Ladies and gentlemen, good day, and welcome to Britannia Industries Limited Q1 FY23 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. Mayank Mundra from Britannia Industries. Thank you, and over to you, sir. Thanks, Neeraj. Hello, everyone. This is Mayank from the investor relations team. I welcome you all to the Britannia earnings call to discuss the financial results of Q1 2023. Joining us today on this earnings call is our Managing Director, Mr. Varun Berry, Executive Director and CFO, Mr. N. Venkataraman, Chief Commercial Officer, Mr. Vipin Kataria, Chief Marketing Officer, Mr. Amit Doshi, Chief Procurement Officer, Mr. Manoj Balgi, and Chief Development and Quality Officer, Mr. Sudhir Nema. The analyst deck is uploaded on our website. Before I pass it on to Mr. Varun Berry, I would like to draw your attention to the safe harbor statement in the presentation. Over to Mr. Varun Berry with remarks on the performance. Good evening, everyone. Welcome to the Britannia analyst call. I would jump into the deep end. If you were to go to page 3, you know, this is the story of the last six quarters, and it doesn't paint a great picture from an inflation standpoint. If you see, Q1 has been from a consumer food price inflation, which is published at about 8%. The US dollar has strengthened versus the Indian rupee. Getting to the bakery industry, I think this is one industry which has faced the brunt of inflation during this quarter, because wheat has been the single largest inflation for us. If you notice, we've had an inflation. If you compare it or index it to Q3 of 2021, we've had an 80% inflation on wheat. And similarly on palm oil, there's been a 90% inflation. The only difference is that on wheat, the difference between Q4 and Q1, Q4 of 2021-22 and Q1 of 2022-23, it's gone from a 50% inflation to an 80% inflation. While palm oil has gone from an 80% to a 90% inflation. Wheat is really the largest part of the inflation that we are seeing. The only good news is that towards the end of the quarter, you know, it's come down to a lower level than what we saw during the quarter. Which points towards a fact that maybe as we move forward, things could ease up a bit. Similarly, numbers on the next page. If you were to look at same six quarters, if you look at how the inflation has moved from Q4 to Q4 2021-22 to Q1 of 2022-23, you'll again see that there are you know certain ingredients, certain raw materials which are particular to the bakery industry. Wheat flour has gone up considerably. Similarly, sugar, material and industrial fuels have gone up considerably. You know, the key commodities are up, and that's what we've seen. Hopefully, things will come under control as we go up, as we go through the balance of the year. The numbers are there on top of this slide. Basically, wheat flour is at 20% quarter-on-quarter. Industrial fuel is 15% quarter-on-quarter, and palm oil is a 5% quarter-on-quarter. Which, in effective terms is about INR 180 crores of inflation in this quarter alone. How we manage this? Clearly our weapons continue to be the same. There is no alternative to price increases, and we continue to take price increases. Second is, obviously our cost optimization program. We've taken necessary price increases, which are really not covering inflation at this point in time, but a good part of this will be covered by Q2 of this year. Cost efficiency programs, as you're aware, we used to do about 2% of revenues. This year we're looking at doing approximately 3% of revenues, which will accrue to our P&L this year. Moving on to the next slide, which is slide number 6. We have delivered consistent top-line growth, and that continues. We have delivered market share gains for almost 36 quarters now, and that also continues despite the fact that, as market leaders, we've taken, you know, the pricing before everyone else. Which proves that we have the capability of charging a premium on all of our competitors. Our revenue on a 12-month basis has grown by 9%. Operating profits are down 11% because of what I just explained to you, and market share continues to move forward in a positive way. Moving to the next slide, this is a slide that you've seen every quarter and every time on our earnings call. The five planks that we have for driving profitable growth are distribution and marketing, heightened innovation, developing and nurturing the adjacency business, enhancing our competitiveness in everything that we do, and sustainability. I will cover these in a little more detail as I go forward. You know, coming to the first, which is distribution. Rural has been moving well for us. While we hear differently from other companies, we have done well on distribution. Just to remind you, for us, general trade is the most profitable part of our business, and hence driving that is very, very critical. As far as rural is concerned, now we have 27 rural distributors, and our growth in rural are one and a half times what our growth in all India are. Second, the organized trade, which has taken a hit during the COVID days, has continued to move upwards. It moved from 2020 to 2021 at +2% in terms of contribution and saliency. Now it's moved even further by another 200 basis points as far as saliency is concerned. Our e-commerce business has moved to 8x what it used to be in quarter one of 2020. It's large enough. It's over 2.5% of our total revenues. We've embarked on a journey to make sure that we do this the right way. We partnered with a consultant who helped us structure this in a way that we ran it efficiently, and that's helped us quite a bit in the last quarter. On marketing activities, I have Amit here with me. We've had some very exciting product launches and some very exciting marketing campaigns as well. We've also leveraged digital quite well. I'll request Amit to comment on these slides. Hi, everyone. Good evening. As Varun said, we've had, you know, quite a few interesting initiatives, and especially for our new products. If you look at the top of the chart, we launched Biscafe, which is propositioned as the perfect accompaniment to coffee. We see coffee culture growing, and that's a big part of beverage consumption today. This was our first digital-only launch. We see Biscafe again reaching out to millions of coffee lovers. We had an interesting initiative in the east where we've launched Goldmark. This is the part of the market where differentiated crackers are growing very well. This is a regional product where we again leveraged regional celebrity in a really creative way. On the health end, we launched NutriChoice Seeds, NutriChoice Herbs. These are two extremely differentiated products in the health market. This is to bring the benefit of superfoods in a really delightful format to health-active consumers. Another regional launch in Marie Gold Jeera, which is a product which we've co-created with homemakers in Tamil Nadu, keeping their local tastes and preferences in mind. If you see across businesses, we've been despite difficult weather. We've managed to invest in our brands, we've managed to keep them salient, and we've tapped into topical opportunities, and built strong capabilities in using data and technology in doing more targeted marketing. Moving to page number 10, which lays out the various initiatives this quarter. Biscafe, I don't know if you have tried it, but if you haven't, I would urge you to try it. It's a first in India kind of a launch, great product, and we are seeing great traction. Amit has spoken to you about the other biscuit launches that we've done. Happy to report that Treat Croissant has now been finally launched. It's a national scale-up that we are doing. The initial reaction from consumers has been extremely positive. Again, would urge you to try this product. We have it in three flavors, chocolate, vanilla, and mixed fruit. Very exciting products doing extremely well as we scale it up throughout the country. We've also launched a very exciting product in the wafers category. This is only in the south currently because we have limited capacity from our Perundurai plant. It's a cheese wafer, which is just a very nice product with a melt-in-mouth kind of a feeling. Those of you who are in the south, I would urge you to try this as well. At the bottom of the pyramid, we were not present in the INR 5 segment as far as cakes was concerned. It was a segment that was growing very fast. We've just launched a cupcake, which is an INR 5 variant in the east and central regions. That's doing very well for us again. At least the initial reactions are very good. We've had the marble cake launch, which is also a limited launch as of now, but will be scaled up across the country. The next slide on slide number eleven. If you look at our various businesses, as far as the bakery adjacency is concerned, we've had a double-digit volume and value growth in cake. Cake was a business which was flattish for us during COVID because it was more out-of-home. Now with you know, COVID opening up and also our new launches in this category, we are seeing a double-digit volume and value growth. We have continued our profitable growth journey in bread. As far as croissant, I just spoke about that. We are scaling it up nationally with great results. It's doubled in the markets where it was present, which is Kolkata and Chennai, but it's doing extremely well in the new markets as well. Channels, which is modern trade and e-com, again doing very well. Dairy, we've had another strong quarter with robust double-digit growth. Winkin' Cow, where we really leveraged the season, has grown at 140% over last year. International, we've extended our leadership in Nepal with another very, very strong quarter. Middle East is coming back to a healthy double-digit growth now. Moving on to the next slide, which is that of cost efficiencies. We worked very hard basically because the bakery industry was facing the brunt as far as inflation was concerned. We really doubled down on looking at all the cost efficiency measures that we could outline. Our CFO, Venkat, along with other members of all the functions, has really taken this on very seriously. If you were to look at the big blocks out of this, distance to market, we've reduced this by 4% in Q1. This has been done by creating flexible manufacturing capabilities to house multiple products in most of our plants. Truck utilization has become better. This has been done by leveraging technology and obviously very focused execution by our very skilled team, which has helped us enhance the truck utilization by about 3%. Market returns, which is a fantastic story. We were at our ever best in Q4 of last year. In Q1, we've reduced that even further by 15%. This has been possible by process changes that we've brought to the organization. On renewable energy, which constitutes now 40% of the power consumption, obviously has a reduced cost, which is 30% less than what normal power cost is, has given us great returns as well. Finally, we worked on optimal power sourcing by rationalizing our DG usage, which has led to a power cost reduction by 6%. Some very good initiatives here. You know, I've been asked many times in the past how long is this you know cost efficiency journey going to go on? I've always maintained that this is a continuous process. This quarter and this year, as we see, we are looking at even becoming better than what we've done in the past. From a 2%, we are looking at providing a 3% you know savings to the bottom line. Moving on to slide number 13. Big news here. We've achieved 100% plastic neutrality in this quarter. Sudhir who heads R&D and Quality you know has worked very hard to make this happen. We've collected and processed more than 35,000 metric tons of plastic, which has brought us to this place. Very proud of that. We also, as you've seen, we've released the sustainability report and, you know, we continue to work in terms of our, you know, ESG journey. We are only gonna become fitter, stronger as far as that is concerned as we move into this year. Moving to the financials, page, slide number 15. As I've already said, our growth is 9% on the top line. The next slide is about, you know, the, what it's done to the bottom line. Unfortunately, because of the severe inflation, while we've grown 9% on net sales, our operating profit has dropped by 11%. You know that shows in all of the ratios as well. Profit from operations is at 12.3%. Profit before tax is at 12.7%, and profit after tax is at 9.2%. All I can say is that this probably was the peak as far as inflation was concerned, and we are pretty hopeful that things will become better as we go forward. That's all from me. Happy to take any questions from all of you. Over to you. Thank you very much. We'll 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. Participants, you may press star and one to ask a question. Participants are requested to ask two questions at a time. If time permit, please come back in the question queue for a follow-up question. The first question is from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah, thanks. My first question is on e-commerce and quick commerce. If I see your data, last year e-commerce had grown 100%, and in Q1 it has grown 33% because the tax has moved on from 6X. Last year, wave two was very severe in Q1, so it's a very good growth. My question here is, could you tell us how is the mix in e-commerce versus your overall company level? How are the adjacencies doing? Because you had called out that cake is extremely competitive in terms of overall, but is it doing better in e-commerce? And is the market share also higher in e-commerce, quick commerce versus the overall Pan-India number? Right. Hi, Abneesh, this is, Vipin Kataria. Yeah, you're right. Last year there was a multiple growth and we are clocking a pretty large base. Even in this quarter we have witnessed a pretty solid, robust growth. As far as the split between e-com and Q-commerce is concerned, I think it's evolving every quarter. You know, while the large platforms like BigBasket, Flipkart, Amazon, Swiggy remain a large part of it, but as we see, there's a lot of consolidation happening in this space. Therefore it is very hard today to, you know, say what's the salience of the growth separately, right? Because it's a very, very fast evolving space. I think, the overall e-com space is, doing pretty well. Like Varun pointed out, we partnered with, you know, some external experts, and they have given us pretty good learning, and we will build the capability here on. As far as the mix is concerned, the mix in these channels, whether it is e-commerce or modern trade, is far richer, better than general trade. Therefore, certain subcategories in cake, there are certain categories in biscuit or dairy, which finds a natural higher salience in these channels. Sure, that's helpful. My second and last question is on wafer and croissant. You had called out in FY22 annual report that you want to take the leadership position here. I want to understand where you are currently. I understand wafer is INR 750 crore category growing one of the fastest. Similarly, croissant you have doubled. Where are you currently, and how much time you think it will take to reach the leadership position? Both these categories, we are trending towards over INR 100 crore kind of a mark on an annualized basis, which I think is a great start. There are a lot of things to do. Treat Croissant we've got a very good fix on, you know, how we wanna move forward. I think we've perfected the product. It was an international product, and it was doing very well in other countries. We wanted to make sure that we, you know, tailored it to the Indian tastes because we had got feedback from multiple consumers in the beginning on how the bread could be slightly more, you know, different for the Indian consumer. Similarly, the chocolate was a little more European and maybe a little bitter for the Indian consumer. I think we've perfected that. We've got a lot of innovations in the pipeline as far as croissant is concerned. On wafers, we've still got a little bit of way to go. If you remember, we had started the wafer business with not a single cent of investment. It was done through contract packing. Now we've just started to invest. We've got a small flat wafer line and a small sticks line in our Perundurai factory. Because it's small, and all of these lines, they come in small formats. You don't have a massive capacity line for any of these products. We are looking at, you know, recipes, we are looking at formats, we are looking at launching some of these products, testing them out, and scaling them up very, very quickly, throughout, you know, the regions of India through investing even more. I would say, croissant, for us to get to, obviously get to leadership, it's we are already leaders, right? Except for East, where Parle has been operating for the last 10 years. But on an all-India basis, we are already leaders. On wafers, it will probably take us a couple of years to get to that position. Sure. Very quick follow-up here. Wafer number one market share will be how much? And croissant category size will be what, INR 300 crores? Croissant category size currently is not more than INR 100 crore. What's low size? Abneesh Roy, it's a completely new category. It's a completely new category. We are building it. We are building the category. Wafers would be probably INR 500 crores -INR 600 crores. Yeah. Sir, in your annual report you have given INR 750 crore size. My question was, market share of number one player will be what, 40%-50% in wafers? No. Wafers is a very fragmented category. The leader will be about 20%-ish. It's a very fragmented category. Yes. A lot of regional players and private label. This category is also in a very nascent stage. Sure. That's very helpful. Thank you. you. That's all from me. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Thanks for the opportunity. Do you know with these price hikes, you know, intended to cover the inflation and with cost saving benefits starting to, you know, focus clearly in place, would it be fair to expect EBITDA margin to normalize to pre-COVID levels in the second quarter? Or do you think it'll take some time more? No, I would think that, you know, is around the corner. Perfect, sir. Perfect. Sir, I just wanted to pick your brains on the comments that you had made in the earlier quarters about price hikes, about the worry that you had about, you know, sharp price hikes hurting category growth. You know, as customers, you know, switch out, do you see that or is there a change in that thought process? How would you kind of want to look at it now, given that the increase is almost, I think 10 + 10, so about 20% or so? Please correct me if I'm wrong. Yeah. No, you're right. The total price increase would be, you know, over 20%, right? Yes, the point is that there has been a drop as far as volumes are concerned. You know that our volumes are in negative territory, you know, albeit very small single digit negative territory. The number of packets that we sell is flat, and we are hopeful that this will start to grow once again. What's happening really is that, you know, there are biscuits, bakery products, and then there are other products as well. If you think about it, biscuits is the cheapest form of snacking. Even within snacks, there has been a choice that the consumer is making. In that process we are probably ending up winning. That's why we are not facing the kind of, you know, the kind of drops that we were thinking we would face. I think now that we've gotten to this stage where we've had two clear years of price increase, and we haven't seen, you know, we haven't seen a huge negative as far as volumes is concerned, and we continue to see fairly positive revenue growth, I think it's a good sign, and it shows that we should be able to weather this storm in a good way. Okay, sir. Perfect. Sir, lastly, if we have permission, the number of ICDs in this quarter? That's all from my side. Thank you. Venkat, what is the number on ICD? As of 31st March, it was INR 740 crores, and as of 30th June, it is INR 690 crores. Thank you very much, sir. Thank you. Thank you. Next question is from the line of Percy Panthaki from India Infoline. Please go ahead. Hi, sir. Just wanted to understand the volume. It's negative 2% this quarter. When do we see it sort of reviving back? Even in value terms, the growth is around 9%, which is a little below what I would have expected. What is driving this softness in growth? No. If you look at our last year base, it was a fairly high base. Within what is our two-year growth? It's a pretty robust growth. We'll just come back with that number. It's a fairly robust growth that we've seen if you look at a two-year number. Three. Huh? 3. It's about 11% 3 years. Three-year growth is about 11%. That's a CAGR of 11%. We are in a good place there. I don't think there's any issue on the top line growth perspective. I think volumes will start to come back. I don't think the consumers have seen a 23%-24% price increase in two years or six quarters like they've seen it this time. It's bound to have some impact. There will be some impact then. I think we are on a path to recovery. Right. On the price increases, have there been any in the last 3-4 months? Are there sort of any which you think you need to take in the near term, the next 2-3 months? Yes, there have been. In fact, as I was telling you, the total inflation that we faced from Q4 of last year to Q1 of this year, it was approximately INR 180 crores only on the bakery business. Yeah, and this was probably the steepest inflation quarter, and we were not able to take the entire price increase during this quarter. We have taken some price increases in the first quarter, and we will complete that in Q2 of this year. Sir, by Q4, I think on a YOY basis in Q4 you had a price inflation of about 10%. From that level, how much incremental price increase you have either taken or is in the pipeline over the next 2, 3 months? In Q1 and Q2 it'll probably be 6%-7% price increase that we'll have to take. Okay. Okay. Yes. Okay. Understood. Secondly, coming on to your innovation pipeline and also your product mix, what I just wanted to understand is that versus pre-COVID, is the product mix now sort of more superior in terms of if I strip away the price increases and look at the ASP, which would be only the mix impact, are you seeing it higher than pre-COVID level? Or is it that because of a huge amount of inflation generally in the economy as well as in FMCG products and biscuits that people have sort of downtraded and the mix effect is negative versus pre-COVID level? No, we haven't seen a negative mix effect. Our premium segments have been doing fairly well. Even the value of the category has been doing well. It's not like that, you know, the bottom of the pyramid products are seeing a huge resurgence or anything like that. Amit, Vipin, you want to comment on that? Yeah. See, we also shared the organized trade which is moving up, you know, and that really helps in the mix. Our urban markets are doing fairly well, and therefore we don't see any kind of adverse impact or downtrading happening on the mix. Yeah. In fact, Amit here. In fact, the premium categories are growing faster than the bottom of the pyramid. You know, that's always a good sign for us that there's much strength. Even in terms of within the same CI, within the same brand, is there any downgrading to smaller pack sizes, et cetera, or no? Well, you know, the small pack sizes are a fairly large component of our portfolio. No, it's not a visible difference. The contribution of the saliency of the large versus the small packs hasn't changed dramatically. Thank you. Yeah. Sorry to interrupt you. I'll request you to join the queue once again. Participants are requested to stick to two questions per participant. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, Varun. Good evening. Thanks for the opportunity. In this slide, what you have referred, there was no mention about the international. So could you tell what is happening in the Africa and Uganda and Nepal? No, I did mention. It's a part of the slides. It's doing really well. We've had a good quarter as far as international is concerned. I did mention that, you know, for us, if you look at slide 11, if you look at that section of international, we've extended our leadership in Nepal and also Middle East is back. Africa, we you know we have a few irons in the fire. It's not, you know, with the kind of inflation that countries have seen there and also, you know, what kind of the protectionism that countries are bringing to the table has you know been an issue. Despite that, we've grown almost 24% in Africa and GCC. It's a good performance all over as far as international is concerned. Just one follow-up, Varun, here. We have put local contract packing in Africa. Yes. Also we are exporting something from India. Yes. What is the contribution for the international ex India? Sorry. Just repeat that. What is the revenue contribution which we are drawing, which is ex-India? I mean, not sent from India. It's very small currently. It's very, very small. Inconsequential. Do you think, like in the past, maybe we have done few acquisition in the Middle East, and then later on it fizzled out. Does this acquisition or maybe the contract packing arrangement will have a significant revenue contribution the next 3-4 years? No. If you're talking about Africa, my comments are related to Africa. If you're talking about Middle East, we've got a significant part of our production happening there. Africa, whatever we are doing with our contract packers is very, very small as of now. Okay. Okay. Yeah. Second and last question on the dairy. Last call, you have been guiding that there is a commercial production which we are going to take. Yeah. What is the status there? Maybe if you can say that when we see the significant ramp of revenue. We've commercialized our, you know, spray dry plant. We produced the first bag of SMP there, you know, a few days ago. The total commercialization will be happening in stages. We will, you know, do drinks. You know, now that we've started the spray drying, we'll move to drinks in the next two or three months. We'll also start the raw cheese plant where we make cheddar. The processed cheese plant, because of this, semiconductor issue, et cetera, is going to happen sometime, in the first quarter of next year. That's how the phasing is looking. Any further CapEx you have planned on dairy? No. There's no more CapEx. Whatever was planned is already getting in. We are seeing very good traction. Hopefully, this is gonna be a very good venture for us. We've seen a 40% growth as far as dairy is concerned in Q1. Okay. Thank you, Varun, and all the best to you and the team. Thanks. Thank you. Next question is from the line of Varun Singh from IDBI Capital. Please go ahead. Yeah, thank you very much. Sir, my question is on Milk Bikis. We did a very high decibel marketing campaign, and we were very much bullish for premiumizing the largest category. Sir, any comment over here with regards to how the rollout in the northern market is tracking? And if you can also give some objective commentary with regards to milestones that we wish to achieve and where we are as of now? Milk Bikis has been one big success for us. In the Hindi belt and, you know, in other parts, it was predominantly a Tamil Nadu product, where we have a 90%+ share. We've been working at both ends. What we've done in all the other markets, we've rolled out our Milk Bikis Atta with a proposition of Doodh Roti ki Shakti, which is, you know, which is doing really well for us. It's giving us. It's not just one state or two states. It's giving us very good results across the other states other than Tamil Nadu. That continues to be a big resurgence for us. We've also done in Tamil Nadu, we launched Milk Bikis Classic, which is all about the nostalgia of, you know, the Milk Bikis, when we were growing up kind of a thing, which has also done very well for us. Between the two, it's been a very good brand for us from a growth perspective. Amit, you wanna comment? Yeah. Okay. Okay. Sir, I mean, if you can give some guidance with regards to, you know, what is the revenue size that we would have achieved, under this brand and, what are we aspiring for? On Milk Bikis? Yeah. Milk Bikis, we crossed INR 1,000 crore mark last year. You know, it looks like it'll be well past INR 1,000 crore this year. It's growing pretty well and, you know, at both ends, the South business as well as the all India business. It's been a very good story for us because, you know, it's a product which was a regional product, but we were very proud of what it was. The thought was that if it's such a strong product, why can't it become a national product with salience in every state? That's what we've been able to do. Thank you very much, sir. Sir, last question on, sir, what percentage of our manufacturing is, contract manufacturing as of, today? Probably about 40%. Okay, it continues at 40%. Yeah. Okay, sir. Thank you very much, sir. Yeah. Wish you all the best. Yeah. Thanks. Thank you. Next question is from the line of Latika Chopra from JPMorgan Chase. Please go ahead. Yeah. Hi. Thank you for the opportunity. My question was, you know, if you could share some color on what is the salience of biscuits and the bakery adjacencies in your domestic turnover today, you know, in terms of both volume and value. Also, how do you think this is going to trend, you know, over the medium term? It should be about, I would say, just under 80% in domestic only. The you know, the smaller part of the business, which is adjacency, has been growing a little faster. We are hoping that in the next 5-7 years, we can get this to be, let's say, 55%-60% with 40%-45% of our turnover coming from all of our adjacency businesses. Varun, what the profitability metrics, at least on the gross margin level for these adjacencies, how do they compare against biscuits? We've got a very clear grid that we work on. We do not launch any products unless they are accretive to our gross margins. The overall profitability might not be there because these products require you know, some amount of you know, nurturing and advertising, et cetera. Overall, all of our new products have a more accretive and a more attractive gross margin than our current gross margin on biscuits. Sure. You know, last time you mentioned that the NPD contribution to your sales is about 4.5%. Has that number stayed in this band? Or, you know, with a lot of new launches that we are seeing, you know, you think this number could trend up meaningfully? No, it will definitely trend up as we go forward because this year, you know, after two years of focusing on the core, we've now ventured into a lot more innovations. I think that this number is only gonna go up and probably will, we are looking at more like about a 5% revenue coming from innovation. Okay. Just lastly, on CapEx, you know, for FY23, are you still maintaining a INR 650-INR 700 crore kind of a CapEx? What's the amount that you incurred in Q1? Thank you. CapEx, whatever has been committed, it will continue. In addition to that, we are putting up three factories. I think I spoke about it last time as well. We are you know extending our Odisha factory. We are putting up a factory in UP, which should be ready by next year beginning. We are putting up a factory in Tamil Nadu, in Tirunelveli. We are also looking at one more factory which will be commercialized a little later, which is in Bihar. These are the four that we are working on, and obviously the work on Ranjangaon continues. Thereafter, I think we are gonna take a little bit of a CapEx holiday, except for you know innovation where we require some additional you know investments. I think we are gonna be in a very solid place with factories in the right places. As you know that we're getting very good incentives for all of these factories. We are doing this in a way that we have production in the right place close to our demand centers. It gives us efficiencies, it gives us fiscal benefits, and at the same time gives us the space to grow much faster than what we've been growing at. That's useful. Possible to put a number on the kind of investments which go behind these four factories and the timing of phasing out of CapEx? The UP and the Tamil Nadu factory are gonna be approximately INR 300 crore each. The Bihar will probably be slightly lower than that. The extension in Odisha is not gonna be too much. Ranjangaon, we've already committed 1,500. We're almost at about 1,200, 1,300 now. That's the kind of investments that we are looking at. All right. Thank you so much, Varun. Thank you. The next question is from the line of Chinmay Gandre from Reliance Nippon. Please go ahead. Yeah, thank you for taking my question. I just wanted to understand in more detail with respect to your earlier stance of like the overall consumption was supposed to get impacted. Now we are kind of putting out that maybe we have more confidence in terms of the consumption, and we see fairly decent growth rates despite of the inflation. We also have taken a decent like 20% kind of a price hike, right? Just wanted to understand the change in your top business or change in how you are looking at things. No, you're right. Whatever you said is absolutely spot on. We were nervous, as we saw, inflation, year on year. As we continued on our agenda, we were still a little nervous. As we are coming to an end as far as price increases are concerned and we are seeing the results on the ground, we feel definitely more confident than we were in the last six months. Feel positive. I think the consumers today have the capability to absorb these kind of price shocks, and that's what they are reflecting in their purchase behavior. Yeah. My second question is with respect to your price increase. I mean, when we kind of initiated the price increase last year, for us, it was 10% price increase took us almost like six months from Q3 onwards. I mean, till Q4 it took around six months or more. I presume, I mean, now we are at 20, so another 10% price increase we have kind of implemented or are in process of implementing. But this time, I mean, you are fairly confident that by Q2 more or less, this could be effective. Just wanted to understand this. Yes, yes. By Q2, we would be almost where we would want you know the pricing to be. You know, we'll also be able to understand where the inflation story is going. I'm fairly confident that from here on, it's only gonna get better. You know, but one step at a time. You can't be sure in today's world. We'll see how it unfolds as we move forward. This time we are able to, I mean, implement the price hikes faster. I mean, because last time it took much more time in terms of adjusting the pack sizes and, I mean, more from that perspective. No, that's absolutely right. I think the team, our team came together really, really well, and they just did a fantastic job of implementing the price increase. Thank you. Chinmay, I'll request you to come back in the question queue for a follow-up question. Next question is from the line of Alok Shah from Ambit Capital. Please go ahead. Yeah, hi. Good evening. Well, my first question is on the margins. On one side, you know, there are signs of RM inflation abating and then potentially moderating. On the other side, you know, there are plans to increase the cost optimization to 3% now versus 2% earlier. In that context, wanted to check when you get to see this margin expansion, what will be your priority in terms of spending? Would you like to sort of reallocate more towards spend, marketing, et cetera? Or would you know the sense be to bring back your- I'm sorry, but your voice is very feeble. Yeah, sorry. Is this better? Is this better? Yes. Can you repeat it? Yeah. See, I've understood the question, so let me try and answer because your voice was not coming through. There's something wrong with your line. I've understood your question. Yes, we would want to, as pricing normalizes, as profitability normalizes, we would like to spend some more money in supporting our brands, our innovations, our new products. We would normalize our, you know, advertising and sales promotion spend as well, which will give us some muscle on our brand, new products and new categories. Got it. Just a follow-up to that. You know, while you're pushing your adjacencies and the new product, is the thought process more towards doing the trade channel spend that gives you a better ROI or is it more to do with the media? In the initial two years is what I wanted to know. No, we do not support trade spends. My head of sales is sitting here and smiling. We will do a consumer-oriented spends. Okay, got it. Lastly, just wanna check if you're open to commenting on, you know, this new speculation about, you know, appointment of CEO, et cetera. Just wanna check if you're open to commenting on that. Any views? Thank you. No, I think it's a trifle early, but we will comment on that. I think, you know, I will comment once we've, you know, done all of that internally, and we followed whatever are the regulations, for the announcements, so we can chat at that time. Sure. Noted. Thank you very much for future call. Yes. Thank you. Thank you. Participants, we'll take the last question from the line of Hasmukh from Star Union Dai-ichi Life Insurance. Please go ahead. Yeah. Hi. Thanks for the opportunity. My question is on growth from Hindi Belt. We are constantly increasing presence over there, but this time, let's say, monsoon seems to be weak in the parts of UP, Bihar, et cetera. Do you think this will have some negative impact on us, in the coming quarters? Not really. During COVID, we did have a little bit of a setback in a few states. Setback not in terms of, you know, growth. We still continue to see good growth there. Some setback in the kind of targets that we set for ourselves because, you know, supervised distribution was not possible during that time. We are coming back very strongly. We continue to do really well in UP, in Gujarat. Even in MP, we had a little bit of a setback, but we are coming back reasonably strong. Maharashtra is doing well. We are still struggling a bit in Rajasthan, but it's a very small state for us. Bihar is in any case a very strong state, and we continue to gain muscle there. Even Odisha is a very strong state. We've become dominant market leaders there. I think it's looking reasonably good. Barring Rajasthan, where we need to do a lot more hard work, I think the other states are looking very robust. Okay. Okay. Thank you. That's it from my side. Thank you. Okay. Thank you very much. Thank you, guys. Thank you very much. I now hand the conference over to Mr. Mayank Mundra for closing comments. Thanks, everyone, for spending time with us on this call today. We look forward to interacting with you again. Thanks. Thank you very much. On behalf of Britannia Industries Limited, that concludes this conference. 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