Ladies and gentlemen, good day and welcome to the Q1 Results Investors Conference Call of Dabur India Limited. As a reminder, all participant lines will be in 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, ma'am. 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 ended June 30th, 2023. Present here with me are Mr. Mohit Malhotra, Chief Executive Officer at Dabur India Limited; Mr. Ankush Jain, Chief Financial Officer; Mr. Rahul Awasthi, Global Head of Operations; and 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. I now hand over to you, Mohit. Thank you. Thank you, Gagan, madam. Good afternoon, everybody. Thank you for joining us today for the results call of Q1, FY24. During Q1, FY24, most of the economies witnessed a moderation in inflation. In India, too, inflation showed signs of easing, as witnessed in both CPI and WPI data. With this moderation in inflation, there has been an uptick in volumes in both urban and rural markets, indicating promising signs of recovery in demand. In such an environment, I'm pleased to share with you that Q1, FY24, has been a quarter of strong growth across all geographies. Dabur's consolidated revenue for the quarter crossed INR 3,000 crore mark to close at INR 3,130 crore and registered constant currency growth of 13.3% and INR growth of 11%. India business grew by 8%, backed by robust double-digit growth of our Healthcare and HPC portfolios. The beverage portfolio got impacted by unseasonal rains in the North and West India. The four-year CAGR for the India business is 10%, with near double-digit CAGR in Healthcare and HPC, and strong double-digit growth in F&B business. International business registered a growth of 20.6% in constant currency terms. Talking about the categories, HPC portfolio recorded an 11% growth during the quarter. Our oral care portfolio grew by 13% in the quarter, leading to strong double-digit four-year CAGR. Dabur Red gained 50 basis points of market share in the category, consolidating our position as a number two player in the oral care segment, with every second household being a Dabur oral care household. Hair oils recorded a 10% growth and posted a strong gain in market shares of 200 basis points to reach its highest ever level of 17.4. Shampoos recorded a 9% growth in the quarter, with four-year CAGR at a robust 13%, leading to market share gains. Home care registered a 15% growth, with all the brands witnessing strong performance. Odonil, which is number one player in the air fresheners category, continued to witness gain in market share. In mosquito repellent category, we saw an uptick of 340 basis points in market share. Healthcare portfolio recorded a 10.5% growth, posting a four-year CAGR of 10%. We saw market share gains across health supplement portfolio. Digestive category saw a growth of 15% on back of robust performance of Hajmola franchise. OTC portfolio grew by 24% during the quarter, driven by double-digit growth in Lal Tail and Honitus. Ethicals registered a 7% growth in the quarter. We have recently established a therapeutics division, which includes a team of 400 product specialists for advocacy and sales of our healthcare portfolio to allopathic doctors. This division is targeting an incremental business of around INR 150 crore during the year, with the portfolio of baby care, branded ethical, Pure Herbs, and derma products. With this division, we are targeting to reach 70,000 allopathic doctors, in addition to the current coverage of 70,000 Ayurvedic practitioners. This should enable the company to bring Ayurveda into mainstream allopathic healthcare and accelerate growth of our healthcare vertical. Beverage business saw muted growth during the quarter on account of unseasonal rains, which particularly impacted North and West India. The foods business under the Dabur Hommade brand performed exceedingly well with growth of 35%. This has been further bolstered by Badshah acquisition, which saw 23% growth in the quarter. We remain on track to exit the year with an run rate of INR 500 crore from our Foods plus Badshah business. We continue to drive our distribution expansion initiatives. Our direct reach stands at 1.4 million outlets, and we should increase it to 1.5 million by the end of the fiscal year. Village coverage is at strong 1 lakh+ villages, being ably supported by more than 13,000 Yodhas. ED score, which is a efficiency marker of distribution, continues to see improvement and has seen an increase of close to 10% in the quarter. Now, coming to the International business. With moderation of inflation and distribution changes, the International business has seen a strong recovery and registered a 20.6% constant currency growth. This was driven by robust growth across our regions, with Middle East, North Africa growing by 10%, Egypt growing at 45%, Turkey business growing at 52%, and Sub-Sahara business growing by 13%. Our focus on innovation and customer-centric strategies has enabled us to gain market shares across most geographies and countries. A litigation has been filed against one of our subsidiaries, Namaste LLC, in USA, along with other companies manufacturing hair relaxer products like L'Oréal, Godrej, SoftSheen-Carson, Avalon, Revlon, et cetera, where it has been alleged that usage of such hair relaxer products leads to harmful effects. Namaste disputes the same and stands with the safety of its products. Namaste, along with other defendants, have formed a defense consortium and appointed lawyers to take adequate steps to defend this lawsuit. The case has been filed on the basis of an incomplete and inconclusive study. Namaste, along with other defendants, maintains there is no legal merit to this suit. The portfolio in question is less than 1% of our consolidated revenue, and we have a product liability insurance in place. The matter is sub judice. Coming to the quarter's profitability, our consolidated gross margins expanded by 75 basis points as material inflation reduced from high single-digit to low single-digits. During the quarter, we have increased our A&P investments by around 30%. We believe these media investments are essential to drive long-term sustainable growth and maintain our market leadership. This quarter, we recorded a market share gains in 90% of our portfolio. Our operating profits saw a growth of 11.2%. PAT for the quarter touched INR 464 crore, growing by 5.4% over previous year. This includes amortization related to Badshah acquisition. Excluding this amortization impact, the PAT growth was 8% on a like-to-like basis. Overall, the improving demand scenario augurs well for the business as we will continue to drive profitable growth across our business verticals, backed by investments in our distribution network, brands, manufacturing, digital, and organizational capabilities. With this, I conclude my address and open the floor for 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 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 Nomura Institutional Equities. Please go ahead. Abneesh, your line is unmuted. We request you to please proceed with your question. Hello? Yes, Abneesh, please go ahead. Hello. Yeah, yeah. Thanks. Yeah. My first question is, of course, in Q4, your numbers were weak, and now you have seen good recovery on YOY basis and even on four-year basis. I want to understand on this recovery bit, is it because of the inventory levels changing from Q4 to Q1 in a meaningful manner? Second is, of course, 30% increase in the advertising also. Is it across categories? It seems slightly higher than what some of your other peers are doing. On an absolute basis, the 30% increase and when seen, when seen from a gross margin to a EBITDA margin, kind of a translation, it is much higher than the gross margin expansion versus the other companies. Could you elaborate this recovery bit? Is that sustainable for the coming quarters also across categories? Hi, Abneesh. Yeah. I think the recovery is in the market per se. It is not just Dabur recovery. If you've seen that, rural business across the board actually has recovered, and there is a volume uptick, which is being seen in the rural business. Rural for the category itself, or should I say, for the FMCG market, has actually grown by 4%. We are growing ahead in rural at around 8%, and urban growth for us is around 10%. Across all businesses, we have seen the recovery happen as the rural recovers, and you know, Dabur is more salient in rural. Backed by rural, we are seeing a recovery happening in our GT business. In MP, we had some issues in modern trade with Reliance that we sorted out, and modern trade is again back on a limb and growing at around 18% for us. E-commerce, there were some teething issues in the business. That is again, going to be back on track, and e-commerce should, by the end of year, should be around 9% of our overall sales. Broadly, I'm confident on the recovery of the business, but for beverages, which got impacted by the seasonal- unseasonal rains which happened, and that's damp, dampened the beverage portfolio. Our foods portfolio grew by around 34%. It's a secular, kind of a growth that we've seen across the portfolio and not much pertaining to any inventory levels in the market, per se. As far as the second part of your question is advertising. Advertising, we had cut back last year, advertising because of the inflation issues, and we wanted to maintain the margins, and that's why there was advertising cut, because huge inflation was there. Now inflation is kind of abated in our portfolio. In India, overall inflation was almost around 0.5%. International business still witnessed some sort of inflation, but we had alluded to earlier also that we will be investing money back into advertising for surging demand, and that's what we've done. That's were done, and we also invested some money back from consumer promotions and trade promotions back into advertising. That's so gross margin improvements are being invested into advertising, and some is flowing down into EBITDA, also operating profit. Sure. My second question is on the health portfolio with this leadership change from Himalaya, such a senior person. You have also shared the higher targets for FY24, with higher feet on street, et cetera. My question here is, why now? How easy is it to target the allopathic for Ayurvedic? Because both are very different. If it was so easy, why did you not try it earlier? Any other learnings, because Himalaya being unlisted, we don't know much, but it's very well run in the health and Ayurvedic segment. You are also very large. Any other learnings are there, apart from what you are doing in terms of feet on street and targeting allopathy, any other changes needed in your own portfolio? There was a couple of changes in the healthcare. One is the leadership change that you know, Philip has come in, and he's the one who's driving the healthcare vertical for us. I think one major change is advocacy, and advocacy not to but also we are doing it to Ayurvedic, but also we've started allopathic also, because we feel that allopathic doctors are the mainstream, you know, practitioners in the country, and without your portfolio getting a yes or a tick from the allopathic, you really can't drive healthcare in a country like India. Therefore, we are going to be doing a positive advocacy with allopathic doctors and also driving sales through them. INR 150 crore are incremental sales, and we put around 500 people feet on street, totally going to both allopathic and Ayurvedic doctors. This business should be incremental. Moreover, if you remember my previous speeches also, I talked about baby care. We are not taking mainstream and keeping it restricted to e-commerce till the time we establish a GTM for baby care. With this advocacy team coming in and going to gynecologists and pediatricians also, baby care will come into mainstream. Baby care, which exited at around INR 20 crore last year, should see a INR 50 crore business in the current year. Baby care will be driven very hard through this vertical, along with the branded ethicals and also some pharma-led products. Overall, we should continue on a growth trajectory of 10% CAGR on Healthcare going forward, with Philip coming in. Apart from setting up an advocacy vertical and selling products through this advocacy vertical in allopathic channel, which is not a very big challenge. It's not very difficult because Philip has done it in the past. We are doing it, except that training, et cetera, has to go on a little slow burn, but I think by end of the year, we should see turnover growth coming from this vertical. The second vector of growth in Healthcare will be investing money on power brands, which we'll continue to do, backing up Lal Tail, Honitus, Pudin Hara, all these brands, and Chyawanprash and Honey, et cetera. That will go on the way the strategy was. The third vector is new product introductions to increasing the addressable market in Healthcare. That will go on as it is. Sure. My last question is on the M&A strategy, which Dabur has. Clearly, when I see Marico, HUL, ITC, et cetera, they have been quite more aggressive on the D2C front in terms of acquisition last two, three years in the foods and personal care portfolio. Dabur obviously has done the Badshah acquisition. Wanted to understand on D2C D2C acquisition, what is your thought process? Second, in terms of Badshah, what is the interplay between Badshah and Homemade? Homemade has done well, but are there any synergy benefits which you are working on between both the portfolio in terms of either distribution team or in terms of brand architecture, et cetera? Because now both are fairly adjacent to each other for the customer. Absolutely. Abneesh, what we are doing, we've got money sitting in our balance sheet for acquisition purposes. We are continuously scouting on targets for D2C also. If we come across a company which is synergistic to us in the healthcare play or the personal care play or the skincare Ayurvedic play, we will evaluate them, and if it seems financially worthwhile, we will acquire the company. The last thing we want to do is acquire a dilutive brand, which further takes down our EBITDA margin. That's why proper due diligence has to happen before we actually acquire the brand. Money is there in the balance sheet to acquire a D2C brand also, which could be a premium play for strengthening our urban business. That's one. The second part of your question on Badshah and Hommade is concerned. Both Homemade and Badshah are doing well. Badshah has grown by 23%, also impacted by a lot of inflation of spices vis-à-vis. Homemade brand is growing at around 33%-34%. Homemade is restricted to the northern side of the country, where Dabur is very strong, and Badshah is today restricted to western side. We are cross-pollinating the portfolio from Badshah to Homemade, Homemade to Badshah, definitely. In terms of distribution, we are leveraging the Badshah distribution in the west for Homemade, and we are leveraging the Dabur distribution for Badshah in the north. Still, we have not started. Going forward, in the next quarters, we will start pollinating Badshah to our distributors in the western region to start with. Western and southern region to start with before we move to north. This is what the playbook was in the beginning, and we are sticking to our strategy, what we had planned out to be. Both of them are running at a rate of INR 500 crore going forward next year. Next year, we'll be looking at a foods portfolio, totally INR 500 crore. We'll be exiting at around INR 450 crore, and with next year, I think the target will be INR 500 crore for our foods portfolio. ... Okay, okay, thanks. That's all from me. Thank you. Thanks. Yeah. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, Mohit. Thanks for this opportunity. I wanted to kind of just understand the oral care positioning a little better. You know, do you see the need to extend beyond the naturals positioning to ensure that the growth divergence versus the industry sustained at the earlier highs? If yes, what steps are we taking for the same? Yeah, Avi, not really. We want to stick to our core and our core capability. As far as oral care is concerned, I think natural is our core, and we will stick to the naturals portfolio, and we will not deter from the natural portfolio. If you look at the current numbers which have come from Kantar, we see penetration of natural category has moved up from 30% to 31%. 200 basis points of improvement is there in the growth as far as the natural category is concerned. Within the natural and overall, we've been successful in taking business from the non-naturals to the natural. The category has grown in volume by around 2.5%. We have grown by around 9% as compared to our number one competitor, who's grown by 7%. We have taken share from them. We are consistently taking share. 50 basis points gain is happened in Dabur Red. Even Lal Dant Manjan, on back of rural recoveries, are also done very well. Dabur Herbal toothpaste had some teething problems in terms of stock out, but that also we are correcting going forward. In south of India, it's doing well. We've launched our Dabur Bae Fresh Gel, which you can say is a kind of a non-natural or slash a natural gel entry, which is targeting youngsters and teenagers, and the positioning is more on fresh breath, which is really not on health, but it is an extension of our Red franchise into a gel. We've launched it. We've roped in Kartik Aaryan as a celebrity for that. We've already got a turnover of around INR 4-5 crore. We've launched it in the end of June, and I think for the full year, we'll be targeting a number of around INR 15 crore-INR 16 crore coming out of our, Bae Fresh Gel. Our earlier gel franchise has also grown by more than around 25% in the last quarter. Gel was an area where which was absent in our portfolio, which we have kind of plucked now. Okay, okay. Just a follow-up: In your opinion, this 31% naturals share in oral care, where do you see it trending, probably two years or three years ahead? I don't know, two years, three years, but definitely a little longest term, I think five to six years, I think the whole category, 50%, should become natural, and Dabur will consistently- Okay. -keep taking share, from the market leader. Got it. Got it. Perfect. Well, the second- The second bit was essentially on... Yeah. Sorry. Because the price points, because the price points are similar, there is no difference between the price point. This is a basically a value-added toothpaste. Like you have a value-added hair oil, this is a value-added toothpaste, calcium carbonate-based, and we are giving more added ingredients and promising benefits like cavity protection, like sensitivity, et cetera, but more through natural means rather than through cosmetic and chemical means. Hmm. Fairly clear. Thank, thanks, Mohit. Thanks a lot for that. The second bit was essentially on the margin. Given the Q1 performance, where we've seen input cost kind of moderating, demand strength kind of reflecting in this margin performance, would you want to revisit your guidance for FY24 of 19%-19.5%? How would you kind of... If you could share your comments on that, please. As far as the inflation is concerned, we are witnessing inflation moderating across our categories, but the mix of inflation is also changing towards food. We've seen food basket inflation around 11%, while it's moderated in HPC and HC in healthcare, but food basket, we've seen inflation, with spices inflation being around 19%. Our concentrate, fruit concentrate, also we've seen inflation. The monsoons have gone ahead. I don't know how inflation will pan out in the immediate terms, but consistently, overall, on the hydrocarbon link, which is the bigger basket of raw material and packaging material, there we have seen deflation, and that deflation should continue for next quarters to come, and there will be a margin upside. We have seen the 75 basis point of improvement in our gross margin, which we've invested into media. That will continue to do. If the gross margin upside is higher, then that will flow into our operating margin. We keep a guidance of the same similar band. Till the time we cover up our media investments to a tune of around 8% to 9% of the overall business should be media for us. Till the time, money will keep going into media, because we feel long term, we have to invest in media and not really, you know, look at a very short-term approach of giving it to margins and less to media and starving the brands. No, got it. Okay. Mm. Just the last bit, Mo- Sorry, sorry, Mohit, you were saying? Just the last bit, Mohit, was on this recent news that came in about Dhani. If there's anything that you would like to comment on that, which is coming today. Just that's the last bit on my end. ...Yeah, I know that these, these news keep coming in, we keep giving statements. One more statement I will give: We stand by the purity of Dabur Honey. Our every single batch of Dabur Honey is dispatched from a factory, it complies with all FSSAI parameters, which is the regular body, regulatory body in India. We export to almost many countries, everywhere we follow the regulations of the regulatory body there. Most of the factories where we produce our honey, they are all USFDA certified facilities, no question of any impurity. I think it's our foremost duty, Dabur brand stands for quality and trust in the consumer's mind, we don't want to breach that. That's our foremost priority to do. No question of anything. Every batch is tested as it exits the factory, and that batch is tested for all around 65 parameters of FSSAI and also beyond that, which includes HMF also, which has been questioned. Recently, Dabur Honey has been granted an Agmark special certification, post inspections and proper due diligence by authorities. This study, which has actually happened, is evidently a couple of hours before our quarterly business result announcement, is definitely motivated to malign the image of the market leader. Last time also, when such controversy happened with CSC report, we emerged much stronger. We gained around 500 basis points of market share since then, and I'm sure even after this controversy, we'll emerge out to be much more stronger. As a business, we do not pay any heed to such studies which keep happening. These are some tactics by some companies to malign our image and take share through ulterior motives. We do not want to pay any heed to that and continue with our business as usual. No, perfect. Perfect. The 500... I mean, the margin, market share gain, which we saw last time, is a very clear kind of indication of that share. Thank you very much. That's all from us. Okay. 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 the gross margin. While your consolidated gross margin has moved up, what I was noticing is the India gross margin has been kind of flattish for the last three quarters, while we have seen input cost deflation and a lot of the other companies have seen strong expansion. Is it something that is going to come in with a lag, or, are there certain pockets, where the inflation is very high for you, which is why the India GM is not moving up that much sequentially? India, Arnab, India gross margins have also improved by 80 bps, 80 bps in the quarter, year-on-year. And, you know, therefore, the benefits of deflation in Healthcare and HPC businesses are flowing on into business. That's true. Correct. It's actually improving. 80 basis points is an improvement. Arnab, maybe you are reflecting all the other companies maybe have shown 190, and we are actually 80. One of the issue here is in food, we have an inflation of around 11%, which is hitting us in fruit concentrates. Food as a segment is very salient in our summer months, which is our Q1. 25% of our business is coming from summer-centric food portfolio, where we have seen inflation. As we move into quarter two and quarter three, HPC and Healthcare portfolio will become even more salient, and therefore, gross margin upside will be even better in those two quarters, to your point also. In the HPC portfolio, where raw material is essentially SLES, and hydrocarbon linked, LLP linked, there we have not seen very high deflations yet, which because of the strategic inventories that we will be carrying. As we exhaust the inventory and we move into the regular purchases, we will see gross margin upsides happening there also. Definitely sequentially, there has been a gross margin improvement quarter-on-quarter, and we will continue to see that for next two to three quarters. Yes. Okay, understood. That's... Thanks, thanks for that. My second question was on beverages. Clearly this quarter there was an impact of the summer season. Just wanted to get a sense on how you see the full year now, because you do have a very high base for 2Q also. I think there's a timing with the festive season. How do you see the full year growth for beverages overall? Anything on the new initiatives on beverages, especially fruit drinks, in terms of how you want to scale it up this year? Yeah, so beverages was muted on account of season, and we could not help in the season. If you see most of the beverage companies as per the Wisem data, which has got released, they're all down by around 25%. As compared to they're down by 25%, Dabur beverage portfolio is only down by. It's almost flat. We are declined by around 1.6% in beverages, whereas in terms of transactions, we've actually grown by around 4-5% in terms of transactions. Transaction is number of units that you are selling in the market on back of the drinks that we guys introduced, so that is just been introduced. Overall, beverages will be muted through the quarter because main season was damper. I don't know how the season will pan out to be next year going forward, but I think it will be muted for the full year, beverages. Which will be in a way, a positive as far as our margins are concerned in the current year, because the salience of beverages, if it's low, then the margins become positive for us. Okay, understood. Thanks for that. My last question was on international business. You had those distribution issues. Wanted to know, does this quarter fully reflect that the issues are behind and you've-- or, or there is some restocking that you would expect going ahead, as the distribution changes fully kind of kick in into those markets? Yeah. International business, we've done the changes in distribution last year, and therefore, that got reflected in the Q1. In Q1, we lost some sales on account of change of distributor. Next quarter should be a full-blown quarter with the distribution changes getting ironed out. For the full year, we can guide for a good double-digit growth in International business. Constant currency, obviously, we have grown by 20%, and we'll continue to grow like that in constant currency in International business. Currency depreciation impacts us, but even in Indian currency, we will have a double-digit growth as far as International business is concerned, the full year. Okay, thanks. Thanks, Mohit. That's it from my side. All the best. Thank you. Yeah. Thank you. The next question is from the line of Percy from IIFL. Please go ahead. Just some comments from you on the hair oil segment. It's grown at 10% this quarter, and your other large competitor, basically has seen a flat kind of a number. Just wanted to understand what has led to this difference in performance. Yeah. Percy, we guys have grown by around 200 basis points, ever highest market share of 17.4 we've registered in hair oils. I think our Amla portfolio, which is following a strategy of the core brand strengthening and through flanker brands, I think all our brands have done well, including Amla core. I think execution in the market has been absolutely great by the team, and we've been gaining share in segment after segment. Pack price, architecture, and MSL, which is must-stock list adherence, is actually reaping results in the marketplace for us, and shelf shares are going up, distributions are going up. All ends, I think, execution has been great. Our strategy is actually working for us, which took us time, because in the 10 rupee, 20 rupee, we were losing shares to our competitor, but I think that we've come back and kind of anchored it, well. Got it. Got it. Secondly, on margin, just continuing from Arnab's question, how do you see it playing out? You said basically you had some higher priced inventory. Now, that will get run through. Do you think that you will sort of end the year at the higher end of your guidance of 19%-20%? No, I never gave a guidance of 19%-20%. Yeah, higher end of the guidance, yes. Definitely. I think it'll take us another year. I don't know how the inflation pans out to be, Percy. It all depends upon inflation, but we've already taken price increases in last year to manage inflation, and all the follow-through impact of the price increases should happen in the current year. If inflation is really benign and it leads to deflation, which is not the case right now, it's a 0.5% inflation still. If inflation becomes deflation, yeah, we could positively surprise you at the end of the year, but I can't give you that kind of a guidance at the moment. We should remain in the band that we talked about earlier. And, and, and- Sure, sure. While in India, while in India, we will see some bit of deflation, but also in international markets, the currency devaluations are still playing a role. It's very difficult to say at this point of time, you know, will we cross 20% or not. Yes, we would definitely improve versus last year. That is the intent, but whatever is the upside in gross margin, we will want to plow it back to the media spends and generate demand for the future. Okay. Okay. Yeah, that's all from me. Thanks and all the best. Thank, thanks, Percy. Yeah. Thank you. The next question is from the line of Shirish Pardeshi from Centrum. Please go ahead. Thanks for the opportunity. Just to start with, I think we have seen a base effect now playing out in the healthcare. Would you be a help, help us to give some thoughts how we should look at quarter two, quarter three onwards? Because I, I, I would assume now inventory also would have been depleted very sharply. Shirish, as far as inventory is concerned, I don't know inventory is depleted or not, but I can tell you a couple of examples, that we were carrying a lot of inventory in e-commerce for healthcare, and that inventory is getting depleted as we speak. Chyawanprash growth is still not back on track, and Chyawanprash CAGR continues to be around 11%. Still, Chyawanprash is not growing as we would expect it, although it's a lower base for Chyawanprash, non-season for Chyawanprash, but still the decline in Chyawanprash is to a tune of around 9% or so, but this is not the season. In the season, we expect Chyawanprash to actually grow. It's not a depleted inventory, that's the point I'm trying to illustrate. It's a normal course, par for the course of inventory in healthcare. That said, Healthcare should trend at a double-digit growth. A high single to a double-digit growth is what we should see in Healthcare going forward. All verticals of Healthcare should have a price increase element that we had taken last year, and backed by mid-single volume growth, and we should see a double-digit growth in Healthcare going forward, with baby care actually leading the pack and honey has been doing well. I don't know, but for the recent controversy, it, I don't think it should impact the business much, but honey continues to do very well for us. In the season, glucose was impacted because it is summer-centric portfolio. Next season, going forward, when we do the loading in Q4 for Q1, I think that should be better. Healthcare should give us a high single to a low double-digit growth for the full year. Just to add on, maybe, you know. Yes, you're right, the abnormal bases have evened out. Business will now grow on a normal trajectory. That's what I was expecting. Okay. My second question is on the hair oil. From the presentation, I can make out that we have launched a Dabur Cool King. I think that's gone into the market. So can you, can you share some initial feedback, how this product has done well, which are the markets you're seeing the pickup, or any color on that? We launched it in the month of May, actually pageant of the May. It's seen two months of implementation in the marketplace, May and June. The initial response of the product has been very positive. The advertising that we released has been received very well with the consumers, and we've gained 15% relative market share to market competitor, a market lead player in whichever towns and markets that we have launched. We have launched it in UP, we've launched it in North, and we've launched it in Bihar. These are the parts that are most impacted by the summers, and that's where the cooling oil goes. An INR 1,000 crore category, and they're dominated by a single monopoly player. We made multiple attempts in the past, all not very successful. Again, we tried to enter because we are trying to plug all the gaps of Hair oils. Initial feedback is very positive, but Shirish, we'll have to come back again next year and make a full-hearted, because the summer was muted this time. But that said, the product response and the repeat purchase in the range of around 25%-30%, which is very encouraging. The reason why I'm asking this question, because, similarly, even Marico and Bajaj Consumer has also made inroads in the cooling segment. I was saying, is the growth rates are so impressive that, that's why everybody's trying to get into the footing? Not really. I think it's a plugging of gap of the portfolio and each competitor. I don't know, I can't tell about themselves. As far as we are concerned, we see this as a definite gap in our portfolio, so we want to plug the gap wherever we have a right to win. We have a proposition which is very unique, which has been introduced with a chill tube in it. First time there's a tube in a bottle, which has got camphor crystals in it, which provides cooling and perpetual cooling. No other player in the market has got this kind of a proposition. On back of this proposition and Dabur having a right to win in the hair oil market, we feel we have good chances of success here, and that's why we are kind of pushing it. This is in line with our Dabur Amla being strong brands and plugging the gaps in all the portfolios. That's what we are trying to do. Okay. My next question is on the NPD funnel. I think last 15 months, we have tried various products. Starting from the baby care range, we have drawn some dry fruits, we have gone into the mustard oil, edible oil. Now when we look back, what is the thing which is working or what is looks promising? Maybe if you can guide over next one year, what is your NPD funnel? I mean, not the product, but what is your target in terms of contribution to sales? We will always maintain that our innovation as a percentage to overall business should be in the range of around 3%-4%. That's what happened in the current quarter also. Our total NPD to total revenue is around 3% of the business across all verticals. That's what we want to maintain. But for emerging channels, the e-commerce, where the NPD to the business revenue is in the range of around 10% or so, because that's an incubating funnel for us. As we keep incubating and doing proof of concept checks, once it's successful, then we roll it out to MP and e-commerce. That's our playbook. That's been established very well. In terms of successes, baby care is a definite success. In Healthcare, I'll not talk about Healthcare to you. Baby care is definite success. We hit a turnover of exit of around INR 20 crore. Now we are making it mainstream. This year, target is around INR 50 crores. What we are doing, Cool King, we've already introduced. We've done a INR 6 crore of revenue number. It's a seasonal brand. Next will follow. Wave fresh gel, we've already launched in the marketplace, a entry into our gel category. Odomos brand will increase the addressable market, and we are launching Odomos LVP going forward. The edible oil portfolio, the entire edible oil, mustard oil, sesame oil, and heart oil that we have got, that will stay on e-commerce for us, and it's doing very well. It's actually, we are constraining supplies of the edible oil portfolio in the marketplace, deliberately, because it's a contingency portfolio kept for us in case of any frying time. That's there. Our coconut water continues to do well. Real Fizz-...As you know, has done very well. INR 200 crore of drinks franchise we have already created. Our Dabur Ghee, as we speak, is INR 10 crore in exit. It's again, we can open floodgates, but we are deliberately keeping it restricted. Hajmola extensions of Limkola, Chatkola, now Fantola being launched, are doing very well, and they are contributing to around 10% of the overall Hajmola business. Hajmola has grown by around 15%, and 10% of the turnover is coming from innovations over there. Our tea, our entry into chai was an attempt that we did, and I think this year we have taken a turnover over INR 10 crore-INR 11 crore coming from our Ayurvedic tea. Our health juices has grown by around 20% in the current year. Overall, around 3%-4% of our business should continue to come from our innovations, which are future pillars of growth going forward in the future for us. It's lying with our increasing our addressable market under the guardrails of our power brands, which we'll keep strengthening, which are the core of the business, contributing to around 70%-80%. That's helpful, Mohit. Just one follow-up here. It is, it is heartening to know that you have a very strong NPB funnel, but how do you manage this complexity, running these all businesses, right from supply chain to manufacturing to the front end and at the distributor level? Yeah. I think it's not very complex because I told you it's done within the guardrails of the power brand architecture. Now, to tell you a guardrail of a power brand, I'll illustrate you with an example. Hajmola is a brand which has got three variants. I'm introducing two more variants. It runs on the same line, it runs on the same bottle. Only the color of the cap is different and the laminate is different, and the same supply chain handles it, same distribution handle it, same distributor handling it. I think it doesn't cost us much, and new variants bring in more vibrancy and a better incremental business. Similarly, Real brand. The Real brand is now available in a pet bottle. Earlier, only a Tetra Pak was going. Now, a pet bottle is also made available. Earlier, 5 variants were going, now 7 variants are going. The batches become multiple, but that complexity we are geared to manage. We have learnt it through our international business also, where the population is lesser and the runs are smaller and changes in the line can frequently happen with efficiency and economies. That we have learnt over a period of time. I don't think there's too much of complexity. As far as Hair Oil is concerned, again, similar bottles, similar there is economies which are there. It gives more news to the salesman to sell and better throughput at the outlet is being promised. I don't think there's too much of complexity being added here. Rahul, you want to add something? Rahul, we happen to have a privilege of having Rahul along with us. Maybe if he wants to add something. For Shirish, for many innovations, we adopt a principle of open, open innovation, wherein we are not only deploying our own capability, but we, we are taking help of lot of third-party manufacturing already available, which are having the same kind of format already being produced. Many of these innovations are not creating complexity in our manufacturing setup, and they are very fast to do, and that is the reason why we are able to roll out innovation in such a faster way. I got that, Rahul. That's really helpful, but just wanted to check at the front end, when your distribution is common, length, so in that, how the distributor is doing justice selling all these products, unless it is-? Yeah. Shirish, channel-wise, as far as... I'll give you a little more granular answer. e-commerce is a common channel. They're open to innovation, so there's no pressure there. is the case with modern trade, we furnish them directly. Distributor interface in 80% of our modern trade is not there. Now, coming to GT, which is 70% of the business, complexity arises there. There, we are planning to increase our feet on street. A, we are appointing more number of sub-stockists and more number of Yodhas, that you know. As far as the- in GT, we have 3 separate verticals: Healthcare distributor, HPC distributor, and Foods distributor, separate. With the common distributor, we are trying to segregate lines also, and depending upon the threshold of turnover, we are separating HPC into HPC one and HPC two also, and adding more feet on street in sales and marketing cost to ensure that delivery and execution happens of the NPDs that we introduce. Wonderful. Thank you, Mohit, and all the best. Thank you, Shirish. Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead. Hi. Thanks for the opportunity. Two questions from my end. You know, what could be the current sales mix of OTC and ethical? You know, you obviously talked about new initiatives in the ethical piece. You know, going forward, as we are, you know, trying to scale both, could you give us some sense on margins? Are margins similar or higher between OTC and ethical? Secondly, on the beverage business, you know, what happens when there is, you know, unseasonal rains or delayed summer? Does growth happen in the balance of the year or on an exit full year basis? Is it fair to say growth remains muted or flattish, or festive season can drive growth for beverages? All right. First part of your question, OTC and ethical, almost 50-50% of the total turnover that we have, and margin profiles are also pretty similar because most of the ethical portfolio is the one, once it crosses the threshold level of turnover, moves to OTC for us. There is no margin profile difference between OTC and ethical, and it's almost 50-50% of our portfolio. Like Hajmola, where it was a classical or ethical product. It was used to be called Shudhavardhak Churna, and then we nomenclatured it as Hajmola, and we are calling it OTC now. That is how we change it. Ethical and OTC is a different life cycle stage. In the previous cycle of the life cycle, it is called ethical, then it becomes a branded ethical, then it becomes a OTC for us. That's a life cycle stage, depending upon the turnover. For eg., Stresscom is a branded ethical, which is called a Stresscom, but the active ingredient over there is Ashwagandha. When it is ethical, it is called Ashwagandha. When it moves to branded ethical, it's called Stresscom. When it reaches an INR 5 crore turnover, it becomes OTC for us. That is how we look at the life cycle stage management for our ethical to branded ethical to OTC to FMCG business also. That's the way our healthcare. It's again, a playbook very well established in Dabur over years, and we stick to that. The margins are pretty similar, which are accretive to the overall margins of the company, both from a gross margin perspective and from a net margin perspective. The requirement of advertising is so much more lower. With establishing this advocacy vertical, we will be able to now do more advocacy and reduce more advertising, which is where we have more attrition of the consumers. Again, we have to advertise, again, lapsing happens, but with doctor, doctor remains the same along the life cycle of the product, and therefore requirement. That's why pharma margins are much higher as compared to a OTC or a FMCG margins for you. Second part of your question is beverages. Now, the season has impacted beverages on account of summers being lower, and 30% of the consumption of beverages is out of home for us. Out of home consumption, when the rains are there, people don't move out, and people don't move out, the eating and drinking outlets don't have that kind of a throughput, and they are not able to sell. That's why the portfolio gets impacted. If rains are not there, and the marriage season is great, which is what we think it should be, or Diwali season is great, if the, rain don't, play a damper or a spoilsport, then I think that season should not get impacted by beverages. Because the season is so heavy and it contributes to around, 30%-40% of the total consumption for the whole year, a little impact for the full year business definitely happens. Understood, Mohit. Very clear. Thank you. Thank you. Yeah. Thank you. The next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Hi, thanks for the opportunity. Mohit, my first question was on, you know, your expectations on volume growth progression for the rest of the year. You know, we start lapping even a lower base as we come into the next few quarters. Depending on the rural recovery comments that I heard, do you anticipate volume growth trend to gradually move to mid to maybe even high single digit volume growth as we cross the year? Yeah, Latika, absolutely. I think, rightly, said. If you look at now, giving a little better answer for you to understand it. If you look at the volume growth across our verticals, our volume growth in beverage has been very muted because beverage season wasn't in favor, so volume growth was negative, which dragged the overall volume growth of the company down. If you look at the Healthcare volume growth, our Healthcare volume growth, while there was a 6-7% of price increase impact, the overall business has grown by 12%. There's a 6-7% of our volume growth in our Healthcare business. In HPC business, where the price increase wasn't very high, our volume growth has been in the range of around 7-8%. Going forward, this should be the volume growth going forward. Mid-single to high single volume growth going forward, and a beverage portfolio, a little bit negative, but definitely mid-single volume growth should be there in the business. Exports, this time, the volume growth is 6% for us in the Q1. Yeah, we will have to do. With the rural recovery happening, as we see, the rural has grown by 4%, we've grown by 8%. Volume growth in rural this time for the category is around 7.5%. On back of all this, we should see a definite volume uptick happening in the business. We are always monitoring our volume market shares. For us to grow ahead of the category, the volume growth should be ahead of a mid-single also, for us to gain market shares across 90% of the portfolio that we have. Sure. My second question was, you know, on beverages. Sorry, to check on this again, but you know, your earlier comments during the call suggested that for full year, for beverages, you expect a muted full year. I understand the Q1 as sluggish, which is about 30%-40% of the business. For the remaining quarters, are you okay if we build in some growth, or are you seeing any, any, you know, other challenges here, you know, of a high base or anything like that? See, we have taken a target of around 8%, 8%-9% growth on a high base of 40% of last year. We are looking at that target. For us, the season played havoc for us, but the targeted growth is definitely that. We see the month of July, 22 days out of total 30 days in July, was impacted because of rains. This is the extraordinary event that we are seeing, which wasn't planned earlier. I can't tell you guidance going forward for beverages because it is so much season-driven for us. That is what. We had targeted a target of around 8%, and we want to inch up to that particular target. All the incentives of the entire team, salesforce, and back end is linked to that particular target, Latika. The last one was just to get a sense of what toothpaste revenue and volume growth for the quarter, and also to comment on your CapEx plans by 2024, by 2025. That's all from me. Easier question first. The total CapEx is in the range of around INR 400-450 crores for the current year, and that's what. In the current quarter, we've done INR 160 crore of CapEx, full year we should be doing around INR 400-450 crores of CapEx. The second part of your question in terms of oral care. Oral care, the volume growth of the category is 2.5. We've done a volume growth of roughly around 8% in oral care, with Dabur Red as a flagship, gaining 50 basis points market share. The category of natural, which is 30%, was 30%, now has become 31%. We've launched gel also in the market, so I think we should definitely have a double-digit growth as far as oral care, driven by volume growth, for us for the full year in oral care. I think we are doing well in oral care. I don't see a reason why we should not perform well here. The business is on track and doing well for us. Sure. Thank you so much. Another point I just want to add, I missed out. Last year, we had issues with Reliance, because one of the SKUs that we had introduced in Reliance was undercutting into the GT market, which we cut back supplies. Now that also relationship has been thawed, and the business is back on track as far as modern trade is also concerned with Reliance. That also works in our favor then. This is toothpaste, right? Yeah, toothpaste. I'm talking about toothpaste. Okay. Like you know, we are already a number 2 toothpaste company in the country today, and we've placated the number two player, and we've become the number two player even in toothpaste now, in the last quarter. Mohit, if, if, my understanding is right, this issue was there in Q4, right? Does it mean that Q1 was a bit of, you know, that issue resolution with Reliance? Do you think this 8% volume growth kind of moderates a bit in coming quarters? Sorry, Latika, I didn't quite get your question. Sure. I, I'm just trying to understand if this, you know, issue with Reliance resolved in Q1. Do you think this 8% volume growth kind of moderates a bit, you know, in the coming quarters? No, no. It's the other way around. It was a issue in the last quarter. We have In the previous fiscal year, we have corrected that problem in the quarter one. Going forward, the business should trend well, even in Reliance, I'm saying. Last year, while in GT, we kept gaining share, but in Reliance as a modern trade and single account, we lost some market share. That relationship on oral care category manager is back on track. We should start gaining shares back in oral care, is what I'm saying. Okay, all right. I, I hear you. Thank you so much. Thank you, Latika. Thank you. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thanks for taking my question. Mohit, my first question was, with respect to the rural recovery. You seem to be sounding much more confident on rural recovery, but we are getting very mixed signals from most other management on rural side. What has changed for us? You talked about the bit single digit growth at the aggregate level on the volume side. You know, what is it that has specifically changed for us on the rural side, and any specific markets which you would like to talk about? Yeah, see, the way rural was, I'm looking at the market indicators in FMCG volume. Rural used to be -5 in Q4 of 2022. From -5 volume, it became to -2, then to -3, -3, then +0.3, and now +4. Definitely these are trends of almost a recovery that one is actually seeing if one, one plots a graph. The rains have been near normal. If you read the news articles, et cetera, you find that rabi harvest was impacted by monsoon, but kharif, you know, sowing has been great. I think this harvest would only happen in the winter season to come, and there'll be more money in the hands of the consumers. Wage rate in Manrega has also been taken up to around 10%. MSP rates have also gone up. This will increase the money in the hands of the rural consumer. While the category is growing at 4%, we have grown by 8% in rural. That is telling us that money is back in rural. Moreover, price increases have come down now, and as we move into next quarter, then the price increases will go down, and volume growth will actually start. When the inflation was high, price increases were high, it was pinching on the rural consumer, and therefore their propensity to spend was actually impacted. Going forward, I think things will only move back. Election year is coming, so government will also invest more money in rural, especially in the Hindi heartland, and business should be back. Some of the anecdotal examples is North. North is very high salient for us. It got impacted by monsoon heavily, and FMCG market was down there. We have seen where we are very salient with UP, MP, Bihar and northern belt also. We've seen our business growing by around 6-7% in the GT also, despite our beverages not firing. Which was sub-stockist network is kind of, you know, yielded results for us in the North. That is telling me, giving me confidence that rural should be doing well for us going forward. I don't see a reason why rural should not, because if you look at around, you know, if I look at Q4 of FY21, rural was always the one which was leading the growth and urban was following. Now, both urban and rural are kind of growing well. I think rural, we should keep inching up, and the gap between urban and rural should keep narrowing, and rural should fire. But you know how monsoon and the climate change is impacting the world, I don't know how things will be, but I just hope that rural fires and that augurs well for us. We are highly salient in rural, with 45%-50% of our business coming out of rural. Any early signs of upgrading, you know, because last year we were seeing a lot of downgrading, so in any categories where we have seen a switch? Not really. We've not seen any signs of upgrading, but that said, the price increase, in fact, has kind of moderated now. Now it's an even keel. The shock of price increase is now in the base, and that is a kind of upgrade. Consumer has gotten used to it, and now they are buying products. Upgrading in the sense that a 8 ml sachet has become a 6 ml sachet, and that's now in the base. That is kind of an upgrade in a sense that you may take it like that. A lot of bridge packs which have been launched in the market, they're already got structured or penciled in the bases now. That is a par for the course going forward. Yes. Thank you. I just one more question, and I'm not sure whether there will be an answer here. From a portfolio perspective, what would be the share of brands which would be, say, less than INR 50 crore per hour? You know, you talked about baby products, where we are very excited about it, is at INR 20 crore. Do we have a number here? That is, what percentage of our portfolio would be less than INR 50 crore? Overall portfolio. I think we have the number. We can get back to you. We can get back to you with the exact details. Yeah, I, I will get back to you, but I think broadly to tell you, 75% of the portfolio is power brand, power brand portfolio, and none of our power brand is below INR 50 crore. All are in the range, with the exception of Pudin-Hara, which is in the range of around INR 60-70 crore. Rest, all are above INR 100 crore portfolio. 75%, the rest is 25% of the portfolio, out of which there will be many of them which are more than INR 100 crore, but not a part of power brand architecture. Definitely it will be below around INR 20 crore. If you ask me number of brands, number of brands will be more than 20, because Dabur has so many brands. In terms of percentage, turnover coming from less than 150 crore brand should be, yeah, around. Maybe 10, 15. Ten, fifteen. Ten, fifteen percent. Thank you. I hope I would have confused you more. No, no, this is very clear. Thank you so much. Thank you. Thank you, Sheela. Thank you. The next question is from the line of Vishal Punmiya from Yes Securities. Please go ahead. Yeah, thank you. Just wanted to understand our OTC growth a little better. So we had a impact in our base quarter because of the COVID-related portfolio. But when I look at the CAGR performance, it looks like the OTC portfolio has picked up quite well and is reporting a strong growth even on a CAGR basis. So what is helping this growth in OTC portfolio? And also, if you could help with the OTC revenue decline in the base quarter. That's all, that's all from my side. Thank you. Yeah. I think our OTC has got subparts to it. The first part, the digestive part of the portfolio, which is Hajmola, is our lead brand there. That has grown by around 15%, and that is growing on back of a lot of innovation that we've done in Hajmola. As I told you, Chatkola, Limkola, and now Fantola coming in, I think they should be the ones which should be driving the growth. Our Pudin-Hara portfolio has been a little muted in OTC because of the season. Pudin-Hara is more summer-centric portfolio that got impacted. That's not done well. Our Lal Tail, which is a baby care brand, that has done exceedingly well, growing by around 15%-16%. That is doing well on back of market share gains that we've gained market shares in the market from Johnson and Johnson, which is a market lead player. The fourth power brand is Honitus, which is cough and cold. That on a higher base, has still grown by 30% odd, and it is continuously taking share from other competitors like Benadryl and Torex, et cetera. The four-year CAGR is around 22% for our Honitus. It's year-on-year, we are taking share from the market lead player and growing because the size of the market is very big, and we still, in terms of market share, are sub 10% in Honitus brand. There's a huge headroom for growth here. The fifth brand is Shilajit. Shilajit is grown, is growing at 20% four-year CAGR for us. That is a men's wellness. That is a category, is actually growing very well. Even Dabur has juices, for that matter. What was the decline in the base quarter for OTC? No, no, there was no decline in the base quarter. It's coming on a high base, and the base quarter, the growth was in the range of, Ankush? Just check. We will, we can just check. Because OTC and Ethical together is about 15%. No, it might be because of COVID. We can come back to you, Vishal. We don't have the data readily available. One can come back to you on the base number. Reason for base, yeah. Sure, sure. No issues. Thank you. Thank you very much. Thank you. 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, Aman. Thank you for everyone for your participation in this conference call. The webcast, audio recording, and transcript of this call will be available on our website. Thank you, and have a nice evening ahead. Thank you very much. Ladies and gentlemen, on behalf of Dabur India Limited, that concludes...