Ladies and gentlemen, good day, and welcome to the Bajaj Consumer Care Q2 FY 2024 results conference call, hosted by ICICI Securities. As a reminder, all participant lines will be in a listen-only mode, and there will be an opportunity to ask questions after the presentation concludes. Should you need any assistance during the conference, please signal an operator by pressing star then zero on your touchtone phone. Please note that today's conference is being recorded. I would now like to hand the conference over to Karan Bhuwania. Please go ahead. Hi, good afternoon, everyone. It's our pleasure at ICICI to host Bajaj Consumer Care Q2 FY 2024 results conference call. From management, we have Mr. Jaideep Nandi, Managing Director; Mr. Dilip Kumar Maloo, Chief Financial Officer; Mr. Richard D'Souza, AVP Finance. I would like to hand over the call to Mr. Jaideep Nandi for his opening remarks. So we can open the floor. Thanks. Good afternoon, everybody and happy Diwali in advance. Thank you Karan, for hosting this call, and thanks, everyone, for joining in. Let me take you through the performance of the company for the quarter and half year ended thirtieth September 2023, before we open the floor for questions. The company reported quarterly standalone sales of INR 228 crore with 0.5% value growth and 4% volume growth, as compared to the corresponding quarter of the previous year. The volume growth was higher than value growth due to changes in product and pack mix. For H1 FY 2024, standalone sales stood at INR 488 crore, resulting in 4% value growth and 7% volume growth. The hair portfolio grew by 4% during this time. We witnessed a shift in festival buying, where purchases were postponed from September to October, resulting in a subdued quarter. Gross margins at 54.5% expanded by 280 basis points in Q2 FY 2024 as compared to the previous year. Gross margins for H1 FY 2024 stood at 54.6%, an expansion of 135 basis points. EBITDA in Q2 FY 2024 was at INR 38.8 crore, a 22% growth over the same period last year. Margin was at 17%, an increase of 300 basis points over last year. PAT for the quarter had a growth of 21% at INR 38.4 crore as compared to the previous year. EBITDA in H1 FY 2024 stood at 86.9%, which is 26% growth over last year, while margin stood at 17.8%, an increase of 380 basis points. PAT for H1 FY 2024 was at INR 83.8 crores, which is a growth of 29%. At the channel level, general trades saw a low single-digit decline in Q2 due to subdued rural demand. Urban markets continued to outperformed rural markets, which remained subdued on account of inflation, food inflation that is, and below average rainfalls in certain regions. We have supported both wholesale and retail channels in urban with loyalty programs throughout the year, yielding good results. While urban markets are expected to continue their growth momentum, we expect rural demand to rebound on the back of the festive season. Modern trade continues to grow well, registering a growth of 19% in the quarter compared to the previous year, and a growth of 27% at the half year level. There were significant market share gains for ADHO in modern trade chains, where ADHO grew by 17% in H1 FY 2024. Modern trade has grown by more than 2x in the last eight quarters. Bajaj 100% Pure Coconut Oil performed well and saw substantial gains in key modern trade chains. The company also participated in the Reliance Hairfest to enhance visibility. The canteen business grew by 26% at the YTD level, led by CPC and CSD, both sub-channels growing at healthy double digits. The e-commerce business also continues to perform well, delivering a strong growth of 28% in half year, with B2C e-commerce growing by 55%. E-commerce scale-up has been more than 3x over the last eight quarters. The company's first-ever online beauty fest in partnership with Flipkart to build equity around Almond Drops saw excellent results. The international business registered a healthy growth of 21% in H1 FY 2024. The Middle East and Africa region continues to do well, with a near-teens growth, supported by strong growth in the key markets of UAE and KSA. The rest of world registered 14% growth in half year 2024. Focus markets in rest of world have been identified to expand our core as well as the new portfolios. Local operations in Bangladesh were supported with a mix of digital and online ground activations as we scale up Bangladesh, Bangladesh, and helping it register over 100% growth in H1 2024. At the product level, ADHO registered a single-digit growth in H1 FY 2024. The growth was led by large packs initiatives, including exclusive launch of 750 ml for Flipkart and launch of 700 ml with better price proposition for GT customers. We continue to support the brand with strong media across TV, digital, print, and increased investments in visibility across various channels. So just for your information, we have upped the ADHO investments as well as both digital as well as conventional media as compared to last year. Digital marketing reach was intensified with focus on community marketing and influencer marketing, targeted at new age customers for building the equity of the Almond Drops franchise. The almond ingredient SOV in the communities went up to 37% in the universe group and 82% in the canteen group. Influencer marketing saw 300+ influencers deployed in quarter two, reaching out to 42 lakh consumers... Bajaj 100% Pure Coconut Oil continues to witness strong consumer uptake and excellent distribution built up across the country. TVR media, TV media support was given to the largest market, Maharashtra, resulting in a 12% SOV in that category. Digital media support was provided in key HSM markets. Initiatives such as visibility and sampling interventions across modern trade channels also received encouraging response. Bajaj 100% Pure Coconut has been gaining market share across most markets and channels. Scale-up plans for the brand across the country are in place. With a strong back-end integration for the brand, right from sourcing of raw materials, managing seasonality, to manufacturing, the value chain of the product has also been strengthened in the last few quarters. Our buildup of the AD extensions, Almond Drops extensions, continued in the quarter with the three product launches: Bajaj Almond Drops Nourishing Body Lotion, Bajaj Almond Drops Anti-Hair Fall Shampoo, and Bajaj Almond Drops Anti-Hair Fall Conditioner. Initial uptake and feedback on new launches of these products have been encouraging. The body lotion has been listed in all key modern trade chains and e-commerce platforms, while the shampoo and conditioner has been launched initially in the e-commerce channel to be further extended into modern trade and GT subsequently. The launch of Bajaj 100% Pure Henna was completed across all channels in the quarter. Consumer response have been promising on the back of on-ground activation and pan-India visibility. We will be looking to expand into few more products in the ethnic range in the coming quarters. The NP spends for the quarter was at INR 38.1 crore, which is 16.7% of sales. We'll continue our investment in HSM-ADHO and NPD portfolios with increased focus on digital media to target new age customers. As mentioned, the NP spend in the year for ADHO has been substantially higher than last year. We have seen correction in prices of major raw materials, LLP and RMO, compared to last year. The prices of the packaging material, except glass bottles, have also seen some reduction. We continue to take steps to bring structural cost reduction in material costs through a combination of, combination of optimization of specs, by doing our vendor database, vendor base, and development of alternate packing materials. We have revamped our ESG policy and finalized targets for the medium term to reduce the usage of natural resources, minimize our carbon footprint, and greenhouse gas emissions. During the first half of the year, we have taken steps to reduce the consumption of water and energy, as well as reduce wastage in our operations. As the festive season approaches, we have seen improved demand conditions in October, which bode well for the near-term growth prospects of the company. So strengthening and broadbasing our hair oils, having a more comprehensive range of Almond Drops extensions, and entering into the ethnic range, which started with Henna and more products in the coming quarters, these will be our growth drivers for the domestic market. International business, which has been a thrust area for the company, has been scaling up as per plan. We expect the saliency of this business to keep moving up in the near term. With this, I end the opening remarks and open the session for questions. Thank you. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and then one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star, then two. Participants are requested to use their handsets while asking a question. We'll wait for a moment while the question queue assembles. The first question today comes from Percy Panthaki from IIFL. Please go ahead. Hi, Jaideep. I just wanted to ask, what is the path to 20% margin for us now? Because, see, input costs are now have deflated. They are more or less at normal levels. I think from your upside as well as downside risk would be very similar. Ad spend also at around 16.5% of sales is not sort of higher than what our medium-term target would be. And as we go ahead, the new products would form a higher and higher percentage of the revenue, and they anyways would be at a slightly lower margin. So therefore, I don't understand what would lead to a margin expansion and how do we get that 20% kind of mark, which is what our aspiration is? So 18%-20% is how we stated the near term, so we are anyway looking at 16%, ending this year. One of the basic things that you will see is that even from quarter one to quarter two, one of the reasons that there is a little bit of a erosion of EBITDA would be that while the drop margins have remained more or less at the same place, the turnover between quarter one and quarter two, which anyway for us, quarter two has lower saliency. There is a drop, and that economy of scale at the margin, as in, affected because your overall cost as far as fixed costs are concerned, is more or less similar. I mean, the employee costs and the factory overhead, et cetera, do not change so much. So as the volumes go up, as the volume goes up anyway, see a 1-1.5% upside in our margins. Everything else remaining more or less constant, just as a cost between between. So that itself will take it to about 19-19.5. And then as your ADHO sales ADHO business keeps coming back, which is now, I think, it is at the possibly worst situation as far as demand conditions, as far as fuel level is concerned. If that comes back and we are seeing some kind of green shoots in that, we expect that the margins should be coming back to about that 18%-20%, which is what we have stated. So if I just fast forward to, let's say, three years from now, ADHO logically would be a lower percentage contribution to the revenue than what it is now, because we are trying to diversify our product portfolio and ADHO is the highest margin sort of business in our sort of pack right now. So don't you think the margin mix will get adverse as we go ahead, let's say, three, four years down the line? Maybe the gross margin, yes, a little bit might get impacted, but I don't see the EBITDA margin going down, as I said, because of the cost structures will get different. If you look at the cost structure, a lot of it is in terms of manpower, et cetera. Our cost structures are much higher than that of competition, and even, let's say, even our ad spends, et cetera, are much higher. That I believe would slowly start differing as you get into larger business sizes. I mean, when these products actually gets established, most of the costs elements will not multiply in the way the sales growth would. I would assume that the EBITDA, our mantra is that the EBITDA will go up by about 1%-1.5%, just as I said, if everything else remains well as managed. Understood, understood. So what is our aspiration in terms of volume growth over a 3-4-year period at the overall company level? So as we said, we have aspired for a double-digit growth at this stage. I mean, that is a bit again, if more or less everything is in constant. In fact, it's a little higher, but with the market conditions that will prevail, we expect at least a double-digit growth for the next year or two, number. This quarter, what really went wrong with ADHO? Because most of the results are out, and I think, across the hair oil space, ADHO this quarter would be relatively on the lower side. I would think ADHO would have performed the best in terms of the larger. If you look at the larger hair oils, I think ADHO would have performed the best amongst the larger hair oils, if you look at. If you look at. If you look at the overall hair oils portfolio of the companies, yes, I mean, we will be in the middle, we'll not be the highest, we'll obviously not the lowest, but we'll be somewhere in the middle. But if you look at the top hair oils company, clearly from both numbers as well as data, ours would be one of the better performing ones, and what- Just correct me if I am wrong, this quarter, our ADHO would be approximately -5% for this quarter only? Little, a little less than that. And if you look at the others, well, you don't have data for the others coming out. I think, their, some of them will be higher than that. Yeah. As far as just on the larger hair oils, but if you were to look at it. Larger, the bigger, bigger brands, yes. Okay. So not with standing that, you look at ADHO itself, let's not worry about the other companies at this stage. So two things we are seeing. One is we see that some of the businesses also shifted from September last year, which had happened in September because of early Diwali. We are seeing the business has also happened in October. So we have a very robust growth as far as October is concerned, double digit. Plus, I mean, quite a good growth because of the, not for anything else, but for the shifting of the business that has happened. The other thing that we see is in ADHO itself, most of the larger packs have done well. It's only the sachet and the smaller packs where there is a bit of a struggle, which we see mainly happening for rural. In sachets, we don't see too much of a competition, because there is not much of a between any competitive product with, with sachets. So sachet, there has been a bit of a drop, and we think as the rural markets improve, that, that should get taken care of. So overall, I would think with the kind of work that has happened in ADHO, ADHO is still in a pretty good place. Well, the numbers for this particular quarter may look a little subdued if you look at even at H1 level, ADHO is better. Right. And lastly, on the new initiatives which have grown by 37%, can you give some color on which are amongst those, the better performing ones, which are the ones which you would sort of hope that they had done better, et cetera? So it is I think now slowly the portfolio is taking shape. Coconut has obviously been the largest of them, which has done very well. So not only in terms of number, but in terms of even distribution parameters or in terms of geographical distribution as well, has been very, very strong. Consumer offtakes have been good. Channel wise, gen trade is now contributing more than 50% of that business, so that itself is a great sign. So overall, if you look at Coconut has done very well. The Amla portfolio is slowly stabilizing. We had also last year not focused too much because of the LLP prices. Now that LLP prices have softened, that is a product of focus for us. So both our Amla, Amla Aloe Vera, which is the green amla, as well as the Sarson Amla. Those two are focus areas for us. This is season for Sarson Amla, so that is something that we are looking at very, very strongly. In the extensions, some of the smaller extensions have started doing well, the serums, et cetera. Good visibility, yet small brands, but good consumer offtakes have started. We are seeing good responses from some of the modern trade chains. It's still not that strong in e-commerce, but in modern trade it has done very well, and we expect that to go on. We have seen initial very, very good responses for the three products that we launched just two months back. Even in September, we see repurchases, good repurchases happening on both the shampoo and conditioner together and on the other categories. So the Almond Drops extensions clearly is one area where we see good potential now that the range is more or less becoming a little larger and a little more comprehensive. We see some positive traction in that range as well as as well as the heroes that other than ADHO, we are seeing some kind of attraction. The third range, where we are still started, initial responses are good. You know, initial responses were very, very good, now it is also taken up by Modern Trade. We have also launched a smaller pack for GT just last month in October, where we are trying to see how it can go further into the generic market. Initial responses of that also has been good. We are launching one or two more products in the coming quarters, as far as this ethnic range, as you call it, as far as for that. So overall, if you look at, there has been a mix of products which we are going into the the new product portfolio growth. Yeah. Okay, sir. That's all from me. Thanks, and all the best. Thank you. Thank you. The next question comes from Ankush Agarwal from Surge Capital. Please go ahead. Yeah. Hi, sir. Thank you for taking my question. Can you talk about the sequential movement in raw material pricing during the quarter versus Q1? So LLP prices are more or less remain similar to what it has been in quarter. I mean, in fact, both RMO and LLP prices have remained more or less similar. There were some positive move- there are higher this thing for LLP, than it is again stabilized and more or less remaining level taking. So LLP remains range bound. RMO prices, there is abundance of edible oils now overall, so that basket is more or less not under pressure. So RMO has been pretty deflated in terms of price, and going forward also we don't see too much change happening as far as the RMO price is concerned. As far as pack bottles are concerned, we have seen downward movement, so prices have improved. Glass bottle is on the up. We have also, as you would have noticed or seen, we are also trying to see how we can reduce our glass dependency. One of the large packs that we had, which was a 200 ml, we had rolled out in the east initially, in PET bottle, we saw extremely encouraging response. And that is one of the, again, a better performing as ADHO is concerned. Now we have rolled it nationally. So glass, which is actually on the upward movement, we are trying to see how we can reduce dependency on glass. So this is overall the entire basket of. And so given that, this quarter, the mix, for, say, the NPD is much higher, QOQ, so would that also have had some impact on, you know, the gross margin being stable? Otherwise, I think gross margin would have expanded for this quarter as well, sequentially. Yes. Bit of it will always happen, and at the 55-odd%, there'll be a bit of... So two things have happened as far as the gross margin is concerned, which has impacted the gross margin just about a percentage plus. So one is obviously, as you rightly said, the NPD portfolio this this quarter has been, in terms of saliency, has been higher than last quarter. So that is obviously one factor. The other is also, as I was alluding to, which is ADHO's larger packs have sold more. Larger packs, though they are higher this thing I mean we have sold a larger larger packs a little more, so the pack mix has also made a difference to this. Okay. International business fundamentally would be a higher margin business, like both at gross and in EBITDA level, assuming it achieves a certain salience of, say, 10%-20%? So, so again, in the initial stages, we'll go market by market. In some of the markets where we would like to invest, maybe we'll have to take... In the, in overall terms, maybe it may not have a huge impact on our, consolidated EBITDA. But for that particular country, in the initial stages where we are investing, there'll be some bit of an impact on the EBITDA. But overall, I think in terms of the sales that we plan to have and the plans that we have for these markets, overall, it will, again balance out and come back. Okay. Cool. That was really it. Thank you. Thank you. Thank you. Once again, to ask a question, please dial star one on your phone. The next question comes from AAGAM, from Flute Aura. Please go ahead. Hi, am I audible? Yes, you are. Hi, thanks for taking my question. I just had one question. So, in our balance sheet, we have a TWIP. That's, I think, a Worli building, which is housed under our subsidiary. So just wanted to know, what are your plans for it? So at this stage, it is kept in abeyance. We have not done anything on that. Initially, there was a lot of call regarding taking it further for development, et cetera. So we have decided that at this moment we'll spend our money more into our own business and look at options that we have. Whatever little that we would want to do would be either in terms of inorganic, which we have not yet done any, but at least that is something that we'll keep focusing on, as well as in terms of investments in our own business, whether it be in manufacturing or whether it be any other IT, et cetera, related to assets that we would want to build. So the money would be more into our own brands, our own assets, and if any, inorganic so, rather than any other business. That's how it is. Okay. Okay, I'm sure. Thanks. That was it. That is it. Thank you. Thank you. The next question comes from Pallavi Deshpande, from Sameeksha Capital. Please go ahead. I just, I just wanted to understand on the soap side, to throw some color, you know, how has that performed? And, secondly, would be on the variability in, you know, the, on the ADHO side, the quarterly variability. You know, we've seen it for the industry, of course, the hair oil side, but what would be, you know, the, I mean, say, the strong one Q and then the weaker two Q, the variability in the volume growth. So, I would assume variability would also mean seasonality as far as future is concerned. So ADHO that way, compared to some of the other products, are a little more seasonal, because there are events like Abhyang Snan, which happens in Maharashtra, where they put oil with some of the, et cetera, in Maharashtra, in the coastal belts of Maharashtra, the Kolhapur, Solapur belt. There, the ADHO actually goes up by 10x in the month itself. So some of this has shifted into instead of September into October. So those kind of movements we are seeing. Even traditionally for us, ADHO, I mean, saliency of ADHO in Q2 is always a little lower. This shift has actually, you will see the bases being a little different. So it's, ideally, we would like to see a July to October period sales data. That will look a little better, since where obviously it will be a little, the numbers will also look better as, the bases are not really comparable. So this is as far as the ADHO is concerned. I would like to think that ADHO is still in, in comfortable, good health in SKU-wise. Obviously, the rural markets are under pressure, the smaller packs are under pressure, but overall, I would think that ADHO has been doing decently well across, supported by whatever consumer work that we are doing. Advertisements have been scaled up in double digit plus, advertisement spend. I mean, last year we spent, if you remember, we spent a lot of money in national TV on Coco Onion and then soap, that is completely out, and in spite of that, the investments in brands have remained. So the, the investments in brand in TVCs are basically only on ADHO and a bit of regional TV advertisements, which has happened in Maharashtra last quarter. So that's the kind of money we are spending in ADHO, both TV and digital. So ADHO, this is as far as seasonality and ADHO is, far forward is concerned and how I see ADHO happening. On the other side, if you look at the soap, yes, soap is a category which we were clear that we are not looking at soap as an individual entity, but more as a part of the extension portfolio, which is now slowly getting complete. I would still like to see soap as a part of the larger picture from our point of view, which is part of the Almond Drops franchise, which is what we are pushing in digital media, the power of almond, et cetera. So from that point of view, I think soap has been doing what needs to do. Obviously, in terms of numbers, it could have been much higher. Yes, I completely agree, but it has been filling that part of the portfolio as the skin is concerned, at least the getting into the skin part with lotion now coming in. At least the skin portfolio is also as far as Almond Drops is concerned, and the moisturizing part of Almond Drops. On the other side, the hair oil and nourishment part as far as hair is concerned, of Almond Drops, I think both the portfolio. So in that purpose, soap is fulfilling a larger strategic intent of developing the Almond Drops extension. Right. So you mentioned about some more ethnic product launches. So how many more product launches do we have lined up for the second half? So second half, we've not launched too many products. We have just launched, Gulab Jal, which is just, coming in and which is just getting, launched this month. I mean, it started last month, and, it's the GTM is happening this month. So Gulab Jal is the second product that we are seeing. And we will monitor, we will invest in both henna and Gulab Jal as far as the, the market is concerned, as well as consumer offers and some bit of local, visibility, et cetera. And we see how the responses of these two products go. Henna has already started to picking up well. We'll support Gulab Jal l as well, and then we'll see how. We have two more products in the pipeline. When and where to launch is something that we will see based on what the response of these products are. Basic point is we would like to see that we are able to invest behind these brands, both in terms of infrastructure support as well as in terms of the brand support. So either in Q4, definitely not in Q3, but definitely either in Q4 or Q1 you'll see these launches. Yes. What would be the share of rural in the total, for us? So the rural used to be about 50/50. At some point of time, rural was more than more than 50%. At this time, it is 48% is roughly rural and more, about 52% is urban. Are we seeing the shifting to the urban side, right, because of the new launches? Not really. Not because of the launches. It's more because of the demand shift that we are seeing. I mean, just the food inflation. We're just looking at the food inflation numbers. I mean, you, I'm sure you would have also seen that. In July, we had a 10.7% food inflation. In August, it was 9.9%. 10.6% and 9.9%. September, it has cooled off a bit. It is now at 6%, 6.6%. Much, much higher than what we saw in the first quarter, 4.2% in April, 3.3% in May, 4.6% in June. These were the numbers as far as food inflation in the first quarter is concerned. Quarter two has been ruthless in terms of inflation, and that has clearly impacted rural demand. We have seen that impact others as well. Now that September has cooled off a bit, and we now see a bit of the buoyancy in terms of festival purchases, et cetera, election coming in, money spending. We think that quarter three, quarter four will be much better than what we have seen in quarter two. Right. And so lastly, just since you mentioned, you know, the more of the influencer kind and digital media spend, so that seems to target more. I mean, you know, is the advertising spend getting tilted more towards the urban side, and because of which we are getting, our demand is getting hit on the rural side? Was my concern. No, not really. So, so if you look at one of the key concerns as far as ADHO is concerned, is it's not seeing too much for the new age customers and the new age customers are lapsing out. So that has, we have seen a big amount of, reversing of that and a lot of, good responses we have seen on that. Having said that, even today, even as we speak today, 75% of our investment in ADHO is still in traditional, conventional TV media, and 25% is on digital. That number used to be 5, 10, which has gone up to 25. That's what we have done as far as digital. It's not that we have taken much money out of ADHO. If you look at even conventional TV, which is what I was talking during my opening remarks, even on conventional TV, over last year, there is a more than double-digit growth as far as conventional TV spend as far as ADHO is concerned. I mean, digital, yes, definitely, even conventional. So ADHO spends have gone up on both too. Right. But the AD, ADHO spend would have gone up on the conventional side, you said, right? 2 times, Not two times, by double-digit. Double digit. Conventional spend has gone up by double-digit, and the digital spend has also substantially gone up. It is 75-25, in terms of spend, conventional to digital on ADHO. Okay. Okay, all right. And so lastly, on the CFO cash flow from operations, just seeing a slight deterioration. What would the, you know, any guidance for this? Cash flow in terms of? CFO. In terms of... There will be a little bit of movement in terms of debtors from 18 days to 20 days. That happens with the increase in, let's say, the saliency of modern trade or e-commerce. But if you look at the overall net working capital, I mean, without your current assets of GST et cetera, still remains pretty well negative. So really speaking, there's no change in our way of operating. We still do not give any credit to our distributors in general trade, which has been now the trend across many companies because they want to support an upstocking. We have not gone into upstocking at all. We have refrained from it and as a market discipline, that is something that we would like to be proud about, that we are not one about a short-term, business gains by, dumping at our distributors. So, we still remain on cash only with distributors, and that's what we need to do. This change, this slight change that you see is more because of the saliency change, where Modern Trade and e-commerce do operate with 2-3 weeks of credit. All right, sir. And sir, just lastly, if I may, on the soap side, you know, what would be any rethink on the strategy there for the soap side? Any learnings so far? Yeah, like I said, I mean, there is no specific worry that we have as far as the soap is concerned, that we need to rethink. The soap is not something that we wanted to... At the beginning itself, during the launch itself, we did not, we said that we do not have a particular market share aspiration as far as soap is concerned. In a INR 20,000 crore category, you are going into a INR 1,500 crore of a moisturizing category. That's the category we are addressing. We're not even looking at the INR 20,000 crore category. So it was more- Right. Almond Drops, the equity of Almond Drops for skin and this thing. So it was more on inward looking for the brand perspective rather than from the category perspective. So from that perspective, we see soap getting in where it wanted to. How we improve the business and how we increase the business is something that we'll work out. Otherwise, in terms of strategic rethinking, there's none requiring soap and none being planned. All right, sir. Thank you. I'll come back in the queue. Thank you. Thank you. Once again, to ask a question, please press star, then one on your phone. The next question comes from Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, Jaideep and team, good afternoon, and thanks for the opportunity. In the beginning, I have three main questions. Could you spell out what is happening in HSM market? If the recovery is seen in September or maybe October. Second, the wholesale in these markets have been a pain for us. So any thought how it is panning out? And third, is that, do you think or optically, when you look at now, range has settled, the agrarian economy is expected to do a better thing. So do you think second half will be much better for HSM market? So, answering your question in the reverse order, we think anyway, second half is anyway a stronger half for us compared to the first half. I mean, first quarter, third quarter, and fourth quarter are the stronger quarter for us. And anyway, we have seen, as I said, some bit of shift of business that happened from September to October, because we have an impact of Diwali because of our product, nature of the product. We will see some upside anyway as a result of that. So, that is as far as quarter-to-quarter change is concerned. As far as the wholesale component is concerned, I think we had specifically said that we wanted to ensure two things. One is ensure that the market dynamics and the hygiene is kept in control, not come under pressure and take on rates, which later you then go on correcting, correcting either the inventories or the market prices. We suffered that last year. We wanted to ensure that does not happen. That has been held on pretty well overall, if you look at it. So wholesale markets have actually bounced back. Some of the markets, in fact, this is the first time the wholesale has actually done better than retail, as far as we are concerned, which is a very good sign. And not that retail, not that wholesale being better than retail, but wholesale itself has become stable, it has done pretty well across the key urban markets. Overall rural business is down, so it's not a large number that we are looking at, but at least overall, health-wise, wholesale has also done pretty well. So, so this is where we are. And as far as the rural recovery is concerned, as I said, we have seen offshoots of that. I can't say there is a broad-based overall rural recovery. That may not be correct. But we are seeing some bit of improvement than what we have seen in the second quarter. Okay. My second question on a very heartening growth of 37% in the NPD. But could you spell out what is the contribution which is settled in quarter two and maybe first half? I'm sorry, can you come again, please? New product segment has grown 37% in quarter two and first half, 19%. Yeah. Maybe you can spell out what is the contribution in quarter two and first half? Contribution in terms of, the NPD? Yeah. Of INR 229 crore, what is the contribution? Yeah. So as I said, I mean, I'll rather tell you the contribution of ADHO and, you know, reverse math on that. So ADHO was pretty high in the first quarter. It was about 85-86%. That has now come to about 81%. Our long-term aim is to take that number to about 50-70% ADHO. So this is about 81%. Overall, if you look at the half year, it is about 84%. 84% is what the ADHO contribution is. The traditional range is a very small range, so most of the others are coming out of your new product. Okay. Second on the organized trade, where is the contribution now settled? Because modern trade has seen a very significant growth, and even about three years before, we have done a very good job on e-commerce. So organized trade, put together modern trade and e-commerce, what is the contribution now? So it is closer to now 19%-20% is modern trade plus e-commerce, and if you were to add the canteen business, it will go to about 23%-24%. Okay. Okay. The next question is on the henna. You have now brought INR 5 SKU in Bihar. So obviously, the initial benefit would be there for setting up the pipeline and distribution gain. But what is the initial response? Because now it's almost 45-50 days we have launched the product. So is the pricing, is the format, is the channels, is this showing up encouraging response? Hello, pardon me. This is the operator. Please stand by. I'll reconnect the management. Hello? I'm audible. Yeah, I don't know why we got disconnected, so we are back. Yeah. So, Shirish, yeah. Yeah, I'm there. Yeah, you were asking some questions, the last one. I think we got disconnected while- Okay. So, I have the question which I, I think I missed. What I was asking, that you are now guiding the double-digit volume growth in the second half. So aspirationally, that's good, but, do you anticipate that there will be some pricing adjustments you are either taken now or in the future you will take and that will drive the volume growth? So pricing will not drive volume growth, I mean, it will drive value growth, you mean. So yeah, we have taken a bit of pricing fees as we said. We have taken a pricing fees in October, and we will take a little more pricing fees in December across other SKUs in ADHO larger packs, as I discussed. And, but it will not have material impact on the value, volume, value, volume change. It's not going to be material. So we are looking at the growth in spite of the price increases that we take. It's the other way I wanted to check that to lift the volume growth, do you need to do the pricing corrections? But you're saying now you will take some price increases. So how do you think the volume growth will be reaching high single digit to double digit? So as far as pricing correction is concerned, let me just clarify. So in terms of we do price benchmarking and indexation against competition. So as far as the larger packs are concerned, we see them a little bit price insensitive, and the elasticity of it, and that's where we are looking at a price increase. One of the smaller packs, and I would not like to call out at this stage, but one of the smaller packs where we see the indexation as far as competition is concerned, it's very high. We have gone much higher as far as premium, premiumness is concerned. There we will take a drop. Overall impact on the brand will still be positive as far as price increase is concerned, but one specific SKU, we will be taking a price drop, which has a larger penetration, which is one of the most maximum penetrated SKU and also a very large rural SKU. That is where we will do some price correction. Let me rephrase the question. You mentioned that you are inching towards 16%-17% EBITDA margin, and also said that, aspirationally, you are looking for high single-digit growth. So what I wanted to pick your brain, from the point, is volume growth at this time is more important than the, margin, or margin will be, will come as automatically as a function of volume? I think you will have to always keep walking the thin line. So that we had said even during the very tough period for us last year, where LLP, where we are a single brand dependent product. I mean, you can always go that you invest heavily into some of the newer products, but unless you have a very strong core, you would require it to be funded by some of the profits that you generate. So we would like to always walk that thin line, and we would keep investing. So if you look at this year's performance, unlike, let's say, last year, we have taken some of these brands, we have pushed them in terms of our investing in the brands. We have gone about the digital way first. And wherever we are seeing traction, we are and we are either scaling up in digital spend from the brand itself or getting into, like in Coconut, et cetera, we have got into TVCs and into further press, et cetera, across various country in and as well as TV. So that's how we would like to go about. Rather than go straight into conventional media and spend a lot of money and build a brand, we would rather launch brands, invest in them digitally, see where the tractions are, if required, selected market, selected channels, and where we see traction, we invest in. So that way, at least we manage our EBITDA, while also keep growing our new products, which I would like to think for the last few years, we've been slowly now starting to build up. As demand starts coming back and the investment that remains in ADHO, we would like to see that we are in a pretty better place than last year. Wonderful. Thank you and all the best, and Happy Diwali to you. Thank you, Shirish. Thank you. Thank you. The next question comes from Kaustubh Pawaskar from Sharekhan by BNP Paribas. Please go ahead. Yeah, good afternoon, sir. Thanks for giving me the opportunity. So I just want to understand the difference between the value and volume growth for this quarter. So value is unlike compared to volume share. You can explain this? So as I said, 2, 3 things. One is, very similar to the same story as the gross margin. Both your ADHO saliency has gone down a bit, with the new products doing better and the, price of ADHO is higher than some of the newer products like Coconut, et cetera. And the other is, even within ADHO, the pack mix would have an impact with the larger packs, where the INR per, per ML is actually lower than, lower than that on the smaller packs. So, so that has also an impact. The larger packs have grown more, so you'll see more volume growth than value growth. So these are the two things. Pack mix tilted towards larger packs and product mix tilted towards the new products. Right. Thank you. And my second question is on the market share for ADHO. So have you gained any market share in the last one year or so, in- Market share as far as ADHO is remained more or less same. I mean, across the year, max numbers you see, market share for ADHO is more or less in the same. We have gained a little bit as we see because of the Coconut, that's where the slight improvement is in the share. Okay. You take the overall market, including Modern Trade as well. Sir, on the distribution front, if you could give us some, you know, for numbers like, what is the reach currently and what are your targets in terms of the distribution? And also in terms of, key, you know, regions like South West region... you know, the focus point was more towards south, also, on that, expect, where are we currently in? So are you referring to Coconut, or are you referring to overall ADHO? Overall. Overall, overall. Then the focus is not specifically south, obviously, because we are more a northwest and east-based company. North, our distribution is anyway pretty strong, and we continue to look at more the quality of distribution, more into retailing and improving our overall WB so to say, as a result of what we work to do. As far as the west and east is concerned, that's where we are looking at distribution expansion. Some of them may not be the ADHO route. I mean, we have seen that happen in Maharashtra, where the Coconut route has helped us improve distribution, so that's where we are pushing our distribution. Our distribution numbers remain at that 8.5 lakhs to a little higher than that. Which includes that also from the vans, which is about closer to INR 2 lakh, which is what we run about 500, 450-500 vans across the country. Which has also helped us build our overall portfolio, and we intend to continue this and look at specific markets which we would want to take up for our focus, increase the van direct distribution as well, so that at least we can increase penetration of some of the brands that we would like to take up as well as GT products. Okay. But overall reach, any aspiration in terms of, you know, expansion in our reach? So rather than quote a number specifically as such, I think our overall, I think, direct reach aspirational number is about 10 lakhs, but that is not something that we intend to do in a medium to medium, short to medium term. It's more of a, a long-termish kind of an approach, which would mean the expansion that we are looking at, at this moment in west and east. So in some cases of the south to start with, and maybe in the larger, larger south in a little longer time. Right. And the last one on the competition part, that competitive intensity has gone up. So in that context, how are we, you know, positioned in terms of competition? So yes, absolutely. The competitive intensity, given that the market demand is subdued, the competitive intensity has gone up, and you will have to react both strategically as well as tactically. In certain cases, you might have to react tactically to look at competition and thwart it, and I think we have done some good work in certain channels. I would not like to specify. But good work in certain channels to thwart competition as far as ADHO is concerned, that's what we have been able to see. In certain channels where it's not very margin positive, we have tried and let it go, because we would not want to go to a situation where you would—it would be difficult to return back to that. Some of them we would like to let go because we think that those are not losses that we are making. That is something that we can always fall back as the deep discounting stops. So that is what we have taken up, but in certain cases we have reacted, and we have got a good gain. So that's how you see that overall, for the last five, six quarters, our hair, hair oil's overall performance have remained quite good. Yeah. Thanks. Thanks. Thank you. Thank you. Thank you. The next question comes from Varun Bang, from Bryanston Investments. Please go ahead. Yeah. Thanks for the opportunity. So, if you see, when we started our journey around NPD, we focused a lot on e-com as a channel, and the idea was eventually to place some of these products in the modern trade. So where are we in this journey, and how do you see overall progress and acceptance to some of these new products in the other channels? I just extended further, actually, to, for modern trade and then to also, general trade. And, if you look at it, it's actually not really only e-commerce. We have also looked at products which we have simultaneously launched in modern trade and e-commerce together as well. Just as I was saying, the lotion is a classic case where we launched it in both places. There have been products which have gone the reverse way also. Henna, for example, was launched in GT. We are now seeing great traction in modern trade, where one of the retailers has listed it in 300+ stores and seeing good off takes happening. So, so it is both depending upon the nature or the category of the product. Our idea would be to take, unless it's a very premium niche kind of a product, to take it through omni-channel, you know, access is what we would like to give the products. Some of them have taken through the e-commerce, like, for example, Coconut started with modern trade and e-commerce, and I just said that, today general trade contributes to more than half of the contribution, and this is what we would like to think that it will, so it can only further go up as far as contribution is concerned. So we'll keep looking at the channels for different products differently. Some of them, GT, going into the modern trade or in the, let's say, organized trade channel. Some of them launched in the organized trade, pushing it back to GT, right? Finally, at the end of it, the brand has to make sense as far as both in terms of what it wants to do in the market, in terms of the size as well as in the presence in that category, as well as, as far as us is concerned, as far as the gross margin, the EBITDA that the brand delivers for us, and that is what we are looking at in the- Would you say the strategy is still evolving for us? Strategy is, Sorry? Is still evolving for us? Evolving? Yeah. No, it's not an evolving strategy. It is a question of every product having a different strategy of its own. I don't think the strategy is evolving in terms of what we wanted to do. We wanted to strengthen our hair oils portfolio, have a comprehensive range of products. We wanted to broad base our, rather, use our equity of Almond Oil, extending it across various products.... various products in skin and care. That is something that we are pushing. The third leg is what we are saying, where Bajaj name can be used as a, this thing in Indian-ness ethnic range, whichever way you call it, in launch products, where you can use the Bajaj equity, and we'll maybe launch another category, et cetera. That is a little further. In terms of what we want to do and how we want to do et cetera, is more or less clear with us. All I was trying to tell you is that every product will have its unique approach. Not all of them will not have a strategy which is fit for all, one strategy fitting for all. So some of them, as I said, will be through GT, extending further into Modern Trade, some of them the reverse, et cetera. Yeah. Okay, I got it, sir. Can you talk about key challenges or difficulties that you face in placing and scaling some of the new products? What is your approach in dealing with these difficulties? So some of them will, as you see, new products in, in FMCG or mainly any consumer category, you will always have to be fast to, fast to try out and fast to fail and decide what we want to do. And that is what we are exactly doing. Some of the ones that we have, let's say, learnings from last year, Coco Onion, for example, we spent a lot of time, a lot of money as far as the investment, and then, we realized from the marketplace that maybe the proposition is something that needs to be altered. I think this year that approach has changed. We are launching products, looking at some of them, if they are working, if we see traction of it, we keep investing, scale up investments. Wherever we are seeing, maybe this is not what is working for us, either go back to the drawing board, reformulate the product or reformulate the proposition itself and come back, rather than spend too much time delving on it. That's how we are today seeing a set of brands slowly emerge, a set of products slowly emerging. As I said, the Freedom Story has started taking traction. The new Almond Drops extensions, we are pretty comfortable with. Henna has started giving us everything in Coconut Amla. At least there is a portfolio which is slowly starting to evolve as far as we are concerned. Okay. Thank you. Thank you. The next question comes from Hiten Boricha from Sequent Investments. Please go ahead. Hello. Yeah, hi. Yeah, hi, sir. So my question is, you gave the number, like, 81, you gave the contribution from the ADHO in this quarter was around 81%, right? And the balance is from NPD. Balance is NPD and traditional portfolio, which is margin. Yeah. Okay. So can you give the same number for last quarter as well as the corresponding quarter and sequential quarter? Last quarter was 86. I told you 86, and overall, H1 is 84. 84 for H1, and balance is from NPD. What is this number for H1 FY 2023, sir? H1 FY 2023 will be closer to, I think, 90, around about 88%, mainly because if you remember last quarter, we last year also, it was pretty high because we had just launched a soap. We have gone natural with our coconut, and we had also launched our Coco Onion. So the three products had been launched. A lot of GTM had happened, and then, so Coco Onion, et cetera, had to be withdrawn back. So that time it was few set of products which had gone just for GTM, so the numbers were high. These are products more, hardly any GTM numbers are there. These are actual sales that are happening. The secondary numbers are similar to the primary numbers as far as this year is concerned. Sir, also, you have the similar number for Q2 FY 2023 as well? Q2 FY 20- FY 23, yeah. The number from ADHO. Yeah. Q2 FY23 will be just a little lower, lower than this year. About 87-88%. 87-ish%, yeah. Eighty-seven percent? Yeah. Okay. Okay. Thank you. The next question comes from Soham Samanta from Emkay Global. Please, go ahead. Yeah. So thanks for the opportunity. So sir, normally, you know, we give this value and volume growth for the sector as well, but this time it is missing. So just wanted to check in rural, like, what is the volume growth this time? Is it showing slightly negative till now? In terms of the market, you are saying? No. In the volume, in rural, as a market year. No, that is for BCCL or for the market? For market, sorry. Oh, for the market. So, so it is showing signs of recovery. So it is signs of recovery and rural is still lagging out. But last time it was negative 1.6%, right? But what is the number this time? It is just coming towards a little positive. Okay, positive. Just a little positive as far as off-take numbers are concerned. Okay. What is the value? Just about marginally positive as I said. Marginally positive. Second thing is like, in your ADHO extension, these products, like the body lotion, shampoo, what is the premium you are charging right now? So they are, say, put at the same price as, Dove, et cetera, as far as the shampoo is concerned, Nivea, et cetera, as far as, lotion is concerned. That's- Okay. Okay. We are putting it at the premium, premium end, yeah. Almond Drops, that's what the proposition of the brand is. You don't want to take any price hikes in this particular extension portfolio right now, right? No, we have just launched it, so we are not looking at a price hike here. These are the just launched products. In August, we launched it. At this current moment, there is no pressure of a price increase. We'll see how the market behaves, and then we'll take a call for that. At this moment, the listings are over, the offtakes have started. We are seeing good responses. At this moment, we don't want to disturb the dynamics of the process. Got it. So thank you so much. Thank you. Thank you. That does conclude the question and answer session. I'll now hand back to management for closing remarks. Thank you once again for bearing with us on this call. I think the quarter, as you have seen, the markets have been quite tough as far as the rural markets are concerned, but we are seeing green shoots of it coming in. But also the fact that as an overall, the company seems to have the basics that we wanted to get right, have more or less fallen in place. The modern trade e-commerce business continues to do well. International business continues to do well. The NPD portfolio has started doing well. As far as the GT is concerned, more or less everything is in place as far as the business, as well as our people orientation, et cetera, is concerned. It's just that the market is slowly now that we see some shifts in positive direction, that is what we would like to encash. For the last five quarters, we have always had good growth. This quarter, as I said, also had some impact because of the September, October shifts that we see. But overall, the health of the company seems to be much better than what we were about five, six quarters back. The NPD portfolio is scaling up well, which is a good sign. So most of the strategic pillars that we have taken up as far as the company is concerned, whether, as I said, we're looking at the entire NPDs, and I listed down what the NPDs were. Scaling that up in terms of looking at the international markets and other channels, most of them are working well. So we will continue to do more of the same. And as we see markets becoming better, we look forward to reaping the benefits of it. So thank you so much once again for bestowing faith on us. I wish you a very, very happy Diwali and a happy festival season ahead. Thank you so much. Thank you. That does conclude our conference call today. Thank you for joining us. You may now disconnect your line.