Ladies and gentlemen, good day, and welcome to Marico Limited Q3 FY23 earnings conference call. We have with us 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 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 questions, 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. Over to you, sir. Yeah. Hi, everyone, and good evening to all those of you who have joined the call. I would firstly like to wish all of you and your loved ones a wonderful and a happy 2023. I will start off by giving you a flavor of the operating environment before delving into our performance during the quarter. After the FMCG sector grappled with the dampening effect of inflation for the better part of 2022, we believe that there are indications of the start of a gradual improvement in consumption trends following the sequential moderation witnessed in commodity and retail inflation. CPI has come down from the levels of +7% earlier to sub 6% in December 2022. We have also seen visible softening in prices of some key commodities from the unprecedented levels brought about by the geopolitical tensions and the supply chain constraints earlier during the year. Amidst this evolving context, the FMCG sector recorded a marginal volume decline in December quarter, its lowest in the last five quarters. Amongst categories, foods stayed on the growth path while HPC recorded mid-single digit volume decline. Urban continued to grow in low single digits. Rural remained the weak link, although its trajectory appeared to improve. Easing inflation, a healthy Rabi sowing season, and indications of higher farm income augur well for rural growth prospects. Increased budget allocation from the slew of initiatives announced in the union budget should provide the much needed impetus in this direction. Coming to our performance in Q3, we are enthused by improving trends seen across most parameters. Top line growth was underpinned by 4% domestic volume growth and 8% constant currency growth in the international business. If not for the pack size reductions in value-added hair oils, volume growth would have been at +5%. On a three -year CAGR basis, domestic volumes grew by a steady 6%, which I believe is in the top quartile amongst all companies in the peers sector. International business constant currency growth stood at a robust 11%. In terms of profitability, gross margins seen an year-over-year and sequential expansion, owing to a stabilizing raw material and consumer pricing environment and a healthier broad mix in the India business. On a three-year CAGR basis, A&P spends were up 6%, and we delivered revenue growth of 11%, which has validated our strategy to optimally invest in long-term brand building despite transient cost pressures along the way. Delving into the India business, I will now take you through trends we are seeing in each of our categories and some color on the strategy and outlook for the period ahead. After seeing some sluggishness in the branded coconut oil over the last four quarters owing to the extended deflation in copra prices, we have seen a revival of volume growth since the month of December in Parachute Rigid. Loose to branded conversions picked up with copra prices firming up favorably in the off season, and it is the first instance when we are able to establish the right pricing in the market at least by mid-December. As a result, the brand gained 30 basis points in the volume market share during the quarter. With copra prices expected to be range bound in the near term, we expect to clock volume growth in line with our medium-term targets going forward. Saffola oils further its growth momentum with low teen volume growth, this driven by stable trade inventory and consumer pricing. With the commodity prices softening, the revenue growth was subsequently lower. The international vegetable oil complex needs to be observed in the near term, we will remain focused on balancing volume growth and profitability in a sustainable manner in the coming quarters. In foods, we remain on course to achieve the FY24 aspiration. The segment was led by superior growth momentum in the oats category, which grew at 20% and maintained its strong leadership position in its category. Our newer offerings under Saffola and FITTIFY ranges continue to gain traction. During the quarter, we entered into the ready-to-eat space under our brand Saffola Munchiez with the launch of ragi chips and roasted makhanas in multiple flavors. Post-COVID, as people have become more health-conscious, the industry has shifted from indulgent snacking to guilt-free snacking. Saffola Munchiez combines the power of healthier grains along with delightful flavors to provide better alternative in the healthy snacking category. We'll continue to drive meaningful innovation in the foods over the next few quarters, and some of the innovation will leverage the goodness of Shree Anna or millets, in line with the government's focus on establishing India as a global hub for millets. In Value Added Hair Oils, we were unable to tide over the weakness in rural consumption, which is witnessed in most mass personal care categories. On a three-year CAGR basis, however, Value Added Hair Oils delivered a reasonable 7% value growth. We continue to see better penetration in mid and premium segments, also reflecting the 80 basis points gain in value market share. After some degree of commoditization and increased competitive activity in the bottom of pyramid segment, we are expecting better volume growth and market share gain now that there has been substantial price increase taken by other competitive brands. With inflation easing and rural slowdown showing signs of bottoming out, we expect to see pickup in growth in line with the other HPC categories. Premium personal care maintained its strong momentum and registered double-digit growth. We have seen a remarkable recovery in this portfolio since the pandemic and aim to deliver 20% growth consistently over the medium term to drive lower penetration and our market-leading position in this category. The digital-first portfolio is scaling up well in line with internal targets. As we focus on scaling up these brands in the digital-first portfolio, we are also charting a sub-sustainable path to profitability along the way. Coming to our international business, we are able to continue a healthy momentum despite macroeconomic uncertainties and currency devaluation in some markets. The business at Myanmar, which declined due to Forex-led challenges, registered 11% constant currency growth. Bangladesh is witnessing some macro headwinds, though the severity is not any different compared to those seen some of the emerging economies in Asia, Africa, and Eastern Europe. We have been resilient even in the midst of a challenging macroeconomic environment, which goes to showcase our portfolio strength, distribution strength, and consumer belief in our brands. Our Vietnam business further strengthened with both HPC and Foods exhibiting continued growth. During the quarter, we also entered into female personal care in Vietnam by acquiring brands Purité de Prôvence and Ôliv, which offer a range of premium and differentiated haircare and skincare products. We are upbeat about the growth prospects in Vietnam and look to significantly expand our play in the personal care category. Our MENA and South Africa business have also displayed significant growth momentum while the NCD business, which is a new country development, is also growing in line with internal aspirations. Looking ahead, we are confident of maintaining an upward trajectory in volume and earnings growth in the quarters ahead on the back of stabilizing raw material and consumer pricing environment in the domestic business, coupled with consistent market share and penetration gains in our four categories, while we expect macro headwinds to gradually recede along the way. We believe that the worst of inflation and volatility is over. Moderating inflation and measures in the budget to enhance disposable incomes and spending will gradually reverse the flow and accelerate unbranded to branded conversions. In coconut oil and Saffola oils, pricing has taken some time to settle in, and our consumer pricing is now more stable and in line with the market. We also expect competitive pricing action, which has taken place at a relatively lower inflation to reverse the commoditization in VAHO to a significant extent. The diversification journey through Foods and digital-first is progressing in line with expectations. Now that two of our brands are hitting critical mass, we are also focusing on improving cost structure of both Foods and digital. In international business, we are confident of continuing the double-digit growth trajectory as the business have been relatively more resilient despite external challenges in some of the markets. Gross margin should remain steady and herein with an upward potential. EBITDA margin should remain in the 18%-19% range as we close FY23 and move above the threshold of +19% next year. We continue to build fundamentally sound franchises in the domestic international markets and will progress along the four strategic areas of diversification, distribution, digital, and diversity that shall enable us to deliver sustainable double-digit growth over the medium term. We also continue to make credible progress in our ESG program in each of the focus areas. Creating shared value for all remains the ingrained purpose of our business, 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. With that, I will now close my comments. Thank you for your patient listening, we will now take your questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on the touchtone telephone. If you wish to remove yourself from the question queue, you may press star 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. Reminder to the participants, anyone who wishes to ask a question may press star one. The first question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, Saugata. Just wanted to ask on VAHO segment. We understand that there is a overall slowdown in the industry. Is there anything that you can do from your side to sort of improve the growth in VAHO? If at all, when do we see the results of this coming through? firstly, I think, VAHO if you see largely mirrors some of the mass segments in the, you know, HPC categories, I mean. Secondly, if you look at VAHO compared to other categories, it's more rural, and rural has seen some strengths. Some of the markets, for example, you know, in the East or UP and all that, which have specific areas where we have seen this one. You know, I believe two things are happening. People within the category are downgrading, and also maybe the unbranded to branded journey, there's a reverse flow that is happening. Now with two things that have happened. One is, you know, the entire input costs, which have, you know, gone down and the inflation going down. I believe that this reverse journey will get corrected. Secondly, I think interestingly what has happened in the category is that there has been significant activity or at the bottom of pyramid end where perhaps some players were, you know, not taking price increases and there was perhaps operating with unsustainable margins. A lot of players have taken the price increase. Therefore, we believe that is good because that helps us to focus on, I think investing behind the category in terms of ATL and actually growing the, you know, the mid-segment. We are focused on actually gaining value share as the gap between value share and volume share. Therefore, if some of the players, you know, See, what was earlier happening was significant down, you know, shift of money from ATL to BTL that was witnessed by other competitive brands. I believe that will also change. That is good for the category because everybody then invest behind category growth. I'm pretty confident that as we move towards the next two, three quarters, this growth will get, you know, this decline will get reversed. Understood. Secondly, on this, launch of, Munchiez, see the overall snacking category in, India is huge, right? Unorganized, organized, put together everything might be INR 100,000 crore or even more. Just wanted to understand how you are looking at, the opportunity size, here for yourselves. Okay. You are absolutely right. I think it's a vast segment. Having said that, I think we are offering a better for you healthy brand. We have learned one consumer insight, that the Indian consumer will not compromise on taste for health. Therefore, we have actually managed to deliver a product with all the goodness of millets and of course, the fact that, in terms of, you know, other things like fat and other things, which is far lower than other competitive brands, a very tasty product. Obviously, it's priced slightly higher. If you look at we will now participate in line with our strength, which is modern trade, e-commerce and e-commerce, again, we are doing, what I call quick commerce and a significant amount of food outlets. As you know, we are rapidly scaling up our food GTM in at least eight to 11 cities. We now have a critical mass of any segment we are participating in, which covers 50% plus weighted distribution of the premium part of any of the segments we're participating in. We were growing slowly. I am not giving any, you know, numbers. The product is beautiful. In food, if you ask me if the product is good, if you can generate trials, automatically repeats and scale-up happens. I think we will go up gradually. I think the best thing we are doing is we are coming up products which deliver on taste. We are investing significantly behind distribution, and I believe we'll get a multiplier effect on this. As I said, in overall, foods are more or less on track to meet our aspirations. What I notice in bagged snacks is that typically the 10 INR price point is very, very important. I mean, even for premium products, even let's say for products where the rupees per kilo is higher than let's say the normal product in industry, just making that product available in a 10 INR price point really drives sales. Was just curious as to why you do not have a 10 INR price point in these products yet. I think, various categories have actually vacated the price point and I think, yes, it takes, you know, you take bold and courage to vacate that price point. If you look at noodles has vacated that price point. If you look at the history of masala oats, we, despite competition, I think we've, you know, we're, you know, present in the price point of INR 10 or INR 12 bucks. We entered at INR 15. We today have a INR 300 crore business. I think ultimately, if you offer consumer value today, I don't think that is an issue because at the end of the day, as I said, that if I have to invest behind a brand, I have to start with a GM that is sustainable. Therefore, given the fact that we have a superior product like millets and a certain offering, I don't think in INR 10 we will ever have made a sustainable margin on that. No, for ragi, for example, which you have launched, I think it's INR 25 price point, if I'm not mistaken. It's 20. I mean, keeping the gross margin constant, I mean, can't you just reduce the grammage and make it available? The reason I'm asking is the examples which you gave of Maggi and oats and all that, they're not exactly in the same category of bagged snacks. Bagged snacks, INR 10 price point is probably one of the most selling price points. At the same time, I don't want to name brands, but there are brands which have operated higher and have got critical mass. Okay. Okay. Yeah. That's it, from my side, Saugata. Thanks very much. Thank you. Thank you. The next question is from the line of Avi Mehta from Macquarie. Please go ahead. I just had one clarification on the gross margin comment, you know, where you said that you expect gross margin to remain steady. Is this because you're expecting currency depreciation in international, which is what is the worry? Because India margins are still what? You know, much below that 45% odd average that we used to expect. Would love to understand the reason for this comment. Thank you. Thanks, Avi, for this question. What we are essentially saying is that gross margin will remain steady, which means YOY it will definitely improve and therefore there will be some upward bias as compared to where we are at this point in time. However, the point to look at is that we should be looking more from an operating margin standpoint because there are multiple levers that will be paying out. From an operating margin standpoint, what we are saying is we'll be maintaining the ratio to 19% for the full year. Okay. Okay. You're essentially saying that it is sequentially is what you're looking at, and that whatever that 41% odd level that India is at is what. Yeah. You are essentially saying will sustain... Yeah. Even in India. It's not a mix, geographical mix that we are talking about over here, which is the reason for the consolidated numbers. Not expect any further improvement in the international because the currency situation has not improved. In fact, there's a translation hit that's happening on the Bangladesh depreciation. Whatever improvement will happen will largely happen on the India business side. Okay. Okay, perfect. That's all from my side. I just wanted to kind of clarify that. Thank you. Thank you. Thank you. The next question is from the line of Vivek from Jefferies. Please go ahead. Hi, Saugata and Pawan. Two questions. My first question is a follow-up to what Percy asked. On the value-added hair oil side, you know, is there a wide space that you can target? Basically, I mean, there were like four or five quarters where it grew double-digit, but for a long, long time it has not or it has barely grown. What is your thought process on, you know, is there a way out to, you know, gain market share more aggressively, a wide space that you can target, or you just need to wait for the, you know, for the market to pick up? Firstly, I think the three-year CAGR is still 7%, which is healthy if you see compared to any, you know, our performance compared to any BPC category. I think, three-year CAGR is good. Yes, there is one on last, you know, as I attributed to two things. One is there is a far more rural skew in this category. Number two, within rural also, some of the markets in the country are witnessing a little more sluggishness, and VAHO has a higher concentration in that. You are absolutely right. The two things we are doing is that we are clear. As you know, we have continued to gain value market share. You will see more participation in mid and premium segment to drive that. We are also, as I said, you know, happy at the fact that there has been competition price increases because that gives relief at the bottom of pyramid. What was happening was that you are maintaining a share of voice at lower spend. The overall category spend. This will help if also competition, others convert money from BTL to ATL, because converting money to BTL and doing unsustainable margin is not good for the category. I think that change is happening, I believe. Therefore, that will also lead to overall better category saliency and driving the growth of the category. As such, the other thing that has happened, which is specific to this category, unlike other categories, like in HPC where there is only downgrading, a significant portion of the people have also moved back to loose mustard, you know? To me, with inflation going down, I believe a reversal is going to happen and also increase in rural income because people want brands, people want aspirational brands. The only wide space we have started doing is two things. One, we have now started taking onion oil to GT, where we believe we have a better right to win than some of the so-called digital first brands. The second thing is we are also going to be a little more, you know, exploring some of the plays in the mustard area, because that's an area which has given growth. Both at the bottom of pyramid and at the mid and this one, you will see a little more of this one. We are just waiting for the category to grow. There is no point in investing. As you know, we will also get, significant gross margin play to invest, given that there will be, you know, decrease in the price, you know, input cost table. We are waiting for the some tailwinds to come to invest and gain that market share. Got it. Got it. Suagata, another, you know, it's an observation. I don't know, correct me if I'm wrong, but if I leave aside your digital, you know, first portfolio, organically speaking, it looks like that, you know, your energy is far more towards new launches on the food side, and lesser on the personal care side. Is that observation correct? I think it's in line with the fact that, I think, I tell you, let me just give you the perspective. If you look at COVID, this is a story from 2020, we believe that there was a significant, you know, move towards in-home consumption. Okay? Now, if you look at the opportunity that was there to expand the total addressable market to Saffola, we actually leveraged it. If you believe with a strategic funding to sales multiple in food, you can quickly get scale. Therefore, in food it is very important to quickly get scale because that also has an impact on cost leverage. We are focusing our energies on that. During that time too, also things happened. One, while there was growth in digital space, there was significant contraction in a lot of premium categories in HPC. There was also a contraction in Value Added Hair Oils. Therefore, when there are headwinds on the category, trying to invest behind new products is not the perhaps the right, you know, strategy. We invested and put all our energies behind categories where there is a tailwind, because that is not climbing uphill, that is going with the tide. Having said that, going forward, we shall see, I think in the next 12 months, we will see, I think, equal number of innovations also in this part of the business. Okay. That's interesting. Let's say, you know, you mentioned 12 months. If you take a three, five years out, my impression is that, you know, increasingly, I mean, I know food still is smaller part, but increasingly the, the launches will be more on the food side and steady state it will keep seeing as in expansion in its, you know, in the mix from an overall portfolio standpoint. Is that a correct view? You know. Not really. If you look at it, I think in Bangladesh, we have exhibited our ability to expand the total addressable market in Parachute Advansed. Therefore, we have... I don't think, you know, we can't do it. Similarly, I believe the premium personal care, which is categories like Serum, male grooming, which got impacted during COVID, or I think we just attributed to in VAHO some of the things like onion oil and others, I think there is enough opportunity. Having said that, I think the food part of the business and digital, yes, the new part of the business, it will continue to increase in contribution. I see in the next two, three years it will get into mid-teens, the, what I call the diversified part of the business. This is in line with our overall strategy to diversify our portfolio. I think what is equally important is that the fact that as I alluded to during my opening remarks, having achieved scale, we are also looking at improving the margin structure of food and the profitability of digital brands, because that is also important as because they will become perhaps a higher contribution to the overall portfolio. Got it. If I may, if I can add third question, if okay. On the digital brand side, you know, so, in the context of all that is happening to, let's say, internet franchises or, you know, the profitability focus and all, two parts to this question. One, are you looking, you know, aggressively to acquire more assets? Because you are the first one, I think, or at least among the first one to, you know, to take a shot at this opportunity when I don't think there were that many competitor or that many players who were thinking about it, number one. Number two, in a, you know, in a scenario where, you know, there is a paucity of capital, isn't that a good time for, you know, you to actually, you know, be more aggressive and gain shares, given that competition will, in a way, see a pullback in spending, et cetera, et cetera? We will look at acquisition. Okay. Having said that, I think we like, you know, basically brands that fulfill an unmet need, that delivers good, I mean, that delivers on basic unit economics. We like to work with founders who have a mentality of building to last versus building to sell. Therefore, we will not acquire dead assets which have no potential just because it's available cheap. I believe that, you know, again, we will continue to look at assets which have growth potential and, you know, and I think there are perhaps assets in the market like that, and we will see some acquisition. Just because it's cheap, I will not buy because there is no point buying things cheap which have no value or future potential. As I said, we not only look at the brands and the headroom for growth and the unit economics, we also like to work with founders who have a certain amount of, you know, what I call a cultural fit and a, this one, mindset fit with us. Got it. On the second part, Saugata? What was the second part? Sorry. What I meant was basically in a cash crunch environment, do you think there is a, you know, case for you to at least whatever acquisitions you have done, and your own, you know, Marico's own initiative, is there a case to be more aggressive, you know, to go after market shares or whatever build categories at the time when competition is under, let's say, stress? Yeah. You are right. Having said that, we also then, therefore, the onus is also on us to accelerate the path to profitability journey. Because if you look at it this way, that it is very important that now that food and digital business have a certain scale, we have to also look at profitability. Because at the end of the day, as I said that while we don't have, I mean, our, our businesses don't have that much cash burn compared to a lot of startup, you know, spaces in the digital space. At the same time, we will look at market share, but at the same time we're looking at both right now. Right. Sorry, Saugata, my point was, sorry if I'm, you know, extending this a bit, but my only point is that let's say you already have a, let's say, investment in Coco Soul, for example, right? Or Pure Sense. Yeah. Is there not a sense in, you know, supporting those businesses and letting them go aggressively after market shares at the time when digital-first companies are under stress because of. Yeah. Obviously. Obviously. We will not do something which is unsustainable in the long term. See, I will not do something to show up short-term turnover which is not sustainable, which doesn't have the... If the unit economics of the business is fundamentally not right... See, for me, I don't have to show valuation. I'm not going to do something which is I know in the future is not sustainable. Yes, I will continue to invest. I don't have a cash crunch. Having said that, I'll be equally prudent. Got it. All right. Thank you very much, and wishing you all the best. Thank you. Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please go ahead. Yeah. Hi, good evening, and thanks for. Hi. Yeah. Just two questions. Just a little more depth if you can provide. You said that you are going to relook the cost structure. Would you be able to help me understand what is the current gross margin or is there any aspiration that you will do? What exactly we are trying to do? Are you going to relook the entire supply chain and the channel, how we distribute? It's more on the, at the back end you will get yourself into manufacturing? No, no. I think I'm just giving you a generic response without getting into specifics. All I said that these two businesses we were driving growth. Having reached scale, I think it's a good opportunity for both the digital and the food business to look at and improve profitability. That's all. Okay. Okay. My second question is on PCNO. We have taken a few rounds of price changes. Is there any further price decline which has happened in this quarter? Not this quarter, but I mean, as I said that next year if there is again, if some deflation is there, we will be, you know, taking price drops if necessary. I don't see right now, copra is range bound. No, the reason why I was talking to someone in the South and he gave me classic reason that the loose versus pack, the difference is now almost INR 14- INR 15 per liter. Maybe in that context, the relevance for that end consumer and obviously I'm comparing this in the highly penetrated market, which is South. I mean, coconut is a very strong brand equity there. That's why I wanted to check with you that is there any such vibes you are getting on ground. We have a very robust pricing model. We as you know also we are, you know, we have a significant, you know, our current pricing model indicates that the pricing is extremely right, and that's what I alluded to during the opening remarks, that finally we have got the pricing right. As you know, there is a six to eight week lead time for the price to be discovered in the market by the consumers because of all the stocks you have between factory, C&FA, distributor and retail. Our pricing is absolutely right. That's the reason we are seeing a bump up in volumes in Parachute. That's the reason we are despite so-called high inflation and rural stress, we are seeing a increase in market share in Parachute, and that gives us the confidence that we will be able to deliver the medium-term aspiration of Parachute volumes in the immediate term. Sure. That's helpful. Thank you, and all the best. Thank you. Reminder to the participants. Anyone who wishes to ask a question may press star and one. The next question is from the line of Harit from Investec. Please go ahead. Yeah, good evening. Harit? Yes, perfect. Okay, great. I just had, just two, three questions. You know, you know, one was on premium personal care. I just wanted to understand, you know, with Livon and Set Wet, you know, it's been a fairly volatile journey. It seems like, you know, the brands are now kind of, you know, growing at a fairly good clip. I just wanted to get your sense on, you know, how do you view these brands, over the next two, three years? You know, any learnings which you've got from your digital first portfolio that you think could apply to these? You have been applying to these and, just an outlook. Sorry to interrupt you, Mr. Harit. Your Mr. Harit. Your audio is not coming clear from your line now. Please use the. No. Yeah. I've heard this. I think. Okay, let me respond to this and then see, okay. If you look at the premium personal care portfolio, I think there is male grooming, there is serums, and there is participation in body lotion, skincare. Yes, I think it was a volatile journey because of certain reasons, but especially during COVID, between 2020 and 2022, the entire category because it was discretionary and it was some of it was linked to outdoor, you know, the fact that we move out. That I think has stabilized now. In the case of Livon or body lotion and on, we have crossed the pre-COVID benchmark in male grooming and aligned with almost the pre-COVID benchmark. I think we now have a broad operating model. There is a significantly robust demand generation model and a channel mix, which is there. We are pretty confident that in this part of the portfolio, we should be able to deliver +20% if not higher growth in the next two to three years. I think because we now have what I call a kind of a model, which is a repeatable model of growth, which is now embedded into the system. I think as we scale up our portfolio, I mean, as I have mentioned earlier in the past, that in the cosmetic and chemist are the channels which we were under leveraged. We have started our journey in terms of having a larger presence in cosmetic and chemist in the urban area, just like we have done in food. Food obviously has been a far higher and a more aggressive play as far as the food DTM is concerned. Thirdly, you're absolutely right. I think some of the learnings, I would believe that our expertise today in digital marketing or a digital quotient of our brands, given our experience in our digital brands and therefore the learning that has come from them into the mothership, that has also helped in delivering this sustainable, profitable growth in these brands. Great. Great. The second question was, you know, on the international business. Yes. Maybe we can maybe Pawan can help with that. You know, you see three-quarters of, you know, pressure on the margins. You know, based on, you know, your outlook on, you know, how the impact of, you know, currency depreciation and, you know, in some of these markets you play out, you know, where do till when do you see some of these pressures kind of alleviating? Will it take a couple more quarters for it to kind of pan out? It's very difficult to sort of project the currency trajectory. Large part of depreciation happened starting from quarter two. At least we hope that till quarter one, there will be some hit, and subsequent to that, there will be that will be coming in the base. Largely it is on account of Bangladesh, where we have seen a very, very sharp depreciation from the levels of 85, 86 to about 105. That is what is leading to two sort of hit. One is in a transaction hit, which is impacting the gross margin of the business over there. Secondly, when we translate that into at INR level, that is giving a second level of hit. In fact, that overall level is approximately 2% to 3% of profitability that is getting diluted on account of this translation hit of Bangladesh currency. Got it. Got it. The last question was on, you know, a slightly longer term one on the margins at a consolidation level. You know, it seems like, you know, there are obviously one of the key focuses over a long term is diversification. And in that structure, you have a growing foods portfolio, which is growing faster than the overall business, as well as a digital-first portfolio, which is growing faster than the overall business. Both these have inherently lower margins to start with at an EBITDA level Is the best way to look at this business from a consolidated level over a say three, four-year perspective is, you know, you're happy to keep margins in the broad range and just strive for, you know, for revenue growth to improve diversification. Is that the, is that the playbook we should look for? If you look at it, what we are saying is that by FY24, in foods we should be about INR 85- INR 2,000 growth. We're also saying that digital first brand is about INR 42- INR 500 growth. If both these land together, then the dilution in the food business will be made up more than what is required through the digital first business, because gross margin of that business is very, very high. If you are able to land this together by FY24, we don't think there's going to be any stress on the margin side. Secondly, also on the foods, whichever products we are coming up with, those definitely have margins which is better than the existing portfolio. Just to give you a sense, when we entered into oats has a better margin than oil. When we entered into value-added foods, those foods has the potential of having gross margins better than those. Whenever we are extending our portfolio, gross margin is only accretive. From a portfolio perspective, of course, foods margin is lower. If both the portfolio of digital first and foods, we are able to achieve our aspiration, I don't think there's going to be a challenge from a margin standpoint. Also I want to add to that is that if you look at the premium personal care portfolio, which is also expected to grow at +20%, that's also high margin. If you look at, if I just want to address the question directly that if there is no concern that a blended gross margin of a business will, you know, get diluted just because our food journey has got accelerated. Having said that, we also have a task in terms of improving the gross margin in the foods also, which Saugata alluded about in the previous question. Therefore, if all these things land together, I don't think there's going to be any stress on the gross margin at the portfolio level. How about, you know, that translating at an EBITDA margin level? I mean, my question is more from a slightly longer term, you know, basis. Is the idea to drive sustainable kind of revenue growth, get the diversification going as you have so successfully over the last two years, and keep that EBITDA margin band in that 18%-20% range, you know, plus minus something in the 19 in the numbers? Is that the longer term playbook or, you know, you keep driving operating leverage and can still see an improvement there? At a standalone level, your overall margins are even lower than the international. My thesis was that you could continue to see expansion over the longer term, just wanted to get your sense on how you're thinking through it. Clearly, if you look at it, from operating margin standpoint, we used to guide about 17% to 18%, then. Right. Improved it to about 18%-19%. As we speak, we believe that this year we should be ending anywhere between 18%-19%. Having said that, if you ask me from a two to three-year perspective, is there a possibility of a further improvement in the operating margin? Answer is actually yes, because there could be an improvement in the mix of the portfolio in the India business. Secondly, also in international business, there are some territories where we expect that the margins can go up further. If I were to take a view to to three years out, yes, there's quite a possibility of, you know, operating margin going up further. Having said in the near term, we would rather focus more in terms of our volume growth and market share, and therefore if we have to invest more to get that, we would do that and really not chase short-term margins, which could be let's say in the FY24 if I talk about. Two to three years out, definitely possible. See, I think, you know, if you look at the international business specifically, there is a significant profit pool to be had in especially Middle East and North Africa, where we were marginal players, but we are now growing very aggressively. Yeah. Therefore, while Bangladesh is, you know, maybe at a certain margin, but both in Vietnam and this one, which are growth businesses, I think there is enough opportunity. As I explained earlier that ultimately once we get scale businesses in the diversified portfolio, the blended margin is no way going to be lower and with economies of scale. As you move from, I think someday, I mean, you will move from 19% plus and then start moving ahead beyond that. Very clear. Very clear, sir. Thank you so much. Thank you. Yeah. That's it. Yeah. Thanks. The next question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead. Thanks for taking my question. My first question was, Saugata, do we have any revision with respect to our food business target, say, over the next three years? What would be that number be now? No, I mean, I have given a FY24 aspiration. We are going on track. I mean, it's fine. I mean... By FY24, is there a number? No, no. Sheila, we first want to reach FY24 target of INR 85-2,000 crores. From there on, we recalibrate FY26, FY27. Yeah. All right. The second question again was in the digital first brands. I actually came across, a Beardo store at Ahmedabad Airport, and it was very interesting to see the kind of SKUs which have been brought up there. Is there any other incremental plan with respect to the physical expansion of the Beardo stores and also the other digital brands? I think as far as the Beardo store is concerned in Ahmedabad Airport, it's a prototype. It's a quick haircut as an idea and for you to also experience the brand because we are, you know, merchandising some of the products out there. It's still in the prototype stage. We are looking at various prototypes to expand because the way we look at Beardo, you know, it stands for a certain cult. It's the Harley-Davidson of male grooming. That's how, what the brand stands for. Therefore, just as the way the journey of that brand happened, in our own small way, because we are no way that big, we are a very small brand. We will, you know, basically chart the path for it. As far as the other brands are concerned. Which is J ust Herbs. Now we are prototyping. Each of the brand is prototyping with beauty advisors in GT, some of the, you know, in some outlets, in some markets, one or two markets. We will see if that model works well, we will expand that model. Understood. My third and final question was, this particular quarter, what percentage of the portfolio gained market share? Just an aggregate number here. Most of the brands gained market share. There was nothing. I mean, none of the big brands lost market share. Understood. Thank you. Thank you. Thank you. Reminder to the participants, anyone who wishes to ask a question may press star and one. Participants, to ask a question, you may press star and one. The next question is from the line of Vishal Punmiya from YES Securities. Please go ahead. Thank you. Just two questions. Firstly, on other income this quarter, any specific reason for a sharp jump from INR 22 crores to INR 40 crores? There are largely two reasons. One is, with the rising interest rates, the yields on the surplus have improved by about 200 basis points. Because of that the investment income has gone up. Secondly, there is, FX depreciation gain on the receivables on the balance sheet. These are largely two reasons because of which, other income has moved from INR 22 crores to INR 40 crores. Understood. Secondly, just a data point, if you can also share the value headed aerosols volume market share for this particular quarter? You have shared the value share in the PPT, but if you can also share the volume market share? As you know, the last two years we have moved to our internal and external KPIs on value. The reason is, as I said, that our objective was to bridge the gap between value share and volume share, that's the only KPI we measure. Okay. We wouldn't have lost any share in terms of volume, right? This particular quarter. We haven't. Okay. Okay, thank you. Just, lastly on this, the new launch, the Saffola or Saffola Munchiez, I noticed that the manufacturer is also a player, a very active player in the market, has its own brand for that particular product, and they are also becoming very, very aggressive in the FMCG space. How do we kind of, basically, set areas of distribution for this particular product? They have a very similar product. While that product might not have millets in it, but it's a very similar looking product that they have. See, by that logic, let me tell you, all CPG players manufacture their own brand. Ultimately, I am delivering a product under the Saffola brand name. I will not invest till I get critical mass in my own manufacturing, so it doesn't bother us. That happened with all categories. If you look at some of the other food products, whether it's honey, whether it's this one, there would be mayonnaise, for example, the guy who manufactures mayonnaise also manufactures another for another player. It's a standard practice, operating practice in an entire global FMCG world. We have our own quality system, we have our own IPR and therefore it's fine. Okay, there is no parameter as such in terms of online or offline, reach, whether it's e-com or whether it's general trade for this kind of setup, right? No, no. I am getting the commodity to do as a third party. That's fine. I mean, absolutely there's nothing to do with this one. The demand now is, I mean, I don't know which brand you are referring to, but we, then whoever is manufacturing is manufacturing as a third party. That's about it. Understood. Understood. Thank you and best of luck. Thanks. Thank you. The next question is from the line of Amit Sachdeva from UBS. Please go ahead. Yeah, thanks for giving me an opportunity. Team, I would like to know that, you have mentioned rural recovery, I think, several times in your opening remarks. Have you seen any incremental data points in last one month, apart from the budget, which support our, you know, thesis on rural recovery? If you have to measure some pointers for the next three to six months, what should be those pointers on that? If you can, you know, help us to give a thought process on this. Okay. I think the first thing which we are looking at is if you look at the last six months, every month there was a sort of a sequential decline month-on-month, which has got arrested. Okay? Therefore, all we are saying is the worst is over. If I look at some of the external factors, if you look at it, one is overall inflation. As you know that whenever there is high inflation, food especially food inflation, people tend to titrate or downgrade on FMCG. I believe that we are coming out of that worst, you know, high level of inflation. Secondly, I think the Rabi crops is okay. The government is committed to investing behind rural infrastructure. If I look at these indicators should indicate some kind of a recovery. I'm not saying it's going to be harsh stick. It may be a gradual recovery. What I believe, just like I'm saying the worst of commodity inflation and volatility is over. Of course, in today's world you can't say anything because of any black swan can happen anytime. All trends point towards a better gradual recovery. Okay. apart from the inflation cooling off, do you see any trends which support higher income for the rural people? I think, the agricultural yield and also the fact that there's a going to be significant if you look at the budget, the government continues to invest, you know, you know, significantly behind infrastructure in, also in rural. I think it are all positive signs. It's very difficult to say that when will the recovery, what is the extent of recovery? I think if I look at it, the positive drivers outnumber the negative drivers as far as consumption is concerned. Okay, sir. Got it. Thanks a lot. Wish you all the best. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments. To conclude, the sequential improvement in domestic volume growth and earnings delivery so far this year is encouraging. With emerging green shoots on the demand front, we expect a stable growth in core and will continue to drive accelerated growth in food, premium personal care and digital first portfolios. The international business has remained robust in a challenging environment, and we are very confident of maintaining a healthy growth trajectory. Going ahead, we will ensure that we optimally invest and stay focused on execution and aim to keep inching up the pace of growth in volumes, top line and profits in the quarters ahead. If you have any further queries, please feel free to reach out to our team and they'll be happy to address the same. That is it from our side. Please stay safe and take care. Thank you. Ladies and gentlemen, on behalf of Marico Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.