Good morning, ladies and gentlemen. Welcome to the Britannia Industries Limited Q1 FY 2022 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 touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Yash Bagri from Britannia Industries Limited. Thank you, and over to you, sir. Thanks, Suzanne. Hi, everyone. This is Yash from the Investor Relations team. First of all, apologies for a couple of minutes delayed start. I welcome you all to the Britannia earnings call to discuss the quarter one FY 2021-2022 financial results. Joining us today on the earnings call is our Managing Director, Mr. Varun Berry, Executive Director and CFO, Mr. N. Venkataraman, VP Procurement, Mr. Manoj Balgi, VP Marketing, Mr. Vinay Subramanyam, and VP Sales, Mr. Vipin Kataria. Before I pass it on to Mr. Varun Berry, I would like to draw your attention to the safe harbor statement presented in the presentation. Over to Mr. Varun Berry on the remarks on the performance. Good morning, everybody. Sorry for the late start. Some technical glitch. Starting with the presentation, if we get to page three. It's really been a tough quarter from a resurgence of COVID standpoint, but we made sure that we got all of our employees vaccinated. We've covered 92% of our employees with one dose, and now that the interval between the two doses is higher, I would think that in the next couple of months, we should be 100% with all our employees. We'd also taken term insurances and hospitalization insurance, which came in very handy during this time. It was a very vicious resurgence, and we are glad that we are out of that. Moving on to the next page, which gives us the performance. Now, what we've tried to do is we've looked at it from three vectors. The year-on-year performance is flattish from a revenue perspective. Sequential growth versus Q4 of last year is 10%, and the 24-month growth is 25%. On the operating profit front, the year-on-year growth is -25%, sequential growth is 12%, and the 24-month growth is at 44%. I would say yes, from a last year perspective, because we'd seen the peak last year in this quarter, and we had all the efficiencies working for us. We were only producing three brands, and all our lines were full belt out on those three brands. There was no variety that we were producing. From that standpoint, yes, we are down, but overall, the performance, as I would look at it, is very good. From a market share perspective, again, our march continues. We've continued to gain share even in this quarter. That's a good sign. If you look at it, all three parameters are fairly healthy and green. Moving on to the next slide, which really talks about what really happened during this quarter. The COVID-19 second wave was very severe. We see the spike there, which suddenly happened during this quarter. This time it was the rural hinterland which was also hit pretty badly. During this time, we also saw crude oil prices go up, and the prices of fuel in India go up fairly considerably. The palm oil prices also went. They were really very different from what we've seen in the last year. We've seen a sudden spike in all fat prices during this quarter. In view of the pandemic and the hardship to the consumer, we were cautious in our price increases. We haven't gone completely all out on price increases. We've started to take some price increases, which the task will get completed, but we were just a little cautious to make sure that there's no sudden impact to the consumers. We were very aggressive on the cost efficiency, which has helped us. Which has helped us not just obviously keep the shape of our profitability, but sequentially improve it as well. We continue to make sure that all our initiatives on the cost efficiency programs are continuing at a pace which is much more brisk than what we've done in the past. Now, moving on, we continue to focus on our strategic planks. We've spoken about these. Innovation, while I must say that because of the COVID-19 second wave, this did take a little bit of a back seat, because people couldn't travel to factories, and even trials were difficult, et cetera. Distribution and marketing, again, took a little bit of a tumble because we wanted our people to be safe, so we told them not to go out and work in the market. I think it was the right thing to do, because we are coming back on all of these parameters very strongly once the pandemic has receded. Our cost focus, as I told you, was very sharp during this quarter. Adjacent business was the products which were for home consumption did well. The on-the-go products did suffer during this time. We worked very hard on our sustainability agenda. From an innovation and renovation standpoint, the two big ones were the Good Day Chocochip relaunch, where we had a surprise pack, and we had some celebrities. It created a lot of excitement, and this product's doing well. The second one was the 50/50 Potazos, which is a very interesting product, which we've launched in the Northeast for the time being. As we speak, we are looking at spreading it across the country. The response from the Northeast has been fairly good. This will be supported with a 360-degree campaign, which includes everything that's there on that chart. Now, marketing activities during this quarter were definitely much more aggressive than what we've seen in the previous year first quarter. Most of our big brands were back on air. We had the Milk Bikis South, which is our very strong bastion. We also launched the rest of India Milk Bikis, which is being promoted by Pankaj Tripathi. It's got a very strong proposition of doodh roti, which is something which is doing very well in the Hindi hinterland. We also had Good Day Cashew and all of these brands. I'm not going to go through all of this here. We were fairly back on air with our brands, on biscuits, as well as on our adjacency products like cake and rusk. This was the report card for the last quarter. If you were to look at direct reach, in March, we were at 23.7 lakh outlets. We did take a tumble in June. As we speak, we are getting back to our base. Our rural distribution continued. No big progress here, but at least we kept it stable. The focus states, the growth kept outpacing the country's average. The channels, the channel growths which had been tepid for the last couple of years, were back in this quarter. We are hoping that the modern trade, the e-commerce, as well as all of the other channels, they'll start to produce results for us, as last year was quite bad on that front. We also continued our march on creating and sustaining an ecosystem of efficiencies. We've spoken about this in the last quarter's call as well. From a process improvement standpoint, we had the S/4HANA, which has been implemented, Arteria, which is our distribution system, and dealer management system for our distributors, and Ariba, which is our procurement and better system. These are very well-stabilized. We are looking at making sure that this starts to support our entire business. We've also got the continuous replenishment system working now, and our sales for the month are fairly stable. We used to have a surge towards the end of the month earlier, but now we are trying to make sure that it's linear throughout the month. We had a better inventory management system, whereby we were able to reduce inventories at the distributors by almost 25%, which helps them in times like this. From a financial efficiency standpoint, we continued to do what we've done in the past, which was wastage reduction, market returns, as well as from the factory, whatever wastages are there, we kept reducing those. Our supply chain efficiencies, while they were not exactly the same as last year same quarter, because last year was just with three brands, et cetera, but it continued to be very good in the factories as well as in the depots. The adjacent business, international, we had a export container availability issue, but we managed. We did see a little bit of a setback because of that. Sailings were delayed for our products. We have done our complete distribution system revamp in the Middle East, which is going to have a long-term positive impact on our business. Nepal continued to grow in double digits. Nepal's been a very good story for us. We continue to gain share as well as we continue to surge as far as revenues and profits are concerned. In the home consumption category, as I said, we fared very well. While on-the-go was impacted, we launched flat wafers and the rolls plant, which is going to get commercialized very soon. It's in our Tamil Nadu factory. We will start producing from that factory in the next couple of months. Our milk collection is about 50,000 a day now, as we gear up for the backend for dairy. On a sustainability front, we worked on the four factors, which is people, growth, governance, and resources. Our ESG agenda is pretty much on stream. We will be publishing our ESG report in August this year. Our team has been working very hard to make sure that we work on this to provide a very clear insight into whatever Britannia is doing on this front. I won't drain this chart, but the details are all there for you to see, and you will soon see the ESG report as well. Coming to the financials. This is our revenue chart. If you were to look at this, our revenues for Q1 were at INR 3,352 crore, which was about 1% lower than what they were in Q1 of the last year. Sequentially, we were better than what we've been in the last two quarters, Q3 and Q4. While we were flat on growth versus last year, the 24-month growth was 25%. On the cost and profitability front, flour was fairly in control. In fact, there was a little bit of a deflation as far as flour pricing was concerned. Sugar was flattish. Milk, there was inflation in all milk products during this quarter. The biggest inflation came on fats, where we saw almost a 50% inflation during this quarter. That did take the overall basket of commodities towards inflationary trend, which we haven't seen for some time. Next slide. On operating profits, sequentially, we did better than what we did in Q4. From 14.9%, we went up to 15.1% this quarter. Even if you were to compare it with Q4 of 2019/2020, we were sequentially better. Obviously, the tall towers that you see in Q1 and Q2 were because of the curves that we saw in our top line, as well as the efficiencies that we got during these quarters because all of the stuff that we were doing by prioritizing our brands, et cetera. If you look at it from a 24-month growth perspective, again, a very solid 44% growth on operating profit as well. These are the key financial lines. This is a consolidated report. Net sales, there are these three numbers that I've been talking about, sequential growth, year-on-year growth, and 24-month growth. They're all there for you to see. If you were to look at the bottom table, profit from operations at 15.1%, profit before tax at 15.8%, and profit after tax at 11.6%. That really is our report card for the quarter. Very happy to answer any questions that you may have. Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. Anyone wishing to ask a question, may please press star and one on your 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, in order to ensure that the management is able to address questions from all participants in this conference, we request you to limit your questions to two per participant only. If time permits, you can come back in the question queue for a follow-up question. The first question from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah, thanks and congrats on a very good sales performance. My first question is on that only. Wanted to understand how much was the impact of S/4HANA restocking Q4 had suffered because of that. There was hardly any panic buying, pantry loading. What led to 10% growth, which was happening for the past two quarters on a 24-month basis, now jumping to 25%? Parle also saw very good July. Wanted to understand, has your July month also been fairly similar kind of performance sustaining, Q1 performance sustaining? Abneesh, yes, we did see a little bit of a resurgence as far as sales were concerned. It's not like what it was last year, but I think also the parameters that we operate with, which is distribution and, that helped us because I think what really happens is that people migrate towards trusted brands, and that's why we saw a resurgence and similarly, maybe Parle saw a similar kind of resurgence. People do tend to lean on their most trusted brand. Luckily for us, most of the brands which did well were the premium brands. Parle obviously gets their resurgence in their Parle-G, which is the most trusted brand from their portfolio. I think it's something which we had seen, if you remember last year, we had seen a very resurgent first quarter, a reasonably resurgent second quarter, and then we'd seen a little bit of a cool off that had happened. The cool off had happened because the economy, et cetera, it was a little bit of a sad kind of a situation with COVID-19 happening and some businesses shutting down, et cetera. I think this time the government hopefully is going to do all that's necessary to keep this going. The rural economy, because it suffered this time because of the COVID-19 situation, I think government's measures will make a huge difference to how this pans out in the coming months and coming quarters. Sure. That's also I'd asked on July, are you able to sustain the strong performance? We never give a future-looking forecast, Abneesh. Yes, we are reasonably stable, I would say. My last question is on Milk Bikis Atta. Last quarter you had mentioned this will see the heaviest advertising any FMCG brand has ever seen. I understand wave two of pandemic would have postponed it. Want to understand two things. One is, now is the advertising going to actually happen? Second, how has the initial, whatever the steps you had put in, because your focus states have done well, 1.33x of the average. Has Milk Bikis also played a big role there? You said it has done well, but want to understand, has it played a big role or is it just the initial steps? No, it's done very well, Abneesh, but I'll let Vinay comment on it. Vinay Subramanyam, who's our VP Marketing. I'll let him comment on it. Vinay, please. Yeah. Hi, Abneesh. Vinay here. First of all, we didn't cut back on any advertising on Milk Bikis in the rest of India. This is one brand that has been advertised very regularly since we launched this in the month of April. We've already done two bursts. You're right, we've seen very good sequential growth happening in Milk Bikis. I can't disclose exact numbers, but it's been far higher than the Britannia growth that we have seen for this brand as such. We are very bullish on this. Even now in July, we have started our third round of advertising as well. Just last follow-up. Where is it taking share from? Is it the initial publicity related burst, the inventory which gets put in, or is it a share gain which is happening from the competition? Abneesh, when you see a resurgence like this, it's obviously a share gain that's happening. See, you've got to remember, the base of the pyramid is the entire sea of glucose that is sold. From that perspective, it will be a very small shift, but overall, yes, it's upgrading consumers from the value products to a product which has a very strong proposition for the Hindi belt. The objective really is not to grow 60% to 70%, but at some stage take this to 150% to 200% kind of growth in these states. That really is what we are looking at. Thank you. The next question is on the line of Aditya Soman from Goldman Sachs. Please go ahead. Hi. Good morning, Varun and team. First question, in terms of your operations, are all your sales people back on the beat, and even the rest of the operations, any sort of interruption that you're still seeing? The second question was on new launches. You talked about wafers, but can you just give us what else is in the pipeline, let's say over the next 6-12 months? Right. Yes, our operations are fully on stream. This resurgence did not see any disruption to our supply chain. That was the good part. Our supply chain, our factories, et cetera, continued to perform the way they were performing. We did see a huge upset on our front end because people couldn't go to the market, and being a very intense distribution house with supervision, with our distributor salesman, et cetera, being a very important part of what we do, it did upset that part of the business. Now that's coming back reasonably strongly. Now we hear that there's some amount of resurgence again in a few states. We are going to be very careful. We are not going to let our employees come in harm's way as far as the COVID-19 infection is concerned. I would say we are 90% there as far as the front end is concerned now. Now, the thing is that during this time, there were trials, et cetera. There were lots of products that we'd planned to launch. There were lots of health and wellness products that we'd planned to launch. We were not able to take trials, et cetera, because our people couldn't travel to the factories. It was becoming difficult to get the product to the team without our people being there. Remotely, it was becoming a little difficult. This quarter, we've told you, Potazos is one product, which is a very interesting product. We are now looking at wafer sticks, which will be launched soon. We've also got Milk Bikis Classic, which is going back to what Milk Bikis used to look like. Vinay, that's already in the market, isn't it? That's going into market now. That's going into market now. We've got some other NutriChoice products which are also coming up in a few months. Thanks, Varun. In terms of price points, again, these will be spread across all your price points? Or are you targeting a specific price point? With Milk Bikis, I'm assuming it's probably towards the more affordable side, but overall? Affordable price points can always be created. It's just how much grammage are you putting in it? In a market like India, you'll always need a INR 10 or a INR 20 price point even for your premium products. We will continue to do that. These products mostly are in the premium range. Milk Bikis Classic is a reasonably premium product. Thank you. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi. Good morning, Varun and team. Two questions. First, on the margin. When I look at your gross margins, these are multi-quarter low. If I look at your operating EBITDA margins, let's say FY 2018, 2019, 2020, you did about 15%-16% at operating EBITDA margin level. Now, this quarter is going back to historic levels. How do you think about margins in the medium term, given that you are planning to take up product price hikes, but I'm guessing that A&P staff costs will also move up. Should we be looking at about 15%- 16%, what you have historically done? See, you've got to remember one thing, that when inflation hits you suddenly, there's a little bit of a lag between how you react to it, because in normal times, we would have reacted aggressively to inflationary trend and taken our prices up almost immediately. Because of the situation that existed on the ground, there was obviously a little bit of turmoil with consumers as well. We thought that it would be the right thing to take the pricing gradually. That's what we are doing. I would think that, yes, we would get back to our margins as they stood and beyond in the coming time. A price increase is something that we'll have to, and we planned it, and it's all getting rolled out as we speak. Sure. The second thing is, Varun, about your ambition of being total foods company, I'm guessing that you lost a lot of ground in the last few quarters, starting with first wave and then second wave. Can you just elaborate on what are the goalposts that you have? How are you going to get to a total food company ambition? I'm guessing, given the uncertainty or concern around third wave, you would still go slow, the croissant launches and all that. Can you just elaborate on that part? Thank you. That's a great question. You're right. What really has happened really is that a lot of our, if you look at the adjacency products, a lot of these adjacency products are on the go. This was not the time to really go helter-skelter after the on-the-go products, because there was no one on the go, right? It was all home consumption. That did disrupt us, not just from a sales and marketing perspective, but even from trials, et cetera. It's very difficult to explain the elaborate process that we follow to make sure that whatever products we launch, especially the new categories, that we get them to a T. For example, let me take the example of croissant. We put croissant in test market about a year and a half back. We still haven't been able to get it to exactly what the Indian consumer needs. Feedback from the market is that today the product is a darn sight better appreciated a lot more by the Indian consumer than when we launched it. That feedback is coming not just from consumers in our research, but even from friends and family. The issue is that we are still not happy with it. We have to do some more trials. When we do trials, we've got trials that we do in factories in Greece which is where our partner is, and we also do some trials in India, and we finally research them through consumers. The cycle of this, especially for new products, is very elaborate. This probably will culminate in the next six months, where we'll have the final product and we'll roll it out. That's what's happened. Because of disruption, not just in India, but in Greece and everywhere else, and even raw materials, the specific cocoa that we wanted, we couldn't get because of the supply chain issues coming into India, et cetera. All that has disrupted it. I would say that it's just a disruption. We will get back to speed. There's some very exciting thoughts that we have, which if they were to come through, it could be a very exciting journey for Britannia, not just in the existing products that you've heard of, but it could mean that we could get into certain categories which could be even more exciting than what we've been talking about. I think it's just a disruption, and we'll come back to speed very quickly. Completely understand. Wish you all the best, Varun and team. Thanks. Thank you. Thank you. The next question is from the line of Alok from Ambit Capital. Please go ahead. Yeah, hi. Congratulations on the good performance. My question was also on the adjacent categories. Firstly, I wanted to check, would you be at some point in time looking to disclose the revenue proportion coming from adjacent categories? Can we get a ballpark number at present? One would be biscuits, adjacent categories and dairy. Dairy we know 5%, but the adjacent would be what proportion? If at all you can share. The adjacent categories would be at about INR 2,500 approximately, including all of our products which are outside of biscuits. Yes, dairy is about 5% of the total mix. Got it. Yeah. Got it. The INR 2,500 of course covers the dairy bit also, right? We'll back calculate accordingly. Yes. Okay. The second question was on the Ranjangaon plant. I believe that a lot of efforts over the last two, three years have been put into the Ranjangaon operationalization. What percentage of the plant would be operational currently, and by when can we see 100% operationalization for the same? It's been a process of continuous expansion. Currently, Venkat, how many lines do we have operating there? Eight lines, doing roughly 10% of total production currently. Eight, including the croissant and everything? Yes. We've got eight lines which are fully operational in Ranjangaon. We are putting up some more. For example, right now we're thinking of putting up a rusk line there as well. We probably going to put up a few more biscuit lines. It gives us 10% of our total production from one factory. We are also in the process of putting up a dairy facility, which should be ready by next year. I would say second quarter next year. Our dairy facility should be ready, that's going to be a facility to really see. The building is coming up as we speak. We would actually welcome you guys once the COVID-19 scenario gets over. We would like to welcome you and show you our plant. We are very proud of what we've been able to create. That'd be really great. Just a follow-up to that, because you say Ranjangaon would also have dairy lines. I'm assuming the asset turn overall would be what more than possibly 4x- 5x in that plant? Venkat? Asset turns like 4x-5x. No, they ask very difficult questions which only the CFO can answer. Yes. Basically, what I was trying to get at is that once the Ranjangaon is operationalized, what% of revenues in the adjacent categories will come from Ranjangaon versus the biscuit? Yeah. No, adjacent category, we will still have to work out. We have not thought about it on those lines currently. As we speak today, like Varun mentioned, this factory, the investment that we have done so far is about INR 650 crore, and it's currently generating a revenue of about INR 100 crore. Okay. Some of the lines are not fully utilized currently. We have put up few lines very recently. There's a Little Hearts line that we have put up, which is yet to be fully used, et cetera. Some of the cake lines are also not being fully utilized currently. Possibly once these get fully utilized, we will have a turnover of about INR 15 crore-INR 1,600 crore on the current investments. Okay. That's it. Yeah. Other thing to remember is that the Maharashtra government has been kind enough to give us 110% incentive. 110% of our investment in that plant is coming back to us in terms of our tax benefits. Right. Thank you very much, and look forward to visiting the plant once the situation normalizes. Thank you and good luck. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Capital. Please go ahead. Hi, Varun. Hi, Venkat. Good morning, and thanks for the opportunity. Indeed, I was very amazed that you have beaten my estimates. To ask the question on Slide 15, we have shown the growth for quarter one, 26%, quarter two, 11%, quarter three, 6%, quarter four, 8%, and now we're at -1%. Could you talk about something, how do you see going forward, and maybe if you can spend a minute on how the category is behaving, whether the premiumization or the lower end of the pyramid is growing faster or value for money is still ruling the market? Shirish, in today's times, nobody can forecast what's going to happen tomorrow. Really, it's impossible. We do our plans, we redo our plans, we do strategic plans, but everything is dependent on how things pan out as we operate. Very difficult to say. Just to answer your question on the premiumization versus value, et cetera. See, we don't have much value in our portfolio, right? We don't sell value products. Even if there's a resurgence, it's a very small percentage of our portfolio. All our resurgence is coming in products which are premium products. I would think that on an overall market construct basis, there is a little bit of a resurgence in value. Luckily for us, we are very small in that category, and hence our resurgence is in our premium products only. Actually the belly of the market, which is the Marie and all of that, Milk Bikis, Marie, that's where we are seeing our resurgence. Hopefully we'll keep it that way, because we don't plan to make a very big pitch for the value portfolio because the margins there with the current inflation are single digit. I don't want to be growing 30%, 40% in a category which doesn't give me the kind of margins that I'm looking for. Varun, just follow up on that. When we say that -1% decline on the revenue, would you be able to help me with the volume? What we have seen, is it higher than -1% or positive? Yes, it is. It's + 1%. The volume is + 1%. The reason for that really is that last year we were only selling three b rands, and no value at all because we didn't have capacity for value. This year we've got a mix which also has a bit of value. While the volumes are positive, the revenues are actually both are reasonably flattish. Okay. My second question is, if you can spend a minute or two, you did mention in the beginning that Middle East you have done the entire revamp. What exactly you have done, and if you can spend a minute on Nepal, how it is shaping and what is the number in terms of revenue volume, something you can give quantitative detail on Nepal business? Sorry? You're talking about Nepal? I'm talking about international. You mentioned that you have done some revamp in the Middle East in terms of distribution. Yes. Okay. What exactly you have done and about Nepal? Yeah. On the distributor front, we have changed our distributor. We did a full pitch for our business there. It's a very solid business. We were not getting the kind of traction on distribution, and in terms of execution with the earlier partner. We did a pitch. We got a new partner who's very solid, very good on execution. That changeover has happened. Obviously, there are some disruptions which happen when there is a changeover, because you have to take stock from the old distributor, et cetera. All that was in process during this quarter. As we go forward, this is going to be a very positive move for our Middle East business. As far as Nepal is concerned, as I told you, we've become market leaders, but that's not our only ambition. Our ambition really is to make it into a fairly large and a dominant business. We are seeing a 26% increase in our revenues there, despite lockdowns and all of that. We are hoping that whatever we'd envisioned for Nepal will come true as we go forward. Does that answer your question? Thank you very much. All the best to you. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie Group. Please go ahead. Hi, Varun and team. Thanks a lot for this opportunity. I just wanted to understand the medium-term margin better. Last year we'd moved almost to 19%-20% odd levels. This year, obviously, near term, I understand the pricing impact, which you will kind of take calibrated price increase. For medium-term guidance, should we look at 19%-20% as the new level that you would seek to achieve, or is 16%-17% what you have historically seen the level that is the right way to look at, because there was one-offs that happened in that 19%-20%. Thank you. We are in the process of continuous improvement, but not continuous improvement over last year's margins, because those were exceptional margins because of all the efficiencies, et cetera. Yes, continuous improvement over historical margins is what we would look to achieve. Perfect, sir. The second bit was from a pricing element. While you have taken lesser interventions in this quarter, has that in any sense reduced the gap between us and the other players, or was that gap maintained? Gap in what sense? Are you saying that others have increased price and we haven't? Yes, sir. Is there an increase in price? No. As the market leaders, we are always the first to take price increases. The market leader always has to initiate that. We are not ones who believe in price wars and taking advantage of a situation like this. We believe in taking the price at the right time, and that's what's got the entire industry to a situation where the entire industry is today making a lot more margin than what we've ever made in the past. Right? The industry has gotten used to it. We've never taken advantage of anyone else's situation. We always initiate price increases, and we will continue to do so. Perfect. A bookkeeping, if I may, sir, at the last. These phantom options, would that in any way change the employee cost outlook, or is this more a restatement of the existing ESOP plan? That's where I cut. Thanks. That's all from my side. Yeah. ESOP scheme is being replaced by a stock appreciation scheme, and the terms are going to be similar. Therefore, at the moment, as we speak, on the options that are vesting and are likely to be exercised in this year, we don't see any implications on the P&L. Okay, sir. Thank you very much, sir. Thank you. The next question is from the line of Amnish Agarwal from Prabhudas Lilladher. Please go ahead. Yeah. Hi, sir. Thanks for the opportunity. A couple of questions from my side. First being that, as you said, that the inflation number has been pretty high. What has been the absolute inflation number during the quarter, and do you believe that this number has almost gone through the peak of the same? The second is, can you guide us to that due to this pandemic now, any change in the CapEx number which has happened? Thirdly, what is the total amount of ICDs which are currently present and their two group companies? Thanks. The inflation is north of 6%-7% as we stand versus last year. If you were to take the fuel prices, et cetera, which hits our supply chain, that will be another 1%-2%. It's a very high inflation number that we are currently sitting on. I think in a situation like this, it just necessitates cost efficiencies can never take care of this kind of inflation. 2%-3%, we usually can take care of, but this necessitates price increases, and that's why we've moved forward with that. What was your second question? Sorry. Yeah. Second question was on CapEx and then on the ICDs. CapEx, we know the projects that we are working on. We've got new plants. We've got the expansion of our Khurda plant. Thereafter, we've got a new plant in Tamil Nadu because we're running short on capacity in Tamil Nadu. In the north, with the resurgence that we have in the Hindi belt, it necessitates a plant in U.P. We've already bought the land in U.P., which is in Barabanki, about 30 km from Lucknow, and we will start to execute on that plant as well. We've got a very good incentive from the U.P. government. We will start. Those are the projects, and of course, our Ranjangaon expansion which includes the dairy plant. Approximately INR 130 crore, INR 140 crore is our CapEx for this year, right? No. [Inaudible] Yeah. At this point in time, we've got about INR 130 crore of CapEx. With all these projects coming through, it depends on how quickly we want to execute this and how the demand situation necessitates expansion. That's where we are at. On ICD, we are much below what we've been in the past. We stand at about INR 470 crore currently. Okay. You said the INR 470 crore is to group companies or overall? This is to the two group companies. Okay. Any change since 31st of March? Yes, it's substantially below. As of March it was INR 790 crore, and as of 30th June it is at INR 470 crore. Okay, sir. Thanks a lot. Yes. Thank you. The next question is from the line of Chanchal Khandelwal from Aditya Birla Capital. Please go ahead. Hi. Good morning, everyone. Thanks, Varun, for the opportunity. Firstly, congrats on good set of numbers on a relative basis. Secondly, Varun, one question on the management bandwidth. As you are looking to scale the organization, in last six months, we have seen couple of guys leave the team. The good part is they joined different companies as CEO, which shows that management capability. What are you doing to retain the company when you're on the path to have a greater food company and have a greater food ambition? If you can touch upon this. Yeah. See, if there's someone leaving to be the CEO of a large public company, it's always a privilege to have that to happen. Yes, we miss such people. I would say that we probably have a fairly good talent pool, and even if you were to look at the people who we have currently. Vinay Subramanyam, who's sitting in front of me, who's the VP, marketing, and Vipin Kataria, who's here as well, who's our sales head who replaced Gunjan, who used to be sales head till about a year back. Fairly good. I think we've got a pipeline of talent which can rise to the occasion. Having said that, the objective is to make sure that we create environment where people want to stay for a long haul. One thing that I must tell you, that there's something magical about Britannia. The number of returnees that we have to this company, I don't think in my career I've seen so many people coming back and joining a company that they worked in the past. We continue to get people coming back to us after having moved out, and then coming back to us. There's some magic to that. Yes, you're right. We are looking at how we can make this more sticky and make sure that we can offer more opportunities to our people to expand the pool even further. Sure. Thanks, Varun. Varun, the second question is on the D2C, is when you budget and get down, and people are talking about online platform and launching various brands in the online platform. Any thoughts on those lines? I heard when you said that you may look to enter a new category, which is a much bigger category. If you can touch upon both these, because you have a bigger activity, I thought, in the online platform and the food platform both. Online platform, having our own online platform is certainly an idea. I do think that the objective really should be to work with partners. There are a lot of e-commerce players. If you look at our e-commerce trajectory, it's been really good. We used to be 0.4%, 0.5% of total sales coming out of e-commerce, and that's moved north of 2%. However, it's only 2%, right? Yes. With our kind of products, I think that should be at least in the range of 5%. We are looking at all measures to see how we can take that up further. I think that really is the trick. The best thing to do is to work with people who are experts at that, and creating a joint business which is worthwhile for them and us as well. This is not saying that we will not look at our own B2C at some stage. Of course, we will evaluate that. At this point in time, I think we need to perfect it with our partners, and that's what we are looking forward to. Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity. Can you help us understand the price hikes and the impact better? I think you did a good amount of price hike on and the value segment, four, five years back of Parle and Tiger, almost a month back. What is the quantum of price hike you've taken and you're looking to take, and would it be enough to offset the 7% or 8% inflation, which you talked about? Yes. Obviously, over a period of time, we would want to offset the entire inflation that we are seeing today. Whatever price hikes were taken earlier, have already been negated by inflation. As I told you, Parle had taken a price hike. We had taken a price hike in the value segment, but our gross margins are back to single digit again because of what inflation that we've seen in the marketplace. Two points here. One is, hike is necessitated, and we will go through in the next three months or so from our standpoint. Second is, there is no substitute for a price hike when the inflation is so high. We will have to look at it. Okay. Second and last question, any thoughts on the PLI benefits on food processing and what kind of benefits you would expect from it over the next few years? Also, if you can talk about the international expansion beyond the Middle East and Nepal. Yeah. PLI, we have applied for the incentive under PLI, under the category of ready-to-eat, ready-to-cook category. The incentive that companies are eligible for is about 10% of the incremental sale. This, however, is capped by the total outlay that the government is going to have for this category year-on-year, is subject to the overall claims that are going to come in this category. It is difficult to make an estimate at this point in time, but we have applied for that. What was your second question? International expansion. Plans for international expansion. As far as international expansion is concerned, I think I spoke in the last meeting as well. We've commercialized a partner in Egypt who is starting to produce product for us. Just yesterday, actually, we've got the clearance for a partner producing in Uganda as well. These are two markets in Africa, which can give us access to a lot more countries, and we are looking forward to that. We are looking at one or two other opportunities, and hopefully, in the next quarter or so, we'll be able to frame those up as well. Okay. That's it from my side. Thank you, sir. Yeah. Thanks. Thank you. Ladies and gentlemen, we'll be taking the last question. That is on the line of Mr. Vishal Punmiya from Nirmal Bang Institutional Equities. Please go ahead. Yeah. Thank you. Thank you for the opportunity. Just one question. In terms of SKU mix, how should things pan out going forward? We have seen large packs being sold in a bigger way period. If you could just compare the current times with FY 2020, how should the mix pan out, especially in the general trade channel, where lower SKUs were of a bigger mix compared to the modern trade channel. How should that mix pan out over the next few years? This quarter has not been very different from what we've seen historically. Last year, we'd seen that trend where we'd seen large packs being consumed a lot more because people were sitting at home. This quarter was more on historical trends. Every segment, whether it's family pack or LUPs, et cetera, have been at the same rate of growth. Let's see how it goes. I do think that evolving times, we've got to watch out very carefully and modify our behavior according to what the consumer wants. With the normalcy of modern trade, do you expect this to improve at least in the next two, three quarters? Yeah. If you just see what I presented in the presentation as well, we are seeing modern trade get back. The alternate channels, modern trade, e-com, et cetera, we clubbed it together, we were showing a 4% downside last year, which has now come to a 12% upside versus standard. Hopefully, this should come back to normal. Not just modern trade, but also traffic clusters, institutions, as companies start to open, as railways start their trains normally, et cetera, airports, et cetera. I think all those will come back, we are hoping that we'll get some upsides from there. Sure. Thanks. Just last one question. In terms of the new product that you have launched, Potazos, it's a second bridge product that you have introduced into your portfolio after Dukes. What do you see in terms of pricing, in terms of distribution expansion? Currently, there is obviously a huge problem in terms of the other two players in the market, where their distribution is also limited to east. Can we basically, from Britannia's perspective, scale that product to other markets in a much faster way? No, absolutely. There is some technology which is required to produce this product, and we've got that going only in our northeast plant. We are getting this ready in another three plants across the country, and it should be ready in the next couple of months. Hopefully, in the next three or four months, we should be able to make this product pan-India. I do think that it's an exceptional product which can create a lot of excitement with consumers. We are looking forward to that. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Yash Bagri for his closing comments. I thank everyone for spending time with us today. We look forward to interacting with you again. Thank you. Ladies and gentlemen, on behalf of Britannia Industries Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.