that's how it sounded today. And we are kind of investing all those factors, and we are correcting to deliver growth. So should we assume that from here on, this is the new baseline margin? Because if we kind of focus on profitability, we'll have to sacrifice on growth. In our internal planning, that's how we are focusing on. You know, as Radovan said, our aspirations are high, but we are also very realistic, because since 2019, you know, the one fundamental change is the return bottom. I think the numbers have significantly dropped from that perspective. We also know the state mix has changed. You know, the states, some of these states have not taken pricing for many years. You know, like, Telangana is a good example. For 2.5-3 years, you know, we are the largest player in Telangana, and there has not been a pricing there. So I think a lot of factors have changed and, you know, as I said, you know, we consistently look at how do we grow? I can only tell you the, you know, our incentives or our performance is measured on both top-line growth and bottom-line growth, and margin expansion. So where it is not that we are just sacrificing one over the other, but we are very clear that the priority number one is to drive category growth and volume growth and fix our fundamentals. And if it means that in short to medium term, the margin expansion will be slower, so be it. But that does not stop us to work the gap closure idea to fill those gaps on the margin. ... Perfect. Second, Vivek, you also called out some pressure on receivables. So is it only pertaining to one state, or is it, like, because election season, we have seen state finances also get stressed? So any other pressure points also building up? I think the Telangana is the big one. I think it is the reason I'm saying it's very public, and, you know, we are engaging with the government significantly. It is, it, it is a big one, and I think, there are, there are some delays in some of the other states, but which we think, you know, is, is we have to wait and watch. It's more based on election. But, Radovan can help further. I think Telangana is a big one, right, Radovan? Yeah, I think that Telangana is the main impact in terms of what we are talking about, yeah. I think I'll just to close the discussion on those margins, I know there's a lot of... We always have a lot of discussions on those, but I think Vivek has rounded it off very well. In terms of, you know, managing the quality and the quantity of our earnings. You know, we very much, we are very much behind category growth and premiumization of the category. That is key for us. And of course, we want and, and, and quality and quantity of earnings. But I think we need to be a little bit more patient because, you know, we will see accretion of margins as, you know, as we grow scale, as some of these initiatives that we are doing are coming through, it will come. But it's a step, it's a step, you know, two steps forward, one step back sometimes. Because, you know, in this regulatory environment, the pricing can sometimes be a little bit tricky in terms of timing. You know, some of the pricing is quite ad hoc, and some of it is quite planned ahead. And therefore, you know, you see some of these movements, you know, either quarter-by-quarter or year-on-year on the margins. Just to finalize, you know, when you compare our margins to 2019, and Vivek also brought that into the discussion. When you look at it, post-COVID and during COVID, there was a lot of disruption, and I spoke about this in the past. Also, in the bottle, total bottle infrastructure and collectibility. But also, there was a significant spike in inflation. You know, and when you look at our ability to take pricing over that period, from 2019 to 2024 now, let's say, you know, it hasn't been able to keep up with that big spike in the inflation. But we managed to do great pricing actually in 2023, so we've caught up a lot, and there seems to be a little bit of softening, as we said also in our press release, on inflation on some of these prices. But then when you see, you know, recently, again, aluminum prices have shot up. So there is still volatility, and that's why we say we speak about volatility. But that's basically summarizing. Slowly, there will be an increment increase in margins. That's what we will aim for. But you know, it's about category growth and premiumization that we wanna drive. Perfect. Just one follow-up on that Telangana deal. So, such delays happen on which pretext, and, in worst case scenario, by when we count it as we have to provide for that? Provide for? Sorry, what do you mean provide for that, for payment? Yeah, yeah, write off that it won't come. In fact, we have done it in the past. I remember, 4-5 years back, so... No, we do not believe at this point in time that that would be an issue. I mean, there is challenges of payments in Telangana, and the team and Vivek has been, you know, in many discussions with the state. And, you know, we are still seeing that these payments will be coming through, that's what we are banking on. So there's no write-offs planned at this stage at all. Sure. Thanks and all the best for our fiscal 25. Thanks. Thank you. The next question is from the line of Chinmay Gandre from Canara HSBC Life Insurance. Please go ahead. Thank you. I'll give you a question. So my question is basically, I wanted to understand the premium segment. So with respect to the contribution margins, so, I mean, is it right to assume that, basically premium should have a larger contribution margin versus the rest of the portfolio? But however, taking into consideration a couple of things like, the thing you mentioned on the interstate, where only like 30%-35% have a manufacturing footprint, and also the other thing, being that maybe they require newer bottles, the premium category, then the margins on the contribution side for the category, for the premium category will be lower than the broader portfolio? Radovan, you want to talk on this? Unfortunately, I didn't... Robin, did you hear the q-? No. Can you please repeat the question? I didn't hear it. I think I can help. The question is that because in the premium, you do more new bottle injection, and you are doing more interstate exports, are the margins lower than the mainstream, or what are the plans to improve those margins? That was the question. Right. So yes, yes, there will be more bottle, new bottle injection in premium with the 21% growth, right? So that is happening. And of course, that impacts our margins, you know. If you look at interstate sales for premium, that, that is margin dilutive. But when you look within the state at premium, then of course the, you know, the profitability is better on premium. So that's why, what Vivek was saying as well, important for us to work on our footprint so that we can do local for local, if I can call it that. You know, that if we can produce premium locally, our margins definitely improve a lot, you know, but there will, there will be pressure but on the premium as it grows, because of new bottle injection. But that doesn't mean that there will be a margin dilution per se, if it's local for local. Second question is on barley prices. This season, average sourcing prices would be similar or lower versus last year? Unfortunately, we're not having very good sound here, so I didn't hear that. The question is on barley pricing. The average sourcing prices for us for the current, for the coming season would be similar or lower versus last year? Oh, barley prices, yes. So, yeah, so the barley prices, the barley crop is looking quite good actually this year for us. So that's really nice news. You know, the crop is coming in quite nicely, and there is softening on pricing as well versus last year. So overall, it's looking good. We did import some barley as well, but not to a big extent. But we feel that, you know, this should be good for margins going forward as well, in terms of the barley prices. Okay, thank you. Thank you. A reminder to all participants, you may press star and one to ask question. I repeat, you may press star and one to ask question. The next question is from the line of Vishal Punmiya from YES Securities. Please go ahead. Yeah, thank you. Firstly, on the quarter, there is a higher overheads on a year-on-year basis, almost 22% jump. What would be the key drivers for that? I mean, in the overhead costs, total costs went up. We invested more behind the brands, and so commercial spend is up. Trade costs went up as well, so those were the really big ones. And then, you know, there's some inflation coming through as well. We've also been investing more behind the organization. So we are strengthening, you know, the commercial organization quite a lot in terms of, you know, consumer insights. We have a new CMI person in place, we are also strengthening some of the, you know, feet on the street. So there is a little bit of increase also in the, you know, in the organizational part as well. Oh, understood. And secondly, in terms of FY 2024 volumes, if you could help us understand how the industry has done in terms of achieved volumes and what has been the growth for the industry? Vivek, you wanna touch on that? Yeah. You know, unfortunately, the data is so, it's not available actually, if you ask me, you know, when we talk about the industry, it's just estimations. So the real data you get in this industry is only on 30-35% business. But I do think based on the hot summers, based on the news in the category, what we are driving and some of our competitors are driving, I would say that the industry should be growing at, you know, at least closer to 6%-7%. You know, that's our estimation, that for 2024, that should be the category growth, net of the election impacts and all. But again, as I said, you know, a lot will depend on the regulations, because a lot of the pricing and some of these work did not happen in the first quarter because of elections. And it really depends on how the regulatory policies of the states come in. Because if some of these states, like, if they just take a duty hike on beer, then I don't know how much the category is going to react in some of those states. But yeah, I think 6%-7% would be a good, safe number to bet on. But I don't... You know, you can add your perspective there. And overall, overall, that we will be gaining shares, so your growth, volume growth would be, high single digits, 8%-9%, would that be right? I think that is our aim. I think, if you see the last three quarters, we have been growing 7%, 8% and 11%. Those are the numbers for the quarter. And of course, we'll see how much election disrupts this quarter, but... And we'll, we'll figure it out. And I think overall, our aim is to grow faster than the market. And I would say in the last quarter, we have actually gained All India market share. Based on our data, we have actually gained more than 100 basis points of market share. So what would be that market share number now? Would it be 51%-52%? I think, Robin, you can correct me, we are upward of north of 50, right? Well over 50. Per our estimates, we are indeed around 50% at the moment. 40, 50, yeah. Okay. So that number seems to have not improved, right? Based on the commentary that we have been getting at the end of every year, but still we have been gaining market share. So why is there a variance in the commentary and the numbers? Is it just because of the sampling that you are taking to calculate the volume market share? Yeah, as I said, that you know, you actually get the real data for 30%-35%, but my understanding is it is improving, because in the last two quarters, we were more in 48-49. And, it is actually going up, but, but we can go back and double check it. So the way we do it is, we estimate for the market where we don't get the data, and we get the data for the corporation market, where we actually have the data on this. Oh, okay, understood. Just lastly on the balance sheet, you did mention the receivables from Telangana, which are pending. So that kind of is reflecting in your receivables. But in terms of inventory, is it just because of the expected season in one, two? Is the inventory levels high? Yeah, I think because we are also preparing for the season and to manage the volume growth. And for us, it's in various states as well, because we don't have large... You know, we have spread out breweries and that also has an impact. But we think on inventories, we are quite manageable. So it is, you know, it is not a concern to us. Understood. Understood. Thank you, and that's it. Thank you. The next question is from the line of Harit Kapoor from Investec. Please go ahead. Yeah, good afternoon. So, you know, one question is on the capacity expansion part or, or investment in CapEx. And, you already mentioned that there is, some repair and things, you know, kind of work also that you're going to take up going forward. I assume there will be pockets in which you will also add line. So I just wanted to, you know, in the context of high volume growth over the last few years, just wanted to get your sense on, you know, what are the plans in terms of CapEx for, for actually, five year, year forward? Yeah. See, I think, you know, Harit, you know, in the last couple of calls, I said that probably in this call, we will talk about our strategic plan for future. We had a conversation. I thought the best would be that sometime in August, we actually will do a roadshow in one of our brewery and invite, you know, some of you to come. And actually, because that is the time where we can actually talk a little bit more about our plans. I can only say that as you see, we had very, very good traction from our global team. Our global CEO was in town for a week. Actually, he spent a full week in March end, and there was a media interview where he talked about the potential of India. We had a global CFO in town, you know, in February. Of course, we have a strong plan in India, and we're also very conscious on, like, what Rado said, two steps forward, one step backward with the regulatory environment and some of the other changes. But I think in August, when we do this roadshow, I think we'll be able to talk a bit more details in a very confidential manner, because a lot of it is sensitive information on what we are planning. But needless to say, we are preparing ourself for growth for years to come, which means that we will need capital investment to, to increase our capacities and produce premium locally and all of that. But we'll talk more in August. I think, you know, very shortly, we'll send the dates and the venue, so that, you know, you guys can RSVP on that. Fantastic. Fantastic. And just, you know, one last one on, you know, on the statewide kind of, you know, pull and push. Just wanted to get your sense on markets like, you know, Delhi, where, you know, the pressure has been there and now it's kind of let up. So would it be fair to assume that last 12, 18 months was not great in that state, and now, I mean, it's probably there in the base incrementally, you know, even that particular pain point will not be there. Similarly, for Haryana, it's been a while. So just these two northern states, whether, you know, we should at least the low base should kind of, you know, aid things going forward. That is my second question. Thanks. Yeah, I think we are still working through the Delhi plan. I think I don't know how low is low in Delhi, and we haven't seen any major policy change in Delhi because of whatever is going on. Even this year, they extended the policy which was going there. On top of that, you know, there has been delays in labeling and all of those things. So I think Delhi is still work in progress. We'll get more clarity on that. So I don't think that the base is set yet on Delhi. On Haryana, yes, as I said, that as we cycle through those changes, we should see more growth, and we'll have to see how the regulatory environment shape up there with all the changes in the government and the elections as well. But it's still work in progress, I would say. At this stage, I don't have a definite plan to tell you that I'm very confident and all. I think it's work in progress. Fair enough. That's it for me. Thank you. Thank you. As that was the last question for the day, I now hand the conference over to Mr. Harit Kapoor for closing comments. Yeah, thanks, Muskan. On behalf of Investec, we'd thank all the participants for joining the call, as well as thank the senior management of United Breweries for taking out time for this one. I'll now hand over to you know, to Rado and Vivek for closing comments. Thank you. Yeah, no, thanks, Harit, for organizing. And again, thank you everyone for asking great questions and really, you know, being patient with us. As I said, that our company is going through both performing and transforming, and we are not only focused on delivering this quarter, next quarter, but we are really focused on how do we grow our... How do we make sure we continue to grow this category and be the market leaders in, you know, next four years, five years? It's a very capital-intensive business, so you have to plan well in advance and make those choices. I also want to thank Rado again. I think he has been amazing in this journey over the last two years, and he'll also continue to support us in the region role. I will also send the invite for the August, and you'll get a chance to walk one of our brewery as well. Look forward to interacting then. Rado, anything to close? No, I would just like to, you know, say that it's been great being in Investec calls, some great questions, from all of you. I strongly believe in this business in India, and Heineken sees it as well. So I will, of course, be watching it from the region on our progress, and I'll be helping where I can. Yeah, just thank you to everyone for, you know, for participating in these calls. Thank you. On behalf of Investec Capital Services Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.