Ladies and gentlemen, good day and welcome to Marico Limited's Q1 FY23 Earnings Conference Call. We have with us from the senior management of Marico, represented by Mr. Saugata Gupta, MD and CEO, and Mr. Pawan Agrawal, CFO. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. Before we get started, I would like to remind you that the Q&A session is only for institutional investors and analysts, and therefore, if there is anybody else who is not an institutional investor or analyst but would like to ask questions, please directly reach out to Marico's investor relations team. I would now like to hand the conference over to Mr. Saugata Gupta. Thank you, and over to you, sir. Yeah. Hi. Good afternoon to all those of you who have joined the call. FY 2023 has started on a soft note for the FMCG sector in India, which continued to face some macro headwinds. Retail inflation has stayed above RBI's target limit for six consecutive months now, thereby straining consumer wallets. With companies passing on the impact of rising input costs and currency depreciation, consumers were seen downgrading and down trading across various FMCG categories. In this challenging context, domestic volumes in Q1 were certainly well below our expectations. The performance was particularly dragged by Saffola Oil, which posted a volume decline in the 20s, given the high in-home consumption in the base and severe down trading headwinds in the category because of the absolute pricing of around INR 230 a liter. Ex- Saffola Oil, domestic volumes were up marginally. One should appreciate that this quarter's performance of various companies should also be looked in view of the portfolio and the inflation risk in the raw material basket. For example, we had a high base because 30% of our portfolio is in-home consumption, which is Saffola and Saffola Foods, and only 5% is out-of-home and discretionary, mainly male grooming and serums. Therefore, we are disadvantaged this quarter. While the overall three-year volume CAGR does not measure up to expectations either, we must acknowledge the material impact of SKU normalization between Q4 and Q1 since the onset of pandemic. We had earlier mentioned this in the calls of FY 2021 and FY 2022 Q1, that Q1 FY 2020, which is the base year, accounted for 30%+ of the FY 2020 annual revenues, and compared to a 26%-27%, which normally happens in Q1. Therefore, if you take a CAGR versus the average monthly run rate for the full year of FY 2020, and this is the way we are internally tracking our performance, the growth three-year CAGR comes to around 6%, which certainly provides a much better perspective on our performance over a three-year period. Delving into India business, let me give you a flavor of the key trends in our categories and what is the strategy and outlook for the year ahead. In Parachute Coconut Oil, while loose-to-branded conversion slowed because of the inflation, we have continued to lead the sector with market share gains. Other organized players have gained marginal market share or lost market share, and the Parachute market share gain in both volume and value is the highest amongst all organized players in the CNO market. As far as deep discounting is concerned, we plan to counter it tactically as we always operate within a premium pricing band, which delivers consistent volume growth at healthy margins and are not deterred by players operating at negative growth margins. In addition to the 6% price cut taken last year, we have passed on incremental value to the extent of 2% towards the end of Q1. Due to channel inventory as well as in the depots and everywhere, there is a lag of around 60 days for price correction before we can expect the price discovery all India by the consumers, which will lead to better traction. We are confident of delivering healthy volume growth in line with our medium-term aspirations thereafter as we go into Q2, going into Q3 and Q4. In Saffola Edible Oil, in addition to the high base and the number of trade and supply chain issues, down trading was most starkly evident in the super premium segment. While the overall ROCP category declined in volumes around 9%-10%, there was a sharp skew within the subsegments as the base oil, which is the mass segment, actually grew in the 30s, and the premium and the super premium oil declined in high double digits. This clearly indicated the impact of the sharp increase in absolute outlay affecting purchasing behavior in the category and stalling any potential upgradation to the super premium segment. We could have chosen to recoup volume by sacrificing margins, but we consciously did not chase growth at suboptimal growth margins. We will go for volumes once market conditions are less volatile and price stability is restored. That being said, in the near term, we expect volume trends to improve from quarter two and aim to deliver growth in H2 as the base normalizes. Food had a slow quarter due to sharp base effect given that our portfolio is highly skewed to in-home health and immunity categories as opposed to discretionary out-of-home categories. We expect growth to pick up gradually from Q2 and will continue to log share gains in oats and soya. While the honey category has moderated visibly, we expect to grow as the base normalizes. In light of certain, we would like to clarify that we have largely held our market shares in honey across channels, which stands at 22%-23% in e-com and close to double digits in MT and a mid-single digit in GT. The overall share loss versus the last two quarters has been only 1%. We continue to maintain the superior proposition on the back of NMR-tested purity. Just like pure coconut oil freezes during the winter, research proves that raw pure honey that undergoes crystallization in winter, and therefore we have started to run campaigns to educate the consumers that pure honey crystallizes. Further, we are excited about the medium-term prospects of two elements which has tremendous runway for growth as a clean label brand in the rapidly growing breakfast and snacking categories. We continue to hold our INR 850 crore-INR 1,000 crore revenue aspiration in foods over the next couple of years. In value-added hair oils, we have delivered 5% pricing-led growth while the volume was flat. We'll continue to take calibrated price actions to pack size reductions as well as MRPs increasing going forward as well. Just to again reinforce the fact that we have actually taken a 5% price increase in the last quarter, and we intend to take more. We have not let up on our upward market share target. We strongly believe that category growth potential in line with the overall HPC demand. If you look at segments within the VAHO. Category based on RPI, we are witnessing improving trends in the mid-price tier of the category as there is downgrading from premium. We are also focused on expanding our presence in the premium and super premium segment, which is mainly represented by D2C players. While there is heightened competitive intensity at the bottom of pyramid, we are defending on the leadership position but not focusing on growing that segment disproportionately at the cost of margin. As we hope for a marked revival in consumption sentiment in H2, we'll maintain our focus on premiumizing the mix through innovation to drive double-digit value growth in the rest of the year. Just like CNO, our gains in VAHO was the highest compared to other organized players. Given that inflation doesn't affect consumption patterns of upper income segments, premium personal care has been growing smartly post-COVID-led disruption. Serums are growing ahead of pre-COVID levels, and male grooming is steadily getting there. Beardo and Just Herbs are also meeting internal targets. Our digital brands portfolio is now around circa INR 200 crores in annualized run rate. We are confident of crossing to INR 50 crores ARR in Q2 and thereafter adding INR 50 crores-INR 75 crores ARR every quarter till we reach a INR 450 crore-INR 500 crore mark in FY 2024. Moving to international business, which has been a symbol of tremendous positivity and consistency, especially when we look at peers in the sector. Having delivered double constant currency growth for the sixth quarter in a row, we continue to channelize all our energies towards strengthening the underlying fundamentals of each of the businesses. Bangladesh extended its good run with a healthy growth in the core and accelerated ramp-up in hair care and baby care portfolio. Despite recent macro developments, we expect to be able to sustain the momentum and cope with it as we believe during such times the strong get stronger and weak get weaker depending on the position in each country, and Bangladesh, we have a very, very strong position. Vietnam also delivered on its promise as HPC category growth picked up, and there are no visible signs of any inflation or any economic risks, one which is currently robust. We are also making visible and exciting gains, exciting attempts to broaden our play in the region. In MENA, there is a sizable profit pool which presents an attractive opportunity when investing to grow into the region. South Africa and LATAM are also seeing healthy momentum building up as well. Looking ahead. While the overall demand sentiment in India is yet to turn cheerful, we are enthused by the robust market share and penetration wins across our domestic portfolio, which assures us of steady recovery once the macro headwinds subside. With 50% of our raw material basket witnessing deflation, we are relatively less impacted by inflation. We'll continue to have reasonable comfort on the profitability front without cutting A&P spends. We have delivered healthy margins even though the quantum of inflation on edible oil was 2%-70% as compared to 20%-30% in other raw materials. We've seen a visible recovery in gross margin over the last four quarters, but quarter two will be tricky as the benefits of falling edible oil prices will not flow through as we are carrying higher cost inventory of vegetable oil while we pass on value to the consumers through pricing immediately ahead of our cost structure. While we delivered a strong EBITDA margin of 20.6% in the quarter, EBITDA margins will moderate in the following quarters since we want to invest for growth and especially at a time in quarter three and quarter four, where we have a very soft, softer volume base. However, after factoring in the quarterly variation in the sales mix and each of the cost line items, we are extremely confident of delivering 18%-19% operating margin in FY 2023. While we draw reasonable comfort on margins, we'll pull out all stops to deliver healthy volume growth in the rest of the year, especially in H2, given the base and given the fact that, we also will accelerate some of the innovations in food and digital. We'll continue to build fundamentally sound franchises in the domestic and international markets, even in the face of transient external headwinds, and push the four strategic levers of diversification, distribution, digital, and diversity, which we believe will keep us on the path of sustainable double-digit revenue growth as in profit growth over the medium term. We also continue to make visible progress in our ESG program. Creating shared value for all remains an ingrained purpose for our business and will allow us to drive superior long-term performance. We are committed to achieving net zero emissions in our domestic operations by 2030 and global operations by 2040. We have recently released our focus areas and goals for the next decade of action, which I detailed in the FY 2022 report. With that, I now close my comments. Thank you for your patient listening. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Abneesh Roy from Edelweiss Financial Services. Please go ahead. Yeah, thanks. My first question is on True Elements and your digital first brand. In Western breakfast, specifically oats, you have both Saffola and True Elements. If you could tell us how the positioning will be. Second is, because liquidity has dried up in general for competition, rate hikes, IPOs not happening. Will it be fair to say that for your digital first brands, Beardo, Just Herbs, et cetera, the competitive intensity now will be much lower, so you will be much more confident of your three-year, five-year ambition plans here? Okay. First, let me talk about True Elements. I think, yes, there is slight overlap, but is that their entire portfolio we are going to focus on two different price points. If we are selling plain oats and masala oats, they'll be focusing on steel cut oats and rolled oats, which is a premium variety of oats and a higher RPI. However, going forward, there is a huge journey to be had for True Elements. We have carved out the spaces in which True Elements will operate and Saffola Foods will operate. Obviously, as we scale up, I mean, currently it is in slightly premium niche things that we will obviously try to expand the offering as far as True Elements is concerned. Regarding our second question, you're absolutely right. What has happened in the last 18 months was, especially in the last 12 actually, 12 to 18 months in, post-COVID era or when COVID started, with all the money being, the CACs and the A&P costs or the ASPs that were pumped into the digital business were actually unsustainable. Therefore, that hit- Sir, sorry to interrupt. You know, people were gradually. Yeah. Sir, there is a slight audio break while you're talking. May I rejoin your line, please? Okay. Participants, please stay connected while we rejoin the management line back to the call. Ladies and gentlemen, thank you for your patience. We have the line for the management reconnected. Sir, you may go ahead. Yeah, sorry. I think I was responding to the CAC question on cost. Yes, absolutely right, Abneesh, that last year, I mean, there was a lot of cash burn happening and therefore the customer acquisition costs and the A&P costs in the digital world had shot up. Having said that, you know, the money will now chase only quality brands or the quality businesses. Obviously there will be a huge amount. I think the cash burn which was witnessed in the last 12 months will certainly slow down. For a strategic acquisition and a brand which is supported by a strategic like Marico, it's a complete. You are absolutely right. It's a source of competitive advantage. Therefore, we expect that the unique economics for leader brands in each of the category will substantially improve and the competitive intensity will go down. Having said that, as I said, the money will still chase the quality businesses in each of the categories. To answer your question, are we advantaged? Yes. I think the other thing what has happened is given that we have now you know, a bouquet of digital brands, the cross-learning that is happening, that has also helped us. Also one thing you must realize that while each brand, the biggest might be Beardo, there are a lot of shared opportunities, not only of learning, but also shared costs. You should look at a business like a INR 200 crore- INR 250 crore business. That also has an impact, positive impact in managing costs. Yes. The fact that we want to add INR 50 crore every quarter to the annualized run rate is something we are far more confident of today and able to do it in a correct way and not by blowing money. Sure. Thanks, Saugata. That was quite helpful. My last question is on slide seven. 96% market share gain, 93% portfolio penetration gains. Are you referring to Nielsen in both the cases? And is the penetration number, product is subset of the 96% and it's a commendable achievement. What you have not gained, for example, will it be largely Set Wet? Market share, yes, it is Set Wet and in serums, in market share and in penetration, one particular brand of WOW. It's not a subset. It's 100% one brand which contributes to 7% kind of a thing. 6%-7%, we haven't gained share. We haven't gained penetration. Both are Nielsen number only, right? The whole panel and one is a retail audit. Sure, sure. That's all from my side. Thanks a lot. Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. First question is on the foods portfolio. While your three-year CAGR is quite healthy, the YOY growth of single digit is rather surprising, especially given that the business is rather small in nature. Larger companies like Nestlé have grown 15% YOY. Can you just give some kind of flavor as to why this is happening and how quickly this can turn around, going back to that 25%-30% YOY growth that we would need to clock to achieve our targets? First, I think alluded, you see our foods portfolio, our portfolio is completely skewed towards in-home and health and immunity. Therefore, we obviously had a significant advantage when you had the quarter one last year, which was the delta peak, where people stayed at home and significant consumption. If you look at, I don't want to get into specific companies. All other food companies have a HORECA sale, institutional sale, they have an out-of-home sale. Therefore, in our case, out-of-home sale is zero. Therefore, if you have an out-of-home or a HORECA and other sale, it balances out. In our case, it was extremely skewed 100% towards health and immunity. If you look at the run rate, I don't think there is anything much to be concerned about. Therefore, if you will see, it will start picking up in Q2. In Q3 and Q4, we have an aggressive innovation plan. We should be over the next two years, as I said, we are extremely confident of hitting that INR 850 crore-INR 1,000 crore mark. You will see the improvement gradually happening as we go to Q2, Q3 and Q4. In Q3 and Q4, you know, we have another round of aggressive innovation program ahead. Right. A related question to this. In honey, you said, there's 100 basis points market share loss. This is on what base? I mean, your overall honey market share would be what? 5%-6%. On that, 100 basis points is a very big number. Slightly higher. No, no. Slightly higher. Just to give you a perspective, we have 20%+ in e-com and double-digit in modern trade and a mid- to high-single-digit in GT. As you know that, the Nielsen doesn't capture e-com separately, but I would think the weighted average number will be. We have lost some share in modern trade. As I said, the actual loss versus last quarter is 1%. If it was, say, suppose hypothetically 8%, it would be 7%. Understood. Coming to the overall gross margins for your company, would you say that in the coming quarters we should see better gross margins compared to what we have done this quarter? There would be some amount of deflation that which is already visible, but which has not been fully captured in the Q1 results. Would that be a fair assessment? If you ask me, as I think alluded to in my opening commentary, that Q2 will be not because simply because of the fact that as the, you know, the vegetable oil prices are going down rapidly, we have been trying to take consecutive price cuts. In order to accelerate the volume recovery of Saffola, obviously, we are giving that price discovery to the consumer immediately while we are holding some old, you know, high-cost RM stock, either in the form of raw material or in the form of finished goods. Therefore, quarter two will be not. Quarter three, quarter four, the fact that if the vegetable oil stabilizes, copra prices are sideways, and crude oil starts softening, you might see it, but quarter two, certainly not. The way we are playing it is very simple. I mean, as far as operating margin, with a 20.6% operating margin, we are banking it. Therefore, in the second half, where we believe the consumption condition will be far more favorable than compared to Q1, we will actually invest to grow in second half. Understood. Basically, you would still stick with your 18%-19% EBITDA margin guidance, although Q1 has been higher because the ad spend will go up in the coming quarters. Is that the right way to read? We don't know. Yeah, also crude has been cheaper in the past. We don't know what's gonna happen on crude or the inflation. Still, at the end of the day, we obviously are clear that second half is the time to actually maximize volume growth. Right. Just one data point. You mentioned that because of the Q4, Q1 seasonality change, the three-year CAGR comes to 6%. That is on value, right? If you can give us the domestic volume growth CAGR also on three-year, please. It is on the slide. This is on indexed volume growth and not on the value. What we've done is- Okay. At volume level, if you do a Q normalization for FY 2020, and then you work out a CAGR, at a volume level it will be somewhere between 5%-6%. Okay. Volume CAGR is 5%-6%. Would that be something that you would sort of aim to achieve for the remaining three quarters as well? The same kind of underlying trajectory? That's right. Just to add, Percy, what we also do is our internal targets also we have moved at a run rate level. That is why we sort of compare this number, and this number becomes relevant for us. Okay. I clarified that that particular year, Q1 was 30%, but normally Q1 is 26%-27%. Right. Got it. Okay. That's all from me. Thanks and all the best. Thank you. The next question is from the line of Tejas Shah from Spark Capital. Please go ahead. Hi. Thanks for the opportunity. Sir, got a couple of questions on international business. First, on Bangladesh, we are picking up news of going through economic turmoil. Any read-through and how are we insulated, if at all, from the current slowdown there? Okay. Two things. First, I think I must commend the Bangladesh government for actually taking proactive steps in managing the economy. Yes, there is a slight issue on inflation, there's a slight issue on depreciation, but given that they have taken proactive steps, I think things will be very much in control. Second, I think our competitive position in Bangladesh is extremely good. Therefore, two things we are doing. We are ensuring that we are doubling up on things which are focus areas, where there are opportunity to gain market share, even if there is a little bit of a category slowdown. Therefore ensuring that we focus on only some of the big things, just like. We are actually replicating the strategy we did in COVID, you know, here, where we ensured that we double up on the core. There are two, three innovations which are continuing to do well. How do we focus on agility and drive costs to actually ensure that we don't pass on this inflation to the consumer, but manage this and be much more strong competitively. What I would say that we continue to be reasonably confident of delivering double-digit growth in Bangladesh irrespective of the situation. Let me tell you, we are also confident that given the proactive steps that Bangladesh government is taking, they'll be extremely resilient in coping up with this situation. Sure. Any pricing action, aggressive one, which we'll have to take in Bangladesh to protect margins and pass on the inflation? We are taking some pricing action, but as I said, we are okay with it. Having said that, yes, I mean, because of the depreciation, there'll be some translation losses when we aggregate P&L and the balance sheet here. That we have to, you know, absorb. Sure. Second part of our international strategy, which you had highlighted in earlier calls, was to replicate Bangladesh success in Vietnam. Any update on that? I think, two things we have done. There are four things which make a business go on a flywheel or a virtuous cycle, which is getting the portfolio right, getting the go-to-market right, getting the cost structure, people, and processes right. I think in Vietnam, we have got all the four right. It's going on the right tandem. We are also gone into female grooming. We are just stepping into female grooming and expanding the total addressable market there. We have started gaining shares. All the signs of Bangladesh in terms of replicating are there. Having said that, obviously it will happen in a certain different pace because you must say that Bangladesh had dominant position and the competitive situation is slightly different. We are extremely confident of continuously now driving double-digit growth in Vietnam in both top line and bottom line over the next subsequent quarters. Sure. Last one, if I may squeeze in on VAHO. Despite the popular expectation of opening up and people stepping out and mobility going back to normal, VAHO as a category has not responded well. Yeah. Any read-through that, despite all the other tailwinds being there for opening up as a driver, the category did not actually live up to the expectation that we had before COVID or around COVID? This is my take on it. If you really look at it, that part of the portfolio was that non-sticky hair oil and the premium part of the portfolio. Now that has got impacted actually by inflation this year. The where we are operating, we are fairly okay, actually, I would say. Oh, okay. If you look at VAHO, if compared to other HPC categories, if you look at HPC, there's actually -1%, I think this quarter in Nielsen. Broadly, VAHO is broadly in line in that. I think there is no difference in the other HPC categories and VAHO in terms of the Nielsen growth rates. But versus other HPC categories, Saugata, we expected that some of these categories, which are skincare, haircare, they will have some tailwind of opening up, offices, schools opening up. That did not surface. Though we witnessed in some of the discretionary categories, staples categories have not shown that kind of bounce back. That was the point actually. Yeah, that is because I think you are right, but that is also because downgrading is happening now because of inflation. We are seeing in VAHO a significant downgrading from premium to, and also a lot of action is happening on the bottom of pyramid. Competitive intensity at bottom of pyramid. The average this quarter is going down a bit. Having said that, I think we have a different take on it, just to give you a response. We want to focus on value share because we are under-indexed in the premium. If you look at already the kind of we are starting to see, you know, market share gains in e-com and modern trade on the super premium, which is where onion oil and others operate. We have actually launched another offering, in fact, last week called Curry Leaves there. I think we believe, and Jata, all the three, we believe there is opportunity there, and that market is, I think, insulated from all the inflation. Now, that market is not picked up by Nielsen, by the way. Okay. These two markets will be what percentage of premium hair oil? Sorry, MT and online? In the super premium? Significant amount. Yes. Mostly it's. Yeah. See, again, I mean, I'm talking of beyond almond and other categories. This is price index of two, three and all, which is all onion oils and all that. They are significantly mostly modern trade e-commerce and beauty outlets, that's it. Okay. Thanks, Saugata. That's all from my side and all the best. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Jaykumar Doshi from Kotak Securities. Please go ahead. Yeah, hi. Thanks for the opportunity. Yeah. I want to understand, you know, INR 200 crore of digital first brands in the DTC side, and you indicated INR 250 crore next quarter and INR 50 crore-INR 75 crore incremental on a sequential basis thereafter, which means you are expecting that to be INR 400 crore plus next year this time for Q1. Which brand in particular gives you confidence at this point of time, if I understand correctly, it's primarily Beardo and maybe Just Herbs and Plix and Coco Soul. Is there any addition there or if you can- We will continue to look at organic and inorganic opportunities. You are right, at this point in time, it is led by Beardo. Just Herbs is the number two. Right. This guidance. Yeah. Guidance of doubling, roughly doubling by 1Q FY2024, it is also largely dependent on Beardo doing- No. Everybody, it has to be, as I said. I think all the brands has to fire and go at a certain accelerated trajectory. As I said, we will continue to look at inorganic opportunities in this space. Understood. That's helpful. Second, could you give us some color on how what has been the response to your launch in onion hair oil category? You know, as a market leader, Parachute is able to capitalize or gain market share from some of these D2C brands. Yeah. I think it is going as per our action standards. The other thing is it has also perhaps forced the market leader to take a 40% price cut. Understood. That's it from my side. Thank you so much. Thank you. The next question is from the line of Kunal Vora from BNP Paribas. Please go ahead. Thanks for the opportunity. In Saffola, how large would the hit be because of the high cost inventory in second quarter? Typically, how many weeks or months inventory do you carry? Will all the high cost inventory be used up in second quarter? Okay. Let me just explain to you this. You are having a sliding raw material table where you are forced to take multiple price drops. In fact, we have taken three price drops in less than two months. As a result, what happens is that you have to take a price drop in line with the market condition because that is how you can. This time we have chosen that to get the volumes back. As long as this settles, obviously. I don't want to get into weeks. Couple of weeks we will have inventory of RM. We will have a couple of weeks. Also that's much more thinner than other brands. What happens usually in modern trade and e-commerce, you immediately discount it to give the pricing to drive offtake. As a result, what happens is that even with high cost MG or high cost RM, you deliver a, you give the consumer that price discovery. That's the reason I said that, rapidly, my kind of volatile decline with these multiple response, there is, it takes time for the margin to settle down and this time we are ensuring that we get the volume recovery at an accelerated level, Sujeet. Yeah. Thanks. It'll all get settled in second quarter. Third quarter onwards, it should be back to normal. Third quarter it should get settled. See, the way we see it's very difficult. I think I am not an expert in raw material pricing, but we expect that this is whatever is the, you know, when we take kind of an average of all the international forecasters and all the experts, they also get it from. What we see is things stabilizing. We are taking price drops. This time what we are doing is that, as I said, I have already banked a 20.7% EBITDA. During a headwind time, we chose not to do suboptimal margins and play. This is a good time to get the right pricing and start the volume acceleration, which we believe should happen in the second half. Q2 is a time to get the price settled and the entire, you know, structure settled and also, you know, get rid of all the high price stocks in the market. Yeah. Thanks for that. Second and last question. You seem pretty confident about second half recovery. I just wanted to try to get some sense on what's driving that confidence. Is it largely the base effect or you're picking up recovery in consumption trends in the last few weeks? Two things. One, if you look at, if you knock off Saffola, even from this quarter one, we grew by 1.4%, okay? Now that growth will. Therefore, if hypothetically Saffola had been flat, then the growth would have been 2%-3%. Then what we are seeing two things. One is of course base. Number two, I think as I said that food growth will get accelerated. Some of the other parachute ones we are getting the pricing right. I think the new prices, reduced prices will settle down in the market by August end, September first week, because as I said, it takes around 60 days to settle down. A combination and base. The base is one of the factors. It's just not the only factor. As I said that we measure through run rate. Our run rate indicates that we should be able to get the higher growth in the second half. Understood. That explains. That's it from my side. Thank you. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Vishal from Nirmal Bang. Please go ahead. Yeah. Thank you for the opportunity. My question is on the edible oils portfolio. We have mentioned that there is a visible downgrading from super premium to mass segment during the quarter. Personally, I thought the demand by the consumers of super premium edible oil would be rather inelastic, and this premium consumer should be more loyal to the particular edible oil they consume based on the kind of benefits that he or she derives. How do we look at this moment? Is it near term or is there any other factor playing out apart from the high prices or inflation? Sorry. If you look at the average, you know, consumption of oil, edible oil is. When I define super premium, super premium is it's not niche. It is still reasonably mass because Saffola is an INR 2,000 crore-plus edible oil brand. That is not niche like, you know, like any. Therefore, first of all, when I define super premium, it's a relative term. If you look at what exactly happened one year ago, or I think 14-16 months ago, I would say, between that and peak price of Saffola INR 230 a liter, we have taken a 67%-70% price hike. Which means actually an average household consuming Saffola, which is four liters, five liters, and there are of course health-conscious households which opt for two, three liters, but if you take four liters, okay? It's an INR 320 outlay. Two things happened. One, the upgradation stopped. Number two, in households where Saffola was one of the oils, like Saffola has a share of requirement or SOR, that SOR reduced. The third thing, as I said, is you must realize the third thing that has happened, the 27% volume drop is not just a drop in offtake. If you were to break up the drop in offtake, it's a combination of three, four things. There is a drop in offtake, there is a drop in HTR. We chose not to do certain business in this quarter where we were making suboptimal margins. If I wanted to give you a roughly a number of offtake, the number would be more in the teens. Offtake drop is not 27, you know, in the twenties. Basically, beyond near term with now prices kind of stable, coming down, across your portfolio. We do expect those consumers to revert back to their original brand of consumption, right? I tell you how the growth of Saffola happens. The growth of Saffola happens because of people upgrading to Saffola, households using more Saffola, okay? Because at the end of the day, you must realize that the average Saffola user is a health-conscious user. The average consumption of Saffola household is lower than other households, okay? Now, what has completely stopped was that upgradation to Saffola and what I think got accelerated is both SOR and people downgrading for Saffola. Now, if you look at historically, the price rise of Saffola over the last 18 months, it rose from INR 139 a liter to INR 230. I'm happy to. I think one on one the analyst team will be, you know, happy to share with you. If you look at price points and growth, I think that could actually, you know, once it hits let's say an INR 170-INR 180 level, I think it's at the price point. Also, you must realize the other thing that has happened, right, is net promotion and volume, it's traders stop, you know, stocking when the price keeps on coming down because they also don't want high price stocks in the system. There's been a significant loss also of SDR of Saffola that has happened in the last six months. Ever since the first time in that three months where, you know, there was this accelerated decline in the raw material prices happening and people have been dropping prices. That's why I said that don't see as a mid-20% decline as everything is an offtake driven thing. I hope once the thing stabilizes sometime towards Q3, we'll be able to recover some of the SDR loss. Understood. Thank you, sir, and best of luck for the future. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Trilok from Dymon Asia. Please go ahead. Yeah. Hi, good afternoon, sir. Thanks for the opportunity. You know, in the earlier question that you answered with regards to the food business, how should we think, you know, from a full year perspective, what's the kind of growth rate are you thinking on the food business? At this quarter, you know, leaving aside this quarter performance. I think it will get into double-digit growth and then as in the second half it will accelerate because as I said that there is an innovation program and there is one. As I said that if you have to look at that 850-1,000 over 2024, we should be in striking distance of that. Sure. Understood. You know, just from when you say in the new innovation will drive from H2, are those, you know, kind of extension in the categories that you already have or use completely new categories that you intend to enter which will probably drive growth further? It could be a combination of both. Also, as you know that we have launched things like peanut butter, mayo and all, which we have currently having a limited launch that will scale up. The other driving growth will be that we are now started a food GTM, which we started in two-three cities. We are now extending it to more than, you know, 10 cities. A specialized food GTM to drive the food business. Sure. Okay. Thank you very much, sir. I'll come back in case I've got the questions. Thank you. Participants, you may press star and one to ask a question. The next question is from the line of Ajay Thakur from Anand Rathi Securities. Please go ahead. Hi. Thanks for taking my question. Just one thing I wanted to check on. We have come across that market, hair oil market actually is kind of declining, and we are seeing a lot of intensity in terms of the competition going up with, you know, major players actually embarking on cross-selling of within the sub-segment. If I were to look at it, you know, Bajaj is expanding its portfolio. Bajaj Consumer Care is expanding its portfolio from the almond oil to more like, you know, the coconut oil and other segments. Similarly, you know, Dabur is also talking of expanding from Amla to maybe the other sub-segments. Now overall, we are seeing the competitive intensity within the hair oil sub-segment is rising in a market which is kind of declining. In that context, want to check on your view, given the fact that we are the market leader, how do you see this competition impacting us, and you know, our growth trajectory, within the hair oil pack then? I'll tell you two things. I think two or three things. First, I reinforce this and time and again I'm reading it that in value we are our market share gain was the highest among all other players. Just to give a perspective, I have to correct one this one. If you look at HPC, while the FMCG, the decline was around 2.6%, in AMJ 2022 as per Nielsen, the HPC volume decline is 6.4%. Actually VAHO decline is, it's you know and it's not so high. VAHO is actually flat. That will tell you the story that the perception that can be built by, you know, that is getting built, you know, very high competitive intensity and we are declining category, I think there may not be always the right perception. If you take a five-year period and plot the VAHO category versus HPC categories, you will see a different picture. Coming to competitive intensity, show me which year Marico has lost market share drastically. I take your point, sir, on that front. What happens, you know, I'll tell you why. Because sometimes what happens is maybe some players who are operating at the bottom of the pyramid may take market share from small players. That's fine. Our objective is to concentrate on value share because we are under-indexed in the slightly premium end, and we'll continue to focus on that while we will defend, but we will not. Our strategy is not to put all our eggs in the BOP basket. Okay, understand. Sir, another point that I wanted to just check on is, are we seeing a higher growth within the premium hair oil segment? Given the fact that, you know, most of the players are trying to, you know, kind of, enter the premium side. Is there some kind of a higher growth that we are witnessing right now in the last maybe a year or so in the premium hair oil segment? Actually, most of the competitive intensity, or so-called activity, is in the bottom of pyramid. I don't see any players. Yes, there has been activity in the digital side of the business, but that is through insurgent brands which are not the organized players. That side of the market is growing. If you look at people who play in the premium side among the organized players, most of the brands are declining actually. Okay. Quite helpful. Thanks, sir. Thank you. Participants, you may press star and one to ask the question. A reminder to all the participants, you may press star and one to ask a question. As there are no further questions, I now hand the conference over to the management for closing comments. Thanks a lot for listening in on the call. To conclude, the start of the year has not kicked off on an exciting note in the India business amidst a tough external environment. However, given the strong competitive positioning of our brands in respective categories, we are confident that we'll be delivering better than FMCG market growth in the quarters ahead. We are confident that international business will continue to stay ahead of the pack. While there is uncertainty around crude-led inflation, we draw comfort from the deflationary trend in other key raw materials that will allow us to invest behind brand building and drive consumer advantage pricing while maintaining threshold margins for the year. If you have any further queries, please feel free to reach out to our IR team and they will be happy to address the same. That is it from our side. Please stay safe and take care. Thank you very much. On behalf of Marico Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.