Ladies and gentlemen, good day and welcome to the Bajaj Consumer Care Q4 FY 2021 earnings conference call hosted by ICICI Securities 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 call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Manoj Menon from ICICI Securities. Thank you, and over to you, sir. Hi, everyone. Good morning, good afternoon, good evening, depending on which part of the world you are dialing in from. At ICICI, it is our absolute pleasure to host the management of Bajaj Consumer Care for the fourth FY 2021 results conference call. The company is represented by Mr. Jaideep Nandi, Managing Director. Mr. Dilip Kumar Maloo, Chief Financial Officer. Mr. Rohit Saraogi, AVP - Finance. Mr. Kushal Maheshwari, Head Treasury and IR. Before I pass on to the management, I just wanted to take 30 seconds to quickly comment about our views on Bajaj Consumer at I-Sec and what do we think for the company in the medium term. In our view, Bajaj Consumer is on an improving trajectory. It appears to be a clear case of a trapped value story, not really a value trap, which was probably perceived as in the last few years. We like the renewed thrust on product relaunches, new SKUs, thrust on digital, improving brand visibility, thrust on e-commerce. When I think about it as an analyst, there are multiple actions on sales trend, marketing trend, HR trend. Even in [investor] presentation, there are slides on Bajaj being a Great Place to Work, et cetera. Without further ado, over to Jaideep and team for the presentation and the Q&A. Good morning, everyone, and as Manoj said, good afternoon, good evening to others from the rest of the world. Firstly, thank you, Manoj, for hosting this call, and a warm welcome to all of you for attending our conference call. As Manoj said, I'm joined by Mr. Maloo, our CFO, Rohit Saraogi, our Assistant Vice President, Finance, Kushal, our Head of Treasury and Investor Relations, as well as some of my colleagues from our management committee. I hope all of you are, and your families are safe and taking due care and precaution amidst this second wave of the pandemic that is sweeping over India now. While we have got used to this idea of working from home in the last one year, this is the very first time we are attending this call from the comfort and safety of our homes. Still some first being attended to now. Let me take you through the quarter four performance and the full year highlights of the company before we open the house for questions. Q4 was a robust quarter, continuing its momentum from Q3, with improved economic growth and positivity around the COVID vaccination rollout for the country. Rural continued its growth momentum, whereas urban started showing signs of recovery. On the other hand, recent inflation in global commodity prices after a benign run in H1 has started posing pressure on margins across most industries, not only in consumer, but other industries as well. The company reported a sales turnover of INR 241.9 crores for the quarter, with a growth of 43.5% over the same quarter of the previous year, albeit on a lower base. This is very similar to what we had delivered in the quarter three. The EBITDA for the quarter was at INR 62.14 crores against INR 25 crores in quarter four last year, and the margin for the quarter was at 25.68%. The PAT for the company was at INR 53.9 crores against INR 24.5 crores against previous year's quarter four. The company has delivered a healthy growth of 9.8% top-line growth in FY 2021, and a PAT of INR 223.57 crores with a growth of 17.33% over the previous year. The Board of Directors of the company has proposed a final dividend of INR 4 per share, subject to approval by the shareholders. This is in back of an interim dividend of INR 6 per share declared in February this year. The gross margin of the company was at 60.6%, as against 63.46% sequentially in Q3 2021, and 67% in Q4 2019/2020. That is a year back. The drop in gross margin is led mainly by increase in prices of key raw materials and packing materials, and as we'll discuss, it is not only on LLP and RMO, but across the full range of raw materials and packing materials where the price increase has been seen, mainly for the first time. Also because of change in product mix, where we have higher sales for Bajaj Amla Hair Oil. Also we have taken a provision for our non-moving raw materials at the year-end as a conservative measure. Whatever non-moving raw materials and packing material inventory we had of sanitizers, as a prudent accounting practice, we have taken a provision for that as well. We have taken price increases in the months of February and March to the effect of about 2.5% overall, to partially offset the impact of inflation. While the full impact of the price increase is not yet seen, but will be visible in the coming quarters. We are closely monitoring the price trends of key raw materials as well as the competitive landscape. Going forward, we may take appropriate pricing decisions again and optimize sales promotion expenses if required to protect our margins. Advertising cost at this stage is also not being contemplated to be lowered at this stage. The hair oil category, as per Nielsen data, continued to recover with a value growth of 0.9% and a volume growth of 3% in January-February 2021. The volume growth continues to outweigh value growth as we still see the value for money brands leading the category growth. The rural markets continued their momentum with a 6% growth as per Nielsen, while urban markets have recovered sequentially with a decline of 3% in January-February. As stated in the last quarter, we still feel that the Nielsen numbers are a little under index for the hair oils market. As per Nielsen data, there has been a sequential increase in the market share for BCCL with a market share of 11.1% in January-February 2021, and February 2021, MAT market share of 10.4% in total hair oils, as against 10.1% of MAT March 2020, with both the ADHO as well as AHO, both our brands gaining share both in their respective categories as well as in total hair oils. During the year FY 2021, the company delivered a strong single-digit growth in hair oils as well, led by rural growth with sustained investments in driving distribution and reaching closer to the consumer. Urban retail initiatives, which have been started in select metros from Q3, have helped recover business in some metro cities while van sales continue to power the growth in rural markets. Currently, we are working to optimize our van routes to drive efficiency and effectiveness. Urban business grew at 24% in Q4, albeit on a subdued base, with retail leading the growth. Wholesale continues to lag as larger wholesalers in metro cities have yet to recover completely. Rural, on the other hand, continued its growth momentum with an over 60% growth in the quarter and 28% for the year. As per Nielsen, our products are now available in 42.6 lakh retail outlets as against 40 lakh retail outlets last year, showing an increase in distribution for the company. Clearly, the van initiatives to strengthen rural outreach combined with a better product assortment is helping build distribution for the company. Modern trade continued its recovery in Q4 sequentially with good traction seen around Republic Day and [Holi] events. We have dialed up our investments at various national schemes to increase visibility of our product, other brands as well, Zero Grey, Cool Almond Drops, Brahmi Amla, to have increased shelf space as well as assortment for companies. E-commerce continues to show good progress with a 4x growth during the quarter on the back of focused digital marketing and content optimization on e-commerce platforms. We have been aggressively participating in big events on Amazon, Flipkart, Grofers, et cetera, to increase our digital footprint. We are also revamping our e-commerce team as well, develop our e-commerce portfolio to fulfill our aspirations in this business. International business has grown by 10.2% for the year. The business still remains relatively small, and the focus of the company would be to remain profitable across various markets where we operate in. During the quarter, we continued to invest in our flagship ADHO brand across all mediums. The new commercial on TV is doing well on message communication and other key parameters of likeability, relevance, and purchase intent. Digital marketing for ADHO is being continuously dialed up and has been leveraged to reach out to new age consumers through various social media platforms such as YouTube, Facebook, Instagram, and this will continue to dial up further. In Q4, we also restaged Bajaj Amla Hair Oil as Bajaj Amla Aloe Vera Hair Oil with improved formulation, adding aloe vera with claims of softness and moisturization. The product and packaging has been innovated with superior efficacy and consumer study on softness and moisturization. The product is now available in more than 388,000 outlets across major amla markets. Currently, the brand is being supported by consumer offers and print media advertising. Bajaj Zero Grey Hair Oil, our digital-first brand, continues to gain consumer traction and good reviews from the market consumers with a steady increase in sales in Q4 as well. The brand is supported with social media campaign across platforms to create awareness, education, and trial. We'll continue to invest in our brands while strengthening our innovation capability as well as innovating our existing products while building our future portfolio in the mid to long term. Investments will continue to be scaled up in digital marketing while the investments in traditional media will continue as usual. The inflationary trend in key raw materials, LLP and RMO continued in this quarter. As I said, it has also been seen across all other categories like packing material costs due to inflation in polymers and paper. The overall inflation in the material cost in Q4 has been in high single digits. We expect in Q1 the trend not to soften. We continue to invest in and build our capability in terms of our team. This is a very important area that we feel for ourselves. While learning and engagement has been significantly dialed up in the year, it is with great pleasure that I want to inform that we have been awarded the Great Place to Work certificate for the third consecutive year, with steady improvements on various parameters. Dimensions like trust, credibility, pride, have also shown significant positive shift in the year. This will remain a key thrust area for the company going forward. We are working with a renowned consultant to redesign the organizational structure to make it future-ready and also support our business ambitions going forward. During this difficult times of COVID-19 pandemic resurge, the company continues to support its employees with various policies and initiatives. The situation on the ground is extremely fluid, and we are taking countermeasures to minimize impact of lockdown on our business by ensuring adequacy of stocks across factories, depots, distribution points, by coordinating and collaborating with our channel and business partners. In fact, on a daily basis, we are now in call with our field sales force to see where and how lockdowns are impacting and how we can mitigate the issues. At this stage, we will keep reacting to the market conditions tactically while maintaining our mid- to long-term aspirations for delivering sustainable growth through innovation, restaging our brands, improved execution excellence, which is an important area, investing in people, and augmenting infrastructure to strengthen capability, systems, processes, and control. With that, I end my opening remarks and open the session for questions. 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 your 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Manoj Menon from ICICI Securities. Please go ahead. Good evening, team. I thought I got a couple of clarifications that I'll ask you upfront. One of the important investor feedback has been on dividend over the last 12 months, which I'm pretty happy to see that there's a INR 10 dividend this year, INR 6 and INR 4. That's kind of somewhat addressed, I would say. The reason I'm using somewhat is because there is still a consensus of people that while this INR 10 dividend is good, there is probably still potential for it to be a much higher payout. Just wanted to understand the debates, processes, decision- Question, Manoj. Let me take that upfront. As you would have seen last year, there were lots of questions regarding what is happening to dividend, et cetera, from that [INR 11] to INR 14 high. We have gone down to INR 2. I had, I think multiple times explained as to why and how we had to take those corrective actions. While I'll not say anything about normalcy being resumed, et cetera, if you look at the last 10 years average, the dividend payout has been close to about INR 8, INR 8.5 per year. I mean, you can obviously look at the particular five years before last year as a specific block and see that the number is lower than that. Overall, if you look at the last 10 years, the average has been about INR 8, INR 9. Now, leaving that aside, the way you treat dividend is basically on the cash utilization, on the free cash that you have for the company. Going forward, while as a policy, while we'll always have a backend policy of somewhere about, let's say, tentatively about 1/3 of our dividend being issued, of our profit being issued as dividend. We will always look at what kind of investments you might be wanting to do in the mid to long term, even short, medium to long term, and hence also conserve cash accordingly. The various investments, I mean, I don't need to go through that, but I'll still go ahead with it. One is obviously M&A options. Sorry. Please go ahead. Hello. Manoj, am I audible? Sir. Am I audible? Yes. Continuing from where I was saying, basically the way you look at utilization of cash, one is obviously while we have last made the acquisition in 2013, we continue to keep actively looking for these options. I would still like to retain cash in the books to ensure that at least some part of the investment, if we have to look for an M&A, comes out of our own reserves itself. The other is investments in terms of looking at all the safety environment as well as in terms of general upkeep of our facilities in terms of factory as well as CapEx investments. We are now in the process of looking at our manufacturing footprint, looking at the overall manufacturing footprint just to strengthen the overall manufacturing or basics of the company itself. There, there'll be some investments which will be staggered over the next maybe five years, but that is also somewhere we would like to have cash reserves for. The third area is obviously investments in brands, et cetera. While this year, as you would be aware, and I'm sure all of you would be wanting to know what is happening as far as our launches, et cetera, are concerned, and I'll also respond to that. Some cash will also be required for building our brands, et cetera, which we will again stagger over the period of time. These three, four areas anyway we would like to conserve cash. If you look at this year, we have given about, let's say, INR 147 crores of dividend from a profit about INR 220 odd crores or so. About 2/3 of the profit has already been given as dividend. This already is somewhere the benchmark or maybe the plus minus where it will remain. While I cannot give a guidance on what the dividends can be of the future, but this is where the new normal would be or plus minus there, depending upon how each year the cash requirements are. That's very clear. Second, one trajectory change in terms of disclosures of someone, let's say, I've been tracking the company for 10 years. We have observed that usually market shares within the segment. Now it appears that the focus is actually on the market shares at an overall higher level. There appears to be a significant shift in the thought process itself. What I just want to understand is, of course, this thought process is fairly loud and clear in your presentation and the communication. If you could just talk a little bit more about how the internal HR policies, incentive structures, alignments, et cetera, is done. Are you still linking incentive to a segment market share or is everything, the denominator is the total market share? Very quickly, now that you have asked this question, very quickly, I'll just share with you the market shares as historically it was shown. For example, the market share as far as MAT March 2020, as far as ADHO in the LHO segment is concerned, light hair oil was about 60.8%. This is Nielsen data. January, February was peaked at about 63.7%, again, Nielsen data. The MAT February 2021 market share is at 62.1%, because it has been consistently from Q1 onwards, right up to Q3, has been going up. It has peaked at about 64%. It's now at 63.7% January-February, 62.5% is there. ADHO clearly has gained in the LHO segment and because all the actions that we have taken and seen the growth in the rural as far as ADHO is concerned, and that is what I was alluding to in my Q3 call as well. One of our most heartening fact is the kind of growth we have been seeing in ADHO itself. ADHO in the quarter grew by about 40%, both value and volume, in spite of the price increases because the larger packs have done well in ADHO. Obviously, as you can understand, the sachet and the INR 10 packs are not as strongly doing across category itself even for us. There has been really good growth as far as ADHO in this quarter. Not only in this quarter, overall for the year if you look at ADHO has now recovered sharply and is at 6% growth overall. Both value as well as volume. Pretty good performance. If you're talking of the incentive structure, yes, we have now redesigned our incentive structure. We are now, as you are aware, we have put up a trade marketing as well as a sales analytics team. A lot of work has been done tweaking in terms of looking at specific rather than give just on overall value and volume. Now it is based on lot of parameters that they need to deliver, both in terms of the total lines sold, in terms of the distribution coverage, in terms of product level sales, the targets that we have for our ADHO targets, we have amla, et cetera. There is a lot of tweaking which has been done for the incentive commission of the frontline sales forces as well. Very clear, sir. We've got a long queue. I have actually one more question, but I just want to leave the question and see if we could move on. We may address during the course of the call. Some thoughts on the international business ramp-up in the medium-term thought process would also be very helpful. Okay. Very quickly, international, as I had said, right, maybe five quarters back or four quarters back, is clearly an area which is, to me, a low-hanging fruit. It's a hanging fruit. I don't think it's a low-hanging fruit at this stage, but it's clearly an area which is there at the corner of my mind at all points of time. It's a question of when. It is definitely not a question of whether or not. It's always a question of when. My point is, we want to stabilize our India business a little more. Rather than stabilize, I'll use the word strengthen the India business a little more. Once we have done that, I think international is clearly one of the areas to focus on. On the midterm, international will be taken, but it's clear the thing is where we can make money. Some of the markets where traditionally you don't really make money will not be our focus area. In the places where we see there is a possibility of both top line and making a decent bottom line, those are the markets we'll be focusing on. Limited focused approach in international, maybe from next year onwards is what we should expect. Thank you, sir. Yeah. Raymond, I know you have to get back to the queue. Yes. Thank you. We take the next question from the line of Percy Panthaki from IIFL. Please go ahead. Hi, Jaideep. Congrats on the good set of numbers. I have two questions. My first question is on the price increases versus the cost inflation you have seen. Your gross margin is down 700 basis points YoY. If I don't look at YoY because of whatever high base, et cetera, or low base for gross margin, even if I look at Q4 FY 2019, that is two years ago, the gross margin is still down about 450 basis points. In context of this, your price increases in February and March have been about 2%, 2.5%. Just wanted to understand the thought process here. Are we saying that the gross margins that we have seen in FY 2019 and FY 2020 are clearly not repeatable going ahead and we are okay to take a sort of material hit to the gross margin and that will be the new normal? Is that what the thought process is? Okay. This is a nuanced question, so it will have some multiple layered answers, if that's okay with you, Percy. Sure. First and foremost, if you look at a very broad-based approach, yes, there might be some dilution on the percentage EBITDA, which has been continuously being alluding to because if we dial up our entire business and ADHO, and if our top line keeps growing, which cannot be only fueled by ADHO, and we start building our portfolio around, not all of them will have the kind of margins that ADHO has. A classic example. If I might just interrupt one minute just to clarify my question. My question was on gross margin more than the EBITDA margin. Gross margin. In this particular case, it's gross margin itself. Let me revise. The statement remains same, except you can replace EBITDA with gross margin. Sure. The kind of gross margins that you make in ADHO, so products like amla, et cetera, which is obviously a little more competitive, will not make it. The idea in that is always, as I said, and this is where EBITDA will come in, is that as long as ADHO gives us a positive EBITDA, which is what we will drive, and then percentage EBITDA will obviously keep climbing up as the business grows and the costs of the sales promotion advertising on the brand itself go down accordingly. As far as amla et cetera are concerned, that is the approach. If you are trying to build a portfolio over time, then the kind of gross margins that we have seen in ADHO will not be sustainable. If you look at across all FMCG companies, et cetera, we would be at one of the highest gross margins. This is all possible if you retain and remain only with one brand. Whether this brand alone can sustain itself, whether you would want to ring-fence this brand with other products et cetera, is a call that we have taken, and the answer to that we have taken is yes, we need to ring-fence. ADHO will remain a flagship brand for any time foreseeable future, but we would also want to put some more products in the portfolio. As I said, we would like to build these 100 crore brands over a period of three to five years, some more brands which may or may not have that kind of margins. Having said that, this particular quarter has been a little peculiar. Really speaking, taking this particular quarter out and seeing whether this is a long-term trend, I would like to think a no. If you think, while we are one of the first ones in the FMCG companies to come out with our results, I would expect the kind of inflation that we have seen in terms of raw material prices versus the price increases that I see in the marketplace. In the almond category, obviously, we are the only ones who have taken price increase. Across most categories, other than coconut, etcetera, there is no long broad-based price increases that we have seen from any of the hair oil sphere. I would like to assume that the kind of inflation that we have seen, most of the other companies would see a similar kind of a gross margin. While product assortment may be different, but they would also be seeing a similar pressure on their gross margins. Obviously, we'll monitor the competitive landscape. We have taken a price increase, definitely not as much as the raw material price increase has happened in this quarter. We are again contemplating and seeing how we want to see it, and maybe in this quarter, we might take a price increase. We have not yet decided, but maybe we will. We'll try and mitigate some of the effects, but we will not be passing on the complete impact of the price increases that we have seen in terms of raw material and packing material prices onto the marketplace, because reversal is not so easy in a FMCG kind of a setup. I can't increase the price and then go back and reduce the price after some time, possible but not something that is desirable. Hence, you might see some movement that has happened in Q4 as well as in Q1, but I think by Q2 etcetera, you should see normalizing of the gross margin. Understood, sir. Second question is on the top line itself. From a COVID point of view, out of the four quarters of FY 2021, Q4 has been the most normal. Actually, as we go into Q1 of FY 2022, etcetera, it is again deteriorating. Q4 is the best quarter if you look at the last three, four quarters, as well as the next couple of quarters. In this relatively sort of good quarter, although the YoY growth is very robust, on a two-year CAGR, we have basically grown at just around 1% or so. Just wanted to understand, you said your market shares are increasing. That means actually that the hair oil category on a two-year CAGR has not really seen any material growth. If that is the case, how do we think about modeling in our next year numbers? In the best quarter, if we have seen close to a 0% growth and things are deteriorating, is that really a big risk to the FY 2022 top line growth? Okay. Again, nuanced question. First and foremost, we have not set the market share growth. These are Nielsen data. They are under index, as I said, but these are what Nielsen is reporting. Second thing is, I think we'll have to look at the year that has gone by in a little more structured manner, so to say. For example, Q3, if you look at, two things happened in Q3 this year. One thing that happened in Q3 was that the Diwali sales in November, so the sale Abhyanga Snan and many other places where we have some spikes in Diwali happened in the month of October this year. That's why we have seen a 20% growth in October this year on, while last year October, December was also a renewal phase, but we had grown by 20% in Q3. That is one part. The other that happened was Q1, Q2, there was a lag of demand. I don't think there is enough fulfillment that had happened of both our distributors as well as our wholesalers, etcetera. Bit of pipelining also happened in Q3 this year. If you compare to Q3 to Q4, I think the sales have been pretty robust. If you look at 2019, eight quarters back, I think there were some specific incentives that we had taken. I think that time we had mentioned that also. There was a specific program that we had taken to boost our sales in the quarter itself. We had taken a huge spike in quarter four of 2019 itself, as well as there was all this Nomarks,et cetera, that we had also taken up in this, in which we had to take some of it back in Q1 of 2019-2020. Yeah, that's right, 2019-2020. There was some impact in Q4 itself. It might be a little more balanced if you were to not look at a specific quarter and compare, but maybe look at the trends for the overall period and see how the numbers are. This is how I would like to say this performance of this particular Q4. Q4 may not have been the best quarter as far as sales is concerned in this particular year. In my mind, Q3 was definitely the best quarter as far as sales. This is one side of it. The other is going forward as far as 2021, 2022 is concerned, obviously we have very, very robust plans as far as 2021, 2022 is concerned. All of it is being revisited and revised based on what we see. At this stage, if you say, how do we model for 2021, 2022, really speaking, it's a difficult question to answer because we don't know. We had seen pretty decent sales starting in the month of April. It was going very strong. In the last seven days we have been seeing sporadic disturbances in Madhya Pradesh, in Chhattisgarh, in Delhi now, in Rajasthan it started, Maharashtra which was as well as there, UP five cities, whether they'll go under lockdown or not, and every day we are revisiting. Really speaking, modeling based on what is going to be expected, et cetera, we don't know. We had originally planned to have double-digit growth, yes, but now we'll have to see how it works out. Got you, sir. Just a small sub-question. For Q4, do we have secondary sales growth higher than primary or roughly they are in line? No. Secondary sales growth, in fact, if you look at primary and secondary, both are actually similar. That's not the problem. There is again, in terms of base correction. Last year, for example, primary for us was very low, right? Secondary was still okay. Secondary growth as such is lower, but primary and secondary is same for this year. There is no buildup of inventory as of now. In fact, we have specifically ensured consciously that year-on-year we don't build up any inventory. Got you, sir. That's all from me. Thanks and all the best. Thank you, Percy. Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead. Yeah, thanks for the opportunity. I had two questions. trying to get employee costs back this year at around INR 83 crore. Yes. If you could give us some sense on the variable component in this and on a going forward basis, Jaideep, is it fair to assume this will be more or less in line with the top-line growth for 2020 and beyond? Secondly, you did mention about rural demand in your opening remarks. Given what has happened in the last few weeks, the second wave is spread across India unlike metro cities earlier. Currently what is happening on the rural side because that has been a big growth driver last year. Are we seeing some demand tapering off? Are we seeing deferment of purchases? Are we seeing downgrading? If you could give some color on these two points. Yeah. Okay. Let's look at the employee cost first. Now as far as employee costs are concerned, it will look at in two, three areas. One is in terms of I think the corrections we wanted to do as far as the management team is concerned, I think we have done most of it. There might be a few more corrections which are required, but most of the corrections have been done as far as the management team is concerned. We wanted to have it a little more robust team as such. On the other hand, we are now engaged with one of the leading consultants looking at entire reorganization of the structure, looking at manpower capability, cost-wise, the kind of output that they deliver. We are doing a complete benchmarking against all companies, et cetera. In the next two, three months, we might do some restructuring based on that as well, which will basically push our costs a little downward in terms of more of rationalization of cost. We would like to invest only in the areas where, as far as manpower is concerned, where we are seeing growth, et cetera. Now looking at the second part of your question, which is basically what were you doing about variable pay and fixed pay? Yes, we are now continuously dialing up the variable pay component of each employee. Grade-wise we are making it different. As you go senior right up to my level, the variable pay itself goes far higher based on the year's performance while the fixed pay remains much more muted. It is graded and for the senior management team, there is a far more emphasis on the performance of the company as far as the pay structure is concerned. This is what we are doing. Going forward, my thought would be that going forward we would like to even with inflation, that is basically increments that we'll keep rolling out year-on-year. I would like to see the employee cost as a trend going down on a continuous basis, mainly supported by the sales being higher in terms of percentage than the employee cost. That should be the direction that we want to take and that's a target that we have taken for itself and I think that is decently achievable. I don't know what will happen this year. We'll have to see how the year pans out, but I still am confident that we should be able to do it even in the year 2021, 2022. That is understood. This is as far as the employee cost part is concerned. As far as the rural markets are concerned, now frankly this is too early to say. As of now even in the beginning of April, rural continued to boom and has been doing well. Even today if you ask me exactly like last year where the lockdowns, et cetera happened, the impact of the lockdown is still lower in the rural. While we are hearing all these news, et cetera, about rural also being impacted, people are getting infected there. I think the rural markets are still pretty much open. We are still, I mean like yesterday when we were talking to all the SOs, like our sales head was talking to all the SOs and he was briefing me. Most of the rural markets still it's not struggling as far as whether it be in the van sales or whether the ISR going to the marketplace, nothing. We still don't see the impact. Yes we'll have to keep monitoring it. It It is very difficult to say what will happen 15 days later. Understood. Thanks, all the best. Thank you. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi, Jaideep. Thanks for the opportunity, and hope the team is keeping safe. Jaideep, you spoke about gross margin in the beginning in detail, and you mentioned about some write-off in sanitizer inventory. Would it be possible to share that number in quantum? What was that number? In terms of quantum, if you look at sanitizers, we have written off about a percentage point. It is not a write-off. We have just taken a provision on that. It's basically all the packing material, et cetera, that we had accumulated in the months of May and June because we were over-aggressive as far as sanitizer is concerned, and I think most companies were. That time, whatever we had left off, we had thought that it is prudent that we take a provision on the books in case later it gets reversed. Okay. Percentage point in terms of gross margin is because of that. As far as the sanitizer inventory write-off is concerned, also we have done a little bit of our HG, whatever balanced HG sale that we had, we had done a bulk deal of that sanitizer as well. That has also impacted a bit on the margin. That will be less than a percentage point. These are the two things that are happening. Sure. Second, now when we look back our history of last 10 years when we were pegging ourselves versus all the light hair oil companies, our pricing power was very dominant because we used to compare ourselves with all the relatively premium hair oil companies. Now, when we have redefined our target audience as a broader hair oil market, we have to compete with raw material like copra also and amla also, which are relatively low-priced products also. Does it mean that now that the kind of pricing power that we witnessed earlier to protect gross margin may not be the same? In that line, how would you like to play this whole gross margin and EBITDA margin dynamics? Because you have been vocal about that it has been relatively higher versus FMCG standards. You have opportunities and considering the long pipeline of product that you have talked about in the past, you would like to support. Where do we see the margin profile evolving because of all these factors from here on? Okay. Tejas, again, two parts to the answer. The first part is ADHO in isolation. ADHO in isolation, the only thing that we have been dialing up is continuously the premiumness of the brand. If you look at our entire approach this year, is basically to look at the new-gen customers and look at how ADHO can be priced at absolute the premium. Here, if you see, compared to the compatriots in the ADHO category, in the LHO and whatever almond category, et cetera, we are just keeping on pricing ourselves further and further up. Our premiumness on ADHO is going further and further up as we take price increases and as we go forward. Really speaking, ADHO is not where we would look at margin dilution at all. The way that we are looking at is in the portfolio play that we will do. There, overall, if you look at the margins, et cetera, obviously, because it will not have the kind of margins that ADHO has, it will have some reduction in gross margins, but that should end up at an overall gross margin, which is higher, as well as an EBITDA, which is much higher as an absolute term, and that is what we have been focusing. ADHO's premiumness will not be dialed down. It is in fact being dialed up. That's why I was saying our monies in terms of advertising and whatever brand building as far as ADHO is concerned, that is not going to be compromised. That's the last cost that we would like to cut. Sure. Any visibility or guidance on margins? As far as the full year quarter? No. As far as Q1 is concerned, I think the margin pressures will remain. As you are aware, there has been a continuous inflationary trend. Raw material has not really subsided. LLP has not subsided. RMO is at its all-time high. PET is high. Polymers are high as a result of that. PET is high. Paper is high. Corrugated carton, et cetera, high. Every cost is absolutely at its peak. We still don't see downward movement. As I said, we will be contemplating a price increase. We're also keeping a corner of the eye. We are also looking at what competition is doing and where they are taking their increase. Most likely we will see a price increase by us. Quarter one, we will see pressure. By FY 2021, 2022, I hope things will normalize and things will be back to normal levels. Sure. My question was exactly same. When you say normal level, it means 30%, it means 28%. Where would you like business to operate from here on considering the diversification agenda you have? If you look at, I would like to benchmark myself against most of the other top FMCG players and keep our EBITDA margins a little higher than that. As you see, if I were to, without naming names, I look at the EBITDA margins of 20%, 22%, and 23% of two of my competition and somebody who's much larger, we would like to keep it at about that 25% kind of an EBITDA margin going forward with launches of brands and with sales growth, et cetera. Obviously it comes with riders. With those kind of distinctions. As I said, my focus is to keep it at 25%+, hovering between 25%-28%, but more focus is to ensure that EBITDA as an absolute keep expanding. That will be the focus. That's where we will be focusing on. Keeping the EBITDA on a continuous basis for that whatever needs to be done. Yes. Very helpful. Last one, Nomarks is missing from discussion today. Any plan there? Okay. This is a subject we have kept on discussing in and on within the company. There are only two options as far as Nomarks is concerned. Either dial it up through what we had done about two years back, or basically look at an exit. At this stage, exit doesn't make too much of a sense because there's not too much of money to be made out of the brand. There are not too many takers of the brand, and we are not in a desperate hurry to exit. We have revamped one or two products in that category, like the creams, et cetera, but beyond that, there's not too much that we are focusing on Nomarks. We'll keep it as business as usual, not too much of focus as far as Nomarks itself is concerned. There are a lot of other products that we wanted to launch in the e-commerce pipeline and some of them in the GT channel itself. That's where we'll keep our focus on. This does not include Nomarks. Great. Thanks and all the best. Thank you. Thank you. The next question is from the line of Aditya Kondawar from JST Investments. Please go ahead. Hi, sir. Last quarter you said that in the next two, three quarters, we are going to see more of e-commerce and digital-only brands. I just wanted color on the kind of products or the product extensions that you're looking at. Number two, what is the e-commerce contribution to the total revenue? Thank you. E-commerce has now got up to about 3% of our turnover. It's continuously going up on a quarter-to-quarter basis. That's a very good sign because this is somewhere we would like to go to about 5% in as quick time as possible and maybe take it even beyond if we can. That's the aim, and I think e-commerce has been doing pretty well. ADHO itself has been doing very well on the e-commerce platform, as is Zero Grey, which has started showing now some traction, and so on and so forth. Really speaking, overall, we are well-placed. Very clear, our focus is on the B2C only, not so much on the B2B part of the e-commerce, because while it adds up to the numbers, it really is not e-commerce the way we would want to look at e-commerce, right? There is a qualitative part to it as well. This is e-commerce as such. As far as the launches are concerned, both e-commerce as well as our GT launches. The product extension, which is basically Almond Drops extensions, et cetera, those were more for the GT channel. E-commerce, which is the premium end, our branding work is over. The products are all ready. It's basically an opportune time. Because these are high-end portfolios, these are not essential. We would also monitor how the pandemic goes. We had originally said that it will be end Q2, stroke, beginning Q3 when we would like to launch this product. Our back end work continues, whether it be in terms of designing the products, naming them, branding them, getting the packing material, et cetera, all standardized. Everything is already there, where we make it, what kind of formulation, what kind of claims. Most of it is already the backend work continues without interruption. It's just that when we would launch, we will also tactically play it because not being essential, we would like to launch it when we think that is the best time to launch any product. Whether it is Q3, whether it is Q2 end, or whether it gets pushed by a few months is something that we will take call later, closer to the date rather than now. Sure. That helps. That's all. Thank you. Thank you. The next question is from Shirish Pardeshi from Centrum Capital. Please go ahead. Yeah. Hi, good afternoon, Jaideep and team. Hearty congratulations from my side. I just have a few questions. The first question is that on a FY 2020 where the full year growth is in the range of about 9.5%, 9.8% to be precise, could you please break up what is the price and the volume overall? If you look at the volume growth, again, because our assortments have quite a bit changed, the volume growths are quite different. Our value growth rate is 9.8% on basic sales, on sales of goods that is. While our volume growth is close to about 15%, 15. That has come up, and that is mainly because of two product categories. One is obviously the amla, which has got scaled up. The other is also sanitizers, which is at a lower price that we have sold. These two products actually helped grow the volume more than the value. As I said, Almond Drops had a 6% growth on both sides, value and volume. This is where it is. Okay. On a base of, say, 10% growth in FY 2021, it's just an observation what I came to know from the presentation. You have said that your amla penetration is roughly about 388,000, while your overall penetration is much larger, maybe 2.5x, 3x. I just have one question, that if you assume that your van operation and you are now trying to rationalize the van operation, and I think if there is a scale at which you are bringing this. Can we assume a more than 8%, 9% volume growth for FY 2022? I would have been very comfortable giving this answer maybe about 15 days back. Given the way the pandemic is going on, it's really a little futile to give. I can give you my planned numbers, and the answer to that is yes, you could have factored that in your plans, et cetera, and I think we had a pretty robust plan and pretty confident that we would be able to execute that. Given the way things are panning out, I still hope that we will be able to achieve that because we have put in enough buffers in our system to be able to manage those kind of numbers. I really don't know what is going to happen in May, June, et cetera. April seems to be still okay. April will still sail through, is what it looks like. May, June, July, I really don't know. We'll have to wait on this. I think every company will be impacted similarly. I think we have a pretty good network, and I think one of our advantages, because we are very focused in only hair oils in our category, et cetera. I think in times of pandemic, et cetera, we have been able to react a little better because the larger the assortment, I think going and reaching out has been a little difficult, more difficult. I'm not getting into this entire discussion between essential and non-essential. At least category-wise, it has been easier for us. We found it easier to bounce back in Q2 when the market reopened. We are still finding it pretty okay to be able to operate in the businesses that we are in, and the kind of initiatives that we have taken in vans, amla, ADHO in terms of rural growth, packs, et cetera, still doing well. We'll have to see how it goes. Yeah. Follow up on that, Jaideep, you already had an amla product, and you also added Aloe Vera Amla franchise to that. When I look at the market leader is trying to play the value game at the amla end of the pyramid. Do you think you have a merit? I'm counting on the distribution part and penetration, which is up north and middle India. Do you think amla will surprise or rather amla is surprising you in terms of growth rates and what you have estimated, that new product what you have launched will have a much more bigger scope and play in your revenue contribution? Other than the surprise part, everything, answer to your entire question is yes. I think there is an upside to amla. Will it contribute to a different significant portion? The answer to that is also yes. Are we surprised? I would say no, really no, because this is exactly what we had planned. Going forward, this year also, we have a pretty strong plan in amla, and I think we should be, COVID or no COVID, we should be able to execute and achieve those plans, et cetera. We had some more plans as far as going a little heavy on in terms of communication, et cetera. That we will see when and how to launch. We will phase it out based on how the market phases. As I said even last time, what we will have to remember is it is an INR 2,200 crore market dominated at one end by one player and the lower end by the other player. Really speaking, not too much else other than the variants of various products. If you see, that is exactly what the other two players are also doing. They are taking out variants to cut each other in those market places. We see there is enough and more space for us. If you want to have an aspiration of an INR 100 crore brand, which is about a 5% market share, that in itself given amla is a category where traditionally the markets where we have strong distribution, which is the Hindi-speaking belt. That is exactly nicely fitting to where we want to sell. Really speaking, I don't see that as too much of a difficult exercise. That's how the market is also reacting. Yes. Okay. If I'm not too much pressurizing on margin, I have one question on margin. No, please go ahead. The way I look at it, I think what you have done and in your presentation, again, I'm picking up the saliency for rigid packs like bottles has gone up significantly, and that has also reflected into the volume growth. Assume that the pandemic is elongated for a little longer time and consumer would upgrade from sachet small pack to the bottle. I think in your numbers, you have been trying to be super conservative in terms of margin performance on ADHO. That you have already taken a risk of taking a price increase, and if the material prices are going to go up, you can take another round of price increase. Tell me if I'm missing something in this. No, I don't think you are missing anything on that. There is no point over-promising something unless you are completely confident of what you are going to deliver. What I can visibly see is all I can say. Yes, you are absolutely right. We are clearly seeing the larger packs doing very well. Last year, all the larger packs, right from the newer launch of 160 ml, which we launched, the INR 99 pack in the eastern markets that we launched, right up to 200, 300, 500, as well as the 650 modern trade, all of them are showing good traction. The 3 ml, the 2.5 ml that is the sachet is not doing well. 19 ml is not doing well, the INR 10. Again, we have launched a INR 20, which was a gap last year. We have been continuously saying that the largest growing pack size, rupee category, and we are not present in that. That is showing good traction, and we are spending some sales promotion money to ensure that that pack is also catching on. I think we are well covered as far as ADHO on both sides. As far as material cost is concerned, yes, most likely we might take a price increase this quarter, is most likely. Let's see. Sooner the better. Yes, we'll mitigate some part of it. As you can see, the kind of unprecedented price increases that happened in raw material and packing material. This is the first time we are seeing an all-rounded price increase. Whether it is LLP or RMO, whether packing material, whether it is in terms of glass, PET, cardboard, CFC, everywhere the price increases are happening. It's not only in single. Most years, if you see, if LLP has gone down, RMO has remained stable, has gone down otherwise, et cetera. Now it is completely inflationary all across. It is very difficult to pass on the complete thing to the consumer, especially in this kind of a time. Okay. My last question is, you spent a lot of time giving us some hope that you have hired a consultant and you're looking for a management structure. If you can give some more understanding what exactly you're looking and what the management structure, is it more leaner or it is more compact or is it going to be more larger in terms of area of operation? No, we are not looking at the management structure. We are looking at the entire organization structure. Basically what we are trying to do is we are looking at mapping of our structure, both in terms of capability, our people, their job scope, relevance, and basically doing a map across the industry as well as what our aspirations are and what we need to do. Basically, obviously one of the objectives is to optimize, but it is also to try and make it future-ready. Where we see there is a fat or there is some fat to be skimmed, we will skim it, and where there is requirement to be dial-up, we will dial up. As far as the management structure is concerned, I don't think even as we see from the consultant what we have done versus what they are proposing, there is not too much of a difference. At the top you may not see too many changes over and above what we have done. Overall in the structure, you might have some restructuring. It's not that we'll let go of people or something, but yes, some structural changes will keep happening over a two, three-year period where we make it a little leaner, yes, and far more accountable as people are concerned. Accountability of people and jobs, salaries, all being commensurated with the kind of work they are doing. Designation, so that there is aspiration as well as equitability across the company. That is very, very important. That's what we are trying to drive at. Yeah. I completely agree your thought. In an analyst world, what it means essentially, are you or have you given a target to a consultant for a cost reduction or job optimization? That is a target given to our HR guy. The consultant's objective has to be to optimize this thing. The target of reduction of cost, et cetera, is more for the HR guy to do. Yes, there is this thing. More than just looking at what absolute number cost is to be reduced, we have a target for where we want to see the HR employee cost expenses to go. We are looking at how competition is operating, everybody else is at, and we want to benchmark ourselves. Being a smaller company, obviously the cost structures are a little higher, so that as sales gets adding up, I think the cost itself will get neutralized. Yes. Costs are expected to go down over time, both as a result of rationalization as well as in terms of increased sales, which should bring down the percentage of cost. There will be not too many additions to manpower for sure. Wonderful. Thank you, Jaideep. That was a wonderful commentary. All the best from my side. Yeah, thanks, Shirish. Thank you. The next question is from Dixit Doshi from White Stone Financial Advisors Private Limited. Please go ahead. Yeah, thanks for the opportunity. Sir, you mentioned about the new product launches in the later part of Q2 or Q3. I understand this is also other than the hair oil category. Basically, as I said, as far as e-commerce is concerned, we'll not only restrict ourselves to hair oil, but get into the newer formats in hair care as well as very adjacent personal care, if at all. We have been doing continuously on consumer research, consumer insighting. We have a consultant who has been working with us for the last three, four months on that, looking at branding, what works with the customer, et cetera. The only areas that we will get into is premium hair care, other formats, or very adjacent personal care format, nothing beyond that this stage. That will be predominantly for e-commerce market only, not the traditional market. No. As far as the hair care premium end is concerned, yes, absolute the premium end. Yes, that will be traditional only for the e-commerce market. For the personal care extensions that we are looking at, some of the extensions, yes, they will be for the general trade as well. That launches might be about Q4 actually. Okay. Just wanted to understand your thought process in other than the oil market. Wanted to understand that this will be kind of one of the products you will be trying or this will be new normal like every year or a couple of years we'll be adding two, three more products other than the oil segment? That's absolutely correct. That's what we would aspire to be, but we'll also keep reacting and continuously keep ourselves flexible. Aspiration-wise, that's what we would want to do. Develop an e-commerce portfolio which is a little more robust, which is a little multiple branded under maybe a single brand umbrella or two brand umbrella, different formats going to the customer so that there is enough choices for the customer, et cetera, which is under the e-commerce umbrella. As far as regular brands are concerned, traditional channel, as you put it, there may be one launch at a year or two launches based on how much we can absorb, both in terms of costs, profit margins, as well as the data. We'll have to keep a watch on that as well. Okay. That's it from my side. Thanks. Thank you. Thank you. The next question is from Naman Kumar, who's an individual investor. Please go ahead. Hello. Thank you for the opportunity. Just a feedback to the management on what I'm observing on the ground. I live in a small town in Himachal Pradesh. In the last few months I have been seeing the push of Bajaj Amla in the shops. Like even the small shops I could see Bajaj Amla Hair Oil on the shelf. Yeah, that's interesting to observe. Whatever initiatives you are taking, we are able to see on the ground. From question perspective, I'm not sure if you will have the answer. It's kind of an abstract question. Would we know what is the demography of our consumer in ADHO category? The reason I'm asking this because personal care products are sticky in nature, right? If someone has used it, they'll continue to use it for their life most of the time. Are we able to capture the younger generation who are becoming independent or who are starting their own new life? Are we able to capture them with our portfolio of ADHO? Yeah, that's a absolutely fantastic question. Why I say fantastic is exactly the question that we have been asking ourselves in the last one year, and our entire approach towards ADHO has also changed. While we look at ADHO being a flagship brand, et cetera, our consumer market research continuously keeps saying that brand is not offering anything new to us. There is nothing much else happening as far as the brand is concerned, and there is a risk of lapses, et cetera, and especially the new generation. If you track our entire approach towards digital marketing, looking at the new age, I touched upon it a bit in the presentation, but there's an elaborate work that the marketing team is doing exactly to try and touch base with the new-gen customers. If you are talking of premiumness, it also needs to be viewed as a premium brand. Not only a nice brand as far as packaging is concerned, sitting at the trade shop, but also the kind of user content that you are generating as far as the brand is concerned, influencers that they're talking about in Instagram, Twitter, it should be a happening brand. One of the great feedback, a lot of consumer work that we have been doing in the last one year. One of the consumer insight that we got last year was that while if you see a customer of, let's say, urban Bombay, maybe south Bombay, what they are saying about the product as far as aspiration, et cetera, is concerned is no more than that we see in a middle-class household in Indore or in Jaipur, because they have equal aspirations. It is not that they have a lesser aspiration because they are maybe not so much urban, so to say, as far as people are concerned. That is our approach. Clearly, it has made us thinking and our approach towards it is that ADHO needs to be seen as a very strong happening brand, much more connected to the youth, et cetera, and that's how our entire digital strategy, digital portfolio, where you have seen that we have dialed up heavily on digital spend this year is addressed to that. You're absolutely right, and this is exactly what we want to do so that the newer age customers are not lost for us. Okay. Makes sense. By any chance, is there a plan to change or modify the packaging a bit just to appeal to the younger generation? To give you an example, right, Bajaj Zero Grey, the packaging may appeal to the younger generation, but the target customer are people who are in their 30 and 40s. If you see ADHO packaging, it looks okay for people who are in 30, 40s. If you see from a younger generation perspective, it looks dull. Whereas Bajaj Zero Grey looks very appealing to a younger generation. Is there any plan in just to change the packaging just to target the younger generation? Again, a very interesting question, but unfortunately, that's a double-edged sword. Because whatever Bajaj Almond Drops stands for, you'll have to remember that it is still a INR 800 odd crore brand. The kind of clientele that it has across the lengths and breadth of India, that is not something that you so easily play with. That entire approach of the shape of the bottle, the glass of the bottle itself. There has been a lot of hue and cry that why can't we at least get the 200 ml or the larger packs, 200, 300 ml, 200 ml basically into PET bottle, et cetera. That appeal of the glass for the 50 ml, 100 ml, 15 ml, 100 ml, 200 ml is not something that we want to risk playing with. I completely appreciate your point, and that's why in terms of visual appeal, et cetera, we have done as much as possible and dial up that Almond Drops, et cetera, that you see in the bottle, and that itself has given good feedback this thing. Packaging itself, we don't want to do too much because there is too much of a existing clientele to play with. Yeah. No, I understand. One last question is, in the presentation, I see on one of the page with Bajaj Amla, there was ADHO soap as well. Is that a soap launch in the pipeline in the coming quarter? No. The one that you saw, this is an existing product. It is not for sale. It is a product typically given to the Maharashtra customers during Abhyanga Snan. We also use the product to give it to some of the other consumer offers that we package with this thing. At this moment, this is not a product which is for sale. Okay. Got it. Thank you. Yeah. Thanks. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Mr. Avi Mehta from Macquarie, you may go ahead with the question. Hi, am I audible now? Yes, sir. Yes, you are. Yeah. Hi, sir. Sir, I just had one question. You highlighted the demand trends are broadly similar as of now versus to the last lockdown with rural-urban divergence in terms of that. I wanted to kind of just get your thoughts on how is the situation different when it comes to competition, both organized and unorganized, and in terms of channel readiness, how the different channels behave. Thank you. If you talk between the first and the second lockdown, it is too early to say. I was saying that as of today, we don't see too much of a difference. Yes, there has been sporadic lockdowns that has impacted a bit of business in Madhya Pradesh and Chhattisgarh and a bit in Maharashtra where our business is not that high as compared to others. Rest of the country still keeps chugging along in spite of so much of hue and cry. That at no point of time saying that what will happen fortnight later, we really don't know. As of now, I'm keeping my fingers crossed. There are some learnings that we learned from last year's pandemic. Those we are now activating as in terms of stocking up our distributors, trying to ensure that they don't get stocked out if and when there is a lockdown, because clearly, distributors and wholesalers are much better placed to ensure that the supply pipeline remains while larger companies like us might find difficult. That is something that we will continue to keep working and I don't see too much of a change as far as that is concerned. Yeah. In terms of competition, sir, we think that is it going to be similar in your view or how would you see that or anything on that? I would assume they would have also learned from their last year's experience. As of today I don't see any competitor, whether be it in our field or it's a little larger FMCG space doing anything very differently. Everybody's trying to dial up their distribution, trying to ensure that material is available at the frontline retail shops as well as the wholesalers and distributors backing the pipeline. I mean, pipeline is all they are focusing in. Yeah. Sorry, I meant smaller players, just to clarify, but okay. Well, smaller players- There is not much difference. That's an interesting question because last year smaller players across categories we saw getting really impacted during the quarter one and they took real long time to bounce back. Not in our category for all other categories you saw them really struggling. They have found means and methods to come back and I would assume they would be a little better prepared than what they were last year. What the organized sector found so easy to basically acquire from the smaller players last year may not be that simple and easy in the categories that smaller players also operate. Fair enough. That is my assumption but really speaking this is just we don't know how the pandemic will play out. Sure. I appreciate that. Thank you very much, sir. That's all. Thank you. The next question is from the line of Aditya Malpani from Bryanston. Please go ahead. Yeah. Hi, sir. Thank you so much for the opportunity. Just one question. Rural is one market and one segment where we have seen very strong growth in the last couple of quarters and even last quarter we see 3% + growth. I just wanted to understand, is it possible to bifurcate that how much of that growth came from our van operation or maybe from the focus on distribution versus from the actual recovery or the strength of the rural market? Well, I would not like to exactly split the data and I will tell you why. Not because I don't want to share the data. It's more because you see, just to give you a rough-cut kind of numbers that we are getting through vans, let's say about 10% of our business comes through vans now, 10% and maybe at times it goes to above 12% of the number come through vans. This number has to be taken with a pinch of salt because there has been obviously a bit of cannibalization that already happens because existing wholesalers from the larger cities, existing subs that we had which now today are getting advantage because of the van sales they would've been doing some kind of a business, right? It is not that the entire thing would've been off if we had not had the van sales. Yes, there has been a bit of cannibalization that would have happened, but that is expected anyway because we are anyway servicing the same channels. If you look at the distribution numbers, clearly, I mean, our internal understanding because we still don't have everything automated as far as the van sales operations are concerned. I mean, we are installing all the softwares one by one, so it will take some time. There we clearly see our direct distribution numbers which used to be about 5.2% odd is now up to about 8%, 8.5% in terms of including the vans. Clearly we see distribution reach much stronger and that typical thumb rule that you take of 20% of indirect distribution should be direct. That numbers I think we are now comfortably doing. Clearly that is happening and going forward our aim is to this year look at urban distribution as well which is basically direct urban retail distribution. That was the focus for this year which we would think we would still continue to do. Yeah. Thank you, sir. Thank you very much. Okay. Thanks. Thank you. The next question is from the line of Rohan Samant from Multi-Act. Please go ahead. Yeah. Thanks. Hi, Jaideep. My question is more on the tax rate. If we look at the tax rate it's around 17%. When do we see it normalizing to around 25%? When does the tax benefit take effect for us? The MAT, this thing will continue for about another three, four years. Now, as you are aware, Dehradun got out in May of 2019. Paonta [Bala], Paonta Sahib factory, which is a HP factory, that got out in March of 2020. This year, that's why you see that other income has fallen this year. The only place where we see the MAT benefit being taken, the budgeting support is the Guwahati, which we should continue till about 2027. We are still good to go for another four, five years. Okay. For the next four, five years also, we should have an effective tax rate of similar 17%-18%? Yes, that's about right. Yeah. Oh, okay. Sure. Thanks. Thank you. The next question is from the line of Devanshu Sampat from Yes Securities. Please go ahead. Yeah. Hi, sir. Good afternoon. Am I audible? Yes, Devanshu, you are. Hi, sir. Two broad questions from my side on the overall strategy. Right. Many quarters ago, Mr. Sumit Malhotra had mentioned that it doesn't really make sense to play the hair oil only play, given that it gets difficult to differentiate and pricing itself cannot be the USP. There are incumbent players who have already a stronghold and position in multiple categories. It's amla, coconut, or cooling hair oil, and such. Basically, his view was that it'll be tough to break into these segments while maintaining profitability. Of course, the strategy right now is to double market share in the overall hair oil space by entering such categories. How has the thought changed your view on this? Except your last statement, all of it is correct. Yes, for a time when Bain was engaged, the thought was to take the market share to 20% in the hair oils category itself. I think my sense is I would rather tweak just that point itself, rather than say that the objective was to take it to 20% market share. I think the objective of the company is to double the revenue of the organization over that period of time, rather than double the market share. The moment you say double the revenue, then you are no longer restricted to only that hair oil segment. If you hear both these statements in unison, there obviously seems to be a bit of a conflict, right? On one side, what you rightly said, what Sumit had said, saying that some of these markets, it will be difficult to really be money spinners if you have to get into some of these categories, et cetera, which is correct. On the other side, if you say that you want to go to 20% market share, only ADHO cannot give you 20% market share. I would love to have that, but that's really impossible. Looks more like an aspiration rather than an expectation. Given that, we would like to have a more reasonable mix where we see that we can have profitable, maybe not kind of profitability of ADHO, but profitable brands that we can establish, reasonably decent size. We will play in the hair oils market. Amla is an area where we will play, and we see profitability there easily available. Not profitable in the sense that we make in ADHO, but positive EBITDA coming in from there. Being a decent size in terms of top line that is there. Maybe there are one or two hair oils as well in some premium hair oils and some niche and maybe some of the others, which I may not want to discuss at this stage. We are just in a contemplative stage of that. That we will play. Along with that, wherever we see there are rights to win for us, this is what we have been talking of. We would like to play. Whether it be that hair care or the adjacent personal care, again, looking at where we can make a positive EBITDA in three years' time and it's a sustainable EBITDA that we can do. With this put together should be the composite strategy of the company so that at least we can look at doubling our turnover over a reasonable period of time. Yeah. Okay. Taking a previous participant's question, there was on the non-hair oil product launches. From your perspective, what are the expectations in terms of how much they would contribute, and will this be the area that you're largely looking at for acquisitions? No. Acquisition, unfortunately, we cannot pick and choose. There are opportunities which will keep coming up, and we'll have to evaluate. The only way we would like to look at an opportunity is not whether that company can add value to us. The way I would like to look at an M&A opportunity is whether we can add value to that company, rather than whether that value just adds on to my top line and bottom line. Managing an acquired company also has its own nuances. If we see an opportunity which is at the right value, which obviously is an important point, then first thing we'll look at is whether we can add value to that company, whether our strength of distribution, our marketing skills, et cetera, we can take that company further. Only then we will take it. We might look at some acquisitions if they open up in some forays for us where we are not strong, but in areas where we want to go and very closely associated with us. In areas where we already have some kind of strength, not completely diverse from us. This is where we would like to keep our acquisition options for. Yeah. Okay. Last question, any update or development on the Worli property? The Worli property at this stage is all there. We will relook at it now that the COVID times are going on. We'll keep releasing it, and maybe in the coming quarters, we'll keep you updated as to where we are as far as that property is concerned. We have that aspiration to build that property, yes. When, how, et cetera, is something that we'd love to see. Okay, sir. Thank you very much, and wishing you all the very best. Thank you. Thank you. The next question is from the line of Sunil Jain from Nirmal Bang Securities. Please go ahead. Yeah. Congratulations as a good number. My question is with the longer period, what's the game plan for the company? Like you're already there for over full year in this year, and how you think the company can be in next, say, three to five year, how much share of the total revenue ADHO will have, and how much more product you can add up in that particular period. If you look at, I think I have been stating what our action plan is. One of the action plan is obviously continue to keep dialing up the premium-ness of ADHO, continue to get more new age customers into ADHO bracket, and dial up ADHO in places where we are not that strong itself, which includes apparently high market share for us. Even there are enough pockets and more too for us to be done. ADHO will be a complete 360 plan and we want to continue to focus on ADHO so that ADHO keeps having healthy growth. It's a no-brainer as far as we are concerned, the way we are structured. ADHO focus cannot be diluted, its premium-ness cannot be diluted, its pricing power cannot be diluted. This is something that we'll keep dialing up. Along with that, we will keep building the brands that we have been talking about. Some of the hair oils, which we want to grow to a little reasonable size, where we see potential for us to have some size as well as make a positive EBITDA and be in a comfortable zone. Those kind of products. As well as some premium hair oils or premium haircare range in the e-commerce that may not initially have large value basis, but as we keep adding more and more products into that portfolio, we want to create a brand over the next three to five years which is recognized as a brand coming out of Bajaj in the e-commerce portfolio. I would not like to say in the Mamaearth and the WOW because they really have taken off really well, that is the kind of direction where we would want to go as far as brand is concerned. Then also have some of the Almond Drops extensions or Bajaj extensions in some of the other haircare or personal care products where we think we have some rights to win. That is roughly the portfolio that we have. Yeah. Okay. Thank you, sir. Thanks. Thank you. The next question is from the line of Rohan Samant from Multi-Act. Please go ahead. Yeah. Thanks for the opportunity again. My question is mainly on the amla hair oil market. Can you kind of quantify what is the size of that market and how much of it would be unorganized? When we talk about amla hair oil and even gaining market share, would it be mainly from the unorganized players, or we would be kind of taking it away from the organized players? As I said, the market size, that's the easier part of the question. The market size is about INR 2,200 crore and that has been one of the highest growing markets. This year, if you look at this market grew about 6% in the year itself. That's a pretty good growth that we saw as far as the amla market is concerned, 6% in Q4. INR 2,200 crore, and as you can understand, these are Nielsen numbers, so these are on MRP. You have to discount it by 30% to get the net sales numbers. As we report the numbers, if you want to as an equal to equal, then discount about INR 600 crore. About INR 1,600 crore is the net sales value. Okay. Yeah. This is the size of the amla market. If you're looking at how much we want to gain share out of some of the regular competition, I think that's a very difficult question to answer. I don't think as a company you target where you want to take market share from. You basically position your product. Obviously, you have the competition in mind where you want to take it, but you don't actually state it upfront saying that, "Okay, this is where we want to take it." You position your product, you look at the markets you want to sell at, the kind of pricing and the promotion that you would want to place at, and the kind of brand aspiration that you have, where you would want to take it, et cetera. That, as we said, is where we would want to push this brand to about INR 100 crore net sales numbers. That is on the INR 1,600 crores kind of a number, which is about a 6% market share, which I think is pretty doable over a reasonable period of three years from now. Okay. How big could be the unorganized market within this or difficult to quantify? I don't have the numbers. I would assume. Abhishek, do you have some numbers if you can just type it out for me, unorganized sector? I'll just respond back to you. I would assume it is about 30%, but let me just take the numbers. No, I don't think we have the exact numbers for the unorganized. All I can tell you is that both the larger competitors have a range of products which come under this. In the last few years, you have seen a plethora of launches in different variants of this amla, et cetera. It's no longer the typical two dominant brands alone. They have also their variants, which have been doing well. Very interestingly, you might see, and if you were to look at the data, some of the variants are actually cutting into the main brand itself of some of the things. That's a very interesting analysis to see, because the larger brand is getting cannibalized by the smaller launches, which obviously if you focus on two categories of the same brand, there has to be a give or take somewhere. That's a very interesting observation, is all I can say. Yeah. Sure. Okay, thanks. Thank you very much. Yeah. That was the last question in queue. I would now like to hand the conference back to the management team for closing comments. Thank you everyone. Thanks for patiently hearing us talk. I think as all of you have rightly pointed out, I think the work for us, as well as I think for our country, is cut out for the year going forward. While we have all our plans in place, both in terms of the marketing work, the sales work, as well as in terms of lot of work has been happening on supply chain and manufacturing as well as the HR. I think all of it will have to be continuously kept on doing. In sales particularly, we need to remain flexible, and on a day-to-day as the ground situation keeps changing, we have to continue to keep changing our strategy as well. In this time, flexibility is the only key, and we have to keep learning from what we have learned in the previous year and try and implement it better. I think for the first few months now, I think execution will be of prime importance rather than of strategy, and that is what we will be focusing on. While strategy is all there in place, and we have a clear-cut thought as to what we want to do in 2021, 2022. Some of it, as I said, in what we wanted to do in Q2, et cetera, we might want to revisit later closer to the date if that is required. As of now, we are not changing any plans. We are going ahead with what we wanted to do, but we will keep revisiting on a 15-day, one-month basis, et cetera. By Q1 end, when we have the call, maybe we'll have better light. Maybe or maybe not, I don't know. We'll see how it is. As of now, April has started well. We'll see how the year goes. Thank you for all your interest. Thanks. Thank you very much. On behalf of ICICI Securities Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines. Thank you very much. Thank you. Thanks.