Ladies and gentlemen, good day and welcome to the Q3 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Gagan Ahluwalia. Thank you, and over to you, Ma'am. Thank you. Good afternoon, ladies and gentlemen. On behalf of the management of Dabur India Limited, I welcome you to this conference call pertaining to results for the quarter and nine months ended 31st December 2022. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer, Dabur India Limited, Mr. Ankush Jain, Chief Financial Officer, Mr. N. Krishnan, DGM Finance, Mr. Prithvi Shergill, DGM Corporate Affairs. We will start with an interview, 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 afternoon, ladies and gentlemen. Wishing you all a great 2023. Thank you for joining us today for the results call of quarter three financial year 2023. The operating environment remained challenging during the quarter. Rural markets continued to face a slowdown on account of high inflation, uneven distribution of monsoon and downtrading by consumers. The quarter was further impacted due to the delayed onset of winters impacting our winter-centric and immunity building portfolio. Having said that, the new age channels performed very well and some green shoots are visible in the rural markets, indicating early revival in demand. In this context, Dabur consolidated revenue crossed INR 3,000 crore mark for the first time in the quarter and registered a constant currency growth of 5.7%. India business grew by 3.3% and international business registered a growth of 14% in constant currency. The three-year CAGR for revenue of India business is at around 10% with near double-digit CAGR in healthcare and HPC and mid-teen CAGR in F&B business. Our gross margins contracted by 280 basis points in consolidation business due to material inflation and currency headwinds and led to the operating margin declining by 129 basis points in consolidation and only 26 basis points in standalone. The margin contraction is sequentially lower than the previous quarter due to moderation in material price inflation. In terms of categories, food and beverage business posted a growth of 6.4%. The beverage business continues to be on a strong trajectory despite being impacted by early onset of festive season. We outperformed the industry significantly with our market shares in JNN category increasing by 250 basis points. Fruit drinks and milkshake portfolio reported a strong growth and will exit the year with INR 200 crore revenue. The food business also performed well with a growth of 35%. This will be further bolstered by the Badshah acquisition, which will be consolidated quarter four onwards. HPC portfolio recorded a 2.2% growth despite the key categories of hair oils and toothpaste registering a volume decline on account of downgrading by consumers to LUP packs. Toothpaste portfolio grew by 3.2% during the quarter, and our market share in toothpaste segment continues to increase, led by Dabur Red. We have become the number two player in the oral care segment with our market share in the category now at highest ever mark of 15.8%, 80 basis points ahead of the erstwhile number two player. Home care reported a growth of 18% driven by robust double-digit growth across Odonil, Odomos, and Sanifresh franchises. Odonil recorded an increase of 540 basis points in market share in aerosol segment, 410 basis points in the gel category. Odomos increased its market share by 220 basis points. Shampoos recorded a 4% growth on a high base of 21% growth and saw its market share increasing by 40 basis points. Hair oils were impacted by the category decline of 4.5%, but our market share witnessed an increase of 70 basis points to touch the highest ever level of 16.2%. Healthcare portfolio has returned to a positive trajectory after lapping over the high bases of last two years of COVID. On a three-year CAGR basis, healthcare continues to trend at a near double-digit with market share gains across health supplement portfolio. Digestive category saw a strong growth of 11.2% on back of robust performance of our Hajmola franchise, driven by successful launches of LimCola and Chatcola variants. OTC portfolio recorded a double-digit growth with a strong performance of Lal Tail, Honitus, and Shilajit. Ethical portfolio ex-COVID contextual products registered a growth of 7%. Among channels, e-commerce was a standout performer with 40% growth and now contributes around 9% of our total revenues. MT also saw a double-digit growth during the quarter. International business recorded a constant currency growth of 14%. While Turkey and Egypt recorded exceptional constant currency growth, INR growth were impacted due to currency devaluations in these markets. Sub-Sahara Africa and SAARC business clocked strong growth too. On a consolidated basis, despite the inflation and currency headwinds, we continue to drive our business aggressively and have gained market share across the portfolio. Going ahead, we expect the quantum of inflation to moderate, but commodity specific nuances will continue to linger, especially in the food and beverage basket, which is seeing a pickup in inflation. We are seeing green shoots emerging in the rural markets, especially in the months of November and December. Recently announced budget initiatives like 33% growth in infrastructure spending, increase in agri credit to INR 20 lakh crore, setting up of Agriculture Accelerator Fund for startups, along with focus on job creation will augur well for the rural economy. Urban markets are also expected to improve, driven by softening of inflation and buoyancy of new aid channels, as also improved consumer sentiments on the back of reduction in taxes for the Indian middle class. As for Dabur, we will continue to focus on gaining market shares, growing ahead of the industry on back of the strength of our power brands, distribution coverage expansion, cost optimization and efficiency enhancement initiatives. In addition, we remain intensely focused on operational excellence and delivering consumer-centric innovation to expand the total addressable market. With that, I bring my address to close and open the Q&A. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama Institutional Equities. Please go ahead. Yeah, thanks for the opportunity. My first question is on the toothpaste business. When I see your growth in this quarter, maybe even the past few quarters, and compare it with the number one toothpaste company, the gap is now very limited. Earlier, the gap used to be much more higher. The MD of that number one toothpaste company, in fact, said that for the category now the naturals growth will be either similar to the overall category or might even be a bit slower, because now it's fairly large. When you compare these two, your growth versus the market leader and the comment that now it is fairly large, so it may not expand too much in the next one year, two year, what would be your comments to that? Right. Abneesh, hi. As far as oral care segment is concerned, if you look at the category growth, category has declined by around 8%. In 8%, 50% share happens to be the market leader. He significantly contributed and a part of that decline. We have grown at around 3.2% in the toothpaste segment. While the category has declined by around 8%, our three-year CAGR is in the terms of around 14%-15%. We are the market leader in terms of the herbal segment, which is 30% of the overall market. Dabur Red is continuously gaining share. I don't know and I can't comment upon the comments of some other person. As far as we are concerned, we are seeing a steady growth coming in Dabur Red, a steady growth coming in Meswak. Babool got impacted in this quarter because of the rural decline, which is happening across the board, especially in central India, where we're impacted by the deficit of rainfall. That was an exception. Our herbal toothpaste entry has been doing exceedingly well in the southern markets. Our attempt of launching, relaunching our Dabur Red Gel is also doing very well. This year we should exit at around INR 20 crores in the gel market. If you slice and dice the entire oral care market, what we find is that consumers are down-trading at a very rapid pace to LUPs. There's a grammage reduction also which is happening by all the key players. Because of that, the gel market, which is a tad lower in terms of pricing as compared to the overall calcium carbonate market, that has started showing a lot of growth signs. Therefore, our gel entry, Herbal Gel entry is making so much of sense and actually showing a lot of traction in the market. By the way, we've taken a celebrity called Deverakonda in the south also for Dabur Herbal Gel, which is showing great signs of growth. Our Red toothpaste has increased market share by around 36 basis points. Meswak has also grown. Overall, we have become the number two player in oral care now. Replacing Unilever, number one is the lead player and number two is us now in toothpaste and tooth powder clubbed together as a segment. Even in toothpaste we are not far. We are steadily increasing our market share. While you're right, in terms of growth rate, the herbal segment may not be growing as fast, it's already 30%, but consumer sees value as compared to a pure calcium carbonate toothpaste and a toothpaste which has got calcium carbonate plus Laung, Pudina, Tomar, and 20 other extra ingredients which also cost the consumer extra. Our red powder also, if you look at the CAGR of past three years, is doing significantly better. Now we're talking about supplementing Dabur Red on top of the calcium carbonate toothpaste with the lead market segment as that's also showing a lot of traction. I think we've got our fundamentals in place as far as oral care is concerned. Not commenting too much on what the competitor has talked about. I think we are steadily gaining share market by market. We are launching it market by market. We are not looking at all India launches. That ad pro spends is also significantly higher for us. Broadly that, yeah. Sure. Thanks, that's useful. I was in fact comparing like to like. If you see, quarterly results obviously are the more important parameter, because in Nielsen we have always seen there can be a lag impact, et cetera. Coming back to the toothpaste versus tooth powder, because you have said number two player in dentifrice. My question is, because of the rural slowdown and because of the downtrend we are seeing across the board, would the tooth powder segment for the industry and for you, would it be higher versus say pre-COVID? Not really. Almost about the same level in terms of tooth powder. The category is stagnant while we guys are consistently gaining share in the category of tooth powders. Red is taking share from whites and which is what is the phenomena which is happening in toothpaste market also. It's value-added tooth powder to a plain calcium carbonate tooth powder. Value-added tooth powders like Red will gain share, and that's what we guys are doing, especially in the Hindi heartland and other places also. Yeah. There's a 5% CAGR for us in tooth powder in a category which is stagnant. Right. My second question is on the winter impacted portfolio. This quarter obviously it was negative. Jan month we have seen again extreme temperature. Would you say that in Q4 you will recoup whatever you lost, say 5%-6% in terms of dip in skin and salon business? Would that be recouped because it's going to be just three to four weeks of good demand, right? In terms of winter. Absolutely. Abneesh, what you're saying is absolutely right. Chyawanprash portfolio which got impacted during the season because winter being, you know, December was the most summery winter month that you could ever have. It was very high temperature this time in I think 22 years or 122 years that India has seen in terms of December. That lag will get covered up in the month of January, and we are seeing January our Chyawanprash sales far better as compared to the previous months. That said, there was a COVID impact last year in the month of January, and therefore there was a higher sales of Chyawanprash. As we speak, our second read in Chyawanprash are almost as good as last year, which shows great confidence to us that, because the winter getting protracted, I think that cover up will easily happen in the winter centric. Also for skincare. Our sales for lotions, et cetera, are far better in the month of January, is what we've seen. Mohit, my question was also on the skin and salon. There you would not see the COVID impact on, in the base. Will that see good growth in Q4? Yes. Exactly. That's why I said in lotions and creams, in Gulabari, we are seeing a significant amount of traction happening in the month of January also, Abneesh. Sure. Last question is on the lot of e-commerce and say quick commerce kind of product you have launched say in the last two years. In those, if you could tell us which are the ones where you have seen good success, initial success, or maybe at some stage, they could be taken to kirana. Some of which where you're, you feel that now it is not working, so you may have to take a hard call on some of those products. There are two parts to this question. One is the NPD part that you've asked me, another is the e-commerce part that you've asked me. Our e-commerce business is doing exceedingly well. E-commerce is contributing to around 9% of the business, and part of the business is steered by new product introductions because we are treating it as a cradle for innovation for us. We're launching the products here, learning with our experience, changing the whole mix and then making it ready for the modern trade to happen. A lot of NPDs that we rolled out on e-commerce, I can just give you a little bit of flavor. Drinks that we rolled out here, we've already taken it to mainstream. Drinks should end up at around INR 200 crore of franchise in the current year, which is very significant and should very soon become a INR 500 crore franchise. We are appointing separate distribution network also for drinks. That is number one. Juices that we introduced on e-commerce, amla, aloe vera juice, et cetera, that have also got scaled up to the mainstream and INR 20 crore business for us with a very high gross margin. DCP variants that we'd launched also has been taken to now mainstream, and that's also doing reasonably well. Vita and tea that we also launched in this space also now gonna be around INR 10 crore brand each. The entire Baby Care range that we launched on e-commerce is now trending at around INR 20 crores annually for us. HTP variants, which we launched also around INR 16-INR 17 crores. Overall, e-commerce new products will be in the range of roughly 7%-8% e-commerce. 10% actually NPD contribution will be there on e-commerce. Chatcola variants around INR 35 crores YTD December, LimCola and Chatcola for us. Ghees, oils, multiple oils that we guys rolled out will be exiting at around INR 10 crores for us on e-commerce. The list keeps going on. That's why you see a e-commerce growth of around 40% for us. Thanks. That's all from my side. Thanks a lot. Thanks, Abneesh. Thanks. Thanks, Abneesh. Thanks. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi. Hi, Mohit and team. Thanks a lot for the opportunity. I just wanted to understand, you know, pick up on the inflation comments. You highlighted that signs of, you know, moderation and inflation and, you know, logically the price hikes have also kind of flown through. Could you give us a sense by when do you expect gross margins to normalize to the 45%... oh sorry, 49%-50% levels? We have seen abatement in inflation happening. As we speak, the total inflation this quarter has been 8.5%. We've taken price increase in the range of around 6.5%. Going forward, we are expecting the inflation to mute to levels of roughly around 5.5%-5.5%. The mix of inflation is actually changing. The crude is softening and herbs are softening. The concentrates that we are importing because of the currency devaluation of Indian rupee vis-à-vis dollar, that has become dearer and therefore there's a gross margin compression in our food business going forward, is what we guys see. We are in the process of taking price increases because erstwhile price increase are only to a tune of around 4%-5% in food. As compared to the overall company, we've taken a 6.5%. There's a headroom, and we've got ability to take the price table up, being the market leaders there. I don't think we should have a problem in terms of maintaining our gross margins. Food business, because of the nuance of inflation changing, there could be, going forward, some compression. Healthcare, we've already taken care of inflation, and our gross margins are in line with our pre-COVID gross margins now. HPC also, the entire portfolio, we've taken price increases. For hair oils, where we are lagging, because here we want to gain market shares and we are, you know, our price increases are determined by how much of price increase our competitor takes. He being the market leader, we being the follower, so we don't take the first step in taking price increases. There our price are actually lagging, and that's where the contraction of gross margin is most visible, in our hair oil portfolio. Rest of the places we've been able to more than compensate the inflation impact, and our gross margins is equivalent to pre-COVID levels. Overall, our gross margins have compressed by 280. Actually, in India business it's compressed by 190. I think going forward, the compression will reduce. While last quarter there will be, I think there'll be another two quarters of pain before we are able to go back to our old gross margin levels. That's my prediction. The market situation is quite in flux and it's volatile, so one can't really comment because it's dependent on war and multiple other macro factors. Fair point. Fair point. Just, you know, building on that, would it be fair to expect the template of balancing ad spends in this period of high inflation this near term, to ensure that the EBITDA impact is lower and we retain that 20%-21% kind of range to the extent we can? That template is what you will, seek to kind of use. Yeah. This was a template that we thought of when we entered the year and in the vision that we want to maintain a 20% operating margin. That's exactly what we did in this quarter also. In the previous quarter also, we optimized the spends because there was a gross margin dilution which happened, and we had to cut back and optimize our advertising spends. While overall ad pro spend was in line with the top line, around 2% increase of overall ad pro, the mix of the media changed. Instead of advertising too much in ATL, we advertised more in BTL, in consumer promotion and trade promotion, so that our market shares don't get impacted. Because of which, what has happened is our LUP percentages have gone up quite a bit. Our low unit price points have been selling, which is little margin dilutive to us. That is a little change of course that we want to do going forward. We want to start again going back to reducing our trade spends and increasing our advertising spends. Intent will be to increase our advertising spends going forward, rationalize the trade spends and consumer promotions, and go back to building demand on our power brands also. This is a little change that we are thinking. We are in the process of making our budgets. Going forward, we will be budgeting a significant amount of increase in the ATL expenses going forward. The intent is not to be at the cost of operating margin. This is a dilemma that we will sort out as far as when we are creating the budgets here. The intent will be to maintain our operating margins, yeah, in the range of around 20%, broadly. Perfect, Mohit. Just a bookkeeping, could you kind of share what was the volume performance this quarter? I missed that, so that is the only bit. That's all from my side. Our volume performance, I think the right measure of looking at the volume performance will be our secondary sales. In terms of secondary sales, we've increased the volume by around 3 percentage points. Due to the mix of our low unit price point selling very high and the category mix also, healthcare being lower and food being higher, the value weighted volume is actually around -3%. 6% is the pricing. Optically what you see, 6% is the price increase, -3% is the volume. In terms of secondary sales and the transaction sales, we've actually sold 3% higher in terms of our absolute eachs and the tonnage that we actually sell. Because of the formula of accounting, which the COs and the accounting standards mandate us to do, that's why it's showing a -3%. As well as I am concerned, consumer acquisition is 3% higher and the numbers are 3% higher in terms of our volume business. Perfect. Okay. Thanks. Thanks a lot. Thank you. Yeah. Thank you. The next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead. Yeah. Hi, Mohit. My first question was on beverages. Now as you enter the season of summers in 4 Q, which is the sell-in, and 1 Q, which is the main offtake, based on your capacities and things like that, how do you expect this to perform given that this quarter was soft? Any headwinds you see in terms of the scale up from INR 200-INR 500 crores that you are, you're looking at? Arnab, our beverage business has been doing very well. As I alluded to earlier, our beverages will end up doing around INR 200 crores only in the drinks segment. In JNN segment also, Juices and Nectars, we've been consistently gaining share, and we've gained 250 basis points. Our competitive position in the market is excellent. There are small, cheaper players who entered the beverage segment, and they are posing us some challenge in some modern trade specific channels, but which we are handling, whether it's in coconut water. Coming season, we are augmenting our capacity, and the capacities have been augmented in all the three plants of Pantnagar, and we are also setting up a new plant in Indore and also in Jammu. Jammu for aerated beverages and Indore for our drinks pack, which is a INR 10 and a 200 ml price point. INR 10, INR 20 price points. I think we are pretty much geared up. There's surplus capacity which is available outside also. In case we are not able to ramp up, we can always outsource it. I don't think we should face any capacity constraints in the summer season. Got it. Just on the margins, Mohit, to you, as you said, the gross margins possibly will start improving couple of quarters down the line back to the older levels. Given that you have to also normalize that ad spend, would you basically expect EBITDA margins to remain flattish 2024 versus 2023, given that need to get back ad spend to normalized levels? Yeah. Arnab, we've taken our price increases, and those price increases will follow through as the inflation abates. There will be upside of margin because the price increases that we have taken. That upside of margin, along with the cost optimization that we are doing across the value chain, will also flow in. We are also planning to embark on a RGM exercise, which will also release some cost from the system that will flow back into advertising. Our intent will be to balance between media investments and also the margin. We don't want to definitely erode our margins beyond the level where they are. We want to take it up to the pre-COVID levels, yeah. If you compare it to pre-COVID levels, our margins, for the full year anticipated will be down by around, 60 - 70 basis points, which is what we want to correct going forward in the next year, which is not a very tall task with the kind of price increases that we have taken and the softening of commodities that we are seeing. Got it. That's very clear, Mohit. Thanks so much. All the best. Thanks, Arnab. Thank you. A reminder to our participants, please press star and one to ask question. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi. Good evening, Mohit, thanks for the opportunity. Hearty congratulations for becoming number two player. Just one clarification. On the toothpaste, market share, what you have mentioned, is it volume or value? Yeah, that's, value shares. What could be the volume share? Yeah, volume shares will be even better, around 17%. Okay. Okay. Thanks for that. While looking at the PPT on the foods and beverages slide, the growth was 3.7% and three years CAGR was 14.3% in beverages. I think last four to five quarters we have been doing the distribution-led growth. The dairy beverages has done better for us. I was bit surprised that is that the distribution-led consolidation is happening or there was one-off in this quarter? I think optically, Shirish, this is lower F&B, and we are not very happy with the 3.7% growth that we've seen in beverages, but that is illusory. If you look at this year, the Diwali festival actually got preponed. It got pushed forward. Last year, Diwali happened to be in the month of November. This year, Diwali happened to be in month of October. There is a festive season loading which happens in beverages, which is pre-Diwali. This time, the entire loading happened in the month of September for us. If I take September to December, the total growth of the beverage business is in the tune of 16%, which is pretty much in line with what we have done before, and therefore we've gained 250 basis point market share. Therefore, what you see is around 3.78% is actually a lower figure. The right thing would be to look at September to December, which is where it's a 16% growth. Overall, variably also, the growth of beverages has been around 30+ for us. We should continue and especially looking at some price increases that we may have to take, it may not be only volume driven. It could be a combination of volume and value going forward. Okay. Okay, that's helpful. Just one follow-up on the food and beverages revenue, what you've reported, INR 319 crore. How much is, if you can break up, beverages and food? Maybe is there any number which Badshah has been put in here? Just to clarify, out of this INR 320 odd crores, beverages is INR 285 crores and balance foods is INR 35 crores. Is there any Badshah consolidation? No Badshah consolidation, because that will be effective from second of Feb, January. That'll come in this first quarter. Yeah. It'll be coming in the fourth quarter of this fiscal. There's no Badshah here. Okay, wonderful. On this, our food business, while it has done INR 35 crores, we'll be exiting the year at around INR 160 crores, and we have given guidance to the market that this business will also become INR 500 crores in next three to four years' time. We are well within our reach, and the business has grown by 30%, 40% + for us, our food business, on back of launch of oils, ghees, pickles, chutneys, and almost getting into five more categories to increase our TAM. I think, we are, well within our pace to achieve that also. Badshah will only bolster that effort for us. Okay. Okay. Really helpful. My second and last question on the healthcare business. At least my past experience suggests that quarter three onwards, our base has become normal for healthcare business. Though winter is delayed and understandably there is a spillover in quarter four which would have happened. Is it fair to assume that with the normalization of healthcare base, I think our growth will be back on track, 8%-10% is fair to assume, and thereby the margin would remain intact, that's the correct assumption, or is there anything which I'm not reading correct? In a way you're right, because past two years of COVID bases we had which were very high bases, and this year also YTD if you look at, healthcare has actually declined for us in the range of -7% or so YTD. Therefore, that base should be over. Except that January last year there was COVID, so we are lapping over a high base in the month of January also. Post quarter four, I think our bases should normalize, and therefore we should begin on a trajectory of growing the business at a normalized growth of what you alluded to. Even if you look at our ethical business, our ethical business has declined by around -6%-7%, but there's a huge component of a COVID contextual products here. If you take that out, the business is actually growing by 7% for us. Our OTC business has already grown by around 11%. COVID, it's outside of the COVID bases. Honey is already on a trajectory of a 9% growth, it's outside of the COVID contextual time. Chyawanprash, which has declined by -5%, it is still COVID contextual, therefore another span of one month is left, which is January, and after that we should normalize our bases of Chyawanprash also. That is in granularity about healthcare. While on healthcare, I think another news that I want to give to the market and yourself is that we are taking a executive level, executive director level person from the market, Mr. Philipe Haydon, who was the ex-CEO of Himalaya. He's joining us from today onwards, and that is one of our efforts to really provide impetus to the healthcare business in the company. Wonderful. Congratulations for that. Expect the healthcare group should come back in flavor for you. Just you missed on the comment of margin story. Will that normalization will help you to get the margin back for healthcare? Healthcare margins, like I told you before, Shirish, they're already back. We've already taken pricing increases. All the margin downside which had happened because of our inflation, that already been budgeted in there. It's actually higher than the pre-COVID levels of margins for healthcare for also. With the saliency of healthcare moving up, this will actually help our overall margins of the company, because our salience of healthcare will move up, which has gone down to in the range of around 26% levels, and it will only move back to around 30% levels in healthcare. On annual basis, yes. Okay. Thank you, Mohit, and all the best. Thank you, Shirish. Yeah. Thank you. The next question is from the line of Prakash Kapadia from Anived. Please go ahead. Yeah. Thanks for the opportunity. Mohit, you've been traveling a lot to rural India over the last few months. What is the sense you are, you know, getting in terms of the demand and, you know, the inflationary pressure? Is worst of, you know, rural demand over and is, you know, FY 2024 going to be a much better year for us as compared to 2023? Yeah, Prakash, I have a sense. Therefore, because rural was dragging us, I think one of the effort was to actually see it up close and witnesses oneself also, and that's why one did some pantry checks in the rural households and also in the rural retail and visited the sub-stockist market and our Yoddha markets, which is what our seeding operations are. One thing, a couple of indicators in rural is that downtrading is a reality and consumers are downtrading in the rural. That for sure is happening. Cheaper products are the ones which are actually selling in the market, and premiumization is no way to go. While premiumization I think is only in urban, as far as rural is concerned, it is people are cutting back on their expenses and downtrading on products and actually choosing among the consideration set, it's not necessarily a brand. A lot of smaller brands have made their way into the rural market just because they are actually cheaper. That is one sense, which is there is downtrading. That's happening. Price point becomes very important. INR 5, INR 10, INR 2, INR 1 price point is still which reigns in the rural. That said, consumers have not stopped using these products which are essential, like a hair oil or a toothpaste, which is a glimmer of hope. They're still using. They've just downtraded to cheaper brands. Pantry checks, everybody has got a detergent powder and a toothpaste and a soap and a hair oil selling and using. Because the rural in India is heavily subsidized by the government. Actually, everything government pays for except for the recreation of the rural. That's what I witnessed in the central states of UP and Bihar. Gas is paid for, electricity is paid for, food is paid for, wheat and rice is paid for, education is paid for, midday meals are paid for. Everything is paid for. Even the toilets are paid for, water is paid for. House, pucca houses are being constructed by the government. Therefore, that's why MGNREGA outlaid the demand for MGNREGA is actually going down because everything is paid for by the government. I think with the government focus on rural is seeing now growths will happen in rural. A lot of rural people have also come back to urban post-COVID and started working and sending back money back to the rural. There is a rural development which is happening in the country and rural development by way of infrastructure development, school development. Progress is very fast. Downgrading is happening at the moment. I think the winter sowing has been good and harvesting has been better. I think the income in the hands of rural will only pick up. We see this rural and urban gap between growth is actually reducing going forward. In couple of quarters, rural should come back to its old glorious days. I don't see rural will languish beyond a point. I'm pretty hopeful about rural recovery. As far as our infrastructure investments in rural is concerned, that will continue as the way we have thought it through. That's in a way on rural. Sure. Sure. That is, that is helpful. If you have, you know, LUP contribution for the quarter or year-to-date basis for the company as a whole as compared to last year, that would be helpful. Our contribution of LUP is in the range of around 25% odd. If you look at the growth rates of LUP in past couple of quarters, we see LUP growth rate in the range of around 20%-25% growth rate as compared to a business growth rate of around 3%-4%. You can imagine that contributions of LUP will only go up going forward the way things are, and therefore it is essential to do some urban demand development here so that our premium, larger packs also start doing well actually. That's the LUP. Therefore, penetrations are going up, and it's in a way a virtuous cycle because the more the consumers use your LUPs, they upgrade to the premium packs going forward. A bulk pack promises them more economy, so it's virtuous cycle. We have to start doing the demand, building also, in my view. Yeah. Okay. this, LUP was more like 20% maybe two, three years ago. Is that the right number to compare? I think it should be lower than even 20% for us, and more salient in our HPC portfolio, where we have an INR 10, INR 20 price point, both in hair oil and shampoo. It's actually an INR 1 price point in toothpaste also, in home care. Less so much in healthcare, which is lower because the price points are generally higher. In foods also, the INR 10 price point and INR 20 price points are doing very well for us. Actually, the growth there is in the range of around 80%, 90% for us in our LUPs in the drink business. Right. You know, on the urban side, you did mention, you know, to do a couple of things to ensure, you know, saliency and demand, you know, is buoyant in urban. At least, you know, the sense is inflationary impact is far lesser than rural. So in the near term, what, you know, segments you think will drive the urban side? Will, you know, premiumization come back? And how does, you know, demand look on the urban side? Yeah. From a consumer standpoint, I think premiumization and premiumization of the premium packs and upgrading our existing franchises to more premium franchises, for example, honey to organic honey to a single flower honey to a cassia honey, et cetera, that will happen. Chyawanprash, in terms of sugar-free Chyawanprash, in terms of gud Chyawanprash, all that is happening. In terms of hair oil portfolio, launching therapeutic hair oils. In oral care, launching sensitive toothpaste. I think those efforts are happening, helping us to actually launch those and nurture those premium offerings within our existing franchises to actually grow. Therefore, our e-commerce NPD contribution is higher than around 10% there. Modern trade is also helping us with this whole premiumization story. Our growth in e-commerce is in the range of around 40%. Modern trade is also in the range of around 11%. We've corrected our modern trade issues that we guys were facing in terms of undercutting, and I think modern trade should go up to around 15%-20% growth going forward in next year also. Class two and Class three towns is also becoming very salient with infrastructure development. We are embarking on exercise which we called MSL, which is must stock list, in which we are looking at larger packs to be sold by the last mile salesman at the retail and incentives to be linked with that in Class two, Class three. That's also happening as we guys speak, that exercise. Yeah. Which we call picture of success implementation. That exercise is happening, which will help us grow our larger packs and premium offerings there. This should help the margins improve and premiumize our portfolios. Understood. That's very clear. Thank you. Thank you. All the best. Thank you. The next question is from the line of Abhijeet Kundu from Antique Stock Broking Limited. Please go ahead. Hi. Thanks for the opportunity. My question was on, you know, getting back to that 10%-12% growth that, you know, Dabur used to have on a very long- Abhijeet, you're not clearly audible. Can I request you to use the handset? Yeah. Now it's better? Yes. Yeah, yeah. Yeah. I was just alluding to the, you know, long-term growth of Dabur when it always used to be about 10%-12% with, you know, health supplements, growing at about 8%-10% at least. Also your, you know, hair care business, oral care business. Oral care business really outperforming, growing double digits. Your other businesses also, you know, food business also growing in double digits. The point here is that, if we have to look at the one year or two year, and, you know, rural remaining a bit muted or not muted, maybe rural seeing a recovery. How do you know, steer it forward in case of your hair care and oral care business? My clear pointed question is that, what would be the efforts required? Secondly, how much would be rural contribution for you in hair care and oral care? Right. That's it. I think we've got our game plans and the market strategy is right in terms of oral care and hair care. In hair care, our strategy is very clearly we got core business and we have core brands, and we got a flanker brands. Flanker brands actually create a moat around our core brands, and they keep protecting our core brands. We are more profitable, and we keep growing our market share with core and flanker brands in the hair oil portfolio. In shampoo portfolio, we are very clear the way we've done in oral care, carve out a niche of natural in shampoo. That's what we guys are doing with Vatika shampoo, increasing our bottle saliency in modern trade. Our bottle saliency is already 20% in shampoo. That will keep inching up, and our margins will keep growing. We have a huge headroom to grow in the shampoo business. In hair care also, there are various sub-segments of hair oils, and we are flanking our brand into most of the sub-segments and trying to gain share from the competitor in those sub-segments. Strategy is being very clear. Oral care is giving us great dividends. Even in hair oil, we are getting dividends in terms of market share gains in all the sub-segments. In shampoo also we are getting significant gains. We've got our whole game plan, you know, the plan of action all placed out and we are now executing, trying to execute with perfection. There is no reason, because at the end of the day, if you look at, Abhijeet, our market shares are only into 16%, 15%. We have a huge headroom of around 85% to grow. It only depends upon how much of execution excellence we have in the marketplace with the strategy being right and how much of market share gains we can have. If the categories decline, then there becomes a pressure on the number two player, and that is what is happening now. We want to punch our weight over the category, and therefore if the category is growing by, you know, 4%-5%, we want to grow at around 7%-8% to gain market shares for us. It depends upon the category growths. If the category is flagging and is - 5%, -6%, which is the case now, hair oils is down by 4.5%, oral care is down by around 8%. We end up growing at around in three and four. That's where it becomes a low single digit for us. You know, because we are not isolated from the category growth rates. That's where we are. As far as rural contribution is concerned, oral care, 40% contribution comes from rural and hair care around 46% comes from rural for us. We are more rural salient. If you look at the Dabur heartland, which is UP, MP, Bihar, where we guys are very strong and higher market share is there our rural contribution will be even higher, more than around 50% is rural. That I think answers your question. Yeah, thanks. You know, we have... In Q3, suddenly there has been a further deterioration. If we look at the, you know, overall trend, then suddenly Q3 has seen a sharper decline. There have been, I mean, there has been moderation in growth. Anything that has gone in during this quarter, any specific reason that you see? No. If you look at the market growth rates, the markets have actually deteriorated in quarter three. Plus our base effect has kicked in. We had high bases of last year. Number two, inflationary pressures, which are there because of price increase in rural is this thing. There has been a deficient rainfall also, which has happened in our heartland. If you look at the bifurcation of our growth between north, south, east, west, all the three regions, whether it's north or it's east or it's west or it's south, all have done well, but for the central region. Which has actually declined by around 3%-4% and central region comprises of UP and Bihar for us. If you look at ex-central, which is ex these two states, our growth is around 8%. I think it's one state, two state phenomena, which is Bihar and UP, because of deficient rainfall and rural slowdown, where rural contribution is also high, has actually pulled us down. That is a isolated factor because of rainfall deficit and also late winters and therefore winter products also did not sell much there. That's a very isolated issue and it's in a pocket. I don't think this should last for very long. Okay. In the near term Q4 and should be under pressure and for the industry also as a whole. That is dependent on industry, the growth rates, if you look at the growth rates, if I look at the FMCG industry growth rates, if you look at Q1, the growth rate was 11%. In Q2, growth rate, came down to 9%. In Q3, the growth rate is around 8.2%. This I'm talking about value growth rates. If you look at volume also- Mm-hmm. Volume also has steadily declined. In our relevant categories, growth was around 1%, then became -4%, and now has become -5%. We are no isolated case here. If you look at rural, we are seeing some growth in rural markets going forward. I think it's the market thing as the with the government stimulus, as the budget talked about yesterday, 360-degree budget. There is something for everybody in that budget. The middle class will also show up as more disposable income in the hands of middle class with tax rationalization, which has happened. There is so much for rural. There are farm subsidies and overall, micro schemes which are being introduced by the government. I think that should augur very well going forward in the future for the economy. Both urban and rural should see some improvement. Yeah. Okay. Got it. Thanks. That's it from my side. Thanks. Thank you. Ladies and gentlemen, as there are no further questions, I would now hand the conference over to Ms. Gagan Ahluwalia for closing comments. Thank you, and over to you, ma'am. Thank you, Aman. Thank you for your participation in this. The cast, audio recording and transcript of this call will be available on our website. Thank you and have a nice evening everyone. 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.