Ladies and gentlemen, good day and welcome to the Bajaj Consumer Care Q2 FY25 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 within the conference call, please press star, then zero on your touch-tone phone. Please note that this conference call is being recorded. I now hand the conference over to Mr. Karan Bhuvania from ICICI Securities. Thank you, and over to you, sir. Thank you, Siddharth. Good morning, everyone. It's our pleasure at ISEC to host Q2 FY25 Results Conference call for Bajaj Consumer Care. To the management, we have Mr. Jaideep Nandi, Managing Director, Mr. Dileep Kumar Malu, Chief Financial Officer, Mr. Richard D'Souza, AVP Finance. Now, I'll hand over the call to Mr. Jaideep Nandi, sir, for his opening remarks, post that we'll open for the Q&A session. Thank you. Thank you so much, Karan. Good morning, everybody, and thank you all for participating in this Q2 FY25 earnings call. Let me take you through the performance of the company for the second quarter of this fiscal and half year ended 30th September 2024, before we open the floor for questions. The consolidated sales for the company stood at INR 230.7 crores for the second quarter and INR 472.4 crores for H1 FY25. On a consolidated basis, Q2 sales declined by 0.4% on a year-on-year basis. On a standalone basis, the decline was 1.4%. The consolidated volume grew by 1.1% in the quarter. The demand conditions in urban remained sluggish, while rural is seeing some signs of recovery. The gross margins for the company in Q2 FY25 on a standalone basis stood at 52.5%, and for the six months ended, gross margins at 53.9%. The decline in gross margin is primarily on account of adverse product mix and higher RMO and copra prices. The standalone EBITDA stood at 34.9 crores, which is 15.5% of sales for Q1, while for H1, the EBITDA was at 73.2 crores, which is 15.8% of sales. The PAT for Q2 was 33.2 crores and INR 71.2 crores for H1. The General Trade business registered a mid-single decline in Q2 year-on-year. The rural business performed better during the quarter and grew on Y on Y basis. The demand in urban remained sluggish, resulting in single-digit decline. The retail channel remained steady during the quarter, as well as in the first half of the fiscal year. The wholesalers were the dead heartbeat. Our Retail Loyalty Program for top urban sellers delivered strong results, achieving a 27% growth in Q2 FY25 and 21% in H1 FY25. The program contribution rose to 24% in FY25, up from 19% in H1 24. This will remain a key focus area of the company, basically the top retail loyalty program. The RTM revamp Project Aarohan undertaken with the leading strategy consultant is well on its way. From the previous quarter, it aims to enhance distribution, particularly in high-potential towns and villages, while optimizing representation in lower-potential towns. This project is also looking at improving sales enablement across and sales development functions to drive uptake. The pilot implementation started in the quarter in two states of UP and MP has started showing promising results on key deliverables. The pilot led to improvement in representation from Sub-D to DB by 40%-50%. Q2, approximately 250 new towns in UP and 30 new towns in MP were added to the existing distribution network. Direct distribution to new urban outlets added has been increased by about 1.2x. The weekly servicing of high-potential outlets in TLP towns has also increased the throughput from these outlets. In the other initiative of geotagging urban outlets, we achieved more than 80% tagging till now of the entire country. As part of next steps, geofencing has started in key states of Maharashtra, MP, and UP, and is expected to be completed in the coming quarter. This initiative will help us enhance sales for efficiency as well as optimizing cost of sales. The organized trade continued to deliver good performance during the quarter. This channel registered a growth of 10% year-on-year in Q2 and now contributes to 30% of our domestic sales. In General Trade, conscious steps taken to correct distribution inventory has resulted in about five days inventory correction by end of September from the beginning of the financial year. Coming back to organized trade, modern trade business grew by 4% in Q2 year-on-year. Independent chains, along with one national player, continue to perform consistently well. While on the institutional business, it registered a strong growth of 67% on year-on-year basis. E-commerce continues to do well, registering a robust growth of 32% year-on-year. This channel contributes now to about 13% of our top line in the quarter. Almond Drops Hair and Skin Care range and Bajaj 100% Coconut Oil continue to perform well in this channel. These brands are gaining traction on major platforms and now contribute to about 8% of the total business. Quick Commerce channel grew by 42% year-on-year with significant scale-up across all leading quick commerce brands like Instamart and Zepto. The international business continues to deliver strong double-digit growth momentum, registering a 36% growth year-on-year. Bangladesh demonstrated visible resilience and witnessed doubling of top line on back of good execution and distribution in spite of unrest in the country. We continue to invest in our brands in Bangladesh through digital marketing engagement activities. These activities help us reach about 9.7 million consumers and 20 million impressions in Bangladesh. Print ad in special memorabilia edition helped us generate goodwill with our channel partners. This was during Eid in the edition called Prothom Alo. GCC and Africa region delivered a 22% year-on-year growth led by KSA, that is Kingdom of Saudi Arabia, Qatar, and Kuwait. We expanded our presence in UAE by adding 100-plus stores across the country in Q2. The rest of the world region continued to deliver strong performance and witnessed about a 50% year-on-year growth. The company delivered strong growth across all the identified key markets of USA, Canada, as well as Malaysia and Australia. Delving into our brand performance for the quarter, ADHO saw a low single-digit decline on a year-on-year basis, primarily due to decline in mixed packs. The large packs continue to perform well with high single-digit growth in four specific packs of 650 and 750 ml. 190 ml red bottle continued to scale up well and registered a high single-digit growth. Sachet saw high teens growth on a year-on-year basis on back of increased distribution. During the quarter, we launched a 285 ml new flip-top pack for added consumer convenience. This also helped us in lowering our packing material costs. For the festive season, we launched two different special hair nourishment kits with ADHO and Hair Care Range, as well as ADHO and third-party hair dryers on e-commerce platforms. These have been received very, very well from the customers this festive. Digital marketing for ADHO expanded its incremental reach by 10% through various platforms like YouTube and OTT shows, gathering 35 million views. Social media efforts, including deployment of 60 influencers coupled with trending content, led to improvement in engagement rates of around 5.9%, which topples the hair oil industry by far for all the exposures. Our Teachers' Day post was featured on Ads With Benefits: a popular Instagram page with 111,000 followers that showcases outstanding marketing campaigns and topical posts by top brands. Almond Drops Hair and Skin Care Range saw a growth of 33%, reflecting strong consumer traction. Drops shampoo and conditioner performed exceptionally well and earned an average rating of 4.3 stars from 5,000-plus organic ratings and 350-plus reviews in major e-commerce platforms. The Almond Drops Ultralight Moisturizer for Summer Use, along with the Winter Lotion, saw an uplift in e-commerce channels on account of improved display images, new pack launches, and campaigns. The Almond Drops Soap, which is consistent offtake in modern trade chains and e-commerce channels, with focus on various bundle packs offering based on the retailer. The Almond Drops Serum achieved 20% year-on-year growth in H1 FY25, aided by display and influencer support. Bajaj 100% Pure Coconut Oil continues to deliver strong double-digit growth. We continue to witness consistent gain and nearing double-digit market shares in traditional Bajaj stronghold states. The market share in Maharashtra also saw an improvement in Q2 FY25, supported by media initiatives and distribution drives. To enhance the brand market reach, in general trade, specific SKUs of 300 ml jar and bottles were introduced during the quarter. We also launched a 1.2-liter jar for one major e-commerce platform. Digital marketing campaign across platforms delivered remarkable results, again achieving 35 million views and an impressive 1 million clicks. Pricing interventions were taken in Q1 as well as Q2 to offset the impact of rising copra prices. As of now, we have taken 6% in our Bajaj 100% Pure Coconut Oil, and we'll continue to monitor the copra prices to see how much further pricing will need to be taken. During the quarter, we relaunched Bajaj Gold 100% Pure Coconut Oil with improved packaging and formulation for the East and Northeast market. The product is now available in three SKUs of 100 ml, 200 ml bottles, and 175 ml tins. The GTM targets for both primary and secondary were exceeded. The initial product feedback on this brand has been very encouraging from both the channel partners as well as consumers. With the launch of this offering, we expect to gain market share in coconut oil category in the East instantly. We continue to make good progress in diversifying our portfolio, with the NPD and traditional portfolio now contributing 20% with a double-digit growth in H1 FY25. On a three-year basis, this portfolio has been in excellent shape. This highlights that our strategic pillar of portfolio diversification. During the quarter, the LLP prices saw a marginal decline due to weak demand and reduction in crude oil prices. Refined mustard oil prices strengthened by about 11% year-on-year, driven by higher import duties on all edible oils and limited mustard availability. The copra prices also saw a substantial increase year-on-year, as well as sequentially fueled by higher demand. Both the latter had an adverse impact on gross margins for the quarter. Multiple initiatives have been taken to reduce mineral oil structurally, which will give us sustained benefits for the long term. These initiatives have resulted in savings of over INR 2.5 crores in the first half of the current financial year. Our focus on increasing productivity through smart manufacturing programs and use of technology has resulted in improvement in productivity by 6% at our Guwahati facility and 14% at our Paonta Sahib facility in this year. We remained committed to ESG goals by optimizing processes to reduce water consumption and energy consumption at both plants and pursuing water positivity in line with the ESG targets. The key initiatives to lower carbon emission include automation and installing advanced machines, energy-efficient compressors, and Miyawaki tree plantation projects at our plants. We implemented rainwater harvesting projects at our plants, which led us to being about five times water profitable. TSI initiatives through rainwater harvesting and sustainable agriculture practices undertaken during H1 have positively impacted more than 11,000 families across 420 villages, mainly in UP, Rajasthan, and Maharashtra. To sum up with rural growth continuing to be resilient, sluggish demand in urban expected to have bottomed out. We expect demand conditions to improve going forward. This coupled with our thrust on initiatives, our strategic initiatives, expanding the distribution reach through Project Aarohan in general trade, portfolio diversification, freeing up organized trade, freeing up international business, we are confident that our performance will track well and achieve sustainable growth in the near to the medium term. With this, I end the opening remarks and open the floor. Thank you very much, sir. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question is from the line of Abneesh Roy from Nuvama Wealth Management. Please go ahead. So thanks, sir. My first question is on the geotagging and geofencing. What exact benefits will come in the urban areas once, in November, all the outlets will be covered? And how common is this with the larger hair oil companies? So will it be more that you come at a level playing field with them in the urban areas, or this is something different versus the larger players? That's absolutely correct, Abneesh. We'll actually come level playing with most of the larger players. I would not say all the larger players, but most of the good practiced FMCG companies all have done geotagging. And geofencing is one step higher. So I'll just explain. So geotagging is basically you go to each of these retail outlets and basically tag the outlet so that you know exactly the longitude, latitude of that place. So first and foremost that you figure out is that what you are reporting in your system, in your both DMS as well as SSA, etc., are actually shops which actually exist. And in this, there'll always be a little bit of a churn. You'll actually find that there are phantom outlets. This has happened for all companies. We are also seeing there are some not very large numbers, but in certain places physically, that actually physical shops are not there. So what happens is, as a result, your efficiencies, the moment you identify the shops and actually tag the shop with a specific location, then even when your ISRs, etc., are visiting, then if you are reporting 40 outlets, they'll actually have to visit 40 outlets rather than have some 10 outlets which are phantom outlets, which actually just visit 30, but actually you are reporting 40. So this efficiency will come in. Fencing is one step forward where after you have tagged the outlet, you actually fence it, whereby you can only take the order from that shop when you have reached that shop. You can't take an order for a shop, let's say, two kilometers away, so then it's absolutely perfect. So fencing is a little more hardcoded, so we are trying out with a few states to see how it will work. We will not go ahead with all the states also at this stage, but tagging is something that we want to do so that we have an absolutely clean retail map as far as entire urban listing in the country. So we have finished about 80%. We are now near completion, so we have a full map of where our outlets are, and now when you add, you will actually be also tagging them as we add them. Earlier, this was not happening, so this has been done in the last maybe couple of years by some of the top players. So we are just going to do that as well and be at level playing field with the top players. Many of the large players do not have that. So to understand this better, ultimately, when this is fully done and there is some time for execution, this helps revenue. Does this help cost, or does this help in terms of better selling of new product? Because sales guy will have to go physically to the store. Because the phantom store, which you explained, it seemed that virtually things are being managed, so actual effort may or may not be there. So could you tell us revenue, this will help, or in terms of cost, this will help? So it will help both. So if you look at, see, cost to sales will clearly improve. It will become better because while you are reporting that you are going to 40 outlets, you are actually going to only 30. So now you'll have to go to 40 new outlets. The moment you go to these 40 new outlets, because if that is your, let's say, effective mandate, you need to visit 40, then you will have to identify those new 10 outlets and go to those shops. So two things will happen. Either you'll reduce the number of people by looking at the geography if such outlets don't exist. But typically, that does not happen. Typically, what will happen is those 30 that the fellow was doing in the beat, he will have to add 10 more and do that coverage. So it will be a mix of both. There'll be some maybe pruning of one or two ISR territories, etc., but most of them will actually have to physically add these outlets to ensure that this effective mandate is covered. So it'll both help in cost to sales as well as in terms of number of outlets that you add. My second and last question will be on the pure coconut oil business. You have done good scale-up in those four states where you have called out. So if you could tell us, one, there is a very sharp inflation in copra. So have you also passed on to the end customer similar to what the market leader has? Second, for example, this 2.1% market share in Maharashtra in coconut oil, where has this come from? Is there repeat purchase happening? I'm sure you are offering more value to customers versus the market leader, which is fair because you have entered late. But is the repeat purchase also happening, and how is the market leader retaliating? Because they are extremely large. They have much better sourcing advantage than you because it's not possible for you to have the same sourcing advantage. There's no comparison in terms of size. So if you could also talk on profits, how are profits in this business in terms of gross margins? I'll start with the second last premise of yours, which is what I've been countering for quite some time, and I personally think that is a great work done by our supply chain team, whereby if you track because for copra price, because it's a single commodity price, we have a good understanding of who's buying at what price. Unfortunately, because of our strong backing, we have been tracking for the last eight, nine quarters as to what kind of prices, let's say, everybody is buying versus us. And in quite a few cases, we have actually had a better pricing. It might be a little difficult to understand why a player which is much larger can do things because some of it is also based on your forward purchases, etc., because some of them will have to be speculative purchasing in terms of a little bit of advance too. So it can work both ways. If you purchase in advance, if the prices were to fall, somebody else will get an advantage. But fortunately for us, the last eight, nine quarters, we have been able to at least track it well. Our market intelligence has been pretty strong because we have invested a lot of effort in terms of getting our entire backend right up to the copra farming to the farmers, etc. So good understanding, right from me downward to a lot of people have a very deep understanding of how this entire cycle works. And we have a sense of where the price is going, what is NAFED doing, what is in terms of NAFED doing, what is in terms of the Kerala Farmers Union doing in terms of pricing. So we keep a good track of that. So fortunately for us, we have been able to do pretty well in terms of purchase pricing, etc. There's not too much difference between what is purchased. It might be a little difficult to accept it from the outside, but that's how the truth is. The other thing that we have done is we are also pricing this mission-wise. We have started with about a 10% lower MRP as far as the larger players come in because that's how we wanted to do it. Now, if you look at the pricing now, the price gap, and that is something that we have consciously said that if we actually scale up our product and we are able to cross the, let's say, the three-figure mark and go beyond, let's say, an annualized basis, which we have done earlier itself, so then we will slowly bridge the gap. Today, that 90% is slowly moved towards 95%, and we tend to take this even further, basically the price indexation for that. So we intend to take some advantage from that. And the third thing that we talked about is in terms of pricing. Passing on the price, I think from the market that we get, in fact, one of the good things that I would want to report, which I reported even last quarter, is that general trade today is higher than modern trade plus e-commerce as far as coconut is concerned. I think that is a great proof of that the product has got well established in the marketplace and even in Maharashtra, etc. I'll come back to the Maharashtra question. So having done that, now we are clearly seeing that we are able to pass on the price narrative. As I said, we have taken about a 6% price increase as far as Q2 is concerned, and we look to even take further price increases in Q3 as we work on. So this is the price gap that we'll be making. As far as Maharashtra is concerned, it is not first-time seeding, etc., because the product was launched in Maharashtra about one and a half, about seven quarters back. So this is more repeat purchase where I think. So distribution is going up. In overall country level itself, we have more than 50% of our distribution is already coconut, I mean, of ADHO. What we have in ADHO, more than 50% of that is already. So that's a substantial number I would like to think as far as a new product is concerned. So it is tracking well all across, and I think we are in a position that we can make our coconut portfolio far stronger also. Yeah. Thank you. So thanks. Thanks. That's all from my side. Thank you. Thank you. Our next question is from the line of Vijay from Bryanston Investments. Please go ahead. Yeah. Hi, Jaideep. Good afternoon. A very basic question, which I think most of the people would have, and I really appreciate some of the things that you guys have been doing for a period of time. But if I just look back five years and see ultimately whatever you are doing is towards the betterment in terms of both revenue and bottom line. So five years back, we were at around INR 900 crores top line, INR 250-odd crores operating profits. And after all the changes that we have been doing, some successful, not so successful, we are still at the similar level of top line and half the amount of bottom line. So as an investor, how should we look at it now, and when will the numbers come, and when will the company grow? That's an absolutely perfect question. And I think if you look back five years back itself, we had said that this will be a hard uphill climb because a lot of the things, initiatives that we are talking about, some of the things that you said are good, are tracking well and good initiatives taken. We knew that all of them will be investment-hungry. There was no easier way out because ADHO had done great work, and ADHO obviously needed to grow, but the market needed to grow along with for ADHO to fuel its own growth. But we wanted to ensure that all the other levers that are required to be pushed are pushed because otherwise it would always be a situation where we'll keep looking for a higher EBITDA in the short term and not compromising the mid to long-term perspective. And that's why we looked at our modern trade e-commerce, which, if you remember, five years back, e-commerce was 0.5%. Yes, COVID did help, but the kind of numbers we are reporting is in, I think, best-in-class in terms of the percentages that we are using. The organized trade businesses are 30% savings, which I think will remain one of the best ones, given that there has been pressure in GDP. So this is one. We were to look at what beyond ADHO. ADHO, five years back, as you said, I mean, was a 5% contribution. Today, that contribution, or rather the non-ADHO, the product range beyond ADHO was just 5%. Today, that has come to 20%. And as you can see, all of those ranges, whether be the AD extensions that is hair and skin range, or whether be the coconut range, all of them have been expanding much better. Where ADHO remains where it is in terms of the market, if the market is declining, ADHO is also falling back. Yes, I would agree that there have been not sharp gains as far as ADHO is concerned. That could have only happened if you had gone into, let's say, the southern market or some markets where we are 100%. That I would admit is not happening. So all the tracking that we were planning to do, all the initiatives that we are planning to do, international growth, modern trade, etc., I told you, products, etc., all of that tracking has been. So the big difference that we have done during our projections at that time as today is that we did not expect the market to tank this badly, and especially in the last two years, the way we have been seeing, we have not predicted that. But I think the fundamentals, or rather the basic structure, the foundations of the company doing well have been all put in place, whether be systems, processes, people. I mean, these are all things which are never mentioned, but I think the kind of people, quality, etc., that we have built, I think, can now very clearly set for a growth. The market obviously needs to turn, and when the market turns, we are in a comfortable position. So two to three things quickly here, Jaideep, just to follow up on these questions. First, if I look at ADHO as a portfolio, if I look at last five years, probably the RM prices have gone up. So I'm sure our average product prices would have gone up there. And ADHO falling as a percentage of sales would mean that others should be able to aid the sales rather than absolute sales remaining at the same level. So while we would have got probably INR 150 crores or INR 200 crores from new products, I'm sure your thought process would also have been that this would add to the top line. Unfortunately, that has not happened. That's the first part. Second, we've always maintained in the past that EBITDA margin should suffer, but company would maintain absolute level of EBITDA. In this case, the absolute level of EBITDA is actually halved. And this is also happening in the backdrop. When you look at last five years, most of the consumer companies have actually grown their top line by 50% on an absolute basis over a period of five years. So I think when I look at this and when I look at our performance, is it something that we need to actually rethink as to where are we going? Are we actually undermining ADHO? Is it actually something which we should be focusing on because that leads to larger growth? As far as ADHO is concerned, so let's answer all your questions in part. So as far as ADHO is concerned, if you look at all the levers that could have been pushed, are being pushed. So whether be looking at the entire digital aspect of it, bringing the entire digital part, earlier we did not have anything working as far as digital part is concerned. We created the digital marketing team, etc., and a lot of good work as far as the digital side of it has already happened. In terms of marketing campaigns, a lot of the thematics, etc., has been changed more, made it more topical and more relevant to the new-age customers. So that work itself has happened. As far as the product is concerned in terms of new SKU additions, newer packs, newer SKUs, newer in terms of initiatives as far as the packs, etc., themselves are concerned, a lot of it has already been in place. But yes, if the market is what it is, in spite of pushing the amount of, it has had its impact, yes, I would agree on that. Now, coming to the point that you said that all the other companies have had this growth and we have not, you are absolutely right. On the same point, you also need to look at how much has been contributed by new products or from portfolios which they already had. Fortunately, our portfolio is only ADHO and nothing else. All the other companies had portfolios. Whether all these competitors that you talk of, they have been able to place one portfolio or the other which they have been able to push up. If you look at, you dissect this growth in the last five years, obviously there will be some companies where only new products have achieved that. But most of the other companies have been from portfolios, either of acquisitions they had done earlier, which have now started scaling up, or portfolios they already had, which have been playing. Unfortunately, we did not have that advantage, and that is what we are setting up for. only other choice that we have had, we would have had, is do not pick up this new portfolio, do not take up the international business, just push on ADHO. I'm sure ADHO might have given another 2% growth over and above. I'm assuming, I'm not so sure. But in that case, I would think the company would have been maybe would have reported better EBITDA margins, but it would have been structurally much weaker, which I think is something that we would have wanted to avoid. I think we are in for a much better future than we are today. So last question then, Jaideep. Does that mean in the next five years? I request you to join the question queue for any follow-up questions. Just a follow-up. Just a follow-up to this. So Jaideep, in the next five years. Thank you. Our next question is from the line of Gaurav Gandhi from Glorytail Capital Management. Please go ahead. Yes. Thanks for the opportunity. So sir, as of now in the market, the way this e-commerce is growing in metros, have we looked at our arrangements with these e-commerce companies about showcasing our products and how are we looking at improving our sales from these e-commerce platforms and about the display of our products? Because it will be really, really important to grow our top line and get our products from the customer preferences. So your thoughts on that? So if you ask me, that is one area where I would think that we have not done as well as we would have liked. Even in the last conference, I mentioned that e-commerce has to become one of our key focus areas, and we have to just go upside down to ensure that e-commerce, we have growth which is far, far higher than what we have. We had a 42% growth as far as e-commerce is concerned this quarter. I think that is, if you ask me overall where my disappointment would be in terms of initiatives, this is one area where we have not done. And clearly, that's the focus area. I am sure that in quarters going forward, that you will see far, far better performance. 42% is good, but not good enough. I think it should be in triple digits, this growth rate, and that is what we are targeting. Clearly, the team, as well as the entire marketing, as well as the sales team, in terms of how the assortment should be, how we should be placing it, how we should tie up with all the key players, etc., I think that clarity is already there. We just need to ensure that that execution, which work has already started, will happen and we become a far stronger player as far as e-commerce is concerned. Clear, I don't think there is any dispute in that, and you have absolutely identified the issue right on them, actually. Yeah. Right. And the second question is, now despite every quarter growing revenue from new products, we are unable to grow the absolute revenue number, and it's still stable at 140. So can we come out with the assumption that there is some permanent loss of revenue in Almond hair oil category? I mean, your thoughts on this. Oh, you're not able to come with that theory. Because see, if you look at, I mean, just look at the current situation today. You look at most of the consumer companies reporting what they are reporting. And just look at just sheer numbers. If you look at food inflation, food inflation in April was 8.7%, May 8.7%, June 9.4%, then it dipped a bit in July, August, it went back to 9.2%. With this kind of food inflation that is happening and the real wage going at best at 4%-5%, you expect this situation to take a hit. Staples will do a little better. If the issues will take a hit, now the question is much broader. Do we trust the Indian economy and we expect the economy to do well? And if that does well, then this will have to come back, or do we not? It's a more fundamental question rather than a large consumer question. If we trust that, yes, the economy will do well, this is more a temporary phase, maybe a two-quarter, three-quarter, four-quarter phase, and this has to turn. If that is the case, then obviously it will come back. I don't think almond has lost any specific share as well. Our share has remained more or less steady at similar levels. So that will not. But yeah. That's right, sir. But looking at the choices in the market, market-making choices, तो ये accept करना सही रहेगा कि ठीक है, almond, hair oil अभी इतना consumer preference में नहीं रहा जितना पहले था। Accepting is better, or should we keep on expecting that there will be growth in the revenue from that category? I would think it will be the latter, mainly based on when the market. So as I said, Almond's acceptance hurt here, etc., is not something that I'll subscribe to. Yes, the market has gone down, and you see all the major players have this thing. Even the other very, very large players, other than coconut, other large players also have had the same thing. I don't think there is anything happening to their brand equity as well. This is just that the market is now under stress, so the cheaper products are selling, etc. When the market comes back, all of this will see again a natural growth back. There has been no shift, overall shift in the marketplace where the practices itself have changed. Hair oil usage has gone down. We track the Kantar data, look at household data. We don't see significant drops, etc., happening either in terms of hair oil usage or the frequency of use, etc., etc. So I think we remain quite down. Yes, the market conditions have been difficult. As the demand conditions turn, I think we would also bounce back. Okay. Thank you very much. I appreciate your request. Thank you. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants, please limit your questions to two per participant. For any follow-up questions, you may rejoin the queue. Our next question is from the line of Shirish Pardeshi, from Centrum Broking. Please go ahead. Hi Jaideep and team, good afternoon. Just two questions in the beginning. You said that non-ADHO portion is now 20%. Correct? Yeah. Yeah. So my question is pertaining to the overall hair oil business for us. So if you include coconut, almond, and all the hair oils put together, what is the volume contribution of non-almond oil in terms of volume? Non-almond oil? See, as I said, overall it's at 20%, and Almond Drops Hair and Skin range also is a substantial portion. So we'll keep it at that. I will not be able to split you exactly the hair oil versus the almond oil numbers. But this is where we are. 20% comes out of that, where coconut is a substantial number, almond is another number, as well as Almond Drops Hair and Skin. These are the three main contributors with other contributors here and there. So that will. I'm trying, Jaideep, I understand. I'm trying to find out the margin depletion story. If the Almond Drops price premium to coconut, and if the coconut portion is going to be stronger in terms of volume, how this margin story is going to pan out in the next three to four quarters? Because what you said that now you are now two and a half share in Maharashtra, and Maharashtra being a coconut oil market. If that volume comes in, what are the levers which are available? I mean, yes, cost efficiency is another thing which is ongoing. So correct point. So if you look at both almond and coconut, both of these portfolios which are the larger of the portfolios and the Almond Drops here, Almond Drops and hair and skincare range, obviously the gross margins are similar to ADHO. So there we don't have any issue. The almond and coconut obviously are lower than the Almond Drops too. Our expectation is the market improves, then Almond Drops itself will perform better. Almond Drops have not done well, so this margin looks depleted. The moment Almond Drops were to come back, we'll be seeing gross margin dilution going up. Okay. My second and last question on the net distribution or STR, if you have the number, if you can share, give me a little more depth in those four states where we have taken action on coconut. So what is our ND for Almond Drops and coconut? See, our ND is typically, as you are aware about, for about 8.5 lakhs as far as our 8.6 now as far as ADHO is concerned. And as far as coconut is concerned, it's already reached about 3.8 or close to that. So it's already 3.8 lakhs. 8 lakhs, yeah. 3.8 and. And specifically in Maharashtra, would it be much higher? No, it is all across. So Maharashtra is also tracking well, but I think the numbers are still a little higher on the northern side. So all your states of UP, UP, Rajasthan, MP, Punjab, Delhi also to an extent, Haryana to an extent. Yeah. Okay. Thank you and all the best. Thank you. Thank you. Before we take our next question, we would like to remind participants that you may press star and one to ask a question. Our next question is from the line of Kaushik Poddar from KB Capital Markets. Please go ahead. Yeah. Last time you have given indication that will be the turnover will be growing at a rate of around 10% or something for the next three to five years. So in the light of whatever consumer slowdown, rural slowdown, do you modify that forecast? Yeah. I think if you look at the mid-term, I would not like to modify the forecast because I think now that both rural slowly coming back, urban now bottoming out, we don't feel that it will continue to bottom out and there is a bottomless pit. So we don't think so. Yes, in the near term, there might be a bit of a pressure, but I don't think in the mid-term also. In fact, a little more than mid-term and mid-term, I don't see any pressure. Most of the things that we have now put in place should backward, so we should be back on full growth. So I am not going to revise the mid-term numbers as far as. Okay. Now, on the non-ADHO portfolio, is it something that you are trying to emphasize more than others? I mean, is this any product or any category that you feel has a higher growth potential than others? Good question. Two portfolios clearly. One is obviously the Almond Drops hair and skin range. I think we have been seeing good traction at shampoo, at conditioner. Conditioner is very small. The summer lotion that we launched with a good traction. Now the winter lotion loading is happening. Last year, we got some good responses from the winter lotion. We launched the hair serum sachets in the Bengal sachet market. In serum, we are seeing good traction as far as modern trade, e-commerce is concerned. We are looking at sachets, sorry, serum going across the country in general trade as well. So overall, Almond Drops extension portfolio or hair and skin range, if you may, we expect that has a good future. It will take, I mean, it's already showing good traction to become substantial and start contributing big time to the revenue and profit. It might take another two, three years, but I think clearly that traction has been seen. Last year, this time, I may not have been so confident, but today I can confidently say that we are seeing good traction in those products, those six, seven products that we have launched, and we will continue to push that. We are also seeing good traction coming out of coconut and, as I said, all the measures that have been taken to ensure that the profitability of coconut, obviously, it will not track as well as the Almond Drops profile, but as much as it can, which is still better than all the other hair oils. Clearly, we are focusing on everything that is possible to be done as far as coconut is concerned. So whether be the green coconut that we have launched in the eastern markets, whether be the blue coconut which has been launched in all the other parts of the country, some of the other products which we are planning to launch maybe in the coming quarters, etc., we feel that the coconut portfolio will be a large portfolio for Bajaj is concerned. The inherent strength of the confidence of the Bajaj household name and the quality that it will provide has stood us in good state, and that is something that we will do. So these two ranges clearly. There are certain other ranges that we have already in pipeline, but we don't want to launch it now because there are already so much in the portfolio in the pipeline. Until the market conditions improve, we would not like to launch at the phase two of the launches in some of the other products, but that is something also in the pipeline. So as far as pipelining is concerned, we are very clear at this stage, Almond Drops hair care range and coconut range, and not coconut oil only, but the coconut range. These are the two things we will push quite strongly, and we'll look at future as the market conditions. Coconut range means what? I mean, beyond coconut oil also? So beyond pure coconut oil, yeah. So today we have two pure coconut oils. One is, as far as the rest of the market is concerned, which is a pure coconut copra grade one oil. And the one that sells in the eastern part, which is similar to the market leader, which is a Shalimar oil, which is also a pure coconut oil, but that's not grade one. It has a roasted smell. It is a little different. It will distinctly have a different texture and feel. So that is what we are doing. These are the two products. We feel that there are two more other products that can be launched in that. The world is already there. Good gross margin profiles. They will also come back. Yeah. So I think one you can obviously understand is the value-added coconut, which we already had a Coco Onion that needs to come back. We will have to see when we can get launched, as well as another one we are looking at in that range. So there will be about three, four products in the overall coconut portfolio. Yeah. Okay. My last question, which is that, see, I stay in the eastern region. Okay. Fine. Fine. Fine. Yes, because I think there's a pressure also. Yeah. Yeah. Yeah. Okay. See, my question is, I stay in the eastern region. I don't see much of advertising or sales promotion in this thing. I mean, is it done at the shop level or something that I'm missing out? At least on the newspapers or magazines or anything, I don't see much. I mean, how is ASP tackled in, say, eastern region? So what we wanted to do, and that is what is the template that we have put for most of our new product list. First, we get into a GTM. Once the entire GTM is over and it already is the retail outlets, etc., which is typically for stage one. Then we get into both, either in complete local advertising or definitely POSM. POSM, you have already seen POP and POS already at the shops with various green T-shirts and danglers, etc. Those are already there. Already, we have had a digital content made specifically for the regional language in West Bengal. So that is already there. Some of it is already there. You may not have tracked it directly. We are now exploring whether we need to get into regional language advertising, etc., like we have done in Maharashtra and some of the others. That is something we'll have to decide based on how we want to push that. So yeah. Okay. Thank you. So the 10% medium-term growth stands, right? Yeah. Definitely. Good. Okay. Thanks. Thanks. Thank you. Our next question is from the line of Percy Panthaki from IIFL Securities. Please go ahead. Hi sir. So our overall EBITDA margin is around 15%, but it's a story of two parts, right? ADHO is quite profitable. Some of the new businesses or rather new products would be either very low margin or might be loss-making. So could you give us some idea as to what these two parts are? So if ADHO alone, if I look at, can I say that it's like 20% plus margin and then there is a certain loss on the remaining products? Can you give some idea on that? It's perfectly correct. It's not loss-making for all the products, obviously. So yeah, some of the products we are investing in, let's say most of the AD extension products, the EBITDA margins will not be positive. Some of them will not be positive at this stage. But the gross margins are enough for the 55%. So we are investing in some of these products. Some of the products like coconut, etc., they are positive as far as EBITDA is concerned, but not obviously in the range. So if you look at very, very overall, if I were to give you a 10, then yes, ADHO remains 20% plus. And the different delta between ADHO and the non-ADHO would be about roughly about a 6% difference between ADHO and non-ADHO. Right. Secondly, I just wanted to understand on ADHO, if I look at the sales versus pre-COVID, I think it would be flat to a marginal decline. And over a five, six-year period, the pricing has gone up close to 15%. So would I be right in estimating that versus pre-COVID levels, the volumes of ADHO are down about 15%? No, I don't think so. So if you look at the volume, the value sales, if I look at four-year CAGR is about 4% from 817. Sorry, give me a minute. So about, sorry, that's the overall thing, is about 780 to about 792. So that's about a 0.5% decline. And in terms of price increases, I think the overall price increases will be in the 7%-8% range. So yes, there has been a little bit of a drop, but not to the extent that you have. Okay. Okay. Understood. And can you give us some idea as to, again, on the margin, what is your plan? One is on ADHO. Do you expect to keep the current margin? Sorry, give me one minute. I just took out the data. The volume decline in a four-year CAGR as far as ADHO is concerned is minus 0.6%. This is the volume decline in ADHO, and the value growth is 0.4%. This is over what period, sir? This is over a four-year period. Okay. Okay. Okay. Okay. Four-year period, 2022, 2024. The difference, I'll just explain the difference in terms of the price increase, etc. 20 would not be a correct starting point because FY19, your sales was INR 880 crore. FY21 also was INR 898 crore. But FY20, because of the Q4 de-stocking last 15 days, it was only INR 820 crore. I think FY20 is a very low base to start off with. If you could either look at FY19 or 21, it would be okay. What I was trying to explain: look at FY21. If I take FY21, the CAGR is minus 1.3% and minus 2.7% respectively, value and volume. What I was trying to explain to you is the price increase. Part of it, what you have said is correct. But the way you would have seen also we tracking is a lot of larger SKUs have been launched. The 650 ml we launched, the 700 ml we launched. That price per ml is a little worse off as far as this is concerned, which will happen for a very, very large bag. The price will be better offering to the consumer. So that has also offset. The volume growth has happened, but the value growth has not. Compensation for that. So that's why, in spite of the price increase, the difference is just about 1.6% between value growth and volume growth. Volume growth is 1.6%. CAGR was lesser, three years ago. Understood. Understood. And sir, how do we look at EBITDA margins going forward? So I think that, as I said, we have been maintaining. So as of now, it's at 15.5%. We are doing a project as far as the strategy part is concerned. The strategy project, which is taking about 0.5%-0.6%, roughly about 0.6% from our EBITDA. So it remains about 15-ish%. So this will go through some bit of curve at this stage itself. But I think overall, the 16%-18%, which remains standard, I think remains very, very is what. But in the near term, have we bottomed out, or in the near term, it can go even lower? It's very difficult to project. It will be a function of what happens to the RM crisis where we take pricing action, how competitive action is, how demand. So it's a very difficult commitment to make at this. But this is what 16 to 18 remains our target, and that's what we are tracking. Okay. Okay. Sir, thank you very much. Thank you. Thank you. Our next question is from the line of Amit Purohit from Elara Capital. Please go ahead. Yes, sir. Thank you for the opportunity. Sir, just on the quick commerce side, you said that you were not satisfied. One, I wanted to understand the arrangement that you have with quick commerce and what are the kind of brands that are getting sold in quick commerce and getting good acceptance for it. So, as far as quick commerce is concerned, in fact, other than Almond, basically, we are saying the entire range. So ADHO, we are continuously looking at improving our assortment, all the SKUs getting listed with all our partners. That is obviously one. Ensuring that our availability is across all the regions, that is other things. In fact, we are at this moment linked. We are directly billing while Zepto is going to our distributors. But in terms of the product range, the product range we are pushing is obviously ADHO, entire range across all our partners as well as across the entire region, as well as the coconut is doing well on that as well. So we want to take it much higher than what we are doing, as well as the AD extension range, the shampoos, the lotions, the CMM as well. So that is something that we are also pushing. And what would be the salience of quick commerce right now? So quick commerce salience, as I said, is low at this stage, only at 6%, which we think can really scale up much stronger. Okay. And just the last thing on the extensions of ADHO, is the acceptance on quick commerce relatively higher, or it is too small to now talk about it? So wherever we are seeing responses, the responses are very, very encouraging. So that's where we are going very heavy on the AD extensions as well as quick commerce. So quick commerce, obviously, as you're aware, the margins at this stage, at least as of today, as we speak, are better than the larger e-commerce players. So that also obviously is an incentive for everybody as well as us. Fortunately, we have seen good traction as far as our AD extension, AD hair and skin range products are concerned, which is what we will have significantly further going forward, at least we are looking to see. Last on the channel mix itself, you highlighted that almost, I think, 30% of the sales comes from the organized retail, right? Is this share likely to go up? Is there any impact on our overall margins profile for the company? I think at 30%, we are already topping it out. I don't think we are seeing any significant increase because our major focus is to ensure the general trade, which has had not a very good performance comeback. That is what will be the effort. Yes, the 30% can go up a few percentage points here and there, but I think roughly topped out as far as that is concerned. 70-30 mix is what will be the new normal as far as what we think i. And why do you say that quick commerce would have better margins than e-commerce? See, it's just a power of negotiation as far as the two very, very large players are concerned. If you look at the two large players, I mean, given the fact that they also see that general trade, most of these companies are finding it difficult to scale up general trade. They also realize that we are the easy growth drivers, growth levers for most of the companies. So they also extract their pound of flesh, maybe not in the last one quarter or so as we see the quick commerce scaling up, and they have to also think. But other than that, both these two large players have been commanding their pound of flesh. So that is something at least gets a little neutralized because sales will not yet become larger. Now we're seeing that in maybe two, three quarters, these guys will also not be standing. I'm sure they will also be asking for their pound of flesh. But at this stage, this is how the dynamic is. Okay. Versus the e-commerce and versus even GT? Versus the larger e-commerce players. Okay. Okay. But versus GT, it would be lower, right? Versus GT is a bit lower than GT, higher than the larger e-commerce players. Okay. Okay. Thanks. That's it for me. Thank you. Thank you. Our next question is from Layan of McKinsey from Simpl. Please go ahead. Yeah. Good afternoon. I hope I'm audible. Yes. Absolutely. Yes. Yeah. Thanks for the opportunity. See, my question is, if I compare our first half cost base to first half of last year, we see our employee cost is still growing at around 10 double digits. Our other expenses, ex of advertisement spend, is still growing at 9%-10%. And as I understand, a lot of this investment has been going behind growing the GT channel and basically on the new products. Now, even on the new products, our sales growth has actually come down from where we were, and some amount of it is also based. So how do you see this spending sustaining versus the commensurate growth from the new product segment? Because even GT, which has been a focus area, is actually degrowing only. So how do we add this investment versus the returns which we are getting in terms of growth? Some points or some idea you can give? No, so I'm still not clear why you're saying that the new products are declining. The new products are. No, not declining. I'm saying the rate of growth of new products has actually come down from where we were. And I understand base is also playing out. But our personal cost, our other expensive cost is actually now incrementally more than the overall company top-line growth. So which means that our investments are happening behind new products, and that's also on the GT channel. But new products are growing at a lesser rate. The GT is actually degrowing, but our investments in terms of P&L behind personal and other expenses remain at a double-digit rate. So while we are investing, we are not getting the commensurate return, if I understand in a way. And this is on a first half to first half, not on a quarter-to-quarter numbers. Yeah. So new products, as you rightly say, now is at 11%. In the first half of the year, it's a 11% growth, which I think is still pretty decent. It is not a bad situation given the market condition. While overall, CAGR has been 32.3%, 32.3% we profiled over three years here. So I would like to think that the new products is continuing to perform very, very strongly. It is not that the growth rate has come down. I think the growth rates will keep increasing as these products get established for them because this is still in a scale up stage. Earlier, the growth rate numbers were much higher because of a lower base. The bases have gone up, but still, I think the growth opportunity still will be. As far as the costs are concerned, yes, some of them are a bit of a fixed cost. So that will remain in terms of other costs as far as we have seen. We have done some investments in Bangladesh, scaling some investments as we see the strategic project that is coming in. That's where the other expenses are coming up. As far as there have been some increase. Employee cost is something that you do not, unfortunately, have too much to say unless you want to downsize the organization. At this stage, we are not expanding the organization in a big way, but we are not looking at downsizing because wherever we have invested in people, etc. There will be some bit of restructuring we might look at in the general trade going forward after the Project Aarohan output completely comes through. We see where there is some cost optimization opportunities there. But in terms of others, I don't think there is much reason to press the panic button and reduce manpower. That is not a direction that we are in researching or planning to take. So if the sales number were not to go up with the average increment that happens, yes, this number will look a little on the higher side. That is something that we'll remain with because we think people is an investment we'll continue to keep on making, not by increasing people, but having quality people so that we can have this growth coming back to our organization. I take that point, and it's a very valid point. We are not downsizing. We want to grow from here. But if I broaden my perspective over the last 8-10 quarters, the investment behind people has been pretty aggressive. So if I consider average has been 12%-13% growth. So from a base of INR 20 crores, we are now at INR 30 crores on a quarterly basis, and we've invested, which is a good point. What I'm trying to understand is, are we getting enough efficiencies or productivity from these investments? Because in this point was raised that where we were, we are still there in terms of sales. Maybe NPD and all has come, but while people investment and everything has happened, but the starting line where we started, we are still there in a way, so how do you see this productivity improving on the people side? So as far as the starting point is concerned, my point is the alternative that we will need to look at. If we had not done this investment, we would not have been where we are today. I would like to think that with only ADHO or just about year-old periphery being there, we would not. It's a speculation. So obviously, you cannot really come to an absolute number on that, but only with ADHO firing, I think we will not even be able to hold ground as we are doing. Other is the investment that needed to be made, have been made. I think, yes, the numbers have not flown through. But the question is then, do we downsize? Finally, it will have to come back to whether we downsize or whether we are over-invested in terms of. Unfortunately, when you have a smaller organization, most of the costs will look a little higher because that can only be covered through economies of scale, which we have not been able to have, which I would absolutely admit. But yes, market conditions have a role to play. And as the market conditions improve, we expect these numbers also starting to look far benign than they are. Okay. And if you can allow me one more question. See, I understand market has been difficult, and earlier rural was bad. Now urban is weak. But from where we are starting, in a way, we are starting or coming into a space where we were not present, so we are starting from zero, so in the last three years, in terms of the new products and all, I'm saying on the ADHO, we were always present, but on new products, we started from zero. How much of a market condition has a role to play in order to grow? Because if I look at the segment of overall oils, and our whole idea was that we want to broaden our prospect only from ADHO to overall oils as a market, the market is pretty large from where we were starting, so while market conditions are bad, but how does it impact us in terms of not able to scale up or probably grow at a much faster rate? What are the challenges? If you can just help me understand that. So I'll just explain that very quickly. And I think it's a pretty good question saying that if you're a small player, why can't you scale up? The market is that large. It doesn't matter whether it grows or not. Unfortunately, that actually works the reverse way. In fact, when the market conditions are difficult, the larger players have the muscle to bulldoze that market and be able to grow. And it is always a smaller player who suffers. So it is typically that's how the market dynamics would work because the larger player will do its best to protect their market share. And I think so while from a 10, you are looking at 100, somebody who's at 30 will be in a better position or a 40 will be in a better position to protect it and be aggressive rather than a person who's 10. Unless you are a, let's say, a B-indexed company where you want to just invest for the next five years, forget your bottom line. And that's a different story. That's a different thing. But if you're a traditional company who's trying to protect it, the benign market will always be better. You look at this coconut. Coconut is a classic example of that. When the copra prices keep going up, the market becomes difficult. The smaller players nearly get wiped out. The unorganized sector gets wiped out. The larger players do. Mobile series are the other way around where copra becomes benign. The smaller players become pretty. I will not say significant, but have a growth. So this is how it will play out for larger markets. So this is market dynamics to where it will come. Sure. Thanks. Probably it will take a lot more time to understand, but thanks a lot for your explanation. Thank you so much. Yeah. Thank you. As I know for the questions, I would now like to hand the conference over to the management for closing comments. So thank you so much for patiently asking the questions and the responses. Yes, the market conditions have been difficult. I think nobody can deny that it has been a rosy picture out here. But yes, I think as far as the company is concerned, we are very, very firmly committed to drive all the growth levers that we have put in place to continue to invest on those because we feel as the demand cycle turns, we will be in a far better position to capture that demand where we have started. So we are very, very optimistic that in the near future, as the demand situation comes back, we'll be able to leverage all our strength and bring back growth in a far stronger manner than we had earlier capability of. So with that, I'd like to thank all of you once again, and let's talk about the rest of the day. Thank you. Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. We thank you for joining us, and you may now disconnect your lines.