Ladies and gentlemen, good day, and welcome to Marico Limited's Q2 FY 2023 earnings conference call. We have with us today the senior management of Marico, represented by Mr. Saugata Gupta, Managing Director and Chief Executive Officer, and Mr. Pawan Agrawal, Chief Financial Officer. 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. Before we get started, I would like to remind you that the Q&A session is only for institutional investors and analysts. Therefore, if there is anybody else who is not an institutional investor or analyst but would like to ask a question, please directly reach out to Marico's investor relations team. I now hand the conference over to Mr. Saugata Gupta for his opening comments. Thank you, and over to you, sir. Accept my greetings of the festive season. There was little or no change in the operating environment for the FMCG sector in India during the quarter. Except some improvement in the last month, overall consumption sentiment remained largely muted due to persistent macro headwinds stemming from retail inflation holding firm, currency depreciation and liquidity pressures. The sector declined in volumes for the fourth quarter in a row as per Nielsen, led by a high single-digit decline in HPC, while foods posted marginal growth. Rural has been underperforming urban for a while, but holds promise of the beginning of a recovery in H2 on the back of government interventions, reasonably good monsoon, and higher crop realization. It has not been all gloomy, however, as urban and premium discretionary categories fared reasonably well. Moderation in global commodities also bodes well for the sector. However, recent volatility in vegetable oils and firmness in crudes should be watched. Coming to our performance, after a tempered Q1, it is reassuring to see domestic volumes in the growth territory in Q2 and the overall three-year volume CAGR at 7%. Further, there was an impact of about 1% on domestic volume growth in Q2 due to pack size reductions, which we have accounted for instead of price increases in value-added hair oils. Delving into the 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. We have seen extended sluggishness in loose-to-branded conversions in coconut oil as copra soared beyond our forecast and corrected even during the off-season months of September and October. We believe this correction in copra is a reflection of the weakness in the overall sentiment, in contrast to being predominantly suppressed. As a result, we have been playing catch-up in pricing in Parachute coconut oil, despite being prompt in taking pricing calls as suggested by our forecasting model on pricing. While multiple price drops does impact trade sentiment, we are in the midst of another round of pricing cuts. In view of these continuous price drops, copra prices and consumer pricing should harmonize by December, given there is a lag of six to eight weeks for these actions to translate in the marketplace. Therefore, we expect volumes to stabilize in H2 as we continue to maintain a strong hold in our market shares and even comfortable on the margin front as well. Saffola, on the other hand, recovered smartly after the Q1 blip as proactive pricing intervention in key packs synchronized with the moderation in vegetable oil prices. On the profitability front, we took one-time hits this quarter as we cut prices substantially at one go and ahead of the market to some extent to avoid multiple pricing changes, even while we consumed higher cost RM inventory. We also covered all the ground stock in the market to effect the price cut. The total impact of all these one-time measures was about 75 basis points-100 basis points on EBITDA margins, but led to stable Saffola edible oil growth in Q2 and in October. Once price stability sets in, we'll balance volume growth and profitability at sustainable levels. Value-added hair oils posted subdued growth as continuing headwinds in rural consumption showing up in the bottom of pyramid segment, even though the mid and premium segments did relatively better. Volume growth in Q2 would have been flat if not for the pack size reductions done to effect price increases. It is also pertinent to note that the overall hair oil category has been largely tracking HPC growth, and we expect this phenomenon to continue. We draw comfort from the sustained upward value market share trajectory, and we are focused on expanding our presence in the premium and the super premium segment. We'll continue to maintain our competitiveness at the bottom of pyramid, but will not resort to actively downgrading the category realizations by operating at unsustainable or meager gross margins. Food bounced back to healthy broad-based growth in Q2. We continued to log share gains in oats and soya chunk categories. We also expanded our plant-based protein offerings with the launch of Saffola Soya Bhurji and added a new Saffola Masala Oats variant with a crunch to the oats franchise, which also contains millet. This new variant, with millet and crunchiness is based on consumer insight and need gaps in this segment. We'll continue to further expand our portfolio of offerings in the rest of H2. During the quarter, we also restaged Saffola Honey with the launch of two variants, Saffola Honey Active at a more accessible price and NMR-tested Saffola Honey Gold at a premium for the enhanced assurance of purity. We expect to aggressively restart our market share gain journey in this category with this dual portfolio strategy. We'll continue to invest in broadening our presence in the honey category. True Elements is also scaling up as per expectations. The current revenue run rate of the food franchise keeps us on track to reach the revenues of INR 650 crores in FY 2023 and aspires to hit INR 850-INR 1,000 crore mark in FY 2024. Premium personal care has been growing at a healthy pace sequentially and is now above pre-COVID levels. Beardo and Just Herbs continue to meet internal growth targets. Our digital brands portfolio is nearing INR 250 crores in ARR, and we continue to chase the INR 450-INR 500 mark by FY 2024. Moving to international business, we have delivered double-digit constant currency growth for the seventh quarter in a row, which is unprecedented, and with all markets contributing fairly amidst growing macro uncertainty. Bangladesh has been resilient amidst challenging macro circumstances, with healthy growth in the core and sustained ramp-up in the haircare and baby care portfolios. Vietnam has been gaining momentum as HPC category growth in the region has been buoyant. We'll continue to broaden our play in the region. We also have been witnessing stable growth in Middle East and North Africa since the last 18 months. We believe MENA presents a sizable opportunity, and we are investing to grow in the region. South Africa and the new country development business, which is primarily exports, have been keeping up their tempo as well. Looking ahead, we remain hopeful of more accommodative macro condition in H2, especially in rural, and expect to deliver mid-single-digit volume growth in our domestic business in H2. While the year-over-year volume growth in the core categories does not look exciting this quarter. On a three-year CAGR basis, Parachute has delivered 4% volume growth, Saffola Oils has delivered 8% volume growth, and delivered 6% value growth, which are reasonably healthy. We have also consolidated our market shares in more than 90% of our portfolio on MAT basis, which holds us in good stead once consumption sentiment picks up. We continue to support our channel partners by maintaining the ROI, especially when growth has been muted. We have also not curtailed A&P spends and continue to invest in the long-term health of our franchises and in diversification of portfolio. With a combined annual run rate of nearly INR 1,200 crores in foods, premium personal care, digital-first brands are gaining heft at an encouraging pace and will continue to channelize incremental energies to achieve our aspirations to diversify beyond our core. We are taking measured efforts to build a dedicated GTM for foods and premium personal care, which will help us scale these franchises disproportionately. In the international business, we are confident of maintaining the growth momentum in the coming quarters, even if Bangladesh moderates to some extent in the near term, keeping external headwinds in mind. We are enthused by the diversification initiative in Bangladesh, MENA, and Vietnam paying off. The replication of Bangladesh playbook into Vietnam and MENA has started to show definitive results in terms of uptake and growth every quarter. Gross margins should improve sequentially from quarter three, as copra remains in the soft zone, while the recent volatility in edible oil keeps us watchful. Having closed H1 at 19% EBITDA, we maintain our aspiration to deliver 18%-19% EBITDA margin in FY 2023. We continue to build fundamentally sound franchises in the domestic and international markets and push for the four strategic levers of diversification, distribution, digital, and diversity, which we believe will keep us on the path of sustainable and contributor growth in the medium term. We also continue to make visible progress in our ESG program in each of our focus areas. Creating shared value for all remains the ingrained purpose of our business and will allow us to drive superior long-term performance. We are committed to achieving our net zero emission in our domestic operations by 2030 and in global operations by 2040. With that, I will now close my comments. Thank you for your patient listening, and we will now take your questions. 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 will wait for a moment while the question queue assembles. The first question is from the line of Abneesh Roy from Nuvama. Please go ahead. Yeah, thanks. My first question is on Saffola Soya Bhurji, plant protein. Of course, protein is an exciting category and more so plant protein. My questions here are, how has been the response in the initial pilot phase? Second is, when and what is the plan for larger SKUs? Currently, I see the INR 15 SKU. Third is, till now, we haven't seen any such offering, so it makes huge sense on paper, but is there any idea why the industry till now hasn't launched, given soya is such a large category and Indians are very active consumers? How do you see the focus between the more mass soya chunk versus this kind of product for you from a medium long-term strategy? Focus will be more to create this or to compete and take market share in the soya chunk, which is a much larger category, but has got two very entrenched players. Okay. Let me give you an, I think, an overall, kind of a flavor. The same way we have worked on basically oats. If you look at oats was a breakfast concept. Plain oats was a commodity. But we focused our energies into premiumizing the oats category and providing a value-added offering, which converted this from a, you know, Western cold, this savory, and we converted this category from breakfast to in-between meals. We're just replicating that. We participated in soya. Soya is doing very well, and it is expected to hit INR 100 crore, you know, this year. But we believe that the growth opportunity, just like we have done in oats, is to create, innovate in this category and convert it into value added. And oats currently is a center of. Saffola Soya Bhurji is currently center of plate. We want to convert this from center of plate into a snacking option because I think while others have done it, I can't say, but I think we have a track record of innovation in food, just like we have done in Saffola Masala Oats. We are just replicating this model. In terms of the response in the pilot phase in terms of taste, et cetera, I'm sure it would have met, that's why you are taking to new city, but just want to get some sense there. Second is on the larger SP side- This is a pilot right now. We have just started it, a week back, in fact. It's like, it's been early days. Now, if you notice, obviously INR 15 trial pack, as and when habit gets ingrained, we move, and this is exactly the same thing which we have done in Masala Oats also when we then moved it into the larger pack. We will wait, drive trials, drive loyalty, and move to the larger pack. I think as far as plant protein is concerned, I think in India, we believe the growth is at the mass end and not necessarily the top end. Also in top end, number two, a lot of action that is happening in the top end is in the frozen category. We believe that India will behave differently compared to mock meat, which is a very Western concept. Therefore, as I said that, we will continue to drive value additions in the plain, and we are not interested in participating only in the commoditized space, which is, you know, plain soya nuggets. Sure. That's useful. My second question is on the India versus Bangladesh growth. 1% versus 10%. How much of this is because of the India rural slowdown? How much is it because of the category mix? I understand that. But is it remarkably different to warrant a 900 basis points difference? Third is, when I see the adjacent areas of Bengal and Assam, then how does it compare versus Bangladesh? Because those should converge more versus the 900 basis points pan-India and Bangladesh business. I don't think it's fair to Assam, West Bengal versus Bangladesh, because similarly, U.K. and Ireland might not have the same growth levels. Okay. The way I look at it is this, that if you look at India, a significant deflation has happened because of the price cuts we have taken in Parachute and Saffola. Saffola, in fact, is around 18% drop from the peak, and Parachute we have taken around an 8% price drop, which is not the case in Bangladesh. Okay. I think that would be the reason. Therefore, if I had an inflation, I would have also delivered with a 3% volume growth. I also talked about this one that we had lost out 1% volume growth because we didn't take VAHO price increases. Instead of that, we took a mild drop. If you equate that, I think it's broadly in the same zone, I would say. I don't see any difference. I believe, having said that, obviously we have a relatively dominant position as far as Bangladesh is concerned, and Bangladesh has perhaps a little more economic headwinds than India at this point in time. I think given our competitive strength and our diversification into some of the big areas, we have coped with it better. Sure. Last question is on the VAHO downtrading, which you mentioned, and you also mentioned on the overall hair oils that you would not like to operate at unsustainably lower gross margins. Wanted to understand that, where is the downtrading happening? Consumer is moving to which product? When you say unsustainably low margins, what exactly are you referring at? Okay. What is happening, obviously, if you look at any category in HPC, because of the inflation and the current this one, both at bottom of pyramid, whether it's urban and rural, there we are seeing a downtrading happening in terms of. Because I think in this kind of a category, there is not titration in usage. If you look at a F&B or some other category, there could be titration usage. You know, in some core categories like soap, hair oils, and shampoos, you don't see titration in usage, but you see a downtrading. Any high penetration category, there is this opportunity for downtrading because there are different price points, different brands play. We are seeing that happening in the. Especially the fact that VAHO has a rural skew as a category. This is not just here, but some of the other categories in HPC, which is happening. Now, coming to the margin thing, what we are saying is that, yes, it could be a very. You know, lot of players could have a short-term strategy of cutting A&P, downtrading, and cutting margins to participate in this downtrading. We believe that on the long term, neither if you notice, we are not doing A&P cuts, neither we are, you know. What we will say that we will not grow volume or market share at a gross margin which is somewhat unsustainable over the medium term. As a organization, we will not sacrifice the medium and long term for some short-term quarterly. Sure. One last follow-up here. Whenever we see deflation in FMCG, we see regional players coming back strongly. In both of your key categories, currently there's a deflation happening. When you refer to all these kind of some of the players, they're cutting down on ad spend and operating at a low gross margin, are you referring largely to the regional players in both these categories? No, I'm referring to all competition, you know. Okay. Thank you. The next question is from the line of Arnab Mitra from Goldman Sachs. Please go ahead. Yeah, hi. My first question was on Saffola. You've seen this improvement in volumes. At last quarter, you had specifically mentioned that there was a destocking also in play. Is the volume growth including some kind of a restocking on that destocking which had happened, which is why, you know, this high single-digit volume growth may not sustain in Saffola going ahead? A related question would be, have you had any price changes due to the, again, the volatility in edible oils which happened in the end of October? On the price changes, we'll wait and watch. I can't comment on it right now. Regarding destocking and I think there's a destocking which has happened, the volatility remains. The STRs have not increased. As you know, the edible oil stock control limit also stayed on. It was just lifted two days ago. If you look at quarter two, we have not seen any increase in STRs. As a practice, given the kind of volatility, we also don't want to increase STRs. We hope as the price stabilizes, we will also increase, you know, we will be able to do it, but only when there is a stability in the system. Understood. My second question, Saugata, was on the volume growth, what you mentioned mid-single digits for second half. Now, will your price deflation not be significantly higher in the second half? Would that mean revenue growth could actually go down from the current levels to a flattish level in the second half? Are there other elements? You know, it's very difficult to predict because, see, Arnab, I think there are two things. One is the volatility continues. If you look at the last two weeks, there has been some volatility. Yes, maybe as Parachute, you will have some deflation. So I would say that there will be certain deflation, but. It's very difficult to predict what will be the extent of deflation as of now. Okay, understood. The third question and last question was on this premium personal care business, which is Livon and male grooming, where you called out the INR 300 crore turnover. How big was this portfolio in FY 2020, which was the pre-COVID period? Are the margins in this portfolio better than your average margins and hence as this grows, this will help your overall margin profile? Or due to investments, margins here are also going to be lower, at least in the growth phase? Not really. I think we make significant higher gross margins. The A&P is broadly in line, therefore, the more we sell of this, it improves not only our gross margins, it also improves the EBITDA profile. As far as the numbers are concerned, we have now crossed the pre-COVID levels. This was the segment which got impacted very, to a large extent in FY 2021 and 2022, but we have now crossed back to pre-COVID levels. The gross margin is significantly higher than the rest of the portfolio. It actually helps in terms of our overall gross margin and EBITDA. Just a follow-up question on this. This is a segment also where all the new age B2C personal care brands are playing, the male grooming as well as serums. Is your business also tuned towards that e-commerce-led growth, or this is still largely a general trade kind of a business which it used to be, earlier? If you look at it, the good thing is that we now have a portfolio of brands in male grooming. Beardo plays in the far more skewed towards digital. In fact, I mean 95% is digital, although we are starting to do the crossover into general trade. Set Wet, the significant portion is still driving penetration, so our job is to drive penetration, although we do participate in e-commerce. They have a very, very significant presence in GT. In fact, GT, if you look at in the last five to seven years, a significant portion of the growth has happened to the INR 10 gel pack. We have a penetration task to do in as far as styling is concerned, and therefore this is a secular-based growth and not a one-off growth. Having said that, I think both in the serum and the male grooming category, we will continue to participate aggressively through innovations in the, you know, e-commerce and modern trade space and with the, you know, either brand extension or a portfolio of brands. Okay, thanks so much for that, Saugata. Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Percy Panthaki, your line is in talk mode. Kindly go ahead with your question, please. Am I audible? Yes, sir. Now you are. Yes, Percy. Yeah. Yeah. I just want to understand in the foods portfolio, we had some issues with honey. Are those issues sorted out? What are our market shares now? We had lost some market share. Do we continue at that, or have we share there? I am not sure of what issues we have. Normally, if the issues are happening, we will know more than others, so I'm not aware of any issues. The only market share loss which you might allude to is in the month of September, we phased out the old and phased in the new, so there is no market share loss. In fact, with the current strategy, what we are doing is we are just replicating the Saffola edible oil strategy. As you know, in Saffola edible oil, we used to have only Saffola Total and Saffola Gold, and we introduced Active and Tasty in affordable prices so that we gave the consumers choice, which also led to increased penetration and increased market share. What I can tell you with this kind of a thing, which is a far more affordable pricing, a superior quality product, we expect to aggressively gain market share. Basically, the market share loss which you experienced, that was more of some sort of change in the pipeline issues, or what was the reason? No, there was no market share loss. All I am saying that, see, we can take, you know, one data point. In the month of September, when we phased out the product and phased in this product we started selling in October mid, you have to flush out, and therefore we didn't sell this new thing. There in one or two places there could have been a market share dip. There is no market share huge loss or something, at least what is, you know, what we are seeing from Nielsen or something like that. I don't know where the market share loss. Okay. My question was more on this is the Q1 call, where you did mention that there was a market share loss in the honey segment. Correct me if I'm wrong there. The GT in the last quarter we had said about a market share loss. That was in previous quarter. What we had said is, that in MT and e-com we continued to maintain the whole share. That was in the last, this one. If you are referring to last quarter specific market share loss, nothing has happened. That's right. This was compared to the peak I talked about. When I talked about the last call, there was a slight market share loss in GT, which happened in Q1. As I said, in September, when we did the phasing, there could be a market share loss. Now, that September data will only come in November or whenever it, whatever data which is indicating there is some slight this one loss in empties and which we'll pick up because we know what the numbers are in October. I believe strongly that we'll actually drive market share again with this dual strategy. Understood. On the other segments within foods, the noodles, and all the other sort of smaller products, any commentary you can give on which of them are sort of performing better than expectations, which of them leave some room for improvement, et cetera? I think in terms of scale-up, I think soya nuggets has happened. In terms of the smaller ones, I would say that we are now starting to sequentially grow significantly in Oodles and in peanut butter. I think we have a job to do in mayonnaise. Okay. We stick to our earlier guidance for FY 2025? Absolutely. I think the current run rate is trending towards INR 650 crore and is at INR 850-INR 1,000 crore, including, and you will see a lot more innovations coming in the next six months. I think we have got an operating model in food, but also is there that we have established, we are now slowly in the first top 6 cities at exclusive food GTM, which we'll now expand. Our gross margin continues to improve as quarters go by and we get scale. Therefore, I think we have a very decent playbook as far as foods is concerned. Okay. My second question is on the digital brands. There also we had a target of, I think, INR 400-INR 500 crore by FY 2025. Any kind of progress you can share on that? Yeah. If you had, I think we have circulated in the presentation, we are now alluded to in the last this one, that if we can get INR 250 crore run rate by quarter two and then a INR 300 crore run rate by the end of the year, we should be in line. We have hit that INR 250 crore run rate and all the four brands are in line with the acquisition assumptions. We also continue to look at inorganic opportunities in this area. A mixture of that, we are pretty hopeful of, you know, again, hitting that INR 400-INR 500 crore mark. Of the four brands that we have here, what is your comments in terms of which ones are really doing well and which ones are sort of yet to be scaled up? I think Beardo is, I think, on a virtuous cycle of growth. Both Just Herbs and True Elements are scaling up well. Okay. That's all from me. Thanks and all the best. We believe that Plix is something which has significant potential now that we are going into gummies and all that. Right. Right. True Elements, to be honest, is, you know, a food brand. If you talk of digital, I think Just Herbs and Beardo have scaled up. We believe that Plix is another brand which has the potential for scaling up. Just to clarify, Percy, this INR 400-INR 500 crore will not include True Elements, because True Elements we are including in foods. It's not part of digital business. Sure. Only from the numbers perspective. Yeah. Sure. Thank you. The next question is from the line of Prakash Kapadia from Anived Portfolio Managers. Please go ahead. Yeah. One question from my end, you know, historically in this inflationary environment, FMCG companies were, you know, relatively better. This time around, you know, demand seems to be muted for quite some while. What is happening? Is it just rural? Is it, you know, the continuous rise in inflation beyond few months? What is happening on the LUP side? What was the LUP contribution for us say pre-COVID? What is it now? What is happening especially in rural India? If you could give some thoughts, that would be helpful. I'll give you a broad flavor. I think, see, in the past, yes, you are right that, you know, sometimes when there is moderate inflation, sometimes the brand leaders gain market share. The difference this time has been that perhaps, and this happens when there is significant food inflation, especially at bottom of pyramid, both in urban and rural, you see that people titrating on FMCG, okay? Because they don't want to compromise on food. This is why you are seeing that what has happened, I think during the COVID time, and this time is that we are seeing only at the bottom of pyramid. That's the reason if you look at premium discretionary, whether in rural or urban, continues to do well. It is just not FMCG categories you see in auto, you see in jewelry and other things. The discretionary sector continues to do well. In FMCG, what has happened also is that in HPC, since the categories are well penetrated and you have a plethora of brands straddling price points, you have an option of actually people downgrading from a premium brand or this one brand. So if you look at all HPC or BPC, you know, beauty and personal care, you will see that this one is happening. Having said that, at the top end, which is being basically modern trade and e-com service brands, you are actually seeing that is not impacted and that is being seen in all categories where slightly luxury or premium discretionary is not getting impacted. Yes, they are down-trading and LUPs are growing and the impact is higher in rural than urban. There is one more factor which was there. If you look at COVID time, the premium discretionary had got impacted higher than the other, you know, bottom of pyramid or the mass brands. A lot of premium discretionary brands have a lower base in 2021 and 2022, and therefore that is also coming back and showing optically higher growth. Sure, sure. If you could quantify the LUP contribution, if you have it ready. No, we are not going to get you into each contribution. We will not be able to provide at this point. Fine. You know, in the opening remarks you did mention about, you know, you being confident of rural recovery. Is it just going to be government-led or government getting into election mode? What gives that confidence or visibility or now the base is already so bad, so growth has to normalize and come back? It's a combination of both. You are right. It's a combination of both. Yeah. Okay. Because if you look at the rural, you know, that shrinkage started sometime in Q3 last year. Right. Understood. Thank you. All the best. Thank you. Before we take the next question, a reminder to the participants. Anyone who wishes to ask a question may press star and one at this time. Next question is from the line of Avi Mehta from Macquarie. Please go ahead. Hi, sir. Just, you know, wanted to check on the volume growth expectations. If I recollect, in the first quarter, you had shared, you know, an expectation of moving back to the medium-term targets of what, 8%-10% volume growth by second half. There seems to be some sort of moderation, that expectation. I just wanted to appreciate what has driven that. If you could kind of give some comments on that, please. I think, when we gave that comment, we expected that the global geopolitical and economic situation will have a solution. That solution hasn't happened. We continue to experience that inflation and therefore, given the current conditions, we believe that at this point in time, we should be able to deliver a mid-single digit kind of a number. Would it be fair to say that you know, on an overall growth basis, the mix of volume and price, the price aspect is kind of risen, which is why you are kind of changing the volume aspect. Is that the way to see it? Is that the right way to see it? No, not really. Not really. I'm giving this on the basis of the current consumption scenario. See, as I said that I think, and the other reason I said is that we normally don't have. Normally, as you know, in copra, this is off-peak season, you normally don't have the copra. So Parachute, we continue to take price reductions and every time, unlike Saffola, which is an urban brand, in Parachute it takes six to eight weeks for the pricing to realize and get stability. So that stability of pricing can only happen in December. Therefore while H2 will recover, I mean, and that's the first. Second shift is our assumption on rural growth and overall BPC and BPC growth and our endeavor is to better. That has happened, that whatever has been the value, I think the value decline has been -6%, but we have performed better. We have gained some market share. I think we are estimating that what was our estimate of the category growth, when we talked about it in, you know, first week of August versus now, there has been a little bit of a change. Okay, sir. Understood, sir. The second part was more of, you know, trying to appreciate the food segment. Now, I understand that we have chosen- I just wanted to add something. Even if you do mid-single digits, our three-year CAGR will be high single digits in line with the medium-term aspiration. You need to look at the three-year CAGR. The three-year CAGR will be definitely high single digits in volume growth. Okay. Got it, sir. The second bit was on the food side. Now, I understand you've chosen categories which are large, unorganized, like, so, yeah, but and, you know, offer very strong opportunity for growth. Do you see any concerns that such launches makes Saffola a more generic food brand versus the health-focused brand that it currently is? Okay. Let me just give you the perspective. As far as Saffola is concerned, we are entering into categories which are scale, but at the same time which are health-focused. Saffola is a brand which encourages people to live, you know, a healthy life. If you look at soya is a plant protein, and it's a very good substitute in terms of better-for-you products. I think if you look at the journey of Saffola, it started off in 1990s as a therapeutic brand, moved into a preventive space. As we entered with foods, it then became a better-for-you kind of a product, and therefore it's a healthy way of life. Wherever we enter, we'll offer an alternative which is better for you. A peanut butter which doesn't have sugar, which has jaggery. Mayonnaise which is creamy or less fat. Oats which is anyway into heart health, but with masala, and we will not compromise on the taste. Yes, we are massifying in terms of the categories. Because if you really look at food, if you don't get into categories which have scale and operate in niche, then Saffola, the total addressable market, would not have got realized the expansion and would have under-leveraged the strength of the brand. I don't think we'll compromise on health at all, but I think which will be better for you rather than just functional. The other route to Saffola could have been getting into nutraceuticals and functional foods, but that would have not given scale. We believe that Saffola was very, very under-leveraged as a brand for health, and we will enter, continue to enter categories, and this is in line with our ambition of, you know, getting INR 1,000 crore in foods. Very clear, sir. Clear, sir. Thank you very much. That's all from my side. Thanks again. Thank you. Next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Hi, good evening. Thanks for the opportunity, Saugata Gupta. I'm reading on slide seven, where we have given the numbers. What I see that PCNO, the volume decline is 3%. Just was interested, what is the quarter two category volume decline? Slightly more it will be because we have gained a little share. Just about, but it's a share more it will be. As I said, two things have happened, even until the pricing settles down and inflation you have seen. One is that the loose to branded conversion has gone down and maybe what is also happening is that you know people are what I call in households which are dual households. The dual household is basically a typical household where there is dual usage of unbranded, branded. Our SOW could have gone down. These are the combination of this. Okay. Just one follow-up on the PCNO. You said you have taken a drop in price. Is the pack sizes dropped or the price is come down from INR 37- Right. Absolute prices. In PCNO, don't take all with the price, absolute price. This INR 37 has become INR 35. In value. Yeah. 100 ml was priced at INR 37 previously. That is dropped to further down. Yeah, that's right. Just one clarification. You said on Saffola you have given the benefit to the trade also for the price drop. For PCNO also you are doing? Yeah. No, you can't because, see, Saffola is very easy. One is the HDR is very low. Yes. It's a very, very focused distributed brand which are huge, you know, contribution of modern trade and e-com where you can even quickly give the benefit to the trade. Okay. In PCNO you can't. Given PCNO is a mass distributed brand, to give you an example, and we have done this based on Nielsen where the pricing is there. By the time you take a price drop in primaries or in the factory, it takes at least six to eight weeks, especially in rural areas, to see that price in the shops. Because the average DSR can be 40 days-45 days also. Okay. Got it. In Saffola, it operates on, you know, eight days to 10 days. Got it. My second and last question on the food. Assume that you've done INR 300-odd crore in food. What is the contribution for non-Saffola product? Non-oat product, sorry. Non-oat product. We don't want to get into this one, but all, everybody, everything is getting growth, including oats. I can't get you a break-up of this, but it is, growth is delivering growth if you are wanting to ask. No, no. I'm more interested because you have taken a lot of interventions launching the subcategories and adjacencies. How that adjacencies- Yeah. are faring well, that was more interesting question. No. As I said that it is a broad-based growth and out of which, as I said, that we believe that the in terms of scale after oats and Masala Oats, soya nuggets and honeys, in terms of scale, they are the biggest. Okay. Wonderful. Thank you, and all the best to you and the team. Thank you. The next question is from the line of Latika Chopra from JP Morgan. Please go ahead. Yeah. Hi. Thanks for the opportunity. Hi, Saugata. You know, I just wanted some data or some color on, you know, three-year volume CAGRs for Parachute and VAHO. You know, how is that different between urban and rural for both these categories? We can, I think we can do that offline because I don't have a ready-made this one, because what has happened is this rural, urban, I think, when the COVID started, rural was growing higher than urban. Since the last couple of quarters, it's been the urban which is going higher than rural, so. Yeah, no, but from a qualitative perspective, you know, typically you would aim for rural to drive better volumes for, probably both these categories, from a volume perspective. Do you think, you know, that's kind of. I'm talking about three-year CAGR, you know, just taking care of all the disruptions, or maybe even if you take a five-year period. Has rural volume growth, you know, normalized basis matched your expectations? Or you feel there is a reason to probably temper the growth expectations, you know, for both these segments? I know you're pegging it to BPC, but- Not really. Just, you know, the last four to five years. No, no. I think. See, this rural phenomenon is of very, very recent, okay? If you really look at it in PCNO, actually PCNO has, you know, if you look at PCNO in the. If you take a five-year perspective, if you knock off this year, I would say rural would have outperformed urban. Okay? Now it is only in this year where we are seeing this phenomenon. The reason has also been that in the COVID year, obviously, there were more disruptions perhaps in urban. I don't think in terms of. As I talked about, I think we gave you the number. There has been a 4% volume growth in Parachute in a CAGR period, and value added 6%. If you discount this year, I think broadly it has been in line with the aspiration. It is this year where it has been a little tepid, I would say. All right. The second clarification I wanted was on Saffola edible oils. Have you seen any further price reductions post September in this category? No. Basically pricing is now stabilizing, you know, as we look into future. You never know, because in the last few days, you know, I mean, it's very difficult to predict. I mean, what we have said is that we have a strategy now in place based on our learnings from Q1, how to manage volumes and margins. Sure. Perfect. Thank you so much. Thank you. Thank you. you. The next question is from the line of Siddharth Bhattacharya from Anvil Wealth Research. Please go ahead. Hello, am I audible? Yes, sir. Please proceed. Yes. Yeah. I'm sorry for feeble voice. I have a bad throat. I just wanted to understand our foods strategy for the HORECA segment. Are we looking at that segment for our portfolio, if at all? How do we strategize to go about generating sales and getting market share in that segment? I think, given that we are a small player, I don't think we are now, you know, we are focusing on that segment at all. See, food for us is, you know, something which has to deliver higher margin than Saffola edible oil because we are diversifying and expanding and you know, and the total addressable market to Saffola. At this context and given our size, I think this is a channel of HORECA which does not profitable. Only for scale players and certain categories it works. As far as we are concerned, in the immediate future, we don't see us participating in that category. Okay. Because I thought mayo would be a product that would fit well in that segment. That is why I'm asking this question. If you look at the average gross margin HORECA channel, it will be lower than Saffola edible oil. Got it. The basic purpose of doing food other than total addressable expansion and improving the Saffola overall gross margin will be defeated if we participate in HORECA channel at this point in time. In any case, I think given the category penetration of some of the categories, especially oats and all, we have a huge task ahead in the next three to four years, and there is huge headroom for growth in retail itself. Got it. Thank you for answering my question. Thank you. Thank you. The next question is from the line of Ajay Thakur from Anand Rathi Securities. Please go ahead. Hi, sir. Thanks for taking my question. First question was more on the international market where most of the FMCG companies actually had come out with, you know, the inflation-led impact on margins and growth. Just wanted to understand how things stacks up right now, given the volatility in terms of the currency might have reduced and also the input cost inflation, I believe should have stabilized. From going forward, can we expect, you know, better traction in the international market from that perspective? Or we can still, you know, expect, in the coming quarters impact of, you know, currency volatility and input cost inflation on the gross margins? I think two things. One is, as far as growth is concerned, I think we have continued to deliver very, you know, steady growth independent of all the volatility that is there. Now, as far as currency is concerned, yes, perhaps the significant part of the depreciation is over. Having said that, on a YOY basis, that will continue. I don't see some of the, in the markets, the currency appreciating versus the US dollar or, you know, appreciating versus what the rupee. As I said, I am no expert and nobody can predict, but that is the current theme. As far as costs are concerned, yes, you are right. I think as far as costs are concerned, input costs are concerned, that should ease out. Therefore, maybe international business will add to the little bit of the gross margin sequential improvement we are talking about. Having said that, I think we have a significantly good EBITDA as far as international business is concerned. Therefore, our focus will be also to ensure that given these markets, especially Bangladesh, Egypt and all which continue to maintain high inflation and currency, some of the currency continues to maximize growth. That is an important thing, and gain market share. Continue to gain market share in each of the franchises where we participate. Having said that, we are lucky because if you look at Vietnam and Middle East where we participate, that is reasonably insulated from all this. Okay, thanks. The second question was more on the, you know, the domestic part of the business, wherein if you have to look at our hair oil portfolio, that would be constituting a major chunk of the revenues. Given the last maybe three-year period wherein we have seen, you know, the volume growth being slightly softer than maybe the, you know, historical averages of around 10% or, you know, in that context. How do we, you know, kind of see growth, you know, kind of being re-energized in this space? Because we are the market leader and finally, you know, that will obviously help us in terms of the growth momentum coming back. Let me address it in three segments, okay? The first, as far as Parachute is concerned, as I said that once the pricing settles down, and we have been taking price drops in line with the copra, and while maintaining margin, we believe the volume growth will start inching up. As far as value-added hair oil is concerned, I don't think we can significantly impact category growth. We will continue to gain market share, and this will mirror the overall BPC or the HPC growth. Having said that, we will continue to aggressively grow foods. We will diversify in digital brand, and if you really look at it, in the last three years, and as I spoke about that we have around INR 1,200 crore of this business, and they now contribute to a significant portion of our budget. I mean, significant portion of our turnover. As far as edible is concerned, I think it's stabilized. I don't think the volatility is. Well, the volatility to an extent is will be lower going forward. If you really look at it, I think If you look at a three-year period of Saffola, we are pretty confident of giving high single-digit growth in Saffola also over the medium term. In some way, the joker in the pack is, you know, return of rural, you know, revival of the rural consumption, which we believe will slowly happen. We are also entering perhaps a little softer base. Understand. Quite helpful. Thank you, sir. Thank you. Ladies and gentlemen, we take that as the last question for today. I now hand the conference over to the management for their closing remarks. Over to you. To conclude, it was encouraging to see improving trends in our domestic business and a top quartile performance in the international business. While we anticipate traction in the domestic core categories to stabilize soon, the positive strides towards diversification of the domestic portfolios through foods, premium personal care, and digital are exciting, and we will continue to state and chase aspirational targets along the way. The show of strength from each of the international markets is heartening, and we will ensure that we do not take our foot off the pedal here. Amidst volatility in the global commodities and cost pressures, we will aim to deliver stable profitability and remain biased towards accelerating growth while investing towards the long-term health of our brands. If you have any further queries, please feel free to reach out to our IR team and they'll be happy to address the same. Please stay safe and take care. Thank you. On behalf of Marico Limited, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.