Ladies and gentlemen, good day and welcome to the Q1 FY 2022 Result Conference Call of Dabur India Limited. 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 Ms. Gagan Ahluwalia. Thank you, and over to you, Ma'am. Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this conference call pertaining to the results for the quarter ended 30th June 2022. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer, Dabur India Limited; Mr. Ankush Jain, CFO; Mr. Sharma, Executive Director, Sales; Ashok Jain, EVP, Finance and Group Company Secretary. We will start with an overview of the company's performance by Mr. Mohit Malhotra, followed by a Q&A session. Hand over to Mr. Mohit Malhotra. Thank you, Gagan. Good afternoon, ladies and gentlemen. I hope you and your families are staying safe and healthy in these challenging times. Quarter One Financial Year 2022 saw a devastating second wave of COVID-19, which had a huge impact on our lives and health of our near and dear ones. The operating environment has been extremely challenging, since the lockdowns were more localized and staggered, the business impact was lower this time around. Once again, our entire team stepped up beyond their call of duty and delivered a very strong performance. I want to personally thank each and every member of the Dabur family for their unstinting dedication, commitment during these difficult times. This performance is also an outcome of the cultural change in the organization, which led to greater agility and flexibility to adapt to these new changing times. During the quarter, Dabur achieved a consolidated revenue from operations of INR 2,612 crore, growing by 32% over the previous year. India FMCG business reported a growth of 35.4%, backed by a robust volume growth of 34.4%. Consolidated operating profits saw a growth of 32.5%, and the operating margin saw an expansion of 10 basis points despite high inflation witnessed during the quarter. Profit before tax recorded a growth of 34%. In spite of a step jump of around 500 basis points in our tax rate in India, profit after tax increased by 28% to touch INR 437 crores. Coming to the category-wise performance, healthcare portfolio continues to perform well with a growth of 30%. This marks the 5th quarter in a row for healthcare portfolio registering a growth of 20%+. Dabur Chyawanprash reported a strong performance and gained market share of 170 basis points. Dabur Honey posted a double-digit growth and gained 330 basis points in market share. We continue to be the undisputed market leader in honey market with a strong presence in all channels, including e-commerce, modern trade, and general trade. The digestive portfolio registered a good recovery with 16% growth on back of improvement in mobility and out-of-home consumption. Despite a strong base with 34% growth, OTC business posted a growth of 52% on back of the robust performance of Honitus, Lal Tail, and Shilajit. The OTC NPDs like health juices and other Ayurvedic products continue to see an uptrend. The ethical business reported a strong growth of 51% on back of robust demand for immunity-boosting products. Within home and personal care division, due to the selective lockdowns and better preparedness by the team, discretionary portfolio registered a strong performance. Our hair oils portfolio grew by 38%, with all the brands posting a strong double-digit growth. Our market shares in hair oils improved by 160 basis points. The strategy of supporting our core brands with flanker brands is working well, and we will continue to launch variants to cater to varied consumer needs in the hair oil segment. The shampoo portfolio recorded a growth of 41%. The bottle saliency continued to increase, indicating increased traction for the brand in the urban markets. The newly launched Vatika Ayurvedic Shampoo received a good response from consumers and is performing quite well. Oral care portfolio continued to post industry-leading growth of 21%. All the brands recorded a strong double-digit growth. Our market share witnessed 1,000 basis points gain vis-à-vis last year. Recently launched products like Dabur Herbal range of toothpaste continue to do well, with sales 2x versus same period last year. Dabur Lal Dant Manjan also witnessed a growth of 20% during the quarter. Home care made a smart recovery with growth of 31%. Skincare portfolio, ex of sanitizers, witnessed a robust growth of 66%, driven by strong growth across brands. Fem performed exceptionally well, with sales almost tripling this quarter. There was a revival in Oxy and Gulabari portfolio as well. Food and beverage business was a star performer in this quarter, with growth of 80%. This was backed by strong performance of Réal fruit juices, especially the 1 L pack, which is used for in-home consumption. The new formats of Réal and coconut water added to the momentum of the Réal juices. The portfolio was further enhanced with launch of carbonated variants under the Réal brand, expanding the addressable total market of our beverage portfolio. We further strengthened the food segment with introduction of new products like Dabur Cold Pressed Sesame Oil, Dabur Ghee, Dabur Rose Syrup. Our foods portfolio under Hommade brand is expected to cross INR 100 crore milestone during the financial year 2022, driven by robust demand on account of increased in-home cooking. Among the channels, e-commerce continued to be the outperformer with growth of 100%. This channel now contributes to around 8% of our total sales. Our connect with the digital consumers is seeing a strong uptrend, with impactful digital and social media content advertising. We intend to continue to convert consumer insights into innovative and relevant products for our Internet-savvy consumers. Besides the urban consumers, we are continuing to focus on rural consumers as well. In order to enhance the availability and access of our products, we have increased our village coverage by almost 15% in this quarter. The international business recorded a strong growth of 34% in constant currency during the quarter. In terms of regions, Middle East North African region posted a strong growth of 50%. Egypt grew by 44%, Sub-Sahara Africa grew by 36%, and Namaste business saw a growth of 40%. SAARC business performed well with a growth of 42%, albeit some moderation in Bangladesh business due to countrywide lockdowns on account of COVID. Quarter one financial year 2022 performance is a testament to the resilience of the organization. With continued focus on productivity and efficiency enhancement, we were able to counter very high inflation and protect our margins. Going forward, we will continue to drive Project Samriddhi to achieve cost reduction and operational excellence. Our operations team has done an excellent job of meeting the challenges and ensuring smooth supply of product in spite of mobility restrictions. We are investing strongly in all areas of operations that include digitization, automation, productivity, and capacity augmentation. Work on our new manufacturing unit at Indore has commenced, and we will be investing around INR 550 crore on this plant over the next two-three years. We have further strengthened the organization through lateral hires at senior positions in marketing, operations, IT and R&D. Overall, the company is continuing to focus on building the power brands, building scale, expanding distribution across rural and urban geographies, driving innovation, and strengthening the organizational capability at all levels. We believe this will help us drive strong growth across our verticals and capture the opportunities available to us while we build the organization for the future. With that, I bring my address to a close and open the Q&A and invite your questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the 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. The first question is from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah, thanks and congrats. My first question is on hair oil. 160 basis points gain in market share, is it from regional or the national player? Which subsegment you have gained market share? If you could give some clarity. two new launches in coconut hair oil. one, why in coconut hair oil? Second, both seem very similar. one is called Dabur Gold Coconut, another is called Dabur Anmol Gold Coconut. Is this two different SKUs, or is this different positioning? Hi, Abneesh. Thank you for your comments. I think there's a little noise in the call, so I couldn't fully decipher as to what you were speaking. I think the question is on hair oil and the subsegments of hair oil. I'll answer that. Am I correct? Yes. I had also questions on the coconut hair oil. The two brands seem very similar. I think to answer your last question first, there are two initiatives here, Abneesh. One is that we are rolling out a Dabur coconut oil in south of India, and there's another launch that we are rolling out, which is in the east of India. One is in the brand name of Anmol, and the second is in brand name of Dabur Gold. That's one. As far as increase in the market share of hair oil is concerned, the hair oil category, as per Nielsen, is growing at the rate of around 22%, and Dabur hair oil is growing at the rate of around 40%. In all the subsegments of hair oils, we have registered an increase in market share. First of all, I'll talk about the perfumed hair oil segment. In the perfumed hair oil or the value-added segment, so you call it, we have gained market shares here also, and the business is Amla Portfolio has grown by roughly around 26%-27%, as compared to the category of around 22% growth rate. Coming to coconut oils, we have a brand called Anmol there. That has registered a growth of 36%, and the market share increase there is 200 basis points. We were a 4.5% market share in coconut oil category, and now we've become 6% market share in the coconut oil category. All the sub-segments of hair oils, we are chugging ahead of the market growth rates. My question was also, the growth is coming largely from the regional players and in coconut, higher aggression, is it something new you are planning? Your market share is still quite small, 6%. It's in context of that or is there a marked increase in aggression in coconut? You want to become much larger, even there is one large national player. Our market share gains are coming from all sub-segments of the hair oil. Perfumed hair oils also, whether it's a mustard hair oil or it is a flanker brand of Badam Amla or it's a Dabur Amla. In all the three brands, we've gained very healthy market share points and it is on back of our aggression, our innovation, launching of new brands, packaging upgradation and marketing and consumer promotion and price aggression. As far as coconut oil is concerned, it is aggression in the marketplace because it's a single player and we feel there's a huge opportunity for us to gain share in coconut oil also. Sure. That's useful. My second question is on honey. In honey you have gained 330 basis points in market share. Now the premium edible oil brand has also done exceedingly well. They have also gained double-digit in modern trade and 25% in the e-commerce. I want to understand how can both things happen. 330 basis points gain in market share and the premium edible oil also doing well. Does it mean that tail has lost market share? A related question is Honey Tasties. You have tried the spread earlier also in the honey in the premium format around two years back. What is different this time in terms of going from health platform to indulgence? What will work this time, what had not worked say two years back? As far as honey is concerned, Abneesh, across all platforms, be it e-commerce or be it modern trade or it is general trade, we've gained shares. I don't know what the competitor is talking about of taking 25% market share because there is no syndicated market data available from these platforms. From what we have done is, I can comment upon us, we've grown by around 54% on e-commerce on the back of around 40% growth of last year. So we have by a mile gained share as far as e-commerce is also concerned. Number one. As far as modern trade is concerned, we've grown by around 30% in modern trade as far as honey is concerned, and in GT market also in honey we have gained shares. Our distribution expansion has also happened and penetration increases have also happened, and the consumer data also says that we have been gaining share in the consumer franchise. I can't say as to what competition is saying. What my hypothesis could be that maybe competition is taking share from smaller fringe players but not at least from Dabur. We don't see that problem in the marketplace. As far as Honey Tasties is concerned, it's our endeavor to take honey from therapeutic platform to a more food table. Therefore, honey tasty introduction is an endeavor in that pursuit. Last time around was at least four, five years, I think back you're talking about when Honey Tasties was launched sometime back. I think it must be six, seven years. It was on a very high price point, Abneesh, and also I think it was a very different time. Okay. It was a test market, so it is not. I'm sorry to interrupt. May I request Ms. Ahluwalia to come closer to the mic please? We cannot hear you clearly. Hello, can you hear me now? Yes. This is better, madam. Yeah. The earlier launch was a test launch many years ago and it was on a very different, very premium price point. This is a different product altogether and it's on a very much more affordable price point. Sure. That's useful. My last quick question on fruit Réal juice business, good growth coming back on a very favorable base. My question is, when I compare the distribution of fruit Réal juice business versus say a Coke or a Pepsi, Varun Beverages, et cetera, if you could talk about that. Versus your own universe, what would be the reach of Réal given so many innovations and lower packs have happened? Right. A couple of innovations, Abneesh, in the foods and the beverage business. First of all, the innovation is in a smaller price point, which is INR 10 and a INR 20 price point. Earlier, Réal was a urban distributed brand and the distribution restricted to around 100,000 as compared to our distribution available direct reach in around 1.2 million. We saw a lot of headroom available for us to grow, but the only constraint was the price point. With the price point constraint being breached and we available in INR 10 and INR 20 price point and also having a drinks portfolio, now we are able to leverage our distribution. There's a huge headroom available for us to grow within urban as also getting onto rural with the drinks portfolio coming in now. Now we are at all pickup price points, whether it's INR 10, INR 20, INR 60 or INR 100 price point. We are catering to a separate consumer cohort which is coming to e-commerce to purchase it, separate available in a Tetra Pak in modern trade and separate in rural. Therefore, we are trying to leverage the Dabur distribution. As compared to Varun and carbonated beverages, we are not comparing ourselves because it's going to be one decade and we'll keep expanding our distribution as we grow our volumes. That is what our strategy was in the beginning. We can't compete with the behemoths right day one when we are initiating a portfolio. We will grow the portfolio smaller, and we'll keep expanding our distribution as we go along. Sure. Thank you. That's very useful. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Sir, I just wanted to understand this demand a little better. A, has this sales trend been similar across the months, and has the recovery kind of started to move two-year sales future back to double-digit levels as we exited 1Q? Thank you. Yeah. I think demand situation is actually becoming sequentially better as the lockdowns and the restrictions and out-of-home consumption eases. As you know, as the markets gradually, slowly are opening up, the demand situation is becoming better. I shouldn't say the demand situation is becoming better, but I think the supply situation is becoming much better. The supply chain hiccups, which were there, are completely removed now. The shops are also open from morning till evening. Earlier, there were restricted times when the shops were also operating. On back of supply chain restrictions getting eased, I think the business is kind of becoming better. As far as demand is concerned, there are two parts of the demand, the urban demand and the rural demand. If I allude to the Nielsen data, what we find is there is a total FMCG growth happening of around 36%, and for the first time in past around five to six quarters, we see that urban growth is trending ahead of the rural growth. Now, urban growth is trending ahead is because it's coming on the back of a severe lockdown same time last year. That's why you see urban growth trending well. If you look at the CAGR figures, we still find a growth of 11% happening in rural, which is ahead of the urban. This quarter was an exception. If we look at next quarter onwards, I think rural, once again, with the V-shaped recovery of the cases which happened in rural, should be trending ahead of the urban going forward from next quarter onwards. We are extremely bullish about the rural growth, because rural growth is still around 25%, 26%, while the urban growth in our terms is almost like 45%-48% in terms of consumption. This is because of the back of a hammered base last year. Going forward, CAGR basis, I think rural should be chugging ahead of urban, going forward on back of a lot of government stimulus also. Avi, for the full year, we expect demand recovery to happen from the COVID second wave with the caveat of COVID third wave. If the COVID third wave doesn't hit, then we should do a double-digit growth rate for the full year, and I'm pretty hopeful of us doing a double-digit growth rate for the full year. With the caveat of COVID third wave hitting us, which may again impact the supply chains, which one can't comment. I think the key acid test to the demand will be year after next. After we complete the fiscal year 2022, and we lap over the normal year next year. That is, if the GDP growth goes back to around 6%-8% level and the demand is ahead of that's when we say that the demand situation is okay in India. This year, on a low base of last year, so we can say that this year we should be able to do well but for COVID second wave. I hope I answered your question, because there's a lot of noise level here. No. Sir, just if I may, just to clarify. In the healthcare portfolio in particular, you alluded towards immunity seeing a very strong boost. In that context, I was trying to understand whether as we see normalization playing out, has that immunity portfolio kind of seen a moderation? If it has that been compensated by the out-of-home kind of categories? What was the broad kind of basis or what I was trying to understand, sir. Healthcare business, Avi, is concerned, healthcare we saw a moderation. Moderation to an extent that Chyawanprash still grew by around 50% for us. Last year same time, there was a growth of around 200% in Chyawanprash. 200% getting moderated to 50% is what we see. As we go along in subsequent quarters, we have quarter two and quarter three, there are huge humps there. When we encounter the hump, the growth will be muted in low single digits for a couple of quarters, then it will probably come back. Overall, full year, if I see, healthcare portfolio should deliver a mid to high single-digit growth rate for us. Because for our healthcare, it is just not Honey and Chyawanprash. We've got ethical portfolio and a OTC portfolio and a lot of NPD is also coming in, new products, which are also in the range of around 5%-6% of the total turnover. I think overall, mid to high single digit growth in healthcare. As far as HPC portfolio, which is more discretionary, is concerned, it's more than compensating for the depression in healthcare. As you saw, it's grown by 26%, and we expect it to grow at mid-teens for the full year. The food portfolio coming on a hammered base should have a high double-digit growth rate. As a mix, I think we should more than adequately compensate for the depression in healthcare on account of the peaks that you'll encounter in second and third quarters. Okay. This is very clear. If I may, with the second question on the input cost, sir. Sir. Could you kind of give us a sense on initiatives? Because you had alluded to taking price increases, but clearly they have been just enough to mitigate cost pressures. Any sense on how should we look at it, the gross margin as we go forward? Thank you very much. That's all from my side. Yeah, the input prices, Avi, have been unprecedented. There's a 9%-10% of inflation, which we've never seen. The price inflation, the cost inflation actually has been huge, and this has been across our portfolio buckets. Whether it's agri-commodity based or it's fossil fuel based, or it is herbs and spices based or edible oil based. Across the entire portfolio, the cost increases have been huge, and we've been able to pass on these cost increases to consumers to an extent of 3% MRP increase that we've taken. That is not good enough for us to mitigate the impact of inflation. Apart from this, we embarked on Samriddhi Project. On account of Samriddhi, we've got a cost saving of around INR 20 crores across the value chain in the company, whether it's supply chain driven or fixed overheads or some variable overheads or some packaging re-engineering or some raw material re-engineering. We've done that. By virtue of which we've been able to save around 20%. The balance, we've rationalized some margins of trade. It has come on back of that. We've rationalized some consumer promotions. We've come on back. We feel that we will not let the operating margin get dented. As far as gross margin is concerned, we don't expect the inflation to abate in next quarter. Inflation will continue unabated because the crude will not soften. It's in the range of around 72, 73. LLP and the HDPE and PET packaging prices will remain at the same level. You will see some depression, compression in the second quarter on the gross margins. With the saving initiative, we will want to maintain, if not increase, slightly increase our operating margins going forward. For the full year, we should say that operating margin for us too should remain same, if not increase a little bit. There could be some compression on account of gross margin. We don't want to take any rash price increases because the demand situation is also not very great, and you're caught between a rock and a hard place. At one end, there's a demand which is not very resilient, and there is inflation hitting us. We don't want to price out ourselves as far as the consumer is concerned. Calibrated price increases. One round, one is taken, and second round, one will only consider if push comes to shove. Got it, sir. Very clear. Thank you very much. Thanks a lot. Thank you. The next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Hi, Mohit and Gagan. Most of my questions actually got answered, but I wanted to have a check on the foods business. There was a substantial change in the quarterly run rate for beverages. This is quite encouraging despite one was anticipating mobility could be relatively subdued. Just wanted to understand this better. If you could elaborate, what is the share of the new launches, these lower price packs that you talked about? What is the kind of contribution you are seeing from here? Was any kind of seasonal loading or anything to read here? Are these quarterly revenues run rates for beverages sustainable? That was my first question. The second bit was if you could also share, you talked about NPD share in the healthcare segment, but at an aggregate basis for the domestic business, how are we stacking up? Thank you. Latika, as far as foods business is concerned, I think we were preparing ourselves for almost one year for this situation, and I think everything has come to fruition in a quarter, I should be saying. All subsegments of our beverage portfolio have actually done well. Let's start with the 1 L Tetra Pak. I think 1 L Tetra Pak has also grown in very high double digits for us, and we've gained almost 20 basis points of market share as far as the juice segment and Tetra Pak being almost 60% market share there. We've gained business, and in-home consumption, as you know, is trending up. On back of in-home consumption, summer season coming in a little more protracted, I think Tetra Pak has done well. The second initiative that we had launched is the accessible price points of INR 10, wherein we launched the Réal Mini and INR 10, INR 20 price point. That has also done exceedingly well, and we've been able to leverage our rural distribution on back of that. The third initiative that we have taken is entry into PET bottle. PET bottle itself has done very well, and around INR 27 crore of business has come on back of our PET bottles. PET bottles has got extended into 250 and 600 ml packs also, which is essentially out-of-home consumption. As out-of-home consumption increases and the mobility restrictions reduce, we will only see this business going up. Now we are operating in a much larger accessible market here, addressable market here. Which is around INR 8,000 crore in drinks as compared to earlier we were operating at INR 1,800 crore. Therefore, larger market leveraging distribution on back of innovation. The fourth initiative that one had taken is we have now gone into carbonated beverage drinks, and we've launched three variants there in the carbonated PET bottle. The first one is Jeera Cola, which is carbonated. Second is Nimbu Pani, which is carbonated. Third is Apple Drink, which is carbonated. We've released that, and innovation is continuing. This is as far as our beverage portfolio is concerned. While you will see a lot of these initiatives in accessible price points in drinks market, this has been compensated by premiumization of portfolio that we have launched on e-commerce so that there is no margin dilution. If you look at the segment-wise reporting results, you will see our gross margins inching up in the foods business at a very fast pace on back of cost cutting, and a lot on premiumization portfolio. Another area that we are strengthening, which I'd alluded for past couple of years, is Hommade brand, which is extremely under-leveraged for us. We've got a great brand called Hommade and no better time than COVID when everybody was looking at in-home and ready-to-eat and ready-to-cook kind of products. We've extended Hommade from onion, garlic, and the pastes to now into chutneys and pickles, and last quarter we've rolled out red chili pickle. Our chutneys and pickles and masalas have received very good response from the marketplace. Early days yet, but we've received good response. This year, full year, we'll be looking at INR 100 crore. The next four to five years, we are looking at INR 500 crore franchise out of our Hommade portfolio. A lot of these brands are getting nurtured and being launched in the e-commerce, and we will keep extending them into modern trade as the situation improves and as they scale up the business. Therefore, there's a range of cold-pressed edible oils that we've rolled out. You saw mustard coming in, and now we've launched sesame oil also, and you'll see virgin cocoa and others also coming in now on e-commerce space. On back of all this growth, overall NPD percentage to the foods business, which annually is around INR 1,000 crores in the range of around 8%-10% for us. For the whole company, NPD ratio will be in the range of around 5%-6%, going forward for the full year. Latika. Thank you, Mohit. That's very clear. Thank you. Thank you. The next question is from the line of Percy Panthaki from IIFL Securities. Please go ahead. Hi, Mohit, Gagan. Congratulations on a very good set of numbers. My first question is on the foods portfolio, especially the juices and drinks. Could you give me some rough percentages, in terms of what percentage of your revenue comes from the 1 L pack as of today, and how much was that, let's say, two years ago? Right. Today the percentage from one liter will be 70%, and a couple of years back, it would be in the range of 90%, if I would say. Similar. Similar? 1 L. 200 ml was trending at the time, and now 200 ml, which is out-of-home consumption pack, is little under pressure. I think the PET bottles of others have come in, which are out-of-home, have compensated for that. Around similar. Yeah. Maybe a year ago it was 60%. If I say. Sorry, I'm not able to get the complete picture here. Yeah. I can't hear Gagan. I can hear you, but I can't hear Gagan. Yeah. It's 70% of the overall portfolio, and it used to be 70% or similar range. You have launched so many new SKUs, so isn't that really helping? That is definitely helping, and that's why the overall pie is growing, but so is the 1 L pack also growing. We are increasing our market shares there. As we are increasing the Réal franchise, the tailwinds and the benefits of the equity enhancement is coming on the 1 L, which is the mother brand. Okay. Got you. Secondly, I just wanted to understand, see, we have now diversified away from being only in juices to being in fruit drinks as well, which is a much larger category. If you can just give some idea as to what contribution of the turnover is now coming from fruit drinks instead of fruit juices. I think around 10% contribution will be coming from drinks. Still it is small as far as the drinks portfolio is concerned. Sorry, how much? 10%? Yeah, around 10%. That's an annualized run rate of over INR 100 crores. Yeah, it'll be slightly more than INR 100 crores. Like I told you, around INR 25 crores, INR 27 crores we've registered in the current quarter. There'll be a run rate of INR 100 crore annualized, Percy. Okay. Got you. Just wanted to get a sense of the other new launches that you had done specifically in areas like pickles, milkshakes, and surface cleaners. If you can just give some sort of idea as to, let's say all three of them put together, would be what sales contribution for you. I know you would not like to give out separately because they are too subscale. Apart from this, any qualitative commentary that you can give on each of these three. Right. I think first I'll talk a little qualitative here, as the numbers are not really large. In milkshakes, we've been able to register the 1% market share, total size being in the range of around INR 800 odd crores. We've got a 1% market share. Milkshake portfolio has received a very good response from the market, be it e-commerce or at modern trade. In the milkshake, we launched three variants, out of which our chocolate variant is doing exceedingly well. As far as pickles is concerned, early days yet, but pickle portfolio also been received very well in the market. That's why we've launched another variant of a red chili variant in pickles. The green chili variant and other variants in pickles and chutneys is doing well. As far as surface cleaner is concerned, that's a little damp squib. I think that was very contextual in the COVID times, and that's not doing very well. We had launched Dazzl surface cleaners. Those are not doing well. The entire sanitizer-linked portfolio under the Sanitize and the Dazzl brand, that is not doing well for us. That is what we are liquidating, including sanitizers. If you see, last year first quarter, we registered a sale of around INR 80 odd crores in sanitizer, but that business has gone down by 70%, because it's become completely commoditized, no money to be made, and therefore, we are getting out of sanitizers and doing liquidation there. That and the surface cleaner link portfolio is not doing well, so that we are weeding out. I understand that if it's COVID contextual, it will not work in the longer run. What are your thoughts on the larger categories in home care, like your floor cleaners or toilet cleaners or dishwashing liquids? Any thought there? Do you want to play seriously in these categories or no? Existing business, Percy, in Sanifresh. Sanifresh is a huge opportunity, and there is a single big boy presence here with the majority market share. We are scaling up our business as far as Sanifresh is concerned in toilet cleaners. As far as air fresheners also, we are scaling up our business, and we've got around a 60% market share in the air freshener business with the Odonil brand. That we are also scaling up. We have an Odomos brand. That also, we are expanding the net in terms of total addressable market. Odomos has also gone into, It was earlier only a personal application cream. Now we are getting into more insecticide business and also extending it into rackets and mosquito nets, which is what we rolled out in the last quarter, and that got a good response on e-com. Those areas, we are strengthening there. As far as surface cleaner is concerned, that's not got great market, and we've got enough and more portfolio for us to handle. That we are weeding out, basically. Okay. Got you. Also, just some general thoughts on your new launches. Would you focus new launches mainly in healthcare and foods, do you want to sort of take a backseat as far as new launches are concerned for, let's say, beauty and personal care? Because many years ago, you were not there at that time, but we had this launch of a brand called Uveda, which was probably ahead of its time. Nowadays, with sort of niche beauty care brands combined with the Ayurvedic platform, wouldn't you think something like this would work very well with Dabur's brand equity? You see, Percy, as far as new products is concerned, innovation is the cornerstone of our strategy, and we feel that no company can grow to the next level without innovation. Innovation will continue at a pace that you can't imagine, so in every brand. As you know, we've got a guardrail or architecture of eight power brands in the company. In eight power brands, there is Amla, there is a Réal. In healthcare, there is Dabur, and in foods, there is Réal. In HPC, there is Vatika and Amla. Under Vatika, under Amla, under Réal, under Dabur, Chyawanprash, or Honey brand, there will be a lot of innovation happening, and this innovation will fuel the scaling of these brands. This innovation will come on selective channels, which will be image drivers, profit drivers as far as e-commerce is concerned, and volume drivers as far as GT is concerned. We are very clear on what we need to do in terms of scaling up the business through NPDs and innovations here. Which includes foods under the Réal brand or Hommade brand, which includes skincare also, and HPC also, which will have Vatika and Amla as brands, and healthcare, in which there'll be Dabur Chyawanprash and Honey and anchored around the Dabur brand. No, if basically, let's say there's an opportunity in beauty and skincare which doesn't fit within a Vatika or a Dabur brand, then for now, you would not explore that. Is that what I'm reading? This is, yes, at the moment. That could be an inorganic opportunity for us, more so. Okay. Got you. That's all from me, Mohit. Thanks and all the best. Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead. Thanks for the opportunity and congrats on a good set of numbers. A couple of questions, Mohit. If I look at gross margins, they are a tad lower sequentially. Obviously, in your comments, you mentioned about inflation and input cost. Does the mix change of higher contribution of food and beverages this quarter also affect that? Yeah, Prakash. Absolutely right. The majority, I should say 85% impact is happening on account of inflation. Okay. Around 15% impact is coming on account of the mix change in favor of beverages. You should also understand that this is a beverage season for us, and therefore, and beverages were low in the previous year same quarter on account of COVID and out-of-home consumption not being so. Healthcare trended up, and therefore, the gross margin inched up. Sequentially, that's why they look a tad down, but majorly on account of inflation issues. That is how. Going forward, that should get sequentially mitigated. That said, the inflation impact is too much. I think in quarter two also, we will see this inflation impact. In quarter three, we expect the inflation to cool down a little bit, and also it'll come on a higher base once again, so therefore, inflation will be tamed from third quarter onwards. If it doesn't moderate, then it might warrant a second round of pricing. Right. Which also we are prepared to take. Sure. You articulated the shift from juice to a broader drink play very well. That was very helpful. From a next two, three-year perspective, if I look at the broader drinks portfolio contribution being around 10 odd percent. Over the next two, three years, is it fair to say that on the back of distribution leverage should continue to grow at a much faster pace and that should be 20%, 25% of sales over the next three- four years. Is that a fair assumption? Yeah, I don't know whether the drinks portfolio will increase in terms of percentage, because as we are planning drinks portfolio to become more mainstream, we also plan to have a premiumized portfolio to manage the margin pressure, which our dilution with the drinks may show. That's what we've done in our current quarter. If you see our overall gross margin of foods have only gone up. Our gross margins have been stuck despite our entry into drinks and drinks becoming from almost 0%- 10% of the portfolio. We've managed it very well, and we hope to manage it like that going forward in the future also. That's why we are fortifying our foods portfolio, which will be more margin accretive. Also a health portfolio of health juices will come in, which is what you saw, Amla juice, Aloe Vera juice, Ashwagandha juices. They all have come in at a much higher margin than the average margin of our juice business. That helps to offset the dilution, if any. Right. As we are scaling the drink portfolio, the 250 ml which we are launching, is it going to be a target for CSD and institutional side also as the unlock happens and as mobility increases, or currently we are focusing just on B2C and the consumer side of the business, especially in the rural markets? At the moment, on B2C side and more GT side of business, not so much CSD, because CSD is last of all, it dilutes the margin further, we have enough in the portfolio for CSD increase. As we speak, CSD has become 2% of the business. Used to be 3%, CSD is going down. The government allocations for CSD canteens have also gone down. We are nowhere even close to last to last year levels. CSD is really eroding the top line to that extent. It's one of the areas where we are suffering on CSD. Despite listing a lot of new products out there, still CSD business is quite low for us. It's really not a priority. Sure. Just last bookkeeping question. With the current tax rate increase, what kind of a tax rate we should look at over the next two to three years at a consolidated level? Ankush, will take the question. Yeah. Thank you, Mohit. Especially, I think, the overall tax rate should hover between 22%- 23% at a consolidated level, and in that range over next two to three years. Sure. That's helpful. Thank you. All the best. Thank you. The next question is from the line of Vivek Maheshwari from Jefferies India. Please go ahead. Vivek Maheshwari from Jefferies India. Your line is in the talk mode. Please go ahead. Hi, good evening, Mohit and team. Am I audible? Yes, you are. Okay. Mohit, couple things. First on foods, again, I'm repeating, just want to make sure that there is no channel inventory related issue, because when I look at INR 365 crores this quarter, this is something that you have never ever done in your history. I just want to make sure there is no primary, secondary delta over here. No, Vivek, we have actually corrected our inventory. Like I told you in the previous quarter, we had corrected our inventories, and even in the current quarter, we've only corrected our inventories. Primary is equivalent to secondary, so there is no pipeline filling as we speak in the foods business. Even in the other part of the business, we have corrected the pipelines by around two days further in the current quarter. Earlier we were at 17 days, so now we are sitting at a 15-day inventory, which is a all-time low inventory for us. That said, in the next quarter, when the season comes and there's a pre-season loading, we might increase the inventory because that will be the call for that day. When Diwali loading happens, we invariably do that, and that might happen. That's a dynamic environment. In the quarter one, no, there has been absolutely no loading whatsoever. Got it. If we adjust for seasonality, the current run rate, what you have done in this quarter, there is no reason to believe that this growth will not sustain, right? Adjusting for seasonality. Adjusting for seasonality, they will, because overall consumption goes up, Vivek, in the foods. I am only alluding to the foods business. I think your question is only pertaining to foods? That's right. Foods, primarily beverages. Foods is a seasonal business. In season, the consumption really spikes up, and when the consumption spikes up, the market leader consumption also goes up. In the subsequent quarters, I don't think 80% will be the growth rate that we'll have, but we'll have a high double-digit growth rate for sure in the foods on account of low base and the season which is coming in. If the third wave comes in, again, out of home consumption will get impacted. Those caveats still remain. 80% growth rate will not happen, but high double-digit growth rate, yes, that is eminently possible. Actually, Mohit, that's why, not looking at the growth numbers because food base has been low and there have been a lot of issues at different points of time. I'm just saying this INR 365 crore number that you have done in this quarter, if we adjust for seasonality going ahead, this is a run rate that you can maintain, as I said, adjusting for seasonality quarter to quarter. I can't comment on this number of 365. I think seasonality, the business grows by roughly around 40% in the season. I think I can only comment upon the growth in food business should be high double digit for the full year. Very high double digit for the full year. That's all I can say. I think, Vivek, you should look at it at an annualized number that foods are seen around, like. Okay. finally, on the foods, just to close the loop. For the past several quarters, you have had somewhat of a challenge in the food business. Do you think you are completely out of the woods now? You have cracked the code and from here on, you know precisely what you have to do to get this high double-digit growth going? I don't know whether out of woods because it is also we are market leaders, Vivek, as you know. We've got a 60% market share in the beverage business, this time around, the category has also grown by around 70%, and we've grown ahead of the category. If there is a headwind of COVID and out-of-home consumption, then again, we may enter the wood, but that nobody knows. As long as there is a category growth rate, we will be chugging it ahead the category level. Therefore, as for situation today is concerned, I think we can clearly say that we are out of woods, and this should only get better as out-of-home consumption improves. Got it. On the oral care side, you mentioned something on the market share. What is the market share expansion, and what is the exit market share in first quarter FY 2022? Increased our market shares by 100 basis points in oral care, Vivek, and our total market share is around 16.6. We are a little tad behind than HUL. I think full year ending, we should be the number two brand in the country. If all is well, and we keep our fingers crossed, by end of the year, we should be the number two brand in the country. Right. Thoughts as much, Mohit. Lastly, on the A&P spend. You did about 7% this quarter, and you have historically highlighted that this is a number which should creep up as we go ahead. How do you think about the rest of the year FY 2022 and your outlook from a next, let's say, two to three year perspective? I think, great highlight. Overall, what is visible to you, Vivek, is only the advertising and the publicity spends that we do on above the line. What is not visible to you is which is getting netted from the top line and also the other BTL expenses that we incur. Total ad pro that the company has invested is roughly around 50% in India business, and the growth is 50% in India business, which is pretty high. We have allocated the expenses looking at the competitive intensity and the channel mix. Because during the quarter one, the channels mix was more skewed towards e-commerce and modern trade, a lot of money has gone behind consumer promotions and less on advertising. Depending upon the situation and where we are selling, that is where the investment will go. Your point, we want to invest behind our brands. We want to grow our brands. We want to increase our market shares. We want to scale up our power brands. For all that, we require fodder and investments to be going behind building demand for our power brands. We are committed to be spending high resources behind our power brands, and therefore, we want to go to a level of around 9%. We have our operating profit guardrail also here. Depending upon the situation, we will increase. Overall, the next two to three years, we want to inch up our advertising spending and investments behind the brand to a level of around 9% odd. Got it, Mohit. Thank you very much. Wishing you all the best and great performance. Thank you. The next question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead. Hi, Mohit. Just one issue on the e-commerce. You mentioned that the e-commerce business grew 100%, the share of it in the overall turnover is about 8%. I'm not sure whether to think of it as a good thing or not so good thing, because over the period of time with e-commerce, the terms of trade and the brand equity slowly but subtly may shift away in favor of the e-commerce entity. They are the repository of the data of the customer, and then you lose the touch and data about the customer. In a way, the distributor then becomes the brand, and the brand slowly becomes like a commodity or a manufactured backend of the distribution arm. Any thoughts on that? A very good question. As far as e-commerce is concerned, we are also looking at e-commerce from a cradle of nurturing our brands today with much lesser resources required and doing a test pilot and doing a proof of concept test. It also works as a test marketing for us. There are not much entry barriers in e-commerce for us to launch brands, et cetera. That's another perspective of looking at things the way we do business. I think this is providing us an avenue to grow and nurture our brands there. Once we scale up, then we put it to GT. Before e-commerce became significant percentage of business, earlier, the cost of entry or launching a new brand used to be very high. Now it's a very easy way. That's one space. The second vector is that you can connect with the millennial and the Gen Z very well, and you connect with the brand. As far as the long-term question of eroding the brand equity and it becoming more of a commodity and bargaining power shifting in the hands of Amazons of the world or Big Baskets, and they have the customer data and the consumer data, I completely agree with you. To fend that risk off, we are also trying to build a D2C model, which is direct to consumer, through our own website, so that we are able to collect the first-party data. Based on the first-party data, we are able to do a programmatic buying and razor sharp address the consumer and address the millennial and the centennial consumer and do it independently. The way I see it's a channel available, and we need to get that first-party data with us. With a lot of the platforms, we are trying to do deals in terms of trade wherein we get the ownership of the data as to who's buying and what is the consumer behavior. That said, that little amount of risk will remain, and that is the risk. It's just not in India. That risk is more so in developed countries where e-commerce contribution today in India, it's around 8%. With other countries, this percentage goes up to around 20% or 30% in the U.S., and there also they don't share any data. That's the evolution of the market. We can't go against the grain as far as the evolution is concerned, India will very soon leapfrog to the levels of U.K. and U.S., where also the intellectual property of who's the consumer who's purchasing is vesting with Amazon or Walmart or others. That's the nature of the beast here as far as the market, and you better go with the flow. We can't fight with them. The only thing one can do is build your own platform. That is what we are doing, building a D2C business. Quickly scaling that business to modern trade and to e-commerce and to connect with the same consumer so that we know who's buying and who's not. No, I hear you. Actually, the second question was going to be on D2C part. You talked about in the developed world, where much higher percentage of the activity has already moved to e-commerce. That is a market where growth rates of the consumer businesses is very poor, very low, and there is a brand proliferation almost resulting in commoditization of brands, because too many choices actually erodes the brand equity. That has probably happened in most categories as far as Europe, America is concerned. My worry was that slowly but subtly, when the distribution channel acquires a greater power than the brand, then the brand has to do something to remain a full brand and where its salience remains. Therefore, far greater energy has to be devoted to creating such a powerful brand equity and appeal. Apart from, of course, DTC and other initiatives, in many cases, would be welcome and warranted. If one takes it as an inevitable fatalistic way, then without any doubt, over a period of time, the equity will shift away. No, Bharat, I think absolutely rightly alluded. I think equity is in the hand of the brand owner who owns the trademark and the proprietary rights on the brand. That's why investment outside the platform is so much more critical. We don't invest all the money with the platform. We are investing the money outside to build the equity and also then indirect channels to directly connect with the consumer, so that you are owning the brand franchise and you are the one who are building the equity and the proprietary right rests with you. If you take another example of modern trade. In modern trade, when modern trade flourished to a level of around 15% of the business, there also the worry was that modern trade will launch private labels, and private labels will commoditize the brand, and you will lose the brand equity. Private labels have been limited to only some selective areas of home care, which are commoditized. In personal care space and food space, where taste is so unique and so peculiar, I think, and in HPC space, this entire space and Ayurvedic space, where we're talking about medicines and APIs and proprietary, there the commoditization doesn't happen. If you look at the Dabur's portfolio, our portfolio of home care is hardly around 8%, 9% of the overall portfolio. We are in Ayurvedic business, we are in the business of HPC and in foods where taste preferences and brands matter so much, which is what we are building on our own. We are not overtly worried with the kind of mix that we have. I hope I've been able to answer your question. No worries. Thank you, and all the best. Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all participants, we would request you to please limit your questions to one at a time. Should you have a follow-up question, please rejoin the queue. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Thank you. Good evening, Mohit and Gagan and Ankush. Thanks for the opportunity. Congratulations for good set of numbers. Just one request. From the beginning, if you allow everyone to ask two questions, I think we will get the due share of the call. Since in the interest of time, I will try and put one question only. My observation is that most of the companies have said South has seen lot of disruption. You also alluded the modern trade has also seen a higher lockdown. My short point is that two years before when we had the physical meeting, you did mention that South is a focus area. Could you talk something about our progress in the Southern market? The observation, what I'm trying to point out, if the lockdown is going to open and we will come back to normalcy, I think can we expect a little higher or current run rate for the next three to four quarters? You're referring to the South business, Shirish, only? Yeah. I have two questions in that. One is about the South initiative. The other is that right now we are seeing about INR 2,600 odd crore run rate. Whatever initiatives we have taken, I'm expecting that we should be doing a run rate of about INR 2,800 crore, INR 3,000 crore average revenue. Is it possible or there are still hurdles? Don't look at it that way. We look at it more year-over-year, Shirish. Mohit can comment on that. To the point on South market, we have taken a number of initiatives, and Mohit can elaborate. Right. South, undoubtedly, Shirish, we see a huge potential coming out of South, and we are trying to build the organization in the South ahead of the organization in other regions. We are not even doing around 25%. If I compare to other companies, they will be doing a 35% turnover coming from South with per capita consumption seeing much higher in the south of India. In the RISE project, we have created a separate organization in South, and we are trying to build the brand and increasing our share of voice in South much ahead than other regions. That said, South growth also is growing at a much faster pace as compared to our other regions, so to say. Therefore, there are initiatives being planned for the South, and South should grow ahead of the other regions, and we are gaining market shares across our categories in the South region. Okay. All right. Thank you, and all the best. Yeah. Thank you. The next question is from the line of Shalini Gupta from Ashika Stock Broking. Please go ahead. Yeah, good evening, sir. I had just one question. Sir, when I look at it, basically, this quarter again, there is market share increase in Chyawanprash and Honey. If I remember the first quarter, there was something like a 700 basis points increase in market share in Chyawanprash. It almost seems like a walkover. Whose market share are you taking, and what does the market look like? Right. There is so much of competitive intensity, Shalini, I'll not be able to talk about the exact numbers as to how much is the market and what the market share looks like. It's not a walkover. I think it's very difficult. I think the entire credit goes to the team and exemplary execution on ground, which has actually enabled these market share increases. Just to tell you, the market share increases comes on account of the number of players. There are a number of players in the market. In the West, Dhootapapeshwar, who is a very big player. There is Baidyanath, who's the number two player. It comes on account of those two players, and a very big unorganized market of Chyawanprash, which is also there. We guys are almost a 60% market share player with a penetration of roughly around single digits here. We are continuously embarking on a path to increase the penetration levels in the country. That's as far as Chyawanprash is concerned. Because we are market leaders, that's why you see we're coming out with modern formats and changing formats of Chyawanprash for it to become mainstream. You saw Chyawanprash has already been launched in a tablet form. You need to take a tablet once in a day, and it's equivalent to a teaspoon of taking Chyawanprash to connect with the millennials who may be aware but non-users of this category because of the taste and the format that it is available in. You'll see multiple newer formats of Chyawanprash being introduced as we go along. It's a pretty arduous task to grow the category as a leader and not just a walkover. Okay. No, sorry. I didn't mean it like that. Sir, also I wanted to ask you've been gaining market share in oral care and hair care. These are very competitive markets. Again, the question is, who are you gaining market share at? I mean, whose market share are you gaining? Right. If you look at the hair oils market, there are a couple of players. We are a 15%, 16% market share player. The lead player, Marico, which is there. There are other players like Bajaj, which is there. There are many other regional players also, which are there. If we take share of around 160 basis points, we are taking shares from the mix of the market. We also take data, which is the Kantar data, which tells us the panel data from whom we gain share and whom we are losing to. What is the gain and what is the loss? We exactly know whom we are taking share from and whom we are losing share to. In oral care market, we are around 16%, 17% market share, other players being Patanjali, Colgate, Unilever, et cetera. If we take share, we take share from leaders or other market lead players. That's whom we are taking share from. Okay. Basically, the smaller regional players is who you're taking the market share from. Share from regional players. We're taking market share from lead multinationals also. Okay. Okay, sir. I think your outlook on prices, you've said, and the price increases also you've said. Yeah, I'm done, sir. Thank you. Thank you. The next question is from the line of Vishal Gupta from Phillip Capital. Please go ahead. Yeah. Hi, sir. Congrats on a good set of numbers. Just wanted to know more about oral care. In the annual report, you have stated that you have become number one in Tamil Nadu market. Tamil Nadu state is a very big market. First, can you elaborate what actions you have taken that has led to this and in other markets like Assam and West Bengal and Punjab, where you are number two? What is the gap between the leader and you, and can you become number one in those states also in the medium-term? Yeah. Specifically Tamil Nadu, I'll not be able to illuminate the exact details of Tamil Nadu market. I think the category guys would know. Overall, oral care, our strategy is very clear. We want to eventually take the leadership in the herbal, natural, and the Ayurvedic segments, which is 30%, actually 32% today, which used to be around 28%, 29% around two years back. We see there's a tailwind of herbal, natural, and Ayurvedic sub-segment growing in the country, Vishal, and growing at a very fast pace. A matter of time, this 30% will become 50%, and we are the beneficiaries of this tailwind, and we are already 50%+ market share in the herbal market. If I look at two years CAGR in the oral care market, the overall oral care market is declining by around 0.6% on a CAGR basis, in which the non-herbal market is declining at the rate of around 2.5%, and the herbal sub-segment is growing at around 2%+. There is a 2x% or 2.5x% growth of the herbal market. In that herbal market, we are growing at 1.5x. We are by far leading the pack as far as the growth in the herbal market is concerned, and we want to continue with that lead in the sense that we are launching innovations one after the other. For example, in Dabur Red, we launched Dabur Red mouthwash very recently. Kavala Gandusha therapy is what we launched. We are the first ones. Now we already in South India, we rolled out in Tamil Nadu, your example, our Dabur Herbal toothpaste, clove toothpaste, neem toothpaste is doing exceedingly well in Tamil Nadu. On back of that, we've actually become the number 1 brand, and Dabur Red is doing exceedingly well. Going forward, we'll be launching multiple other variants on e-commerce, which is going to be our incubation ground, and that's how we are gaining share in oral care. In gel market, we are a little lagging behind, but I think we should be strengthening our presence in the gel market also going forward. We are represented in all the three price points in the oral care. We are in the belly of the market with a brand called Babool. We are in the top end of the market with a brand called Meswak. In the middle bracket, which is a premium popular, we are with Dabur Red. In popular market, we went in with Dant Rakshak. All the sweet price points we are trying to occupy, and that's the flanker strategy that we have in oral care. On back of that, we are gaining ground. Okay. The second question is on Odomos brand. Given that HI category is seeing lot of tailwind as of now, because people being extra cautious with regards to their health and hygiene standards, although extended to mosquito nets and rackets. Any plan of taking to mainstream segments like liquid vaporizer or coils? Any sense on that? Not into coils, because coils is very margin dilutive. We had tried coils a couple of years back, and there is no money to be made because you fight with all the unbranded players. Coils is also very invasive on health, and we are pursuing a vision of health and wellness, and coils doesn't go very well with that. For liquid vaporizers, definitely, we are considering it very seriously. Other HI formats also, we are looking at very seriously. Thank you. Thank you so much, and all the best. Thank you very much, Vishal. Thank you. The next question is from the line of Krishnan from Motilal Oswal. Please go ahead. Yeah, thanks, Mohit. Congrats on a great set of numbers to you and the team. My question is on the international business. A couple of your peers have called out that Middle East and markets like Bangladesh have started slowing down because of the second wave of COVID. Outlook here, at the end of the last year, you were confident about double-digit growth in the international business. Is that still likely to come through? Krishnan, as far as IBD is concerned, if you look at the current quarter, all our markets have done very well. There's a great recovery on the back of a depressed base, though. Egypt market has grown by 44%. Our SAARC market has also grown by around 41%. Nepal has actually grown by 75%, and Americas has grown by around 40%. Turkey business, if constant currency basis, around 11%, 12% growth. Sub-Saharan Africa is growing by around 35%+. I think all the markets are doing very well in terms of international business. We think full year basis, we are targeting a double-digit growth rate, but for the caveat of the COVID cases, there could be a little setback, but one can't predict anything. The situation is pretty much in flux. I think we should be able to do a double-digit growth, and that's what we've targeted ourselves to do. Okay. Just to clarify, as I said, a couple of your peers have said that June and July, there has been some effect in a few of the international markets because of the second wave. You've not seen anything significant in your markets? In Bangladesh market, we've seen the cases spike up and as we speak, there are 6,000 cases happening per day in Bangladesh and the entire country is in a complete lockdown. Saudi Arabia, as a market also, cases have spiked up, and they've banned all the flights coming in from India till the end of August. There are cases coming up. Situation is pretty dynamic and one can't comment with conviction as to how the situation will evolve. As far as U.S. is concerned, despite the signs of third wave, our U.S. business continues to be on a resilient growth path. Thanks, Mohit. Just one quick question. On cost savings, you talked about over INR 20 crores of cost savings in Q1 as a part of Samriddhi. Targets for the full year? INR 100 crore is what we are targeting for full year. Sorry, how much? Last year, around INR 50 crore is what we saved, but we started Samriddhi somewhere in the first quarter. The full year, we got six months last year. This full year, we should get INR 100 crore benefit from Samriddhi. Yes. Thanks a lot. Thank you. Thank you. The next question is from the line of Aditya Soman from Goldman Sachs. Please go ahead. Hi. Good evening, Mohit and Gagan. Just one question from my end on pricing. Do you expect to see sort of continuous price increases over the next couple of quarters to mitigate the sort of input cost increase you talked about earlier? Huge inflation. We've taken one round of price increase, around 3% odd, and Samriddhi benefits to set off the impact of inflation. The second round of price increase only we will take in the third quarter if we don't see cooling off of inflation coming in third quarter. The indications that we found, we think that edible oil inflation, which is coconut oil and mustard and rice bran, et cetera, should cool off on back of a good harvest season, maybe in the U.S., of soybean, et cetera. The indications are that that should cool off, and then we may not warrant to take another round of price increase. We will shy away from taking a price increase, which will have an impact on the demand and because our products are expensive. We will wait and watch for price increase. We'd rather have a contraction of gross margin for one more quarter and maintain operating margin by cost saving rather than taking a price increase. The price increase will be slow because the demand situation is also not very robust at this point in time. No, understand. That's very clear. Thanks for the answer. Thanks. Thank you. The next question is from the line of Abhijeet Kundu from Antique Stock Broking. Please go ahead. Yeah. Hi. Good evening. Congrats on a very strong set of numbers. My first question was on oral care. In oral care, specifically in case of Lal Dant Manjan, you have said that you have seen a very strong recovery there. What could be ballpark contribution of tooth powder or Lal Dant Manjan to overall oral care? Need to know that. What would be the growth in that category? Why I'm asking this is, your overall, at one point in time, it had a good amount of contribution to your oral care sales. Toothpaste had seen receding of growth and at one time was declining. What's the scenario there now? Toothpaste powder has gone down and from there, it has seen a recovery and helping growth. What could we expect there? Abhijeet Kundu, your voice wasn't very clear, but what I could understand is what you want to know is about tooth powder market, how the growth rate has been, and what's the contribution. I could follow the first part of your question. The second part I couldn't understand. Yeah, that's the question. Our tooth powder contribution is around 20% of the overall franchise business. Sorry, around 10%, 11% of the business, and it is growing at the rate of 20% in the first quarter. This is coming on back of a very resilient rural growth for us. As you know, the tooth powder category is more rural, so it's growing on back of our infrastructure growing in rural India. Lal Dant Manjan is performing exceedingly well. Also on back of resurgence of advertising on tooth powder. We have started advertising tooth powders on mainstream channels, and that has given us very good benefits, which earlier we had stopped advertising. It's a positive impact of tooth powder leveraging, or having a good rub-off on toothpaste, and toothpaste having a good rub-off on our tooth powder. We are looking at revamping our packaging in tooth powder and looking at a variant of tooth powder even for e-commerce, as tooth powder sales are also pretty good in the Western markets like the U.S. and U.K., and we are exporting fair bit of it in terms of private label. We're getting some learnings from there, and we'll be revamping our portfolio in India also. Okay. There is a good chance that this growth should, I mean, the double-digit growth should sustain over the next two years, three years, backed by distribution expansion in villages in India itself. Yes. That's what our attempt would be. Okay. In hair oils, specifically, so in coconut oil, what we have seen earlier is that procurement of copra is sort of a challenge in scaling up coconut oil. What are your thoughts on that? I mean, are you working on improving your copra procurement, or the coconut oil business for you is so small that you can easily get your requirement till the time you come to a certain scale? What's your view on that? Any challenges there in procurement of copra? You see, we are very small players. We are fringe players as far as copra purchase is concerned and oil is concerned. We are not facing any problems. I think it will be for the larger players who will have a problem in terms of copra purchase. As you know that we are 6%, 7% in coconut oil market, so we are not facing any issues in copra purchase except that coconut oil prices have gone up. Because coconut oil price level has gone up, so we are buying at a high price of copra, and which is impinging on the margins. That's the only setback that we are facing. As we speak, the outlook is that the prices of copra should also moderate, and then the margins should become better because you'll not roll back the prices here. That's our take on copra. My last question is on Home Care. In Odonil, though it's a small component of your overall business, but you have seen a market share gain there. One, the category has on a low base done well, that is understood, but there has been a market share improvement also. What has been the reason for that, both in Odonil as well as in Odomos, we have seen market share gains? What we are doing with Odonil is, in Odonil we are completely revamping our entire portfolio. We've introduced the air care portfolio in Odonil, which is doing exceedingly well, and we've gained market share in modern trade, wherein we've got the category captainship, and we have bypassed the lead players as far as air care is concerned in Odonil. Also on the PDCB blocks, we are doing well, as the PDCB prices have kind of softened. We are doing well in PDCB blocks also, and we've introduced multiple new fragrances, which are natural fragrances like neem and all, and which are doing well in the market space on back of packaging revamp, introducing of new fragrances, and aggression as far as modern trade is concerned. We are doing well in the Odonil portfolio. As far as Odomos is concerned, we are expanding the total addressable market by extending Odomos from cream format to overall HI format, which includes products like insect repellents, vaporizers, and also getting into mosquito nets, rackets, et cetera. We are expanding the whole franchise there. Okay. In beverages, sorry, sir, just one question. In beverages, the strong growth that has been seen, could a part of that be also because of distribution expansion? Hello? As we grow our portfolio in the beverages, INR 10, INR 20 price point, we are only expanding. We're doubling our distribution network. As you know, in metros, we have a separate channel which sells our beverages with eating and drinking outlets. We are expanding that. We are also now putting the portfolio onto our HPC distribution, which is almost 10 x larger as compared to our beverage distribution. As we scale up the business, and we will set up a separate distribution channel as far as small towns is concerned. Okay. That is my last question. Thank you. Thank you. Thank you. The next question is from the line of Rahul Maheshwari from Ambit Capital. Please go ahead. Am I audible? Yes, sir, you are audible. Yeah. Good evening once again. Remarkable quarter, Mohit and Dabur team. I just had one question that in terms of the branding, Mohit, can you help to explain that a particular brand like Dabur Amla, which is mainly into the hair oil brand, and you are leveraging the same brand into Dabur Amla health juices. Generally, a brand can have multiple extensions or product extensions or innovations, but one brand moving completely into different category. How the proposition works, a hair oil and the juice having the same brand? Yeah. It's like when you go to grocery shopping, your wife will get an Amla at home and you will crush that Amla, you will have it as a salad. She will take the Amla, she'll put it in a Kadhai and make a hair oil out of it, and she will take that Amla, she'll dry it, she'll make a powder of it, and in the morning, you'll have it in the glass and drink it. You know it's the largest source of vitamin C, so it's ingredient-driven equity. Most of the companies, we are driving our equity from the ingredient. Amla is an ingredient. It's the richest source of vitamin C. Vitamin C in a body can be used on hair, can be used on wounds, can be had in the body, like that. You can have amla juice and you can have amla hair oil. Everything promises better growth, whether it's in body or prevention of disease or hair fall, it's one and the same thing. That's from a layman perspective. From a branding and a marketer perspective, Dabur Amla is a brand in itself, and Amla juice is an ingredient equity. That's the way we look at it. In healthcare, Dabur Amla, Dabur provides that heritage, that trust to the consumer for the Amla ingredient that we are procuring, we are processing in the most quality environment. In Dabur Amla hair oil, it's more of a brand that we are trying to extend. Just to give you an example, Rahul, in Middle East, amla is called lice. It's lice. You know lice in the hair? It's called lice. Yet Dabur Amla is the largest selling hair oil in the world today because there, it's not treated as an ingredient or a name. It is treated as a brand. That's the way it is. Sure. That's helpful, Mohit. Just last one more question. A few quarters back, you had mentioned in the concall that the HPC division has, in distribution perspective, it has been bifurcated into two lines, from a stockist point of view, to focus on oral and home care as two different divisions. How that is working, and how it's getting rewarded in terms of the throughputs and overall strategy? Can you share some highlights or trends which you have, early signs which you have observed? Right, Rahul, that's what we did because our HPC portfolio is pretty wide. We had divided the HPC portfolio in select markets into two verticals. one is oral care-driven vertical, and one is a hair oil-driven vertical. We separated the two, and what we've done is every salesman, we have given him a gate target for him to achieve his incentive. The incentive gate is given on the return on what he sells in the marketplace. If he goes and every day a salesman does a beat, he has to do a threshold level of business of roughly around, I think INR 5,000 business in an outlet. I could be little wrong. Sorry. I think around INR 2,000 business he has to do in every outlet for him to justify his salary. The gate incentive is blocked at that. If he does that kind of a target in an outlet which is productive, then we open an Everyday Great Execution EDGE score for the 30% incentive, which is a part of the salary. We found that around 40% of the people are cutting that particular edge score for us, and that means the business is doing exceedingly well. Wherever he's not able to do a ROI accretive business, there we are providing a subsidy to the stockist in the beginning because we have to handhold him till the time he becomes independent and ROI accretive there. That's it. If I can press you, which you have given to the field staff to generate that kind of business. Any increment can you share, if you don't mind? Sorry, Rahul, I couldn't understand. As you mentioned that the 40% have cutthroat the ROI. Can you mention the ROI? That's what I'm saying, ROI threshold is in the range of around 2,000 for us. Okay. Per outlet. Thank you so much, Mohit, and all the best wishes to you. Thank you, Rahul. Thank you so much. Yeah. Thank you. The next question is from the line of Amnish Aggarwal from Prabhudas Lilladher. Please go ahead. Hi, Mohit. I have a couple of questions. My first question is on the growth rate. We have grown our top line at 32%, but if I compare this number with 1Q FY 2020, then our growth rate is 15% approximately. If I look at, say, the remaining quarters last year, we grew top line by 14%, 16% and 25%. In backdrop of this, what sort of a number, depending upon, say, assuming that the environment remains good and there are no big disruptions, what sort of, you can say, growth range we should presume for the rest of the year? Sorry, the last bit was growth rate for the current year, you said? What I'm saying is that 1Q last year was in normal quarter with a very, you can say, decline in sales. Our growth rate is 31%, but rest of the three quarters were normal last year. In that backdrop, what sort of a growth range should we presume for the remaining part of the current year? Right, Shirish. What we're looking at is a high single-digit of volume growth topped by some sort of a price increase. That is what we are looking at if the situation is completely normal. Like I told you, in healthcare, we will be looking at a mid to high mid-digit sort of a growth rate. Our foods business should do a high double-digit growth rate, and HPC should be in teens for us. We should end up doing a high single-digit in volume with topped by some price increase, so double-digits. In my view, full year guidance, which should lead to growth rate for the full year also. Okay, that's very helpful. My second and last question is regarding the new launches. Last year, we had a spate of new launches, and you clearly elucidated about the success you had in the foods business, as well as the fact that sanitizer and some of the surface cleaners have not done well. Yes. Can you elaborate that beyond foods, which are the products where we have actually been able to create a mark for ourselves? I think, the foods business is by far the seller. The healthcare categories also, new products have done exceedingly well, especially Tulsi Drops, health juices have done well. Our chutneys range, pickles range, drinks range have done well. Our baby care range is doing very well as far as e-commerce is concerned. Our Dant Rakshak, which was launched, is also showing some green shoots, but for the COVID lockdown, it got a setback. We will be investing behind Dant Rakshak. Our Badam Amla in the hair oil portfolio is doing well. Our Ayurvedic shampoos are doing well. Our entire revamp of shampoos is doing well. The revamp of home care business has done well. I think barring the sanitizer portfolio, antiseptic portfolio, rest of the brands have all done well for us. Okay. Do we have plans to continue with Dazzl or slowly Dazzl and some of these surface cleaners, et cetera, we are going to discontinue? We are still evaluating, Shirish, because the answer is not simple, because the category is really big for us and the opportunity is big, and there are few players present here. I think it's the distribution muscle which should carry us through. Because the pressure with the sales team is so high in terms of so many SKUs to be sold, that's why we are facing the problem and the pushback coming. We have good products, so we will be limiting these to regional launches and not national. Wherever it is showing traction, there we'll keep. Wherever it is not showing traction, we will weed it out. That's what. Early days yet to call a funeral for Dazzl brand. Okay, sir. Thanks a lot. Thank you. Thank you. The next question is on the line of Aditya Kondawar from JST Investments. Please go ahead. Yeah. Hi, sir. I had two questions on the online first for D2C brands. Number one, what have been your learnings from the online first brands that you launched? I mean, how does it help you going forward, right? Like you said before, connecting with millennials and Gen Z. Number two, I have seen the new product launches, the way they have been designed and marketed. I need to congratulate you on that because the products look really good. On that note, just wanted to know, are there any companies on the branding or marketing side that you look up to maybe in India or globally? Thank you. Sorry, Aditya, we couldn't get the second part of your question. First part I understood is D2C. Second part I did not understand. On the branding and marketing side, are there any companies that you look up to or you learn from them? Any companies in India or globally? Right. First of all, D2C learning. I think D2C is a very interesting space. As I've been telling you, D2C gives you first-party data, and that first-party data becomes extremely important for you to put those learnings across modern trade, GT, et cetera, and you become razor sharp in your thinking, understanding the consumer, understanding the customer, and the entire mix can be refined and formalized. I think D2C is extremely important in terms of that learning curve. We had launched some brands on D2C, like apple cider vinegar, our entire baby range, our Odomos range, and healthcare range, Vatika Select shampoos, and all of them surprisingly are gaining good traction in the marketplace, and we are not withdrawing any brand as of now. It also gives you an opportunity to correct as you keep moving on. That is doing well. As the brands are scaling up, like for example, apple cider vinegar is becoming big for us. Now we are trying to roll it out to modern trade. We are scaling up that business. May be the case with baby also that we may be doing. Early days for Vatika Select shampoo, but that also we can consider. As far as branding marketing companies are concerned, in the D2C space, yes, there are many inspirational brands that you have and a lot of learning to be picked up from there. In the Indian space, why go far? I think there are multiple great examples like WOW, Botanica, Mamaearth, The Moms Company. I think hundreds of examples are aware in different spaces, which are doing well and which are startups, and we have to learn the entrepreneurial way of doing business through them. That's the ecosystem that we are trying to create in our e-commerce vertical, which is completely independent. That's why we've changed the structure in the company. The e-commerce head is almost like a Chief Executive Officer running a separate company, having youngsters who are all 20 years of age and taking calls themselves. There's absolutely no interference. They almost report to the management committee and take those calls for us. That's the ecosystem that we are trying to nurture in the organization by giving complete autonomy to them. Thanks for the thought, sir. That helps a lot. That is all from my side. Thank you. Thank you. Ladies and gentlemen, we will now close the question queue and take the last question, which is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, good evening, and thanks for the opportunity again. Mohit, the bigger question, which I wanted to ask the previous time, is that you did mention two to three occasions that you have been getting your senior management teams spruced up. You have done some structural changes. What exactly we should read from this? Is it that the efforts what you have put in on the productivity, agility, which are not enough and that is pushed for the structural change? There are some operational gaps, and these are the gaps which you have filled in? Right. Therefore, we are trying to build capabilities in the company, Shirish. Capabilities come in the organization two way. Either you build the capabilities from within, and if the capabilities are little alien to the existing organization, the learning curve may be too long. You acquire the capabilities from outside. When we recruit the talent from outside, we recruit talent for the capabilities which are not existing internally in the company, or we can't learn those capabilities in a short period of time, which is the expectation of the management. Most of the lateral hires that we are doing at the senior management level are the capabilities that we want to acquire from outside the organization. Giving you an example, IT is a capability that we acquired. We have acquired a gentleman from Unilever who has come in from outside, and he's heading our IT vertical. Naren is the name of the gentleman. He's a youngster who's driving IT capabilities within the company. IT capabilities means the core IT and also the business IT roles. Earlier, IT was only IT in the organization, which was SAP driven. Now the core IT is going to be percolating into the business IT and business automation, which capability we did not have. Similarly, we have got talent from outside in terms of sales, digital transformation, which is a capability we did not have in the organization. Again, we got a talent from Unilever who joined us, who used to be with Dabur, then joined Unilever for more than a decade, and then come back to Dabur, and who's driving the digital capabilities in the S&D to automate the organization. We might look at digital capabilities in marketing also. As in the marketing organizations, my span of control was very large. We've kind of now from four heads of marketing, we reduced it to two heads of marketing, and we've got a talent from outside in the HPC and the foods vertical, Abhishek, who joined us from Coca-Cola. He's come in, and he brings in sales and marketing capabilities of charting out the route to market path for the foods business, the way Pepsi and Coke have done, which we don't understand that space. It's all acquiring capabilities which hitherto were not existent in the company. In R&D also, we have got a Chief Executive Officer of Ministry of Ayush join us as the Head of R&D, Dr. Sastry, who joined us. He's again joined us back. He was with Dabur. He joined Ministry of Ayush, got the education, understands regulation more than anybody else, was sitting on the policy creating framework with the government of India, come back to us, who will be driving public policy with the government while with the organization, and also providing us vision of the R&D, how to take Ayurveda mainstream. Ghar Ghar Ayurveda, which is the vision of the company. We are trying to acquire capabilities which are hitherto not present in the company. It should be not seen that we are not able to manage them, that's why we are trying to get people in. Building the organization for the future is what we are trying to do here. Whether it's sales, marketing, R&D, IT, automation, et cetera. In manufacturing also. We've got a vice president, manufacturing. Because the way we were manufacturing and the efficiency and the effectiveness, robotization, we don't know these learnings, that where the market has moved. A gentleman has joined us from Unilever again, who will be driving the entire manufacturing automation going forward in the future. Mr. Rahul Awasthi is the one who joined us again from Unilever, having spent his lifetime in Unilever, joined us, and he'll be driving the entire automation and efficiency and the equipment OEE scores and quality frameworks, which we don't have in the company. Therefore it is acquiring lateral talent to build capabilities in the company to build the organization for the future. Yeah, Shirish, hope I've answered your question. Wonderful. It was an excellent commentary. I hope I am not bothering you further. I think it's a good move, and I think, yes, you harped on the agility part. I'm sure, and I'm looking at this talent would definitely have a bigger contribution in further dreams to achieve. With that note, thank you and all the best, and that's what my question is over. Thank you. Thank you, Shirish. Thank you so much. Thank you. Thank you. As there are no further questions, I would now like to hand the conference over to Ms. Gagan Ahluwalia for closing comments. Thank you for your participation in this conference call. The webcast, audio recording, and transcript of the call will be available on our website soon. Thank you, and stay safe and healthy. Have a nice day. Thank you. On behalf of Dabur India Limited, that concludes this conference. Thank you for joining us. You may now disconnect your line.