Ladies and gentlemen, good day. Welcome to Bajaj Consumer Care Q1 FY 2027 earnings call, hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Manoj Menon from ICICI Securities. Thank you. Over to you, sir. Hi, everyone. It's a wonderful good evening from Mumbai to all of you. Bajaj Consumer Care is a company covered by ICICI Securities. It's one of the top picks and high conviction buy-rated stock for us. Today, it's our absolute pleasure to host the management for the Q1 FY 2027 results conference call. The company is represented again by Mr. Naveen Pandey, Managing Director, Mr. Dilip Kumar Maloo, Chief Financial Officer, and Mr. Aakash Gupta, Head Finance. Over to management for the opening remarks, post which you will get the opportunity to interact with the management. Thank you. Thank you all for the quarter one FY 2027 call for Bajaj Consumer Care. I'm happy to share that in an extremely dynamic and volatile environment, we've been able to deliver another good quarter. In this quarter, the company was able to deliver a revenue of INR 341 crores with a growth of over 28%. As we are aware, this quarter was impacted with unprecedented volatility in raw material prices due to the West Asia war and its cascading impact. As an organization, we took selective and calibrated price increases and MLH reduction across our portfolio to protect our margin. Despite these measures, we saw our gross margins drop from 63% in the sequentially last quarter to 61.8% in this quarter. Please note that while this drop was sequential against quarter four, it was a significant improvement over quarter one FY 2026, against which we saw 510 basis point improvement. We continued to invest in this quarter behind our brands. Maintained our advertising spends at 14.6%. Chose to optimize on the other fixed costs, including employee costs and the other fixed costs, where we were able to take advantage of operating leverage and deliver strong savings against the same quarter last year as well as against the sequential quarter. In this quarter, if you look at it, we have been able to deliver a total savings of over 600 basis points on these lines against quarter one FY 2026. As a result of all of these, our EBITDA on a consolidated basis for quarter one has doubled to deliver an absolute EBITDA of INR 84.4 crores, which translates into a margin of 24.7%. The corresponding PAT for quarter one stands at INR 70.7 crores with a margin of 20.7%. The current quarter saw a continued momentum in our general trade channel, which grew in line with organized trade, with both channels delivering growth in strong 20s. This performance was extremely broad-based, with urban retail, wholesale, and rural delivering strong growth. Our rural business, which recovered in H2 of last year, saw strong growth in this quarter and grew in line with the urban. Within the organized trade, both modern trade and e-commerce performed well, with growth coming across sub-channel and customers, with the exception of institutional business, which was weak for us. Institutional business is less than 1% mixed to the company. In international business, we had a challenging year last year, and I'm happy to report that we have had a very strong rebound. The current quarter performance is exponential on a weak base, what gives me great joy is that we've been able to perform well across countries, which gives me not only confidence in our ability, but also in this channel's ability to continue to grow on a sustainable basis for us in the future. Our key markets of Nepal and Bangladesh demonstrated continued double-digit growth and margin improvement. MENA, which was challenged last year, delivered a very strong growth, and rest of world, which witnessed tariff and other related disruptions last year, also rebounded back very strongly. At a brand level, Almond Drops Hair Oil continues with its strong performance in this quarter as well. We have delivered a low teen volume growth on an MLH-adjusted basis. Just like previous year and quarter, this growth came back across all the pack groups and all the channels. All pack groups have done well, what is really stand out is small packs in the sachet business, which has led this growth. Overall, we continue to register positive movements across most customer metrics also on this brand. On a consolidated basis, our ASP for the quarter was up by 29% against the same period last year. We continue to maintain a robust SOV SOM ratio in the traditional media channel, while we increasingly make shift towards various digital channels of communication. This quarter also saw us investing significantly behind influencer-led marketing campaigns across all major digital platforms, and we've received very positive consumer feedback on the same. On the growth portfolio, which is a cluster of smaller brands, non-ADHO brands, which we have a high growth aspiration against, performed well in the quarter, with the overall portfolio growing high single digit sequentially against the previous quarter and improving its run rate. This growth came despite the value definition in the Coconut portfolio, which forms a large part of this mix. On the input costs, the war in Gulf has created extreme volatility in terms of petroleum-related products like LLP and packaging material. It has also led inflationary trends in case of edible oils like mustard and almond, which have not fallen from their historical prices even in the harvest season like they used to do so previously. To counter the impact of this inflation, we took selective pricing and MLH reduction across our portfolio. While from a supply chain perspective, we believe the worst is behind us, we do have high cost inventory in our system, and the spot prices are also expected to cool sequentially over the next few months. In this period, we will continue to manage the levers in a calibrated manner in order to deliver the P&L without compromising on the investment needed for our core business. Overall, like always, we will remain focused on strengthening our brands and through enhanced advertising and digital investments and by driving innovation. We will also continue to work on the expansion of our digital footprint through Project Aarohan and shall stay committed to prudent financial management. Thank you, and back to you, Manoj. We can open up the floor. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on 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 will wait for a moment while the question queue assembles. The first question is from the line of Siddhesh Deshmukh from IIFL Capital. Please go ahead. Hi, sir. This is Percy Panthaki here. Congrats on a good set of numbers. Just wanted to get a sense on margins for this quarter, as well as going ahead. You are at 24.5%. Hi, can you hear me now? Hello, am I audible? Yes, you are audible. Hello. Can someone confirm if we are on the call or we are the ones who are disconnected. Sir, we are on the call and participants are asking questions, sir. Yeah. Am I audible now? You are audible. You may please proceed, sir. Am I audible to the management? Yes, sir. Ladies and gentlemen. Okay. The management line has been disconnected. Please hold while we get them back on the call. Ladies and gentlemen, thank you for patiently holding. We have management connected now. Over to the management. Percy, you may please continue. Percy, apologies for the disconnection. You have to please ask your question again. Yes. I am audible now, right? Yes. My question is on the margins, both for this quarter as well as going ahead. We've already reached about 24.5% kind of margin this quarter, which is ahead of what we targeted maybe about four quarters ago. Just wanted to know, one is there any one-off in this quarter on the margins? Because I see that other expenses YoY is very muted despite a fairly good top line and volume growth. Any explanation on that? Secondly, how do we look at EBITDA margins going ahead, given that we are close to that 24%-25% mark, which was our best-case kind of a scenario. Do you think that we should basically not take any more expansion from here on, or should we actually even take a little bit of moderation from here on? Percy, first of all, I think from a margin perspective, the way we would look at it is, I think we have another quarter of, let me say, tougher inflationary prices remaining in front of us. A lot will depend on the revenue, what comes in. I think margins at a gross margin level will continue to remain in a tough zone in quarter two, and then they will expect to sequentially ease over quarter three and four. In terms of the overall EBITDA, we are on the higher side of what our aspiration of, I think a lot will depend on how the revenues go. As you know, we don't give guidances, from a pricing perspective, pricing is not going to drive up any further margin expansion. We don't have any pricing actions planned in. Operating leverage, we will continue to try and run the company as efficiently as we can, I think a lot will depend on how the top line performs flowing into the bottom line. That's the way I'll say. As far as your question on one-offs is concerned, no, we don't have any significant one-offs. There are little bit of variations in terms of expenses falling in a certain quarter and thereof, but beyond that, there is no one-off, basically, which is there in this quarter. Secondly, wanted some clarity on the volume growth also for ADHO. Last few quarters, we have been running at about a mid-single digit volume growth. This quarter, it has gone up to a low teens kind of a number. What has driven this improvement? We have seen very good traction across the smaller unit price points, which is actually helping and aiding this kind of a momentum. Understood. Lastly, if I can get some idea on the non-ADHO portfolio, how is that performing? Also, what is our strategy on that part of the portfolio? I think it's depending on the quarter, up or down, but approximately 15% of the total sales is non-ADHO. Earlier, we have said that we want to take some focused bets on that. Coconut is going to be one of those bets. Banjara's is probably the other one. Just wanted to know your overall thoughts on, one is why this quarter the non-ADHO has been a little bit subdued, and secondly, how do you see this panning out, and what are your priorities in this portfolio? Firstly, the way I would say is that in the non-ADHO portfolio, the growth portfolio, what we call, a large part is Coconut. In Coconut, I would not draw the same conclusion that I'm unhappy with the progress of the portfolio because the progress has sequentially grown. Despite us taking a value correction on the per ml prices we realize for that brand, which is the largest contributor in the channel against quarter four. Despite that, there has been a significant volume growth in the Coconut portfolio. We are happy with the movement. I think we stay committed to building that portfolio on a profitable and a sustainable manner across. In the past couple of years back, we had a very high discount to the market leader. We have rationalized that discount to the market leader to come close to a level wherein we can operate the portfolio on a profitable basis. We are maintaining and sustaining that stand. With that in mind, I think we are fairly happy with the progress we've made on the portfolio. I don't see a concern. Also, please understand that this is an extremely competitive portion of the portfolio, and hence we would not, at a very frequent instance, disclose not many data on this because this is very small and extremely competitive for us. I think that is all I can say. Got it. Just wanted to understand on the Banjara's piece, whether that's a major focus area or not. Secondly, plans over a medium term, is it going to be only Coconut which is going to drive it for the next one or two years, and therefore further diversification is a little far away? Do you think further diversification is also more immediate on the agenda? It is definitely more immediate on the agenda, Percy. Banjara's is something which we've acquired. We are doing a lot of work in terms of revamping the brand and positioning the portfolio for growth. What I would expect is that we are carrying out a lot of pilots in terms of what would make a disruptive growth in that portfolio possible. When we are ready with the ideas which we are doubling down on Banjara's, we will come back and speak to you in the forum once we are ready with that. Till then, we are working on the portfolio, but Banjara's, to state it unambiguously, forms a very clear part of our growth portfolio strategy, and it would be most probably the second biggest, if not the biggest leg in terms of our growth portfolio. Okay. Got it. That's all from me. Thanks, and all the best. Thank you. Next question is from the line of Abhijeet Kundu from Antique Stock Broking. Please go ahead. Yeah. Congrats on a great set of numbers. This question has been asked earlier on the gross margin front, just some clarity that Q2 also gross margin obviously will remain under pressure. Talking to some of the consumer staple companies, they have said that the inventory which would be there in Q2 would be higher price as to Q1. The prices have been going up and down, certain companies have blocked their Q2 at a higher rate as compared to Q1. Just your view on that. A very specific question, Abhijeet. Yes, it can be true, I would not want to give a generic answer. For certain key commodities, that fact could be true. For some others, it might be flat. Yes, I think from our perspective, what we've clearly said is that we see gross margin slightly more under stress in Q2 as compared to Q1. Different items within that set will behave differently. I think generally, it's not that everything will be more inflationary in Q2 against Q1. Depends on the inventory holding at the end of quarter one, how much of quarter two cover a company is carrying, and also depends on how quickly do we see cooling off in certain items. We are still in a very dynamic situation. A couple of weeks back, we thought the war is over. We might not be so sure right now, we don't know what the situation might be another two weeks down the line. It's an evolving situation, very difficult to predict. Even if things are on track, I think quarter two is definitely going to be a quarter wherein we can't take margins for granted. Let me put it this way. Again, a very similar question because on the EBITDA margin of 24.4%, I completely agree what you said as the other expenditure saw very hardly muted growth, close to 1%. Typically that happens, that expenses get booked over the year, and hence, the margin also has to be adjusted according to that, right? What has applied to the quarter in terms of other expenditure would not really apply to the full year. There would be some amount of increase in that. We would say that you had guided one time that 20+ margin is what we would book, and we would focus more on the top-line growth. That guidance remains, right? Our aspiration and we are happy is that we are happy to operate in the low to mid-20s. I think that is in terms of what we would be happy with our business. I think that is the statement which I've made in the past. That is the statement I would hold ourselves to again. Business is dynamic. Sometimes it will be on the lower end of the spectrum, sometimes it'll be on the higher end of the spectrum. Beyond that, we don't give quarterly or yearly guidance. Right In terms of specific numbers, I don't want to comment more on it. I would also like to qualify one inference, which possibly my previous statement made. I am not saying that there is certain expenditure which basically has been booked in quarter two and which will get booked in quarter one. We are not either getting any benefit nor are we postponing any expenditure. I'm saying in a natural course of business, there is a certain skew which happens between quarter to quarter. By and large, our line is to ensure that we keep costs as low as possible, which means that to try and manage the business with very low increase in costs and let the operating leverage flow down. I'm just re-clarifying. Maybe the understanding is same, maybe it is different, but I just thought I'll re-clarify that. The understanding is same. It's just certain costs fall in certain quarters. Right. That I understood. Yeah, thanks. That's it from my side. Thank you. Thank you. Next question is from the line of Mihir Shah from Nomura. Please go ahead. Mihir, your line is unmuted. Do you want to please Mr. Shah, can you hear us? As there is no response from the participant, we will move on to the next question. The next question is from the line of Mayur Patel from 360 ONE AMC. Please go ahead. Hi, sir. Congratulations for a good set of numbers and pretty detailed explanation. Just want to understand, despite the pressure in the margins, if you just look at the Aarohan initiative, should we expect more benefits coming out of Aarohan initiative? Anything is left to be implemented in the rest of the year? Mayur, thank you for your question. We are executing Aarohan for the first time in four big states, which we have called out and where we are executing Aarohan for the first time. Aarohan is also a continuous exercise for distribution increase. Even in the states where we have implemented Aarohan, our endeavor in terms of expanding direct distribution remains. The effort would be to make it a continuous exercise and get a sustainable year-on-year benefit in terms of distribution expansion, which not only takes us to more direct outlet, but also builds our capability to execute a wider portfolio in the market. While there would be one time or the first time benefit which will come in some markets for us this time, it would be a more continuous sales and distribution exercise, which will be a multi-year exercise. Sure. One more question. Sir, any update on the M&A strategy? Should we expect in this year any progress from the M&A side, looking at any targets from a diversification point of view? Mayur, as of now, we can just say we have nothing to disclose. Okay. As and when we have some update to disclose, obviously, we will come back and update the market. As of now, nothing to disclose. Sure. Thank you so much. All the best, Naveen. Thank you. Thank you. Next question is from the line of Tejas Shah from Avendus Spark. Please go ahead. Hi, am I audible? Yeah, hi, Tejas. We hear you. Yeah. Hi, Naveen. Thanks and congratulations on very good set of numbers to you and the team. First question is just extending where Mayur left on Aarohan. Is Aarohan still delivering a measurable growth delta? Let's say if we had to split the current quarter growth between states where Aarohan has been in application versus where non-Aarohan states are there, would the gap be a wide one? Tejas, I think what I have said also in the past is that Aarohan delivers anywhere around a 200 to 300 basis point delta as a one time when we are executing because of the change in the mix. However, the overall strategy is an indirect or a low supervision, basically distribution to a high impact direct distribution. Getting those benefits coming in would be actually a multi-year benefit because once you add the outlet to the network, you will continue to make efficiency over a long period of time. The one time impact, as I said, would be maybe 200 to 300 basis point for the first time, but after that it'll be there. That too also will be on a small mix. You can do the math, but very difficult to really segregate into what is because of what. Perfect. Second, is the INR 500 crore growth portfolio roadmap progressing as per our internal milestones? Any, let's say, framework that you have to kind of evaluate it periodically, how is it going? Tejas, we intend to come back once a year and give you more details in terms of the progress. Please appreciate the fact that it is comprising of several small businesses and portfolios, wherein we fight the battle with extremely large competitors on those sub-segments. We intend to give you a fair bit of disclosure on an annual basis to keep on giving you a sense of how we are progressing. I think we will do that. I'd request a little bit of patience and consideration from all of your sides regarding that. Sure. The last one, if I may. The last few quarters have been a stupendous performance from our side, there has been a mix of layers of a lot of bottom-up effort and a very thin layer of perhaps macro tailwind also because of base effect, it has been volatile also. When we see this performance, what is the single biggest risk of sustaining, let's say 20%? I'm not putting number in your mouth. Let's say if we have to sustain this performance, what is the single biggest risk that we are seeing for next two years? I think the way we will say is that our aspiration on a long-term basis is to deliver a consistent double digit to a low teens performance. Obviously, when we started executing our strategy, I think we got exceptionally good results and these results will carry on in certain momentum till we ease on to a double digit or a low teen, mid-teen kind of a performance. Even when we get to, let's say, a low teens or a double digit performance, a large part of that would be built on market share gain and performing ahead of the portfolio. Hence the execution on our strategies will deliver the market share gain to us would be a key part of that delivery and hence the execution risk. Us being able to consistently gain share, gain more consumers, take our product and distribute it to more outlets is all execution, hence execution risk will remain the single largest risk. Very clear. Thanks, and all the best for coming quarters. Thank you. Mr. Shah, does that answer your question? Yes, it did. Okay. Thank you. Next question is from the line of Divyansh Jaju from Trinetra Asset Managers. Please go ahead. Sir, what will be the advertisement and promotions strategy heading into the FY 2027? Sorry, Divyansh, can you please repeat? What will be the advertisement strategy? What will be our advertisement like sales promotion, any particular strategy, like how the expense would be like in FY 2027? Okay. You're asking for basically what is our stated level of spend. See, we've been operating on number. If you look at our historical averages have been around 15%-16%. We will try and operate in that zone. Obviously, quarter-to-quarter, depending on the requirements of the market as well as in terms of being fiscally responsible, we will take calls as to where we need. As I've said, while we would want to find efficiencies in fixed cost lines, advertising is not an area where we are trying to squeeze down the cost. We will continue to double down and invest and stay consistent over our advertising spends over the medium term. Okay. Out of revenue of INR 340 crore pay off this quarter, what was the absolute contribution from our Vishal Personal Care or Banjara's product? Banjara's contribution is by and large, if you were to look at it, is close to around 5%, is what we give as an indicative number. We will give refreshes and more detail on the performance on an annual basis as I promised earlier. Okay. Sir, any specific plan or guidance you can provide around how you will be scaling in next 12-36 months like On non-ADHO portfolio, how we expect on that? Divyansh, sorry, we will not be able to provide you guidance on that. Yes, long-term, we want to grow in the high 20s on that portfolio and for it to add meaningfully to our overall mix. On a short-term, medium-term, I can't give you any guidances. Okay, sir. Thank you. Thank you. Next question is from the line of Mihir Shah from Nomura. Please go ahead. Mihir, your line is unmuted. You may please proceed with the question. Hi, just checking. Am I audible now? Yes, you are audible. Okay, thank you. Thank you for taking my question. Congrats sir, on a great set of numbers and another good quarter of strong performance delivery. Just wanted to understand what is driving volume growth in the Coconut portfolio. Would it be largely driven by the higher grammages that would be given in the price point packs? Or if not, if you can just give some indication on the contribution from grammage change or MLA change, and the PR volumes, X of that would be wonderful. That's my first question. Mihir, we are not giving any substantial amount of free volume at this moment in our Coconut portfolio. The scale-up which we are talking about, the quarter-on-quarter scale-up, is being driven by distribution and wider availability of the product. That's wonderful. After copra has corrected, if you can give some understanding on how the market is shifting towards, because we've seen other market leader in the Coconut, also indicating higher volumes. Earlier we thought with the correction of copra prices, that can change. If you can just give some sense on how the market is shifting with the correction of copra prices, and where do you see copra landing, in the near future? Any indication of that will be also helpful. Mihir, can't really give an exact number because typically copra prices follow a cycle wherein, in the beginning of quarter one, we see the bottom-most level of copra. Then copra basically remains stagnant for a while and then starts inflating towards the end of quarter three, quarter four. We are not seeing any such cycle being followed right now. We have seen deflation from the historic highs coming into copra operating somewhere in the range of, let's say, INR 130 to INR 135, INR 40 in the last couple of months. Again, then will it sustain there? Will it again pick up? How soon it'll pick up? I think it's an extremely volatile situation. Can't really give an outlook as to what we expect copra to be. We are taking the call by month-on-month basis and kind of driving where we can. I did not exactly get the question on what you said was the outlook against copra on volumes of the category. If the question was more to concern with the interplay between hair oil and copra, then see, our core portfolio operate at the prices which is much premium to copra. I think, at least our belief is that, there is not a very, very significant overlay. There will be some interplay, but not a very significant interplay. We will see how to navigate that as and when those things come across. Okay. I was just trying to understand how the unorganized segment has behaved after the copra prices have started to cool off. Are we seeing increasing competitive intensity from that part of the segment? Despite that, are we seeing more volumes? How is the volume growth? Is it largely a function of the efforts or there is also an interplay between the unorganized segment, is what I was trying to appreciate. Mihir, okay, understood your question. Mihir, I think we are not the right players to comment on that because the markets in which a large unorganized play operates on copra, those are not very big markets for us structurally. Hence, I would shy away from commenting on those. Understood. They're not very big markets for us. Understood. Understood. After fourth quarter, sir, I think you will start cycling a higher base on the revenue front. I know you don't usually give forward-looking comments, but wanted to get a sense on, and I'm sure you will have your own strategy in place. Some insight, if you can help us think about how should one think about the growth momentum. You said the distribution expansion project that you are doing is only driving couple of Aarohan, which is driving couple of basis points of incremental growth. Wanted to get a sense on how should one think about volume growth and with the cycling of the higher base from third quarter onwards. Any insights will be helpful. As I said, our aspiration is to grow consistently double digit to low teens. All I can say, if we will not grow that in any quarter, we will be very disappointed. That is where we stand. Beyond that, I can't really give you an answer in terms of where we will land up in which quarter. Yeah, we will be unhappy if we don't deliver double-digit growth. Fair enough, sir. Thank you very much. Wishing you all the very best. Thank you so much. Thank you. Before we take the next question, a reminder to all the participants, if you wish to ask a question, please press star and one. Next question is from the line of Nishita Shanklesha from Sapphire Capital. Please go ahead. Yes. Hello, am I audible? Yes, ma'am. Yeah. I just wanted to understand one on, you mentioned that our aspiration is to grow by double digits to low teens, but like YoY growth in FY 2026, also we saw 20%. If you see even in Q1 YoY, we've seen a growth of 28%, which is much higher than the low teens aspiration that we have. Is it a one-off? You've also mentioned that this is a stressful situation. Are we being conservative when we say that we aspire to grow in low teens? Nishita, see, we've enrolled a series of action over the course of last four quarters, which included significant amount of price correction and other measures. As a result, we are seeing an exponential growth happening. This exponential growth as we will start lapping up those exponential growth bases of the past will soon settle down to a slightly lower number. What that lower number would be, again, as I said, we don't give guidances, and we won't give guidances. From a slightly longer term, medium to longer term perspective, our aspiration is to deliver consistent year-on-year double-digit growth. Hence, that comment needs to be seen in that light rather than as to a guidance of what the next quarter growth number would be. Okay. Understood. I hope I answered. Yes. Understood. If you could give the segmental revenue contribution from our ADHO portfolio and the growth portfolio, that will be great, in Q1. ADHO portfolio is give or take approximately 80%, Nishita. Beyond that, we don't give details. Okay. How is the growth in our ADHO portfolio going to be like? Are we going to see the same growth that we've seen? Again, I can't predict the future, Nishita. We've declared the numbers, what we've seen this quarter. Okay. Understood. That number. We've given that number out earlier, yeah. Understood. My last question would be on if we have any acquisitions lined up in the growth portfolio. Nothing to reveal. If you are in talks. Okay. That's fine. Nothing to reveal. Thank you so much for answering the questions. Thank you. Ladies and gentlemen, we will take that as the last question for today. I now hand the conference call over to the management for closing comments. Thank you. This quarter has been a good start for us for the year FY 2027 and builds on the momentum we witnessed throughout the last year. We continue to stay committed to strengthening of our brands and working on building a strong distribution and a very strong diversified portfolio. Thank you all for listening in to the call today, and have a great evening. Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference call. Thank you all for joining us today, and you may now disconnect your lines.