Ladies and gentlemen, good day and welcome to the Britannia Industries Limited Q4 FY 2021 Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 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 over to Ms. Dipti Sudhir from Britannia Industries Limited. Thank you, and over to you. Thank you, Sanford. Hello, everyone. This is Dipti from the investor relations team. I welcome you all to the Britannia earnings call to discuss the Q4 2021 financial results. Joining us today on the earnings call is our Managing Director, Mr. Varun Berry; CFO, Mr. N. Venkataraman; Chief Commercial Officer, Mr. Gunjan Shah; Chief Supply Chain Officer, Mr. Vinay Singh Kushwaha; Chief Development and Quality Officer, Mr. Sudhir Nema; VP Procurement, Mr. Manoj Balgi; and VP Sales, Mr. Vipin Kataria. We will start the call with remarks on performance by Mr. Varun Berry. Subsequently, we will open up the call for questions. Before we get started with the presentation, I would like to draw your attention to the safe harbor statement included in the presentation. I will now pass it on to Mr. Varun Berry for his comments. Good evening, everybody. Really sorry for this. I think we got delayed because of some technical reasons. These are very tough times and we are dispersed all across in different locations. It's just been very difficult for the central team to coordinate this. Extremely sorry for starting late. Having said that, let's get to page three. If you were to look at the full year results, we've grown revenue by 13%. We've grown profits by 39%, with an overall profit percentage of 17.9%. We've grown market share for the eighth year in running. We continue to focus on the five strategic planks that we talk about: distribution, marketing, innovation, the cost focus that we have on our P&L, adjacent businesses, and sustainability. I'll take you through these in that order. First of all our planks continue to do quite well. If you notice that our rural distribution, which was down March of 2020, has again come back from 21,300 in February 2020 to 23,500 in March 2021. Similarly, our direct reach, which had dropped from 21 lakh outlets to almost 15 lakh, is back to now 23.7 lakh outlets. Our focus state agenda continues with our focus states growing 25% more than the rest of the country. E-com business continues to grow very aggressively, which is very important in times like this. Next slide is on our marketing campaigns. Some of you must have seen the new Jim Jam campaign that we've launched. It's doing quite well. We've also got Milk Bikis Tamil Nadu campaign, which is again, doing quite well for us. I'll come to the rest of India Milk Bikis in a bit. We've advertised Marie Gold, we've advertised 50-50, we've also done a new campaign on NutriChoice Digestives. We've done a number of brand activations as well. We've done Bourbon Pure Magic Deuce. We've done Little Hearts, NutriChoice, which was the e-commerce activation, then NutriChoice Cream Cracker in West Bengal and Assam. We did a Tiger Krunch with Sonu Sood. Coming to the Milk Bikis agenda as far as rest of India is concerned. Milk Bikis has become a very important brand for us across the country. Till about a couple of years back, it was a large brand, but it was a regional brand. We were predominantly a Tamil Nadu and a Kerala-based brand with a little bit of presence in other states. Now we've decided to take this aggressively across the country. We've launched a 100% atta product. The proposition is "Doodh Roti ki Shakti." The point really is that this needs to be a product which takes on from not just milk, but also takes on from glucose, because from a product standpoint, it's a much better product than any of the glucose products which are available in the market. While we have a 26% share in the milk category, which is INR 105 crores a month or INR 1,260 crores per annum, we've only got a 4% share of milk plus glucose put together. That's where the potential lies. We are looking at making this a large brand in the Hindi belt, and in the other states. The south agenda that we have currently. We've got a very credible endorser for this in Pankaj Tripathi. I don't know if you've seen this advertising, but it's a very hard-hitting ad. If you haven't seen it, you'll see a lot more of it as we go forward. We've done a very large visibility drive on this. We've got 1,400,000 square feet of visibility across, with 45,000 units to be deployed all across the country. We are looking at this becoming a very large agenda for us as we go forward. We've got a very solid brand, and we think that we can make a big difference with this. The other campaigns that we did on adjacent bakery and dairy, the rusk campaign is doing extremely well, and that's showing up even in the resurgence that rusk is seeing as of now. Wafers, we've launched an INR 10 campaign, which is doing quite well. Winkin' Cow, which is a on-the-go product, but has seen some very good results in Q4, with the highest growth from a volume standpoint as well as from a distribution standpoint that we've seen in the Winkin' Cow brand. Next page is page number nine, where we talk about the efficiencies. We continue to sustain the COVID efficiencies. If you look at factory productivity, pre-COVID to post-COVID, which is current productivity, we are 8% better. Wastages, we are 20% better than what our pre-COVID levels were. Our wastage is down 20%. Our dispatches from factory directly to distributors are up 50%, which saves us a cross-shipment and hence brings efficiencies to the system. Our depot space we reduced by 10%, and we are managing very well. That's because we've got direct dispatches, so we can afford to save some depot space. We've created a very large digital platform for the future. We went live with S/4HANA, our dealer management platform, as well as our vendor management platform. S/4HANA basically is going to give us huge efficiencies in material resource planning. We've also got WMS working, which will give us efficiencies from our warehouse management costs as well as from a profitability analysis standpoint. S/4HANA gives a lot of muscle to what we can do with data. The plant maintenance system as well as the project management system, all this will be provided through S/4HANA, which is absolutely a cutting-edge ERP. Artea is the dealer management system that we have, which is going to give us real-time data. It's also going to be an integrated system from a scheme management or discount management standpoint. It's also going to be very efficient from claim settlements with distributors and the pricing and promotion controls that we want really strong within the system. I think it's a state-of-the-art system which is giving us very good results as we speak in this month. From a vendor management system, again, we want to get more efficiencies. We want the right sourcing, we want digital contracts, we want a catalog buying kind of approach to whatever we buy. Finally, a life cycle management, which the vendor management system is going to provide, which will help us cater to the 500-plus vendors that we have in the system. The next is about the ESG agenda. The journey began seven or eight years ago, but now we are doing it in a very structured way. If you look at the chart on page 11, the resources part is what the environment that we are catering to. We're talking about resource efficiencies, which is water, fuel, energy, and bringing in more renewable energy. Food waste, we are looking at reducing defectives, making our lines more efficient, not having expired product, and reducing factory wastage as well. From a supply chain perspective, farmer extension programs, sustainable sourcing, and from a packaging standpoint, making sure that we reduce plastic and whatever plastic we are putting in the environment, we recycle that so that we are effectively zero as far as plastic is concerned. From a social agenda, it's about the human resources and social responsibility. There, from a health, safety, and wellbeing of our people as well as people connected with us, employee engagement, diversity and inclusion. I must say that there is a lot more work to be done from a diversity standpoint, but we are working on it very actively. Community nutrition. The work that we do through the Britannia Nutrition Foundation, et cetera, that's going quite well. We also want to make sure that from an economic standpoint, we add a wing to this ESG agenda so that the global total foods company that we want to be. Finally, from a governance standpoint, we would like to make sure that we are best in the business. A very nice framework has been created, and this will be integrated into our companies and managers' performance as well. We will publish our first sustainability report in June of 2021. The next slide is on the Britannia Nutrition Foundation. There's a lot of work happening in various states including Bihar, MP, Uttarakhand, Gujarat and Karnataka, which covers 75,000 direct beneficiaries of this foundation. We are very proud of it, and we want to make sure that in trying times like this, we accelerate this and provide the facilities to many more people. The next one is on our being awarded amongst India's Best Employers, second year in a row. We're very proud of that. This is something that we'd aspired for. We did it last year, but we replicated the same this year as well. We want to make sure that we continue with this. The next slide. Ritesh, are you there? Yes, I'm there. Can you just take them through this slide? Sure. It's a very important slide. Ritesh is our HR VP. I would like him to talk about this. Sure, Varun. Thanks. Our employee engagement and employee support agenda is covered under Britannia Cares philosophy. We have looked at following initiative during the year. As the year started, there was a lot of confusion, anxiety, and we launched a continuous feedback system, which is a AI chatbot, which covered about 2,000 plus of our employees. The key concern that was talked about was physical and mental stress that our employees were going through, as well as there was a lot of fear and anxiety in their mind. It was important to provide them the holistic wellness as well as a sense of belonging and community, so that their fear and anxiety can subside, and they also get support, especially on the mental stress side. We looked at a holistic wellness program, which was looking at all the four aspects of wellness, which is physical, emotional, social, and financial. For physical, we started with providing medical support. Medical concierge desks were created. The doctors were made available 24/ 7. There was also nutritionist provided as well as physical activities were limited. We started with the digital physical fitness Fridays, which provided employees on how to remain fit even when they were in the lockdown. Most importantly, I think what employees were looking at this point of time was the emotional, the mental stress that they were going through, the anxiety that they were going through. We started Pan-India counseling services, and we also launched a few training programs around emotional resilience, where we also involved ex-army guys to talk about how they dealt with similar tough situations and how they were resilient in those situations, which was quite inspiring for the employees. We also provided expert connects, doctor calls, doctors talking about what to expect, and also dispelling some of the myths that they might have, which helped calm down their nerves. We do run a volunteering program, which Varun talked about as part of BNF as well, and we continued that even in this year, combining it with virtual as well as lot of distribution that was required for the migrant labor during the year. We organized programs like health challenge to address malnutrition. We participated in that as part of a global program that was being run. We also took employee contribution drives, where we tried making small stuff in partnership with the NGO. Most importantly, we made sure to provide biscuits and hot meals. We cooked hot meals around our factories and provided in whichever location it was possible and it was a need, to the authorities, and helped migrant labor, with the hot meals, as well as we supplied food and biscuits. That's what we did around holistic wellness, taking care of complete wellness. For building sense of belonging community, we had digital connects that were organized. There were town halls with leaders. Interventions were not limited just to the employees, but this situation also provided us to connect with the family members. We also focused on children because a lot of children were looking at being engaged, and parents wanted support on that. We were able to organize some of those programs as well. Those are some of the initiatives which were taken to bring in the sense of community and belonging. The other actions which were taken were. We had by and large in our offices continued on work from home mode with some flexibility. Our offices were open for some time, and whichever function or people needed to work, they could come in at their convenience. We also created cross-functional self-help group at each of the region, which could help employees in tough times like we are going through currently. Where these groups are actually helping employees with whether it is beds, whether it is medicine, whether it is oxygen, and obviously providing comfort that yes, there are a set of individuals on behalf of company who are working at this point of time to support them. The leaves that people couldn't utilize last year were carried forward, and we also created a BCP plan in our Bangalore office by creating alternate offices. These were more focused on offices for specific functions, manufacturing and sales, where we have the largest of our workforce. We made sure that a proper COVID protocol was developed and BCP was developed so that we take utmost care on hygiene standards to ensure that our employees are not infected by COVID. A proper health screening was done. The touch-free attendance was launched. COVID sensitization sessions were held with the employees. Temperature monitoring was introduced. The transport was provided with one-third occupancy. Proper quarantine policy was done. In a case where if any of our employee was infected with COVID, the proper tracing of primary contacts and making all of them in isolation and in quarantine for 14 days was strictly followed. Even on travel, we followed all the state regulations which were there. Similarly, for sales, we have done similar things wherever possible, which is managing even work from home whenever there has been surge. Even today, we have taken the decision to work from home even in sales because of the surge that we see currently. We had done it last year also, we have done this year also, we have extended insurance to our third-party employees as well, going up to AW salesmen to ensure that if they need any of the insurance help, we are there to provide them with that support. As of now, as we move forward and we are all facing the wave two currently, we are pushing for vaccination of all our employees. We have managed to cover 76%-80% of our eligible employees, which is 45 +. We are gearing up to ensure vaccination for employees below 45 years of age, starting from first May. Company obviously is going to cover for cost of vaccination for all employees as well as third-party employees, again, going up to the distributor salesmen. Yes, we are trying to target to cover all our employees through vaccination in May. These are testing times, and things are changing every day, and we are quickly able to modify our responses to meet with the challenges. Back to you, Varun. Yes. No, these are very tough times, guys. It's been very tough, I think, not just for us, but for most businesses. We are trying to cope with this in the best way possible and keep our employees safe from the conditions that exist. Moving on to page 16, which gives the revenues. Revenue growth for the quarter has been 8%. It's trailed off from what it was in the first three quarters. The volume growth is at 8% as well. The time has come for us to look at how we're going to take this back to a double-digit growth as far as volumes are concerned and revenues are concerned. Moving on to the next slide, which is about cost efficiency programs. Last year, we had a big incentive coming our way because between the VAT and GST, there was some confusion. There was some extra incentives that we got for FY 2020. We had a one-time gain. For the last three, four years, we are at about 4.6x, 4.7 x what we used to do in FY 2014. That's what we've done. We are on plan as far as cost efficiency programs are. Commodities, it's been fairly stable as far as maida and sugar is concerned. We've seen a huge inflation as far as edible oil is concerned. On milk, while versus last year same quarter, it's not inflationary trend, but versus the last three quarters, it's inflationary on milk. Which takes us to the final slide on our profitability. We've got a profitability of 17.9% for the full year. For Q4, it's 14.9%. I'm talking about the consolidated operating profit, which is better than last year. It's below what we had for the first three quarters of this year. The reasons for that, one is the inflation from Q3 to Q4, there is approximately INR 100 crore inflation. Second is the normalization of our advertising and sales promotion budgets. We had some savings as far as that was concerned because we didn't have enough stock in the first half of the year. The inflation is leading us to a situation where we would have about 3% material inflation, which is basically coming from edible oils, dairy, packaging material and as well as the price increases which have happened in fuel, which is diesel. There's a 3% inflation that we are seeing, and that's something that we have to mitigate as we go forward. That's all from me, just one more thing. The fact is that with a 17.9% profit margin, we keep doing a benchmarking versus other food companies in India and worldwide. It seems that we are in the above 90th percentile of profitability. We are amongst the most profitable food companies. The interesting thing is that we are amongst the most profitable food companies in the world by operating in a category predominantly, which is a low gross margin category compared to any other food category. I think it's something to be really proud of, and I think this team has done a fantastic job in taking us to this level. That's it from me. Happy to answer any questions that you may have. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may please press star then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Anyone who wishes to ask questions, please press star then one. The first question is from the line of Avi Mehta from IIFL. Please go ahead. Hi, sir. Thanks for this. Just wanted to understand from your last comment on the 3% inflation. Have we taken any pricing change since to kind of take care of this? What are the thoughts to kind of offset this going forward? We started pricing action, but as you would have noticed, our volume growth and our revenue growths are the same. Versus the fourth quarter of last year, we haven't got any pricing, but towards the end of the quarter, we've taken some pricing. We are confident that, as we get into the year, over the months, we'll be able to get that target of 3%. 3% is not over the top. It is a large number, but I think with choosing the right brands as well as the right SKUs, we should be able to take that pricing from the year perspective. That the comparable, when we kind of get to the 3%, the comparable gross margin would be the 32 number that we would kind of aim to reach at on a gross level. Would that be a fair way to look at the business? There was a lot of efficiencies there, which we might not be able to replicate. I won't be able to give you a number for where we will get to, but the objective is that we would want to be certainly above where we were in FY 2020 as far as margins are concerned. This year has been exceptional from a margin perspective, but we should certainly aim for a higher margin than what we achieved in FY 2020 and what we've achieved in Q4. Okay. Perfect, sir. The second bit was essentially about this near term. There is clearly a second wave out there. In that context, could you kind of give us how are the consumer demand trends and also the competition trends versus what we saw in the last lockdown, any comments on that, sir? Thank you very much. No. The trends are similar to what they were last year, but the only thing is that the world has gotten used to living through a pandemic. I think people are better prepared, and I'm talking about producers. Producers are better prepared to manage their workforce and factories have not been locked down like they were last year. From that perspective, I think there is a better awareness of what needs to be done. However, there is some amount of pantry loading. There is some amount of trend towards home consumption products. And that, I think will continue, because I don't think we are going to come out of this situation in the next three or four months. It seems to be that this year's COVID situation is worse than what it was last year. The competitive angle would then not be the same in terms of that favorable, the unorganized impact that we had seen last time. That would not be the same because you said they are much more, the production side is much more ready. Is that a fair reading from what you say of your statement, sir? Yes, I think so. I think people will be better prepared, trends like people going back to their most trusted brand, et cetera, will remain. We have to see how this pans out as we go through this. Frankly, these times, you can't say what's going to happen tomorrow, where every day the situation changes. We've lived through last year with so much of uncertainty. We don't know how the next month is going to be, the next week is going to be. The best thing is to remain on one's toes and do what is best to further the business and cater to the consumers. Perfect, sir. A bookkeeping question, sir. The ICDs on book and to the promoter entities, if you could just share that number. That's all from my side. Thank you. Sorry, I didn't hear the last one. Sir, the ICDs on book as on FY 2021, and to the promoter entity, if you could share those two details. Thank you. Just a bookkeeping. Yeah. The group ICDs are to Bombay Dyeing and Bombay Burmah, and they continue to be in the same range. Same range as of FY 2020, sir. Correct, sir? Maybe numbers. INR 30 crores or so. Okay. The total ICDs would be also flattish, sir? Has been overall yes. Yes. Yes. Yes. Yes. Okay. Thank you very much, sir. Yeah. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in this conference call, please limit your questions to two per participant. For any further questions, you may come back for a follow-up. The next question is from the line of Richard Liu from JM Financial. Please go ahead. Hi. Thank you for taking my question. Greetings, everyone. I just wanted to ask you more about this Milk Bikis strategy. I can't hear you properly. Can you just come a little closer to the speaker? Yes. Varun, is this better? Yeah, this is better. Yeah. Varun, I just want to talk to you about this Milk Bikis strategy. Obviously, a lot of work would have gone into it before you identified this brand to be rolled out nationally, et cetera. I just quickly ran through the pricing of Milk Bikis, the non-cream variant. I'm not talking about the cream biscuit. I'm just talking about the normal Milk Bikis. The pricing seems to be very close to what Parle-G sells at. If I go back in time, I remember you and ITC, basically, both of you together other than Parle, had always stressed on premiumization as an agenda for the category going forward. When you are looking at a big bang launch or relaunch of a brand or an extension of a brand to really now go and target the Parle-G segment, especially when they are selling at very close to each other in terms of price point, are you going reverse on the premiumization agenda? I know there'll be scale benefit, et cetera. From an overall GPM perspective, how should one look at. The person you are speaking with has- Related to this is that if you're looking at growth by going into a segment which is actually sub-premium, is it an indication that? I get your question. In the interest of time, let me just clarify. It is not at the same price as Parle-G. It is at a sufficient premium to Parle-G in terms of pricing. You got to remember that Milk Bikis is one of our most profitable brands. It is, in fact, our most profitable brand, and we would like to keep it that way. There's no thinking in terms of how we wither away the profitability. We will certainly build on the profitability as we go forward. Okay, thanks. That's helpful. Thank you very much. Yeah. Okay. Thank you. The next question is from the line of Prasad Deshmukh from Bank of America. Please go ahead. Hi. Good evening to all of you. First question is on capacity. Last year, you had announced a CapEx of INR 700 crore to be spent over two to three years. Just wanted to understand how much has been spent in FY 2021 and what is planned for FY 2022. Follow-up is what is the current capacity utilization? We've got a very small head space as of now. We've probably got less than 10% head space in terms of capacity. We were supposed to spend, last year's CapEx was about INR 200 crores. We underspent last year. Even this year, because of the uncertain circumstances, while we are definitely going to put up a factory in UP, we've already contracted the land, and we've already got the incentives from the government. Similarly, Tamil Nadu, we've signed up the agreement with the Tamil Nadu government. We've outlined the land. All of that is done. Similarly, Bihar and expansion in Odisha is on the cards. We will take these steps as and when required. If it means that we require it six months earlier, we will do that. If it means delaying it by six months or a year, we will do that. The only commitment this year that we have is on our dairy factory, which also will be ready in 2022. We will play this by the ear, and we will put capacities depending on how the situation is on the ground. We are committed to putting up these factories. Does that answer your question? Yeah. Just a follow-up there. What is the current third-party manufacturing as a percentage of total? Do we see in the meanwhile, if there are a couple of quarters like last year, I think Q1, you had 26% sales growth. If a couple of quarters are there where pantry up-shopping is there, do we see the third-party manufacturing going up? If need be. As of now, it seems that we have enough capacity. We've expanded a few lines. During the last year, we put up a few lines in Ranjangaon. We've expanded capacity in a few places. With that, I think we'll have enough capacity. Yes, if required, we will look at third party. At this point in time, our third-party number is, Vinay, is about 35%. Okay. Second question on international. What is the plan for international in FY 2022 in the current COVID context? We are looking at starting up two factories, one in Egypt and one in Uganda. These are not our assets. These are contract factories that we've set up through our contract manufacturing partners in these two countries. We will use these for the countries itself and countries in and around, so that we can For example, just to give you an example, the factory in Uganda is capable of giving us a turnover of about $11 million and the one in Egypt even higher than that. These could become hubs for us to create businesses in these regions. That's the plan for this year as far as international is concerned. Besides that, we are looking at entering more countries through our export model and establishing ourselves in those countries. Got it. Thanks a lot. Yeah. Thank you. The next question is from the line of Mangalam Maloo from CNBC. Please go ahead. Hi, Varun. I just wanted your thoughts a little more on the way the first quarter has gone. When you say that the situation is similar to the last time, do you mean the COVID situation, or do you mean the demand situation? The same time last year, you saw a near 20% spurt. Of course, a large part of that was also a spillover from the previous quarter. This time around, is it a lot more normalized? What is the sense that you're getting? Mangalam, we don't share the numbers for the next quarter, but we definitely see a surge in demand. As I said that people are more organized, and last year we were first among equals in terms of making sure that we hit the ground running. This year, I think everyone's smarter. There is definitely a surge because of the situation that we face on the ground. What's your sense on the industry itself? Last time you said that whenever things settle, you would still be 300 basis points better than what you were pre-COVID. Has that number changed? 300 basis points better on what? Over pre-COVID levels is what you had said earlier, that the normal state demand post-COVID will still settle 300 basis points higher in terms of volume growth. Yeah. As I said, Mangalam, we can make as many forecasts as we want. This economy and this situation on the ground takes a life of its own. Clearly, our forecasts are not as accurate as we think. I do think that the demand situation is going to improve as we go forward. We've seen the second half of the year to be fairly slow. I guess, once the situation on the ground became better, there was the impact of the economy as people had suffered during that time. That came to roost. I think slowly and steadily over the next two or three quarters, I think the situation is going to become a lot better from economic standpoint. Hopefully we will get back, not just to these booms and busts, but a regular life which takes the demand back to where it used to be, single digit high, single digit category growth. If you're getting shares, then you can get to a double digit kind of a growth. That's the situation that we hope to get to soon. Right. Just a quick follow-up on that. When you said that you believe that consumer sentiment is likely to revive, et cetera, but your thoughts on the way the consumer sentiment is currently, because, some time ago, we did have a word with RS Sodhi, and he did say that lower consumer incomes is beginning to tell on demand. Do you see something similar? We saw it in the second half of last year. These are all necessities. These are not high-value items. I guess it's a short-term impact, which slowly withers away. We are hoping that, as things become better, people will get back to normal consumption. Okay. Thank you. Thanks a lot. Good luck. Okay. The next question is from the line of Aditya Soman from Goldman Sachs. Please go ahead. Hi. Good evening, and thanks for your presentation, Varun. Just, back on the Milk Bikis now. One of the things we also noticed in your presentation was that the number two player has gained market share, at least sequentially. Would this, to a certain extent, this expansion of the Milk Bikis just be a product to counter that market share gain in the Hindi belt? Would Parle-G be the main target? Just to add to that, when we think of the market share gain by Parle, has it been in Parle-G or has it been Parle-G that drove that market share gain? Yes. Their gain is Parle-G, but that's not the point. The point is not that it's not like we are targeting Parle-G. Parle-G is too large for us to target. We are just looking at the market, and we are saying that, is there a potential to upgrade the consumer who's at the base of the pyramid, who's consuming, let's say, Tiger or Parle or any of the other glucose biscuits, to get to a product which is atta, which has got a good proposition like Doodh Roti Ki Shakti, which resonates really well with a Hindi belt consumer. If there is a premium, that's fine. If we can provide a product which is tastier than the base product and it's also providing some benefits versus the base product, then can we get the consumers to upgrade? That really is our objective. If you think about it, if you combine those two segments, we've only got a 4% share. Even if we were to take this 4% share to 8%, we are talking about a big number, right? I don't think it's going to impact Parle-G. Yes, they're the big daddies out there. In ratio of the share of that segment, they will get impacted to an extent if we are able to make the inroads. We are yet to see. I think we've got a very good proposition. We've got a great product. We've really worked hard on making sure that we get the product and the proposition working in conjunction. We are hoping that we'll be able to get the right kind of effect from the consumers as well. No, thanks, Varun, for that answer. Just a follow-up there. In terms of contribution or net contribution, what would be the difference between, say, Tiger and Milk Bikis for you, if you could just tell us the index number? Secondly, in terms of price point, would this be at a similar price point, at which Parle-G is? Maybe the grammage is different, but the price point would be the same, right? Yes, the price points will be similar, but grammages will be lower. The gross margin would be two and a half times what it is on glucose. Very clear. Thanks a lot, Varun. Yeah. Thank you. We would request participants to please limit your questions to two per participant. For any further questions, you may come back for a follow-up. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity. On the three digital transformation projects, would you be able to help us quantify the impact on revenue as well as cost during the quarter? Yes. Venkat, would you like to answer that? Hello? Quantifying will be a little difficult at this point in time. Certainly, we are looking at every critical lever that it can help us on, right from order generation to order servicing to maintaining lower inventory in the company, reducing write-offs and reducing market returns, et cetera. The functionalities that Varun spoke of, they address all of these, and we have some numbers as targets for each one of this. We are going to monitor this and we will have to ensure that these benefits come through to the company. But you see- Also in terms of fill rates, because today we have gaps in our fill rates as well. With our new dealer management system, I think our fill rates will also definitely go up. Our ability to analyze and provide the right data to our sales force for them to make the right decisions on the ground, that will also be impacted. We've got some targets internally. We will monitor those on a regular basis and make sure that we get some efficiencies to the business. I can tell you this, the expense was not large. The saving can be very large. Okay. The revenue impact this quarter was not meaningful, is it? Like, fair to assume that? No. The revenue impact, because of this, we had to close our quarter about three days in advance because we had to go live and factories had to be shut and dispatches had to be shut. That created a little bit of an impact, but yes. No, that's a very small impact, which is not a secondary impact, but a primary impact for us. Sure. Okay. Just one more question. Can you share your thoughts on PLI on food processing and whether you expect to benefit from this? Do you see this helping your international business? Whether there can be some additional benefit for your Ranjangaon plant, whether there can be something in the domestic side as well. If you can just share your thoughts on PLI on food processing. Yeah. PLI has still not been, as you know, officially announced. Ready-to-eat food is covered under PLI scheme and biscuit is also covered under biscuit and most of the other products that we are manufacturing today are also getting covered under PLI. This is the draft that government has shared so far. We are hopeful that it'll go through and we should be able to quantify as and when government is able to come out with a final scheme. There will be benefits that should accrue to companies like Britannia. Fair to assume that both domestic sales as well as international plants could see some benefits? The draft says that domestic, of course, there will be the benefit. It also says that to the extent we are manufactured in India, subject to certain conditions being fulfilled, we will also be eligible for benefits over and above the incentive. We are talking about reimbursement of some of the expenses on advertisement that can also happen. We have to see the final draft. There could be some benefit for the Ranjangaon plant as well because it's a work in progress right now or it will be for the new budget? No, it'll apply for Britannia as a legal entity, the way it is worded currently, sir. Understood. That's it from my side. Thanks a lot, sir. Thank you. The next question is from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah. Thanks. Varun, my question is on distribution. Because of the wave 2, again, there is a lot of pressure on the shelf space in Kirana. Again, is any SKU rationalization required? Similarly, chemist shop, home and personal care companies are targeting quite well, given chemist shops are open for longer hours. Is there something you can do there in the chemist shop? Well, Abneesh, the point is that in times like this, we are actually asking our salespeople not to go to the market. Again, we are going to see a downtrend as far as our distribution is concerned. There will be a lot more sale on telephone and there will be a lot more wholesale trade during this time. It's unfortunate because you build your distribution and then something like this happens and you have no choice but to tread on the side of caution as far as your employees are concerned. This wave just seems to be a very vicious wave of COVID. As we speak, we've lost three of our sales colleagues because of COVID and all three of them were young. As I speak to other counterparts in other companies, every company are facing the same problem. What we've done is we've told our people not to step out of the home till this happens. We don't care if our distribution drops. We will work harder and build it back. This is not the time to think about targeting outlets and putting our products. This is about making sure that we produce our products and send them to the distributors and send them to the wholesalers so that we can keep the shelves full. As we get out of this situation, then we'll start to fine-tune once again and start to look at which outlets and what outlets and how do we target them, et cetera. You're right. From a long-term perspective, it seems like a good strategy to go after chemist shops. Currently it will be negligible, right, for you? Yes, it'll be small. Some of our products like NutriChoice, which are available, but not for the mainline products. Varun, my second and last question is on the three digital projects. Will the benefits start immediately after the wave two? Can second half of the year see some tangible benefits from this? Does this give you a lead over the number two player because they are more of a mass player? Will it be industry-leading in terms of these capabilities? No, absolutely. I will let Venkat comment on that. Yes, to my mind, it definitely will give us an advantage over all our competitors. The trick will be in making sure that we deploy this efficiently and monitor it and reap all the benefits that we've put on the paper that we made on this when we were starting to conceive this idea. Venkat? Venkat? Hello? Mr. Venkataraman, please unmute the line from your side. Sorry. I missed the question. Sorry. On these three digital projects, is it a big lead over the number two player specific and the industry in general? In terms of capabilities, when do you see this benefit coming in, tangible benefit? Now as we speak, we are able to see the benefits. Frankly, 20 lakh outlets, real-time data in terms of what they are buying from our distributors, and that getting converted into orders on a daily basis by end of the day from the depots is something that we are able to see right away. It'll take little more time for this to completely get converted into top-line and bottom-line benefits to the company, which I think is a matter of few quarters, in my view. Some very large systems have to be established in every single factory and depot. While they have all been implemented, we have to do it on the ground. That is something that, in my view, will take a couple of quarters. One small follow-up on this. Primary billing, I don't know if I missed it. Primary billing, what was the impact, and will it get reversed in, say, Q1 or Q2? Like Varun mentioned, we had three days of shutdowns that happened for the transition to happen. That happened in the month of March. Will it get reversed? Yeah. secondary is continued, so logically it should happen. Okay. That's all from me, Varun. Thanks a lot. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, Varun. Good evening. Thanks for the opportunity. I just wanted to understand, in this quarter and taking a view of whole of FY 2022, I think you started saying that there is a cautionary things happening in the market because of pandemic. Would you give us some sense how the category is performing? Because you have taken a lot of action. The reason why I'm asking is that if things are going to be all right in the second half of FY 2022, your new product, fabric agenda can come back, and can you give us some journey, some roadmap, how we should look at FY 2022 in terms of top-line? Well, I won't give you a number on that, but what I can tell you is that last year, our innovation agenda was not as strong as we would have wanted it to be. For the right reasons because it was important to decide on our priorities and go full out on producing products which were the mainline products. As we get out of this pandemic, I think we are also itching to get back to our innovation agenda. We've got a pipeline of products which we've been working on for quite some time, and we would like to get that out into the market. I definitely feel that once we are in normal times, God knows when those normal times are going to come. I had someone ask me last March when is it going to be normal. I would have definitely said that it'll be normal before it actually is becoming normal. Think about it's already 15 months and we still don't know when normalcy is going to be back in the system. Let's hope for the best. Clearly, as things get back to normal, we'll have a lot of ammunition to take us back into a very different playing field. See, the reason why I'm asking, and I need some answer on that. If you have that growth agenda with the new product, would you give us some sense where we have settled for our ad spend in FY 2021, and what should we look at in FY 2022? So we don't give a forward looking growth. I would not like to comment, and frankly, I don't think there's anyone in the world who can comment on what's going to happen. Well, in FY 2020/2021, if you can share. FY21? Yeah. The year which has come. What does that mean? What do you want to know about FY 2021? How much we have spent as a marketing spend, advertising and marketing. I'll take that. The spends that we have done in 2021 has been roughly 1.5% lower than of net sales, lower than the previous years. We started coming back to the normal level in Q3, and we did a little more than the normal levels in Q4, if that answers your question. Wonderful, Sridhar. Thanks. Just last question. Venkat, we have raised some INR 700 odd crores through CP in the last one and a half months. Would you be able to help us to understand what is this money we have raised through commercial paper? This is essentially for, because April to June happens to be our commodity buying season. You'll see this as a pattern every year. Between January and April is when we will start doing this. Wheat buying happens from April to June, and this is essentially for the commodity buying. Essentially for the commodity buying. Okay. Thank you. Wonderful. Thanks, everyone, and all the best to you and team. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Ms. Dipti Sudhir from Britannia Industries Limited for closing comments. Thank you, Sanford. I thank everyone for spending time with us on this call. We look forward to interacting with you again. Good night. Thank you very much. Ladies and gentlemen, on behalf of Britannia Industries Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.