of Dabur India Limited. I welcome you to this conference call pertaining to results for the quarter ended June 31, 2022. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer at Dabur India Limited, Ankush Jain, Chief Financial Officer, and Mr. N. Krishnan, DGM. We'll start with an overview of the company's performance by Mr. Mohit Malhotra, followed by a Q&A session. Over to you, Mohit. Thanks. Thank you, ma'am. Good afternoon, ladies and gentlemen. Thank you for joining us today. I hope that you and your loved ones are staying safe and healthy. The operating environment during the quarter remained quite challenging. The war in Ukraine continues to have a cascading effect around the world, especially on currencies of fragile countries. Inflation is surging globally, indicated by historically high levels across the world. Even in India, inflation continues as reflected in WPI at 15.2% and CPI at 7% in the month of June. Softening of demand continues in the quarter, with FMCG volumes contracting by 0.7% due to high price increases seen across categories. In such an environment, consolidated revenue operations posted a growth of 8.1% and a constant currency growth of 10.3%. The India business grew by 10% with underlying volume growth of 5% on a high base of 34% last year, same quarter. In this quarter, there was a significant difference between the growth of COVID contextual immunity-led portfolio, which had got a boost in quarter one of last two years, and the non-COVID contextual business. While the COVID contextual immunity-linked portfolio is seeing a decline due to exceptionally high bases, the non-COVID contextual portfolio registered fairly strong growth. The operating margin has been higher than normal during last two years due to strong growth in the healthcare portfolio. In quarter one FY 2023, operating margin stands at 19.3%, which is higher than pre-COVID level of around 18%. The consolidated profit after tax registered growth of 0.7% to touch INR 440 crores during the. As for India business, all the three metrics of revenue, operating profit and PAT are registering a 10%+ three-year CAGR, reflecting that the business has done exceedingly well over this period. In terms of categories, on the back of intense summer season and good execution, food and beverage business registered a stellar growth of 50%. The beverage business was on a strong trajectory and outperformed the industry significantly, with our market share in juices and nectar category increasing by 330 basis points. This is further bolstered by a strong traction of our fruit drinks and milkshakes portfolio. The food business also performed well, with growth of 36% driven by portfolio expansion and innovation. The food category crossed the INR 100 crore mark in the last fiscal and is on track to reach INR 200 crore mark this year and INR 500 crore mark in three to four years' time. Home and personal care portfolio recorded a 15.5% growth on a high base of 26% last year, same quarter, leading to a CAGR of 21%. Toothpaste portfolio reported a 13.7% growth during the quarter. Market share in toothpaste segment increased by 20 basis points. We have now become the number two brand in South of India. Hair oils posted an 8.1% growth. Our market share in hair oils improved by 30 basis points, driven by marketing investments, regional focus and distribution expansion. Shampoos recorded a 17% growth. Market share in shampoos increased by 50 basis points. Home care reported a growth of 52%, driven by double-digit growth across Odonil, Odomos, and Sani Fresh franchises. Odonil recorded an increase in market share across all subcategories of air freshener category, and Odomos increased market share by 260 basis points. Excluding the sanitizers portfolio, skincare portfolio witnessed a growth of 35% during the quarter. The healthcare portfolio is lapping over two strong quarters of growth in the base back of first and second wave of COVID. This portfolio saw a growth of 29% in quarter one FY 2022 and 28% in quarter one FY 2021. As the COVID severity has waned, consumption of COVID contextual healthcare products has significantly reduced. Consequently, the portfolio declined by 20% during the quarter. In spite of the decline, the three-year CAGR for Chyawanprash is at 25%, and our market share in Chyawanprash increased by 200 basis points in the quarter. Market share in honey increased by 190 basis points, with the new entrants seeing shrinkage in market share by almost half. Hajmola and Pudin Hara franchises posted a strong double-digit growth. Under OTC and while the COVID contextual brands declined, brands like Lal Tail and Shilajit reported a mid-teen growth. Among channels, e-tail was a standout performer with a growth of 42%. E-commerce channel continues to gain prominence and now contributes to around 9% of our revenue. The HORECA business also exhibited a good growth on back of FMCG portfolio doing well. International business recorded a constant currency growth of 8%, high base of 34%. The business saw a growth of 30%. Egypt business grew by 17.5%, and Nepal business clocked a robust growth of 30%. Saw 88% growth in currency. Currency devaluation in markets like Turkey, Egypt, and Africa impacted the revenue of international business in translation. Overall, in spite of the weak macroeconomic environment, we continue to drive our aggressively and have gained market share across 98% of our portfolio. Cost side pressures due to steep inflation and currency devaluations triggered global environment remain a cause of serious concern. Although current demand trends remain weak, a normal monsoon, good harvest and MSP increases should enable a recovery in rural in the medium term. Urban recovery will be driven by revival of economy, softening of inflation, and buoyancy in new age channels. As for Dabur, we will continue to focus on strengthening our power brands, distribution expansion, innovation, cost optimization, and efficiency enhancements, which will hold us in good stead in the future. With that, I bring my address to a close and open the Q&A. Thank you. Thank you very much. Ladies and gentlemen, 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. We have the first question from the line of Percy Panthaki from IIFL. Please go ahead. Hi. Good evening, everyone. My first question is on the margins. Typically pre-COVID, we have seen that full year margins, EBITDA, are about 200 basis points higher than the Q1 margin. During COVID period, this relationship broke down. It was more or less in line. Sometimes Q1 was even higher than full year. Now that we are out of COVID, do you think that we sort of revert back to the pre-COVID kind of margin behavior, Q1 versus full year? Hi, Percy. Thanks for the question. This is Ankush. Yes, in fact, last two years you would have seen, you know, quarter one margins were significantly higher than the pre-COVID, I mean, almost in line with the full year. Now I think first, our portfolio is rebalancing to pre-COVID levels, and therefore you would see the margins trending to similar to what was in FY 2020. Hence, Q1 margins would normally be lower than the full year margins, given the fact that Q1 is more seasonal and to juices as well. Plus also secondly, the inflation we think in the first half would will be significantly higher than H2. Your interpretation and trend is almost, you know, I think in line with what used to happen earlier. Right. The level of margin between Q1 and full year, that gap, you know, we still have to evaluate given the things are very volatile. Right. Secondly, I just wanted to understand on the new product launches, whatever we have done in the last two to three years, what is the contribution of those products to the overall top line? Also if you can give some flavor on some of the healthcare launches we had done, which seemed very contextual and got a very good response during COVID, like Tulsi Drops, etc. Do we see, of course, the momentum would have reduced from COVID period, no doubt. Is that reduction like very sharp, or is there just a gradual moderation in that? Also if you can give some color on the other new launches, be it baby care or some of the food launches you have done, etc., etc. Right. Percy, what's happening is the new product contribution to the business is around 4.4% in the current quarter. Most of the NPDs we had launched were COVID contextual during the COVID period. Outside of the COVID contextual also we launched new products to increase the addressable market, which is the long-term strategy for us. The NPDs which have really done well for us are Réal Drinks. Drinks have clocked a turnover of INR 100 crore in the current year, and we will be exiting at around the INR 200 crore turnover for the drinks. Our health juices have done very well in the healthcare business, which was COVID contextual, but also strategic in nature because there is a set market. It wasn't just limited to COVID period, but also there. For that, there's a turnover around INR 30 crore that we are registering. Although it has come down sharply by around 60%-70% from the COVID time to now, but that is a structured good business and a margin accretive business to us, and that we will continue to grow. In HPC portfolio, there are new product launches like Ayurvedic shampoos we guys rolled out. That's doing very well in the market, and that is gaining market share. Herbal toothpaste, which was a south launch, that's doing very well. We are broad-basing that to now national launch. Our Hajmola extensions like LimCola, ChatCola, have done very well, and they are contributing more than 10% of the overall Hajmola franchise. Our Badam Amla, which is a flanker brand strategy in Amla, supporting the Dabur Amla core brand with flanker brands, is doing very well. That is doing a turnover around INR 20 crores-INR 30 crores for us. Réal milkshakes, I already alluded to in my narrative, that it's doing very well. We've already gained 1.1% market share in the milkshake category. The food business of Hommade chutneys and condiments that we guys rolled out, that's also doing very well. It's outside of the COVID contextual portfolio. There were a lot of other NPDs that we rolled out in healthcare, like Samshamani Vati, like Juri- Tap, like many other products which have kind of gone down by around 60%-70%, which are very contextual in nature and extremely COVID-driven. Like, say, in hygiene products also, we'd introduced a slew of healthcare products for which the turnover of almost become zero. Like Sanitize, INR 100 crore, now it's almost become zero. Our healthcare products under the brand franchise that we created of sanitizers, that has also got reduced to around INR 2 crore-INR 3 crore. That we have cut the tail, and we are not pursuing to reposition those. In the HPC food portfolio and on Chyawanprash extensions, honey extensions, Hajmola extensions, all those are doing very well and contributing as we speak around 5% of the turnover. I hope I've been able to answer your question. These NPDs are over and above the digital-first new products that we've rolled out on e-commerce. Our strategy is to apply a test balloon in e-commerce, and as the brand does well, then we roll it out to modern trade that we've already talked about before. In e-commerce, Apple Cider Vinegar has done very well. Baby care range is doing exceedingly well, and Hajmola sales are great. We've got around 2%-3% market share on e-commerce, and now we are extending it in modern trade also, the entire beauty care range. Baby? The baby care range, sorry. Our Herbal, Pure Herbs range is also doing well for us. Vedic Suraksha Tea is doing well. In the current quarter, we'll be rolling out a green tea, which is another variant, and cold pressed juices, mustard oil, castor oil and groundnut oil. They are all doing very well on e-commerce. So not yet extending to modern trade, but are doing reasonably well for us. To your previous question on the- Yeah. Sorry. Yeah. Yeah, yeah. Sorry. On your previous question on margins, we see margins on all fronts, like operating margin is around 80 basis points higher than pre-COVID to 21%. Profit before tax is 22%, pre-COVID was 20%, and PAT is around 16.8% to pre-COVID, which was 16%. Everywhere our pre-COVID level margins, we are better than the pre-COVID times because during the COVID time, healthcare portfolio went up and healthcare is structurally higher margin. Because of that, the margin went up by 100 basis points. Despite inflation, we've been able to maintain margins higher than pre-COVID, to your previous question. Sure, sure. Chyawanprash extension into health food drinks, any comments on that? Sorry, I didn't get that. Chyawanprash extension into? Health food drinks. HFD category. Yeah. Yeah, correct. Chyawanprash extension to health food drinks is doing well. We've done a very segmented launch here, limited to around 10,000 outlets, and those outlets have registered a shelf share increase and also a 30% repeat purchase. That's an indicator on how the brand does. As and when the brand is doing well in a particular segment, we will be extending into other segments also. At the moment it has been a very, very segmented launch for us. Wherever we've launched, we've got very good rave reviews about it. We are in no hurry to, you know, gain turnovers on the NPD as long as we want NPD to be successful. We will be launching channel by channel and state by state. It's a gradual slow launch. By the way, in Chyawanprash, we'll be extending it into granules also in the current quarter. It's called Chyawanshakti powder, which is what we are rolling it out in the coming season. Chyawanprash extension into powder format. Right. Just one related question on this, Mohit. I mean, you have launched a lot of new products and not just variant, like if you've launched Ayurvedic shampoo, that's just a variant of an existing category. Like, you've entered into various different categories. I mean, given that these are test launches in e-commerce, et cetera, and all of them are doing well except for COVID contextual ones. Still, I mean, from us investors' and analysts' point of view, these are still so very, very small. Can you give some idea on what kind of ramp-up we can expect? Let's say out of the total, all these new categories that you've sort of launched either on e-commerce or otherwise, new categories, not new products like pickles, baby care, milkshakes, et cetera. These I consider new categories, but not fruit drinks. What kind of turnover can these in aggregate deliver over, let's say, a five-year period? Because apple cider vinegar, let's say even if it's doing very well, if the total category is only very small and even five years down the line, let's say we have only an INR 30 crore sale out of this, then as investors and analysts, that's not a very exciting product for us. Just coming from that point of view. Yeah, I got what you're saying. What we are saying is that 5% of our turnover on an annual basis should come as a contribution from NPD, and that will be sustained over the period of time. That's the way we are looking at it. In terms of turnovers, to give you a flavor from an analyst perspective, just to give you an idea, in drinks, now we have in beverages done INR 100 crore turnover on a drink size of around INR 1,200 crore. This INR 100 crore in the second year is gonna be INR 200 crore. That's the turnover build-up that is happening on a base of around INR 1,200 crore-INR 1,300 crore beverage business. In foods also, we are a home-made brand which is INR 80 crore, and in five years time we are scaling it up to INR 500 crore, and we are giving you that particular vision also. That's the way. In beverages, in drinks now we've expanded our addressable market. I can't really give you the quantum turnover because new product failure rate is also very high. It is just not that our COVID contextual portfolio has done bad. We've got certain other brands also which have not done very well. For example, we launched. Dant Rakshak. Dant Rakshak, which has not done very well in the toothpaste. That we are kind of revamping. We have done an entry into our gels, which is a Red Gel, which did not do well. We launched Amla Aloe Vera also, which also did not have a very good response. That's not done very well for us. Wherever we are entering, we are wanting to have 10% of the turnover of that particular category being NPD and therefore increasing the addressable market. That's where we are. I don't know- Got you. If I'm able to give you a specific answer or not, but that's the way we are, you know, trying to steer our strategy. No, that's very helpful, Mohit. In interest of time, I'll come back in the queue. Thank you. Thank you. We have our next question from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Mohit, and hi, team. I just wanted to give you the update on the inflationary scenario right now. How are we placed? How much have we passed on? Have we taken any further price hikes? Right. The inflation is going on unabated, and I think the lesser said is better. We have seen a 9% inflation coming on a base of 10% of last year. It's happening across our commodity buckets. Whether you look at hydrocarbon-linked commodity bucket or packaging material, which is again hydrocarbon-linked, our herbs and spices, whether it's edible oils or specialty chemicals. All buckets of commodity are seeing a huge inflation. Inflation is in the range of around 9%-10%. We've been able to take a price increase of around 5%, absolute price increase, and a 1% - 1.5% of a surrogate price increase in terms of grammage reduction in our LUP. Around 6%, kind of, or 6.5% kind of a price increase, which is nowhere close to mitigation of 9%-10% inflation. Rest has got reflected in gross margin compression of around 220 basis points that you actually saw. This is what we have done. We think the inflation will not abate, at least in the second quarter. Second quarter we will see margin compressions. I think in the third quarter onwards, when we lap over inflation of around 11%-12% which was there last year, we think the commodities will soften and there'll be a rollover price increase impact happening in the third quarter. Third quarter and fourth quarter should see a bit of softening of inflation and our price increase is kicking in and a margin protection happening in the third and the fourth quarter, second half of the year. Second quarter, we will see some amount of gross margin compression, which on back of the scale, we should leverage other line items and try to minimize the impact of gross margin compressions on operating margin. That pressure will be there. Mohit, if I understand, this inflation is the mismatch is primarily in hair care, right? That situation continues, or is this now percolating across other categories as well? Yeah. What's happened is wherever we are market leaders, Avi, whether it's healthcare or in foods, we've been able to pass on the inflation to the consumer because we are the ones who set the pricing table and we've got the pricing power there, elasticity, because most of our brands are market share leaders there, around 60%, 70% market share. That we've passed on. We are cognizant of the fact that it might lead to some sort of compression in the demand also as market leaders, so we have a ownership to drive the market growth, and the growth are not very easy to get by. Wherever we are market followers, we wait for the market leader to take up the price increases. Like in oral care, Colgate has been very swift to take up market price increases, so we've also taken up price increases. We've been able to pass on the inflation in oral care business also to the consumer. We haven't seen margin compressions there. In home care, we are again market leaders there. There also we passed on. Skin care also we passed on. In hair care, you're rightly saying so. In hair oils, because, the competitive intensity is very high, we have a lag inflation to price increase, huge, because we wait for the competitor to pass on, which they are not passing on. There is a margin compression there. In shampoo, where we have majority of the business at a price point, at a INR 1 or a INR 2 price point, there we are holding ourselves back on, taking, price increases. We are kind of titrating the volumes in our LUPs there. Got it, sir. Very, very clear. Sir, if I may just on the last point that you said you will use all levers to maintain EBITDA margin. Did I hear that correctly? Is that from an annual perspective that you're talking about? Or, if you could give me the context, I didn't quite catch the thought process behind that. The beginning of the year, we were facing a 7%-8% inflation, and that's how we had budgeted ourselves, created, crafted our budget. We have taken a budget of maintaining our operating margins. As we entered quarter one, we saw inflation is much deeper as compared to the budgets that we've taken. We are budgeted to maintain our EBITDA margins. If the commodity prices remain, especially the oil prices remain, at the point where they are, we are seeing some softening happening today. It has reached a 100 level, and therefore it's gone down below 100. If the commodity prices soften, then we'll be able to maintain the margins on back of second half of the year. If the inflation doesn't abate, then it could be a little difficult. In terms of prioritization, the management's priority is always to gain market shares, not to let up on the volumes and the value. Second priority is given to margins if push comes to shove. Got it, sir. Very clear. Sir, lastly, if I may, if you could give us a sense on the rural side, especially on, you know, you had indicated last time about the channel health also being an indicator of how demand is. How is that changing, and if you could give us a sense on how rural is panning out? That's all from my side. You know, our numbers don't kind of reconcile with the syndicated data which Nielsen talks about. We have seen our rural business and urban business almost neck and neck with each other, and we did not see as much compression in the rural business the way Nielsen is indicating. Nielsen indicates a 0.6%-0.7% expansion in urban business and rural business down by around 2.4%. For us, both of them are around 8.3%-8.4% growth that we've seen in our business on the back of ahead-of-the-curve infrastructure developments which we have done in the rural business. Where the village expansion is concerned, stocking is technology intervention, et cetera. For us, rural is doing relatively better. Of late, what we have seen, Nielsen is definitely a lead indicator and an indicator of things to come. We are seeing some credit stress in rural, and we've extended credits in rural. Telltale signs in rural India is there. That's one. Plus demand compression is also, you know, is being observed in the rural India. Plus impact of inflation is much higher in rural as compared to urban, and therefore, volumes are also getting compressed. That said, in medium term, on back of normal monsoon, MSP increases, infrastructure expansion, government's focus on rural, I think rural will be very resilient and will be very quick to come back to where it was. We have seen in the last two to three quarters, rural, per syndicated data, is flagging and is suppressed more than urban. Urban is also doing well because post-COVID, the urban markets are opening up and we see huge buoyancy in modern trade. Modern trade and cash and carry and e-commerce, they have taken the slack of GP. On the back of these emerging channels, the urban businesses are doing reasonably good. Okay, sir. Okay. We basically remain. Yes, we are not yet seeing, but it's, it looks increasingly better. That is how I would take it away. Thanks, sir. Thanks a lot. That's all from my side. Thank you very much. Thanks. Thank you. The next question is from the line of Abneesh Roy from Edelweiss Securities. Please go ahead. Yeah, thanks. My first question is on the hair oil. Two questions here. First one is on this new launch of Neelibhringa. If you could tell us what is the pricing positioning? And already Indulekha and some of the other players are quite well established here. What will be the USP? Second question on hair oils is, I've seen the one plus one offer in coconut hair oil. You are a small player there with 6%-7% market share. What would be your three-year, five-year ambition in coconut hair oil? This one plus one offer, is it on just Jio or you are doing it across e-com and across modern trade? Yeah. Abneesh, I didn't get your question. I think first of all, I'll answer what I got. First of all, you're talking about Neelibhringa launch. Our Neelibhringa entry is coming from a rationale of Dabur's non-presence in the INR 1,000 crore category. There's an Ayurvedic oil which is INR 1,000 crore as a category. It's a new category where Indulekha came in and Kesh King came in. Dabur doesn't have a presence there. We are trying to get into that, and that's why this NPD of Neelibhringa 21. While there was the entry of Bhringraj, this is a Neelibhringa. Nelli is Amla and Bhringraj is Bhringraj, and Nelli is also known for keeping hair black rather than just hair growth. Our positioning is more on black hair, long hair and hair growth, and apart from hair growth, also hair reduction and hair fall reduction. The price point is a sweet spot between Indulekha and Vatika, which is a premium coconut oil. We are at around a price point of INR 400 per 100 ml as compared to the market leader, which will be at around INR 600 per 100 ml. We are cheaper, and we see a clear price band opportunity available in between the leader in this Ayurvedic category and Dabur Amla or Dabur Vatika, which is at the premium end. There's a huge gap between the two. That's where we guys are in terms of price positioning. Amla, if you see, is INR 50 per 100 ml. That's the popular price point. The premium guy is operating at INR 600 per 100 ml. There's a huge difference and a gap available there for the consumer to make a choice. These are all value-added coconut oils with different benefits given to the consumer. But that's the segment that we've made an entry in. We'll be watching. We're gonna test marketing in South India because that's the largest market for coconut oils. If we see green shoots here, then we will roll it out in the other parts of the country also. As far as coconut oil is concerned, you know, it's a huge market. I don't have to belabor on that point. We've got a brand called Dabur Anmol. Dabur Anmol is already an INR 200 crore franchise, and we are looking at ramping it up to around INR 500 crore in two to three years' time. That's why we are extremely competitive here. We are half the price of what the market leader is in a 100 ml SKU, which is what we guys are flashing on the pack. On larger, we have a different pricing in larger packs. We have a different pricing in the smaller packs. Industry isn't growing, right? Your hair oil CAGR three years is 3.6%. If you have to more than double in three years, it will be essentially market share gain, which is your target. Yeah. Amit, we are not concerned with the market growing or market declining. The hair oil market is actually declining at 0.4%. The hair oil market is huge, more than INR 10,000 crore. We guys have a market share of roughly around 15.4%, 15% thereabout. We are relying on market share gain only. It is the market leader who should be bothered about the market growth rates. We are not concerned with growth rates. We are concerned with gaining share. It is almost like a monopoly situation here, where we are at around 15%-16% and the other player is around 40%-50% share. Therefore, a huge gap and a huge opportunity for us, and we have a right to win in this sub-segment. That's what we are playing in all the sub-segments, whether it's a perfumed hair oil segment where we have Amla. There is a cooling segment where we guys are not present as yet, so we will be making an entry into cooling also. I can't tell you the timeline as yet. Then there is a segment of Ayurvedic where we've already made an entry. Then there is a coconut oil where we have Anmol. Then there is a value-added coconut oil where we have Vatika, which is already doing well for us. So likewise. And there is a light oil where you have Bajaj, which is a big boy. There also we are gaining market share steadily, so in the Dabur almond segment. All the sub-segments we feel there's a huge opportunity here. Sure. My second question is on shampoo. If you could tell us for the category, how much is the natural currently? For you, how much is the bottle currently versus, say, industry, if you could point out, how are you different in terms of bottle saliency? Yeah. Shampoo, the overall market segment of natural will be in the range of around 10% or thereabout as compared to oral care where the natural segment is 30%. We feel this 10% market segment will only inch up, and it's growing at a much faster clip as compared to the shampoo growth rates are concerned. That's the way oral care is also panning out. There is no shampoo in the market which has a right to win in the herbal space of shampoos. That's why Vatika Ayurvedic shampoo as a launch is doing very well for us and in sachets also is doing reasonably well. Our saliency of bottles is around 16%-18%, which in some quarters goes up to 20%. In some quarters it's around 16%, which used to be around 10% at some point in time. From 10% it's ramped up to around 16%, and we are continuously working towards ramping up our bottle saliency, which is margin accretive to us. There's a huge gap in margin. We make around 55% margin in a bottle as compared to a sachet we'd be making something like around 20%-25% margins thereabout. There is also inflationary pressure in sachets because there is a price point and there is a quantity threshold level of quantity which a woman needs to wash their hair. Not much one can do. We are ramping up our bottles significantly. Modern trade and e-commerce totally put together in cash and carry, if I also see the business, this is roughly around 20%-25% of the total category, and our saliency is only around 16%. Natural and shampoos are more skewed towards modern trade. We are low pivoted as compared to the category saliency of bottles. There's a huge headroom for us to grow the bottle saliency driven by modern trade, e-commerce, cash and carry, and OFO formats, which are also driven by pricing. Our pricing is also in our favor because we can give a one-for-one free also, and consumer is very price-conscious when it comes to interacting with the product directly. You know what I'm trying to say. Correct. Last quick question is on toothpaste. You said Dant Rakshak and Red Gel didn't do as per expectation. Now, you also mentioned that for naturals for the category, it is around 30%, which is a very high number. If I see your growth versus market leader on a three-year basis, you have clearly grown faster even this quarter. My question is the natural shift within toothpaste now coming to a much lower change? Second, Dant Rakshak and Red Gel failure or say below expectation, would you attribute that to any specific reason? Yeah. I think a natural segment continues to trend higher. Now, because the inflationary pressures in the category, you see the pressure acting on the entire category, and it's just not natural, it's the non-natural category also which is facing headwinds of the category growth. If you look at this quarter, the category has declined by around 3.5%. This is a volume decline happening in the oral care category. Now, this is happening, but herbal category is declining. It's almost stagnant as compared to other category decline of around 3.5%-4%. That's the skew. Herbal is definitely driving growth. Now, the pace of growth has slowed down because Patanjali's growth has slowed down, not that our growth has slowed down. There are two big players in the natural category. One is Dabur and one is Patanjali. The growth of Patanjali slowed down, that's why you see a slower growth happening in the natural sub-segment. I think the market leader's natural offering is also growing at a faster clip as compared to the non-natural for them also. That's as far as the natural is concerned. Now, our offerings in natural, whether it's Dabur Red or Dant Rakshak or Dabur Herbal or Miswak or Babool, all of them are doing well except for Dant Rakshak, which didn't do as per our expectations. You know, we were also not sure at our end whether it will do well or not. We said there is a price point gap between the Dabur Red and Patanjali, so we wanted to play at Patanjali's price point. Unfortunately, north of India, it has not resonated well with the consumer, so we have withdrawn it. We are focusing on herbal. As far as gel is concerned, gel is definitely a big opportunity. I think it was our marketing failure at our end, which we are correcting the mix. The benefits orientation for the gel category is all youngsters and freshness. Unfortunately, we brought in a do-good element in the freshness category, which we'll be correcting going forward. Using our tenets of success, which we have always been using, like a celebrity et cetera, and making a revamp of the gel proposition in the market once again. That you will see in the next quarter or the next to next quarter. We're rolling out revamped gels in the market under the Dabur Red brand, and we are calling it a sub-brand called Bae Fresh. That will be coming out in the market. That's helpful. One follow-up on what you said. Patanjali market share now would be how much? And are you taking any proactive steps, or is it just that brand and innovation from that company is in general extremely slow versus what you do or versus what, say, Unilever does? Is that the reason, or it's just a very targeted launch, targeted market share from Patanjali which you are doing? Patanjali was around 12%-13%. They've come down to around 9.7%, and their growth has also slowed down. I think there's no lack of aggression from Patanjali, except that Patanjali's efforts are dissipated in a lot of other launches and the company acquisitions of, you know, Ruchi, et cetera. That's why. Aggression is not lost out, I would not say. They are. The brand is not doing very well in the marketplace. Some amount of steam has got lost as far as Patanjali is concerned. That's my take. What was the second part of your question? No, related only. Are you doing any proactive steps to further take? Because 9% is still a very respectable market share from Patanjali. Yeah. You know what's happening is, Abneesh, if you really analyze the market, Dabur Red is doing significantly better in South India and in East India. We guys are very weak in West India and North India, which is where Patanjali has a saliency. That's a gap in our portfolio. While we are a North Indian company, and Dabur's equity is very strong in North India and East India, but we've not been able to make inroads with Dabur Red into North India. We are strengthening our portfolio of Red in North India, and that's why North India is a very price-sensitive market. Therefore, we have opened floodgates and augmented capacity in our INR 10 price point, which is doing very well in North India. In South India we already are doing very well. We, as I talked about, we are already a number two brand in the South, and we are doing well in East. In North, to bolster ourselves and our position, earlier we thought that we'll come out with Dant Rakshak, but Dant Rakshak hasn't done well. Lesson well learned. We'll be focusing on Red only in North. We are augmenting LUP there, plus we are taking a celebrity which resonates with North. Dabur has tied up with Amitabh, and we are in the process of making a shoot and doing TV commercials with him. We will be doing a press release on the same and coming out. There'll be a big campaign launch of Red with taking a brand endorser like Amitabh there, who resonates in North India. Sure. That's very helpful. That's all from my side. Thank you. Thank you. Thank you. Before we take the next question, I'd like to remind the participant, limit a question to two per participant. If time permits, you may join the queue for any follow-up. Thank you. We have the next question from the line of Prakash Kapadia from Anived Portfolio. Please go ahead. Yeah. Thanks for the opportunity. Mohit, you know, in honey we had done couple of launches, Tulsi, Organic, Himalaya, Ashwagandha. What has the response been to some of those launches? You know, coming back to the immunity positioning of honey, you know, it is slightly different, as compared to a Chyawanprash. What are the challenges we are facing in terms of, you know, repeat purchase of honey? Because the positioning always has been, you know, replacement of sugar, weight loss, and, you know, not just immunity as compared to, you know, maybe Chyawanprash. Yeah, Prakash. On honey, you know, I think the acid test for all the launches is your market share increases. Like, at the time when Patanjali had launched Honey, we had lost out roughly around 1,000 basis points market share to Patanjali. This time around, when new players entered the market, we've only strengthened our position on back of all the NPDs and pivoting the brand to immunity during the COVID period, when the immunity-driven brands were doing so well and the category was growing out of proportion. Therefore, all those initiatives and NPDs have really helped us to ramp up our market share. Our market shares are all-time high, almost in the range of around 50%+, as far as honey is concerned. All lost ground at the time of Patanjali has been made good by Dabur Honey on the campaign of immunity that we did. You're right, immunity angle is different on honey as compared to Chyawanprash. Because honey is an adjunct to other products offering immunity, and it increases the efficacy of anything that you have it with, whether it's fruits or medicines, et cetera. Absorption becomes much easier, and it's a much better sugar to have as compared to sucrose, because it is fructose, and it aids in slimming and multiple other benefits. During COVID, because immunity was so salient, we had pivoted all communication towards COVID contextual communication. Now we are going back to our old positioning, which is all about slimming and all about sugar replacement. You will see honey now coming out with positioning, which is gonna be sugar replacement and telling consumers that it's better to use good sugar, which is like honey, and not use sucrose, because that impacts your glycemic index levels, et cetera. That said, all the NPDs have done very well. By the way, our e-commerce NPDs of Himalayan honey and are doing well. Tulsi and Ashwagandha were contextual, so therefore now the context of COVID is not there, so therefore they are not doing very well. They were there at the times when Tulsi and Ashwagandha were doing well, and that's why we launched it, and the offtake has been good. We've not taken back any stock. That was good. We've reduced the production of these two variants. That said, other value-added variants of honey are doing exceedingly well for us. Honey, as we speak in the quarter, has gained 190 basis points market share. The new player who'd entered the honey market has also seen a reduction of market share to half of the peak levels that he had got. All the products are actually stuck on the shelves for them and have all crystallized due to offtakes being low. We are in a very good space as far as honey is concerned. I must tell you, while that said, all is not great because there was too much of activity which happened on honey during the COVID period. Stocking levels have gone up, both at the retailer level, SDRs have gone up, and also at the consumer pantry level, from the data that we see. Consumers have purchased buy one get one free. Instead of one bottle, they are now saddled with two-bottle stock. There is a category decline that is very sharp post-COVID, but we see it stabilizing over a period of one year as the activity actually gets reduced. The season is almost approaching and we will see our market shares only go up from here. Right. These newer products would be 5%-7% of our overall honey sales or could be more than double-digit? No, no, they will be less than 5%. They'll be less than 5% of our overall turnover. Right. Secondly, on, you know, Réal Vitamin Boost range, is it targeted towards kids? How is the pricing there? You know, any price increases we've taken in the juice portfolio? Yeah. Juice, we've taken around 3%-4% price increases because that was the extent of inflation. We've actually taken price increase of more than what the inflation was in the fruit juices. The real inflation of food, juices, and drinks is gonna pick up now. Therefore, the mango pulp has become expensive, and therefore, that's the time. We've taken a 3%-4% preemptive price increases in juices. On the vitamin range, the rationale for launching it is essentially for South India. What we see is that smaller players like Tropicana and ITC are putting a lot of pricing pressure onto us on the modern trade. Our regular brand, if we match up the schemes and play a very competitive activity, then it infiltrates from modern trade onto our GT. We want to segregate the mix that we sell in modern trade versus what we sell in GT. In GT, we are selling our regular variants, and in modern trade, we'll be wanting to sell our masala juices in the north of India. Because the masala palette is different for south, we are pivoting the vitamin range to the south. The vitamin range in terms of MRP will be expensive. Our gross margins there will be ahead of our average by around 300-400 basis points, and that will be discounting to gain market shares in modern trade. Like I alluded to before, so we need to have horses for courses, not, one strategy works well for all channels. This is a channel-wide strategy. This vitamin strategy is more for modern trade for us, and it's a channel-wide, strategy that we are pursuing there for modern trade to gain shares. Understood. That is really helpful. Lastly, you know, on the raw material cost increase, you know, if you could segregate the mix impact because, you know, juices had a much higher contribution in the unlock this year after two years of COVID and the actual raw material pressure, because, you know, juices have grown far, far better, and the mix is much higher. If you have it ready, it'll be nice. I think, Prakash, maybe, you know, out of this 220 basis points contraction in GC, half of it is coming mainly because of the mix impact in this quarter. Understood. That's very helpful. Almost 100 basis. Yeah. Understood. Yeah. It's roughly half is what you're saying. It's rebalancing that. Yeah. Understood. Thank you. Thank you so much. Thank you. Thank you. Our next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, Mohit and team. Thanks for the opportunity. Indeed, it was a good performance. What I can see that the healthcare expectedly has come down. Just let me step back and say that the loss of healthcare business, which has climbed up to almost, say around 35%, which has now come down to 25%. I think you're doing a lot of product launches with the new product, and you're also expanding the hair oil and even juices portfolio. Just one quick question on that. In the medium to long term, what are the core businesses you think the growth will happen? Basically on the power brands. Yeah. Shirish, power brand strategy remains intact, and there is no change of course on the power brand strategy. We've got around eight power brands in the company, and we want to strengthen each one of those eight power brands and scale them up. Those are the core areas of business where we are investing funds, and we are augmenting capacity, and we are increasing our distribution, and we are taking celebrities and connecting with the millennials on e-commerce across our world. We are ring-fencing all our efforts to these eight power brands and increasing scale. One by one, Amla, which is a core brand and a flanker brand strategy that is continuing. Then there is Dabur Red core brand. Flanker brand is continuing again with Dabur Herbal and with the peripherals, Miswak brand. Réal is our core brand. That is where we are continuing. Chyawanprash, Honey, those are the extensions that you guys are seeing. Pudin Hara, Lal Tail, and Honitus. Those are the power brands that will continue to receive focus from the company, and the extensions will also happen, innovations will also happen around the same. We are not planning to introduce any new brand because we have so many brands, and we want to just focus our energies, effort, and packaging, manufacturing, all efforts around these brands. That's what one is trying to do in terms of the power brand strategy. Yeah, that's correct. This time you have not spoken anything on the distribution, so what kind of efforts which you're taking in terms of village coverage expansion? I think last time you mentioned that we are targeting to reach 90,000. Yeah. No. Village coverage this year the target is to reach to 100,000 villages. You know that we have a Yoddha program, and we have already appointed around 10,000 Yoddhas as we speak, and they've contributed to around INR 20 crore of business. These Yoddhas are continuously being converted into sub-stockists for us, who will eventually be converted into stockists and super stockists depending upon the turnover. That is going on at a fast pace. For rural sales promoters, we have added more rural sales promoters and feet on street, and now we are trying to bring the transparency to how they are doing transactions and giving them handheld terminals, which was earlier limited to our sub-stockists. Now we have sales promoters with the sub-stockists who is doing the last mile sale. We are trying to bring transparency and visibility to that data. That's on digitization, which is happening on the rural end. In the urban end, we are increasing our number of outlets from, you know, 1.2 million, and this year the target is to reach up to around 1.4 million. We are trending well. 1.35 million we've already done in the quarter, and from 1.35 million we should be going up to around 1.4 million by end of the year. That is on the urban growth that we'll be seeing. In addition to that, even 6,000 additional chemist outlets have been added, and we are doing engagement program with the chemists in addition to the grocery and the rural sub-stockists also. That's also been doing well. To improve the efficiency, we used to sell around four SKUs in our outlets. Now we find four is too low, so we are trying to work on MSLs, which is must-stock list for every outlet, and working on heuristics and push lists in our handheld terminals to ensure that guys conform to our picture of success that we've decided. Every conformity done by a sales officer is rewarded. There is an intelligent control tower which is there by which we are doing all the monitoring of the sales force as they do the conformance to the picture of success. That's really helpful. When I visited recently to Nepal, and in that I have heard that we are doing a significant investment. Is it that you are expanding the Hetauda base, or there is some more factories you're putting in? Sorry, expanding the? Hetauda factory base. You know, in Nepal our business, it's a reflection of what the India business does. It's an extension of India. It's a SAARC strategy. It's very similar to what India strategy, unlike the Middle East or North America. It's trying to mirror what India is doing. Juices is around 60%-70% of the overall turnover, and we are by far the market leaders in the juices category. Like in India, we've increased the total addressable market of juices to drinks. Even we are doing the same thing in Nepal. India was more led by what competition is doing, and we are number two, but in Nepal we are number one. We are in the process of putting a PET line there. Therefore we'll be the first company to have introduced juices in PET line after Tetra Pak, so that'll be a very big leg up in the Nepal business. Also, we've introduced INR 20 price points there also, which are doing exceedingly well for us. In the healthcare and the personal care space, we are kind of identifying the gaps and plugging those white spaces as we speak, even in healthcare and personal care. Our business is doing very well. We've grown by 30% in Nepal, and that is coming on back of a good growth of last year also, and our market shares are steadily increasing across our categories there. We've got a very good team in place in Nepal also doing a good job there. This investment, what we are doing in terms of, is going to be next four to five years? Yes, absolutely. In the long term. Nepal is also used as an outsourcing hub for us in terms of juices. Therefore, as the juice business expands in India, we are putting up manufacturing capacities in Nepal so that becomes a larger feeder market for us from Nepal to India too. Okay. That's really helpful. Just last question. V.V. promoters of the company has bought a lion's share or a promoter share in the Eveready. Is there any plans that we want to merge the distribution? Not really. Gagan, Madhu, you wanna comment? Yeah. Shirish, that is their personal investment. It has nothing to do with Dabur India. Sure. Thank you. Thank you, Mohit. Thank you. Thank you, Shirish. Thank you. The next question is from the line of Jay Doshi from Kotak Securities. Please go ahead. Hi. Thanks for the opportunity. My question is on, you know, drinks portfolio. What is the kind of growth trajectory you expect based on the success you've seen so far? I know the category is very large. How should we think about the growth, you know, for overall beverages portfolio, given that you've also entered milkshakes and seen some early success there? We are limited by our capacities. We are bursting at the seams in terms of demand, and the supply is not able to keep pace with the demand that we had in the season. We were caught napping, and we did not have capacity. Whatever we could supply has been absorbed by the market. We've increased our outsourcing from something like around 3 lakh to around 7 lakh-10 lakh. Three times outsourcing our capacity, in which we were giving margins which are much higher than what you know our cost to us internally is concerned. We know that in the make or buy, it's better to make, but we had to buy because the capacities were short, and we want to plug in those gaps. We are not supplying in many markets because of sheer shortage. We are in the process of putting up CapExes. In the current board meeting also we got a CapEx approved of putting up additional line in Indore. At other places also. You know, I think we should be growing at around above 20%-30% ahead of the market. The market is growing at 30%-35% because out-of-home consumption is picked up. We've grown by 50%. We've gained 330 basis points market share in overall beverages to reach up to around 62.7% market share. I think the right way to look at is that we are hardly doing around 2.5% in drinks market, so that's what we got to ramp up. There's an ocean of opportunity, you know, staring at us, and we have to quickly put up CapExes and, you know, try to capitalize on the opportunity here. Understood. What is your distribution for juices portfolio today, in terms of outlets, and what is it for drinks? Yeah. In terms of juices, we reach out to roughly around 2 lakh-2.5 lakh outlets. When it comes to drinks, the distribution is quite different. When we entered into the drinks category, we said that first we'll try to capitalize on our existing footprint of distribution of juices. First we get that, and before we get into the drinks. As we speak, in the quarter one, we've already reached up to around 234,000 outlets for drinks also, which is our numeric distribution per Nielsen direct and indirect. The drinks market is a little different in terms of distribution because the market size is so huge, and it gets into rural, and it gets into highways and it follows the soft drinks market actually. What we've done is we put up exclusive distribution infrastructure for drinks. Earlier it was limited to metros, but now we've gone beyond metros into smaller towns also, and we've appointed 131 exclusive super stockists, which have generated INR 12 crore additional business. We've put in exclusive 20 rural sales promoters. We've put in around 530 FADs, our dealers, which are called food and drinks outlets. We've added roughly around 10,000 super stockists as we speak, plus Yoddha's 3,000 additional in the current quarter. We've introduced 45 new highway routes because that is a huge drink consumption better than what we said. We've taken a person exclusively for drinks distribution from Coca-Cola who's leading our distribution vertical, and that's what will provide the focus. All this has led us to a weighted distribution of drinks up to around 11% only, 11%, and a numeric distribution of roughly around 6.5%. That's the, you know, growth that we've done in the quarter because that was the season. This growth will continue. We are putting in investments in the drinks market for distribution. This is over and above 2.5 lakhs of the juices. This will grow. Exclusive infrastructure for juices is being. Earlier we had exclusive infrastructure for HPC, for healthcare, for Ayurvedic and for foods. Now there will be drinks also which will be added on to this. A final quick one. Is profitability going to be very different from the rest of the beverages portfolio given the cost of distribution? For drinks, it's a little margin dilutive, but this is a scale business. The more you scale up the business, the more leverage comes at the level of the operating profit. Optically, when you look at the gross margin, gross margin may look lower, but when you go down to the level of operating margin, operating margins are higher. Because the investments required in the drinks market is only at the level of infrastructure and not at the level of advertising so much, and it's a scale business. As you scale up the business, the business becomes more and more profitable. It's incremental marginal incremental profits that you see over and above the turnover that we already have in the juices business. If you look at our segment profitability, which we also published, you will see our foods and beverages profitability has inched up, both in terms of percentage and absolute. INR 60 crore of additional profit is what we've added in the quarter only on account of the incremental business that we are getting out of drinks. It's higher margins than previous years for foods. Understood. That's very helpful. Thank you so much. Thank you. The next question is from the line of Swati Jhunjhunwala from VT Capital. Please go ahead. Yes. Thank you for taking my question. Regarding the margin again, you said that commodity softening will help in maintaining the margin and protecting the margin. What commodities do you think are majorly impacting you right now? Like, the easing in which commodity will, you know, be the most beneficial for you? There's only one short answer to your question. The most important commodity is energy prices, basically petroleum price. Petroleum prices are the ones which are impacting 50% of the RMPM cost. Entire packaging cost is impacted by, you know, the petroleum prices, which was at INR 100 + and now a little lower. That is one. Plus there are derivatives of petroleum which are impacting our hair oil business, our shampoo business, our SLES business, our specialty chemical business. I think the most important is, you know, power and fuel. All that is getting impacted by the petroleum prices. The number two, if you ask me, is commodity. Honey prices are what is impacting our business big time. The third in priority would be, herbs and spices is what is impacting our business. That's what it is. Okay. Thank you so much. Thank you. Next question is from the line of Shubham Thorat from Perpetual Investments. Please go ahead. Thank you for taking my question. One question from my end. Healthcare, I understood that. Your voice is breaking. I'm sorry to interrupt. We are unable to hear you clearly. May I request you to please use the handset or come in a little. Hello. Thank you. Is it better now? Yes. My question is related to our healthcare business. I understood that this quarter's performance was little subdued due to high base COVID demand. How do you see this healthcare business moving forward, outlook on moving forward? Yeah. Shubham, our healthcare business is navigating a very high pace. First quarter last year was a COVID quarter, and last year saw two or three waves of COVID. The full year last year was on a very high pace. While the quarter was muted in terms of healthcare declining at -20%, but the CAGR, if you see, it's around 10% for us, and we'll continue at that 10% rate of CAGR, and I don't see any reduction in that CAGR. But if you ask me, is the uphill mound of last year over? I would say not so, because we are getting into winters, and in winters also we had a high base of COVID contextual portfolio selling, and also in the month of February when there was a second Omicron variant, there also we had a high base of healthcare. Healthcare in the current year will be a little muted. CAGR will be pretty robust. Thank you so much. I wish you all the best. Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to Ms. Gagan Ahluwalia for closing comments. Thank you, and over to you, ma'am. Hi, Shubham. Thank you everyone for your participation in this conference call. The webcast, audio recording and transcript of this call will be available on our website soon. Please stay safe and healthy. Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines. Thank you.