Ladies and gentlemen, good day and welcome to the Q2 Results Investors 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 morning, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this conference call pertaining to results for the quarter and half year ended September 30, 2022. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer, Dabur India Limited, Mr. Adarsh Sharma, Chief Operating Officer, Mr. Ankush Jain, Chief Financial Officer, Mr. N. Krishnan, VP Finance, Mr. Ashok Jain, EVP Finance and Company Secretary. We will start with an overview of the company's performance by Mr. Mohit Malhotra followed by a Q&A session. Over to you, Mohit. Thank you, ma'am. Good morning, ladies and gentlemen. A very happy Diwali and season's greetings to everyone. Thank you for joining us today amidst the festive season. The operating environment continues to be very challenging. We are seeing unprecedented inflation across the world with 40-year highs in U.S., U.K. and other markets. India is also dealing. Sorry to interrupt you, sir. interrupt you, sir. This is Aman here. I'm sorry to interrupt you. Ladies and gentlemen, we would request you all to please remain connected while we check the line for the management. Ladies and gentlemen, thank you for patiently waiting. We have the management line reconnected. Over to you, sir. Please go ahead. Thank you, Aman. Apologies, ladies and gentlemen, for the glitch. Good morning to everyone. A very happy Diwali and season greetings to everyone. Thank you for joining us today amidst the festive season. The operating environment continues to be challenging. We are seeing unprecedented inflation across the world with 40-year highs in U.S., U.K. and other markets. India is also reeling under pressure of inflation, which is visible in the CPI being higher than the MPC comfort level target of around 6% for the 9th month in a row. Central banks across the world are raising interest rates to curb inflation, but this is impacting consumption and also leading to currency devaluations across the world in geographies. As a result, we are seeing GDP growth cuts across the board. In such an environment, Dabur's consolidated revenue from operations grew by 6% with a constant currency growth of 8.5%. India business grew by 7%. The three-year CAGR for revenue of India business is at around 12%, backed by double digits three year CAGR in all the three verticals of businesses, which is healthcare, HPC and foods. On account of continued unprecedented material inflation, our gross margin contracted by 300 BPS plus, but this was partially offset by price increases and saving initiatives. This led to operating margin declining by around 190 BPS to touch 20.1% in quarter two financial year 2023. Consolidated profit after tax registered a decline of 2.8% to touch INR 490 crores during the quarter. In terms of the categories, food and beverage business posted a stellar growth of 30%. The beverage business was on a strong trajectory and outperformed the industry significantly, with our market shares in JNN category increasing by 410 BPS. This was further bolstered by strong traction in our food, drinks, and milkshake portfolio, which has helped us to expand our total addressable market substantially. The food business also performed well with a growth of 21%. It is also my pleasure to inform you that we have signed a definitive agreement to acquire 51% shareholding of Badshah Masala Private Limited. Badshah is one of the leading players in the spices and condiments category, with major presence in Gujarat, Maharashtra, and Telangana. The acquisition is in line with our strategic intent to expand our foods business to INR 500 crores in three years' time and to expand into adjacent categories. It also enables our entry into INR 25,000 crore branded spices and seasonings market in India. We intend to leverage our market presence in both domestic and international markets to provide a further fillip to our foods business. Coming to the HPC portfolio, we recorded a 6.3% growth on a high base of 17%, leading to a three year CAGR of 11%. Toothpaste portfolio grew by 11.2% during this quarter, and our market share in toothpaste segment increased by 10 basis points. Home care reported a growth of 21%, driven by robust double-digit growth across Odonil and Sanifresh franchises. Odonil recorded an increase of 350 basis points in market share in liquid air freshener category, and Odomos increased its market share by 330 basis points. Shampoo also recorded a 9% growth with increase in market share of 40 basis points. Hair oil posted a 2% growth in the quarter, impacted by category declining by 5.7% in volume. Our three year CAGR is a healthy 7% in the hair oils category. Our market share in hair oils improved by 20 basis points. The healthcare portfolio is lapping over a 2-year base of exponential growth due to COVID onset. On the three year CAGR basis, healthcare continues to be on a trend of around 10% CAGR. Our market share in Chyawanprash increased by 120 basis points and in honey increased by 40 basis points. The new entrants in honey category saw significant shrinkage in market share by around 200 basis points across both traditional trades and modern trades. Digestive category saw flat growth on high base of 22.7%. Under OTC and ethical business, Honitus and Shilajit reported strong growth. Among channels, e-commerce was a standout performer with a growth of 50% and now contributes to around 9% of our revenue. Modern trade also saw a double-digit growth during the quarter. International business recorded a constant currency growth of 12% on a high base of 23% last year. Sub-Saharan Africa business grew by 18%, and SAARC business clocked a double-digit growth. While Egypt and Turkey businesses reported robust double-digit growth in constant currency terms, they were impacted by severe currency devaluations, leading to translation losses in India. Overall, in spite of weak macroeconomic environment, we continue to drive our business aggressively and have gained market shares across 95% of our portfolio. Going forward, we expect the quantum of inflation to moderate on account of high inflation in the bases. While current demand remains weak, a strong festive season, near normal monsoon, a good harvest, and MSP increases should enable a recovery in rural in the near term. Urban recovery will continue to be driven by revival of economy, softening of inflation, and buoyancy in new-age channels. As for Dabur, we will continue to focus on gaining market share, growing ahead of the industry on back of strong strength of our power brands, distribution coverage, innovation, cost optimization, efficiency enhancement initiatives. With this, I bring my address to a close and open the session to Q&A. Thank you very much. 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 Nuvama Institutional Equities. Please go ahead. Yeah, thanks. My first question is on skin and salon. On a year-over-year basis, I understand a high base was there because of sanitizer. On a three year basis, 1.1% is one of the lowest growth within your own categories. Is there any shift in consumer behavior towards other products, other brands? See, Nielsen market share data, we know doesn't always capture the true trends. Second related question is on sanitary napkins. Will this be more of an e-commerce play? Because this is a very tough category, and we already have entrenched brands also here. Yeah. Right. Abneesh, first thing on skin and salon, we were lapping over very high bases. That's the reason why the growth of skin and salon is negative 5%, which is there, and it contains the sanitizer piece, like you rightly noted. I don't think there's anything structurally which is wrong in skin and salon except for that discretionary product consumption, it has still not reached the pre-COVID level, so it is just taking some time. That said, we are on an agenda to taking market share from local players. Local players are actually very strong. We've seen high price increases in the skincare to a tune of roughly around 8-9%, whereas some local players have not taken those price increases. There is a little pushback coming from the consumer in terms of offtake. I think as advertising begins in skincare, I think the business should trend well. Just to tell you on the initiatives that we've taken in skincare, we've revamped our entire Gulabari portfolio, and with the onset of winters, there'll be a little bit pipelining also that we've put in place. In winters, we should see very good growth coming on Gulabari on back of consumer promotions and new packaging revamp that we have done. Even in the fem business, there is a big revamp which is happening. On the sanitary napkin space, this is essentially gonna be e-commerce space. We will test the market as to how it fares before we roll it out to modern trade, like we do with most of our new products. Sure. Thanks, sir. Related question. In last three years, Dabur has hugely diversified its portfolio with lot of the products on e-commerce. Which ones are successful? When you say e-commerce is 9% of your sales, how much is coming from the products which have been launched in the last three years? Yeah. E-commerce is doing very well for us, as, in the current quarter also, we've grown by roughly around 50% in e-commerce. We had some structural issues with Amazon, et cetera, changing their partner and supply chain, Cloudtail getting shifted to multiple other partners now, but I think that is all behind us. All the different verticals of e-commerce are doing well, whether it's the marketplace or the grocery verticals or it is the pharmacy verticals. All of them are doing exceedingly well. Plus, we've put in a separate infrastructure and a business head for e-commerce, and we are monitoring the business. Quarter on quarter, our business is trending up. As you can see that it's already 9%. Around four years back, this used to be around 2% to 3%. Now, this has become a cradle for all the innovations for us. Whenever we are launching a new concept or a new product, we are first testing it out on e-commerce because the cost of entry is very low and not significant investments are required on e-commerce. We use digital marketing to create demand. On platform demand generation is pretty economical as compared to the mass market. The products which have done really well for us in e-commerce, our baby care range has done exceedingly well for us, and apple cider vinegar, which has done very well. We have other products like I think most of the other products in juices and drinks have done exceedingly well for us. Dabur- Our edible oils are doing well. Shilajit, new launches and variants have done very well. The new product contribution on e-commerce is already 11%, for us. I think most of the products which we launched on e-commerce are doing quite well. Under the Réal chia seeds and the flax seeds, both of them are doing well. As a matter of fact, the new launch of peanut butter is now trending as a top seller on e-commerce, ahead of Pintola and other established players. One question we grapple with is, you mentioned in Chyawanprash, the new entrant has lost market share on e-commerce, et cetera, and modern trade. That same question I had is because you are also entering late in most of these categories, initial sales is there because of either advertising or just consumers just wanting to sample all the pricing, whatever. You have confidence on these scaling up for three to four years, and will these be taken to the general trade also? Yeah. Let me first address your first question. The new entrant what I meant was not Chyawanprash, it was honey. In honey, there was a quick scale up happened to around 5% to 6% market share levels in modern trade. But there has been a drastic fall in market share that we have seen of around 200 to 300 basis points. Moreover, the NMR claim on back of which they've actually gained market share and so much of euphoria was created in the market space has all died down now. The NMR claim is also back, and now they've launched a new variant with the sub-branding of Active and no more claiming the NMR. I am suspicious on some optimization of the formulation also would have happened by the new player. I think it is the competency and the core competency not being there in these categories, and that's why the new entrant didn't come in. As far as we are concerned on e-commerce, we launched a lot of NPDs wherever we have a right to win. When I say we have a right to win, we have a core capability and a competency to create those products, and we compete with no established and a very big organized player. We generally compete with the digital-first players, and digital-first players don't have a wherewithal to scale the business in the general trade or in the brick-and-mortar channels, where we have a strength, and we can scale up. We are not launching in the areas where we have that strength. We are launching it on their turf, which is digitally first. If we do well in that digitally first space, then the chances of our success in a turf where we are strong is very positive, which is modern trade and in GT, which will come later for us. I don't think there is a problem. That said, baby care range is being scaled up to modern trade, and the other variants like apple cider vinegar also being scaled up to modern trade. In modern trade also, we are not going to en masse modern trade. We are going to very selective modern trade chains and taking promoters to ensure that the progress of our NPD is very slow and gradual. It is not that we give a target of doing INR 10 crore or INR 20 crore or 2% market share targets to our team. We are talking about a share of shelf and share of market in the outlets that we are putting in. It's very micro-marketing that we guys are doing with our NPDs. That way, I don't think we are actually worried because this is a very channel-wise and a segmented launch that we guys are following. Sure. My second question is on Badshah Masala. After 60 years, this brand is around INR 200-INR 200 crore size. Which means in branded masala, it's around 1% market share. What is the expectation of scale-up here over a three to four years timeframe, given in 60 years it is around INR 200 crores? Second is of course, lot of the listed players are also having very aggressive plans here. If you could talk about the margin profile versus your standalone margin. When you say cash EPS neutral in first year and EPS accretive in second year, what do you mean by that? Right. Okay, I'll answer the first question first. It's a very old brand, so I think the answer lies in your question. I think there is so much of legacy and heritage in this brand. 64 year old brand, it's almost like Dabur, which is a 135 year old entity, which establishes a lot of trust and faith in the consumer franchise which is buying it. To your point on market share, yes, they are around 4% to 5% market share in their core markets. They're basically present in Gujarat, Maharashtra and Telangana, where they are the good number two player in the market with four to five. If you look at this whole masala and the condiment market, the size of the market is very scalable and sizable, around INR 25,000 crore, as compared to categories like oral care or hair oils, where we operate to the INR 10,000 crore market sizes, and in juices, where we operate around INR 1,500 to 2,000 crore market sizes. This is a very lucrative large market. I think the first pivot of our winning is that the market sizes where we enter should be scalable enough and there should be enough room for us to grow. With that kind of a market size, there is room for multiple organized players to come in and gain market shares. This market is essentially unorganized, so there's a lot of room to get converted from unorganized to organized, from organized also to big branded players, so enough room for everybody to play. This is a very should I say state-by-state market growth which one needs to follow. We are starting from Maharashtra and Gujarat, and then we will extend this portfolio going forward. We feel that there is a brand equity here which can be harnessed and can be plowed. As far as the growth not being there in past decade or so, around 4% to 5% CAGR, I think there were issues within the family, and that's why the growth were not there. The family was a little divided on the investments to be put behind the brand, and there hardly was any investment put behind the brand. The jingle of Badshah Masala still resonates very well. As far as margins are concerned, to your second point, Abneesh, the margins are accretive, whether it's a gross margin or operating margin, is accretive to our foods portfolio margins. This will only add on and improve our margins in the food segment where we guys operate with essentially a beverage portfolio. We have a vision to extend our beverage portfolio to a food and beverage portfolio, and this is an attempt in that direction to become a completely food and beverage company rather than being only a beverage play. We have a 70% market share in the beverage play, but we want to extend this to the food segment. As far as cash EPS is concerned, do you wanna take up, Sanketh? Yeah, Abneesh Roy. No, thanks for that question. What we mean by this is that profit after tax, net of the interest opportunity cost, will be accretive from the first two years. You know, without taking into account the brand amortization, which will come subsequently. Cash EPS will definitely be accretive in first two years. Yeah. Going forward. Mohit, on the question of the distribution scale-up, because you said only few states Badshah is present, will your plan be to first focus on these states, or you want to first take pan-India presence? No, not really. We have a very focused strategy on this. In first phase we will focus on Gujarat, Maharashtra and Telangana. That is the key core states. In the second phase, we will focus on the adjoining adjacent states, which is Rajasthan. Subsequently, we will look at scaling it up to all India, where Dabur has a presence. First, that is the geography-wise play. As far as the distribution play is concerned, we have got a distribution to roughly around 80,000 outlets, whereas Dabur has a much huger scale of distribution, whether it's direct or it's indirect, in both urban and rural. I think that within these states will be strengthened before we move on to the adjacent states and then subsequently to rest of India. For rest of India, as you know, this is very specific to the palate likings and preference driven category. We will have to create a backend and create flavors which are in tune with the preferences and the tastes of the consumers in other geographies also. That scale-up will happen in due course of time. It's all from my side. Thank you. Thank you. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, Mohit and team. Good morning. Thanks for the opportunity and happy Diwali to you and the team. Just two questions which is burning in my mind. During the COVID period, our healthcare business has moved from almost 23% to 24% to almost 40% when I look at quarter three last year. Now, clearly, healthcare tailwinds are not there and the product decline is already there. Just wanted to your thought that how we should look at this business the rest of the year? Yeah. Shirish, pre-COVID, the business was roughly around 30% contribution to our overall business, and in healthcare. Healthcare obviously got a growth spurt of around 70% during the two years of COVID, year one and year two. Post that, there's been a rebalancing of portfolio which was expected to happen and which is happening. One thing very heartening for us is that the penetration levels of these healthcare categories has gone up to the pre-COVID levels. If you look at the business, and this is the off-season that you're looking at now, in season we will be back to 30% contributions in this business. If you look at the food business also, that went down to something like around 15% or even lesser than that, and it's back to 20% levels. Even the HPC business, which was, you know, more discretionary nature, where that went down to around 40% levels, is back to 50% levels. It's a rebalancing of portfolio mix which has happened, and it's gonna be back to the pre-COVID levels. Which will be 30% of, healthcare, foods being around 20%, HPC is around 50%, and that's what we expected to be going forward also. The good thing is, because of the catalytic impact of COVID, now some penetration levels in these categories have kind of stabilized, and they are higher than the pre-COVID levels. During the COVID period, we've actually gained sustainable market share. If you look at Chyawanprash, I think year on year in past three years, we've gained something like around, more than 1,500 BPS overall in these three years. We've actually strengthened our market leadership in Chyawanprash. We've strengthened our market leadership in honey. In honey, pre-COVID, we lost to Patanjali, but post-COVID, we've regained the entire ground, and now our market share is in the range of around 50% in honey also. Despite newer players coming in, because the whole market opened up and there was a growth, we've not seen any slack in terms of our market share. As a leader, we are growing this category as a leader and continuously launching newer formats, newer innovations, packaging revamps, et cetera, like you've seen in honey. We've extended ourselves into organic honey. We've extended ourselves into squeezy pack. Now we are launching pet bottles where we've gone into Honey Tasties. We'll be launching a honey tea and honey for cough and cold. There are separate multiple pivots and opportunities of growth which actually opened up post-COVID for us. Is the case in Chyawanprash. In Chyawanprash also we've seen Chyawanprash in powder form coming in, Chyawanprash diabetic coming up, Chyawanprash jaggery-based coming in. Therefore it just opened up the whole market for us. That's really helpful, Mohit. My second question on the beverages part. Now, we have a very strong strategy and we are now expanding and representing a larger market. If you can give me some data points that, when we had only one brand, which is Réal, and now we have beverages. What kind of distribution leg up which we have seen and what leg up will still continue next two to three years? Because I clearly see that the dairy beverages is growing upward of 25%. In that context, what we should estimate? I mean, this is purely from the modeling purposes I'm asking this question. I will request our business head of foods to actually answer this question. One second. Hi. In beverages, we are playing in juices and nectar category, and we had around 80% to 85% ND with a 90% WD. We have been able to expand and add about 1.5 lakh outlets from the pre-COVID level. Actually, during the COVID level, the distribution went down because of people staying indoors. With the drinks portfolio coming in, what is really happening, it is giving us legs to expand Réal into rural areas, into areas where we were not there, because earlier juices and nectar was primarily a urban-centric and a town class one centric brand. Now with the right price point and with the right packaging, we are really expanding our distribution into rural. We have created a whole super stockist network. We are going out to about 18,000 sub-stockists now. On back of that network, even the price points of 20, which is the Réal juices and nectar price point, that is also finding a lot of headroom for distribution expansion. We are already there in about 3 lakh outlets as the drinks business is concerned, which we have created. We are poised to be above about a 200 crore portfolio in drinks, which was launched a couple of years back. There is a huge distribution opportunity for us. Earlier when we were playing in the juices and nectar category, a premium category, we were limited to urban centers, and now we are expanding into new geographies, be it beyond north to other geographies like east, central, west and south, or be it beyond metros and class one towns to other town classes and rural markets. That's what the strategy is. Yeah. That's really helpful. Mohit, my last question on Badshah. In terms of channel mix, if you can help me, what is the channel mix in terms of modern trade, general trade? Second, if you can give me some broad saliency, how much Gujarat and Maharashtra market contributes to the overall sales? Right. Shirish, first, I think second question first, that's the easier one. Around 80% to 90% of the business comes from Gujarat, Maharashtra, and some places adjacent to Maharashtra in Andhra Pradesh and Telangana. Around 80% to 90% of the business happens from there. It's a very focused sort of a play which is there. In terms of channel mix, majority of the business is happening from GT, which is around 95%. E-commerce is almost zero. For Dabur, e-commerce is around 9%. I think this gives us a huge opportunity to make e-commerce at least 5% in a couple of years to come. Modern trade again is 3% for them, and for us modern trade is roughly around 10%. We'll scale up 3% to 10% and stage it up. There'll be a lot of leverage, which will happen with Dabur's infrastructure for Badshah. I think after a long time we have seen a very good acquisition. My sense is that you will turn around beyond our imagination. All the best to you and the team. Thank you. Right. Thank you for your kind words, and I wish you a very happy Diwali and season greetings. Thanks, Shirish. Thank you. Thank you. The next question is in the line of Arnab Mitra from Goldman Sachs. Please go ahead. Yeah, hi, Mohit and team, and congratulations on the acquisition. My first question is on the acquisition itself, that you've given some FY 2023 estimates of revenue and EBITDA if you were to derive it, which show the reasonably strong growth in FY 2023, 23% what that trend did in 22. How confident are you that the 23 numbers are reasonable and not very aggressive? Because you will probably not have much inputs to put in 23 itself. The second was on the margins. Once it comes into Dabur's fold, will the cost structure increase in the sense that you are a more, you will have more overheads and you have to put advertising? And will you be able to hold this 23% kind of EBITDA margin that you have? Right. As far as the numbers for the current year is concerned, we are well on the way to achieve those numbers. Six months have already elapsed, and we've already done more than around 50% of the numbers. I don't think there is any issue in terms of achieving those numbers. Arnab, as I told you before, that there was a little, you know, rift between the family, and that's why the investments were actually stopped before the whole sellout and this deal has actually happened, and that's why the growth was muted in the past. But I think now leveraging Dabur's infrastructure, et cetera, I don't think there is any impediment in terms of growing this business to the numbers that we've taken. We easily think that we should grow this business at a 20%+ CAGR over the next four to five years, and that is what is there as a game plan. The whole strategy has been created around achieving those numbers, whether it's a distribution strategy or it's investments or it is a channel mix, or it is a price pack architecture, or it is introducing new brands or variants, or extending geographies or creating new formulations. All that blueprint already has been created, and I think there'll be huge synergies. I don't think we will bolt on. We will take Badshah as a business, a standalone entity, because we've only acquired a 51% stake and the promoters of the company are still there. The promoter will be the managing director of the company, and we will want to get a lot of learning from the promoters. There will not be the overheads of Dabur which will be saddled onto Badshah. They will be running the company independently and, as a, with a board doing the governance of the company. On the board Dabur will have a majority stake, and we'll be running the company very prudently and, judiciously. I don't think there will be any overheads, which will come in because Dabur is acquiring that company. The professional talent will be actually seated in the board and, that we will do. In due course of time, that we will let you know as to who will be from the Dabur side. Most probably the finance and marketing and sales distribution will be people from the Dabur side. The owner will also be there to help us and guide us with the entire relationships which are existing there. Also on the purchasing process that they had, 50% of the raw materials that we purchase in herbs and spices common to Badshah. There'll be a lot of leverage and the scale benefits that we'll get in terms of procurement also. Sure. Thanks, Mohit, that's helpful. Just one add-on question to that. This acquisition of the balance 49% stake five years down the line, is it a option that you have and is it, is there a valuation that has already been decided on which that transaction will happen? Yeah, it is not an option. It's a compulsory acquisition that we will have to do at the end of five years, and that's the part of the SPA that we will be signing. It will be at the same multiple of revenue and EBITDA that we've acquired the 51% stake. At the end of five years, it will be on the same multiple of EBITDA and revenue. Got it. Just last question on this was the brand amortization, which I think you briefly mentioned. Would you be amortizing the entire brand over a period of time? Or if you could help us understand how much of amortization comes in from this? Yeah, sure, Arnab. I think this brand amortization will be valued and a fair value of the brand will be established at the time of acquisition. We expect this to be, you know, obviously amortized over a period of 10 years, which is in line with our accounting policy. The share of that will be approximately INR 40 to 50 crores, which will come to our P&L, which is a non-cash item. Understood. Thanks so much. One last question on margins. Overall, how do you see the margin pressures in 2H given your mix of commodities with current trends, and maybe pricing that you may have planned? That would be the last one from me. Sorry, I didn't understand, the margin pressure, is this in- For the overall Dabur consolidated business, how do you see it in the second half, given how commodities in your mix are trending right now? Therefore, the inflation in the current quarter has been around 10%, and we expect the inflation to abate a little bit to 6% levels as we are navigating a high basis of last year inflation. We expect inflation to be around 6% and the price increase benefit of 6% kicks in now. We expect the inflation to moderate in the coming quarters. With that, sequentially our margins should be better, but there will be some amount of margin erosion which can't be ruled out in this quarter and also in the next quarter. Only in the next fiscal year we will have a benefit, but sequentially, the margins will continuously become better as we go into the third quarter and the fourth quarter. Okay. Thanks so much, Mohit and team, and all the best. Thank you, Arnab Mitra. Thank you so much. Yeah. Thank you. Our next question is from the line of Harit Kapoor from Investec. Please go ahead. Yeah. Hi, good morning, team. Just had two questions. Firstly was on the gross margin again. You know, how much of this 300 basis points decline that's happened in the first half would you or 350 odd basis points decline that's happened in the first half in India, would you attribute to the inflation impact and how much would you kind of attribute it to mix? Because, you know, you've also seen, you know, health supplements and healthcare categories actually, you know, decline and foods actually grow at a faster pace. Harit. Out of this 350 odd basis points, 200 basis points would be purely because of inflation. Rest 100 basis points would be basically because of mix, and 50 basis points would be balance, 50 basis points would be basically because of some rebalancing in consumer promotions, you know, since we had to cut in. Broadly, these three factors are obviously 50 basis points. That said, we've actually mitigated this 350 bps erosion in the gross margin when it comes to operating margin. Operating margin fall is only 190 bps. I think that has come on back of some saving initiatives that we did in the first half, roughly around INR 40 crore. There has been obviously price increases which have happened. A lot of the leverage coming from S&M also has helped us to bridge this gap between 300 to 190. Great. That's very helpful. Second question was, you know, on these new product launches. It seems like the mode of launches are going to be, you know, starting from e-commerce, then moving to select modern trade, and then depending on the performance of the launches, once you kind of, you know, meet your action standards, then it goes into GT. Is this typically going to be the template that you'll use? It seems like you have over the last couple of years, but is this typically a template you're gonna use across new launches? If there are any exceptions, if you could kind of, you know, mention in the last two years, if you've done anything different, you know, whether you started with GT or started with MT. Just wanted a sense on that. Yeah. I think this is a good standard playbook that we've actually established for NPD, and this is also helping us conserve the investment which is going behind establishing a new product, because e-commerce is a little more economical channel wherein the investments are not huge. If you launch a lock, stock, barrel in a GT, the investments on the mass media, especially in the Hindi satellite, are very heavy, and it burns a hole in our pocket, especially with inflation being there, we can't afford that to do. E-commerce is a great platform to fly a test balloon, and it establishes. Moreover, the consumers who are shopping on e-commerce are also the ones who are you know early adopters, and these early adopters want to try the new brand. You know, it's working out well, and then we roll it out in MT and then followed by GT. I don't remember any exceptions which have actually happened. If at all, there are some exceptions, like in the MFD category, we've launched Vita there, but that's also in selective, open format outlets of GT, where we have actually rolled that out. Otherwise, we are following this playbook, which is, kind of working well for us. Okay. One last housekeeping question, if I may, is, you know, you mentioned 9% in e-commerce, so what would be MT now in terms of, you know, in terms of share? Around 10% for us. Yes. Great. Yeah, that's it for me. Thanks. Thank you. Our next question is from the line of Shrenik Bachhawat from LIC Mutual Fund. Please go ahead. Hi, sir. Thanks for the opportunity. My first question is, could you share the state-wise revenue share for Badshah as of now? Sorry, state-wise, revenue share. Revenue share divided in Maharashtra, Gujarat and Telangana. Yeah. One second. Exact numbers I'll just have to tell you. Rehan, you wanna mention? Maharashtra is around 35%, Gujarat is 40%, and Telangana is around 10%. 10% Telangana. Okay. Got it. Sir, what is the outlook on the ad spends for FY 23? Like, how will ad spends pan out for the second half? See, advertising spends for us have been muted. We cut back on advertising spends by around 20% plus in the second quarter. That is because the inflationary pressures were high. Some amount of optimization of advertising was required. Our overall advertising, A&P spends, which is advertising and promotion spends in the quarter have gone up by around 7%, so that is in line with our top line. There hasn't been any cut in the advertising and promotion. It is just moving resources from one bucket to the other. We've not advertised, but it all depends upon the channel mix where we sell. It depends on the competitive intensity and the demand situation. If a demand situation improves, we will put our money into advertising. If the demand situation is not improving and the categories continue to decline, then we have to fight for market shares and shelf shares in which the trade spends and the consumer spends become more important than the advertising spend. It's the situation is pretty in flux, so it depends upon how we maneuver those spends depending upon what competitive intensity that we face. I can't comment. That said, our overall spends are in the range of around 15% for us and will remain that much. Got it, sir. On the asset, on the new Indore plant, could you please share the asset terms expected on that plant and the revenue expectations in FY 25? Sorry, I didn't quite get that, Shrenik Bachhawat. Can you repeat the question? From the new Indore plant, the new CapEx that we are doing for INR 326 crore, what is the asset term expected in that plant? Sorry, what expected? Asset terms. Asset turns. Right. Indore plant, the new acquisition which we have done, sorry, new CapEx which we are planning, INR 325 crore, we are expecting around 3x asset turnover. Nine hundred odd crores turnover will come at the peak of it. It should be roughly 3x. Around INR 900 crore revenue should be achieved by FY 2026 or FY 2027? I think in the peak around between FY 2027 you can say, yeah. FY 27. Got it. Just to come back on the Badshah. Hello. Yeah, yeah, Shrenik Bachhawat. As you said that the market share is around 4%-5% for Badshah Masala, so that is in Maharashtra and Gujarat, right? That's right. Telangana would be much lower. That's right. It's in the geographies where they're present in Gujarat and Maharashtra. Telangana would be around 1-2% or The asset cover will be small, around 5% market share. Actually it's a 5% market share in the blended category. Got it. Okay, thank you so much. Thank you. Thank you, Shrenik Bachhawat. Thank you. Our next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Just wanted to kind of first understand on the rural recovery. You know, you remain optimistic. Would you say your confidence on rural recovery is higher versus what you shared in first half or sorry, first quarter? If yes, what could have driven that? Yeah. I don't know if I've been very optimistic. Not really so. I think what's happening is, Avi, that rural for Dabur, as you know, was for past six quarters always trending ahead of urban. This is the first quarter where we've seen rural lagging behind urban, whereas the category indicators which are the, you know, early indicators that we get that rural was lagging. But Dabur has actually caught on back of a lot of infrastructure that we've put in place in terms of appointing Yodhas, 10,000 Yodhas, which is actually contributing to around INR 20 crore of our sales also. Our village reach has actually gone up to 100,000. We did not see the telltale signs of a little slowdown happening in rural while the category, FMCG category was all pointing at the same thing. This quarter we've seen our rural actually growing by only 1% and our urban business growing at around 6%. We have seen credit pressures, liquidity pressures coming in rural business and more so in the rural heartland of Dabur which is more UP and Bihar. UP and Bihar, the problem actually got exacerbated by, you know, the monsoon also being a little patchy in those areas. While all India the monsoon has been good, but in our specific areas where there's a huge reliance of rural in Bihar and UP for us, there the monsoon has been a little patchy. Therefore, a little slowdown is what we are seeing in credit pressure, liquidity pressure in these areas. It's very difficult for me to give you a definitive answer as to when will the rural recovery start, but I think the festive season is kind of brought in a little glimmer of hope in terms of our pipeline filling for healthcare product has been good in rural with Chyawanprash and honey kind of kicking in. In the month of September, we've actually seen some growth happening in our healthcare business here. That is what gives us a little optimistic hope that rural might just come back around. Perfect, sir. Got it. Very clear. The second question was on the margin front. You know, you did allude, you know, very clearly that, you know, sequentially, I think the worst of the gross margin pressures are behind us because inflation eases off and price increases flow through. Would it be fair to argue that second half EBITDA margin performance should also kind of mirror this in that sense? That's right. Absolutely. We talked about EBITDA margins only. EBITDA margins sequentially are better, and they will get better in the second half. We want to maintain our EBITDA and operating margins in the range of around 20%-21% for the whole year, which is what guidance also that we've given in the past. Perfect. Sir, lastly, for Badshah, you know, the acquisition. I understood the revenue synergies. You were kind of alluding to some, you know, synergies at the back end, but would you argue that the higher chunk of synergies is something that would be revenue driven, and margin is something that would not be the case? I mean, I guess that was the read-through, but I just wanted to kind of understand it better from you. Your perspective, was that understanding correct? Yeah. The synergies are actually immense in the business. First is obviously the distribution muscle of Dabur, especially in the rural, that is huge for us in whether it's a core market of Badshah or the non-core market of Badshah. I think rural village reach of Dabur is far better. In rural you sell small, low unit price point packs, and they don't have that, so we are putting up CapEx and increasing capacity for them also. That's one area of, you know, the space, in which we can expand. The non-urban, non-core urban markets where they are not present and Dabur is present, that is a second lever of synergy that we will get. The third leg of synergy is alternate channels like modern trade and e-commerce, where they are not present and, we people are present in. The third synergy. The fourth synergy is actually overheads. Because being a smaller business, their overheads are higher as compared to Dabur, which will leverage its existing infrastructure and on marginal cost basis we can just tag on this business to our business. That's the fourth. The fifth is the procurement efficiency which we buy on scale, and our systems, processes enable us to get better deals as compared to the verbal negotiations which happen in their case. The, you know, seventh is automation in the factories, which today they are manual operations. We will automate and therefore reduce manpower there. That is another level of synergy. Then obviously the manning and organization structure can also be leveraged. Then this will be reinvested back in advertising spends that they have been cutting back on and therefore creating margin. Whatever synergies we get, it's not that we will plow it back into the business in advertising because I think demand has to be created, and this category is a high decibel advertising category where we need to invest money in creating the demand. Got it, sir. This is very clear. Thank you very much, sir, and wish you a very happy Diwali in the prosperous year ahead. Thank you. Thank you. Thank you, Avi. Yeah. Thank you. Our next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity, sir. First question on Badshah. What's the reason for buying only 51% and not 100% to start with? You said you expect strong growth in revenue as well as profitability, so you will have to share some benefits of that with the promoter for the remaining 49%. The promoter will continue to remain the MD. Will you be able to drive all the changes you want to implement with the promoter still being in control? Yeah. First thing, Kunal, I think a good question. Obviously, you know, these deals happen over a period of time, and we have been in discussions and in talks with them for over five years now, and the deal has got consummated after a span of five years. There have been deliberations and discussions which have been happening with the promoter over a period of time in which we've established that chemistry connect also. I don't think they being the Managing Director on the board will hamper. Actually it will help us because we are getting into this new category. It is an alien category for us. We've not done the business like this, and we need to get that understanding on board. With the promoters being there, I think they will only handhold us because there are so many nuances that we will have to understand in this category. There is a stickiness in the relationships which is there as far as distribution and the channels is concerned. That stickiness of relationship also has to be harnessed and, with the Dabur's prowess in negotiations, so that will come very handy. Plus, creation of products involves a lot of understanding of the taste and preferences of the core markets. The promoters are Gujarati, they understand the taste palette so well of the Gujarati consumer. Therefore extending the product, creating new variants, looking at the market, so we can provide the analysis and they can provide the real, you know, sensory sense, or the taste of the local consumer. A lot of learning has to come from them. That's why, A, in a sense the promoters would not sell out a company if we were to acquire 100%, they would not agree to that. That's one. Number two, a lot of learning has to come from the promoters and they will handhold us. Plus it will take us decades of time to understand the company. If a part of that benefit will go to the promoters over a period of five years, we are okay with that. That's the way the deals happen, which are more win-win relationships rather than a one-way deal. Just to add to that, the team is going to, you know, manage the business along with the managing director, and most of the members of that will be nominated by Dabur. We expect that all the changes and synergies that we want to capture, we will not have any issue taking them forward. Understood. That's very clear. My second and last question, I just wanted to understand, how does the reduced advertisement spends impact the strength of the brands? Like, we've seen this happening across the board. All companies have lowered ad spends. So like besides the gross margin pressure, is there anything structurally which has changed, like say television, digital dynamics, because of which, the ad spends have been lowered? How does it impact the business in the like longer term, like reduced ad, advertisement spends? Sorry, Kunal, there was a lot of noise in the conversation. We couldn't hear you. Could you repeat? What I wanted to understand was, the reduced advertisement spends, how does it impact the brands in the longer term? I mean, I understand that in the short term it is gross margin pressure which is resulting in the cuts in ad spend. The question is the reduced A&P spend, how does it impact demand in the long term for Dabur? This is specifically for Dabur. Though in the short term, you know, the team, they understand that, there are pressures and therefore A&P is being reduced. Right. Kunal. Sorry, I couldn't understand the question. There was disturbance. You know, as far as we are concerned, the acid test of a brand's growth is market share gain in volume and value, and more so in volume, and that's what we are trending. As you know, 95% of the portfolio we guys are gaining market share. Whether you gain market share through advertising, pull creation or through pushing the product and the consumer actually uses it, that's the acid test. We've been gaining market share and strengthening our position in the marketplace. As the situation warrants, the investment moves into that particular sphere, depending upon how the demand is, competitive intensity is. That's the way things are. I don't think this is going to hamper the brand health. That said, we are completely, you know, for investing behind our power brands and new products that we guys are launching. As the situation becomes a little better, we will be back into investing behind the brand the way we were used to doing it, and actually increasing our investments behind the brand. That philosophy is absolutely with us. Earlier you were looking to raise ad spends to much higher levels, like you wanted to go beyond 10%. Today we are at, like, 5.5%. Where does it settle? Like, would it settle somewhere in between? Do you want to go back to double-digit ad spends or. No, the intent is to go back to double-digit ad spend as the situation demands. At the moment, because of the inflationary pressures being so high, I think temporarily we've actually got some efficiencies coming in or optimization of advertising, which has actually happened. That would not be a long-term strategy. Long-term is always to cut back on trade and consumer spending and put the money back into advertising. Understood. Just one last question. Like, on Middle East and Namaste, where you've seen declines in sales on a constant currency basis, what's happening there, and how do these markets look like for the coming quarters? Right. Again, inflation is the main culprit. There's been huge inflation. Like in India, we've seen a 10% inflation. In Middle East, we've seen an inflation of around 30%. The 30% inflation is coming in because this entire portfolio is our HPC portfolio, which is personal care portfolio and which is very crude denominated in terms of the raw material prices. In addition to that, we've seen currency, dollars, actually strengthening. You know, because of the inflation, we had to take price increases to an extent of around 20% there. Because of the 20% price increase, we've seen a little backlash coming from the marketplace. Inventories also, you know, reluctance of the distributors to pick up the high price stock. I think it's a momentary issue which would get resolved. It is because of that, most of the categories, while they're growing in terms of value, but volume-wise they are actually declining there. I think it's a momentary thing, which is happening, both in the U.S. and also in our Dubai-MENA markets. Understood. That's clear. That's it from my side. Thank you. Yeah, thank you. Thank you, Kunal. Thank you. Before we take the next question, I would like to remind the participants to limit your questions to two per participant. If time permits, you may join the queue for any follow-ups. Thank you. The next question is from the line of Mihir Shah from Nomura. Please go ahead. Hi, I hope I'm audible. Yeah. We hear you. Yes. Hi, Mohit. Thank you so much for taking my question. Firstly, I wanted to just, you know, pick a little bit more your, get some more thoughts on the demand, overall demand environment. I mean, narrative for most companies has been that, you know, demand is expected to improve going forward. You know, but, the recent demand improvement that we've seen in urban, and you did highlight on rural demand that you are witnessing for yourself. The recent urban demand can also be largely a festive-linked, uptick that is there and can easily fizzle away. Any data or trends that you are witnessing, that can, you know, give you some insights on how rural demand and urban demand is expected to shape up, going forward from here? Yeah. See, the demand environment is actually pretty lukewarm as far as the data, what the data tells us. If I look at the syndicated data of Nielsen, we've seen a growth in the market which was roughly around 10.9%, has come down to around 8.1%. The volumes have actually gone down by around 2.2%, which was in the range of around 0.9% in the last quarter. The volumes are going down. The growth that you're seeing in the syndicated data is all coming on the back of price increases. Because of inflation, price increases, the interest rates are going up. Therefore there are all efforts being made by the government not to revive the demand, but to destruct the demand to reduce the inflation. Therefore the telltale signs are to restrict the demand, and therefore so that you know the inflation actually comes down. That's the pressure that we people are facing, and we are not seeing this actually going down. The only recourse for companies like us is to consolidate our positions and maintain margins as much as we can and gain market shares. And get to a trajectory of growth through gaining market shares and consolidating your position. That is what Dabur is doing. As far as urban and rural is concerned, we've seen rural decline at around from a category perspective, decline by around 4.5% to 5%. Urban is just there, which is actually flat, which is also flat on back of the emerging channels like e-commerce and modern trade doing well, and they are all opening up after a huge backlog of COVID. Festive season has brought in some glimmer of hope for us, and we hope that this will last and this will sustain. Got it. Understood. I hear your comments on ad spends that you mentioned and the promotion. Only on gross margins, again, you know, you did mention that you're expecting raw material inflation to ease to about 6%, and you've already taken 6% pricing. Does that really mean that from next quarter onwards on a YOY basis you will not have material pressure on gross margins? I mean, is that understanding correct? No, not really. We said sequentially, so it's actually quarter two has been relatively better than quarter one, and quarter three will be better than the quarter two. If you look at year-on-year, there'll be inflation of around 6%, though. If there is a price increase of 6%, that's not good enough to offset the inflation of 6%. You need to take a price increase of roughly around 10% or 11% to offset inflation of 6% material prices, because you operate at gross margin levels of around 45%, 50%. You know, that's how it is. There will be some pressure on the margins for year-on-year, but sequentially there will be operating margin improvement, definitely. All we can say is the contraction in margins will come down significantly from current 350-odd levels. In gross- In gross margins on a YOY basis. Thank you. At least by 50% or so, yeah. Thank you. Our next question is from the line of Tejash Shah from Spark Capital. Please go ahead. Hi team. Thanks for the opportunity. So my first question pertains to rural demand. If we see among FMCG players, for last almost eight to 12 quarters, there is no consensus on rural demand and that has been missing for quite some time. Overall, it looks more reflexive and led by recency bias for each company. But by and large, it has been tepid for long. When we see this in relation to discretionary categories, they have been talking about a lot of premiumization and rural penetration-led growth. How should we actually try to marry these two trends where discretionary categories are coming with reasonably better commentary on rural demand than FMCG players? Are we seeing any such divergent trends within our basket in favor of discretionary portfolio in rural? Yeah. I don't know. There's no right explanation. I don't know what you're saying, but as far as we are concerned, the way we see it, that rural demand has been tepid and we have been seeing down trading, which is actually happening, in the rural areas and our LUPs are doing well. The inflation impact in the rural areas has been more as compared to in the urban areas. There's been a cutting back of the pack sizes also which has happened in the rural areas, and those products are doing well for us. We've seen INR 10 price points and INR 10, INR 20 price points actually doing well. INR 1, INR 2 price points also doing well. Our shampoo sachets are performing better than the shampoo bottles. As far as the premium products doing well on in rural, we have not seen that happen as Dabur. A theoretical explanation could be a K-shaped recovery, which they say, but we have not seen that pan out in the rural areas, especially for us. That is more evident I think in urban, but not in rural. Sure. That's helpful. Second, on broader capital allocation that we are seeing across FMCG players is, there's a disproportionate thrust on putting money organically or inorganically both on food side of the portfolio. Many HPC guys are actually now acquiring assets on that side, including what we have done now. Does it mean that HPC as a basket is not as attractive on an organic route except some D2C initiatives, and broadly, we are seeing a lot of opportunities on the food side? Or how should we read? Or there's nothing to read on this? No, no, I think, very good point actually made, Tejash. The way I see it, that in an inflationary environment like this, when companies are all taking price increases, there are some categories which are more elastic and some categories are inelastic. The food market and the staple market in India, because it's so unbranded in nature, that is very inelastic in nature. No matter how much of inflationary pressures are there and the market passes on that inflationary pressure to the consumer, this is an inelastic demand. The demand will always be there, whether it's edible oil or it is a food, and that's why the food category is growing at a fast pace, and the decline. What happens is, in the discretionary category, we see the pressure being too much and people cutting back on discretionary in an inflationary environment, and that's why the discretionary products don't do so well. India is a large unbranded market, so a lot of inorganic play will happen in India, and we will see a lot of consolidation from unorganized to organized, which will happen in India. That's why you see a lot of deals happening in food. That said, I think the personal care market is also very low penetrated in this country. If you look at examples of Southeast Asia or examples of Middle East, I think the penetration levels of personal care are low, and there is so much of catching up to be done in personal care. I think the times are not great. These are inflationary times. These times are not great for us or for any D2C player to scale up a premium product or a personal care product. I think on a long-term basis, personal care should also see a lot of deals which will happen in addition to foods and in addition to healthcare, which is becoming salient, and which are the three buckets that we have of businesses. It's not that we are shifting our resources into foods. We want our foods to be around 20%, thereabout saliency, and also put trust on our HPC portfolio and our healthcare portfolio, which is a window to Dabur's equity in the long term. Thank you. Our next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Hey, thank you for giving me the opportunity. Hi, Mohit and team. My first question was with respect to, you know, you're talking about 95% market share gains across the category, and I think this is a very strong delivery. Just wanted to understand, is there any category where we are seeing larger competitive intensity both from large players as well as, you know, D2C side? Yeah. Sorry, Sheela, I didn't get the last part of your question. Are we seeing any? More competitive intensity coming through, either from large players or from the D2C side. Yeah, that's right. There are a couple of categories we are facing competitive intensity. That's 5% where we are facing competitive intensity. For example, hair oils is somewhere that we are facing a huge competitive intensity, and that comes from one of the larger players and at a lower price point. As you know, Dabur Amla is a high price player, and we compete with the competitor who is at half our price. Therefore, we have a flanker brand strategy. We need to strengthen or invest money in our core brand and protect it by creating moats with our flanker brands. That is the strategy which is intact, and that is to hedge the competition that we are facing from almost like a market leader in the hair oils category. Barring that, I don't think we have any competitor wherein we are really worried. In the healthcare portfolio, we had a competitor make an entry, but I think it got washed away, and we've only strengthened our position. Barring hair oils, I don't think anything else worries us. Except in our skincare portfolio, we are facing some pressure from local small players, which are very regional players which are undercutting us, like in sunscreens. We face some competition from very local players which are Punjab-based or UP-based, et cetera. That is something that we can easily counter reasonably well as we have deeper pockets as compared to them, and one can maneuver. As far as D2C is concerned, not really. I don't think we are facing any pressure on D2C. As a matter of fact, any category in D2C where we are entering, we are seeing our market share gains are instantaneous in D2C because consumer feels that trust and legacy and that imagery, especially in the healthcare category and in the HPC category, much better with Dabur as compared to a smaller D2C player. Understood. Thank you. My second question was, with respect to the food and beverages category expansion, especially on the distribution side. So where do we see the distribution network being in the next three years? And just as a part to it is, you know, you talked about the playbook on the online side or the e-commerce side, which is working out very well. Do you think on the F&B portfolio you think the same strategy will work out, or you would need to be more aggressive on the GT side or the MT side? Yeah. I just talked about some sort of distribution expansion strategy that we take with our beverage portfolio, especially after getting into the drinks portfolio. Just to give you a flavor of the next three years is that's what you are talking about. We have started this journey from North and East. Next season we'll be expanding basically in Central, West, and South part of India. That's how it will play out in the next three years. We are slowly and steadily building up our, you know, rural network and creating our own rural footprint rather than riding on the CSD or the FMCG footprint. Earlier, we used to ride on the FMCG footprint, but now with substantial business coming in, we are creating our own foods footprint because the kind of outlets that we cater to, the kind of routes that we cater to, the kind of beverage outlets that we cater to are very different from FMCG outlets. We are also appointing people who have an experience of beverage, you know, category in terms of distribution. That is giving us a lot of synergies, and that is really helping us scale the distribution very, very fast. That's how, in the next three years this will pan out. We'll reach out to newer town classes, rural markets, newer outlets, because the end kind of outlets are very, very important. That's to answer your first part of the question. As far as the second part of the question is concerned, because of the weight-value ratio, you know, the beverage portfolio is not so conducive for e-commerce. That's what we say. What has happened really is quick commerce, you know, which has now become very, very important for us. That has really helped the beverage portfolio. I think as quick commerce goes up. You know, it will really help the beverage and the snacking portfolio, and that is what we are seeing. Our earlier, you know, quick commerce used to contribute about 15%, 20%, 15% of the revenues for beverages. As far as last year is concerned, now it has gone up to 30%, 32%. Quick commerce is really helping us. I think that's the way forward for beverage in the coming years. Yeah, that said, I think in the GP also, distribution becomes significantly important to Mayank's point, and therefore we are putting up a separate infrastructure in place in the GP also for ramping up our drinks business, which is already existing at INR 200 crore and in three years' time we want to build it to a INR 500 crore portfolio in drinks. Yeah. Thank you. The next question is from the line of Ajay Thakur from Anand Rathi. Please go ahead. Hello, sir. Thanks for taking my question. I had one question was more on the celebrity-led advertisement that we are witnessing from the other side. Any thought process change over there, or are we looking at, you know, for instance, we have already seen, you know, three brands endorsement by, you know, the likes of Amitabh Bachchan, you know, Deepika Padukone, which we have brought in. Why, you know, as in, what is the thought process change that we are trying to see over here? Would that be, you know, kind of catering to or trying to, you know, solve certain problems that we are witnessing in those brands? is it, you know, going to be addressing more of, you know, market sharing or some other kind of, you know, thought process over there? That's the first question. Right. Ajay, what's, you know, Dabur has always been working on a template or playbook of celebrity advertising, and this has been working well for us, and it helps us to gain market share. Yeah, this is also towards solving specific problems for us. Like in Red Paste, we are very salient in the south of the country, and in south our market shares are much higher as compared to north of the country. North, Patanjali is a strong player, and Baba's foothold is much higher as compared to Dabur's foothold in UP, MP, Bihar, which is a Hindi heartland. In Hindi heartland to fight that, kind of, followership that Patanjali has, we needed a bigger name, and that's why we signed up with Amitabh Bachchan to gain shares in the north belt, for us. We've made some two, three creatives and all the creatives talk about taking shares from white or plain toothpaste and that's what. Even in Dabur Amla, we've signed up with Deepika Padukone, but Amla has always been taking the top-notch celebrities. From Kareena Kapoor, we've moved on to now Deepika Padukone, and that's also towards increasing our market shares. Thank you. The next question is from the line of Vishal Punmiya from Nirmal Bang Institutional Equities. Please go ahead. Yeah. Thank you for the opportunity. First question is basically a clarification on the price increase. We had around 6% price increase for the quarter. Any additional price hike that we took in Q2 FY 2023 or it is just the flow through of the previous price hikes? Yeah, Vishal. There's actually a combination of both. This would be a flow through as well. Our estimate is two-thirds is a flow through and 1/3 would be the fresh price increases. What is the weighted average price increase that we took in Q2 FY 2023? Weighted average price increase is 6%, including the full flow-through. Additional price hike during this quarter would be around 2% to 3%? Yeah, around 2%, 1/3 of that, which will now come with full effect in subsequent quarters as well. Okay, understood. Secondly, on Badshah. Based on the revenue mix that you have given, I'm assuming that 15% is exports. If you can basically break up the three year CAGR for the domestic business and exports business and any overlap of regions in exports for Dabur current and Dabur international business and Badshah business. Yeah. Exports has been very marginal or minuscule for the Badshah business, roughly around 5-6% of their business. I think exports holds a huge potential, especially in the areas where there's an Indian expat population, which is essentially in Americas and in the UK. We feel there's a huge opportunity, and Dabur has got a massive infrastructure of distribution there, which can be leveraged for the Badshah business there. We feel in due course of time, this 5% of turnover will definitely go up to roughly around 10%, in a shorter period of time, just by leveraging our distribution. Because the huge expat population already holding, and expat population that too from the region, which is Maharashtra and Gujarat. Gujarat being more so in Middle East, and Americas. Thank you. The next question is on the line of Aditya Agarwal from Deloitte. Please go ahead. Aditya, your line is unmuted for questions. Please go ahead. Yeah. Thank you for the opportunity. I wanted to ask you on your beverages portfolio, like we have seen that the dairy beverages portfolio has been growing good in the current year. What's your outlook and performance for the current year on the same? Sorry, Aditya. We didn't get your question. Hello, Aditya, could you please repeat? Aditya, can you please, repeat your question? Asking that in the current year, we have seen that the dairy beverage portfolio has been going good for the industry. Beverages. How along the same lines is the Réal brand performing, and what's our outlook going forward for the same? Right. We are very optimistic and hopeful on the entire beverage portfolio because our strategy is to build this or scale up the Réal brand. Earlier, we were only present in the juices and the nectar category. Now we've expanded the total addressable market from roughly around INR 1,700-1,800 crores to moving out to around INR 8,000-9,000 crores and into the drinks space. If you look at the JNN category, juices and nectars, there our market share is in the range of around 65% to 67% as compared to the drinks category, where our market share is pretty minuscule, less than 10%. Therefore, the total addressable market has actually gone up for us, and we see the 10% market share only scaling up in due course of time. Therefore, that 90% headroom of market share is still there with us. That's what we alluded to before in terms of infrastructure expansion, distribution reach, advertising, new SKUs being added, new variants being added. Now we are also proposing to enter the fizz market, which is a carbonated fruit beverage market. We should be starting our production in the coming season in Jammu to harvest that particular category. 16.6%. Aditya, may I kindly repeat your question? Sorry, you were not audible. Okay. I was saying that in the current quarter, on a standalone basis, we have seen for the food and beverage businesses, the EBIT margin has gone up to some 16.6% from a traditional 13.5% to 14%. Are we envisaging to keep this at the same level, or are we going to go back to the 14% level? No, no. Margins will keep increasing as the benefits of scale keep coming in. I think as we scale up the business, we'll be leveraging our S&M force. Even if the investment is there, the indirect force will be leveraged, and also the fixed assets will be leveraged. You know, while it's CapEx heavy and we are putting up investments, but I think the margins, the operating margin level will keep going up as we scale up the business. 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. Thank you. Thank you everyone for your participation in this conference call. The webcast and transcript will be available on our website soon. Thanks, and have a nice day. Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.