Ladies and gentlemen, good day and welcome to the Britannia Industries Limited Q4 FY 2023 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference, 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 Limited. Thank you, and over to you, sir. Thanks, [Robin]. 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 Q4 2023. Joining us today on the earnings call is our Vice Chairman and Managing Director, Mr. Varun Berry, Executive Director and CEO, Mr. Rajneet Kohli, Executive Director and CFO, Mr. N. Venkataraman, Chief Sales Officer, Mr. Vipin Kataria, Chief Marketing Officer, Mr. Amit Doshi, and Chief Procurement Officer, Mr. Manoj Balgi. The earnings deck is available 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. Sorry to draw you out so late in the evening. Let's get to the deck. On page number three, you will see our revenue, profit as well as our market share trend. For the quarter, we've grown 11% revenues. For the year that's gone by, it's a 15% revenue growth. Operating profits for the quarter have grown by 47%, and for the year it's at 30%. Our market share gains continue and the gap with the second-largest competitor has gone up in this quarter as well. Moving to the next slide, which is our regular slide which gives the 5, you know, strategic pillars which we drive to get profitable growth. I'll take each one of these as we go forward. On the distribution front, as you see, we've got, you know, the number of rural distributors have gone up from 26,000 in March 2022 to 28,000 in March 2023. We've added 2,000 distributors. The rural market share is, you know, 1.4 times what we had for all India. We continue to gain more share in rural. If you look at our direct reach, it's gone up by 2 lakh outlets. We've gone up from 25,000 to 27,000 approximately in terms of number of outlets we directly cover. Sorry, 27 lakh outlets. Moving on to the next slide, which is on the marketing activities. This quarter we relaunched Pure Magic, which is doing reasonably well. We also had the launch of aseptic PET bottles, drinks in aseptic PET bottles, and that's doing really well for us. On the other front, the brands that were on air, Marie, which is on its season 4 of the startup contest, was on air. Good Day Chocochip is on air and is doing quite well. Maska Chaska, where we used Ravi Shastri, that has, you know, gained good market share this quarter. Potazos and Rusk were all on air. Digital activities also were there on most of these brands. Moving on to the next slide. Innovation. We've got some good results there. Golmaal, which was started off in the east, has now got extended to south and west. We are seeing a 40% sequential shift quarter-on-quarter. The NutriChoice Seeds & Herbs, we are seeing a 50% sequential shift quarter-on-quarter. Milk Bikis Classic, which was launched in Tamil Nadu, is also seeing a very healthy sequential shift. Croissant, we launched our orange variant, and Croissant continues to do quite well for us. I've already spoken about the milkshakes. We have our milkshakes in PE, in Tetra Pak, and now we've launched it in aseptic PET. We've added to that Rich Milkshakes, which was launched last quarter, as well as coconut water, which was recently launched. One point that I wanted to make on our milkshakes is that we are probably one of the few companies which are making these milkshakes from fresh milk. Hopefully, the quality will speak for itself. Winkin' Cow is now a 150 crore brand. You know, we are sourcing all of our aseptic PET from our new factory in Ranjangaon now. Again, I would urge you, if you're interested in, you know, taking a tour of our factory, you know, we would be very happy to take you there. Our distribution reach is 2 times shift over last year as far as milkshakes is concerned. Our overall innovation contribution is looking pretty good. On the adjacent business, we've got the bakery adjacencies where that continues to be a profitable growth trajectory, which, you know, for many years we've not seen. Now for the last five, six years, we've been growing our bread business profitably. We've commercialized three new lines in rusks. You know, I don't know if you know, but we never had any rusk line besides one in Madurai. Now we are commercializing three new line, which will ensure that we produce very good quality products and at the right price. Cake, you know, there was a mushrooming of cake brands all across, and there were different types of cakes which were coming in. We've now been able to bridge that portfolio gap, and we've got a full contingent of cake products which are there in most markets. Croissant, I've already spoken about. Basically, we joined the 100 crore club in this category. The base markets, which are Tamil Nadu and West Bengal, where we were doing our test market, they continue to grow more than 50% year-on-year, and the new markets are coming to play. We've spoken about the new flavor. Our dairy, we have started to distribute. We are now transitioning to the Britannia Laughing Cow brand. As you know that we've got a joint venture with Bel, and that is scaling up. We've spoken about Winkin' Cow. I won't, you know, repeat that. Total milk collection is, you know, directly from farmers is at 70,000 liters. But we do about 130,000 liters of bulk collection, which takes our total milk collection to 200,000 liters per day. We are now supplying the entire SMP and SCM for our captive consumption to our bakery division from the dairy plant. Next- Ladies and gentlemen, the line for the management seems to have disconnected. Please stay with us while we reconnect with the management. Ladies and gentlemen, thank you for your patience. We have reconnected with the management. Over to you, sir. Sorry, guys, some technical glitch. I was on slide number nine, and I was talking about the waste that we've reduced in everything that we do. Reducing the distance to market for all the products that go to the consumer, as well as reducing the distance of the supplies that we get to the plants. We've also got, you know, the renewable energy has moved up, and I'll come to the numbers as we talk about our ESG agenda. We've also, you know, the journey on reverse auctions for our procurement is moving quite well. Our supply chain replenishment, sales productivities are looking pretty good. As a result of that, in 2022, 2023, you know, we've had a spectacular year from, you know, savings standpoint, and it's nine times what it used to be in 2013, 2014. It's been a huge jump shift in this year. It was necessitated through the, you know, the inflation that we saw, and the team really got together to make sure that we make the best of it. Moving on to slide number 10, which is our ESG agenda. There are four pillars: people, resources, growth, and governance. As far as people is concerned, we are now, you know, dealing with almost 3,000 farmers who are enrolled as our milk supplying farmers. We've also got a formal extension program where over 3,000 farmers have been supported, who are beneficiaries of all the support that we provide out of the medical camps that we've conducted this year. There are also approximately 2 lakh beneficiaries of our Britannia Nutrition Foundation, and we've got 75% female workmen in the new greenfield factories that we've commercialized this year. All very strong points. From a resources standpoint, as I was saying, renewable energy, we moved up from 30% to 36% during this year. Our CO2 emissions have, you know, reduced by 1.1% this year. We've reduced 51 tons of plastic in the products that we make. We've also got 71% of the plastic that we use as recyclable plastic. This is basically BOPP and CPP. These are all recyclable laminates as well as the NI bags that we do for wholesale packs. We've also reduced our water consumption by 33% versus 2019-2020. This 33% is per ton of product that we make. We are in 2022, 2023 as well plastic neutral. We've collected and sent for recycling almost 33,000 tons of plastic. From a growth perspective, we had reduction of sugar. We reduced it by 1% over 2021, 2022, and we reduced sodium by 5% over the same period. We've also done from a governance standpoint, we've got 81 critical suppliers who have contributed to more than 50% of the total volume sourced by us. We assess them on a few parameters. The parameters that we assess them on are sustainability, social compliance, which is basically using the right kind of labor, et cetera. you know, diversity in their labor, water management, waste management systems that they use, plastic, how much plastic that they use and how much plastic do they collect and energy management. We, we assess them on these and they are coming out good, so we are happy with the progress there as well. Moving on to slide number 12, which gives us the top line growth. If you will see, in Q4 we've done INR 3,900 crores of revenue, which is 11% on a 12-month growth and 28% on a 24-month growth Both ways, we've got very solid and very good numbers on growth. The year we've ended 2022, 2023 at a 13% growth on revenue. Moving to cost and profitability. Slide number 14, which is the country's food price index, which is showing that over the last year there is a 10% inflation for the food that all of us consume as Indian. You know about the US dollar. It's it moved up, but it's now sort of stabilized the rupee. Moving to the next slide, which shows what kind of inflation we've seen. We've only got four commodities here. And these four commodities, you know, are about 60% of our total purchase. Flour, which is the largest, is actually exhibiting a fair amount of inflation. Versus last quarter, the prices are up 4%, and over last year they are up 21%. Palm oil is a deflation, it's down 6% versus last quarter and 14% versus last year. Laminates again, deflationary, -5% and -9%, and corrugated boxes similarly -7% and -16%. The other commodities which are showing some signs of inflation, dairy is a very high inflation versus last quarter at 20% and versus last year at 54%. We are hoping that at some stage we will see some respite here, but no, it's not in sight right now. Sugar again, some signs of inflation while versus last year and last quarter it's flattish, but we are seeing some signs of inflation here. That's the round up on commodities. The summary is that this year we've taken pricing actions to make sure that we offset inflation. We were not clear what kind of inflation, because for a prolonged period we've seen a very large inflation. We said that it's important that we, you know, take pricing, and we make sure that we protect our bottom line. There's some softening of material prices in the second half of this year. We also stepped up cost efficiencies, and we are also evaluating if there are some corrections in price that we need to make. Outlook is that we will remain vigilant on competitive pricing actions, we will closely monitor the price of wheat and sugar. Wherever necessary, we will make the right decision on, you know, if there is a price reduction required. There are certain brands and certain packs where we already initiated a price reduction or promotion. We will continue to watch this space and see what needs to be done as we move forward. Now moving to slide number 17, which is on our operating profits. As you see, from Q1 at 12.3%, Q2 was at 15.2%, Q3 was at 18.5%, and Q4 is at 18.9% operating profit. If you were to look at Q4's, 12-month growth on profitability, on operating profit, it's at 47%, and 24-month growth is at 63%. Very healthy numbers there. Moving to the last slide number 18. If you look at the quarter results, 11% net sales, 47% operating profit, 47% PBT, and the same number as Q3. The year number 15%, 30%, 46%, and 52%. If you were to look at our ratios, profit from operations in 2022/2023, 16.3% versus 2021/2022 at 14.3%. Profit before tax is at 19% versus 14.9%. Profit after tax is at 14.5% versus 10.9%. Those are the results. As I said earlier, we might have to moderate our pricing at some stage, but overall the trends are looking very good. With that, I will open the house for questions. Over to you, guys. Thank you. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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. Before we take the first question, we'd like to remind the participants that in order to ensure that the management is able to address questions from all participants, we request you to please limit your questions to two per participant. The first question is from the line of Chirag Shah from CLSA. Please go ahead. Yeah. Thank you. I just had a couple of quick questions. When I look at the other operating income line, that has shot up very sharply in the last two quarters. This quarter it is almost 17% of PBT. What is that function of? I know, there are some incentives from the state government that are included here. Is there any lumpy revenue base that is sitting this quarter in the other operating income line? Yes. It's the PLI that we got from the government. As you know that, there was the PLI scheme which was initiated by the government and we were one of the first applicants, and we got the benefit of that. Venkat, do you wanna take that? Yeah. You're right. It's the PLI essentially. This is for the year 2021 and 2022 and 2022/2023. We have booked in the Q3 and Q4. Sorry, PLI for FY 2022 and 2023, you've got it in the second half of this year. Is that understanding right? For 2021 and 2022, we realized the money in the current year. Yes. 2021/2022 and 2022/2023 came in the second half of the current year. Right. That's why it's sitting there. Can you just quantify the PLI amount number, please? You know, because this number is quite large, and now as a percentage of PBT, how should we think of that number going forward? About INR 90 odd crore is what is appearing in Q4. Now we are expected to get about INR 15-20 crore per quarter moving forward. This was a accumulation of many quarters. This will be a one-time, and as we go forward, it'll be about INR 15-20 crore per quarter. Okay. INR 15-20 crore per quarter would sustain into the next year? Yes, that's it. Got it. Just secondly, how should we read the competitive intensity as of now? Is there a moderation? How are we in terms of pricing action versus some of our key competition? It was a very, very uncertain year because the inflation, we've never seen this kind of sustained inflation for such a long time for many, many years now. There was everyone was double- guessing where this is going. We had taken a decision that we will make sure that we cover the inflation through our pricing review, and we went about that. There were areas where we were way above the premium that we would like to have over other brands. As I was telling you, we made some corrections. We were hoping that the entire table would move up. Some places it moved up, some places it didn't. Competitive intensity is, I would say, maybe slightly higher than what it was earlier, but nothing, you know, extraordinary. It's just that the period was so uncertain that, you know, people were double-guessing. While we had the advantage of commodity buying last year, other people didn't. So it'll pan out. As we go forward, it'll sort of, you know, it'll all come back to normal. I think, we are now in a phase where inflation is gonna be moderate and not gonna be what we've seen in the last two years. Right. If I could just ask one last question. On the LUP side, without asking specific numbers, you know, how has the share of LUPs for us really moved in the last couple of years? How do you see that going forward? LUPs, people are thinking that, you know, we, because the difference between our volume growth and our revenue growth is very high, LUPs are, you know, not moving. The fact is that the number of packs that we sell is still at a +12%. Right? While the volume growths are very small, the number of packs are still 12%. There's no major shift in LUP versus family packs. It's just that we've taken waste out of our, you know, LUPs. We've taken some grammage out of our LUPs and hence volume is not growing, but number of packs is still growing very well. Right. The share of LUP pre-pandemic to now, would you say for us it has been constant, falling, or has increased? I would think it would be reasonably constant. Got it. Okay. Fair enough. Thank you very much, and all the best. Thank you. Ladies and gentlemen, we request you to please limit your questions to two per participant. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi. Good evening, Varun and team. First on the gross margin for this quarter, you reported, I think probably the best ever, and you did mention about the pricing action. You know, so to speak, there is a bit of a mismatch between, let's say, end consumer pricing versus what the spot input prices are. Where do you think the gross margin should settle at in the coming quarters? It'll hover around the same, maybe, you know, 1% here or 1% there. Won't make a big difference. Okay. You're talking about the exit rate? No. I'm talking about the year rate. Okay. The year, not the exit, right? No. Varun, you are saying it will be, you know, closer to the full year average, you are saying? Yes. At the time when input prices are, you know, have gone down. In fact, the other question I had was, you know, if you look at, because let's say wheat flour has hardened, most of your, you know, key inputs would have gone down. As an RM index, if you look at where fourth quarter inflation would be, let's say quarter-on-quarter or year-on-year? Can you just repeat that? I'm saying, Varun, you have mentioned about, you know, different raw material heads, the way in which input prices are behaving. If you make an aggregate index, my impression is that, you know, it will still be down quite a bit, both quarter-on-quarter and year-on-year. Can you just quantify, if you take the weighted average, where the input index would be right now? See, we are looking at in our plan we've taken a 3% inflation. That might be applicable only to us because as I said, we've done some strategic buying last year, and we did get some good prices for our input commodities. Basis that, our internal plan is looking like, you know, single- digit kind of inflation. As we head into FY 2024? Yes. In that context, Varun, shouldn't there be at least 50-100 basis point margin expansion in FY 2024 at a gross level? Well, if we keep it at the exit levels, but the point is that we might have to make a few changes to pricing in certain brands, in certain packs. We don't want to become, you know, only margin hungry and not continue our march on revenue growth, volume growth and market share growth. It has to be a balanced play, and that's what we are trying to do. That's how we, you know, looked at getting the volume triangle every year. You know, which is getting all three together. That really is our objective. Got it. Thank you. I'll come back into queue. Very pleased to hear your comments on, you know, your preference for revenues over margins. Wish you all the best. Thanks. Thank you. The next question is from the line of Arnab Mitra from Goldman Sachs Asset Management. Please go ahead. Yeah. Hi, Varun. My question is on volume growth. As the pricing is now anniversarizing and also you are looking at some price reduction to grammage increases, do you see- Your voice is not clear. You can't hear me properly? Is it better now? Yes. My question was, as the pricing anniversarizes and you also take some grammage increases, do you expect the volume growth to start picking up now? Or there could be a lag between the anniversarization of the price and the volume growth starting to pick up for your business? I would certainly think so. See, I don't worry too much about volume. I'm more worried about the number of packs that we sell. I would want to see aggressive growth as far as number of packs that we sell. Yes, you are right. Even volume growth will definitely pick up in this year. Got it. My last question, Varun, was on I'm just an extension to what Vivek asked on the gross margins. Your EBIT, EBITDA margins are almost 20% versus your average of the year, which is 17.5%. Would you look at that as a benchmark as what you could deliver given the, you know, changing dynamics of your inputs, you know, costs as well as price reductions in terms of FY 2024? Yeah, I would think so. I would say average of the year would be more of where we would get to. Yeah. Yeah, we don't give any forward-looking statement, but I would say that's the benchmark. Okay. Okay. Thanks so much, Varun. That's it from my side. Thank you. The next question is from the line of Richard Liu from JM Financial. Please go ahead. Hi. Thank you. I just have a question regarding the difference in growth between standalone and consolidated. You know, it's 14% in standalone and 11% in consolidated. What's that due to? Related to this, what I also noticed is that the COGS figure in INR crore is exactly the same in standalone and consolidated. I mean, why would that be so, despite the difference in revenue? Thank you. There are a couple of things which are impacting it. Out of dairy, the non-cheese portion of dairy has already moved into Britannia numbers during the year starting in April 2022. That is one which is impacting the growth between standalone and consolidated. The second that is happening is that with the JV arrangement with dairy and whole thing transitioning into a distribution arrangement from April this year, the fourth quarter cheese sale has been accounted on a joint venture accounting basis. Therefore, the revenue doesn't appear there, whereas the share of profits of Britannia appears. These two are impacting by almost 1.7%. The effective growth rate should be almost about 12.something, 12.9 or something. About that range. The COGS is being similar for both consolidated and standalone? Same thing. Same thing. Got it. Thank you. Thank you. We have the next question from the line of Latika Chopra from JP Morgan. Please go ahead. Yeah, hi. My question was, you know, around now that we are fully on FY 2023, if you could share the revenues for the non-biscuit portfolio, and if you, if possible, give some color on the main categories within the segment. The largest categories are cake, rusk, and now dairy and bread. They are all approximately the same size, about INR 600-700 crores each, right? These four categories are about INR 700 crores each. We have international, which is another INR 700-800 crores. These five categories. We've got emerging categories like, you know, croissant, which is now INR 100 crores. You know, there are other small ones. Yeah. Adjacency. Adjacency also. Therefore in all it would be another INR 100 crores. Yeah. The second and last question was, you know, again, coming back to revenue growth, you know, you pointed out that pricing is gonna moderate. I believe, maybe a lot of the pricing might be returned to consumer in form of grammage increases. At a broader category growth level for biscuits, you know, Are you looking at, you know, high single digits kind of a revenue growth for this year as pricing moderates? Also wanted to understand the scope of further distribution expansion. You have done a really good job on in the recent years. You know, on direct reach and on rural penetration perspective, is there more headroom to add more outlets with relevant throughput there? I will let Vipin answer the distribution question. Latika, I think, you know, it's a distribution has been our strength and even we have been adding outlets. Just to give you a perspective, the category has about 92 lakh outlets. Each village about INR 60-70 lakh crore, therefore you can guess that, you know, the headspace is that much. The distribution initiative is, you know, obviously superior as well rural because our entire portfolio, you know, is pretty relevant to rural as well as urban and metro. I think the distribution that we're talking about is pan-India and pan-geography. What we will do is that even in this year, we will keep, you know, improving our distribution in rural as well as urban areas. Your first question. it's very interesting actually what Vipin has bring to the table. The gap between us and the category is 67 versus 92 INR lakhs, right? Still a good number. The only good thing is that our weighted today is over 90%. it's we are reaching 91% weighted distribution. For the first time we are a joint number one as far as weighted distribution is concerned. yes, we would want to expand our distribution because we as we've gone direct and as we've gone to more and more outlets, our share in those outlets has gone up. We will continue to do that should there is headroom. Volume, yes. See, the fact is that the volume growth has been stagnant, not because people are not interacting with our brands and our products. They are. The number of packs are still, number of packs that we sell are still, much higher than what they were last year. Yes, this year because it's not just about, you know, the grammage that we are increasing in the packs. That's gonna be very small. This year what we did last year, volume growths are gonna be certainly, much better than what we saw this year. All right. Thank you, Varun, and all the best. Thank you. Thank you. Ladies and gentlemen, we request you to please restrict your questions to two per participant. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Yeah, thanks for taking the question. My first question was, with respect to the market share gains this year. I believe that we are doing something differently, and I would attribute it to distribution. What has changed that is driving so much market share gains, especially when we are taking so much price hike? All right. You know, one is distribution. Second is the inherent strength of the brands. You know, one thing that we always put on a back burner is the strength of brands. We truly own, you know, a stable of very, very solid brands. The combination of solid brands, heavily supported, plus distribution, plus the efficiencies that we are bringing, the freshness of the product that we produce and, you know, sell to the outlets with all the factories that we put up, the efficiency that we bring to the table, the quality of the products, because these are, you know, new lines, technically, much better lines than what we were using in the past. I think all that adds up. It's not one factor. Yes, I would say distribution would be still the number one factor, followed by brand strength. In any way, is it changing the mix of our portfolio from being more premium to becoming more mass? No, not at all. We, our mass brands, have been, you know, doing as well, as the others, so there's no change in the portfolio. That would be 50%. If anything, it's becoming more premium. if I tell you it's 50/50. What? 50/50 what? Premium portfolio would be 50% on the biscuit side. I don't know how you define it, but the way we define it is the value products for us are very small, really. The Tiger brand is very small today compared to Parle-G or, you know, Twenty20 or some of these brands. We have a premium heavy portfolio compared to the others. Understood. My second and final question is to do with milk inflation. You know this, what we hear is that milk inflation will continue through the year. Does that, you know, lead to some recalibration of our dairy strategy? Well, no recalibration, but we took it on our chin. We took the inflation on our chin. We did suffer some profit, you know, downside as far as dairy was concerned. It's a tough category. I think we are managing quite well. We've been able to establish a very strong brand with Winkin' Cow. Today I would think that is out of, you know, some of the innovations that we've done, this definitely stands out. I don't know if you've tried the products. They're just fantastic products. They are premium products. We're selling it at INR 35 and INR 40. I think we've taken a little bit of a brunt on profitability, but not on the top line. We are hoping that we'll be able to establish solid brand portfolio in dairy as well. Hello. Ms. Rathi? Yes, thank you very much. Thanks, Varun. Thank you. Yeah. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Varun. Hi. Could you give us a sense of the competitive intensity, especially because of your comment last time that we're seeing some enhanced competition in some pockets, which did not need pricing action. I just wanted to understand why the change this time. Should we read anything in the market share gain in rural, you know, basically moderating to 1.54x versus that 1.5x in 3Q and the gap reducing between what we saw in the graph last quarter? Thank you. That not the variation 1.5 to 1.4 is not a big deal. No, I don't see a substantial change in the competitive intensity. Yes, there are some categories where there is heavier intensity. There are categories like cakes, where, you know, there are lots of small players, even category like Rusk, where there are lots of regional players. What we are doing is we are taking very stringent action in those categories to make sure that, one, we can produce the products at the right price. Second, we can compete even with the local players. Earlier, we used to not look at local players. Just to give you an idea, Rusk has some 2,500 producers of Rusk across the country, right? Some of them are becoming big in their own small, you know, territory that they operate. We've taken action. We are now looking at it regionally. North for us is a very small market share, territory for us. We are looking at how we deal with that and how we take our Rusk market share up in the north as well. Similarly, in case where there are lots of INR 5 packs coming up, we are looking at how do we compete with those local players. I would say not really. I would say, you know, because when there's a price increase, the number two, number three, number four players will always try and take a little bit of advantage of the price and try to push their product. Finally it all evens out, and I don't think there is a very high intensity as far as competitiveness is concerned. There are some new products that we are doing where we've built an inherent barrier to entry of, you know, smaller players. If you were to look at Croissant, I think, it's just two players there. It's us and Dali. And the reason for that is that it's a high CapEx model where a small player can't come in with an INR 5 crore investment. It requires a very large investment, and it's gonna be a very deliberate move that someone will make. Similarly, Receptive Pinky, again, very extensive line, but serious barrier to entry. Those are the kind of entry barriers that we are creating in certain categories, and we will continue to do that as we move forward. Got it, sir. Sir, just a second bit, you know, just pushing back on the margin bit. You know, you clearly are, you know, there is a brand strength. There are barriers that are being created by these manufacturing lines. You know, this quarter did not have any material one-off. We are already at that, you know, end of the steady-state guidance. Why is it that we are still arguing for margins to be relatively low, given the brands are actually, you know, driving them, the growth themselves? What is it that I'm missing which is moderating that, our margin expectations, sir? We have to remain competitive. We don't want to lose, we don't want to cede ground. You know, as an analyst, you always look at how do you get more margins. We are not looking at quarter to quarter. We are building a business for the next 100 years. We have to moderate all three of these to make sure that the momentum continues on all three. Okay, sir. Okay, sir. That's all from my side. Thank you very much, sir. Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, Varun. Congrats on a good set of numbers. My question is on your distribution. For any company, there will be at any given point of time an optimum level of direct distribution. Beyond that, the cost benefit sort of equation is not advantageous. In your view, at current point of time, where do you think that ceiling lies beyond which it really doesn't make sense for you? Of course, that's a moving target. I'm saying as of today, what is that number beyond which it doesn't make sense to go directly? No, sir. Firstly, the point is that we are already at about 90.7% weighted distribution, and we are a joint number one as far as weighted is concerned. The question can be that, you know, how far do you wanna go? If you've already got up to 90+%, then how far do you wanna go? The other side of the coin is that there is this huge territory, which is the Hindi Belt, where, you know, let's say the gap between us and the number two player in share, but the number one player in distribution, today we are still lower than them by about 5 lakh outlets, right? If you were to look at the same gap in the Hindi Belt, it will be huge, right? There will be, you know, probably 12, 13 lakhs more than us in the Hindi Belt, which is obviously a small subset of the total country. What we are doing, and that's why we've segregated the Hindi Belt, and we are saying that we want to drive our share and distribution. That is where our serve on distribution is gonna come, and that Hindi Belt is more rural than urban. I'm not saying that it's only gonna be rural stores. We have to build, urban as well in those, states. I would say that we can easily add another 5, 6 lakh outlets without batting an eyelid. Vipin, what do you say? Yeah. I think, firstly there is another dimension to this, which is our direct distribution, right? I spoke about INR 67 lakh, which is our direct plus indirect. I think here the game is obviously going up on a direct distribution, because that gives you direct access to the retailer, and that gives you access to sell more and more brands, right, which increases your market share, which increases your brand penetration. Therefore, we are, you know, doing it in a very planned manner in terms of which are the most relevant set of markets, unlike Varun said, we have a Hindi belt, a metros, urban. In lot of small markets we drive our distribution through our indirect route. Therefore, there is a good balance of direct distribution, which takes care of weightage and the indirect distribution which helps us reach the end of that. Right. My next question is on the diversification of your portfolio. My next question is on the diversification of your portfolio. Can you give me some kind of flavor on what kind of diversification has happened, let's say, over the last five years, in the sense that if you can just give me a ballpark CAGR of five years for the biscuit portfolio and for the non-biscuit portfolio separately? If possible, do you have some targets in mind in terms of five years down the line, what% of your share will come from non-biscuits versus what it is today? See, I think so if you consider this year, we have grown 1.5x in the non-biscuit portfolio. You know, if you are thinking of terms of next five years, I think the growth rate will only have a higher clip. As Varun spoke about [Kraza] or Wafers or the entire setup that we have done with DL, you know, the entire drinks portfolio. We have a large distribution network, and what we are doing is we are leveraging that entire distribution to push more and more, you know, brands which are over and above the entire biscuit portfolio. Last question on Time Pass snacks brand. Are you taking a pause there? Is there no sort of plan to ramp that up in the near term? We have done some launches and relaunches within the test market territory. We are testing them out. I don't know if you've tried them. Some really good products, but still only in the test market territory. We want to be careful. We want to make sure that we when we spread it across the country, we have a winning combination. We are going to be patient, Varun, I think. We are not gonna do it in a hurry. Okay. That's all from me. Thanks and all the best. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Stock Broking. Please go ahead. Hi. Good evening, Varun and team. Thanks for the opportunity and congratulations. One question, to start with, the volume growth. If we look at the full year growth at 15%, is it fair to assume that the volume growth would be in the range of about 2%-3% for full year FY 2023? About that margin. It's very small. Small single digit. Similar number for quarter 4 also? Yes. Yes. The second question, you always been guiding us that, the new product contribution number. Do you have in mind what number we ended in FY 2023 and what we should be expecting in FY 2024? With FY 2023, we've done quite well because the way we, the way we qualify new products is, new products which have been launched in the last, 24 months. The last 24 months products are approximately 3.5% of our total, revenue. We are trying to scale that up, as we go forward, to about 4% in 2024. Okay. Last question on the manufacturing units. Two greenfield and one brownfield in Odisha. What are the products we are manufacturing? Because what you have been guiding us that you are closer to the market and it is your largest glucose market. What kind of throughput we are expecting? I'm supposing that all these three are under PLI. No. PLI is separate. We've also got GFC. We have got a lot of GFC benefits as well. See, it's not that we are doing these factories because we are getting some benefits out of it. These factories are required. If you think about it, we do 1.3 million tons of product every year, right? Even if we are growing 5%, that would mean 65,000 tons of extra product that we need to do every year, even at a 5% rate, right? Now that 65,000 means how many lines we would need. We need four lines for that. One option would be to, you know, build mega plants and keep adding lines. That's, that's very tough with our kind of product because it takes a lot of space, takes a lot of labor. If you are getting benefits from these states, then it's better to, you know, like in the north, we don't have any factory. The UP factory is gonna be. We've only got a branch there, which is, which was done many, many years ago. Now UP is becoming a very large part of our business, so it's important to have a factory there so that we can have the best products, the fresh products. These factories are not producing anything different from what we do in other factories. They are the same products which are being produced there. We are looking at rusk coming in-house to an extent. We have. We looked at already cake coming in-house. We are looking at putting up some high-tech innovation lines in some of the factories, you know, Wafers and all of that. Even in crackers, some high-tech cracker lines as well. Basically, if you look at bulk of the investment, it's gonna be in the base line of the base brands. That's wonderful. Just one extension on to Venkat. How much CapEx we would require for this to complete these projects in FY 2024? In FY 2024, we estimate it to be in the region of about INR 500-600 crores. These are largely going to be the, dairy investments, the balance of dairy investments. It's also going to be some investments in Ranjangaon on the facility that's coming up in Bihar. Thereafter, it will moderate. We've had, two years with, high intensity as far as CapEx is concerned, thereafter it will moderate because, we will have capacity. We will have put up a dairy facility, which obviously was CapEx heavy. Thereafter it will become business as usual. Thank you, Varun. I hope you have left a lot of benchmarks for Rajneet to work tightly next year. All the best. Thank you. Thank you. Ladies and gentlemen, we will take the last question for today from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thank you for the opportunity. You mentioned that there's a strategy to make in-house. Can you tell us more about this? What is the current mix of in-house? How will this change with new factories and whether the productivity will reflect in margins? It's not changing dramatically. It'll probably go from In-house will go from 57% to around 65%. Certain products, obviously it will be a much larger change. For example, rusk, we have in-house only one line for domestic. We have one line in Mumbai for our international business. For domestic, there was only one line in our Mumbai factory, and now we are putting up three more lines. That will move up dramatically, biscuits, they overall will only move up from 57% to 60%. Okay. Okay. Second is, what's the rationale for launching coconut water, and, would you look for a larger play in the beverage category? Will you invest aggressively in the Come Alive brand, and will you take it to GT? It's in GT. Yes, we are looking at it. Obviously beverages, you know, is an important play for us, and that's why we've invested in the respective TTM. Coconut water is a third-party manufacturing, but it's a very, very good product. I don't know if you've tried it. Yes, Come Alive will be a very important brand for us as we move forward. It will encompass different healthy products. Generally very, very healthy products. As we speak, we are looking at how do we build the concept for a brand which is going to be so critical for us. Understood. Lastly on dairy, from INR 700 crore this year, where do you look to go in FY 2024 and maybe in next three to five years? We don't give, forward, looking statements, but we are looking at aggressive growth in that category. Okay. Thanks very much. That's it from my side. Thank you very much. Thank you. I would now like to hand the conference over to Mr. Mayank Mundra for closing comments. Over to you, sir. Thanks everyone for spending time with us on this call today. We look forward to interacting with you again. Thank you, guys. Thank you. On behalf of Britannia Industries Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.