Ladies and gentlemen, good day, and welcome to Bajaj Consumer Q1 FY 2024 Results Conference Call, hosted by ICICI Securities. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Karan Bhuwania from ICICI Securities. Thank you, and over to you, sir. Thank you. Good morning, everyone. It's our pleasure at ICICI to host Q1 FY 2024 earnings call for Bajaj Consumer Care. From the management today, we have Mr. Jaideep Nandi, Managing Director, Mr. Dilip Kumar Maloo, CFO, and Mr. Richard D'Souza, AVP, Finance. I would like to hand over the call to Mr. Jaideep Nandi for his opening remarks, and then we can open the queue for Q&A. Thank you. Thank you, Karan, for hosting this call. Good morning, everyone. I'm pleased that all of you have joined in. Let me take you through the performance of the company for quarter ended 30th June 2023, before we open the floor for questions. The overall hair oil market witnessed a recovery in both value and volume terms after 8 quarters, and reported a value growth of 4% nearly, and a volume growth of 3% in Q1, compared to the corresponding quarter of the previous year. The industry registered a growth of 7% in urban markets, as compared to 3.7% in Q4 2023. Rural markets, which have been depressed, was also flat this time, compared to decline of 5.6% witnessed in Q4 FY 2023. The market in Q1 saw a recovery across all categories of hair oils. The company reported a consolidated sales of INR 265.7 crores, resulting 8% value growth, with a slightly higher volume growth as compared to the corresponding quarter of the previous year. The hair oils portfolio of the company grew at 9% in the quarter and double-digit volume growth. Standalone sales grew by 6.5%, with a strong double-digit growth in international business. Consolidated gross margins for Q1 stood at 54.7%, similar to the corresponding quarter of the previous year. On a sequential basis, gross margins improved by 60 basis points, with softening of key raw material costs, mainly RMO. The EBITDA in Q1 FY 2024 stood at INR 49 crores, which is a 30% growth over the same period last year. The EBITDA was at 18.4%, which is an increase of 310 basis points against the same period last year. On a sequential basis, the EBITDA margin expanded by 100 basis points. PAT for the quarter registered a growth of 36.4% at INR 46.2 crores compared to the previous year. The general trade saw a 5% value growth on a sequential basis. It was flat on year-on-year basis after a long time recovering well. Urban continued to steer growth on back of wholesale and retail loyalty programs, which we have been running for the last seven, eight quarters. They continue to do well. Rural, on the other hand, saw recovery on a sequential basis, with specific initiatives to improve distribution through LUPs in the rural markets. The sales capability building initiatives implemented last year, as well as channel management programs, have started yielding good results. Modern trade continued its growth journey, well, registering a growth of 34%, supported by customer-specific activation plans. E-commerce business also delivered a robust growth of 55% in the quarter. Our first-ever online beauty fest in partnership with Flipkart to build equity around Almond Drops saw excellent results. The channel has also been instrumental in further scaling up of the NPD portfolio. International business has been scaling up well as planned and has registered a healthy growth of 42% over last year and 32% on a sequential basis. Robust performances were delivered by Middle East and Africa and the rest of the world regions. The appointment of new distributors led to strong growth in these markets. Local operations in Bangladesh is scaling up as planned, where NPD pipeline is being created to expand portfolio. ADHO grew by 9% in value terms, compared to the same period previous year, and 6% on a sequential basis. ADHO growth was well distributed across all packs. This is the second successive quarter with robust ADHO sales. ADHO was supported with strong media presence across quarters, with a HSMI so we have 17% versus 15% last year, supplemented with an increasingly higher digital presence. The TV and social media campaign with new ambassador, Kiara Advani, is being well received and is performing well across all brand metrics, matrices. We have also improved our visibility and continued with sustained investments on e-commerce platforms. Harnessing artificial intelligence to paint a new picture of Almond Drops nourishment for hair and skin, we launched our first AI creative, which is a pioneering work in the hair oil industry. The creative has been receiving extremely good response and appreciation amongst the younger consumers in the social media space. The community marketing initiative saw us reach INR 1.3 crore women across 348 online communities. The chatter on almond as an ingredient improved from 23% in March to 89% in June, with brand SOV moving from 49 to 67% in these communities. Influencer marketing with 70 key opinion leaders amongst dermatologists, nutritionists, and lifestyle influencers helped us reach out to INR 38 lakh people.... This resulted in approximately 78% uplift in glance views on Amazon and 7+ views on Quora. Almond Drops extensions scale up continues as planned, aided by digital and digital media and visibility spends. AD Serum was extended to select modern trade chains in the quarter and gain traction in this outreach. Two new OT-specific SKUs of Almond Drops soaps are planned to be launched in Q2. The AD extension portfolio is being further expanded with two launches that have happened in this month, which is AD Nourishing Body Lotion and AD Anti-Hair Fall Shampoo. This range, as we had mentioned earlier, will be continued to be expanded in the next next coming quarters as well. Consumer uptake and distribution buildup has been scaling up as per plans for coconut portfolio, resulting in market share gains. Bajaj 100% Pure, coconut was supported by TV media in Maharashtra and digital media in key HSM markets. NUPs are being rolled out in HSM to further increase distribution and trials. Amla portfolio grew by 16% on a sequential basis as HSM markets rebounded. Larger packs were supported with consumer offers, with material price stabilizing, small packs are being activated in select states to drive further distribution, penetration, and growth. Leveraging the Bajaj brand, the company launched its first offering in the personal care, non-hair oil, category under the Bajaj Ethnic range, with the Bajaj 100% Pure Henna this quarter. The product has higher lawsone content than leading national brands and is priced at parity with them. We'll see more launches under the Bajaj Ethnic range in the coming quarters. In Q1, we also launched 2 new variants under the Nomarks brand, directed towards blemish removal, which overlaps with core benefits and will be marketed based on trending ingredients known for their efficacy. In this case, it has been the pore clearing face serum based on salicylic acid and skin-clearing face serum based on niacinamide. The variants were launched in e-commerce, with initial listings happening on Amazon, Flipkart, and Nykaa. The ad spends for the quarter was at INR 44.2 crore, which is at similar levels on an absolute basis as compared to last year. We will continue to invest in ADHO and NPD portfolio, with an increasing focus on digital media to capture our new-age customers. The consumption prices for LLP were higher by 16% for the quarter as compared to the same period last year. There was a slight increase in LLP prices in April and May, compared to Q4 FY 2023, on account of refinery shutdown in Southeast Asia and increase in crude prices, with slight correction seen with this in June. RMO fatty continued to decline on a good harvest crop in mustard and overall correction in global edible prices. On key raw materials, the While glass prices were up by 10%, pet prices have decreased by 8%. Multiple initiatives were undertaken in both raw material and packing materials through a combination of optimization of specifications, alternate vendor development, development of alternate material to reduce material cost. These initiatives led to a saving of INR 2 crore in the quarter. Productivity improvements in operations was achieved through a combination of initiatives in lean, automation, and process improvements. Our commitment towards environment and sustainability and governance continue to, as we constantly strive to minimize our carbon footprint and greenhouse gas emissions by focusing on resource optimization and reduction of wastages. Major initiatives, including ETP water reuse, project execution in Bhatti, STP commissioning in Paonta Sahib, and sustenance of water conservation, led to reduction in water consumption by 15% in Bhatti and 68% in Paonta Sahib plant. Efficiency and productivity improvement initiatives in manufacturing led to reduced energy consumption, with 26% improvement in Bhatti and 9% in Paonta Sahib. Machine automation helped reduce laminate wastage by 35% in Bhatti and 40% in Paonta Sahib. Looking ahead, with the scale-up of our existing portfolio, new launches under the Bajaj Almond Drops extension and the Bajaj Ethnx range, along with strong execution at reverse channels, will be the leading factor for driving top-line growth and expansion of portfolio. Additionally, our continuing journey on cost optimization, automation, and digital transformation will continue to bring about improved efficiency in operations. With this, I end the opening remarks and open the sessions for questions. Thank you. Thank you very much. We now begin the question-and-answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and 1 to ask a question. The first question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead. Yeah, thanks, and congrats on a good set of numbers. My first question is on the modern trade and e-commerce. You have seen very high growth, so wanted to understand from a product mix perspective and your profitability from these two channels versus Kirana, how does this compare? Medium long term, do you see this as almost 20 to 25% of your business? Because most other consumer companies are already there. Where would you see this number as a percentage of India business? Thank you, Avnish. I think, fair question. In modern trade and e-commerce, both, as you are aware, we are under index for quite some time, and in the last, six, seven quarters, we have been continuously scaling up. Both the segments have. Quarter- on- quarter, we've been delivering really, really strong growths. At this stage, if you look at between the, both the channels put together, we are having a saliency about 17%, modern trade being a little higher than e-commerce. This we expect, as you rightly said, between 20 to 22% is clearly we see happening in the near short term. What has happened worked for us, very different things happening at modern trade and e-commerce. In E-commerce, I think, if you look at, we have had very, very strong joint business plans with all the big players like Amazon, Flipkart, Nykaa, et cetera. I think with very clear directionally what we want to do, both for Almond Drops as well as for the new products portfolio. The new products portfolio have actually been delivering pretty strong numbers as far as e-commerce is concerned. Profitability-wise, modern trade, I think, this is pretty well-known, modern trade is at times higher than general trade, at times, at similar levels, with general trade. Very rarely going below general trade. Modern trade is actually a pretty profitable business. E-commerce obviously is a little lower, but still decently profitable now that the scale-up has happened. Almond Drops still remains a very significant contribution as far as e-commerce is concerned. Some of the specific e-commerce stock modern trade SKUs that we had launched in Almond Drops, just to ensure that the interplay between general trade and modern trade is reduced, have worked extremely well, some of the larger packs. In fact, this is a nice position we are sitting in, where we are launching newer SKUs in Almond Drops, larger SKUs in Almond Drops in general trade, where today, actually, general trade has a larger SKU than 700 ml SKU has been launched in general trade, which is getting fantastic response. As we are aware, 650 ml was launched in Almond Drops just to ensure that it has a different SKU in modern trade and e-commerce, and now we have a 700. Both the SKUs are actually doing pretty well. In that sense, it's a win-win situation for us, where we have added new SKUs, and there is a much lesser conflict between the two channels. This is where we are. Thanks. My second question is on Coconut Hair Oil. copra, obviously, there has been a big deflation. You are a small player there. I see a lot of promotions from you, especially on modern trade, e-commerce. Would you see this deflation in copra as a very big opportunity from a 3-5 years perspective? The incremental approach, essentially in the existing distribution, trying to get some share, incremental kind of approach would be there, or you see that this could be a very big opportunity over the 3-5 years, even in the kirana. Modern trade, e-commerce is easy to do by one plus one offer, I want to understand from a kirana and profitability and market share, overall holistic perspective, longer term, where do you see Coconut Hair Oil business? As we have said, even in the last call, that Coconut actually is, it gives us a double-digit EBITDA. The way we have done our sourcing and the way we have been able to get the product out in the marketplace. Focus has always been to initially get into modern trade, e-commerce, get the product on the shelf, and then basically expanding to D2D. It is, you know, a little bit of a reverse flow. Modern trade, e-commerce actually started about 6 quarters back. The launch, the real national launch of Coconut happened for us, 4 quarters back, exactly this quarter last year. It has been scaling up well, it is some markets have been doing well. Now we have identified few specific markets where we feel that strategically we can do a lot more as far as Coconut is concerned. Initiatives are being taken there. That's how you see now TV ad as far as Coconut is concerned. We are getting a little aggressive as far as Coconut is concerned, because that's a large market, and we feel that there is enough and more to be placed. Our product, one of the key things that has been liked by the customers, that our product is seen to be extremely good in terms of quality, maybe better than some of the other, other players which are there in the marketplace. That has been a big USP, which has been liked by the consumers, and we think that there is a good potential. Pricing-wise, those will be more tactical. I mean, it will always be cyclical. Any commodity will be cyclical. Whether copra prices go down or go up, I think in the long term, it will just impact the EBITDAs for those particular quarters. On an overall basis, I think we have a long-term aspiration as far as this product line is concerned. Anyway, it fits in well with our entire oils portfolio, and it being the largest category, we saw that there is enough opportunity for us. In the last six quarters, results have been encouraging to be able to invest more in this brand. Sure, thanks. That's all for me. Thank you. Thank you. Next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. I just wanted to understand your gross margin movement. On a year-over-year basis, both LLP and vegetable oils would be down quite materially. But on a year-over-year basis, the gross margin is relatively flat. What is the reason for that, sir? Yeah, you're right, LLP has gone down. We have also looked at, actually, on a consumption price basis, LLP is higher by, that is what I also mentioned. LLP prices are higher by about 16%. It is RMO which has gone down. Compared to last year, this quarter LLP is higher by 16%, RMO is down by about close to 24. Is this just some vagaries of your stock that you're consuming high price stock or something? Or, I mean, is that true even on a spot basis that LLP is higher than last year? This is on consumption basis. In exporter, you will see our consumption prices for LLP will be lower, because anyway it will have a lag price. Purchase price versus purchase price versus consumption price, there will always be about a quarter lag. Right. Right. I mean, forgive my ignorance on this, but because LLP is a crude derivative, does it exactly move in line with crude? They have a very different demand, the supply drivers, and therefore, it doesn't always move in line with crude. Because, see, crude is down, like, 30 to 35% on a year-over-year basis, if I'm not mistaken. Would we, once your high stock inventory gets exhausted, should we be expecting a similar kind of decline in the consumption of your LLP prices also? Okay. Firstly, firstly, just to clear the first point, like, the movement of LLP prices went up last year, and the reduction happened in Q2. You will see that Q2, the LLP price is correcting as far as consumption is concerned. As far as LLP to crude ratios are concerned, if you look at a long-term, long-term graphs of five years, et cetera, yes, they do replicate, but obviously, LLP is not a direct derivative. It's a very small component of crude itself. Hence, based on the demand-supply equation of dynamics of the demand supply itself, there is a lot of variation of the LLP prices. It will not always, at least in the short term, reflect the crude prices, crude prices more. It can both be favorable as well as the unfavorable. In this stage, this stage it is decently favorable, so we should see some improvement in quarter two. would, would it be fair to say that quarter two on a year-over-year basis, your consumption price will be down, like, 20 to 25% times? No, I don't think, I don't think those kind of very high numbers would be looked at. We see that the trend... It will also be a function, because we are sitting just about 40 days into this quarter, and there is another 80 days in this quarter, or whatever, now 50 days in this quarter still left. I think the purchase price for LLP for the next 2 months also need to be looked at. It will be difficult to predict what it will be at the end of quarter at this stage. Sure, sure. Got it. Secondly, wanted to understand your product mix. ADHO has grown on a YOY basis, 9%, which is higher than the overall company growth rate, which means that ADHO's percentage contribution to the total sales has actually increased on a YOY basis. Just wanted to understand why this is happening, because the other products are very nascent, and they should be growing at a very fast clip at this point of time, and the ADHO contribution should be actually falling rather than increasing. If you look at on a Q-on-Q basis, the new products have grown by 23%. If you were to just trace back last 4 quarters. Hello? Hello? Hello. Hello, operator, can you hear me? Hello. Pasi, do you have a follow-up question? No, the management line, went blank for the last, one, one and a half minute. Sorry? The management's line went blank for the last 1, 1.5 minutes. We could not hear anything. Ah, so it is? Yeah. Okay, till what point did you hear? I had been speaking, so. The only thing I heard was that on a QOQ basis, it is up 23%. After that, I couldn't hear anything else. Basically, what I was telling you is about last quarter, this year. Last quarter, sorry, last year, this quarter, we had three launches that had happened. We had done the national launch of CNO in January, that had a high base. We also launched the Almond Drops Moisturising Soap in April, and we had a launch of the Coco Onion in March, which had that, which had that base as well. That's where last quarter, last year, this quarter, the bases were very high. On a sequential basis, if you look at, all the products have been tracking pretty well. I mean, CNO has been growing, Amla portfolio has grown, the smaller SKUs of Almond Serum, Argan, et cetera, have been also doing well. That track continues to grow. NPT- What is the ADHO percent contribution this quarter, sir? It is about 85.5, about close to 86%. Okay. Okay, sir. That's all from me. Thanks, sir. Those numbers have gone up. 93% used to be ADHO contribution. It went down to 85, now it's at 86. I mean, that trend will continue. I mean, a percentage here and there, we are not really worried. I mean, we also wanted ADHO itself to grow robustly. Right. Yeah. Okay, sir. Okay. Thank you. Thank you. Next question is from the line of Tejas Shah from Spark Capital Advisors. Please go ahead. Hi, thanks for the opportunity, and congrats on good set of numbers. You called out rural recovery in your comments this time. In past 4, 5 years, we have seen for FMCG sector, there has been many false starts on rural recovery. How do you see the rural recovery this time? How sustainable you feel this can be? Having said that, rural has recovered, I would still watch out on rural. I think, what you can see in urban, clear, robust growth across markets, et cetera. Rural, it has been sporadic. Some of the numbers that have come for us are also based on certain initiatives we take. Rural, I'll still say that it is still a watch-out situation. It's not a recovery that is very, very strong that has happened. Yes, it is. The major declines that we were seeing quarter- on- quarters seems to have flattened out. It is now tracking on base, but if you look at robust recovery, it is still not there. At least not that we can witness it immediately. Sure, sure. Second question pertains to gross margin, and then you partly answered Percy's question. Theoretically, most of the FMCG companies are now very optimistic about raw material or input scenario turning into tailwind in coming quarters. I believe the same could be true for us also. In that scenario, would you, how would you kind of, play that tailwind? Would you pass it on to consumer, or would you kind of, repair the margin damage that we have seen in last 1 or 2 years because of input inflation? You, you'll prioritize that over passing it on to consumer. That's, that's the question mark. We will look at it a little dynamically and dynamically, strategically and tactically, all three. In terms of dynamics, we'll be also observing what is happening in the competitive landscape and if we need to react at certain, certain stages. Strategically, I think, we see some opportunities in few SKUs for a increase of price, and maybe we'll look at some price increases in certain SKUs in ADHO. In the, in the second half of the year. May not be this quarter, but at least in the second half of the year. Thirdly, in terms of tactically, we might react in few strategic markets and look for a little stronger consumer offers in certain specific SKUs, where we feel that there is chance for both us to improve our distribution as well as improve consumer off-take as for us and create consideration for our brand. All three will be doing a mix. Overall result will be a result of what successes we see in each of these, but these are the three things we will do as far as looking at prices are concerned. Sure. It will also be a. Sorry, I'll just complete that. Yeah, yeah. It will also be a function of the demand scenario. I mean, not only competitive space, but also demand scenario. If you see demand scenario evening out, and we are able to pass on stronger price increases, we might even be looking at that. Yeah. Sure. Versus pre-COVID, when I looked at our margins, we are almost on trailing twelve-month basis also, we are at 50% of where we were 32.16% now on TTM basis. From that perspective, do you think that there'll be also some sort of priority to rebuild the margin profile also? Because there has been a very sizable erosion in our numbers, which have happened on profitability front. We look at both. I mean, in fact, if you look at maximizing profitability at certain point of time, I mean, at that point of time, the focus was only on ADHO, maximizing profitability, and some more investments possibly could have been done to make the business a little more robust. While we have embarked on that journey, the raw material prices have hit us. I do not see the 2015, 2019, the kind of benign scenario that was there as far as raw material was there to be replicated anytime soon. There will be a bit of... I don't think going back to those kind of numbers seems very realistic. Clearly, the focus would be on improving the margins anyway, and that's what we'll call out, and that's, that's the direction we have taken. At the same time, also improve our portfolio coverage. I mean, today we are at that 14 to 15% as far as ADHO is concerned, and we have called it out that we'll look at a 30%. As, as we have been continuously saying, it is more on absolute EBITDA numbers that we continue to look at, while we have not yet been able to surpass the numbers as far as EBITDA is concerned. I think directionally, we are going there, and we will be more focused on improving our overall EBITDA number with a top line, consistent top-line growth, rather than look at a percentage EBITDA as one of our key targets. Thanks, that's all. I'll, I'll come back and give. Thank you. Thank you. Thank you very much. A request to all the participants, please restrict 2 questions per participant. If time permit, please come back in the question queue for a follow-up question. Next question is from the line of Kaustubh Pawaskar from BMSPL Capital. Please go ahead. Yeah, hi. Good evening, everyone. ... Yes. Great, I have 2 questions. First is on the coconut oil market. Could you just share with us what's the total, total market size, and what rate is the market growing at? Who are the big players in the coconut oil market, which Bajaj will now be competing with? You know, in the next 3-5 years, where do you see Bajaj's market share in this coconut oil space? The coconut market is a pretty large market. In terms of Nielsen numbers, it's close to about INR 5,000 crore. That's on a MRP basis, so if you look at net sales, it's about INR 3,500 crore. It's a pretty substantial part of the hair oils market. The market has been growing decently well. It's about close to 40% sales, as I said. It's a bag growth of about 1.3%. The overall market actually de-grew, and in terms of Q1, it registered about a 5% growth overall, as far as All India is concerned. Coconut has been having a healthy growth on a regular basis. As far as we are concerned, we are still a very small player. We have some aspirations. I do not want to call out the market share numbers, but we have seen that with our equity, both the product that we are offering and the brand Bajaj, it has seen good traction in the initial stages. We feel that there is clear scope for our distribution expansion across many markets. We have identified two focus markets where we are taking off the product in a big way, and maybe we'll see how that scales up. Two new SKUs in the low unit packs are also being launched in coconut so that we can scale up distribution even in our stronger markets. In the next few years, I think coconut is a decent product for us. Great. My next, my second question is, you know, when you were giving your EBITDA about of 18 to 20%, what were the assumptions you were taking for your raw material prices? Because, you know, I'm just trying to relate... I don't know if this is the right way to do it, but if you could just provide some perspective. I'm trying to understand how to relate crude to your iron prices, because, you know, in the last many weeks, crude has actually jumped back recently from its lows. I was wondering, how do we relate, you know, crude to LLP and RMO, if you could just provide some help on how should I look at this? Absolutely right. Crude clearly is range-bound now. I mean, it was showing clear deflationary trends. It is being, it is being range-bound now. The we, we take some assumptions based on, at any point of time for the next three quarters to four quarters, what kind of, what kind of raw material prices, indexes that we'll have. Based on that, we decide our strategy and put our, put our numbers. Based on what we had estimated as far as crude and crude and RMO is concerned, RMO has been tracking on that line. Crude, actually speaking, is also tracking on similar lines. Based on that, we feel that, that 18 to 20% this year is doable, and that's where we would like to keep it at. Yeah. Okay. Thank you. Thank you. Thank you. Next question is from the line of Nishant Bokaria from NV Alpha Fund Management. Please go ahead. Hi, this is Shubham here from NV Alpha. My question was that, if you heard right, we spent INR 44 crore in advertising in this quarter, which roughly amounts to about 80 to 90% of, as a percent of sales. Will this number flatline at some point of time, and will we start seeing creating levels coming in, or is this the kind of spend that we envision, in the short and medium term? With ADHO remaining a focus, if you were to compare with last year, just to give you a quick clarity, if you were to look at the numbers from last year versus this year, you'd see there is a drop of about INR 2 crore as in absolute numbers and in percentage numbers as well. Percentage numbers, exactly, that's the trend we would like to keep it at. As the sales start moving up, we would like to keep the absolute more or less similar to these numbers so that the percentages keep dropping. I mean, that's how you would have your economy of scale. ADHO, on the other hand, just to clarify, we have not dropped. In fact, ADHO has been slightly higher than last year. Last year, if you look at, at this time, there were 2 national ads happening for Coco Onion as well as Soap. Most of them have moved into the digital space, so where the spends are much lower. ADHO investments, as well as both, TV as well as digital, will continue. The percentage will continue to remain as far as ADHO is concerned. If ADHO keeps going, we would like to... There, you will not see too much of economy of scale. We would keep on investing as the brand sizes. While in the other brands, there will be some scale that will come up to our advantage. That's what we see as the overall picture to be. Sir, out of the many products that we have launched over the last one, one and a half year, which product portfolio do you think has got maximum potential now having tested the markets, or which can drive this sales of new product portfolio on a much larger scale? I think both the, both the hair oils category that we have launched, both the Amla, both the two products in Amla and the coconut, both of them, the Amla, coconut portfolios both have been tracking well, and we see good potential there. In some of the Almond Drops extension, they are still restricted to modern trade and e-commerce. We see now we are looking at slowly getting them in GT, and we are getting the larger products as far as the Almond Drops extension in. We think Almond Drops extension has a good potential as far as our expansion is concerned. Our digital ad has also now shifted towards more than, more from almonds for the hair to almond for both hair and skin. That is the agenda we are pushing. We also feel that the ethnic range that we are launching and we'll keep, we just launched a small product just to test out the some of the premises that we wanted to test out. Some of the larger products are coming up, coming up in the next three, four quarters as far as the ethnic range. We feel that with the Bajaj equity, there are some space for us to the Indian-ness kind of products that we launch. We see that even that has a good potential to scale up. Just to reiterate, in the hair oils, other than ADHO, both the coconut amla on one side, few products on the Almond Drops extension range, and lastly, the ethnic range, we feel that there is good potential for us to grow. Thank you, sir, and all the very best. Thank you. Thank you. Next question is from Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, Jaideep, Manu, sir, Richard, thanks for the opportunity. Good morning. I'll start with the core slide on 4 page, slide number 4, where you've given some numbers in terms of value and volume. Though it is good that we have seen some recovery in the rural, my question is, what is happening on ground in our core HSM market? That's the key to our business. This data at the national level looks promising, is that reflecting a good recovery in our HSM market? That's my 1st question. Would you want me to answer that, Shirish? Yeah. Yeah. If you look at the, if you look at the commentary that we were giving for the last 3, 4, 5 quarters, while the hair oils markets were down, the HSM markets, especially the, let's say, the poorer markets, if I can call it, under quotes, UP, Bihar, MP, were far worse than, than the overall compare, this thing. As the markets are recovering, we see a sharp rebound also happening there. Those markets are also recovering, recovering well. That is what is also getting reflected in our kind of... In the, in the commentary, I also mentioned the HSM markets have rebound there. Now the difference between the, let's say, the more wealthier states versus these states have also bridged quite a bit. We see there is some, it's also affecting our business. We feel going forward, while, as we called out in the last year, the same, while rural has recovered, we don't see completely power in rural at this stage, at least. We see urban catching pretty well, and overall in the basket, I think Q2, Q3, we should see good numbers then. One follow-up here, when, when I read your slide, the value growth in rural is -0.3, and volume is -1.6. Is this number in the HSM market will be higher in terms of negative growth or it is positive? No. You're right. It will still be a little higher in the rural markets, but earlier the gap used to be much, much more. Now it has substantially reduced. That narrowing has happened here. You think Q2 onwards, this will be in a positive territory in terms of volume? That will be very difficult to predict. I mean, that is getting into prediction zone. I would not like to predict that. Indications are- But- that the market, market recovery is happening, urban is still going well. Rural negative has now flattened out. Whether it will get into the positive territory or whether it will be hovering at similar levels is just a, just a conjecture. Yeah. Okay. Second question is on, can you specify what is the non-ADHO contribution in terms of NPD? You said 23% growth is correct, but what is the contribution? Second part to it, what is the volume growth? Because you said that the revenue growth or the value growth in ADHO is 9%, but what is the volume growth? Both are about... Say, if you look at both, overall company as well as ADHO, it's about 100 to 150 basis points higher as far as volume growth is concerned compared to value growth. Both of them are that. As far as your contribution is concerned, I answered that question. It is roughly about little higher than 14% is our NPD contribution. Eighteen. At the highest stage, we had reached about 15%, so now we are looking at about little more than 14% as far as all your, all the non-ADHO is concerned. Okay. My last question on ADHO extension. We saw that this quarter you have launched a serum in the e-commerce. Similarly, about 15, 20 days before you launched Dosan, and these are the large packs, like 400 ml and 600 ml. Just wanted to understand, if you do these kind of experiments over the next 2, 3 years, what is the whole strategy? I mean, though we have a very strong equity, why I'm asking this question, this ADHO equity is very stronger in the north, but when you are doing this product expansion, these are more suitable to the urban markets. Is that urban market is going to drive the different SKUs and the rural or maybe semi-urban markets, you will still work the ADHO? Is it a vice versa strategy which we are trying to explain? No. So I'm not sure how the urban, rural discussion comes in. HSM and urban rural are not contrary to each other. I mean, HSM is not equal to rural, if I can just add. There are large urban markets in, in the HSM territory as well. Having said that, these strategies are completely different strategy from Almond Drops on its own. Almond Drops equity, we saw, we have done enough research to see that among some kind of consumer, they see this brand, they're having a right to win across many other categories in both body and hair care. That's how the products are getting launched. It is not serum that we launched. Serum was launched last year. This is basically shampoo that we have launched this year. Lotion and shampoo are coming up, coming up this quarter. The pricing that we have looked at in both these products are comparing with a larger players. For example, if you look at the nourishing lotion, it is just a little higher than, let's say, Vaseline, a little lower than Nivea. As far as, let's say, the shampoo is concerned, we have kept it a little lower than Dove, but similar to Pantene and TRESemmé. This is the, this is at the level that we are playing at. At the premium, not maybe absolutely with the leading player in terms of MRP, but just, just about below that. We see that slowly, with our digital spend that we are having, we are seeing a lot of chatter happening as far as these products are concerned. We have launched the smaller products of serum and argan oil, et cetera. Now we see that there is some good traction happening as far as Bajaj Almond Drops non-ADHO range. Now we expect these products getting launched. We feel that these products have a good potential to grow at a decent gross margin, and that's where we will continue to invest in. That's helpful. One second, Shirish. May I request you to join? No, let me complete the question. Yeah, let him complete. Yeah, please. I'm only saying that though it is happening, that you're doing product extension and trying to squeeze the or extract the brand equity. Is it not, lotion and shampoos is a too cluttered category on one side, the traditional or, the players which are existing in the market are struggling, and all the market leaders are struggling. On the other side, you have seen the D2C is also hitting one side. I was just more curious that... I mean, I understand this is a relatively, very small market you're targeting in the modern trade, but, little longer view, I think, like, these two categories looks very cluttered. That's why I'm asking this question. Maybe in the call you can answer this. Okay. I'll just quickly answer that. This is the same question that we had raised when we had launched the soap. That was the maximum cluttered category, being the largest, INR 20,000 crore largest category. At that time also, the same point was made that we are not looking at just launching a particular soap or a lotion or a shampoo. It's more the basket or bouquet of products that we are offering to the Almond Drops loyal user, and we are already seeing some traction as far as that build is concerned. That is what we'll build up, we want to offer a basket of Bajaj Almond Drops premium range of hair and hair and body care products as far as the customer is concerned. I think in that journey, these products do fit in, and we see a good potential as far as that strategic direction is concerned. This is just one of the legs of our strategy, but we think that is a substantial one. Thank you, Deep, and all the patience. I, I really admire that. Thank you. Thank you. Yes. Thank you. I request to all the participants, please restrict to two questions per participant. Next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Yeah, hi, thank you for taking my question. Would it be possible for you to give the absolute numbers for NPD for this quarter and same quarter last year? Absolute numbers. Revenue for NPD. In the overall numbers, right? Yeah. Just give me a minute. Let me just take the numbers out. Yes. It is about INR 31 crore in this year, in this quarter. This quarter. Same quarter last year, it will be how much? Same quarter last year, it will be about close to INR 28,000. Yeah. Okay, and just clarification from what you mentioned in terms of subdued growth for NPD during the quarter, which you stated that last year we had some major launches in the same quarters. Sorry? Sorry, I was just completing the thing. Q4 was about INR 24 crores, and this was INR 30 crores. Q1 FY 2023 was 28, you said, right? Yeah, that is correct, because we had launched 3, 3 products at that time. Yeah. There was a coconut- Yeah, so. Launch, coconut, there was a national launch for coconut, as well as the Almond Drop soap we had launched, in that quarter. Yeah. That's. Yeah. Yeah. What I was saying was that, as you stated, that there was initial launches of these products, obviously, there would be some inventories pushed in the channel. Would it be fair to assume that the subdued growth is primarily because of inventory issue between the primary and secondary, and the secondary would have still grown now at a much higher pace in the quarter for NPD? Oh, yes. If you look at secondary, I would not like to quote the secondary exact numbers, but yes, secondary-. Yeah. Obviously, these were all just from primary pipelining last year. Now that you are seeing, there are no real large launches that have happened, large product launches. These are all more secondary that is being tracking with primary. Because one of the things that we have done last year itself is that, the clear focus for most of our incentives, et cetera, have been shifted at the frontline, has been shifted to secondary. Earlier, it used to be on primary, it is now completely on secondary. Secondary for us becomes far more as a-... as a, the thing because of the health of the inventory. That has been doing pretty well. This secondary is clearly far higher than primary, yes. Okay. Okay. That's very clear. Thank you. Thank you. Next question is from Latika Chopra from Branston Investments. Please go ahead. Yeah, congratulations, for steady improvement and great to see a bunch of new launches. My question is, what is the thought- what has been the thought process around launch of new products? How and why are we choosing these products, and what are the parameters? Secondly, on body lotion and henna, what would be your strategy in terms of scaling both these products, if you can just highlight? Okay. See, most of the strategy or direction that we are doing is, there has been actually no change in our strategy or direction or whatever we are doing since the last 8 quarters. We are very, very clear that we wanted to expand beyond the Almond Drops portfolio. First thing that we wanted to do is make a much stronger team in terms of process, system, automation, IT, et cetera. I think we have achieved that. I think one of the things that we are seeing in the last few months is better execution capability of the organization, which is what we wanted to build up. I mean, you don't do that overnight, that is something that has got built up, and we think that, that's a sustainable thing that we have been able to do for ourselves. Strategically, as far as we are concerned, a few tracks we wanted to complete. Exactly the same thing that we have been talking in the last eight quarters. One is expansion into the various hair oils category, which we have done with the Amla and the Coconut portfolio, maybe one or two products still left. We'll see whether gross margin-wise, there is enough money to be made in that. If so, we'll go there. Second range we wanted to expand is the Almond Drops extension. We said that we will do that for the next two, three years, in phase launches of products where we wanted to explore the equity of Almond Drops. I've just explained that in the last question, so that's the direction we are taking. Third, we said, was basically looking at our digital brands, some of the digital brands that we are pushing. We'll also look at the investments and how do we rationalize the digital brands as a third leg. The fourth leg, we see that with the Bajaj equity that is there across markets, across the consumer mind space, we see that the Indianness products, Indian products, which is more the ethnic range that we have started with the henna launch. It will not be just the henna launch, there will be more such products. That's the portfolio we wanted to build up where we see that most of them will be GT-focused SKUs. There is enough and more that we have because of our distribution. The fifth leg, which we have been pushing, and we had said that we'll push it only from last year. For the last 2-3 quarters, we have been pushing is our international business. International business used to be about 2 to 3%, now it's gone up to 5. We see there is a huge potential for that international business to be a good, profitable international portfolio for us. That is something that we have been pushing, and that's the other track that we are taking. These are the 4-5 things we have been looking at, and it is this kind of, strategic reasons. Okay. I think one of our manufacturing facilities is still under tax holiday period. When are the benefits of low, low tax rate going to get normalized? In two thousand and twenty-seven. 27. Okay, thank you. Thank you. Next question is from Rishabh Sisodia from Sameeksha Capital. Please go ahead. Hello. Hi, sir, thank you for the opportunity and congratulations on the good set of numbers. I have a few questions. On the direction, sir, as you have earlier mentioned, we want to grow in double-digit trajectory and revenues, that's why 2028, 2029. Do you still maintain that target? Is it purely based on growing by adding newer products to the portfolio? Is the guidance based on that? It will be a combination of multiple things that I just answered in the previous question. One is obviously your core needs to keep growing. I mean, if ADHO gets stagnated with that kind of higher base, it will be very difficult for you to grow at those kind of numbers. Even if you were to grow, then the kind of EBITDA that will churn out will be a little difficult to digest. ADHO, the focus for us has been to, on ADHO, both in terms of distribution, I think there is still enough and more for distribution to be done. Last year, the market conditions were difficult, but the base work that has happened, I think are slowly starting to reflect. We have seen some two good quarters of ADHO, and going forward, I think we are quite buoyant about what ADHO can deliver. Distribution, there is still more work that is required. Urban, good work has happened, I would think as far as this company is concerned, but rural, there is, there's still more work to be done. I think that will now slowly shift for us as a focus. Nothing to do with the market conditions as such, more for internally, I think there is some scope for us. ADHO will still remain a good growth driver for us, and we would like to continue to focus. The other thing that we have done on ADHO is make it, one of the key things is the brand has become stagnant in the mind of the customer. Can it become a little more vibrant? I think that attempt of getting into digital space and now getting into AI, pioneering work as far as AI is concerned, all that is slowly starting to move the needle a bit in terms of new customers, new age customers coming back. We see a good traction as that is concerned. All these new products that we talked of will obviously be form a part of our strategy. International business, clearly, we see will be one of the growth drivers as far as this number that we are talking about. The fourth, and which will always be as and when it happens, if were to happen, will be the inorganic growth, which we will continue to pursue, but we have our own parameters of measure. Within that, if we are able to getting something, we'll also pursue that. All these tracks are open, with the last being open, but we don't know whether, when and how that will happen. ... Just a, just a follow-up to that discussion. Discussions on any acquisitions that you are looking at, at anything as of now at any stage? That's what, that's what I said. In organic growth, we, we have a partner who's helping us look at targets. In the last one year, we have evaluated a few targets, but some of them we took it to advanced stage, and nothing as of now has materialized. If it, if something materialize, obviously, you'll get to know. Understood. My second question is on the CapEx and the ad spend you rendered, that we should look ahead with like, I don't think CapEx is around INR 10 crore-INR 15 crore CapEx. Vish, I'm sorry to interrupt you. Your audio is breaking. Hello. Is it better now? Yeah, I heard you. Something on CapEx? Yes, so annual rate that you look at and also the annual render from the ad spends around INR 170-180 crore. As I said, 16 to 18% is what we have guided, and that is what we are going to remain in the short term, at least short to mid-term, and that we will see how it will build up. As far as, as far as CapEx is concerned, we don't see any such large CapEx that is happening. We are looking at, looking at our manufacturing footprint, as we discussed in the previous question. In 2027 our tax MAT breakup stops in Guwahati, and we have to look at logistic cost-wise, what is the best servicing depot, both in terms of incoming raw material logistics as well as outgoing, outgoing FG logistics cost, which is the best located location to supply to our distribution center. We are looking at a long-term strategic direction, also looking at automation, et cetera. Maybe a revamped facility. In terms of investment, it may not be a huge thing, but there will be some investment involved. That's a little, little mid-term issue as it is. Okay. Sure, sir. Thank you. Thank you. Next question is from the one of Abhishek Jain from Orion Capital. Please go ahead. Abhishek, may I request you to unmute your line and go to your question, please? Abhishek, can you hear us? Maybe you can skip and come back to him later. Next question is from the line of Kaushik Poddar from KB Capital. Please go ahead. Yeah, see, there is a line item in your profit and loss statement, which is royalty. Royalty, I guess from the figures, I can figure out that it's around 1% of the turnover. Is this true? Number one. Number two, who owns this royalty? Does the Kushagra Bajaj family owns the royalty or other Bajaj members are also part of it? The Bajaj Resources. Bajaj Resources. Bajaj Resources- Hello. Which, which holds the, holds the trademark gets the royalty. Bajaj Resources is owned by Kushagra Bajaj family, or there are other members of the cousins or brothers or whatever, they're also part of it? No, it is held by the Kushagra Bajaj family. It's exclusively owned by Kushagra Bajaj family, right? That is correct. Okay. Okay, second thing is that suppo... I mean, all these supermarkets and all these things, when I go to, a say, Reliance SMART Store, they have their own brands of, say, coconut oil and also Almond Drops, almond oil. So, to compete against their own brand in a, in a supermarket, doesn't it become a difficult issue for you guys? Again, very different products. If you look at Almond Drops, Almond Drops is actually not so much a specific ingredient-driven. It's not a straightforward product like coconut, which is a 100% ingredient-driven product. Almond Drops is more, sells more on brand equity. There, if you look at most of the stores who have launched Almond, there, the things, you know, you mentioned one retailer, but there are other retailers who have also done. They have not really faced much success. It has also not been faced by many other competitors who have also launched products. Some of them have even withdrawn. Almond is more a brand story rather than an ingredient story, so to say. There obviously is a key ingredient, but that's not what it is. The brand plays a much bigger role, right? Brand plays a much bigger role, absolutely. Okay. Coconut oil. What about, say, coconut oil, which is a more a commodity end of the product? Yes. Coconut, you are absolutely right. It is a commodity. We have, we have observed, and you are absolutely right, that there is a very large player, then there is a, then there is a store brand, and then you have a, a brand of yours which comes in. We have seen that even in this interesting dynamics, the brand equity of Bajaj somewhere holds good. One thing that comes up is clearly with the quality of the product. On a little longer term, I think the consumer who's coming back for a repurchase clearly is coming back for the quality of the product. For the consumer, in this particular case, it's a real little easy solution to make because they know it's a 100% pure product. They just need to determine, determine whether that 100% purity is how as far as they perceive it or not. Once they see that, that value equation comes clearly in mind. There, for some reason, we have seen that as hair oil companies or oil companies directly, they seem to have a little better equity than the store brands itself. Not at any moment am I saying the store brands don't sell, but somewhere we seem to have a slight advantage over the store brand. Even where we, we would exist as a third brand or a second brand, whichever way you see it, against the store brand versus a very large brand, we still seem to be making good headway. This is a more conceptual question? See, you are a much smaller company than the bigger players, say, Marico or whatever. I'm just taking Marico's name. With the advent of, say, e-commerce and organized retail, you have the same reach, say, as Marico. Does it give you that much of a leverage to increase your turnover because your overheads are much lower than that of Marico? I mean, is it a different dynamics with the e-commerce and the and organized sector there? As far as the overhead is concerned, it will be the other way around. You are a larger player, economies of scale will bestow on you rather than the smaller player. Okay, okay. Overhead, while you will not have an advantage. Yes, if you are talking of being a level playing field, yes. At least in the form of a reach, it is the same, I guess, right? For Marico field. As a, as a level playing field, yes. E-commerce and modern trade would be a little bit of an advantage. But what, on a strategic basis, if you want to really scale up the product and this kind of commodity product, if you want to scale up, then obviously, GT has to be one of your focus areas, which is where in the last 1 year, we have been scaling up pretty well. I've got good responses from the thing, and we clearly see that distribution can play a large role in this further scope as far as we are concerned. Because modern trade and e-commerce will hit some point, some kind of a glass ceiling as far as these products are concerned. My last question, which is that the one growth vector you delineated, delineated was this, is your international foray. So if you can, say something as to how you're trying to differentiate or what is your game plan for this international foray? International, if you look at, compared to any, any FMCG company in our sector, I mean, easily, you are looking at a 20 to 30% contribution coming out of international is not a really, really a large task. It, in our mind, was always a low-hanging fruit. It's not now a low-hanging fruit, it always was. It's a question of prioritizing. With so many things to do, what do you prioritize? We accept that international priority, we will do once we have got our, got our act together a little bit in the local market, especially in terms of execution, in terms of capability building, et cetera, execution, capability. Because execution capability is the most difficult as far as the building is concerned. That's now that we are a little confident that our execution capabilities in domestic markets have become a little better, we see that international, we can look at. Certain markets, the Middle East markets, we see there is a lot of potential, Middle East, Africa. There we have been focusing. We've been getting great numbers as far as Middle East, Africa is concerned. New distributors in Saudi, getting into, getting into e-commerce in UAE, and distribution change in UAE, other Gulf markets, Qatar, Kuwait, all of them now doing well, some now forays into Africa. So that we have started well. We look at whether we need to look at some inorganic growth there, et cetera. At least organically, there is enough and more to be done as far as Middle East, et cetera, is concerned. Rest of the world markets, through exports itself, we see a lot of potential. That has been doing well for the last maybe 6, 8 quarters. The highest profitable segment as far as we are concerned, much higher than general trade. So that we are pushing. Some new countries have been added in that, Malaysia has been doing. Some of that has come in. Bangladesh, we see, is a large market dominated by a very, very large player. It will be not an easy market to grab, so we have started our local operations there. We are scaling up. We're putting our people, entire team is getting built up. It will be a slow grind, but we see that also has a large potential. Overall, if you look at, I think that number of 20%, 20, 25%, little more mid to long term is clearly doable, and that is the direction we are taking. We have already scaled up from about 2, 3 to 5% now, and I think this journey will just continue forward. This 20 to 25% of your turnover, as in, as in other players, that's what you are, drive, indicating, is it? Nothing to do with other players. With our internal numbers, 20 to 25% of contribution coming out of international business on a long-term basis, yeah. Okay, okay. Thank you. Thank you, Mr. Nandi. Yeah, thank you. Thank you very much. I hand the conference over to the management for closing comments. Okay. Thank you, thank you, everybody, for joining and joining in. I think this quarter, for the second time, we saw that our execution skills have little, become a little better. Strategically or in terms of process improvement, systems, et cetera, I don't think we had any doubts for where we were going. It's just that execution capability, we wanted to scale it up because we are now looking at far more robust business models with newer products, getting into newer channels, getting into newer geographies, getting into retailing much more, not just be more focused on wholesale and through... That, in terms of change in people, both at the top as well as in terms of field force, in terms of training, development, a lot of work, effort has gone in behind training of our field force. I think slowly, that has started yielding results, yielding results, which gives us the confidence that going forward, we should be able to look at consistent growth as far as the organization is concerned. As we scale up our business, I think the EBITDA should anyway follow directly. This, now, slowly, we are seeing the pieces slowly coming in place, and for the next few quarters, we would like to take this journey going forward in a similar direction. Thank you. Thanks, all of you, for bestowing confidence on us, and have a great day. Thank you. Thank you very much. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.