Ladies and gentlemen, good day, and welcome to Hindustan Unilever Limited conference call for the results for June quarter 2022. 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 Mr. A. Ravishankar, Group Controller and Head of Investor Relations. Thank you, and over to you, sir. Thank you, Steven. Good evening, everyone, and welcome to the conference call of Hindustan Unilever Limited. We'll be covering this evening the results for June quarter, ended 30th June 2022. On the call with me from HUL is Mr. Sanjiv Mehta, CEO and Managing Director, and Mr. Ritesh Tiwari, Chief Financial Officer, HUL. We'll start the presentation with Sanjiv sharing an overview of our performance in this quarter and the operating environment. Ritesh will then cover our financial results in more detail and share our future outlook as well. Before we get started with the presentation, I would like to draw your attention to the safe harbor statement included in the presentation for good order's sake. With that, over to you, Sanjiv. Thank you, Ravi. Good evening, everyone. Thank you for joining us on the call, and it is always a pleasure to interact with all of you. Let me begin with a quick summary of our performance for the quarter and then cover the external environment and our strategy. Then we will have our CFO, Ritesh, take you through the results and outlook. In this quarter, we grew our top line at a strong 19% with a decent underlying volume growth of 6%. In an environment that was extremely challenging, we focused on growing our consumer franchise and protecting our business model. Our growth has been ahead of the market, and we continue to gain value and volume share in more than 75% of our business. Our EBITDA margin at 23.2% remain healthy in the context of the unprecedented inflation that the country as well as the industry is witnessing. Overall, this has been a good start to the fiscal year, and we are on a strong momentum with 11% EPS growth, clearly reflecting the strength of our brands, the capabilities that we have, the strategic clarity and the agility to run the business. Now let me spend some time on the external environment, the inflationary situation and the market growth. Inflation has been a big challenge for the industry for the last few quarters. There have been periods of high inflation in the past as well, but what makes this different and challenging is the fact that prices of several commodities have inflated to the decadal highs at the same time. While the chart that you see is not an exhaustive one, but it gives you a good idea about the kind of inflation that the industry is witnessing. Again, for ten-year median price, you will notice that Brent crude, caustic soda, polyethylene and barley have all inflated by more than 50%, and the prices are at an historic high. Palm oil, which has seen more than 100% inflation, has softened in the recent days from its peak. These saw extremely high inflation in 2021, and since then has cooled off from the peak, but is still at relatively high levels. The other source of inflation has been the currency depreciation. The dollar strengthening and the USD INR rate that was relatively stable around 74, 75 is now hovering around 80. Very clearly there are two things. One is that several commodities are at the decadal high. Secondly, despite the recent cooling of a few commodities, most of them remain significantly elevated versus the long-term averages. Let me now talk about the FMCG market growth in reference to the categories we operate in. As all of you know, it's a pretty broad-based categories that we operate in. In June quarter, markets have grown in mid-single digit, driven by price growth. Volumes continue to decline. Rural growth continues to lag growth in urban markets. We should also keep in mind that optically, on a year-on-year basis, June quarter looks better than March quarter, but that is on a low base of 2021, where the country was going through second wave of COVID. However, when we look at the market growth on a three-year basis to compare against a normalized baseline, we can see that the volumes are nearly flat, both in March quarter and June quarter. There is a slight uplift in value growth, which is due to incremental pricing. Rural growth also remain in the same trajectory. In such inflationary scenarios, it is but natural for consumers to feel the pinch of increased pressure on their wallets, and they do adjust volumes and drive a tide, essential over discretionary, to manage the household budgets. In this difficult times, as we have articulated in the past, we have two clear imperatives. First, we need to navigate the short-term challenges with agility and grow our consumer franchise while protecting our business model. Secondly, we need to continue single-mindedly on a journey to create a purpose-led future for HUL. Deliver on our 4G growth agenda. We are making great progress on the five strategic choices that I had covered in detail during the March quarter results. Just to recap for your benefit. First is developing a portfolio by growing the core ahead of the market, accelerating market development or creating the future market and driving premiumization where we are with all the thrusts over the years are over-indexed to the market. We are investing behind our brands and in market development of under-penetrated categories. We continue to upgrade the consumers to higher order benefits, thereby growing a premium portfolio at twice the growth rate of the rest of the business. Second, win with a brand with a force for good, powered by purpose and innovation. Our focus is on providing value to the consumers through superior products and impactful innovations. Third, leading the channels of the future. Excuse me. We continue to expand our presence in e-commerce and drive digital adoption through the B2B app, Shikhar, which has now been adopted by over 9.5 lakh or 950,000 retail outlets. Put together, our total digitized demand capture is now more than 20%. Fourth, build differentiated structures and capabilities through our Reimagine HUL program to digitally transform HUL from linear value chain to an interconnected web of ecosystems powered by data and technology, leveraging our winning strategy to de-average India and find growth opportunity. The last one is to build a purpose-led future fit organization and growth culture by empowering our people, giving them the environment to thrive and outperform. Talking about purpose, we have taken a big step in this quarter and announced a full suite of ESG commitments across our three focus pillars of planet, people, and society. Unilever globally has always stood out as being the pioneer in sustainability with a vision of making sustainable living commonplace. Way back in 2010, many of you would recall that ahead of the industry, Unilever had codified what was famously called the Unilever Sustainable Living Plan, which detailed out our sustainability strategy. In early 2021, Unilever fully integrated the business in sustainability and announced a single integrated Compass strategy with very clear time-bound actions. Now we took inspiration from Unilever's Compass to create a time-bound and focused ESG commitments. What you see here is of course a ready-to-read chart since we have been ready-to-read chart in our ESG commitments. Let me now talk about a few of these. Under our first pillar, which is improve the health of the planet, we have taken a target to achieve zero emissions in operations by 2030, which will be ahead of India's COP26 commitment. Further, we aim to have net zero emissions from all our products from sourcing to point of sale by 2039. We are also committed to transitioning from fossil fuel-based carbon in our cleaning and laundry products by 2030. By 2023, we want to create a deforestation-free supply chain in palm oil, paper, board, tea, et cetera. Contribute to creating a water potential, cumulative water potential of 3 trillion L in India by 2025. By 2025, 100% of our plastic packaging will be reusable, recyclable or compostable. Our second pillar is to improve people's health, confidence and wellbeing. Here we are committed to doubling the number of products sold that deliver positive nutrition by 2025, and we will also take action through our brands to improve the health and wellbeing and advance equity and inclusion. Our third pillar is to create a fairer, more socially inclusive world. Here we are talking about creating an equitable and inclusive culture, ensuring that everyone who directly provides goods and services to us will earn at least a living wage or income by 2030, and we will pioneer new models to provide flexible employment opportunities. These are audacious targets, but we are confident about achieving them and being the leader in sustainable business. With this, let me now hand over to our very competent CFO, Mr. Ritesh Tiwari, to talk about the performance of this quarter and our outlook in detail. Thank you, Sanjiv, and good evening, everyone. I will now walk you through our in-quarter performance and our outlook. We had a strong start to the year with a robust 19% top-line growth and an underlying volume growth of 6%. Growth has been ahead of the market and we continue to gain value and volume shares in more than 75% of our business. Moving to our bottom-line performance, profit after tax before exceptional items grew 17%. Net profit at INR 2,289 crores grew 11%. There was a one-off prior period tax credit in June quarter 2021, and it largely explains the difference in growth of PAT and PAT bei. Our EBITDA margin was at a healthy 23.2% despite the unprecedented inflation. Let me spend a couple of more minutes to bring to life how we are navigating this challenging environment through dynamic financial management. As we had anticipated and called out early in March quarter results, inflation has further worsened in this quarter, and prices of many commodities are at their decadal highs. This has led to a 330 bps year-on-year increase in our cost of goods sold. Despite this, we have been able to hold EBITDA margins at a healthy 23.2%, a 110 bps year-on-year decline. This was possible due to our clear focus on fundamentals that we've been consistently speaking about. First, ensuring that we always support our brand and maintain our share of voice ahead of our market shares. As you can see, our A&P expenditure has increased 70 bps year-on-year as we continue to invest at competitive levels and lap a relatively weak base. This is a 30% absolute rupees growth increase year-on-year. Second, investing in our product and giving better value to the consumers. Our product superiority continues to be 2x of pre-COVID levels. Third, we continue to take calibrated pricing actions. Our UPG for the quarter was 12%, a step up from 10% in March quarter 2022. The most important thing is to drive savings harder and optimize all non-consumer-facing costs. Through this frugal mindset and growth leverage, we have delivered a 270 bps reduction between other expenses and employee costs. Moving on to performance across our three segments. Home Care delivered yet another quarter of robust performance, growing at 13%. Beauty and Personal Care grew ahead of market at 17%. Foods and Refreshment had a steady quarter, growing at 9%, led by a stellar performance in ice cream. Our margins in Home Care were flat on a year-on-year basis, as an increase in costs were offset by strong savings, operating leverage from high growth and price increases. BPC margins declined by 180 bps year-on-year, largely due to very high inflation, which was partly offset by savings, growth leverage and price increases. Foods and Refreshment margins declined by around 200 bps, largely on account of step up in A&P investment and an adverse mix coming from higher growth in ice cream business relative to other categories like healthful drinks and tea. We will sit down to talk more about performance within each of the divisions in subsequent slides. Despite high inflation, we have continued to build our brands through consumer relevant innovations and activations. In this quarter, TRESemmé has launched its Pro Pure range, which includes shampoo, conditioner, serum, and mask across two variants, damage recovery and moisture boost. It is a premium offering in clean beauty space. Our premium naturals brand, Love Beauty and Planet, has expanded its portfolio with three new products for hair fall reduction and deeply nourished hair. Taking its strong Ayurvedic credentials to newer format, Indulekha has launched hair serum and mask. Dove introduced Derma Protect Moisturizing Body Wash for ultra gentle care. Lakmé expanded its skincare portfolio with facial foams that has a built-in silicone facial brush that gently exfoliates. In April, Lakmé launched a new range of body serums especially designed for Indian summers. The launch was followed with focused activation across TV, digital, and influencer marketing. Our fabric conditioner brand, Comfort, has launched a new variant, Delicate, which protects delicate fabrics and gives unbeatable softness. Talking about our new marketing campaigns. Through its purposeful and iconic MeriBetiStrong campaign, Clinic Plus is celebrating mothers for being the first role model in their daughter's lives. Dove's new campaign is bringing forth the product benefit relevant for its consumers. Underlining its belief that game is about stamina, not gender, Boost sponsored the women's T20 challenge and deployed various on-ground activations, including the stamina meter. Bru's WIMI film is talking about its great aroma that is hallmark of a perfect cup of coffee. Moving on to our performance in Home Care. Our business grew at 30%, enabled by robust performance in both fabric wash and household care. Both categories grew in strong double digits with all parts of the portfolio performing well. Supported by our strong market development actions, liquid detergent and fabric conditioners continued to outperform and lead growth for the business. Our dishwash brand, Vim, was recognized by Kantar for fastest growing consumer reach across FMCG brands globally in the last quarter. With more input cost inflation, we have continued with our calibrated pricing actions in both fabric wash and household care. Talking about Beauty and Personal Care. We grew 17%, led by strong performance in premium portfolio across categories. Soaps delivered price-led double-digit growth. Duty and premium soaps continued to outperform. Demand for hand hygiene products moderated on a relatively high base. Hair care grew in high double digits. Our premium brands, TRESemmé and Dove, are performing very well and are at the forefront of driving consumer upgradation to higher order benefits. Further, we are seeing good performance from our innovations such as TRESemmé serum and mask, Dove mask, Sunsilk Onion, and Clinic Plus egg protein variants. In skincare, Pond's and Lakmé delivered robust growth and are now significantly ahead of pre-COVID levels. Glow & Lovely and Talc were impacted due to slowdown in discretionary consumption. Color cosmetics had a very strong growth on a soft base and is marginally below pre-COVID levels. In oral care, Close-Up continues to grow consumer franchise. Let me now turn to Foods and Refreshment. F&R grew 9% with a strong performance in ice cream and foods. Tea continued to cement its market leadership and deliver steady performance on a high base. Coffee sustained its growth momentum and grew in double digits. In health food drink, we continued to focus on market development actions to build category relevance. These actions have helped us continue gaining market share and penetration. As we had mentioned earlier, the category growth have been impacted significantly due to inflation, and this has led to a subdued quarter for HFD. Foods delivered double-digit growth led by strong performance in jam and food solution business. ice cream delivered another stellar performance with very strong growth across brands and formats. Our innovations like Trixy Cheesecake and Feast Black Forest have found good traction with consumers and done extremely well in this quarter. Our home delivery solution, ICNow, continues to gain relevance and is a significant source of growth for us in this category. Let me summarize. Our performance has been strong both on top line and bottom line. While I have covered most lines, let me pick up couple of more things to elaborate. Increase in other income is largely due to higher income from services rendered to Unilever Group, higher commission on OTC chains of GSK CH products, and government grants. Finance income is higher in the quarter due to improvement in treasury yield and a one-off interest received on income tax refund of about INR 40 crore. Our ETR for the quarter was 25.8%. As I mentioned earlier, we had a one-off tax prior period adjustment in June quarter 2021. ETR for this fiscal is expected to be around 26%. Now moving on to our outlook. Inflation continues to be a significant challenge. As you can see, market prices of most of the commodities have further increased sequentially in June quarter 2022 and are at very high levels. In March quarter results, we have spoken to you about the measure that we use in our business to look at inflation. That is net materials inflation or NMI. As a reminder, this is net absolute inflation that the business faces after factoring in all savings and efficiencies. As a percentage of our total material costs, NMI in June quarter 2022 was circa 20%. We need to be mindful that this is on top of 9% inflation that we had in GP 2021. Given that the correction in some commodities like palm happened last couple of weeks of June, we will have higher cost pipeline inventory that was contracted earlier. With consumption of this inventory ending and many of the commodities like crude oil, caustic soda and plastic remaining elevated year-on-year, SQ NMI will be higher than June quarter. Needless to say, we will continue to extensively drive productivity improvement in our business and take calibrated pricing actions. However, cost of goods sold will be higher in September quarter as price versus cost gap widens. If the softening that we are lately seeing in commodities remain, we expect DQ NMI to be lower than September quarter. We would need to wait and watch how the commodities play out in next few months to get a sense of exact quantum of reduction. Looking ahead, in the near term, growth will be price-led as inflation continues to impact consumption. As I mentioned, most commodities have further inflated in June quarter and continue to remain at very high levels. This, along with consumption of higher cost pipeline inventory, will result in our SQ margins to remain under pressure. The recent softening of commodities also benefits us, and in this phase, it will positively impact our sequential margins from December quarter 2022 onwards. Our two clear imperatives remain. First, our priority is to grow our consumer franchise and protect our business model. We will do this by investing competitively behind our brands, driving savings harder, and taking calibrated pricing actions as needed. Second, continue on our journey to create a purpose-led future-fit HUL and deliver 4G growth that is consistent, competitive, profitable and responsible. Before we move to Q&A session, let me summarize what we covered till now. We had a strong start to the year with 19% top line growth and 11% EPS growth. Our growth was ahead of the market and more than 75% of our business is winning shares. Despite the unprecedented level of inflation, our EBITDA margin remained healthy at 23.2% as we continue to drive savings harder and take calibrated pricing actions. In the near term, growth will be price-led. Our margins in September quarter will remain under pressure. If the recent softening of commodities were to remain, it will positively impact our sequential margins from December quarter onwards. With this, let me hand over to Ravi to commence our Q&A session. Thank you, Sanjiv, and thank you, Ritesh. With this, we'll now move on to our Q&A section. We request you to kindly restrict the number of questions to a maximum of two at a time. In case you have further questions, please do join the queue again. In addition to the audio, as always, participants have an option to pose the questions through the web option on your screen, and we'll take these questions at the end. With that, I'd like to hand the call back to Steven to manage the Q&A session for us. Steven, over to you. Thank you very much, sir. 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 Edelweiss. Please go ahead. Yeah, thanks, and congrats to team on the numbers. My first question is on the disruptive innovation happening in the liquids. So, for example, you came out with a INR 10 hand wash, powder to liquid. Competition had come out with INR 15, and now competition has come out with a INR 25 disruptive pricing product. So my question is: What do these kind of disruptive innovations do to the category innovation and margins? Because ideally, you would have liked to grow that at with a premium product rather than a premium product at a value pricing. Could you elaborate on medium long term, is this more of a niche segment or this will become the main part of the liquids? Abneesh, thank you so much. Talking about innovation, Abneesh, you remember we called out in our full year results 2021, 2022, that we had INR 900 crore delta turnover that we added because of driving innovation across the length and breadth of the portfolio. Innovation continues to remain an extremely important element for us to drive competitive growth, be it in skin cleansing or for that matter, any other category in the business. Second element for us, equally important of innovation is also to drive market development. Market development being driven through price point packs, through different formats and indeed different innovations which will be able to bring market development. Now, every category, which today has very low amount of penetration, many players, will end up making innovations to drive penetration and ensure that the category growth keeps coming up. The examples that you quoted are examples like that. Across multiple categories, we keep doing that. Be it, innovation, you heard many examples I was quoting today on premium products and clean beauty. Wherever we do see demand spaces attractive, wherever we do see market development need to continue to build penetration, we will continue to deploy, innovation with impact across the portfolio. No, one follow-up there. Margins in these disruptive innovations will be similar to your solid body wash, right? Margins won't improve because of this. Yeah. What happens, Abneesh, for many innovations, for example, when we do innovations in premium category, we see margin accretion. There will be also premium products with which we will end up investing more in the initial stage of market development or launch for that matter. Margin profiles could be very different. It all depends upon the objective that we have defined that we want to do. Ultimately, for any innovation or market development, the first single biggest objective is to grow and ensure that we're able to get consumer franchise for that product or for that format and price point. That's the single biggest objective. Some innovations end up being margin accretive because there's a lot of innovation in premium portfolio across brands. Yes, sometimes, as I mentioned, we will end up investing more in certain products. Margin profile in short term might be different, but the whole objective there is to ensure that we're able to gain penetration and grow our consumer franchise in that product segment. That's useful. My second and last question is on the divergence in the performance of two categories. Premium skincare is now significantly ahead of pre-COVID, while color cosmetics is marginally below pre-COVID. Ideally, as a layman, I would have thought, these should grow almost similar, given they would depend upon mobility, colleges restarting and offices also. These are being back to normal. Is there a difference in the consumer behavior? D2C is picking up more in cosmetics or in cosmetics there is a mass end which is underperforming, the premium, cosmetics are doing well? You know, our mass end also of color cosmetics has picked up. You know, when you are comparing, you're right in saying that color cosmetics has the mass range, popular range and premium range. Whereas premium skincare, as the name alludes, is primarily premium. It is very clear, Abneesh, that premium has remained very resilient. Yeah, if you look at the Nielsen numbers, the premium is growing both in value and volume. This is very clear. It is not counterintuitive because premium caters to consumers who are in the top 7%. They have more disposable income, and this is a smaller part of their wallet spending as compared to rest of the population. We are very optimistic about our color cosmetic business, and it has bounced back very strongly. Sir, Sanjiv sir, one last quick question. I know I have completed my two questions. Sir, you speak of very good growth in almost every category, which is a commendable achievement. When do we see good growth being mentioned in health food drinks, where you are still mentioning the market share penetration gains, et cetera? When do we see double-digit growth being maintained this year? I know that's a right valid question, Abneesh. What we've been doing is we continue to focus on the fundamentals of the business. Had COVID and inflation not happened, with all the work that we have done, we would have bounced back strongly. The market share gains have been superb. If I look at the history of this category in this short period, it would be the highest market share gains we have seen for many years. Same goes with penetration. You know, but when you look at the price of milk going up significantly. Different factors have affected the category at different point of time. There was a time when the children remaining at home, the mother had many other alternatives. Now, when you look at this category, price of milk going up significantly. You know, cost of Horlicks with milk, which used to be about INR 12 earlier, is now INR 18, yeah? That all those factors have contributed. We will remain committed, because we believe that this nutrition category is so essential for the people of India to give them the right kind of nutrients. Year here, year there doesn't faze us, yeah? Because our focus will be on doing the right things, and time will come when we will unlock the top line growth also for this. We must also, Abneesh, accept that this is a very profitable business. While there is a stress on top line growth, the fundamentals are strong, and we are still very bullish about its future. Sure, sure. Thanks. All the best. Thanks a lot. Thanks, Abneesh. Thank you. The next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead. Hi, good evening, everyone. Two questions. First is on the rural demand. I mean, some of your competitors are of the view that rural is picking up. Others have a view that it has bottomed out, yet to show a pickup. Given that you are the market leader, what is your view on rural, from a demand standpoint? Yeah, thanks, Vivek, and good to get this question from you. You know, when I look at market, and that would be the best way to answer your question, is the rural demand from a value growth perspective, say if I were to look at the total FMCG is 7%, urban is slightly above 9% and rural is about 4%. Yeah. When I look at the volume growth for the last three months, urban is about -3% and rural is -7%. This is the closest you can do to assess the rural demand. Rural demand still remains soft. You would have seen from Ritesh's chart, if you put a three-year picture together, then the distortion go away. While the value growth in urban is higher, the volume growth is nearly flat in both urban and rural. Yeah, virtually very little change. That would indicate that you know, from a longer term period, if you remove the distortion, there is not much difference at all. In fact, quarter-on-quarter, for a three-year basis, rural may be, value may be a slight higher than urban. Yeah. If we remove the year-on-year growth perspective and look on a longer term bas is, not significantly away. Where we see some of the green shoots, of course, is, you know, one is the government has done a very sensible thing in terms of enhancing the commitment on fertilizer subsidy by nearly INR 1.5 trillion, giving free food to the rural population, primarily rural population. The monsoon has been satisfactory, except the heartland, where the forecast also indicates that the rain will catch up. In the rest of the country, the rain has been decent. If the realization for crops is more than the input price inflation, then there will also be an increase in income for the farmers, and that should augur well for them. These are factors which could result in the coming quarters, rural bouncing back from where it is today. Got it. Thank you, Sanjiv, for that. Second, on the Horlicks, Boost portfolio. Already a question has been asked, so I will not repeat that. You know, Horlicks has been a very, very powerful brand, to an extent underleveraged. When do you plan to make it an umbrella brand and launch more, get into more categories? You know, now that the two-year period is over, there has been all the disruption hopefully behind us. Once inflation deck stabilizes, do you think that would be the time to start expanding into newer categories? Yes. You know, one of the things we have done, of course, is streamline the portfolio. The second thing what we have done is we've gone into the plus range, yeah, much more strongly, and which is a high science range. We have a very attractive innovation funnel. We are also focused on driving our top line of the core portfolio stronger. A lot of work on market development is happening. We are reaching millions of consumers. I am very confident, like you're rightly saying, Vivek, that when commodity prices soften a bit, we will see a huge bounce back on the top line of HFD portfolio. Then we will start unleashing the innovation that we have all got ready in the pipeline. When you say, Sanjiv, just to clarify, innovation, you also mean innovation beyond the core HFD, right? You know, we have several plans also looking at the deficiencies. That's what you are alluding to. Because at the end of the day, if this whole area of pure nutrition, vitamin, mineral supplement, is a focused area for us globally, and certainly very relevant for India, considering the nutrition deficiency in the country. Perfect. Thank you very much. Wishing you all the very best. Thank you, Vivek. Thanks, Vivek. Thank you. The next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Thank you for the opportunity. Hi, team. Congratulations on your performance in a challenging market. My first question was on Home Care. You know, the revenue strength is better, is very strong. Just wanted to understand this a little better. If you could throw more light on how the category trends have been. You know, are you seeing an acceleration in the category growth here? Is it benefiting from full market reopening? Or is it that your market share gains have stepped up meaningfully, or other players are probably investing less in the category in view of input cost inflation? Yeah. Thanks, Latika. Talking about Home Care, you've seen our performance has been very robust at a 30% growth. It's a growth which, of course, in short-term is price-led. There's also good performance of volume as well, and behind the growth that we have. It's a category which has grown very well from a top-line perspective, both volume and value, number one. Number two, the growth is also competitive. We're going ahead of the market and gaining market share as we speak. There are many drivers to Home Care growth. This is a classic example of a long-term portfolio deployment. For years we've been investing in Home Care and working on the portfolio all the ends, at the premium end, popular end and mass end. To start with, we have a very fuller portfolio that we have in Home Care, and we've driven very well a premium portion of the portfolio. If I call out fabric conditioner, for example, is a clear market development hill for us. It's a pretty big driver for growth for us in Home Care for several quarters now. If I talk about liquid detergent that we're selling, again, is a extremely strong contributor of growth and market development as Home Care is concerned. We have done the job of portfolio evolution in Home Care, which has only become stronger over the last several years. To me, that is a real hallmark of how we're able to drive growth in Home Care. Yes, there have been ups and downs in terms of various realities which impact Home Care. The latest one being significant amount of inflation that we have seen, crude basket, inorganic like soda ash, which has impacted, of course, the fuel cost, which has impacted the distribution cost as well. The business has been challenging in terms of its own, input cost materials. We've been very mindful, with our own pricing calibration. As usual, we always call out that our first port of call is to keep driving savings hard and then keep taking, calibrated price increases. In this journey of high inflation, again, with Home Care, we've exactly done that. Our strategy is to grow consumer franchise and protect our business model. That's exactly what we have done. You've seen, for example, our margins, they are at 18%. We've been able to hold year-on-year margins in Home Care with all the interventions. Plus, of course, a very strong growth, which happens, gives also good amount of growth leverage. I would say those would be the causality of a good Home Care performance. Plus also a strong set of brands, be it Surf, be it Rin, be it Vim, or in household care, be it Vim. Strong set of brands, performance across the portfolio. Just supplement some of the things, Latika, which Ritesh spoke about. One very important thrust of ours over the years has been product superiority. We benchmark our products versus rival competitors and ensure that our products are superior to our competitors. That's also very important thing. The second thing is you would have all heard me talk about market development consistently over the years. Market development is not something which gives you massive growth immediately. It has to reach a point of inflection where the growth comes in. The third important bit, which is a very unique HUL strategy, is winning in many Indias. Our strategy is very distinct for different parts of the country. You know, somewhere it is about improving our competitiveness. Somewhere it is about upgrading powders. Somewhere it is about converting powders to liquid. It is very distinct strategy. This is something which is a complicated play and not very easy to replicate. We have created an ecosystem whereby we can play the WIMI game very effectively. One of the best examples you will find is in laundry category. The other is the way we have taken leadership in the tea category, and we have been cementing our leadership in tea category through WIMI play. Sure. No, thanks for that clarity, Ritesh. My only point that I was trying to understand is, does that mean that the market share gains for you would have accelerated in the recent past? It has been unprecedented market share gain. All right. Good to know. The second quick question I have is on soaps, you know, and two aspects of, you know, just to get a better understanding, based on, you know, your vast experience in the past during periods of price deflation. One is that how soon do market players start passing on commodity gains to consumer? You know, how will you approach that? The second is, does it impact channel inventory in any way? Is there any material impact given expectations of the channel for, you know, price reductions? Usually price hikes happened in favor, so even, you know, price reductions will also happen in favor. Any preliminary thoughts? Thank you. No, thank you, Latika. First, you know, let me give you a headline picture. Our price increases have not been in tandem with the commodity price increase. At a macro level, in the June quarter, our commodity price inflation was 20%. Our price increase has been 12%. It gets more accentuated in certain categories. That's point number one. The second point, you're right in saying that a price increase is easier because a retailer doesn't worry about getting you know higher priced stock. It doesn't worry about having lower priced inventory when the price goes up. Whereas on the reverse side, they would be very circumspect. The model that we normally follow, price increase we take in small bites, and price drops we take in a larger bite. We've also developed now a science and muscle of how to manage the inventory both in price increase. How to manage the trade both for price increase as well as for the price drop. Very clear. Thank you so much, and all the best. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, team. I just wanted to understand, you know, hearing your comments on commodity costs showing some signs of correction and on rural, would we look to change the focus to volume growth instead of market share, and hence more aggressive marketing, market development, et cetera? Or is it still some time away? Yeah. First, you know, I'll tell you, is our focus on market shares both on volume and value. Yeah. It's not just on value. Our pricing has been competitive. While we lead the price increase in most categories, it is not that we are significantly ahead to lose or to not gain volume shares. That one is very clear. Yeah. It's still today, it is not just about inflation in our categories. It is also about inflation in the environment. When a consumer pays more for fuel price, if a consumer pays more for all other products in the basket of their consumption, then the total wallet shrinks. It is not just our categories which impacts the consumption, but also the inflation of all the household goods that they acquire or they use, which impacts the consumption. Still we are at stage where the volume growths are pretty negative. It will take time. Hopefully the inflation is the beginning of tapering off. Once that happens, and if the Indian economy keeps growing at the same time, then we should start to see the volumes come back. Okay, sir. I understand that market share focus on value. It was more about, you know, you driving being the leader driving volume. Long-term has always been, you know, we have articulated it very clearly, volume-led profitable growth. You would have heard us saying many times in the past. No, no, perfectly good. No, I understand that. Lastly, on the, you know, expectation on the healthcare end, you know, it's essentially across all the states linked a lot to inflation moderation, is what I can hear the common thread across. Do you have any expectations on when you kind of see this momentum changing, especially not in terms of volume growth, but more in terms of margins, EBITDA margins? Would you argue that 1Q has bottomed out in EBITDA margins? Or was the comment on EBITDA that it could be moderating further in the second quarter and that's probably declining when you have to see an uptick? As we called out, in June quarter, we used a number called 20% inflation, net material inflation that we've seen in the business. Our current understanding is that in September quarter we will see sequentially more inflation. There's one headline commodity, palm oil, which has come off from its peak. There are several commodities which have returned to their historical high levels, and they remain at elevated level. Wheat, bread fruits, which was at $110 average for June quarter. As we speak, it's still at $105-$106. We are seeing sequential inflation in soda ash, caustic soda, milk extracts, coffee, barley. There are many commodities which are inflating. We should also not forget that Indian rupee has weakened against the U.S. dollar, and hence Indian rupee has given up 5%-6% in the last three months' time. There are many commodities which are bought on international import parity pricing principle. Also, that matter are materials which are sourced locally have input ingredients which are imported. PFAD is a classic example where the palm oil gets imported from the plantations of Malaysia, and then in the final product, we end up generating PFAD. We will see all put together in September quarter inflation higher compared to June quarter. There will also be impact of a pipeline inventory because ultimately there are supply chain lead times in procuring many materials. You have at any point in time anywhere from four weeks to 13 weeks of inventory of different materials depending upon the source location, demand variability, supply variability and concerns and logistics time which is still involved in those materials. We will also have higher price pipeline inventory in cases where commodity prices come off for some time after the commodity comes off. All put together we will end up consuming that inventory in September quarter. Now, if the commodity situation like palm oil, it remains at a lower end as we have seen it coming off, and if at all we do see that across many other commodities, then we do expect that from December quarter onwards, inflation might come off to some extent, and that should help sequential margin being getting built from December quarter 2022 onwards. September quarter, because of a higher sequential inflation on material costs, margins will remain under pressure. The point that Sanjiv was mentioning earlier, in June quarter, we have seen 20% material cost inflation. Again, that 20% material cost inflation, our pricing has been 12%. We have also not priced at the peak of the commodity. There is a price versus cost gap. To some extent, when there is a reversal of commodity trend, we are also circumspect on our pricing decisions. We will also, as Sanjiv mentioned earlier, closely follow to an extent when price drops in case they happen, we will not be taking small bites, we're taking big bites, the price decreases, and hence there might be a transitory impact on margin in the short term. Given the conversation I mentioned earlier, if commodities they keep coming off, beyond palm and that remains, we should see from December quarter onwards sequential margin getting built. That's what I would say, the view would be on September quarter and December quarter onwards margin. Okay, sir. Okay. That's all from my side. Thank you very much. Thanks. Thanks. Thank you. The next question is from the line of Sameer Gupta from India Infoline. Please go ahead. Hi sir, this is Percy Panthaki here. My first question is on the pricing. You have about 12.5% pricing this quarter. Going ahead, basically there is in Q2 400 basis points of pricing which is anniversary, because last year in Q1 you had 37%, and Q2 you had 3%. There is a 400 basis points anniversary which happened. At the same time, you are also during the quarter and probably as we speak taking some more pricing increase also versus the average of Q1. Net-net, these two forces, which one is the net sort of positive? Do you think that the price increases that you will take will more than offset the anniversary? Or do you think it's the other way around and therefore the YoY pricing in Q2 will it be above the levels we have seen in Q1 or will it be below the levels we have seen in Q1? Yeah. Okay, thanks for your question. Coming to pricing, as you mentioned about growth, outlook for near term, we said we'll be price led. There will be pricing in the business. The point I was making earlier, yes, you're right, in the base there is price which is annualizing, but we also have many commodities which are inflated. The point I was making earlier, we have almost 8% price versus cost gap, with 20% material cost inflation June quarter and 12% pricing that we have taken. There are many categories I mentioned earlier which are impacted. We are seeing continuous commodity inflation. In fact, in certain categories we see sequentially more inflation even compared to elevated levels. The examples I was quoting on, milk extract, on coffee, soda ash, caustic soda and stuff like that. There will be total amount of inflation. I do believe that, we will end up doing, what is right, which means categories which will see sequential commodity inflation, we will take price increases in those, categories. After having driven hard, as we always kept saying, in terms of driving savings first and then after that take category price increases. Now in my view, it will be the case, for September quarter onwards as well. There are very few select categories like tea, where we do have year-on-year deflation. Those are the categories where we also have done the right job in terms of taking price decreases where we had to at different price points that we operate in the category. Apart from tea, at this point in time, as you see, there's a pretty comprehensive impact across many categories. The closest one that we're going to watch out is palm oil and impact, and we have seen that coming off significantly. I did articulate the September quarter outlook. If the palm oil prices remain benign and its commodity outlook remains where it is, then from December quarter onwards we will see cost increase, decrease come again. September quarter, as I mentioned, we have a pretty elevated cost pipeline of inventory for many materials which have very highly inflated in the June quarter, including palm oil for that matter in June quarter. I hope that gives you some amount of understanding of where pricing would net out in September quarter. Yeah, yeah, very helpful, Ritesh. Just a related question to this. Supposing if I take a simplifying assumption that let's say commodity prices remain where they are, going into the future, how long do you think it would take for you to restore your EBITDA margins to pre-COVID levels? It will be, very hard to give you the other EBITDA margin. Sorry, not pre-COVID levels. I mean, sorry, the levels you had before, basically this big inflation set in, which was I think somewhere around the 25% mark. You have been pretty stable at that 25% mark, so that's the benchmark I have in my head. There are multiple elements, Percy, out here. First of all, we need to understand how commodities will play out. We are at this peak. I'm saying palm oil at very high, inflated levels of multiple commodities. That will be one very important driver, how commodities play out over the next few quarters from December quarter onwards. That will be, in my mind, a very large determinant how we are able to build sequential margins from December quarter onwards. We're yet to know with currency depreciating, with other commodities further inflating, and ones which are at high levels like crude remaining elevated. We've got to see as to how that commodity basket gets cooled off in quarters down the line. If that does happen, we will start building sequential margins from December quarter onwards. That's one. Number two, when deflation, like you said, commodity comes off, we do also expect competitive intensity to go up on A&P, on investments, on innovation. Margins of course have one element of commodity hedge gross margin and pricing. There's also an element of competitive investment in the business that we have to do. That again is something that we need to see how it pans out. Last but not least, something the price value inflation, as I mentioned, that we do have a price to cost gap this point in time, and that price to cost gap needs to start getting bridged over a period of time. We'll have to see as to how various variables let it play out. Sanjiv, you want to add? Yeah. Percy, there is also one very important factor. You know, assume for the time being that commodities remain at an elevated level. Yeah? That equation changes permanently. One of the big drivers would be India's GDP growth. If India keeps growing at 7%-8%, and it is an inclusive growth, then our ability to restore margins would be that much more easier. Sure. Understood. My second question is on the detergents market share which you mentioned, we have seen unprecedented growth in market share. Could you give some more flavor on this? Is it at the market share gain more accentuated towards the mass end, mid-end, premium end? Any more flavor as to why this is happening? Are there certain players in the market who for whatever reason have become very weak or something like that? Yeah. You know, Percy, first the good bit is we are gaining shares across our portfolio, in bars, in powders, in liquids, and this gain is across the price tier. Yeah, in mass. Okay. In a popular range and the premium range. Some of the factors, if I may allude to, which I was also telling Latika, one is a massive focus on product superiority. The second is we have for the last several years invested significantly in market development of liquids, and upgrading consumers to higher order benefits. The third is our WIMI play. The categories like laundry and tea lend itself to a WIMI play much more because your competitors are different in different pockets, the market shape is very different in different pockets, and you can't have one recipe for the entire country. I think of the large companies, we are the company which is most adroit in playing the WIMI game. Very helpful, Sanjiv. Thanks, and all the best from my side. Thank you. Thank you. Thank you. The next question is from the line of Amit Sachdeva from HSBC. Please go ahead. Hi, good evening. Thank you so much for taking my questions. Congratulations, very good set of numbers. My question is on the beauty makeup and skincare part of the portfolio. I allude to also that, you know, you are working with channels of the future and e-commerce being a clear focus. Could you give us a little bit more detail on e-commerce contribution coming from especially the beauty part and skincare part of it? Do you see that new wave of, you know, business being done in the BPC side, is it looking like a long-term opportunity or you see also somewhat a challenge because it opens up plethora of new entrants coming to beauty space especially? You know, mass end of the skincare where you are dominant, it is migrating to masstige and premium side of things. Wherein, you know, your place. Still evolving, and I finally say that there's some gap there. How do you read the skincare and beauty situation under the new realities? If you could give us some sense of what percentage of revenue from these particular products are coming from e-commerce, and how it has grown over last year? Yeah. Performance in the beauty category, if I just break down into a few components of the beauty category you spoke about. Let me start with haircare. It's an excellent performance for the last several years now and several quarters, where we have very full-on portfolio across different price points and different formats and different pack sizes. Be it the premium end of haircare of Dove or TRESemmé, that has grown well. Also that matter, the premium end in Ayurvedic range, like Indulekha, that has grown well. We had called out that our market share gains have been one of the best in the last decade what we have in haircare. If we talk about beauty categories, hair has done extremely well. The kind of portfolio development we have done, the kind of market development we have done over years, is really yielding results. A portfolio which is strong across multiple brands, be it Clinic Plus, be it Sunsilk, be it TRESemmé, that really helps us to get that. Even within the area of masstige, we have spoken about that, we have our range which we have launched. Be it the premium product of Dove or for that matter, our range in this quarter also, under Love Beauty and Planet, which is our, D2C brand. We have launched more innovation in Love Beauty and Planet. We've been very active across price points. Masstige is still a niche segment in the country. The power of large brands like Dove, TRESemmé, Clinic Plus to drive incremental growth is huge. But at the end of the day, we have also focused on niche opportunities, where masstige provides, and which is why our portfolio in beauty across skin, across hair, in the premium beauty business unit, what we had called out between Simple, between Love Beauty and Planet and Baby Dove. Coming to skincare, again, Pond's has done extremely well, our performance in there. We have seen business coming in skincare, pretty strong, good growth in the portfolio. There are parts within skincare, we yet have to see full resurgence, like, Talc we had called out. There are elements of discretionary categories. At the end of the day, with so much amount of kitchen inflation happening at consumer end, there's a clear amount of priority a consumer could give to kitchen items and essential items. Hence to some extent, discretionary categories have taken a beating where the market growth of these categories has come off in the last, I would say, three to four quarters. We should see that getting built back as the situation improves, as Sanjiv was articulating, be it on economic front or be it on commodity front, where there's some amount of relief in the input cost inflation, and the kitchen inflation should start coming down. This is where we have seen impact in Glow & Lovely. When I talk about Talc has a pretty high rural footprint. If there's one area in the country which is seeing highest amount of bite of inflation, is in rural area. That was the point that we were articulating earlier. When you have high inflation happening, that's a segment of the population which end up seeing more impact. If I just take a step back, skincare is a category which is still as a category underpenetrated. There are many products within skincare where the penetration levels are very low, from 10%-20%, and hence a huge headroom for growth, by doing market development, and which is what has been the focus for us, bringing innovation in skin, and I quoted many examples as I was relating today, from serums to multiple areas, hydrating mask and face. There are many things that we've launched in skincare. Portfolio is evolving, and so are brands within that portfolio which are evolving. This is a space which, in our view, for years to come, we would keep doing penetration and market development and keep getting growth. I'll just give a bit more flesh to some very valid questions you have raised. Yes, if I have to peer ahead, while all the categories in which we operate have gotten massive headroom to grow, one of the fastest growing markets would be beauty and well-being segment of BPC. Which is haircare, skincare, and all. For the simple reason that the per capita consumption is still very low, and as the country progresses, you would see a massive explosion. The second is, you're again right in stating that it is predominantly a mass, upper mass kind of market, and the masstige and the prestige is very, very niche. Prestige, most of the consumers would buy while traveling outside. Masstige is still a very slow segment and it's still to evolve. There is a lot of noise, but still the segment is pretty small. Now, one of the things is, in hair care, we have grown our shares consistently over the years, and now we have over 50% share of the market and growing. In skin care, we have the highest relative market share of any player in any of the big markets. Mm-hmm. The right to win for us is massive. We are now focusing huge amount in building the portfolio of the future. Lot of the work which we are doing, and you will see a lot of innovations coming in, and you will realize the what I'm talking about in the days to come. That as the leader, we have to take the role of converting the market to masstige and beyond. We will not shirk away from that responsibility. If you were to look at just Pond's range, how we have evolved over the years, it has become a very masstige brand, and that is the thrust. There'll be newer brands, there'll be newer formats, and we will. I am absolutely clear, we will build on the leadership and not cede our leadership. Sure. That's extremely helpful, you know, Sanjiv, and you know, I just wanted to ask that do you need a newer brand other than Pond's and Glow & Lovely just to? No, we have. Okay. Lakmé is coming in bits and pieces. No, no. There would be a need for more brands, and you will see the space evolving because a brand cannot be everything for everyone. Great. Thank you so much for the detailed answers. I really appreciate them. I've taken a lot of time, and I'll probably come back in the queue. Thank you. It was a very good question. Thank you. Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Yeah. Thanks for the opportunity, and congrats for a great quarter. My question, similar to last one. In your annual report, you have said that almost 30% of sales for Lakmé come through digital channels. That's a large number. Can you help us understand this? Would this be entirely B2C through e-commerce or even B2B sales would be a part of that, Shikhar sales would be a part of that 30% for Lakmé? Yeah. No, thanks for the question, Kunal. Lakmé has highest number of Instagram followers across any beauty brand in the country. It's a true digital brand. This is why there's no surprise that it has basically more than 30% of the turnover which comes from e-commerce pure play, Amazon, Flipkart, Myntra equivalent. Lakmé also has its own B2C site, its own site, and we get 2 million unique visitors every month on that site. It's again basically a platform for us. Apart from pure play e-commerce, we drive sales through Lakmé's own B2C website. That's what by and large comprise the 30% is digital sales for Lakmé that we spoke about. As I mentioned, because of the digital footprint of the brand, we were to drive that. I hope that answers the question. Sure. Yeah. Now, on the B2C website point, like you mentioned that for premium brands you have your own, like website and how about app? Like, are you also looking to get, like, have your own apps for that? Can you help us understand your thoughts on prospects of your own B2C platform and how you're looking to do the fulfillment? Yeah. There are four different brands where we have our own B2C website and we keep adding where it is relevant and consumers need it. Be it Lakmé where we have, be it Dermalogica where we have, be it Love Beauty and Planet. Wherever relevant or Indulekha for that matter, wherever relevant, where we want to give messaging, product knowledge and of course sales, and where consumers are engaged in a very different way and is relevant, we will have our B2C website. Usually the format is more websites rather than apps. We have not seen the behavior where consumers prefer different apps for different brands to buy. It's more websites. This is why you see more B2C websites than you see the apps at this point in time. Again, all that, Kunal, will always be driven by what consumers want. At the end of the day, wherever they go is where we want to ensure that we make them our products available. They go to a pure play e-commerce website, we would want that to be available. They go to a modern trade outlet to shop, as footfalls are increasing at this speed, we will have our products fully available there. Or for that matter, they find convenience of both content and product availability through our own B2C website, we make them available as well. All depends upon where shopper wants to go to get content and get service. Sure. I mean, what's the kind of potential you see from this, and how are you looking at, like, doing the fulfillment part? I mean, are you looking to get into competition with e-commerce or you think it's going to be a small-scale affair? We are an FMCG player and we are good at making soaps, we're good at making shampoos, we're good at making fabulous products. As a large FMCG player, our focus always will be to make fabulous FMCG products, market them, and then fulfill the needs of the consumers. There are various channels and vehicles to ensure that the brilliant product that we make, more importantly, what consumers want, we are able to reach them. Now, if the GT still remains in the country the most dominant channel, and this is why wherever consumers go and shop, be it general trade, be it modern trade, be it e-commerce, we will ensure our products are available in all the channels that consumers shop. Our strategy for all channels depends upon where consumers find convenience to go and shop. As I mentioned that we still believe in for times to come, GT will remain a dominant channel. Equally, for that matter, stock keeping, be it C&C, Cash & Carry, be it wholesales within GT or be it B2B players, wherever our retailers want to go and access our products, we will be available. We see all of them to be our customers. Our priority always will be to ensure that we do brilliant job in customer service to our retailers and, be it GT, be it e-commerce or be it modern trade, and ensure that our stock availability for consumers wherever they shop is available. The distribution and customer service strategy will all depend upon the shopping behavior of the shopper. As I mentioned, our focus always is to make brilliant product available and fulfill consumer needs in the space of FMCG categories. Understood. That's it from my side. Thank you a lot for the detailed answer. Thanks, Kunal. Thank you. The next question is from the line of Harit Kapoor from Investec. Please go ahead. Yeah, hi, good evening. These are two questions. The first is, you know, on the COVID base impact. In categories like ice cream, these, you know, color cosmetics, possibly even in Home Care to a, you know, to some extent would have had a positive impact of the base. Also probably a negative impact to the hygiene categories. Just wanted to understand, you know, for this quarter, my assumption is that your impact would be net positive. You know, do we expect... Firstly, is that understanding correct? And secondly, do we now have a normalized base from quarter to across most categories and, you know, it becomes a little easier to kind of judge the growth there? Yeah. Everything else being equal, yes, you're right. We had COVID wave one, June quarter last year, and COVID wave two, the year prior. Hence, the growth that we have in this quarter is on the base of the quarter last year, where you're right, the health portfolio, we have seen moderation in consumption of these products. I expect from September quarter onwards, I think it's all in the base, but one can never be very sure. There are different dynamics of pricing and different dynamics of category growth, and we will see in times to come. Yeah, there are no major call-outs, if I see next few quarters from a base adjustment perspective. Got it. It is this quarter, it's a net positive is what you're saying? Got it. Okay. The second question was on the grammage impact on UVG. You've been calling that out in the earlier quarters. Just wanted to know, you know, what's the kind of, you know, net negative impact to UVG due to the grammage? See, number would be net 2%-3%. 2%-3%? Yeah. Okay. You know what happened, Harit, even this quarter, June quarter, with a significant amount of inflation, the conversation that we had on price on packs and the fill levels, et cetera, that is absolutely relevant. There's a 2%-3% impact of volume on the price on pack, which is, as we had quoted earlier, 30% of our part of the portfolio price on packs. Right. Yeah. Just to follow up on that, you know, do we incrementally, given that we've seen commodities kind of either stabilize or come off, any incremental change in pricing? Would that still be a mix of price and grammage what you're putting into the market now, or it's more pricing than grammage, or it's still a mix? Yeah, Harit, my only request would be, you know, we should not make palm oil as a headline commodity to make assumption across the portfolio of commodities. Right. It's one of the commodities, and there are multiple other commodities which are either at historical high levels in terms of inflation or they are further inflating as we speak. It's very important to ensure that palm oil is not, we don't generalize that across the commodity portfolio, number one. Number two, you're absolutely right. The price-volume equation is something which we very closely monitor to ensure that remains intact for the consumer. To an extent, for example, if commodities they do come off and, like palm for that matter, we will again restore the price validation where we need to. The palm which I mentioned earlier, in the first place, for many of these price on packs, we have not increased pricing because when yes to the extent we could, I'm saying reduce grammage we have. There's a point beyond which you cannot. If a sachet of shampoo has to give hair wash for a lady, and we don't want to ensure that that amount of shampoo is less in the sachet. For that matter, if a INR 2 Horlicks sachet has to give a cup of Horlicks, there is no way we could reduce the quantity in that Horlicks cup beyond a point in time which will not give a full cup of Horlicks. There are those limitations, and within that, we have done what best we could do on price on packs. We have not fully priced all inflation that has happened on price on pack. Hopefully when commodity comes off, the unit economics of that portfolio in many parts will get restored. As needed, where relevant, we will restore back value to consumer. At any point in time, we will be competitive with our offerings at price point equation to a consumer. Got it. That's it That's it from me. Thank you, and all the best. Thanks, Harit. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, good evening. Thanks for the opportunity. Indeed, congratulations for the good set of numbers. Thanks, Shirish. I just wanted to understand, Ritesh, if you can help me. I'm a bit puzzled that 6% volume growth, indeed it is very high. If you can give some quantitative or qualitative remarks. To my understanding, soaps and detergent is a big portfolio for us. Is that the growth, volume growth, which is driven more by the downtrading, which we have seen people would have downgraded to maybe from Rin to detergent, say Wheel. Is that understanding correct? Or the growth, 6% what we have got is across all three segments? The growth that we have, volume growth, you're right, it's across the segments. We have pretty comprehensive volume growth performance across Beauty and Personal Care, Home Care, and Foods and Refreshment. It's absolutely broad-based. Soap as a category, we have seen much higher impact in terms of. If I talk about market to start with, soap as a category has seen much higher inflation and extremely unprecedented level of inflation, and which has had an impact on the overall market category volume, which has declined. When Sanjiv quoted that, we have 5%-6% volume decline of market, essentially market in June quarter, and categories like soap are a good contributor to the decline, just the sheer amount of inflation which has happened. What we are seeing is there are two different behaviors, downgrading and downtrading. Downtrading is where a consumer who's buying a larger pack buys a smaller pack, and hence that's downtrading, where smaller amount of volume gets consumed and gets sold in the period, and consumers do tight consumption in that time. That's downtrading. We have not seen many examples of downgrading where a consumer goes down the price tier. Point in case, we had quoted for financial year 2021-2022, and including our current June quarter, our premium portfolio has grown at twice the pace the rest of the portfolio, overall average of the business growth. We have seen premium portfolios growing. We live in India, which is winning in many Indias as a strategy, we call out the different parts of the country. There are different consumers. There are consumers who are able to afford, even in such high inflationary times, the products that they love to consume. We have seen those things remaining intact. Hence, we say over-indexed growth that we have seen in the premium portion of the portfolio. Yeah, there are many puts and takes in the portfolio, and that's the benefit of having a business like HUL has, which has multiple categories, multiple brands, and multiple price points. We are able to use our portfolio to get best outcome for our stakeholders. That's really helpful, Ritesh. Just one last question. Referring to Sanjiv's comment on the HFD. We did see that last two years, the HFD category has not gone up as per our expectation, while our investment has gone up out of proportion. Just wanted to understand what's happening in the category. I mean, if you can say last one year, what is the price-led growth and volume-led growth? And where do you think, I mean, we have invested significantly, but this sampling, what we have done, is there is some recovery we are seeing in terms of conversion and activation? Yeah. There are three, four sub parts to your question. Let me just go one by one. First, let me talk about market. I'm not talking Horlicks, I'm talking market of HFD. Sure. HFD market, it's one of the categories which is seen as a discretionary categories. I quoted earlier the amount of kitchen inflation that consumers are facing. In times like that, they do prioritize essential items, and hence discretionary items like health food drinks category, it has taken impact, where the total amount of cost has gone up. Sanjiv was quoting example, if a cup of Horlicks, if I now quote example of Hindustan Unilever. A cup of Horlicks, which of course is a fabulous Horlicks product with milk added to it. With milk inflation coming in, we've seen significant amount of increase in the cup of Horlicks, more because of the cost of milk which has increased in the process. That has had an impact. In the earlier phase, as Sanjiv called out, when the schools were all virtual and in the household, there were more than one options of nutrition and now schools have opened up. At the end of the day, inflation, which is biting, has also hurt the amount of consumption possibility of this category. Now, as far as we are concerned, we are very bullish on this category. We know with micronutrient deficiency in India, this is a category of future. We would see consumption building up. It's a low-penetrated category. Penetration of HFD is more like 20-ish percentage, which means there's a tremendous headroom for growth. Which is why we are doing more than one things. Be it expanding portfolio with clubbed range, as we spoke about. That matters, doing home-to-home sampling and doing market development or launching and activating to these INR 5 price point to give more accessible price packs to consumers to come into the category. That matters, launching poly packs and ensuring we're able to give more good value equation to consumer. Lots of those actions we have deployed to ensure that we're able to build on penetration and do market development of the category. We've done some very good job in terms of giving strong foundation to category in last two years since we acquired the business and driving extremely good savings across the business of health and food drinks. Be it supply chain savings or synergies with Hindustan Unilever on overheads and cost management of the business. What we have done is a good portion of that saving we have deployed in terms of investment in the category. One of the examples we have quoted out was exactly that we invested in the category a good portion of the savings that we have generated. That's our play. It's something that we will be fully invested in. Any market development, remember, we are in COVID times in the last two years' time, and we are trying to build a category. These actions, they don't yield result in short term. We have seen the way we have done for haircare, the way we have done for laundry. It takes time for us to build categories and then improve penetration. That's exactly what our strategy is also with Health Food Drinks. That's really helpful, Ritesh, and thank you, and all the best to you. Thank you, Sir. you, Sir. Thank you. We'll now pick up a few questions from the web. I'll start with a few questions that Richard has asked. Richard from JM Financial. I think we have answered already. Ritesh, you just answered the question on Health Food Drinks. Richard, I think that's been answered. Sanjiv spoke earlier about what our strategy will be when prices come down. I think both of those questions have been picked up. Richard has a specific question on F&R margins. Ritesh, if you would like to comment on it. F&R margins, Richard, you've seen, it's down 200 bp s year-over-year. There are two elements. First, we have invested more in A&P. One of the examples I was quoting to Shirish earlier, that we have invested in multiple categories within F&R. Our A&P investments have been stepped up to drive growth and to drive competitiveness. That's one. That's one reason why margin is lower year-over-year. Second is also for this quarter impact of mix. We have seen very stellar growth, as we called out, in ice cream. Because of that stellar growth of ice cream, and ice cream margins as compared to margins of rest of the F&R portfolio, that mix impact has also had an impact in the quarter for F&R. Yes. Thanks, Ritesh. Question from Latika on tea business. Give more color on our performance on tea. Do we see any challenge from locals as tea commodity costs have started deflating? Linked question on whether the recent weather changes, the Assam flood has any impact on these prices. Yeah. Latika, overall tea prices, as I speak today, year-on-year, we do see a deflation. So far so good. The crop has been good. Yes, there has been impact in June of floods in Assam. We have to just see how balance as the situation improves, how overall production pans out, and we will have a good sense in next month or two. So that's on the tea crop. As of now, we do see year-on-year deflation. This is what our strategy has been. As we called out, we have cemented our leadership in tea category. As you know, we are both value and volume leader in tea category, and we have a fabulous portfolio across price points in tea, be it Taaza at the mass end or a premium Taj Mahal at other end, and it's a pretty strong portfolio. With tea deflation coming in, the point that Sanjiv was making earlier, we have done what is required to be done in terms of pricing. We were very measured, and we took in small steps price increases when tea inflated tremendously. But as tea market has come off, we have done equal job of also ensuring that the price value equation remains intact and remains competitive for our consumers. The latest set of actions that we have done on Taaza is exactly in line with that. It will happen that there were certain players when the tea commodity was at its peak, we did see that getting vacated. We, of course, do expect players will come back with tea deflation happening. We will do what is required to ensure that we hold on to the most of the gains that we have got, competitively as shares we have gained during this period. That would be our tea strategy. I would say we are pretty pleased with the kind of performance that we have done in tea, and our portfolio remains extremely strong across price points. The kind of agility that we have with our decision-making, we will ensure that remains, potentially now. One other quick question from Latika was on employee costs and whether the reduction is a sustainable one for the future. Yeah. There are two drivers, Latika, in terms of employee costs when you look at current costs. As you have seen there, year-on-year, overall amount of cost has come down. There are two reasons for that. First, in the base period, June quarter 2021, we had COVID-related expenses which we had incurred. Those were incurred because it was the peak of wave two. Of course, those expenses that we don't need to incur today as situation is much better in the country. That is one reason why there's a cost in the base which is not got incurred currently, and hence year-on-year benefit. Second is growth leverage. With the 19% growth that we have, for all fixed costs, everything else being equal, it also gives a good amount of growth leverage. Those two elements put together, you see not only employee cost, but we also saw in the bucket of other expenses. Both put together, we have a 270 bps change in the margin, as we have lost in price versus cost, 330 bps in cost of goods sold. These are the two elements which we have, which have worked in our favor, driven, I would say largely because of growth leverage and there are other individual elements as I called out. There are a few other questions on the web, but most of them have already been answered. If there's anything further, please reach out to any of us in the investor team. We'll be happy to address them. With that, we have now come to the conclusion of the session. Before we end, let me remind you that the playback of the event will be available on the IR website in a short while, and you can go back and refer to it. Copy of the results and the presentation is also on our website. With that, we would like to draw the call to a close. Thank you for your participation, and have a great evening. Thank you so much, everyone. Thank you. Ladies and gentlemen, on behalf of Hindustan Unilever Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.